Action for damages

Action for
damages
Damages are an award,
typically of money, to be
paid to a person as
compensation for loss or
injury.
 FILING
It is filed AFTER the one-year contestability period, reckoned from
the issuance of the decree by the LRA Administrator, not the
court’s decision
 FILING
Who files the action for damages?

With respect to lands, titles and deeds - it is the aggrieved party,

against the seller who sold it to an innocent purchaser for value
 DAMAGES
“Remedy of the landowner whose property has been wrongfully or
erroneously registered in another's name—after one year from
the date of the decree—is not to set aside the decree, but
respecting the decree as incontrovertible and no longer open to
review, to bring an ordinary action in the ordinary court of justice
for damages if the property has passed unto the hands of an
innocent purchaser for value”

(Sy, Sr. v. Intermediate Appellate Court, G.R. No. 66742; Teoville

Development Corporation v. IAC, et al., G.R. No. 75011, June 16,
1988).
 CONDITIONS
It may be resorted to when a petition for review and an
action for reconveyance is no longer possible due to the
fact that the property has passed to an innocent
purchaser for value and in good faith
 PRESCRIPTION
Prescribes in 10 years after issuance of Torrens Title,
pursuant to Article 1144 of the Civil Code.
 DAMAGES
Upon the expiration of the period of 1 year, the decree of
registration and the certificate of title issued shall
become incontrovertible (or indefeasible). Any person
aggrieved by such decree of registration in any case
may pursue his remedy by action for damages against
the applicant or any other persons responsible for the
fraud. [Par 2, Sec. 32, PD 1529]
 DAMAGES
Where a person committed fraud in obtaining title to a
disputed property, he should be liable for both moral and
exemplary damages.
 MORAL DAMAGES
“The person claiming for moral damages must prove the
existence of bad faith, by clear and convincing evidence,
for the law always presumes good faith. It is not enough
that one merely suffered sleepless nights, mental
anguish, serious anxiety, as the result of the actuations
of the other party. Invariably, such action must be
shown to have been willfully done, in bad faith, or with
ill motive. “
 exemplary DAMAGES
“To warrant the award of exemplary damages,
the wrongful act must be accompanied by bad
faith and an award of damages would be allowed
only if the guilty party acted in wanton,
fraudulent, reckless, or malevolent manner.”
 REFERENCES
• Land Titles, Deeds, Liens and Dealings by Alvin
Claridades
• Presidential Decree No. 1529
• Sy, Sr. v. Intermediate Appellate Court, G.R. No. 66742;
Teoville Development Corporation v. IAC, et al., G.R.
No. 75011, June 16, 1988
• Ching vs CA, GR No. L-59731, January 11, 1990
REVIEW of a
DECREE
Section 32 of PD 1529
Section 32 of P.D. 1529. Review of decree of registration; Innocent purchaser for
value.

The decree of registration shall not be reopened or revised by reason of absence,

minority, or other disability of any person adversely affected thereby, nor by any
proceeding in any court for reversing judgments, subject, however, to the right of any
person, including the government and the branches thereof, deprived of land or of any
estate or interest therein by such adjudication or confirmation of title obtained by actual
fraud, to file in the proper Court of First Instance a petition for reopening and review of
the decree of registration not later than one year from and after the date of the entry of
such decree of registration, but in no case shall such petition be entertained by the court
where an innocent purchaser for value has acquired the land or an interest therein,
whose rights may be prejudiced. Whenever the phrase "innocent purchaser for value" or
an equivalent phrase occurs in this Decree, it shall be deemed to include an innocent
lessee, mortgagee, or other encumbrancer for value.
 Origin
Section 38 of Act 496
If the court after hearing finds that the applicant has title as
stated in his application, and proper for registration, a decree
of confirmation and registration shall be entered. Every decree
of registration shall bind the land, and quiet title thereto,
subject only to the exceptions stated in the following section.
It shall be conclusive upon and against all persons, including
the Insular Government and all the branches thereof, whether
mentioned by name in the application, notice, or citation, or
included in the general description "To all whom it may
concern." Such decree shall not be opened by reason of the
absence, infancy, or other disability of any person affected
thereby, nor by any proceeding in any court for reversing
judgments or decrees; subject, however, to the right of any
person deprived of land or of any estate or interest therein by
decree of registration obtained by fraud to file in the Court of
Land Registration a petition for review within one year
after the entry of the decree, provided no innocent
purchaser for value has acquired an interest. If there is
any such purchaser, the decree of registration shall not be
opened, but shall remain in full force and effect forever,
subject only to the right of appeal hereinbefore provided. But
any person aggrieved by such decree in any case may pursue
his remedy by action for damages against the applicant or any
other person for fraud in procuring the decree. Whenever the
phrase "innocent purchaser for value" or an equivalent phrase
occurs in this Act, it shall be deemed to include an innocent
lessee, mortgagee, or other encumbrancer for value.
Section 32 of P.D. 1529
The decree of registration shall not be reopened or revised by
reason of absence, minority, or other disability of any person
adversely affected thereby, nor by any proceeding in any court
for reversing judgments, subject, however, to the right of any
person, including the government and the branches thereof,
deprived of land or of any estate or interest therein by such
adjudication or confirmation of title obtained by actual fraud, to
file in the proper Court of First Instance a petition for
reopening and review of the decree of registration not
later than one year from and after the date of the entry of
such decree of registration, but in no case shall such petition
be entertained by the court where an innocent purchaser for
value has acquired the land or an interest therein, whose rights
may be prejudiced. Whenever the phrase "innocent purchaser
for value" or an equivalent phrase occurs in this Decree, it shall
be deemed to include an innocent lessee, mortgagee, or other
encumbrancer for value.
 requisites
Petitioner must have an estate or
interest in the land

He must show actual fraud in the

procurement of the decree of
registration

Petition must be filed within 1

year from the issuance of the
decree by the LRA

The property has not yet passed

to an innocent purchaser for value
 Period
The third ground for the present petition is perhaps, the most important
point in the case. It is conceded that no decree of registration has been
entered and section 38 of the Land Registration Act provides that a
petition for review of such a decree on the grounds of fraud must be
filed "within one year after entry of the decree." Giving this provision a
literal interpretation it may at first blush seen that the petition for review
cannot be presented until the final decree has been entered. But on
further reflection it is obvious that such could not have been the
intention of the Legislature and that what it meant would have been
better expressed by stating that such petitions must be presented before
the expiration of one year from the entry of the decree. Statutes must
be given a reasonable construction and there can be no possible reason
for requiring the complaining party to wait until the final decree is
entered before arguing his claim for fraud. We therefore hold that a
petition for review under Section 38, supra, 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. (Rivera v.
Moran, G.R. L-24568, March 2, 1926)
fraud
 fraud
Where fraud was committed before the issuance of the decree of registration but which
was not pleaded in the same proceeding between the parties, inquiry into the same is
barred after the judgment on the merits has become final. This rule applies not only to
the parties directly involved but also to those in privity with them.
 Other grounds
By reason of a fatal infirmity in the decision, for
want of due process.

For lack of jurisdiction of the court

 INNOCENT PURCHASERS FOR
VALUE
An innocent purchaser for value is one who buys the
property of another without notice that some other
person has right to, or interest in, such property and
pays a full and fair price for the same, at the time of
such purchase and before he has notice of the claim
or interest of some other persons in the property
(Fule v. De Legare, G.R. No. L-17951, Feb. 28, 1963)
 Not an exclusive remedy
The remedy of petitioning for the revision of the decree within one year is not exclusive
during that period.

In cases where the registration of a land may not have been secured by actual fraud but
through other grounds, the remedy is not to file a petition for review of decree but to file
a petition to compel the registered owner to convey the property to him or to ask for
damages even if the period of one year from the issuance of the decree has not yet
expired.
 References
• Property Registration Decree and Related Laws: Land
Titles and Deeds by Oswaldo Agcaoili
• PRESIDENTIAL DECREE NO. 1529
• Registration of Land Titles and Deeds by Narciso Peña,
et al (2008)
• Fule v. De Legare, G.R. No. L-17951, Feb. 28, 1963
compensation
compensation
Something typically money,
awarded to someone as a
recompense for loss, injury or
suffering
 How to recover from the assurance fund

(a) that a person sustains loss or damage, or is deprived of any

estate or interest in land
(b) on account of the bringing of land under the operation of the
Torrens system arising after original registration
(c) through fraud, error, omission, mistake or misdescription in
any certificate of title or in any entry or memorandum in the
registration book
(d) without negligence on his part, and
(e) is barred or precluded from bringing an action for the recovery
of such land or estate or interest therein.
DBP v. Bautista (1968)
 Deprivation of land
or interest therein
To afford relief from the Assurance
Fund, the plaintiff must have
sustained loss or damage or deprived
of any estate or interest in the land.
 GOOD FAITH
It is a condition sine qua non that the person who brings an action
for damages against the Assurance Fund be the registered owner,
and, as to holders of transfer certificates of title, that they be
innocent purchasers in good faith and for value.

La Urbana v. Bernardo
PAYMENT OF JUST COMPENSATION
Republic of the Philippines v. Castellvi, there is compensable taking when the
following conditions concur:
(1) the expropriator must enter a private property;
(2) the entry must be for more than a momentary period;
(3) the entry must be under war- rant or color of legal authority;
(4) the property must be devoted to public use or otherwise informally
appropriated or injuriously affected; and
(5) the utilization of the property for public use must be in such a way as to
oust the owner and deprive him of beneficial enjoyment of the property.
 Section 97 of P.D. 1529. Judgment, how satisfied.

If there are defendants other than the National Treasurer and the Register of
Deeds and judgment is entered for the plaintiff and against the National
Treasury, the Register of Deeds and any of the other defendants, execution shall
first issue against such defendants other than the National Treasurer and the
Register of Deeds. If the execution is returned unsatisfied in whole or in part,
and the officer returning the same certificates that the amount due cannot be
collected from the land or personal property of such other defendants, only then
shall the court, upon proper showing, order the amount of the execution and
costs, or so much thereof as remains unpaid, to be paid by the National
Treasurer out of the Assurance Fund.

In an action under this Decree, the plaintiff cannot recover as compensation

more than the fair market value of the land at the time he suffered the loss,
damage, or deprivation thereof.
 Section 102 of P.D. 1529. Limitation of Action.

Any action for compensation against the Assurance Fund by reason of any loss,
damage or deprivation of land or any interest therein shall be instituted within a
period of six years from the time the right to bring such action first occurred:
Provided, That the right of action herein provided shall survive to the legal
representative of the person sustaining loss or damage, unless barred in his
lifetime;
And provided, further, That if at the time such right of action first accrued the
person entitled to bring such action was a minor or insane or imprisoned, or
otherwise under legal disability, such person or anyone claiming from, by or
under him may bring the proper action at any time within two years
after such disability has been removed, not- withstanding the expiration of
the original period of six years first above provided.
 references
• Property Registration Decree and Related Laws: Land Titles and Deeds by
Oswaldo Agcaoili
• PRESIDENTIAL DECREE NO. 1529
• Development Bank of the Philippines v. Bautista, GR No. L-21362, Nov. 29,
1968, 26 SCRA 366
• Republic of the Philippines v. Castellvi,48, G.R. No. L-20620 August 15, 1974
• La Urbana v. Bernardo, La Urbana v. Bernardo
• National Treasurer of the Philippines v. Perez G.R. No. L-61023 August 22,
1988
reconveyance
Article 434
 RECONVEYANCE
“Reconveyance is a remedy of the landowner whose property has been wrongfully
or erroneously registered in the name of another but which recourse cannot be
availed of if the property has passed to an innocent purchaser for value (IPV)”
(Kapunan, J.: Separate, Concurring and Dissenting Opinion in Legarda v. CA, GR
04457, cited in Land Titles and Deeds – liens and dealings, Claridades)

The term “reconvey” means to convey back or to former place; to transfer back to
former owner, as an estate, and reconveyance being a transfer of realty back to the
original or former grantor. (Lacorte v. CA, GR 124574)
 purpose
• Linzag v. CA, GR 122181
• An action for reconveyance not only attacks the judgment of the court but
also seeks the confirmation by the court of the plaintiff’s title to the land
• Pasio v. Monterroyo, GR 159494
• Transfer of title of the property wrongfully or erroneously registered in
another’s name to its rightful owner or to one with a better right
• The person in whose name the land is registered holds it as a mere trustee
 Article 434
“In an action to recover, the property must be identified,
and the plaintiff must rely on the strength of his title and
not on the weakness of the defendants’ claim.”
 elements

To maintain an action to
recover, one must prove, under
Hutchison v. Buscas:
Identity of the land claimed
His title thereto
 When to avail
• So long as property has not yet passed to an innocent purchaser
for value (IPV)
• Also enunciated in Sps. Valenzuela v. Sps. Mano
• After the lapse of one year, a decree of registration is no longer open to
review or attack although its issuance is attended with actual fraud
• Reconveyance is then the next remedy to avail of in this case
 requisites
Citing New Regent Sources, Inc. v. Tanjuatco, Jr. (Land Titles and
Deeds – Liens and Dealings; Claridades)
• Action must be brought in the name of a person claiming ownership or
dominical right over the land registered in the name of the defendant
• Registration in the name of defendant procured through fraud or other
illegla means
• Property has not yet passed to an IPV
• Action is filed after the certificate of title became final and
incontrovertible but within 4 years from discovery of fraud, not
later than 10 years in case of an implied trust
 prescription
Action based on fraud – 4 years
Action based on implied trust – 10 years
Action based on void contract – imprescriptible
Action to quiet title where plaintiff is in possession -
imprescriptible
 doctrines
Possession must be in the concept of owner to be able to avail of
reconveyance (Tan v. CA, GR 125861)

Property should not have passed to the hands of an innocent

purchaser for value (Lucena v. CA, GR L-77468)

Fraud obtains when a person obtains certificate of title to land

belonging to another with full knowledge of the rights of the true
owner (National Grains Authority v. IAC, GR 68741)
 LACHES, re:reconveyance
Reconveyance may be barred by laches, or when one
neglects to assert his right over an unreasonably long
period (Declaro v. CA, GR 119747; Sps. Po Lam v. CA,
GR 116220)
 SOURCES
Land Titles and Deeds, Liens and Dealings, Claridades.

E-SCRA Library. http://www.central.com.ph/escra/