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TOPIC: REGISTERED LAND NOT SUBJECT TO PRESCRIPTION

Cabrera vs Court of Appeals


Facts:

The petitioner assailed the decision of CA in reversing the decision of CFI and ordered
defendant Vda. de Cabrera to vacate the portion of a lot in question and surrender the
possession thereof to Orais.
The lot in question was originally owned by Daniel Teokemian, Albertana Teokemian and
Felicidad Teokemian then later sold to Orais without signature of Felicidad. Another deed of
sale was executed by Felicidad for the same lot in favor of the petitioner Vda. De Cabrera.
Thereafter Vda. De Cabrera and he husband immediately took possession on the said lot.
Before the RTC of Davao Oriental, an action for Quieting of Title to Real Property was raised
by defendant Vda. de Cabrera against Orais. RTC ruled in favor of the defendant Vda. de
Cabrera to execute a re-conveyance within thirty (30) days after this decision on the portion
of a lot in question actually and physically possessed and occupied by the defendant plus
damages.
Orais filed an appeal to CA. CA reversed the decision of CFI based on the fact that even as
the appellate court observed that the registration made by the plaintiffs was fraudulent
insofar as it involved the one-third interest of Felicidad Teokemian, which was not included
in the sale executed by them and Albertana and Daniel Teokemian, it nevertheless upheld
its effects, on the justification that the defendants action for re-conveyance based on an
implied trust had already been barred by prescription.
Hence, Vda. De Cabrera are now before the Court as Petitioners for Review on Certiorari.

Issue:

Whether or not CA erred in ruling that the private respondents complaint filed for quieting
of title which actually is one for recovery of ownership and possession and is not barred by
laches

Held:
Yes. An action for re-conveyance of a parcel of land based on implied or constructive trust
prescribes in 10 years, the point of reference being the date of registration of the deed or
the date of the issuance of the certificate of title over the property. But this rule applies only
when the plaintiff or the person enforcing the trust is not in possession of the property, since
if a person claiming to be the owner thereof is an actual possession of the property, as the
defendants are in the instant case, the right to seek re-conveyance, which, in effect, seeks
to quiet title to the property, does not prescribe. Also, even if a co-owner sells the whole
property as his, the sale will affect only his own share but not those of the other co-owners
who did not consent to the sale. This is because the sale or other disposition affects only his
undivided share and the transferee gets only what would correspond to his grantor in the
partition of the things owned in common. No prescription shall lie in favor of a co-owner or
co-heir so long as he expressly or impliedly recognizes the co-ownership.
Thus, The decision of CA is set aside and the decision of CFI is reinstated.

Tiongco vs Tiongco
Facts:

Matilde and Jose were co-owners of 3 parcels of land. When Matilde inquired at the Office
of the Registry of Deeds, she discovered that Jose had already executed an Affidavit of
Adjudication, declaring that he was the only surviving heir of the registered owners and
adjudicating unto himself the 3 lots. Consequently, the OCTs of the lots were cancelled and
new TCTs were issued in the name of Jose.

Based on the records with the Register of Deeds, it appeared that Jose sold the 1st and 2nd
lots to Catalino on the same day the TCTs were issued. It also appeared that the 3rd lot
was likewise disposed of by Jose to Antonio 2 days after the TCT was issued. On the same
date, Catalino also sold the 1st and 2nd lots to Antonio. Antonio sold the 3 lots back to Jose.

Matilde filed an action for reconveyance against Jose. The RTC ruled in favor of Jose ruling
that prescription had set in since the complaint was filed only on October 2, 1990 or some
sixteen (16) years after Jose caused to be registered the affidavit of adjudication on May 10,
1974.

Issue:

Whether or not the action for reconveyance was barred by prescription.

Held:

No, the action for reconveyance was not barred by prescription.

As a general rule, an action for reconveyance based on implied or constructive trust


prescribes in ten (10) years from the issuance of the Torrens title over the property. An
exception is when the plaintiff is in possession of the land to be reconveyed.

Prescription does not run against the plaintiff in actual possession of the disputed land
because such plaintiff has a right to wait until his possession is disturbed or his title is
questioned before initiating an action to vindicate his right. His undisturbed possession gives
him the continuing right to seek the aid of a court of equity to determine the nature of the
adverse claim of a third party and its effect on his title. The action for reconveyance
becomes in effect an action to quiet title to property, which is not subject to prescription.

In this case, Matilde never lost possession of the lots, and as such, she was in a position to
file the complaint with the court to protect her rights and clear whatever doubts has been
cast on her title by the issuance of TCTs in Jose’s name.
SIDE NOTE ON “INNOCENT PURCHASER FOR VALUE”:

The Court further observed that the circuitous sale transactions of the lots from Jose to
Catalino, then to Antonio, and back again to Jose were quite unusual. The successive
transfers of title from one hand to another could not cleanse the illegality of Jose’s act of
adjudicating to himself all of the lots so as to entitle him to the protection of the law as a
buyer in good faith. Jose himself admitted that there exists other heirs of the registered
owners in the OCTs. The allegations contained in the Affidavit of Adjudication executed by
Jose were false because he was not the only surviving heir.

An innocent purchaser for value as 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 is one who 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 can not close his eyes to facts which should put a reasonable man on
his guard and still claim that he acted in good faith.

And while it is settled that every person dealing with a property registered under the Torrens
title need not inquire further but only has to rely on the title, this rule has an exception. The
exception is when the party has actual knowledge of facts and circumstances that would
impel a reasonably cautious man to make such inquiry or when the purchaser has some
knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a
reasonably prudent man to inquire into the status of the title of the property in litigation. The
presence of anything which excites or arouses suspicion should then prompt the vendee to
look beyond the certificate and investigate the title of the vendor appearing on the face of
said certificate. One who falls within the exception can neither be denominated an innocent
purchaser for value nor a purchaser in good faith and hence does not merit the protection
of the law.

In this case, when the lands were sold to Catalino and subsequently to Antonio, Jose was
not in possession of the said properties. Such fact should have put the vendees on guard
and should have inquired on the interest of the Jose regarding the subject properties. But
regardless of such defect on transfer to third persons, the properties again reverted to
respondent Jose. Respondent Jose could not claim lack of knowledge of the defects
surrounding the cancellation of the OCTs over the properties and benefit from his
fraudulent actions. The subsequent sale of the properties to Catalino and Antonio would
not cure the nullity of the certificates of title obtained by Jose on the basis of the false and
fraudulent Affidavit of Adjudication.
TOPIC: CERTIFICATE OF TITLE NOT SUBJECT TO COLLATERAL ATTACK

Tapuroc and heirs of Ebe v de Mende


Facts

The petitoners are the heirs of a Anotnia Ebe who passed away sometime in the year 1960.
When the petitioners decided to partition the land left by Antonia Ebe, they were surprised
to find out that it had already been titled under the name of respondents. Respondents allege
that Ebe had sold it to them sometime in 1967. Meanwhile, petitioners point out that the
deed of sale in favor of respondent was obviously a forgery since Antonia Ebe died in 1960,
while the deed of sale was dated 1967. Petitioners filed before the lower court a suit to annul
the deed of sale in favor of respondents.
Both the lower court and Court of Appeal ruled in favor of respondent mainly because the
petitioners were not able to substantiate their claim that the deed of sale was indeed forged.

Issues

(1) Whether or not the deed of sale was a forgery.


(2) Whether or not the annulment of deed of sale was a collateral attack on the validity of
the land title in favor or respondents.

Held :

On the first issue : The SC held that the petitioners were not able to substantiate their claim
of forgery. In the first place, the deed of sale was notarized therefore, it enjoyed the
presumption of regularity. This presumption cannot be defeated by a naked allegation. In
this case, what the petitioners only presented were their naked assertions of forgery, they
did not even bother to present their own forensic handwriting expert to support their stand.
Lastly, it is the party who asserts forgery who has the burden of presenting an expert in
court, the court itself does not have the responsibility to provide such expert witnesses.
On the second issue : Yes, it was a collateral attack. Atty. Gimarino says that was is
controlling are the allegations on the complaint and not its title. This means that even the
title “Annulment of Deed of Sale” is immaterial for what must be given consideration are
the allegations of the complaint. So since the allegations of the petitioner’s complaint was
couched in terms signifying that their end goal was not to invalidate the land title in
respondent’s favor, their complaint was a collateral attack. As a rule, Torrens titles cannot
be attacked collaterally.

Oño vs Lim
Facts

Lim filed for a petition for the reconstitution of the owner’s duplicate copy of OCT of the lot
of the Balamban Cadastre in Cebu City because it was allegedly lost in WWII. The Spouses
Oño claimed that Luisa, Lim’s mother, sold the said lot to them. The deed of sale may be lost, but
the spouses executed a notarized document denominated as a confirmation of sale.
The Oños opposed Lim’s petition contending that they have the certificate of title. In response, Lim
converted the petition to that of quieting of title, alleging that he has been in actual possession. He
prayed that the title would be surrendered to the name of Luisa.
The RTC ruled in favor of Lim because he was in peaceful possession until it was disturbed by the
Oños. The CA affirmed the ruling of the RTC because it was found out that the Oños sold the lot
again to Luisa.

Issue

Whether or not an action for cancellation is a collateral attack on the title

Held
No. An action or proceeding is deemed an attack on a title when its objective is to nullify the
title. On the other hand, the attack is indirect or collateral when, in an action to obtain a
different relief, an attack on the judgment is nevertheless made as an incident thereof.
Quieting of title is a legal remedy of removing a cloud in a title. In such action, the court is
tasked to determine the respective rights of the claimants. It is beneficial to both because
the action clears the doubts of the title, and the real owner may now introduce improvements
to the title.
In this case, Lim was only asserting only that the existing title registered in the name of the
petitioners' predecessors had become inoperative due to the conveyance in favor of Lim's
mother. It should be cancelled. Lim did not assail the validity of the title. Lim only wanted to
remove the cloud to confirm his ownership over the property.

Corpuz vs Agustin
Facts
Corpuz filed a complaint for ejectment against the Spouses Agustin. It was alleged that the
former was the owner of two parcels of land in Santa Joaquina, Laoag City. The parcels of
land were formerly owned by Elia Duldalo, and sold to Corpuz’s father. The elder Corpuz
allowed the spouses to occupy the land, as the latter are relatives. Then, there was a
demand to vacate, but the spouses did not heed to it.
The spouses argued that the father sold the lot to them. The MTCC ruled in favor of the
spouses due to the length of time of the occupation. The RTC affirmed the decision because
there was a double sale involved. The CA ruled that Corpuz had knowledge of the sale. It
said that the possession was not mere tolerance, but an exercise of ownership. It was also
alleged by the CA that Corpuz failed to file an action when they had knowledge of the sale.
Issue

(1)Whether or not the ejectment case at hand is an attack on the title.

Held
Yes. As a general rule, an ejectment case rules on the issue of possession, and not on
ownership. However, an exemption to the rule is that the issue of ownership must be ruled
upon in order to determine the legality of the possession. The lower courts consistently found
that possession of the disputed properties by respondents was in the nature of ownership,
and not by mere tolerance of the elder Corpuz. It is because the spouses have been in an
open, continuous, and notorious possession of the property for 30 years. In such a case, an
attack to the title is present.
Topic: PRIMARY ENTRY BOOK
Development Bank of the Philippines vs Register of Deeds of Nueva Ecija
UDK No. 7671. June 23, 1988

Facts:
The Development Bank of the Philippines (hereafter, DBP) presented for registration a
sheriff's certificate of sale in its favor of two parcels of land covered by Transfer
Certificates of Title Nos. NT-149033 and NT-149034, both in the names of the spouses
Andres Bautista and Marcelina Calison. The transaction was entered as Entry No. 8191 in
the Registry's Primary Entry Book and DBP paid the requisite registration fees on the
same day. Annotation of the sale on the covering certificates of title could not, however be
effected because the originals of those certificates were found to be missing from the files
of the Registry, where they were supposed to be kept, and could not be located.
On the advice of the Register of Deeds, DBP instituted proceedings in the Court of
First Instance of Nueva Ecija to reconstitute said certificates, and reconstitution was ordered
by that court in a decision rendered on June 15, 1982. For reasons not apparent on the
record, the certificates of title were reconstituted only on June 19, 1984.
Issues:
(a) whether the certificate of sale could be registered using the old Entry No. 8191 made in 1980
notwithstanding the fact that the original copies of the reconstituted certificates of title were
issued only on June 19, 1984; and
(b) (b) if the first query was answered affirmatively, whether the register of deeds could sign the
proposed annotation, having assumed his duties only in July 1982.

Held:
(a) entry alone produces the effect of registration, whether the transaction entered is a voluntary
or an involuntary one, so long as the registrant has complied with all that is required of him
for purposes of entry and annotation, and nothing more remains to be done but a duty
incumbent solely on the register of deeds.
(b) The qualms implicit in the query of the respondent (and present appellee) register of deeds
about making annotation of an entry effected before he assumed that office are more
imagined than real. He would only be making a memorandum of an instrument and of its
entry based on or reciting details which are already of indubitable record and, pursuant to the
express command of the law, giving said memorandum the same date as the entry. No part
of that function is exclusive to the incumbent of the office at the time entry was made or is
forbidden to any of his successors.
Topic: PRIMARY ENTRY BOOK
National Housing Authority vs Augusto Basa
G.R. No. 149121. April 20, 2010
Facts:
Spouses Augusto and Luz Basa loaned from NHA the amount of P556,827.10
secured by a real estate mortgage over their properties. The Spouses Basa did not pay the
loan despite repeated demands. To collect its credit, the NHA filed a verified petition for
extrajudicial foreclosure of mortgage.
After notice and publication, the properties were sold at public auction where NHA
emerged as the highest bidder. On April 16, 1991, the sheriff's certificate of sale was
registered and annotated only on the owner's duplicate copies of the titles in the hands of
the respondents, since the titles in the custody of the Register of Deeds were among those
burned down when a fire gutted the City Hall of Quezon City on June 11, 1988. On April 16,
1992, the redemption period expired, without respondents having redeemed the properties.
Shortly thereafter, on April 24, 1992, NHA executed an Affidavit of Consolidation of
Ownership over the foreclosed properties, and the same was inscribed by the Register of
Deeds on the certificates of title in the hand of NHA. Consequently, NHA applied for a writ
of possession which remained unserved.
Citing Bernardez v. Reyes and Bass v. De la Rama, respondents theorized that the
instrument is deemed registered only upon actual inscription on the certificate of title in the
custody of the civil registrar. Since the sheriff's certificate was only inscribed on the owner's
duplicate certificate of title, and not on the certificate of title in the possession of the Register
of Deeds, then there was no effective registration and the one-year redemption period had
not even begun to run. Thus, respondents asked the RTC, among others, to declare the
foreclosure sale null and void, to allow the respondents to redeem the mortgaged properties
in the amount of P21,160.00, and to cancel the Writ of Possession dated March 9, 1993.
On the other hand, NHA stresses that the annotation and entry in the owner's
duplicate certificate of titles of the sheriff's certificate of sale are sufficient compliance with
the requirement of law on registration. To support this, NHA refers to Land Registration
Administration Circular No. 3 dated December 6, 1988, entitled "Entry and Provisional
Registration of Instruments Pending Reconstitution of Title" which allegedly authorized all
Registers of Deeds to accept for entry and provisional registration instruments affecting lost
or destroyed certificates of title pending reconstitution of the original. The legality and validity
of the disputed registration on its duplicate copies of the sheriff's certificate of sale, NHA
insists, are backed by this Court's ruling in Development Bank of the Philippines v. Acting
Register of Deeds of Nueva Ecija, where purportedly, this Court made a favorable
interpretation of Section 56 of Presidential Decree No. 1529. NHA says that the inscription
of the sheriff's certificate of sale only to the owner's duplicate copies, but not to those in the
custody of the register of deeds is justified as the latter were burned down. Thus, it could
not be blamed for the non-registration of the sale in the original copies.
Issue:
(a) whether the annotation of the sheriff's certificate of sale on the owner's duplicate certificate
of titles is sufficient registration considering that the inscription on the original certificates
could not be made as the same got burned.

Held:
Petition Granted.
(a) the prevailing rule is that there is effective registration once the registrant has fulfilled all that
is needed of him for purposes of entry and annotation, so that what is left to be accomplished
lies solely on the register of deeds.

NHA presented the sheriff's certificate of sale to the Register of Deeds and the
same was entered as Entry No. 2873 and said entry was further annotated in
the owner's transfer certificate of title. A year later and after the mortgagors
did not redeem the said properties, respondents filed with the Register of
Deeds an Affidavit of Consolidation of Ownership after which the same
instrument was presumably entered into in the day book as the same was
annotated in the owner's duplicate copy. Just like in DBP, Levin, Potenciano
and Autocorp, NHA followed the procedure in order to have its sheriff's
certificate of sale annotated in the transfer certificates of title. There would be,
therefore, no reason not to apply the ruling in said cases to this one. It was not
NHA's fault that the certificate of sale was not annotated on the transfer
certificates of title which were supposed to be in the custody of the Registrar,
since the same were burned. Neither could NHA be blamed for the fact that
there were no reconstituted titles available during the time of inscription as it
had taken the necessary steps in having the same reconstituted as early as
July 15, 1988. 56 NHA did everything within its power to assert its right.
Since entry of the certificate of sale was validly registered, the redemption
period accruing to respondents commenced therefrom, since the one-year
period of redemption is reckoned from the date of registration of the certificate
of sale.
Topic: PRIMARY ENTRY BOOK
Durawood vCandice Bona
G.R. No. 179884. January 25, 2012
Facts:

On June 3, 2004, petitioner Durawood Construction and Lumber Supply, Inc. filed an action for sum
of money plus damages with a prayer for the issuance of a writ of preliminary attachment against
LBB Construction and Development Corporation and its president Leticia Barber before the RTC of
Antipolo for the sum of P665,385.50 as payment for construction materials delivered to LBB
Construction. RTC then issued an Order granting Durawood’s prayer for the issuance of a writ of
attachment. On June 16, 2004, the corresponding writ was issued.

On June 17, 2004, Sheriff Rolando C. Leyva levied on a 344-square meter parcel of land in Richdale
Subdivision, Antipolo City covered by a TCT No. R-17571 in the name of LBB Construction. A Notice
of Levy on Attachment was annotated in said TCT.

On July 13, 2004, Candice S. Bona filed a Motion seeking leave to intervene. Attached to said Motion
was Candice’s Answer in Intervention, her Third Party Claim addressed to Sheriff Leyva, and a copy
of the TCT. Candice claimed therein that she is a co-owner of the property and that LBB Construction
had sold the property to her and her siblings through a Deed of Absolute Sale dated June 2, 2004.
Candice asserted that the sale is the subject of Entry No. 30549 dated June 16, 2004 in the books
of the Registry of Deeds of Antipolo City, while the levy on attachment is only Entry No.
30590 dated June 17, 2004. What was attached to the Motion was a copy of TCT No. R-17571, and
not a title in Candice and her co-owners’ names.

On August 11, 2004, the RTC issued an Order granting Candice’s Motion to Intervene. LBB
Construction and Barber filed their Answer but then failed to attend the scheduled hearings, including
the pre-trial. Consequently, Durawood was allowed to present its evidence ex parte.

On July 21, 2005, the RTC rendered its Decision in in favor of Durawood. Thereafter, became final
and executory. On September 12, 2005, Durawood filed a Motion for the Issuance of a Writ of
Execution. On November 15, 2005, the RTC issued a Writ of Execution. It was when this Writ was
about to be enforced that Durawood discovered that on June 16, 2004, the supposed Register of
Deeds of Antipolo City, Atty. Randy A. Rutaquio, cancelled TCT No. R-17571 and issued TCT No.
R-22522 in the name of Candice and her co-owners.

Thereafter, Durawood filed a Motion to Reinstate Notice of Levy on Attachment in TCT No. R-22522
and Cite Atty. Randy A. Rutaquio for Contempt.

Atty. Rutaquio filed a Manifestation alleging that the sale was entered in the Primary Entry Book prior
to the Levy on Attachment. The two transactions were assigned to different examiners and it just so
happened that the examiner to whom the levy on attachment was assigned was able to inscribe the
memorandum ahead of the sale, although the inscription of the sale was entered ahead of the levy.
The levy on attachment was not inscribed on TCT No. R-22522 because allegedly the sale should
have priority and preference. The cancellation of TCT No. R-17571 and the issuance of TCT No. R-
22522 was already completed when he took over the position of Atty. Santos as Acting Register of
Deeds and was therefore already clothed with the authority to issue and sign TCT No. R-22522.

Atty. Rutaquio also submitted a letter dated June 25, 2004 from Atty. Santos to LRA Administrator
Ulep consulting the latter as regards the registration of the Deed of Absolute Sale and the Notice of
Levy on Attachmentstating that he had not acted on the Deed of Absolute Sale since the required
registration fees were not paid therefor. Administrator Ulep was able to reply to said letter on October
6, 2004, when Atty. Rutaquio was already the Acting Register of Deeds. Administrator Ulep stated
that since the Deed of Sale was considered registered on June 16, 2004, the same shall take
precedence over the Notice of Levy on Attachment registered on June 17, 2004.

On March 2, 2006, the RTC ruled in favor of Durawood grating the Motion to Reinstate Notice of
Levy on Attachment in TCT No. R-22522 without ruling on the prayer to cite Atty. Rutaquio for
contempt. The RTC gave great weight to the certification by LRA Human Resource Management
Officer IV Loreto I. Orense that Atty. Santos was the Acting Register of Deeds from June 1-30, 2004,
and held that this proves the fact that Atty. Santos was the only person authorized to sign and
approve all the transactions with the Registry of Deeds of Antipolo City at the time. Moreover,
according to the RTC, the alienation of LBB Construction in favor of the Bonas without leaving
sufficient property to pay its obligation is considered by law in fraud of creditor under Articles 1381
and 1387 of the Civil Code.

Candice then filed a Motion for Reconsideration. In the meantime, on March 13, 2006, Sheriff Leyva
issued a Notice of Sheriff’s Sale setting the sale of the property covered by TCT No. R-22522 at
public auction on April 11, 2006 at 10:00 a.m., pursuant to the November 15, 2005 Writ of Execution.
Candice filed an Urgent Ex-Parte Motion to Order the Branch Sheriff to Desist from the Sale of
Intervenor’s Property for Being Premature, which was granted by the RTC in an Order dated March
29, 2006.

On March 8, 2006, the new Acting Register of Deeds Jose S. Loriega, Jr. complied with the March
6, 2006 Order of the RTC by reinstating in TCT No. R-22522 the Notice of Levy on Attachment in
favor of Durawood.

On April 7, 2006, the RTC issued an Order denying Candice’s Motion for Reconsideration.

On April 11, 2006, Sheriff Leyva sold the subject property at public auction for P1,259,727.90 with
Durawood being the lone bidder, and issued the corresponding Certificate of Sale. The sale was
inscribed in TCT No. R-22522 on the same date.

Candice filed with the CA a Petition for Certiorari and Prohibition assailing the March 2, 2006 and
April 7, 2006 Orders of the RTC which was then decided in favor of Candice.

According to the Court of Appeals, the sequence of presentation of the entries in the TCT cannot
control the determination of the rights of the claimants over a disputed property. It is the registration
in the Primary Entry Book (also referred to in other cases as the day book) that establishes the order
of reception of instruments affecting registered land. As explained by Atty. Rutaquio, the entry in the
day book is only the preliminary step in the registration. The inscription of the levy on attachment on
TCT No. R-17571 retroacts to the date of entry in the Primary Entry Book, which is June 17, 2004.
However, the inscription of the Deed of Sale on TCT No. R-17571, although made after the
inscription of the levy on attachment, retroacts to the earlier date of entry in the Primary Entry Book,
which is June 16, 2004.

As regards the issuance by Atty. Rutaquio of TCT No. R-22522 on June 16, 2004 despite the fact
that he was not yet the Register of Deeds of Antipolo City at that time, the Court of Appeals held that
there was substantial compliance with the National Land Titles and Deeds Registration
Administration (NALTDRA; now the Land Registration Authority [LRA]) Circular No. 94 on
"Certificates of title and documents left unsigned by former Register of Deeds," which provides:

It has been brought to the attention of this Registration that, in some Registries, there are certificates
of title with the full transcriptions and inscriptions, including the volume and page numbers, the title
number, the date and the name of the former Register of Deeds, already typewritten thereon but
which, for some reasons, cannot anymore be signed by the former official. In such cases and to
resolve this problem, the present Register of Deeds may, without changing or altering the
transcriptions and inscriptions, affix his signature below the name of the former Register of Deeds
but placing the actual date and time of signing enclosed in parenthesis below his signature.17

The Court of Appeals accepted Atty. Rutaquio’s manifestation that he signed TCT No. R-22522
subsequent to June 16, 2004, on a date when he was already the Acting Register of Deeds of
Antipolo City. Since the entry in the Primary Entry Book was made at the time of the incumbency of
Atty. Santos, the name of the latter still appears on the document. According to the Court of Appeals,
Candice cannot be made to suffer for the failure of Atty. Rutaquio to affix the date when he signed
the document. Furthermore, a certificate of title, once registered, cannot be impugned, altered,
changed, modified, enlarged or diminished except in a direct proceeding permitted by law. Finally,
an action for rescission of contracts entered into in fraud of creditors cannot be instituted except
when the party suffering damage has no other legal means to obtain reparation for the same.

Durawood filed a Motion for Reconsideration, but the same was denied by the Court of Appeals in
its Resolution dated September 18, 2007. Hence, the instant Petition for Review.

Issue:

W/N there was grave abuse of discretion in the RTC’s order to reinstate the notice of levy on
attachment in TCT No. R-22522.

Held:

The RTC was, in fact, acting properly when it ordered the reinstatement of the Notice of Levy on
Attachment in TCT No. R-22522. Thus, it cannot be considered as to have acted in grave abuse of
its discretion in issuing such Order.

Current doctrine thus is that entry alone produces the effect of registration, whether the transaction
entered is a voluntary or an involuntary one, so long as the registrant has complied with all that
is required of him for purposes of entry and annotation, and nothing more remains to be done
but a duty incumbent solely on the register of deeds.

This pronouncement, which was reiterated in National Housing Authority v. Basa, Jr., shows that for
the entry to be considered to have the effect of registration there is still a need to comply with all that
is required for entry and registration, including the payment of the prescribed fees.

Records in the case at bar reveal that as of June 25, 2004, the date of the letter of Atty. Santos
seeking the opinion of the LRA as regards the registration of the Deed of Sale and the Notice of Levy
on Attachment, the required registration fees for the Deed of Sale has not yet been paid:

Since there was still no compliance of "all that is required x x x for purposes of entry and
annotation" of the Deed of Sale as of June 25, 2004, the registration of the Notice of Levy on
Attachment on June 17, 2004 should take precedence over the former. Considering that the Notice
of Levy on Attachment was deemed registered earlier than the Deed of Sale, the TCT issued
pursuant to the latter should contain the annotation of the Attachment.

Petition for Review on Certiorari is GRANTED. The Decision of the Court of Appeals is
REVERSED and SET ASIDE.

Topic: DOUBLE SALES


San Lorenzo Development Corporation v CA
G.R. No. 124242. January 21, 2005

Facts:

Respondents Miguel Lu and Pacita Zavalla (Spouses Lu) owned two parcels of land situated in Sta.
Rosa, Laguna covered by a total of 3.1616 hectares.

On 20 August 1986, the Spouses Lu purportedly sold the two parcels of land to Pablo Babasanta,
for the price of fifteen pesos (P15.00) per square meter. Babasanta made a downpayment of fifty
thousand pesos (P50,000.00) as evidenced by a memorandum receipt issued by Pacita Lu of the
same date. Several other payments totaling two hundred thousand pesos (P200,000.00) were made
by Babasanta.

Sometime in May 1989, Babasanta wrote a letter to Pacita Lu to demand the execution of a final
deed of sale in his favor so that he could effect full payment of the purchase price. In the same letter,
Babasanta notified the spouses about having received information that the spouses sold the same
property to another without his knowledge and consent. He demanded that the second sale be
cancelled and that a final deed of sale be issued in his favor.

In response, Pacita Lu wrote a letter to Babasanta wherein she acknowledged having agreed to sell
the property to him at fifteen pesos (P15.00) per square meter. She, however, reminded Babasanta
that when the balance of the purchase price became due, he requested for a reduction of the price
and when she refused, Babasanta backed out of the sale. Pacita added that she returned the sum
of fifty thousand pesos (P50,000.00) to Babasanta through Eugenio Oya.

On 2 June 1989, Babasanta filed before the RTC of San Pedro, Laguna, a Complaint for Specific
Performance and Damages against Spouses Lu. Babasanta alleged that the lands had been sold to
him by the spouses at P15.00 per square meter. Despite his repeated demands for the execution of
a final deed of sale in his favor, respondents allegedly refused.

The Spouses Lu alleged that Pacita Lu obtained loans from Babasanta and when the total advances
of Pacita reached fifty thousand pesos (P50,000.00), the latter and Babasanta, without the
knowledge and consent of Miguel Lu, had verbally agreed to transform the transaction into a contract
to sell the two parcels of land to Babasanta with the fifty thousand pesos (P50,000.00) to be
considered as the downpayment for the property and the balance to be paid on or before 31
December 1987. Respondents Lu added that as of November 1987, total payments made by
Babasanta amounted to only two hundred thousand pesos (P200,000.00) and the latter allegedly
failed to pay the balance of two hundred sixty thousand pesos (P260,000.00) despite repeated
demands. Babasanta had purportedly asked Pacita for a reduction of the price from fifteen pesos
(P15.00) to twelve pesos (P12.00) per square meter and when the Spouses Lu refused to grant
Babasanta’s request, the latter rescinded the contract to sell and declared that the original loan
transaction just be carried out in that the spouses would be indebted to him in the amount of two
hundred thousand pesos (P200,000.00). Accordingly, on 6 July 1989, they purchased Interbank
Manager’s Check No. 05020269 in the amount of two hundred thousand pesos (P200,000.00) in the
name of Babasanta to show that she was able and willing to pay the balance of her loan obligation.

On 19 January 1990, herein petitioner San Lorenzo Development Corporation (SLDC) filed a Motion
for Intervention before the trial court. SLDC alleged that it had legal interest in the subject matter
under litigation because on 3 May 1989, the two parcels of land involved, namely Lot 1764-A and
1764-B, had been sold to it in a Deed of Absolute Sale with Mortgage. It alleged that it was a buyer
in good faith and for value and therefore it had a better right over the property in litigation.
Babasanta demurred and argued that the SLDC had no legal interest in the case because the two
parcels of land involved herein had already been conveyed to him by the Spouses Lu and hence,
the vendors were without legal capacity to transfer or dispose of the two parcels of land to the
intervenor.

SLDC alleged that on 11 February 1989, the Spouses Lu executed in its favor anOption to Buy the
lots subject of the complaint. Accordingly, it paid an option money in the amount of three hundred
sixteen thousand one hundred sixty pesos (P316,160.00) out of the total consideration for the
purchase of the two lots of one million two hundred sixty-four thousand six hundred forty pesos
(P1,264,640.00). After the Spouses Lu received a total amount of six hundred thirty-two thousand
three hundred twenty pesos (P632,320.00) they executed on 3 May 1989 a Deed of Absolute Sale
with Mortgage in its favor. SLDC added that the certificates of title over the property were delivered
to it by the spouses clean and free from any adverse claims and/or notice of lis pendens. SLDC
further alleged that it only learned of the filing of the complaint sometime in the early part of January
1990 which prompted it to file the motion to intervene without delay. Claiming that it was a buyer in
good faith, SLDC argued that it had no obligation to look beyond the titles submitted to it by the
Spouses Lu particularly because Babasanta’s claims were not annotated on the certificates of title
at the time the lands were sold to it.

On 30 July 1993 the RTC decision upheld the sale of the property to SLDC. Applying Article 1544 of
the Civil Code, the trial court ruled that since both Babasanta and SLDC did not register the
respective sales in their favor, ownership of the property should pertain to the buyer who first
acquired possession of the property. The trial court equated the execution of a public instrument in
favor of SLDC as sufficient delivery of the property to the latter. It concluded that symbolic possession
could be considered to have been first transferred to SLDC and consequently ownership of the
property pertained to SLDC who purchased the property in good faith.

Babasanta appealed the trial court’s decision to the CA alleging in the main that the trial court erred
in concluding that SLDC is a purchaser in good faith and in upholding the validity of the sale made
by the Spouses Lu in favor of SLDC.

In the same manner, Spouses Lu likewise filed an appeal to the CA contending that the trial court
erred in failing to consider that the contract to sell between them and Babasanta had been novated
when the latter abandoned the verbal contract of sale and declared that the original loan transaction
just be carried out. Also, since the properties involved were conjugal, the trial court should have
declared the verbal contract to sell between Pacita Lu and Pablo Babasanta null and void ab initio for
lack of knowledge and consent of Miguel Lu.

On 4 October 1995, the CA set aside the judgment of the trial court. It declared that the sale between
Babasanta and the Spouses Lu was valid and subsisting and ordered the spouses to execute the
necessary deed of conveyance in favor of Babasanta, and the latter to pay the balance of the
purchase price in the amount of two hundred sixty thousand pesos (P260,000.00). The appellate
court ruled that the Absolute Deed of Sale with Mortgage in favor of SLDC was null and void on the
ground that SLDC was a purchaser in bad faith.

SLDC and the Spouses Lu filed separate motions for reconsideration with the appellate court.
Spouses Lu then withdrew their motion for reconsideration while SLDC’s motion for reconsideration
was denied.

Hence, this petition.

Issue:
Who between SLDC and Babasanta has a better right over the two parcels of land subject of the
instant case in view of the successive transactions executed by the Spouses Lu.

Held:

SLDC has a better right over the subject lands.

An analysis of the facts, leads to the conclusion that the the contract between Babasanta and the
Spouses Lu is not a contract of sale but merely a contract to sell. In Dichoso v. Roxas, Article 1544
does not apply to a case where there was a sale to one party of the land itself while the other contract
was a mere promise to sell the land or at most an actual assignment of the right to repurchase the
same land. Accordingly, there was no double sale of the same land in that case.

The receipt signed by Pacita Lu merely states that she accepted the sum of fifty thousand pesos
(P50,000.00) from Babasanta as partial payment of 3.6 hectares of farm lot situated in Sta. Rosa,
Laguna. While there is no stipulation that the seller reserves the ownership of the property until full
payment of the price which is a distinguishing feature of a contract to sell, the subsequent acts of
the parties convince us that the Spouses Lu never intended to transfer ownership to Babasanta
except upon full payment of the purchase price.

On the assumption that the transaction between the parties is a contract of sale and not a contract
to sell, Babasanta’s claim of ownership should nevertheless fail. The perfection of a contract of sale
should not, however, be confused with its consummation. In relation to the acquisition and transfer
of ownership, it should be noted that sale is not a mode, but merely a title. The law provides that the
ownership of the thing sold is acquired by the vendee from the moment it is delivered to him either
actual or constructive. Babasanta did not acquire ownership by the mere execution of the receipt by
Pacita Lu acknowledging receipt of partial payment for the property.

Though not applicable in this case, double sale is primarily governed by Article 1544 which lays
down the rules of preference between the two purchasers of the same property.

The principle of primus tempore, potior jure (first in time, stronger in right) gains greater significance
in case of double sale of immovable property. When the thing sold twice is an immovable, the one
who acquires it and first records it in the Registry of Property, both made in good faith, shall be
deemed the owner. Verily, the act of registration must be coupled with good faith— that is, the
registrant must have no knowledge of the defect or lack of title of his vendor or must not have been
aware of facts which should have put him upon such inquiry and investigation as might be necessary
to acquaint him with the defects in the title of his vendor.

The law speaks not only of one criterion. The first criterion is priority of entry in the registry of
property; there being no priority of such entry, the second is priority of possession; and, in the
absence of the two priorities, the third priority is of the date of title, with good faith as the common
critical element. Since SLDC acquired possession of the property in good faith in contrast to
Babasanta, who neither registered nor possessed the property at any time, SLDC’s right is definitely
superior to that of Babasanta’s.

The decision of the RTC is REINSTATED.

Topic: DOUBLE SALES


Melencion vs CA
G.R. No. 148846. September 25, 2007
Facts:
The subject property is a parcel of land denominated as Lot No. 3368 covered by TCT No.
20626 in the name of the late petitioner Go Kim Chuan
The entire property was originally owned by Esteban Bonghanoy who had only one child,
Juana Bonghanoy-Amodia, mother of the late Leoncia Amodia and petitioners Cecilia
Amodia Vda. de Melencion, Veneranda Amodia, Felipe Amodia, and Eutiquio Amodia
(Amodias). The entire property was brought under the operation of the Torrens System but
the title thereto was lost during the Second World War.
The Amodias allegedly executed an Extra-Judicial Partition of Real Estate with Deed of
Absolute Sale whereby they conveyed the subject property to respondent Aznar Brothers
Realty Company (AZNAR). The said Extra- Judicial Partition of Real Estate with Deed of
Absolute Sale was registered under Act 3344 as there was no title on file in the Register of
Deeds.
Petitioners (Amodias) executed a Deed of Extra-Judicial Settlement with Absolute Sale,
conveying the subject property in favor of Go Kim Chuan. The lost title covering the
subject property was reconstituted and a reconstituted title particularly designated as OCT
No. RO-2899 was issued in the name of Esteban Bonghanoy and, subsequently, TCT No.
20626 was issued in the name of Go Kim Chuan.
AZNAR filed a case against petitioners Amodias and Go Kim Chuan for Annulment of Sale
and Cancellation of TCT No. 20626 alleging that the sale to Go Kim Chuan was an invalid
second sale of the subject property which had earlier been sold to it.
Petitioners Amodias denied that they executed the Extra-Judicial Partition of Real Estate
with Deed of Absolute Sale in favor of AZNAR, claiming that their purported signatures
thereon were forged.
Issue:
Who between Go Kim Chuan and AZNAR has the better right over the subject property
Ruling:
Although it is obvious that Go Kim Chuan registered the sale in his favor under Act 496
while AZNAR did not, we still cannot make an outright award of the subject property to the
petitioners solely on that basis. For the law is clear: mere registration of title is not enough.
Good faith must accompany the registration.
Thus, to be able to enjoy priority status, the second purchaser must be in good faith, i.e.,
he must have no knowledge of the previous alienation of the property by the vendor to
another. Notably, what is important for this purpose is not whether the second buyer is a
buyer in good faith, but whether he registers the second sale in good faith, meaning, he
does so without knowledge of any defect in the title over the property sold.
To fully resolve the second question, therefore, it is imperative that we determine whether
Go Kim Chuan was a registrant in good faith.
Inscription of an adverse claim serves as a warning to third parties dealing with a piece of
real property that someone claims an interest therein or that there is a right superior to that
of the titled owner. However, as pointed out by petitioners and as admitted by AZNAR, the
Notice of Adverse Claim was annotated on TCT No. 20626 only on February 4, 1990, after
the lost certificate of title was reconstituted and after the issuance of said TCT in the name
of Go Kim Chuan. It is, therefore, absurd to say that Go Kim Chuan should be bound by an
adverse claim which was not previously annotated on the lost title or on the new one, or be
shackled by a claim which he did not have any knowledge of.
Before buying the subject property, Go Kim Chuan made verifications with the Office of the
City Assessor and the Register of Deeds. He likewise visited the premises of the subject
property and found that nobody interposed any adverse claim against the Amodias. After
he decided to buy the subject property, he paid all taxes in arrears, caused the publication
of the Deed of Extra-Judicial Settlement with Absolute Sale in a newspaper of general
circulation, caused the reconstitution of the lost certificate of title and caused the issuance
of the assailed TCT in his name. Given these antecedents, good faith on the part of Go
Kim Chuan cannot be doubted.
We also note that AZNAR's complaint for cancellation of title contains no allegation that
the (second) purchaser was aware of defects in his title. In the absence of such an
allegation and proof of bad faith, it would be grossly inappropriate for this Court to render
judgment against the purchaser who had already acquired title not only because of lack of
evidence, but also because of the indefeasibility and conclusiveness of such title.
Topic: DOUBLE SALES
Antonio v Santos
G.R. No. 149238. November 22, 2007

Facts:
Antonio alleged that he is the absolute owner of a 13,159-square meter parcel of land
previously owned by his father. he filed an application for the registration of two parcels of
land, one of which was Lot No. 11703, CAD 688-D. His application was docketed as Land
Registration Case No. 142-A (LRC No. 142-A).
RTC declared him the true and absolute owner in fee simple of the two parcels of land he
applied for but set aside its decision with respect to Lot No. 11703, CAD 688-D to avoid
duplication of issuance of titles.
After investigation, he discovered that Lot No. 11703, CAD 688-D was already titled in the
name of respondents. He then filed the complaint averring that respondents committed
fraud in their application for titling because they made it appear in their application for
registration that the subject property was located in Pinagbuhatan, Pasig, Rizal, when in
fact, the property is located in Barangay San Juan, Cainta, Rizal. He argued that Original
Certificate of Title No. 108 (OCT No. 108) in respondents' names, insofar as it included Lot
No. 11703, CAD 688-D, is, therefore, null and void because it was obtained through
fraudulent misrepresentations and machinations.
Respondents averred that OCT No. 108 was duly issued to them by the Register of Deeds
and further alleged that prior to the issuance of OCT No. 108, they, as registered owners,
had always been in peaceful possession of the property and at no time had Antonio
possessed the property, nor did he ever make any claim against the said property.
Issues:
Was the decision in LRC No. 142-A sufficient basis of petitioner's claim of ownership over
the subject property?
Ruling:
Petitioner cannot rely on the decision in LRC No. 142- A.
As pointed out by the Court of Appeals, even if a title had been issued to petitioner based
on said decision, his title would be of a later date than the title of respondents, hence
inefficacious and ineffective. This Court has ruled that, when two certificates of title are
issued to different persons covering the same land in whole or in part, the earlier in date
must prevail; and in case of successive registrations where more than one certificate is
issued over the same land, the person holding a prior certificate is entitled to the land as
against a person who relies on a subsequent certificate.

TOPIC: INNOCENT PURCHASER FOR VALUE (Sec. 53)


PERALTA v. ABALON
GR Ni. 183448, June 30, 2014

FACTS:
A parcel of land in Legaspi City was originally covered by an OCT under the name of
BernanrdinaAbalon. A Deed of Absolute Sale conveyed the land to Rellama, thus cancelling the
OCT and a new TCT was issued in favor of Rellama. Subsequently the lots were subdivided into
three wherein one portion of such land was sold to Sps. Peralta. Another portion of the lot was sold
to Lotivo who transferred his ownership to the Andals who also acquired the third portion of the lot.
Claiming that the Deed of Absolute Sale executed by Abalon in favor of Rellama was a forged
document, and claiming further that they acquired the subject property by succession, they being
the nephew and niece of Abalon who died without issue, plaintiff-appellees MansuetaAbalon and
Amelia Abalon filed the case below against Rellama, Spouses Peralta, and the Andals, the herein
defendants-appellants. Abalon alleged that the Rellama was able to cause the cancellation of the
OCT upon presentation of a Xerox copy of the alleged forged deed of absolute sale. Moreso, the
OCT has always been in the possession of the duplicate owner’s of the OCT.Moreso, Abalon claimed
that the respondents are not buyers in good faith as they were aware that the subject land was in
the possession of the Abalons.

The RTC rendered judgementin favor of the Abalons and ordered the restoration of the OCT in the
name of Abalon and the cancellation of the titles issued to the defendants Rellama, Peralsta, and
Andals. The RTC took notice of the absence of the Xerox copy of the purported deed of sale between
Rellama and Abalon in the records of the Register of Deeds and made it deduce that the document
was a mere forgery. Also, the court took notice of the perforated serial number of the duplicate copy
of the OCT were authentic.

However, the CA reversed the decision of the RTC wherein it stated that the the Spouses Peralta
were buyers in bad faith for merely relying on the photocopy of the TCT when the bought the property
from Rellama. However, the Andals were accorded with the presumption of good faith with the
absence of any evidence to rebut the presumption.

Issue: Whether or not the Andals can be considered as buyers in good faith and whether or not a
forged instrument may become the root of a valid title in the hands of an innocent purchaser for
value, even if the true owner thereof has been in possession of the genuine title, which is valid and
has not been cancelled.

Ruling: Yes, the Andals are considered as innocent purchasers in good faith.
It is well-settled that "a certificate of title serves as evidence of an indefeasible and incontrovertible
title to the property in favor of the person whose name appears therein. The real purpose of the
Torrens system of land registration is to quiet title to land and put a stop forever to any question as
to the legality of the title."Moreover, it is well-established in our laws and jurisprudence that a
person who is dealing with a registered parcel of land need not go beyond the face of the
title. A person is only charged with notice of the burdens and claims that are annotated on the title.
The aforesaid principle admits of an unchallenged exception: that a person dealing with
registered land has a right to rely on the Torrens certificate of title and to dispense with the need of
inquiring further except when the party has actual knowledge of facts and circumstances that
would impel a reasonably cautious man to make such inquiry or when the purchaser has
knowledge ofa defect or the lack of title in his vendor or of sufficient facts to induce a
reasonably prudent man to inquire into the status of the title of the property in litigation. The
presence of anything which excites or arouses suspicion should then prompt the vendee to look
beyond the certificate and investigate the title of the vendor appearing on the face of said certificate.
One who falls within the exception can neither be denominated an innocent purchaser for value nor
a purchaser in good faith; and hence does not merit the protection of the law.
Jurisprudence has defined an innocent purchaser for value as one who buys the
property of another without notice that some other person has a right to or interest therein
and who then pays a full and fair price for it at the time of the purchase or before receiving a
notice of the claim or interest of some other persons in the property. Buyers in good faith buy
a property with the belief that the person from whom they receive the thing is the owner who can
convey title to the property. Such buyers do not close their eyes to facts that should put a reasonable
person on guard and still claim that they are acting in good faith.
In this case, fter executing the Deed of Sale with BernardinaAbalon under fraudulent
circumstances, Rellama succeeded in obtaining a title in his name and selling a portion of the
property to the Andals, who had no knowledge of the fraudulent circumstances involving the transfer
from Abalon to Rellama. The records of the RTC and the CA have a finding that when Rellama sold
the properties to the Andals, it was still in his name; and there was no annotation that would blight
his clean title. To the Andals, there was no doubt that Rellama was the owner of the property being
sold to them, and that he had transmissible rights of ownership over the said property. Thus, they
had every right to rely on the face of his title alone.
As for Spouses Peralta, we sustain the ruling of the CA that they are indeed buyers in bad
faith. The appellate court made a factual finding that in purchasing the subject property, they merely
relied on the photocopy of the title provided by Rellama. The CA concluded that a mere photocopy
of the title should have made Spouses Peralta suspicious that there was some flaw in the title of
Rellama, because he was not in possession of the original copy. This factual finding was supported
by evidence.

LEGARDA v. CA,et al.


G.R. No. 94457, October 16, 1997

FACTS:
Victoria Legarda was the owner of a parcel of land in Quezon City. New Cathay House, Inc.
filed a complaint against Legarda for specific performance with preliminary injunction and damages
alleging that Legarda entered into a lease agreement with Cathay, through its representative
Cabrera, for a period of five years. After Cathay deposited the down payment for the rentals, the
Legarda failed and refused to execute and sign the contract drawn by Cathay. Legarda engaged the
services of counsel to handle her case. The said counsel filed his appearance and failed to file an
answer dispute the extended period. due to this negligence, the RTC considered Legarda in default
and decided to order Legarda to execute and sign the lease contract and pay for damages. Cathay
moved for the execution of the judgment upon its finality in which the property of the petitioner was
sold to Cabrera at a public auction. After the one year redemption period, Cabrera moved for the
consolidation of the property and registered the same under the name of Cabrera.
After learning the unfortunate turn of events, Legarda sought to annul the judgment at the
CA due to unjust enrichment of the Cabrera and that when the complaint was filed at the RTC, the
parties came to an agreement to settle the differences, thus leading Legarda to a false pretense thus
disabling them to present their defense. Moreso, they alleged that the documentary evidence that
Cathay presented were tampered and falsified. The CA dismissed the petition citing that the counsel
for Legarda is negligent from its failure to file an answer on the complaint filed by Cathay up to the
failure to seek relief after Legarda was declared in default.
With this, Legarda hired the services of another counsel and filed a petition for certiorari,
praying for the reversal for the decision of the RTC, CA and the annulment of the sheriff’s sale. The
Supreme Court ruled (Gancayco decision) granting the petition and nullifying the assailed decisions
and ordering Cathay to reconvey the said property to Legarda and to cancel the registration of the
said property in the name of Cathay. The Court found out that the counsel of Legarda (Coronel) was
grossly negligent that it deprived Legarda of her right to due process.
However, after this decision, Cathay was not able to return the property to Legarda because
it did neither possessed nor owned the property and that it has already been transferred to innocent
third parties at the time of promulgation of the said judgment. It was found out that Cabrera
participated in the auction sale in his private capacity and not as counsel for Cathay. After the auction
sale was effected, the titles were consolidated under the name of Cabrera and that it was
subsequently sold to Nancy Saw, an innocent purchaser for value. Since the decision of the CA was
deemed final, the property was sold no less than three times (Cabrera to Saw, to Sy Chua, to
Luminlun)
Issue: Whether or not the subsequent transfers of the property are valid as the sucessors in interest
were considered as innocent purchasers for value.

Ruling: Yes, the transfers were valid and the successors of interest of Cabrera are innocent
purchasers of good faith. The successors relied on the clean title of the subject land that were
presented by the predecessors. The successive owners were each armed with their own indefeasible
titles which automatically brought them under the aegis of the Torrens System.In the case at bar, it
is not disputed that no notice of lispendens was ever annotated on any of the titles of the subsequent
owners. And even if there were such a notice, it would not have created a lien over the property
because the main office of a lien is to warn prospective buyers that the property they intend to
purchase is the subject of a pending litigation. Therefore, since the property is already in the hands
of Luminlun, an innocent purchaser for value, it can no longer be returned to its original owner by
Cabrera, much less by Cathay itself. Another point to consider, though not raised as an issue in this
case, is the fact that Cabrera was impleaded as a party-respondent only on August 12, 1991, after
the promulgation of the Gancayco decision. The dispositive portion itself ordered Cathay, instead of
Cabrera, to reconvey the property to Legarda. Cabrera was never a party to this case, either as
plaintiff-appellee below or as respondent in the present action. Neither did he ever act as Cathay's
representative. As we held in the recent case of National Power Corporation v. NLRC, et al.,
"(j)urisdiction over a party is acquired by his voluntary appearance or submission to the court or by
the coercive process issued by the court to him, generally by service of summons." 10 In other words,
until Cabrera was impleaded as party respondent and ordered to file a comment in the August 12,
1991, resolution, the Court never obtained jurisdiction over him, and to command his principal to
reconvey a piece of property which used to be HIS would not only be inappropriate but would also
constitute a real deprivation of one's property without due process of law.
The fact that Cabrera is an officer of Cathay does not make him a purchaser in bad faith. His
act in representing the company was never questioned nor disputed by Legarda. And while it is true
that he won in the bidding, it is likewise true that said bidding was conducted by the book. There is
no call to be alarmed in case an official of the company emerges as the winning bidder since in some
cases, the judgment creditor himself personally participates in the bidding. Neither Cathay nor
Cabrera should be made to suffer for the gross negligence of Legarda's counsel. If she may be said
to be "innocent" because she was ignorant of the acts of negligence of her counsel, with more reason
are respondents truly "innocent." As between two parties who may lose due to the negligence or
incompetence of the counsel of one, the party who was responsible for making it happen should
suffer the consequences. This reflects the basis common law maxim, so succinctly stated by Justice
J.B.L. Reyes, that ". . . (B)etween two innocent parties, the one who made it possible for the wrong
to be done should be the one to bear the resulting loss."

CHUA v SORIANO
G.R. 150066, April 13, 2007

FACTS:
Soriano owned a 1,600 square meter parcel of land located
in Barangay Banlat, Quezon City, covered by TCT No. 363471 of the Registry of Deeds
of Quezon City.
Early in 1988, Sorianos first cousin and godson Celestino asked Soriano to lend him TCT
No. 363471 as a security for a loan to be used in the business operation of Celestinos company,
Digital Philippines, Inc. Acceding to Celestinos request, Soriano executed a SPA
authorizing Celestino to mortgage said property.

On June 11, 1988 fire that gutted a portion of the Quezon City Hall and destroyed in the
process the original copy of TCT No. 363471 on file with the Registry of Deeds of Quezon City.

Soriano also executed a SPA authorizing Celestino and one Carlito Castro to initiate
administrative reconstitution proceedings of TCT No. 363471. On April 17, 1990, the reconstituted
title, TCT No. RT-3611 (363471) PR 1686, was issued.[6]

During the pendency of the administrative reconstitution


proceedings, Soriano asked Celestino whether there was any truth to the spreading rumor that he
had already sold the subject property. Celestino denied the rumor. Dissatisfied, Soriano made
inquiries with the Registry of Deeds of Quezon City and discovered that TCT No. 363471 had been
canceled by TCT No. 14514 in the name of the Chuas. By virtue of a SPA dated March 9,
1989 with Soriano's purported signature, Celestino sold to the Chuas the property in an Absolute
Deed of Sale

Claiming that his signature in the SPA is a forgery, Soriano filed a complaint
against Celestino and the Chuas for annulment of deed of sale and special power of attorney,
cancellation of title and reconveyance with damages.

Celestino’s Defense: that he was duly authorized to sell the property


Chuas’ Defense: they are purchasers in good faith since they bought the property
from Celestino by virtue of a SPA which was duly inscribed and annotated on the owner's duplicate
of the TCT and the tax declaration and that they have duly inspected the property before purchasing
it.

Soriano died during the pendency of the trial and was substituted by his sister,
FlorenciaCelestino Soriano aka. Sister Mary VirgiliaCelestino Soriano

RTC Decision: In favor of Soriano


 Soriano's signature in the SPA dated March 9, 1989 is a forgery based on the opinion of
expert witness Arcadio A. Ramos, Chief of the Questioned Documents Division of the NBI
 Chuas are not purchasers in good faith. They did not personally verify the title of the subject
property but relied only upon its tax declaration;
 Chuas were placed on guard to ascertain the authenticity of the authority of Celestino since
they were not dealing with Soriano, the registered owner.

Dissatisfied, Celestino and the Chuas filed separate appeals with the CA.

CA Decision: RTC Affirmed

No appeal was filed by Celestino BUT Chuas filed the present petition

ISSUE: W/O the Chuas are purchasers in good faith.

RULING:
1. The Court, not being a trier of facts, does not normally embark on a re-examination of the evidence
presented by the contending parties during the trial of the case considering that the findings of facts
of the CA are conclusive and binding on the Court.[28] This rule, however, has several well-recognized
exceptions: Exception (4) is present in the instant case. “…(4) when the judgment is based on a
misapprehension of facts;..”

2. General Rule: every person dealing with registered land may safely rely on the correctness of the
certificate of title issued therefor and the law will in no way oblige him to go beyond the certificate to
determine the condition of the property.

HOWEVER, when a person who deals with registered land through someone who is NOT
the registered owner, he is expected to look behind the certificate of title and examine all the factual
circumstances, in order to determine if the vendor has the capacity to transfer any interest in the
land. He has the duty to ascertain the identity of the person with whom he is dealing and the latters
legal authority to convey. The buyer is expected to examine not only the certificate of title but all
factual circumstances necessary for him to determine if there are any flaws in the title of the
transferor, or in the seller’s capacity to transfer the land.

FURTHER, If the proof of capacity consists of a SPA duly notarized, mere inspection of the
face of such public document already constitutes sufficient inquiry. If no such special power of
attorney is provided or there is one but there appear flaws in its notarial acknowledgment, mere
inspection of the document will not do; the buyer must show that his investigation went beyond the
document and into the circumstances of its execution.

In the present case,


An examination of the assailed SPA shows that it is valid and regular on its face. FIRST, it
contains a notarial seal. A notarial seal is a mark, image or impression on a document which would
indicate that the notary public has officially signed it. The long-standing rule is that documents
acknowledged before a notary public have the evidentiary weight with respect to their due execution
and regularity. The assailed SPA is a notarized document and therefore, presumed to be valid and
duly executed.

Thus, the reliance by the Chuas on the notarial acknowledgment found in the duly notarized
SPA presented by Celestinois sufficient evidence of good faith. The Chuas need not prove anything
more.

SECOND, the SPA was accepted by the Register of Deeds. It was registered with the
Registry of Deeds of Quezon City and inscribed and annotated in the owner's duplicate title

THIRD, The fact that Soriano's purported signature in the SPA dated March 9, 1989 was
declared to be a forgery does not alter the Chuas status as purchasers in good faith. According
to Bautista v. Silva:

When the document under scrutiny is a special power of attorney that is duly
notarized, we know it to be a public document where the notarial acknowledgment
is prima facie evidence of the fact of its due execution. …. The notarial
acknowledgment has removed the choice from him and replaced it with a presumption
sanctioned by law that the affiant appeared before the notary public and
acknowledged that he executed the document, understood its import and signed it. In
reality, he is deprived of such choice not because he is incapable of knowing and
finding out but because, under our notarial system, he has been given the luxury of
merely relying on the presumption of regularity of a duly notarized SPA. And he
cannot be faulted for that because it is precisely that fiction of regularity which holds
together commercial transactions across borders and time.

With the property in question having already passed to the hands of purchasers in good faith, it is
now of no moment that some irregularity attended the issuance of the SPA. Being purchasers in
good faith, the Chuas already acquired valid title to the property. A purchaser in good faith holds an
indefeasible title to the property and he is entitled to the protection of the law.

Petitioners are hereby declared purchasers in good faith.


Further, the special power of attorney dated March 9, 1985 and the Deed of Sale dated July
4, 1989 and the Transfer Certificate of Title No. 14514 in the name of the
defendants Chuas are valid.

NOTES:
Lim v. Chuatoco:
A purchaser in good faith is one who buys property without notice that some other person has a right
to or interest in such property and pays its fair price before he has notice of the adverse claims and
interest of another person in the same property. The honesty of intention which constitutes good
faith implies a freedom from knowledge of circumstances which ought to put a person on inquiry
G.R. No. 195825
SPOUSES CUSI vs. DOMINGO,
x-----------------------x
G.R. No. 195871
DE VERA vsDOMINGO AND SPOUSES SY
February 27, 2013

FACTS:
Disputed property was a vacant unfenced lot situated in White Plains, Quezon City covered by TCT
No. N-165606 in the name of respondent Lilia V. Domingo by the RD of QC with an area of 658
sqm.

Sy representing herself as the owner of the property, petitioned the RTC for the issuance of a new
owner’s copy of Domingo’s TCT No. N-165606, appending to her petition a deed of absolute sale
purportedly executed in her favor by Domingo; and an affidavit of loss whereby she claimed that her
bag containing the owner’s copy of said TCT had been snatched from her while she was at the SM
City in North EDSA, QC.
RTC granted Sy’s petition The RD of QC then issued a new owner’s duplicate copy of TCT No. N-
165606, which was later cancelled by virtue of the deed of absolute sale, and in its stead the Registry
of Deeds of Quezon City issued TCT No. 186142 in Sy’s name.

Sy subsequently subdivided the property into two, and sold each half by way of contract to sell to
Spouses De Vera and to Spouses Cusi.. TCT No. 186142 in the name of Sy was then cancelled by
virtue of the deeds of sale executed between Sy and Spouses De Vera, and between Sy and
Spouses Cusi, to whom were respectively issued TCTs of there own. All the while, the transactions
between Sy and the De Veras, and between Sy and the Cusis were unknown to Domingo, whose
TCT No. N-165606 remained in her undisturbed possession.

In July 1999, Domingo learned that construction activities were being undertaken on her property
without her consent. It turned out that the construction activities taking place on the property that
Domingo learned about were upon the initiative of the De Veras in the exercise of their dominical
and possessory rights.

Domingo commenced this action against Sy the De Veras and the Cusis in the RTC seeking the
annulment or cancellation of titles, injunction and damages. The RTC granted Domingo’s application
for the TRO enjoining the defendants from proceeding with the construction activities on the property.

RTC Ruling:
Initial Decision
(a) declaring the sale between Domingo and Sy void
(b) declaring the Sps. De Vera and Sps. Cusi to be purchasers in good faith and for value;
(d) Sy liable to the plaintiff Lilia Domingo for damages,

RTC’s new decision:


(a) Declaring the sale between Domingo and Sy void and of no effect;
(b) Declaring the Sps. De Vera and Sps. Cusi NOT purchasers in good faith and for value
and their corresponding TCTs void
(e) TCT No. 165606 in the name of Domingo is hereby revalidated; and,
(f) Sy liable to Domingo for damages
CA Ruling: Affirming the RTC with modification of the damages to be paid by the Sys to Domingo

Hence, this appeal by the Cusis and De Vera

ISSUE: W/O the Cusis and De Vera are purchasers for value and good faith

RULING:
The petitions for review are bereft of merit.
1. We consider to be significant that the Sys no longer came to the Court for further review,
thereby rendering the judgment of the CA on the issue of nullity of the Deed of Sale between
them and Domingo as final and immutable as to them.

2. The Court concurs with the finding by the CA that the Cusis and De Vera were not purchasers
for value and in good faith.

As a rule, the review function of the Court is limited to a review of the law involved. But the Court
now delves into the facts relating to the issue of innocence of the petitioners in their purchase of the
property, considering that the RTC, through its original decision, at first regarded them to have been
innocent purchasers who were not aware of any flaw or defect in Sy’s title based on the fact that the
property had been unfenced and vacant. The RTC also regarded the petitioners’ making of
reasonable verifications as their exercise of the due diligence required of an ordinary buyer. The
RTC later completely turned around through another decision, however, and it was such decision
that the CA affirmed subject to the modifications of the damages granted to Domingo.

There is no question that the petitioners exerted some effort as buyers to determine whether the
property did rightfully belong to Sy. For one, they did not find any encumbrance, like a notice
of lispendens, being annotated on the TCT of Sy. Nonetheless, their observance of a certain degree
of diligence within the context of the principles underlying the Torrens system was not their only
barometer under the law and jurisprudence by which to gauge the validity of their acquisition of title.
As the purchasers of the property, they also came under the clear obligation to purchase the property
not only in good faith but also for value.

Therein lay the problem. The petitioners were shown to have been deficient in their vigilance as
buyers of the property. It was not enough for them to show that the property was unfenced and
vacant; otherwise, it would be too easy for any registered owner to lose her property, including its
possession, through illegal occupation. Nor was it safe for them to simply rely on the face of Sy’s
TCT No. 186142 in view of the fact that they were aware that her TCT was derived from a duplicate
owner’s copy reissued by virtue of the loss of the original duplicate owner’s copy. That circumstance
should have already alerted them to the need to inquire beyond the face of Sy’s TCT No. 186142.
There were other circumstances, like the almost simultaneous transactions affecting the property
within a short span of time, as well as the gross undervaluation of the property in the deeds of sale,
ostensibly at the behest of Sy to minimize her liabilities for the capital gains tax, that also excited
suspicion, and required them to be extra-cautious in dealing with Sy on the property.

To the Court, the CA’s treatment of Sy’s TCT No. 186142 as similar to a reconstituted copy of a
Torrens certificate of title was not unwarranted.

Barstowe Philippines Corporation v. Republic:


"the nature of a reconstituted Transfer Certificate of Title of registered land is similar to that of a
second Owner’s Duplicate Transfer Certificate of Title," in that "both are issued, after the proper
proceedings, on the representation of the registered owner that the original of the said TCT or the
original of the Owner’s Duplicate TCT, respectively, was lost and could not be located or found
despite diligent efforts exerted for that purpose;"33 and that both were "subsequent copies of the
originals thereof," a fact that a "cursory examination of these subsequent copies would show" and
"put on notice of such fact [anyone dealing with such copies who is] thus warned to be
extracareful."
The Court has treated a reissued duplicate owner’s copy of a TCT as merely a reconstituted
certificate of title in Garcia v. Court of Appeals, a case with striking similarities to this one. With the
case of Garcia, the Court held that they did not deal on the property in good faith because: (a) "the
title of the property mortgaged to the Lazaros was a second owner’s duplicate TCT, which is, in effect
a reconstituted title. This circumstance should have alerted them to make the necessary
investigation, but they did not;" and (b) their argument, that "because the TCT of the property on
which their mortgage lien was annotated did not contain the annotation: "Reconstituted title," the
treatment of the reissued duplicate owner’s copy of the TCT as akin to a reconstituted title did not
apply, had no merit considering that: "The nature of a reconstituted Transfer Certificate of Title of
registered land is similar to that of a second Owner's Duplicate Transfer Certificate of Title. Both are
issued, after the proper proceedings, on the representation of the registered owner that the original
of the said TCT or the original of the Owner's Duplicate TCT, respectively, was lost and could not be
located or found despite diligent efforts exerted for that purpose. Both, therefore,
are subsequent copies of the originals thereof. A cursory examination of these subsequent copies
would show that they are not the originals. Anyone dealing with such copies are put on notice of
such fact and thus warned to be extra-careful. This warning the mortgagees Lazaros did not heed,
or they just ignored it."

In this case, being the buyers of the registered realty, the Cusis and the De Veras were aware of the
aforementioned several almost simultaneous transactions affecting the property. Their awareness,
if it was not actual, was at least presumed, and ought to have put them on their guard, for, as the CA
pointed out, the RTC observed that "[t]hese almost simultaneous transactions, particularly the date
of the alleged loss of the TCT No. 165606 and the purported Deed of Sale, suffice[d] to arouse
suspicion on [the part of] any person dealing with the subject property."37 Simple prudence would
then have impelled them as honest persons to make deeper inquiries to clear the suspiciousness
haunting Sy’s title. But they still went on with their respective purchase of the property without making
the deeper inquiries. In that regard, they were not acting in good faith.

Another circumstance indicating that the Cusis and the De Veras were not innocent purchasers for
value was the gross undervaluation of the property in the deeds of sale at the measly price
of P1,000,000.00 for each half when the true market value was then in the aggregate of at
least P14,000,000.00 for the entire property. Even if the undervaluation was to accommodate the
request of Sy to enable her to minimize her liabilities for the capital gains tax, their acquiescence to
the fraud perpetrated against the Government, no less, still rendered them as parties to the
wrongdoing. They were not any less guilty at all. In the ultimate analysis, their supposed passivity
respecting the arrangement to perpetrate the fraud was not even plausible, because they knew as
the buyers that they were not personally liable for the capital gains taxes and thus had nothing to
gain by their acquiescence. There was simply no acceptable reason for them to have acquiesced to
the fraud, or for them not to have rightfully insisted on the declaration of the full value of the realty in
their deeds of sale. By letting their respective deeds of sale reflect the grossly inadequate price, they
should suffer the consequences, including the inference of their bad faith in transacting the sales in
their favor.

De Vera particularly insists that she and her late husband did not have any hand in the
undervaluation; and that Sy, having prepared the deed of sale, should alone be held responsible for
the undervaluation that had inured only to her benefit as the seller. However, such insistence was
rendered of no consequence herein by the fact that neither she nor her late husband had seen fit to
rectify the undervaluation. It is notable that the De Veras were contracting parties who appeared to
have transacted with full freedom from undue influence from Sy or anyone else.

As an examination of the records shows, the petitioners were not innocent purchasers in good faith
and for value. Their failure to investigate Sy's title despite the nearly simultaneous transactions on
the property that ought to have put them on inquiry manifested their awareness of the flaw in Sy's
title. That they did not also appear to have paid the full price for their share of the property evinced
their not having paid true value.39

The Court affirms the lower courts, and restores to Domingo her rights of dominion over the property.

Notes:

One of the guiding tenets underlying the Torrens system is the curtain principle, in that one does
not need to go behind the certificate of title because it contains all the information about the title of
its holder. This principle dispenses with the need of proving ownership by long complicated
documents kept by the registered owner, which may be necessary under a private conveyancing
system, and assures that all the necessary information regarding ownership is on the certificate of
title.

Good faith is the honest intention to abstain from taking unconscientious advantage of another. It
means the "freedom from knowledge and circumstances which ought to put a person on inquiry."
Given this notion of good faith, therefore, a purchaser in good faith is one who buys the property of
another without notice that some other person has a right to, or interest in, such property and pays
full and fair price for the same
(GR 192669)
RAUL SABERON, JOAN F. SABERON and JACQUELINE SABERON, Petitioners,
vs.
OSCAR VENTANILLA, JR., and CARMEN GLORIA D. VENTANILLA, Respondents.

Facts:

On March 3, 1970, Manila Remnant Co., Inc. (MRCI) and A.U. Valencia & Co. Inc. (AUVC) executed
two (2) contracts to sell in favor of Oscar C. Ventanilla, Jr. and Carmen Gloria D. Ventanilla
(Ventanillas). MRCI resold the same property to Carlos Crisostomo (Crisostomo).

Aggrieved, the Ventanillas commenced an action for specific performance, annulment of deeds and
damages against MRCI, AUVC, and Crisostomo with the Court of First Instance. The CFI Quezon
City rendered a decision in favor of the Ventanillas. The CA sustained the CFI Quezon City’s decision
in toto. The Ventanillas moved for the issuance of a writ of execution. The writ was issued and
served upon MRCI.

However, MRCI alleged that the subject properties could not longer be delivered to the Ventanillas
because they had already been sold to Samuel Marquez (Marquez)

The case was elevated to this Court where MRCI argued that the sale of the properties to Marquez
was valid because at the time of the sale, the issue of the validity of the sale to the Ventanillas had
not yet been resolved. Further, there was no specific injunction against it re-selling the property. As
a buyer in good faith, Marquez had a right to rely on the recitals in the certificate of title. The subject
matter of the controversy having been passed to an innocent purchaser for value, the execution of
the absolute deed of sale in favor of the Ventanillas could not be ordered by the trial court. Yet the
court ruled in favor of the Vetanillas. As it turned out, the execution of the judgment in favor of the
Ventanillas was yet far from fruition. Samuel Cleofe, Register of Deeds for Quezon City (ROD Cleofe)
revealed to them, that on March 11, 1992, MRCI registered a deed of absolute sale to Marquez who
eventually sold the same property to the Saberons, which conveyance was registered in July 1992.
ROD Cleofe opined that a judicial order for the cancellation of the titles in the name of the Saberons
was essential before he complied with the writ of execution in Civil Case No. 26411. Apparently, the
notice of levy, through inadvertence, was not carried over to the title issued to Marquez, the same
being a junior encumbrance which was entered after the contract to sell to Marquez had already
been annotated.

Once again, the Ventanillas were constrained to go to court to seek the annulment of the deed of
sale executed between MRCI and Marquez as well as the deed of sale between Marquez and the
Saberons, as the fruits of void conveyances. RTC ruled in favor of the Ventanillas

Meanwhile, the Saberons filed a case in the CA relying on one central argument—that they were
purchasers in good faith, having relied on the correctness of the certificates of title covering the lots
in question; and therefore, holders of a valid and indefeasible title. CA ruled in favor of the
Ventanillas. The Saberons filed the present petition.

Unknown to the Saberons, the former owner of the properties had entered into contracts to sell with
the Ventanillas, way back in 1970. It was only upon receipt of the summons in the case filed by the
Ventanillas with the RTC that they learned of the present controversy.

With the RTC and the CA rulings against their title over the properties, the Saberons now come to
the Court with their vehement insistence that they were purchasers in good faith and for value. Before
purchasing the lots, they exercised due diligence and found no encumbrance or annotations on the
titles. At the same time, the Ventanillas also failed to rebut the presumption of their good faith as
there was no showing that they confederated with MRCI and its officers to deprive the Ventanillas of
their right over the subject properties.

According to the Saberons, the CA likewise erred in ruling that there was no constructive notice of
the levy made upon the subject lands.

Issue:

Whether or not there was constructive notice of levy as an encumbrance prior to the sale to the
Saberons.

Ruling:

the Court is beckoned to rule on two conflicting rights over the subject properties: the right of the
Ventanillas to acquire the title to the registered land from the moment of inscription of the notice of
levy on the day book (or entry book), on one hand; and the right of the Saberons to rely on what
appears on the certificate of title for purposes of voluntary dealings with the same parcel of land, on
the other.

The Saberons could not be said to have authored the entanglement they found themselves in. No
fault can be attributed to them for relying on the face of the title presented by Marquez. In ultimately
ruling for the Ventanillas, the courts a quo focused on the superiority of their notice of levy and the
constructive notice against the whole world which it had produced and which effectively bound third
persons including the Saberons.

This complex situation could have been avoided if it were not for the failure of ROD Cleofe to carry
over the notice of levy to Marquez’s title, serving as a senior encumbrance that might have dissuaded
the Saberons from purchasing the properties.

It is undeniable, therefore, that no title was transferred to Marquez upon the annotation of the contract
to sell on MRCI’s title. As correctly found by the trial court, the contract to sell cannot be substituted
by the Deed of Absolute Sale as a "mere conclusion" of the previous contract since the owners of
the properties under the two instruments are different. Considering that the deed of sale in favor of
Marquez was of later registration, the notice of levy should have been carried over to the title as a
senior encumbrance.

The fact that the notice of levy on attachment was not annotated on the original title on file in the
Registry of Deeds, which resulted in its non-annotation on the title TCT No. PT-94912, should not
prejudice petitioner. As long as the requisites required by law in order to effect attachment are
complied with and the appropriate fees duly paid, attachment is duly perfected. The attachment
already binds the land. This is because what remains to be done lies not within the petitioner’s power
to perform but is a duty incumbent solely on the Register of Deeds.

In the case at bench, the notice of levy covering the subject property was annotated in the entry book
of the ROD QC prior to the issuance of a TCT in the name of the Saberons. Clearly, the Ventanillas’
levy was placed on record prior to the sale. This shows the superiority and preference in rights of
the Ventanillas over the property as against the Saberons.
Real Estate Mortgage (Sec. 60)
(GR 128354)
HOME BANKERS SAVINGS & TRUST CO., petitioner v s .
THE HONORABLE COURT OF APPEALS, PABLO N. AREVALO, FRANCISCO A. UY,
SPOUSES LEANDRO A. SORIANO, JR. and LILIAN SORIANO, A. UY, SPOUSES LEANDRO
A. SORIANO, JR. and LILIAN SORIANO, ALFREDO LIM and FELISA CHI LIM/ALFREDO LIM

Facts:
Each of private respondents namely, Pablo Arevalo, Francisco Uy, spouses Leandro A.
Soriano, Jr. and Lilian Soriano, Alfredo Lim, entered into separate contracts to sell with
TransAmerican Sales and Exposition (TransAmerican) through the latter's Owner/General Manager,
Engr. Jesus Garcia, involving certain portions of land covered by Transfer Certificate of Title (TCT)
No. 19155, located at Quezon City, together with one unit three-storey townhouse to be built on each
portion.

It is stipulated in their respective contracts that their individual townhouses will be fully completed
and constructed as per plans and the respective titles thereto shall be delivered and transferred to
private respondents free from all liens and encumbrances upon their full payment of the purchase
price. However, despite repeated demands, Garcia/TransAmerican failed to comply with their
undertakings

On May 30, 1989, Engr. Garcia and his wife Lorelie Garcia obtained from petitioner Home Bankers
Savings and Trust Company a loan in the amount of P4,000,000.00 and without the prior approval
of the Housing and Land Use Regulatory Board (HLURB), the spouses mortgaged eight lots covered
by TCT Nos. 3349 to 3356 as collateral. Petitioner registered its mortgage on these titles without any
other encumbrance or lien annotated therein. However, five out of these eight titles turned out to be
private respondents' townhouses subject of the contracts to sell with Garcia/TransAmerican

When the loan became due, Garcia failed to pay his obligation to petitioner. Consequently, petitioner
instituted an extrajudicial foreclosure on the subject lots and being the highest bidder in the public
auction, a certificate of sale in its favor was issued by the sheriff on February 26, 1990. Subsequently,
the sheriff's certificate of sale was registered and annotated on the titles of the subject lots in the
Register of Deeds of Quezon City.

On November 8, 1990, private respondents filed a complaint with the Office of Appeals, Adjudication
and Legal Affairs (OAALA), HLURB, against Garcia/TransAmerican as seller/developer of the
property and petitioner, as indispensable party, for non-delivery of titles and non-completion of the
subdivision project

Petitioner filed its Answer contending that private respondents have no cause of action against it;
that at the time of the loan application and execution of the promissory note and real estate mortgage
by Garcia, there were no known individual buyers of the subject land nor annotation of any contracts,
liens or encumbrances of third persons on the titles of the subject lots; that the loan was granted and
released without notifying HLURB as it was not necessary.

On August 16, 1991, OAALA rendered its Decision in favor of respondents Petitioner filed a petition
for review with the CA which, in the herein assailed decision dated November 28 1996, denied the
petition and affirmed the decision of the Office of the President.
Issue:
W/N HLURB has jurisdiction to nullify the mortgage
W/N the mortgage was invalid and unenforceable against respondents

Ruling:
The argument is untenable
HLURB has jurisdiction to declare invalid the mortgage contract executed between
Garcia/TransAmerican and petitioner over the subject lots insofar as private respondents are
concerned. It correctly relied on Union Bank of the Philippines vs .HLURB,et al . where we squarely
ruled on the question of HLURB's jurisdiction to hear and decide a condominium buyer's complaint
for: (a) annulment of a real estate mortgage constituted by the project owner without the consent of
the buyer and without the prior written approval of the NHA; (b) annulment of the foreclosure sale;
and (c) annulment of the condominium certificate of title that was issued to the highest bidder at the
foreclosure sale

xxx xxx xxx


We hold that the jurisdiction of the HLURB to regulate the real estate trade is broad enough to include
jurisdiction over complaints for specific performance of the sale, or annulment of the mortgage, of a
condominium unit, with damages
Xxx xxx xxx

Furthermore, contrary to petitioner's claim that there were no buyers of the subject lots at the time
of the constitution of the mortgage, records show that private respondents Arevalo, Uy, Alfredo Lim
and Santos Lim had entered into contracts to sell with Garcia/TransAmerican as early as 1988 for
their respective lots. Subdivision lots which as defined under Section 2(e) of P.D. No. 957 to mean
any of the lots, whether residential, commercial, industrial, or recreational in a subdivision project
are entitled to the protection of P.D. No. 957.

Under Section 18 of P.D. No. 957, it is provided that no mortgage on any unit or lot shall be made
by the owner or developer without prior written approval of the authority. Such approval shall not be
granted unless it is shown that the proceeds of the mortgage loan shall be used for the development
of the condominium or subdivision project and effective measures have been provided to ensure
such utilization.

Notwithstanding that petitioner became the owner of the subject lots by being the highest bidder in
the extrajudicial foreclosure sale, it must be remembered that it was first a mortgagee of the same.
Since the lot was mortgaged in violation of Section 18 of P.D. No. 957, HLURB has jurisdiction to
declare the mortgage void insofar as private respondents are concerned and to annul the foreclosure
sale

Lastly, Petitioner cannot be innocent purchasers because judicial notice can be taken of the uniform
practice of banks to investigate, examine and assess the real estate offered as security for the
application of a loan. We cannot overemphasize the fact that the Bank cannot barefacedly argue
that simply because the title or titles offered as security were clean of any encumbrances or lien, that
it was thereby relieved of taking any other step to verify the over-reaching implications should the
subdivision be auctioned on foreclosure.
DELA MERCED v GSIS
GR 167140, Nov 23, 2011

FACTS:
This case involves five registered parcels of land located within the Antonio Subdivision, Pasig City Lots 6, 7,
8, and 10 of Block 2 and Lot 8 of Block 8 (subject properties)originally owned by, and titled in the name of,
Jose C. Zulueta (Zulueta), as evidenced by Transfer Certificate of Title (TCT) No. 26105. It contains several
lots, other than the subject properties, within the Antonio Subdivision.

The Zulueta spouses mortgaged several lots contained in TCT No. 26105 to the GSIS, which eventually
foreclosed on the mortgaged properties, including the subject properties. Upon consolidation of GSISs
ownership, TCT No. 26105 in Zuluetas name was cancelled, and TCT No. 23554was issued in GSISs name.

Upon learning of the foreclosure, petitioners predecessor, Francisco Dela Merced (Dela Merced) filed a
complaintpraying for the nullity of the GSIS foreclosure on the subject properties (Lots 6, 7, 8, and 10 of Block
2 and Lot 8 of Block 8) on the ground that he, not the Zuluetas, was the owner of these lots at the time of the
foreclosure.Dela Merced also impleaded Victor and Milagros Manlongatwho were claiming Lot 6, Block 2 by
virtue of a sale executed by the GSIS in their daughters (Elizabeth Manlongat) favor. Dela Merced caused
the annotation of lispendenson GSISs TCT No. 23554 on September 21, 1984 in order to protect his interests
in the subject properties.

RTC ruled in favor of the petitioners. CA ruled in favor of the respondent.

ISSUE/S: (1) Whether or not the GSIS can still raise the issue of exemption
(2) Whether or a final and executory judgment against GSIS and Manlongat can be enforced
against their successors-in-interest or holders of derivative titles.
(3) Whether an order to cancel title to a particular property includes an order to provide technical
descriptions and segregate it from its mother title

RULING: SC ruled in favor of the petitioners.


(1) The issue of GSIS’ alleged exemption under RA 8291 had been finally decided against when this
Court denied GSIS’ petition for review.
-GSIS’ attempt to resurrect the same issue by interjecting the same in this proceeding is barred by
the principle of “law of the case” which states that “determinations of questions of law will generally
be held to govern a case throughout all its subsequent cases where such determination has already
been made on a prior appeal to a court of last resort.”

(2) A notice of lispendens is an announcement to the whole world that a particular real property is in
litigation, serving as a warning that one who acquires an interest over said property does so at his
own risk, or that he gambles on the result of the litigation over said property.
-The current holders of the derivative titles where aware of the annotation of lispendens when the
titles were issued to them. Both were bound by the outcome of the litigation.

(3) Whether these titles are individual or contained in a mother title is of no consequence. The RD has
to cause their cancellation. If the cancellation can only be carried out by requiring GSIS or the Bureau
of Lands to provide the necessary information, then they can be compelled to do so. Otherwise, the
Courts decision would be rendered inefficacious, and GSIS would retain ostensible ownership over
the lots by the simple expedience that they are included in a mother title, instead of individual
titles. That result is manifestly contrary to the Courts ruling and would subvert the very purpose of
bringing this case for a complete resolution.
ERENA v QUERRER –KAUFMAN
GR 165853, June 22, 2006

FACTS:
Vida Dana Querrer-Kauffman is the owner of a residential lot with a house constructed thereon.
The owner’s duplicate copy of the title as well as the tax declaration covering the property, were
kept in a safety deposit box in the house. She went to the US and entrusted the key to the safety
deposit box to Victor, her live-in partner and the latter entrusted to his sister Bernal the key when
the latter went to the US as well.
However, the owner’s duplicate title and the tax declarationswent missing. She and her sister
Pares went to the Register of Deeds of Las Piñas City and found out that the lot had been
mortgaged to RosanaEreña on August 1, 1997. It appeared that a "Vida Dana F. Querrer" had
signed the Real Estate Mortgage as owner-mortgagor,together with Victor’s daughter Jennifer V.
Ramirez, as attorney-in-fact.

Kauffman filed a complaint against Ereña, Bernal and Jennifer Ramirez for Nullification of Deed of
Real Estate Mortgage and Damages with prayer for a Temporary Restraining Order and
Preliminary Mandatory Injunctionin the RTC of Las Piñas City.

Ereña interposed the defense of being a mortgagee in good faith. She likewise interposed a cross-
claim against Bernal and Jennifer Ramirez for the refund of the P250,000.00 she loaned to "Vida
Dana Querrer."

Kaufman alleged that the signature in the real estate mortgage contract was a forgery. RTC ruled
in favor of the defendants and dismissed Kaufman’s complaint. Although the plaintiff adduced proof
that she owned the property and that her signatures on the Special Power of Attorney and in the
Real Estate Mortgage were forged, nevertheless, defendant Ereña adduced evidence that she was
a mortgagee in good faith.

CA ruled in favor of Kaufman. It held that in ruling as it did, the RTC disregarded the clear
provisions of the Civil Code, particularly Articles 2085 (2)and 1409 (2) The appellate court relied on
the Court’s ruling in Insurance Services & Commercial Traders, Inc. v. Court of Appealsand
ratiocinated, thus:it has been uniformly held that (I)n a real estate mortgage contract, it is essential
that the mortgagor be the absolute owner of the property to be mortgaged; otherwise, the
mortgage is void.

ISSUE/S: (1) Whether or not the real estate mortgage is void

(2) Whether or not the petitioner is a mortgagee in good faith

RULING: SC ruled in favor of respondent Kaufman.

(1) Indeed, the trial and appellate courts found that respondent, as plaintiff below, adduced
clear and convincing evidence that she is the owner of the property and that the signature
on the Special Power of Attorney and Real Estate Mortgage are not her genuine
signatures. When respondent and her sister, Evelyn Pares, confronted Mira Bernal
(Jennifer Ramirez’s aunt), Bernal pleaded for mercy, on bended knees, after admitting that
she and Jennifer Ramirez stole the owner’s duplicate copy of the title and the tax
declarations covering the property impliedly admitted that they forged the respondent’s
signature on the Real Estate Mortgage.

One of the essential requisites of a mortgage contract is that the mortgagor must be the
absolute owner of the thing mortgaged. A mortgage is, thus, invalid if the mortgagor is not
the property owner. In this case, the trial court and the CA are one in finding that based on
the evidence on record the owner of the property is respondent who was not the one who
mortgaged the same to the petitioner.

(2) The trial court wrongly applied in this case the doctrine of "mortgagee in good faith" which
has been allowed in many instances but in a milieu dissimilar from this case. This doctrine
is based on the rule that persons dealing with properties covered by a Torrens certificate of
title are not required to go beyond what appears on the face of the title. But this is only in a
situation where the mortgagor has a fraudulent or otherwise defective title, but not when the
mortgagor is an impostor and a forger.

This last proviso in Sec. 55 of the Land Registration Act is a limitation of the first part of par.
2 in the sense that in order that the holder of a certificate for value issued by virtue of the
registration of a voluntary instrument may be considered a holder in good faith for value,
the instrument registered should not be forged. When the instrument presented is forged,
even if accompanied by the owner’s duplicate certificate of title, the registered owner does
not thereby lose his title, and neither does the assignee in the forged deed acquire any right
or title to the property.
V. Sale Involving Real Estate

Esguerra v. Trinidad
G.R. No. 169890, 12 March 2007

Facts:

Involved in the present controversy are two parcels of land located in Camalig, Meycauayan, Bulacan.
The Esguerra spouses, owners of the disputed parcels, executed a Deed of Sale in favor of petitioners on
August 11, 1937, and that in favor of Eulalio and Julian Trinidad on August 17, 1937.

Eulalio Trinidad later sold his share of the land to his daughters-respondents herein, via a notarized
Kasulatan ng BilihangTuluyan ng Lupa dated October 13, 1965.Meanwhile, under a notarized Bilihan ng Lupa
dated November 10, 1958, petitioners sold to respondents' parents Eulalio Trinidad and Damiana Rodeadilla
(Trinidad spouses) a portion of about 5,000 square meters of the 23,489-square meter of land which they
previously acquired from the Esguerra spouses.

During a cadastral survey conducted in the late 1960s, it was discovered that the about 5,000-square
meter portion of petitioners' parcel of land which was assigned Lot No. 3591 sold to the Trinidad spouses
actually measured 6,268 square meters.

In a subsequent application for registration of title over Lot No. 3591, the CFI, by Decision of August
21, 1972, awarded Lot No. 3591 in favor of Eulalio Trinidad. Pursuant to the Decision, the LRC issued Decree
No. N-149491 by virtue of which the Register of Deeds of Bulacan issued OCT No. 0-6498 in the name of
Trinidad. Upon the death of the Trinidad spouses, Lot No. 3591 covered by OCT No. 0-6498 was transmitted
to respondents by succession.

Petitioners, alleging that upon verification with the LRA they discovered the issuance of the above-
stated two OCTs, filed on August 29, 1994 before the Regional Trial Court (RTC) of Malolos, Bulacan two
separate complaints for their nullification on the ground that they were procured through fraud or
misrepresentation. Moreover, while petitioners admittedly sold Lot No. 3591 to the Trinidad spouses, they
contend that what they sold were only 5,000 square meters and not 6,268 square meters, and thus claim the
excess of 1,268 square meters.

Issues:

1. Whether or not the act of the respondent Eulalio Trinidad in acquiring the property from Felipe
Esguerra constituted fraud;
2. Whether or not the provisions of Article 1542 of the Civil Code were properly applied; and
3. Whether or not prescription and res judicata apply.

Ruling:

1. No, the act of the respondent Eulalio Trinidad in acquiring the property from Felipe Esguerra did not
constitute fraud.

In the present cases, as did the trial court, the appellate court found no fraud in respondents'
acquisition and registration of the land. Factual findings of the trial court, when affirmed by the Court of Appeals,
are final, conclusive and binding on this Court.

Under the Torrens System, an OCT enjoys a presumption of validity, which correlatively carries a
strong presumption that the provisions of the law governing the registration of land which led to its issuance
have been duly followed. Fraud being a serious charge, it must be supported by clear and convincing proof.
Petitioners failed to discharge the burden of proof, however.

2. Yes, the provisions of Article 1542 of the New Civil Code were properly applied.

In the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure
or number, there shall be no increase or decrease of the price, although there be a greater or less areas or
number than that stated in the contract. The lower courts correctly characterized the sale of Lot No. 3591 as
one involving a lump sum contract. The Bilihan ng Lupa shows that the parties agreed on the purchase price
of P1,000.00 on a predetermined, albeit unsurveyed, area of 5,000 square meters and not on a particular rate
per unit area. As noted by the Court of Appeals, the identity of the realty was sufficiently described.
Under Article 1542, what is controlling is the entire land included within the boundaries, regardless of
whether the real area should be greater or smaller than that recited in the deed. Though measured as 5,000
square meters, more or less, such measurement is only an approximation, and not an exact measurement.
Moreover, we take note of the fact that the said deed of sale mentioned the boundaries covering the whole
area of 33,489 square meters, including the "bahagingpalayan." Had appellants intended to sell only a portion
of the "bahagingpalayan," they could have stated the specific area in the deed of sale and not the entire
"bahagingpalayan".

3. Yes, prescription and res judicata apply.

It is a fundamental principle in land registration that a certificate of title serves as evidence of an


indefeasible and incontrovertible title to the property in favor of the person whose name appears therein. Such
indefeasibility commences after the lapse or expiration of one year from the date of entry of the decree of
registration when all persons are considered to have a constructive notice of the title to the property. After the
lapse of one year, therefore, title to the property can no longer be contested.

Even assuming that petitioners' actions are in the nature of a suit for quieting of title, which is
imprescriptible, the actions still necessarily fail since petitioners failed to establish the existence of fraud.

Del Prado v. Caballero

G.R. No. 148225, 3 March 2010

Facts:

Spouses Antonio L. Caballero and Leonarda B. Caballero obtained a favorable judgment over several
parcels of land situated in Guba, Cebu City, one of which was Cadastral Lot No.11909, the subject of this
controversy. Consequently, on May 25, 1987, the same court, ordered the National Land Titles and Deeds
Registration Administration to issue the decree of registration and the corresponding titles of the lots in favor
of the Caballeros.

On June 11, 1990, respondents sold to petitioner, Carmen del Prado, Lot No. 11909 on the basis of
the tax declaration covering the property. On March 20, 1991, petitioner filed in the same cadastral proceedings
a "Petition for Registration of Document Under Presidential Decree (P.D.) 1529" in order that a certificate of
title be issued in her name, covering the whole Lot No. 11909. In the petition, petitioner alleged that the tenor
of the instrument of sale indicated that the sale was for a lump sum or cuerpocierto, in which case, the vendor
was bound to deliver all that was included within said boundaries even when it exceeded the area specified in
the contract. Respondents opposed, on the main ground that only 4,000 sqm of Lot No. 11909 was sold to
petitioner. They claimed that the sale was not for a cuerpocierto. They moved for the outright dismissal of the
petition on grounds of prescription and lack of jurisdiction.

After trial on the merits, the RTC found that petitioner had established a clear and positive right to Lot
No. 11909. The intended sale between the parties was for a lump sum, since there was no evidence presented
that the property was sold for a price per unit. The CA, however, promulgated the assailed decision, reversing
and setting aside the decision of the RTC.

Issue:

Whether or not the sale of the land was for a lump sum or not.

Ruling:

In sales involving real estate, the parties may choose between two types of pricing agreement: a unit
price contract wherein the purchase price is determined by way of reference to a stated rate per unit area (e.g.,
P1,000 per square meter), or a lump sum contract which states a full purchase price for an immovable the
area of which may be declared based on the estimate or where both the area and boundaries are stated (e.g.,
P1 million for 1,000 square meters, etc.).

However, the rule laid down in Article 1542 is not hard and fast and admits of an exception. The use
of "more or less" or similar words in designating quantity covers only a reasonable excess or deficiency. A
vendee of land sold in gross or with the description "more or less" with reference to its area does not thereby
ipso facto take all risk of quantity in the land. Numerical data are not of course the sole gauge of
unreasonableness of the excess or deficiency in area. Courts must consider a host of other factors.

In the instant case, the deed of sale is not one of a unit price contract. The parties agreed on the
purchase price of P40,000.00 for a predetermined area of 4,000 sq m, more or less, bounded on the North by
Lot No. 11903, on the East by Lot No. 11908, on the South by Lot Nos. 11858 & 11912, and on the West by
Lot No. 11910. In a contract of sale of land in a mass, the specific boundaries stated in the contract must
control over any other statement, with respect to the area contained within its boundaries.

Clearly, the discrepancy of 10,475 sq m cannot be considered a slight difference in quantity. The
difference in the area is obviously sizeable and too substantial to be overlooked. It is not a reasonable excess
or deficiency that should be deemed included in the deed of sale.
VI. CAVEAT EMPTOR PRINCIPLE
Sy v. Capistrano
G.R. No. 154450, July 28, 2008
Facts:
Sometime in 1980, Nenita Scott (Scott) approached respondent Nicolas Capistrano, Jr. (Capistrano) and
offered her services to help him sell his 13,785 square meters of land covered by Transfer Certificate of Title
(TCT) No. 76496 of the Register of Deeds of Caloocan City. Capistrano gave her a temporary authority to
sell which expired without any sale transaction being made. To his shock, he discovered later that TCT No.
76496, which was in his name, had already been cancelled on June 24, 1992 and a new one, TCT No.
249959, issued over the same property on the same date to Josefina A. Jamilar. TCT No. 249959 likewise
had already been cancelled and replaced by three (3) TCTs (Nos. 251524, 251525, and 251526), all in the
names of the Jamilar spouses. TCT Nos. 251524 and 251526 had also been cancelled and replaced by TCT
Nos. 262286 and 262287 issued to Nelson Golpeo and John B. Tan, respectively.

Capistrano further discovered that on March 9,1980, he purportedly executed in favor of Scott two deeds of
sale and a Deed of Absolute Sale was allegedly executed by Scott in favor of the Jamilar spouses on May
17, 1990. Although the deed in favor of Scott states that it was executed on March 9, 1980, the annotation
thereof at the back of TCT No. 76496 states that the date of the instrument is March 9, 1990. Even if there
was no direct sale from Capistrano to Jamilar, the transfer of title was made directly to the latter. No TCT
was issued in favor of Scott. The issuance of TCT No. 249959 in favor of Jamilar was with the help of
Joseph Sy, who provided for (sic) money for the payment of the capital gains tax, documentary stamps,
transfer fees and other expenses of registration of the deeds of sale. On July 8, 1992, an Affidavit of
Adverse Claim was annotated at the back of Jamilar’s TCT No. 249959 at the instance of Sy, Golpeo, and
Tan under a Contract to Sell in their favor by the Jamilar spouses. Said contract was executed sometime in
May, 1992 when the title to the property was still in the name of Capistrano. On January 26, 1993, a
Deed of Absolute Sale was executed by the Jamilars and the Gilturas, in favor of Golpeo and Tan. Thus,
TCT Nos. 251524 and 251526 were cancelled and TCT Nos. 262286 and 262287 were issued to Golpeo
and Tan, respectively. TCT No. 251525 remained in the name of Jamilar.

Thus, the action for reconveyance filed by Capistrano, alleging that his and his wife’s signatures on the
purported deed of absolute sale in favor of Scott were forgeries; that the owner’s duplicate copy of TCT No.
76496 in his name had always been in his possession; and that Scott, the Jamilar spouses, Golpeo, and Tan
were not innocent purchasers for value because they all participated in defrauding him of his property.

The Jamilar spouses denied the allegations in the complaint and claimed that Capistrano had no cause of
action against them, as there was no privity of transaction between them; the issuance of TCT No. 249959 in
their names was proper, valid, and legal; and that Capistrano was in estoppel. By way of counterclaim while
Sy, Golpeo, and Tan denied the allegations in the complaint and alleged that Capistrano had no cause of
action against them; that at the time they bought the property from the Jamilars and the Gilturas as
unregistered owners, there was nothing in the certificates of title that would indicate any vice in its
ownership; that a buyer in good faith of a registered realty need not look beyond the Torrens title to search
for any defect; and that they were innocent purchasers of the land for value.

Issue:
Whether or not the petitioners and the Jamilar spouses are innocent purchasers for value
Ruling:
No, they are not innocent purchasers for value. In finding that the Jamilar spouses were not innocent
purchasers for value of the subject property, the CA properly held that they should have known that the
signatures of Scott and Capistrano were forgeries due to the patent variance of the signatures in the two
deeds of sale shown to them by Scott, when Scott presented to them the deeds of sale, one allegedly
executed by Capistrano in her favor covering his property; and the other allegedly executed by Scott in favor
of Capistrano over her property, the P40,000.00 consideration for which ostensibly constituted her initial and
partial payment for the sale of Capistrano’s property to her.

The CA also correctly found the Gilturas not innocent purchasers for value, because they failed to check the
veracity of the allegation of Jamilar that he acquired the property from Capistrano.
In ruling that Sy was not an innocent purchaser for value, we share the observation of the appellate court
that Sy knew that the title to the property was still in the name of Capistrano, but failed to verify the claim of
the Jamilar spouses regarding the transfer of ownership of the property by asking for the copies of the deeds
of absolute sale between Capistrano and Scott, and between Scott and Jamilar. Sy should have likewise
inquired why the Gilturas had to affix their conformity to the contract to sell by asking for a copy of the deed
of sale between the Jamilars and the Gilturas. Had Sy done so, he would have learned that the Jamilars
claimed that they purchased the property from Capistrano and not from Scott.

Notable likewise is that the owner’s duplicate copy of TCT No. 76496 in the name of Capistrano had always
been in his possession since he gave Scott only a photocopy thereof pursuant to the latter’s authority to look
for a buyer of the property. On the other hand, the Jamilars were able to acquire a new owner’s duplicate
copy thereof by filing an affidavit of loss and a petition for the issuance of another owner’s duplicate copy of
TCT No. 76496. The minimum requirement of a good faith buyer is that the vendee of the real property
should at least see the owner’s duplicate copy of the title.6 A person who deals with registered land through
someone who is not the registered owner is expected to look beyond the certificate of title and examine all
the factual circumstances thereof in order to determine if the vendor has the capacity to transfer any interest
in the land. He has the duty to ascertain the identity of the person with whom he is dealing and the latter’s
legal authority to convey

Domingo Realty, Inc and Ayala Steel Manufacturing Co., Inc.,v. Court of Appeals and Antonio Acero
G.R. No. 126236. January 26, 2007
Facts:
Petitioner Domingo Realty filed its November 15, 1981 Complaint with the Pasay City RTC against Antonio
M. Acero, who conducted business under the firm name A.M. Acero Trading, David Victorio, John Doe, and
Peter Doe, for recovery of possession of three (3) parcels of land located in Cupang, Muntinlupa, Metro
Manila, covered by (1) Transfer Certificate of Title (TCT) No. (75600) S-107639-Land Records of Rizal; (2)
TCT No. (67006) S-107640-Land Records of Rizal; and (3) TCT No. (67007) S-107643-Land Records of
Rizal (the subject properties). The said lots have an aggregate area of 26,705 square meters, more or less,
on a portion of which Acero had constructed a factory building for the manufacture of hollow blocks, as
alleged by Domingo Realty.
On January 4, 1982, defendants Acero and Victorio filed their December 21, 1981 Answer to the Complaint
in Civil Case No. 9581-P. Acero alleged that he merely leased the land from his co-defendant David Victorio,
who, in turn, claimed to own the property on which the hollow blocks factory of Acero stood. In the Answer,
Victorio assailed the validity of the TCTs of Domingo Realty, alleging that the said TCTs emanated from
spurious deeds of sale, and claimed that he and his predecessors-in-interest had been in possession of the
property for more than 70 years.
In a compromise agreement between the parties, Acero admits that the property he is presently occupying
by way of lease is encroaching on a portion of the property of the plaintiff and assume[s] and undertakes to
vacate, remove and clear any and all structures erected inside the property of the plaintiff by himself and
other third parties, duly authorized and/or who have an existing agreement with defendant Acero, and shall
deliver said portion of the property of the plaintiff free and clear of any unauthorized structures, shanties,
occupants, squatters or lessees within a period of sixty (60) days from date of signing of this compromise
agreement.
To implement the said Decision, Domingo Realty filed its January 21, 1988Motion asking the trial court
for permission to conduct a re-survey of the subject properties, which was granted in the January 22,
1988 Order. On February 2, 1988, respondent Acero filed his January 29, 1988 Motion to Nullify the
Compromise Agreement,[claiming that the January 22, 1988 Order authorizing the survey plan of petitioner
Domingo Realty as the basis of a resurvey would violate the Compromise Agreement since the whole area he
occupied would be adjudged as owned by the realty firm.

In its December 28, 1990 Order, the trial court directed Acero to conduct his own re-survey of the lots based
on the technical description appearing in the TCTs of Domingo Realty and to have the re-survey plans
approved by the Bureau of Lands. The Order resulted from Aceros contention that he occupied only 2,000
square meters of petitioners property. Acero employed the services of Engr. Eligio L. Cruz who came up with
Verification Survey Plan No. Vs-13-000185. However, when the said Verification Survey Plan was presented
to the Bureau of Lands for approval, it was rejected because Engr. Cruz failed to comply with the requirements
of the Bureau.

On January 6, 1992, respondent filed an undated Manifestation claiming, among others, that it was on record
that the Compromise Agreement was only as to a portion of the land being occupied by respondent, which is
about 2,000 square meters, more or less. He reiterated the same contentions in his December 21,
1991 Manifestation.

On January 13, 1992, respondent filed a Motion to Modify Order Dated 6 December 91, claiming that the said
Order modified the Compromise Agreement considering that it allegedly involved only 1,357 square meters
and not the entire lot; and if not amended, the Order would deviate from the principle that no man shall enrich
himself at the expense of the other.

Issues:
Whether or not the adjudged property should be adjudicated to Acero

Ruling:
No, it should not the adjudged to Acero. The court does not have the power to make or alter contracts in
order to save him from the adverse stipulations in the Compromise Agreement. Hopefully this case will serve
as a precaution to prospective parties to a contract involving titled lands for them to exercise the diligence of
a reasonably prudent person by undertaking measures to ensure the legality of the title and the accurate
metes and bounds of the lot embraced in the title. It is advisable that such parties (1) verify the origin,
history, authenticity, and validity of the title with the Office of the Register of Deeds and the Land Registration
Authority; (2) engage the services of a competent and reliable geodetic engineer to verify the boundary,
metes, and bounds of the lot subject of said title based on the technical description in the said title and the
approved survey plan in the Land Management Bureau; (3) conduct an actual ocular inspection of the lot; (4)
inquire from the owners and possessors of adjoining lots with respect to the true and legal ownership of the
lot in question; (5) put up signs that said lot is being purchased, leased, or encumbered; and (6) undertake
such other measures to make the general public aware that said lot will be subject to alienation, lease, or
encumbrance by the parties.

Topic: ADVERSE CLAIMS (SEC. 70)


Sajonas v. CA, Pilares, Garcia & Register of Deeds
G. R. No. 102377. July 5, 1996

Facts:In 1983, the spouses Ernesto Uychocde and LucitaJarin agreed to sell a parcel of
residential land located in Antipolo, Rizal to the spouses Alfredo and ConchitaSajonas on
installment basis as evidenced by a Contract to Sell.

In 1984, petitioners Sajonas caused the annotation of an adverse claim based on the said
Contract to Sell on the title of the subject property, which was inscribed as Entry No.
116017. Upon full payment of the purchase price, the Uychocdes executed a Deed of Sale
involving the property in question in favor of the Sajonas couple on September 4, 1984. The
deed of absolute sale was registered almost a year after, or on August 28, 1985.

Meanwhile, defendant-appellant Domingo Pilares filed a case for collection of sum of money
against Ernesto Uychocde. In 1980, a Compromise Agreement was entered into by the
parties in the said case under which Ernesto Uychocde acknowledged his monetary
obligation to Domingo Pilares amounting to P27,800 and agreed to pay the same in two
years. When Uychocde failed to comply with his undertaking in the compromise agreement,
defendant-appellant Pilares moved for the issuance of a writ of execution to enforce the
decision based on the compromise agreement, which the court granted in its order in 1982.

Pursuant to the order of execution in 1982, a notice of levy on execution was issued in 1985.
Defendant sheriff Roberto Garcia of Quezon City presented said notice of levy on execution
before the Register of Deeds of Marikina and the same was annotated at the back of TCT
No. 79073 as Entry No. 123283.

When the deed of absolute sale dated in 1984 was registered in 1985, TCT No. N-79073
was cancelled and in lieu thereof, TCT No. N-109417 was issued in the name of the Sajonas
couple. The notice of levy on execution annotated by defendant sheriff was carried over to
the new title.

In 1985, spousesSajonas filed a Third Party Claim with the sheriff of Quezon City, hence
the auction sale of the subject property did not push through as scheduled. In 1986, the
Sajonas spouses demanded the cancellation of the notice of levy on execution upon
defendant-appellant Pilares, through a letter to their lawyer. Despite said demand,
defendant-appellant Pilares refused to cause the cancellation of said annotation. As a result,
spouses Sajonases filed a complaint in the RTC of Rizal against Pilares, the judgment
creditor of the Uychocdes.

The RTC found in favor of the Sajonas couple, and ordered the cancellation of the Notice of
Levy. The court finds that although the title of the subject matter of the Notice of Levy on
Execution was still in the name of the Spouses Uychocde when the same was annotated on
the said title, an earlier Affidavit of Adverse Claim was annotated on the same title by the
plaintiffs who earlier bought said property from the Uychocdes. It is a well settled rule in this
jurisdiction that actual notice of an adverse claim is equivalent to registration and
the subsequent registration of the Notice of Levy could not have any legal effect in any
respect on account of prior inscription of the adverse claim annotated on the title of the
Uychocdes.

The CA then reversed the RTC’s decision and upheld the annotation of the levy on execution
on the certificate of title. The CA stated, under the provisions of Section 70 of P.D. 1529, an
adverse claim shall be effective only for a period of thirty (30) days from the date of its
registration, after which it shall be without force and effect. Hence, the Sajonas couple filed
a Petition for Review on Certiorari in the SC.

Issues:
(1) Whether or not, under the provisions of Section 70 of P.D. 1529, an adverse claim ipso
facto lose force and effect after the lapse of 30 days?
(2) Who has a better right over the property in question?

Ruling:
(1)No. In construing the law aforesaid, care should be taken that every part thereof be given
effect and a construction that could render a provision inoperative should be avoided, and
inconsistent provisions should be reconciled whenever possible as parts of a harmonious
whole. For taken in solitude, a word or phrase might easily convey a meaning quite different
from the one actually intended and evident when a word or phrase is considered with those
with which it is associated. In ascertaining the period of effectivity of an inscription of adverse
claim, we must read the law in its entirety

Sentence three, paragraph two of Section 70 of P.D. 1529 provides:“The adverse claim shall
be effective for a period of thirty days from the date of registration.”At first blush, the provision
in question would seem to restrict the effectivity of the adverse claim to 30 days. But the
above provision cannot and should not be treated separately, but should be read in
relation to the sentence following, which reads:“After the lapse of said period, the
annotation of adverse claim may be cancelled upon filing of a verified petition therefor by
the party in interest.”

It should be noted that the law employs the phrase may be cancelled, which obviously
indicates, as inherent in its decision making power, that the court may or may not order the
cancellation of an adverse claim, notwithstanding such provision limiting the effectivity of an
adverse claim for 30 days from the date of registration. The court cannot be bound by such
period as it would be inconsistent with the very authority vested in it. A fortiori, the limitation
on the period of effectivity is immaterial in determining the validity or invalidity of an adverse
claim which is the principal issue to be decided in the court hearing. It will therefore depend
upon the evidence at a proper hearing for the court to determine whether it will order the
cancellation of the adverse claim or not.

To interpret the effectivity period of the adverse claim as absolute and without qualification
limited to 30 days defeats the very purpose for which the statute provides for the remedy of
an inscription of adverse claim, as the annotation of an adverse claim is a measure designed
to protect the interest of a person over a piece of real property where the registration of such
interest or right is not otherwise provided for by the Land Registration Act or Act 496 (now
P.D. 1529 or the Property Registration Decree), and serves as a warning to third parties
dealing with said property that someone is claiming an interest or the same or a better right
than the registered owner thereof.

If the rationale of the law was for the adverse claim to ipso facto lose force and effect after
the lapse of 30 days, then it would not have been necessary to include the foregoing caveat
to clarify and complete the rule. For then, no adverse claim need be cancelled. If it has been
automatically terminated by mere lapse of time, the law would not have required the party
in interest to do a useless act.The law, taken together, simply means that
thecancellation of the adverse claim is still necessary to render it ineffective,
otherwise, the inscription will remain annotated and shall continue as a lien upon the
property.

To hold otherwise would be to deprive petitioners of their property, who waited a long time
to complete payments on their property, convinced that their interest was amply protected
by the inscribed adverse claim.

In sum, the disputed inscription of an adverse claim on the TCT No. N-79073 was still in
effect in 1985 when Quezon City Sheriff Roberto Garcia annotated the notice of levy on
execution thereto. Consequently, he is charged with knowledge that the property sought to
be levied upon the execution was encumbered by an interest the same as or better than that
of the registered owner thereof. Such notice of levy cannot prevail over the existing adverse
claim inscribed on the certificate of title in favor of the petitioners.

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

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

Decision of the CA is hereby REVERSED and SET ASIDE. The decision of the RTCfinding
for the cancellation of the notice of levy on execution is REINSTATED.
Sps. Rodriquez v. CA, Sps. Barrameda&Sps. Antonio and Calingo
G.R. No. 142687. July 20, 2006

Facts:Respondent Spouses Calingowere the registered owners of a house and lot located
inParañaque, Metro Manila. The property was mortgaged to the Development Bank of the
Philippines, which mortgage was later absorbed by the Home Mutual Development Fund
(HMDF) or Pag-ibig.

In 1992, respondents Calingo and respondent Spouses Barramedaentered into a contract


of sale with assumption of mortgage where the former sold to the latter the property in
question and the latter assumed to pay the outstanding loan balance to DBP.Respondents
Barrameda issued two checks in the amounts of P150,000andP528,539.76, for which
respondents Calingo issued a receipt dated April 24, 1992.

On May 29, 1992, respondents Barrameda filed with the Register of Deeds of Parañaque
an affidavit of adverse claim on the property. The adverse claim was inscribed at the back
of the certificate of title as Entry No. 3439.
On June 1, 1992, respondent Barrameda wrote HMDF, Mortgage and Loans Division
informing the office that they have purchased the subject property from the Calingo spouses
and that they filed a notice of adverse claim with the Register of Deeds of Parañaque. They
also sought assistance from said office as regards the procedure for the full settlement of
the loan arrearages and the transfer of the property in their names. The next day,
respondents Barrameda moved into the property.

On July 13, 1992, a notice of levy with attachment on real property by virtue of a writ of
execution was annotated at the back of the certificate of title of the property in questionin
connection with a Civil Case involving a claim by herein petitioners, Spouses Francisco and
Bernardina Rodriguez, against respondents Calingo. Judge Abad Santos issued the writ in
favor of petitioners Rodriguez.

On August 21, 1992, respondents Barrameda remitted to respondents Calingo the amount
of P364,992.07 to complete the payment of the agreed purchase price. Respondents
Calingo acknowledged receipt of said amount and waived all their rights to the property in
favor of the Barrameda spouses. They also guaranteed that the property was clear and free
from any liens and encumbrances, except the real estate mortgage assumed by
respondents Barrameda.

On November 9, 1992, respondents Barrameda found a Notice of Sheriff’s Sale posted on


their front gate, announcing the auction sale of their house and lot on December 3, 1992 at
10:00 in the morning.On November 20, 1992, respondents Barrameda served a Notice of
Third Party Claim upon Sheriff Manuel C. Dolor, accompanied by their affidavit of title.

On December 2, 1992, respondents Barrameda filed with the RTC of Makati a petition for
quieting of title with prayer for preliminary injunction. The petition prayed, among others, that
the execution sale of the property be enjoined, the notice of levy and attachment inscribed
on the certificate of title be cancelled, and that respondents Barrameda be declared the
lawful and sole owners of the property in question.

The trial court ruled in favor of herein petitioners and dismissed respondents Barrameda’s
petition for quieting of title. It ruled that the annotation of respondents Barrameda’s adverse
claim at the back of the certificate of title was insufficient to establish their claim over the
property. It said that respondents Barrameda, as buyers of the property, should have
registered the title in their names. Furthermore, respondents Barrameda’s adverse claim
had lost its efficacy after the lapse of thirty days in accordance with the provisions of the
Land Registration Act. The trial court also found that there was collusion between
respondents Barrameda and respondents Calingo to transfer the property to defraud third
parties who may have a claim against the Calingos.

The Court of Appeals, however, reversed the decision of the trial court. Citing the ruling
in Sajonas v. Court of Appeals,the appellate court held that respondents Barrameda’s
adverse claim inscribed on the certificate of title was still effective at the time the property
was levied on execution. The court held, therefore, that the notice of levy could not prevail
over respondents Barrameda’s adverse claim.Petitioners moved for a reconsideration of the
appellate court’s ruling, but the motion was denied.Hence, this petition.

Issue:Whether respondents Barrameda’s adverse claim on the property should prevail over
the levy on execution issued by another court in satisfaction of a judgment against
respondents Calingo?
Ruling:No. In the case at bar, the reason given for the non-registration of the deed of sale
with assumption of mortgage was that the owner’s duplicate copy of the certificate of title
was in the possession of HMDF. It was not shown, however, that either respondents
Barrameda or respondents Calingo exerted any effort to retrieve the owner’s duplicate copy
from the HMDF for the purpose of registering the deed of sale with assumption of mortgage.
In fact, the parties did not even seek to obtain the consent of, much less inform, the HMDF
of the sale of the property. This, despite the provision in the contract of mortgage prohibiting
the mortgagor (respondents Calingo) from selling or disposing the property without
the written consent of the mortgagee.

Respondents Calingo, as party to the contract of mortgage, are charged with the knowledge
of such provision and are bound to comply therewith. Apparently, there was haste in
disposing the property that respondents Calingo informed HMDF of the sale only on October
2, 1992 when they served a copy of their letter to said office regarding the transfer of the
property to respondents Barrameda. There was no reason for the parties’ failure to seek the
approval of the HMDF to the sale as it appears from the letter of respondent Angelica Paez-
Barrameda to HMDF that they were ready to pay in full the balance of the loan plus interest.
What is more suspect is that the judgment against respondents Calingo ordering them to
pay the petitioners the sum of P1,159,355.90 was rendered on January 28, 1992, before the
sale of the property on April 27, 1992. SC also find it unsettling that respondents Barrameda,
without any reservation or inquiry, readily remitted to respondents Calingo the full payment
for the property on August 21, 1992 despite knowledge of the levy on execution over the
property in July of the same year. Any prudent buyer of real property, before parting with his
money, is expected to first ensure that the title to the property he is about to purchase is
clear and free from any liabilities and that the sellers have the proper authority to deal on
the property.

The annotation of an adverse claim is a measure designed to protect the interest of a person
over a piece of property where the registration of such interest or right is not otherwise
provided for by the law on registration of real property. Section 70 of Presidential
Decree No. 1529 is clear:

Sec. 70. Adverse claim. Whoever claims any part or interest in registered land
adverse to the registered owner, arising subsequent to the date of the original
registration, may, if no other provision is made in this Decree for registering
the same, make a statement in writing setting forth his alleged right or interest, and
how or under whom acquired, a reference to the number of the certificate of title of
the registered owner, the name of the registered owner, and a description of the
land in which the right or interest is claimed. Xxx

The deed of sale with assumption of mortgage executed by respondents Calingo and
Barrameda is a registrable instrument. In order to bind third parties, it must be registered
with the Office of the Register of Deeds. It was not shown in this case that there was
justifiable reason why the deed could not be registered. Hence, the remedy of adverse claim
cannot substitute for registration.

Petition is GRANTED. The decision of the RTC is REINSTATED.


Golden Haven Memorial Park v. Filinvest
G.R. No. 188265. November 17, 2010

Facts:Two consolidated cases about a claim on several lots partitioned among heirs.

Yap, Victoriano and PolicarpioVivar (the Vivars), Cruz, Aquino, Corpuz, and Sobremesana,
and some other relatives inherited a parcel of land in Las Piñas City covered by Transfer
Certificate of Title (TCT) 67462 RT-1. Subsequently, the heirs had the land divided into 13
lots and the court distributed four of the lots as follows: a) Lots 1 and 12 to Aquino; b) Lot 2
to Corpuz and Sobremesana; and (c) Lot 6 to Yap, Cruz, and the Vivars. The other lots were
distributed to the other heirs.

On March Yap, acting for herself and for Cruz and the Vivars, executed an agreement to
sell Lot 6 in favor of Golden Haven Memorial Park, Inc. (GHM), payable in three installments.
On July another heir, Aquino, acting for himself and for Corpuz and Sobremesana, also
executed an agreement to sell Lots 1, 2, and 12 in favor of GHM, payable in the same
manner. In both instances, GHM paid the first installment upon execution of the contract.

On August 4, 1989 GHM caused to be annotated a Notice of Adverse Claim onTCT 67462
RT-1 (the mother title). On September 20, 1989 the sellers of the four lots wrote GHM that
they were still working on the titling of the lots in their names and wanted to know if GHM
was still interested in proceeding with their agreements. GHM replied in the affirmative on
September and said that it was just waiting for the sellers' titles so it can pay the second
installments.

Sometime in August of 1989, Filinvest Development Corporation (Filinvest)applied for the


transfer in its name of the titles over Lots 2, 4, and 5 but the Las Piñas Register of Deeds
declined its application. Upon inquiry, Filinvest learned that Lot 8, a lot belonging to some
other heir or heirs and covered by the same mother title, had been sold to Household
Development Corporation (HDC), a sister company of GHM, and HDC held the owner's
duplicate copy of that title. Filinvest immediately filed against HDC a petition for the
surrender and cancellation of the co-owners' duplicate copy of TCT 67462 RT-1. Filinvest
alleged that it bought Lots 1, 2, 6, and 12 of the property from their respective owners as
evidenced by three deeds of absolute sale in its favor dated September 10, November 18,
and December 29, 1989 and that Filinvest wasentitled to the registrations of such sales.
On January 14, 1991 GHM filed against the sellers and Filinvest a complaint forthe
annulment of the deeds of sale issued in the latter's favor before the Regional Trial Court
(RTC) of Las Piñas City. RTC: declared the contracts to sell executed by some of the heirs
in GHM's favor valid and enforceable and the sale in favor of Filinvest null and void.

Only Filinvest appealed among the defendants.

CA affirmed the RTC decision with respect to the validity of the contract to sell Lot 6 in
GHM's favor. But the CA declared the contracts to sell Lots 1, 2, and 12 in GHM's favor void
and the sale of the same lots in favor of Filinvest valid.

Issue:Which of the two real estate developers acted in good faith?

Ruling:GHM was in good faith.

Filinvest was on notice that GHM had annotated on the mother title, as early as August 4,
1989 a notice of adverse claim covering Lot 6. This notwithstanding, Filinvest still proceeded
to buy Lots 1, 2, 6, and 12.

The notice is a warning to third parties dealing with the property that someone claims an
interest in it or asserts a better right than the registered owner. Such notice constitutes, by
operation of law, notice to the whole world. Here, although the notice of adverse claim
pertained to only one lot and Filinvest wanted to acquire interest in some other lots under
the same title, the notice served as warning to it that one of the owners was engaged in
double selling.

Upon inquiry with the Register of Deeds of Las Piñas, Filinvest also learned that the heirs of
Andres Aldana sold Lot 8 to HDC and turned over the coowner'sduplicate copy of TCT
67462 RT-1 to that company which had since then keptthe title.

One who has knowledge of facts which should have put him upon such inquiry and
investigation cannot claim that he has acquired title to the property in good faith as against
the true owner of the land or of an interest in it. The Court upholds the validity of the contracts
between GHM and its sellers. As the trial court aptly observed, GHM entered into valid
contracts with its sellers but thelatter simply and knowingly refused without just cause to
honor their obligations. The sellers apparently had a sudden change of heart when they
found out that Filinvest was willing to pay more. \
Martinez v. Garcia
GR No. 166536. February 4, 2010

Facts:Respondent EdilbertoBrua was the registered owner of a parcel of land located in


Mandaluyong, Rizal. He mortgaged the land to the Government Service Insurance System
(GSIS), and such mortgage was annotated at the back of the title. Respondent Brua
obtained a loan from his brother-in-law, respondent Ernesto Garcia, in the amount of
P150,000.00 and, to secure the payment of said loan, respondent

Brua mortgaged the subject property to respondent Garcia, as evidenced by a Deed of Real
Estate Mortgageexecuted in respondent Garcia's favor. Since the title to the subject property
was in the possession of the GSIS and respondent Garcia could not register the Deed of
Real Estate Mortgage, he then executed an Affidavit of Adverse Claimand registered it
with the Registry of Deeds of Rizal which remained uncancelled up to this time.

Brua requested Garcia to pay the former's loan with the GSIS, so that the title to the subject
property would be released to the latter. Respondent Garcia then paid GSIS the amount of
P400,000.00 and, thus, the title to the subject property was released to him.

A Deed of Absolute Sale was executed between them over the subject property, where Brua
sold the property in the amount of P705,000.00. In the same deed, it was stated that the
subject property was only a partial payment of Brua's mortgage indebtedness to Garcia,
which he could no longer redeem.

Respondent Garcia then registered the Deed of Sale with the Registry of Deeds and a new
titlewas issued in the names of Garcia and his wife. However, the annotations at the back
of the previous title were carried over to the new title, to wit: a Notice of Levy on Attachment
and/or Levy, a Notice of Levy on Execution in favor of petitioner Flor Martinez, a Certificate
of Sale in favor of petitioner, a Notice of Levy on Execution in favor of Pilipinas Bank a
cancellation of respondent Brua's mortgage with GSIS.

It appeared that the annotations found at the back of the title of the subject property in favor
of petitioner, i.e., Notice of Levy on Attachment and/or Levy, Notice of Levy on Execution,
and Certificate of Sale, were all made in connection with Martinez’s action for Collection of
Sum of Money, which she filed against respondent Brua. A decision was rendered in favor
of petitioner, where the RTC ordered respondent Brua to pay the former the amount of
P244,594.10, representing the value of the dishonored checks plus 12% interest per annum
as damages and the premium paid by petitioner for the attachment bond. The decision
became final and executory as respondent Brua failed to appeal the same, and a notice of
levy on execution was issued. A public auction was subsequently conducted, where the
subject property was awarded to petitioner as the sole bidder in the amount of P10,000.00,
and a Certificate of Sale wasissued in her favor.

The annotation of Pilipinas Bank's Notice of Levy on Execution on the title of the subject
property was by virtue of a civil case filed by Filipinas Manufacturers Bank, now known as
Pilipinas Bank, against respondent Brua

So respondents Garcia and Brua filed an Action to Quiet Title, initially against petitioner due
to the encumbrances/liens annotated on respondent Garcia's new title. They contended that
these encumbrances/liens were registered subsequent to the annotation of respondent
Garcia's adverse claim made in 1980, and prayed that these be canceled.
RTC dismissed action to quiet title.
CA reversed and set aside the RTC decision.

Issue:Whether or not the adverse claim annotated by Garcia prior to the inscription of the
levy by Petitioners should prevail.

Ruling:Petition was dismissed.

The levy does not make the judgment creditor the owner of the property levied upon. He
merely obtains a lien.Such levy on execution is subject and subordinate to all valid claims
and liens existing against the property at the time the execution lien attached, such as real
estate mortgages. Respondent Garcia's adverse claim, which refers to the deed of mortgage
executed by respondent Brua in his favor, was annotated on respondent Brua's title
registered with the Registry of Deeds of Rizal on June 23, 1980. The adverse claim was
already existing when the Notice of Levy on Execution, as well as the Certificate of Sale in
favor of petitioner, was inscribed and, hence, the adverse claim is sufficient to constitute
constructive notice to petitioner regarding the subject property. When petitioner registered
her Notice of Levy on Execution on the title of the subject property, she was charged with
the knowledge that the subject property sought to be levied upon on execution was
encumbered by an interest the same as or better than that of the registered owner thereof.

The annotation of an adverse claim is a measure designed to protect the interestof a person
over a piece of real property, where the registration of such interest or rightis not otherwise
provided for by the Land Registration Act or Act No. 496 (now P.D. No.1529 or the Property
Registration Decree), and serves a warning to third parties dealingwith said property that
someone is claiming an interest on the same or a better rightthan that of the registered
owner thereof.

Petitioner cannot be considered as a buyer in good faith. A purchaser in goodfaith and for
value is one who buys the property of another without notice that someother person has a
right to or interest in such property and pays a full and fair price forthe same at the time of
such purchase, or before he has notice of the claims or interestof some other person in the
property. Here, petitioner admitted on crossexaminationthat when she registered her notice
of attachment in 1981 and the levy onexecution on July 11, 1988, she already saw
respondent Garcia's adverse claiminscribed on respondentBrua's title on June 23, 1980.
iii. ENFORCEMENT OF LIENS ON REGITERED LAND AND APPLICATION OF NEW CERTIFICATE
UPON EXPIRATION OF REDEMPTION PERIOD (SECS. 74- 75)

ESTANISLAO PADILLA, JR. v PHILIPPINE PRODUCERSCOOPERATIVE MARKETINGASSOCIATION,


INC
G.R. No. 141256
July 15, 2005

FACTS:
Petitioner and his wife are the registered owners of real properties. Respondent is a marketing cooperative
which had a money claim against petitioner. Respondent filed a civil case against petitioner for collection of a
sum of money in the Regional Trial Court of Bacolod City. But herein petitioner failed to file an answer, thus
was declared in default and the trial court rendered judgment in favor of respondent. The court issued a writ
of execution and the properties were levied. The lots were auctioned and the respondent was the only bidder.
A certificate of sale was issued to respondent and such was registered in the Register of Deeds. Petitioner
failed to exercise his right of redemption (12-month period), thus a writ of possession was issued to cause the
delivery of the physical possession of the properties in favor of respondent.

Respondent filed a motion to direct the Register of Deeds to issue new titles over the properties in its name,
alleging that the Register of Deeds (RD) of Bago City would not issue new titles (in respondent’s name) unless
the owner’s copies were first surrendered to him. Respondent countered that such surrender was impossible
because this was an involuntary sale and the owner’s copies were with petitioner.
The trial court granted the motion and the appellate court affirmed it.

ISSUE:
(1) whether or not respondent’s right to have new titles issued in its name is now barred by prescription
(2) whether or not the motion in question is the proper remedy for cancelling petitioner’s certificates of title and
new ones issued in its name.

RULING:
On the first issue, we rule that the respondent’s right to petition the court for the issuance of new certificates
of title has not yet prescribed.
It is settled that execution is enforced by the fact of levy and sale. The right acquired by the purchaser at an
execution sale is inchoate and does not become absolute until after the expiration of the redemption period
without the right of redemption having been exercised.
The fact of levy and sale constitutes execution, and not the action for the issuance of a new title. Here, because
the levy and sale of the properties took place in June and July of 1990, respectively, or less than a year after
the decision became final and executory, the respondent clearly exercised its rights in timely fashion.
On the other hand, the issue of whether to acquire new titles by mere motion or through a separate petition is
an entirely different matter.
Petitioner is correct in assailing as improper respondent’s filing of a mere motion for the cancellation of the old
TCTs and the issuance of new ones as a result of petitioner’s refusal to surrender his owner’s duplicate TCTs.
Indeed, this called for a separate cadastral action initiated via petition.
The proper course of action was to file a petition in court, rather than merely move, for the issuance of new
titles.
Section 75 of PD 1529 provides:
Sec. 75. Application for new certificate upon expiration of redemption period.—Upon the expiration of
the time, if any, allowed by law for redemption after the registered land has been sold on execution,
or taken or sold for the enforcement of a lien of any description, except a mortgage lien, the purchaser
at such sale or anyone claiming under him may petition the court for the entry of a new certificate to
him.
Before the entry of a new certificate of title, the registered owner may pursue all legal and equitable
remedies to impeach or annul such proceedings.
It is clear that PD 1529 provides the solution to respondent’s quandary. The reasons behind the law make a
lot of sense; it provides due process to a registered landowner (in this case the petitioner) and prevents the
fraudulent or mistaken conveyance of land, the value of which may exceed the judgment obligation.
In any event, respondent can still file the proper petition with the cadastral court for the issuance of new titles
in its name.
Wherefore, the petition is granted.
iv. LIS PENDENS (SEC. 76)
1.

VIEWMASTER CONSTRUCTION CORPORATION v HON. REYNALDO Y. MAULIT


G.R. No. 136283
February 29, 2000

A notice of lis pendens may be registered when an action or a proceeding directly affects the title to the land
or the buildings thereon; or the possession, the use or the occupation thereof. Hence, the registration of such
notice should tbe allowed if the litigation involves the enforcement of an agreement for the co-development of
a parcel of land.

FACTS:
The subject property is known as the Las Piñas property registered in the name of Peltan Development Inc.
(now State Properties Corporation).

The Chiong/Roxas family decided to give control and ownership over the said corporations to only one member
of the family, through the process of bidding among the family members, the bidder who acquires 51% or more
of the said companies shall be deemed the winner.

Defendant Allen Roxas, one of the stockholders of State Investment Trust, Inc. applied for a loan with First
Metro Investment, Inc. (First Metro for brevity) to participate in the bidding.
First Metro granted Alien Roxas' loan application without collateral provided, however, that he procure a
guarantor/surety/solidary co-debtor to secure the payment of the said loan.

Petitioner Viewmaster agreed to act as guarantor for the aforementioned loan in consideration for its
participation in a Joint Venture Project to co-develop the real estate assets of State Investment Trust, Inc.

After a series of negotiations, petitioner Viewmaster and defendant Allen Roxas agreed that should the latter
prevail and win in the bidding, he shall sell to petitioner fifty percent (50%) of the total eventual acquisitions of
shares of and stock in the State Investment Trust, Inc., at a purchase price equivalent to the successful bid
price per share plus an additional ten percent (10%) per share.

Roxas won the bid but he failed to take the necessary action to implement the Joint Venture Project with
petitioner Viewmaster to co-develop the subject properties.
Petitioner Viewmaster filed a Notice of Lis Pendens with the Register of Deeds of Quezon City and Las Piñas
for the annotation of a Notice of Lis Pendens on Transfer Certificate of Title No. (S-17992) 12473-A, registered
in the name of Peltan Development, Inc. (now State Properties Corporation).

The respondent Register of Deeds of Las Piñas denied the request for annotation of the Notice of Lis Pendens.
The Respondent Land Registration Authority issued the assailed Resolution holding that petitioner's "Notice
of Lis Pendens" was not registrable.
The CA upheld the ruling of the LRA.

ISSUE:
Whether or not the petitioner failed to adequately describe the subject property in its complaint and in the
notice of lis pendens.
Whether or not the Las Piñas property is directly involved in Civil Case

RULING:
Description of Property
As earlier noted, a copy of the TCT was attached to and made an integral part of both documents.
Consequently, the notice of lis pendens submitted for registration, taken as a whole, leaves no doubt as to the
identity of the property, the technical description of which appears on the attached TCT. We stress that the
main purpose of the requirement that the notice should contain a technical description of the property is to
ensure that the same can be distinguished and readily identified. In this case, we agree with petitioner that
there was substantial compliance with this requirement.

Property Directly Involved


A notice of lis pendens, which literally means "pending suit," may involve actions that deal not only with the
title or possession of a property, but even with the use or occupation thereof. Thus, Section 76 of PD 1529
reads:
Sec. 76. Notice of lis pendens. — No action to recover possession of real estate, or to quiet title thereto,
or to remove clouds upon the title thereof, or for partition, or other proceedings of any kind in court
directly affecting the title to land or the use or occupation thereof or the buildings thereon, and no
judgment, and no proceeding to vacate or reverse any judgment, shall have any effect upon registered
land as against persons other than the parties thereto, unless a memorandum or notice stating the
institution of such action or proceeding and the court wherein the same is pending, as well as the date
of the institution thereof, together with a reference to the number of the certificate of title, and an
adequate description of the land affected and the registered owner thereof, shall have been filed and
registered.

According to Section 24, Rule 14 13 of the Rules of Court and Section 76 of Presidential Decree No. 1529, a
notice of lis pendens is proper in the following cases, viz.:
a) An action to recover possession of real estate;
b) An action to quiet title thereto;
c) An action to remove clouds thereon;
d) An action for partition; and
e) Any other proceedings of any kind in Court directly affecting the title to the land or the use or
occupation thereof or the buildings thereon.
This Court further declared that the rule of lis pendens applied to suits brought "to establish an equitable estate,
interest, or right in specific real property or to enforce any lien, charge, or encumbrance against it . . . ." Thus,
this Court observed that the said notice pertained to the following:
. . . all suits or actions which directly affect real property and not only those which involve the question
of title, but also those which are brought to establish an equitable estate, interest, or right, in specific
real property or to enforce any lien, charge, or encumbrance against it, there being in some cases a
lis pendens, although at the commencement of the suit there is no present vested interest, claim, or
lien in or on the property which it seeks to charge. It has also been held to apply in the core of a
proceeding to declare an absolute deed of mortgage, or to redeem from a foreclosure sale, or to
establish a trust, or to suits for the settlement and adjustment of partnership interests.

To repeat, the co-development is not merely auxiliary or incidental to the purchase of the shares; it is a distinct
consideration for Viewmaster's guaranty.

Hence, by virtue of the alleged agreement with Allen Roxas, petitioner has a direct — not merely incidental —
interest in the Las Piñas property.

The Court must stress that the purpose of lis pendens is (1) to protect the rights of the party causing the
registration thereof 18 and (2) to advise third persons who purchase or contract on the subject property that
they do so at their peril and subject to the result of the pending litigation. 19 One who deals with property subject
of a notice of lis pendens cannot acquire better rights than those of his predecessors-in-interest.

The doctrine of lis pendens is founded upon reason of public policy and necessity, the purpose of which is to
keep the subject matter of the litigation within the power of the court until the judgment or decree shall have
been entered; otherwise, by successive alienations pending the litigation, its judgment or decree shall be
rendered abortive and impossible of execution. Purchasers pendente lite of the property subject of the litigation
after the notice of lis pendens is inscribed in the Office of the Register of Deeds are bound by the judgment
against their predecessors.

Without a notice of lis pendens, a third party who acquires the property after relying only on the Certificate of
Title would be deemed a purchaser in good faith. Against such third party, the supposed rights of petitioner
cannot be enforced, because the former is not bound by the property owner's undertakings not annotated in
the TCT.

Verily, there is no requirement that the right to or the interest in the property subject of a lis pendens be
proven by the applicant. The Rule merely requires that an affirmative relief be claimed.
24A notation of lis pendens neither affects the merits of a case nor creates a right or a lien. 25 It merely
protects the applicant's rights, which will be determined during the trial.
2.
ATLANTIC ERECTORS, INC. VS. HERBAL COVE REALTY [G.R. NO. 148568, MARCH 20, 2003]
FACTS:
On June 20, 1996, the parties entered into a Construction Contract whereby the petitioner agreed to construct four (4)
units of [townhouses] designated as 16-A, 16-B, 17-A and 17-B and one (1) single detached unit for an original contract
price of P15,726,745.19 which was later adjusted to P16,726,745.19 as a result of additional works. The contract period
is 180 days commencing on July 7, 1996 and to terminate on January 7, 1997. Petitioner claimed that the said period
was not followed due to reasons attributable to respondent, namely: suspension orders, additional works, force majeure,
and unjustifiable acts of omission or delay on the part of said respondent. Respondent, however, denied such claim and
instead pointed to petitioner as having exceeded the 180 day contract period aggravated by defective workmanship and
utilization of materials which are not in compliance with specifications.
On November 21, 1997, petitioner filed a complaint(Civil Case No. 97-707) for sum of money with damages with the RTC
of Makati and a notice of lis pendens for annotation of the pendency of the case on titles TCTs nos. T-30228, 30229,
30230, 30231 and 30232. When the lots covered by said titles were subsequently subdivided into 50 lots, the notices
of lis pendens were carried over to the titles of the subdivided lots, i.e., Transfer Certificate of Title Nos. T-36179 to T-
36226 and T-36245 to T-36246 of the Register of Deeds of Tagaytay City.
The RTC judge reversed his Order on July 31, 1980 and reinstated the notice of lis pendens, stating as follows:
“xxx Even as it declared itself without jurisdiction, this Court still has power to act on incidents in this case,
such as acting on motions for reconsideration, for correction, for lifting of lis pendens, or approving
appeals, etc.
As correctly argued by defendant Herbal Cove, a notice of lis pendens serves only as a precautionary
measure or warning to prospective buyers of a property that there is a pending litigation involving the
same. Xxx”
On appeal, the CA on the other hand reversed the RTC’s ruling and granted Herbal Cove’s Motion to Cancel the Notice
of Lis Pendens, stating that:
"The CA opined that the Complaint filed by petitioner in Civil Case No. 97-2707 was intended
purely to collect a sum of money and to recover damages. Xxx did not aver any ownership claim to the
subject land or any right of possession over the buildings constructed thereon. xxx absent any claim on
the title to the buildings or on the possession thereof, the notices of lis pendens had no leg to stand on.
Xxx”
ISSUES:
1. Whether or not money claims representing cost of materials for and labor on the houses constructed on a property
are a proper lien for annotation of lis pendens on the property title
2. Whether or not the trial court, after having declared itself without jurisdiction to try the casemay still decide on the
substantial issue of the case.
RULING:
1. No

As a general rule, the only instances in which a notice of lis pendens may be availed of are as follows: (a) an action to
recover possession of real estate; (b) an action for partition; and (c) any other court proceedings that directly affect the
title to the land or the building thereon or the use or the occupation thereof. More over, it was held that lis pendens is not
necessarily confined to cases that involve title to or possession of real property. This annotation also applies to suits
seeking to establish a right to, or an equitable estate or interest in, a specific real property; or to enforce a lien, a charge
or an encumbrance against it.
A careful examination of petitioner's Complaint reveals that no such lien or interest over the property was ever alleged. It
merely asked for the payment of construction services and materials plus damages, without mentioning — much less
asserting — a lien or an encumbrance over the property. Verily, it was a purely personal action and a simple collection
case. Hence, neither Article 2242 of the Civil Code nor the enforcement of the lien is applicable here, because
petitioner's Complaint failed to satisfy the foregoing requirements.
Narciso Peña, a leading authority on the subject of land titles and registration, gives an explicit exposition on the
inapplicability of the doctrine of lis pendens to certain actions and proceedings that specifically include money claims. He
explains in this wise:
"By express provision of law, the doctrine of lis pendens does not apply to attachments, levies
of execution, or to proceedings for the probate of wills, or for administration of the estate of
deceased persons in the Court of First Instance. Also, it is held generally that the doctrine of
lis pendens has no application to a proceeding in which the only object sought is the recovery
of a money judgment, though the title or right of possession to property be incidentally
affected. It is essential that the property be directly affected, as where the relief sought in the
action or suit includes the recovery of possession, or the enforcement of a lien, or an
adjudication between conflicting claims of title, possession, or the right of possession to
specific property, or requiring its transfer or sale"
Peña adds that even if a party initially avails itself of a notice of lis pendens upon the filing of a case in court, such notice
is rendered nugatory if the case turns out to be a purely personal action. Annotation of a notice of lis pendens on titles to
properties is not proper in cases wherein the proceedings instituted are actions in personam.
2. Yes

Rule 41 of the 1997 Rules on Civil Procedure, which governs appeals from regional trial courts, expressly provides that
RTCs lose jurisdiction over a case when an appeal is filed. The rule reads thus:
"SEC. 9. Perfection of appeal, effect thereof. — A party's appeal by notice of appeal is
deemed perfected as to him upon the filing of the notice of appeal in due time.
xxx xxx xxx
"In appeals by notice of appeal, the court loses jurisdiction over the case upon the
perfection of the appeals filed in due time and the expiration of the time to appeal of the
other parties." (Italics supplied)
On the basis of the foregoing rule, the trial court lost jurisdiction over the case only on August 31, 1998, when petitioner
filed its Notice of Appeal. 20 Thus, any order issued by the RTC prior to that date should be considered valid, because
the court still had jurisdiction over the case. Accordingly, it still had the authority or jurisdiction to issue the July 30,
1998 Order canceling the Notice of Lis Pendens. On the other hand, the November 4, 1998Order that set aside the July
30, 1998 Order and reinstated that Notice should be considered without force and effect, because it was issued by the
trial court after it had already lost jurisdiction.
In any case, even if we were to adopt petitioner's theory that both the July 30, 1998 and the November 4, 1998 Orders
were void for having been issued without jurisdiction, the annotation is still improper for lack of factual and legal bases.
Petitioner vehemently insists that the trial court had no jurisdiction to cancel the Notice. Yet, the former filed before the
CA an appeal, questioning the RTC's dismissal of the Complaint for lack of jurisdiction. Moreover, it must be
remembered that it was petitioner which had initially invoked the jurisdiction of the trial court when the former sought a
judgment for the recovery of money and damages against respondent. Yet again, it was also petitioner which assailed
that same jurisdiction for issuing an order unfavorable to the former's cause. Indeed, parties cannot invoke the
jurisdiction of a court to secure affirmative relief, then repudiate or question that same jurisdiction after obtaining or failing
to obtain such relief.
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against petitioner.
3.
ST. MARY VS. RD MAKATI [G.R. NO. 174290, JANUARY 20, 2009]

FACTS:
Petitioner SMWSI is an educational institution incorporated and existing by virtue of the laws of the Republic of the
Philippines. It is the current registered owner of the three parcels of land (subject properties), located in Makati City and
covered by TCTs No. 175029, No. 220977 and No. 220978. Petitioner Marcial P. Soriano is the President of petitioner
SMWSI.
Private respondent Hilario P. Soriano, is one of the siblings of petitioner Marcial P. Soriano.
The consolidated cases originated from the Complaint filed on 14 August 2003 by the private respondent with the
Regional Trial Court (RTC) of Makati City, for Declaration of Nullity of Deed of Assignment, Deed of Sale and
Cancellation of TCTs No. 156249, No. 156250, and No. 156251 of the Register of Deeds of Makati, Metro
Manila, registered in the name of Oro Development Corporation (ODC); and TCT No. 175029, registered in the name of
petitioner SMWSI. Named defendants therein were the petitioners, together with ODC, Antonio P. Soriano, Aurelia P.
Soriano-Hernandez, Rosario P. Soriano-Villasor, Eugenia Ma. P. Soriano-Lao and Josefina P. Soriano (hereinafter
collectively referred to as petitioners, et al.).
In his Complaint, respondent alleged that during the marriage of his parents, the couple acquired both real and personal
properties, including the subject properties, which were then covered by TCTs No. 169941, No. 114408, 12 and No.
114409. On 10 May 1988, the Soriano couple allegedly executed a Deed of Assignment in favor of ODC involving the
subject properties to pay for Tomas Q. Soriano's subscription of stocks in the said corporation. On 14 June 1988, Tomas
Q. Soriano died intestate.
By virtue of the said Deed of Assignment, the ownership and title over the subject properties were transferred to ODC.
Consequently, TCTs No. 169941, No. 114408 and No. 114409 were cancelled and the new TCTs No. 156249, No.
156250 and No. 156251 were issued in the name of ODC.
Thereafter, on 26 April 1991, ODC executed in favor of petitioner SMWSI a Deed of Sale over the subject property
covered by TCT No. 156249. By virtue of the sale, petitioner SMWSI acquired ownership and title over the particular
property. Thus, TCT No. 156249 was cancelled and the new TCT No. 175209 was issued in the name of petitioner
SMWSI.
Private respondent claimed that several years after his father Tomas Q. Soriano's death, he discovered that the latter's
signature in the Deed of Assignment of 10 May 1988 in favor of ODC was a forgery. Being very familiar with his father's
signature, private respondent compared Tomas Q. Soriano's purported signature in the Deed of Assignment of 10 May
1988 with Tomas Q. Soriano's genuine signature in another document captioned Second Amendment of Credit
Agreement. Private respondent also presented a Certification from the Records Management and Archives Office which
stated that the forged Deed of Assignment dated 10 May 1988 was not available in the files of the Office.
Meanwhile, by reason of the pendency of Civil Case No. 03-954, a Notice of Lis Pendens was annotated on TCTs No.
156249, No. 156250, and No. 156251, in the name of ODC. With the subsequent cancellation of TCT No. 156249 and
the issuance of TCT No. 175209 in the name of petitioner SMWSI, the Notice of Lis Pendens was carried over to the new
certificate of title.
ISSUE:
Whether or not the procedure for consulta should have been filed.
RULING:
No.
Sec. 117, P.D. 1529 states:
Section 117. Procedure. — When the Register of Deeds is in doubt with regard to the proper step to be
taken or memorandum to be made in pursuance of any deed, mortgage or other instrument presented to
him for registration, or where any party in interest does not agree with the action taken by the Register of
Deeds with reference to any such instrument, the question shall be submitted to the Commissioner of
Land Registration by the Register of Deeds, or by the party in interest thru the Register of Deeds.
Where the instrument is denied registration, the Register of Deeds shall notify the interested party in
writing, setting forth the defects of the instrument or legal grounds relied upon, and advising him that if he
is not agreeable to such ruling, he may, without withdrawing the documents from the Registry, elevate the
matter by consulta within five days from receipt of notice of the denial of registration to the Commissioner
of Land Registration.
The Register of Deeds shall make a memorandum of the pending consulta on the certificate of title which
shall be canceled motu proprio by the Register of Deeds after final resolution or decision thereof, or
before resolution, if withdrawn by petitioner.
The Commissioner of Land Registration, considering the consulta and the records certified to him after
notice to the parties and hearing, shall enter an order prescribing the step to be taken or memorandum to
be made. His resolution or ruling in consultas shall be conclusive and binding upon all Registers of
Deeds, provided, that the party in interest who disagrees with the final resolution, ruling or order of the
Commissioner relative to consultas may appeal to the Court of Appeals within the period and in the
manner provided in Republic Act No. 5434.
It is clear that the afore-quoted procedure applies only when the instrument is already presented for registration and: (1)
the Register of Deeds is in doubt with regard to the proper step to be taken or memorandum to be made in pursuance of
any deed, mortgage or other instrument presented to him for registration; or (2) where any party in interest does not
agree with the action taken by the Register of Deeds with reference to any such instrument; and (3) when the registration
is denied. None of these situations is present in this case.
There was no evidence that the 18 August 2006 Resolution of the Court of Appeals was already presented to the
Register of Deeds of Makati City for the re-annotation of the Notice of Lis Pendens. There is also no showing that the
Register of Deeds denied the re-annotation.
4.

TAN VS. BINOLIRAO (GR 153820, Oct. 10, 2009)

FACTS:

Spouses Lamberto and Erlinda Benolirao and the Spouses Reynaldo and Norma Taningco
were the co-owners of a parcel of land located in Tagaytay City. On October 6, 1992, the
co-owners executed a Deed of Conditional Sale over the property in favor of Tan for the
price of P1,378,000.00. The deed stated:
a) An initial down-payment of TWO HUNDRED (P200,000.00) THOUSAND PESOS, upon
signing of the contract; then the remaining balance of ONE MILLION ONE HUNDRED
SEVENTY EIGHTTHOUSAND (P1,178,000.00) PESOS, shall be payable within a period of
one hundred fifty (150) days from date hereof without interest;
b) That for any reason, BUYER fails to pay the remaining balance within above mentioned
period, the BUYER shall have a grace period of sixty (60) days within which to make the
payment, provided that there shall be an interest of 15% per annum on the balance amount
due from the SELLERS;
c) That should in case (sic) the BUYER fails to comply with the terms and conditions within the
above stated grace period, then the SELLERS shall have the right to forfeit the down
payment, and to rescind this conditional sale without need of judicial action
d) That in case, BUYER have complied with the terms and conditions of this contract, then the
SELLERS shall execute and deliver to the BUYER the appropriate Deed of Absolute Sale;

Tan issued and delivered to the co-owners/vendors Metrobank check for P200,000 as down
payment for the property, respective receipt issued by vendors. On November 6, 1992,
Lamberto Benolirao died intestate. The heirs of the deceased executed an extrajudicial
settlement of Lamberto’s estate on January 20, 1993. A new certificate of title (TCT No.
27335) was issued on March 26, 1993 on the basis of the extrajudicial settlement. TCT No.
27335 was issued in the names of the Spouses Reynaldo and Norma Taningco and Erlinda
Benolirao and her children and an annotation was made on the title, pursuant to Sec. 4,
Rule 74 of the Rules:
. . . any liability to creditors (sic), excluded heirs and other persons having right to the
property, for a period of two (2) years, with respect only to the share of Erlinda,
Andrew, Romano and Dion, all surnamed Benolirao

As stated in the Deed of Conditional Sale, Tan had until March 15, 1993 to pay the balance
of the purchase price. This period was extended by two months as agreed by the parties,
Tan had until May 15, 1993 to pay the balance. Tan failed to pay and another extension was
granted by the vendors. Tan still failed to pay the remaining balance due on May 21, 1993.
The vendors demanded payment of the balance of the purchase price within five (5) days
from notice; otherwise, they would declare the rescission of the conditional sale and the
forfeiture of his down payment based on the terms of the contract. Tan refused to comply
with the vendors’ demand and instead wrote them a letter dated May 28, 1993 claiming that
the annotation on the title constituted an encumbrance on the property that would prevent
the vendors from delivering a clean title to him. Thus, he alleged that he could no longer be
required to pay the balance of the purchase price and demanded the return of his down
payment. The vendors refused to refund the down payment, Tan, through counsel, sent
another demand letter to the vendors on June 18, 1993. The vendors still refused to heed
Tan’s demand, prompting Tan to file on June 19, 1993 a complaint with the RTC for specific
performance against the vendors.
Tan alleged that there was a novation of the Deed of Conditional Sale done without his
consent since the annotation on the title created an encumbrance over the property. Tan
prayed for the refund of the down payment and the rescission of the contract. On August 9,
1993, Tan amended his Complaint, contending that if the respondents insist on forfeiting the
down payment, he would be willing to pay the balance of the purchase price provided there
is reformation of the Deed of Conditional Sale. In the meantime, Tan caused the annotation
on the title of a notice of lis pendens.

On August 21, 1993, the respondents the property to Hector de Guzman (de Guzman) for
P689,000.

The respondents moved for the cancellation of the notice of lis pendens on the ground that
it was inappropriate since the case that Tan filed was a personal action which did not involve
either title to, or possession of, real property.

The RTC issued an order dated October 22, 1993 granting the respondents’ motion to
cancel the lis pendens annotation on the title .Meanwhile, based on the Deed of Absolute
Sale in his favor, de Guzman registered the property and TCTNo. 28104 was issued in his
name.

Tan then filed a motion to carry over the lis pendens annotation to TCT No. 28104 registered
in de Guzman’s name, but the RTC denied the motion.

On September 8, 1995, after due proceedings, the RTC rendered judgment ruling that the
respondents’ forfeiture of Tan’s down payment was proper in accordance with the terms and
conditions of the contract between the parties. The RTC ordered Tan to pay the respondents
the amount of P30,000.00, plus P1,000.00 per court appearance, as attorney’s fees, and to
pay the cost of suit. On appeal, the CA dismissed the petition and affirmed the ruling of the
trial court in toto. Hence, the petition.

ISSUE:
Is an annotation made pursuant to Section 4, Rule 74 of the Rules of Court (Rules) on a
certificate of title covering real property considered an encumbrance on the property?

Tan’s arguments:
1. The CA erred in affirming the RTC's ruling to cancel the lis pendens annotation on TCT No.
27335. Due to the unauthorized novation of the agreement, Tan presented before the trial court
two alternative remedies in his complaint — either the rescission of the contract and the return
of the down payment, or the reformation of the contract to adjust the payment period, so that Tan
will pay the remaining balance of the purchase price only after the lapse of the required two-year
encumbrance on the title.
2. The CA erroneously disregarded the alternative remedy of reformation of contract when it
affirmed the removal of the lis pendens annotation on the title.
3. The CA erred when it recognized the validity of the forfeiture of the down payment in favor of the
vendors. While admitting that the Deed of Conditional Sale contained a forfeiture clause, he
insists that this clause applies only if the failure to pay the balance of the purchase price was
through his own fault or negligence. In the present case, Tan claims that he was justified in
refusing to pay the balance price since the vendors would not have been able to comply with
their obligation to deliver a "clean" title covering the property.
4. The CA erred in ordering him to pay the respondents P30,000.00, plus P1,000.00 per court
appearance as attorney's fees, since he filed the foregoing action in good faith, believing that he
is in the right.
Respondents’ (Binolirao) argument:
1. Petition should be dismissed for raising pure questions of fact, in contravention of the provisions
of Rule 45 of the Rules which provides that only questions of law can be raised in petitions for
review on certiorari.
2. Whether or not the contract between the parties is a contract of sale or a contract of sale.

RULING:
The petition is granted. The decision of the CA is ANNULLED and SET ASIDE. Another
judgment is rendered declaring the Deed of Conditional Sale terminated and ordering the
respondents to return the P200,000.00 down payment to Delfin Tan, subject to legal interest
of 6% per annum, computed from May 28, 1993. The respondents are also ordered to pay,
jointly and severally, petitioner Delfin Tan the amount of P50,000.00 as and by way of
attorney's fees. Once this decision becomes final and executory, respondents are ordered
to pay interest at 12% per annum on the principal obligation as well as the attorney's fees,
until full payment of these amounts.

Petition raises a question of law


The court ruled that the issued raised by Tan is a pure question of law and is cognizable by
the SC.

Lis pendens annotation not proper in personal actions


Sec. 14. Notice of lis pendens. — In an action affecting the title or the
right of possession of real property, the plaintiff and the defendant,
when affirmative relief is claimed in his answer, may record in the office of
the registry of deeds of the province in which the property is situated a
notice of the pendency of the action. Said notice shall contain the names
of the parties and the object of the action or defense, and a description of
the property in that province affected thereby. Only from the time of filing
such notice for record shall a purchaser, or encumbrancer of the property
affected thereby, be deemed to have constructive notice of the pendency
of the action, and only of its pendency against the parties designated by
their real names.

The notice of lis pendens hereinabove mentioned may be cancelled only


upon order of the court, after proper showing that the notice is for the
purpose of molesting the adverse party, or that it is not necessary to
protect the rights of the party who caused it to be recorded. The litigation
subject of the notice of lis pendens must directly involve a specific property
which is necessarily affected by the judgment.

Tan's complaint prayed for either the rescission or the reformation of the Deed of Conditional
Sale. Tan's complaint is an in personam action, as Tan asked the court to compel the
respondents to do something — either to rescind the contract and return the down payment,
or to reform the contract by extending the period given to pay the remaining balance of the
purchase price. Either way, Tan wants to enforce his personal rights against the
respondents, not against the property subject of the Deed.

Since Tan had no claim of ownership or title to the property yet, he obviously had no right
to ask for the annotation of a lispendens notice on the title of the property.

Contract is a mere contract to sell


In the present case, the true nature of the contract is revealed by paragraph D thereof, which
states:
xxx xxx xxx
d) That in case, BUYER has complied with the terms and conditions of this contract, then
the SELLERS shall execute and deliver to the BUYER the appropriate Deed of Absolute
Sale;

Jurisprudence has established that where the seller promises to execute a deed of absolute
sale upon the completion by the buyer of the payment of the price, the contract is only a
contract to sell. Thus, while the contract is denominated as a Deed of Conditional Sale, the
presence of the above-quoted provision identifies the contract as being a mere contract to
sell.

Section 4, Rule 74 annotation is an encumbrance on the property


While Tan admits that he refused to pay the balance of the purchase price, he claims that
he had valid reason to do so — the sudden appearance of an annotation on the title pursuant
to Section 4, Rule 74 of the Rules, which Tan considered an encumbrance on the property.

The annotation placed on TCT No. 27335, the new title issued to reflect the extrajudicial
partition of Lamberto Benolirao's estate among his heirs, states:
. . . any liability to credirots (sic) , excluded heirs and other persons having
right to the property, for a period of two (2) years, with respect only to the
share of Erlinda, Andrew, Romano and Dion, all surnamed Benolirao
[Emphasis supplied.]

This annotation was placed on the title pursuant to Section 4, Rule 74 of the Rules, which
reads:
Sec. 4. Liability of distributees and estate. — If it shall appear at any time within
two (2) years after the settlement and distribution of an estate in accordance with
the provisions of either of the first two sections of this rule, that an heir or other
person has been unduly deprived of his lawful participation in the estate, such heir
or such other person may compel the settlement of the estate in the courts in the
manner hereinafter provided for the purpose of satisfying such lawful participation.
And if within the same time of two (2) years, it shall appear that there are debts
outstanding against the estate which have not been paid, or that an heir or other
person has been unduly deprived of his lawful participation payable in money, the
court having jurisdiction of the estate may, by order for that purpose, after hearing,
settle the amount of such debts or lawful participation and order how much and in
what manner each distributee shall contribute in the payment thereof, and may
issue execution, if circumstances require, against the bond provided in the
preceding section or against the real estate belonging to the deceased, or both.
Such bond and such real estate shall remain charged with a liability to creditors,
heirs, or other persons for the full period of two (2) years after such distribution,
notwithstanding any transfers of real estate that may have been made. [Emphasis
supplied.]

An annotation is placed on new certificates of title issued pursuant to the distribution and
partition of a decedent's real properties to warn third persons on the possible interests of
excluded heirs or unpaid creditors in these properties. The annotation, therefore, creates a
legal encumbrance or lien on the real property in favor of the excluded heirs or creditors.
Where a buyer purchases the real property despite the annotation, he must be ready for the
possibility that the title could be subject to the rights of excluded parties.
The cancellation of the sale would be the logical consequence where: (a) the annotation
clearly appears on the title, warning all would-be buyers; (b) the sale unlawfully interferes
with the rights of heirs; and (c) the rightful heirs bring an action to question the transfer within
the two-year period provided by law.

By the time Tan's obligation to pay the balance of the purchase price arose on May 21, 1993
(on account of the extensions granted by the respondents), a new certificate of title covering
the property had already been issued on March 26, 1993, which contained the encumbrance
on the property; the encumbrance would remain so attached until the expiration of the two-
year period. Clearly, at this time, the vendors could no longer compel Tan to pay the balance
of the purchase since considering they themselves could not fulfill their obligation to transfer
a clean title over the property to Tan.

Contract to sell is not rescinded but terminated


The contract to sell was terminated when the vendors could no longer legally compel Tan to
pay the balance of the purchase price as a result of the legal encumbrance which attached
to the title of the property. Since Tan's refusal to pay was due to the supervening event of a
legal encumbrance on the property and not through his own fault or negligence, we find and
so hold that the forfeiture of Tan's down payment was clearly unwarranted.
v. LEVIES ON EXECUTION
1.
PINEDA VS. ARCALAS (GR NO. 170172, November 23, 2007)

FACTS:

The subject property consists of three parcels of land registered in the name of spouses
Lateo. A certain Victoria Tolentino bought the said property from the Spouses Lateo.
Sometime later, a civil case for Sum of Money, was instituted by Arcalas against Victoria
Tolentino. This case stemmed from an indebtedness evidenced by a promissory note and
four post-dated checks later dishonored, which Victoria Tolentino owed Arcalas.

The Quezon City RTC rendered judgment in favor of Arcalas.

Meanwhile, Pineda bought the subject property from Victoria L. Tolentino. Pineda alleged
that upon payment of the purchase price, she took possession of the subject property but
failed to register the subject property under her name.

To execute the judgment, the Quezon City RTC levied upon the subject property and the
Notice of Levy on Alias Writ of Execution was annotated at the back of the TCT. Asserting
ownership of the subject property, Pineda filed with the Deputy Sheriff of the Quezon City
RTC an Affidavit of Title and Third Party Claim but the RTC set aside the said affidavit. After
the finality of the Order of the Quezon City RTC quashing Pineda’s third-party claim, Pineda
filed with the Office of the Register of Deeds of Laguna another Affidavit of Third Party Claim
and caused the inscription of a notice of adverse claim at the back of TCT.

Arcalas purchased the subject property at an auction evidenced by a Sheriff’s Certificate of


Sale, and filed an action for the cancellation of the entry of Pineda’s adverse claim before
the Laguna RTC which was granted by the said trial court.

The Court of Appeals dismissed the appeal.

ISSUE:
Whether the levy on alias writ of execution issued by the regional trial court of Quezon City
in civil case may exempt the portion bought by Pineda from Victoria Tolentino
Whether the possession of Pineda of the 5 hectares portion of lot 3762 is already equivalent
to a title despite the absence of registration.

RULING:
This petition must be dismissed.
Pineda avers that she is not a party to civil case and that the levy on the alias writ of
execution issued cannot affect her purchase of subject property. Such position runs contrary
to law and jurisprudence.
Sections 51 and 52 of Presidential Decree No. 1529, otherwise known as the Property
Registration Decree, provide that:
Section 51. Conveyance and other dealings by registered owner.—An owner of registered
land may convey, mortgage, lease, charge or otherwise deal with the same in accordance
with existing laws. He may use such forms of deeds, mortgages, leases or other voluntary
instruments as are sufficient in law. But no deed, mortgage, lease, or other voluntary
instrument, except a will purporting to convey or affect registered land shall take effect as a
conveyance or bind the land, but shall operate only as a contract between the parties and
as evidence of authority to the Register of Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land insofar as third
persons are concerned, and in all cases under this Decree, the registration shall be made
in the office of the Register of Deeds for the province or the city where the land lies.
(Emphasis provided.)

Section 52. Constructive notice upon registration.—Every conveyance, mortgage, lease,


lien, attachment, order, judgment, instrument or entry affecting registered land shall, if
registered, filed or entered in the office of the Register of Deeds for the province or city
where the land to which it relates lies, be constructive notice to all persons from the time of
such registering, filing or entering.

It is clear from these provisions that before a purchaser of land causes the registration of
the transfer of the subject property in her favor, third persons, such as Arcalas, cannot be
bound thereby. Insofar as third persons are concerned, what validly transfers or conveys a
person’s interest in real property is the registration of the deed. As the deed of sale was
unrecorded, it operates merely as a contract between the parties, namely Victoria Tolentino
as seller and Pineda as buyer, which may be enforceable against Victoria Tolentino through
a separate and independent action. On the other hand, Arcalas’s lien was registered and
annotated at the back of the title of the subject property and accordingly amounted to a
constructive notice thereof to all persons.

The doctrine is well settled that a levy on execution duly registered takes preference over a
prior unregistered sale. A registered lien is entitled to preferential consideration.

The Court held that a registered writ of attachment was a superior lien over that on an
unregistered deed of sale because an attachment is a proceeding in rem.

TOPIC: Cases under Surrender of Owner’s Duplicate (Sec. 107) to Claims against the
Assurance Fund (Sec. 95)
Toledo Banaga vs. CA (G.R. No. 127941, Jan. 28, 1999)
Facts:
Petitioner Banaga filed an action for redemption of her property which was earlier
foreclosed and later sold in a public auction to the respondent. The trial court declared
petitioner to have lost her right for redemption and ordered that certificate of title be issued
to the respondent which the petitioner caused an annotation of notice of lispendens to the
title. On appeal, the CA reversed the decision and allowed the petitioner to redeem her
property within a certain period. Banaga tried to redeem the property by depositing to the
trial court the amount of redemption that was financed by her co-petitioner Tan.
Respondent opposed in that she made the redemption beyond the period ordered by the
court. The lower court however upheld the redemption and ordered the Register of Deeds
to cancel the respondent’s title and issue a new title in favor of the petitioner.
In a petition for certiorari before the CA by the respondent, another notice of
lispendens was annotated to the title. CA issued a temporary restraining order to enjoin
the execution of the court order. Meanwhile, Banaga sold the property to Tan in the
absolute deed of sale that mentions the title of the property still in the name of the
respondent which was not yet cancelled. Despite the lispendens on the title, Tan
subdivided the lot into a subdivision plan which she made not in her own name but that of
the respondent. Tan then asked the Register of Deeds to issue a new title in her name.
New titles were issued in Tan’s name but carried the annotation of the two notices of
lispendens. Upon learning the new title of Tan the respondent impleaded her in his
petition. The CA later sets aside the trial court’s decision and declared the respondent as
the absolute owner of the property for failure of the petitioner to redeem the property within
the period ordered by the court. The decision was final and executory and ordered the
Register of Deeds to reinstate the title in the name of the respondent. The Register of
Deeds refused alleging that Tan’s certificate must be surrendered first. The respondent
cited the register of deeds in contempt but the court denied contending that the remedy
should be consultation with the Land Registration Commissioner and in its other order
denied the motion of respondent for writ of possession holding that the remedy would be to
a separate action to declare Tan’s title as void.
In its motion for certiorari and mandamus to the CA, the court set aside the two
assailed orders of the trial court and declared the title of Tan as null and void and ordered
the Register of Deeds to reinstate the title in the name of the respondent. Petitioners now
argued that Tan is a buyer in good faith and raised the issue on ownership of the lot.

Issue:
Whether or not petitioner Tan is a buyer in good faith?

Ruling:
The court held that Tan is not a buyer in good faith because when the property was
sold to her she was aware of the interest of the respondent over the property. She even
furnished the amount used by Banaga to redeem the property. When she bought the
property from Banaga she knows that at that time the property was not registered to the
seller’s name. The deed of sale mentioned the title which was named to the respondent.
Moreover the title still carries 2 notices of lispendens. Tan therefore cannot feign ignorance
on the status of the property when she bought it. Because Tan was also impleaded as a
party to the litigation, she is bound by the decision promulgated to the subject of such
litigation.
It is a settled rule that the party dealing with a registered land need not go beyond
the Certificate of Title to determine the true owner thereof so as to guard or protect her
interest. She has only to look and rely on the entries in the Certificate of Title. By looking
at the title Tan would know that the certificate is in the name of respondent. Being a buyer
in bad faith, Tan does not acquire any better right over the property. The adjudication of
the ownership in favor to the respondent includes the delivery of the possession by the
defeated party to the respondent includes the delivery of the possession by the defeated
party to the respondent.
Abad, et. al., vs. Filhomes Realty (G.R. No. 189239, Nov. 24, 2010)

Facts:
Fil-Homes filed a complaint for unlawful detainer against petitioners. Respondent
alleged that since 1980, they have made demands for petitioners to vacate, but they went
unheeded. Petitioners countered that there is no possession by tolerance for they have
been in adverse, continuous and uninterrupted possession of the lots for more than 30
years; and that respondentspredecessor-in-interest, Pilipinas Development Corporation,
had no title to the lots. During the pendency of the case, the city of Paranaque filed a case
of expropriation. A writ of possession was granted to the city.
The respondent won in the unlawful detainer case, but the RTC reversed the ruling
upon appeal reasoning that there was no "tolerance" on the part of Respondents. On
appeal of the Respondents to the CA, it upheld the decision of the MeTC. Thus, the
current petition.
Issue:
Whether or not Petitioners should be ejected from the premises.

Ruling:
As a general rule, ejectment proceedings, due to its summary nature, are not
suspended or their resolution held in abeyance despite the pendency of a civil action
regarding ownership. In the present case, the mere issuance of a writ of possession in the
expropriation proceedings did not transfer ownership of the lots in favor of the City.Such
issuance was only the first stage in expropriation. There is even no evidence that judicial
deposit had been made in favor of respondents prior to the City's possession of the lots
Respecting petitioners claim that they have been named beneficiaries of the lots,
the city ordinance authorizing the initiation of expropriation proceedings does not state
so.Petitioners cannot thus claim any right over the lots on the basis of the ordinance. Even
if the lots are eventually transferred to the City, it is nonsequitur for petitioners to claim that
they are automatically entitled to be beneficiariesthereof.For certain requirements must be
met and complied with before they can be considered to be beneficiaries.
Petition is DENIED. The decision of CA is affirmed

TOPIC: CLAIMS UNDER ASSURANCE FUND

Development Bank of the Philippines vs. Lourdes Gaspar Bautista, The Director Of
Lands
and The National Treasurer of the Philippines
G.R. No.L-21362. November 29, 1968

Facts:
On or before May 31, 1949, the defendant- appellee, Lourdes Gaspar Bautista
pplied to the Government for the sale in her favor of a parcel of land with an area of 12
has., 44 ares, and 22 centares, located at Bo. Sta. Barbara, San Jose, Nueva Ecija to
which Original Certificate of Title No. P-389 was issued in her favor.
On July 16, 1949, Bautista applied for a loan with the Rehabilitation Finance
Corporation (RFC), predecessor in interest of the plaintiff-appellee Development Bank of
the Philippines
(DBP), offering as security the parcel of land covered by O.C.T. No. P-389. Aside from her
certificate of title, Bautista also submitted to the RFC other documents to show her
ownership and possession of the land in question. The RFC approved a loan of P4,000.00
in favor of Bautista and executed the mortgage contract over the property covered by
O.C.T. No. P-389 and the promissory note for P4, 000.00.
Bautista failed to pay the amortization on the loan so that the RFC took steps to
foreclose the mortgage extra-judicially under Act 3135, as amended. On June 27, 1951,
the RFC acquired the mortgaged property as the highest bidder. On July 21, 1952, upon
failure of Bautista to redeem the property within the one (1) year period as provided by
law, plaintiff-appellant RFC consolidated its
ownership thereon. On July 26, 1952, the Register of Deeds of Nueva Ecija cancelled
O.C.T. No. P-389 and replaced it with T.C.T. No. NT-12108 in the name of the RFC.
Meanwhile, Rufino Ramos and Juan Ramos filed an action in the Court of First
Instance of Nueva Ecijaagainst the Government of the Republic of the Philippines and the
RFC (as successor in
interest of Bautista) claiming ownership of the land in question and seeking the annulment
of T.C.T. No. 2336 in the name of the Government, O.C.T. No. P-389 in the name of
Bautista
and T.C.T. No. NT-12108 in the name of the RFC. On June 27, 1955 the aforementioned
certificates of title were declared null and void. It appears that on or at the same time the
civil action was institute, the parcel of land was already sold unto Conrada and when the
title had been annulled, the Bank reimbursed Conrada.
The Development Bank of the Philippines now appellant, filed a complaint against
Lourdes Gaspar Bautista, now appellee, for the recovery of a sum of money representing
the unpaid mortgage indebtedness, which previously had been wiped out with the creditor
bank acquiring the title of the mortgaged property in an extrajudicial sale. The lower court
dismissed the petition.

Issue:
Whether or not trisl court is correct in dismissing the petition of DBP and can they
recover
the sum of money from Bautista
Whether or not DBP can claim against the Assurance Fund

Ruling:
The Court after examining the proofs, found that that she had never been placed
within the jurisdiction of the Nueva Ecija Court; asthe action there was one to annul the
title, it was an action strictly inpersonam, if that was the case as it was, the judgment there
could not in any way bind Lourdes who had not acquiesced in said decision in any way for
what only happened is that as to the mortgage,the Bank foreclosed, and then sold unto
Conrada and when the title had been annulled, the Bank took it upon itself to reimbursed
Conrada; stated otherwise, the annulment of Lourdes' title was a proceeding ex-parte as
far as she was concerned and could not bind her at all.
The decision of trial court must be affirmed, the fundamental due process
requirement having been disregarded, appellee Bautista could not in any wise be made to
suffer, whether directly or indirectly, from the effects of such decision. After appellant bank
had acquired her title by such extrajudicial foreclosure sale and thus, through its own act,
seen to it that her obligation had been satisfied, it could not thereafter, seek to revive the
same on the allegation that the title in question was subsequently nullified. If it were
otherwise, then the cardinal requirement that no party should be made to suffer in person
or property without being given a hearing would be brushed aside.
They could not likewise claim from the Assurance Fund. Assurance Fund allows
recovery only upon a showing that there be no negligence on the part of the party
sustaining any loss or damage or being deprived of any land or interest therein by the
operation of the Land Registration Act. This certainly is not the case here, plaintiff-
appellant being solely responsible for the plight in which it now finds itself. Accordingly, the
Director of Lands and the National Treasurer of the Philippines are likewise exempt from
any liability.

Mariano Torres y Chavarria vs. The Honorable Court of Appeals, Francisco E.


Fernandez
and Fe Fernandez, Rosario Mota Cue, Ernesto Medina Cue and
The NATIONAL TREASURER, as Custodian of the Assurance Fund
G.R. No. 63046. June 21, 1990

Facts:
Mariano Torres owned a parcel of land at the corner of Quezon Boulevard and
Raon Street (now Gonzalo Street) and a building erected thereon known as "M. Torres
Building” evidenced by a Transfer Certificate of Title No. 53628-Manila issued in his name.
Torres was and still is in possession of the realties, holding safely to his owner's duplicate
certificate of title, and, at least until 1971, paying the real estate taxes due thereon, and
collecting rentals from his tenants occupying the building.
In 1966, Francisco Fernandez, Torres' brother-in-law, filed a petition with the
Court of First Instance of Manila, docketed as LRC GLRO Cad. Rec. No. 133, where he,
misrepresenting to be the attorney-in-fact of Torres and falsely alleging that the owners'
duplicate copy of TCT No. 53628 was lost, succeeded in obtaining a court order for the
issuance of another copy of the certificate. And further forged a simulated sale in his favor
whereupon TCT No. 53628 in the name of Torres was cancelled and TCT No. 86018 was
issued in his name.
On various dates from December, 1966 to November, 1967 Fernandez mortgaged
the realties to Mota, Cue and Fermin who later on assigned it all to Cue. The mortgages
were annotated at the back of TCT No. 86018 and so was the deed of assignment.
Upon knowledge of fraud Torres filed an adverse claim and on March 30, 1968,
Torres filed Civil Case No. 72494 against Fernandez to annul TCT No. 86018 as well as
the proceedings in LRC GLRO Cad. Rec. No. 133. On April 2, 1968, a notice of lispendens
was annotated at the back of Fernandez' TCT.
A case was filed by Fernandez against the Cue to which it resulted to an amicable
settlement that he would pay his obligation and the Cues would deliver the documents
(title). However before Fernandez could have done his part the court declared that the
proceedings held that TCT No. 86018, issued in the name of Fernandez, is without force
and effect as TCT No. 53628 in the name of Torres is the true and legal evidence of
ownership of the subject immovable. It appears that this decision had become final and
executory.
Meanwhile Fernandez was not able to comply with the agreement thus the subject
land were levied upon and sold in a public auction where Mota was the highest bidder.
On August 31, 1971, the redemption period for the subject immovables having
lapsed without Fernandez nor Torres redeeming the properties, Rosario Mota was issued
the Sheriff's Deed of Sale. Thereafter, TCT No. 86018 was cancelled and TCT No. 105953
was issued in Mota’s name. She then notified the occupants of the building to pay their
rents from that day to her.
On December 17, 1971 Torres filed a complaint, which later gave rise to this
petition, with
the Court of First Instance of Manila, docketed as Civil Case No. 85753, against
Fernandez
and his spouse and the Cues to restrain the latter from collecting rentals and for the
declaration as void TCT No. 105953.
RTC declared Mota’s title as null and void. CA reversed the RTC decision
considering Mota an innocent mortgagee protected under Section 65 of the Land
Registration Law, held that Torres was bound by the mortgage. Inevitably, it pronounced
that the foreclosure sale, where Mota was the highest bidder, also bound Torres and
concluded that the certificate of title issued in the name of Mota prevails overthat of
Torres'.
Issues:
Whether or not CA was correct and that Mota’s foreclosure bound Torres
Whether or not can they claim from the Assurance Fund

Ruling:
No. The court ruled that Torres correctly pointed out that his properties were sold
onexecution, and not on foreclosure sale, and hence, the purchaser thereof was bound by
his notice of adverse claim and lispendens annotated at the back of Fernandez' TCT. And
even if the court grant Mota the status of an innocent mortgagee, the doctrine relied upon
by the appellate court that a forged instrument may become the root of a valid title, cannot
be applied where the owner still holds a valid and existing certificate of title covering the
same interest in a realty. The doctrine would apply rather when, as in the cases for
example of De la Cruz v. Fabie, 35 Phil. 144 [1916], Fule v. De Legare, No. L- 17951,
February 28, 1963, 7 SCRA 351, and Republic v. Umali, G.R. No. 80687, April 10, 1989,
the forger thru insidious means obtains the owner's duplicate certificate of title, converts it
in his name, and subsequently sells or otherwise encumbers it to an innocent holder for
value, for in such a case the new certificate is binding upon the owner (Sec. 55, Act 496;
Sec. 53, P.D. No. 1529). If the owner holds a valid and existing certificate of title, his would
be indefeasible as against the whole world, and not that of the innocent holder's. "Prior
tempore potior jure"
The trial court also dismissed the Cues' third party complaint against the Treasurer
of the Philippines as custodian of the Assurance Fund after finding them negligent in
protecting their interest. The trial court recognized the principle that a person dealing with
registered lands need not go beyond the certificate of title but nevertheless pointed out
that there are circumstances in this case which should have put the Cues on guard and
prompted them to investigate the property being mortgaged to them, such that the
registered title does not yield any information as to the amount of rentals due from the
building, much less on who is collecting them, or who is recognized by the tenants as their
landlord. Any prospective buyer or mortgagee of such a property, if prudent and in good
faith, is normally expected to inquire into all these and related facts and circumstances.

TOPIC: REGISTRATION OF PATENTS


CERTIFICATES OF TITLES PURSUANT TO PATENTS

FRANCISCO ALONSO, substituted by MERCEDES V. ALONSO, TOMAS V. ALONSO and ASUNCION


V. ALONSO, petitioners, vs. CEBU COUNTRY CLUB, INC., respondent,
REPUBLIC OF THE PHILIPPINES, represented by the OFFICE OF THE SOLICITOR GENERAL, public
respondent.
[G.R. No. 188471. April 20, 2010.]
Nature of the Case:
The case is an appeal via certiorari from a decision of the Court of Appeals affirming in toto that of the
Regional Trial Court, Branch 8, Cebu City, declaring that the title to the contested Lot No. 727, Banilad Friar
Lands Estate, Cebu City, was validly re-constituted in the name of the Cebu Country Club, Inc. and ordering
petitioners to pay attorney’s fees of P400,000.00, and litigation expenses of P51,000.00, and costs.

Facts:
Petitioner Francisco M. Alonso, who died pendente lite and substituted by his legal heirs, a lawyer by
profession, the only son and sole heir of the late Tomas N. Alonso and Asuncion Medalle, who died on June
16, 1962 and August 18, 1963, respectively. Cebu Country Club, Inc. is a non-stock, non-profit corporation
duly organized and existing under Philippine Laws the purpose of which is to cater to the recreation and leisure
of its members.

Sometime in 1992, petitioner discovered documents and records:


 Friar Lands Sale Certificate Register/Installment Record Certificate No. 734;
 Sales Certificate No. 734; and
 Assignment of Sales Certificate

The said documents indicate that his father acquired Lot No. 727 of the Banilad Friar Lands Estate from
the Government of the Philippine Islands in or about the year 1911 in accordance with the Friar Lands Act (Act
No. 1120).
The documents likewise show that one Leoncio Alburo, the original vendee of Lot No. 727, assigned his
sales certificate to petitioner’s father on December 18, 1911, who completed the required installment payments
thereon under Act No. 1120 and was consequently issued Patent No. 14353 on March 24, 1926.
On March 27, 1926, the Director of Lands, acting for and in behalf of the government, executed a final
deed of sale in favor of petitioner’s father Tomas N. Alonso. It appears, however, that the deed was not
registered with the Register of Deeds because of lack of technical requirements, among them the
approval of the deed of sale by the Secretary of Agriculture and Natural Resources, as required by law.
Upon investigation of the status of the land, petitioner found out from the office of the Registrar of Deeds
of Cebu City that title to Lot No. 727 of the Banilad Friar Lands Estate had been "administratively reconstituted
from the owner’s duplicate" on July 26, 1948 under Transfer Certificate of Title (TCT) No. RT-1310 (T-11351)
in the name of United Service Country Club, Inc., predecessor of Cebu Country Club, Inc. On March 8, 1960,
upon order of the Court of First Instance, the name of the registered owner in TCT No. RT-1310 (T-
11531) was changed to Cebu Country Club, Inc. Moreover, the TCT provides that the reconstituted title was
a transfer from TCT No. 1021.
In the firm belief that petitioner’s father is still the rightful owner of Lot No. 727 of the Banilad Friar Lands
Estate since there are no records showing that he ever sold or conveyed the disputed property to anyone, on
July 7, 1992, petitioner made a formal demand upon Cebu Country Club, Inc. to restore to him the ownership
and possession of said lot within fifteen (15) days from receipt thereof. Cebu Country Club, Inc., however,
denied petitioner’s claim and refused to deliver possession to him.
Filing before the RTC
Left with no other recourse, on September 25, 1992, petitioner filed with the Regional Trial Court, Cebu
City, a complaint for declaration of nullity and non-existence of deed/title, cancellation of certificates of title and
recovery of property against defendant Cebu Country Club, Inc.
Allegations:
 He alleged that the Cebu Country Club, Inc. fraudulently and illegally managed to secure in its name
the administrative reconstitution of TCT No. RT-13 10 (T-11351) despite the absence of any
transaction of specific land dealing that would show how Lot No. 727 had come to pass to Cebu
Country Club, Inc.;
 That TCT No. 11351 which is the source title of TCT No. RT-1310 (T-11351) does not pertain to Lot
No. 727;
 That the reconstituted title which was issued on July 26, 1948, did not contain the technical description
of the registered land which was inserted only on March 8, 1960, twenty-eight (28) years after the
issuance of TCT No. RT-1310 (T-11351), hence, Cebu Country Club, Inc.’s title is null and void.

Petitioner thus prayed for the cancellation of TCT No. RT-1310 (T-11351) and the issuance of another title in
his name as the sole heir of Tomas Alonso, for Cebu Country Club, Inc. to deliver possession of the property
to petitioner, and render an accounting of the fruits and income of the land. Petitioner likewise prayed for the
sum of P100, 000.00 by way of attorney’s fees plus P500.00 per hearing as appearance fee, and P10, 000.00
as reasonable litigation expenses.
Respondent’s Answer:
 It alleged that petitioner had no cause of action against Cebu Country Club, Inc. since the same had
prescribed and was barred by laches, Cebu Country Club, Inc. having been in possession of the land
since 1935 until the present in the concept of an owner, openly, publicly, peacefully, exclusively,
adversely, continuously, paying regularly the real estate taxes thereon;
 That Cebu Country Club, Inc. acquired the lot in good faith and for value; that it caused the
administrative reconstitution of Lot No. 727 in 1948 from the owner’s duplicate, the original of TCT No.
11351 having been lost or destroyed during the war, pursuant to Republic Act No. 26, its implementing
Circular, GLRO Circular No. 178 and Circular No. 6 of the General Land Registration Office;
 That unlike Cebu Country Club, Inc., petitioner’s father never had any registered title under the Land
Registration Act No. 496 nor did he pay the necessary taxes on Lot No. 727 during his lifetime;
 That petitioner’s father knew that the United Service Country Club, Inc., predecessor of Cebu Country
Club, Inc. was occupying Lot No. 727 as owner; that petitioner’s father never reconstituted his alleged
title to Lot No. 727 but did so over Lot No. 810 of the Banilad Friar Lands Estate, a lot adjacent to the
disputed property, in 1946;
 That petitioner himself lived in Cebu City, a few kilometers away from the land in litigation; that
petitioner’s father or petitioner himself, both of whom are lawyers and the former a congressman as
well, for more than sixty (60) years, never made any demand on Cebu Country Club, Inc. for the
recovery of the property knowing fully well that said land was owned and utilized by Cebu Country
Club, Inc. as its main golf course.

By way of counterclaim, Cebu Country Club, Inc. prayed for the award of attorney’s fees in the amount of
P900,000.00 and litigation expenses of P100,000.00, moral damages of P500,000.00 and exemplary damages
of P2,000,000.00.

Ruling by the RTC:


Judgment is hereby rendered in favor of the defendant and against the plaintiff: declaring the contested
property or Lot 727 as legally belonging to the defendant; directing the plaintiff to pay attorney'’ fee of P400,
000.00; and litigation expenses of P51, 000.00; and finally, with costs against the plaintiff.

CA Ruling:
After proceedings on appeal, on March 31, 1997, the Court of Appeals affirmed the lower court’s decision.

On April 30, 1997, petitioner filed a motion for reconsideration; however, on October 2, 1997, the Court of
Appeals denied the motion. Hence, this appeal.

Issues

The Court confronts and resolves the following issues, to wit:

1. Whether or not the petitioners were the real parties-in-interest to question the denial by the RTC of the
OSG's motion for the issuance of a writ of execution;

2. Whether or not R.A. No. 9443 gave the petitioners a legal interest to assail the RTC's orders

Ruling

1. Petitioners are not proper parties to appeal and assail the order of the RTC

Admittedly, neither petitioners nor their predecessor had any title to the land in question. The most
that petitioners could claim was that the Director of Lands issued a sales patent in the name of Tomas N.
Alonso.

The sales patent, however, and even the corresponding deed of sale were not registered with the Register
of Deeds and no title was ever issued in the name of the latter. This is because there were basic
requirements not complied with, the most important of which was that the deed of sale executed by
the Director of Lands was not approved by the Secretary of Agriculture and Natural Resources.
Hence, the deed of sale was void. "Approval by the Secretary of Agriculture and Commerce is indispensable
for the validity of the sale."

This principle is further reaffirmed in a more recent jurisprudence, in Jesus P. Liao v. Court of Appeals, the
Court has ruled categorically that approval by the Secretary of Agriculture and Commerce of the sale of friar
lands is indispensable for its validity, hence, the absence of such approval made the sale null and void ab-
initio. Necessarily, there can be no valid titles issued on the basis of such sale or assignment. Consequently,
petitioner Francisco's father did not have any registerable title to the land in question. Having none, he could
not transmit anything to his sole heir, petitioner Francisco Alonso or the latter's heirs.

Every action must be prosecuted or defended in the name of the real party in interest, unless otherwise
authorized by law or the rules. A real party in interest is one who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit. "Interest" within the meaning of the rule
means material interest, an interest in issue and to be affected by the decree, as distinguished from mere
interest in the question involved, or a mere incidental interest. The rule refers to a real or present substantial
interest, as distinguished from a mere expectancy; or from a future, contingent, subordinate, or consequential
interest. One having no right or interest to protect cannot invoke the jurisdiction of the court as a party-
plaintiff in an action.

Thus, an appeal, like this one, is an action to be prosecuted by a party in interest before a higher court.
In order for the appeal to prosper, the litigant must of necessity continue to hold a real or present substantial
interest that entitles him to the avails of the suit on appeal. If he does not, the appeal, as to him, is an exercise
in futility. Thus, petitioner having no legal interest to the property since they do not possess any legal
title to claim possession thereof cannot be referred to as a party in interest in this case.

In contrast, the Government, being the legal owner of Lot No. 727-D-2, is the only party adversely
affected by the denial, and is the proper party entitled to assail the denial. However, its manifest desistance
from the execution of the decision effectively barred any challenge against the denial, for its non-appeal
rendered the denial final and immutable.

2. R.A. No. 9443 gives petitioners no legal interest to assail the denial of the motion for
execution

RA No. 9443 expressly declares as valid "(a)ll existing Transfer Certificates of Title and
Reconstituted Certificates of Title duly issued by the Register of Deeds of Cebu Province and/or Cebu City
covering any portion of the Banilad Friar Lands Estate," and recognizes the registered owners as absolute
owners. To benefit from R.A. No. 9443, therefore, a person must hold as a condition precedent a duly
issued Transfer Certificate of Title or a Reconstituted Certificate of Title.

The petitioners could not benefit from R.A. No. 9443 because of their non-compliance with the express
condition of holding any Transfer Certificate of Title or Reconstituted Certificate of Title respecting Lot 727-D-
2 or any portion thereof.

The appropriate recourse for the petitioners, if they persist in the belief that the TCT of Cebu Country
Club should be nullified, is to compel the OSG through the special civil action for mandamus to commence the
action to annul on the ground that Cebu Country Club had obtained its title to Lot 7217-D-2 through fraud. Yet,
that recourse is no longer availing, for the decision in G.R. No. 130876 explicitly found and declared that the
reconstituted title of Cebu Country Club had not been obtained through fraud. Said the Court:
a. On the question that TCT No. RT-1310 (T-11351) bears the same number as another title to another
land, we agree with the Court of Appeals that there is nothing fraudulent with the fact that Cebu
Country Club, Inc.'s reconstituted title bears the same number as the title of another parcel of land.
This came about because under General Land Registration Office (GLRO) Circular No. 17, dated
February 19, 1947, and Republic Act No. 26 and Circular No. 6, RD 3, dated August 5, 1946, which
were in force at the time the title was reconstituted on July 26, 1948, the titles issued before the
inauguration of the Philippine Republic were numbered consecutively and the titles issued after the
inauguration were numbered also consecutively starting with No. 1, so that eventually, the titles issued
before the inauguration were duplicated by titles issued after the inauguration of the Philippine
Republic. . . . .
b. On alleged extrinsic and intrinsic fraud in the reconstitution of the title in the absence of a deed of
conveyance in its favor. In truth, however, reconstitution was based on the owner's duplicate of the
title, hence, there was no need for the covering deed of sale or other modes of conveyance. Cebu
Country Club, Inc. was admittedly in possession of the land since long before the Second World War,
or since 1931. In fact, the original title (TCT No. 11351) was issued to the United Service Country
Club, Inc. on November 19, 1931 as a transfer from Transfer Certificate of Title No. 1021. More
importantly, Cebu Country Club, Inc. paid the realty taxes on the land even before the war, and tax
declarations covering the property showed the number of the TCT of the land. Cebu Country Club,
Inc. produced receipts showing real estate tax payments since 1949.

On the other hand, petitioner failed to produce a single receipt of real estate tax payment ever
made by his father since the sales patent was issued to his father on March 24, 1926. Worse,
admittedly petitioner could not show any [T]orrens title ever issued to Tomas N. Alonso,
because, as said, the deed of sale executed on March 27, 1926 by the Director of Lands was
not approved by the Secretary of Agriculture and Natural Resources and could not be
registered

c. Petitioner also alleges that Cebu Country Club, Inc. obtained its title by fraud in connivance with
personnel of the Register of Deeds in 1941 or in 1948, when the title was administratively reconstituted.
Imputations of fraud must be proved by clear and convincing evidence. Petitioner failed to adduce
evidence of fraud. In an action for re-conveyance based on fraud, he who charges fraud must prove
such fraud in obtaining a title. "In this jurisdiction, fraud is never presumed." The strongest suspicion
cannot sway judgment or overcome the presumption of regularity. "The sea of suspicion has no shore,
and the court that embarks upon it is without rudder or compass." Worse, the imputation of fraud was
so tardily brought, some forty-four (44) years or sixty-one (61) years after its supposed occurrence,
that is, from the administrative reconstitution of title on July 26, 1948, or from the issuance of the
original title on November 19, 1931, that verification is rendered extremely difficult, if not impossible,
especially due to the supervening event of the second world war during which practically all public
records were lost or destroyed, or no longer available.

IN VIEW OF THE FOREGOING, the petition for review on certiorari is denied for lack of merit.

The Court declares that Cebu Country Club, Inc. is the exclusive owner of Lot No. 727-D-2 of the Banilad Friar
Lands Estate, as confirmed by Republic Act No. 9443.
JOSEPHINE A. TAGUINOD and VIC A. AGUILA, petitioners,
vs.
COURT OF APPEALS, ANTONINO SAMANIEGO, JOSE DELA CRUZ, JOHN SAMANIEGO, ERNESTO
SANTOS, MACARIO DELA CRUZ, ANDRES PASTORIN, BENETRITO DELA CRUZ, JESUS BATAC, and
RODOLFO LAGUISMA, respondents.
G.R. No. 154654
September 14, 2007

FACTS:
President Ferdinand E. Marcos promulgated PD 27 for the emancipation of tenant-farmers from private
agricultural lands they till that are primarily devoted to rice and corn. DAR launched Operation Land Transfer
(OLT) to implement the law. When OLT was launched, Respondent, Salud Alvarez Aguila was the
registered owner of the disputed lots.
The TCTs over the two lots were issued based on homestead patents. The first TCT was transferred to Vic
Aguila (who was then 14 yrs old), and the second TCT was transferred to Josephine Taguinod. Both lots were
placed under coverage of OLT. Salud Aguila, on behalf of Vic Aguila, filed a notice for retention. When Vic
Aguila became of age, he filed a notice for exemption. Taguinod also filed a notice for exemption.
Meanwhile, the two subject lots were surveyed and a subdivision plan of the lots parceled to the farmer-
beneficiaries was prepared and approved.
PARO’s decision
The DAR Municipal Agrarian Reform Officer (MARO) recommended to the Provincial Agrarian Reform Officer
(PARO) the approval of the applications of Salud A. Aguila/Vic A. Aguila and Josephine A. Taguinod for
retention of rights. The PARO granted the application for retention rights.
Respondents-farmer-beneficiaries opposed the decision.
RD’s decision
The RD affirmed the PARO’s decision but stated that the transfer made by Salud Aguila to petitioners
is null and void, but that Salud Aguila should be granted the retention rights.
The Regional Director held that the transfer of the subject lots by landowner Salud Aguila to petitioners on
January 19, 1976 was a violation of MC Nos. 2, 2-A, and 8, and therefore null and void and of no effect; thus,
ownership of the subject lots should revert to Salud Aguila.
Private respondents opposed this decision. Taguinod also filed a motion contending that Aguila was not the
real owner of the land as such was inherited by Taguinod from her biological mother and that the same was
only mortgaged to Aguila which property she had already redeemed.
DAR Secretary’s decision
On September 28, 1992, the DAR Secretary issued an Order affirming the August 21, 1991 Order of the
Regional Director and denying petitioner Taguinod's appeal, with the modification that private respondent
Antonino Samaniego was disqualified as a farmer-beneficiary on the ground that he was the landowner of nine
(9) agricultural properties even larger than the aggregate area of the subject lots.
Office of the President’s decison
On January 1, 1995, the OP, through the Executive Secretary, rendered a Decision reversing the January
6, 1993 Order of the DAR Secretary and reinstating the latter's September 28, 1992 ruling that the subject
landholdings are not covered by the OLT program of the government pursuant to P.D. No. 27. The OP ruled
that the said lots, having stemmed from homestead patents, are exempt from the coverage of PD 27.
CA’s Decision
On appeal, the CA ruled in favour of private respondents. The CA however agreed with the OP that the
rights of the homesteader and his/her heirs to own and cultivate personally their land acquired under the
"homestead laws" are superior over those of tenants invoking the "agrarian reform laws”. However, it found
that petitioners Taguinod and Aguila failed to discharge the burden of adducing evidence to prove the identities
of the original homestead patentees and that they are the direct compulsory heirs of the original patentees.
The CA ratiocinated that both petitioners never claimed before the DAR and OP that Salud Aguila was the
original homestead grantee of OCT No. I-3423 issued on January 11, 1936. It pointed out that it was only on
August 13, 1959 or after 24 years from the issuance of the homestead patent that OCT No. I-3423 was
cancelled and TCT No. T-12368 was issued in the name of Salud Aguila. But petitioner Aguila never adduced
evidence on how and under what circumstances landowner Salud Aguila acquired the property, and whether
she was indeed a compulsory heir of the original homestead patentee.
Likewise, the CA found that petitioner Taguinod never adduced evidence to prove that the subject lot covered
by TCT No. T-65348, which she claimed she inherited from her biological mother, was inherited from the
original homestead patentee of whom she and her biological mother are direct compulsory heirs.
ISSUE:
1. Whether or not the petitioners where able to adduce substantial evidence to show ownership through
homestead patent
2. Who is the rightful owner of the said property
3. Whether or not Salud Aguila is entitled to retention rights over the subject lots

HELD:
The petition is bereft of merit.
1. Settled in this jurisdiction is the rule that the rights of a holder of a homestead patent are superior over
the rights of the tenants guaranteed by the Agrarian Reform Law. We agree with the petitioners in
saying that P.D. 27 decreeing the emancipation of tenants from the bondage of the soil and transferring
to them ownership of the land they till is a sweeping social legislation, a remedial measure promulgated
pursuant to the social justice precepts of the Constitution. However, such contention cannot be invoked
to defeat the very purpose of the enactment of the Public Land Act or Commonwealth Act No. 141.
Thus,

"The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a
needy citizen a piece of land where he may build a modest house for himself and family and plant
what is necessary for subsistence and for the satisfaction of life’s other needs. The right of the citizens
to their homes and to the things necessary for their subsistence is as vital as the right to life itself.
They have a right to live with a certain degree of comfort as x x x human beings, and the State which
looks after the welfare of the people’s happiness is under a duty to safeguard the satisfaction of this
vital right."
It is therefore incumbent upon petitioners to identify substantial evidence on record to support the OP’s
finding that their lots are excluded from the coverage of Comprehensive Agrarian Reform Program.
a. In fact, as aptly put by private respondents, petitioners never averred before the DAR and OP that
Salud Aguila was the original homestead patentee or a direct compulsory heir of the homestead
patentee. Without any substantial evidence that would show that petitioner Aguila or Salud Aguila
was entitled to the exemption pursuant to the homestead laws, the lot is indubitably under the
coverage of the OLT.More importantly, the records are bereft of any showing that petitioner
Taguinod had indeed repurchased or redeemed subject property from landowner Salud Aguila.
Thus, absent any evidence to the contrary, the lot is still owned by the owner of record, Salud
Aguila.

b. Verily, the records do not show also who the original homestead patentee was and whether
petitioner Taguinod is a direct compulsory heir of the homestead patentee. Petitioners contend
that the original patentee was one Patrocinia Alvarez, the biological mother of petitioner Taguinod.
This again was not borne out by the records.

c. Other reasons why petitioner’s position is untenable:

 She is not the owner on record of the subject lot covered by TCT No. T-65348, which is
in the name of landowner Salud Aguila.
 If indeed it was mortgaged to landowner Salud Aguila through a pacto de retro contract of
sale, the mortgage encumbrance was not reflected in TCT No. T-65348.
 No deed of such alleged mortgage was presented.
 Her alleged ownership pursuant to a pacto de retro sale is belied by the evidence on
record that the transfer of the subject lot to Salud Aguila was through an absolute deed of
sale as borne by the certification in Tax Declaration No. 13081 under the name of Salud
Aguila.
 The records are bereft of any showing that petitioner Taguinod had indeed repurchased
or redeemed subject property from landowner Salud Aguila. It was only the bare allegation
of petitioners that subject lot had been reacquired or redeemed by petitioner Taguinod.
Thus, absent any evidence to the contrary, the 2.6234-hectare lot covered by TCT No. T-
65348 is still owned by the owner of record, Salud Aguila.

2. Salud Aguila is the owner of the subject lots

Since the transfer of subject landholding by the landowner Salud Aguila to her children, petitioners
herein, on January 19, 1976 is a violation of Memorandum Circular Nos. 2, 2-A and 8, Series of 1974 and
it is therefore imperative to conclude that the said transfer is null and void and of no effect, ownership
therefore of subject lot reverts back to the landowner Salud Aguila.

3. As expressly provided under LOI No. 474, it mandates the DAR Secretary to "undertake to place under
the Land Transfer Program of the Government pursuant to Presidential Decree No. 27, all tenanted
rice/corn lands with areas of seven (7) hectares or less belonging to landowners who own other
agricultural lands of more than seven (7) hectares in aggregate areas or lands used for residential,
commercial, industrial or other urban purposes from which they derive adequate income to support
themselves and their families." However, considering her (Salud Aguila) other eleven (11)
landholdings and the application of LOI No. 474, the Court agrees with the DAR Secretary and CA's
holding that Salud Aguila is not entitled to retention over the subject lots.

Moreover, considering the seemingly simulated transfers made by Salud Aguila over the subject
properties, the Court likewise agrees with the DAR Secretary and CA that these were done to
circumvent the intent and application of PD 27 and the OLT of the Government. It cannot give credence
to said transfers in the light of the clear intent of the law to emancipate the tenants from the bondage
of the land they are cultivating, giving desirable benefits to the tenant-farmers cultivating their own
land.
Premised on said grounds, the issue on petitioners' right to retention over the subject lots is answered
in the negative as they are not the owners, and consequently are not small landowners who are
accorded the right of retention.
TOPIC: PETITIONS AND ACTIONS AFTER ORIGINAL REGISTRATION
A. Surrender of Withheld Duplicate Certificate

LETICIA P. LIGON, petitioner, vs. COURT OF APPEALS and IGLESIA NI CRISTO, respondents.
[G.R. No. 127683. August 7, 1998]

FACTS:
The Islamic Directorate of the Philippines (IDP), by virtue of an absolute deed, sold to Iglesia ni Kristo (INK) 2
parcels of land in Tandang Sora, Barrio Culiat, Quezon City. It was stipulated therein that IDP shall undertake
to evict all squatters in the property within 45 days from the execution of the contract. IDP failed to do this,
hence, INK sued for specific performance with damages.
IDP, on the other hand, alleged that it was INK which violated the contract by delaying the payment of the
purchase price and sought to have the contract of sale rescinded.
Thereafter, INK filed a motion for partial summary judgment on the ground that there was actually no genuine
issue as to any material fact; the TC granted. A year after, INK filed a motion in the same case seeking to
compel Leticia Ligon (petitioner), who was in possession of the certificates of title over the properties as
mortgagee of IDP, to surrender said certificates to the RD of QC for the registration of the absolute deed of
sale in its name. Ligon allegedly refused and/or failed to deliver the certificates despite repeated requests.
To this, Ligon opposed saying that (a) IDP was not served copy of the motion, (b) ownership of INK over the
property was still in issue, (c) and that the trial court had no jurisdiction as the motion involved the registrability
of the document of sale, and she was not made a party in the main case.
The TC granted INK’s motion and ordered petitioner to surrender the certificates of title in open court for the
registration of the absolute deed of sale in the latter’s name and the annotation of the mortgage executed in
favor of petitioner on the new certificates (to be issued to INK). Upon Ligon’s motion, the TC redirected her to
deliver the documents to the RD of QC.
ISSUE:
Whether or not INK has a superior right to the possession of the owner’s copies of the certificated of title.
HELD:
YES. Under our land registration law, no voluntary instrument shall be registered by the Register of Deeds
unless the owner’s duplicate certificate is presented together with such instrument, except in some cases or
upon the order of the court for cause shown. In case the person in possession refuses or fails to surrender the
same to the RD so that a voluntary document may be registered and a new certificate issued, Sec. 107 of P.D.
No. 1529 states:
…Where a voluntary instrument cannot be registered by reason of the refusal or failure of the holder to
surrender the owner’s duplicate, the party in interest may file a petition in court to compel surrender of the
same to the RD. The court, after hearing, may order the registered owner or any person withholding the
duplicate certificate to surrender the same and direct the entry of a new certificate or memorandum upon such
surrender. If the person withholding the duplicate certificate is not amenable to the process of the court, of if
for any reason the outstanding owner’s duplicate cannot be delivered, the court may order the annulment of
the same as well as the issuance of a new certificate of title in lieu thereof.
Pursuant to Sec. 2 of P.D. No. 1529, the distinction between the RTC’s general and the limited jurisdiction
when acting merely as a cadastral court has been eliminated. Aimed at avoiding multiplicity of suits, the change
has simplified registration proceedings by conferring upon the RTCs the authority to act not only on
applications for original registration but also over petitions filed after original registration of title, with power to
hear and determine all questions arising upon such applications or petitions.
Even while Sec. 107 of PD 1529 speaks of a petition which can be filed by one who wants to compel another
to surrender the certificates of title to the RD, this does not preclude a party to a pending case to include as
incident therein the relief stated under said section, especially if the subject certificates of title to be surrendered
are intimately connected with the subject matter of the principal action. The principal action is based on
expediency and in accordance with the policy against multiplicity of suits.
The order directing the surrender of the certificates to the RD in order that the deed be registered in favor of
INK cannot in any way prejudice her rights and interests as mortagee, since any lien annotated on the previous
certificates which subsists shall be incorporated or carried over to the new certificates of title.

BBIBLIA TOLEDO-BANAGA and JOVITA TAN IBLIA TOLEDO-BANAGA and JOVITA TAN, petitioners
vs COURT OF COURT OF APPEALS and CANDELARIO DAMALERIO
FACTS:
Petitioner Banaga filed an action for redemption of her property which was earlier foreclosed and later sold in
a public auction to the respondent. The trial court declared petitioner to have lost her right for redemption and
ordered that certificate of title be issued to the respondent which the petitioner caused an annotation of notice
of lispendens to the title.
On appeal, the CA reversed the decision and allowed the petitioner to redeem her property within a certain
period. Banaga tried to redeem the property by depositing to the trial court the amount of redemption that was
financed by her co-petitioner Tan. Respondent opposed in that she made the redemption beyond the period
ordered by the court.
The lower court however upheld the redemption and ordered the Register of Deeds to cancel the respondent’s
title and issue a new title in favor of the petitioner. In a petition for certiorari before the CA by the respondent,
another notice of lispendens was annotated to the title. CA issued a temporary restraining order to enjoin the
execution of the court order.
Meanwhile, Banaga sold the property to Tan in the absolute deed of sale that mentions the title of the property
still in the name of the respondent which was not yet cancelled. Despite the lispendens on the title, Tan
subdivided the lot into a subdivision plan which she made not in her own name but that of the respondent.
Tan then asked the Register of Deeds to issue a new title in her name. New titles were issued in Tan’s name
but carried the annotation of the two notices of lispendens. Upon learning the new title of Tan the respondent
impleaded her in his petition.
The CA later sets aside the trial court’s decision and declared the respondent as the absolute owner of the
property for failure of the petitioner to redeem the property within the period ordered by the court.
The decision was final and executory and ordered the Register of Deeds to reinstate the title in the name of
the respondent. The Register of Deeds refused alleging that Tan’s certificate must be surrendered first. The
respondent cited the register of deeds in contempt but the court denied contending that the remedy should be
consultation with the Land Registration Commissioner and in its other order denied the motion of respondent
for writ of possession holding that the remedy would be to a separate action to declare Tan’s title as void.
In its motion for certiorari and mandamus to the CA, the court set aside the two assailed orders of the trial
court and declared the title of Tan as null and void and ordered the Register of Deeds to reinstate the title in
the name of the respondent.
Petitioners now argued that Tan is a buyer in good faith and raised the issue on ownership of the lot.

ISSUE:
1) Whether not Tan is a buyer in good faith.
2) Whether or not the refusal of the RD on the reason that the certificates of title of Tan must first be
surrendered is justified.

HELD:
The Court is not convinced of the arguments proffered by petitioners.
Such issue had already been clearly and categorically ruled upon by the CA and affirmed by this Court, wherein
private respondent was adjudged the rightful and absolute owner thereof. The decision in that case bars a
further repeated consideration of the very same issue that has already been settled with finality. Under the
principle of res judicata, the Court and the parties, are bound by such final decision, otherwise, there will be
no end to litigation.
They argue that the winning party must wait execution until the losing party has complied with the formality of
surrender of the duplicate title. Such preposterous contention borders on the absurd and has no place in our
legal system.
The surrender of the duplicate is implied from the executory decision since petitioners themselves were parties
thereto. Besides, as part of the execution process, it is a ministerial function of the Register of Deeds to comply
with the decision of the court to issue a title and register a property in the name of a certain person, especially
when the decision had attained finality, as in this case.
At the time of the sale, the person from whom petitioner Tan bought the property is neither the registered
owner nor was the former authorized by the latter to sell the same. She knew she was not dealing with the
registered owner or a representative of the latter. One who buys property with full knowledge of the flaws and
defects in the title of his vendor is enough proof of his bad faith and cannot claim that he acquired title in good
faith as against the owner or of an interest therein. Being a buyer in bad faith, petitioner Tan cannot acquire a
better rights than her predecessor in interest, for she merely stepped into the shoes of the latter.

Topic: Amendment and Alteration of Certificates


Doris Chongbian Oliva vs RP

FACTS:
Chongbian-Oliva is a registered owner of a land in Talamban, as evidenced by TCT 5455. This TCT
originated from OCT 1066 from a free patent. This free patent however, contained a condition that a forty-
meter legal easement from the bank of any river or stream shall be preserved as permanent timberland.
In October 2001, petitioner filed a petition for reduction of legal easement arguing that the property has been
reclassified to residential, as shown by the tax declaration and certification by the Office of City Assessor.
Petitioner contends that because of the current classification, she is only obliged to give out three meters as
easement.
DENR countered that such property is inalienable.
RULING:
FIRST ISSUE: Is the property public or private land?
Lands of public domain may be classified by the President, into alienable and disposable, timber and
mineral lands. However, only A&D lands may be disposed of through any of the forms of concessions
enumerated in the law.
A free patent is one of such concessions and once it is registered and the corresponding certificate of
title issued, the land covered by them ceases to be part of the public domain and becomes private
property. 16
Thus the issuance of the patent, and the subsequent issuance of corresponding OCT and TCT of the
property in this case, converted it into private land. It is inconsistent for an alienable land of the public
domain to be covered by a free patent and at the same time retain its character as public land.

SECOND ISSUE: Is the applicable legal easement forty or three meters?


Legal Basis:
 Sec 90(i) of CA141: forty-meter legal easement from the bank of any river or stream shall be
preserved as permanent timberland
 AO 99-21 of DENR: forty-meters from the banks on each side of the stream shall be demarcated
and preserved as permanent timberland; three-meters along banks of rivers and streams and
shores and lakes in urban areas
 Water Code of the Philippines: the banks of rivers and streams and the shores of the seas and
lakes within a zone of three meters in urban areas, twenty meters in agricultural areas and forty
meters in the forest areas are subject to easement for public use
Because the property underwent several surveys for purposes of subdivision, consolidation or
consolidation-subdivision, the property is now considered as residential. Another factor is that the trial
court properly took judicial notice – the cognizance of certain facts which may properly take and act on
without proof because they already know them, that Talamban is an urban area as it has a population
density of more than 1000 persons per sq km. And thus presently, only three meters is required to be
demarcated and preserved as permanent timberland in urban areas
The Philippine Cotton Corporation vs Naraindas Gagoomal &Engracio Ang

FACTS:
The Pacific Mills Corporation owned 5 parcels of land in Quezon City covered by four certificates of title.
Pacific Mills sold the land to Naraindas Gagoomal and Engracio Ang in 1979.
In 1983, petitioner led a collection case against Pacific Mills before the Regional Trial Court (RTC) of Pasig
on the ground of alleged failure to fulfill its obligation under a contract of loan. After hearing, Philippine
Cotton Corporation won the case in the lower court against Pacific Mills which led to the attachment of the 5
parcels of land previously owned by Pacific Mills. Pacific Mills appealed until it reached the Supreme Court.
While the case was pending in the SC, the QC Registry of Deeds was razed by fire thereby destroying all
records. In 1992, Pacific Mills filed for a reconstitution of land. It was granted but it was immediately
cancelled in favor of Ang and Gagoomal. Subsequently, Ang and Gagoomal received clean TCTs.
Meanwhile, Philippine Cotton received a favorable judgment from the SC and they requested the Register of
Deeds to annotate the same on the titles issued to Ang and Gagoomal. The Register of Deeds then
annotated the said titles and then sent a letter to Ang and Gagoomal to surrender their duplicates.
Ang and Gagoomal petitioned for the removal of the annotation. Philippine Cotton argued that the RD can
validly annotate a Supreme Court decision on the said titles and that the same is its ministerial duty.
Petitioner asserts that a cursory reading of Section 71 of Presidential Decree No. 1529 shows that it is the
ministerial duty of the Register of Deeds, in the matter of an attachment or other liens in the nature of
involuntary dealing in registered land, to "send notice by mail to a registered owner requesting him to
produce his duplicate certificate so that a memorandum of attachment or other lien may be made thereon." It
also cites, as proof of its supposition, Section 10 (General functions of Registers of Deeds) of the Property
Registration Decree (P.D. No. 1529).
The trial court rendered judgment in favor of respondents. Under the circumstances, respondent [the
Registry of Deeds of Quezon City] should and could have properly refused such request instead of
immediately annotating it.
Unsatisfied with the outcome of the case, petitioner led a notice of appeal before the CA. The appellate court
dismissed the appeal because the issue raised by the petitioner was a pure question of law, over which the
CA had no jurisdiction.

ISSUE:
Whether or not Philippine Cotton’s contention is correct.

RULING:
No. Philippine Cotton’s contention is not correct.
Section 10 of P.D. No. 1529 merely involves the general functions of the Register of Deeds, while Section 71
thereof relates to an attachment or lien in a registered land in which the duplicate certificate was not
presented at the time of the registration of the said lien or attachment. Undoubtedly, the foregoing provisions
find no application in the present case.
Furthermore, Sections 8 and 11 of the same Act provide for the procedure for the notation of an interest that
did not appear in the reconstituted certificate of title, mandating that a petition be filed before a court of
competent jurisdiction.
Clearly, therefore, it is not the ministerial function of the Register of Deeds to record a right or an interest that
was not duly noted in the reconstituted certificate of title. As a matter of fact, this task is not even within the
ambit of the Register of Deed's job as the responsibility is lodged by law to the proper courts.
Under the circumstances, the Registry of Deeds of Quezon City should and could have properly refused
such request instead of immediately annotating it. In the same light, “The Register of Deeds may likewise
properly refuse registration of an order attachment when it appears that the title involved is not in the name
of the defendant and there is no evidence submitted to indicate that the said defendant has any present or
future interest in the property covered by the titles.”
Note that in the case won by Philippine Cotton before the SC, the defendant therein was Pacific Mills. Ang
and Gagoomal acquired the property before the resolution of the case, hence, the annotation is not valid
because Ang and Gagoomal were not parties to the said case.
Paz vs Republic

FACTS:
The dispute stemmed for a petition for cancellation of Original Certificate of Title filed by petitioner. The
petition averred that he is the owner of a parcel of land that was included in the Original Certificate of Title in
the name of the Republic of the Philippines. Thereafter, a new title of the land was then issued after the
Republic joint venture agreement was entered between the republic and respondent which was
subsequently subdivided in favor of third parties. He thus moved for the cancellation of the original title under
the Republic’s name and all succeeding titles that emanated from it.
For the respondent’s part, they argued among others, that petitioner’s basis for the petition is misplaced
since Sec. 108 of the Property Registration Decree authorizes only amendment and alteration of certificates
of title, not cancellation thereof and that the complaint is an initiatory pleading that is insufficient in requisites.
Upon submission, the RTC dismissed the petition for the reason that the action although entitled a Petition
for cancellation of a title, which is a complaint by itself, is complete with the name of the parties, the subject
matter, the cause of action, and the reliefs prayed for, which are all components of a regular complaint.It is in
fact an initiatory pleading, and is not a mere motion.
The petitioner raised the matter to the Court of Appeals which denied the petition for certiorari. They then
raised the matter to SC stating that the CA committed grave abuse of discretion by dismissing his petition for
failure to meet the requirements needed in initiatory pleadings.

ISSUE:
Did the lower and appellate court committed grave abuse of discretion by denying the petition for
cancellation of title?

RULING:
No. Section 108.Amendment and alteration of certificates provides in categorical terms the instances upon
which alterations may be made:
(a) When registered interests of any description, whether vested, contingent, expectant, or inchoate,
have terminated and ceased;
(b) When new interests have arisen or been created which do not appear upon the certificate;
(c) When any error, omission or mistake was made in entering a certificate or any memorandum
thereon or on any duplicate certificate;
(d) When the name of any person on the certificate has been changed;
(e) When the registered owner has been married, or, registered as married, the marriage has been
terminated and no right or interest of heirs or creditors will thereby be affected;
(f) When a corporation, which owned registered land and has been dissolved, has not conveyed the
same within three years after its dissolution; and
(g) When there is reasonable ground for the amendment or alteration of title.
In the case at bar, it was found by the court that in reality, the petitioner is seeking the reconveyance of the
property to him. This particular act does not fall within the permissible instances provided for the cancellation
and amendment of certificate of titles. Hence, the petition which was premised on the applicability of Sec.
108, does not find application. Hence, the petition was rightfully denied.
Topic: Notice and Replacement of Lost Duplicate Certificates
Feliciano vs Sps Zaldivar

FACTS:
Heirs of Remigia Feliciano filed a complaint agaist Sps Aurelio for declaration of nullity of TCT and
reconveyance of subject property located in Cagayan de Oro City.
Claims of Sps Zaldivar

 Claimed to have acquired ownership of the lot from Pio Dalman


 Pio Dalman claimed to have acquired property from Ignacio Gil
 Ignacio Gil claimed to have purchased the lot from Remegia Feliciano which was ratified by her
and her uncle through a Joint Affidavit of Conformation of Sale, which was notarized
 Sps Zaldivar claims ONEC possession over the property through themselves and their
predecessors in interest for over 41 years
 Sps Zaldivar filed a petition for the issuance of a new owner’s duplicate of TCT because they
alleged that when they asked Remegia about the duplicate, she claimed it was lost
 They were then able to have the TCT under Remegia’s name cancelled and was issued a TCT
under their name
Claims of Heirs of Feliciano:

 Remegia Feliciano was the registered owner of the subject parcel of land
 The subject lot was leased to Pio Dalman (respondent’s father in-law)
 The subject lot was supposed to be mortgaged to Ignacio Gil, which did not push through. However,
the receipts of the transactions were not returned to Remegia
 She never sold the lot to either Gil or Dalman
 She never executed a joint affidavit of confirmation of sale
 The duplicate of the TCT has always been with her and was never lost
 In fact, the purported sale was never annotated in their TCT
RTC: In favor of Remegia
It declared that TCT in the name of Zaldivar was null and void for having been obtained through
misrepresentation, fraud or evident bad faith by claiming in his affidavit that Remegia's title 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." Aurelio Zaldivar's 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 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 titlesince 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
50 and 51 of Act No. 496, otherwise known as The Land Registration Act

CA: Reversed RTC decision and decided in favor of Sps Zaldivar


The appellate court gave credence of the deed of Sale and Joint Affidavit of Confirmation of Sale.
The fact that the said transaction was not annotated on Remegia's 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.
CA further ruled that prescription and laches or estoppel had already set in against Remegia as the action was
filed more than 17 yrs after the transaction (10 yrs prescription pd only), and that Feliciano and Zaldivar have
basically been neighbors and that sps Zaldivar constructed a house on the lot without action from Remegia
SC: In favor of Heirs of Remegia Feliciano
On the RTC’s reissuance of owner’s duplicate to Sps Zaldivar
The issued duplicate is VOID. The duplicate was never lost and was in the possession of Remegia during the
reissuance. The TCT in Zaldivar’s name is likewise nullified was it emanated from the new owner’s duplicate
of TCT which was procured through fraud. “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”

On the CA’s reliance on the Joint Affidavit of Confirmation of the purported Sale
A Joint Affidavit, by itself, is not a mode of acquiring ownership. Moreover, the entire affidavit was written in
English. However, Remegia could not read and understand English. And nowhere was it stated or proved that
the contents were fully explained to Remegia in the language that she understood before signing the same.
Thus, there is a presumption of fraud or mistake in the execution of the affidavit.

On claim of acquisitive prescription


The claim of open, public and continuous occupation for over 41 years is unavailing. A land titled cannot be
acquired by prescriptive acquisition. Neither can Zaldivars rely on the indefeasiblity of their TCT, as it must
yield to the TCT of Feliciano which has remained valid. Remegia’s TCT thus prevails over Zaldivars TCT.

On laches and estoppel


Remegia merely tolerated the occupation of respondents.
She did not bother when Zaldivars started introducing improvements as she relied on her title thinking that she
remains owner of the land and that she can get the land because she owns the land. Only upon going to the
RD for purpose of partitioning the lot did she find out that her TCT has been cancelled.
Jurisprudence provides that when possession is merely tolerated by its lawful owner, the right to recover
possession is never barred by laches. Under the circumstances, respondents and Remegia are in mutual bad
faith, and as such would entitle the application of Art 448 of CC treating both parties in good faith. Thus
Remegia has the option to either appropriate the improvements or sell the lot to the Zaldivars.
Tan Po Chu vs CA

FACTS:
FiberTech was a Philippine corporation registered in the Securities Exchange Commission. FiberTech was
also the owner of the subject lot in Marikina, as covered by a TCT under its name.
Felix Chingkoe, in behalf of FiberTech in his claim of being the owner and corporate secretary, executed an
affidavit of loss of the TCT’s owner’s duplicate copy. By the strength of such affidavit of loss, FiberTech filed a
petition for replacement of its owner’s duplicate of TCT.

RTC of Marikina:
GRANTED the petition and ordered the reissuance of the owner’s duplicate of the TCT of said parcel of land.
Tan Po Chu, mother of FiberTech’s incorporators, Faustino and Felix (respondent) Chingkoe, filed a petition
in the CA for annulment of the reissuance of the owner’s duplicate contending that:
1) That the missing owner’s duplicate was in her custody as trustee of the corporation for the purpose of
dissolution
2) Felix was aware that the duplicate was with her
3) Felix and her wife were not stockholders nor owners of the company
4) Felix therefore, has no authority to file for petition of reissuance of the duplicate
5) RTC has no jurisdiction because if an owner’s duplicate TCT has not been lost, the reconstituted title
is void and the court that rendered the decision never acquired jurisdiction

CA:
Dismissed the case on procedural grounds. The CA also brushed aside Tan's substantive argument. It held
that the RTC acquired jurisdiction over the case after complying with the notice and hearing requirements
under Section 109 of Presidential Decree (P.D.) No. 1529 or the Property Registration Decree.

RULING:
This Court cannot ignore the implications if the petitioner's allegations — that she has the original owner's
duplicate TCT of the subject lot and that the SEC revoked FiberTech's registration in 2003 — are true. There
will currently exist two owner's duplicate TCTs over the same property possessed by two contending factions
in an intra-corporate dispute of a defunct corporation. This anomalous situation can potentially bring
considerable harm to the general public and to the integrity of our
Torrens system. This Court, therefore, cannot simply leave the parties as they were.
The CA committed a grave error when it brushed aside Tan's argument that the RTC rendered its decision
without jurisdiction. It ruled that the replacement of a lost duplicate certificate is a proceeding in rem, directed
against the whole world; therefore, the RTC acquired jurisdiction when it complied with the notice and hearing
requirements under Section 109 of P.D. 1529.
The CA completely missed the point because Tan did not assail the RTC's jurisdiction by alleging
noncompliance with the requirements of notice and hearing; she questioned the RTC's jurisdiction over the
res by claiming that the allegedly lost owner's duplicate was, in fact, not lost but was in her custody. Therefore,
the RTC's compliance with Section 109 of P.D. 1529 was irrelevant.
We have consistently held that when the owner's 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 failed to acquire
jurisdiction over the subject matter — the allegedly lost owner's duplicate. The correct remedy for the registered
owner against an uncooperative possessor is to compel the surrender of the owner's duplicate title through an
action for replevin.
By dismissing Tan's petition for annulment of judgment solely based on a technicality and on an irrelevant
consideration, the CA acted with grave abuse of discretion. The outright dismissal was also made at the
expense of the substantial justice and of the general public who have a right to rely on the integrity of our
Torrens system. This amounted to an evasion of its positive duty to uphold the integrity of our Torrens system
and to a virtual refusal of its duty to determine and strike down decisions rendered without jurisdiction.

HELD:
GRANT Petition for Certiorari. RTC ruling is set aside, and the case is remanded back to the CA to proceed
hearing the case and decide on the factual issues raised by petitioner.
IN RE: ORIGINAL CERTIFICATE OF TITLE NO. O-1385; SP. NO. 695;
BOOK NO. 1-5,
PATENTEE — PAULINO P. GOCHECO. CESARIO GOCHECO, vs.
FRANCISCO T. ESTACIO, ET AL.

FACTS:
Paulino Gocheco, registered owner of a parcel of land in Zambuanga del Sur, evidenced by OCT 1385, lost
the duplicate copy of the said OCT and notwithstanding diligent search, was unable to locate such copy.
However, the records of the RD of Zamboanga del Sur of the OCT is found intact and complete.
Cesario Gocheco, son of Paulino Gocheco, in his capacity as heir of the registered owner, filed a petition for
issuance of another owner’s duplicate copy of the OCT.
A certain Francisco Estacio opposed the petition claiming continuous, peaceful and lawful adverse possession
of the property.

RTC:
Suspended the hearing of the petition and required petitioner to publish within 30 days his petition or to file a
testate proceeding, AND to secure appointment of a legal representative to the estate of registered owner.

RULING:
GRANTED THE PETITION FOR ISSUANCE OF NEW OWNER’S DUPLICATE COPY OF OCT
SEC. 109. If a duplicate certificate is lost or destroyed, or cannot be produced by a grantee, heir,
devisee, assignee, or other person applying for the entry of a new certificate to him or for the
registration of any instrument, a suggestion of the fact of such loss or destruction may be filed by the
registered owner or other person in interest and registered. The court may thereupon, upon the petition
of the registered owner or other person in interest, after notice and hearing direct the issue of a new
duplicate certificate, which shall contain a memorandum of the fact that it is issued in place of the lost
duplicate certificate, but shall in all respects be entitled to like faith and credit as the original duplicate
for all the purposes of this act.

In view that there exist of the complete record of the RD, and the fact that petition is not for reconstitution,
only an issuance of owner’s duplicate copy, as provided by RA 26, there is no necessity for publishing notice
of hearing thereof. All the more, Section 109 does not require an appointment of legal representative of the
estate since the petition does not seek the distribution of the estate.
As to the oppositors, they have no personality to intervene in the present proceeding. Their claim of ownership
has to be properly instituted in a separate, independent and ordinary civil action.
Topic: Reconstitution of Lost or Destroyed Original Torrens Title
SAINT MARY CRUSADE TO ALLEVIATE POVERTY OF BRETHREN
FOUNDATION, INC., v. HON. TEODORO T. RIEL

FACTS:
A petition for the judicial reconstitution of a Torrens title must strictly comply with the requirements prescribed
in Republic Act No. 26; otherwise, the petition should be dismissed. Saint Mary Crusade to Alleviate Poverty
of Brethren Foundation, Inc. (Saint Mary), a foundation, applied for the judicial reconstitution of Original
Certificate of Title (OCT) No. 1609 and for the issuance of a new OCT which had been burnt and lost in the
fire in the late 80’s.
The respondent, Judge Teodoro T. Riel of RTC Branch 85, initially gave due course to the petition, but later
dismissed it upon receipt of the report by the Land Registration Authority which recommended that the case
be dismissed. The petitioner moved for reconsideration, attaching thereto the following documents: (1) the
copy of the original application for registration dated January 27, 1955; (2) the notice of initial hearing dated
June 23, 1955; (3) the letter of transmittal to the Court of First Instance in Quezon City; (4) the copy of the
Spanish Testimonial Title No. 3261054 dated March 25, 1977 in the name of Eladio Tiburcio; (5) the copy of
Tax Assessment No. 14238; and (6) the approved Plan SWD-37457. Still, the petition for reconstitution was
dismissed considering the Opposition filed by the Republic of the Philippines and University of the Philippines
and Saint Mary’s inability to present sufficient documentary evidence.
Hence, the petitioner resorted directly to the Supreme Court through a petition for certiorari and mandamus,
claiming that the respondent abused his discretion and unlawfully neglected the performance of an act which
is specifically upon him under Rule 7, Section 8 of the Rules of Court.

ISSUE:
Should the petition for reconstitution of title be granted to Saint Mary?

RULING:
No. The Saint Mary had no factual and legal bases for reconstitution due to its failure to prove the existence
and validity of the certificate of title sought to be reconstituted. No duplicate or certified copy of OCT No. 1609
was presented and thereby, it disobeyed Section 2 and Section 3 of Republic Act No. 26, the provisions that
expressly listed the acceptable bases for judicial reconstitution of an existing Torrens title. Additionally, the
land covered by the petition for reconstitution related to the same area that formed the UP campus. The UP’s
registered ownership of the land comprising its campus has long been settled under the law, to wit:
Sec. 2. Original certificates of title shall be reconstituted from such of the sources hereunder enumerated as
may be available, in the following order:
(a) The owner’s duplicate of the certificate of title;
(b) The co-owner’s, mortgagee’s, or lessee’s duplicate of the certificate of title;
(c) A certified copy of the certificate of title, previously issued by the register of deeds or by a legal
custodian thereof;
(d) An authenticated copy of the decree of registration or patent, as the case may be, pursuant to which
the original certificate of title was issued;
(e) A document, on file in the registry of deeds, by which the property, the description of which is given in
said document, is mortgaged, leased or encumbered, or an authenticated copy of said document
showing that its original had been registered; and
(f) Any other document which, in the judgment of the court, is sufficient and proper basis for reconstituting
the lost or destroyed certificate of title.
Sec. 3. Transfer certificates of title shall be reconstituted from such of the sources hereunder enumerated as
may be available, in the following order:
(a) The owner’s duplicate of the certificate of title;
(b) The co-owner’s, mortgagee’s, or lessee’s duplicate of the certificate of title;
(c) A certified copy of the certificate of title, previously issued by the register of deeds or by a legal
custodian thereof;
(d) The deed of transfer or other document, on file in the registry of deeds, containing the description of
the property, or an authenticated copy thereof, showing that its original had been registered, and
pursuant to which the lost or destroyed transfer certificate of title was issued;
(e) A document, on file in the registry of deeds, by which the property, the description of which is given in
said document, is mortgaged, leased or encumbered, or an authenticated copy of said document
showing that its original had been registered; and
(f) Any other document which, in the judgment of the court, is sufficient and proper basis for reconstituting
the lost or destroyed certificate of title.
Accordingly, the dismissal of the petition for judicial reconstitution by respondent Judge only safeguarded the
UP’s registered ownership. In so doing, respondent Judge actually heeded the clear warnings to the lower
courts and the Law Profession in general against mounting or abetting any attack against such ownership.
REPUBLIC OF THE PHILIPPINES, Represented by the Land Registration
Authority vs. SPOUSES ROBERTO and MARINA SANCHEZ

FACTS:
Sanchez filed a petition in the trial court to reconstitute the original of Transfer Certificate of Title No. 252708,
covering a parcel of land measuring 2,991 square meters ("Lot 1"). Respondent alleged that the original of
TCT No. 252708 was among the documents destroyed by the fire which razed the Office of the Register of
Deeds, Quezon City in June 1988. Respondents sought reconstitution under Section 3(a) of Republic Act No.
26 ("RA 26") based on Marina's duplicate title.
The Solicitor General filed his Comment to the petition, noting that since the petition is based on Section 3(a)
of RA 26, the trial court should defer acting on the petition until the Land Registration Authority (LRA) has
submitted its Report on the petition as required under Land Registration Commission (now LRA) Circular No.
35 ("Circular No. 35").
In response to the Solicitor General's Comment, respondents submitted:
1) Report, dated 5 September 1996 ("First Report"), signed by Benjamin Bustos ("Bustos"), Chief,
Reconstitution Division, LRA.
2) Certification from the Quezon City Register of Deeds, that the original of TCT No. 252708 was among
those destroyed in the 1988 fire
3) Certification of the Office of the City Treasurer, Quezon City, confirming that respondents last paid the
real estate taxes on Lot No. 1 in January 1996.
In its Order dated 28 October 1996, the trial court granted reconstitution and ordered TCT No. 252708
reconstituted. However, in its Order of 17 July 1998, the trial court set aside the 28 October 1996 Order and
dismissed LRC Case No. Q-96-8296. The trial court held that the unscrupulous manner by which the
petitioners misled the Court is glaring in two (2) instances, to wit: 1) the petition unceremoniously
omitted the names of the registered owners of TCT Nos. 187040 and 187042; and 2) the spurious LRA
Report submitted by the petitioners.
However, the Court of Appeals reversed the decision of the RTC and granted respondents' petition.
Hence, this petition. Petitioner reiterates its claim that the trial court did not acquire jurisdiction over LRC Case
No. Q-96-8296 for lack of actual notice to all interested parties as required under Section 13 in relation to
Section 12 of RA 26.

ISSUE:
Whether or not the trial court acquired jurisdiction over LRC Case No. Q-96-8296?

RULING:
NO. The trial court did not acquire jurisdiction over LRC Case No. Q-96-8296.
Respondents are correct in saying that the service of notice of the petition for reconstitution filed under RA 26
to the occupants of the property, owners of the adjoining properties, and all persons who may have any interest
in the property is not required if the petition is based on the owner's duplicate certificate of title or on that of
the co-owner's, mortgagee's, or lessee's. This was our ruling in Puzon v. Sta Lucia Realty and Development,
Inc., that the requirements under Sections 12 and 13 do not apply to all petitions for judicial reconstitution, but
only to those based on any of the sources specified in Section 12, that is, "sources enumerated in Section
2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e), and/or 3(f) of this Act."
However, contrary to respondents' claim, Puzon finds no application here. No report from a pertinent
government agency challenging the authenticity of Puzon's duplicate certificates of title was presented in
Puzon. Thus, when Branch 80 granted reconstitution, Puzon's duplicate transfer certificates of title remained
unchallenged.
This court was faced with substantially the same situation in Director of Lands v. Court of Appeals. In that
case, the petition for reconstitution, as in the present case, was filed under Section 3(a) of RA 26 based on an
alleged owner's duplicate certificate of title. However, the Director of Lands, in an adverse Report, challenged
the authenticity of the purported duplicate certificate of title. The trial court denied reconstitution but the Court
of Appeals reversed the trial court's ruling. Upon further review, we reversed the Court of Appeals and
dismissed the reconstitution petition. We held that with the Director of Lands' Report, the petition for
reconstitution "falls squarely" under Section 3(f) of RA 26, thus:
In the instant case, the change in the number of the certificate of title sought to be reconstituted from T-12/79
to TCT No. 42449 rendered at once the authenticity or genuineness of respondent's certificate of title under
suspicion or cloud of doubt. And since respondent alleges that the technical descriptions under both certificates
of title are identical and the same, x x x, We hold that the instant petition for judicial reconstitution falls squarely
under Section 3(f), Republic Act No. 26, because the Director of Lands claims that the respondent's duplicate
of the Certificate of Title No. T-12/79 or TCT No. 42449 are [sic] both fake and fictitious.24 (Emphasis supplied)
Consequently, we applied Sections 12 and 13 of RA 26 and held that for non-compliance with these provisions,
the trial court did not acquire jurisdiction over the petition for reconstitution.
Therefore, it is Section 13 in relation to Section 12 of RA 26 which applies to LRC Case No. Q-96-8296. Hence,
in addition to its posting and publication, the notice of hearing of LRC Case No. Q-96-8296 should also have
been served through mail on the owners of the adjoining properties and all persons who may have any interest
in the property.
Further, in the case at bar, the jurisdiction or authority of the Court of First Instance is conferred upon it by
Republic Act 26 entitled "An Act providing a special procedure for the reconstitution of Torrens Certificates of
Title lost or destroyed," approved on September 25, 1946. The Act specifically provides the special
requirements and mode of procedure that must be followed before the court can act on the petition and grant
to the petitioner the remedy sought for. These requirements and procedure are mandatory. The petition for
reconstitution must allege the jurisdictional facts; the notice of hearing must also be published and posted in
particular places and the same sent to specified persons. Specifically, the requirements and procedure are set
forth in detail under Sections 12 and 13 of the.
For non-compliance with the actual notice requirement in Section 13 in relation to Section 12 of RA 26, the
trial court did not acquire jurisdiction over LRC Case No. Q-96-8296. The proceedings in that case were thus
a nullity and the 28 October 1996 Order was void.
Heirs of Venturanza vs Republic

FACTS:
This case stemmed from a title issued to petitioners which allegedly originated from a reconstituted title issued
to Florencio Mora. However, the date of registration of the said land cannot be clearly ascertained. When the
owner of the land sought to sell the land but did not materialize, the Republic took certain steps to ascertain
the veracity of the title. Tracing the history of the title, the Republic concluded that the title is filled with anomaly.
This prompted the Republic to file a complaint for Cancellation of Certificate of Title and Reversion of the Land
to the Public Domain.
In resolving the suit in favor of the Republic, the trial court principally anchored its judgment on the ground
that the reconstituted title issued in the name of Florencio Mora could have been fraudulently secured,
hence, does not legally exist. The court further ruled that since the reconstituted title issued to Florencio
Mora is a nullity, then the order for its reconstitution did not attain finality and therefore may be attacked
anytime.
The petitioners appealed the matter to the CA on the premise that the title issued to Mora which they derived
is already indefeasible on the ground that upon the lapse of one (1) year, the decision granting reconstitution
of Mora’s title becomes final. The petition was dismissed by the CA.

ISSUE:
Does a reconstituted title become indefeasible 1 year after finality?

RULING:
The petitioners relied on a mistaken presumption that the reconstituted title becomes indefeasible
upon achieving finality after a year allegedly as what is mandate under PD 1529. However, the provisions
that they relied merely refers to original decrees of registration and not including titles which underwent
reconstitution.
Furthermore, it is clear that the land subject in dispute was originally part timberland. Thus, it could not have
been registered in the name of petitioners or their predecessors-in-interest for the simple reason that under
the Constitution, timberlands, which are part of the public domain, cannot be alienated
Republic vs Catarroja

FACTS:
This case stemmed from a petition for reconstitution filed by the respondents. It was alleged in their petition
that they have inherited a parcel of registered land from their parents but such OCT was lost due to a fire that
burned down the Old Cavite Capitol Building. The RTC granted the reconstitution on the basis of the
certification issued by the LRA that a decree was issued pertaining to the land.
However, the CA initially rendered a decision reversing the RTC’s ruling but was further amended through
granting the said petition.

ISSUE:
Did the respondents satisfy the requirements for reconstitution of title?

RULING:
There are 6 sources provided for by Section 2 of RA. 26 for the reconstitution of lost or destroyed Torrens
certificates of title:
(a) The owners duplicate of the certificate of title;
(b) The co-owners, mortgagees, or lessees duplicate of the certificate of title;
(c) A certified copy of the certificate of title, previously issued by the register of deeds or by a legal
custodian thereof;
(d) An authenticated copy of the decree of registration or patent, as the case may be, pursuant to
which the original certificate of title was issued;
(e) A document, on file in the Registry of Deeds, by which the property, the description of which
is given in said document, is mortgaged, leased or encumbered, or an authenticated copy of
said document showing that its original had been registered; and
(f) Any other document which, in the judgment of the court, is sufficient and proper basis for
reconstituting the lost or destroyed certificate of title.
In this case, the Court found that the applicant failed to prove and produce any of the following documents
required in the aforementioned section. Further, the documents that they allegedly have as a basis for
reconstitution do not come from official sources nor did they prove that they have sufficiently undertaken
adequate measures to secure the documents needed above but was unable to find such.
Furthermore, although the LRAs certification and its report confirmed the issuance of a decree, these
documents do not sufficiently prove that a title had in fact been issued to the parents of the Catarrojas pursuant
to such decree. Indeed, it remains uncertain what kind of decree the land registration court issued in the case.
Absent a clear and convincing proof that an original certificate of title had in fact been issued to their parents
in due course, the Catarrojas cannot claim that their predecessors succeeded in acquiring title to the subject
lots. The nature of reconstitution of a lost or destroyed certificate of title denotes a restoration of the instrument
in its original form and condition. That cannot be done without proof that such certificate of title had once
existed.
Topic: Estoppel in Action for Cancellation of Title
BARSTOWE PHILS vs REPUBLICFACTS:

FACTS:
This case involves the conflicting titles to the same parcels of land (subject lots) of petitioner Barstowe
Philippines Corporation (BPC) and the respondent Republic of the Philippines (Republic).
Due to the fire that gutted the Office of the Quezon City Register of Deeds on 11 June 1988 and destroyed
many certificates of title kept therein, Antonio sought the administrative reconstitution of the original copies
and owner’s duplicate copies of 2 TCTs.
The Republic applied for administrative reconstitution of the same with the LRA.
It was then that the Republic came to know that another party had applied for reconstitution which also covered
the same lots.
The RTC rendered judgment declaring both BPC and Republic as buyers in good faith. But it upheld BPC’s
rights over the republic since it was registered earlier.
The Ca ruled for the Republic.

ISSUE:
Who between BPC and the Republic has a better title over the subject lots?

HELD:
Ultimately, this Court is called upon to determine which party now has superior title to the subject lots: the
Republic, BPC, the intervenors Abesamis, Nicolas-Agbulos, and spouses Santiago, or Servando’s heirs? BPC,
the intervenors Abesamis, Nicolas-Agbulos, spouses Santiago, and Servando’s heirs derived their title to the
subject lots from Servando’s TCTs No. 200629 and 200630. This Court then is compelled to look into the
validity, authenticity, and existence of these two TCTs.
However, there is an absolute dearth of information and proof as to how Servando acquired ownership and
came into possession of the subject lots.
Relying on the findings of the LRA, it was established that TCTs No. 200629 and 200630 were forged and
spurious, their reconstitution was also attended with grave irregularities. BPC was unable to attack the
authenticity and validity of the titles of the Republic to the subject lots, and could only interpose the defense
that it was a buyer in good faith. It points out that it purchased the subject lots from Servando and registered
the same, way before the titles of Servando were declared null by the RTC. Under Section 55 of the Land
Registration Act, as amended by Section 53 of Presidential Decree No. 1529, an original owner of registered
land may seek the annulment of a transfer thereof on the ground of fraud. However, such a remedy is without
prejudice to the rights of any innocent holder for value with a certificate of title. A purchaser in good faith and
for value is one who buys the 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 person in the property.
It has been consistently ruled that a forged deed can legally be the root of a valid title when an innocent
purchaser for value intervenes. A deed of sale executed by an impostor without the authority of the owner of
the land sold is a nullity, and registration will not validate what otherwise is an invalid document. However,
where the certificate of title was already transferred from the name of the true owner to the forger and, while it
remained that way, the land was subsequently sold to an innocent purchaser, the vendee had the right to rely
upon what appeared in the certificate and, in the absence of anything to excite suspicion, was under no
obligation to look beyond the certificate and investigate the title of the vendor appearing on the face of said
certificate.
Now the question is whether BPC qualifies as an innocent purchaser for value which acquired valid titles to
the subject lots, despite the fact that the titles of its predecessor-in-interest were found to be forged and
spurious.
This Court finds in the negative.
BPC cannot really claim that it was a purchaser in good faith which relied upon the face of Servando’s titles. It
should be recalled that the Quezon City Register of Deeds caught fire on 11 June 1988.
Presumably, the original copies of TCTs were burnt in the said fire. Servando’s heirs sought the administrative
reconstitution of the TCTs. If BPC bought the subject lots after TCTs were destroyed when the Quezon City
Register of Deeds burned down, but before the said certificates were reconstituted, then on the face of what
titles did BPC rely on before deciding to proceed with the purchase of the subject lots? There was no showing
that there were surviving owner’s duplicate copies of TCTs.
Without the original copies and owner’s duplicate copies of TCTs, BPC had to rely on the reconstituted
certificates.
Under section 7 of Republic Act No. 26,"Reconstituted titles shall have the same validity and legal effect as
the originals thereof" unless the reconstitution was made extra judicially.
In this case, TCT’s were reconstituted administratively, hence, extra judicially. In contrast to the judicial
reconstitution of a lost certificate of title which is in rem, the administrative reconstitution is essentially ex-parte
and without notice.
The reconstituted certificates of title do not share the same indefeasible character of the original certificates of
title for the following reason
The nature of a reconstituted Transfer Certificate of Title of registered land is similar to that of a
second Owner's Duplicate Transfer Certificate Of Title. Both are issued, after the proper proceedings,
on the representation of the registered owner that the original of the said TCT or the original of the
Owner’s Duplicate TCT, respectively, was lost and could not be located or found despite diligent
efforts exerted for that purpose. Both, therefore, are subsequent copies of the originals thereof. A
cursory examination of these subsequent copies would show that they are not the originals. Anyone
dealing with such copies are put on notice of such fact and thus warned to be extra-careful.
The fact that the TCTs were reconstituted should have alerted BPC and its officers to conduct an inquiry or
investigation as might be necessary to acquaint themselves with the defects in the titles of Servando. This
Court cannot declare BPC an innocent purchaser for value, and it acquired no better titles to the subject lots
than its predecessors-in-interest, Servando and Antonio.
The general rule is that the State cannot be put in estoppel by the mistakes or errors of its officials or agents.
However, like all general rules, this is also subject to exceptions, viz:
"Estoppels against the public are little favored. They should not be invoked except in rare and
unusual circumstances, and may not be invoked where they would operate to defeat the effective
operation of policy adopted to protect the public. They must be applied with circumspection and
should be applied only in those special cases where the interests of justice clearly require it.
Nevertheless, the government must not be allowed to deal dishonorably or capriciously with its
citizens, and must not play an ignoble part ordo a shabby thing; and subject to limitations x x x the
doctrine of equitable estoppel may be invoked against public authorities as well as against private
individuals."
Significantly, the other private respondents – Spouses Santos, Spouses Calaguian, Dela Fuente and Madaya
– bought such "expanded" lots in good faith, relying on the clean certificates of St. Jude, which had no notice
of any flaw in them either. It is only fair and reasonable to apply the equitable principle of estoppel by laches
against the government to avoid an injustice to the innocent purchasers for value.
Republic vs CA and Santos

FACTS:
Defendant St. Jude’s Enterprises, Inc. is the registered owner of a parcel of land known as Lot 865-B-1 of the
subdivision plan (LRC) PSD-52368, being a portion of Lot 865-B located in Caloocan City containing an area
of 40,623 square meters.
Sometime in March 1966 defendant St Jude’s Enterprises, Inc. subdivided Lot No. 865-B-1 under subdivision
plan (LRC) PSD-55643
The subdivision of lot 865-B-1 [which was] covered [by] TCT No. 22660 was later found to have expanded and
enlarged from its original area of 40,523 square meters to 42,044 square meters or an increase of 1,421 square
meters.
defendant St. Jude’s Enterprises, Inc. sold the lots covered by TCT Nos. 24013 and 24014 to:

1) defendant Sps. Catalino Santos and Thelma Barreto Santos;


2) defendant Sps. Domingo Calaguian and Felicidad de Jesus;
3) defendant Virginia dela Fuente; and
4) defendant Lucy Madaya.
Then Solicitor General Estelito Mendoza filed] an action seeking xxx the annulment and cancellation of
Transfer Certificates of Title (TCT) Nos. 24015, 24017, 24018, 24020, 24021, 24024, 24025 and 24068 issued
in the name of defendant St. Jude's Enterprises, Inc. principally on the ground that said Certificates of Title
were issued on the strength of [a] null and void subdivision plan (LRC) PSD-55643 which expanded the original
area of TCT No. 22660 in the name of St. Jude's Enterprises, Inc. from 40,623 square meters to 42,044 square
meters upon its subdivision
Defendants Virginia dela Fuente and Lucy Mandaya were declared in default for failure to file their respective
answer within the reglementary period.
Defendants Sps. Domingo Calaguian and Sps. Catalino Santos interposed defenses, among others, that they
acquired the lots in question in good faith from their former owner, defendant St. Jude's Enterprises, Inc. and
for value and that the titles issued to the said defendants were rendered incontrovertible, conclusive and
indefeasible after one year from the date of the issuance of the titles by the Register of Deeds
Defendant St. Jude's Enterprises, Inc. Interposed defenses, among others, that the cause of action of plaintiff
is barred by prior judgment; that the subdivision plan submitted having been approved by the
LRC, the government is now in estoppel to question the approved subdivision plan.

RTC RULING:
The trial court dismissed the Complaint.
While the plaintiff sufficiently proved the enlargement or expansion of the area of the disputed property, it
presented no proof that Respondent St. Jude Enterprises, Inc. (St. Jude) had committed fraud when it
submitted the subdivision plan to the Land Registration Commission (LRC) for approval.
There was no one to blame for the increase in the area but the plaintiff[,] for having allowed and approved the
subdivision plan. Thus, the court concluded, the government was already in estoppel to question the approved
subdivision plan.
The trial court also took into account the absence of complaints from adjoining owners whose supposed lots
[were] encroached upon by the defendants, as well as the fact that an adjoining owner had categorically stated
that there was no such encroachment.
Finding that Spouses Santos, Spouses Calaguian, Dela Fuente and Madaya had brought their respective lots
from St. Jude for value and in good faith, the court held that their titles could no longer be questioned, because
under the Torrens system, such titles had become absolute and irrevocable.

The solicitor general appealed the trial courts Decision to the Court of Appeals.

CA RULING:
The appellate court affirmed the trial court.
It berated petitioner for bringing the suit only after nineteen (19) years had passed since the issuance of St.
Judes title and the approval of the subdivision plan.

Undaunted, petitioner seeks a review by this Court

ISSUE:
Whether or not the government is estopped from questioning the approved subdivision plan which
expanded the areas covered by the transfer certificates of title in question;
OR
(1) the applicability of estoppel against the State and
(2) the Torrens system.

SC RULING:
The petition is bereft of merit.

First Issue: Estoppel Against the Government


The general rule is that the State cannot be put in estoppel by the mistakes or error of its officials or agents.
However, like all general rules, this is also subject to exceptions:
The government must not be allowed to deal dishonorably or capriciously with its citizens, and must
not play an ignoble part or do a shabby thing; and subject to limitations x x x, the doctrine of equitable
estoppel may be invoked against public authorities as well as against private individuals.

In Republic v. Sandiganbayan, the government, in its effort to recover ill-gotten wealth, tried to skirt the
application of estoppel against it by invoking a specific constitutional provision. The Court countered:
We agree with the statement that the State is immune from estoppel, but this concept is understood
to refer to acts and mistakes of its officials especially those which are irregular which peculiar
circumstances are absent in the case at bar.
In the case at bar, for nearly twenty years (starting from the issuance of St. Judes titles in 1966 up to the filing
of the Complaint in 1985), petitioner failed to correct and recover the alleged increase in the land area of St.
Jude.
Its prolonged inaction strongly militates against its cause, as it is tantamount to laches, which means the failure
or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence
could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.
Florencio Quintos, the owner of the 9,146 square-meter Quintos Village adjoining the northern portion of St.
Judes property (the portion allegedly expanded), even attested on August 16, 1973 that there [was] no
overlapping of boundaries as per my approved plan (LRC) PSD 147766 dated September 8, 1971. That there
was no actual damage to third persons caused by the resurvey and the subdivision.

The other private respondents -- Spouses Santos, Spouses Calaguian, Dela Fuente and
Madaya -- bought such expanded lots in good faith, relying on the clean certificates of St.
Jude, which had no notice of any flaw in them either. It is only fair and reasonable to apply
the equitable principle of estoppel by laches against the government to avoid an injusticeto
the innocent purchasers for value.
Likewise time-settled is the doctrine that where innocent third persons, relying on the correctness of the
certificate of title, acquire rights over the property, courts cannot disregard such rights and order the
cancellation of the certificate.
This would be contrary to the very purpose of the law, which is to stabilize land titles. Verily, all persons dealing
with registered land may safely rely on the correctness of the certificate of title issued therefor, and the law or
the courts do not oblige them to go behind the certificate in order to investigate again the true condition of the
property.
Petitioner never presented proof that the private respondents who had bought their lots from St. Jude were
buyers in bad faith. Consequently, their claim of good faith prevails.
Furthermore, it should be stressed that the total area of forty thousand six hundred twenty-three (40,623)
square meters indicated on St. Judes original title (TCT No. 22660) was not an exact area. Such figure was
followed by the phrase more or less. This plainly means that the land area indicated was not precise.
The discrepancy in the figures could have been caused by the inadvertence or the negligence of the surveyors.
There is no proof, though, that the land area indicated was intentionally and fraudulently increased. The
property originally registered was the same property that was subdivided.
It is well-settled that what defines a piece of titled property is not the numerical date indicated as the area of
the land, but the boundaries or metes and bounds of the property specified in its technical description as
enclosing it and showing its limits.
Petitioner miserably failed to prove any fraud, either on the part of Private Respondent St. Jude or on the part
of land registration officials who had approved the subdivision plan and issued the questioned TCTs.

Second Issue: The Torrens System


In the interest of justice and equity, neither may the titleholder be made to bear the unfavorable effect of the
mistake or negligence of the States agents, in the absence of proof of his complicity in a fraud or of manifest
damage to third persons.

First, the real purpose of the Torrens system is to quite title to land to put a stop forever to any question
as to the legality of the title, except claims that were noted in the certificate at the time of the registration
or that may arise subsequent thereto.

Second, as we discussed earlier, estoppel by laches now bars petitioner from questioning private
respondent’s titles to the subdivision lots.

Third, it was never proven that Private Respondent St. Jude was a party to the fraud that led to the
increase in the area of the property after its subdivision.

Finally, because petitioner even failed to give sufficient proof of any error that might have been committed
by its agent who had surveyed the property, the presumption of regularity in the performance of their
functions must be respected. Otherwise, the integrity of the Torrens system, which petitioner purportedly
aims to protect by filing this case, shall forever be sullied by the ineptitude and inefficiency of land
registration officials, who are ordinarily presumed to have regularly performed their duties.
We cannot, therefore, adhere to the petitioner’s submission that, in filing this suit, it seeks to preserve the
integrity of the Torrens system. To the contrary, it is rather evident from our foregoing discussion that
petitioner’s action derogates the very integrity of the system.
WHEREFORE, the petition is hereby DENIED and the assailed Decision is AFFIRMED.

XVI. REGISTRATION OF CHATTEL MORTGAGES (CHAPTER XIV, SEC. 114-116)


I. DAVID LU VS. LUDO

FACTS:
A complaint for Declaration of Nullity of Share Issue, Receivership and Dissolution filed by David Lu against
Afternoon Lu Ym and sons and LLDC was the original action filed, which becomes the root of all the
subsequent three cases consolidated in this petition. The decision of RTC was in favor of David Yu, thereby
annulling issuance of shares of stocks subscribed and paid by Paterno Lu Ym and sons at less than par value
and ordering the dissolution and asset liquidation of LLDC.
Three cases were filed in relation to that decision. The first case (G.R. No. 153690), in its August 26, 2008
decision, found the mootness of the issue and that RTC already rendered a decision on the merits of the case
wherein it said that Lu Ym and sons availed of improper mode to assail the admission of the Amended
Complaint. In the second case filed (G.R. No. 157381), Court held that there was nothing more to enjoin when
Lu Ym and sons challenged the appellate court decision. On the third case (G.R. No. 170889), the previous
decision was set aside on August 4, 2009, reconsidering its position on the matter of docket fees. It ruled that
RTC did not acquire jurisdiction over the case of David Lu because of the failure to pay for the docket fees.
It was seen that the three cases (G.R. No. 153690, G.R. No. 157381, & G.R. No. 170899) fall under at least
three types of cases for consideration by the Court En Banc, which the latter accepted for the reason of
resolving all doubts on the validity of the challenged resolutions as they appear to modify or reverse doctrines
or principles of law. Though for the sake of argument, one can say that the said cases had already become
final, En Banc stated that the doctrine of immutability of decisions applies only to final and executory cases but
since the three cases involve a modification or reversal of Court-ordained doctrine or principle which makes
the former judgment unconstitutional. The law allows a determination at first impression of that a doctrine or
principle laid down by the court en banc or in division may be modified or reversed in a case which would
warrant a referral to the Court En Banc. Ultimately, it is the entire Court which shall decide on the acceptance
of the referral and to reconcile any seeming conflict, to reverse or modify an earlier decision, and to declare
the Courts doctrine. Because of this, the Court granted David Lu’s Motion for Reconsideration. It reinstated
the August 26, 2008 decision wherein a three-tiered approach was utilized to analyze the issue on docket fees.

ISSUES:
(1) Whether or not David Yu’s party paid the correct docket fees?

(2) Whether or not estoppel has already set in against action filed by Paterno Lu Ym?

(3) Whether or not there was intent to defraud the government?

HELD:
(1) Yes, David Yu’s party paid the correct docket fees.
En Banc explained that the complaint filed by David Lu was one for the declaration if nullity of share issuance.
The main relief prayed for both in the original complaint and the amended complaint is the same, that is, to
declare null and void the issuance of 600,000 unsubscribed and unissued shares to Lu Ym father and sons, et
al. for a price of 1/18 of their real value, for being inequitable, having been done in breach of director’s fiduciary
duty to stockholders, in violation of the minority stockholders rights, and with unjust enrichment. In the August
2008 decision, it stated that the dissolution of the corporation and the appointment of receivers/management
committee are actions which do not consist in the recovery of a sum of money. If, in the end, a sum of
money or real property would be recovered, it would simply be the consequence of such principal
action. Therefore, the case before the RTC was incapable of pecuniary estimation. IN FINE, the Court holds
that David Lu’s complaint is one incapable of pecuniary estimation; hence, the correct docket fees were paid.
(2) Even assuming that the docket fees were insufficiently paid, still estoppel has already set in.

Lu Ym father and sons did not raise the issue before the trial court. The narration of facts in the Courts original
decision shows that Lu Ym father and sons merely inquired from the Clerk of Court on the amount of paid
docket fees on January 23, 2004. They thereafter still speculated[ed] on the fortune of litigation.[26] Thirty-seven
days later or on March 1, 2004 the trial court rendered its decision adverse to them. Meanwhile, Lu Ym father
and sons attempted to verify the matter of docket fees from the Office of the Court Administrator (OCA). In
their Application for the issuance a writ of preliminary injunction filed with the Court of Appeals, they still failed
to question the amount of docket fees paid by David Lu, et al. It was only in their Motion for Reconsideration
of the denial by the appellate court of their application for injunctive writ that they raised such issue. A mere
inquiry from an improper office at that, could not, by any stretch, be considered as an act of having
raised the jurisdictional question prior to the rendition of the trial court’s decision.
(3) Assuming arguendo that the docket fees paid were insufficient, there is no proof of bad faith to
warrant a dismissal of the complaint.
If the amount of docket fees paid is insufficient considering the amount of the claim, the clerk of court of the
lower court involved or his duly authorized deputy has the responsibility of making a deficiency
assessment. The party filing the case will be required to pay the deficiency, but jurisdiction is not
automatically lost.
The assailed Resolution of August 4, 2009 held, however, that the above-quoted doctrine does not apply since
there was intent to defraud the government. All findings of fraud should begin the exposition with the
presumption of good faith. The inquiry is not whether there was good faith on the part of David, et al., but
whether there was bad faith on their part. The erroneous annotation of a notice of lis pendens does not negate
good faith. That notices of lis pendens were erroneously annotated on the titles does not have the effect of
changing the nature of the action. The aggrieved party is not left without a remedy, for they can move to cancel
the annotations. The assailed August 4, 2009 Resolution, however, deemed such act as an acknowledgement
that the case they filed was a real action, concerning as it indirectly does the corporate realties, the titles of
which were allegedly annotated. Good faith can be gathered from the series of amendments on the provisions
on filing fees, that the Court was even prompted to make a clarification.
The new Section 21(k) of Rule 141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC(July 20,
2004), expressly provides that [f]or petitions for insolvency or other cases involving intra-corporate
controversies, the fees prescribed under Section 7(a) shall apply. Said paragraph refers to docket fees for
filing [a]actions where the value of the subject matter cannot be estimated and all other actions not involving
property. In the present case, however, the original Complaint was filed on August 14, 2000 during which time
Section 7, without qualification, was the applicable provision. Even the Amended Complaint was filed on March
31, 2003 during which time the applicable rule expressed that paragraphs (a) and (b) l & 3 shall be the basis
for computing the filing fees in intra-corporate cases, recognizing that there could be an intra-corporate
controversy where the value of the subject matter cannot be estimated, such as an action for inspection of
corporate books. The immediate illustration shows that no mistake can even be attributed to the RTC clerk of
court in the assessment of the docket fees. Finally, assuming there was deficiency in paying the docket fees
and assuming further that there was a mistake in computation, the deficiency may be considered a lien on the
judgment that may be rendered, there being no established intent to defraud the government.
Therefore, the August 2008 decision has been reinstated and the CA is directed to resume the proceedings
and resolve the remaining issues.

XIX. THE CONDOMINIUM ACT (RA 4726)


B. WARRANTIES AND REPRESENTATIONS
I. BPI VS. ALS MANAGEMENT CORP.

FACTS:

 ALS bought a condominium unit from BPI. Despite the stipulation in the Deed of Sale that ALS,
as vendee should shoulder the expenses for the registration of the Deed of Sale and issuance of the
Certificate of Title, BPI advanced such amount and shouldered such expenses. Now, ALS refuses to
pay BPI the amount advanced by the latter based on Sec. 25 of PD 957 which provides that no fee
shall be required from buyers except that for registration of deed of sale but BPI has jacked up or
increased the amount by including amounts that should not be collected from buyers of condo units.
Hence, BPI filed a case for collection of sum of money before the RTC of Makati.ALS also filed a
Compulsory Counterclaim alleging that BPI has not fulfilled the specifications of the condo unit as in
that of the brochures also stating that the units are deficient and defective.

RTC:
ALS must pay BPI of the amount advanced by the latter. As to the counterclaim, BPI must fix the
defect and deficiencies in the units and reimburse ALS of the amounts spent by it due to such
defects/deficiencies
CA:
Affirmed the decision of the RTC in toto.

 BPI now questions the jurisdiction of RTC to hear ALS counterclaim for the firsttime before the
Supreme Court alleging that the jurisdiction lies with the HLURB.

ISSUE:
1. Whether or not RTC has jurisdiction.
2. Whether or not BPI has been barred by estoppel from questioning such jurisdiction.

HELD:
1. NEGATIVE. ALS counterclaim being one of “specific performance and damages” falls under the
jurisdiction of the HLURB as provided by Sec. 1 of PD No. 1344. The jurisdiction of the HLURB over
cases enumerated in Section 1 of PD No. 1344 is exclusive. Thus, we have ruled that the board has
sole jurisdiction in a complaint of specific performance for the delivery of a certificate of title to a buyer
of a subdivision lot;[16] for claims of refund regardless of whether the sale is perfected or not;[17] and for
determining whether there is a perfected contract of sale.[18]

2. AFFIRMATIVE. Since BPI participated in the trial and only after an unlawful judgment did it raise the
issue of jurisdiction, it may no longer deny the trial court’s
jurisdiction for estoppel bars it from doing so. SC cannot countenance the inconsistent postures BPI
has adopted by attacking the jurisdiction of the regular court to which it has voluntarily submitted. Also,
considering that ALS first filed its counterclaim in 1985 and BPI only questioned RTC’s jurisdiction on
its appellant’s brief on 1991, it is clearly guilty of estoppel by laches considering that six (6) years has
passed before it raised the issue of jurisdiction.

C. REDEMPTION OF MORTGAGED
I. DE VERA VS. CA
FACTS:
 Respondent Q. P. San Diego Construction, Inc. (QPSDCI), owned a parcel of land on which it
built Lourdes I Condominium finance its construction and development, QPSDCI entered into
a Syndicate Loan Agreement with respondents Asiatrust Development Bank (ASIATRUST) as lead
bank, and Second Laguna Development Bank (LAGUNA) and Capitol City Development Bank
(CAPITOL) as participating banks (hereafter collectively known as FUNDERS). QPSDCI mortgaged
to the creditor banks as security the herein mentioned Panay Avenue property and the condominium
constructed thereon. The mortgage deed was registered with the Register of Deeds of Quezon City
and annotated on the individual condominium certificates of title (CCT) of each condominium unit.[2]
 Petitioner Gregorio de Vera Jr. and QPSDCI, through its authorized agent Fil-Estate Realty
Corporation (FIL-ESTATE), entered into a Condominium Reservation Agreement[3] where petitioner
undertook to buy Unit 211-2C of the condominium.
 Petitioner paid the reservation fee and the balance of the downpayment thus completing the
downpayment well before the due date. As incentive, petitioner was given a full discount on cash
payment by QPSDCI.
 Pursuant to their Condominium Reservation Agreement, petitioner submitted through FIL-ESTATE his
application for the Pag-IBIG loan. ASIATRUST as originating bank notified FIL-ESTATE that
petitioner's Pag-IBIG loan application had been approved.[4] QPSDCI President Quintin P. San Diego
forwarded the letter to petitioner. However, the amount approved was only P139,100.00 and
not P160,000.00. Additional charges further reduced the amount to P117,043.33.
 Petitioner De Vera Jr. approached QPSDCI to have the P12,040.00 discount credited to his additional
equity. Since the resultant net loan of P117,043.33 was insufficient to cover the balance of the
purchase price, De Vera Jr. negotiated with QPSDCI to defer payment of the P23,916.67 deficiency
until the project was completed and the unit was ready for turnover. QPSDCI agreed.[5]
 The condominium project was substantially completed and the unit was turned over to De Vera Jr. the
following month. Accordingly, petitioner paid QPSDCI the P23,916.67 shortfall between the balance
and the granted loan.
 ASIATRUST through its Vice-President Pedro V. Lucero and Manager Nicanor T. Villanueva wrote to
QPSDCI asking the unit buyers to pay in advance the costs of the transfer of titles and registration of
their Pag-IBIG loan mortgages.[6] QPSDCI forwarded the letter to De Vera Jr. and requested that he
pay the amount to QPSDCI.[7] As ASIATRUST indicated that the amount be paid directly to it, De Vera
Jr. went to the bank for clarification. After learning that ASIATRUST was in possession of the certificate
of title, De Vera Jr. paid the transfer expenses directly to ASIATRUST.
 ASIATRUST sent another notice of approval[8] to QPSDCI and De Vera Jr. with the
notation, "additional equity of all accounts have to be paid directly to the Bank.
 ASIATRUST wrote another letter[9] asking QPSDCI to advise the unit buyers, among others, to pay all
additional and remaining equities that their Pag-IBIG loan mortgages would be registered only upon
payment of those equities; and, that loan mortgages would be subject to the increased Pag-IBIG
interest rates.
 ASIATRUST also wrote a letter to petitioner and signed by its Assistant Manager Leticia R. de la Cruz
informing him that his housing loan would only be implemented upon the following conditions: (a)
Payment of the remaining equity directly to ASIATRUST Development Bank; and (b) Signing of all
Pag-IBIG documents so his mortgages could be registered.
 According to petitioner, the letter came as a total surprise to him; all the while he thought that his loan
had already been released to QPSDCI and the titles transferred to his name; he promptly wrote
ASIATRUST to seek clarification; ASIATRUST responded by informing De Vera Jr. that the
developmental loan agreement between QPSDCI and the three (3) banks, under which the individual
titles of the condominium units were mortgaged in favor of the FUNDERS to secure the loan, shall be
paid out of the net proceeds of the PAG-IBIG loans of the buyers; that the total amount of loan from
the FUNDERS was distributed among all condominium units such that each unit had to bear a certain
portion of the total loan, or a "loan value;" that per agreement with QPSDCI, ASIATRUST would only
grant the PAG-IBIG Housing Loan with the release of the mortgage liens, which could not be released
unless the buyers fully paid their respective loan values; and that petitioner's equity payments to
QPSDCI had not been remitted to the bank.
 ASIATRUST informed QPSDCI that it could no longer extend the bridge financing loan to some of the
buyers, including petitioner, for various reasons, among which was that petitioner had already
exceeded the age limit, hence, he was disqualified.
 Petitioner wrote the president of QPSDCI to make arrangements to settle his balance. Since petitioner
had already invested a substantial amount in remodelling and improving his unit, rescinding the sale
was no longer a viable option. Consequently, he only asked the president of QPSDCI for some
assurance that the title would be turned over to him upon full payment.
 QPSDCI suggested that petitioner deal directly with ASIATRUST for any matter regarding the sale of
the unit.
 As petitioner failed to obtain the housing loan, he was not able to pay the balance of the purchase
price. QPSDCI sent him a letter. Presenting him with two options: (a) to pay the remaining balance of
the purchase price, with interest, or, (b) to pay rent for the use of the unit.
 Petitioner, upon discovering that the FUNDERS had already published a notice of extrajudicial
foreclosure of the mortgage, filed a complaint against respondents for damages and injunction with
urgent prayer for issuance of a writ of preliminary injunction, annulment of mortgage based on fraud,
with urgent prayer for the issuance of a writ of preliminary attachment and specific performance.
 QPSDCI failed to pay its obligations to the FUNDERS. ASIATRUST extrajudicially foreclosed the
mortgage on twenty-seven (27) condominium units, including that of petitioner De Vera Jr. The units
were sold at public auction, with the FUNDERS as the highest bidder. The certificate of sale was
issued and annotated on the CCTs.
ISSUE:
 Whether or not seller is duty bound to deliver title to buyer even if mortgage.

HELD:
 Petitioner did not present any proof that he suffered any damage as a result of the breach of
seller's warranty. He did not lose possession of his condominium unit, although the same had not
yet been registered in his name. In his Consolidated Reply, petitioner came up with this feeble
argument for claiming actual damages, a rehash of his motion for reconsideration with the Court
of Appeals.
 Article 2199 of the Civil Code provides that one is entitled to adequate compensation only for such
pecuniary loss suffered by him as is "duly proved."[20] This provision denies the grant of speculative
damages, or such damage not actually proved to have existed and to have been caused to the
party claiming the same.[21] Actual damages, to be recoverable, must not only be capable of proof,
but must actually be proved with reasonable degree of certainty. Courts cannot simply rely on
speculation, conjecture or guesswork in determining the fact and amount of damages. [22]
 This does not mean however that petitioner is liable to private respondents for penalties, interests
and other charges that accrued by reason of non-payment of the balance of the purchase price.
Respondent ASIATRUST had made several representations to petitioner that his loan had been
approved. The tenor of the letters sent by ASIATRUST would lead a reasonable man to believe
that there was nothing left to do but await the release of the loan. ASIATRUST cannot hide behind
the pithy excuse that the grant of the bridge financing loan was subject to the release of the Pag-
IBIG loan. The essence of bridge financing loans is to obtain funds through an interim loan while
the Pag-IBIG funds are not yet available. To await the release of the Pag-IBIG loan would render
any bridge financing nugatory. Thus, we agree with the trial court when it said that "the conclusion
is inevitable that although the plaintiff was not able to pay, he was a victim of circumstances and
his failure was not due to his own fault.
 It is clear that upon full payment, the seller is duty-bound to deliver the title of the unit to the
buyer. Even with a valid mortgage over the lot, the seller is still bound to redeem said mortgage
without any cost to the buyer apart from the balance of the purchase price and registration fees. It
has been established that respondent QPSDCI had been negligent in failing to remit petitioner's
payments to ASIATRUST. If QPSDCI had not been negligent, then even the possibility of charges,
liens or penalties would not have arisen. Therefore, as between QPSDCI and petitioner, the former
should be held liable for any charge, lien or penalty that may arise. However, it was error for the
trial court to remedy the situation in the form of an award for damages because, as discussed
earlier, the basis for the same does not appear indubitable.
 Part of the confusion lies in the deficiency of the trial court's decision. It had found that petitioner
had superior right to the unit over the FUNDERS and the mortgage in favor of the FUNDERS was
contrary to Condominium laws. Therefore, the proper remedy was to annul the mortgage
foreclosure sale and the CCT issued in favor of ASIATRUST, and not merely decree an award for
damages.
 These remedies were clearly within those sought for in petitioner's complaint. The trial court
should have also ordered QPSDCI to credit petitioner's payments to his outstanding balance and
deliver to petitioner a clean CCT upon full payment of the purchase price as mandated by Sec.
25 of PD 957.

D. SUSPENSION OF MONTHLY

I. GOLD LOOP PROPERTIES INC.VS. CA


FACTS:
 Respondents Bhavna Harilela and Ramesh Sadhwani submitted through St. Martin Realty
Corporation, a realtor agent of petitioner Gold Loop Properties, Inc. a signed pro forma reservation
application addressed to GLPI for the purchase of one (1) condominium unit at Gold Loop Towers
residential complex.
 GLPI informed the Sadhwanis that the bank loan accommodation which was to serve as payment of
the balance of the purchase price was disapproved, and thus, per the terms of the Contract to Sell, the
balance would become payable through the Co-terminus Payment Plan schedule of payments, in
implementation of which petitioners were informed by letter.
 By letter addressed to GLPI, the Sadhwanis offered to resell their rights to the condominium unit they
purchased.
 Petitioners rejected the offer on the resale of the rights over the condominium unit proposed by private
respondents because the offer was unreasonable, unfair and inequitable.
 Respondent Ramesh J. Sadhwani demanded a copy of the contract to sell, noting that his wife had no
official document to show that she bought a condominium unit from GLPI and there were conditions
and/or stipulations in the contract which she could not be expected to comply with, unless a copy of
the same be given to her.
 Spouses Sadhwanis failed to pay any of the monthly amortizations in the payment plan.
 Petitioners sent a letter demanding payment of the balance and informed the Sadhwanis that GLPI
will rescind the Contract to Sell and automatically forfeit their down payment should they fail to pay.
 Spouses Sadhwanis filed with the Housing and Land Use Regulatory Board (hereinafter referred to as
HLURB), a complaint for specific performance with an alternative prayer for refund against
GLPI. Spouses Sadhwanis prayed that they be furnished with a copy of the contract to sell and allowed
them to remit the balance of the consideration to GLPI and to deliver to them the title and possession
of the condominium unit, or to be reimbursed of the amount they paid with interest and damages.[7]
 Petitioners filed with the Supreme Court a special civil action for certiorari assailing the decision of the
Senior Deputy Executive Secretary, Office of the President. The Court referred the case to the Court
of Appeals for proper disposition.[14]
 The Court of Appeals promulgated its decision dismissing the petition.[15] The court ruled that the
failure of petitioners to give respondents a copy of the contract to sell sued upon, despite repeated
demands therefor, and notwithstanding the payment was a valid ground for private respondents to
suspend their payments. And given the fact that the contract to sell was in writing, the Sadhwanis, as
buyers, were entitled to a copy. Their request for a copy sprung from their desire to comply with what
was incumbent upon them to perform thereunder. While buyers do not need a copy of the contract to
know the stipulated purchase price, the schedule of payments and the outstanding balance, the
contract to sell, being an eight paged single-spaced document, broken down into twelve sections,
spelling out the parties respective monetary and non-monetary rights and obligations, the buyers could
not be expected to recall each and every detail of the stipulations of the contract without a copy of the
contract to guide them.
 Petitioners contend that private respondents are not entitled to suspend payment of their monthly
amortizations because of the alleged failure of petitioners to furnish them copy of the contract to sell
and that private respondents used the alleged failure to give them copy of the contract as an excuse
for defaulting in their contractual obligation to pay the installments. Petitioners insist that private
respondents were given copy of the contract to sell. Petitioners pointed out that under the contract,
they had the right to rescind the contract in case private respondents breached the contract.
 Private respondents alleged that they have not in fact received a copy of the contract to sell. Private
respondents likewise averred that petitioners’ assertion is premised on its completely wrong
proposition that private respondents had given petitioners a reason to rescind the contract to sell. What
was really in issue was that it was petitioners that gave them sufficient and well-founded cause to
suspend payment of their monthly amortizations on the condominium unit.
ISSUE:
 Whether or not respondents may suspend payment of their monthly amortizations due to failure of
petitioners to furnish them copy of the contract to sell.
HELD:
 Private respondents were indeed justified in suspending payment of their monthly amortizations. The
failure of petitioners to give them a copy of the Contract to Sell sued upon, despite repeated demands
therefor, and notwithstanding the private respondents payment of P878,366.35 for the subject
condominium unit was a valid ground for private respondents to suspend their payments.
 And contrary to petitioners stance, records disclose that they were the ones who did fraudulent acts
against private respondents by entering into a Contract to Sell with the latter and accepting their
downpayment of P878,366.35, withholding a copy thereof for no valid reason at all, and then
threatening them with rescission and forfeiture, when private respondents only suspended payment of
the balance of the purchase price while waiting for their copy of the Contract to Sell. [23]
 The private respondents are entitled to a copy of the contract to sell, otherwise they would not be
informed of their rights and obligations under the contract. When the Sadhwanis parted with
P878,366.35 or more than one third of the purchase price for the condominium unit, the contract to
sell, or what it represents is concrete proof of the purchase and sale of the condominium unit.
 The Court hereby DENIES the petition for review on certiorari, for lack of merit. The Court AFFIRMS
the decision of the Court of Appeals affirming the order for delivery of a copy of the contract to sell to
private respondents and to accept payment of the balance of the purchase
price and deliver title over the condominium unit to the private respondents upon full payment of the
balance of the purchase price.

E. ALTERATION OF PLANS

I. G.O.A.L INC. VS. CA


FACTS:
 GOAL and the National Housing Authority (NHA) entered into an agreement whereby NHA extended
to GOAL a loan for the construction of Gemin I Condominium.
 A Contract Agreement was entered into between GOAL and Matson International Corporation for the
construction of the condominium.
 However, the contractor abandoned the project with only 60% of it finished. GOAL offered the
condominium units for sale with private respondents among its buyers. To remedy the situation
brought about by the abandonment of the project by the first contractor, GOAL subsequently pursued
the construction of the fifth floor with NHA granting additional funding on the condition that it would
hold on to the condominium certificates of title of private respondents.
 Private respondents filed with the Housing and Land Use Regulatory Board (HLURB), Office of
Appeals, Adjudication and Legal Affairs (OAALA), a complaint against GOAL. Among the issues raised
were the illegal construction of the fifth floor of Gemin I Condominium, the failure to deliver the title of
private respondent Filomeno Teng despite his repeated demands, and the failure to provide adequate
parking spaces for the unit owners.
 1989 OAALA rendered its decision ordering GOAL, inter alia, (a) to stop the construction of the fifth
floor, (b) to deliver the title of private respondent Teng, and (c) to provide adequate parking space for
the unit owners.[3]
 On appeal to the Office of the President Legal Affairs (OPLA) and subsequently to the Court of
Appeals, the decision rendered by the HLURB-OAALA was affirmed in toto.
 GOAL contends that the Court of Appeals failed to appreciate the fact that the construction of the fifth
floor was with the written approval of public respondent HLURB as required by Sec. 22 of P.D. 957.
ISSUE:
1. Whether or not the construction of the floor is illegal.
2. Whether or not there was failure to deliver title.
3. Whether or not there was failure to provide adequate parking space.

HELD:
 The written approval of the National Housing Authority alone is not sufficient. It must be coupled with
the written conformity or consent of the duly organized homeowners association or the majority of the
lot buyers. Failing in this, the construction of the fifth floor is violative of the decree invoked. The Court
of Appeals simply applied the law, and correctly so.
 Petitioner likewise contends that it should not have been faulted for failing to deliver the title to private
respondent Teng as the proximate cause thereof was the abandonment of the construction project by
the first contractor, hence, due to force majeure.[4]
 Upon full payment of the agreed price, petitioner is mandated by law to deliver the title of the lot or unit
to the buyer.
 Petitioner also attempts to justify its failure to deliver the certificate of title of private respondent Teng
by claiming that it used the title as part collateral for the additional loan NHA had extended for the
construction of the fifth floor.
 The Court observes the frequent allusion of petitioner to its predicament brought about by the
abandonment of the project by the first contractor. But such is irrelevant in light of Sec. 25 of P.D. 957
as well as of the Contract to Sell of the parties.
 Upon full payment of a unit, petitioner loses all its rights and interests to the unit in favor of the
buyer. Consequently, it has no right to use the certificate of title of respondent Teng as collateral for a
new loan. The title of Teng must be released to him as provided by law.
 With respect to the second issue, petitioner contends that the decision of the Court of Appeals is
contrary to law considering that under Sec. 12-D, No. 2, Rule V of the Implementing Rules of P.D. 957,
what should be given for free are only off-street parking spaces and not indoor parking areas.
 It has for purposes of its own construed off-street to mean not including indoor. On the other hand, the
law does not exclude indoor parking. What it specifically excludes is street parking. Therefore, parking
may be in the basement or, in the absence thereof, in the first floor.
 In a condominium, common areas and facilities are portions of the condominium property not included
in the units, whereas, a unit is a part of the condominium property which is to be subject to private
ownership.[5] Inversely, that which is not considered a unit should fall under common areas and
facilities.
 Hence, the parking spaces not being subject to private ownership form part of the common area over
which the condominium unit owners hold undivided interest. As such, petitioner cannot invoke Sec. I,
Art. III, of the Bill of Rights which provides that No person shall be deprived of life, liberty or property
without due process of law. Petitioner alone does not own the parking area. The parking space is
owned in common by the developer and the unit owners. Private respondents must be allowed to use
the parking area.
 Petitioner can hardly be excused for its failure to comply with the provisions of P.D. 957 by claiming
ignorance of the requirements of the decree and that a mistake upon a doubtful or difficult question of
law may be the basis of good faith. Being engaged in a business affected by P.D. 957, petitioner
should be aware of its provisions and its mandates which, as can be readily perceived, are clear,
simple and unmistakable.
XX. SUBDIVISION AND CONDOMINIUM PROTECTIVE BUYER’S DECREE
A. JURISDICTION OF THE HLURB

I. DELA CRUZ VS. CA

FACTS:
 Petitioners Miniano and Leta dela Cruz and respondents Archimedes and Marlyn Aguila entered into
a Contract to Sell of a house.
 Upon payment of the initial amount by respondents, petitioners delivered the keys to the house.
Whereupon respondents entered and occupied the property.[7]
 But, petitioners filed a Complaint for cancellation of the contract to sell, with penalties and damages.
Petitioners claimed that despite the delivery of the keys and TCT of the property to the respondents
and countless demands to pay the installments, respondents failed to make the subsequent monthly
payments. Hence, petitioners sought the cancellation of the contract, the forfeiture of the
downpayment, and the payment of the accumulated interests and penalties including attorney’s fees
and cost of suit.[8]
 Both parties filed a Compromise Agreement[9] instead. However, the petitioners filed a Motion for
Execution.[11] They alleged that from the time the Compromise Agreement was signed and approved
by the court, the respondents had been grossly violating the terms of the Compromise Agreement.
They had not paid the agreed amount nor delivered any acceptable property in satisfaction of the
balance of the purchase price.
 The respondents countered with a Motion to Dismiss. They alleged that the Housing and Land Use
Regulatory Board (HLURB) has exclusive jurisdiction over the case under Presidential Decree No.
957 and filed with the HLURB an action for the recovery of the downpayment and the cancellation of
the contract.[13]
ISSUES:
(1) Does the HLURB have jurisdiction over the case?
(2) Was the Court of Appeals correct in nullifying the Compromise Agreement?

HELD:
 P.D. No. 957 provides that a subdivision owner shall refer to the registered owner of the land subject
of a subdivision or a condominium project. Also, a subdivision developer shall mean the person who
develops or improves the subdivision project or condominium project for and in behalf of the owner
thereof.[25]
 Respondents stress that the petitioners own a huge parcel of land in TCHEV which they subdivided.
Furthermore, the property sold to them is one of these subdivided lots on which a house was erected
by the petitioners. Hence, petitioners are owners and developers of a subdivision property.
 The law clearly defines who is considered a subdivision owner or developer, and the petitioners are
neither. They are merely owners of a number of lots within the subdivision owned and developed by
Pasig Properties, Inc. But even if petitioners were subdivision owners or developers, this would not
bar them from seeking redress from the courts.
 The rule is well settled that the jurisdiction of the court or agency is determined by the allegations in
the complaint. It cannot be made to depend on the defenses made by the defendant in his Answer or
Motion to Dismiss. If such were the rule, the question of jurisdiction would depend almost entirely on
the defendant.[27] The complaint rests its cause of action on the failure of the respondents to pay the
stipulated installments in the contract of the parties. As relief, the complaint sought the cancellation of
the contract and the payment of interest, penalties and deficient installments. Clearly, the complaint is
well within the jurisdiction of the trial court.
 Respondents claim that the Compromise Agreement is null and void because it contains stipulations
that are against Rep. Act No. 6552. These stipulations are the automatic cancellation of the contract
without giving any grace period to the buyer and the forfeiture of all installments in favor of the
seller.[30] Pursuant to Article 1409,[31] specifically paragraphs 1 and 7, of the Civil Code, the
Compromise Agreement should have been declared void by the trial court,[32] according to
respondents.
 A compromise is an agreement between two or more persons who, aiming to prevent or put an end to
a lawsuit, adjust their respective positions by mutual consent. Reciprocal concessions are the very
heart and life of every compromise agreement. Each party approximates and concedes a point in the
hope of gaining, balanced by the danger of losing, its own advantage. It is, in essence, a contract. It
is binding and has the force of law between the parties unless it is a void contract under Article 1409
of the Civil Code, or unless the consent of a party is vitiated (such as by mistake, fraud, violence,
intimidation or undue influence) or when there is forgery, or if the terms of the settlement are so
palpably unconscionable.[33] It has upon the parties the effect and authority of res judicata,[34] and when
the court renders a judgment based on the compromise agreement, the judgment becomes
immediately executory, there being an implied waiver of the parties right to appeal from the decision.[35]
 The contract between the parties is a contract to sell real property. As reflected in the records, the
respondents as buyers paid to the petitioners as sellers one installment after the initial downpayment.
But it is not a contract involving a subdivision owner or developer but only between two couples i.e.,
the original house-owners (petitioners) and the subsequent buyers of the house and lot (respondents).
 Under the contract, respondents were obliged to pay a monthly instalment. They failed in that
commitment. Petitioners repeatedly demanded for payment. Respondents then made a written
promise to pay the entire deficiency within 60 days.[41] But respondents paid only P50,000 after which
no other installment payments were made.