G.R. No.

73002 December 29, 1986

THE DIRECTOR OF LANDS, petitioner,

vs.
INTERMEDIATE APPELLATE COURT and ACME PLYWOOD & VENEER CO. INC.,
ETC., respondents.

D. Nacion Law Office for private respondent.

NARVASA, J.:

The Director of Lands has brought this appeal by certiorari from a judgment of the Intermediate
Appellate Court affirming a decision of the Court of First Instance of Isabela, which ordered
registration in favor of Acme Plywood & Veneer Co., Inc. of five parcels of land measuring 481, 390
square meters, more or less, acquired by it from Mariano and Acer Infiel, members of the Dumagat
tribe.

The registration proceedings were for confirmation of title under Section 48 of Commonwealth Act
No. 141 (The Public Land Act). as amended: and the appealed judgment sums up the findings of the
trial court in said proceedings in this wise:

1. That Acme Plywood & Veneer Co. Inc., represented by Mr. Rodolfo Nazario is a
corporation duly organized in accordance with the laws of the Republic of the Philippines and
registered with the Securities and Exchange Commission on December 23, 1959;

2. That Acme Plywood & Veneer Co. Inc., represented by Mr. Rodolfo Nazario can acquire
real properties pursuant to the provisions of the Articles of Incorporation particularly on the
provision of its secondary purposes (paragraph (9), Exhibit 'M-l');

3. That the land subject of the Land Registration proceeding was ancestrally acquired by
Acme Plywood & Veneer Co., Inc., on October 29, 1962, from Mariano Infiel and Acer
Infiel, both members of the Dumagat tribe and as such are cultural minorities;

4. That the constitution of the Republic of the Philippines of 1935 is applicable as the sale
took place on October 29, 1962;

5. That the possession of the Infiels over the land relinquished or sold to Acme Plywood &
Veneer Co., Inc., dates back before the Philippines was discovered by Magellan as the
ancestors of the Infiels have possessed and occupied the land from generation to generation
until the same came into the possession of Mariano Infiel and Acer Infiel;

6. That the possession of the applicant Acme Plywood & Veneer Co., Inc., is continuous,
adverse and public from 1962 to the present and tacking the possession of the Infiels who
were granted from whom the applicant bought said land on October 29, 1962, hence the
possession is already considered from time immemorial.

7. That the land sought to be registered is a private land pursuant to the provisions of
Republic Act No. 3872 granting absolute ownership to members of the non-Christian Tribes
on land occupied by them or their ancestral lands, whether with the alienable or disposable
public land or within the public domain;

8. That applicant Acme Plywood & Veneer Co. Inc., has introduced more than Forty-Five
Million (P45,000,000.00) Pesos worth of improvements, said improvements were seen by the
Court during its ocular investigation of the land sought to be registered on September 18,
1982;

1
 9. That the ownership and possession of the land sought to be registered by the applicant was
duly recognized by the government when the Municipal Officials of Maconacon, Isabela, have
negotiated for the donation of the townsite from Acme Plywood & Veneer Co., Inc., and this
negotiation came to reality when the Board of Directors of the Acme Plywood & Veneer Co.,
Inc., had donated a part of the land bought by the Company from the Infiels for the townsite
of Maconacon Isabela (Exh. 'N') on November 15, 1979, and which donation was accepted
by the Municipal Government of Maconacon, Isabela (Exh. 'N-l'), during their special session
on November 22, 1979.

The Director of Lands takes no issue with any of these findings except as to the applicability of the
1935 Constitution to the matter at hand. Concerning this, he asserts that, the registration proceedings
have been commenced only on July 17, 1981, or long after the 1973 Constitution had gone into
effect, the latter is the correctly applicable law; and since section 11 of its Article XIV prohibits
private corporations or associations from holding alienable lands of the public domain, except by
lease not to exceed 1,000 hectares (a prohibition not found in the 1935 Constitution which was in
force in 1962 when Acme purchased the lands in question from the Infiels), it was reversible error to
decree registration in favor of Acme Section 48, paragraphs (b) and (c), of Commonwealth Act No.
141, as amended, reads:

SEC. 48. The following described citizens of the Philippines, occupying lands of the public
domain or claiming to own any such lands or an interest therein, but whose titles have not
been perfected or completed, may apply to the Court of First Instance of the province where
the land is located for confirmation of their claims, and the issuance of a certificate of title
therefor, under the Land Registration Act, to wit:

xxx xxx xxx

(b) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of agricultural lands of the
public domain, under a bona fide claim of acquisition or ownership, for at least thirty years
immediately preceding the filing of the application for confirmation of title except when
prevented by war or force majeure. These shall be conclusively presumed to have performed
all the conditions essential to a Government grant and shall be entitled to a certificate of title
under the provisions of this chapter.

(c) Members of the National Cultural minorities who by themselves or through their
predecessors-in-interest have been in open. continuous, exclusive and notorious possession
and occupation of lands of the public domain suitable to agriculture, whether disposable or
not, under a bona fide claim of ownership for at least 30 years shall be entitled to the rights
granted in subsection (b) hereof.

The Petition for Review does not dispute-indeed, in view of the quoted findings of the trial court
which were cited and affirmed by the Intermediate Appellate Court, it can no longer controvert
before this Court-the fact that Mariano and Acer Infiel, from whom Acme purchased the lands in
question on October 29, 1962, are members of the national cultural minorities who had, by
themselves and through their progenitors, possessed and occupied those lands since time
immemorial, or for more than the required 30-year period and were, by reason thereof, entitled to
exercise the right granted in Section 48 of the Public Land Act to have their title judicially confirmed.
Nor is there any pretension that Acme, as the successor-in-interest of the Infiels, is disqualified to
acquire and register ownership of said lands under any provisions of the 1973 Constitution other
than Section 11 of its Article XIV already referred to.

Given the foregoing, the question before this Court is whether or not the title that the Infiels had
transferred to Acme in 1962 could be confirmed in favor of the latter in proceedings instituted by it
in 1981 when the 1973 Constitution was already in effect, having in mind the prohibition therein
against private corporations holding lands of the public domain except in lease not exceeding 1,000
hectares.

2
The question turns upon a determination of the character of the lands at the time of institution of
the registration proceedings in 1981. If they were then still part of the public domain, it must be
answered in the negative. If, on the other hand, they were then already private lands, the
constitutional prohibition against their acquisition by private corporations or associations obviously
does not apply.

In this regard, attention has been invited to Manila Electric Company vs. Castro-Bartolome, et al, 1 where a
similar set of facts prevailed. In that case, Manila Electric Company, a domestic corporation more
than 60% of the capital stock of which is Filipino-owned, had purchased in 1947 two lots in Tanay,
Rizal from the Piguing spouses. The lots had been possessed by the vendors and, before them, by
their predecessor-in-interest, Olimpia Ramos, since prior to the outbreak of the Pacific War in 1941.
On December 1, 1976, Meralco applied to the Court of First Instance of Rizal, Makati Branch, for
confirmation of title to said lots. The court, assuming that the lots were public land, dismissed the
application on the ground that Meralco, a juridical person, was not qualified to apply for registration
under Section 48(b) of the Public Land Act which allows only Filipino citizens or natural persons to
apply for judicial confirmation of imperfect titles to public land. Meralco appealed, and a majority of
this Court upheld the dismissal. It was held that:

..., the said land is still public land. It would cease to be public land only upon the issuance of
the certificate of title to any Filipino citizen claiming it under section 48(b). Because it is still
public land and the Meralco, as a juridical person, is disqualified to apply for its registration
under section 48(b), Meralco's application cannot be given due course or has to be dismissed.

Finally, it may be observed that the constitutional prohibition makes no distinction between
(on the one hand) alienable agricultural public lands as to which no occupant has an imperfect
title and (on the other hand) alienable lands of the public domain as to which an occupant has
on imperfect title subject to judicial confirmation.

Since section 11 of Article XIV does not distinguish, we should not make any distinction or
qualification. The prohibition applies to alienable public lands as to which a Torrens title may
be secured under section 48(b). The proceeding under section 48(b) 'presupposes that the
land is public' (Mindanao vs. Director of Lands, L-19535, July 30, 1967, 20 SCRA 641, 644).

The present Chief Justice entered a vigorous dissent, tracing the line of cases beginning with Carino in
1909 2 thru Susi in 1925 3 down to Herico in 1980, 4 which developed, affirmed and reaffirmed the
doctrine that open, exclusive and undisputed possession of alienable public land for the period
prescribed by law creates the legal fiction whereby the land, upon completion of the requisite
period ipso jure and without the need of judicial or other sanction, ceases to be public land and
becomes private property. That said dissent expressed what is the better — and, indeed, the correct,
view-becomes evident from a consideration of some of the principal rulings cited therein,

The main theme was given birth, so to speak, in Carino involving the Decree/Regulations of June 25,
1880 for adjustment of royal lands wrongfully occupied by private individuals in the Philippine
Islands. It was ruled that:

It is true that the language of articles 4 and 5 5 attributes title to those 'who may prove'
possession for the necessary time and we do not overlook the argument that this means may
prove in registration proceedings. It may be that an English conveyancer would have
recommended an application under the foregoing decree, but certainly it was not calculated to
convey to the mind of an Igorot chief the notion that ancient family possessions were in
danger, if he had read every word of it. The words 'may prove' (acrediten) as well or better, in
view of the other provisions, might be taken to mean when called upon to do so in any
litigation. There are indications that registration was expected from all but none sufficient to
show that, for want of it, ownership actually gained would be lost. The effect of the proof,
wherever made, was not to confer title, but simply to establish it, as already conferred by the
decree, if not by earlier law. ...

3
That ruling assumed a more doctrinal character because expressed in more categorical language,
in Susi:

.... In favor of Valentin Susi, there is, moreover, the presumption juris et de jure established in
paragraph (b) of section 45 of Act No. 2874, amending Act No. 926, that all the necessary
requirements for a grant by the Government were complied with, for he has been in actual
and physical possession, personally and through his predecessors, of an agricultural land of
the public domain openly, continuously, exclusively and publicly since July 26, 1984, with a
right to a certificate of title to said land under the provisions of Chapter VIII of said Act. So
that when Angela Razon applied for the grant in her favor, Valentin Susi had already acquired, by
operation of law not only a right to a grant, but a grant of the Government, for it is not necessary that a
certificate of title should be issued in order that said grant may be sanctioned by the courts, an application
therefore is sufficient, under the provisions of section 47 of Act No. 2874. If by a legal fiction,
Valentin Susi had acquired the land in question by a grant of the State, it had already ceased to be
of the public domain and had become private property, at least by presumption, of Valentin Susi, beyond
the control of the Director of Lands. Consequently, in selling the land in question of Angela
Razon, the Director of Lands disposed of a land over which he had no longer any title or
control, and the sale thus made was void and of no effect, and Angela Razon did not thereby
acquire any right. 6

Succeeding cases, of which only some need be mentioned, likeof Lacaste vs. Director of Lands, 7 Mesina
vs. Vda. de Sonza, 8 Manarpac vs. Cabanatuan, 9 Miguel vs. Court of Appeals 10 and Herico vs. Dar, supra, by
invoking and affirming the Susi doctrine have firmly rooted it in jurisprudence.

Herico, in particular, appears to be squarely affirmative: 11

.... Secondly, under the provisions of Republic Act No. 1942, which the respondent Court
held to be inapplicable to the petitioner's case, with the latter's proven occupation and
cultivation for more than 30 years since 1914, by himself and by his predecessors-in-
interest, title over the land has vested on petitioner so as to segregate the land from the mass of public
land. Thereafter, it is no longer disposable under the Public Land Act as by free patent. ....

xxx xxx xxx

As interpreted in several cases, when the conditions as specified in the foregoing provision are
complied with, the possessor is deemed to have acquired, by operation of law, a right to a grant, a
government grant, without the necessity of a certificate of title being issued. The land,
therefore, ceases to be of the public domain and beyond the authority of the Director of
Lands to dispose of. The application for confirmation is mere formality, the lack of which does not affect the
legal sufficiency of the title as would be evidenced by the patent and the Torrens title to be issued upon the
strength of said patent. 12

Nothing can more clearly demonstrate the logical inevitability of considering possession of public
land which is of the character and duration prescribed by statute as the equivalent of an express grant
from the State than the dictum of the statute itself 13 that the possessor(s) "... shall be conclusively
presumed to have performed all the conditions essential to a Government grant and shall be entitled
to a certificate of title .... " No proof being admissible to overcome a conclusive presumption,
confirmation proceedings would, in truth be little more than a formality, at the most limited to
ascertaining whether the possession claimed is of the required character and length of time; and
registration thereunder would not confer title, but simply recognize a title already vested. The
proceedings would not originally convert the land from public to private land, but only confirm such a
conversion already affected by operation of law from the moment the required period of possession
became complete. As was so well put in Carino, "... (T)here are indications that registration was
expected from all, but none sufficient to show that, for want of it, ownership actually gained would
be lost. The effect of the proof, wherever made, was not to confer title, but simply to establish it, as
already conferred by the decree, if not by earlier law."

4
If it is accepted-as it must be-that the land was already private land to which the Infiels had a legally
sufficient and transferable title on October 29, 1962 when Acme acquired it from said owners, it
must also be conceded that Acme had a perfect right to make such acquisition, there being nothing
in the 1935 Constitution then in force (or, for that matter, in the 1973 Constitution which came into
effect later) prohibiting corporations from acquiring and owning private lands.

Even on the proposition that the land remained technically "public" land, despite immemorial
possession of the Infiels and their ancestors, until title in their favor was actually confirmed in
appropriate proceedings under the Public Land Act, there can be no serious question of Acmes right
to acquire the land at the time it did, there also being nothing in the 1935 Constitution that might be
construed to prohibit corporations from purchasing or acquiring interests in public land to which the
vendor had already acquired that type of so-called "incomplete" or "imperfect" title. The only
limitation then extant was that corporations could not acquire, hold or lease public agricultural lands
in excess of 1,024 hectares. The purely accidental circumstance that confirmation proceedings were
brought under the aegis of the 1973 Constitution which forbids corporations from owning lands of
the public domain cannot defeat a right already vested before that law came into effect, or invalidate
transactions then perfectly valid and proper. This Court has already held, in analogous circumstances,
that the Constitution cannot impair vested rights.

We hold that the said constitutional prohibition 14 has no retroactive application to the sales
application of Binan Development Co., Inc. because it had already acquired a vested right to
the land applied for at the time the 1973 Constitution took effect.

That vested right has to be respected. It could not be abrogated by the new Constitution.
Section 2, Article XIII of the 1935 Constitution allows private corporations to purchase
public agricultural lands not exceeding one thousand and twenty-four hectares. Petitioner'
prohibition action is barred by the doctrine of vested rights in constitutional law.

xxx xxx xxx

The due process clause prohibits the annihilation of vested rights. 'A state may not impair
vested rights by legislative enactment, by the enactment or by the subsequent repeal of a
municipal ordinance, or by a change in the constitution of the State, except in a legitimate
exercise of the police power'(16 C.J.S. 1177-78).

xxx xxx xxx

In the instant case, it is incontestable that prior to the effectivity of the 1973 Constitution the
right of the corporation to purchase the land in question had become fixed and established
and was no longer open to doubt or controversy.

Its compliance with the requirements of the Public Land Law for the issuance of a patent had
the effect of segregating the said land from the public domain. The corporation's right to
obtain a patent for the land is protected by law. It cannot be deprived of that right without
due process (Director of Lands vs. CA, 123 Phil. 919).<äre||anº•1àw> 15

The fact, therefore, that the confirmation proceedings were instituted by Acme in its own name must
be regarded as simply another accidental circumstance, productive of a defect hardly more than
procedural and in nowise affecting the substance and merits of the right of ownership sought to be
confirmed in said proceedings, there being no doubt of Acme's entitlement to the land. As it is
unquestionable that in the light of the undisputed facts, the Infiels, under either the 1935 or the 1973
Constitution, could have had title in themselves confirmed and registered, only a rigid subservience
to the letter of the law would deny the same benefit to their lawful successor-in-interest by valid
conveyance which violates no constitutional mandate.

The Court, in the light of the foregoing, is of the view, and so holds, that the majority ruling
in Meralco must be reconsidered and no longer deemed to be binding precedent. The correct rule, as

5
enunciated in the line of cases already referred to, is that alienable public land held by a possessor,
personally or through his predecessors-in-interest, openly, continuously and exclusively for the
prescribed statutory period (30 years under The Public Land Act, as amended) is converted to private
property by the mere lapse or completion of said period, ipso jure. Following that rule and on the basis
of the undisputed facts, the land subject of this appeal was already private property at the time it was
acquired from the Infiels by Acme. Acme thereby acquired a registrable title, there being at the time
no prohibition against said corporation's holding or owning private land. The objection that, as a
juridical person, Acme is not qualified to apply for judicial confirmation of title under section 48(b)
of the Public Land Act is technical, rather than substantial and, again, finds its answer in the dissent
in Meralco:

6. To uphold respondent judge's denial of Meralco's application on the technicality that the
Public Land Act allows only citizens of the Philippines who are natural persons to apply for
confirmation of their title would be impractical and would just give rise to multiplicity of
court actions. Assuming that there was a technical error not having filed the application for
registration in the name of the Piguing spouses as the original owners and vendors, still it is
conceded that there is no prohibition against their sale of the land to the applicant Meralco
and neither is there any prohibition against the application being refiled with retroactive effect
in the name of the original owners and vendors (as such natural persons) with the end result
of their application being granted, because of their indisputable acquisition of ownership by
operation of law and the conclusive presumption therein provided in their favor. It should
not be necessary to go through all the rituals at the great cost of refiling of all such
applications in their names and adding to the overcrowded court dockets when the Court can
after all these years dispose of it here and now. (See Francisco vs. City of Davao)

The ends of justice would best be served, therefore, by considering the applications for
confirmation as amended to conform to the evidence, i.e. as filed in the names of the original
persons who as natural persons are duly qualified to apply for formal confirmation of the title
that they had acquired by conclusive presumption and mandate of the Public Land Act and
who thereafter duly sold to the herein corporations (both admittedly Filipino corporations
duly qualified to hold and own private lands) and granting the applications for confirmation
of title to the private lands so acquired and sold or exchanged.

There is also nothing to prevent Acme from reconveying the lands to the Infiels and the latter from
themselves applying for confirmation of title and, after issuance of the certificate/s of title in their
names, deeding the lands back to Acme. But this would be merely indulging in empty charades,
whereas the same result is more efficaciously and speedily obtained, with no prejudice to anyone, by
a liberal application of the rule on amendment to conform to the evidence suggested in the dissent
in Meralco.

While this opinion seemingly reverses an earlier ruling of comparatively recent vintage, in a real
sense, it breaks no precedent, but only reaffirms and re-established, as it were, doctrines the
soundness of which has passed the test of searching examination and inquiry in many past cases.
Indeed, it is worth noting that the majority opinion, as well as the concurring opinions of Chief
Justice Fernando and Justice Abad Santos, in Meralco rested chiefly on the proposition that the
petitioner therein, a juridical person, was disqualified from applying for confirmation of an imperfect
title to public land under Section 48(b) of the Public Land Act. Reference to the 1973 Constitution
and its Article XIV, Section 11, was only tangential limited to a brief paragraph in the main opinion,
and may, in that context, be considered as essentially obiter. Meralco, in short, decided no
constitutional question.

WHEREFORE, there being no reversible error in the appealed judgment of the Intermediate
Appellate Court, the same is hereby affirmed, without costs in this instance.

SO ORDERED.

6
G.R. No. L-49623 June 29, 1982
MANILA ELECTRIC COMPANY, petitioner-appellant,
vs.
JUDGE FLORENLIANA CASTRO-BARTOLOME of the Court of First Instance of Rizal,
Makati Branch XV, and REPUBLIC OF THE PHILIPPINES,
respondent-appellees.

AQUINO, J.:p

This case involves the prohibition in section 11, Article XIV of the Constitution that "no private
coporation or associaiton may hold alienable lands of the public domain except by lease not to
exceed on ethousand hectares in area". * That prohibition is not found in the 1935 Constitution.

The Manila Electric Company, a domestic corporation organized under Philippine laws, more than
sixty percent of whose capital stock is owned by Filipino citizens, in its application filed on
December 1, 1976 in the Makati branch of the Court of First Instance of Rizal, prayed for the
confirmation of its title to two lots with a total area of one hundred sixty-five square meters, located
at Tanay, Rizal with an assessed value of P3,270 (LRC Case No. N-9485, LRC No. N-50801).

The Republic of the Philippines opposed theh application on the grounds that the applicant, as a
private corporation,is disqualified to hold alienable public lands and that the applicant and its
prredecessors-in-interest have not been in the open, continuous, exclusive and notorious possession
and occupation of the land for at least thirty years immediately preceding the filing of the application
(pp. 65-66, Rollo).

After the trial had commenced, the Province of rizal and the Municipality of Tanay filed a joint
opposition to the application on the ground that one of the lots, Lot No. 1165 of the Tanay cadastre,
would be needed for the widening and improvement of Jose Abad Santos and E.Quirino Streetsin
the town of Tanay.

The land was possessed by Olimpia ramos before the Pacific war which broke out in 1941. On July
3, 1947, Ramos sold the land to the spouses Rafael Piguing and MInerva Inocencio (Exh. K). The
Piguing sapouses constructed a house therereon. Because the Meralco had installed the "anchor guy"
of its steel post on the land, the Piguing spouses sold the lot to the Meralco on August 13, 1976.

The said land was included in the1968 cadastral survey made in Tanacy by the Bureau of Lands, Plan
AP-04-000902 (Exh. F and H) and was divided into two lots, Lots Nos. 1164 and 1165, so as to
segregate Lot No. 1165 which would be used to widen the two street serving as the land's eastern and
southern boundaries.

The land was declared for realty tax purposes since 1945 and taxes had been paid thereon up to 1977.
It is residential in character as distinguished from a strictly agricultural land. It is not included in any
military reservation. Since 1927, it has formed part of the alienable portion of the public domain.

After trial, the lowre court rendered a decision dismissing the application because in its opinion the
Meralco is not qualified to apply for the registration of the said land since under section 48(b) of the
Public Land Law only Filipino citizens or natural persons can apply for judicial confirmationof their
imperfect titles to public land. The Meralco is a juridical person. The trial court assumed that the land
which it seeks to register is public land.

From that decision, the Meralco appealed to this Court under Republic Act No. 5440.

In contends that the said land, after having been possessed in the concept of owner by Olimpia
Ramos and the Piguing spouses for more than thirty years, had become private land in the hands of

7
the latter, and, therefore, the constitutional prohibition, banning a private corporation from acquiring
alienable public land, is not applicable to the said land.

The Meralco further contends that it has invoke section 48(b) of the Public Land Law, not for itself,
but for the Piguing spouses who, as Filipino citizens, could secure a judicial confirmation of their
imperfect title to the land.

In reply to these contentions, the Solicitor General counters that the said land is not private land
because the Meralco and its predecessors-in-interest have no composition title from the Spanish
government nor possessory information title or any other means for the acquisition of public lands
such as grants or patents (Republic vs. Court of Appeals and De Jesus, L-40912, September 30, 1976,
73 SCRA 146, 157; Director of Lands vs. Reyes, L-27594, November 28, 1975, and Alinsunurin vs.
Director of Lands, L-28144, November 28, 1975; 68 SCRA 177; 195; Lee Hong Hok vs. David, L-
30389, December 27, 1972, 48 SCRA 372, 378-9; Director of Lands vs. Court of Appeals and
Raymundo, L-29575, April 30, 1971, 38 SCRA 634, 639; Padilla vs. Reyes and Director of Lands, 60
Phil. 967, 969; Heirs of Datu Pendatun vs. Director of Lands, 59 Phil. 600, 603).

The Public Land Law provides:

CHAPTER VIII. — Judicial confirmation of imperfect or incomplete titles.

xxx xxx xxx

SEC. 48. The following described citizens of the Philippines, occupying lands of the public
domain or claiming to own any such lands or an interest therein, but whose titles have
not been perfected or completed, may apply to the Court of First Instance of the
province where the land is located for confirmation of their claims and the issuance of
a certificate of title therefor, under the Land Registration Act, to wit:

xxx xxx xxx

(b) Those who by themselves or through their predecessors in interest have been in
open, continuous, exclusive, and notorious possession and occupation of agricultural
lands of the public domain, under a bona fide claim of acquisition of ownership, for at
least thirty years immediately preceding the filing of the application for confirmation of
title except when prevented by war or force majeure. These shall be conclusively
presumed to have performed all the conditions essential to a Government grant and
shall be entitled to a certificate of title under the provisions of this chapter. (As
amended by Republic Act No. 1942, approved on June 22, 1957.)

xxx xxx xxx

SEC. 49. No person claiming title to lands of the public domain not in possession of
the qualifications specified in the last preceding section may apply for the benefits of
this chapter.

We hold that, as between the State and the Meralco, the said land is still public land. It would cease
to be public land only upon the issuance of the certificate of title to any Filipino citizen claiming it
under section 48(b). Because it is still public land and the Meralco, as a juridical person, is disqualified
to apply for its registration under section 48(b), Meralco's application cannot be given due course or
has to be dismissed.

This conclusion is supported by the rule announced in Oh Cho vs. Director of Lands, 75 Phil. 890,
892, which rule is a compendious or quintessential precis of a pervasive principle of public land law
and land registration law, that "all lands that were not acquired from the Government, either by purchase or by
grant, belong to the public domain. An exception to the rule would be any land that should have been in
the possession of an occupant and of his predecessors-in-interest since time immemorial, for such
possession would justify the presumption that the land had never been part of the public domain or
8
that it had been a private property even before the Spanish conquest." (Cariño vs. Insular
Government, 212 U. S. 449, 53 L. ed. 594, 41 Phil. 935 and 7 Phil. 132).

The Meralco relies on the ruling in Susi vs. Razon and Director of Lands, 48 Phil. 424, that "an open,
continuous, adverse and public possession of a land of the public domain from time immemorial by
a private individual personally and through his predecessors confers an effective title on said
possessor, whereby the land ceases to be public" and becomes private property.

That ruling is based on the Cariño case which is about the possession of land by an Igorot and his
ancestors since time immemorial or even before the Spanish conquest. The land involved in
the Susi case was possessed before 1880 or since a period of time "beyond the reach of memory".
That is not the situation in this case. The Meralco does not pretend that the Piguing spouses and
their predecessor had been in possession of the land since time immemorial.

In the Susi case, this Court applied section 45(b) of Act No. 2874 which corresponds to what is now
section 48(b). It was held that the long possession of the land under a bona fide claim of ownership
since July 26, 1894 gave rise to the conclusive presumption that the occupant had complied with all
the conditions essential to a Government grant and was thus entitled to a certificate of title.

On the other hand, in Uy Un vs. Perez, 71 Phil. 508, 510-11, it was held that while occupants of
public land, who have applied for the confirmation of their title, "teian asimismo a su favor la
presuncion juris et de jure de que habian cumplido con todas las condiciones necesarias para la
concesion del titulo; pero hasta que el titulo se expida no tenian el concepto juridico de ser los verdaderos
dueños del terreno in este dejo de pertenecer a los terrenos publico del Estado susceptibles de enajenacion."

That means that until the certificate of title is issued, a pice of land, over which an imperfect title is
sought to be confirmed, remains public land. For that reason in the Uy Un case, it was held that if
that land was attached by a judgment creditor of the applicant, while his application for confirmation
of his imperfect title was pending in the Bureau of Lands, the levy and execution sald of the land
were void.

For that same reason, lands over which an imperfect title is sought to be confirmed are governed by
the Public Land Law. Such lands would not be covered by the Public Land Law if they were already
private lands. The occupants' right to the said lands is characterized in the Uy Un case, not as
ownership in fee simple, but as derecho dominical incoativo.

The Meralco in its concluding argument contends that if the Piguing spouses could ask for the
confirmation of their imperfect title to the said lands, then why should the Meralco, as their
transferee, be denied the same right to register the said land in its name, there being no legal
prohibition for the Piguing spouses from selling the land to the Meralco? This Court is disposing of
that same contention in the Oh Cho case said:

The benefits provided in the Public Land Act (meaning the confirmation of an
imperfect title under section 48[b]) for applicant's immediate predecessors-in-interest
are or constitute a grant or concession by the State; and before they could acquire any
right under such benefits, the applicant's immediate predecessors-in-interest should
comply with the condition precedent for the grant of such benefits.

The condition precedent is to apply for the registration of the land of which they had
been in possession at least since July 26, 1894. This the applicant's immediate
predecessors-in-interest (meaning the Piguing spouses in the instant case) failed to do.

They did not have any vested right in the lot amounting to title which was transmissible to the
applicant. The only right, if it may thus be called, is their possession of the lot which,
tacked to that of their predecessors-in-interest, may be availed of by a qualified person
to apply for its registration but not by a person as the applicant who is disqualified. (75
Phil. 890, 893.)

9
Finally, it may be observed that the constitutional prohibition makes no distinction between (on one
hand) alienable agricultural public lands as to which no occupant has an imperfect title and (on the
other hand) alienable lands of the public domain as to which an occupant has an imperfect title
subject to judicial confirmation.

Since section 11 of Article XIV does not distinguish, we should not make any distinction or
qualification. The prohibition applies to alienable public lands as to which a Torrens title may be
secured under section 48(b). The proceeding under section 48(b) "presupposes that the land is
public" (Mindanao vs. Director of Lands, L-19535, July 30, 1967, 20 SCRA 641, 644).

The lower court;s judgment dismissing Meralco's application is affirmed. Costs against the petitioner-
appellant.

SO ORDERED.

G.R. No. L-55289 June 29, 1982

REPUBLIC OF THE PHILIPPINES, represented by the Director of Lands, petitioner-

appellant,
vs.
JUDGE CANDIDO P. VILLANUEVA, of the Court of First Instance of Bulacan, Malolos
Branch VII, and IGLESIA NI CRISTO, as a corporation sole, represented by ERAÑO G.
MANALO, as Executive Minister, respondents-appellees.

AQUINO, J.:

Like L-49623, Manila Electric Company vs. Judge Castro-Bartolome, this case involves the
prohibition in section 11, Article XIV of the Constitution that "no private corporation or association
may hold alienable lands of the public domain except by lease not to exceed one thousand hectares in
area".

Lots Nos. 568 and 569, located at Barrio Dampol, Plaridel, Bulacan, with an area of 313 square
meters and an assessed value of P1,350 were acquired by the Iglesia Ni Cristo on January 9, 1953
from Andres Perez in exchange for a lot with an area of 247 square meters owned by the said church
(Exh. D).

The said lots were already possessed by Perez in 1933. They are not included in any military
reservation. They are inside an area which was certified as alienable or disposable by the Bureau of
Forestry in 1927. The lots are planted to santol and mango trees and banana plants. A chapel exists
on the said land. The land had been declared for realty tax purposes. Realty taxes had been paid
therefor (Exh. N).

On September 13, 1977, the Iglesia Ni Cristo, a corporation sole, duly existing under Philippine laws,
filed with the Court of First Instance of Bulacan an application for the registration of the two lots. It
alleged that it and its predecessors-in-interest had possessed the land for more than thirty years. It
invoked section 48(b) of the Public Land Law, which provides:

Chapter VIII.—Judicial confirmation of imperfect or incomplete titles.

xxx xxx xxx

SEC. 48. The following-described citizens of the Philippines, occupying lands of the public
domain or claiming to own any such lands or an interest therein, but whose titles have
not been perfected or completed, may apply to the Court of First Instance of the
province where the land is located for confirmation of their claims and the issuance of
a certificate of title therefore, under the Land Register Act, to wit:
10
xxx xxx xxx

(b) Those who by themselves or through their predecessors-in-interest have been in

open, continuous, exclusive, and notorious possession and occupation of agricultural
lands of the public domain, under a bona fide claim of acquisition of ownership, for at
least thirty years immediately preceding the filing of the application for confirmation of
title except when prevented by war or force majeure. These shall be conclusively
presumed to have performed all the conditions essential to a Government grant and
shall be entitled to a certificate of title under the provisions of this chapter." (As
amended by Republic Act No. 1942, approved on June 22, 1957.)

The Republic of the Philippines, through the Direct/r of Lands, opposed the application on the
grounds that applicant, as a private corporation, is disqualified to hold alienable lands of the public
domain, that the land applied for is public land not susceptible of private appropriation and that the
applicant and its predecessors-in-interest have not been in the open, continuous, exclusive and
notorious possession of the land since June 12, 1945.

After hearing, the trial court ordered the registration of the two lots, as described in Plan Ap-04-
001344 (Exh. E), in the name of the Iglesia Ni Cristo, a corporation sole, represented by Executive
Minister Eraño G. Manalo, with office at the corner of Central and Don Mariano Marcos Avenues,
Quezon City, From that decision, the Republic of the Philippines appealed to this Court under
Republic Act No. 5440. The appeal should be sustained.

As correctly contended by the Solicitor General, the Iglesia Ni Cristo, as a corporation sole or a
juridical person, is disqualified to acquire or hold alienable lands of the public domain, like the two
lots in question, because of the constitutional prohibition already mentioned and because the said
church is not entitled to avail itself of the benefits of section 48(b) which applies only to Filipino
citizens or natural persons. A corporation sole (an "unhappy freak of English law") has no nationality
(Roman Catholic Apostolic Adm. of Davao, Inc. vs. Land Registration Commission, 102 Phil. 596.
See Register of Deeds vs. Ung Siu Si Temple, 97 Phil. 58 and sec. 49 of the Public Land Law).

The contention in the comments of the Iglesia Ni Cristo (its lawyer did not file any brief) that the
two lots are private lands, following the rule laid down in Susi vs. Razon and Director of Lands, 48
Phil. 424, is not correct. What was considered private land in the Susi case was a parcel of land
possessed by a Filipino citizen since time immemorial, as in Cariño vs. Insular Government, 212 U.S. 449, 53
L. ed. 594, 41 Phil. 935 and 7 Phil. 132. The lots sought to be registered in this case do not fall within
that category. They are still public lands. A land registration proceeding under section 48(b)
"presupposes that the land is public" (Mindanao vs. Director of Lands, L-19535, July 10, 1967, 20
SCRA 641, 644).

As held in Oh Cho vs. Director of Lands, 75 Phil. 890, "all lands that were not acquired from the
Government, either by purchase or by grant, belong to the public domain. An exception to the rule
would be any land that should have been in the possession of an occupant and of his predecessors-
in-interest since time immemorial, for such possession would justify the presumption that the land
had never been part of the public domain or that it had been a private property even before the
Spanish conquest. "

In Uy Un vs. Perez, 71 Phil. 508, it was noted that the right of an occupant of public agricultural land
to obtain a confirmation of his title under section 48(b) of the Public Land Law is a "derecho
dominical incoativo"and that before the issuance of the certificate of title the occupant is not in the
juridical sense the true owner of the land since it still pertains to the State.

The lower court's judgment is reversed and set aside. The application for registration of the Iglesia Ni
Cristo is dismissed with costs against said applicant.

SO ORDERED.

11
G.R. No. L-26399 January 31, 1981

FERNANDO MARTINEZ, petitioner-appellant,

vs.
FLORENCIA EVANGELISTA, oppositor-appellee.

FERNANDEZ, J.:

This is an appeal certified to this Court by the Court of Appeals 1 since the only issue raised is
whether or not a petition to change the civil status of the registered owner of land from "married to
Florencia Evangelista" to "single" can be filed in a Land Registration Case in the Court of First
Instance under Section 112 of Act No. 496 and whether said court has jurisdiction to decide the
petition, which is purely a question of law.

In a verified petition filed on December 13, 1960 before the Court of First Instance of Manila in
LRC Record No. 11546 Fernandez Martinez, being the registered owner of the lands, sought to
strike out the words "married to Florencia Evangelista" appearing in Transfer Certificates of Title
Nos. 6949, 6950, and 6951 of the Registry of Deeds of the City of Manila on the ground that the
same was so entered by reason of clerical error or oversight, and in lieu thereof the word single" be
substituted, which according to the petitioner is his true and correct civil status, invoking Sec. 112 of
Act 496. To this petition, an opposition was filed by Florencia Evangelista, alleging that the insertion
of the phrase "married to Florencia Evangelista" was not the result of a mere clerical error or
oversight but that there exists a serious and adverse claim which operates to throw the present
petition outside the scope of Sec. 112 of Act 496. The oppositor-appellee submits that the lower
court, sitting as a land registration court, had no jurisdiction to determine the civil status of the
parties. 2

On the basis of the pleadings and annexes thereto, the lower Court denied the petition in the
following order:

After considering the pleadings of both parties, this Court is of the opinion and so
holds that before it shall order the correction of the description of the civil status of
the petitioner appearing in the aforementioned certificates of title from "married to
Florencia Evangelista" to "single", the question of his real civil status should first be
determined by a court of competent jurisdiction in an ordinary action.

Wherefore, finding the above-entitled petition not meritorious, the same is hereby
denied.

SO ORDERED.

Manila Philippines, February 11, 1961.

12
From the above Order, the petitioner appealed to the Court of Appeals assigning the following as
errors alleged committed by the lower Court:

ERRORS ASSIGNED

THE LOWER COURT ERRED IN FINDING THAT THERE WAS AN

ADVERSE CLAIM OR SERIOUS CONTROVERSY SO AS TO MAKE THE
SUMMARY PROCEEDINGS IN SECTION 112, ACT 496 INAPPLICABLE.

II

THE TRIAL COURT ERRED IN NOT TAKING COGNIZANCE OF THE

PROCEEDINGS AND RESOLVING THE CASE ON THE MERITS.

III

THE TRIAL COURT ERRED IN SUMMARILY DENYING THE PETITION. 4

The petition for the cancellation of the words "married to Florencia Evangelista" and in its stead, the
word "single" be substituted was filed under Section 112 of Act 496, Land Registration Act. The
method for amendment or alteration outlined in this section by petition is summary or administrative
in nature. Under the broad provisions of Sec. 112 of Act 496, a certificate of title may be amended or
altered by proper order of the Court. However, this power of correction is subject to a certain
limitation: that there is "unanimity among the parties" or there is no adverse claim or serious
objection on the part of any party in interest; otherwise, the case becomes controversial and should
be threshed out in an ordinary case or in the case where the incident properly belongs. 5

The only issue to be resolved in the instant appeal is whether the opposition of Florencia Evangelista
to the petition to strike out the phrase "married to Florencia Evangelista" in the transfer certificates
of title in question and placing in lieu thereof the word "single" to describe the civil status of the
petitioner is a serious or adverse claim which would bring the case outside the jurisdiction of the land
registration court and thus preclude an award of relief under Sec. 112 of Act 496.

The answer is in the affirmative.

The petitioner contends that the words "married to Florencia Evangelista" were inserted in the
transfer certificates of title in question due to clerical error and oversight.

It is submitted, however, by the oppositor that the said insertion was caused by no reason of clerical
error or oversight but by the voluntary act of the petitioner. 6

Fernando Martinez filed a petition dated January 18, 1946 in the Court of First Instance of Manila, in
G.L.R.O. No. 4004, praying that the three certificates of title in question be issued in his name. In
that petition, he stated under oath that he was "Fernando Martinez, of legal age, Filipino, married to
13
Florencia Evangelista, and a resident of 422 Isabel, Sampaloc, Manila." 7 Based on the said petition,
he was issued the three certificates of title in question wherein his civil status is described as "married
to Florencia Evangelista." On November 28, 1952, he executed a mortgage on two of the properties
covered by the transfer certificates of title in question in favor of the Philippine National Bank
wherein he swore to the fact that he was married to Florencia Evangelista. 8

Likewise, in June 1955, the petitioner-appellant and oppositor-appellee, as spouses, executed an

additional mortgage in favor of the Rehabilitation Finance Corporation on the same properties. 9

Finally, in the income tax returns filed by the petitioner-appellant in 1958 and 1959, it appears that he
is married to Florencia Evangelista. 10

It is thus seen that from 1946 to 1959 or for a period of no less than twelve (12) years, the petitioner-
appellant had consistently maintained under oath that the oppositor- appellee, Florencia Evangelista,
is his wife. Moreover, there is a showing that the petitioner-appellant and oppositor-appellee have
four children namely; Maria Fe Martinez, Fernando Martinez, Jr., Eduardo Martinez, and Victoriano
Noel Martinez. 11

These overt and voluntary acts of the petitioner-appellant give rise to the conclusion that he and the
oppositor-appellee are married. He had expressly alleged that he is married to the oppositor-appellee,
Florencia Evangelista. 12

It is now apparent that before the Court of First Instance of Manila, sitting as a land registration
court, can alter the description of the civil status of the petitioner-appellant in the transfer certificates
of title in question, it will have to receive evidence of and determine the civil status of the petitioner-
appellant. This requires a full dress trial rendering the summary proceeding envisaged in Sec. 112 of
Act 496 inadequate. 13

As correctly pointed out by the Oppositor-Appellee in her brief:

Had the lower court erred and ordered the alteration of the phrase in question, the
spouse Florencia Evangelista would have practically been declared a mere querida, and
the children illegitimate thus resulting in a judgment by a court of law affecting the
status of five people without due process of law. 14

Moreover, this Court has held:

... changes in the citizenship of a person or in his status from legitimate to illegitimate
or from married to not married are substantial as well as controversial, which can only
be established in an appropriate adversary proceeding as a remedy for the adjudication
of real and justifiable controversies involving actual conflict of rights the final
determination of which depends upon the resolution of issues of nationality, paternity,
filiation or legitimacy of the marital status for which existing substantive and
procedural laws as well as other rules of court amply provide. 15

All these lead to the inevitable conclusion that the question to be resolved in the instant petition is
controversial in nature and that there exists an adverse claim or serious opposition on the part of a
party-in-interest, the oppositor- appellee, Florencia Evangelista. It being so, the petition should be
dismissed. The petitioner's recourse would be in an ordinary civil action. 16

WHEREFORE, the appeal is DISMISSED for lack of merit and the order appealed from is hereby
AFFIRMED, without pronouncement as to costs.

SO ORDERED.

G.R. No. L-27358 February 20, 1981

14
IN RE PETITION FOR CANCELLATION OF ENCUMBRANCES ON TCT NOS. 22120
and 22121, REGISTRY OF DEEDS OF NUEVA ECIJA. NICANOR T. SANTOS, petitioner-
appellant.

AQUINO, J.:

This is a summary proceeding under section 112 of Act No. 496 for the cancellation of the
encumbrances annotated on the back of certain Torrens titles. The petition was filed in the land
registration court, Cadastral Case No. 19, LRC Cadastral Record No. 391.

Lots Nos. 1921 and 1956 of the Cuyapo, Nueva Ecija cadastre with areas of fifteen and sixteen
hectares, respectively, are covered by Transfer Certificates of Title Nos. 22121 and 22120 in the
names of the brothers Nicanor T. Santos and Reynaldo T. Santos as co-owners (Exh. F and G).

On the back of those titles, the following encumbrances appear:

Entry No. — 2167 T-20935; Kind — Adverse Claim; Executed in Favor of — Nicanor
T. Santos & Reynaldo T. Santos; Condition & Date of Instrument — The property
described in this title is subject to an adverse claim which has for an object to acquire
ownership of said property (D-100, P. 56, B-I-1 S-1946, Jose M. Santos.)

Entry No. — 2177 T-20935; Kind — Lis Pendens Conditions & Date of Instrument —
Feb. 25, 1946. A petition has been filed with the Court of First Instance of Nueva
Ecija for the purpose of securing the presentation of owner's duplicate of T.C.T. Nos.
20935 and 20936, now pending for action — Feb. 25, 1946.

Entry No. — 2196 T-20935; Kind — Attachment; Executed in Favor of — Remedios T.

Santos; Conditions & Date of Instrument — All rights, interests and participation of
Dionisio C. Bautista in this title has been levied upon indication and insistence of
Remedios T. Santos, in connection with Civil Case No. 7608 of the Court of First
Instance of Rizal — Feb. 26, 1946.

Entry No. — 2201 T-20935; Kind — Attachment,- Executed in Favor of — Manuel

Borja; Conditions & Date of Instrument — All the rights, interest and participation of
Dionisio C. Bautista in this title has been levied, upon indication and insistence of
Manuel Borja, in connection with Civil Case No. 7607 of the Court of First Instance
of Rizal — Feb. 26, 1946.

Entry No. — 2202 T-20935; Kind — First Mortgage; Executed in Favor of — Rizal
Surety & Insurance Co., Inc.; Conditions & Date of Instrument — For the sum of
P3,000.00 together with T.C.T. No. 20935, subject to the terms and conditions
stipulated in the contract. D-16, B-I, S' 45, Conrado S. Carlos, Rizal — Dec. 19, 1945.

Entry No. — 2493, — Kind — Acknowledgment of Mortgage,— Executed in Favor of —

Rizal Surety & Insurance Co., Inc.; Conditions & Date of Instrument — Nicanor T.
Santos & Reynaldo T. Santos hereby acknowledged and recognized
the mortgage referred to above on the parcels of land on this title and on T.C.T. No.
22121, Vol. 89, executed by Dionisio C. Bautista in favor of the Rizal Surety &
Insurance Co., Inc., as superior and first lien and encumbrances thereon, subject to the
terms, conditions and covenants agreed upon in said mortgage — March 20, 1946. (pp.
8-10, Record on Appeal.)

Mortgagee's copies of the two titles were issued to Rizal Surety Insurance Co., Inc. (p. 10, Record on
Appeal).

15
On March 2, 1966, Reynaldo sold to his brother Nicanor his proindiviso one-half share in the two lots
which are located at Barrio Patola, Talugtug (Cuyapo), thus making Nicanor the sole owner thereof
(pp. 11-16, Record on Appeal).

On September 26, 1966, Nicanor T. Santos filed with the Court of First Instance of Nueva Ecija,
Guimba Branch IV, a petition wherein he prayed that Rizal Surety & Insurance Co., Inc. be ordered
to surrender the mortgagee's copies of the titles; that, upon failure to do so, the said copies be
cancelled or declared void, and that the register of deeds be ordered to cancel the said encumbrances.

Attached to the petition was the conformity of Remedios T. Santos, one of the encumbrancers,
certifying that she agreed to the cancellation of Entry No. 2196 regarding the attachment in her favor
(p. 8, Record on Appeal).

The petitioner sent by registered mail copies of his petition to the encumbrancers, Manuel Borja and
Rizal Surety & Insurance Co., Inc. (p. 8, Record on Appeal). The registry return cards, evidencing the
receipt by those encumbrancers of copies of the petition, were presented in evidence (Exh. C and D).
The register of deeds at Cabanatuan City was also furnished with a copy of the petition (Exh. E).

Petitioner Santos alleged in his petition that the said six entries should be cancelled because (a) as to
the first two entries, he and his brother are the interested parties; (b) as to the third entry, the
interested party, his sister, consented to its cancellation and (c) as to the 1945 and 1946 entries in
favor of Borja and the surety company, the same had already prescribed (pp. 4-5, Record on Appeal).

Treating his petition as if it were a motion, the petitioner directed the clerk of court to set it for
hearing on any convenient date.

At the hearing on December 6, 1966, Judge Placido C. Ramos denied the petition in open court on
the ground that the said encumbrances could not be cancelled by means of a "mere petition" in the
land registration case (pp. 16-17, Record on Appeal).

In a letter dated December 19, 1966, the petitioner asked the register of deeds to cancel the
annotation of the attachment in favor of Borja and of the mortgage in favor of the surety company on
the ground of prescription (Exh. B).

The register of deeds replied that, as an official with ministerial duties, he has no power to cancel
those annotations without a court order (Exh. A).

The petitioner appealed Judge Ramos' order to this Court. He reiterates his contention that the
encumbrances in favor of Borja and the surety company should be cancelled without the need of
"taking" to them (as suggested by the lower court) because the enforcement of those liens had
already prescribed and because those lienholders were served by registered mail with copies of his
petition and they did not register any opposition.

We hold that the appeal is devoid of merit. Petitioner's remedy is to file an ordinary action against
Borja, the surety company as mortgagee and the register of deeds so that they may be duly
summoned and the lower court can acquire jurisdiction over them. Service of copies of the petition
by registered mail is not the means for acquiring jurisdiction over their persons.

It may be true that due to the long lapse of time the attachment lien held by Borja and the mortgage
lien of the surety company might have already prescribed but this is not a justification for resorting to
a shortcut in cancelling the liens or for dispensing with the requirements of due process.

An adversary proceeding, even if it would turn out to be a mere formality or simply ceremonial and
ritualistic in character, is the proper procedure.

A court, to avoid injustice or interminable litigations, should act with caution and circumspection in
cancelling liens on real property or, for that matter, in passing upon property rights.

16
The remedy provided for in section 112 of Act No. 496 is summary in nature and is not adequate for
the litigation of issues pertaining to an ordinary civil action (Abella vs. Rodriguez, 116 Phil. 1277;
Cabangcala vs. Domingo, 96 Phil. 124).

The continuing, special and limited jurisdiction of the Court of First Instance, as a land registration
court under section 112, does not empower it to adjudicate issues properly pertaining to ordinary
civil actions such as questions relating to the validity or cancellation or discharge of a mortgage. That issue
should be ventilated in an ordinary civil action (Rehabilitation Finance Corporation vs, Alto Surety &
Insurance Co., Inc., 107 Phil. 386, 390).

In Gov't. of the Republic of the Phils. vs. Laperal, 108 Phil. 860, it was held that the issue of whether
the annotation on a Torrens title of 1937 mortgages executed by a Japanese subject can be cancelled in
1953 by the Court of First Instance, sitting as a land registration court, on the ground that the
mortgage had already prescribed, should be ventilated in an ordinary civil action.

A Court of First Instance, as a land registration court, cannot cancel the annotation of a mortgage on
a Torrens title without the mortgagee's consent even if the mortgagor is willing to post a bond in lieu
of the mortgage obligation (Magdalena Estate, Inc. vs. Yuchengco, 108 Phil. 340).

But where in a prior case, the foreclosure of certain mortgages was adjudged to have already
prescribed (Enriquez vs. Perez, 93 Phil. 246), the Court of First Instance, acting as a land registration
court, has jurisdiction to order the register of deeds to cancel the annotation of the said mortgages on
the Torrens titles covering the mortgaged lots (Director of Lands vs. Enriquez, 93 Phil. 584).

That ruling implies that the issue of whether the foreclosure of the mortgage has already prescribed
should first be determined in a separate action before the annotation of the mortgage encumbrance
can be cancelled by the Court of First Instance under section 112 of Act No. 496 (See Abustan vs.
Ferrer and Golez, 120 Phil. 1281).

In the instant case, the petitioner has not presented any release or cancellation of the mortgage in
favor of the surety company and yet he wants that mortgage to be cancelled. He has to sue the surety
company in order that the prescription of the mortgage, as claimed by him, might be resolved. The
mortgagee should be heard or given a chance to be heard.

WHEREFORE, the lower court's order of dismissal is affirmed. No costs.

G.R. No. L-33794 May 31, 1982

MANILA ELECTRIC COMPANY, petitioner,

vs.
COURT OF APPEALS and PEDRO J. VELASCO, respondents.

MELENCIO-HERRERA, J.:

In this Petition for the review of a Decision of the Court of Appeals, 1 judgment may be rendered on
the basis of the following enumeration of facts:

1. On February 12, 1948, respondent Pedro J. Velasco (VELASCO, for short) purchased three (3)
lots from the People's Homesite and Housing Corporation (PHHC, for short), located at the corner
of the then South D and South 6 Streets of Quezon City.

2. The Deed of Sale, among others, provided that:

(b) The properties herein sold and any other construction that shall be made thereon
shall be used exclusively for residential purposes and no business, industry or factory of
whatever kind or nature shall be allowed or permitted within the premises.
17
 xxx xxx xxx

(c) The vendor ... shall have the right to enter the premises ... for the purpose of ...
installing electric ... lines or any other utility for the community.

xxx xxx xxx

II. This sale is made under the following terms and conditions the violation of any of
which shall entitle the Vendor to rescind this contract and seek the cancellation of the title issued
as a result hereof and to repossess the property and dispose of the same as if there had
been no previous sale thereof, and said terms and conditions shall likewise be
annotated on the certificate or title concerned and considered a burden to the
property.

xxx xxx xxx

III. The terms, burdens, conditions, limitations, incumbrances and restrictions herein
contained shall be binding upon the heirs, executors, administrators, successors
and assigns of the respective parties hereto and any reference to the Vendor or Vendee
herein shall be understood to include their respective heirs, executors, administrators,
successors and assigns.

The foregoing conditions were substantially, but not word for word, annotated on the title issued to
VELASCO.

3. On January 31, 1952, VELASCO sold two of the aforesaid three lots (the PROPERTY, for short)
to petitioner Manila Electric Company (MERALCO, for short), which is the public service company
furnishing electric current to the Manila area, including Quezon City.

4. The following year, MERALCO established a substation within the PROPERTY, the construction
of which "was started in September, 1953 and was finished the following November". 2

5. On November 29, 1954, VELASCO wrote a letter to MERALCO stating, inter-alia:

In mild spirit, the time has come when the undersigned is compelled to call your
attention to a previously anticipated would-be effect of your electric sub-station, in
order to avoid possible bad effects and "repercussions and complications" which
might be too late to remedy.

xxx xxx xxx

The undersigned with his family tried to tolerate for a while, but the severe noise without
let up, plus the electrification of the ground, especially that in which the artesian well
of the undersigned is located, made life of the whole family unbearable, in a residential
district which, by your sub-station, was illegally converted into dangerous factory-like
site. (Exhibit "J")

6. The following year, on February 1, 1955, VELASCO filed a complaint in Civil Case No. Q-1355
of the Court of First Instance of Rizal (the NUISANCE CASE, for short) praying that MERALCO
be ordered "to remove and abate the nuisances herein complained against," with damages. The trial Court
dismissed the complaint but, on appeal to this Court, the dismissal was set aside and, on August 6,
1971, MERALCO was "ordered to either transfer its sub-station at South D and South 6 Streets,
Diliman, Quezon City, or take appropriate measures to reduce its noise at the property line between
the defendant company's compound and that of the plaintiff-appellant to an average of forty (40) to
fifty 50 decibels within 90 days from finality of this decision;" 3

7. In the meanwhile, on November 23, 1957, VELASCO had instituted a complaint in Civil Case No
Q-2716 of the Court of First Instance of Rizal (the CANCELLATION CASE, for short) for the
18
rescission of the sale of the PROPERTY to MERALCO and to collect rentals for the use and
occupation of the PROPERTY while in the latter's possession. The complaint was dismissed by the
trial Court on the ground that the NUISANCE CASE and the CANCELLATION CASE had split
VELASCO'S cause of action such that the CANCELLATION CASE was precluded from being
instituted. On appeal to the Court of Appeals, the judgment of the trial Court was reversed on the
finding that no cause of action was split, considering that abatement of nuisance was distinct and
separate from rescission of the contract of sale in favor of ME RALCO

Upon the recited facts, we have resolved to set aside the decision of the Appellate Tribunal, and to
dismiss the complaint in the CANCELLATION CASE. The factors relied upon are:

THE RIGHT OF ACTION.- The contract of sale between PHHC and VELASCO provided that
only constructions exclusively for "residential purposes" shall be built on the PROPERTY. That
requirement, naturally, was binding on VELASCO himself, as it is also binding on MERALCO as his
assignee. Be that as it may, that contract implies that it is PHHC itself which has the right of action
against any assignee of VELASCO. Cancellation of the title to the PROPERTY would be by virtue of the
condition imposed in the PHHC- VELASCO contract, and not by virtue of the contract between
VELASCO and MERALCO.

The exact relevant wording of the contract between PHHC and VELASCO was as follows:

... the violation of any of which (inclusive of the "residential purposes" restriction) shall entitle the
vendor (PHHC) to rescind this contract and seek the cancellation of the title issued as a result hereof and to
repossess the property.

It will be seen that if the PROPERTY were used by VELASCO himself not for "residential
purposes", PHHC can rescind "this contract", which is the contract between PHHC and VELASCO,
and PHHC can "seek the cancellation of the title" issued as a result "of this contract". The PROPERTY'
having been transferred to MERALCO, PHHC cannot rescind the contract between VELASCO and
MERALCO because PHHC was not a party to that VELASCO-MERALCO contract. PHHC's
redress would be to directly "seek cancellation of the title" of MERALCO, and torepossess the PROPERTY.

Considering that redress for the use of the PROPERTY for non-residential purposes is the
cancellation of the title and repossession by PHHC, it should be clear that the right of action based
on violation of the restriction has to be with PHHC and not with VELASCO. If title to the
PROPERTY is cancelled, and PHHC repossesses, no damage will be suffered by VELASCO who
had already sold and had received the value thereof. The damage will be borne solely by MERALCO.
Hence, it cannot be that VELASCO can have a right of action against MERALCO for violation of
the restriction.

RESIDENTIAL PURPOSES.—As the Court understands it, PHHC's requirement in regards to

"residential purposes" has not been made particularly in reference to the three lots sold to
VELASCO, but it relates to the entirety of a bigger parcel of land subdivided for sale to the public by
PHHC. the term "residential purposes", therefore, should be given a meaning viewed from the
standpoint of PHHC, and not from that of VELASCO.

From the PHHC, or community, point of view, the construction of an electric sub-station by the
local electric public service company within the subdivision can be deemed encompassed within
"residential purposes" for the simple reason that residences are expected to be furnished with
electrical connection. If there is no electric current because of the lack of a sub- station, the
residences within the entire subdivision area could be valueless for residential purposes.

The need for public services in residential areas is even recognized in the PHHC Deed of Sale in
favor of VELASCO which provides that "the vendor ... shall have the right ... to enter the premises
... for the purpose of ... installing water pipes, gas, electric and telephone lines or any other utility for the
community where the property herein involved is located"

19
It may further be pointed out that, in respect of Quezon City as a municipal corporation, the
PROPERTY was within a residential district. Notwithstanding, the authorities of Quezon City
granted a permit for the construction of the sub-station, thereby conceding that a sub-station is not
necessarily non-residential.

CONTRACTUAL ESTOPPEL.- Even if the requirement for "residential purposes" were a

condition imposed by VELASCO himself in the contract of sale between VELASCO and
MERALCO, the former can no longer cancel the contract on the alleged violation of the condition.
When MERALCO erected the sub-station in September, 1953, VELASCO did not object to
its construction as such. In his letter, Exhibit "M", dated September 26, 1953, VELASCO merey asked
for "technical assurance that your electric sub-station is not dangerous to neighbors nor would that
be a nuisance". It could not be that he did not then realize that the sub-station was not a residence.
He must have viewed it as for "residential purposes". According to Exhibit "J", VELASCO's letter of
September 29, 1954, or one year after the sub-station had been established, he "with his family tried
to tolerate (it) for a while". Actually, what was ultimately objected to by VELASCO was the noise of
the sub-station; but there was no original and timely objection to the establishment itself of the sub-
station as being not for residential purposes. If there had been no noise whatsoever from the sub-station,
no controversy would have arisen.

Contracts should be given effect as the parties construe it. "Acts done by the parties to a contract in
the course of its performance are admissible in evidence upon the question of its meaning as being
their own contemporaneous interpretation of , its terms". 4 Thus, VELASCO should be held as
estopped from seeking cancellation of his sale of the PROPERTY to MERALCO because the sub-
station, while it was built, was considered by VELASCO as not violative of the requirement for
"residential purposes". Estoppel against VELASCO has set in.

COLLATERAL ESTOPPEL BY JUDGEMENT-MERALCO had pleaded before the trial Court

that the filing of the NUISANCE CASE "has barred the filing of the complaint in this"
CANCELLATION CASE. The trial Judge dismissed the Complaint on the ground that the
NUISANCE CASE and the CANCELLATION CASE had split a single cause of action and that the
CANCELLATION CASE being the later proceeding was improperly instituted. We agree with the
Appellate Tribunal that there was no split of a single cause of action, because the cause of action for
abatement of nuisance is different from a cause of action for cancellation of contract. However, it
does not mean that a judicial proceeding cannot be barred by a previous case involving another cause
of action. The principle applicable would be estoppel by judgment or, more specifically, "collateral
estoppel by judgment". That procedural matter is treated in 46 Am Jur 2d. pp. 563-566 as follows: 5

Although there are some cases that confine the term "res judicata" to that aspect of the
doctrine which precludes the relitigation of the same cause of action the term, in its
literal meaning of a "matter adjudged", is broad enough to include, in addition, the
other aspect of the doctrine, which precludes the relitigation of the same facts or issues
in a subsequent action on a different cause of action, and the term "res judicata" is,
indeed, so used in numerous cases. In this respect, it has been declared that if a party is
barred from relitigating a matter, it can make little difference to him by what name the
lethal doctrine is called. On the other hand, the confusion and looseness of thought
resulting from the absence of distinctive terms to describe each aspect of the doctrine
has been well pointed out.

The term "estoppel" has frequently been used in connection with the doctrine of res
judicata, not only with respect to the relitigation of particular issues in a subsequent
action on a different cause of action, but also with respect to the relitigation of the
same cause of action. In some cases, the term "estoppel by judgment" has been used to
described the effect of a judgment to preclude relitigation of the same cause of action,
and the phrase, "estoppel by verdict", to describe the effect of the former proceeding
to preclude further litigation of the particular facts on which the jury necessarily made
findings in the former action. The decisions have not, however, been uniform in this
respect, and in some opinions the term 'estoppel by judgment' has been used to

20
 describe the rule precluding the litigation of particular issues in a subsequent action on
a different cause of action. Sometimes, the term "estoppel by record" is so used. The
more recent tendency is to describe the latter aspect of the doctrine of res judicata as a
"collateral estoppel" or a "collateral estoppel by judgment", as distinguished from the
"direct estoppel by judgment" where the earlier and later causes of action are
Identical. 6

More and more, the tendency of procedural law is to obviate multiplicity of suit such that if an issue
has been resolved in one cause of action, it cannot be relitigated in a subsequent case filed on a
different cause of action. In Hoag v. New Jersey, 2L Ed. 2d., 913-919, the following was said by the
United States Supreme Court:

A common statement of the rule of collateral estoppel is that "where a question of fact
essential to the judgment is actually litigated and determined by a valid and final
judgment, the determination is conclusive between the parties in a subsequent action
on a different cause of action". Restatement, Judgments, #68(l). As an aspect of the
broader doctrine of res judicata, collateral estoppel is designed to eliminate the
expense, vexation, waste, and possible inconsistent results of duplicatory litigation. See
Developments in the Law Res Judicata, 65 Hary L Rev. 818, 820. (Emphasis supplied)

In a previous case, this Court has similarly stated:

The basis of the judgment was the stipulation of facts submitted by the parties and their agreement
fixing the liability of the defendant therein for rentals and the manner in which the same was to be
paid by him. It was a final judgment on the merits, and said judgment, under the express provisions
of section 44, paragraph (b) of Rule 39 of the Rules of Court, is conclusive between the parties, not
only as to the question on which the parties made stipulation but also as to any other possible issue
which the parties could have raised in the case. The fact that the defendant in that action, plaintiff-
appellant in this, did not raise that issue in the previous case is no reason for allowing him to raise the
same issue in the action he has instituted to annul the said judgment.The principle of res judicata
applicable is what is known as estoppel by judgment and in the language of Mr. Justice Field in the
case of Cromwell vs. Sac Country, 94 U.S., 351, cited in Peñaloza vs. Tuason, 22 Phil., 303, It is a
finality as to the claim or demand in controversy, concluding parties and those in privity with them,
not only as to every matter which was offered and received to sustain or defeat the claim or demand,
but as to any other admissible matter which might have been offered for that purpose. 7

When VELASCO instituted the NUISANCE CASE, he conceded, which he is now estopped to
deny, that MERALCO had the right to establish the sub-station within the PROPERTY without
violation of the restriction to "residential purposes". What he subsequently alleged, after the sub-
station had become operative, was that the sub-station, because of the generated noise, had become a
nuisance which should be abated. Although the propriety of the establishment of the sub-station was
not a controverted matter in the NUISANCE CASE, it was a tacit admission on the part of
VELASCO, which can form part of an estoppel within the NUISANCE CASE. It would not be
good law to allow him now to take the position, even if he had the right of action, that the
construction of the sub-station violated the restriction provided for by PHHC. If the present
standpoint of VELASCO should be upheld, then the procedurally wrong result would be that, after
this Court had decided that the sub-station can remain within the PROPERTY with reduction of the
noise, the Appellate Tribunal, a subordinate tribunal, can subsequently nullify the decision of this
Court and order the removal of the sub-station from the PROPERTY.

WHEREFORE, considering the foregoing legal considerations, the Decision and Resolution of
respondent Court of Appeals in its CA-G.R. No. 30488-R are reversed, and the Complaint filed in
the case at bar is ordered dismissed.

Without costs.

21
G.R. No. L-47296 August 21, 1980

FELICIDAD MANGALI, BENJAMIN MANGALI, BENITO MANGALI, and JULIO

MANGALI. petitioners,
vs.
THE HONORABLE COURT OF APPEALS, TRINIDAD MANUEL VDA. DE
MENDOZA, BERNARDO MENDOZA, BERNARDO MENDOZA II, JULIANA M.
SAMONTE, PACITA M. SAMONTE, RICARDO MENDOZA, FRANCISCO MENDOZA,
PATRICIA MENDOZA, OLYMPIA MENDOZA, ROMEO MENDOZA, REYNALDO
MENDOZA, and REMEDIOS M. BERNABE, respondents.

BARREDO, J.:

Petition for review of the decision of the Court of Appeals in G.R. No. 6124-SP, a petition
for mandamus and certiorari, filed by herein private respondents Trinidad Manuel Vda. de Mendoza et
al., seeking to compel the Court of First Instance of Bulacan, Br. VII, to give due course to their
appeal, from its decision in its Civil Case No. 4426-M, an action for "quieting of title and/or removal
of clouds and declaration of ownership" which herein petitioners who were the plaintiffs won.

As a fitting background, We deem it best, in the interest of substantial justice, to quote the pertinent
portions of the decision of the trial court in said Civil Case No. 4426-M which private respondents
would like to be appealed notwithstanding that their amended record on appeal as found by the trial
court, was filed out of time:

RESOLUTION OF THE CASE

From the evidence submitted by both parties and particularly from the stipulated facts
found in the PRE-TRIAL ORDER dated August 23, 1974, there is NO DISPUTE
that Lot No. 2 (one of the nine lots included in O.C.T. No. 12192 of the Bulacan
Registry of Property) was sold a retro on October 8, 1929 by the registered owner
Arcadio Mendoza in favor of one Gregorio dela Cruz for P500.00; that Arcadio
Mendoza on May 2, 1935, subsequently, in a deed of absolute sale, sold his 'right to
redeem' to Liberate Mangali for P500.00; and that Liberate Mangali, thru a deed of
reconveyance executed by Gregorio dela Cruz on May 6, 1935, redeemed the property
also for the sum of P500.00. These transactions are not only registered or annotated
on the Original Certificate of Title No. 12192; they have also been expressly stipulated
upon, as can be seen from the PRE- TRIAL ORDER.

(1) On the Issue of Alleged Reconveyance

Now then the allegation by the plaintiffs that Arcadio Mendoza actually returned or
paid back to Liberato Mangali the sum of P500.00 is completely unavailing first
because if true, there was no actual reimbursement to Liberate Mangali of the total
P1,000.00 he is supposed to have spent (P500.00 as the purchase price of Arcadio
Mendoza's 'right to redeem', and P500.00 as the price consideration given by Liberate
Mangali for the reconveyance executed by Gregorio dela Cruz), and secondly, because
there is absolutely NO EVIDENCE that said P500 had been given to Liberato
Mangali with the latter's obligation of giving back to Arcadio Mendoza the ownership
of Lot No. 2 - for the simple reason that the evidence of this Point attempted to be
introduced was NOT ADMITTED by the Court, for to do so, despite defendants'
objection, would be to run counter to the Dead Man's Statute ordained in Rule 130,
Section 20 (a) of the Revised Rules of Court ... (Pp. 117-118, Rec.)

... The annotations and entries in the title are documentary evidence, yes but not of the
alleged reconveyance by Liberato Mangali in favor of Arcadio Mendoza. For the rule is

22
 clear: documentary, not testimonial evidence can be given against a deceased person.
Since there is no documentary evidence on the point, no testimonial evidence on the
same matter can be given effect

— despite documentary evidence on OTHER MATTERS, such as those enumerated hereinabove.

And even conceding that the oral testimony may be regarded as part of the testimony of witnesses,
still this Court holds that the testimony thereon is vague, uncertain, biased, self-serving and
unbelievable. Besides, why was not a written document executed when after an, the other transactions here
were all WRITTEN and REGISTERED? This is undubitable proof that no such reconveyance to
Arcadio Mendoza was ever made by Liberato Mangali. (Pp. 119-120, Rec.)

xxx xxx xxx

(2) On the Issue of the Effect of adverse Possession Prescription and laches on Entries, Conveyances,
Liens, Burdens or Encumbrances Annotated on a Torrens Certificate of Title

It is alleged by the plaintiffs that because neither the defendants nor their
predecessors-in-interest made any attempt or step to procure a separate title for Lot
No. 2 or to make effective their rights under the entries annotated on the Title (from
May 6, 1935 when Liberato Mangali repurchased Lot No. 2 from Gregorio dela Cruz)
up to and until the death of Liberato Mangali on July 9, 1938, and up to and until the
death of Guadalupe Mendoza Mangali on March 30, 1970 (resulting in the fact that up
to now, Original Certificate of Title No. 12192 is still in the name of Arcadio
Mendoza, with the defendants having no separate title or titles under their own names
or of their immediate predeccessors), and because the plaintiffs have been in
possession of the property complete with tax declarations and tax receipt payments —
the defendants have lost whatever rights they previously had over the property by
laches, possession, and prescription with the result that the plaintiffs have already
acquired the ownership of Lot No. 2.

Such a contention against a backdrop of well-settled postulates in the ownership of

land and the registration of title or real rights thereto does not find legal or
argumentative support. Suffice it to state that laches, adverse possession, and
prescription can have absolutely no effect on the ownership of the registered owner or
of his successors-in-interest. This is a cardinal rule under the Land Registration Law.
One important point however has been raised - it is claimed that the defendants are
not and have never been the registered owners of Lot No. 2, and in fact, up to now
Lot No. 2 is still registered in the name of Arcadio Mendoza, ergo, the defendants do
not have the protection of the principle above adverted to. This contention is
COMPLETELY UNTENABLE. In the first place, even assumingarguendo that the
defendants are not the registered owners, still they are undeniably successors-in-
interest of the successor-in-interest (Liberate Mangali) of the registered owner
(Arcadio Mendoza), with respect to Lot No. 2 — the succession of Liberato Mangali
to the ownership of Lot No. 2 being clearly indicated on the Original Title itself in
view of the purchase by Liberate Mangali of the' right to redeem' and the 'redemption
'itself in Entries Nos. 13541 and 13542, respectively. Hence, the defendants' right
cannot be lost by laches, adverse possession, and prescription. Secondly, the real rights
of the defendants to Lot No. 2 have not only been acquired by public instruments
(thus they have acquired ownership) but have actually been registered Hence, in a very
real sense, an examination of the Original Certificate of Title would show that
defendants' father, Liberato Mangali, was himself a REGISTERED OWNER, being a
co-owner of the entire property embraced by the Original Certificate (in the sense that
he was exclusive owner of Lot No. 2, while Arcadio Mendoza was exclusive owner of
the other seven lots embraced in the Title). This was a right obtained by Liberate
Mangali not only as against Arcadio Mendoza but as against the entire world, in view
of the REGISTRATION (thru the entry or annotation) of the real right. Thus
Liberato Mangali and his successors-interest are entitled to the full protection offered

23
 by the principle that laches, adverse possession and prescription cannot militate against
the ownership of the registered owner and his successors-interest. Plaintiffs further
claim that defendants have delayed too much in making effective the rights they may
have acquired by redeeming the property from Gregorio dela Cruz. There was no such
delay for the simple reason that there is NO LAW requiring them to take steps to
obtain a separate title, NO LAW requiring them to make a demand for the physical
possession of the property, NO LAW requiring them to be in actual possession of the
property, NO LAW requiring them to ask for a physical partitioning of the property.
In fact, the rule is that the right to demand partition (whether metaphysical or actual)
does not prescribe, and this is particularly true in the case of owners or co-owners
protected by a Torrens Certificate of Title. Where there is no duty, there can be no
neglect, and where there is no neglect, there cannot be laches. Finally, even if there be
laches, the rule is clear. the ownership of the registered owner and his successors-in-
interest must prevail Thus the case of Alzona v. Capuniton, 4 SCRA 450, 454 (wherein
plaintiffs-appellants were neither children nor grandchildren, but only nephews and
nieces, and where, no right was ever annotated or entered in favor of the parents of Id
nephews and nieces) can have no application in the instant case for as already shown,
the title to Lot No. 2 is effective already in the name of Liberato Mangali and therefore
those of his successors in interest (See Eugenio et al. vs. Perdido, L-7083, May 19,
1955; Guinto v. CA, et al., L-5541, June 25, 1955). In fact it cannot even be said that it is
still Arcadio Mendoza who is the registered owner of Lot No. 2. He is indeed the
registered owner of the seven other lots embraced in the Original Certificate of Title,
but he is NOT THE REGISTERED OWNER OF LOT NO. 2, for the person whose
right to Lot No. 2 is registered is clearly Liberato Mangali — a fact evident in the Original
Certificate of Title itself. (Pp. 120-124, Rec.)

After this decision was promulgated, it appears that within the reglementary period for appeal private
respondents filed their notice of appeal appeal bond and record on ap but due to objections on the
part of petitioners, the trial court issued on January 29, 1976 the disputed order as follows:

In view of the arguments stated in the Opposition to Approval of Plaintiffs' Record on

Appeal dated January 27, 1976 and filed with the Court on January 28, 1976 and that
the arguments therein appear to be reasonable, this Court hereby orders the
defendants (plaintiffs) to include in the Record on Appeal all the pleadings referred to in said
Opposition before the approval thereof can be made (Word in parenthesis and Emphasis
supplied).

Purportedly in complaince with the foregoing order, respondents filed on March 1, 1976 their
amended record on appeal This was Windy nineteen (19) days after their having received the said
order. In consequence, on March 15, 1976, petitioners filed a motion to dismiss the appeal for having
been filed out of time allegedly in violation of Section 7 of Rule 41 which provides:

SEC. 7. Heating and approval of record-Upon the submission for approval of the record on
appeal if no objection is within five (5) days, the trial judge may approve it as presented
or, upon his own motion or at the instance of the appellee, may direct its amendment
by the inclusion of any matters omitted which are deemed essential to the
determination of the issue of law or fact involved in the appeal. If the trial judge orders
the amendment of the record, the appellant, within the time limited in the order, or
such extension thereof as may be granted, or if no time is fixed by the order within ten
(10) days from receipt thereof, shall redraft the record by including therein, in their
proper chronological sequence, such additional matters as the court may have directed
him to incorporate, and shall thereupon submit the redrafted record for approval upon
notice to the appellee, in like manner as the original draft.

After due hearing of such motion to dismiss appeal, on July 2, 1976 the trial court issued the
following order:

24
 The 'Motion to Dismiss Appeal' dated March 15, 1976, after due hearing and after
considering the other pleadings of the parties on the matter, including the 'Opposition
to Motion to Dismiss Appeal' and the 'Reply to Plaintiffs' Opposition to Motion to
Dismiss Appeal' is hereby GRANTED, in view of the failure of the plaintiffs to
perfect their appeal within the period provided for by the Rules of Court, more
specifically, the plaintiffs failed to comply with the order of this Court dated January 29,1976 within
the 10-day period fixed by the Rules of Court.

xxx xxx xxx

WHEREFORE, as already stated, the appeal in this case is hereby DISMISSED.

Their two motion; for reconsideration of the foregoing order having been denied, private
respondents filed with the Court of Appeals the mandamus proceedings which culminated on May
26, 1977 in the judgment now under review thus:

WHEREFORE, the instant petition is granted as prayed for, the orders dismissing the
appeal and the motions for reconsideration are hereby set aside, and respondent judge
is ordered to approve the amended record on appeal and give due course to
petitioners' appeal. The writ of preliminary injunction heretofore issued is declared
permanent. Without pronouncement as to costs.

The motion for reconsideration of said judgment timely filed by respondents was, after respondents
had filed their comment thereon, denied on October 25, 1977, hence the instant petition for review.

Reasoning out its conclusion favorable to respondents' pose, in its impugned decision, the Court of
Appeals held.

... While it may be true that Section 7 has fixed the period of 10 days from receipt of
the order to redraft the record on appeal in case no time as here was limited in the
order, however, it can be fairly and justly deduced from the order directing petitioners
'to include in the record on appeal all the pleadings referred to in the opposition
thereto before the approval thereof can be made' that petitioners were granted 'an
indefinite period of time as would be reasonably necessary' for them to comply
therewith, especially so when the petitioners had already complied with all the
requirements for perfecting their appeal but were merely required to incorporate
additional pleadings or matters because of the opposition submitted after the original
record on appeal was filed.

In the recent case of Micaela Aggabao v. Philippine Commercial & Industrial Bank, et al, G.R.
No. 39833, promulgated on Feb. 20, 1976, the Supreme Court has held thus —

While the trial court did not fix a specific time limit in its May 25, 1973 Order for the
filing of the amended record on appeal it certainty did not mean thereby that the
alternative fixed 10-day period supplied by the cited Rule 'if no time is fixed by the
order' should apply since it had precisely provided therein that it was 'holding in
abeyance' its resolution on the approval of petitioner's original record on appeal until
after incorporation therein of its amendatory order of the preceding day amending the
original decision and of certain objections thereto after which petitioner was yet to
comply with its order to set for hearing the approval of the amended record on appeal
(when under the cited rule, a record on appeal whether original or amended, need not
be set for hearing).

In other words, it is quite clear that the trial court was granting petitioner an indefinite period of time
as would be reasonably necessary for her to comply with the directive in the May 25, 1973 Order,
apparently having in mind that petitioner had already complied with all the requirements for perfecting

25
her appeal but that petitioner was now required to incorporate additional pleadings and orders because
of its amendment of the original decision after the filing of the original record on appeal

That the trial court did not hereby mean that the 10-day period supplied by the cited
Rule 'if no time is fixed by the order' should apply and that this was likewise the
understanding of the parties is manifestly evident from the following factual and
considerations: —

— No objection was presented by respondents to the indefinite period of time granted

by the trial court, during which time it would 'hold in abeyance' its resolution on the
approval of the record on appeal:

— Upon the lapse of the Rule's ten-day period on June 29, 1973, no motion to dismiss
the appeal was filed by respondents:

— On the contrary, after the lapse of over a month without the amended record an appeal having
been filed the trial court issued motu propio its July 31, 1973 Order this time specifying a definite
period and giving petitioner a final fixed period of 20 days within which to do so, under pain of
having her appeal declared abandoned, and again no objection whatever was heard
from respondents; and

— Petitioner's period for perfecting her appeal after the trial court amended its
decision per its previous day's amendatory Order of May 24, 1973 commenced anew
for another thirty (30) days and could not legally be shortened to ten (10) days, even if
the trial court were minded (which it obviously was not) to so expressly shorten it in its
May 24, 1973 Order.

Under the facts and circumstances of record, the Court is satisfied that since the
amended record on appeal was admittedly filed within the 20-day extended period
granted in the trial court's July 31, 1973 Order, the lesser ten-day period supplied by
Rule 41, Section 7 'if no time is fixed in the order' finds no application, and mandamus
should issue for the giving of due course to the appeal timely perfected by petitioner-
appellant (Emphasis supplied).

True it may be that the facts and circumstances in the Aggabao case are not entirely
similar to those obtaining in the case at bar. However, it is clear in that case that the
Supreme Court would allow as it did the granting of an 'indefinite period of time as
would be reasonably necessary' for a party to comply with the trial court's order to
incorporate additional pleadings and orders in the record on appeal. Likewise, it is clear
that when respondent judge- in the instant case simply ordered petitioners 'to include
in the Record on Appeal all the pleadings referred to in said Opposition before the
Approval thereof can be made', he had granted them an 'indefinite period of time' as
would be reasonably necessary' to comply therewith. Such being the case, the 10-day
rule should not be applied, more so strictly, as respondent judge did, considering that
petitioners filed their compliance only 9 days after the tenth day and there is no
showing whatsoever of needless delay or that prejudice of any kind had been caused to
private respondents thereby. As ably argued by petitioners in their Second Motion for
Reconsideration dated August 27, 1976, in the Aggabao case the counsel forgot to file
the amended record on appeal for more than one (1) month from receipt of the court's
order, not merely 9 days as in the case at bar, and yet the Supreme Court ruled that no
delay was incurred and the order meant to give Aggabao 'an indefinite period of time
as would be reasonably necessary for her to comply with the directive in the May 25,
1973 Order'. It even sustained the trial court's order extending the period to comply
for another 20 days.

In this regard, it may be well to cite the rule that the provisions of the Rules of Court
should be liberally construed to the end that the object thereof be promoted and to

26
 assist the parties in obtaining just, speedy, and inexpensive determination of every
action and proceeding (Sec. 2, Rule 1). Hence, it has been held that 'a party who, acting
in good faith and misinterpreting Section 7, Rule 41 of the Rules of Court, submitted,
within the period allowed him by the court, an amended record on appeal which,
although substantially in conformity with said provision, was not strictly in accordance
with the same as regards matters merely of form, may be allowed to comply fully
therewith by submitting another, even beyond the reglementary period' (Emphasis supplied;
Francisco The Revised Rules of Court, Annotated & Commented, Vol. II, p. 113).

Moreover, the respondent judge's opinion in his order dated July 2, 1976, dismissing
the appeal, to the effect that the doctrine in the case of Silvestra Deymos Vda. de Oyson v.
Hon. Demetrio G. Vinzon, et al., 8 SCRA 455 allowing the incorporation of additional
pleadings within a reasonable period is no longer applicable as it was promulgated on
July 26, 1963 when the former Rules of Court was still in force, wherein the 10-day
period was not fixed, unlike the present Rules of Court, cannot be sustained view of
the decision of the Supreme Court in Rodriguez v. Court of Appeals, 68 SCRA 262,
promulgated much later or on Nov. 28, 1975, the pertinent portion of which is as
follows:

As early as the case of Vda. de Oyzon v. Vinzon, We ruled that: 'The fact that the
amended record on appeal was submitted after the reglementary 30-day period, did not
render the perfection thereof untimely, because the amended record on appeal is
deemed to have been filed on the presentation of the original which was done within
the reglementary period.' As We expansion in Philippine Independent Church v. Juana
Mateo et al., amendment presupposes the existence of something to be amended, and,
therefore, the tolling of the period should relate back to the of the pleading sought to
be amended ...' .

Here, private respondents do not dispute the fact that the amended record on appeal
was filed within the fifteen-day period prescribed by the court. It was for this reason
that the trial court declared that the amended record on appeal 'is in order and in
accordance with law'. As We emphasized in Berkenkotter v. Court of Appeal and Morales, et
al., v. Court of Appeals, et al, 'no trial judge in his right mind and who is aware of the
serious responsibilities of his office, would approve a record on appeal that was not
timely filed.' Indeed, the trend of the of this Court is to afford every party-litigant and
amplest opportunity for the proper and just determination of his cause, freed from the
constraints of technicalities. (Pp. 6065, Record.)

We are, to be sure,, in fun agreement with the Court of Appeals in that in the disposition of judicial
controversies, reasonable and justifiable liberality in the application of procedural rules should be the
guiding principle, where otherwise substantial justice would be jeopardized. Inadequacies and errors
of form should be overlooked when they would defeat rather than help the judge in arriving at a just
and fair result as to the essential merits of any case. But all these is not to say that the rules fixing
periods within which certain acts must be done either by the parties or by the court come within the
realm of the above rules of liberality in adjective law. Public interest demands that there be limits of
time in the procedure laid down for the administration of justice, lest through inadvertence,
negligence or indolence, not to speak of malice, suits may be unduly prolonged, thereby giving truth
to that lamentable situation of justice delayed, justice denied. In other words, when it comes to
compliance with time rules, the Court cannot afford unexcusable delay.

In a long line of decisions, this Court has repeatedly held that while the rules of
procedure are liberally construed, the provisions on reglementary periods are strictly applied as
they are deemed indispensable to the prevention of needless delays and necessary to the orderly and
speedy discharge of judicial business' (Alvero vs. de la Rosa, et al 42 O.G. 316; Valdez vs.
Ocumen et al. L-14536, Jan. 30, 1930). The same is true with respect to the rules on the manner
and periods for perfecting appeals(Gutierrez vs. Court of Appeals, 26 SCRA 32). (Emphasis
supplied), (Provincial Sheriff of Rizal vs. Court of Appeals, 68 SCRA 329, 336.)

27
We reiterated the same ruling in Macabingkil vs. People's Homesite and Housing Corporation, thus:

... These provisions of the Rules of Court prescribing the time within which certain acts must
be done or certain proceedings taken, are considered absolutely indispensable to the
prevention of needless delays and to the orderly discharge of judicial business (Alvero
vs. de la Rosa, 76 Phil. 428). The time can be extended only if a motion for extension is filed
within the time or period provided therefor. In the case at bar, no motion for extension was
ever filed by petitioner Macabingkil before March 23, 1968, and, as such, the said
decision of March 1, 1968 has already become final and executory. To reiterate,
perfection of an appeal in the manner and within the period prescribed by law is not
only mandatory but jurisdictional and failure to perfect an appeal as required by the Rules
has the effect of rendering the judgment final and executory. (Emphasis supplied). (L-
29080, August 17, 1976, 72 SCRA 326, 339.)

In Trans-Philippines, Inc. vs. Court of Appeals, et al., G. R. No. L-42184, July 29, 1977, 78 SCRA 154, We
went as far as to emphasize once more that non-compliance with the period for appeal is
jurisdictional We held:

Private respondent Luzon Stevedoring Corporation, however, argues that it filed this
record on appeal within the period granted by the trial court in its Order of February
4, 1975 and it does not have to plead fraud, accident, mistake or excusable negligence
to secure approval of its record on appeal. This argument fails to consider the
circumstance that at the tune when the trial court issued its Order of February 4, 1975,
the period to file the record on appeal had already expired, hence the trial court had no
longer any authority to grant the extension as there was no longer any period to extend. Compliance
with the period provided by law for the perfection of an appeal is not merely mandatory
but it is jurisdictional requirement and failure to perfect an appeal within the reglementary period
renders the judgment of the court final (Antique Sawmills, Inc. v. Zayco, et al, 17 SCRA 316)

Indeed, very apt in the light of the circumstances of the case at bar, is what We said in Workmen's
Insurance Co., Inc. vs. The Court of Appeals, 40 SCRA 124; and We quote:

For as Justice Reyes also observed for the Court in Bello vs. Fernando, 'the right to
appeal is not a natural right nor a part of due process; it is merely a statutory privilege, and
may be exercised only in the manner and in accordance with the provisions of law.' It has long been
recognized that strict compliance with the Rules of Court is indispensable for the
prevention of needless delays and for the orderly and expeditious dispatch of judicial
business. For Petitioner to seek exception for its failure to comply strictly with the
statutory requirements for Perfecting its appeal strong compelling reasons such as serving the
ends of justice and preventing a grave miscarriage thereof must be shown, in order to warrant the
Court's suspension of the Rules. No such reasons have been shown to exist in this case.
(Emphasis supplied).

The above doctrinal principles on liberality in the application of procedural rules qualified by the
indispensability, in the greater interest of justice and public policy, of adhering strictly to the time
limit set by the rules, specially in making an appeal which after all is neither a matter of expressed
constitutional right nor inherently a part of due process being fun. fundamental and element and,
therefore, ought to be within the easy grasp of every practicing member of the bar and, more so, of
every worthy occupant of a judicial office, it may be said that in a sense the real issue in the instant
case actually revolves around the proper construction of the order in question of the trial judge,
quoted earlier, regarding the filing and approval of the respondents' amended record on appeal.
Stated differently, Our problem is whether by the terms of his order, the trial judge gave private
respondents an indefinite period within which to amend their record on appeal or, on the contrary,
fixed no time for the filing of such amendment.

As can be seen, His Honor ordered respondents "to include in the Record on Appeal all the pleadings referred
to in said Opposition (petitioners) before the approval thereof can be made." Constructing such order, the Court

28
of Appeals held that "it can be fairly and justly deduced from" therefrom "that petitioners (herein
private respondents) were granted 'an indefinite period of time as would be reasonably necessary' for
them to comply therewith. ..." And to support such construction, the case of Aggabao vs. Philippine
Commercial & Industrial Bank, 69 SCRA 354 is cited. We disagree with such ratiocination of
respondent court.

The very opening statement of Aggabao betrays the appellate court's erroneous reliance thereon.
This Court said:

The Court reverses the appealed decision of the Court of Appeals and issues the writ
of mandamus for the giving of due course to petitioner's timely appeal from the trial
court's orders that it granted petitioner-appellant at first an indefinite reasonable period
within which to file an amended record on appeal due to its having amended its
original decision and later a final fixed period of twenty days, the limited ten-day
period supplied by Rule 41, section 7 'if no time is fixed in the order' for the filing of
an amended record on appeal has no application and the trial court gravely erred in
rejecting the appeal timely filed within the extended period granted by it. (69 SCRA at
p. 355.)

Indeed, the exact words of the trial court's pertinent order in said case were as follows:

The resolution on the approval of the record on appeal filed by plaintiff is held in
abeyance until after the amendatory order of this Court dated May 24, 1973 and the
objections thereto by defendant Espada spouses shall have been incorporated in said
record on appeal, after which the plaintiff is ordered to set for hearing the approval of
the amended record on appeal with notice to opposing parties. (69 SCRA at p. 356.)

And explaining why such order did not amount to 'no time ... fixed by the order' to file the amended
record on appeal, Mr. Justice Teehankee pointed out that:

While the trial court did not fix a specific time limit in its May 25, 1973 Order for the
filing of the amended record on appeal it certainly did not mean thereby that the
alternative fixed 10-day period supplied by the cited Rule 'if no time is fixed by the
order' should apply since it had precisely provided therein that it was 'holding in
abeyance' its resolution on the approval of petitioner's original record on appeal until
after incorporation therein of its amendatory order of the preceding day amending the
original decision and of certain objections thereto after which petitioner was yet to
comply with its order to set for hearing the approval of the amended record on appeal
(when under the cited Rule, a record on appeal, whether original or amended, need not
be set for hearing).

In other words. it is quite clear that the trial court was granting petitioner an indefinite
period of time as would be reasonably necessary for her to comply with the directive in
the May 25, 1973 Order, apparently having in mind that petitioner had already
complied with all the requirements for perfecting her appeal but that petitioner was
now required to incorporate additional pleadings and orders because of its amendment
of the original decision after the filing of the original record on appeal.

That the trial court did not thereby mean that the 10-day period supplied by the cited
Rule 'if no time is fixed by the order' should apply and that this was likewise the
understanding of the parties is manifestly evident from the following factual and legal
considerations: —

— No objection was presented by respondents to the indefinite period of time granted

by the trial court, during which time it would 'hold in abeyance' its resolution on the
approval of the record on appeal:

29
 — Upon the lapse of the Rule's ten-day period on June 29, 1973, no motion to dismiss
the appeal was filed by respondents:

— On the contrary, after the lapse of over a month without the amended record on
appeal having been filed, the trial court issued motu proprio its July 31, 1973 Order this
time specifying a definite period and giving petitioner a final fixed period of 20 days
within which to do so, under pain of having her appeal declared abandon and again no
objection whatever was heard from respondents; and

— Petitioner's period for perfecting her appeal after the trial court amended its
decision per its previous day's amendatory Order of May 24, 1973 commenced anew
for another thirty (30) days and could not legally be shortened to ten (10) days, even if
the trial court were minded (which it obviously was not) to so expressly shorten it in its
May 25, 1973 Order. (69 SCRA at pp. 358-359.)

None of those peculiarities in Aggabao just mentioned exist in the case at bar. Here there was no
amended decision, the promulgation of which naturally renewed the period for appeal. In the present
case petitioners opportunely objected to any construction of the court's questioned order in the sense
claimed by private respondents, unlike in Aggabao where the party concerned made no timely move
to correct any misimpression as to the period granted by the court. To put it differently, in Aggabao,
there seemed to be a common understanding by both parties that the appellant had been granted an
indefinite period to amend her record on appeal. In the instant case, there was no such common
understanding. On the contrary, soon after petitioners noted that private respondents filed their
amended record on appeal beyond the ten (10) day period fixed in Section 7 of Rule 41, they filed
their motion to dismiss the appeal on March 15, 1976.

Moreover, it should be emphasized that in relation to the point in dispute, there is a world of
difference between 'granting an indefinite period", on the one hand, and "fixing no time", on the
other, for the filing of an amended record on appeal, just as there is a difference also between
"holding in abeyance" a court's resolution on the approval of a record on appeal until certain thing
required by it are done, on the one hand, and on the other, "order(ing) defendants to include in the
Record on Appeal" certain pleadings "before approval thereof can be made." As We read this latter
order, there is no indication at all in it of any intent on the part of the court otherwise hold in
abeyance its action on the record on appeal until defendants would comply. What is clear to Us is
that defendants were ordered to amend their record on appeal, and the court would act on its
approval after they have made the amendment, without fixing the time when such amendment
should be made, much less giving the defendants, herein private respondents, an indefinite period, or
all the time they wanted, within which to comply. Our construction of said order is that the judge
simply ordered private respondents to amend their record on appeal, and he would act on its
approval after such amendment has been made, assuming, as the rule commands, that said
amendment is filed within ten (10) days from receipt of the order, the court not having fixed any
time therefor, much less given them an indefinite period. That the judge did not intend, unlike in
Aggabao, to give respondents an indefinite period is confirmed in the very subsequent orders His
Honor issued dismissing their appeal and denying their motion for reconsideration of such denial.

All that We need to add to the foregoing to sustain the petition herein is to say that both the case
of Rodriguez vs. Court of Appeals, 6 SCRA 262, and the one therein cited, that of Vda. de Oyson vs.
Vinson, 8 SCRA 455, are inapplicable here. The Oyson case was decided before Section 7 of 'Rule 41,
now providing for the ten (10) day period where no time is fixed by the court, was amended in 1964.
Under the 1940 rules, the period was simply such reasonable time as might be needed under the
circumstances. Rodriguez, on the other hand, involved merely the omission by appellants to state in
the record on appeal when the order to amend the same was received by them, thereby making it
impossible to determine on the face of the record on appeal whether or not the amended one was
filed within the reglementary period. As the Court was by then already pursuing its more liberal
policy of not adhering literally to the words of the provision, in the application of Section 1 (a) of
Rule 50, We deemed such omission as not fatal. Rodriguez did not deal with a disputed application
of Section 7 of Rule 41.

30
In the end, what the Court considers to be most important to perceive is where in the circumstances
of this particular case substantial justice lies. Is it in the right, surely not constitutional, of the
respondents to appeal, or, is it in the probability or improbability of the judgment of the trial court
being reversed, considering the nature of the case, the ground on which such judgment is based and
the legal principles involved, as they unmistakably appear on the face of the judgment itself. In other
words, are We to liberalize the application of the rules regarding the period within which an appeal is
to be taken in a given case, when it is already obvious to Us from the terms of the judgment in issue
that the chances of its reversal or modification is remote, if not improbable, based on the Court's
careful appreciation of all relevant and extant circumstances? Let it be recalled at this point, that
according to the decision of the Bulacan court, petitioners' evidence consist of transactions in their
favor duly registered in accordance with Act 496, the Land Registration Act, whereas, on the other
hand, private respondents have nothing but the words of their witness to support a claim of
repurchase of real estate. We hold that to allow an appeal questionably taken from a decision that
appears to be one that can be hardly improved upon is to sacrifice substantial justice by delaying it at
the altar of pure technicality and misunderstood liberality.

IN VIEW OF ALL THE FOREGOING, the decision of the Court of Appeals herein under review
is reversed and the judgment of the Court of First Instance of Bulacan, Branch VII in Civil Case No.
4426-M aforementioned is hereby declared final and executory, with costs against private
respondents.

G.R. No. L-56874 November 6, 1981

FRUCTUOSO AGUILAR, CONSTANCIA AGUILAR, DELFIN AGUILAR, RUFINA

AGUILAR, CEFERINO AGUlLAR, CIPRIANO AGUILAR, LUCIA AGUILAR, and
FILOMENA AGUILAR, petitioners,
vs.
HONORABLE LEUTERIO E. CHIU, THE PROVINCIAL SHERIFF OF NEGROS
ORIENTAL, THE REGISTER OF DEEDS OF NEGROS ORIENTAL and MARIA G.
GIMONY, respondents.

ABAD SANTOS, J.:

This is a petition to annul certain orders of the respondent judge in the light of the facts herein
narrated.

Fructuoso, Constancia, Delfin, Rufina, Ceferino, Cipriano, Lucia and Filomena all surnamed Aguilar
are the petitioners herein. They are the legitimate children of Tomas Aguilar now deceased. The
parents of Tomas were Miguel and Isidra Aguilar who owned Lot No. 2345 of the Tanjay [Negros
Oriental] Cadastre. Miguel and Isidra sold a portion of Lot No. 2345 to the Central Azucarera de
Bais Thereafter, the spouses and the Central claimed their respective portions in Cadastral Case No.
12, G. L. R. O. Cad. Rec. No. 311 of Negros Oriental and on April 26, 1927, the cadastral court
adjudicated the lot, in accordance with a division made by the Bureau of Lands as early as September
17, 1924, as follows: Lots 2345-A, 2345-C and 2345-D to the Aguilars and Lot 2345-B to the Central
Later the division was amended with the approval of the cadastral court on January 24, 1929, so that
Lot 2345-A became Lot 5281, Lot 2345-B became Lot 5282, Lot 2345-C became Lot 5283, and Lot
2345-D became Lot 5284. Pursuant to the decision of the cadastral court, Lots 5281, 5283 and 5284
were registered on May 21, 1929, in the name of the Aguilar spouses and Original Certificate of Title
No. 8922 was issued to them. When the spouses died, Tomas Aguilar as the only heir, became the
owner of the said lots and he was issued T.C.T. No. 968 which cancelled O. C. T. No. 8922, on
December 9, 1932. And when Tomas died on March 10, 1978, he was succeeded by his children who
are the petitioners herein

This petition concerns Lot 5284 only. In a "Motion to Amend Technical Description of Lot No.
5284" dated May 3, 1974, which Maria G. Gimony filed in Cadastral Case No. 12, LRC Record No.
31 1, she prayed that, "The technical description of Lot 5284 of Tanjay Cadastre, covered new by
Transfer Certificate of Title No. T-968, be cancelled and/or amended to technical description for

31
Lot No. 2345-D, which is the true technical description for Lot No. 5284 of Tanjay Cadastre."
Gimony claims that "Lot No. 2345-D became Lot No. 5284 and in the technical description thereto,
the area is ONE THOUSAND FORTY-THREE (1,043) square meters, per amendment plan, Psd-
1595-Adm., approved by the Director of Lands on January 27, 1933. However, in the old and
unamended technical description of said Lot No. 5284, the area of which is ONE THOUSAND
ONE HUNDRED NINETY (1,190) square meters more or less. Hence, there is a difference of 147
square meters. This 147 square meters forms part of the property of herein private respondent, under
Certificate of Title No. T-15107 of Tanjay Cadastre, Negros Oriental of which respondent had been
in possession since then up to the present." According to the uncontroverted allegations of the
petitioners:

... The aforesaid motion [to amend technical description of Lot 52841 was filed on
May 6, 1974, and a notice thereof of its scheduled hearing was set on May 8, 1974. For
reason of lack of notice and failure of respondent Tomas Aguilar to receive a copy of
said motion, the latter likewise failed to be present during the hearing thereof, and
taking advantage of the absence of her adversary movant, private respondent in this
case, presented her evidence exparte. Nevertheless, in order not to be construed as
having waived his right to have a day in court, said respondent Tomas Aguilar filed a
"MANIFESTATION" (ANNEX "H") dated May 9, 1974, asking the lower court a
period of 10 days to file his opposition thereto. The lower court acting on said
manifestation issued an ORDER (ANNEX " I ") dated May 9, 1974, granting the
request of respondent Tomas Aguilar but the evidence already presented by private
respondent had not been set aside. In compliance with said ORDER respondent
Tomas Aguilar filed an "OPPOSITION TO AMEND TECHNICAL
DESCRIPTION OF LOT 5284" (ANNEX "J") dated May 17, 1974. After the issues
were joined an ORDER (ANNEX "K") dated May 29, 1974, was issued resetting the
hearing of pending incidents to June 19, 1974. 'Thereafter, a subsequent ORDER
(ANNEX "L") dated July 10, 1974, was issued fixing the hearing of said motion to July
31, 1974.

Before the hearing of said motion (ANNEX "A") private respondent filed a
"SUPPLEMENTAL, MOTION" (ANNEX "M") dated August 20,1974, and another'
MOTION' (ANNEX ''N") dated March 4, 1975, praying for an appointment of a
Commissioner preferably a Geodetic Engineer to conduct a relocation survey of Lot
No. 5284. On the basis of the later motion the lower court, inspite of lack of notice to
Tomas Aguilar, issued an ORDER (ANNEX "O") dated March 12, 1975, appointing
Geodetic Engineer Bonifacio Catarata as Commissioner who, incidentally, happened
to have previous contractual relations with private respondent involving the
relocations of her other parcels of land. He was the very surveyor whom private
respondent hired to locate the existence of the alleged amended technical description
ANNEX "P") of Lot No. 5284 as shown on the bottom thereof marked as ANNEX
"P-1 ", which she later used as evidence in her "MOTION TO AMEND
TECHNICAL DESCRIPTION OF LOT 5284".

It is definitely established in Transfer Certificate of Title No. 968 of Lot No. 5284 that
its original certificate of title was issued on the 21st day of May, 1929. On the other
hand the alleged amended technical description (ANNEX "P") of said lot indicates
that the amendment survey of the same was approved on January 27, 1933, about 4
years after from the issuance of said Original Certificate of Title No. 8922 covering the
lot aforementioned. The existence of said circumstances established that ANNEX "P"
was obtained from a spurious source because it is highly irregular procedure for an
amendment survey to be approved after title to the land had long been issued.

Dissatisfied of the aforesaid ORDER (ANNEX "O") for denying him of his day in
court, having received no notice of the hearing thereof and a copy of said motion, said
respondent Tomas Aguilar filed a 'MOTION FOR RECONSIDERATION'
(ANNEX "Q") dated April 14, 1975, and the same was denied in the ORDER

32
 (ANNEX "R") dated April 23, 1975. As a consequence of said denial, respondent
Tomas Aguilar filed a "SECOND MOTION FOR RECONSIDERATION"
(ANNEX ''S'') dated June 25, 1975. Then on July 21, 1975, an ORDER (ANNEX "T")
was issued giving 15 days to private respondent to file her opposition thereto. Said
order was complied with by the latter when she filed an "OPPOSITION TO
RESPONDENT'S SECOND MOTION FOR RECONSIDERATION" (ANNEX
"U") dated August 2, 1975. Subsequently, an ORDER (ANNEX ''V'') dated January
22, 1976, was issued denying respondent Tomas Aguilar's "SECOND MOTION FOR
RECONSIDERATION".

In order to implement the ORDER (ANNEX "O") appointing Geodetic Engineer

Bonifacio Catarata as Commissioner, private respondent filed a "MOTION FOR
EXECUTION" (ANNEX ''W'') dated May 26, 1976, and the same was granted in
pursuant to an ORDER (ANNEX "X") dated September 23, 1976. In compliance
with said order the above named Commissioner conducted a relocation survey of Lot
No. 5284 and after completion of his relocation work he submitted a
"COMMISSIONER'S REPORT" (ANNEX "Y") dated December 16, 1976, for
approval.

On January 4, 1977, private respondent filed a "MOTION FOR EXECUTION OF

THE COMMISSIONER'S REPORT" (ANNEX ''Z'').

Considering, in his opinion, that the "COMMISSIONER'S REPORT" appears to be

inconsistent with the facts established in the records of the aforesaid cadastral
proceedings, as well as, the existing conditions obtaining on the parcel in controversy,
respondent Tomas Aguilar filed his "OPPOSITION TO COMMISSIONER'S
REPORT" (ANNEX "A-1 ") dated February 28, 1977, and a "SUPPLEMENT TO
OPPOSITION TO COMMISSIONER'S REPORT" (ANNEX ''B-1'') dated April 26,
1977, both were denied in an ORDER (ANNEX ''C-1'') dated May 25, 1977, and
approving the "COMMISSIONER'S REPORT". Respondent Tomas Aguilar, as his
only and last remedy available under the ordinary course of law, to protect and save his
property from being adjudicated to private respondent without fair trial filed a
"MOTION FOR RECONSIDERATION" (ANNEX ''D-1'') dated June 30, 1977, to
the ORDER (ANNEX ''C-1'')approving the "COMMISSIONER'S REPORT".

However, during the pendency of the proceedings in connection with private

respondent's "MOTION TO AMEND TECHNICAL DESCRIPTION OF LOT
5284", respondent Tomas Aguilar died on March 10, 1978, and by reason of his death
his counsel in order to give notice to the lower court of such fact, filed a
"MANIFESTATION" (ANNEX "E-1") dated October 18, 1978. Upon receipt of a
copy of said manifestation, private respondent filed a "COUNTER-
MANIFESTATION AND OPPOSITION" (ANNEX "F-1") dated December 29,
1978. As a rejoinder thereto counsel for respondent Tomas Aguilar filed a "REPLY
TO MOVANT'S COUNTER-MANIFESTATION AND OPPOSITION" (ANNEX
"G-1") dated February 12,1979.

Before the resolution of said incidents an ORDER (ANNEX "H-1 ") dated December
22, 1980, was issued granting a writ of execution to the "COMMISSIONER'S
REPORT". Another ORDER (ANNEX "I-I ") dated March 17, 1981, directing the
Register of Deeds of Negros Oriental to cancel Original Certificate of Title No. 8922
or Transfer Certificate of Title No. 968 and issue a new transfer certificate of title to
Lot No. 5284, was issued in pursuant to a "MOTION" (ANNEX ''J-1") filed by
private respondent dated March 11, 1981, which the petitioners as successors- in-
interest of the late Tomas Aguilar had not been furnished a copy thereof.

The pivotal question in this case is whether or not the technical description of a registered parcel of
land can be amended so as to reduce its area by a mere motion in the original cadastral proceedings

33
long after the decree of registration had been entered. It is to be noted that Lot 5284 was originally
registered as early as May 21, 1929, whereas the motion to amend was filed on May 6, 1974, after the
lapse of 45 years on the basis of an amendment survey said to have been approved on January 27,
1933, or about four years after the issuance of the OCT. It is to be noted also that a Court of First
Instance acting as a land registration court has but limited jurisdiction.

The private respondent does not indicate the statutory basis to support the procedure she has
adopted namely: a motion in the original cadastral proceedings, for the purpose of amending the
technical description of Lot 5284. In fact, she had disclaimed the use of Sec. 112 of Act No. 496
which allows, upon court order, an erasure, alteration, or amendment to be made on the registration
book after the entry of the certificate of title and it is well she does for said section specifically denies
to the court of land registration "authority to open the original decree of registration."

Private respondent states "that the Court of First Instance acting as a cadastral court may correct the
technical description in the Certificate of Title if the boundaries of the land can be determined.
(Domingo vs. Santos, 55 Phil. 361, 373-374 cited in the Philippines Torrens System by Ponce, 1964
Ed., at P. 206). " We have read both the case and the book and neither supports the statement
aforequoted more specifically that a Court of First Instance acting as a cadastral court has the power
attributed to it. Domingo was an ordinary civil action to recover a piece of land which had been
registered under Act No. 496. And this is what Ponce says in his cited book: "If the boundaries of
the land can be determined, the technical description in the certificate of title may be corrected
without cancelling the decree. To nullify and cancel final decrees by reason of faulty technical
description would lead to chaos (Domingo vs. Santos, 55 Phil. 361, 373-4). " (Ponce, op cit)

The jurisprudence in point is Cuyugan, et al. vs. Sy Quia 24 Phil. 567 [1913] where this Court speaking
through Justice Moreland said:

Moreover, contests arising over the location of division lines are actions in personam
and must be tried in the ordinary courts of law and not in the Court of Land
Registration. They are actions involving the title to real estate, damages for illegal
detention, for the cutting of timber, or the taking of crops. Sometimes they are for
ejectment and sometimes for trespass. After the land has been registered the Court of
Land Registration ceases to have jurisdiction over it for any purpose and it returns to
the jurisdiction of the ordinary courts of law of the Islands for all subsequent
purposes. The only authority remaining in the Court of Land Registration after its
decree becomes final is that given to it by Section 112 of Act No. 496. That section
does not convey authority to conduct a proceeding like the present or to take
cognizance in any way of disputes subsequently arising between adjoining owners and
owners of the land registered.

WHEREFORE, the petition is granted and all proceedings in the court a quo in connection with the
Motion to Amend Technical Description of Lot 5284 are hereby annulled and set aside. Costs against
the private respondent.

G.R. No. L-51269 November 17, 1980

DEVELOPMENT BANK OF THE PHILIPPINES, petitioner,

vs.
SPOUSES RUFO TOMELDAN and SOLEDAD CASTELO, SPOUSES PEDRO
TOMELDAN and MAGDALENA CABURIAN, SPOUSES FERNANDO GABRIANA and
CATALINA TOMELDAN, GERARDO TOMELDAN, AND THE COURT OF FIRST
INSTANCE OF PANGASINAN, respondents.

ABAD SANTOS, J.:

34
This is a certiorari petition to set aside the Order, dated November 7, 1978, of the respondent judge
which dismiss Civil Case No. D-3888 of the Court of First Instance of Pangasinan, Branch VIII,
Dagupan City, on the ground that the cause of action has prescribed.

The facts, in brief, are: The Development Bank of the Philippines (DBP) loaned to the private
respondents on June 23, 1963, a sum of money which they promised to pay jointly and severally. The
obligation was secured by a real estate mortgage which was extra-judicially foreclosed when the
borrowers failed to pay the loan. There was a deficiency or an unpaid balance after the foreclosure so
DBP sued the borrowers for the deficiency on March 14, 1977, in Civil Case No. D-3888 aforesaid.
All of the defendants were declared in default except for Fernando Gabriana and Catalina Tomeldan
who were represented by Atty. Santos Areola.

On November 27, 1978, the respondent judge issued the questioned Order which reads as follows:

Set for hearing on November 20, 1978 was the preliminary question raised in the
answer as to whether the cause of action of the plaintiff has already prescribed. On the
said date Atty. Feliciano Gramata appeared for the plaintiff. There was no appearance
for defendants despite due notice.

Atty. Gramata argued that plaintiff Bank's cause of action has not prescribed
manifesting that on September 15, 1967 plaintiff bank foreclosed extra-judicially the
properties subject of the mortgage and sold the same at public auction. The highest bid
was put up by the plaintiff bank and because the highest bid was not enough to
completely write off the loan there was a deficiency judgment in the sum of more than
P26,000.00. Atty. Gramata argued further that the cause of action on the deficiency
payment accrued the next day, September 16, 1967 and that the action has not
prescribed because it was filed six months before the ten-year period counted from the
time of the accrual of the cause of action.

This legal incident was considered submitted for resolution in the said Order 6f
November 20, 1978. The Court does not agree with the theory of the plaintiff.

The cause of action is for deficiency judgment which is in the nature of an action for
the recovery of a sum of money.

The Court believes that the cause of action of the plaintiff is covered by the five-year
prescriptive period. In a case for recovery of deficiency franchise tax, the Supreme
Court ruled that the cause of action is covered by the five-year prescriptive period.
(Commissioner of Internal Revenue vs. Iligan Electric and Ice Plant, Inc., et al., 29
SCRA 634). Also, because no express provision covers prescription of action to
recover a sum of money, the same must, therefore, fall under Article 1149 of the Civil
Code which provides that all other actions whose periods are not fixed in the code or
in other laws must be brought within five years from the time the cause of action
accrues.

Atty. Gramata admitted at the hearing of November 20, 1978 that The cause of action
on the deficiency payment accrued on September 16, 1967. Accordingly, this action
should have been filed within five years from the said date. The complaint of claim
having been flied on March 14, 1977, the cause of action already prescribed at the time
the case was filed.

WHEREFORE, this case is hereby dismissed on the ground that the cause of action
has prescribed.

Hence the present petition where the only issue is whether or not the cause of action of DBP has
already prescribed. Our opinion is that it has not yet prescribed.

35
There is agreement that DBP's cause of action accrued on September 16, 1967, so that when the case
was filed on March 14, 1977, less than ten years had elapsed.

We do not agree with the trial court that DBP's cause of action is a residual one and therefore falls
under Article 1149 of the Civil Code which reads: "Art. 1149. All other actions whose periods are not
fixed in this Code or in other laws must be brought within five years from the time the right of
action accrues." As will be shown below, specific provisions of the Civil Code are instead applicable.
Nor is the case of Commissioner of Internal Revenue vs. Iligan Electric and Ice Plant, Inc., No. L-23081, Sept.
30, 1969, 29 SCRA, which the trial court has cited applicable to the case at bar. In said case We held
that an action to recover a sum of money as erroneously refunded franchise tax is covered by the
five-year prescriptive period specifically provided in the Tax Code which is a special law and
therefore prevails over a general law like the Civil Code.

DBP contends that its cause of action is governed by Art. 1144 of the Civil Code because the
obligation of the private respondents to pay the deficiency is one created by law. That article reads:

Art, 1144. The following actions must be brought within ten years from the time the
right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment.

It has been held that the mortgagee in both real and chattel mortgage. by law the right to claim for
the deficiency resulting from the price obtained in the sale of the property at public auction and the
outstanding obligation at the time of the foreclosure proceedings. (Philippine Bank of Commerce vs. De
Vera, L-18816, Dec. 29, 1962, 6 SCRA 1026; Bank of P.I. vs. Olutanga Lumber Co., 47 Phil. 20
[1924]; Ablaza vs. Ignacio, 103 Phil. 1151 [1958].) Applied to the present case, DBP has the right to
claim payment of the deficiency after it had foreclosed and, correlatively, the private respondents
have the corresponding obligation created by law to pay such deficiency Hence, the ten-year period
provided in Art. 1144 applies to the case at bar.

It can also be said that DBP's action can be governed by par. (1) of Art. 1144, supra, because in suing
for the deficiency it is merely seeking to enforce the written Promissory Note secured by a mortgage
which the private respondents executed.

Finally, a suit for the recovery of the deficiency after the foreclosure of a mortgage is in the nature of
a mortgage action because its purpose is precisely to enforce the mortgage contract Such being the
case Article 1142 of the Civil Code is likewise applicable to the instant case. Said provision reads:
"Art. 1142. A mortgage action prescribes after ten years."

The fact that DBP has tarried for almost ten years before filing a deficiency suit does not speak well
of the professionalism of its personnel. We note from its complaint that the deficiency as of
December 13, 1967, soon after the foreclosure, amounted to only P15,830.56, representing principal,
interest and litigation expenses. But that amount has ballooned for DBP's prayer asks, "That
defendants be ordered to pay solidarily to the plaintiff the sum of P26,513.72 representing plaintiff's
claim for deficiency on defendants' loan amount as of February 28, 1977, principal and interests
included, plus interests thereon at the rate of 7% per annum daily commencing on February 9, 1977
until the total obligation is fully paid." In this light, DBP's actuations are deserving of severe criticism
to say the least. It is our hope that DBP shall exert every effort to effect an equitable compromise
with the private respondents with the aid of the trial court.

Let a copy of this decision be sent to the Chairman of the Board of Governors, Development Bank
of the Philippines, for his information and guidance.

36
WHEREFORE, the Order dismissing Civil Case No. D-3888 is set aside and the respondent judge is
hereby ordered to continue its trial. No special pronouncement as to costs.

.R. No. L-28201 December 14, 1979

EVARISTO COLOMA, MODESTA COLOMA, AMADEA COLOMA, NICOLASA

COLOMA, VICTORIO COLOMA and FORTUNATA COLOMA, petitioners,
vs.
HON. PLACIDO C. RAMOS, District Judge of the Court of First Instance of Nueva Ecija,
4th Judicial District, Guimba Branch, and Spouses JESUS T. GARCIA and DIONISIA
DOMINGO, respondents.

AQUINO, J.:

This case is about the issuance of a writ of possession in a land registration case.

The Court of First Instance of Nueva Ecija in its decision of January 16, 1959 ordered the
registration of a one-half proindiviso share of Lot 2541 of the Guimba, Nueva Ecija cadastre in favor
of Maria Lucas, a widow, and the other one-half proindiviso share in favor of her six children named
Evaristo, Modesta, Nicolasa, Amadea, Victorio, and Fortunata, all surnamed Coloma. It directed the
issuance of the corresponding decree and title after the finality of the decision and the payment of
the realty taxes. (Cadastral Case No. 22, G.L.R.O. Record No. 400).

From that decision, Manuela T. Lucas and the spouses Jesus T. Garcia and Dionisia Domingo
appealed. The Court of Appeals on January 27, 1964 affirmed the lower court's judgment (CA-G.R.
No. 25252-R, 5 CAR 1250). The petition for the review of the decision of the Court of Appeals was
dismissed by this Court in its resolution of May 6, 1964 in L-22593, Garcia vs. Coloma.

After the record was returned to the lower court, the Colomas filed a motion dated January 20, 1965
for a writ of possession. They alleged that the decision adjudicating Lot 2541 to them and their
mother had already become final and executory and that the lot was in the possession of the Garcia
spouses.

On the other hand, the Garcia spouses filed a petition dated May 31, 1965 for the review of the
decision on the ground of fraud. The Colomas opposed the petition.

The claim of the Colomas was later confined to Lots 2541-B and 2541-C, two of the three
subdivision lots composing Lot 2541. The third subdivision lot, Lot 2541-A, was adjudicated to the
Philippine National Railways on February 7, 1967 (p. 57, Rollo).

The lower court in its order of October 21, 1966 denied the petition for review but suspended action
on the petition for a writ of possession because of the pendency of the PNR's claim for Lot 2541-A.
(Presumably, that claim suspended also the issuance of the decree and title.)

In denying the petition for review, the lower court reasoned out that the issues involved in the
alleged fraud were resolved in its decision and could no longer be re-litigated. The Garcias appealed
to this Court from the order of denial.

Because of the pendency of that appeal, the lower court in its order of July 11, 1967 denied the
petition for a writ of possession. That order is being assailed in this certiorari and mandamus case
which was filed on October 25, 1967.

It is relevant to state that the appeal of the Garcia was dismissed by this Court in its resolution of
February 5, 1968 in L-28041, Director of Lands vs. Coloma; Jesus T. Garcia, et al., claimants-petitioners
and appellants. The appeal was dismissed because the Garcias did not comply with the material data

37
rule found in section 6, Rule 41 of the Rules of Court. The dismissal of the appeal became final on
June 26, 1968.

In view of the dismissal of the Garcias' appeal, which signified that the lower court's denial of their
petition for review on the ground of fraud had become final, the lower court's refusal to issue the
writ of possession has no more leg to stand on or has become baseless. We hold that the writ of
possession should now be issued in favor of the Colomas and against the Garcias.

The power of the Court of First Instance to issue a writ of possession in a land registration case is
sanctioned by the generally accepted principles for the pragmatic administration of justice and by
section 5 of Act No. 1108 and section 3 of Act No. 1680, amending section 17 of Act No. 496, in
relation to section 10 of Act No. 2347 and section 8(d), Rule 39 and sections 5(c) and 6, Rule 135 of
the Rules of Court (Romasanta vs. Platon, 62 Phil. 857, 858).

The judgment in a land registration case adjudicating ownership to a person impliedly carries with it
the delivery of possession, if he is deprived thereof, because the right of possession is inherent in that
of ownership (Romasanta vs. Platon, supra; Abulocion vs. CFI of Iloilo, 100 Phil. 554).

It is the duty of the registration court to issue the writ of possession when asked for by the successful
claimant (Demorar vs. Ibañez and Poras, 97 Phil. 72). And pending appeal from a decision granting
an application for registration, the trial court, for special reasons, may issue a writ of possession to
the winning party in accordance with section 144 of the Code of Civil Procedure, now section 2, Rule
39 of the Rules of Court (Director of Lands vs. Court of First Instance of Tarlac, 51 Phil. 805;
Soriano vs. Aquino, 31 Phil. 176, 179).

WHEREFORE, the lower court's order of July 11, 1967 is reversed and set aside. It is directed to
issue the corresponding writ of possession sought by the petitioners. No costs.

G.R. No. L-32811 March 31, 1980

FELIPE C. ROQUE, petitioner,

vs.
NICANOR LAPUZ and THE COURT OF APPEALS, respondents.

Tañada, Sanchez, Tañada, Tañada for petitioner.

N.M. Lapuz for respondent.

GUERRERO, J.:

Appeal by certiorari from the Resolution of the respondent court 1 dated October 12, 1970 in CA-
G.R. No. L-33998-R entitled "Felipe C. Roque, plaintiff-appellee, versus Nicanor Lapuz, defendant-
appellant" amending its original decision of April 23, 1970 which affirmed the decision of the Court of
First Instance of Rizal (Quezon City Branch) in Civil Case No. Q-4922 in favor of petitioner, and the
Resolution of the respondent court denying petitioner's motion for reconsideration.

The facts of this case are as recited in the decision of the Trial Court which was adopted and
affirmed by the Court of Appeals:

Sometime in 1964, prior to the approval by the National Planning Commission of the
consolidation and subdivision plan of plaintiff's property known as the Rockville
Subdivision, situated in Balintawak, Quezon City, plaintiff and defendant entered into
an agreement of sale covering Lots 1, 2 and 9, Block 1, of said property, with an
aggregate area of 1,200 square meters, payable in 120 equal monthly installments at the
rate of P16.00, P15.00 per square meter, respectively. In accordance with said
agreement, defendant paid to plaintiff the sum of P150.00 as deposit and the further
38
 sum of P740.56 to complete the payment of four monthly installments covering the
months of July, August, September, and October, 1954. (Exhs. A and B). When the
document Exhibit "A" was executed on June 25, 1954, the plan covering plaintiff's
property was merely tentative, and the plaintiff referred to the proposed lots appearing
in the tentative plan.

After the approval of the subdivision plan by the Bureau of Lands on January 24,
1955, defendant requested plaintiff that he be allowed to abandon and substitute Lots
1, 2 and 9, the subject matter of their previous agreement, with Lots 4 and 12, Block 2
of the approved subdivision plan, of the Rockville Subdivision, with a total area of 725
square meters, which are corner lots, to which request plaintiff graciously acceded.

The evidence discloses that defendant proposed to plaintiff modification of their

previous contract to sell because he found it quite difficult to pay the monthly
installments on the three lots, and besides the two lots he had chosen were better lots,
being corner lots. In addition, it was agreed that the purchase price of these two lots
would be at the uniform rate of P17.00 per square (meter) payable in 120 equal
monthly installments, with interest at 8% annually on the balance unpaid. Pursuant to
this new agreement, defendant occupied and possessed Lots 4 and 12, Block 2 of the
approved subdivision plan, and enclosed them, including the portion where his house
now stands, with barbed wires and adobe walls.

However, aside from the deposit of P150.00 and the amount of P740.56 which were
paid under their previous agreement, defendant failed to make any further payment on
account of the agreed monthly installments for the two lots in dispute, under the new
contract to sell. Plaintiff demanded upon defendant not only to pay the stipulated
monthly installments in arrears, but also to make up-to-date his payments, but
defendant, instead of complying with the demands, kept on asking for extensions,
promising at first that he would pay not only the installments in arrears but also make
up-to-date his payment, but later on refused altogether to comply with plaintiff's
demands.

Defendant was likewise requested by the plaintiff to sign the corresponding contract to
sell in accordance with his previous commitment. Again, defendant promised that he
would sign the required contract to sell when he shall have made up-to-date the
stipulated monthly installments on the lots in question, but subsequently backed out of
his promise and refused to sign any contract in noncompliance with what he had
represented on several occasions. And plaintiff relied on the good faith of defendant to
make good his promise because defendant is a professional and had been rather good
to him (plaintiff).

On or about November 3, 1957, in a formal letter, plaintiff demanded upon defendant

to vacate the lots in question and to pay the reasonable rentals thereon at the rate of
P60.00 per month from August, 1955. (Exh. "B"). Notwithstanding the receipt of said
letter, defendant did not deem it wise nor proper to answer the same.

In reference to the mode of payment, the Honorable Court of Appeals found —

Both parties are agreed that the period within which to pay the lots in question is ten
years. They however, disagree on the mode of payment. While the appellant claims
that he could pay the purchase price at any time within a period of ten years with a
gradual proportionate discount on the price, the appellee maintains that the appellant
was bound to pay monthly installments.

On this point, the trial court correctly held that —

39
 It is further argued by defendant that under the agreement to sell in question, he has
the right or option to pay the purchase price at anytime within a period of ten years
from 1954, he being entitled, at the same time, to a graduated reduction of the price.
The Court is constrained to reject this version not only because it is contradicted by
the weight of evidence but also because it is not consistent with what is reasonable,
plausible and credible. It is highly improbable to expect plaintiff, or any real estate
subdivision owner for that matter, to agree to a sale of his land which would be
payable anytime in ten years at the exclusive option of the purchaser. There is no
showing that defendant is a friend, a relative, or someone to whom plaintiff had to be
grateful, as would justify an assumption that he would have agreed to extend to
defendant such an extra- ordinary concession. Furthermore, the context of the
document, Exhibit "B", not to mention the other evidences on records is indicative
that the real intention of the parties is for the payment of the purchase price of the lot
in question on an equal monthly installment basis for a period of ten years (Exhibits
"A", "II", "J" and "K").

On January 22, 1960, petitioner Felipe C, Roque (plaintiff below) filed the complaint against
defendant Nicanor Lapuz (private respondent herein) with the Court of First Instance of Rizal,
Quezon City Branch, for rescission and cancellation of the agreement of sale between them involving
the two lots in question and prayed that judgment be rendered ordering the rescission and
cancellation of the agreement of sale, the defendant to vacate the two parcels of land and remove his
house therefrom and to pay to the plaintiff the reasonable rental thereof at the rate of P60.00 a
month from August 1955 until such time as he shall have vacated the premises, and to pay the sum
of P2,000.00 as attorney's fees, costs of the suit and award such other relief or remedy as may be
deemed just and equitable in the premises.

Defendant filed a Motion to Dismiss on the ground that the complaint states no cause of action,
which motion was denied by the court. Thereafter, defendant filed his Answer alleging that he
bought three lots from the plaintiff containing an aggregate area of 1,200 sq. meters and previously
known as Lots 1, 2 and 9 of Block 1 of Rockville Subdivision at P16.00, P15.00 and P15.00,
respectively, payable at any time within ten years. Defendant admits having occupied the lots in
question.

As affirmative and special defenses, defendant alleges that the complaint states no cause of action;
that the present action for rescission has prescribed; that no demand for payment of the balance was
ever made; and that the action being based on reciprocal obligations, before one party may compel
performance, he must first comply what is incumbent upon him.

As counterclaim, defendant alleges that because of the acts of the plaintiff, he lost two lots
containing an area of 800 sq. meters and as a consequence, he suffered moral damages in the amount
of P200.000.00; that due to the filing of the present action, he suffered moral damages amounting to
P100,000.00 and incurred expenses for attorney's fees in the sum of P5,000.00.

Plaintiff filed his Answer to the Counterclaim and denied the material averments thereof.

After due hearing, the trial court rendered judgment, the dispositive portion of which reads:

WHEREFORE, the Court renders judgment in favor of plain. plaintiff and against the
defendant, as follows:

(a) Declaring the agreement of sale between plaintiff and defendant involving the lots
in question (Lots 4 and 12, Block 2 of the approved subdivision plan of the Rockville
Subdivision) rescinded, resolved and cancelled;

(b) Ordering defendant to vacate the said lots and to remove his house therefrom and
also to pay plaintiff the reasonable rental thereof at the rate of P60.00 per month from
August, 1955 until he shall have actually vacated the premises; and

40
 (c) Condemning defendant to pay plaintiff the sum of P2,000.00 as attorney's fees, as
well as the costs of the suit. (Record on Appeal, p. 118)

(a) Declaring the agreement of sale between plaintiff and defendant involving the lots
in question (Lots 4 and 12, Block 2 of the approved subdivision plan of the Rockville
Subdivision) rescinded, resolved and cancelled;

(b) Ordering defendant to vacate the said lots and to remove his house therefrom and
also to pay plaintiff the reasonable rental thereof at the rate of P60.00 per month from
August, 1955 until he shall have actually vacated premises; and

(c) Condemning defendant to pay plaintiff the sum of P2,000.00 as attorney's fees, as
well as the costs of the suit. (Record on Appeal. p. 118)

Not satisfied with the decision of the trial court, defendant appealed to the Court of Appeals. The
latter court, finding the judgment appealed from being in accordance with law and evidence, affirmed
the same.

In its decision, the appellate court, after holding that the findings of fact of the trial court are fully
supported by the evidence, found and held that the real intention of the parties is for the payment of
the purchase price of the lots in question on an equal monthly installment basis for the period of ten
years; that there was modification of the original agreement when defendant actually occupied Lots
Nos. 4 and 12 of Block 2 which were corner lots that commanded a better price instead of the
original Lots Nos. 1, 2 and 9, Block I of the Rockville Subdivision; that appellant's bare assertion that
the agreement is not rescindable because the appellee did not comply with his obligation to put up
the requisite facilities in the subdivision was insufficient to overcome the presumption that the law
has been obeyed by the appellee; that the present action has not prescribed since Article 1191 of the
New Civil Code authorizing rescission in reciprocal obligations upon noncompliance by one of the
obligors is the applicable provision in relation to Article 1149 of the New Civil Code; and that the
present action was filed within five years from the time the right of action accrued.

Defendant filed a Motion for Reconsideration of the appellate court's decision on the following
grounds:

First — Neither the pleadings nor the evidence, testimonial, documentary or

circumstantial, justify the conclusion as to the existence of an alleged subsequent
agreement novatory of the original contract admittedly entered into between the
parties:

Second — There is nothing so unusual or extraordinary, as would render improbable

the fixing of ten ears as the period within which payment of the stipulated price was to
be payable by appellant;

Third — Appellee has no right, under the circumstances on the case at bar, to demand
and be entitled to the rescission of the contract had with appellant;

Fourth — Assuming that any action for rescission is availability to appellee, the same,
contrary to the findings of the decision herein, has prescribed;

Fifth — Assumming further that appellee's action for rescission, if any, has not yet
prescribed, the same is at least barred by laches;

Sixth — Assuming furthermore that a cause of action for rescission exists, appellant
should nevertheless be entitled to tile fixing of a period within which to comply with
his obligation; and

41
 Seventh — At all events, the affirmance of the judgment for the payment of rentals on
the premises from August, 1955 and he taxing of attorney's fees against appellant are
not warranted b the circumstances at bar. (Rollo, pp. 87-88)

Acting on the Motion for Reconsideration, the Court of Appeals sustained the sixth ground raised by
the appellant, that assuming that a cause of action for rescission exists, he should nevertheless be
entitled to the fixing of a period within which to comply with his obligation. The Court of Appeals,
therefore, amended its original decision in the following wise and manner:

WHEREFORE, our decision dated April 23, 1970 is hereby amended in the sense that
the defendant Nicanor Lapuz is hereby granted a period of ninety (90) days from entry
hereof within which to pay the balance of the purchase price in the amount of
P11,434,44 with interest thereon at the rate of 8% per annum from August 17, 1955
until fully paid. In the event that the defendant fails to comply with his obligation as
above stated within the period fixed herein, our original judgment stands.

Petitioner Roque, as plaintiff-appellee below, filed a Motion for Reconsideration; the Court of
Appeals denied it. He now comes and appeals to this Court on a writ of certiorari.

The respondent Court of Appeals rationalizes its amending decision by considering that the house
presently erected on the land subject of the contract is worth P45,000.00, which improvements
introduced by defendant on the lots subject of the contract are very substantial, and thus being the
case, "as a matter of justice and equity, considering that the removal of defendant's house would
amount to a virtual forfeiture of the value of the house, the defendant should be granted a period
within which to fulfill his obligations under the agreement." Cited as authorities are the cases
of Kapisanan Banahaw vs. Dejarme and Alvero, 55 Phil. 338, 344, where it is held that the discretionary
power of the court to allow a period within which a person in default may be permitted to perform
the stipulation upon which the claim for resolution of the contract is based should be exercised
without hesitation in a case where a virtual forfeiture of valuable rights is sought to be enforced as an
act of mere reprisal for a refusal of the debtor to submit to a usurious charge, and the case of Puerto
vs. Go Ye Pin, 47 O.G. 264, holding that to oust the defendant from the lots without giving him a
chance to recover what his father and he himself had spent may amount to a virtual forfeiture of
valuable rights.

As further reasons for allowing a period within which defendant could fulfill his obligation, the
respondent court held that there exists good reasons therefor, having in mind that which affords
greater reciprocity of rights (Ramos vs. Blas, 51 O.G. 1920); that after appellant had testified that
plaintiff failed to comply with his part of the contract to put up the requisite facilities in the
subdivision, plaintiff did not introduce any evidence to rebut defendant's testimony but simply relied.
upon the presumption that the law has been obeyed, thus said presumption had been successfully
rebutted as Exhibit "5-D" shows that the road therein shown is not paved The Court, however,
concedes that plaintiff's failure to comply with his obligation to put up the necessary facilities in the
subdivision will not deter him from asking f•r the rescission of the agreement since this obligation is
not correlative with defendant's obligation to buy the property.

Petitioner assails the decision of the Court of Appeals for the following alleged errors:

I. The Honorable Court of Appeals erred in applying paragraph 3, Article 1191 of the
Civil Code which refers to reciprocal obligations in general and, pursuant thereto, in
granting respondent Lapuz a period of ninety (90) days from entry of judgment within
which to pay the balance of the purchase price.

II. The Honorable Court of Appeals erred in not holding that Article 1592 of the same
Code, which specifically covers sales of immovable property and which constitutes an
exception to the third paragraph of Article 1191 of said Code, is applicable to the
present case.

42
 III. The Honorable Court of Appeals erred in not holding that respondent Lapuz
cannot avail of the provisions of Article 1191, paragraph 3 of the Civil Code aforesaid
because he did not raise in his answer or in any of the pleadings he filed in the trial
court the question of whether or not he is entitled, by reason of a just cause, to a fixing
of a new period.

IV. Assuming arguendo that the agreement entered into by and between petitioner and
respondent Lapuz was a mere promise to sell or contract to sell, under which title to
the lots in question did not pass from petitioner to respondent, still the Honorable
Court of Appeals erred in not holding that aforesaid respondent is not entitled to a
new period within which to pay petitioner the balance of P11,434.44 interest due on
the purchase price of P12.325.00 of the lots.

V. Assuming arguendo that paragraph 3, Article 1191 of the Civil Code is applicable
and may be availed of by respondent, the Honorable Court of Appeals nonetheless
erred in not declaring that aid respondent has not shown the existence of a just cause
which would authorize said Court to fix a new period within which to pay the balance
aforesaid.

VI. The Honorable Court of Appeals erred in reconsidering its original decision
promulgated on April 23, 1970 which affirmed the decision of the trial court.

The above errors may, however, be synthesized into one issue and that is, whether private
respondent is entitled to the Benefits of the third paragraph of Article 1191, New Civil Code, for the
fixing of period within which he should comply with what is incumbent upon him, and that is to pay
the balance of P11,434,44 with interest thereon at the rate of 8% 1et annum from August 17, 1955
until fully paid since private respondent had paid only P150.00 as deposit and 4 months intallments
amounting to P740.46, or a total of P890.46, the total price of the two lots agreed upon being
P12,325.00.

For his part, petitioner maintains that respondent is not entitled to the Benefits of paragraph 3,
Article 1191, NCC and that instead, Article 1592 of the New Civil Code which specifically covers
sales of immovable property and which constitute an exception to the third paragraph of Art. 1191
of aid Code, is the applicable law to the case at bar.

In resolving petitioner's assignment of errors, it is well that We lay clown the oda provisions and
pertinent rulings of the Supreme Court bearing on the crucial issue of whether Art. 1191, paragraph 3
of the New Civil Code applies to the case at Bar as held by the appellate court and supported by the
private respondent, or Art. 1592 of the same Code which petitioner strongly argues in view of the
peculiar facts and circumstances attending this case. Article 1191, New Civil Code, provides:

Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one at
the obligors should not comply with hat is incumbent upon him

The injured partner may choose between the fulfillment and the rescission of the
obligation, with the payment of damages in either case. He may also seek rescission,
even after he has chosen fulfillment, if the latter should become impossible.

The court shall decree the rescission claimed, unless there be just cause authorizing the
fixing of a period.

This is understood to be without prejudice to the rights of third persons who have
acquired the thing, in accordance with articles 1385 and 1388 and the Mortgage Law.

Article 1592 also provides:

Art. 1592. In the sale of immovable property, even though it may have been stipulated
that upon failure to pay the price at the time agreed upon the rescission of the contract
43
 shall of right take place, the vendee may pay, even after the expiration of the period, as
long as no demand for rescission of the contract has been made upon him either
judicially or by a notarial act. After the demand, the court may not grant him a new
term.

The controlling and latest jurisprudence is established and settled in the celebrated case of Luzon
Brokerage Co., Inc. vs. Maritime Building Co., Inc. and Myers Building Co., G.R. No. L-25885, January 31,
1972, 43 SCRA 93, originally decided in 1972, reiterated in the Resolution on Motion to Reconsider
dated August 18, 1972, 46 SCRA 381 and emphatically repeated in the Resolution on Second Motion
for Reconsideration promulgated November 16, 1978, 86 SCRA 309, which once more denied
Maritimes Second Motion for Reconsideration of October 7, 1972. In the original decision, the
Supreme Court speaking thru Justice J.B.L. Reyes said:

Under the circumstances, the action of Maritime in suspending payments to Myers

Corporation was a breach of contract tainted with fraud or malice (dolo), as
distinguished from mere negligence (culpa), "dolo" being succinctly defined as a
"conscious and intention design to evade the normal fulfillment of existing
obligations" (Capistrano, Civil Code of the Philippines, Vol. 3, page 38), and therefore
incompatible with good faith (Castan, Derecho Civil, 7th Ed., Vol. 3, page 129; Diaz
Pairo, Teoria de Obligaciones, Vol. 1, page 116).

Maritime having acted in bad faith, it was not entitled to ask the court to give it further
time to make payment and thereby erase the default or breach that it had deliberately
incurred. Thus the lower court committed no error in refusing to extend the periods
for payment. To do otherwise would be to sanction a deliberate and reiterated
infringement of the contractual obligations incurred by Maritime, an attitude repugnant
to the stability and obligatory force of contracts.

The decision reiterated the rule pointed out by the Supreme Court in Manuel vs. Rodriguez, 109 Phil. 1,
p. 10, that:

In contracts to sell, where ownership is retained by the seller and is not to pass until
the fun payment of the price, such payment, as we said is a positive suspensive
condition, the failure of which is not a breach, casual or serious, but simply an event
that prevented the obligation of the vendor to convey title from acquiring binding i
force in accordance with Article 1117 of the Old Civil Code. To argue that there was
only a casual breach is to proceed from the assumption that the contract is one of
absolute sale, where non-payment is a resolutory condition, which is not the case."
Continuing, the Supreme Court declared:

... appellant overlooks that its contract with appellee Myers s not the ordinary sale
envisaged by Article 1592, transferring ownership simultaneously with the delivery of
the real property sold, but one in which the vendor retained ownership of the
immovable object of the sale, merely undertaking to convey it provided the buyer
strictly complied with the terms of the contract (see paragraph [d], ante page 5). In
suing to recover possession of the building from Maritime appellee Myers is not after
the resolution or setting aside of the contract and the restoration of the parties to the
status quo ante as contemplated by Article 1592, but precisely enforcing the Provisions
of the agreement that it is no longer obligated to part with the ownership or
possession of the property because Maritime failed to comply with the specific
condition precedent, which is to pay the installments as they fell due.

The distinction between contracts of sale and contracts to sell with reserved title has
been recognized by this Court in repeated decisions upholding the power of promisors
under contracts to sell in case of failure of the other party to complete payment, to
extrajudicially terminate the operation of the contract, refuse conveyance and retain

44
 the sums or installments already received, where such rights are expressly provided for,
as in the case at bar.

In the Resolution denying the first Motion for Reconsideration, 46 SCRA 381, the Court again
speaking thru Justice J.B.L. Reyes, reiterated the rule that in a contract to sell, the full payment of the
price through the punctual performance of the monthly payments is a condition precedent to the
execution of the final sale 4nd to the transfer of the property from the owner to the proposed buyer;
so that there will be no actual sale until and unless full payment is made.

The Court further ruled that in seeking to oust Maritime for failure to pay the price as agreed upon,
Myers was not rescinding (or more properly, resolving) the contract but precisely enforcing it
according to its expressed terms. In its suit, Myers was not seeking restitution to it of the ownership
of the thing sold (since it was never disposed of), such restoration being the logical consequence of
the fulfillment of a resolutory condition, expressed or implied (Art. 1190); neither was it seeking a
declaration that its obligation to sell was extinguished. What is sought was a judicial declaration that
because the suspensive condition (full and punctual payment) had not been fulfilled, its obligation to
sell to Maritime never arose or never became effective and, therefore, it (Myers) was entitled to
repossess the property object of the contract, possession being a mere incident to its right of
ownership.

The decision also stressed that "there can be no rescission or resolution of an obligation as yet non-
existent, because the suspensive condition did not happen. Article 1592 of the New Civil Code (Art.
1504 of Old Civil Code) requiring demand by suit or notarial act in case the vendor of realty wants to
rescind does not apply to a contract to sell or promise to sell, where title remains with the vendor
until fulfillment to a positive condition, such as full payment of the price." (Manuel vs, Rodriguez,
109 Phil. 9)

Maritime's Second Motion for Reconsideration was denied in the Resolution of the Court dated
November 16, 1978, 86 SCRA 305, where the governing law and precedents were briefly
summarized in the strong and emphatic language of Justice Teehankee, thus:

(a) The contract between the parties was a contract to sell or conditional sale with title
expressly reserved in the vendor Myers Building Co., Inc. Myers until the suspensive
condition of full and punctual payment of the full price shall have been met on pain of
automatic cancellation of the contract upon failure to pay any of the monthly
installments when due and retention of the sums theretofore paid as rentals. When the
vendee, appellant Maritime, willfully and in bad faith failed since March, 1961 to pay
the P5,000. — monthly installments notwithstanding that it was punctually collecting
P10,000. — monthly rentals from the lessee Luzon Brokerage Co., Myers was entitled,
as it did in law and fact, to enforce the terms of the contract to sell and to declare the
same terminated and cancelled.

(b) Article 1592 (formerly Article 1504) of the new Civil Code is not applicable to such
contracts to self or conditional sales and no error was committed by the trial court in
refusing to extend the periods for payment.

(c) As stressed in the Court's decision, "it is irrelevant whether appellant Maritime's
infringement of its contract was casual or serious" for as pointed out in Manuel vs.
Rodriguez, '(I)n contracts to self. whether ownership is retained by the seller and is not
to pass until the full payment of the price, such payment, as we said, is a positive
suspensive condition, the failure of which is not a breach, casual or serious, but simply
an event that prevented the obligation of the vendor to convey title from acquiring
binding force ...

(d) It should be noted, however, that Maritimes breach was far from casual but a most
serious breach of contract ...

45
 (e) Even if the contract were considered an unconditional sale so that Article 1592 of
the Civil Code could be deemed applicable, Myers' answer to the complaint for
interpleaded in the court below constituted a judicial demand for rescission of the
contract and by the very provision of the cited codal article, 'after the demand, the
court may not grant him a new term for payment; and

(f) Assumming further that Article 1191 of the new Civil Code governing rescission of
reciprocal obligations could be applied (although Article 1592 of the same Code is
controlling since it deals specifically with sales of real property), said article provides
that '(T)he court shall decree the rescission claimed, unless there be just cause
authorizing the fixing of a period' and there exists to "just cause" as shown above for
the fixing of a further period. ...

Under the first and second assignments of error which petitioner jointly discusses, he argues that the
agreement entered into between him and the respondent is a perfected contract of purchase and sale
within the meaning of Article 1475 of the New Civil Code which provides that "the contract of sale
is perfected at the moment there is a meeting of minds upon the thing which is the object of the
contract and upon the price. From that moment, the parties may reciprocally demand performance,
subject to the provisions of the law governing the form of contract."

Petitioner contends that "(n)othing in the decision of the courts below would show that ownership
of the property remained with plaintiff for so long as the installments have not been fully paid.
Which yields the conclusion that, by the delivery of the lots to defendant, ownership likewise was
transferred to the latter." (Brief for the Petitioner, p. 15) And he concludes that the sale was
consummated by the delivery of the two lots, the subject thereof, by him to the respondent.

Under the findings of facts by the appellate court, it appears that the two lots subject of the
agreement between the parties herein were delivered by the petitioner to the private respondent who
took possession thereof and occupied the same and thereafter built his house thereon, enclosing the
lots with adobe stone walls and barbed wires. But the property being registered under the Land
Registration Act, it is the act of registration of the Deed of Sale which could legally effect the transfer
of title of ownership to the transferee, pursuant to Section 50 of Act 496. (Manuel vs. Rodriguez, et
al., 109 Phil. 1; Buzon vs. Lichauco, 13 Phil. 354; Tuazon vs. Raymundo, 28 Phil. 635: Worcestor vs.
Ocampo, 34 Phil. 646). Hence, We hold that the contract between the petitioner and the respondent
was a contract to sell where the ownership or title is retained by the seller and is not to pass until the
full payment of the price, such payment being a positive suspensive condition and failure of which is
not a breach, casual or serious, but simply an event that prevented the obligation of the vendor to
convey title from acquiring binding force.

In the case at bar, there is no writing or document evidencing the agreement originally entered into
between petitioner and private respondent except the receipt showing the initial deposit of P150.00
as shown in Exh. "A" and the payment of the 4- months installment made by respondent
corresponding to July, 1954 to October, 1954 in the sum of P740.56 as shown in Exh. "B". Neither
is there any writing or document evidencing the modified agreement when the 3 lots were changed to
Lots 4 and 12 with a reduced area of 725 sq. meters, which are corner lots. This absence of a formal
deed of conveyance is a very strong indication that the parties did not intend immediate transfer of
ownership and title, but only a transfer after full payment of the price. Parenthetically, We must say
that the standard printed contracts for the sale of the lots in the Rockville Subdivision on a monthly
installment basis showing the terms and conditions thereof are immaterial to the case at bar since
they have not been signed by either of the parties to this case.

Upon the law and jurisprudence hereinabove cited and considering the nature of the transaction or
agreement between petitioner and respondent which We affirm and sustain to be a contract to sell,
the following resolutions of petitioner's assignment of errors necessarily arise, and so We hold that:

1. The first and second assignments of errors are without merit.

46
The overwhelming weight of authority culminating in the Luzon Brokerage vs. Maritime cases has laid
down the rule that Article 1592 of the New Civil Code does not apply to a contract to sell where title
remains with the vendor until full payment of the price as in the case at bar. This is the ruling
in Caridad Estates vs. Santero, 71 Phil. 120; Aldea vs. Inquimboy 86 Phil. 1601; Jocon vs. Capitol
Subdivision, Inc., L-6573, Feb. 28, 1955; Miranda vs. Caridad Estates, L-2077 and Aspuria vs. Caridad
Estates, L-2121 Oct. 3, 1950, all reiterated in Manuel vs. Rodriguez, et al.109 Phil. 1, L-13435, July 27,
1960. We agree with the respondent Court of Appeals that Art, 1191 of the New Civil Code is the
applicable provision where the obligee, like petitioner herein, elects to rescind or cancel his obligation
to deliver the ownership of the two lots in question for failure of the respondent to pay in fun the
purchase price on the basis of 120 monthly equal installments, promptly and punctually for a period
of 10 years.

2. We hold that respondent as obligor is not entitled to the benefits of paragraph 3 of Art. 1191,
NCC Having been in default, he is not entitled to the new period of 90 days from entry of judgment
within which to pay petitioner the balance of P11,434.44 with interest due on the purchase price of
P12,325.00 for the two lots.

Respondent a paid P150.00 as deposit under Exh. "A" and P740.56 for the 4-months installments
corresponding to the months of July to October, 1954. The judgment of the lower court and the
Court of Appeals held that respondent was under the obligation to pay the purchase price of the lots
m question on an equal monthly installment basis for a period of ten years, or 120 equal monthly
installments. Beginning November, 1954, respondent began to default in complying with his
obligation and continued to do so for the remaining 116 monthly interest. His refusal to pay further
installments on the purchase price, his insistence that he had the option to pay the purchase price any
time in ten years inspire of the clearness and certainty of his agreement with the petitioner as
evidenced further by the receipt, Exh. "B", his dilatory tactic of refusing to sign the necessary
contract of sale on the pretext that he will sign later when he shall have updated his monthly
payments in arrears but which he never attempted to update, and his failure to deposit or make
available any amount since the execution of Exh "B" on June 28, 1954 up to the present or a period
of 26 years, are all unreasonable and unjustified which altogether manifest clear bad faith and malice
on the part of respondent puzzle making inapplicable and unwarranted the benefits of paragraph 3,
Art. 1191, N.C.C. To allow and grant respondent an additional period for him to pay the balance of
the purchase price, which balance is about 92% of the agreed price, would be tantamount to excusing
his bad faith and sanctioning the deliberate infringement of a contractual obligation that is repugnant
and contrary to the stability, security and obligatory force of contracts. Moreover, respondent's
failure to pay the succeeding 116 monthly installments after paying only 4 monthly installments is a
substantial and material breach on his part, not merely casual, which takes the case out of the
application of the benefits of pa paragraph 3, Art. 1191, N.C.C.

At any rate, the fact that respondent failed to comply with the suspensive condition which is the full
payment of the price through the punctual performance of the monthly payments rendered
petitioner's obligation to sell ineffective and, therefore, petitioner was entitled to repossess the
property object of the contract, possession being a mere incident to his right of ownership (Luzon
Brokerage Co., Inc. vs. Maritime Building Co., Inc., et al. 46 SCRA 381).

3. We further rule that there exists no just cause authorizing the fixing of a new period within which
private respondent may pay the balance of the purchase price. The equitable grounds or
considerations which are the basis of the respondent court in the fixing of an additional period
because respondent had constructed valuable improvements on the land, that he has built his house
on the property worth P45,000.00 and placed adobe stone walls with barbed wires around, do not
warrant the fixing of an additional period. We cannot sanction this claim for equity of the respondent
for to grant the same would place the vendor at the mercy of the vendee who can easily construct
substantial improvements on the land but beyond the capacity of the vendor to reimburse in case he
elects to rescind the contract by reason of the vendee's default or deliberate refusal to pay or
continue paying the purchase price of the land. Under this design, strategem or scheme, the vendee
can cleverly and easily "improve out" the vendor of his land.

47
More than that, respondent has not been honest, fair and reciprocal with the petitioner, hence it
would not be fair and reasonable to the petitioner to apply a solution that affords greater reciprocity
of rights which the appealed decision tried to effect between the parties. As matters stand,
respondent has been enjoying the possession and occupancy of the land without paying the other
116 monthly installments as they fall due. The scales of justice are already tipped in respondent,s
favor under the amended decision of the respondent court. It is only right that We strive and search
for the application of the law whereby every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe honesty and good faith
(Art. 19, New Civil Code)

In the case at bar, respondent has not acted in good faith. With malice and deliberate intent, he has
twisted the clear import of his agreement with the petitioner in order to suit his ends and delay the
fulfillment of his obligation to pay the land he had enjoyed for the last 26 years, more than twice the
period of ten years that he obliged himself to complete payment of the price.

4. Respondent's contention that petitioner has not complied with his obligation to put up the
necessary facilities in the Rockville Subdivision is not sufficient nor does it constitute good reason to
justify the grant of an additional period of 90 days from entry of judgment within which respondent
may pay the balance of the purchase price agreed upon. The Judgment of the appellate court
concedes that petitioner's failure to comply with his obligation to put up the necessary facilities in the
subdivision will not deter him from asking for the rescission of the agreement since his obligation is
not correlative with respondent's obligation to buy the property. Since this is so conceded, then the
right of the petitioner to rescind the agreement upon the happening or in the event that respondent
fails or defaults in any of the monthly installments would be rendered nugatory and ineffective. The
right of rescission would then depend upon an extraneous consideration which the law does not
contemplate.

Besides, at the rate the two lots were sold to respondent with a combined area of 725 sq. meters at
the uniform price of P17.00 per sq. meter making a total price of P12,325.00, it is highly doubtful if
not improbable that aside from his obligation to deliver title and transfer ownership to the
respondent as a reciprocal obligation to that of the respondent in paying the price in full and
promptly as the installments fall due, petitioner would have assumed the additional obligation "to
provide the subdivision with streets ... provide said streets with street pavements concrete curbs and
gutters, fillings as required by regulations, adequate drainage facilities, tree plantings, adequate water
facilities" as required under Ordinance No. 2969 of Quezon City approved on May 11, 1956 (Answer
of Defendant, Record on Appeal, pp. 35-36) which was two years after the agreement in question
was entered into June, 1y54.

The fact remains, however, that respondent has not protested to the petitioner nor to the authorities
concerned the alleged failure of petitioner to put up and provide such facilities in the subdivision
because he knew too well that he has paid only the aggregate sum of P890.56 which represents more
or less 7% of the agreed price of P12,325.00 and that he has not paid the real estate taxes assessed by
the government on his house erected on the property under litigation. Neither has respondent made
any allegation in his Answer and in all his pleadings before the court up to the promulgation of the
Resolution dated October 12, 1970 by the Court of Appeals, to the effect that he was entitled to a
new period within which to comply with his obligation, hence the Court could not proceed to do so
unless the Answer is first amended. (Gregorio Araneta, Inc. vs. Philippine Sugar Estates
Development Co., Ltd., G.R. No. L-22558, May 31, 1967, 20 SCRA 330, 335). It is quite clear that it
is already too late in the day for respondent to claim an additional period within which to comply
with his obligation.

Precedents there are in Philippine jurisprudence where the Supreme Court granted the buyer of real
property additional period within which to complete payment of the purchase price on grounds of
equity and justice as in (1) J.M. Tuazon Co., Inc. vs. Javier, 31 SCRA 829 where the vendee religiously
satisfied the monthly installments for eight years and paid a total of P4,134.08 including interests on
the principal obligation of only P3,691.20, the price of the land; after default, the vendee was willing
to pay all arrears, in fact offered the same to the vendor; the court granted an additional period of 60

48
days -from receipt of judgment for the vendee to make all installment in arrears plus interest; (2)
in Legarda Hermanos vs. Saldaña, 55 SCRA 324, the Court ruled that where one purchase, from a
subdivision owner two lots and has paid more than the value of one lot, the former is entitled to a
certificate of title to one lot in case of default.

On the other hand there are also cases where rescission was not granted and no new or additional
period was authorized. Thus, in Caridad Estates vs. Santero, 71 Phil. 114, the vendee paid, totalling
P7,590.00 or about 25% of the purchase price of P30,000.00 for the three lots involved and when the
vendor demanded revocation upon the vendee's default two years after, the vendee offered to pay
the arears in check which the vendor refused; and the Court sustained the revocation and ordered the
vendee ousted from the possession of the land. In Ayala y Cia vs. Arcache, 98 Phil. 273, the total price
of the land was P457,404.00 payable in installments; the buyer initially paid P100,000.00 or about
25% of the agreed price; the Court ordered rescission in view of the substantial breach and granted
no extension to the vendee to comply with his obligation.

The doctrinal rulings that "a slight or casual breach of contract is not a ground for rescission. It must
be so substantial and fundamental to defeat the object of the parties" (Gregorio Araneta Inc. vs.
Tuazon de Paterno, L-2886, August 22, 1962; Villanueva vs. Yulo, L-12985, Dec. 29,1959); that
"where time is not of the essence of t agreement, a slight delay on the part of one party in the
performance of his obligation is not a sufficient ground for the rescission of the agreement"( Biando
vs. Embestro L-11919, July 27, 1959; cases cited in Notes appended to Universal Foods Corporation
vs. Court of Appeals, 33 SCRA 1), convince and persuade Us that in the case at bar where the
breach, delay or default was committed as early as in the payment of the fifth monthly installment for
November, 1954, that such failure continued and persisted the next month and every month
thereafter in 1955, 1956, 1957 and year after year to the end of the ten-year period in 1964 (10 years
is respondent's contention) and even to this time, now more than twice as long a time as the original
period without respondent adding, or even offering to add a single centavo to the sum he had
originally paid in 1954 which represents a mere 7% of the total price agreed upon, equity and justice
may not be invoked and applied. One who seeks equity and justice must come to court with clean
hands, which can hardly be said of the private respondent.

One final point, on the supposed substantial improvements erected on the land, respondent's house.
To grant the period to the respondent because of the substantial value of his house is to make the
land an accessory to the house. This is unjust and unconscionable since it is a rule in Our Law that
buildings and constructions are regarded as mere accessories to the land which is the principal,
following the Roman maxim "omne quod solo inadeficatur solo cedit" (Everything that is built on
the soil yields to the soil).

Pursuant to Art. 1191, New Civil Code, petitioner is entitled to rescission with payment of damages
which the trial court and the appellate court, in the latter's original decision, granted in the form of
rental at the rate of P60.00 per month from August, 1955 until respondent shall have actually vacated
the premises, plus P2,000.00 as attorney's fees. We affirm the same to be fair and reasonable. We also
sustain the right of the petitioner to the possession of the land, ordering thereby respondent to
vacate the same and remove his house therefrom.

WHEREFORE, IN VIEW OF THE FOREGOING, the Resolution appealed from dated October
12, 1970 is hereby REVERSED. The decision of the respondent court dated April 23, 1970 is hereby
REINSTATED and AFFIRMED, with costs against private respondent.

SO ORDERED.

G.R. No. L-36897 June 26, 1980

SPOUSES FLORENTINO S. TOMAS and FRANCISCA CARIÑO, plaintiffs-appellees,

vs.
EUSEBIA TOMAS, defendant, PHILIPPINE NATIONAL BANK, SANTIAGO, ISABELA
BRANCH, defendant-appellant.

49
DE CASTRO, J.:

Plaintiff spouses, Florentino S. Tomas and Francisca Cariño, are the owners of a parcel of land
located in Malasian, Santiago, Isabela (now Saguday, Nueva Vizcaya) since 1929, which they obtained
through a homestead patent with Original Certificate of Title No. I-4620. Through fraud and
misrepresentation, one Eusebia Tomas succeeded in having OCT No. I-4620 cancelled, and obtained
in her name TCT No. 8779, Isabela now TCT-350 Nueva Vizcaya, with which she obsessed a loan
from the Philippine National Bank branch in Santiago, Isabela, as a security, mortgaging the land
with the bank for the load of P2,500.00. Florentino Tomas discovered the fraudulent acts of Eusebia
Tomas when he himself applied for a loan from the Philippine National Bank, and offered as a
collateral the same land already mortgaged by Eusebia Tomas to the bank.

In the action plaintiffs filed on April 14, 1964 to declare TCT-350, Nueva Vizcaya, null and void,
against Eusebia Tomas, it was found by the court (Court of First Instance of Nueva Vizcaya) that
Eusebia Tomas succeeded in having plaintiffs' OCT No. I-4620 (Isabela)1 cancelled and having TCT
No. 8779 (Isabela) 2 issued in her name, by executing a deed of extra-judicial settlement 3 in which
she made it appear that she is the lone heir of the registered owner, Florentino Tomas, to whom she
was not even known before, and who was at the time very much alive. She then petitioned for the
issuance of another owner's duplicate of OCT No. I-4620, alleging loss of said owner's duplicate. On
Order of the court (Court of First Instance of Isabela) where the petition was filed, a new owner's
duplicate was issued to Eusebia Tomas as the petitioner. Upon the registration of the deed of extra-
judicial settlement (Exhibit "J" OCT No. I-4620 was cancelled, and TCT No. 8779, now TCT-350
Nueva Vizcaya was issued in the name of Eusebia Tomas on March 14,1957.

In the same action, the Philippine National Bank was made a co-defendant as the mortgagee of the
land, the plaintiffs alleging that the mortgage is null and void, the mortgagor not being the owner of
the property mortgaged. After trial in which Eusebia Tomas never appeared to present any evidence,
the court a quo rendered judgment dated June 9, 1967, the dispositive portion 4 of which reads:

IN VIEW OF ALL THE FOREGOING CONSIDERATIONS, decision is hereby

rendered in favor of the plaintiffs and against the defendants: (a) declaring transfer
Certificate of Title No. T-8779, now Transfer Certificate of Title No. T-350 in the
name of defendant Eusebia Tomas null and void; (b) declaring the deed of extra-
judicial settlement executed by defendant Eusebia Tomas null and void, (c) declaring
Original Certificate of Title No. I-4620 and its file and owner's copy revived (d)
condemning defendant Eusebia Tomas to pay the plaintiffs in the amount of P950.00
as attorney's fee and P 55.80 representing the actual expenses of the plaintiffs; (e)
declaring the mortgage in favor of the Philippine National Bank without force and
effect against the plaintiffs, and ordering defendant Eusebia Tomas to pay the costs of
this proceedings.

From the portion of the foregoing judgment declaring the mortgage, in its favor without force and
effect, the Philippine National Bank appealed to the Court of Appeals, 5 which, however, certified
the appeal to this Court, this issue presented being purely legal. 6

The only issue to be resolved is whether the mortgage of the land in favor of the appellant bank is
valid or not as against appellees.

There is no dispute that the mortgagor Eusebia Tomas is not the owner of the land in question, the
true owner being the appellees, who had always been in possession of said land since they applied for
it by way of homestead patent. The owner's duplicate of OCT No. I-4620 covering the land in favor
of appellee Florentino Tomas had always been with the latter, and was never lost as falsely and
fraudulently misrepresented by Eusebia Tomas in her petition for a new owner's duplicate of OCT
No. I-4620. Alleging however, good faith so as to invoke the protective provision of the Land
Registration Act (Section 39, Act 496), pointing to the fact that the certificate of title, TCT-350

50
Nueva Vizcaya presented by Eusebia Tomas as mortgagor was in her name, and showed no
encumbrance over the land, the appellant bank contends that its right as mortgagee must be fully
rated as a mortgagee in good faith.

Verily, the resolution of the issue raised in this appeal hinges on whether the appellant is a mortgagee
in good faith and for value, for if it is, and without anything to excite suspension as it claims, it is
protected in the same way as a purchaser in good faith and for value is protected under Section 39 of
Act 496, otherwise known as the Land Registration Act.

In claiming good faith as a mortgagee, and for value, appellant bank claims that no proof to the
contrary was presented by appellees in the trial court. 7 It is a fact, however, that incontrovertible
proofs have seen adduced showing that Eusebia Tomas, the mortgagor, was not the owner of the
property mortgaged. This is an that appellees had to prove that would place appellant bank on
obligation to show good faith, as in fact, it was the bank that alleged good faith as its defense. 8 It
would be more legally correct, therefore, to say that it was incumbent on appellant to prove its
affirmative allegation of good faith rather than appellee to show the contrary. In any case, to the
statement in appellees' brief that appellant bank "did not object when appellees presented evidence in
the lower court regarding negligence of appellant, like their failure to send field inspector to the land
to discover who is the real owner of the land being offered as Atty. to the loan of impostor Eusebia
Tomas," no denial was made in a reply brief which appellant should have filed if it wanted to deny
this assertion of appellees. The allegation that appellate presented no proof of lack of good faith on
the part of appellant bank may, therefore, not altogether be accurate.

The facts as properly taken note of by the lower court would seem to bring the instant case within
the ruling of the case of Pichay vs. Celestino, 9 the essence of which is as between two innocent persons,
the mortgagee and the owner of the mortgaged property, one of whom must suffer the consequence
of a breach of trust, the one who made it possible by his act of confidence must bear the loss. This is
a principle that accords more with justice and equity, in the light of the common practice of banking
institution, which is a matter of public knowledge, as observed by the trial court in the case
aforecited, with which this Court agreed, before approving a loan, to send representatives to the
premises of the land offered as collateral and investigate who are the true owners thereof.
Incidentally, the ruling cited herein was against the same appellant bank, the Philippine National
Bank, with reference to a mortgage entered into under solar circumstances. Banks, indeed, should
exercise more care and prudence in dealing even with registered lands, than private individuals, for
their business is one affected with public interest, keeping in trust money belonging to their
depositors, which they should guard against loss by not committing any act of negligence which
amount to lack of good faith by which they would be denied the protective mantle of the land
registration statute, Act 496, extended only to purchasers for value and in good faith, as well as to
mortgagees of the same character and description. This is evidently the rationale of the doctrine laid
down in the case of Pichay vs. Celestino, supra, which as in the instant suit, involved also a mortgage
of a land covered by a certificate of title, mortgaged by the defendant who was not the owner. The
latter, however, succeeded in cancelling the original certificate of title in the name of the real owner,
by forging a deed of sale, purportedly executed by the said registered owner in his favor, upon the
registration of which, he obtained a transfer certificate of title in his name, presenting a new owner's
duplicate certificate he obtained by falsely alleging that the first owner's duplicate was burned in
an ex-parte petition with prayer for the issuance of another owner's duplicate which the court granted.

Thus, the facts of the instant case so closely resemble, if they are not exactly the same as, those in
the Pichay vs. Celestino case, as to make the application of the ruling in said case to the one at bar
unavoidable and compelling. There were only 12 days between the cancellation of OCT No. I-4620
on March 14, 1957 and the constitution of the mortgage on March 26, 1957, which shows that the
application for the loan must have been filed within days only from the receipt of the new TCT No.
8779 by Eusebia Tomas. This fact should have aroused suspicion for appellant bank to send
representative to the premises to ascertain who the true owner is, considering that homestead patents
are generally applied for by male appellant applicants, and are very infrequently sold or alienated, the
policy of the law being against sale or alienation.

51
The decision of this Court in the aforecited case promulgated on May 30, 1967 preceded the decision
of the lower court in this case dated June 7, 1967, by only a few days. However, the court a quo went
along the doctrine as laid down in the Pichay vs. Celestino case even perhaps without having actually
read the decision, although a similar rule had earlier been laid down in Blondeau, et al. vs. Nano, et
al. 10 We, therefore, find no error in the holding of the court a quo that the mortgage executed by
Eusebia Tomas, appellant's codefendant in favor of said appellant bank over the land in question
which the former never owned, is without effect as against appellees herein.

We, indeed, find more weight and vigor in a doctrine which recognizes a better right for the innocent
original registered owner who obtained his certificate of title through perfectly legal and regular
proceedings, than one who obtains his certificate from a totally void one, as to prevail over judicial
pronouncements to the effect that one dealing with a registered land, such as a purchaser, is under no
obligation to look beyond the certificate of title of the vendor, for in the latter case, good faith has
yet to be established by the vendee or transferee, being the most essential condition, coupled with
valuable consideration, to entitle him to respect for his newly acquired title even as against the holder
of an earlier and perfectly valid title. There might be circumstances apparent on the face of the
certificate of title which could excite suspicion as to prompt inquiry, such as when the transfer is not
by virtue of a voluntary act of the original registered owner, as in the instant case, where it was by
means of a self-executed deed of extra-judicial settlement, a fact which should be noted on the face
of Eusebia Tomas' certificate of title. Failing to make such inquiry would hardly be consistent with
any pretense of good faith, which the appellant bank invokes to claim the right to be protected as a
mortgagee, and for the reversal of the judgment rendered against it by the lower court.

WHEREFORE, the judgement appealed from is hereby affirmed, without pronouncement to cost.

G.R. No. L-25422 July 23, 1980

JUAN AMANSEC represented by his heirs, AMELIA, SOLEDAD, ROSAURO and

ROSALINDA, all surnamed AMANSEC plaintiffs-appellants,
vs.
ANGEL MELENDEZ, MARIA ALCAIDE The heirs of FLORENTINO AMANSEC The
heirs of VICENTE AMANSEC SOFIA @ PIA and CIPRIANA, both surnamed
AMANSEC defendants-appellees.

BARREDO, J.:

Appeal directly to this Court before the enactment of Republic Act 5440 from the order of the Court
of First Instance of Pangasinan dismissing Civil Case No. D-1713 filed by herein appellants against
appellees on the ground that said action had already prescribed.

The action below was one for reconveyance, Original Certificates of Titles Nos. 67800 and 67870
having been issued already to appellees Angel Melendez and Maria Alcalde presumably soon after the
decree of registration was entered in Land Registration Case No. 16678, G.L.R.O. Record No. 54100
on October 3, 1941, almost 24 years after the filing of the appellants' complaint on March 20, 1965.

As summarized in their brief, petitioners alleged in their complaint below:

1. That the plaintiffs are the heirs and successors of Juan Amansec, now deceased
(Petition, par. 1, p. 2, R.A.);

2. That they succeeded Juan Amansec as owner of two parcels of land, now under
Original Certificates of Title Nos. 67800 and 67870 of the Register of Deeds for and in
the Province of Pangasinan, in the names of the defendants, the spoons Angel
Melendez and Maria Alcalde (Petition, par. 3, p. 3, R.A.);

52
 3. That the said parcels of land were mauciously feloniously and fraudulently disposed
of by Florentino Amansec, one of the defendants herein, by means of deceit and
misrepresentation, in conspiracy with the heirs of Vicente Amansec ... conveying,
ceding, and transferring those said parcels of land of decadent Juan Amansec, to
Florentino Amansec, by making it appear that the said lands in question was the
property of Vicente Amansec, of whom they are heirs, ... when in truth and in fact the
conspirators knew that the property legally belonged to and/or owned by Juan
Amansec, who at the time of said sale to Florentino was dead for almost two (2) years
(Petition, par. 4, p. 3, R.A.);

4. That Florentino Amansec in turn sold the same proper to the defendants, the
spouses Angel Melendez and Maria Alcalde, and the vendees 'had knowledge from the
beginning that the real owner of said properties was the decadent Juan Amansec that
this knowledge was acquired from the redemption of the mortgage of the land from
Victorians Cabrera where said Angela Melendez discovered that the real, legal and true
owner of the mo property was Juan A , for the first time, and yet withstanding this
knowledge, defendant Angel Melendez knowingly and mutually acted with Florentino
Amansec as co-equal party in the conspiracy with Florentino Amansec, to deprive the
legal and only heirs of the decedent Juan Amansec ... by not informing the real owners
in interest' ... before proceeding to apply for its registration in the Court (Petition, par.
5, pp. 3-4, R.A.)

5. That 'the spouses Angel Melendez and Maria Alcalde, ... were guilty of fraudulently
withholding the truth when they did not include the heirs of Juan Amansec, married to
Victoria Caballero, as one of the parties' to be notified, 'knowing, as in fact as they did
know that Juan Amansec, married to Victoria Caballero, was already dead for
approximately two years at the time the action for the registry of the land was in
progress, and could not, therefore, appear for the purposes of contesting said
registration' (Petition, par. 8, pp. 5-6, R.A.);

6. That the defendant Sofia Amansec, without the knowledge and authority of the
heirs of Juan Amansec, filed an opposition to the application for registration filed by
the defendants, the spouses Angel Melendez and Maria Alcalde nor did said Sofia
Amansec notify said heirs of Juan Amansec of the developments and outcome of said
opposition (Petition, par. 6, pp. 4-5, R.A.; Opposition, Annex 'J', pp. 55-56, R.A. and
on March 26, 194 1, said Sofia Amansec, also without the knowledge and authority of
the heirs of Juan Amansec, withdrew said opposition (Petition, p. 15, R.A.; Annex 'N'
Withdrawal of Opposition, pp. 61-62, R.A.);

7. That the plaintiffs suffered damages (Petition, p. 7, R.A. and p. 31, R.A. and );

8. That the properties in question are now under Original Certificates of Title Nos.
67800 and 67870 of the Register of Deeds for and in the Province of Pangasinan, in
the names of the defendants, the spouses Angel Melendez and Maria Alcalde, and said
defendants procured said titles fraudulently as they knew that the said properties
belong to Juan Amansec. (Pp. 3-7, Brief of Appellants.)

On May 10, 1965, the defendants, heirs of Florentino Amansec, filed a motion to dismiss alleging
inter alia that the action had already prescribed. On their part, appellees Angel Melendez and Maria
Alcalde filed their answer on June 1, 1965 alleging also prescription as an affirmative defense. On
August 5, 1965, the trial court sustained the motion to dismiss of the Florentino Amansecs.
Evidently, the dismissal of the complaint as to Florentino Amansec et al., was or may already be
deemed as a ruling on the affirmative defense of prescription alleged by Melendez and Alcalde.
Hence, this appeal.

Appellants themselves submit in their brief that the decisive issue here relates solely to the period
when an action for reconveyance as the one filed by them prescribes, from the date of decree of

53
registration or from the date of the discovery of the fraud? They claim that they discovered the fraud
committed by appellees "only sometime in 1964" (p. 102, Record on Appeal).

The issue thus raised by appellants does not need any lengthy much less scholarly dissertation. The
decree 6f registration referred to was issued on October 3, 1941. The corresponding original
certificates of title, we must assume, were issued either forthwith or not much later. In any event,
conventional wisdom would dictate that said titles were issued not more than ten years after the
decree of registration. Appellants' action was filed almost twenty-four years after the issuance of said
decree. Under these facts, it is safe to hold as We do hold that the trial court's ruling to the effect that
the appellants' action had already prescribed is correct and should be affirmed.

The preponderance of the evidence is that Isidro dela Cruz and Sotera Medrana did
not perpetrate fraud in having the title to the land in question registered in their names.
Granting, arguendo, that fraud was committed and an implied trust was created, the
counterclaim of the petitioners-appellants for the reconveyance of the title to the land
in question to them has prescribed. It is now settled that an action for the
reconveyance of land based on implied or constructive trust prescribes within ten (10)
years.

The Supreme Court has held that:

It is Idle to bother as to whether the action here is one founded exclusively on fraud
which prescribes in four (4) years or one based on constructive trust which is barred
after ten years, there being no question that the appellees secured their title more than
twenty years before the filing of the complaint, and it is from the date of the issuance
of such title that the effective assertion of adverse title for purposes of the statute of
limitations is counted. (Gerona vs. De Guzman, II SCRA 153). (De la Cerna vs. De la
Cerna, 72 SCRA 514, 518.)

The cause of action of the petitioners-appellants for the reconveyance to them of the
title to the land in question arose on March 15, 1932 when Original Certificate of Title
No. 49228 was issued by the Office of the Register of Deeds of Pangasinan. (Gerona
vs. De Guzman. 1 1 SCRA 152, 157). The issuance of said original certificate of title
constituted constructive notice to the public including the petitioners-appellants.
(Jaramil vs. Court of Appeals, 78 SCRA 420, pp. 425-426.)

WHEREFORE, the impugned order of dismissal is affirmed. No costs.

[G.R. No. L-29073. April 18, 1980.]

ESPIRITU BUNAGAN, PERPETUA INSO, and GUADALUPE

LUMONGSOD, Petitioners, v. BRANCH VI, COURT OF FIRST INSTANCE OF CEBU,
FILEMON OMPAD, ARSENIO OMPAD, NAPOLEON OMPAD, and DIONISIA
ICONG, Respondents.

Pedro T. Garcia, for Petitioners.

Pedro L. Albino & Nicolas Jumapao for Respondents.

DECISION

CONCEPCION, JR., J.:

54
Petition for certiorari, to annul and set aside the order of the Court of First Instance of Cebu, Branch
VI, dated June 17, 1967, in Cadastral Case No. 17, LRC Record No. 946, Lot 1660 of the Opon
Cadastre, directing the reconstitution of the original certificate of title in the name of "spouses
Antonio Ompad and Dionisia Icong," as well as the order dated January 4, 1968, denying the motion
to correct the order of June 17, 1967, and the original certificate of title issued pursuant thereto.

The record shows that on December 19, 1966, the herein private respondents Dionisia Icong and her
children named Filemon, Manuel, Arsenio, and Napoleon, all surnamed Ompad, filed with the Court
of First Instance of Cebu a petition for the reconstitution of the original certificate of title covering
Lot 1660 of the Opon Cadastre in the name of "Antonio Ompad and Dionisia Icong, spouses," and
once reconstituted, to cancel the same and another one issued in the name of "Filemon Ompad,
married, of legal age, and resident of Lapulapu City; Manuel Ompad, widower, of legal age, and
resident of Lapulapu City; Arsenio Ompad, married, of legal age, and resident of Lapulapu City;
Napoleon Ompad, married, of legal age, and resident of Lapulapu City; and Dionisia Icong, surviving
spouse of Antonio Ompad, of legal age and resident of Lapulapu City. 1

The petition was opposed by the herein petitioner, Espiritu Bunagan, upon the ground that he is the
owner of the lot in question, having bought the same from Guadalupe Lumongsod and Perpetua
Inso, legitimate heirs of the late Antonio Ompad; and that Dionisia Icong is merely a trustee of the
lot in behalf of Antonio Ompad. 2

On April 22, 1967, the petitioners therein moved to dismiss the opposition, contending that the said
opposition constitute an adverse claim against the rights of Antonio Ompad and Dionisia Icong
which cannot be entertained by the cadastral court. 3

Acting upon the petition and the opposition, the cadastral court ruled that it could not entertain the
claim of the oppositor which should be ventilated in an ordinary civil action, and gave due course to
the petition. After hearing, the court issued an order, dated June 17, 1967, the dispositive portion of
which reads, as follows:chanrobles virtual lawlibrary

"WHEREFORE upon payment of the prescribed fees, the Register of Deeds of Lapulapu City is
ordered to reconstitute the original certificate of title of Lot No. 1660, Opon Cadastre, located at
Basak, Lapulapu City, in the names of the original owners — spouses Antonio Ompad and Dionisia
Icong, based on its corresponding plan and technical description, Exhs. P and Q." 4

Thereafter, Original Certificate of Title No. RO-0675 was issued in the name of "spouses Antonio
Ompad and Dionisia Icong."cralaw virtua1aw library

On November 22, 1967, Espiritu Bunagan filed an urgent motion to correct the order of June 17,
1967 and the original certificate of title No. RO-9675, by substituting, as the registered owners of Lot
1660. "Antonio Ompad and Dionisia Icong" instead of "spouses Antonio Ompad and Dionisia
Icong" upon the ground that upon the evidence presented (plan and technical description and the
certificate of the Clerk of Court) the lot was adjudicated to "Antonio Ompad and Dionisia Icong"
during the cadastral proceedings, and not to "spouses Antonio Ompad and Dionisia Icong." 5

Dionisia Icong filed her opposition thereto on December 8, 1967, claiming that the issuance of the
certificate of title in the name of "spouses Antonio Ompad and Dionisia Icong" is warranted under
Section 112 of the Land Registration Act which authorizes alteration or amendment of the title upon
proper petition. 6

On January 4, 1968, the respondent Court issued an order, denying the motion to correct the order
of June 17, 1967, saying:jgc:chanrobles.com.ph

"Considering that the court, sitting as a cadastral court, did not entertain the claim of the oppositor
which, according to then Judge Jose N. Mendoza, ‘may be ventilated in a separate civil action’ this
Court, likewise, cannot entertain the Urgent Motion to Correct Order of Honorable Court dated
June 17, 1967 and Entry of Original Certificate of Title No. RO-0675 by the Register of Deeds of

55
Lapulapu City, for the same reason." 7

Now claiming that the orders dated June 17, 1967 and January 4, 1968 have been issued in excess of
jurisdiction or with grave abuse of discretion, the petitioners have filed the instant recourse to annul
and set aside the said orders.chanrobles.com:cralaw:red

There is merit in the petition. The reconstitution or reconstruction of a certificate of title literally and
within the meaning of Republic Act No. 26 denotes restoration of the instrument which is supposed
to have been lost or destroyed in its original form and condition. 8 The purpose of the reconstitution
of any document, book or record is to have the same reproduced, after observing the procedure
prescribed by law, in the same form they were when the loss or destruction occurred. If the
certificate of title covering the lot was decreed in the form of "Antonio Ompad and Dionisia Icong,"
as in this case, the reconstituted certificate of title should likewise be in the name of the owners as
they appeared in the lost or destroyed certificate of title sought to be reconstituted. Any change that
should be made in the ownership of the property should be the subject of a separate suit. 9

In the instant case, it appears that the petition filed on December 19, 1966 is not merely for the
reconstitution of a lost or destroyed certificate of title. Dionisia Icong and her children also wanted
the correction of the name of the owners of the lot from "Antonio Ompad and Dionisia Icong" to
"spouses Antonio Ompad and Dionisia Icong" which involves a material change in the certificate of
title, a change which, not being consented to by the herein petitioners whose interests are affected
thereby, cannot be authorized under the summary proceedings for reconstitution prescribed in
Republic Act No. 26. A change of this nature raises an issue which should be ventilated and decided
in an ordinary civil action. 10

The claim of Dionisia Icong that the change is authorized under Section 112 of the Land Registration
Act is without merit. The proceedings authorized in Section 112 could not be availed of in view of
the opposition of the herein petitioners, for such proceedings apply only if there is unanimity among
the parties or there is no adverse claim or serious objection on the part of any party in interest. 11

It would result that the respondent Court committed an error in re-registering Lot 1660 of the Opon
Cadastre in the name of "spouses Antonio Ompad and Dionisia Icong."cralaw virtua1aw library

WHEREFORE, the orders of June 17, 1967 and January 4, 1968 are modified in the sense that the
petition for reconstitution is granted only insofar as it orders the reconstitution of the original
certificate of title covering Lot 1660 of the Opon Cadastre in the name of "Antonio Ompad and
Dionisia Icong" and the Register of Deeds of Lapulapu City is hereby ordered to correct the name of
the registered owners in Original Certificate of Title No. RO-0675 accordingly.

G.R. No. L-24234 January 22, 1980

GREGORIO P. MANONGDO and SALVACION CHUA MANONGDO, petitioners,

vs.
TEODORA VDA. DE ALBANO, and HONORABLE ARSENIO SANTOS, Judge, CFl of
Manila, Branch IV, respondents.

Bonifacio A Alentajan and Felix Falgue for petitioners.

Ambrosio Padilla Law Office for respondent.

ANTONIO, J.:

56
Petition for certiorari to nullify the Order dated November 16, 1964 issued by respondent Judge in
LRC Case No. Cad. Rec. No. 2724, denying petitioners' motion to dismiss on the ground of lack of
jurisdiction.

The records of the case reveal the following pertinent facts:

A petition dated December 13, 1963 was filed by one Avelina de Bringas, alleging that she was the
vendee of a parcel of land situated at Constancia Street, Sampaloc, Manila, covered by Transfer
Certificate of Title No. 59001 of the Register of Deeds of Manila and that the owner's duplicate of
the afore-mentioned title was destroyed on or about April 1, 1963 when the vendor's house at San
Anton Street, Sampaloc, Manila was burned. It was prayed that the owner's duplicate that was burned
be declared as null and void and another one be issued in lieu thereof. Attached as annexes to the
petition were the alleged "Deed of Absolute Sale of Real Property" 1 and an "Affidavit", 2purporting
to have been executed by the alleged vendor, herein respondent Teodora Vda. de Albano, stating that
she has conveyed the aforesaid property to Avelina de Bringas; that due to her old age, she was not
in a physical condition to appear in court for the petition for reissuance of another owner's duplicate
of TCT No. 59001 which was destroyed in a fire at San Anton Street, Sampaloc, Manila; and that she
confirms and ratifies the right of Avelina de Bringas as absolute owner, qualifying her to petition the
court for reissuance of the own owner's duplicate of said transfer certificate of title. The affidavit was
notarized before one Amado O. Sison in Manila on December 10, 1963.

Acting on the following petition and finding the allegations thereof to have been proved by the
testimony of Avelina de Bringas vendee, the Court of First Instance of Manila, Branch IV, issued an
order, dated December 26, 1963, ordering the Register of Deeds for the City of Manila "to issue
another owner's duplicate of Transfer Certificate of Title No. 59001 of the Land Records of the said
City in the name of Teodora Vda. de Albano, in lieu of the lost one which is hereby declared
cancelled and of no further effect." 3

On the basis of said Order, the Register of Deeds issued another owner's duplicate of TCT No.
59001.

Armed with the Deed of Absolute Sale and the newly issued owner's duplicate of TCT No. 59001,
Avelina de Bringas succeeded in obtaining Transfer Certificate of Title No. 73609 in her name.
Thereafter, she sold the property to herein petitioner-spouses Gregorio P. Manongdo and Salvacion
Chua Manongdo, in whose names Transfer Certificate of Title No. 73740 was subsequently issued.

Thereafter, or less than three months later, on March 20, 1964, respondent Teodora Vda. de Albano
filed a petition which was amended on April 20, 1964. The amended petition was filed under the
same case, LRC Cad. Record No. 2724, and alleged that therein petitioner, Teodora Vda. de Albano,
is the true and registered owner of the parcel of land covered by TCT No. 59001 of the Register of
Deeds of Manila, as well as the building of strong materials constructed thereon; that the alleged
Deed of Absolute Sale in favor of Avelina de Bringas "is a forged document and is, therefore, nun
and void ab initio, as it was not signed by petitioner and she did not appear before Notary Public
Amado O. Sison"; that the alleged "Affidavit" was likewise not signed by her or by anyone
authorized to sign in her behalf, that contrary to the allegations of Avelina de Bringas, the owner's
duplicate has always been and still is in her possession and has never been destroyed or burned; that
her residence has never been burned; that she is still enough and is still in good physical condition,
able to appear in any court for any purpose; that she has never resided at San Anton Street,
Sampaloc, Manila, nor at 65 Int. 5th Avenue, Grace Park, Caloocan City; that she was not notified of
the filing of the petition for reissuance of the owner's duplicate of TCT No. 59001 at her address at
608 Constancia Street, Sampaloc, Manila, the same address stated in TCT No. 59001. It was prayed
that an order be issued confirming the validity of and revalidating the owner's duplicate of TCT No.
59001 in the name and possession of petitioner and declaring that the same has never lost its legal
force and effect; declaring as null and void ab initio the order directing the reissuance of the owner's
copy issued pursuant thereto; and declaring as null and void TCT No. 73609 in the name of Avelina
de Bringas and TCT No. 73740 in the name of spouses Gregorio P. Manongdo and Salvacion Chua
Manongdo, the same being derivative titles based on the forged Deed of Absolute Sale. It was

57
likewise prayed that the matter be referred to the City Fiscal's Office for investigation and
prosecution of the guilty parties, and such other reliefs as may be equitable in the premises.

The above-mentioned petition of Teodora Vda. de Albano was opposed by herein petitioners,
spouses Gregorio P. Manongdo and Salvacion Chua Manongdo, alleging that they are the absolute
owners of the land in question, as evidenced by TCT No. 73740 of the Register of Deeds for Manila
on January 13, 1964; that they acquired ownership thereof by virtue of a Deed of Absolute Sale
executed by Avelina de Bringas in their favor on January 9, 1964, acknowledged before Notary
Public Amado O. Sison of Manila; that petitioner can no longer ask the court to confirm the validity
of her TCT No. 59001, the same having been cancelled by order of the court, and TCT No. 73609 in
the name of Avelina de Bringas having been issued in lieu thereof; that oppositor-spouses are
innocent purchasers for value and as such are the true and absolute owners of the land in question,
according to the land Registration Act and Supreme Court decisions; that petitioner's recourse is an
action for damages against the parties guilty of having defrauded her and not a petition for
reconfirmation of her title, or to seek recovery for damages against the Assurance Fund. It was
prayed that the petition of Teodora Vda. de Albano be dismissed

Subsequently, oppositor spouses filed a Motion to Dismiss dated October 15, 1964, alleging that the
court has no jurisdiction over the subject matter of the case, since, acting as a land registration court,
it has a special and limited jurisdiction and cannot determine questions involving ownership or title
to property; and that the petition states no cause of action, considering that oppositors are not the
ones guilty of fraud and the alleged forger was not made a party to the case.

The Motion to Dismiss was opposed by petitioner Teodora Vda. de Albano, alleging that the court
has jurisdiction because the only relief sought by petitioner is the setting aside of the court's own
order directing the issuance of another owner's duplicate of TCT No. 59001 and to confirm the
validity of the owner's duplicate of TCT No. 59001 and to confirm the validity of the owner's
duplicate which was never lost and still is in the possession of petitioner. It was further alleged that
petitioner "has established thru her testimony the incontrovertible fact that she, as the registered
owner, did not file with this Honorable Court any petition that her owner's duplicate of title (Exh. J)
was lost (tsn 4, session of Sept. 23, 1964). The petitioner likewise testified that she was not notified
of the filing of the petition (Exh. B; Annex A, Petition) nor of the issuance of the order (Exh. E;
Annex B, Petition; tsn 7, session of Sept. 23, 1964). The said order is therefore nun and void ab initio,
having been issued on the basis of a false petition not filed by the registered owner of the property
and having been issued without notice to the registered owner, ...". 4

As to the allegation of lack of cause of action due to the non-inclusion of Avelina de Bringas,
petitioner countered that said person was served by registered mail with a copy of the amended
petition but she chose not to appear in court.

Further, it was alleged that oppositors are not innocent purchasers for value considering that the
petitioner and her family have lived on the subject premises for thirty-nine (39) years and neither
oppositors nor any other person has ever approached her to inspect the same or inquire whether the
property is for sale.

Oppositors filed their reply to the opposition to the motion to dismiss, reiterating that the court has
no jurisdiction because, aside from setting aside of the questioned order, petitioner likewise raises the
issues of (1) the validity of the sale between her and Avelina de Bringas; (2) the existence or
nonexistence of forgery in connection with the said sale; and (3) the ownership of the property as
between petitioners and oppositors. Likewise it was stated that there was notice of the first petition
to Teodora Vda. de Albano because a notice thereof was posted by the Sheriff on the bulletin board
of the City Hall.

Acting on the foregoing, the Court issued the questioned Order of November 16, 1964, reading as
follows:

58
 Finding no merit in the motion to dismiss dated October 15, 1964, considering that
the instant petition is basically one seeking to set aside an order for the issuance of a
new owner's duplicate of Transfer Certificate of Title No. 59001 in lieu of the last one
issued by this Court on December 26, 1963, and which is well within the power of this
Court to act upon, said motion is hereby denied and the herein oppositors directed to
present evidence in support of their opposition.

SO ORDERED. 5

Assailing the above-quoted Order, petitioner-spouses filed the instant petition for certiorari, alleging
that respondent court committed grave abuse of discretion in denying petitioners' motion to dismiss.
It is urged that respondent Albano's petition before the court a quo raises matters that should be
decided by the court not in its capacity as a land registration court but as a regular court of justice.
"The proceedings provided in the Land Registration Act", according to petitioners, "being summary
in nature ... are inadequate for the litigation of issues properly pertaining to ordinary civil actions.
Thus, in a case, it was held that 'questions involving ownership or relating to validity or discharge of
a mortgage should be properly ventilated in an ordinary proceeding' (RFC vs. Alto Surety and
Insurance Co., G.R. No. L-1433, March 24, 1960)" 6 and a land registration court cannot pass upon
questions regarding validity of contracts or their failure to express the true intention of the parties.
Further, it is averred that the petition states no cause of action and that the doctrine of innocent
purchaser for value applies in favor of petitioners. Finally, petitioners pray that the questioned Order
be annulled and respondent Judge be declared without jurisdiction to take cognizance of the case
subject matter of the petition. A writ of preliminary injunction was likewise prayed for.

Respondent Teodora Vda. de Albano filed her answer to the petition, submitting that the only issue
raised in the petition is "whether or not respondent court committed grave abuse of discretion in
denying petitioners' motion to dismissed based on the alleged lack of jurisdiction of the respondent
court over the subject matter of the case." In support of the proposition that respondent court is not
without jurisdiction over the case, respondent Albano asserts that the only legal issue presented to
the respondent court for resolution is whether or not said court, acting as a land registration court,
can set aside its own order which granted the petition filed by Avelina de Bringas by ordering the
Register of Deeds of Manila to issue another owner's duplicate of TCT No. 59001 on the basis of the
false allegation that the owner's duplicate had been burned and lost. "The respondent Court was not
called upon to decide any other issue that may subsequently be raised in connection therewith, such
as the determination of the question of ownership or title to the property. Such incidental issue may
be properly ventilated by the parties in a contentious litigation." 7

We are in accord with respondent Albano's position that the only issue to be resolved is whether or
not respondent court committed grave abuse of discretion in not dismissing respondent's petition
and, ultimately, whether or not respondent court, sitting as a land registration court, has jurisdiction
to take cognizance of the petition of respondent Teodora Vda. de Albano.

The instant petition is without merit. We find that respondent court has jurisdiction to pass upon the
issues raised by respondent Teodora Vda. de Albano in her Amended Petition of April 20, 1964,
namely: (1) whether or not the owner's copy of TCT No. 59001 was lost or destroyed in a fire, as
alleged by Avelina de Bringas in her petition for reissuance of another copy thereof; and (2) whether
or not Teodora Vda. de Albano signed the "Affidavit" wherein she alleged that she was old and
infirm and was thus authorizing Avelina de Bringas, as vendee, to bring the petition for reissuance of
another owner's copy of TCT No. 59001. In fine, the ultimate issue is whether or not the petition for
issuance of another owner's copy of TCT No. 59001 was made by or with authority of the registered
owner or by a person without any right to do so.

The foregoing are issues which affect only the proceedings had in LRC Case No. Cad. Rec. No. 2724
and are designed to determine the truth or falsity of the allegations on the basis of which respondent
court issued the questioned order directing the Register of Deed to issue another owner's copy of
TCT No. 59001. It will be recalled that in the petition filed by Avelina de Bringas, respondent court
accepted evidence and ruled upon the issue of whether or not the owner's copy was lost. Therefore,

59
there is no reason why it cannot now pass upon the same issue, considering that private respondent
was able to produce the same and to show that it was not lost. Moreover, it was the same court that
permitted the proceeding without the presence of the registered owner, relying on the affidavit
allegedly executed by Albano stating that she was too old to appear in court, and it should be given
the opportunity to rectify its own error, if such error had been committed.

The issue of whether or not the "Deed of Absolute Sale of Real Property" in favor of Avelina de
Bringas was forged, as well as other issues with respect to ownership of the property, shall not be
determined by respondent court for, as admitted by private respondent, these are matters to be
threshed out in an independent proceeding. Further, the remedies sought by private respondent
before respondent court were primarily for the setting aside of its own order directing the issuance of
another owner's copy of TCT NO. 59001, the declaration of nullity of the owner's copy which was
issued pursuant to said order, and the confirmation of the existence of the owner's COPY which
allegedly was never lost but was in the possession of the registered owner. However, the other reliefs
sought, namely, the cancellation of TCT NO. 73609 in the name of Avelina de Bringas and the
nullification of TCT No. 73740 in the name of petitioner spouses, may be decided in the
independent action for recovery of ownership, since it would involve the issues of whether or not the
property was sold to Avelina de Bringas and whether or not petitioner spouses are innocent
purchasers for value, among others, which are not properly cognizable by respondent court.

There can be no question that a court of competent jurisdiction is vested with authority to set aside
its own order in a case where such setting aside is warranted by the Rules and in order to prevent a
miscarriage of justice, and the same rule applies to a court of first instance acting as a land
registration court where rules of practice, procedure and evidence obtaining in an ordinary court are
likewise applicable. 8 This applies with more vigor in a case wherein it is claimed that there is a denial
of the right to due process because of lack of notice to the party who is most directly and
substantially concerned.

WHEREFORE, in view of all the foregoing, the instant petition is hereby DISMISSED. No
pronouncement as to costs.

G.R. No. L-49776 January 28, 1980

RODOLFO, ANDRELINA, NORMA, LYDIA, VIRGINIA, SONIA, ELSA, ROGELIO and

RAFAEL, all surnamed ZUÑIGA, petitioners,
vs.
COURT OF APPEALS (First Division), FELISA CERDENA, MARCIANA CERDENA,
Heirs of EUSTAQUIO CERDENA, Heirs of PLACIDO CERDENA, Heirs of ROSA
CERDENA, and Heirs of CELESTINA CERDENA, respondents.

Virginia Zuñiga-de Vega for and in his own behalf.

Dakila F. Castro & Associates for private respondents.

ANTONIO, J.:

Petition for review by certiorari, to set aside the decision of the Court of Appeals, dated August 11,
1978 (CA-G.R. No. 50537-R), vacating the judgment of the Court of First Instance of Bulacan of
August 31, 1971. This decision of the trial court ordered the registration of a parcel of land, situated
in Meycauayan, Bulacan, described in Plan Ap-19129 (Exhibit "E") and its accompanying technical
description (Exhibit "F"), in ten (10) undivided shares each in favor of Rodolfo, Andrelina, Norma,
Lydia, Sonia, Virginia, Elsa, Rafael and Rogelio, all surnamed Zuñiga, and the minors Pablito,
Anselmo Marina and Alex Zuñiga, represented by their mother, Adoracion Padilla. The thrust of the

60
petition is that the respondent Court of Appeals, in declaring that the trial court had no jurisdiction
in passing upon questions involving ownership of the land in dispute, had decided the question in a
manner contrary to law and applicable decisions of this Court.

The present proceedings originated from the application for the registration of title filed on January
22, 1970 by Felisa Cerdeña, Marciana Cerdeña, and the Heirs of Eustaquio, Placido, Rosa and
Celestino, all surnamed Cerdeña, with the Court of First Instance of Bulacan, over a certain parcel of
land in Meycauayan, Bulacan. They alleged, among others, that they are owners of the land in fee
simple, having inherited the same from their deceased parents, Canuto Cerdeña and Francisca
Serrano.M

At the initial hearing, nobody appeared to oppose the application, except the heirs of Felix Zuñiga.
An order of general default was entered against the whole world, with the exception of the
aforementioned oppositors.

In their opposition, the oppositors (now petitioners) alleged, inter alia, that they are the owners in fee
simple and in undivided share and interest over the parcel of land subject of registration, having
inherited the same from their father, Felix Zuñiga, who died intestate on January 31, 1966 in
Meycauayan, Bulacan; that the property was previously owned in common by Felix Zuñiga and
Francisco Serrano, having purchased the same on March 4, 1919 from Benita Francia y Abacan that
after the death of Francisca Serrano, her heirs, namely, Celestino, Rosa, Felisa, Marciana and Sixta all
surnamed Cerdeña, sold the share which they inherited from their mother, Francisca Serrano,
consisting of one-half (1/2) thereof to Felix Zuñiga and Rustica Tapispisan, parents of the
oppositors. Hence, the oppositors Rodolfo, Andrelina, Norma, Lydia, Virginia, Sonia, Elsa, Rogelio
and Rafael, all surnamed Zuñiga, together with their nephews and nieces, as the legitimate heirs of
Felix Zuñiga who died intestate on January 31, 1966 at Meycauayan, Bulacan, became the exclusive
and absolute owners of the entire property. They further ' alleged therein that they had been in
actual, physical, peaceful, public, uninterrupted and continuous possession of the same as the true
and lawful owners thereof and have caused the cadastral survey of the land now known as Lot No.
4400, Meycauayan Cadastre, and the issuance of Plan Ap-19129 in the name of the Heirs of Felix
Zuñiga.

During the course of the hearing, the applicants, Felisa Cerdeña, et al., filed on March 29, 1971, a
motion praying that a document handwriting expert from the National Bureau of Investigation be
appointed to conduct an examination of the deeds or documents submitted by oppositors at the
hearing on February 22, 1971, consisting of; (a) a deed of sale executed on March 4, 1919 by Benita
Francia (Exhibit "1-Oppositors"); and (b) a deed of sale executed on November 27, 1946 by Rosa
Cerdeña and Celestina Cerdeña (Exhibit "2-Oppositors"). This motion was granted by the trial court
on May 4, 1971. On May 27, 1971, Felisa Cerdeña, et al. filed with the trial court an urgent ex
parte motion for amendment/modification of the order of May 4, 1971 to the effect "that the
Provincial Assessor for the Province of Bulacan submits or surrenders to the National Bureau of
Investigation, Manila for examination purposes, the documents (Exhibits 1 and 2, oppositors), as
well as instruments available thereat bearing sample standards of the thumbmarks of Benita Francia
of Meycauayan, Bulacan, ... and directing the National Bureau of Investigation to examine said
documents, firstly: to determine the genuineness and authenticity as to age, type and execution, and
secondly: to examine the thumbmarks appearing on said documents with sample standards furnished
by the Provincial Assessor for Bulacan, with respect to Benita Francia, and those furnished by the
applicants herein, the latter upon previous notice to oppositors or counsel."

On May 31, 1971, the trial court issued an order, declaring that it was the duty of the applicants "to
search for and provide the documents to serve as standards of comparison for the examination", and
if the applicants are aware of such documents," they should submit the same to this Court for
approval as standards, otherwise the order for examination of the documents will be cancelled."

On June 11, 1971, applicants Felisa Cerdeña, et al. again presented a motion for the transfer of the
custody of the deeds of sale submitted by the oppositors from the Provincial Assessor of Bulacan to

61
the Acting Chief, Dactyloscopy Section, Criminalistics Division, National Bureau of Investigation,
Manila, for examination. This was granted by the trial court on June 14, 1971.

On August 31, 1971, the trial court rendered decision, declaring and stating as follows:

The facts as found by the Court from the evidence are as follows: The land was
originally owned by Benita Francia, who sold it in 1919 to Francisca Serrano and Felix
Zuñiga. (Exh. 1, 1-A and 1-B). Felix Zuñiga was the grandson of Francisca Serrano,
being the son of the latter's daughter, Celestina Cerdeña. Francisca Serrano died in
1933, and her half of the property was inherited by her children Celestina, Rosa, Felisa
and Marciana Cerdeña. Under a public document dated November 27, 1946, they sold
their half of the property to Felix Zuñiga (Exh. 2). Ownership therefore became
consolidated in Felix Zuñiga, and upon his death on January 31, 1966 his heirs,
oppositors in this case, executed an extrajudicial settlement of the estate with waiver
(Exh. 4).

Applicants, who are led by Felisa Cerdeña and Sixta Cerdeña, denied that they
executed Exhibit 2 and that the thumbprints appearing thereon were theirs. The
document was submitted to the NBI for a determination of the authenticity of the
thumbprints. The NBI examiner, Tomas Toribio, found the question prints to be
slurred, smudged, or fragmentary, and declared that they cannot be used as basis for an
examination

The mere denial by Felisa Cerdeña and Sixta Cerdeña that the thumbmarks were theirs
is not sufficient to overcome the presumption that the notarial document was validly
and regularly executed.

It appears further that the Zuñigas have always been in possession of the property, to
the exclusion of the applicants. This fact bolsters the claim of the oppositors that their
father owned the property. This ownership, which is traced back to the purchase of
the property from Benita Francia in 1919 has lasted for at least 50 years.

It having been satisfactorily established that oppositors and their predecessors-in-

interests have been in open, public, continuous, adverse and notorious possession of
the land aforementioned under a bona fide claim of ownership for more than fifty
years prior to the filing of the application oppositors are therefore entitled to the
registration applied for under C.A. 141.

WHEREFORE, the Court hereby orders the registration of the parcel of land covered
by plan Ap-19129 (Exh. E) and its accompanying technical description (Exh. F) in the
following manner: 1/10 undivided shares each in favor of Rodolfo Zuñiga, married to
Lucia Urian; Andrelina Zuñiga, married to Luis Porras Norma Zuñiga, married to
Epifanio Diano; Lydia Zuñiga, married to Leopoldo Jaime, Jr., Virginia Zuñiga,
married to Arsenio de Vega; Elsa Zuñiga, married to Beltran Fitalcorin; Rafael Zuñiga,
married to Aida Arzadon; Rogelio Zuñiga, single; all of legal age, Filipinos, and
residents of Malhacan, Meycauayan, Bulacan; and 1/10 undivided shares in favor of
Pablito, Anselmo, Marissa, and Alex, all surnamed Zuñiga, represented by their
mother, Adoracion Padilla, minors, Filipinos, and residents of Malhacan, Meycauayan,
Bulacan as their exclusive property.

This decision was appealed by Felisa Cerdeña, et al. to the Court of Appeals, contending that the
lower court erred in finding that: (a) the land applied for was sold by Benita Francia in 1919 to
Francisco Serrano and Felix Zuñiga; (b) the heirs of Francisco Serrano sold their half of the property
to Felix Zuñiga; (c) the possession by the Zuñigas of the property bolster their claim that their father
owned the property, and, as a consequence, in ordering the registration of the property — in the
names of the oppositors.

62
It was on the basis of the afore-cited facts that the Court of Appeal instead of solving the factual
issues raised, declared the court a quo as without jurisdiction to pass upon questions involving the
ownership of the land in dispute and vacated the judgment appealed from without prejudice to
having the issue of ownership litigated in an ordinary action before a before court of first instance.

The purposes of the land registration law, in general, are: the ascertain once and for all the absolute
title over a given landed property; to make, so far as it is possible, a certificate of title issued by the
court to the owner of the land absolute proof of such title; to quiet title to the land and to put a stop
forever any question of legality to a title; and to decree that land title to be final, irrevocable and,
undisputable." 1

It is true that a court of first instance acting as a land registration court has limited and special
jurisdiction. lt cannot be denied, however, that when the law confers jurisdiction upon a court, the
latter is deemed to have all the necessary powers to exercise such jurisdiction to make it
effective. 2 The purpose of the applicant is to prove that he has an absolute or simple title over the
property sought to be registered, otherwise his application will be denied. All absolute oppositor
claims a dominical right totally adverse to that of the applicant. If successful, registration will be
decreed in favor of the oppositor. As to whether or not private respondents have absolute or fee
simple title over the property sought to be registered necessarily requires a resolution of the question
as to whether or not the oppositors had a dominical right totally adverse to that of the applicants.
hence, the relevancy of the issue of the validity of the conveyances in question. This issue is not
foreign but intimately related to the principal question involved in the registration proceedings.
Conceding the materiality of this question, both parties submitted for resolution to the court a quo
the issue on the genuineness and authenticity of the deed of sale, executed by Benita Francia on
March 4, 1919 in favor of Francisca Serrano and Felix Zuñiga (Exhibits "1", "1-A" and "I-B"). and
the deed of sale executed by applicants on November 27, 1946 in favor of Felix Zuñiga (Exhibit "2").
Thus, private respondents, as applicants in the afore-mentioned proceedings, moved on March 29,
1971 before the land registration court, for the appointment of a handwriting expert to conduct an
examination of the aforesaid deed of sale submitted by oppositors on the hearing of March 22, 1971.
Even after this motion was granted by the trial court on May 4, 1971, private respondents again on
May 27, 1971 sought the modification of the order of the trial court of May 4, 1971 to the effect that
the Provincial Assessor of Bulacan should submit to the National Bureau of Investigation for
examination purposes "the documents (Exhs. I and 2, Oppositors) as well as instruments available
thereat bearing sample standards of the thumbmarks of Benita Francia of Meycauayan, Bulacan."
Subsequently on June 11, 1971, applicants moved for the transfer of the possession and custody of
the afore-cited documents from the Provincial Assessor to the Acting Chief, Dactyloscopy Section,
Criminalistics Division, NBI, Manila for examination, which motion was granted by the Court on
June 14, 1971. The result of the examination was discussed in the decision of the trial court. The
validity of the aforesaid conveyances was, therefore, duly threshed out in the hearings before the trial
court. Full opportunities were given to both parties in the presentation of their respective sides and
in the submission of evidence in support thereof. The evidence presented by the parties was fully
considered by the court in its decision. As a matter of fact, on appeal, the main assignment of error
of private respondents before the Court of Appeals dealt with the sufficiency of the finding of fact of
the trial court that the land in question was sold to the oppositors. In Franco, et at v. Monte de
Piedad 3 this court stated in emphatic terms that although the general rule is that a land 'registration
court has no power to decide cases involving issues properly litigated in ordinary actions, yet
inasmuch as in this jurisdiction it is the courts of first instance that also function as courts of land
registration, our jurisprudence recognizes exceptions to said rule, where the parties have acquiesced
in submitting the issues for determination in the registration proceedings. and they are given full
opportunity to present their respective sides and submit their evidence. 4 From the cases, it may be
gathered that, from the otherwise rigid rule that the jurisdiction of a land registration court, being
special and limited in character and proceedings thereon summary in nature, does not extend to
issues properly litigatable in ordinary civil action, deviations have been sanctioned under the
following conditions: (1) the parties mutually agreed or have acquiesced in submitting the aforesaid
issues for determination by the court in the registration proceedings; (2) the parties have been given
full opportunity in the presentation of their respective sides of the issues and of the evidence in
support thereof; and (3) the court has considered the evidence already of record and is convinced

63
that the same is sufficient and adequate for rendering a decision upon the issues. 5 The foregoing
situations exist in the case at bar.

To require that this case be litigated anew in another action between the parties would lead to
multiplicity of suits, abet unnecessary delays in the administration of justice and negate the
constitutional right of all persons "to a speedy disposition of their cases before all judicial, quasi-
judicial, or administrative bodies." 6

WHEREFORE, in view of all the foregoing, the decision of respondent Court of Appeals in CA-
G.R. No. 50537-R is hereby set aside, and the respondent Court is hereby directed to decide the
appeal on the basis of the questions of fact raised by the parties.

SO ORDERED.

[G.R. No. L-32949. November 28, 1980.]

JOSE D. SANTOS, in his official capacity as REGISTER OF DEEDS OF

RIZAL, Petitioner, v. HON. BENJAMIN H. AQUINO, in his official capacity as Judge of
the Court of First Instance of Rizal, Branch VIII, and JOSE R. BARICUA, Respondents.

DECISION

CONCEPCION, JR., J.:

Petition for the review of the decision of the Court of First Instance of Rizal, Branch VIII, in LRC
Case No. N-3514, Rec. No. N-21358, entitled: "In re: Petition for Clarification of Transfer Certificate
of Title No. 209148 of the Register of Deeds of Rizal; Jose R. Baricua, Petitioner," which directed the
Register of Deeds of Rizal "to register the deed of sale or mortgage or any form of encumbrance
presented by the petitioner in favor of any purchaser, encumbrance, or mortgagor affecting the land
covered by Transfer Certificate of Title No. 209148 and issue new title in lieu of the latter, upon
payment of the corresponding fees."cralaw virtua1aw library

To curb the pernicious practice of "land-grabbing", the Land Registration Commission issued LRC
Circular No. 167 on February 13, 1968, instructing all Register of Deeds to withhold or suspend the
registration of any instrument affecting property with expanded or increased areas. The circular 1
reads, as follows:chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

"LRC CIRCULAR NO. 167

SUBJECT: Plans with increased areas.

TO: ALL REGISTER OF DEEDS AND BRANCH

DEPUTY REGISTER OF DEEDS

In connection with subdivision (whether simple or complex), consolidation, consolidation

subdivision, and resurvey or relocation plans approved by this Commission that may be presented, or
are now pending registration, or have been already registered in the Register of Deeds and Branch
Registries, it is directed that the Register of Deeds examine or re-examine the plans to find out if
there are any that may have resulted in expanded or increased areas. If there be any of such cases,
they are hereby instructed:chanrob1es virtual 1aw library

1. To deny the registration on said plans and to withhold the issuance of the corresponding titles; or

64
if the plans have already been registered and to take appropriate steps for their cancellation.

2. To withhold or suspend the registration of any instrument affecting or involving lands covered by
these plans with expanded or increased areas.

3. To submit a list of this plans, if any, to the Commission, together with a report of the
corresponding action they have taken.

Immediate compliance with these directives is herewith enjoined."cralaw virtua1aw library

In LRC Consulta No. 613, dated March 18, 1969, implementing Circular No. 167, the Commissioner
of Land Registration ruled that "Register of Deeds are instructed to withhold or suspend the
registration of every instrument affecting properties with expanded areas shall have been fully
resolved by competent court in an appropriate proceeding." 2

Claiming that his property situated in Barrio Tambo, Parañaque, Rizal is affected by said Circular No.
167, the herein private respondent Jose R. Baricua, filed a petition, dated April 30, 1970, with the
Court of First Instance of Rizal, Branch VIII, presided by the herein respondent judge, seeking the
clarification of Transfer Certificate of Title No. 209148 of the Register of Deeds of Rizal. The
petition was entered and docketed in the original land registration proceedings. 3

On June 3, 1970, the respondent judge issued an order directing the Register of Deeds of Rizal to
register any instrument of conveyance or encumbrance that may be presented by Jose R. Baricua for
registration affecting or involving the land covered by Transfer Certificate of Title No. 209148, upon
payment of the corresponding fees. 4 Consequently, on July 24, 1970, Jose R. Baricua presented for
registration a deed of sale executed in his favor by Felipe Lazaro, the registered owner of the parcel
of land covered by TCT No. 209148, and in view of the order of June 3, 1970, TCT No. 209148 was
cancelled and TCT No. 296989 was issued in the name of the said Jose R. Baricua. 5 However, on
July 28, 1970, the Register of Deeds of Rizal elevated, en consulta the order of June 3, 1970 to the
Land Registration Commission. 6 He also informed the Solicitor General of the questioned order, 7
and the latter filed a motion for the reconsideration of the order of June 3, 1970, upon the grounds
that the Register of Deeds of Rizal was denied due process of law in that he was not given the
opportunity to be heard since the copy of the petition which had been set for hearing on May 16,
1970, was received by him only on May 21, 1970 and he was not served with any other notice of
hearing since then; that there was non-exhaustion of administrative remedies before resort to the
court was made; and that the petition filed before the land registration court is not the proper remedy
because the issues involved are questions of law which should be threshed out through
administrative and judicial processes provided for by law. 8 In view thereof, the respondent judge
issued an order on August 25, 1970, directing the Register of Deeds of Rizal "to hold in abeyance the
registration of any deed of sale or mortgage or any form of encumbrance that may be presented by
the petitioner relative to the land covered by Transfer Certificate of Title No. 209148 or in the event
that due course has already been given to our aforesaid order of June 3, 1970 to withhold the
released of any title that might have been issued pursuant thereto." 9

Meanwhile, in a first indorsement dated August 13, 1970, the Assistant Commissioner of Land
Registration Commission informed the Register of Deeds of Rizal that he sees "no legal impediment
to the registration of the documents adverted to in the Court order dated June 3, 1970, issued by
Honorable Benjamin H. Aquino, Judge of the Court of First Instance of Rizal Branch VIII, provided
that the document is drawn up in accordance with law," and that, in this particular case, LRC Circular
No. 167, dated February 13, 1968, may be considered superseded by the aforementioned court order.
10 Not satisfied with the answer of his query, the Register of Deeds of Rizal requested clarification as
to whether or not the opinion of the Assistant Commissioner may be treated as a ruling on the
matter, 11 and the Assistant Commissioner reiterated his answer and directed the Register of Deeds
of Rizal to Comply with his directive. 12 However, in a first indorsement to the Solicitor General
dated November 6, 1970, the Land Registration Commission stated that "the two cited
communications of the Assistant Commissioner of Land Registration represent the latter’s personal
opinion regarding the matter." 13

65
On September 19, 1970, the respondent judge denied the petitioner’s motion for reconsideration and
directed the Register of Deeds of Rizal to comply with his order of June 3, 1970. 14

Hence, the present recourse. The Court considered the petition as a special civil action and ordered
the respondents to file an answer thereto, 15 but, the latter failed to do so, 16 although counsel for
the respondent Jose R. Baricua asked for, and was grated an additional period of time within which
to file his answer to petition. 17 Nor did the said respondents file a brief notwithstanding receipt of
copies of the petitioner’s brief. 18

The order of respondent court to cancel TCT No, 209148 and to issue another in lieu thereof was
evidently made pursuant to Section 112 of Act 496 which confers authority upon the land
registration court, after determination that the petition is supported by good and valid reasons, to
order the cancellation, alteration or amendment of a certificate of title. Relief under Section 112 of
Act 496, may be granted if there is unanimity amongst the parties; or, in case of opposition, no
serious adverse claim or serious objection on the part of an interested party affecting the subject
matter of the petition. 19 Otherwise, the proper recourse by the parties would be no bring up said
questions in an ordinary civil action or in the proceeding where the incident properly belongs.
Considered serious enough to warrant dismissal of a petition under Section 112 of Act 496 is the
question involving ownership of or title to real property. 20

In the present case, it is conceded that there are some defects in the formal requirements for the
issuance of TCT No. 209148 and that the said title covers a parcel of land with an increased or
expanded area and the Register of Deeds of Rizal has recommended the cancellation of the title
pursuant to LRC Circular No. 167. There is, in substance, a controversy as to the ownership of the
increased or expanded area, if not a serious objection to the rights of Jose R. Baricua over the parcel
of land covered by TCT No. 209148, which has to be litigated in an appropriate proceeding before a
court of general jurisdiction, 21 since the proceedings provided in the Land Registration Act are
summary in nature and are inadequate for the litigation of issues properly pertaining to ordinary civil
actions. Consequently, the respondent judge exceeded his jurisdiction in ordering the cancellation of
TCT No. 209148 and the issuance of TCT No. 296989 in the name of Jose R. Baricua.chanrobles
virtual lawlibrary

Besides, it appears that the petition for clarification filed by Jose R. Baricua amounts to an action for
declaratory relief or quieting of title which is within the competence of an ordinary civil court so that
the respondent court, acting as a land registration court with limited jurisdiction, had no authority to
entertain the said petition for clarification. Thus, in his petition for clarification, Jose R. Baricua
alleged that he is the owner in fee simple of certain parcel of land situated in the Barrio of Tambo,
Parañaque, Rizal, covered by TCT No. 209148 of the Register of Deeds of Rizal; that the
aforementioned parcel of land became the subject of an investigation by the Office of the Provincial
Fiscal of Rizal and on the basis of such investigation it was found out that while there may be some
defects in the formal requirements for the issuance of title, the fact remains that the land covered by
said title really belong to him, as evidenced by a copy of a deed of sale executed in his favor; that
likewise, the said parcel of land was the subject of LRC Circular No, 167 and LRC Resolution No.
____ wherein transactions affecting the said parcel of land be held in abeyance unless the same have
been resolved and clarified by a competent court; and that as owner of the land for which no less
than the Office of the Provincial Fiscal concedes and recognizes it is a fundamental right of
ownership that they may dispose or encumber said land in such manner as will be consistent with
law, and until and unless said title are voided, it is still subsisting. Wherefore he prayed that the
Register of Deeds of Rizal be directed to register any deed or deeds conveying or encumbering
Transfer Certificate of Title No. 209148 which may be presented in the future.

As could be seen therefrom, Jose R. Baricua is asking for a judicial determination of his rights under
TCT No. 209148 in view of LRC Circular No. 167. His object is to terminate incertainty as to the
effect of Circular No. 167 on TCT No. 209148. Perforce, it is within the scope and purpose of an
action for declaratory relief as contemplated in Rule 64 of the Revised Rules of Court, Section 1 of
which reads, as follows:chanroblesvirtualawlibrary

66
"Section 1. Who may file petition. — Any person interested under a deed, will, contract or other
written instrument, or whose rights are affected by a statute, executive order or regulation, or
ordinance, may, before breach or violation thereof, bring an action to determine any question of
construction or validity arising under the instrument or statute and for a declaration of his rights or
duties thereunder.

An action for the reformation of an instrument, to quiet title to real property or remove clouds
therefrom, or to consolidate ownership under Article 1607 of the Civil Code, may be brought under
this rule."cralaw virtua1aw library

WHEREFORE, the orders of the respondent judge dated June 3, 1970 and September 19, 1970 are
hereby annulled and set aside. The petition for clarification of TCT No. 209148, filed by Jose R.
Baricua, is dismissed and TCT No. 296989 of the Register of Deeds of Rizal is accordingly cancelled.
With costs against the respondent Jose R. Baricua in both instances.chanrobles virtual lawlibrary

G.R. No. L-25788 April 30, 1980

PACIFICO C. DEL MUNDO, petitioner,

vs.
THE HONORABLE COURT OF APPEALS, ANTONIO, EUGENIA, DELFIN and
MARCIANA, all surnamed ALVAREZ, and SIMPLICIO BALCOS, respondents.

Manuel P. Dumatol for petitioner.

Balcos & Salazar for respondents.

DE CASTRO, J.:

Petitioner seeks in this petition for certiorari to reverse in toto the decision of the Court of Appeals
promulgated on 3 January 1966 in CA-G. R. No. 28276-R, entitled "Antonio Alvarez, Eugenia
Alvarez, Delfin Alvarez, Marciana Alvarez, and Simplicio Balcos, plaintiffs-appellants vs. Isidra de la
Cruz, Teodora Alvarez and Pacifico C. del Mundo, defendants-appellees, the dispositive portion of
which reads: 1

WHEREFORE, the extrajudicial partition executed by Isidra de la Cruz and Teodora

Alvarez on July 31, 1956 acknowledged before Notary Public Benjamin N. Domingo
and recorded as document No. 143 on page 43, book 1, series of 1956 of his notarial
registry, copy of which is attached to the records and marked as Exhibit G is hereby
declared null and void and of no force nor effect.

Transfer Certificate of Title No. 32529 of the land records for Quezon City is hereby
declared cancelled and of no force and effect. In lieu thereof, the Register of Deeds of
Quezon City is hereby ordered to issue a new Transfer Certificate of Title in the names
of Antonio Alvarez, Eugenia Alvarez, Delfin Alvarez, as co-owners pro indiviso in the
following proportions: To each of Antonio, Eugenia, Delfin, Marciana and Teodora all
surnamed Alvarez, 13/75 share in full ownership and 2/75 share in naked ownership,
to Isidra de la Cruz 10/75 share in full.

The Court of Appeals found undisputed the following facts. 2

Plaintiffs (herein private respondents) Antonio, Eugenia, Delfin and Marciana all
surnamed Alvarez are legitimate children of Agripino Alvarez and his first wife

67
 Alejandra Martin. After the death of Alejandra Martin, Agripino Alvarez married Isidra
de la Cruz in February 1927 and they had one child named Teodora Alvarez.

On December 23, 1947, Agripino Alvarez died intestate, survived by his widow Isidra
and his five children, the four plaintiffs and Teodora.

On July 31, 1956, a public instrument entitled 'Extra-judicial Partition with Absolute
Sale of Shares' was executed by the widow Isidra and her daughter Teodora Alvarez
(Exhibit G) wherein, after reciting that they are 'the legal and absolute heirs, the first
being the wife and the second, is the daughter of the deceased Agripino Alvarez', they
adjudicated to themselves in equal shares the property covered by Transfer Certificate
of Title No. 42562 of the land records for Rizal and in the same instrument, both
Isidra and her daughter Teodora sold the entire property to Pacifico C. del Mundo
who registered the instrument in August 1956. As a result of such registration,
Transfer Certificate of Title No. 32529 of the land records for Quezon City was issued
in the name of del Mundo.

On February 10, 1958, the children of Agripino by his first wife sold to Simplicio
Balcos four tenths (4/10) undivided share in the property in question (which they
claim as their share in the estate of their father). The deed of sale has never been
registered.

On May 31, 1958, said children by the first marriage of Agripino Alvarez and their
vendee Simplicio Balcos brought the present action against Isidra de la Cruz and her
daughter Teodora Alvarez as well as against the vendee Pacifico del Mundo before the
Court of First Instance of Rizal asking that judgment be rendered:

1. Declaring the Extra-Judicial Partition with Absolute Sale of Shares Annex 'B', null
and void;

2. Declaring null and void T.C.T. No. 32529, Registry of Deeds for Quezon City, and
reviving T.C.T. No. 42562, Registry of Deeds for the Province of Rizal;

3. Declaring the plaintiffs Alvarez' entitled to an undivided share of 1/10 each of the
lot in question with right to dispose of the same;

4. Ordering the defendant Pacifica C. del Mundo, married to Ester dela Cruz and
plaintiff Simplicio Balcos to enter into and agreement or extra-judicial petition of the
property in accordance with their participation as purchasers of the shares of the
original heirs;

5. Ordering the defendants to pay attorney's fees in the sum of P1,000.00 and to pay
the costs.

After trial the Court of First Instance of Rizal rendered its decision 3 dated 20 June 1960 dismissing
private respondents' complaint, holding that the property in question is the paraphernal property of
Isidra de la Cruz.

Their motion for reconsideration of the above decision having been denied, private respondents
appealed to the Court of Appeals the dispositive portion of whose decision was quoted at the
beginning of this decision, said Court sustaining the appeal thereby reversing the judgment of the
lower court.

Only petitioner Pacifico del Mundo filed a motion for reconsideration which was, however, denied
by the Court of Appeals on 21 February 1966. 4 Hence, the instant petition filed by him to review the
decision of the appellate court, following assignment of errors. 5

I
68
 THE COURT OF APPEALS ERRED IN DECLARING THE PROPERTY IN
QUESTION AS CONJUGAL PROPERTY OF AGRIPINO ALVAREZ AND
ISIDRA DE LA CRUZ AND NOT AS PARAPHERNAL PROPERTY OF ISIDRA
DE LA CRUZ ALONE.

II

THE COURT OF APPEALS ERRED IN ORDERING THE CANCELLATION

OF TRANSFER CERTIFICATE OF TITLE NO. 32529 OF THE REGISTRY OF
DEEDS OF QUEZON CITY WHICH IS IN THE NAME OF HEREIN
PETITIONER APPELLANT.

III

THE COURT OF APPEALS ERRED IN ORDERING THE REGISTER OF

DEEDS OF QUEZON CITY TO ISSUE A NEW TRANSFER CERTIFICATE OF
TITLE IN THE NAMES OF ANTONIO ALVAREZ, EUGENIA ALVAREZ,
DELFIN ALVAREZ, MARCIANA ALVAREZ AND TEODORA ALVAREZ AS
CO-OWNERS PRO-INDIVISO IN THE FOLLOWING PROPORTIONS: TO
EACH OF ANTONIO, EUGENIA, DELFIN, MARCIANA AND TEODORA,
ALL SURNAMED ALVAREZ, 13/75 SHARE IN FULL OWNERSHIP AND 2/75
SHARE IN NAKED OWNERSHIP: TO ISIDRA DE LA CRUZ, 10/75 SHARE IN
FULL.

The pivotal question thus presented in this petition is whether the property formerly covered by
Transfer Certificate of Title No. 42562 (Rizal) now Transfer Certificate of Title No. 32529 (Quezon
City) is the conjugal property of Agripino Alvarez and Isidra de la Cruz or the paraphernal property
of the latter alone. Petitioner maintains that it is the paraphernal property of Isidra de la Cruz as ruled
by the lower court because of two grounds, namely: 6 "(1) the admission by Agripino Alvarez in
Exhibit F, the deed of sale executed by Simplicio Dantes and Emilia Rivera of the property in
question to Isidra de la Cruz, that the said property is Isidras paraphernal property'; and (2) the said
admission operates as estoppel against Agripino Alvarez and/or his heirs, namely, the respondents-
appellees in the instant case, from claiming any interest in said property, adverse to that of Isidra de
la Cruz and/or transferee or persons privy to her.

Private respondents, on the other hand, seek to uphold the decision of the respondent Court of
Appeals which, as aforestated, ruled in favor of the conjugal nature of the property and discredited
the evidence of petitioner, as well as that of his co-defendants in the court a quo, regarding the
purchase of the property by Isidra de la Cruz prior to her marriage with Agripino, by saying, inter alia
that: 7

... If the sale by Juan Dantes and his wife to Isidra is true and was really not reduced to
writing for the reasons given by Simplicio, why is it that Juan Dantes, in executing the
deed of sale in favor of Simplicio stated in the deed of sale that he sold the entire lot of
over three hectares to Simplicio instead of stating that he previously sold a portion
thereof to Isidra and the remainder to Simplicio? Had this been stated in the deed of
sale to Simplicio, there would have been no need for Simplicio to execute Exhibit F in
favor of Isidra de la Cruz.

Moreover, if the property was really sold by Juan Dantes to Isidra in 1920 or 1921. as
claimed by the defendants, why is it that in Exhibit F, Simplicio did not state so?
Simplicio stated in said document (Exhibit F) that he was the one selling the lot to
Isidra. Had he stated that he was merely transfering to Isidra the smaller lot which was
not actually purchased by him from Juan Dantes, there would have been no necessity
of making it appear in Exhibit F that the money used by Isidra was her own
paraphernalia property.

69
Apparently, the question is factual for it involves an examination of the probative value of the
evidence Presented by the litigants or any of them, 8 in order to determine the true nature of the
property in question. While as a rule, the findings of fact of the Court of Appeals are final and
conclusive and cannot be reviewed on appeal to this Court, one of the recognized exceptions to said
rule is when the conclusion made is manifestly mistaken. 9 We are of the opinion that the ruling of
the Court of Appeals is not persuasive, and We are accordingly constrained to hold that it is in error
in concluding that the property in question is conjugal.

The testimony of Marcelo Bernal, which "was wholly corroborated by Simplicio Dantes and
Valentina San Andres" as correctly observed by the lower court, 10 anent the sale of the questioned
property to Isidra in 1920 or 1921 when the latter was then single, it having been admitted that
Agripino married Isidra only in February 1927, appears to be unrebutted by the private respondents.
They place reliance mainly on the deed of sale 11 executed by Simplicio Dantes and his wife in favor
of Isidra de la Cruz, when the latter was already married and where in said deed, no mention was
made about the sale by the original owners to Isidra. They lose sight of the fact, however, that this
deed of sale was executed only for the purpose of recognizing or confirming the verbal sale made by
the original owners to Isidra in 1920 or 1921, long before her marriage to Agripino in February 1927.
This is the very reason why Agripino had to sign in said deed of sale, declaring that "the money with
which Lot No. 1189-C was purchased from the spouses Simplicio Dantes and Emilia Rivera is her
own money, and does not belong to our conjugal property, and therefore, the said Lot No. 1189-C,
is her, Isidra's paraphernal property" (sic). 12 The declaration aforequoted is of the highest evidentiary
value being one against the declarant's own interest. It may well be presumed that Agripino would
not have made the said declaration unless he believed the same to be true, prejudicial as it is to his
children's interests as his heirs, with his first wife. Good faith is always to be presumed, and a person
always takes ordinary care of his concerns. 13 Against these presumptions, the contrary must be
clearly established and proven by sufficient evidence, which is clearly wanting in the instant case. No
explanation was given why the aforesaid declaration should not be given due weight. It is significant
to note that the same was made on 28 February 1941 or more than six (6) years prior to Agripino's
death on 23 December 1947 without his having repudiated the same. Neither did the private
respondents, as heirs, question said declaration. Agripino was, therefore, clearly in estoppel to deny
his declaration. As such, he can lay no claim nor interest in the questioned property, nor can the
private respondents do so, for the person from whom they claim to have succeeded to the property
had no title thereto. Estoppel is effective even on successors in interest. 14

Moreover, when the question is exclusively between husband and wife, or between one of them and
the heirs of the other, the admission or acknowledgment of one spouse that the money used to
purchase the property came from the other spouse, is evidence against the party making the
admission or his heirs. 15 Likewise, where the husband has been a party to an act of purchase of
immovable property in the name of his wife, which recited that the purchase was made with
paraphernal funds, and that the property was to be and remain paraphernal property, neither he nor
his heirs can be permitted to go behind the deed and contest the wife's title to the property by
claiming that it is conjugal.16 Since the property is the paraphernal property of Isidra, the same having
been acquired by her prior to her marriage with Agripino 17 and having been purchased with her
exclusive or private funds 18 any declaration to the contrary made by her, as well as that of her child,
cannot prevail nor change the character of the property in question. The extra-judicial partition was
evidently an expedient only to facilitate the sale without giving rise to any question as to the legality
of the transmission of the property to Isidra and his daughter, as the death of Agripino Alvarez may
occasion, for the better protection of the vendee, the petitioner herein. If the property were conjugal
the private respondents would have been made parties to the extra-judicial partition and made
signatories thereto. As the Court of First Instance aptly observed.

The Court believed that the Deed of Extra-Judicial Partition submitted in the case at
bar cannot affect or change the paraphernal character of the property in question. ...
Since the deceased Agripino Alvarez has formally and categorically declared that he has
no right or interest whatsoever in the property in question, the same being paraphernal
it follows that his heirs, the plaintiffs herein, have not inherited any portion or right in
the property, as the heirs merely step into the shoes of the decedent.

70
 Moreover, the law does not provide that separate property becomes conjugal simply by
reason of an extra-judicial partition after the death of one spouse, or by erroneous
conclusions or declarations made later. The Court has noticed that defendant Isidra de la Cruz
affixed only her thumb-mark on the deed of extra-judicial partition it is therefore obvious that she is
illiterate and does not know the technical intricacies of the law of property. Reason and justice demand
that acts done beyond the manifest understanding of illiterates must not be used to deprive them of their
acquired rights or their property, or as a weapon to work injustice upon them Hence, the Court is of
the opinion that in the instant case the money used in the purchase chase of the property subject of
litigation is the exclusive money of defendant Isidra de la Cruz.

From what has been said on the foregoing, We find the first two assigned errors t• be well taken.
Since the property involved in this case is the paraphernal property of Isidra, it follows that the Court
of Appeals erred in ordering the cancellation of transfer Certificate of Title No. 32529 of the Registry
of Deeds of Quezon City which is in the name of herein petitioner. The sale between Isidra and
herein petitioner is a perfectly valid sale, although in the document drawn 19 the property was
erroneously treated as conjugal. No valid reason is shown to invalidate the same, especially so where
the persons, herein private respondents, claiming to be entitled to a portion thereof have been shown
to have neither interest nor title thereto.

And finally, the third assigned error is likewise meritorious. As stated beforehand, the Court of
Appeal found that the property in litigation is the conjugal property of the spouses Agripino Alvarez
and Isidra de la Cruz. Granting that finding to be true, said Court should have first liquidated the
conjugal partnership of the spouses and adjudicate one half of the property in favor of the surviving
spouse Isidra, in full ownership; 20 and the other half, to the deceased husband's heirs, wherein Isidra
shall likewise be entitled to a portion thereof in usufruct equal to that corresponding by way of
legitime to each of the legitimate children or descendants who has not received any betterment 21 to
be taken from the third at the free disposal of the deceased parent. 22 This, said Court did not do.
Instead, in designating the fractional shares of Agripino's heirs, it had treated the property as his
capital alone. The dispositive portion, therefore, is in conflict with the basic finding of said Court,
which actuation was branded by the petitioner as a showing of "seeming partiality. 23 Hence, the
questioned decision is a nullity, giving justification for its reversal and for Us to revert to that of the
lower court.

UPON THE FOREGOING CONSIDERATIONS, the decision appealed from should be, as it is
hereby, REVERSED and the complaint filed by the private respondents' DISMISSED. No
pronouncements as to costs.

SO ORDERED.

[G.R. No. L-27843. October 11, 1979.]

CLARA TORELA AND SILVERIANA TORELA, appellants-petitioners, v. FELIMON

TORELA, MARCIANA GEPANAGO AND MARCOS MAHILUM AND THE COURT OF
APPEALS, appellees-respondents.

DECISION

ABAD SANTOS, J.:

Petitioners, whose complaint was dismissed both in the Court of First Instance of Negros Occidental
and in the Court of Appeals, would have us reverse the decision of the latter and declare the land in
litigation as the conjugal property of their parents so that they will be entitled to their mother’s share
who had died.cralawnad

71
The decision of the Court of Appeals which was penned by Mr. Justice Hermogenes Concepcion, Jr.,
now a distinguished member of this Court, is reproduced hereunder in its material aspects for the
factual background of the case and to enable us to identify the legal problem.

"It appears that on December 21, 1929, Decree No. 440157 was issued by the Court of First Instance
of Occidental Negros in favor of Felimon Torela, married to Graciana Gallego, decreeing that he is
the owner of a certain parcel of land (Lot No. 3770 of the Cad. Survey of Cauayan) described therein,
and ordering that the same be registered in the name of said Felimon Torela in accordance with the
provision of Land Registration Act (Exh. 3 also Exh 4). Consequently, Original Certificate of Title
No. 29257 covering said Lot No. 3770 of the Cauayan Cadastre was issued in favor of Felimon
Torela. As the certificate of title (O.C.T. No. 29257) was either lost or destroyed during the last
world war, Felimon Torela filed a verified petition for reconstitution, dated December 28, 1953,
praying that after due publication thereof in the Official Gazette, as provided for by law, an order be
issued setting the petition for hearing (Exh A). Thereafter an order was issued on July 8, 1957, the
dispositive portion of which is as follows —

‘WHEREFORE, the Court, pursuant to section 13 of Republic Act No. 26, hereby orders the
Register of Deeds of this province to reconstitute the original as well as the owner’s duplicate of
Original Certificate of Title No. 29257, covering Lot No. 3770 of Cauayan Cadastre, this province,
on the basis of the above-mentioned Decree No. 440157 (Exh. D) for the said lot. All liens and
incumbrances affecting the above state lot which appeared noted on the certificate of title sought to
be reconstituted at the time of its loss or destruction, shall be an annotated on the reconstituted
certificate of title. Once the reconstitution herein ordered is duly accomplished, let a second owner’s
duplicate certificate be issued to the petitioner.’

Thus, Original Certificate of Title No. RO-6898 (29257) was issued in favor of Felimon Torela, in
lieu of the lost and/or destroyed one (Exh. D, p. 125, Rec.).

On March 5, 1958, Felimon Torela, filed a ‘Motion Ex-Parte alleging that Lot No. 3770 of the
Cauayan Cadastre having been acquired by him by way of inheritance prior to his marriage to his first
wife, Graciana Gallego, the Cadastral court ordered that said land be registered in the name of
Felimon Torela, married to Graciana Gallego; that his first wife died many years ago; and that he is
married by second nuptial to Marciana Gepanago. He, therefore, prayed that the court order the
Register of Deeds of Negros Occidental to change his (movant’s) civil status, appearing on the face
of the original certificate of title, ‘from Felimon Torela, married to Graciana Gallego to Felimon
Torela, married to Marciana Gepanago’ (Exh. E). Acting upon the Motion Ex-Parte, the court,
finding no opposition thereto and with the conformity of Clara Torela, daughter of Felimon Torela
by first marriage, granted the motion and ordered the Register of Deeds to change the civil status of
the movant from ‘Felimon Torela, married to Marciana Gepanago’, which is the actual civil status of
the movant, upon payment of the required fees. (Order of March 10, 1958, Exh. F.)

On March 4, 1958, Felimon Torela executed a definite deed of sale (Exh. 1), whereby, for and in
consideration of P3,000.00, he sold Lot No. 3770 of the Cadastral Service of Cauayan to Marcos P.
Mahilum and Maria Luna Mahilum. He also stated in the deed of sale that he was a widower by first
marriage to Graciana Gallego, and now married to Marciana Gepanago; that he is the registered
owner of said Lot No. 3770, having acquired it by inheritance from his parents before his marriage to
Graciana Gallego, deceased. The document (Exh. 1) was acknowledged before Notary Public Jose T.
Tabuga. Upon registration of Exhibit 1, Transfer Certificate of Title No. T-23078 was issued to said
spouses (Exh. 2).

According, however, to the plaintiffs while in their youth they had seen their father Felimon and
their mother Graciana Gallego clean the lot in question, as it was then forested. And when their
mother died, their father married Marciana Gepanago. In other words, the plaintiffs want us to
believe that the parcel of land is a conjugal property of their father and mother (Felimon and
Graciana). And since their father succeeded in changing his status and in conveying the land to
another, they now assert their right to the estate appertaining to their mother, alleging that they were
deprived of their corresponding share from the property thus sold.

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Under the conflicting claims of the plaintiffs and their father, defendant Felimon Torela, the decisive
question is whether or not the parcel of land herein involved is a conjugal property of the spouses
Felimon Torela and Graciana Gallego (plaintiffs’ mother).

Felimon Torela declared that he and his first wife Graciana were married in 1915 (t.s.n., p. 18). And
the land in question was decreed in the name of Felimon Torela, married to Graciana Gallego (Exh.
B, which is also Exh 4). According to Article 1401 of the Old Civil Code, the following properties
belong to the conjugal partnership:chanrob1es virtual 1aw library

1. Property acquired for a valuable consideration during the marriage at the expense of the common
fund, whether the acquisition is made for the partnership or for one of the spouses only;

2. Property obtained by the industry, wages or work of the spouses or of either of them;

3. The fruits, income, or interest collected or accrued during the marriage, derived from the
partnership property, or from that which belongs separately to either of the spouses.

Felimon Torela testified that he inherited the contested property from his parents, Pedro Torela and
Soperiana Magbanua. True enough that plaintiff Silveriana Torela and Miguel Pedrosa declared that
the land in question was jointly cleared by Felimon Torela and his first wife Graciana Gallego, but
the trial court did not give credence to their testimonies for the simple reason that Silveriana was not
yet born at the time when said Felimon, together with his father, started living in the land in 1905
(t.s.n., p. 18); while Miguel Pedrosa was only one year old then, considering that he was 55 years of
age when he testified on February 10, 1959. It is thus plainly obvious that Silveriana and Miguel
could not have known when defendant Felimon and his father moved to the land in 1905.
Considering that Felimon was 81 years old when he testified on February 10, 1959, he was already 27
years in 1905, in which case he must have already helped his father in cleaning and tilling that land.
As a matter of fact at the time of his marriage with his first wife, Graciana Gallego, a portion of said
land had already been cultivated by him. Asked what was the condition of the land in 1915 (the date
of his first marriage), he answered: ‘Only a portion of the lot was plowed by me.’ (t.s.n., p. 18.)

In the light of the foregoing, the property in question is not one of those enumerated in Article 1401
of the Old Civil Code. On the other hand, as it was inherited by Felimon from his parents and
brought to the marriage with his first wife, the same is deemed his separate property (Art. 1396, Old
Civil Code). For these reasons, defendant Felimon Torela had lawfully disposed of his property to
the exclusion of his children by his first marriage. Accordingly, plaintiffs’ complaint was correctly
dismissed by the court below."cralaw virtua1aw library

Petitioners allege that the Court of Appeals failed to take in to account Article 1407 of the Spanish
Civil Code, which now correspond to Article 160 of the New Civil Code, and which reads as
follows:jgc:chanrobles.com.ph

"Art. 1407, All property of the spouses shall be deemed partnership property in the absence of proof
that it belongs exclusively to the husband or to the wife."cralaw virtua1aw library

Petitioners claim that since the lot in question was registered in the name of Felimon Torela, married
to Graciana Gallego, it must be presumed to be the conjugal property of Felimon and Graciana so
that one-half thereof should be adjudicated to them as their inheritance from their mother.

While it is true that all property of the marriage is presumed to be conjugal, as above stated,
nonetheless the party who invokes the presumption must first prove that the property was acquired
during the marriage. This proof is a condition sine qua non for the application of the presumption.
(Cobb-Perez v. Lantin, L-22320, May 22, 1968, 23 SCRA 637; Ponce de Leon v. RFC, L-24571, Dec.
18, 1970; 36 SCRA 289.)

In the instant case there is nothing in the record to show that the lot in question was acquired during

73
the marriage of Felimon Torela and Graciana Gallego. On the contrary, the factual finding of the
Court of Appeals is to the effect that Felimon acquired the land through inheritance and this
conclusion is bolstered by that fact that one of the petitioners herein, Clara Torela, gave her
conformity to her father’s Ex-Parte Motion of March 5, 1958, wherein it was recited, inter alia, that
Felimon Torela had acquired the property by way of inheritance prior to his marriage to his first wife,
Graciana Gallego.chanrobles virtual lawlibrary

The circumstance that Decree No. 440157 of the Court of First Instance of Negros Occidental
which confirmed the ownership of Felimon Torela over the land in question described him as
married to Graciana Gallego was merely descriptive of his civil status at that time and cannot be
taken as proof that the land was acquired during their coverture. The further circumstance that the
land was registered during their marriage cannot in itself constitute proof that it was acquired during
their marriage for land registration under Act No. 496, as amended, does not confer title; it merely
confirms a title already existing and which is registerable.

WHEREFORE, finding no reversible error in the decision of the Court of Appeals, the same is
hereby affirmed without any special pronouncement as to costs.

SO ORDERED.

74