HEIRS OF LIBERATO CASTILLEJOS AND RURAL BANK OF AGOO, LA UNION v.

LA TONDEÑA INCORPORADA
(July 20, 2016)

This is a petition for review on certiorari1 under Rule 45 of the Rules of Court assailing the Decision 2dated May 29, 2009 of the
Court of Appeals (CA) in CA-G.R. CV No. 90598 which affirmed the Decision 3 dated September 12, 2007 of the Regional Trial
Court (RTC) of Bauang, La Union, Branch 33 in Civil Case No. 1108-BG, granting La Tondena Incorporada's (respondent) complaint
for quieting of title, declaration of nullity and/or nullification of tax declaration and damages.

The Antecedents

On September 16, 1997, the respondent filed a Complaint 4 for Quieting of Title, Declaration of Nullity and/or Nullification of Tax
Declarations and Damages against Liberato Castillejos (Liberato) who perished pending trial and was thus substituted by his
heirs, herein petitioners.

In its complaint, the respondent averred that it is the absolute owner of two parcels of land, with an area of 1,944 square
meters, more or less, and 184,354 sq m, more or less, respectively, located at Barangay Bagbag (now Casilagan), Bauang, La
Union, covered by Tax Declaration (TD) Nos. 93-005-5221, 4634, 9730, 51100, 28834, and 18506 issued by the Provincial
Assessor of La Union in 1994, 1985, 1980, 1974, 1959, and 1953, respectively. 5chanrobleslaw

The respondent alleged that on May 29, 1991, Liberato, through stealth, misrepresentation and deliberate fraud, maliciously
executed an affidavit of ownership over the subject properties and presented the same to the Provincial Assessor of La Union
who, in turn, issued in his name TD Nos. 26682 and 26683 on May 31, 1991. 6chanrobleslaw

Likewise, the respondent claimed that by itself and through its predecessors-in-interest, it has been in continuous, open, public
and adverse possession of the subject real properties through time immemorial. 7chanrobleslaw

Liberato, for his part, claimed that his land and the subject properties claimed by the respondent are different from one another
because they have different boundaries. He alleged that his land was tilled by his father-in-law since 1940 before he took
possession thereof in 1962. He planted the land with different crops and trees and built a house thereon where he and his family
have continuously resided.8chanrobleslaw

During trial, the parties endeavored to substantiate their respective claims of ownership. The evidence for the respondent
showed that the subject property was originally covered by TD No. 7511 9 series of 1947 which was later on cancelled in 1953 by
TD No. 18506.10 In these two TDs, the stated owner was "Homestead (Unknown)" with Juan Dumuk (Juan) as the
administrator.11 In 1959, TD No. 2883412 was issued in the respondent's name. From then on, the TDs on the subject property
reflected its name as owner, the latest of which having been issued in 1994. 13 On June 6, 1959, Juan executed an affidavit
acknowledging his appointment as the respondent's administrator. 14 On March 23, 1994, he was replaced by his son Victor
Dumuk (Victor).15chanrobleslaw

Victor was in charge of updating the payment of realty taxes on the respondent's land, preventing or evicting illegal occupants
and collecting monthly rentals from registered occupants. Sometime thereafter, Carlos Supsup and Warlito Suniega (Warlito), the
land's registered occupants, reported to Victor that Liberato was claiming ownership of a portion of the land they were tilling and
that he ordered them to vacate the same. Victor later on discovered that there were two TDs issued in Liberato's name. He, thus,
brought the matter to the attention of the respondent's officials. 16chanrobleslaw

Liberato, for his part, presented an affidavit of ownership and TD Nos. 26682 17 and 2668318 over Lots 20096 and 20097,
respectively. He also declared that in 1986, he allowed his nephew Warlito to plant palay in a portion of his land. 19chanrobleslaw

Engineer Gerry Boado, the technical supervisor of the Survey Records Section, Regional Survey Division of the Department of
Environment and Natural Resources (DENR), testified that based on the cadastral record of Bauang, La Union, Liberato was the
only claimant of Lots 20096 and 20097 covered by TD Nos. 26682 and 26683. 20chanrobleslaw

Ruling of the RTC

In the Decision21 dated September 12, 2007, the RTC granted the complaint for the reason that the respondent had older
documents proving ownership. The respondent's oldest TD was issued way back in 1948 while Liberato's TDs were dated
1982.22 In Liberato's affidavit of ownership, there was no mention as to how he acquired the land. 23 The RTC did not give weight
to the cadastral record that Liberato is the only claimant of Lots 20096 and 20097 because he did not notify the respondent
when the survey was conducted.24 Finally, the RTC rejected the petitioners' argument that the respondent, being a corporation, is
prohibited by the 1987 Constitution from acquiring real estate and instead ruled that the respondent already had vested right to
acquire the land prior to the enactment of the constitutional prohibition. 25cralawred The RTC awarded attorney's fees in favor of
the respondent for the reason that the case had been pending for several years. 26 Thus, the RTC disposed as
follows:ChanRoblesVirtualawlibrary
WHEREFORE, premises considered, this Court rules in favor of [the respondent] and against [Liberato], and declares:

1. The [respondent] as the true and absolute owner of the properties covered by [TD] No. 93-005-5221;

2. [TD] No. 93-005-5221 and all [TDs] in the name of [the respondent] issued prior to it valid;

3. [TD] Nos. 26682 and 26683 in [Liberato's] name void; and,

4. The [petitioners] to pay [the respondent] attorney's fees amounting to Twenty Thousand Pesos (Php20,000.00) and to
pay the cost of suit.

SO ORDERED.27chanroblesvirtuallawlibrary
Ruling of the CA

The CA, in its Decision28 dated May 29, 2009, affirmed the RTC decision stressing that the oldest TD in favor of the respondent is
sufficient proof that it owns the land. Although TDs are not conclusive proof of ownership, they are nonetheless, good indication
of possession in concept of owner. The respondent also exercised acts of ownership and possession over the land through its
administrators.29 The CA further held that there is no conclusive proof that the lands claimed by the parties are actually separate
and distinct. Accordingly, the CA held, thus:ChanRoblesVirtualawlibrary
WHEREFORE, the instant appeal is hereby DISMISSED and the Decision of the [RTC] of Bauang, La Union, Branch 33, in Civil Case
No. 1108-BG, AFFIRMED.

SO ORDERED.30chanroblesvirtuallawlibrary
The petitioners moved for reconsideration31 but it was denied in the CA Resolution32 dated November 4, 2009. Hence, the
present recourse.

Ruling of the Court

The petition is partly meritorious.

It is immediately noticeable that the petition suffers a procedural infirmity since its resolution involves factual questions that
require for their determination and evaluation of the evidentiary record. Settled is the rule that the Court is not a trier of facts
and it is bound by the factual findings of the CA; hence, a petition for review should be confined to questions of law. The rule,
however, permits exceptions, two of which obtain in the present case - (a) when the judgment of the CA is based on a
misapprehension of facts or (b) when its findings are not sustained by the evidence on record. 33chanrobleslaw

"An action to quiet title to property or to remove a cloud thereon is a remedy or form of proceeding originating in equity
jurisprudence. The plaintiff in such an action seeks for adjudication that any adverse claim of title or interest in the property in
question is invalid, so that the plaintiff and those claiming under him or her may forever be free from any danger of the hostile
claim."34 It is governed by Article 476 of the Civil Code which reads:ChanRoblesVirtualawlibrary
Art. 476. Whenever there is cloud on title to real property or any interest therein, by reason of any instrument, record, claim,
encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title.

An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein.
For the action to prosper, two requisites must concur, viz: (1) the plaintiff or complainant must have a legal or an equitable title
to or interest in the real property which is the subject matter of the action; and (2) the deed, claim, encumbrance or proceeding
that is being alleged as a cloud on plaintiffs title must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy. 35chanrobleslaw

In this case, no clear and concrete evidence is extant from the records that the properties covered by Liberato's TD Nos. 26682
and 26683 are the same parcels of land described in the respondent's TDs. The boundaries, nature and classification of the land
claimed by the parties appear to be different. The TDs proffered by the respondent shows that the land it claims has the
following boundaries: North - Leandro Quinzon, South - Luisa Perillo and Others, East - Faustino Pichay and Others, and West -
Santiago Lucas Quinzon etc.36chanrobleslaw

The land covered by TD Nos. 7511,37 1850638 and 2883439 was classified as cogon and forest land with an area of 186,348 sq m,
the 1,944-sq-m portion of which was later on reclassified in TD Nos. 51100, 40 09730,41 463442 and 93-005-522143 as upland
riceland/unirrigated riceland.

On the other hand, Liberato's TD No. 2668244 pertained to a land classified as pastureland (160,000 sq m), unirrigated riceland
(1,681 sq m) and orchard (1,000 sq m) with the following boundaries:North - Barangay Road, South - Lot No. 20105, East - Lot
Nos. 10467, 10441, 10431 and 10430, andWest - Lot Nos. 20107, 20144, 10479 and 13194.

Meanwhile, Liberato's TD No. 2668345 refers to a land, the 35,000-sq-m portion of which is classified as pastureland, with the rest
of its 5,272-sq-m portion described as unirrigated riceland.

The respondent failed to illustrate, prove or even allege which portion of the land covered by its TD was allegedly encroached
upon by Liberato's TD Nos. 26682 and 26683. It did not submit a technical description or survey report to identify the exact
locations of the property it claims vis-avis the one claimed by Liberato.

Considering that the claim of overlapping has not been clearly established, the Court deems it appropriate to remand the case to
the RTC for the conduct of a verification/relocation survey under the direction and supervision of the Land Management Bureau
of the DENR. In the event that the respondent's claim of encroachment is found to be correct, the corresponding adjustment in
the metes and bounds of Liberato's property should be reflected in TD Nos. 26682 and 26683, which will then have to be
partially, if not totally voided, and the corresponding amendment as to the precise area and technical description be made.

WHEREFORE, the Decision dated May 29, 2009 of the Court of Appeals in CA-G.R. CV No. 90598 and the Decision dated
September 12, 2007 of the Regional Trial Court of Bauang, La Union, Branch 33 in Civil Case No. 1108-BG granting the
respondent's complaint for quieting of title, are SET ASIDE. The case is REMANDED to the said RTC which is hereby directed to
order the Land Management Bureau of the Department of Environment and Natural Resources to conduct a
verification/relocation survey to determine the overlapping of properties covered by the Heirs of Liberato Castillejos' TD Nos.
26682 and 26683 and the La Tondena Incorporada's TD No. 93-005-5221 issued by the Provincial Assessor of La Union.

SO ORDERED.
 G.R. No. 204056, June 01, 2016

GIL MACALINO, JR., TERESITA MACALINO, ELPIDIO MACALINO, PILAR MACALINO, GILBERTO MACALINO, HERMILINA
MACALINO, EMMANUEL MACALINO, EDELINA MACALINO, EDUARDO MACALINO, LEONARDO MACALINO,
EDLLANE** MACALINO, APOLLO MACALINO, MA. FE MACALINO, AND GILDA MACALINO, Petitioners, v. ARTEMIO PIS-
AN, Respondent.

DEL CASTILLO, J.:

This Petition for Review on Certiorari assails the September 20, 2012 Decision1 of the Court of Appeals (CA) in CA-G.R. CV No.
02893 which granted respondent Artemio Pis-an's (Artemio) appeal and set aside the December 12, 2008 Decision 2 of the
Regional Trial Court (RTC) of Negros Oriental, Dumaguete City, Branch 40 in Civil Case No. 13725.

Factual Antecedents

Under Original Certificate of Title (OCT) No, 2393-A, Emeterio Jumento (Emeterio) was the owner of the half portion, and his
children Hospicio Jumento (Hospicio) and Severina Jumento (Severina) of the other half in equal shares, of Lot 3154 consisting of
469 square meters and located in Junob, Dumaguete City, Negros Oriental. When Hospicio and Severina died single and without
issue, Emeterio as their sole heir inherited the portions pertaining to them and thus became the owner of the whole lot.
Subsequently, Emeterio also passed away.

Apparently, the City of Dumaguete built in the 1950's a barangay road which cut across said lot. As a result, Lot 3154 was divided
into three portions, to wit: the portion which was converted into abarangay road and the portions on both sides of said barangay
road. Sometime in the 1970's, Artemio, a grandson-in-law of Emeterio, 3 commissioned Geodetic Engineer Rodolfo B. Ridad (Engr.
Ridad) to survey Lot 3154 so that taxes would be assessed only on the portions of the subject property which remained as
private property.4 Accordingly, Engr. Ridad came up with a sketch plan 5(sketch plan) where the three portions of Lot 3154 were
denominated as Lot 3154-A (the portion on the left side of the road), Lot 3154-B (the portion which was converted into
a barangay road), and Lot 3154-C (the portion on the right side of the road). The sketch plan also revealed that the portion
occupied by Artemio, i.e., Lot 3154-A as enclosed by points 1, 2, 3, 4, 5, and 6, 6 together with a section of a dried creek,
contained an area of 207 square meters.7

On May 3, 1995, Artemio and the other heirs of Emeterio executed an Extra Judicial Settlement of Estate and Absolute
Sale8 (Absolute Sale) adjudicating among themselves Lot 3154 and selling a 207-square meter portion of the same to the spouses
Wilfredo and Judith Sillero (spouses Sillero). The document, did not, however, identify the portion being sold as Lot No. 3154-A
but simply stated as follows:

That for and in consideration of the sum of TWELVE THOUSAND PESOS (P12,000.00) Philippine currency to them in hand paid by
spouses WILFREDO SILLERO and JUDITH SILLERO, both of legal age, Filipino, with residence at Taclobo, Dumaguete City, the
aforementioned heirs hereby SELL, TRANSFER and CONVEY absolutely and unconditionally, unto the said WILFREDO SILLERO and
JUDITH SILLEROW their heirs and assigns a portion of the above-described parcel of land [Lot 3154] which is TWO HUNDRED
SEVEN (207) square meters and which shall have access to and [to which] belong the existing road right of way, together with
the building and improvements thereon.9

The spouses Sillero, immediately after the sale, fenced Lot No. 3154-A and built a house thereon. Not long after, they sold Lot
3154-A to petitioner Gil Macalino, Jr. (Gil) by virtue of a Deed of Sale 10 (Deed of Sale) dated December 27,1996 which states in
part, viz.:

The Vendors are the absolute owners of TWO HUNDRED SEVEN (207) square [meter-part] of [L]ot 3154 x x x known as Sub[-]lot
3154-A x x x [T]he whole [L]ot 3154 is covered by Original Certificate of Title No. 2393-A situated at Junob, Dumaguete City and
more particularly described as follows:

ORIGINAL CERTIFICATE OF TITLE NO. 2393-A

A parcel of land (Lot No. 3154 of the Cadastral Survey of Dumaguete) with the improvements thereon, situated in the
Municipality of Dumaguete. Bounded on the NE., and N., by Lot No. 3153; on the SE., by a road; and on the SW., by a sapa.
Containing an area of FOUR HUNDRED and SIXTY NINE (469) SQUARE METERS, more or less, including [a] house under Tax Dec.
No. 93-022-1587

having been acquired by purchase in a document known as Extrajudicial Settlement of Estate and Absolute Sale x x x.

For and in consideration of the sum of TWO HUNDRED TEN THOUSAND PESOS ONLY, Philippine currency paid by the Vendee to
the Vendors, receipt whereof is hereby acknowledged by the VENDORS to their complete and entire satisfaction, [Vendors]
hereby SELL, CEDE, TRANSFER, and CONVEY unto the Vendee, his heirs, successors, and assigns the TWO HUNDRED SEVEN (207)
[-]square meter [portion] of the above-described [L]ot 3154 which x x x portion is now known as SUBLOT 3154-A, absolutely
and unconditionally, and free from any lien or encumbrance; 11

On July 2, 1998, Transfer Certificate of Title (TCT) No. 27658 12 in the names of Artemio and the other heirs of Emeterio was
issued in lieu of OCT No. 2393-A. Annotated therein was the sale made by the heirs of Emeterio to the spouses Sillero and also of
the latter to Gil.13

Intending to have Lot 3154-A registered in his name, Gil caused the survey of the same by Geodetic Engineer Rilthe P. Dorado
(Engr. Dorado) sometime in 1998.14 Engr. Dorado, however, discovered that the portion occupied by Gil consists of 140 square
meters only and not 207.15 Believing that he was deceived, Gil filed a complaint for estafa against the spouses Sillero. 16

On January 31, 2001, the Land Management Bureau issued an approved Subdivision Plan 17(Subdivision Plan) wherein Lot 3154
was subdivided into four sub-lots, to wit: (1) Lot 3154-A with an area of 140 square meters; (2) Lot 3154-B or the
existing barangay road with an area of 215 square meters; (3) Lot 3154-C with an area of 67 square meters; and (4) Lot 3154-D
with an area of 47 square meters. Notably, the Subdivision Plan which was based on the survey conducted by Engr. Dorado refers
not only to Lot 3154-A as Gil's property but also to Lot 3154-C. Likewise, the document does not bear the conformity of Artemio
and his co-heirs but only that of Gil.

A few years later or on January 18, 2005, Gil, joined by his children and their respective spouses, namely: petitioners Gil
Macalino, Jr., Teresita Macalino, Elpidio Macalino, Pilar Macalino, Gilberto Macalino, Hermilina Macalino, Emmanuel Macalino,
Edelina Macalino, Eduardo Macalino, Leonardo Macalino, Eillane Macalino, Apollo Macalino, Ma. Fe Macalino, and Hilda
Macalino, filed against Artemio a Complaint for Quieting of Title and Damages 18 with the RTC, docketed as Civil Case No. 13725.

Ruling of the Regional Trial Court

Petitioners claimed that the 207-square meter property sold by the spouses Sillero to Gil consists of Lot 3154-A with an area of
140 square meters and Lot 3154-C with an area of 67 square meters. In February 2003, however, Artemio built a pig pen on Lot
3154-C. When confronted by Gil, Artemio simply ignored him. Gil thus brought the matter to the barangay but since conciliation
proved futile, petitioners filed the said Complaint in order to quiet their title over Lot 3154-C and seek for damages. 19

Artemio denied petitioners' allegations. He asserted that the portion sold to the spouses Sillero was limited to the area enclosed
by points 1, 2, 3, 4, 5, and 6 denominated as Lot No. 3154-A in the sketch plan. Accordingly, only the said area was occupied and
possessed by the said spouses as in fact, they fenced the perimeter covered only by the aforementioned points. Logically,
therefore, what the spouses Sillero sold to Gil was also the same and exact property. And granting that the subject property has
an area less than 207-square meters, Gil only has himself to blame since he did not exercise the diligence required of a buyer.
Besides, the sale between Gil and the spouses Sillero was for a lump sum, hence the former cannot complain that the property
delivered to him was lacking in area. At any rate, Gil has no cause of action against Artemio since the latter was not privy to the
contract between the former and the spouses Sillero. Anent the Subdivision Plan, Artemio argued that the same does not bind
him as it was made without his knowledge and consent.20

After trial, the RTC in its Decision21 of December 12, 2008 ruled as follows:

The Extra-judicial Settlement of Estate and Absolute Sale dated May 3, 1995 and the Deed of Sale dated December 27,1996 are
common exhibits of the parties and admitted as such conveyances by them. On the basis of these documents, x x x Gil Macalino
asserts that he is in fact the owner of a 207 square meter portion of Lot 3154, particularly Lots 3154-A (140 square meters) and
3154-C (67 square meters) of the approved subdivision plan. This is disputed by [Artemio] who argues that the Deed of Sale
dated December 27, 1996, from Wilfredo and Judith Sillero to Gil Macalino, particularly states that they were selling a 207 square
meter portion 'known as sublot 3154-A'. Due to this phrase, [Artemio] argues that the sale was for a lump sum, presuming that
Gil Macalino only intended to buy Lot 3154-A and cannot claim the difference from Lot 3154-C. [Artemio] further asserts that
there is no privity of contract between Gil Macalino and [Artemio] because the contract is between Gil Macalino and Wilfredo
and Judith Sillero.

In the Extra-judicial Settlement of Estate and Absolute Sale dated May 3, 1995, [Artemio], as one of the signatories categorically
avowed that he was selling 207 square meters of Lot 3154 to Wilfredo and Judith Sillero. This conveyance did not identify the
portion sold as Lot 3154-A.

As a consequence, [Artemio] divested himself of any interest in a 207[-] square meter portion of Lot 3154 as early as May 3, 1995
when he signed the Extra-judicial Settlement of Estate [and Absolute Sale]. In signing such deed, he is now estopped from
disavowing that he conveyed a lesser area to x x x Wilfredo and Judith Sillero.

The identification of the portion sold as Lot 3154-A is found only in the subsequent Deed of Sale dated December 27, 1996,
which is the conveyance of the 207 square meter portion by Wilfredo and Judith Sillero to Gil Macalino. Under the principle of
privity of contracts, only the Silleros can claim that they sold Lot 3154-A consisting of 140 square meters only and not 207 square
meters. In truth however, the Deed of Sale by the Silleros provides that they were selling 207 square meters of Lot 3154. The
deed did not state that the Silleros were selling Lot 3154-A. This then lends to the conclusion that this was not a sale by lump
sum but by square meters, x x x

xxxx

WHEREFORE, premises considered, Judgment is rendered in favor of x x x Gil Macalino against [Artemio], declaring x x x Gil
Macalino x x x the rightful owner of Lot 3154-A and Lot 3154-C of the approved subdivision plan PSD-07-048844.

SO ORDERED.22ChanRoblesVirtualawlibrary

Aggrieved, Artemio filed a Notice of Appeal23 which was granted by the RTC in an Order24 dated February 9,2009.

Ruling of the Court of Appeals

Artemio argued before the CA that the sale between Gil and the spouses Sillero was for a lump sum. Pursuant, therefore, to
Article 1542 of the Civil Code,25 Gil cannot complain that the property delivered to him by the said spouses was lacking in area.
Artemio called attention to the testimony of Judith Sillero (Judith) who categorically declared that what she and her husband
bouglit from Artemio and his co-heirs was the property enclosed by points 1, 2, 3, 4, 5 and 6 identified as Lot 3154-A in the
sketch plan and, that it was the same and exact property wliich they sold to Gil. Judith further said that Gil even inspected the
property consisting of a fenced house and lot before he purchased the same. His inspection of the property, however, excluded
the lot at the other side of the barangay road (Lot 3154-C) since it was not involved in the subject sale, she and her husband not
being the owners thereof.26

Petitioners, for their part, fully subscribed to the Decision of the RTC. 27cralawred

In a Decision28 dated September 20, 2012, the CA concluded that the sale between the spouses Sillero and Gil involved Lot 3154-
A only and not Lot 3154-C. The appellate court gave weight to Judith's testimony and to the fact that the Deed of Sale between
the spouses Sillero and Gil expressly identified the lot subject thereof as Sub-lot 3154-A. The CA further ruled that contrary to
the ruling of the RTC, the sale between Gil and the spouses Sillero was for a lump sum and not by square meter since the said
deed showed that the purchase price agreed upon was based on a predetermined area of the lot (albeit erroneous since what
was sold was actually 140 square meters only) and not on a per square meter basis. The dispositive portion of the CA Decision
therefore reads:

WHEREFORE, premises considered, the Appeal is GRANTED. The Decision dated December 12, 2008 of the Regional Trial Court
(RTC), Branch 40, Dumaguete City in Civil Case No. 13725, is hereby SET ASIDE. Defendant-appellant Artemio Pis-an is declared as
the true and legal owner of the Sixty Seven (67) square meter lot known as Lot 1354-C situated at Northern Junob, Dumaguete
City.

SO ORDERED.29

Hence, this Petition for Review on Certiorari.

The Parties' Arguments

Petitioners reiterate the ratiocination of the RTC that since the Absolute Sale merely stated that Artemio and his co-heirs were
selling a 207-square meter portion of Lot 3154 and did not identify the portion being sold as Lot 3154-A, Artemio, by virtue of
the said document, had already divested himself of any interest to such an extent (207 square meters) of Lot 3154. Thus, he
cannot now lay a claim on Lot 3154-C, the area of which (67 square meters) if added to the area of Lot 3154-A (140 square
meters), totals 207 square meters. Besides, Artemio is already estopped from claiming Lot 3154-C since as early as 1996,
petitioners already occupied and possessed the said sub-lot by making use of the gravel, soil and stones found therein. In fact in
one instance, Artemio asked Gil why the latter was hollowing out the stones and gravels from Lot 3154-C and when Gil answered
that it was his lot anyway since the same was included in his purchase from the spouses Sillero, Artemio did not say or do
anything.30

Artemio, on the other hand, basically reiterates the arguments he advanced before the CA.

Our Ruling

There is no merit in the Petition.

Essentially, the Court is tasked to resolve who between petitioners and Artemio has a right over Lot 3154-C. For this
determination, one pivotal question must be answered, i.e., did the sale between the spouses Sillero and Gil include Lot 3154-C?
The Court finds in the negative.

It is necessary to determine the

true intention of the parties to the
instruments relevant to this case.

Petitioners, in order to further their case, rely on the failure of the Absolute Sale to state that the 207-square meter portion
conveyed by Artemio and his coheirs to the spouses Sillero was Lot 3154-A. Artemio, on the other hand, puts emphasis on the
fact that the Deed of Sale between Gil and the spouses Sillero expressly stated that the lot subject of the sale was Lot 3154-A
only. Plainly, the parties' respective arguments hinge on two relevant documents which they adopted as common exhibits - (1)
the Absolute Sale subject of which, among others, is the conveyance made by Artemio and his co-heirs to the spouses Sillero;
and (2) the Deed of Sale between the spouses Sillero and Gil. It is worthy to note that there is no dispute regarding the contents
of these documents, that is, neither of the parties contests that the Absolute Sale did not state that the 207-square meter
portion sold to the spouses Sillero was Lot 3154-A nor that the Deed of Sale between Gil and the spouses Sillero expressly
mentioned that the subject of the sale between them was Lot 3154-A. What is really in issue therefore is whether the admitted
contents of the said documents adequately and correctly express the true intention of the parties to the same. It has been held
that "[w]hen the parties admit the contents of written documents but put in issue whether these documents adequately and
correctly express the true intention of the parties, the deciding body is authorized to look beyond these instruments and into the
contemporaneous and subsequent actions of the parties in order to determine such intent." 31 In view of this and since the Parol
Evidence Rule32 is inapplicable in this case,33 an examination of the parties' respective parol evidence is in order. Indeed,
examination of evidence is necessarily factual34 and not within the province of a petition for review on certiorari 35which only
allows questions of law to be raised. However, this case falls under one of the recognized exceptions to such rule, i.e., when the
CA's findings are contrary to that of the trial court. 36

The subject of the sale between Artemio

and his co-heirs and the spouses Sillero
was Lot 3154-A only.

As mentioned, the Absolute Sale did not specifically indicate that Artemio and his co-heirs were conveying to the spouses Sillero
Lot 3154-A, It simply stated that they were selling to the said spouses a 207-square meter portion of Lot 3154. However, mere
should be no question that the sale was only specific to Lot 3154-A since none other than the parties to the said transaction
acknowledged this. At any rate, the testimonial evidence presented by Artemio sufficiently supports the conclusion that what
was sold to the spouses Sillero was indeed Lot 3154-A only.

Judith testified that since Lot 3154 consisted of 469 square meters and Artemio and his co-heirs were selling only a portion
thereof, Artemio presented to her and her husband a sketch plan prior to their purchase. Artemio pointed to the portion being
sold as enclosed by points 1, 2, 3, 4, 5, 6, and identified as Lot 3154-A. 37 Immediately after the sale, Judith and her husband
occupied Lot 3154-A, introduced a house thereon and built a fence around it.

For his part, Rolando Pis-an (Rolando), Artemio's son and co-heir, stated during trial that the spouses Sillero never took
possession of Lot 3154-C or of any other portion of Lot 3154 except for Lot 3154-A. 38 In fact, the nipa hut he built on Lot 3154-C
in 1993 remained standing there even after the sale transaction with the spouses Sillero in 1995 and until the time of the
trial.39 Also, subsequent to 1995, Rolando planted various kinds of trees on Lot 3154-C 40 without any objection on the part of the
spouses Sillero.

In view of the above, it cannot be any clearer that the portion of Lot 3154 subject of the Absolute Sale between Artemio and his
co-heirs and the spouses Sillero was Lot 3154-A only.

The sale transaction between the

spouses Sillero and Gil likewise
pertains to Lot 3154-A only.

Since what the spouses Sillero bought from Artemio and his co-heirs was Lot 3154-A, it logically follows that what they sold to Gil
was the same and exact property. After all, "no one can give what one does not have. A seller can only sell what he or she owns x
x x, and a buyer can only acquire what the seller can legally transfer." 41 Despite this and the categorical statement in the Deed of
Sale that the subject of the sale was Lot 3154-A, Gil insists that the sale includes Lot 3154-C.

However, from Gil's Affidavit[-]Complaint42 which he executed relative to the estafa case he filed against the spouses Sillero, it
can be deduced that what he bought from the latter was only Lot 3154-A on which a house stood, viz.:

That sometime on October 25, 1996, I purchased a portion of a piece of land with an area of about 207 square meters, more or
less, from the entire [l]ot covered by TCT No. 27658 (Lot No. 3154) owned by Artemio Pis-an with an entire area of about 469
square meters which Artemio Pis-an [i]nherited from Emeterio Jumento x x x;

That after Artemio Pis-an inherited the afore-mentioned Lot No. 3154 (TCT No. 27658), Artemio Pis-an sold about 207 square
meters to spouses Wilfredo and Judith Sillero, of legal age, Filipino and residing at Taclobo, Dumaguete City;

That later, Gil Macalino purchased the said portion of about 207 square meters, as aforesaid, on October 25, 1996 together with
all the improvements, which included a house which was under construction and made of mixed materials x x x

That in view of the desire of complainant Gil Macalino to register his purchased portion from the entire [L]ot, he [caused] it to be
surveyed by Geodetic Engineer Rilthe P. Dorado of the City Engineer's Office, Dumaguete City, sometime in April 1998 x x x

That after 1 week when Geodetic Engineer Dorado surveyed my [l]ot purchased from spouses Sillero, Engineer Dorado stop[p]ed
the survey because according to him my purchased [l]ot from spouses Sillero of about 207 square meters, overlapped on the
already titled Lot of LUBRUS INC. x x x

That in other words, what was really sold to me by the spouses Wilfredo and Judith Sillero is only with an area of about 140
square meters as shown by the subdivision survey plan of Geodetic Engineer Dorado x x x

That after I learned about my purchased lot that lacked the area of about 67 square meters and especially that the house where I
am now residing is built on the area having overlapped with an area of 67 square meters which was sold to me by spouses
Sillero, I approached respondent x x x Wilfredo Sillero about the portion which is owned by the aforesaid [c]ompany, GLUBUS
INC., but spouses respondents Wilfredo and Judith Sillero answered me sarcastically, that "Wala koy labot ana kay ang gibaligya
nako nimo 207 square meters" which means in English (I have nothing to do with that because what [we] sold to you was 207
square meters) xxx43ChanRoblesVirtualawlibrary

Notably too, the above-quoted allegations are plainly contrary to the claim later made by Gil in this case mat the 67-square
meter portion of the 207-square meter lot he bought from the spouses Sillero pertains to Lot 3154-C. If such was the case, there
would have been no reason for him to file an estafa case against the spouses Sillero since no portion of the lot sold to him would
be lacking. Otherwise stated, the 207-square meter portion he purchased from the spouses Sillero would be complete and intact
- with Lot 3154-A consisting of 140 square meters on the left side of thebarangay road on which the house where he resides
stood, and Lot 3154-C consisting of 67 square meters on the other side, both of which he now claims to be in his possession from
the time of sale. Again, however, such contention is clearly belied by Gil's Affidavit[-] Complaint. Besides it bears to mention that
when Artemio offered Gil's Affidavit[-]Complaint as part of his evidence, 44 Gil did not deny its existence or the truth of the
allegations therein but merely remarked that it is irrelevant. 45

Moreover, in an effort to convince the Court that Lot 3154-C was included in his sale Iransaction with the spouses Sillero, Gil
testified that when he bought a portion of the 469-square meter Lot 3154, he did not refer to a sketch plan. He merely estimated
the measurement of the lot on which the house of the spouses Sillero stood (Lot 3154-A) and the lot across the road (Lot 3154-C)
pointed to him by said spouses. By that, he already became satisfied that the combined area of the two lots is 207 square
meters. Gil denied seeing the sketch plan where Lot 3154-A was described as enclosed by points 1, 2, 3, 4, 5 and 6. He also
claimed that he signed the Deed of Sale on the assumption that the lot on the right side of the barangay road (Lot 3154-C) was
included under the denomination "Lot 3154-A" stated in the said deed. 46

The Court, however, is not convinced of Gil's testimony. It is implausible for a former Provincial Agriculturist like Gil to buy a
parcel of land without being conscious of its area, metes and bounds, and location especially considering that what he was
buying in this case was a mere portion of a still undivided lot. It is also unlikely for him, if he was indeed also buying Lot 3154-C,
to have not inspected the said property but only looked at it from the across the road (from Lot 3154-A). Moreover, the Court
could not understand why Gil would sign the Deed of Sale which indicated Lot 3154-A as the only subject thereof when as
alleged by him, the agreement involved two separate and different portions of Lot 3154. Obviously, Lot 3154-A and the lot on the
other side of the road (Lot 3154-C) are two separate and different portions of Lot 3154 as in fact, they were separated by
the barangayroad. Common sense, thus, dictates that the two lots cannot fall under a single denomination since they apparently
have different technical descriptions. Moreover, what Gil occupied after the sale was Lot

A only. His claimed possession of Lot 3154-C as correctly observed by the CA, 47 is not supported by the evidence on record.

On the other hand, Judith's testimony is more in accord with the clear import of the Deed of Sale and the ordinary course of
things. She testified, viz.:

Q After you purchased a portion of Lot 3154 which you said has been identified as [lot] 3154-A enclosed end point 1 to 6,
what did you do to the land?
A We developed the land, Sir. We applied [for] fencing permit at the City and we also applied [for] a building permit, Sir.
Q Now what improvements, if any, did you introduce x x x? A Only the fence and also the house, Sir.
Q Now after having built the fence and the house, what happened] to the property and the improvements which you
introduce[d]? Did you sell it to anyone?
A After several months, we needed the money [so] we [sold] the property, Sir.
Q Now in what manner did you advertise the intention to sell?
A Thru the daughter[-]in[-]law of Mr. Macalino, Sir. We had advertised that we are going to sell the house and lot, Sir, and this
daughter[-]in[-]law of Mr. Macalino [came to us] since Mr. Macalino [was] looking for a house and lot which he can occupy
after his retirement.
Q Now eventually did you and your husband meet Gil Macalino [who] is one of the plaintiffs in this case?
A The first negotitation, Sir, was [with] his daughter[-]in[-]law since Mr. Macalino [was] still in Larena working at that time and
when we negotiated the property, it was Mr. Macalino himself.
Q When you negotiated for the sale of the property with Mr. Gil Macalino himself, did he examine the perimeter, the area
which you sought to sell?
A Yes. It [was] Mr. Macalino and his family who look[ed] at the property, Sir.
Q Will you please describe how Gil Macalino and his family examine[d] the property?
A He looked at the house [to find out how many rooms it has], the septic tank and also around the house, Sir, and it was
quick.
Q How about the perimeter of the fence[,] did Gil Macalino and his family went around to see the perimeter of the fence with
the boundaries?
A Yes, Sir, when they were inside.
Q Eventually, was the sale consummated between you and your husband and Gil Macalino?
A After he looked at the property, Sir, we went to see Arty. Lumjod.
Q What happen[ed] at the office of Atty. Lumjod?
A We agreed to the amount of the house and lot and the [payment].
Q Now, was a Deed of Sale eventually made and signed by you and Gil Macalino?
A We have documents, Sir, and it is with Atty. Lumjod.
xxxx
Q Now in the Deed of Sale the description of the property is the whole Lot 3154 which is 469 square meters. Now in the
lower portion what you sold was only [lot] 3154-A. Now, what [was] the basis of your [identification of] the portion you
sold as [lot] 3154-[?] Did you show the Sketch Plan to Gil Macalino?
A Yes. I [showed] x x x him the Sketch Plan
Q That Sketch Plan was the one marked as Exhibit "6"?
A The Sketch Plan which was prepared by Engr. Ridad, Sir. Yes, this is the Sketch Plan [referred to as] Exhibit "6."
Q Now when you agreed with Gil Macalino [regarding] the sale of [lot] 3154-A, was your agreement in lump sum amount or
did you sell it in per square meter?
A The whole house and lot, Sir.
Q Now as shown in this Sketch Plan x x x across the road there are x x x words [written] "portion of lot 3154-C["]. Was this
included in the sale between the Pis-an family and you and your husband?
A That is not included, Sir.
Q Was this portion [lot] 3154-C included in the sale between you and Gil Macalino?
xxxx
A That is not included.
Q Did you take possession of Lot No. 3154-C?
A No, Sir.
Q Did you turn over possession of [Lot No.] 3154-C to Gil Macalino?
A No, Sir.
Q When you bought [Lot No.] 3154-A, were there improvements on [L]ot 3154-C across the road?
A Yes, there was, Sir. There are trees, gemilina trees and acacia trees.
Q To your knowledge, who introduce[d] those improvements?
A Pis-an, Sir. That is across the road Sir. That is part of the whole lot but it is not included when I boughtthe property and if we
have money, we might buy that property.48

The subdivision plan which refers to Lots

3154-A and 3154-C as Gil's properties cannot
support petitioners' claimed right over
Lot 3154-C

Petitioners cannot rely on the Subdivision Plan describing Lots 3154-A and 3154-C as Gil's properties to support their claimed
right over Lot 3154-C. For one, the said subdivision plan does not bear the conformity of Artemio and his coheirs who remain to
be the registered owners of Lot 3154. For another, there is doubt as to who really initiated the survey which led to the issuance
of the Subdivision Plan. Gil claims that the same was made through the instance of the City Engineer's Office. When asked,
however, of the circumstances surrounding the conduct of the said survey and his supposed participation thereon, Gil
prevaricated on his answers.49 Moreover, petitioners' own witness, Engr. Josephine Antonio, stated during cross-examination that
Engr. Dorado, who conducted the survey, undertook the same not on behalf of the City Engineer's Office but in his private
capacity, viz,:

Q Now, Engr. Antonio, x x x, [L]ot No. 3154 appears to be registered in the name of Artemio Pis-an, Eulogio Jumento, Miraflor
Pis-an, Jocelyn Pis-an, Lando Pis-an, Leon Pis~an, Llamato Pis-an and Joena Pis-an. My question is, in this subdivision plan
submitted, is there any document showing that any of the registered owners of Lot No. 3154 covered by Transfer Certificate of
Title No. 27658 appeared to have initiated this survey?
A Mr. Gil Macalino signed the application form. And this was prepared by Engr. Dorado.
Q Now, when this was prepared by Engr. Dorado x x x can you tell us if at [that] time [in] 1999[J Engr. Rilthe Dorado was under
you x x [in] The City Development Office?
A No. He was I think with the City Engineer's Office.
Q Does your records show whether or not Engr. Rilthe Dorado did this as part of his duties in the City Engineer's Office or in his
private capacity?
A I think in his private capacity.50

Moreover, the said subdivision plan was issued after Gil's discovery that Lot 3154-A only consisted of 140 square meters and not
207 square meters.

Given the foregoing, the Court could only conclude that the said subdivision plan was secured to give the impression that the
sale between Gil and the spouses Sillero included Lot 3154-C, the 67-square meter area, of which when tacked to the 140-square
meter area of Lot 3154-A completes the 207-square meter portion that Gil supposedly bought from the spouses Sillero. The said
document, therefore, does not deserve any credence from this Court.

The remedy of quieting of title is not

available to petitioners.

"Quieting of title is a common law remedy for the removal of any cloud upon or doubt or uncertainty with respect to title to real
property."51 "In order that an action for quieting of title may prosper, it is essential that the plaintiff must have legal or equitable
title to, or interest in, the property which is the subject-matter of the action. Legal title denotes registered ownership, while
equitable title means beneficial ownership. In the absence of such legal or equitable title, or interest, there is no cloud to be
prevented or removed."52

Petitioners anchored their Complaint on their alleged legal title over Lot 3154-C wliich as above-discussed, they do not have.
Hence, the action for quieting of title is unavailable to petitioners.chanrobleslaw
WHEREFORE, the Petition for Review on Certiorari is DENIED. The assailed Decision dated September 20, 2012 of the Court of
Appeals in CA-G.R. CV No. 02893 is AFFIRMED.

SO ORDERED.

IVQ LANDHOLDINGS, INC., , v. REUBEN BARBOSA, (January 18, 2017)

In this petition for review on certiorari1 under Rule 45 of the Rules of Court, petitioner IVQ Landholdings, Inc. (IVQ) assails the
Decision2 dated December 9, 2009 and the Resolution3 dated July 30, 2010 of the Court of Appeals in CA-G.R. CV No. 90609. The
decision of the appellate court affirmed the Decision 4 dated June 15, 2007 of the Regional Trial Court (RTC) of Quezon City,
Branch 222 in Civil Case No. Q04-52842, which adjudicated in favor of herein respondent Reuben Barbosa (Barbosa) the
ownership of the property subject of this case and ordered the cancellation of IVQ's certificate of title thereto. The resolution of
the appellate court denied the Motion for Reconsideration 5 and the Supplemental Motion for Reconsideration 6 filed by IVQ
regarding the Court of Appeals' decision.

The Facts

On June 10, 2004, Barbosa filed a Petition for Cancellation and Quieting of Titles7 against Jorge Vargas III, Benito Montinola, IVQ,
and the Register of Deeds of Quezon City, which case was docketed as Civil Case No. Q04-52842 in the RTC of Quezon City,
Branch 222.

Barbosa averred that on October 4, 1978, he bought from Therese Vargas a parcel of land identified as Lot 644-C-5 located on
Visayas Avenue, Culiat, Quezon City (subject property). Thereafter, Therese Vargas surrendered to Barbosa the owner's duplicate
copy of her title, Transfer Certificate of Title (TCT) No. 159487. In the Deed of Absolute Sale in favor of Barbosa and in the copy of
Therese Vargas's TCT No. 159487, the subject property was described as:ChanRoblesVirtualawlibrary

A parcel of land (Lot 644-C-5 of the subdivision plan, LRC, Psd-14038, being a portion of Lot 644-C, Fls-2544-D, LRC, Record No.
5975); situated in the District of Culiat, Quezon City, Island of Luzon. x x x containing an area of THREE THOUSAND FOUR
HUNDRED FIFTY-TWO (3,452) square meters, more or less.8chanroblesvirtuallawlibrary
Barbosa said that he took possession of the subject property and paid real estate taxes thereon in the name of Therese Vargas.
Sometime in 2003, Barbosa learned that Therese Vargas's name was cancelled and replaced with that of IVQ in the tax
declaration of the subject property.

Upon investigation, Barbosa found out that the subject property was previously registered in the name of Kawilihan Corporation
under TCT No. 71507. Therese Vargas acquired the subject property from Kawilihan Corporation and the date of entry of her TCT
No. 159487 was November 6, 1970. On the other hand, IVQ supposedly bought the subject property from Jorge Vargas III who, in
turn, acquired it also from Kawilihan Corporation. The date of entry of Jose Vargas III's TCT No. 223019 was October 14, 1976.
This title was later reconstituted and re-numbered as TCT No. RT-76391. The title of IVQ, TCT No. 253434, was issued on August
6, 2003.

Barbosa argued that even without considering the authenticity of Jorge Vargas III's title, Therese Vargas's title bore an earlier
date. Barbosa, thus, prayed for the trial court to issue an order directing the Office of the Register of Deeds of Quezon City to
cancel Jorge Vargas III's TCT No. 223019 and IVQ's TCT No. 253434 and adjudicating ownership of the subject property to him. 9

In their Answer10 to the above petition, Jose Vargas III, Benito Montinola, and IVQ (respondents in the court a quo) countered
that the alleged title from where Barbosa's title was allegedly derived from was the one that was fraudulently acquired and that
Barbosa was allegedly part of a syndicate that falsified titles for purposes of "land grabbing." They argued that it was
questionable that an alleged lot owner would wait for 30 years before filing an action to quiet title. They prayed for the dismissal
of the petition and, by way of counterclaim, sought the award of moral and exemplary damages, attorney's fees and costs of suit.

The Register of Deeds of Quezon City neither filed an answer to Barbosa's petition nor participated in the trial of the case.

During trial, Barbosa testified, inter alia, that he is the owner of the subject property that he bought from Therese Vargas. The
property was at that time registered in her name under TCT No. 159487. Barbosa took possession of the subject property seven
days after he bought the same and he employed a caretaker to live therein. Before Therese Vargas, the owner of the property
was Kawilihan Corporation, which company was owned by Jorge Vargas. 11 Barbosa stated that the subject property remained
registered in the name of Therese Vargas as he entrusted her title to another person for custody but the said person went to
Canada. Barbosa paid real estate taxes on the subject property in the name of Kawilihan Corporation from 1978 until 2002. From
2003 to 2006, he paid real estate taxes thereon in the name of Therese Vargas. 12

Barbosa added that in the year 2000, Santiago Sio Soy Une, allegedly the president of Lisan Realty and Development Corporation
(Lisan Realty), presented to Barbosa's caretaker a Deed of Sale with Assumption of Mortgage, 13 which was allegedly executed by
Jorge Vargas III and Lisan Realty involving the subject property. Barbosa then went on to compile documents on the transactions
relating to the subject property.

Barbosa testified that in the Deed of Sale with Assumption of Mortgage of Jorge Vargas III and Santiago Sio Soy Une, the Friar
Land Survey (FLS) number was denominated as FLS-2554-D, while in the title of Therese Vargas it was FLS-2544-D. Barbosa
obtained a certification from the Lands Management Bureau that FLS-2554-D was not listed in their electronic data processing
(EDP) listing, as well as a certification from the DENR that FLS-2554-D had no records in the Land Survey Records Section of said
office. On the other hand, he obtained a certification from the Lands Management Bureau that Lot 644 subdivided under FLS-
2544-D was listed in their records.14 Barbosa also learned that IVQ was registered with the Securities and Exchange Commission
only on June 5, 1998. Moreover, on January 7, 2004, IVQ filed Civil Case No. Q-17499(04), which is a petition for the cancellation
of an adverse claim filed by Santiago Sio Soy Une (Exhibit "RR"). In a portion of the transcript of stenographic notes (TSN) in said
case, it was stated that IVQ bought the property from Therese Vargas, not from Jorge Vargas III. 15

Barbosa furthermore secured a certification from the EDP Division of the Office of the City Assessor in Quezon City that there
were no records of real property assessments in the name of Jorge Vargas III as of August 15, 2006. Moreover, Barbosa stated
that Atty. Jesus C. Apelado, Jr., the person who notarized the March 3, 1986 Deed of Absolute Sale between Jorge Vargas III and
IVQ, was not authorized to do so as Atty. Apelado was only admitted as a member of the Philippine Bar in 1987. Also, the notarial
register entries, i.e., the document number, page number, book number and series number, of the Deed of Absolute Sale in favor
of IVQ were exactly the same as those in the special power of attorney (SPA) executed by Jorge Vargas III in favor of Benito
Montinola, who signed the Deed of Absolute Sale on behalf of Jorge Vargas III. The Deed of Absolute Sale and the SPA were
notarized by different lawyers but on the same date.16

On the part of the respondents in the court a quo, they presented a lone witness, Atty. Erlinda B. Espejo. Her testimony was
offered to prove that she was the legal consultant of IVQ; that IVQ's TCT No. 253434 was acquired from Jorge Vargas III through
TCT No. RT-76391; that Jorge Vargas III's title was mortgaged at Philippine National Bank (PNB), Bacolod; that Benito Montinola,
the attorney-in-fact of Jorge Vargas III, sold the subject property to Lisan Realty who in turn assigned its rights to IVQ and; that
IVQ redeemed the property from PNB. Barbosa's counsel offered to stipulate on the offer so that the witness' testimony could
already be dispensed with.17

As to the supposed sale to Lisan Realty and Lisan Realty's assignment of rights to IVQ, the counsel for Barbosa agreed to stipulate
on the same if the transactions were annotated in Jorge Vargas III's title. The counsel for IVQ said that they were so annotated.
Upon inquiry of the trial court judge, the counsel for IVQ clarified that the transfers or assignment of rights were done at the
time that the subject property was mortgaged with PNB. The property was then redeemed by IVQ on behalf of Jorge Vargas III. 18

The Decision of the RTC

On June 15, 2007, the RTC granted Barbosa's petition and ordered the cancellation of IVQ's TCT No. 253434. 19 The trial court
noted that while the original copy of the Deed of Absolute Sale in favor of Barbosa was not presented during trial, Barbosa
presented secondary evidence by submitting to the court a photocopy of said deed and the deed of sale in favor of his
predecessor-in-interest Therese Vargas, as well as his testimony. The RTC ruled that Barbosa was able to establish the existence
and due execution of the deeds of sale in his favor and that of Therese Vargas.

The Certification20 dated February 12, 2004 from the Office of the Clerk of Court and Ex-Officio Sheriff of the RTC, Manila stated
that the page on which the Deed of Sale dated October 4, 1978 in favor of Barbosa might have been probably entered was torn.
This, however, did not discount the possibility that said deed was actually notarized and recorded in the missing notarial records
page. Moreover, the RTC found that Barbosa adduced evidence that proved the payment 21 of Therese Vargas to Jorge Vargas, as
well as the payment of Barbosa to Therese Vargas.

The RTC further observed that Therese Vargas's TCT No. 159487 and Jorge Vargas III's TCT No. 223019 bear more or less identical
technical descriptions of Lot 644-C-5, except for their friar survey plan numbers. However, the Lands Management Bureau and
Land Survey Records Section of the DENR, NCR issued certifications attesting that their respective offices had no record of FLS-
2554-D, the land survey number in the certificates of title held by Jorge Vargas III and IVQ. On the other hand, Barbosa presented
a certified true copy of the subdivision survey plan FLS-2544-D from the Lands Management Bureau, thereby bolstering his claim
that the title of Therese Vargas was an authentic transfer of the title of Kawilihan Corporation.

Therese Vargas's TCT No. 159487 was also issued earlier in time than Jorge Vargas III's TCT No. 223019. Not only was the original
of Therese Vargas's TCT No. 159487 presented in court, but the same was also proven to have existed according to the
Certification from the LRA dated October 6, 2003 that Judicial Form No. 109-D with Serial No. 1793128 - pertaining to TCT No.
159487 - was issued by an authorized officer of the Register of Deeds of Quezon City.

In contrast, the RTC noted that IVQ was not able to prove its claim of ownership over the subject property. The deed of sale in
favor of IVQ, which was supposedly executed in 1986, was inscribed only in 2003 on Jorge Vargas III's TCT No. RT-76391 that was
reconstituted back in 1993. Instead of substantiating their allegations, respondents in the court a quo opted to offer stipulations,
such as on the matter of Lisan Realty's assignment of its rights of ownership over the subject property in favor of IVQ. However,
the said assignment was not reflected in the title of Jorge Vargas III. The RTC likewise found it perplexing that when IVQ filed a
petition for cancellation of encumbrance in Jorge Vargas III's title, docketed as LRC No. Q-17499 (04), it alleged therein that it
acquired the subject property from Therese Vargas, not Jorge Vargas III.

The trial court added that while there is no record of tax declarations and payment of real estate taxes in the name of Jorge
Vargas III, Therese Vargas declared the subject property for taxation purposes in her name and, thereafter, Barbosa paid real
estate taxes thereon in her name. On the other hand, the only tax declaration that IVQ presented was for the year 2006. The RTC
also opined that while Barbosa was not able to sufficiently establish his possession of the subject property as he failed to put on
the witness stand the caretaker he had authorized to occupy the property, IVQ also did not gain control and possession of the
subject property because the same continued to be in the possession of squatters.

To impugn the above decision of the trial court, IVQ, alone, filed a Motion for Reconsideration/New Trial/Reopening of
Trial22 under the representation of a new counsel.23 In its Motion for Reconsideration, IVQ argued that the RTC erred in
concluding that Barbosa's title is superior to its title.24 IVQ alleged that Barbosa submitted forged and spurious evidence before
the trial court. On the other hand, in its Motion for New Trial, IVQ alleged that it was defrauded by its former counsel, Atty.
Leovigildo Mijares, which fraud prevented it from fully presenting its case in court. IVQ also averred that it found newly-
discovered evidence, which it could not have discovered and produced during trial.
In an Order25 dated November 28, 2007, the trial court denied IVQ's Motion for Reconsideration/New Trial/Reopening of Trial for
lack of merit.

IVQ's Appeal in the Court of Appeals

IVQ interposed an appeal26 to the Court of Appeals. In its Appellant's Brief, IVQ first laid down its version of the facts, to
wit:ChanRoblesVirtualawlibrary
On 12 March 1976, Kawilihan Corporation, represented by its President and Chairman of the Board Jorge B. Vargas, executed a
Deed of Absolute Sale x x x, whereby he sold the subject property to appellant Vargas, III.

On 14 October 1976, TCT No. 71507 was cancelled and in lieu thereof TCT No. 223019 x x x was issued in the name of appellant
Vargas, III who on 23 December 1976 executed a Special Power of Attorney x x x in favor of appellant Benito C. Montinola, Jr.
with power among other things to mortgage the subject property for and in behalf of appellant Vargas, III.

On 25 December 1976, appellant Vargas, III mortgaged the subject property to the Philippine National Bank (PNB), Victorias
Branch, Negros Occidental as security for a loan in the principal amount of P506,000.00.

On 04 October 1978, Therese Vargas executed a Deed of Absolute Sale x x x wherein she sold the subject property to appellee
Barbosa who however did not register the said sale with the Registry of Deeds of Quezon City. It appears that Therese Vargas was
able to secure TCT No. 159487 x x x in her name on 06 November 1970 covering the subject property.

Meanwhile, appellant Vargas, III executed another Special Power of Attorney x x x in favor of appellant Montinola, Jr. with power
among other things to sell the subject property for and in behalf of appellant Vargas, III. Thus, on 03 March 1986, during the
effectivity of the mortgage contract with PNB, appellant Montinola sold the subject property to appellant IVQ for and in
consideration of the amount of P450,000.00. 27chanroblesvirtuallawlibrary
After the alleged sale of the subject property to IVQ, the following incidents transpired:ChanRoblesVirtualawlibrary
When appellant Vargas, III failed to pay his loan, PNB foreclosed the mortgage and in the public auction that followed, the
subject property was sold to PNB.

A Certificate of Sale was issued in favor of PNB but the latter did not cause the registration of the certificate of sale right away.

Sometime in 1991, appellant Montinola, Jr. caused the filing of a Petition for Reconstitution of TCT No. 223019 which was
granted in 1993. Consequently, TCT No. RT-76391 was issued, in the name of appellant Vargas, III, in lieu ofTCT No. 223019. On
13 July 1993, the Certificate of Sale in favor of PNB was inscribed on appellant Vargas, III's new title.

On 17 February 1994, appellant Vargas, III executed a Deed of Sale with Assumption of Mortgage x x x wherein he sold to Lisan
Realty and Development Corporation (Lisan Realty) the subject property with the latter assuming the loan balance with PNB.

On 23 June 1994, appellant IVQ, for and in behalf of defendant Vargas, III, redeemed the subject property from PNB and on 24
June 1994, the Certificate of Redemption was annotated at the dorsal portion of TCT No. RT-76390.

On 21 August 2000, Lisan Realty caused the annotation of an Affidavit of Adverse Claim x x x on TCT No. RT-76390.

Thereafter, appellant IVQ filed a Petition for Cancellation of Encumbrance x x x with the Regional Trial Court of Quezon City,
Branch 220, docketed as LRC Case No. Q-17499 (04).

On 06 August 2003, the Register of Deeds of Quezon City cancelled TCT No. RT-76390 and in lieu thereof TCT No. 253434 was
issued in the name of appellant IVQ.

On 11 February 2004, the Regional Trial Court of Quezon City, Branch 220 rendered a Decision x x x granting appellant IVQ's
Petition for Cancellation of Encumbrance and ordering the cancellation of the annotation of the adverse claim on TCT No.
253434.

In August 2004, appellant IVQ instituted [a] Complaint x x x for unlawful detainer with the Metropolitan Trial Court of Quezon
City, Branch 38 against several persons who were occupying the subject property without any right whatsoever. The case was
docketed as Civil Case No. 38-33264.

On 26 October 2004, the Metropolitan Trial Court of Quezon City, Branch 38 rendered a Decision x x x in favor of appellant IVQ
ordering the defendants therein to vacate the subject property.28chanroblesvirtuallawlibrary
The Court of Appeals, however, paid no heed to IVQ's appeal as it affirmed the ruling of the RTC. The appellate court held that
Barbosa was able to prove his ownership over the subject property, while IVQ presented a rather flimsy account on the transfer
of the subject property to its name.
IVQ filed a Motion for Reconsideration and a Supplemental Motion for Reconsideration on the above judgment, but the Court of
Appeals denied the same in its assailed Resolution dated July 30, 2010.

IVQ's Petition for Review on Certiorari

IVQ instituted before this Court the instant petition for review on certiorari on August 20, 2010, which prayed for the reversal of
the above rulings of the Court of Appeals. In a Resolution29dated September 29, 2010, the Court initially denied IVQ's petition
for its failure to show that the Court of Appeals committed any reversible error in its assailed rulings.

IVQ filed a Motion for Reconsideration30 on the denial of its petition. To prove that its title to the subject property is genuine,
IVQ averred that the Deed of Absolute Sale in favor of Jorge Vargas III was notarized by Atty. Jejomar C. Binay, then a notary
public for Mandaluyong. IVQ attached to its motion for reconsideration, among others, a photocopy of a Certification 31 dated
October 8, 2010 from the Office of the Clerk of Court of the RTC of Pasig City that "ATTY. JEJOMAR C. BINAY was appointed
Notary Public for and in the Province of Rizal for the year 1976" and that he "submitted his notarial reports for the period
January, 1976 up to December, 1976." IVQ also attached a photocopy of the Deed of Absolute Sale in favor of Jorge Vargas III
obtained from the records of the National Archives on October 14, 2010. 32

To prove that Barbosa's claim of ownership is spurious, IVQ attached to its motion for reconsideration the following
documents:chanRoblesvirtualLawlibrary

(1) a photocopy of a Certification dated October 27, 2010 from the Office of the Bar Confidant of the Supreme Court that
Espiridion J. Dela Cruz, the notary public who supposedly notarized the Deed of Absolute Sale in favor of Therese Vargas, is not a
member of the Philippine Bar;33

(2) a photocopy of the Certification dated October 19, 2010 from the National Archives of the Philippines that a copy of the Deed
of Absolute Sale in favor of Therese Vargas is not extant in the files of said office; 34

(3) a Certification dated October 12, 2010 from the Office of the Clerk of Court and Ex-Officio Sheriff of the RTC of Manila, stating
that the notarial entries of Atty. Santiago R. Reyes in the Deed of Absolute Sale between Therese Vargas and Barbosa Doc. No.
1947, Page 92, Book No. XIV, Series of 1978 - actually pertained to a different deed of sale; 35

(4) photocopies of pages 90, 91 and 92, Book XIV, Series of 1978 of Atty. Santiago R. Reyes's notarial records, which were
reproduced from the National Archives on October 14, 2010, showing that the Deed of Absolute Sale between Therese Vargas
and Barbosa was not found therein;36

(5) a photocopy of a Certification dated October 14, 2010 of the City Treasurer's Office of the City of Manila, stating that
Residence Certificate No. A-423263 - the residence certificate number of Therese Vargas in the Deed of Absolute Sale in favor of
Barbosa - was not among those allotted to the City of Manila; 37 and

(6) a letter dated October 20, 2010 from Director Porfirio R. Encisa, Jr. of the LRA Department on Registration, explaining that the
land survey number of FLS-2554-D in IVQ's TCT No. 253434 was a mere typographical error and it should have been FLS-2544-D. 38

In a Resolution39 dated December 15, 2010, the Court denied IVQ's Motion for Reconsideration.

Undaunted, IVQ filed a Second Motion for Reconsideration, 40 arguing that it was able to submit new pieces of documentary
evidence that surfaced for the first time when its Motion for Reconsideration was submitted by its new counsel. IVQ entreated
the Court to consider the same in the higher interest of justice.

Barbosa opposed41 the above motion, countering that the same is a prohibited pleading. Barbosa maintained that it was
impossible for IVQ to acquire ownership over the subject property as the latter was only incorporated on June 5, 1998. Thus, IVQ
could not have bought the property from Jorge Vargas III on March 3, 1986 or subsequently redeemed the property in 1994.

In a Resolution42 dated June 6, 2011, the Court reinstated IVQ's petition and required Barbosa to comment thereon.

Barbosa moved for a reconsideration43 of the said resolution, citing IVQ's lack of legal personality when it supposedly purchased
the subject property and IVQ's inconsistent statements as to how it acquired the same. The Court treated the above motion of
Barbosa as his comment to IVQ's petition and required IVQ to file a reply thereto. 44

In its Reply,45 IVQ primarily argued that Barbosa did not bother to refute the allegations and the evidence on the spuriousness of
his title and instead sought to divert the issue by attacking IVQ's corporate existence.

The Court, thereafter, gave due course to the petition and required the parties to submit their respective memoranda. 46
In its memorandum,47 IVQ avers that while the evidence supporting its case surfaced for the first time after its petition was filed
with this Court, peculiar circumstances involving the actuations of IVQ's former counsel and Barbosa's introduction of spurious
documents warrant the suspension of procedural rules in the interest of justice. IVQ insists that Barbosa was not able to prove
his claim by preponderance of evidence.

Upon the other hand, Barbosa contends that IVQ could not legally claim ownership of the subject property as this claim is
anchored on a Deed of Absolute Sale executed by Jorge Vargas III on March 3, 1986 while IVQ was incorporated only on June 5,
1998. Barbosa also points out that the Deed of Absolute Sale in favor of IVQ was signed only by Jorge Vargas III's representative,
Benito Montinola. There is no corresponding signature on the part of the vendee. Barbosa adopts entirely the findings of the RTC
and the Court of Appeals that the sale in favor of Therese Vargas is the one to be legally sustained.

The Ruling of the Court

Without ruling on the merits of this case, the Court finds that there is a need to reassess the evidence adduced by the parties to
this case and thereafter reevaluate the findings of the lower courts.

To recall, Barbosa initiated this case before the trial court via a petition for cancellation and quieting of titles. As held in Secuya v.
De Selma,48
In an action to quiet title, the plaintiffs or complainants must demonstrate a legal or an equitable title to, or an interest in, the
subject real property. Likewise, they must show that the deed, claim, encumbrance or proceeding that purportedly casts a
cloud on their title is in fact invalid or inoperative despite its prima facieappearance of validity or legal efficacy. This point is
clear from Article 476 of the Civil Code, which reads:ChanRoblesVirtualawlibrary
"Whenever there is cloud on title to real property or any interest therein, by reason of any instrument, record, claim,
encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable or
unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet title."

"An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein." (Emphasis
supplied; citations omitted.)
The Court also stressed in Santiago v. Villamor49 that in civil cases, the plaintiff must establish his cause of action by
preponderance of evidence; otherwise, his suit will not prosper.

In the instant case, the trial court and the Court of Appeals adjudicated the subject property in favor of Barbosa and directed the
cancellation of IVQ's certificate of title.

The trial court found that Barbosa was able to substantiate the transfer of ownership of the subject property from Kawilihan
Corporation to Therese Vargas and then to Barbosa. Specifically, Barbosa established the existence and execution of the Deed of
Absolute Sale dated September 11, 1970 between Kawilihan Corporation and Therese Vargas, as well as the Deed of Absolute
Sale dated October 4, 1978 between Therese Vargas and Barbosa. In like manner, the trial court ruled that Barbosa adduced
evidence that purportedly proved the payment of Therese Vargas to Kawilihan Corporation, and the payment of Barbosa to
Therese Vargas. Also, the trial court found that Barbosa was able to prove the validity of Therese Vargas's TCT No. 159487.
Moreover, the friar land survey number in Therese Vargas's TCT No. 159487- FLS-2544-D - was the one found to be extant in the
records of Lands Management Bureau, not FLS-2554-D, the survey number in the certificates of title of Jorge Vargas III and IVQ.

On the other hand, the trial court found that IVQ failed to establish its claim of ownership over the subject property, given the
inconsistent statements on how the property was transferred from Kawilihan Corporation to Jorge Vargas III and eventually to
IVQ.

Before this Court, however, IVQ adduced new pieces of documentary evidence that tended to cast doubt on the veracity of
Barbosa's claim of ownership.

To impugn the validity of the Deed of Absolute Sale between Kawilihan Corporation and Therese Vargas, IVQ submitted a copy of
the Certification from the Office of the Bar Confidant that Espiridion J. Dela Cruz, the notary public who supposedly notarized the
said deed, is not a member of the Philippine Bar. IVQ also submitted a copy of the Certification from the National Archives,
stating that the Deed of Absolute Sale in favor of Therese Vargas was not found in their records.

Anent the Deed of Absolute Sale between Therese Vargas and Barbosa, IVQ presented a Certification from the Office of the Clerk
of Court and Ex-Officio Sheriff of the RTC of Manila, stating that the notarial entries of Atty. Santiago R. Reyes in said deed, i.e.,
Doc. No. 1947, Page 92, Book No. XIV, Series of 1978, pertained to a deed of sale between other individuals. Also, the Deed of
Absolute Sale in favor of Barbosa was not found in the photocopies of pages 90, 91, and 92 of the aforesaid notarial records of
Atty. Santiago R. Reyes, which pages were reproduced from the National Archives. IVQ also submitted a Certification from the
City Treasurer's Office of the City of Manila, stating that Therese Vargas's Residence Certificate No. A-423263 in the Deed of
Absolute Sale in favor of Barbosa was not among those allotted to the City of Manila.
Furthermore, IVQ submitted a letter from Director Porfirio R. Encisa, Jr. of the LRA Department of Registration, stating that the
survey number FLS-2554-D in IVQ's TCT No. 253434 was a typographical error and the same should have been FLS-2544-D.

On the other hand, to bolster its claim of ownership over the subject property, IVQ presented a copy of the Deed of Absolute
Sale50 dated March 12, 1976 between Kawilihan Corporation and Jorge Vargas III that was obtained from the records of the
National Archives. IVQ also submitted a copy of the Certification from the Office of the Clerk of Court of the RTC of Pasig City that
Atty. Jejomar C. Binay, the officer who notarized the said deed, was indeed appointed as a notary public for the province of Rizal
for the year 1976 and the latter submitted his notarial reports for the said year.

Interestingly, despite the claim of both parties that their respective titles could be traced to TCT No. 71507 in the name of
Kawilihan Corporation, neither of them thought to submit a certified true copy of the cancelled TCT No. 71507, which would
have indicated to whom the subject property had in fact been transferred.

The parties likewise admit in their pleadings that there is an on-going investigation being conducted by the LRA on the
authenticity and genuineness of the certificates of title involved in the present case and to date, the LRA has not issued any
official report pertaining to said investigation.

After reviewing the factual and procedural antecedents of this case, the Court deems it appropriate that further proceedings be
undertaken in order to verify the authenticity and veracity of the parties' certificates of title and other documentary evidence.

For sure, the Court is aware that the aforesaid evidence belatedly introduced by IVQ are not technically newly-discovered
evidence, given that the same could have been discovered and produced at the trial of the case had IVQ exercised reasonable
diligence in obtaining them.51 Nonetheless, we find that the above evidence cannot simply be brushed aside on this ground
alone. The same are too material to ignore and are relevant in ultimately resolving the question of ownership of the subject
property. InMangahas v. Court of Appeals,52 we recognized the long line of jurisprudence that:ChanRoblesVirtualawlibrary
[I]t is always in the power of this Court to suspend its own rules, or to except a particular case from its operation, whenever the
purposes of justice require it. This Court is mindful of the policy of affording litigants the amplest opportunity for the
determination of their cases on the merits and of dispensing with technicalities whenever compelling reasons so warrant or
when the purpose of justice requires it. (Citations omitted.)
Indeed, the alleged defects in the notarization of the Deed of Absolute Sale dated September 11, 1970 between Kawilihan
Corporation and Therese Vargas and the Deed of Absolute Sale dated October 4, 1978 between Therese Vargas and Barbosa are
by no means trivial.

As the Court stressed in Vda. De Rosales v. Ramos53:ChanRoblesVirtualawlibrary

The importance attached to the act of notarization cannot be overemphasized. Notarization is not an empty, meaningless,
routinary act. It is invested with substantive public interest, such that only those who are qualified or authorized may act as
notaries public. Notarization converts a private document into a public document thus making that document admissible in
evidence without further proof of its authenticity. A notarial document is by law entitled to full faith and credit upon its face.
Courts, administrative agencies and the public at large must be able to rely upon the acknowledgment executed by a notary
public and appended to a private instrument.

xxxx

The notary public is further enjoined to record in his notarial registry the necessary information regarding the document or
instrument notarized and retain a copy of the document presented to him for acknowledgment and certification especially when
it is a contract. The notarial registry is a record of the notary public's official acts. Acknowledged documents and instruments
recorded in it are considered public document. If the document or instrument does not appear in the notarial records and there
is no copy of it therein, doubt is engendered that the document or instrument was not really notarized, so that it is not a public
document and cannot bolster any claim made based on this document. x x x. (Citations omitted.)
Furthermore, in Bitte v. Jonas,54 the Court had occasion to discuss the consequence of an improperly notarized deed of absolute
sale. Thus -
Article 1358 of the New Civil Code requires that the form of a contract transmitting or extinguishing real rights over immovable
property should be in a public document. x x x.

xxxx

Not having been properly and validly notarized, the deed of sale cannot be considered a public document. It is an accepted
rule, however, that the failure to observe the proper form does not render the transaction invalid. It has been settled that a sale
of real property, though not consigned in a public instrument or formal writing is, nevertheless, valid and binding among the
parties, for the time-honored rule is that even a verbal contract of sale or real estate produces legal effects between the parties.
Not being considered a public document, the deed is subject to the requirement of proof under Section 20, Rule 132, which
reads:ChanRoblesVirtualawlibrary
Section 20. Proof of private document. - Before any private document offered as authentic is received in evidence its due
execution and authenticity must be proved either:chanRoblesvirtualLawlibrary

(a) By anyone who saw the document executed or written; or

(b) By evidence of the genuineness of the signature or handwriting of the maker.

Any other private document need only be identified as that which it is claimed to be.
Accordingly, the party invoking the validity of the deed of absolute sale had the burden of proving its authenticity and due
execution. x x x. (Emphasis supplied; citations omitted.)
In the instant case, should the Deeds of Absolute Sale in favor of Therese Vargas and Barbosa, respectively, be found to be indeed
improperly notarized, the trial court would have erred in admitting the same in evidence without proof of their authenticity and
in relying on the presumption regarding the regularity of their execution. Barbosa would then have the additional burden of
proving the authenticity and due execution of both deeds before he can invoke their validity in establishing his claim of
ownership.

Therefore, IVQ should be allowed to formally offer in evidence the documents it belatedly submitted to this Court and that
Barbosa should equally be given all the opportunity to refute the same or to submit controverting evidence.

Given that the Court is not a trier of facts and there still are factual matters that need to be evaluated, the proper recourse is to
remand the case to the Court of Appeals for the conduct of further proceedings.

In Manotok IV v. Heirs of Homer L. Barque,55 the Court explained the propriety of resorting to the above procedure in this
wise:ChanRoblesVirtualawlibrary
At the same time, the Court recognizes that there is not yet any sufficient evidence for us to warrant the annulment of the
Manotok title. All that the record indicates thus far is evidence not yet refuted by clear and convincing proof that the Manotok's
claim to title is flawed. To arrive at an ultimate determination, the formal reception of evidence is in order. This Court is not a
trier of fact or otherwise structurally capacitated to receive and evaluate evidence de novo. However, the Court of Appeals is
sufficiently able to undertake such function.

The remand of cases pending with this Court to the Court of Appeals for reception of further evidence is not a novel idea. It has
been undertaken before - in Republic v. Court of Appeals and more recently in our 2007 Resolution in Manotok v. Court of
Appeals. Our following explanation in Manotok equally applies to this case:ChanRoblesVirtualawlibrary
Under Section 6 of Rule 46, which is applicable to original cases forcertiorari, the Court may, whenever necessary to resolve
factual issues, delegate the reception of the evidence on such issues to any of its members or to an appropriate court, agency or
office. The delegate need not be the body that rendered the assailed decision.

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

In fact, the Court had actually resorted to referring a factual matter pending before it to the Court of Appeals. In Republic v. Court
of Appeals, this Court commissioned the former Thirteenth Division of the Court of Appeals to hear and receive evidence on the
controversy, x x x. The Court of Appeals therein received the evidence of the parties and rendered a "Commissioner's Report"
shortly thereafter. Thus, resort to the Court of Appeals is not a deviant procedure.

The provisions of Rule 32 should also be considered as governing the grant of authority to the Court of Appeals to receive
evidence in the present case. Under Section 2, Rule 32 of the Rules of Court, a court may, motu proprio, direct a reference to a
commissioner when a question of fact, other than upon the pleadings, arises upon motion or otherwise, in any stage of a case, or
for carrying a judgment or order into effect. The order of reference can be limited exclusively to receive and report evidence only,
and the commissioner may likewise rule upon the admissibility of evidence. The commissioner is likewise mandated to submit a
report in writing to the court upon the matters submitted to him by the order of reference. InRepublic, the commissioner's report
formed the basis of the final adjudication by the Court on the matter. The same result can obtain herein. (Emphasis supplied;
citations omitted.)
Aside from receiving and evaluating evidence relating to the pieces of documentary evidence submitted by IVQ to this Court, the
Court of Appeals may likewise receive any other additional evidence that the parties herein may submit on their behalf.

The Court, in particular, deems it necessary for the parties to submit a certified true copy of TCT No. 71507 that is registered in
the name of Kawilihan Corporation, if possible. As previously discussed, neither of the parties submitted the same before the
trial court and no explanation was likewise offered for this omission. As TCT No. 71507 is ultimately the title from which the
certificates of title of Therese Vargas and Jorge Vargas III supposedly emanated, the same may indicate which of the two
subsequent titles cancelled it.

It would likewise be expedient for the parties to submit evidence as to the character of their possession of the subject property,
given that the trial court ruled that neither of them were able to prove their possession thereof.

The Court further reiterates its directive to the parties to submit information as to the results of the investigation of the Task
Force Titulong Malinis of the LRA regarding the authenticity ofTCT No. 159487 registered in the name of Therese Vargas and TCT
No. 223019 registered in the name of Jorge Vargas III.

After the conclusion of its proceedings, the Court of Appeals is directed to submit to this Court a detailed Report on its findings
and conclusions within three months from notice of this Resolution. Said report, along with all the additional evidence that will
be offered by the parties, shall be thoroughly considered in order to determine with finality the issue of ownership of the subject
property.

WHEREFORE, the case is REMANDED to the Court of Appeals for the purpose of hearing and receiving evidence, including but
not limited to, those specifically required by the Court in this Resolution. The Court of Appeals is directed to conclude the
proceedings and submit to this Court a Report on its findings and recommended conclusions within three (3) months from notice
of this Resolution. The Court of Appeals is further directed to raffle this case immediately upon receipt of this Resolution.

This Resolution is immediately executory.

SO ORDERED.chanroblesvirtuallawlibrary

March 11, 2015

G.R. No. 160728

CLT REALTY DEVELOPMENT CORPORATION, Petitioner,

vs.
PHIL-VILLE DEVELOPMENT AND HOUSING CORPORATION, REPUBLIC OF THE PHILIPPINES (through the OFFICE OF THE
SOLICITOR GENERAL), and the REGISTER OF DEEDS OF METRO MANILA DISTRICT III, CALOOCAN CITY, Respondents.

DECISION

LEONARDO-DE CASTRO, J.:

Once more, the Court has the opportunity to correct the errors in the Torrens system about the fake titles that were erroneously
issued covering the controversial Maysilo Estate. This case calls for a direct application of the Court En Bane's resolutions in
Manotok Realty, Inc. v. CLT Realty Development Corporation 1 as petitioner's title involved here was conclusively dealt with in
those cases.

This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Decision 2 dated
February 27, 2003 and the Resolution3 dated November 10, 2003 (the questioned Decision and Resolution) both issued by the
Court of Appeals in CA-G.R. CV No. 52606, which affirmed the Decision 4 dated March 15, 1996 of the Regional Trial Court (RTC),
Branch 122, Caloocan City, in Civil Case No. C-15045.

The questioned Decision and Resolution sustained the RTC Decision, which ruled in favor of respondent Phil-Ville Development
and Housing Corporation (respondent Phil-Ville) and against petitioner CLT Realty Development Corporation (petitioner), as
shown in the dispositive portion quoted below:

WHEREFORE, in view of all the foregoing premises, judgment is hereby rendered:

1.Declaring plaintiff Phil-Ville Development and Housing Corporation the true, absolute and legitimate owner of the
sixteen (16) parcels of land subject matter of this case located in Caloocan City registered in its name;

2.Declaring null and void defendant CLT’s Transfer Certificate of Title No. T-177013 and ordering defendant to surrender
said title to defendant Register of Deeds of Metro Manila District III;

3.Ordering the defendant Register of Deeds of Metro Manila District III to cancel the original title of TCT No. 177013 in
the name of CLT in the records of his office as well as the corresponding owner’s duplicate certificate;

4.Ordering defendant to pay plaintiff the sum of P50,000.00 as for attorney’s fees;

5.The Injunction issued by this Court in its Order dated August 28, 1992 is hereby dissolved permanently;

6.To pay the cost of this suit.5

FACTS

This case started with a Complaint6 for Quieting of Title, Damages and Injunction filed by respondent Phil-Ville against petitioner
and the Register of Deeds of Metro Manila District III on August 28, 1991 before the RTC of Caloocan City, Branch 122, docketed
as Civil Case No. 15045. Both corporations are domestic, duly organized and existing under and by virtue of the laws of the
Republic of the Philippines.

Respondent Phil-Ville claims that it is the registered owner and actual possessor of sixteen (16) parcels of land in Baesa, Caloocan
City, as shown in the following table7 :

Title No. Lot Description Exhibit

C-21568 Lot 25-A, (LRC) Psd-41914 "B"
C-24966 Lot 25-B-1, (LRC) Psd-42341 "C"
C-33124 Lot 25-B-2, (LRC) Psd-42341 "D"
C-21569 Lot 25-C, (LRC) Psd-41914 "E"
C-33418 Lot 25-D, (LRC) Psd-41914 "F"
C-21570 Lot 25-E, (LRC) Psd-41914 "G"
C-232569 Lot 26, (LRC) Pcs-1828 "H"
C-28076 Lot 27, (LRC) Pcs-1828 "I"
C-28077 Lot 28, (LRC) Pcs-1828 "J"
C-29114 Lot 31-A, (LRC) Psd-42343 "K"
C-27944 Lot 31-B, (LRC) Psd-42343 "L"
 C-156145 Lot 34-A-2, (LRC) Psd-306716 "M"
C-28075 Lot 34-B, (LRC) Psd-1234001 "N"
C-29113 Lot 57-A-1, (LRC) Psd-116549 "O"
C-35359 Lot 57-A-2, (LRC) Psd-116549 "P"
C-27943 Lot 57-B, Psd-75893 "Q"

Respondent Phil-Ville claimed that it had been in "actual, open, notorious, public, physical and continuous possession" of the 16
parcels of land "before 1980 up to [the] present."8 It fenced said parcels of land in 1980 and 1991.9

Respondent Phil-Ville presented a chart10 showing that the 16 parcels of land were derived from and were part of Lot 26, Maysilo
Estate originally covered by Original Certificate of Title (OCT) No. 994 issued on May 3, 1917.

Respondent Phil-Ville alleged that based on official records of the office of respondent Register of Deeds and the Land
Registration Authority, petitioner was issued Transfer Certificate of Title (TCT) No. T-177013, covering a parcel of land situated in
Caloocan City, particularly described as follows:

A parcel of land (Lot 26, Maysilo Estate, LRC Swo-5268), situated in the Mun. of Malabon, Caloocan City, Island of Luzon.
Bounded on the NW along lines 1 to 19 by the Tullajan River; on the NE., along lines 19 to 24 by Piedad Estate; on the SE., along
lines 24 to 37 by Lot 27 (LRC) SWO-5268; on the SW., along lines 37 to 46 and 46 to 1 by Lot 25-A (LRC) SWO 5268 x x x containing
an area of EIGHT HUNDRED NINETY[-]ONE THOUSAND FIVE HUNDRED FORTY[-]SEVEN AND FORTY-THREE (891,547.43) x x x. 11

Respondent Phil-Ville further claimed that an actual plotting of the relative position of Lot 26 as particularly described in
petitioner’s aforementioned TCT No. T-177013 in relation to the positions of all the lots covered by respondent Phil-Ville’s
transfer certificates of title, respectively, proved positively that said TCT No. T-177013 of petitioner overlaps respondent Phil-
Ville’s aforesaid parcels of land. Respondent Phil-Ville contended that petitioner’s TCT No. T-177013, although apparently valid or
effective, is in truth and in fact, invalid and ineffective, and unless declared as such by the court, will inevitably prejudice
respondent Phil-Ville’s title over its 16 parcels of land, as said title of petitioner is a potential cause of litigations between
respondent Phil-Ville and petitioner, as in the present suit, as well as suit/s involving respondent Phil-Ville and transferee/s of
petitioner of the entire and/or a portion of Lot 26 in question. 12

The other allegations of respondent Phil-Ville as contained in its Complaint to support its action to quiet title were succinctly
summarized by the Court of Appeals and are quoted below:

[A]n examination of the annotations under the Memorandum of Encumbrances of Original Certificate of Title No. 994, earlier
mentioned as the mother title of TCT No. 177013, reveals that on September 9, 1918, TCT No. 4210 was issued in favor of
Alejandro Ruiz and Mariano P. Leuterio, cancelling OCT No. 994, Lot 26, over an area of 3,052.93 square meters and another area
of 16,512.50 square meters by virtue of a Deed of Sale executed on August 21, 1918; another inscription stated that TCT No.
4211 Lot 26 with an area of 871,982 square meters was issued on September 9, 1918, totally cancelling OCT No. 994 with regard
to Lot 26 by virtue of a sale on August 21, 1918 also in favor of Alejandro Ruiz and Mariano P. Leuterio; said sales were executed
by Commissioners Don Tomas Arguelles and Don Enrique Llopia, duly appointed by the then Court of First Instance of Rizal in CC-
391 and the sale was approved by the court; if the aforementioned sales were added together, TCT No. 4210 consisting of
3,052.93 square meters and 16,512.50 square meters when added to the 871,547 square meters of TCT No. 4211 amount to
891,547 square meters, which is equivalent to the total area of Lot No. 26, as appearing on the face of OCT No. 994; TCT No.
4211 covering Lot 26 with an area of 871,982 (LRC) Pcs-1828 in the names of Alejandro Ruiz and Mariano P. Leuterio, was
cancelled by TCT No. 5261 in the name of Francisco J. Gonzales, who purchased the property from Alejandro Ruiz and Mariano P.
Leuterio; when Francisco J. Gonzales died, the property was transferred to his six (6) children in undivided shares under TCT No.
35486, who partitioned among themselves the same property and seven TCTs were issued to them; the Republic of the
Philippines expropriated the lands of the Gonzales and as a consequence the titles of the Gonzales were cancelled and in lieu
thereof seven (7) new TCTs were issued in the name of the Republic of the Philippines; thereafter, the Republic of the Philippines
through the National Housing Authority (NHA) consolidated and subdivided into 77 lots to the 8 vendees of NHA; [respondent
Phil- Ville] subsequently acquired the 8 lots through sale and deeds of exchange and had the lots titled in its name; Estelita
Hipolito, Jose B. Dimson and [petitioner] CLT were not among the vendees of NHA or of the latter’s vendees/transferees covering
the disposition of the aforementioned expropriated lands; a further examination of TCT No. 177013 of [petitioner] CLT revealed
that said title was a transfer from TCT No. R- 17994 in the name of Estelita I. Hipolito and said TCT No. R-17994 was a transfer
from TCT No. 15166 in the name of Jose B. Dimson married to Rueta Rodriguez Dimson and TCT No. 15166 originated from OCT
No. 994 in the name of Isabel Gil de Gola as judicial administratrix of the estate of Gonzalo Tuazon and 31 others; the
annotations in the aforementioned titles of Estelita Hipolito and Jose B. Dimson showed that Estelita Hipolito acquired Lot 26 by
virtue of an Order of Court dated October 18, 1977, approving a compromise agreement which admitted that the sale was made
by Jose B. Dimson in her favor on September 2, 1976; Jose B. Dimson acquired the lot by virtue of the Court Order dated June 13,
1966 awarding to him as attorney’s fees 25% of whatever remained under Lot 25-A, 26, 27, 28 and 29 undisposed of the intestate
estate of decedent Concepcion Vidal, one of the registered owners of properties covered by OCT No. 994; x x x Lot 26 was totally
disposed of on September 9, 1918 and August 21, 1918 in favor of Alejandro Ruiz and Mariano P. Leuterio, predecessors-in-
interest of [respondent], hence, at the time of the issuance of the Order of Court dated June 13, 1966, granting to Jose B. Dimson
as part of his attorney’s fees the undisposed portion of Lot 26, among others, nothing more was left of said Lot 26 which could
be further awarded to or conveyed to Jose B. Dimson as attorney’s fees; consequently, nothing at all was left for Jose B. Dimson
to convey to Estelita Hipolito; by necessary consequence, nothing more of said Lot 26 could be conveyed by Estelita Hipolito to
[petitioner] CLT, thus, rendering TCT No. T-177013 void and ineffective x x x; at the time of [petitioner] CLT’s acquisition of Lot 26,
and in the subsequently acquired title of [petitioner] CLT, an annotation appeared on the TCTs which reads:

"(P)ursuant to Ministry Opinion No. 239 dated November 4, 1982, Notice is hereby given that this titles (sic) is subject to the
verification by the LRC Verification Committee on questionable titles, plan, decrees and other documents"; [petitioner] CLT was
not only effectively forewarned of the questionable character of its predecessors-in-interests’ title on Lot 26, but must and
should had also known of [respondent Phil-Ville’s] ownership of the disputed land because the latter had been in actual
possession thereof then and up to now x x x.13 (Emphasis supplied.)

On the other hand, petitioner’s allegations contained in its Answer (With Petition for Issuance of Writ of Preliminary
Injunction14 were likewise summarized by the Court of Appeals as follows:

[Petitioner CLT] is the registered owner of a parcel of land known as Lot 26 of the Maysilo Estate as evidenced by a valid and
regular title and devoid of any infirmity, TCT No. 177013 of the Registry of Deeds of Caloocan City; it acquired said real property
on December 10, 1988 from Estelita I. Hipolito, the legal registered owner of said property, by virtue of a Deed of Absolute Sale
with Real Estate Mortgage; Estelita I. Hipolito, in turn, acquired Lot No. 26 of the Maysilo Estate from Jose B. Dimson, also a
previous holder of Torrens title, TCT No. 15166, by virtue of a Deed of Sale dated September 2, 1976; Jose B. Dimson, on the
other hand, acquired title over Lot No. 26 of the Maysilo Estate by virtue of a Court Order dated June 13, 1966 issued by the then
Court of First Instance of Rizal in Civil Case No. 4557 concerning the rights and interest of the heirs of Maria de la Concepcion
Vidal over certain parcels of land covered by OCT No. 994, including Lot No. 26 of the Maysilo Estate; at the time TCT No. 15166
was issued in favor of Jose B. Dimson, the parcels of land covered by OCT No. 994 were not totally disposed of, more particularly
Lot No. 26; insofar as Lot 26 was concerned, OCT No. 994 was not yet cancelled; in view thereof, the Register of Deeds partially
cancelled OCT No. 994 and issued a Torrens Title, TCT No. 15166, in favor of Jose B. Dimson; contrary to [respondent Phil-Ville’s]
allegations, it was not occupying its own properties but portions of the property of [petitioner] CLT Realty covered by TCT No. T-
177013 of the Registry of Deeds of Caloocan City; contrary to [respondent Phil-Ville’s] allegations, its titles to the aforementioned
16 parcels of land, are the ones which are null and void; [petitioner] CLT Realty’s examination of the available records revealed
that TCT No. 4211, the alleged title from which [respondent Phil- Ville’s] titles originated, was clearly forged and spurious; the
same is true with TCT Nos. 5461, 35486 and the succeeding derivative titles; records of the alleged deeds of sale in favor of
Alejandro Ruiz and Mariano P. Leuterio and the purported court order approving the same cannot be located; on the face of TCT
Nos. 4211, 5261 and 35486, there are patent infirmities, inconsistencies and irregularities which pointed to the inescapable
conclusion that said titles were falsified and could not have originated from OCT No. 994; the technical descriptions of Lot 26 in
OCT No. 994 are already in English, however, the technical descriptions in TCT Nos. 4211, 5261 and 35486 are in Spanish; the
subdivision survey is also missing; there is nothing left on the face of TCT No. 4211 which shows that it covers Lot 26 of the
Maysilo Estate; the original survey dates indicated in OCT No 994 are different from those found in TCT Nos. 4211, 5261 and
35486; [petitioner] CLT Realty’s examination of OCT No. 994 at the Office of the Register of Deeds (Metro Manila–District III)
showed that there is no annotation with respect to the issuance of TCT No. 4211, the alleged deeds of sale in favor of Alejandro
Ruiz and Mariano P. Leuterio and the purported court order approving said sales; Psd-21154, which appeared in TCT Nos. 1368 to
1374, is obviously fictitious; the records of the Land Management Section (Department of Environment and Natural Resources)
did not contain said plan; the land expropriated by the Government in G.R. No. L-4918 did not refer to Lot 26 of the Maysilo
Estate; [petitioner] CLT Realty was still pursuing its investigation and certain that in the near future, it will uncover other pieces of
evidence showing [respondent Phil-Ville’s] titles and the alleged titles from which their titles originated were fictitious, void and
ineffective.15

To "resolve all the issues in this case intelligently," the RTC of Caloocan City, Branch 122 issued the following Order dated August
28, 1992 in Civil Case No. 15045:

Submitted for resolution before this Court are the applications for issuance of a writ of preliminary injunction of the plaintiff Phil-
Ville Development and Housing Corporation Incorporated in its Complaint dated August 26, 1991, and that of the defendant CLT
Realty Development Corporation Incorporated in its Answer dated January 9, 1992.

Plaintiff is claiming ownership of the subject properties by virtue of the following Transfer Certificates of Title:
 DATE
NO. LOT DESCRIPTION AREA
REGISTERED
C-21568 Lot 25-A 497 sq.m. 2-27-79
C-24966 Lot 25-B-1 1,000 sq.m. 6-21-79
C-33124 Lot 25-B-2 1,100 sq.m. 3-21-80
C-21569 Lot 25 C 2,000 sq.m. 2-27-79
C-33418 Lot 25 D 2,000 sq.m. 3-27-80
C-21570 Lot 25 E 22,000 sq.m. 3-5-79
C-232569 Lot 26 22,760 sq.m. 5-9-91
C-28076 Lot 27 20,204 sq.m. 9-12-79
C-28077 Lot 28 21,179 sq.m. 9-12-79
C-29114 Lot 31-A 6,127 sq. m. 10-22-79
C-27944 Lot 31-B 6,120 sq.m. 9-26-79
C-156145 Lot 34-A-2 4,000 sq.m. 10-9-87
C-28075 Lot 34-B 18,965 sq.m. 9-12-79
C-29113 Lot 57-A-1 2,000 sq.m. 10-22-79
C-35369 Lot 57-A-2 1,298.5 sq.m. 6-3-80
C-27943 Lot 57-B 3,290.5 sq.m. 9-26-79

whereas defendant CLT is equally claiming right over the said subject properties by virtue of Transfer Certificate of Title No. T-
177013.

Considering that both parties are claiming title to the subject properties, in order that the rights and interest of the parties and
the public in general could be fully protected and safeguarded, and in order that this Court could resolve all the issues in this case
intelligently, leaving no stone unturned, both parties, plaintiff Phil-Ville Development and Housing Corporation and defendant
CLT Realty Development Corporation, and their respective officers, employees, agents, or representative or any person acting for
and in their respective behalf, are hereby enjoined from selling, disposing, leasing, encumbering, or otherwise conveying the
subject properties or any portion thereof, covered by their alleged respective titles, until this Court shall have resolved the main
case.16(Emphases supplied.)

Petitioner filed a Motion to Subject Questioned Documents to Scientific or Expert Examination by the National Bureau of
Investigation17 (NBI), with reference to TCT Nos. 4210 and 4211 in the names of Alejandro Ruiz and Mariano P. Leuterio, which
were in the custody of the Register of Deeds of Caloocan City; Escritura de Venta executed by Don Tomas Arguelles and Don
Enrique Llopia on August 21, 1918, which was in the custody of the Register of Deeds of Pasig City; Exhibits "B," "D" and "F" in
CFI Case No. 391; and Mocion in CFI Case No. 391, which were in the custody of the Register of Deeds of Pasig City. 18

Respondent Phil-Ville in turn caused the examination by the Philippine National Police (PNP) Crime Laboratory Service of the
documents and presented the testimony of Mr. Zacarias Tibol, an expert witness from the PNP Crime Laboratory Service. 19

The NBI Questioned Document Report No. 700-1192 dated March 9, 1993 20 contained the following with reference to TCT Nos.
4210 and 4211:

F I N D I N G S:

Laboratory analysis and comparative examination of the specimens submitted under magnification and with the aid of
photographic enlargements reveal the following:

1.That the signatures "L. GARDOÑO", Register of Deeds, appearing in both the questioned and the standard
Transfer Certificates of Title exhibit the presence of sufficient number of agreeing significant personal writing
 individualities and the absence of basic differences, hence, the signatures L. GARDOÑO, Register of Deeds,
were written by one and the same person.

2.That fundamental similarities in handwriting habits and identifying details of letters/elements exist between
the handwritten entries appearing in the questioned and the standard Transfer Certificates of Title, indicative
of common authorship of the aforementioned handwritten entries.

3.That significant similarities in printing characteristics such as, letter-design, size, printing lay-out and other
minute identifying details exist between the printed entries, including the presence of the commonwealth seal
watermarks, appearing in the questioned and the standard Transfer Certificates of Title, hence the questioned
and the standard TCT were prepared from one source.

C O N C L U S I O N:

The questioned Transfer Certificates of Title Nos. 4210 and 4211 are genuine.

NBI’s Chemistry Report No. C-93-272 dated May 7, 1993 21 on the same documents revealed that:

PURPOSE OF THE LABORATORY EXMINATION:

To determine the age of ink and paper.

FINDINGS:

Examinations conducted on the above-mentioned specimens showed that the handwritten entries were written in black liquid
pen ink, its iron component had oxidized.

Further examinations showed the presence of watermarks, brown spots and discoloration of the paper.

REMARKS: The above-mentioned specimens could be more or less fifty (50) years old.

FINDINGS OF THE LOWER COURT

In its Decision dated March 15, 1996 in Civil Case No. C-15045, the RTC traced the history of respondent Phil-Ville’s 16 parcels of
land, and we quote the relevant portions of the said Decision below:

1.Lot 26 of OCT 994, the original title of the Maysilo Estate;

2.TCT Nos. 4210 and 4211 issued to Alejandro Ruiz and Mariano P. Leuterio, who bought Lot 26 from the owners of the
Maysilo Estate;

3.TCT No. 5261 in the name of Francisco Gonzales, who acquired the land covered by TCT No. 4211 from the co- owners
Alejandro Ruiz and Mariano P. Leuterio;

4.TCT No. 35486 issued to the heirs of Francisco J. Gonzales after the latter’s death and which cancelled their father’s
TCT No. 5261;

5.TCT Nos. 1368-1374 seven (7) titles issued to the Gonzales children after they partitioned the land covered by their
TCT No. 35486;

6.TCT Nos. 12836 to 12842 also seven (7) titles issued to the Republic of the Philippines after the government
expropriated the Gonzales Estate [i.e., the seven (7) lots titled in the name of the Gonzales children under TCT Nos.
1368-1374];

7.TCT No. T-6097 [etc.], issued to the buyers of the sixteen (16) lots in question from the Republic of the Philippines;

8.TCT No. C-21568 [etc.], in the name of the plaintiff Phil-Ville over the sixteen (16) lots here in question, which
cancelled the title of the buyers of said lots from the Government. 22
The RTC concluded that "the land covered by the foregoing series of titles is none other than Lot 26 of the Maysilo Estate," and
declared that this was "sufficiently and satisfactorily established by the following comments and evidences" 23 :

1.When Lot 26 was subdivided into three (3) parcels by agrimensor Fernando on December 22, 1917, he clearly referred
to the subdivided lot as "Lot 26 de la Hacienda de Maysilo Psd-2345 (Exh. "DD");

2.The Escritura de Venta dated August 21, 1918 (Exh. "CC"), executed by the Commissioner appointed by the CFI of Rizal
(to partition and sell the Maysilo Estate to the different claimant) in favor of Alejandro Ruiz and Mariano P. Leuterio
expressly mentioned Lot 26 of Plan Psd-2345 as the subject matter of said sale;

3.Engineer Juanito Bustalino, defendants’ witness, confirmed that the technical description of Lot 26 as appearing in
Decree No. 36455 (Exh. "ZZZZ" as basis of OCT 994 x x x;

4.Entry AP 666S/0-994 inscribed by Register of Deeds L. Gardonio in Memorandum of Encumbrances of OCT 994 on
September 9, 1918 states, that Lot 26 was subdivided into three (3) portions which were sold to Alejandro Ruiz and
Mariano P. Leuterio, who were issued TCT No. 4210 over the portions with areas of 3,053.93 sq. mts. and 16,512.50 sq.
mts., respectively, and TCT No. 4211 over the portion with an area of 871,982 sq. mts.;

5.TCT No. 4211 of the co-owners Alejandro Ruiz and Mariano P. Leuterio was cancelled by TCT No. 5261 in the name of
Francisco Gonzales who bought the property covered by said title from them. When TCT No. 35486 was issued to the
heirs later subdivided the land covered by their TCT No. 35486 into seven (7) lots and seven (7) titles, the Register of
Deeds placed the following annotation on November 21, 1946 at the back of their former title TCT No. 35486;

"Entry No. 3731/T-1368 – Subdivision of the land described in this certificate of title into seven (7) lots in accordance
with subdivision plan Psd-21154 duly approved by the Director of lands together with technical description."

Subdivision Plan Psd-21154 is the survey plan that partitioned the land originally registered in the name of Francisco J.
Gonzales, who bought the second portion of Lot 26 of the Maysilo Estate registered in the name of Alejandro Ruiz and
Mariano P. Leuterio under TCT No. 4211;

6.After the partition of the land covered by their TCT No. 35486 in the name of the Gonzales children into seven (7)
parcels, resulting in the issuance to them of seven (7) separate titles TCT Nos. 1368-1374 (Exhs. "GG-2" – "GG-8"), the
Republic of the Philippines filed Civil Case No. 131 in the CFI of Rizal to expropriate said seven (7) parcels from the
Gonzales children (called Gonzales Estate) and notice of the filing of said expropriation case was annotated in TCT Nos.
1368-1374 of the Gonzales children on March 6, 1947 as "Entry No. 6385-A-Lis Pendens" (Exhs. "GG-2" – "GG-8"). The
decision of the Supreme Court in the same expropriation case (G.R. No. L-4918) in favor of the Republic was likewise
annotated by the Register of Deeds on said titles on November 2, 1954 as "Entry No. 766/T-No. 36557";

7.The decision of the Supreme Court in G.R. No. L-4918 dated May 14, 1954 (94 Phil. 956) expressly states that the
subject matter of the Government’s expropriation case against the Gonzales Estate is – "situated within the Maysilo
Estate, Caloocan and originally covered by Transfer Certificate of Title No. 35486 x xx now represented by seven (7)
transfer certificates of title, numbered and owned respectively: 1373 by Jose Leon Gonzales; 1368 by Juan F. Gonzales;
1369 by Maria C. Gonzales-Hilario; 1372 by Concepcion A. Gonzales-Virata; 1370 by Consuelo Gonzales Precilla; 1371 by
Francisco Felipe Gonzales; and 1374 by Hose Gonzales, et al."

8.In another case also involving the same parcel of land acquired by the Republic of the Philippines from the Gonzales
family (Baylon vs. PHHC, et. al., G.R. No. 45330-R, February 7, 1973), the High Court again described the Gonzales Estate
as "having an area of 871,982 sq. mts. and originally covered by TCT No. 35486" and "by Transfer Certificates of Title No.
1368, 1369, 1370, 1371, 1372, 1373 and 1374" of the Gonzales Estate;

9.When the Gonzales’ filed a case for reversion of the properties expropriated from them by the Government, the Court
of Appeals in CA-G.R. CV-69786, May 31, 1991, held that the Gonzales’ were absolutely divested of the ownership of
their land after they were paid just compensation for their land and titles passed on to the Republic;

10.The sixteen (16) parcels of land here in question and titles in the name of plaintiff under TCT Nos. 21548, et al. (Exhs.
"B" – "Q") were purchased by Phil-Ville from the tenants-occupants (Exhs. "HH-1" – "HH-7") who on their part bought
from the PHHC or their successors–in- interests (Exhs. "OO" – "AAAA", so that all the titles of the plaintiff over said
sixteen (16) parcels of land are derivatives of the titles of the Republic of the Philippines;

11.That the titles of plaintiff Phil-Ville and the title of defendant CLT overlaps each other as per plans and testimonies
presented to the Court (Exhs. "61 and "S").
Therefore, there is absolutely no question that the sixteen (16) titles of plaintiff over the sixteen (16) parcels of land subject of
this case involves the same lands earlier expropriated by the Government from the Gonzales Estate. 24 (Emphasis added.)

RULING OF THE RTC

The RTC held that there was no doubt that the lots registered in respondent Phil-Ville’s 16 titles subject-matter of this case are
clearly located within the large area or Lot 26 of the Maysilo Estate, supposedly covered by petitioner’s TCT No. T-177013. Thus,
the titles overlapped, and this fact was not seriously disputed by petitioner. 25

As shown in the dispositive portion of the RTC Decision quoted above, the RTC declared respondent Phil-Ville as "the true,
absolute and legitimate owner of the sixteen (16) parcels of land subject matter of this case located in Caloocan City registered in
its name;" declared as null and void petitioner’s TCT No. T-177013; ordered petitioner to surrender said title to respondent
Register of Deeds of Metro Manila District III and respondent Register of Deeds to cancel the original title of TCT No. T- 177013 in
the name of petitioner CLT in the records of his office as well as the corresponding owner’s duplicate certificate; dissolved the
injunction issued in its Order dated August 28, 1992; and awarded attorney’s fees and costs. 26

We quote the detailed findings and conclusions made by the RTC, Branch 122 in its Decision dated March 15, 1996 in Civil Case
No. C- 15045, as follows:

For the survey plan of the land allegedly covered by its TCT No. 177013 prepared by Geodetic Engineer Juanito B. Bustalino on
February 17 – March 31, 1992, presented by it as its Exhibit "61" in this case, shows the relative locations and positions of the
sixteen (16) lots registered in the name of plaintiff (under its TCT No. C-21568, et al.) in the much bigger area supposedly covered
by defendant’s TCT No. 177013. The main task of the Court in this case, is to determine which of the competing and overlapping
titles of the parties are the lots in question [sixteen (16) lots subject of the complaint] are valid and genuine.

When defendant purchased or acquired the land supposedly covered by its title TCT No. 177013 on December 10, 1988, from its
predecessor Estelita Hipolito in whose name said land was previously registered under TCT No. R-17994, the latter title of
Hipolito was subject to the following notice annotated at the back thereof:

"Pursuant to Ministry Opinion No. 239 dated November 4, 1982. Notice is hereby given that this title is subject to the verification
by the LRC Verification Committee on questionable titles, plans, decrees and other documents."

The above notice or warning in Hipolito’s title should have put defendant on its guard when it acquired her alleged interests
under her TCT No. R-17994 on December 10, 1988, and must have spurred it to investigate the basis of the above-quoted notice
or warning in Hipolito’s title.

x x x Estelita Hipolito acquired the land supposedly covered by her TCT No. R-17994 by virtue of a Court Order dated October 18,
1977 (Exh. "RRRR-10") approving the Compromise Agreement between her and Atty. Jose B. Dimson, wherein the latter
transferred to Hipolito on September 2, 1976 Lot 26 of the Maysilo Estate, supposedly covered by his TCT No. R-15166, which
property in turn appears to have been acquired by Dimson by virtue of a Court Order dated June 13, 1966 (Exh. "RRRR-11"),
awarding to him as his attorney’s fees whatever remained undisposed of in Lots 25-A, 26, 27, 28 and 29 of the Maysilo Estate of
Maria De La Concepcion Vidal. Thus, the acquisition by Atty. Dimson of the interests of the late Maria De La Concepcion Vidal in
Lot 26 and other lots of the Maysilo Estate was subject to the condition, that something remained of said lot in the intestate
estate of said deceased that have not been disposed of. The acquisition of the same Lot 26 by Estelita Hipolito from Dimson
under her TCT No. R-17994, as well as the subsequent acquisition of the same lot by defendant CLT from Hipolito under its TCT
No. T-177013, were both likewise subject to the condition, that something or some portion of Lot 26 of the Maysilo Estate
belonging to former co-owner Maria De La Concepcion Vidal remained undisposed of.

x x x [W]hen Estelita Hipolito presented her Subdivision Plan

(LRC) Psd-288152, to which her TCT No. R-17994 was based to the Land Registration Authority (LRA) for approval on May 21,
1979, said plan was disapproved by the Chief of the Division of Registered Lands, for the reason that it "appears to be entirely
inside (LRC) Pcs- 1828; (LRC) Psd-5079; (LRC) Psd-50580 and (LRC) Psd-15345" (Exh. "RRRR-3"). And when the LRC appointed a
seven (7) man Committee, headed by its then Deputy Commissioner Paz Lahoz-Argel to verify the correctness of said action of
the Chief of its Division of Registered Lands and the validity of Estelita Hipolito’s TCT No. R-17994, the Committee unanimously
confirmed the disapproval by its aforesaid official of Hipolito’s Plan (LRC) Psd-288152 and recommended the annulment of her
TCT No. R-17994 on the ground that Hipolito’s title "is a duplication of TCT No. 4210 and TCT No. 4211 issued as early as
September 5, 1918 in favor of Alejandro Ruiz and Mariano P. Leuterio, TCT No. 4210 being what corresponds to (LRC) Psd-5079
and (LRC) Psd-5080, and the TCT being what was expropriated by the government, subdivided and consolidated into
seventy[-]seven (77) lots and sold through the National Housing Authority to occupant thereon under (LRC) Pcs-1828 in the
name of the Republic of the Philippines" (Exhs. "RRRR", "RRRR-1" to "RRRR-27").
It is obvious then, that both Estelita Hipolito and defendant CLT were not innocent transferees of whatever interest Atty. Jose R.
Dimson had in Lot 26 of the Maysilo Estate under his TCT No. 15166, because they both took said title of Dimson on condition -
that there remained undisposed portions of Lot 26 in the intestate estate of the former owner Maria De La Concepcion Vidal,
also on condition, as annotated at the back of Hipolito’s title TCT No. R-17994, that said title was "subject to verification by the
LRC Verification Committee on questionable titles, plans, decrees and other documents". Finally, subject indeed to the findings of
the Verification Committee of the LRC, that "nothing more was left for the heirs of Maria De La Concepcion Vidal to convey to
Jose R. Dimson as his attorney’s fees, and consequently, nothing at all was left for Jose R. Dimson to convey to Estelita Hipolito"
(Exhs. "RRRR", "RRRR-1" to "RRRR-27").

In short, Estelita Hipolito’s TCT No. R-17994 is null and void as no land had been registered thereunder, and defendant CLT’s TCT
No. T-177013 which was derived from Hipolito’s TCT No. R-17994 is similarly null and void for the same reason.

xxxx

To repeat, plaintiff traces its titles to the sixteen (16) lots as far back as TCT No. 4211, issued by the Register of Deeds of Pasig,
Rizal on September 9, 1918, to Alejandro Ruiz and Mariano P. Leuterio (Exh. "X"), which together with TCT No. 4210 issued to the
same parties, covered Lot 26 of the Maysilo Estate. These two (2) titles, which are now seventy[-]seven (77) years old, had been
issued to co-owners Ruiz and Leuterio by virtue of the Escritura de Venta executed in their favor by Don Tomas Arguelles and Don
Enrique Llopis on August 21, 1918 before Notary Public Vicente Foz under the authority given to them by the Court in CFI Case
No. 391 (Exh. "CC"), the two gentlemen Arguelles and Llopis having been appointed by the Court as commissioners to partition
the vast Maysilo Estate among the co-owners and/or sell parts thereof to the claimants. x x x.

Now it is beyond question, that the subject-matter of the aforesaid Escritura de Venta is Lot 26 of Hacienda Maysilo or the
Maysilo Estate, since Lot 26 is so mentioned in the Deed of Sale as the subject-matter thereof. The same document of sale shows
that for the purpose of said sale, each of which was specifically and technically described therein, namely: the "Primera Porcion"
with an area of 3,052.93 sq. mts.; the "Segunda Porcion" with an area of 871,982 sq. mts.; and the "Tercera Portion" with an area
of 16,512.50 sq. mts., all of which areas, when added together have a total area of 891,547.43 sq. mts., the exact area of Lot 26
appearing in OCT 994 of the entire Maysilo Estate (Exhs. "V" or "13" and in the corresponding Decree No. 36455, copy of which is
still in the custody of the LRA (Exh. "ZZZZ"). The technical description of the three (3) subdivided portions of Lot 26 as appearing
in said Escritura de Venta were determined in the subdivision undertaken by Agrimensor Fernando on December 22, 1917 (Exhs.
"DD" and "DD-1"); and when a Motion was submitted to the Court for the approval of said Escritura de Venta on January 23,
1918, it was approved on the same day by Judge W.E. Macmahan (Exh. "EE"). This is in compliance with Section 44 of Act 496.
The Land Registration Act enacted on November 6, 1902 which states:

"Sec.44. A registered owner holding one duplicate certificate for several distinct parcels of land may surrender it, with the
approval of the [c]ourt, and take out several certificates for portions thereof. So a registered owner holding separate certificates
for several distinct parcels may surrender them, and, with like approval, take out a single duplicate certificate title for the whole
land, or several certificates for the different portions thereof. Any owner subdividing a tract of registered land into lots shall file
with the clerk a plan of such land, when applying for a new certificate or certificates, and the [c]ourt, before issuing the same,
shall cause the plan to be verified and require that all boundaries, streets, and passageways shall be distinctly and accurately
delineated thereon."

It is clear then that no approval of the Bureau of Land is required. The Court approval of said sale thus resulted in the issuance to
the two buyers Alejandro Ruiz and Mariano P. Leuterio of TCT Nos. 4210 and 4211, the first with respect to the first and third
portions of Lot 26 containing an area of 3,053.93 sq. mts., and 16,512.50 sq. mts., respectively (Exh. "W"), and the second with
respect to the second portion of Lot 26 containing an area of 871,982 sq. mts. (Exh. "X"), all of which areas, when added
together, total 891,547.33 sq. mts., which, as mentioned earlier, is the exact area of Lot 26 appearing in OCT 994 and Decrees No.
36455. In fact, the Memorandum of Encumbrances at the back of OCT 994, the Register of Deeds of Pasig, Rizal, L. Gardonio,
made two entries both numbered 6665/0-994 noting that the Deed of Sale of the three (3) portions of Lot 26 to the buyers
Alejandro Ruiz and Mariano P. Leuterio was inscribed by him on September 9, 1918 at 10:50 A.M. resulting in the issuance to
them of TCT No. 4210 with respect to the first and third portions and TCT No. 4211 with respect to the second portion (Exh. "V-
15-A").

As for the authenticity of the signatures of Register of Deeds Gardonio on both titles TCT Nos. 4210 and 4211, they were found
to be genuine and authentic both by the NBI experts who examined them upon order of this Court (Exhs. "WWWW", "WWWW-
1" to "WWWW-27") and by the PNP Crime Laboratory whom plaintiff also asked to examine said signatures to determine their
genuineness (Exhs. "VVVV", "VVVV- 1" to "VVVV-8"). x x x.

All in all, the Court finds it very clear and entertains no doubt that TCT Nos. 4210 and 4211 issued to the buyers Alejandro Ruiz
and Mariano P. Leuterio covering the three (3) subdivisions of Lot 26 of the Maysilo Estate completely and totally cancelled OCT
994 with respect to said lot, as found by the LRC in its Verification Committee Report on July 21, 1980 (Exhs. "RRRR", "RRRR-1" to
"RRRR-27) with the result that when Atty. Jose B. Dimson sold to Estelita Hipolito Lot 26 which is supposedly covered by his TCT
No. R-15166, the latter did not acquire anything anymore from him, as said lot had been wholly and completely disposed of in
favor of the buyers Ruiz and Leuterio as early as 1918 and long before Dimson acquired his supposed title over the same and
when Estelita Hipolito in turn sold to herein defendant CLT the land supposedly covered by her title TCT No. R-17994, defendant
also did not acquire anything from Hipolito. In short, both Hipolito’s and CLT’s titles are null and void for lack of a subject matter
allegedly registered therein.27 (Emphases supplied.)

Aggrieved, petitioner appealed the RTC Decision that nullified its title and the Court of Appeals docketed it as CA-G.R. CV No.
52606.

On February 10, 1999, the Republic of the Philippines, acting through the administrator of the Land Registration Authority, filed
with the Court of Appeals a Motion for Intervention and Petition-in-Intervention, which the Court of Appeals granted over
petitioner’s opposition.

DECISION OF THE COURT OF APPEALS IN CA-G.R. CV NO. 52606

The Court of Appeals rendered its questioned Decision on February 27, 2003, which affirmed the factual findings of the RTC. In
addition, the Court of Appeals made the following observations:

It is not surprising that in this case, the lower court did not discuss the validity or invalidity of the testimony or findings of the
witnesses presented by both parties. There were plethora of facts and reasons which led to the inescapable conclusion regarding
the questioned documents’ validity, genuineness and authenticity.

The NBI’s scientific examination and the PNP’s handwriting analysis were not meant to contradict each other since they involve
varying techniques and methods peculiar to each examination. The former aims to establish the age of the ink and paper while
the latter aims to establish the genuineness and authenticity of the signatures on the questioned documents. Both NBI and PNP
findings should complement each other rather than collide. It is not a test of which is more scientific, advance or sophisticated,
otherwise, one test which is less scientific would no longer be used. At a glance, there seems to be an apparent discrepancy in
the test results. The NBI expert’s admission that its estimation of the age of the ink and strokes had an allowance of plus 5 and 10
years due to the oxidation reaction, clearly contradicted [petitioner’s] claim that the method used by the NBI is an exact science.
Moreso, the exactness of the science theory, self-destructed when the same NBI expert witness admitted that there is a
possibility that the questioned document could be 70 years of age.

xxxx

This Court believes that the mere fact that TCT Nos. 4211, 5261 and 35486 were written differently, i.e., Spanish supposedly
instead of English from the mother title which is written in English, is not enough reason to declare the same invalid. The fact
that [respondent Phil-Ville] was able to present other certificates of title written in Spanish during or about the time the
questioned titles were issued, belied [petitioner’s] speculation that it was not the "practice" then. The lower court correctly
observed that the translation of the technical description in a mother title, i.e., from Spanish to English in the subsequent
transfer certificate of title, did not violate any rule or guidelines of the administrative agency concerned. In fact, Memorandum of
Encumbrances on OCT No. 994 which dates back in December 1917 to October 23, 1939 were all written in Spanish, despite the
fact that OCT No. 994 is already in English. This only shows that it was the practice at that time to use either English or Spanish in
official transactions, depending upon the person’s facility with the use of a specific language.

xxxx

This Court finds the explanation of [respondent Phil-Ville] regarding the alleged non-inclusion of the original survey in TCT Nos.
4210 and 4211 and different date of survey found in the same titles as against the mother title, satisfactory and with factual basis
x x x.

xxxx

It is enough that the technical description of the land in the transfer certificate is exactly identical and do not exceed the area
and technical description contained in the mother title. It may be a mistake or omission on the part of the official who issued TCT
Nos. 4210 and 4211, but the same is not fatal.

xxxx
[Petitioner’s] conclusion that the subdivision of Lot 26 was not duly approved by the Bureau of Lands, is sufficiently countered by
[respondent Phil-Ville]. Exhibit "QQQQQ", a Certification issued by Engr. Privadi J.G. Dalire, Chief, Geodetic Surveys Divisions,
lands Management Bureau, stated that:

"TO WHOM IT MAY CONCERN:

This is to certify that according to the Records of Psd-Surveys approved by this Bureau, page 169 thereof, Psd-21154 is a
subdivision of a titled lot located in Caloocan, Rizal as surveyed for J.L. Gonzales y Narciso and approved on November 04, 1946.
The original copy however is found missing in the files of this Bureau. A tracing cloth approved by the Director of Lands was
issued to the landowners for submission to the Land Registration Authority (formerly LRC) for use in the issuance of transfer
certificate of title."

The same categorically states that Psu-21154 is the subdivision plan of Lot No. 26 and was approved on November 4, 1946. In the
light of the said certification, there is no need for the production of the original survey plan. [Respondent Phil-Ville] is not
responsible for the safekeeping of the original survey plan. Another uncontroverted evidence on the existence of the alleged
missing survey plan is the blue print copy of the approved plan Psd-21154 kept in the vault of the Register of Deeds of Pasig,
presented and identified by [respondent Phil-Ville’s] witnesses, Rolando Golla and Mamerto Lara, of the same office.

xxxx

The allegation of [petitioner] that the owner’s duplicate copy of OCT No. 994 in the custody of the Register of Deeds of Pasig,
Rizal is spurious or fraudulently altered, does not hold water in the absence of any proof. Other allegations of fraud and defects
of the owner’s duplicate copy of OCT No. 994 with the Register of Deeds and Escritura De Venta, are, likewise, unsubstantiated
and merely conjectures.

xxxx

Noteworthy is that the title of [petitioner’s] predecessor-in-interest, Jose Dimson, over the subject land was by virtue of a Court
Order dated June 13, 1966 awarding to him as attorney’s fees 25% of whatever remained under Lot 25-A, 26, 27, 28 and 29
undisposed of the intestate estate of Concepcion Vidal, one of the registered owners of the properties covered by OCT No. 994.
Hence, under the court order, Jose Dimson, was awarded only 25% of the undisposed estate and whatever that percentage
represents, if any, should be first determined and verified by the proper government agency, then the Land Registration
Commission. When Estelita Hipolito acquired the property from Jose Dimson and was subsequently issued TCT No. R-17994, and
when [petitioner] acquired the same property from Estelita Hipolito and was issued TCT No. T-177013, both titles should
necessarily contain an annotation referring to the report of the LRC with regard to the "25% undisposed estate" which should be
covered by the titles. The annotation and report of the LRC, were in effect the very bases of the titles’ existence or validity, and
not an encumbrance. The court’s order gave Jose Dimson a right to 25% undisposed area of the aforesaid lots. This annotation
merely gave notice that the undisposed estate was yet to be determined and verified. The LRC report finally disposed of the
issue. The said report stated that there was nothing more for the heirs of Maria De La Concepcion Vidal to convey to Jose Dimson
as his attorney’s fees. In short, there was no undisposed area to speak of, which Jose Dimson can acquire.

The subject annotation is, therefore, not prohibited and proscribed since it was not an encumbrance.

Thus, the lower court did not err in holding that [petitioner] is not an innocent transferee of whatever interest Jose Dimson had
on Lot 26 because it took said title of Dimson on condition that there remained undisposed portion of Lot 26 in the intestate
estate of Maria De La Concepcion Vidal and subject to the verification of the LRC Verification Committee. 28

Acting on petitioner’s Motion for Reconsideration, the Court of Appeals issued its questioned Resolution on November 10, 2003
affirming its earlier Decision and stating that the grounds and arguments raised in petitioner’s Motion for Reconsideration were
substantially the same that were raised on appeal and were already judiciously passed upon in the Decision dated February 27,
2003.29

On December 23, 2003, petitioner filed this Petition for Review on Certiorari dated November 25, 2003, seeking to reverse the
questioned Decision and Resolution.

After the parties submitted their respective Memoranda, 30 this case was deemed submitted for decision.

THEORY OF PETITIONER

Petitioner claims that the Court of Appeals "committed grave reversible errors and decided questions of substance in a way not
in accordance with law and the applicable decisions of the honorable Court and has departed from the accepted and usual
course of judicial proceedings necessitating the honorable Court’s exercise of its power of supervision," 31 and presented the
following arguments:

I.The Court of Appeals gravely erred when it conveniently disregarded all the admitted patent and inherent technical defects and
infirmities that plague the alleged TCT Nos. 4211, 5261, 35486 and 1368 to 1374 (from where private respondent Phil-Ville
derives its alleged titles), which pursuant to jurisprudence conclusively render said titles void and ineffective. 32

A.The fact that the technical descriptions in the alleged TCT Nos. 4211, 5261 and 35486 are written in Spanish
while those on the purported mother title, OCT No. 994, were already written entirely in English, especially
taken in conjunction with the other patent and inherent technical defects or infirmities, confirms that said
abnormality is a clear proof said alleged TCTs are spurious. 33

B.There was no approved subdivision survey plan for Lot No. 26 of the Maysilo Estate pursuant to which the
alleged TCT No. 4211 and another alleged title (TCT No. 4210) could have been validly issued, which fact is
further proven by the absence of any survey plan number and lot number in said alleged titles such that said
fact and the existence of a survey date therein different from that of the alleged mother title, OCT No. 994,
especially taken together with the other technical defects, indubitably shows that the alleged TCTs are
spurious.34

C.The fact that the alleged plan Psd-21154, which allegedly subdivided the lot covered by the alleged TCT No.
35486 (formerly covered by alleged TCT Nos. 4211 and 5261) could not be traced from the Lands Management
Bureau which purportedly approved said alleged plan, taken in relation with the other technical defects on the
alleged titles from where private respondent Phil-Ville derived its alleged titles, shows that said alleged titles
are void and ineffective.35

D.The fact that there are material deviations in the tie points used in the technical descriptions on the alleged
TCT Nos. 1368 thru 1374 compared to those in the purported mother lot, OCT No. 994, which defeat the very
purpose of tie points and tie lines and is contrary to the standard practice of adopting the tie points of the
mother lot, taken in conjunction with the other technical defects confirms that said alleged titles are spurious. 36

II.In order to justify its questioned decision upholding the spurious titles of private respondent Phil-Ville, the Court of Appeals
erred when it completely disregarded a vital and conclusive evidence, i.e., the expert and scientific analysis of the Forensic
Chemistry Division of the National Bureau of Investigation on the ink and paper used on the alleged TCT No. 4211 (where private
respondent Phil-Ville derived its alleged titles), which scientifically found the alleged TCT No. 4211 to have been prepared only in
the 1940s and not in 1918 as indicated on the face of the document and thus, is spurious. 37

III.The Court of Appeals gravely erred when it routinely and erroneously relied on the allegations raised in public respondent
Republic’s petition-in-intervention notwithstanding the fact that the State is devoid of any legal interest in the subject matter of
the litigation upon which intervention could be based especially in light of the fact that, as ruled by the Court of Appeals itself in
its questioned decision, the instant case admittedly involves private lands only and thus cannot be ordered to be reverted to the
Republic.38

IV. The Court of Appeals gravely erred when it blindly adopted the trial court’s erroneous ruling that petitioner CLT Realty is not
an innocent transferee on the sheer basis of an authorized and illegal annotation on its TCT. 39

V.The Court of Appeals gravely erred when it perfunctorily denied petitioner CLT Realty’s counterclaims despite clear, convincing
and preponderant basis and evidence thereof.40

Petitioner presents the following as the issues to be resolved by this Court in this case:

I.WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT DISREGARDED ALL THE ADMITTED PATENT AND INHERENT
TECHNICAL DEFECTS AND INFIRMITIES THAT PLAGUE THE ALLEGED TCT NOS. 4211, 5261, 35486 AND 1368 TO 1374
(FROM WHERE PRIVATE RESPONDENT PHIL-VILLE DERIVES ITS ALLEGED TITLES), WHICH PURSUANT TO JURISPRUDENCE
CONCLUSIVELY RENDER SAID TITLES VOID AND INEFFECTIVE.

II.WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT COMPLETELY DISREGARDED A VITAL AND CONCLUSIVE
EVIDENCE IN ORDER TO JUSTIFY ITS QUESTIONED DECISION UPHOLDING THE SPURIOUS TITLES OF PRIVATE
RESPONDENT PHIL-VILLE, I.E., THE EXPERT AND SCIENTIFIC ANALYSIS OF THE FORENSIC CHEMISTRY DIVISION OF THE
NATIONAL BUREAU OF INVESTIGATION ON THE INK AND PAPER USED ON THE ALLEGED TCT NO. 4211 (WHERE PRIVATE
RESPONDENT PHIL-VILLE DERIVED ITS ALLEGED TITLES), WHICH SCIENTIFICALLY FOUND THE ALLEGED TCT NO. 4211 TO
 HAVE BEEN PREPARED ONLY IN THE 1940s AND NOT IN 1918 AS INDICATED ON THE FACE OF THE DOCUMENT AND
THUS, IS SPURIOUS.

III.WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT ROUTINELY AND ERRONEOUSLY RELIED ON THE
ALLEGATIONS RAISED IN PUBLIC RESPONDENT REPUBLIC’S PETITION-IN-INTERVENTION ALTHOUGH THE STATE IS
DEVOID OF ANY LEGAL INTEREST IN THE SUBJECT MATTER OF THE LITIGATION UPON WHICH INTERVENTION COULD BE
BASED ESPECIALLY IN LIGHT OF THE FACT THAT, AS RULED BY THE COURT OF APPEALS ITSELF IN ITS QUESTIONED
DECISION, THE INSTANT CASE ADMITTEDLY INVOLVES PRIVATE LANDS ONLY AND THUS CANNOT BE ORDERED TO BE
REVERTED TO THE REPUBLIC.

IV. WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT BLINDLY ADOPTED THE TRIAL COURT’S ERRONEOUS
RULING THAT PETITIONER CLT REALTY IS NOT AN INNOCENT TRANSFEREE ON THE SHEER BASIS OF AN AUTHORIZED
AND ILLEGAL ANNOTATION ON ITS TCT.

V.WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT PERFUNCTORILY DENIED PETITIONER CLT REALTY’S
COUNTERCLAIMS DESPITE CLEAR, CONVINCING AND PREPONDERANT BASIS AND EVIDENCE THEREOF. 41

THEORY OF RESPONDENT PHIL-VILLE

Respondent Phil-Ville raises as an issue that this petition raises purely factual issues and this Court must respect the factual
findings of the RTC and the Court of Appeals, which are supported by clear and convincing evidence.

The other issues according to Phil-Ville are quoted below:

II.WHETHER OR [NOT] LOT 26 COVERED BY PETITIONER’S TCT NO. T-177013 ACTUALLY OVERLAPS THE SIXTEEN
(16)PARCELS OF LAND [COVERED] BY RESPONDENT PHIL-VILLE’S SIXTEEN (16) TRANSFER CERTIFICATES OF TITLE IN
QUESTION.

III.WHETHER OR NOT PETITIONER’S TCT NO. T-177013 IS A SPURIOUS TITLE.

IV. WHETHER OR NOT RESPONDENT PHIL-VILLE’S SIXTEEN (16) TITLES IN QUESTION ARE VALID TITLES.

V.WHETHER OR NOT TCT NOS. 4210 AND 4211 SUFFER FROM DEBILITATING TECHNICAL INFIRMITIES.

VI. WHETHER OR NOT THE USE OF SPANISH TECHNICAL DESCRIPTION IN TITLES SUCH AS TCT NOS. 4210, 4211 AND
35486 AT THAT TIME IS A COMMON ACCEPTABLE PRACTICE.

VII. WHETHER OR NOT THE NON-INCLUSION OF THE DATE OF ORIGINAL SURVEY IN TCT NOS. 4210, 4211, 5261 AND
35486, IF AT ALL, IS NOT A FATAL OMISSION.

VIII. WHETHER OR NOT IT IS MANDATORY THAT WHEN LOT 26 WAS SUBDIVIDED INTO THREE (3) LOTS THE RESULTING
LOTS SHOULD BE DESIGNATED AS LOT 26-A, LOT 26-B AND LOT 26-C.

IX. WHETHER THE USE OF DIFFERENT TIE POINTS IN SUBDIVISION OF SEVEN (7) LOTS IN PSD-21154 SHOULD BE TIED TO
BLLM "1".

X.WHETHER OR NOT A COPY OF PLAN PSD-21154 IS NOT ANYMORE AVAILABLE IN THE BUREAU OF LANDS AND THAT
SAID PLAN DID NOT ACTUALLY EXIST.

XI. WHETHER OR NOT THE TITLES OF RESPONDENT PHIL- VILLE HAVE DEFECTS.

XII. WHETHER OR NOT TCT NOS. 4210 AND 4211 ARE FORGED CERTIFICATES OF TITLE.

XIII. WHETHER OR NOT BOTH THE PNP AND NBI CONFIRMED THE AUTHENTICITY AND GENUINENESS OF TCT NOS. 4210
AND 4211.

XIV. WHETHER OR NOT THE AGE OF THE INK AND PAPER USED IN TCT NOS. 4210 AND 4211 COULD ONLY BE MORE OR
LESS 50 YEARS OLD.

XV. WHETHER OR NOT LOT 26 IS THE SAME LAND THAT WAS EXPROPRIATED BY THE REPUBLIC OF THE PHILIPPINES.
 XVI. WHETHER OR NOT IT IS TOO LATE IN THE DAY FOR PETITIONER TO CONTEST THE VALIDITY OF THE RESPONDENT
PHIL-VILLE’S TITLES IN QUESTION.

XVII. WHETHER OR NOT PETITIONER CLT IS AN INNOCENT PURCHASER OF THE LAND IN QUESTION.

XVIII. WHETHER OR NOT PETITIONER’S CLAIM OF OWNERSHIP OVER LOT 26 IS BARRED BY THE DOCTRINE OF LACHES OR
STALE DEMAND.

XIX. WHETHER OR NOT THE COURT OF APPEALS COMMITTED ANY ERROR IN ALLOWING THE INTERVENTION OF THE
REPUBLIC OF THE PHILIPPINES.

XX.WHETHER OR NOT THE COURT OF APPEALS COMMITTED ANY ERROR IN SUSTAINING THE RULING OF THE TRIAL
COURT DISMISSING THE COUNTERCLAIMS AGAINST RESPONDENT PHIL-VILLE. 42

STATEMENT OF THE ISSUE

As this Court is not a trier of facts, with which the records of this case are replete, the only issue as far as this Court is concerned
is the question of whether or not petitioner’s TCT No. T-177013 imposes a cloud on respondent Phil-Ville’s titles to the 16 parcels
of land subject matter of this case, as provided in Article 476 of the Civil Code.

DISCUSSION

The New Civil Code provides the basis for an action for Quieting of Title. The specific provision reads as follows:

ARTICLE 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record,
claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title.

An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein.

In Phil-Ville Development and Housing Corporation v. Bonifacio, 43 the Court explained the nature of and requisites under this
remedy in the following manner:

Quieting of title is a common law remedy for the removal of any cloud upon, doubt, or uncertainty affecting title to real property.
Whenever there is a cloud on title to real property or any interest in real property by reason of any instrument, record, claim,
encumbrance, or proceeding that is apparently valid or effective, but is, in truth and in fact, invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title. In such
action, the competent court is tasked to determine the respective rights of the complainant and the other claimants, not only to
place things in their proper places, and make the claimant, who has no rights to said immovable, respect and not disturb the one
so entitled, but also for the benefit of both, so that whoever has the right will see every cloud of doubt over the property
dissipated, and he can thereafter fearlessly introduce any desired improvements, as well as use, and even abuse the property.

In order that an action for quieting of title may prosper, two requisites must concur: (1) the plaintiff or complainant has a legal or
equitable title or interest in the real property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed
to be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or
legal efficacy.

xxxx

Thus, the cloud on title consists of: (1) any instrument, record, claim, encumbrance or proceeding; (2) which is apparently valid
or effective; (3) but is in truth and in fact invalid, ineffective, voidable, or unenforceable; and (4) may be prejudicial to the title
sought to be quieted. x x x. (Citations omitted.)

The RTC and the Court of Appeals both arrived at the conclusion that respondent Phil-Ville had a valid title to the 16 parcels of
land subject of the complaint, and that petitioner’s title is invalid despite its prima facie appearance of validity. This conclusion
was arrived at after a thorough study of the pieces of evidence presented by both parties.

We see no cogent reason to reverse and disturb the factual findings of the Court of Appeals quoted above, affirming the RTC
Decision, likewise extensively quoted above, especially as they are supported by the evidence on record. It has been held in a
long string of cases that as a general rule, findings of fact of the Court of Appeals are deemed final, conclusive, and binding on
this Court.44

The jurisdiction of this Court in a petition for review on certiorari under Rule 45 of the Rules of Court is limited to reviewing only
errors of law. There are, in fact, exceptions to this general rule, as explained in Baricuatro, Jr. v. Court of Appeals, 45 but we find
that they are not present in this case.

The alleged errors assigned by petitioner to the Court of Appeals are, even at a glance, factual in nature and are not borne out by
the evidence on record.

As regards the alleged patent and inherent technical defects and infirmities that plagued TCT Nos. 4211, 5261, 35486 and 1368
to 1374, from which respondent Phil-Ville derived its titles, we quote with approval the following findings and conclusions of the
RTC, as follows:

It is no wonder then, that in insisting in the validity of its TCT No. 177013 over Lot 26 of the Maysilo Estate, defendant CLT does
not rely on the force and strength of its title but has trained its guns on the alleged nullity of TCT Nos. 4211, 5261, 35486 and
1368 to 1374 from which Phil- Ville derived its titles to the sixteen (16) lots here in question. It is likewise significant, that
defendant does not attack the validity of the Republic of the Philippines TCT Nos. 12836 to 12842 (Exhs. "HH" to "NN"), which
the government acquired after it expropriated the lands covered by TCT Nos. 1368 to 1374 of the Gonzales children, titles that
defendant also claims to be void. Defendant even stated on page 103 of its memorandum that –

"Morever, it is not disupted that plalintiff’s titles were all derived from the so-called Gonzales Estate which was expropriated by
the Republic of the Philippines (in proceedings which commenced in January, 1947) in the case of Republic of the Philippines vs.
Jose Leon Gonzales, et al." x x x.

If the Republic of the Philippines TCT Nos. 12836 to 12842 covering the parcels of land expropriated by it from the Gonzales
Estate are valid and true, then necessarily, plaintiff’s titles over the sixteen (16) parcels of land here in question, which defendant
admits to have been derived from the Republic’s aforesaid titles, must likewise be valid and true.

xxxx

x x x [D]efendant tries to cast doubt on the genuineness and authenticity of the co-owners duplicate copy of OCT 994 existing in
the Office of the Register of Deeds of Pasig, Rizal. But the original copy of OCT 994 (Exh. "13") carries, in its Memorandum of
Encumbrances, as Entry No. 44905/0-994, the following annotation:

"Entry No. 44905/0-994 – Issuance of co-owner’s copy: By order of the Court of First Instance of Rizal, a co-owner’s duplicate of
this Certificate of Title No. 0-994 has been issued in favor of Maria De La Concepcion Vidal.

Date of the Instrument – March 29, 1962

Date of the Inscription – April 12, 1962 at 3:15 P.M.

(Sgd.) JOSE D. SANTOS, Register of Deeds

The co-owner’s duplicate copy of OCT 994, existing in the Office of the Register of Deeds of Pasig, Rizal must thus be genuine and
a true and faithful copy of the original before the latter was particularly damaged and destroyed, either by bad handling or by the
passage of time, considering that said copy was issued by the official who had the custody of the original title and in compliance
with a Court Order.

xxxx

The Court has no doubt, therefore, that the co-owner’s duplicate copy of OCT 994 presented by plaintiff in this case as its Exhibit
"V", is indeed a true and faithful copy of the original of OCT 994 in the custody of the Register of Deeds of Pasig, Rizal, before
said original of the title was materially damaged apparently to old age or mishandling before it was transferred to the Office of
the Register of Deeds of Caloocan City in 1978.

xxxx
Defendant tries to assail the two (2) Seventy[-]Seven (77) years old titles TCT Nos. 4210 and 4211 in the names of Alejandro Ruiz
and Mariano P. Leuterio cancelling OCT 994 of the Maysilo Estate with respect to Lot 26 thereof, but the Court finds its efforts
fruitless and unconvincing for the following reasons:

First, defendant invites attention to the fact that while the technical descriptions of all the lots in the Maysilo Estate contained in
OCT 994 are already in English, the lots registered under TCT Nos. 4210 and 4211 are still in Spanish.

The Court agrees with plaintiff, that agrimensor Fernando who subdivided Lot 26 into three (3) portions must have prepared
their technical description in Spanish simply because he was more conversant in that language than in English. In fact, there are
other titles in the Office of the Register of Deeds of Pasig, Rizal, which are all derivatives of OCT 994 wherein the technical
descriptions of the properties registered therein are also in Spanish (Exhs. "AAAA", "BBBB", "CCCC" and "DDDD") and many
entries in the Memorandum of Encumbrances in OCT 994 from December 1917 to October, 1939 also appear to be written in
Spanish. Then obviously, both Spanish and English were used interchangeably in legal and official documents in the early years of
the American rule in this country and such documents were either prepared in English and Spanish depending on which language
the person who prepared the document was more conversant with.

Second, defendant observes that the dates of the original survey of the Maysilo Estate indicated in OCT 994 do not appear in TCT
Nos. 4210 and 4211, which show a different survey date. But, there are also other titles in the Office of the Register of Deeds of
Pasig, Rizal, likewise derived from OCT 994 (Exhs. "AAAA" – "DDDD") that do not also mention the dates of the original survey of
the Maysilo Estate as indicated in OCT 994. Again, it is reasonable to assume, that it was not the practice during those days to
state in the succeeding titles the dates of the original survey of a registered land as stated in its OCT. The failure to state the date
of the original survey in succeeding titles did not render said titles defective or invalid.

Third, defendant finds it unusual why agrimensor Fernando, who subdivided Lot 26 into three (3) portions, did not designate said
portions as Lot 26-A, Lot 26-B and Lot 26-C which is the usual practice. But defendant has not shown any requirement in the
Rules of the General Land Registration Office, the predecessor of the Land Registration Authority (LRA), nor in the manual of the
Bureau of Lands, requiring that the resultant lots when an isolated survey is made, like the subdivision made by agrimensor
Fernando on Lot 26, should be designated as Lots A, B and C, a requirement prescribed in cadastral cases.

Fourth, neither does the non-indication of the survey number (a point also raised by defendant) in TCT Nos. 4210 and 4211
lessen the validity of these titles. The approval of the Bureau of Lands was not required in 1918 (Sec. 44, Act No. 496, enacted in
1902). For the technical description of the subdivided portions of Lot 26 prepared by agrimensor Fernando were also approved
by the Court when it approved the Escritura de Venta (Exh. "CC"), embodying said technical descriptions without indicating the
survey number so that we can also believe that the statement of the survey number in the description of registered lands was
not mandatory at that time, as again shown by other titles derived from OCT 994 and also found in the records of the Register of
Deeds of Pasig, Rizal (Exhs. "AAAA" – "DDDD") which do not also indicate the survey numbers of the survey plans which led to
their issuance.

Fifth, the fact noted by defendant, that the old titles and documents relied upon by the plaintiff are still in the files of the
Register of Deeds of Pasig, Rizal and had not been transferred to Caloocan City when it was created, together with the original of
OCT 994, is easily explainable. Caloocan City was formerly a municipality of the Province of Rizal, hence all land titles over
properties in the former municipality of Caloocan and their supporting documents, formed part of the official records of the
Register of Deeds of Pasig, Rizal. Upon the creation of Caloocan City in 1977 or 1978, certain titles and documents pertaining to
properties located in Caloocan City were transferred from Pasig, Rizal to the Office of the Register of Deeds of Caloocan City
either upon request of certain parties or upon the initiative of the latter Officials. Titles not requested to be transferred and
other documents relating to early transactions involving properties located in the former municipality of Caloocan, however,
remained with the Office of the Register of Deeds of Pasig, Rizal, such as the co-owner’s duplicate title of OCT 994, owner’s
duplicate of TCT Nos. 4210, 4211 and 5261 and their supporting documents. (see the testimonies of Deputy Register of Deeds of
Caloocan City, Norberto Vasquez, TSN November 12, 1991, pp. 23, 25; of Rolando Golla, representative of the Register of Deeds
of Pasig, Rizal, TSN id., p. 23; TSN March 17, 1992, p. 27; TSN December 7, 1992, p. 18; and of Mamerto Lara, Records Officer of
the Register of Deeds of Pasig, Rizal, TSN May 5, 1992, pp. 11-16).

Add to all the above, the further consideration that TCT Nos. 4210 and 4211 and the Escritura de Venta (Exhibit "CC") as well as
all the other documents supporting said titles and deed of sale are more than 75 years old, so that under the Rules of Court, no
other evidence of their execution and authenticity need to be given as they were "produced from a custody in which would
naturally be found if genuine" (Rule 132, Sec. 1, Revised Rules of Court). Moreover, said titles and deed of sale and other
supporting documents, are all public documents and ancient at that, so that no further evidence than said documents
themselves are necessary to provide their validity, genuineness and authenticity (Sec. 23, Rule 132, id.).

The Court thus reiterate, that the documents and titles from which plaintiff’s titles to the lots in question are derived, are
genuine, authentic, valid and legitimate.
As already seen, TCT No. 4211 in the name of Alejandro Ruiz and Marciano P. Leuterio was cancelled by TCT No. 5261 of
Francisco J. Gonzales (Exh. "Z"), upon whose death, the land covered by TCT No. 5261 was subdivided in Plan Psd-21154 (Exh.
"U"), among the six (6) Gonzales children, resulting in the issuance to them of TCT Nos. 1368- 1374 (Exhs. "GG-2" – "GG-8"). The
lands covered by said titles of the Gonzales children were later expropriated by the government, consolidated and then divided
into seventy[-]seven (77) lots, after these lots were sold to their claimants occupants or their successors from plaintiff in turn
acquired the sixteen (16) lots here in question.46

The Court of Appeals issued the questioned Decision and Resolution based on the evidence presented on trial even prior to this
Court’s issuance of the historically-significant en banc resolutions in the consolidated cases, commonly entitled Manotok Realty,
Inc. v. CLT Realty Development Corp.,47 wherein the Court reconsidered and reversed its earlier Decision in the same case, as well
as related, previously-decided cases, referring to OCT No. 994 covering a portion of the Maysilo Estate. There were two
resolutions in said cases, one dated December 15, 2007 (the 2007 Manotok Resolution) and a subsequent one dated March 31,
2009 (the 2009 Manotok Resolution).

Of particular relevance to this present case is the ruling in the 2009 Manotok Resolution that TCT No. T-177013, the certificate of
title of herein petitioner CLT, who is also a party to said consolidated cases, is null and void. 48Therefore, the cloud on respondent
Phil-Ville’s 16 titles subject matter of the complaint had already been removed.

From its Answer in the Complaint filed before the RTC to its Memorandum filed before this Court, petitioner proudly traces the
problematic TCT No. T-177013 to its previous owner, Estelita Hipolito, who acquired said lot from Jose Dimson. 49 In Manotok, the
same title was also the subject matter of one of the consolidated cases, described as follows:

CLT's claim was anchored on Transfer Certificate of Title (TCT) No. T-177013 issued in its name by the Caloocan City Register of
Deeds, which title in turn was derived from Estelita Hipolito (Hipolito) by virtue of a Deed of Sale with Real Estate Mortgage
dated 10 December 1988. Hipolito's title emanated from Jose Dimson’s (Dimson) TCT No. R- 15169, a title issued pursuant to an
order of the Court of First Instance (CFI) of Caloocan City, Branch 33. Dimson’s title appears to have been sourced from OCT No.
994.50 (Citation omitted.)

In Manotok, it was established that the true date of OCT No. 994 is May 3, 1917, and that there is only one OCT No. 994. The
decree of registration was issued on April 19, 1917, and actually "received for transcription" by the Register of Deeds on May 3,
1917.51 Thus, all the titles that traced its roots to the spurious OCT No. 994 dated April 19, 1917 were invalidated, including
herein petitioner’s TCT No. T-177013. As held by the Court:

It is evident from all three titles — CLT's, Hipolito’s and Dimson’s

— that the properties they purport to cover were "originally registered on the 19th day April, in the year nineteen hundred and
seventeen in the Registration Book of the Office of the Register of Deeds of Rizal." Note, as earlier established, there is no such
OCT No. 994 originally registered on 19 April 1917.

xxxx

From these premises, the Court is able to make the following binding conclusions. First, there is only one OCT No. 994. As it
appears on the record, that mother title was received for transcription by the Register of Deeds on 3 May 1917, and that should
be the date which should be reckoned as the date of registration of the title. It may also be acknowledged, as appears on the
title, that OCT No. 994 resulted from the issuance of the decree of registration on 17 April 1917, although such date cannot be
considered as the date of the title or the date when the title took effect.

Second. Any title that traces its source to OCT No. 994 dated 17 April 1917 is void, for such mother title is inexistent. The fact
that the Dimson and CLT titles made specific reference to an OCT No. 994 dated 17 April 1917 casts doubt on the validity of such
titles since they refer to an inexistent OCT. This error alone is, in fact, sufficient to invalidate the Dimson and CLT claims over the
subject property if singular reliance is placed by them on the dates appearing on their respective titles. 52 (Emphasis added.)

As a matter of fact, in Alfonso v. Office of the President and Phil-Ville Development and Housing Corporation, 53 the Court
penalized the former register of deeds of Caloocan who acquiesced to the change of the date of registration of OCT No. 994 from
May 3, 1917 to April 19, 1917, which wreaked havoc on our country’s land titling system, and led to much confusion that
continued to "rear its ugly head" in many cases pending before the courts.

It has taken all three branches of government to correct the massive confusion caused by the fake titles purportedly covering
various portions of the Maysilo Estate. In Manotok, the Court took note of the Department of Justice Report dated August 28,
1997 as well as the Senate Report dated May 25, 1998, which the Solicitor General contended should be considered by the Court
as evidence. As in this case, the Republic of the Philippines had assiduously intervened in each and every pending case involving
the various titles that have spawned from the spurious OCT No. 994. What the Court in the 2007 Manotok Resolution did was to
conduct its own investigation as to the controversy, and not just rely on the reports presented by the Solicitor General from both
the executive and the legislative departments, and to remand the case to a Special Division of the Court of Appeals for reception
of further evidence. The duties of said Special Division were spelled out in Manotok in this manner:

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

In ascertaining which of the conflicting claims of title should prevail, the Special Division is directed to make the following
determinations based on the evidence already on record and such other evidence as may be presented at the proceedings
before it, to wit:

i.Which of the contending parties are able to trace back their claims of title to OCT No. 994 dated 3 May 1917?

ii.Whether the imputed flaws in the titles of the Manotoks and Araneta, as recounted in the 2005 Decision, are borne by
the evidence? Assuming they are, are such flaws sufficient to defeat the claims of title of the Manotoks and Araneta?

iii.Whether the factual and legal bases of 1966 Order of Judge Muñoz-Palma and the 1970 Order of Judge Sayo are true
and valid. Assuming they are, do these orders establish a superior right to the subject properties in favor of the Dimsons
and CLT as opposed to the claims of Araneta and the Manotoks?

iv.Whether any of the subject properties had been the subject of expropriation proceedings at any point since the
issuance of OCT No. 994 on 3 May 1917, and if so what are those proceedings, what are the titles acquired by the
Government and whether any of the parties is able to trace its title to the title acquired by the Government through
expropriation.

v.Such other matters necessary and proper in ascertaining which of the conflicting claims of title should prevail. 54

In the 2009 Manotok Resolution, the Court held that the Report (of the Special Division) "is a commendably exhaustive and
pellucid analysis of the issues referred to the Special Division" and "is a more than adequate basis" 55 for the Court to make its
final dispositions in the consolidated cases. We quote the portions of the 2009 Manotok Resolution referring to the CLT title, as
follows:

The ultimate purpose of the inquiry undertaken by the Court of Appeals was to ascertain which of the four groups of claimants
were entitled to claim ownership over the subject properties to which they claimed title thereto. One set of properties was
disputed between CLT and the Manotoks, while the other set was disputed between Araneta and the Heirs of Dimson.

xxxx

Another property in Dimson’s name, apparently taken from Lot 26 of the Maysilo Estate, was later sold to Estelita Hipolito, who
in turn sold the same to CLT. Said property was registered by CLT under TCT No. T- 177013, which also reflected, as its mother
title, OCT No. 994 dated 19 April 1917. Said property claimed by CLT encroached on property covered by titles in the name of the
Manotoks. The Manotoks traced their titles to TCT Nos. 4210 and 4211, both issued in 1918 and both reflecting, as their mother
title, OCT No. 994 dated 3 May 1917.

It is evident that both the Heirs of Dimson and CLT had primarily relied on the validity of OCT No. 994 dated 19 April 1917 as the
basis of their claim of ownership.1âwphi1 However, the Court in its 2007 Resolution held that OCT No. 994 dated 19 April 1917
was inexistent. The proceedings before the Special Division afforded the Heirs of Dimson and CLT alike the opportunity to prove
the validity of their respective claims to title based on evidence other than claims to title the inexistent 19 April 1917 OCT No.
994. Just as much was observed by the Special Division:

xxxx

The Special Division noted that the Heirs of Dimson did not offer any explanation why their titles reflect the erroneous date of 19
April 1917. At the same time, it rejected CLT’s explanation that the transcription of the erroneous date was a "typographical
error."

xxxx
Our findings regarding the titles of Jose Dimson necessarily affect and even invalidate the claims of all persons who seek to
derive ownership from the Dimson titles. These include CLT, which acquired the properties they laid claim on from Estelita
Hipolito who in turn acquired the same from Jose Dimson. Just as much was concluded by the Special Division as it evaluated
CLT’s claims.

xxxx

In view of the foregoing disquisitions, invalidating the titles of DIMSON, the title of CLT should also be declared a nullity inasmuch
as the nullity of the titles of DIMSON necessarily upended CLT’s propriety claims. As earlier highlighted, CLT had anchored its
claim on the strength of Hipolito’s title and that of DIMSON’s TCT No. 15166. Remarkably and curiously though, TCT No. 15166
was never presented in evidence for purposes of tracing the validity of titles of CLT. On this basis alone, the present remand
proceedings remain damning to CLT’s claim of ownership.

Moreover, considering that the land title of CLT carried annotations identical to those of DIMSON and consequently included the
defects in DIMSON’s title, the fact that whatever typographical errors were not at anytime cured by subsequent compliance with
the administrative requirements or subjected to administrative correction bolsters the invalidity of the CLT title due to its
complete and sole dependence on the void DIMSON title.56

Thus, both requisites in order for an action for quieting of title to prosper have been met in this case: (1) respondent Phil-Ville
had established its equitable title or interest in the 16 parcels of land subject of the action; and (2) TCT No. T-177013, found to
overlap titles to said properties of respondent Phil-declaredVille,was previously invalid.

In fine, the Court of Appeals, in its questioned Decision and Resolution, did not commit reversible error in upholding the RTC
Decision dated March 15, 1996.

WHEREFORE, in view of the foregoing, the petition is hereby DENIED. Costs against petitioner.

SO ORDERED.

G.R. No. 201248, March 11, 2015

LETICIA NAGUIT AQUINO, MELVIN NAGUIT, ROMMEL NAGUIT, ELMA NAGUIT TAYAG, YSSEL L. NAGUIT, ROSALINA NAGUIT
AUMENTADO, RIZEL NAGUIT CUNANAN, CARIDAD NAGUIT PARAJAS, MILLIE NAGUIT FLORENDO, MARNEL NAGUIT, EDUARDO
NAGUIT, JOSE NAGUIT, ZOILO NAGUIT, AND AMELIA NAGUIT DIZON, REPRESENTED BY YSSEL L. NAGUIT,Petitioners, v. CESAR B.
QUIAZON, AMANDA QUIAZON, JOSE B. QUIAZON AND REYNALDO B. QUIAZON, REPRESENTED BY JAIME B.
QUIAZON, Respondent.

DECISION

MENDOZA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the March 13, 2012
Decision1 of the Court of Appeals (CA), in CA-G.R. CV No. 92887, which affirmed the Orders2 of the Regional Trial Court (RTC),
Angeles City, Branch 59, in SP Civil Case No. 05-076, dismissing the complaint for quieting of title filed by the
petitioners.chanRoblesvirtualLawlibrary

The Facts

On December 16, 2005, a complaint3 for Annulment and Quieting of Title was filed before the RTC-Branch 59 by the petitioners,
namely, Leticia Naguit Aquino, Melvin Naguit, Rommel Naguit, Elma Naguit Tayag, Yssel L. Naguit, Rosalina Naguit Aumentado,
Rizel Naguit Cunanan, Caridad Naguit Parajas, Millie Naguit Florendo, Marnel Naguit, Eduardo Naguit, Jose Naguit, Zoilo Naguit,
and Amelia Naguit Dizon, represented by Yssel L. Naguit (petitioners). They alleged that they were the heirs of the late Epifanio
Makam and Severina Bautista, who acquired a house and lot situated in Magalang, Pampanga, consisting of 557 square meters,
by virtue of a Deed of Sale, dated April 20, 1894; that since then, they and their predecessors-in-interest had been in open,
continuous, adverse, and notorious possession for more than a hundred years, constructing houses and paying real estate taxes
on the property; that sometime in June 2005, they received various demand letters from the respondents, namely, Cesar B.
Quiazon, Amanda Quiazon, Jose B. Quiazon, and Reynaldo B. Quiazon, represented by Jaime B. Quiazon (respondents), claiming
ownership over the subject property and demanding that they vacate the same; that upon inquiry with the Register of Deeds of
San Fernando, Pampanga, they confirmed that the property had been titled in the name of respondents under Transfer
Certificate of Title (TCT) No. 213777-R; that the said title was invalid, ineffective, voidable or unenforceable; and that they were
the true owners of the property.

Hence, they prayed that the title be cancelled and a new title be issued in their favor.

In their Answer,4 respondents asserted that they were the absolute owners of the subject land as per TCT No. 213777-R; that
they had inherited the same from their predecessor-in-interest, Fausta Baluyut, one of the registered owners under Original
Certificate of Title (OCT) No. RO-1138 (11376), as per the Project of Partition and Deed of Agreement, dated January 2, 1974; and
that petitioners had been occupying the property by mere tolerance. They denied the allegations in the complaint and proffered
affirmative defenses with counterclaims.

They argued that: First, the petitioners "have no valid, legal and sufficient cause of action" 5 against them, because their deed of
sale was spurious and could not prevail over Land Registration Decree No. 122511 issued on June 28, 1919 in Land Registration
Case No. 5, LRC Records No. 128, by the Court of First Instance of Pampanga, in favor of their predecessor-in-interest. The
predecessors-in-interest of petitioners were among the oppositors in the land registration proceeding but, nevertheless, after
the trial, the subject lot was awarded, decreed and titled in favor of respondents' predecessor-in-interest, as per OCT No. RO-
1138 (11376) of the Registry of Deeds of Pampanga. Second, the action was barred by prescription and that petitioners were
guilty of laches in asserting their interest over the subject lot, considering that Land Registration Decree No. 122511 was issued
on June 28, 1919 and OCT No. RO-1138 (11376) was issued on May 12, 1922. Hence, it was much too late for petitioners to
institute the action after more than 80 years. They also raised the settled rule that a title registered under the Torrens system
could not be defeated by adverse, open and notorious possession, or by prescription. Third, the action was also barred by res
judicata and violated the prohibition against forum shopping, considering that petitioners had earlier filed a similar case for
quieting of title against respondents, docketed as Civil Case No. 5487, which the RTC-Br. 56 dismissed.

Petitioners filed their Comment to Defendant's Affirmative Defenses.6 Anent the alleged lack of cause of action due to the
spurious deed of sale, petitioners argued that this contention was a matter of evidence which might only be resolved in a full-
blown trial. They insisted that the deed of sale was genuine and authentic and was issued and certified by the Deputy Clerk of
Court of the RTC. They added that the settled rule was that to determine the sufficiency of the cause of action, only the facts
alleged in the complaint should be considered, and that the allegations in their complaint sufficiently stated a cause of action.

As regards the allegation of prescription, the petitioners countered that an action to quiet title did not prescribe if the plaintiffs
were in possession of the property in question. They argued that they were neither guilty of laches nor were they in possession
of the property by mere tolerance, their possession being in the concept of owner for more than a hundred years.

Lastly, regarding the argument on res judicata, petitioners explained that they were not the same plaintiffs in Civil Case No. 5487
and that the case was dismissed without prejudice.

The RTC set a preliminary hearing on the affirmative defenses.

Respondents presented Atty. Charlemagne Tiqui Calilung, RTC Clerk of Court of San Fernando, Pampanga, who presented the
record of Cadastral Case No. 5, dated June 28, 1919, as well as Decree No. 122511. They also presented Luis Samuel Ragodon,
the Registration Examiner of the Registry of Deeds of San Fernando, Pampanga, who presented the original copy of OCT No.
11376, reconstituted as RO-1138, and testified that the title was derived from Decree No. 122511. He further testified that the
original title had been cancelled pursuant to a project of partition, which was registered on December 17, 1984, and in lieu
thereof, TCT Nos. 213775, 213776, 213777, 213778, 213779, 213780, and 213781 were issued. He presented the original copy of
TCT No. 213777-R issued in the names of respondents.

Henry Y. Bituin, the court interpreter who translated the June 28, 1919 decision of the Court of First Instance of Pampanga in
Land Registration Case No. 5 from Spanish to English, also testified.

Petitioners manifested that they were opting to submit the incident for resolution without presenting evidence, relying on their
position that only the facts alleged in the complaint should be considered.

In their formal offer of evidence,7 respondents offered the following documents: (1) the June 28, 1919 Decision and its English
translation; (2) Transmittal Letter, dated May 6, 1922; (3) Decree No. 122511; (4) OCT No. RO-1138; (5) TCT No. 213777-R; (6) the
petition, dated July 29, 1988, and its annexes in Civil Case No. 5487; (7) the September 7, 1990 Order dismissing Civil Case No.
5487, without prejudice; and (8) the July 29, 1916 Decision in Expediente No. 132, G.L.R.O. Record No. 11958 and its English
translation.

In their comment/opposition8 to the formal offer of evidence, petitioners argued (1) that the claims of Epifanio Makam and
Severina Bautista, their predecessors-in-interest, were not adjudicated in the June 28, 1919 decision and, thus, res judicata was
inapplicable; (2) that Civil Case No. 5487 was dismissed without prejudice and that they were not the plaintiffs therein; (3) that
the allegedly spurious nature of the deed of sale and the supposed indefeasibility of respondents' title were matters of evidence
to be resolved in a full-blown trial and the trial court was only confined to the allegations in the complaint; (4) that their action
was not barred by prescription because an action to quiet title did not prescribe if the plaintiffs were in possession of the subject
property and that they had been in possession in the concept of owner for more than 100 years; and (5) that respondents were
guilty of laches having taken more than 80 years to attempt to enforce their claimed title to the
property.chanRoblesvirtualLawlibrary

Ruling of the RTC

On July 14, 2008, the RTC-Br. 59 issued the Order dismissing petitioners' complaint. It found that based on the decision, dated
June 28, 1919, in Cadastral Case No. 5, the Baluyut siblings, respondents' predecessors-in-interest, were declared the absolute
owners of the subject property, over the claim of Jose Makam, the predecessor-in-interest of petitioners, who was one of the
oppositors in the said case. From this decision, OCT No. RO-1138 (11376) was derived, which later became the subject of a
project of partition and deed of agreement among the Baluyut siblings, dated January 2, 1972, which, in turn, was annotated on
the OCT as Entry No. 8132. TCT No. 213777-R, covering the subject lot, was later derived from the partition. The RTC-Br. 59 also
noted that it was stated in the said decision that in 1907, a warehouse was constructed on the subject lot by virtue of an
agreement between the Chairman of Magalang and Enrique Baluyut, with no objection from the Makams. It was further noted
that the deed of sale being asserted by petitioners was not mentioned in the 1919 decision despite the claim of their
predecessors-in-interest.

The RTC-Br. 59, thus, ruled that the deed of sale had become invalid by virtue of the June 28, 1919 decision. It held that although
the deed of sale dated, April 20, 1894, was never challenged, it was nevertheless unenforceable by virtue of the June 28, 1919
decision. It found that petitioners had lost whatever right they had on the property from the moment the said decision was
rendered and an OCT was issued. Finding that petitioners were not holders of any legal title over the property and were bereft of
any equitable claim thereon, the RTC-Branch 59 stated that the first requisite of an action to quiet title was miserably wanting. It
also found the second requisite to be wanting because respondents had proved that the TCT registered in their names was valid.

Anent petitioners' argument that only the complaint may be considered in determining the sufficiency of the cause of action, the
RTC-Br. 59 ruled that under Section 2 in relation to Section 6, Rule 16 of the Rules of Court, a preliminary hearing on the
affirmative defense in the answer might be had at the discretion of the court, during which the parties could present their
arguments and their evidence.

On December 22, 2008, the RTC-Br. 59 denied petitioners' motion for reconsideration. It stated that the court may consider
evidence presented in hearings related to the case, which was an exception to the general rule that only the complaint should be
taken into consideration. It stated that petitioners were without legal or equitable title to the subject property, thus, lacking the
legal personality to file an action for quieting of title and, therefore, "the complaint was properly dismissed for failing to state a
cause of action."9

Ruling of the CA

In the assailed Decision, dated March 13, 2012, the CA dismissed petitioners' appeal. It explained that under Section 6, Rule 16 of
the Rules of Court, a court is allowed to conduct a preliminary hearing,motu proprio, on the defendant's affirmative defenses,
including the ground of "lack of cause of action or failure to state a cause of action." 10 It gave the reason that because the rule
spoke in general terms, its manifest intention was to apply it to all grounds for a motion to dismiss under the rules which were
pleaded as affirmative defenses in the responsive pleading. Thus, it held that the trial court might consider other evidence aside
from the averments in the complaint in determining the sufficiency of the cause of action. The CA
explained:chanroblesvirtuallawlibrary
But as shown in the foregoing rule, the holding of a preliminary hearing on any of the grounds for a motion to dismiss which is
pleaded as an affirmative defense is within the full discretion of the trial court. The rule speaks of affirmative defenses that are
grounds for a motion to dismiss. Indubitably, lack of cause of action or failure to state a cause of action, being one of the grounds
for a motion to dismiss, is included thereby.

Since the rule allows the trial court to conduct a preliminary hearing on this kind of an affirmative defense, it follows then that
evidence could be submitted and received during the proceedings which the court may consider in forming its decision. It would
be plain absurdity if the evidence already presented therein would not be allowed to be considered in resolving whether the
case should be dismissed or not. To rule otherwise would render nugatory the provision of Section 6, Rule 16 and would make
the holding of a preliminary hearing a plain exercise in futility. No well-meaning judge would hold a preliminary hearing and
receive evidence only to disregard later the evidence gathered in the course thereof. If the intention of the rule is for the trial
court to confine itself to the allegations in the complaint in determining the sufficiency of the cause of action, as the plaintiffs-
appellants would want to impress upon this Court, then it should have been so expressly stated by barring the court from
conducting a preliminary hearing based on the said ground. The fact, however, that the said rule speaks in general terms, it is its
manifest intention to apply it in all grounds for a motion to dismiss under the rules which are pleaded as an affirmative defense
in the responsive pleading. Thus, we find that that trial court did not err in considering the evidence already presented and in not
confining itself to the allegations in the plaintiffs-appeallants'complaint. 11cralawlawlibrary
The CA gave credence to the evidence presented by respondents and noted that, except for petitioners' bare allegation that
respondents' title was invalid, there was nothing more to support the same. It further noted that the deed of sale was written in
a local dialect without the translation and with no ascertainable reference to the area of the property being conveyed. The CA,
therefore, found that petitioners did not have the title required to avail of the remedy of quieting of title, while respondents had
sufficiently proven the validity of their Torrens title.

Hence, the subject petition.chanRoblesvirtualLawlibrary

ISSUE
Whether the CA erred in affirming the dismissal of petitioners' complaint on the ground of lack of cause of action or failure to
state a cause of action.
Petitioners argue that the CA gravely erred in considering external factors beyond the allegations in the petition. They aver that it
is a settled rule that to determine the sufficiency of a cause of action, only facts alleged in the complaint shall be considered, and
it is error for the court to take cognizance of external facts or hold a preliminary hearing to determine their existence.

Respondents, on the other hand, echo the ruling of the CA that it was within the disrection of the trial court to conduct a
preliminary hearing on the affirmative defense of lack of cause of action or failure to state a cause of action, where both parties
were given the chance to submit arguments and evidence for or against the dismissal of the complaint. Furthermore, they argue
that the Court has previously upheld cases where the court took into account external factors in the dismissal of the complaint
on the ground of lack of cause of action. They assert that since petitioners were given reasonable opportunity to present
evidence to prove their cause of action, they are now estopped from invoking the rule that only allegations in the complaint
should be considered.12

Petitioners reiterate that they have been in possession of the property in the concept of owner for more than 119 years, where
they built their houses, reared their families, and paid realty taxes thereon. They point out that their possession was never
disputed by respondents, and that respondents had only attempted to enforce their supposed rights over the property in 2005,
or 86 years after the purported decree awarding the property to them. Petitioners argue that respondents had abandoned their
right to the subject property which, thus, rendered invalid whatever title they might have had. They argue that it has been held
that a registered owner's right to recover possession and title to property may be converted into a stale demand by virtue of
laches. They also claim that the allegations contained in their complaint sufficiently state a cause of action, and that it was an
error for the trial court to declare it unenforceable considering that the deed of sale should be considered hypothetically
admitted when determining whether the complaint sufficiently states a cause of action. 13

Ruling of the Court

Preliminary matters

The Court notes that respondents raised the affirmative defense in their Answer that petitioners "have no valid, legal and
sufficient cause of action," raising factual matters, 14 which is effectively the ground of "lack of cause of action." Respondents'
arguments made no assertion that the complaint failed to state a cause of action. The ground of "lack of cause of action" has
been frequently confused with the ground of "failure to state a cause of action," and this is the situation prevailing in the present
case. The terms were, in fact, used interchangeably by both the respondents and the lower courts.
The distinction between the grounds of "failure to state a cause of action" and "lack of cause of action" was aptly discussed
in Dabuco vs. Court of Appeals, to wit:chanroblesvirtuallawlibrary
As a preliminary matter, we wish to stress the distinction between the two grounds for dismissal of an action: failure to state a
cause of action, on the one hand, and lack of cause of action, on the other hand. The former refers to the insufficiency of
allegation in the pleading, the latter to the insufficiency of factual basis for the action. Failure to state a cause may be raised in a
Motion to Dismiss under Rule 16, while lack of cause may be raised any time. Dismissal for failure to state a cause can be made
at the earliest stages of an action. Dismissal for lack of cause is usually made after questions of fact have been resolved on the
basis of stipulations, admissions or evidence presented.15cralawlawlibrary
Although the two grounds were used interchangeably, it can be gleaned from the decisions of both the trial court and the CA
that respondents' defense of "lack of cause of action" was actually treated as a "failure to state a cause of action," which is a
ground for a motion to dismiss under Rule 16. This is apparent from their reliance on Section 6 of Rule 16, which pertains to
grounds of a motion to dismiss raised as affirmative defenses; as well as the doctrines cited in resolving the case. The CA even
referred to both as one and the same ground for a motion to dismiss when it stated that: "Indubitably, lack of cause of action or
failure to state a cause of action, being one of the grounds for a motion to dismiss, is included thereby." 16

Also confused, respondents, on their part, asserted that "it is within the discretion of the Court a quo to conduct a preliminary
hearing on the affirmative defense of lack of cause of action or failure to state a cause of action," 17 the very basis of their
argument being hinged on the application of Section 6. They also insisted on the applicability of the exceptions to the general
rule that only averments in the complaint must be considered, which pertains to the ground of "failure to state a cause of
action."

The trial court held a preliminary hearing resolving the ground of "lack of cause of action" pursuant to Section 6 of Rule 16,
which allows the court to hold a preliminary hearing on grounds for dismissal provided in the same rule that have been raised as
an affirmative defense in the answer. 18 The ground of "lack of cause of action," as already explained, however, is not one of the
grounds for a motion to dismiss under Rule 16, and hence, not proper for resolution during a preliminary hearing held pursuant
to Section 6. On this point alone, the trial court clearly erred in receiving evidence on the ground of "lack of cause of action"
during the preliminary hearing. The factual matters raised by respondents in their affirmative defense arguing the non-existence
of a cause of action, should have been duly resolved during a trial on the merits of the case.

In any case, even if the Court were to treat respondents' argument as a "failure to state a cause of action," their defense would
still fail.

Court limited to averments in the complaint

Rule 16 of the Rules of Court enumerates the grounds for a motion to dismiss. The pertinent ground is found under Section 1(g),
which reads as follows:chanroblesvirtuallawlibrary
xxxx

(g) That the pleading asserting the claim states no cause of action; xxxx (Emphasis supplied)
The test for determining the existence of a cause of action was amply discussed in Insular Investment and Trust Corporation v.
Capital One Equities Corporation,19 citing Perpetual Savings Bank v. Fajardo,20 to wit:chanroblesvirtuallawlibrary
The familiar test for determining whether a complaint did or did not state a cause of action against the defendants is whether
or not, admitting hypothetically the truth of the allegations of fact made in the complaint, a judge may validly grant the relief
demanded in the complaint. In Rava Development Corporation v. Court of Appeals, the Court elaborated on this established
standard in the following manner:chanroblesvirtuallawlibrary
"The rule is that a defendant moving to dismiss a complaint on the ground of lack of cause of action is regarded as having
hypothetically admitted all the averments thereof. The test of the sufficiency of the facts found in a petition as constituting a
cause of action is whether or not, admitting the facts alleged, the court can render a valid judgment upon the same in
accordance with the prayer thereof (Consolidated Bank and Trust Corp. v. Court of Appeals, 197 SCRA 663 [1991]).

In determining the existence of a cause of action, only the statements in the complaint may properly be considered. It is error
for the court to take cognizance of external facts or hold preliminary hearings to determine their existence. If the allegation in a
complaint furnish sufficient basis by which the complaint may be maintained, the same should not be dismissed regardless of the
defenses that may be assessed by the defendants (supra). 21cralawlawlibrary
Thus, in determining the existence of a cause of action, only the allegations in the complaint may properly be considered. For the
court to do otherwise would be a procedural error and a denial of the plaintiffs right to due process. 22

In the case at bench, petitioners' cause of action relates to an action to quiet title under Article 476 of the Civil Code, which
provides:chanroblesvirtuallawlibrary
Article 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record,
claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet title.
An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein.
A "cloud on title" is an outstanding instrument, record, claim, encumbrance or proceeding which is actually invalid or
inoperative, but which may nevertheless impair or affect injuriously the title to property. The matter complained of must have
a prima facie appearance of validity or legal efficacy. The cloud on title is a semblance of title which appears in some legal form
but which is in fact unfounded. The invalidity or inoperativeness of the instrument is not apparent on the face of such
instrument, and it has to be proved by extrinsic evidence.23

In order that an action for quieting of title may prosper, two requisites must concur: (1) the plaintiff or complainant has a legal or
equitable title or interest in the real property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed
to be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or
legal efficacy.24

Turning then to petitioners' complaint, the relevant allegations as to the cause of action for quieting of title read as
follows:chanroblesvirtuallawlibrary
3. Plaintiffs are the heirs of the late Epifanio Makam and Severina Bautista who acquired a house and lot on 20 April 1894
situated in Magalang, Pampanga, consisting of Five Hundred Seventy Seven (577) square meters more or less, by virtue of a Deed
of Sale, hereby quoted for ready reference:

xxx

4. From 1894 and up to the present, plaintiffs and through their predecessors-in-interest have been in open, continuous, adverse
and notorious possession for more than a hundred years of the piece of property mentioned above, constructed their houses
thereon and dutifully and faithfully paid the real estate taxes on the said property;

5. That sometime in June 2005, plaintiffs received various demand letters from defendants demanding plaintiffs to vacate the
premises, claiming ownership of the subject property;

6. That when plaintiffs inquired from the Office of the Register of Deeds of San Fernando, Pampanga, they were able to confirm
that their property had been titled in the name of herein defendants under TCT No. 213777-R;

7. That the said title is in fact invalid, ineffective, voidable or unenforceable, the existence of which is pre-judicial to the
ownership and possession of plaintiffs who are the true owners and actual possessors of the above described real property;

8. That equity demands that the said title be surrendered by defendants and cancelled as it is a cloud upon the legal or equitable
title to or interest of plaintiffs over the subject property. 25cralawlawlibrary
It is readily apparent from the complaint that petitioners alleged that (1) they had an interest over the subject property by virtue
of a Deed of Sale, dated April 20, 1894; and that (2) the title of respondents under TCT No. 213777-R was invalid, ineffective,
voidable or unenforceable. Hypothetically admitting these allegations as true, as is required in determining whether a complaint
fails to state a cause of action, petitioners may be granted their claim. Clearly, the complaint sufficiently stated a cause of action.
In resolving whether or not the complaint stated a cause of action, the trial court should have limited itself to examining the
sufficiency of the allegations in the complaint. It was proscribed from inquiring into the truth of the allegations in the complaint
or the authenticity of any of the documents referred or attached to the complaint, as these were deemed hypothetically
admitted by the respondents.26

Evangelista v. Santiago elucidates:chanroblesvirtuallawlibrary

The affirmative defense that the Complaint stated no cause of action, similar to a motion to dismiss based on the same ground,
requires a hypothetical admission of the facts alleged in the Complaint. In the case of Garcon v. Redemptorist Fathers, this Court
laid down the rules as far as this ground for dismissal of an action or affirmative defense is concerned:chanroblesvirtuallawlibrary
It is already well-settled that in a motion to dismiss a complaint based on lack of cause of action, the question submitted to the
court for determination is the sufficiency of the allegations of fact made in the complaint to constitute a cause of action, and not
on whether these allegations of fact are true, for said motion must hypothetically admit the truth of the facts alleged in the
complaint; that the test of the sufficiency of the facts alleged in the complaint is whether or not, admitting the facts alleged, the
court could render a valid judgment upon the same in accordance with the prayer of said complaint. Stated otherwise, the
insufficiency of the cause of action must appear in the face of the complaint in order to sustain a dismissal on this ground, for in
the determination of whether or not a complaint states a cause of action, only the facts alleged therein and no other matter may
be considered, and the court may not inquire into the truth of the allegations, and find them to be false before a hearing is had
on the merits of the case; and it is improper to inject in the allegations of the complaint facts not alleged or proved, and use
these as basis for said motion.27 (Emphasis and underscoring supplied)
Exceptions and Section 6 of Rule 16 not applicable

The Court does not discount, however, that there are exceptions to the general rule that allegations are hypothetically admitted
as true and inquiry is confined to the face of the complaint. First, there is no hypothetical admission of (a) the veracity of
allegations if their falsity is subject to judicial notice; (b) allegations that are legally impossible; (c) facts inadmissible in evidence;
and (d) facts which appear, by record or document included in the pleadings, to be unfounded. 28Second, inquiry is not confined
to the complaint if culled (a) from annexes and other pleadings submitted by the parties; 29 (b) from documentary evidence
admitted by stipulation which disclose facts sufficient to defeat the claim; or (c) from evidence admitted in the course of hearings
related to the case.30

Pointing to the exception that inquiry was not confined to the complaint if evidence had been presented in the course of
hearings related to the case, the CA ruled that it was within the trial court's discretion to receive and consider other evidence
aside from the allegations in the complaint in resolving a party's affirmative defense. It held that this discretion was recognized
under Section 6 of Rule 16 of the Rules of Court, which allowed the court to conduct a preliminary hearing, motu proprio, on the
defendant's affirmative defense if no corresponding motion to dismiss was filed. This section reads in
part:chanroblesvirtuallawlibrary
Section 6. Pleading grounds as affirmative defenses. - If no motion to dismiss has been filed, any of the grounds for dismissal
provided for in this Rule may be pleaded as an affirmative defense in the answer and, in the discretion of the court, a preliminary
hearing may be had thereon as if a motion to dismiss had been filed.
In their answer, respondents raised the affirmative defenses of "lack of cause of action, prescription, and res judicata,"31 stated in
the following manner:chanroblesvirtuallawlibrary
xxxx

6. Plaintiffs have no valid, legal and sufficient cause of action against the defendants. The alleged "deed of sale" (Annex "B"
-Amended Complaint) is spurious and the same cannot prevail over the Land Registration Decree No. 122511 issued on June 28,
1919 in Land Registration Case No. 5, LRC Record No. 128, by the Court of First Instance of Pampanga, in favor of defendants'
predecessor-in-interest. In fact, plaintiffs' predecessors-in-interest were among the oppositors in that land registration
proceeding but after trial the lot in question was awarded, decreed and titled in favor and in the names of defendants'
predecessors-in-interest, as per Original Certificate of Title No. RO-1138 (11376) of the Registry of Deeds of Pampanga;

7. The instant action, which is actually an action of reconveyance, is already barred byprescription. Moreover, plaintiffs are guilty
of laches in asserting their alleged title or interest over the subject lot. Said Land Registration Decree No. 122511 was issued on
June 28, 1919 and OCT No. RO 1138 (11376) was issued on May 12, 1922. Clearly, it is much too late for the plaintiffs, after more
than eighty (80) long years to institute this action against the defendants;

xxxx

9. The present action is also barred by res judicata and violates the prohibition against forum shopping. There was already a
prior similar case for quieting of title filed by plaintiffs' predecessor-in-interest against defendant Jaime Quiazon and his co-
owners, before Branch 56 of this Honorable Court, docketed as Civil Case No. 5487, which was dismissed; 32 xxxx (Emphases
supplied)
A review of the first ground under paragraph 6 of the answer reveals that respondents alleged that "[p]laintiffs have no valid,
legal and sufficient cause of action against the defendants." It is at this point that it must again be emphasized that it is not "lack
or absence of cause of action" that is a ground for dismissal of the complaint under Rule 16, but rather, that "the complaint
states no cause of action."33 The issue submitted to the court was, therefore, the determination of the sufficiency of the
allegations in the complaint to constitute a cause of action and not whether those allegations of fact were true, as there was a
hypothetical admission of facts alleged in the complaint. 34 An affirmative defense, raising the ground that there is no cause of
action as against the defendants poses a question of fact that should be resolved after the conduct of the trial on the merits. 35 A
reading of respondents' arguments in support of this ground readily reveals that the arguments relate not to the failure to state a
cause of action, but to the existence of the cause of action, which goes into the very crux of the controversy and is a matter of
evidence for resolution after a full-blown hearing.

The trial court may indeed elect to hold a preliminary hearing on affirmative defenses as raised in the answer under Section 6 of
Rules 16 of the Rules of Court. It has been held, however, that such a hearing is not necessary when the affirmative defense is
failure to state a cause of action,36 and that it is, in fact, error for the court to hold a preliminary hearing to determine the
existence of external facts outside the complaint. 37 The reception and the consideration of evidence on the ground that the
complaint fails to state a cause of action, has been held to be improper and impermissible. 38 Thus, in a preliminary hearing on a
motion to dismiss or on the affirmative defenses raised in an answer, the parties are allowed to present evidence except when
the motion is based on the ground of insufficiency of the statement of the cause of action which must be determined on the
basis only of the facts alleged in the complaint and no other. 39 Section 6, therefore, does not apply to the ground that the
complaint fails to state a cause of action. The trial court, thus, erred in receiving and considering evidence in connection with this
ground.

The lower courts also relied on the exception that external evidence may be considered when received "in the course of hearings
related to the case," which is rooted in the case of Tan v. Director of Forestry (Tan).40 In said case, a hearing was conducted on the
prayer for preliminary injunction where evidence was submitted by the parties. In the meantime, a motion to dismiss was filed
by the defendant, citing as one of the grounds that the petition did not state a cause of action. The trial court resolved the prayer
for the issuance of a writ of preliminary injunction simultaneously with the motion to dismiss. It dismissed the petition for failure
to state a cause of action on the basis of the evidence presented during the hearing for preliminary injuction. On appeal, this
Court ruled that the trial court was correct in considering the evidence already presented and in not confining itself to the
allegations in the petition.

Tan, however, is not on all fours with the present case. First, the trial court therein considered evidence presented during a
preliminary hearing on an injunction and not during a hearing on a motion to dismiss. As discussed, a preliminary hearing on a
motion to dismiss is proscribed when the ground is failure to state a cause of action. The exception of "hearings related to the
case," therefore, pertains to hearings other than the hearing on a motion to dismiss on the ground of failure to state a cause of
action. To reiterate, the ground that the complaint fails to state a cause of action should be tested only on the allegations of facts
contained in the complaint, and no other. If the allegations show a cause of action, or furnish sufficient basis by which the
complaint can be maintained, the complaint should not be dismissed regardless of the defenses averred by the defendants. 41 The
trial court may not inquire into the truth of the allegations, and find them to be false before a hearing is conducted on the merits
of the case.42 If the court finds the allegations to be sufficient but doubts their veracity, the veracity of the assertions could be
asserted during the trial on the merits. 43

Second, Tan noted that the plaintiff had readily availed of his opportunity to introduce evidence during the hearing and, as a
result, was estopped from arguing that the court is limited to the allegations in the complaint. 44 This is in contrast to the present
case, where petitioners steadfastly argued from the beginning that the trial court was limited to the allegations in the complaint.
Petitioners maintained their stance during the preliminary hearing on the affirmative defenses, opting not to file rebuttal
evidence and opposing respondents' formal offer of evidence on the same ground. Having been consistent in their position from
the start, petitioners cannot be estopped from arguing that the trial court was precluded from considering external evidence in
resolving the motion to dismiss.

Third, it was noted in Tan that the documentary evidence given credence by the trial court had effectively been admitted by
stipulation during the hearing,45 and another had been an annex to the complaint,46 both of which are exceptions to the general
rule that external facts cannot be considered. Neither of the said exceptions is availing in the present case. The Court notes that
only the OCT of respondents was attached as an annex to their answer. The June 28, 1919 Decision in the Cadastral case, which
was given considerable weight by the trial court, was not attached and was only presented during the preliminary hearing.

Fourth, Tan ruled that the rigid application of the rules could not be countenanced considering the overriding public interest
involved, namely, the welfare of the inhabitants of the province whose lives and properties would be directly and immediately
imperilled by forest denudation.47 There appears to be no overriding public interest in the present case to justify a similar
relaxation of the rules.

It is of note that although the trial court might not have erred in holding a preliminary hearing on the affirmative defenses of
prescription and res judicata, it is readily apparent from the decisions of the lower courts that no disquisition whatsoever was
made on these grounds. It cannot be denied that evidence in support of the ground of "lack of cause of action" was received and
given great weight by the trial court. In fact, all the evidence given credence by the trial court were only in support of the ground
of "lack of cause of action." This all the more highlights that the trial court erred in receiving evidence to determine whether the
complaint failed to state a cause of action.

Although neither the RTC or the CA ruled on the affirmative defenses of prescription and res judicata, it appears that this case
could not have been dismissed on these grounds. First, an action to quiet title is imprescriptible if the plaintiffs are in possession
of the property,48 which is the situation prevailing in the present case. Second, there appears to be no res judicata nor a violation
of the prohibition against forum shopping considering that Civil Case No. 5487 had been dismissed, without prejudice, years
before petitioners initiated their complaint for quieting of title.

In sum, the trial court erred in dismissing the complaint on the ground of failure to state a cause of action. Evidence should have
been received not during a preliminary hearing under Section 6 of Rule 16, but should have been presented during the course of
the trial. The case should, thus, be remanded to the RTC-Br. 59 for trial on the merits.cralawred

WHEREFORE, the petition is GRANTED. The March 13, 2012 Decision of the Court of Appeals, in CA-G.R. CV No. 92887
is REVERSED and SET ASIDE. The case is ordered REMANDED to the

Regional Trial Court for trial on the merits of the case.

SO ORDERED.chanroblesvirtuallawlibrary
G.R. No. 148748 January 14, 2015

IMELDA, LEONARDO, FIDELINO, AZUCENA, JOSEFINA, ANITA and SISA, all surnamed SYJUCO, Petitioners,
REPUBLIC OF THE PHILIPPINES, Petitioner-Intervenor,
vs.
FELISA D. BONIFACIO and VSD REALTY & DEVELOPMENT CORPORATION, Respondents.

DECISION

LEONARDO-DE CASTRO, J.:

For review on certiorari under Rule 45 of the Rules of Court is the Decision 1 dated February 23, 2001 and Resolution2 dated June
26, 2001 of the Court Appeals in CA-G.R. CV. No. 57777, which affirmed in toto the Decision 3 dated January 9, 1998 of the
Regional Trial Court (RTC), Branch 126 of Caloocan City in Civil Case No. C-366.
The present controversy involves a parcel of land, measuring around 2,835 square meters, which originally formed part of a
wider tract of land, dubbed as the Maysilo Estate (subject land). The factual antecedents, as culled from the records, are as
follows:

Petitioners Imelda, Leonardo, Fidelino, Azucena, Anita, and Sisa, all surnamed Syjuco (collectively referred to as petitioners) are
the registered co-owners of the subject land, located in the then Barrio of Balintawak, Municipality of Caloocan, Province of
Rizal, under Transfer Certificate of Title (TCT) No. T-108530 4 issued by the Register of Deeds of Caloocan City on March 26, 1984.
The subject land is particularly described under petitioners’ certificate of title as follows:

It is hereby certified that certain land situated in the Caloocan, Metro Manila, Philippines, bound and described as follows:

Un terreno (Lote No. 3-B del plano de subdivision Psd-706, parte del Lote No. 23-A, plano original Psu-2345 de la Hacienda de
Maysilo), situado en el Barrio de Balintawak, Municipio de Caloocan, Provincia de Rizal. Linda por el NE. con el Lote No. 3-D del
plano de subdivision; por el SE., con el Lote No. 3-C del plano de subdivision; por el SO. con el Lote No. 7; y por el No. con el Lote
No. 3-A del plano de subdivision. x x x midiendo una extension superficial de DOS MIL OCHOCIENTOS TREINTA Y CINCO METROS
CUADRADOS CON TREINTA DECIMETROS CUADRADOS (2, 835), mas o menos. x x x la fecha de la medicion original 8 al 27 de
Septiembre, 4 al 21 de Octubre y 17-18 de Noviembre de 1911 y la de la subdivision, 29 de Diciembre de 1924. (Consta la
descripcion decinica en el Certificado de Transferencia de Titulo No. 10301)

xxxx

is registered in accordance with the provisions of the Land Registration Act in the name of IMELDA G. SYJUCO; LEONARDO G.
SYJUCO; FIDELINO G. SYJUCO; AZUCENA G. SYJUCO; JOSEFINA G. SYJUCO; ANITA G. SYJUCO; SISA G. SYJUCO, all of legal age,
single, Filipinos, - -

as owner thereof in fee simple, subject to such of the encumbrances mentioned in Section 39 of said Act as may be subsisting,
and to the provisions of Sec. 4, Rule 74 of the Rules of Court with respect to the inheritance left by the deceased Monica
Galauran and Mariano Mesina. (From T.C.T. No. 12370)

Petitioners have been in open, continuous, and uninterrupted possession of the subject land, by themselves or through their
predecessors-in-interest, since 1926. Petitioners traced back their title over the subject land to TCT No. 10301 issued on February
26, 1926 to Monica Jacinto Galauran. Thereafter, TCT No. 10301 was replaced by TCT No. 8685 under the names of Avelina
Baello, Felisa Baello, Dolores Baello, Eduardo Mesina, and Fausto Galauran (Avelina Baello, et al.). TCT No. 8685 was then
replaced by TCT No. 12370 under the names of the brothers Martin V. Syjuco (Martin) and Manuel V. Syjuco (Manuel) pursuant
to a Deed of Sale of Real Estate5dated February 7, 1949 executed by Avelina Baello, et al. in favor of the siblings Martin and
Manuel. TCT No. 12370 was, in turn, replaced by TCT No. 4856 6 issued on July 1, 1964 in Martin’s name alone in accordance with
a Partition Agreement7 executed by the brothers on June 16, 1964. Upon Martin’s death, petitioners inherited the subject land,
and following the extrajudicial partition they executed on June 27, 1976, they registered said land in their names, as co-owners,
under TCT No. T-108530 issued on March 26, 1984. Petitioners and their predecessors-in-interest have been paying the real
property taxes over the subject land since 1949.8

Among the annotations on TCT No. T-108530 are two encumbrances constituted by petitioners and/or their predecessors-in-
interest on the subject land, particularly: (1) a lease agreement dated September 24, 1963, in favor of Manufacturer’s Bank and
Trust Company (Manufacturer’s Bank), over a portion of the subject land, with the condition that the buildings which the lessee
had constructed thereon shall become the property of the lessor/s after the expiration of the lease agreement; and (2) another
lease agreement dated December 20, 1971, in favor of a certain Chan Heng, over the remaining portion of the subject land. 9

Sometime in 1994, however, petitioners learned that a broker named Exequiel Fajardo, through a Letter 10 dated March 9,
1994,offered for sale the subject land along with the improvements thereon to a certain Luis Ong, giving the following
description of the property and terms of the offer:

AREA: 2,835.30 square meters

Lot No. 23-A-4-B-2A-3B, PSD 706, TCT–265778,
Register of Deeds, Kalookan City
Location: Kalookan City (beside LRT Station)
Owner: Felisa D. Bonifacio
The terms of this offer are as follows:
Price: ₱35,000.00 per square meter
 Payment Terms: 50% downpayment;
Balance subject to negotiation

Petitioners found out that the purported owner of the subject land, respondent Felisa D. Bonifacio (Bonifacio), was the sub-
lessee of Kalayaan Development Corporation, which, in turn, was the sub-lessee of Manufacturer’s Bank, which was the direct
lessee of petitioners. Petitioners also learned that respondent Bonifacio was able to register the subject land in her name under
TCT No. 265778, which was issued on March 29, 1993 by the Register of Deeds of Caloocan City. Respondent Bonifacio’s
certificate of title described the subject land as follows:

It is hereby certified that certain land situated in the Caloocan City, Philippines, bounded and described as follows:

A parcel of land (Lot 23-A-4-B-2-A-3-B of the subd. plan, Psd-706, L.R.C. Rec.No. ), situated in Balintawak, Caloocan Rizal,
Bounded of the E., along line 1-2 by Lot 23-A-4-B-2-A-3-D,on the SE., along line 2-3 by lot 23-A-4-B-2-A-3-C; both of the subd.
plan on the SW., along line 3-4 by lot 23-A-4-B-2-A-6; and on the NW., along line 4-1 by Lot 23-A-4-B-2-A-3-A of the subd. plan.
Beginning at a point marked "1" on plan, being N. 71 deg. 17’E., 1,285.85 m. from BLLN No. 1, Caloocan thence; S. 01 deg. 46’W.,
27.70 m. to point 2; S 64 deg. 30’W., 105.15 m. to point 3; N 23 deg. 12’ W., 26.39 m. to point 4; N. 65 deg. 22’E., 116.78 m. to pt.
of beginning, containing an area of TWO THOUSAND EIGHT HUNDRED THIRTY FIVE SQ. METERS AND THIRTY SQ. DECIMETERS
(2,835.30). All pts. referred to are indicated on the plan and are marked on the ground by old pts. Bearings true; date of original
survey, Date of subd. survey, Dec. 29, 1922, is registered in accordance with the provisions of the Property Registration Decree in
the name of FELISA D. BONIFACIO, of legal age, Filipino, widow, -

as owner thereof in fee simple, subject to such of the encumbrances mentioned in Section 44 of said Decree as may be
subsisting[.] x x x.11

Respondent Bonifacio’s TCT No. 265778 was issued pursuant to an Order 12 dated October 8, 1992 of the RTC of Caloocan City,
Branch 125, in L.R.C. Case No. C-3288, entitled In the Matter of Petition for Authority to Segregate an Area of 5,680.1 Square
Meters from Lot 23-A-4-B-2-A-3-B, PSD-706 (PSU-2345) of Maysilo Estate and Issuance of Separate Certificate of Title in the
Name of Felisa D. Bonifacio. RTC-Branch 125 granted respondent Bonifacio’s petition for segregation because:

From the evidence presented, the Court finds that in Case No. 4557 for Petition for Substitution of Names, in the then Court of
First Instance of Rizal, Branch 1, the then Presiding Judge Cecilia Muñoz Palma, issued an Order dated May 25, 1962 (EXHIBIT
"N") substituting Maria de la Concepcion Vidal as one of the registered owners of several parcels of landforming the Maysilo
Estate and covered by, among others, Original Certificate of Title No. 994 of the Register of Deeds of Rizal with among others
Eleuteria Rivera Bonifacio to the extent of 1/6 of 1-189/1000 per cent of the entire Maysilo Estate. On January 29, 1991,
Eleuteria Rivera Bonifacio executed in favor of Felisa D. Bonifacio, herein petitioner, a Deed of Assignment (EXHIBIT "M")
assigning all her rights and interests over Lot 23-A-4-B-2-A-3-A, Psd-706 and Lot 23-A-4-B-2-A-3-B, Psd-706, both lots being
covered by O.C.T. 994 of the Register of Deeds of Rizal. That even prior to the execution of the Deed of Assignment but while
negotiations with Eleuteria Rivera Bonifacio were going on, petitioner already requestedthe Lands Management Sector,
Department of Environment and Natural Resources, National Capital Region, to prepare and issue the Technical Descriptions of
the two lots subject of this petition. As requested by petitioner, Elpidio T. de Lara, Chief, Technical Services Section, Lands
Management Sector, DENR-NCR, issued on June 20, 1990, two technical descriptions (EXHIBITS "J" and "K") covering the two lots.
After the issuance of the technical descriptions, the petitioner requested Geodetic Engineer Jose R. Rodriguez to prepare a sketch
plan of the two lots subject of this petition. As requested, Engr. Rodriguez prepared a sketch plan (EXHIBIT "L") based from
Exhibits "J" and "K" which was submitted to the Lands Management Services, formerly Bureau of Lands, for verification and
checking. That Mr. Benjamin V. Roque, Chief, Topographic and Special Map Section, Land Management Services, formerly Bureau
of Lands, certified on July 31, 1992 that the sketch plan (EXHIBIT "L") is a true and correct plan of Lots 23-A-4-B-2-A-3-A and 23-
A-4-B-2-A-3-B, both on Psd-[706]. (Emphasis supplied.)

Hence, RTC-Branch 125 decreed in the same Order:

WHEREFORE, in view of all the foregoing, the Court hereby GRANTS the petition and orders the segregation of Lots 23-A-4-B-2-A-
3-A and 23-A-4-B-2-A-3-B both on Psd-[706] from Original Certificate of Title No. 994 of the Register of Deeds of Rizal in favor of
the herein petitioner. Upon the finality of this order and the payment of the prescribed fees if any and presentation of the
clearances of said lots, the Register of Deeds of Caloocan City is ordered to issue a new transfer certificate of title in the name of
herein petitioner Felisa D. Bonifacio over Lots 23-A-4-B-2-A-3-A and 23-A-4-B-2-A-3-Bboth on Psd-[706] of O.C.T. 994 of the
Register of Deeds of Rizal.13

For unexplained reasons, the Register of Deeds of Caloocan City issued TCT No. 265778 to respondent Bonifacio on March 29,
1993 even before RTC-Branch 125 declared its Order dated October 8, 1992, granting respondent Bonifacio’s petition for
segregation, final and executory on April 6, 1993. 14
Civil Case No. C-366 before
RTC-Branch 126

To protect their rights and interest over the subject land, petitioners lodged a Petition 15 on July 28, 1994, docketed as Civil Case
No. C-366 before RTC-Branch 126, Kalookan City, praying for the declaration of nullity and cancellation of respondent Bonifacio’s
TCT No. 265778 over the subject land in view of petitioners’ subsisting TCT No. T-108530 over the very same property. In an
Order16 dated July 28, 1994, RTC-Branch 126 deemed Civil Case No. C-366 as a special civil action for quieting of title and not an
ordinary civil action for recovery of ownership of land.

Subsequently, petitioners discovered that respondent Bonifacio sold the subject land in favor of respondent VSD Realty &
Development Corporation (VSD Realty), and that TCT No. 265778 in the name of respondent Bonifacio had already been
cancelled and replaced by TCT No. 28531317 in the name of respondent VSD Realty on September 12, 1994. As a result,
petitioners filed on April 25, 1995 an Amended Petition, 18 impleading respondent VSD Realty in Civil Case No. C-366.

Petitioners contended before RTC-Branch 126 that although TCT No. T-108530 of petitioners, on one hand, and TCT No. 265778
of respondent Bonifacio and TCT No. 285313 of respondent VSD Realty, on the other hand, contained different technical
descriptions, said certificates of title actually pertained to one and the same property. According to petitioners, respondents’
certificates of title over the subject land could have only been obtained fraudulently given that:

a) No subsequent survey of the Lot could have been obtained, approved by the Director of Lands, and presented by the
respondent as there exists an original isolated survey thereto for which Transfer Certificate of Title No. 10301 covering
the said land was issued as early as 26 February 1926 in the name of Monica Jacinto Galauran, married to Mariano
Mesina.

b) TCT No. 265778 was issued in the name of the respondent Felisa Bonifacio on [29] March 1993 before the issuance
on 6 April 1993 by the Branch Clerk of Court (RTC Branch 125 in L.R.C. No. C-3288) of a Certificate of Finality of the
aforesaid Order dated 8 October 1992.

c) TCT No. 265778 was issued to Felisa Bonifacio on 29 March 1993 without the Register of Deeds of Kalookan City
requiring the presentation of the owner’s duplicate copy of O.C.T. No. 994. 19

Respondent Bonifacio filed her Answer with Compulsory Counterclaim 20 on October 11, 1994. She denied knowledge of
petitioners’ TCT No. T-108530 and maintained that the technical description of the land covered by petitioners’ TCT No. T-108530
is different from that in her TCT No. 265778. Respondent Bonifacio also averred that the technical description of the land
covered by her TCT No. 265778 had been verified and approved by the Land Management Services of the Department of
Environment and Natural Resources (DENR); that she acquired a valid title, TCT No. 265778, over the subject land pursuant to a
court order in a land registration case; and that Civil Case No. C-366 was a collateral attack on the validity of her TCT No. 265778.
Respondent VSD Realty, in its Manifestation21 filed on June 31, 1995, adopted respondent Bonifacio’s aforementioned Answer.

In the Pre-Trial Order22 dated February 23, 1995 of RTC-Branch 126, the parties agreed on the following stipulation of facts and
issues:

STIPULATION OF FACTS:

1. That the petitioners are in possession of the lot in question; and

2. That the respondent is never in possession of the lot in question.

ISSUES:

1. Whether or not the Technical Description is one and the same as appearing on both titles; and

2. Whether or not the TCT No. 265778 of the respondent is a valid title.

Thereafter, trial ensued.

Petitioners presented several documentary exhibits23 and the testimonies of Leonardo de Guzman Syjuco, one of the
petitioners;24 Renato T. Malindog, Land Registration Examiner of the Caloocan City Registry of Deeds; 25 and Engineer (Engr.)
Elpidio T.de Lara (De Lara), Chief of Technical Services Section, Land Management Sector(LMS), DENR. 26 In its Order27 dated
November 29, 1995, RTC-Branch 126 admitted all the evidence presented by petitioners.
RTC-Branch 126 summarized petitioners’ evidence as follows:

Leonardo Syjuco testified that he, together with the other petitioners in this case, inherited the subject property from their late
father, Martin Syjuco, as shown in Entry No. 15033/T-No. 108530 annotated in TCT No. T-108530 (Exhibit "A"). His father and his
uncle, Manuel Syjuco, in turn acquired the same from the Baello Family through a Deed of Real Estate (Exhibit "H"). Thereafter,
Martin and Manuel executed a deed of partition (Exhibit "I") and their father was issued TCT No. 4856 (Exhibit "G") over the
subject property. He has been paying the tax declaration on said property as evidenced by tax receipts (Exhibits "J" to "J-14").
They then leased the property to Manufacturers Bank who was the one who built the improvements on the same with
stipulation that they will become the owners of these improvements after the expiration of the lease. They also subleased the
property to Kalayaan Development Corporation (KDC, for short) and respondent Bonifacio is a lessee of KDC. One of their tenants
informed him that their property was being offered for sale and so he instituted measures to protect their interest. He also
discovered the existence of TCT No. T-265778 (Exhibit "C") in the name of respondent Bonifacio which he claims to be void as
there can be no segregation of a property that was previously segregated. Witness admits having executed a lease in favor of a
certain John Hay. He likewise admitted that the technical description appearing on the property lease to John Hay is not the
same as the technical description appearing on Exh. "A." He claims that when they inherited the property, the technical
description was already recorded thereon and it was the Registry of Deeds who placed the same on the property.

Renato T. Malindog, an examiner of the Register of Deeds of Kalookan City, testified that prior to the issuance of TCT No. 265778,
derivative documents were filed before their office such as the Court Order dated October 8, 1992 in L.R.C. Case No. C-3288; the
Certificate of Finality to said Order dated April 6,1993; the subdivision plan to Lot 23-A-4-B-2-A-3-A and Lot 23-A-4-B-2-A-3-B also
PSD-706 with Plan No. SK-007501-00024-D and annexed to said documents were the technical description for Lot 23-A-4-B-2-A-
3-A, PSD-706 and the technical description for Lot 23-A-4-B-2-A-3-B also of PSD-706. Based on their record, documents were
[received] regarding the order of finality but there was no showing that the tax clearance [was] registered in their office.
Likewise, based on the document presented to them, the office who issued the technical description was from the Department
of Environment and Natural Resources, Land Management Sector, and one Teodoro E. Mundo, Jr. is the Chief Survey Division of
said office.

Elpidio T. de Lara, Chief of the Technical Services Section of the Department of Agrarian and Natural Resources, affirms to having
certified to the technical description [o]n July 9, 1990, referred to as Lot 23-A-4-B-2-A-3-B of subdivision plan PSD 706, based on
a request by Felisa Bonifacio. He made the "Note: Subject for field survey" on Exhibit "M" so that the corresponding technical
description be identified in the plan. Before issuing the technical description for the subject lot, he complied with the processes
of having the technical description researched from their records. From their record, he had not issued a technical description for
the subject lot and they have no record in their office of such. The corresponding B-37 technical description attached to the letter
request came from the Land Management Bureau, which is the survey of the technical description. At the time the request was
made until the time the certification was issued, he did not meet Felisa Bonifacio and said request was filed in their office and
sent to the technical services department.28

Respondents, in turn, presented documentary exhibits29 and called to the witness stand Geodetic Engr. Evelyn G. Celzo (Celzo) of
the Land Management Services, DENR;30 Fernando D. Macaro (Macaro), Land Registration Examiner of the Caloocan City Register
of Deeds;31 and Attorney (Atty.) Kaulayao V. Faylona, Director and Corporate Secretary of respondent VSD Realty. 32

RTC-Branch 126 summed-up respondents’ evidence as follows:

Evelyn G. Celzo, a geodetic engineer from the Land Management Services, testified that she was ordered to conduct a
verification survey of Lot 23-A-4-B-2-A-3-B of PSD 706 by their Regional Technical Director, Roquesa de Castro. The survey was
conducted on August 23, 1994 and its result [was] contained in a report dated April 17, 1995 (Exhibit "4") which she prepared
and submitted. She and her team personally went to the place and found out that two (2) stores, namely, Fairy Mart and Zenco
Footstep were the present occupants of the lot. They likewise informed the adjoining lots that they were going to execute a
verification survey. BPM 119 in Kalookan Cadastre was the reference point to determine whether the lot was really in that place.
BPM 153, Kalookan Cadastre were used as common points to identify the technical description in Felisa’s lot. However, insofar as
Exhibit "A" is concerned, the technical description of said property did not contain these common points. The DENR, NCR, has
record of all technical descriptions approved and verified in said office. She points out that only one (1) technical description is
allowed for a particular lot. In conducting the survey verification, the certified TCT was furnished to them by Felisa Bonifacio,
together with the relocation survey filed at the Technical Reference Section. As to the adjoining lots, they secured the map of the
Maysilo Estate Plan, under the relocation survey, they found out that the lot belonged to Felisa Bonifacio and the technical
description is the same as the technical description submitted to her. Her verification survey was approved as reflected in the
original plan from the Bureau of Land Verification Survey (Exhibit "7"). She also stated that before the survey, she conducted a
research as to the origin of the technical description from her office and from the Bureau of Lands in Binondo but there were no
available record. Neither was there any record about the original owner. When the certified copy of TCT No. 265778 was given to
her, there were no annotations of adverse claims and so she did not anymore inquire from the Registry of Deeds whether there
were new annotations made thereon.
Atty. Kaulayao V. Faylona, a director and Corporate Secretary of VSD Realty Corporation, testified that a real estate broker offered
for sale to VSD two (2) lots along Avenida and occupied by Fairmart and Uniwide Sales, Inc. Among the documents shown to him
by the seller were the Order of Judge Geronimo S. Mangay, of the Regional Trial Court of Kalookan City, Branch 125 (Exhibit "2"),
as well as the Transcript of Case No. C-3288 (Exh. "3"). While he found the issuance of said Order by the Court regular, he also
requested for a verification survey from the seller’s group in order to make sure that the lot appearing in the technical
description is also the lot actually being occupied by the buildings already mentioned thereon. The actual verification survey was
conducted by the DENR through Engr. E. Celzo as evidenced by a report (Exh. "4") submitted for the purpose. Moreover, a
verification plan (Exh. "7") approved by the DENR was likewise prepared in connection with the verification survey. He even
personally went to the sala of Judge Mangay and verified from the then Deputy Branch Clerk of Court, the authenticity of the
transcript that was given to him which the said Branch Clerk of Court confirmed as having been issued by said court. He did not
however go over the petition filed by Felisa Bonifacio since what was important was that the title was issued in the land
registration proceedings. He knew that Felisa was not in possession of the said property as it was being occupied by business
establishments who were all not owners of the lot. As to payments of realty taxes due on the property, he claims that the title
would not have been issued in the first place [and] the taxes [would] not [have] been previously paid. Insofar as VSD is
concerned, the corporation was up-to-date in its payment of realty taxes over their property. He stresses that there is no other
owner of the lot in question except Felisa Bonifacio because there was only one(1) lot with that technical description. The said
approved technical description appearing on Felisa’s lot was issued by the DENR which is actually the custodian of the technical
descriptions of lands under the Land Registration System, which was confirmed by Mr. Elpidio T. de Lara, complainants’ witness. 33

Macaro’s testimony was not included in the foregoing précis of respondents’ evidence by RTC-Branch 126.Macaro affirmed
before RTC Branch 126 the existence of respondent Bonifacio’s TCT No. 265778. Macaro further testified that the standard
operating procedure at the Caloocan City Registry of Deeds was to require the presentation of the certification stating that the
court order directing issuance of the certificate of title had already become final and executory, before actually issuing said
certificate of title; but he was unable to explain how in this case respondent

Bonifacio’s TCT No. 265778 was issued on March 29, 1993, before the Certificate of Finality of the Order dated October 8, 1992 in
Civil Case No. C-3288 was issued by RTC-Branch 125 on April 6, 1993.

On January 9, 1998, RTC-Branch 126 rendered its Decision in Civil Case No. C-366, the dispositive portion of which reads:

WHEREFORE, in the light of the foregoing considerations, judgment is hereby rendered as follows:

1) Dismissing the petition of the petitioners;

2) Declaring that the technical description described in TCT No. 108530 by the petitioners is not the same as the
technical description on [respondent] Bonifacio’s title (TCT No. 265778, now TCT No. 285313);

3) Declaring that TCT No. 265778 is a valid title and considering that respondent VSD’s title, T-285313, replaced the
former title, VSD is hereby declared the owner of the land in question, that is, Lot 23-A-4-B-2-A-3-B of PSD 706;

4) For petitioners to pay attorney’s fees and the costs of this suit. 34

Comparing the technical descriptions in petitioners’ TCT No. T-108530 and respondents’ TCT Nos. 265778 and 285313, RTC-
Branch 126 noted the bare differences in the land areas and lot numbers contained therein, and concluded that said technical
descriptions were not one and the same and that petitioners’ TCT No. T-108530 did not pertain to the same parcel of land
described in respondent Bonifacio’s TCT No. 265778. RTC Branch 126 also pointed out that petitioners’ own witness, Engr. De
Lara, testified that his office, Technical Services Section of the DENR, had not previously issued the technical description
appearing on respondent Bonifacio’s TCT No. 265778. Engr. De Lara’s certification of the technical description of respondent
Bonifacio’s property was issued for the first time on July 9, 1990 only "after complying with all the legal processes necessary for
the purpose, such as, among other things, conducting a research from their office records which showed that no such technical
description on the subject property was previously issued and further stating that the B-37 technical description came from the
Land Management Bureau which was the survey of the technical description." 35 RTC-Branch 126 further cited the testimony of
Engr. Celzo of Land Management Services who conducted the verification survey during which it was revealed that "while
common points were used in identifying the technical description in TCT No. 265778, no such common points existed in the
technical description appearing on petitioners[’] title." RTC-Branch 126 saw no reason to doubt the testimonies of Engrs. De Lara
and Celzo consistent with the rule that government officials are presumed to perform their functions with regularity and strong
evidence is necessary to rebut this presumption.

RTC-Branch 126 also categorically upheld the validity of respondent Bonifacio’s TCT No. 265778 as it was issued pursuant to the
Order dated October 8, 1992 of the Caloocan City RTC-Branch 125. RTC-Branch 126 said that it could not question the order of a
co-equal court and brushed aside petitioners’ claim of continuous possession of the subject property because such fact alone
could not defeat respondents’ title over said property registered under the Torrens system. Absent any showing by clear and
convincing proof that TCT No. 265778 of respondent Bonifacio, now TCT No. 285313 of respondent VSD Realty, was irregularly
issued, RTC-Branch 126 accorded said titles the conclusive presumption of validity.

CA-G.R. CV. No. 57777 before the

Court of Appeals

Petitioners filed an appeal36 before the Court of Appeals, docketed as CA-G.R. CV. No. 57777, with the following sole assignment
of error:

THE LOWER COURT ERRED IN NOT ANNUL[L]ING [RESPONDENTS’] TITLES WHICH OVERLAP THE EXISTING TITLE IN THE NAMES
OFTHE PETITIONERS.37

Petitioners asserted that the technical description of the land in their TCT No. T-108530 and that in respondents’ TCT Nos.
265778 and 285313 pertain to one and the same land. Petitioners argue that RTC-Branch 126 failed to appreciate the probative
value of Engr. De Lara’s testimony on this particular issue. According to petitioners, Engr. De Lara’s certification dated July 9, 1990
on the correctness of the technical description of Lot 23-A-4-B-2-A-3-B, PSD 706, was based merely on the "B-37 survey"
attached to respondent Bonifacio’s letter-request, hence, Engr. De Lara’s certification included a notation "[s]ubject for field
survey" since he did not know the location of the land referred to by the technical description. The "B-37 survey" or the
subdivision plan of PSD 706 was neither presented before RTC-Branch 126 in this case nor before RTC-Branch 125 in Civil Case
No. C-3288 (respondent Bonifacio’s Petition for Segregation 38 ); thus, petitioners contended that there was no evidence as to
"when the survey was made, under whose name the survey was made, and as to whether or not the said survey had the
requisite government approval."39 Petitioners added that it was incorrect for RTC-Branch 126 to conclude that Engr. De Lara’s
office had never issued any technical description pertaining to the subject land prior to July 9, 1990, and what Engr. De Lara
actually said was that there was no record in his office of the technical description of the subject land as appearing in petitioners’
TCT No. T-108530.Petitioners also maintained that the Survey Order dated August 22, 1994 and the Verification Plan of Lot 23-A-
4-B-2-A-3-B, PSD 706, dated April 28, 1995 had no probative value as (1) said Survey Order was not authenticated; (2) said Survey
Order was incomplete and uncertain as it did not specify the lot to be surveyed, its location, and its technical description; and (3)
the verification survey was conducted only on August 23, 1994, after respondent Bonifacio’s TCT No. 265778 was issued on
March 29, 1993, consequently, said survey could not validate the irregular issuance of TCT No. 265778.

Additionally, petitioners alleged the following irregularities in the issuance of respondent Bonifacio’s TCT No. 265778:

(1) Civil Case No. C-3288, respondent Bonifacio’s Petition for Segregation, is rooted in a Deed of Assignment of the
subject land purportedly executed on January 29, 1991 by Eleuteria Rivera Bonifacio in favor of respondent Bonifacio,
but said Deed merely copied the technical description of the land issued and certified on June 19, 1990 upon the
request of respondent Bonifacio herself.

(2) Respondent Bonifacio merely attached to her Petition for Segregation in Civil Case No. C-3288 a sketch plan of the
subject land, not an approved survey or subdivision plan.

(3) Respondent Bonifacio stated in her Petition for Segregation in Civil Case No. C-3288 that her and her transferor’s
possession of the subject land was "open, public, and notorious without any known claimants[,]" 40 but she later
admitted that she had never been in possession of the said property.

(4) Respondent Bonifacio attached to her Petition for Segregation a real property tax computation sheet for the subject
property which was in the name of Martin V. Syjuco, who was petitioners’ predecessor-in-interest. 41

(5) Respondent Bonifacio obtained TCT No. 265778 over the subject property on March 29, 1993 whereas the order
authorizing the issuance of said certificate of title became final and executory only on April 6, 1993.

(6) The Register of Deeds issued TCT No. 265778 to respondent Bonifacio without requiring the presentation of Original
Certificate of Title (OCT) No. 994,which covered the vast land from whence respondent Bonifacio’s property was
purportedly segregated, and the requisite tax clearance in respondent Bonifacio’s name.

Respondents asseverated that the technical descriptions contained in their TCT Nos. 265778 and 285313, on one hand, and in
petitioners’ TCT No. T-108530, on the other, do not pertain to the same land; that respondent Bonifacio’s TCT No. 265778 was
issued pursuant to a valid court order by RTC-Branch 125 in Civil Case No. C-3288; and that petitioners’ Civil Case No. C-366
before RTC-Branch 126 was a collateral attack on the validity of respondents’ titles.
In its Decision dated February 23, 2001, the Court of Appeals dismissed petitioners’ appeal and affirmed in toto the Decision
dated January 9, 1998 of RTC-Branch 126 in Civil Case No. C-366. Aside from essentially adopting the ratiocination in the
appealed judgment of RTC-Branch 126, the Court of Appeals also espoused respondents’ argument that Civil Case No. C-366,
instituted by petitioners before RTC-Branch 126, was a collateral attack on the validity of respondent Bonifacio’s TCT No. 265778,
in violation of Section 48 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree. The appellate
court, comparing the parties’ respective certificates of title, further ruled that:

[A] careful scrutiny of TCT Nos.108530 and 265778 revealed relevant similarities. Both TCTs originate from OCT No. 994 pursuant
to Decree No. 36455, Record No. 4429. TCT No. 108530 was first originally registered on May 03, 1917, in contrast to Bonifacio’s
title (TCT No. 265778) which was [registered] in 1912.

In view of this, we quote the ruling enunciated by the court in Metropolitan Waterworks Sewerage System v. Court of Appeals
and reiterated in the cases of Heirs of Luis J. Gonzaga v. Court of Appeals and Mascariñas v. Court of Appeals.

"Where two certificates (of title) purport to include the same land, the earlier in date prevails. x x x. In successive registrations,
where more than one certificate is issued in respect of a particular estate or interest in land, the person claiming under the prior
certificate is entitled to the estate or interest; and the person is deemed to hold under the prior certificate who is the holder of,
or whose claim is derived directly or indirectly from the person who was the holder of the earliest certificate issued in respect
thereof."

Hence, in point of priority in issuance, the title of Bonifacio prevails over that of the [petitioners]. Since, the land in question has
already been registered under OCT 994, in the year 1912, the subsequent registration of the same land on May 03, 1917 is null
and void.42 (Citations omitted.)

The Court of Appeals lastly pointed out that petitioners’ possession of the subject land cannot defeat respondent Bonifacio’s title
thereto:

While we recognize the fact that the [petitioners] have been in 44 years of continuous possession, still, we should not lose sight
of the fact that [respondent] Bonifacio is an owner of an earlier issued title. The imprescriptibility of Bonifacio’s title cannot be
defeated by the [petitioners’] continuous possession of the questioned lot. To hold otherwise, the efficacy of the conclusiveness
of the certificate of title, which the Torrens System seeks to insure, would be futile and nugatory. 43 (Citations omitted.)

The Court of Appeals concluded that since respondent Bonifacio is the owner of the subject land, validly registered in her name,
she is within her rights in selling said property to respondent VSD Realty, making the latter’s TCT No. 285313 also valid.

Hence, the present petition for review.

Petitioners reiterate their position that their TCT No. T-108530 and respondents’ TCT Nos. 265778 and 285313 pertain to one and
the same land, and that the latter titles have been fraudulently obtained. Petitioners also aver that their undisturbed possession
of the subject property gives them a continuing right to seek the aid of a court to ascertain and determine the nature and effect
of respondents’ adverse claim on the subject land.

In addition, petitioners pray for this Court to take judicial notice of supervening events relative to the indiscriminate issuance or
proliferation of fake titles derived from OCT No. 994 covering the Maysilo Estate. They point out that the Department of Justice
(DOJ) and the Senate Committees on Justice and Human Rights, Urban Planning, and Housing and Resettlement, already
conducted separate investigations of this serious land title anomaly and had submitted their respective reports on the matter.
The DOJ Committee Report dated August 28, 1997 and Senate Committee Report No. 1031 dated May 25, 1998 validated OCT
No. 994 registered on May 3, 1917; declared OCT No. 994 registered on April 19, 1917 as nonexistent; and recommended the
cancellation of all titles derived from OCT No. 994 registered on April 19, 1917. Petitioners, thus, argue that respondent
Bonifacio’s title, which originated from OCT No. 994 registered in 1912, is null and void as the only authentic OCT No. 994 is the
one issued pursuant to Decree No. 36455 originally registered on May 3, 1917.

In their Comment, respondents stand by the propriety of the Decision dated February 23, 2001 of the Court of Appeals in CA-
G.R. CV. No. 57777 and the Decision dated January 9, 1998 of RTC-Branch 126 in Civil Case No. C-366. Respondents also exhort
this Court not to take judicial notice of the DOJ and Senate committee reports because those are irrelevant to the present case as
the true date of registration of OCT No. 994 has never been an issue herein. At any rate, respondents insinuate that there was a
mistake in the indication in the title of respondent Bonifacio that it originated from OCT No. 994 registered in 1912, claiming that
the same "must have been [caused by either] a clerical error or… a mental lapse."

RULING
The petition is meritorious.

On the propriety of petitioners’

action to quiet title over the subject
land.

The Court, at the outset, finds untenable the contention that the action instituted by petitioners is a prohibited collateral attack
on the certificate of title of respondents over the subject land. Section 48 of Presidential Decree No. 1529 44 states:

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

To determine whether an attack on a certificate of title is direct or indirect, the relevance of the object of the action instituted
and the relief sought therein must be examined. The rule was explained in Catores v. Afidchao 45 as follows:

When is an action an attack on a title? It is when the object of the action or proceeding is to nullify the title, and thus challenge
the judgment pursuant to which the title was decreed. The attack is direct when the object of an action or proceeding is to annul
or set aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action to
obtain a different relief, an attack on the judgment is nevertheless made as an incident thereof. (Emphasis supplied, citation
omitted.)

The instituted action in this case is clearly a direct attack on a certificate of title to real property. In their complaint for quieting of
title, petitioners specifically pray for the declaration of nullity and/or cancellation of respondents’ TCT Nos. 265778 and 285313
over the subject land. The relief sought by petitioners is certainly feasible since the objective of an action to quiet title, as
provided under Article 476 of the Civil Code of the Philippines, is precisely to quiet, remove, invalidate, annul, and/or nullify" a
cloud on title to real property or any interest therein by reason of any instrument, record, claim, encumbrance or proceeding
which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be
prejudicial to said title."

The Court also finds bereft of merit the contentions that petitioners’ action to quiet title had already prescribed and/or that the
titles of respondents over the subject land have already become incontrovertible and indefeasible based on Section 32 of
Presidential Decree No. 1529. Section 32 of Presidential Decree No. 1529 states:

Section 32. Review of decree of registration; Innocent purchaser for value.- The decree of registration shall not be reopened or
revised by reason of absence, minority, or other disability of any person adversely affected thereby, nor by any proceeding in any
court for reversing judgments, subject, however, to the right of any person, including the government and the branches thereof,
deprived of land or of any estate or interest therein by such adjudication or confirmation of title obtained by actual fraud, to file
in the proper Court of First Instance a petition for reopening and review of the decree of registration not later than one year
from and after the date of the entry of such decree of registration, but in no case shall such petition be entertained by the court
where an innocent purchaser for value has acquired the land or an interest therein, whose rights may be prejudiced. Whenever
the phrase "innocent purchaser for value" or an equivalent phrase occurs in this Decree, it shall be deemed to include an
innocent lessee, mortgagee, or other encumbrancer for value.

Upon the expiration of said period of one year, the decree of registration and the certificate of title issued shall become
incontrovertible. Any person aggrieved by such decree of registration in any case may pursue his remedy by action for damages
against the applicant or any other persons responsible for the fraud. (Emphases added.)

The above-quoted rule has well-settled exceptions.

It is an established doctrine in land ownership disputes that the filing of an action to quiet title is imprescriptible if the disputed
real property is in the possession of the plaintiff. One who is in actual possession of a piece of land claiming to be owner thereof
may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule
being that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine
the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in
possession.46

In this case, petitioners have duly established during the trial that they and/or their predecessors-in-interest have been in
uninterrupted possession of the subject land since 1926 and that it was only in 1994 when they found out that respondent
Bonifacio was able to register the said property in her name in another title. It was also only in 1995 when petitioners learned
that respondent Bonifacio was able to sell and transfer her title over the subject land in favor of respondent VSD Realty.
Moreover, the rule on the incontrovertibility or indefeasibility of title has no application in this case given the fact that the
contending parties claim ownership over the subject land based on their respective certificates of title thereon which originated
from different sources. Certainly, there cannot be two or even several certificates of title on the same parcel of real property
because "a land registration court has no jurisdiction to order the registration of land already decreed in the name of another in
an earlier land registration case" and "a second decree for the same land would be null and void, since the principle behind
original registration is to register a parcel of land only once." 47 The indefeasibility of a title under the Torrens system could be
claimed only if a previous valid title to the same parcel of land does not exist. Where the issuance of the title was attended by
fraud, the same cannot vest in the titled owner any valid legal title to the land covered by it; and the person in whose name the
title was issued cannot transmit the same, for he has no true title thereto. This ruling is a mere affirmation of the recognized
principle that a certificate is not conclusive evidence of title if it is shown that the same land had already been registered and
that an earlier certificate for the same land is in existence. 48

Accordingly, petitioners’ filing of an action to quiet title over the subject land is in order.

On the propriety of remanding this

case for further proceedings before
the Court of Appeals.

In VSD Realty & Development Corporation v. Uniwide Sales, Inc., 49 this Court remanded the case before the Court of Appeals,
citing Manotok Realty, Inc. v. CLT Realty Development Corporation, 50 and held:

In the main, respondent Baello contends that the Court erred in not declaring petitioner VSD’s TCT No. T-285312 as null and void,
considering that it is derived from Felisa Bonifacio’s TCT No.

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

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

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

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

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

In fact, the Court had actually resorted to referring a factual matter pending before it to the Court of Appeals. In Republic v. Court
of Appeals, this Court commissioned the former Thirteenth Division of the Court of Appeals to hear and receive evidence on the
controversy, more particularly to determine "the actual area reclaimed by the Republic Real Estate Corporation, and the areas of
the Cultural Center Complex which are ‘open spaces’ and/or ‘areas reserved for certain purposes,’ determining in the process the
validity of such postulates and the respective measurements of the areas referred to." The Court of Appeals therein received the
evidence of the parties and rendered a "Commissioner’s Report" shortly thereafter. Thus, resort to the Court of Appeals is not a
deviant procedure.

The provisions of Rule 32 should also be considered as governing the grant of authority to the Court of Appeals to receive
evidence in the present case. Under Section 2, Rule 32 of the Rules of Court, a court may, motu proprio, direct a reference to a
commissioner when a question of fact, other than upon the pleadings, arises upon motion or otherwise, in any stage of a case, or
for carrying a judgment or order into effect. The order of reference can be limited exclusively to receive and report evidence only,
and the commissioner may likewise rule upon the admissibility of evidence. The commissioner is likewise mandated to submit a
report in writing to the court upon the matters submitted to him by the order of reference. In Republic, the commissioner’s
report formed the basis of the final adjudication by the Court on the matter. The same result can obtain herein." 51 (Emphases
added.)

The Court notes, however, that several matters have already transpired during the pendency of this case that bear considerable
relation in the resolution of the main question of which of the respective titles of the parties over the subject land is valid.

Firstly, the Court observes that the certification as indicated in petitioners’ title, which the latter submitted during the trial, shows
that it originated from OCT No. 994 registered on May 3, 1917, thus:

It is further certified that said land was originally registered on the 3rd day of May, in the year nineteen hundred and seventeen,
in the Registration Book of the Office of the Register of Deeds of Rizal, Volume A-9, page 226, as Original Certificate of Title No.
994, pursuant to Decree

No. 36455, issued in L.R.C. ___ Record No. 4429.

This certificate is a transfer from Transfer Certificate of Title No. 4856/T-25, which is cancelled by virtue hereof in so far as the
above-described land is concerned.52 (Emphasis added.)

On the other hand, the title of respondent Bonifacio, the one presented during the trial, shows that it likewise originated from
OCT No. 994, but such mother title states only the day and the year of its original registration as follows:

It is further certified that said land was originally registered on the 19th day of ___, in the year nineteen hundred and twelve, in
the Registration Book of the Office of the Register of Deeds of Manila, Volume ___, Page ___, as Original Certificate of Title No.
994, pursuant to Decree No. 36455 issued in L.R.C. ___, Record No. 4423, in the name of ___.

This certificate is a transfer from Original Certificate of Title No. 994, which is cancelled by virtue hereof in so far as the above-
described land is concerned.53 (Emphasis added.)

Curiously, the title of respondent VSD Realty is supposed to be a direct transfer from the title of respondent Bonifacio, yet, the
certification as to the original registration of its mother title – OCT No. 994 – provides the registration date of May 3, 1917, thus:

IT IS FURTHER CERTIFIED that said land was originally registered on the 3rd day of May, in the year nineteen hundred and
seventeen in the Registration Book of the Office of the Register of Deeds of Rizal, Volume A-9-A, Page 226, as Original Certificate
of Title No. 994, pursuant to Decree No. 36455 issued in L.R.C. ___ Record No. 4429 in the name of ___.

This certificate is a transfer from Transfer Certificate of Title No. 265778/T-1325 which is cancelled by virtue hereof in so far as
the above-described land is concerned.

Entered at the City of Kalookan,

Philippines, on the 12th day of September in
the year nineteen hundred and ninety-four at
1:23 p.m.54 (Emphases added.)

Furthermore, a certified true copy of respondent Bonifacio’s title, which petitioners have obtained just prior to the filing of the
Petition at bar and attached to their Reply dated December 12, 2001, now shows that the date of the original registration of
respondent Bonifacio’s mother title - OCT No. 994 - has changed from the 19th day of an unspecified month 55 in 1912 to May 3,
1917, and the place of registration from Manila to Rizal. Aside from these changes, the portions that were left blank in the earlier
copy of respondent Bonifacio’s title have already been filled-up in the latest copy of the same, thus:
IT IS FURTHER CERTIFIED that said land was originally registered on the 3rd day of May, in the year nineteen hundred and
seventeen in the Registration Book of the Office of the Register of Deeds of Rizal, Volume A-9-A, Page 226, as Original Certificate
of Title No. 994, pursuant to Decree No. 36455 issued in L.R.C. ___ Record No. 4429 in the name of ___.

This certificate is a transfer from Original Certificate of Title No. 994 which is cancelled by virtue hereof in so far as the above-
described land is concerned.

Entered at Caloocan City,

Philippines, on the 29th day of March in the
year nineteen hundred and ninety-three at
3:20 a.m.56 (Emphases added.)

Secondly, the Court notes that the Republic, represented by the Office of the Solicitor General (OSG), filed herein a Motion for
Intervention with attached Petition-in-Intervention, pursuant to the recommendation in the Report dated May 25, 1998 of the
Senate Committees on Justice, Human Rights, Housing, and Urban Planning and Resettlement, that the OSG be mandated "to
intervene in land disputes before the court, on cases whether pertaining to government or private lands as the OSG may
determine, involving fake titles, duplication of titles or similar anomalies, to guide the court on the position of the government
and to involve the concerned government entities particularly the Land Registration Authority in a concerted effort to protect the
integrity of the Torrens system of land title registration." 57 The motion was granted and the Petition of the Republic was admitted
in the Court’s Resolution58 dated December 8, 2004.

The OSG manifests, among others, that petitioners’ TCT No. T-108530, in reliance to the conclusions of the DOJ and Senate
committees, is the valid certificate of title covering the subject land as it could be traced back to the authentic OCT No. 994
registered on May 3, 1917; conversely, respondents’ TCT Nos. 265778 and 285313 are null and void as these originated from the
spurious OCT No. 994 registered in 1912.

Respondents filed their Comment [to the Republic’s intervention] 59 on June 1, 2005. Interestingly, respondents now contend that
their TCT Nos. 265778 and 285313 are derivatives of OCT No. 994 registered on April 19, 1917, hence, they capitalize on the
rulings of this Court in Metropolitan Waterworks and Sewerage Systems (MWSS) v. Court of Appeals 60 and Heirs of Luis J.
Gonzaga v. Court of Appeals61 that those titles derived from OCT No. 994 registered on April 19, 1917 prevail over those titles
derived from OCT No. 994 registered on May 3, 1917 considering the priority of the date of registration.

Thirdly, the Court reiterates that the validity of OCT No. 994 registered on May 3, 1917, and the non-existence of a purported
OCT No. 994 registered on April 19, 1917, have already been exhaustively passed upon and settled with finality in the
Resolution[s] dated December 14, 2007 and March 31, 2009 in Manotok Realty, Inc. v. CLT Realty Development Corporation. 62

In Angeles v. The Secretary of Justice,63 this Court reiterated its pronouncements in Manotok Realty, Inc. v. CLT Realty
Development Corporation64 that the true and valid OCT No. 994 was registered on May 3, 1917, not on April 19, 1917, and that
any title that traces its source to the latter date is deemed void and inexistent. The Court was also explicit that the cases of
MWSS v. Court of Appeals and Gonzaga v. Court of Appeals had already been rendered functus officio, thus, these cases can no
longer be cited as precedents. The Court expounded as follows: It is important to emphasize at this point that in the recent case
resolved by this Court En Bancin 2007, entitled Manotok Realty, Inc. v. CLT Realty Development Corporation(the 2007 Manotok
case), as well as the succeeding resolution in the same case dated March 31, 2009 (the 2009 Manotok case), the controversy
surrounding the Maysilo Estate and the question of the existence of another OCT No. 994 have been finally laid to rest. All other
cases involving said estate and OCT No. 994, such as the case at bar, are bound by the findings and conclusions set forth in said
resolutions.

As stated earlier, petitioner anchors her claim on previous cases decided by this Court which have held that there are two
existing OCT No. 994, dated differently, and the one from which she and her co-plaintiffs (in Civil Case No. C-424) derived their
rights was dated earlier, hence, was the superior title. Regrettably, petitioner’s claim no longer has a leg to stand on. As we held
in the 2007 Manotok case:

The determinative test to resolve whether the prior decision of this Court should be affirmed or set aside is whether or not the
titles invoked by the respondents are valid. If these titles are sourced from the so-called OCT No. 994 dated 17 April 1917, then
such titles are void or otherwise should not be recognized by this Court. Since the true basic factual predicate concerning OCT
No. 994 which is that there is only one such OCT differs from that expressed in the MWSS and Gonzaga decisions, said rulings
have become virtually functus officio except on the basis of the "law of the case" doctrine, and can no longer be relied upon as
precedents. Specifically, petitioner cannot anymore insist that OCT No. 994 allegedly issued on April 19, 1917 validly and actually
exists, given the following conclusions made by this Court in the 2007 Manotok case:
First, there is only one OCT No. 994. As it appears on the record, that mother title was received for transcription by the Register
of Deeds on 3 May 1917, and that should be the date which should be reckoned as the date of registration of the title. It may
also be acknowledged, as appears on the title, that OCT No. 994 resulted from the issuance of the decree of registration on [19]
April 1917, although such date cannot be considered as the date of the title or the date when the title took effect.

Second. Any title that traces its source to OCT No. 994 dated [19] April 1917 is void, for such mother title is
inexistent.1âwphi1 The fact that the Dimson and CLT titles made specific reference to an OCT No. 994 dated [19] April 1917 casts
doubt on the validity of such titles since they refer to an inexistent OCT. x x x.

Third. The decisions of this Court in MWSS v. Court of Appeals and Gonzaga v. Court of Appeals cannot apply to the cases at bar,
especially in regard to their recognition of an OCT No. 994 dated 19 April 1917, a title which we now acknowledge as inexistent.
Neither could the conclusions in MWSSor Gonzaga with respect to an OCT No. 994 dated 19 April 1917 bind any other case
operating under the factual setting the same as or similar to that at bar.

To be sure, this Court did not merely rely on the DOJ and Senate reports regarding OCT No. 994. In the 2007 Manotok case, this
Court constituted a Special Division of the Court of Appeals to hear the cases on remand, declaring as follows:

Since this Court is not a trier of fact[s], we are not prepared to adopt the findings made by the DOJ and the Senate, or even
consider whether these are admissible as evidence, though such questions may be considered by the Court of Appeals upon the
initiative of the parties. x x x. The reports cannot conclusively supersede or overturn judicial decisions, but if admissible they may
be taken into account as evidence on the same level as the other pieces of evidence submitted by the parties. The fact that they
were rendered by the DOJ and the Senate should not, in itself, persuade the courts to accept them without inquiry. The facts and
arguments presented in the reports must still undergo judicial scrutiny and analysis, and certainly the courts will have the
discretion to accept or reject them.

There are many factual questions looming over the properties that could only be threshed out in the remand to the Court of
Appeals. x x x.

xxxx

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

Thus, in the 2009 Manotok case, this Court evaluated the evidence engaged in by said Special Division, and adopted the latter’s
conclusions as to the status of the original title and its subsequent conveyances. This case affirmed the earlier finding that "there
is only one OCT No. 994, the registration date of which had already been decisively settled as 3 May 1917 and not 19 April 1917"
and categorically concluded that "OCT No. 994 which reflects the date of 19 April 1917 as its registration date is null and
void."65 (Emphases added.)

In Phil-Ville Development and Housing Corporation v. Bonifacio, 66 this Court upheld the validity of the titles to a portion of land
which originally formed part of the Maysilo Estate which were sourced from OCT No. 994 registered on May 3, 1917, and
declared as null and void a title purportedly overlapping the said land which traced its roots from OCT No. 994 registered on April
19, 1917. The Court found that it was physically impossible for Eleuteria Rivera, the person whom respondent Bonifacio claims to
be her predecessor-in-interest, to be an heir of Maria de la Concepcion Vidal because it would turn out that Eleuteria Rivera was
older than her alleged grandmother Maria de la Concepcion Vidal, to wit:

Eventually, on March 31, 2009, the Supreme Court issued a Resolution reversing its Decision of November 29, 2005 and declaring
certain titles in the names of Araneta and Manotok valid. In the course of discussing the flaws of Jose Dimson’s title based on his
alleged 25% share in the hereditary rights of Bartolome Rivera, Eleuteria Rivera’s co-petitioner in LRC No. 4557, the Court noted:

. . . However, the records of these cases would somehow negate the rights of Rivera to claim from Vidal. The Verification Report
of the Land Registration Commission dated 3 August 1981 showed that Rivera was 65 years old on 17 May 1963 (as gathered
from the records of Civil Case Nos. 4429 and 4496). It can thus be deduced that, if Rivera was already 65 years old in 1963, then
he must have been born around 1898. On the other hand, Vidal was only nine (9) years in 1912; hence, she could have been born
only on [1903]. This alone creates an unexplained anomalous, if not ridiculous, situation wherein Vidal, Rivera's alleged
Grandmother, was seven (7) years younger than her alleged grandson. Serious doubts existed as to whether Rivera was in fact an
heir of Vidal, for him to claim a share in the disputed portions of the Maysilo Estate.

The same is true in this case. The Death Certificate of Eleuteria Rivera reveals that she was 96 years old when she died on
February 22, 1997. That means that she must have been born in 1901. That makes Rivera two years older than her alleged
grandmother Maria de la Concepcion Vidal who was born in 1903. Hence, it was physically impossible for Eleuteria Rivera to be
an heir of Maria de la Concepcion Vidal. (Emphases supplied, citations omitted.) Considering all of the above matters, especially
the fact that respondents claim that their respective titles, TCT Nos. 265778 and 285313, are derivatives of OCT No. 994
registered on April 19, 1917, which this Court had already repeatedly declared to be a non-existent and invalid title, the Court
rules in favor of petitioners. As held in Manotok, "[a]ny title that traces its source to OC'f No. 994 dated [19) April 1917 is void,
for such mother title is inexistent."67 WHEREFORE, in view of all the foregoing, the petition is hereby GRANTED. The Decision
dated February 23, 2001, as well as the Resolution dated June 26, 2001 of the Court of Appeals in CA-G.R. CV. No. 57777 which
affirmed in toto the Decision dated January 9, 1998 of Branch 126 of the RTC of the City of Caloocan in Civil Case No. C-366, are
REVERSED and SET ASIDE. TCT No. 265778 in the name of Felisa D. Bonifacio and TCT No. 285313 in the name of VSD Realty &
Development Corporation are declared NULL and VOID. The Registry of Deeds of Caloocan City is DIRECTED to CANCEL the said
certificates of title.

SO ORDERED.

HEIRS OF PACIFICO POCDO, namely, RITA POCDO GASIC, GOLIC POCDO, MARCELA POCDO ALFELOR, KENNETH POCDO, NIXON
CADOS, JACQUELINE CADOS LEE, EFLYN CADOS, and GIRLIE CADOS DAPLIN, herein represented by their Attorney-in-Fact JOHN
POCDO, vs. ARSENIA AVILA and EMELINDA CHUA, (March 19, 2014)

This petition for review1 assails the 12 October 2011 Decision2 of the Court of Appeals in CA-G.R. CV No. 91039. The Court of
Appeals affirmed the 14 January 2008 Resolution of the Regional Trial Court of Baguio City, Branch 61, in Civil Case No. 4710-R,
dismissing the complaint for lack ofjurisdiction.

The Facts

In June 2000, Pacifico Pocdo, who was later substituted by his heirs upon his death, filed a complaint to quiet title over a 1,728-
square meter property (disputed property) located in Camp 7, Baguio City, and covered by Tax Declaration 96-06008-106641.
Pacifico claimed that the disputed property is part of Lot 43, TS-39, which originally belonged to Pacifico’s father, Pocdo Pool. The
disputed property is allegedly different from the one- hectare portion alloted to Polon Pocdo, the predecessor-in-interest of the
defendants Arsenia Avila and Emelinda Chua, in a partition made by the heirs of Pocdo Pool. Pacifico alleged that the defendants
unlawfully claimed the disputed property, which belonged to Pacifico.

The facts of the case were summarized by the Court of Appeals as follows:

As it appears, in 1894, Pocdo Pool, who died in 1942, began his occupation and claim on three lots that were eventually surveyed
in his name as Lot 43, TS 39-SWO-36431, Lot 44, TS 39-SWO-36420 and Lot 45 TS 39-SWO-36429 with an area of 144,623 [sq.m.],
64,112 [sq.m.], and 9,427 square meters, respectively, and situated at Residence Section 4, Baguio City. These lots were the
subject of a petition to reopen judicial proceedings filed by the Heirs of Pocdo Pool with the CFI of Baguio City in Civil Reservation
Case No. 1, LRC Case 211. The registration of the lots in the names of the petitioners were [sic] grantedin October 1964, but since
the decision was not implemented within the 10 years [sic] prescribed period, the Heirs filed their ancestral land claims with the
DENR. In August 1991, Certificates of Ancestral Lands Claims (CALS) were issued by the DENR for Lots 44 and 45, but Lot 43 was
not approved due to Memorandum Order 98-15 issued by the DENR Secretary in September 199[8].

In the meantime, on September 14, 1960, Polon Pocdo, an heir of Pocdo Pool, ceded his rights over the three lots to Pacifico
Pocdo in exchange for a one hectare lot to be taken from Lot 43. However, Pacifico entered into a contract with Florencio Pax and
Braulio Yaranon on November 21, 1968 revoking the agreement with Polon. In the contract, the 4,875 square meters where
Polon’s house was located became part of the 1-hectare given to Pax and Yaranon in exchange for their services in the titling of
Pacifico’s lands.

Polon filed a complaint in August 1980 [with] the Office of the Barangay Captain at Camp 7, Baguio City, which was settled by an
amicable settlement dated September 3, 1980 between Pacifico and Polon. They agreed that Polon would again retain the 4,875
square meters and Pacifico would give the 5,125 square meter area, the remaining portion of the 1-hectare share of Polon, to be
taken from Lot 43 after a segregation.

On April 18, 1981, Polon entered into a Catulagan with Arsenia Avila authorizing the latter to undertake the segregation of his
one-hectare land from Lot 43 in accord with the amicable settlement of September 3, 1980. In exchange, Polon would award to
her 2,000 square meters from the 1- hectare lot. After spending time, money and effort in the execution of the survey, Avila gave
the survey results to Polon prompting Polon to execute a Waiver of Rights dated January 21, 1987. Accordingly, the subdivided
lots were declared for tax purposes and the corresponding tax declaration issued to Polon and Arsenia, with 8,010 square meters
going to Polon and 1,993 square meters to Avila.

On March 10, 2000, finding the amicable settlement, the Catulagan and Waiver of Rights in order, the CENRO of Baguio City
issued in favor of Avila a Certificate of Exclusion of 993 square meters from the Ancestral Land Claim of the Heirs of Pocdo Pool
over Lot 43.

On April 27, 2000, however, the Heirs of Polon Pocdo and his wife Konon filed an affidavit of cancellation with OIC-CENRO
Teodoro Suaking and on that basis, Suaking cancelled the Certificate of Exclusion. On May 8, 2000, Avila complained to the
Regional Executive Director or RED the unlawful cancellation of her Certificate of Exclusion, and on June 1, 2000, the RED issued
a memorandum setting aside the revocation and restoring the Certificate of Exclusion. On August 13, 2001, Avila filed an
administrative complaint against Suaking, and on July 16, 2002, the RED dismissed the letter-complaint of Avila and referred the
administrative complaint to the DENR Central Office.

Acting on the motion for reconsideration by Avila[against oppositors Pacifico Pocdo, et al.], the RED in an Order on October 28,
2002 set aside the July 16, 2002 order. The Affidavit of Cancellation dated April 27, 2002 filed by the heirs of Polon Pocdo was
dismissed for lack of jurisdiction and the validity of the Amicable Settlement, Catulagan and Deed of Waiver of Rights were
recognized. The letter dated April 28, 2000 and certification issued on May 31, 2000 by Suaking were ordered cancelled.
Accordingly, the RED held that the TSA applications of Arsenia Avila and others under TSA Application 15313, 15314, 15409 and
15410 should be given due course subject to compliance with existing laws and regulations.

The DENR Secretary affirmed his Order in [his] Decision of May 14, 2004 in DENR Case 5599, with the modification that the TSAs
fo[r] the appellee Avila could now be made the basis of disposition through public bidding and the appellant may participate in
the bidding if qualified.

Pacifico Pocdo, as the appellant, went on appeal to the Office of the President which resulted in an affirmance of DENR
Secretary’s decision on April 19, 2005 in OP Case 04-H-360.

As mentioned, having exhausted administrative remedies, the Heirs of Pacifico Pocdo challenged the OP resolution before the
Court of Appeals, but this petition was dismissed for having been filed late. The Supreme Court dismissed the Heirs’appeal from
this decision.
The instant case, Civil Case 4710-R, before the Regional Trial Court of Baguio City, Branch 61 was filed by Pacifico Pocdo against
Arsenia Avila and Emelinda Chua in June 2000, just after the RED set aside Suaking’s revocation on April 28, 2000 and ordered
the restoration of Avila’s Certificate of Exclusion. Since then, the judicial proceedings have run parallel to the administrative
case.3

In a Resolution4 dated 14 January 2008, the Regional Trial Court dismissed the case for lack of jurisdiction. The trial court held
that the DENR had already declared the disputed property as public land, which the State, through the DENR, has the sole power
to dispose. Thus, the claim of petitioners to quiet title is not proper since they do not have title over the disputed property. The
trial court agreed with the DENR Secretary’s ruling that petitioner may participate in the public bidding of the disputed property
if qualified under applicable rules.

Petitioners appealed to the Court of Appeals, asserting that the case is not limited to quieting of title since there are other issues
not affected by the DENR ruling, particularly the validity of the Waiver of Rights and the Catulagan. Petitioners maintained that
the DENR’s ruling that the disputed property is public land did not preclude the court from taking cognizance of the issues on
who is entitled possession to the disputed property and whether the questioned documents are valid and enforceable against
Pacifico and his heirs.

The Ruling of the Court of Appeals

The Court of Appeals ruled that petitioners, in raising the issue of quieting of title, failed to allege any legal or equitable title to
quiet. Under Article 477 of the Civil Code, in an action to quiet title, the plaintiff must have legal or equitable title to, or interest
in the real property which is the subject matter of the action. Instead of an action to quiet title or accion reivindicatoria, the
Court of Appeals stated that petitioners should have filed an accion publiciana based merely on the recovery of possession de
jure.

On the validity of the Catulagan and the Waiver of Rights, the Court of Appeals held that petitioners have no right to question
these since they were not parties to said documents had not participated in any manner in their execution. The Court of Appeals
ruled that only the contracting parties are bound by the stipulations of the said documents. Those not parties to the said
documents, and for whose benefit they were not expressly made, cannot maintain an action based on the said documents.

Thus, the Court ofAppeals affirmed the trial court’s resolution, subject to the right of petitioners to file the appropriate action.

The Issues

THE COURT OF APPEALS ERRED IN RULING THAT THE PETITIONERS SHOULD JUST FILE THE NECESSARY ACTION FOR RECOVERY OF
POSSESSION BECAUSE SAID COURT HAS FAILED TO TAKE INTO CONSIDERATION THAT RECOVERY OF POSSESSION IS PRECISELY
ONE OF THE CAUSES OF ACTION IN THE PRESENT CASE.

THE COURT OF APPEALS ERRED IN RULING THAT THE RTC HAD NO JURISDICTION SINCE IT IS THE COURTS, NOT THE DENR, THAT
HAS JURISDICTION OVER ACTIONS INVOLVING POSSESSION OF LANDS, EVEN ASSUMING WITHOUT ADMITTING, THAT THE LAND
ISAPUBLIC LAND.

THE COURT OFAPPEALS ERRED IN UPHOLDING THE DISMISSAL OF THE CASE BECAUSE THERE ARE OTHER CAUSES OF ACTION
OVER WHICH THE RTC HAS JURISDICTION, i.e. RECOVERY OF POSSESSION, DECLARATION OF NULLITY OF DOCUMENTS.

THE COURT OF APPEALS ERRED IN FINDING THAT THE PETITIONERS HAVE NO TITLE TO THE PROPERTY THAT WOULD SUPPORT
AN ACTION FOR QUIETING OF TITLE WHEN TRIAL HAD NOT YET COMMENCED. NONETHELESS, THE RECORD IS REPLETE OF
PROOF THAT THE PETITIONERS HAVE RIGHTS/TITLE OVER THE SUBJECT PROPERTY. 5

The Ruling of the Court

We find the petition without merit.

In the administrative case involving the disputed property,which forms part of Lot 43, the DENR ruled that Lot 43 is public land
located within the Baguio Townsite Reservation. In his Decision dated 14 May 2004 in DENR Case No. 5599, the DENR Secretary
stated:

Lot 43 is public land and part of the Baguio Townsite Reservation. This has already been settled by the decision of the Court of
First Instance of Benguet and Mountain Province dated 13 November 1922 in Civil Reservation Case No. 1. The fact that the heirs
of Pocdo Pool were able to reopen Civil Reservation Case No. 1, LRC Case No. 211 and secure a decision in their favor for
registration of Lot 43 is of no moment.As held in Republic v. Pio R. Marcos (52 SCRA 238), the Court of First Instance of Baguio
and Benguet had no jurisdiction to order the registration of lands already declared public in Civil Reservation Case No. 1. Lot 43
being part of the Baguio Townsite Reservation, disposition thereof is under Townsite Sales Application ("TSA"). Precisely on this
bone [sic] that Lot 43 was not awarded a Certificate of Land Ancestral Claim [sic] under DENR Circular No. 03, series of 1990,
because it is within the Baguio Townsite Reservation. 6

The DENR Decision was affirmed by the Office of the President which held that lands within the Baguio Townsite Reservation
belong to the public domain and are no longer registrable under the Land Registration Act. 7 The Office of the President ordered
the disposition of the disputed property in accordance with the applicable rules of procedure for the disposition of alienable
public lands within the Baguio Townsite Reservation, particularly Chapter X of Commonwealth Act No. 141 on Townsite
Reservations and other applicable rules.

Having established that the disputed property is public land, the trial court was therefore correct in dismissing the complaint to
quiet title for lack of jurisdiction.1âwphi1 The trial court had no jurisdiction to determine who among the parties have better
right over the disputed property which is admittedly still part of the public domain. As held inDajunos v. Tandayag:8

x x x The Tarucs’ action was for "quieting of title" and necessitated determination of the respective rights of the litigants, both
claimants to a free patent title, over a piece of property, admittedly public land. The law, as relied upon by jurisprudence, lodges
"the power of executive control, administration, disposition and alienation of public lands with the Director of Lands subject, of
course, to the control of the Secretary of Agriculture and Natural Resources."

In sum, the decision rendered in civil case 1218 on October 28, 1968 is a patent nullity. The court below did not have power to
determine who (the Firmalos or the Tarucs) were entitled to an award of free patent title over that piece of property that yet
belonged to the public domain. Neither did it have power to adjudge the Tarucs as entitled to the "true equitable ownership"
thereof, the latter’s effect being the same: the exclusion of the Firmalos in favor of the Tarucs. 9

In an action for quieting of title, the complainant is seeking for "an adjudication that a claim of title or interest in property
adverse to the claimant is invalid, to free him from the danger of hostile claim, and to remove a cloud upon or quiet title to land
where stale or unenforceable claims or demands exist." 10 Under Articles 47611 and 47712of the Civil Code, the two indispensable
requisites in an action to quiet title are: (1) that the plaintiff has a legal or equitable title to or interest in the real property subject
of the action; and (2) that there is a cloud on his title by reason of any instrument, record, deed, claim, encumbrance or
proceeding, which must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity.13

In this case, petitioners, claiming to be owners of the disputed property, allege that respondents are unlawfully claiming the
disputed property by using void documents, namely the "Catulagan" and the Deed of Waiver of Rights. However, the records
reveal that petitioners do not have legal or equitable title over the disputed property, which forms part of Lot 43, a public land
within the Baguio Townsite Reservation. It is clear from the facts of the case that petitioners’ predecessors-in-interest, the heirs
of Pocdo Pool, were not even granted a Certificate of Ancestral Land Claim over Lot 43, which remains public land. Thus, the trial
court had no other recourse but to dismiss the case.

There is no more need to discuss the other issues raised since these are intrinsically linked to petitioners' action to quiet title.

WHEREFORE, we DENY the petition. We AFFIRM the 12 October 2011 Decision of the Court of Appeals in CA-G.R. CV No. 91039.

SO ORDERED.

G.R. No. 154270 March 9, 2010

TEOFISTO OÑO, PRECY O. NAMBATAC, VICTORIA O. MANUGAS and POLOR O. CONSOLACION, vs. VICENTE N. LIM,

BERSAMIN, J.:

The subject of controversy is Lot No. 943 of the Balamban Cadastre in Cebu City, covered by Original Certificate of Title (OCT) No.
RO-9969-(O-20449), over which the contending parties in this action for quieting of title, initiated by respondent Vicente N. Lim
(Lim) in the Regional Trial Court (RTC) in Cebu City, assert exclusive ownership, to the exclusion of the other. In its decision dated
July 30, 1996,1 the RTC favored Lim, and ordered the cancellation of OCT No. RO-9969-(O-20449) and the issuance of a new
certificate of title in the name of Luisa Narvios-Lim (Luisa), Lim’s deceased mother and predecessor-in-interest.

On appeal (CA-GR CV No. 57823), the Court of Appeals (CA) affirmed the RTC on January 28, 2002. 2 It later denied the
petitioners’ motion for reconsideration through the resolution dated June 17, 2002.3
Hence, this appeal via petition for review on certiorari.

Antecedents

On October 23, 1992, Lim filed in the RTC in Cebu City a petition for the reconstitution of the owner’s duplicate copy of OCT No.
RO-9969-(O-20449), alleging that said OCT had been lost during World War II by his mother, Luisa; 4 that Lot No. 943 of the
Balamban Cadastre in Cebu City covered by said OCT had been sold in 1937 to Luisa by Spouses Diego Oño and Estefania Apas
(Spouses Oño), the lot’s registered owners; and that although the deed evidencing the sale had been lost without being
registered, Antonio Oño (Antonio), the only legitimate heir of Spouses Oño, had executed on April 23, 1961 in favor of Luisa a
notarized document denominated asconfirmation of sale,5 which was duly filed in the Provincial Assessor’s Office of Cebu.

Zosimo Oño and petitioner Teofisto Oño (Oños) opposed Lim’s petition, contending that they had the certificate of title in their
possession as the successors-in-interest of Spouses Oño.

On account of the Oños’ opposition, and upon order of the RTC, Lim converted the petition for reconstitution into a complaint
for quieting of title,6 averring additionally that he and his predecessor-in-interest had been in actual possession of the property
since 1937, cultivating and developing it, enjoying its fruits, and paying the taxes corresponding to it. He prayed, inter alia, that
the Oños be ordered to surrender the reconstituted owner’s duplicate copy of OCT No. RO-9969-(O-20449), and that said OCT be
cancelled and a new certificate of title be issued in the name of Luisa in lieu of said OCT.

In their answer,7 the Oños claimed that their predecessors-in-interest, Spouses Oño, never sold Lot No. 943 to Luisa; and that
the confirmation of sale purportedly executed by Antonio was fabricated, his signature thereon not being authentic.

RTC Ruling

On July 30, 1996, after trial, the RTC rendered its decision, 8 viz:

WHEREFORE, premises considered, judgment is hereby rendered quieting plaintiff's title to Lot No. 943 of the Balamban (Cebu)
Cadastre, and directing the Register of Deeds of Cebu —

(1) To register the aforestated April 23, 1961 Confirmation of Sale of Lot No. 943 of the Balamban, Cebu Cadastre by
Antonio Oño in favor of Luisa Narvios-Lim;

(2) To cancel the original certificate of title covering the said Lot No. 943 of the Balamban, Cebu Cadastre; and,

(3) To issue in the name of Luisa Narvios-Lim, a new duplicate certificate of title No. RO-9969 (O-20449) of the Register
of Deeds of Cebu, which shall contain a memorandum of the fact that it is issued in place of the lost duplicate certificate
of title, and shall in all respects be entitled to like faith and credit as the original certificate, and shall be regarded as
such for all purposes of this decree, pursuant to the last paragraph of Section 109, Presidential Decree No. 1529.

Without special pronouncement as to costs.

SO ORDERED.9

The RTC found that the Lims had been in peaceful possession of the land since 1937; that their possession had never been
disturbed by the Oños, except on two occasions in 1993 when the Oños seized the harvested copra from the Lims’ caretaker; that
the Lims had since declared the lot in their name for taxation purposes, and had paid the taxes corresponding to the lot; that the
signature of Antonio on the confirmation of sale was genuine, thereby giving more weight to the testimony of the notary public
who had notarized the document and affirmatively testified that Antonio and Luisa had both appeared before him to
acknowledge the instrument as true than to the testimony of the expert witness who attested that Antonio’s signature was a
forgery.

CA Ruling

On appeal, the Oños maintained that the confirmation of sale was spurious; that the property, being a titled one, could not be
acquired by the Lims through prescription; that their (the Oños) action to claim the property could not be barred by laches; and
that the action instituted by the Lims constituted a collateral attack against their registered title.1avvphi1

The CA affirmed the RTC, however, and found that Spouses Oño had sold Lot No. 943 to Luisa; and that such sale had been
confirmed by their son Antonio. The CA ruled that the action for quieting of title was not a collateral, but a direct attack on the
title; and that the Lims’ undisturbed possession had given them a continuing right to seek the aid of the courts to determine the
nature of the adverse claim of a third party and its effect on their own title.

Nonetheless, the CA corrected the RTC, by ordering that the Office of the Register of Deeds of Cebu City issue a new duplicate
certificate of title in the name of Luisa, considering that the owner’s duplicate was still intact in the possession of the Oños.

The decree of the CA decision was as follows:

WHEREFORE, the appeal is DISMISSED for lack of merit. However, the dispositive portion of the decision appealed from is
CORRECTED as follows:

(1) Within five (5) days from finality of the decision, defendants-appellants are directed to present the owner's duplicate
copy of OCT No. RO-9969 (O-20449) to the Register of Deeds who shall thereupon register the "Confirmation of Sale" of
Lot No. 943, Balamban Cadastre, Cebu, executed on April 23, 1961 by Antonio Oño in favor of Luisa Narvios-Lim, and
issue a new transfer certificate of title to and in the name of the latter upon cancellation of the outstanding original and
owner's duplicate certificate of title.

(2) In the event defendants-appellants neglect or refuse to present the owner's copy of the title to the Register of Deeds
as herein directed, the said title, by force of this decision, shall be deemed annulled, and the Register of Deeds shall
make a memorandum of such fact in the record and in the new transfer certificate of title to be issued to Luisa Narvios-
Lim.

(3) Defendants-appellants shall pay the costs.

SO ORDERED.10

The CA denied the Oños’ motion for reconsideration11 on June 17, 2002.12

Hence, this appeal.

Issues

The petitioners raise the following issues:

1. Whether or not the validity of the OCT could be collaterally attacked through an ordinary civil action to quiet title;

2. Whether or not the ownership over registered land could be lost by prescription, laches, or adverse possession;

3. Whether or not there was a deed of sale executed by Spouses Oño in favor of Luisa and whether or not said deed was
lost during World War II;

4. Whether or not the confirmation of sale executed by Antonio in favor of Luisa existed; and

5. Whether or not the signature purportedly of Antonio in that confirmation of sale was genuine.

Ruling of the Court

The petition has no merit.

A.

Action for cancellation of title is not an attack on the title

The petitioners contend that this action for quieting of title should be disallowed because it constituted a collateral attack on OCT
No. RO-9969-(O-20449), citing Section 48 of Presidential Decree No. 1529, viz:

Section 48. Certificate not subject to collateral attack.– A certificate of title shall not be subject to collateral attack. It cannot be
altered, modified, or cancelled except in a direct proceeding in accordance with law.
The petitioners’ contention is not well taken.

An action or proceeding is deemed an attack on a title when its objective is to nullify the title, thereby challenging the judgment
pursuant to which the title was decreed.13 The attack is direct when the objective is to annul or set aside such judgment, or
enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an
attack on the judgment is nevertheless made as an incident thereof. 14

Quieting of title is a common law remedy for the removal of any cloud, doubt, or uncertainty affecting title to real
property.15 Whenever there is a cloud on title to real property or any interest in real property by reason of any instrument,
record, claim, encumbrance, or proceeding that is apparently valid or effective, but is, in truth and in fact, invalid, ineffective,
voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the
title.16 In such action, the competent court is tasked to determine the respective rights of the complainant and the other
claimants, not only to place things in their proper places, and to make the claimant, who has no rights to said immovable,
respect and not disturb the one so entitled, but also for the benefit of both, so that whoever has the right will see every cloud of
doubt over the property dissipated, and he can thereafter fearlessly introduce the improvements he may desire, as well as use,
and even abuse the property as he deems fit.17

Lim’s complaint pertinently alleged:

18. If indeed, the genuine original of the Owner's Duplicate of the Reconstituted Original Certificate of Title No. RO-9699 (O-
20449) for Lot 943, Balamban Cadastre xxx is in Defendant's (Oño’s) possession, then VNL submits the following PROPOSITIONS:

xxx

18.2. Therefore, the Original of Owner’s Duplicate Certificate (which Respondents [Defendants Oños] claim in their Opposition is
in their possession) must be surrendered to VNL upon order of this Court, after the Court shall have determined VNL's mother's
acquisition of the attributes of ownership over said Lot 943, in this action, in accordance with Section 107, P.D. 1529, Property
Registration Decree xxx

xxx

[t]hat OCT 20449 be cancelled and new title for Lot 943 be issued directly in favor of LUISA NARVIOS, to complete her title to said
Lot;18

The averments readily show that the action was neither a direct nor a collateral attack on OCT No. RO-9969-(O-20449), for Lim
was 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, and resultantly should be cancelled. Lim did not thereby assail the validity of OCT No.
RO-9969-(O-20449), or challenge the judgment by which the title of the lot involved had been decreed. In other words, the
action sought the removal of a cloud from Lim’s title, and the confirmation of Lim’s ownership over the disputed property as the
successor-in-interest of Luisa.

B.

Prescription was not relevant

The petitioners assert that the lot, being titled in the name of their predecessors-in-interest, could not be acquired by
prescription or adverse possession.

The assertion is unwarranted.

Prescription, in general, is a mode of acquiring or losing ownership and other real rights through the lapse of time in the manner
and under the conditions laid down by law. 19 However, prescription was not relevant to the determination of the dispute herein,
considering that Lim did not base his right of ownership on an adverse possession over a certain period. He insisted herein,
instead, that title to the land had been voluntarily transferred by the registered owners themselves to Luisa, his predecessor-in-
interest.

Lim showed that his mother had derived a just title to the property by virtue of sale; that from the time Luisa had acquired the
property in 1937, she had taken over its possession in the concept of an owner, and had performed her obligation by paying real
property taxes on the property, as evidenced by tax declarations issued in her name; 20 and that in view of the delivery of the
property, coupled with Luisa’s actual occupation of it, all that remained to be done was the issuance of a new transfer certificate
of title in her name.

C.

Forgery, being a question of fact, could not be dealt with now

The petitioners submit that Lim’s evidence did not preponderantly show that the ownership of the lot had been transferred to
Luisa; and that both the trial and the appellate courts disregarded their showing that Antonio’s signature on the confirmation of
sale was a forgery.

Clearly, the petitioners hereby seek a review of the evaluation and appreciation of the evidence presented by the parties.

The Court cannot anymore review the evaluation and appreciation of the evidence, because the Court is not a trier of
facts.21 Although this rule admits of certain exceptions, viz: (1) when the conclusion is a finding grounded entirely on speculation,
surmises, or conjecture; (2) when the inference made is manifestly mistaken; (3) where there is a grave abuse of discretion; (4)
when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of
Appeals, in making its findings, went beyond the issues of the case, and the findings are contrary to the admissions of both
appellant and appellee; (7) when the findings of the Court of Appeals are contrary to those of the trial court; (8) when the
findings of fact are conclusions without specific evidence on which they are based; (9) when the facts set forth in the petition as
well in the petitioners’ main and reply briefs are not disputed by the respondents; and, (10) when the findings of fact of the
Court of Appeals are premised on the supposed absence of evidence and are contradicted by the evidence on record, 22 it does
not appear now that any of the exceptions is present herein. We thus apply the rule without hesitation, and reject the appeal for
that reason.

It is emphasized, too, that the CA upheld the conclusion arrived at by the RTC that the signature of Antonio had not been
simulated or forged. The CA ruled that the testimony of the notary public who had notarized the confirmation of sale to the
effect that Antonio and Luisa had appeared before him prevailed over that of the petitioners’ expert witness. The concurrence of
their conclusion on the genuineness of Antonio’s signature now binds the Court. 23

In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence. Preponderance of
evidence is the weight, credit, and value of the aggregate evidence on either side, and is usually considered to be synonymous
with the term greater weight of the evidence or greater weight of the credible evidence. Preponderance of evidence is a phrase
that means, in the last analysis, probability of the truth. 24 It is evidence that is more convincing to the court as worthy of belief
than that which is offered in opposition thereto.

Lim successfully discharged his burden of proof as the plaintiff. He established by preponderant evidence that he had a superior
right and title to the property. In contrast, the petitioners did not present any proof of their better title other than their copy of
the reconstituted certificate of title. Such proof was not enough, because the registration of a piece of land under the Torrens
system did not create or vest title, such registration not being a mode of acquiring ownership. The petitioners need to be
reminded that a certificate of title is merely an evidence of ownership or title over the particular property described therein. Its
issuance in favor of a particular person does not foreclose the possibility that the real property may be co-owned with persons
not named in the certificate, or that it may be held in trust for another person by the registered owner. 25

WHEREFORE, the petition for review on certiorari is denied, and the decision dated January 28, 2002 is affirmed.

The petitioners are ordered to pay the costs of suit. SO ORDERED.

INOCENCIO Y. LUCASAN for himself and as the Judicial Administrator of the Intestate Estate of the late JULIANITA SORBITO
LUCASAN vs. PHILIPPINE DEPOSIT INSURANCE CORPORATION (PDIC) as receiver and liquidator of the defunct PACIFIC
BANKING CORPORATION, . (July 4, 2008)

NACHURA, J.:

On appeal is the March 23, 2006 Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 81518, affirming the July 24, 2003
Order2 of the Regional Trial Court (RTC) of Bacolod City, Branch 43, granting respondent’s motion to dismiss, as well as its
subsequent Resolution3 denying petitioner’s motion for reconsideration.

The factual antecedents are as follows.

Petitioner Inocencio Y. Lucasan (Lucasan) and his wife Julianita Sorbito (now deceased) were the owners of Lot Nos. 1500-A and
229-E situated in Bacolod City, respectively covered by TCT Nos. T-68115 and T-13816.

On August 3, 1972, Pacific Banking Corporation (PBC) extended a P5,000.00 loan to Lucasan, with Carlos Benares as his co-maker.
Lucasan and Benares failed to pay the loan when it became due and demandable. Consequently, PBC filed a collection case with
the RTC of Bacolod City, docketed as Civil Case No. 12188.

On April 30, 1979, the RTC rendered a decision ordering Lucasan and Benares to jointly and severally pay PBCP7,199.99 with
interest at 14% per annum computed from February 7, 1979, until the full payment of the obligation. Lucasan failed to pay the
monetary award; thus, to satisfy the judgment, the RTC issued a writ of execution directing the sheriff to effect a levy on the
properties owned by Lucasan and sell the same at public auction.

In compliance with the writ, the City Sheriff of Bacolod issued a Notice of Embargo on January 8, 1981, which was annotated on
Lucasan’s TCT Nos. T-68115 and T-13816 as Entry No. 110107. Annotated as prior encumbrances on the same titles were the
mortgages in favor of Philippine National Bank (PNB) and Republic Planter’s Bank (RPB) executed to secure Lucasan’s loans with
the banks.

On May 13, 1981, the lots were sold at public auction and were awarded to PBC as the highest bidder. A certificate of sale was
executed in its favor and was registered and annotated on TCT Nos. T- 68115 and T-13816 as Entry No. 112552 on June 5, 1981.
Neither PNB nor RPB, the mortgagees, assailed the auction sale.

Lucasan, as well as the mortgagee banks, PNB and RPB, did not redeem the properties within the redemption period.
Nevertheless, PBC did not file a petition for consolidation of ownership.

In January 1997, Lucasan, through counsel, wrote a letter to the Philippine Deposit Insurance Corporation (PDIC), PBC’s receiver
and liquidator seeking the cancellation of the certificate of sale and offering to pay PBC’s claim against Lucasan. 4

Not long thereafter, Lucasan paid his loans with the PNB and RPB. Consequently, the mortgagee banks executed their respective
releases of mortgage, resulting in the cancellation of the prior encumbrances in favor of PNB and RPB.

On August 13, 2001, PDIC denied Lucasan’s request for the cancellation of the certificate of sale stating:

Please be informed that based on our records, TCT Nos. T-68115 and T-13816 have already become part of the acquired
assets of Pacific Banking Corporation by virtue of a Certificate of Sale dated May 13, 1981 executed by the City Sheriff of
Bacolod. Subsequently, this document was registered on the titles on June 5, 1981 so that the last day of the
redemption period was June 5, 1982.

With regard to your request, we regret to inform you that reacquisition of the subject properties have to be through
sale following PDIC’s policy on disposal. Accordingly, these properties can be disposed through public bidding using the
latest appraised value in the total amount of P2,900,300.00 as of March 29, 2000 as a minimum bid. If you are still
interested to acquire the properties, please get in touch with our Asset Management Group x x x. 5

Lucasan then filed a petition denominated as declaratory relief with the RTC of Bacolod City docketed as Civil Case No. 02-
11874.6 He sought confirmation of his rights provided in the second paragraph of Section 1, Rule 63 of the Rules of Court in
relation to Section 75 of Presidential Decree (P.D.) No. 1529. Lucasan also pleaded for the lifting and/or cancellation of the notice
of embargo and the certificate of sale annotated on TCT Nos. T-68115 and T-13816, and offered to pay P100,000.00 or such
amount as may be determined by the RTC, as consideration for the cancellation.

PDIC moved to dismiss the complaint for lack of cause of action. It averred that an action to quiet title under Section 1 of Rule 63
may only be brought when there is a cloud on, or to prevent a cloud from being cast upon, the title to real property. It
asseverated that a cloud on the title is an outstanding instrument record, claim, encumbrance or proceeding which is actually
invalid or inoperative, but which may nevertheless impair or affect injuriously the title to property. PDIC claimed that the notice
of embargo was issued pursuant to a writ of execution in Civil Case No. 12188, while the certificate of sale was executed as a
result of a public bidding. Thus, their annotations on the titles were valid, operative or effective. PDIC asserted that Lucasan’s
petition is nothing but a disguised attempt to compel PDIC to resell the properties at a reduced price of P100,000.00.
Accordingly, it prayed for the dismissal of the petition.7

Lucasan opposed the motion.8 He countered that the subject properties were still in his possession, and neither PBC nor PDIC
instituted an action for consolidation of ownership. Since the certificate of title was still in his name, he contended that he could
pursue all legal and equitable remedies, including those provided for in Section 1, Rule 63 of the Rules of Court to reacquire the
properties. He also claimed that PDIC’s policy of disposing the subject properties through public bidding at the appraised value
of P2,900,300.00 was unjust, capricious and arbitrary, considering that the judgment debt amounted only to P7,199.99 with
interest at 14% per annum. Lucasan urged the RTC to apply the liberal construction of the redemption laws stressed in Cometa v.
Court of Appeals.9

In its Order10 dated July 24, 2003, the RTC granted PDIC’s motion to dismiss, thus:

The clouds contemplated by the provision of law under Article 476 of the Civil Code is one where the instrument,
record, claim, encumbrance or proceeding is apparently valid or effective on its face that nothing appears to be wrong,
but in reality, is null and void. Hence, the petition filed by [Lucasan] pursuant to the said article is equivalent to
questioning the validity of the subsequent annotation of Entry No. 110107 and Entry No. 112522 in TCT Nos. T-13816
and T-68115.

Records disclose that Entry No. 110107 which is a Notice of Embargo was issued by virtue of a valid judgment rendered
in Civil Case No. 12188 entitled "Pacific Banking Corporation vs. [Inocencio] Lucasan, et al.," whereby the Court found
[Lucasan] liable in favor of [PBC] the sum of P7,199.99 with 14% interest per annum to be computed from February 7,
1979 until fully paid.

As mandated in Sec. 12, Rule 39 of the Revised Rules of Court, such levy on execution create a lien in favor of [PBC] over
the right, title and interest of [Lucasan] over the two (2) subject parcels of land covered by TCT Nos. T-13816 and T-
68115, subject to liens and encumbrances then existing. The fact that [Lucasan] has redeemed the mortgage properties
from the first mortgages (sic), PNB and PNB (sic) Republic Bank, does not vest him any title free from the lien of [PBC].

While the law requires that the judgment debtor, [Lucasan] must be served with a notice of levy and even if not served
therewith, the defect is cured by service on him of the notice of sale prior to the sale, nowhere in the petition which
alleges that [Lusasan] refutes the validity of the execution sale. Thus, he is deemed to have received and recognized the
same.

As support for his thesis, [Lucasan] cites the case of Balanga vs. Ca., et al. (supra). However this Court is unable to agree
that it is applicable to the present case. As correctly argued by [PDIC], in that case the proceedings under execution
suffered infirmity from the very start as the levy and sale made by the sheriff of the land of petitioner Balanga included
the house erected on the land [and] constituted as a family home which, under the law, exempt from execution. In the
case at bar, no objection was interposed by [Lucasan] as a valid levy has been made pursuant to Sec. 7, Rule 57 of the
Revised Rules of Court, as a consequence of which, the sale made pursuant to Sec. 11 of the same rule is also valid and
effective.11

The dispositive portion of the RTC Order reads:

WHEREFORE, finding the claim of any cloud over the titles of [Lucasan] to be bereft of basis in fact and in law, the
Motion to Dismiss filed by [PDIC] is granted. Accordingly, this is hereby ordered DISMISSED.

SO ORDERED.12

Lucasan filed a motion for reconsideration, but the RTC denied it on October 20, 2003. 13

On appeal, the CA affirmed in toto the RTC ruling. It declared that Lucasan already lost his right to redeem the properties when
he failed to exercise it within the prescribed period. The effect of such failure was to vest in PBC absolute ownership over the
subject properties.14

The CA disposed, thus:

WHEREFORE, in view of all the foregoing premises, the appeal is hereby DENIED. Accordingly, the assailed Order of the
Regional Trial Court of Bacolod City, Branch 43 dated 24 July 2003 dismissing [Lucasan’s] Petition for Declaratory Relief
and the subsequent Order of the same Court dated 20 October 2003 denying [Lucasan’s] motion for reconsideration
from the Order of Denial (sic) are hereby affirmed in toto. No costs.

SO ORDERED.15

Lucasan sought a reconsideration of the CA Decision, but the same was denied on February 7, 2007. 16

Before us, Lucasan impugns the CA Decision on the following grounds:

 1- THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION IN AFFIRMING THE ORDER OF DISMISSAL OF
THE PETITIONER’S PETITION IN THE REGIONAL TRIAL COURT WHEN IT DISREGARDED THE CLEAR PROVISION OF SECTION
75 OF PRESIDENTIAL DECREE NO. 1529 AND PUT TO NAUGHT THE APPLICABLE JURISPRUDENCE IN ZACARIAS COMETA x
x x AND THE CASES CITED THEREIN, INSPITE (sic) OF THE CLEAR AND OUTSTANDING SIMILARITY OF FACTS WITH THE
CASE UNDER CONSIDERATION.

2- THE COURT OF APPEALS ALSO ERRED AND GRAVELY ABUSED ITS DISCRETION WHEN IT FAILED TO CONSIDER THAT
THE NOTICE OF EMBARGO AND CERTIFICATE OF SALE ISSUED BY THE CITY SHERIFF WERE ONLY LEVY ON THE INTEREST
OF THE PETITIONER ON THE TWO (2) SUBJECT LOTS, AS DECREED IN QUEZON BEARING & PARTS CORPORATION, x x x,
WHICH IS LIKEWISE APPLICABLE TO THE CASE AT BAR. 17

Lucasan posits that he has sufficient cause of action against PDIC; thus, he chides the RTC for dismissing his complaint, and the
CA for affirming the dismissal. In support of his thesis, he cites Section 75 of Presidential Decree (PD) No. 1529, or the Property
Registration Decree18 and Cometa v. Court of Appeals.19

As gleaned from the averments of the complaint, Lucasan’s action was one for quieting of title under Rule 63 of the Rules of
Court. Essentially, he sought the cancellation of the notice of embargo and the certificate of sale annotated on TCT Nos. T-68115
and T-13816 claiming that the said annotations beclouded the validity and efficacy of his title. The RTC, however, dismissed his
complaint for lack of cause of action which was affirmed by the CA in its assailed Decision. Thus, the key issue for our
consideration is whether the dismissal of Lucasan’s complaint was proper.

Quieting of title is a common law remedy for the removal of any cloud of doubt or uncertainty with respect to real property. The
Civil Code authorizes the said remedy in the following language:

ART. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument,
record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid,
ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such
cloud or to quiet the title.

An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein.

ART. 477. The plaintiff must have legal or equitable title to, or interest in the real property which is the subject-matter of
the action. He need not be in possession of said property.

To avail of the remedy of quieting of title, two (2) indispensable requisites must concur, namely: (1) the plaintiff or complainant
has a legal or an equitable title to or interest in the real property subject of the action; and (2) the deed, claim, encumbrance or
proceeding claimed to be casting a cloud on his title must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy. 20 Stated differently, the plaintiff must show that he has a legal or at least an
equitable title over the real property in dispute, and that some deed or proceeding beclouds its validity or efficacy.

Unfortunately, the foregoing requisites are wanting in this case.

Admittedly, the subject parcels of land were levied upon by virtue of a writ of execution issued in Civil Case No. 12188. On May
13, 1981, a public auction of the subject parcels of land was held and the lots were awarded to PBC as the highest bidder. A
certificate of sale in favor of PBC was issued on the same day, and was registered and annotated on TCT Nos. T-68115 and T-
13816 as Entry No. 112552 on June 5, 1981.

Under the 1964 Rules of Court, which were in effect at that time, the judgment debtor or redemptioner had the right to redeem
the property from PBC within twelve (12) months from the registration of the certificate of sale. 21With the expiration of the
twelve-month period of redemption and no redemption having been made, as in this case, the judgment debtor or the
redemptioner lost whatever right he had over the land in question. 22

Lucasan admitted that he failed to redeem the properties within the redemption period, on account of his then limited financial
situation.23 It was only in January 1997 or fifteen (15) years later that he manifested his desire to reacquire the properties. Clearly
thus, he had lost whatever right he had over Lot Nos. 1500-A and 229-E.

The payment of loans made by Lucasan to PNB and RPB in 1997 cannot, in any way, operate to restore whatever rights he had
over the subject properties. Such payment only extinguished his loan obligations to the mortgagee banks and the liens which
Lucasan claimed were subsisting at the time of the registration of the notice of embargo and certificate of sale.
Neither can Lucasan capitalize on PBC’s failure to file a petition for consolidation of ownership after the expiration of the
redemption period. As we explained in Calacala v. Republic:24

[P]etitioners' predecessors-in-interest lost whatever right they had over [the] land in question from the very moment
they failed to redeem it during the 1-year period of redemption. Certainly, the Republic's failure to execute the acts
referred to by the petitioners within ten (10) years from the registration of the Certificate of Sale cannot, in any way,
operate to restore whatever rights petitioners' predecessors-in-interest had over the same. For sure, petitioners have
yet to cite any provision of law or rule of jurisprudence, and we are not aware of any, to the effect that the failure of a
buyer in a foreclosure sale to secure a Certificate of Final Sale, execute an Affidavit of Consolidation of Ownership and
obtain a writ of possession over the property thus acquired, within ten (10) years from the registration of the Certificate
of Sale will operate to bring ownership back to him whose property has been previously foreclosed and sold.

xxxx

Moreover, with the rule that the expiration of the 1-year redemption period forecloses the obligor's right to redeem and
that the sale thereby becomes absolute, the issuance thereafter of a final deed of sale is at best a mere formality and
mere confirmation of the title that is already vested in the purchaser. As this Court has said in Manuel vs. Philippine
National Bank, et al.:

Note must be taken of the fact that under the Rules of Court the expiration of that one-year period forecloses
the owner's right to redeem, thus making the sheriff's sale absolute. The issuance thereafter of a final deed of
sale becomes a mere formality, an act merely confirmatory of the title that is already in the purchaser and
constituting official evidence of that fact.(Emphasis supplied.)

Certainly, Lucasan no longer possess any legal or equitable title to or interest over the subject parcels of land; hence, he cannot
validly maintain an action for quieting of title.

Furthermore, Lucasan failed to demonstrate that the notice of embargo and the certificate of sale are invalid or inoperative. In
fact, he never put in issue the validity of the levy on execution and of the certificate of sale duly registered on June 5, 1981. It is
clear, therefore, that the second requisite for an action to quiet title is, likewise, absent.

Concededly, Lucasan can pursue all the legal and equitable remedies to impeach or annul the execution sale prior to the issuance
of a new certificate of title in favor of PBC. Unfortunately, the remedy he had chosen cannot prosper because he failed to satisfy
the requisites provided for by law for an action to quiet title. Hence, the RTC rightfully dismissed Lucasan’s complaint.

Lucasan tries to find solace in our ruling in Cometa v. Court of Appeals. Sadly for him, that case is not on all fours with his case,
for it was not for quieting of title but a petition for issuance of a writ of possession and cancellation oflis pendens. Likewise, in
Cometa the registered owner assailed the validity of the levy and sale, which Lucasan failed to do.

Undoubtedly, Lucasan’s right to redeem the subject properties had elapsed on June 5, 1982. His offer to redeem the same in
1997 or long after the expiration of the redemption period is not really one for redemption but for repurchase. Thus, PBC and
PDIC, its receiver and liquidator, are no longer bound by the bid price. It is entirely within their discretion to set a higher price. As
we explained in De Robles v. Court of Appeals:25

The right to redeem becomes functus officio on the date of its expiry, and its exercise after the period is not really one of
redemption but a repurchase. Distinction must be made because redemption is by force of law; the purchaser at public
auction is bound to accept redemption. Repurchase however of foreclosed property, after redemption period, imposes
no such obligation. After expiry, the purchaser may or may not re-sell the property but no law will compel him to do so.
And, he is not bound by the bid price; it is entirely within his discretion to set a higher price, for after all, the property
already belongs to him as owner.

Accordingly, the condition imposed by the PDIC for the re-acquisition of the property cannot be considered unjust or
unreasonable.

Verily, in several cases,26 this Court allowed redemption even after the lapse of the redemption period. But in those cases a valid
tender was made by the original owners within the redemption period. Even in Cometa, the redemption was allowed beyond the
redemption period because a valid tender of payment was made within the redemption period. The same is not true in the case
before us.

In fine, we find that the RTC correctly dismissed Lucasan’s complaint for quieting of title. Thus, the CA committed no reversible
error in sustaining the RTC.
WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 81518,
are AFFIRMED. Costs against the petitioner.

SO ORDERED.

G.R. No. 163876 July 9, 2008

ROSALINA CLADO-REYES, ALICIA REYES-POTENCIANO, ANTONIO C. REYES, BERNARDO C. REYES, JOVITO C. REYES, MARIA
REYES-DIZON, BERNARDA REYES-LLANZA, deceased represented by BONG R. LLANZA and REYNALDO C. REYES (deceased),
represented by NINO R. REYES, vs. SPOUSES JULIUS and LILY LIMPE,

QUISUMBING, J.:

This petition for review seeks to set aside the Decision 1 dated February 20, 2004 and the Resolution2 dated June 9, 2004, of the
Court of Appeals in CA-G.R. CV No. 70170, which had affirmed the Decision 3 dated January 9, 2001 of the Regional Trial Court
(RTC), Branch 81, of Malolos, Bulacan in Civil Case No. 61-M-95 for quieting of title, reconveyance and damages.
Subject of the present controversy is a 2,445-square meter portion of a certain lot in Guiguinto, Bulacan covered by Transfer
Certificate of Title (TCT) No. RT-32498 (T-199627), 4 having a total lot area of 20,431 square meters, more or less.

On February 1, 1995,5 petitioners filed an action to quiet title, reconveyance and damages against respondents and alleged that
they have been occupying the disputed lot since 1945 through their predecessor-in-interest, Mamerto B. Reyes. They claimed
that during his lifetime, Mamerto had accepted a verbal promise of the former lot owner, Felipe Garcia, to give the disputed lot
to him in exchange for the surrender of his tenancy rights as a tiller thereof. To prove that Mamerto was a former tenant of
Felipe; that during his lifetime he had worked on the lot; and that he owned and possessed the same, 6 petitioners presented two
documents, namely: (1) Certification7dated October 12, 1979 and (2) "Pagpapatunay"8 dated November 17, 1982 allegedly
executed by Simeon I. Garcia, the eldest son of Felipe, attesting to such facts. Petitioners also alleged that whenever respondents
visited the lot, respondent Julius Limpe would promise to deliver the certificate of title to them. However, sometime in October
1994, petitioners received a letter 9 from respondents asserting ownership over the disputed lot.

In their answer, respondents contended that they are the legal owners of the lot by virtue of a Deed of Exchange of Real
Estate10 and Deed of Absolute Sale11 executed on July 5, 1974 and February 28, 1974, respectively, between them and Farm-Tech
Industries, Incorporated. To further assert ownership over the lot, they presented TCT No. T-199627, Tax Declaration Nos.
1517212 and 952913 and realty tax receipts14 of the lot, which were all registered and declared in their names.

In its Decision dated January 9, 2001, the trial court ruled in favor of respondents and held that the certificate of title, tax
declarations and realty tax receipts presented in court indisputably established respondents’ ownership over the lot. The
certificate of title was registered in respondents’ names and the realty tax receipts showed that respondents consistently paid
the corresponding real property taxes. These pieces of evidence, said the trial court, prevail over petitioners’ allegation of an
"undocumented promise" by the former lot owner, which in itself, is ineffective or unenforceable under the law. Accordingly, the
trial court ordered petitioners to reconvey the disputed lot to respondents.

On February 20, 2004, the Court of Appeals affirmed the trial court’s ruling and held that petitioners have no title whatsoever
upon which respondents’ title could cast a cloud, as they were the ones casting doubt on respondents’ title. 15 It held that the
documents allegedly executed by Simeon I. Garcia showed no indicia that the alleged owner, Felipe Garcia, donated the disputed
lot to them. It further held that Simeon I. Garcia was not the real owner of the lot; thus, he could not make an effective
conveyance thereof. Consequently, it upheld respondents’ title over the disputed lot. The decretal portion of the decision reads,

WHEREFORE, the appeal is hereby DISMISSED. The decision of the Regional Trial Court of Malolos, Bulacan, Branch 81, dated
January 9, 2001 is AFFIRMED.

SO ORDERED.16

Petitioners now before this Court raise the sole issue of:

WHETHER THE [PETITIONERS] HAVE A CAUSE OF ACTION TO QUIET TITLE, RECONVEYANCE AND DAMAGES AGAINST
RESPONDENTS.17

Petitioners cite Section 418 of Article XIII of the 1987 Constitution and Section 219 of the Comprehensive Agrarian Reform Law and
state that their title was founded upon those provisions, which were enacted for the benefit of farmers, majority of whom are
educationally deficient, if not uneducated. Next, they contend that respondents are not purchasers in good faith because they
were fully aware of petitioners’ actual possession of the lot when they purchased the same. Conformably, according to
petitioners, respondents are liable for damages under Article 19 20 of the Civil Code of the Philippines.

Respondents counter that they are the true and lawful owners of the disputed lot as evidenced by TCT No. RT-32498 (T-199627),
Tax Declaration Nos. 15172 and 9529 and realty tax receipts, all registered and declared in their names. They claim that they are
buyers in good faith when they purchased the lot from Farm-Tech Industries, Incorporated, free from all liens and encumbrances.
They aver that they are not obliged to go beyond the face of a TCT in the absence of any cloud therein.

Respondents also argue that petitioners’ cause of action must fail because they failed to prove (1) that their predecessor-in-
interest, Mamerto B. Reyes, was a farmer; (2) that the lot was agricultural and not a commercial lot; and (3) that they are
qualified beneficiaries under the agrarian reform law. They point out that Simeon I. Garcia, who allegedly executed the
Certification and "Pagpapatunay," was not presented in court to prove the veracity of the contents of those two documents. They
also aver that the property mentioned in the document "Pagpapatunay" was not specifically described as the property litigated
herein. Thus, according to respondents, those documents have no binding effect on third persons, are hearsay, and have no
probative value.

After considering the submissions of the parties and the issue before us, we are in agreement that the petition lacks merit.
To begin with, an action for quieting of title originated in equity jurisprudence to secure an adjudication that a claim of title to or
an interest in property, adverse to that of the complainant, is invalid, so that the complainant and those claiming under him may
be forever free from any danger of hostile claim. Thus, our courts are tasked to determine the respective rights of the contending
parties, not only to put things in their proper places, but also to benefit both parties, so that he who has the right would see
every cloud of doubt over the property dissipated, and he could afterwards without fear introduce the improvements he may
desire, to use and even to abuse the property as he may deem best. 211avvphi1

Under Articles 47622 and 47723 of the New Civil Code, there are two indispensable requisites in order that an action to quiet title
could prosper: (1) that the plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of
the action; and (2) that the deed, claim, encumbrance or proceeding claimed to be casting cloud on his title must be shown to be
in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy. 24

To prove their case, petitioners merely cited Section 4 of Article XIII of the 1987 Constitution and Section 2 of the Comprehensive
Agrarian Reform Law and stated that their title was founded upon those provisions. They hardly argued on the matter. Neither
was there positive evidence (1) that their predecessor had legal title, i.e., a certificate of land transfer;25 (2) that the lot was an
agricultural lot and not a commercial one as contended by respondents; and (3) that they are qualified beneficiaries under the
Agrarian Reform Law. Time and again we have held that a mere allegation is not evidence, and he who alleges has the burden of
proving the allegation with the requisite quantum of evidence. 26

Next, the documentary evidence petitioners presented, namely, the "Certification" and "Pagpapatunay," did not confirm their
title over the disputed lot. First, original copies of those documents were not presented in court. 27Second, as the appellate court
pointed out, Simeon I. Garcia, the declarant in those documents, was not presented in court to prove the veracity of their
contents.28 Third, even a cursory examination of those documents would not show any transfer or intent to transfer title or
ownership of the disputed lot from the alleged owner, Felipe Garcia, to petitioners or their predecessor-in-interest, Mamerto B.
Reyes. Fourth, petitioners did not bother to adduce evidence that Simeon I. Garcia, as the eldest son of the late Felipe Garcia,
inherited the entire lot as to effectively convey title or ownership over the disputed lot, i.e. thru extrajudicial settlement of the
estate of the late Felipe Garcia. Accordingly, we agree that the documents allegedly executed by Simeon I. Garcia are purely
hearsay and have no probative value.

In contrast, respondents presented evidence which clearly preponderates in their favor. First, the transfer certificate of title, tax
declarations and realty tax receipts were all in their names. Second, pursuant to the Torrens System, TCT No. RT-32498 (T-
199627) enjoys the conclusive presumption of validity and is the best proof of ownership of the lot. 29 Third, although tax
declarations or realty tax receipts are not conclusive evidence of ownership, nevertheless, they are good indicia of possession in
the concept of an owner, for no one in his right mind would be paying taxes for a property that is not in his actual or at least
constructive possession. As we previously held, such realty tax payments constitute proof that the holder has a claim of title over
the property.30

Worth stressing, in civil cases, the plaintiff must establish his cause of action by preponderance of evidence; otherwise, his suit
will not prosper.31 After carefully considering the arguments of the parties, as well as their respective evidence, we unanimously
agree that the petitioners were not able to prove that they have any legal or equitable title over the disputed lot. Thus, we find
no reversible error in the assailed decisions of the courts below.

WHEREFORE, the instant petition is DENIED for utter lack of merit. The Decision dated February 20, 2004 and the Resolution
dated June 9, 2004, of the Court of Appeals in CA-G.R. CV No. 70170 are AFFIRMED. Costs against petitioners.

SO ORDERED.

SPOUSES EDESITO and CONSORCIA RAGASA, vs. SPOUSES GERARDO and RODRIGA ROA and the EX-OFFICIO SHERIFF OF
QUEZON CITY, (June 30, 2006)

CORONA, J.:

Edesito and Consorcia Ragasa filed a complaint 1 against private respondents Gerardo and Rodriga Roa and the public respondent
ex-officio sheriff of Quezon City founded on the following allegations:

On May 10, 1989, plaintiffs [petitioners here] entered into a contract with Oakland Development Resources Corporation for the
purchase in installments of a piece of property, with improvements, located at No. 06, Garnet St., Prater Village II, Diliman, Q.C.
covered by TCT No. 27946 of the Registry of Deeds for Quezon City and more particularly described in a photocopy of TCT No.
27946 […];
Immediately thereafter, plaintiffs took possession of the property covered by TCT No. 27946 of the Registry of Deeds for Quezon
City and resided thereat together with their relatives who continued to occupy the same whenever the plaintiffs would leave for
Italy where they both worked. Hence, from May of 1989 up to the present date, plaintiffs were in continuous and notorious
possession of the property covered by TCT No. 27946 of the Registry of Deeds for Quezon City to the exclusion of others and in
the concept of an owner;

In March of 1992, plaintiffs were able to fully pay for the agreed purchase price of the property covered by TCT No. 27946 of the
Registry of Deeds for Quezon City and accordingly, a Deed of Absolute Sale dated March 12, 1992 was executed by and between
Oakland Development Resources Corporation […] and the original owner’s copy of TCT No. 27946 of the Registry of Deeds for
Quezon City accordingly turned over to them;

However, despite the execution of the Deed of Absolute Sale, Oakland Development Resources Corporation failed to cause the
transfer of title to plaintiffs. On the part of plaintiffs, all the while they thought that the Deed of Absolute Sale and possession of
the original of the owner’s copy of TCT No. 27946 of Registry of Deeds for Quezon City was more than sufficient to protect their
rights and interests over the property;

Sometime March of 1999, during one of the trips of plaintiff Consorcia Ragasa to the Philippines from Italy, upon learning that
Oakland Development Resources Corporation was no longer functional as a corporate entity, she decided to cause the transfer of
registration of TCT No. 27946 of Registry of Deeds for Quezon City herself since the vendor thereof was apparently in no position
to undertake the same;

She was thus surprised to learn from the Registry of Deeds for Quezon City that on April 14, 1995, the property in question was
sold by defendant Ex-Officio Sheriff of Quezon City [a respondent here] to defendants Sps. Roa [respondents here] as the highest
bidder for the price and consideration of P511,000.00 as shown in the Sheriff’s Final Deed of Sale […].

xxx xxx xxx

The levy on attachment and the execution sale undertaken by the Ex-Officio Sheriff’s Office of Quezon City is clearly illegal there
being no notice given by said individual to the occupants of the property in question.

Furthermore, a casual perusal of the Sheriff’s Deed of Sale will reveal that the execution price of P511,000.00 is grossly
inadequate to pay for real properties listed therein with fair market values conservatively estimated atP3,000,000.00

The case was raffled to Branch 2202 of the Quezon City Regional Trial Court (RTC) and was docketed as Civil Case No. Q-99-37908.

Instead of filing an answer, private respondents moved for the dismissal of the complaint on the grounds of prescription and
laches. In an order3 dated February 3, 2000, the RTC granted the motion. Characterizing the suit as an action "upon an injury to
the rights of the plaintiff" which, according to Article 1146 of the Civil Code, 4 must be filed within four years, the RTC held that
petitioners’ action was barred by prescription for having been filed more than four years after the registration of the execution
sale.

Seeking a reversal of the trial court’s order dismissing their complaint, petitioners proceeded forthwith to this Court with the
present petition for review on certiorari 5 raising only a pure question of law.6

We grant the petition.

The trial court’s order of dismissal was predicated on the theory that the suit petitioners commenced was an "action upon an
injury to their rights" contemplated in Article 1146 of the Civil Code. That premise was erroneous. A reading of the allegations in
petitioners’ complaint reveals that the action was essentially one for quieting of title to real property under Article 476 of the
Civil Code which states:

Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim,
encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title.

An action may also be brought to prevent a cloud being cast upon title to real property or any interest therein.

To make out an action to quiet title under the foregoing provision, the initiatory pleading has only to set forth allegations
showing that (1) the plaintiff has "title to real property or any interest therein" 7 and (2) the defendant claims an interest therein
adverse to the plaintiff’s arising from an "instrument, record, claim, encumbrance, or proceeding which is apparently valid or
effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable." 8 Thus, the averments in petitioners’ complaint
that (1) they acquired ownership of a piece of land by tradition or delivery as a consequence of sale and (2) private respondents
subsequently purchased the same piece of land at an allegedly void execution sale were sufficient to make out an action to quiet
title under Article 476.

This being the case, Article 1146 (which refers to actions "upon an injury to the rights of the plaintiff" and "upon a quasi-
delict")9 did not apply. Rather, considering petitioners’ allegation in their complaint that "from May of 1989 up to the present
date, plaintiffs [had been] in continuous and notorious possession of the property…to the exclusion of others and in the concept
of owner[s]"10 ― an assertion private respondents never bothered to dispute ― our ruling in Sapto v. Fabiana11 should apply:

[I]t is an established rule of American jurisprudence (made applicable in this jurisdiction by Art. 480 of the New Civil Code) 12 that
actions to quiet title to property in the possession of the plaintiff are imprescriptible.

"The prevailing rule is that the right of a plaintiff to have his title to land quieted, as against one who is asserting some adverse
claim or lien thereon, is not barred while the plaintiff or his grantors remain in actual possession of the land, claiming to be
owners thereof, the reason for this rule being that while the owner in fee continues liable to an action, proceeding, or suit upon
the adverse claim, he has a continuing right to the aid of a court of equity to ascertain and determine the nature of such claim
and its effect on his title, or to assert any superior equity in his favor. He may wait until his possession is disturbed or his title is
attacked before taking steps to vindicate his right. But the rule that the statute of limitations is not available as a defense to an
action to remove a cloud from title can only be invoked by a complain[ant] when he is in possession. One who claims property
which is in the possession of another must, it seems, invoke his remedy within the statutory period." (citations omitted) 13

Accordingly, petitioners’ action was not subject to prescription.

WHEREFORE, the petition is GRANTED. The February 3, 2000 order of the Regional Trial Court, Branch 220, Quezon City
dismissing petitioners’ complaint is hereby REVERSED and SET ASIDE. Let this case be REMANDEDto the court a quo for further
proceedings.

SO ORDERED.

HEIRS OF JOSE OLVIGA, NAMELY: PLACIDA S. OLVIGA, VIRGILIO OLVIGA, LOLITA OLVIGA, CARMENCITA O. ALPUERTO and
JEANETTE OLILA, vs. THE HON. COURT OF APPEALS, ANGELITA R. GLOR, SERILINA G. JAMON, EMELITA G. MADELA, EMAN G.
MANALO, MYRNA GLOR, FELIPE GLOR, GAUDENCIO GLOR and CORNELIO GLOR, (October 21, 1993)

GRIÑO-AQUINO, J.:

This is a petition to review the decision of the Court of Appeals in CA-G.R. CV No. 30542, affirming in toto the decision of the
Regional Trial Court of Calauag, Quezon ordering the defendants, heirs of Jose Olviga (petitioners herein), to reconvey the land in
dispute to the plaintiffs, heirs of Cornelia Glor (now private respondents),and to pay attorney's fees and the costs of suit.

This case started as an action (Civil Case No. C-883) filed in the Regional Trial Court of Calauag, Quezon by Angelita Glor and her
children against the heirs of Jose Olviga for reconveyance of a parcel of land, measuring 54,406 square meters (5.44 has), more
or less, known as Lot 13, Pls-84 of the Guinayangan Public Land Subdivision.
The court, after due trial, rendered judgment in favor of the private respondents, the dispositive portion of which reads:

WHEREFORE, and considering the foregoing judgment is hereby rendered in favor of the PLAINTIFFS and
against the defendants as heirs of Jose Olviga to reconvey the land in dispute to the plaintiffs as heirs of
Cornelio Glor Sr.; condemning the defendants jointly and severally to pay the plaintiffs attorneys fees of
P5,000.00 plus the costs of the suit. The counterclaim interposed by defendants is dismissed. ( p. 12, Rollo.)

The judgment was appealed to the Court of Appeals by the defendants who raised several factual issues regarding possession
and fraud, as well as legal issues involving prescription and purchaser in good faith, but the appellate court dismissed the appeal
and affirmed in toto the decision of the trial court.

It was established by the evidence on record that the land in question was, in 1950, still forest land when Eutiquio Pureza, then
only twelve years old, and his father cleared and cultivated it. In 1954, they introduced improvements such as, coconut trees,
jackfruit, mangoes, avocado and bananas. When the area was released for disposition, the Bureau of Lands surveyed the same in
1956 in the name of Eutiquio Pureza. Since then, the land has been known as Lot 13, Pls-84 of the Guinayangan Public Land
Subdivision. Godofredo Olviga, a son of Jose Olviga then living with the latter, protested the survey but without respect to a one-
half-hectare portion "sa dakong panulukan ng Amihanan-Silanganan." This protest or "tutol" (Exh. B) of Godofredo Olviga,
brother of petitioners Virgilio Olviga and Lolita Olviga Olila, is of public record in the Bureau of Lands (Exh. B). In said document,
Godofredo Olviga expressly admitted that the lot belonged to Eutiquio Pureza, except the 1/2 hectare portion claimed by him
(Godofredo) which was included in the survey of Pureza's Lot 13.

In 1960, Eutiquio Pureza filed a homestead application over Lot 13. Without his application having been acted upon, he
transferred his rights in said lot to Cornelia Glor in 1961. Neither the homestead application of Eutiquio nor the proposed
transfer of his rights to Cornelio Glor was acted upon by the Director of Lands for reasons that the records of the Bureau of Lands
do not disclose.

In 1967, Jose Olviga obtained a registered title for said lot in a cadastral proceeding, in fraud of the rights of Pureza and his
transferee, Cornelio Glor and his family who were the real and actual occupants of the land.

What must have happened as found by the Court of Appeals, is that since Cornelio Glor, Sr. was sickly, and his wife (now
widowed) Angelita Glor, was unschooled, they failed to follow up Pureza's homestead application over Lot 13 in the cadastral
proceedings in the Municipal Court of Guinayangan Public Land Subdivision, Pls-84, Case 1 (Philcusa-Foa). In fact, they were not
aware of the proceedings. Angelita Glor testified that no notice was ever posted on Lot 13 about the proceedings nor did the
barangay captain, tell her about them. Neither did she receive any notice from the court sheriff or any court employee. This non-
posting of the hearing of the cadastral hearing on the land, or in the barangay hall, was confirmed by petitioner Virgilio Olviga
himself who testified that he did not notice any papers posted on the property in question (tsn, October 18, 1990, pp. 83-84). On
the other hand, petitioner's father Jose Olviga, claimed both Lots 12 and 13, which are adjoining lots, in the same cadastral
proceedings. He falsely omitted in his answer mention of the fact that other persons were in possession of, and claiming adverse
interest in, Lot 13 and that the land had been surveyed for Eutiquio Pureza, the former occupant who sold his interests to private
respondents' parent. Cornelio Glor, in 1961. Glor was Olviga's neighbor. As a result, both Lots 12 and 13 were declared as
uncontested in the name of Jose Olviga (Exh. 7), and were registered in his name in 1967 in Original Certificate of Title, No. 0-
12713 (Exh. 5). In 1971, Olviga requested that OCT No. 0-12713 be split into two (2) TCT's, one each for the two (2) lots. TCT Nos.
T-103823 and T-103824 were issued for lots 12 and 13, respectively. Jose Olviga later transferred Lot 13 to his son-in-law, Jaime
Olila and daughter, Lolita Olviga resulting in the cancellation of TCT. No. 241314 in the names of the spouses (Exh. 3).

It was also established that the spouses Jaime Olila and Lolita Olviga Olila, were not innocent purchasers for value of the land
from their father, and have never been in the possession. The Glors and their predecessor-in-interest (Cornelio Glor Sr., and
Eutiquio Pureza) were the ones found to be in possession of the property.

From said finding, and conclusions, the appellate court in its decision dated January 13, 1992, resolved the issues presented,
thus:

. . ., whether or not plaintiffs' action is really one for quieting of title that does not prescribe; or assuming that
their demand for reconveyance of the lot in question prescribes in ten years, being based on an implied trust,
whether their cause of action should be counted from the date of the issuance of the late Jose Olviga's title
over said lot in 1967 and has, therefore, already prescribed, or whether the prescriptive period should be
counted from the date plaintiffs acquired knowledge of said title sometime in 1988.

The first question should be answered in the affirmative. . . .

xxx xxx xxx

 But even assuming that plaintiffs' action for reconveyance, being based on an implied or constructive trust,
prescribes in ten years, the lower court again correctly ruled that their cause of action should be considered to
have accrued not from the date of registration of the title of Jose Olviga, defendants' predecessor-in-interest,
over the lot in question in 1967, but only from the time the plaintiffs learned of such title in 1988. . . . .

xxx xxx xxx

All in all, therefore, the court a quo did not err in holding that plaintiffs' action against defendants-appellants
for the reconveyance of the lot in question filed on April 10, 1989, or in less than a year after they learned of
the issuance of a title over said lot to Jose Olviga, predecessor-in-interest of defendants, has not yet prescribed.

WHEREFORE, the decision appealed from herein is AFFIRMED in toto, with costs against defendants-appellants.
(pp. 48-51, Rollo.)

Petitioners now seek a review of the above decision. They allege that the present action has already prescribed; (2) the Court of
Appeals erred when it ruled that the private respondents' cause of action accrued not in 1967 but in 1988; (3) that the Court of
Appeals erred when it failed to consider that private respondents as mere homestead transferees cannot maintain an action for
reconveyance; (4) that the Faja and Caragay-Layno cases have no bearing and direct application to the case at bar; and (5) that
private respondents have not proven by preponderance of evidence their ownership and possession of the disputed land.

With regard to the issue of prescription, this Court has ruled a number of times before an action for reconveyance of a parcel of
land based on implied or constructive trust prescribes in ten years, the point of reference being the date of registration of the
deed of the date of the issuance of the certificate of title over the property (Vda. de Portugal vs. IAC, 159 SCRA 178). But this rule
applies only when the plaintiff is not in possession of the property, since if a person claiming to be the owner thereof is in actual
possession of the property, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe.

In Sapto vs. Fabiana, 103 Phil. 683, 686-687, appellants' predecessors sold to appellees in 1931 a parcel of land. The sale was
approved by the Provincial Governor of Davao but was never registered. Possession of the land was, however, transferred to
Fabiana and the latter has been in possession thereof from 1931 up to the present. The widow and children of Samuel Sapto filed
an action to recover the land. This Court in affirming the validity of the sale in favor of appellee (Fabiana) held:

No enforcement of the contract is in fact needed, since the delivery of possession of the land sold had
consummated, the sale and transferred title to the purchaser, registration of the contract not being
indispensable as between the parties. Actually the action for conveyance was one to quiet title, i.e., to remove
the cloud cast upon appellee's ownership by the refusal of the appellants to recognize the sale made by their
predecessors. This action accrued only when appellants initiated their suit to recover the land in 1954.
Furthermore, it is an established rule of American jurisprudence (made applicable in this jurisdiction by Art.
480 of the New Civil Code) that actions to quiet title to property in the possession of the plaintiff are
imprescriptible (44 Am. Jur. p. 47; Cooper vs. Rhea, 39 L.R.A. 930; Inland Empire Land Co. vs. Grant County, 138
Wash. 439 245 Pac. 14).

In Faja vs. Court of Appeals, 75 SCRA 441, 446, this Court likewise reiterated the ruling that:

. . . There is settled jurisprudence that one who is in actual possession of a piece of land claiming to be owner
thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his
right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid
of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on
his own title, which right can be claimed only by one who is in possession. No better situation can be conceived
at the moment for Us to apply this rule on equity than that of herein petitioners whose mother, Felipa Faja,
was in possession of the litigated property for no less than 30 years and was suddenly confronted with a claim
that the land she had been occupying and cultivating all these years, was titled in the name of a third person.
We hold that in such situation the right to quiet title to the property, to seek its reconveyance and annul any
certificate of title covering it, accrued only from the time in possession was made aware of a claim adverse to
his own, and it is only then that the statutory period of prescription commences to run against possessor.

In the case at bar, private respondents and their predecessors-in-interest were in actual possession of the property since 1950.
Their undisturbed possession gave them the continuing right to seek the aid of a court of equity to determine the nature of the
adverse claim of petitioners, who in 198 disturbed their possession.

The other issues raised in the petition are factual.

The Court of Appeals and the trial court correctly based their findings of tact on the testimonies of the parties and their
witnessess. It can be said therefore that those conclusions are based on substantial evidence. No cogent reason exists to disturb
them. As reiterated in a long line of decisions, it is beyond the province of this Court to make its own findings of facts different
from those of the trial court as affirmed by the Court of Appeals (Vda. de Cailles vs. Mayuga 170 SCRA 347; New
Owners/Management of TML Garments, Inc. vs. Zaragosa, 170 SCRA 563). In petitions for review of decisions of the Court of
Appeals, the jurisdiction of this Court is confined to a review of questions of law, except when the findings of fact are not
supported by the records or are so glaringly erroneous as to constitute a serious abuse of discretion (Lim vs. Court of Appeals,
158 SCRA 307; Samson vs. CA, 141 SCRA 194; Republic vs. IAC, 144 SCRA 705). The case at bar does not fall under the exceptions.

WHEREFORE, finding no reversible error in the decision of the Court of Appeals, the petition for review is DENIED, with costs
against the petitioners.

SO ORDERED.