Cancellation of Title

Action for reversion- filed by government through Solicitor General

Action for cancellation- initiated by a private property usually in a case where there are two titles issued to
different persons for the same lot

On judgment of case for cancellation

When one is superior over the other, the one with the inferior title should be declared null and void and
ordered cancelled.
Party adjudged to be the owner is entitled to possession of the land
The land does not revert to the mass public domain but declared lawfully belonging to the party with the
superior title

Principle: Where two certificates of title are issued to different persons covering the same land in whole or in
part, the earlier in date must prevail as between the original parties, and in case of successive registration
where more than one certificate is issued over the land, the person holding the prior certificate is entitled to
the land as against the person who relied on the second registration.

Action for cancellation is usually brought by the aggrieved private party whose land has been fraudulently or
erroneously titled in the name of the other
o

BUT, the government even without proprietary interest in the property, is vested with personality to
bring actions for cancellation to protect public interest and preserve the integrity of the Torrens
System, and safeguard the Assurance Fund

Assurance Fund
Intended to relieve innocent persons form the harshness of the doctrine that a certificate is conclusive
evidence of an indefeasible title to the land.
Remedy of one who failed to establish right within 1 year from issuance of decree
If one has established his ownership over a property but such property has been wrongfully or erroneously
registered through fraud or mistake in anothers name is, and the lapse of 1 year from the date of issuance of the
decree, is not to set aside the decree, it becoming incontrovertible and no longer open for review, but to institute
an ordinary action in the ordinary court of justice for reconveyance.
BUT, if it has already passed onto an innocent purchaser for value, the remedy is to file an action for damages from
the person who allegedly registered the property through fraud, or if he had become insolvent or if the action is
barred by prescription, to file an action for recovery against the Assurance Fund within a period of 6 years from the
time the right to bring such action accrues.
Estrellado vs Martinez:
A person who is wrongfully deprived of land or of any estate or interest therein, without the negligence on his
part, by the registration in error of another person as owner of such land, may successfully maintain an action for
damages, begun before the action is barred, against the person in whose favor the decree of registration was
issued, notwithstanding such decree was not obtained by actual fraud and notwithstanding a petition for review
on the ground of fraud has been denied.
Based from PUBLIC POLICY for those unjustly deprived of their rights over real property
Prevents unjust enrichment

Remedies available:
May file a suit for reconveyance of property
Personal action for recovery of damages against the party who procured the registration through fraud, or in
case of insolvency of the party who procured the registration through fraud, an action against the Treasurer of
the Philippines for recovery of damages from the Assurance Fund.
Requisites for recovery
Persons who may recover from the Assurance Fund:
1. Any person who sustains loss or damage under the following conditions:
a. There was no negligence on his part
b. The that loss or damage sustained was through any omission, mistake, malfeasance of the court
personnel, or Registrar of Deeds, his deputy, or other employees of the Registry in the performance
of their respective duties under the provision of Property Registration Decree
2. Any person who has been deprived of any land or interest under the ff. conditions:
a. No negligence on his part
b. That he was deprived as a consequence of the bringing of his land or interest under the provisions of
the Property Registration Decree; or by the registration by any other person as owner of such land; or
by mistake, omission or misdescription in any certificate of owners duplicate, or in any entry or
memorandum in the register or other official book or by any cancellation
c. That he is barred or in any way precluded from bringing an action for the recovery of such land or
interest therein, or claim upon the same
It is necessary that there be no negligence on the part of the party sustaining any loss or damage or being deprived
of any land or interest therein by the operation of the Torrens system after the original registration.
If the plaintiff is solely responsible, the Director of Lands and the National Treasurer are exempt from liability.
Action for compensation against the Assurance Fund must be brought within 6 years from time the right to bring
such action first occurred.
Indispensable parties in an action against the Assurance Fund
Action for compensation from the Fund must be filed against the Register of Deeds of the province or city
where the land is situated and the National Treasurer as defendants
o when such action is brought
to recover for the loss or damage
or for deprivation of land or any estate or interest therein
arising wholly through fraud, negligence, omission, mistake or misfeasance of the court
personnel, Register of Deeds, his deputy, or other employees of the registry in the
performance of their respective duties

If such action is brought for same reasons but by persons other than court those previously mentioned, the
action must be brought against the Register of Deeds, the National Treasurer, as well as other persons as codefendants.

It is a condition sine qua non that the person who brings the action for damages against the Fund be the registered
owner, as the holder of transfer certificates of title, that they be innocent purchasers in good faith and for value.
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.

Article 476 of the Civil Code which states:

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

EXISTENCE OF A CLOUD
The cloud on title exists because
1. Of an instrument or record or claim or encumberance or proceeding
2. Which is apparently valid or effective
3. But is in truth and in fact, invalid, ineffective, voidable or unenforceable or extinguished or barred by
extinctive prescription
4. And may be prejudicial to the title
RIGHT OF A PROPERTY OWNER TO HAVE CLOUDS ELIMINATED
1. That their respective rights be determined
2. Not only to place things in their proper place, to make the one who has no rights to said immovable
respect and not disturb the other
3. But also for the benefit of both
4. So that he who has a right would see every cloud of doubt over the property displaced
5. And he could afterwards without fear introduce the improvements
he may desire, to use and even to abuse the property as he deems best
REASONS FOR ALLOWING THE ACTION
1. The prevention of litigation
2. The protection of the true title and possession
3. The promotion of right and justice
N.B: the nature of the action for quieting of title is an action in personam
DOES AN ACTION FOR QUIETING OF TITLE PRESCRIBE?
It depends
1. If the plaintiff is in possession of the property, the action doesn't prescribe
2. If the plaintiff is not in possession of the property, the action may prescribe. The period would be either 10 or
30 years. It may also be barred by laches.
NATIONAL HOUSING AUTHORITY vs SOLEDAD C. PASCUAL,
G.R. No. 158364 November 28, 2007
YNARES-SANTIAGO, J.:
Facts:

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RA 2616 was enacted providing for the expropriation of the Tatalon Estate and the sale of the lots to present
bonafide occupants.
NHA was designated as administrator of the Tatalon Estate Housing Project by virtue of PD 1261
Pursuant to PD 1261, NHA awarded a lot of the Tatalon Estate Urban Bliss Project (TEUBP) to Dolores
Maranan since she was included in the Araneta Census List of Occupants
Transfer Notice was given to Maranan and a deed of sale with mortgage was executed
Register Deeds of QC issued TCT in favor of Maranan who executed a SPA in favor of Perlita Canedo with
respect to the property and thereafter left the Philippines.
Full payment was given by Perlita Canedo so NHA executed a Deed of Cancellation and Release of Real Estate
Mortgage
Maranan then sold the lot to Perlita Canedo
Soledad Pascual however assailed the award of the lot to Maranan by filing a letter-complaint before the
General Manager of NHA
a. That she is the rightful beneficiary of the said lot being the actual occupant and for having resided
since 1968
b. That they used the lot for their domicile and operated a motor shop and were included in the 1976
Census
Their house was then demolished and relocated to an inner lot
The General Manager sustained the position of the Project Manager to award the lot to Maranan and to relocate
Pascual to an inner lot and dismissed her complaint
Pascual appealed to the Office of the President. NHA maintained the award of the lot.
The Presidential Staff Director wrote to the General Manager to reconsider the case in view that Maranan was
an absentee awardee.
a. That Maranan became a lawful resident of Honolulu, Hawaii
b. That lot was originally occupied by Pascual but was awarded to Maranan under fraudulent
circumstance
Pascual signed a Conditional Contract to sell a lot of TEUBP previously allocated to her upon NHAs pushing
that she would lose all her rights to be awarded a lot in the estate.
Complaints Assistance and Action Center reviewed the case and recommended
a. that Pascual be awarded another front lot to settle the matter;
b. that the award of the inner lot where she was relocated will be cancelled
c. and payments made shall be applied to the new lot
d. that if Pascual insists on her claim on the subject lot, then she must substantiate her claim.
No ruling was made as to the disqualification of Maranan as an absentee awardee
Pascual filed a complaint for declaration of nullity, reconveyance and damages with the RTC against NHA,
Maranan, Canedo, and the Register of Deeds
a. To declare the nullification of the award to Maranan
b. Reconveyance of said lot
c. Payment of damages
TC ruled for Maranan
a. That Maranan is the real owner
CA reversed TC decision
a. Award of the lot to Maranan is null and void and to cancel and reconvey the said lot to Pascual
NHA maintains that the court has no power to do so since the award has attained finality and the complaint filed
by Pascual with the RTC is not the proper remedy to contest the same

Issue:
Can the award of the subject lot to Dolores Maranan still be nullified and set aside by the courts?
Held:
On Res Judicata
Pascuals letter-complaint substantially complied with the requirements of the law regarding administrative
appeals.
In the exercise of its discretion, the Office of the President gave due course to the appeal.

 It is well-established in our jurisprudence that the decisions and orders of administrative agencies, rendered
pursuant to their quasi-judicial authority, have upon their finality, the force and binding effect of a final
judgment within the purview of the doctrine of res judicata.
In the case at bar, since NHAs decision was seasonably appealed by Pascual, the same has not
attained finality and the principle of res judicata does not apply.