I. i. 1. G.R. No.

190901

November 12, 2014

AMADA
COTONER-ZACARIAS, Petitioner,
vs.
SPOUSES ALFREDO AND THE HEIRS REVILLA OF PAZ REVILLA, Respondents.
DECISION
LEONEN, J.:
Well-settled is the rule that "conveyances by virtue of a forged signature ... are void ab initio [as] [t]he
absence of the essential [requisites] of consent and cause or consideration in these cases rendered the
contract inexistent[.]"
1

Before us is a petition for review filed by Amada Cotoner-Zacarias against respondent spouses Alfredo
Revilla and Paz Castillo-Revilla, praying that this court render a decision "reversing the Decision of the
Regional Trial Court and Court of Appeals and declaring the transfer of title to the Petitioner and then to
her successors-in-interest as valid and binding as against the respondents."
2

The Court of Appeals summarized the facts as follows.

Alfredo Revilla and Paz Castillo-Revilla (Revilla spouses) are the owners in fee simple of a 15,000-squaremeter unregistered parcel of land in Silang, Cavite, covered by Tax Declaration No. 7971.
4

In 1983, the Revilla spouses faced financial difficulties in raising funds for Alfredo Revillas travel to Saudi
Arabia, so Paz Castillo-Revilla borrowed money from Amada Cotoner-Zacarias (Amada). By way of
security, the parties verbally agreed that Amada would take physical possession of the property, cultivate
it, then use the earnings from the cultivation to pay the loan and realty taxes. Upon full payment of the
loan, Amada would return the property to the Revilla spouses.
5

Unknown to the Revilla spouses, Amada presented a fictitious document entitled "Kasulatan ng Bilihanng
Lupa" before the Provincial Assessor of Cavite. This document was executed on March 19, 1979 with the
Revilla spouses as sellers and Amada as buyer of the property. Consequently, Tax Declaration No. 7971
in the name of the Revilla spouses was cancelled, and Tax Declaration No. 19773 in the name of Amada
was issued.
7

On August 25, 1984, Amada sold the property to the spouses Adolfo and Elvira Casorla (Casorla spouses)
by "Deed of Absolute SaleUnregistered Land." Tax Declaration No. 30411-A was later issued in the name
of the Casorla spouses.
8

In turn, the Casorla spouses executed a deed of absolute sale dated December 16, 1991 in favor of the
spouses Rodolfo and Yolanda Sun (Sun spouses). Tax Declaration Nos. 30852-A and 18584 were issued
in favor of the Sun spouses.
9

In December 1994, Alfredo Revilla returned from Saudi Arabia. He asked Amada why she had not
returnedtheir tax declaration considering their full payment of the loan. He then discovered that the
propertys tax declaration was already in the name of the Sun spouses.
10

On February 15, 1995, the Revilla spouses were served a copy of the answer in the land registration
case filed by the Sun spouses for the property. The Revilla spouses then saw a copy of the "Kasulatan ng
Bilihan ng Lupa" and noticed that their signatures as sellers were forged.
11

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Page 1 of 19

They then demanded the cancellation of the "Kasulatan ng Bilihan ng Lupa" from Amada and all
subsequent transfers of the property, its reconveyance, and the restoration of its tax declaration in their
name. Amada failed to take action.
14

On November 17, 1995, the Revillaspouses filed a complaint before the Tagaytay Regional Trial Court for
the annulment of sales and transfers of title and reconveyance of the property with damages against
Amada, the Casorla spouses, the Sun spouses, and the Provincial Assessor of Cavite.
15

In her answer, Amada denied that the property was used as a security for the Revilla spouses
loan. Instead, she claimed that the Revilla spouses voluntarily executed the "Kasulatan ng Bilihan ng
Lupa" in her favor on March 19, 1979. She added that the Revilla spouses cause of action already
prescribed.
16

17

For their part, the Sun spouses argued good faith belief that Amada was the real owner of the property
asAmada showed them a tax declaration in her name and the "Kasulatan ng Bilihan ng Lupa" allegedly
executed by the Revilla spouses. When the Sun spouses discovered there was another sale with the
Casorla spouses, they were assured by Amada that she had already bought back the property from the
Casorla spouses. Subsequently, the Casorla spouses executed a deed ofabsolute sale dated December
16, 1991 in favor of the Sun spouses. They also argued prescription against the Revilla spouses, and
prayed for damages against Amada by way of crossclaim.
18

19

20

21

On August 3, 2006, the Regional Trial Court found the "Kasulatan ng Bilihan ng Lupa" to be a fictitious
document, and ruled in favor of the Revilla spouses:
22

WHEREFORE, premises considered, judgment is hereby rendered as follows:

1. Declaring the sales/transfers from Tax Declaration No. 7971, s. 1980 to Tax Declaration No.
18584, s. 1994 as NULL and VOID, without valid transmission of title and interest from the original
owners, plaintiffs herein and consequently, entitling plaintiffs to reinstatement and reconveyance of
their title/taxdeclaration as well as possession of the subject property;
2. Ordering defendant Zacariasto pay the following:
2.1 To the Plaintiffs:
a. P50,000.00 for moral damages;
b. P20,000.00 for exemplary damages; and
c. P80,000.00 for attorneys fees.
2.2 To Defendant-Spouses Sun:
a. P467,350.00 for actual damages;
b. P50,000.00 for moral damages;
c. P20,000.00 for exemplary damages; and
d. P100,000.00 for attorneys fees.
SO ORDERED.

23

Page 2 of 19

Amada appealed the trial courts decision, while the Sun spouses partially appealed the decision as to
interest and damages.
On August 13, 2009, the Court of Appeals dismissed the appeal of Amada, and partially granted the
appeal of the Sun spouses. The dispositive portion reads:
24

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DISMISSING the
appeal filed by defendant appellant Amada C. Zacarias in this case, and PARTIALLY GRANTING the
appeal filed by the Spouses Rodolfo and Yolanda Sun. The Decision dated August 3, 2006 rendered by
Branch 18 of the Regional Trial Court of the Fourth Judicial Region stationed in Tagaytay City, Cavite in
Civil Case No. TG-1543 is MODIFIED in that defendant-appellant Amada C. Zacarias is ordered to pay
interest at 6% per annum on the principal obligation in the amount of P467,350.00 from February 3, 1995,
the date of the first judicial demand by the Spouses Sun, until said decision on the principal obligation
became final and executory, and interest at 12% per annum on the principal obligation, moral and
exemplary damages, as well as attorneys fees, from the time said decision became final and executory
until full payment of said amounts.
SO ORDERED.

25

The Court of Appeals denied Amadas motion for reconsideration; hence, she filed this petition. Petitioner
argues that the antichresisclaim of the Revilla spouses was not reduced into writing, thus, it is void under
Article 2134 of the Civil Code. She submits that the allegation of antichresis was only an excuse by the
Revilla spouses for their failure to impugn possession of the property by Amada and her successors-ininterest for over 16 years.
26

27

Petitioner contends that the sale inher favor was established by the "Kasulatan ng Bilihan ng Lupa," the
delivery of the tax declaration, and the testimony of one Mrs. Rosita Castillo (Rosita). Rosita was the
second wife of Felimon Castillo, the previous owner of the property. She testified that respondent Paz
Castillo-Revilla admitted toher father, Felimon, that she and Alfredo Revilla sold the property to Amada.
28

29

On the alleged forgery, petitioner submits that the court misapplied the principle that "he who alleges not
he who denies must prove" when it stated that she had the burden of proving the due execution of the
deed of absolute sale. Since the Revilla spouses alleged that the deedwas a forged document, they had
the burden of proving the forgery. She then cites the trial court in that "[a]ccordingly, the National
Bureauof Investigation was not able to ascertain the genuineness of the signatureof plaintiff Paz Revilla
because of lack of sufficient sample signatures. . . ."
30

31

On the prescription argument, the parties live in a very small barangay. While Alfredo Revilla worked in
Saudi Arabia, he admitted returning to the Philippines twice a year, while his wife never left Silang,
Cavite, and yet the Revilla spouses never questioned the activities on the property for more than 16
years.
32

33

On the proper docket fees, petitioner contends that the Revilla spouses paid docket fees based on their
prayer for actual damages of P50,000.00, moral damages of P50,000.00, and attorneys fee
of P80,000.00, when they should have based it on P12,000,000.00, the value of the property they alleged
in their supplemental pre-trial brief.
34

Lastly, petitioner argues that the property is conjugal in nature, but the court never declared that
respondent Paz Castillo-Revillas signature was falsified. Thus, the sale over her half of the property
cannot be declared void. She adds that the Sun spouses are buyers in good faith for value, making
reinstatement of the property impossible.
35

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Respondents Revilla spouses counter that the factual issue of whether the "Kasulatan ng Bilihan ng Lupa"
isa falsified document was already conclusively resolved by the lower courts and, generally, factual
findings are beyond this courts power of review.
37

On the prescription issue, respondents Revilla spouses argue that an action or defense to declare a
document null is imprescriptible. Laches also does not apply since they immediately questioned the
fraudulent transfers by filing a complaint in November 1995 upon learning of the questionable documents
in February 1995, after Alfredo had returned from Saudi Arabia in December 1994.
38

39

Respondents Revilla spouses contend that they paid the proper docket fees. The P12,000,000.00
mentioned during pre-trial that petitioner insists should have been the basis of the fees was neither stated
in the complaint nor awarded by the court.
40

Respondents Revilla spouses argue that the court did not err in ordering reinstatement of the property
tothem. First, the defense that the Sun spouses were buyers in good faith is a personal defense that
cannot be raised by petitioner who was not privy to the sale between the Casorla spouses and the Sun
spouses. Second, an alternative prayer for damages cannot be interpreted as an admission that the relief
for reinstatement is not viable. Third, the transaction happened prior to the effectivity of the Family Code;
thus, Article 172 of the Civil Code applies such that "[t]he wife cannot bind the conjugal partnership without
the husbands consent, except in cases provided by law." Consequently, the result is the same even if
respondent Paz Castillo-Revilla did not testify that the signature is not hers, as she cannot bind the entire
property without her husbands consent. Lastly, no unjust enrichment exists since they were deprived of
their property for so long.
41

42

43

44

45

The issues for this courts resolution are as follows:

First, whether respondents Revilla spouses cause of action is barred by prescription or laches; Second,
whether the trial court acquired jurisdiction when respondents Revilla spouses paid filing fees based on
the P50,000.00 claim for damages in the complaint but stated in their supplemental pre-trial brief that the
property is valued atP12,000,000.00; and
Third, whether the Court of Appeals erred in upholding the reinstatement and reconveyance of the
property in favor of respondents Revilla spouses.
I.
On the first issue, petitioner argues that respondents Revilla spouses claim is barred by laches since
theyallowed 16 years to lapse, with petitioner having possession of the property, before filing suit.
46

Laches has been defined as "the failure or neglect, for an unreasonable and unexplained length of time, to
do that which by the exercise of due diligence could or should have been done earlier."
47

The elements that need to be present and proven before an action is considered barred by laches are the
following:
The four basic elements of laches are: (1) conduct on the part of the defendant, or of one under whom he
claims, giving rise to the situation of which complaint is made and for which the complaint seeks a remedy;
(2) delay in asserting the complainant's rights, the complainant having had knowledge or notice of the
defendants conduct and having been afforded an opportunity to institute suit; (3) lack of knowledge or
notice on the part of the defendant that the complainant would assert the right on which he bases his suit;
and, (4) injury or prejudice to the defendant in the event relief is accorded to the complainant or the suit is
not held to be barred.
48

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There was no delay by respondents Revilla spouses in asserting their rights over the property. The lower
courts found that respondents Revilla spouses first learned of the existence of the "Kasulatan ng Bilihan
ng Lupa" in February 1995 when they were serveda copy of the pleading in the land registration case
instituted by the Sun spouses. They filed their complaint within the same year, specifically, on November
17, 1995. The lapse of only nine (9) months from the time they learned of the questionable transfers on
the property cannot be considered as sleeping on their rights.
49

In any case, doctrines of equity such as laches apply only in the absence of statutory law. The Civil Code
clearly provides that "[t]he action or defense for the declaration of the inexistence of a contract does not
prescribe." This court has discussed:
50

Lachesis a doctrine in equity and our courts are basically courts of law and not courts of equity. Equity,
which has been aptly described as "justice outside legality," should be applied only in the absence of, and
never against, statutory law. Aequetas nunguam contravenit legis. The positive mandate of Art. 1410 of the
New Civil Code conferring imprescriptibility to actions for declaration of the inexistence of a contract
should pre-empt and prevail over all abstract arguments based only on equity. Certainly, laches cannot be
set up to resist the enforcement of an imprescriptible legal right, and petitioners can validly vindicate their
inheritance despite the lapse of time.
51

II.
On the second issue, petitioner argues that respondents Revilla spouses did not pay the correct docket
fees. She submits that docket fees paid were based on the prayer for actual damages of P50,000.00,
moral damages ofP50,000.00, and attorneys fee of P80,000.00, when the spouses Revilla should have
based it onP12,000,000.00, the value of the property they alleged in their supplemental pre-trial
brief. Petitioner cites Supreme Court Circular No. 7 and jurisprudence holding that the payment of proper
docket fees is crucial in vesting courts with jurisdiction over the subject matter.
52

53

This court finds that respondents Revilla spouses paid the proper docket fees, thus, the trial court acquired
jurisdiction.
It is true that "[i]t is not simply the filing of the complaint or appropriate initiatory pleading, but the payment
of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the
action."
54

In Manchester Development Corporation v. Court of Appeals, this court "condemned the practice of
counsel who in filing the original complaint omitted from the prayer any specification of the amount of
damages although the amount of over 78 million is alleged in the body of the complaint." The court gave
the following warning against this unethical practice that serves no other purpose than to avoid paying the
correct filing fees:
55

56

The Court serves warning that itwill take drastic action upon a repetition of this unethical practice. To put a
stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings should
specify the amount of damages being prayed for not only inthe body of the pleading but also in the prayer,
and said damages shall be considered in the assessment of the filing fees in any case. Any pleading that
fails to comply with this requirement shall not be accepted nor admitted, or shall otherwise be expunged
from the record.
The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An
amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less
the payment of the docket fee based on the amounts sought in the amended pleading. The ruling in the
Magaspi case in sofar as it is inconsistent with this pronouncement is overturned and
reversed. (Emphasis supplied)
57

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This ruling was circularized through Supreme Court Circular No. 7 addressed to all lower court judges
and the Integrated Bar of the Philippines for dissemination to and guidance for all its members.
58

The facts of this case differ from Manchester and similar situations envisioned under the circular. The
complaint filed by respondents Revilla spouses included in its prayer the amount of P50,000.00 as actual
damages, without mention of any other amount in the body of the complaint. No amended complaint was
filed to increase this amount in the prayer. Thus, the Court of Appeals found as follows:
In the case at bench, the complaint filed by the Spouses Revilla only asked for actual damages in the
amount ofP50,000.00. While the Spouses Revilla mentioned the amount of P12,000,000.00 as actual
damages in the pre-trial, said amount was not stated in the complaint and neither was it awarded by the
lower court in its judgment. Hence, said amount was not even considered by the court a quo when it
awarded damages in favor of the Spouses Revilla. Considering that the complaint was not formally
amended by the spouses to increase the amount of actual damages being sought, the trial court was not
stripped of its jurisdiction to try the case since the Spouses Revilla correctly paid the docket fees based
merely on what was prayed for in the complaint.Indeed, the mere mentioning by the Spouses Revilla of
the amount of P12,000,000.00 during the pre-trial is inconsequential, as the trial court properly acquired
jurisdiction over the action when the Spouses Revilla filed the complaint and paid the requisite filing fees
based on the amount as prayed for in the complaint. (Emphasis supplied)
59

In Padlan v. Dinglasan, this court reiterated that "[w]hat determines the jurisdiction of the court is the
nature of the action pleaded as appearing from the allegations in the complaint [and] [t]he averments
therein and the character of the relief sought are the ones to be consulted."
60

61

Petitioner attached copies of the tax declarations and deeds of sale over the property to the petition. Tax
Declaration No. 7971 in the name of respondents Revilla spouses provides that the land had a market
value ofP13,500.00, while the mango trees had a market value of P3,500.00. Petitioner alleged in her
petition that respondents Revilla spouses offered to sell the property to her for P50,000.00, while the trial
court found that the "Kasulatan ng Bilihan ng Lupa" reflected the amount of P20,000.00. Subsequent tax
declarations in the name of petitioner, the Casorla spouses, and the Sun spouses all provided for land
market values lower than P50,000.00. The deed of sale in favor of the Casorla spouses states that the
assessed value of the property was P1,400.00, and the consideration for the sale was P50,000.00. The
subsequent deed of sale in favor of the Sun spouses provides for the same amount as consideration.
62

63

64

65

66

67

None of these documents submitted by petitioner indicate an amount in excess of the P50,000.00 prayed
for by respondents Revilla spouses as actual damages in their complaint. Thus, the basis for
the P12,000,000.00 value raised during pre-trial is unclear. Based on the complaint, respondents Revilla
spouses paid the correct docket fees computed from the amounts in their prayer.
III.
The third issue involves the reinstatement of respondents Revilla spouses in the property and
reconveyance of its tax declaration in their favor.
Petitioner argues that antichresis is a formal contract that must be in writing in order to be
valid. Respondents Revilla spouses were not able to prove the existence of the alleged antichresis
contract. On the other hand, the sale of the property to petitioner was established by the "Kasulatan ng
Bilihan ng Lupa" and the testimony of Rosita Castillo, the second wife of the previous owner, Felimon
Castillo.
68

69

We affirm the lower courts order of reinstatement and reconveyance of the property in favor of
respondents Revilla spouses.

Page 6 of 19

Respondents Revilla spouses complaint sought "to annul the sales and transfers of title emanating from
Tax Declaration No. 7971 registered in their name involving a 15,000-square[-]meter unregistered land . . .
with prayer for reconveyance and claims for damages." There was no prayer to declare the purported
contract of sale as antichresis. Thus, respondents Revilla spouses neither discussed nor used the term
"antichresis" in their comment and memorandum before this court. They focused on the nature of their
complaint as one for annulment of titles on the ground of forgery. At most, the trial courts summary of
respondents Revilla spouses evidence described the parties agreements as follows:
70

71

72

Plaintiffs evidence and the testimony of plaintiff Alfredo Revilla tend to indicate that plaintiffs are the
owners in fee simple of a 15,000-square[-]meter unregistered land, located at Brgy. Adlas, Silang, Cavite.
Their ownership being evidenced by Tax Declaration No. 7971, s. 1980 (Exh. "A"). Sometime in 1981,
plaintiffs needed money for the travel and deployment of plaintiff Alfredo to Saudi Arabia. Plaintiff Paz
Revilla sought financial help from defendant Cotoner-Zacarias from whom she was able to obtain a loan
but secured with and by way of mortgage of the subject property. The parties further agreed that
defendant Cotoner Zacarias would take possession of the subject property and cultivate it with the
earnings therefrom to be used to pay-off the loan and the annual realty taxes on the land.It was their
agreement with defendant Cotoner Zacarias that the latter will rent the subject property and with that
agreement, the lease started sometime in 1981 and plantiffs got from defendant Cotoner-Zacarias the
amount of Php3,000.00 as rental for the first year, 1981, with no specific agreement as to the period
covered by such rental[.] (Emphasis supplied)
73

Article 2132 of the Civil Code provides that "[b]y the contract of antichresis the creditor acquires the right
to receive the fruits of an immovable of his debtor, with the obligation to apply them to the payment of the
interest, if owing, and thereafter to the principal of his credit."
Thus, antichresis involves an express agreement between parties such that the creditor will have
possession of the debtors real property given as security, and such creditor will apply the fruits of the
property to the interest owed by the debtor, if any, then to the principal amount.
74

The term, antichresis, has a Greek origin with "anti (against) and chresis (use) denoting the action of
giving a credit against the use of a property."
75

Historically, 15th century B.C. tablets revealed that "antichresis contracts were commonly employed in the
Sumerian and Akkadian Mesopotamian cultures." Antichresis contracts were incorporated in Babylonian
law, modifying and combining it with that of mortgage pledge. Nearing the end of the classical period,
antichresis contracts entered Roman law that "adopted the convention that the tenant usufruct had to be
exactly compensated by the interest on the lump sum payment." During the middle ages, canon law
banned antichresis contracts for being a form of usury. These contracts only reappeared in the 1804
Napoleonic Code that influenced the laws of most countries today. It had been observed that "antichresis
contracts coexist with periodic rent contracts in many property markets."
76

77

78

79

80

81

In the Civil Code, antichresis provisions may be found under Title XVI, together with other security
contracts such as pledge and mortgage.
Antichresis requires delivery of the property to the antichretic creditor, but the latter cannot ordinarily
acquire this immovable property in his or her possession by prescription.
82

Similar to the prohibition against pactum commissorium since creditors cannot "appropriate the
thingsgiven by way of pledge or mortgage, or dispose of them," an antichretic creditor also cannot
appropriate the real property in his or her favor upon the non-payment of the debt.
83

84

85

Antichresis also requires that the amount of the principal and the interest be in writing for the contract to
be valid.
86

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However, the issue before us does not concern the nature of the relationship between the parties, but the
validity of the documents that caused the subsequent transfers of the property involved.
The reinstatement of the propertyin favor of respondents Revilla spouses was anchored on the lower
courts finding that their signatures as sellers in the "Kasulatan ng Bilihan ng Lupa" were forged.
This court has held that the "question of forgery is one of fact." Well-settled is the rule that "[f]actual
findings of the lower courts are entitled great weight and respect on appeal, and in fact accorded finality
when supported by substantial evidence on the record."
87

88

The Court of Appeals agreed with the finding of the trial court that the signature of Alfredo Revilla in the
"Kasulatan ng Bilihan ng Lupa" was forged:
It was convincingly found by the court a quo that the Kasulatan ng Bilihan ng Lupaor Deed of Sale
covering the subject property allegedly executed by the Spouses Revilla in favorof Zacarias was spurious,
as the trial court, after relying on the report of the handwriting experts of the National Bureau of
Investigation (NBI) saying that "there exist significant differences in handwriting characteristics/habits
between the questioned and the standard/sample signatures ALFREDO REVILLA such as in the manner
of execution of strokes, structural pattern of letters/elements, and minute identifying details", as well as the
trial courts own visual analysis of the document and the sample signatures of plaintiff-appellee Alfredo,
clearly showed that his signature on the said Kasulatan ng Bilihan ng Lupawas indeed forged.
89

Petitioner contends that the lower courts never declared as falsified the signature of Alfredos wife, Paz
Castillo-Revilla. Since the property is conjugal in nature, the sale as to the one-half share ofPaz CastilloRevilla should not be declared as void.
90

The transaction took place before the effectivity of the Family Code in 2004. Generally, civil laws have no
retroactive effect. Article 256 of the Family Code provides that "[it] shall have retroactive effect insofar as
it does not prejudice or impair vested or acquired rights in accordance with the Civil Code or other laws."
91

Article 165 of the Civil Code states that "[t]he husband is the administrator of the conjugal partnership."
Article 172 of the Civil Code provides that "[t]he wife cannot bind the conjugal partnership without the
husbands consent, except incases provided by law." In any case, the Family Code also provides as
follows:
92

Art. 96. The administration and enjoyment of the community property shall belong to both spouses jointly.
In case of disagreement, the husbands decision shall prevail, subject to recourse to the court by the wife
for proper remedy, which must be availed of within five years from the date of the contract implementing
such decision.
In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the
common properties, the other spouse may assume sole powers of administration. These powers do not
include disposition or encumbrance without authority of the court or the written consent of the other
spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void.
However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and
the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or
authorization by the court before the offer iswithdrawn by either or both offerors. (Emphasis supplied)
Thus, as correctly found by the Court of Appeals, "assuming arguendo that the signature of plaintiffappellee Paz on the Kasulatan ng Bilihan ng Lupawas not forged, her signature alone would still not bind
the subject property, it being already established that the said transaction was made without the consent
of her husband plaintiff-appellee Alfredo."
93

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Lastly, petitioner argues that she has no obligation to prove the genuineness and due execution of the
"Kasulatan ng Bilihan ng Lupa" considering it is a public document.
94

The trial court found otherwise. Atty. Diosdado de Mesa, who allegedly notarized the "Kasulatanng Bilihan
ng Lupa," was not a commissioned notary public. The trial court discussed as follows:
Furthermore, it was discovered that the notary public who purportedly notarized the "Kasulatanng Bilihan
ng Lupa" has not been registered notary public in the province of Cavite in 1979 nor at present. The
record bears out various Certifications to prove there is no available record on file with the Office of the
Clerk of Court, Regional Trial Court, Cavite City of a Commission/Order appointing Atty. Diosdado de
Mesa, the lawyer who notarized the subject document, as Notary Public for the Province and City of
Cavite (Exh. "Y" to "Y-2"); Certification from the Records Management and Archives Office, Manila that no
copy is on file with the said office of the Deed of Sale allegedly executed by plaintiffs before Notary Public
Diosdado de Mesa, for and within Imus, Cavite, acknowledged as Doc. No. 432, Page No. 45, Book No.
VIII, Series of 1979 (Exh. "Z" to "Z-1"); Certification issued by Clerk of Court, Atty. Ana Liza M. Luna,
Regional Trial Court, Tagaytay City that there is no available record on file of a Commission/Order
appointing Atty. Diosdado de Mesa as Notary Public for the Province and Cities of Tagaytay, Cavite and
Trece Martires in 1979 (Exh. "AA" to"AA-2"); Certification issued by Clerk of Court, Atty. Jose O, Lagao,
Jr., Regional Trial Court, Multiple Sala, Bacoor, Cavite that there isno available record on file of a
Commission/Order appointing Atty. Diosdado de Mesa as Notary Public for the Province and City of Cavite
(Exh. "BB" to "BB-2"); and Certification issued by Clerk of Court, Atty. Regalado E. Eusebio, Regional Trial
Court, Multiple Sala, Imus, Cavite that there is no available record on file of a Commission/Order
appointing Atty. Diosdado de Mesa as Notary Public for the Province of Cavite (Exh. "CC" to "CC2"). (Emphasis supplied).
95

Petitioner contends that the Sun spouses were buyers in good faith for value, thus, the court erred in
ordering reinstatement of the property in favor of respondents Revilla spouses.
96

This court has held that "the rule in land registration law that the issue of whether the buyer of realty is in
good or bad faith is relevant only where the subject of the sale is registeredland and the purchase was
made from the registered owner whose title to the land is clean[.]" Our laws have adopted the Torrens
system to strengthen public confidence in land transactions: [T]he Torrens system was adopted in this
country because it was believed to be the most effective measure to guarantee the integrity of land titles
and to insure their indefeasibility once the claim of ownership is established and recognized. If a person
purchases a piece of land on the assurance that the sellers title thereto is valid, he should not run the risk
of losing his acquisition. If this were permitted, public confidence in the system would be eroded and land
transactions would have to be attended by complicated and not necessarily conclusive investigations and
proof of ownership.
97

98

Necessarily, those who rely in good faith on a clean title issued under the Torrens system for registered
lands must be protected. On the other hand, those who purchase unregistered lands do so at their own
peril.
1wphi1

99

This good faith argument cannot be considered as this case involves unregistered land. In any case, as
explained by respondents Revilla spouses in their memorandum, this is a defense personal to the Sun
spouses and cannot be borrowed by petitioner. The Sun spouses no longer raised this argument on
appeal, but only made a partial appeal regarding legal interest on the award.
100

101

WHEREFORE, this petition is DENIED for lack of merit. The decision of the Court of Appeals dated August
13, 2009 is AFFIRMED.
SO ORDERED.

Page 9 of 19

MARVIC
Associate Justice

M.V.F.

LEONEN

WE CONCUR:

2. G.R. No. 156205, November 12, 2014

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE REGIONAL EXECUTIVE DIRECTOR,
REGION IV, DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, Petitioner, v.MARJENS
INVESTMENT CORPORATION AND PATROCINIO P. VILLANUEVA, Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
This petition for review on certiorari seeks to reverse the November 19, 2002 Decision [1 of the Court of
Appeals in CA-G.R. SP No. 50023, which dismissed petitioner Republic of the Philippines' petition on the
ground that the disputed property had already been segregated and classified as private property and no
longer form part of the public domain.
Background
The Court of Appeals gave a short background on the subject property.
In Land Registration Case No. 52, G.L.R.O. Rec. No. 3454, entitled, "Hammon H. Buck, et al. vs. Director
of Lands," the then Court of First Instance of Batangas rendered a Decision dated March 30, 1951 x x x
granting the application for registration of several parcels of land in favor of the applicants therein,
Hammon
H.
Buck,
et
al.
In the said judgment, it was established that the lands described in Plans Psu-118922 and 114430 were
originally owned by Rita Vda. de Ilustre since 1890. In 1923, the parcels of land applied for were
purchased by Donato Punzalan. Later, the lots under Plan Psu-114430 were purchased from Donato
Punzalan by Agustin Canoso and Gregorio Decepeda and in consideration of the survey and registration
thereof, Lots 1 and 2, Plan Psu-114430 were ceded to Hammon H. Buck. This was to become the basis of
Hammon H. Buck's application for registration under Land Registration Case No. 52.
As a consequence of the final and executory decision in Land Registration Case No. 52, Decree No. 6610
was awarded to Hammon H. Buck which finally led to the issuance in his name of Original Certificate of
Title No. 0-669 x x x on February 18, 1952.2
The Facts of the Case
On December 22, 1998, or almost 46 years after the issuance of Original Certificate of Title (OCT) No. 0669, petitioner Republic, represented by the Region IV Regional Executive Director of the Department of
Environment and Natural Resources (DENR), filed a petition before the Court of Appeals for annulment of
judgment, cancellation of title, and reversion against respondents Marjens Investment Corporation
(Marjens) and Patrocinio Villanueva (Villanueva), the Register of Deeds for the Province of Batangas
(Tanauan, Batangas), and the Regional Trial Court of LipaCity.3chanroblesvirtuallawlibrary
Petitioner, through the Office of the Solicitor General (OSG), alleges that respondents Marjens and
Villanueva appear as registered owners of a land identified as Lot 1 (LRC) Pcs-943, which is a portion of
Lots 1 and 2, plan Psu-114430 LRC (G.L.R.O.) Record No. N-3454, with an area of five thousand (5,000)
square meters, covered by Transfer Certificate of Title (TCT) No. T-18592 issued on April 7, 1976 by the
Office
of
the
Register
of
Deeds
of
Tanauan,
Batangas. 4chanroblesvirtuallawlibrary
The OSG avers that TCT No. T-18592 appears to have emanated from Original Certificate of Title (OCT)
No. 0-669 in the name of Hammon H. Buck issued by virtue of a Decision 5 dated March 30, 1951,
rendered in Land Registration Case No. 52, G.L.R.O. Record No. N-3454 of the Court of First Instance
(CFI)
of
Lipa
City,
Batangas,
Eighth
Judicial
District. 6chanroblesvirtuallawlibrary

Page 10 of 19

The OSG further alleges that upon verification through a certification 7 dated April 30, 1997 issued by the
Community Environment and Natural Resources Office (CENRO) of the DENR in Batangas City, it was
ascertained that the land covered by TCT No. T-18592 is within the unclassified public forest per Land
Classification
Control
Map No.
10
for
the
Provinces
of
Batangas
and Cavite.
The OSG argues that the land in question cannot be the subject of disposition or registration, and the trial
court did not acquire jurisdiction over said property, much less to decree the same as private property.
Therefore, the registration proceedings, the judgment in the subject case, the OCT No. O-669 issued
pursuant thereto, and all subsequent titles are null and void. The land covered by TCT No. T-18592, not
having been legally registered, remains and forms part of the public domain of the
State.8chanroblesvirtuallawlibrary
In their comment, respondents deny the OSG's allegations. They claim that their titles, their predecessors'
titles, and their mother title are issued in accordance with law, and that the property was registered and
brought under the Torrens system. Respondents contend that the subject property was already private
property even before the Spanish Crown ceded sovereignty over the Philippine Islands to the United
States
of
America.9chanroblesvirtuallawlibrary
Respondents assert that the government has lost its rights by laches and estoppel to question the validity
of the OCT No. 0-669, the proceedings in LRC Case No. 52, G.L.R.O. Record No. N-3454, and the
corresponding decree (Decree 6610) issued after almost 50 years have lapsed. They maintain that the
proceeding for its registration was made in accordance with the requirements of the law, including the
publication of notices addressed to the Solicitor General, the Director of Lands, and the Director of
Forestry, among others, in the Official Gazette (Vol. 46, No. 12, pp. 6381-6382 and Vol. 47, No. 1, pp. 438439). Despite the notices, there was no opposition from the government. 10chanroblesvirtuallawlibrary
Respondents insist that it will be most unfair and will violate their right to due process if they will again be
required to undergo another trial to establish their long continued, open, public, adverse possession and
cultivation of the property in the concept of owners as against the whole world, now that all their witnesses
are long dead, senile, or impossible to locate. They also point out that the subject property has transferred
to various parties who have been regularly assessed and paying realty taxes for several
years.11chanroblesvirtuallawlibrary
Respondents allege that the government through the Bureau of Lands had presumably issued various free
patents over the subject property that has constrained petitioners to file a petition for annulment based on
these free patent titles that overlap with the respondents' title. They questioned why the government
issued free patents over the subject property when it believed that the same is part of an unclassified
public forest. They even suggested to implead the individuals with titles overlapping with their titles for a
complete determination of the issues in the case and to avoid unnecessary and wasteful duplication of
valuable
time
and
resources
of
the
OSG. 12chanroblesvirtuallawlibrary
To bolster its argument, respondents cited that there are many real estate developments going on near or
around the area where the property is located, one of which is the Splendido Gardens, a resort and golf
course. Respondents speculated how the said developments proceeded if the property covered therein is
within the unclassified public forest as the government claims, and that is assuming all the requisite
government approvals have been secured by the developers. 13chanroblesvirtuallawlibrary
Respondents availed of two modes of discovery, and moved to serve written interrogatories to parties and
for the production of documents.14 The Court of Appeals granted the motions, 15 to which the petitioner filed
its comments. The Court of Appeals likewise directed both parties to file their respective memoranda, after
which the case was submitted for decision.16chanroblesvirtuallawlibrary
The Court of Appeals Decision
On November 19, 2002, the Court of Appeals dismissed the petition as follows:chanroblesvirtuallawlibrary
IN VIEW OF THE FOREGOING,
cost.17ChanRoblesVirtualawlibrary

the

instant

petition

is

ordered DISMISSED.

No

The Court of Appeals applied the case of Cariho v. Insular Government of the Philippine Islands,18which

Page 11 of 19

recognized private ownership of lands already possessed or held by individuals under claim of ownership
as far back as testimony or memory goes and therefore never to have been public land that Spain could
bequeath
to
the
United
States
of
America.
Reiterating the CFI Decision, the Court of Appeals held that the subject properties under Plan Psu-114430
were originally owned by Rita Vda. de Ilustre since 1890 before the Treaty of Paris. Reckoned from such
time, under the Cario ruling, the subject property had already ceased to be public, had been appropriated
into private ownership, and therefore excluded from the "public domain" ceded by Spain to the United
States
of
America
in
the
Treaty
of
Paris
of
1898. 19chanroblesvirtuallawlibrary
The Court of Appeals pronounced that the CFI of Batangas is unmistakably equipped with jurisdiction and
authority to legally adjudicate the land applied for in Registration Case No. 52 in favor of the applicants.
Consequently, Decree 6610, OCT No. O-669, and TCT No. T-18592, in respondents' name, must be
upheld
as
valid
issuances
and
documents
of
title. 20chanroblesvirtuallawlibrary
Further, the Court of Appeals said that there are still other reasons in rejecting the arguments of the
petitioner that the controversial lot and title in this petition still forms part of the public domain. By its own
act and admission in the answer to the written interrogatories, petitioner confessed to have issued several
Environmental Compliance Certificates (ECCs) to projects within Land Classification Control Map (LCCM)
No. 10, although identification is not feasible as the issuance of ECCs began in 1982, pursuant to
Presidential Decree No. 1586 dated June 11, 1978, among others. 21 The foregoing admissions militate
against petitioner's assertion and cast serious doubts on what the DENR certification contains. The Court
of Appeals said that it is inconceivable how petitioner can claim that the subject land is an inalienable
forest land when it had been alienating it by the numerous grants and decrees it had
issued.22chanroblesvirtuallawlibrary
The Court of Appeals cited Republic v. Court of Appeals and Cosalan,23 wherein the Court declared that
despite the general rule that forest lands cannot be appropriated by private ownership, it had been
previously held that while the government has the right to classify portions of public land, the primary right
of a private individual who possessed and cultivated the land in good faith much prior to such classification
must be recognized and should not be prejudiced by after-events which could not have been anticipated.
Moreover, the Court of Appeals observed that LCCM No. 10 is not dated. Petitioner explained that
according to the Land Classification Department of National Mapping and Resource Information Authority
(NAMRIA), LCCM No. 10 is not dated because it is used as a control map or reference in order to
determine which land classification map is to be used. When the lot covered by TCT No. T-18592 was
plotted based on the given tie point/line, it is covered by LC Map No. 3013 under the land classification for
Batangas. LC Map No. 3013 was certified under Forest Administrative Order No. 4-1656 dated March 15,
1982. The Court of Appeals concluded that long before LC Map No. 3013 was certified, the subject
property covered by TCT No. T-18592 had already acquired the character of a private ownership before
the
reclassification
of
the
area
to
an
unclassified
forest. 24chanroblesvirtuallawlibrary
As for respondents' affirmative defenses of estoppel and laches, the Court of Appeals ruled that estoppel
and laches run against the State, citing Republic v. Court of Appeals and Santos,25cralawred as
follows:chanroblesvirtuallawlibrary
The general rule is that the State cannot be put in estoppel by the mistakes or errors of its officials or
agents. However, like all general rules, this is also subject to exceptions,viz.:chanRoblesvirtualLawlibrary
Estoppels against the public are little favored. They should not be invoked except in ra[r]e and unusual
circumstances, and may not be invoked where they would operate to defeat the effective operation of a
policy adopted to protect the public. They must be applied with circumspection and should be applied only
in those special cases where the interests of justice clearly require it. Nevertheless, the government must
not be allowed to deal dishonorably or capriciously with its citizens, and must not play an ignoble part or
do a shabby thing; and subject to limitations x x x, the doctrine of equitable estoppel may be invoked
against public authorities as well as against private individuals. (Citations omitted.)
Unconvinced, the OSG filed this petition for review on certiorari before the Court assigning the following as
errors:cralawlawlibrary
1) The Court of Appeals' finding that the property covered by TCT No. T- 18592 had become private
property prior to the classification of the area to an unclassified forest, and

Page 12 of 19

2) The Court of Appeals' ruling that the instant case is an exception to the general rule that laches and
estoppel do not run against the State.[26chanroblesvirtuallawlibrary
The Court's Ruling
The

petition

is

denied.

First Issue: Whether or not the subject property covered by TCT No. T-18592 is a private property
or
part
of
the
public
domain.
The case of Cario v. Insular Government of the Philippine Islands 27 states that "[prescription is mentioned
again in the royal cedula of October 15, 1754, cited in 3 Philippine, 546; '[w]here such possessors shall
not be able to produce title deeds, it shall be sufficient if they shall show that ancient possession, as a
valid title by prescription.' It may be that this means possession from before 1700; but, at all events, the
principle is admitted. As prescription, even against Crown lands, was recognized by the laws of Spain we
see no sufficient reason for hesitating to admit that it was recognized in the Philippines in regard to lands
over
which
Spain
had
only
a
paper
sovereignty."
The United States Supreme Court through Mr. Justice Oliver Wendell Holmes pronounced in
the Cariocase28 that "every presumption is and ought to be against the government in a case like the
present. It might, perhaps, be proper and sufficient to say that when, as far back as testimony or memory
goes, the land has been held by individuals under a claim of private ownership, it will be presumed to have
been held in the same way from before the Spanish conquest, and never to have been public land."
The records did not categorically state that Rita Vda. de Ilustre had Spanish title over the subject property.
But by virtue of her long continued, open, public, adverse possession and cultivation of the property in the
concept of owner as against the whole world she is deemed to have acquired ownership over the subject
property.
As for respondents, it is undisputed that the property covered by TCT No. T-18592 traces its title to the
property originally owned by Rita Vda. de Ilustre since 1890. From her it passed on to several hands until
it was transferred to Hammon H. Buck, who successfully registered it in his name on February 18, 1952.
From 1890, respondents' predecessors in interest had been in peaceful, open, continuous, exclusive,
adverse, and notorious possession in the concept of an owner of the subject property including the portion
covered by TCT No. T-18592. Following the Cario ruling, the subject property had been a private land
and excluded from the public domain since 1890 prior to the signing of the Treaty of Paris on December
10, 1898. Therefore, it is not part of the public domain that passed on from Spain to the United States of
America.
For the same reason, it is also not part of the unclassified public forest as petitioner claims. InRepublic v.
Court of Appeals and Cosalan, 29 the Court held that "[d]espite the general rule that forest lands cannot be
appropriated by private ownership, it has been previously held that 'while the Government has the right to
classify portions of public land, the primary right of a private individual who possessed and cultivated the
land in good faith much prior to such classification must be recognized and should not be prejudiced by
after-events which could not have been anticipated...Government in the first instance may, by reservation,
decide for itself what portions of public land shall be considered forestry land, unless private interests have
intervened
before
such
reservation
is
made'"
The map (LC Map No. 3013), which is the basis of petitioner's claim, is inexistent at the time Hammon H.
Buck was issued an original certificate of title. Therefore, the subject property had been a private property
before it was classified. Thus, the Court agrees with the Court of Appeals' findings and upholds the private
character
of
the
subject
property.
The Court also agrees with the Court of Appeals' observation that petitioner admitted in its answer to the
written interrogatories that the DENR issued several ECCs to projects within LCCM No. 10. The
admissions go against petitioner's assertion and cast serious doubts on what the DENR certification
contains. The Court of Appeals said, to which the Court concurs, that it is inconceivable how petitioner can
claim that the subject land is an inalienable forest land when it had been alienating it by the numerous
grants and decrees it had issued. Quoted hereunder are excerpts from petitioner's answer to respondents'
written interrogatories.

Page 13 of 19

10. Have you issued any Environmental Clearance Certificate (ECC) for any property or development
project of any project situated within (and/or where any portion of such project is located within) LC Map
CM-10 for the Province of Batangas and Cavite mentioned in Annex "D" of your petition?
ANSWER:

Yes.

11. If your answer to the immediately preceding interrogatory is in the affirmative, please identify such
ECC
and/or
the
project.
ANSWER: The DENR Region IV had already issued several Environmental Compliance Certificates
(ECC) to projects within [the] Land Classification Control Map (LCCM) 10. Identification of such projects is
not feasible considering that the issuance of the ECCs began in 1982 pursuant to Presidential Decree No.
1586 dated June 11, 1978 and the said map covers the two (2) Provinces of Batangas and Cavite. The
issuance of the ECCs in 1982 up to 1992 was previously done by the defunct National Environmental
Protection Council (NEPC), then by the Environmental Management Bureau (EMB) and subsequently,
upon the implementation of Executive Order No. 192, the Department of Environment and Natural
Resources (DENR) Reorganization Law, it was issued by the DENR-EMB, however, there were projects
within the jurisdiction of the DENR Regional Office and the issuance of the ECCs was devolved to the
latter
office.
x

16. Has the government issued any free patents, sales patents, or homestead patents, under the
provisions of the Public Land Act (CA No. 141, as amended), over any property located within (or including
within its boundary any portion thereof) the area covered by LC Map CM-10 for the Province of Batangas
and
Cavite?
ANSWER:

Yes.

17. If your answer to the immediately preceding interrogatory is in the affirmative, please identify such free
patents,
sales
patents
and
homestead
patents.
ANSWER: It is impossible to identify all the patents issued within the area covered by LCCM-10
considering that thousands were already issued within the Provinces of Cavite and Batangas since the
approval of Commonwealth Act No. 141, as amended, otherwise known as the Public Land Act on
November 7, 1936.30ChanRoblesVirtualawlibrary
From the foregoing, the Court sustains the Court of Appeals' ruling that the CFI of Batangas has
jurisdiction and authority to legally adjudicate the land applied for in Registration Case No. 52 in favor of
the applicants. Consequently, Decree 6610, OCT No. 0-669, and TCT No. T-18592, in respondents' name,
must
be
upheld
as
valid
issuances
and
documents
of
title.
Second Issue: Whether or not the government is barred by laches and estoppel.
Laches has been defined as the "failure or neglect for an unreasonable and unexplained length of time to
do that which, by observance of due diligence, could or should have been done earlier. It is negligence or
omission to assert a right within a reasonable time, warranting the presumption that the party entitled to
assert his right either has abandoned or declined to assert it." 31chanroblesvirtuallawlibrary
The following elements must be present in order to constitute laches: (a) conduct on the part of the
defendant, or of one under whom he claims, giving rise to the situation complained of; (b) delay in
asserting complainant's rights after he had knowledge of defendant's acts and after he has had the
opportunity to sue; (c) lack of knowledge or notice by defendant that the complainant will assert the right
on which he bases his suit; and (d) injury or prejudice to the defendant in the event the relief is accorded
to
the
complainant.32chanroblesvirtuallawlibrary
We find it unnecessary to discuss further this issue in view of our ruling that Decree No. 6610, OCT No. 0669, and TCT No. T-18592 registered in the name of respondents were validly issued.
WHEREFORE, premises considered, the Court of Appeals Decision dated November 19, 2002 in CA-G.R.
SP
No.
50023
is AFFIRMED.

Page 14 of 19

SO ORDERED.

3. G.R. No.198878

October 15, 2014

RESIDENTS OF LOWER ATAB & TEACHERS' VILLAGE, STO. TOMAS PROPER BARANGAY,
BAGUIO CITY, represented by BEATRICE T. PULAS, CRISTINA A. LAPP AO. MICHAEL MADIGUID,
FLORENCIO
MABUDYANG
and
FERNANDO
DOSALIN, Petitioners,
vs.
STA. MONICA INDUSTRIAL & DEVELOPMENT CORPORATION, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari seeks to set aside: 1) the August 5, 2011 Decision of the Court of
Appeals (CA) in CA-G.R. CV No. 84561 which affirmed the December 6, 2004 Decision of the Regional
Trial Court of Baguio City (Baguio RTC), Branch 6 in Civil Case No. 4946-R; and 2) the CA October 3,
2011 Resolution denying herein petitioners' Motion for Reconsider.
1

Factual Antecedents
In May 2001, petitioners residents of Lower Atab & Teachers Village, Sto. Tomas Proper Barangay,
Baguio City filed a civil case for quieting of title with damages against respondent Sta. Monica Industrial
and DevelopmentCorporation. The case was docketed as Civil Case No. 4946-R and assigned to Branch
59 of the Baguio RTC. The Complaint in said case essentially alleged that petitioners are successors and
transferees-in-interest of Torres, the supposed owner of an unregistered parcel of land in Baguio City (the
subject property, consisting of 177,778 square meters) which Torres possessed and declared for tax
purposes in 1918; that they are in possession of the subject property in the concept of owner, declared
their respective lots and homes for tax purposes, and paid the real estate taxes thereon; that in May 2000,
respondent began to erect a fence on the subject property, claiming that it is the owner of a large portion
thereof by virtue of Transfer Certificate of Title No. T-63184 (TCT No. T-63184); that said TCT No. T63184 is null and void, as it was derived from Original Certificate of Title No. O-281 (OCT No. O-281),
which was declared void pursuant to Presidential Decree No. 1271 (PD 1271) and in the decided case of
Republic v. Marcos; and that TCT No. T-63184 is a cloud upon their title and interests and should
therefore be cancelled. Petitioners thus prayed that respondents TCT No. T-63184 be surrendered and
cancelled; that actual, moral and exemplary damages, attorneys fees, legal expenses, and costs be
awarded in their favor; and finally, that injunctive relief be issued against respondent to prevent it from
selling the subject property.
6

10

11

In its Answer with Special Affirmative Defenses and Counterclaim, respondent claimed that petitioners
have no cause of action; that TCT No. T- 63184 is a valid and subsisting title; that the case for quieting of
title constitutes a collateral attack upon TCT No. T-63184; and that petitioners have no title to the subject
property and are mere illegal occupants thereof. Thus, it prayed for the dismissal of Civil Case No. 4946-R
and an award of exemplary damages, attorneys fees, litigation expenses, and costs in its favor.
12

In their Pre-Trial Brief and Memorandum, petitioners acknowledged that while they declared their
respective lots for tax purposes, they applied for the purchase of the same through Townsite Sales
applications with the Department of Environment and Natural Resources (DENR).
13

14

Ruling of the Regional Trial Court

Page 15 of 19

After trial, the Baguio RTC issued a Decision dated December 6, 2004, the dispositive portion of which
reads:
15

WHEREFORE, Judgment is hereby rendered in favor of defendant Sta. Monica Industrial and
Development Corporation and against the plaintiffs, as follows:
1. Dismissing the Complaint for Quieting of Title and Damages with Prayer for a Writ of Preliminary
Injunction of plaintiffs;
2. Dismissing likewise the counterclaim for Damages and attorneys fees of defendant corporation
since it has not been shown that the plaintiffs acted in bad faith in filing the Complaint. Without
pronouncement as to costs.
SO ORDERED.

16

The trial court held that Civil Case No. 4946-R constitutes a collateral attack upon respondents TCT No.
T-63184, which became indefeasible after one year from the entry of the decree of registration thereof. It
held that if it is claimed that respondents title is void, then a direct proceeding should have been filed by
the State to annul it and to secure reversion of the land; petitioners have no standing to do so through a
quieting of title case. The trial court added that TCT No. T-63184 is a subsisting title; its validity was
confirmed through the annotation therein by the Baguio City Register of Deeds Entry No. 184804-21159 that TCT No. T-27096, from which TCT No. T-63184 was derived, was validated by the PD 1271
Committee in a May 9, 1989 Resolution; that petitioners could not present any title to the subject property
upon which to base their case for quieting of title, and have failed to show during trial that they have a
cause of action against respondent.
17

Petitioners filed a Motion for Reconsideration, but the trial court denied the same in a January 17, 2004
Resolution.
18

19

Ruling of the Court of Appeals

In an appeal to the CA which was docketed as CA-G.R. CV No. 84561, petitioners insisted that they have
a cause of action against respondent for quieting of title and damages; that Civil Case No. 4946-R is not a
collateral attack upon respondents title; that Civil Case No. 4946-R is not a case for reversion and
annulment of title which could only be filed by the State; and that the trial court erred in finding that
respondents title was validated in accordance with law.
On August 5, 2011, the CA issued the assailed Decision affirming the trial court, thus:
In this case, plaintiffs-appellants are without any title to be cleared of or to be quieted nor can they be
regarded as having equitable title over the subject property. Ballantines Law Dictionary defines an
equitable title as follows:
20

"A title derived through a valid contract or relation, and based on recognized equitable principles; the right
in the party, to whom it belongs, to have the legal title transferred to him (15 Cyc. 1097; 16 Id. 90). In order
that a plaintiff may draw to himself an equitable title, he must show that the one from whom he derives his
right had himself a right to transfer. x x x"
xxxx
In the instant case, plaintiffs-appellants cannot find refuge in the tax declarations and receipts under their
names considering that the same are not incontrovertible evidence of ownership.

Page 16 of 19

Moreover, plaintiffs-appellants act of questioning the validity of the title of the defendantappellee constitutes a collateral attack and under Section 48 of P.D. 1529, "a certificate of title shall not
be subject to collateral attack. x x x"
21

xxxx
Meantime, it is meet to point out that P.D. 127[1] invoked by plaintiffsappellants themselves, specifically
provides under Section 6 (paragraph 2) thereof that "the Solicitor General shall institute such actions or
suits as may be necessary to recover possession of lands covered by all void titles not validated under
this Decree." Hence, the Office of the Solicitor General, being mandated by law, must be the proper party
to institute actions to recover lands covered by void titles under the said decree x x x.
xxxx
As regards the validation of TCT No. T-63184 x x x, no error was committed by the Court a quo in ruling
that the same is in accordance with law. It is important to note that the validation of the subject TCT was
never disputed by the Register of Deeds or any other government agency. Moreover, there is no showing
that the TCT of the defendant-appellee and the OCT wherein it was derived were declared null and void by
virtue of Pres. Decree No. 1271. While the TCT of the defendant-appellee was issued under L.R.C. Case
No. 1, Record No. 211, it was validated in accordance with law in Entry No. 184804-21-159 annotated at
the dorsal side of the subject title.
xxxx
WHEREFORE, premises considered, the Decision dated December 6, 2004 of the Regional Trial Court,
Branch 6, Baguio City is AFFIRMED in toto.
SO ORDERED.

22

Petitioners moved for reconsideration, but in its October 3, 2011 Resolution, the CA stood its ground.
Hence, the instant Petition.
Issues
Petitioners raise the following issues in this Petition:
1. The Trial Court and the Court of Appeals erred in finding that the Petitioners x x x have no cause
of action.
2. The Trial Court and the Court of Appeals erred in finding that the action is a collateral attack on
the Torrens Title of respondent Corporation.
3. The Trial Court and the Court of Appeals erred in finding that the present action is to annul the
title of respondent Corporation due to fraud, [thus] it should be the Solicitor General who should
file the case for reversion.
4. The Trial Court and the Court of Appeals erred in finding that the validation of TCT No. T-63184
registered in the name of respondent Corporation was in accordance with law.
23

Petitioners Arguments
In their Petition and Reply, petitioners seek a reversal of the assailed CA dispositions and the nullification
of respondents TCT No. T-63184 so that said title shall not "hinder the approval of the Townsite Sales
24

Page 17 of 19

Application of the [p]etitioners by the [DENR]-Cordillera Administrative Region and stop the harassment
being done by the Corporation on the [p]etitioners x x x." They argue that they have equitable title over
the subject property, having possessed the same for many years and obtained the rights of their
predecessor Torres; that Civil Case No. 4946-R is not a collateral attack upon TCT No. T-63184, as said
title is null and void by virtue of PD 1271 and the ruling in Republic v. Marcos; that there is no need to file a
reversion case since TCT No. T-63184 has been effectively declared void, and respondent is not in
possession of the subject property; and finally, that Entry No. 184804-21-159 cannot have the effect of
validating TCT No. T-63184, because PD 1271 itself states that only certificates of title issued on or before
July 31, 1973 are considered valid. Since OCT No. O-281 the predecessor title of TCT No. T-63184
was issued only on January 28, 1977, it is thus null and void, and all other titles subsequently issued
thereafter, including TCT No. T-63184, are invalid as well.
25

26

Respondents Arguments
On the other hand, respondents Comment simply reiterates the pronouncement of the CA.
Consequently, it prays for the denial of the instant Petition.
27

Our Ruling
The Court denies the Petition.
For an action to quiet title to prosper, two indispensable requisites must be present, 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."
28

"Legal title denotes registered ownership, while equitable title means beneficial ownership."

29

Beneficial ownership has been defined as ownership recognized by law and capable of being enforced in
the courts at the suit of the beneficial owner. Blacks Law Dictionary indicates that the term is used in two
senses: first, to indicate the interest of a beneficiary in trust property (also called "equitable ownership");
and second, to refer to the power of a corporate shareholder to buy or sell the shares, though the
shareholder is not registered in the corporations books as the owner. Usually, beneficial ownership is
distinguished from naked ownership, which is the enjoyment of all the benefits and privileges of
ownership, as against possession of the bare title to property.
30

Petitioners do not have legal or equitable title to the subject property. Evidently, there are no certificates of
title in their respective names. And by their own admission in their pleadings, specifically in their pre-trial
brief and memorandum before the trial court, they acknowledged that they applied for the purchase of the
property from the government, through townsite sales applications coursed through the DENR. In their
Petition before this Court, they particularly prayed that TCT No. T-63184 be nullified in order that the said
title would not hinder the approval of their townsite sales applications pending with the DENR.Thus,
petitioners admitted that they are not the owners of the subject property; the same constitutes state or
government land which they would like to acquire by purchase. It would have been different if they were
directly claiming the property as their own as a result of acquisitive prescription, which would then give
them the requisite equitable title. By stating that they were in the process of applying to purchase the
subject property from the government, they admitted that they had no such equitable title, at the very
least, which should allow them to prosecute a case for quieting of title.
In short, petitioners recognize that legal and equitable title to the subject property lies in the State. Thus,
as to them, quieting of title is not an available remedy.
1wphi1

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Lands within the Baguio Townsite Reservation are public land. Laws and decrees such as PD 1271 were
passed recognizing ownership acquired by individuals over portions of the Baguio Townsite Reservation,
but evidently, those who do not fall within the coverage of said laws and decrees the petitioners included
cannot claim ownership over property falling within the said reservation. This explains why they have
pending applications to purchase the portions of the subject property which they occupy; they have no
legal or equitable claim to the same, unless ownership by acquisitive prescription is specifically authorized
with respect to such lands, in which case they may prove their adverse possession, if so. As far as this
case is concerned, the extent of petitioners possession has not been sufficiently shown, and by their
application to purchase the subject property, it appears that they are not claiming the same through
acquisitive prescription.
31

The trial and appellate courts are correct in dismissing Civil Case No. 4946-R; however, they failed to
appreciate petitioners admission of lack of equitable title which denies them the standing to institute a
case for quieting of title. Nevertheless, they are not precluded from filing another case a direct
proceeding to question respondents TCT No. T-63184; after all, it appears that their townsite sales
applications are still pending and have not been summarily dismissed by the government which could
indicate that the subject property is still available for distribution to qualified beneficiaries. If TCT No. T63184 is indeed null and void, then such proceeding would only be proper to nullify the same. It is just that
a quieting of title case is not an option for petitioners, because in order to maintain such action, it is
primarily required that the plaintiff must have legal or equitable title to the subject property a condition
which they could not satisfy.
With the conclusion arrived at, the Court finds no need to resolve the other issues raised.
WHEREFORE, the Petition is DENIED. The assailed August 5, 2011 Decision and October 3, 2011
Resolution of the Court of Appeals in CA-G.R. CV No. 84561 are AFFIRMED.
SO ORDERED.
MARIANO
Associate Justice

C.

DEL

CASTILLO

WE CONCUR:

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