[G.R.

No.
178635,
April
11
:
2011]
SERVILLANO E. ABAD, PETITIONER, VS. OSCAR C. FARRALES AND DAISY C. FARRALES-VILLAMAYOR,
RESPONDENTS.
DECISION
ABAD, J.:
This case is about a) the need, when establishing the jurisdiction of the court over an action for
forcible entry, for plaintiff to allege in his complaint prior physical possession of the property and b)
the need for plaintiff to prove as well the fact of such prior physical possession.
The
Facts
and
the
Case
Petitioner Servillano Abad claims that on August 6, 2002 he and his wife, Dr. Estrella E. GavilanAbad, bought a 428-square meter registered property on 7 Administration St., GSIS Village, Project
8, Quezon City,[1] from Teresita, Rommel, and Dennis Farrales. The latter were the wife and sons,
respectively, of the late brother of respondents Oscar Farrales (Oscar) and Daisy Farrales-Villamayor
(Daisy).[2]
Teresita
operated
a
boarding
house
on
the
property.[3]
Because the Abads did not consider running the boarding house themselves, they agreed to lease
the property back to Teresita for P30,000.00 a month so she could continue with her business. [4]
But, although the lease had a good start, Teresita suddenly abandoned the boarding house, [5]
forcing the Abads to take over by engaging the services of Bencio Duran, Teresita's helper, to
oversee
the
boarding
house
business.[6]
On December 7, 2002, Dr. Abad went to the boarding house to have certain damage to some toilets
repaired. While she was attending to the matter, she also hired house painters to give the boarding
house fresh coat of paint.[7] On December 8, 2002 Oscar and Daisy came, accompanied by two
men, and forcibly took possession of the boarding house. Frightened, the painters called the Abads
who immediately sought police help. The Abads were later appeased, however, when they learned
that
the
intruders
left
the
place.
Two days later or on December 10, 2002, the day the Abads left for abroad, Oscar and Daisy forcibly
entered and took possession of the property once again. Because of this, on March 10, 2003
petitioner Servillano Abad (Abad) filed a complaint [8] for forcible entry against the two before the
Metropolitan
Trial
Court
(MeTC)
of
Quezon
City.[9]
Oscar and Daisy vehemently denied that they forcibly seized the place. They claimed ownership of
it by inheritance. They also claimed that they had been in possession of the same from the time of
their birth.[10] That Oscar had been residing on the property since 1967 as attested to by a March
31,
2003
certification
issued
by
Barangay
Bahay
Toro. [11]
While the defendants admitted that Daisy herself ceased to reside on the property as early as 1986,
they pointed out that she did not effectively give up her possession. Oscar and Daisy further
claimed that when their parents were still alive, the latter mortgaged the property to a bank to
secure a loan. After their mother passed away, they decided to lease portions of the property to
help pay the loan. Daisy managed the operation of the boarding house. [12] To bolster their claim,
Oscar and Daisy presented copies of rental receipts [13] going back from 2001 to 2003. They would
not have been able to lease the rooms unless they were in possession. [14]
Further, Oscar and Daisy asked the MeTC to dismiss the action on the ground of failure of Abad to
show that he and his wife enjoyed prior physical possession of the property, an essential requisite in
forcible entry cases. Abad's allegation that he and his wife immediately leased the property after
they bought it was proof that they were never in possession of it for any length of time. [15]
On March 30, 2005 the MeTC rendered a decision [16] in favor of Abad, stating that Oscar and Daisy
could not acquire ownership of the property since it was registered. And, as owner, Abad was
entitled
to
possession.
Disagreeing with the MeTC, Oscar and Daisy went up to the Regional Trial Court (RTC) of Quezon
City. In a decision17 dated October 26, 2005, the RTC affirmed the decision of the MeTC in its
totality. It held that Oscar and Daisy could no longer impugn the jurisdiction of the MeTC over the
action since they raised the ground of Abad's failure to allege prior physical possession in his
complaint for the first time on appeal. Besides, said the RTC, since the complaint alleged that
Servillano owned the property, it may be presumed that he also had prior possession of it. No
evidence
to
the
contrary
having
been
presented,
the
presumption
stood.
Abad moved for immediate execution[18] and partial reconsideration[19] of the decision with respect
to his claim for attorney's fees, exemplary damages, and reasonable rents. For their part, Oscar and
Daisy sought reconsideration[20] of the RTC decision and moved to strike out Abad's motions. [21] On
December 1, 2005 the RTC issued an Order,[22] granting Abad's motion for immediate execution that
would place him in possession and ordering the immediate release to him of the P390,000.00
supersedeas bond that Oscar and Daisy posted in the case. Further, the RTC partially reconsidered
its decision by awarding attorney's fees of P20,000.00 to Abad. Oscar and Daisy moved for the
reconsideration of this order.[23] In an Order dated December 9, 2005, the RTC denied the motion
for reconsideration filed by Oscar and Daisy of its October 26, 2005 Decision on the ground of noncompliance
with
Section
4,
Rule
15
of
the
Rules
of
Court.
Undaunted, Oscar and Daisy filed a petition for review [24] with the Court of Appeals (CA). On March
8, 2007 the CA rendered a decision, [25] annulling the decisions and orders of both the MeTC and the
RTC on the ground of lack of jurisdiction. The CA pointed out that Abad merely alleged in his
complaint that he leased the property to Teresita after he and his wife bought the same and that,
thereafter, Oscar and Daisy forcibly entered the same. Since Abad did not make the jurisdictional
averment of prior physical possession, the MeTC did not acquire jurisdiction over his action.
Further, Oscar and Daisy ably proved actual possession from 1967 through the barangay
certification. Since the MeTC had no jurisdiction over the case, all the proceedings in the case were
void.[26]
Abad moved for reconsideration but the CA denied the same, [27] hence, in the present petition for
review.[28]

Questions
Presented
The
case
presents
the
following
questions:
1. Whether or not Abad sufficiently alleged in his complaint the jurisdictional fact of prior physical
possession of the disputed property to vest the MeTC with jurisdiction over his action; and
2. In the affirmative, whether or not Abad sufficiently proved that he enjoyed prior physical
possession of the property in question.
The
Court's
Rulings
Two allegations are indispensable in actions for forcible entry to enable first level courts to acquire
jurisdiction over them: first, that the plaintiff had prior physical possession of the property; and,
second, that the defendant deprived him of such possession by means of force, intimidation,
threats,
strategy,
or
stealth.[29]
There is no question that Abad made an allegation in his complaint that Oscar and Daisy forcibly
entered the subject property. The only issue is with respect to his allegation, citing such property as
one "of which they have complete physical and material possession of the same until deprived
thereof." Abad argues that this substantially alleges plaintiffs prior physical possession of the
property before the dispossession, sufficient to confer on the MeTC jurisdiction over the action. The
Court agrees. The plaintiff in a forcible entry suit is not required to use in his allegations the exact
terminology employed by the rules. It is enough that the facts set up in the complaint show that
dispossession
took
place
under
the
required
conditions. [30]
It is of course not enough that the allegations of the complaint make out a case for forcible entry.
The plaintiff must also be able to prove his allegations. He has to prove that he had prior physical
possession[31] for this gives him the security that entitles him to remain in the property until a
person
with
a
better
right
lawfully
ejects
him. [32]
Here, evidently, the Abads did not take physical possession of the property after buying the same
since they immediately rented it to Teresita who had already been using the property as a boarding
house. Abad claims that their renting it to Teresita was an act of ownership that amounted to their
acquiring
full
physical
possession
of
the
same.[33]
[34]
But the Abad's lease agreement with Teresita began only in September 2002.
Oscar and Daisy,
on the other hand, have proved that they had been renting spaces in the property as early as 2001
as evidenced by receipts that they issued to their lessees. This was long before they supposedly
entered
the
property,
using
force,
in
2002.
Of course, Abad pointed out that the cited receipts covered rents in a place called "D's
Condominium" in Sampaloc, Manila, and were only made to appear through handwritten notations
that they were issued for rooms in the property subject of the suit. [35] But a close examination of
the receipts shows that "D's Condominium" was just the name that Daisy employed in her business
of renting rooms. The receipts did not necessarily describe another place. Indeed, they provided
blank spaces for describing as the subject of rent the property subject of this case. And, except for
Abad's bare claim that Teresita and his sons had long been in possession before they sold it to him
and his wife, he offered no evidence to show that this was in fact the case.
Abad assails as irregularly issued the barangay certification that Oscar had been residing on the
subject property since 1967. He claims that it could have been issued as a mere favor to a friend,
the barangay chairman having been Oscar's childhood playmate [36] But Abad has no proof of these
allegations. He has not overcome the presumption that the barangay chairman performed his
official
duty
and
acted
regularly
in
issuing
such
certification. [37]
Finally, Abad argued that with the title to the property in his name, he has in his favor the right to
the actual, physical, exclusive, continuous, and peaceful possession of the same. He pointed out
that his possession de facto began from the time of the signing and notarization of the deed of
absolute sale, becoming de jure once the title was issued in his name.[38]
It is of course true that a property owner has the right to exercise the attributes of ownership, one
of which is the right to possess the property. But Abad is missing the point. He is referring to
possession flowing from ownership which is not in issue in this case. Possession in forcible entry
cases means nothing more than physical possession or possession de facto, not legal possession in
the sense contemplated in civil law. Only prior physical possession, not title, is the issue. [9]
For these reasons, the Court finds that Servillano utterly failed to prove prior physical possession in
his favor. The absence of prior physical possession by the plaintiff in a forcible entry warrants the
dismissal
of
the
complaint.[40]
WHEREFORE, the Court DENIES the petition for review of petitioner Servillano E. Abad and AFFIRMS
in their entirety the decision dated March 8, 2007 and resolution dated June 19, 2007 of the Court
of
Appeals
in
CA-G.R.
SP
92617.
SO
ORDERED.
Crpio, (Chairperson), Nachura, Peralta, and Mendoza, JJ., conc
[G.R.
No.
151369,
March
23
:
2011]
ANITA MONASTERIO-PE AND THE SPOUSES ROMULO TAN AND EDITHA PE-TAN, PETITIONERS, VS.
JOSE JUAN TONG, HEREIN REPRESENTED BY HIS ATTORNEY-IN-FACT, JOSE Y. ONG, RESPONDENT.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking the
reversal and nullification of the Decision[1] and Order,[2] respectively dated October 24, 2001 and
January 18, 2002, of the Regional Trial Court (RTC) of Iloilo City, Branch 24.
The instant petition stemmed from an action for ejectment filed by herein respondent Jose Juan
Tong (Tong) through his representative Jose Y. Ong (Ong) against herein petitioners Anita
Monasterio-Pe (Anita) and the spouses Romulo Tan and Editha Pe-Tan (Spouses Tan). The suit was
filed with the Municipal Trial Court in Cities (MTCC), Branch 3, Iloilo City and docketed as Civil Case
No.
2000(92).
In the Complaint, it was alleged that Tong is the registered owner of two parcels of land known as

Lot Nos. 40 and 41 and covered by Transfer Certificate of Title (TCT) Nos. T-9699 and T-9161,
together with the improvements thereon, located at Barangay Kauswagan, City Proper, Iloilo City;
herein petitioners are occupying the house standing on the said parcels of land without any
contract of lease nor are they paying any kind of rental and that their occupation thereof is simply
by mere tolerance of Tong; that in a letter dated December 1, 1999, Tong demanded that
respondents vacate the house they are occupying, but despite their receipt of the said letter they
failed and refused to vacate the same; Tong referred his complaint to the Lupon of Barangay
Kauswagan,
to
no
avail.[3]
In their Answer with Defenses and Counterclaim, herein petitioners alleged that Tong is not the real
owner of the disputed property, but is only a dummy of a certain alien named Ong Se Fu, who is not
qualified to own the said lot and, as such, Tong's ownership is null and void; petitioners are the true
and lawful owners of the property in question and by reason thereof they need not lease nor pay
rentals to anybody; a case docketed as CA-G.R. CV No. 52676 (RTC Civil Case No. 20181) involving
herein petitioner Pe and respondent is pending before the Court of Appeals (CA) where the
ownership of the subject property is being litigated; respondent should wait for the resolution of the
said action instead of filing the ejectment case; petitioners also claimed that there was, in fact, no
proper barangay conciliation as Tong was bent on filing the ejectment case before conciliation
proceedings
could
be
validly
made. [4]
On March 19, 2001, the MTCC rendered judgment in favor of herein respondent, the dispositive
portion of which reads as follows:
WHEREFORE, judgment is rendered, finding the defendants Anita Monasterio-Pe, and Spouses
Romulo Tan and Editha Pe-Tan to be unlawfully withholding the property in litigation, i.e., Lot. Nos.
40 and 41 covered by TCT Nos. T-9699 and 9161, respectively, together with the buildings thereon,
located at Brgy. Kauswagan, Iloilo City Proper, and they are hereby ordered together with their
families and privies, to vacate the premises and deliver possession to the plaintiff and/or his
representative.
The defendants are likewise ordered to pay plaintiff reasonable compensation for the use and
occupancy of the premises in the amount of P15,000.00 per month starting January, 2000 until they
actually vacate and deliver possession to the plaintiff and attorney's fees in the amount of
P20,000.00.
Costs
against
the
defendants.
SO
DECIDED.[5]
Aggrieved by the above-quoted judgment, petitioners appealed the decision of the MTCC with the
RTC
of
Iloilo
City.
In its presently assailed Decision, the RTC of Iloilo City, Branch 24 affirmed in its entirety the
appealed
decision
of
the
MTCC.
Hence,
the
instant
petition
for
review
on
certiorari.
At the outset, it bears emphasis that in a petition for review on certiorari under Rule 45 of the Rules
of Court, only questions of law may be raised by the parties and passed upon by this Court. [6] It is a
settled rule that in the exercise of this Court's power of review, it does not inquire into the
sufficiency of the evidence presented, consistent with the rule that this Court is not a trier of facts. [7]
In the instant case, a perusal of the errors assigned by petitioners would readily show that they are
raising factual issues the resolution of which requires the examination of evidence. Certainly, issues
which are being raised in the present petition, such as the questions of whether the issue of
physical possession is already included as one of the issues in a case earlier filed by petitioner Anita
and her husband, as well as whether respondent complied with the law and rules on barangay
conciliation,
are
factual
in
nature.
Moreover, the appeal under Rule 45 of the said Rules contemplates that the RTC rendered the
judgment, final order or resolution acting in its original jurisdiction. [8] In the present case, the
assailed Decision and Order of the RTC were issued in the exercise of its appellate jurisdiction.
Thus, petitioners pursued the wrong mode of appeal when they filed the present petition for review
on certiorari with this Court. Instead, they should have filed a petition for review with the CA
pursuant to the provisions of Section 1, [9] Rule 42 of the Rules of Court.
On
the
foregoing
bases
alone,
the
instant
petition
should
be
denied.
In any case, the instant petition would still be denied for lack of merit, as discussed below.
In their first assigned error, petitioners contend that the RTC erred in holding that the law authorizes
an attorney-in-fact to execute the required certificate against forum shopping in behalf of his or her
principal. Petitioners argue that Tong himself, as the principal, and not Ong, should have executed
the
certificate
against
forum
shopping.
The
Court
is
not
persuaded.
It is true that the first paragraph of Section 5, [10] Rule 7 of the Rules of Court, requires that the
certification should be signed by the "petitioner or principal party" himself. The rationale behind this
is because only the petitioner himself has actual knowledge of whether or not he has initiated
similar actions or proceedings in different courts or agencies. [11] However, the rationale does not
apply where, as in this case, it is the attorney-in-fact who instituted the action. [12] Such
circumstance constitutes reasonable cause to allow the attorney-in-fact to personally sign the
Certificate of Non-Forum Shopping. Indeed, the settled rule is that the execution of the certification
against forum shopping by the attorney-in-fact is not a violation of the requirement that the parties
must personally sign the same.[13] The attorney-in-fact, who has authority to file, and who actually
filed the complaint as the representative of the plaintiff, is a party to the ejectment suit. [14] In fact,
Section 1,[15] Rule 70 of the Rules of Court includes the representative of the owner in an ejectment
suit as one of the parties authorized to institute the proceedings. In the present case, there is no
dispute that Ong is respondent's attorney-in-fact. Hence, the Court finds that there has been
substantial
compliance
with
the
rules
proscribing
forum
shoppin
Petitioners also aver that the certificate against forum shopping attached to the complaint in Civil
Case No. 2000(92) falsely stated that there is no other case pending before any other tribunal
involving the same issues as those raised therein, because at the time the said complaint was filed,

Civil Case No. 20181 was, in fact, still pending with the CA (CA-G.R. CV No. 52676), where the very
same
issues
of
ejectment
and
physical
possession
were
already
included.
Corollarily, petitioners claim that the MTCC has no jurisdiction over Civil Case No. 2000(92) on the
ground that the issue of physical possession raised therein was already included by agreement of
the parties in Civil Case No. 20181. As such, petitioners assert that respondent is barred from filing
the ejectment case, because in doing so he splits his cause of action and indirectly engages in
forum
shopping.
The
Court
does
not
agree.
The Court takes judicial notice of the fact that the disputed properties, along with three other
parcels of land, had been the subject of two earlier cases filed by herein petitioner Anita and her
husband Francisco against herein respondent and some other persons. The first case is for specific
performance and/or rescission of contract and reconveyance of property with damages. It was filed
with the then Court of First Instance (CFI) of Iloilo City and docketed as Civil Case No. 10853. The
case was dismissed by the CFI. On appeal, the Intermediate Appellate Court (IAC) upheld the
decision of the trial court. When the case was brought to this Court, [16] the decision of the IAC was
affirmed. Subsequently, the Court's judgment in this case became final and executory per Entry of
Judgment
issued
on
May
27,
1991.
Subsequently, in 1992, the Spouses Pe filed a case for nullification of contract, cancellation of titles,
reconveyance and damages with the RTC of Iloilo City. This is the case presently cited by
petitioners. Eventually, the case, docketed as Civil Case No. 20181, was dismissed by the lower
court on the ground of res judicata. The RTC held that Civil Case No. 10853 serves as a bar to the
filing of Civil Case No. 20181, because both cases involve the same parties, the same subject
matter and the same cause of action. On appeal, the CA affirmed the dismissal of Civil Case No.
20181. Herein petitioner Anita assailed the judgment of the CA before this Court, but her petition
for review on certiorari was denied via a Resolution[17] dated January 22, 2003. On June 25, 2003,
the said Resolution became final and executory. The Court notes that the case was disposed with
finality without any showing that the issue of ejectment was ever raised. Hence, respondent is not
barred
from
filing
the
instant
action
for
ejectment.
In any case, it can be inferred from the judgments of this Court in the two aforementioned cases
that respondent, as owner of the subject lots, is entitled to the possession thereof. Settled is the
rule that the right of possession is a necessary incident of ownership. [18] Petitioners, on the other
hand, are consequently barred from claiming that they have the right to possess the disputed
parcels of land, because their alleged right is predicated solely on their claim of ownership, which is
already effectively debunked by the decisions of this Court affirming the validity of the deeds of
sale
transferring
ownership
of
the
subject
properties
to
respondent.
Petitioners also contend that respondent should have filed an accion publiciana and not an unlawful
detainer case, because the one-year period to file a case for unlawful detainer has already lapsed.
The
Court
does
not
agree.
Sections 1 and 2, Rule 70 of the Rules of Court provide:
Section 1. Who may institute proceedings and when. - Subject to the provisions of the next
succeeding section, a person deprived of the possession of any land or building by force,
intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against whom
the possession of any land or building is unlawfully withheld after the expiration or termination of
the right to hold possession, by virtue of any contract, express or implied, or the legal
representatives or assigns of any such lessor, vendor, vendee, or other person, may, at any time
within one (1) year after such unlawful deprivation or withholding of possession, bring an action in
the proper Municipal Trial Court against the person or persons unlawfully withholding or depriving of
possession, or any person or persons claiming under them, for the restitution of such possession,
together
with
damages
and
costs.
Section 2. Lessor to proceed against lessee only after demand. - Unless otherwise stipulated, such
action by the lessor shall be commenced only after demand to pay or comply with the conditions of
the lease and to vacate is made upon the lessee, or by serving written notice of such demand upon
the person found on the premises, or by posting such notice on the premises if no person be found
thereon, and the lessee fails to comply therewith after fifteen (15) days in the case of land or five
(5)
days
in
the
case
of
buildings.
Respondent alleged in his complaint that petitioners occupied the subject property by his mere
tolerance. While tolerance is lawful, such possession becomes illegal upon demand to vacate by the
owner and the possessor by tolerance refuses to comply with such demand. [19] Respondent sent
petitioners a demand letter dated December 1, 1999 to vacate the subject property, but petitioners
did not comply with the demand. A person who occupies the land of another at the latter's
tolerance or permission, without any contract between them, is necessarily bound by an implied
promise that he will vacate upon demand, failing which a summary action for ejectment is the
proper remedy against him.[20] Under Section 1, Rule 70 of the Rules of Court, the one-year period
within which a complaint for unlawful detainer can be filed should be counted from the date of
demand, because only upon the lapse of that period does the possession become unlawful. [21]
Respondent filed the ejectment case against petitioners on March 29, 2000, which was less than a
year from December 1, 1999, the date of formal demand. Hence, it is clear that the action was filed
within the one-year period prescribed for filing an ejectment or unlawful detainer case.
Neither is the Court persuaded by petitioners' argument that respondent has no cause of action to
recover physical possession of the subject properties on the basis of a contract of sale because the
thing
sold
was
never
delivered
to
the
latter.
It has been established that petitioners validly executed a deed of sale covering the subject parcels
of land in favor of respondent after the latter paid the outstanding account of the former with the
Philippine
Veterans
Bank.
Article 1498 of the Civil Code provides that when the sale is made through a public instrument, the
execution thereof shall be equivalent to the delivery of the thing which is the object of the contract,
if from the deed the contrary does not appear or cannot clearly be inferred. In the instant case,

petitioners failed to present any evidence to show that they had no intention of delivering the
subject lots to respondent when they executed the said deed of sale. Hence, petitioners' execution
of the deed of sale is tantamount to a delivery of the subject lots to respondent. The fact that
petitioners remained in possession of the disputed properties does not prove that there was no
delivery, because as found by the lower courts, such possession is only by respondent's mere
tolerance.
Lastly, the Court does not agree with petitioners' assertion that the filing of the unlawful detainer
case was premature, because respondent failed to comply with the provisions of the law on
barangay conciliation. As held by the RTC, Barangay Kauswagan City Proper, through its Pangkat
Secretary and Chairman, issued not one but two certificates to file action after herein petitioners
and respondent failed to arrive at an amicable settlement. The Court finds no error in the
pronouncement of both the MTCC and the RTC that any error in the previous conciliation
proceedings leading to the issuance of the first certificate to file action, which was alleged to be
defective, has already been cured by the MTCC's act of referring back the case to the Pangkat
Tagapagkasundo of Barangay Kauswagan for proper conciliation and mediation proceedings. These
subsequent proceedings led to the issuance anew of a certificate to file action.
WHEREFORE, the instant petition is DENIED. The assailed Decision and Order of the Regional Trial
Court
of
Iloilo
City,
Branch
24,
are
AFFIRMED.
SO ORDERED.

G.R. No. 140528

December 7, 2011
MARIA TORBELA, represented by her heirs, namely: EULOGIO TOSINO, husband and children:
CLARO, MAXIMINO, CORNELIO, OLIVIA and CALIXTA, all surnamed TOSINO, APOLONIA TOSINO VDA.
DE RAMIREZ and JULITA TOSINO DEAN; PEDRO TORBELA, represented by his heirs, namely: JOSE
and DIONISIO, both surnamed TORBELA; EUFROSINA TORBELA ROSARIO, represented by her heirs,
namely: ESTEBAN T. ROSARIO, MANUEL T. ROSARIO, ROMULO T. ROSARIO and ANDREA ROSARIOHADUCA; LEONILA TORBELA TAMIN; FERNANDO TORBELA, represented by his heirs, namely:
SERGIO T. TORBELA, EUTROPIA T. VELASCO, PILAR T. ZULUETA, CANDIDO T. TORBELA, FLORENTINA
T. TORBELA and PANTALEON T. TORBELA; DOLORES TORBELA TABLADA; LEONORA TORBELA
AGUSTIN, represented by her heirs, namely: PATRICIO, SEGUNDO, CONSUELO and FELIX, all
surnamed
AGUSTIN;
and
SEVERINA
TORBELA
ILDEFONSO,
Petitioners,
vs.
SPOUSES ANDRES T. ROSARIO and LENA DUQUE-ROSARIO and BANCO FILIPINO SAVINGS AND
MORTGAGE BANK, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 140553
LENA
DUQUE-ROSARIO,
Petitioner,
vs.
BANCO FILIPINO SAVINGS AND MORTGAGE BANK, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
Presently before the Court are two consolidated Petitions for Review on Certiorari under Rule 45 of
the Rules of Court, both assailing the Decision 1 dated June 29, 1999 and Resolution 2 dated October
22, 1999 of the Court of Appeals in CA-G.R. CV No. 39770.
The petitioners in G.R. No. 140528 are siblings Maria Torbela, 3 Pedro Torbela,4 Eufrosina Torbela
Rosario,5 Leonila Torbela Tamin, Fernando Torbela, 6 Dolores Torbela Tablada, Leonora Torbela
Agustin,7 and Severina Torbela Ildefonso (Torbela siblings).
The petitioner in G.R. No. 140553 is Lena Duque-Rosario (Duque-Rosario), who was married to, but
now legally separated from, Dr. Andres T. Rosario (Dr. Rosario). Dr. Rosario is the son of Eufrosina
Torbela Rosario and the nephew of the other Torbela siblings.
The controversy began with a parcel of land, with an area of 374 square meters, located in
Urdaneta City, Pangasinan (Lot No. 356-A). It was originally part of a larger parcel of land, known as
Lot No. 356 of the Cadastral Survey of Urdaneta, measuring 749 square meters, and covered by
Original Certificate of Title (OCT) No. 16676, 8 in the name of Valeriano Semilla (Valeriano), married
to Potenciana Acosta. Under unexplained circumstances, Valeriano gave Lot No. 356-A to his sister
Marta Semilla, married to Eugenio Torbela (spouses Torbela). Upon the deaths of the spouses
Torbela, Lot No. 356-A was adjudicated in equal shares among their children, the Torbela siblings, by
virtue of a Deed of Extrajudicial Partition9 dated December 3, 1962.
On December 12, 1964, the Torbela siblings executed a Deed of Absolute Quitclaim 10 over Lot No.
356-A in favor of Dr. Rosario. According to the said Deed, the Torbela siblings "for and in
consideration of the sum of NINE PESOS (P9.00) x x x transfer[red] and convey[ed] x x x unto the
said Andres T. Rosario, that undivided portion of THREE HUNDRED SEVENTY-FOUR square meters of
that parcel of land embraced in Original Certificate of Title No. 16676 of the land records of
Pangasinan x x x."11 Four days later, on December 16, 1964, OCT No. 16676 in Valerianos name
was partially cancelled as to Lot No. 356-A and TCT No. 52751 12 was issued in Dr. Rosarios name
covering the said property.
Another Deed of Absolute Quitclaim 13 was subsequently executed on December 28, 1964, this time
by Dr. Rosario, acknowledging that he only borrowed Lot No. 356-A from the Torbela siblings and
was already returning the same to the latter for P1.00. The Deed stated:
That for and in consideration of the sum of one peso (P1.00), Philippine Currency and the fact that I
only borrowed the above described parcel of land from MARIA TORBELA, married to Eulogio Tosino,
EUFROSINA TORBELA, married to Pedro Rosario, PEDRO TORBELA, married to Petra Pagador,
LEONILA TORBELA, married to Fortunato Tamen, FERNANDO TORBELA, married to Victoriana
Tablada, DOLORES TORBELA, widow, LEONORA TORBELA, married to Matias Agustin and SEVERINA
TORBELA, married to Jorge Ildefonso, x x x by these presents do hereby cede, transfer and convey

by way of this ABSOLUTE QUITCLAIM unto the said Maria, Eufrosina, Pedro, Leonila, Fernando,
Dolores, Leonora and Severina, all surnamed Torbela the parcel of land described above. 14
(Emphasis ours.)
The aforequoted Deed was notarized, but was not immediately annotated on TCT No. 52751.
Following the issuance of TCT No. 52751, Dr. Rosario obtained a loan from the Development Bank of
the Philippines (DBP) on February 21, 1965 in the sum of P70,200.00, secured by a mortgage
constituted on Lot No. 356-A. The mortgage was annotated on TCT No. 52751 on September 21,
1965 as Entry No. 243537.15 Dr. Rosario used the proceeds of the loan for the construction of
improvements on Lot No. 356-A.
On May 16, 1967, Cornelio T. Tosino (Cornelio) executed an Affidavit of Adverse Claim, 16 on behalf of
the Torbela siblings. Cornelio deposed in said Affidavit:
3. That ANDRES T. ROSARIO later quitclaimed his rights in favor of the former owners by virtue of a
Deed of Absolute Quitclaim which he executed before Notary Public Banaga, and entered in his
Notarial Registry as Dec. No. 43; Page No. 9; Book No. I; Series of 1964;
4. That it is the desire of the parties, my aforestated kins, to register ownership over the abovedescribed property or to perfect their title over the same but their Deed could not be registered
because the registered owner now, ANDRES T. ROSARIO mortgaged the property with the
DEVELOPMENT BANK OF THE PHILIPPINES, on September 21, 1965, and for which reason, the Title is
still impounded and held by the said bank;
5. That pending payment of the obligation with the DEVELOPMENT BANK OF THE PHILIPPINES or
redemption of the Title from said bank, I, CORNELIO T. TOSINO, in behalf of my mother MARIA
TORBELA-TOSINO, and my Aunts EUFROSINA TORBELA, LEONILA TORBELA-TAMEN, DOLORES
TORBELA, LEONORA TORBELA-AGUSTIN, SEVERINA TORBELA-ILDEFONSO, and my Uncles PEDRO
TORBELA and FERNANDO, also surnamed TORBELA, I request the Register of Deeds of Pangasinan
to annotate their adverse claim at the back of Transfer Certificate of Title No. 52751, based on the
annexed document, Deed of Absolute Quitclaim by ANDRES T. ROSARIO, dated December 28, 1964,
marked as Annex "A" and made a part of this Affidavit, and it is also requested that the
DEVELOPMENT BANK OF THE PHILIPPINES be informed accordingly.17
The very next day, on May 17, 1967, the Torbela siblings had Cornelios Affidavit of Adverse Claim
dated May 16, 1967 and Dr. Rosarios Deed of Absolute Quitclaim dated December 28, 1964
annotated on TCT No. 52751 as Entry Nos. 27447118 and 274472,19 respectively.
The construction of a four-storey building on Lot No. 356-A was eventually completed. The building
was initially used as a hospital, but was later converted to a commercial building. Part of the
building was leased to PT&T; and the rest to Mrs. Andrea Rosario-Haduca, Dr. Rosarios sister, who
operated the Rose Inn Hotel and Restaurant.
Dr. Rosario was able to fully pay his loan from DBP. Under Entry No. 520197 on TCT No. 52751 20
dated March 6, 1981, the mortgage appearing under Entry No. 243537 was cancelled per the
Cancellation and Discharge of Mortgage executed by DBP in favor of Dr. Rosario and ratified before
a notary public on July 11, 1980.
In the meantime, Dr. Rosario acquired another loan from the Philippine National Bank (PNB)
sometime in 1979-1981. Records do not reveal though the original amount of the loan from PNB,
but the loan agreement was amended on March 5, 1981 and the loan amount was increased to
P450,000.00. The loan was secured by mortgages constituted on the following properties: (1) Lot
No. 356-A, covered by TCT No. 52751 in Dr. Rosarios name; (2) Lot No. 4489, with an area of 1,862
square meters, located in Dagupan City, Pangasinan, covered by TCT No. 24832; and (3) Lot No. 5F-8-C-2-B-2-A, with an area of 1,001 square meters, located in Nancayasan, Urdaneta, Pangasinan,
covered by TCT No. 104189.21 The amended loan agreement and mortgage on Lot No. 356-A was
annotated on TCT No. 52751 on March 6, 1981 as Entry No. 520099. 22
Five days later, on March 11, 1981, another annotation, Entry No. 520469, 23 was made on TCT No.
52751, canceling the adverse claim on Lot No. 356-A under Entry Nos. 274471-274472, on the basis
of the Cancellation and Discharge of Mortgage executed by Dr. Rosario on March 5, 1981. Entry No.
520469 consisted of both stamped and handwritten portions, and exactly reads:
Entry No. 520469. Cancellation of Adverse Claim executed by Andres Rosario in favor of same. The
incumbrance/mortgage appearing under Entry No. 274471-72 is now cancelled as per Cancellation
and Discharge of Mortgage Ratified before Notary Public Mauro G. Meris on March 5, 1981: Doc. No.
215; Page No. 44; Book No. 1; Series Of 1981.
Lingayen, Pangasinan, 3-11, 19981
[Signed:
Pedro
dela
Cruz]
Register of Deeds 24
On December 8, 1981, Dr. Rosario and his wife, Duque-Rosario (spouses Rosario), acquired a third
loan in the amount of P1,200,000.00 from Banco Filipino Savings and Mortgage Bank (Banco
Filipino). To secure said loan, the spouses Rosario again constituted mortgages on Lot No. 356-A, Lot
No. 4489, and Lot No. 5-F-8-C-2-B-2-A. The mortgage on Lot No. 356-A was annotated on TCT No.
52751 as Entry No. 53328325 on December 18, 1981. Since the construction of a two-storey
commercial building on Lot No. 5-F-8-C-2-B-2-A was still incomplete, the loan value thereof as
collateral was deducted from the approved loan amount. Thus, the spouses Rosario could only avail
of the maximum loan amount of P830,064.00 from Banco Filipino.
Because Banco Filipino paid the balance of Dr. Rosarios loan from PNB, the mortgage on Lot No.
356-A in favor of PNB was cancelled per Entry No. 533478 26 on TCT No. 52751 dated December 23,
1981.
On February 13, 1986, the Torbela siblings filed before the Regional Trial Court (RTC) of Urdaneta,
Pangasinan, a Complaint for recovery of ownership and possession of Lot No. 356-A, plus damages,
against the spouses Rosario, which was docketed as Civil Case No. U-4359. On the same day, Entry
Nos. 593493 and 593494 were made on TCT No. 52751 that read as follows:
Entry No. 593494 Complaint Civil Case No. U-4359 (For: Recovery of Ownership and Possession
and Damages. (Sup. Paper).

Entry No. 593493 Notice of Lis Pendens The parcel of land described in this title is subject to Lis
Pendens executed by Liliosa B. Rosario, CLAO, Trial Attorney dated February 13, 1986. Filed to TCT
No. 52751
February 13, 1986-1986 February 13 3:30 p.m.
(SGD.)
PACIFICO
M.
BRAGANZA
Register of Deeds27
The spouses Rosario afterwards failed to pay their loan from Banco Filipino. As of April 2, 1987, the
spouses Rosarios outstanding principal obligation and penalty charges amounted to P743,296.82
and P151,524.00, respectively.28
Banco Filipino extrajudicially foreclosed the mortgages on Lot No. 356-A, Lot No. 4489, and Lot No.
5-F-8-C-2-B-2-A. During the public auction on April 2, 1987, Banco Filipino was the lone bidder for
the three foreclosed properties for the price of P1,372,387.04. The Certificate of Sale 29 dated April
2, 1987, in favor of Banco Filipino, was annotated on TCT No. 52751 on April 14, 1987 as Entry No.
610623.30
On December 9, 1987, the Torbela siblings filed before the RTC their Amended Complaint, 31
impleading Banco Filipino as additional defendant in Civil Case No. U-4359 and praying that the
spouses Rosario be ordered to redeem Lot No. 356-A from Banco Filipino.
The spouses Rosario instituted before the RTC on March 4, 1988 a case for annulment of
extrajudicial foreclosure and damages, with prayer for a writ of preliminary injunction and
temporary restraining order, against Banco Filipino, the Provincial Ex Officio Sheriff and his Deputy,
and the Register of Deeds of Pangasinan. The case was docketed as Civil Case No. U-4667. Another
notice of lis pendens was annotated on TCT No. 52751 on March 10, 1988 as Entry No. 627059, viz:
Entry No. 627059 Lis Pendens Dr. Andres T. Rosario and Lena Duque Rosario, Plaintiff versus
Banco Filipino, et. al. Civil Case No. U-4667 or Annulment of ExtraJudicial Foreclosure of Real Estate
Mortgage The parcel of land described in this title is subject to Notice of Lis Pendens subscribed
and sworn to before Notary Public Mauro G. Meris, as Doc. No. 21; Page No. 5; Book 111; S-1988.
March 7, 1988-1988 March 10, 1:00 p.m.
(SGD.)
RUFINO
M.
MORENO,
SR.
Register of Deeds32
The Torbela siblings intervened in Civil Case No. U-4667. Eventually, on October 17, 1990, the RTC
issued an Order33 dismissing without prejudice Civil Case No. U-4667 due to the spouses Rosarios
failure to prosecute.
Meanwhile, the Torbela siblings tried to redeem Lot No. 356-A from Banco Filipino, but their efforts
were unsuccessful. Upon the expiration of the one-year redemption period in April 1988, the
Certificate of Final Sale34 and Affidavit of Consolidation35 covering all three foreclosed properties
were executed on May 24, 1988 and May 25, 1988, respectively.
On June 7, 1988, new certificates of title were issued in the name of Banco Filipino, particularly, TCT
No. 165812 for Lot No. 5-F-8-C-2-B-2-A and TCT No. 165813 for Lot No. 356-A . 36
The Torbela siblings thereafter filed before the RTC on August 29, 1988 a Complaint 37 for annulment
of the Certificate of Final Sale dated May 24, 1988, judicial cancelation of TCT No. 165813, and
damages, against Banco Filipino, the Ex Officio Provincial Sheriff, and the Register of Deeds of
Pangasinan, which was docketed as Civil Case No. U-4733.
On June 19, 1991, Banco Filipino filed before the RTC of Urdaneta City a Petition for the issuance of
a writ of possession. In said Petition, docketed as Pet. Case No. U-822, Banco Filipino prayed that a
writ of possession be issued in its favor over Lot No. 5-F-8-C-2-B-2-A and Lot No. 356-A, plus the
improvements thereon, and the spouses Rosario and other persons presently in possession of said
properties be directed to abide by said writ.
The RTC jointly heard Civil Case Nos. U-4359 and U-4733 and Pet. Case No. U-822. The Decision 38 on
these three cases was promulgated on January 15, 1992, the dispositive portion of which reads:
WHEREFORE, judgment is rendered:
1. Declaring the real estate mortgage over Lot 356-A covered by TCT 52751 executed by Spouses
Andres Rosario in favor of Banco Filipino, legal and valid;
2. Declaring the sheriffs sale dated April 2, 1987 over Lot 356-A covered by TCT 52751 and
subsequent final Deed of Sale dated May 14, 1988 over Lot 356-A covered by TCT No. 52751 legal
and valid;
3. Declaring Banco Filipino the owner of Lot 356-A covered by TCT No. 52751 (now TCT 165813);
4. Banco Filipino is entitled to a Writ of Possession over Lot 356-A together with the improvements
thereon (Rose Inn Building). The Branch Clerk of Court is hereby ordered to issue a writ of
possession in favor of Banco Filipino;
5. [The Torbela siblings] are hereby ordered to render accounting to Banco Filipino the rental they
received from tenants of Rose Inn Building from May 14, 1988;
6. [The Torbela siblings] are hereby ordered to pay Banco Filipino the sum of P20,000.00 as
attorneys fees;
7. Banco Filipino is hereby ordered to give [the Torbela siblings] the right of first refusal over Lot
356-A. The Register of Deeds is hereby ordered to annotate the right of [the Torbela siblings] at the
back of TCT No. 165813 after payment of the required fees;
8. Dr. Rosario and Lena Rosario are hereby ordered to reimburse [the Torbela siblings] the market
value of Lot 356-A as of December, 1964 minus payments made by the former;
9. Dismissing the complaint of [the Torbela siblings] against Banco Filipino, Pedro Habon and Rufino
Moreno in Civil Case No. U-4733; and against Banco Filipino in Civil Case No. U-4359. 39
The RTC released an Amended Decision40 dated January 29, 1992, adding the following paragraph to
the dispositive:
Banco Filipino is entitled to a Writ of Possession over Lot-5-F-8-C-2-[B]-2-A of the subdivision plan
(LRC) Psd-122471, covered by Transfer Certificate of Title 104189 of the Registry of Deeds of
Pangasinan[.]41
The Torbela siblings and Dr. Rosario appealed the foregoing RTC judgment before the Court of
Appeals. Their appeal was docketed as CA-G.R. CV No. 39770.

In its Decision42 dated June 29, 1999, the Court of Appeals decreed:
WHEREFORE, foregoing considered, the appealed decision is hereby AFFIRMED with modification.
Items No. 6 and 7 of the appealed decision are DELETED. Item No. 8 is modified requiring [Dr.
Rosario] to pay [the Torbela siblings] actual damages, in the amount of P1,200,000.00 with 6% per
annum interest from finality of this decision until fully paid. [Dr. Rosario] is further ORDERED to pay
[the Torbela siblings] the amount of P300,000.00 as moral damages; P200,000.00 as exemplary
damages and P100,000.00 as attorneys fees.
Costs against [Dr. Rosario].43
The Court of Appeals, in a Resolution44 dated October 22, 1999, denied the separate Motions for
Reconsideration of the Torbela siblings and Dr. Rosario.
The Torbela siblings come before this Court via the Petition for Review in G.R. No. 140528, with the
following assignment of errors:
First Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT THE REGISTRATION OF
THE DEED OF ABSOLUTE QUITCLAIM EXECUTED BY [DR. ANDRES T. ROSARIO] IN FAVOR OF THE
[TORBELA SIBLINGS] DATED DECEMBER 28, 1964 AND THE REGISTRATION OF THE NOTICE OF
ADVERSE CLAIM EXECUTED BY THE [TORBELA SIBLINGS], SERVE AS THE OPERATIVE ACT TO
CONVEY OR AFFECT THE LAND AND IMPROVEMENTS THEREOF IN SO FAR AS THIRD PERSONS ARE
CONCERNED.
Second Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE SUBJECT PROPERTY
COVERED BY T.C.T. NO. 52751 IS CLEAN AND FREE, DESPITE OF THE ANNOTATION OF
ENCUMBRANCES OF THE NOTICE OF ADVERSE CLAIM AND THE DEED OF ABSOLUTE QUITCLAIM
APPEARING AT THE BACK THEREOF AS ENTRY NOS. 274471 AND 274472, RESPECTIVELY.
Third Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE NOTICE OF ADVERSE
CLAIM OF THE [TORBELA SIBLINGS] UNDER ENTRY NO. 274471 WAS VALIDLY CANCELLED BY THE
REGISTER OF DEEDS, IN THE ABSENCE OF A PETITION DULY FILED IN COURT FOR ITS
CANCELLATION.
Fourth Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT RESPONDENT BANCO
FILIPINO SAVINGS AND MORTGAGE BANK IS A MORTGAGEE IN GOOD FAITH.
Fifth Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT THE FILING OF A CIVIL
CASE NO. U-4359 ON DECEMBER 9, 1987, IMPLEADING RESPONDENT BANCO FILIPINO AS
ADDITIONAL PARTY DEFENDANT, TOLL OR SUSPEND THE RUNNING OF THE ONE YEAR PERIOD OF
REDEMPTION.
Sixth Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT THE OWNERSHIP OVER
THE SUBJECT PROPERTY WAS PREMATURELY CONSOLIDATED IN FAVOR OF RESPONDENT BANCO
FILIPINO SAVINGS AND MORTGAGE BANK.
Seventh Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE SUBJECT PROPERTY IS
AT LEAST WORTH P1,200,000.00.45
The Torbela siblings ask of this Court:
WHEREFORE, in the light of the foregoing considerations, the [Torbela siblings] most respectfully
pray that the questioned DECISION promulgated on June 29, 1999 (Annex "A", Petition) and the
RESOLUTION dated October 22, 1999 (Annex "B", Petition) be REVERSED and SET ASIDE, and/or
further MODIFIED in favor of the [Torbela siblings], and another DECISION issue ordering, among
other reliefs, the respondent Banco Filipino to reconvey back Lot No. 356-A, covered by T.C.T. No.
52751, in favor of the [Torbela siblings] who are the actual owners of the same.
The [Torbela siblings] likewise pray for such other reliefs and further remedies as may be deemed
just and equitable under the premises.46
Duque-Rosario, now legally separated from Dr. Rosario, avers in her Petition for Review in G.R. No.
140553 that Lot No. 4489 and Lot No. 5-F-8-C-2-B-2-A were registered in her name, and she was
unlawfully deprived of ownership of said properties because of the following errors of the Court of
Appeals:
A
THE HON. COURT OF APPEALS PATENTLY ERRED IN NOT FINDING THAT THE PERIOD TO REDEEM THE
PROPERTY HAS NOT COMMENCED, HENCE, THE CERTIFICATE OF SALE, THE CONSOLIDATION OF
OWNERSHIP BY [BANCO FILIPINO], ARE NULL AND VOID.
B
THE COURT OF APPEALS PATENTLY ERRED IN REFUSING TO RULE THAT THE FILING OF THE
COMPLAINT BEFORE THE COURT A QUO BY THE [TORBELA SIBLINGS] HAD ALREADY BEEN
PRESCRIBED.47
Duque-Rosario prays that the appealed decision of the Court of Appeals be reversed and set aside,
and that Lot No. 4489 and Lot No. 5-F-8-C-2-B-2-A be freed from all obligations and encumbrances
and returned to her.
Review of findings of fact by the RTC and the Court of Appeals warranted.
A disquisition of the issues raised and/or errors assigned in the Petitions at bar unavoidably requires
a re-evaluation of the facts and evidence presented by the parties in the court a quo.
In Republic v. Heirs of Julia Ramos, 48 the Court summed up the rules governing the power of review
of the Court:
Ordinarily, this Court will not review, much less reverse, the factual findings of the Court of Appeals,
especially
where
such
findings
coincide
with
those
of
the
trial
court.http://sc.judiciary.gov.ph/jurisprudence/2010/february2010/169481.htm - _ftn The findings of
facts of the Court of Appeals are, as a general rule, conclusive and binding upon this Court, since

this Court is not a trier of facts and does not routinely undertake the re-examination of the evidence
presented by the contending parties during the trial of the case.
The above rule, however, is subject to a number of exceptions, such as (1) when the inference
made is manifestly mistaken, absurd or impossible; (2) when there is grave abuse of discretion; (3)
when the finding is grounded entirely on speculations, surmises, or conjectures; (4) when the
judgment of the Court of Appeals is based on misapprehension of facts; (5) when the findings of
fact are conflicting; (6) when the Court of Appeals, in making its findings, went beyond the issues of
the case and the same is contrary to the admissions of both parties; (7) when the findings of the
Court of Appeals are contrary to those of the trial court; (8) when the findings of fact are
conclusions without citation of specific evidence on which they are based; (9) when the Court of
Appeals manifestly overlooked certain relevant facts not disputed by the parties and which, if
properly considered, would justify a different conclusion; and (10) when the findings of fact of the
Court of Appeals are premised on the absence of evidence and are contradicted by the evidence on
record.49
As the succeeding discussion will bear out, the first, fourth, and ninth exceptions are extant in these
case.
Barangay conciliation was not a pre-requisite to the institution of Civil Case No. U-4359.
Dr. Rosario contends that Civil Case No. U-4359, the Complaint of the Torbela siblings for recovery
of ownership and possession of Lot No. 356-A, plus damages, should have been dismissed by the
RTC because of the failure of the Torbela siblings to comply with the prior requirement of submitting
the dispute to barangay conciliation.
The Torbela siblings instituted Civil Case No. U-4359 on February 13, 1986, when Presidential
Decree No. 1508, Establishing a System of Amicably Settling Disputes at the Barangay Level, was
still in effect.50 Pertinent provisions of said issuance read:
Section 2. Subject matters for amicable settlement. The Lupon of each barangay shall have
authority to bring together the parties actually residing in the same city or municipality for
amicable settlement of all disputes except:
1. Where one party is the government, or any subdivision or instrumentality thereof;
2. Where one party is a public officer or employee, and the dispute relates to the performance of his
official functions;
3. Offenses punishable by imprisonment exceeding 30 days, or a fine exceeding P200.00;
4. Offenses where there is no private offended party;
5. Such other classes of disputes which the Prime Minister may in the interest of justice determine
upon recommendation of the Minister of Justice and the Minister of Local Government.
Section 3. Venue. Disputes between or among persons actually residing in the same barangay shall
be brought for amicable settlement before the Lupon of said barangay. Those involving actual
residents of different barangays within the same city or municipality shall be brought in the
barangay where the respondent or any of the respondents actually resides, at the election of the
complainant. However, all disputes which involved real property or any interest therein shall be
brought in the barangay where the real property or any part thereof is situated.
The Lupon shall have no authority over disputes:
1. involving parties who actually reside in barangays of different cities or municipalities, except
where such barangays adjoin each other; and
2. involving real property located in different municipalities.
xxxx
Section 6. Conciliation, pre-condition to filing of complaint. No complaint, petition, action or
proceeding involving any matter within the authority of the Lupon as provided in Section 2 hereof
shall be filed or instituted in court or any other government office for adjudication unless there has
been a confrontation of the parties before the Lupon Chairman or the Pangkat and no conciliation or
settlement has been reached as certified by the Lupon Secretary or the Pangkat Secretary, attested
by the Lupon or Pangkat Chairman, or unless the settlement has been repudiated. x x x. (Emphases
supplied.)
The Court gave the following elucidation on the jurisdiction of the Lupong Tagapayapa in Tavora v.
Hon. Veloso51 :
The foregoing provisions are quite clear. Section 2 specifies the conditions under which the Lupon of
a barangay "shall have authority" to bring together the disputants for amicable settlement of their
dispute: The parties must be "actually residing in the same city or municipality." At the same time,
Section 3 while reiterating that the disputants must be "actually residing in the same barangay"
or in "different barangays" within the same city or municipality unequivocably declares that the
Lupon shall have "no authority" over disputes "involving parties who actually reside in barangays of
different cities or municipalities," except where such barangays adjoin each other.
Thus, by express statutory inclusion and exclusion, the Lupon shall have no jurisdiction over
disputes where the parties are not actual residents of the same city or municipality, except where
the barangays in which they actually reside adjoin each other.
It is true that immediately after specifying the barangay whose Lupon shall take cognizance of a
given dispute, Sec. 3 of PD 1508 adds:
"However, all disputes which involve real property or any interest therein shall be brought in the
barangay where the real property or any part thereof is situated."
Actually, however, this added sentence is just an ordinary proviso and should operate as such.
The operation of a proviso, as a rule, should be limited to its normal function, which is to restrict or
vary the operation of the principal clause, rather than expand its scope, in the absence of a clear
indication to the contrary.
"The natural and appropriate office of a proviso is . . . to except something from the enacting
clause; to limit, restrict, or qualify the statute in whole or in part; or to exclude from the scope of
the statute that which otherwise would be within its terms." (73 Am Jur 2d 467.)
Therefore, the quoted proviso should simply be deemed to restrict or vary the rule on venue
prescribed in the principal clauses of the first paragraph of Section 3, thus: Although venue is

generally determined by the residence of the parties, disputes involving real property shall be
brought in the barangay where the real property or any part thereof is situated, notwithstanding
that the parties reside elsewhere within the same city/municipality. 52 (Emphases supplied.)
The original parties in Civil Case No. U-4359 (the Torbela siblings and the spouses Rosario) do not
reside in the same barangay, or in different barangays within the same city or municipality, or in
different barangays of different cities or municipalities but are adjoining each other. Some of them
reside outside Pangasinan and even outside of the country altogether. The Torbela siblings reside
separately in Barangay Macalong, Urdaneta, Pangasinan; Barangay Consolacion, Urdaneta,
Pangasinan; Pangil, Laguna; Chicago, United States of America; and Canada. The spouses Rosario
are residents of Calle Garcia, Poblacion, Urdaneta, Pangasinan. Resultantly, the Lupon had no
jurisdiction over the dispute and barangay conciliation was not a pre-condition for the filing of Civil
Case No. U-4359.
The Court now looks into the merits of Civil Case No. U-4359.
There was an express trust between the Torbela siblings and Dr. Rosario.
There is no dispute that the Torbela sibling inherited the title to Lot No. 356-A from their parents,
the Torbela spouses, who, in turn, acquired the same from the first registered owner of Lot No. 356A, Valeriano.
Indeed, the Torbela siblings executed a Deed of Absolute Quitclaim on December 12, 1964 in which
they transferred and conveyed Lot No. 356-A to Dr. Rosario for the consideration of P9.00. However,
the Torbela siblings explained that they only executed the Deed as an accommodation so that Dr.
Rosario could have Lot No. 356-A registered in his name and use said property to secure a loan from
DBP, the proceeds of which would be used for building a hospital on Lot No. 356-A a claim
supported by testimonial and documentary evidence, and borne out by the sequence of events
immediately following the execution by the Torbela siblings of said Deed. On December 16, 1964,
TCT No. 52751, covering Lot No. 356-A, was already issued in Dr. Rosarios name. On December 28,
1964, Dr. Rosario executed his own Deed of Absolute Quitclaim, in which he expressly
acknowledged that he "only borrowed" Lot No. 356-A and was transferring and conveying the same
back to the Torbela siblings for the consideration of P1.00. On February 21, 1965, Dr. Rosarios loan
in the amount of P70,200.00, secured by a mortgage on Lot No. 356-A, was approved by DBP. Soon
thereafter, construction of a hospital building started on Lot No. 356-A.
Among the notable evidence presented by the Torbela siblings is the testimony of Atty. Lorenza
Alcantara (Atty. Alcantara), who had no apparent personal interest in the present case. Atty.
Alcantara, when she was still a boarder at the house of Eufrosina Torbela Rosario (Dr. Rosarios
mother), was consulted by the Torbela siblings as regards the extrajudicial partition of Lot No. 356A. She also witnessed the execution of the two Deeds of Absolute Quitclaim by the Torbela siblings
and Dr. Rosario.
In contrast, Dr. Rosario presented TCT No. 52751, issued in his name, to prove his purported title to
Lot No. 356-A. In Lee Tek Sheng v. Court of Appeals, 53 the Court made a clear distinction between
title and the certificate of title:
The certificate referred to is that document issued by the Register of Deeds known as the Transfer
Certificate of Title (TCT). By title, the law refers to ownership which is represented by that
document. Petitioner apparently confuses certificate with title. Placing a parcel of land under the
mantle of the Torrens system does not mean that ownership thereof can no longer be disputed.
Ownership is different from a certificate of title. The TCT is only the best proof of ownership of a
piece of land. Besides, the certificate cannot always be considered as conclusive evidence of
ownership. Mere issuance of the certificate of title in the name of any person does not foreclose the
possibility that the real property may be under co-ownership with persons not named in the
certificate or that the registrant may only be a trustee or that other parties may have acquired
interest subsequent to the issuance of the certificate of title. To repeat, registration is not the
equivalent of title, but is only the best evidence thereof. Title as a concept of ownership should not
be confused with the certificate of title as evidence of such ownership although both are
interchangeably used. x x x.54 (Emphases supplied.)
Registration does not vest title; it is merely the evidence of such title. Land registration laws do not
give the holder any better title than what he actually has. 55 Consequently, Dr. Rosario must still
prove herein his acquisition of title to Lot No. 356-A, apart from his submission of TCT No. 52751 in
his name.
Dr. Rosario testified that he obtained Lot No. 356-A after paying the Torbela siblings P25,000.00,
pursuant to a verbal agreement with the latter. The Court though observes that Dr. Rosarios
testimony on the execution and existence of the verbal agreement with the Torbela siblings lacks
significant details (such as the names of the parties present, dates, places, etc.) and is not
corroborated by independent evidence.
In addition, Dr. Rosario acknowledged the execution of the two Deeds of Absolute Quitclaim dated
December 12, 1964 and December 28, 1964, even affirming his own signature on the latter Deed.
The Parol Evidence Rule provides that when the terms of the 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.56 Dr. Rosario may not modify, explain, or add to the terms in the two written
Deeds of Absolute Quitclaim since he did not put in issue in his pleadings (1) an intrinsic ambiguity,
mistake, or imperfection in the Deeds; (2) failure of the Deeds to express the true intent and the
agreement of the parties thereto; (3) the validity of the Deeds; or (4) the existence of other terms
agreed to by the Torbela siblings and Dr. Rosario after the execution of the Deeds. 57
Even if the Court considers Dr. Rosarios testimony on his alleged verbal agreement with the Torbela
siblings, the Court finds the same unsatisfactory. Dr. Rosario averred that the two Deeds were
executed only because he was "planning to secure loan from the Development Bank of the
Philippines and Philippine National Bank and the bank needed absolute quitclaim[.]" 58 While Dr.
Rosarios explanation makes sense for the first Deed of Absolute Quitclaim dated December 12,
1964 executed by the Torbela siblings (which transferred Lot No. 356-A to Dr. Rosario for P9.00.00),

the same could not be said for the second Deed of Absolute Quitclaim dated December 28, 1964
executed by Dr. Rosario. In fact, Dr. Rosarios Deed of Absolute Quitclaim (in which he admitted that
he only borrowed Lot No. 356-A and was transferring the same to the Torbela siblings for P1.00.00)
would actually work against the approval of Dr. Rosarios loan by the banks. Since Dr. Rosarios
Deed of Absolute Quitclaim dated December 28, 1964 is a declaration against his self-interest, it
must be taken as favoring the truthfulness of the contents of said Deed. 59
It can also be said that Dr. Rosario is estopped from claiming or asserting ownership over Lot No.
356-A based on his Deed of Absolute Quitclaim dated December 28, 1964. Dr. Rosario's admission
in the said Deed that he merely borrowed Lot No. 356-A is deemed conclusive upon him. Under
Article 1431 of the Civil Code, "[t]hrough estoppel an admission or representation is rendered
conclusive upon the person making it, and cannot be denied or disproved as against the person
relying thereon."60 That admission cannot now be denied by Dr. Rosario as against the Torbela
siblings, the latter having relied upon his representation.
Considering the foregoing, the Court agrees with the RTC and the Court of Appeals that Dr. Rosario
only holds Lot No. 356-A in trust for the Torbela siblings.
Trust is the right to the beneficial enjoyment of property, the legal title to which is vested in
another. It is a fiduciary relationship that obliges the trustee to deal with the property for the
benefit of the beneficiary. Trust relations between parties may either be express or implied. An
express trust is created by the intention of the trustor or of the parties, while an implied trust
comes into being by operation of law.61
Express trusts are created by direct and positive acts of the parties, by some writing or deed, or
will, or by words either expressly or impliedly evincing an intention to create a trust. Under Article
1444 of the Civil Code, "[n]o particular words are required for the creation of an express trust, it
being sufficient that a trust is clearly intended." 62 It is possible to create a trust without using the
word "trust" or "trustee." Conversely, the mere fact that these words are used does not necessarily
indicate an intention to create a trust. The question in each case is whether the trustor manifested
an intention to create the kind of relationship which to lawyers is known as trust. It is immaterial
whether or not he knows that the relationship which he intends to create is called a trust, and
whether or not he knows the precise characteristics of the relationship which is called a trust. 63
In Tamayo v. Callejo,64 the Court recognized that a trust may have a constructive or implied nature
in the beginning, but the registered owners subsequent express acknowledgement in a public
document of a previous sale of the property to another party, had the effect of imparting to the
aforementioned trust the nature of an express trust. The same situation exists in this case. When
Dr. Rosario was able to register Lot No. 356-A in his name under TCT No. 52751 on December 16,
1964, an implied trust was initially established between him and the Torbela siblings under Article
1451 of the Civil Code, which provides:
ART. 1451. When land passes by succession to any person and he causes the legal title to be put in
the name of another, a trust is established by implication of law for the benefit of the true owner.
Dr. Rosarios execution of the Deed of Absolute Quitclaim on December 28, 1964, containing his
express admission that he only borrowed Lot No. 356-A from the Torbela siblings, eventually
transformed the nature of the trust to an express one. The express trust continued despite Dr.
Rosario stating in his Deed of Absolute Quitclaim that he was already returning Lot No. 356-A to the
Torbela siblings as Lot No. 356-A remained registered in Dr. Rosarios name under TCT No. 52751
and Dr. Rosario kept possession of said property, together with the improvements thereon.
The right of the Torbela siblings to recover Lot No. 356-A has not yet prescribed.
The Court extensively discussed the prescriptive period for express trusts in the Heirs of Maximo
Labanon v. Heirs of Constancio Labanon,65 to wit:
On the issue of prescription, we had the opportunity to rule in Bueno v. Reyes that unrepudiated
written express trusts are imprescriptible:
"While there are some decisions which hold that an action upon a trust is imprescriptible, without
distinguishing between express and implied trusts, the better rule, as laid down by this Court in
other decisions, is that prescription does supervene where the trust is merely an implied one. The
reason has been expressed by Justice J.B.L. Reyes in J.M. Tuason and Co., Inc. vs. Magdangal, 4
SCRA 84, 88, as follows:
Under Section 40 of the old Code of Civil Procedure, all actions for recovery of real property
prescribed in 10 years, excepting only actions based on continuing or subsisting trusts that were
considered by section 38 as imprescriptible. As held in the case of Diaz v. Gorricho, L-11229, March
29, 1958, however, the continuing or subsisting trusts contemplated in section 38 of the Code of
Civil Procedure referred only to express unrepudiated trusts, and did not include constructive trusts
(that are imposed by law) where no fiduciary relation exists and the trustee does not recognize the
trust at all."
This principle was amplified in Escay v. Court of Appeals this way: "Express trusts prescribe 10 years
from the repudiation of the trust (Manuel Diaz, et al. vs. Carmen Gorricho et al., 54 O.G. p. 8429,
Sec. 40, Code of Civil Procedure)."
In the more recent case of Secuya v. De Selma, we again ruled that the prescriptive period for the
enforcement of an express trust of ten (10) years starts upon the repudiation of the trust by the
trustee.66
To apply the 10-year prescriptive period, which would bar a beneficiarys action to recover in an
express trust, the repudiation of the trust must be proven by clear and convincing evidence and
made known to the beneficiary.67 The express trust disables the trustee from acquiring for his own
benefit the property committed to his management or custody, at least while he does not openly
repudiate the trust, and makes such repudiation known to the beneficiary or cestui que trust. For
this reason, the old Code of Civil Procedure (Act 190) declared that the rules on adverse possession
do not apply to "continuing and subsisting" (i.e., unrepudiated) trusts. In an express trust, the delay
of the beneficiary is directly attributable to the trustee who undertakes to hold the property for the
former, or who is linked to the beneficiary by confidential or fiduciary relations. The trustee's

possession is, therefore, not adverse to the beneficiary, until and unless the latter is made aware
that the trust has been repudiated.68
Dr. Rosario argues that he is deemed to have repudiated the trust on December 16, 1964, when he
registered Lot No. 356-A in his name under TCT No. 52751, so when on February 13, 1986, the
Torbela siblings instituted before the RTC Civil Case No. U-4359, for the recovery of ownership and
possession of Lot No. 356-A from the spouses Rosario, over 21 years had passed. Civil Case No. U4359 was already barred by prescription, as well as laches.
The Court already rejected a similar argument in Ringor v. Ringor 69 for the following reasons:
A trustee who obtains a Torrens title over a property held in trust for him by another cannot
repudiate the trust by relying on the registration. A Torrens Certificate of Title in Joses name did not
vest ownership of the land upon him. The Torrens system does not create or vest title. It only
confirms and records title already existing and vested. It does not protect a usurper from the true
owner. The Torrens system was not intended to foment betrayal in the performance of a trust. It
does not permit one to enrich himself at the expense of another. Where one does not have a
rightful claim to the property, the Torrens system of registration can confirm or record nothing.
Petitioners cannot rely on the registration of the lands in Joses name nor in the name of the Heirs
of Jose M. Ringor, Inc., for the wrong result they seek. For Jose could not repudiate a trust by relying
on a Torrens title he held in trust for his co-heirs. The beneficiaries are entitled to enforce the trust,
notwithstanding the irrevocability of the Torrens title. The intended trust must be sustained. 70
(Emphasis supplied.)
In the more recent case of Heirs of Tranquilino Labiste v. Heirs of Jose Labiste, 71 the Court refused to
apply prescription and laches and reiterated that:
[P]rescription and laches will run only from the time the express trust is repudiated. The Court has
held that for acquisitive prescription to bar the action of the beneficiary against the trustee in an
express trust for the recovery of the property held in trust it must be shown that: (a) the trustee has
performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust; (b) such
positive acts of repudiation have been made known to the cestui que trust, and (c) the evidence
thereon is clear and conclusive. Respondents cannot rely on the fact that the Torrens title was
issued in the name of Epifanio and the other heirs of Jose. It has been held that a trustee who
obtains a Torrens title over property held in trust by him for another cannot repudiate the trust by
relying on the registration. The rule requires a clear repudiation of the trust duly communicated to
the beneficiary. The only act that can be construed as repudiation was when respondents filed the
petition for reconstitution in October 1993. And since petitioners filed their complaint in January
1995, their cause of action has not yet prescribed, laches cannot be attributed to them. 72 (Emphasis
supplied.)
It is clear that under the foregoing jurisprudence, the registration of Lot No. 356-A by Dr. Rosario in
his name under TCT No. 52751 on December 16, 1964 is not the repudiation that would have
caused the 10-year prescriptive period for the enforcement of an express trust to run.The Court of
Appeals held that Dr. Rosario repudiated the express trust when he acquired another loan from PNB
and constituted a second mortgage on Lot No. 356-A sometime in 1979, which, unlike the first
mortgage to DBP in 1965, was without the knowledge and/or consent of the Torbela siblings.
The Court only concurs in part with the Court of Appeals on this matter.For repudiation of an
express trust to be effective, the unequivocal act of repudiation had to be made known to the
Torbela siblings as the cestuis que trust and must be proven by clear and conclusive evidence. A
scrutiny of TCT No. 52751 reveals the following inscription:
Entry No. 520099Amendment of the mortgage in favor of PNB inscribed under Entry No. 490658 in
the sense that the consideration thereof has been increased to PHILIPPINE PESOS Four Hundred
Fifty Thousand Pesos only (P450,000.00) and to secure any and all negotiations with PNB, whether
contracted before, during or after the date of this instrument, acknowledged before Notary Public of
Pangasinan Alejo M. Dato as Doc. No. 198, Page No. 41, Book No. 11, Series of 1985.
Date of Instrument March 5, 1981
Date of Inscription March 6, 198173
Although according to Entry No. 520099, the original loan and mortgage agreement of Lot No. 356A between Dr. Rosario and PNB was previously inscribed as Entry No. 490658, Entry No. 490658
does not actually appear on TCT No. 52751 and, thus, it cannot be used as the reckoning date for
the start of the prescriptive period.
The Torbela siblings can only be charged with knowledge of the mortgage of Lot No. 356-A to PNB
on March 6, 1981 when the amended loan and mortgage agreement was registered on TCT No.
52751 as Entry No. 520099. Entry No. 520099 is constructive notice to the whole world 74 that Lot
No. 356-A was mortgaged by Dr. Rosario to PNB as security for a loan, the amount of which was
increased to P450,000.00. Hence, Dr. Rosario is deemed to have effectively repudiated the express
trust between him and the Torbela siblings on March 6, 1981, on which day, the prescriptive period
for the enforcement of the express trust by the Torbela siblings began to run.From March 6, 1981,
when the amended loan and mortgage agreement was registered on TCT No. 52751, to February
13, 1986, when the Torbela siblings instituted before the RTC Civil Case No. U-4359 against the
spouses Rosario, only about five years had passed. The Torbela siblings were able to institute Civil
Case No. U-4359 well before the lapse of the 10-year prescriptive period for the enforcement of
their express trust with Dr. Rosario.Civil Case No. U-4359 is likewise not barred by laches. Laches
means the failure or neglect, for an unreasonable and unexplained length of time, to do that which
by exercising due diligence could or should have been done earlier. It is negligence or omission to
assert a right within a reasonable time, warranting a presumption that the party entitled to assert it
either has abandoned it or declined to assert it. As the Court explained in the preceding
paragraphs, the Torbela siblings instituted Civil Case No. U-4359 five years after Dr. Rosarios
repudiation of the express trust, still within the 10-year prescriptive period for enforcement of such
trusts. This does not constitute an unreasonable delay in asserting one's right. A delay within the
prescriptive period is sanctioned by law and is not considered to be a delay that would bar relief.
Laches apply only in the absence of a statutory prescriptive period. 75Banco Filipino is not a

mortgagee and buyer in good faith.Having determined that the Torbela siblings are the true owners
and Dr. Rosario merely the trustee of Lot No. 356-A, the Court is next faced with the issue of
whether or not the Torbela siblings may still recover Lot No. 356-A considering that Dr. Rosario had
already mortgaged Lot No. 356-A to Banco Filipino, and upon Dr. Rosarios default on his loan
obligations, Banco Filipino foreclosed the mortgage, acquired Lot No. 356-A as the highest bidder at
the foreclosure sale, and consolidated title in its name under TCT No. 165813. The resolution of this
issue depends on the answer to the question of whether or not Banco Filipino was a mortgagee in
good faith.Under Article 2085 of the Civil Code, one of the essential requisites of the contract of
mortgage is that the mortgagor should be the absolute owner of the property to be mortgaged;
otherwise, the mortgage is considered null and void. However, an exception to this rule is the
doctrine of "mortgagee in good faith." Under this doctrine, even if the mortgagor is not the owner of
the mortgaged property, the mortgage contract and any foreclosure sale arising therefrom are
given effect by reason of public policy. This principle is based on the rule that all persons dealing
with property covered by a Torrens Certificate of Title, as buyers or mortgagees, are not required to
go beyond what appears on the face of the title. This is the same rule that underlies the principle of
"innocent purchasers for value." The prevailing jurisprudence is that a mortgagee has a right to rely
in good faith on the certificate of title of the mortgagor to the property given as security and in the
absence of any sign that might arouse suspicion, has no obligation to undertake further
investigation. Hence, even if the mortgagor is not the rightful owner of, or does not have a valid
title to, the mortgaged property, the mortgagee in good faith is, nonetheless, entitled to
protection.76
On one hand, the Torbela siblings aver that Banco Filipino is not a mortgagee in good faith because
as early as May 17, 1967, they had already annotated Cornelios Adverse Claim dated May 16, 1967
and Dr. Rosarios Deed of Absolute Quitclaim dated December 28, 1964 on TCT No. 52751 as Entry
Nos. 274471-274472, respectively.On the other hand, Banco Filipino asseverates that it is a
mortgagee in good faith because per Section 70 of Presidential Decree No. 1529, otherwise known
as the Property Registration Decree, the notice of adverse claim, registered on May 17, 1967 by the
Torbela siblings under Entry Nos. 274471-274472 on TCT No. 52751, already lapsed after 30 days or
on June 16, 1967. Additionally, there was an express cancellation of Entry Nos. 274471-274472 by
Entry No. 520469 dated March 11, 1981. So when Banco Filipino approved Dr. Rosarios loan for
P1,200,000.00 and constituted a mortgage on Lot No. 356-A (together with two other properties) on
December 8, 1981, the only other encumbrance on TCT No. 52751 was Entry No. 520099 dated
March 6, 1981, i.e., the amended loan and mortgage agreement between Dr. Rosario and PNB
(which was eventually cancelled after it was paid off with part of the proceeds from Dr. Rosarios
loan from Banco Filipino). Hence, Banco Filipino was not aware that the Torbela siblings adverse
claim on Lot No. 356-A still subsisted.The Court finds that Banco Filipino is not a mortgagee in good
faith. Entry Nos. 274471-274472 were not validly cancelled, and the improper cancellation should
have been apparent to Banco Filipino and aroused suspicion in said bank of some defect in Dr.
Rosarios title.
The purpose of annotating the adverse claim on the title of the disputed land is to apprise third
persons that there is a controversy over the ownership of the land and to preserve and protect the
right of the adverse claimant during the pendency of the controversy. It is a notice to third persons
that any transaction regarding the disputed land is subject to the outcome of the dispute. 77Adverse
claims were previously governed by Section 110 of Act No. 496, otherwise known as the Land
Registration Act, quoted in full below:
ADVERSE CLAIM
SEC. 110. Whoever claims any part or interest in registered land adverse to the registered owner,
arising subsequent to the date of the original registration, may, if no other provision is made in this
Act for registering the same, make a statement in writing setting forth fully his alleged right or
interest, and how or under whom acquired, and a reference to the volume and page of the
certificate of title of the registered owner, and a description of the land in which the right or interest
is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimants residence, and
designate a place at which all notices may be served upon him. This statement shall be entitled to
registration as an adverse claim, and the court, upon a petition of any party in interest, shall grant
a speedy hearing upon the question of the validity of such adverse claim and shall enter such
decree therein as justice and equity may require. If the claim is adjudged to be invalid, the
registration shall be cancelled. If in any case the court after notice and hearing shall find that a
claim thus registered was frivolous or vexatious, it may tax the adverse claimant double or treble
costs in its discretion.
Construing the aforequoted provision, the Court stressed in Ty Sin Tei v. Lee Dy Piao 78 that "[t]he
validity or efficaciousness of the [adverse] claim x x x may only be determined by the Court upon
petition by an interested party, in which event, the Court shall order the immediate hearing thereof
and make the proper adjudication as justice and equity may warrant. And it is ONLY when such
claim is found unmeritorious that the registration thereof may be cancelled." The Court likewise
pointed out in the same case that while a notice of lis pendens may be cancelled in a number of
ways, "the same is not true in a registered adverse claim, for it may be cancelled only in one
instance, i.e., after the claim is adjudged invalid or unmeritorious by the Court x x x;" and "if any of
the registrations should be considered unnecessary or superfluous, it would be the notice of lis
pendens and not the annotation of the adverse claim which is more permanent and cannot be
cancelled without adequate hearing and proper disposition of the claim.With the enactment of the
Property Registration Decree on June 11, 1978, Section 70 thereof now applies to adverse claims:
SEC. 70. Adverse claim. Whoever claims any part or interest in registered land adverse to the
registered owner, arising subsequent to the date of the original registrations, may, if no other
provision is made in this Decree for registering the same, make a statement in writing setting forth
fully his alleged right, or interest, and how or under whom acquired, a reference to the number of
the certificate of title of the registered owner, the name of the registered owner, and a description

of the land in which the right or interest is claimed.The statement shall be signed and sworn to, and
shall state the adverse claimants residence, and a place at which all notices may be served upon
him. This statement shall be entitled to registration as an adverse claim on the certificate of title.
The adverse claim shall be effective for a period of thirty days from the date of registration. After
the lapse of said period, the annotation of adverse claim may be cancelled upon filing of a verified
petition therefor by the party in interest: Provided, however, that after cancellation, no second
adverse claim based on the same ground shall be registered by the same claimant.Before the lapse
of thirty days aforesaid, any party in interest may file a petition in the Court of First Instance where
the land is situated for the cancellation of the adverse claim, and the court shall grant a speedy
hearing upon the question of the validity of such adverse claim, and shall render judgment as may
be just and equitable. If the adverse claim is adjudged to be invalid, the registration thereof shall be
ordered cancelled. If, in any case, the court, after notice and hearing, shall find that the adverse
claim thus registered was frivolous, it may fine the claimant in an amount not less than one
thousand pesos nor more than five thousand pesos, in its discretion. Before the lapse of thirty days,
the claimant may withdraw his adverse claim by filing with the Register of Deeds a sworn petition to
that effect. (Emphases supplied.)In Sajonas v. Court of Appeals, 79 the Court squarely interpreted
Section 70 of the Property Registration Decree, particularly, the new 30-day period not previously
found in Section 110 of the Land Registration Act, thus:In construing the law aforesaid, care should
be taken that every part thereof be given effect and a construction that could render a provision
inoperative should be avoided, and inconsistent provisions should be reconciled whenever possible
as parts of a harmonious whole. For taken in solitude, a word or phrase might easily convey a
meaning quite different from the one actually intended and evident when a word or phrase is
considered with those with which it is associated. In ascertaining the period of effectivity of an
inscription of adverse claim, we must read the law in its entirety. Sentence three, paragraph two of
Section 70 of P.D. 1529 provides:"The adverse claim shall be effective for a period of thirty days
from the date of registration."At first blush, the provision in question would seem to restrict the
effectivity of the adverse claim to thirty days. But the above provision cannot and should not be
treated separately, but should be read in relation to the sentence following, which reads:"After the
lapse of said period, the annotation of adverse claim may be cancelled upon filing of a verified
petition therefor by the party in interest."If the rationale of the law was for the adverse claim to ipso
facto lose force and effect after the lapse of thirty days, then it would not have been necessary to
include the foregoing caveat to clarify and complete the rule. For then, no adverse claim need be
cancelled. If it has been automatically terminated by mere lapse of time, the law would not have
required the party in interest to do a useless act.A statute's clauses and phrases must not be taken
separately, but in its relation to the statute's totality. Each statute must, in fact, be construed as to
harmonize it with the pre-existing body of laws. Unless clearly repugnant, provisions of statutes
must be reconciled. The printed pages of the published Act, its history, origin, and its purposes may
be examined by the courts in their construction. Construing the provision as a whole would
reconcile the apparent inconsistency between the portions of the law such that the provision on
cancellation of adverse claim by verified petition would serve to qualify the provision on the
effectivity period. The law, taken together, simply means that the cancellation of the adverse claim
is still necessary to render it ineffective, otherwise, the inscription will remain annotated and shall
continue as a lien upon the property. For if the adverse claim has already ceased to be effective
upon the lapse of said period, its cancellation is no longer necessary and the process of cancellation
would be a useless ceremony.It should be noted that the law employs the phrase "may be
cancelled," which obviously indicates, as inherent in its decision making power, that the court may
or may not order the cancellation of an adverse claim, notwithstanding such provision limiting the
effectivity of an adverse claim for thirty days from the date of registration. The court cannot be
bound by such period as it would be inconsistent with the very authority vested in it. A fortiori, the
limitation on the period of effectivity is immaterial in determining the validity or invalidity of an
adverse claim which is the principal issue to be decided in the court hearing. It will therefore
depend upon the evidence at a proper hearing for the court to determine whether it will order the
cancellation of the adverse claim or not.To interpret the effectivity period of the adverse claim as
absolute and without qualification limited to thirty days defeats the very purpose for which the
statute provides for the remedy of an inscription of adverse claim, as the annotation of an adverse
claim is a measure designed to protect the interest of a person over a piece of real property where
the registration of such interest or right is not otherwise provided for by the Land Registration Act or
Act 496 (now P.D. 1529 or the Property Registration Decree), and serves as a warning to third
parties dealing with said property that someone is claiming an interest or the same or a better right
than the registered owner thereof.
The reason why the law provides for a hearing where the validity of the adverse claim is to be
threshed out is to afford the adverse claimant an opportunity to be heard, providing a venue where
the propriety of his claimed interest can be established or revoked, all for the purpose of
determining at last the existence of any encumbrance on the title arising from such adverse claim.
This is in line with the provision immediately following:"Provided, however, that after cancellation,
no second adverse claim shall be registered by the same claimant."Should the adverse claimant fail
to sustain his interest in the property, the adverse claimant will be precluded from registering a
second adverse claim based on the same ground.
It was held that "validity or efficaciousness of the claim may only be determined by the Court upon
petition by an interested party, in which event, the Court shall order the immediate hearing thereof
and make the proper adjudication as justice and equity may warrant. And it is only when such claim
is found unmeritorious that the registration of the adverse claim may be cancelled, thereby
protecting the interest of the adverse claimant and giving notice and warning to third parties." 80
(Emphases supplied.)Whether under Section 110 of the Land Registration Act or Section 70 of the
Property Registration Decree, notice of adverse claim can only be cancelled after a party in interest
files a petition for cancellation before the RTC wherein the property is located, and the RTC conducts
a hearing and determines the said claim to be invalid or unmeritorious.No petition for cancellation

has been filed and no hearing has been conducted herein to determine the validity or merit of the
adverse claim of the Torbela siblings. Entry No. 520469 cancelled the adverse claim of the Torbela
siblings, annotated as Entry Nos. 274471-774472, upon the presentation by Dr. Rosario of a mere
Cancellation and Discharge of Mortgage.Regardless of whether or not the Register of Deeds should
have inscribed Entry No. 520469 on TCT No. 52751, Banco Filipino could not invoke said inscription
in support of its claim of good faith. There were several things amiss in Entry No. 520469 which
should have already aroused suspicions in Banco Filipino, and compelled the bank to look beyond
TCT No. 52751 and inquire into Dr. Rosarios title. First, Entry No. 520469 does not mention any
court order as basis for the cancellation of the adverse claim. Second, the adverse claim was not a
mortgage which could be cancelled with Dr. Rosarios Cancellation and Discharge of Mortgage. And
third, the adverse claim was against Dr. Rosario, yet it was cancelled based on a document also
executed by Dr. Rosario.It is a well-settled rule that a purchaser or mortgagee cannot close his eyes
to facts which should put a reasonable man upon his guard, and then claim that he acted in good
faith under the belief that there was no defect in the title of the vendor or mortgagor. His mere
refusal to believe that such defect exists, or his willful closing of his eyes to the possibility of the
existence of a defect in the vendor's or mortgagor's title, will not make him an innocent purchaser
or mortgagee for value, if it afterwards develops that the title was in fact defective, and it appears
that he had such notice of the defects as would have led to its discovery had he acted with the
measure of precaution which may be required of a prudent man in a like situation. 81While the
defective cancellation of Entry Nos. 274471-274472 by Entry No. 520469 might not be evident to a
private individual, the same should have been apparent to Banco Filipino. Banco Filipino is not an
ordinary mortgagee, but is a mortgagee-bank, whose business is impressed with public interest. In
fact, in one case, 82 the Court explicitly declared that the rule that persons dealing with registered
lands can rely solely on the certificate of title does not apply to banks. In another case, 83 the Court
adjudged that unlike private individuals, a bank is expected to exercise greater care and prudence
in its dealings, including those involving registered lands. A banking institution is expected to
exercise due diligence before entering into a mortgage contract. The ascertainment of the status or
condition of a property offered to it as security for a loan must be a standard and indispensable part
of its operations.
Banco Filipino cannot be deemed a mortgagee in good faith, much less a purchaser in good faith at
the foreclosure sale of Lot No. 356-A. Hence, the right of the Torbela siblings over Lot No. 356-A is
superior over that of Banco Filipino; and as the true owners of Lot No. 356-A, the Torbela siblings are
entitled to a reconveyance of said property even from Banco Filipino.
Nonetheless, the failure of Banco Filipino to comply with the due diligence requirement was not the
result of a dishonest purpose, some moral obliquity, or breach of a known duty for some interest or
ill will that partakes of fraud that would justify damages. 84Given the reconveyance of Lot No. 356-A
to the Torbela siblings, there is no more need to address issues concerning redemption, annulment
of the foreclosure sale and certificate of sale (subject matter of Civil Case No. U-4733), or issuance
of a writ of possession in favor of Banco Filipino (subject matter of Pet. Case No. U-822) insofar as
Lot No. 356-A is concerned. Such would only be superfluous. Banco Filipino, however, is not left
without any recourse should the foreclosure and sale of the two other mortgaged properties be
insufficient to cover Dr. Rosarios loan, for the bank may still bring a proper suit against Dr. Rosario
to collect the unpaid balance.The rules on accession shall govern the improvements on Lot No. 356A and the rents thereof.The accessory follows the principal. The right of accession is recognized
under Article 440 of the Civil Code which states that "[t]he ownership of property gives the right by
accession to everything which is produced thereby, or which is incorporated or attached thereto,
either naturally or artificially."There is no question that Dr. Rosario is the builder of the
improvements on Lot No. 356-A. The Torbela siblings themselves alleged that they allowed Dr.
Rosario to register Lot No. 356-A in his name so he could obtain a loan from DBP, using said parcel
of land as security; and with the proceeds of the loan, Dr. Rosario had a building constructed on Lot
No. 356-A, initially used as a hospital, and then later for other commercial purposes. Dr. Rosario
supervised the construction of the building, which began in 1965; fully liquidated the loan from
DBP; and maintained and administered the building, as well as collected the rental income
therefrom, until the Torbela siblings instituted Civil Case No. U-4359 before the RTC on February 13,
1986.When it comes to the improvements on Lot No. 356-A, both the Torbela siblings (as
landowners) and Dr. Rosario (as builder) are deemed in bad faith. The Torbela siblings were aware of
the construction of a building by Dr. Rosario on Lot No. 356-A, while Dr. Rosario proceeded with the
said construction despite his knowledge that Lot No. 356-A belonged to the Torbela siblings. This is
the case contemplated under Article 453 of the Civil Code, which reads:ART. 453. If there was bad
faith, not only on the part of the person who built, planted or sowed on the land of another, but also
on the part of the owner of such land, the rights of one and the other shall be the same as though
both had acted in good faith.It is understood that there is bad faith on the part of the landowner
whenever the act was done with his knowledge and without opposition on his part. (Emphasis
supplied.)When both the landowner and the builder are in good faith, the following rules govern:
ART. 448. The owner of the land on which anything has been built, sown or planted in good faith,
shall have the right to appropriate as his own the works, sowing or planting, after payment of the
indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot
be obliged to buy the land if its value is considerably more than that of the building or trees. In such
case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the
building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in
case of disagreement, the court shall fix the terms thereof.ART. 546. Necessary expenses shall be
refunded to every possessor; but only the possessor in good faith may retain the thing until he has
been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good faith with the same right of
retention, the person who has defeated him in the possession having the option of refunding the
amount of the expenses or of paying the increase in value which the thing may have acquired by

reason thereof.ART. 548. Expenses for pure luxury or mere pleasure shall not be refunded to the
possessor in good faith; but he may remove the ornaments with which he has embellished the
principal thing if it suffers no injury thereby, and if his successor in the possession does not prefer
to refund the amount expended.
Whatever is built, planted, or sown on the land of another, and the improvements or repairs made
thereon, belong to the owner of the land. Where, however, the planter, builder, or sower has acted
in good faith, a conflict of rights arises between the owners and it becomes necessary to protect the
owner of the improvements without causing injustice to the owner of the land. In view of the
impracticability of creating what Manresa calls a state of "forced co-ownership," the law has
provided a just and equitable solution by giving the owner of the land the option to acquire the
improvements after payment of the proper indemnity or to oblige the builder or planter to pay for
the land and the sower to pay the proper rent. It is the owner of the land who is allowed to exercise
the option because his right is older and because, by the principle of accession, he is entitled to the
ownership of the accessory thing.85The landowner has to make a choice between appropriating the
building by paying the proper indemnity or obliging the builder to pay the price of the land. But
even as the option lies with the landowner, the grant to him, nevertheless, is preclusive. He must
choose one. He cannot, for instance, compel the owner of the building to remove the building from
the land without first exercising either option. It is only if the owner chooses to sell his land, and the
builder or planter fails to purchase it where its value is not more than the value of the
improvements, that the owner may remove the improvements from the land. The owner is entitled
to such remotion only when, after having chosen to sell his land, the other party fails to pay for the
same.86This case then must be remanded to the RTC for the determination of matters necessary for
the proper application of Article 448, in relation to Article 546, of the Civil Code. Such matters
include the option that the Torbela siblings will choose; the amount of indemnity that they will pay if
they decide to appropriate the improvements on Lot No. 356-A; the value of Lot No. 356-A if they
prefer to sell it to Dr. Rosario; or the reasonable rent if they opt to sell Lot No. 356-A to Dr. Rosario
but the value of the land is considerably more than the improvements. The determination made by
the Court of Appeals in its Decision dated June 29, 1999 that the current value of Lot No. 356-A is
P1,200,000.00 is not supported by any evidence on record.
Should the Torbela siblings choose to appropriate the improvements on Lot No. 356-A, the following
ruling of the Court in Pecson v. Court of Appeals 87 is relevant in the determination of the amount of
indemnity under Article 546 of the Civil Code:Article 546 does not specifically state how the value of
the useful improvements should be determined. The respondent court and the private respondents
espouse the belief that the cost of construction of the apartment building in 1965, and not its
current market value, is sufficient reimbursement for necessary and useful improvements made by
the petitioner. This position is, however, not in consonance with previous rulings of this Court in
similar cases. In Javier vs. Concepcion, Jr., this Court pegged the value of the useful improvements
consisting of various fruits, bamboos, a house and camarin made of strong material based on the
market value of the said improvements. In Sarmiento vs. Agana, despite the finding that the useful
improvement, a residential house, was built in 1967 at a cost of between eight thousand pesos
(P8,000.00) to ten thousand pesos (P10,000.00), the landowner was ordered to reimburse the
builder in the amount of forty thousand pesos (P40,000.00), the value of the house at the time of
the trial. In the same way, the landowner was required to pay the "present value" of the house, a
useful improvement, in the case of De Guzman vs. De la Fuente, cited by the petitioner.The
objective of Article 546 of the Civil Code is to administer justice between the parties involved. In
this regard, this Court had long ago stated in Rivera vs. Roman Catholic Archbishop of Manila that
the said provision was formulated in trying to adjust the rights of the owner and possessor in good
faith of a piece of land, to administer complete justice to both of them in such a way as neither one
nor the other may enrich himself of that which does not belong to him. Guided by this precept, it is
therefore the current market value of the improvements which should be made the basis of
reimbursement. A contrary ruling would unjustly enrich the private respondents who would
otherwise be allowed to acquire a highly valued income-yielding four-unit apartment building for a
measly amount. Consequently, the parties should therefore be allowed to adduce evidence on the
present market value of the apartment building upon which the trial court should base its finding as
to the amount of reimbursement to be paid by the landowner.88 (Emphases supplied.)
Still following the rules of accession, civil fruits, such as rents, belong to the owner of the building. 89
Thus, Dr. Rosario has a right to the rents of the improvements on Lot No. 356-A and is under no
obligation to render an accounting of the same to anyone. In fact, it is the Torbela siblings who are
required to account for the rents they had collected from the lessees of the commercial building
and turn over any balance to Dr. Rosario. Dr. Rosarios right to the rents of the improvements on Lot
No. 356-A shall continue until the Torbela siblings have chosen their option under Article 448 of the
Civil Code. And in case the Torbela siblings decide to appropriate the improvements, Dr. Rosario
shall have the right to retain said improvements, as well as the rents thereof, until the indemnity for
the same has been paid.90Dr. Rosario is liable for damages to the Torbela siblings.The Court of
Appeals ordered Dr. Rosario to pay the Torbela siblings P300,000.00 as moral damages;
P200,000.00 as exemplary damages; and P100,000.00 as attorneys fees.Indeed, Dr. Rosarios
deceit and bad faith is evident when, being fully aware that he only held Lot No. 356-A in trust for
the Torbela siblings, he mortgaged said property to PNB and Banco Filipino absent the consent of
the Torbela siblings, and caused the irregular cancellation of the Torbela siblings adverse claim on
TCT No. 52751. Irrefragably, Dr. Rosarios betrayal had caused the Torbela siblings (which included
Dr. Rosarios own mother, Eufrosina Torbela Rosario) mental anguish, serious anxiety, and wounded
feelings. Resultantly, the award of moral damages is justified, but the amount thereof is reduced to
P200,000.00.
In addition to the moral damages, exemplary damages may also be imposed given that Dr.
Rosarios wrongful acts were accompanied by bad faith. However, judicial discretion granted to the
courts in the assessment of damages must always be exercised with balanced restraint and
measured objectivity. The circumstances of the case call for a reduction of the award of exemplary

damages to P100,000.00.As regards attorney's fees, they may be awarded when the defendant's
act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to
protect his interest. Because of Dr. Rosarios acts, the Torbela siblings were constrained to institute
several cases against Dr. Rosario and his spouse, Duque-Rosario, as well as Banco Filipino, which
had lasted for more than 25 years. Consequently, the Torbela siblings are entitled to an award of
attorney's fees and the amount of P100,000.00 may be considered rational, fair, and reasonable.
Banco Filipino is entitled to a writ of possession for Lot No. 5-F-8-C-2-B-2-A.The Court emphasizes
that Pet. Case No. U-822, instituted by Banco Filipino for the issuance of a writ of possession before
the RTC of Urdaneta, included only Lot No. 5-F-8-C-2-B-2-A and Lot No. 356-A (Lot No. 4489, the
third property mortgaged to secure Dr. Rosarios loan from Banco Filipino, is located in Dagupan
City, Pangasinan, and the petition for issuance of a writ of possession for the same should be
separately filed with the RTC of Dagupan City). Since the Court has already granted herein the
reconveyance of Lot No. 356-A from Banco Filipino to the Torbela siblings, the writ of possession
now pertains only to Lot No. 5-F-8-C-2-B-2-A.To recall, the Court of Appeals affirmed the issuance by
the RTC of a writ of possession in favor of Banco Filipino. Dr. Rosario no longer appealed from said
judgment of the appellate court. Already legally separated from Dr. Rosario, Duque-Rosario alone
challenges the writ of possession before this Court through her Petition in G.R. No. 140553.DuqueRosario alleges in her Petition that Lot No. 5-F-8-C-2-B-2-A had been registered in her name under
TCT No. 104189. Yet, without a copy of TCT No. 104189 on record, the Court cannot give much
credence to Duque-Rosarios claim of sole ownership of Lot No. 5-F-8-C-2-B-2-A. Also, the question
of whether Lot No. 5-F-8-C-2-B-2-A was the paraphernal property of Duque-Rosario or the conjugal
property of the spouses Rosario would not alter the outcome of Duque-Rosarios Petition.The
following facts are undisputed: Banco Filipino extrajudicially foreclosed the mortgage constituted on
Lot No. 5-F-8-C-2-B-2-A and the two other properties after Dr. Rosario defaulted on the payment of
his loan; Banco Filipino was the highest bidder for all three properties at the foreclosure sale on
April 2, 1987; the Certificate of Sale dated April 2, 1987 was registered in April 1987; and based on
the Certificate of Final Sale dated May 24, 1988 and Affidavit of Consolidation dated May 25, 1988,
the Register of Deeds cancelled TCT No. 104189 and issued TCT No. 165812 in the name of Banco
Filipino for Lot No. 5-F-8-C-2-B-2-A on June 7, 1988.The Court has consistently ruled that the oneyear redemption period should be counted not from the date of foreclosure sale, but from the time
the certificate of sale is registered with the Registry of Deeds. 91 No copy of TCT No. 104189 can be
found in the records of this case, but the fact of annotation of the Certificate of Sale thereon was
admitted by the parties, only differing on the date it was made: April 14, 1987 according to Banco
Filipino and April 15, 1987 as maintained by Duque-Rosario. Even if the Court concedes that the
Certificate of Sale was annotated on TCT No. 104189 on the later date, April 15, 1987, the one-year
redemption period already expired on April 14, 1988. 92 The Certificate of Final Sale and Affidavit of
Consolidation were executed more than a month thereafter, on May 24, 1988 and May 25, 1988,
respectively, and were clearly not premature.It is true that the rule on redemption is liberally
construed in favor of the original owner of the property. The policy of the law is to aid rather than to
defeat him in the exercise of his right of redemption. 93 However, the liberal interpretation of the rule
on redemption is inapplicable herein as neither Duque-Rosario nor Dr. Rosario had made any
attempt to redeem Lot No. 5-F-8-C-2-B-2-A. Duque-Rosario could only rely on the efforts of the
Torbela siblings at redemption, which were unsuccessful. While the Torbela siblings made several
offers to redeem Lot No. 356-A, as well as the two other properties mortgaged by Dr. Rosario, they
did not make any valid tender of the redemption price to effect a valid redemption. The general rule
in redemption is that it is not sufficient that a person offering to redeem manifests his desire to do
so. The statement of intention must be accompanied by an actual and simultaneous tender of
payment. The redemption price should either be fully offered in legal tender or else validly
consigned in court. Only by such means can the auction winner be assured that the offer to redeem
is being made in good faith.94 In case of disagreement over the redemption price, the redemptioner
may preserve his right of redemption through judicial action, which in every case, must be filed
within the one-year period of redemption. The filing of the court action to enforce redemption, being
equivalent to a formal offer to redeem, would have the effect of preserving his redemptive rights
and "freezing" the expiration of the one-year period. 95 But no such action was instituted by the
Torbela siblings or either of the spouses Rosario.Duque-Rosario also cannot bar the issuance of the
writ of possession over Lot No. 5-F-8-C-2-B-2-A in favor of Banco Filipino by invoking the pendency
of Civil Case No. U-4359, the Torbela siblings action for recovery of ownership and possession and
damages, which supposedly tolled the period for redemption of the foreclosed properties. Without
belaboring the issue of Civil Case No. U-4359 suspending the redemption period, the Court simply
points out to Duque-Rosario that Civil Case No. U-4359 involved Lot No. 356-A only, and the legal
consequences of the institution, pendency, and resolution of Civil Case No. U-4359 apply to Lot No.
356-A alone.Equally unpersuasive is Duque-Rosarios argument that the writ of possession over Lot
No. 5-F-8-C-2-B-2-A should not be issued given the defects in the conduct of the foreclosure sale
(i.e., lack of personal notice to Duque-Rosario) and consolidation of title (i.e., failure to provide
Duque-Rosario with copies of the Certificate of Final Sale).The right of the purchaser to the
possession of the foreclosed property becomes absolute upon the expiration of the redemption
period. The basis of this right to possession is the purchaser's ownership of the property. After the
consolidation of title in the buyer's name for failure of the mortgagor to redeem, the writ of
possession becomes a matter of right and its issuance to a purchaser in an extrajudicial foreclosure
is merely a ministerial function.961avvphi1The judge with whom an application for a writ of
possession is filed need not look into the validity of the mortgage or the manner of its foreclosure.
Any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for
the refusal to issue a writ of possession. Regardless of whether or not there is a pending suit for the
annulment of the mortgage or the foreclosure itself, the purchaser is entitled to a writ of
possession, without prejudice, of course, to the eventual outcome of the pending annulment case.
The issuance of a writ of possession in favor of the purchaser in a foreclosure sale is a ministerial
act and does not entail the exercise of discretion.97

WHEREFORE, in view of the foregoing, the Petition of the Torbela siblings in G.R. No. 140528 is
GRANTED, while the Petition of Lena Duque-Rosario in G.R. No. 140553 is DENIED for lack of merit.
The Decision dated June 29, 1999 of the Court of Appeals in CA-G.R. CV No. 39770, which affirmed
with modification the Amended Decision dated January 29, 1992 of the RTC in Civil Case Nos. U4359 and U-4733 and Pet. Case No. U-822, is AFFIRMED WITH MODIFICATIONS, to now read as
follows:(1) Banco Filipino is ORDERED to reconvey Lot No. 356-A to the Torbela siblings;(2) The
Register of Deeds of Pangasinan is ORDERED to cancel TCT No. 165813 in the name of Banco
Filipino and to issue a new certificate of title in the name of the Torbela siblings for Lot No. 356-A;(3)
The case is REMANDED to the RTC for further proceedings to determine the facts essential to the
proper application of Articles 448 and 546 of the Civil Code, particularly: (a) the present fair market
value of Lot No. 356-A; (b) the present fair market value of the improvements thereon; (c) the
option of the Torbela siblings to appropriate the improvements on Lot No. 356-A or require Dr.
Rosario to purchase Lot No. 356-A; and (d) in the event that the Torbela siblings choose to require
Dr. Rosario to purchase Lot No. 356-A but the value thereof is considerably more than the
improvements, then the reasonable rent of Lot No. 356-A to be paid by Dr. Rosario to the Torbela
siblings;
(4) The Torbela siblings are DIRECTED to submit an accounting of the rents of the improvements on
Lot No. 356-A which they had received and to turn over any balance thereof to Dr. Rosario;
(5) Dr. Rosario is ORDERED to pay the Torbela siblings P200,000.00 as moral damages, P100,000.00
as exemplary damages, and P100,000.00 as attorneys fees; and
(6) Banco Filipino is entitled to a writ of possession over Lot-5-F-8-C-2-B-2-A, covered by TCT No.
165812. The RTC Branch Clerk of Court is ORDERED to issue a writ of possession for the said
property in favor of Banco Filipino.
SO ORDERED.
[G.R.
No.
175444
:
December
14,
2011]
JAIME ABALOS AND SPOUSES FELIX SALAZAR AND CONSUELO SALAZAR, GLICERIO
ABALOS, HEIRS OF AQUILINO ABALOS, NAMELY: SEGUNDA BAUTISTA, ROGELIO ABALOS,
DOLORES A. ROSARIO, FELICIDAD ABALOS, ROBERTO ABALOS, JUANITO ABALOS, TITA
ABALOS, LITA A. DELA CRUZ AND HEIRS OF AQUILINA ABALOS, NAMELY: ARTURO BRAVO,
PURITA B. MENDOZA, LOURDES B. AGANON, CONSUELO B. SALAZAR, PRIMA B. DELOS
SANTOS, THELMA APOSTOL AND GLECERIO ABALOS, PETITIONERS, VS. HEIRS OF
VICENTE TORIO, NAMELY: PUBLIO TORIO, LIBORIO TORIO, VICTORINA TORIO, ANGEL
TORIO, LADISLAO TORIO, PRIMO TORIO AND NORBERTO TORIO, RESPONDENTS.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari seeking to set aside the Decision [1] dated June
30, 2006 and Resolution[2] dated November 13, 2006 by the Court of Appeals (CA) in CA-G.R. SP No.
91887. The assailed Decision reversed and set aside the Decision [3] dated June 14, 2005 of the
Regional Trial Court (RTC) of Lingayen, Pangasinan, Branch 69, while the questioned Resolution
denied
petitioners"
Motion
for
Reconsideration.cralaw
The
factual
and
procedural
antecedents
of
the
case
are
as
follows:
On July 24, 1996, herein respondents filed a Complaint for Recovery of Possession and Damages
with the Municipal Trial Court (MTC) of Binmaley, Pangasinan against Jaime Abalos (Jaime) and the
spouses Felix and Consuelo Salazar. Respondents contended that: they are the children and heirs of
one Vicente Torio (Vicente) who died intestate on September 11, 1973; at the time of the death of
Vicente, he left behind a parcel of land measuring 2,950 square meters, more or less, which is
located at San Isidro Norte, Binmaley, Pangasinan; during the lifetime of Vicente and through his
tolerance, Jaime and the Spouses Salazar were allowed to stay and build their respective houses on
the subject parcel of land; even after the death of Vicente, herein respondents allowed Jaime and
the Spouses Salazar to remain on the disputed lot; however, in 1985, respondents asked Jaime and
the Spouses Salazar to vacate the subject lot, but they refused to heed the demand of respondents
forcing
respondents
to
file
the
complaint. [4]
Jaime and the Spouses Salazar filed their Answer with Counterclaim, denying the material
allegations in the Complaint and asserting in their Special and Affirmative Defenses that:
respondents" cause of action is barred by acquisitive prescription; the court a quo has no
jurisdiction over the nature of the action and the persons of the defendants; the absolute and
exclusive owners and possessors of the disputed lot are the deceased predecessors of defendants;
defendants and their predecessors-in-interest had been in actual, continuous and peaceful
possession of the subject lot as owners since time immemorial; defendants are faithfully and
religiously paying real property taxes on the disputed lot as evidenced by Real Property Tax
Receipts; they have continuously introduced improvements on the said land, such as houses, trees
and other kinds of ornamental plants which are in existence up to the time of the filing of their
Answer.[5]
On the same date as the filing of defendants" Answer with Counterclaim, herein petitioners filed
their Answer in Intervention with Counterclaim. Like the defendants, herein petitioners claimed that
their predecessors-in-interest were the absolute and exclusive owners of the land in question; that
petitioners and their predecessors had been in possession of the subject lot since time immemorial
up to the present; they have paid real property taxes and introduced improvements thereon.6
After
the
issues
were
joined,
trial
ensued.
On December 10, 2003, the MTC issued a Decision, the dispositive portion of which reads as
follows:
WHEREFORE, in view of the foregoing consideration[s], the Court adjudged the case in favor of the
plaintiffs and against the defendants and defendants-intervenors are ordered to turn over the land
in question to the plaintiffs (Lot Nos. 869 and 870, Cad. 467-D. Binmaley Cadastre located in Brgy.
San Isidro Norte, Binmaley, Pangasinan with an area of 2,950 sq. m., more or less, bounded and
described in paragraph 3 of the Complaint[)]; ordering the defendants and defendants-intervenors

to remove their respective houses standing on the land in dispute; further ordering the defendants
and defendants- intervenors, either singly or jointly to pay the plaintiffs land rent in the amount of
P12,000.00 per year to be reckoned starting the year 1996 until defendants and defendantsintervenors will finally vacate the premises; furthermore, defendants and defendants-intervenors
are also ordered to pay, either singly or jointly, the amount of P10,000.00 as and by way of
attorney"s
fees
and
costs
of
suit.
SO
ORDERED.[7]
Jaime and the Spouses Salazar appealed the Decision of the MTC with the RTC of Lingayen,
Pangasinan.[8] Herein petitioners, who were intervenors, did not file an appeal.
In its Decision dated June 14, 2005, the RTC ruled in favor of Jaime and the Spouses Salazar, holding
that they have acquired the subject property through prescription. Accordingly, the RTC dismissed
herein
respondents"
complaint.
Aggrieved, herein respondents filed a petition for review with the CA assailing the Decision of the
RTC.
On June 30, 2006, the CA promulgated its questioned Decision, the dispositive portion of which
reads, thus:
WHEREFORE, the petition is GRANTED. The Decision dated June 14, 2005 of the Regional Trial Court,
Branch 69, Lingayen, Pangasinan is hereby REVERSED and SET ASIDE. In its stead, a new one is
entered reinstating the Decision dated December 10, 2003 of the Municipal Trial Court of Binmaley,
Pangasinan.
SO
ORDERED.[9]
Jaime and the Spouses Salazar filed a Motion for Reconsideration, but the same was denied by the
CA
in
its
Resolution
dated
November
13,
2006.
Hence, the instant petition based on a sole assignment of error, to wit:
THE COURT OF APPEALS ERRED IN NOT APPRECIATING THAT THE PETITIONERS HEREIN ARE NOW
THE ABSOLUTE AND EXCLUSIVE OWNERS OF THE LAND IN QUESTION BY VIRTUE OF ACQUISITIVE
PRESCRIPTION.[10]
The main issue raised by petitioners is whether they and their predecessors-in-interest possessed
the disputed lot in the concept of an owner, or whether their possession is by mere tolerance of
respondents and their predecessors-in-interest. Corollarily, petitioners claim that the due execution
and authenticity of the deed of sale upon which respondents" predecessors-in-interest derived their
ownership
were
not
proven
during
trial
The
petition
lacks
merit.
Preliminarily, the Court agrees with the observation of respondents that some of the petitioners in
the instant petition were the intervenors[11] when the case was filed with the MTC. Records would
show that they did not appeal the Decision of the MTC. [12] The settled rule is that failure to perfect
an appeal renders the judgment final and executory. [13] Hence, insofar as the intervenors in the MTC
are concerned, the judgment of the MTC had already become final and executory.
It also bears to point out that the main issue raised in the instant petition, which is the character or nature of
petitioners"
possession
of
the
subject
parcel
of
land,
is
factual
in
nature.
Settled is the rule that questions of fact are not reviewable in petitions for review on certiorari under Rule 45 of
the Rules of Court.[14] Section 1 of Rule 45 states that petitions for review on certiorari "shall raise only
questions of law which must be distinctly set forth.'Doubtless, the issue of whether petitioners possess the
subject property as owners, or whether they occupy the same by mere tolerance of respondents, is a question
of
fact.
Thus,
it
is
not
reviewable.
Nonetheless, the Court has, at times, allowed exceptions from the abovementioned restriction. Among the
recognized exceptions are the following:
(a)
When
the
findings
are
grounded
entirely
on
speculation,
surmises,
or
conjectures;
(b)
When
the
inference
made
is
manifestly
mistaken,
absurd,
or
impossible;
(c)
When
there
is
grave
abuse
of
discretion;
(d)
When
the
judgment
is
based
on
a
misapprehension
of
facts;
(e)
When
the
findings
of
facts
are
conflicting;
(f) When in making its findings the CA went beyond the issues of the case, or its findings are contrary to the
admissions
of
both
the
appellant
and
the
appellee;
(g)
When
the
CAs
findings
are
contrary
to
those
by
the
trial
court;
(h) When the findings are conclusions without citation of specific evidence on which they are based;
(i) When the facts set forth in the petition as well as in the petitioners main and reply briefs are not
disputed
by
the
respondent;
(j) When the findings of fact are premised on the supposed absence of evidence and contradicted by the
evidence
on
record;
or
(k) When the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly
considered,
would
justify
a
different
conclusion. [15]
In the present case, the findings of fact of the MTC and the CA are in conflict with those of the RTC.
After a review of the records, however, the Court finds that the petition must fail as it finds no error in the
findings
of
fact
and
conclusions
of
law
of
the
CA
and
the
MTC.
Petitioners claim that they have acquired ownership over the disputed lot through ordinary acquisitive
prescription.
Acquisitive prescription of dominion and other real rights may be ordinary or extraordinary. [16] Ordinary
acquisitive prescription requires possession in good faith and with just title for ten (10) years. [17] Without good
faith and just title, acquisitive prescription can only be extraordinary in character which requires uninterrupted
adverse
possession
for
thirty
(30)
years. [18]
Possession "in good faith' consists in the reasonable belief that the person from whom the thing is received has
been the owner thereof, and could transmit his ownership. [19] There is "just title' when the adverse claimant
came into possession of the property through one of the modes recognized by law for the acquisition of
ownership or other real rights, but the grantor was not the owner or could not transmit any right. [20]
In the instant case, it is clear that during their possession of the property in question, petitioners
acknowledged ownership thereof by the immediate predecessor-in-interest of respondents. This is clearly
shown by the Tax Declaration in the name of Jaime for the year 1984 wherein it contains a statement admitting
that Jaime"s house was built on the land of Vicente, respondents" immediate predecessor-in- interest. [21]
Petitioners never disputed such an acknowledgment. Thus, having knowledge that they nor their predecessors-

in-interest are not the owners of the disputed lot, petitioners" possession could not be deemed as possession
in good faith as to enable them to acquire the subject land by ordinary prescription. In this respect, the Court
agrees with the CA that petitioners" possession of the lot in question was by mere tolerance of respondents
and their predecessors-in-interest. Acts of possessory character executed due to license or by mere tolerance
of the owner are inadequate for purposes of acquisitive prescription. [22] Possession, to constitute the foundation
of a prescriptive right, must be en concepto de dueo, or, to use the common law equivalent of the term,
that possession should be adverse, if not, such possessory acts, no matter how long, do not start the running
of
the
period
of
prescription. [23]
Moreover, the CA correctly held that even if the character of petitioners" possession of the subject property
had become adverse, as evidenced by their declaration of the same for tax purposes under the names of their
predecessors-in-interest, their possession still falls short of the required period of thirty (30) years in cases of
extraordinary acquisitive prescription. Records show that the earliest Tax Declaration in the name of petitioners
was in 1974. Reckoned from such date, the thirty-year period was completed in 2004. However, herein
respondents" complaint was filed in 1996, effectively interrupting petitioners" possession upon service of
summons on them.24 Thus, petitioners possession also did not ripen into ownership, because they failed
to
meet
the
required
statutory
period
of
extraordinary
prescription.
This Court has held that the evidence relative to the possession upon which the alleged prescription is based,
must be clear, complete and conclusive in order to establish the prescription. [25] In the present case, the Court
finds no error on the part of the CA in holding that petitioners failed to present competent evidence to prove
their alleged good faith in neither possessing the subject lot nor their adverse claim thereon. Instead, the
records would show that petitioners" possession was by mere tolerance of respondents and their predecessorsin-interest.
Finally, as to the issue of whether the due execution and authenticity of the deed of sale upon which
respondents anchor their ownership were not proven, the Court notes that petitioners did not raise this matter
in their Answer as well as in their Pre-Trial Brief. It was only in their Comment to respondents" Petition for
Review filed with the CA that they raised this issue. Settled is the rule that points of law, theories, issues, and
arguments not adequately brought to the attention of the trial court need not be, and ordinarily will not be,
considered by a reviewing court.26 They cannot be raised for the first time on appeal. To allow this would be
offensive
to
the
basic
rules
of
fair
play,
justice
and
due
process. [27]
Even granting that the issue of due execution and authenticity was properly raised, the Court finds no cogent
reason
to
depart
from
the
findings
of
the
CA,
to
wit:
Based on the foregoing, respondents [Jaime Abalos and the Spouses Felix and Consuelo Salazar] have not
inherited the disputed land because the same was shown to have already been validly sold to Marcos Torio,
who, thereupon, assigned the same to his son Vicente, the father of petitioners [herein respondents]. A valid
sale was amply established and the said validity subsists because the deed evidencing the same was duly
notarized.
There is no doubt that the deed of sale was duly acknowledged before a notary public. As a notarized
document, it has in its favor the presumption of regularity and it carries the evidentiary weight conferred upon
it with respect to its due execution. It is admissible in evidence without further proof of its authenticity and is
entitled
to
full
faith
and
credit
upon
its
face. [28]
Indeed, settled is the rule in our jurisdiction that a notarized document has in its favor the presumption of
regularity, and to overcome the same, there must be evidence that is clear, convincing and more than merely
preponderant; otherwise, the document should be upheld. [29] In the instant case, petitioners" bare denials will
not suffice to overcome the presumption of regularity of the assailed deed of sale.cralaw
WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R.
SP
No.
91887
are
AFFIRMED.
SO ORDERED.

[G.R.
No.
172331
:
August
24,
2011]
RAMON ARANDA, PETITIONER, VS. REPUBLIC OF THE PHILIPPINES, RESPONDENT.
DECISION
VILLARAMA, JR., J.:
On appeal is the Decision [1] dated July 26, 2005 and Resolution [2] dated April 11, 2006 of the Court
of Appeals (CA) in CA-G.R. CV No. 73067 which reversed and set aside the Decision [3] dated January
31, 2001 of the Regional Trial Court (RTC) of Tanauan, Batangas, Branch 6 in Land Reg. Case No. T335
(LRA
Record
No.
N-69447).
Subject of a petition for original registration before the RTC is a parcel of land situated in San
Andres, Malvar, Batangas with an area of 9,103 square meters and designated as Lot 3730, Psc 47,
Malvar Cadastre. The petition[4] was originally filed by ICTSI Warehousing, Inc. (ICTSI-WI)
represented by its Chairman, Enrique K. Razon, Jr. The Republic through the Office of the Solicitor
General (OSG) filed its opposition [5] on grounds that the land applied for is part of the public domain
and the applicant has not acquired a registrable title thereto under the provisions of
Commonwealth Act No. 141 as amended by Republic Act No. 6940.ICTSI-WI sought leave of court to
amend the application citing the following reasons: (1) the petition was not accompanied by a
certification of non-forum shopping; (2) the statement of technical description was based merely on
the boundaries set forth in the tax declaration; and (3) due to a technicality, the sale between the
vendor and applicant corporation cannot push through and consequently the tax declaration is still
in the name of vendor Ramon Aranda and the land cannot be transferred and declared in the name
of
ICTSI-WI.[6]
[7]
The trial court admitted the Amended Application for Registration of Title, this time filed in the
name of Ramon Aranda, herein petitioner. Petitioner prayed that should the Land Registration Act
be not applicable to this case, he invokes the liberal provisions of Section 48 of Commonwealth Act
No. 141, as amended, having been in continuous possession of the subject land in the concept of
owner, publicly, openly and adversely for more than thirty (30) years prior to the filing of the
application.[8]In support of the application, petitioner's sister Merlita A. Enriquez testified that in

1965 her father Anatalio Aranda donated the subject land to his brother (petitioner), as evidenced
by documents "Pagpapatunay ng Pagkakaloob ng Lupa" which she and her siblings executed on
June 7, 2000.[9] She came to know the land for the first time in 1965 when she was eight years old
and his brother Ramon has been tilling the land since then, planting it with rice and corn. His
brother did not introduce any permanent improvement and also did not hire a tenant to work on the
land. As to the donation made by his father to his brother Ramon, she recalled there was such a
document
but
it
was
eaten
by
rats. [10]
Another witness, Luis Olan, testified that his father Lucio Olan originally owned the land and that he
had known about this property since he was six (6) years old as he used to accompany his father in
going to the land. His father farmed the land and planted it first, with rice, and later corn. They had
open, peaceful, continuous and adverse possession of the land in the concept of owner until his
father sold the land in 1946 to Anatalio Aranda. The children of Anatalio then took over in tilling the
land, planting it with rice and corn and adding a few coconut trees. He does not have any copy of
the
document
of
sale
because
his
mother
gave
it
to
Anatalio. [11]
[12]
On January 31, 2001, the trial court rendered its Decision
granting the application and ordering
the
issuance
of
a
decree
of
registration
in
favor
of
petitioner.
The Republic appealed to the CA which reversed the trial court. The CA held that petitioner's
evidence does not satisfactorily establish the character and duration of possession required by law,
as petitioner failed to prove specific acts showing the nature of the possession by his predecessorsin-interest. The CA also did not give evidentiary weight to the documents "Pagpapatunay ng
Pagkakaloob ng Lupa" and "Pagpapatunay ng Bilihang Lampasan ng Lupa",[13] both prepared only in
the year 2000 when the application for registration was filed, as factual proof of ownership by the
parties
to
the
compromise
agreement.
Petitioner's
motion
for
reconsideration
was
likewise
denied
by
the
CA.
Hence, this appeal by way of a petition for review on certiorari under Rule 45 alleging that the
decision of the CA is based on a misapprehension of facts with regard to compliance with the
required 30 years of open, exclusive, public and adverse possession in the concept of owner.
Petitioner argues that the deeds of confirmation of the 1946 sale in favor of Anatalio Aranda and
the 1965 donation to petitioner are competent proof of transfer of ownership notwithstanding that
these were executed only in the year 2000. He asserts that the testimonies of witnesses Merlita
Aranda-Enriquez and Luis Olan on the fact of loss and destruction of copies of the aforesaid deeds
constitute secondary evidence of the contents thereof based on recollection of persons who are
adversely affected. Such testimonial evidence coupled with the deeds of confirmation warrants the
application of the exception from the best evidence rule. Petitioner thus contends that the CA had
no legal basis to doubt the veracity of the donation and sale of the subject property, and to
conclude that the confirmation deeds can be treated as compromise agreement considering that
the transactions had been previously completed and perfected by the parties.
We
deny
the
petition.
The Property Registration Decree (P.D. No. 1529) provides for original registration of land in an
ordinary registration proceeding. Under Section 14(1) [14] thereof, a petition may be granted upon
compliance with the following requisites: (a) that the property in question is alienable and
disposable land of the public domain; (b) that the applicants by themselves or through their
predecessors-in-interest have been in open, continuous, exclusive and notorious possession and
occupation; and (c) that such possession is under a bona fide claim of ownership since June 12,
1945
or
earlier.
Under the Regalian doctrine which is embodied in Section 2, Article XII of the 1987 Constitution, all
lands of the public domain belong to the State, which is the source of any asserted right to
ownership of land. All lands not appearing to be clearly within private ownership are presumed to
belong to the State. Unless public land is shown to have been reclassified or alienated to a private
person by the State, it remains part of the inalienable public domain. To overcome this presumption,
incontrovertible evidence must be established that the land subject of the application is alienable or
disposable.[15]To prove that the land subject of an application for registration is alienable, an
applicant must establish the existence of a positive act of the government such as a presidential
proclamation or an executive order; an administrative action; investigation reports of Bureau of
Lands investigators; and a legislative act or a statute. [16] The applicant may also secure a
certification from the Government that the lands applied for are alienable and disposable. [17]
In this case, the Assistant Regional Executive Director For Operations-Mainland Provinces of the
Department of Environment and Natural Resources (DENR), in compliance with the directive of the
trial court, issued a certification stating that the subject property "falls within the Alienable and
Disposable Land, Project No. 22-A of Lipa, Batangas per LC Map 718 certified on March 26, 1928." [18]
However, in the Certification[19] dated January 14, 2000 issued by the DENR CENR Officer of
Batangas City, Pancrasio M. Alcantara, which was submitted in evidence by the petitioner, it states
that:
This is to certify that based on projection from the technical reference map of this Office, Lot No.
3730, Ap-04-009883, situated at Barangay San Andres, Malvar, Batangas containing an area of
NINE THOUSAND ONE HUNDRED THREE AND FORTY SEVEN (9,103.47) SQUARE METERS and shown
at the reverse side hereof has been verified to be within the ALIENABLE AND DISPOSABLE ZONE
under Project No. 39, Land Classification Map No. 3601 certified on 22 December 1997 except for
twenty meters strip of land along the creek bounding on the northeastern portion which is to be
maintained
as
streambank
protection.
Petitioner has not explained the discrepancies in the dates of classification [20] mentioned in the
foregoing government certifications. Consequently, the status of the land applied for as alienable
and
disposable
was
not
clearly
established.
We also agree with the CA that petitioner's evidence failed to show that he possessed the property
in
the
manner
and
for
the
duration
required
by
law.
Petitioner presented tax declarations and the deeds of confirmation of the 1946 sale from the
original owner (Lucio Olan) to Anatalio Aranda and the 1965 donation made by the latter in favor of

petitioner. But as found by the CA, the history of the land shows that it was declared for taxation
purposes for the first time only in 1981. On the other hand, the Certification issued by the Municipal
Treasurer of Malvar stated that petitioner, who supposedly received the property from his father in
1965, had been paying the corresponding taxes for said land "for more than five consecutive years
including the current year [1999]," or beginning 1994 only or just three years before the filing of the
application for original registration. While, as a rule, tax declarations or realty tax payments of
property are not conclusive evidence of ownership, nevertheless they are good indicia of possession
in the concept of owner, for no one in his right mind would be paying taxes for a property that is not
in his actual or constructive possession - they constitute at least proof that the holder has a claim of
title
over
the
property.[21]
Petitioner likewise failed to prove the alleged possession of his predecessors-in-interest. His witness
Luis Olan testified that he had been visiting the land along with his father Lucio since he was 6
years old (he was 70 years old at the time he testified), or as early as 1936. Yet, there was no
evidence that Lucio Olan declared the property for tax purposes at anytime before he sold it to
Anatalio Aranda. There is also no showing that Anatalio Aranda declared the property in his name
from the time he bought it from Lucio Olan. And even assuming that Lucio actually planted rice and
corn on the land, such statement is not sufficient to establish possession in the concept of owner as
contemplated by law. Mere casual cultivation of the land does not amount to exclusive and
notorious possession that would give rise to ownership.[22] Specific acts of dominion must be clearly
shown
by
the
applicant.
We have held that a person who seeks the registration of title to a piece of land on the basis of
possession by himself and his predecessors-in-interest must prove his claim by clear and convincing
evidence, i.e., he must prove his title and should not rely on the absence or weakness of the
evidence of the oppositors.[23] Furthermore, the court has the bounden duty, even in the absence of
any opposition, to require the petitioner to show, by a preponderance of evidence and by positive
and absolute proof, so far as possible, that he is the owner in fee simple of the lands which he is
attempting to register.[24] Since petitioner failed to meet the quantum of proof required by law, the
CA was correct in reversing the trial court and dismissing his application for judicial confirmation of
title.
WHEREFORE, the present petition for review on certiorari is DENIED. The Decision dated July 26,
2005 and Resolution dated April 11, 2006 of the Court of Appeals in CA-G.R. CV No. 73067 are
AFFIRMED
and
UPHELD.
With
costs
against
the
petitioner.
SO ORDERED.
[G.R.
No.
171726,
February
23
:
2011]
VICENTE YU CHANG AND SOLEDAD YU CHANG, PETITIONERS, VS. REPUBLIC OF THE
PHILIPPINES,
RESPONDENT.
DECISION
VILLARAMA, JR., J.:
This petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as
amended, assails the Decision[1] dated August 26, 2005 and the Resolution [2] dated February 13,
2006 of the Court of Appeals (CA) in CA-G.R. CV No. 67430. The CA reversed and set aside the April
28, 2000 Decision[3] of the Regional Trial Court of Pili, Camarines Sur, Branch 31, in LRC No. P-115,
LRA Rec. No. N-68012, which granted petitioners' application for registration of title over two
parcels of land, denominated as Lots 2199 and 2200 of Cad. 291, Pili Cadastre.
The
antecedent
facts,
as
culled
from
the
records,
are
as
follows:
On March 22, 1949, petitioners' father, L. Yu Chang [4] and the Municipality of Pili, Camarines Sur,
through its then Mayor, Justo Casuncad, executed an Agreement to Exchange Real Property [5]
wherein the former assigned and transferred to the Municipality of Pili his 400-square-meter
residential lot in Barrio San Roque, Pili, Camarines Sur, in exchange for a 400-square-meter piece of
land located in San Juan, Pili. Thereafter, L. Yu Chang and his family took possession of the property
thus obtained and erected a residential house and a gasoline station thereon. He also declared the
property in his name under Tax Declaration No. 01794 [6] and 01795[7] and paid the real property
taxes thereon as evidenced by twenty-eight (28) official receipts from February 21, 1951 up to
March 10, 1976. When L. Yu Chang died on September 30, 1976, his wife, Donata Sta. Ana and his
seven children inherited the property and succeeded in the possession of the property.
On March 1, 1978, a Deed of Transfer and Renunciation [8] of their rights over the property was
executed by L. Yu Chang's five children, Rafaela, Catalina, Flaviana, Esperanza, and Antonio, in
favor of herein petitioners. After the transfer, petitioners had the subject property surveyed and
subdivided into two lots, Lot 2199[9] and Lot 2200[10] of Plan SWO-05-000888, Pili Cadastre.
Petitioners also declared the lots in their names for taxation purposes as shown in Tax Declaration
No.
02633[11]
and
paid
the
real
property
taxes
thereon.
On February 21, 1997, petitioner Soledad Yu Chang, for herself and in representation of her brother
and co-petitioner, Vicente Yu Chang, filed a petition [12] for registration of title over the
aforementioned lots under the Property Registration Decree. In their petition, they declared that
they are the co-owners of the subject lots; that they and their predecessors-in-interest "have been
in actual, physical, material, exclusive, open, occupation and possession of the above described
parcels of land for more than 100 years" [13]; and that allegedly, they have continuously, peacefully,
and adversely possessed the property in the concept of owners. Hence, they are entitled to
confirmation of ownership and issuance and registration of title in their names.
In support of their application, petitioners submitted the following documents, to wit:
Agreement to Exchange Real Property;Deed of Transfer and Renunciation;Approved Plan of Lot 2199
and Lot 2200, Cad. 291, Pili Cadastre;Approved Technical Description of Lot 2199;Approved
Technical Description of Lot 2200;Field Appraisal and Assessment Sheet (FAAS) A.R.P. No. 026-044

for Lot 2199 Cad. 291; andField Appraisal and Assessment Sheet (FAAS) A.R.P. No. 026-043 for Lot
2200
Cad.
291
Pili
Cadastre.
The Republic, through the Office of the Solicitor General (OSG), filed an Opposition [14] to the
application, alleging, inter alia, that: (1) neither the applicants nor their predecessors-in-interest
have been in open, continuous, exclusive and notorious possession of the land since June 12, 1945
or prior thereto; (2) the muniments of title, tax declarations and tax receipts do not constitute
competent and sufficient evidence of a bona fide acquisition of the land; and (3) that the parcels of
land applied for are portions of the public domain and are not subject to private appropriation.
No other parties filed their opposition. Thus, on December 14, 1998, an Order of General Default [15]
was
issued
by
the
trial
court.
After hearing, the trial court rendered a Decision granting petitioners' application. The fallo of the
trial court's decision reads:
WHEREFORE, in view of the foregoing, decision is hereby rendered as follows:
1. Confirming the imperfect title of the herein applicants Vicente Yu Chang and Soledad Yu Chang
over the two (2) parcels of land described in paragraph two (2) page 2 of the Petition, particularly
Lot 2199, Plans S"0-05-000888, Cad. 291, Pili Cadastre and Lot 2200, Plan SWO-05-000888, Cad.
291, Pili Cadastre; both Filipino citizens, residents of #14 Joaquin St., Corinthian Garden, Quezon
City
and
San
Juan,
Pili,
Camarines
Sur
respectively;
2. Ordering the dismissal of the application in the Cadastral proceeding with respect to Lots 2199
and
2200,
Cad.
291,
Pili
Cadastre
under
CAD
Case
No.
N-9;
3. After finality of this decision, let the corresponding decree of registration be issued by the
Administrator, Land Registration Authority to the herein applicants above-mentioned.
SO ORDERED.[16]
The Republic appealed the decision to the CA on the ground that the court a quo erred in granting
petitioners' application for registration of Lots 2199 and 2200 despite their failure to show
compliance with the requirements of the law. In addition, the Republic asserted that the land was
classified as public forest land; hence, it could not be subject to appropriation and alienation.
As aforesaid, the CA reversed the trial court's decision on August 26, 2005, and dismissed
petitioners' application for land registration. The CA considered the petition to be governed by
Section 48(b) of Commonwealth Act (C.A.) No. 141 or the Public Land Act, as amended, and held
that petitioners were not able to present incontrovertible evidence that the parcels of land sought
to be registered are alienable and disposable.[17] The CA relied on the testimony of Lamberto
Orcena, Land Management Officer III of CENRO, Iriga City, who testified that prior to October 30,
1986, the entire area encompassing the right side of the Naga-Legaspi Highway, including the
subject properties, was classified as forest land. According to the CA, even if the area within which
the subject properties are located is now being used for residential and commercial purposes, such
fact will not convert the subject parcels of land into agricultural land. [18] The CA stressed that there
must be a positive act from the government declassifying the land as forest land before it could be
deemed
alienable
or
disposable
land
for
agricultural
or
other
purposes. [19]
Additionally, the CA noted that the lands sought to be registered were declared disposable public
land only on October 30, 1986. Thus, it was only from that time that the period of open, continuous
and
notorious
possession
commenced
to
toll
against
the
State.
Aggrieved, petitioners are now before this Court via the present appeal, raising the sole issue of
whether the appellate court erred in dismissing their application for registration of title on the
ground that they failed to prove compliance with the requirements of Section 48(b) of the Public
Land
Act,
as
amended.
Petitioners insist that the subject properties could no longer be considered and classified as forest
land since there are buildings, residential houses and even government structures existing and
standing on the land.[20] In their Memorandum,[21] petitioners point out that the original owner and
possessor of the subject land was the Municipal Government of Pili which was established in 1930.
The land was originally part of the municipal ground adjacent to the Municipal Building located at
the right side of the Naga-Legaspi National Highway. [22] From 1949, when L. Yu Chang acquired the
property through barter and up to the filing of petitioners' application in 1997, petitioners and their
predecessors-in-interest had been in actual physical and material possession of the land in the
concept of an owner, notorious and known to the public and adverse to the whole world.
The Republic, through the OSG, for its part, maintains that petitioners failed to prove their open,
continuous, exclusive and notorious possession of the subject lots for the period of time required by
law. The OSG also submits that the subject lands were declared as alienable and disposable only on
October
30,
1986.
We
deny
the
petition
for
lack
of
merit.
Section 48(b) of the Public Land Act, as amended by P.D. 1073, under which petitioners' application
was filed, provides:
SEC. 48. The following described citizens of the Philippines, occupying lands of the public domain or
claiming to own any such lands or an interest therein, but whose titles have not been perfected or
completed, may apply to the Regional Trial Court of the province or city where the land is located
for confirmation of their claims and the issuance of a certificate of title therefor, under the Property
Registration
Decree,
to
wit:
(b) Those who by themselves or through their predecessors[-]in[-]interest have been in the open,
continuous, exclusive, and notorious possession and occupation of alienable and disposable
agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, since
June 12, 1945, except when prevented by war or force majeure. These shall be conclusively
presumed to have performed all the conditions essential to a Government grant and shall be
entitled
to
a
certificate
of
title
under
the
provisions
of
this
chapter.
Under this provision, in order that petitioners' application for registration of title may be granted,
they must first establish the following: (1) that the subject land forms part of the disposable and

alienable lands of the public domain and (2) that they have been in open, continuous, exclusive and
notorious possession and occupation of the same under a bona fide claim of ownership, since June
12, 1945, or earlier.[24] Applicants must overcome the presumption that the land they are applying
for is part of the public domain and that they have an interest therein sufficient to warrant
registration
in
their
names
arising
from
an
imperfect
title. [25]
In the instant case, petitioners did not adduce any evidence to the effect that the lots subject of
their application are alienable and disposable land of the public domain. Instead, petitioners
contend that the subject properties could no longer be considered and classified as forest land since
there are building structures, residential houses and even government buildings existing and
standing on the area. This, however, is hardly the proof required under the law. As clarified by this
Court in Heirs of Jose Amunategui v. Director of Forestry,[26] a forested area classified as forest land
of the public domain does not lose such classification simply because loggers or settlers may have
stripped it of its forest cover. Parcels of land classified as forest land may actually be covered with
grass or planted with crops by kaingin cultivators or other farmers. "Forest lands" do not have to be
on mountains or in out-of-the-way places. The classification of land is descriptive of its legal nature
or status and does not have to be descriptive of what the land actually looks like. [27] Unless and until
the land classified as forest land is released in an official proclamation to that effect so that it may
form part of the disposable agricultural lands of the public domain, the rules on confirmation of
imperfect title do not apply.[28] As aptly held by the appellate court:
[T]he fact that the area within which the subject parcels of land are located is being used for
residential and commercial purposes does not serve to convert the subject parcels of land into
agricultural land. It is fundamental that before any land may be declassified from the forest group
and converted into alienable or disposable land for agricultural or other purposes, there must be a
positive act from the government. A person cannot enter into forest land and by the simple act of
cultivating a portion of that land, earn credits towards an eventual confirmation of imperfect title.
The Government must first declare the forest land to be alienable and disposable agricultural land
before the year of entry, cultivation and exclusive and adverse possession can be counted for
purposes
of
an
imperfect
title. [29]
[30]
Moreover, during the hearing of petitioners' application, the Republic presented a Report
of Rene
Gomez, Land Investigator/Inspector, CENRO No. V-2-3, which disclosed that the lots applied for by
the petitioners were classified as alienable and disposable under Project No. 9-E, L.C. Map No. 3393
and released and certified as such only on October 30, 1986. A Compliance[31] dated January 19,
1999 submitted by OIC-CENR Officer Joaquin Ed A. Guerrero to the trial court also stated that Lots.
2199 and 2200 of Cad. 291 were "verified to be within Alienable and Disposable area under Project
No. 9-E, L.C. Map No. 3393, as certified on October 30, 1986 by the then Bureau of Forestry".
Evidently, therefore, the subject lots were declared alienable and disposable only on October 30,
1986. Prior to that period, the same could not be the subject of confirmation of imperfect title.
Petitioners' possession of the subject forest land prior to the date when it was classified as alienable
and disposable is inconsequential and should be excluded from the computation of the period of
possession.[32] To reiterate, it is well settled that possession of forest land, prior to its classification
as alienable and disposable land, is ineffective since such possession may not be considered as
possession in the concept of owner. [33] The adverse possession which can be the basis of a grant of
title in confirmation of imperfect title cases cannot commence until after forest land has been
declared
and
alienable.[34]
Much as this Court wants to conform to the State's policy of encouraging and promoting the
distribution of alienable public lands to spur economic growth and remain true to the ideal of social
justice, our hands are tied by the law's stringent safeguards against registering imperfect titles. [35]
Here, petitioners failed to present "well-nigh incontrovertible" evidence necessary to prove their
compliance of the requirements under Section 48(b) of C.A. No. 141. Hence, the Court of Appeals
did not err in dismissing their application for confirmation and registration of title.
WHEREFORE, the petition is hereby DENIED. The Decision dated August 26, 2005 and the
Resolution dated February 13, 2006 of the Court of Appeals in CA-G.R. CV No. 67430 are hereby
AFFIRMED.
With
costs
against
the
petitioners.
SO ORDERED.
[G.R.
No.
156318
:
September
05,
2011]
SPOUSES ANSELMO[1] AND PRISCILLA BULAONG, PETITIONERS, VS. VERONICA GONZALES,
RESPONDENT.
DECISION
BRION, J.:
Petitioners Anselmo Bulaong and Priscilla Bulaong - collectively referred to as the Bulaongs - seek,
through their petition for review on certiorari, the reversal of the decision[2] of the Court of Appeals
(CA) dated July 31, 2002 in CA-G.R. SP No. 55423 and the subsequent resolution of November 27,
2002[3] reiterating this decision. These CA rulings reversed and set aside the decision [4] of the
Regional Trial Court (RTC) of Malolos, Bulacan, Branch 12, that ordered the cancellation of Transfer
Certificate of Title (TCT) No. T-62002 and TCT No. T-62003.
FACTUAL
ANTECEDENTS
This case traces its roots to the conflicting claims of two sets of parties over two parcels of land.
The first parcel of land, with an area of 237 square meters and covered by TCT No. T-249639, [5] was
originally registered in the name of Fortunato E. Limpo, married to Bertha Limpo. [6] The other parcel
of land, with an area of 86 square meters and covered by TCT No. T-249641, [7] was originally
registered in the names of Pacifica E. Limpo, married to Nicanor C. Sincionco, and Fortunato E.
Limpo,
married
to
Bertha
Limpo.[8]
These parcels of land were mortgaged by the daughter of Fortunato and Bertha Limpo, Regina

Christi Limpo, upon the authority of her father, [9] to the Bulaongs, to secure a loan in the amount of
P4,300,000.00. The mortgage was evidenced by a Deed of Mortgage dated January 13, 1993. [10]
The Bulaongs alleged that before they executed the mortgage, Regina gave them the owner's
duplicates of title of the two properties. In early January 1993 (the exact date is unknown but
prior to the execution of the mortgage), Anselmo Bulaong, together with his counsel, Atty. Roberto
Dionisio, allegedly went to the Office of the Register of Deeds of Bulacan to check the titles of the
properties to be mortgaged. According to the Bulaongs, the Register of Deeds, Atty. Elenita
Corpus, assured them that TCT Nos. T-249639 and T-249641 were completely clear of any liens or
encumbrances from any party. Relying on this assurance, Anselmo Bulaong agreed to the execution
of
the
mortgage
over
the
two
properties. [11]
After the execution of the mortgage, the Bulaongs once again went to the Office of the Register of
Deeds of Bulacan to register and annotate the mortgage on the titles. They learned then that the
Register of Deed's copies of the two titles were among the records that were burned in the fire that
destroyed the entire office of the Register of Deeds of Bulacan on March 7, 1987. Atty. Elenita
Corpus convinced them to cause the reconstitution of the originals of the titles, and further assured
them that the mortgage over the properties would be protected since a copy of the Deed of
Mortgage
had
already
been
given
to
her
office
for
annotation. [12]
On February 4, 1993, the newly reconstituted titles were issued - TCT No. RT-29488 replaced TCT
No. T-249639, and TCT No. RT-22489 replaced TCT No. T-249641, still in the names of Fortunato
Limpo, and of Pacifica Limpo and Fortunato Limpo, respectively.Thereafter, on February 24, 1993,
new titles were again issued upon the extrajudicial settlement of the estate of Regina's parents.
Thus, TCT No. RT-29488 was cancelled and TCT No. T-30395 was issued in its place, with Regina
replacing her parents as the registered owner; similarly, TCT No. RT-22489 was cancelled and TCT
No. T-30396 was issued in the names of Pacifica Limpo and Regina Limpo, as her parents' heir. [13]
To the Bulaongs' astonishment, the new titles in Regina's name now contained the following entries:
TCT
No.
T-30395
Entry No. 5306; Kind: Condition: The property herein described is subject to the prov. of sec. 4, rule
74 of the rules of court. date of instrument: 1-13-93; date of inscription: 2-24-93 at 10:42 a.m.
(SGD.)
ELENITA
E.
CORPUS
Register of Deeds
Entry No. 5484; Kind: Mortgage: Exec. In favor of: Sps. Anselmo Bulaong & Priscilla Bulaong;
Condition: Covering the parcel of land herein described, for the sum of P4,300,000.00 subject to all
the conditions stipulated in the deed of mortgage on file in this office. Doc. No. 428, Page 86, Book
XXX, S. of 1993, N.P. - Roberto Dionisio of Mal. Bul. Date of Instrument: 1-13-93; date of inscription 3-1-93 at 9:20 a.m.
(SGD.)
ELENITA
E.
CORPUS
Register of Deeds
/5306
(NOTE:
Proceed
to
Entry
no.
5484)
Entry No. 7808: Kind: NOTICE OF LEVY ON EXECUTION: Conditions: Notice is hereby given that by
virtue of the Writ of Execution, issued in Crim. Cases Nos. 9638 to 9646-M, entitled "People of the
Philippines v. Reggie Christi Schaetchen Limpo and Maria Lourdes (Bong) Diaz y Gamir, et al.,
Accused" by the Regional Trial Court, Third Jud. Region, Branch 12, Malolos, Bulacan, under date of
Dec. 29, 1992, and at the instance of the private complainant Veronica R. Gonzales, thru counsel,
levy on execution is hereby made upon all the rights, shares, interests and participations of accused
Reggie Christi Schaetchen[14] over the real properties described in T-249641 and T-249639, by virtue
of Deeds of Absolute Sale executed by former registered owners in favor of Reggie Christi
Schaetchen dated November 5, 1991, together with all the improvements existing thereon, was
levied on execution preparatory to the sale of the same without prejudice to third persons having
better right thereof and to any valid lien and encumbrances. Date of instrument - Jan. 4, 1993; Date
of inscription - Jan. 4, 1993 at 11:50 a.m.
(SGD.)
ELENITA
E.
CORPUS
Entry No. 7808: Kind: NOTICE OF LEVY ON EXECUTION: Conditions: Notice is hereby given that by
virtue of the Writ of Execution, issued in Crim. Cases Nos. 9638 to 9646-M, entitled "People of the
Philippines v. Reggie Christi Schaetchen Limpo and Maria Lourdes (Bong) Diaz y Gamir, et al.,
Accused" by the Regional Trial Court, Third Jud. Region, Branch 12, Malolos, Bulacan, under date of
Dec. 29, 1992, and at the instance of the private complainant Veronica R. Gonzales, thru counsel,
levy on execution is hereby made upon all the rights, shares, interests and participations of accused
Reggie Christi Schaetchen over the real properties described in T-249641 and T-249639, by virtue of
Deeds of Absolute Sale executed by former registered owners in favor of Reggie Christi Schaetchen
dated Nov. 5, 1991, together with all the improvements existing thereon, was levied on execution
preparatory to the sale of the same without prejudice to third persons having better right thereof
and to any valid lien and encumbrances. Date of instrument - Jan. 4, 1993; Date of inscription - Jan.
4,
It appears that a certain Veronica Gonzales had filed a criminal case for estafa against Regina with
the RTC of Bulacan, Branch 12. [17] On October 28, 1991, the RTC rendered a decision acquitting
Regina, but at the same time ordering her to pay Veronica actual damages in the total amount of
P275,000.00.[18] By virtue of a writ of execution issued on December 29, 1992, the above-quoted
notice of levy was recorded in the Primary Entry Book of the Registry of Bulacan on January 4, 1993.
However, this was not annotated on the titles themselves because at the time of the levy, the
properties had not yet been transferred to Regina, but were still registered in the name of her
parents.[19]
Based on the annotation referring to the notice of levy, the subject of the levy was Regina's interest
in the properties which, in turn, was anchored on a Deed of Absolute Sale allegedly executed by her
parents on November 5, 1991 to transfer their interest in both properties to her. Notably, Regina
never
registered
this
sale
with
the
Register
of
Deeds.

To satisfy Regina's judgment debt, the two lots were sold at public auction on June 8, 1993 to
Veronica, the only bidder, for P640,354.14.[20] The Certificate of Sale was annotated on the titles on
June 8, 1993 as Entry No. 2075. Upon the lapse of the one year redemption period on June 20,
1994, Veronica's titles over the properties were consolidated. A final deed of sale was issued in
Veronica's name and annotated as Entry No. 40425 on TCT Nos. T-30395 and T-30396 on June 24,
1994.[21]
On the other hand, the Bulaongs also had the mortgage extrajudicially foreclosed, with the sheriff
conducting the auction sale on August 22, 1994. The Bulaongs were the highest bidders, buying the
properties for the sum of P4,300,000.00. They also paid the corresponding capital gains tax of
P215,000.00, plus P64,500.00 for the documentary stamp tax, which were required before the titles
to the lots could be transferred in their names. The Certificate of Sale in their favor was inscribed on
August 23, 1994 on TCT No. T-30395 and TCT No. T-30396 as Entry No. 46739. [22]
Veronica thereafter filed a petition for the surrender to the Register of Deeds of the owner's copies
of TCT Nos. T-30395 and T-30396 with the RTC of Malolos, docketed as LRC Case No. P-292. On
December 16, 1994, the RTC granted the petition and ordered Regina to surrender her owner's
copies of the titles; should Regina fail to comply, the RTC ordered the Register of Deeds to cancel
these titles and issue new ones in Veronica's name. Complying with this order, the Register of
Deeds cancelled TCT Nos. T-30395 and T-30396, and issued TCT No. T-62002 in Veronica's name,
and TCT No. T-62003 in the name of Veronica and Pacifica Limpo. These new titles were "clean" and
did
not
contain
any
annotations,
liens
or
encumbrances.
The Bulaongs thus filed a petition for mandamus with the RTC of Bulacan against Ramon Sampana,
the incumbent Register of Deeds of Bulacan, and Veronica, praying that the court order Sampana to
cancel TCT Nos. T-62002 and T-62003, and issue new titles in their names; and order the
respondents therein to pay them moral and exemplary damages, and attorney's fees.
On July 30, 1999, the RTC ruled in favor of the Bulaongs. According to the RTC, allowing Veronica to
levy on the properties worth at least P5,000,000.00 for a judgment of P275,000.00 would result in
gross unjust enrichment. The RTC thus ordered the Register of Deeds of Bulacan to issue new titles
in the name of the Bulaongs, but only after the Bulaongs had reimbursed the amount of
P275,000.00 to Veronica, with interest. The RTC also ordered Veronica to pay the Bulaongs
P50,000.00 as attorney's fees. The dispositive portion of the RTC decision reads:
WHEREFORE, conformably with all the foregoing, judgment is hereby rendered:- Annulling and
cancelling Transfer Certificates of Title Nos. T-62002 in the name of defendant Veronica Gonzales,
and T-62003 in the name of defendant Veronica Gonzales and Pacifica E. Limpo married to Nicanor
C. Sincioco;- Ordering the Ex-Officio Sheriff of Bulacan to execute a final deed of sale in favor of
petitioner spouses Anselmo Bulaong and Pr[i]scilla Bulaong on the basis of the registered Certificate
of Sale executed by said court officer on August 23, 1994, in favor of said spouses-mortgagee,
without the owner-mortgagors exercising the right of redemption since then;- Ordering the Register
of Deeds of Bulacan to issue new titles, in place of Transfer Certificate of Title Nos. T-62002 and T62003, this time in the name of petitioner spouses Anselmo Bulaong and Pr[is]cilla Bulaong, as soon
as the aforesaid final deed of sale in their favor is executed by the Ex-Officio Sheriff of Bulacan and
only after said spouses shall have paid and/or reimbursed Veronica Gonzales' lien as judgment
creditor in the amount of P275,000.00, plus interests at the legal rate computed from November 19,
1995, until fully paid and satisfied;- Order[ing] herein defendants Veronica R. Gonzales and the
Register of Deeds of Bulacan upon notice of this judgment, not to effect any transfer, encumbrance
or any disposition whatsoever of the parcels of land covered by Transfer Certificates of Title Nos.
62002 and T-62003, or any part thereof, right or interest therein, either by sale or any form of
conveyance, lien or encumbrance; and- Ordering only defendant Veronica R. Gonzales to pay herein
petitioners P50,000.00 as just and equitable attorney's fees, and the costs of suit, defendant Ramon
C. Sampana as the Register of Deeds of Bulacan having merely performed his ministerial duty of
following the court order of issuing titles to defendant Gonzales.
No pronouncement as to moral and exemplary damages alleged in the petition but not even
testified
to
by
petitioners
at
the
trial. [23]
Both parties appealed to the CA, with the case docketed as CA-G.R. SP No. 55423.
THE
COURT
OF
APPEALS
DECISION
In its July 31, 2002 decision, the CA upheld the validity of the Notice of Levy on Execution, noting
that it created a lien in favor of the judgment creditor over the property. According to the CA, when
the Bulaongs received the owners' copies of TCT Nos. T-30395 and T-30396, the Notice of Levy was
already annotated on the titles and, thus, should have put them on guard. As mortgagees of the
lots, the Bulaongs had the option to redeem the properties within the redemption period provided
by law. Since they failed to avail of this remedy, the consolidation of titles in Veronica's name was
proper.
THE
PETITION
The Bulaongs filed the present petition, raising the following issues:
a)
Whether
Entry
No.
7808
is
valid;
b)
Whether
Veronica
has
a
superior
right
over
the
properties;
and
c) Assuming the notice of levy earlier annotated in favor of Veronica to be valid, whether there was
a valid foreclosure sale.
THE
COURT'S
RULING
We
GRANT
the
petition.
Procedural
issues
Time and again, we have stated that petitions for review on certiorari shall only raise questions of
law, as questions of fact are not reviewable by this Court. The main issue of who has a better right
over the disputed properties is not only a question of law but one that requires a thorough review of
the presented evidence, in view particularly of the Bulaongs' allegation that fraud attended the
annotation of Entry No. 7808 in the titles. Thus, in the usual course, we would have denied the
present petition for violation of Section 1, Rule 45 of the Rules of Court, which provides:

Section 1. Filing of petition with Supreme Court. -- A party desiring to appeal by certiorari from a
judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial
Court or other courts whenever authorized by law, may file with the Supreme Court a verified
petition for review on certiorari. The petition shall raise only questions of law which must be
distinctly
set
forth.
This rule, however, admits of several exceptions. Questions of fact may be reviewed, among others,
when the lower court makes inferences that are manifestly mistaken, and when the judgment of the
CA is based on a misapprehension of facts.[24] As will be apparent in the discussions below, these
exceptional circumstances are present in the present case. A review of the evidence, therefore, is
not only allowed, but is necessary for the proper resolution of the presented issues.
It has not escaped our attention that the Bulaongs appear to have erroneously filed a petition for
mandamus for what is essentially an action to assail the validity of Veronica's certificates of title
over the subject properties. This lapse, however, is not legally significant under the well-settled rule
that the cause of action in a complaint is not the title or designation of the complaint, but the
allegations in the body of the complaint. The designation or caption is not controlling as it is not
even an indispensable part of the complaint; the allegations of the complaint control. [25] We thus
proceed to resolve the case, bearing in mind that the relief the Bulaongs sought before the lower
court was to nullify Veronica's certificates of title and to order the Register of Deeds to issue new
titles
in
their
name.
Redemption
not
the
proper
remedy
The CA faulted the Bulaongs for not redeeming the properties from Veronica when they had the
option of doing so. For failing to exercise this right, the CA concluded that the consolidation of the
titles
to
the
lots
in
Veronica's
name
thus
became
a
matter
of
course.
We
disagree.
At the outset, we observe that this is not a simple case of determining which lien came first. A
perusal of the Bulaongs' submissions to the Court shows that they have consistently maintained
that the levy and the corresponding execution sale in Veronica's favor are null and void. Had the
Bulaongs merely exercised the right of redemption, they would have been barred from raising these
issues in court, pursuant to our ruling in Cometa v. Intermediate Appellate Court: [26]
The respondent appellate court's emphasis on the failure of the petitioner to redeem the properties
within the period required by law is misplaced because redemption, in this case, is inconsistent with
the petitioner's claim of invalidity of levy and sale. Redemption is an implied admission of the
regularity of the sale and would estop the petitioner from later impugning its validity on that
ground.[27]
(emphasis
ours)
The
Bulaongs
were
thus
justified
in
their
refusal
to
redeem
the
properties.
Annotation
is
valid
The Bulaongs assail the validity of Entry No. 7808 (relating to the Notice of Levy on Execution in
Veronica's favor) on the two titles, asserting that it is null and void for being a fraudulent entry. In
support of this contention, they note the following suspicious circumstances: (a) although Entry No.
7808 has a higher number and appears after Entry No. 5484 (corresponding to the Bulaongs'
mortgage) on the titles, Entry No. 7808 appeared in an earlier volume of the Book of Entries; and
(b) although the Notice of Levy on Execution was purportedly presented to the Registry of Bulacan
on January 4, 1993, or prior to the date when the Bulaongs' deed of mortgage was presented on
January 13, 1993, the Notice of Levy on Execution, Entry No. 7808, was numbered and placed after
the
mortgage,
Entry
No.
5484,
on
the
titles.
We agree that these circumstances render the Notice of Levy on Execution, annotated on the titles,
highly suspicious. These circumstances, however, can be sufficiently explained when the records
are
examined.
The records show that on January 4, 1993, Veronica went to the Registry of Bulacan with the Notice
of Levy on Execution, requesting that the notice be registered. While the Register of Deeds placed
the Notice of Levy on Execution in the Primary Entry Book, she did not immediately make a
registration when a question arose regarding the registrability of the notice; the question
necessitated the submission of a consulta to the Land Registration Authority (LRA) on January 25,
1993.[28]
The LRA Administrator responded to the consulta only on February 10, 1993.[29] Thus, the Notice of
Levy on Execution was not immediately annotated on the newly reconstituted titles, which were
issued on February 4, 1993. It was only when new titles were again issued to reflect the
extrajudicial settlement of the estate of Regina's parents on February 24, 1993 that the Notice of
Levy
on
Execution
appeared
on
the
titles
as
Entry
No.
7808.
The apparent discrepancy in the numbering of the Notice of Levy on Execution and the date of
inscription on the certificates of title is suitably explained by Section 56 of Presidential Decree No.
1529 whose pertinent portion states:
Section 56. Primary Entry Book; fees; certified copies. - Each Register of Deeds shall keep a primary
entry book in which, upon payment of the entry fee, he shall enter, in the order of their reception,
all instruments including copies of writs and processes filed with him relating to registered land. He
shall, as a preliminary process in registration, note in such book the date, hour and minute of
reception of all instruments, in the order in which they were received. They shall be regarded as
registered from the time so noted, and the memorandum of each instrument, when made on the
certificate of title to which it refers, shall bear the same date: Provided, that the national
government as well as the provincial and city governments shall be exempt from the payment of
such fees in advance in order to be entitled to entry and registration.
In other words, the order of entries in the Primary Entry Book determines the priority in registration.
Thus, the Register of Deeds merely complied with the law when she fixed Entry No. 7808's date of
inscription as January 4, 1993, to coincide with the date when the Notice of Levy on Execution was
presented
and
inscribed
in
the
Primary
Entry
Book.
The late annotation of the levy on execution on the titles did not at all lessen its effectivity.

Jurisprudence has already established the rule that the entry of the notice of levy on execution in
the Primary Entry Book, even without the corresponding annotation on the certificate of titles, is
sufficient notice to all persons that the land is already subject to the levy. [30] As we explained in
Armed Forces and Police Mutual Benefit Association, Inc. v. Santiago:[31]
The notice of levy on attachment in favor of petitioner may be annotated on TCT No. PT-94912.
Levin v. Bass (91 Phil. 420 [1952]; see also Dr. Caviles, Jr. v. Bautista, 377 Phil. 25; 319 SCRA 24
[1999]; Garcia v. Court of Appeals, 184 Phil. 358; 95 SCRA 380 [19890]) provided the distinction
between voluntary registration and involuntary registration. In voluntary registration, such as a
sale, mortgage, lease and the like, if the owner's duplicate certificate be not surrendered and
presented or if no payment of registration fees be made within fifteen (15) days, entry in the day
book of the deed of sale does not operate to convey and affect the land sold. In involuntary
registration, such as an attachment, levy upon execution, lis pendens and the like, entry thereof in
the day book is a sufficient notice to all persons of such adverse claim.
The entry of the notice of levy on attachment in the primary entry book or day book of the Registry
of Deeds on September 14, 1994 is sufficient notice to all persons, including the respondent, that
the land is already subject to an attachment. The earlier registration of the notice of levy on
attachment already binds the land insofar as third persons are concerned. [32] (emphases ours)
Consequently, when the Register of Deeds placed the Notice of Levy on Execution in the Primary
Entry Book on January 4, 1993, this entry already bound third persons to the notice entered.
ValiditY
of
the
Levy
i.
Regina's
interest
in
the
properties
is
not
established
The levy on execution for judgment is "the act x x x by which an officer sets apart or appropriate[s,]
for the purpose of satisfying the command of the writ, a part or the whole of the judgment debtor's
property."[33] Every interest which the judgment debtor may have in the property may be subjected
to levy on execution.[34] As established by the Court in Reyes v. Grey:[35]
The term "property" as here applied to lands comprehends every species of title, inchoate or
complete; legal or equitable. This statute authorizes the sale under execution of every kind of
property, and every interest in property which is, or may be, the subject of private ownership and
transfer. It deals with equitable rights and interests as it deals with legal, without anywhere
expressly recognizing or making any distinction between them. [emphases ours]
In Reyes, the Court set the standard to be applied in determining the kind of property that can be
subject
to
attachment:
We think the real test, as to whether or not property can be attached and sold upon execution is -does the judgment debtor hold such a beneficial interest in such property that he can sell or
otherwise dispose of it for value? If he does, then the property is subject to execution and payment
of
his
debts.[36]
(emphasis
and
underscoring
ours)
Applying the test in Reyes, the Court, in Gotauco & Co. v. Register of Deeds of Tayabas,[37]
recognized as valid the inscription of a notice of levy on execution on the certificates of title, even
though the titles were not in the name of the judgment debtor (Rafael Vilar). According to the Court,
while the certificates of title were still registered in the name of Florentino Vilar, since Rafael Vilar
presented a copy of a petition filed with the lower court, from which it could be inferred that
Florentino Vilar was dead and Rafael Vilar was one of his heirs, Rafael had an interest in Florentino's
property that could properly be the subject of attachment, even if his participation in Florentino's
property
was
indeterminable
before
the
final
liquidation
of
the
estate.
Similarly, in Pacific Commercial Co. v. Geaga,[38] the Court held that although the Register of Deeds
may properly reject an attachment where it appears that the titles involved are not registered in the
name of the defendants (debtors), that rule yields to a case where there is evidence submitted to
indicate that the defendants have present or future interests in the property covered by said titles,
regardless of whether they still stand in the names of other persons. The fact that the present
interests of the defendants are still indeterminate, and even though there was no judicial
declaration of heirship yet, is of no consequence for the purpose of registering the attachment in
question. This is the case since what is being attached and what may be later sold at public auction
in pursuance of the attachment cannot be anything more than whatever rights, titles, interests and
participations which the defendants may or might have in the property so attached. In other words,
if they had actually nothing in the property, then nothing is affected and the property will remain
intact.[39] This rule is expressed in Section 35, Rule 39 of the old Rules of Civil Procedure, which
provides:
Upon the execution and delivery of said deed [of conveyance and possession], the purchaser, or
redemptioner, or his assignee, shall be substituted to and acquire all the right, title, interest and
claim of the judgment debtor to the property as of the time of the levy[.] [emphases ours]
Although we recognize the validity of the annotation of the levy on the execution in the present
case, the question of whether the levy itself is valid remains to be determined. To do this, Regina's
interest in the subject properties at the time of the levy has to be ascertained. To recall, Veronica's
notice of levy on execution is based on Regina's interest in the two properties, which she acquired
via the Deed of Absolute Sale purportedly executed by her parents in her favor on November 5,
1991. But is this Deed of Absolute Sale a sufficient evidence of Regina's interest in the subject
properties?
After
carefully
reviewing
the
evidence
on
record,
we
rule
in
the
negative.
To begin with, not only were the properties subject of the attachment not registered in Regina's
name, the Deed of Absolute Sale on which Regina based her interest was not even annotated on
these titles. While Regina purportedly purchased her parents' rights to the subject properties in
1991, she never asserted her rights over these properties by presenting the Deed of Absolute Sale
to the Register of Deeds for registration and annotation on the titles. As a matter of fact, it was
Veronica, and not Regina, who presented the Deed of Absolute Sale to the Register of Deeds.
More importantly, from the records, it is clear that the subject properties were finally registered in
Regina's name, not by virtue of the 1991 Deed of Absolute Sale, but by virtue of succession,
specifically by the "Adjudication" that Regina filed with the Register of Deeds on February 24, 1993,

[40]

pursuant to Section 1, Rule 74 of the Rules of Court. [41] The procedure by which the properties
were registered in Regina's name suggests that when Regina's parents died, the subject lots still
formed part of Regina's parents' estate, and were not, as Veronica claims, sold to Regina in 1991,
thereby casting doubt to the validity of the Deed of Absolute Sale. As the Bulaongs reason in their
memorandum, if the subject properties had already been sold to Regina as early as 1991, why
would
they
still
be
considered
a
part
of
her
parents'
estate
in
1993? [42]
Another point to consider is that Regina dealt with the Bulaongs as her father's representative when
they were negotiating the mortgage over the properties. [43] If she had already acquired her parents'
interest in these properties in 1991, she would not have needed any authority from her father to
execute the mortgage with the Bulaongs; she would have done so in her own capacity.
These facts, taken together, lead us to doubt that Regina had any interest in the properties at the
time of the levy. Thus, unlike in the previously cited cases where the debtors, although possessing
merely an inchoate interest in the properties at the time of the levy, had interests that were
established with reasonable certainty and could be the subject of attachment; in the present case,
the evidence on record fails to prove that Regina actually had any interest in the properties which
could
be
the
subject
of
levy.
The spring cannot rise higher than its source. [44] Since Regina had no established interest in the
subject properties at the time of the levy, Veronica's levy had nothing to attach to in the subject
properties.
ii.
Unregistered
sale
of
land
cannot
bind
third
parties
Even assuming that the Deed of Absolute Sale in Regina's favor was valid, we still cannot uphold
the
validity
of
the
levy
and
execution
sale
in
Veronica's
favor.
The general rule in dealing with registered land is set forth in Section 51 of P.D. No. 1529:
Section 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, leases 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. [emphases ours]
From the standpoint of third parties, a property registered under the Torrens system remains, for all
legal purposes, the property of the person in whose name it is registered, notwithstanding the
execution of any deed of conveyance, unless the corresponding deed is registered. [45] Simply put, if
a sale is not registered, it is binding only between the seller and the buyer, but it does not affect
innocent
third
persons.
Undoubtedly, Veronica's claim on the properties is rooted in the unregistered Deed of Absolute Sale
between Regina and her parents. The Bulaongs do not appear to have had any knowledge that this
sale ever took place. To recall, Regina gave the Bulaongs the owner's duplicate certificates of the
properties, which showed that the properties were registered in the names of her parents, Fortunato
and Bertha Limpo. It thus appears that the Bulaongs first learned about the sale between Regina
and her parents when they received the newly issued titles in Regina's name which contained the
annotation
of
the
levy
in
Veronica's
favor.
One of the principal features of the Torrens system of registration is that all encumbrances on the
land shall be shown, or at least intimated upon the certificate of title and a person dealing with the
owner of the registered land is not bound to go behind the certificate and inquire into transactions,
the existence of which is not there intimated. [46] Since the Bulaongs had no knowledge of the
unregistered sale between Regina and her parents, the Bulaongs can neither be bound by it, nor
can they be prejudiced by its consequences. This is but the logical corollary to the rule set forth in
Section 51 of P.D. No. 1529, in keeping with the basic legal maxim that what cannot be done
directly
cannot
be
done
indirectly.
Execution
sale
in
Veronica's
favor
was
highly
irregular
We also find that the execution sale in favor of Veronica is invalid because Regina's interest in both
lots was sold together, in violation of Sections 15 and 21, Rule 39 of the old Rules of Court. The
pertinent portions of these provisions provide:
Section 15. Execution of money judgments. - The officer must enforce an execution of a money
judgment by levying on all the property, real and personal of every name and nature whatsoever,
and which may be disposed of for value, of the judgment debtor not exempt from execution, or on a
sufficient amount of such property, if there be sufficient, and selling the same, and paying to the
judgment creditor, or his attorney, so much of the proceeds as will satisfy the judgment. Any excess
in the proceeds over the judgment and accruing costs must be delivered to the judgment debtor,
unless otherwise directed by the judgment or order of the court. When there is more property of the
judgment debtor than is sufficient to satisfy the judgment and accruing costs, within the view of the
officer, he must levy only on such part of the property as is amply sufficient to satisfy the judgment
and
costs.
Section 21. How property sold on execution. Who may direct manner and order of sale. - All sales of
property under execution must be made at public auction, to the highest bidder, between the hours
of nine in the morning and five in the afternoon. After sufficient property has been sold to satisfy
the execution, no more shall be sold. When the sale is of real property, consisting of several known
lots, they must be sold separately; or, when a portion of such real property is claimed by a third
person,
he
may
require
it
to
be
sold
separately.
[emphases
ours]
Where the property to be sold consists of distinct lots, tracts or parcels, or is susceptible of division
without injury, it should be offered for sale in parcels and not en masse, for the reason that a sale in
that manner will generally realize the best price, and will not result in taking from the debtor any
more property than is necessary to satisfy the judgment. It will also enable the defendant to

redeem any one or more of the parcels without being compelled to redeem all the land sold. [47] A
sale of additional land or personal property after enough has been sold to satisfy the judgment is
[48]
unauthorized.
While the general policy of the law is to sustain execution sales, the sale may be set aside where
there is a resulting injury based on fraud, mistake and irregularity. [49] Where the properties were
sold together when the sale of less than the whole would have been sufficient to satisfy the
[50]
judgment
debt,
the
sale
may
be
set
aside.
[51]
In Caja v. Nanquil,
we took judicial notice of the fact that the value of a property was usually
bigger than the amount for which it could be mortgaged. Since the two properties, taken together,
were mortgaged to the petitioners to secure a loan worth P4,300,000.00, we can easily assume that
these properties are worth at least this amount. Even Veronica does not contest this assumption.
From this premise, we can logically assume that the sale of just one of the lots would have been
sufficient to satisfy the judgment debt. Yet no explanation was provided as to why the sheriff sold
both parcels of land at the execution sale for the paltry sum of P 640,354.14. This act
undoubtedly resulted in great prejudice to the Bulaongs. To our minds, this renders the execution
sale defective, and provides sufficient ground for us to set the sale aside.
For the foregoing reasons, we rule and so hold that the levy and the corresponding execution sale in
Veronica's favor are invalid, and must be set aside. Veronica, however, is not without recourse, as
she
may
still
seek
to
enforce
the
judgment
debt
against
Regina.
WHEREFORE, premises considered, we GRANT the petition and REVERSE the decision of the Court
of Appeals dated July 31, 2002 in CA-G.R. SP No. 55423. We REINSTATE the decision of the Regional
Trial Court, Branch 12, Malolos, Bulacan, dated July 30, 1999 in Civil Case No. 170-M-95, with the
MODIFICATION that petitioners Anselmo Bulaong and Priscilla Bulaong are no longer required to
reimburse Veronica Gonzales for her lien in the amount of P275,000.00, plus interest.
SO ORDERED.

[G.R.
No.
142676
:
June
06,
2011]
EMERITA MUOZ, PETITIONER, VS. ATTY. VICTORIANO R. YABUT, JR. AND SAMUEL GO
CHAN,
RESPONDENTS.
[G.R.
NO.
146718]
EMERITA MUOZ, PETITIONER, VS. SPOUSES SAMUEL GO CHAN AND AIDA C. CHAN, AND
THE BANK OF THE PHILIPPINE ISLANDS, RESPONDENTS.
LEONARDO-DE CASTRO, J.:
Before Us are the following consolidated petitions for review on certiorari under Rule 45 of the Rules of Court.
In G.R. No. 142676, Emerita Muoz (Muoz) is seeking the reversal, annulment, and setting aside of the Decision [1] dated
July 21, 1995 and Resolution [2] dated March 9, 2000 of the Court of Appeals in CA-G.R. SP No. 35322, which affirmed the
Orders [3] dated June 10, 1994 and August 5, 1994 of the Regional Trial Court, Branch 88 (RTC-Branch 88) of Quezon City in
Civil Case No. Q-94-20632. The RTC dismissed Civil Case No. 8286, the forcible entry case instituted by Muoz against
Atty. Victoriano R. Yabut, Jr. (Atty. Yabut) and Samuel Go Chan before the Metropolitan Trial Court (MeTC), Branch 33 of
Quezon City; and nullified the MeTC Order [4] dated May 16, 1994, granting Muoz's prayer for the issuance of a writ of
preliminary
mandatory
injunction
which
restored
possession
of
the
subject
property
to
Muoz
In G.R. No. 146718, Muoz is praying for the reversal, setting aside, and nullification of the Decision [5] dated September
29, 2000 and Resolution [6] dated January 5, 2001 of the Court of Appeals in CA-G.R. SP No. 40019, which affirmed the Orders
[7]
dated August 21, 1995 and October 3, 1995 of the Quezon City RTC, Branch 95 (RTC-Branch 95) in Civil Case No. Q-28580
denying Muoz's Motion for an Alias Writ of Execution and Application for Surrender of the Owner's Duplicate Copy of TCT
No. 53297 [8] against respondents Bank of the Philippine Islands (BPI) and the spouses Samuel Go Chan and Aida C. Chan
(spouses
Chan).
FACTS
The subject property is a house and lot at No. 48 Scout Madrian St., Diliman, Quezon City, formerly owned by Yee L.
Ching. Yee L. Ching is married to Emilia M. Ching (spouses Ching), Muoz's sister. Muoz lived at the subject property
with the spouses Ching. As consideration for the valuable services rendered by Muoz to the spouses Ching's family, Yee
L. Ching agreed to have the subject property transferred to Muoz. By virtue of a Deed of Absolute Sale, seemingly
executed by Yee L. Ching in favor of Muoz, [9] the latter acquired a Transfer Certificate of Title (TCT) No. 186306 covering
the subject property in her name on December 22, 1972. [10] However, in a Deed of Absolute Sale dated December 28, 1972,
Muoz purportedly sold the subject property to her sister, Emilia M. Ching. As a result, TCT No. 186306 was cancelled and
TCT No. 186366 was issued in Emilia M. Ching's name. Emilia M. Ching, in a Deed of Absolute Sale dated July 16, 1979, sold
the subject property to spouses Go Song and Tan Sio Kien (spouses Go), hence, TCT No. 186366 was cancelled and replaced
by
TCT
No.
258977
in
the
spouses
Go's
names.
On October 15, 1979, Muoz registered her adverse claim to the subject property on TCT No. 258977 of the spouses Go.
The next day, on October 16, 1979, Muoz filed a complaint for the annulment of the deeds of absolute sale dated
December 28, 1972 and July 16, 1979, the cancellation of TCT No. 258977 in the spouses Go's names, and the restoration
and revival of TCT No. 186306 in Muoz's name. The complaint was docketed as Civil Case No. Q-28580 and raffled to RTCBranch 95. On October 17, 1979, Muoz caused the annotation of a notice of lis pendens on TCT No. 258977 of the
spouses Go. In an Order dated December 17, 1979, the RTC-Branch 95 granted the spouses Go's motion for the issuance of
a writ of preliminary mandatory injunction and ordered the sheriff to put the spouses Go in possession of the subject
property. The writ was implemented by the sheriff on March 26, 1980, driving Muoz and her housemates away from the
subject
property.
Muoz filed a petition for certiorari and prohibition before the Court of Appeals, assailing the issuance of the writ of
preliminary mandatory injunction, which was docketed as CA-G.R. SP No. 10148. The appellate court dismissed Muoz's
petition on January 4, 1980. Yee L. Ching and his son Frederick M. Ching filed an urgent motion for leave to intervene in CAG.R. SP No. 10148 and for the issuance of a temporary restraining order (TRO). The Court of Appeals issued a TRO.
However, in a Resolution dated March 18, 1980, the appellate court denied the motion to intervene of Yee L. Ching and
Frederick M. Ching, and cancelled the TRO previously issued. Yee L. Ching and Frederick M. Ching challenged before this
Court, in G.R. No. 53463, the Resolution dated March 18, 1980 of the Court of Appeals. Eventually, in a Resolution dated
June 3, 1981, the Court dismissed the petition in G.R. No. 53463, for lack of merit and failure of Yee L. Ching and Frederick M.
Ching to substantially show that the RTC-Branch 95 and the Court of Appeals gravely abused their discretion. In a
subsequent Resolution dated June 21, 1982, the Court clarified that its Resolution of June 3, 1981 was without prejudice to
the continuation of the litigation in Civil Case No. Q-28580 still pending before the trial court, "in order that proper and final
adjudication may be made of whether or not the deed of sale by Emerita L. Muoz in favor of Emilia M. Ching is a real,
genuine and authentic transaction, thereby to settle once and for all the issue of ownership of the property herein in
[11]
question."
Trial
in
Civil
Case
No.
Q-28580
proceeded
before
RTC-Branch
95.
In the meantime, Muoz's adverse claim and notice of lis pendens on TCT No. 258977 was cancelled on October 28, 1982
on the basis of an alleged final judgment in favor of the spouses Go. [12] The spouses Go obtained a loan of P500,000.00

from BPI Family Savings Bank (BPI Family) and to secure the same, they constituted a mortgage on the subject property on
November 23, 1982. [13] When the spouses Go defaulted on the payment of their loan, BPI Family foreclosed the mortgage.
BPI Family was the highest bidder at the auction sale of the subject property. The spouses Go failed to exercise their right of
redemption within the prescribed period, thus, BPI Family was finally able to register the subject property in its name on
October 23, 1987 under TCT No. 370364. [14] Apparently, the original copy of TCT No. 370364 was among those razed in the
fire at the Quezon City Register of Deeds on June 11, 1988. As a result of the administrative reconstitution of the lost title,
TCT No. RT-54376 (370364) was issued to BPI Family. On December 3, 1990, BPI Family executed in favor of the spouses
Samuel Go Chan and Aida C. Chan (spouses Chan) a Deed of Absolute Sale [15] covering the subject property for and in
consideration of P3,350,000.00. Consequently, TCT No. RT-54376 (370364) in the name of BPI Family was cancelled and TCT
No. 53297 was issued in the spouses Chan's names on January 28, 1991. [16] The spouses Chan obtained a loan from BPI
Family on October 2, 1992 for the construction of a building on the subject property, and to secure the same, constituted a
[17]
mortgage
on
the
subject
property
in
favor
of
BPI
Family.
On July 19, 1991, RTC-Branch 95 rendered its Decision [18] in Civil Case No. Q-28580, against Emilia M. Ching, Yee L. Ching,
and the spouses Go (Emilia M. Ching, et al.). It found that Muoz's signature on the Deed of Absolute Sale dated
December 28, 1972 was forged; that Muoz never sold the subject property to her sister, Emilia M. Ching; and that the
spouses Go were not innocent purchasers for value of the subject property. The fallo of the said decision reads:
WHEREFORE, judgment is hereby rendered dismissing for lack of merit [Emilia M. Ching, et al.'s] respective counterclaims,
cross-claims, and counter-cross-claim, declaring as null and void ab initio the following documents, to wit: (a) Deed of
Absolute Sale dated December 28, 1972, copy of which is marked in evidence as Exh. M; (b) TCT No. 186366 of the Registry
of Deeds for Quezon City, copy of which is marked in evidence as Exh. N; (c) Deed of Absolute Sale dated July 16, 1979, copy
of which is marked in evidence as Exh. 3; and, (d) TCT No. 258977 of the Registry of Deeds for Metro Manila District III, copy
of which is marked in evidence as Exh. 4, and directing defendant Register of Deeds of Quezon City to cancel from the
records of the subject property the registrations of all the said documents and to restore and revive, free from all liens and
encumbrances, TCT No. 186306 of the Registry of Deeds for Quezon City, copy of which is marked in evidence as Exh. L, as
well as ordering defendants Emilia M. Ching, Go Song and Tan Sio Kien jointly and severally to pay [Muoz] the sum of
P50,000.00 as and for attorney's fees and to pay the costs of suit. The court also hereby dismisses the rest of the claims in
[19]
[Muoz's]
complaint,
there
being
no
satisfactory
warrant
therefor.
Emilia M. Ching, et al.'s, appeal of the foregoing judgment of the RTC-Branch 95 was docketed as CA-G.R. CV No. 33811
before the Court of Appeals. In its Decision [20] dated March 4, 1993, the appellate court not only affirmed the appealed
judgment, but also ordered the spouses Go and their successors-in-interest and assigns and those acting on their behalf to
vacate the subject property, to wit:
WHEREFORE, premises considered, the decision appealed from is AFFIRMED, with costs against [Emilia M. Ching, et al.]. The
writ of preliminary mandatory injunction issued on December 17, 1979 is hereby set aside and declared dissolved.
Defendants-appellants Go and Tan, their successors-in-interest and assigns and those acting on their behalf, are ordered to
vacate the disputed premises and to deliver the same to [Muoz] immediately upon receipt of this decision. [21]
Emilia L. Ching, et al., filed before this Court a motion for extension of time to file their petition for review, which was
assigned the docket number G.R. No. 109260. However, they failed to file their intended petition within the extended period
which expired on April 23, 1993. In a Resolution [22] dated July 12, 1993, the Court declared G.R. No. 109260 terminated. The
Resolution dated July 12, 1993 of the Court in G.R. No. 109260 became final and executory on July 15, 1993 and was entered
[23]
in
the
Book
of
Entries
of
Judgments
on
even
date.
More than two months later, on September 20, 1993, the RTC-Branch 95 issued a writ of execution to implement the
judgment
in
Civil
Case
No.
Q-28580.
The spouses Chan, who bought the subject property from BPI Family, then came forward and filed before the RTC-Branch 95
on October 22, 1993 an Urgent Motion to Stop Execution as Against Spouses Samuel Go Chan and Aida Chan, [24] opposing
the writ of execution issued in Civil Case No. Q-28580. The spouses Chan asserted ownership and possession of the subject
property on the basis of a clean title registered in their names under TCT No. 53297. The spouses Chan further contended
that the final judgment in Civil Case No. Q-28580 could not be executed against them since they were not parties to the said
case; they were not successors-in-interest, assigns, or acting on behalf of the spouses Go; and they purchased the subject
property
from
BPI
Family
without
any
notice
of
defect
in
the
latter's
title.
It was only at this point that Muoz, upon her own inquiry, discovered the cancellation on October 28, 1982 of her adverse
claim and notice of lis pendens annotated on the spouses Go's TCT No. 258977, and the subsequent events that led to the
transfer and registration of the title to the subject property from the spouses Go, to BPI Family, and finally, to the spouses
Chan.
In its Order [25] dated December 28, 1993, the RTC-Branch 95 denied the spouses Chan's urgent motion to stop the
execution. According to the RTC-Branch 95, the photocopy of TCT No. 370364 in the name of BPI Family, submitted by the
spouses Chan with their motion, could hardly be regarded as satisfactory proof that Muoz's adverse claim and notice of lis
pendens annotated therein were also missing from the original copy of said certificate of title. Muoz's adverse claim and
notice of lis pendens were annotated on TCT No. 258977 in the spouses Go's names as P.E.-8078 and P.E.-8178, respectively.
So when TCT No. 258977 of the spouses Go was cancelled and TCT No. 370364 was issued to BPI Family, it could be
presumed that the Register of Deeds regularly performed his official duty by carrying over Muoz's adverse claim and
notice of lis pendens to TCT No. 370364. In addition, the RTC-Branch 95 pointed out that in this jurisdiction, the entry of the
notice of lis pendens in the day book of the Register of Deeds was already sufficient notice to the whole world of the dispute
over the subject property, and there was no more need to annotate the same on the owner's duplicate of the certificate of
title. Finally, the RTC-Branch 95 held that TCT No. RT-54376 (370364) of BPI Family and TCT No. 53297 of the spouses Chan
shall be subject to the reservation under Section 7 of Republic Act No. 26 [26] "[t]hat certificates of title reconstituted
extrajudicially, in the manner stated in sections five and six hereof, shall be without prejudice to any party whose right or
interest in the property was duly noted in the original, at the time it was lost or destroyed, but entry or notation of which has
not been made on the reconstituted certificate of title." Thus, the spouses Chan were deemed to have taken the disputed
property
subject
to
the
final
outcome
of
Civil
Case
No.
Q-28580.
On January 3, 1994, the RTC-Branch 95 issued an Alias Writ of Execution. [27] On January 10, 1994, the writ was enforced, and
possession of the subject property was taken from the spouses Chan and returned to Muoz. [28] In its Orders dated April 8,
1994 and June 17, 1994, the RTC-Branch 95 denied the spouses Chan's motion for reconsideration and notice of appeal,
[29]
respectively.
G.R.
No.
142676
Pending resolution by the RTC-Branch 95 of the spouses Chan's motion for reconsideration and notice of appeal in Civil Case
No. Q-28580, Muoz instituted before the MeTC on February 4, 1994 a Complaint for Forcible Entry with Prayer for
Preliminary Mandatory Injunction [30] against Samuel Go Chan and Atty. Yabut, docketed as Civil Case No. 8286. Muoz
alleged in her complaint that she had been in actual and physical possession of the subject property since January 10, 1994.
She hired a caretaker and two security guards for the said property. On February 2, 1994, Samuel Go Chan and Atty. Yabut,
along with 20 other men, some of whom were armed, ousted Muoz of possession of the subject property by stealth,
threat, force, and intimidation. Muoz prayed for the issuance of a writ of preliminary mandatory injunction directing
Samuel Go Chan and Atty. Yabut and all persons claiming right under them to vacate the subject property. Muoz
additionally prayed for judgment making the mandatory injunction permanent and directing Samuel Go Chan and Atty. Yabut
to pay Muoz: (1) compensation for the unlawful occupation of the subject property in the amount of P50,000.00 per
month, beginning February 2, 1994 until the said property is fully and completely turned over to Muoz; (2) attorney's fees
in the amount of P50,000.00, plus P1,500.00 per court appearance of Muoz's counsel; and (3) costs of suit.
Samuel Go Chan and Atty. Yabut denied Muoz's allegations, insisting that Samuel Go Chan is the valid, lawful, and true
legal owner and possessor of the subject property. Samuel Go Chan and Atty. Yabut averred that the Turn-Over of Possession
and Receipt of Possession dated January 10, 1994 - attached to Muoz's complaint as proof that the subject property had
been placed in her possession - is a falsified document. The Writ of Execution issued on September 20, 1993 in Civil Case
No. Q-28580 had already expired and the Sheriff's Return on the Writ - another document purporting to show that possession
of the subject property was turned-over to Muoz on January 10, 1994 - was then being challenged in a complaint before
the Office of Deputy Court Administrator Reynaldo L. Suarez of the Supreme Court. Samuel Go Chan's possession of the
subject property has never been interrupted. His sister, Cely Chan, resided at the subject property and was never removed
therefrom. On February 2, 1994, Atty. Yabut was at the subject property only to protect the rights and interest of his client,
Samuel Go Chan, and since the latter's possession of the subject property had never been interrupted, Atty. Yabut entered

the same peacefully, without intimidation, force, or stealth. The other people at the subject property on February 2, 1994
were there to attend the services at the Buddhist Temple which occupied the fourth floor of the building erected by the
spouses Chan on the subject property. Samuel Go Chan and Atty. Yabut, thus, asked the MeTC to dismiss Muoz's
[31]
complaint
for
lack
of
merit
and
legal
basis.
The MeTC received evidence from the parties on whether a writ of preliminary injunction should be issued, as prayed for by
Muoz. In its Order dated May 16, 1994, the MeTC adjudged that the final judgment in Civil Case No. Q-28580 was already
executed against the spouses Chan and there was, indeed, a turn-over of possession of the subject property to Muoz.
Accordingly, the MeTC granted Muoz's prayer for the issuance of a writ of preliminary mandatory injunction, restoring
possession
of
the
subject
property
to
Muoz.
Samuel Go Chan and Atty. Yabut questioned the foregoing MeTC order through a Petition for Certiorari with Prayer for
Temporary Restraining Order and Writ of Preliminary Injunction [32] before the RTC-Branch 88, which was docketed as Civil
Case No. Q-94-20632. They asserted that they were not bound by the execution of the final judgment of RTC-Branch 95 in
Civil Case No. Q-28580 as they were not parties to the said case. Muoz, on the other hand, argued that the MeTC Order
of May 16, 1994 was an interlocutory order, and under Section 19 of the Rules of Summary Procedure, a petition for
certiorari against an interlocutory order issued by the court is one of the prohibited pleadings and motions in summary
proceedings.
In its Order dated June 10, 1994, the RTC-Branch 88 issued a writ of preliminary injunction to enjoin the implementation of
the
MeTC
Order
dated
May
16,
1994.
On August 5, 1994, the RTC-Branch 88 issued another Order resolving Muoz's motion to dismiss the petition for certiorari
in Civil Case No. Q-94-20632, motion for reconsideration of the Order dated June 10, 1994 of RTC-Branch 88 granting the
issuance of a writ of preliminary injunction, and motion to resolve with additional grounds for dismissal. According to the
RTC-Branch 88, the MeTC failed to distinguish the issue of finality of the judgment of the RTC-Branch 95 in Civil Case No. Q28580 from the assertions of Samuel Go Chan and Atty. Yabut that the spouses Chan are not covered by said final judgment
because they are not successors-in-interest, assigns, or privies of the spouses Go and they are purchasers of the subject
property in good faith. The issue of whether the final judgment in Civil Case No. Q-28580 extended to the spouses Chan was
then still being litigated in the same case before RTC-Branch 95, where the spouses Chan's motion for reconsideration of the
denial of their notice of appeal was pending. The RTC-Branch 88 further found that the MeTC committed grave abuse of
discretion in not dismissing Muoz's complaint for forcible entry on the ground of "lis pendens," as the issue as to who
between Muoz and the spouses Chan had the better right to possession of the subject property was the subject of the
pending proceeding in Civil Case No. Q-28580 before the RTC-Branch 95. In the end, the RTC-Branch 88 decreed:
WHEREFORE,
premises
considered,
the
Court
renders
judgment
(a)
Denying
the
motion
to
dismiss
of
respondent
Muoz
for
lack
of
merit;
(b) Denying the motion for reconsideration of respondent Muoz for the recall and/or setting aside of the writ of
preliminary
injunction
granted
to
petitioners;
(c) Declaring the Order dated May 16, 1994 of Public respondent Hon. Elsa de Guzman in Civil Case No. 8286 illegal and
therefore
null
and
void;
and
(d)
Dismissing
the
ejectment
suit
in
Civil
Case
No.
8286
on
ground
of
lis
pendens.
[33]
Without
pronouncement
as
to
costs.
Muoz appealed the Orders dated June 10, 1994 and August 5, 1994 of RTC-Branch 88 before the Court of Appeals. Her
appeal was docketed as CA-G.R. SP No. 35322. Aside from the nullification of the two orders, Muoz additionally prayed for
the dismissal from the service of the RTC-Branch 88 presiding judge and the disbarment of Atty. Yabut.
The Court of Appeals, in its Decision dated July 21, 1995, sustained the appealed orders of RTC-Branch 88. The Court of
Appeals held that the MeTC should have dismissed the forcible entry case on the ground of " lis pendens"; that the spouses
Chan were not parties in Civil Case No. Q-28580, and impleading them only in the execution stage of said case vitiated their
right to due process; that the order of the RTC-Branch 95 involving the spouses Chan in Civil Case No. Q-28580 was null and
void, considering that they are strangers to the case, and they are innocent purchasers for value of the subject property;
that the notice of lis pendens was already cancelled from the spouses Go's certificate of title at the time they mortgaged the
subject property to BPI Family; and that the title to the subject property was already free of any and all liens and
encumbrances when the spouses Chan purchased the said property from BPI Family. The Court of Appeals, in its Resolution
dated
March
9,
2000,
denied
Muoz's
motion
for
reconsideration.
G.R.
No.
146718
Meanwhile, Muoz filed before the RTC-Branch 95 in Civil Case No. Q-28580 a Motion to Cite the Register of Deeds in
Contempt of Court for the failure of the Register of Deeds to restore Muoz's TCT No. 186306 despite having been served
with a copy of the writ of execution on October 11, 1993. In its Judgment (on the Contempt Proceedings against the Register
of Deeds of Quezon City Samuel C. Cleofe) [34] dated March 18, 1994, the RTC-Branch 95 denied Muoz's motion, convinced
that the Register of Deeds had a valid excuse for his inability to implement the served writ. The Register of Deeds could not
cancel the spouses Chan's TCT No. 53297, the subsisting certificate of title over the subject property, absent any authority or
directive for him to do so. The directive in the final judgment in Civil Case No. Q-28580 and the writ of execution for the
same
only
pertained
to
the
cancellation
of
the
spouses
Go's
TCT
No.
258977.
Thereafter, Muoz filed a Motion for Contempt against the spouses Chan and a Second Motion for Contempt against
Samuel Go Chan and Atty. Yabut. Muoz also filed a Motion for an Alias Writ of Execution and Application for Surrender of
the Owner's Duplicate Copy of TCT No. 53297, [35] in which she prayed for the issuance of an alias writ of execution directing
the Register of Deeds not only to cancel TCT No. 258977 and all documents declared null and void ab initio in the dispositive
portion of the Decision [36] dated July 19, 1991 of RTC-Branch 95 in Civil Case No. Q-28580, and to restore and revive, free
from all liens and encumbrances Muoz's TCT No. 186306, but likewise to cancel the present certificate of title covering the
subject
property,
TCT
No.
53297.
In its Order dated August 21, 1995, the RTC-Branch 95 denied all of Muoz's aforementioned motions. The RTC-Branch 95
was of the view that Samuel Go Chan's title should be litigated in another forum, not in Civil Case No. Q-28580 where the
judgment had already become final and executory. The RTC-Branch 95 also stressed that since the judgment in Civil Case
No. Q-28580 had long become final and executory, it could no longer be changed or amended except for clerical error or
mistake. Accordingly, the RTC-Branch 95 resolved as follows:
1. Ordering, as it hereby orders, the denial of [Muoz's] first and second motions for contempt and hereby absolves
respondents Samuel Go Chan, Celia Chan, Atty. Victoriano R. Yabut, Jr., and several John Does of the Contempt Charges
against
them.
2. Ordering, as it hereby orders, the issuance of an alias writ of execution directing the Court's Deputy Sheriff:
Unrelenting, Muoz filed a Motion for Clarificatory Order, pointing out that the spouses Chan are the present occupants of
the subject property. The Order dated August 21, 1995 of the RTC-Branch 95 directed the deputy sheriff to deliver the
subject property to Muoz, and this could not be done unless the spouses Chan are evicted therefrom. Resultantly,
Muoz prayed that "a clarificatory order be made categorically stating that the spouses Samuel Go Chan and Aida C. Chan,
and all persons claiming right under them, are likewise evicted from the subject premises pursuant to the Order of 21 August
[38]
1995."
Once more, the RTC-Branch 95 denied Muoz's motion in its Order dated October 3, 1995. The RTC-Branch 95 reiterated
the rule that after the judgment had become final, only clerical errors, as distinguished from substantial errors, can be
amended by the court. Furthermore, when the decision or judgment sought to be amended is promulgated by an appellate
court, it is beyond the power of the trial court to change, amplify, enlarge, alter, or modify. Ultimately, the RTC-Branch 95
pronounced that it was "restrained x x x to consider as mere clerical error the exclusion of spouses Samuel Go Chan and
Aida C. Chan in the Decision of the Court dated July 19, 1991, a final judgment, which judgment cannot now be made to
[39]
speak
a
different
language."
Attributing grave abuse of discretion on the part of the RTC-Branch 95 in issuing its Orders dated August 21, 1995 and
October 3, 1995, Muoz filed before this Court a Petition for Certiorari and Mandamus, which was remanded to the Court of
Appeals in observance of the hierarchy of courts, where it was docketed as CA-G.R. SP No. 40019. The Court of Appeals
promulgated its Decision on September 29, 2000 dismissing Muoz's petition. The Court of Appeals agreed with the RTCBranch 95 that the spouses Chan could not be covered by the alias writ of execution considering that they were not
impleaded in Civil Case No. Q-28580. The cancellation of TCT No. 53297 in the spouses Chan's names could not be done
apart from a separate action exclusively for that matter. The spouses Chan are deemed buyers in good faith and for value
as the certificate of title delivered to them by BPI Family was free from any liens or encumbrances or any mark that would

have raised the spouses Chan's suspicions. Every person dealing with registered lands may safely rely on the correctness of
the certificate of title of the vendor/transferor, and he is not required to go beyond the certificate and inquire into the
circumstances culminating in the vendor's acquisition of the property. The Court of Appeals denied Muoz's motion for
reconsideration
in
a
Resolution
dated
January
5,
2001.
Muoz
comes
before
this
Court
via
the
present
consolidated
petitions.
Muoz posits that the final judgment and writ of execution of RTC-Branch 95 in Civil Case No. Q-28580 bind not only Emilia
M. Ching and the spouses Go, but also their successors-in-interest, assigns, or persons acting on their behalf, namely, BPI
Family and spouses Chan. The spouses Chan cannot be deemed innocent purchasers for value of the property since the
cancellation of the adverse claim and notice of lis pendens on the spouses Go's TCT No. 258977 is completely null and void.
Muoz further argues that the MeTC Order dated May 16, 1994 in Civil Case No. 8286 correctly ordered the issuance of a
writ of preliminary mandatory injunction restoring possession of the subject property to her, as she had already acquired
prior possession of the said property upon the execution of the final judgment in Civil Case No. Q-28580. Also, the spouses
Chan's petition for certiorari before the RTC-Branch 88, docketed as Civil Case No. Q-94-20632, challenging the Order dated
May 16, 1994 of the MeTC in Civil Case No. 8286, is a prohibited pleading under the Rules of Summary Procedure; and the
RTC-Branch 88 and the Court of Appeals should be faulted for giving due course to the said petition even in the absence of
jurisdiction.
On the other hand, in their comments to the two petitions at bar, the spouses Chan, Atty. Yabut, and BPI Family assert that
given the peculiar factual circumstances of the case, RTC-Branch 88 was justified in taking cognizance of Samuel Go Chan
and Atty. Yabut's petition for certiorari in Civil Case No. Q-94-20632; that Muoz is estopped from questioning the
jurisdiction of RTC-Branch 88 after participating in the proceedings in Civil Case No. Q-94-20632; that the spouses Chan's
title to the subject property is not affected by the final judgment of RTC-Branch 95 in Civil Case No. Q-28580, and the said
judgment cannot be executed against the spouses Chan since they are neither parties to the case, nor are they the
successors-in-interest, assigns, or persons acting on behalf of Emilia M. Ching or the spouses Go; that BPI Family and
consequently, the spouses Chan, obtained title to the subject property as innocent purchasers for value, there being no
notice of any infirmity in said title; and that Muoz is guilty of forum shopping for filing her petition in G.R. No. 146718
even while her petition in G.R. No. 142676 is still pending.
II
RULING
For the sake of expediency, we will be discussing first the merits of the petition in G.R. No. 146718.
G.R.
No.
146718
Civil Case No. Q-28580 involved Muoz's complaint for the annulment of the deeds of absolute sale dated December 28,
1972 [40] and July 16, 1979, [41] the cancellation of the spouses Go's TCT No. 258977, and the restoration and revival of
Muoz's TCT No. 186306. The final judgment of RTC-Branch 95 in Civil Case No. Q-28580 was in favor of Muoz and
against Emilia M. Ching and the spouses Go. The problem arose when during the pendency of the said case, title and
possession of the subject property were transferred from the spouses Go, to BPI Family, and finally, to the spouses Chan. BPI
Family and the spouses Chan were never impleaded as parties and were not referred to in the dispositive portion of the final
judgment
in
Civil
Case
No.
Q-28580.
Muoz questions in G.R. No. 146718: (1) the Order dated August 21, 1995 denying her Motion for Contempt against the
spouses Chan, Second Motion for Contempt against Samuel Go Chan and Atty. Yabut, and Motion for an Alias Writ of
Execution and Application for Surrender of the Owner's Duplicate Copy of TCT No. 53297; and (2) the Order dated October 3,
1995 denying her Motion for Clarificatory Order, both issued by the RTC-Branch 95 in Civil Case No. Q-28580, and upheld by
the Court of Appeals in CA-G.R. SP No. 40019. In sum, Muoz was seeking in her aforementioned motions: (1) a categorical
order from the RTC-Branch 95 that the final judgment in Civil Case No. Q-28580 be executed against the spouses Chan; and
(2) the surrender and cancellation of the spouses Chan's TCT No. 53297 and restoration of Muoz's TCT No. 186306.
There
is
no
merit
in
Muoz's
petition
in
G.R.
No.
146718.
Civil Case No. Q-28580 is an action for reconveyance of real property. In Heirs of Eugenio Lopez, Sr. v. Enriquez, [42] we
described an action for reconveyance as follows:
An action for reconveyance is an action in personam available to a person whose property has been wrongfully registered
under the Torrens system in another's name. Although the decree is recognized as incontrovertible and no longer open to
review, the registered owner is not necessarily held free from liens. As a remedy, an action for reconveyance is filed as an
ordinary action in the ordinary courts of justice and not with the land registration court. Reconveyance is always available as
long as the property has not passed to an innocent third person for value. A notice of lis pendens may thus be annotated on
the certificate of title immediately upon the institution of the action in court. The notice of lis pendens will avoid transfer to
an innocent third person for value and preserve the claim of the real owner. [43]
(Emphases ours.)
The rule is that: (1) a judgment in rem is binding upon the whole world, such as a judgment in a land registration case or
probate of a will; and (2) a judgment in personam is binding upon the parties and their successors-in-interest but not upon
strangers. A judgment directing a party to deliver possession of a property to another is in personam; it is binding only
against the parties and their successors-in-interest by title subsequent to the commencement of the action. An action for
declaration of nullity of title and recovery of ownership of real property, or re-conveyance, is a real action but it is an action
in personam, for it binds a particular individual only although it concerns the right to a tangible thing. Any judgment therein
[44]
is
binding
only
upon
the
parties
properly
impleaded.
Since they were not impleaded as parties and given the opportunity to participate in Civil Case No. Q-28580, the final
judgment in said case cannot bind BPI Family and the spouses Chan. The effect of the said judgment cannot be extended to
BPI Family and the spouses Chan by simply issuing an alias writ of execution against them. No man shall be affected by any
proceeding to which he is a stranger, and strangers to a case are not bound by any judgment rendered by the court. In the
same manner, a writ of execution can be issued only against a party and not against one who did not have his day in court.
Only real parties in interest in an action are bound by the judgment therein and by writs of execution issued pursuant
[45]
thereto.
A similar situation existed in Dino v. Court of Appeals, [46] where we resolved that:
As the registered owner of the subject property, petitioners are not bound by decision in Civil Case No. R-18073 for they
were never summoned in said case and the notice of lis pendens annotated on TCT No. 73069 was already cancelled at the
time petitioners purchased the subject property. While it is true that petitioners are indispensable parties in Civil Case No. R18073, without whom no complete relief could be accorded to the private respondents, the fact still remains that petitioners
were never actually joined as defendants in said case. Impleading petitioners as additional defendants only in the execution
stage of said case violated petitioners' right to due process as no notice of lis pendens was annotated on the existing
certificate of title of said property nor were petitioners given notice of the pending case, therefore petitioners remain
strangers in said case and the Order of the trial court involving them is null and void, considering that petitioners are
[47]
innocent
purchasers
of
the
subject
property
for
value.
We further stress that Section 48 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree,
clearly provides that "[a] certificate of title shall not be subject to collateral attack. It cannot be altered, modified or
cancelled except in a direct proceeding in accordance with law." Herein, several Torrens titles were already issued after the
cancellation of Muoz's. Certificates of title had been successively issued to Emilia M. Ching, spouses Go, BPI Family, and
spouses Chan. Civil Case No. Q-28580, in which a final judgment had already been rendered, specifically challenged the
validity of the certificates of title of Emilia M. Ching and the spouses Go only. To have the present certificate of title of the
spouses Chan cancelled, Muoz must institute another case directly attacking the validity of the same.
The fact that the titles to the subject property of Emilia M. Ching and the spouses Go were already declared null and void ab
initio by final judgment in Civil Case No. Q-28580 is not enough, for it does not automatically make the subsequent titles of
BPI
Family
and
the
spouses
Chan
correspondingly
null
and
void
ab
initio.
It has long been ingrained in our jurisprudence that a void title may become the root of a valid title if the derivative title was
obtained in good faith and for value. Following the principle of indefeasibility of a Torrens title, every person dealing with
registered lands may safely rely on the correctness of the certificate of title of the vendor/transferor, and he is not required
to go beyond the certificate and inquire into the circumstances culminating in the vendor's acquisition of the property. The
rights of innocent third persons who relied on the correctness of the certificate of title and acquired rights over the property
covered thereby cannot be disregarded and the courts cannot order the cancellation of such certificate for that would impair

[48]
or
erode
public
confidence
in
the
Torrens
system
of
land
registration.
Hence, we pronounced in Republic v. Agunoy, Sr. [49]:
Here, it bears stressing that, by petitioner's own judicial admission, the lots in dispute are no longer part of the public
domain, and there are numerous third, fourth, fifth and more parties holding Torrens titles in their favor and enjoying the
presumption of good faith. This brings to mind what we have reechoed in Pino v. Court of Appeals and the cases therein
cited:
[E]ven on the supposition that the sale was void, the general rule that the direct result of a previous illegal contract cannot
be valid (on the theory that the spring cannot rise higher than its source) cannot apply here for We are confronted with the
functionings of the Torrens System of Registration. The doctrine to follow is simple enough: a fraudulent or forged document
of sale may become the ROOT of a valid title if the certificate of title has already been transferred from the name of the true
[50]
owner to the name of the forger or the name indicated by the forger.
(Emphases ours.)
Although the RTC-Branch 95 had declared with finality in Civil Case No. Q-28580 that the titles of Emilia M. Ching and the
spouses Go were null and void, there is yet no similar determination on the titles of BPI Family and the spouses Chan. The
question of whether or not the titles to the subject property of BPI Family and the spouses Chan are null and void, since they
are merely the successors-in-interest, assigns, or privies of Emilia M. Ching and the spouses Go, ultimately depends on the
issue of whether or not BPI Family and the spouses Chan obtained their titles to the subject property in bad faith, i.e., with
notice of Muoz's adverse claim and knowledge of the pendency of Civil Case No. Q-28580. The latter is a factual issue on
which we cannot rule in the present petition, not only because we are not a trier of facts, but more importantly, because it
was not among the issues raised and tried in Civil Case No. Q-28580.In support of her prayer for an alias writ of execution
against BPI Family and the spouses Go, Muoz cites our ruling in Calalang v. Register of Deeds of Quezon City, [51] in
[52]
relation
to
De
la
Cruz
v.
De
la
Cruz.
De la Cruz is an action for reconveyance of Lot 671 founded on breach of trust filed by Augustina de la Cruz, et al., against
Lucia dela Cruz (Lucia) and Iglesia Ni Kristo (INK). We upheld the validity of the sale of Lot 671 by Lucia to INK, and thereby
validated
the
title
of
INK
to
the
said
property.
Calalang actually involved two petitions: (1) a special civil action for certiorari and prohibition originally filed by Virginia
Calalang (Calalang) before this Court, and (2) a petition for injunction with damages originally filed by Augusto M. de Leon
(De Leon), et al., before the RTC and docketed as Civil Case No. Q-45767. Calalang and De Leon, et al., assert titles that
were adverse to that of INK. De Leon, et al., in particular, claim that their titles to Lot 671 were derived from Amando
Clemente. Calalang and De Leon, et al., sought from the court orders enjoining INK from building a fence to enclose Lot 671;
requiring the Administrator of the National Land Titles and Deeds Registration Administration (NLTDRA) to conduct an
investigation of the anomaly regarding Lucia's reconstituted title to Lot 671; and dismissing the proceedings instituted by the
Register of Deeds for the cancellation of their titles. We dismissed the petitions of Calalang and De Leon, et al., on the
ground of res judicata, the legality or validity of the title of INK over Lot 671 had been settled with finality in De la Cruz. De
la Cruz was applied to Calalang and De Leon, et al., since the facts on which such decision was predicated continued to be
the
facts
on
which
the
petitions
of
Calalang
and
De
Leon,
et
al.,
were
based.
Muoz's reliance on Calalang is misplaced. There are substantial differences in the facts and issues involved in Calalang
and
the
present
case.
In Calalang, there is duplication or overlapping of certificates of title issued to different persons over the same property. We
already upheld in De la Cruz the validity of the certificate of title of INK over Lot 671, which effectively prevents us from
recognizing the validity of any other certificate of title over the same property. In addition, Lucia, the predecessor-in-interest
of INK, had her certificate of title judicially reconstituted. The judicial reconstitution of title is a proceeding in rem,
constituting constructive notice to the whole world. Hence, we rejected the petitions of Calalang and De Leon, et al., to
enjoin INK from building a fence enclosing Lot 671, and the concerned public authorities from instituting appropriate
proceedings
to
have
all
other
certificates
of
title
over
Lot
671
annulled
and
cancelled.

In the instant case, there has been no duplication or overlapping of certificates of title. The subject property has always
been covered by only one certificate of title at a time, and at present, such certificate is in the spouses Chan's names. As we
have previously discussed herein, Muoz cannot have the spouses Chan's TCT No. 53297 cancelled by a mere motion for
the issuance of an alias writ of execution in Civil Case No. Q-28580, when the spouses Chan were not parties to the case.
Civil Case No. Q-28580 was a proceeding in personam, and the final judgment rendered therein - declaring null and void the
titles to the subject property of Emilia M. Ching and the spouses Go - should bind only the parties thereto. Furthermore,
despite the void titles of Emilia M. Ching and the spouses Go, the derivative titles of BPI Family and the spouses Chan may
still be valid provided that they had acquired the same in good faith and for value.More in point with the instant petition is
Pineda v. Santiago. [53] Pineda still involved Lot 671. INK sought from the RTC a second alias writ of execution to implement
the judgment in Calalang against Conrado Pineda (Pineda), et. al. In opposing the issuance of such writ, Pineda, et al.,
asserted that they held titles to Lot 671 adverse to those of Lucia and INK and that they were not parties in De la Cruz or in
Calalang. In its assailed order, the RTC granted the second alias writ of execution on the basis that the issue of ownership of
Lot 671 was already determined with finality in favor of Lucia and INK. The writ ordered the deputy sheriff to eject Pineda, et
al., from Lot 671. When the matter was brought before us, we annulled the assailed order as the writ of execution issued was
against Pineda, et al., who were not parties to Civil Case No. Q-45767, the ejectment suit instituted by De Leon, et al. We
elaborated in Pineda that:Being a suit for injunction, Civil Case No. Q-45767 partakes of an action in personam. In Domagas
v. Jensen, we have explained the nature of an action in personam and enumerated some actions and proceedings which are
in personam, viz:"The settled rule is that the aim and object of an action determine its character. Whether a proceeding is in
rem, or in personam, or quasi in rem for that matter, is determined by its nature and purpose, and by these only. A
proceeding in personam is a proceeding to enforce personal rights and obligations brought against the person and is based
on the jurisdiction of the person, although it may involve his right to, or the exercise of ownership of, specific property, or
seek to compel him to control or dispose of it in accordance with the mandate of the court. The purpose of a proceeding in
personam is to impose, through the judgment of a court, some responsibility or liability directly upon the person of the
defendant. Of this character are suits to compel a defendant to specifically perform some act or actions to fasten a
pecuniary liability on him. An action in personam is said to be one which has for its object a judgment against the person, as
distinguished from a judgment against the propriety to determine its state. It has been held that an action in personam is a
proceeding to enforce personal rights or obligations; such action is brought against the person. As far as suits for injunctive
relief are concerned, it is well-settled that it is an injunctive act in personam. In Combs v. Combs, the appellate court held
that proceedings to enforce personal rights and obligations and in which personal judgments are rendered adjusting the
rights and obligations between the affected parties is in personam. Actions for recovery of real property are in
personam."The respondent judge's jurisdiction is, therefore, limited to the parties in the injunction suit. To stress, the petition
for injunction, docketed as Civil Case No. Q-45767, was filed only by therein petitioners Augusto M. de Leon, Jose de Castro,
Jose A. Panlilio, Felicidad Vergara Vda. De Pineda, Fernando L. Vitug I, Fernando M. Vitug II, Fernando M. Vitug III, and Faustino
Tobia, and later amended to include Elena Ostrea and Feliza C. Cristobal-Generoso as additional petitioners therein, against
Bishop Erao Manalo, in his capacity as titular and spiritual head of I.N.K. Herein petitioners Conrado Pineda, et al. never
became parties thereto. Any and all orders and writs of execution, which the respondent judge may issue in that case can,
therefore, be enforced only against those parties and not against the herein petitioners Conrado Pineda, et al. In issuing the
assailed Order dated 22 April 1998, which directed the issuance of the 2nd Alias Writ of Execution to eject non-parties
(herein petitioners), the respondent judge clearly went out of bounds and committed grave abuse of discretion.
The nature of the injunction suit -- Civil Case No. Q-45767 -- as an action in personam in the RTC remains to be the same
whether it is elevated to the CA or to this Court for review. An action in personam does not become an action in rem just
because a pronouncement confirming I.N.K.'s title to Lot 671 was made by this Court in the Calalang decision. Final rulings
may be made by this Court, as the Highest Court of the Land, in actions in personam but such rulings are binding only as
against the parties therein and not against the whole world. Here lies another grave abuse of discretion on the part of the
respondent judge when he relied on the Calalang decision in his assailed Order dated 07 May 1998 as if it were binding
against the whole world, saying:
"After evaluating the arguments of both parties, decisive on the incident is the decision of the Supreme Court in favor of the
respondent I.N.K., represented by its titular and spiritual head Bishop Erao G. Manalo, sustaining its ownership over the
subject Lot 671. This Court could do no less but to follow and give substantial meaning to its ownership which shall include
all dominical rights by way of a Writ of Execution. To delay the issuance of such writ is a denial of justice due the I.N.K."As a
final word, this decision shall not be misinterpreted as disturbing or modifying our ruling in Calalang. The final ruling on

I.N.K.'s ownership and title is not at all affected. Private respondent I.N.K., as the true and lawful owner of Lot 671 as ruled
by the Court in Calalang, simply has to file the proper action against the herein petitioners to enforce its property rights
within the bounds of the law and our rules. I.N.K.'s recourse of asking for the issuance of an alias writ of execution against
the petitioners in Civil Case No. Q-45767 and the respondent judge's orders in said case, granting I.N.K.'s prayer and
enforcing the alias writ of execution against the present petitioners, constitutes blatant disregard of very fundamental rules
[54]
and
must
therefore
be
stricken
down.
(Emphases
ours.)
Consistent with Pineda, and as appositely recommended by the RTC-Branch 95 and the Court of Appeals in the present case,
Muoz's legal remedy is to directly assail in a separate action the validity of the certificates of title of BPI Family and the
spouses
Chan.
G.R.
No.
142676
G.R. No. 142676 is Muoz's appeal of the dismissal of Civil Case No. 8286, the forcible entry case she instituted against
Samuel Go Chan and Atty. Yabut before the MeTC.There is forcible entry or desahucio when one is deprived of physical
possession of land or building by means of force, intimidation, threat, strategy or stealth. In such cases, the possession is
illegal from the beginning and the basic inquiry centers on who has the prior possession de facto. In filing forcible entry
cases, the law tells us that two allegations are mandatory for the municipal court to acquire jurisdiction: first, the plaintiff
must allege prior physical possession of the property, and second, he must also allege that he was deprived of his
possession by any of the means provided for in Section 1, Rule 70 of the Rules of Court, i.e., by force, intimidation, threat,
strategy, or stealth. It is also settled that in the resolution thereof, what is important is determining who is entitled to the
physical possession of the property. Indeed, any of the parties who can prove prior possession de facto may recover such
possession even from the owner himself since such cases proceed independently of any claim of ownership and the plaintiff
[55]
needs
merely
to
prove
prior
possession
de
facto
and
undue
deprivation
thereof.
Title is never in issue in a forcible entry case, the court should base its decision on who had prior physical possession. The
main thing to be proven in an action for forcible entry is prior possession and that same was lost through force, intimidation,
threat, strategy, and stealth, so that it behooves the court to restore possession regardless of title or ownership. [56]
We more extensively discussed in Pajuyo v. Court of Appeals [57] that:Ownership or the right to possess arising from
ownership is not at issue in an action for recovery of possession. The parties cannot present evidence to prove ownership or
right to legal possession except to prove the nature of the possession when necessary to resolve the issue of physical
possession. The same is true when the defendant asserts the absence of title over the property. The absence of title over the
contested lot is not a ground for the courts to withhold relief from the parties in an ejectment case.
The only question that the courts must resolve in ejectment proceedings is - who is entitled to the physical possession of the
premises, that is, to the possession de facto and not to the possession de jure. It does not even matter if a party's title to the
property is questionable, or when both parties intruded into public land and their applications to own the land have yet to be
approved by the proper government agency. Regardless of the actual condition of the title to the property, the party in
peaceable quiet possession shall not be thrown out by a strong hand, violence or terror. Neither is the unlawful withholding
of
property
allowed.
Courts
will
always
uphold
respect
for
prior
possession.
Thus, a party who can prove prior possession can recover such possession even against the owner himself. Whatever may
be the character of his possession, if he has in his favor prior possession in time, he has the security that entitles him to
remain on the property until a person with a better right lawfully ejects him. To repeat, the only issue that the court has to
[58]
settle
in
an
ejectment
suit
is
the
right
to
physical
possession.
(Emphases
ours.)
Based on the foregoing, we find that the RTC-Branch 88 erred in ordering the dismissal ofCivil Case No. 8286 even before
completion of the proceedings before the MeTC. At the time said case was ordered dismissed by RTC-Branch 88, the MeTC
had only gone so far as holding a hearing on and eventually granting Muoz's prayer for the issuance of a writ of
preliminary
mandatory
injunction.
Muoz alleges in her complaint in Civil Case No. 8286 that she had been in prior possession of the subject property since it
was turned-over to her by the sheriff on January 10, 1994, pursuant to the Alias Writ of Execution issued by the RTC-Branch
95 to implement the final judgment in Civil Case No. Q-28580. The factual issue of who was in prior possession of the
subject property should be litigated between the parties regardless of whether or not the final judgment in Civil Case No. Q28580 extended to the spouses Chan. Hence, the pendency of the latter issue in Civil Case No. Q-28580 before the RTCBranch 95 did not warrant the dismissal of Civil Case No. 8286 before the MeTC on the ground of litis pendentia. The two
cases could proceed independently of one another.Samuel Go Chan and Atty. Yabut aver that the spouses Chan have never
lost possession of the subject property since acquiring the same from BPI Family in 1990. This is a worthy defense to
Muoz's complaint for forcible entry, which Samuel Go Chan and Atty. Yabut should substantiate with evidence in the
continuation
of
the
proceedings
in
Civil
Case
No.
8286
before
the
MeTC.
In addition, Civil Case No. 8286, a forcible entry case, is governed by the Revised Rule on Summary Procedure, Section 19
whereof provides:
SEC. 19. Prohibited pleadings and motions. - The following pleadings, motions, or petitions shall not be allowed in the cases
covered
by
this
Rule:
(g) Petition for certiorari, mandamus, or prohibition against any interlocutory order issued by the court.
The purpose of the Rule on Summary Procedure is to achieve an expeditious and inexpensive determination of cases without
regard to technical rules. Pursuant to this objective, the Rule prohibits petitions for certiorari, like a number of other
[59]
pleadings, in order to prevent unnecessary delays and to expedite the disposition of cases.
Interlocutory orders are those that determine incidental matters that do not touch on the merits of the case or put an end to
the proceedings. [60] An order granting a preliminary injunction, whether mandatory or prohibitory, is interlocutory and
[61]
unappealable.
The writ of preliminary mandatory injunction issued by the MeTC in its Order dated May 16, 1994, directing that Muoz be
placed in possession of the subject property during the course of Civil Case No. 8286, is an interlocutory order. Samuel Go
Chan and Atty. Yabut assailed the said order before the RTC-Branch 88 via a petition for certiorari, docketed as Civil Case No.
Q-94-20632. The RTC-Branch 88 gave due course to said petition, and not only declared the MeTC Order dated May 16, 1994
null
and
void,
but
went
further
by
dismissing
Civil
Case
No.
8286.
The prohibition in Section 19(g) of the Revised Rule on Summary Procedure is plain enough. Its further exposition is
unnecessary verbiage. [62] The petition for certiorari of Samuel Go Chan and Atty. Yabut in Civil Case No. Q-94-20632 is
clearly covered by the said prohibition, thus, it should have been dismissed outright by the RTC-Branch 88. While the
circumstances involved in Muoz's forcible entry case against Samuel Go Chan and Atty. Yabut are admittedly very
peculiar, these are insufficient to except the petition for certiorari of Samuel Go Chan and Atty. Yabut in Civil Case No. Q-9420632 from the prohibition. The liberality in the interpretation and application of the rules applies only in proper cases and
under justifiable causes and circumstances. While it is true that litigation is not a game of technicalities, it is equally true
that every case must be prosecuted in accordance with the prescribed procedure to insure an orderly and speedy
[63]
administration
of
justice.
Nonetheless, even though the peculiar circumstances extant herein do not justify the dismissal of Civil Case No. 8286, they
do require limiting pro hac vice the reliefs the MeTC may accord to Muoz in the event that she is able to successfully
prove forcible entry by Samuel Go Chan and Atty. Yabut into the subject property (i.e., that the sheriff actually turned-over to
Muoz the possession of the subject property on January 10, 1994, and that she was deprived of such possession by
Samuel Go Chan and Atty. Yabut on February 2, 1994 by means of force, intimidation, threat, strategy, and stealth). Taking
into account our ruling in G.R. No. 146718 - that the final judgment in Civil Case No. Q-28580 does not extend to the spouses
Chan, who were not impleaded as parties to the said case - the MeTC is precluded from granting to Muoz relief, whether
preliminary or final, that will give her possession of the subject property. Otherwise, we will be perpetuating the wrongful
execution of the final judgment in Civil Case No. Q-28580. Based on the same reason, Muoz can no longer insist on the
reinstatement of the MeTC Order dated May 16, 1994 granting a preliminary mandatory injunction that puts her in
possession of the subject property during the course of the trial. Muoz though may recover damages if she is able to
prove wrongful deprivation of possession of the subject property from February 2, 1994 until the finality of this decision in
G.R.
No.
146718.
WHEREFORE,
in
view
of
the
foregoing,
we:
(1) GRANT Emerita Muoz's petition in G.R. No. 142676. We REVERSE and SET ASIDE the Decision dated July 21, 1995 and
Resolution dated March 9, 2000 of the Court of Appeals in CA-G.R. SP No. 35322, which affirmed the Orders dated June 10,

1994 and August 5, 1994 of the Regional Trial Court, Branch 88 of Quezon City in Civil Case No. Q-94-20632. We DIRECT the
Metropolitan Trial Court, Branch 33 of Quezon City to reinstate Emerita Muoz's complaint for forcible entry in Civil Case
No. 8286 and to resume the proceedings only to determine whether or not Emerita Muoz was forcibly deprived of
possession of the subject property from February 2, 1994 until finality of this judgment, and if so, whether or not she is
entitled to an award for damages for deprivation of possession during the aforementioned period of time; and
(2) DENY Emerita Munoz's petition in G.R. No. 146718 for lack of merit, and AFFIRM the Decision dated September 29, 2000
and Resolution dated January 5, 2001 of the Court of Appeals in CA-G.R. SP No. 40019, which in turn, affirmed the Orders
dated August 21, 1995 and October 3, 1995 of the Regional Trial Court, Branch 95 of Quezon City in Civil Case No. Q-28580.
No
pronouncement
as
to
costs.
SO ORDERED.

[G.R.
No.
161030
:
September
14,
2011]
JOSE FERNANDO, JR., ZOILO FERNANDO, NORMA FERNANDO BANARES, ROSARIO FERNANDO TANGKENCGO,
HEIRS OF TOMAS FERNANDO, REPRESENTED BY ALFREDO V. FERNANDO, HEIRS OF GUILLERMO FERNANDO,
REPRESENTED BY RONNIE H. FERNANDO, HEIRS OF ILUMINADA FERNANDO, REPRESENTED BY BENJAMIN
ESTRELLA AND HEIRS OF GERMOGENA FERNANDO, PETITIONERS, VS. LEON ACUNA, HERMOGENES FERNANDO,
HEIRS OF SPOUSES ANTONIO FERNANDO AND FELISA CAMACHO, REPRESENTED BY HERMOGENES FERNANDO,
RESPONDENTS.
LEONARDO-DE CASTRO, J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure seeking to reverse and set aside
the Decision[1] dated November 24, 2003 of the Court of Appeals in CA-G.R. CV No. 75773, entitled "Jose Fernando, Jr., et al.
v. Heirs of Germogena Fernando, et al.," which reversed and set aside the Decision [2] dated May 16, 2002 of Branch 84,
Regional
Trial
Court
(RTC)
of
Malolos,
Bulacan
in
Civil
Case
No.
256-M-97.
At the heart of this controversy is a parcel of land covered by Original Certificate of Title (OCT) No. RO-487 (997) [3] registered
in the names of Jose A. Fernando, married to Lucila Tinio, and Antonia A. Fernando, married to Felipe Galvez, and located in
San Jose, Baliuag, Bulacan. When they died intestate, the property remained undivided. Petitioners herein - namely, Jose
Fernando, Jr., Zoilo Fernando, Norma Fernando Banares, Rosario Fernando Tangkencgo, the heirs of Tomas Fernando, the heirs
of Guillermo Fernando, the heirs of Iluminada Fernando and the heirs of Germogena Fernando - are the heirs and successorsin-interest of the deceased registered owners. However, petitioners failed to agree on the division of the subject property
amongst
themselves,
even
after
compulsory
conciliation
before
the
Barangay
Lupon.
Thus, petitioners, except for the heirs of Germogena Fernando, filed a Complaint [4] for partition on April 17, 1997 against the
heirs of Germogena Fernando. In the Complaint, plaintiffs alleged, among others, that they and defendants are common
descendants and compulsory heirs of the late spouses Jose A. Fernando and Lucila Tinio, and the late spouses Antonia A.
Fernando and Felipe Galvez. They further claimed that their predecessors-in-interest died intestate and without instructions
as to the disposition of the property left by them covered by OCT No. RO-487 (997). There being no settlement, the heirs are
asking for their rightful and lawful share because they wish to build up their homes or set up their business in the respective
portions that will be allotted to them. In sum, they prayed that the subject property be partitioned into eight equal parts,
corresponding
to
the
hereditary
interest
of
each
group
of
heirs.
In their Answer[5] filed on May 20, 1997, defendants essentially admitted all of the allegations in the complaint. They alleged
further that they are not opposing the partition and even offered to share in the expenses that will be incurred in the course
of
the
proceedings.
In his Complaint in Intervention [6] filed on January 12, 1998, respondent Leon Acuna (Acuna) averred that in the Decision [7]
dated November 29, 1929 of the Cadastral Court of Baliuag, Bulacan, the portion of the property identified as Lot 1303 was
already adjudicated to: (a) Antonio Fernando, married to Felisa Camacho; (b) spouses Jose Martinez and Gregoria Sison; (c)
spouses Ignacio de la Cruz and Salud Wisco; and (d) Jose Fernando, married to Lucila Tinio, the petitioners' predecessor-ininterest. He likewise claimed that in a 1930 Decision of the Cadastral Court, the portion identified as Lot 1302 was also
already
adjudicated
to
other
people
as
well.
Respondent Acuna further alleged that Salud Wisco, through her authorized attorney-in-fact, Amador W. Cruz, sold her lawful
[8]
share denominated as Lot 1303-D with an area of 3,818 square meters to Simeon P. Cunanan, who in turn sold the same
piece of land to him as evidenced by a Deed of Sale. [9] He also belied petitioners' assertion that the subject property has not
been settled by the parties after the death of the original owners in view of the Decision [10] dated July 30, 1980 of the Court
of First Instance (CFI) of Baliuag, Bulacan, in LRC Case No. 80-389 which ordered the Register of Deeds of Bulacan to issue
the corresponding certificates of title to the claimants of the portion of the subject property designated as Lot 1302. [11]
Norma Fernando, one of the petitioners in the instant case, even testified in LRC Case No. 80-389. According to respondent
Acuna, this circumstance betrayed bad faith on the part of petitioners in filing the present case for partition.
Respondent Acuna likewise averred that the action for partition cannot prosper since the heirs of the original owners of the
subject property, namely Rosario, Jose Jr., Norma, Tomas, Guillermo, Leopoldo, Hermogena, Illuminada and Zoilo, all
surnamed Fernando, and Lucila Tinio, purportedly had already sold their respective one-tenth (1/10) share each in the
subject property to Ruperta Sto. Domingo Villasenor for the amount of P35,000.00 on January 25, 1978 as evidenced by a
"Kasulatan sa Bilihang Patuluyan."[12] He added that he was in possession of the original copy of OCT No. RO-487 (997) and
that he had not commenced the issuance of new titles to the subdivided lots because he was waiting for the owners of the
other
portions
of
the
subject
property
to
bear
their
respective
shares
in
the
cost
of
titling.
Subsequently, a Motion for Intervention [13] was filed on June 23, 1998 by respondent Hermogenes Fernando (Hermogenes),
for himself and on behalf of the heirs of the late spouses, Antonio A. Fernando and Felisa Camacho. According to him, in the
July 30, 1980 Decision of the CFI of Bulacan, their predecessors-in-interest had already been adjudged owners of Lots 1302A, 1302-F, 1302-G,[14] 1302-H and 1302-J of OCT No. RO-487 (997) and any adverse distribution of the properties would
cause respondents damage and prejudice. He would also later claim, in his Answer-in-Intervention, [15] that the instant case is
already
barred
by
res
judicata
and,
should
be
dismissed.
In the interest of substantial justice, the trial court allowed the respondents to intervene in the case.
The plaintiffs and defendants jointly moved to have the case submitted for judgment on the pleadings on May 7, 1999. [16]
However, the trial court denied said motion in a Resolution [17] dated August 23, 1999 primarily due to the question regarding
the ownership of the property to be partitioned, in light of the intervention of respondents Acuna and Hermogenes who were
claiming
legal
right
thereto.
In their Manifestation[18] filed on April 12, 2000, petitioners affirmed their execution of a Deed of Sale in favor of Ruperta Sto.
Domingo Villasenor in 1978, wherein they sold to her 1,000 square meters from Lot 1303 for the sum of ?35,000.00.
After the pre-trial conference, trial ensued. On September 19, 2000, petitioner Elizabeth Alarcon testified that they (plaintiffs)
are not claiming the entire property covered by OCT No. RO-487 (997) but only the area referred to as Lot 1303 and Sapang
Bayan. She also admitted that Lot 1302 had already been divided into ten (10) sublots and allocated to various owners
pursuant to the July 30, 1980 Decision of the CFI of Baliuag, Bulacan and these owners already have their own titles. She
likewise claimed that the entire area consisting of Lot 1303 and Sapang Bayan is based on the subdivision plan of Lot 1303.
She admitted that plaintiffs' predecessor-in-interest was only allocated a portion of Lot 1303 based on the said plan.
However, she claimed that the November 29, 1929 Decision subdividing Lot 1303 was never implemented nor executed by
the
parties.[19]
Petitioner Norma Fernando testified on October 3, 2000 that she is one of the children of Jose A. Fernando and Lucila Tinio.
She affirmed that plaintiffs were only claiming Lot 1303 and Sapang Bayan. She also testified that Sapang Bayan was
supposedly included in Lot 1302 and was previously a river until it dried up. Unlike Lot 1302, the rest of the property was
purportedly not distributed. She likewise averred that she is aware of a November 29, 1929 Decision concerning the
distribution of Lot 1303 issued by the cadastral court but insisted that the basis of the claims of the petitioners over Lot 1303
is
the
title
in
the
name
of
her
ascendants
and
not
said
Decision. [20]
On November 16, 2000, as previously directed by the trial court and agreed to by the parties, counsel for respondent
Hermogenes prepared and submitted an English translation of the November 29, 1929 Decision. The same was admitted
and marked in evidence as Exhibit "X" [21] as a common exhibit of the parties. The petitioners also presented Alfredo Borja,

the
Geodetic
Engineer
who
conducted
a
relocation
survey
of
the
subject
property.
After plaintiffs rested their case, respondent Hermogenes testified on December 7, 2000. In his testimony, he claimed to
know the plaintiffs and defendants as they were allegedly his relatives and neighbors. He confirmed that according to the
November 29, 1929 Decision, portions of Lot 1303 was designated as Lots 1303-A, 1303-B, 1303-C and 1303-D which were
adjudicated to certain persons, including Jose Fernando, while the rest of Lot 1303 was adjudicated to his parents, Antonio A.
Fernando married to Felisa Camacho. According to respondent Hermogenes, his family's tenant and the latter's children
occupied the portion of Lot 1303 allotted to his (Hermogenes) parents while the rest of Lot 1303 was occupied by the
persons named in the said November 29, 1929 Decision. He admitted, however, that nobody among the purported
possessors of Lot 1303 registered the lots assigned to them in the Decision. [22]On January 18, 2001, respondent Hermogenes
presented a witness, Engineer Camilo Vergara who testified that the subject land is divided into Lots 1302 and 1303 with a
creek dividing the two lots known as Sapang Bayan. He also identified a Sketch Plan numbered as PSD-45657 and approved
on November 11, 1955. [23] During the hearing on January 30, 2001, respondent Hermogenes made an oral offer of his
evidence and rested his case. On the same date, respondent Acuna, in lieu of his testimony, offered for the parties to simply
stipulate on the due execution and authenticity of the Deeds of Sale dated April 6, 1979 and December 28, 1980, showing
the transfer of Lot 1303-D from Salud Wisco to Simeon Cunanan and subsequently to respondent Acuna. When counsel for
plaintiffs and defendants agreed to the stipulation, albeit objecting to the purpose for which the deeds of sale were offered,
the
trial
court
admitted
Acuna's
exhibits
and
Acuna
rested
his
case. [24]
On February 15, 2001, plaintiffs recalled Norma Fernando as a rebuttal witness. In her rebuttal testimony, she identified the
tax declaration[25] over the said property in the name of Jose A. Fernando; an official receipt [26] dated October 3, 1997 issued
by the Office of the Treasurer of the Municipality of Baliuag, Bulacan for payment of real property taxes from 1991 to 1997;
and a real property tax clearance[27] dated October 6, 1997, to show that plaintiffs have allegedly been paying the real
property taxes on the entire property covered by OCT No. RO-487 (997). However, she further testified that they were now
willing to pay taxes only over the portion with an area of 44,234 square meters, which is included in their claim. [28]
In a Decision dated May 16, 2002, the trial court ruled that plaintiffs and defendants (petitioners herein) were indeed the
descendants and successors-in-interest of the registered owners, Jose A. Fernando (married to Lucila Tinio) and Antonia
Fernando (married to Felipe Galvez), of the property covered by OCT No. RO-487 (997). After finding that the parties
admitted that Lot 1302 was already distributed and titled in the names of third persons per the July 30, 1980 Decision of the
CFI of Baliuag, Bulacan the trial court proceeded to rule on the allocation of Lot 1303 and Sapang Bayan.
With respect to Lot 1303, the trial court found that the November 29, 1929 Decision of the Cadastral Court, adjudicating said
lot to different persons and limiting Jose Fernando's share to Lot 1303-C, was never implemented nor executed despite the
lapse of more than thirty years. Thus, the said decision has already prescribed and can no longer be executed. The trial
court ordered the reversion of Lot 1303 to the ownership of spouses Jose A. Fernando and Lucila Tinio and spouses Antonia A.
Fernando and Felipe Galvez under OCT No. RO-487 (997) and allowed the partition of Lot 1303 among petitioners as
successors-in-interest of said registered owners. Excluded from the partition, however, were the portions of the property
which petitioners admitted had been sold or transferred to Ruperta Sto. Domingo Villasenor and respondent Acuna.
As for the ownership of Sapang Bayan, the trial court found that the same had not been alleged in the pleadings nor raised
as an issue during the pre-trial conference. Also, according to the trial court, the parties failed to clearly show whether
Sapang Bayan was previously a dry portion of either Lot 1302 or Lot 1303. Neither was there any proof that Sapang Bayan
was a river that just dried up or that it was an accretion which the adjoining lots gradually received from the effects of the
current of water. It was likewise not established who were the owners of the lots adjoining Sapang Bayan. The trial court
concluded that none of the parties had clearly and sufficiently established their claims over Sapang Bayan.
The dispositive portion of the May 16, 2002 Decision of the trial court reads:WHEREFORE, all the foregoing considered,
judgment is hereby rendered ordering the reversion of Lot 1303, except the portions allotted to Acuna and Ruperta Sto.
Domingo Villasenor, to the ownership of Jose Fernando and Lucia Tinio and Antonia Fernando and Felipe Galvez under OCT
No. 997 and thereafter allowing the partition of said Lot 1303 among the plaintiffs and the defendants as successors-ininterest of Jose and Lucia as well as Antonia and Felipe after the settlement of any inheritance tax, fees, dues and/or
obligation
chargeable
against
their
estate.[29]
All the parties, with the exception of respondent Acuna, elevated this case to the Court of Appeals which rendered the
assailed November 24, 2003 Decision, the dispositive portion of which reads:WHEREFORE, premises considered, the decision
dated May 16, 2002, of the Regional Trial Court of Malolos, Bulacan, Third Judicial Region, Branch 84, in Civil Case No. 256-M97, is hereby REVERSED and SET ASIDE and the complaint dated April 17, 1997 filed by plaintiffs-appellants is dismissed.
Costs
against
plaintiffs-appellants.[30]
Hence, plaintiffs and defendants in the court a quo elevated the matter for our review through the instant petition.
Petitioner raises the following issues for consideration:
Whether or not the ownership of Lot 1303 and the Sapang Bayan portion of the piece of land covered by O.C.T. No. RO-487
(997) or Plan Psu-39080 should revert to the descendants and heirs of the late spouses Jose Fernando and Lucila Tinio and
Antonia Fernando, married to Felipe Galvez;
Whether or not a title registered under the Torrens system, as the subject original certificate of title is the best evidence of
ownership
of
land
and
is
a
notice
against
the
world. [31]
The
petition
is
without
merit.
Petitioners based their claims to the disputed areas designated as Lot 1303 and Sapang Bayan on their ascendants' title,
OCT No. RO-487 (997), which was issued on February 26, 1927 in the name of Jose A. Fernando married to Lucila Tinio and
Antonia A. Fernando married to Felipe Galvez. The Court now rules on these claims in seriatim.
Petitioners'
claim
with
respect
to
Lot
1303
As the records show, in the November 29, 1929 Decision of the Cadastral Court of Baliuag, Bulacan (in Cadastral Record No.
14, GLRO Cad. Record No. 781) which was written in Spanish, Lot 1303 had already been divided and adjudicated to spouses
Jose A. Fernando and Lucila Tinio; spouses Antonia A. Fernando and Felipe Galvez; spouses Antonio A. Fernando and Felisa
Camacho; spouses Jose Martinez and Gregoria Sison; and spouses Ignacio de la Cruz and Salud Wisco from whom respondent
Acuna derived his title. The English translation of the said November 29, 1929 Decision was provided by respondent
Hermogenes and was adopted by all the parties as a common exhibit designated as Exhibit "X." The agreed English
translation of said Decision reads:
Lot No. 1303 - This lot is decreed in record No. 448, G.L.R.O. Record No. 25414 and actually with Original Certificate No. 997
(exhibited today) in the name of Jose A. Fernando and Antonia A. Fernando, who now pray that said lot be subdivided in
accordance with the answers recorded in the instant cadastral record, and the sketch, Exh. "A", which is attached to the
records.
A part or portion of the lot has been claimed by Antonio A. Fernando, of legal age, married to Felisa Camacho; another
portion by the spouses Jose Martinez and Gregoria Sison; another portion by Antonia A. Fernando, of legal age, married to
Felipe Galvez; another portion by Jose A. Fernando, of legal age, married to Lucila Tinio; and another portion by the spouses
Ignacio de la Cruz and Salud Wisco, both of legal age. The part claimed by the spouses Jose A. Martinez and Gregoria Sison is
Lot 1303-A of Exh. A; the part claimed by Antonia A. Fernando is Lot 1303-B of said exhibit; the part claimed by Jose A.
Fernando is Lot 1303-C of said exhibit, and the part claimed by the spouses Ignacio de la Cruz and Salud Wisco is Lot 1303-D
of the aforementioned Exhibit.The subdivision of said lot is hereby ordered, separating from the same the portions that
correspond to each of the claimants, which portions are known as Lots 1303-A, 1303-B, 1303-C, and 1303-D in the sketch,
Exh. "A", and once subdivided, are adjudicated in favor of the spouses, Jose Martinez and Gregoria Sison, of legal age, Lot
No. 1303-A, in favor of Antonia A. Fernando, of legal age, married to Felipe Galvez, Lot No. 1303-B; in favor of Jose A.
Fernando, of legal age, married to Lucila Tinio, Lot 1303-C; in favor of the spouses Ignacio de la Cruz and Salud Wisco, of
legal age, Lot 1303-D; and the rest of Lot 1303 is adjudged in favor of Antonio A. Fernando married to Felisa Camacho. It is
likewise ordered that once the subdivision plan is approved, the same be forwarded by the Director of Lands to this Court for
its
final
decision.
It is ordered that the expense for mentioned subdivision, shall be for the account of the spouses Jose Martinez and Gregoria
Sison, Antonia A. Fernando, Jose A. Fernando, the spouses Ignacio de la Cruz and Salud Wisco, and Antonio A. Fernando. [32]
From the foregoing, it would appear that petitioners' ascendants themselves petitioned for the cadastral court to divide Lot
1303 among the parties to the 1929 case and they were only allocated Lots 1303-B and 1303-C. Still, as the trial court noted,
the November 29, 1929 Decision was never fully implemented in the sense that the persons named therein merely
proceeded to occupy the lots assigned to them without having complied with the other directives of the cadastral court
which would have led to the titling of the properties in their names. Nonetheless, it is undisputed that the persons named in

the said November 29, 1929 Decision and, subsequently, their heirs and assigns have since been in peaceful and
uncontested possession of their respective lots for more than seventy (70) years until the filing of the suit for partition on
April 17, 1997 by petitioners which is the subject matter of this case. Respondent Hermogenes, who testified that
petitioners were his relatives and neighbors, further affirmed before the trial court that the persons named in the November
29, 1929 Decision took possession of their respective lots:
ATTY.
VENERACION:
It is noteworthy that petitioners do not dispute that the November 29, 1929 Decision of the cadastral court already
adjudicated the ownership of Lot 1303 to persons other than the registered owners thereof. Petitioners would, nonetheless,
claim that respondents' purported failure to execute the November 29, 1929 Decision over Lot 1303 (i.e., their failure to
secure their own titles) meant that the entire Lot 1303 being still registered in the name of their ascendants rightfully
belongs to them. This is on the theory that respondents' right to have the said property titled in their names have long
prescribed.
On
this
point,
we
agree
with
the
appellate
court.
Section 47 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, states that "[n]o title to
registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession."
Thus, the Court has held that the right to recover possession of registered land is imprescriptible because possession is a
mere
consequence
of
ownership.[34]
However, in Heirs of Anacleto B. Nieto v. Municipality of Meycauayan, Bulacan, [35] the Court had recognized the
jurisprudential thread regarding the exception to the foregoing doctrine that while it is true that a Torrens title is indefeasible
and imprescriptible, the registered landowner may lose his right to recover possession of his registered property by reason of
laches.
Thus, in Heirs of Batiog Lacamen v. Heirs of Laruan,[36] the Court had held that while a person may not acquire title to the
registered property through continuous adverse possession, in derogation of the title of the original registered owner, the
heir of the latter, however, may lose his right to recover back the possession of such property and the title thereto, by
reason
of
laches.
In the more recent case of Bartola M. Vda. De Tirona v. Encarnacion,[37] we similarly held that while jurisprudence is settled
on the imprescriptibility and indefeasibility of a Torrens title, there is equally an abundance of cases where we unequivocally
ruled that registered owners may lose their right to recover possession of property through the equitable principle of laches.
Laches means 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. Laches
thus operates as a bar in equity. [38] The essential elements of laches are: (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. [39]
In view of respondents' decades long possession and/or ownership of their respective lots by virtue of a court judgment and
the erstwhile registered owners' inaction and neglect for an unreasonable and unexplained length of time in pursuing the
recovery of the land, assuming they retained any right to recover the same, it is clear that respondents' possession may no
longer be disturbed. The right of the registered owners as well as their successors-in-interest to recover possession of the
property
is
already
a
stale
demand
and,
thus,
is
barred
by
laches.
In the same vein, we uphold the finding of the Court of Appeals that the title of petitioners' ascendants wrongfully included
[40]
lots belonging to third persons.
Indeed, petitioners' ascendants appeared to have acknowledged this fact as they were
even the ones that prayed for the cadastral court to subdivide Lot 1303 as evident in the November 29, 1929 Decision. We
concur with the Court of Appeals that petitioners' ascendants held the property erroneously titled in their names under an
implied trust for the benefit of the true owners. Article 1456 of the Civil Code provides:
ART. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of
an
implied
trust
for
the
benefit
of
the
person
from
whom
the
property
comes.
As aptly observed by the appellate court, the party thus aggrieved has the right to recover his or their title over the property
by way of reconveyance while the same has not yet passed to an innocent purchaser for value. [41] As we held in Medizabel v.
Apao,[42] the essence of an action for reconveyance is that the certificate of title is respected as incontrovertible. What is
sought is the transfer of the property, in this case its title, which has been wrongfully or erroneously registered in another
person's name, to its rightful owner or to one with a better right. It is settled in jurisprudence that mere issuance of the
certificate of title in the name of any person does not foreclose the possibility that the real property may be under coownership with persons not named in the certificate or that the registrant may only be a trustee or that other parties may
have
acquired
interest
subsequent
to
the
issuance
of
the
certificate
of
title. [43]
We cannot subscribe to petitioners' argument that whatever rights or claims respondents may have under the November 29,
1929 Decision has prescribed for their purported failure to fully execute the same. We again concur with the Court of
Appeals in this regard. An action for reconveyance of registered land based on implied trust prescribes in ten (10) years, the
point of reference being the date of registration of the deed or the date of the issuance of the certificate of title over the
property. However, this Court has ruled that the ten-year prescriptive period applies only when the person enforcing the
trust is not in possession of the property. If a person claiming to be its owner is in actual possession of the property, the
right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. The reason is that the
one who is in actual possession of the land claiming to be its owner may wait until his possession is disturbed or his title is
attacked
before
taking
steps
to
vindicate
his
right.[44]
Petitioners'
claim
with
respect
to
Sapang
Bayan
As for the issue of the ownership of Sapang Bayan, we sustain the appellate court insofar as it ruled that petitioners failed to
substantiate their ownership over said area. However, we find that the Court of Appeals erred in ruling that the principle of
accretion is applicable. The said principle is embodied in Article 457 of the Civil Code which states that "[t]o the owners of
lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the
waters." We have held that for Article 457 to apply the following requisites must concur: (1) that the deposit be gradual and
imperceptible; (2) that it be made through the effects of the current of the water; and (3) that the land where accretion takes
place is adjacent to the banks of rivers. [45] The character of the Sapang Bayan property was not shown to be of the nature
that is being referred to in the provision which is an accretion known as alluvion as no evidence had been presented to
support
this
assertion.
In fact from the transcripts of the proceedings, the parties could not agree how Sapang Bayan came about. Whether it was a
gradual deposit received from the river current or a dried-up creek bed connected to the main river could not be ascertained.
Even assuming that Sapang Bayan was a dried-up creek bed, under Article 420, paragraph 1 [46] and Article 502, paragraph
1[47] of the Civil Code, rivers and their natural beds are property of public dominion. In the absence of any provision of law
vesting ownership of the dried-up river bed in some other person, it must continue to belong to the State.
We ruled on this issue in Republic v. Court of Appeals,[48] to wit:The lower court cannot validly order the registration of Lots 1
and 2 in the names of the private respondents. These lots were portions of the bed of the Meycauayan river and are
therefore classified as property of the public domain under Article 420 paragraph 1 and Article 502, paragraph 1 of the Civil
Code of the Philippines. They are not open to registration under the Land Registration act. The adjudication of the lands in
question
as
private
property
in
the
names
of
the
private
respondents
is
null
and
void. [49]
Furthermore, in Celestial v. Cachopero,[50] we similarly ruled that a dried-up creek bed is property of public dominion:A creek,
like the Salunayan Creek, is a recess or arm extending from a river and participating in the ebb and flow of the sea. As such,
under Articles 420(1) and 502(1) of the Civil Code, the Salunayan Creek, including its natural bed, is property of the public
domain which is not susceptible to private appropriation and acquisitive prescription. And, absent any declaration by the
government, that a portion of the creek has dried-up does not, by itself, alter its inalienable character. [51]
Therefore, on the basis of the law and jurisprudence on the matter, Sapang Bayan cannot be adjudged to any of the parties
in
this
case.
WHEREFORE, premises considered, the petition is hereby DENIED. The assailed Decision dated November 24, 2003 of the
Court
of
Appeals
in
CA-G.R.
CV
No.
75773
is
hereby
AFFIRMED.
Costs
against
petitioners.

SO ORDERED.

G.R. No. L-27088 July 31, 1975

HEIRS
OF
BATIOG
vs.
HEIRS OF LARUAN, * respondents-appellants.
Leonardo A. Amores for petitioners-appellants.
Reyes and Cabato for respondents-appellees.

LACAMEN,

petitioners-appellants,

MARTIN, J.:
Petition for review by certiorari of a decision of the Honorable Court of Appeals affirming the judgment of the Court of First
Instance of Baguio City in Civil Case No. 738 entitled "Heirs of Batiog Lacamen vs. Heirs of Laruan" "... declaring the contract
of sale between Lacamen and Laruan null and void [for lack of approval of the Director of the Bureau of Non-Christian Tribes]
..."Petitioners-appellants are the surviving heirs of Batiog Lacamen, while respondents-appellants are the heirs of Laruan. 1
Sometime on January 28, 1928, Laruan executed a Deed of Sale in favor of Batiog Lacamen 2 conveying for the sum of
P300.00 his parcel of land situated in the sitio of La Trinidad, Benguet, Mountain Province, comprising 86 ares and 16
centares 3 and covered by Certificate of Title No. 420 of the Registry of Benguet. The deed was acknowledged before Antonio
Rimando, a notary public in the City of Baguio. 4 Immediately after the sale, Laruan delivered the certificate of title to
Lacamen. Thereupon, Lacamen entered in possession and occupancy of the land without first securing the corresponding
transfer certificate of title in his name. He introduced various improvements and paid the proper taxes. His possession was
open, continuous, peaceful, and adverse. After his death in 1942, his heirs remained in and continued possession and
occupancy of the land. They too paid the taxes.After the last Global War, Lacamen's heirs "started fixing up the papers of all
the properties" left by him 5 In or about June, 1957, they discovered that Laruan's heirs, respondents-appellants, were able to
procure a new owner's copy of Certificate of Title No. 420 by a petition filed in court alleging that their copy has been lost or
destroyed. Through this owner's copy, respondents-appellants caused the transfer of the title on the lot in their names. 6
Transfer Certificate of Title No. T-775 was issued to them by the Registry of Deeds of Benguet.Refused of their demands for
reconveyance of the title, petitioners-appellants sued respondents-appellants in the Court of First Instance of Baguio City on
December 9, 1957, prayings among other things, that they be declared owners of the subject property; that respondentsappellants be ordered to convey to them by proper instruments or documents the land in question; and that the Register of
Deeds of Benguet be ordered to cancel Transfer Certificate of Title No. T-775 and issue in lieu thereof a new certificate of title
in their names. 7 In answer, respondents-appellants traversed the averments in the complaint and claim absolute ownership
over the land. They asserted that their deceased father, Laruan, never sold the property and that the Deed of Sale was not
thumbmarked by him. 8
On 5 April 1962, the Court of First Instance of Baguio City found for respondents-appellants and against petitionersappellants. Forthwith, petitioners-appellants appealed to the Court of Appeals.On 7 December 1966, the Court of Appeals
sustained the trial court.
In this review, petitioners-appellants press that the Court of Appeals erred
I... IN DECLARING THE SALE BETWEEN LACAMEN AND LARUAN TO BE NULL AND VOID.
II... IN APPLYING STRICTLY THE PROVISIONS OF SECTIONS 118 AND 122 OF ACT NO. 2874 AND SECTIONS 145 AND 164 OF
THE CODE OF MINDANAO AND SULU.III... IN AFFIRMING THE DECISION OF THE COURT OF FIRST INSTANCE OF BAGUIO CITY.
which assignments could be whittled down into the pervading issue of whether the deceased Batiog Lacamen and/or his
heirs, herein petitioners-appellants, have validly acquired ownership over the disputed parcel of land.The 1917
Administrative Code of Mindanao and Sulu declares in its Section 145 that no contract or agreement relating to real property
shall be made by any person with any non-Christian inhabitant of the Department of Mindanao and Sulu, unless such
contract shall bear the approval of the provincial governor of the province wherein the contract was executed, or his
representative duly authorized for such purpose in writing endorsed upon it. 9 Any contract or agreement in violation of this
section is "null and void" under the succeeding Section 146. 10 On 24 February 1919, Act No. 2798 was approved by the
Philippine Legislature extending to the Mountain Province and the Province of Nueva Vizcaya the laws and other legal
provisions pertaining to the provinces and minor political subdivisions of the Department of Mindanao and Sulu, with the
specific proviso that the approval of the land transaction shall be by the Director of the Bureau of Non-Christian Tribes. 11
Then on 29 November 1919, came Act No. 2874 otherwise known as "The Public Land Act". It provided in Section 118 thereof
that "Conveyances and encumbrances made by persons belonging to the so-called 'non-Christian tribes', when proper, shall
not be valid unless duly approved by the Director of the Bureau of non-Christian Tribes." Any violation of this injunction would
result in the nullity and avoidance of the transaction under the following Section 122.During the regime of the
Commonwealth, C.A. 141 otherwise known as "The Public Land Act" was passed November 7, 1936 amending Act No.
2874. However, it contained a similar provision in its Section 120 that "Conveyances and encumbrances made by illiterate
non-Christians shall not be valid unless duly approved by the Commissioner of Mindanao and Sulu.The contracting parties,
Lacamen and Laruan, are bound by the foregoing laws, since both of them are illiterate Igorots, belonging to the "nonChristian Tribes" of the Mountain Province 12 , and the controverted land was derived from a Free Patent 13 or acquired from
the public domain. 14 The trial court did show cordiality to judicial pronouncements when it avoided the realty sale between
Lacamen and Laruan for want of approval of the Director of the Bureau of Non-Christian Tribes. For jurisprudence decrees
that non-approved conveyances and encumbrances of realty by illiterate non-Christians are not valid, i.e., not binding or
obligatory. 15 Nevertheless, the thrust of the facts in the case before Us weakens the gathered strength of the cited rule. The
facts summon the equity of laches."Laches" has been defined as "such neglect or ommission to assert a right, taken in
conjunction with lapse of time and other circumstances causing prejudice to an adverse party, as will operate as a bar in
equity." 16 It is a delay in the assertion of a right "which works disadvantage to another" 17 because of the "inequity founded
on some change in the condition or relations of the property or parties." 18 It is based on public policy which, for the peace of
society, 19 ordains that relief will be denied to a stale demand which otherwise could be a valid claim. 20 It is different from
and applies independently of prescription. While prescription is concerned with the fact of delay, laches is concerned with
the effect of delay. Prescription is concerned with the effect of delay. Prescription is a matter of time; laches is principally a
question of inequity of permitting a claim to be enforced, this inequity being founded on some change in the condition of the
property or the relation of the parties. Prescription is statutory; laches is not. Laches applies in equity, whereas prescription
applies at law. Prescription is based on a fixed time, laches is not. 21 Laruan's sale of the subject lot to Lacamen could have
been valid were it not for the sole fact that it lacked the approval of the Director of the Bureau of Non-Christian Tribes. There
was impressed upon its face full faith and credit after it was notarized by the notary public. 22 The non-approval was the only
"drawback" of which the trial court has found the respondents-appellants to "have taken advantage as their lever to deprive
[petitioners-appellants] of this land and that their motive is out and out greed." 23 As between Laruan and Lacamen, the sale
was regular, not infected with any flaw. Laruan's delivery of his certificate of title to Lacamen just after the sale symbolizes
nothing more than a bared recognition and acceptance on his part that Lacamen is the new owner of the property. Thus, not
any antagonistic show of ownership was ever exhibited by Laruan after that sale and until his death in May 1938.From the
transfer of the land on January 28, 1928, Lacamen possessed and occupied the ceded land in concepto de dueo until his
death in April 1942. Thereafter his heirs, petitioners-appellants herein, took over and exercised dominion over the property,
likewise unmolested for nearly 30 years (1928-1957) until the heirs of Laruan, respondents-appellants, claimed ownership
over the property and secured registration of the same in their names. At the trial, petitioners-appellants have been found to
have introduced improvements on the land consisting of houses, barns, greenhouses, walls, roads, etc., and trees valued at

P38,920.00. 24 At this state, therefore, respondents-appellants' Claim of absolute ownership over the land cannot be
countenanced. It has been held that while a person may not acquire title to the registered property through continuous
adverse possession, in derogation of the title of the original registered owner, the heir of the latter, however, may lose his
right to recover back the possession of such property and the title thereto, by reason of laches. 25 Much more should it be in
the instant case where the possession of nearly 30 years or almost half a century now is in pursuance of sale which
regrettably did not bear the approval of the executive authority but which the vendor never questioned during his life time.
Laruan's laches extends to his heirs, the respondents-appellants herein, since they stand in privity with him. 26 Indeed, in a
like case, 27 it was ruled that Courts can not look with favor at parties who, by their silence, delay and inaction, knowingly
induce another to spend time, effort and expense in cultivating the land, paying taxes and making improvements thereon for
30 long years, only to spring from ambush and claim title when the possessor's efforts and the rise of land values offer an
opportunity to make easy profit at his expense.For notwithstanding the invalidity of the sale, the vendor Laruan suffered the
vendee Lacamen to enter, possess and occupy the property in concepto de dueo without demurrer and molestation, from
1928, until the former's death in 1938; and when respondents-appellants succeeded to the estate of their father, they too
kept silent, never claiming that the lot is their own until in 1957 or after almost 30 years they took "advantage of the [nonapproval of the sale] as their lever to deprive [petitioners-appellants] of this land" with a motive that was "out and out
greed." Even granting, therefore, that no prescription lies against their father's recorded title, their quiescence and inaction
for almost 30 years now commands the imposition of laches against their adverse claim. (Miguel, footnote 27)It results that
as against Laruan and his heirs, respondents-appellants herein, the late Batiog Lacamen and his heirs, petitioners-appellants
herein, have superior right and, hence, have validly acquired ownership of the litigated land. Vigilantibus non dormientibos
sequitas subvenit.IN VIEW OF THE FOREGOING, the judgment of the Court of Appeals affirming that of the trial court is
hereby reversed and set aside.The petitioners-appellants are hereby declared the lawful owners of the land in question.
Accordingly, Transfer Certificate of Title No. T-775 in the name of respondents-appellants is hereby cancelled and in lieu
thereof the Register of Deeds of Benguet is ordered to issue a new transfer certificate of title in the name of petitionersappellants.
Without pronouncement as to costs.
SO ORDERED.
FIRST
DIVISION

[G.R.
No.
168770,
February
09
:
2011]
ANUNCIACION VDA. DE OUANO, MARIO P. OUANO, LETICIA OUANO ARNAIZ, AND CIELO OUANO MARTINEZ,
PETITIONERS, VS. THE REPUBLIC OF THE PHILIPPINES, THE MACTAN-CEBU INTERNATIONAL AIRPORT
AUTHORITY,
AND
THE
REGISTER
OF
DEEDS
FOR
THE
CITY
OF
CEBU,
RESPONDENTS.
[G.R.
NO.
168812]
MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY (MCIAA), PETITIONER, VS. RICARDO L. INOCIAN, IN HIS
PERSONAL CAPACITY AND AS ATTORNEY-IN-FACT OF OLYMPIA E. ESTEVES, EMILIA E. BACALLA, RESTITUTA E.
MONTANA, AND RAUL L. INOCIAN; AND ALETHA SUICO MAGAT, IN HER PERSONAL CAPACITY AND AS ATTORNEYIN-FACT OF PHILIP M. SUICO, DORIS S. DELA CRUZ, JAMES M. SUICO, EDWARD M. SUICO, ROSELYN SUICOLAWSIN, REX M. SUICO, KHARLA SUICO-GUTIERREZ, ALBERT CHIONGBIAN, AND JOHNNY CHAN, RESPONDENTS.
VELASCO JR., J.:
At the center of these two (2) Petitions for Review on Certiorari under Rule 45 is the issue of the right of the former owners of
lots acquired for the expansion of the Lahug Airport in Cebu City to repurchase or secure reconveyance of their respective
properties.
In the first petition, docketed as G.R. No. 168770, petitioners Anunciacion vda. de Ouano, Mario Ouano, Leticia Ouano Arnaiz
and Cielo Ouano Martinez (the Ouanos) seek to nullify the Decision [1] dated September 3, 2004 of the Court of Appeals (CA)
in CA-G.R. CV No. 78027, affirming the Order dated December 9, 2002 of the Regional Trial Court (RTC), Branch 57 in Cebu
City, in Civil Case No. CEB-20743, a suit to compel the Republic of the Philippines and/or the Mactan-Cebu International
Airport
Authority
(MCIAA)
to
reconvey
to
the
Ouanos
a
parcel
of
land.
The second petition, docketed as G.R. No. 168812, has the MCIAA seeking principally to annul and set aside the Decision [2]
and Resolution[3] dated January 14, 2005 and June 29, 2005, respectively, of the CA in CA-G.R. CV No. 64356, sustaining the
RTC, Branch 13 in Cebu City in its Decision of October 7, 1988 in Civil Case No. CEB-18370.
Per
its
October
19,
2005
Resolution,
the
Court
ordered
the
consolidation
of
both
cases.
Except for the names of the parties and the specific lot designation involved, the relevant factual antecedents which gave
rise to these consolidated petitions are, for the most part, as set forth in the Court's Decision [4] of October 15, 2003, as
reiterated in a Resolution[5] dated August 9, 2005, in G.R. No. 156273 entitled Heirs of Timoteo Moreno and Maria Rotea v.
Mactan-Cebu International Airport Authority (Heirs of Moreno),b> and in other earlier related cases. [6]
In 1949, the National Airport Corporation (NAC), MCIAA's predecessor agency, pursued a program to expand the Lahug
Airport in Cebu City. Through its team of negotiators, NAC met and negotiated with the owners of the properties situated
around the airport, which included Lot Nos. 744-A, 745-A, 746, 747, 761-A, 762-A, 763-A, 942, and 947 of the Banilad Estate.
As the landowners would later claim, the government negotiating team, as a sweetener, assured them that they could
repurchase their respective lands should the Lahug Airport expansion project do not push through or once the Lahug Airport
closes or its operations transferred to Mactan-Cebu Airport. Some of the landowners accepted the assurance and executed
deeds of sale with a right of repurchase. Others, however, including the owners of the aforementioned lots, refused to sell
because the purchase price offered was viewed as way below market, forcing the hand of the Republic, represented by the
then Civil Aeronautics Administration (CAA), as successor agency of the NAC, to file a complaint for the expropriation of Lot
Nos. 744-A, 745-A, 746, 747, 761-A, 762-A, 763-A, 942, and 947, among others, docketed as Civil Case No. R-1881 entitled
Republic
v.
Damian
Ouano,
et
al.
On December 29, 1961, the then Court of First Instance (CFI) of Cebu rendered judgment for the Republic, disposing, in part,
as follows:
IN
VIEW
OF
THE
FOREGOING,
judgment
is
hereby
rendered:
1. Declaring the expropriation of Lots Nos. 75, 76, 76, 89, 90, 91, 92, 105, 106, 107, 108, 104, 921-A, 88, 93, 913-B, 72, 77,
916, 777-A, 918, 919, 920, 764-A, 988, 744-A, 745-A, 746, 747, 762-A, 763-A, 951, 942, 720-A, x x x and 947, included in the
Lahug Airport, Cebu City, justified
in
and
in lawful exercise of the right of eminent domain.
3. After the payment of the foregoing financial obligation to the landowners, directing the latter to deliver to the plaintiff the
corresponding Transfer Certificates of Title to their respective lots; and upon the presentation of the said titles to the Register
of Deeds, ordering the latter to cancel the same and to issue, in lieu thereof, new Transfer Certificates of Title in the name of
the
plaintiff.[7]
In view of the adverted buy-back assurance made by the government, the owners of the lots no longer appealed the decision
of the trial court.[8] Following the finality of the judgment of condemnation, certificates of title for the covered parcels of land
were issued in the name of the Republic which, pursuant to Republic Act No. 6958, [9] were subsequently transferred to
MCIAA.
At the end of 1991, or soon after the transfer of the aforesaid lots to MCIAA, Lahug Airport completely ceased operations,
Mactan Airport having opened to accommodate incoming and outgoing commercial flights. On the ground, the expropriated
lots were never utilized for the purpose they were taken as no expansion of Lahug Airport was undertaken. This
development prompted the former lot owners to formally demand from the government that they be allowed to exercise
their promised right to repurchase. The demands went unheeded. Civil suits followed.
G.R.
No.
168812
(MCIAA
Petition)
On February 8, 1996, Ricardo L. Inocian and four others (all children of Isabel Limbaga who originally owned six [6] of the lots
expropriated); and Aletha Suico Magat and seven others, successors-in-interest of Santiago Suico, the original owner of two
(2) of the condemned lots (collectively, the Inocians), filed before the RTC in Cebu City a complaint for reconveyance of real
properties and damages against MCIAA. The complaint, docketed as Civil Case No. CEB-18370, was eventually raffled to
Branch
13
of
the
court.
On September 29, 1997, one Albert Chiongbian (Chiongbian), alleging to be the owner of Lot Nos. 761-A and 762-A but which

the
Inocians
were
now
claiming,
moved
and
was
later
allowed
to
intervene.
During the pre-trial, MCIAA admitted the following facts:
1. That the properties, which are the subject matter of Civil Case No. CEB-18370, are also the properties involved in Civil
Case
R-1881;
2. That the purpose of the expropriation was for the expansion of the old Lahug Airport; that the Lahug Airport was not
expanded;
3.
That
the
old
Lahug
Airport
was
closed
sometime
in
June
1992;
4. That the price paid to the lot owners in the expropriation case is found in the decision of the court; and
5. That some properties were reconveyed by the MCIAA because the previous owners were able to secure express waivers or
riders wherein the government agreed to return the properties should the expansion of the Lahug Airport not materialize.
During trial, the Inocians adduced evidence which included the testimony of Ricardo Inocian (Inocian) and Asterio Uy (Uy).
Uy, an employee of the CAA, testified that he was a member of the team which negotiated for the acquisition of certain lots
in Lahug for the proposed expansion of the Lahug Airport. He recalled that he acted as the interpreter/spokesman of the
team since he could speak the Cebuano dialect. He stated that the other members of the team of negotiators were Atty.
Pedro Ocampo, Atty. Lansang, and Atty. Saligumba. He recounted that, in the course of the negotiation, their team assured
the landowners that their landholdings would be reconveyed to them in the event the Lahug Airport would be abandoned or
if its operation were transferred to the Mactan Airport. Some landowners opted to sell, while others were of a different bent
owing
to
the
inadequacy
of
the
offered
price.
Inocian testified that he and his mother, Isabel Lambaga, attended a meeting called by the NAC team of negotiators
sometime in 1947 or 1949 where he and the other landowners were given the assurance that they could repurchase their
lands at the same price in the event the Lahug Airport ceases to operate. He further testified that they rejected the NAC's
offer. However, he said that they no longer appealed the decree of expropriation due to the repurchase assurance adverted
to.
The MCIAA presented Michael Bacarizas (Bacarizas), who started working for MCIAA as legal assistant in 1996. He testified
that, in the course of doing research work on the lots subject of Civil Case No. CEB-18370, he discovered that the same lots
were covered by the decision in Civil Case No. R-1881. He also found out that the said decision did not expressly contain any
condition
on
the
matter
of
repurchase.
Ruling
of
the
RTC
On October 7, 1998, the RTC rendered a Decision in Civil Case No. CEB-18370, the dispositive portion of which reads as
follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered directing defendant Mactan Cebu International Airport
Authority (MCIAA) to reconvey (free from liens and encumbrances) to plaintiffs Ricardo Inocian, Olimpia E. Esteves, Emilia E.
Bacalla, Restituta E. Montana and Raul Inocian Lots No. 744-A, 745-A, 746, 762-A, 747, 761-A and to plaintiffs Aletha Suico
Magat, Philip M. Suico, Doris S. dela Cruz, James M. Suico, Edward M. Suico, Roselyn S. Lawsin, Rex M. Suico and Kharla
Suico-Gutierrez Lots No. 942 and 947, after plaintiffs shall have paid MCIAA the sums indicated in the decision in Civil Case
No. R-1881. Defendant MCIAA is likewise directed to pay the aforementioned plaintiffs the sum or P50,000.00 as and for
attorney's
fees
and
P10,000.00
for
litigation
expenses.
Albert Chiongbian's intervention should be, as it is hereby DENIED for utter lack of factual basis.
With
costs
against
defendant
MCIAA.[10]
Therefrom,
MCIAA
went
to
the
CA
on
appeal,
docketed
as
CA-G.R.
CV
No.
64356.
Ruling
of
the
CA
On January 14, 2005, the CA rendered judgment for the Inocians, declaring them entitled to the reconveyance of the
questioned lots as the successors-in-interest of the late Isabel Limbaga and Santiago Suico, as the case may be, who were
the former registered owners of the said lots. The decretal portion of the CA's Decision reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DISMISSING the appeal filed in this case
and AFFFIRMING the decision rendered by the court a quo on October 7, 1998 in Civil Case No. CEB-18370.
SO
ORDERED.
The CA, citing and reproducing excerpts from Heirs of Moreno,[11] virtually held that the decision in Civil Case No. R-1881 was
conditional, stating "that the expropriation of [plaintiff-appellees'] lots for the proposed expansion of the Lahug Airport was
ordered by the CFI of Cebu under the impression that Lahug Airport would continue in operation." [12] The condition, as may
be deduced from the CFI's decision, was that should MCIAA, or its precursor agency, discontinue altogether with the
operation of Lahug Airport, then the owners of the lots expropriated may, if so minded, demand of MCIAA to make good its
verbal assurance to allow the repurchase of the properties. To the CA, this assurance, a demandable agreement of
repurchase
by
itself,
has
been
adequately
established.
On September 21, 2005, the MCIAA filed with Us a petition for review of the CA's Decision, docketed as G.R. No. 168812.
G.R.
No.
168770
(Ouano
Petition)
Soon after the MCIAA jettisoned the Lahug Airport expansion project, informal settlers entered and occupied Lot No. 763-A
which, before its expropriation, belonged to the Ouanos. The Ouanos then formally asked to be allowed to exercise their right
to repurchase the aforementioned lot, but the MCIAA ignored the demand. On August 18, 1997, the Ouanos instituted a
complaint before the Cebu City RTC against the Republic and the MCIAA for reconveyance, docketed as Civil Case No. CEB20743.
Answering, the Republic and MCIAA averred that the Ouanos no longer have enforceable rights whatsoever over the
condemned Lot No. 763-A, the decision in Civil Case No. R-1881 not having found any reversionary condition.
Ruling
of
the
RTC
By a Decision dated November 28, 2000, the RTC, Branch 57 in Cebu City ruled in favor of the Ouanos, disposing as follows:
WHEREFORE, in the light of the foregoing, the Court hereby renders judgment in favor of the plaintiffs, Anunciacion Vda. De
Ouano, Mario P. Ouano, Leticia Ouano Arnaiz and Cielo Ouano Martinez and against the Republic of the Philippines and
Mactan Cebu International Airport Authority (MCIAA) to restore to plaintiffs, the possession and ownership of their land, Lot
No.
763-A
upon
payment
of
the
expropriation
price
to
defendants;
and
2. Ordering the Register of Deeds to effect the transfer of the Certificate of Title from defendant Republic of the Philippines
on Lot 763-A, canceling TCT No. 52004 in the name of defendant Republic of the Philippines and to issue a new title on the
same lot in the names of Anunciacion Vda. De Ouano, Mario P. Ouano, Leticia Ouano Arnaiz and Cielo Ouano Martinez.
No
pronouncement
as
to
costs. [13]
Acting on the motion of the Republic and MCIAA for reconsideration, however, the RTC, Branch 57 in Cebu City, presided this
time by Judge Enriqueta L. Belarmino, issued, on December 9, 2002, an Order [14] that reversed its earlier decision of
November
28,
2000
and
dismissed
the
Ouanos'
complaint.
Ruling
of
the
CA
In time, the Ouanos interposed an appeal to the CA, docketed as CA-G.R. CV No. 78027. Eventually, the appellate court
rendered a Decision[15] dated September 3, 2004, denying the appeal, thus:
WHEREFORE, premises considered, the Order dated December 9, 2002, of the Regional Trial Court, 7 th Judicial Region, Branch
57, Cebu City, in Civil Case No. CEB-20743, is hereby AFFIRMED.
No pronouncement as to costs.
SO
ORDERED.
Explaining its case disposition, the CA stated that the decision in Civil Case No. R-1881 did not state any condition that Lot
No. 763-A of the Ouanos--and all covered lots for that matter--would be returned to them or that they could repurchase the
same property if it were to be used for purposes other than for the Lahug Airport. The appellate court also went on to
declare the inapplicability of the Court's pronouncement in MCIAA v. Court of Appeals, RTC, Branch 9, Cebu City, Melba
Limbago, et al.,[16] to support the Ouanos' cause, since the affected landowners in that case, unlike the Ouanos, parted with
their
property
not
through
expropriation
but
via
a
sale
and
purchase
transaction.
The Ouanos filed a motion for reconsideration of the CA's Decision, but was denied per the CA's May 26, 2005 Resolution. [17]
Hence, they filed this petition in G.R. No. 168770.
The Issues
G.R. No. 168812
GROUNDS
FOR
ALLOWANCE
OF
THE
PETITION
l. THE ASSAILED ISSUANCES ILLEGALLY STRIPPED THE REPUBLIC OF ITS ABSOLUTE AND UNCONDITIONAL TITLE TO THE
SUBJECT
EXPROPRIATED
PROPERTIES.

ll. THE IMPUNGED DISPOSITIONS INVALIDLY OVERTURNED THIS HONORABLE COURT'S FINAL RULINGS IN FERY V.
MUNICIPALITY OF CABANATUAN, MCIAA V. COURT OF APPEALS AND REYES V. NATIONAL HOUSING AUTHORITY.
lll. THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THIS HONORABLE COURT'S RULING IN MORENO, ALBEIT IT HAS NOT
YET
ATTAINED
FINALITY.[18]
G.R. No. 168770
Questions
of
law
presented
in
this
Petition
Whether or not the testimonial evidence of the petitioners proving the promises, assurances and representations by the
airport
officials
and
lawyers
are
inadmissbale
under
the
Statute
of
Frauds.
Whether or not under the ruling of this Honorable Court in the heirs of Moreno Case, and pursuant to the principles
enunciated therein, petitioners herein are entitiled to recover their litigated property.
Reasons
for
Allowances
of
this
Petition
Respondents did not object during trial to the admissibility of petitioners' testimonial evidence under the Statute of Frauds
and have thus waived such objection and are now barred from raising the same. In any event, the Statute of Frauds is not
applicable herein. Consequently, petitioners' evidence is admissible and should be duly given weight and credence, as
initially
held
by
the
trial
court
in
its
original
Decision. [19]
While their respective actions against MCIAA below ended differently, the Ouanos and the Inocians' proffered arguments
presented before this Court run along parallel lines, both asserting entitlement to recover the litigated property on the
strength of the Court's ruling in Heirs of Moreno. MCIAA has, however, formulated in its Consolidated Memorandum the key
interrelated issues in these consolidated cases, as follows:
I.WHETHER ABANDONMENT OF THE PUBLIC USE FOR WHICH THE SUBJECT PROPERTIES WERE EXPROPRIATED ENTITLES
PETITIONERS OUANOS, ET AL. AND RESPONDENTS INOCIAN, ET AL. TO REACQUIRE THEM.
IIWHETHER PETITIONERS OUANOS, ET AL. AND RESPONDENTS INOCIAN, ET AL. ARE ENTITLED TO RECONVEYANCE OF THE
SUBJECT PROPERTIES SIMPLY ON THE BASIS OF AN ALLEGED VERBAL PROMISE OR ASSURANCE OF SOME NAC OFFICIALS
THAT THE SUBJECT PROPERTIES WILL BE RETUNRED IF THE AIRPORT PROJECT WOULD BE ABANDONED
The Court's Ruling
The Republic and MCIAA's petition in G.R. No. 168812 is bereft of merit, while the Ouano petition in G.R. No. 168770 is
meritorious.
At
the
outset,
three
(3)
fairly
established
factual
premises
ought
to
be
emphasized:
First, the MCIAA and/or its predecessor agency had not actually used the lots subject of the final decree of expropriation in
Civil Case No. R-1881 for the purpose they were originally taken by the government, i.e., for the expansion and development
of
Lahug
Airport.
Second, the Lahug Airport had been closed and abandoned. A significant portion of it had, in fact, been purchased by a
private
corporation
for
development
as
a
commercial
complex. [20]
Third, it has been preponderantly established by evidence that the NAC, through its team of negotiators, had given
assurance to the affected landowners that they would be entitled to repurchase their respective lots in the event they are no
longer used for airport purposes.[21] "No less than Asterio Uy," the Court noted in Heirs of Moreno, "one of the members of
the CAA Mactan Legal Team, which interceded for the acquisition of the lots for the Lahug Airport's expansion, affirmed that
persistent assurances were given to the landowners to the effect that as soon as the Lahug Airport is abandoned or
transferred to Mactan, the lot owners would be able to reacquire their properties." [22] In Civil Case No. CEB-20743, Exhibit
"G," the transcript of the deposition[23] of Anunciacion vda. de Ouano covering the assurance made had been formally offered
in evidence and duly considered in the initial decision of the RTC Cebu City. In Civil Case No. CEB-18370, the trial court, on
the basis of testimonial evidence, and later the CA, recognized the reversionary rights of the suing former lot owners or their
successors in interest[24] and resolved the case accordingly. In point with respect to the representation and promise of the
government to return the lots taken should the planned airport expansion do not materialize is what the Court said in Heirs
of Moreno, thus:
This is a difficult case calling for a difficult but just solution. To begin with there exists an undeniable historical narrative that
the predecessors of respondent MCIAA had suggested to the landowners of the properties covered by the Lahug Airport
expansion scheme that they could repurchase their properties at the termination of the airport's venue. Some acted on this
assurance and sold their properties; other landowners held out and waited for the exercise of eminent domain to take its
course until finally coming to terms with respondent's predecessors that they would not appeal nor block further judgment of
condemnation if the right of repurchase was extended to them. A handful failed to prove that they acted on such assurance
when
they
parted
with
ownership
of
their
land. [25]
(Emphasis
supplied;
citations
omitted.)
For perspective, Heirs of Moreno--later followed by MCIAA v. Tudtud (Tudtud)[26] and the consolidated cases at bar--is cast
under the same factual setting and centered on the expropriation of privately-owned lots for the public purpose of expanding
the Lahug Airport and the alleged promise of reconveyance given by the negotiating NAC officials to the private lot owners.
All the lots being claimed by the former owners or successors-in-interest of the former owners in the Heirs of Moreno,
Tudtud, and the present cases were similarly adjudged condemned in favor of the Republic in Civil Case No. R-1881. All the
claimants sought was or is to have the condemned lots reconveyed to them upon the payment of the condemnation price
since the public purpose of the expropriation was never met. Indeed, the expropriated lots were never used and were, in
fact,
abandoned
by
the
expropriating
government
agencies.
In all then, the issues and supporting arguments presented by both sets of petitioners in these consolidated cases have
already previously been passed upon, discussed at length, and practically peremptorily resolved in Heirs of Moreno and the
November 2008 Tudtud ruling. The Ouanos, as petitioners in G.R. No. 168770, and the Inocians, as respondents in G.R. No.
168812, are similarly situated as the heirs of Moreno in Heirs of Moreno and Benjamin Tudtud in Tudtud. Be that as it may,
there is no reason why the ratio decidendi in Heirs of Moreno and Tudtud should not be made to apply to petitioners Ouanos
and respondents Inocians such that they shall be entitled to recover their or their predecessors' respective properties under
the same manner and arrangement as the heirs of Moreno and Tudtud. Stare decisis et non quieta movere (to adhere to
precedents,
and
not
to
unsettle
things
which
are
established).[27]
Just like in Tudtud and earlier in Heirs of Moreno, MCIAA would foist the theory that the judgment of condemnation in Civil
Case No. R-1881 was without qualification and was unconditional. It would, in fact, draw attention to the fallo of the
expropriation court's decision to prove that there is nothing in the decision indicating that the government gave assurance or
undertook to reconvey the covered lots in case the Lahug airport expansion project is aborted. Elaborating on this angle,
MCIAA argues that the claim of the Ouanos and the Inocians regarding the alleged verbal assurance of the NAC negotiating
team
that
they
can
reacquire
their
landholdings
is
barred
by
the
Statute
of
Frauds. [28]
Under the rule on the Statute of Frauds, as expressed in Article 1403 of the Civil Code, a contract for the sale or acquisition
of real property shall be unenforceable unless the same or some note of the contract be in writing and subscribed by the
party charged. Subject to defined exceptions, evidence of the agreement cannot be received without the writing, or
secondary
evidence
of
its
contents.
MCIAA's invocation of the Statute of Frauds is misplaced primarily because the statute applies only to executory and not to
completed, executed, or partially consummated contracts. [29] Carbonnel v. Poncio, et al., quoting Chief Justice Moran,
explains the rationale behind this rule, thusly:
x x x "The reason is simple. In executory contracts there is a wide field for fraud because unless they may be in writing
there is no palpable evidence of the intention of the contracting parties. The statute has been precisely been enacted to
prevent fraud." x x x However, if a contract has been totally or partially performed, the exclusion of parol evidence would
promote fraud or bad faith, for it would enable the defendant to keep the benefits already derived by him from the
transaction in litigation, and at the same time, evade the obligations, responsibilities or liabilities assumed or contracted by
him
thereby.[30]
(Emphasis
in
the
original.)
Analyzing the situation of the cases at bar, there can be no serious objection to the proposition that the agreement package
between the government and the private lot owners was already partially performed by the government through the
acquisition of the lots for the expansion of the Lahug airport. The parties, however, failed to accomplish the more important
condition in the CFI decision decreeing the expropriation of the lots litigated upon: the expansion of the Lahug Airport. The
project--the public purpose behind the forced property taking--was, in fact, never pursued and, as a consequence, the lots
expropriated were abandoned. Be that as it may, the two groups of landowners can, in an action to compel MCIAA to make
good
its
oral
undertaking
to
allow
repurchase,
adduce
parol
evidence
to
prove
the
transaction.
At any rate, the objection on the admissibility of evidence on the basis of the Statute of Frauds may be waived if not timely
raised. Records tend to support the conclusion that MCIAA did not, as the Ouanos and the Inocians posit, object to the

introduction of parol evidence to prove its commitment to allow the former landowners to repurchase their respective
properties
upon
the
occurrence
of
certain
events.
In a bid to deny the lot owners the right to repurchase, MCIAA, citing cases, [31] points to the dispositive part of the decision in
Civil Case R-1881 which, as couched, granted the Republic absolute title to the parcels of land declared expropriated. The
MCIAA is correct about the unconditional tone of the dispositive portion of the decision, but that actuality would not carry the
day for the agency. Addressing the matter of the otherwise absolute tenor of the CFI's disposition in Civil Case No. R-1881,
the Court, in Heirs of Moreno, after taking stock of the ensuing portion of the body of the CFI's decision, said:
As for the public purpose of the expropriation proceeding, it cannot now be doubted. Although Mactan Airport is being
constructed, it does not take away the actual usefulness and importance of the Lahug Airport: it is handling the air traffic of
both civilian and military. From it aircrafts fly to Mindanao and Visayas and pass thru it on their flights to the North and
Manila. Then, no evidence was adduced to show how soon is the Mactan Airport to be placed in operation and whether the
Lahug Airport will be closed immediately thereafter. It is up to the other departments of the Government to determine said
matters. The Court cannot substitute its judgments for those of the said departments or agencies. In the absence of such
showing, the court will presume that the Lahug Airport will continue to be in operation. [32] (Emphasis supplied.)
We went on to state as follows:
While the trial court in Civil Case No. R-1881 could have simply acknowledged the presence of public purpose for the
exercise of eminent domain regardless of the survival of the Lahug Airport, the trial court in its Decision chose not to do so
but instead prefixed its finding of public purpose upon its understanding that `Lahug Airport will continue to be in operation'.
Verily, these meaningful statements in the body of the Decision warrant the conclusion that the expropriated properties
would remain to be so until it was confirmed that Lahug Airport was no longer `in operation'. This inference further implies
two (2) things: (a) after the Lahug Airport ceased its undertaking as such and the expropriated lots were not being used for
any airport expansion project, the rights vis- -vis the expropriated lots x x x as between the State and their former owners,
petitioners herein, must be equitably adjusted; and (b) the foregoing unmistakable declarations in the body of the Decision
should merge with and become an intrinsic part of the fallo thereof which under the premises is clearly inadequate since the
dispositive
portion
is
not
in
accord
with
the
findings
as
contained
in
the
body
thereof. [33]
Not to be overlooked of course is what the Court said in its Resolution disposing of MCIAA's motion to reconsider the original
ruling in Heirs of Moreno. In that resolution, We stated that the fallo of the decision in Civil Case R-1881 should be viewed
and understood in connection with the entire text, which contemplated a return of the property taken if the airport expansion
project were abandoned. For ease of reference, following is what the Court wrote:
Moreover, we do not subscribe to the [MCIAA's] contention that since the possibility of the Lahug Airport's closure was
actually considered by the trial court, a stipulation on reversion or repurchase was so material that it should not have been
discounted by the court a quo in its decision in Civil Case No. R-1881, if, in fact, there was one. We find it proper to cite, once
more, this Court's ruling that the fallo of the decision in Civil Case No. R-1881 must be read in reference to the other portions
of the decision in which it forms a part. A reading of the Court's judgment must not be confined to the dispositive portion
alone; rather it should be meaningfully construed in unanimity with the ratio decidendi thereof to grasp the true intent and
meaning
of
a
decision.[34]
The Court has, to be sure, taken stock of Fery v. Municipality of Cabanatuan,[35] a case MCIAA cites at every possible turn,
where the Court made these observations:
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. x x x 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 x x x and in that
case the non-user does not have the effect of defeating the title acquired by the expropriation proceedings x x x.
Fery notwithstanding, MCIAA cannot really rightfully say that it has absolute title to the lots decreed expropriated in Civil
Case No. R-1881. The correct lesson of Fery is captured by what the Court said in that case, thus: "the government acquires
only such rights in expropriated parcels of land as may be allowed by the character of its title over the properties." In light of
our disposition in Heirs of Moreno and Tudtud, the statement immediately adverted to means that in the event the particular
public use for which a parcel of land is expropriated is abandoned, the owner shall not be entitled to recover or repurchase it
as a matter of right, unless such recovery or repurchase is expressed in or irresistibly deducible from the condemnation
judgment. But as has been determined below, the decision in Civil Case No. R-1881 enjoined MCIAA, as a condition of
approving expropriation, to allow recovery or repurchase upon abandonment of the Lahug airport project. To borrow from our
underlying decision in Heirs of Moreno, "[n]o doubt, the return or repurchase of the condemned properties of petitioners
could readily be justified as the manifest legal effect of consequence of the trial court's underlying presumption that `Lahug
Airport will continue to be in operation' when it granted the complaint for eminent domain and the airport discontinued its
activities."[36]
Providing added support to the Ouanos and the Inocians' right to repurchase is what in Heirs of Moreno was referred to as
constructive trust, one that is akin to the implied trust expressed in Art. 1454 of the Civil Code, [37] the purpose of which is to
prevent unjust enrichment.[38] In the case at bench, the Ouanos and the Inocians parted with their respective lots in favor of
the MCIAA, the latter obliging itself to use the realties for the expansion of Lahug Airport; failing to keep its end of the
bargain, MCIAA can be compelled by the former landowners to reconvey the parcels of land to them, otherwise, they would
be denied the use of their properties upon a state of affairs that was not conceived nor contemplated when the expropriation
was authorized. In effect, the government merely held the properties condemned in trust until the proposed public use or
purpose for which the lots were condemned was actually consummated by the government. Since the government failed to
perform the obligation that is the basis of the transfer of the property, then the lot owners Ouanos and Inocians can demand
the
reconveyance
of
their
old
properties
after
the
payment
of
the
condemnation
price.
Constructive trusts are fictions of equity that courts use as devices to remedy any situation in which the holder of the legal
title, MCIAA in this case, may not, in good conscience, retain the beneficial interest. We add, however, as in Heirs of Moreno,
that the party seeking the aid of equity--the landowners in this instance, in establishing the trust--must himself do equity in a
manner
as
the
court
may
deem
just
and
reasonable.
The Court, in the recent MCIAA v. Lozada, Sr., revisited and abandoned the Fery ruling that the former owner is not entitled
to reversion of the property even if the public purpose were not pursued and were abandoned, thus:
On this note, we take this opportunity to revisit our ruling inFery, which involved an expropriation suit commenced upon
parcels of land to be used as a site for a public market. Instead of putting up a public market, respondent Cabanatuan
constructed residential houses for lease on the area. Claiming that the municipality lost its right to the property taken since
it did not pursue its public purpose, petitioner Juan Fery, the former owner of the lots expropriated, sought to recover his
properties. However, as he had admitted that, in 1915, respondentCabanatuan acquired a fee simple title to the lands in
question, judgment was rendered in favor of the municipality, following American jurisprudence, particularlyCity of Fort
Wayne v. Lake Shore & M.S. RY. Co., McConihay v. Theodore Wright, andReichling v. Covington Lumber Co., all uniformly
holding that the transfer to a third party of the expropriated real property, which necessarily resulted in the abandonment of
the particular public purpose for which the property was taken, is not a ground for the recovery of the same by its previous
owner,
the
title
of
the
expropriating
agency
being
one
of
fee
simple.
Obviously,Ferywas not decided pursuant to our now sacredly held constitutional right that private property shall not be taken
for public use without just compensation. It is well settled that the taking of private property by the Governments power of
eminent domain is subject to two mandatory requirements: (1) that it is for a particular public purpose; and (2) that just
compensation be paid to the property owner. These requirements partake of the nature of implied conditions that should be
complied
with
to
enable
the
condemnor
to
keep
the
property
expropriated.
More particularly, with respect to the element of public use, the expropriator should commit to use the property pursuant to
the purpose stated in the petition for expropriation filed, failing which, it should file another petition for the new purpose. If
not, it is then incumbent upon the expropriator to return the said property to its private owner, if the latter desires to
reacquire the same. Otherwise, the judgment of expropriation suffers an intrinsic flaw, as it would lack one indispensable
element for the proper exercise of the power of eminent domain, namely, the particular public purpose for which the
property will be devoted. Accordingly, the private property owner would be denied due process of law, and the judgment
would
violate
the
property
owners
right
to
justice,
fairness,
and
equity.
In light of these premises, we now expressly hold that the taking of private property, consequent to the Governments
exercise of its power of eminent domain, is always subject to the condition that the property be devoted to the specific
public purpose for which it was taken. Corollarily, if this particular purpose or intent is not initiated or not at all pursued, and

is peremptorily abandoned, then the former owners, if they so desire, may seek the reversion of the property, subject to the
return of the amount of just compensation received. In such a case, the exercise of the power of eminent domain has
become
improper
for
lack
of
the
required
factual
justification. [39]
(Emphasis
supplied.)
Clinging to Fery, specifically the fee simple concept underpinning it, is no longer compelling, considering the ensuing
inequity such application entails. Too, the Court resolved Fery not under the cover of any of the Philippine Constitutions, each
decreeing that private property shall not be taken for public use without just compensation. The twin elements of just
compensation and public purpose are, by themselves, direct limitations to the exercise of eminent domain, arguing, in a
way, against the notion of fee simple title. The fee does not vest until payment of just compensation. [40]
In esse, expropriation is forced private property taking, the landowner being really without a ghost of a chance to defeat the
case of the expropriating agency. In other words, in expropriation, the private owner is deprived of property against his
will. Withal, the mandatory requirement of due process ought to be strictly followed, such that the state must show, at the
minimum, a genuine need, an exacting public purpose to take private property, the purpose to be specifically alleged or
least
reasonably
deducible
from
the
complaint.
Public use, as an eminent domain concept, has now acquired an expansive meaning to include any use that is of "usefulness,
utility, or advantage, or what is productive of general benefit [of the public]." [41] If the genuine public necessity--the very
reason or condition as it were--allowing, at the first instance, the expropriation of a private land ceases or disappears, then
there is no more cogent point for the government's retention of the expropriated land. The same legal situation should hold
if the government devotes the property to another public use very much different from the original or deviates from the
declared purpose to benefit another private person. It has been said that the direct use by the state of its power to oblige
landowners to renounce their productive possession to another citizen, who will use it predominantly for that citizen's own
private
gain,
is
offensive
to
our
laws. [42]
A condemnor should commit to use the property pursuant to the purpose stated in the petition for expropriation, failing
which it should file another petition for the new purpose. If not, then it behooves the condemnor to return the said property
to its private owner, if the latter so desires. The government cannot plausibly keep the property it expropriated in any
manner it pleases and, in the process, dishonor the judgment of expropriation. This is not in keeping with the idea of fair
play,
The notion, therefore, that the government, via expropriation proceedings, acquires unrestricted ownership over or a fee
simple title to the covered land, is no longer tenable. We suggested as much in Heirs of Moreno and in Tudtud and more
recently in Lozada, Sr. Expropriated lands should be differentiated from a piece of land, ownership of which was absolutely
transferred by way of an unconditional purchase and sale contract freely entered by two parties, one without obligation to
buy and the other without the duty to sell. In that case, the fee simple concept really comes into play. There is really no
occasion to apply the "fee simple concept" if the transfer is conditional. The taking of a private land in expropriation
proceedings is always conditioned on its continued devotion to its public purpose. As a necessary corollary, once the purpose
is terminated or peremptorily abandoned, then the former owner, if he so desires, may seek its reversion, subject of course
to
the
return,
at
the
very
least,
of
the
just
compensation
received.
To be compelled to renounce dominion over a piece of land is, in itself, an already bitter pill to swallow for the owner. But to
be asked to sacrifice for the common good and yield ownership to the government which reneges on its assurance that the
private property shall be for a public purpose may be too much. But it would be worse if the power of eminent domain were
deliberately used as a subterfuge to benefit another with influence and power in the political process, including development
firms. The mischief thus depicted is not at all far-fetched with the continued application of Fery. Even as the Court
deliberates on these consolidated cases, there is an uncontroverted allegation that the MCIAA is poised to sell, if it has not
yet sold, the areas in question to Cebu Property Ventures, Inc. This provides an added dimension to abandon Fery.
Given the foregoing disquisitions, equity and justice demand the reconveyance by MCIAA of the litigated lands in question to
the Ouanos and Inocians. In the same token, justice and fair play also dictate that the Ouanos and Inocian return to MCIAA
what they received as just compensation for the expropriation of their respective properties plus legal interest to be
computed from default, which in this case should run from the time MCIAA complies with the reconveyance obligation. [43]
They must likewise pay MCIAA the necessary expenses it might have incurred in sustaining their respective lots and the
monetary value of its services in managing the lots in question to the extent that they, as private owners, were benefited
thereby.
In accordance with Art. 1187 of the Civil Code on mutual compensation, MCIAA may keep whatever income or fruits it may
have obtained from the parcels of land expropriated. In turn, the Ouanos and Inocians need not require the accounting of
interests
earned
by
the
amounts
they
received
as
just
compensation. [44]
Following Art. 1189 of the Civil Code providing that "[i]f the thing is improved by its nature, or by time, the improvement
shall inure to the benefit of the creditor x x x," the Ouanos and Inocians do not have to settle the appreciation of the values
of their respective lots as part of the reconveyance process, since the value increase is merely the natural effect of nature
and
time.
Finally, We delete the award of PhP 50,000 and PhP 10,000, as attorney's fees and litigation expenses, respectively, made in
favor of the Inocians by the Cebu City RTC in its judgment in Civil Case No. CEB-18370, as later affirmed by the CA. As a
matter of sound policy, no premium should be set on the right to litigate where there is no doubt about the bona fides of the
exercise of such right, [45] as here, albeit the decision of MCIAA to resist the former landowners' claim eventually turned out to
be
untenable.
WHEREFORE, the petition in G.R. No. 168770 is GRANTED. Accordingly, the CA Decision dated September 3, 2004 in CA-G.R.
CV No. 78027 is REVERSED and SET ASIDE. Mactan-Cebu International Airport Authority is ordered to reconvey subject Lot
No. 763-A to petitioners Anunciacion vda. de Ouano, Mario P. Ouano, Leticia Ouano Arnaiz, and Cielo Ouano Martinez. The
Register of Deeds of Cebu City is ordered to effect the necessary cancellation of title and transfer it in the name of the
petitioners
within
fifteen
(15)
days
from
finality
of
judgment.
The petition of the Mactan-Cebu International Airport Authority in G.R. No. 168812 is DENIED, and the CA's Decision and
Resolution dated January 14, 2005 and June 29, 2005, respectively, in CA-G.R. CV No. 64356 are AFFIRMED, except insofar as
they awarded attorney's fees and litigation expenses that are hereby DELETED. Accordingly, Mactan-Cebu International
Airport Authority is ordered to reconvey to respondents Ricardo L. Inocian, Olympia E. Esteves, Emilia E. Bacalla, Restituta E.
Montana, and Raul L. Inocian the litigated Lot Nos. 744-A, 745-A, 746, 762-A, 747, and 761-A; and to respondents Aletha
Suico Magat, Philip M. Suico, Dolores S. dela Cruz, James M. Suico, Edward M. Suico, Roselyn S. Lawsin, Rex M. Suico, and
Kharla Suico-Gutierrez the litigated Lot Nos. 942 and 947. The Register of Deeds of Cebu City is ordered to effect the
necessary cancellation of title and transfer it in the name of respondents within a period of fifteen (15) days from finality of
judgment.
The foregoing dispositions are subject to QUALIFICATIONS, to apply to these consolidated petitions, when appropriate, as
follows:
(1) Petitioners Ouano, et al. in G.R. No. 168770 and respondents Ricardo L Inocian, et al. in G.R. No. 168812 are ordered to
return to the MCIAA the just compensation they or their predecessors-in-interest received for the expropriation of their
respective lots as stated in Civil Case No. R-1881, within a period of sixty (60) days from finality of judgment;
(2) The MCIAA shall be entitled to RETAIN whatever fruits and income it may have obtained from the subject expropriated
lots
without
any
obligation
to
refund
the
same
to
the
lot
owners;
and
(3) Petitioners Ouano, et al. in G.R. No. 168770 and respondents Ricardo L. Inocian, et al. in G.R. No. 168812 shall RETAIN
whatever interests the amounts they received as just compensation may have earned in the meantime without any
obligation
to
refund
the
same
to
MCIAA.
SO ORDERED.

[G.R. No. L-8029. June 28, 1956.]

EMILIA ESPIQUE and SANTIAGO ESPIQUE, Plaintiffs-Appellants, vs. JACINTO ESPIQUE, DefendantAppellee.
DECISION
BAUTISTA ANGELO, J.:
This is an action for partition of three parcels of land situated in Tayug, Pangasinan based on the claim that they are owned
in common and pro indiviso by Plaintiffs and Defendant. Plaintiffs also pray for damages representing unenjoyed profits from
1916 to 1949, or a period of 33 years.
The defense of Defendant is that said lands were given to him and his wife by his parents Basilio ESPIQUE and Maria Diaz as
well as his grandfather Julian ESPIQUE by way of a donation propter nuptias on May 8, 1906 and since then he and his wife
have been in possession and enjoyment thereof for a period of 44 years adversely and without interruption. He pleaded
prescription and lack of cause of action.
On the date set for hearing, the parties submitted a stipulation of facts wherein, among other things, they agreed (1) that
Plaintiffs and Defendant are the legitimate children of Basilio ESPIQUE and Maria Diaz, the former being the legitimate son of
Julian ESPIQUE, and (2) that the properties in question were donated propter nuptias by Julian ESPIQUE and the spouses
Basilio ESPIQUE and Maria Diaz in favor of Jacinto ESPIQUE and Victorina Abenojar, but the donation was merely made in a
private document executed on May 8, 1906.
In view of the above stipulation of facts, Defendant submitted a motion to dismiss, to which Plaintiffs filed a reply and,
thereafter, the court rendered judgment finding that Plaintiffs complaint has no cause of action it appearing that the
properties which are sought to be partitioned were donated to Defendant since 1906 who has been in possession thereof
adversely and continuously for more than forty years and, hence, has acquired title thereto by prescription. Consequently,
the court dismissed the action without pronouncement as to costs. Plaintiffs appealed from this decision in due course but
the Court of Appeals certified the case to this Court on the ground that it merely involves questions of law.
The question to be determined is whether the lower court erred in concluding that Plaintiffs complaint states no cause of
action because, considering its allegations and the stipulation of facts submitted by the parties, the properties in question
were donated to Defendant by his predecessors-in-interest way back in 1906 and since then he has been in possession and
enjoyment thereof adversely, openly and without interruption up to 1949, or for a period of more than forty years.
Plaintiffs sustain the affirmative on the plain plea that the deed of donation which Defendant claims as the basis of his title
being one in consideration of marriage is null and void and as such could not have conveyed or transferred any title, right or
interest over the lands in question to Defendant because it has not been executed in a public document. And even if said
donation may be said to be the basis of acquisitive prescription, Plaintiffs contend that there is no evidence whatever
showing that the possession of Defendant has been continuous, public open and adverse for more than 30 years as found by
the trial court.
There is no question that the donation in question is invalid because it involves an immovable property and the donation was
not made in a public document as required by Article 633 of the old Civil Code, in connection with Article 1328 of the same
Code (concerning gifts propter nuptias), but it does not follow that said donation may not serve as basis of acquisitive
prescription when on the strength thereof the donee has taken possession of the property adversely and in the concept of
owner, for, as this Court well said:chanroblesvirtuallawlibrary While the verbal donation, under which the Defendants, and
his predecessors in interest have been in possession of the lands in question, is not effective as a transfer of title, yet it is a
circumstance which may explain the adverse and exclusive character of the possession (Pensader vs. Pensader, 47 Phil.,
959; chan roblesvirtualawlibrarySee also Dimaliwat vs. Dimaliwat, 55 Phil., 673-680). That is also an action for partition. It
was shown that the donation of the property was made not even in a private document but only verbally. It was also shown
that the Defendants, through their predecessors-in-interest, were in adverse and continuous possession of the lands for a
period of over 30 years. Yet, the court decided the case in favor of Defendants on the ground of acquisitive prescription.
There is also a close parallelism between the facts of this case and the present.
It is true that no evidence was presented showing the character of the possession held by the Defendant of the lands in
question, but such is unnecessary considering the admissions made by Plaintiffs in the complaint and in the stipulation of
facts. A careful analysis of the admissions made in both pleadings would at once reveal that Defendant has been in open,
adverse and continuous possession of said lands since at least 1916 up to 1949, or for a period of 33 years. Thus, it appears
in paragraphs 4 and 5 of the first cause of action that Defendant has been in possession of the lands in question and has
appropriated unto himself the whole produce of the aforementioned parcels of land, from 1916 up to the present so much
so that Plaintiffs prayed that they be given their share of the produce during said period by way of damages in the total
amount of P22,000.
We do not need to stretch our mind to see that under such allegations Plaintiffs intended to convey the idea that Defendant
has possessed the lands openly, adversely and without interruption from 1916 to 1949 for he is the one who has possessed
them and reaped the whole benefit thereof. As to the character of the possession held by Defendant during that period one
cannot also deny that it is in the concept of owner considering that the lands were donated to him by his predecessors-ininterest on the occasion of his marriage even if the same was not embodied in a public instrument. The essential elements
constituting acquisitive prescription are therefore present which negative the right of Plaintiffs to ask for partition of said
properties. On this point we find pertinent the following observation of the trial court. Any person who claims right of
ownership over immovable properties and does not invoke that right but instead tolerated others in possession for thirty
years is guilty of laches and negligence and he must suffer the consequences of his acts.
With regard to the contention that the trial court dismissed the case without first receiving the evidence the Plaintiffs may
desire to present in support of their contention, it is true that this right was reserved by the parties in the stipulation of facts
and Plaintiffs asked in their motion for reconsideration that they be given a chance to prove some additional facts, but they
failed to state clearly what those facts are and the nature of the evidence they would like to present, for which reason the
court denied their request. Undoubtedly, the trial court did not deem necessary any additional evidence considering the
admissions made by the Plaintiffs as above adverted to.
Considering the conclusion we have reached, we hold that the trial court did not err in this respect.
Wherefore, the decision appealed from is affirmed, without pronouncement as to costs.
Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Labrador, Concepcion, Reyes, J.B.L., and Endencia, JJ., concur.
[G.R. NO. 171072 : April 7, 2009]

GOLDCREST REALTY CORPORATION, Petitioner, v. CYPRESS GARDENS CONDOMINIUM CORPORATION,

Respondent.
DECISION
QUISUMBING, J.:
For review on certiorari are the Decision1 dated September 29, 2005 and the Resolution 2 dated January 16, 2006 of the Court
of Appeals in CA G.R. SP No. 79924.
The antecedent facts in this case are as follows:
Petitioner Goldcrest Realty Corporation (Goldcrest) is the developer of Cypress Gardens, a ten-storey building located at
Herrera Street, Legaspi Village, Makati City. On April 26, 1977, Goldcrest executed a Master Deed and Declaration of
Restrictions3 which constituted Cypress Gardens into a condominium project and incorporated respondent Cypress Gardens
Condominium Corporation (Cypress) to manage the condominium project and to hold title to all the common areas. Title to
the land on which the condominium stands was transferred to Cypress under Transfer Certificate of Title No. S-67513. But
Goldcrest retained ownership of the two-level penthouse unit on the ninth and tenth floors of the condominium registered
under Condominium Certificate of Title (CCT) No. S-1079 of the Register of Deeds of Makati City. Goldcrest and its directors,
officers, and assigns likewise controlled the management and administration of the Condominium until 1995.
Following the turnover of the administration and management of the Condominium to the board of directors of Cypress in
1995, it was discovered that certain common areas pertaining to Cypress were being occupied and encroached upon by
Goldcrest. Thus, in 1998, Cypress filed a complaint with damages against Goldcrest before the Housing and Land Use
Regulatory Board (HLURB), seeking to compel the latter to vacate the common areas it allegedly encroached on and to
remove the structures it built thereon. Cypress sought to remove the door erected by Goldcrest along the stairway between
the 8th and 9th floors, as well as the door built in front of the 9th floor elevator lobby, and the removal of the cyclone wire

fence on the roof deck. Cypress likewise prayed that Goldcrest pay damages for its occupation of the said areas and for its
refusal to remove the questioned structures.
For its part, Goldcrest averred that it was granted the exclusive use of the roof deck's limited common area by Section 4(c) 4
of the condominium's Master Deed. It likewise argued that it constructed the contested doors for privacy and security
purposes, and that, nonetheless, the common areas occupied by it are unusable and inaccessible to other condominium unit
owners.
Upon the directive of HLURB Arbiter San Vicente, two ocular inspections 5 were conducted on the condominium project.
During the first inspection, it was found that Goldcrest enclosed and used the common area fronting the two elevators on the
ninth floor as a storage room. It was likewise discovered that Goldcrest constructed a permanent structure which encroached
68.01 square meters of the roof deck's common area. 6
During the second inspection, it was noted that Goldcrest failed to secure an alteration approval for the said permanent
structure.
In his Decision7 dated December 2, 1999, Arbiter San Vicente ruled in favor of Cypress. He required Goldcrest, among other
things, to: (1) remove the questioned structures, including all other structures which inhibit the free ingress to and egress
from the condominium's limited and unlimited common areas; (2) vacate the roof deck's common areas and to pay actual
damages for occupying the same; and (3) pay an administrative fine for constructing a second penthouse and for making an
unauthorized alteration of the condominium plan.
On review, the HLURB Special Division modified the decision of Arbiter San Vicente. It deleted the award for actual damages
after finding that the encroached areas were not actually measured and that there was no evidentiary basis for the rate of
compensation fixed by Arbiter San Vicente. It likewise held that Cypress has no cause of action regarding the use of the roof
deck's limited common area because only Goldcrest has the right to use the same. The dispositive portion of the decision
reads:
WHEREFORE, in view of the foregoing, the decision of the office [is] modified as follows:
1. Directing respondent to immediately remove any or all structures which obstruct the use of the stairway from the eighth
to tenth floor, the passage and use of the lobbies at the ninth and tenth floors of the Cypress Gardens Condominium; and to
remove any or all structures that impede the use of the unlimited common areas.
2. Ordering the respondent to pay an administrative fine of P10,000.00 for its addition of a second penthouse and/or
unauthorized alteration of the condominium plan.
All other claims are hereby dismissed.
SO ORDERED.8
Aggrieved, Cypress appealed to the Office of the President. It questioned the deletion of the award for actual damages and
argued that the HLURB Special Division in effect ruled that Goldcrest could erect structures on the roof deck's limited
common area and lease the same to third persons.
The Office of the President dismissed the appeal. It ruled that the deletion of the award for actual damages was proper
because the exact area encroached by Goldcrest was not determined. It likewise held that, contrary to the submissions of
Cypress, the assailed decision did not favor the building of structures on either the condominium's limited or unlimited
common areas. The Office of the President stressed that the decision did not only order Goldcrest to remove the structures
impeding the use of the unlimited common areas, but also fined it for making unauthorized alteration and construction of
structures on the condominium's roof deck.9 The dispositive portion of the decision reads:
WHEREFORE, premises considered, the appeal of Cypress Gardens Corporation is hereby dismissed and the decision of the
Board a quo dated May 11, 2000 is hereby AFFIRMED.
SO ORDERED.10
Cypress thereafter elevated the matter to the Court of Appeals, which partly granted its appeal. The appellate court noted
that the right of Goldcrest under Section 4(c) of the Master Deed for the exclusive use of the easement covering the portion
of the roof deck appurtenant to the penthouse did not include the unrestricted right to build structures thereon or to lease
such area to third persons. Thus the appellate court ordered the removal of the permanent structures constructed on the
limited common area of the roof deck. The dispositive portion of the decision reads:
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Office of the President dated June 2, 2003 is hereby
AFFIRMED with modification. Respondent Goldcrest Realty Corporation is further directed to remove the permanent
structures constructed on the limited common area of the roof deck.
SO ORDERED.11
The parties separately moved for partial reconsideration but both motions were denied.
Hence this petition, raising the following issues:
I.
[WHETHER OR NOT] THE APPELLATE COURT ERRED IN RULING THAT GOLDCREST BUILT AN OFFICE STRUCTURE ON A
SUPPOSED ENCROACHED AREA IN THE OPEN SPACE OF THE ROOF DECK.
II.
[WHETHER OR NOT] THE APPELLATE COURT ERRED IN RULING THAT PETITIONER IMPAIRED THE EASEMENT ON THE PORTION
OF THE ROOF DECK DESIGNATED AS A LIMITED COMMON AREA. 12
Anent the first issue, Goldcrest contends that since the areas it allegedly encroached upon were not actually measured
during the previous ocular inspections, the finding of the Court of Appeals that it built an office structure on the roof deck's
limited common area is erroneous and that its directive "to remove the permanent structures 13 constructed on the limited
common area of the roof deck" is impossible to implement.
On the other hand, Cypress counters that the Court of Appeals' finding is correct. It also argues that the absence of such
measurement does not make the assailed directive impossible to implement because the roof deck's limited common area is
specifically identified by Section 4(c) of the Master Deed, which reads:
Section. 4. The Limited Common Areas. Certain parts of the common areas are to be set aside and reserved for the exclusive
use of certain units and each unit shall have appurtenant thereto as exclusive easement for the use of such limited areas:
x x x
(c) Exclusive use of the portion of the roof deck (not shaded red in sheet 10 of Annex "B") by the Penthouse unit on the roof
deck.14
x x x
We rule in favor of Cypress. At this stage of the proceedings, the failure to measure the supposed encroached areas is no
longer relevant because the award for actual damages is no longer in issue. Moreover, a perusal of the records shows that
the finding of the Court of Appeals that Goldcrest built an office structure on the roof deck's limited common area is
supported by substantial evidence and established facts, to wit: (1) the ocular inspection reports submitted by HLURB
Inspector Edwin D. Aquino; (2) the fact that the second ocular inspection of the roof deck was intended to measure the
actual area encroached upon by Goldcrest; 15 (3) the fact that Goldcrest had been fined for building a structure on the limited
common area;16 and (4) the fact that Goldcrest neither denied the structure's existence nor its encroachment on the roof
deck's limited common area.
Likewise, there is no merit in Goldcrest's submission that the failure to conduct an actual measurement on the roof deck's
encroached areas makes the assailed directive of the Court of Appeals impossible to implement. As aptly pointed out by
Cypress, the limited common area of the roof deck is specifically identified by Section 4(c) of the Master Deed.
Anent the second issue, Goldcrest essentially contends that since the roof deck's common limited area is for its exclusive
use, building structures thereon and leasing the same to third persons do not impair the subject easement.rl
For its part, Cypress insists the said acts impair the subject easement because the same are already beyond the
contemplation of the easement granted to Goldcrest.
The question of whether a certain act impairs an easement is undeniably one of fact, considering that its resolution requires
us to determine the act's propriety in relation to the character and purpose of the subject easement. 17 In this case, we find
no cogent reason to overturn the similar finding of the HLURB, the Office of the President and the Court of Appeals that
Goldcrest has no right to erect an office structure on the limited common area despite its exclusive right to use the same. We
note that not only did Goldcrest's act impair the easement, it also illegally altered the condominium plan, in violation of
Section 2218 of Presidential Decree No. 957.19
The owner of the dominant estate cannot violate any of the following prescribed restrictions on its rights on the servient
estate, to wit: (1) it can only exercise rights necessary for the use of the easement; 20 (2) it cannot use the easement except
for the benefit of the immovable originally contemplated; 21 (3) it cannot exercise the easement in any other manner than

that previously established;22 (4) it cannot construct anything on it which is not necessary for the use and preservation of the
easement;23 (5) it cannot alter or make the easement more burdensome; 24 (6) it must notify the servient estate owner of its
intention to make necessary works on the servient estate; 25 and (7) it should choose the most convenient time and manner
to build said works so as to cause the least convenience to the owner of the servient estate. 26 Any violation of the above
constitutes impairment of the easement.
Here, a careful scrutiny of Goldcrest's acts shows that it breached a number of the aforementioned restrictions. First, it is
obvious that the construction and the lease of the office structure were neither necessary for the use or preservation of the
roof deck's limited area. Second, the weight of the office structure increased the strain on the condominium's foundation and
on the roof deck's common limited area, making the easement more burdensome and adding unnecessary safety risk to all
the condominium unit owners. Lastly, the construction of the said office structure clearly went beyond the intendment of the
easement since it illegally altered the approved condominium project plan and violated Section 4 27 of the condominium's
Declaration of Restrictions.28
WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision dated September 29, 2005 of the Court of
Appeals in CA G.R. SP. No. 79924 is hereby AFFIRMED. Costs against the petitioner.
SO ORDERED.

G.R. No. L-33213 June 29, 1979

ARTEMIO
C.
REYES
and
HILARION
C.
REYES,
petitioners,
vs.
HON. ANDRES STA. MARIA, Presiding Judge, Court of First Instance of Bulacan, Branch II, HILARIA SANTOS
VDA. DE LOPEZ and PILAR SANTOS, respondents.
E. M. Reyes for petitioner.
Ruben T. Reyes for respondents.
TEEHANKEE, J.:
The Court sets aside the lower court's Order which dismissed petitioners-plaintiffs' complaint filed before it for recovery of
the property in the possession of respondents-defendants and for declaration of ownership thereof as against said
respondents' contrary claim of ownership on the ground of alleged lack of jurisdiction. Such action was clearly an accion
publiciana for the recovery of the right to possess (possesion de jure) (if not an accion reivindicatoria) falling within the lower
court's jurisdiction and not a mere action for detainer to recover physical possession (possession de facto) which would fall
within the jurisdiction of the municipal court (if filed within one year after unlawful deprivation or withholding of possession)
as erroneously held by the lower court in its dismissal order.
Petitioners as plaintiffs in the Court of First Instance of Bulacan had filed on April 1, 1968 an action which they termed as one
to quiet title to a certain residential lot in Barrio San Sebastian, Hagonoy, Bulacan with an area of 368.5 square meters and
to recover the possession thereof from respondents as defendants, 1 wherein they made the following averments:
2. That plaintiffs are owners pro-indiviso of a certain residential lot situated in the Barrio of San Sebastian, Hagonoy,
Bulacan, and more particularly bounded and described as follows:
(Description omitted)
3. That through the tolerance and goodwill of plaintiffs, thru the intervention and entreaty of one Maximo Santos, father of
the defendants, the latter used and occupied said land free of charge, under the following conditions, to wit: (a) that instead
of paying rentals on the premises defendants undertook to pay the corresponding real estate taxes on the land; and (b) that
said defendants will leave and vacate the premises anytime the plaintiffs so demand;
4. That sometime in February, 1968, plaintiffs verbally notified defendants that said plaintiffs were in need of the land,
hence, said defendants should vacate and leave the same, but said defendants unreasonably refused at the same time
claiming ownership of the property, and alleging further that they bought the same from a certain Pablo Aguinaldo;
5. That in order to quiet the title of ownership over this land, the plaintiffs have been compelled to institute the present
action and, as a consequence, she suffered damages in the sum of One Thousand Pesos (P1,000.00), Philippine Currency, as
attorney's fees;
6. That the defendants thru their acts stated above have therefore maliciously and unlawfully detained the land of plaintiffs
since February, 1968; and
7. That for the unlawful occupation of the land, an estimate of Fifty (P50.00) Pesos monthly rental is hereby claimed as
reasonable damages suffered by plaintiffs since February, 1968. 2
Petitioners accordingly prayed in their complaint for judgment (a) "declaring [them] to be the owners of the property
described ... "; (b) "ordering the defendants to vacate the premises and return the possession of the same to plaintiffs;" (c)
"ordering the defendants to pay plaintiffs, jointly and severally, the sum of Fifty Pesos (P50.00), Philippine Currency, rental or
damages every month effective the first day of February, 1968, until the possession of the premises is finally restored in
favor of plaintiffs;" and further ordering defendants to pay them (d) P1,000.00 attorney's fees and (e) costs of suit.
Upon respondents' motion to dismiss the complaint on the ground that "the court has no jurisdiction over the nature of the
action or suit" and that the action embodied in petitioners' complaint "is actually one for ejectment or unlawful detainer.
Consequently, the case falls within the original exclusive jurisdiction of the inferior court or municipal court" as against
petitioners? opposition that "plaintiffs' complaint is principally one to quiet title to property, the question of possession being
merely reduced to an incidental issue," the lower court issued its appealed order of August 15, 1968, finding the motion to
dismiss to be "well founded" and dismissing the case "for lack of jurisdiction".The lower court reasoned that:
A perusal of the actual averments of facts in the complaint do not reveal any allegation of ultimate facts which could
sufficiently support an action to quiet title. Upon the other hand, it is plain that the allegations of facts are only constitutive
of an action for unlawful detainer. The allegation in paragraph 5 of said complaint 'that in order to quiet the title of ownership
over this land, the plaintiffs have been compelled to institute the present action ... is not sufficient by itself to consider this
case as an action for quieting title under Article 476 of the New Civil Code. Neither does the prayer of said complaint asking
that the plaintiffs be declared the owners of the property in question constitute a cause of action.
Hence, the present petition for review and setting aside of the dismissal order, which the Court finds to be meritorious. The
lower court was clearly in error in issuing its dismissal order on its mistaken notion "that the allegations of facts are only
constitutive of an action for unlawful detainer" since the complaint shows on its face that respondents' refusal to deliver the
possession of the property was due to their adverse claim of ownership of the same property and their counter-allegation
that they had bought the same from a certain Pablo Aguinaldo, and, therefore, petitioners' action was clearly one for
recovery of their right to possess the property (possession de jure) as well as to be declared the owners thereof as against
the contrary claim of respondents.
As restated by the late Chief Justice Moran: "There are three kinds of actions for the recovery of possession of real pro.
property, namely, (1) the summary action for forcible entry or detainer (denominated accion interdictal under the former law
of procedure, Ley de Enjuiciamiento Civil) which seeks the recovery of physical possession only and is brought within one
year in the justice of the peace court; (2) the accion publiciana which is for the recovery of the right to possess and is a
plenary action in an ordinary civil proceeding in a Court of First Instance; and (3) accion de reivindicacion which seeks the
recovery of ownership (which of course includes the jus utendi and the jus fruendi also brought in the Court of First Instance.
3

It has been said that "(T)he only issue in forcible entry and detainer cases is the physical possession of real property
possession de facto and not possession de jure If plaintiff can prove a prior possession in himself, he may recover such
possession even from the owner himself. Whatever may be the character of his prior possession, if he has in his favor priority
of time, he has the security that entitles him to stay on the property until he is lawfully ejected by a person having a better
right by either accion publiciana or accion reivindicatoria. 4 Petitioners' action was not merely for recovery of possession de

facto. Their action was clearly one of accion publiciana for recovery of possession de jure if not one of accion reivindicatoria
for declaration of their ownership of the land.
As reaffirmed by the Court in the analogous case of Aguilon vs. Bohol 5 petitioners action is at least "an accion publiciana,
which action 'correspondent al que tiene derecho a la possession, contra el que posee sin derecho o' con titulo menos firme
para que se ponga la cosa en poder del actor con todas las accesiones, frutos ets' (I Enciclopedia Juridica Espanola 450),"
and such accion publiciana or the plenary action in an ordinary civil proceeding to determine the better and legal right to
possess (independently of title) clearly falls within the jurisdiction of the Courts of First Instance and not of the Municipal
Courts. The Court further underscored therein "that an action for recovery of possession is an urgent matter which must be
decided promptly to forestall breaches of peace, violence or even loss of life and, therefore, the court should act swiftly and
expeditiously in cases of that nature.
Petitioners, therefore, correctly filed their accion publiciana before the lower court as against respondents! claim that they
should instead have filed a summary action for detainer in the municipal court. Having been fully apprised of respondents'
refusal to surrender possession and their contrary claim of ownership of the same property, petitioners properly filed their
accion publiciana with the Court of First Instance to avoid getting enmeshed in what would certainly have been another
jurisdictional dispute, since they could reasonably foresee that if indeed they had filed a summary action for illegal detainer
instead in the municipal court, respondents would then have contended, contrary to their present claim, that the municipal
court is without jurisdiction over the detainer case by virtue of their contrary claim of ownership of the property. 6
ACCORDINGLY, judgment is hereby rendered, setting aside the lower court's dismissal order of August 15, 1968 and the case
is remanded to respondent Court of First Instance with instructions to expedite the proceedings and trial and determination
thereof on the merits. With costs against respondents. This decision is immediately executory.
Makasiar, Fernandez, Guerrero, De Castro and Melencio-Herrera, JJ., concur.