LAO v LAO (Holder in Bad Faith)

Facts: Domingo Lao and Estrella Lao, during their marriage, acquired a real property worth 1.5M including
improvements. The property was mortgaged with Metrobank at the time they separated. After full payment of
the mortgage, Estrella was able to obtain her own copy of the property title. The property was leased by
Domingo to Filmart and learned that the title to the property was already cancelled and a new one was
issued in the name of Villena spouses when the Villena came to visit the property and informed the tenants
that they are the new property owners. Estrella was at that time in dire need of money and the Malanas
spouses approached her and introduced themselves as agents of Carlos Villena who is willing to grant her a
loan. Carlos Villenas required Estrella to obtain a Special Power of Attorney from Domingo and his son
Ernesto who are also named in the title as owners of the property. Estrella admitted it would be difficult to
obtain the SPA because she and her husband are not on good and speaking terms. The Malana spouses
however assured her that they could help her obtain the SPA. 3 days after they returned to Villena with the
SPA and was able to secure the loan. Upon failure of Estrella to pay, Carlos Villena effected an extrajudicial
foreclosure of the property and a new certificate of title was issued in favor of the Villena spouses. Domingo
filed a complaint for the annulment of the SPA, mortgage and extrajudicial foreclosure, cancellation of the
TCT and reconveyance of title.
The lower court ruled in favor of Domingo and ordered spouses Villena and Malanas together with Estrella to
jointly and severally pay for damages and litigation costs to Domingo while Villena can recover the
indebtedness of Estrella through an ordinary suit. In its modified judgment the court further ordered the
Villenas to vacate the premises and a new Cert. of title to be issued to Domingo and Estrella Lao with 20%
share to Ernesto Lao.
On appeal, the CA reversed the decision declaring the mortgage and foreclosure sale valid and ordered the
transfer of the title to the Villena spouses. It held that the respondents are mortgagees in good faith and not
privy to the forgery of the SPA and the petitioner was negligent to entrust the title to Estrella.
Issue: Whether or not the Villena spouses are mortgagees in good faith?
Ruling: The court ruled that it was established that the Malana spouses are the agent brokers of Villena and
not of Estrella. The court believes that the Malanas and Villena are business partners in credit financing.
They were the ones who approached Estrella and offered the loan to be financed by Villena. Estrella
informed Carlos Villena about the difficulty of securing the signature of Domingo yet they pursue the offer of
loan with the Malanas helping to secure the SPA. Estrella was just asked to sign a black SPA with her
signature affixed on the portion stating with my marital consent. She did not read and understand the
document. They took advantage of her dire need for money at that time. The participation of the Malanas
extends beyond as mere witness to the mortgage while Villena was aware of the situation. Estrella as a coowner is entitled to obtain her own copy of the title of the property thus she cant be denied to secure her
own title. The court has reason to believe that Villena feign his innocence on the flawed character of
the SPA contending that as a legitimate businessman he should exercise due diligence to consider
the fact dealing with a conjugal property of an estranged wife. The NBI also confirmed that the
signatures of Domingo and Ernesto are forged. Therefore the mortgage contract is deemed to be invalid and
likewise the foreclosure is also invalid. A holder in bad faith of a certificate of title is not entitled to the
protection of the law, for the law can not be used as a shield for fraud. The court revived and affirmed
the lower court decision.
MCIAA, vs. CA and CHIONGBIAN
FACTS: On April 16, 1952, the Republic, represented by the CAA, filed an expropriation proceeding to the
CFI of Cebu on several parcels of land in Lahug, Cebu City, which included Lot 941, for the expansion and
improvement of Lahug Airport.

In 1953, appellee Chiongbian purchased Lot 941 from its original owner, the original defendant in the
expropriation case. Subsequently, a TCT was issued in her name
Then in 1961, judgment was rendered in the expropriation case in favor of the Republic which was made to
pay Chiongbian an amount for Lot 941. Chiongbian did not appeal therefrom.Thereafter, absolute title to Lot
941 was transferred to the Republic under a TCT.
Then, in 1990, Republic Act No. 6958 was passed by Congress creating the Mactan-Cebu International
Airport Authority (MCIAA) to which the assets of the Lahug Airport was transferred. Lot 941 was then
transferred in the name of MCIAA under a TCT.
In 1995, Chiongbian filed a complaint for reconveyance of Lot 941 with the RTC of Cebu, alleging, that
sometime in 1949, the National Airport Corporation (NAC) ventured to expand the Cebu Lahug Airport. As a
consequence, it sought to acquire by expropriation or negotiated sale several parcels of lands adjoining the
Lahug Airport, one of which was Lot 941 owned by Chiongbian. Since she and other landowners could not
agree with the NACs offer for the compensation of their lands, a suit for eminent domain was instituted,
before the then CFI of Cebu against 45 landowners, including Chiongbian, entitled Republic of the
Philippine vs. Damian Ouano, et al. It was finally decided in favor of the Republic of the Philippines.
Some of the defendants-landowners appealed the decision to the CA which rendered a modified
judgment allowing them to repurchase their expropriated properties. Chiongbian, on the other hand, did
not appeal and instead, accepted the compensation for Lot 941 upon the assurance of the NAC that she or
her heirs would be given the right of reconveyance for the same price once the land would no longer be used
as (sic) airport.[by an alleged written agreement]
Consequently, the TCT of Chiongbian was cancelled and a TCT was issued in the name of the Republic.
Then, with the creation of the MCIAA, it was cancelled and a TCT was issued in its name.
However, no expansion of the Lahug Airport was undertaken by MCIAA and its predecessors-in-interest.
Thus, the purpose for which Lot 941 was taken ceased to exist.
The RTC rendered judgment in favor of the respondent Chiongbian and MCIAA was ordered to restore to
plaintiff the possession and ownership of the property denominated as Lot No. 941 upon reimbursement of
the expropriation price paid to plaintiff. The RD is therefore ordered to effect the Transfer of the Certificate
Title from the defendant to the plaintiff.
MCIAA appealed the decision to the CA which affirmed the RTC decision. MR was deniedhence this
petition.
ISSUE: Petioner questions whether or not:
1. THE CA ERRED IN UPHOLDING THE TRIAL COURTS JUDGMENT THAT THERE WAS A
REPURCHASE AGREEMENT AND IGNORING PETITIONERS PROTESTATIONS THAT ADMISSION OF
RESPONDENTS ORAL EVIDENCE IS NOT ALLOWED UNDER THE STATUE OF FRAUDS.
2. THE CA ERRED IN HOLDING THAT THE MODIFIED JUDGMENT SHOULD INURE TO THE BENEFIT
OF CHIONGBIAN EVEN IF SHE WAS NOT A PARTY IN SAID APPEALED CASE, and in RULING THAT
THE RIGHT OF CHIONGBIAN TO REPURCHASE SHOULD BE UNDER THE SAME TERMS AND
CONDITIONS AS THE OTHER LANDOWNERS
3. [substantive aspects] whether the abandonment of the public use for which Lot No. 941 was expropriated
entitles CHIONGBIAN to reacquire it.
On the other hand, aside from praying that this Court affirm the decision of the CA, the private respondent
CHIONGBIAN prays that:
a. The petition be denied for the reason that it violates the 1997 Rules on Civil Procedure, more specifically
the requirement of a certification of non-forum shopping. (CHIONGBIAN claims that the Verification and
Certification on Non-Forum Shopping executed by the MCIAA was signed by a Colonel Marcelino A.
Cordova whose appointment as Assistant General Manager of MCIAA was disapproved by the Civil Service

Commission. It is CHIONGBIANs position that since his appointment was disapproved, the Verification
attached to the petition for review on certiorari cannot be considered as having been executed by the
plaintiff or principal party who under Section 5, Rule 7 of the Rules of Court can validly make the
certification in the instant petition. ) Consequently, the petition should be considered as not being verified and
as such should not be considered as having been filed at all.
HELD: The Decision of the CA is hereby REVERSED and SET ASIDE. The complaint of Chiongbian
against the Mactan-Cebu International Airport Authority for reconveyance of Lot No. 941 is DISMISSED.
1. CHIONGBIAN cannot rely on the ruling in Mactan Cebu International Airport vs. CAwherein the
presentation of parol evidence was allowed to prove the existence of a written agreement containing the right
to repurchase. Said case did not involve expropriation proceedings but a contract of sale.
More importantly, no objection was made by petitioner when private respondents introduced evidence to
show the right of repurchase granted by the NAC to Inez Ouano. It has been repeatedly laid down as a rule
of evidence that a protest or objection against the admission of any evidence must be made at the proper
time, and if not so made, it will be understood to have been waived.
This pronouncement is not applicable to the present case since the parol evidence rule which provides that
when the terms of a written agreement have been reduced to writing, it is considered as containing all the
terms agreed upon, and there can be, between the parties and their successors-in-interest, no evidence of
such terms other than the contents of the written agreement applies to written agreements and has no
application to a judgment of a court. To permit CHIONGBIAN to prove the existence of a compromise
settlement which she claims to have entered into with the Republic of the Philippines prior to the rendition of
judgment in the expropriation case would result in a modification of the judgment of a court which has long
become final and executory.
And even assuming for the sake of argument that CHIONGBIAN could prove the existence of the alleged
written agreement acknowledging her right to repurchase Lot No. 941 through parol evidence, the Court of
Appeals erred in holding that the evidence presented by CHIONGBIAN was admissible.
Under 1403 of the Civil Code, a contract for the sale of real property shall be unenforceable unless the
same, or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his
agent; evidence, therefore of the agreement cannot be received without the writing or a secondary
evidence of its contents.
Contrary to the finding of the CA, the records reveal that MCIAA objected to the purpose for which the
testimonies of CHIONGBIAN and Bercede (BERCEDE) were offered, i.e. to prove the existence of the
alleged written agreement evincing a right to repurchase Lot No. 941 in favor of CHIONGBIAN, for being in
violation of the Statute of Frauds. MCIAA also objected to the purpose for which the testimony of Attorney
(PASTRANA) was offered, i.e. to prove the existence of the alleged written agreement and an alleged deed
of sale, on the same ground.Consequently, the testimonies of these witnesses are inadmissible under the
Statute of Frauds to prove the existence of the alleged sale.
Moreover, CHIONGBIANs testimony shows that she had no personal knowledge of the alleged assurance
made by the Republic of the Philippines that Lot No. 941 would be returned to her in the event that the Lahug
Airport was closed. She stated that she only learned of the alleged assurance of the Republic of the
Philippines through her lawyer, Attorney Calderon, who was not presented as a witness.
2. CHIONGBIAN cannot invoke the modified judgment of the Court of Appeals in the case of Republic of the
Philippines vs. Escao, et. al. where her co-defendants entered into separate and distinct compromise
agreements with the Republic of the Philippines wherein they agreed to sell their land subject of the
expropriation proceedings to the latter subject to the resolutory condition that in the event the Republic of
the Philippines no longer uses said property as an airport, title and ownership of said property shall revert to
its respective owners upon reimbursement of the price paid therefor without interest. MCIAA correctly points

out that since CHIONGBIAN did not appeal the judgment of expropriation and was not a party to the appeal
of her co-defendants, the judgment therein cannot redound to her benefit.
And even assuming that CHIONGBIAN was a party to the appeal, she was not a party to the compromise
agreements entered into by her co-defendants. A compromise is a contract whereby the parties, by making
reciprocal concessions, avoid litigation or put an end to one already commenced. Essentially, it is a contract
perfected by mere consent, the latter being manifested by the meeting of the offer and the acceptance upon
the thing and the cause which are to constitute the contract. A judicial compromise has the force of law and
isconclusive between the parties and it is not valid and binding on a party who did not sign the
same. Since CHIONGBIAN was not a party to the compromise agreements, she cannot legally invoke the
same.
3. The answer to that question depends upon the character of the title acquired by the expropriator which
has the right to acquire property under the power of eminent domain. If, for example, land is expropriated for
a particular purpose, with the condition that when that purpose is ended or abandoned the property shall
return to its former owner, then, of course, when the purpose is terminated or abandoned the former owner
reacquires the property so expropriated
If, upon the contrary, however, the decree of expropriation gives to the entity a fee simple title, then,
of course, the land becomes the absolute property of the expropriator, whether it be the State, a
province, or municipality, and in that case the non-user does not have the effect of defeating the title
acquired by the expropriation proceedings.
When land has been acquired for public use in fee simple, unconditionally, either by the exercise of eminent
domain or by purchase, the former owner retains no rights in the land, and the public use may be
abandoned, or the land may be devoted to a different use, without any impairment of the estate or title
acquired, or any reversion to the former owner.
In the present case, evidence reveals that Lot No. 941 was appropriated by the Republic of the Philippines
through expropriation proceedings. The terms of the judgment are clear and unequivocal and grant title to
Lot No. 941 in fee simple to the Republic. There was no condition imposed to the effect that the lot would
return to CHIONGBIAN or that CHIONGBIAN had a right to repurchase the same if the purpose for which it
was expropriated is ended or abandoned or if the property was to be used other than as the Lahug airport.
a. We are not persuaded by CHIONGBIANs claim that the Verification and Certification against forum
shopping accompanying MCIAAs petition was insufficient for allegedly having been signed by one who was
not qualified to do so. As pointed out by the MCIAA, Colonel Cordova signed the Verification and
Certification against forum shopping as Acting General Manager of the MCIAA issued by the General
Manager of MCIAA. Colonel Cordovadid not sign the Verification and Certification against forum
shopping pursuant to his appointment as assistant General Manager of the MCIAA, which was later
disapproved by the Commission on Appointments.
NOTES:
1. Under the parol evidence rule, when the terms of an agreement have been reduced into writing, it is
considered as containing all the terms agreed upon, and there can be, between the parties and their
successors-in-interest, no evidence of such terms other than the contents of the written agreement.
However, a party may present evidence to modify, explain or add to the terms of the written agreement if he
puts in issue in his pleading, the failure of the written agreement to express the true intent of the parties
thereto. In the case at bench, the fact which private respondents seek to establish by parol evidence
consists of the agreement or representation made by the NAC that induced Inez Ouano to execute the deed
of sale; that the vendors and their heirs are given the right of repurchase should the government no longer
need the property. Where a parol contemporaneous agreement was the moving cause of the written
contract, or where the parol agreement forms part of the consideration of the written contract, and it appears
that the written contract was executed on the faith of the parol contract or representation, such evidence is

admissible. It is recognized that proof is admissible of any collateral parol agreement that is not inconsistent
with the terms of the written contract though it may relate to the same subject matter. The rule excluding
parol evidence to vary or contradict a writing does not extend so far as to preclude the admission of existing
evidence to show prior or contemporaneous collateral parol agreements between the parties, but such
evidence may be received, regardless of whether or not the written agreement contains any reference to
such collateral agreement, and whether the action is at law or in equity.
SPOUSES MACADANGDANG vs. SPOUSES MARTINEZ,
Facts

in their favor. In the event Omalin, as mortgagor, fails to pay the mortgage obligation or, should any party, for
that matter, who may have an interest in the mortgaged property like the petitioners herein fail to redeem it
from the mortgagees, the latter, as declared by the Court of Appeals, may enforce their rights against the
property by foreclosing on the mortgage, regardless of who its owner may be, considering that the registered
mortgage attaches to the property.
Ratio
Between two transactions concerning the same parcel of land, the registered transaction prevails over
the earlier unregistered right. The act of registration operates to convey and affect the registered land so

The Macadangdang spouses, as petitioners, assail the October 25, 2001 decision of the Court of Appeals in

that a bonafide purchaser of such land acquires good title as against a prior transferee, if such prior

modifying the November 13, 1990 decision of the Regional Trial Court.

transfer was unrecorded.

The Macadangdang spouses bought a house and lot covered by TCT No. 146553 in the name of Emma A.

Registration of the deed is the effectual act which binds the land insofar as third persons are concerned.

Omalin for the purchase price of P380,000, to be paid on installment basis. Downpayment of P5,000 and

Prior registration of a lien creates a preference as the act of registration is the operative act that conveys and

subsequent payment of P175,000 was paid; afterwhich, Omalin executed a deed of sale with mortgage,

affects the land.

providing for the payment of the balance (P200,000) in three installments.

Considering that the prior sale of the subject property to the Macadangdang spouses was not
After the Macadangdang spouses paid a total of P270,000, both parties agreed that the remaining P110,000

registered, it was the registered mortgage to the spouses Martinez that was valid and effective. For

shall be paid upon Omalins delivery of the TCT. However, Omalin failed to deliver the same because a

sure, it was binding on Omalin and, for that matter, even on the Macadangdang spouses, the parties to the

certain Atty. Paterno Santos, acting as broker, offered to mortgage the subject property to respondent

prior sale.

Martinez spouses for P200,000, presenting a clean title. Said offer was accepted by the Martinez spouses
with interest at 36% p.a. and was duly recorded at the Registry of Deeds of Makati. The proper annotation
was made at the back of the title. Omalin defaulted in her payments to Martinez spouses in the amount of
P114,000, incurred over the span of 1.5 years.
The Macadangdang spouses filed a criminal case for estafa against Omalin and a combined action for
specific performance, annulment of contract and damages against the spouses Martinez and Omalin. The
Makati RTC ruled in favor of the Macadangdang spouses, and ordered the delivery of TCT No. 146553 to
Macadangdang spouses, free from encumbrance under Entry No. 30110 of the Register of Deeds of Makati
(mortgage to respondent), upon plaintiffs payment of the balance of P100,000. This was later modified by
the Court of Appeals, upholding the validity of the sale to Macadangdang spouses, subject to the Martinezs
spouses right to foreclose the property for failure of Omalin to pay her indebtedness.

The Martinez spouses were also considered as innocent mortgagees for value , and are therefore not
required to look beyond what appears on the face of the certificate of title of the vendor, since the certificate
of title is in the name of the mortgagor when the land was mortgaged.
Where innocent third persons rely on the lack of defect of a certificate of title and acquire rights over the
property, the Court cannot disregard such rights. Otherwise, public confidence in the certificate of title and
ultimately, in the entire Torrens system will be impaired, for every one dealing with registered property will
have to inquire at every instance whether the title has been regularly or irregularly issued.
On this note, being innocent registered mortgagees for value, the Martinez spouses acquired a
superior right over the property.
Principles Applied by the Supreme Court

Issue: Whether or not the Macadangdang spouses are entitled to the land despite the fact that a prior
registered mortgage was attached to it.
Ruling
No. The assailed decision of the appellate court is neither absurd nor unjust. The registered mortgage
contract of the Martinez spouses has given them the superior right, not as owners but only as mortgagees.
Consequently, they are entitled to be paid the amounts due them under the real estate mortgage registered

Act of Registration is the Operative Act to Convey or Affect Registered Land

Sec. 51. Conveyance and other dealings by registered owner. An owner
of registered land may convey, mortgage, lease, charge or otherwise
deal with the same in accordance with existing laws. He may use such
forms of deeds, mortgages, lease or other voluntary instruments as are
sufficient in law. But no deed, mortgage, lease or other voluntary
instrument, except a will purporting to convey or affect registered land

shall take effect as a conveyance or bind the land, but shall operate only
as a contract between the parties and as evidence of authority to the
Register of Deeds to make Registration.
The act of registration shall be the operative act to convey or affect the
land insofar as third persons are concerned, and in all cases under this
Decree, the registration shall be made in the office of the Register of
Deeds for the province or city where the land lies.
Sec. 52. Constructive notice upon registration. Every conveyance,
mortgage, lease, lien attachment, order, judgment, instrument or entry
affecting registered land shall, if registered, filed or entered in the office
of the Register of Deeds for the province or city where the land to which
it relates lies, be constructive notice to all persons from the time of such
registering, filing or entering.
Rule on Good Faith Applicable to Lessees and Mortgagees
A certificate of title is conclusive and binding upon the whole world.
Consequently, a buyer need not look behind the certificate of title in
order to determine who the actual owner of the land is. The same rule
applies to lessees and mortgagees. Thus, where the certificate of title is
in the name of the mortgagor when the land is mortgaged, the innocent
mortgagee for value has the right to rely on what appears on the
certificate of title
Naawan Community Rural Bank, Inc v. Court of Appeals
G.R. No. 128573
January 13, 2003
FACTS:
Guillermo Comayas offered to sell to private respondent-spouses Alfredo and Annabelle Lumo, a house and
lot.
Private respondents made inquiries at the RD, they found out that the property was mortgaged for P8,000 to
a certain Mrs. Galupo, the couple thus asked Conrado to pay the mortgage advancing money for such
purpose.
Conrado executed a Deed of Absolute Sale in favor of the spouses Luna. And on June9,1988, said Deed of
Absolute Sale was registered in the register of deeds of the cityand a new title was issued in the name of
the couple.
However, it turns out that it was already previously sold to Naawan Community RuralBank; it was then
unregistered.

The Bank foreclosed on the property, purchased the same, and registered it under Act 3344.
The Bank sought to eject the spouses. However, the latter countered with an action for quieting of title.
ISSUE: WON the right of Naawan Bank will bind the third persons, Lumo Spouses
HELD/RATIO:

NO. The Court upheld the right of a party who had registered the sale of land under the Property
Registration Decree, as opposed to another who had registered a deed of final conveyance
under Act 3344.

Lumo spouses has a better right/title to the land.

The registration of the sale to the respondent Lumo Spouses under the Torrens system was done
in good faith, this sale must be upheld over the sale registered under Act3344 to Petitioner
Naawan RB.

If the real right is not registered, third persons who acted in good faith are protected under the
provisions of the Property Registration Decree. if in bad faith (actual knowledge of the facts, not
valid)
LIM et al, vs. CHUATOCO
FACTS: Spouses Jose Chuatoco and Leoncia Yap were the registered owners of a land with improvements
located Binondo, Manila. On the property, the spouses established a hospital and a school, reserving the
buildings second floor as the family residence.
In 1972, Jose died. His wife Leoncia and five (herein respondents) proceeded to execute a deed of
adjudication and partition. On 1981, a TCT in the name of the spouses was replaced by a TCT in the names
of Leoncia and their children. Soon thereafter, Leoncia died. Jorge then took over as sole administrator of the
school until 1984 when he was joined in this task by Rafaels wife, Teresita.
Respondents alleged that their brother Rafael had in the meantime succeeded in obtaining title to the
property in his own name by using a fictitious deed of sale dated 27 February 1979, purportedly executed by
them and their deceased mother Leoncia in favor of Rafael. It would later be claimed by respondents that
their signatures, as they appeared on the deed of sale, were forged. In 1982, the TCT was cancelled and a
new TCT was issued in the name of Rafael.
In 1986, respondent Jorge allegedly discovered that the title to the property had been transferred to Rafaels
name.
In 1986, Rafael through his wife filed a petition for reconstitution of the owners duplicate of the TCT alleging
therein that their owners duplicate of the title had been lost. After obtaining the reconstituted title, Rafael,
acting through his wife and attorney-in-fact, Teresita, executed a Deed of Absolute Sale to petitioners Lim
covering the disputed property The Lims subsequently caused the cancellation of the TCT in the name of
Rafael and a TCT was issued in their names.
In 1991, after the Lims refused to heed the demands of respondents for the reconveyance of the property, a
complaint was filed with the RTC Manila. Respondents prayed for the declaration of nullity of the deed of sale
purportedly executed by them in favor of Rafael, as well as the deed of sale executed by Rafael in favor of
the Lims; the cancellation of the TCT in the name of the Lims; and for the return of the property to them.
The RTC dismissed the complaint. The CA reversed the trial courts decision, hence this petition.
ISSUE: WON THE COURT OF APPEALS ERRED AS A MATTER OF LAW AND JURISPRUDENCE IN NOT
HOLDING THAT THE LIMS ARE BUYERS IN GOOD FAITH AND FOR VALUE, HENCE THEY ARE
PROTECTED BY LAW.

HELD: The instant petition is hereby GRANTED. The appealed Decision of the CA is hereby REVERSED,
and the Decision of the RTC is REINSTATED.
1. YES. It is a familiar doctrine that a forged or fraudulent document may become the root of a valid title, if
the property has already been transferred from the name of the owner to that of the forger.
Given the failure to establish that the Lims had known the Chuatoco siblings as the collective owners of the
property prior to 1986, it was error on the CA to declare that Jaime should have become suspicious enough.
The Lims had no obligation to look beyond the face of the Torrens title.
It likewise does not escape our attention that the Lims nonetheless exerted efforts beyond a facial
examination of the title to verify the ownership thereof. As admitted by respondents, 2 of the Lims, along with
Atty. Rivera, went to the RD of Manila to verify Rafaels claim over the property, and saw therein the Deed of
Sale executed by respondents and their mother in favor of Rafael, as well as the certificates of title. They
discovered that indeed a TCT was issued solely in the name of Rafael, canceling the TCT issued in the
name of Leoncia Chuatoco and her sons.
Moreover, even as the deed of sale was subsequently proven a forgery, the Lims had every reason to rely
upon it due to the fact that it is a notarized document. Notarized documents, as public documents, are
entitled to full faith and credit upon these face when appreciated by the courts, and so much more when
relied upon by the layman.

sufficiently established by Franciscos direct repudiation of his signature, as well as the denials by Eduardo
and Jorge of their mothers signature.
While the testimony of a person, disavowing the genuineness of his signature may seem self-serving at first
blush, such as that proferred by Francisco, it cannot be ignored that such person is in the best position to
know whether or not the signature on the check was his, and averments he would have on the matter, if
adjudged as truthful, deserve primacy in consideration. The appellate court committed no error in ruling that
Eduardo would probably be the most reliable witness to testify on the handwriting of his mother because he
had worked closely with and exchanged papers and communications with Leoncia on a regular basis, the
latter being then the administrator of the properties left by Jose.
4. It may be gainsaid that there is nothing unusually suspicious with the mere fact that a deed of transfer or
conveyance over titled property is registered three years after the execution of the deed. In fact, there is
nothing in our land registration law that requires the registration or recording of such deeds within a definite
prescribed period of time. The only legal effect of such non-registration is that implied under Section 51 of
the Property Registration Decree, which provides that the act of registration becomes the operative act to
convey or affect the land insofar as third persons are concerned, though prior to registration, it operates as a
contract between the parties and as evidence of authority to the RD to make registration
Cuenco v. Vda. De Manguerra
FACTS

In fact, a good deal of respondents claims on this matter rest upon the proposition that the Lims should have
known that the transfer to Rafael was not valid, rather than proof of actual knowledge of its supposed
invalidity. We are satisfied that the Lims had exerted perhaps a greater effort than that required by law to
ascertain the validity of the TCT and that nothing on the face of the documents they examined should have
led to indubitable knowledge that it was derived from an infirm or spurious source.

If such innocence or good faith is established by the evidence, or insufficiently rebutted by the disputant, then
the corresponding duty of the Court is simply to affirm the rights of the purchaser in good faith. Relief for
such injury should be obtainable instead in a proper proceeding against the malfeasant transferor,
and not the innocent transferee.
Accordingly, the Court concludes that the Lims were innocent purchasers for value
NOTES:
1. It is settled that this Court has to inquire into questions of fact if the courts below have conflicting findings.
2. Respondents make issue of the fact that the TCT has an annotation of an encumbrance noting the
probate of the will of Leoncia Chuatoco dated in 1952 and denominating her children as the heirs to the said
property. Such probate proceeding was an ante mortemprobate undertaken during the lifetime of Leoncia
Chuatoco, and it should be remembered that an order of probate is conclusive only as to the due execution
and capacity of the testator, and not the status and rights of persons to inherit. It cannot be denied that
during her lifetime, and notwithstanding her probated will, Leoncia had the capacity to dispose of her shares
in her property, as the rights thereto of her heirs remain inchoate until the time of her death, which is the only
instance when succession to her properties opens.
3. Both the RTC and the CA concluded that forgery had attended the execution of the Deed of Sale, albeit in
varying degrees. The Court is persuaded by the appellate courts conclusion that all of the signatures therein
were forged, and not just that of Eduardo, Jorge, and Felipe. The RTC had declared that the forgeries of
these three signatures had been established by the document examiner of the NBI. While the NBI expert had
not formed an opinion on the genuineness of the signatures of Leoncia and Francisco, it was merely
because the specimen signatures submitted to him were insufficient. However, the CA correctly ruled that
even in the absence of expert testimony, the falsity of the signatures of Leoncia and Francisco had been

Concepcion (respondent) filed the initiatory complaint herein for specific performance against her uncle
Miguel Cuenco (petitioner, later substituted by Cuyegkeng).
o
Concepcions father, the late Don Mariano Jesus Cuenco (who became Senator) and
Miguel Cuenco formed the Cuenco and Cuenco Law Offices
o
Cuenco and Cuenco Law Offices served as lawyers in two (2) cases entitled Valeriano
Solon versus Zoilo Solon and Valeriano Solon versus Apolonia Solon involving a dispute
among relatives over ownership of lot 903 of the Banilad Estate
Records of said cases indicate the name of the Miguel alone as counsel of record, but in truth and in
fact, the real lawyer behind the success of said cases was the influential Don Mariano Jesus Cuenco
After winning the said cases:
o
Lot 903-A: 5000 square meters (Don Mariano Jesus Cuencos attorneys fees)
o
Lot 903-B: 5000 square meters (Miguel Cuencos attorneys fees)
o
Lot 903-C: 54,000 square meters (Solons retention)
Mariano Cuenco entrusted Lot 903 A to Miguel.
o
Miguel was able to obtain in his own name a title for Lot 903-A
o
Miguel was under the obligation to hold the title in trust for his brother Marianos children by
first marriage
Lot 903-A was partitioned into six (6) sub-lots (Lots 903-A-1 to 903-A-6) to correspond to the six (6)
children of Marianos first marriage (Teresita, Manuel, Lourdes, Carmen, Consuelo, and Concepcion)
The case of Concepcion
o
Five deeds of donation were executed in favour of five children. This left out Concepcion
(who became respondent in this case).
o
Concepcion occupied Lot 903-A-6 and paid taxes for it.
o
When Concepcion went to the Register of Deeds to register the Lot 903-A-6, there was an
adverse claim by Miguel saying that he was the absolute owner of said lot.
Miguels allegations
o
He executed five deeds of donation to five children of his brother because of the love, care
and gratitude <3 they exhibited during his long sickness.
o
Concepcion never visited him.
Miguel was able to take the witness stand but he became sick and was not able to be present on
cross-examination so his testimony was stricken off the record.
Marietta Cuyegkeng (her only daughter) substituted him in the case.

She is the owner of the lot as he purchased it from his father.

That she was aware of the case because her father used to commute to Cebu to attend
hearings.
o
That she constructed a house on the said lot.
Lower court and appellate court:
o
Concepcion has the legal right of ownership over lot 903-A-6.
o
o

The CA ruled that the subject land "is part of the attorneys fees of Don Mariano Cuenco,
predecessor-in-interest of Concepcion Cuenco vda. de Manguerra and Miguel merely holds
such property in trust for her.

ISSUE: Whether Concepcion is entitled to ownership of the property (Lot 903-A-6)

RULING

Given as attorneys fees was one hectare of Lot 903, of which two five-thousand square meter portions
were identified as Lot 903-A and Lot 903-B. That only Miguel handled Civil Case No. 9040 does not
mean that he alone is entitled to the attorneys fees in the said cases. "When a client employs the
services of a law firm, he does not employ the services of the lawyer who is assigned to
personally handle the case. Rather, he employs the entire law firm." Being a partner in the law
firm, Mariano -- like Miguel -- was likewise entitled to a share in the attorneys fees from the
firms clients.

Although Lot 903-A was titled in Miguels name, the circumstances surrounding the acquisition and the
subsequent partial dispositions of this property eloquently speak of the intent that the equitable or
beneficial ownership of the property should belong to Mariano and his heirs.

Lot 903-A was one half of the one-hectare portion of Lot 903 given as attorneys fees by a
client of the law firm of Partners Miguel and Mariano Cuenco. Lot 903-A was one half of the
one-hectare portion of Lot 903 given as attorneys fees by a client of the law firm of
Partners Miguel and Mariano Cuenco

Miguel readily surrendered his Certificate of Title and interposed no objection to the
subdivision and the allocation of the property to Marianos six children, including
Concepcion.

Marianos children, including Concepcion, were the ones who shouldered the expenses
incurred for the subdivision of the property
After the subdivision of the property, Marianos children -- including Concepcion -- took
possession of their respective portions thereof.

Facts: Spouses Julian and Guillerma Sambaan were the registered owner of a property located in Bulua,
Cagayan de oro City. The respondents and the petitioner Myrna Bernales are the children of Julian and
Guillerma. Myrna, who is the eldest of the siblings, is the present owner and possessor of the property in
question.
Julian died in an ambush in 1975. Before he died, he requested that the property in question be redeemed
from Myrna and her husband Patricio Bernales. Thus, in 1982 one of Julians siblings offered to redeem the
property but the petitioners refused because they were allegedly using the property as tethering place for
their cattle.
In January 1991, respondents received an information that the subject property was already transferred to
Myrna Bernales. The Deed of Absolute Sale dated December 7, 1970 bore the forged signatures of their
parents, Julian and Guillerma.
On April 1993, the respondents, together with their mother Guillerma, filed a complaint for Annulment of
Deed of Absolute Sale and cancellation of TCT No. T-14204 alleging that their parents signatures were
forged. The trial court rendered a decision on August 2, 2001 cancelling the TCT and ordering another title to
be issued in the name of the late Julian Sambaan.
Petitioners went to the CA and appealed the decision. The CA affirmed the decision of the lower court. A
motion for reconsideration of the decision was, likewise, denied in 2004. Hence, this petition for certiorari.
Issue: Whether or not the Deed of Absolute Sale is authentic as to prove the ownership of the petitioners
over the subject property.
Held: It is a question of fact rather than of law. Well-settled is the rule that the Supreme Court is not a trier of
facts. Factual findings of the lower courts are entitled to great weight and respect on appeal, and in fact
accorded finality when supported by substantial evidence on the record. Substantial evidence is more than a
mere scintilla of evidence. It is that amount of relevant evidence that a reasonable mind might accept as
adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine
otherwise. But to erase any doubt on the correctness of the assailed ruling, we have carefully perused the
records and, nonetheless, arrived at the same conclusion. We find that there is substantial evidence on
record to support the Court of Appeals and trial courts conclusion that the signatures of Julian and Guillerma
in the Deed of Absolute Sale were forged.
Conclusions and findings of fact by the trial court are entitled to great weight on appeal and should not be
disturbed unless for strong and cogent reasons because the trial court is in a better position to examine real
evidence, as well as to observe the demeanor of the witnesses while testifying in the case. The fact that the
CA adopted the findings of fact of the trial court makes the same binding upon this court.
Thus, we hold that with the presentation of the forged deed, even if accompanied by the owners duplicate
certificate of title, the registered owner did not thereby lose his title, and neither does the assignee in the
forged deed acquire any right or title to the said property.
GONZALES V. PEREZ

The legal titles to five portions of the property were transferred via a gratuitous deed of
conveyance to Marianos five children, following the allocations specified in the subdivision
plan prepared for Lourdes Cuenco.
Respondent is not barred by laches. In the present case, respondent has persistently asserted her
right to Lot 903-A-6 against petitioner
o

BERNALES v SANBAON

The former Municipality of Marikina in the Province of Rizal (now City of Marikina, Metro Manila) used to own
a parcel of land located in Barrio Concepcion of the said municipality covered by Original Certificate of Title
(OCT) No. 6293 of the Register of Deeds of Rizal. The said property was subdivided into three (3) lots,
namely, lots A, B and C, per subdivision plan(LRC) Psd-4571.

On January 14, 1966, the Municipal Council of Marikina passed Resolution No. 9, series of 1966 which
authorized the sale through public bidding of Municipal Lots A and C.
On April 25, 1966, a public bidding was conducted wherein Pedro Gonzales was the highest bidder. Two
days thereafter, or on April 27, 1966, the Municipal Council of Marikina issued Resolution No. 75 accepting
the bid of Pedro. Thereafter, a deed of sale was executed in favor of the latter which was later forwarded to
the Provincial Governor of Rizal for his approval. The Governor, however, did not act upon the said deed.
Sometime in September 1966, Pedro sold to Marcos Perez a portion of Lot C, denominated as LotC-3, which
contains an area of 375 square meters. The contract of sale was embodied in a Deed of Sale which,
however, was not notarized. To segregate the subject property from the remaining portions of Lot C, Marcos
had the same surveyed wherein a technical description of the subject lot was prepared by a surveyor.
Subsequently, Pedro and Marcos died.
On February 7, 1992, the Municipality of Marikina, through its then Mayor Rodolfo Valentino, executed a
Deed of Absolute Transfer of Real Property over Lots A and C in favor of the Estate of Pedro C. Gonzales.
On June 25, 1992, Transfer Certificate of Title (TCT) No. 223361, covering Lot C, was issued in the name of
the said estate.
Subsequently, herein petitioners executed an extra-judicial partition wherein Lot C was subdivided into three
lots. As a result of the subdivision, new titles were issued wherein the 370-square-meter portion of Lot C-3 is
now denominated as Lot C-1 and is covered by TCT No.2444479 and the remaining 5 square meters of the
subject lot (Lot C-3) now forms a portion of another lot denominated as Lot C-2 and is now covered by
TCT No. 244448.
On October 1, 1992, herein respondents sent a demand letter to one of herein petitioners asking for the
reconveyance of the subject property.11 However, petitioners refused to reconvey the said lot. As a
consequence, respondents filed an action for "Annulment and/or Rescission of Deed of Absolute Transfer
of Real Property x x x and for Reconveyance with Damages."12On February 2, 1998, the RTC rendered its
Decision with the following dispositive portion: WHEREFORE, foregoing premises, judgment is
hereby rendered as follows:1. DISMISSING the complaint subject of the case in caption for lack of merit;2.
DECLARING VALID both T

HEIRS OF LABISTE V. LABISTE

DOCTRINE
If a trust relationship has been created between the parties whether expressly or impliedly, prescription does
not run until the said trust is repudiated.
FACTS
The case involved a parcel of Friar Land with an area of 13,308 square meters known at Cebu City which
was purchased from the Bureau of Lands way back on 1919 by Emilio in his own behalf and on behalf of his
brothers and sisters who were the heirs of Jose. (Collectively known as Heirs of Jose)
The money that was used to purchase the land came from both Emilio and their Uncle Lino so after full
payment of the purchase price but prior to the issuance of the deed of conveyance by the Bureau of Lands,
Emilio executed an Affidavit in Spanish dated on 1923 affirming that he, as one of the heirs of Jose and his
Uncle Lino then co-owned the lot. Thereafter or on 1924 the Bureau of Lands executed the Deed of
Conveyance in favor of Emilio and his siblings, or the heirs of Jose by virtue of which a TCT was issued by
the Register of Deeds.

On 1928, the lot was subdivided by Deputy Land Surveyor, Engineer Bunag into two (2) equal parts with an
area of 6,664 square meters for Lino and an area of 6,664 square meters for Emilio and the other heirs of
Jose. This was approved by the Director of Lands on 1928.
On 1939, the heirs of Lino purchased the share of the lot of the heirs of Jose as evidenced by the Calig-onan
sa Panagpalit executed by the parties in Visayan dialect. So the heirs of Lino immediately took possession of
the entire 13,308 sqm lot.When World War II broke out however, Linos heirs fled the city. When
they came back after the war, they found their homes and possessions and the records in the government
offices burned and destroyed with squatters occupying their entire property.Linos heirs subsequently learned
that one of the heirs of Jose filed a petition for reconstitution of title over the Lot on September 17, 1993.

So in October 1993 they opposed the said petition but later on withdrew the same on the basis of a compromise agreement the
the reconstituted Title in the names of the heirs of Jose.
The heirs of Jose however did not honor the compromise agreement.

So on January 13, 1995, the heirs of Lino filed a complaint for annulment of title, re-conveyance of property with damages. Jos
ISSUE
a) WON Linos heirs had long prescribed or barred by laches. b) How Express Trusts are created.
HELD / RATIO
a)No. The rules on prescription and the principle of laches cannot be
applied here because of the existence of a trust relationship.

b) Trust is the right to the beneficial enjoyment of property, the legal title to which is vested in another. It may either be express
words are required for the creation of an express trust it being sufficient that a trust is clearly intended (Article 144, Civil

Code). An implied trust comes into being by operation of law.The Affidavit of Emilio which is genuine and authentic beyond cav
in the nature of an express trust. In said affidavit, Emilio confirmed that Lot 1054 bought in his name was co-owned by him as o
corroborated by the subdivision plan prepared by Engineer Bunag and approved by the Bureau of Lands. As such prescription
ouster of the beneficiary; (b) such positive acts of repudiation have been made known to the beneficiary, and (c) the evidence
thereon is clear and conclusive.Joses heirs cannot rely on the fact that the Torrens title was issued in
their names. Trustees who obtain a Torrens title over a property held in trust by them for another cannot repudiate the trust by

the petition for reconstitution in October 1993. And since Linos heirs filed their complaint in January 1995 their cause of action

Neither can laches be attributed to them. Laches cannot be used to defeat justice or perpetuate fraud and injustice. Neither sh
of another.
However with respect to the other half covered by the private Calig-

onan sa Pagpapalit, the heirs of Lino should have filed an action to compel Joses heirs to execute a public deed of sale. Since
must be filed within 10 years only. So only one-half can be recovered by Linos heirs or 6,664 sqm shall be retained by Joses
DEL PRADO V. CABALLERO
Facts
Several parcels of land, including Cadastral Lot No. 11909, were adjudicated in favor of Spouses Antonio
and Leonarda Caballero in 1985; hence, the court ordered for the issuance of the decree of registration and
the corresponding titles of the lots in favor of the Caballeros.
On June 11, 1990, Spouses Caballero sold to Carmen del Prado, Cadastral Lot No. 11909 on the basis of
the tax declaration covering the property. On March 20, 1991, petitioner filed in the same cadastral
proceedings a "Petition for Registration of Document Under PD 1529" in order that a certificate of title be

issued in her name, covering the whole Lot No. 11909, which is in excess of the allotted area to be sold. In
the petition, she alleged that the tenor of the instrument of sale indicated that the sale was for a lump sum, in
which case, the vendor was bound to deliver all that was included within said boundaries even when it
exceeded the area specified in the contract.
Issue: WON the petitioners recourse, by filing the petition for registration in the same cadastral case, was
proper.
Ruling
Petitioners recourse, by filing the petition for registration in the same cadastral case, was improper. It is a
fundamental principle in land registration that a certificate of title serves as evidence of an indefeasible and
incontrovertible title to the property in favor of the person whose name appears therein. Such indefeasibility

commences after one year from the date of entry of the decree of registration. Inasmuch as the petition for
registration of document did not interrupt the running of the period to file the appropriate petition for review
and considering that the prescribed one-year period had long since expired, the decree of registration, as
well as the certificate of title issued in favor of respondents, had become incontrovertible.
In addition, what really defines a piece of ground is not the area, calculated with more or less certainty,
mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating its
limits. However, numerical data are not the sole gauge of unreasonableness of the excess or deficiency in
area. In the instant case, the parties agreed on the purchase price of P40,000.00 for a predetermined area of
4,000 sq m, with the specified boundaries. Clearly, the discrepancy of 10,475 sq m cannot be considered a
slight difference in quantity. It is not a reasonable excess or deficiency that should be deemed included in the
deed of sale.