1. G.R. No. 173289 February 17, 2010 ELAND
0-660 issued to
PHILIPPINES, INC., Petitioner, vs. AZUCENA
GARCIA, ELINO FAJARDO, AND HEIR OF
TIBURCIO MALABANAN NAMED TERESA
MALABANAN, Respondents.
FACTS:
 respondents stated that they were not aware of any
person or entity who had a legal or equitable interest or
claim on the same lot until the time they were
requesting that the lot be declared for tax purposes.
 They found out that the lot was the subject of a land
registration proceeding that had already been decided
by the same court where their complaint was filed.
 They also found out that Decree No. N-217313, LRC
Record No. N-62686, was already issued on August
20, 1997 to the petitioner pursuant to the Decision
dated June 7, 1994 of the same court. They averred
that they were not notified of the said land
registration case; thus, they claimed the presence
of misrepresentation amounting to actual or
extrinsic fraud. Thus, they argued that they were also
entitled to a writ of preliminary injunction to restrain or
enjoin petitioner, its privies, agents, representatives,
and all other persons acting on its behalf, to refrain
from committing acts of dispossession on the subject
lot.
 TC: Ruled in favor of petitioner.
o No issue on property.
o prior judgment rule cannot be availed of by
defendant Eland since not only intrinsic fraud
but extrinsic fraud were alleged in and
established by the records
o Original Certificate of Title No.
defendant Eland has not attained
incontrovertibility.
 SC:
o On quieting of title: Article 476 of the New
Civil Code, the remedy may be availed of only
when, by reason of any instrument, record,
claim, encumbrance or proceeding, which
appears valid but is, in fact, invalid, ineffective,
voidable, or unenforceable, a cloud is thereby
cast on the complainant’s title to real property or
any interest therein.
 Article 477 CC identifies the party who
may bring an action plaintiff must first
have a legal, or, at least, an equitable
title on the real property subject of the
action and that the alleged cloud on his
title must be shown to be in fact invalid
 two (2) indispensable requisites must
concur, namely: (1) the plaintiff or
complainant has a legal or an equitable
title to or interest in the real property
subject of the action; and (2) the deed,
claim, encumbrance, or proceeding
claimed to be casting cloud on his title
must be shown to be in fact invalid or
inoperative despite its prima
facie appearance of validity or legal
efficacy.
o On petition for review: The petitioner must have
an estate or interest in the land; He must show
actual fraud in the procurement of the decree of
registration; The petition must be filed within
one year from the issuance of the decree by the
 Land Registration Authority; andThe property
has not yet passed to an innocent purchaser for
value.59
 where petitioners acquired their interest
in the land before any final decree had
been entered, the litigation was
therefore in effect still pending and, in
these circumstances
 the petition may be filed at any time after
the rendition of the court's decision and
before the expiration of one year from
the entry of the final decree of
registration
2. MAMERTO DY, Petitioner, v. MARIA LOURDES
ROSELL ALDEA, Respondent.
 TC: Considered Aldea not an innocent
purchaser in GF.
o she should have been suspicious of the
transaction which occurred at a hotel
room and without any lawyer present.
o Lourdes gave her money to the seller
even if the owner's copy of the
certificate of title was not handed to her;
o she decided to buy the remaining
portion of the subject land when the
price was reduced to P200.00 per
square meter for the flimsy reason that it
would be hard for the seller to subdivide
the subject land
 CA: purchaser in GF. only charged with notice
of the burdens on the property which are noted
on the face of the register or the certificate of
title. The only annotation at the back of the title
was that it was mortgaged to Audie C. Uy.
o she asked for an identification card and
she was given a senior citizen's I.D.,
showing that the person she was
dealing with was "Mamerto Dy." It stated
that while it turned out that the I.D.
exhibited by the seller was fake and that
the person claiming to be the owner of
the land was a fraud, Lourdes could not
be blamed for believing that she was
dealing with the real owner of the land.
 ARGUMENTS OF PETITIONER:
o fact that the title was reconstituted
should have urged Lourdes to conduct
further investigation on the identity of the
vendor;
o even though Fatima, Uy and the
purported overseers assured Lourdes
that the person she was dealing with
was the real owner of the subject land,
she should have taken into
consideration that these persons might
have been lying and that a possible
syndicated sale might have been
planned;
o t the impostor did not accompany her
when she visited the subject land; that
she should have asked for other
documents to establish the identity of
the seller;
o the market value of the subject land
ranges from P800.00 to P1,000.00, thus,
 Lourdes should have wondered why the
purchase price was inexpensive.
 DEFENSES:
o while it may be true that an impostor had
fraudulently acquired a void
reconstituted title over the subject land,
such circumstance did not necessarily
invalidate her own title;
o that a valid transfer could issue from a
void reconstituted title if an innocent
purchaser for value intervenes;
o where innocent third persons rely on the
correctness of the certificate of title
issued and acquire rights over the
property, courts cannot disregard such
right and order the total cancellation of
the certificate of title for that would
impair public confidence in the certificate
of title.
 SC: NOT a purchaser in GF:
o An innocent purchaser for value is one
who buys the property of another,
without notice that some other person
has a right or interest in the property, for
which a full and fair price is paid by the
buyer at the time of the purchase or
before receipt of any notice of claims or
interest of some other person in the
property.
o It is the party who claims to be an
innocent purchaser for value who has
the burden of proving such assertion,
and it is not enough to invoke the
ordinary presumption of good faith.
o the "buyer in good faith" must have
shown prudence and due diligence in
the exercise of his/her rights.
o The prudence required of a buyer in
good faith is not that of a person with
training in law, but rather that of an
average man who 'weighs facts and
circumstances without resorting to the
calibration of our technical rules of
evidence of which his knowledge is nil.
o Actions that show prudence: making an
ocular inspection of the property,
checking the title/ownership with the
proper Register of Deeds alongside the
payment of taxes therefor, or inquiring
into the minutiae such as the
parameters or lot area, the type of
ownership, and the capacity of the seller
to dispose of the property, which
capacity necessarily includes an inquiry
into the civil status of the seller to
ensure that if married, marital consent is
secured when necessary.
o In fine, for a purchaser of a property in
the possession of another to be in good
faith, he must exercise due diligence,
conduct an investigation, and weigh the
surrounding facts and circumstances
like what any prudent man in a similar
situation would do
 AS APPLIED:
o she did not conduct a thorough
investigation and that she merely
instructed her uncle to check with the
 Register of Deeds whether the subject
land is free from any encumbrance.
o Lourdes met the seller only during the
signing of the two deeds of sale. she did
not call into question why the seller
refused to see her during the
negotiation.
o seller was not present when she talked
to Engracia such that there was no way
for the latter to ascertain whether she
and Lourdes were talking about the
same Mamerto Dy
o gross undervaluation of the property in
the deeds of sale at the measly price of
P1,684,500.00 when the true market
value was at least P5,390,400.00 for the
entire property.
o When the impostor, however, insisted
that she should buy the remaining half
just because it would be difficult to
divide the subject land, Lourdes readily
acceded without questioning why the
seller was willing to sell at P200.00 per
square meter.
o imprudent for her to simply rely on the
face of the imposter's TCT considering
that she was aware that the said TCT
was derived from a duplicate owner's
copy reissued by virtue of the alleged
loss of the original duplicate owner's
copy.
3. WALSTROM VS MAPA, G.R. No. L-38387, January
29, 1990
 DANR Case No. 3118; state facts. The property
now being contested by Appellee Walstrom is
already titled in the name of the HEIRS OF
JOSEFA ABAYA MAPA, under original
Certificate of Title No. P-456 of the Registry of
deeds for the Province of Benguet, pursuant to
a Miscellaneous Sales Patent No. 4487
 It was only upon receipt on April 11, 1972 of the
above-stated answer of the heirs of Josefa
Abaya Mapa to the petition for relief of the late
Gabriela Walstrom, that the herein petitioner
Hilda Walstrom, daughter and successor-in-
interest of the late Gabriela, learned for the first
time that the property being contested by
Walstrom was already titled in the name of the
heirs of Josefa Abaya Mapa, under Original
Certificate of Title No. P-456 of the Registry of
Deeds for the Province of Benguet, pursuant to
Miscellaneous Sales Patent No. 4487
 the petitioner further became aware, also for the
first time, that Miscellaneous Sales Patent No.
4487 was issued by the DANR Secretary on
July 19,1971 and released for transmittal to the
office of the Register of Deeds for Benguet
Province on July 22, 1971; that on September
30, 1971, respondent register of deeds issued
Original Certificate of Title No. P-456, pursuant
to Miscellaneous Sales Patent No. 4487; and
that on or about November 13, 1971,
respondent Fernando Mapa, Jr. transferred the
property covered by Original Certificate of Title
 No. P-456 to the other heirs of Josefa Abaya
Mapa, namely, defendants Victorino A. Mapa,
Jose A. Mapa, Maria C.M. de Goco, Fernando
Mapa III, and Mario L. Mapa, in connection with
which transfer, Transfer Certificate of Title No.
T-6644 was issued by the Register of Deeds of
Bengue
 SC : decree of registration may be reopened or
reviewed by the proper Regional Trial Court
upon the concurrence of five essential
requisites, to wit: (a) that the petitioner has a
real and a dominical right; (b) that he has been
deprived thereof;(c) through fraud; (d) that the
petition is filed within one year from the
issuance of the decree; and (e) that the
property has not as yet been transferred to an
innocent purchaser for value.
o notwithstanding the irrevocability of the
Torrens title already issued in the name
of another person, he can still be
compelled under the law to reconvey the
subject property to the rightful owner.
The property registered is deemed to be
held in trust for the real owner by the
person in whose name it is registered.
After all, the Torrens system was not
designed to shield and protect one who
had committed fraud or
misrepresentation and thus holds title in
bad faith
4. STERLING INVESTMENT CORPORATION vs RUIZ
 parcel of land originally owned by one
Teodorico Cabasbas, who obtained homestead
patent on December 27, 1940.
 The deceased was the father of respondent
Alejandro Cabasbas. Petitioners Sterling
Investment Corporation, Pacific Equipment
Corporation, Regional Investment Corporation
and Golden Hills Development Corporation,
defendants in Civil Case No. 10603, started by
alleging that on February 18, 1958, respondent
Alejandro Cabasbas filed a complaint in
Branch VI of the Court of First Instance of
Rizal (Civil Case No. 4870), against the
spouses Jose A. de Kastro and Estanislawa
de Kastro, spouses Lutgardo Reyes and
Elisa A. Reyes, and Demetrio de Jesus, to
recover the land originally owned by the late
Teodorico Cabasbas, as evidenced by Original
Certificate of Title No. 815.
 spouses Lutgardo Reyes and Elisa A.
Reyes, and Demetrio de Jesus were
declared to be the registered owners of the
western portion of the land originally owned
by the late Teodorico Cabasbas as per
Original Certificate of Title No. 615, subject
matter of the above-mentioned litigation
 Petitioners then specifically made mention of
how subsequently they acquired ownership of
the above-mentioned property originally owned
by the deceased Teodorico Cabasbas, by virtue
of the following transfers a) Elisa A. Reyes, sold
a portion of the land to the spouses Demetrio
de Jesus and Florencia Borja and the remaining
portion to the spouses Jose Rojas and Emiliana
Mendoza; (b) subsequently, the spouses Jose
Rojas and Emiliana Mendoza acquired the
 whole lot by purchasing the portion belonging to
the spouses Demetrio de Jesus and Florencia
Borja; (c) the spouses Jose Rojas and Emiliana
Mendoza thereafter sold one-half of the land to
Natividad Araneta and the other half to the
spouses Vincent Recto and Ofelia Martinez; (d)
the spouses Vincent Recto and Ofelia Martinez
sold their one-half interest to petitioner Regional
Investment Corporation, while Natividad
Araneta sold her one-half share to Sterling
Investment Corporation; (e) finally, Sterling
Investment Corporation sold the portion
belonging to it to Pacific Equipment
Corporation, which in turn sold it to Golden Hills
Development Corporation
 respondent Alejandro Cabasbas filed his
second amended complaint, Civil Case No.
10603, praying that the decision in the previous
Civil Case No. 4870, based on a compromise
agreement, be declared null and void with the
allegation that it was obtained through
fraud.
 Sterling Investment Corporation and Pacific
Equipment Corporation alleged as affirmative
and special defenses that the sale to them
made on June 1, 1967 and November 14, 1967
were in good faith and for valuable
consideration they being innocent purchasers
for value thus negating any cause of action
against them.
 SC: only extrinsic or collateral, as distinguished
from intrinsic, fraud is a ground for annulling a
judgment.
oExtrinsic fraud refers to any fraudulent
act of the successful party in a litigation
which is committed outside the trial of a
case against the defeated party, or his
agents, attorneys or witnesses, whereby
said defeated party is prevented from
presenting fully and fairly his side of the
case.
o intrinsic fraud refers to acts of a party in
a litigation during the trial, such as the
use of forged instruments on perjured
testimony, which did not affect the
presentation of the case, but did prevent
a fair and just determination of the case
5. NARVASA vs IMBORNAL
 FACTS: Basilia Imbornal+ (Basilia) had four (4)
children, namely, Alejandra, Balbina, Catalina,
and Pablo
 Francisco I. Narvasa, Sr.9 (Francisco) and
Pedro Ferrer (Pedro) were the children10 of
Alejandra, while petitioner Petra Imbornal
(Petra) was the daughter of Balbina.
 Petitionersare the heirs and successors-in-
interest of Francisco, Pedro, and Petra
(Francisco, et al.). On the other hand,
respondentsEmiliana, Victoriano, Felipe, Mateo,
Raymundo, Maria, and Eduardo, all surnamed
Imbornal, are the descendants of Pablo
 Basilia owned a parcel of land which she
conveyed to her three (3) daughters Balbina,
Alejandra, and Catalina (Imbornal sisters)
sometime in 1920.
 Catalina’s husband, Ciriaco Abrio applied for
and was granted a homestead patent over a
31,367-sq. m. riparian land (Motherland). He
was awarded a patent and an OCT over the
property. Was then converted to TCT to
Ciriaco’s heirs.
 Ciriaco and his heirs had since occupied the
northern portionof the Motherland, while
respondents occupied the southern portion
 Claiming rights over the entire Motherland,
Francisco, et al., as the children of Alejandra
and Balbina, filed on February 27,1984 an
Amended Complaint20 for reconveyance,
partition,and/or damages against respondents,
 They anchored their claim on the allegation
that Ciriaco, with the help of his
wifeCatalina, urged Balbina and Alejandra to
sell the Sabangan property, and that Ciriaco
used the proceeds therefrom to fund his
then-pending homestead patent application
over the Motherland. In return, Ciriaco
agreed that once his homestead patent is
approved, he will be deemed to be holding
the Motherland – which now included both
accretions – in trust for the Imbornal sisters
 Defense: properties sought to be reconveyed
and partitioned are not the properties of their
predecessors-ininterest but, instead, are
covered by Torrens certificates of titles, free
from any encumbrance, and declared for
taxation purposes in their names.
 RTC: an implied trust existed between Ciriaco
and the Imbornal sisters with respect to the
Motherland.27 It gave probative weight to
Francisco, et al.’s allegation that the Sabangan
property, inherited by the Imbornal sisters from
their mother, Basilia, was sold in order to help
Ciriaco raise funds for his then-pending
homesteadpatent application. In exchange
therefor, Ciriaco agreed that he shall hold the
Motherland in trust for them once his
homestead patent application had been
approved.
 CA: Ciriaco alone was awarded a homestead
patent, which later became the basis for the
issuance of a Torrens certificate of title in his
name; as such, saidcertificate of title cannot be
attacked collaterally through an action for
reconveyance filed by his wife’s (Catalina’s)
relatives. Consequently, since the entire
Motherland was titled in Ciriaco’s name, his
descendants should be regarded as the
absolute owners thereof.
 SC: An implied trust arises, not from any
presumed intention of the parties, but by
operation of law in order to satisfy the demands
of justice and equity and to protect against
unfair dealing or downright fraud (CC 1456).
 The burden of proving the existence ofa trust is
on the party asserting its existence, and such
proof must be clear and satisfactorily show the
existence of the trust and its elements. While
implied trusts may be proven by oral
evidence, the evidence must be trustworthy
and received by the courts with extreme
caution, and should not be made to rest on
 loose, equivocal or indefinite declarations. purported agreement transpired decades ago,
Trustworthy evidence is required because oral or in the 1920s.
evidence can easily be fabricated 6.
 AS APPLIED: it cannot be said, merely on the
basis of the oral evidence offered by Francisco,
et al., that the Motherland had been either
mistakenly or fraudulently registered in favor of
Ciriaco.
 It must be presumed, therefore, that Ciriaco
underwent the rigid process and duly satisfied
the strict conditions necessary for the grant of
his homestead patent application. As such, it is
highly implausible thatthe Motherland had been
acquired and registered by mistake or through
fraudas would create an implied trust between
the Imbornal sisters and Ciriaco, especially
considering the dearth of evidence showing that
the Imbornal sisters entered into the possession
of the Motherland, or a portion thereof,
orasserted any right over the same at any point
during their lifetime.
 Weighed against the presumed regularity of the
award of the homestead patent to Ciriaco and
the lack of evidence showing that the same was
acquired and registered by mistake or through
fraud, the oral evidence of Francisco, et
al.would not effectively establish their claims of
ownership.
 It has been held that oral testimony as to a
certain fact, depending as it does exclusively on
human memory, is not as reliable as written or
documentary evidence,50 especially since the