G.R. No.

176020, September 29, 2014

HEIRS OF TELESFORO JULAO, NAMELY, ANITA VDA. DE ENRIQUEZ, SONIA J.

TOLENTINO AND RODERICK JULAO, Petitioners, v. SPOUSES ALEJANDRO AND
MORENITA DE JESUS, Respondents.

DECISION

DEL CASTILLO, J.:

Jurisdiction over the subject matter is conferred by law and is determined by the
material allegations of the complaint.1 Thus, it cannot be acquired through, or waived
by, any act or omission of the parties;2nor can it be cured by their silence,
acquiescence, or even express consent.3 cralawred

This Petition for Review on Certiorari4 under Rule 45 of the Rules of Court assails the
Decision5 dated December 4, 2006 of the Court of Appeals (CA) in CA-G.R. CV No.
72845.

Factual Antecedents

Sometime in the 1960s, Telesforo Julao (Telesforo)6 filed before the Department of
Environment and Natural Resources (DENR), Baguio City, two Townsite Sales
Applications (TSA), TSA No. V-2132 and TSA No. V-6667.7 Upon his death on June 1,
1971, his applications were transferred to his heirs.8 cralawred

On April 30, 1979,9 Solito Julao (Solito) executed a Deed of Transfer of

Rights, 10 transferring his hereditary share in the property covered by TSA No. V-6667
to respondent spouses Alejandro and Morenita De Jesus. In 1983, respondent spouses
constructed a house on the property they acquired from Solito.11 In 1986, Solito went
missing.12cralawred

On March 15, 1996, the DENR issued an Order: Rejection and Transfer of Sales
Rights,13 to wit: ChanRoblesVirtualawl ibra ry

WHEREFORE, premises considered and it appearing that herein applicant is a holder of

two (2) applications in violation with established policy in the disposition [of] public
lands in the City of Baguio, TSA V-6667 is hereby ordered dropped from the records.
Accordingly, it is henceforth ordered that TSA 2132 in the name of TELESFORO JULAO
be, as [it is] hereby transferred to the heirs of TELESFORO JULAO, represented by
ANITA VDA. DE ENRIQUEZ, and as thus transferred, the same shall continue to be
given due course. For convenience of easy reference, it is directed that the [pertinent]
records be consolidated in the name of the latter.

SO ORDERED.14

Consequently, on December 21, 1998, Original Certificate of Title (OCT) No. P-

2446,15 covering a 641-square meter property, was issued in favor of the heirs of
Telesforo.16 cralawred
On March 2, 1999, petitioners Anita Julao vda. De Enriquez, Sonia J. Tolentino and
Roderick Julao,17representing themselves to be the heirs of Telesforo, filed before the
Regional Trial Court (RTC), Baguio City, a Complaint for Recovery of Possession of Real
Property,18 docketed as Civil Case No. 4308-R,19against respondent spouses.
Petitioners alleged that they are the true and lawful owners of a 641-square meter
parcel of land located at Naguilian Road, Baguio City, covered by OCT No. P-
2446;20 that the subject property originated from TSA No. V-2132;21 that respondent
spouses house encroached on 70 square meters of the subject property;22 that on
August 4, 1998, petitioners sent a demand letter to respondent spouses asking them
to return the subject property;23 that respondent spouses refused to accede to the
demand, insisting that they acquired the subject property from petitioners brother,
Solito, by virtue of a Deed of Transfer of Rights;24 that in the Deed of Transfer of
Rights, Solito expressly transferred in favor of respondent spouses his hereditary share
in the parcel of land covered by TSA No. V-6667;25 that TSA No. V-6667 was rejected
by the DENR;26 and that respondent spouses have no valid claim over the subject
property because it is covered by a separate application, TSA No. V-2132.27 cralawred

Respondent spouses filed a Motion to Dismiss28 on the ground of prescription, which the
RTC denied for lack of merit.29 Thus, they filed an Answer30 contending that they are
the true and lawful owners and possessors of the subject property;31that they acquired
the said property from petitioners brother, Solito;32 and that contrary to the claim of
petitioners, TSA No. V-6667 and TSA No. V-2132 pertain to the same property.33 cralawred

During the trial, petitioners disputed the validity of the Deed of Transfer of Rights
executed by Solito. They presented evidence to show that Telesforo submitted two
applications, TSA No. V-2132 and TSA No. V-6667.34 The first one, TSA No. V-2132,
resulted in the issuance of OCT No. P-2446 in favor of the heirs of Telesforo, while the
second one, TSA No. V-6667, was dropped from the records.35 They also presented
evidence to prove that Solito had no hereditary share in the estate of Telesforo because
Solito was not Telesforos biological son, but his stepson, and that Solitos real name
was Francisco Bognot.36 cralaw red

After petitioners rested their case, respondent spouses filed a Motion for Leave of Court
to File a Demurrer to Evidence.37 The RTC, however, denied the Motion.38 cralawred

The heirs of Solito then moved to intervene and filed an Answer-In-

Intervention,39 arguing that their father, Solito, is a legitimate son of Telesforo and that
Solito sold his hereditary share in the estate of his father to respondent spouses by
virtue of a Deed of Transfer of Rights.40cralawred

To refute the evidence presented by petitioners, respondent spouses presented two

letters from the DENR: (1) a letter dated April 27, 1999 issued by Amando I. Francisco,
the Officer-In-Charge of CENRO-Baguio City, stating that it can be concluded that TSA
No. V-2132 and TSA No. V-6667 referred to one and the same application covering one
and the same lot;41 and (2) a letter42 dated September 30, 1998 from the DENR
stating that the land applied for with assigned number TSA No. V-2132 was
renumbered as TSA No. V-6667 as per 2nd Indorsement dated November 20, 1957 x x
x.43 They also presented two affidavits,44 both dated August 31, 1994, executed by
petitioners Sonia Tolentino and Roderick Julao,45 acknowledging that Solito was their
co-heir and that he was the eldest son of Telesforo.46 cralawred
Ruling of the Regional Trial Court

On August 10, 2001, the RTC rendered a Decision47 in favor of petitioners. The RTC
found that although petitioners failed to prove their allegation that Solito was not an
heir of Telesforo,48 they were nevertheless able to convincingly show that Telesforo filed
with the DENR two applications, covering two separate parcels of land, and that it was
his first application, TSA No. V-2132, which resulted in the issuance of OCT No. P-
2446.49 And since what Solito transferred to respondent spouses was his hereditary
share in the parcel of land covered by TSA No. V-6667, respondent spouses acquired no
right over the subject property, which was derived from a separate application, TSA No.
V-2132.50 Thus, the RTC disposed of the case in this wise: ChanRoblesVi rtua lawlib rary

WHEREFORE, premises considered, judgment is hereby rendered in favor of the

[petitioners] and against the [respondents] who are hereby ordered to restore the
possession of the land in question consisting of an area of 70 square meters, more or
less, which is a portion of the land covered by [OCT] No. P-2446. The [respondents] are
ordered to remove the house and/or other improvements that they constructed over
the said parcel of land and to vacate the same upon the finality of this decision.

SO ORDERED.51

Ruling of the Court of Appeals

Aggrieved, respondent spouses elevated the case to the CA.

On December 4, 2006, the CA reversed the ruling of the RTC. The CA found the
Complaint dismissible on two grounds: (1) failure on the part of petitioners to identify
the property sought to be recovered; and (2) lack of jurisdiction. The CA noted that
petitioners failed to pinpoint the property sought to be recovered.52 In fact, they did
not present any survey plan to show that respondent spouses actually encroached on
petitioners property.53 Moreover, the CA was not fully convinced that the two
applications pertain to two separate parcels of land since respondent spouses were able
to present evidence to refute such allegation.54 The CA likewise pointed out that the
Complaint failed to establish that the RTC had jurisdiction over the case as petitioners
failed to allege the assessed value of the subject property.55 Thus: ChanRoblesVirt ualawlib rary

WHEREFORE, premises considered, the appeal is GRANTED. The decision appealed

from is REVERSED and SET ASIDE. The complaint is DISMISSED.

SO ORDERED.56 cralawred

Issues

Hence, petitioners filed the instant Petition for Review on Certiorari, raising the
following errors: ChanRoblesVirtualawl ibra ry

I
THE [CA] COMMITTED REVERSIBLE ERROR IN RULING THAT PETITIONERS FAILED TO
PROVE THE IDENTITY OF THE PROPERTY IN QUESTION.

II

THE [CA] COMMITTED REVERSIBLE ERROR IN RULING THAT THE TRIAL COURT DID
NOT ACQUIRE JURISDICTION OVER THE COMPLAINT.57

At this juncture, it must be mentioned that in the Resolution58 dated March 19, 2007,
we required respondent spouses to file their Comment to the Petition which they failed
to comply with. Thus, in the Resolution59 dated March 11, 2013, we dispensed with the
filing of respondent spouses Comment. At the same time, we required petitioners to
manifest whether they are willing to submit the case for resolution based on the
pleadings filed. To date, petitioners have not done so.

Our Ruling

The Petition lacks merit.

The assessed value must be alleged

in the complaint to determine which
court has jurisdiction over the action.

Jurisdiction as we have said is conferred by law and is determined by the allegations in

the complaint, which contains the concise statement of the ultimate facts of a plaintiff's
cause of action.60cralawred

Section 19(2) and Section 33(3) of Batas Pambansa Blg. 129, as amended by Republic
Act No. 7691, provide: ChanRobles Virtualawl ibra ry

SEC. 19. Jurisdiction in Civil Cases. Regional Trial Courts shall exercise exclusive
original jurisdiction: ChanRoblesVi rtualaw lib rary

xxxx

(2) In all civil actions which involve the title to, or possession of, real property, or any
interest therein, where the assessed value of the property involved exceeds twenty
thousand pesos (P20,000.00) or for civil actions in Metro Manila, where such value
exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon
the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts;

xxxx

SEC. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal
Circuit Trial Courts in Civil Cases. Metropolitan Trial Courts, Municipal Trial Courts,
and Municipal Circuit Trial Courts shall exercise: ChanRoblesVi rt ualawlib ra ry
xxxx

(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession
of, real property, or any interest therein where the assessed value of the property or
interest therein does not exceed Twenty Thousand Pesos (P20,000.00) or, in civil
actions in Metro Manila, where such assessed value does not exceed Fifty Thousand
Pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees,
litigation expenses and costs: Provided, That in cases of land not declared for taxation
purposes, the value of such property shall be determined by the assessed value of the
adjacent lots.

Based on the foregoing, it is clear that in an action for recovery of possession, the
assessed value of the property sought to be recovered determines the courts
jurisdiction.61
cralawred

In this case, for the RTC to exercise jurisdiction, the assessed value of the subject
property must exceed P20,000.00. Since petitioners failed to allege in their Complaint
the assessed value of the subject property, the CA correctly dismissed the Complaint as
petitioners failed to establish that the RTC had jurisdiction over it. In fact, since the
assessed value of the property was not alleged, it cannot be determined which trial
court had original and exclusive jurisdiction over the case.

Furthermore, contrary to the claim of petitioners, the issue of lack of jurisdiction was
raised by respondents in their Appellants Brief.62 And the fact that it was raised for the
first time on appeal is of no moment. Under Section 1,63 Rule 9 of the Revised Rules of
Court, defenses not pleaded either in a motion to dismiss or in the answer are deemed
waived, except for lack of jurisdiction, litis pendentia, res judicata, and prescription,
which must be apparent from the pleadings or the evidence on record. In other words,
the defense of lack of jurisdiction over the subject matter may be raised at any stage of
the proceedings, even for the first time on appeal. 64 In fact, the court may motu
proprio dismiss a complaint at any time when it appears from the pleadings or the
evidence on record that lack of jurisdiction exists.65 cralawred

In an action to recover, the

property must be identified.

Moreover, Article 434 of the Civil Code states that [i]n an action to recover, the
property must be identified, and the plaintiff must rely on the strength of his title and
not on the weakness of the defendants claim. The plaintiff, therefore, is duty-bound
to clearly identify the land sought to be recovered, in accordance with the title on which
he anchors his right of ownership.66 It bears stressing that the failure of the plaintiff to
establish the identity of the property claimed is fatal to his case.67 cralawred

In this case, petitioners failed to identify the property they seek to recover as they
failed to describe the location, the area, as well as the boundaries thereof. In fact, as
aptly pointed out by the CA, no survey plan was presented by petitioners to prove that
respondent spouses actually encroached upon the 70-square meter portion of
petitioners property.68 Failing to prove their allegation, petitioners are not entitled to
the relief prayed for in their Complaint.
All told, we find no error on the part of the CA in dismissing the Complaint for lack of
jurisdiction and for failing to identify the property sought to be recovered.

WHEREFORE, the Petition is hereby DENIED. The Decision dated December 4, 2006
of the Court of Appeals in CA-G.R. CV No. 72845 is hereby AFFIRMED.

SO ORDERED. cralawlaw lib rary

Carpio, (Acting Chief Justice),* Brion, Mendoza, and Leonen, JJ., concur.

Endnotes:

SPOUSES ALEJANDRO and MORENITA DE JESUS,

Respondents.

G.R. No. 176020 September 29, 2014

Ponente: Del Castillo

FACTS:

In 1960, Telesforo Julao filed before DENR two Townsite

Sales Applications. Upon his death on June 1, 1971,
his applications were transferred to his heirs. On April 30, 1979, Solito
Julao (Solito) executed a Deed of Transfer of Rights, transferring
his hereditary share in the property covered by TSA No. V-6667 to
respondent spouses Alejandroand Morenita De Jesus. In 1983,
respondent spouses constructed a house on the property they acquired
from Solito. In 1986, Solito went missing.

On December 21, 1998, Original Certificate of Title (OCT) No.

P-2446, covering a 641-square meter property, was issued in favor of
the heirs of Telesforo.

On March 2, 1999, petitioners representing themselves to be

the heirs of Telesforo, filed before the RTC of Baguio City, a Complaint
or Recovery of Possession of Real Property against respondent
spouses. Petitioners alleged that they are the true and lawful owners of
a 641-square meter parcel of land located at Naguilian Road, Baguio
City, covered by OCT No. P-2446; that the subject property originated
from TSA No. V-2132; that respondent spouses house encroached on
70 square meters of the subject property, among others.

RTC ruled in favor of petitioners. CA reversed the decision on

two grounds: (1) failure on the part of petitioners to identify the
property sought to be recovered; and (2) lack of jurisdiction.

ISSUE:

Whether or not the RTC acquired jurisdiction over the

complaint.

HELD:

NO. The Court held that in an action for recovery of

possession, the assessed value of the property sought to be recovered
determines the courts jurisdiction.

In this case, for the RTC to exercise jurisdiction, the assessed

value of the subject property must exceed P20,000.00. Since
petitioners failed to allege in their Complaint the assessed
value of the subject property, the CA correctly dismissed
the Complaint as petitioners failed to establish that the RTC
had jurisdiction over it. In fact, since the assessed value of the
property was not alleged, it cannot be determined which trial court
had original and exclusive jurisdiction over the case.

In an action to recover, the property must be

identified.

Moreover, Article 434 of the Civil Code states that in an

action to recover, the property must be identified, and the plaintiff
must rely on the strength of his title and not on the weakness of the
defendants claim. The plaintiff, therefore, is duty-bound to clearly
identify the land sought to be recovered, in accordance with the title
on which he anchors his right of ownership.66 It bears stressing that
the failure of the plaintiff to establish the identity of the property
claimed is fatal to his case.
 In this case, petitioners failed to identify the property they
seek to recover as they failed to describe the location, the area, as well
as the boundaries thereof. In fact, as aptly pointed out by the CA, no
survey plan was presented by petitioners to prove that respondent
spouses actually encroached upon the 70-square meter portion of
petitioners property. Failing to prove their allegation, petitioners are
not entitled to the relief prayed for in their Complaint.

FALLO:

WHEREFORE, the Petition is hereby DENIED. The Decision

dated December 4, 2006 of the Court of Appeals in CA-G.R. CV No.
72845 is hereby AFFIRMED.

CASIMIRO DEVELOPMENT G.R. No. 175485

CORPORATION,
Petitioner, Present:

CORONA, C.J, Chairperson,

LEONARDO-DE CASTRO,
BERSAMIN,
- versus - DEL CASTILLO, and
VILLARAMA, JR., JJ.

Promulgated:
RENATO L. MATEO,
Respondent. July 27, 2011
x-----------------------------------------------------------------------------------------x

DECISION

BERSAMIN, J.:

The focus of this appeal is the faith that should be accorded to the Torrens title that
the seller holds at the time of the sale.
 In its decision promulgated on August 31, 2006, [1] the Court of Appeals
(CA) declared that the respondent and his three brothers were the rightful owners
of the land in litis, and directed the Office of the Register of Deeds of Las Pias City
to cancel the transfer certificate of title (TCT) registered under the name of
petitioner Casimiro Development Corporation (CDC) and to issue in its place
another TCT in favor of the respondent and his three brothers. Thereby, the CA
reversed the judgment of the Regional Trial Court (RTC) rendered on May 9, 2000
(dismissing the respondents complaint for quieting of title and reconveyance upon
a finding that CDC had been a buyer in good faith of the land in litis and that the
respondents suit had already been time-barred).

Aggrieved, CDC brought its petition for review on certiorari.

Antecedents

The subject of this case is a registered parcel of land (property) with an area of
6,693 square meters, more or less, located in Barrio Pulang Lupa, Las Pias City,
that was originally owned by Isaias Lara,[2] the respondents maternal grandfather.
Upon the death of Isaias Lara in 1930, the property passed on to his children,
namely: Miguela, Perfecta and Felicidad, and a grandson, Rosauro (son of Perfecta
who had predeceased Isaias in 1920). In 1962, the co-heirs effected the transfer of
the full and exclusive ownership to Felicidad (whose married surname was Lara-
Mateo) under an agreement denominated as Pagaayos Na Gawa Sa Labas Ng
Hukuman.

Felicidad Lara-Mateo had five children, namely: Laura, respondent Renato, Cesar,
Candido, Jr. and Leonardo. With the agreement of the entire Lara-Mateo family,
a deed of sale covering the property was executed in favor of Laura, who, in 1967,
applied for land registration. After the application was granted, Original Certificate
of Title (OCT) No. 6386 was issued in Lauras sole name.

In due course, the property now covered by OCT No. 6386 was used as
collateral to secure a succession of loans. The first loan was obtained from Bacoor
Rural Bank (Bacoor Bank). To repay the loan to Bacoor Bank and secure the
release of the mortgage, Laura borrowed funds from Parmenas Perez (Perez), who,
however, required that the title be meanwhile transferred to his name. Thus, OCT
No. 6386 was cancelled and Transfer Certificate of Title (TCT) No. 438959 was
issued in the name of Perez. Subsequently, Laura recovered the property by
repaying the obligation with the proceeds of another loan obtained from Rodolfo
Pe (Pe), resulting in the cancellation of TCT No. 438595, and in the issuance of
TCT No. S-91595 in Lauras name. She later executed a deed of sale in favor of Pe,
leading to the issuance of TCT No. S-91738 in the name of Pe, who in turn
constituted a mortgage on the property in favor of China Banking Corporation
(China Bank) as security for a loan. In the end, China Bank foreclosed the
mortgage, and consolidated its ownership of the property in 1985 after Pe failed to
redeem. Thus, TCT No. (99527) T-11749-A was issued in the name of China
Bank.

In 1988, CDC and China Bank negotiated and eventually came to terms on the
purchase of the property, with China Bank executing a deed of conditional sale for
the purpose. On March 4, 1993, CDC and China Bank executed a deed of absolute
sale over the property. Resultantly, on March 29, 1993, CDC was issued TCT No.
T-34640 in its own name.
In the meanwhile, on February 28, 1991, Felicidad died intestate.
On June 6, 1991, CDC brought an action for unlawful detainer in the Metropolitan
Trial Court (MeTC) in Las Pias City against the respondents siblings, namely:
Cesar, Candido, Jr., and Leonardo, and the other occupants of the property.
Therein, the defendants maintained that the MeTC did not have jurisdiction over
the action because the land was classified as agricultural; that the jurisdiction
belonged to the Department of Agrarian Reform Adjudication Board (DARAB);
that they had been in continuous and open possession of the land even before
World War II and had presumed themselves entitled to a government grant of the
land; and that CDCs title was invalid, considering that the land had been registered
before its being declared alienable.[3]

On October 19, 1992, the MeTC ruled in favor of CDC, viz:

The Court, after careful consideration of the facts and the laws
applicable to this case[,] hereby resolves:

1. On the issue of jurisdiction.

The defendants alleged that the land in question is an agricultural

land by presenting a Tax Declaration Certificate classifying the land as
FISHPOND. The classification of the land in a tax declaration certificate
as a fishpond merely refers to the use of the land in question for the
purpose of real property taxation. This alone would not be sufficient to
bring the land in question under the operation of the Comprehensive
Agrarian Reform Law.

2. On the issue of open and adverse possession by the defendants.

It should be noted that the subject land is covered by a Transfer

Certificate of Title in the name of plaintiffs predecessor-in-interest China
Banking Corporation. Certificates of Title under the Torrens System is
indefeasible and imprescriptible. As between two persons claiming
possession, one having a [T]orrens title and the other has none, the
former has a better right.
 3. On the issue of the nullity of the Certificate of Title.

The defense of the defendants that the subject property was a forest
land when the same was originally registered in 1967 and hence, the
registration is void[,] is not for this Court to decide[,] for lack of
jurisdiction. The certificate of title over the property must be respected
by this Court until it has been nullified by a competent Court.

WHEREFORE, premises considered, judgment is hereby rendered

in favor of the plaintiff[,] ordering the defendants

1. [sic] and all persons claiming right[s] under it to vacate the

subject premises located at Pulang Lupa I, Las Pias, Metro Manila and
surrender the possession of the same to herein plaintiff;

2. to pay the plaintiff reasonable compensation for the use and

occupation of the subject premises hereby fixed at (P100.00) one
hundred pesos a month starting November 22, 1990 (the time when the
demand letter to vacate was given) until defendants actually vacate the
property;

No pronouncement as to costs and attorneys fees.

SO ORDERED.[4]

The decision of the MeTC was assailed in the RTC via petition
for certiorari and prohibition. The RTC resolved against CDC, and held that the
MeTC had acted without jurisdiction because the land, being a fishpond, was
agricultural; hence, the dispute was within the exclusive jurisdiction of the
DARAB pursuant to Republic Act No. 6657 (Comprehensive Agrarian Reform
Law of 1988).[5]

CDC appealed to the CA, which, on January 25, 1996, found in favor of
CDC, declaring that the MeTC had jurisdiction. As a result, the CA reinstated the
decision of the MeTC.[6]
 On appeal (G.R. No. 128392), the Court affirmed the CAs decision in favor
of CDC, ruling thusly:

WHEREFORE, the petition is DENIED and the Court of Appeals

Decision and Resolution in CA- G.R. SP No. 34039, dated January 25,
1996 and February 21, 1997 respectively, are AFFIRMED. No costs.

SO ORDERED.[7]

The decision in G.R. No. 128392 became final.

Nonetheless, on June 29, 1994, the respondent brought an action for quieting
of title, reconveyance of four-fifths of the land, and damages against CDC and
Laura in the RTC in Las Pias City entitled Renato L. Mateo v. Casimiro
Development Corporation and Laura Mateo de Castro. In paragraph 4 of his
complaint, he stated that he was bringing this action to quiet title on behalf of
himself and of his three (3) brothers Cesar, Leonardo, and Candido, Jr., all
surnamed MATEO in his capacity as one of the co-owners of a parcel of land
situated at Barrio Pulang Lupa, Municipality of Las Pias, Metro Manila.

On May 9, 2001, the RTC held in favor of CDC, disposing:

WHEREFORE, and by strong preponderance of evidence,

judgment is hereby rendered in favor of the defendant Casimiro
Development Corporation and against the plaintiff Renato L. Mateo by
(1) Dismissing the complaint, and upholding the validity and
indefeasibility of Transfer Certificate of Title No. T-34640 in the name
of Casimiro Development Corporation; (2) Ordering the plaintiff Renato
Mateo to pay defendant Casimiro Development Corporation the sum of
[a] P200,000.00 as compensatory damages; [b] P200,000.00 as attorneys
fees; and [c] to pay the costs.
 SO ORDERED.[8]

On appeal (C.A.-G.R. CV No. 71696), the CA promulgated its decision on August

31, 2006, reversing the RTC and declaring CDC to be not a buyer in good faith due
to its being charged with notice of the defects and flaws of the title at the time it
acquired the property from China Bank, and decreeing:

WHEREFORE, the Decision dated May 9, 2001 of Branch 225,

Regional Trial Court, Las Pias City in Civil Case No. 94-2045 is
hereby REVERSED and SET ASIDE and a new one rendered:

(1) Declaring appellant Renato Mateo and his brothers and co-
owners Cesar, Candido, Jr., and Leonardo, all surnamed Mateo as well
as his sister, Laura Mateo de Castro as the rightful owners of the parcel
of land, subject of this case; and

(2) Ordering the Register of Deeds of Las Pias City, Metro-Manila to

cancel Transfer Certificate of Title No. T-34640 under the name of appellee
Casimiro Development Corporation, and that a new one be issued in favor of
the appellant and his co-heirs and siblings, mentioned above as co-owners pro
indiviso of the said parcel.

(3) No pronouncement as to cost.

SO ORDERED.[9]

The CA denied CDCs motion for reconsideration.

Hence, this appeal, in which CDC urges that the CA committed serious
errors of law,[10] as follows:

(A) xxx in failing to rule that the decree of registration over the Subject
Property is incontrovertible and no longer open to review or attack
 after the lapse of one (1) year from entry of such decree of
registration in favor of Laura Mateo de Castro.

(B) xxx in failing to rule that the present action is likewise barred by res
judicata.

(C) xxx in failing to rule that the instant action for quieting of title and
reconveyance under PD No. 1529 cannot prosper because the Subject
Property had already been conveyed and transferred to third parties
who claimed adverse title for themselves.

(D) xxx in failing to rule that the action of respondent for quieting of
title, reconveyance and damages is barred by laches.

(E) xxx in ruling that the Subject Property must be reconveyed to

respondent because petitioner Casimiro Development Corporation is
not a purchaser in good faith.

CDC argues that it was a buyer in good faith; and that the CA did not rule on
matters that fortified its title in the property, namely: (a) the incontrovertibility of
the title of Laura; (b) the action being barred by laches and res judicata; and (c) the
property having been conveyed to third parties who had then claimed adverse title.

The respondent counters that CDC acquired the property from China Bank
in bad faith, because it had actual knowledge of the possession of the property by
the respondent and his siblings; that CDC did not actually accept delivery of the
possession of the property from China Bank; and that CDC ignored the failure of
China Bank to warrant its title.

Ruling

We grant the petition.

1.
 Indefeasibility of title in
the name of Laura

As basis for recovering the possession of the property, the respondent has assailed
the title of Laura.

We cannot sustain the respondent.

There is no doubt that the land in question, although once a part of the public
domain, has already been placed under the Torrens system of land registration. The
Government is required under the Torrens system of registration to issue an official
certificate of title to attest to the fact that the person named in the certificate is the
owner of the property therein described, subject to such liens and encumbrances as
thereon noted or what the law warrants or reserves.[11] The objective is to obviate
possible conflicts of title by giving the public the right to rely upon the face of the
Torrens certificate and to dispense, as a rule, with the necessity of inquiring
further. The Torrens system gives the registered owner complete peace of mind, in
order that he will be secured in his ownership as long as he has not voluntarily
disposed of any right over the covered land.[12]

The Government has adopted the Torrens system due to its being 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, which will not only be unfair to him as the purchaser, but will
also erode public confidence in the system and will force land transactions to be
attended by complicated and not necessarily conclusive investigations and proof of
ownership. The further consequence will be that land conflicts can be even 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.[13]

Yet, registration under the Torrens system, not being a mode of acquiring
ownership, does not create or vest title.[14] The Torrens certificate of title is merely
an evidence of ownership or title in the particular property described therein.[15] In
that sense, the issuance of the certificate of title to a particular person does not
preclude the possibility that persons not named in the certificate may be co-owners
of the real property therein described with the person named therein, or that the
registered owner may be holding the property in trust for another person.[16]

Nonetheless, it is essential that title registered under the Torrens system

becomes indefeasible and incontrovertible.[17]

The land in question has been covered by a Torrens certificate of title (OCT
No. 6386 in the name of Laura, and its derivative certificates) before CDC became
the registered owner by purchase from China Bank. In all that time, neither the
respondent nor his siblings opposed the transactions causing the various transfers.
In fact, the respondent admitted in his complaint that the registration of the land in
the name of Laura alone had been with the knowledge and upon the agreement of
the entire Lara-Mateo family. It is unthinkable, therefore, that the respondent, fully
aware of the exclusive registration in her sister Lauras name, allowed more than 20
years to pass before asserting his claim of ownership for the first time through this
case in mid-1994. Making it worse for him is that he did so only after CDC had
commenced the ejectment case against his own siblings.
 Worthy of mention is that Candido, Jr., Leonardo, and Cesars defense in the
ejectment case brought by CDC against them was not predicated on a claim of their
ownership of the property, but on their being agricultural lessees or tenants of
CDC. Even that defense was ultimately rejected by this Court by observing in G.R.
No. 128392 as follows:
With regard to the first element, the petitioners have tried to prove
that they are tenants or agricultural lessees of the respondent corporation,
CDC, by showing that the land was originally owned by their
grandfather, Isaias Lara, who gave them permission to work the land,
and that CDC is merely a successor-in-interest of their grandfather. It
must be noted that the petitioners failed to adequately prove their
grandfathers ownership of the land. They merely showed six tax
declarations. It has been held by this Court that, as against a transfer
certificate of title, tax declarations or receipts are not adequate proofs of
ownership. Granting arguendo that the land was really owned by the
petitioners grandfather, petitioners did not even attempt to show how the
land went from the patrimony of their grandfather to that of CDC.
Furthermore, petitioners did not prove, but relied on mere allegation, that
they indeed had an agreement with their grandfather to use the land.

As for the third element, there is apparently no consent between the

parties. Petitioners were unable to show any proof of consent from CDC
to work the land. For the sake of argument, if petitioners were able to
prove that their grandfather owned the land, they nonetheless failed to
show any proof of consent from their grandfather to work the land. Since
the third element was not proven, the fourth element cannot be present
since there can be no purpose to a relationship to which the parties have
not consented.[18]

The respondents attack against the title of CDC is likewise anchored on his
assertion that the only purpose for having OCT No. 6386 issued in the sole name of
Laura was for Laura to hold the title in trust for their mother. This assertion cannot
stand, however, inasmuch as Lauras title had long ago become indefeasible.
 Moreover, the respondents suit is exposed as being, in reality, a collateral
attack on the title in the name of Laura, and for that reason should not prosper.
Registration of land under the Torrens System, aside from perfecting the title and
rendering it indefeasible after the lapse of the period allowed by law, also renders
the title immune from collateral attack.[19] A collateral attack occurs when, in
another action to obtain a different relief and as an incident of the present action, an
attack is made against the judgment granting the title. This manner of attack is to be
distinguished from a direct attack against a judgment granting the title, through an
action whose main objective is to annul, set aside, or enjoin the enforcement of
such judgment if not yet implemented, or to seek recovery if the property titled
under the judgment had been disposed of.[20]

2.
CDC was an innocent purchaser for value

The CA found that CDC acquired the property in bad faith because CDC had
knowledge of defects in the title of China Bank, including the adverse possession
of the respondents siblings and the supposed failure of China Bank to warrant its
title by inserting an as-is, where-is clause in its contract of salewith CDC.

The CA plainly erred in so finding against CDC.

To start with, one who deals with property registered under the Torrens
system need not go beyond the certificate of title, but only has to rely on the
certificate of title.[21] He is charged with notice only of such burdens and claims as
are annotated on the title.[22] The pertinent law on the matter of burdens and claims
is Section 44 of the Property Registration Decree,[23] which provides:

Section 44. Statutory liens affecting title. Every registered owner

receiving a certificate of title in pursuance of a decree of
 registration, and every subsequent purchaser of registered land
taking a certificate of title for value and in good faith, shall hold the
same free from all encumbrancesexcept those noted on said certificate
and any of the following encumbrances which may be subsisting,
namely:

First. Liens, claims or rights arising or existing under the laws and
Constitution of the Philippines which are not by law required to appear
of record in the Registry of Deeds in order to be valid against subsequent
purchasers or encumbrances of record.

Second. Unpaid real estate taxes levied and assessed within two
years immediately preceding the acquisition of any right over the land by
an innocent purchaser for value, without prejudice to the right of the
government to collect taxes payable before that period from the
delinquent taxpayer alone.

Third. Any public highway or private way established or

recognized by law, or any government irrigation canal or lateral thereof,
if the certificate of title does not state that the boundaries of such
highway or irrigation canal or lateral thereof have been determined.

Fourth. Any disposition of the property or limitation on the use

thereof by virtue of, or pursuant to, Presidential Decree No. 27 or any
other law or regulations on agrarian reform.

In short, considering that China Banks TCT No. 99527 was a clean title, that
is, it was free from any lien or encumbrance, CDC had the right to rely, when it
purchased the property, solely upon the face of the certificate of title in the name of
China Bank.[24]

The CAs ascribing of bad faith to CDC based on its knowledge of the
adverse possession of the respondents siblings at the time it acquired the property
from China Bank was absolutely unfounded and unwarranted. That possession did
not translate to an adverse claim of ownership that should have put CDC on actual
notice of a defect or flaw in the China Banks title, for the respondents siblings
themselves, far from asserting ownership in their own right, even characterized
their possession only as that of mere agricultural tenants. Under no law was
possession grounded on tenancy a status that might create a defect or inflict a flaw
in the title of the owner. Consequently, due to his own admission in his complaint
that the respondents own possession was not any different from that of his siblings,
there was really nothing factually or legally speaking that ought to have alerted
CDC or, for that matter, China Bank and its predecessors-in-interest, about any
defect or flaw in the title.

The vendees notice of a defect or flaw in the title of the vendor, in order for it to
amount to bad faith, should encompass facts and circumstances that would impel a
reasonably cautious person to make further inquiry into the vendors title,[25] or facts
and circumstances that would induce a reasonably prudent man to inquire into the
status of the title of the property in litigation.[26] In other words, the presence of
anything that excites or arouses suspicion should then prompt the vendee to look
beyond the certificate and to investigate the title of the vendor appearing on the
face of said certificate.[27]

And, secondly, the CA grossly erred in construing the as-is, where-is clause
contained in the deed of sale between CDC (as vendee) and China Bank (as
vendor) as proof or manifestation of any bad faith on the part of CDC. On the
contrary, the as-is, where-is clause did not affect the title of China Bank because it
related only to the physical condition of the property upon its purchase by CDC.
The clause only placed on CDC the burden of having the occupants removed from
the property. In a sale made on an as-is, where-is basis, the buyer agrees to take
possession of the things sold in the condition where they are found and from the
place where they are located, because the phrase as-is, where-ispertains solely to
the physical condition of the thing sold, not to its legal situation and is merely
descriptive of the state of the thing sold without altering the sellers responsibility to
deliver the property sold to the buyer.[28]

What the foregoing circumstances ineluctably indicate is that CDC, having

paid the full and fair price of the land, was an innocent purchaser for value, for,
according to Sandoval v. Court of Appeals:[29]
A purchaser in good faith 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 claim or interest of some other
persons in the property. He buys the property with the belief that the
person from whom he receives the thing was the owner and could
convey title to the property. A purchaser cannot close his eyes to facts
which should put a reasonable man on his guard and still claim he acted
in good faith.

WHEREFORE, we grant the petition for review on certiorari; set aside the
decision of the Court of Appeals in CA-GR. CV No. 71696; dismiss the complaint
in Civil Case No. 94-2045; and declare Transfer Certificate of Title No. T-34640 in
the name of Casimiro Development Corporation valid and subsisting.

The respondent shall pay the costs of suit.

SO ORDERED.

Casimiro Development Corporation vs. Renato L.

Mateo
Casimiro Development Corporation vs. Renato L. Mateo
G.R. No. 175485, July 17, 2011

FACTS:
In 1988, petitioner purchased from China Bank the land in question which was
previously sold by the mother of Mateo to Rodolfo Pe who in turn constituted a
mortgage on the property in favor of China Bank as security for a loan. China Bank
foreclosed the mortgage and consolidated its ownership of the property after Rodolfo
failed to redeem. A TCT was issued in the name of China Bank. In 1991, CDC brought
an action for unlawful detatiner against the respondents siblings. Respondent
counters that CDC acquired the property from China Bank in bad faith because it
had actual knowledge of the possession of the property by the respondent and his
siblings.

ISSUE:

WON CDC was an innocent purchaser for value.

HELD:

One who deals with property registered under the Torrens system need not go
beyond the certificate of title, but only has to rely on the certificate of title. He is
charged with notice only of such burdens and claims as are annotated on the title.
China Banks TCTs was a clean title, that is, it was free from any lien or
encumbrance, CDC had the right to rely, when it purchased the property, solely upon
the face of the certificate of title in the name of China Bank. The respondents
siblings possession did not translate to an adverse claim of ownership. They even
characterized their possession only as that of mere agricultural tenants. Under no
law was possession grounded on tenancy a status that might create a defect or inflict
a law in the title of the owner. CDC having paid the full and fair price of the land, was
an innocent purchaser for value. The TCT in the name of CDC was declared valid and
subsisting.

G.R. No. 162593 September 26, 2006

REMEGIA Y. FELICIANO, Substituted by the Heirs of REMEGIA Y.

FELICIANO, as represented by NILO Y. FELICIANO, petitioners,
vs.
SPOUSES AURELIO and LUZ ZALDIVAR, respondents.

DECISION

CALLEJO, SR., J.:

Before the Court is the petition for review on certiorari filed by the Heirs of
Remegia Y. Feliciano (as represented by Nilo Y. Feliciano) seeking the reversal
of the Decision1 dated July 31, 2003 of the Court of Appeals (CA) in CA-G.R. CV
No. 66511 which ordered the dismissal of the complaint filed by Remegia Y.
Feliciano2 for declaration of nullity of title and reconveyance of property. The
assailed decision of the appellate court reversed and set aside that of the
Regional Trial Court (RTC) of Cagayan de Oro City, Branch 25 in Civil Case No.
92-423.

The factual and procedural antecedents of the present case are as follows:

Remegia Y. Feliciano filed against the spouses Aurelio and Luz Zaldivar a
complaint for declaration of nullity of Transfer Certificate of Title (TCT) No. T-
17993 and reconveyance of the property covered therein consisting of 243
square meters of lot situated in Cagayan de Oro City. The said title is registered
in the name of Aurelio Zaldivar.

In her complaint, Remegia alleged that she was the registered owner of a parcel
of land situated in the District of Lapasan in Cagayan de Oro City with an area of
444 square meters, covered by TCT No. T-8502. Sometime in 1974, Aurelio,
allegedly through fraud, was able to obtain TCT No. T-17993 covering the 243-
sq-m portion of Remegias lot as described in her TCT No. T-8502.

According to Remegia, the 243-sq-m portion (subject lot) was originally leased
from her by Pio Dalman, Aurelios father-in-law, for P5.00 a month, later
increased to P100.00 a month in 1960. She further alleged that she was going to
mortgage the subject lot to Ignacio Gil for P100.00, which, however, did not push
through because Gil took back the money without returning the receipt she had
signed as evidence of the supposed mortgage contract. Thereafter, in 1974,
Aurelio filed with the then Court of First Instance of Misamis Oriental a petition for
partial cancellation of TCT No. T-8502. It was allegedly made to appear therein
that Aurelio and his spouse Luz acquired the subject lot from Dalman who, in
turn, purchased it from Gil. The petition was granted and TCT No. T-17993 was
issued in Aurelios name.

Remegia denied that she sold the subject lot either to Gil or Dalman. She
likewise impugned as falsified the joint affidavit of confirmation of sale that she
and her uncle, Narciso Labuntog, purportedly executed before a notary public,
where Remegia appears to have confirmed the sale of the subject property to Gil.
She alleged that she never parted with the certificate of title and that it was never
lost. As proof that the sale of the subject lot never transpired, Remegia pointed
out that the transaction was not annotated on TCT No. T-8502.

In their answer, the spouses Zaldivar denied the material allegations in the
complaint and raised the affirmative defense that Aurelio is the absolute owner
and possessor of the subject lot as evidenced by TCT No. 17993 and Tax
Declaration No. 26864 covering the same. Aurelio claimed that he acquired the
subject lot by purchase from Dalman who, in turn, bought the same from Gil on
April 4, 1951. Gil allegedly purchased the subject lot from Remegia and this sale
was allegedly conformed and ratified by the latter and her uncle, Narciso
Labuntog, before a notary public on December 3, 1965.

After Aurelio obtained a loan from the Government Service Insurance System
(GSIS), the spouses Zaldivar constructed their house on the subject lot. They
alleged that they and their predecessors-in-interest had been occupying the said
property since 1947 openly, publicly, adversely and continuously or for over 41
years already. Aurelio filed a petition for the issuance of a new owners duplicate
copy of TCT No. T-8502 because when he asked Remegia about it, the latter
claimed that it had been lost.

After due trial, the RTC rendered judgment in favor of Remegia. It declared that
TCT No. 17993 in the name of Aurelio was null and void for having been
obtained through misrepresentation, fraud or evident bad faith by claiming in his
affidavit that Remegias title (TCT No. T-8502) had been lost, when in fact it still
existed.

The court a quo explained that "the court that orders a title reconstituted when
the original is still existing has not acquired jurisdiction over the case. A judgment
otherwise final may be annulled not only on extrinsic fraud but also for lack of
jurisdiction."3 Aurelios use of a false affidavit of loss, according to the court a
quo, was similar to the use during trial of a forged document or perjured
testimony that prevented the adverse party, Remegia, from presenting her case
fully and fairly.

The RTC likewise noted that no public instrument was presented in evidence
conveyancing or transferring title to the subject lot from Remegia to Dalman, the
alleged predecessor-in-interest of the spouses Zaldivar. The only evidence
presented by the said spouses was a joint affidavit of confirmation of sale
purportedly signed by Remegia and her uncle, the execution of which was denied
by the latters children. The certificate of title of the spouses Zaldivar over the
subject property was characterized as irregular because it was issued in a
calculated move to deprive Remegia of dominical rights over her own property.
Further, the spouses Zaldivar could not set up the defense of indefeasibility of
Torrens title since this defense does not extend to a transferor who takes the
certificate of title with notice of a flaw therein. Registration, thus, did not vest title
in favor of the spouses; neither could they rely on their adverse or continuous
possession over the subject lot for over 41 years, as this could not prevail over
the title of the registered owner pursuant to Sections 504 and 515 of Act No. 496,
otherwise known as The Land Registration Act.
The dispositive portion of the decision of the court a quo reads:

IN THE LIGHT OF THE FOREGOING, and by preponderance of evidence,

judgment is hereby rendered canceling TCT T-17993 and reconveyance of 243
square meters the title and possession of the same, by vacating and turning over
possession of the 243 square meters of the subject property to the plaintiff
[referring to Remegia] which is part of the land absolutely owned by the plaintiff
covered by [TCT] T-8502 and to solidarily pay the plaintiff Fifty Thousand Pesos
(P50,000.00) as moral damages; Ten Thousand Pesos (P10,000.00) as
exemplary damages; Fifty Thousand Pesos (P50,000.00) as attorneys fees and
Ten Thousand Pesos (P10,000.00) expenses for litigation to the plaintiff.

SO ORDERED.6

On appeal, the CA reversed the decision of the RTC and ruled in favor of the
spouses Zaldivar. In holding that Remegia sold to Gil a 243 sq m portion of the
lot covered by TCT No. T-8502, the appellate court gave credence to Exhibit "5,"
the deed of sale presented by the spouses Zaldivar to prove the transaction. The
CA likewise found that Gil thereafter sold the subject property to Dalman who
took actual possession thereof. By way of a document denominated as joint
affidavit of confirmation of sale executed before notary public Francisco Velez on
December 3, 1965, Remegia and her uncle, Narciso Labuntog, confirmed the
sale by Remegia of the subject lot to Gil and its subsequent conveyance to
Dalman. Per Exhibit "6," the CA likewise found that Dalman had declared the
subject lot for taxation purposes in his name. In 1965, Dalman sold the same to
the spouses Zaldivar who, in turn, had it registered in their names for taxation
purposes beginning 1974. Also in the same year, Aurelio filed with the then CFI
of Misamis Oriental a petition for the issuance of a new owners duplicate copy of
TCT No. T-8502, alleging that the owners duplicate copy was lost; the CFI
granted the petition on March 20, 1974. Shortly, Aurelio filed with the same CFI
another petition, this time for the partial cancellation of TCT No. T-8502 and for
the issuance of a new certificate of title in Aurelios name covering the subject lot.
The CFI issued an order granting the petition and, on the basis thereof, the
Register of Deeds of Cagayan de Oro City issued TCT No. T-17993 covering the
subject lot in Aurelios name.

Based on the foregoing factual findings, the appellate court upheld the spouses
Zaldivars ownership of the subject lot. The CA stated that Remegias claim that
she did not sell the same to Gil was belied by Exhibit "5," a deed which showed
that she transferred ownership thereof in favor of Gil. The fact that the said
transaction was not annotated on Remegias title was not given significance by
the CA since the lack of annotation would merely affect the rights of persons who
are not parties to the said contract. The CA also held that the joint affidavit of
confirmation of sale executed by Remegia and Narciso Labuntog before a notary
public was a valid instrument, and carried the evidentiary weight conferred upon
it with respect to its due execution.7 Moreover, the CA found that the notary
public (Atty. Francisco Velez) who notarized the said document testified not only
to its due execution and authenticity but also to the truthfulness of its contents.
The contradiction between the testimonies of the children of Narciso Labuntog
and the notary public (Atty. Velez), according to the CA, casts doubt on the
credibility of the former as it was ostensible that their version of the story was
concocted.8

The CA further accorded in favor of the judge who issued the order for the
issuance of the new owners duplicate copy of TCT No. T-8502 the presumption
of regularity in the performance of his official duty. It noted that the same was
issued by the CFI after due notice and hearing.

Moreover, prescription and laches or estoppel had already set in against

Remegia. The appellate court pointed out that TCT No. T-17993 in the name of
Aurelio was issued on September 10, 1974, while Remegias complaint for
annulment and reconveyance of property was filed more than 17 years thereafter
or on August 10, 1992. Consequently, Remegias action was barred by
prescription because an action for reconveyance must be filed within 10 years
from the issuance of the title since such issuance operates as a constructive
notice.9 The CA also noted that the spouses Zaldivar constructed their house on
the subject lot some time in 1974-1975, including a 12-foot firewall made of
hollow blocks, and Remegia took no action to prevent the said construction.

The dispositive portion of the assailed CA decision reads:

WHEREFORE, foregoing premises considered, the December 3, 1999 Decision

of the Regional Trial Court of Misamis Oriental, Cagayan de Oro City, in Civil
Case No. 92-423, is REVERSED and SET ASIDE and a new one is entered
DISMISSING the said civil case.

SO ORDERED.10

When their motion for reconsideration was denied by the CA in the assailed
Resolution dated February 4, 2004, the heirs of Remegia (the petitioners) sought
recourse to the Court. In their petition for review, they allege that the appellate
court gravely erred

A.
IN NOT DISMISSING THE APPEAL OF THE RESPONDENTS (DEFENDANTS-
APELLANTS) MOTU PROPIO OR EXPUNGING THE BRIEF FOR
DEFENDANTS-APPELLANTS FROM RECORD FOR FAILURE TO FILE THE
REQUIRED BRIEF FOR THE DEFENDANTS-APPELLANTS ON TIME BUT
BEYOND THE LAST AND FINAL EXTENDED PERIOD WITHIN WHICH TO
FILE THE SAID BRIEF IN VIOLATION TO Section 7 and section 12, rule 44 of
the revised rules of court and in contradiction to the ruling enunciated in catalina
roxas, et al. vs. court of appeals, g.r. no. L-76549, december 10, 1987.

B.

in denying the motion for reconsideration which was filed within the fifteen-day
reglementary period in violation to the rules of court.

c.

in ruling that the court who ordered the issuance of new certificate of title despite
existence of owners duplicate copy that was never lost has jurisdiction over the
case.

d.

in concluding that petitioners (Plaintiff-appellee) claim of ownership over the

subject lot was barred by estoppel or laches.

e.

in concluding that the respondents (defendants-appellants) are the absolute

owners of the subject lot based on tct no. 17993 issued to them.

f.

in obviating essential and relevant facts, had it been properly appreciated, would
maintain absolute ownership of petitioner (plaintiff-appellee) over the subject lot
as evidenced by existing tct no. t-8502.11

The Court finds the petition meritorious.

It should be recalled that respondent Aurelio Zaldivar filed with the then CFI of
Misamis Oriental a petition for issuance of a new owners duplicate copy of TCT
No.T-8502, alleging that the owners duplicate copy was lost. In the Order dated
March 20, 1974, the said CFI granted the petition and consequently, a new
owners duplicate copy of TCT No. T-8502 was issued.
However, as the trial court correctly held, the CFI which granted respondent
Aurelios petition for the issuance of a new owners duplicate copy of TCT No. T-
8502 did not acquire jurisdiction to issue such order. It has been consistently
ruled that "when the owners duplicate certificate of title has not been lost, but is
in fact in the possession of another person, then the reconstituted certificate is
void, because the court that rendered the decision had no jurisdiction.
Reconstitution can validly be made only in case of loss of the original
certificate."12 In such a case, the decision authorizing the issuance of a new
owners duplicate certificate of title may be attacked any time.13

The new owners duplicate TCT No. T-8502 issued by the CFI upon the petition
filed by respondent Aurelio is thus void. As Remegia averred during her
testimony, the owners duplicate copy of TCT No. T-8502 was never lost and was
in her possession from the time it was issued to her:

Q A while ago, you said that you were issued a title in 1968, can you tell the
Honorable Court who was in possession of the title?

A I am the one in possession and I am the one keeping the title.

Q Even up to the present?

A Yes, Sir.

Q Was there any instance that this title was borrowed from you?

A No, Sir.

Q Was there any instance that this title was lost from your possession?

A No, Sir.

Q Was there any instance that this title was surrendered to the Register of Deeds
of the City of Cagayan de Oro?

A No, Sir. There never was an instance There never was an instance that this
title was surrendered to the Register of Deeds.

Q As there any instance that you petitioned to the Honorable Court for the
issuance of a new owners duplicate copy of this title in lieu of the lost copy of
said title?

A No, Sir. There was never an instance because this title was never lost.14
Consequently, the court a quo correctly nullified TCT No. T-17993 in Aurelios
name, emanating as it did from the new owners duplicate TCT No. T-8502,
which Aurelio procured through fraud. Respondent Aurelio cannot raise the
defense of indefeasibility of title because "the principle of indefeasibility of a
Torrens title does not apply where fraud attended the issuance of the title. The
Torrens title does not furnish a shield for fraud."15 As such, a title issued based on
void documents may be annulled.16

The appellate courts reliance on the joint affidavit of confirmation of sale

purportedly executed by Remegia and her uncle, Narciso Labuntog, is not
proper. In the first place, respondent Aurelio cannot rely on the joint affidavit of
confirmation of sale to prove that they had validly acquired the subject lot
because, by itself, an affidavit is not a mode of acquiring ownership.17 Moreover,
the affidavit is written entirely in English in this wise:

JOINT AFFIDAVIT OF CONFIRMATION OF SALE18

We, NARCISO LABUNTOG and REMEGIA YAPE DE FELICIANO, both of legal

age, Filipino citizens and residents of Lapasan, Cagayan de Oro City,
Philippines, after being duly sworn according to law, depose and say:

1. That the late FRANCISCO LABUNTOG is our common ancestor, the

undersigned NARCISO LABUNTOG being one of his sons and the undersigned
REMEGIA YAPE DE FELICIANO being the daughter of the late Emiliana
Labuntog, sister of Narciso Labuntog;

2. That after his death, the late Francisco Labuntog left behind a parcel of land
known as Lot No. 2166 C-2 of the Cagayan Cadastre situated at Lapasan, City of
Cagayan de Oro, Philippines which is being administered by the undersigned
Narciso Labuntog under Tax Decl. No. 27633;

3. That the entire Cadastral Lot No. 2166 C-2 has been subdivided and
apportioned among the heirs of the late Francisco Labuntog, both of the
undersigned affiants having participated and shared in the said property,
Remegia Yape de Feliciano having inherited the share of her mother Emiliana
Labuntog, sister of Narciso Labuntog;

4. That on April 4, 1951, Remegia Yape de Feliciano sold a portion of her share
to one Ignacio Gil and which portion is more particularly described and bounded
as follows:

"On the North for 13 meters by Agustin Cabaraban;

On the South for 13 meters by Antonio Babanga;

On the East for 18 meters by Clotilde Yape; and

On the West for 18meters by Agustin Cabaraban;"

5. That sometime in the year 1960, the said Ignacio Gil conveyed the same
portion to Pio Dalman, who is of legal age, Filipino citizen and likewise a resident
of Lapasan, Cagayan de Oro City and that since 1960 up to the present, the said
Pio Dalman has been in continuous, open, adverse and exclusive possession of
the property acquired by him in concept of owner;

6. That we hereby affirm, ratify and confirm the acquisition of the above
described portion acquired by Pio Dalman inasmuch as the same is being used
by him as his residence and family home and we hereby request the Office of the
City Assessor to segregate this portion from our Tax Decl. No. 27633 and that a
new tax declaration be issued in the name of PIO DALMAN embracing the area
acquired and occupied by him.

IN WITNESS WHEREOF, we have hereunto affixed our signatures on this 3rd

day of December, 1965 at Cagayan de Oro City, Philippines.

(SGD.) Narciso Labuntog (SGD.)Remegia Yape de Feliciano

NARCISO LABUNTOG REMEGIA YAPE DE FELICIANO

Affiant Affiant

SUBSCRIBED & SWORN to before me this 3rd day of December, 1965 at

Cagayan de Oro City, Philippines, affiants exhibited their Residence Certificates
as follows: NARCISO LABUNTOG, A-1330509 dated Oct. 5, 1965 and
REMEGIA YAPE DE FELICIANO, A-1811104 dated Dec. 3, 1965 both issued at
Cagayan de Oro City.

(SGD.) ILLEGIBLE

FRANCISCO X. VELEZ

Notary Public

However, based on Remegias testimony, she could not read and understand
English:

COURT:
Can you read English?

A No, I cannot read and understand English.

ATTY. LEGASPI:

Q What is your highest educational attainment?

A Grade 3.

Q But you can read and understand Visayan?

A Yes, I can read Visayan, but I cannot understand well idiomatic visayan terms
(laglom nga visayan).19

On this point, Article 1332 of the Civil Code is relevant:

ART.1332. When one of the parties is unable to read, or if the contract is in a

language not understood by him, and mistake or fraud is alleged, the person
enforcing the contract must show that the terms thereof have been fully
explained to the former.

The principle that a party is presumed to know the import of a document to which
he affixes his signature is modified by the foregoing article. Where a party is
unable to read or when the contract is in a language not understood by the party
and mistake or fraud is alleged, the obligation to show that the terms of the
contract had been fully explained to said party who is unable to read or
understand the language of the contract devolves on the party seeking to enforce
the contract to show that the other party fully understood the contents of the
document. If he fails to discharge this burden, the presumption of mistake, if not,
fraud, stands unrebutted and controlling.20

Applying the foregoing principles, the presumption is that Remegia, considering

her limited educational attainment, did not understand the full import of the joint
affidavit of confirmation of sale and, consequently, fraud or mistake attended its
execution. The burden is on respondents, the spouses Zaldivar, to rebut this
presumption. They tried to discharge this onus by presenting Atty. Francisco
Velez (later RTC Judge) who notarized the said document. Atty. Velez testified
that he "read and interpreted" the document to the affiants and he asked them
whether the contents were correct before requiring them to affix their signatures
thereon.21 The bare statement of Atty. Velez that he "read and interpreted" the
document to the affiants and that he asked them as to the correctness of its
contents does not necessarily establish that Remegia actually comprehended or
understood the import of the joint affidavit of confirmation of sale. Nowhere is it
stated in the affidavit itself that its contents were fully explained to Remegia in the
language that she understood before she signed the same. Thus, to the mind of
the Court, the presumption of fraud or mistake attending the execution of the joint
affidavit of confirmation of sale was not sufficiently overcome.

Moreover, the purported joint affidavit of confirmation of sale failed to state

certain important information. For example, it did not mention the consideration
or price for the alleged sale by Remegia of the subject lot to Ignacio Gil. Also,
while it stated that the subject lot was conveyed by Ignacio Gil to Pio Dalman, it
did not say whether the conveyance was by sale, donation or any other mode of
transfer. Finally, it did not also state how the ownership of the subject lot was
transferred from Pio Dalman to respondent Aurelio or respondents.

Respondents claim that they had been occupying the subject lot since 1947
openly, publicly, adversely and continuously or for over 41 years is unavailing. In
a long line of cases,22 the Court has consistently ruled that lands covered by a
title cannot be acquired by prescription or adverse possession. A claim of
acquisitive prescription is baseless when the land involved is a registered land
following Article 112623 of the Civil Code in relation to Section 46 of Act No. 496
or the Land Registration Act (now Section 4724 of P.D. No 1529):

Appellants claim of acquisitive prescription is likewise baseless. Under Article

1126 of the Civil Code, prescription of ownership of lands registered under the
Land Registration Act shall be governed by special laws. Correlatively, Act No.
496 provides that no title to registered land in derogation of that of the registered
owner shall be acquired by adverse possession. Consequently, proof of
possession by the defendants is both immaterial and inconsequential.25

Neither can the respondents spouses Zaldivar rely on the principle of

indefeasibility of TCT No. 17793 which was issued on September 10, 1974 in
favor of respondent Aurelio. As it is, the subject lot is covered by two different
titles: TCT No. T-8502 in Remegias name covering an area of 444 sq m
including therein the subject lot, and TCT No. 17793 in the name of respondent
Aurelio covering the subject lot. Aurelios title over the subject lot has not become
indefeasible, by virtue of the fact that TCT No. T-8502 in the name of Remegia
has remained valid. The following disquisition is apropos:

The claim of indefeasibility of the petitioners 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 x x x It never parted with it; it never handed
or delivered to anyone its owners 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
petitioners 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.26

Remegias TCT No. T-8502, thus, prevails over respondent Aurelios TCT No.
17793, especially considering that, as earlier opined, the latter was correctly
nullified by the RTC as it emanated from the new owners duplicate TCT No. T-
8502, which in turn, respondent Aurelio was able to procure through fraudulent
means.

Contrary to the appellate courts holding, laches has not set in against Remegia.
She merely tolerated the occupation by the respondents of the subject lot:

Q You also stated in the direct that the defendants in this case, Mr. and Mrs.
Zaldivar, were issued a title over a portion of this land which you described a
while ago?

A We knew about that only recently.

Q When was that when you knew that the defendants were issued title over a
portion of the land you described a while ago?

A In June, 1992.

Q In what way did you discover that a portion of the land was titled in the name of
the defendants?

A I discovered that my property was titled by Mr. and Mrs. Zaldivar when I went
to the Register of Deeds for the purpose of partitioning my property among my
children.

Q And you were surprised why it is titled in their names?

A Yes.

Q Is it not a fact that the defendants have constructed their house on a portion of
the land you described a while ago?
A Yes. I knew that the Zaldivars built a house on the property I described a while
ago, but I did not bother because I know that I can get that property because I
own that property.

Q And the defendants constructed that house in 1974-75, am I correct?

A Yes.

Q And as a matter of fact, you have also a house very near to the house that was
constructed by the defendants in this case?

A Yes.

Q Can you tell us what is the distance between your house and the house
constructed by the defendants in 1974?

A They are very near because they constructed their house in my lot.

Q How many meters, more or less?

A It is very near, very close.

Q When they constructed their house, meaning the defendants, did you not stop
the defendants from the construction?

A I did not bother in stopping the Zaldivars in constructing the house because I
am certain that I can get the land because I own the land.

Q Aside from not protesting to the construction, did you not bring this matter to
the attention of the barangay captain or to the police authorities?

A No, because I did not bring this matter to the barangay captain nor to the police
authorities. It is only now that we discovered that it is already titled.

Q When you said now, it is in 1992?

A Yes.

Q Is it not a fact that after the house was finished the defendants and their family
resided in that house which they constructed?

A Yes, after the house was finished, they resided in that house.
Q As a matter of fact, from that time on up to the present, the defendants are still
residing in that house which they constructed in 1974 or 1975, am I correct?

A Yes.

Q As a matter of fact also the defendants fenced the lot in which their house was
constructed with hollow blocks, am I correct?

A Yes, the house of the Zaldivars was fenced by them with hollow blocks and I
did not stop them to avoid trouble.

Q As a matter of fact, the boundary between your house and the house of
Zaldivar, there was constructed a firewall made of hollow blocks about twelve
feet in height, am I correct?

A Yes.

Q Such that you cannot see their house and also the Zaldivars cannot see your
house because of that high firewall, am I correct?

A We can still see each other because the firewall serves as the wall of their
house.

Q When did the Zaldivars construct that hollow blocks fence? After the house
was finished?

A I cannot remember.

Q But it could be long time ago?

ATTY. VEDAD:

Q That would be repetitious. She answered she could not remember.

ATTY. LEGASPI:

Q It could be many years ago?

A I cannot remember when they constructed the fence.

Q Did you [file] any protest or complaint when the Zaldivars constructed the
hollow blocks fence?

A No.
Q Neither did you bring any action in court or with the barangay captain or the
police authorities when the Zaldivars constructed that hollow blocks fence?

A No, I did not complain the fencing by the Zaldivars. Only now that we know that
we bring this matter to the barangay captain.

Q And in the [office of the] barangay captain, you were able to meet the
defendants, am I correct?

A No. When we went to the barangay captain, the Zaldivars did not appear there;
therefore, we hired a lawyer and filed this case.27

Case law teaches that if the claimants possession of the land is merely tolerated
by its lawful owner, the latters right to recover possession is never barred by
laches:

As registered owners of the lots in question, the private respondents have a right
to eject any person illegally occupying their property. This right is imprescriptible.
Even if it be supposed that they were aware of the petitioners occupation of the
property, and regardless of the length of that possession, the lawful owners have
a right to demand the return of their property at any time as long as the
possession was unauthorized or merely tolerated, if at all. This right is never
barred by laches.28

Nonetheless, the Court is not unmindful of the fact that respondents had built
their house on the subject lot and, despite knowledge thereof, Remegia did not
lift a finger to prevent it. Article 453 of the Civil Code is applicable to their case:

ART. 453. If there was bad faith, not only on the part of the person who built,
planted or sowed on the land of another, but also on the part of the owner of
such land, the rights of one and the other shall be the same as though both had
acted in good faith.

It is understood that there is bad faith on the part of the landowner whenever the
act was done with his knowledge and without opposition on his part.

Under the circumstances, respondents and Remegia are in mutual bad faith and,
as such, would entitle the former to the application of Article 448 of the Civil Code
governing builders in good faith:

ART. 448. The owner of the land on which anything has been built, sown or
planted in good faith, shall have the right to appropriate as his own the works,
sowing or planting, after payment of the indemnity provided for in Articles
54629and 548,30 or to oblige the one who built or planted to pay the price of the
land, and the one who sowed, the proper rent. However, the builder or planter
cannot be obliged to buy the land if its value is considerably more than that of the
building or trees. In such a case, he shall pay reasonable rent, if the owner of the
land does not choose to appropriate the building or trees after the proper
indemnity. The parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.

Following the above provision, the owner of the land on which anything has been
built, sown or planted in good faith shall have the right to appropriate as his own
the building, planting or sowing, after payment to the builder, planter or sower of
the necessary and useful expenses, and in the proper case, expenses for pure
luxury or mere pleasure.31

The owner of the land may also oblige the builder, planter or sower to purchase
and pay the price of the land. If the owner chooses to sell his land, the builder,
planter or sower must purchase the land, otherwise the owner may remove the
improvements thereon. The builder, planter, or sower, however, is not obliged to
purchase the land if its value is considerably more than the building, planting or
sowing. In such case, the builder, planter or sower must pay rent to the owner of
the land. If the parties cannot come to terms over the conditions of the lease, the
court must fix the terms thereof. 32

The right to choose between appropriating the improvement or selling the land on
which the improvement of the builder, planter or sower stands, is given to the
owner of the land,33 Remegia, in this case, who is now substituted by petitioners
as her heirs.

Consequently, the petitioners are obliged to exercise either of the following

options: (1) to appropriate the improvements, including the house, built by the
respondents on the subject lot by paying the indemnity required by law, or (2) sell
the subject lot to the respondents. Petitioners cannot refuse to exercise either
option and compel respondents to remove their house from the land.34 In case
petitioners choose to exercise the second option, respondents are not obliged to
purchase the subject lot if its value is considerably more than the improvements
thereon and in which case, respondents must pay rent to petitioners. If they are
unable to agree on the terms of the lease, the court shall fix the terms thereof.

In light of the foregoing disquisition, the Court finds it unnecessary to resolve the
procedural issues raised by petitioners.

WHEREFORE, the petition is GRANTED. The Decision dated July 31, 2003 and
Resolution dated February 4, 2004 of the Court of Appeals in CA-G.R. CV No.
66511 are REVERSED and SET ASIDE. The Decision dated December 3, 1999
of the Regional Trial Court of Cagayan de Oro City, Branch 25 in Civil Case No.
92-423 is REINSTATED with the MODIFICATION that petitioners are likewise
ordered to exercise the option under Article 448 of the Civil Code.

SO ORDERED.

FELICIANO vs. ZALDIVAR

G.R. No. 162593
September 26, 2006
FACTS: Feliciano filed against the spouses Aurelio and Luz
Zaldivar a complaint for declaration of nullity of Transfer
Certificate of Title and reconveyance of the subject property in
Cagayan de Oro City. The said title is registered in the name of
Aurelio Zaldivar.
In her complaint,Feliciano alleged that she was the registered
owner of a parcel of land covered by a TCT. Sometime in 1974,
Aurelio, allegedly through fraud, was able to obtain a TCT
covering the portion of Felicianos lot as described in her TCT.

According to Feliciano, the subject lot was originally leased

from her by Pio Dalman, Aurelios father-in-law. She further
alleged that she was going to mortgage the subject lot to
Ignacio Gil which however, did not push through because Gil
took back the money without returning the receipt she had
signed as evidence of the supposed mortgage contract.
Thereafter, in 1974, Aurelio filed with the then CFI of Misamis
Oriental a petition for partial cancellation of theTCT in
Felicianos name. It was allegedly made to appear therein that
Aurelio and his spouse Luz acquired the subject lot from
Dalman who, in turn, purchased it from Gil. The petition was
granted and a TCT was issued in Aurelios name.
Remegia denied that she sold the subject lot either to Gil or
Dalman. She likewise impugned as falsified the joint affidavit
of confirmation of sale that she and her uncle, Narciso
Labuntog, purportedly executed before a notary public, where
Remegia appears to have confirmed the sale of the subject
property to Gil. She alleged that she never parted with the
certificate of title and that it was never lost. As proof that the
sale of the subject lot never transpired, Remegia pointed out
that the transaction was not annotated on her TCT.

In their answer, the spouses Zaldivar denied the material

allegations in the complaint and raised the affirmative defense
that Aurelio is the absolute owner and possessor of the subject
lot as evidenced by his TCT and Tax Declaration covering the
same. Aurelio claimed that he acquired the subject lot by
purchase from Dalman who, in turn, bought the same from
Gil on April 4, 1951. Gil allegedly purchased the subject lot
from Remegia and this sale was allegedly conformed and
ratified by the latter and her uncle, Narciso Labuntog, before a
notary public on December 3, 1965.

After Aurelio obtained a loan from the GSIS, the spouses

Zaldivar constructed their house on the subject lot. They
alleged that they and their predecessors-in-interest had been
occupying the said property openly, publicly, adversely and
continuously for over 41 years already. Aurelio filed a petition
for the issuance of a new owners duplicate copy of because
when he asked Remegia about it, the latter claimed that it had
been lost.

The RTC rendered judgment in favor of Remegia. On appeal,

the CA reversed the decision of the RTC and ruled in favor of
the spouses Zaldivar. When their MR was denied by the CA,
the heirs of Feliciano (the petitioners) sought recourse to the
Court in their petition for review.

ISSUE: WON the CA erred:

1. in ruling that the court who ordered the issuance of new
certificate of title despite existence of owners duplicate copy
that was never lost has jurisdiction over the case.
2. in concluding that the respondents (defendants-appellants)
are the absolute owners of the subject lot based on the TCT
issued to them.

3. in concluding that petitioners claim of ownership over the

subject lot was barred by estoppel or laches.

HELD: WHEREFORE, the petition is GRANTED. The

Decision of the CA are REVERSED and SET ASIDE. The
Decision RTC of Cagayan de Oro City is REINSTATED with
the MODIFICATION that petitioners are likewise ordered to
exercise the option under Article 448 of the Civil Code.
1. YES. As the trial court correctly held, the CFI which granted
respondent Aurelios petition for the issuance of a new
owners duplicate copy did not acquire jurisdiction to issue
such order. It has been consistently ruled that when the
owners duplicate certificate of title has not been lost, but is in
fact in the possession of another person, then the
reconstituted certificate is void, because the court that
rendered the decision had no jurisdiction. Reconstitution can
validly be made only in case of loss of the original certificate.
In such a case, the decision authorizing the issuance of a new
owners duplicate certificate of title may be attacked any time
2. YES. The court a quo correctly nullified the TCT in Aurelios
name, emanating as it did from the new owners duplicate,
which Aurelio procured through fraud.

The appellate courts reliance on the joint affidavit of

confirmation of sale purportedly executed by Remegia and her
uncle, Narciso Labuntog, is not proper. In the first place,
respondent Aurelio cannot rely on the joint affidavit of
confirmation of sale to prove that they had validly acquired the
subject lot because, by itself, an affidavit is not a mode of
acquiring ownership. Moreover, the affidavit is written entirely
in English, the hearing revealing that Feliciano does not
understand English.
On this point, Article 1332 of the Civil Code is relevant:

ART.1332. When one of the parties is unable to read, or if the

contract is in a language not understood by him, and mistake
or fraud is alleged, the person enforcing the contract must
show that the terms thereof have been fully explained to the
former.
If the person enforcing the contract fails to discharge this
burden, the presumption of mistake, if not, fraud, stands
unrebutted and controlling. The bare statement of Atty. Velez
(testified for the Zaldivar spouses) that he read and
interpreted the document to the affiants and that he asked
them as to the correctness of its contents does not necessarily
establish that Remegia actually comprehended or understood
the import of the joint affidavit of confirmation of sale
In a long line of cases, the Court has consistently ruled that
lands covered by a title cannot be acquired by prescription or
adverse possession. A claim of acquisitive prescription is
baseless when the land involved is a registered land.
Moreover, respondent Aurelio cannot raise the defense of
indefeasibility of [his] title because the principle of
indefeasibility of a Torrens title does not apply where fraud
attended the issuance of the title. The Torrens title does not
furnish a shield for fraud. As such, a title issued based on
void documents may be annulled.

3. As registered owners of the lots in question, the private

respondents have a right to eject any person illegally
occupying their property. This right is imprescriptible. Even if
it be supposed that they were aware of the petitioners
occupation of the property, and regardless of the length of
that possession, the lawful owners have a right to demand the
return of their property at any time as long as the possession
was unauthorized or merely tolerated, if at all. This right is
never barred by laches

Nonetheless, the Court is not unmindful of the fact that

respondents had built their house on the subject lot and,
despite knowledge thereof, Remegia did not lift a finger to
prevent it. Article 453 of the Civil Code is applicable to their
case:

ART. 453. If there was bad faith, not only on the part of the
person who built, planted or sowed on the land of another, but
also on the part of the owner of such land, the rights of one
and the other shall be the same as though both had acted in
good faith.
It is understood that there is bad faith on the part of the
landowner whenever the act was done with his knowledge and
without opposition on his part.

Under the circumstances, respondents and Remegia are in

mutual bad faith and, as such, would entitle the former to the
application of Article 448 of the Civil Code governing builders
in good faith:

ART. 448. The owner of the land on which anything has been
built, sown or planted in good faith, shall have the right to
appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in Articles 54629 and
548,30 or to oblige the one who built or planted to pay the price
of the land, and the one who sowed, the proper rent. However,
the builder or planter cannot be obliged to buy the land if its
value is considerably more than that of the building or trees.
In such a case, he shall pay reasonable rent, if the owner of the
land does not choose to appropriate the building or trees after
the proper indemnity. The parties shall agree upon the terms
of the lease and in case of disagreement, the court shall fix the
terms thereof.
Following the above provision, the owner of the land on which
anything has been built, sown or planted in good faith shall
have the right to appropriate as his own the building, planting
or sowing, after payment to the builder, planter or sower of
the necessary and useful expenses, and in the proper case,
expenses for pure luxury or mere pleasure.

Consequently, the petitioners are obliged to exercise either of

the following options:
(1) to appropriate the improvements, including the house,
built by the respondents on the subject lot by paying the
indemnity required by law, or

(2) sell the subject lot to the respondents.

Petitioners cannot refuse to exercise either option and compel

respondents to remove their house from the land. In case
petitioners choose to exercise the second option, respondents
are not obliged to purchase the subject lot if its value is
considerably more than the improvements thereon and in
which case, respondents must pay rent to petitioners. If they
are unable to agree on the terms of the lease, the court shall
fix the terms thereof.

G.R. No. 170677, July 31, 2013

VSD REALTY & DEVELOPMENT CORPORATION, Petitioner, v. UNIWIDE SALES,

INC. AND DOLORES BAELLO TEJAD, Respondents.

RESOLUTION

PERALTA, J.:

This is a motion for reconsideration of the Decision1 dated October 24, 2012, the
dispositive portion of which reads: cralavvonlinelawli bra ry

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated
May 30, 2005 and its Resolution dated December 6, 2005 in CA-G.R. CV No. 69824
are REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Caloocan
City, Branch 126, in Civil Case No. C-16933 is REINSTATED with MODIFICATION as
follows:
cralavvonlinelaw lib rary

(1) Paragraph 1 of the dispositive portion of the Decision dated October 2, 2000 of the
Regional Trial Court of Caloocan City, Branch 126, in Civil Case No. C-16933, is
deleted; chanroblesvi rtua lawlib rary

(2) Respondent Dolores Baello and all persons/entities claiming title under her,
including respondent Uniwide Sales, Inc., are ordered to convey and to return the
property or the lot covered by TCT No. T-285312 to petitioner VSD Realty and
Development Corporation upon finality of this Decision; chanroblesvirtualawlibrary

(3) Respondent Dolores Baello is ordered to pay just and reasonable compensation for
the occupancy and use of the land of petitioner VSD Realty and Development
Corporation in the amount of P58,333.30 per month from September 12, 1994 until the
Decision is final and executory, with legal interest of six percent (6%) per
annum reckoned from the filing of the Complaint on June 8, 1995 until the finality of
this Decision. Thereafter, respondent Uniwide Sales, Inc. is jointly and severally liable
with Dolores Baello for the payment to petitioner VSD Realty and Development
Corporation of monthly rental in the amount of P58,333.30 from the finality of this
Decision until the land is actually vacated, with twelve percent (12%) interest per
annum.

(4) The award of attorney's fees is deleted. No costs.

SO ORDERED.2 nadcralavvon linelaw lib rary

We recapitulate the facts. On June 8, 1995, petitioner VSD Realty and Development
Corporation (VSD) filed a Complaint for annulment of title and recovery of possession of
property against respondents Uniwide Sales, Inc. (Uniwide) and Dolores Baello3 with
the Regional Trial Court (RTC) of Caloocan City, Branch 126 (trial court). Petitioner
sought the nullification of Transfer Certificate of Title (TCT) No. (35788) 12754 in the
name of Dolores Baello and the recovery of possession of property that is being
occupied by Uniwide by virtue of a contract of lease with Dolores Baello.

Petitioner VSD alleged that it is the registered owner of a parcel of land in Caloocan
City, with an area of 2,835.30 square meters, more or less, and covered by TCT No. T-
2853124 of the Register of Deeds of Caloocan City. VSD bought the said property from
Felisa D. Bonifacio, whose title thereto, TCT No. 265777, was registered by virtue of an
Order5 dated October 8, 1992 authorizing the segregation of the same in Land
Registration Commission (LRC) Case No. C-3288. Petitioner also alleged that its right to
the subject property and the validity and correctness of the technical description and
location of the property are duly established in LRC Case No. C-3288.6 Petitioner
alleged that its title, TCT No. 285312, is the correct, valid and legal document that
covers the subject property, since it is the result of land registration proceedings in
accordance with law.

Petitioner alleged that respondent Baellos title, TCT No. 35788, covering the same
property, is spurious and can only be the result of falsification and illegal machinations,
and has no legal basis to establish any right over the subject property. Moreover, the
technical description of Baellos title is so general that it is impossible to determine with
certainty the exact location of the property covered by it. Petitioner further alleged that
the technical description has no legal basis per the records of the Lands Management
Bureau and the Bureau of Lands. It added that Baellos title described the property to
be Lot 3-A of subdivision plan Psd 706, but an examination of Psd 706 shows that there
is no Lot 3-A in plan Psd 706. Petitioner contends that in view of the foregoing reasons,
Baello has no legal basis to claim the subject property, and Baellos title, TCT No.
35788, is spurious and illegal and should be annulled. Thus, petitioner sought recovery
of possession of the subject property and the payment of rent from respondents.

Respondent Baello filed a Motion to Dismiss on the grounds that the complaint stated
no cause of action, and that the demand for annulment of title and/or conveyance,
whether grounded upon the commission of fraud or upon a constructive trust, has
prescribed, and is barred by laches. The trial court denied Baellos motion to dismiss as
well as Baello's subsequent motion for reconsideration for lack of merit.

Thereafter, respondent Baello filed an Answer, alleging that the subject property was
bequeathed to her through a will by her adoptive mother, Jacoba Galauran. She alleged
that during the lifetime of Jacoba Galauran, the subject property was originally
surveyed on January 24-26, 19237 and, thereafter, on December 29, 1924.8 Baello
alleged that after Jacoba Galauran died in 1952, her will was duly approved by the
probate court, the Court of First Instance, Pasig, Rizal. Baello stated that she registered
the subject property in her name, and TCT No. (35788) 127549 was issued in her favor
on September 6, 1954. In 1959, she had the subject property surveyed. On July 15,
1988, she entered into a Contract of Lease10 with respondent Uniwide, which erected in
full public view the building it presently occupies. Baello stated that she has been
religiously paying realty taxes for the subject property,11 and that the Complaint should
be dismissed as she enjoys a superior right over the subject property because the
registration of her title predates the registration of petitioners title by at least 40 years.

The deposition of respondent Baello, which was taken on October 1, 1998 at the
Philippine Consular Office in San Francisco, California, United States of America,
affirmed the same facts stated in her Answer.

On October 2, 2000, the trial court rendered a Decision12 in favor of petitioner. The trial
court held that the evidence for petitioner showed that it is the rightful owner of the
subject lot covered by TCT No. 285312 of the Register of Deeds of Caloocan City. The
lot was purchased by petitioner from Felisa D. Bonifacio, who became the owner thereof
by virtue of her petition for segregation of the subject property from Original Certificate
of Title (OCT) No. 994 of the Register of Deeds of Rizal in LRC Case No. C-3288. TCT
No. 265777 was issued to Felisa Bonifacio pursuant to an Order dated October 8, 1992
by the RTC of Caloocan City in LRC Case No. C-3288. The trial court stated that it
cannot question the Order (in LRC Case No. C-3288) issued by a co-equal court in this
respect, considering that Regional Trial Courts now have the authority to act not only
on applications for original registration, but also over all petitions filed after original
registration of title, with power to hear and determine all questions arising from such
applications or petitions.

Moreover, the trial court found that the technical description in respondent Baellos title
is not the same as the technical description in petitioners title, and that a mere reading
of the technical description in petitioners title and that in Baellos title would show that
they are not one and the same. The trial court averred that the technical description of
the subject lot in petitioners title is recorded with the Register of Deeds of Caloocan
City.13

The trial court stated that in the face of the documentary and testimonial evidence of
competent government witnesses who affirmed petitioners right to the technical
description, it was incumbent on respondent Baello to present credible evidence to
overcome the same, but she failed to do so. The trial court held that from the evidence
adduced, petitioner is the registered owner of TCT No. 285312, formerly TCT No.
265777 when Felisa D. Bonifacio was the registered owner, while respondent Baello is
the registered owner of a parcel of land covered by TCT No. (35788) 12754 and
respondent Uniwide is a mere lessee of the land. Baello is the holder of a title over a lot
entirely different and not in any way related to petitioners title and its technical
description. Petitioner proved its ownership and the identity of the subject property that
it sought to recover, which is an essential requisite in its action for annulment of title
and recovery of possession of property. The dispositive portion of the trial court's
Decision reads: cralavvonlinelawl ib rary

WHEREFORE, in the light of the foregoing consideration, judgment is hereby rendered

ordering the following: cralavvonlinelawl ibra ry

1. Declaring TCT No. 35788 [12754] to be null and void; chanroblesv irtualawli bra ry

2. Defendant Baello and all persons/entity claiming title under her, including UNIWIDE,
to convey and to return the property to plaintiff VSD on the basis of the latter's full,
complete, valid and legal ownership; chanroblesvi rtua lawlib rary

3. Defendant Baello and UNIWIDE, jointly and severally, to pay a just and reasonable
compensation per month of P1,200,000.00 with legal interest for the occupancy and
use of plaintiff's land from September 12, 1994, until actually vacated by them; chanroblesv irtualawl ibra ry

4. Defendants, jointly and severally, to pay attorney's fees of P200,000.00.

SO ORDERED.14 nadcralavvon line lawlib rary

Respondents appealed the trial courts decision to the Court of Appeals, which rendered
a Decision dated May 30, 2005 in favor of respondents, and reversed and set aside the
Decision of the RTC and dismissed petitioners complaint.

The Court of Appeals stated that the main issue to be resolved was whether or not
there was a valid ground to annul respondent Baello's TCT No. (35788) 12754 to
warrant the reconveyance of the subject property to petitioner. The Court of Appeals
stated that based on existing jurisprudence, a certificate of title may be annulled or
cancelled by the court under the following grounds: (1) when the title is void because
(a) it was procured through fraud, (b) it was issued for a land already covered by a
prior Torrens title, (c) it covers land reserved for military, naval or civil public purposes,
and (d) it covers a land which has not been brought under the registration proceeding;
(2) when the title is replaced by one issued under a cadastral proceeding; and (3) when
the condition for its issuance has been violated by the registered owner.15 The Court of
Appeals averred that while petitioner sought to annul respondent Baello's TCT No.
35788 on the ground that the same was spurious, it failed to prove that Baellos title
was indeed spurious.

The appellate court also noted that the trial courts decision never mentioned that
Baello's title was spurious. It further stated that any doubt or uncertainty as to the
technical description contained in a certificate of title is not a ground for annulment of
title. It held that since there was no legal basis for the annulment of Baello's TCT No.
35788, the trial court erred in declaring the said title null and void. It stated that well
settled is the rule that a Torrens title is generally conclusive evidence of ownership of
the land referred to therein, and a strong presumption exists that it was regularly
issued and valid.16Hence, respondent Baello's TCT No. 35788 enjoys the presumption of
validity.

Petitioner filed a petition for review on certiorari before this Court, raising the following
issues: (1) The Court of Appeals erred in ruling that the burden of proof did not shift to
respondents, notwithstanding the overwhelming evidence presented by petitioner; (2)
the Court of Appeals misconstrued petitioner's allegation that the issuance of two titles
over the same piece of land has not been proved; (3) the Court of Appeals erred in
treating petitioner's complaint as one only for annulment of title when petitioner also
sought reconveyance of the lot in question; (4) the Court of Appeals erred in ruling that
respondent Baello's title is not spurious; and (5) respondent Uniwide is not a lessee in
good faith.17

This Court discussed the pertinent issues raised with the main issues: whether or not
petitioner is entitled to recover possession of the subject property; and, whether or not
the title of respondent Baello may be annulled.

The established legal principle in actions for annulment or reconveyance of title is that a
party seeking it should establish not merely by a preponderance of evidence but by
clear and convincing evidence that the land sought to be reconveyed is his.18 Article
43419 of the Civil Code provides that to successfully maintain an action to recover the
ownership of a real property, the person who claims a better right to it must prove two
(2) things: first, the identity of the land claimed, and; second, his title thereto.20 In an
action to recover, the property must be identified, and the plaintiff must rely on the
strength of his title and not on the weakness of the defendant's claim.21

The Court upheld the decision of the trial court that petitioner was able to establish
through documentary and testimonial evidence that the technical description of its
Torrens title, embodying the identity of the land claimed, covers the property that is
being occupied by respondent Uniwide by virtue of a lease contract with respondent
Baello, and that a comparison of the technical description of the land covered by the
title of petitioner and the technical description of the land covered by the title of Baello
shows that they are not the same. Hence, the Court granted the petition, and reversed
and set aside the Decision of the Court of Appeals and its Resolution denying
petitioners' motion for reconsideration; and the Decision of the RTC was reinstated with
modification. The dispositive portion of the Court's decision has been cited earlier.

Respondent Baello filed a motion for reconsideration22 of the Court's decision on the
following grounds: cralavvonlinelawl ib rary

1) This honorable Court erred in not holding that petitioner VSD's Title (Transfer
Certificate of Title No. T-285312) is null and void and that the same cannot give rise to
any claim of ownership or possession over the subject property, having been derived
from the fake and non- existent Original Certificate of Title (OCT) No. 994 dated 19
April 1917, which purportedly covered the non-existent Maysilo estate.

2) This honorable Court erred, and deprived respondent Baello of due process, when it
made a finding that respondent Baello's title ([TCT] No. (35788) 12754) does not cover
the subject property considering that: cralavvonli nelawlib ra ry
(a) Whether respondent Baello's title covers the subject property was never the issue in
this case. In praying for the annulment of respondent Baello's title, the basic underlying
premise and basis of such action is that the two titles, petitioner VSD's title and
respondent Baello's title, cover the same property. Even if VSD's action is considered as
one for reconveyance, the same hinges on the validity of the title of VSD.

(b) A determination of whether a certificate of title's technical description covers a

particular area of land is a matter involving technical expertise, which this Honorable
Court does not have. Such a determination can only be resolved through a survey
conducted by a licensed and reputable geodetic engineer.

(c) In any case, records of the case show that respondent Baello was able to establish
through positive evidence that her title covers the subject property.

3) This honorable Court erred in finding that petitioner VSD was able to prove that it
has a better right to the subject property by mere presentation of TCT No. T-28512
registered under its name and by showing that the technical descriptions contained in
TCT No. T-28512 correctly described the subject property. On the contrary, the
evidence presented by petitioner VSD is insufficient to overcome the presumptive title
of respondent Baello, who has been in possession of the subject property for more than
fifty years. Thus, this instant action for reconveyance of the subject property initiated
by petitioner VSD must fail.

4) This honorable Court erred in not holding that respondent Baello enjoys a superior
right to the disputed property because the registration of her title predated the
registration of petitioner VSD's title by at least 40 years.

5) This honorable Court erred in ordering respondent Baello to pay monthly

compensation to petitioner VSD considering that respondent Baello merely entered into
a contract of lease with Uniwide involving land that is covered by the technical
description of her title which this Honorable Court has held to be valid.23

On February 13, 2013, respondent Baello,24 by counsel, filed a Motion for Leave and
Time to File Judicial Affidavit of Mr. Felino Cortez and Supplemental Motion for
Reconsideration (Re: Decision dated 24 October 2012). In the said motion, respondent
Baello contended that subsequent to the filing of her motion for reconsideration, she
discovered new evidence, not available at the time of trial and of the filing of her
motion for reconsideration, which established that petitioner VSD's TCT No. T-285312
cannot be traced to the legitimate and authentic TCT No. 994; hence, petitioner's title is
null and void. Baello's daughter, Bernadette Flores, requested Mr. Felino Cortez, retired
and former Director on Registration of the Land Registration Authority (LRA) to conduct
an investigation on petitioner VSD's TCT No. T-285312. Mr. Cortez examined the
documents with the LRA and the Register of Deeds of Caloocan, and he allegedly found
that the copy of Felisa Bonifacio's TCT No. 265777/T-1325 that was presented to the
Register of Deeds of Caloocan, for the purpose of the issuance of petitioner VSD's TCT
No. T-285312, was tampered to fraudulently reflect that it was derived from the
legitimate and authentic OCT No. 994 dated May 3, 1917. It is alleged that the original
microfilm copy retained by the LRA shows that the same TCT No. 265777/T-1325 did
not originate from the legitimate and authentic OCT No. 994 dated May 3, 1917, but
was instead derived from a certain OCT No. 994 dated April 19, 1912. In view of this
development, and in the interest of justice, and to protect respondent Baello's
constitutional right to property, and to avoid conflicting ruling of this Court, respondent
Baello begged the indulgence of this Court to grant her Motion for Leave and Time to
File Judicial Affidavit of Mr. Felino Cortez and Supplemental Motion for
Reconsideration, which motion was granted by the Court.25

On March 14, 2013, respondent Dolores Baello, by counsel, filed a Supplemental Motion
for reconsideration of the Decision dated October 24, 201226 on the following
grounds: cralavvonlinelawli bra ry

1) Felisa Bonifacio's [TCT] No. 265777/T-1325, from which petitioner [VSD] derived its
title, is null and void, having been derived from a fake and non-existent OCT No. 994.
This new evidence bolsters respondent Baello's position that this honorable Court erred
in not holding that petitioner VSD's title (TCT No. T-285312) is null and void and cannot
give rise to any claim of ownership or possession over the subject property; chanroble svi rtualawl ib rary

2) This honorable Court seriously erred in finding that respondent Baello's TCT No.
(35788) 12754 does not cover the subject property. A careful examination of
respondent Baello's TCT No. (35788) 12754 and petitioner VSD's TCT No. T-285312 will
show that the technical descriptions of the land referred to in those titles both refer to
the same parcel of land; chanroble svirtualawl ibra ry

3) Aside from the manifest irregularities appearing on the face of Felisa Bonifacio's TCT
No. 265777/T-1325 (from which petitioner VSD derived its title), Felisa Bonifacio's TCT
No. 265777/T-1325 cannot be traced back to the legitimate and authentic OCT No. 994.
On the other hand, respondent Baello's TCT No. (35788) 12754 and its predecessor
titles can be traced back to the legitimate and authentic OCT No. 994 dated 3 May
1917.27

Petitioner VSD was required to file a comment on the motion for reconsideration. In its
Comment on the motion for reconsideration and the supplemental motion for
reconsideration, petitioner contends that a valid title can arise even from an allegedly
void title if a buyer in good faith, like petitioner, intervenes; that the alleged nullity of
its title cannot be raised for the first time on appeal; that additional evidence cannot be
presented for the first time on appeal, more so in a motion for reconsideration before
this Court; and that respondent Baello failed to prove that her title covers the subject
property, among others.

In the main, respondent Baello contends that the Court erred in not declaring petitioner
VSD's TCT No. T-285312 as null and void, considering that it is derived from Felisa
Bonifacio's TCT No. 265777/T-1325, which, in turn, is derived from the false and
fictitious OCT No. 994 dated April 19, 1917. The records of this case, however,
show that Felisa Bonifacio's TCT No. 265777/T-1325 and VSD's TCT No. T-
285312 are derived from the legitimate OCT No. 994 registered on May 3,
1917, which date has been held as the correct date of registration of the said
OCT in Manotok Realty, Inc. v. CLT Realty Development Corporation.28 In her
Motion for Leave and Time to File Judicial Affidavit of Mr. Felino Cortez and
Supplemental Motion for Reconsideration, which the Court granted, respondent Baello
contends that she has additional evidence showing that the copy of Felisa Bonifacio's
TCT No. 265777/T-1325 that was presented to the Register of Deeds of Caloocan, for
the purpose of the issuance of petitioner VSD's TCT No. T-285312, was tampered with
to fraudulently reflect that it was derived from the legitimate and authentic OCT No.
994 dated May 3, 1917. It is alleged that the original microfilm copy retained by the
LRA shows that Felisa Bonifacio's TCT No. 265777/T-1325 did not originate from the
legitimate and authentic OCT No. 994 dated May 3, 1917, but was instead derived from
OCT No. 994 dated April 19, 1912. Baello cited Manotok Realty, Inc. v. CLT Realty
Development Corporation,29 which allowed the presentation of evidence before a
Special Division of the Court of Appeals to ascertain which of the conflicting claims of
title should prevail, even though the case had already been decided; and the additional
evidence was presented in connection with a motion for reconsideration of this Court's
decision.

The Court notes that in Manotok Realty, Inc. v. CLT Realty Development
Corporation,30 the Court pronounced that there is only one OCT No. 994, which is
correctly registered on May 3, 1917, and that any title that traces its source to OCT No.
994 dated April 17, 1917 is void, for such mother title is inexistent.

The Court recognizes the importance of protecting the country's Torrens system from
fake land titles and deeds. Considering that there is an issue on the validity of the title
of petitioner VSD, which title is alleged to be traceable to OCT No. 994 registered on
April 19, 1917, which mother title was held to be inexistent in Manotok Realty, Inc.
v. CLT Realty Development Corporation,31 in the interest of justice, and to
safeguard the correct titling of properties, a remand is proper to determine which of the
parties derived valid title from the legitimate OCT No. 994 registered on May 3,
1917. Since this Court is not a trier of facts and not capacitated to appreciate evidence
of the first instance, the Court may remand this case to the Court of Appeals for further
proceedings, as it has been similarly tasked in Manotok Realty, Inc. v. CLT Realty
Development Corporation32 on these bases: cralavvonl inelawl ibra ry

Under Section 6 of Rule 46, which is applicable to original cases for certiorari, the Court
may, whenever necessary to resolve factual issues, delegate the reception of the
evidence on such issues to any of its members or to an appropriate court, agency or
office. The delegate need not be the body that rendered the assailed decision.

The Court of Appeals generally has the authority to review findings of fact. Its
conclusions as to findings of fact are generally accorded great respect by this Court. It
is a body that is fully capacitated and has a surfeit of experience in appreciating factual
matters, including documentary evidence.

In fact, the Court had actually resorted to referring a factual matter pending before it to
the Court of Appeals. In Republic v. Court of Appeals, this Court commissioned the
former Thirteenth Division of the Court of Appeals to hear and receive evidence on the
controversy, more particularly to determine the actual area reclaimed by the Republic
Real Estate Corporation, and the areas of the Cultural Center Complex which are open
spaces and/or areas reserved for certain purposes, determining in the process the
validity of such postulates and the respective measurements of the areas referred to.
The Court of Appeals therein received the evidence of the parties and rendered a
Commissioners Report shortly thereafter. Thus, resort to the Court of Appeals is not
a deviant procedure.
 The provisions of Rule 32 should also be considered as governing the grant of authority
to the Court of Appeals to receive evidence in the present case. Under Section 2, Rule
32 of the Rules of Court, a court may, motu proprio, direct a reference to a
commissioner when a question of fact, other than upon the pleadings, arises upon
motion or otherwise, in any stage of a case, or for carrying a judgment or order into
effect. The order of reference can be limited exclusively to receive and report evidence
only, and the commissioner may likewise rule upon the admissibility of evidence. The
commissioner is likewise mandated to submit a report in writing to the court upon the
matters submitted to him by the order of reference. In Republic, the commissioners
report formed the basis of the final adjudication by the Court on the matter. The same
result can obtain herein.33

Accordingly, the Court hereby remands this case to the Court of Appeals. The Court of
Appeals is tasked to hear and receive evidence, conclude the proceedings and submit to
this Court a report on its findings and recommended conclusions within three (3)
months from finality of this Resolution.

In determining which of the conflicting claims of title should prevail, the Court of
Appeals is directed to establish, based on the evidence already on record and other
evidence that will be presented in the proceedings before it, the following matter:
cralavvonline lawlib rary

(1) Whether the title of Felisa D. Bonifacio, TCT No. 265777IT-1325, and the title of
VSD, TCT No. T-285312, can be traced back to the legitimate and authentic OCT No.
994 dated May 3, 1917;
(2) Whether Eleuteria Rivera Bonifacio, who allegedly assigned the subject property to
Felisa D. Bonifacio, had the right and interest over the subject property, and whether
Eleuteria Rivera Bonifacio was entitled to assign her alleged rights and interests over
the subject property, known as Lot 23-A-4-B-2-A-3-A, Psd 706, covered by OCT No.
994, to Felisa D. Bonifacio;
(3) Whether the copy ofFelisa Bonifacio's TCT No. 265777/T-1325 was tampered with to
fraudulently reflect that it was derived from the legitimate and authentic OCT No.
994 dated May 3, 1917;
(4) Whether respondent Baello's TCT No. (35788) 12754 can be traced back to the
legitimate and authentic OCT No. 994 dated May 3, 1917;
(5) Whether the technical description of the title of Baello covers the subject property;
and
(6) Such other matters necessary and proper in determining which of the conflicting
claims of title should prevail.

WHEREFORE, this case is REMANDED to the Court of Appeals for further proceedings
in accordance with the two preceding paragraphs of this Resolution.

SO ORDERED.

Velasco, Jr., (Chairperson), Abad, Mendoza, and Leonen, JJ., concur.

 August 13, 2013

N O T I C E OF J U D G M E N T

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 179990 October 23, 2013

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
DIOSDADA I. GIELCZYK, Respondent.

DECISION

REYES, J.:

The present petition is one for review under Rule 45 of the 1997 Rules of Court.
The Republic of the Philippines petitioner) challenges the Decision1 dated
September 21, 2007 of the Court of Appeals CA) in CA-GR. CV No. 70078,
affirming the Decision2 of the Regional Trial Court RTC) of Mandaue City, Branch
56, which granted the application of Diosdada I. Gielczyk (respondent) for the
original registration of title of Lot Nos. 3135-A and 3136-A of Plans Csd-072219-
004552 and Csd-072219-004551, both situated in Jugan, Consolacion, Cebu.
The petitioner prays that the Court annuls the CA Decision dated September 21,
2007 in CA-GR. CV No. 70078, and that it should dismiss Land Registration
Commission (LRC) Case No. N-452 for utter lack of merit.3

Antecedent Facts

On July 17, 1995, the respondent sought the registration under her name of the
lands denominated as Lot No. 3135-A and Lot No. 3136-A of Plans Csd-072219-
004552 and Csd-072219-004551. Both lands were situated in Jugan,
Consolacion, Cebu.

In her verified application in LRC Case No. N-452, the respondent claimed that
she is the owner of the two parcels of land, which are situated, bounded and
specifically described in Plans Csd-072219-004552 and Csd-072219-004551,4 to
wit:
TECHNICAL DESCRIPTIONS

Lot 2007, Cad. 545-D, identical to lot

3135-A, Csd-072219-004552
(Luisa Ceniza)

A parcel of land (lot 20047, Cad.545-D, identical to lot 3135-A, Csd-072219-

004552), being a portion of lot 3135, Cad. 545-D (new), situated in the Barrio of
Jugan, Municipality of Consolacion, Province of Cebu, Island of Cebu. Bounded
on the NE., along line 1-2 by lot 20048 (identical to lot 3135-B, Csd-072219-
004552), on the SE., along line 2-3 by Camino Vicinal Road, on the SW., along
line 3-4 by lot 3126, on the NW., along line 4-1 by lot 3136, All [sic] of Cad. 545-D
(New). Beginning at a point marked "1" on plan being S. 83 deg. 17E., 1878.69
m. from BLLM No. 1, Consolacion, Cebu.

thence S. 61 deg. 20E., 40.69 m. to point 2;

thence S. 26 deg. 14W., 57.80 m. to point 3;

thence N. 61 deg. 26W., 38.40 m. to point 4;

thence N. 23 deg. 59E., 58.02 m. to point of the

beginning. Containing an area of TWO THOUSAND TWO HUNDRED EIGHTY

FIVE (2,285) SQUARE METERS, more or less. All points referred to are
indicated on the plan and are marked on the ground as follows; points 1 and 2 by
P.S. cyl. conc. mons. 15x40 cms. and the rest are old P.S. cyl. conc. mons 15x60
cms. Bearings Grid; date of original survey July 14, 1987-November 11, 1987,
and that of the subdivision survey executed by Geodetic Engineer Norvic S.
Abella on November 12, 1993 and approved on May 24, 1994.5

TECHNICAL DESCRIPTIONS

Lot 20045, Cad. 545-D, identical to

Lot 3136-A, Csd-072219-004551
(Constancio Ceniza)

A parcel of land (lot 20045, Cad.545-D, identical to lot 3136-A, Csd-072219-

004551), being a portion of lot 3136, Cad. 545-D (New), situated in the Barrio of
Jugan, Municipality of Consolacion, Province of Cebu, Island of Cebu. Bounded
on the SE., along line 1-2 by lot 3135, on the SW., along line 2-3-4 by lot 3126,
on the NW., along line 6-1 by lot 20046, All [sic] of Cad. 545-D (New), on the
NE., along line 6-1 by lot 20046 (identical to lot 3136-B, Csd-072219-004551).
Beginning at a point marked "1" on plan being S. 83 deg. 17E., 1878.69 m. from
B.L.L.M. No. 1, Consolacion, Cebu.

thence S. 23 deg. 59W., 58.02 m. to point 2;

thence N. 65 deg. 10W., 41.39 m. to point 3;

thence N. 35 deg. 15W., 2.55 m. to point 4;

thence N. 20 deg. 43E., 44.05 m. to point 5;

thence N. 20 deg. 44E., 12.48 m. to point 6:

thence S. 65 deg. 37E., 46.79 m. to point of the

beginning. Containing an area of TWO THOUSAND SIX HUNDRED TEN (2,610)

SQUARE METERS, more or less. All points referred to are indicated on the plan
and are marked on the ground as follows; points 1 and 6 by P.S. cyl. conc. mons.
15x40 cms. and the rest are old P.S. cyl. conc. mons 15x60 cms. Bearings Grid;
date of original survey July 14, 1987-November 11, 1987, and that of the
subdivision survey executed by Geodetic Engineer Norvic S. Abella on
November 19, 1993 and approved on May 26, 1994.6

The respondent further alleged the following: (a) that the said parcels of land
were last assessed for taxation at 2,400.00; (b) that to the best of her
knowledge and belief, there is no mortgage nor encumbrance of any kind
affecting said land, nor any person having interest therein, legal or equitable; (c)
that she had been in open, complete, continuous, and peaceful possession in the
concept of an owner over said parcels of land up to the present time for more
than 30 years, including the possession of her predecessors-in-interest; (d) that
she acquired title to said land by virtue of the deeds of absolute sale; and (e) that
said land is not occupied.7

The respondent, as far as known to her, also alleged that the full names and
complete addresses of the owners of all lands adjoining the subject land are the
following:

ADJOINING OWNERS OF LOT 3135-A:

North - Lot 3135-B owned by Mrs. Luisa Ceniza

Jugan, Consolacion, Cebu
 East - Municipal Road
c/o Municipal Mayor
Consolacion, Cebu

South - Lot 3126 owned by Mr. Rene Pepito

Jugan, Consolacion, Cebu

West - Lot 3136-A owned by the applicant.

ADJOINING OWNERS OF LOT 3136-A:

North - Lot 3136-B, owned by Mr. Constancio Ceniza

Jugan, Consolacion, Cebu

East - Lot 3135-A, owned by the applicant;

South - Lot 3126, owned by Mr. Rogelio M. Pepito

Jugan, Consolacion, Cebu

West - Lot 3138, owned by Mr. Miguel Hortiguela Jugan, Consolacion,

Cebu8

To prove her claim, the respondent submitted the following pieces of evidence:

(a) Approved plans of Lot Nos. 3135-A and 3136-A;9

(b) Approved technical descriptions of the same lots;10

(c) Certification from the Chief, Technical Services Section, Department of

Environment and Natural Resources (DENR), Region 7, Central Visayas
Lands Management Services in lieu of surveyors certificates;11

(d) Latest tax declarations of the lots;12

(e) Latest tax clearance of the same lots;13

(f) Deeds of Sale in favor of the respondent;14

(g) Certifications from the Community Environment and Natural Resources

Officer (CENRO), Cebu City, that the lots are alienable and
disposable;15 and

(h) Certification from the Chief, Records Section, DENR, Region 7, Cebu
City that the same lots are not subject to public land application.16
Furthermore, when the respondent testified in court, her testimony sought to
establish the following:

(i) That the respondent acquired Lot No. 3136-A (which is identical to Lot
20045, and is situated in Jugan, Consolacion, Cebu, with an area of 2,610
sq m), and Lot No. 3135-A (which is identical to Lot 20047, and is situated
in Jugan, Consolacion, Cebu, with an area of 2,285 sq m) through
purchase from Constancio Ceniza and Luisa Ceniza respectively;17

(ii) That the respondent was never delinquent in paying the taxes for the
said lots. In fact the following tax declarations were issued for Lot No.
3136-A: Tax Dec. No. 01258 for the year 1948; Tax Dec. No. 012459 for
the year 1965; Tax Dec. No. 20846 for the year 1980; Tax Dec. No. 29200
for the year 1981; Tax Dec. No. 04210 for the year 1985; and Tax Dec. No.
13275 for the year 1989; while the following tax declarations were issued
for Lot No. 3135-A: Tax Dec. No. 01670 for the year 1948; Tax Dec. No.
012931 for the year 1965; Tax Dec. No. 021294 for the year 1968; Tax
Dec. No. 25146 for the year 1973; Tax Dec. No. 01411 for the year 1974;
Tax Dec. No. 20849 for the year 1980; Tax Dec. No. 04208 for the year
1985; Tax Dec. No. 13274 for the year 1989;18

(iii) That the said parcels of land are alienable and disposable and are not
covered by subsisting public land application;19

(iv) That the respondent and her respective predecessors-in-interest had

been in possession of Lot No. 3135-A and Lot No. 3136-A for more than
40 years in the concept of an owner, exclusively, completely, continuously,
publicly, peacefully, notoriously and adversely, and no other person has
claimed ownership over the same land;20 and

(v) That the respondent is a Filipino Citizen and that despite her marriage
to an American national, she has retained her Filipino citizenship.21

The petitioner filed an opposition dated September 18, 1995 to the respondents
application for registration of title, alleging among others:

1) That neither the respondent nor her predecessors-in-interest have been

in open, continuous, exclusive, and notorious possession and occupation
of the land in question since June 12, 1945 or prior thereto;22

(2) That the muniments of title and/or the tax declarations and tax payment
receipts of the respondent attached to or alleged in the application do not
constitute competent and sufficient evidence of a bona fide acquisition of
 the land applied for or of their open, continuous, exclusive and notorious
possession and occupation thereof in the concept of an owner since June
12, 1945, or prior thereto; and that said muniments of title do not appear to
be genuine and the tax declarations and/or tax payment receipts indicate
the pretended possession of the respondent to be of recent vintage;23

(3) That the respondent can no longer avail of the claim of ownership in fee
simple on the basis of Spanish title or grant since she has failed to file an
appropriate application for registration within the period of six months from
February 16, 1976 as required by Presidential Decree (P.D.) No. 892.
From the records, the petitioner further alleged that the instant application
was filed on July 7, 1995;24

(4) That the parcel of land applied for is a portion of the public domain
belonging to the petitioner and that the said parcel is not subject to private
appropriation.25

On November 3, 1999, the RTC rendered its Decision26 in favor of the

respondent, the dispositive portion of which provides:

WHEREFORE, from all the foregoing undisputed facts supported by oral and
documentary evidence, the Court finds and so holds that the applicant has
registrable title over subject lots, and the same title is hereby confirmed.
Consequently, the Administrator, Land Registration Authority is hereby directed
to issue Decree of Registration and Original Certificate of Title to Lots 3135-A
and 3136-A [sic], both situated at Jugan, Consolacion, Cebu in the name of the
applicant DIOSDADA I. GIELCZYK, 44 years old, Filipino, married to Philip
James Gielczyk, American national, resident of No. 4 Noel St., UHV, Paranaque,
Metro Manila, as her exclusive paraphernal property.

Upon finality of this judgment, let a corresponding decree of registration and

original certificate of title be issued to subject lot in accordance with Sec. 39, PD
1529.

SO ORDERED.27

Not convinced of the RTCs decision, the petitioner filed an appeal dated August
5, 2002 before the CA, which was also denied on September 21, 2007,28 the
dispositive portion of which provides:

WHEREFORE, the appeal is hereby DENIED and the assailed Decision

AFFIRMED in its entirety.29
Thus, the petitioner filed the present Petition for Review under Rule 45 of the
1997 Rules of Court, raising the sole issue:

Issue

THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN UPHOLDING

THE RULING OF THE TRIAL COURT THAT RESPONDENT WAS ABLE TO
PROVE THAT SHE AND HER PREDECESSORS-IN-INTEREST HAVE BEEN
IN OPEN, COMPLETE, CONTINUOUS, NOTORIOUS, EXCLUSIVE AND
PEACEFUL POSSESSION OVER THE LANDS SUBJECT OF THE
APPLICATION FOR ORIGINAL REGISTRATION FOR A PERIOD OF OVER 40
YEARS THROUGH MERE TAX DECLARATIONS AND IN THE ABSENCE OF
PROOF WHEN THE SUBJECT LOTS WERE DECLARED ALIENABLE AND
DISPOSABLE LANDS OF THE PUBLIC DOMAIN.30

Our Ruling

It must be noted that the respondent did not file any comment on the petition
despite efforts to notify her and her counsel of record. Thus, in the
Resolution31 dated March 30, 2011, this Court resolved to dispense with the
respondents comment and shall decide the instant petition based on available
records.

After a thorough study of the records, the Court resolves to grant the petition.

The respondent failed to completely prove that there was an expressed State
declaration that the properties in question are no longer intended for public use,
public service, the development of the national wealth and have been converted
into patrimonial property, and to meet the period of possession and occupation
required by law.

Section 14 of P.D. No. 1529 or The Property Registration Decree enumerates the
persons who may apply for the registration of title to land, to wit:

Sec. 14. Who may apply. The following persons may file in the proper Court of
First Instance an application for registration of title to land, whether personally or
through their duly authorized representatives:

(1) Those who by themselves or through their predecessors-in- interest

have been in open, continuous, exclusive and notorious possession and
occupation of alienable and disposable lands of the public domain under a
bona fide claim of ownership since June 12, 1945, or earlier. (2) Those
 who have acquired ownership of private lands by prescription under the
provision of existing laws.

(3) Those who have acquired ownership of private lands or abandoned

river beds by right of accession or accretion under the existing laws.

(4) Those who have acquired ownership of land in any other manner
provided for by law.

In the assailed decision granting the respondents application for registration of

title, the CA explained that the RTCs decision was based on Section 14(2) of
P.D. No. 1529 and not on Section 14(1) of the same decree.32 The CA said:

However, a judicious scrutiny of the attendant facts would reveal that the
assailed decision of the RTC was based not on PD No. 1529, Section 14(1), but
under Section 14(2) of said issuance. The pertinent portion of the decision is
quoted as follows:

"From the documentary evidence presented and formally offered by the

applicant, the Court is convinced that she and her predecessors-in-interest has
(sic) been in open, complete, continuous, notorious, exclusive and peaceful
possession over the lands herein applied for registration of title, for a period of
over 40 years, in the concept of an owner and that applicant has registrable title
over same lots in accordance with Sec. 14, PD 1529."

A closer scrutiny will show that the questioned decision was based on PD No.
1529, Section 14(2).

In the case of Republic of the Philippines vs. Court of Appeals and Naguit, it was
ruled that:

Did the enactment of the Property Registration Decree and the amendatory P.D.
No. 1073 preclude the application for registration of alienable lands of the public
domain, possession over which commenced only after June 12, 1945? It did not,
considering Section 14(2) of the Property Registration Decree, which governs
and authorizes the application of "those who have acquired ownership of private
lands by prescription under the provisions of existing laws."

"Prescription is one of the modes of acquiring ownership under the Civil Code.
There is a consistent jurisprudential rule that properties classified as alienable
public land may be converted into private property by reason of open, continuous
and exclusive possession of at least thirty (30) years. With such conversion, such
property may now fall within the contemplation of "private lands" under Section
14(2), and thus susceptible to registration by those who have acquired ownership
through prescription. Thus, even if possession of the alienable public land
commenced on a date later than June 12, 1945, and such possession being
been [sic] open, continuous and exclusive, then the possessor may have the
right to register the land by virtue of Section 14(2) of the Property Registration
Decree."

In the instant case, applicant-appellee was able to present tax declarations

dating back from 1948. Although tax declarations and realty tax payment of
property are not conclusive evidence of ownership, nevertheless, they are good
indicia of the 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 the least
constructive, possession. They constitute 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, but it also announces his adverse claim against the State and all other
interested parties, including his intention to contribute to the needed revenues of
the Government. All told, such acts strengthen ones bona fide claim of
acquisition of ownership.33 (Citations omitted)

The Court agrees with the CAs finding that the RTCs grant of the respondents
application for registration of title was based on Section 14(2) of P.D. No. 1529
and not on Section 14(1) of the same decree. As the CA, citing Republic of the
Philippines v. Court of Appeals and Naguit,34 correctly explained, an applicant
may apply for registration of title through prescription under Section 14(2) of P.D.
No. 1529, stating that patrimonial properties of the State are susceptible of
prescription and that there is a rich jurisprudential precedents which rule that
properties classified as alienable public land may be converted into private
property by reason of open, continuous and exclusive possession of at least 30
years.35

In Heirs of Mario Malabanan v. Republic,36 the Court further clarified the

difference between Section 14(1) and Section 14(2) of P.D. No. 1529. The former
refers to registration of title on the basis of possession, while the latter entitles
the applicant to the registration of his property on the basis of prescription.
Registration under the first mode is extended under the aegis of the P.D. No.
1529 and the Public Land Act (PLA) while under the second mode is made
available both by P.D. No. 1529 and the Civil Code. Moreover, under Section
48(b) of the PLA, as amended by Republic Act No. 1472, the 30-year period is in
relation to possession without regard to the Civil Code, while under Section 14(2)
of P.D. No. 1529, the 30-year period involves extraordinary prescription under
the Civil Code, particularly Article 1113 in relation to Article 1137.37
Indeed, the foregoing jurisprudence clearly shows the basis of the respondents
application for registration of title. However, the petitioner argued that the
respondent failed to show proof of an expressed State declaration that the
properties in question are no longer intended for public use, public service, the
development of the national wealth or have been converted into patrimonial
property. It pointed out that the certification which the respondent submitted did
not indicate when the lands applied for were declared alienable and disposable. 38

On this point, the Court cannot completely agree with the petitioner. Indeed, the
respondent attempted to show proof as to when the subject lands were declared
alienable and disposable. While the RTC and the CA failed to cite the evidence
which the respondent submitted, the Court cannot, in the name of substantial
justice and equity, close its eyes to the September 23, 2004

Certification issued and signed by Fedencio P. Carreon (Carreon), OIC, CENRO,

which the respondent attached in her Appellees brief in the CA,39 as a
supplement to her earlier submissions, particularly Annex "G" and Annex "G-1" or
the June 28, 1995 Certifications issued by Eduardo M. Inting, CENRO.40

Carreons Certification is reproduced here:

Republic of the Philippines

Department of Environment and Natural Resources
COMMUNITY ENVIRONMENT AND
NATURAL RESOURCES OFFICE
Cebu City

23 September 2004

CENRO, Cebu City, Lands Verification

CONSTANCIO CENIZA ET AL (Consolacion, Cebu)

CERTIFICATION

TO WHOM IT MAY CONCERN:

This is to certify that per projection conducted by Forester Restituto A. Llegunas

a tract of land lots 3135 and 3136, Cad 545-D(New) containing an area of
FIFTEEN THOUSAND SIX HUNDRED EIGHTY SEVEN (15,687) square
meters[,] more or less, situated at Jugan, Consolacion, Cebu as shown and
described in the sketch plan at the back hereof as prepared by Geodetic
Engineer Aurelio Q. Caa for CONSTANCIO CENIZA ET AL was found to be
within Alienable and Disposable Block I of Land Classification Project No. 28 per
L. C. Map No. 2545 of Consolacion, Cebu certified under Forestry Administrative
Order No. 4-1063 dated September 1, 1965. (Emphasis Supplied)

This is to certify further that the subject area is outside Kotkot-Lusaran

Watershed Reservation per Presidential Proclamation No. 1074 dated Sept. 2,
1997.

This certification is issued upon the request of Mr. Constancio Ceniza for the
purpose of ascertaining the land classification status only and does not entitle
him preferential/priority rights of possession until determined by competent
authorities.

FEDENCIO P. CARREON
OIC, Community Environment
& Natural Resources Officer

However, following our ruling in Republic of the Philippines v. T.A.N. Properties,

Inc.,41 this CENRO Certification by itself is insufficient to establish that a public
land is alienable and disposable. While the certification refers to Forestry
Administrative Order No. 4-1063 dated September 1, 1965, the respondent
should have submitted a certified true copy thereof to substantiate the alienable
character of the land. In any case, the Court does not need to further discuss
whether the respondent was able to overcome the burden of proving that the
land no longer forms part of the public domain to support her application for
original land registration because of other deficiencies in her application.

Indeed, the respondent failed to meet the required period of possession and
occupation for purposes of prescription. From the time of the declaration on
September 1, 1965 that the properties in question are purportedly alienable and
disposable up to the filing of the application of the respondent on July 17, 1995,
the respondent and her predecessors-in-interest had possessed and occupied
the said properties for only 29 years and 10 months, short of two months to
complete the whole 30-year possession period.

Granting por arguendo that the respondent and her predecessors-in-interest had
possessed and occupied the subject lots since 1948, the Court cannot still tack
those years to complete the 30-year possession period since the said lots were
only declared alienable and disposable on September 1, 1965. In Naguit, we
ruled that for as long as the land was declared alienable and disposable, the
same is susceptible of prescription for purposes of registration of imperfect
title.42 In Lim v. Republic,43 we further clarified that "while a property classified as
alienable and disposable public land may be converted into private property by
reason of open, continuous, exclusive and notorious possession of at least 30
years, public dominion lands become patrimonial property not only with a
declaration that these are alienable or disposable but also with an express
government manifestation that the property is already patrimonial or no longer
retained for public use, public service or the development of national wealth. And
only when the property has become patrimonial can the prescriptive period for
the acquisition of property of the public dominion begin to run."44

While the subject lots were supposedly declared alienable or disposable on

September 1, 1965 based on the Certifications of the CENRO, the respondent
still failed to complete the 30-year period required to grant her application by
virtue of prescription.

The respondent failed to present specific acts of ownership to substantiate her

claim of open, continuous, exclusive, notorious and adverse possession in the
concept of an owner.

The petitioner contends that the respondent failed to present specific acts of
ownership to substantiate the latters claim of open, continuous, exclusive,
notorious and adverse possession in the concept of an owner. Here, the Court
agrees with the petitioners argument.

In Roman Catholic Bishop of Kalibo, Aklan v. Municipality of Buruanga,

Aklan,45 the Court ruled that for an applicant to ipso jure or by operation of law
acquire government grant or vested title to a lot, he must be in open, continuous,
exclusive and notorious possession and occupation of the lot.46 In the said case,
the Court clarified what it actually meant when it said "open, continuous,
exclusive and notorious possession and occupation," to wit:

The petitioner submits that even granting arguendo that the entire Lot 138 was
not assigned to it during the Spanish regime or it is not the owner thereof
pursuant to the Laws of the Indies, its open, continuous, exclusive and notorious
possession and occupation of Lot 138 since 1894 and for many decades
thereafter vests ipso jure or by operation of law upon the petitioner a government
grant, a vested title, to the subject property. It cites Subsection 6 of Section 54 of
Act No. 926 and Subsection b of Section 45 of Act No. 2874.

This contention is likewise not persuasive.

One of the important requisites for the application of the pertinent provisions of
Act No. 926 and Act No. 2874 is the "open, continuous, exclusive and notorious
possession and occupation" of the land by the applicant. 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. The phrase "possession
and occupation" was explained as follows:

It must be underscored that the law speaks of "possession and occupation."

Since these words are separated by the conjunction and, the clear intention of
the law is not to make one synonymous with the order [sic]. Possession is
broader than occupation because it includes constructive possession. When,
therefore, the law adds the word occupation, it seeks to delimit the all-
encompassing effect of constructive possession. Taken together with the words
open, continuous, exclusive and notorious, the word occupation serves to
highlight the fact that for one to qualify under paragraph (b) of the aforesaid
section, his possession of the land must not be mere fiction. As this Court stated,
through then Mr. Justice Jose P. Laurel, in Lasam v. The Director of Lands:

x x x Counsel for the applicant invokes the doctrine laid down by us in Ramos v.
Director of Lands . But it should be observed that the application of the doctrine
of constructive possession in that case is subject to certain qualifications, and
this court was careful to observe that among these qualifications is "one
particularly relating to the size of the tract in controversy with reference to the
portion actually in possession of the claimant." While, therefore, "possession in
the eyes of the law does not mean that a man has to have his feet on every
square meter of ground before it can be said that he is in possession,"
possession under paragraph 6 of Section 54 of Act No. 926, as amended by
paragraph (b) of Section 45 of Act No. 2874, is not gained by mere nominal
claim. The mere planting of a sign or symbol of possession cannot justify a
Magellan-like claim of dominion over an immense tract of territory. Possession as
a means of acquiring ownership, while it may be constructive, is not a mere
fiction. x x x.

xxxx

Possession is open when it is patent, visible, apparent, notorious and not

clandestine. It is continuous when uninterrupted, unbroken and not intermittent or
occasional; exclusive when the adverse possessor can show exclusive dominion
over the land and an appropriation of it to his own use and benefit; and notorious
when it is so conspicuous that it is generally known and talked of by the public or
the people in the neighborhood.

Use of land is adverse when it is open and notorious.

Indisputably, the petitioner has been in open, continuous, exclusive and

notorious possession and occupation of Lot 138-B since 1894 as evidenced by
the church structure built thereon. However, the record is bereft of any evidence
that would tend to show that such possession and occupation extended to Lots
138-A and 138-C beginning the same period. No single instance of the exercise
by the petitioner of proprietary acts or acts of dominion over these lots was
established. Its unsubstantiated claim that the construction of the municipal
building as well as the subsequent improvements thereon, e.g., the rural health
center, Buruanga community Medicare hospital [sic], basketball court, Rizal
monument and grandstand, was [sic] by its tolerance does not constitute proof of
possession and occupation on its (the petitioners) part. Absent the important
requisite of open, continuous, exclusive and notorious possession and
occupation thereon since 1894, no government grant or title to Lots 138-A and
138-C had vested upon the petitioner ipso jure or by operation of law.
Possession under paragraph 6 of section 54 of Act No. 926, as amended by
paragraph (b) of section 45 of Act No. 2874, is not gained by mere nominal
claim.47 (Citations omitted and emphasis supplied)

In sum, a simple claim of "open, continuous, exclusive and notorious possession

and occupation" does not suffice. An applicant for a grant or title over a lot must
be able to show that he has exercised acts of dominion over the property in
question. The applicants possession must not be simply a nominal claim where
he only plants a sign or symbol of possession. In other words, his possession of
the property must be patent, visible, apparent, notorious and not clandestine; it
should be uninterrupted, unbroken and not intermittent or occasional; it should
demonstrate exclusive dominion over the land and an appropriation of it to his
own use and benefit; and it should be conspicuous, which means generally
known and talked of by the public or the people in the neighborhood.48

The Court held in Cruz v. Court of Appeals, et al.,49 that therein petitioners were
able to show clear, competent and substantial evidence establishing that they
have exercised acts of dominion over the property in question. These acts of
dominion were the following:

(a) they constructed permanent buildings on the questioned lot;

(b) they collected rentals;

(c) they granted permission to those who sought their consent for the
construction of a drugstore and a bakery;

(d) they collected fruits from the fruit-bearing trees planted on the said
land;

(e) they were consulted regarding questions of boundaries between

adjoining properties; and
 (f) they religiously paid taxes on the property.50

However, in the present petition, the respondent failed to specifically show that
she and her predecessors-in-interest had exercised acts of dominion over the
subject lots. Admittedly, the respondents best evidence to prove possession and
ownership were tax declarations and receipts issued in her name or the names of
her predecessors-in-interest, but these tax declarations and receipts are not
conclusive evidence of ownership or right of possession over a piece of land.
"Well settled is the rule that tax declarations and receipts are not conclusive
evidence of ownership or of the right to possess land when not supported by any
other evidence.

The fact that the disputed property may have been declared for taxation
purposes in the names of the applicants for registration or of their predecessors-
in- interest does not necessarily prove ownership. They are merely indicia of a
claim of ownership."51

In the instant case, the respondent failed to show that she or her predecessors-
in-interest have exercised acts of dominion over the said parcels of land. In fact,
it was only the respondent who testified to substantiate her allegations in the
application. She did not present anyone else to support her claim of "open,
continuous, exclusive and notorious possession and occupation." Unfortunately,
her testimony simply made general declarations without further proof, to wit:

DIRECT EXAMINATION:

Q - Mrs. Gielczyk, are you the same Diosdada Gielzcyk, the applicant in this
case?

A - Yes.

Q - Are you familiar with Lots No. 3135 and 20045, both of Consolacion, Cebu?

A - Yes.

Court:

Excuse me, You can answer in English? You dont need an interpreter?

A - Yes, Your Honor.

Atty. Germino:

Who is the owner of these lots?

A - I am the one.

Q - How large is 20047?

A - It has an area of 2,286 square meters.

Q - How much is the assessed value of Lot 20047?

A - I do not think, 430.00 per square meters is the assessed value reflected in
the document. Court:

Is that reflected in the tax declaration?

Atty. Germino:

Yes, Your Honor.

Court:

Then the tax declaration would be the best evidence.

Atty. Germino:

Q - Do you know if there are other persons who are interested whatsoever over
the lots you have mentioned?

A - No sir.

Atty. Germino:

Q - Are there liens and encumbrances affecting the lots?

A - No, sir.

Q - Who is in possession of these lots?

A - I am in possession.

Court:

Physically? I thought you are residing in Manila?

A - Because my family is living there in Consolacion and I always come home

every month. I have my parents and brothers there.
Court:

The same property?

A - Near my parents house,Your Honor.

Court:

Proceed.

Atty. Germino:

Q - How long have you been in possession of the lots?

A - Including my predecessors-in-interest, for over a period of 40 years.

Q - What is the nature of your possession?

A - Adverse against the whole world, continous [sic], peaceful, open and
uninterrupted.

Q - How did you acquire Lot 20047?

A - I purchased it from Luisa Ceniza.

Q - Do you know how did Luisa Ceniza acquire the same?

A - She inherited it from her father Remigio Ceniza.

Q - Do you have a deed of sale in your favor?

A - Yes, I have.52

xxxx

Atty. Germino:

Q - You said that includ[i]ng your predecessors-in-interest, your possession

including your predecessors-in-interest has been for over forty (40) years. Do you
have the tax declaration of Lot 20047 since 1948 until the present?

A - Yes.
Q - Showing to you tax declaration No. 01670 in the name of the heirs of Remigio
Ceniza covering land in Consolacion for the year 1948, please examine and tell
the court whether that is the tax declaration of Lot 20047 for the year 1948?

A - Yes, this is the one.

xxxx

Atty. Germino:

Q - Showing to you tax declaration No. 012931 in the name of heirs of Remigio
Ceniza for the year 1965, please examine the same and tell the Honorable court
what relation has that to the tax declaration of lot 20047 for the year 1965?

A - This is the same.

xxxx

Atty. Germino:

Q - Showing to you tax declaration No. 021294 in the name of Luisa and
Constancio Ceniza for the year 1968, please examine and tell the court whether
that is the tax declaration of Lot 20047 for the year 1968?

A - Yes, this is the same.

xxxx

Atty. Germino:

Q - Showing to you tax declaration No. [no number was indicated in the TSN] in
the name of Luisa Ceniza for the year 1963 tell the court whether that is the tax
declaration for the year 1973? A - Yes, this is the one.53

In the continuance of her testimony, the respondent added no further information

for this Court to conclude that she indeed exercised specific acts of dominion
aside from paying taxes. She testified thus:

xxxx

Atty. Germino:

Q - Mrs. Gielczyk, one of the last lot subject to [sic] your petition is Lot 20045,
how large is this lot?
A - 2,610 square meters.

Q - How much is the assess value of this lot?

A - 970.00

Q - Who is in possession of this lot?

A - I am the one.

Q - How long have you been in possession?

A - Including my predecessors-in-interest is [sic] over a period of 40 years.

COURT: (to witness)

Q - Personally, how long have you been in possession of this property?

A - If I remember right, 1985.

ATTY. GERMINO:

Q - How did you acquire lot 20045?

A - I purchased it from Constancio Ceniza.

Q - Do you have a deed of sale in your favor?

A - Yes.

COURT:

We are talking about 3136-A?

ATTY. GERMINO:

Yes, we are through with Lot 3135?

COURT:

This is 3136-A equivalent to Lot 20045. Proceed.

ATTY. GERMINO:
I am showing to you a deed of absolute sale by Constancio Ceniza over lot 3136-
A acknowledged before Notary Public Marino Martillano, as Doc. No. 2637 book
4, series of 1988, please examine this document and tell the Court if that is the
deed of sale?

A - Yes.

xxxx

Q - Are you not delinquent in the payment of taxes for lot 3136-A?

A - No, sir.

Q - Do you have a tax clearances [sic]?

A - Yes, I have.

Q - I am showing to you tax clearance issued by the municipal treasurer of

Consolacion, Cebu, is that the tax clearance you referred to?

A - Yes, sir.

ATTY. GERMINO:

We ask your Honor the tax clearance be marked as double "C".

COURT: Mark it.

xxxx

COURT: (to witness)

Q - You said that including your predecessor-in-interest, your possession of the

land applied for is more than 40 years, do you have a Tax Declaration of lot
3136-A from 1948 until the present? A - Yes.

Q - I am showing to you a bunch of Tax Declaration, 6 in all, from the (sic) year
1948, 1965, 1980, 1981, 1985 and 1989, please examine this Tax Declaration
and tell us whether these are the Tax Declarations of Lot 3136-A from 1948 until
the present in your name?

A - These are the ones.

ATTY. GERMINO:
We ask that the Tax Declaration in bunch be marked as Exhibit double "F" and
the succeeding Tax Declaration to be marked as double "FF-1" up to double "F-
5".

COURT:

Mark it.54

The respondents cross-examination further revealed that she and her

predecessors-in-interest have not exercised specific acts of dominion over the
properties, to wit:

COURT:

Cross-examination?

FISCAL ALBURO:

May it please the Honorable Court.

COURT:

Proceed.

FISCAL ALBURO:

Q - Mrs. Gielczyk, how many lots are involved in this petition?

A - 2 portions.

Q - How did you acquire this lot [sic]?

A - I purchased it [sic] from Constancio Ceniza.

Q - When was that?

A - If I remember right in 1985 or 1986.

Q- In other words, you srarted [sic] possessing the property since 1985, until the
present?

A- Yes.
Q- But you are not in actual occupant [sic] of the property because you are
residing in Paranaque?

A- But I have a cousin in Consolacion.

Q- But you are not residing in Consolacion?

A- I used to go back and forth Cebu and Manila.

Q- Who is in charge of your property in Consolacion?

A- My brothers.

Q - In other words, your property is being taken cared of by your brothers?

A - Yes.

FISCAL ALBURO:

That is all, your Honor.

ATTY. GERMINO:

No redirect, your Honor.

COURT: (to witness) By the way, where do you stay often?

A - Usually in Manila.

Q - Who takes care of the property in Mandaue City?

A - My brothers because there are coconut trees and some fruits and he watched
it [sic].

Q - Who is using the coconut trees and the fruits? A - Just for consumption, there
are few coconuts.55 (Emphasis supplied)

From the foregoing testimony of the lone witness (the applicant-respondent

herself), the Court can deduce that, besides intermittently paying the tax dues on
Lot No. 3135-A, the respondent did not exercise acts of dominion over it. Neither
can the Court give credence to the respondents claim that her predecessors-in-
interest had exercised dominion over the property since the respondent failed to
present any witness who would substantiate her allegation. The pieces of
documentary evidence, specifically the tax declarations and the deeds of
absolute sale, can neither be relied upon because the same revealed no
indication of any improvement that would have the Court conclude that the
respondent exercised specific acts of dominion. For instance, the deed of
absolute sale simply said that the improvements on Lot No. 3135-A consisted of
two (2) coconut trees, one (1) mango tree, one (1) caimito tree and one (1)
jackfruit tree.56 The tax declarations have not shown any indication supporting the
respondents claim that she exercised specific acts of dominion.57

As to Lot No. 3136-A, the deed of absolute sale showed that there were 14
coconut trees, eight (8) jackfruit trees, and a residential building, which was
actually possessed by the vendor Constancio Ceniza. Moreover, it was only in
Tax Declaration Nos. 29200, 04210 and 13275 where it was declared that a
residential building has been built in Lot No. 3136-A.58 And based on the records,
Tax Declaration No. 29200, where the residential building was first indicated, is
dated 1981. It may be said then that it was only in 1981 when the respondents
predecessors-in-interest exercised specific acts of dominion over Lot No. 3136-A,
the period of which consists barely of 14 years. Thus, the respondent has not
completed the required 30 years of "open, continuous, exclusive and notorious
possession and occupation."

Clearly, from the pieces of documentary and testimonial evidence, and

considering that the respondent did not present any other witness to support her
claim, the Court has no other recourse but to declare that she has not presented
the premium of evidence needed to award her title over the two parcels of land.

Finally, the Court cannot end this decision without reiterating the final words of
former Associate Justice Dante O. Tinga in the case of Malabanan59. Justice
Tinga correctly pointed out the need to review our present law on the distribution
of lands to those who have held them for a number of years but have failed to
satisfy the requisites in acquiring title to such land. Justice Tinga eloquently put
the matter before us, thus:

A final word. The Court is comfortable with the correctness of the legal doctrines
established in this decision. Nonetheless, discomfiture over the implications of
1w phi1

todays ruling cannot be discounted. For, every untitled property that is occupied
in the country will be affected by this ruling. The social implications cannot be
dismissed lightly, and the Court would be abdicating its social responsibility to the
Filipino people if we simply levied the law without comment.

The informal settlement of public lands, whether declared alienable or not, is a

phenomenon tied to long-standing habit and cultural acquiescence, and is
common among the so-called "Third World" countries. This paradigm powerfully
evokes the disconnect between a legal system and the reality on the ground. The
law so far has been unable to bridge that gap. Alternative means of acquisition of
these public domain lands, such as through homestead or free patent, have
proven unattractive due to limitations imposed on the grantee in the
encumbrance or alienation of said properties. Judicial confirmation of imperfect
title has emerged as the most viable, if not the most attractive means to
regularize the informal settlement of alienable or disposable lands of the public
domain, yet even that system, as revealed in this decision, has considerable
limits.

There are millions upon millions of Filipinos who have individually or exclusively
held residential lands on which they have lived and raised their families. Many
more have tilled and made productive idle lands of the State with their hands.
They have been regarded for generation by their families and their communities
as common law owners. There is much to be said about the virtues of according
them legitimate states. Yet such virtues are not for the Court to translate into
positive law, as the law itself considered such lands as property of the public
dominion.

It could only be up to Congress to set forth a new phase of land reform to

sensibly regularize and formalize the settlement of such lands which in legal
theory are lands of the public domain before the problem becomes insoluble.
This could be accomplished, to cite two examples, by liberalizing the standards
for judicial confirmation of imperfect title, or amending the Civil Code itself to
ease the requisites for the conversion of public dominion property into
patrimonial.

Ones sense of security over land rights infuses into every aspect of well-being
not only of that individual, but also to the person s family. Once that sense of
security is deprived, life and livelihood are put on stasis. It is for the political
branches to bring welcome closure to the long pestering problem.60 (Citation
omitted and emphasis supplied)

Indeed, the Court can only do as much to bring relief to those who, like herein
respondent, wish to acquire title to a land that they have bought. It is for our
lawmakers to write the law amending the present ones and addressing the reality
on the ground, and which this Court will interpret and apply as justice requires.

WHEREFORE in consideration of the foregoing disquisitions, the petition is

GRANTED and the Decision dated September 21, 2007 of the Court of Appeals
in CA-G.R. CV No. 70078 is ANNULLED and SET ASIDE.

SO ORDERED.
BIENVENIDO L. REYES
Associate Justice

WE CONCUR: