1) G.R. No.

L-56077

February 28, 1985

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
COURT OF APPEALS, SPOUSES PRUDENCIO MAXINO and TARCIANA MORALES,
PEDRO GONZALES, ROGELIO AQUINO, Minor represented by his father, Manuel Aquino,
and ALEJANDRO, SOCORRO, MERCEDES, CONCHITA, REMEDIOS and FLORA, all
surnamed CONSOLACION, respondents.
Silvestre Loreria, Jr. for respondent spouses Prudencio Maxino and Tarciana Morales.

AQUINO, J.:
This case is about the validity of the registration of 885 hectares of public forestal land located
in Mulanay, Quezon.
In Land Registration Case No. 81-G of the Court of First Instance at Gumaca, Quezon, Judge
Vicente del Rosario on March 21, 1961 rendered a decision, ordering the registration of said
land, Lot 1, allegedly located at Barrio Cambuga (Anonang), Mulanay, in the names of the
spouses Prudencio Maxino and Tarciana Morales, less 200 hectares which should be
registered in the names of the Heirs of Lorenzo Consolacion (72, Record on Appeal). The
decision became final and executory. A decree and an original certificate of title were issued.
More than eight years later, or on June 20, 1969, the Republic of the Philippines filed with the
Gumaca court an amended petition to annul the decision, decree and title on the ground that
they are void because the land in question was still a part of the unclassified public forest.
Moreover, the possessory information title relied upon by the Maxino spouses covered only 29
hectares of land and not 885 hectares. The petition was verified by the Acting Director of
Forestry.
The Maxinos opposed the petition. After a hearing on the merits, Judge Agana denied the
petition in his order of September 8, 1970. That order was served upon the assistant provincial
fiscal on September 16, 1970 and on the special counsel, Jaime Dispo of the Bureau of
Forestry, on November 26, 1970.
A copy of the order was transmitted by the fiscal to the Solicitor General's Office only on
September 2, 1971 or nearly one year from the issuance of the order. Twenty-two days
thereafter or on September 24 the Solicitor General appealed from that order and filed a
motion for extension of time within which to submit a record on appeal. The appeal was given
due course.
In its decision dated October 24, 1980 the Appellate Court through Justices Asuncion, Porfirio
V. Sison and Sundiam dismissed the petition because the 1970 order had allegedly long
become final and unappealable. The Solicitor General appealed to this Court.
That is the issue to be resolved first: whether the appeal of the State from the trial court's 1970
order of denial was seasonably made. The Appellate Court held that the service of the order on
Dispo, as special attorney, was binding on the Solicitor General's Office. Consequently, the

record on appeal, which was filed after thirty days from the service of the order upon Dispo,
was filed out of time.
We hold that the reglementary thirty-day period for appeal should be reckoned from the time
the Solicitor General's Office was apprised of the 1970 order of denial and not from the time
the special counsel or the fiscal was served with that order. These representatives of the
Solicitor General had no power to decide whether an appeal should be made. They should
have referred the matter to the Solicitor General.
In the designation of Dispo as special counsel by Solicitor General Barredo, approved by
Secretary of Justice Teehankee, it was specified that he should consult the Solicitor General
on all questions, legal and factual, regarding the case. The question of whether an appeal
should be made could only be decided by the Solicitor General's Office.
The 1969 petition to annul the decision, decree and titles was filed by Solicitor General Felix V.
Makasiar, Assistant Solicitor General Antonio A. Torres and Solicitor Alicia Sempio-Diy.
Consequently, the Solicitor General's Office should be served with the final order disposing of
the petition and should not be bound by the service on his surrogates, the special counsel and
the fiscal (Republic vs. Polo, L-49247, March 13, 1979, 89 SCRA 33; Republic vs. Mendoza, L49891, October 31, 1983, 125 SCRA 539).
The fact that after the record on appeal was filed on time, the Solicitor General's Office was
late in filing the amendments to it is of no moment. In exceptional cases, like the instant case,
the interest of justice may warrant waiver of the rules (Republic vs. Court of Appeals, L-3130304, May 31, 1978, 83 SCRA 453).
In this case, where it is contended that the registration is void allegedly because public forestal
land was registered and the State sought to declare the decision void, the Government should
not be estopped by the mistakes or errors of its agents (Gov't. of the U. S. vs. Judge of 1st
Inst. of Pampanga, 50 Phil. 975, 980; Bachrach Motor Co. vs. Unson, 50 Phil. 981, 990; Go
Tian An vs. Republic, 124 Phil. 472, 475; Republic vs. Aquino, L-33983, January 27, 1983, 120
SCRA 186, 191-192).
Now, as to the merits of the case. It is incontestable that Lot 1, the 885-hectare area registered
by the Maxinos, is within the public forest, not alienable and disposable nor susceptible of
private appropriation. Its inclusion in the public forest was certified by Director of Forestry
Florencio Tamesis on July 6, 1940, as per Land Classification Map No. 1386, Tayabas Project
No. 16-E of Mulanay, Exhibit C-Annulment, and as shown in the report and testimony of
Lorenzo R. Tria, a forest station warden (Exh. B-Annulment; 7, 10-15 tsn March 5, 1970). Tria
recommended that the title of the Maxino spouses be annulled (Exh. B-Annulment).
The certification was reiterated by the Director of Forestry on May 20, 1948 as per Land
Classification Map No. 1516, No. 16-E of Mulanay, Quezon, Exhibit 1-A-Director of Forestry,
and as shown in paragraph 6 of the report of Forester Emerson B. Abraham who
recommended that the opposition to the registration entered by the Director be sustained (Exh.
1-Director of Forestry; Exh. Q, Report of Land Investigator Serapion Bauzon).
The basis of the claim of the Maxinos is a Spanish title, Exhibit G, a gratuitous composition title
or adjustment title issued on July 30, 1888 to Prudencio Tesalona pursuant to the Royal
Decree of December 26, 1884 for 29 hectares of pasture land (pasto de animales) allegedly
bounded by the Yamay and Campalacio Creeks. *

There is a monstrous and bewildering discrepancy between the area of 29 hectares and the
actual area of the land bounded by the Yamay and Campalacio Creeks which is 970 hectares
as surveyed in 1959 (Exh. D). We have no hesitation in saying that the composition title erred
in stating the boundaries. The trial court grievously erred in applying to this case the rule that
the area comprised in the boundaries should prevail over that stated in the moniments of title.

The Maxinos have the burden of proving that the title justified the considerable increase in
area. They have not shown that a title for 29 hectares could be a valid title for 970 hectares.
The boundaries and areas stated in Tesalona's tax declarations reveal that a different land was
covered thereby. The title states that the 29-hectare land was located in Barrio Yamay. In his
tax declarations it is stated that the land was located in Barrio Cambuga, now Anonang.

Tria averred in his report and testimony that the Yamay and Campalacio Creeks mentioned in
the composition title really refer to the Banguian and Mamba creeks. This would mean that the
actual area claimed by Maxino was only 371 hectares, not 970 (Exh. B-Annulment; 27-30 tsn
March 5, 1970).

His 1906 tax declaration is for a parcel of land whose boundaries are not the Yamay and
Campalacio Creeks but it was bounded by the Yamay Creek and the lands of Maximo
Tesalona, Emiterio Tesalona and Felix Aguilles, with an area of 120 hectares (Exh. I). On the
other hand, his 1919 and 1921 tax declarations are for land with the same boundaries but with
an area of 36 hectares only (Exh. I-2 and I-3).

That would also explain why in the document, Exhibit H, presented by the Maxinos, mention is
made of "paligawang 'Manba' ".
The unreliability or dubiousness of the composition title is evident from the sale executed by
the heirs of Prudencio Tesalona in favor of Tarciana Morales-Maxino (Exh. F).
Prudencio Tesalona died in 1905. He was survived by his two children Maria and Lucila. On
September 24, 1935 the two heirs, without executing an extrajudicial settlement of Prudencio's
estate and adjudicating the said 29-hectare land to themselves, executed an " absolute sale"
of the land in favor of Tarciana Morales-Maxino (Exh. F), the wife of applicant Prudencio
Maxino who was Maria's son and the grandson of Prudencio Tesalona.
That curious document is not a sale at all. It is a "quit-claim". It is stated therein that in
consideration of P200 the Tesalona sisters "releases and forever quitclaim unto the said
Vendee" the 29-hectare land described in the composition title (Exh. F).
As an indication that the Tesalona "vendors" were not certain that their title was good, it was
stipulated as an "express condition" that the said vendors had no obligation of warranty for "the
premises hereby sold by them, the Vendee hereby expressly releasing the Vendor(s) from all
duty of defending the Vendee against all persons now claiming, or who may hereafter claim, to
have a better right and title thereto, and assuming all the risk of eviction by superior title" (Exh.
F).
It was further stipulated "that in the event that any third person shall succeed in establishing
right or title to said premises or to any portion thereof superior to that of the grantor and in
lawfully dispossessing the Vendee therefrom the Vendee shall not be entitled to
reimbursement from the Vendor of the sum of TWO HUNDRED PESOS which constitutes the
consideration for these presents, or of any part thereof, or to damages" (Exh. F).

The 1948, 1958 and 1961 tax declarations use the boundaries Campalacio and Yamay Creeks
but the area of the pasture land is 100 hectares only, a far cry from the 970 hectares as
surveyed (Exh. I-4, I-5 and I-6).
It is axiomatic that public forestal land is not registerable. Its inclusion in a title, whether the title
be issued during the Spanish regime or under the Torrens system, nullifies the title (Director of
Lands vs. Reyes, L-27594 and Alinsunurin vs. Director of Lands, L-28144, November 28,
1975, 68 SCRA 177, 194-5; Director of Lands vs. Salazar, G. R. No. 50340, December 26,
1984).
Possession of public forestal lands, however long, cannot ripen into private ownership
(Director of Forestry vs. Munoz, L-24796, June 28, 1968, 23 SCRA 1183, 1199; Director of
Lands vs. Salazar, supra).
The oral evidence does not bolster the case at all for the applicants. Applicant Prudencio
Maxino testified that the lot he was seeking to register has an area of more than seventy
hectares (8 tsn Jan. 11, 1961). He purchased the lot from his aunt and mother, as shown in the
deed of September 24, 1935, Exhibit F (9).
He testified that the Mamba Creek is also known as Yamay Creek (13). The land was grazing
or pasture land (15). Thirty-one squatters occupied the land (5 tsn March 6, 1961). He did not
know that the land had an area of 29 hectares in 1935 when he bought it (6). He came to know
the area of the land when it was surveyed. He was not present when it was surveyed (6).
Another witness, Fortunato Naadiego, 76, testified that the land was possessed during the
Spanish regime by his stepfather, Pedro Tesalona, the owner, not Prudencio Tesalona, the
holder of the adjustment title (11).

The Maxinos contend that Tesalona's gratuitous adjustment or composition title (as
distinguished from an onerous adjustment title) should prevail in determining the Identity of the
disputed land. This assertion is untenable in the light of the notorious discrepancy between the
area of 29 hectares stated in the title and the 970 hectares now claimed as the real area (885
hectares for Lot 1 and 84 hectares for Lot 2 which is not involved in this case).

Spanish titles are not indefeasible (Director of Forestry vs. Munoz, supra, p. 1198). The instant
case bears similarities to Ramirez and Bayot de Ramirez vs. Director of Lands, 60 Phil. 114,
where an adjustment title issued in 1896 was held to be void because it was fraudulent and it
covered public forestal land not subject to registration. As to void composition or patent issued
in 1898, see Testagorda vs. Commanding General, 6 Phil. 573.

The most that can be said for Tesalona is that his gratuitous adjustment title granted him
possessory rights over pasture land with an area of 29 hectares but not ownership over 970
hectares of grazing land. As to the requirements for an adjustment proceeding under the Royal
Decree of December 26, 1884, where the area in hectares, not the boundaries, is important,
see Ventura, Land Registration and Mortgages, pp. 1719.

Incidentally, it may be mentioned that Presidential Decree No. 892 effective February 16, 1976
discontinued the use of Spanish titles as evidence in land registration proceedings.
WHEREFORE, the order of Judge Agana, the decision of the Appellate Court and the decision
of Judge Del Rosario dated March 21, 1961 are reversed and set aside. The application for
registration of Lot 1, Psu-175880 is dismissed. No costs.

2) G.R. No. L-61539 February 14, 1986

DIRECTOR OF LANDS and DIRECTOR OF FOREST DEVELOPMENT, petitioners,
vs.
LOPE GUZMAN RIVAS, PACIFICO V. VIJANDRE, FERNANDO A. PASCUA, and COURT OF
APPEALS,respondents.
AQUINO, C.J.:
This is a land registration case involving what the Republic of the Philippines claims to be
grazing land, a part of the forest reserve.
The evidence shows that on March 14, 1873 the Alcalde Mayor and judge of the Court of First
Instance in Tuguegarao, Cagayan purportedly granted to Domingo Bunagan a possessory
information title for a tract of land,called Nottab, "3,500 brazas de largo y 3,000 brazas de
ancho", "destinado al pasto de sus ganados" y bajo la condicion de sin perjuicio del derecho
que el Estado o otro tercero pudiera tener en referida finca rustica" (Exh. I and K).
The Gaceta de Manila dated November 3, 1885 mentions Bunagan as having obtained a
"composicion gratuita" for a parcel of land in Enrile, Cagayan (Exh. J-1) or a gratuitous
adjustment title as distinguished from an onerous adjustment title. **
What happened to the Nottab land? The conflicting evidence of the oppositor Cagayan Valley
Agricultural Corporation (Cavaco) and petitioner Pacifico Vijandre shows that two persons, the
brothers Luis Guzman Rivas and Lope Guzman Rivas, sons of Pablo Guzman, played decisive
roles in its disposition.
The evidence is conflicting because, according to Cavaco's evidence, the whole land was sold
to Luis Guzman Rivas and later to Cavaco, whereas, according to Vijandre's evidence, only a
portion was sold to Luis and the remainder was sold to Lope Guzman Rivas who in turn sold
portions to Vijandre and Fernando A. Pascua.
The Solicitor General's view is that the whole Nottab land, whatever its area, is forestal and
grazing land, and consequently, was inalienable land and, therefore, all supposed sales
regarding that land were void.
According to Cavaco's evidence, after Bunagan's death, his son-in-law, Ceferino Saddul, as
apoderado of Bunagan's heirs, sold the land to one Manuel Guzman sometime in 1904 or
1905 or 1908.
The administratrix of Manuel Guzman's estate, with the approval of the probate court, sold the
land in 1934 to Luis Guzman Rivas who died in 1944. The land passed to his widow, Dolores
Enriquez, who sold the northern portion of the land to Saturnino Moldero in 1944 and the
southern portion to Rafael Gonzales in 1951.
Moldero in 1948 sold his northern portion to the spouses Antonio and Josefa Estrada. In 1951
the Estrada spouses and (Gonzales sold the land to Cavaco (Exh. 12-A to 15Pascua, 242
Joint Record on Appeal).
The trial court and the Court of Appeals in a land registration case adjudicated to Cavaco
1,222 hectares of the Nottab land. It is the registered owner of the land. Right or wrong that
decision is the law of the case. (Cagayan Valley Agricultural Corporation vs. Director of Lands,
CA-G.R. No, 24931-32, December 9, 1960).
The trial court correctly held that the said adjudication means that the respondent herein
cannot use anymore in this case the supposed 1873 informacion posesoria and the 1885
composicion gratuita as bases of their application for registration. The reason is that said
Spanish titles were already used in the Cavaco case.

Under those Spanish titles a land grant could not exceed 1,000 hectares (Director of Lands vs,
Reves, L-27594, November 28, 1975, 68 SCRA 177, 191 and other cases). It may be repeated
that Cavaco obtained more than 1,000 hectares by virtue of the said Spanish titles.
Parenthetically, it may be stated that Presidential Decree No. 892 since 1976 discontinued the
use of Spanish titles as evidence in land registration proceedings.
It is the supposed remainder of Bunagan's land that is now involved in this case, the portion
transferred to Lope Guzman Rivas as differentiated from the Cavaco land which came from
Lope's brother Luis. It should be stressed that according to the Cavaco case the whole land
was sold to Luis and, therefore, no remainder could have been transferred to Lope.
On the other hand, according to Vijandre's evidence in this case, on July 26, 1915, Manuela
Bunagan, the sole heir of Domingo, sold to Pablo Guzman for Pl,000 the remainder of the land
in Nottab, Enrile, Cagayan, "una parcela de pasto de ganaderia", covered by Tax Declaration
No. 626 (Exh. H).
Pablo Guzman died in 1927. The Nottab land was inherited by his son, petitioner Lope
Guzman Rivas, who leased the land for grazing purposes to other persons. Lope has been
residing in Makati, Metro Manila since 1961 because he has a heart ailment.
In 1958 about 800 hectares of the said land were sold by Lope to Ignacio Pascua who in 1962
sold the same portion to his son, Fernando.
Lope Guzman Rivas and Vijandre filed in May, 1968 an application for the registration of two
parcels of land located at Sitio Nottab, the same Nottab land previously applied for by Cavaco.
It is covered by Plan Psu-178846, embracing thirteen lots with an area of 1,033 hectares, and
Plan Psu-179101 covering fifteen lots with an area of 890 hectares, or a total of 1,92.7
hectares.
Before the application was filed, Lope Guzman Rivas sold to his co-petitioner Vijandre l/2 of
the entire land at P50 a hectare. Vijandre undertook to finance the registration of the land.
Should the registration of the land not materialize for causes not imputable to Vijandre, then
Lope would return to mall scashadvances(9-16, Joint Record on Appeal).
The learned trial court declared the disputed land public land and dismissed the applications of
Lope Guzman Rivas and Vijandre and the claims of Pascua and Cavaco.
The Appellate Court reversed the trial court's decision. It granted the application of Lope and
Vijandre, except with respect to Lot No. 13, which was already covered by OCT No. 0-393. The
Directors of Lands and Forest Development appealed to this Court. Lope Guzman Rivas and
Vijandre did not file any appellees' brief.
The Solicitor General contends that the Appellate Court erred (1) in not declaring that the
disputed land is part of a forest reservation; (2) in not finding that Lope Guzman Rivas and
Vijandre and their predecessors have not been in the open, continuous, uninterrupted,
exclusive and notorious possession of the disputed land and that their possession was not in
the concept of owner: (3) in not finding that Domingo Bunagan's Spanish titles were not
authentic and (4) in not finding that the 1960 decision in favor of Cavaco is not res judicata.
On the other hand, lawyer Pascua argues (1) that the disputed land was already private in the
hands of Domingo Bunagans (2) that portions of said land, 1,222 hectares and 9 hectares,
were titled in the names of Cavaco and Melardo Agapay (Benjamin V. Pascua) respectively;
(3) that the pasture lease agreements did not convert private land into public land and (4) that
Bunagan's Spanish titles were authentic and valid.
We hold that the disputed land is inalienable public grazing land, being a part of the forest
reserve. It is part of Timberland Project No. 15-A of Enrile, Cagayan. It is included in the
Bureau of Forestry Map L. C. 2263, comprising the Timberland of the Cagayan Land
Classification, containing an area of 8,249 hectares, situated in Enrile, Solana and Amulong,
Cagayan. It is non-registerable (Exh. 2-Rep.). It cannot be appropriated by private persons. It
is not disposable public agricultural land.
Said land is a part of the to forest reserve under Presidential Proclamation No. 159 dated
February 13, 1967. It is intended for "wood production watershed soil protection and other

forest uses" (Exh. 1-B and 7, Rep.; 63 OG 3364). The reservation was made prior to the
instant 1968 application for registration.
Applicant Lope Guzman Rivas and oppositor Pascua and their predecessors have always
treated the 1,923 hectares as pasture land. Portions of the land had been the object of pasture
lease agreements with the Bureau of Forestry. Among the lessees were oppositor Fernando A.
Pascua himself, Eliseo Lasam and J.T.Torres, Jr. (Exh. 3 and 4, Rep.).
The 1960 and 1968 tax declarations of applicant Lope Guzmian Rivas describe the 2,000
hectares of land in question as for "pasture exclusively", meaning it is grazing land (Exh. R and
S). Similarly, the 1960 and 1962 tax declarations submitted in evidence by oppositor Pascua
describe 790 or 767 hectares of the land as "pasture land" (Exh. 27 and 28Pascua).
We have stated that the supposed possessory information title issued in 1873 to the original
claimant, Domingo Bunagan, describes the land as "una estancia de ganado al terreno"
(grazing land), or "un terreno destinado al pasto de sus ganados" or la estancia para ganados
denominada Nottab".
The application for the possessory information title was approved "bajo la condicion de sin
perjuicio determination derecho que el Estado o otro tercero pudiera tener en referida finca
rustica" (Exh. 1). (Note that Exhibit J, the 1885 resolution published in Gaceta de Manila, is not
a composition title at all).
Manuela Bunagan, the supposed heir to Domingo Bunagan, sold in 1915 the 2,000 hectares in
question to Pablo Guzman at fifty centavos a hectare as "una parcela de pasto de ganaderia
(Exh. H). Similarly, Ignacio A. Pascua bought from Lope Guzman Rivas the 800 hectares in
1962 as "a parcel of pasture land" (Exh. I Pascua).
Grazing lands and timber lands are riot alienable under section 1, Article XIII of the 1935
Constitution and sections 8, 10 and 11 of Article XIV of the 1973 Constitution. Section 10
distinguishes strictly agricultural lands (disposable) from grazing lands (inalienable).
Lands within the forest zone or timber reservation cannot be the object of private ownership
(Republic vs. Animas, L- 37682, March 29, 1974, 56 SCRA 499; Director of Forestry vs.
Munoz, 132 Phil. 637; Republic vs. Court of Appeals, G.R. No. 56077, February 28, 1985, 135
SCRA 156 and other cases).
WHEREFORE, the decision of the Appellate Court is reversed and set aside. The application
for registration of Lope Guzman Rivas and Pacifico V. Vijandre and the counter-application of
lawyer Fernando A. Pascua are dismissed. No costs.
SO ORDERED.

G.R. No. 84464

June 21, 1991
SPOUSES JAIME AND TEODORA VILLANUEVA, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and CATALINA I. SANCHEZ, respondents.
The Regional Trial Court of Cavite dismissed a complaint for the annulment of a deed of sale,
holding that it was not spurious. It was reversed by the Court of Appeals, which found that the
vendor's signature on the questioned document had indeed been forged. The petitioners are
now before us and urge that the decision of the trial court be reinstated.
In her complaint below, herein private respondent Catalina Sanchez, claiming to be the widow
of Roberto Sanchez, averred that her husband was the owner of a 275 sq. meter parcel of land
located at Rosario, Cavite, which was registered without her knowledge in the name of the
herein petitioners on the strength of an alleged deed of sale executed in their favor by her late
husband on February 7, 1968. Involving the report of a handwriting expert from the Philippine
Constabulary Criminal Investigation Service, who found that the signature on the document
was written by another person, she prayed that the deed of sale be annulled, that the
registration of the lot in the name of the petitioners be cancelled, and that the lot be
reconveyed to her.1
In their answer, the petitioners questioned the personality of the private respondent to file the
complaint, contending that the late Roberto Sanchez was never married but had a commonlaw wife by whom he had two children. On the merits, they claimed that Roberto Sanchez had
deeded over the lot to them in 1968 for the sum of P500.00 in partial settlement of a judgment
they had obtained against him. They had sued him after he had failed to pay a P1,300.00 loan
they had secured for him and which they had been forced to settle themselves to prevent
foreclosure of the mortgage on their property.2
On the petitioner's motion, the trial court required the examination of the deed of sale by the
National Bureau of Investigation to determine if it was a forgery. Trial proceeded in due time,
with the presentation by the parties of their testimonial and documentary evidence. On June
25, 1986, Judge Alejandro C. Silapan rendered judgment in favor of the petitioners.
In his decision,3 the trial judge rejected the testimony of the handwriting experts from the PC
and the NBI, who had both testified that the standard signature of the late Roberto Sanchez
and the one written on the alleged deed of sale "were written by two different people." He cited
Go Fay v. Bank of the Philippine Islands4 in support of his action. Explaining the supposed
differences between the signatures, he said that Roberto Sanchez was "under serious
emotional stress and intensely angry" when he reluctantly signed the document after he had
lost the case to them, "with the added fact that they only wanted to accept his lot for P500.00
and not for the settlement of the entire obligation of P1,300.00." At that, he said there were
really no fundamental differences between the signatures compared. Moreover, the signatures
examined were from 1970 to 1982 and did not include those written by Roberto Sanchez in
1968.

The decision also noted that Roberto Sanchez did not take any step to annul the deed of sale
although he had knowledge thereof as early as 1968. He thus allowed his action to prescribe
under Article 1431 of the Civil Code. As for the contract of a marriage submitted by the private
respondent, this should also be rejected because although the document was dated
September 21, 1964, the Torrens certificate issued to Roberto Sanchez over the subject land
on August 25, 1965, described his civil status as "single." It was also doubtful if she could bring
the action for reconveyance alone, even assuming she was the surviving spouse of Roberto
Sanchez, considering that he left illegitimate children and collateral relatives who were also
entitled to share in his estate.
As earlier stated, the decision was reversed by the Court of Appeals,5 which held that the trial
court did err, as contended by the appellant, in holding that the deed of sale was not spurious;
that the action to annul it had already prescribed; that Catalina Sanchez was not the widow of
Roberto Sanchez; and that she had no capacity to institute the complaint.
Before us now, the petitioners fault the respondent court for: a) upholding the testimony of the
expert witnesses against the findings of fact of the trial court; b) annulling the deed of sale; c)
declaring that the action to annul the deed of sale had not yet prescribed; d) not declaring the
private respondent guilty of estoppel; and e) not sustaining the decision of the trial court.
We see no reason to disturb the judgment of the Court of Appeals. It is consonant with the
evidence of record and the applicable law and jurisprudence.
The Court notes at the outset that Catalina Sanchez has proved her status as the widow of
Roberto Sanchez with her submission of the marriage contract denominated as Exhibit "A."6
That evidence rendered unnecessary the presumption that "a man and a woman deporting
themselves as husband and wife have entered into a lawful contract of marriage" and may also
explain why Roberto Sanchez could not marry the woman by whom he supposedly had two
illegitimate children, assuming these persons did exist. It is strange that the trial court should
reject Exhibit "A" in favor of the Transfer Certificate of Title describing Roberto Sanchez as
"single,"7 disregarding the elementary principle that the best documentary evidence of a
marriage is the marriage contract itself. A Torrens certificate is the best evidence of ownership
of registered land, not of the civil status of the owner.
As the surviving spouse of Roberto Sanchez, the private respondent could validly file the
complaint for the recovery of her late husband's property, without prejudice to the succession
rights of his other heirs. Parenthetically, (and curiously), although the supposed common-law
wife and her illegitimate children were never presented at the trial, their existence was readily
accepted by the trial court on the basis alone of the petitioner's unsupported statements.
Coming now to the questioned signature, we find it significant that the examination by the NBI
was requested by the petitioners themselves but in the end it was the private respondent who
presented the NBI handwriting expert as her own witness.8 The explanation is obvious. The
petitioners hoped to refute the findings of the PC handwriting expert with the findings of the
NBI handwriting expert, but as it turned out the findings of the two witnesses coincided. Both
PC Examiner Corazon Salvador and NBI Examiner Zenaida J. Torres expressed the informed
view that the signature on the deed of sale was not written by Roberto Sanchez.9
They did not conjure this conclusion out of thin air but supported it with knowledgeable
testimony extensively given on direct and cross-examination on the various characteristics and
differences of the signatures they had examined and compared.10 The trial judge said the
testimony of PC Examiner Salvador was not reliable because her examination of the document

was "done under circumstance not so trustworthy before the action was instituted." But he did
not consider the fact that her findings were corroborated by NBI Examiner Torres, who
conducted her own examination at the instance of the petitioners themselves and after the
action was instituted. It is worth noting that the competence of the two expert witnesses was
never assailed by the petitioners nor was it questioned by the trial judge. The petitioners also
did not present their own handwriting expert to refute the findings of the government
handwriting experts.
The Court has itself examined the signatures of Roberto Sanchez in the several instruments
among the records of this case, including those dating back to before 196811 and is inclined to
accept the findings of the handwriting experts. The case invoked by the petitioners is not
applicable because the differences in the signatures compared in the case at bar were, as the
trial judge found, caused not by time but by the tension gripping Roberto Sanchez when he
signed the deed of sale.
Incidentally, the petitioners have not sufficiently established the reason for such tension, which
appears to be a mere conjecture of the trial judge.1avvphi1 No proof was submitted about their
filing of the complaint against Roberto Sanchez. Petitioner Jaime Villanueva himself admitted
under oath that he did not read the decision in the case nor did he ask his lawyer how much
had been awarded against the defendant.12 Nobody testified about Roberto's state of mind
when he allegedly signed the document, and in Manila at that although the persons were
residing in Cavite. Even the witnesses to the Bilihan were not presented nor was any
explanation for their absence offered.
The explanation given by the petitioners for their delay in registering the deed of sale is not
convincing. That delay lasted for all of thirteen years. The petitioners suggest they are simple
peasants and did not appreciate the need for the immediate transfer of the property in their
name. They also say that they forgot. The evidence shows, however, that they understood the
need for registering their property for purposes of using it as collateral in case they wanted to
borrow money. It would appear that they thought of simulating the sale registering the subject
lot when their own lands were insufficient to secure a P100,000.00 loan their daughter wanted
to borrow.
Concerning the question of prescription, we find that the applicable rule is not Article 1391 of
the Civil Code but Article 1410. Article 1391 provides that the action for annulment of a contract
prescribes in four years in cases where the vice consists of intimidation, violence, undue
influence, mistake, fraud or lack capacity. The deed of sale in question does not suffer from
any of these defects. The supposed vendee's signature having been proved to be a forgery,
the instrument is totally void or inexistent as "absolutely simulated or fictitious" under Article
1409 of the Civil Code. According to Article 1410, "the action or defense for the declaration of
the inexistence of a contract does not prescribe."
Finally, petitioners invoke Article 1431 of the Civil Code and contend that the respondent court
erred in not declaring the private respondent and her late husband estopped from questioning
the deed of sale until after fourteen years from its execution. The inference that Roberto
Sanchez and the private respondent knew about the instrument from that date has not been
proved by the evidence of record. Moreover, we fail to see the applicability of Article 1431,
which provides that "through estoppel an admission or representation is rendered conclusive
upon the person making it and cannot be denied or disproved as against the person relying
thereon." Neither the private respondent nor her late husband has made any admission or
representation to the petitioners regarding the subject land that they are supposed to have
relied upon.

Our own finding is that the petitioners have not proved the validity and authenticity of the deed
of sale or even the circumstances that supposedly led to its execution by the late Roberto
Sanchez. On the contrary, we are convinced from the testimonies of the handwriting experts
that his signature had been forged on the questioned document and that he had not conveyed
the subject land to the petitioners. The deed of sale being a forgery, it was totally void or
inexistent and so could be challenged at any time, the action for its nullification being
imprescriptible. The private respondent, as the widow of Roberto Sanchez, has the capacity to
sue for the recovery of the land in question and is not estopped from doing so.
WHEREFORE, the petition is DENIED and the challenged decision is AFFIRMED, with costs
against the petitioners.
4) 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.
DECISION
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 of lis 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.
xxx
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.
xxx
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 COUNTERASSIGNMENT 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.
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.
xxx
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.
xxx
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.
xxx
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 oneyear 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.
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:
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.
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. T6595 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.

5) HEIRS OF CLEMENTE ERMAC, namely: IRENEA E. SENO, LIBRADA E. MALINAO, INES

E. MIOZA, SOLEDAD E. CENIZA, RODULFO ERMAC andAMELITA E. BASUBAS, petitioners,
vs. HEIRS OF VICENTE ERMAC, namely: BENJAMIN, VIRGINIA, PRECIOSA, DANILO, as
HEIRS OF URBANO ADOLFO; BERNARDINO, CLIMACO, CESAR, ELSA, FLORAME and
FE, all surnamed ERMAC, as HEIRS OF CLIMACO ERMAC, ESTELITA ERMAC,
ESTANESLAO DIONSON, VICENTE DIONSON, EUFEMIA LIGARAY, EMIGDIO BUSTILLO
and LIZA PARAJELE, LUISA DEL CASTILLO,* respondents.
DECISION
PANGANIBAN, J.:
Ownership should not be confused with a certificate of title. Registering land under the Torrens
System does not create or vest title, because registration is not a mode of acquiring
ownership.A certificate of title is merely an evidence of ownership or title over the particular
property described therein.
The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to set aside
the February 16, 2001 Decision[2] and the August 6, 2001 Resolution[3] of the Court of
Appeals[4](CA) in CA-GR CV No. 59564. The dispositive part of the Decision reads:
WHEREFORE, premises considered, the instant appeal is hereby DISMISSED, and the
assailed [D]ecision of the Regional Trial Court of Mandaue City is hereby AFFIRMED.[5]
The assailed Resolution denied petitioners Motion for Reconsideration.
The Facts
The factual antecedents of the case are summarized by the CA as follows:
In their Complaint, [respondents] claim that they are the owners of the various parcels of real
property that form part of Lot No. 666, (plan II-5121 Amd.2) situated in Mandaue City, Cebu,
which lot allegedly belonged originally to Claudio Ermac. Upon the latters death, the said Lot
No. 666 was inherited and partitioned by his children, namely, Esteban, Pedro and Balbina.
Siblings Pedro and Balbina requested their brother Esteban to have their title over the property
registered. Esteban, however, was unable to do so, and the task of registration fell to his son,
Clemente. Clemente applied for registration of the title, but did so in his own name, and did not
include his fathers brother and sister, nor his cousins. Despite having registered the lot in his

name, Clemente did not disturb or claim ownership over those portions occupied by his uncle,
aunt and cousins even up to the time of his death. Among the occupants of Lot No. 666 are the
[respondents] in this case. [Respondents]-heirs of Vicente Ermac claim ownership over the
portions of Lot No. 666 now occupied by them by right of succession as direct descendants of
the original owner, Claudio Ermac. [Respondents] Luisa Del Castillo and Estaneslao Dionson
allegedly derived their title by purchase from the children of Claudio Ermac. [Respondent]
Vicente Dionson, on the other hand, bought his land from the heirs of Pedro Ermac, while
[Respondents] Emigdio Bustillo and Liza Parajele derived their ownership from the Heirs of
Balbina Ermac-Dabon. [respondents] ownership and possession had been peaceful and
undisturbed, until recently when the [petitioners]-heirs of Clemente Ermac filed an action for
ejectment against them. The filing of the said ejectment caused a cloud of doubt upon the
[respondents] ownership over their respective parcels of land, prompting them to file this action
for quieting of title.
[Petitioners], on the other hand, denied the material allegations of the [respondents], and
claimed that the [respondents] have no cause of action against them. It is essentially claimed
that it was Clemente Ermac and not his grandfather Claudio Ermac who is the original claimant
of dominion over Lot No. 666. During his lifetime, Clemente Ermac was in actual, peaceful,
adverse and continuous possession in the concept of an owner of the entire Lot No. 666. With
the help of his children, he cultivated the said lot, and planted corn, peanuts, cassava and fruit
products. Clemente also effected the registration of the subject lot in his name. Upon
Clementes death, [petitioners] inherited Lot No. 666, and they constructed their residential
houses thereon. [Petitioners] claim that [respondents] recent occupation of some portions of
Lot No. 666 was only tolerated by Clemente Ermac and the [petitioners]. [Petitioners] in fact
had never surrendered ownership or possession of the property to the [respondents].
[Petitioners] also set up the defense of prescription and laches.
After trial, the lower [court] rendered its [D]ecision, finding that the original owner of the lot in
question was Claudio Ermac, and therefore, the property was inherited upon his death by his
children Esteban, Balbina and Pedro. All the heirs of Claudio Ermac, therefore, should share in
the ownership over Lot No. 666, by right of succession. The ruling [was] supported by the
admissions of Irene[a] Seno, witness for the [petitioners] and daughter of Clemente Ermac,
establishing facts which show that [petitioners] and their predecessor Clemente did not own
the entire property, but that the other heirs of Claudio Ermac are entitled to two-thirds (2/3) of
the lot. Since the entire lot is now registered in the name of Clemente Ermac, the shares
belonging to the other heirs of Claudio Ermac, some of which have already been purchased by
some of the [respondents], are being held in trust by the [petitioners] in favor of their actual
occupants.[6]
Ruling of the Court of Appeals
The CA held that the factual finding of the Regional Trial Court (RTC)[7] should not be
disturbed on appeal. The latter found that Lot No. 666 was originally owned by Claudio Ermac
and, after his death, was inherited by his children -- Esteban, Balbina and Pedro. It ruled that
respondents were able to prove consistently and corroboratively that they -- as well as their
predecessors-in-interests -- had been in open, continuous and undisturbed possession and
occupation thereof in the concept of owners.
According to the appellate court, [t]he fact that [petitioners] have in their possession certificates
of title which apparently bear out that it [was] Clemente Ermac alone who claimed the entire
property described therein [has] no discrediting effect upon plaintiffs claim, it appearing that
such titles were acquired in derogation of the existing valid and adverse interests of the
plaintiffs whose title by succession were effectively disregarded.[8]
Hence, this Petition.[9]
The Issues
In their Memorandum,[10] petitioners raise the following issues for our consideration:

I. The validity of the Writ of Preliminary Injunction dated February 5, 1996 issued by the
Regional Trial Court, Branch 28, directing the Municipal Trial Court in Cities, Branch 2, to
cease and desist from conducting further proceedings in Civil Case No. 2401[;]
II. Whether or not O.C.T. No. RO-752 issued in the names of [Spouses] Clemente Ermac [and]
Anunciacion Suyco is indefeasible and incontrovertible under the Torrens System[;]
III. Whether or not the alleged tax declarations and tax receipts are sufficient to defeat the title
over the property in the names of petitioners predecessors-in-interest [Spouses] Clemente
Ermac and Anunciacion Suyco[;]
[IV]. Whether or not laches ha[s] set in on the claims by the respondents on portions of Lot No.
666[.][11]
The Courts Ruling The Petition is unmeritorious.
First Issue: Preliminary Injunction
Petitioners assail the validity of the Writ of Preliminary Injunction issued by the RTC to restrain
the ejectment proceedings they had filed earlier.
This question is not only late, but also moot. If petitioners truly believed that the issuance of the
Writ was tainted with grave abuse of discretion, they should have challenged it by a special
civil action for certiorari within the reglementary period. Any ruling by the Court at this point
would be moot and academic, as the resolution of the issue would not involve the merits of the
case, which this appeal -- as it is now -- touches upon.
Second Issue:
Indefeasibility and Incontrovertibility of Title
Petitioners posit that pursuant to Section 32 of PD 1529 (the Property Registration Decree),
the certificate of title issued in favor of their predecessor-in-interest, Clemente Ermac, became
incontrovertible after the lapse of one year from its issuance. Hence, it can no longer be
challenged.
We clarify. While it is true that Section 32[12] of PD 1529 provides that the decree of
registration becomes incontrovertible after a year, it does not altogether deprive an aggrieved
party of a remedy[13] in law.[14] The acceptability of the Torrens System would be impaired, if
it is utilized to perpetuate fraud against the real owners.[15]
Furthermore, ownership is not the same as a certificate of title. Registering a piece of land
under the Torrens System does not create or vest title, because registration is not a mode of
acquiring ownership.[16] A certificate of title is merely an evidence of ownership or title over the
particular property described therein.[17] Its issuance in favor of a particular person does not
foreclose the possibility that the real property may be co-owned with persons not named in the
certificate, or that it may be held in trust for another person by the registered owner.[18]
Third Issue:
Ownership of the Disputed Lot
Petitioners claim that the CA erred in relying on the hearsay and unsubstantiated testimony of
respondents, as well as on tax declarations and realty tax receipts, in order to support its ruling
that the land was owned by Claudio Ermac.
We are not persuaded. The credence given to the testimony of the witnesses for respondents
is a factual issue already passed upon and resolved by the trial and the appellate courts. It is a
hornbook doctrine that only questions of law are entertained in appeals by certiorari under
Rule 45 of the Rules of Court. The trial courts findings of fact, which the CA affirmed, are
generally conclusive and binding upon this Court.[19]
Moreover, while tax declarations and realty tax receipts do not conclusively prove ownership,
they may constitute strong evidence of ownership when accompanied by possession for a
period sufficient for prescription.[20] Considering that respondents have been in possession of
the property for a long period of time, there is legal basis for their use of tax declarations and
realty tax receipts as additional evidence to support their claim of ownership.
Fourth Issue:
Prescription and Laches

Petitioners assert that the ownership claimed by respondents is barred by prescription and
laches, because it took the latter 57 years to bring the present action. We disagree.
When a party uses fraud or concealment to obtain a certificate of title to property, a
constructive trust is created in favor of the defrauded party.[21] Since Claudio Ermac has
already been established in the present case as the original owner of the land, the registration
in the name of Clemente Ermac meant that the latter held the land in trust for all the heirs of
the former. Since respondents were in actual possession of the property, the action to enforce
the trust, and recover the property, and thereby quiet title thereto, does not prescribe.[22]
Because laches is an equitable doctrine, its application is controlled by equitable
considerations.[23] It cannot be used to defeat justice or to perpetuate fraud and injustice.[24]
Its application should not prevent the rightful owners of a property to recover what has been
fraudulently registered in the name of another.
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs
against petitioners.
SO ORDERED.

6) G.R. No. L-29442 November 11, 1987

FORTUNATO BOLLOZOS, ANDREA BOLLOZOS VDA. DE RAPANOT PABLO B. CALAM,
EPIFANIA B. BEVERA, SERGIO B. CALAM, GUALBERTO B. CALAM, IGNACIO B. CALAM,
JOSE B. CALAM, JR. and CAROLINA B. CALAM, plaintiffs-appellees,
vs.
YU TIENG SU, alias SISO YU, defendant-appellant.
CRUZ, J.:
The original protagonists in this controversy have long since passed away into "the tongueless
silence of the dreamless dust" and are now but mute witnesses to this litigation. We can now
go only by the musty records that will take us back to more than half a century ago, before the
period of the Commonwealth.
This case was formally commenced on January 20, 1968, with the filing of a complaint for the
recovery of a 1.2 hectare parcel of land and accounting for its use from defendant Yu, the
herein appellant. The plaintiffs claimed that the said land had been delivered to him only for
administration so he could apply the produce thereof to the indebtedness of Paulino Bollozos,
their predecessor-in-interest. It was alleged that Yu had refused to return the land despite
demand and to make the required accounting although the debt had long been paid. 1
In his answer, the defendant averred that he had acquired ownership of the land in question by
virtue of two documents executed in his favor by Paulino Bollozos, to wit, a deed of sale with
right of repurchase dated September 1, 1934, and a deed of absolute sale dated September
21, 1936. He therefore had no obligation to return it. Additionally, Yu claimed that the suit was
barred by prescription, the complaint having been filed only after all of 26 years. 2
Issues having been joined, the parties later entered into a stipulation of facts before the trial
court, reading in full as follows:
1. That both parties hereby agree on the Identity of the parcel of land in litigation as described
in paragraph II of the amended complaint, which parcel of land is covered by OCT No. 5033 in
the name of Paulino Bollozos;

2. That plaintiffs Fortunato Bollozos and Andrea Bollozos are the only surviving children of the
late Paulino Bollozos while the rest of the above-named plaintiffs are the grandchildren of said
Paulino Bollozos,
3. That sometime on September 1, 1934, the late Paulino Bollozos executed a document
entitled "Escritura de Compra y Venta Con Pacto de Retro," the original of which is hereto
attached as Annex A to form part hereof and another document was executed by the late
Paulino Bollozos entitled "A Definite and Absolute Purchase and Sale" dated September 21,
1936, the original copy of which is hereto attached to form an integral part of this complete
stipulation of facts
4. That the parties agree to submit the entitled case for decision on the basis of the following
issue or issues:
(a) Whether a valid conveyance of ownership was made of the parcel of land in litigation on
September 1, 1934 as appearing in Annex A, entitled "Escritura de Compra y Venta Con Pacto
de Retro," or on September 21, 1936 as appearing in Annex B, entitled "A Definite and
Absolute Purchase and Sale" of the parcel of land in litigation, and for the Honorable Court to
determine the legality or nullity of the above-mentioned documents. 3
On the basis of this agreement and of the memoranda filed subsequently by the parties, the
lower court, * without receiving further evidence, rendered judgment in favor of the plaintiffs. 4
It held, first, that the deed of sale with pacto de retro executed on September 1, 1934, was in
reality an equitable mortgage and did not transfer ownership of the land to the defendant; and
second, that the subsequent sale executed in 1936 was null and void ab initio because by that
time the transfer of agricultural lands to aliens was already prohibited by the Commonwealth
Constitution, which became effective on November 15, 1935. Yu was a Chinese national.
The above rulings are the subject of this appeal, ** which we find meritorious. We shall
reverse.
It is important to note at the outset that there is nothing in the record to show that the disputed
property had merely been entrusted to Yu for administration in connection with Paulino
Bollozos' indebtedness to him, as claimed by the plaintiff. Neither is there any evidence of such
indebtedness. This allegation, which was the very basis of the complaint, was not among those
admitted in the stipulation of facts and indeed had been categorically denied in the answer. It
thus remained a bare averment without any actual or presumptive support.
It should also be noted that, by contrast, the defendant, to substantiate his answer, produced
the two above-cited documents Annexes "A" and "B", which clearly indicate the intention of the
parties regarding the ownership and disposition of the land in question. These documents are
the best and, as it happens, the only evidence adduced of such intention.
Annex "A" reads as follows:
ESCRITURA DE COMPRA Y VENTA
CON PACTO DE RETRO
Nosotros, PAULINO BOLLOZOS, de 71 aos de edad y FAUSTINA LILOC, de 58 aos de
edad, marido y mujer respectivamente, filipinos y vecinos y residentes del barrio de Bonbon,
Municipio de Catarman Provincia de Misamis Oriental, Islas Filipinas, por la presente hacemos
constar que consideracion a la suma de SEISCIENTOS TREINTA Y SEIS PESOS (P636.00)
en moneda filipina que nos ha pagado y hemos recibido a nuestra entera satisfaccion del SR.
YU TIENG SU, de 34 aos de edad, chino, casado de la SRA SIA PUTE, de 29 aos de edad,
china y residente de este Municipio de Catarman Provincia de Misamis Oriental, Islas
Filipinas, VENDEMOS, CEDEMOS ENTREGAMOS y TRASPASAMOS al referido SR. YU
TIENG SU sus herederos y causahabientes una parcela de terreno con todas sus mejoras
existentes situada en el distrito de Quilambon, barrio de Bonbon, Municipio de Catarman
Provincia de Misamis Oriental, Islas Filipinas bajo el numero del Lote Cadastral de este
Municipio Catarman Misamis Oriental, Caso No. 9m y cuya descripcion tecnica es como sigue:

(Technical Description)

Hacemos constar tambien que queda pacto y convenido con el referrido SR. YU TIENG SU,
que si nosotros devolvieramos o mandamos devolver dentro del termino de SIETE (7) ANOS
contados desde esta fecha la suma de SEISCIENTOS TREINTA Y SEIS PESOS (P636.00) en
moneda filipina, y le abonaremos ademas los gastos que ocasione el presente contrato, nos
otorgaran el comprador o sus representantes escritura de retroventa pero si transcurre dicho
plazo sin haberse utilizado el derecho de redencion, adquirira la presente el character de
absolutamente consumada, y entretanto solo podra el comprador disponer la finca con las
limitaciones prescritas en la Ley Hipotecaria
En testimiento de rado lo cual firmamos la presente en este Municipio de Catarman Provincia
de Misamis Oriental hoy 1, o-de Septiembre, 1934, A.D.
(Sgd.) PAULINO BOLLOZOS Y
(Sgd.) FAUSTINA LILOC,
Firmadas en presencia de
(Sgd.) JOSE LIM PATUNGAN y
(Sgd.) EUFROSINO LIMBACO
The second instrument, Annex "B", declared the following:
DEFINITE AND ABSOLUTE PURCHASE AND SALE
That I, PAULINO BOLLOZOS, 72 years of age, Filipino married to Faustina Liloc, 60 years of
age, and resident of the barrio of Bonbon, Municipality of Catarman, Province of Oriental
Misamis, P.I. do hereby declare and say:
1st. That I am the lawful owner of one parcel of land together with all existing improvements
thereon, located in the sitio of Kilambon, barrio of Bonbon, Municipality of Catarman, Province
of Oriental Misamis, P.I., particularly described as follows:
(Technical Description)
2nd. That the said parcel of land together with all existing improvements thereon is registered
in my name in the Office of the Register of Deeds of the Province of Oriental Misamis, as
evidenced by the ORIGINAL CERTIFICATE OF TITLE number FIVE THOUSAND THIRTY
THREE (5033).
3rd. That the said parcel of land, together with all existing improvements thereon was sold by
me to Mr. YU TIENG SU, married to Sia Pute on September 1, 1934 for the sum of SIX
HUNDRED THIRTY SIX (P636.00) under the instrument of purchase with right or repurchase
(Compra venta con pacto de retro) and said document is ratified before Notary Public Mr.
Eufrosino Limbaco, of Mambajao, Misamis Oriental, on the 1st day of September 1934, Not.
Reg. No. 149-Page No. 97-Book No. 8-Series of 1934.
4th. That by these presents I do hereby declare and say that I will forever renounce and
repudiate my rights and privileges to repurchase the said parcel of land together with all its
existing improvements thereon and for and in consideration of an additional sum TWO
HUNDRED NINETY-FIVE PESOS (P295.00), Philippine Currency to me in hand paid and the
receipt whereof is hereby acknowledged by Mr. YU TIENG SU, 36 years of age, Chinese,
married to Sia Pute, 31 years of age, Chinese and resident of this Municipality of Catarman
Misamis Oriental, P.I., by these presents I do hereby sell, transfer and forever convey a deliver
unto said Mr. YU TIENG SU, his heirs, executors, administrators and assigns that parcel of
land together with all its existing improvements thereon, particularly described above (Lot No.
473). Original Certificate of Title number Five Thousand Thirty-three.
5th. Lastly, I do hereby declare and say that I will forever warrant and defend unto said Mr. YU
TIENG SU, his heirs, executors, administrator and assigns all lawful claims of all persons
whomsoever of his right of ownership of the said parcel of land together with its existing
improvements thereon described above.
IN WITNESSETH WHEREOF, I have hereunto signed my name in this Municipality of
Catarman Province of Misamis Oriental, P. I., on this 21 st day of September 1936.
(Sgd.) PAULINO BOLLOZOS
Signed in the presence of:

(Sgd.) JOSE LIM PATUNGAN and

(Sgd.) JOSE L. RIVERA
It is clear from the first document that Paulino Bollozos actually sold the land in question to Yu
for the sum of P636.00, subject only to the former's right to repurchase it within a period of
seven years. There is nothing in this instrument suggesting a different arrangement such as
that alleged by the plaintiffs-appellees in their complaint, nor have they submitted any evidence
in proof of such arrangement.
The intention clearly embodied in Annex "A" was affirmed in the second transaction between
the same parties as reduced to writing in Annex "B", denominated as "A" Definite and Absolute
Purchase and Sale." Concluded two years later, it specifically referred to the first sale made in
1934 by virtue of which, as Paulino Bollozos declared, the land in question and its
improvements were "sold by me to Mr. Yu Tieng Su" for the agreed consideration of P636.00.
He further stated in Annex "B" that "by these presents I do hereby declare and say that I will
forever renounce and repudiate my right and privilege to repurchase" the said property as
reserved by him in the first instrument. For such renunciation, Bollozos acknowledged receipt
of an additional sum of P295.00, thus increasing the total purchase price of the land to
P931.00.
The Court holds that the first transaction was a valid sale with right of repurchase and
effectively transferred ownership of the land in dispute to the defendant-appellant. All the
elements of a valid contract were present, and in any case the plaintiffs-appellees themselves
have stipulated on its authenticity. As it was concluded in 1934, the prohibition against the
acquisition of agricultural lands by aliens was not yet applicable, having become effective only
from November 15, 1935, under the Commonwealth Constitution. Moreover, the title acquired
by Yu was recognized in the said Constitution as a vested right that could no longer be
disturbed under the new provisions of that charter reserving ownership of such lands to Filipino
citizens. 5
The plaintiffs-appellees err in suggesting that the first transaction, being conditional, did not
effectively transfer the ownership of the land to the vendee. It did, certainly, subject only to the
right of the vendor to redeem it within the period specified. As we said in an earlier case:
In the deed of pacto de retro sale executed by Ignacio Reyes in favor of Lim Kiam on May 30,
1932, covering Lot 9203, the period of repurchase was not fixed. The Court of Appeals
correctly held that in accordance with Article 1508 of the old Civil Code the right could be
exercised within four years from the date of execution of the conveyance - in this case up to
May 30, 1936. The fact, however, that on this date the Constitution was already in force did not
affect the right acquired by Lim Kiam. We have held in a number of cases decided under the
provisions of the old Civil Code that the nature of a sale with the right of repurchase is such
that the ownership over the thing sold is transferred to the vendee upon execution of the
contract, subject only to the resolutory condition that the vendor exercise his right, of
repurchase within the period agreed upon. Manalansan v. Manalang, L-13646, July 26, 1960;
Almiranez v. Devera,
L-19496 February 27, 1965; Rosario v. Rosario, L-13018, December 29, 1960. 6
A sale with pacto de retro transfers the legal title to the vendee and this, in the absence of an
agreement to the contrary, carries with it the right of possession. In the case of Santos v. heirs
of Crisostomo and Tiongson (41 Phil. 342), this court, in discussing the nature of sale with
pacto de retro said: ... It is our opinion, however, that the insertion of a stipulation for
repurchase by the vendor in a contract of sale does not necessarily create any right
inconsistent with the right of ownership in the purchaser. Such a stipulation is in the nature of
an option, and the possible exercise of it rests upon contingency. ... 7
To be sure, Paulino Bollozos could have repurchased the property within seven years pursuant
to the first contract. However, he did not choose to do so and in fact "renounced and
repudiated" this right two years later in the second contract. It is noted that this contract also
purported to convey the same property to Yu but this was merely an affirmation or reiteration of

the parties' intention in the first transaction. It was not really necessary to repeat the sale
because the first contract had already been perfected and consummated. Indeed, the sale
could not have been made for the first time then for it would have been illegal under the
provisions of the new Constitution that had come into force in 1935. Actually, the real purpose
of the second contract was to manifest Paulino Bollozo's waiver of his right to repurchase, for
which he received the additional sum of P295.00.
The plaintiffs-appellees make much of the admitted fact that the disputed property is still in the
name of Paulino Bollozos as so too are the tax declarations. This circumstance, it is argued,
proves that ownership of the land was retained by Bollozos and later transferred to his heirs,
besides being an indication as well that the first contract was really only an equitable mortgage
and not a deed of sale. The contention is that as long as the land had not yet been registered
in the name of the defendant-appellant, title hereto remained with Bollozos.
This is not correct. The first deed of sale took effect on September 1, 1934, and legally
transferred ownership of the land subject thereof from the vendor to Yu on the said date.
Failure to register the sale did not vitiate it or render it unenforceable. As we have held in
several cases, an unrecorded deed of sale is binding between the parties and their privies
because actual notice is equivalent to registration. The real purpose of registration being to
give notice to third persons, deed of sale that has not been registered does not lose its efficacy
insofar as the parties thereto and their heirs are concerned. 8
It is settled that registration is not a mode of acquiring ownership. Thus:
Registration does not confer ownership. It is not a mode of acquiring dominion, but only a
means of confirming the fact of its existence with notice to the world at large. 9
And with particular reference to problems such as the one at bar, we have ruled that:
Title and ownership over lands within the meaning and for the purposes of the constitutional
prohibition, dates back to the time of their purchase, not later. Any other ruling would be illegal
and unjust, and would operate to dispossess alien owners who had acquired their lands in
good faith before the prohibition was established, but either failed wholly to register them or
registered them only after the Constitution was adopted. 10
As for the finding of the trial court that the deed of sale with the right of repurchase was an
equitable mortgage, we hold it has no basis in fact and law. All that is invoked in its support is
that the land continued to be registered, and all the tax declarations thereon were made, in the
name of Paulino Bollozos. That may well be, but that circumstance would not change the
nature of the contract concluded in 1934. At best, it may demonstrate neglect on the part of the
vendee, who had a right to transfer the registration in his name, but that would not signify that
Paulino Bollozos retained or recovered ownership of the land he had already sold.
The defendant-appellant cites Article 1602 of the Civil Code and argues that none of the
indications mentioned therein of an equitable mortgage are present in this case. While we are
inclined to agree, it should be noted that the said article is not applicable because it was not
embodied in the old Civil Code which was in force in 1934. This is an innvocation in the
present Code. In any event, it is worth stressing that one of the indicia mentioned in the said
article is that the vendor not remains in possession of the property in question, which is riot the
situation here. The complaint, in fact, asks for recovery of possession of the land from
defendant Yu.
In sum, we hold that the trial court erred in disregarding the sale with right of repurchase
concluded on September 1, 1934, and in considering it an equitable mortgage. The second
contract executed on September 21, 1936, could not have validly conveyed the land in
question to defendant Yu, who was an alien, as this was already prohibited by the
Commonwealth Constitution. Nevertheless, it was effective in affirming the earlier contract of
September 1, 1934, and, more importantly, in making it absolute with the renunciation by the
vendor of his right to repurchase the property. Accordingly, Yu should be recognized as the
lawful owner of the land in dispute, acquired by him by virtue of a legitimate contract of sale
with pacto de retro which became absolute when the vendor waived his right of repurchase.

The fact that the defendant in this case was an alien cannot be taken against him for he was
not disqualified from acquiring the land in question when the sale was concluded in 1934. It
should not deter us from ruling in his favor now.
This Court dispenses equal justice to the citizen and the alien and judges them on the merits of
their cause and not the color of their skin. Having admitted him into our territory, the State is
committed to the recognition of all the rights of the stranger in our midst save only where they
unduly clash with the higher interests of our own nation. There is no such collision here. On the
contrary, we see here an opportunity to prove, as we do now, that respect for the foreign guest
is ingrained in the law of the land and in the nature of our people.
WHEREFORE, the appealed decision is REVERSED. The complaint and the counterclaim in
Civil Case No. 66-C are DISMISSED, with costs against the plaintiffs-appellees. It is so
ordered.

"Lot 10171 Plan Ap-4A-001157, containing an area of 8,224 square meters, situated in the
Barrio of Tabangao, City of Batangas.
"Applicant Tabangao Realty, Inc. alleged in its application that it acquired the above-mentioned
lots by purchase from its previous owners as evidenced by the corresponding Deeds of Sale;
that it is the owner of all adjoining lots; that it had been in actual possession of the lots since
the time it acquired the same from the previous owners up to the present; and that its
possession and occupation as owners including that of its predecessor-in-interest has been
open, peaceful, continuous, adverse to the whole world and in the concept of an owner.
"The applicant further alleged that the plant of the Liquefied Petroleum Gas (LPG) Company is
partly erected on the subject lots which improvements are owned by it (applicant). It also
claims that the subject lots are not subject of any lien or encumbrance; that no adverse
interests exist with respect to the subject lots; and that there are no military or forest
reservation or any pending litigation affecting said subject lots.
"Should the property registration decree invoked not be allowed, the applicant in the alternative
applied for the benefits under CA No. 141 as amended and thus alleged that together with its
predecessors-in-interest it had been in open, continuous, public, peaceful and adverse
possession of the subject lots for more than 30 years. It also declared that the lots are not
tenanted nor subject of an agricultural leasehold relationship.
"Applicant Tabangao Realty, Inc. attached to its application its Articles of Incorporation, the
tracing cloth plan of the lots, blue print copies of said plan, technical descriptions of the lots,
Deeds of Sale, Assessment Certificate, Tax Declarations for the three lots and Tax Clearances.

7) [G.R. No. 130174. July 14, 2000]

REPUBLIC OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS AND TABANGAO
REALTY, INC., represented by Rodolfo Perez, respondents.
DECISION
PARDO, J.:
The case is an appeal[1] via certiorari from a decision of the Court of Appeals[2] affirming that
of the Regional Trial Court, Branch 07, Batangas City decreeing the registration under the
Property Registration Decree, P. D. No. 1529, of three (3) parcels of land situated in Tabangao,
Batangas City in favor of respondent corporation.[3]

"On August 12, 1991, the application was ordered archived by the Regional Trial Court for the
applicants failure to comply with the requirements called for in the Report dated February 22,
1994 by the Office of the Land Registration Authority. On June 2, 1994, the applicant filed a
motion to revive the application and to set the case for initial hearing. The motion was granted
by the Regional Trial Court on June 7, 1994 and initial hearing was set on September 1994.
"At the hearing, only the Assistant City Prosecutor appeared to oppose the application on
behalf of the Republic of the Philippines. Counsel for the applicant thereupon presented all the
necessary evidence to satisfy the jurisdictional requirements. Thereafter, upon motion of the
application, the Regional Trial Court issued an order of special default against the whole world
with the exception of the government. The court also issued an order designating and
authorizing Mr. Rodolfo G. Serrano, Legal Researcher of Regional Trial Court, Branch 7, to
receive evidence.

"Lot 9895 Plan Ap-4A-001136, containing an area of 4,596 square meters, situated in the
Barrio of Tabangao, City of Batangas;

"At the reception of evidence, the applicant presented Romeo Geron, the Consultant and
Project Controller of applicant Tabangao Realty, Inc. Geron testified that he is a resident of
Tabangao and was a member of the Task Force responsible for negotiating with the numerous
landowners and the subsequent acquisition by sale of the properties of Tabangao Realty, Inc.
in Tabangao and Libjo, Batangas. He testified that the applicant-corporation was duly
organized and registered with the Securities and Exchange Commission and is authorized to
acquire land by purchase and develop, subdivide, sell, mortgage, exchange, lease and hold for
investment or otherwise, real estate of all kinds.

"Lot 10155 Plan Ap-4A-001221, containing an area of 4, 031 square meters, situated in the
Barrio of Libjo, City of Batangas;

"He also testified that Lot 9895 was acquired by the applicant-corporation on March 31, 1980
by virtue of a Deed of Absolute Sale executed in its favor by the previous owners; the spouses

The facts, as found by the Court of Appeals, are as follows:

"On January 8, 1991, Tabangao Realty, Inc. filed an application for Original Registration of Title
over three parcels of land, more particularly described as follows:

Santiago and Cristina Dimaano (Exh. "L"); that Lot 10155 was acquired by applicantcorporation by virtue of a Deed of Sale executed on April 25, 1980 in its favor by the former
owner Mr. Perpetuo Almario married to Felisa Magpantay who owned the lot since 1945 (Exh.
"L-1"); and that Lot 10171 was purchased by applicant-corporation on March 31, 1980 from
Anita Clear de Jesus who had been the owner of said lot since 1945 (Exh. "L-2").
"The witness presented the tax declarations for the three parcels of land and tax receipts
showing full payment of all taxes due. (Exh. "P, P-1, P-2" and "Q") He testified that there is no
pending litigation involving the subject properties or any adverse claims filed against the
applicants; that they are free from any liens or encumbrances; that there are no tenants or
agricultural leasehold contracts involving the subject properties; and that there are no mineral
deposits in said lots.
"Geron also testified that the properties are presently under Lease Contract with Shell Gas
Philippines for 25 years from 1981 up to 2006 as evidenced by a Lease Contract executed on
May 18, 1991 (Exh. "M").
"The applicants also presented Crecencio Marasigan. He is an employee at the Office of the
Register of Deeds of Batangas since June 1971. He testified that he has been a resident of
Barangay Malitan, Batangas City even before 1937 up to the present and that he knew the
applicant Tabangao Realty, Inc. and the areas surrounding the lots subject of the application.
He mentioned that he was the Chairman of the Task Force that was responsible for the
negotiations that were done with the previous owners of the subject lots, and was therefore
personally aware of the specific dealing regarding the lots subject of the application. He said
that he knew the previous owners since he started residing in Batangas; and that their
possessions had been open, public, peaceful, continuous, adverse and in the concept of
owners.
"Marasigan corroborated the testimony of Romeo Geron with regard to the ownership,
possession and the status of the lots subject of the application.
"In opposition, the City Prosecutor of Batangas offered the testimonies of Rodolfo Fernandez
of the Bureau of Lands and Loida Maglinao of the Bureau of Forest Development.
"Rodolfo Fernandez testified that the three parcels of land subject of the application are not
covered by any kind of public land application or patent; that they are not within the reservation
area nor within the forest zone; that they are not reserved for any government purposes; and
that the entire areas are within the Alienable and Disposable Zone as Classified under Project
No. 13, Map No. 718 and certified on March 26, 1928. Fernandez presented the Investigation
Report made by the Bureau of Lands dated April 24, 1991 (Exh. "1" to "1-b").
"Loida Maglinao testified that the subject properties are within the alienable and disposable
area of the public domain and no forestry interest is adversely interposed by the Bureau of
Forest Development.
"On the basis of all the evidence presented, the Regional Trial Court rendered a decision on
March 31, 1995 granting the application for registration. It held:
"From the credible testimony and documentary evidence adduced establishing applicantcorporation that the latter and its predecessors-in-interest have been in open, public,
continuous, peaceful, uninterrupted and adverse possessions of the parcels of land applied for
up to the present, for the requisite period of time, under bona fide claim of ownership, and

considering, that no evidence has been presented by the government in support of its
Opposition, and even presented the favorable testimonies of Mr. Rodolfo Fernandez, of the
Bureau of Lands and Miss Loida Y. Maglinao, of the Bureau of Forest Development, both
CENRO, Batangas City Branch, Batangas City, supported by their respective official Reports,
the Court is convinced that the applicant-corporation Tabangao Realty Incorporated had
sufficiently established its rights to the grant of title over the three (3) parcels of land subject of
this case."
In due time, petitioner appealed the decision of the trial court to the Court of Appeals.[4]
On July 30, 1997, the Court of Appeals promulgated its decision affirming the appealed
decision.[5]
Hence, this appeal.[6]
The issue raised is whether respondent Tabangao Realty, Inc. has registerable title over three
(3) parcels of land situated in Tabangao, Batangas City applied for.
The Court of Appeals ruled that the applicant Tabangao Realty, Inc. is entitled to registration of
title over the three (3) parcels of land applied for. The ruling is erroneous.
An applicant seeking to establish ownership over land must conclusively show that he is the
owner thereof in fee simple,[7] for the standing presumption is that all lands belong to the
public domain of the State, unless acquired from the Government either by purchase or by
grant, except lands possessed by an occupant and his predecessors since time immemorial,
for such possession would justify the presumption that the land had never been part of the
public domain or that it had been private property even before the Spanish conquest.[8]
The land in question is admittedly public. The applicant has no title at all. Its claim of
acquisition of ownership is solely based on possession. In fact, the parcels of land applied for
were declared public land by decision of the Cadastral Court.[9] Such being the case, the
application for voluntary registration under P. D. No. 1529[10] is barred by the prior judgment of
the Cadastral Court. The land having been subjected to compulsory registration under the
Cadastral Act and declared public land can no longer be the subject of registration by voluntary
application under Presidential Decree No. 1529. The second application is barred by resjudicata.[11] As previously held, "[W]here the applicant possesses no title or ownership over
the parcel of land, he cannot acquire one under the Torrens System of registration."[12]
Nonetheless, applicant anchors its application for registration of title on the provisions of P. D.
No. 1529 or in the alternative Com. Act No. 141, Section 48 (b), as amended by Rep. Act No.
1942, which allows "those who by themselves or through their predecessors in interest have
been in open, continuous, exclusive and notorious possession and occupation of agricultural
lands of the public domain, under a bona fide claim of acquisition of ownership, for at least
thirty years immediately preceding the filing of the application" to apply for judicial confirmation
and registration of title.[13
However, the evidence is inconclusive that applicant and its predecessors in interest had been
in open, continuous, exclusive and notorious possession of the land in question, en concepto
de dueo, or a bona fide claim of acquisition of ownership for at least thirty (30) years
immediately preceding the filing of the application,[14] or since June 12, 1945,[15] or earlier,
[16] or since time immemorial.[17]
Analyzing the evidence submitted, we note that the applicant failed to prove the fact of
possession by itself and its predecessors in interest for at least thirty (30) years before the
filing of the application.

Witness Romeo Geron, a consultant of applicant Tabangao Realty, Inc. testified that in the year
1945, he knew that the land designated as Lot 9895, with an area of 4,596 square meters was
owned by Santiago Dimaano, who sold the lot to applicant corporation on March 31, 1980 and
that the parcel of land designated as Lot 10155 with an area of 4,031 square meters was
owned by Perpetuo Almario way back in 1945, and that he possessed the lot up to the time he
sold the same to applicant corporation on April 25, 1980 because he was in charge of
negotiation with the numerous landowners for acquisition of their property by Tabangao Realty,
Inc.[18] However, in 1945, witness Geron was only seven (7) years old, and obviously could
not competently testify on the ownership and possession of the subject land.
Applicant failed to prove specific acts showing the nature of its possession and that of its
predecessors in interest.[19] "The applicant must present specific acts of ownership to
substantiate the claim and cannot just offer general statements which are mere conclusions of
law than factual evidence of possession."[20] "Actual possession of land consists in the
manifestation of acts of dominion over it of such a nature as a party would naturally exercise
over his own property."[21]
The bare assertion of witnesses that the applicant of land had been in the open, adverse and
continuous possession of the property for over thirty (30) years is hardly "the well-nigh
incontrovertible" evidence required in cases of this nature.[22] In other words, facts constituting
possession must be duly established by competent evidence.

moved that an order of general default be issued against the whole world except petitioner
which had filed an opposition. On the same date, the trial court issued an order, stating:
When this case was called for initial hearing today, only the Fiscal in behalf of the Republic of
the Philippines interposed an opposition to the application.
Applicant, thru counsel, prayed for the issuance of an order of general default against the
whole world with the exception of the Republic of the Philippines represented by the Fiscal.
It appearing from the record that the jurisdictional requirements have been complied with and
there being no private oppositor to the application, the reception of evidence is hereby
delegated to the Branch Clerk of Court who is required to render a report within twenty (20)
days from the date of hearing which is hereby set on Dec. 20, 1988 at 9:00 o'clock in the
morning. 1
At the hearing on 20 December 1988, respondent Dolor's counsel marked as Exhibits "A" to
"D," respectively, the Notice of Initial Hearing, the Certificate of Publication of the Notice of
Initial Hearing in the Official Gazette, the Affidavit of Publication of the Editor of the "Weekly
Informer," and the Certification or Return of Posting by the Deputy Sheriff.
Satisfied that respondent Dolor had a registerable title over subject property the trial court in its
decision of 17 August 1989 confirmed her title thereto and ordered its registration as her
exclusive property. 2

Consequently, the lower court gravely erred in granting the application.

WHEREFORE, the Court REVERSES the decision of the Court of Appeals, DENIES the
application for registration of title filed by applicant Tabangao Realty, Inc. and declares the
subject parcels of land to be public land belonging to the public domain.
8) G.R. No. 100995
September 14, 1994

Petitioner assailed the trial court's decision before the Court of Appeals on a purely
jurisdictional ground. Petitioner argued that it was incumbent upon respondent Dolor to show
proof that on or before the date of initial hearing on 25 November 1988, there had been
compliance with the requirements specified by Sec. 23 of P.D. 1529, otherwise known as The
Property Registration Decree, to wit:

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
COURT OF APPEALS and DELFINA S. DOLOR, respondents.

Sec. 23. Notice of initial hearing, publication, etc. The court shall, within five days from filing
of the application, issue an order setting the date and hour of the initial hearing which shall not
be earlier than forty-five days nor later than ninety days from the date of the order.

The Solicitor General for petitioner.

The public shall be given notice of the initial hearing of the application for land registration by
means of (1) publication; (2) mailing; and (3) posting.

Leopoldo C. Nagera, Jr. for private respondent.

BELLOSILLO, J.:
On 10 August 1988, private respondent Delfina S. Dolor filed an application before the
Regional Trial Court of Daet, Camarines Norte, for the confirmation and registration of her title
to a 908-square meter residential lot located at the interior of Dencio Cabanela Street,
Poblacion, Daet, Camarines Norte, described on Plan Ccn-05-000025 and covered by Tax
Declaration
No. 005-0823.
On 25 November 1988, when the case was called for initial hearing, the Fiscal entered his
appearance on behalf of petitioner Republic of the Philippines. Respondent Delfina S. Dolor

1.
By publication. Upon receipt of the order of the court setting the time for initial
hearing, the Commissioner of Land Registration shall cause a notice of initial hearing to be
published once in the Official Gazette and once in a newspaper of general circulation in the
Philippines; Provided, however, that the publication in the Official Gazette shall be sufficient to
confer jurisdiction upon the court. Said notice shall be addressed to all persons appearing to
have an interest in the land involved including the adjoining owners so far as known, and "to all
whom it may concern." Said notice shall also require all persons concerned to appear in court
at a certain date and time to show cause why the prayer of said application shall not be
granted . . . .
The records show that while the trial court stated that the jurisdictional requirements were
complied with on 25 November 1988, they were yet to be presented on 20 December 1988
before its Branch Clerk, the designated Commissioner.

In its decision dated 16 July 1991, the appellate court affirmed the decision of the trial court. 3
It found petitioner's submission not only too formalistic but also contrary to the facts and the
law and in derogation of substantial justice, rationalizing thus
We find that the requirements of Sec. 23 of Presidential Decree
No. 1529 have been complied with in the instant case. The record shows that the Notice of
Initial Hearing set on November 25, 1988, issued by the Administrator, National Land Titles and
Deeds Registration Administration (Exh. "A") had been published in the September 10, 1988
issue of the "Weekly Informer" (Exh. "C") and in Volume 84, No. 42 of the Official Gazette
issue of October 17, 1988 (Exh. "B"), and posted in the prescribed conspicuous places in the
subject parcel of land the municipal building of Daet, Camarines Norte by the Sheriff (Exh.
"D"). The documents attesting to the compliance with Sec. 23 of PD 1529 were attached to the
record even before the date of the initial hearing of the instant Land Registration Case No. N678 . . . .
The appellant claims that while the presiding judge of the trial court stated that "the
jurisdictional requirements have been complied with" on November 25, 1988, the jurisdictional
requirements have yet to be presented on December 20, 1988 before the Branch Clerk of
Court, the designated Commissioner. Hence, appellant argues, the Order of November 25,
1988 had no basis in fact and in law; there was no notice to interested persons adjoining
owners, and the whole world; and jurisdiction to hear and decide the case has not yet been
conferred with the court on November 25, 1988.
We cannot agree. The jurisdiction is not conferred by the marking of the relevant documents
as exhibits, but by the fact that all the requirements of Sec. 23, PD 1529 had been complied
with as shown by those documents proving compliance therewith, identified later as Exhibits
"A" to "D," which were all attached to the records of the case even before November 25, 1988.
The trial court is not precluded from taking cognizance of its own record. Although in actual
practice, it is incumbent upon the applicant's counsel to mark those documents as exhibits at
the initial hearing to prove the jurisdictional facts, the omission of such markings by applicant's
counsel who might have been as yet unfamiliar with such practice would not deprive the trial
court of its jurisdiction to hear and proceed with the trial of the case, for the simple reason that
the jurisdictional requirements have been complied with as shown by the documents that were
already attached to the record of the case and of which the trial court can take judicial notice.
The failure of the Fiscal as well as the Presiding Judge to have called the attention of the
counsel for the applicant to proceed with the marking of the documents to prove the
jurisdictional facts would not have deprived the trial court of its jurisdiction to hear and decide
the case. Neither would the marking of those documents later after the initial hearing deprive
the trial court of its jurisdiction. 4
In this petition, while petitioner concedes that the jurisdiction to take cognizance of the case is
not conferred by the marking of the relevant documents as exhibits but, rather, by the fact that
all the jurisdictional requirements of law had been carried out, yet, it takes exception to the
factual finding that there was compliance with the jurisdictional requirements. As borne out by
the records, at the scheduled date of initial hearing on 25 November 1988 and even during the
actual hearing on 20 December 1988, the publication requirement in the Official Gazette was
yet to be complied with. Although the Notice of Initial Hearing was included for publication in
the 17 October 1988 issue of the Official Gazette, specifically Vol. 84, No. 42, thereof, the
same was however released for publication only on 31 January 1989, as shown by the
Certification of Publication issued by the Director of the National Printing Office. 5 In other
words, the actual publication of the notice came out sixty-seven (67) days after the scheduled

initial hearing and/or forty-two (42) days after private respondent had rested her case.
Petitioner concludes that the late publication did not vest jurisdiction in the trial court.
In petitioner's brief filed before respondent Court of Appeals, we note that the issue of late
publication of the Notice of Initial Hearing in the Official Gazette was raised squarely. But for no
apparent reason, the issue was ignored in the questioned decision. Indeed, respondent court
could have easily resolved the issue in favor of petitioner supported as it was not only by
competent evidence but also by ample jurisprudence.
The primary legal principle against which the legality of all the proceedings conducted by the
trial court should be tested is jurisdiction. In order to ascertain whether a court has jurisdiction,
the provision of the law in point should be inquired into. 6 Section 23 of P.D. 1529 explicitly
provides that before the court can act on the application for land registration, the public shall
be given notice of the initial hearing thereof by means of publication, mailing, and posting. In
Director of Lands v. Court of Appeals, 7 citing Caltex v. CIR, 8, this Court ruled that in all cases
where the authority of the courts to proceed
is conferred by a statute and when the manner of obtaining jurisdiction is mandatory it must be
strictly complied with, or the proceedings will be utterly void. So that where there is a defect of
publication of petition, such defect deprives the court of jurisdiction. 9 And when the court lacks
jurisdiction to take cognizance of a case, the same lacks authority over the whole case and all
its aspects. 10
In Register of Deeds of Malabon v. RTC, Malabon, 11 an issue similar to the one presented in
the present petition was posed, that is, whether the actual publication of the notice of the
petition in the Official Gazette forty-seven (47) days after the hearing, instead of at least thirty
(30) days prior to the date of hearing, 12 was sufficient to vest jurisdiction in the court to hear
and determine the petition. We answered in the negative since the purpose of the publication
of the notice of the petition for reconstitution in the Official Gazette is to apprise the whole
world that such a petition has been filed and that whoever is minded to oppose it for good
cause may do so within thirty (30) days before the date set by the court for hearing the petition.
It is the publication of such notice that brings in the whole world as a party in the case.
Regarding applications for land registration, the purpose of publication of the notice of initial
hearing is the same: to require all persons concerned who may have any rights or interests in
the property applied for to appear in court at a certain date and time to show cause why the
application should not be granted. In particular, the notice in this case commanded all persons
concerned:
. . . to appear before this Court at its session to be held at Branch XXXVIII, Municipality of
Daet, Province of Camarines Norte, Philippines, on the 25th day of November, 1988, at 8:30
o'clock in the forenoon, then and there to present such claims as you may have to said land or
any portion thereof, and to submit evidence in support of such claims, and unless you appear
at said Court at the time and place aforesaid, your default will be recorded and the title to the
land will be adjudicated and determined in accordance with law and the evidence before the
Court, and thereafter you will forever be barred from contesting said application (or petition) or
any decree entered thereon 13 (Emphasis supplied).
Section 23 of P.D. 1529 does not provide a period within which the notice should be published
in the Official Gazette but for reasons already obvious, the publication should precede the date
of initial hearing. While there is no dispute that the notice was included in Vol. 84, No. 42, 17
October 1988 issue of the Official Gazette, this particular issue was released for publication
only on 31 January 1989 when the initial hearing was already a fait accompli. The point of

reference in establishing lack of jurisdiction of the trial court was 31 January 1989 because it
was only on that date when the notice was made known to the people in general. 14 Verily, the
late publication of the notice defeated the purpose for its existence thereby reducing it to a
mere pro forma notice.
By reason of the defective notice of initial hearing, all the proceedings conducted by the trial
court which culminated in its decision granting the prayer of respondent Dolor are declared
VOID and it was error for respondent Court of Appeals to have sustained the same.
WHEREFORE, the petition is GRANTED. The questioned decision of respondent Court of
Appeals which affirmed the decision of the Regional Trial Court of Daet, Camarines Norte, is
VACATED and SET ASIDE, and the application of private respondent for the confirmation and
registration of her title over the property described therein is DENIED.

9) [G.R. No. 132963. September 10, 1998]

REPUBLIC OF THE PHILIPPINES, (represented by Opol National Secondary Technical
School), petitioner, vs. NICANOR DOLDOL, respondent.
DECISION
ROMERO, J.:
Before us is a petition for review of the decision of the Court of Appeals dated October 27,
1997, reversing the decision of the Regional Trial Court and dismissing herein petitioners
complaint, as well as its resolution of March 5, 1998, denying petitioners motion for
reconsideration.
The facts are as follows:
Sometime in 1959, respondent Nicanor Doldol occupied a portion of land in Barrio Pontacan,
Municipality of Opol, Misamis Oriental. On October 23, 1963, he filed an application for
saltwork purposes for the said area with the Bureau of Forest Development. The Director of
Forestry, however, rejected the same on April 1, 1968. Meanwhile, the Provincial Board of
Misamis Oriental passed a resolution in 1965 reserving Lot 4932, Cad-237, Opol Cadastre as
a school site. This reserved lot unfortunately included the area occupied by Doldol.
In accordance with said resolution, the Opol High School transferred to the site in 1970.
Seventeen years later, on November 2, 1987, then President Corazon Aquino issued
Proclamation No. 180 reserving the area, including the portion in dispute, for the Opol High
School, now renamed the Opol National Secondary Technical School (hereafter Opol National

School). Needing the area occupied by Doldol for its intended projects, the school made
several demands for him to vacate said portion, but he refused to move.
In view of Doldols refusal to vacate, Opol National School filed in 1991 a complaint for accion
possessoria with the Regional Trial Court of Cagayan de Oro. The trial court ruled in the
schools favor and ordered Doldol to vacate the land. On appeal, the Court of Appeals reversed
the decision of the court a quo, ruling that Doldol was entitled to the portion he occupied, he
having possessed the same for thirty-two years, from 1959 up to the time of the filing of the
complaint in 1991.
Opol National Schools motion for reconsideration of said decision having been denied by the
Court of Appeals in its resolution of March 5, 1998, Opol National School elevated its case to
this Court, claiming that the Court of Appeals erred on a question of law when it held, contrary
to the evidence on record, that respondent had been in open, continuous, notorious and
exclusive possession of the land in dispute for thirty-two years.
The petition is meritorious.
In ruling in Doldols favor, the Court of Appeals grounded its decision on Section 48 of
Commonwealth Act No. 141 (otherwise known as the Public Land Act). Said provision, as
amended by Republic Act No. 1942, provides as follows:
Section 48. The following described citizens of the Philippines, occupying lands of the public
domain or claiming interest therein, but whose titles have not been perfected or completed,
may apply to the Court of First Instance (now Regional Trial Court) of the province where the
land is located for confirmation of their claims and the issuance of a certification of title therefor
under the Land Registration Act, to wit:
xxxxxxxxx
(b) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of agricultural lands of the
public domain, under a bona fide claim of acquisition or ownership for at least thirty years
immediately preceding the filing of the application for confirmation of title, except when
prevented by wars or force majeure. Those shall be conclusively presumed to have performed
all the conditions essential to a Government grant and shall be entitled to a certificate of title
under the provisions of this chapter. (Italics ours)
In accordance with the above provision, the appellate court averred that a citizen of the
Philippines may acquire alienable land of the public domain if he has possessed the same for
thirty years. Finding Doldol to have occupied the disputed lot for thirty-two years, it ruled that
the former had acquired ownership of the same, thereby negating Opol National Schools claim
over the questioned area.
To further bolster its argument, the appellate court cited Republic vs. CA[1] where this Court,
citing Director of Lands vs. Iglesia ni Cristo, 200 SCRA 606 (1991) declared that:
The weight of authority is that open, exclusive and undisputed possession of alienable public
land for the period prescribed by law creates the legal fiction whereby the land, upon
completion of the requisite periodipso jure and without the need of judicial or other sanction,
ceases to be public land and becomes private property.
xxxxxxxxx
with the latters proven occupation and cultivation for more than 30 years since 1914, by
himself and by his predecessors-in-interest, title over the land has vested on petitioner so as to
segregate the land from the mass of public land.
xxxxxxxxx
As interpreted in several cases, when the conditions as specified in the foregoing provision are
complied with, the possessor is deemed to have acquired, by operation of law, a right to a
grant, a government grant, without the necessity of a certificate of title being issued. The land,
therefore, ceases to be of the public domain and beyond the authority of the Director of Lands
to dispose of. The application for confirmation is mere formality, the lack of which does not

affect the legal sufficiency of the title as would be evidenced by the patent and the Torrens title
to be issued upon the strength of said patent.
The appellate court has resolved the question as to who between the parties had a better right
to possess the lot through the erroneous application of an outdated version of Section 48 of
the Public Land Act. Likewise, Solicitor Renan E. Ramos of the Office of the Solicitor General
erred in assuming that the thirty-year proviso in the aforementioned section was still good law.
The original Section 48(b) of C.A. No. 141 provided for possession and occupation of lands of
the public domain since July 26, 1894. This was superseded by R.A. No. 1942,[2] which
provided for a simple thirty year prescriptive period of occupation by an applicant for judicial
confirmation of imperfect title. The same, however, has already been amended by Presidential
Decree No. 1073, approved on January 25, 1977. As amended, Section 48(b) now reads:
(b) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of agricultural lands of the
public domain, under a bona fide claim of acquisition or ownership, since June 12, 1945, or
earlier, immediately preceding the filing of the application for confirmation of title, except when
prevented by wars or force majeure. Those shall be conclusively presumed to have performed
all the conditions essential to a Government grant and shall be entitled to a certificate of title
under the provisions of this chapter. (Italics ours)
Thus, in the aforecited Republic vs. CA case, we stated that the Public Land Act requires that
the applicant must prove (a) that the land is alienable public land and (b) that his open,
continuous, exclusive and notorious possession and occupation of the same must either be
since time immemorial or for the period prescribed in the Public Land Act. When the conditions
set by law are complied with, the possessor of the land, by operation of law, acquires a right to
a grant, a government grant, without the necessity of a certificate of title being issued.
The evidence presented shows that the land in dispute is alienable and disposable, in
accordance with the District Foresters Certification dated September 20, 1978, that the subject
area is within Project 8, an alienable and disposable tract of public land, as appearing in
Bureau of Forest Land Classification Map No. 585. Doldol, thus, meets the first requirement.
The parties, however, stipulated during the pre-trial hearing that Doldol had been occupying
the portion reserved for the school site only since 1959. The law, as presently phrased,
requires that possession of lands of the public domain must be from June 12, 1945 or earlier,
for the same to be acquired through judicial confirmation of imperfect title.
Consequently, Doldol could not have acquired an imperfect title to the disputed lot since his
occupation of the same started only in 1959, much later than June 12, 1945. Not having
complied with the conditions set by law, Doldol cannot be said to have acquired a right to the
land in question as to segregate the same from the public domain. Doldol cannot, therefore,
assert a right superior to the school, given that then President Corazon Aquino had reserved
the lot for Opol National School. As correctly pointed out by the Solicitor General:
(T)he privilege of occupying public lands with a view of preemption confers no contractual or
vested right in the lands occupied and the authority of the President to withdraw such lands for
sale or acquisition by the public, or to reserve them for public use, prior to the divesting by the
government of title thereof stands, even though this may defeat the imperfect right of a settler.
Lands covered by reservation are not subject to entry, and no lawful settlement on them can
be acquired.[3]
In sum, Opol National School has the better right of possession over the land in dispute.
WHEREFORE, premises considered, the decision of the Court of Appeals dated October 27,
1997, and Resolution dated March 27, 1998, are hereby ANNULLED and SET ASIDE and the
Decision of the Regional Trial Court dated August 25, 1992, is hereby REINSTATED.

10) G.R. No. L-69002

June 30, 1988

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
AMANDA LAT VDA. DE CASTILLO, FLORENCIO T. CASTILLO, SOLEDAD LOTA CASTILLO,
CARLOS L. CASTILLO, NIEVES KATIGBAK CASTILLO, MARIANO L. CASTILLO, HIPOLITA
DYTIAPCO CASTILLO, AIDA CASTILLO HERRERA, HERMITO HERRERA, JOSE L.
CASTILLO, LILIA MACEDA CASTILLO, TERESITA L. CASTILLO, REGISTER OF DEEDS OF
BATANGAS and THE INTERMEDIATE APPELLATE COURT, respondents.
Castro, Nardo, Quintanilla, Gonzales & Macatangay Law Office for respondents.

PARAS, J.:

This is a petition for review on certiorari of the April 26, 1984 Decision of the then Intermediate
Appellate Court * reversing the February 6, 1976 Decision of the then Court of First Instance of
Batangas, Branch VI, in Civil Case No. 2044.
The antecedental facts of this case, as found by the then Intermediate Appellate Court, are as
follows:
Sometime in 1951, the late Modesto Castillo applied for the registration of two parcels of land,
Lots 1 and 2, located in Banadero, Tanauan, Batangas, described in Plan Psu-119166, with a
total area of 39,755 square meters. In a decision dated August 31, 1951, the said Modesto
Castillo, married to Amanda Lat, was declared the true and absolute owner of the land with the
improvements thereon, for which Original Certificate of Title No. 0-665 was, issued to him by
the Register of Deeds at Batangas, Batangas, on February 7, 1952. By virtue of an instrument
dated March 18, 1960, the said Lots 1 and 2 covered by Original Certificate of Title No. 0-665,
together with Lot No. 12374 covered by Transfer Certificate of Title No. 3254-A and Lot No.
12377 covered by Transfer Certificate of Title No. 3251-A, were consolidated and sub-divided
into Lots 1 to 9 under Pcs-1046. After the death of Modesto Castillo, or on August 31, 1960,
Amanda Lat Vda. de Castillo, et al., executed a deed of partition and assumption of mortgage
in favor of Florencio L. Castillo, et al., as a result of which Original Certificate of Title No. D-665
was cancelled, and in lieu thereof, new transfer cerfificates of title were issued to Florencio
Castillo, et al., to wit: Transfer Certificate of Title No. 21703 (Lot 4) (and) Transfer Certificate of
Title No. 21704 to Florencio Castillo (Lot 5); Transfer Certificate of Title No. T-21708 to Carlos
L. Castillo (Lot 7); Transfer Certificate of Title No. T-21712 to Mariano L. Castillo (Lot 6);
Transfer Certificate of Title No. T-21713 to Jose L. Castillo (Lot 9); Transfer Certificate of Title
No. T-21718 to Aida C. Herrera (Lot 2); and Transfer Certificate of Title No. T-21727 to Teresita
L. Castillo (Lot 8).
The Republic of the Philippines filed Civil Case No. 2044 with the lower court for the annulment
of the certificates of title issued to defendants Amanda Lat Vda. de Castillo, et al., as
heirs/successors of Modesto Castillo, and for the reversion of the lands covered thereby (Lots
1 and 2, Psu-119166) to the State. It was alleged that said lands had always formed part of the
Taal Lake, washed and inundated by the waters thereof, and being of public ownership, it
could not be the subject of registration as private property. Appellants herein, defendants
below, alleged in their answer that the Government's action was already barred by the decision
of the registration court; that the action has prescribed; and that the government was estopped
from questioning the ownership and possession of appellants.
After trial, the then Court of First Instance of Batangas, Branch VI, presided over by Honorable
Benjamin Relova, in a Decision dated February 6, 1976 (Record on Appeal, pp. 62-69), ruled
in favor of herein petitioner Republic of the Philippines. The decretal portion of the said
decision, reads:
WHEREFORE, the Register of Deeds of Batangas is hereby ordered to cancel Original
Certificate of Title No. 0-665 in the name of Modesto Castillo and the subsequent Transfer of
Certificates of Title issued over the property in the names of the defendants. Lots Nos. 1 and 2
of Plan Psu-19166 are hereby declared public lands belonging to the state. Without
pronouncement as to costs.
The Court of Appeals, on appeal, in a Decision promulgated on April 26,1984, reversed and set
aside the appealed decision, and dismissed the complaint (Record, pp. 31-41). Herein
petitioner filed a Motion for Reconsideration (Record, pp. 42-51), but the same was denied in a
Resolution promulgated on October 12,1984 (Record, p. 52). Hence, the instant petition.

The sole issue raised in this case is whether or not the decision of the Land Registration Court
involving shore lands constitutes res adjudicata.
There is no question that one of the requisites of res judicata is that the court rendering the
final judgment must have jurisdiction over the subject matter (Ramos v. Pablo, 146 SCRA 24
[1986]; that shores are properties of the public domain intended for public use (Article 420,
Civil Code) and, therefore, not registrable. Thus, it has long been settled that portions of the
foreshore or of the territorial waters and beaches cannot be registered. Their inclusion in a
certificate of title does not convert the same into properties of private ownership or confer title
upon the registrant (Republic v. Ayala y Cia, 14 SCRA, 259 [1965], citing the cases of Dizon, et
al. v. Bayona, et al., 98 Phil. 943; and Dizon, et al. v. Rodriguez, et al., 13 SCRA 704).
But an important bone of contention is the nature of the lands involved in this case.
Petitioner contends "that "Lots 1 and 2, PSU-119166 had always formed part of the Taal Lake,
washed and inundated by the waters thereof. Consequently, the same were not subject to
registration, being outside the commerce of men; and that since the lots in litigation are of
public domain (Art. 502), par. 4 Civil Code) the registration court (of 1951) did not have
jurisdiction to adjudicate said lands as private property, hence, res judicata does not apply.
(Rollo, pp. 37-38).
The Government presented both oral and documentary evidence.
As summarized by the Intermediate Appelate Court (now Court of Appeals), the testimonies of
the witnesses for the petitioner are as follows:
1. Rosendo Arcenas, a Geodetic Engineer connected with the Bureau of Lands since 1961,
testified to the effect that Lots 1 and 2, Psu-119166, which are the lots in question, adjoin the
cadastral survey of Tanauan, Batangas (Cad. 168); that the original boundary of the original
cadastral survey was foreshore land as indicated on the plan; that the cadastral survey of
Tanauan was executed sometime in 1923; that the first survey executed of the land after 1923
was the one executed in 1948 under Plan Psu-119166 that in the relocation survey of the
disputed lots in 1962 under SWO-40601, said lots were annotated on the plan as claimed by
the Republic of the Philippines in the same manner that it was so annotated in Plan Psu119166; thus showing that the Government was the only claimant of the land during the survey
in 1948; that during the relocation survey made in 1962, old points cannot be Identified or
located because they were under water by about forty centimeters; that during the ocular
inspection of the premises on November 23, 1970, he found that 2 monuments of the lots in
question were washed out by the waters of the Baloyboy Creek; that he also found duck pens
along the lots in question; that there are houses in the premises as well as some camotes and
bananas; and that he found also some shells ('suso') along the banks of the Taal lake (Tsn,
Nov. 16, 1970, pp. 13-21; Feb. 16, 1971, pp. 4-36).
2. Braulio Almendral testified to the effect that he is a resident of Tanauan, Batangas, near the
Taal lake; that like himself there are other occupants of the land among whom are Atanacio
Tironas, Gavino Mendoza, Juliano Tirones, Agapito Llarena, etc.; that it was they who filled up
the area to make it habitable; that they filled up the area with shells and sand; that their
occupation is duck raising; and that the Castillos never stayed in or occupied the premises
(Tsn, Nov. 16, 1970, pp. 32-50).

3. Arsenio Ibay, a Geodetic Engineer connected with the Bureau of Lands since 1968, also
testified to the effect that in accordance with the cadastral plan of Tanauan, the only private
claim of Sixto Castillo referred to Lots 1006 to 1008; that the Castillos never asserted any
private claim to the lots in question during the cadastral survey;' that in the preparation of plan
Psu-119166, Lots 12374 and 12377 were made as reference to conform to previously
approved plans; that lot 12374 is a portion of cadastral lot 10107, SWO-86738 while Lot 22377
is a portion of Lot 10108 of the same plan (Tsn, Nov. 25, 1970, pp. 115-137).
4. Jose Isidro, a Land Investigator of the Bureau of Lands, testified to the effect that pursuant
to the order of the Director of Lands, he, together with Engineer Rufino Santiago and the barrio
captain of Tanauan, Batangas, conducted an investigation of the land in question; that he
submitted a report of investigation, dated October 19, 1970 (Exh. H-1); that portions of the lot
in question were covered by public land applications filed by the occupants thereof; that
Engineer Santiago also submitted a report (Exh. H-8); that he had notified Dr. Mariano Castillo
before conducting the investigation (Tsn, Nov. 25,1970, pp. 137-162).
5. Rufino Santiago, another Geodetic Engineer connected with the Bureau of Lands, testified
to the effect that on October 19,1970, he submitted a report of investigation regarding the land
in question; that he noted on the plan Exhibit H-9 the areas on which the houses of Severo
Alcantara and others were built; that he found that the land was planted to coconuts which are
about 15 years old; that the land is likewise improved with rice paddies; that the occupants
thereof are duck raisers; that the area had been elevated because of the waste matters and
duck feeds that have accumulated on the ground through the years (Tsn, Nov. 26,1970, pp.
163-196).
6. Pablo Tapia, Barrio Captain of Tanauan, Batangas, since 1957, testified to the effect that the
actual occupants of Lots I and 2 are Atanacio Tirones,tc.; that during the war the water line
reached up to a point marked Exhibit A-9 and at present the water has receded to a point up to
Exhibit A-12; that the reasons why the waters of Taal lake have receded to the present level is
because of the fillings made by the people living in Lots 1 and 2; that there are several duck
pens all over the place; that the composition of the soil is a mixture of mud and duck feeds;
that improvements consist of bananas, bamboos and palay; that the shoreline is not even in
shape because of the Baloyboy Creek; that the people in the area never came to know about
the registration case in which the lots in question were registered; that the people living in the
area, even without any government aid, helped one another in the construction of irrigated rice
paddies; that he helped them file their public land applications for the portions occupied by
them; that the Castillos have never been in possession of the premises; that the people
depend upon duck raising as their means of their livelihood; that Lots 1 and 2 were yet
inexistent during the Japanese occupation; and that the people started improving the area only
during liberation and began to build their houses thereon. (Tsn, Nov. 26,1970, pp. 197-234).
Among the exhibits formally offered by the Government are: the Original Plan of Tanauan,
Batangas, particularly the Banader Estate, the Original Plan of PSU-119166, Relocation
Verification Survey Plan, maps, and reports of Geodetic Engineers, all showing the original
shoreline of the disputed areas and the fact that the properties in question were under water at
the time and are still under water especially during the rainy season (Hearing, March 17,1971,
TSN, pp. 46-47).
On the other hand, private respondents maintain that Lots 1 and 2 have always been in the
possession of the Castillo family for more than 76 years and that their possession was public,
peaceful, continuous, and adverse against the whole world and that said lots were not titled
during the cadastral survey of Tanauan, because they were still under water as a result of the

eruption of Taal Volcano on May 5, 1911 and that the inundation of the land in question by the
waters of Taal Lake was merely accidental and does not affect private respondents' ownership
and possession thereof pursuant to Article 778 of the Law of Waters. They finally insisted that
this issue of facts had been squarely raised at the hearing of the land registration case and,
therefore, res judicata (Record on Appeal, pp. 63-64). They submitted oral and documentary
evidence in support of their claim.
Also summarized by respondent Appellate Court, the testimonies of the witnesses of private
respondents are as follows:
1. Silvano Reano, testified to the effect that he was the overseer of the property of the late
Modesto Castillo located at Banadero,Tanauan, Batangas since 1944 to 1965; that he also
knows Lots 1 and 2, the parcels of land in question, since he was managing said property; that
the occupants of said Lots 1 and 2 were engaged in duck raising; that those occupants were
paying the Castillos certain amount of money because their animals used to get inside the lots
in question; that he was present during the survey of the land in 1948; and that aside from the
duck pens which are built in the premises, the land is planted to rice (Tsn, April 14, 1971, pp.
62-88).
2. Dr. Mariano Castillo, testified to the effect that the late Modesto Castillo was a government
official who held high positions in the Government; and that upon his death the land was
subdivided among his legal heirs. (Appellee's Brief, pp. 4-9).
As above-stated, the trial court decided the case in favor of the government but the decision
was reversed on appeal by the Court of Appeals.
A careful study of the merits of their varied contentions readily shows that the evidence for the
government has far outweighed the evidence for the private respondents. Otherwise stated, it
has been satisfactorily established as found by the trial court, that the properties in question
were the shorelands of Taal Lake during the cadastral survey of 1923.
Explaining the first survey of 1923, which showed that Lots 1 and 2 are parts of the Taal Lake,
Engineer Rosendo Arcenas testified as follows:
ATTY. AGCAOILI:
Q
Now, you mentioned Engineer that a subject matter of that plan which appears to be
Lots 1 and 2 are adjoining cadastral lots of the Tanauan Cadastre, now, will you please state to
the Court what is the basis of that statement of yours?
A The basis of that statement is the plan itself, because there is here an annotation that the
boundary on the northeastern side is Tanauan Cadastre 168 which indicates that the boundary
of the original cadastral survey of Tanauan Cadastre way back in the year 1923 adjoins a
foreshore land which is also indicated in this plan as foreshore lands of Taal lake, sir.
xxx

xxx

xxx

Q Now, on this plan Exhibit "A-2", there are two lots indicated namely, Lots 12374 and 12377,
what do these lots represent?
A This is the cadastral lot executed in favor of a certain Modesto Castillo that corresponds to
Lots 12374 and another Lot 12377, sir.

Q At the time this survey plan Psu-119166 and marked as Exhibit "A-2" was executed in 1948,
were these lots 1 and 2 already in existence as part of the cadastral survey?
A No, sir, because there is already a foreshore boundary.
Q Do I understand from you Mr. Witness at the time of the survey of this land these two lots
form part of this portion?
A Yes, sir.
Q When again was the cadastral survey of Tanauan, Batangas, executed if you know?
A In the year 1923, sir. (Hearing of Nov. 16, 1970, TSN pp. 15-17).

domain, and is not available for private ownership until formally declared by the government to
be no longer needed for public use (Ignacio v. Director of Lands, 108 Phil. 335 [1960]).
But said distinction will not help private respondents because there is no accretion shown to
exist in the case at bar. On the contrary, it was established that the occupants of the lots who
were engaged in duck raising filled up the area with shells and sand to make it habitable.
The defense of long possession is likewise not available in this case because, as already ruled
by this Court, mere possession of land does not by itself automatically divest the land of its
public character (Cuevas v. Pineda, 143 SCRA 674 [1968]).
PREMISES CONSIDERED, the April 26,1984 Decision of the then Intermediate Appellate
Court is hereby SET ASIDE and REVERSED and the February 6,1976 Decision of the then
Court of First Instance of Batangas is hereby AFFIRMED and REINSTATED.

Such fact was further verified in the Verification-Relocation Survey of 1948 by Engineer
Arcenas who conducted said survey himself and reported the following:
That as per original plan Psu-119166, it appears that Lot 1 and Lot 2, Psu-119166 surveyed
and approved in the name of Modesto Castillo is a portion of Taal Lake and as such it appears
to be under water during the survey of cadastral Lot No. 12374 and Lot No. 12377, which was
surveyed and approved in the name of Modesto Castillo under Cad. 168. To support this
theory is the annotation appearing and printed along lines 2-3-4-5 of Lot 1, Psu-119166 and
along lines 4-5-6 of Lot 2, Psu-119166 which notations clearly indicates that such boundary of
property was a former shorelines of Taal Lake, in other words, it was the extent of cultivation
being the shorelines and the rest of the area going to the southwestern direction are already
covered by water level.
Another theory to bolster and support this Idea is the actual location now in the verificationrelocation survey of a known geographic point were Barrio Boundary Monument (BBM N. 22)
is under water level quite for sometimes as evidence by earthworks (collection of mud) that
amount over its surface by eighty (80) centimeters below the ground, see notation appearing
on verification-relocation plan previously submitted. (Re-Verification-Relocation Survey
Exhibits, pp. 64-65).
Said surveys were further confirmed by the testimonies of witnesses to the effect that from
1950 to 1969, during rainy season, the water of Taal lake even went beyond the questioned
lots; and that the water, which was about one (1) foot, stayed up to more or less two (2) to
three (3) months (Testimonies of Braulio Almendral and Anastacio Tirones both residents of
Banadero, Tanauan, Batangas (Hearing of Nov. 16, 1970, TSN, pp. 41-42 and Hearing of Nov.
23, 1970, TSN, pp. 93, 98-99, respectively). In the Relocation Survey of 1962, there were no
definite boundary or area of Lots 1 and 2 because a certain point is existing which was under
water by 40 centimeters (Testimony of Engineer Arcena, Hearing of Nov. 16,1970, TSN, p. 20).
Lakeshore land or lands adjacent to the lake, like the lands in question must be differentiated
from foreshore land or that part of the land adjacent to the sea which is alternately covered and
left dry by the ordinary flow of the tides (Castillo, Law on Natural Resources, Fifth Edition,
1954, p. 67).
Such distinction draws importance from the fact that accretions on the bank of a lake, like
Laguna de Bay, belong to the owners of the estate to which they have been added (Gov't. v.
Colegio de San Jose, 53 Phil. 423) while accretion on a sea bank still belongs to the public

11) G.R. No. 97493 February 8, 1993

PATRICIO B. MANALASTAS and BELEN MANALASTAS, petitioners,
vs.
HON. COURT OF APPEALS, APOLONIA DELA CRUZ and THE HEIRS OF MOISES CAO,
respondents.
Santiago P. Armamento III for petitioners.
Public Attorney's Office for respondents.
NOCON, J.:
The case at bar involves the question of which prevails: is it the disposition of public
agricultural land by a deed of sale over the same or its disposition by free patent? The answer,
of course, is obvious. But first the facts of the case have to be tackled as there is where the
seeming confusion lies.
As the petitioners dispute the findings of facts by both the respondent Court of Appeals and the
trial court, the respective statements of fact by the litigants will have to be considered for a
proper disposition of the case at bar.

According to petitioners:
By virtue of a Deed of Absolute Sale dated December 30, 1949 (Exhibit "A"), Patricio
Manalastas and Belen Manalastas obtained from spouses Albino Magat and Benigna
Sangalang a parcel of land situated in Vizal, San Pablo, Candaba, Pampanga, which
contained an area of sixty four thousand and sixty (64,060) square meters (tsn, Nov. 15, 1985,
pp. 7, 10-12). Due to the construction of road and irrigation canal, the land was separated or
divided into Lots Nos. 747, 3801, 3802 and 4160, Pls-476 of the Candaba Public Land
Subdivision (Exhibit "E" and Exhibit "B", tsn, id., pp. 29-30). Pursuant to a survey of land
conducted on March 7, 1956, the Bureau of Lands approved on October, 9, 1972 Exhibit "E",
or the survey plan of Lot Nos. 747, 3801 and 3802, as well as Exhibit "B", the survey plan of
Lot No. 4160, both in the name of Patricio Manalastas. Lot No. 4160 with an area of two
thousand two hundred and two (2,202) square meters (Exhibit "B") adjoined Lot No. 745
belonging to Moises Cao (tsn, id., pp. 10, 14-15). A fence made of concrete hollow blocks was
constructed by Moises Cao to separate Lot No. 745 from Lot 4160 (tsn, id., p. 16). On March 2,
1951, Patricio and Belen Manalastas declared the property subject of Exhibit "A" for taxation
purposes with the Office of the Provincial Assessor of Pampanga under Tax Declaration No.
4723 (Exhibit "C"), and have since paid the taxes thereon (tsn, id., pp. 17-18).
Specifically, Lot No. 4160 was used for both residential and agricultural purposes. The
residential portion is occupied by four householders, namely, spouses Daniel Manalastas and
Apolonia Caasa, Alfonso and Belen Buco, Aquilino and Marieta Buco, and lastly, Maxima
Caasa. They have been staying in Lot No. 4160 since the purchase of the land by Patricio
and Belen Manalastas, to whom they each pay a yearly rent of one (1) cavan of palay (tsn, id.,
pp. 18-20; Oct. 5, 1985, p. 5) Witnesses Aquilino Buco and Maximo Manalastas, both admitted
that the lot (Exhibit "B") situated in Vizal, San Pablo, Candaba, Pampanga on which their
houses stand is owned by Patricio Manalastas, to whom they pay a yearly rent of one cavan of
palay (tsn, Jan. 15, 1986, pp. 9-13). On the other hand, the agricultural portion is cultivated by
one Felicisimo Balmeo, tenant of Patricio and Belen Manalastas (tsn, Nov. 15, 1985, pp. 2021). Witness Balmeo testified that Patricio and Belen Manalastas gave him the authority to
cultivate the land, which he started in 1950 continuously up to the present and which portion of
land he identified as Exhibit "B-1" (tsn, Jan. 15, 1986, pp. 5-6). From the time that Patricio and
Belen Manalastas acquired Lot No. 4160, neither Moises Cao nor any of his heirs have
occupied any portion thereof, whether actual or constructive (tsn, Nov. 15, 1985, pp. 22-23).
Sometime in February 1985, Patricio Manalastas was informed by his tenant, Felicisimo
Balmeo that while he was cutting bamboo on a portion of Lot No. 4160, he was stopped by the
Caos (referring to the heirs of Moises Cao who died in 1982) who claimed that the property
belong to them (tsn, id., p. 23). Patricio Manalastas went to the proper government offices to
verify the basis of this claim. He discovered that when Moises Cao was still alive, he filed an
application for free patent title with the Bureau of Lands, of which he (Manalastas) did not
receive any notice (tsn, id., pp. 22-24). Patricio Manalastas was able to secure a certified true
copy of the duplicate original of the said application of Moises Cao dated June 9, 1958, which
showed that the application for free patent referred only to Lot No. 745, Pls-476 of Candaba,
Pampanga, described therein as containing an area of only one thousand fifty (1,050) square
meters (Exhibits "D" and
"D-l") (tsn, id., p. 25). On the basis of a free patent title obtained on Lot No. 745, Pls-476, the
Register of Deeds for the Province of Pampanga issued Original Certificate of Title No. 948 in
favor of Moises Cao on November 17, 1972, which showed however that Lot No. 745, Pls-476
now contains an area of three thousand one hundred and fourteen (3,114) square meters
(Exhibit "I"). Comparing Moises Cao's application for free patent with the certificate of title
subsequently issued to him (Moises Cao), Patricio Manalastas found that said title to the land
embraced and covered the whole of Lot No. 4160 belonging to him (tsn, id., p. 31). Thereafter,
Patricio Manalastas went to the farm and talked to the wife and children of the late Moises Cao
and told them about the mistake in the title of Moises because it encroached on his Lot No.

4160. He offered to settle the matter anicably with them in order to avoid litigation, but they told
him that they could no longer return his lot to him as it was already titled in the name of Moises
Cao (tsn, id., p. 32). 1
Moreover, according to private respondents:
1. The land in dispute (Lot 4160, AS-1547 having an area of 2,202 square meters) was a part
of the Candaba Public Land Subdivision located in Visal, San Pablo, Candaba, Pampanga and
thus, a public land. It is an agricultural public land and was originally designated as portion of
Lot 745, PLS-476 which has a total area of 3,114 square meters. (Annex "1", Comment).
2. In 1930, the parents of Moises Cao were actually possessing and cultivating the said public
land. Moises Cao and family, subsequently, occupied the same in the concept of an owner and
in an open, public and adverse manner.
3. Moises Cao, on November 13, 1956 caused the survey of the said public land (Lot 745,
PLS-476) in his (Cao's) name.
4. Moises Cao, on June 9, 1958 applied for a free patent over said public land.
5. On October 2, 1972, Lot 745, PLS-476 was subdivided by the Bureau of Lands into two (2)
lots one of which is Lot 4160-AS-1547 which had an area of 2,202 square meters and the
other one, is Lot 245 with an area of 912 square meters.
6. The then Secretary of Agriculture and Natural Resources Arturo R. Tanco, Jr. thru the
Bureau of Lands as authorized by the President of the Philippines approved said application
for free patent of Moises Cao not only over the 912 square meters lot but on the original Lot
745, PLS-476 which was said to contain an area of 3,114 square meters. Moises Cao,
therefore, obtained a free patent title on the said public land. (Annex "2", Comment) Original
Certificate of Title (OCT) No. 948 of the Office of the Register of Deeds of Pampanga,
consequently, was issued in Moises Cao's name. (Annex "3", Comment) Moises Cao, thus,
become the lawful owner and possessor of Lot 745, PLS-476 which includes Lot 4160, AS1547 being caimed by the petitioners.
7. Moises Cao, in 1982, died and was survived by his wife Apolonia de la Cruz and their
children. Private respondents Apolonia de la Cruz Vda. de Cao and children, consequently,
inherited the said property. 2
As a result of this controversy over Lot 4160, petitioners instituted an action for reconveyance
against private respondents which the trial court dismissed for lack of merit, reasoning out as
follows:
The present action was filed only on April 17, 1985, Original Certificate of Title No. 948 issued
by virtue of a free patent application, as already stated, on November 17, 1972. For an action
for reconveyance of land to prosper in this case, there must be evidence to show that the
fraudulent statements were made in the application for free patent, and moreover, the action
must be instituted four years from the discovery of such fraudulent statements. No evidence
was presented by the plaintiffs to show such fraudulent statements were made in the
application to warrant reconveyance. More than four years had already elapsed whenthis
action was filed. Prescription of action therefrom lies.
An action for reconveyance of land, for which a patent had been issued to the defendant by
reason of fraudulent statements, is one based on fraud, and must be instituted within four
years from the discovery of the fraudulent statements made in the application. (Rosario v.
Auditor General, L-11817, April 30, 1958; Jean v. Agregado, L-7921, Sept. 28, 1955).
Another thing that militates against the plaintiffs.
A holder of a land acquired under free patent is more favorably situated than that of an owner
of registered property. (Cabacug vs. Lao, L-27036, 36 SCRA 91).
The plaintiffs have no title for the portion sought to be reconveyed. They anchor their cause of
action merely on the deed of sale and the survey plan.
Mere claim cannot defeat a registered title. It is obvious that a mere claim cannot defeat a
registered title. Furthermore, the "claim" is only noted on the survey plan, and such notation
cannot prevail over the actual decree of registration as reproduced in the certificate. All claims

of third persons to the property must be asserted in the registration proceedings. If any claim to
a portion thereof is upheld, that portion is segregated from the property applied for, and is not
included in the decree of registration and certificate of title subsequently issued to the
applicant. If it is included, the claim is deemed adversely resolved with finality, subject only to a
petition for review of the decree within one year from its issuance on the ground of fraud, under
Section 38 of
the Land Registration Act. (Fernandez vs. Aborantigue, 36 SCRA 476). 3 (Emphasis in the
original).
The respondent court found petitioners' appeal to be devoid of merit. 4 Their motion for
reconsideration, likewise, met the same fate, with the respondent Court ruling as follows:
In the present case, the title sought to be annulled, Original Certificate of Title No. 948, was
issued by the Register of Deeds of Pampanga on September 17, 1972. Appellants, however,
filed their action for reconveyance only on April 16, 1985, clearly beyond the ten (10) year
prescriptive period. 5
Petitioners now plead their case before Us complaining that the respondent Court of Appeals
erred in:
1. . . . IGNORING VITAL FACTS AND CIRCUMSTANCES WHICH SHOW THAT PRIVATE
RESPONDENTS AND THEIR PREDECESSOR-IN-INTEREST, MOISES CAO, HAVE NEVER
BEEN IN POSSESSION OF LOT 4160 AND THAT THE INCLUSION OF SAID LOT IN THE
CERTIFICATE OF TITLE ISSUED TO MOISES CAO WAS DUE TO FRAUD OR MISTAKE.
2. . . . DISREGARDING THE SETTLED JURISPRUDENCE THAT AN ACTION TO QUIET
TITLE TO PROPERTY IN ONE'S POSSESSION IS IMPRESCRIPTIBLE.
3. . . . HOLDING THAT THE CARAGAY-LAYNO DOCTRINE HAS BEEN ABANDONED. 6
From the narration of facts by petitioners essentially, what petitioners did was to:
1. buy a parcel of land from the Magat spouses on December 30, 1949;
2. have the land surveyed due to the construction of a road and irrigation canal;
3. declare the property for taxation purposes and pay the taxes;
4. put a tenant in the agricultural area; and
5. build four (4) houses for himself and relatives.
What private respondents did, essentially, was to:
1. cause the survey of the land in Moises Cao's name; and
2. apply for a free patent over the said land.
Since what is at stake here was public agricultural land, the procedure to obtain such land
must be followed. Said procedure is spelled out in Section 11, CA 141, as amended, which
reads asfollows:
Sec. 11. Public lands suitable for agricultural purposes can be disposed of only as follows, and
not otherwise:
1. For homestead settlement.
2. By sale.
3. By lease.
4. By confirmation of imperfect or incomplete titles:
a) By judicial legislation.
b) By administrative legislation (free patent).
Obviously, petitioners did not follow the procedure mandated by law. Even if petitioners could
trace their deed of sale back to Adam and Eve, fill in every square inch of the land with
agricultural tenants, have residential houses built every few meters here and there, pay the
realty taxes religiously every year and have an approved Bureau of Lands Survey yearly, they
will NOT become the owners of said parcel of land IF THEY WILL NOT follow the procedures
above indicated.
Since private respondents' father, the deceased Moises Cao did follow the procedure outlined
in the law, Moises Cao became the owner of the disputed parcel of land, as in fact, he was

awarded title to all 3,134 square meters of it by no less than the then Secretary of Agriculture
and Natural Resources, Arturo R. Tanco, Jr. 7
There was no fraud on the part of the late Moises Cao in obtaining title to the land in dispute.
On the other hand, there was lack of proper legal advice on the part of petitioners. They
probably thought they knew what to do in this particular situation without consulting a lawyer.
For example, petitioners could have tacked on to their length of possession of the Magat
spouses and any predecessors-in-interest and then apply for judicial confirmation of their
imperfect title. 8 Sad to say, they did not.
The respondent court and the trial court, therefore, did not ignore those alleged vital facts and
circumstances upon which petitioners stake their claim.
There is no need, therefore, to discuss the other assigned errors.
WHEREFORE, the petition is hereby DENIED for lack of merit. The respondent court's
resolution is hereby AFFIRMED in toto.
SO ORDERED.
Narvasa, C.J., Feliciano, Regalado and Campos, Jr., JJ., concur.

12) G.R. No. L-27594 November 28, 1975

THE DIRECTOR OF LANDS, THE DIRECTOR OF FORESTRY, and the ARMED FORCES OF
THE PHILIPPINES,petitioners,
vs.
HON. SALVADOR C. REYES, as Judge of the Court of First Instance of Nueva Ecija, Branch
III, PARAAQUE INVESTMENT and DEVELOPMENT CORPORATION, ROMAN C. TAMAYO,
THE COMMISIONER OF THE LAND REGISTRATION COMMISSION and the REGISTER OF
DEEDS OF NUEVA ECIJA, respondents.
G.R. No. L-28144 November 28, 1975
ALIPIO ALINSUNURIN, now substituted by PARAAQUE INVESTMENT and
DEVELOPMENT CORPORATION,applicant-appellee,
vs.

THE DIRECTOR OF LANDS, THE DIRECTOR OF FORESTRY and the ARMED FORCES OF
THE PHILIPPINES,oppositors-appellants.
Acting Solicitor General Hugo E. Gutierrez, Jr. and Assistant Solicitor General Reynato S.
Puno for The Director of Lands, etc.
Jaime B. Lumasag Jr. and Jose J. Roy and Associates Law Office for Roman C. Tamayo.
Nemesio P. Diaz and Celso B. Fernandez, Jr. for Alipio Alinsunurin, etc.
ANTONIO, J.:
These cases are interrelated, and so are decided jointly.
In his application originally filed on February 24, 1964 with the Court of First Instance of Nueva
Ecija, the applicant Alipio Alinsunurin, claiming ownership in fee simple by inheritance from the
late Maria Padilla, sought the registration of title under Act 496, as amended, of a vast tract of
land, containing an area of 16,800 hectares, more or less, situated at the municipality of Laur,
province of Nueva Ecija, admittedly inside the boundary of the military reservation of Fort
Magsaysay. 1
On May 5, 1966, the Director of Lands, Director of Forestry, and the Armed Forces of the
Philippines opposed the application, claiming that the applicant was without sufficient title and
was not in open, exclusive, continuous and notorious possession and occupation of the land in
question for at least thirty (30) years immediately preceding the filing of the application; that
approximately 13,957 hectares of said land consist of the military reservation of Fort
Magsaysay established under Proclamation No. 237, dated December 10, 1955 of the
President. 2
On May 10, 1966, the applicant Alipio Alinsunurin filed a motion for substitution of parties,
requesting that the Paraaque Investment and Development Corporation be considered as the
applicant in his place, it having acquired all his rights, interests, ownership and dominion over
the property subject matter of the application. 3 The motion was granted by the lower court in
its order dated June 10, 1966. 4
It is beyond dispute that the land subject of the application is included within the area reserved
for military purposes under Proclamation No. 237, dated December 19, 1955, of the President.
The land is largely uncultivated, mountainous and thickly forested with a heavy growth of
timber of commercial quantities. 5 Except for a small area cultivated for vegetation by
homesteaders issued patents by the Director of Lands, there were no occupants on the land. 6
It is claimed by the applicant that Melecio Padilla acquired the land by virtue of a possessory
information title issued during the Spanish regime on March 5, 1895, and upon his death in
1900, he transmitted the ownership and possession thereof to his daughter and sole heir,
Maria Padilla. The latter in turn continued to cultivate the land thru tenants and utilized portions
for pasture, until her death sometime in 1944.
On November 19, 1966, the lower court rendered decision holding that the parcel of land
applied for, described in the technical description Plan II-6752, is adjudicated to and ordered to
be registered in favor of (a) Paraaque Investment and Development Corporation, a Philippine
corporation wholly owned by Filipino citizens, with address at Manila, Philippines, two-thirds
(2/3) portion, subject to the rights of Ariosto Santos per Joint Manifestation of Alipio Alinsunurin
and Encarnacion Caballero-Alinsunurin, Ariosto Santos and Paraaque Investment and
Development Corporation dated July 19, 1966 and marked as Exhibit "AA-4 " 7 and (b) Roman
C. Tamayo, Filipino citizen, married, resident of Cullit, Lallo, Cagayan, one-third (1/3) portion of
the said property.
On December 12, 1966, the oppositors Director of Lands, Director of Forestry and the Armed
Forces of the Philippines filed a Notice of Appeal from the said decision to the Supreme Court,
8 copy of which notice was furnished counsel for the applicant Paraaque Investment and
Development Corporation; however, no copy was furnished to counsel for Roman C. Tamayo,
to whom one-third (1/3) portion of the land was adjudicated.

On January 18, 1967, within the extended period granted by the court, the oppositorsappellants filed the corresponding Record on Appeal, copy of which was duly served upon
appellees Paraaque Investment and Development Corporation and Roman C. Tamayo.
By an order dated March 8, 1967, the lower court required the Provincial Fiscal to file an
Amended Record on Appeal, so as to include therein certain orders and pleadings, within ten
(10) days from receipt of the order. 9
On March 16, 1967, the Amended Record on Appeal was duly filed and copies served upon
the appellees.
Pending the approval of the Record on Appeal, the applicant Paraaque Investment and
Development Corporation filed a motion for the issuance of a decree of registration pending
appeal. Likewise, Roman C. Tamayo, thru counsel, filed a motion for the issuance of a decree
of registration. Both motions were opposed by the Government.
On March 11, 1967, the lower court, ruling that its decision of November 19, 1966 had become
final as to the share of Roman C. Tamayo, directed the issuance of a decree of registration of
the entire land, one-third (1/3)pro-indiviso in favor of Roman C. Tamayo, and two-thirds (2/3)
pro indiviso in favor of Paraaque Investment and Development Corporation, subject to the
final outcome of the appeal.
On March 14, 1967, the Commissioner of Land Registration forthwith issued Decree No.
113485 pursuant to the said order, and, on March 15, 1967, the Register of Deeds issued
Original Certificate of Title No. 0-3151 of the Register of Deeds of the Province of Nueva Ecija.
On April 12, 1967, the lower court approved the Amended Record on Appeal which, together
with the evidence and transcripts, was forwarded to this Court in due course of appeal.
As the lower court denied reconsideration of the order directing the issuance of a decree of
registration, on May 29, 1967, the Director of Lands, Director of Forestry and the Armed
Forces of the Philippines instituted before this Court a special civil action for certiorari and
mandamus with preliminary injunction (L-27594), seeking to nullify the order dated March 11,
1967, the decree of registration issued pursuant thereto (Decree No. 113485 dated March 14,
1967) and Original Certificate of Title No. 0-3151 of the Register of Deeds for the province of
Nueva Ecija, and to command the respondent court to certify the entire proceedings and to
allow appeal to the Supreme Court from its decision in toto in LRC Case No. N-675, LRC Rec.
No. N-25545.
On June 5, 1967, We issued a writ of preliminary injunction as follows:
NOW, THEREFORE, until further orders from this Court, You (respondent Judge) are hereby
restrained from issuing a writ of possession in Land Registration Case No. N-675, LRC Rec.
No. 25545 of the Court of First Instance of Nueva Ecija, entitled "Paraaque Investment and
Development Corporation versus Director of Lands, et al."; You (respondent Paraaque
Investment and Development Corporation and Roman C. Tamayo), your agents or
representatives are hereby restrained from taking possession and/or excercising acts of
ownership, occupancy or possession over the property in question subject matter of Land
Registration Case No. N-675, LRC Rec. No. N-25545; and You (respondent Register of
Deeds) are hereby restrained from accepting for registration documents referring to the subject
land until petitioners shall have filed a notice of lis pendens as to the title certificates of Roman
Tamayo and Paraaque Investment and Development Corporation, under Sec. 24, Rule 14,
Rules of Court, subject of the above-mentioned Land Registration Case No. N-675, LRC Rec.
No. N-25545.
Accordingly, petitioners-appellants caused the entry of a notice of lis pendens to be duly
inscribed in the primary entry book of the Registry of Deeds of Nueva Ecija and annotated in
the memorandum of encumbrances in Original Certificate of Title No. 0-3151.
In due time, the respondents filed their answers to the petition for certiorari. The parties having
filed their respective memoranda, the case is deemed submitted for decision.
At the outset, We shall resolve the petition for certiorari and mandamus
(L-27594).

I
Under the circumstances of this case, the failure of the appellants to serve a copy of their
Notice of Appeal to the counsel for adjudicatee Roman C. Tamayo is not fatal to the appeal
because, admittedly, he was served with a copy of the original, as well as the Amended
Record on Appeal in both of which the Notice of Appeal is embodied. 10 Hence, such failure
cannot impair the right of appeal. 11
What is more, the appeal taken by the Government was from the entire decision, which is not
severable. Thus, the appeal affects the whole decision. 12
In any event, We rule that execution pending appeal is not applicable in a land registration
proceeding. It is fraught with dangerous consequences. Innocent purchasers may be misled
into purchasing real properties upon reliance on a judgment which may be reversed on appeal.
A Torrens title issued on the basis of a judgment that is not final is a nullity, as it is violative of
the explicit provisions of the Land Registration Act which requires that a decree shall be issued
only after the decision adjudicating the title becomes final and executory, and it is on the basis
of said decree that the Register of Deeds concerned issues the corresponding certificate of
title.
Consequently, the lower court acted without jurisdiction or exceeded its jurisdiction in ordering
the issuance of a decree of registration despite the appeal timely taken from the entire decision
a quo.
II
In the instant case, as a precaution, oppositors-appellants caused notice of lis pendens to be
duly inscribed in Original Certificate of Title No. 0-3151 of the Register of Deeds of Nueva
Ecija, thereby keeping the whole land subject matter of the appeal within the power of the court
until the litigation is terminated. 13
Such entry of notice of lis pendens cannot be cancelled until the final termination of the
litigation. The notice of lis pendens must be carried over in all titles subsequently issued, which
will yield to the ultimate result of the appeal.14
During the pendency of the appeal, it appears that Honofre A. Andrada, et al., filed with the
Court of First Instance of Nueva Ecija (Branch I, not the land registration court), a complaint
against the appellee Paraaque Investment and Development Corporation, Rodolfo A.
Cenidoza and Roman C. Tamayo, for reconveyance of a portion of the land in question (Civil
Case No. 4696). The trial court assumed jurisdiction over the case despite the pendency of the
appeal involving the same land, and decided the case in favor of plaintiffs. In violation of Our
injunction adverted to above, Paraaque Investment and Development Corporation executed a
subdivision plan of the original single parcel of land subject of the land registration proceedings
covered by Original Certificate of Title No.
0-3151, and deeded over six (6) lots of the subdivision plan to plaintiffs Honofre A. Andrada
and Nemesio P. Diaz. By an order dated September 23, 1968, entered in Civil Case No. 4696,
the Register of Deeds of Nueva Ecija was directed to cancel Original Certificate of title No. 03151 and to issue new titles to the above-named transferees "free from all liens and
encumbrances." Immediately, transfer certificates of title were issued to them and other
transferees in which the Register of Deeds of Nueva Ecija did not carry over the notice of lis
pendens originally inscribed in Original Certificate of Title No. 0-3151. Subsequently, other
transactions were entered into involving portions of the land reconveyed in Civil Case No.
4696, including a transfer of about 4,000 hectares to the Land Bank of the Philippines in
consideration of P8,940,000.00.
We find the order to cancel Original Certificate of Title No. 03151 and to issue subsequent
titles free from all liens and encumbrances to be void ab initio.
Civil Case No. 4696 is an action in personam to which the appellants are not parties; its object
was to decree reconveyance to plaintiffs of a portion of the area adjudicated to the Paraaque
Investment and Development Corporation and Roman C. Tamayo in Land Registration Case
No. N-675, LRC Rec. No. N-25545, which is subject to the outcome of the appeal. Such action

is barred by the pendency of the appeal. In that case, the court is without jurisdiction to order
the Register of Deeds to cancel Original Certificate of title No. 0-3151 and to issue titles to
transferees "free from all liens and encumbrances ." 15 Nor can such order be construed to
authorize the Register of Deeds to cancel the notice of lis pendens, which was not entered by
virtue of the reconveyance case. Thus, the Register of Deeds was duty bound to carry over the
said notice of lis pendens on all titles subsequently issued. But, in plain violation of lis pendens
in said titles; such act constitutes misfeasance in the performance of his duties for which he
may be held civilly and even criminally liable for any prejudice caused to innocent third parties,
but cannot affect the petitioners-appellants who are protected by Our writ of injunction and the
notice of lis pendens inscribed in the original title. It must be remembered that Our injunction
restrained the Register of Deeds "from accepting for registration documents referring to the
subject land until the petitioners shall have filed a notice of lis pendens as to the title
certificates of Roman C. Tamayo and Paraaque Investment and Development Corporation
under section 24, Rule 14, Rules of Court, subject of the above-mentioned Land Registration
Case No. N-675, LRC Rec. No. 25545." Its plain meaning is to enjoin registration of
documents and transactions unless the notice of lis pendens is annotated and so subject the
same to the outcome of the litigation. In such case, subsequent transferees cannot be
considered innocent purchasers for value.
On the other hand, the lower court's order dated September 23, 1968, in Civil Case No. 4696,
cannot overrule an injunction of this Court (in L-27594). As a result, We consider the notice of
lis pendens entered in virtue of this litigation to remain in full force and effect, and affects all
subsequent transferees of the title of the land subject of this appeal.
At any rate, it is well-settled 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. 16
III
We now consider the appeal on the merits.
1. To begin with, the original tracing cloth plan of the land applied for, which must be approved
by the Director of Lands, was not submitted in evidence. The submission of such plan is a
statutory requirement of mandatory character. 17 Unless a plan and its technical description
are duly approved by the Director of Lands, the same are not of much value. 18
It is true that blueprints of two survey plans were presented before the trial court (both marked
Exhibit "D"). The first blueprint copy of a plan of land as surveyed for Maria Padilla (Exhibit "D",
p. 4, Exhibits of Applicant), was not formally offered in evidence. The second plan of the land,
as surveyed for Paraaque Investment and Development Corporation (also marked as Exhibit
"D", p. 3, Exhibits of Applicant) was submitted by the said applicant, but it lacks the approval of
the Director of Lands.
Of course, the applicant attempts to justify the non-submission of the original tracing cloth plan
by claiming that the same must be with the Land Registration Commission which checked or
verified the survey plan and the technical descriptions thereof. It is not the function of the LRC
to check the original survey plan as it has no authority to approve original survey plans. If, for
any reason, the original tracing cloth plan was forwarded there, the applicant may easily
retrieve the same therefrom and submit the same in evidence. This was not done.
It is also asserted that a blue print copy of the plan (Exhibit "D", p. 5, Exhibits of Applicant) was
superimposed in the military plan of the reservation under Proclamation No. 237, which military
plan was presented in evidence by the oppositors-appellants (Exhibit "6"), and it was agreed
by the parties that the plan, Exhibit "D", superimposed in the plan of the area covered by the
proclamation, is the plan of the land applied for (p. 15, Brief for Applicant-Appellee).
Obviously, the superimposition of the copy of the survey plan of land as surveyed for applicant
in the military map of the area under Proclamation No. 237 was for the sole purpose of
showing that the land applied for is situated within the area covered by the military reservation
of Fort Magsaysay appropriately indicated in the perimeter map of said reservation (Exhibit

"6"). But the applicant is not relieved from the original tracing cloth plan approved by the
Director of Lands as required by law. One of the distinguishing marks of the Torrens System is
the absolute certainty of the identity of a registered land. Consequently the primary purpose of
the aforesaid requirement is to fix the exact or definite identity of the land as shown in the plan
and technical descriptions. Hence, the applicant is not relieved of his duty of submitting the
original tracing cloth of the survey plan of the land duly approved by the Director of Lands.
It will be noticed that the plan (Exhibit "D", p. 5, Exhibits of Applicant) does not bear the
approval of any officer authorized by law.
In similar manner, the surveyor's certificate, also required in original land registration
proceedings, was not offered in evidence.
2. We next consider the question of whether the applicant has a registerable title to the land
applied for.
The applicant relies on a purported titulo de informacion posesoria issued in the name of
Melecio Padilla (Exhibit "T" pp. 64-68, Exhibits of Applicant). However, neither the original of
the said titulo de informacion posesoria, nor a duly authenticated copy thereof, was submitted
in evidence, and there are serious flaws on the faces of the alleged copies of the document, as
in the circumstances surrounding their execution. Thus, the two (2) purported photostat copies
of the said informacion posesoria title materially differ on the date when said informacion
posesoria was issued. One copy showed that the said document was issued on March 5, 1895
(Exhibit "T") while the other indicated that it was issued twelve (12) years earlier, or on March
5, 1883 (Exhibit "2").
Moreover, according to the official records of the Register of Deeds of Nueva Ecija, on the
basis of the "List of Possessory Information Titles (Spanish Titles) of Nueva Ecija", the
corresponding supporting documents of which are kept in the vault of said office, the name of
Melecio Padilla does not appear among those listed as holders ofinformacion posesoria titles
as of the year 1898 covering lands situated in Santor (now Laur) Nueva Ecija. According to
said document, the name Melecio Padilla appears only in the list of holders of possessory
information titles over lands situated in Pearanda, Nueva Ecija, but of a substantially smaller
acreage. 19 Thus, the seven (7) parcels recorded in the name of Melecio Padilla covered only
a total area of 49 hectares, 18 acres and 325 centares. 20 In addition, the list of property
owners in Santor (now Laur), Nueva Ecija existing in the Division of Archives does not include
the name of Melecio Padilla. 21 It is true that an alleged copy of an informacion posesoria in
the name of Melecio Padilla, was recorded in the office of the Register of Deeds on November
10, 1942 by one Rodolfo Baltazar, Register of Deeds (Exhibit "H"), but the Register of Deeds
of Nueva Ecija could not certify to its veracity, as the supposed document does not exist in
their records. 22 There is another factor which weighs heavily against the claim of the
applicant. The alleged informacion posesoria covers an area of "seis mil quiiones, poco mas
e menos" or an equivalent of 16,800 hectares. Under the Royal Decrees in force at the time of
the supposed acquisition, no one could acquire public land in excess of 1,000 hectares. Thus,
the Royal Decrees of November 25, 1880 and October 26, 1881, prohibited any grant of public
land in excess of one thousand (1,000) hectares. 23
Besides, the document described in Exhibit "H" is not the titulo de informacion posesoria,
because it was merely a certification of possession of Melecio Padilla over the property, and
was issued without prejudice to a third party or parties having a better
right. 24 Thus, it states: "En su virtud habiendo examinado el Registro nuevamente formado
por la perdida o destruccion del mismo y no hallando en ningun asiento contrario a lo
relacionado reinscribe la posesion de la finca de este numero a favor de Don Melecio Padilla
sin perjuicio de tercero que puede tener mejor derecho a la propiedad." Under Spanish law, in
order that an informacion posesoria may be considered as title of ownership, it must be proven
that the holder thereof has complied with the provisions of Article 393 of the Spanish Mortgage
Law.

It cannot be claimed that the registration of possession has been legally converted into a
registration of ownership because Melecio Padilla had not complied with the requirements of
Article 393 of the Spanish Mortgage Law, to wit: "that the applicant has been in open
possession of the land; that an application to this effect be filed after the expiration of 20 years
from the date of such registration; that such conversion be announced by means of a
proclamation in a proper official bulletin; that the Court order the conversion of the registration
of possession into a record of ownership; and that the Registrar make the proper record
thereof in the Registry." 25 Evidently, Melecio Padilla, having died on February 9, 1900, barely
five (5) years after the inscription of the informacion posesoria, could not have converted the
same into a record of ownership twenty (20) years after such inscription, pursuant to Article
393 of the Spanish Mortgage Law.
One year after the promulgation of the Maura Law, or on April 17, 1895, the right to perfect
possessory information title under the law expired. After that date, full property right of the land
reverted to the government and the right of the cultivator and possessor to obtain gratuitous
title was extinguished. 26
Before the military reservation was established, the evidence is inconclusive as to possession,
for it is shown by the evidence that the land involved is largely mountainous and forested. As a
matter of fact, at the time of the hearing, it was conceded that approximately 13,957 hectares
of said land consist of public forest. During the lifetime of Melecio Padilla, only a small portion
thereof was cleared and cultivated under the "kaingin" system, while some portions were used
as grazing land. After his death, his daughter, Maria Padilla, caused the planting of vegetables
and had about forty (40) tenants for the purpose. 27 During the Japanese occupation, Maria
Padilla died. Alipio Alinsunurin and Encarnacion Caballero took possession of the land
approximately in 1950, but they had to abandon the place due to the unsettled peace and
order conditions in the area. In 1955, entry by them was prevented by the Army.
It seems obvious, on the basis of the facts in the record, that neither applicant Paraaque
Investment and Development Corporation nor Alipio Alinsunurin nor the latter's predecessorsin-interest have been "in open, continuous, exclusive, and notorious possession and
occupation" of the property in question, "under a bona fideclaim of acquisition or ownership, for
at least thirty years immediately preceding the filing of the application for confirmation of title."
28
A mere casual cultivation of portions of the land by the claimant, and the raising thereon of
cattle, do not constitute possession under claim of ownership. In that sense, possession is not
exclusive and notorious so as to give rise to a presumptive grant from the State. 29 While
grazing livestock over land is of course to be considered with other acts of dominion to show
possession, the mere occupancy of land by grazing livestock upon it, without substantial
inclosures or other permanent improvements, is not sufficient to support a claim of title thru
acquisitive prescription. 30 The possession of public land, however long the period may have
extended, never confers title thereto upon the possessor because the statute of limitations with
regard to public land does not operate against the State, unless the occupant can prove
possession and occupation of the same under claim of ownership for the required number of
years to constitute a grant from the State. 31
Apart from the aforesaid inconclusive evidence of possession to support the applicant's claim
of title, it does not appear that the said property has ever been declared for taxation purposes
by either applicant or applicant's predecessors-in-interest. Thus, the only tax declarations
submitted were those of Mamerto Garcia and Honofre Andrada, et al. (Exhibit "G", Tax
Declaration No. 5576, covering an area of 7,340 hectares) and Mamerto Garcia, et al. (Exhibit
"H-1", Tax Declaration No. 5577, over an area of 9,547 hectares) but both were filed only in
1958. The latter declaration contains an annotation that the property described therein is an
unidentified property, as the declarant failed to identify the same, and it "was only through his
insistence" that it was assessed. Neither applicant Paraaque Investment and Development
Corporation nor its predecessor, Alipio Alinsunurin had submitted any tax declaration

supporting its/his claim over the property. It is true that tax receipts and declarations of
ownership for taxation purposes are not incontrovertible evidence of ownership, but they
constitute at least proof that the holder had a claim of title over the property.
It is obvious that the applicant has failed to submit convincing proof of actual, peaceful and
adverse possession in the concept of owner of the entire area in question during the period
required by law. This is especially true in view of the basic presumption that lands of whatever
classification belong to the State and evidence of a land grant must be "well-nigh
incontrovertible." 32
Even more important, Section 48[b] of CA No. 141, as amended, applies exclusively to public
agricultural land. Forest lands or areas covered with forest are excluded. 33 It is well-settled
that forest land is incapable of registration; and its inclusion in a title, whether such title be one
issued during the Spanish sovereignty or under the present Torrens system of registration,
nullifies the title. 34
Finally, the applicant urges that Proclamation No. 237 recognizes the existence of private
property within the military reservation. It is true that the proclamation states that the same is
subject "to private rights, if any there be", but applicant must prove its private rights over the
property, which said party failed to do. 35 For it is well-settled that, unless the applicant has
shown by clear and convincing evidence that the property in question was ever acquired by the
applicant or his ancestors either by composition title from the Spanish Government or by
possessory information title, or any other means for the acquisition of public lands, the property
must be held to be part of the public domain. 36
WHEREFORE, decision in the above case is hereby rendered:
(1) in G. R. No. L-27594, the petition for certiorari is granted; the order dated March 11, 1967 in
LRC Case No. N-675, LRC Rec. No. N-25545, the decree of registration issued pursuant
thereto (Decree No. 113485 dated March 14, 1967), and Original Certificate of Title No. 0-3151
of the Registry of Deeds of Nueva Ecija are all declared void; the Registry of Deeds of Nueva
Ecija is ordered to recall and cancel all transfer certificates of title, including owners' duplicates
and mortgagees' copies, if any, arising out of Original Certificate of Title No. 0-3151; the
preliminary injunction issued on June 5, 1967 and the temporary restraining order issued on
June 1, 1973 are made final and permanent, with costs against respondents (except
respondent Judge); and
(2) in G. R. No. L-28144, the appealed decision is hereby reversed and set aside, and
judgment is rendered dismissing the application for registration. Costs against appellee.

13) GREGORIO C. JAVELOSA, petitioner, vs. COURT OF APPEALS, SPOUSES CORAZON

J. DE LEON & MELVIN DE LEON, SPOUSES KRISTINE SOLINAP & ALFONSO SOLINAP,
MARLINA J. BALLEZA, MYRNA J. SERVANDO, respondents.
DECISION
PUNO, J.:

The subject land, with an area of 2,061 square meters, situated in Jaro, Iloilo City, was
originally owned by petitioner Gregorio Javelosa. Sometime in the 70s, petitioner , mortgaged
said land to Jesus Jalbuena to secure several loans. Petitioner failed to pay his loans and
Jalbuena, as mortgagee, foreclosed on the land and purchased it as highest bidder at the
foreclosure sale.
During the one-year period of redemption, petitioner-mortgagor filed an action against the
mortgagee at the Regional Trial Court (RTC) of Iloilo City to annul the mortgage contracts and
public auction sale (Civil Case No. 16460).[1] He claimed that the mortgage contracts were
illegal and the conduct of the foreclosure sale was irregular.
While the case was pending, the period of redemption prescribed. Consequently, the
mortgagee consolidated title over the land, caused the cancellation of the mortgagors title and
the issuance of a new title in his name. Thereafter, petitioner obtained an Order[2] from the
RTC in Civil Case No. 16460 restraining the mortgagee from further effecting the foreclosure
sale of the property.
In the early part of December 1986, the mortgagee divided the subject land among his married
daughters (private respondents herein). On December 27, 1986, the mortgagee died. He was
substituted by his heirs, private respondents, in the pending RTC case for annulment of
mortgage and foreclosure sale. On January 19, 1987, title to the subject lot was issued in the
names of private respondents.
In the meantime, the RTC case for annulment of mortgage and foreclosure sale continued to
drag on. On June 1, 1993, private respondents, as registered owners, sent a letter to
petitioner-mortgagor demanding that he vacate the subject premises within ten (10) days from
receipt thereof. Despite receipt of the demand letter on June 4, 1993, petitioner-mortgagor
refused to vacate said lot. Thus, on August 6, 1993, private respondents filed a complaint for
illegal detainer before the Municipal Trial Court (MTC) in Cities, Iloilo City, and sought to eject
petitioner from the premises.
Petitioner, in his Answer,[3] asserted his ownership over the disputed land. He claimed that he
had a TCT in his name but that the mortgagee (father and predecessor-in-interest of private
respondents), in bad faith, was able to cause his title to be cancelled and a new title issued in
his name despite the pendency of the RTC case questioning the award of the subject land to
the mortgagee in the foreclosure proceedings. Thus, petitioner denied he was illegally
occupying the land. He claimed that he was legally entitled to the continued possession thereof
by virtue of pending legal incidents in his RTC case for annulment of mortgage and foreclosure
sale, from which transactions the mortgagee (predecessor-in-interest of private respondents)
derived his title.
The MTC decided the unlawful detainer case in favor of private respondents and ordered
petitioner to vacate the premises and pay reasonable rental. The MTC held that the pendency
of the case for annulment of mortgage in the RTC would not abate the proceedings in the
unlawful detainer case filed before it for the issues in these cases are distinct from each other.
[4]
Petitioner elevated the case to the RTC. He alleged that the ejectment case was improperly
filed with the MTC for private respondents (plaintiffs therein) should have prayed instead for
the issuance of a writ of possession with the RTC where the case for annulment of mortgage
and foreclosure sale was pending.
Without ruling on the propriety of the filing of the ejectment case before the MTC, the RTC
reversed the MTC decision on a different ground. It held that the complaint was filed out of
time for under Section 1, rule 70 of the Rules of Court, and unlawful detainer case must be
filed within one year from the time title was issued in private respondents name, i.e., from
January 19, 1987, and not from the last demand to vacate made by private respondents
(plaintiffs therein). Thus, the ejectment case initiated on August 6, 1993 was filed beyond the
one-year prescriptive period. The RTC dismissed the ejectment case.[5]

In their appeal to the Court of Appeals, private respondents alleged that the RTC erred in
holding that the complaint for unlawful detainer was filed out of time. The Court of Appeals
reversed the RTC decision and reinstated the decision of the MTC. It held that the complaint
for unlawful detainer was filed on time for the prescriptive period should be counted not from
the issuance of title in the name of paintiffs (private respondents herein), but from the date of
the last demand to vacate made against the defendant. Moreover, the fact that private
respondents were never in prior physical possession of the subject land is of no moment for
prior physical possession is necessary only in forcible entry cases. The Court of Appeals thus
ordered the petitioner (defendant in the ejectment case) to vacate the premises and pay
reasonable rentals.[6]
Hence, this petition for review on certiorari.
In this Court, petitioner does not raise the issue regarding the timeliness of the filling of the
ejectment case against him. For the first time, he puts in issue the nature of the suit filed
against him. He contends that the complaint filed before the MTC is not an unlawful detainer
suit but one for accion publiciana cognizable by the RTC. Petitioner argues that a reading of
the complaint reveals there was no allegation as to how entry on the land was made by
petitioner-mortgagor or when the latter unlawfully took possession of said land. Citing the case
of Sarona v. Villegas,[7]petitioner contends that the omission of these jurisdictional facts
stripped the MTC of jurisdiction over the case.
The petition is devoid of merit.
It is settled that jurisdiction of court over the subject matter of the litigation is determined by the
allegations in the complaint. It is equally settled that an error in jurisdiction can be raised at any
time and even for the first time on appeal.[8]
The issue of jurisdiction in the case at bar depends on the nature of the case filed by private
respondents in the MTC. If it is an unlawful detainer case, the action was properly filed with the
MTC. However, if the suit is one for accion publiciana, jurisdiction is with the RTC and the
complaint should be dismissed. To resolve the issue, we should examine the specific
allegations made by private respondents in their complaint. The complaint for unlawful
detainer[9] contained the following material allegations, viz:
xxx
2. Plaintiffs (private respondents) are the registered owners of a parcel of land x x x covered by
Transfer Certificate of Title No. T-74417 x x x;
3. Defendant (petitioner-mortgagor) has been illegally occupying the above described property
without the consent of the herein plaintiffs, thus unlawfully withholding possession of the same
from them who are the owners and the ones entitled to the physical possession thereof;
4. On June 1, 1993, plaintiffs x x x sent a letter dated May 26, 1993 to the defendant
demanding that he vacate the premises within ten days from receipt of the said letter x x x;
xxx
6. The said letter was received by the defendant on June 4, 1993 x x x;
xxx
8. Having received the demand to vacate the property in question, defendant is now unlawfully
withholding possession of the x x x property from the plaintiffs who are entitled to the physical
possession thereof;
9. As a consequence of the refusal of the defendant to vacate the premises x x x the plaintiffs
were constrained to file this action for illegal detainer against him in order to take away the
physical possession thereof from them and to place them in de facto possession of the said
property;
x x x"
Clearly, private respondents (as plaintiffs therein) alleged in their complaint that they are the
registered owners of the subject land and therefore, entitled to possession thereof; that
petitioners were illegally occupying the premises without their consent and thus unlawfully
withholding possession from them; and, despite receipt of their demand to vacate the

premises, petitioner refused to leave the property. On the face of the complaint, it also appears
that private respondents were seeking to recover merely the physical possession or posession
de facto of the subject land. Private respondents did not allege the incidents respecting the
mortgage of the land and the pending RTC case questioning the mortgage contract as the
issue involved therein is ownership which has no place in an ejectment case. In fine, the
allegations in the complaint make out a case for unlawful detainer. We have ruled in a long line
of cases[10] that in an action for unlawful detainer, a simple allegation that defendant is
unlawfully withholding possession from plaintiff is x x x sufficient for the words `unlawfully
withholding imply possession on the part of defendant, which was legal in the beginning,
having no other source than a contract, express or implied, possession which had later expired
as a right and is being withheld by defendant. Thus, in the case at bar, private respondents
allegation in their complaint that petitioner was unlawfully withholding possession of the land
from them is sufficient to make out a case for unlawful detainer.
In Co Tiamco v. Diaz,[11] the Court emphasized that the principle underlying the brevity and
simplicity of pleadings in forcible entry and unlawful detainer cases rests upon considerations
of public policy. Ejectment cases are summary in nature for they involve perturbation of social
order which must be restored as promptly as possible and, accordingly, technicalities or details
of procedure should be carefully avoided.
The ruling in the Sarona case[12] cited by petitioner i.e., that a complaint for unlawful detainer
should allege when and how entry on the land was made by the defendant, finds no
application to the case at bar. In Sarona, the main issue was the timeliness of the filing of the
complaint before the MTC. In forcible entry cases, the prescriptive period is counted from the
date of defendants actual entry on the land; in unlawful detainer, from the date of the last
demand to vacate. Hence, to determine whether the case was filed on time, there was a
necessity to ascertain whether the complaint was one for forcible entry or unlawful detainer. In
light of these considerations, the Court ruled that since the main distinction between the two
actions is when and how defendant entered the land, the determinative facts should be alleged
in the complaint. Thus, in Sarona, the jurisdiction of the MTC over the complaint was never in
issue for whether the complaint was one for forcible entry or unlawful detainer, the MTC had
jurisdiction over it. The case at bar is different for at issue is the jurisdiction of the MTC over
the unlawful detainer case for petitioner (defendant therein) asserts that the case is one for
accion publiciana cognizable by the RTC.
Petitioner likewise insists that he is entitled to the physical possession of the property since he
has been in actual, continuous possession thereof as owner-mortgagor. He contends that
private respondents have never been in actual physical possession of the land since they have
not prayed for the issuance of a writ of possession with the RTC where the case assailing the
sale of the land was pending and where the parties adverse claims of ownership are being
litigated.
We find petitioners contentions untenable.
Again, it is settled that prior physical possession is indispensable only in actions for forcible
entry but not in unlawful detainer. Since we have ruled that MTC case filed against petitioner is
one for unlawful detainer, petitioners prior possession of the land is of no moment. Private
respondents are entitled to its possession from the time title was issued in their favor as
registered owners.An action for unlawful detainer may be filed when possession by a landlord,
vendor, vendee or other person against whom the possession of any land or building is
unlawfully withheld after the expiration or termination of their right to hold possession, by virtue
of a contract, express or implied.[13]
Under the Rules, if the mortgaged property is not redeemed within one year from the
foreclosure sale, the purchaser at public auction is entitled to possession of the property.[14]
To obtain possession, the vendee or purchaser may either ask for a writ of possession or bring
an appropriate independent action, such as a suit for ejectment, which private respondents did.
The RTC case assailing the public auction sale of the property and seeking annulment of

mortgages did not preclude the filing of an ejectment case against petitioner.[15] We have
consistently ruled that the pendency of an action for annulment of sale and reconveyance
(which necessarily involves the issue of ownership) may not be successfully pleaded in
abatement of an action for ejectment, the issue in the latter being merely physical possession.
[16] To be sure, private respondents most effective remedy was to file a separate action for
unlawful detainer against petitioner.[17] They cannot ask for a writ of possession from the RTC
where the case for annulment of mortgage and foreclosure sale is pending because after the
mortgagee was able to consolidate his title on the land and a new title issued in his name,
petitioner was able to obtain an Order[18] from the RTC directing the mortgagee (predecessorin-interest of private respondents) to desist from further enforcing the foreclosure proceedings.
The case of Joven v. Court of Appeals[19] cited by petitioner is not on all fours with the case at
bar. In Joven, DBP as mortgagee was not able to consolidate its title over the foreclosed land
nor cause the cancellation of title in the mortgagors name. Although the title was still in the
name of the mortgagor, DBP sold the land to private respondents and the latter, without first
securing a court order, took the law into their own hands and entered said land. Hence, it was
the mortgagor who filed and successfully maintained an action for forcible against private
respondents, the transferees of the mortgagee.
The factual mould of the case at bar is different. The mortgagee (predecessor-in-interest of
private respondents) was able to consolidate his ownership over the foreclosed land, cause
the cancellation of title in the name of petitioner-mortgagor and the issuance of a new title in
his own name. It was this title that he passed on to his daughters, private respondents herein.
As aforestated, a restraining order was issued by the RTC where the case for annulment of
foreclosure sale is pending after the mortgagee had consolidated his ownership over the land,
hence, private respondents were left with no choice but to file a separate and independent
action for unlawful detainer to recover physical possession of the property. Unlike in the Joven
case, private respondents did not take the law into their own hands and entered the property
without the benefit of a court order. They sought the aid of the court precisely to settle the
issue of physical possession or possession de facto of the land when they filed the ejectment
case with the MTC.
We find that private respondents have adequately proved that they are entitled to possess the
subject land as the registered owners thereof. The age-old rule is that the person who has a
torrens title over a land is entitled to possession thereof.[20] Except for the bare claim that the
title of private respondents was obtained in bad faith, petitioner has pointed to no right to justify
his continued possession of the subject property.
Be that as it may, we reiterate the rule that the award of possession de facto over the subject
land to private respondents would not constitute res judicata as to the issue of ownership
thereof, which issue is still being litigated before the RTC of Iloilo City where the case for
annulment of mortgages and foreclosure proceedings is pending.
IN VIEW WHEREOF, the petition is DENIED. The Decision of the Court of Appeals, dated
January 17, 1996, is AFFIRMED in toto. No costs.
SO ORDERED.

14) JULIO LUCERO, movant-appellee,

vs.
JAIME L. LOOT, ET AL., oppositors-appellants.
Ramon Gonzales for movant-appellee.
Jaime L. Loot for and in his own behalf as oppositor-appellant.
FERNANDO, J.:
The order of the Court of First Instance of Iloilo, the former Judge Wenceslao L. Fernan
presiding, dated September 21, 1959, now on appeal before this Court, speaks to this effect:
"Regarding the writ of possession, once the final decree has been issued the issuance of a writ
of possession is only a matter of course if nothing in the past has been issued in favor of the
registered owner. There is no period of prescription as to the issuance of a writ of possession,
and inasmuch as the final decree has already been entered, it follows that a writ of possession
should be issued in favor of the registered owner."1
Accordingly, it granted a writ of possession in favor of movant, now appellee, Julio Lucero.
There was an opposition on the part of oppositors, all surnamed Loot, now appellants. The
lower court failed to see merit in the opposition interposed. It explained why: "The opposition
interposed by the oppositors to the effect that there are defects in the reconstitution of the
records and that the motion is not under oath is trivial in its nature and consequently
untenable."2 Accordingly, the writ of possession, as prayed for, was issued.
There was an urgent motion to quash the writ of possession filed by the oppositors on
September 25, 1959,3followed by a motion for reconsideration on October 10, 1959,4 which
was denied in an order of October 23, 1959.5 As set forth in such order of denial: "After
weighing the arguments adduced by the movant represented by Atty. Gonzales and the
oppositor represented by Atty. Loot, this Court adheres to the previous ruling that inasmuch as
no writ of possession has been issued in this case, it is the ministerial duty of this Court to
issue one in compliance of the provisions of Act 496 as amended." There was a second motion
for reconsideration filed by oppositors on November 3, 1959,6 which was denied in an order of
December 10, 1959.7 Not satisfied, there was still another motion for reconsideration of the
above order filed by oppositors on December 28, 1959,8 which similarly met the same fate, an
order of denial being issued on February 20, 1960.9 The appeal was taken direct to us.
The sore issue, therefore, is whether on the above facts, the order granting the writ of
possession was in accordance with law. The answer must be in the affirmative. This appeal
cannot prosper.
No other view would be compatible with the pertinent provision of the Land Registration Act,10
as uniformly interpreted by this Court. As was noted in the order of September 21, 1959, there
was a final decree in a land registration case which arose from a decision promulgated in
1938, the final decree being issued on October 29, 1941. It was not incorrect for the lower
court to state, therefore, that "the issuance of a writ of possession is only a matter of course if
nothing in the past has been issued in favor of the registered owner."11 It is equally true, as
likewise mentioned therein, that there is "no period of prescription as to the issuance of a writ
of possession, ..."12In Pasay Estate Co. v. Del Rosario,13 it has been made clear that the
purpose of the statutory provision empowering the then Court of Land Registration, now the
ordinary courts of first instance, to enforce its orders, judgments or decrees in the same way
that the judiciary does is so that the winning party could be placed in possession of the
property covered by such decree. Thereby, there would be an avoidance of the inconvenience
and the further delay to which a successful litigant would be subjected if he were compelled "to
commence other actions in other courts for the purpose of securing the fruits of his victory."
There was a restatement of the above principle in Demorar v. Ibaez,14 the closest in period
of time to the challenged order of the lower court. Thus: "We have heretofore held that a writ of
possession may be issued not only against the person who has been defeated in a registration
case but also against anyone adversely occupying the land or any portion thereof during the
land registration proceedings ... The issuance of the decree of registration is part of the

registration proceedings. In fact, it is supposed to end the said proceedings. Consequently, any
person unlawfully and adversely occupying said lot at any time up to the issuance of the final
decree, may be subject to judicial ejectment by means of a writ of possession and it is the duty
of the registration court to issue said writ when asked for by the successful claimant." As a
matter of fact, in a 1948 decision,15 it was held by us that "the fact that the petitioners have
instituted, more than one year after the decree of registration had been issued, an ordinary
action with the Court of First Instance attacking the validity of the decree on the ground of
fraud, is not a bar to the issuance of the writ of possession applied for by the registered
owners."
A few months after the issuance of such a challenged order of September 21, 1959, Marcelo v.
Mencias was decided,16 where this Court went so far as to hold that "if the writ of possession
issued in a land registration proceeding implies the delivery of possession of the land to the
successful litigant therein, ... a writ of demolition must, likewise, issue, especially considering
that the latter writ is but a complement of the former which, without said writ of demolition,
would be ineffective."
It is clear, therefore, to repeat, that on the facts as found, the validity of the challenged order
cannot be impugned. It is equally clear that this being a direct appeal to us, no questions of
fact may be raised. As was held recently inPerez v. Araneta:17 "Nothing is better settled than
that where the correctness of the findings of fact of the lower court are assailed, the Court of
Appeals is the proper forum. If resort be had directly to us, then appellant must be deemed to
have waived the opportunity otherwise his to inquire into such findings and to limit himself to
disputing the correctness of the law applied."
The problem thus confronting oppositors-appellants in bringing the matter direct to us was to
show that the above two-page order on the meager but sufficient facts as found, was vitiated
by error or errors in law. It was far from easy, therefore, considering as above shown that on
the authority of applicable decisions, the lower court was left with no choice but to issue the
writ of possession sought.
Resolute and undaunted, oppositors did their best to accomplish a task formidable in its
complexity. It seemed they overdid it. They assigned twenty-one errors a great many of them
factual, and, therefore, not for us to consider, and the remaining, except the last, far from
decisive in view of the rather settled state of the law concerning the issuance of a writ of
possession. Nor did the twenty-first error assigned suffice to call for a reversal, as will be more
fully explained. That is why, as earlier stated, the appeal was doomed to futility.
It would not be amiss, though, to discuss even briefly one of them, the fourteenth. Invoking
three of our previous decisions,18 they would impugn the issuance of the writ of possession on
the ground that they were not oppositors and defeated parties in the land registration
proceeding. They would ignore the fact, however, that in the above decisions relied upon, the
basis for the impropriety of issuing a writ of possession was that the parties adversely affected
entered the property in question after the issuance of the decree. There is nothing in the
challenged order that such is the case here. Thus, they would raise a factual issue a matter
not properly cognizable by us.
A reminder may not be out of place. The apparent ease with which oppositors-appellants could
conjure up so many alleged errors, while it may be a tribute to their ingenuity in making a twopage order yield so many instances of the rankest violation of legal precepts, hardly
contributes to the persuasiveness of their brief. As a matter of fact, the suspicion could be
legitimately entertained that in thus attempting to paint the highly unrealistic picture of a terse
and brief order being so sadly riddled with errors, oppositors- appellants were trying in vain to
bolster what inherently was a weak case.
That is all that needs be said about this appeal except for the disposition of the twenty-first
error assigned, referring to the existence of a pending case between the parties for
reconveyance.19 There was no denial in the brief for movant-appellee that such a case was
then pending at the time the respective briefs were filed. What is decided here cannot affect

whatever final decision might possibly have been rendered by this time in the aforesaid
reconveyance action. Nonetheless, the mere fact that such suit was then pending did not oust
the lower court of its jurisdiction to issue the writ of possession. As stated by our present Chief
Justice in Agreda v. Rodriguez:20"Besides, it is clear that respondent Judge had jurisdiction to
pass upon the motion of Santiago Agreda for the issuance of a writ of possession. Whether or
not the motion should have been denied, in view of institution of said Civil Case No. 6267, is a
matter that does not affect said jurisdiction."
WHEREFORE, the order of September 21, 1959, granting the writ of possession in favor of
movant-appellee, and the orders of October 23, 1959, December 10, 1959 and February 20,
1960, denying the reconsideration thereof, are affirmed. With costs against oppositorsappellants.

15) ANTONIO H. NOBLEJAS, as Commissioner of Land Registration, petitioner,

vs.
CLAUDIO TEEHANKEE, as Secretary of Justice, and RAFAEL M. SALAS, as Executive
Secretary,respondents.
Leandro Sevilla, Ramon C. Aquino and Lino M. Patajo for petitioner.
Claudio Teehankee for and in his own behalf as respondent.
REYES, J.B.L., Actg. C.J.:
Petition for a writ of prohibition with preliminary injunction to restrain the Secretary of Justice
from investigating the official actuations of the Commissioner of Land Registration, and to
declare inoperative his suspension by the Executive Secretary pending investigation.
The facts are not in dispute. Petitioner Antonio H. Noblejas is the duly appointed, confirmed
and qualified Commissioner of Land Registration, a position created by Republic Act No. 1151.
By the terms of section 2 of said Act, the said Commissioner is declared "entitled to the same
compensation, emoluments and privileges as those of a Judge of the Court of First Instance."
The appropriation laws (Rep. Acts 4642, 4856 and 5170) in the item setting forth the salary of
said officer, use the following expression:
1. One Land Registration Commissioner with the rank and privileges of district judge
P19,000.00.
On March 7, 1968, respondent Secretary of Justice coursed to the petitioner a letter requiring
him to explain in writing not later than March 9, 1968 why no disciplinary action should be
taken against petitioner for "approving or recommending approval of subdivision, consolidation
and consolidated-subdivision plans covering areas greatly in excess of the areas covered by
the original titles." Noblejas answered and apprised the Secretary of Justice that, as he
enjoyed the rank, privileges, emoluments and compensation of a Judge of the Court of First
Instance, he could only be suspended and investigated in the same manner as a Judge of the
Courts of First Instance, and, therefore, the papers relative to his case should be submitted to
the Supreme Court, for action thereon conformably to section 67 of the Judiciary Act (R. A. No.
296) and Revised Rule 140 of the Rules of Court.
On March 17, 1968, petitioner Noblejas received a communication signed by the Executive
Secretary, "by authority of the President", whereby, based on "finding that a prima facie case
exists against you for gross negligence and conduct prejudicial to the public interest",
petitioner was "hereby suspended, upon receipt hereof, pending investigation of the above
charges."
On March 18, 1968, petitioner applied to this Court, reiterating the contentions advanced in his
letter to the Secretary of Justice, claiming lack of jurisdiction and abuse of discretion, and
praying for restraining writs. In their answer respondents admit the facts but denied that
petitioner, as Land Registration Commissioner, exercises judicial functions, or that the
petitioner may be considered a Judge of First Instance within the purview of the Judiciary Act
and Revised Rules of Court 140; that the function of investigating charges against public
officers is administrative or executive in nature; that the Legislature may not charge the
judiciary with non-judicial functions or duties except when reasonably incidental to the
fulfillment of judicial duties, as it would be in violation of the principle of the separation of
powers.
Thus, the stark issue before this Court is whether the Commissioner of Land Registration may
only be investigated by the Supreme Court, in view of the conferment upon him by the Statutes
heretofore mentioned (Rep. Act 1151 and Appropriation Laws) of the rank and privileges of a
Judge of the Court of First Instance.
First to militate against petitioner's stand is the fact that section 67 of the Judiciary Act
providing for investigation, suspension or removal of Judges, specifically recites that "No
District Judge shall be separated or removed from office by the President of the Philippines

unless sufficient cause shall exist in the judgment of the Supreme Court . . ." and it is nowhere
claimed, much less shown, that the Commissioner of Land Registration is a District Judge, or
in fact a member of the Judiciary at all.
In the second place, petitioner's theory that the grant of "privileges of a Judge of First Instance"
includes by implication the right to be investigated only by the Supreme Court and to be
suspended or removed upon its recommendation, would necessarily result in the same right
being possessed by a variety of executive officials upon whom the Legislature had
indiscriminately conferred the same privileges. These favoured officers include (a) the Judicial
Superintendent of the Department of Justice (Judiciary Act, sec. 42); (b) the Assistant Solicitors
General, seven in number (Rep. Act No. 4360); (c) the City Fiscal of Quezon City (R.A. No.
4495); (d) the City Fiscal of Manila (R. A. No. 4631) and (e) the Securities and Exchange
Commissioner (R. A. No. 5050, s. 2). To adopt petitioner's theory, therefore, would mean
placing upon the Supreme Court the duty of investigating and disciplining all these officials,
whose functions are plainly executive, and the consequent curtailment by mere implication
from the Legislative grant, of the President's power to discipline and remove administrative
officials who are presidential appointees, and which the Constitution expressly placed under
the President's supervision and control (Constitution, Art. VII, sec. 10[i]).
Incidentally, petitioner's stand would also lead to the conclusion that the Solicitor General,
another appointee of the President, could not be removed by the latter, since the Appropriation
Acts confer upon the Solicitor General the rank and privileges of a Justice of the Court of
Appeals, and these Justices are only removable by the Legislature, through the process of
impeachment (Judiciary Act, sec. 24, par. 2).
In our opinion, such unusual corollaries could not have been intended by the Legislature when
it granted these executive officials the rank and privileges of Judges of First Instance. This
conclusion gains strength when account is taken of the fact that in the case of the Judges of
the Court of Agrarian Relations and those of the Court of Tax Appeals, the organic statutes of
said bodies (Republic Act 1267, as amended by Act 1409; Rep. Act No. 1125) expressly
provide that they are to be removed from office for the same causes and in the same manner
provided by law for Judges of First Instance", or "members of the judiciary of appellate rank".
The same is true of Judges of the Court of Agrarian Relations (Comm. Act No. 103) and of the
Commissioner of Public Service (Public Service Act, Sec. 3). It is thereby shown that where the
legislative design is to make the suspension or removal procedure prescribed for Judges of
First Instance applicable to other officers, provision to that effect is made in plain and
unequivocal language.
But the more fundamental objection to the stand of petitioner Noblejas is that, if the Legislature
had really intended to include in the general grant of "privileges" or "rank and privileges of
Judges of the Court of First Instance" the right to be investigated by the Supreme Court, and to
be suspended or removed only upon recommendation of that Court, then such grant of
privileges would be unconstitutional, since it would violate the fundamental doctrine of
separation of powers, by charging this court with the administrative function of supervisory
control over executive officials, and simultaneously reducing pro tanto the control of the Chief
Executive over such officials.
Justice Cardozo ruled in In re Richardson et al., Connolly vs. Scudder (247 N. Y. 401, 160 N.
E. 655), saying:
There is no inherent power in the Executive or Legislature to charge the judiciary with
administrative functions except when reasonably incidental to the fulfillment of judicial duties.
The United States Supreme Court said in Federal Radio Commission vs. General Electric Co.,
et al., 281 U.S. 469, 74 Law. Ed., 972,
But this court cannot be invested with jurisdiction of that character, whether for purposes of
review or otherwise. It was brought into being by the judiciary article of the Constitution, is
invested with judicial power only and can have no jurisdiction other than of cases and
controversies falling within the classes enumerated in that article. It cannot give decisions

which are merely advisory; nor can it exercise or participate in the exercise of functions which
are essentially legislative or administrative. Keller v. Potomac Electric Power Co., supra (261
U.S. 444, 67 L. ed. 736, 43 Sup. Ct. Rep. 445) and cases cited; Postum Cereal Co. vs.
California Fig Nut Co. supra (272 U.S. 700, 701, 71 L. ed. 481, 47 Sup. Ct. Rep. 284); Liberty
Warehouse Co. v. Grannis, 273 U.S. 70, 74, 71 L. ed. 541, 544, 47 Sup. Ct. Rep. 282; Willing
v. Chicago Auditorium Asso. 277 U.S. 274, 289, 72 L. ed. 880, 884, 48 Sup. Ct. Rep. 507; Ex
parte Bakelite Corp. 279 U.S. 438, 449, 73 L. ed. 789, 793, 49 Sup. Ct. Rep. 411. (Federal
Radio Commission v. General Electric Company, 281 U.S. 469, 74 L. ed. 972.) (Emphasis
supplied.)
In this spirit, it has been held that the Supreme Court of the Philippines and its members
should not and cannot be required to exercise any power or to perform any trust or to assume
any duty not pertaining to or connected with the administration of judicial functions; and a law
requiring the Supreme Court to arbitrate disputes between public utilities was pronounced void
in Manila Electric Co. vs. Pasay Transportation Co. (57 Phil. 600).1wph1.t
Petitioner Noblejas seeks to differentiate his case from that of other executive officials by
claiming that under Section 4 of Republic Act No. 1151, he is endowed with judicial functions.
The section invoked runs as follows:
Sec. 4. Reference of doubtful matters to Commissioner of Land Registration. When the
Register of Deeds is in doubt with regard to the proper step to be taken or memorandum to be
made in pursuance of any deed, mortgage, or other instrument presented to him for
registration, or where any party in interest does not agree with the Register of Deeds with
reference to any such matter, the question shall be submitted to the Commissioner of Land
Registration either upon the certification of the Register of Deeds, stating the question upon
which he is in doubt, or upon the suggestion in writing by the party in interest; and thereupon
the Commissioner, after consideration of the matter shown by the records certified to him, and
in case of registered lands, after notice to the parties and hearing, shall enter an order
prescribing the step to be taken or memorandum to be made. His decision in such cases shall
be conclusive and binding upon all Registers of Deeds: Provided, further, That, when a party in
interest disagrees with the ruling or resolution of the Commissioner and the issue involves a
question of law, said decision may be appealed to the Supreme Court within thirty days from
and after receipt of the notice thereof.
Serious doubt may well be entertained as to whether the resolution of a consulta by a Register
of Deeds is a judicial function, as contrasted with administrative process. It will be noted that
by specific provision of the section, the decision of the Land Registration Commissioner "shall
be conclusive and binding upon all Registers of Deeds" alone, and not upon other parties. This
limitation1 in effect identifies the resolutions of the Land Registration Commissioner with those
of any other bureau director, whose resolutions or orders bind his subordinates alone. That the
Commissioner's resolutions are appealable does not prove that they are not administrative;
any bureau director's ruling is likewise appealable to the corresponding department head.
But even granting that the resolution of consultas by the Register of Deeds should constitute a
judicial (or more properly quasi judicial) function, analysis of the powers and duties of the Land
Registration Commissioner under Republic Act No. 1151, sections 3 and 4, will show that the
resolution of consultas are but a minimal portion of his administrative or executive functions
and merely incidental to the latter.
Conformably to the well-known principle of statutory construction that statutes should be given,
whenever possible, a meaning that will not bring them in conflict with the Constitution,2 We are
constrained to rule that the grant by Republic Act 1151 to the Commissioner of Land
Registration of the "same privileges as those of a Judge of the Court of First Instance" did not
include, and was not intended to include, the right to demand investigation by the Supreme
Court, and to be suspended or removed only upon that Court's recommendation; for otherwise,
the said grant of privileges would be violative of the Constitution and be null and void.
Consequently, the investigation and suspension of the aforenamed Commissioner pursuant to

sections 32 and 34 of the Civil Service Law (R. A. 2260) are neither abuses of discretion nor
acts in excess of jurisdiction.
WHEREFORE, the writs of prohibition and injunction applied for are denied, and the petition is
ordered dismissed. No costs.
16) GAVINO A. TUMALAD and GENEROSA R. TUMALAD, plaintiffs-appellees,
vs.
ALBERTA VICENCIO and EMILIANO SIMEON, defendants-appellants.
Castillo & Suck for plaintiffs-appellees.
Jose Q. Calingo for defendants-appellants.
REYES, J.B.L., J.:
Case certified to this Court by the Court of Appeals (CA-G.R. No. 27824-R) for the reason that
only questions of law are involved.
This case was originally commenced by defendants-appellants in the municipal court of Manila
in Civil Case No. 43073, for ejectment. Having lost therein, defendants-appellants appealed to
the court a quo (Civil Case No. 30993) which also rendered a decision against them, the
dispositive portion of which follows:
WHEREFORE, the court hereby renders judgment in favor of the plaintiffs and against the
defendants, ordering the latter to pay jointly and severally the former a monthly rent of P200.00
on the house, subject-matter of this action, from March 27, 1956, to January 14, 1967, with
interest at the legal rate from April 18, 1956, the filing of the complaint, until fully paid, plus
attorney's fees in the sum of P300.00 and to pay the costs.
It appears on the records that on 1 September 1955 defendants-appellants executed a chattel
mortgage in favor of plaintiffs-appellees over their house of strong materials located at No. 550
Int. 3, Quezon Boulevard, Quiapo, Manila, over Lot Nos. 6-B and 7-B, Block No. 2554, which
were being rented from Madrigal & Company, Inc. The mortgage was registered in the Registry
of Deeds of Manila on 2 September 1955. The herein mortgage was executed to guarantee a
loan of P4,800.00 received from plaintiffs-appellees, payable within one year at 12% per
annum. The mode of payment was P150.00 monthly, starting September, 1955, up to July
1956, and the lump sum of P3,150 was payable on or before August, 1956. It was also agreed
that default in the payment of any of the amortizations, would cause the remaining unpaid
balance to becomeimmediately due and Payable and
the Chattel Mortgage will be enforceable in accordance with the provisions of Special Act No.
3135, and for this purpose, the Sheriff of the City of Manila or any of his deputies is hereby
empowered and authorized to sell all the Mortgagor's property after the necessary publication
in order to settle the financial debts of P4,800.00, plus 12% yearly interest, and attorney's
fees... 2
When defendants-appellants defaulted in paying, the mortgage was extrajudicially foreclosed,
and on 27 March 1956, the house was sold at public auction pursuant to the said contract. As
highest bidder, plaintiffs-appellees were issued the corresponding certificate of sale. 3
Thereafter, on 18 April 1956, plaintiffs-appellant commenced Civil Case No. 43073 in the
municipal court of Manila, praying, among other things, that the house be vacated and its
possession surrendered to them, and for defendants-appellants to pay rent of P200.00 monthly
from 27 March 1956 up to the time the possession is surrendered. 4 On 21 September 1956,
the municipal court rendered its decision
... ordering the defendants to vacate the premises described in the complaint; ordering further
to pay monthly the amount of P200.00 from March 27, 1956, until such (time that) the premises
is (sic) completely vacated; plus attorney's fees of P100.00 and the costs of the suit. 5

Defendants-appellants, in their answers in both the municipal court and court a quo impugned
the legality of the chattel mortgage, claiming that they are still the owners of the house; but
they waived the right to introduce evidence, oral or documentary. Instead, they relied on their
memoranda in support of their motion to dismiss, predicated mainly on the grounds that: (a)
the municipal court did not have jurisdiction to try and decide the case because (1) the issue
involved, is ownership, and (2) there was no allegation of prior possession; and (b) failure to
prove prior demand pursuant to Section 2, Rule 72, of the Rules of Court. 6
During the pendency of the appeal to the Court of First Instance, defendants-appellants failed
to deposit the rent for November, 1956 within the first 10 days of December, 1956 as ordered
in the decision of the municipal court. As a result, the court granted plaintiffs-appellees' motion
for execution, and it was actually issued on 24 January 1957. However, the judgment
regarding the surrender of possession to plaintiffs-appellees could not be executed because
the subject house had been already demolished on 14 January 1957 pursuant to the order of
the court in a separate civil case (No. 25816) for ejectment against the present defendants for
non-payment of rentals on the land on which the house was constructed.
The motion of plaintiffs for dismissal of the appeal, execution of the supersedeas bond and
withdrawal of deposited rentals was denied for the reason that the liability therefor was
disclaimed and was still being litigated, and under Section 8, Rule 72, rentals deposited had to
be held until final disposition of the appeal. 7
On 7 October 1957, the appellate court of First Instance rendered its decision, the dispositive
portion of which is quoted earlier. The said decision was appealed by defendants to the Court
of Appeals which, in turn, certified the appeal to this Court. Plaintiffs-appellees failed to file a
brief and this appeal was submitted for decision without it.
Defendants-appellants submitted numerous assignments of error which can be condensed into
two questions, namely: .
(a) Whether the municipal court from which the case originated had jurisdiction to adjudicate
the same;
(b) Whether the defendants are, under the law, legally bound to pay rentals to the plaintiffs
during the period of one (1) year provided by law for the redemption of the extrajudicially
foreclosed house.
We will consider these questions seriatim.
(a) Defendants-appellants mortgagors question the jurisdiction of the municipal court from
which the case originated, and consequently, the appellate jurisdiction of the Court of First
Instance a quo, on the theory that the chattel mortgage is void ab initio; whence it would follow
that the extrajudicial foreclosure, and necessarily the consequent auction sale, are also void.
Thus, the ownership of the house still remained with defendants-appellants who are entitled to
possession and not plaintiffs-appellees. Therefore, it is argued by defendants-appellants, the
issue of ownership will have to be adjudicated first in order to determine possession. lt is
contended further that ownership being in issue, it is the Court of First Instance which has
jurisdiction and not the municipal court.
Defendants-appellants predicate their theory of nullity of the chattel mortgage on two grounds,
which are: (a) that, their signatures on the chattel mortgage were obtained through fraud,
deceit, or trickery; and (b) that the subject matter of the mortgage is a house of strong
materials, and, being an immovable, it can only be the subject of a real estate mortgage and
not a chattel mortgage.
On the charge of fraud, deceit or trickery, the Court of First Instance found defendantsappellants' contentions as not supported by evidence and accordingly dismissed the charge, 8
confirming the earlier finding of the municipal court that "the defense of ownership as well as
the allegations of fraud and deceit ... are mere allegations." 9
It has been held in Supia and Batiaco vs. Quintero and Ayala 10 that "the answer is a mere
statement of the facts which the party filing it expects to prove, but it is not evidence; 11 and
further, that when the question to be determined is one of title, the Court is given the authority

to proceed with the hearing of the cause until this fact is clearly established. In the case of Sy
vs. Dalman, 12 wherein the defendant was also a successful bidder in an auction sale, it was
likewise held by this Court that in detainer cases the aim of ownership "is a matter of defense
and raises an issue of fact which should be determined from the evidence at the trial." What
determines jurisdiction are the allegations or averments in the complaint and the relief asked
for. 13
Moreover, even granting that the charge is true, fraud or deceit does not render a contract void
ab initio, and can only be a ground for rendering the contract voidable or annullable pursuant
to Article 1390 of the New Civil Code, by a proper action in court. 14 There is nothing on record
to show that the mortgage has been annulled. Neither is it disclosed that steps were taken to
nullify the same. Hence, defendants-appellants' claim of ownership on the basis of a voidable
contract which has not been voided fails.
It is claimed in the alternative by defendants-appellants that even if there was no fraud, deceit
or trickery, the chattel mortgage was still null and void ab initio because only personal
properties can be subject of a chattel mortgage. The rule about the status of buildings as
immovable property is stated in Lopez vs. Orosa, Jr. and Plaza Theatre Inc., 15 cited in
Associated Insurance Surety Co., Inc. vs. Iya, et al. 16 to the effect that
... it is obvious that the inclusion of the building, separate and distinct from the land, in the
enumeration of what may constitute real properties (art. 415, New Civil Code) could only mean
one thing that a building is by itself an immovable property irrespective of whether or not
said structure and the land on which it is adhered to belong to the same owner.
Certain deviations, however, have been allowed for various reasons. In the case of Manarang
and Manarang vs. Ofilada, 17 this Court stated that "it is undeniable that the parties to a
contract may by agreement treat as personal property that which by nature would be real
property", citing Standard Oil Company of New York vs. Jaramillo. 18 In the latter case, the
mortgagor conveyed and transferred to the mortgagee by way of mortgage "the following
described personal property." 19The "personal property" consisted of leasehold rights and a
building. Again, in the case of Luna vs. Encarnacion, 20 the subject of the contract designated
as Chattel Mortgage was a house of mixed materials, and this Court hold therein that it was a
valid Chattel mortgage because it was so expressly designated and specifically that the
property given as security "is a house of mixed materials, which by its very nature is
considered personal property." In the later case of Navarro vs. Pineda, 21 this Court stated that

The view that parties to a deed of chattel mortgage may agree to consider a house as personal
property for the purposes of said contract, "is good only insofar as the contracting parties are
concerned. It is based, partly, upon the principle of estoppel" (Evangelista vs. Alto Surety, No.
L-11139, 23 April 1958). In a case, a mortgaged house built on a rented land was held to be a
personal property, not only because the deed of mortgage considered it as such, but also
because it did not form part of the land (Evangelists vs. Abad, [CA]; 36 O.G. 2913), for it is now
settled that an object placed on land by one who had only a temporary right to the same, such
as the lessee or usufructuary, does not become immobilized by attachment (Valdez vs. Central
Altagracia, 222 U.S. 58, cited in Davao Sawmill Co., Inc. vs. Castillo, et al., 61 Phil. 709).
Hence, if a house belonging to a person stands on a rented land belonging to another person,
it may be mortgaged as a personal property as so stipulated in the document of mortgage.
(Evangelista vs. Abad, Supra.) It should be noted, however that the principle is predicated on
statements by the owner declaring his house to be a chattel, a conduct that may conceivably
estop him from subsequently claiming otherwise. (Ladera vs. C.N. Hodges, [CA] 48 O.G.
5374): 22
In the contract now before Us, the house on rented land is not only expressly designated as
Chattel Mortgage; it specifically provides that "the mortgagor ... voluntarily CEDES, SELLS and
TRANSFERS by way of Chattel Mortgage 23 the property together with its leasehold rights
over the lot on which it is constructed and participation ..." 24Although there is no specific

statement referring to the subject house as personal property, yet by ceding, selling or
transferring a property by way of chattel mortgage defendants-appellants could only have
meant to convey the house as chattel, or at least, intended to treat the same as such, so that
they should not now be allowed to make an inconsistent stand by claiming otherwise.
Moreover, the subject house stood on a rented lot to which defendats-appellants merely had a
temporary right as lessee, and although this can not in itself alone determine the status of the
property, it does so when combined with other factors to sustain the interpretation that the
parties, particularly the mortgagors, intended to treat the house as personalty. Finally unlike in
the Iya cases, Lopez vs. Orosa, Jr. and Plaza Theatre, Inc. 25 and Leung Yee vs. F. L. Strong
Machinery and Williamson, 26 wherein third persons assailed the validity of the chattel
mortgage, 27 it is the defendants-appellants themselves, as debtors-mortgagors, who are
attacking the validity of the chattel mortgage in this case. The doctrine of estoppel therefore
applies to the herein defendants-appellants, having treated the subject house as personalty.
(b) Turning to the question of possession and rentals of the premises in question. The Court of
First Instance noted in its decision that nearly a year after the foreclosure sale the mortgaged
house had been demolished on 14 and 15 January 1957 by virtue of a decision obtained by
the lessor of the land on which the house stood. For this reason, the said court limited itself to
sentencing the erstwhile mortgagors to pay plaintiffs a monthly rent of P200.00 from 27 March
1956 (when the chattel mortgage was foreclosed and the house sold) until 14 January 1957
(when it was torn down by the Sheriff), plus P300.00 attorney's fees.
Appellants mortgagors question this award, claiming that they were entitled to remain in
possession without any obligation to pay rent during the one year redemption period after the
foreclosure sale, i.e., until 27 March 1957. On this issue, We must rule for the appellants.
Chattel mortgages are covered and regulated by the Chattel Mortgage Law, Act No. 1508. 28
Section 14 of this Act allows the mortgagee to have the property mortgaged sold at public
auction through a public officer in almost the same manner as that allowed by Act No. 3135, as
amended by Act No. 4118, provided that the requirements of the law relative to notice and
registration are complied with. 29 In the instant case, the parties specifically stipulated that "the
chattel mortgage will be enforceable in accordance with the provisions of Special Act No.
3135 ... ." 30 (Emphasis supplied).
Section 6 of the Act referred to 31 provides that the debtor-mortgagor (defendants-appellants
herein) may, at any time within one year from and after the date of the auction sale, redeem
the property sold at the extra judicial foreclosure sale. Section 7 of the same Act 32 allows the
purchaser of the property to obtain from the court the possession during the period of
redemption: but the same provision expressly requires the filing of a petition with the proper
Court of First Instance and the furnishing of a bond. It is only upon filing of the proper motion
and the approval of the corresponding bond that the order for a writ of possession issues as a
matter of course. No discretion is left to the court. 33 In the absence of such a compliance, as
in the instant case, the purchaser can not claim possession during the period of redemption as
a matter of right. In such a case, the governing provision is Section 34, Rule 39, of the Revised
Rules of Court 34 which also applies to properties purchased in extrajudicial foreclosure
proceedings. 35 Construing the said section, this Court stated in the aforestated case of Reyes
vs. Hamada.
In other words, before the expiration of the 1-year period within which the judgment-debtor or
mortgagor may redeem the property, the purchaser thereof is not entitled, as a matter of right,
to possession of the same. Thus, while it is true that the Rules of Court allow the purchaser to
receive the rentals if the purchased property is occupied by tenants, he is, nevertheless,
accountable to the judgment-debtor or mortgagor as the case may be, for the amount so
received and the same will be duly credited against the redemption price when the said debtor
or mortgagor effects the redemption.Differently stated, the rentals receivable from tenants,
although they may be collected by the purchaser during the redemption period, do not belong
to the latter but still pertain to the debtor of mortgagor. The rationale for the Rule, it seems, is

to secure for the benefit of the debtor or mortgagor, the payment of the redemption amount
and the consequent return to him of his properties sold at public auction. (Emphasis supplied)
The Hamada case reiterates the previous ruling in Chan vs. Espe. 36
Since the defendants-appellants were occupying the house at the time of the auction sale, they
are entitled to remain in possession during the period of redemption or within one year from
and after 27 March 1956, the date of the auction sale, and to collect the rents or profits during
the said period.
It will be noted further that in the case at bar the period of redemption had not yet expired
when action was instituted in the court of origin, and that plaintiffs-appellees did not choose to
take possession under Section 7, Act No. 3135, as amended, which is the law selected by the
parties to govern the extrajudicial foreclosure of the chattel mortgage. Neither was there an
allegation to that effect. Since plaintiffs-appellees' right to possess was not yet born at the filing
of the complaint, there could be no violation or breach thereof. Wherefore, the original
complaint stated no cause of action and was prematurely filed. For this reason, the same
should be ordered dismissed, even if there was no assignment of error to that effect. The
Supreme Court is clothed with ample authority to review palpable errors not assigned as such
if it finds that their consideration is necessary in arriving at a just decision of the cases. 37
It follows that the court below erred in requiring the mortgagors to pay rents for the year
following the foreclosure sale, as well as attorney's fees.
FOR THE FOREGOING REASONS, the decision appealed from is reversed and another one
entered, dismissing the complaint. With costs against plaintiffs-appellees.

17) 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 BALITUNGTUNGANTONIO 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, INTERPEOPLES 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.
RESOLUTION
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 largescale 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.

In support of the application, both Balbalio and Alberto testified that they had acquired the
subject land by virtue of prescription Balbalio claimed to have received Lots 1-5 from her father
shortly after the Liberation. She testified she was born in the land, which was possessed by
her parents under claim of ownership. 4 Alberto said he received Lots 6-9 in 1961 from his
mother, Bella Alberto, who declared that the land was planted by Jaime and his predecessorsin-interest to bananas, avocado, nangka and camote, and was enclosed with a barbed-wire
fence. She was corroborated by Felix Marcos, 67 years old at the time, who recalled the earlier
possession of the land by Alberto's father. 5 Balbalio presented her tax declaration in 1956 and
the realty tax receipts from that year to 1964, 6 Alberto his tax declaration in 1961 and the
realty tax receipts from that year to 1964. 7
18) G.R. No. L-43938

April 15, 1988

REPUBLIC OF THE PHILIPPINES (DIRECTOR OF FOREST DEVELOPMENT), petitioner,

vs.
HON. COURT OF APPEALS (THIRD DIVISION) and JOSE Y. DE LA ROSA, respondents.
G.R. No. L-44081 April 15, 1988
BENGUET CONSOLIDATED, INC., petitioner,
vs.
HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORIA, BENJAMIN and EDUARDO,
all surnamed DE LA ROSA, represented by their father JOSE Y. DE LA ROSA, respondents.
G.R. No. L-44092 April 15, 1988
ATOK-BIG WEDGE MINING COMPANY, petitioner,
vs.
HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORlA, BENJAMIN and EDUARDO,
all surnamed DE LA ROSA, represented by their father, JOSE Y. DE LA ROSA, respondents.

Benguet opposed on the ground that the June Bug mineral claim covering Lots 1-5 was sold to
it on September 22, 1934, by the successors-in-interest of James Kelly, who located the claim
in September 1909 and recorded it on October 14, 1909. From the date of its purchase,
Benguet had been in actual, continuous and exclusive possession of the land in concept of
owner, as evidenced by its construction of adits, its affidavits of annual assessment, its
geological mappings, geological samplings and trench side cuts, and its payment of taxes on
the land. 8
For its part, Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the
Emma and Fredia mineral claims located by Harrison and Reynolds on December 25, 1930,
and recorded on January 2, 1931, in the office of the mining recorder of Baguio. These claims
were purchased from these locators on November 2, 1931, by Atok, which has since then been
in open, continuous and exclusive possession of the said lots as evidenced by its annual
assessment work on the claims, such as the boring of tunnels, and its payment of annual taxes
thereon. 9
The location of the mineral claims was made in accordance with Section 21 of the Philippine
Bill of 1902 which provided that:

CRUZ, J.:

SEC. 21. All valuable mineral deposits in public lands in the philippine Islands both surveyed
and unsurveyed are hereby declared to be free and open to exploration, occupation and
purchase and the land in which they are found to occupation and purchase by the citizens of
the United States, or of said islands.

The Regalian doctrine reserves to the State all natural wealth that may be found in the bowels
of the earth even if the land where the discovery is made be private. 1 In the cases at bar,
which have been consolidated because they pose a common issue, this doctrine was not
correctly applied.

The Bureau of Forestry Development also interposed its objection, arguing that the land
sought to be registered was covered by the Central Cordillera Forest Reserve under
Proclamation No. 217 dated February 16, 1929. Moreover, by reason of its nature, it was not
subject to alienation under the Constitutions of 1935 and 1973. 10

These cases arose from the application for registration of a parcel of land filed on February 11,
1965, by Jose de la Rosa on his own behalf and on behalf of his three children, Victoria,
Benjamin and Eduardo. The land, situated in Tuding, Itogon, Benguet Province, was divided
into 9 lots and covered by plan Psu-225009. According to the application, Lots 1-5 were sold to
Jose de la Rosa and Lots 6-9 to his children by Mamaya Balbalio and Jaime Alberto,
respectively, in 1964. 2

The trial court * denied the application, holding that the applicants had failed to prove their
claim of possession and ownership of the land sought to be registered. 11 The applicants
appealed to the respondent court, * which reversed the trial court and recognized the claims of
the applicant, but subject to the rights of Benguet and Atok respecting their mining claims. 12
In other words, the Court of Appeals affirmed the surface rights of the de la Rosas over the
land while at the same time reserving the sub-surface rights of Benguet and Atok by virtue of
their mining claims.

The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok
Big Wedge Corporation, as to Portions of Lots 1-5 and all of Lots 6-9, and by the Republic of
the Philippines, through the Bureau of Forestry Development, as to lots 1-9. 3

Both Benguet and Atok have appealed to this Court, invoking their superior right of ownership.
The Republic has filed its own petition for review and reiterates its argument that neither the
private respondents nor the two mining companies have any valid claim to the land because it
is not alienable and registerable.

It is true that the subject property was considered forest land and included in the Central
Cordillera Forest Reserve, but this did not impair the rights already vested in Benguet and Atok
at that time. The Court of Appeals correctly declared that:
There is no question that the 9 lots applied for are within the June Bug mineral claims of
Benguet and the "Fredia and Emma" mineral claims of Atok. The June Bug mineral claim of
plaintiff Benguet was one of the 16 mining claims of James E. Kelly, American and mining
locator. He filed his declaration of the location of the June Bug mineral and the same was
recorded in the Mining Recorder's Office on October 14, 1909. All of the Kelly claims ha
subsequently been acquired by Benguet Consolidated, Inc. Benguet's evidence is that it had
made improvements on the June Bug mineral claim consisting of mine tunnels prior to 1935. It
had submitted the required affidavit of annual assessment. After World War II, Benguet
introduced improvements on mineral claim June Bug, and also conducted geological
mappings, geological sampling and trench side cuts. In 1948, Benguet redeclared the "June
Bug" for taxation and had religiously paid the taxes.
The Emma and Fredia claims were two of the several claims of Harrison registered in 1931,
and which Atok representatives acquired. Portions of Lots 1 to 5 and all of Lots 6 to 9 are
within the Emma and Fredia mineral claims of Atok Big Wedge Mining Company.
The June Bug mineral claim of Benguet and the Fredia and Emma mineral claims of Atok
having been perfected prior to the approval of the Constitution of the Philippines of 1935, they
were removed from the public domain and had become private properties of Benguet and
Atok.
It is not disputed that the location of the mining claim under consideration was perfected prior
to November 15, 1935, when the Government of the Commonwealth was inaugurated; and
according to the laws existing at that time, as construed and applied by this court in McDaniel
v. Apacible and Cuisia (42 Phil. 749), a valid location of a mining claim segregated the area
from the public domain. Said the court in that case: The moment the locator discovered a
valuable mineral deposit on the lands located, and perfected his location in accordance with
law, the power of the United States Government to deprive him of the exclusive right to the
possession and enjoyment of the located claim was gone, the lands had become mineral lands
and they were exempted from lands that could be granted to any other person. The
reservations of public lands cannot be made so as to include prior mineral perfected locations;
and, of course, if a valid mining location is made upon public lands afterwards included in a
reservation, such inclusion or reservation does not affect the validity of the former location. By
such location and perfection, the land located is segregated from the public domain even as
against the Government. (Union Oil Co. v. Smith, 249 U.S. 337; Van Mess v. Roonet, 160 Cal.
131; 27 Cyc. 546).
"The legal effect of a valid location of a mining claim is not only to segregate the area from the
public domain, but to grant to the locator the beneficial ownership of the claim and the right to
a patent therefor upon compliance with the terms and conditions prescribed by law. Where
there is a valid location of a mining claim, the area becomes segregated from the public
domain and the property of the locator." (St. Louis Mining & Milling Co. v. Montana Mining Co.,
171 U.S. 650; 655; 43 Law ed., 320, 322.) "When a location of a mining claim is perfected it
has the effect of a grant by the United States of the right of present and exclusive possession,
with the right to the exclusive enjoyment of all the surface ground as well as of all the minerals
within the lines of the claim, except as limited by the extralateral right of adjoining locators; and
this is the locator's right before as well as after the issuance of the patent. While a lode locator

acquires a vested property right by virtue of his location made in compliance with the mining
laws, the fee remains in the government until patent issues."(18 R.C.L. 1152) (Gold Creek
Mining Corporation v. Hon. Eulogio Rodriguez, Sec. of Agriculture and Commerce, and Quirico
Abadilla, Director of the Bureau of Mines, 66 Phil. 259, 265-266)
It is of no importance whether Benguet and Atok had secured a patent for as held in the Gold
Creek Mining Corp. Case, for all physical purposes of ownership, the owner is not required to
secure a patent as long as he complies with the provisions of the mining laws; his possessory
right, for all practical purposes of ownership, is as good as though secured by patent.
We agree likewise with the oppositors that having complied with all the requirements of the
mining laws, the claims were removed from the public domain, and not even the government of
the Philippines can take away this right from them. The reason is obvious. Having become the
private properties of the oppositors, they cannot be deprived thereof without due process of
law. 13
Such rights were not affected either by the stricture in the Commonwealth Constitution against
the alienation of all lands of the public domain except those agricultural in nature for this was
made subject to existing rights. Thus, in its Article XIII, Section 1, it was categorically provided
that:
SEC. 1. All agricultural, timber and mineral lands of the public domain, waters, minerals, coal,
petroleum and other mineral oils, all forces of potential energy and other natural resources of
the Philipppines belong to the State, and their disposition, exploitation, development, or
utilization shall be limited to citizens of the Philippines or to corporations or associations at
least 60% of the capital of which is owned by such citizens, subject to any existing right, grant,
lease or concession at the time of the inauguration of the government established under this
Constitution. Natural resources with the exception of public agricultural lands, shall not be
alienated, and no license, concession, or lease for the exploitation, development or utilization
of any of the natural resources shall be granted for a period exceeding 25 years, except as to
water rights for irrigation, water supply, fisheries, or industrial uses other than the development
of water power, in which case beneficial use may be the measure and the limit of the grant.
Implementing this provision, Act No. 4268, approved on November 8, 1935, declared:
Any provision of existing laws, executive order, proclamation to the contrary notwithstanding,
all locations of mining claim made prior to February 8, 1935 within lands set apart as forest
reserve under Sec. 1826 of the Revised Administrative Code which would be valid and
subsisting location except to the existence of said reserve are hereby declared to be valid and
subsisting locations as of the date of their respective locations.
The perfection of the mining claim converted the property to mineral land and under the laws
then in force removed it from the public domain. 14 By such act, the locators acquired
exclusive rights over the land, against even the government, without need of any further act
such as the purchase of the land or the obtention of a patent over it. 15 As the land had
become the private property of the locators, they had the right to transfer the same, as they
did, to Benguet and Atok.
It is true, as the Court of Appeals observed, that such private property was subject to the
"vicissitudes of ownership," or even to forfeiture by non-user or abandonment or, as the private
respondents aver, by acquisitive prescription. However, the method invoked by the de la Rosas
is not available in the case at bar, for two reasons.

First, the trial court found that the evidence of open, continuous, adverse and exclusive
possession submitted by the applicants was insufficient to support their claim of ownership.
They themselves had acquired the land only in 1964 and applied for its registration in 1965,
relying on the earlier alleged possession of their predecessors-in-interest. 16 The trial judge,
who had the opportunity to consider the evidence first-hand and observe the demeanor of the
witnesses and test their credibility was not convinced. We defer to his judgment in the absence
of a showing that it was reached with grave abuse of discretion or without sufficient basis. 17
Second, even if it be assumed that the predecessors-in-interest of the de la Rosas had really
been in possession of the subject property, their possession was not in the concept of owner of
the mining claim but of the property as agricultural land, which it was not. The property was
mineral land, and they were claiming it as agricultural land. They were not disputing the lights
of the mining locators nor were they seeking to oust them as such and to replace them in the
mining of the land. In fact, Balbalio testified that she was aware of the diggings being
undertaken "down below" 18 but she did not mind, much less protest, the same although she
claimed to be the owner of the said land.
The Court of Appeals justified this by saying there is "no conflict of interest" between the
owners of the surface rights and the owners of the sub-surface rights. This is rather doctrine,
for it is a well-known principle that the owner of piece of land has rights not only to its surface
but also to everything underneath and the airspace above it up to a reasonable height. 19
Under the aforesaid ruling, the land is classified as mineral underneath and agricultural on the
surface, subject to separate claims of title. This is also difficult to understand, especially in its
practical application.
Under the theory of the respondent court, the surface owner will be planting on the land while
the mining locator will be boring tunnels underneath. The farmer cannot dig a well because he
may interfere with the operations below and the miner cannot blast a tunnel lest he destroy the
crops above. How deep can the farmer, and how high can the miner, go without encroaching
on each other's rights? Where is the dividing line between the surface and the sub-surface
rights?
The Court feels that the rights over the land are indivisible and that the land itself cannot be
half agricultural and half mineral. The classification must be categorical; the land must be
either completely mineral or completely agricultural. In the instant case, as already observed,
the land which was originally classified as forest land ceased to be so and became mineral
and completely mineral once the mining claims were perfected. 20 As long as mining
operations were being undertaken thereon, or underneath, it did not cease to be so and
become agricultural, even if only partly so, because it was enclosed with a fence and was
cultivated by those who were unlawfully occupying the surface.
What must have misled the respondent court is Commonwealth Act No. 137, providing as
follows:
Sec. 3. All mineral lands of the public domain and minerals belong to the State, and their
disposition, exploitation, development or utilization, shall be limited to citizens of the
Philippines, or to corporations, or associations, at least 60% of the capital of which is owned by
such citizens, subject to any existing right, grant, lease or concession at the time of the
inauguration of government established under the Constitution.

SEC. 4. The ownership of, and the right to the use of land for agricultural, industrial,
commercial, residential, or for any purpose other than mining does not include the ownership
of, nor the right to extract or utilize, the minerals which may be found on or under the surface.
SEC. 5. The ownership of, and the right to extract and utilize, the minerals included within all
areas for which public agricultural land patents are granted are excluded and excepted from all
such patents.
SEC. 6. The ownership of, and the right to extract and utilize, the minerals included within all
areas for which Torrens titles are granted are excluded and excepted from all such titles.
This is an application of the Regalian doctrine which, as its name implies, is intended for the
benefit of the State, not of private persons. The rule simply reserves to the State all minerals
that may be found in public and even private land devoted to "agricultural, industrial,
commercial, residential or (for) any purpose other than mining." Thus, if a person is the owner
of agricultural land in which minerals are discovered, his ownership of such land does not give
him the right to extract or utilize the said minerals without the permission of the State to which
such minerals belong.
The flaw in the reasoning of the respondent court is in supposing that the rights over the land
could be used for both mining and non-mining purposes simultaneously. The correct
interpretation is that once minerals are discovered in the land, whatever the use to which it is
being devoted at the time, such use may be discontinued by the State to enable it to extract
the minerals therein in the exercise of its sovereign prerogative. The land is thus converted to
mineral land and may not be used by any private party, including the registered owner thereof,
for any other purpose that will impede the mining operations to be undertaken therein, For the
loss sustained by such owner, he is of course entitled to just compensation under the Mining
Laws or in appropriate expropriation proceedings. 21
Our holding is that Benguet and Atok have exclusive rights to the property in question by virtue
of their respective mining claims which they validly acquired before the Constitution of 1935
prohibited the alienation of all lands of the public domain except agricultural lands, subject to
vested rights existing at the time of its adoption. The land was not and could not have been
transferred to the private respondents by virtue of acquisitive prescription, nor could its use be
shared simultaneously by them and the mining companies for agricultural and mineral
purposes.
WHEREFORE, the decision of the respondent court dated April 30, 1976, is SET ASIDE and
that of the trial court dated March 11, 1969, is REINSTATED, without any pronouncement as to
costs.

19) REPUBLIC OF THE PHILIPPINES, petitioner, vs. ALEXANDRA LAO, respondent.

DECISION
YNARES-SANTIAGO, J.:
This petition for review assails the decision[1] of the Court of Appeals in CA-G.R. CV No.
56230, which affirmed the judgment[2] of the Regional Trial Court of Tagaytay City, Branch 18,
in Land Registration Case No. TG-719.
On September 4, 1995, respondent Alexandra Lao filed with the Regional Trial Court of
Tagaytay City, Branch 18, an application for the registration of title over a parcel of land
designated as Lot No. 3951, Cad. 452-D, Silang Cadastre, Plan Ap-04-007770, consisting of
nine thousand three hundred forty nine (9,349) square meters under Presidential Decree No.
1529, otherwise known as the Property Registration Decree. Respondent alleged that she
acquired the land by purchase from the siblings Raymundo Noguera and Ma. Victoria A.
Valenzuela, who inherited it from Generosa Medina. The latter, in turn, inherited the land from
her father, Jose Medina, who acquired the same from Edilberto Perido by transfer.
In the alternative, respondent prayed that the land be awarded to her under the provisions of
Commonwealth Act No. 141, as amended, also known as the Public Land Act, based on her
and her predecessors open, public, actual, continuous, exclusive, notorious and adverse
possession and occupancy under bona fide claim of ownership for more than thirty (30) years.
At the hearing in the lower court, respondent presented the following witnesses: Candido
Amoroso, who testified on the ownership of the land by Edilberto Perido in 1932; Vicente
Laudato, who testified on respondents purchase of the property from Raymundo and Ma.
Victoria; and Fina Victoria So-Liwanag, who assisted respondent in her application for
registration. Respondent likewise presented in evidence the Deed of Absolute Sale[3] dated
April 19, 1994 executed by Raymundo and Victoria in her favor, the survey plan and technical
description of the property, and the tax declarations in the name of respondent as well as her
predecessors-in-interest.
On June 28, 1996, the trial court made the following findings, to wit:
x x x the applicant acquired the subject parcel of land by purchase from Raymundo Noguera
and Ma. Victoria A. Valenzuela in 1994, and that applicant and her predecessors-in-interest
have been in continuous, uninterrupted, open, public, adverse and in the concept of an owner
possession of the subject parcel of land for more than thirty (30) years now; and that the same
parcel was declared for taxation purposes; that the realty taxes due thereon have been duly
paid; that the land involved in this case is not covered by any land patent. Likewise, this Court
could well-discern from the survey plan covering the same property, as well as technical
description and other documents presented, that the land sought to be registered is agricultural

and not within any forest zone or public domain; and that tacking her predecessors-in-interests
possession to hers, applicant appears to be in continuous and public possession thereof for
more than thirty (30) years.[4]
The dispositive portion of the decision reads:
WHEREFORE, this Court hereby approves this application for registration and thus places
under the operation of Act 141, Act 496 and/or P.D. 1529, otherwise known as Property
Registration Law, the land described in Plan Ap-04-007770 and containing an area of nine
thousand three hundred forty-nine (9,349) square meters as supported by its technical
description now forming part of the record of this case, in addition to other proofs adduced in
the name of ALEXANDRA A. LAO, of legal age, married to NELSON O. LAO, Filipino citizen,
with residence at 1648 Yakal Street, Sta. Cruz, Manila.
Once this Decision becomes final and executory, the corresponding decree of registration shall
forthwith issue.
SO ORDERED.[5]
Petitioner Republic of the Philippines, represented by the Office of the Solicitor General,
appealed to the Court of Appeals which was docketed as CA-G.R. CV No. 56230. On October
15, 2001, the appellate court affirmed the judgment of the trial court.[6] Hence, this petition for
review raising the following errors:
THERE IS NO SUFFICIENT EVIDENCE TO WARRANT THE ORIGINAL REGISTRATION OF
TITLE OF SUBJECT PROPERTY IN THE NAME OF RESPONDENT.[7]
A. RESPONDENT FAILED TO COMPLY WITH THE LEGALLY REQUIRED PERIOD AND
ACTS OF POSSESSION.[8]
B. THE TAX DECLARATIONS PRESENTED BY RESPONDENT DO NOT CORROBORATE
HER CLAIM OF THE LEGALLY REQUIRED PERIOD OF POSSESSION.[9]
C. RESPONDENT FAILED TO PRESENT A CERTIFICATION FROM THE APPROPRIATE
GOVERNMENT AGENCY THAT THE LAND SUBJECT OF HER APPLICATION FOR
REGISTRATION IS ALIENABLE AND DISPOSABLE LAND OF THE PUBLIC DOMAIN.[10]
In sum, the issues presented before us are (a) whether or not respondent was able to prove,
by the quantum of evidence mandated by law, that she met the required period of open,
exclusive, continuous and notorious possession, in the concept of an owner, of the subject
parcel of land; and (b) whether or not respondent was able to show that the land subject of her
application was disposable and alienable land of the public domain.
Section 14 (1) of Presidential Decree No. 1529 states:
Who may apply. The following persons may file in the proper Court of First Instance an
application for registration of title to land, whether personally or through their duly authorized
representatives:
(1) Those who by themselves or through their predecessor-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of alienable and disposable
lands of the public domain under a bona fide claim of ownership since June 12, 1945, or
earlier.
On the other hand, Section 48 (b) of Commonwealth Act No. 141, as amended by Section 4 of
Presidential Decree No. 1073, provides:
The provisions of Section 48(b) and Section 48(c), Chapter VIII, of the Public Land Act are
hereby amended in the sense that these provisions shall apply only to alienable and
disposable lands of the public domain which have been in open, continuous, exclusive and
notorious possession and occupation by the applicant himself or thru his predecessor-ininterest, under a bona fide claim of acquisition of ownership, since June 12, 1945.
Thus, before one can register his title over a parcel of land, the applicant must show that (a)
he, by himself or through his predecessors-in-interest, has been in open, continuous, exclusive
and notorious possession and occupation of the subject land under a bona fide claim of
ownership since June 12, 1945 or earlier; and (b) the land subject of the application is
alienable and disposable land of the public domain.

Respondent submits that Section 48 (b) of CA 141 was amended by Republic Act No. 6940,
which reduced the required period of possession to thirty years immediately prior to the filing of
the application. Said law became effective on April 15, 1990. However, petitioner maintains
that the required period of possession remained the same. RA 6940 explicitly states that its
provisions amended sections 44, 45 and 47 of CA 141. Nothing in RA 6940 amends Section 48
(b). In other words, the requisites for judicial confirmation of imperfect or incomplete title set
forth therein remains the same, namely, (1) possession of the subject land from June 12, 1945,
and (2) the classification of the land as alienable and disposable land of the public domain. In
Public Estates Authority v. Court of Appeals,[11] we held that:
Under the public land act, judicial confirmation of imperfect title required possession en
concepto de dueo since time immemorial, or since July 26, 1894. Under C.A. No. 141, this
requirement was retained. However, on June 22, 1957, Republic Act No. 1942 was enacted
amending C.A. No. 141. This later enactment required adverse possession for a period of only
thirty (30) years. On January 25, 1977, the President enacted P.D. No. 1073, further amending
C.A. No. 141, extending the period for filing applications for judicial confirmation of imperfect or
incomplete titles to December 31, 1987. Under this decree, the provisions of Section 48 (b)
and Section 48 (c), Chapter VIII, of the Public Land Act are hereby amended in the sense that
these provisions shall apply only to alienable and disposable land of the public domain which
have been in open, continuous, exclusive and notorious possession and occupation by the
applicant himself or thru his predecessors-in-interest under a bona fide claim of acquisition of
ownership, since June 12, 1945.
The aforequoted ruling was reiterated in Republic v. Court of Appeals,[12] thus:
This Court has held in Republic vs. Doldol [295 SCRA 359, (1998)] that, originally, Section
48(b) of C.A. No. 141 provided for possession and occupation of lands of the public domain
since July 26, 1894. This was superseded by R.A. No. 1942 which provided for a simple thirtyyear prescriptive period of occupation by an applicant for judicial confirmation of imperfect title.
The same, however, has already been amended by Presidential Decree No. 1073, approved
on January 25, 1977. As amended Section 48 (b) now reads:
(b) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of agricultural lands of the
public domain, under a bona fide claim of acquisition or ownership, since June 12, 1945, or
earlier, immediately preceding the filing of the application for confirmation of title, except when
prevented by wars or force majeure. Those shall be conclusively presumed to have performed
all the conditions essential to a Government grant and shall be entitled to a certificate of title
under the provisions of this chapter.
Petitioner argues that respondent failed to prove by incontrovertible evidence that she had
been in open, continuous, exclusive and notorious possession and occupation of the subject
land, in the concept of an owner, since June 12, 1945 or earlier. According to petitioner,
respondents witnesses did not state the exact period when respondents predecessors-ininterest started occupying the subject land. They only made sweeping statements to the effect
that respondent had been in possession of the property for more than thirty years. Hence, it
can not be conclusively determined whether respondent and her predecessors-in-interest have
truly been in possession of the property since June 12, 1945 or earlier. Furthermore,
respondent failed to show how the property was transferred from Generosa Medina to
Raymundo Noguera and Ma. Victoria A. Valenzuela. No extrajudicial settlement of property
was established. Consequently, respondent can not tack her possession with those of
Generosa Medina and her predecessors-in-interest.
There is merit in the petition.
Candido Amoroso, respondents first witness, testified that he first knew of the property in 1932
and that it was owned by a certain Edilberto Perido. However, no evidence was presented to
support his claim. Respondent submitted the tax declarations in the name of her predecessorsin-interest, including that of Edilberto. However, the earliest of these documents pertained to

the year 1948 only, three years short of the required period. Respondents other witness,
Vicente Laudato, claimed that he had known about the property since he was ten years old,
which was in 1945, and that Edilberto Perido owned the property. On cross-examination,
however, he testified that he based his information on Edilbertos ownership of the land on the
fact that the latter used to greet him and his family whenever he passed by their house.
Vicente later on admitted that he did not know with certainty whether Edilberto was indeed the
owner and possessor of the property.[13]
Finally, respondent failed to present the extrajudicial settlement or other document evidencing
the transfer of the land from Generosa Medina to Raymundo Noguera and Ma. Victoria A.
Valenzuela. She likewise did not show the relationship between these parties. She only
presented the deed of sale between her and the latter, where it was stated that Raymundo and
Ma. Victoria inherited the property from Generosa. Hence, respondent can not tack her
possession with those of Generosa and her predecessors-in-interest. At most, respondents
possession can only be reckoned from the time that Raymundo and Ma. Victoria claimed
possession of the property.
Respondent having thus failed to show by incontrovertible evidence that her possession of the
land commenced on June 12, 1945 or earlier, she failed to meet the first requisite under the
pertinent provisions of PD 1529 and CA 141.
Petitioner further submits that respondent failed to show that the land subject of her application
is classified as alienable and disposable land of the public domain. Under the Regalian
doctrine which is embodied in our Constitution,[14] all lands of the public domain belong to the
State, which is the source of any asserted right to ownership of land.[15] All lands not
appearing to be clearly within private ownership are presumed to belong to the State.[16]
Unless public land is shown to have been reclassified or alienated to a private person by the
State, it remains part of the inalienable public domain.[17] To overcome this presumption,
incontrovertible evidence must be established that the land subject of the application is
alienable or disposable.[18]
In De Ocampo v. Arlos,[19] it was held that:
x x x a title may be judicially confirmed under Section 48 of the Public Land Act only if it
pertains to alienable lands of the public domain. Unless such assets are reclassified and
considered disposable and alienable, occupation thereof in the concept of owner, no matter
how long, cannot ripen into ownership and be registered as a title. Verily, Presidential Decree
No. 1073 clarified Section 48 (b) of the Public Land Act by specifically declaring that the latter
applied only to alienable and disposable lands of the public domain.
In the case at bar, no certification from the appropriate government agency or official
proclamation reclassifying the land as alienable and disposable was presented by
respondent.Respondent merely submitted the survey map and technical descriptions of the
land, which contained no information regarding the classification of the property. These
documents are not sufficient to overcome the presumption that the land sought to be
registered forms part of the public domain.
Respondent argues that she was not required to present any certification stating that the land
is open for disposition because no opposition to her application was ever made by the
appropriate government agencies. She claims that in the absence of any proof to the contrary,
lands of the public domain are agricultural in nature and thus susceptible to private ownership.
As an applicant for registration of a parcel of land, respondent had the initial obligation to show
that the property involved is agricultural. Being the interested party, it was incumbent upon her
to prove that the land being registered is indeed alienable or disposable. She cannot rely on
the mere presumption that it was agricultural and, therefore, alienable part of the public
domain.[20]Thus, in Director of Lands v. Funtilar,[21] we held:
It was rather sweeping for the appellate court to rule that after an applicant files his application
for registration, the burden shifts totally to the government to prove that the land forms part of
the unclassified forest zone. The ruling in Heirs of Amunategui v. Director of Forestry (126

SCRA 69) governs applications for confirmation of imperfect title. The applicant shoulders the
burden of overcoming the presumption that the land sought to be registered forms part of the
public domain.
Moreover, the absence of opposition from the government agencies is of no moment because
the State cannot be estopped by the omission, mistake or error of its officials or agents.[22]
It bears stressing at this point that declassification of forest land and its conversion into
alienable or disposable land for agricultural or other purposes requires an express and positive
act from the government.[23] It cannot be presumed; but must be established by convincing
proof.[24]
WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the Court of
Appeals in CA-G.R. CV No. 56230 is REVERSED and SET ASIDE. The application for original
registration of title over Lot No. 3951, Cad. 452-D, Silang Cadastre, Plan Ap-04-007770, which
was docketed as Land Registration Case No. TG-719 before the Regional Trial Court of
Tagaytay City, Branch 18, is DENIED.

20) EDUARDO S. BARANDA and ALFONSO HITALIA, petitioners,

vs.
HONORABLE JUDGE TITO GUSTILO, ACTING REGISTER OF DEEDS AVITO SACLAUSO,
HONORABLE COURT OF APPEALS, and ATTY. HECTOR P. TEODOSIO, respondents.
Eduardo S. Baranda for petitioners.
Rico & Associates for private respondents.
GUTIERREZ, JR., J.:
Eduardo S. Baranda and Alfonso Hitalia were the petitioners in G.R. No. 64432 and the private
respondents in G.R. No. 62042. The subject matter of these two (2) cases and the instant case
is the same a parcel of land designated as Lot No. 4517 of the Cadastral Survey of Sta.
Barbara, Iloilo covered by Original Certificate of Title No. 6406.
The present petition arose from the same facts and events which triggered the filing of the
earlier petitions. These facts and events are cited in our resolution dated December 29, 1983
in G.R. No. 64432, as follows:
. . . This case has its origins in a petition for reconstitution of title filed with the Court of First
Instance of Iloilo involving a parcel of land known as Lot No. 4517 of the Sta. Barbara
Cadastre covered by Original Certificate of Title No. 6406 in the name of Romana Hitalia.
Eventually, Original Certificate of Title No. 6406 was cancelled and Transfer Certificate of Title
No. 106098 was issued in the names of Alfonso Hitalia and Eduardo S. Baranda The Court
issued a writ of possession which Gregorio Perez, Maria P. Gotera and Susana Silao refused
to honor on the ground that they also have TCT No. 25772 over the same Lot No. 4517. The
Court, after considering the private respondents' opposition and finding TCT No. 25772
fraudulently acquired, ordered that the writ of possession be carried out. A motion for
reconsideration having been denied, a writ of demolition was issued on March 29, 1982. Perez
and Gotera filed a petition for certiorari and prohibition with the Court of Appeals. On August 6,
1982, the Court of Appeals denied the petition. Perez and Gotera filed the petition for review
on certiorari denominated as G.R. No. 62042 before the Supreme Court. As earlier stated the
petition was denied in a resolution dated January 7,1983. The motion for reconsideration was
denied in another resolution dated March 25, 1983, which also stated that the denial is final.
This decision in G.R. No. 62042, in accordance with the entry of judgment, became final on
March 25, 1983. The petitioners in the instant case G.R. No. 64432--contend that the writs of
possession and demolition issued in the respondent court should now be implemented; that
Civil Case No. 00827 before the Intermediate Appellate Court was filed only to delay the

implementation of the writ; that counsel for the respondent should be held in contempt of court
for engaging in a concerted but futile effort to delay the execution of the writs of possession
and demolition and that petitioners are entitled to damages because of prejudice caused by
the filing of this petition before the Intermediate Appellate Court. On September 26, 1983, this
Court issued a Temporary Restraining Order ' to maintain the status quo, both in the
Intermediate Appellate Court and in the Regional Trial Court of Iloilo. Considering that (l)there
is merit in the instant petition for indeed the issues discussed in G.R. No. 64432 as raised in
Civil Case No. 00827 before the respondent court have already been passed upon in G.R. No.
62042; and (2) the Temporary Restraining Order issued by the Intermediate Appellate Court
was only intended not to render the petition moot and academic pending the Court's
consideration of the issues, the Court RESOLVED to DIRECT the respondent Intermediate
Appellate Court not to take cognizance of issues already resolved by this Court and
accordingly DISMISS the petition in Civil Case No. 00827. Immediate implementation of the
writs of possession and demolition is likewise ordered. (pp. 107-108, Rollo G.R. No. 64432)
On May 9, 1984, the Court issued a resolution denying with finality a motion for
reconsideration of the December 29, 1983 resolution in G.R. No. 64432. On this same date,
another resolution was issued, this time in G.R. No. 62042, referring to the Regional Trial Court
of Iloilo the ex-parte motion of the private respondents (Baranda and Hitalia) for execution of
the judgment in the resolutions dated January 7, 1983 and March 9, 1983. In the meantime,
the then Intermediate Appellate Court issued a resolution dated February 10, 1984, dismissing
Civil Case No. 00827 which covered the same subject matter as the Resolutions above cited
pursuant to our Resolution dated December 29, 1983. The resolution dated December 29,
1983 in G.R. No. 64432 became final on May 20, 1984.
Upon motions of the petitioners, the Regional Trial Court of Iloilo, Branch 23 presided by Judge
Tito G. Gustilo issued the following order:
Submitted are the following motions filed by movants Eduardo S. Baranda and Alfonso Hitalia
through counsel dated August 28, 1984:
(a) Reiterating Motion for Execution of Judgment of Resolutions dated January 7, 1983 and
March 9, 1983 Promulgated by Honorable Supreme Court (First Division) in G.R. No. 62042;
(b) Motion for Execution of Judgment of Resolution dated December 29, 1983 Promulgated by
Honorable Supreme Court (First Division) in G.R. No. 64432;
(c) The Duties of the Register of Deeds are purely ministerial under Act 496, therefore she
must register all orders, judgment, resolutions of this Court and that of Honorable Supreme
Court.
Finding the said motions meritorious and there being no opposition thereto, the same is hereby
GRANTED.
WHEREFORE, Transfer Certificate of Title No. T-25772 is hereby declared null and void and
Transfer Certificate of Title No. T-106098 is hereby declared valid and subsisting title
concerning the ownership of Eduardo S. Baranda and Alfonso Hitalia, all of Sta. Barbara
Cadastre.
The Acting Register of Deeds of Iloilo is further ordered to register the Subdivision Agreement
of Eduardo S. Baranda and Alfonso Hitalia as prayed for." (p. 466, Rollo--G.R. No. 64432)
The above order was set aside on October 8, 1984 upon a motion for reconsideration and
manifestation filed by the Acting Registrar of Deeds of Iloilo, Atty. Helen P. Sornito, on the
ground that there was a pending case before this Court, an Action for Mandamus, Prohibition,
Injunction under G.R. No. 67661 filed by Atty. Eduardo Baranda, against the former which
remained unresolved.
In view of this development, the petitioners filed in G.R. No. 62042 and G.R. No. 64432 exparte motions for issuance of an order directing the Regional Trial Court and Acting Register of
Deeds to execute and implement the judgments of this Court. They prayed that an order be
issued:

1. Ordering both the Regional Trial Court of Iloilo Branch XXIII, under Hon. Judge Tito G.
Gustilo and the acting Register of Deeds Helen P. Sornito to register the Order dated
September 5, 1984 of the lower court;
2. To cancel No.T-25772. Likewise to cancel No.T-106098 and once cancelled to issue new
certificates of title to each of Eduardo S. Baranda and Alfonso Hitalia;
Plus other relief and remedies equitable under the premises. (p. 473, 64432 Rollo)
Acting on these motions, we issued on September 17,1986 a Resolution in G.R. No. 62042
and G.R. No. 64432 granting the motions as prayed for. Acting on another motion of the same
nature filed by the petitioners, we issued another Resolution dated October 8, 1986 referring
the same to the Court Administrator for implementation by the judge below.
In compliance with our resolutions, the Regional Trial Court of Iloilo, Branch 23 presided by
Judge Tito G. Gustilo issued two (2) orders dated November 6,1986 and January 6,1987
respectively, to wit:
ORDER
This is an Ex-parte Motion and Manifestation submitted by the movants through counsel on
October 20, 1986; the Manifestation of Atty. Helen Sornito, Register of Deeds of the City of
Iloilo, and formerly acting register of deeds for the Province of Iloilo dated October 23, 1986
and the Manifestation of Atty. Avito S. Saclauso, Acting Register of Deeds, Province of Iloilo
dated November 5, 1986.
Considering that the motion of movants Atty. Eduardo S. Baranda and Alfonso Hitalia dated
August 12, 1986 seeking the full implementation of the writ of possession was granted by the
Honorable Supreme Court, Second Division per its Resolution dated September 17,1986, the
present motion is hereby GRANTED.
WHEREFORE, the Acting Register of Deeds, Province of Iloilo, is hereby ordered to register
the Order of this Court dated September 5, 1984 as prayed for.
xxx xxx xxx
ORDER
This is a Manifestation and Urgent Petition for the Surrender of Transfer Certificate of Title No.
T-25772 submitted by the petitioners Atty. Eduardo S. Baranda and Alfonso Hitalia on
December 2, 1986, in compliance with the order of this Court dated November 25, 1 986, a
Motion for Extension of Time to File Opposition filed by Maria Provido Gotera through counsel
on December 4, 1986 which was granted by the Court pursuant to its order dated December
15, 1986. Considering that no Opposition was filed within the thirty (30) days period granted by
the Court finding the petition tenable, the same is hereby GRANTED.
WHEREFORE, Maria Provido Gotera is hereby ordered to surrender Transfer Certificate of
Title No. T-25772 to this Court within ten (10) days from the date of this order, after which
period, Transfer Certificate of Title No. T-25772 is hereby declared annulled and the Register
of Deeds of Iloilo is ordered to issue a new Certificate of Title in lieu thereof in the name of
petitioners Atty. Eduardo S. Baranda and Alfonso Hitalia, which certificate shall contain a
memorandum of the annulment of the outstanding duplicate. (pp. 286-287, Rollo 64432)
On February 9, 1987, Atty. Hector Teodosio, the counsel of Gregorio Perez, private respondent
in G.R. No. 64432 and petitioner in G.R. No. 62042, filed a motion for explanation in relation to
the resolution dated September 17, 1986 and manifestation asking for clarification on the
following points:
a. As to the prayer of Atty. Eduardo Baranda for the cancellation of TCT T-25772, should the
same be referred to the Court of Appeals (as mentioned in the Resolution of November 27,
1985) or is it already deemed granted by implication (by virtue of the Resolution dated
September 17, 1986)?
b. Does the Resolution dated September 17, 1986 include not only the implementation of the
writ of possession but also the cancellation of TCT T-25772 and the subdivision of Lot 4517?
(p. 536, Rollo 4432)

Acting on this motion and the other motions filed by the parties, we issued a resolution dated
May 25, 1987 noting all these motions and stating therein:
xxx xxx xxx
Since entry of judgment in G.R. No. 62042 was made on January 7, 1983 and in G.R. No.
64432 on May 30, 1984, and all that remains is the implementation of our resolutions, this
COURT RESOLVED to refer the matters concerning the execution of the decisions to the
Regional Trial Court of Iloilo City for appropriate action and to apply disciplinary sanctions upon
whoever attempts to trifle with the implementation of the resolutions of this Court. No further
motions in these cases will be entertained by this Court. (p. 615, Rollo-64432)
In the meantime, in compliance with the Regional Trial Court's orders dated November 6, 1986
and January 6, 1987, Acting Register of Deeds AvitoSaclauso annotated the order declaring
Transfer Certificate of Title No. T-25772 as null and void, cancelled the same and issued new
certificates of titles numbers T-111560, T-111561 and T-111562 in the name of petitioners
Eduardo S. Baranda and Alfonso Hitalia in lieu of Transfer Certificate of TItle No. T-106098.
However, a notice of lis pendens "on account of or by reason of a separate case (Civil Case
No. 15871) still pending in the Court of Appeals" was carried out and annotated in the new
certificates of titles issued to the petitioners. This was upheld by the trial court after setting
aside its earlier order dated February 12, 1987 ordering the cancellation of lis pendens.
This prompted the petitioners to file another motion in G.R, No. 62042 and G.R. No. 64432 to
order the trial court to reinstate its order dated February 12, 1987 directing the Acting Register
of Deeds to cancel the notice of lis pendens in the new certificates of titles.
In a resolution dated August 17, 1987, we resolved to refer the said motion to the Regional
Trial Court of Iloilo City, Branch 23 for appropriate action.
Since respondent Judge Tito Gustilo of the Regional Trial Court of Iloilo, Branch 23 denied the
petitioners' motion to reinstate the February 12, 1987 order in another order dated September
17, 1987, the petitioners filed this petition for certiorari, prohibition and mandamus with
preliminary injunction to compel the respondent judge to reinstate his order dated February l2,
1987 directing the Acting Register of Deeds to cancel the notice of lis pendens annotated in
the new certificates of titles issued in the name of the petitioners.
The records show that after the Acting Register of Deeds annotated a notice of is pendens on
the new certificates of titles issued in the name of the petitioners, the petitioners filed in the
reconstitution case an urgent ex-parte motion to immediately cancel notice of lis pendens
annotated thereon.
In his order dated February 12, 1987, respondent Judge Gustilo granted the motion and
directed the Acting Register of Deeds of Iloilo to cancel the lis pendens found on Transfer
Certificate of Title Nos. T-106098; T-111560; T-111561 and T-111562.
Respondent Acting Register of Deeds Avito Saclauso filed a motion for reconsideration of the
February 12, 1987 order stating therein:
That the undersigned hereby asks for a reconsideration of the said order based on the second
paragraph of Section 77 of P.D. 1529, to wit:
"At any time after final judgment in favor of the defendant or other disposition of the action
such as to terminate finally all rights of the plaintiff in and to the land and/or buildings involved,
in any case in which a memorandum or notice of Lis Pendens has been registered as provided
in the preceding section, the notice of Lis Pendens shall be deemed cancelled upon the
registration of a certificate of the clerk of court in which the action or proceeding was pending
stating the manner of disposal thereof."
That the lis pendens under Entry No. 427183 was annotated on T-106098, T-111560, T-111561
and T-111562 by virtue of a case docketed as Civil Case No. 15871, now pending with the
Intermediate Court of Appeals, entitled, "Calixta Provido, Ricardo Provido, Sr., Maria Provido
and Perfecto Provido, Plaintiffs, versus Eduardo Baranda and Alfonso Hitalia, Respondents."
That under the above-quoted provisions of P.D. 152, the cancellation of subject Notice of Lis
Pendens can only be made or deemed cancelled upon the registration of the certificate of the

Clerk of Court in which the action or proceeding was pending, stating the manner of disposal
thereof.
Considering that Civil Case No. 1587, upon which the Notice of Lis Pendens was based is still
pending with the Intermediate Court of Appeals, only the Intermediate Court of Appeals and not
this Honorable Court in a mere cadastral proceedings can order the cancellation of the Notice
of Lis Pendens. (pp. 68-69, Rollo)
Adopting these arguments and on the ground that some if not all of the plaintiffs in Civil Case
No. 15871 were not privies to the case affected by the Supreme Court resolutions, respondent
Judge Tito Gustilo set aside his February 12, 1987 order and granted the Acting Register of
Deeds' motion for reconsideration.
The issue hinges on whether or not the pendency of the appeal in Civil Case No. 15871 with
the Court of Appeals prevents the court from cancelling the notice of lis pendens in the
certificates of titles of the petitioners which were earlier declared valid and subsisting by this
Court in G.R. No. 62042 and G.R. No. 64432. A corollary issue is on the nature of the duty of a
Register of Deeds to annotate or annul a notice of lis pendens in a torrens certificate of title.
Civil Case No. 15871 was a complaint to seek recovery of Lot No. 4517 of Sta. Barbara
Cadastre Iloilo, (the same subject matter of G.R. No 62042 and G.R. No. 64432) from
petitioners Baranda and Hitalia filed by Calixta Provido, Ricardo Provido, Maxima Provido and
Perfecta Provido before the Regional Trial Court of Iloilo, Branch 23. At the instance of Atty.
Hector P. Teodosio, the Provides' counsel, a notice of is pendens was annotated on petitioners'
Certificate of Title No. T-106098 covering Lot No. 4517, Sta. Barbara Cadastre.
Acting on a motion to dismiss filed by the petitioners, the court issued an order dated October
24, 1984 dismissing Civil Case No. 15871.
The order was then appealed to the Court of Appeals. This appeal is the reason why
respondent Judge Gustilo recalled the February 12, 1987 order directing the Acting Register of
Deeds to cancel the notice of lis pendens annotated on the certificates of titles of the
petitioners.
This petition is impressed with merit.
Maria Provido Gotera was one of the petitioners in G.R. No. 62042. Although Calixta Provido,
Ricardo Provido, Maxima Provido and Perfecta Provido, the plaintiffs in Civil Case No. 15871
were not impleaded as parties, it is very clear in the petition that Maria Provido was acting on
behalf of the Providos who allegedly are her co-owners in Lot No. 4517, Sta. Barbara Cadastre
as shown by Transfer Certificate of Title No. T-25772 issued in her name and the names of the
plaintiffs in Civil Case No. 15871, among others. (Annex "E" G.R. No. 62042, p. 51, Rollo) In
fact, one of the issues raised by petitioners Maria Provido Gotera and Gregoria Perez in G.R.
No. 62042 was as follows:
xxx xxx xxx
2. Whether or not, in the same reconstitution proceedings, respondent Judge Midpantao L. Adil
had the authority to declare as null and void the transfer certificate of title in the name of
petitioner Maria Provido Gotera and her other co-owners. (p. 3, Rollo; Emphasis supplied)
It thus appears that the plaintiffs in Civil Case No. 15871 were privies to G.R. No. 62042
contrary to the trial court's findings that they were not.
G.R. No. 62042 affirmed the order of the then Court of First Instance of Iloilo in the
reconstitution proceedings declaring TCT No. 25772 in the name of Providos over Lot No.
4517, Sta. Barbara Cadastre null and void for being fraudulently obtained and declaring TCT
No. 106098 over the same parcel Lot No. 4517, Sta. Barbara Cadastre in the name of
petitioners Eduardo Baranda and Alfonso Hitalia valid and subsisting.
The decision in G.R. No. 62042 became final and executory on March 25,1983 long before
Civil Case No. 15871 was filed.
Under these circumstances, it is crystal clear that the Providos, private respondents herein, in
filing Civil Case No. 15871 were trying to delay the full implementation of the final decisions in
G.R. No. 62042 as well as G.R. No. 64432 wherein this Court ordered immediate

implementation of the writs of possession and demolition in the reconstitution proceedings

involving Lot No. 4517, Sta. Barbara Cadastre.
The purpose of a notice of lis pendens is defined in the following manner:
Lis pendens has been conceived to protect the real rights of the party causing the registration
thereof With the lis pendens duly recorded, he could rest secure that he would not lose the
property or any part of it. For, notice of lis pendens serves as a warning to a prospective
purchaser or incumbrancer that the particular property is in litigation; and that he should keep
his hands off the same, unless of course he intends to gamble on the results of the litigation.
(Section 24, Rule 14, RuIes of Court; Jamora v. Duran, et al., 69 Phil. 3, 11; I Martin, Rules of
Court, p. 415, footnote 3, citing cases.) (Natanov. Esteban, 18 SCRA 481, 485-486)
The private respondents are not entitled to this protection. The facts obtaining in this case
necessitate the application of the rule enunciated in the cases of Victoriano v. Rovila (55 Phil.
1000), Municipal Council of Paranaque v. Court of First Instance of Rizal (70 Phil., 363) and
Sarmiento v. Ortiz (10 SCRA 158), to the effect that:
We have once held that while ordinarily a notice of pendency which has been filed in a proper
case, cannot be cancelled while the action is pending and undetermined, the proper court has
the discretionary power to cancel it under peculiar circumstances, as for instance, where the
evidence so far presented by the plaintiff does not bear out the main allegations of his
complaint, and where the continuances of the trial, for which the plaintiff is responsible, are
unnecessarily delaying the determination of the case to the prejudice of the defendant.
(Victoriano v. Rovira, supra; The Municipal Council of Paranaque v. Court of First Instance of
Rizal, supra)
The facts of this case in relation to the earlier cases brought all the way to the Supreme Court
illustrate how the private respondents tried to block but unsuccessfuly the already final
decisions in G.R. No. 62042 and G.R. No. 64432.
Parenthetically, respondent Judge Tito Gustilo abused his discretion in sustaining the
respondent Acting Register of Deeds' stand that, the notice of lis pendens in the certificates of
titles of the petitioners over Lot No. 4571, Barbara Cadastre cannot be cancelled on the
ground of pendency of Civil Case No. 15871 with the Court of Appeals. In upholding the
position of the Acting Register of Deeds based on Section 77 of Presidential Decree No. 1529,
he conveniently forgot the first paragraph thereof which provides:
Cancellation of lis pendens. Before final judgment, a notice of lis pendens may be cancelled
upon Order of the Court after proper showing that the notice is for the purpose of molesting the
adverse party, or that it is not necessary to protect the rights of the party who caused it to be
registered. It may also be cancelled by the Register of Deeds upon verified petition of the party
who caused the registration thereof.
This Court cannot understand how respondent Judge Gustilo could have been misled by the
respondent Acting Register of Deeds on this matter when in fact he was the same Judge who
issued the order dismissing Civil Case No. 15871 prompting the private respondents to appeal
said order dated October 10, 1984 to the Court of Appeals. The records of the main case are
still with the court below but based on the order, it can be safely assumed that the various
pleadings filed by the parties subsequent to the motion to dismiss filed by the petitioners (the
defendants therein) touched on the issue of the validity of TCT No. 25772 in the name of the
Providos over Lot Number 4571, Sta. Barbara Cadastre in the light of the final decisions in
G.R. No. 62042 and G.R. No. 64432.
The next question to be determined is on the nature of the duty of the Register of Deeds to
annotate and/or cancel the notice of lis pendens in a torrens certificate of title.
Section 10, Presidential Decree No. 1529 states that "It shall be the duty of the Register of
Deeds to immediately register an instrument presented for registration dealing with real or
personal property which complies with all the requisites for registration. ... . If the instrument is
not registrable, he shall forthwith deny registration thereof and inform the presentor of such

denial in writing, stating the ground or reasons therefore, and advising him of his right to
appeal by consulta in accordance with Section 117 of this Decree."
Section 117 provides that "When the Register of Deeds is in doubt with regard to the proper
step to be taken or memoranda to be made in pursuance of any deed, mortgage or other
instrument presented to him for registration or where any party in interest does not agree with
the action taken by the Register of Deeds with reference to any such instrument, the question
shall be submitted to the Commission of Land Registration by the Register of Deeds, or by the
party in interest thru the Register of Deeds. ... ."
The elementary rule in statutory construction is that when the words and phrases of the statute
are clear and unequivocal, their meaning must be determined from the language employed
and the statute must be taken to mean exactly what it says. (Aparri v. Court of Appeals, 127
SCRA 231; Insular Bank of Asia and America Employees' Union [IBAAEU] v. Inciong, 132
SCRA 663) The statute concerning the function of the Register of Deeds to register
instruments in a torrens certificate of title is clear and leaves no room for construction.
According to Webster's Third International Dictionary of the English Language the word
shall means "ought to, must, ...obligation used to express a command or exhortation, used in
laws, regulations or directives to express what is mandatory." Hence, the function of a Register
of Deeds with reference to the registration of deeds encumbrances, instruments and the like is
ministerial in nature. The respondent Acting Register of Deeds did not have any legal standing
to file a motion for reconsideration of the respondent Judge's Order directing him to cancel the
notice oflis pendens annotated in the certificates of titles of the petitioners over the subject
parcel of land. In case of doubt as to the proper step to be taken in pursuance of any deed ...
or other instrument presented to him, he should have asked the opinion of the Commissioner
of Land Registration now, the Administrator of the National Land Title and Deeds Registration
Administration in accordance with Section 117 of Presidential Decree No. 1529.
In the ultimate analysis, however, the responsibility for the delays in the full implementation of
this Court's already final resolutions in G.R. No. 62042 and G.R. No. 64432 which includes the
cancellation of the notice of lis pendensannotated in the certificates of titles of the petitioners
over Lot No. 4517 of the Sta. Barbara Cadastre falls on the respondent Judge. He should
never have allowed himself to become part of dilatory tactics, giving as excuse the wrong
impression that Civil Case No. 15871 filed by the private respondents involves another set of
parties claiming Lot No. 4517 under their own Torrens Certificate of Title.
WHEREFORE, the instant petition is GRANTED. The February 12, 1987 order of the Regional
Trial Court of Iloilo, Branch 23 is REINSTATED. All subsequent orders issued by the trial court
which annulled the February 12, 1987 order are SET ASIDE. Costs against the private
respondents.

21) RICARDO CHENG, petitioner, vs. RAMON B. GENATO and ERNESTO R. DA JOSE &
SOCORRO B. DA JOSE, respondents.
DECISION
MARTINEZ, J.:
This petition for review on certiorari seeks to annul and set aside the Decision of the Court of
Appeals (CA)[1] dated July 7, 1997 in CA-G.R. No. CV No. 44706 entitled Ricardo Cheng,
plaintiff-appellee vs. Ramon B. Genato, defendant-appellant, Ernesto R. Da Jose & Socorro B.
Da Jose, Intervenors-Appellants which reversed the ruling of the Regional Trial Court, Branch
96 of Quezon City dated January 18, 1994. The dispositive portion of the CA Decision reads:
WHEREFORE, based on the foregoing, appealed decision is hereby REVERSED and SET
ASIDE and judgment is rendered ordering;
1. The dismissal of the complaint;
2. The cancellation of the annotations of the defendant-appellants Affidavit to Annul Contract to
Sell and plaintiff-appellees Notice of Adverse Claim in the subject TCTs, namely, TCT No. T76.196 (M) and TCT No. T-76.197 (M);
3. Payment by the intervenors-appellants of the remaining balance of the purchase price
pursuant to their agreement with the defendant-appellant to suspend encashment of the three
post-dated checks issued since 1989.
4. Ordering the execution by the defendant-appellant Genato of the Deed of Absolute Sale
over the subject two lots covered by TCT No. T-76.196 (M) and TCT No. T-76.197 (M) in favor
of intervenors-appellants Spouses Da Jose;
5. The return by defendant-appellant Genato of P50,000.00 paid to him by the plaintiff-appellee
Cheng, and

6. Payment by plaintiff-appellee Cheng of moral damages to herein intervenors-appellants Da

Jose of P100,000.00, exemplary damages of P50,000.00, attorneys fees of P50,000.00, and
costs of suit; and to defendant-appellant, of P100,000.00 in exemplary damages, P50,000.00
in attorneys fees. The amounts payable to the defendant-appellant may be compensated by
plaintiff-appellee with the amount ordered under the immediately foregoing paragraph which
defendant-appellant has to pay the plaintiff-appellee.
SO ORDERED.[2]
The antecedents of the case are as follows:
Respondent Ramon B. Genato(Genato) is the owner of two parcels of land located at Paradise
Farms, San Jose Del Monte, Bulacan covered by TCT No. T-76.196 (M)[3] and TCT No. T76.197 (M)[4] with an aggregate area of 35,821 square meters, more or less.
On September 6, 1989, respondent Genato entered into an agreement with respondentspouses Ernesto R. Da Jose and Socorro B. Da Jose (Da Jose spouses) over the abovementioned two parcels of land. The agreement culminated in the execution of a contract to sell
for which the purchase price was P80.00 per square meter. The contract was in a public
instrument and was duly annotated at the back of the two certificates of title on the same day.
Clauses 1 and 3 thereof provide:
'1. That the purchase price shall be EIGHTY (P80.00) PESOS, Philippine Currency per square
meter, of which the amount of FIFTY THOUSAND (P50,000.00) Pesos shall be paid by the
VENDEE to the VENDOR as partial down payment at the time of execution of this Contract to
Sell.
xxx xxx xxx
'3. That the VENDEE, thirty (30) DAYS after the execution of this contract, and only after
having satisfactorily verified and confirmed the truth and authenticity of documents, and that no
restrictions, limitations, and developments imposed on and/or affecting the property subject of
this contract shall be detrimental to his interest, the VENDEE shall pay to the VENDOR, NINE
HUNDRED FIFTY THOUSAND (P950,000.00) PESOS, Philippine Currency, representing the
full payment of the agreed Down Payment, after which complete possession of the property
shall be given to the VENDEE to enable him to prepare the premises and any development
therein.[5]
On October 4, 1989, the Da Jose spouses, not having finished verifying the titles mentioned in
clause 3 as aforequoted, asked for and was granted by respondent Genato an extension of
another 30 days or until November 5, 1989. However, according to Genato, the extension was
granted on condition that a new set of documents is made seven (7) days from October 4,
1989.[6] This was denied by the Da Jose spouses.
Pending the effectivity of the aforesaid extension period, and without due notice to the Da Jose
spouses, Genato executed an Affidavit to Annul the Contract to Sell,[7] on October 13, 1989.
Moreover, no annotation of the said affidavit at the back of his titles was made right away. The
affidavit contained, inter alia, the following paragraphs;
xxx xxx xxx

That it was agreed between the parties that the agreed downpayment of P950,000.00 shall be
paid thirty (30) days after the execution of the Contract, that is on or before October 6, 1989;
The supposed VENDEES failed to pay the said full downpayment even up to this writing, a
breach of contract.
That this affidavit is being executed to Annul the aforesaid Contract to Sell for the vendee
having committed a breach of contract for not having complied with the obligation as provided
in the Contract to Sell;[8]
On October 24, 1989, herein petitioner Ricardo Cheng (Cheng) went to Genatos residence
and expressed interest in buying the subject properties. On that occasion, Genato showed to
Ricardo Cheng copies of his transfer certificates of title and the annotations at the back thereof
of his contract to sell with the Da Jose spouses. Genato also showed him the aforementioned
Affidavit to Annul the Contract to Sell which has not been annotated at the back of the titles.
Despite these, Cheng went ahead and issued a check for P50,000.00 upon the assurance by
Genato that the previous contract with the Da Jose spouses will be annulled for which Genato
issued a handwritten receipt (Exh. D), written in this wise.
10/24/89
Received from Ricardo Cheng
the Sum of Fifty Thousand Only (P50,000 -)
as partial for T-76196 (M)
T-76197 (M) area 35,821 Sq.m.
Paradise Farm, Gaya-Gaya, San Jose Del Monte
P70/m2 Bulacan
Plus C.G.T. etc
(SGD) Ramon B. Genato
Check # 470393
10/24/89[9]
On October 25, 1989, Genato deposited Chengs check. On the same day, Cheng called up
Genato reminding him to register the affidavit to annul the contract to sell.[10]
The following day, or on October 26, 1989, acting on Chengs request, Genato caused the
registration of the Affidavit to Annul the Contract to Sell in the Registry of Deeds, Meycauayan,
Bulacan as primary entry No. 262702.[11]
While the Da Jose spouses were at the Office of the Registry of Deeds of Meycauaya, Bulacan
on October 27, 1989, they met Genato by coincidence. It was only then that the Da Jose
spouses discovered about the affidavit to annul their contract. The latter were shocked at the
disclosure and protested against the rescission of their contract. After being reminded that he
(Genato) had given them (Da Jose spouses) an additional 30-day period to finish their
verification of his titles, that the period was still in effect, and that they were willing and able to
pay the balance of the agreed down payment, later on in the day, Genato decided to continue
the Contract he had with them. The agreement to continue with their contract was formalized in
a conforme letter dated October 27, 1989.

Thereafter, Ramon Genato advised Ricardo Cheng of his decision to continue his contract with
the Da Jose spouses and the return of Chengs P50,000.00 check. Consequently, on October
30, 1989, Chengs lawyer sent a letter[12] to Genato demanding compliance with their
agreement to sell the property to him stating that the contract to sell between him and Genato
was already perfected and threatening legal action.

subject properties. Thus, on January 18, 1994 the trial court rendered its decision the decretal
portion of which reads:
WHEREFORE, judgment is hereby rendered:

On November 2, 1989, Genato sent a letter[13] to Cheng (Exh. 6) enclosing a BPI Cashiers
Check for P50,000.00 and expressed regret for his inability to consummate his transaction with
him. After having received the letter of Genato on November 4, 1989, Cheng, however,
returned the said check to the former via RCPI telegram[14] dated November 6, 1989,
reiterating that our contract to sell your property had already been perfected.

1. Declaring the contract to sell dated September 6, 1989 executed between defendant Ramon
Genato, as vendor, and intervenors Spouses Ernesto and Socorro Da Jose, as vendees,
resolved and rescinded in accordance with Art. 1191, Civil Code, by virtue of defendants
affidavit to annul contract to sell dated October 13, 1989 and as the consequence of
intervenors failure to execute within seven (7) days from October 4, 1989 another contract to
sell pursuant to their mutual agreement with the defendant;

Meanwhile, also on November 2, 1989, Cheng executed an affidavit of adverse claim[15] and
had it annotated on the subject TCTs.

2. Ordering defendant to return to the intervenors the sum of P1,000,000.00, plus interest at
the legal rate from November 2, 1989 until full payment;

On the same day, consistent with the decision of Genato and the Da Jose spouses to continue
with their Contract to Sell of September 6, 1989, the Da Jose spouses paid Genato the
complete down payment of P950,000.00 and delivered to him three (3) postdated checks (all
dated May 6, 1990, the stipulated due date) in the total amount of P1,865,680.00 to cover full
payment of the balance of the agreed purchase price. However, due to the filing of the
pendency of this case, the three (3) postdated checks have not been encashed.

3. Directing defendant to return to the intervenors the three (3) postdated checks immediately
upon finality of this judgment;

On December 8, 1989, Cheng instituted a complaint[16] for specific performance to compel

Genato to execute a deed of sale to him of the subject properties plus damages and prayer for
preliminary attachment. In his complaint, Cheng averred that the P50,000.00 check he gave
was a partial payment to the total agreed purchase price of the subject properties and
considered as an earnest money for which Genato acceded. Thus, their contract was already
perfected.

4. Commanding defendant to execute with and in favor of the plaintiff Ricardo Cheng, as
vendee, a deed of conveyance and sale of the real properties described and covered in
Transfer Certificates of Title No. T-76-196 (M) and T-76.197 (M) of the Registry of Deeds of
Bulacan, Meycauyan Branch, at the rate of P70.00/sqaure meter, less the amount of
P50,000.00 already paid to defendant, which is considered as part of the purchase price, with
the plaintiff being liable for payment of the capital gains taxes and other expenses of the
transfer pursuant to the agreement to sell dated October 24, 1989; and
5. Ordering defendant to pay the plaintiff and the intervenors as follows:
a/ P50,000.00, as nominal damages, to plaintiff;

In Answer[17] thereto, Genato alleged that the agreement was only a simple receipt of an
option-bid deposit, and never stated that it was a partial payment, nor is it an earnest money
and that it was subject to the condition that the prior contract with the Da Jose spouses be first
cancelled.
The Da Jose spouses, in their Answer in Intervention,[18] asserted that they have a superior
right to the property as first buyers. They alleged that the unilateral cancellation of the Contract
to Sell was without effect and void. They also cited Chengs bad faith as a buyer being duly
informed by Genato of the existing annotated Contract to Sell on the titles.

b/ P50,000.00, as nominal damages, to intervenors;

c/ P20,000.00, as and for attorneys fees, to plaintiff;
d/ P20,000.00, as and for attorneys fees, to intervenors; and
e/ Cost of the suit.
xxx xxx xxx

After trial on the merits, the lower court ruled that the receipt issued by Genato to Cheng
unerringly meant a sale and not just a priority or an option to buy. It cannot be true that the
transaction was subjected to some condition or reservation, like the priority in favor of the Da
Jose spouses as first buyer because, if it were otherwise, the receipt would have provided
such material condition or reservation, especially as it was Genato himself who had made the
receipt in his own hand. It also opined that there was a valid rescission of the Contract to Sell
by virtue of the Affidavit to Annul the Contract to Sell. Time was of the essence in the execution
of the agreement between Genato and Cheng, under this circumstance demand, extrajudicial
or judicial, is not necessary. It falls under the exception to the rule provided in Article 1169[19]
of the Civil Code. The right of Genato to unilaterally rescind the contract is said to be under
Article 1191[20] of the Civil Code. Additionally, after reference was made to the substance of
the agreement between Genato and the Da Jose spouses, the lower court also concluded that
Cheng should be preferred over the intervenors-Da Jose spouses in the purchase of the

Not satisfied with the aforesaid decision, herein respondents Ramon Genato and Da Jose
spouses appealed to the court a quo which reversed such judgment and ruled that the prior
contract to sell in favor of the Da Jose spouses was not validly rescinded, that the subsequent
contract to sell between Genato and Cheng, embodied in the handwritten receipt, was without
force and effect due to the failure to rescind the prior contract; and that Cheng should pay
damages to the respondents herein being found to be in bad faith.
Hence this petition.[21]
This petition for review, assails the Court of Appeals Decision on the following grounds: (1) that
the Da Jose spouses Contract to Sell has been validly rescinded or resolved; (2) that Ricardo
Chengs own contract with Genato was not just a contract to sell but one of conditional contract

of sale which gave him better rights, thus precluding the application of the rule on double sales
under Article 1544, Civil Code; and (3) that, in any case, it was error to hold him liable for
damages.

made known to the other.[28] For such act is always provisional. It is always subject to scrutiny
and review by the courts in case the alleged defaulter brings the matter to the proper courts. In
University of the Philippines vs. De Los Angeles,[29] this Court stressed and we quote:

The petition must be denied for failure to show that the Court of Appeals committed a
reversible error which would warrant a contrary ruling.

In other words, the party who deems the contract violated may consider it resolved or
rescinded, and act accordingly, without previous court action, but it proceeds at its own risk.
For it is only the final judgment of the corresponding court that will conclusively and finally
settle whether the action taken was or was not correct in law. But the law definitely does not
require that the contracting party who believes itself injured must first file suit and wait for a
judgment before taking extajudicial steps to protect its interest. Otherwise, the party injured by
the others breach will have to passively sit and watch its damages accumulate during the
pendency of the suit until the final judgment of rescission is rendered when the law itself
requires that he should exercise due diligence to minimize its own damages (Civil Code, Article
2203).

No reversible error can be ascribed to the ruling of the Court of Appeals that there was no valid
and effective rescission of resolution of the Da Jose spouses Contract to Sell, contrary to
petitioners contentions and the trial courts erroneous ruling.
In a Contract to Sell, the payment of the purchase price is a positive suspensive condition, the
failure of which is not a breach, casual or serious, but a situation that prevents the obligation of
the vendor to convey title from acquiring an obligatory force.[22] It is one where the happening
of the event gives rise to an obligation. Thus, for its non-fulfillment there will be no contract to
speak of, the obligor having failed to perform the suspensive condition which enforces a
juridical relation. In fact with this circumstance, there can be no rescission of an obligation that
is still non-existent, the suspensive condition not having occurred as yet.[23] Emphasis should
be made that the breach contemplated in Article 1191 of the New Civil Code is the obligors
failure to comply with an obligation already extant, not a failure of a condition to render binding
that obligation.[24]
Obviously, the foregoing jurisprudence cannot be made to apply to the situation in the instant
case because no default can be ascribed to the Da Jose spouses since the 30-day extension
period has not yet expired. The Da Jose spouses contention that no further condition was
agreed when they were granted the 30-days extension period from October 7, 1989 in
connection with clause 3 of their contract to sell dated September 6, 1989 should be upheld for
the following reason, to wit; firstly, If this were not true, Genato could not have been persuaded
to continue his contract with them and later on agree to accept the full settlement of the
purchase price knowing fully well that he himself imposed such sine qua non condition in order
for the extension to be valid; secondly, Genato could have immediately annotated his affidavit
to annul the contract to sell on his title when it was executed on October 13, 1989 and not only
on October 26, 1989 after Cheng reminded him of the annotation; thirdly, Genato could have
sent at least a notice of such fact, there being no stipulation authorizing him for automatic
rescission, so as to finally clear the encumbrance of his titles and make it available to other
would be buyers. It likewise settles the holding of the trial court that Genato needed money
urgently.
Even assuming in gratia argumenti that the Da Jose spouses defaulted, as claimed by Genato,
in their Contract to Sell, the execution by Genato of the affidavit to annul the contract is not
even called for. For with or without the aforesaid affidavit their non-payment to complete the full
downpayment of the purchase price ipso facto avoids their contract to sell, it being subjected to
a suspensive condition. When a contract is subject to a suspensive condition, its birth or
effectivity can take place only if and when the event which constitutes the condition happens or
is fulfilled.[25] If the suspensive condition does not take place, the parties would stand as if the
conditional obligation had never existed.[26]
Nevertheless, this being so Genato is not relieved from the giving of a notice, verbal or written,
to the Da Jose spouses for decision to rescind their contract. In many cases,[27] even though
we upheld the validity of a stipulation in a contract to sell authorizing automatic rescission for a
violation of its terms and conditions, at least a written notice must be sent to the defaulter
informing him of the same. The act of a party in treating a contract as cancelled should be

This rule validates, both in equity and justice, contracts such as the one at bat, in order to
avoid and prevent the defaulting party from assuming the offer as still in effect due to the
obligees tolerance for such non-fulfillment. Resultantly, litigations of this sort shall be prevented
and the relations among would-be parties may be preserved. Thus, Ricardo Chengs
contention that the Contract to Sell between Genato and the Da Jose spouses was rescinded
or resolved due to Genatos unilateral rescission finds no support in this case.
Anent the issue on the nature of the agreement between Cheng and Genato, the records of
this case are replete with admissions[30] that Cheng believed it to be one of a Contract to Sell
and not one of Conditionl Contract of Sale which he, in a transparent turn-around, now pleads
in this Petition. This ambivalent stance of Cheng is even noted by the appellate court, thus:
At the outset, this Court notes that plaintiff-appellee was inconsistent in characterizing the
contract he allegedly entered into. In his complaint,[31] Cheng alleged that the P50,000.00
down payment was earnest money. And next, his testimony[32] was offered to prove that the
transaction between him and Genato on October 24, 1989 was actually a perfected contract to
sell.[33]
Settled is the rule that an issue which was not raised during the trial in the court below cannot
be raised for the first time on appeal.[34] Issues of fact and arguments not adequately brought
to the attention of the trial court need not be and ordinarily will not be considered by a
reviewing court as they cannot be raised for the first time on appeal.[35] In fact, both courts
below correctly held that the receipt which was the result of their agreement, is a contract to
sell. This was, in fact Chengs contention in his pleadings before said courts. This patent twist
only operates against Chengs posture which is indicative of the weakness of his claim.
But even if we are to assume that the receipt, Exh. D, is to be treated as a conditional contract
of sale, it did not acquire any obligatory force since it was subject to suspensive condition that
the earlier contract to sell between Genato and the Da Jose spouses should first be cancelled
or rescinded a condition never met, as Genato, to his credit, upon realizing his error, redeemed
himself by respecting and maintaining his earlier contract with the Da Jose spouses. In fact a
careful reading of the receipt, Exh. D, alone would not even show that a conditional contract of
sale has been entered by Genato and Cheng. When the requisites of a valid contract of sale
are lacking in said receipt, therefore the sale is neither valid or enforceable.[36]
To support his now new theory that the transaction was a conditional contract of sale, petitioner
invokes the case of Coronel vs. Court of Appeals[37] as the law that should govern their

Petition. We do not agree. Apparently, the factual milieu in Coronel is not on all fours with those
in the case at bar.
In Coronel, this Court found that the petitioners therein clearly intended to transfer title to the
buyer which petitioner themselves admitted in their pleading. The agreement of the parties
therein was definitively outline in the Receipt of Down Payment both as to property, the
purchase price, the delivery of the seller of the property and the manner of the transfer of title
subject to the specific condition that upon the transfer in their names of the subject property
the Coronels will execute the deed of absolute sale.
Whereas, in the instant case, even by a careful perusal of the receipt, Exh. D, alone such kind
of circumstances cannot be ascertained without however resorting to the exceptions of the
Rule on Parol Evidence.
To our mind, the trial court and the appellate court correctly held that the agreement between
Genato and Cheng is a contract to sell, which was, in fact, petitioner connection in his
pleadings before the said courts. Consequently, both to mind, which read:
Article 1544. If the same thing should have been sold to different vendees, the ownership shall
be transferred to the person who may have first taken possession thereof in good faith, if it
should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in
good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was
first in possession; and in the absence thereof, to the person who presents the oldest title,
provided there is good faith
However, a meticulous reading of the aforequoted provision shows that said law is not apropos
to the instant case. This provision connotes that the following circumstances must concur:
(a) The two (or more) sales transactions in the issue must pertain to exactly the same subject
matter, and must be valid sales transactions.
(b) The two (or more) buyers at odds over the rightful ownership of the subject matter must
each represent conflicting interests; and
(c) The two (or more) buyers at odds over the rightful ownership of the subject matter must
each have bought from the very same seller.
These situations obviously are lacking in a contract to sell for neither a transfer of ownership
nor a sales transaction has been consummated. The contract to be binding upon the obligee or
the vendor depends upon the fulfillment or non-fulfillment of an event.
Notwithstanding this contrary finding with the appellate court, we are of the view that the
governing principle of Article 1544, Civil Code, should apply in this situation. Jurisprudence[38]
teaches us that the governing principle is PRIMUS TEMPORE, PORTIOR JURE (first in time,
stronger in right). For not only was the contract between herein respondents first in time; it was
also registered long before petitioners intrusion as a second buyer. This principle only applies
when the special rules provided in the aforcited article of Civil Code do not apply or fit the
specific circumstances mandated under said law or by jurisprudence interpreting the article.

The rule exacted by Article 1544 of the Civil Code for the second buyer to be able to displace
the first buyer are:
(1) that the second buyer must show that he acted in good faith (i.e. in ignorance of the first
sale and of the first buyers rights) from the time of acquisition until title is transferred to him by
registration or failing registration, by delivery of possession;[39]
(2) the second buyer must show continuing good faith and innocence or lack of knowledge of
the first sale until his contract ripens into full ownership through prior registration as provided
by law.[40]
Thus, in the case at bar, the knowledge gained by the Da Jose spouses, as first buyers, of the
new agreement between Cheng and Genato will not defeat their rights as first buyers except
where Cheng, as second buyer, registers or annotates his transaction or agreement on the title
of the subject properties in good faith ahead of the Da Jose spouses. Moreover, although the
Da Jose spouses, as first buyers, knew of the second transaction it will not bar them from
availing of their rights granted by law, among them, to register first their agreement as against
the second buyer.
In contrast, knowledge gained by Cheng of the first transaction between the Da Jose spouses
and Genato defeats his rights even if he is first to register the second transaction, since such
knowledge taints his prior registration with bad faith.
Registration, as defined by Soler and Castillo, means any entry made in the books of the
registry, including both registration in its ordinary and strict sense and cancellation, annotation,
and even marginal notes.[41] In its strict acceptation, it is the entry made in the registry which
records solemnly and permanently the right of ownership and other real rights.[42] We have
ruled[43] before that when a Deed of Sale is inscribed in the registry of property on the original
document itself, what was done with respect to said entries or annotations and marginal notes
amounted to a registration of the sale. In this light, we see no reason why we should not give
priority in right the annotation made by the Da Jose spouses with respect to their Contract to
Sell dated September 6, 1989.
Moreover, registration alone in such cases without good faith is not sufficient. Good faith must
concur with registration for such prior right to be enforceable. In the instant case, the
annotation made by the Da Jose spouses on the titles of Genato of their Contract to Sell more
than satisfies this requirement. Whereas in the case of Genatos agreement with Cheng such is
unavailing. For even before the receipt, Exh. D, was issued to Cheng information of such preexisting agreement has been brought to his knowledge which did not deter him from pursuing
his agreement with Genato. We give credence to the factual finding of the appellate court that
Cheng himself admitted that it was he who sought Genato in order to inquire about the
property and offered to buy the same.[44] And since Cheng was fully aware, or could have
been if he had chosen to inquire, of the rights of the Da Jose spouses under the Contract to
Sell duly annotated on the transfer certificates of titles of Genato, it now becomes unnecessary
to further elaborate in detail the fact that he is indeed in bad faith in entering into such
agreement. As we have held in Leung Yee vs. F.L. Strong Machinery Co.:[45]
One who purchases real estate with knowledge of a defect x x x of title in his vendor cannot
claim that he has acquired title thereto in good faith as against x x x x an interest therein; and
the same rule must be applied to one who has knowledge of facts which should have put him
upon such inquiry and investigation as might be necessary to acquaint him with the defects in
the title of his vendor. A purchaser cannot close his eyes to facts which should put a
reasonable man upon his guard, and then claim that he acted in good faith under the belief
that there was no defect in the title of the vendor. His mere refusal to believe that such defect
exists, or his willful closing of his eyes to the possibility of the existence of a defect in his
vendors title, will not make him an innocent purchaser for value, if it afterwards develops that
the title was in fact defective, and it appears that he had such notice of the defect as would
have led to its discovery had he acted with that measure of precaution which may reasonably

be required of a prudent man in a like situation. Good faith, or lack of it, is in its last analysis a
question of intention; but in ascertaining the intention by which one is actuated on a given
occasion, we are necessarily controlled by the evidence as to the conduct and outward acts by
which alone the inward motive may, with safety, be determined. So it is that the honesty of
intention, the honest lawful intent, which constitutes good faith implies a freedom from
knowledge and circumstances which ought to put a person on inquiry, and so it is that proof of
such knowledge overcomes the presumption of good faith in which the courts always indulge
in the absence of the proof to the contrary. Good faith, or the want of it, is not a visible, tangible
fact that can be seen or touched, but rather a state or condition of mind which can only be
judge of by actual or fancied tokens or signs. (Wilder vs. Gilman, 55 Vt. 504, 505; Cf.
Cardenas vs. Miller, 108 Cal., 250; Breaux-Renoudet, Cypress Lumber Co. vs. Shadel, 52 La.
Ann., 2094-2098; Pinkerton Bros. Co. vs. Bromely, 119 Mich., 8, 10, 17.) Emphasis ours
Damages were awarded by the appellate court on the basis of its finding that petitioner was in
bad faith when he filed the suit for specific performance knowing fully well that his agreement
with Genato did not push through.[46] Such bad faith, coupled with his wrongful interference
with the contractual relations between Genato and the Da Jose spouses, which culminated in
his filing of the present suit and thereby creating what the counsel for the respondents
describes as a prolonged and economically unhealthy gridlock[47] on both the land itself and
the respondents rights provides ample basis for the damages awarded. Based on these
overwhelming evidence of bad faith on the part of herein petitioner Ricardo Cheng, we find that
the award of damages made by the appellate court is in order.
WHEREFORE, premises considered, the instant petition for review is DENIED and the
assailed decision is hereby AFFIRMED EN TOTO.
22) G.R. No. L-20075

November 27, 1968

DANAO COAL MINING SYNDICATE, LTD., applicant, SOUTHWESTERN UNIVERSITY,

petitioner-appellee,
vs.
CENON LAURENTE, oppositor-appellant.
Deen Law Offices for petitioner-appellee.
Ramon Duterte for oppositor-appellant.
REYES, J.B.L., J.:
Forwarded to us for review by the Court of Appeals1 is this appeal from two orders issued by
the Court of First Instance of Cebu in the latter's capacity as land registration court.2 The first
was a grant to a buyer's ex parte petition praying, inter alia, for cancellation of annotation of
incumbrances on the transfer certificate of title covering a parcel of land it purchased from the
heirs of registered owner. The second was a denial of a motion for reconsideration of the first
order which was filed by a third person whose interest, purportedly, might have been
prejudiced by the cancellation.
The transfer certificate of title (TCT No. 7567) in question covered a parcel of land situated in
Camansi, Danao, Cebu. The same was issued in 1928 by the Register of Deeds of Cebu in
favor of H. M. H. Nemazee, the proprietor of the original applicant, Danao Coal Mining
Syndicate, Ltd. On the face thereof were annotated the following incumbrances:
(a) the condition that the applicant shall be required to produce from the mining claims referred
to a minimum amount of coal equal to an average daily production of two hundred tons of

twenty hundred and forty English pounds for every day exclusive of Sundays and holidays, and
in the event of the failure of the said Coal Mining Syndicate to produce such amount of coal, to
pay to the Government of the Philippine Islands a royalty at the rate of twenty centavos per ton
upon each and every ton of the deficiency between the amount actually produced, and the
minimum amount herein specified, (b) the use and occupancy of the surface of the said parcel
of land in favor of Filomeno del Mar, as administrator of Roque del Mar, deceased; Lazaro
Osmea, as administrator of Tomas Osmea, deceased; H. B. Walker, as administrator of
Candelario Cuizon, deceased; Juan Medio, Eleno Hungug, Bernardo Cal, Faustino Batucan,
Perfecto Lavador, Agustin Tito and Salvador Gonzalez in accordance with the agreement
dated at Cebu, November 22, 1913.
In a quitclaim deed, dated 14 January 1960, the heirs of Nemazee transferred and quitclaimed
in favor of Southwestern University their rights, title, interest and participation in, including their
mining and leasehold rights over, said land.
Subsequently, Southwestern University petitioned the lower court to order (1) the cancellation
of the aforequoted annotation of incumbrances on the ground that the condition and
agreement constituting the same were cancelled and rendered inoperative by the outbreak of
World War II as well as by the death of all the listed beneficiaries thereof; (2) the registration of
the quitclaim deed; and (3) the cancellation of TCT No. 7567 itself, and issuance of a new
certificate of title in its name. The petition was immediately granted,3 with the lower court
dispensing with the usual notice to interested parties. A new certificate of title (TCT No. RT2164) was thereafter issued in favor of Southwestern University.
On 12 September 1960, one Cenon Laurente moved the lower court to reconsider its order of
cancellation, specifically of the second portion of the annotation of incumbrances in question.
He alleged that Southwestern University had filed an ejectment suit4 before another branch of
the same court against him and several other occupants of the land covered by TCT No. 7567,
over which land, he claimed, he might possibly have an interest as a purchaser of a certain
parcel of land situated also in Camansi, Danao, Cebu, from Filomeno del Mar, one of the
persons in whose favor "the use of occupancy of the surface of the ... land" covered by said
TCT No. 7567 was reserved. Laurente thus argued that the cancellation of the annotation of
the incumbrance in favor of Filomeno del Mar and others should not have been ordered
without giving notice, at least through publication, to the parties who, like him, being a
successor-in-interest of said Filomeno del Mar, might thereby be adversely affected. Laurente's
alleged interest was, however, never registered.
The motion for reconsideration was denied, as previously intimated. Reasoned the lower court:
The Court is in accord with his contention (that if there should be notice, it should be limited to
the parties annotated in the certificate of title itself, and should not be extended to subsequent
parties who, even granting that they acquired the interests of these persons annotated in the
certificate of title, failed to have their rights accordingly annotated in said certificate of title) of
petitioner Southwestern University, and maintains that inasmuch as the law specifically
provides notice to parties in interest, such notice if any, should be limited to the parties listed or
annotated on the certificate of title. Hence, if such parties are already dead, as had been
alleged and substantiated by petitioner Southwestern University, then notice to said parties
would be superfluous or notice would not be necessary. The Court acting within its limited
jurisdiction as a Court of Land Registration, can only act on what appears on the face of the
certificate of title, and cannot go beyond what appears therein as movant Cenon Laurente
would now want this Court to believe. Notice by Publication is not necessary in connection with
the this petition which has been duly filed in accordance with Section 112 of Act 496.

Granting that the use and occupancy which was annotated in the certificate of title is a real
right which could be transferred or disposed of by the person named in the certificate of title to
a third person (in this case Cenon Laurente), the latter should have taken the precaution of
having his right annotated on said (certificate of title). His failure to do so is therefore fatal, in
the sense that this Court cannot consider him as a party in interest who is entitled to notice
before the petition for cancellation of incumbrance could be acted upon ...5
We find no error in the order appealed from.
Cancellation of registered interests that have terminated and ceased may be ordered by the
land registration court under, and in conformity with, section 112 of Act No. 496, otherwise
known as the Land Registration Act. The new owner, Southwestern University, of the land
herein involved took the right step by petitioning the court under said section to have the
registered interests the deceased persons' rights of use and occupancy of the surface of
said land ordered cancelled on the ground that the same had terminated and ceased.
Notice was no longer necessary for the court to acquire jurisdiction over the petition insofar as
the second portion of the annotation of incumbrances was concerned. With the death of all the
registered adverse claimants thereof, there were no more parties in interest to be notified.
Appelant Laurente was not and can not now be considered a party in interest entitled to notice.
He was, as he is now, a stranger representing no adverse claim as to render the petition for
cancellation controversial and, thereby, divest the lower court of its jurisdiction. For Laurente's
claim avers that the cancellation of the right of the persons recorded as entitled to use and
occupancy of the surface of the land could affect him adversely because the interest acquired
by him from Filomeno del Mar "might be included in that which is referred to in the
aforementioned annotation." (Record on Appeal, page 43) This is too vague and unsubstantial
to give him standing to claim right to notice or to contest the order of cancellation. Before a
claimant can be considered as possessing a genuine adverse interest that would deprive the
Registration Court of jurisdiction to proceed under section 112 of Act 496 in the absence of
notice to him, there must be a showing of the prima facie truth and validity of such adverse
interest. Laurente has failed to make such a showing. His motion merely speaks of a possibility
of being prejudiced. He has not produced and deed of conveyance from Filomeno del Mar, or
secondary evidence thereof. A mere verbal agreement will not do here; there must be a public
instrument in order to affect a stranger (such as the holder of the certificate of title or his
successors in interest). For Article 1280, No. 1, of the Civil Code of 1889 (in force in 1920
when Laurente claims to have acquired title) prescribes:

What is worse is that Laurente allowed more than 20 years to elapse without asserting the
alleged conveyance in his favor, when a period of 10 years sufficed under Act 190 (then in
force) to bar any claim to or over real property. Nor has Laurente adequately explained such
laches on his part..
He avers that he could not cause the recording of the conveyance in his favor because the
registered owner resided in Hongkong. This is no excuse, for the claimant could have asked
the proper court to have the owner summoned by publication. Laurente also pleads that the
records of the Cebu Register of Deeds were destroyed in the last war. But the war only broke
out in 1941, and the enemy occupied Cebu in 1942, while Laurente's vendor, Filomeno delo
Mar, ceased to be administrator of the Estate of Roque del Mar as far back as 1920, when the
proceedings were closed (Record on Appeal, page 61). Thus, Laurente unaccountably
permitted 21 years to elapse without attempting to record or enforce the alleged conveyance in
his favor.
All the foregoing circumstances cast a dense pall of doubt over the genuineness and validity of
Laurente's adverse claim, and fully justify its rejection by the lower court.
WHEREFORE, the orders appealed from are sustained and affirmed. Costs against appellant
Cenon Laurente in all instances.

23) G.R. No. L-79787

June 29, 1989

APOLONIO EGAO AND BEATRIZ EGAO, petitioners,

vs.
THE HONORABLE COURT OF APPEALS (NINTH DIVISION), SEVERO DIGNOS AND
SEVERO BONTILAO, respondents.
Eliud J. Pailagao for petitioners.
Guerrero A. Adaza for private respondents.

The following must be reduced to writing in a public instrument:

1. Acts or contracts whose object is the creation, transmission, modification or extinction of
rights which affect immovable property. (Emphasis supplied)
And to affect registered land, such as is covered by the Certificates of Title of appellee
Southwestern University and its predecessor in interest (TCT No. 7567 and RT-2164), the
public document above referred to must be recorded and annotated in the certificate, as
pointed out in the appealed order; and admittedly, there is no record of any deed in favor of
Laurente. It is elementary that, under the Torrens system, registration is the operative act that
binds the parties thereto, without affecting the rights of strangers to such contract (Act 496,
section 51) unless they have actual knowledge thereof,6 which is not alleged here.

PADILLA, J.:
This is a land dispute which culminated in the filing by private respondents Severo Dignos and
Severo Bontilao of a verified complaint for Quieting of Title and/or Recovery of Possession and
Ownership before the RTC of Manolo Fortich, Bukidnon, * against petitioners Apolonio and
Beatriz Egao.
Private respondents' complaint alleged that they are the legitimate owners and possessors of
two (2) parcels of land situated at Lonocan, Manolo Fortich, Bukidnon, per deed of absolute
sale dated 21 December 1979 which, among others, recited thus:

WHEREAS, the abovementioned Parcels of land Lot No. 662 is covered by Original Certificate
of Title No. P-3559 Free Patent No. 298112 registered in the name of APOLONIO EGAO
married to Beatriz Menosa and Lot No. 661 is covered by Original Certificate of Title No. P3558 Free Patent No. 303249 registered in the name of RAULITA CONEJOS married to Pedro
Conejos, all transcribed in the Registration Book in the Register of Deeds for the Province of
Bukidnon;
WHEREAS, Lot No. 662 has been transferred in ownership from BEATRIZ MENOSA EGAO,
married to Apolonio Egao in favor of ROBERTO N. MARFORI per Deed of Absolute Sale
executed before Tommy C. Pacana, Notary Public of Cagayan de Oro City entered in his
Notarial Registry under Doc. No. 75; Page No. 15; Book V Series of 1965; and Lot No. 661
likewise has been transferred in ownership from RAULITA R. CONEJOS in favor of ROBERTO
N. MARFORI per Deed of Absolute Sale executed before Tommy C. Pacana, Notary Public of
Cagayan de Oro City, dated June 3, 1965, entered in his Notarial Registry under Doc. No. 20;
Page 4; Book V; Series of 1965.
WHEREAS, the VENDEES herein is [sic] aware of the fact that the Certificate of Title over the
abovementioned parcels of land have not yet been transferred in favor of ROBERTO N.
MARFORI except for the tax declarations but that the VENDOR herein is in actual, physical,
continuous, uninterrupted, and adverse possession of the above described parcels of land free
from all liens and encumbrances whatsoever; 1
Allegedly, upon purchase of Lot No. 662 from Roberto Marfori, improvements were introduced
and taxes paid by private respondents. Sometime in June 1983, herein petitioners allegedly
occupied illegally portions of the land. 2
Petitioners' answer to the complaint asserted that Apolonio Egao is the registered owner of the
parcel of land known as Lot No. 662, Pls 854 with an area of 3,451 sq. meters evidenced by
OCT No. P-3559 issued by the Register of Deeds of Bukidnon pursuant to Free Patent No.
298112 dated 12 August 1965; that he (Apolonio Egao) and his family have been in actual,
physical, adverse, open and continuous possession thereof even before the issuance to him of
the free patent; that the land has never been sold by reason of the prohibition against
alienation under Commonwealth Act No. 141 (Public Land Law); and that the instant case was
the fourth in a series filed against the Egaos and is part of respondents' scheme to grab said
parcel of land from the petitioners.
Judge Felicidario M. Batoy ruled in favor of the Egaos, herein petitioners (defendants in the
court a quo), ordering respondent Severo Bontilao (plaintiff in the court a quo) to immediately
deliver to the Egaos the owner's duplicate copy of Original Certificate of Title No. P-3559. Said
trial judge held:
In the instant case, granting arguendo, that defendants executed the 2 documents in favor of
Marfori (Exhs. A & B) after the filing of the application for free patent but before the issuance of
the latter, without the approval of the Director of Lands, upon issuance of Free Patent No.
29811 2 on August 12, 1965, the said deeds of sale (Exhs. A & B) were ipso facto cancelled or
superseded by said free patent. Moreover, it appears from the evidence that defendants never
vacated or abandoned their possession of Lot No. 662 as they have continuously lived on said
lot since 1950, a fact admitted by the plaintiffs themselves. And as long as Original Certificate
of Title No. P-3559 remains in the name of defendant Apolonio Egao, married to Beatriz
Menoza Egao, this is the ultimate and best evidence of title granted by the government which
must be honored and respected by the courts. In a nutshell, the plaintiffs miserably failed to
present or show any title to Lot No. 662, PLS-854 which should be quieted or freed from any

cloud of doubt as prayed for in their complaint and they further failed to show that they are
entitled to the ownership and possession to Lot No. 662, PLS-854. 3
Private respondents went to the Court of Appeals in CA-G.R. No. 09539. Setting aside the
RTC decision, the appellate court ** held, in part, thusThat the land is titled in the name of defendant Apolonio Egao is not in question. The main
point in issue is whether defendants could validly sell the land to Marfori who in turn
transferred ownership thereof to the plaintiff. 4
Marfori and Egao were both held by the Court of Appeals in pari delicto for violating the five (5)
year restriction under Sec. 118, Commonwealth Act No. 141 as amended by Act No. 496
against encumbrance or alienation of lands acquired under a free patent or homestead; hence,
they cannot, according to the appellate court, seek affirmative relief, but respondents on the
other hand were declared innocent purchasers for value who obtained the owner's duplicate
copy of the OCT (still in the name of the Egaos) from Marfori who transferred to them
(respondents) physical possession of the property. Finally, the Court of Appeals held:
WHEREFORE, the decision appealed from is hereby SET ASIDE and a new one is rendered:
1.
Declaring the plaintiffs as the absolute owners of the land known as Lot No. 662, Pls854 of the Land Registry of Bukidnon;
2.
Ordering the Register of Deeds of Bukidnon to effect the cancellation of Original
Certificate of Title No. P-3559 in the name of Apolonio Egao and in lieu thereof, another one be
issued in the names of plaintiffs, after payment of the proper fees;
3.
Ordering the defendants to surrender peaceful possession of the land to plaintiffs and
to desist from further disturbing the possession over the land of plaintiffs;
4.

Ordering the defendants to pay the costs.

SO ORDERED. 5
Petitioners turn to this Court for relief, assailing the appellate court for allegedly committing
grave abuse of discretion amounting to lack of jurisdiction in holding that:
a.

Petitioners sold Lot 662 to Roberto Marfori;

b.
It was only in 1983 when Petitioners wrested possession over the land from private
respondents;
c.

Petitioners never denied the sales made in favor of Marfori, in their answer;

d.

Private Respondents are "innocent purchasers for value. 6

and/or for allegedly deciding questions of substance not in accordance with law and/or
applicable decisions of this Court.
Without giving due course to the petition, the Court required respondents to comment. 7 After
comment, the Court resolved to require petitioners to file a reply, which they did. Respondents
filed a rejoinder. Considering the allegations, issues and arguments adduced, the Court

resolved to give due course to the petition. Upon submission by the parties of their respective
memorandum, the petition was submitted for decision. 8
Validity of the Deeds of Sale executed between Marfori (as purchaser) and the petitioners (as
sellers) is the main issue to be resolved, in determining respondents' right over the disputed
land, the respondents being the transferees of Marfori.
It is undisputed that Free Patent No. 298112 was issued to petitioner Apolonio Egao over Lot
No. 662 on 12 August, 1965. Sec. 118 of Commonwealth Act No. 141, as amended, prohibits
the alienation or encumbrance, within a period of five (5) years from the date of issuance of the
patent, of lands acquired under free patent or homestead. Assuming, arguendo, the
authenticity of the Deeds of Sale executed by the Egaos in favor of Marfori over portions of Lot
No. 662 (the land in question), dated 7 May 1964, 14 January and 6 October 1965, it clearly
appears that all deeds were executed within the prohibited period of five (5) years. As correctly
found by the appellate courtSection 124 of the Public Land Act provided [sic] that any acquisition, conveyance, abenation,
transfer or other contract made or executed inviolation of any of the provisions of Sections
118,121,120,122 and 123 of this Act shall be unlawful, null and void from its execution and
shall produce the effect of annulling and cancelling the grant, title, patent or permit originally
issued, recognized or confirmed, actually or prescriptively, and cause the reversion of the
property and its improvements to the state. 9
Petitioners deny the authenticity and due execution of the notarized deeds of sale in favor of
Marfori, asserting continued ownership over the land by virtue of a Torrens Certificate of Title
issued in their name. While the Court is not satisfied with respondents' explanation of their
failure to present the notaries public (who were residents of a neighboring province) to affirm
their participation in the preparation of the Deeds, the Court also finds as insufficient the mere
denials by petitioners as to due execution and authenticity of said Deeds of Sale. A notarial
document is evidence of the facts in clear unequivocal mariner therein expressed. It has in its
favor the presumption of regularity To contradict all these there must be evidence that is clear,
convincing and more than merely preponderant. 10 The question of authenticity being one of
fact, the Court will not disturb the conclusions of the Court of Appeals on the matter.
Original Certificate of Title No. P-3559 over the land in dispute was issued on 1 March 1966, a
few months after the execution by the Egaos of the last Deed of Sale in favor of Marfori. 11
The OCT is registered in the name of the Egaos, herein petitioners.
A Torrens title, once registered, cannot be defeated, even by adverse open and notorious
possession. A registered title under the Torrens system cannot be defeated by prescription.
The title, once registered, is notice to the world. All persons must take notice. No one can
plead ignorance of the registration. 12
Contrary to the appellate court's conclusion, respondents are not innocent purchasers for
value. 13 An "innocent purchaser for value" is deemed, under the Torrens system, to include
an innocent lessee, mortgagee or other encumbrancer for value. 14 Where a purchaser
neglects to make the necessary inquiries and closes his eyes to facts which should put a
reasonable man on his guard as to the possibility of the existence of a defect in his vendor's
title, and relying on the belief that there was no defect in the title of the vendor, purchases the
property without making any further investigation, he cannot claim that he is a purchaser in
good faith for value.
Furthermore, a private individual may not bring an action for reversion or any action which
would have the effect of cancelling a free patent and the corresponding certificate of title
issued on the basis thereof, with the result that the land covered thereby will again form part of
the public domain, as only the Solicitor General or the officer acting in his stead may do so. 16

The rule of pari delicto non oritur actio (where two persons are equally at fault neither party
may be entitled to relief under the law), admits of exceptions and does not apply to an
inexistent contract, such as, a sale void ab initio under the Public Land Act, when its
enforcement or application runs counter to the public policy of preserving the grantee's right to
the land under the homestead law. 17
Sec. 51, par. 2 of the Property Registration Decree (PD 1529), formerly Sec. 50 of the Land
Registration Act (Act No. 496) expressly provides that the registration of the Deed is the
operative act that binds or affects the land insofar as third persons are concerned. The law
requires a higher degree of prudence from one who buys from a person who is not the
registered owner, when the land object of the transaction is registered land. While one who
buys from the registered owner need not look behind the certificate of title, one who buys from
another who is not the registered owner is expected to examine not only the certificate of title
but all factual circumstances necessary for him to determine if there are any flaws in the title of
the transferor, or in his capacity to transfer the land. Failing to exercise caution of any kind
whatsoever is tantamount to bad faith. 18
Deeds of sale of patented lands, perfected within the prohibited five (5) year period are null
and void (Sec. 124, Public Land Act). No title passed from the Egaos to Marfori which could be
validly transferred to herein respondents Bontilao and Dignos. Nemo dat quod non habet
(nobody can dispose of that which does not belong to him). 19
While the government has not taken steps to assert its title, by reversion, to a homestead sold
in violation of the Public Land Act, the vendor or his heirs is better entitled to the possession of
the said, the vendee being in no better situation than any intruder. 20
Accordingly, respondents who are not innocent purchasers for value have no standing to
question petitioners' right to the land and to file an action for quieting of title.
WHEREFORE, the appealed decision of the Court of Appeals in CA G.R. CV No. 09539 is
REVERSED and SET ASIDE. Meanwhile, petitioners as registered owners are entitled to
remain in physical possession of the disputed property. Respondents are ordered to deliver the
owner's duplicate copy of the OCT (No. P-3559) to petitioners, without prejudice to an action
for reversion of the land, which may be instituted by the Solicitor General for the State.
24) G.R. Nos. L-48971 & 49011
January 22, 1980
PACIFICO GARCIA, petitioner-appellant,
vs.
BENJAMIN M. GOZON, TECLA GUTIERREZ, ROSARIO FELIX, PAULINO D.
BUENAVENTURA, RAYMUNDO DIONISIO, VIRGILIO AUSTRIA and MARCEON VICENCIO,
respondents-appellees;
PHILIPPINE NATIONAL BANK, petitioner-appellant,
vs.
COURT OF APPEALS (Third Division), CAROLINA LAPUZ- GOZON, assisted by her husband
BENJAMIN M. GOZON, TECLA GUTIERREZ, ROSARIO FELIX, PAULINO D.
BUENAVENTURA, RAYMUNDO DIONISIO, VIRGILIO AUSTRIA and MARCEON VICENCIO,
respondents-appellees.
Agapito Mendoza & Antonio G. Ibarra for appellant Pacifico Garcia
Laurel Law Office and Flores Ocampo, Dizon & Domingo for private appellees.

AQUINO, J.:
This case is about the issuance of two or more transfer certificates of title to different persons
for the same lots, or subdivisions thereof, due to the fact that the original title was allegedly not
cancelled when the first transfer certificates of title were issued to replace the original title. The
factual background is as follows:
1.
On August 9, 1918, a deed of sale for two parcels of land, E and G (with a total area
of more than seven hectares) of the Hacienda Maysilo, located in Malabon, Rizal and covered
by Original Certificate of Title No. 983, was executed in favor of Ismael Lapus a bona fide
occupant thereof. The deed was executed pursuant to an order of the Court of First Instance of
Rizal in Civil Case No. 391, Negao vs. Vidal, a partition proceeding involving the said hacienda
(See Bustamante vs. Tuason, 47 Phil. 433, 434).
2.
The deed of sale was presented for registration at two-twenty five in the afternoon of
January 15, 1920 and was recorded as Primary Entry No. 7710. That deed of sale itself
contains the following entries showing that it was annotated on the back of OCT NO. 983:
Presentado en este Registro a las 2:25 de la tarde del dia de hoy segun el Asiento No. 7710
de tomo 10 del Libro Diario, Pasig, Rizal, Enero 15, 1920.
Register of Deeds (Exh. B-12)
Inscrito el documento que precede al dorso del certificado de Titulo Original No. 983 del Tomo
A-9, de inscritor en las paginas 113 y 114 ambos del libro T-25 de registro como certificados
de titulo Nos. 4910 y 4911, archivado en el legajo T-#4910. Pasig, Rizal, Enero 15, 1920.:
Register of Deeds (Exh. B-1).
However, it seemed that, contrary to the foregoing entry and the official routine or standard
operating procedure, the deed of sale was not annotated on OCT No. 983 and that,
consequently, that title was apparently not cancelled. Why that annotation did not appear in
OCT No. 983 and why there was no notation of the cancellation of that title, as it appeared in
1962, is a mystifying circumstance in this case.
3.
As a result of the registration of that deed of sale, Transfer Certificate of 'Title No.
4910 was issued to Lapus for the two parcels of land, E and G, and I Transfer Certificate of
Title No. 4911 was issued for the remaining five lots covered by OCT No. 983 (which embrace
an area of more than two hundred fifty-eight hectares registered in the names of more than
twenty-six-co-owners). TCT Nos. 4910 and 4911 contain the following entries: "Transfer from
No. 983. Originally registered on the 29th day of January, in the year 1917 in Book No. A-9,
page 215, of the said Province of Rizal, pursuant to a decree entered in Case No. 3850."
4.
Lapus on different occasions mortgaged the two parcels of land to secure his
obligations to the Philippine National Bank, the Government and the Philippine Trust Company.
He died in 1951. The two parcels of land were inherited by his daughter, Carolina LapuzGozon. She became the registered owner of the two lots. She subdivided them into fifty-five
lots. She sold some of the subdivision lots to her co-respondents-appellees herein. Lapus and
his successors-in-interest have been in possession of the two parcels even before 1910 or for
more than seventy years.

5.
Meanwhile, in 1962, certain. alleged heirs (collectively known as the Riveras) of the
late Maria de la Concepcion Vidal filed a motion in Land Registration Cases Nos. 4429 and
4496 of the Court of First Instance of Rizal, alleging that they were deprived of their
participation in the Hacienda Maysilo covered by OCT No. 983 and for other titles and that,
since only OCT No. 983 was supposedly unencumbered, all the land covered by that title
should be adjudicated to them. The court granted the motion. It should be stressed that OCT
No. 983 appears to have remained uncancelled notwithstanding the sale to Lapus of two
parcels covered by it and the fact that it had been replaced by TCT Nos. 4910 and 4911.
6.
On June 7, 1963, OCT No. 983 was definitely cancelled and in lieu thereof Transfer
Certificate of Title No. 112236 was issued to the Riveras. Later, Lots 5 and 7 of the said title
(corresponding to parcels E and G which were sold to Ismael Lapus in 1918 as stated earlier)
were assigned by Bartolome Rivera to Sergio Cruz and Pacifico Garcia and TCT Nos. 112743
and 112742 were issued to Cruz and Garcia, respectively. Thus, two sets of transfer
certificates of title for Lots E and G or 5 and 7, originally covered by OCT No. 983, were
issued, one to the heir of Ismael Lapus and another set to the successors-in-interest of the
Riveras.
7.
On October 22, 1964, Garcia subdivided Lot 7 (G) into Lots A and B. Garcia retained
Lot A and obtained TCT No. 134958 for it. He assigned Lot B to Antonio Muoz on November
5, 1964. As a consequence of the assignment, TCT No. 112742 was cancelled and TCT No.
134957 was issued to Muoz. In 1965, he mortgaged Lot B to the Associated Banking
Corporation to secure a loan of P200,000.
8.
On the other hand, on July 17, 1964 Cruz sold to Santiago Go Lot 5 (E) covered by
TCT No. 112743. TCT No. 131329 was issued to Go on August 25,1964. On December 23,
1964, Go mortgaged Lot 6 to the Philippine National Bank (PNB) to secure a loan of P50,000
which was later increased to P60,000.
9.
Muoz and Go did not pay their mortgage debts. The two banks foreclosed the
mortgages. The PNB bought the mortgaged lot at the auction sale held on May 4. 1967. The
sheriff issued to it a certificate of sale dated May 19, 1967 but at that time there was already a
notice of lis pendens annotated on the title of the mortgaged lot. TCT Nos. 212163 and 236881
for the mortgaged lots were issued to the Associated Banking Corporation and the Philippine
National Bank, respectively.
10.

The Riveras and their successors-in-interest have never set foot on the disputed lots.

11.
Mrs. Gozon later learned that the Riveras and their successors-in-interest had
acquired the land (more than two hundred fifty-eight hectares) covered by OCT No. 983. Her
lawyer and a surveyor informed her that parcels E and G, which she inherited from her father,
were identical to Lots 5 and 7 which were conveyed to Cruz and Garcia. She registered
adverse claims on the titles covering Lots 5 and 7. On December 27, 1965 she and the
persons to whom she had transferred portions of parcels E and G filed with the Court of First
Instance of Rizal at Caloocan City against the Riveras, Cruz, Muoz, Garcia, Associated
Banking Corporation, PNB and others an action to quiet title and for damages.
12.
A notice of lis pendens was annotated on January 25, 1966 on the titles of Garcia,
Muoz and Go. The notice of lis pendens was annotated on the title of the PNB when the sale
in its favor was registered on December 13, 1969.

13.
The trial court in its decision of July 30, 1975 declared valid TCT Nos. 141802 to
141855 and 143512 issued to Mrs. Gozon and her co-plaintiffs. It voided TCT No. 112235
issued to the Riveras and all titles and transactions emanating therefrom insofar as those titles
covered the lots embraced in plaintiffs' titles. The Riveras were ordered to pay the plaintiffs
twenty thousand pesos as attorney's fees.
14.
The trial court also ordered Muoz to pay the Associated Banking Corporation, in the
event that the bank would be evicted from the lot covered by TCT No. 212153, two hundred
sixty-five thousand seventy-two pesos and fifteen centavos with twelve percent interest per
annum from the date of the eviction plus ten thousand pesos as attorney's fees.
15. Santiago Go was ordered to pay the PNB, should it be evicted from the lot covered by TCT
No. 236881, the sum of sixty thousand pesos plus nine percent interest per annum from the
date of the eviction and six thousand pesos as attorney's fees.
16.
That judgment of the trial court was affirmed by the Court of Appeals in its decision of
May 25, 1978. Garcia and the PNB appealed from that decision. The Associated Banking
Corporation, now the Associated Citizens Bank, tried to appeal but it was not able to file its
petition for review (L-49010).
Garcia contends that the Court of Appeals erred in not holding that his title is valid and that the
titles of Ismael Lapus and his successors-in-interest lost their right to the disputed lots due to
their negligence or inaction.
The issue is whether the 1920 title issued to Lapus and the titles derived therefrom should
prevail over the 1963 title issued to the Riveras and the subsequent titles derived from it.
Should Lapus' title prevail even if it was not annotated by the register of deeds on the anterior
or parent title which was not cancelled before 1963? It was that noncancellation which led to
the issuance of the duplicative title to the Riveras and eventually to the execution of the
controversial mortgages and foreclosure sales to the two banks.
We hold that the two appeals have no merit. The title of Lapus and the titles derived therefrom
should be given effect. The title of the Riveras and the titles springing from it are void.
There can be no doubt that Lapus was an innocent purchaser for value. He validly transmitted
to his successors-in-interest his indefeasible title or ownership over the disputed lots or parcels
of land. That title could not be nullified or defeated by the issuance forty-three Years later to
other persons of another title over the same lots due to the failure of the register of deeds to
cancel the title preceding the title issued to Lapuz. This must be so considering that Lapus and
his interest remained in possession of the disputed successors in lots and the rival claimants
never possessed the same.

certificate issued in respect thereof " (Niblack, Analysis of the Torrens System page 237, cited
in Legarda and Prieto vs. Saleeby, supra, pages 595-6).
And the rule that in case of double registration the owner of the earlier certificate is the owner
of the land applies to the successive vendees of the owners of such certificates. "The vendee
of the earlier certificate would be the owner as against the vendee of the owner of the later
certificate" (Legarda and Prieto vs. Saleeby, supra, pages 597-9).
It is settled that is this jurisdiction the maxim prior est in tempore, potior est in jure (he who is
first in time is preferred in right) is followed in land registration matters (La Urbana vs.
Bernardo, 62 Phil. 790, 806).
Appellant Garcia invokes the ruling that the mere entry of a document in the day or entry book
without noting it on the certificate of title is not a sufficient registration (Bass vs. De la Rama,
73 Phil. 682, 685).
That ruling was superseded by the holding in the later six cases of Levin vs. Bass, 91 Phil.
420, where a distinction was made between voluntary and involuntary registration, such as the
registration of an attachment, levy upon execution, notice of his pendens, and the like. In
cases of involuntary registration, an entry thereof in the day book is a sufficient notice to all
persons even if the owner's duplicate certificate of title is not presented to the register of
deeds.
On the other hand, according to the said cases of Levin vs. Bass, in case of voluntary
registration of documents an innocent purchaser for value of registered land becomes the
registered owner, and, in contemplation of law the holder of a certificate of title, the moment he
presents and files a duly notarized and valid deed of sale and the same is entered in the day
book and at the same time he surrenders or presents the owner's duplicate certificate of title
covering the land sold and pays the registration fees, because what remains to be done lies
not within his power to perform. The register of deeds is duty bound to perform it. (See
Potenciano vs. Dineros, 97 Phil. 196.)
The instant case is not Identical to the Bass cases. Here the deed of sale in favor of Lapus,
which was judicially authorized, was entered in the entry book and a new title was issued to
him. As already stated, and this point should be underscored, the deed of sale in favor of
Lapus contains the notation that it was annotated on the back of OCT No. 983 (presumably,
the original and owner's duplicate thereof).
But why in 1962 it appeared that no such annotation was found on the back of OCT No. 983,
contrary to what was stated in the 1918 deed of sale, is a mystery that the trill court and the
plaintiffs failed to unravel during the trial. Moreover, the title issued to Lapus contains the usual
notation that it was a transfer from a previous title which in this case was OCT No. 983.

"The general rule is that in the case of two certificates of title, purporting to include the same
land, the earlier in date prevail, whether the land comprised in the latter certificate be wholly, or
only in part, comprised in the earlier certificate" (Hogg, Australian Torrens System 823, citing
cases and cited in Legarda and Prieto vs. Saleeby, 31 Phil. 590, 595).

It should be further observed that the deed of sale in favor of Lapus and the titles issued to him
and his successors interest together with his mortgage in 1929 of the disputed lots to the PNB
itself, are all a matter of public record in the registry of deeds.

"Where two certificates (of title) purport to include the same land, the earlier in date prevails. ...
In successive registrations, where more than once certificate is issued in respect of a party
estate or interest in land, the Person claiming under the prior certificate 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

As stressed in Legarda and Prieto vs. Saleeby, 31 Phil. 590, 600, "the record is notice to all the
world. All persons are charged with the knowledge of what it contains. All persons dealing with
the land so recorded, or any portion of it, must be charged with notice of whatever it contains.
The purchaser is charged with notice of every fact shown by the record and is presumed to
know every fact which the record discloses.

"When a conveyance has been properly recorded, such record is constructive notice of its
contents and all interests, legal and equitable, included therein." "Under the rule of notice, it is
presumed that the purchaser has examined every instrument of record affecting the title. Such
presumption is irrefutable. 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"
(Legarda and Prieto vs. Saleeby, supra, page 600).

not cancelled. For that anomaly, the purchaser, Ismael Lapus, the how" of the earlier title, was
not culpable or blameworthy.
WHEREFORE, the judgment of the Court of Appeals, affirming the decision of the trial court,
should stand. Costs against the appellants.

As Justice Johnson says, "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" (Legarda and Prieto vs. Saleeby, supra, pp. 600-601).
As to the PNB's claim that it was a mortgagee and purchaser in good faith and for value, the
Appellate Court held that the bank should have made an on-the-spot investigation of the lot
mortgaged by Go to ascertain whether he was in possession of it or it was claimed by other
persons. Its failure to do so precludes the bank from being considered as a mortgagee in good
faith and for value (Gatioan vs. Gaffud, L-21953, March 28, 1969, 27 SCRA 706).
On the other hand, the trial court held that the PNB was not a buyer in good faith when it
bought Go's lot at the auction sale because there was already a notice of his pendens
annotated on his title.
In the Gatioan case, it appears that in 1935 Rufina Permison secured a Torrens title for a
parcel of land on the basis of a free patent. The land was sold to Encarnacion Gatioan and
Transfer Certificate of Title No. T-1212 was issued to her. She mortgaged the land three times
to the PNB
In 1956, the spouses Sixto Gaffud and Villamora Logan were able to secure a Torrens title for
the same lot also on the basis of a free patent. They mortgaged the land also to the PNB. The
Secretary of Agriculture and Natural Resources, on discovering that two Torrens titles were
issued for the same land, recommended the cancellation of the later title issued to the Gaffud
spouses. As the PNB refused to cancel the mortgaged executed by Gatioan, in spite of the fact
that she had made full payment of the mortgage debt, she filed against the Gaffud spouses
and the PNB an action to quiet title.
It was held that Gatioan's title should prevail over that of the Gaffud spouses and that the
mortgage executed by them in favor of the PNB was void. The Gaffud spouse were ordered to
pay damages to Gatioan.
Since the applicable rule in the instant case is that the earlier certificate of title should be
recognized as superior and controlling there is no justification for relying on the doctrine laid
down by Justice Holmes in Eliason vs. Wilborn 281 U.S. 457, that "as between two innocent
persons, one of whom must suffer the consequence of a breach of trust, the one who made it
possible by his act of confidence must bear the loss."
There was no breach of trust in this case. What is note. worthy in this case is that after it was
recited in the registered deed of sale that sale was annotated at the back of the title covering
the lots sold, it turned out that the title did not contain such an annotation and that the title was

25) G.R. Nos. 74226-27 July 27, 1989

PEOPLE OF THE PHILIPPINES, petitioner,
vs.
MIZPAH R. REYES, respondent.
The crime of falsification of a public document carries with it an imposable penalty of prision
correccional in its medium and maximum periods and a fine of not more than P5,000.00 [Art.
172, Revised Penal Code (RPC)]. Being punishable by a correctional penalty, this crime
prescribes in ten (10) years [Art. 90, par. 3 (RPC)]. The ten (10) year prescriptive period
commences to run "from the day on which the crime is discovered by the offended party, the
authorities, or their agents . . ." [Art. 91, (RCP)]. In the instant case, the public document
allegedly falsified was a notarized deed of sale registered on May 26, 1961 with the Register of
Deeds in the name of the accused, private respondent herein, Mizpah R. Reyes. The two
informations for falsification of a public document subject matter of the controversy were,
however, filed only on October 18, 1984. The complainants claim that they discovered the

falsified notarized deed of sale in June 1983. The Court is tasked with determining whether the
crime has prescribed which hinges on whether or not its discovery may be deemed to have
taken place from the time the document was registered with the Register of Deeds, consistent
with the rule on constructive notice.
The antecedent facts are as follows:

If registration is a notice to the whole world, then registration is in itself a notice and therefore,
the prescriptive period of registered document must start to run from the date the same was
annotated in the Register of Deeds.
In these two cases in question, prescriptive period of ten (10) years should have started from
May 26, 1960 (sic).

The spouses Julio Rizare and Patricia Pampo owned a parcel of land located in Lipa City
registered in their names under TCT No. T-7471. Both are now deceased, the husband having
died on September 6, 1970 and his wife on August 7, 1977. They were survived by the
following children: the accused Mizpah R. Reyes and the complainants Cristina R. Masikat,
Julieta R. Vergara and Aurora Rizare Vda. de Ebueza.

Considering the lapse of more than twenty (20) years before the two informations were filed,
the crimes for which the accused, Mizpah Reyes, are charged have already prescribed.

In June 1983, the complainants allegedly discovered from the records of the Register of Deeds
of Lipa City that the abovementioned property had already been transferred in the name of
Mizpah Reyes, single, of legal age, Filipino and resident of the City of Lipa, Philippines" under
TCT No. T-9885. They further allegedly discovered that the conveyance was effected through
a notarized deed of sale executed and signed on May 19, 1961 by their parents Julio Rizare
and Patricia Pampo. The deed of sale was registered with the Register of Deeds of Lipa City
on May 26, 1961. Upon examination of the document, they found that the signature of their
parents were allegedly falsified and that accused also made an untruthful statement that she
was single although she was married to one Benjamin Reyes on May 2, 1950. The document
was referred by the complainants to the National Bureau of Investigation (N.B.I.) for
examination of the signatures of their parents and a report was returned with the finding that
the signature of Julio Rizare was genuine but that of Patricia Pampo was forged. Upon
complaint by the sisters of the accused and after conducting an investigation, the fiscal filed
with the Regional Trial Court of Batangas, Branch XIII, Lipa City on October 18, 1984 two (2)
informations both for falsification of public document, the first in Criminal Case No. V-1163, for
allegedly making it appear in the notarized deed of sale that Patricia Pampo, the mother of the
accused, participated in the sale of a parcel of land by falsifying Pampo's signature, and the
second in Criminal Case No. V-1164, for allegedly making an untruthful statement of fact in the
deed of sale, more specifically, by stating that accused was single.

From the trial court's order quashing the two (2) informations, the People, petitioner herein,
filed an appeal with the Court of Appeals (then designated as the Intermediate Appellate
Court). In a decision ** promulgated on April 3, 1986, the Court of Appeals affirmed the trial
court's order. The Court of Appeals rejected the theory of petitioner that the prescriptive period
should commence on June 1983, when the complainants actually discovered the fraudulent
deed of sale. The appellate court sustained the trial court's ruling that the prescriptive period
started on May 26, 1961, when the deed of sale was registered with the Register of Deeds of
Lipa City. Hence, this petition for review on certiorari of the decision of the Court of Appeals,
filed by the People, through the Solicitor-General.

Before arraignment, accused filed a motion to quash both informations on grounds that: (1)
"The criminal action or liability has been extinguished by prescription of the crime in the light of
Cabral v. Puno, 70 SCRA 606;" and (2) "The trial court had no jurisdiction over the offense
charged and the person of accused because of non-compliance with the pre-conciliation
requirement of P.D. No. 1508." [Rollo, p. 33].
The trial court granted the motion and quashed the informations in the two (2) cases stating
that:
xxx
...The title, once registered, is a notice to the world. All Persons must take notice. No one can
plead ignorance of registration.
The essence, therefore, of registration is to serve notice to the whole world of the legal status
and the dealing therewith.

WHEREFORE, and as prayed for, Criminal Cases Nos. V-1163 and V-1164 are quashed.
[Rollo, pp. 33-34].

Among the authorities relied upon by the Court of Appeals in dismissing petitioner's appeal is
the case of Cabral v. Puno, G.R. No. L-41692, April 30, 1976, 70 SCRA 606, where the
Supreme Court made a statement to the effect that in the crime of falsification of a public
document, the prescriptive period commences from the time the offended party had
constructive notice of the alleged forgery after the document was registered with the Register
of Deeds. However, petitioner contends that this particular statement is not doctrine but merely
an obiter dictum.
The Cabral case stemmed from the filing on September 24, 1974 of an information accusing
Eugenio Cabral of the crime of falsification of public document for allegedly falsifying on August
14, 1948 the signature of the complainant Silvino San Andres in a deed of sale of a parcel of
land. Before arraignment, petitioner moved to quash the information on the ground of
prescription of the crime, as the notarized deed of sale was registered with the Register of
Deeds on August 26, 1948. After hearing the motion, the judge issued a resolution granting the
motion to quash and dismissing the information on the ground of prescription. Private
prosecutor filed a motion for the reconsideration of the resolution. Acting on said motion, the
trial court ordered the fiscal to make known his position. The fiscal filed a comment stating that
the crime has not prescribed as the complainant San Diego claimed that he only discovered
the crime in October 1970. Thereafter, the trial court set aside its resolution granting the
accused's motion to quash and reinstated the information. The accused brought the case to
the Supreme Court questioning the trial court's authority to set aside its resolution granting his
motion to quash. The Supreme Court ruled in favor of the accused by holding that the
aforementioned resolution has already become final and executory for failure of the fiscal to file
a motion for reconsideration within the reglementary period. The motion for reconsideration
filed by the private prosecutor was disregarded because of the latter's lack of legal standing.
Another reason given by the Court for its decision is the following:
. . .The Rules of Court is explicit that an order sustaining a motion to quash based on
prescription is a bar to another prosecution for the same offense [Secs. 2(f) and 8, Rule 117,

Revised Rules of Court]. Article 89 of the Revised Penal Code also provides that "prescription
of the crime is one of the grounds for "total extinction of criminal liability." Petitioner was
charged with the crime of falsification under Article 172, sub-paragraphs (1) and (2) of the
Revised Penal Code, which carries an imposable penalty of prision correccional in its medium
and maximum periods and a fine of not more than P5,000.00. This crime prescribes in ten (10)
years [Article 90, Revised Penal Code]. Here, San Diego had actual if not constructive notice
of the alleged forgery after the document was registered in the Register of Deeds on August
26, 1948.

the deed of partition are deemed to have notice of its existence from the time it was registered
with the Register of Deeds [De la Cerna v. De la Cerna, G.R. No. L-28838, August 31, 1976,
72 SCRA 514]. Likewise, the rule on constructive notice has been applied in the interpretation
of a provision in the Civil Code on the prescription of actions for annulment of contracts which
is parallel to Art. 91 of the Revised Penal Code. The Civil Code provision states:
Art. 391. The action for annulment shall be brought within four years.
This period shall begin:

xxx
xxx
[Cabral v. Puno, supra at p. 609].
In case of mistake or fraud, from the time of the discovery of the same [Emphasis supplied].
Although the prescription of the crime was not squarely in issue in Cabral, it is apparent that
the statement of the Court on prescription and constructive notice was not totally irrelevant to
the disposition of the case. Moreover, it is not without any legal basis.
The rule is well-established that registration in a public registry is a notice to the whole world.
The record is constructive notice of its contents as well as all interests, legal and equitable,
included therein. All persons are charged with knowledge of what it contains [Legarda and
Prieto v. Saleeby, 31 Phil. 590 (1915); Garcia v. Court of Appeals, G.R. Nos. L-48971 and
49011, January 22, 1980, 95 SCRA 380; Hongkong and Shanghai Banking Corporation v.
Pauli, et al., G.R. No. L-38303, May 30, 1988,161 SCRA 634; See also Sec. 52, Pres. Decree
No. 1529 (1978)].
Pursuant to this rule, it has been held that a purchaser of registered land is presumed to be
charged with notice of every fact shown by the record. The Court, in explaining the nature of
the rule on constructive notice and the presumption arising therefrom stated in Gatioan v.
Gaffud, G.R. No. L-21953, March 28 1969, 27 SCRA 706, 712-713, that:
xxx

In Armentia v. Patriarca, G.R. No. L-18210, December 29, 1966,18 SCRA 1253, where a
notarial document recorded with the Registry of Deeds was sought to be annulled, the Court,
interpreting the phrase "from the time of the discovery" found in the aforequoted provision of
the Civil Code, ruled that "in legal contemplation, discovery must be reckoned to have taken
place from the time the document was registered in the Register of Deeds, for the familiar rule
is that registration is a notice to the whole world . . ." [See also Avecilla v. Yatco, 103 Phil. 666
(1958); Gerona v. De Guzman, G.R. No. L-19060, May 29, 1964, 11 SCRA 153; Carantes v.
Court of Appeals, G.R. No. L-33360, April 25, 1977, 76 SCRA 514; Cultura v. Tupacar, G.R.
No. L-48430, December 3, 1985,140 SCRA 311; Cimafranco v. IAC, G.R. No. L-68687,
January 31, 1987, 147 SCRA 611; Hongkong and Shanghai Banking Corporation v. Pauli, et
al., supra.] However, petitioner contends that Art. 91 of the Revised Penal Code which states
that "the period of prescription shall commence to run from the day the crime is discovered by
the offended party,the authorities, or their agents. . cannot be construed in the same manner
because the rule on constructive notice is limited in application to land registration cases. It is
argued that haste should be avoided in applying civil law presumptions to criminal suits.

xxx

Although caution should be observed in applying the rules of construction in civil cases in the
interpretation of criminal statutes, the Court will not hesitate to do so if the factual and legal
circumstances so warrant. Hence, in Mercado v. Santos, 66 Phil. 215 (1938), the Court applied
the presumption arising from the allowance of a will to bar a criminal action. In theft particular
case, the petitioner filed a petition for the probate of the will of his deceased wife. The will was
duly probated. Sixteen (16) months thereafter, a criminal complaint was filed against petitioner
for falsification or forgery of the will. Petitioner filed a motion to dismiss the case claiming that
the order probating the will is conclusive as to its authenticity and due execution. The motion
having been denied, the petitioner filed a petition for certiorari with the Court of Appeals (CA)
which ruled that "the judgment admitting the will to probate is binding upon the whole world as
to the due execution and genuineness of the will insofar as civil rights and liabilities are
concerned, but not for the purpose of punishment of a crime." But the Supreme Court reversed
the CA decision by ruling that, in accordance with See. 625 of the then Code of Civil Procedure
which provides that "the allowance by the court of a will of real and personal estate shall be
conclusive as to its due execution," *** a criminal action will not lie in this jurisdiction against
the forger of a will which had been duly admitted to probate by a court of competent
jurisdiction.

It has also been ruled that when an extrajudicial partition of the property of the deceased was
executed by some of his heirs, the registration of the instrument of partition with the Register of
Deeds is constructive notice that said heirs have repudiated the fiduciary relationship between
them and the other heirs vis-a-vis the property in question. The heirs who were not included in

It is, however, insisted in this case that the rule on constructive notice applies only in civil
cases. It is argued that the law on prescription of crimes is founded on a principle different from
that of the law on prescription in civil actions. The difference, it is claimed, precludes the
application of the rule on constructive notice in criminal actions.

When a conveyance has been properly recorded such record is constructive notice of its
contents and all interests, legal and equitable, included therein ...
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.

The statute of limitations of civil actions was explained in Penales v. Intermediate Appellate
Court, G.R. No. 73611, October 27, 1986, 115 SCRA 223, 228 in the following manner:
Prescription is rightly regarded as a statute of repose whose object is to suppress fraudulent
and stale claims from springing up at great distances of time and surprising the parties or their
representatives when the facts have become obscure from the lapse of time or death or
removal of witnesses . . .
On the other hand, the Court in People v. Moran, 44 Phil. 389, 405-406 (1923), discussed the
nature of the statute of limitations in criminal cases as follows:
xxx
. . . The statute is not a statute of process, to be scantily and grudgingly applied, but an
amnesty, declaring that after a certain time oblivion shall be cast over the offense; that the
offender shall be at liberty to return to his country; and resume his immunities as a citizen; and
that from henceforth he may cease to preserve the proofs of his innocence, for the proofs of
his guilt are blotted out. Hence it is that statutes of limitation are to be liberally construed in
favor of the defendant, not only because such liberality of construction belongs to all acts of
amnesty and grace, but because the very existence of the statute is a recognition and
notification by the legislature of the fact that time, while it gradually wears out proofs of
innocence, has assigned to it fixed and positive periods in which it destroys proofs of guilt.
Independently of these views, it must be remembered that delay in instituting prosecutions is
not only productive of expense to the State, but of peril to public justice in the attenuation and
distortion, even by mere natural lapse of memory, of testimony. It is the policy of the law that
prosecutions should be prompt, and that statutes enforcing such promptitude should be
vigorously maintained. They are not merely acts of grace, but checks imposed by the State
upon itself, to exact vigilant activity from its subalterns, and to secure for criminal trials the best
evidence that can be obtained.

the state, after the lapse of a certain period of time, surrenders its sovereign power to
prosecute the criminal act. While the law on prescription of civil suits is interposed by the
legislature as an impartial arbiter between two contending parties, the law on prescription of
crimes is an act of amnesty and liberality on the part of the state in favor of the offender
[People v. Moran, supra, at p. 405]. Hence, in the interpretation of the law on prescription of
crimes, that which is most favorable to the accused is to be adopted [People v. Moran, supra;
People v. Parel, 44 Phil. 437 (1923); People v. Yu Hai, 99 Phil. 725 (1956)]. The application of
the rule on constructive notice in the construction of Art. 91 of the Revised Penal Code would
most certainly be favorable to the accused since the prescriptive period of the crime shall have
to be reckoned with earlier, i.e., from the time the notarized deed of sale was recorded in the
Registry of Deeds. In the instant case, the notarized deed of sale was registered on May 26,
1961. The criminal informations for falsification of a public document having been filed only on
October 18, 1984, or more than ten (10) years from May 26, 1961, the crime for which the
accused was charged has prescribed. The Court of Appeals, therefore, committed no
reversible error in affirming the trial court's order quashing the two informations on the ground
of prescription.
WHEREFORE, in view of the foregoing, the petition is hereby DENIED and the decision of the
Court of Appeals is AFFIRMED.

xxx
It is evident that there is merit in petitioner's claim that the law on prescription of civil suits is
founded on different policy considerations from that of the law on prescription of criminal
actions. However, the Court does not subscribe to the conclusion that the presumptions and
rules of interpretation used in the law on prescription of civil suits, including the rule on
constructive notice, can not be applied in criminal actions.
The considerations in providing for prescription of civil suits are based mainly on practical and
equitable grounds. The lapse of a considerably long period of time obscures the surrounding
circumstances of a particular claim or right and erodes the integrity of whatever evidence may
be presented in support of an action to enforce or contest such claim or right. Moreover, where
a particular right has accrued in favor of a party, the enjoyment of such right cannot forever be
left on a precarious balance, always susceptible to possible challenge by an adverse party.
After a certain period of time fixed by law, the right enjoyed by a party must be accorded
respect by prohibiting adverse claims the factual basis of which can no longer be verified with
certainty. Hence, the law on prescription of civil suits is properly called a statute of repose.
The practical factor of securing for civil suits the best evidence that can be obtained is also a
major consideration in criminal trials. However, the law on prescription of crimes rests on a
more fundamental principle. Being more than a statute of repose, it is an act of grace whereby

26) G.R. No. L-42278 January 20, 1989

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), petitioner,
vs.
HON. COURT OF APPEALS and RENE KNECHT, respondents.
Cesar R. Vidal for petitioner.

Norberto J. Quisumbing for private respondent.

MEDIALDEA, J.:
This is a petition for review on certiorari filed by the Government Service Insurance System
(GSIS) seeking the reversal of the decision of the respondent Court of Appeals dated October
13, 1975, in the special civil action for certiorari docketed as CA-G.R. No. SP-04300, entitled
"Rene Knecht vs. Hon. Pedro JL. Bautista, etc., et. al.," and its resolution dated December 18,
1975, denying petitioner's motion for reconsideration. Per Resolution dated May 4, 1976,
however, We treated this case as a special civil action (p. 217, Rollo).
The assailed decision set aside, "as having been issued in grave abuse of discretion," the
Orders of the Court of First Instance (now Regional Trial Court) of Rizal, Branch III, Pasay City,
dated May 26, 1975 and May 27, 1976, which respectively denied private respondent Knecht's
"Urgent Motion for Intervention" and granted GSIS' "Ex-parte Motion for Issuance of Writ of
Possession" in GLRO Record No. 317 and 1356, or CFI Case No. 1104.
The antecedent facts in the instant case are as follows:
Mariano R. Dulay Enterprises (hereinafter referred to as Dulay) obtained on various
occassions, real estate loans from the Government Service Insurance System (GSIS for short)
all amounting to P9,535,000.00 (p. 3, Rollo). These loans were secured by a real estate
mortgage of a certain parcel of land (which included Hotel Frederick), then covered by Transfer
Certificate of Title No. 17638 of the Registry of Deeds of Pasay City, under Act No. 3135, as
amended by Act No. 4118.
As of September 10, 1974, DULAY had incurred arrearages in the payment of its loans all
amounting to P3,335,878.81. In view thereof, the GSIS instituted extrajudicial foreclosure
proceedings on the mortgaged property and on November 5, 1974, the said property was sold
at public auction by the Sheriff of Pasay City to the GSIS as the highest bidder for
P13,426,382.00. A Certificate of Sale was subsequently issued on November 22, 1974, and
the same was duly registered on December 13, 1974 (p. 4, Rollo).
On January 7, 1975, the GSIS filed with the Court of First Instance (now Regional Trial Court)
of Rizal, with station at Pasay City, an "Ex-Parte Petition for Issuance of a Writ of Possession"
in the original registration proceedings (therein docketed as GLRO Record No. 317 and 1356,
or CPI Case No. 1104), conformably with Section 4 of P.D. 385 (p. 355, Rollo).
On January 16, 1975, private respondent Rene C. Knecht (Knecht for short), filed with the
aforesaid court, an "Urgent Motion for Intervention" claiming that DULAY had sold the property
to him on May 4, 1974 and assigned to him on November 5, 1974, the right to redeem the
same. The GSIS opposed the motion alleging that "intervention will not lie when there is no
pending litigation; when it impairs substantial rights of the adverse party; when the intervenor is
guilty of laches; and that the intervenor has no legal interest in the property subject of a writ of
possession" (p. 5, Rollo).
On May 26, 1975, the Court of First Instance of Rizal, with Judge Pedro JL. Bautista presiding,
denied Knecht's motion for intervention citing Section 7 of Act No. 3135 and Section 4 of PD

No. 385, and, on May 27, 1975, directed the issuance of a writ of possession in favor of the
GSIS upon the latter's posting a bond in the amount of P2,000,000.00 (p. 6, Rollo).
On June 11, 1975, Knecht filed a special civil action for certiorari with the Court of Appeals
wherein he assailed the said Orders of the Court of First Instance of Rizal as having been
issued in grave abuse of discretion amounting to lack of jurisdiction (p. 4, Rollo). The Court of
Appeals immediately, and without any prior hearing, issued a writ of preliminary injunction,
upon Knecht's filing of a bond in the sum of Pl,000.00, enjoying the Court of First Instance of
Rizal from issuing the writ of possession and the Sheriff of Pasay City from executing the
same, if already issued (p. 642, Rollo).
On October 13, 1975, respondent Court of Appeals rendered a decision (p. 78, Rollo) (after
GSIS had filed its Answer to the Petition but therefore the parties could file their respective
Memoranda) upholding Knecht's right to intervene in the proceedings for the issuance of a writ
of possession, as a successor-in-interest of the Dulays, and standing "on better footing than a
necessary or an indispensable party" (p. 89, Rollo). Respondent Court of Appeals likewise set
aside, "as having been issued in grave abuse of discretion," the Orders of the CFI of Rizal,
dated May 26, 1975 (denying the motion for intervention) and May 27, 1975 (granting the writ
of possession), and making permanent the injunction it had earlier issued. The motion for
reconsideration filed by GSIS (p. 102, Rollo) was denied per Resolution dated December 18,
1975 (p. 108, Rollo).
On January 7, 1976, the GSIS filed the present "Petition for Review on Certiorari" praying for
the reversal of respondent Court of Appeals' Decision.
Meantime, title to the subject property was consolidated in the name of the GSIS on January
15, 1976. Transfer Certificate of Title No. 17638, in the name of Manuel R. Dulay Enterprises,
Inc. was cancelled and Transfer Certificate of Title No. 19836 of the Register of Deeds of
Pasay City was issued in the name of the GSIS.
On August 11, 1976, upon motion of GSIS, We issued a Writ of Preliminary Mandatory and
Prohibitory Injunction enjoining the Court of Appeals from enforcing its final injunction issued
against the GSIS, and directing Knecht: (1) to turn over to the GSIS the possession of the
subject property; (2) to submit an accounting of all revenues derived from his hotel operations
as of November 5, 1974; (3) to deposit with this court all such revenues on hand as of turnover of premises to GSIS.
Knecht moved to dissolve the preliminary injunction. In a Resolution dated August 18, 1976 (p.
399, Rollo), We upheld said preliminary injunction but suspended the portion regarding deposit
of revenues, and declared the case submitted for decision.
Knecht refused to comply with the preliminary injunction, prompting the GSIS to move to
declare him in contempt of court for which We issued a Show-Cause Order on November 15,
1976 (p. 425, Rollo). On January 24, 1977, however, the day set for the hearing of the
contempt charge, the parties filed a Joint Manifestation and Motion praying for the cancellation
of the hearing in view of possible amicable settlement. This Rollo was granted per Our
Resolution dated January 28, 1977 (p. 517, Rollo).
However, the parties failed to reach an amicable settlement, prompting the GSIS to move for
immediate compliance (by Knecht) with the Resolution of August 11, 1976, and upon his failure
to do so, the immediate implementation of the Writ of Preliminary Mandatory and Prohibitory
Injunction issued by Us on August 11, 1976.

Petitioner GSIS seeks the reversal and setting aside of the decision of respondent Court of
Appeals, on the following grounds:
1. Subject orders are predicated on Sec. 7 of Act 3135 and Sec. 4 of PD 385; hence
respondent Court of Appeals could not have possibly found the CFI of Rizal guilty of
capricious, arbitrary, whimsical or despotic exercise of judgment;
2.
Respondent Court of Appeals failed to support its conclusion of grave abuse of
discretion with a finding of capricious, arbitrary, whimsical, or despotic exercise of judgment in
issuing Orders;

ex parte motion in the registration or cadastral proceedings if the property is registered, or in

special proceedings in the case of property registered under the Mortgage Law or under
section one hundred and ninety-four of the Administrative Code, or of any other real property
encumbered with a mortgage duly registered in the office of any register of deeds in
accordance with any existing law, and in each case the clerk of the court shall, upon the filing
of such petition, collect the fees specified in paragraph eleven of section one hundred and
fourteen of Act Numbered Four hundred and ninety-six, as amended by Act Numbered Twentyeight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of
possession issue, addressed to the sheriff of the province in which the property is situated,
who shall execute said order immediately. (Emphasis ours)
It has been held:

3. The Extraordinary writ of certiorari is available only to correct or rectify jurisdictional errors. It
cannot be used where the error assigned is one of judgment, nothing more;
4. Other procedural infirmities suggest bias or prejudice against the lawful interest of petitioner:
a.) the issuance of a preliminary injunction without prior hearing
b.) the bond of Pl,000.00 required of Knecht, as against the P2 M posted by GSIS
c.) promulgation of the decision prior to the expiration of the period granted by the Court of
Appeals for the parties to submit their respective memoranda (p. 693, Rollo).
On the other hand, respondent Knecht claims that:
1. as a purchaser of the mortgaged property, and subsequent assignee of the redemption
rights of mortgagor, (per Deed of Assignment), dated November 7, 1974, he has pecuniary
interest in the mortgaged property which would warrant his right to intervene in the petition for
issuance of the writ of possession.
2. the extrajudicial foreclosure is null and void.
The petition is impressed with merit.
Respondent Court of Appeals gravely erred in setting aside the Orders of the Court of First
Instance (now Regional Trial Court) of Rizal, dated May 26, 1975 and May 27, 1975, which
respectively denied Knecht's "Urgent Motion for Intervention" and granted GSIS' Ex-Parte
Motion for Issuance of Writ of Possession.
The CFI orders denying the motion for intervention and granting the writ of possession upon an
ex-parte motion of petitioner GSIS were premised on Section 7 of Act No. 3135 and Sec. 4 of
P.D. No. 385.
Section 7 provides as follows:
SEC. 7. In any sale made under the provisions of this Act, the purchaser may petition the Court
of First Instance of the province or place where the property or any part thereof is situated, to
give him possession thereof during the redemption period, furnishing bond in an amount
equivalent to the use of the property for a period of twelve months, to indemnify the debtor in
case it be shown that the sale was made without violating the mortgage or without complying
with the requirements of this Act. Such petition shall be made under oath and filed in form of an

Sections 7 and 8 of Act 3135, expressly authorize the purchaser at the public auction in an
extrajudicial foreclosure of mortgage to petition for a writ of possession during the redemption
period by filing an ex parte motion under oath for that purpose in the corresponding registration
or cadastral proceeding in the case of property with Torrens title; and upon the filing of such
motion and the approval of the corresponding bond, the law, also in express terms, directs the
court to issue the order for a writ of possession. Under said sections, the order for a writ of
possession issues as a matter of course upon the filing of the proper motion and the approval
of the corresponding bond. The judge issuing the order following these express provisions of
law cannot be charged with having acted without jurisdiction or with grave abuse of discretion
(Emphasis ours) (Eugenio S. de Garcia vs. Hon. Ramon R. San Jose, et. al. (94 Phil 623)).
Likewise in the case of Marcelo Steel Corp. vs. Court of Appeals, G.R. Nos. L-34317 and L34335, November 28, 1973, 54 SCRA 891), We stated that the issuance of the writ is a legal
mandate, and the judge may not be charged with grave abuse of discretion, for complying with,
and implementing said legal mandate:
Having merely followed an express provision of law, whose validity is not questioned, the
Judge cannot be charged with having acted without jurisdiction or with grave abuse of
discretion. The rule that the purchaser at a judicial public auction is not entitled to possession
during the period of redemption is not applicable to a sale under Act No. 3135 where the
granting of said possession is expressly authorized (p. 18, Rollo) (Emphasis supplied).
On the other hand, Sec. 4 of P.D. 385, issued on January 13, 1974 provides:
SECTION 4. As a result of foreclosure or any other legal proceedings wherein the properties of
the debtor which are foreclosed, attached, or levied upon in satisfaction of a judgment are sold
to a government financial institution, the said properties shall be placed in the possession and
control of the financial institution concerned, with the assistance of the Armed Forces of the
Philippines whenever necessary. The Petition for Writ of Possession shall be acted upon by
the court within fifteen (15) days from the date of filing. (Emphasis ours)
In PNB vs. M. Adil, et al. (G.R. No. 52823, November 2,1982, 118 SCRA 110) We stated that
P.D. No. 385 makes it mandatory for the court to place a financial institution in possession of
the property:
The right of the purchaser to be placed in the possession of the property is bolstered by
Section 8 of the aforecited Act which provides that if the judge finds the complaint assailing the
legality of the foreclosure sale justified, it shall not transfer the possession of the property, even
on appeal, but will only proceed against the bond posted by the purchaser.

Based on the foregoing, the order for the issuance of the writ was clearly within the power,
competence and jurisdiction of the court a quo to issue.
As to the wisdom or soundness of the challenged order granting such writ of possession, it is a
matter of judgment in connection with which the remedy is ordinary appeal. (Toribia Lamagan
vs. Hon. Rafael de la Cruz and Cosme O. Follosco, G.R. No. L-27950, July 29, 1971; 40
SCRA 101; Salvador E. Bimeda vs. Arcadio Perez and Hon. Jose T. Surtida, 93 Phil. 636).
There being no showing that the court a quo acted whimsically or capriciously as to amount to
excess or lack of jurisdiction in issuing the questioned orders, but acted precisely in
compliance with the mandatory provisions of Sec. 7, Act 3135 and PD 385, the respondent
Court of Appeals erred in acting on the petition for certiorari, which is intended to correct
defects of jurisdiction solely and not to correct errors of procedure or matters in the court a
quo's findings or conclusions (Ilacad vs. Court of Appeals, 79 SCRA 301).
Is Knecht a proper intervenor?
In allowing Knecht to intervene in the proceedings for the issuance of the writ, respondent
Court of Appeals premised its ruling on his being the purchaser of the mortgaged property,
whose rights allegedly would be adversely affected by the foreclosure (CA decision, p. 85,
Rollo). This ruling, unfortunately, admits the validity of the Deed of Sale with Assumption of
Mortgage, executed between the Dulays and Knecht as against petitioner GSIS. There is,
however, no evidence that this sale was registered. It is well-settled that in case of a piece of
land titled under the Torrens system, it is the act of registration that transfers the ownership of
the land sold (Agbulos vs. Alberto, G.R. No. L-17483, July 31, 1982, 115 Phil. 797; Sec. 50,
Land Registration Act, Act No. 496, now Sec. 51, Property Registration Decree, P.D. No.
1529). Moreover, this sale was made without the prior consent of GSIS, in violation of condition
No. 7 of the Mortgage Contract (p. 149, Rollo) Annex "A", Comment). Well settled is the rule
that the consent of the creditor is indispensable for a valid novation consisting of a change of
debtor (Garcia vs. Khu Yeh Chiong, 38 OG 926).
In the absence of such registration and GSIS consent, Knecht was not validly substituted as
debtor (Mc Collough and Co., Inc. vs. Velasco, 46 Phil. 1), on the basis of which he could
assail and/or intervene in the proceedings for the issuance of the writ of possession. The sale
therefore did not in any manner bind GSIS which is obliged to recognize only the Dulays as
mortgagor. (Thus, the GSIS notice of arrearages was directed solely to the Dulays. Neither is
there any GSIS board resolution officially recognizing Knecht as substitute debtor). To rule
otherwise would be to defeat the statutory remedy of foreclosure. A wily mortgagor could easily
avoid and/or delay the transfer of possession of the foreclosed property to the purchaser by
secretly conveying the same to third persons, who would then assert ownership
rights/pecuniary interests thereon to the prejudice of the legitimate purchaser.
Foregoing considered, Knecht therefore acquired no legal right over the mortgaged property as
against the GSIS, and consequently is not a proper intervenor.
Assuming the validity of the sale, then Knecht would hold the title and possess the property as
the Dulays' transferee, i.e., any right he has to the property cannot be better than that of the
transferor Dulays. Thus, in the instant case, considering that the property has already been
sold at public auction, pursuant to an extrajudicial foreclosure, and the Dulays have not
contested the validity either of the foreclosure proceedings instituted against the mortgaged
properties, or the ex parte motion for the issuance of a writ of possession (p. 34, Rollo), the
only right transferrable to Knecht is the right to redeem the mortgaged properties within the

period prescribed by law. Knecht subscribed to this view, when he asserted a right to redeem
the foreclosed property, based on an alleged "deed of assignment of redemption rights, dated
November, 1974" (p. 134, Rollo). (See Alberto C. Roxas and Nenita de Guia vs. Mariano Buan,
et. al., G.R. No. 53798, November 8, 1988).
However, as there is likewise no evidence on record of the assignment, nor was it duly
annotated on TCT No. 17638, (covering the mortgaged property) Knecht is not validly
substituted as debtor, and the assignment is not effective against GSIS, which is again obliged
to recognize the redemption rights of the Dulays only:
There is no right conferred by law in favor of a buyer of mortgaged property to redeem the
same where the sale to such third party was not with the consent of the mortgaged creditor' (R.
Bonnevie vs. CA, G.R. No. L-4910, October 24, 1983, 125 SCRA 122, at p. 125).
Aside from the lack of legal interest, We also agree with petitioner that intervention is not
proper when there is no pending litigation.
The proceedings in which respondent Knecht sought to intervene is an ex-parte proceeding
pursuant to Sec. 7 of Act No. 3135, and, as pointed out by petitioner, is a "judicial proceeding
brought for the benefit of one party only, and without notice to, or consent by any person
adversely interested (Stella vs. Mosele, 19 N.E., 2d. 433,435, 299 III. App. 53; Imbrought v.
Parker, 83 N.E. 2d 42, 43, 336 III App. 124; City Nat. Bank & Trust Co. v. Aavis Hotel
Corporation, 280 III. App. 247), ... or a proceeding wherein relief is granted without an
opportunity for the person against whom the relief is sought to be heard" (Restatement, Torts,
S 674, p. 365, Rollo).
On the other hand, Rule 12, Sec. 2 of the Revised Rules of Court on Intervention provides:
SEC. 2. Intervention. - Any person may, before or during a trial be permitted by the court, in its
discretion, to intervene in an action, if he has legal interest in the matter in litigation, or in the
success of either of the parties, or an interest against both, or when he is so situated as to be
adversely affected by a distribution or other disposition of property in the custody of the court
or of an officer thereof' (emphasis supplied).
Intervention is defined as "a proceeding in a suit or action by which a third person is permitted
by the court to make himself a party, either joining plaintiff in claiming what is sought by the
complaint, or uniting with defendant in resisting the claims of plaintiff, or demanding something
adversely to both of them; the act or proceeding by which a third person becomes a party in a
suit pending between others; the admission, by leave of court, of a person not an original party
to pending legal proceedings, by which such person becomes a party thereto for the protection
of some right of interest alleged by him to be affected by such proceedings' (33 C.J., 477, cited
in Eulalio Garcia, et. al. vs. Sinforoso David, et. al., 67 Phil. 279, at p. 282).
Action, under Rule 2, Sec. 1, is defined as an ordinary suit in a court of justice, by which one
party prosecutes another for the enforcement or protection of a right, or the prevention or
redress of a wrong.
From the aforesaid definitions, it is clear that intervention contemplates a suit, and is therefore
exercisable during a trial and, as pointed out by petitioner is one which envisions the
introduction of evidence by the parties, leading to the rendition of the decision in the case (p.
363, Rollo). Very clearly, this concept is not that contemplated by Sec. 7 of Act No. 3135,
whereby, under settled jurisprudence, the Judge has to order the immediate issuance of a writ

of possession 1) upon the filing of the proper motion and 2) the approval of the corresponding
bond. The rationale for the mandate is to allow the purchaser to have possession of the
foreclosed property without delay, such possession being founded on his right of ownership. A
trial which entails delay is obviously out of the question.
Knecht's remedy, as correctly pointed out by petitioner GSIS, is a separate, distinct, and
independent suit, provided for in Section 8 of Act No. 3135:
And any question regarding the regularity and validity of the sale is left to be determined in a
subsequent proceeding as outlined in section 8. Such question is not to be raised as a
justification for opposing the issuance of the writ of possession, since, under the Act, the
proceeding for this is ex parte (De Gracia v. San Jose, et al., 94 Phil. 623, p. 12, Rollo).
Respondent Court of Appeals also enjoined the Court a quo from implementing the writ of
possession issued on May 27, 1975, ultimately depriving petitioner GSIS of its property rights
for over a decade, and effectively barring its right to dispose of and/or sell subject property in
order to generate much needed funds.
Section 2 of PD 385 makes it mandatory for the Court to place a government financial
institution in possession of the property. The injunction against the petitioner from taking
possession of the property rendered nugatory the provisions of the decree:

demonstrate the infirmity of the sale with assumption of mortgage, it is at once flagrant and
obvious from the records that Rene Knecht and Dulay Enterprises entered into the assumption
of mortgage in derogation of the original mortgage contract between GSIS and Dulay
Enterprises to the effect that any disposition, transfer or encumbrance of the properties must
be made with the prior written consent of the mortgagee (Annex F, Complaint, p. 116, Record).
Now, had not the appellant and conformity of the mortgagee GSIS, the course of events and
proceedings would have necessarily taken an entirely different path.
Foreclosure was clearly in order and the GSIS had a perfect right to protect its investment it
appearing that the first loan granted to the Dulay spouses was granted in 1968 yet and the
auction sale was conducted more than six (6) years thereafter, or on November 5, 1974. The
presumption of regularity of the foreclosure proceedings and subsequent proceedings as well
as the consolidation of ownership by the GSIS over the property has not been overturned by
appellant.
x x x (pp. 9-10).
ACCORDINGLY, the petition is hereby granted, and the assailed decision of the respondent
Court of Appeals, dated October 13, 1975, as well as its Resolution, dated December 8, 1975
are hereby reversed and set aside.
Further, private respondent Rene Knecht is directed:

SECTION 2. No restraining order, temporary or permanent injunction shall be issued by the

court against any government financial institution in any action taken by such institution in
compliance with the mandatory foreclosure provided in Section 1 hereof, whether such
restraining order, temporary or permanent injunction is sought by the borrower(s) or any third
party or parties, except after due hearing in which it is established by the borrower and
admitted by the government financial institution concerned that twenty percent (20%) of the
outstanding arrearages has been paid after the filing of foreclosure proceedings.
x

1.) to immediately turn over to the petitioner GSIS the possession of the property covered by
TCT No. 19836 (formerly TCT No. 17638). The Armed Forces of the Philippines is hereby
directed to place petitioner in possession and control of the properties, without any further
delay, pursuant to Sec. 4 of PD No. 385, 2.) to render an accounting of all the revenues
derived from the operations thereof, from November 5, 1974, the date when petitioner
extrajudicial foreclosure sale and 3.) to deliver to petitioner all revenues on hand as of turnover of premises to GSIS.

x.
This decision is immediately executory.

(See T. Lamagan vs. Hon. R. de la Cruz and C. O. Follosco, supra; and S. E. Bimeda vs. A.
Perez and Hon. J. T. Surtida, supra) likewise specially noting the provisions of the 13th
Whereas Clause, which state:

SO ORDERED.

WHEREAS, it has been shown by the experience of government financial institutions that in
instances where extrajudicial foreclosure on large loans is successfully pursued, the assets,
aside from land, that form part of the foreclosed collaterals, including buildings, machinery,
equipment, materials, furniture and fixtures, are usually pilfered or lost rendering it necessary
that the foreclosing government creditor have a writ of possession issued in its favor without
delay after the foreclosure auction sale. (Emphasis ours)
As regards the validity of the foreclosure sale, this matter has been resolved in the decision of
the Court of Appeals in CA-G.R. No. Civil Case No. 08858, (promulgated March 15, 1988) (P.
695, Rollo) which affirmed the decision of the lower court dismissing the action for annulment
of foreclosure, separately filed by Knecht:
There was no fraudulent inducement committed by the GSIS on the appellant and the
foreclosure sale was valid. Contrary to appellant's narrow view, Manuel Dulay himself, in
Annex Q of the basic complaint, requested for the deferment of the payment of the principal
and the interests of his loan and this alone is indicative that Dulay was then in arrears. To

27) ALFREDO SAJONAS and CONCHITA SAJONAS, petitioners, vs. THE COURT OF
APPEALS, DOMINGO A. PILARES, SHERIFF ROBERTO GARCIA OF QUEZON CITY and
REGISTER OF DEEDS OF MARIKINA, respondents.
DECISION
TORRES, JR., J.:
A word or group of words conveys intentions. When used truncatedly, its meaning disappears
and breeds conflict. Thus, it is written - By thy words shalt thou be justified, and by thy words
shalt thou be condemned. (Matthew, 12:37)

Construing the new words of a statute separately is the raison detre of this appeal.
Essentially, the case before us is for cancellation of the inscription of a Notice of Levy on
Execution from a certificate of Title covering a parcel of real property. The inscription was
caused to be made by the private respondent on Transfer Certificate of Title No. N-79073 of
the Register of Deeds of Marikina, issued in the name of the spouses Ernesto B. Uychocde
and Lucita Jarin, and was later carried over to and annotated on Transfer Certificate of Title
No. N-109417 of the same registry, issued in the name of the spouses Alfredo Sajonas and
Conchita R. Sajonas, who purchased the parcel of land from the Uychocdes, and are now the
petitioners in this case.
The facts are not disputed, and are hereby reproduced as follows:

The Sajonases filed their complaint[2] in the Regional Trial Court of Rizal, Branch 71, against
Domingo Pilares, the judgment creditor of the Uychocdes. The relevant portion of the
complaint alleges:
7. That at the time the notice of levy was annotated by the defendant, the Uychocde spouses,
debtors of the defendant, have already transferred, conveyed and assigned all their title, rights
and interests to the plaintiffs and there was no more title, rights or interests therein which the
defendant could levy upon;
8. That the annotation of the levy on execution which was carried over to the title of said
plaintiffs is illegal and invalid and was made in utter bad faith, in view of the existence of the
Adverse Claim annotated by the plaintiffs on the corresponding title of the Uychocde spouses;

On September 22, 1983, the spouses Ernesto Uychocde and Lucita Jarin agreed to sell a
parcel of residential land located in Antipolo, Rizal to the spouses Alfredo Sajonas and
Conchita R. Sajonas on installment basis as evidenced by a Contract to Sell dated September
22, 1983. The property was registered in the names of the Uychocde spouses under TCT No.
N-79073 of the Register of Deeds of Marikina, Rizal. On August 27, 1984, the Sajonas couple
caused the annotation of an adverse claim based on the said Contract to Sell on the title of the
subject property, which was inscribed as Entry No. 116017. Upon full payment of the purchase
price, the Uychocdes executed a Deed of Sale involving the property in question in favor of the
Sajonas couple on September 4, 1984. The deed of absolute sale was registered almost a
year after, or on August 28, 1985.

9. That a demand was made by the plaintiffs upon the defendant Domingo A. Pilares, to cause
the cancellation of the said notice of levy but the latter, without justifiable reason and with the
sole purpose of harassing and embarrassing the plaintiffs ignored and refused plaintiffs
demand;

Meanwhile, it appears that Domingo Pilares (defendant-appellant) filed Civil Case No. Q-28850
for collection of sum of money against Ernesto Uychocde. On June 25, 1980, a Compromise
Agreement was entered into by the parties in the said case under which Ernesto Uychocde
acknowledged his monetary obligation to Domingo Pilares amounting to P27,800 and agreed
to pay the same in two years from June 25, 1980. When Uychocde failed to comply with his
undertaking in the compromise agreement, defendant-appellant Pilares moved for the
issuance of a writ of execution to enforce the decision based on the compromise agreement,
which the court granted in its order dated August 3, 1982. Accordingly, a writ of execution was
issued on August 12, 1982 by the CFI of Quezon City where the civil case was pending.
Pursuant to the order of execution dated August 3, 1982, a notice of levy on execution was
issued on February 12, 1985. On February 12, 1985, defendant sheriff Roberto Garcia of
Quezon City presented said notice of levy on execution before the Register of Deeds of
Marikina and the same was annotated at the back of TCT No. 79073 as Entry No. 123283.

Pilares filed his answer with compulsory counterclaim[4] on March 8, 1986, raising special and
affirmative defenses, the relevant portions of which are as follows:

When the deed of absolute sale dated September 4 1984 was registered on August 28, 1985,
TCT No. N-79073 was cancelled and in lieu thereof, TCT No. N-109417 was ssued in the
name of the Sajonas couple. The notice of levy on execution annotated by defendant sheriff
was carried over to the new title. On October 21, 1985, the Sajonas couple filed a Third Party
Claim with the sheriff of Quezon City, hence the auction sale of the subject property did not
push through as scheduled.
On January 10, 1986, the Sajonas spouses demanded the cancellation of the notice of levy on
execution upon defendant-appellant Pilares, through a letter to their lawyer, Atty. Melchor
Flores. Despite said demand, defendant-appellant Pilares refused to cause the cancellation of
said annotation. In view thereof, plaintiffs-appellees filed this complaint dated January 11, 1986
on February 5, 1986.[1]

10. That in view of the neglect, failure and refusal of the defendant to cause the cancellation of
the notice of levy on execution, the plaintiffs were compelled to litigate and engage the
services of the undersigned counsel, to protect their rights and interests, for which they agreed
to pay attorneys fees in the amount of P10,000 and appearance fees of P500 per day in court.
[3]

10. Plaintiff has no cause of action against herein defendants;

11. Assuming, without however admitting that they filed an adverse claim against the property
covered by TCT No. 79073 registered under the name of spouses Ernesto Uychocde on
August 27, 1984, the same ceases to have any legal force and effect (30) days thereafter
pursuant to Section 70 of P.D. 1529;
12. The Notice of Levy annotated at the back of TCT No. 79073 being effected pursuant to the
Writ of Execution dated August 31, 1982, duly issued by the CFI (now RTC) of Quezon City
proceeding from a decision rendered in Civil Case No. 28859 in favor of herein defendant
against Ernesto Uychocde, is undoubtedly proper and appropriate because the property is
registered in the name of the judgment debtor and is not among those exempted from
execution;
13. Assuming without admitting that the property subject matter of this case was in fact sold by
the registered owner in favor of the herein plaintiffs, the sale is the null and void (sic) and
without any legal force and effect because it was done in fraud of a judgment creditor, the
defendant Pilares.[5]
Pilares likewise sought moral and exemplary damages in a counterclaim against the Sajonas
spouses. The parties appeared at pre-trial proceedings on January 21, 1987,[6] after which,
trial on the merits ensued.

The trial court rendered its decision on February 15, 1989.[7] It found in favor of the Sajonas
couple, and ordered the cancellation of the Notice of Levy from Transfer Certificate of Title No.
N-109417.
The court a quo stated, thus:
After going over the evidence presented by the parties, the court finds that although the title of
the subject matter of the Notice of Levy on Execution was still in the name of the Spouses
Uychocde when the same was annotated on the said title, an earlier Affidavit of Adverse Claim
was annotated on the same title by the plaintiffs who earlier bought said property from the
Uychocdes.

The Sajonas couple are now before us, on a Petition for Review on Certiorari[11], praying inter
alia to set aside the Court of Appeals decision, and to reinstate that of the Regional Trial Court.
Private respondent filed his Comment[12] on March 5, 1992, after which, the parties were
ordered to file their respective Memoranda. Private respondent complied thereto on April 27,
1994[13], while petitioners were able to submit their Memorandum on September 29, 1992.[14]
Petitioner assigns the following as errors of the appellate court, to wit:
I

It is a well settled rule in this jurisdiction (Guidote vs. Maravilla, 48 Phil. 442) that actual notice
of an adverse claim is equivalent to registration and the subsequent registration of the Notice
of Levy could not have any legal effect in any respect on account of prior inscription of the
adverse claim annotated on the title of the Uychocdes.

THE LOWER COURT ERRED IN HOLDING THAT THE RULE ON THE 30-DAY PERIOD FOR
ADVERSE CLAIM UNDER SECTION 70 OF P.D. NO. 1529 IS ABSOLUTE INASMUCH AS IT
FAILED TO READ OR CONSTRUE THE PROVISION IN ITS ENTIRETY AND TO
RECONCILE THE APPARENT INCONSISTENCY WITHIN THE PROVISION IN ORDER TO
GIVE EFFECT TO IT AS A WHOLE.

xxx xxx xxx

II

On the issue of whether or not plaintiffs are buyers in good faith of the property of the spouses
Uychocde even notwithstanding the claim of the defendant that said sale executed by the
spouses was made in fraud of creditors, the Court finds that the evidence in this instance is
bare of any indication that said plaintiffs as purchasers had notice beforehand of the claim of
the defendant over said property or that the same is involved in a litigation between said
spouses and the defendant. Good faith is the opposite of fraud and bad faith, and the
existence of any bad faith must be established by competent proof.[8] (Cai vs. Henson, 51 Phil
606)

THE LOWER COURT ERRED IN INTERPRETING SECTION 70 OF P.D. NO. 1529 IN SUCH
WISE ON THE GROUND THAT IT VIOLATES PETITIONERS SUBSTANTIAL RIGHT TO DUE
PROCESS.

xxx xxx xxx

In view of the foregoing, the Court renders judgment in favor of the plaintiffs and against the
defendant Pilares, as follows:
1. Ordering the cancellation of the Notice of Levy on Execution annotated on Transfer
Certificate of Title No. N-109417.
2. Ordering said defendant to pay the amount of P5,000 as attorneys fees.
3. Dismissing the Counterclaim interposed by said defendant.

Primarily, we are being asked to ascertain who among the parties in suit has a better right over
the property in question. The petitioners derive their claim from the right of ownership arising
from a perfected contract of absolute sale between them and the registered owners of the
property, such right being attested to by the notice of adverse claim[15] annotated on TCT No.
N-79073 as early as August 27, 1984. Private respondent on the other hand, claims the right to
levy on the property, and have it sold on execution to satisfy his judgment credit, arising from
Civil Case No. Q-28850[16] against the Uychocdes, from whose title, petitioners derived their
own.
Concededly, annotation of an adverse claim is a measure designed to protect the interest of a
person over a piece of real property where the registration of such interest or right is not
otherwise provided for by the Land Registration Act or Act 496 (now P.D. 1529 or the Property
Registration Decree), and serves a warning to third parties dealing with said property that
someone is claiming an interest on the same or a better right than that of the registered owner
thereof. Such notice is registered by filing a sworn statement with the Register of Deeds of the
province where the property is located, setting forth the basis of the claimed right together with
other dates pertinent thereto.[17]

Said defendant is likewise ordered to pay the costs.

Dissatisfied, Pilares appealed to the Court of Appeals[9], assigning errors on the part of the
lower court. The appellate court reversed the lower courts decision, and upheld the annotation
of the levy on execution on the certificate of title, thus:
WHEREFORE, the decision of the lower court dated February 15, 1989 is reversed and set
aside and this complaint is dismissed.
Costs against the plaintiffs-appellees."[10]

The registration of an adverse claim is expressly recognized under Section 70 of P.D. No.
1529.*
Noting the changes made in the terminology of the provisions of the law, private respondent
interpreted this to mean that a Notice of Adverse Claim remains effective only for a period of
30 days from its annotation, and does not automatically lose its force afterwards. Private
respondent further maintains that the notice of adverse claim was annotated on August 27,
1984, hence, it will be effective only up to September 26, 1984, after which it will no longer
have any binding force and effect pursuant to Section 70 of P.D. No. 1529. Thus, the sale in
favor of the petitioners by the Uychocdes was made in order to defraud their creditor (Pilares),

as the same was executed subsequent to their having defaulted in the payment of their
obligation based on a compromise agreement.[18]
The respondent appellate court upheld private respondents theory when it ruled:
The above stated conclusion of the lower court is based on the premise that the adverse claim
filed by plaintiffs-appellees is still effective despite the lapse of 30 days from the date of
registration. However, under the provisions of Section 70 of P.D. 1529, an adverse claim shall
be effective only for a period of 30 days from the date of its registration. The provision of this
Decree is clear and specific.
xxx xxx xxx
It should be noted that the adverse claim provision in Section 110 of the Land Registration Act
(Act 496) does not provide for a period of effectivity of the annotation of an adverse claim. P.D.
No. 1529, however, now specifically provides for only 30 days. If the intention of the law was
for the adverse claim to remain effective until cancelled by petition of the interested party, then
the aforecited provision in P.D. No. 1529 stating the period of effectivity would not have been
inserted in the law.
Since the adverse claim was annotated On August 27, 1984, it was effective only until
September 26, 1984. Hence, when the defendant sheriff annotated the notice of levy on
execution on February 12, 1985, said adverse claim was already ineffective. It cannot be said
that actual or prior knowledge of the existence of the adverse claim on the Uychocdes title is
equivalent to registration inasmuch as the adverse claim was already ineffective when the
notice of levy on execution was annotated. Thus, the act of defendant sheriff in annotating the
notice of levy on execution was proper and justified.
The appellate court relied on the rule of statutory construction that Section 70 is specific and
unambiguous and hence, needs no interpretation nor construction.[19] Perforce, the appellate
court stated, the provision was clear enough to warrant immediate enforcement, and no
interpretation was needed to give it force and effect. A fortiori, an adverse claim shall be
effective only for a period of thirty (30) days from the date of its registration, after which it shall
be without force and effect. Continuing, the court further stated;
. . . clearly, the issue now has been reduced to one of preference- which should be preferred
between the notice of levy on execution and the deed of absolute sale. The Deed of Absolute
Sale was executed on September 4, 1984, but was registered only on August 28, 1985, while
the notice of levy on execution was annotated six (6) months prior to the registration of the sale
on February 12, 1985.
In the case of Landig vs. U.S. Commercial Co., 89 Phil 638 it was held that where a sale is
recorded later than an attachment, although the former is of an earlier date, the sale must give
way to the attachment on the ground that the act of registration is the operative act to affect the
land. A similar ruling was restated in Campillo vs. Court of Appeals (129 SCRA 513).
xxx xxx xxx
The reason for these rulings may be found in Section 51 of P.D. 1529, otherwise known as the
Property Registration Decree, which provides as follows:

Section 51. Conveyance and other dealings by the registered owner.- An owner of registered
land may convey, mortgage, lease, charge, or otherwise deal with the same in accordance with
existing laws. He may use such forms of deeds, mortgages, leases or other voluntary
instruments as are sufficient in law. But no deed, mortgage, lease or other voluntary
instrument, except a will purporting to convey or affect registered land shall take effect as a
conveyance or bind the land, but shall operate only as a contract between the parties and as
evidence of authority to the Register of Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land in so far as third
persons are concerned, and in all cases under the Decree, the registration shall be made in
the office of the Register of Deeds for the province or city where the land lies. (Italics supplied
by the lower court.)
Under the Torrens system, registration is the operative act which gives validity to the transfer
or creates a lien upon the land. A person dealing with registered land is not required to go
behind the register to determine the condition of the property. He is only charged with notice of
the burdens on the property which are noted on the face of the register or certificate of title.[20]
Although we have relied on the foregoing rule, in many cases coming before us, the same,
however, does not fit in the case at bar. While it is the act of registration which is the operative
act which conveys or affects the land insofar as third persons are concerned, it is likewise true,
that the subsequent sale of property covered by a Certificate of Title cannot prevail over an
adverse claim, duly sworn to and annotated on the certificate of title previous to the sale.[21]
While it is true that under the provisions of the Property Registration Decree, deeds of
conveyance of property registered under the system, or any interest therein only take effect as
a conveyance to bind the land upon its registration, and that a purchaser is not required to
explore further than what the Torrens title, upon its face, indicates in quest for any hidden
defect or inchoate right that may subsequently defeat his right thereto, nonetheless, this rule is
not absolute. Thus, one who buys from the registered owner need not have to look behind the
certificate of title, he is, nevertheless, bound by the liens and encumbrances annotated
thereon. One who buys without checking the vendors title takes all the risks and losses
consequent to such failure.[22]
In PNB vs. Court of Appeals, we held that the subsequent sale of the property to the De Castro
spouses cannot prevail over the adverse claim of Perez, which was inscribed on the banks
certificate of title on October 6, 1958. That should have put said spouses on notice, and they
can claim no better legal right over and above that of Perez. The TCT issued in the spouses
names on July, 1959 also carried the said annotation of adverse claim. Consequently, they are
not entitled to any interest on the price they paid for the property.[23]
Then again, in Gardner vs. Court of Appeals, we said that the statement of respondent court in
its resolution of reversal that until the validity of an adverse claim is determined judicially, it
cannot be considered a flaw in the vendors title contradicts the very object of adverse claims.
As stated earlier, the annotation of an adverse claim is a measure designed to protect the
interest of a person over a piece of real property, and serves as a notice and warning to third
parties dealing with said property that someone is claiming an interest on the same or has a
better right than the registered owner thereof. A subsequent sale cannot prevail over the
adverse claim which was previously annotated in the certificate of title over the property.[24]
The question may be posed, was the adverse claim inscribed in the Transfer Certificate of Title
No. N-109417 still in force when private respondent caused the notice of levy on execution to

be registered and annotated in the said title, considering that more than thirty days had already
lapsed since it was annotated? This is a decisive factor in the resolution of this instant case.

discretion. Before the lapse of thirty days, the claimant may withdraw his adverse claim by
filing with the Register of Deeds a sworn petition to that effect. (Italics ours)

If the adverse claim was still in effect, then respondents are charged with knowledge of preexisting interest over the subject property, and thus, petitioners are entitled to the cancellation
of the notice of levy attached to the certificate of title.

In construing the law aforesaid, care should be taken that every part thereof be given effect
and a construction that could render a provision inoperative should be avoided, and
inconsistent provisions should be reconciled whenever possible as parts of a harmonious
whole.[25] For taken in solitude, a word or phrase might easily convey a meaning quite
different from the one actually intended and evident when a word or phrase is considered with
those with which it is associated.[26] In ascertaining the period of effectivity of an inscription of
adverse claim, we must read the law in its entirety. Sentence three, paragraph two of Section
70 of P.D. 1529 provides:

For a definitive answer to this query, we refer to the law itself. Section 110 of Act 496 or the
Land Registration Act reads:
Sec. 110. Whoever claims any part or interest in registered lands adverse to the registered
owner, arising subsequent to the date of the original registration, may, if no other provision is
made in this Act for registering the same, make a statement in writing setting forth fully his
alleged right or interest, and how or under whom acquired, and a reference to the volume and
page of the certificate of title of the registered owner, and a description of the land in which the
right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimants residence,
and designate a place at which all notices may be served upon him. The statement shall be
entitled to registration as an adverse claim, and the court, upon a petition of any party in
interest, shall grant a speedy hearing upon the question of the validity of such adverse claim
and shall enter such decree therein as justice and equity may require. If the claim is adjudged
to be invalid, the registration shall be cancelled. If in any case, the court after notice and
hearing shall find that a claim thus registered was frivolous or vexatious, it may tax the adverse
claimant double or treble the costs in its discretion.
The validity of the above-mentioned rules on adverse claims has to be reexamined in the light
of the changes introduced by P.D. 1529, which provides:
Sec. 70 Adverse Claim- Whoever claims any part or interest in registered land adverse to the
registered owner, arising subsequent to the date of the original registration, may, if no other
provision is made in this decree for registering the same, make a statement in writing setting
forth fully his alleged right or interest, and how or under whom acquired, a reference to the
number of certificate of title of the registered owner, the name of the registered owner, and a
description of the land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimants residence,
and a place at which all notices may be served upon him. This statement shall be entitled to
registration as an adverse claim on the certificate of title. The adverse claim shall be effective
for a period of thirty days from the date of registration. After the lapse of said period, the
annotation of adverse claim may be cancelled upon filing of a verified petition therefor by the
party in interest: Provided, however, that after cancellation, no second adverse claim based on
the same ground shall be registered by the same claimant.
Before the lapse of thirty days aforesaid, any party in interest may file a petition in the Court of
First Instance where the land is situated for the cancellation of the adverse claim, and the court
shall grant a speedy hearing upon the question of the validity of such adverse claim, and shall
render judgment as may be just and equitable. If the adverse claim is adjudged to be invalid,
the registration thereof shall be ordered cancelled. If, in any case, the court, after notice and
hearing shall find that the adverse claim thus registered was frivolous, it may fine the claimant
in an amount not less than one thousand pesos, nor more than five thousand pesos, in its

The adverse claim shall be effective for a period of thirty days from the date of registration.
At first blush, the provision in question would seem to restrict the effectivity of the adverse
claim to thirty days. But the above provision cannot and should not be treated separately, but
should be read in relation to the sentence following, which reads:
After the lapse of said period, the annotation of adverse claim may be cancelled upon filing of
a verified petition therefor by the party in interest.
If the rationale of the law was for the adverse claim to ipso facto lose force and effect after the
lapse of thirty days, then it would not have been necessary to include the foregoing caveat to
clarify and complete the rule. For then, no adverse claim need be cancelled. If it has been
automatically terminated by mere lapse of time, the law would not have required the party in
interest to do a useless act.
A statutes clauses and phrases must not be taken separately, but in its relation to the statutes
totality. Each statute must, in fact, be construed as to harmonize it with the pre-existing body of
laws. Unless clearly repugnant, provisions of statutes must be reconciled. The printed pages of
the published Act, its history, origin, and its purposes may be examined by the courts in their
construction.[27] An eminent authority on the subject matter states the rule candidly:
A statute is passed as a whole and not in parts or sections, and is animated by one general
purpose and intent. Consequently, each part or section should be construed in connection with
every other part or section so as to produce a harmonious whole. It is not proper to confine its
intention to the one section construed. It is always an unsafe way of construing a statute or
contract to divide it by a process of etymological dissection, into separate words, and then
apply to each, thus separated from the context, some particular meaning to be attached to any
word or phrase usually to be ascertained from the context.[28]
Construing the provision as a whole would reconcile the apparent inconsistency between the
portions of the law such that the provision on cancellation of adverse claim by verified petition
would serve to qualify the provision on the effectivity period. The law, taken together, simply
means that the cancellation of the adverse claim is still necessary to render it ineffective,
otherwise, the inscription will remain annotated and shall continue as a lien upon the property.
For if the adverse claim has already ceased to be effective upon the lapse of said period, its
cancellation is no longer necessary and the process of cancellation would be a useless
ceremony.[29]
It should be noted that the law employs the phrase may be cancelled, which obviously
indicates, as inherent in its decision making power, that the court may or may not order the

cancellation of an adverse claim, notwithstanding such provision limiting the effectivity of an

adverse claim for thirty days from the date of registration. The court cannot be bound by such
period as it would be inconsistent with the very authority vested in it. A fortiori, the limitation on
the period of effectivity is immaterial in determining the validity or invalidity of an adverse claim
which is the principal issue to be decided in the court hearing. It will therefore depend upon the
evidence at a proper hearing for the court to determine whether it will order the cancellation of
the adverse claim or not.[30]
To interpret the effectivity period of the adverse claim as absolute and without qualification
limited to thirty days defeats the very purpose for which the statute provides for the remedy of
an inscription of adverse claim, as the annotation of an adverse claim is a measure designed
to protect the interest of a person over a piece of real property where the registration of such
interest or right is not otherwise provided for by the Land Registration Act or Act 496 (now P.D.
1529 or the Property Registration Decree), and serves as a warning to third parties dealing
with said property that someone is claiming an interest or the same or a better right than the
registered owner thereof.[31]
The reason why the law provides for a hearing where the validity of the adverse claim is to be
threshed out is to afford the adverse claimant an opportunity to be heard, providing a venue
where the propriety of his claimed interest can be established or revoked, all for the purpose of
determining at last the existence of any encumbrance on the title arising from such adverse
claim. This is in line with the provision immediately following:
Provided, however, that after cancellation, no second adverse claim shall be registered by the
same claimant.

As lucidly observed by the trial court in the challenged decision:

True, the foregoing section provides that an adverse claim shall be effective for a period of
thirty days from the date of registration. Does this mean however, that the plaintiffs thereby lost
their right over the property in question? Stated in another, did the lapse of the thirty day period
automatically nullify the contract to sell between the plaintiffs and the Uychocdes thereby
depriving the former of their vested right over the property?
It is respectfully submitted that it did not.[33]
As to whether or not the petitioners are buyers in good faith of the subject property, the same
should be made to rest on the findings of the trial court. As pointedly observed by the appellate
court, there is no question that plaintiffs-appellees were not aware of the pending case filed by
Pilares against Uychocde at the time of the sale of the property by the latter in their favor. This
was clearly elicited from the testimony of Conchita Sajonas, wife of plaintiff, during crossexamination on April 21, 1988.[34]
ATTY. REYES
Q - Madam Witness, when Engr. Uychocde and his wife offered to you and your husband the
property subject matter of this case, they showed you the owners transfer certificate, is it not?
A - Yes, sir.
Q - That was shown to you the very first time that this lot was offered to you for sale?

Should the adverse claimant fail to sustain his interest in the property, the adverse claimant will
be precluded from registering a second adverse claim based on the same ground.

A - Yes.

It was held that validity or efficaciousness of the claim may only be determined by the Court
upon petition by an interested party, in which event, the Court shall order the immediate
hearing thereof and make the proper adjudication as justice and equity may warrant. And it is
only when such claim is found unmeritorious that the registration of the adverse claim may be
cancelled, thereby protecting the interest of the adverse claimant and giving notice and
warning to third parties.[32]

Q - After you were shown a copy of the title and after you were informed that they are desirous
in selling the same, did you and your husband decide to buy the same?

In sum, the disputed inscription of adverse claim on the Transfer Certificate of Title No. N79073 was still in effect on February 12, 1985 when Quezon City Sheriff Roberto Garcia
annotated the notice of levy on execution thereto. Consequently, he is charged with knowledge
that the property sought to be levied upon on execution was encumbered by an interest the
same as or better than that of the registered owner thereof. Such notice of levy cannot prevail
over the existing adverse claim inscribed on the certificate of title in favor of the petitioners.
This can be deduced from the pertinent provision of the Rules of Court, to wit:

A - Yes.

Section 16. Effect of levy on execution as to third persons- The levy on execution shall create a
lien in favor of the judgment creditor over the right, title and interest of the judgment debtor in
such property at the time of the levy, subject to liens or encumbrances then existing. (Italics
supplied)
To hold otherwise would be to deprive petitioners of their property, who waited a long time to
complete payments on their property, convinced that their interest was amply protected by the
inscribed adverse claim.

A - No, we did not decide right after seeing the title. Of course, we visited...
Q - No, you just answer my question. You did not immediately decide?

Q - When did you finally decide to buy the same?

A - After seeing the site and after verifying from the Register of Deeds in Marikina that it is free
from encumbrances, that was the time we decided.
Q - How soon after you were offered this lot did you verify the exact location and the
genuineness of the title, as soon after this was offered to you?
A - I think its one week after they were offered.[35]
A purchaser in good faith and for value is one who buys property of another without notice that
some other person has a right to or interest in such property and pays a full and fair price for
the same, at the time of such purchase, or before he has notice of the claims or interest of
some other person in the property.[36] Good faith consists in an honest intention to abstain

from taking any unconscientious advantage of another.[37] Thus, the claim of the private
respondent that the sale executed by the spouses was made in fraud of creditors has no basis
in fact, there being no evidence that the petitioners had any knowledge or notice of the debt of
the Uychocdes in favor of the private respondents, nor of any claim by the latter over the
Uychocdes properties or that the same was involved in any litigation between said spouses
and the private respondent. While it may be stated that good faith is presumed, conversely,
bad faith must be established by competent proof by the party alleging the same. Sans such
proof, the petitioners are deemed to be purchasers in good faith, and their interest in the
subject property must not be disturbed.

28) BENITA SALAO, assisted by her husband, GREGORIO MARCELO; ALMARIO ALCURIZA,
ARTURO ALCURIZA, OSCAR ALCURIZA and ANITA ALCURIZA, the latter two being minors
are represented by guardian ad litem, ARTURO ALCURIZA, plaintiffs-appellants,
vs.
JUAN S. SALAO, later substituted by PABLO P. SALAO, Administrator of the Intestate of JUAN
S. SALAO; now MERCEDES P. VDA. DE SALAO, ROBERTO P. SALAO, MARIA SALAO VDA.
DE SANTOS, LUCIANA P. SALAO, ISABEL SALAO DE SANTOS, and PABLO P. SALAO, as
successors-in-interest of the late JUAN S. SALAO, together with PABLO P. SALAO,
Administrator, defendants-appellants.

At any rate, the Land Registration Act (Property Registration Decree) guarantees to every
purchaser of registered land in good faith that they can take and hold the same free from any
and all prior claims, liens and encumbrances except those set forth on the Certificate of Title
and those expressly mentioned in the ACT as having been preserved against it. Otherwise, the
efficacy of the conclusiveness of the Certificate of Title which the Torrens system seeks to
insure would be futile and nugatory.[38]

Eusebio V. Navarro for plaintiffs-appellants.

ACCORDINGLY, the assailed decision of the respondent Court of Appeals dated October 17,
1991 is hereby REVERSED and SET ASIDE. The decision of the Regional Trial Court dated
February 15, 1989 finding for the cancellation of the notice of levy on execution from Transfer
Certificate of Title No. N-109417 is hereby REINSTATED.
The inscription of the notice of levy on execution on TCT No. N-109417 is hereby
CANCELLED.
Costs against private respondent.
SO ORDERED.

Nicolas Belmonte & Benjamin T. de Peralta for defendants-appellants.

AQUINO, J.:
This litigation regarding a forty-seven-hectare fishpond located at Sitio Calunuran, Hermosa,
Bataan involves the law of trusts and prescription. The facts are as follows:
The spouses Manuel Salao and Valentina Ignacio of Barrio Dampalit, Malabon, Rizal begot
four children named Patricio, Alejandra, Juan (Banli) and Ambrosia. Manuel Salao died in
1885. His eldest son, Patricio, died in 1886 survived by his only child. Valentin Salao.
There is no documentary evidence as to what, properties formed part of Manuel Salao's
estate, if any. His widow died on May 28, 1914. After her death, her estate was administered
by her daughter Ambrosia.
It was partitioned extrajudicially in a deed dated December 29, 1918 but notarized on May 22,
1919 (Exh. 21). The deed was signed by her four legal heirs, namely, her three children,
Alejandra, Juan and Ambrosia, and her grandson, Valentin Salao, in representation of his
deceased father, Patricio.
The lands left by Valentina Ignacio, all located at Barrio Dampalit were as follows:
Nature of Land
Area in
square meters
(1)
One-half interest in a fishpond which she had inherited from her parents, Feliciano
Ignacio and Damiana Mendoza, and the other half of which was owned by her co-owner,
Josefa Sta. Ana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,700
(2)

Fishpond inherited from her parents . . . . . . . . . . . . 7,418

(3)

Fishpond inherited from her parents . . . . . . . . . . . . . 6,989

(4)

Fishpond with a bodega for salt . . . . . . . . . . . . . . . . 50,469

(5) Fishpond with an area of one hectare, 12 ares and 5 centares purchased from Bernabe
and Honorata Ignacio by Valentina Ignacio on November 9, 1895 with a bodega for salt . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,205
(6)

Fishpond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000

(7)
One-half interest in a fishpond with a total area of 10,424 square meters, the other
half was owned by A. Aguinaldo . . . . . . . . . . . . . . . . . . . . . . . 5,217
(8)

Riceland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,454

(9)
Riceland purchased by Valentina Ignacio from Eduardo Salao on January 27, 1890
with a house and two camarins thereon . . . . . . . . . . . . . . . . . . 8,065
(10)
Riceland in the name of Ambrosia Salao, with an area of 11,678 square meters, of
which 2,173 square meters were sold to Justa Yongco . . . . . . . . . .9,505

Plaintiffs' version is that Valentin Salao and Alejandra Salao were included in that joint venture,
that the funds used were the earnings of the properties supposedly inherited from Manuel
Salao, and that those earnings were used in the acquisition of the Calunuran fishpond. There
is no documentary evidence to support that theory.
On the other hand, the defendants contend that the Calunuran fishpond consisted of lands
purchased by Juan Y. Salao, Sr. and Ambrosia Salao in 1905, 1906, 1907 and 1908 as, shown
in their Exhibits 8, 9, 10 and 13. But this point is disputed by the plaintiffs.
However, there can be no controversy as to the fact that after Juan Y. Salao, Sr. and Ambrosia
Salao secured a Torrens title for the Calunuran fishpond in 1911 they exercised dominical
rights over it to the exclusion of their nephew, Valentin Salao.
Thus, on December 1, 1911 Ambrosia Salao sold under pacto de retro for P800 the Calunuran
fishpond to Vicente Villongco. The period of redemption was one year. In the deed of sale
(Exh19) Ambrosia confirmed that she and her brother Juan were the dueos proindivisos of
the said pesqueria. On December 7, 1911 Villongco, the vendee a retro, conveyed the same
fishpond to Ambrosia by way of lease for an anual canon of P128 (Exh. 19-a).

TOTAL . . . . . . . . . . . . .. 179,022 square

meters
To each of the legal heirs of Valentina Ignacio was adjudicated a distributive share valued at
P8,135.25. In satisfaction of his distributive share, Valentin Salao (who was then already fortyeight years old) was given the biggest fishpond with an area of 50,469 square meters, a
smaller fishpond with an area of 6,989 square meters and the riceland with a net area of 9,905
square meters. Those parcels of land had an aggregate appraised value of P13,501 which
exceeded Valentin's distributive share. So in the deed of partition he was directed to pay to his
co-heirs the sum of P5,365.75. That arrangement, which was obviously intended to avoid the
fragmentation of the lands, was beneficial to Valentin.
In that deed of partition (Exh. 21) it was noted that "desde la muerte de Valentina Ignacio y
Mendoza, ha venido administrando sus bienes la referida Ambrosia Salao" "cuya
administracion lo ha sido a satisfaccion de todos los herederos y por designacion los mismos".
It was expressly stipulated that Ambrosia Salao was not obligated to render any accounting of
her administration "en consideracion al resultado satisfactorio de sus gestiones, mejoradas los
bienes y pagodas por ella las contribusiones (pages 2 and 11, Exh. 21).
By virtue of the partition the heirs became "dueos absolutos de sus respectivas propiedadas,
y podran inmediatamente tomar posesion de sus bienes, en la forma como se han distribuido
y llevado a cabo las adjudicaciones" (page 20, Exh. 21).
The documentary evidence proves that in 1911 or prior to the death of Valentina Ignacio her
two children, Juan Y. Salao, Sr. and Ambrosia Salao, secured a Torrens title, OCT No. 185 of
the Registry of Deeds of Pampanga, in their names for a forty-seven-hectare fishpond located
at Sitio Calunuran, Lubao, Pampanga (Exh. 14). It is also known as Lot No. 540 of the
Hermosa cadastre because that part of Lubao later became a part of Bataan.
The Calunuran fishpond is the bone of contention in this case.
Plaintiffs' theory is that Juan Y. Salao, Sr. and his sister Ambrosia had engaged in the fishpond
business. Where they obtained the capital is not shown in any documentary evidence.

After the fishpond was redeemed from Villongco or on June 8, 1914 Ambrosia and Juan sold it
under pacto de retro to Eligio Naval for the sum of P3,360. The period of redemption was also
one year (Exh. 20). The fishpond was later redeemed and Naval reconveyed it to the vendors
a retro in a document dated October 5, 1916 (Exh. 20-a).
The 1930 survey shown in the computation sheets of the Bureau of Lands reveals that the
Calunuran fishpond has an area of 479,205 square meters and that it was claimed by Juan
Salao and Ambrosia Salao, while the Pinanganacan fishpond (subsequently acquired by Juan
and Ambrosia) has an area of 975,952 square meters (Exh. 22).
Likewise, there is no controversy as to the fact that on May 27, 1911 Ambrosia Salao bought
for four thousand pesos from the heirs of Engracio Santiago a parcel of swampland planted to
bacawan and nipa with an area of 96 hectares, 57 ares and 73 centares located at Sitio Lewa,
Barrio Pinanganacan, Lubao, Pampanga (Exh. 17-d).
The record of Civil Case No. 136, General Land Registration Office Record No. 12144, Court
of First Instance of Pampanga shows that Ambrosia Salao and Juan Salao filed an application
for the registration of that land in their names on January 15, 1916. They alleged in their
petition that "han adquirido dicho terreno por partes iguales y por la compra a los herederos
del finado, Don Engracio Santiago" (Exh. 17-a).
At the hearing on October 26, 1916 before Judge Percy M. Moir, Ambrosia testified for the
applicants. On that same day Judge Moir rendered a decision, stating, inter alia, that the heirs
of Engracio Santiago had sold the land to Ambrosia Salao and Juan Salao. Judge Moir
"ordena la adjudicacion y registro del terreno solicitado a nombre de Juan Salao, mayor de
edad y de estado casado y de su esposa Diega Santiago y Ambrosia Salao, de estado soltera
y mayor de edad, en participaciones iguales" (Exh. 17-e).
On November 28, 1916 Judge Moir ordered the issuance of a decree for the said land. The
decree was issued on February 21, 1917. On March 12, 1917 Original Certificate of Title No.
472 of the Registry of Deeds of Pampanga was issued in the names of Juan Salao and
Ambrosia Salao.

That Pinanganacan or Lewa fishpond later became Cadastral Lot No. 544 of the Hermosa
cadastre (Exh. 23). It adjoins the Calunuran fishpond (See sketch, Exh. 1).
Juan Y. Salao, Sr. died on November 3, 1931 at the age of eighty years (Exh. C). His nephew,
Valentin Salao, died on February 9, 1933 at the age of sixty years according to the death
certificate (Exh. A. However, if according to Exhibit 21, he was forty-eight years old in 1918, he
would be sixty-three years old in 1933).
The intestate estate of Valentin Salao was partitioned extrajudicially on December 28, 1934
between his two daughters, Benita Salao-Marcelo and Victorina Salao-Alcuriza (Exh. 32). His
estate consisted of the two fishponds which he had inherited in 1918 from his grandmother,
Valentina Ignacio.
If it were true that he had a one-third interest in the Calunuran and Lewa fishponds with a total
area of 145 hectares registered in 1911 and 1917 in the names of his aunt and uncle,
Ambrosia Salao and Juan Y. Salao, Sr., respectively, it is strange that no mention of such
interest was made in the extrajudicial partition of his estate in 1934.
It is relevant to mention that on April 8, 1940 Ambrosia Salao donated to her grandniece,
plaintiff Benita Salao, three lots located at Barrio Dampalit with a total area of 5,832 square
meters (Exit. L). As donee Benita Salao signed the deed of donation.
On that occasion she could have asked Ambrosia Salao to deliver to her and to the children of
her sister, Victorina, the Calunuran fishpond if it were true that it was held in trust by Ambrosia
as the share of Benita's father in the alleged joint venture.
But she did not make any such demand. It was only after Ambrosia Salao's death that she
thought of filing an action for the reconveyance of the Calunuran fishpond which was allegedly
held in trust and which had become the sole property of Juan Salao y Santiago (Juani).
On September 30, 1944 or during the Japanese occupation and about a year before Ambrosia
Salao's death on September 14, 1945 due to senility (she was allegedly eighty-five years old
when she died), she donated her one-half proindiviso share in the two fishponds in question to
her nephew, Juan S. Salao, Jr. (Juani) At that time she was living with Juani's family. He was
already the owner of the the other half of the said fishponds, having inherited it from his father,
Juan Y. Salao, Sr. (Banli) The deed of denotion included other pieces of real property owned
by Ambrosia. She reserved for herself the usufruct over the said properties during her lifetime
(Exh. 2 or M).
The said deed of donation was registered only on April 5, 1950 (page 39, Defendants' Record
on Appeal).
The lawyer of Benita Salao and the Children of Victorina Salao in a letter dated January 26,
1951 informed Juan S. Salao, Jr. that his clients had a one-third share in the two fishponds and
that when Juani took possession thereof in 1945, he refused to give Benita and Victorina's
children their one-third share of the net fruits which allegedly amounted to P200,000 (Exh. K).
Juan S. Salao, Jr. in his answer dated February 6, 1951 categorically stated that Valentin
Salao did not have any interest in the two fishponds and that the sole owners thereof his father
Banli and his aunt Ambrosia, as shown in the Torrens titles issued in 1911 and 1917, and that
he Juani was the donee of Ambrosia's one-half share (Exh. K-1).

Benita Salao and her nephews and niece filed their original complaint against Juan S. Salao,
Jr. on January 9, 1952 in the Court of First Instance of Bataan (Exh. 36). They amended their
complaint on January 28, 1955. They asked for the annulment of the donation to Juan S.
Salao, Jr. and for the reconveyance to them of the Calunuran fishpond as Valentin Salao's
supposed one-third share in the 145 hectares of fishpond registered in the names of Juan Y.
Salao, Sr. and Ambrosia Salao.
Juan S. Salao, Jr. in his answer pleaded as a defense the indefeasibility of the Torrens title
secured by his father and aunt. He also invoked the Statute of Frauds, prescription and laches.
As counter-claims, he asked for moral damages amounting to P200,000, attorney's fees and
litigation expenses of not less than P22,000 and reimbursement of the premiums which he has
been paying on his bond for the lifting of the receivership Juan S. Salao, Jr. died in 1958 at the
age of seventy-one. He was substituted by his widow, Mercedes Pascual and his six children
and by the administrator of his estate.
In the intestate proceedings for the settlement of his estate the two fishponds in question were
adjudicated to his seven legal heirs in equal shares with the condition that the properties would
remain under administration during the pendency of this case (page 181, Defendants' Record
on Appeal).
After trial the trial court in its decision consisting of one hundred ten printed pages dismissed
the amended complaint and the counter-claim. In sixty-seven printed pages it made a
laborious recital of the testimonies of plaintiffs' fourteen witnesses, Gregorio Marcelo, Norberto
Crisostomo, Leonardo Mangali Fidel de la Cruz, Dionisio Manalili, Ambrosio Manalili,
Policarpio Sapno, Elias Manies Basilio Atienza, Benita Salao, Emilio Cagui Damaso de la
Pea, Arturo Alcuriza and Francisco Buensuceso, and the testimonies of defendants' six
witnesses, Marcos Galicia, Juan Galicia, Tiburcio Lingad, Doctor Wenceslao Pascual, Ciriaco
Ramirez and Pablo P. Salao. (Plaintiffs presented Regino Nicodemus as a fifteenth witness, a
rebuttal witness).
The trial court found that there was no community of property among Juan Y. Salao, Sr.,
Ambrosia Salao and Valentin Salao when the Calunuran and Pinanganacan (Lewa) lands were
acquired; that a co-ownership over the real properties of Valentina Ignacio existed among her
heirr after her death in 1914; that the co-ownership was administered by Ambrosia Salao and
that it subsisted up to 1918 when her estate was partitioned among her three children and her
grandson, Valentin Salao.
The trial court surmised that the co-ownership which existed from 1914 to 1918 misled the
plaintiffs and their witnesses and caused them to believe erroneously that there was a coownership in 1905 or thereabouts. The trial court speculated that if valentin had a hand in the
conversion into fishponds of the Calunuran and Lewa lands, he must have done so on a salary
or profit- sharing basis. It conjectured that Valentin's children and grandchildren were given by
Ambrosia Salao a portion of the earnings of the fishponds as a reward for his services or
because of Ambrosia's affection for her grandnieces.
The trial court rationalized that Valentin's omission during his lifetime to assail the Torrens titles
of Juan and Ambrosia signified that "he was not a co-owner" of the fishponds. It did not give
credence to the testimonies of plaintiffs' witnesses because their memories could not be
trusted and because no strong documentary evidence supported the declarations. Moreover,
the parties involved in the alleged trust were already dead.

It also held that the donation was validly executed and that even if it were void Juan S. Salao,
Jr., the donee, would nevertheless be the sole legal heir of the donor, Ambrosia Salao, and
would inherit the properties donated to him.
Both parties appealed. The plaintiffs appealed because their action for reconveyance was
dismissed. The defendants appealed because their counterclaim for damages was dismissed.
The appeals, which deal with factual and legal issues, were made to the Court of Appeals.
However, as the amounts involved exceed two hundred thousand pesos, the Court of Appeals
elevated the case to this Court in its resolution of Octoter 3, 1966 (CA-G.R. No. 30014-R).
Plaintiffs' appeal. An appellant's brief should contain "a subject index index of the matter in
the brief with a digest of the argument and page references" to the contents of the brief (Sec.
16 [a], Rule 46, 1964 Rules of Court; Sec. 17, Rule 48, 1940 Rules of Court).
The plaintiffs in their appellants' brief consisting of 302 pages did not comply with that
requirement. Their statements of the case and the facts do not contain "page references to the
record" as required in section 16[c] and [d] of Rule 46, formerly section 17, Rule 48 of the 1940
Rules of Court.
Lawyers for appellants, when they prepare their briefs, would do well to read and re-read
section 16 of Rule 46. If they comply strictly with the formal requirements prescribed in section
16, they might make a competent and luminous presentation of their clients' case and lighten
the burden of the Court.
What Justice Fisher said in 1918 is still true now: "The pressure of work upon this Court is so
great that we cannot, in justice to other litigants, undertake to make an examination of the
voluminous transcript of the testimony (1,553 pages in this case, twenty-one witnesses having
testified), unless the attorneys who desire us to make such examination have themselves
taken the trouble to read the record and brief it in accordance with our rules" (Palara vs.
Baguisi 38 Phil. 177, 181). As noted in an old case, this Court decides hundreds of cases
every year and in addition resolves in minute orders an exceptionally considerable number of
petitions, motions and interlocutory matters (Alzua and Arnalot vs. Johnson, 21 Phil. 308, 395;
See In re Almacen, L-27654, February 18, 1970, 31 SCRA 562, 573).
Plaintiffs' first assignment of error raised a procedural issue. In paragraphs 1 to 14 of their first
cause of action they made certain averments to establish their theory that Valentin Salao had a
one-third interest in the two fishponds which were registrered in the names of Juan Y. Salao,
Sr. (Banli) and Ambrosia Salao.
Juan S. Salao, Jr. (Juani) in his answer "specifically" denied each and all the allegations" in
paragraphs I to 10 and 12 of the first cause of action with the qualification that Original
certificates of Title Nos. 185 and 472 were issued "more than 37 years ago" in the names of
Juan (Banli) and Ambrosia under the circumstances set forth in Juan S. Salao, Jr.'s "positive
defenses" and "not under the circumstances stated in the in the amended complaint".
The plaintiffs contend that the answer of Juan S. Salao, Jr. was in effect tin admission of the
allegations in their first cause of action that there was a co-ownership among Ambrosia, Juan,
AIejandra and Valentin, all surnamed Salao, regarding the Dampalit property as early as 1904
or 1905; that the common funds were invested the acquisition of the two fishponds; that the
47-hectare Calunuran fishpond was verbally adjudicated to Valentin Salao in the l919 partition

and that there was a verbal stipulation to to register "said lands in the name only of Juan Y.
Salao".
That contention is unfounded. Under section 6, Rule 9 of the 1940 of Rules of Court the
answer should "contain either a specific dinial a statement of matters in accordance of the
cause or causes of action asserted in the complaint". Section 7 of the same rule requires the
defendant to "deal specificaly with each material allegation of fact the truth of wihich he does
not admit and, whenever practicable shall set forth the substance of the matters which he will
rely upon to support his denial". "Material averments in the complaint, other than those as to
the amount damage, shall be deemed admitted when specifically denied" (Sec. 8). "The
defendant may set forth set forth by answer as many affirmative defenses as he may have. All
grounds of defenses as would raise issues of fact not arising upon the preceding pleading
must be specifically pleaded" (Sec. 9).
What defendant Juan S. Salao, Jr. did in his answer was to set forth in his "positive defenses"
the matters in avoidance of plaintiffs' first cause of action which which supported his denials of
paragraphs 4 to 10 and 12 of the first cause of action. Obviously, he did so because he found it
impracticable to state pierceneal his own version as to the acquisition of the two fishponds or
to make a tedious and repetitious recital of the ultimate facts contradicting allegations of the
first cause of action.
We hold that in doing so he substantially complied with Rule 9 of the 1940 Rules of Court. It
may be noted that under the present Rules of Court a "negative defense is the specific denial
of t the material fact or facts alleged in the complaint essential to plaintiff's cause of causes of
action". On the other hand, "an affirmative defense is an allegation of new matter which, while
admitting the material allegations of the complaint, expressly or impliedly, would nevertheless
prevent or bar recovery by the plaintiff." Affirmative defenses include all matters set up "by of
confession and avoidance". (Sec. 5, Rule 6, Rules of Court).
The case of El Hogar Filipino vs. Santos Investments, 74 Phil. 79 and similar cases are
distinguishable from the instant case. In the El Hogar case the defendant filed a laconic
answer containing the statement that it denied "generally ans specifically each and every
allegation contained in each and every paragraph of the complaint". It did not set forth in its
answer any matters by way of confession and avoidance. It did not interpose any matters by
way of confession and avoidance. It did not interpose any affirmative defenses.
Under those circumstances, it was held that defendant's specific denial was really a general
denial which was tantamount to an admission of the allegations of the complaint and which
justified judgment on the pleadings. That is not the situation in this case.
The other nine assignments of error of the plaintiffs may be reduced to the decisive issue of
whether the Calunuran fishpond was held in trust for Valentin Salao by Juan Y. Salao, Sr. and
Ambrosia Salao. That issue is tied up with the question of whether plaintiffs' action for
reconveyance had already prescribed.
The plaintiffs contend that their action is "to enforce a trust which defendant" Juan S. Salao, Jr.
allegedly violated. The existence of a trust was not definitely alleged in plaintiffs' complaint.
They mentioned trust for the first time on page 2 of their appelants' brief.
To determine if the plaintiffs have a cause of action for the enforcement of a trust, it is
necessary to maek some exegesis on the nature of trusts (fideicomosis). Trusts in Anglo-

American jurisprudence were derived from the fideicommissa of the Roman law (Government
of the Philippine Islands vs. Abadilla, 46 Phil. 642, 646).

constructive trust is not a trust in the technical sense. (Gayondato vs. Treasurer of the P. I., 49
Phil. 244).

"In its technical legal sense, a trust is defined as the right, enforceable solely in equity, to the
beneficial enjoyment of property, the legal title to which is vested in another, but the word 'trust'
is frequently employed to indicate duties, relations, and responsibilities which are not strictly
technical trusts" (89 C.J.S. 712).

Not a scintilla of documentary evidence was presented by the plaintiffs to prove that there was
an express trust over the Calunuran fishpond in favor of Valentin Salao. Purely parol evidence
was offered by them to prove the alleged trust. Their claim that in the oral partition in 1919 of
the two fishponds the Calunuran fishpond was assigned to Valentin Salao is legally untenable.

A person who establishes a trust is called the trustor; one in whom confidence is reposed as
regards property for the benefit of another person is known as the trustee; and the person for
whose benefit the trust has been created is referred to as the beneficiary" (Art. 1440, Civil
Code). There is a fiduciary relation between the trustee and the cestui que trust as regards
certain property, real, personal, money or choses in action (Pacheco vs. Arro, 85 Phil. 505).

It is legally indefensible because the terms of article 1443 of the Civil Code (already in force
when the action herein was instituted) are peremptory and unmistakable: parol evidence
cannot be used to prove an express trust concerning realty.

"Trusts are either express or implied. Express trusts are created by the intention of the trustor
or of the parties. Implied trusts come into being by operation of law" (Art. 1441, Civil Code).
"No express trusts concerning an immovable or any interest therein may be proven by parol
evidence. An implied trust may be proven by oral evidence" (Ibid, Arts. 1443 and 1457).
"No particular words are required for the creation of an express trust, it being sufficient that a
trust is clearly intended" (Ibid, Art. 1444; Tuason de Perez vs. Caluag, 96 Phil. 981; Julio vs.
Dalandan, L-19012, October 30, 1967, 21 SCRA 543, 546). "Express trusts are those which
are created by the direct and positive acts of the parties, by some writing or deed, or will, or by
words either expressly or impliedly evincing an intention to create a trust" (89 C.J.S. 72).
"Implied trusts are those which, without being expressed, are deducible from the nature of the
transaction as matters of intent, or which are superinduced on the transaction by operation of
law as matter of equity, independently of the particular intention of the parties" (89 C.J.S. 724).
They are ordinarily subdivided into resulting and constructive trusts (89 C.J.S. 722).
"A resulting trust. is broadly defined as a trust which is raised or created by the act or
construction of law, but in its more restricted sense it is a trust raised by implication of law and
presumed to have been contemplated by the parties, the intention as to which is to be found in
the nature of their transaction, but not expressed in the deed or instrument of conveyance (89
C.J.S. 725). Examples of resulting trusts are found in articles 1448 to 1455 of the Civil Code.
(See Padilla vs. Court of Appeals, L-31569, September 28, 1973, 53 SCRA 168, 179; Martinez
vs. Grao 42 Phil. 35).
On the other hand, a constructive trust is -a trust "raised by construction of law, or arising by
operation of law". In a more restricted sense and as contra-distinguished from a resulting trust,
a constructive trust is "a trust not created by any words, either expressly or impliedly evincing a
direct intension to create a trust, but by the construction of equity in order to satisfy the
demands of justice." It does not arise "by agreement or intention, but by operation of law." (89
C.J.S. 726-727).
Thus, "if property is acquired through mistake or fraud, the person obtaining it is, by force of
law, considered a trustee of an implied trust for the benefit of the person from whom the
property comes" (Art. 1456, Civil Code).
Or "if a person obtains legal title to property by fraud or concealment, courts of equity will
impress upon the title a so-called constructive trust in favor of the defrauded party". Such a

Is plaintiffs' massive oral evidence sufficient to prove an implied trust, resulting or constructive,
regarding the two fishponds?
Plaintiffs' pleadings and evidence cannot be relied upon to prove an implied trust. The trial
court's firm conclusion that there was no community of property during the lifetime of Valentina;
Ignacio or before 1914 is substantiated by defendants' documentary evidence. The existence
of the alleged co-ownership over the lands supposedly inherited from Manuel Salao in 1885 is
the basis of plaintiffs' contention that the Calunuran fishpond was held in trust for Valentin
Salao.
But that co-ownership was not proven by any competent evidence. It is quite improbable
because the alleged estate of Manuel Salao was likewise not satisfactorily proven. The
plaintiffs alleged in their original complaint that there was a co-ownership over two hectares of
land left by Manuel Salao. In their amended complaint, they alleged that the co-ownership was
over seven hectares of fishponds located in Barrio Dampalit, Malabon, Rizal. In their brief they
alleged that the fishponds, ricelands and saltbeds owned in common in Barrio Dampalit had an
area of twenty-eight hectares, of which sixteen hectares pertained to Valentina Ignacio and
eleven hectares represented Manuel Salao's estate.
They theorized that the eleven hectares "were, and necessarily, the nucleus, nay the very root,
of the property now in litigation (page 6, plaintiffs-appellants' brief). But the eleven hectares
were not proven by any trustworthy evidence. Benita Salao's testimony that in 1918 or 1919
Juan, Ambrosia, Alejandra and Valentin partitioned twenty-eight hectares of lands located in
Barrio Dampalit is not credible. As noted by the defendants, Manuel Salao was not even
mentioned in plaintiffs' complaints.
The 1919 partition of Valentina Ignacio's estate covered about seventeen hectares of
fishponds and ricelands (Exh. 21). If at the time that partition was made there were eleven
hectares of land in Barrio Dampalit belonging to Manuel Salao, who died in 1885, those eleven
hectares would have been partitioned in writing as in the case of the seventeen hectares
belonging to Valentina Ignacio's estate.
It is incredible that the forty-seven-hectare Calunuran fishpond would be adjudicated to
Valentin Salao mere by by word of mouth. Incredible because for the partition of the seventeen
hectares of land left by Valentina Ignacio an elaborate "Escritura de Particion" consisting of
twenty-two pages had to be executed by the four Salao heirs. Surely, for the partition of one
hundred forty-five hectares of fishponds among three of the same Salao heirs an oral
adjudication would not have sufficed.

The improbability of the alleged oral partition becomes more evident when it is borne in mind
that the two fishponds were registered land and "the act of registration" is "the operative act"
that conveys and affects the land (Sec. 50, Act No. 496). That means that any transaction
affecting the registered land should be evidenced by a registerable deed. The fact that Valentin
Salao and his successors-in-interest, the plaintiffs, never bothered for a period of nearly forty
years to procure any documentary evidence to establish his supposed interest ox participation
in the two fishponds is very suggestive of the absence of such interest.
The matter may be viewed from another angle. As already stated, the deed of partition for
Valentina Ignacio's estate wag notarized in 1919 (Exh. 21). The plaintiffs assert that the two
fishponds were verbally partitioned also in 1919 and that the Calunuran fishpond was assigned
to Valentin Salao as his share.
Now in the partition of Valentina Ignacio's estate, Valentin was obligated to pay P3,355.25 to
Ambrosia Salao. If, according to the plaintiffs, Ambrosia administered the two fishponds and
was the custodian of its earnings, then it could have been easily stipulated in the deed
partitioning Valentina Ignacio's estate that the amount due from Valentin would just be
deducted by Ambrosia from his share of the earnings of the two fishponds. There was no such
stipulation. Not a shred of documentary evidence shows Valentin's participation in the two
fishponds.
The plaintiffs utterly failed to measure up to the yardstick that a trust must be proven by clear,
satisfactory and convincing evidence. It cannot rest on vague and uncertain evidence or on
loose, equivocal or indefinite declarations (De Leon vs. Molo-Peckson, 116 Phil. 1267, 1273).
Trust and trustee; establishment of trust by parol evidence; certainty of proof. Where a trust
is to be established by oral proof, the testimony supporting it must be sufficiently strong to
prove the right of the alleged beneficiary with as much certainty as if a document proving the
trust were shown. A trust cannot be established, contrary to the recitals of a Torrens title, upon
vague and inconclusive proof. (Syllabus, Suarez vs. Tirambulo, 59 Phil. 303).
Trusts; evidence needed to establish trust on parol testimony. In order to establish a trust in
real property by parol evidence, the proof should be as fully convincing as if the act giving rise
to the trust obligation were proven by an authentic document. Such a trust cannot be
established upon testimony consisting in large part of insecure surmises based on ancient
hearsay. (Syllabus, Santa Juana vs. Del Rosario 50 Phil. 110).
The foregoing rulings are good under article 1457 of the Civil Code which, as already noted,
allows an implied trust to be proven by oral evidence. Trustworthy oral evidence is required to
prove an implied trust because, oral evidence can be easily fabricated.
On the other hand, a Torrens title is generally a conclusive of the ownership of the land
referred to therein (Sec. 47, Act 496). A strong presumption exists. that Torrens titles were
regularly issued and that they are valid. In order to maintain an action for reconveyance, proof
as to the fiduciary relation of the parties must be clear and convincing (Yumul vs. Rivera and
Dizon, 64 Phil. 13, 17-18).
The real purpose of the Torrens system is, to quiet title to land. "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" (Legarda and Prieto vs.
Saleeby, 31 Phil. 590, 593).

There was no resulting trust in this case because there never was any intention on the part of
Juan Y. Salao, Sr., Ambrosia Salao and Valentin Salao to create any trust. There was no
constructive trust because the registration of the two fishponds in the names of Juan and
Ambrosia was not vitiated by fraud or mistake. This is not a case where to satisfy the demands
of justice it is necessary to consider the Calunuran fishpond " being held in trust by the heirs of
Juan Y. Salao, Sr. for the heirs of Valentin Salao.
And even assuming that there was an implied trust, plaintiffs' action is clearly barred by
prescription or laches (Ramos vs. Ramos, L-19872, December 3, 1974, 61 SCRA 284;
Quiniano vs. Court of Appeals, L-23024, May 31, 1971, 39 SCRA 221; Varsity Hills, Inc. vs.
Navarro, 9, February 29, 1972, 43 SCRA 503; Alzona vs. Capunitan and Reyes, 114 Phil. 377).
Under Act No. 190, whose statute of limitation would apply if there were an implied trust in this
case, the longest period of extinctive prescription was only ten year (Sec. 40; Diaz vs. Gorricho
and Aguado, 103 Phil. 261, 266).
The Calunuran fishpond was registered in 1911. The written extrajudicial demand for its
reconveyance was made by the plaintiffs in 1951. Their action was filed in 1952 or after the
lapse of more than forty years from the date of registration. The plaintiffs and their
predecessor-in-interest, Valentin Salao, slept on their rights if they had any rights at all.
Vigilanti prospiciunt jura or the law protects him who is watchful of his rights (92 C.J.S. 1011,
citing Esguerra vs. Tecson, 21 Phil. 518, 521).
"Undue delay in the enforcement of a right is strongly persuasive of a lack of merit in the claim,
since it is human nature for a person to assert his rights most strongly when they are
threatened or invaded". "Laches or unreasonable delay on the part of a plaintiff in seeking to
enforce a right is not only persuasive of a want of merit but may, according to the
circumstances, be destructive of the right itself." (Buenaventura vs. David, 37 Phil. 435, 440441).
Having reached the conclusion that the plaintiffs are not entitled to the reconveyance of the
Calunuran fishpond, it is no longer n to Pass upon the validity of the donation made by
Ambrosia Salao to Juan S. Salao, Jr. of her one-half share in the two fishponds The plaintiffs
have no right and personality to assil that donation.
Even if the donation were declared void, the plaintiffs would not have any successional rights
to Ambrosia's share. The sole legal heir of Ambrosia was her nephew, Juan, Jr., her nearest
relative within the third degree. Valentin Salao, if living in 1945 when Ambrosia died, would
have been also her legal heir, together with his first cousin, Juan, Jr. (Juani). Benita Salao, the
daughter of Valentin, could not represent him in the succession to the estate of Ambrosia since
in the collateral line, representation takes place only in favor of the children of brothers or
sisters whether they be of the full or half blood is (Art 972, Civil Code). The nephew excludes a
grandniece like Benita Salao or great-gandnephews like the plaintiffs Alcuriza (Pavia vs.
Iturralde 5 Phil. 176).
The trial court did not err in dismissing plaintiffs' complaint.
Defendants' appeal. The defendants dispute the lower court's finding that the plaintiffs filed
their action in good faith. The defendants contend that they are entitled to damages because
the plaintiffs acted maliciously or in bad faith in suing them. They ask for P25,000 attorneys
fees and litigation expenses and, in addition, moral damages.

We hold that defemdamts' appeal is not meritorious. The record shows that the plaintiffs
presented fifteen witnesses during the protracted trial of this case which lasted from 1954 to
1959. They fought tenaciously. They obviously incurred considerable expenses in prosecuting
their case. Although their causes of action turned out to be unfounded, yet the pertinacity and
vigor with which they pressed their claim indicate their sincerity and good faith.
There is the further consideration that the parties were descendants of common ancestors, the
spouses Manuel Salao and Valentina Ignacio, and that plaintiffs' action was based on their
honest supposition that the funds used in the acquisition of the lands in litigation were earnings
of the properties allegedly inherited from Manuel Salao.
Considering those circumstances, it cannot be concluded with certitude that plaintiffs' action
was manifestly frivolous or was primarily intended to harass the defendants. An award for
damages to the defendants does not appear to be just and proper.
The worries and anxiety of a defendant in a litigation that was not maliciously instituted are not
the moral damages contemplated in the law (Solis & Yarisantos vs. Salvador, L-17022, August
14, 1965, 14 SCRA 887; Ramos vs. Ramos, supra). The instant case is not among the cases
mentioned in articles 2219 and 2220 of the Civil Code wherein moral damages may be
recovered. Nor can it be regarded as analogous to any of the cases mentioned in those
articles.
The adverse result of an action does not per se make the act wrongful and subject the actor to
the payment of moral damages. The law could not have meant to impose a penalty on the right
to litigate; such right is so precious that moral damages may not be charged on those who may
exercise it erroneously. (Barreto vs. Arevalo, 99 Phil. 771. 779).
The defendants invoke article 2208 (4) (11) of the Civil Code which provides that attorney's
fees may be recovered "in case of a clearly unfounded civil action or proceeding against the
plaintiff" (defendant is a plaintiff in his counterclaim) or "in any other case where the court
deems it just and equitable" that attorney's fees should he awarded.
But once it is conceded that the plaintiffs acted in good faith in filing their action there would be
no basis for adjudging them liable to the defendants for attorney's fees and litigation expenses
(See Rizal Surety & Insurance Co., Inc. vs. Court of Appeals, L-23729, May 16, 1967, 20
SCRA 61).
It is not sound public policy to set a premium on the right to litigate. An adverse decision does
not ipso facto justify the award of attorney's fees to the winning party (Herrera vs. Luy Kim
Guan, 110 Phil. 1020, 1028; Heirs of Justiva vs. Gustilo, 61 O. G. 6959).

29) TEODORO ALMIROL, petitioner-appellant,

vs.
THE REGISTER OF DEEDS OF AGUSAN, respondent-appellee.
Tranquilino O. Calo, Jr. for petitioner-appellant.
Office of the Solicitor General for respondent-appellee.
CASTRO, J.:
On June 28, 1961 Teodoro Almirol purchased from Arcenio Abalo a parcel of land
situated in the municipality of Esperanza, province of Agusan, and covered by original
certificate of title P-1237 in the name of "Arcenio Abalo, married to Nicolasa M. Abalo."
Sometime in May, 1962 Almirol went to the office of the Register of Deeds of Agusan in Butuan
City to register the deed of sale and to secure in his name a transfer certificate of title.
Registration was refused by the Register of Deeds upon the following grounds, inter alia,
stated in his letter of May 21, 1962:
1. That Original Certificate of Title No. P-1237 is registered in the name of Arcenio Abalo,
married to Nicolasa M. Abalo, and by legal presumption, is considered conjugal property;
2. That in the sale of a conjugal property acquired after the effectivity of the New Civil Code it is
necessary that both spouses sign the document; but
3. Since, as in this case, the wife has already died when the sale was made, the surviving
husband can not dispose of the whole property without violating the existing law (LRC
Consulta No. 46 dated June 10, 1958).
To effect the registration of the aforesaid deed of absolute Sale, it is necessary that the
property be first liquidated and transferred in the name of the surviving spouse and the heirs of
the deceased wife by means of extrajudicial settlement or partition and that the consent of
such other heir or heirs must be procured by means of another document ratifying this sale
executed by their father.
In view of such refusal, Almirol went to the Court of First Instance of Agusan on a petition
for mandamus (sp. civ. case 151), to compel the Register of Deeds to register the deed of sale
and to issue to him the corresponding transfer certificate of title, and to recover P5,000 in
moral damages and P1,000 attorney's fees and expenses of litigation. It is Almirol's assertion
that it is but a ministerial duty of the respondent to perform the acts required of him, and that
he (Almirol) has no other plain, speedy and adequate remedy in the ordinary course of law.
In his answer with counterclaim for P10,000 damages, the respondent reiterated the
grounds stated in his letter of May 21, 1962, averred that the petitioner has "other legal, plain,

speedy and adequate remedy at law by appealing the decision of the respondent to the
Honorable Commissioner of Land Registration," and prayed for dismissal of the petition.
In its resolution of October 16, 1963 the lower court, declaring that "mandamus does not
lie . . . because the adequate remedy is that provided by Section 4 of Rep. Act 1151",
dismissed the petition, with costs against the petitioner.
Hence the present appeal by Almirol.
The only question of law tendered for resolution is whether mandamus will lie to compel
the respondent to register the deed of sale in question.
Although the reasons relied upon by the respondent evince a sincere desire on his part
to maintain inviolate the law on succession and transmission of rights over real properties,
these do not constitute legal grounds for his refusal to register the deed. Whether a document
is valid or not, is not for the register of deeds to determine; this function belongs properly to a
court of competent jurisdiction.1
Whether the document is invalid, frivolous or intended to harass, is not the duty of a
Register of Deeds to decide, but a court of competent jurisdiction. (Gabriel vs. Register of
Deeds of Rizal, et al., L-17956, Sept. 30, 1953).
. . . the supposed invalidity of the contracts of lease is no valid objection to their
registration, because invalidity is no proof of their non-existence or a valid excuse for denying
their registration. The law on registration does not require that only valid instruments shall be
registered. How can parties affected thereby be supposed to know their invalidity before they
become aware, actually or constructively, of their existence or of their provisions? If the
purpose of registration is merely to give notice, then questions regarding the effect or invalidity
of instruments are expected to be decided after, not before, registration. It must follow as a
necessary consequence that registration must first be allowed, and validity or effect litigated
afterwards. (Gurbax Singh Pablo & Co. vs. Reyes and Tantoco, 92 Phil. 182-183).
Indeed, a register of deeds is entirely precluded by section 4 of Republic Act 1151 from
exercising his personal judgment and discretion when confronted with the problem of whether
to register a deed or instrument on the ground that it is invalid. For under the said section,
when he is in doubt as to the proper step to be taken with respect to any deed or other
instrument presented to him for registration, all that he is supposed to do is to submit and
certify the question to the Commissioner of Land Registration who shall, after notice and
hearing, enter an order prescribing the step to be taken on the doubtful question. Section 4 of
R.A. 1151 reads as follows
Reference of doubtful matters to Commissioner of Land Registration. When the
Register of Deeds is in doubt with regard to the proper step to be taken or memorandum to be
made in pursuance of any deed, mortgage, or other instrument presented to him for
registration, or where any party in interest does not agree with the Register of Deeds with
reference to any such matter, the question shall be submitted to the Commissioner of Land
Registration either upon the certification of the Register of Deeds, stating the question upon
which he is in doubt, or upon the suggestion in writing by the party in interest; and thereupon
the Commissioner, after consideration of the matter shown by the records certified to him, and
in case of registered lands, after notice to the parties and hearing, shall enter an order
prescribing the step to be taken or memorandum to be made. His decision in such cases shall
be conclusive and binding upon all Registers of Deeds: Provided, further, That when a party in
interest disagrees with the ruling or resolution of the Commissioner and the issue involves a

question of law, said decision may be appealed to the Supreme Court within thirty days from
and after receipt of the notice thereof.
The foregoing notwithstanding, the court a quo correctly dismissed the petition for
mandamus. Section 4 abovequoted provides that "where any party in interest does not agree
with the Register of Deeds . . . the question shall be submitted to the Commissioner of Land
Registration," who thereafter shall "enter an order prescribing the step to be taken or
memorandum to be made," which shall be "conclusive and binding upon all Registers of
Deeds." This administrative remedy must be resorted to by the petitioner before he can have
recourse to the courts.
ACCORDINGLY, the Resolution of the lower court of October 16, 1969, is affirmed, at
petitioner's cost.
30) G.R. No. L-42805

August 31, 1987

THE TREASURER OF THE PHILIPPINES, petitioner,

vs.
THE COURT OF APPEALS and SPOUSES EDUARDO OCSON and NORA E. OCSON
respondents.
The petitioner asks us to reverse a decision of the respondent court affirming that of the trial
court holding the Assurance Fund subsidiarily liable for damages sustained by the private
respondents under the following established facts.
Sometime in 1965, a person Identifying himself as Lawaan Lopez offered to sell to the private
respondents a parcel of land located in Quezon City and consisting of 1,316.8 square meters,
which he claimed as his property. His asking price was P85.00 per square meter but after a
month's haggling the parties agreed on the reduced price of P76.00 per square meter. The
sale was deferred, however, because the prospective vendor said his certificate of title had
been burned in his house in Divisoria, and he would have to file a petition with the court of first
instance of Quezon City for a duplicate certificate of title. He did so and the petition was
granted after hearing without any opposition. Following the issuance of the new duplicate
certificate of title, the said person executed a deed of sale in favor of the private respondents,
who paid him the stipulated purchase price of P98,700.00 in full. The corresponding transfer
certificate of title was subsequently issued to them after cancellation of the duplicate certificate
in the name of Lawaan Lopez. 1
Trouble began two years later when another person, this time a woman, appeared and,
claiming to be the real Lawaan Lopez, filed a petition in the court of first instance of Quezon
City to declare as null and void the transfer of her land in favor of the private respondents, on
the ground that it had been made by an impostor. 2 After trial, the questioned deed of sale was
annulled, (together with the duplicate certificate of title issued to the impostor and the transfer
certificate of title in the name of the private respondents) and the real owner's duplicate
certificate of title was revalidated. 3 Neither the Solicitor General nor the private respondents
appealed the decision, but Lawaan Lopez did so, claiming that the defendants should have
been required to pay damages to her and the costs. The appeal was dismissed, with the
finding by Justices Jose Leuterio, Magno Gatmaitan and Luis B. Reyes of the Court of Appeals
that there was no collusion between the private respondents and the impostor. 4
Subsequently the private respondents filed a complaint against the impostor Lawaan Lopez
and the Treasurer of the Philippines as custodian of the Assurance Fund for damages

sustained by the plaintiffs as above narrated. Both the trial court * ruled the respondent court **
ruled in their favor, holding the Assurance Fund subsidiarily liable for the sum of P138,264.00
with legal interest from the date of filing of the complaint, in case the judgment could not be
enforced against the other defendant who had been defaulted and could not be located. 5 The
petitioner, disclaiming liability, is now before us and prays for relief against the decision of the
respondent court which he says is not in accord with law and jurisprudence.
The applicable law is Section 101 of Act No. 496 (before its revision by P.D. No. 1529)
providing as follows:
Sec. 101. Any person who without negligence on his part sustains loss or damage through any
omission, mistake or misfeasance of the clerk, or register of deeds, or of any examiner of titles,
or of any deputy or clerk or of the register of deeds in the performance of their respective
duties under the provisions of this Act, and any person who is wrongfully deprived of any land
or any interest therein, without negligence on his part, through the bringing of the same under
the provisions of this Act or by the registration of any other person as owner of such land, or by
any mistake, omission, or misdescription in any certificate or owner's duplicate, or in any entry
or memorandum in the register or other official book, or by any cancellation and who by the
provisions of this Act is barred or in any way precluded from bringing an action for the recovery
of such land or interest therein, or claim upon the same, may bring in any court or competent
jurisdiction an action against the Treasurer of the Philippine Archipelago for the recovery of
damages to be paid out of the Assurance Fund.
Commenting on this provision, Commissioner Antonio H. Noblejas, in his book on Land Titles
and Deed 6 notes that recovery from the Assurance Fund could be demanded by:
1)

Any person who sustains loss or damage under the following conditions:

a)

that there was no negligence on his part; and

b)
that the loss or damage was sustained through any omission, mistake, or
misfeasance of the clerk of court, or the register of deeds, his deputy or clerk, in the
performance of their respective duties under the provisions of the land Registration Act,' or
2)
Any person who has been deprived of any land or any interest therein under the
following conditions:
a)

that there was no negligence on his part;

b)
that he was deprived as a consequence of the bringing of his land or interest therein
under the provisions of the Property Registration Decree; or by the registration by any other
persons as owner of such land; or by mistake, omission or misdescription in any certificate or
owner's duplicate, or in any entry or memorandum in the register or other official book, or by
any cancellation; and
c)
that he is barred or in any way precluded from bringing an action for the recovery of
such land or interest therein, or claim upon the same.
A careful reading of the above provision will readily show that the private respondents do not
come under either of the two situations above mentioned.

The first situation is clearly inapplicable as we are not dealing here with any omission, mistake
or malfeasance of the clerk of court or of the register of deeds or his personnel in the
performance of their duties.
The second situation is also inapplicable. The strongest obstacle to recovery thereunder is that
the private respondents acquired no land or any interest therein as a result of the invalid sale
made to them by the spurious Lawaan Lopez.
The petition correctly points out that such sale conveyed no title or any interest at all to them
for the simple reason that the supposed vendor had no title or interest to transfer. He was not
the owner of the land. He had no right thereto he could convey. Manifestly, the deception
imposed upon them by the impostor deprived the private respondents of the money they
delivered to him as consideration for the sale. But there is no question that the subsequent
cancellation of the sale did not deprive them of the land subject thereof, or of any interest
wherein, for they never acquired ownership over it in the first place.
The private respondents argue that from the time the new transfer certificate of title was issued
in their name on January 28, 1965, until it was cancelled on October 12, 1967, they were the
true and exclusive owners of the disputed property. Hence, the cancellation of their title on the
latter date had the effect of depriving them of the said land and so entitles them now to
proceed against the Assurance Fund.
The flaw in this posture is that the real Lawaan Lopez had her own genuine certificate of title
all the time and it remained valid despite the issuance of the new certificate of title in the name
of the private respondents. That new certificate, as the trial court correctly declared, was null
and void ab initio, which means that it had no legal effect whatsoever and at any time. The
private respondents were not for a single moment the owner of the property in question and so
cannot claim to have been unlawfully deprived thereof when their certificate of title was found
and declared to be a total nullity.
Additionally, the Court observes that the private respondents were not exactly diligent in
verifying the credentials of the impostor whom they had never met before he came to them
with his bogus offer. The fact alone that he claimed to have lost his duplicate certificate of title
in a fire, not to mention the amount of the consideration involved, would have put them on their
guard and warned them to make a more thorough investigation of the seller's Identity. They did
not. Oddly, they seemed to be satisfied that he had an Ilongo accent to establish his claim to
be the Visayan owner of the property in question. They were apparently not concerned over
the curious fact that for his residence certificate B the supposed owner had paid only P1.00
although the property he was selling was worth to him no less than P98,700.00. 7 Moreover,
whereas address in that certificate was Mandaluyong, Rizal, whereas the address indicated in
the records of the Register of Deeds of the owner of the land in question was Fara-on Fabrics,
Negros Occidental. 8
As for the proceedings for the issuance of a duplicate certificate of title, the private
respondents themselves state in their complaint that the evidence of the petitioner therein was
received by the clerk of court only, without any opposition, and his report was thereafter
accepted by the trial judge who thereupon granted the relief sought by the impostor. 9 It is not
likely, given the summary nature of these proceedings, that the necessary care was taken by
the court to establish the real identity of the person who claimed to be the owner of the
property in question.
While we may agree that there was no collusion between the parties respondents and the
vanished vendor, we are not prepared to rule under the circumstances of this case that they
are entitled to even claim the status of innocent purchasers of the land. On the contrary, we
find that for failure to exercise the necessary diligence in ascertaining the credentials and bona
fides of the false Lawaan Lopez, and as a result of his deception, they never acquired any title
to the said land or any interest therein covered by Section 101 of Act No. 496.

As this Court held in La Urbana v. Bernardo 10 "it is a condition sine qua non that the person
who brings an action for damages against the Assurance Fund be the registered owner and as
the holders of transfer certificates of title, that they be innocent purchasers in good faith and for
value." Being neither the registered owners nor innocent purchasers, the private respondents
are not entitled to recover from the Assurance Fund.
They are, of course, not entirely without recourse, for they may still proceed against the
impostor in a civil action for recovery and damages or prosecute him under the Revised Penal
Code, assuming he can be located and arrested. The problem is that he has completely
disappeared. That difficulty alone, however, should not make the Assurance Fund liable to the
private respondents for the serious wrong they have sustained from the false Lawaan Lopez.
The Government like all governments, and for obvious reasons is not an insurer of the
unwary citizen's property against the chicanery of scoundrels.
WHEREFORE, the petition is GRANTED. The decision of the respondent court dated January
26, 1976 is set aside, and Civil Case No. 12426 of the then Court of First Instance of Rizal is
dismissed. No costs.
31) MARIANO TORRES Y CHAVARRIA, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, FRANCISCO E. FERNANDEZ and FE
FERNANDEZ, ROSARIO MOTA CUE, ERNESTO MEDINA CUE and the NATIONAL
TREASURER, as Custodian of the Assurance Fund, respondents.
This is a petition for review of the decision of the Court of Appeals in CA-G.R. No. 62248-R
entitled "Mariano Torres Y Chavarria v. Francisco E. Fernandez, et al., etc.," which reversed
the decision of the then Court of First Instance of Manila, Branch 7, by holding that it is the
respondent Rosario Mota who is legally entitled to the disputed realties, being an innocent
mortgagee and later the highest bidder when the properties were supposedly foreclosed, and
not the petitioner Mariano Torres, the defrauded owner thereof; and of the resolution of that
Court denying Torres' motion for reconsideration.
The parcel of land located at the comer of Quezon Boulevard and Raon Street (now Gonzalo
Street), and the building erected thereon known as "M. Torres Building" is owned by Mariano
Torres, the herein petitioner, as evidenced by Transfer Certificate of Title No. 53628-Manila
issued in his name. As far as the records show, Torres was and still is in possession of the
realties, holding safely to his owner's duplicate certificate of title, and, at least until 1971,
paying the real estate taxes due thereon, and collecting rentals from his tenants occupying the
building.
Sometime in 1966, Francisco Fernandez, Torres' brother-in-law, filed a petition with the Court
of First Instance of Manila, docketed as LRC GLRO Cad. Rec. No. 133, where he,
misrepresenting to be the attorney-in-fact of Torres and falsely alleging that the a duplicate
copy of TCT No. 53628 was lost, succeeded in obtaining a court order for the issuance of
another copy of the certificate.
Once in possession thereof, Fernandez forged a simulated deed of sale of the realties in his
favor. Whereupon TCT No. 53628 in the name of Torres was canceled and TCT No. 86018
was issued in Fernandez' name.
On various dates from December, 1966 to November, 1967 Fernandez mortgaged the realties
to Rosario Mota, wife of Ernesto Cue, and also to Angela Fermin, who later assigned her credit
to the spouses Cue. The mortgages were annotated at the back of TCT No. 86018 and so was
the deed of assignment.

Torres, who up to this time still had possession of his owner's duplicate certificate of title and
who was still collecting rentals from the occupants of the subject building, upon Teaming of the
fraud committed by Fernandez, caused, on March 18, 1968, the annotation on the latter's TCT
a notice of adverse claim.
On March 30, 1968, Torres filed Civil Case No. 72494 against Fernandez to annul TCT No.
86018 as well as the proceedings in LRC GLRO Cad. Rec. No. 133. On April 2, 1968, a notice
of lis pendens was annotated at the back of Fernandez' TCT.
In the meantime, Fernandez failed to pay his various loans which prompted the Cues to
institute an extrajudicial foreclosure of the mortgage.
On February 11, 1969, Fernandez filed Civil Case No. 75643 against the spouses Cue for the
annulment of the mortgage with preliminary injunction.
After the foreclosure was enjoined, the parties entered into an amicable settlement, approved
by the court whereby it was stipulated that Fernandez acknowledged and promised to pay his
debt to the Cues for Five Hundred Sixty-Two Thousand Nine Hundred Fifty-Five and 28/100
(P562,955.28) Pesos on or before, March 30, 1970, while the spouses bound themselves to
execute and deliver, within ten (10) days from receipt of the sum mentioned such documents
as are necessary to release the mortgages in favor of defendants on plaintiffs' property.
Before Fernandez could pay his obligation under the settlement agreement, a decision was
rendered in Civil Case No. 72494 where it was declared that the proceedings held in LRC
GLRO Cad. Rec, No. 133 was void and that TCT No. 86018, issued in the name of Fernandez,
is without force and effect as TCT No. 53628 in the name of Torres is the true and legal
evidence of ownership of the subject immovables. Fernandez appealed from this decision to
the Court of Appeals where it was docketed as CA-G.R. No. 46386-R. The Court of Appeals,
on April 20, 1979, affirmed the decision of the trial court. There being nothing on the records
that would indicate that the judgment of the appellate court was elevated here, it would appear
that it had become final and executory.
But meanwhile, prior to the Court of Appeals' decision mentioned above, Fernandez failed to
comply with his obligation under the amicable settlement and whereupon the Cues applied for
and were granted a writ of execution. The subject realties were then levied upon and sold at
public auction where Rosario Mota was the highest bidder.
On August 31, 1971, the redemption period for the subject immovables having lapsed without
Fernandez nor Torres redeeming the properties, Rosario Mota was issued the Sheriffs Deed of
Sale. Thereafter, TCT No. 86018 was canceled and TCT No. 105953 was issued in her name.
On December 7, 1971 Mota, through her lawyer, notified the tenants occupying "M. Torres
Building" that she is the new owner thereof and henceforth, payment of their rentals should be
made to her.
On December 17, 1971 Torres filed a complaint, which later gave rise to this petition, with the
Court of First Instance of Manila, docketed as Civil Case No. 85753, against Fernandez and
his spouse and the Cues to restrain the latter from collecting rentals and for the declaration as
void TCT No. 105953. The Cues in turn filed a cross-claim against Fernandez spouses and a
third party complaint against the National Treasurer as the custodian of the Assurance Fund.

During the proceeding, Mariano Torres, having died sometime in 1974, was substituted by his
widow. On June 3, 1977, the trial court rendered its decision declaring TCT No. 105953 in the
name of Rosario Mota nun and void as it upheld the validity of TCT No. 53628 in the name of
Torres as the true evidence of title to the disputed realties, and at the same time dismissing the
Cue's third party complaint and cross claim.
The decision was reviewed by the respondent court at the instance of the Cues which, as
aforementioned, reversed the trial court in its decision dated July 30, 1982 and the Resolution
of January 14, 1983. Hence, this petition.
There is nothing on the records which shows that Torres performed any act or omission which
could have jeopardized his peaceful dominion over his realties. The decision under review,
however, in considering Mota an innocent mortgagee protected under Section 55 of the Land
Registration Law, held that Torres was bound by the mortgage. Inevitably, it pronounced that
the foreclosure sale, where Mota was the highest bidder, also bound Torres and concluded that
the certificate of title issued in the name of Mota prevails over that of Torres'. As correctly
pointed out by Torres, however, his properties were sold on execution, and not on foreclosure
sale, and hence, the purchaser thereof was bound by his notice of adverse claim and lis
pendens annotated at the back of Fernandez' TCT. Moreover, even if We grant Mota the status
of an innocent mortgagee, the doctrine relied upon by the appellate court that a forged
instrument may become the root of a valid title, cannot be applied where the owner still holds a
valid and existing certificate of title covering the same interest in a realty. The doctrine would
apply rather when, as in the cases for example of De la Cruz v. Fable, 35 Phil. 144 [1916], Fule
v. De Legare, No. L-17951, February 28, 1963, 7 SCRA 351, and Republic v. Umali, G.R. No.
80687, April 10, 1989, the forger thru insidious means obtains the owner's duplicate certificate
of title, converts it in his name, and subsequently sells or otherwise encumbers it to an
innocent holder for value, for in such a case the new certificate is binding upon the owner (Sec.
55, Act 496; Sec. 53, P.D. No. 1529). But if the owner holds a valid and existing certificate of
title, his would be indefeasible as against the whole world, and not that of the innocent
holder's. "Prior tempore potior jure" as We have said in Register of Deeds v. Philippine
National Bank, No. L-17641, January 30, 1965, 13 SCRA 46 , citing Bank, No. L Legarda v.
Saleeby, 31 Phil. 590, Roman Catholic Bishop v. Philippine Railway, 49 Phil. 546, Reyes v.
Borbon, 50 Phil. 791. in C.N. Hodges v. Dy Buncio & Co., Inc., No. L-16096, October 30, 1962,
6 SCRA 287, 292, We laid down the doctrine that:
The claim of indefeasibility of the petitioner's title under the Torrens land title system would be
correct if previous valid title to the same parcel of land did not exist. The respondent had a
valid title ... It never parted with it; it never handed or delivered to anyone its owner's duplicate
of the transfer certificate of title, it could not be charged with negligence in the keeping of its
duplicate certificate of title or with any act which could have brought about the issuance of
another certificate upon which a purchaser in good faith and for value could rely. If the
petitioner's contention as to indefeasibility of his title should be upheld, then registered owners
without the least fault on their part could be divested of their title and deprived of their property.
Such disastrous results which would shake and destroy the stability of land titles had not been
foreseen by those who had endowed with indefeasibility land titles issued under the Torrens
system. Veronica Bareza perpetrated the fraud by making false representations in her petition
and the title issued to her being the product of fraud could not vest in her valid and legal title to
the parcel of land in litigation. As she had no title to the parcel of land, in the same way that a
thief does not own or have title to the stolen goods, she could not transmit title which she did
not have nor possess.

We have applied this doctrine in the case of the Register of Deeds v. P.N.B., supra, where We
noted that said ruling is "a mere affirmation of the recognized principle that a certificate is not
conclusive evidence of title if it is shown that the same land had already been registered and
an earlier certificate for the same land is in existence." Again in the case of Baltazar v. Court of
Appeals, G.R. No. 78728, December 8, 1988, 168 SCRA 354, We held that as between two
persons both of whom are in good faith and both innocent of any negligence, the law must
protect and prefer the lawful holder of registered title over the transfer of a vendor bereft of any
transmissible rights.
In view of the foregoing, to hold, for the purpose of enforcing the mortgage, that Mota was an
innocent mortgagee would be futile because, as above shown, no certificate of title covering
the subject realties in derogation of Torres' certificate of title may validly be issued.
Then it becomes evident that the remaining possible remedies of the Cues are to go against
Fernandez or the Assurance Fund, as they in fact had done in the lower court by filing a cross
claim and third party complaint. The lower court dismissed the Cues' cross-claim against
Fernandez reasoning out that their remedy is to cause the final judgment (compromise
agreement) in Civil Case No. 75643 executed. This, of course, is correct since the rights and
obligations of both parties had been determined in that case.
The trial court also dismissed the Cues' third party complaint against the Treasurer of the
Philippines as custodian of the Assurance Fund after finding them negligent in protecting their
interest. The trial court recognized the principle that a person dealing with registered lands
need not go beyond the certificate of title but nevertheless pointed out that there are
circumstances in this case which should have put the Cues on guard and prompted them to
investigate the property being mortgaged to them, thus:
The property in question is a very valuable property, in fact accepted by defendants Mota and
Medina Cue as collateral for more than half a million pesos in loans granted by them to
Fernandez. Its value lies principally in its income potential, in the form of substantial monthly
rentals. Certainly, the registered title does not yield any information as to the amount of rentals
due from the building, much less on who is collecting them, or who is recognized by the
tenants as their landlord. Any prospective buyer or mortgagee of such a property, if prudent
and in good faith, is normally expected to inquire into all these and related facts and
circumstances.
Besides, by the course of visible dimensions of the M. Torres Building, it should be readily
obvious to any one that the area of the two lots ... covered by TCT No. 86018 cannot
accommodate the building, as in fact it also rests upon a lot covered by TCT No. 56387, and
partly upon a lot leased by (Torres) from the City of Manila. Had (the Cues) known of this fact
would they have accepted the mortgage alone over TCT No. 86018? The answer is obvious.
And yet, to all indications, they never bothered to look into this fact about the M. Torres
Building.
xxx

xxx

xxx

Another thing that defendants Mota and Medina Cue must have investigated, as any prudent
buyer or mortgagee should before consummating any transaction on real property, in the
matter of payment of taxes on the property. After all, the big value of the property in question
necessarily means that even real estate taxes on it alone would involve big amounts of money,
and if there are tax arrearages, any buyer or subsequent owner of the property wig have to

come face to face with the tax hen attaching to the property wherever its owner may be. ... (P.
257, Record on Appeal)
We likewise take note of the manifestation of the Office of the Solicitor General that the Cues
failed to contest the ruling of the trial court negating the liability of the Assurance Fund. For
these reasons, We hold that the Cues' remedy merely is to go against Francisco Fernandez or
rather his estate since record shows that he died sometime in 1983.

adopted daughter, herein private respondent Eda Jimenez, for the sum of P1,000.00. Transfer
Certificate of Title No. T-99 was canceled to give way to TCT No. T-17103 6 in the name of
Eda Jimenez, married to Santiago Jimenez.
On 6 March 1972, Eda Jimenez sold sixty-five (65) square meters of Lot 564 to Marcos
Salimbagat for P6,500.00, and on 1 August 1972, conveyed 301 square meters of the same lot
to Pacifico Cimafranca 8 for P30,000. Both sales were duly annotated on TCT No. T-17103.

ACCORDINGLY, the decision and resolution under review are REVERSED and the decision of
the then Court of First Instance, Branch 7, Manila in Civil Case No. 85753 is REINSTATED.

On 25 September 1972, the Torregianis instituted in the Court of First Instance, now Regional
Trial Court, of Zamboanga del Norte an action for declaration of nullity of contract, annulment
of sales, reconveyance and damages 9 against the spouses Santiago and Eda Jimenez,
Marcos Salimbagat and Pacifico Cimafranca alleging that the sale of Lot 564 by Lucia
Embrado to Eda Jimenez was void not only for lack of consideration but also because Oreste
Torregiani did not consent to the sale, which consent was necessary because Lot 564 was
conjugal property. In addition, the petitioners claim that Lucia was misled into signing the deed
of sale marked as Exh. "D" on the belief that Lot 564 was merely intended as security for a
loan that the Jimenez spouses were then negotiating with the First Insular Bank of Cebu. Since
the Jimenez spouses did not acquire valid title to the land, the subsequent sales in favor of
Salimbagat and Cimafranca were without legal effect.

32) G.R. No. 51457

The Torregianis were sustained by the CFI of Zamboanga del Norte 10 which held that the sale
of Lot 564 to Eda Jimenez and its subsequent transfers to Marcos Salimbagat and Pacifico
Cimafranca, who were declared buyers in bad faith, were void and of no effect. More
specifically, the judgment (a) declared Exhs. "D," "G" and "H" as well as TCT No. 17103 null
and void and of no force and effect; (b) ordered defendants jointly and severally to pay
plaintiffs the sum of P2,000.00 as actual damages and P1,500.00 for attorneys fees; (c)
ordered the Register of Deeds of Dipolog City to cancel TCT No. 17103 in the name of Eda
Jimenez and issue another one in favor of plaintiff Lucia Embrado, married to Oreste
Torregiani, and to cancel all the annotations thereon emanating from the void transfers in favor
of Marcos Salimbagat and Pacifico Cimafranca; (d) ordered defendants Eda and Santiago
Jimenez to return to defendant Pacifico Cimafranca the sum of P30,000.00 paid by him for the
301 square meters and the house in question, and to defendant Marcos Salimbagat the
P6,500.00 paid by him for the 65 square meters occupied by Comendador Clinic with legal
interest of six percent (6%) until fully paid; and, (e) ordered defendant Cimafranca to pay
plaintiffs all the rents he has been collecting from the lessees of the first floor of the house with
legal interest thereon from the time he started collecting them until fully paid, with costs against
defendants. 11

June 27, 1994

LUCIA EMBRADO and ORESTE TORREGIANI, petitioners,

vs.
COURT OF APPEALS, PACIFICO CIMAFRANCA, MARCOS SALIMBAGAT, EDA JIMENEZ
and SANTIAGO JIMENEZ, respondents.
BELLOSILLO, J.:
LUCIA EMBRADO and ORESTE TORREGIANI, spouses, filed this petition for review on
certiorari from the decision of respondent Court of Appeals 1 upholding the validity of the Deed
of Sale over Lot No. 564 executed by petitioner Lucia Embrado in favor of private respondent
Eda Jimenez.
Lot No. 564 is a 366-square meter lot situated in Dipolog City originally owned by Juan, Pastor
and Matias Carpitanos. On 2 July 1946, a Venta Definitiva, a notarized document written
entirely in Spanish, was executed by the Carpitanos whereby they sold Lot No. 564 to "Srta.
LUCIA C. EMBRADO . . . soltera, con residencia y direccion postal Municipio de Dipolog,
Provincia de Zamboanga." 2 The document provided that even though the deed was prepared
and signed on 2 July 1946, the effects of the document would retroact to the 15th day of April
1941, the date the lot and its improvements were actually sold to Lucia C. Embrado.
The sale was registered and Transfer Certificate of Title No. T-99 3 was issued on 13 February
1948 in the name of Lucia Embrado alone, who was by then already married to petitioner
Oreste Torregiani since 1943. However, by virtue of a court order in Misc. Sp. Proc. No. 2330
of the then Court of First Instance of Zamboanga del Norte, the word "single" appearing in TCT
No. T-99 was canceled and replaced on 19 October 1970 by the phrase "married to Oreste
Torregiani." The Torregianis then made their conjugal abode on the lot and in 1958 constructed
a residential/commercial building thereon. 4
As appearing from a document entitled Absolute Deed of Sale dated 1 May 1971 5, Lucia
Embrado Torregiani sold Lot No. 564, described as her "own paraphernal property," to her

The foregoing judgment was reversed by the Court of Appeals which held that since Lucia
Embrado actually agreed with Juan, Pastor and Matias Carpitanos, the original owners, to the
purchase of Lot 564 on 15 April 1941 12 when she was not yet married, then the lot was her
paraphernal property since a sale is considered perfected the moment the parties agree on the
object and cause of the contract. In addition, the respondent court declared Salimbagat and
Cimafranca buyers in good faith since the contrary was not proved. Consequently, the
complaint in the trial court was ordered dismissed by respondent Court of Appeals.
Three (3) issues are herein involved: (a) whether Lot 564 was paraphernal property of Lucia
Embrado or conjugal with her husband Oreste Torregiani; (b) whether the sale in favor of Eda
Jimenez was valid; and, (c) whether vendees Marcos Salimbagat and Pacifico Cimafranca
were buyers in good faith so that the sale to them was valid, hence, would bar reconveyance.

We sustain petitioners. While we agree with respondent court that Lot 564 was originally the
paraphernal property of Lucia, we cannot adopt its conclusion that because Lucia and the
original owners agreed in 1941 for its purchase and sale, ownership was already acquired by
Lucia at that moment. Under Art. 1496 of the Civil Code, "ownership of the thing sold is
acquired by the vendee from the moment it is delivered to him in any of the ways specified in
articles 1497 to 1501, or in any other manner signifying an agreement that the possession is
transferred from the vendor to the vendee," and under Art. 1498, "(w)hen the sale is made
through a public instrument, the execution thereof shall be equivalent to the delivery of the
thing which is the object of the contract, if from the deed the contrary does not appear or
cannot clearly be inferred."
In the case at bar, the Venta Definitiva over Lot 564 in favor of Lucia Embrado was executed
by the Carpitanoses on 2 July 1946 when her marriage to petitioner Oreste Torregiani was
already subsisting. Although ownership was acquired during the marriage and hence
presumed conjugal, the presumption of conjugality 13 was successfully overcome by the terms
of the Venta Definitiva which contains a positive assertion of exclusive ownership, which was
duly supported by the testimony of Matias Carpitanos, one of the original sellers of the lot. 14
However, a decisive fact appears which prevents us from ultimately affirming the validity of her
sale of Lot 564 to private respondent Eda Jimenez. The trial court found as a fact the
construction in 1958 of a residential/commercial building 15 on said lot a part of which was
leased to third persons and another part serving as the Torregianis conjugal dwelling.
Although no evidence was presented on the source of funds used in the construction to
determine whether the same was conjugal or paraphernal, other than the testimony of
Torregiani, 16 petitioners nevertheless enjoy in their favor the presumption that the funds used
were conjugal. 17
The second paragraph of Art. 158 of the Civil Code provides that "[b]uildings constructed, at
the expense of the partnership, during the marriage on land belonging to one of the spouses,
also pertain to the partnership, but the value of the land shall be reimbursed to the spouse who
owns the same." Under this article, the land becomes conjugal upon the construction of the
building without awaiting reimbursement before or at the liquidation of the partnership upon the
concurrence of two conditions, to wit: (a) the construction of the building at the expense of the
partnership; and, (b) the ownership of the land by one of the spouses. 18 The conditions have
been fully met in the case at bench. Thus, even if Lot 564 was originally the paraphernal
property of Lucia as evident from the "Venta Definitiva", the same became conjugal upon the
construction of the residential/commercial building in 1958.
Lucia claims that she was misled by her daughter and son-in-law into signing a deed of
absolute sale in their favor thinking that she would be helping them obtain a loan from a bank if
they could mortgage the property as security for their loan; that although she signed the deed
of sale, she did not consent to the sale nor did she intend to convey or transfer her title to Eda
Jimenez; and, that she never received the alleged amount of P1,000.00 as consideration for
the sale of the property.
While it is true that a notarized document is admissible in evidence without proof of its due
execution and is conclusive as to the truthfulness of its contents, this rule is not absolute and
may be rebutted by evidence to the contrary. 19 In this case, it was clearly shown that Eda and
Santiago Jimenez had no sufficient means of livelihood and that they were totally dependent
on their mother Lucia for the support of their family. This fact strengthens the claim of Lucia
that the price of the property was fictitious and that Eda Jimenez could not have paid the price

of the property as she was financially incapable to do so. In fact, Eda Jimenez did not prove as
to how she obtained the money to pay for the property she supposedly bought from Lucia.
When the source of the purchase price is "intriguing" and is not convincingly shown to have
been given by the "buyer" to the "seller," the claim of the latter that she signed the deed of sale
without her consent may be upheld. 20
Even assuming in gratia argumenti that Lucia signed the document knowing that it was a deed
of sale of the property, the sale thereof by Lucia to Eda Jimenez without her husbands
conformity should be considered void ab initio being contrary to law. 21 Since "(t)he wife
cannot bind the conjugal partnership without the husbands consent, except in cases provided
by law," 22 it follows that Lucia Embrado Torregiani could not, by herself, validly dispose of Lot
564 without her husbands consent. Consequently, Eda Jimenez likewise could not have
acquired ownership over the land. The issuance of a certificate of title in favor of Eda Jimenez
did not vest upon her ownership over the property. Neither did it validate the alleged purchase
thereof which is null and void. Registration does not vest title. It is merely evidence of such
title. Our land registration laws do not give the holder any better title than what he actually has.
23 Being null and void, the sale to Eda Jimenez and the transfer of the property she made to
Salimbagat and Cimafranca produced no legal effects whatsoever. Quod nullum est, nullum
producit effectum. There being no valid title to the land that Eda Jimenez acquired from Lucia,
it follows that no title to the same land could be conveyed by the former to Salimbagat and
Cimafranca. 24
It is worthy to note that Salimbagat and Cimafranca, as buyers of Eda Jimenez, have not
proved their status as purchasers in good faith and for value of the land which, in the first
place, Eda Jimenez had no right to sell. The burden of proving the status of a purchaser in
good faith and for value lies upon him who asserts that status. In discharging the burden, it is
not enough to invoke the ordinary presumption of good faith, i.e., that everyone is presumed to
act in good faith. The good faith that is here essential is integral with the very status which
must be proved. 25
We agree with the trial court when it found that Salimbagat and Cimafranca purchased the
disputed lot from Eda and Santiago Jimenez with knowledge of facts and circumstances which
should have put them upon such inquiry and investigation as might be necessary to acquaint
them with the defects in the title of their vendor. A purchaser cannot close his eyes to facts
which should put a reasonable man on his guard and then claim that he acted in good faith
under the belief that there was no defect in the title of the vendor. His mere refusal to believe
that such defect exists, or his willful closing of his eyes to the possibility of the existence of a
defect in the vendors title will not make him an innocent purchaser for value if afterwards it
develops that the title is in fact defective, and it appears that he had such notice of the defect
as would have led to its discovery had he acted with the measure of precaution which may
reasonably be required of a prudent man in like situation. 26
Cimafranca is a close relative of Santiago Jimenez and at the same time godfather to one of
his children. As such, there can be no doubt that Cimafranca was aware of the personal
circumstances and financial standing of the Jimenez spouses, including their financial ability to
acquire any property. It would be impossible for Cimafranca not to know that Santiago Jimenez
was only twenty-two years old, a working student earning six pesos per day 27 with a wife and
three children to support. 28 With these facts, there is every reason for him to inquire further as
to how Eda Jimenez came up with the sum of P1,000.00 to buy the property. When there is a
clear showing that Eda Jimenez, being the transferee of a registered property, is not gainfully
employed or did not have an independent source of income or is financially incapable of

paying the price of the property she bought, this is sufficient to engender doubt as to whether
Eda validly bought the property from Lucia. 29
On the part of Salimbagat, he has been a resident of Dipolog for about thirty (30) years. He
has a daughter renting a portion of the building with her husband for more than a year prior to
the sale by Eda Jimenez to Salimbagat on 6 March 1972. 30 This means that the lease of the
building by Salimbagats daughter already commenced while Lucia Torregiani was still the
registered owner and this was prior to the alleged sale by Lucia Torregiani of the property to
Eda Jimenez on 1 May 1971. There can be no doubt that Salimbagats daughter was aware of
the factual background of the property and the personal circumstances of the owners thereof
especially that they are all occupying the same building. During the time that Salimbagat was
already interested in buying the property, it would have been usual and part of ordinary human
nature for him to inquire about the property from his daughter who was living very near the
supposed owners. Considering that the Torregiani and Jimenez families are not total strangers
to Salimbagat, it is safe to conclude that Salimbagat had some knowledge of the financial
status of the supposed vendors which should have put him on guard before buying the
property. Moreover, the records show that this would not have escaped the notice of
Salimbagat and Cimafranca that at the time of the sale to them petitioners were in actual
possession of the property with Salimbagats daughter renting a portion thereof. For that
matter, at the time of the sale to Salimbagat and Cimafranca, petitioners had already been in
continuous possession of the property for fourteen (14) years, or since 1958. Santiago
Jimenez admitted that after his marriage he and his wife Eda lived and stayed with her
parents, herein petitioners, and dependent on them for support. 31

Embrado without her husbands conformity. The present vendees, Marcos Salimbagat and
Pacifico Cimafranca, who bought the property from Eda Jimenez have failed to persuade us
that they acquired the property in good faith.
WHEREFORE, the decision of respondent Court of Appeals dated 26 April 1979 is
REVERSED and SET ASIDE and the Decision of the then Court of First Instance (now
Regional Trial Court) of Zamboanga del Norte dated 14 June 1976 is REINSTATED and
ADOPTED herein as the decision in this case.

Before buying the property, Salimbagat and Cimafranca allegedly inquired from the office of
the Register of Deeds concerning the genuineness of the certificate of title of Eda Jimenez,
and from the Clerk of Court of the Court of First Instance of Dipolog City as to whether the
property was involved in any litigation. 32 However, they failed to inquire from petitioners as to
why they were the ones in actual possession of the property.

33) DEVELOPMENT BANK OF THE PHILIPPINES, plaintiff-appellant,

vs.
LAZARO MANGAWANG, ET AL., defendants-appellees.

The rule is settled that a buyer of real property which is in the possession of persons other
than the seller must be wary and should investigate the rights of those in possession.
Otherwise, without such inquiry, the buyer can hardly be regarded as a buyer in good faith. 33
When a man proposes to buy or deal with realty, his first duty is to read the public manuscript,
i.e., to look and see who is there upon it, and what are his rights. A want of caution and
diligence which an honest man of ordinary prudence is accustomed to exercise in making
purchases is, in contemplation of law, a want of good faith. The buyer who has failed to know
or discover that the land sold to him is in the adverse possession of another, is a buyer in bad
faith. 34

This is an appeal from a decision of the Court Of First instance of Bataan declaring the
Mangawang brothers owners of Lot No. 1633 of the Balanga cadastre.

The fact that Lucia Embrado resides in the premises, coupled with the relatively young age
and meager financial standing of the Jimenez spouses, should have been sufficient for
Cimafranca to hesitate accepting Edas transfer certificate of title at its face value. Cimafranca,
after deliberately closing his eyes to such a vital information, is now claiming good faith. For
obvious reasons, we cannot accept his contention. We thus declare him, together with Marcos
Salimbagat, to be purchasers in bad faith hence not entitled to protection under the Torrens
system of registration.
Lot 564 is now registered in the name of Eda Jimenez "married to Santiago Jimenez" under
Transfer Certificate of Title No. T-17103 which was issued pursuant to the "Absolute Deed of
Sale" executed in her favor by petitioner Lucia Embrado. We have already declared said deed
of sale as null and void since its object, Lot 564, is conjugal property which was sold by Lucia

BAUTISTA ANGELO, J.:

It appears that Gavino Amposta applied with the Director of Lands for the issuance of a
homestead patent over a parcel of land situated at Balanga, Bataan. Pending action on his
application, cadastral proceedings were instituted by the government in said municipality
wherein Amposta filed an answer praying for the adjudication of the same land in his favor
which was designated therein as Lot No. 1633. On March 8, 1920, the cadastral court
rendered decision awarding the land to Amposta. Since no advice on this matter was given
either to the Bureau of Lands or to the Governor General, the latter, on November 2, 1920,
issued in favor of Amposta Homestead Patent No. 2388 covering the same land, and on
November 29, 1920, Original Certificate of Title No. 100 was issued to him by the GovernorGeneral.
On December 20, 1922, the cadastral court issued a decree of registration of the land in favor
of Amposta pursuant to the decision rendered in the cadastral case, and or, July 5, 1924,
Original Certificate of Title No. 2668 was issued to him covering the same property.
On November 24, 1941, Amposta sold the land to Santos Camacho surrendering to him
Original Certificate of Title No. 100, and because of this transfer said title was cancelled and
transfer Certificate of Title No. 5506 was issued in the name of Camacho. On November 18,
1946, Santos-Camacho sold the land to Bonifacio Camacho as a result of which Transfer

Certificate of Title No. 248 was issued to the latter. On April 28, 1948, Bonifacio Camacho
mortgaged the land to the Rehabilitation Finance Corporation (now Development Bank of the
Philippines), and having failed to pay the loan as agreed upon the land was sold at public
auction to said bank as the highest bidder. The period of redemption having elapsed without
Camacho being able to redeem the property, a final deed of sale was executed in favor of the
bank, and Transfer Certificate of Title No. 6961 was issued in its name on June 29, 1957.
Meanwhile, or on June 11, 1947, Gavino Amposta again sold the same property to Lazaro and
Arsenio Mangawang for the sum of P2,000.00, the vendees executing a mortgage on the land
to secure the payment of the balance. On March 17, 1948, the vendees paid the balance of the
purchase price, and an absolute deed of sale was executed in their favor. In connection with
this transaction, Amposta surrendered to the vendees the title that was issued to him in the
cadastral case, which was later substituted by Transfer Certificate of Title No. 1098 issued in
the name of the vendees.1wph1.t
As a consequence of their purchase of the land, the Mangawang brothers took possession
thereof, and upon learning of this transfer, the Development Bank of the Philippines, which as
already stated became the owner of the property, commenced the present action against them
in the Court of First Instance of Bataan to recover its possession and damages. In this case,
the parties submitted a stipulation of facts, and on the strength thereof, the court a quo
rendered decision awarding the land to the Mangawang brothers. Seasonably, the bank
appealed to this Court.
Appellees contend that their right over the property in litigation should be restored because the
certificate of title they are holding is derived from that issued pursuant to a decision rendered
by a cadastral court, while the title being held by appellant was merely based on the title
issued in an administrative proceeding, upon the theory that a judicial title is deemed preferred
to one issued administratively. They further contend that since the decision which gave rise to
their title was rendered on March 8, 1920, which became final thirty days thereafter, their right
over the land must be deemed vested on said date, whereas the title of appellant is merely a
deprivation of the one issued to Amposta on November 29, 1920, or seven months after the
decision rendered in the cadastral case.

land to the Mangawang brothers he had nothing more to sell even if the title he surrendered to
them is one issued covering the same property. In legal contemplation, therefore, Amposta
sold a property he no longer owned, and hence the transaction is legally ineffective.
On the other hand, the case under consideration can also be viewed under a different angle. It
can also be treated as one of double sale, where a person sells the same land to two different
persons who are unaware of the flaw that lies in its title, and where the law adjudicates the
property to the purchaser who first registers the transaction in his name in the registry of
property.2 And applying this principle, we cannot conclude that the title should likewise be
adjudicated to appellant whose predecessor-in-interest acquired and registered the property
much ahead in point of time than the appellees. Verily, the title acquired by the latter is invalid
and ineffective, contrary to the finding of the court a quo.
WHEREFORE, the decision appealed from is reversed. We hereby declare appellant owner of
Lot No. 1633 of the Balanga cadastre and uphold the validity of Transfer Certificate of Title No.
6961 issued in its favor. Transfer Certificate of Title No. 1098 issued in the name of appellees
is hereby ordered cancelled. No pronouncement as to costs.

34) PILAR LAZARO VDA. DE JACINTO, ET AL., petitioners,

vs.
SALUD DEL ROSARIO VDA. DE JACINTO, ET AL., respondents.
----------------------------G.R. No. L-17957

There is no doubt that if the two original certificates of title were issued on different occasions
to two different persons the contention of appellees would be correct it being in line with the
several decisions rendered by this Court.1 But the case at bar is different. Here two certificates
of title were issued to Gavino Amposta over the same parcel of land, one under the
Homestead Law and another under the Cadastral Act. Said titles were regularly issued and on
their face both appear to be valid, and under such predicament it behooves Amposta to choose
which of them he would prefer, as he could not validly make use of both of them. But this
Amposta did not do. On the contrary, he took advantage of the situation by selling the land to
two different persons surrendering to each purchaser the pertinent certificate of title. The
question then that arises is: Who of the two buyers should be considered as the rightful owner
of the land?
On this score, it is important to consider the facts that led to the sale of the land to the parties
herein. Note that Amposta first sold the land to Santos Camacho on November 24, 1941, who
registered it in his name on the same date. And seven years thereafter, or on March 17, 1948,
Amposta again sold the land to the Mangawang brother, who also registered it in their name on
the same date. Since both purchasers apparently have acted in good faith, as there is nothing
in the evidence to show that they did otherwise, we cannot but conclude that the sale made by
Amposta to Santos Camacho is the valid one considering that when Amposta sold the same

May 31, 1962

SALUD DEL ROSARIO VDA. DE JACINTO, ET AL., petitioners,

vs.
PILAR LAZARO VDA. DE JACINTO, ET AL., respondents.
DIZON, J.:
The present action filed in the Court of First Instance of Bulacan by Pilar Lazaro Vda. de
Jacinto and her son, Melchor Jacinto, Jr., against Salud del Rosario Vda. de Jacinto and her
children, is for the reconveyance to them of a parcel of land located in barrio Sto. Rosario,
Paombong, Bulacan, with an area of 5.4574 hectares, covered originally by OCT No. 12515
and at present by TCT No. 5380 issued by the Register of Deeds of Bulacan in the name of
the now deceased Pedro Jacinto.
Their complaint alleged, in substance that the land subject matter thereof was a portion of a
bigger parcel allotted to their predecessor-in-interest, Melchor Jacinto, Sr., when the estate of
the deceased spouses Andres Jacinto and Maria C. Santos was partitioned, and that Melchor's
surviving brother, Pedro, predecessor-in-interest of the defendants, had succeeded in
registering it in his name through fraud and with breach of trust, to their prejudice.

The defendants denied the allegations of the complaint and further alleged that their
predecessor-in-interest had acquired ownership of the property in litigation by virtue of the
provisions of Act 496 and/or by prescription.

supposed to have received from her brother-in-law; that it was only then that she realized for
the first time that the parcel delivered to her had only an area of 5.8829 hectares. The Court
further found that the land in question was not the same parcel allotted to Pedro Jacinto, and
located in the same barrio, which had an area of a little over three hectares only.

After due trial the action was dismissed. On appeal to the Court of Appeals, however, the latter
reversed the decision and rendered judgment as follows:

On the basis of the facts stated above which are now final and beyond review the Court
of Appeals made the following considerations:

IN VIEW OF ALL THE FOREGOING, we find that the errors assigned are well taken. The
decision appealed from, not being in conformity with the evidence and the law on the matter,
should be, as it is hereby reversed and another entered declaring the plaintiffs-appellants
owners of the land described in their complaint and designated as Lot No. 5, plan S.C. No.
11075 (under TCT No. 5830) of the Register of Deeds of Bulacan, and ordering the
defendants-appellees, upon finality of this decision, to reconvey the same to said plaintiffsappellants. We find that appellants' claim for damages are abandoned by them in their appeal,
and that appellees' counterclaim, is unmeritorious. Costs is taxed against the defendantappellees, proportionately.

It is not also controverted that upon a survey of the property (item No. 1 of Exhibit "A", which
should have an area of 11.3403 hectares), when appellant Pilar Lazaro Vda. de Jacinto
decided to sell four (4) hectares of the supposed 11.3403 hectares, there was lacking 54,574
square meters therefrom which incidentally corresponded exactly to Lot No. 5, item No. 2 of
TCT No. 5830, in the name of Pedro Jacinto. Appellees claim, however, that the supposed
11,3403 hectares appearing in Exhibit "A", could have been short of 54,574 square meters and
that the 3.5769 hectares appearing in the receipt Exhibit "1", item No. 3 thereof, could have
been really 5.5474 hectares, which is not the lot in question. The striking coincidence in the
area disputed and that registered in the name of appellees' predecessor-in-interest, more than
catches the eye. Under the partition, the appellants were to receive as one of the properties,
11.3403 hectares of riceland. This being the case, there are no reasons discernible in the
records why, after an actual survey of the said property, 54,574 meters should be lacking
therefrom. It could not be said that the area was just a product of a calculation. When Exhibit
"A" was executed, the boundaries were plainly indicated thereon. As a matter of fact, Exhibit
"A" designated the number of hectares, ares and centiares, which is indicative of the
preciseness of the area to be delivered to the respective heirs. The fact that the lacking
measurement fits exactly with Lot No. 5 of Pedro Jacinto under TCT No. 5830, warrants the
conclusion that Pedro Jacinto to had deprived the appellants herein of their just share. . . .

From the above decision both parties appealed by certiorari. The appeal of Pilar Lazaro and
her son is now G.R. No. L-17955, and that Salud del Rosario and children is G.R. No. L17957.
There is no dispute and the Court of Appeals so found that the land in question originally
belonged to the now deceased spouses Andres Jacinto and Maria C. Santos, both of whom
died intestate survived by their children named Melchor, Sr., (husband of Pilar Lazaro and
father of Melchor, Jr.,) and Pedro (husband of Salud del Rosario and father of her co-parties).
Melchor, Sr. also died intestate before the estate of his parents could be partitioned. After the
estate was partitioned (Exhibit A), their surviving son, Pedro, besides receiving his share,
continued administering the property which corresponded to the heirs of his deceased brother.
Among them was a richland located in barrio Sto. Rosario, Paombong, with an area of 11
hectares, 34 ares and 3 centiares, Pedro Jacinto himself, according to Exhibit A, received as
part of his share a richland in the same barrio, but with an area of 3 hectares, 57 ares and 69
centiares only.
In the year 1926 Pedro Jacinto delivered to the widow of his deceased brother the properties
that corresponded to the latter. This delivery, according to the Court of Appeals, was made only
"in paper" because Pedro did not make an actual delivery of the properties but limited himself
to telling his sister-in-law that there were "kasamas" working for her. One year thereafter,
although the properties composing the estate of his deceased parents had already been
surveyed since June 10, 1913, as shown by Exhibit B, Pedro caused them to be resurveyed,
this resulting in the drawing of Exhibit C. The practical result of the resurvey as found by the
Court of Appeals was that a portion of lot 2 described in Exhibit B, which was subsequently
one of the properties allotted to the heirs of Melchor, was segregated therefrom and was
designated as lot 5 in Exh. C. After the resurvey, Pedro applied to register, and succeeded in
having lot 5 and other properties registered in his name, for which reason OCT No. 12515 was
issued covering three lots numbered 2, 4 and 5. Lot 2 was subsequently sold, so the original
certificate of title was cancelled and TCT No. 583 was issued.1wph1.t
From all the evidence of record the Court of Appeals found that Pilar Lazaro and her son "were
always of the belief, until the latter part of 1953, that he (Pedro) delivered to them all that which
were rightfully theirs"; that they discovered the shortage only when Pilar less than one year
before the action was filed decided to sell the parcel of more than 11 hectares that she was

There are sufficient proofs to show that fraud was practiced by Pedro Jacinto against the
appellants herein. When Pedro supposedly delivered the property, he did it only in paper,
without bringing plaintiff Pilar Lazaro to the premises, although he told her that there were
"kasamas" working for her. On December 15, 1927, Pedro Jacinto caused that the properties
be resurveyed, which resulted in the drawing of Exhibit "C", which in effect amended Exhibit
"B". Part of Lot 2 was segregated and had been designed as lot 5 in Exhibits "C". And this Lot
5 has an area exactly equal to the area which was found lacking in the 11.3403 hectares
belonging to the plaintiffs-appellants. (pp. 6-7 & 9, decision)
As a result of the foregoing, the Court of Appeals held that Pedro Jacinto must be deemed to
have registered the land in question as a trustee for and in behalf of the widow and son of his
deceased brother. The pertinent portion of its decision reads as follows:
Implied Trusts have been said to be those which are raised by legal implication from the facts
and circumstances of the case, to effect the presumed intention of the parties or to satisfy
demands of justice or to protect against fraud (65 C.J. 222), or those enforced by equity
because morality, justice, conscience, and fair dealing demand that the relation be established
(supra). The new Civil Code provides that, "If property is acquired through mistake or fraud, the
person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of
the person from whom the property comes" (Art. 1456). That there was fraud on the part of
Pedro Jacinto in registering the property in his name to the prejudice of the appellants is
revealed by the records. It will be seen that on Exhibit "C", the amended survey of the
properties which Pedro Jacinto and Melchor Jacinto, Sr. inherited from their parents, changes
were made. This resurvey was done at the instance of Pedro Jacinto, in spite of the fact that
on June 10, 1913, the same, properties were already surveyed, divided and delineated (Exhibit

"B"). The boundaries of Lot 5 as appearing in Exhibit "G" (the amended plan) are the same as
those appearing in Exhibit "B" minus the designation as Lot 5 and its segregation from the
greater mass of Lot 2. In Exhibit "E" or "I", a receipt of the properties inherited by Pedro Jacinto
from his father Andres, no property coincide in boundaries with the properties given to Pedro.
Under the above set of facts, it is quite evident that the property in question rightfully belonged
to the plaintiffs and that an implied trust was created between the plaintiffs and the appellees'
father Pedro Jacinto. (pp. 9-10, decision)
The heirs of Pedro Jacinto now contend that the Court of Appeals erred in applying to this case
the law of implied or constructive trusts, and, in holding that, under the facts of the case, the
right of the heirs of Melchor Jacinto to recover the property in question is imprescriptible. We
find these contentions to be without merit.
The following findings of fact made by the Court of Appeals cannot now be questioned: (1)
after the partition of the estate of the deceased spouses Andres Jacinto and Maria C. Santos,
Pedro Jacinto, their surviving son, continued administering the properties allotted to the heirs
of his deceased brother; (2) when he delivered the share of the latter, he withheld delivery of
the parcel of more than 11 hectares allotted, among others, to his aforesaid co-heirs; (3) one
year thereafter he caused the portion withheld from co-heirs to be registered in his name; (4)
the widow and son of his deceased brother did not know that the parcel of land delivered to
them by their co-heir was short of 5 hectares, 45 ares and 74 centiares, and said parties "were
always of the belief, until the latter part of 1953, that he (Pedro) delivered to them all that which
were rightfully theirs". In view of these facts, it would be against reason and good conscience
not to hold that Pedro Jacinto committed a breach of trust which enabled him to secure
registration of the land in question to the prejudice of his co-heirs. Therefore, in an lotion like
the present, he may be ordered to make reconveyance of the property to the person rightfully
entitled to it. In fact, it has been held that even in the absence of fraud in obtaining registration,
or even after the lapse of one year after the issuance of a decree of registration, a co-owner of
land who applied for and secured its adjudication and registration in his name knowing that it
had not been allotted to him in the partition, may be compelled to convey the same to whoever
received it in the apportionment, so long as no innocent third party had acquired rights therein,
in the meantime, for a valuable consideration (Palet vs. Tejedor, 55 Phil. 790-798). Indeed, any
rule to the contrary would sanction one's enrichment at the expense of another. Public policy
demands that a person guilty of fraud or, it least, of breach of trust, should not be allowed to
use a Torrens title as a shield against the consequences of his wrongdoing (Cabanos vs.
Register of Deeds, etc., 40 Phil. 620; Severino vs. Severino, 41 Phil. 343).
Lastly, the claim of the heirs of Pedro Jacinto that the latter had acquired ownership of the
property in litigation by prescription, is likewise untenable. As we have recently held in Juan, et
al. vs. Zuiga, G.R. No. L-17044, April 28, 1962, an action to enforce a trust is imprescriptible.
Consequently, a cohier who, through fraud, succeeds in obtaining a certificate of title in his
name to the prejudice of his co-heirs, is deemed to hold the land in trust for the latter, and the
action by them to recover the property does not prescribe.
On the other hand, in their appeal Pilar Lazaro and her son contend that the Court of Appeals
erred in holding that they had abandoned their claim for damages. We also find this to be
without merit.
As stated heretofore, the Court of First Instance of Bulacan, after the trial, dismissed this case
and the plaintiffs (Pilar Lazaro Vda. de Jacinto and her son) appealed to the Court of Appeals.
In rendering judgment the latter court held that said appellants had abandoned their claim for
damages, presumably because of their failure to make in their brief in assignment of error to

the effect that the Court of First Instance had erred in not awarding them damages. It is now
their contention that having appealed from the dismissal, they were no longer in duty bound to
make a separate specific assignment of error regarding the court's failure to award damages,
because their right to them was entirely dependent upon the favorable resolution of the
assignment of errors made in their brief assailing the dismissal. This argument loses force
upon consideration of the fact that their right to have the reconveyance was one thing, and
their right to damage, another. There could be reconveyance in their favor, without this
necessarily entitling them to damages, as for instance, if they produced no evidence to prove
them, or that produced does not sufficiently prove the claim. It seems clear, therefore, that it
was their duty as appellants to bring up before the Court of Appeals, by specific assignment of
error, this particular question.
WHEREFORE, the decision appealed from being in accordance with law, the same is hereby
affirmed, with costs.

35) FELIPE SEVILLE in his capacity as judicial administrator of the estate of JOAQUIN
ORTEGA and/or FELIPE SEVILLE, EMILIA ESTRADA, MARIA S. TELLDER, MA. ISABEL
SEVILLE, MA. TERESITA LICARDO, FRANCISCO SEVILLE, RAMON O. SEVILLE, JOSE
MARIE SEVILLE, GEMMA ALVAREZ-ASAYAS, ANNABELLE ALVAREZ-GONZALES, SYLVIA
ALVAREZ-LIOK, ADOLFO O. ALVAREZ JR., DIANA ALVAREZ-DABON, MARIA SALVADOR
O. POLANCOS and JOAQUIN ORTEGA II as successors-in-interest of JOAQUIN ORTEGA
and his estate, petitioners, vs. NATIONAL DEVELOPMENT COMPANY, LEYTE SAB-A BASIN
DEVELOPMENT AUTHORITY, PHILIPPINE ASSOCIATED SMELTING AND REFINING
CORPORATION, LEPANTO CONSOLIDATED MINING CO., PHILIPPINE PHOSPHATE
FERTILIZER CORPORATION, CALIXTRA YAP and REGISTER OF DEEDS OF LEYTE,
respondents.
DECISION
PANGANIBAN, J.:
Unless a public land is shown to have been reclassified as alienable or actually alienated by
the State to a private person, that piece of land remains part of the public domain. Hence,
occupation thereof, however long, cannot ripen into ownership.
The Case

Before us is a Petition for Review on Certiorari assailing the November 29, 1996 Decision of
the Court of Appeals[1] (CA), as well as the May 19, 1997 CA Resolution[2] denying the Motion
for Reconsideration. The dispositive part of the CA Decision reads as follows:
WHEREFORE, the appealed decision is REVERSED and SET ASIDE. Another judgment is
hereby rendered dismissing the complaint. The counterclaims of appellants are denied. Costs
against plaintiffs-appellees.[3]
The Facts
The appellate court narrated the undisputed facts in this manner:
1. By virtue of Presidential Decree No. 625, Leyte Sab-A Basin Development Authority
(LSBDA) was created to integrate government and private sector efforts for a planned
development and balanced growth of the Sab-a Basin in the [P]rovince of Leyte, empowered to
acquire real property in the successful prosecution of its business. Letter of Instruction No. 962
authorized LSBDA to acquire privately-owned lands circumscribed in the Leyte Industrial
Development Estate (LIDE) by way of negotiated sales with the landowners.
2. On June 14, 1980, [Respondent] Calixtra Yap sold to LSBDA Lot No. 057 SWO 08-000047
consisting of 464,920 square meters, located at Barangay Sto. Rosario, Isabel, Leyte, covered
under Tax Declarations Nos. 3181, 3579, 3425, 1292 and 4251 under the name of said vendor.
3. On June 1, 1982, appellant LSBDA filed a Miscellaneous Sales Application with the Bureau
of Lands covering said lot together with other lots acquired by LSBDA with an aggregate area
of 442, 7508 square meters.
4. After due notice and investigation conducted by the Bureau of Lands, Miscellaneous Sales
Patent No. 9353 was issued in the name of [Respondent] LSBDA on the basis of which
Original Certificate of Title No. P-28131 was transcribed in the Registration Book for the
[P]rovince of Leyte on August 12, 1983 in the name of [Respondent] LSBDA. On December
14, 1989, LSBDA assigned all its rights over the subject property to its [Co-respondent]
National Development Company (NDC) as a result of which a new Transfer Certificate of Title
was issued on March 2, 1990 by the Registry of Deeds for the province of Northern Leyte in
the name of NDC. The subject property was leased to [Respondents] Philippine Associated
Smelting & Refining Corporation (PASAR), Philippine Phosphate Fertilizer Corporation
(PHILPHOS) and Lepanto Consolidated Mining Co., Inc. (LEPANTO).

ordered to segregate the same area from OCT P-28131 and CONVEY the same to the Estate
of Joaquin Ortega;
3. Upon the segregation of the 735,333 square meters from OCT No. P-28131 the Register of
Deeds of the Province of Leyte is ordered to issue a new title to the said portion in the name of
the Intestate Estate of Joaquin Ortega;
4. [Respondents] LSBDA, NDC, PASAR, are ordered to pay jointly and severally to
[petitioners] the sum of FOUR MILLION SEVEN HUNDRED EIGHTY FOUR THOUSAND
EIGHT HUNDRED FORTY SIX PESOS (P4,784,846.00) as rentals due from 1979 to the
present, plus accrued interest pursuant to par. 2 of the Lease Contract between NDC and
PASAR. (Exhibit 54)
5. [Respondents] LSBDA, NDC, and PHILPHOS are also ordered to pay jointly and severally
[petitioners] the sum of TWO MILLION EIGHTY SIX THOUSAND THREE HUNDRED NINETY
EIGHT PESOS AND SIXTY CENTAVOS (P2,086,398.60) as accrued rentals of PHILPHOS
from 1979 to present, plus the accrued interest for non-payment pursuant to paragraph 2 of the
same Lease Contract cited above;
6. [Respondents] are ordered to pay jointly and severally [petitioners] P200,000.00 as
indemnity for the value of the ancestral home;
7. [Respondents] are also ordered to pay jointly and severally [petitioners] the sum of
P250,000.00 as reimbursement for attorneys fees and the further sum of P50,000.00 as
expenses for litigation;
8. Finally, [petitioners] and [respondents] are ordered to sit down together and discuss the
possibility of a compromise agreement on how the improvements introduced on the
landholding subject of the present suit should be disposed of and for the parties to submit to
this Court a joint manifestation relative thereto. In the absence of any such compromise
agreement, such improvements shall be disposed of pursuant to Article 449 of the New Civil
Code.
Costs against [respondents].
SO ORDERED.[4]
Ruling of the Court of Appeals

5. On November 29, 1988, the Estate of Joaquin Ortega represented by judicial administrator
Felipe Seville filed with the Regional Trial Court (Branch 12) of Ormoc City, a complaint for
recovery of real property, rentals and damages against the above-named [respondents] which
complaint was later on amended on May 11, 1990. [Respondents] filed their respective
Answers. After trial, the trial court rendered judgment the dispositive portion of which reads as
follows:
WHEREFORE, [a] decision is hereby rendered for [petitioners] and against [respondents].
1. The Deed of Sale executed by Calixtra Yap on June 14, 1980 in favor of LSBDA, (Exhibit PP
and 25) conveying the subject property to said LSBDA is declared NULL and VOID ab initio;

Citing the Regalian doctrine that lands not appearing to be privately owned are presumed to be
part of the public domain, the CA held that, first, there was no competent evidence to prove
that the property in question was private in character. Second, possession thereof, no matter
how long, would not ripen into ownership, absent any showing that the land had been
classified as alienable. Third, the property had been untitled before the issuance of the
Miscellaneous Sales Patent in favor of the LSBDA. Fourth, petitioners were guilty of laches,
because they had failed to apply for the judicial confirmation of their title, if they had any. Fifth,
there was no evidence of bad faith on the part of LSBDA in dealing with Yap regarding the
property.
Hence, this Petition.[5]

2. The intestate estate of JOAQUIN ORTEGA is declared the owner in fee simple of the
735,333 square meters real property subject of the present action and defendant NDC is

The Issues

In their Memorandum, petitioners submit the following issues for the consideration of the Court:
[6]
A. Whether or not the sale by Calixtra Yap of the Estate of the Late Joaquin Ortega in favor of
LSBDA was null and void.
B. Whether or not the issuance of a Miscellaneous Sales Patent and an Original Certificate of
Title in favor of LSBDA was valid.
C. Whether or not petitioners are guilty of laches.
D. Whether or not petitioners are entitled to the remedy of reconveyance and the damages
awarded by the trial court.

ownership and be registered as a title. To overcome such presumption, incontrovertible

evidence must be shown by the applicant. Absent such evidence, the land sought to be
registered remains inalienable.
A person in open, continuous, exclusive an notorious possession of a public land for more than
thirty years acquires an imperfect title thereto. That title may be the subject of judicial
confirmation, pursuant to Section 48 of the Public Land Act, which provides:
SECTION 48. The following described citizens of the Philippines, occupying lands of public
domain or claiming to own any such lands or an interest thereon, but whose titles have not
been perfected or completed, may apply to the Court of First Instance of the province where
the land is located for confirmation of their claims, and the issuance of a certificate of title
therefore, under the Land Registration Act, to wit:
xxx xxx xxx

In the main, the Court is called upon to determine the validity of LSBDAs title. In resolving this
issue, it will also ascertain whether, before the issuance of the title, the land was private or
public.
The Courts Ruling
The Petition has no merit.
Main Issue:
Validity of LSBDAs Title
Petitioners argue that LSBDAs title to 73 hectares of the 402-hectare Leyte Industrial
Development Estate was void, having allegedly been obtained from Calixtra Yap who had no
right to it. They maintain that they acquired title to the disputed property by acquisitive
prescription, because they and their predecessors in interest had been in possession of it for
more than thirty years.[7] Although it was the subject of settlement proceedings, petitioners
further claim that Yap sold the same to LSBDA without the permission of the trial court.
Disputing these contentions, respondents and the appellate court maintain that petitioners
have not shown that the land had previously been classified as alienable and disposable.
Absent such classification, they argue that possession of it, no matter how long, could not
ripen into ownership.
We agree with respondents and the appellate court. First. There was no showing that the land
had been classified as alienable before the title was issued to LSBDA; hence, petitioners could
not have become owners thereof through acquisitive prescription. Second, petitioners
challenge to LSBDAs title cannot be granted, because it is based on a wrong premise and
amounts to a collateral attack, which is not allowed by law.
Public Character of the Land
Under the Regalian doctrine, all the lands of the public domain belong to the State, which is
the source of any asserted right to ownership of land. All lands not otherwise appearing to be
clearly within private ownership are presumed to belong to the State.[8] In Menguito v.
Republic,[9] the court held that [u]nless public land is shown to have been reclassified or
alienated to a private person by the State, it remains part of the inalienable public domain.
Indeed, occupation thereof in the concept of owner, no matter how long, cannot ripen into

(b) those who by themselves or through their predecessor in-interest have been in open,
continuous, exclusive and notorious possession and occupation of agricultural lands of the
public domain, under a bona fide claim of acquisition or ownership, for at least thirty years
immediately preceding the filing of the application for confirmation of title except when
prevented by war or force majeure. They shall be conclusively presumed to have performed all
the conditions essential to a Government grant and shall he entitled to a certificate of title
under the provisions of this Chapter.
Under Section 4 of Presidential Decree (PD) No. 1073,[10] paragraph b of the aforecited
provision applies only to alienable and disposable lands of the public domain. The provision
reads:
SEC. 4. The provisions of Section 48 (b) and Section 48 (c), Chapter VIII, of the Public Land
Act, are hereby amended in the sense that these provisions shall apply only to alienable and
disposable lands of the public domain which have been in open, continuous, exclusive and
notorious possession and occupation by the applicant himself or thru his predecessor-ininterest, under a bona fide claim of acquisition of ownership, since June 12, 1945.
It should be stressed that petitioners had no certificate of title over the disputed property.
Although they claim that their title was based on acquisitive prescription, they fail to present
incontrovertible proof that the land had previously been classified as alienable. They simply
brush aside the conclusion of the CA on this crucial point by saying that it was without factual
basis.[11] Instead, they maintain that the private character of the land was evidenced by
various tax declarations, Deeds of Sale, and Decisions of the trial court and even the Supreme
Court.[12]
Petitioners arguments are not convincing. Tax declarations are not conclusive proofs of
ownership, let alone of the private character of the land. At best, they are merely indicia of a
claim of ownership.[13] In Spouses Palomo v. CA,[14] the Court also rejected tax declarations
as proof of private ownership, absent any showing that the forest land in question had been
reclassified as alienable.
Moreover, the Deeds of Sale of portions of the disputed property, which Joaquin Ortega and
several vendors executed, do not prove that the land was private in character. The question
remains: What was the character of the land when Ortega purchased it? Indeed, a vendee

acquires only those rights belonging to the vendor. But petitioners failed to show that, at the
time, the vendors were already its owners, or that the land was already classified as alienable.

of the property from the Bureau of Lands. Indeed, Yap merely conveyed a claim, not a title
which she did not have.

Also misplaced is petitioners reliance on Ortega v. CA,[15] in which the Supreme Court
allegedly recognized the private character of the disputed property. In that case, the sole issue
was whether the respondent judge xxx acted in excess of jurisdiction when he converted Civil
Case No. 1184-O, an action for quieting of title, declaration of nullity of sale, and annulment of
tax declaration of a parcel of land, into an action for the declaration of who is the legal wife,
who are the legitimate children, if any, and who are the compulsory heirs of the deceased
Joaquin Ortega.[16] The Court did not all make any ruling that the property had been classified
as alienable.

Collateral Attack
There is another reason for denying the present Petition. Petitioners insist that they are not
seeking the re-opening of a decree under the Torrens system. Supposedly, they are only
praying for the segregation of 735,333 square meters of land, or 73 hectares more or less from
the OCT No. P-28131 issued to LSBDA.[21] This disputation is mere quibbling over the words,
plain and simple.

In any event, Ortega arose from a suit for quieting of title, an action quasi in rem that was
binding only between the parties.[17] The present respondents as well as the Bureau of Lands,
which subsequently declared that the land was public, are not bound by that ruling, because
they were not impleaded therein.

Semantics aside, petitioners are effectively seeking the modification of LSBDAs OCT, which
allegedly encompassed even a parcel of land allegedly belonging to them. Hence, the present
suit, purportedly filed for the recovery of real property and damages, is tantamount to a
collateral attack not sanctioned by law. Section 48 of PD 1529, the Property Registration
Decree, expressly provides:

While petitioners refer to the trial court proceedings supposedly recognizing the private
character of the disputed property, they make no claim that these cases directly involve the
classification of the land, or that the Bureau of Lands is a party thereto.

SEC. 48. Certificate not subject to collateral attack. -- A certificate of title shall not be subject to
collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in
accordance with law.

Clearly, the burden of proof that the land has been classified as alienable is on the claimant.
[18] In the present case, petitioners failed to discharge this burden. Hence, their possession of
the disputed property, however long, cannot ripen into ownership.

It has been held that a certificate of title, once registered, should not thereafter be impugned,
altered, changed, modified, enlarged or diminished, except in a direct proceeding permitted by
law. Otherwise, the reliance on registered titles would be lost.[22]

LSBDAs Title

Moreover, the title became indefeasible and incontrovertible after the lapse of one year from
the time of its registration and issuance.[23] Section 32 of PD 1529 provides that [u]pon the
expiration of said period of one year, the decree of registration and the certificate of title shall
become incontrovertible. Any person aggrieved buy such decree of registration in any case
may pursue his remedy by action for damages against the applicant or other persons
responsible for the fraud. Although LSBDAs title was registered in 1983, petitioners filed the
amended Complaint only in 1990.

Equally unmeritous is the argument of petitioners that the title of LSBDA is void. As earlier
stated, they claim that such title was derived from Calixtra Yap, who was allegedly not the
owner of the property. Petitioners assume that LSBDA, having acquired the rights of Yap,
resorted to a confirmation of her imperfect title under Section 48 of the Public Land Act. This
argument is devoid of factual or legal basis.
Petitioners fail to consider that the title of LSBDA was based, not on the conveyance made by
Yap, but on Miscellaneous Sales Patent No. 9353 issued by the director of the Bureau of
Lands. In fact, after LSBDA had filed an application for patent, the Bureau of Lands conducted
an investigation and found that the land was part of the public domain. After compliance with
the notice and publication requirements, LSBDA acquired the property in a public auction
conducted by the Bureau of Lands.[19]
Petitioners insist, however, that LSBDA was estopped from claiming that the land was public,
because the Deed of Sale executed by Yap in its favor stipulated that the seller is the absolute
owner in fee simple of the xxx described property.[20] It is scarcely necessary to address this
point. To begin with, the power to classify a land as alienable belongs to the State, not to
private entities. Hence, the pronouncements of Yap or LSBDA cannot effect the reclassification
of the property. Moreover, the assailed misrepresentation was made by Yap as seller. Hence,
objections thereto should be raised not by petitioners but by LSBDA, the contracting party
obviously aggrieved.
In any case, the actions of LSBDA after Yaps conveyance demonstrated its position that the
disputed land was part of the public domain. That this was so can be inferred from LSBDAs
subsequent application for a Miscellaneous Sales Patent and, in a public auction, its purchase

Reconveyance
Petitioners also claim that the disputed property should be reconveyed to them. This cannot be
allowed. Considering that the land was public before the Miscellaneous Sales Patent was
issued to LSBDA, petitioners have no standing to ask for the reconveyance of the property to
them. The proper remedy is an action for reversion, which may be instituted only by the Office
of the Solicitor General, pursuant to section 101 of the Public Land Act, which reads as follows:
SEC. 101. All actions for the reversion to the Government of lands of the public domain or
improvements thereon shall be instituted by the Solicitor General or the officer acting in his
stead, in the proper courts, in the name of the [Republic] of the Philippines.
Verily, the prayer for reconveyance and, for that matter, the entire case of petitioners rest on
the theory that they have acquired the property by acquisitive prescription; and that Yap,
without any right or authority, sold the same to LSBDA.
Conclusion

In the light of our earlier disquisition, the theory has no leg to stand on. Absent any showing
that the land has been classified as alienable, their possession thereof, no matter how lengthy,
cannot ripen into ownership. In other words, they have not become owners of the disputed
property. Moreover, LSBDAs title was derived from a Miscellaneous Sales Patent, not from
Yap. Finally, petitioners cannot, by a collateral attack, challenge a certificate of title that has
already become indefeasible and incontrovertible.
If petitioners believe that they have been defrauded by Yap, they should seek redress, not in
these proceedings, but in a proper action in accordance with law.
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs
against petitioners.

Plaintiff- appellee (Director of Lands) in his complaint alleged that defendant- appellant (Maria
Abanilla had, through fraudulent means, secured a free patent and an original certificate of title
over a public land known as Lot No.5798, Pls 62, situated in Roxas, Isabela; that the said free
patent and original certificate of title included portions of land occupied by Esteban Esquivel
and Wilson Nuesa; and that the portion occupied by Wilson Nuesa was sold to him by
Dominador Cullanan who also bought the same from defendant-appellant Abanilla herself.
Defendant-appellant Abanilla in her answer alleged that her application for a free patent over a
parcel of public land, known as 14t No. 5798, Pls-62, and the sub t is of the original certificate
of title, were lawful since the occupancy of Esteban Esquivel of the portion claimed by him of
Lot No. 5798, Pls-62, was merely tolerated by her and was never adverse, and Wilson Nuesa's
occupancy never her right over the portion he claims, because the sale made by her to
Dominador Cullanan was void ab initio
The trial court entered a judgment, declaring Free Patent No. V-2317 and the corresponding
Original Certificate of Title No. P-2317 null and void, ordering the Director of Lands to cancel
said patent and issue another patent in favor of Maria A excluding the respective portions of
land by Esteban Esquivel and Wilson Nuesa and ordering Maria Abanilla to surrender to the
Register of Deeds of Isabela Original Certificate of Title No. P-2723, who was thereby ordered
to cancel the same (p. 16, CFI rec.).
This being an appeal on question of law exclusively, We therefore consider as conclusive the
following findings of fact made by the trial court:

36) THE DIRECTOR OF LANDS, plaintiff-appellee,

vs.
MARIA ABANILLA and THE REGISTER OF DEEDS OF ISABELA, defendants, MARIA
ABANILLA, defendant-appellant.
MAKASIAR, J.:
This is a direct appeal to the Supreme Court on a pure question of law from the decision of the
then Court of First Instance of Isabela, 1st Judicial District, Branch 1, in Civil Case No. 1308,
ordering the cancellation of Free Patent No. V2317 and Original Certificate of title No. P-2723
issued in favor of defendant-appellant.

The evidence shows that on April 5, 1949, Maria Abanilla applied for Free Patent over a public
land known as Lot No. 5798, Pls-62, situated in Roxas, Isabela; That on March 19,1952,
Esteban Esquivel having discovered that the said Free Patent Application included a portion of
land occupied by him since before the early part of 1949, registered his opposition therein and
asked the Bureau of Lands to investigate the matter (Exh. 'G') that on May 12, 1962,
Dominador Cullanan also registered his opposition to the said Free Patent Application upon
the ground that it included a portion of the land sold to him by Maria Abanilla by virtue of a
public document dated April 20, 1950 (Exh. 'J') that on July 3, 1952, for and in consideration of
the sum of Pl,000.00, Dominador Cullanan sold the same portion of land to Wilson Nuesa by
virtue of a public instrument notarized before the Municipal Judge of Roxas (Exh. 'K') that
pursuant to the protest filed by Esteban Esquivel the Director of Lands, on March 29, 1952,
ordered the investigation of said protest (Exh. 'E') that by reason of the acquisition of the same
land holding of Dominador Cullanan by Wilson Nuesa, the latter intervened in the
Administrative Investigation of the land conflict between Esteban Esquivel and Maria Abanilla
as claimant- intervenor (Exh. 'I') that while the aforesaid administrative case was pending
investigation by the Fact Finding Commitee composed of representatives of the Bureau of
Lands and the Land Settlement and Development Corporation (LASEDECO) Maria Abanilla,
on February 11, 1953, secured the issuance of Free Patent No. V-2317 in her name covering
the entire Lot No. 5798, Pls-62, with an area of 2.1664 hectares; that by virtue of the said
patent, Original Certificate of Title No. P-2723 was issued in her name by the Register of
Deeds of Isabela on June 16, 1953 (Exh. '1'); that on June 25, 1953, the Fact Finding
Committee heard the administrative case aforesaid and submitted its report on July 31, 1953,
sustaining the 'claim of preferential right' of Esteban Esquivel and that of Claimant-Intervenor
Wilson Nuesa and recommending the annulment of Patent No. P-2317, as well as the Original
Certificate of Title No. P-2723 in the name of Maria Abanilla insofar as the portions claimed by
them are concerned (Exh. '1'); that acting upon the said report the Director of Lands rendered
a decision holding that Maria Abanilla acted in bad faith and procured the issuance of the

aforesaid patent thru misrepresentation and directing that appropriate steps be taken to
institute court action for the Avoidance and cancellation of Patent No. V-2317 and the issuance
of another patent for the correct area adjudicated to her in the said decision, excluding
therefrom the portions claimed by Nuesa and Esquivel (Exh. 'N') that Maria Abanilla filed a
motion for reconsideration dated May 5, 1954 (Exh. 'O'); to set aside the aforesaid decision,
and on August 30, 1956, the motion for reconsideration was denied by the Director of Lands
(Exh. 'P') that upon the denial of her motion she filed a second motion for reconsideration
dated September 29, 1956 (Exh. 'Q') which was similarly denied by the Director of Lands in his
Order dated October 19, 1956 (Exh. 'R') that on November 19, 1956 she filed a notice of
appeal against the decision of the Director of Lands and asked that the same be reviewed and
reversed by the Secretary of Agriculture and Natural Resources (Exh. 'S') that on January 16,
1958, the Secretary of Agriculture and Natural Resources affirmed the derision of the Director
of Lands appealed from and the appeal; and that on August 27,1958, the Secretary denied the
motion for reconsideration to set aside his co nfirmatory n (Exh. 'U').
That on November 5, 1956, Maria Abanilla filed an action with this Court against Esteban
Esquivel Wilson Nuesa and three other for the recovery of possession of the portions of land
involved in the administrative case between them in the land department; that after due trial,
the Court rendered a decision in favor of the defendants Wilson Nuesa and Esteban Esquivel
and against the plaintiff dismissing the complaint, that Maria Abanilla brought the cam on
appeal to the Court of Appeals which affirmed in toto the appealed from, on June 14, 1960
(Exh. 'V'); that on August 11, 1959, the Director of Lands filed this present case to annul the
patent and original certificate of title issued to Maria Abanilla (pp. 13-14, CFI rec.).
The case is now before this Court on a pure question of law: Whether the patent and original
certificate of title issued by virtue of the said patent can still be cancelled despite the of six (6)
years and six (6) months from their is issuance.
Defendant appellant now claimed that the lower [1] in ordering the cancellation of both Free
Patent No. v-2317 and Original Certificate of Title No. P-2327 of the Register of Deeds of
Isabela, both in the name of Maria A - and 12] in not dismissing the action considering that a
period of six (6) years and six (6) months had already elapsed from February 11, 1953 when
the land patent was issued to August 11, 1959 when the present action was instituted in the
trial court (pp. 48-49, rec.).
WE find that the trial court did not commit either of the assigned errors.
It should be noted that, pursuant to explicit and repeated averments in the complaint
defendant-appellant Maria Abanilla had acted in bad faith, with full knowledge of the factual
background of the case, particularly of the public, continuous and adverse possession of
Esteban Esquivel at the nine she applied for patent over the land in question, and up to the
time she secured the issuance of an original certificate of title over the said land. The fact that
Maria Abanilla acted fraudulently in securing patent No. V-2317 and Original Certificate of Title
No. P-2723 was clearly and definitely established in the decision of the Director of Lands (Exh.
'N'), where it was held that Maria Abanilla acted in bad faith and procured the issuance of the
aforesaid patent thru misrepresentation and directed that appropriate steps be taken to
institute a court action for the voidance and cancellation of Patent No. V-2317 and the
issuance of another patent for the correct area adjudicated to her in the said decision,
excluding therefrom the portions claimed by Nuesa and Esquivel. Appellant Maria Abanilla
even exhausted her administrative remedies by appealing to then Secretary of Agriculture and
Natural Resources (now Minister of Natural Resources) [Exh. 'S'] who affirmed the decision of
the Director of Lands [Exh. 'U']

This Court held in the case of Eusebio vs. Sociedad Agricola de Balarin (L-21519, March 31,
1966, 16 SCRA 569) that the factual findings of the Director of Lands, approved by the
Secretary of Agriculture and Natural Resources, are conclusive in the absence of proof of
fraud, imposition, error or abuse of discretion.
This Court reiterated said principle in Ramirez vs. Court of Appeals (1,23591, Oct. 31, 1969, 30
SCRA 297).
In the previous case filed by Abanilla herself against the same c claimants Esquivel and
Nuesa, decided on June 14, 1960, the Court of Appeals, speaking thru then CA Justice, later
Associate Justice of the Supreme Court, Conrado V. Sanchez, concurred in by then CA
Justices Natividad and Angeles, both of whom were promoted as Associate Justices of the
Supreme Court, found:
... So that, as the case now stands, the dispute solely is between appellant Maria Abanilla on
the one hand, and appellees Esteban Esquivel and Wilson Nuesa, on the other.
On April 5, 1949, appellant Maria Abanilla Med with the Bureau of lands an application for free
patent over Lot Nor 5798, Pls-62, aforesaid.
On March 19, 1952, appellee Esteban Esquivel registered his opposition to appellant's
application upon the ground that the same included a portion of land-circumscribed by the
letters C, D, G and H of the sketch shown in Exhibit 5- which pertained to appellee.
On May 12, 1952, Dominador C opposed appellant's application upon the averment that the
same also covered an area designated in the sketch set forth in Exhibit 5 by the letters A, B, E
and F-which was sold to him by the very same applicant Maria Abanilla In view of the fact that
Dominador Cullanan had since conveyed his holding to appellee Wilson Nuesa, the latter
intervened in the proceedings.
On February 11, 1953, while the protests heretofore mentioned were pending investigation,
Free Patent No. V-2317, covering the entire Lot No. 5798, Pls-62, with an area of 2.1664
hectares, was issued in the name of appellant Maria Abanilla
On June 16, 1953, Original Certificate of Title No. P-2723 covering the same land was issued
by the Register of Deeds of Isabela to said Maria Abanilla
On June 25, 1953, the fact-finding committee of the Bureau of Lands and the Land Settlement
and Development Corporation -obviously unaware of the prior issuance of a patent and title
over the land-opened hearings on the protests of appellee Esquivel, and Cullanan who was
substituted by appellee Wilson Nuesa.
On March 20, 1954, decision was rendered by the Director of Lands holding that applicant
Maria Abanilla was guilty of bad faith and that she procured the free patent over the land thru
misrepresentation, and stating that steps would be taken to institute the necessary court action
for the cancellation of Patent No. V-2317 and the issuance to Maria Abanilla of another patent
for the correct area adjudged to her in said decision, that is, excluding the portions claimed by
Esquivel and Nuesa.
On August 30, 1956, the motion for reconsideration filed by appellant Maria Abanilla was
denied by the Director of Lands.

On October 19, 1956, appellant's second motion for reconsideration was similarly denied.

citation of authorities is that which says that oral evidence to overcome a notarial document
must be clear, convincing and beyond a mere preponderance. Here, appellant's evidence her
sole testimony is notches below the legal yardstick.

On November 5, 1956, appellant started the present suit.

It subsequently developed that on November 22, 1956, appellant perfected an appeal from the
decision of the Director of Lands aforesaid to the Secretary of Agriculture and Natural
Resources.
On January 16, 1958, the Secretary of Agriculture and Natural Resources affirmed in toto the
decision of the Director of Lands.
On August 27, 1958, the said Secretary denied appellant's motion to reconsider the
confirmatory decision.
We win take up the case piecemeal meal.
Appellee Esteban Esquivel as aforesaid, claimed the portion inclosed by comers C, D, G and
H in the sketch appearing in Exhibit 5. The evidence shows that he first entered that land in
1949 when the same was still covered with forest. He cleared and levelled the same. Since
then, his occupancy was open, continuous and without molestation or interference from
anyone, much less from appellant he introduced improvements thereon, i.e., his house, an
annex thereto for restaurant and store purposes, a pumpwell, and a fence around the
premises.
Appellant claims that this portion of the land, together with a house used as a shed for drying
leaf tobacco, was ceded by her in 1952 to Esquivel on a temporary basis as the latter had no
place to live in; that one time she sent her son to cut bamboos behind that house but Esquivel
objected and claimed that he owned the land and forthwith told appellant's son to get out
therefrom; and that she requested Esquivel to pay P30.00 for the use of the lot, and P20.00 for
the use and occupation of the house.
Apart from the fact that the foregoing version runs counter to the decision of the Director of
Lands which was confirmed by the Secretary of Agriculture and Natural Resources, the
improbability of the same is quite apparent. If appellant's claim were true, it is strange that no
attempt was ever made by her to promptly oust Esquivel from tire land. Indeed, if at any nine
appellant ever asserted that the portion occupied by Esquivel was part of the land applied for
by her that she made known this fact to Esquivel, the latter, doubtless, would not have placed
valuable improvements thereon. That he did, is indicative of the fact that nobody ever
challenged his occupancy thereof.
On the defense of appellee Wilson Nuesa, we find that on April 20, 1950, in consideration of
P500.00, appellant Maria Abanilla executed in favor of Dominador Cullanan a deed of sale
covering the portion hereinbefore described. In that deed, Exhibit 1, appellant warranted that
she was the absolute owner of the portion sold, the same being her share of the conjugal
partnership with her late husband Donato Pilar. She never mentioned in that document that
said property was part of the public domain which, on April 5, 1949, she previously applied for
under a free patent. Of course, in court she tried to avoid the effects of this writing. When
confronted with her thumbmark thereon, she stated in varying terms that she probably'
executed that document, or that 'I do not know whether that is my thumbmark,' or that 'I doubt
if I impressed my thumbmark.' The obvious weakness of this explanation prevents us from
accepting the same. Exhibit 1 is a notarial document. A rule so well settled as to require

Alternatively, appellant states that the deed, Exhibit 1, is null and void because the subject
thereof is public land which is beyond the commerce of man. The sale was executed before
the order for the issuance of the patent in her favor. The same could, therefore, be treated as a
disposition of her rights as a free patent applicant which is sanctioned by law. In pari materia:
Gabon, et al. vs. Amboy, et al., CA-G.R. No. 20556-R, July 22,1959.
Appellee Wilson Nuesa acquired the rights of Dominador Cullanan to the portion sold to the
latter by appellant Under the deeds of sale, Exhibits 2 and 4. Neither ' Dominador, nor Wilson
Nuesa was ever disturbed in their possession of said land.
It will be observed, however, that upon examination of the sketch in Exhibit 5, the land
acquired from appellant by and subsequently sold to Nuesa included the strip of land in the
actual possession of Esteban Esquivel As a result of the investigation of the protests against
appellant's application, Nuesa recognized the rights of Esquivel to the portion occupied by him.
So that no quarrel exists as between Esquivel on the one hand, and Nuesa, on the other.
We do not believe that appellant has any lawful claim against appellee Wilson Nuesa. The
Portion of land here involved was sold by appellant herself as her own private property. She
cannot now turn back and say that said portion is public land. Here, the matter is exclusively
between her and Wilson Nuesa, her vendee's successor-in interest. The government is not
involved. As against appellee Wilson Nuesa, therefore, appellant is in estoppel. Section 68(a),
Rule 123, Rules of Court; Article 1431 and 1434, Civil Code; Llacer vs. Munoz de Bustillos, et
al., 12 Phil. 328, 334.
Furthermore, assuming that the area sold by appellant to Cullanan was public land, the free
patent in favor of the former cannot be used as a weapon to oust appellee Wilson Nuesa
Cullanan's vendee from that land. In the same way, said free patent did not give appellant
protection against the adverse claim of Esquivel. She knew or was charged with knowledge, of
Esquivel's actual possession of the portion claimed by him. And, the Patent in her favor is in
fraud of the rights of both Nuesa and Esquivel. Accordingly, she must respect the rights of the
two to their respective holdings.
It would not help appellant any to say that the Director of Lands was without jurisdiction in
sustaining the claims aforesaid. For, said adverse claims were filed long before the patent was
issued. As we have heretofore intimated, that patent literally passed thru the backdoor.
The following from Acot, et al. vs. Kempis, et al., 55 Off. Gaz., No. 16, pp. 2907, 2912, is
illuminating.
We start with the premise that appellant acquired the patent and Torrens title through fraud.
Appellant clings to the legal fiction of indefeasibility of a Torrens title. But piercing the shard of
his paper title, we find that appellant has no equitable right to the possession of the land
covered thereby. He cannot use that title as a shield to perpetuate fraud. Our reason is that no
amount of legal technicality may serve as a solid foundation for the enjoyment of the fruits of
fraud. Fraus et jus nunquam co-habitant.'
WHEREFORE, finding that the decision appealed from is in conformity with the facts and the
law, the same is hereby affirmed.

Said decision became final and executory on July 18, 1960.

Therefore, it is beyond question that fraud was committed by Maria Abanilla in securing her
patent and original certificate of title over a public land, known as Lot No. 5798, Pls-62,
situated in Roxas, Isabela.
In this regard the controlling provisions of the Public Land Act (Com. Act No. 141, as
amended), reads:
Sec. 90. Every application filed under the provisions of this Act shall be made under oath and
shall set forth:
xxx

xxx

xxx

(g) Whether all or part of the land is occupied or cultivated improved and by giving his post
office address, and whether the land has been occupied or cultivated or improved by the
applicant or his ascendant, the date when the possession and cultivation began, and a
description of the improvements made, accompanying satisfactory evidence of the relationship
of the applicant with the ascendant, and of the death of the latter and the descendants left by
him, in case it is alleged that he occupied and cultivated the first; or whether there are
indications of its having been occupied cultivated or improved entirely or partially, and if so, in
what such indications consist, whether he has made investigations as to when and by whom
such improvements were made, and if so, how such investigations were made and what was
the result thereof, or whether the land is not occupied, improved or cultivated either entirely or
partially, and there are no indications of it having ever been occupied, improved, or cultivated,
and in this case, what is the condition of the land (Emphasis supplied).
Sec. 91. The statements made in the application shall be considered as essential conditions
and parts of any concession, title, or permit issued on the basis of such application, and any
false statement therein or omission of facts altering, changing, or modifying, the consideration
of the facts set forth in such statements, and any subsequent modification, alteration, or
change of the material facts set forth in the application shall ipso facto produce the cancellation
of the concession title or permit granted ... (Emphasis supplied).

apply to a grant tainted with fraud and secured through misrepresentation, such as the free
patent invoked in this case, since said grant is null and void and of no effect whatsoever. As
We held in J.M. Tuason & Co., Inc. vs. Macalindog (L-15398, Dec. 29, 1962, 6 SCRA 938):
We are in accord with appellant's contention that Act 496 is not intended to shield fraud and
that registration thereunder merely confirms titler but does not vest any, when there is none,
because registration under the Torrens System is not a mode of acquiring ownership.
Furthermore, appellant Maria Abanilla cannot pretend that her title has become indefeasible
because no petition for review thereof was filed within one year from its issuance, since
proceedings for the review of her patent was actually pending before and after the issuance of
appellant's torrens title. According to the findings of fact of the trial court, the patent of Maria
Abanilla was under administrative investigation by the office of the appellee Director of Lands
at the time she obtained her torrens title pursuant thereto (Exhs. G, H, and I), and that the
decision of the appellee ordering the cancellation of appellant's patent on the ground of fraud
was rendered on March 20, 1954 (Exh. N), or less than a year from the issuance of her torrens
title on June 16, 1953 (Exh. I). It was also less than a year from the issuance of said torrens
title that appellant, on May 5, 1954, filed a motion for the reconsideration of said decision of the
Director of Lands (Exh. O), which motion for reconsideration was denied on August 30, 1956
(Exh. P), from which denial appellant Abanilla filed a second motion for reconsideration (Exh.
Q), and when said motion for reconsideration was likewise denied (Exh. R), appellant Abanilla
even appealed to the Secretary of Agriculture and Natural Resources (Exh. S), who, however,
affirmed the decision of the Director of Lands ordering the cancellation of her patent.
In the previous action aforecited, between herein appellant Maria Abanilla and the other parties
claimants Esteban Esquivel, Magno Velayo, Sotero Nuesa, Wilson Nuesa and Teofilo Nobleza
of the same land in question wherein appellant Abanilla sought to use her torrens title as basis
to recover portions of said land from the defendants (Maria Abanilla vs. Esteban Esquivel, et
al., No. 22660-R, 57 O.G. No. 28, pp. 5104-5108, June 14, 1960), the Court of Appeals,
speaking through the Honorable Conrado V. Sanchez, expressly found appellant's free patent
to have been obtained "in fraud of the rights" of the other private parties claimants thereto, so
that to hold that such patent, which "literally passed through the backdoor," cannot be used "as
a shield to perpetrate a fraud" (Exh. V, p. 39, Folder of Exhibits; p. 73, rec.).

In the light of the above-quoted provisions, defendant-appellant Maria Abanilla cannot use her
title as a shield to perpetuate fraud. "No amount of legal technicality may serve as a solid
foundation for the enjoyment of the fruits of fraud. Fraus et jus numquam co-habitant" (Acot et
al. vs. Kempis, et al., supra).

In Republic vs. Animas (L-37682, March 29, 1974, 56 SCRA 499). petitioner Director of Lands
sought the review of the order of the Court of First Instance of South Cotabato, dismissing the
complaint instituted by the said Director of Lands, to declare null and void a free patent and the
original certificate of title based thereon, which was fraudulently secured. WE hereby quote
pertinent portions thereof:.

Section 91 of the C.A. No. 141, as amended, expressly provides that any false statement in
the application, which is an essential condition of the patent or title, "shall ipso facto produce
the cancellation of the concession, title, or permit granted."

... The complaint alleges in its paragraph 8 that applicant Isagani Du Timbol was never in
possession of the property prior to his filing the application, contrary to the provisions of law
that the applicant must have been in possession or cultivation thereof for at least 30 years; ...

Defendant-appellant clings to the legal fiction of indefeasibility of a Torrens Title. She claimed
that the lower court erred in not dismissing the action considering that a period of six years and
six months had already elapsed when the present action was instituted, in view of the line of
decisions of this Court sustaining the indefeasibility of a certificate of title issued in pursuance
of a public land patent.

The abovealleged circumstances are indicative of fraud in the filing of the application and
obtaining title to the land and if proven would override respondent Judge's order dismissing the
case without hearing. The misrepresentations of the applicant that he had been occupying and
cultivating the land and residing thereon are sufficient grounds to nullify the grant of the patent
and title under Section 91 of the Public Land Law, ...
A certificate of title that is void may be ordered cancelled. A title will be considered void if it is
procured through fraud, as when a person applies for registration of the land under his name
although the property belongs to another. In the case of disposable public lands, failure on the

The doctrine in Heirs of Carle Sumail, and other cases cited by the appellant regarding the
indefeasibility of title issued pursuant to a free patent one year after its issuance does not

part of the grantee to comply with the conditions imposed by law is a ground for holding such
title void (Director of Lands vs. Court of Appeals, et al. G. R. No. L-17696, May 19, 1966, 17
SCRA 71, 79-80; emphasis supplied The lapse of the one year period within which a decree of
title may be reopened for fraud would not prevent the cancellation thereof for to hold that a title
may become indefeasible by registration even if such title had been secured through fraud or
in violation of the law, would be the height of absurdity Registration should not be a shield of
fraud in securing title (J.M. Tuason & Co., Inc. vs. Macalindog, L-15398, December 29, 1962, 6
SCRA 938 page 38) [emphasis supplied].
This Court, in the same case, further held that prescription of action to review a title after the
lapse of one year from its issuance under Section 38 of Act 496, cannot be invoked against the
State, since under paragraph 4 of Article 1108 of the Civil Code, prescription does not run
against the State, and We quote:
Considering that it is the State that is seeking the cancellation of the title of respondent Isagani
Du Timbol said title has not become indefeasible for prescription cannot be invoked against the
State. A title founded on fraud may be cancelled, notwithstanding the lapse of one year from
the issuance thereof, through a petition filed in court by the Solicitor General, ...
Even granting that the Director of Lands can no longer question the validity of a torrens title
after the lapse of one year from registration under Section 38 of Act 496, still appellant Maria
Abanilla is estopped from claiming that this action has already prescribed. The established
facts on the record of the administrative case in the Lands Department involving the same
subject matter in this case show that defendant Maria Abanilla even before the grant of the
subject patent in her favor had allowed herself to submit to an administrative investigation of
this case when she appeared on one occasion in the course thereof and requested for the
postponement of the same on the ground that she desired to settle the case amicably.
'thereafter, she pursued her alleged right to the patent by exhausting all her' administrative
remedies in the Lands Department. Appellant Maria A is now estopped from claiming that this
action had already prescribed for the simple reason that she can be considered an
instrumental party in the delay in the flung of the instant action (p. 26, rec.).
In Cebedo vs. Director of Lands (2 SCRA 25), this Honorable Court held that "it is not only the
right but the duty of the Director of Lands to conduct investigation to determine whether steps
should be taken in the proper court for the annulment of the title or titles theretofore issued,
and to file the corresponding court action for the reversion of the properties to the State, if the
facts disclosed in the course of the investigation so warrant."
It was in pursuance of the above and similar rulings of this Court that the appellee Director of
Lands filed the present action for cancellation of Abanilla's patent and title over the land in
question.
WHEREFORE, FINDING THAT THE DECISION APPEALED FROM IS IN CONFORMITY
WITH THE FACTS AND THE LAW, THE SAME IS HEREBY AFFIRMED. DOUBLE COSTS
AGAINST DEFENDANT APPELLANT.
37) DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS and
CARLOS CAJES, respondents.
DECISION
MENDOZA, J.: Misact
This is a petition for certiorari seeking to reverse the decision[1] and resolution[2] of the Court
of Appeals dated August 30, 1996 and April 23, 1997, respectively, declaring private

respondent Carlos Cajes the owner of 19.4 hectares of land embraced in TCT No. 10101 and
ordering the segregation and reconveyance of said portion to him.
The antecedent facts are as follows:
The land in dispute, consisting of 19.4 hectares located in San Miguel, Province of Bohol, was
originally owned by Ulpiano Mumar, whose ownership since 1917 was evidenced by Tax
Declaration No. 3840.[3] In 1950,[4] Mumar sold the land to private respondent who was
issued Tax Declaration No. R-1475 that same year.[5] The tax declaration was later
superseded by Tax Declaration Nos. R-799 issued in 1961[6] and D-2247 issued in 1974.[7]
Private respondent occupied and cultivated the said land,[8] planting cassava and camote in
certain portions of the land.[9]
In 1969, unknown to private respondent, Jose Alvarez succeeded in obtaining the registration
of a parcel of land with an area of 1,512,468.00 square meters,[10] in his name for which he
was issued OCT No. 546 on June 16, 1969.[11] The parcel of land included the 19.4 hectares
occupied by private respondent. Alvarez never occupied nor introduced improvements on said
land.[12]
In 1972, Alvarez sold the land to the spouses Gaudencio and Rosario Beduya to whom TCT
No. 10101 was issued.[13] That same year, the spouses Beduya obtained a loan from
petitioner Development Bank of the Philippines for P526,000.00 and, as security, mortgaged
the land covered by TCT No. 10101 to the bank.[14] In 1978, the SAAD Investment Corp., and
the SAAD Agro-Industries, Inc., represented by Gaudencio Beduya, and the spouses Beduya
personally executed another mortgage over the land in favor of petitioner to secure a loan of
P1,430,000.00.[15] Sdjad
The spouses Beduya later failed to pay their loans, as a result of which, the mortgage on the
property was foreclosed.[16] In the resulting foreclosure sale held on January 31, 1985,
petitioner was the highest bidder.[17] As the spouses Beduya failed to redeem the property,
petitioner consolidated its ownership.[18]
It appears that private respondent had also applied for a loan from petitioner in 1978, offering
his 19.4 hectare property under Tax Declaration No. D-2247 as security for the loan. As part of
the processing of the application, a representative of petitioner, Patton R. Olano, inspected the
land and appraised its value.
Private respondents loan application was later approved by petitioner.[19] However after
releasing the amount of the loan to private respondent, petitioner found that the land
mortgaged by private respondent was included in the land covered by TCT No. 10101 in the
name of the spouses Beduya. Petitioner, therefore, cancelled the loan and demanded
immediate payment of the amount.[20] Private respondent paid the loan to petitioner for which
the former was issued a Cancellation of Mortgage, dated March 18, 1981, releasing the
property in question from encumbrance.[21]
Sometime in April of 1986, more than a year after the foreclosure sale, a re-appraisal of the
property covered by TCT No. 10101 was conducted by petitioners representatives. It was then
discovered that private respondent was occupying a portion of said land. Private respondent
was informed that petitioner had become the owner of the land he was occupying, and he was
asked to vacate the property. As private respondent refused to do so,[22] petitioner filed a
complaint for recovery of possession with damages against him. The case was assigned to
Branch 1 of the Regional Trial Court, Tagbilaran City,[23] which after trial, rendered a decision,

dated August 22, 1989, declaring petitioner the lawful owner of the entire land covered by TCT
No. 10101 on the ground that the decree of registration was binding upon the land.[24] The
dispositive portion of the decision reads:
WHEREFORE, foregoing considered, the court renders judgment:
1.......Declaring plaintiff bank Development Bank of the Philippines the true and legal owner of
the land in question covered by TCT No. 10101 farm of Gaudencio Beduya;
2.......Dismissing defendants counterclaim; Sppedsc
3.......Ordering defendant to vacate from the land in question; the portion of which he claims to
belong to him for without basis in fact and law;
4.......Ordering defendant, his agents or any person representing him or those who may claim
substantial rights on the land to vacate therefrom, cease and desist from disturbing, molesting
and interfering plaintiffs possession of the land in question, and from committing any such act
as would tend to mitigate, deny or deprive plaintiff of its ownership and possession over said
land.
SO ORDERED.
On appeal, the Court of Appeals reversed and gave judgment for private respondent, declaring
him the owner of the 19.4 hectares of land erroneously included in TCT No. 10101. The
dispositive portion of the appellate courts decision reads:
WHEREFORE, the appealed decision is hereby REVERSED AND SET ASIDE. A new decision
is hereby rendered:
1. Dismissing the complaint.
2. Declaring the disputed 19.4000 hectares of land embraced in TCT 10101 as exclusively
belonging to defendant-appellant, ordering its segregation from plaintiff-appellees title and its
reconveyance to appellant.

III.THE RESPONDENT COURTS RULING DECLARING DBP IN ESTOPPEL IS ILLOGICAL.

[27]
First. Petitioner invokes the ruling of this Court in Benin v. Tuason[28] in support of its claim
that its predecessor-in-interest, Jose Alvarez, became the owner of the land by virtue of the
decree of registration issued in his name. In Benin, three sets of plaintiffs filed separate
complaints against Mariano Severo Tuason and J.M. Tuason & Co., Inc., praying for the
cancellation of OCT No. 735 covering two parcels of land called the Sta. Mesa Estate, or
Parcel 1, with an area of 8,798,617.00 square meters, and the Diliman Estate, or Parcel 2, with
an area of 15,961,246.00 square meters. They asked that they be declared the owners and
lawful possessors of said lands.
Benin is distinguished from this case. In the first place, Benin involved vast tracts of lands
which had already been subdivided and bought by innocent purchasers for value and in good
faith at the time the claimants obtained registration. Secondly, when the claimants ancestors
occupied the lands in question and declared them for tax purposes in 1944, the lands were
already covered by the tax declarations in the name of J. M. Tuason & Co., Inc. In 1914, OCT
No. 735 was issued in the name of Tuason so that, from that time on, no possession could
defeat the title of the registered owners of the land. Thirdly, the validity of OCT No. 735 had
already been recognized by this Court in several cases[29] and, as a result thereof, the
transfer certificates of title acquired by the innocent purchasers for value were also declared
valid. It was held that neither could the claimants file an action to annul these titles for not only
had these actions prescribed, but the fact was that the claimants were also barred from doing
so by laches, having filed the complaint only in 1955, or 41 years after the issuance of OCT
No. 735 to J.M. Tuason & Co., Inc. Thus, it was not solely the decree of registration which was
considered in resolving the Benin case. What was considered decisive was the valid title or
right of ownership of J. M. Tuason & Co., Inc. and that of the other innocent purchasers for
value and in good faith compared to the failure of the claimants to show their right to own or
possess the questioned properties. Sccalr
Petitioner maintains that the possession by private respondent and his predecessor-in-interest
of the 19.4 hectares of land for more than 30 years cannot overcome the decree of registration
issued in favor of its predecessor-in-interest Jose Alvarez. Petitioner quotes the following
statement in the Benin case:

No pronouncement as to costs.
SO ORDERED.[25]
Petitioner moved for a reconsideration but its motion was denied in a resolution dated April 23,
1997.[26] Hence this petition.

It follows also that the allegation of prescriptive title in favor of plaintiffs does not suffice to
establish a cause of action. If such prescription was completed before the registration of the
land in favor of the Tuasons, the resulting prescriptive title was cut off and extinguished by the
decree of registration. If, on the contrary, the prescription was either begun or completed after
the decree of registration, it conferred no title because, by express provision of law,
prescription can not operate against the registered owner (Act 496).[30]

Petitioner contends that:

I.......THE DECISION OF THE RESPONDENT COURT IS NOT IN ACCORD WITH THE
APPLICABLE PROVISIONS OF LAW (Sections 38 and 46 of ACT 496) AND THE
APPLICABLE DECISIONS OF THE SUPREME COURT, PARTICULARLY IN THE CASE OF
BENIN VS. TUASON, 57 SCRA 531.
II.......THE RESPONDENT COURT OVERLOOKED THE ISSUES ABOUT THE DBP BEING
AN INNOCENT MORTGAGEE FOR VALUE OF THE LAND IN QUESTION AND OF HAVING
PURCHASED LATER THE SAME DURING A PUBLIC AUCTION SALE. Calrsc

Petitioner would thus insist that, by virtue of the decree of registration, Jose Alvarez and those
claiming title from him (i.e., the spouses Beduya) acquired ownership of the 19.4 hectares of
land, despite the fact that they neither possessed nor occupied these lands.
This view is mistaken. A consideration of the cases shows that a decree of registration cut off
or extinguished a right acquired by a person when such right refers to a lien or encumbrance
on the land not to the right of ownership thereof which was not annotated on the certificate of
title issued thereon. Thus, Act No. 496 provides:

Sec. 39. Every person receiving a certificate of title in pursuance of a decree of registration,
and every subsequent purchaser of registered land who takes a certificate of title for value in
good faith shall hold the same free of all encumbrances except those noted on said certificate,
and any of the following encumbrances which may be subsisting, namely: Calrspped
First. Liens, claims, or rights arising or existing under the laws of Constitution of the United
States or of the Philippine Islands which the statutes of the Philippine Islands cannot require to
appear of record in the Registry.
Second. Taxes within two years after the same became due and payable.
Third. Any public highway, way, private way established by law, or any Government irrigation
canal or lateral thereof, where the certificate of title does not state that the boundaries of such
highway, way, or irrigation canal or lateral thereof, have been determined.
But if there are easements or other rights appurtenant to a parcel of registered land which for
any reason have failed to be registered, such easements or rights shall remain so appurtenant
notwithstanding such failure, and shall be held to pass with the land until cut off or
extinguished by the registration of the servient estate, or in any other manner.
Hence, in Cid v. Javier,[31] it was helds:
. . . Consequently, even conceding arguendo that such an easement has been acquired, it had
been cut off and extinguished by the registration of the servient estate under the Torrens
system without the easement being annotated on the corresponding certificate of title,
pursuant to Section 39 of the Land Registration Act.
This principle was reiterated in Purugganan v. Paredes[32] which also involved an easement of
light and view that was not annotated on the certificate of title of the servient estate. Scedp
But to make this principle applicable to a situation wherein title acquired by a person through
acquisitive prescription would be considered cut off and extinguished by a decree of
registration would run counter to established jurisprudence before and after the ruling in Benin.
Indeed, registration has never been a mode of acquiring ownership over immovable property.
As early as 1911, in the case of City of Manila v. Lack,[33] the Court already ruled on the
purpose of registration of lands, viz.:
The Court of Land Registration was created for a single purpose. The Act is entitled "An Act to
provide for the adjudication and registration of titles to lands in the Philippine Islands." The sole
purpose of the Legislature in its creation was to bring the land titles of the Philippine Islands
under one comprehensive and harmonious system, the cardinal features of which are
indefeasibility of title and the intervention of the State as a prerequisite to the creation and
transfer of titles and interest, with the resultant increase in the use of land as a business asset
by reason of the greater certainty and security of title. It does not create a title nor vest one. It
simply confirms a title already created and already vested, rendering it forever indefeasible. . .
Again, in the case of Angeles v. Samia[34] where land was erroneously registered in favor of
persons who neither possessed nor occupied the same, to the prejudice of the actual
occupant, the Court held:
. . . The purpose of the Land Registration Act, as this court has had occasion to so state more
than once, is not to create or vest title, but to confirm and register title already created and

already vested, and of course, said original certificate of title No. 8995 could not have vested in
the defendant more title than what was rightfully due her and her coowners. It appearing that
said certificate granted her much more than she expected, naturally to the prejudice of another,
it is but just that the error, which gave rise to said anomaly, be corrected (City of Manila vs.
Lack, 19 Phil., 324). The defendant and her coowners knew or, at least, came to know that it
was through error that the original certificate of title in question was issued by the court which
heard cadastral case No. 11 of Bacolor, not only in or prior to March, 1933, but from the time
said certificate was issued in their favor, that is, from December 15, 1921. This is evidenced by
the fact that, ever since, they remained passive without even attempting to make the least
showing of ownership over the land in question until after the lapse of more than eleven years.
The Land Registration Act as well as the Cadastral Act protects only the holders of a title in
good faith and does not permit its provisions to be used as a shield for the commission of
fraud, or that one should enrich himself at the expense of another (Gustilo vs. Maravilla, 48
Phil., 442; Angelo vs. Director of Lands, 49 Phil., 838). The above-stated Acts do not give
anybody, who resorts to the provisions thereof, a better title than he really and lawfully has. If
he happened to obtain it by mistake or to secure, to the prejudice of his neighbor, more land
than he really owns, with or without bad faith on his part, the certificate of title, which may have
been issued to him under the circumstances, may and should be cancelled or corrected
(Legarda and Prieto vs. Saleeby, 31 Phil., 590). This is permitted by section 112 of Act No.
496, which is applicable to the Cadastral Act because it is so provided expressly by the
provisions of section 11 of the latter Act. It cannot be otherwise because, as stated in the case
of Domingo vs. Santos, Ongsiako, Lim y Cia. (55 Phil., 361), errors in the plans of lands sought
to be registered in the registry and reproduced in the certificate of title issued later, do not
annul the decree of registration on the ground that it is not the plan but the land itself which is
registered in the registry. In other words, if the plan of an applicant for registration or claimant
in a cadastral case alleges that the land referred to in said plan is 100 or 1,000 hectares, and
the land which he really owns and desires to register in the registry is only 80 ares, he cannot
claim to be the owner of the existing difference if afterwards he is issued a certificate of title
granting him said area of 100 or 1,000 hectares.[35] Edpsc
The principle laid down in this 1938 case remains the prevailing doctrine, its latest application
being in the case of Reyes v. Court of Appeals[36] wherein we ruled that the fact that a party
was able to secure a title in his favor did not operate to vest ownership upon her of the
property.
In the present case, private respondent has been in actual, open, peaceful and continuous
possession of the property since 1950. This fact was corroborated by the testimony of
Eleuterio Cambangay who personally knew that Ulpiano Mumar transferred the land covered
by Tax Declaration No. 3840[37] in favor of private respondent in 1950.[38] Private
respondents claim based on actual occupation of the land is bolstered by Tax Declaration Nos.
R-1475, R-799 and D-2247[39] which were issued in his name in 1950, 1961 and 1974,
respectively. Together with his actual possession of the land, these tax declarations constitute
strong evidence of ownership of the land occupied by him. As we said in the case of Republic
vs. Court of Appeals:[40]
Although tax declarations or realty tax payments of property are not conclusive evidence of
ownership, nevertheless, they are good indicia of possession in the concept of owner for no
one in his right mind would be paying taxes for a property that is not in his actual or at least
constructive possession. They constitute at least proof that the holder has a claim of title over
the property. The voluntary declaration of a piece of property for taxation purposes manifests
not only ones sincere and honest desire to obtain title to the property and announces his
adverse claim against the State and all other interested parties, but also the intention to

contribute needed revenues to the Government. Such an act strengthens ones bona fide claim
of acquisition of ownership.
More importantly, it was established that private respondent, having been in possession of the
land since 1950, was the owner of the property when it was registered by Jose Alvarez in
1969, his possession tacked to that of his predecessor-in-interest, Ulpiano Mumar, which dates
back to 1917.[41] Clearly, more than 30 years had elapsed before a decree of registration was
issued in favor of Jose Alvarez. This uninterrupted adverse possession of the land for more
than 30 years could only ripen into ownership of the land through acquisitive prescription which
is a mode of acquiring ownership and other real rights over immovable property. Prescription
requires public, peaceful, uninterrupted and adverse possession of the property in the concept
of an owner for ten (10) years, in case the possession is in good faith and with a just title. Such
prescription is called ordinary prescription, as distinguished from extraordinary prescription
which requires possession for 30 years in case possession is without just title or is not in good
faith.[42] Edp
In contrast to private respondent, it has been shown that neither Jose Alvarez nor the spouses
Beduya were at any time in possession of the property in question. In fact, despite knowledge
by Gaudencio Beduya that private respondent occupied this 19.4 hectares included in the area
covered by TCT No. 10101,[43] he never instituted any action to eject or recover possession
from the latter. Hence, it can be concluded that neither Jose Alvarez nor the spouses Beduya
ever exercised any right of ownership over the land. The fact of registration in their favor never
vested in them the ownership of the land in dispute. "If a person obtains a title under the
Torrens system, which includes by mistake or oversight land which can no longer be registered
under the system, he does not, by virtue of the said certificate alone, become the owner of the
lands illegally included."[44]
Considering the circumstances pertaining in this case, therefore, we hold that ownership of the
19.4 hectares of land presently occupied by private respondent was already vested in him and
that its inclusion in OCT No. 546 and, subsequently, in TCT No. 10101, was erroneous.
Accordingly, the land in question must be reconveyed in favor of private respondent, the true
and actual owner thereof, reconveyance being clearly the proper remedy in this case.
"The true owner may bring an action to have the ownership or title to the land judicially settled
and the Court in the exercise of its equity jurisdiction, without ordering the cancellation of the
Torrens title issued upon the patent, may direct the defendants, the registered owner to
reconvey the parcel of land to the plaintiff who has been found to be the true owner thereof."
(Vital vs. Amore, 90 Phil. 955) "The reconveyance is just and proper in order to terminate the
intolerable anomaly that the patentees should have a torrens title for the land which they and
their predecessors never possessed which has been possessed by Novo in the concept of
owner." (Bustarga v. Novo, 129 SCRA 125)[45]
Second. Generally, an action for reconveyance based on an implied or constructive trust, such
as the instant case, prescribes in 10 years from the date of issuance of decree of registration.
[46] However, this rule does not apply when the plaintiff is in actual possession of the land.
Thus, it has been held: Misedp
. . . [A]n action for reconveyance of a parcel of land based on implied or constructive trust
prescribes in ten years, the point of reference being the date of registration of the deed or the
date of the issuance of the certificate of title over the property, but this rule applies only when
the plaintiff or the person enforcing the trust is not in possession of the property, since if a
person claiming to be the owner thereof is in actual possession of the property, as the

defendants are in the instant case, the right to seek reconveyance, which in effect seeks to
quiet title to the property, does not prescribe. The reason for this is that one who is in actual
possession of a piece of land claiming to be the owner thereof may wait until his possession is
disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule
being, that his undisturbed possession gives him a continuing right to seek the aid of a court of
equity to ascertain and determine the nature of the adverse claim of a third party and its effect
on his own title, which right can be claimed only by one who is in possession.[47]
Having been the sole occupant of the land in question, private respondent may seek
reconveyance of his property despite the lapse of more than 10 years.
Nor is there any obstacle to the determination of the validity of TCT No. 10101. It is true that
the indefeasibility of torrens titles cannot be collaterally attacked. In the instant case, the
original complaint is for recovery of possession filed by petitioner against private respondent,
not an original action filed by the latter to question the validity of TCT No. 10101 on which
petitioner bases its right. To rule on the issue of validity in a case for recovery of possession is
tantamount to a collateral attack. However, it should not be overlooked that private respondent
filed a counterclaim against petitioner, claiming ownership over the land and seeking damages.
Hence, we could rule on the question of the validity of TCT No. 10101 for the counterclaim can
be considered a direct attack on the same. "A counterclaim is considered a complaint, only this
time, it is the original defendant who becomes the plaintiff. . . . It stands on the same footing
and is to be tested by the same rules as if it were an independent action."[48] In an analogous
case,[49] we ruled on the validity of a certificate of title despite the fact that the original action
instituted before the lower court was a case for recovery of possession. The Court reasoned
that since all the facts of the case are before it, to direct the party to institute cancellation
proceedings would be needlessly circuitous and would unnecessarily delay the termination of
the controversy which has already dragged on for 20 years.
Third. Petitioner nonetheless contends that an action for reconveyance does not lie against it,
because it is an innocent purchaser for value in the foreclosure sale held in 1985.
This contention has no merit. Sec. 38 of Act No. 496, the Land Registration Act, provides:
Misoedp
If the court after hearing finds that the applicant or adverse claimant has title as stated in his
application or adverse claim and proper for registration, a decree of confirmation and
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 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 competent Court of First Instance a petition for review within one year after entry
of the decree, provided no innocent purchaser for value has acquired an interest. Upon the
expiration of said term of one year, every decree or certificate of title issued in accordance with
this section shall be incontrovertible. If there is any such purchaser, the decree of registration
shall not be opened, but shall remain in full force and effect forever, subject only to the right of
appeal hereinbefore provided: Provided, however, That no decree or certificate of title issued
to persons not parties to the appeal shall be cancelled or annulled. But any person aggrieved
by such decree in any case may pursue his remedy by action for damages against the

applicant or any other person for fraud in procuring the decree. Whenever the phrase
"innocent purchaser for value" or an equivalent phrase occurs in this Act, it shall be deemed to
include an innocent lessee, mortgagee, or other encumbrancer for value. (As amended by
Sec. 3, Act 3621; and Sec. 1, Act No. 3630.) Edpmis

which would create suspicion in an otherwise reasonable man is not an innocent purchaser for
value. "It is a well-settled rule that a purchaser cannot close his eyes to facts which should put
a reasonable man upon his guard, and then claim that he acted in good faith under the belief
that there was no defect in the title of the vendor."[53]

Succinctly put, 38 provides that a certificate of title is conclusive and binding upon the whole
world. Consequently, a buyer need not look behind the certificate of title in order to determine
who is the actual owner of the land. However, this is subject to the right of a person deprived of
land through fraud to bring an action for reconveyance, provided that it does not prejudice the
rights of an innocent purchaser for value and in good faith. "It is a condition sine qua non for an
action for reconveyance to prosper that the property should not have passed to the hands of
an innocent purchaser for value."[50] The same rule applies to mortgagees, like petitioner.
Thus, we held:

Petitioner deliberately disregarded both the fact that private respondent already occupied the
property and that he was claiming ownership over the same. It cannot feign ignorance of
private respondents claim to the land since the latter mortgaged the same land to petitioner as
security for the loan he contracted in 1978 on the strength of the tax declarations issued under
his name. Instead of inquiring into private respondents occupation over the land, petitioner
simply proceeded with the foreclosure sale, pretending that no doubts surround the ownership
of the land covered by TCT No. 10101. Considering these circumstances, petitioner cannot be
deemed an innocent mortgagee/purchaser for value. As we ruled: Scjj

Where the certificate of title is in the name of the mortgagor when the land is mortgaged, the
innocent mortgagee for value has the right to rely on what appears on the certificate of title. In
the absence of anything to excite suspicion, said mortgagee is under no obligation to look
beyond the certificate and investigate the title of the mortgagor appearing on the face of said
certificate. Although Article 2085 of the Civil Code provides that absolute ownership of the
mortgaged property by the mortgagor is essential, the subsequent declaration of a title as null
and void is not a ground for nullifying the mortgage right of a mortgagee in good faith.[51]

"The failure of appellees to take the ordinary precautions which a prudent man would have
taken under the circumstances, specially in buying a piece of land in the actual, visible and
public possession of another person, other than the vendor, constitutes gross negligence
amounting to bad faith.

The evidence before us, however, indicates that petitioner is not a mortgagee in good faith. To
be sure, an innocent mortgagee is not expected to conduct an exhaustive investigation on the
history of the mortgagors title. Nonetheless, especially in the case of a banking institution, a
mortgagee must exercise due diligence before entering into said contract. Judicial notice is
taken of the standard practice for banks, before approving a loan, to send representatives to
the premises of the land offered as collateral and to investigate who are the real owners
thereof. Banks, their business being impressed with public interest, are expected to exercise
more care and prudence than private individuals in their dealings, even those involving
registered lands.[52] Jjsc
In this case, petitioners representative, Patton R. Olano, admitted that he came to know of the
property for the first time in 1979 when he inspected it to determine whether the portion
occupied by private respondent and mortgaged by the latter to petitioner was included in TCT
No. 10101. This means that when the land was mortgaged by the spouses Beduya in 1972, no
investigation had been made by petitioner. It is clear, therefore, that petitioner failed to exercise
due care and diligence in establishing the condition of the land as regards its actual owners
and possessors before it entered into the mortgage contract in 1972 with the Beduyas. Had it
done so, it would not have failed to discover that private respondent was occupying the
disputed portion of 19.4 hectares. For this reason, petitioner cannot be considered an innocent
purchaser for value when it bought the land covered by TCT No. 10101 in 1985 at the
foreclosure sale.
Indeed, two circumstances negate petitioners claim that it was an innocent purchaser for value
when it bought the land in question, including the portion occupied by private respondent: (1)
petitioner was already informed by Gaudencio Beduya that private respondent occupied a
portion of the property covered by TCT No. 10101; and (2) petitioners representative
conducted an investigation of the property in 1979 to ascertain whether the land mortgaged by
private respondent was included in TCT No. 10101. In other words, petitioner was already
aware that a person other than the registered owner was in actual possession of the land when
it bought the same at the foreclosure sale. A person who deliberately ignores a significant fact

In this connection, it has been held that where, as in this case, the land sold is in the
possession of a person other than the vendor, the purchaser is required to go beyond the
certificates of title and ma[k]e inquiries concerning the rights of the actual possessor. (Citations
omitted.)
....
One who purchases real property which is in the actual possession of another should, at least,
make some inquiry concerning the right of those in possession. The actual possession by
other than the vendor should, at least put the purchaser upon inquiry. He can scarcely, in the
absence of such inquiry, be regarded as a bona fide purchaser as against such
possessors."[54]
Fourth. From the foregoing, we find that the resolution of the issue of estoppel will not affect
the outcome of this case. Petitioner claims that the fact that it approved a loan in favor of
private respondent and executed a mortgage contract covering the 19.4 hectares covered by
tax declarations issued under private respondents name does not mean that it is estopped
from questioning the latters title. Petitioner accuses private respondent of having made
misrepresentations which led it to believe in his valid title and ownership.
The claim has no basis. Private respondent made no misrepresentation with regard to the land
occupied by him as he is actually the real owner thereof. Moreover, when private respondent
entered into a mortgage contract with petitioner, his claim of ownership was supported not only
by the tax declarations but also by a certification of the Clerk of Court of the Court of First
Instance of Bohol that no civil, land registration or cadastral case has been filed or instituted
before the court affecting the validity of Tax Declaration No. D-2247 covering the land located
in Bugang, San Miguel, Bohol and declared in the name of Carlos Cajes.[55] These
documents were relied upon by private respondent in support of his claim of ownership. We
cannot consider the submission of these documents as misrepresentations by private
respondent as to the actual ownership of the land. Rather, private respondent believed in good
faith and with good reason that he was the owner of the 19.4 hectares occupied by him.

As to the question of estoppel, we do not find petitioner to be estopped from questioning

private respondents title. "Estoppel in pais arises when one, by his acts, representations or
admission, or by his own silence when he ought to speak out, intentionally or through culpable
negligence, induces another to believe certain facts to exist and such other rightfully relies and
acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence
of such facts."[56] In the case at bar, upon learning that the land occupied by private
respondent was also covered by TCT No. 10101, petitioner immediately demanded full
payment of the loan and thereafter cancelled the mortgage contract, a fact that is admitted by
private respondent himself.[57] Indeed, nothing in record indicates that petitioner impliedly
acquiesced to the validity of private respondents title when it found out that the latter was
occupying a portion of the land covered by TCT No. 10101.

However, for reasons aforestated, we uphold private respondents ownership of 19.4 hectares
occupied by him. As a necessary consequence thereof, such portion of land included in TCT
No. 10101 must be segregated and reconveyed in his favor.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED in toto.
38) same with no 17.