G.R. No. 128102 March 7, 2000 together with a notice to vacate.

On 11 April 1994, the sheriff

padlocked their houses, but later in the day, private respondents re-
entered their houses. Thus, on 6 May 1994, AZNAR filed an omnibus
AZNAR BROTHERS REALTY COMPANY, petitioner,
motion for the issuance of a writ of demolition, which private
vs.
respondents opposed. This motion was set for hearing three times, but
COURT OF APPEALS, LUIS AYING, DEMETRIO SIDA, FELOMINO
the parties opted to submit a consolidated memorandum and agreed to
AUGUSTO, FEDERICO ABING, and ROMEO
submit the same for resolution.3
AUGUSTO, respondents.

On 22 July 1994, the RTC affirmed the decision of the MTCC and
DAVIDE, JR., C.J.:
ordered the issuance of a writ of demolition directing the sheriff to
demolish private respondents' houses and other improvements which
This is a petition for review on certiorari under Rule 45 of the Revised might be found on the subject premises. 4
Rules of Court seeking to reverse and set aside the 26 March 1996
Decision1 of the Court of Appeals declaring the private respondents the
On 29 July 1994, a writ of demolition was issued, and notices of
rightful possessors de facto of the subject lot and permanently
demolition were served upon private respondents. Per Sheriff's
enjoining Sheriff Juan Gato or his representative from effecting the
Report,5 private respondents' houses were demolished on 3 August
demolition of private respondents' houses.
1994, except for two houses which were moved outside the premises
in question upon the plea of the owners thereof.
Culled from the evidence proffered by petitioner Aznar Brothers Realty
Co. (hereafter AZNAR), it appears that Lot No. 4399 containing an
On appeal by the private respondents, the Court of Appeals reversed
area of 34,325 square meters located at Brgy. Mactan, Lapu-Lapu
and set aside the decision of the RTC; declared the private
City, was acquired by AZNAR from the heirs of Crisanta Maloloy-on by
respondents as the rightful possessors de facto of the land in question;
virtue of an Extrajudicial Partition of Real Estate with Deed of Absolute
and permanently enjoined Sheriff Juan Gato or whoever was acting in
Sale dated 3 March 1964. This deed was registered with the Register
his stead from effectuating the demolition of the houses of the private
of Deeds of Lapu-Lapu City on 6 March 1964 as shown on the face
respondents.
thereof. After the sale, petitioner AZNAR declared this property under
its name for taxation purposes and regularly paid the taxes thereon.
Herein private respondents were allegedly allowed to occupy portions In arriving at its challenged decision, the Court of Appeals noted that at
of Lot No. 4399 by mere tolerance provided that they leave the land in the time AZNAR entered the property, the private respondents had
the event that the company would use the property for its purposes. already been in possession thereof peacefully, continuously, adversely
Later, AZNAR entered into a joint venture with Sta. Lucia Realty and notoriously since time immemorial. There was no evidence that
Development Corporation for the development of the subject lot into a petitioner was ever in possession of the property. Its claim of
multi-million peso housing subdivision and beach resort. When its ownership was based only on an Extrajudicial Partition with Deed of
demands for the private respondents to vacate the land failed, AZNAR Absolute Sale, which private respondents, however, claimed to be null
filed with the Municipal Trial Court (MTCC) of Lapu-Lapu City a case and void for being simulated and fraudulently obtained. The Court of
for unlawful detainer and damages, which was docketed as Civil Case Appeals further held that where not all the known heirs had
No. R-1027. participated in the extrajudicial agreement of partition, the instrument
would be null and void and therefore could not be
registered.6 Moreover, AZNAR was estopped to assert ownership of
On the other hand, the private respondents alleged that they are the
the property in question, since it had admitted in a pleading in the
successors and descendants of the eight children of the late Crisanta
reconstitution proceedings that the property had never been conveyed
Maloloy-on, whose names appear as the registered owners in the
by the decreed owners. Additionally, from 1988 up to the filing of the
Original Certificate of Title No. RC-2856. They had been residing and
ejectment case on 4 August 1993, AZNAR never registered the
occupying the subject portion of the land in the concept of owner since
extrajudicial partition despite opportunities to do so. Its allegation that
the time of their parents and grandparents, except for Teodorica
private respondents occupied the property by mere tolerance was not
Andales who was not a resident in said premises. Private respondents
proved. Pursuant to the ruling in Vda. de Legazpi v. Avendano, 7 the
claimed that the Extrajudicial Partition of Real Estate with Deed of
fact that the right of the private respondents was so seriously placed in
Absolute Sale is void ab initio for being simulated and fraudulent, and
issue and the execution of the decision in the ejectment case would
they came to know of the fraud only when AZNAR entered into the
have meant demolition of private respondents' houses constituted an
land in the last quarter of 1991 and destroyed its vegetation. They then
equitable reason to suspend the enforcement of the writ of execution
filed with the Regional Trial Court (RTC) of Lapu-Lapu City a complaint
and order of demolition.
seeking to declare the subject document null and void. This case was
docketed as Civil Case No. 2930-L.
AZNAR then elevated the case to this Court, via this petition for review
on certiorari, contending that respondent Court of Appeals erred in
On 1 February 1994, the MTCC rendered a decision ordering the
private respondents to (a) vacate the land in question upon the finality
of the judgment; and (b) pay P8,000 as attorney's fees and P2,000 as 1. . . . reversing the judgments of the Municipal Trial Court
litigation expenses, plus costs.2 and the Regional Trial Court of Lapu-Lapu City despite the
finality of the judgments and the full implementation thereof;
The MTCC delved into the issue of ownership in order to resolve the
issue of possession. It found that petitioner AZNAR acquired 2. . . . invoking lack of prior physical possession over the
ownership of Lot No. 4399 by virtue of the Extrajudicial Partition of land in question by the petitioner as one ground in its
Real Estate with Deed of Absolute Sale executed by the Heirs of Decision sought to be reviewed;
Crisanta Maloloy-on on 3 March 1964, which was registered with the
Register of Deeds of Lapu-Lapu City on 6 March 1964 as appearing on
3. . . . holding that the Extrajudicial Partition with Deed of
the face thereof. Private respondents' allegation that two of the
Absolute Sale was null and void;
signatories were not heirs of the registered owners; that some of the
signatories were already dead at the date of the execution of the deed;
and that many heirs were not parties to the extrajudicial partition is a 4. . . . holding that petitioner was in estoppel in pais when it
form of a negative pregnant, which had the effect of admitting that the made the allegation that the property was not sold or
vendors, except those mentioned in the specific denial, were heirs and encumbered in its petition for reconstitution of title;
had the legal right to sell the subject land to petitioner. The fact that
some or most heirs had not signed the deed did not make the
document null and void ab initio but only annullable, unless the action 5. . . . applying the ruling in the case of Vda. de Legazpi vs.
Avendano (79 SCRA 135 [1977]).
had already prescribed. Since the private respondents occupied the
land merely by tolerance, they could be judicially ejected therefrom.
That the Deed has not been annotated on OCT RO-2856 is of no We shall jointly discuss the first and fifth assigned errors for being
moment, since said title was reconstituted only on 25 August 1988, interrelated with each other.
while the subject Deed was executed on 3 March 1964. Lastly, the
reconstituted title has not as yet been transferred to a purchaser for
value. In its first assigned error, petitioner argues that the decision of the
MTCC of Lapu-Lapu City had become final and immediately executory
in view of the undisputed failure of the private respondents to post a
Aggrieved by the decision of the MTCC, private respondents appealed supersedeas bond as required by Section 8, Rule 70 of the Revised
to the RTC. Rules of Court.

During the pendency of the appeal, or on 8 March 1994, the RTC,
upon Aznar's ex parte motion, issued an order granting the issuance of
a writ of execution pursuant to Section 8, Rule 70 of the Revised Rules
of Court in view of the failure of private respondents to put up a
supersedeas bond. A week later, a writ of execution was issued. The
sheriff then served upon private respondents the said writ of execution
We do not agree. Since the private respondents had seasonably filed
an appeal with the RTC of Lapu-Lapu City, the judgment of the MTCC
of Lapu-Lapu City did not become final. And for reasons hereunder
stated, the perfection of the appeal was enough to stay the execution
of the MTCC decision.
Under the former Section 8, Rule 70 of the Rules of Court, 8 if the
judgment of the municipal trial court in an ejectment case is adverse to
the defendant, execution shall issue immediately. To stay the
immediate execution of the judgment, the defendant must (1) perfect
his appeal; (2) file a supersedeas bond to answer for the rents,
damages, and costs accruing down to the time of the judgment
appealed from; and (3) periodically deposit the rentals falling due
during the pendency of the appeal. 9
As a rule, the filing of a supersedeas bond is mandatory and if not filed,
the plaintiff is entitled as a matter of right to the immediate execution of
the judgment. An exception is where the trial court did not make any
findings with respect to any amount in arrears, damages or costs
against the defendant, 10 in which case no bond is necessary to stay
the execution of the judgment. Thus, in Once v. Gonzales, 11 this Court
ruled that the order of execution premised on the failure to file a
supersedeas bond was groundless and void because no such bond
was necessary there being no back rentals adjudged in the appealed
judgment.
Similarly, in the instant case, there was no need for the private
respondents to file a supersedeas bond because the judgment of the
MTCC did not award rentals in arrears or damages. The attorney's
fees of P8,000 and the litigation expenses of P2,000 awarded in favor
of the petitioner need not be covered by a bond, as these are not the
damages contemplated in Section 8 of Rule 70 of the Rules of Court.
The damages referred to therein are the reasonable compensation for
the use and occupation of the property which are generally measured
by its fair rental value and cannot refer to other damages which are
foreign to the enjoyment or material possession of the
property. 12 Neither were the private respondents obliged to deposit the
rentals falling due during the pendency of the appeal in order to secure
a stay of execution because the appealed judgment did not fix the
reasonable rental or compensation for the use of the
premises. 13 Hence, it was error for the RTC to order the execution of
the judgment of the MTCC.
At any rate, pursuant to Section 21 of the Revised Rules of Summary
Procedure, the decision of the RTC affirming the decision of the MTCC
has become immediately executory, without prejudice to the appeal
before the Court of Appeals. The said Section repealed Section 10 of
the Rules of Court allowing during the pendency of the appeal with the
Court of Appeals a stay of execution of the RTC judgment with respect
to the restoration of possession where the defendant makes a periodic
deposit of rentals. Thus, immediate execution of the judgment
becomes a ministerial duty of the court. No new writ of execution was,
however, issued. Nevertheless, the writ of demolition thereafter issued
was sufficient to constitute a writ of execution, as it substantially
complied with the form and contents of a writ of execution as provided
for under Section 8 of Rule 39 of the Rules of Court. Moreover, private
respondents were duly notified and heard on the omnibus motion for
the issuance of the writ of demolition and were given five days to
remove their houses. 14
Invoking Legaspi v. Avendao, 15 the Court of Appeals held that there
was an equitable reason to suspend the enforcement of the writ of
execution and order of demolition until after the final determination of
the civil case for the nullification of the Extrajudicial Partition with Deed
of Absolute Sale.
In Legaspi, this Court held:
Where the action . . . is one of illegal detainer . . . and the
right of the plaintiff to recover the premises is seriously
placed in issue in a proper judicial proceeding, it is more
equitable and just and less productive of confusion and
disturbance of physical possession, with all its concomitant
inconvenience and expense [f]or the court in which the issue
of legal possession, whether involving ownership or not, is
brought to restrain, should a petition for preliminary
injunction be filed with it, the effects of any order or decision
in the unlawful detainer case in order to await the final
judgment in the more substantive case involving legal
possession or ownership.
In the instant case, private respondents' petition for review with prayer
for the immediate issuance of a temporary restraining order (TRO) or
preliminary injunction was mailed on 2 August 1994 but was received
by the Court of Appeals only on 30 August 1994. Meanwhile, on 3
August 1994, the writ of demolition was implemented, resulting in the
demolition of private respondents' houses. Hence, any relevant issue
arising from the issuance or enforcement of the writ had been rendered
moot and academic. Injunction would not lie anymore, as the acts
sought to have been enjoined had already become a fait accompli or
an accomplished or consummated act.
Now on the applicability to unlawful detainer cases of the requirement
of prior physical possession of the disputed property. Contrary to the
ruling of the Court of Appeals, prior physical possession by the plaintiff
of the subject property is not an indispensable requirement in unlawful
detainer cases, although it is indispensable in an action for forcible
entry. 16 The lack of prior physical possession on the part of AZNAR is
therefore of no moment, as its cause of action in the unlawful detainer
case is precisely to terminate private respondents' possession of the
property in question. 17
We now come to the issue of the validity of the Extrajudicial Partition
with Deed of Absolute Sale.
In an action for ejectment, the only issue involved is possession de
facto. However, when the issue of possession cannot be decided
without resolving the issue of ownership, the court may receive
evidence upon the question of title to the property but solely for the
purpose of determining the issue of possession. 18
In the instant case, private respondents have set up the defense of
ownership and questioned the title of AZNAR to the subject lot,
alleging that the Extrajudicial Partition with Deed of Absolute Sale upon
which petitioner bases its title is null and void for being simulated and
fraudulently made.
First, private respondents claim that not all the known heirs of Crisanta
Maloloy-on participated in the extrajudicial partition, and that two
persons who participated and were made parties thereto were not
heirs of Crisanta. This claim, even if true, would not warrant rescission
of the deed. Under Article 1104 of the Civil Code, "[a] partition made
with preterition of any of the compulsory heirs shall not be rescinded,
unless it be proved that there was bad faith or fraud on the part of the
persons interested; but the latter shall be proportionately obliged to pay
to the person omitted the share which belongs to him." In the present
case, no evidence of bad faith or fraud is extant from the records. As to
the two parties to the deed who were allegedly not heirs, Article 1105
is in point; it provides: "A partition which includes a person believed to
be an heir, but who is not, shall be void only with respect to such
person." In other words, the participation of non-heirs does not render
the partition void in its entirety but only to the extent corresponding to
them.
Private respondents also allege that some of the persons who were
made parties to the deed were already dead, while others were still
minors. Moreover, the names of some parties thereto were misspelled,
and others who knew how to read and write their names were made to
appear to have affixed only their thumbmark in the questioned
document. Likewise, the signatures of those who were made parties
were forged.
The foregoing are bare allegations with no leg to stand on. No birth or
death certificates were presented before the MTCC to support the
allegations that some of the parties to the deed were minors and
others were already dead at the time of the execution of the deed.
What private respondents adduced as evidence was merely a family
tree, which was at most self-serving. It was only when the case was on
appeal with the RTC that the private respondents presented as Annex
"B" of their Memorandum and Appeal Brief a photocopy of the
certificate of death of Francisco Aying, 19 son of Crisanta Maloloy-on,
who reportedly died on 7 March 1963. This certificate was allegedly
issued on 17 January 1992 by the Parish Priest of Virgen de Regla
Parish, Lapu-Lapu City. The fact remains, however, that this photocopy
was not certified to be a true copy.
It is worthy to note that the Extrajudicial Partition with Deed of Absolute
Sale is a notarized document.1wphi1 As such, it has in its favor the
presumption of regularity, and it carries the evidentiary weight
conferred upon it with respect to its due execution. 20 It is admissible in
evidence without further proof of authenticity 21 and is entitled to full
faith and credit upon its face. 22 He who denies its due execution has
the burden of proving that contrary to the recital in the
Acknowledgment he never appeared before the notary public and
acknowledged the deed to be his voluntary act. 23It must also be
stressed that whoever alleges forgery has the burden of proving the
same. Forgery cannot be presumed but should be proved by clear and
convincing evidence. 24 Private respondents failed to discharge this
burden of proof; hence, the presumption in favor of the questioned
deed stands.
Private respondents contend that there was violation of the Notarial
Law because the lawyer who prepared and notarized the document
was AZNAR's representative in the execution of the said document.
Under Section 22 of the Spanish Notarial Law of 1889, a notary public
could not authenticate a contract which contained provisions in his
favor or to which any of the parties interested is a relative of his within
the fourth civil degree or second degree of affinity; otherwise, pursuant
to Section 28 thereof, the document would not have any effect. This
rule on notarial disqualification no longer holds true with the enactment
of Act No. 496, which repealed the Spanish Notarial Law. 25Under the
Notarial Law in force at the time of the notarization of the questioned
deed, Chapter 11 of the Revised Administrative Code, only those who
had been convicted of any crime involving moral turpitude were
disqualified to notarize documents. Thus, a representative of a person
in whose favor a contract was executed was not necessarily so
disqualified. Besides, there is no proof that Atty. Ramon Igaa was a
representative of petitioner in 1964; what appears on record is that he
was the Chief of the petitioner's Legal Department in 1993.
Additionally, this alleged violation of the Notarial Law was raised only
now.

Anent the non-annotation of the Extrajudicial Partition with Deed of

Absolute Sale in the reconstituted Original Certificate of Title No. RO-
2856, the same does not render the deed legally defective. It must be
borne in mind that the act of registering a document is never necessary
to give the conveyance legal effect as between the parties 26and the
vendor's heirs. As between the parties to a sale, registration is not
indispensable to make it valid and effective. The peculiar force of a title
is exhibited only when the purchaser has sold to innocent third parties
the land described in the conveyance. The purpose of registration is
merely to notify and protect the interests of strangers to a given
transaction, who may be ignorant thereof, and the non-registration of
the deed evidencing said transaction does not relieve the parties
thereto of their obligations thereunder. 27 Here, no right of innocent third
persons or subsequent transferees of the subject lot is involved; thus,
the conveyance executed in favor of AZNAR by private respondents
and their predecessors is valid and binding upon them, and is equally
binding and effective against their heirs. 28

The principle that registration is the operative act that gives validity to
the transfer or creates a lien upon the land "refers to cases involving
conflicting rights over registered property and those of innocent
transferees who relied on the clean title of the properties." 29 This
principle has no bearing on the present case, as no subsequent
transfer of the subject lot to other persons has been made either by
private respondents or their predecessors-in-interest. 30

By and large, it appears on the face of the Extrajudicial Partition with

Deed of Absolute Sale that the same was registered on 6 March 1964.
The registration was under Act No. 3344 on unregistered lands
allegedly because at the time, no title was existing in the files of the
Register of Deeds of Lapu-Lapu City, as it was allegedly lost during the
last world war. It was only on 8 August 1988 that the title was
reconstituted at the instance of the petitioner.

As to the fourth assigned error, we do not agree with the Court of

Appeals and the private respondents that petitioner is in estoppel to
assert ownership over the subject property because of petitioner's own
allegation in the petition for reconstitution, to wit:

That certificates of title were issued thereto but were lost

during the last world war. That the same were not conveyed
much less offered as a collateral for any debt contracted or
delivered for the security of payment of any obligation in
favor of any person or lending institution.

The words "the same" in the second sentence of the afore-quoted

paragraph clearly refers to the certificates of title. This means that the
certificates of title, not necessarily the subject lot, were not conveyed
or offered as a collateral but were lost during the last world war.
Indeed, as petitioner contends, it would be very absurd and self-
defeating construction if we were to interpret the above-quoted
allegation in the manner that the Court of Appeals and the private
respondents did, for how could petitioner, who is claiming ownership
over the subject property, logically allege that the property was not sold
to it?

It bears repeating that petitioner's claim of possession over the subject

lot is anchored on its claim of ownership on the basis of the
Extrajudicial Partition with Deed of Absolute Sale. Our ruling on the
issue of the validity of the questioned deed is solely for the purpose of
resolving the issue of possession and is to be regarded merely as
provisional, without prejudice, however, to the final determination of the
issue in the other case for the annulment or cancellation of the
Extrajudicial Partition with Deed of Absolute Sale.

WHEREFORE, the petition is GRANTED. The challenged decision of

public respondent Court of Appeals in CA-G.R. SP No. 35060 is
hereby REVERSED, and the decision of the Regional Trial Court,
Branch 27, Lapu-Lapu City, is REINSTATED.

No pronouncement as to costs.1wphi1.nt

SO ORDERED.
G.R. No. L-17951 February 28, 1963
CONRADO C. FULE and LOURDES F. ARAGON, petitioners,
vs.
EMILIA E. DE LEGARE and COURT OF APPEALS, respondents.
REGALA, J.:
This is a petition for certiorari to review the decision of the Court of
Appeals, promulgated on November 16, 1960, in Civil Case No.
15728-R, entitled" Emilia E. Legare, plaintiff-appellant, versus Conrado
C. Fule and Lourdes F. Aragon, defendants-appellants..
The facts of this case as found by the Court of Appeals in its decision
are as follows:
This is an action for annulment of certain deeds of sale and
conveyance covering a parcel of land, together with the
improvements existing thereon, situated in the municipality
of San Juan, province of Rizal, and for damages.
It appears in evidence that the plaintiff, Emilia E. de Legare,
was the owner of a parcel of land, together with a residential
house erected thereon, situated at No. 146 Sta. Mesa
Boulevard Extension, San Juan, Rizal, her ownership being
evidenced by Transfer Certificate of Title No. 21253, issued
by the Office of the Register of Deeds of the province of
Rizal. She was living in that house together with defendant
John W. Legare, her adopted son, and a maid named Purita
Tarrosa. On September 26, 1951, the plaintiff, thru a public
deed, constituted on the above mentioned house and lot a
first class mortgage in favor of defendant Tomas Q. Soriano
to guarantee the payment of a loan in the amount of
P8,000.00. This deed of mortgage was on the same date
recorded in the Office of the Register of Deeds of the
province of Rizal and annotated in the memorandum of
encumbrances of transfer certificate of title No. 21253. On
account of certain partial payments made by the plaintiff and
the contracting by the latter of additional loans in small
amounts from Tomas Q. Soriano the debt guaranteed by the
above mentioned mortgage was reduced to the sum of
P7,000.00 as of February 23, 1953. These transactions,
however, were not annotated on the memorandum of
encumbrances of the above mentioned certificate of title.
At about 9:00 o'clock in the evening of March 29, 1953, while
the plaintiff, John W. Legare, and Purita Tarrosa were
seated in the drawing room of the house above referred to,
an unknown man intruded into the room, approached the
plaintiff, covered her mouth, and, pressing a knife on her
side, demanded that she give him P10,000.00 if she did not
like to be killed. The plaintiff replied that she did not have
that amount. Thereupon, the intruder told the plaintiff to raise
the necessary amount as he would come back the following
morning and once more threatened to kill her if she would
fail to do so. After having made that threat, the intruder left
the house. John W. Legare did not call for help nor made
any attempt to defend his mother, and when Purita Tarrosa
stood up to go down the house to call for a policeman, he
held the latter by the hand and slapped her on the face when
she persisted in going down, telling her that the man had
companions waiting downstairs.
After the intruder was gone John W. Legare approached the
plaintiff, and exhibiting to her a paper told her to sign it as
with the same he could secure from the U.S. Veterans
Administration the amount which they needed to deliver to
that intruder. The plaintiff, who did not know how to read nor
write, although she could sign her name, asked John W.
Legare what that paper was. The latter answered that it was
an application for payment of compensation. As plaintiff had
confidence in John W. Legare and prior to that occasion she
had received from the U.S. Veterans Administration a letter
concerning some compensation she was to receive, she
signed that paper. After the paper was signed by the plaintiff,
John W. Legare had Purita Tarrosa sign it as a witness,
without however, allowing the latter to read it.
After that paper was thus signed, John W. Legare told the
plaintiff and Purita Tarrosa to pack up their things as they
were leaving the house to hide in a hotel, adding that the
men who came earlier that evening were Huks. Early the
next morning John W. Legare took the plaintiff and Purita
Tarrosa to the Windsor Hotel in the City of Manila, and after
conducting them to a room in the hotel, told them not to
leave the room or peep out of the window as they might be
seen by the men who came to their house in the previous
evening. This advise given, John W. Legare left the hotel.
The plaintiff and Purita Tarrosa stayed in that hotel for about
a month and a half. John W. Legare occasionally visited
them there. In one of said occasional visits the plaintiff told
John that she wanted to go home. The latter told her that it
was not yet safe for her to go home. On May 7, 1953,
however, John W. Legare came to the hotel, gave the
plaintiff a five-peso bill, and told her that she could use the
amount for transportation expenses if she wanted to leave
the hotel. On the following morning the plaintiff and Purita
Tarrosa left the hotel and went direct to her house at Sta.
Mesa Boulevard Extension. When they arrived at the house,
however, they found that it was occupied by strangers, and
that all her furniture and personal belongings had
disappeared. Inquiring from those strangers how they
happened to occupy the house, the latter told her that John
W. Legare had sold the house to them and that it was no
longer hers. The plaintiff thereupon sought the help of her
attorney. It was then discovered that the paper which John
W. Legare had the plaintiff and Purita Tarrosa sign in the
evening of March 29, 1953 was a deed of sale of the lot and
house in question in favor of John W. Legare for the sum of
P12,000.00, and that it was supposed to have been
executed on the 7th day of April, 1953, and acknowledged
before a notary public on that date. Exhibit X.
It further appears that sometime prior to May 9, 1953, John
W. Legare approached Elias B. Fermin, the real estate
broker who intervened in the securing of the loan contracted
by the plaintiff from Tomas Q. Soriano, and sought said
broker's help to sell the lot and house in question. Elias B.
Fermin accepted the commission and offered the property in
sale to defendants spouses Conrado C. Fule and Lourdes F.
Aragon. Conrado C. Fule read the title papers in the hand of
John W. Legare and inspected the premises, and satisfied
with the result of his inspection, he agreed to purchase the
property for P12,000.00 on condition that the sum of P7,000,
the unpaid balance of plaintiff's indebtedness to Tomas Q.
Soriano secured by a mortgage thereon, would be deducted
from the price, and that he would assume said mortgage.
The terms offered by Conrado C. Fule being acceptable to
John W. Legare and Tomas Soriano, the parties proceeded
to formalize the contract. Accordingly, on May 9, 1953,
defendant Tomas Q. Soriano executed a deed of absolute
sale thereof, free of all liens and encumbrances, in favor of
defendant spouses Conrado C. Fule and Lourdes F. Aragon,
Exhibit X-2, and said spouses in turn executed in favor of
Tomas Q. Soriano a deed of mortgage covering the property
for the sum of P7,000.00. Exhibit X-3. These three deeds,
together with transfer certificate of Title No. 21253, issued in
the name of the plaintiff, were on that same date presented
for registration in the Office of the Register of Deeds of the
province of Rizal.
The latter, following the usual procedure, recorded, first, the
deed of sale executed by the plaintiff in favor of defendant
John W. Legare (Exhibit 1) and issued in the name of the
latter transfer certificate of title No. 30126 which cancelled
transfer certificate of title No. 21253 (Exhibit Y), then the
deed of sale executed by John W. Legare in favor of the
spouses Conrado C. Fule and Lourdes F. Aragon (Exhibit X-
2) and issued in favor of the latter transfer certificate of title
No. 30127 (Exhibit Y-1), which cancelled transfer certificate
of title No. 30126, and then annotated on the memorandum
of encumbrances of transfer certificate of title No. 30127 the
deed of mortgage (Exhibit X-1) executed in favor of Tomas
Q. Soriano by said spouses. Once these were
accomplished, Elias B. Fermin and John W. Legare went
back to the house of the spouses Conrado C. Fule and
Lourdes P. Aragon and gave the transfer certificate of title
No. 30127. Thereupon said spouses delivered to John W.
Legare the balance of the purchase price of the property
after deducting therefrom the amount of the mortgage
constituted thereon in favor of Tomas Q. Soriano, the
brokerage fees and the expenses incident to the execution
and registration of said deeds and issuance of new
certificates of title, which amounted to a little P4,000.00.
Upon the evidence, the trial court rendered judgment, the
dispositive part of which reads as follows:
IN VIEW OF ALL THE FOREGOING, this Court hereby
orders:
1) the cancellation of Certificates of Title Nos. 30127 and
10126, thereby leaving valid TCT No. 21253 in the name of
Emilia E. de Legare together with the encumbrance thereon
in favor of Tomas Q. Soriano;
2) the delivery of the possession of the premises to the
plaintiff and the monthly rental of P150.00 a month from May
 9, 1953, up to and including the date on which the delivery is
to be made, this obligation being understood to be joint and
several insofar as the defendants Fule and Aragon are
concerned;
3) the award of P5,000.00 as moral damages in favor of the
plaintiff and enforceable against John W. Legare for the
fraud perpetrated by the latter on the former;
4) the award of P1,000.00 as attorney's is fees enforceable
against the defendants Fule and Aragon;
And on the cross-claim, the court orders
1) John W. Legare to refund to the spouses Fule and Aragon
the amount paid by the latter on account of the sale
contained in Exhibit X-2 plus interest thereon at the legal
rate from the date of the cross-claim;
2) the award of P5,000.00 as moral damages in favor of the
spouses Fule and Aragon and enforceable against John W.
Legare for the misrepresentation made by him;.
3) the reimbursement to the spouses Fule and Aragon by
John W. Legare of all amounts which may be paid by the
former to the plaintiff by way of rentals for the premises
involved herein, as well as attorney's fees in the amount of
P1,000.00.
SO ORDERED.
The Court of Appeals, in deciding the appeal, entered a judgment the
dispositive portion of which follows:.
WHEREFORE, modified as indicated above, i.e., the transfer
certificate of title No. 21253 issued in the name of Emilia E.
de Legare is revived with the mortgage in favor of appellee
Tomas Q. Soriano annotated on its memorandum of
encumbrances but reduced to the amount of P7,000.00, and
that the award of attorney's fees in the amount of P1,000.00
to be paid by the spouses Conrado C. Fule and Lourdes F.
Aragon, in favor of the plaintiff, is eliminated therefrom, the
judgment appealed from is hereby affirmed in all other
respects, without special pronouncement as to costs in this
instance.
IT IS SO ORDERED.
In elevating the judgment of the Court of Appeals to this Tribunal for
review, herein petitioners discussed 6 assignments of error. However,
this Court is of the view that, in effect and substance, only one issue
was raised.We have always refrained from reviewing factual findings of
the Court of Appeals and the first two errors assigned were but
attempts at disputing the same. The other four were simply detailed
aspects of the one, sole issue, to wit:
Were the herein petitioners purchasers in good faith and for
value of the properties here contested?
Guided by the facts found by the Court of Appeals, We hold the herein
petitioners innocent purchasers for value of the house and lot here
disputed. In consequence, they are here adjudged the lawful owners
thereof.
A purchaser in good faith is one who buys property of another, without
notice that some other persons has a right to, or interest in, such
property and pays a full and fair price for the same, at the time of such
purchase, or before he has notice of the claim or interest of some other
persons in the property. Good faith consists in an honest intention to
abstain from taking any unconscientious advantage of another (Cui
and Joven v. Henson, 51 Phil. 606). We have measured the conduct of
the petitioner spouses by this yardstick.
These facts were uncontroverted. The negotiation and transaction
which eventually caused the certificate of title to be transferred from
the herein respondent to the petitioner spouses were conducted by a
real estate broker licensed since 1938. Nothing in John W. Legare's
person or behaviour suggested anything suspicious. He was the
adopted son of the herein respondent, and, to the time that he was
contracting with the petitioner spouses, he had not been known to
commit crime or dishonesty. On the contrary, John has had previous
dealings with the real estate broker during which he exhibited the
expected degree of trustworthiness.
It should be noted that the deed of sale was regular upon its face, and
no one would have questioned its authenticity since it was duly
acknowledged before a notary public. Moreover, even if the petitioners
had the opportunity to compare the signature of the respondent on the
deed of conveyance with a specimen of her genuine signature, the
effort, nonetheless, would have been in vain since the respondent's
signature on the document was admittedly hers. Lastly, it should not be
overlooked that the respondent, during the whole period of the
negotiation, was nowhere available to confirm or deny the execution of
the deed. She was then in hiding, or, hidden, at the Windsor Hotel in
Manila.
The diligence and precaution observed by the petitioners themselves
could hardly have been wanting. The records show that they did not
rely solely and fully upon the deed of sale in favor of John W. Legare
and the fact that John had then in his possession the corresponding
certificate of title of the registered owner. They demanded more. They
insisted that the sale in favor of John W. Legare be first registered and
that the transfer in their favor be thereafter likewise registered. It was
only after all these were complied with that they paid the purchase
price. In other words, the petitioner spouses relied not really on the
documents exhibited to them by John W. Legare, but, on the
registerability of those documents. This in Our view, satisfies the
measure of good faith contemplated by law.
It is true that at the time the herein petitioners purchased the properties
from John W. Legare, he was not yet the registered owner of the
same. This fact alone, however, could not have caused the herein
petitioners to lose their status as innocent purchasers for value. It
should be recalled that although the title was in the name of the
respondent Emilia E. de Legare, the certificate of title was in the
possession of her adopted son, John. Under Section 55 of Act 496, as
amended, John's possession of the certificate and his subsequent
production of it to the herein petitioners operated as a "conclusive
authority from the registered owner to the register of deeds to enter a
new certificate."
SEC. 55. xxx xxx xxx
The production of the owner's duplicate certificate whenever
any voluntary instrument is presented for registration
shall be conclusive authority from the registered owner to the
register of deeds to enter a new certificate or to make a
memorandum or registration in accordance with such
instrument, and the new certificate or memorandum shall be
binding upon the registered owner and upon all persons
claiming under him, in favor of every purchaser for value and
in good faith. ....
While it was true that the transfer in favor of John was still unregistered
when he sought to sell the property to the herein petitioners, it was not
true that the latter observed no precaution whatsoever from the
complication of such non-registration. As already discussed above, the
petitioners required that the registration of the previous sale (from the
respondent to John W. Legare) be first attended to and completed.
After that was done and the certificate of title thereof was issued to
John by the Register of Deeds, they still withheld payment till the
second sale (from John to the petitioners) has in turn registered and
the corresponding certificate of title therefor was issued in their names.
It was only after all these were followed that the entire negotiation was
terminated with the payment of the balance of the purchase price. All
these, We hold, were adequate safeguards against the objection
interposed. A contrary conclusion would operate to weaken the
reliance of the general public on the indefeasibility of titles registered
under the Torrens System.
We have so far demonstrated the good faith of the petitioner spouses.
By the very facts established by the Court of Appeals, however, there
is still another reason why the property herein in question should be
adjudged to the petitioners.
Although the deed of sale in favor of John W. Legare was fraudulent,
the fact remains that he was able to secure a registered title to the
house and lot. It was this title which he subsequently conveyed to the
herein petitioners. We have indeed ruled that a forged or fraudulent
deed is a nullity and conveys no title (Director of Lands v. Addison, 49
Phil. 19). However, We have also laid down the doctrine that there are
instances when such a fraudulent document may become the root of
valid title. One such instance is where the certificate of title was
already transferred from the name of the true owner to the forger, and
while it remained that way, the land was subsequently sold to an
innocent purchaser. For then, the vendee had the right to rely upon
what appeared in the certificate (Inquimboy vs. Cruz, G.R. No. L-
13953, July 28, 1960).
Wherefore, the parties respectfully pray that the foregoing stipulation of
facts be admitted and approved by this Honorable Court, without
prejudice to the parties adducing other evidence to prove their case not
covered by this stipulation of facts.1wph1.t
We have been constrained to adopt the conclusion here set forth
because under the Torrens system, "registration is the operative act
that gives validity to the transfer or creates a lien upon the land (Secs.
50 and 51, Land Registration Act). Consequently, where there was
nothing in the certificate of title to indicate any cloud or vice in the
ownership of the property, or any encumbrance thereon, the purchaser
is not required to explore farther than what the Torrens title upon its
face indicates in quest for any hidden defect or inchoate right that may
subsequently defeat his right thereto. If the rule were otherwise, the
efficacy and conclusiveness of the certificate of title which the Torrens
system seeks to insure would entirely be futile and nugatory. (Reynes
vs. Barrera, 68 Phil. 656; De Lara and De Guzman vs. Ayroso, 50 O.G.
No. 10, 4838). The public shall then be denied of its foremost
motivation for respecting and observing the Land Registration Act. In
the end, the business community stands to be inconvenienced and
prejudiced immeasurably.

Furthermore, when the Register of Deeds issued a certificate of title in

the name of John W. Legare, and thereafter registered the same, John
W. Legare, insofar as third parties were concerned, acquired a valid
title to the house and lot here disputed. When, therefore, he transferred
this title to the herein petitioners, third persons, the entire transaction
fell within the purview of Article 1434 of the Civil Code. The registration
in John W. Legare's name effectively operated to convey the properties
to him.

ART. 1434. When a person who is not the owner of a thing

sells or alienates and delivers it, and later the seller or
grantor acquires title thereto, such title passes by operation
of law to the buyer or grantee.

This Court sympathizes with the respondent. It is aware of the

treacherous, painful fraud committed on her by her adopted son. But
positive provisions of law and settled jurisprudence cannot be
subordinated to that feeling.

Besides, the records of this case reveal that the herein respondent is
herself not entirely free from blame. We note that when John
presented to her the document which turned out to be a bed of
conveyance in his favor, she readily affixed her signature thereto upon
the simple representation of John that it was a document pertaining to
her claim with the U.S. Veterans Administration. She could have asked
her maid to read the contents of the same for her and yet she did not.
These, We believe, amount to a lack of prudence and precaution on
the part of Mrs. Emilia de Legare.

IN VIEW OF THE FOREGOING, the decision of the Court of Appeals

is hereby reversed and set aside. A new one is here entered
dismissing the respondent's complaint and declaring the petitioners
herein the lawful owners of the properties here involved. Without
pronouncement as to costs.
G.R. No. 107967 March 1, 1994
CONSORCIA TENIO-OBSEQUIO, ORLANDO OBSEQUIO, and
MANUEL, REGINA, TUNAY and MELITON, all surnamed
OBSEQUIO, petitioners,
vs.
COURT OF APPEALS, EUFRONIO ALIMPOOS, and PONCIANA
ALIMPOOS respondents.
REGALADO, J.:
This petition for review on certiorari seeks to annul and set aside the
decision of the Court of Appeals in CA-G.R. CV No. 22990, dated July
9, 1992, which reversed the judgment of the trial court, as well as its
resolution of November 6, 1992 denying the motion for reconsideration
of its aforesaid decision.
The subject matter of the present petition is a parcel of land,
designated as Lot No. 846, Pls-225 located at Andanan, Baguyan,
Agusan del Sur. This lot was previously covered by Original Certificate
of Title No. P-1181 registered in the name of herein respondent
Eufronio Alimpoos and which he acquired through a homestead
application.1 The said land is now registered in the name of herein
petitioner, Consorcia Tenio-Obsequio, as evidence by Transfer
Certificate of Title No. T-1421.2
On September 10, 1986, private respondents filed a complaint in the
court a quo against herein petitioners Consorcia Tenio and her
husband, Orlando Obsequio, and the heirs of Eduardo Deguro for
recovery of possession and ownership, alleging that sometime in 1964,
they mortgaged the land to Eduardo Deguro for P10,000.00; that to
guaranty the loan they delivered to the latter the original certificate of
title to the land; that in the meantime, they continued to cultivate the
same and, at the end of the harvest season, they gave two-thirds (2/3)
of the harvest to Eduardo Deguro; that on June 25, 1965, Eduardo
Deguro and his wife, without the knowledge and consent of herein
private respondents, prepared a document of sale and through
misrepresentation and other manipulations made it appear that private
respondents sold the land to them.
This deed of sale was annotated at the back of the said certificate of
title as Entry No. 16007. By virtue thereof, Original Certificate of Title
No. P-1181 in the name of Eufronio Alimpoos was cancelled and
Transfer Certificate of Title No. T-1360 was correspondingly issued in
favor of Eduardo Deguro. After the death of Eduardo Deguro, his heirs
sold the land to Consorcia Tenio-Obsequio. On September 22, 1970,
Transfer Certificate of Title No. T-1421 was issued in her name. It was
allegedly only in 1982, when Eufronio Alimpoos received a Certificate
of Agricultural Leasehold of his land from the Department of Agrarian
Reform (DAR), that he learned that the land was already titled in the
name of another.
In their answer, the heirs of Eduardo Deguro claimed that respondent
Alimpoos spouses sold the land to their late parents on June 25, 1965
for a consideration of P10,000.00, as evidenced by the deed of
absolute sale; that as a result thereof, Transfer Certificate of Title No.
T-1360 was issued in favor of their parents, that on April 23, 1970,
after the death of their parents, they sold the said land to Consorcia
Tenio-Obsequio; that on September 22, 1970, a new Transfer
Certificate of Title No. 1421 was issued in the name of the latter.
Consorcia Tenio-Obsequio, on the other hand, maintains that she
purchased the land in question from the heirs of Deguro in good faith,
for valuable consideration and without knowledge of any flaw or defect
whatsoever.
The trial court, giving credence to the evidence presented by herein
petitioners, defendants therein, ruled in their favor and rendered
judgment disposing as follows:
1) dismissing the herein
complaint;
2) declaring defendant
Consorcia Tenio Obsequio as
the true and absolute owner
of the land in litis;
3) ordering plaintiffs to pay
P10,000.00 by way of moral
damages;
4) ordering plaintiffs to pay
P10,000.00 by way of
exemplary damages;
5) ordering plaintiffs to pay the
expenses of litigation in the
amount of P5,000.00;
6) ordering plaintiffs to pay
(a)ttorney's fees in the amount
of P5,000.00; and
7) to pay the costs.
In like manner, the money deposited in the
Municipal Treasurer's Office of Bayugan in the
amounts of P2,724.95 covered by Official Receipt
No. 0442623 dated September 7, 1988 and
P1,658.10 covered by Official Receipt No.
5497715 dated September 14, 1988, as well as
the sum of P3,927.00 deposited in Court pursuant
to the Court's Orders of January 16, 1987 and
March 13, 1987, consisting of the proceeds from
the sale of the harvest taken from the area
involved, is awarded to defendant Consorcia Tenio
Obsequio, is owner thereof after deducting the
necessary expenses and Clerk of Court (s)
commission fee.3
On appeal, respondent Court of Appeals reversed the decision of the
lower court and rendered judgment:
1) Declaring the plaintiff Eufronio Alimpoos as the
true and legal owner of the property subject of this
case;
2) Declaring null and void the Deed of Absolute
Sale marked as Annex "C" or exhibit "D" and
ordering the cancellation of TCT Nos.
T-1360 and T-1421 in the names of Eduardo
Deguro and Consorcia Tenio Obsequio,
respectively;
3) Ordering the heirs of Eduardo Deguro and
Laureana Rabuya, namely, Gonzalo Deguro,
Manuel Deguro, Tunay Deguro and Regina
Deguro to reconvey the said property to the
plaintiffs:
4) Ordering the Register of Deeds to cancel the
annotation of the Deed of Absolute Sale at the
back of TCT P-1181 in favor of Consorcia Tenio
Obsequio and to clear said TCT of all
encumbrances executed by Eduardo Deguro
and/or his heirs.
In addition, the defendants are ordered to pay the
plaintiffs, jointly and severally, the sum of
P50,000.00 bay way of moral damages;
P30,000.00 by way of compensatory damages
and P5,000.00 by way of attorney's fees and costs
of litigation.4
Petitioners then filed a motion for reconsideration of the said decision
which was denied by the Court of Appeals in its resolution dated
November 6, 1992,5 hence the instant recourse by petitioners.
After a careful review of the records of this case and the legal
consideration applicable to the proven facts thereof, we find the
petition at bar to be meritorious. Reconveyance of the land in question
to the original owner is not in order.
Herein respondent Alimpoos, as the original owner of the said land, is
assailing the title of petitioner on the ground that their original
certificate of title over the said land was cancelled by virtue of a forged
deed of absolute sale.
Under Section 55 the Land Registration Act, as amended by Section
53 of Presidential Decree No. 1529, an original owner, of registered
land may seek the annulment of a transfer thereof on the ground of
fraud. However, such a remedy is without prejudice to the rights of any
innocent holder for value with a certificate of title.-
A purchaser in good faith and for value is one who buys the property of
another, without notice that some other person has a right to or interest
in such property, and pays a full and fair price for the same at the time
of such purchase or before he has notice of the claim or interest of
some other person in the property6 In consonance with this accepted
legal definition, petitioner Consorcia Tenio-Obsequio is a purchaser in
good faith. There is no showing whatsoever nor even an allegation that
herein petitioner had any participation, voluntarily or otherwise, in the
alleged forgery.
Nor can we charge said petitioner with negligence since, at the time of
the sale to her, the land was already registered in the name of Eduardo
Deguro7 and the tax declaration was also issued in the latter's
name.8 It was also clearly indicated at the back of the original
certificate of title that Eduardo Deguro acquired ownership over the
said land by virtue of the deed of sale executed in his favor. 9 In fact, it
is not disputed that one of his heirs was actually residing
therein. 10 There is no annotation, defect or flaw in the title that would
have aroused any suspicion as to its authenticity. Such being the case,
petitioner has the right to rely on what appears on the face of the
certificate of title.
The main purpose of the Torrens system is to avoid possible conflicts
of title to real estate and to facilitate transactions relative thereto by
giving the public the right to rely upon the face of a Torrens certificate
of title and to dispense with the need of inquiring further, except when
the party concerned has actual knowledge of facts and circumstances
that should impel a reasonably cautious man to make such further
inquiry. 11 Where innocent third persons, relying on the correctness of
the certificate of title thus issued, acquire, rights over the property, the
court cannot disregard such rights and order the total cancellation of
the certificate. The effect of such an outright cancellation would be to
impair public confidence in the certificate of title, for everyone dealing
with property registered under the Torrens system would have to
inquire in every instance as to whether the title has been regularly or
irregularly issued by the court. Every person dealing with registered
land may safely rely on the correctness of the certificate of title issued
therefor and the law will in no way oblige him to go beyond the
certificate to determine the condition of property.12
The Torrens system was adopted in this country because it was
believed to be the most effective measure to guarantee the integrity of
land titles and to protect their indefeasibility once the claim of
ownership is established and recognized. If a person purchases a
piece of land on the assurance that the seller's title thereto is valid, he
should not run the risk of being told later that his acquisition was
ineffectual after all. This would not only be unfair to him. What is worse
is that if this were permitted, public confidence in the system would be
eroded and land transactions would have to be attended by
complicated and not necessarily conclusive investigations and proof of
ownership. The further consequence would be that land conflicts could
be even more numerous and complex than they are now and possibly
also more abrasive, if not even violent. The Government, recognizing
the worthy purposes of the Torrens system, should be the first to
accept the validity of titles issued thereunder once the conditions laid
down by the law are satisfied.13
Moreover, there is no reason to doubt the authenticity of the deed of
sale which constituted the basis for the issuance of the transfer
certificate of title in the name of Eduardo Deguro, considering that not
only was the contract notarized but that it was also approved by the
Secretary of Agriculture and Natural Resources in compliance with
Section 118 of the Public Land Act. 14
There is no indubitable, legal and convincing reason for nullifying the
deed of sale. Herein private respondents have not presented any
cogent, complete and convincing proof to override the evidentiary
value of the duly notarized deed of sale. A notarial document is
evidence of the facts in the clear unequivocal manner therein
expressed. It has in its favor the presumption of regularity. To
contradict all these, there must be evidence that is clear, convincing
and more than merely preponderant. 15
The fact alone that the signature of private respondent Eufronio
Alimpoos appearing on the deed of sale of Deguro differs in certain
points from his signature appearing in the "Kasabutan sa Prenda" is
not enough to warrant the conclusion that the signature in said deed of
sale is not genuine. The records show that the signatures of private
respondent Eufronio Alimpoos in one of the cash advance
receipts 16 and in the notice of the trial court's order dated March 4,
1988 17 are similar to the signature appearing in the deed of sale. It is,
therefore, not improbable that, as claimed by herein petitioners, private
respondent could have deliberately and purposely altered their
signatures on the mortgage contract to thereafter make it appear that a
discrepancy actually exists.
Forgery cannot be presumed; it must be proved by clear, positive and
convincing evidence. Those who make the allegation of forgery have
the burden of providing it since a mere allegation is not
evidence. 18 Private respondents in this case ruefully failed to
substantiate with sufficient evidence their claim that their signatures
appearing on the deed of sale were forged.
At any rate, there are several reasons to doubt the authenticity of the
"Kasabutan sa Prenda." Firstly, it has not been sufficiently explained
why, although it should normally be with the mortgagee, the original
mortgage contract remained in the possession of the mortgagor and it
was only after the death of the alleged mortgagee that the same was
presented, which was more than twenty years from the date of its
alleged execution. Secondly, the consideration of P10,000.00 for a
mortgage in 1964 of a piece of rural land consisting of only 81,882
square meters, with the mortgagee paying the taxes thereon, is too
high or excessive, considering that the same piece of land was
coetaneously mortgaged with the Development Bank of the Philippine
for only P1,900.00. 19 Thirdly, the texture of the paper on which it was
written and the clarity of the writing show that the document,
supposedly executed on July 25, 1964, is of recent vintage and could
not be more than twenty years old, even as of this late date. 20
Yet, even on the implausible assumption, ex gratia argumenti, that the
deed of sale in favor of Eduardo Deguro was forged and is, therefore,
null and void, such fact cannot be successfully invoked to invalidate
the title subsequently issued to herein petitioner who, as earlier stated,
is an innocent purchaser for value and in good faith.
It has been consistently ruled that a forged deed can legally be the root
of a valid title when an innocent purchaser for value intervenes. 21 A
deed of sale executed by an impostor without the authority of the
owner of the land sold is a nullity, and registration will not validate what
otherwise is an invalid document. However, where the certificate of title
was already transferred from the name of the true owner to the forger
and, while it remained that way, the land was subsequently sold to an
innocent purchaser, the vendee had the right to rely upon what
appeared in the certificate and, in the absence of anything to excite
suspicion, was under no obligation to look beyond the certificate and
investigate the title of the vendor appearing on the face of said
certificate.22
The Torrens Act, in order to prevent a forged transfer from being
registered, erects a safeguard by requiring that no transfer shall be
registered unless the owner's certificate of title is produced along with
the instrument of transfer. However, an executed document of transfer
of registered land placed by the registered owner thereof in the hands
of another operates as a representation to a third party that the holder
of the document of transfer is authorized to deal with the land. 23 In the
case at bar, it was even private respondents who made the allegation
that they further delivered their certificate of title to Eduardo Deguro,
allegedly to secure the loan extended to them. Consequently,
petitioner cannot be faulted and, as a matter of fact, she is vested with
the right to rely on the title of Eduardo Deguro.
Furthermore, it was the very act of the respondent Alimpoos spouses
in entrusting their certificate of title to Eduardo Deguro that made it
possible for the commission of the alleged fraud, if indeed there was
such a fraudulent conduct as imputed to the latter. Hence, the rule of
law and justice that should apply in this case is that as between two
innocent persons, one of whom must suffer the consequences of a
breach of trust, the one who made it possible by his act of confidence
must bear the loss.24
The right of the innocent purchaser for value must be respected and
protected, even if the seller obtained his title through fraud. The
remedy of the person prejudiced is to bring an action for damages
against those who caused or employed the fraud, and if the latter are
insolvent, an action against the Treasurer of the Philippines may be
filed for recovery of damages against the Assurance Fund.25
It is also significant and worth noting that herein respondents filed the
instant complaint only after twenty-two years from the execution of the
supposedly forged deed of absolute sale, and after sixteen years from
the date the title was transferred in the name of herein petitioner. An
action for reconveyance is a legal remedy granted to a landowner
whose property has been wrongfully or erroneously registered in
another's name, but then the action must be filed within ten years from
the issuance of the title since such issuance operates as a constructive
notice.26
WHEREFORE, the decision and resolution of respondent court now
under review are hereby REVERSED and the decision of the court a
quo is accordingly REINSTATED.
SO ORDERED.
G.R. No. L-42805 August 31, 1987
THE TREASURER OF THE PHILIPPINES, petitioner,
vs.
THE COURT OF APPEALS and SPOUSES EDUARDO OCSON and
NORA E. OCSON respondents.
CRUZ, J.:
The petitioner asks us to reverse a decision of the respondent court
affirming that of the trial court holding the Assurance Fund subsidiarily
liable for damages sustained by the private respondents under the
following established facts.
Sometime in 1965, a person Identifying himself as Lawaan Lopez
offered to sell to the private respondents a parcel of land located in
Quezon City and consisting of 1,316.8 square meters, which he
claimed as his property. His asking price was P85.00 per square meter
but after a month's haggling the parties agreed on the reduced price of
P76.00 per square meter. The sale was deferred, however, because
the prospective vendor said his certificate of title had been burned in
his house in Divisoria, and he would have to file a petition with the
court of first instance of Quezon City for a duplicate certificate of title.
He did so and the petition was granted after hearing without any
opposition. Following the issuance of the new duplicate certificate of
title, the said person executed a deed of sale in favor of the private
respondents, who paid him the stipulated purchase price of
P98,700.00 in full. The corresponding transfer certificate of title was
subsequently issued to them after cancellation of the duplicate
certificate in the name of Lawaan Lopez. 1
Trouble began two years later when another person, this time a
woman, appeared and, claiming to be the real Lawaan Lopez, filed a
petition in the court of first instance of Quezon City to declare as null
and void the transfer of her land in favor of the private respondents, on
the ground that it had been made by an impostor. 2 After trial, the
questioned deed of sale was annulled, (together with the duplicate
certificate of title issued to the impostor and the transfer certificate of
title in the name of the private respondents) and the real owner's
duplicate certificate of title was revalidated. 3 Neither the Solicitor
General nor the private respondents appealed the decision, but
Lawaan Lopez did so, claiming that the defendants should have been
required to pay damages to her and the costs. The appeal was
dismissed, with the finding by Justices Jose Leuterio, Magno
Gatmaitan and Luis B. Reyes of the Court of Appeals that there was no
collusion between the private respondents and the impostor. 4
Subsequently the private respondents filed a complaint against the
impostor Lawaan Lopez and the Treasurer of the Philippines as
custodian of the Assurance Fund for damages sustained by the
plaintiffs as above narrated. Both the trial court * ruled the respondent
court ** ruled in their favor, holding the Assurance Fund subsidiarily
liable for the sum of P138,264.00 with legal interest from the date of
filing of the complaint, in case the judgment could not be enforced
against the other defendant who had been defaulted and could not be
located. 5 The petitioner, disclaiming liability, is now before us and
prays for relief against the decision of the respondent court which he
says is not in accord with law and jurisprudence.
The applicable law is Section 101 of Act No. 496 (before its revision by
P.D. No. 1529) providing as follows:
Sec. 101. Any person who without negligence on his part sustains loss
or damage through any omission, mistake or misfeasance of the clerk,
or register of deeds, or of any examiner of titles, or of any deputy or
clerk or of the register of deeds in the performance of their respective
duties under the provisions of this Act, and any person who is
wrongfully deprived of any land or any interest therein, without
negligence on his part, through the bringing of the same under the
provisions of this Act or by the registration of any other person as
owner of such land, or by any mistake, omission, or misdescription in
any certificate or owner's duplicate, or in any entry or memorandum in
the register or other official book, or by any cancellation and who by
the provisions of this Act is barred or in any way precluded from
bringing an action for the recovery of such land or interest therein, or
claim upon the same, may bring in any court or competent jurisdiction
an action against the Treasurer of the Philippine Archipelago for the
recovery of damages to be paid out of the Assurance Fund.
Commenting on this provision, Commissioner Antonio H. Noblejas, in
his book on Land Titles and Deed 6 notes that recovery from the
Assurance Fund could be demanded by:
1) Any person who sustains loss or damage under the following
conditions:
a) that there was no negligence on his part; and
b) that the loss or damage was sustained through any omission,
mistake, or misfeasance of the clerk of court, or the register of deeds,
his deputy or clerk, in the performance of their respective duties under
the provisions of the land Registration Act,' or
2) Any person who has been deprived of any land or any interest
therein under the following conditions:
a) that there was no negligence on his part;
b) that he was deprived as a consequence of the bringing of his land or
interest therein under the provisions of the Property Registration
Decree; or by the registration by any other persons as owner of such
land; or by mistake, omission or misdescription in any certificate or
owner's duplicate, or in any entry or memorandum in the register or
other official book, or by any cancellation; and
c) that he is barred or in any way precluded from bringing an action for
the recovery of such land or interest therein, or claim upon the same.
A careful reading of the above provision will readily show that the
private respondents do not come under either of the two situations
above mentioned.
The first situation is clearly inapplicable as we are not dealing here with
any omission, mistake or malfeasance of the clerk of court or of the
register of deeds or his personnel in the performance of their duties.
The second situation is also inapplicable. The strongest obstacle to
recovery thereunder is that the private respondents acquired no land or
any interest therein as a result of the invalid sale made to them by the
spurious Lawaan Lopez.
The petition correctly points out that such sale conveyed no title or any
interest at all to them for the simple reason that the supposed vendor
had no title or interest to transfer. He was not the owner of the land. He
had no right thereto he could convey. Manifestly, the deception
imposed upon them by the impostor deprived the private respondents
of the money they delivered to him as consideration for the sale. But
there is no question that the subsequent cancellation of the sale did
not deprive them of the land subject thereof, or of any interest wherein,
for they never acquired ownership over it in the first place.
The private respondents argue that from the time the new transfer
certificate of title was issued in their name on January 28, 1965, until it
was cancelled on October 12, 1967, they were the true and exclusive
owners of the disputed property. Hence, the cancellation of their title
on the latter date had the effect of depriving them of the said land and
so entitles them now to proceed against the Assurance Fund.
The flaw in this posture is that the real Lawaan Lopez had her own
genuine certificate of title all the time and it remained valid despite the
issuance of the new certificate of title in the name of the private
respondents. That new certificate, as the trial court correctly declared,
was null and void ab initio, which means that it had no legal effect
whatsoever and at any time. The private respondents were not for a
single moment the owner of the property in question and so cannot
claim to have been unlawfully deprived thereof when their certificate of
title was found and declared to be a total nullity.
Additionally, the Court observes that the private respondents were not
exactly diligent in verifying the credentials of the impostor whom they
had never met before he came to them with his bogus offer. The fact
alone that he claimed to have lost his duplicate certificate of title in a
fire, not to mention the amount of the consideration involved, would
have put them on their guard and warned them to make a more
thorough investigation of the seller's Identity. They did not. Oddly, they
seemed to be satisfied that he had an Ilongo accent to establish his
claim to be the Visayan owner of the property in question. They were
apparently not concerned over the curious fact that for his residence
certificate B the supposed owner had paid only P1.00 although the
property he was selling was worth to him no less than
P98,700.00. 7 Moreover, whereas address in that certificate was
Mandaluyong, Rizal, whereas the address indicated in the records of
the Register of Deeds of the owner of the land in question was Fara-on
Fabrics, Negros Occidental. 8
As for the proceedings for the issuance of a duplicate certificate of title,
the private respondents themselves state in their complaint that the
evidence of the petitioner therein was received by the clerk of court
only, without any opposition, and his report was thereafter accepted by
the trial judge who thereupon granted the relief sought by the
impostor. 9 It is not likely, given the summary nature of these
proceedings, that the necessary care was taken by the court to
establish the real identity of the person who claimed to be the owner of
the property in question.
While we may agree that there was no collusion between the parties
respondents and the vanished vendor, we are not prepared to rule
under the circumstances of this case that they are entitled to even
claim the status of innocent purchasers of the land. On the contrary,
we find that for failure to exercise the necessary diligence in
ascertaining the credentials and bona fides of the false Lawaan Lopez,
and as a result of his deception, they never acquired any title to the
said land or any interest therein covered by Section 101 of Act No.
496.

As this Court held in La Urbana v. Bernardo 10 "it is a condition sine

qua non that the person who brings an action for damages against the
Assurance Fund be the registered owner and as the holders of transfer
certificates of title, that they be innocent purchasers in good faith and
for value." Being neither the registered owners nor innocent
purchasers, the private respondents are not entitled to recover from
the Assurance Fund.

They are, of course, not entirely without recourse, for they may still
proceed against the impostor in a civil action for recovery and
damages or prosecute him under the Revised Penal Code, assuming
he can be located and arrested. The problem is that he has completely
disappeared. That difficulty alone, however, should not make the
Assurance Fund liable to the private respondents for the serious wrong
they have sustained from the false Lawaan Lopez. The Government
like all governments, and for obvious reasons is not an insurer of
the unwary citizen's property against the chicanery of scoundrels.

WHEREFORE, the petition is GRANTED. The decision of the

respondent court dated January 26, 1976 is set aside, and Civil Case
No. 12426 of the then Court of First Instance of Rizal is dismissed. No
costs.

SO ORDERED.
G.R. No. L-79787 June 29, 1989
APOLONIO EGAO AND BEATRIZ EGAO, petitioners,
vs.
THE HONORABLE COURT OF APPEALS (NINTH DIVISION),
SEVERO DIGNOS AND SEVERO BONTILAO, respondents.
PADILLA, J.:
This is a land dispute which culminated in the filing by private
respondents Severo Dignos and Severo Bontilao of a verified
complaint for Quieting of Title and/or Recovery of Possession and
Ownership before the RTC of Manolo Fortich, Bukidnon, * against
petitioners Apolonio and Beatriz Egao.
Private respondents' complaint alleged that they are the legitimate
owners and possessors of two (2) parcels of land situated at Lonocan,
Manolo Fortich, Bukidnon, per deed of absolute sale dated 21
December 1979 which, among others, recited thus:
WHEREAS, the abovementioned Parcels of land Lot No. 662 is
covered by Original Certificate of Title No. P-3559 Free Patent No.
298112 registered in the name of APOLONIO EGAO married to
Beatriz Menosa and Lot No. 661 is covered by Original Certificate of
Title No. P-3558 Free Patent No. 303249 registered in the name of
RAULITA CONEJOS married to Pedro Conejos, all transcribed in the
Registration Book in the Register of Deeds for the Province of
Bukidnon;
WHEREAS, Lot No. 662 has been transferred in ownership from
BEATRIZ MENOSA EGAO, married to Apolonio Egao in favor of
ROBERTO N. MARFORI per Deed of Absolute Sale executed before
Tommy C. Pacana, Notary Public of Cagayan de Oro City entered in
his Notarial Registry under Doc. No. 75; Page No. 15; Book V Series of
1965; and Lot No. 661 likewise has been transferred in ownership from
RAULITA R. CONEJOS in favor of ROBERTO N. MARFORI per Deed
of Absolute Sale executed before Tommy C. Pacana, Notary Public of
Cagayan de Oro City, dated June 3, 1965, entered in his Notarial
Registry under Doc. No. 20; Page 4; Book V; Series of 1965.
WHEREAS, the VENDEES herein is [sic] aware of the fact that the
Certificate of Title over the abovementioned parcels of land have not
yet been transferred in favor of ROBERTO N. MARFORI except for the
tax declarations but that the VENDOR herein is in actual, physical,
continuous, uninterrupted, and adverse possession of the above
described parcels of land free from all liens and encumbrances
whatsoever; 1
Allegedly, upon purchase of Lot No. 662 from Roberto Marfori,
improvements were introduced and taxes paid by private respondents.
Sometime in June 1983, herein petitioners allegedly occupied illegally
portions of the land. 2
Petitioners' answer to the complaint asserted that Apolonio Egao is the
registered owner of the parcel of land known as Lot No. 662, Pls 854
with an area of 3,451 sq. meters evidenced by OCT No. P-3559 issued
by the Register of Deeds of Bukidnon pursuant to Free Patent No.
298112 dated 12 August 1965; that he (Apolonio Egao) and his family
have been in actual, physical, adverse, open and continuous
possession thereof even before the issuance to him of the free patent;
that the land has never been sold by reason of the prohibition against
alienation under Commonwealth Act No. 141 (Public Land Law); and
that the instant case was the fourth in a series filed against the Egaos
and is part of respondents' scheme to grab said parcel of land from the
petitioners.
Judge Felicidario M. Batoy ruled in favor of the Egaos, herein
petitioners (defendants in the court a quo), ordering respondent Severo
Bontilao (plaintiff in the court a quo) to immediately deliver to the
Egaos the owner's duplicate copy of Original Certificate of Title No. P-
3559. Said trial judge held:
In the instant case, granting arguendo, that defendants executed the 2
documents in favor of Marfori (Exhs. A & B) after the filing of the
application for free patent but before the issuance of the latter, without
the approval of the Director of Lands, upon issuance of Free Patent
No. 29811 2 on August 12, 1965, the said deeds of sale (Exhs. A & B)
were ipso facto cancelled or superseded by said free patent. Moreover,
it appears from the evidence that defendants never vacated or
abandoned their possession of Lot No. 662 as they have continuously
lived on said lot since 1950, a fact admitted by the plaintiffs
themselves.
And as long as Original Certificate of Title No. P-3559 remains in the
name of defendant Apolonio Egao, married to Beatriz Menoza Egao,
this is the ultimate and best evidence of title granted by the
government which must be honored and respected by the courts. In a
nutshell, the plaintiffs miserably failed to present or show any title to
Lot No. 662, PLS-854 which should be quieted or freed from any cloud
of doubt as prayed for in their complaint and they further failed to show
that they are entitled to the ownership and possession to Lot No. 662,
PLS-854. 3
Private respondents went to the Court of Appeals in CA-G.R. No.
09539. Setting aside the RTC decision, the appellate court ** held, in
part, thus-
That the land is titled in the name of defendant Apolonio Egao is not in
question. The main point in issue is whether defendants could validly
sell the land to Marfori who in turn transferred ownership thereof to the
plaintiff. 4
Marfori and Egao were both held by the Court of Appeals in pari
delicto for violating the five (5) year restriction under Sec. 118,
Commonwealth Act No. 141 as amended by Act No. 496 against
encumbrance or alienation of lands acquired under a free patent or
homestead; hence, they cannot, according to the appellate court, seek
affirmative relief, but respondents on the other hand were declared
innocent purchasers for value who obtained the owner's duplicate copy
of the OCT (still in the name of the Egaos) from Marfori who
transferred to them (respondents) physical possession of the property.
Finally, the Court of Appeals held:
WHEREFORE, the decision appealed from is hereby SET ASIDE and
a new one is rendered:
1. Declaring the plaintiffs as the absolute owners of the land known as
Lot No. 662, Pls-854 of the Land Registry of Bukidnon;
2. Ordering the Register of Deeds of Bukidnon to effect the
cancellation of Original Certificate of Title No. P-3559 in the name of
Apolonio Egao and in lieu thereof, another one be issued in the names
of plaintiffs, after payment of the proper fees;
3. Ordering the defendants to surrender peaceful possession of the
land to plaintiffs and to desist from further disturbing the possession
over the land of plaintiffs;
4. Ordering the defendants to pay the costs.
SO ORDERED. 5
Petitioners turn to this Court for relief, assailing the appellate court for
allegedly committing grave abuse of discretion amounting to lack of
jurisdiction in holding that:
a. Petitioners sold Lot 662 to Roberto Marfori;
b. It was only in 1983 when Petitioners wrested possession over the
land from private respondents;
c. Petitioners never denied the sales made in favor of Marfori, in their
answer;
6
d. Private Respondents are "innocent purchasers for value.
and/or for allegedly deciding questions of substance not in accordance
with law and/or applicable decisions of this Court.
Without giving due course to the petition, the Court required
respondents to comment. 7 After comment, the Court resolved to
require petitioners to file a reply, which they did. Respondents filed a
rejoinder. Considering the allegations, issues and arguments adduced,
the Court resolved to give due course to the petition. Upon submission
by the parties of their respective memorandum, the petition was
submitted for decision. 8
Validity of the Deeds of Sale executed between Marfori (as purchaser)
and the petitioners (as sellers) is the main issue to be resolved, in
determining respondents' right over the disputed land, the respondents
being the transferees of Marfori.
It is undisputed that Free Patent No. 298112 was issued to petitioner
Apolonio Egao over Lot No. 662 on 12 August, 1965. Sec. 118 of
Commonwealth Act No. 141, as amended, prohibits the alienation or
encumbrance, within a period of five (5) years from the date of
issuance of the patent, of lands acquired under free patent or
homestead. Assuming, arguendo, the authenticity of the Deeds of Sale
executed by the Egaos in favor of Marfori over portions of Lot No. 662
(the land in question), dated 7 May 1964, 14 January and 6 October
1965, it clearly appears that all deeds were executed within the
prohibited period of five (5) years. As correctly found by the appellate
court-
Section 124 of the Public Land Act provided [sic] that any acquisition,
conveyance, abenation, transfer or other contract made or executed
inviolation of any of the provisions of Sections 118,121,120,122 and
123 of this Act shall be unlawful, null and void from its execution and
shall produce the effect of annulling and cancelling the grant, title,
patent or permit originally issued, recognized or confirmed, actually or
prescriptively, and cause the reversion of the property and its
improvements to the state. 9
Accordingly, respondents who are not innocent purchasers for value
have no standing to question petitioners' right to the land and to file an
action for quieting of title.
WHEREFORE, the appealed decision of the Court of Appeals in CA
G.R. CV No. 09539 is REVERSED and SET ASIDE. Meanwhile,
petitioners as registered owners are entitled to remain in physical
possession of the disputed property. Respondents are ordered to
deliver the owner's duplicate copy of the OCT (No. P-3559) to
petitioners, without prejudice to an action for reversion of the land,
which may be instituted by the Solicitor General for the State.

Petitioners deny the authenticity and due execution of the notarized Let a copy of this decision be furnished the Solicitor General.
deeds of sale in favor of Marfori, asserting continued ownership over
the land by virtue of a Torrens Certificate of Title issued in their name.
SO ORDERED.
While the Court is not satisfied with respondents' explanation of their
failure to present the notaries public (who were residents of a
neighboring province) to affirm their participation in the preparation of
the Deeds, the Court also finds as insufficient the mere denials by
petitioners as to due execution and authenticity of said Deeds of Sale.
A notarial document is evidence of the facts in clear unequivocal
mariner therein expressed. It has in its favor the presumption of
regularity To contradict all these there must be evidence that is clear,
convincing and more than merely preponderant. 10 The question of
authenticity being one of fact, the Court will not disturb the conclusions
of the Court of Appeals on the matter.

Original Certificate of Title No. P-3559 over the land in dispute was
issued on 1 March 1966, a few months after the execution by the
Egaos of the last Deed of Sale in favor of Marfori. 11 The OCT is
registered in the name of the Egaos, herein petitioners.

A Torrens title, once registered, cannot be defeated, even by adverse

open and notorious possession. A registered title under the Torrens
system cannot be defeated by prescription. The title, once registered,
is notice to the world. All persons must take notice. No one can plead
ignorance of the registration. 12

Contrary to the appellate court's conclusion, respondents are not

innocent purchasers for value. 13 An "innocent purchaser for value" is
deemed, under the Torrens system, to include an innocent lessee,
mortgagee or other encumbrancer for value. 14 Where a purchaser
neglects to make the necessary inquiries and closes his eyes to facts
which should put a reasonable man on his guard as to the possibility of
the existence of a defect in his vendor's title, and relying on the belief
that there was no defect in the title of the vendor, purchases the
property without making any further investigation, he cannot claim that
he is a purchaser in good faith for value. 15

Furthermore, a private individual may not bring an action for reversion

or any action which would have the effect of cancelling a free patent
and the corresponding certificate of title issued on the basis thereof,
with the result that the land covered thereby will again form part of the
public domain, as only the Solicitor General or the officer acting in his
stead may do so. 16

The rule of pari delicto non oritur actio (where two persons are equally
at fault neither party may be entitled to relief under the law), admits of
exceptions and does not apply to an inexistent contract, such as, a
sale void ab initiounder the Public Land Act, when its enforcement or
application runs counter to the public policy of preserving the grantee's
right to the land under the homestead law. 17

Sec. 51, par. 2 of the Property Registration Decree (PD 1529), formerly
Sec. 50 of the Land Registration Act (Act No. 496) expressly provides
that the registration of the Deed is the operative act that binds or
affects the land insofar as third persons are concerned. The law
requires a higher degree of prudence from one who buys from a
person who is not the registered owner, when the land object of the
transaction is registered land. While one who buys from the registered
owner need not look behind the certificate of title, one who buys from
another who is notthe registered owner is expected to examine not
only the certificate of title but all factual circumstances necessary for
him to determine if there are any flaws in the title of the transferor, or in
his capacity to transfer the land. Failing to exercise caution of any kind
whatsoever is tantamount to bad faith.18

Deeds of sale of patented lands, perfected within the prohibited five (5)
year period are null and void (Sec. 124, Public Land Act). No title
passed from the Egaos to Marfori which could be validly transferred to
herein respondents Bontilao and Dignos. Nemo dat quod non
habet (nobody can dispose of that which does not belong to him). 19

While the government has not taken steps to assert its title, by
reversion, to a homestead sold in violation of the Public Land Act, the
vendor or his heirs is better entitled to the possession of the said, the
vendee being in no better situation than any intruder.20
G.R. No. L-32723 October 28, 1977
JUAN DACASIN, JOSE MARAMBA, MARIA MARAMBA,
SORAHAYDA MARAMBA, FLORDELIZA MARAMBA and
FILIPINAS MARAMBA, petitioners,
vs.
THE COURT OF APPEALS, FELIPE CAPUA, SINFOROSA
PADILLA, GUALBERTO CALULOT and OLIMPIA
LOMIBAO, respondents.
GUERRERO, J.:
Petition for review on certiorari of the decision of the Court of Appeals
in CA-G.R. No. 42404-R entitled "Felipe Capua, et al., Plaintiffs-
Appellants, vs Juan Dacasin, et al., Defendants-Appellees" reversing
the judgment of the Court of First Instance of Pangasinan which
adjudicated the ownership of the land in controversy to the plaintiffs.
The original action instituted in the case at bar sought the complaint
filed by the plaintiffs Felipe Capua, Sinforosa Padilla, Gualberto Calulot
and Olimpia Lomibao (herein respondents) against the defendants
Juan Dacasin, Jose Maramba and Filipinos Maramba (herein
petitioners), docketed as Civil Case No. 1455, Court of First Instance
of Pangasinan.
The facts as found by the Court of Appeals are as follows: +.wph!1 defendants for damages in the amount of P5,000.00, the same not
IT RESULTING: That the antecedents are quite complicated and it will
be the task of this Court to simplify; sometime prior to January 19,
1943 the property in question, a parcel of rural land in the barrio of
Patayac Municipality of Sta. Barbara, Province of Pangasinan
described in paragraph 2 of the complaint was being possessed by
Jose Maramba, Exh. 4; in that month and year a certain Sabina Capua
with companions grabbed possession of the property; and since then
possessed; sometime afterwards on a date not very clear in the record,
Jose Maramba filed Civil Case No. 895 of the Court of First Instance of
Pangasinan against Sabina Capua and companions
for revindication but that notwithstanding, Sabina remained; while Jose
Maramba had his own declaration of land tax, it will appear that Sabina
also had her own, see Exh. F; while that Civil Case No. 895 was
pending, Sabina sold the property unto Gualberto Calulot on 21 April,
1950 Exh. A and Gualberto took over there is no evidence that
Gualberto was informed or came to know of the pending litigation
between Jose Maramba and Sabina Capua:
at any rate by decision dated 1 (September), l952, the Court of First
Instance of Pangasinan declared Jose Maramba absolute owner and
condemned Sabina and companions to vacate and deliver to
Maramba. unfortunately decision was not executed within the
reglementary period of five (5) years from the time it had become final
pursuant to the Rules; and for his part several years later specifically
on 27 May, 1960, Exh. C Gualberto sold the same property unto now
plaintiffs spouses Felipe Capua and Sinforosa Padilla; and these last
came in to possess thereafter: meantime the prevailing party in Civil
Case No. 895 Jose Maramba having died, his heirs and successors-in-
interest sometime afterwards on 2 August, 1961, Exh. 1, sold the
property to herein defendant Juan Dacasin and his wife; it was at this
stage where the trouble came to brew because Jose (Maramba)
having tried to possess and thwarted in his efforts by Felipe Capua,
went to the Court in Civil (Case) No. 895 and secured a writ of
possession on 3 October, 1960, Exh. G and possession was unto him
delivered by the Sheriff on 4 October, 1960, Exh. G-1; from then on
actual possession came to be a seesaw; notwithstanding the writ,
Felipe Capua tried to come in once again; (Jose Maramba) asked to
punish him for contempt but the Pangasinan Court by order of 5
February, 1961 held that there could be no contempt because the writ
of possession having been issued more than 5 years from the date the
judgment had become final became a nullity under Rule 39, Sec. 6 and
so it was that the Pangasinan Court restored Felipe Capua to
possession;
with that development, the heirs of Jose .Maramba filed Civil (Case)
No. D-1292 in the Pangasinan Court on 22 February, 1962 against
Sabina Capua and companions in the old Civil Case No. 895 for revival
of the judgment, Exh. X; an In answer to that Sabina alleged that she
had already disposed of the property more than ten (10) years
previous to Gualberto Calulot who in turn had sold afterwards to Felipe
Capua, Exh. Y; and the Pangasinan Court after hearing the case for
revival of judgment revived it by decision of 21 March, 1963 against
Sabina Capua and her old companions in Civil Case No. 895; now in
anticipation of repercussions that would have to be produced by that
judgment, Felipe Capua began the present hostilities by filing together
with his wife and his original vendors Gualberto Calulot and wife the
present Civil Case No. 1456 against Juan Dacasin and the heirs of
Jose Maramba asking that he, Capua and his wife be declared the
absolute owners of the property, virtue of his purchase in good faith
and by the continuous possession from 21 April, 1950 of his immediate
predecessor-in-interest Gualberto Calulot succeeded by himself on 27
May, 1960 under Exh. C and defendant Juan Dacasin, et al. in due
time filed their answer on 30 April, 1963 alleging that he was the true
owner, and that the question of ownership was already judicially settled
in Civil (Case) No. 895; and in the trial of the case both parties sought
to sustain their respective positions by oral and documentary proofs;
the gist of plaintiff's position sought to be developed in his evidence
being that he ",as the true owner notwithstanding Civil Case No. 895
because of his long continued possession tacked with that of his
predecessors-in-interest while defendants sought to show the reverse,
that the holding on the issue of ownership was already impossible to
evade having been finally settled in Civil (Case) No. 895 in favor of
their predecessor-in-interest Jose Maramba.
After trial, judgment war, rendered in favor of the petitioners Juan
Dacasin et al. in the following wise and
WHEREFORE, in view of all the foregoing, this Court rules that
defendant, Juan Dacasin is the true and lawful owner of that certain
parcel of land described in the above-entitled complaint, having shown
that this title thereto has been acquired in good faith from unpolluted
sources, and is therefore, entitled to. the full and complete possession
of the same. The plaintiffs are hereby ordered to respect defendants'
possession and to refrain from further molesting defendant Juan
Dacasin in the enjoyment of said property. The preliminary injunction
issued by this Court is hereby dissolved and the counterbond filed by
the defendant Juan Dacasin is ordered cancelled. The plaintiffs are
also ordered to pay the defendants, jointly severally, the amount of
P500 00 spent by them in defending this suit. The claim made by the
having been satisfactorily proven, is hereby denied. Finally, the
plaintiffs are also ordered to pay the costs of this proceedings.
SO ORDERED.
Dagupan City, July 8, 1968. +.wph!1
SIXTO A. DOMONDON +.wph!1
Judge
Not satisfied with the decision of the trial court, the plaintiffs appealed
to the appellate court. On July 17, 1970, the Court of Appeals
promulgated its decision reversing the judgment a from, adjudicating
the ownership of the lot to the defendant spouses Felipe Capua and
Sinforosa Padilla; made the writ of injunction issued by the trial judge
on March 28, 1963 against the defendants permanent; and set aside
the order of the trial judge dated April 29, 1964 dissolving the writ, with
costs against the defendants. Plaintiffs now appeal to the Court in
fourteen (14) t of which can be reduced to only one issue, that is,
whether the decision is in accordance with law and jurisprudence.
The Court of Appeals held "that the question of ownership was litigated
by the parties' respective predecessor-in-interest in Civil Case No. 895
(and) if this were to be the only point involved there should be no
question that Jose Maramba, defendants predecessor-in-interest
having been declared the true owner of the property as against Sabina
Capua, plaintiffs predecessor-in-interest litigation must have to be
decided in the same manner." To this holding of respondent , We are
in full agreement for the judgment in Civil Case No. 895 file and
docketed in the. CFI of Pangasinan on September 8, 1944, and on
September 1, 1952 in favor of Jose Maramba, resolved the question of
title and ownership of the property in litigation as follows: +.wph!1
The Court hereby renders judgment in favor of plaintiff and against the
defendant, declaring the plaintiffs, Jose Maramba, the absolute owner,
with rights of possession and enjoyment of the land in question and
orders the defendant to vacate the same and deliver to the plaintiff the
possession.+.wph!1
(Record on Appeal, p. 61)
We find in this case at bar the following requisites that concur (1) there
must be a final judgment or order; (2) the court rendering the same
must have jurisdiction over the subject matter and over the parties; (3)
there must be a judgment or order on the merits; and (4) there must be
between the two cases Identity of parties, Identity of subject matter and
Identity of action. (Santos vs. San Gabriel, 45 SCRA, 288; Viray vs.
Mari;as 49 SCRA 44; Benin v. Tuason, 57 SCRA 531; Pacific
Commercial and Industrial Bank vs. Pfleider, 65 SCRA
13). +.wph!1
The doctrine of res judicata precludes parties from re-litigating issues
actually litigated and determined by a prior and final judgment. It is a
rule pervading every well-regulated system of jurisprudence, and is put
upon two grounds embodied in various maxims of the common law;
the one, public policy and necessity, which makes it to the interest of
the State that there should be an end to litigation the other the
hardship on the individual that he should be vexed twice for the same
cause. A contrary doctrine would subject the public peace and quiet to
the will and neglect of individuals and prefer the gratification of a
litigious disposition on the part of the suitors to the preservation of
public tranquillity and happiness. (Yusingco, et al., vs. Ong Lian, 42
SCRA 589)
Respondent court, however, went further, stating that "the trouble is
that plaintiff Felipe Capua has squarely raised the question of his own
title obtained thru acquisitive prescription; paragraph 6, complaint, and
it must have to be admitted that the property being unregistered,
ownership therein could be defeated by acquisitive prescription." The
Court held that "throughout the intervening period from 1943 to 1960,
or for a space of seventeen (17) years not Jose Maramba but Sabina
Capua and after the sale by Sabina to Gualberto on 21 April, 1950
under Exh. A afterwards Gualberto, were the ones in possession in the
concept of owner of the property, and as Gualberto in turn was
succeeded on 27 May, 1960 by herein plaintiff, Felipe Capua, pursuant
to the document Exh. C, and that possession was exclusive, adverse
and continuous, the said successive possession of, namely Sabina
Capua from 1943 to 1950, Gualberto Calulot from 1950 to 1960 and
Felipe Capua herein plaintiff from 1960 up to the institution of the
present case was enough to perfect a title of ownership.
We do not agree to this holding of the Court of Appeals.
1. In the first place, when Jose Maramba sued Sabina Capua on
September 8, 1944 in Civil Case No. 895, the possession of Sabina
Capua was thereby interrupted by the issuance of the judicial
summons (Article 1123, New Civil Code). During the pendency of the
litigation, from September 8, 1944 to September 1, 1952 when
judgment was rendered, or a period of eight (8) years, the possession
of Sabina Capua over the land did not run. It remained interrupted. The
land was in custodia legis. The fact that Sabina Capua sold the land on
April 21, 1950 during the pendency of the case to Gualberto Calulot
cannot revive or restore the possession of the vendor, which we repeat
was rendered interrupted by the judicial summons. The successor-in-
interest of Sabina Capua who is the vendee Gualberto Calulot cannot
tack his possession to that of his vendor Sabina Capua not only
because the judicial summons interrupted the latter's possession but
also because she finally lost in the litigation.
By reason of this interruption, it is not correct to say that the
intervening periods of 1943 to 1950 (the possession of Sabina Capua),
then from 1950 to 1960 (possession of Gualberto Calulot and from
1960 to 1963 (possession of Felipe Capua up to the institution of the
present suit) the possession was a continuing and uninterrupted
occupancy enough to perfect a title of ownership, because there was a
gap from 1944 to 1952 (interruption due to judicial summons up to the
termination of the litigation).
2. The New Civil Code of the Philippines took effect on August 30,
1950. At this point in time, the possession of Sabina Capua was not
running for it had been interrupted by the judicial summons in Civil
Case No. 895. Her possession of the land remained interrupted,
passive or suspended up to the date when the judgment was rendered
against her on September 1, 1952.
prevail over his adversary who has not done so. The rule of caveat
emptor requires the purchaser to be aware of the supposed title of the
vendor and he who buys without checking the vendor's title takes all
the risks and consequent to such failure. None of the deeds of sale
evidencing the ownership of Gualberto Calulot and Felipe Capua were
registered in the Registry of Property, hence they cannot prevail over
the rights of the petitioner who holds in his favor the instrument of sale
duly registered.
4. The Court has ignored or failed to consider material evidence found
in the records that disproves clearly and positively respondent Felipe
Capua's claim of acquisitive prescription, this evidence showing that
Felipe Capua's possession was not in truth and in fact in the concept of
owner during the required period of time. The deed of sale executed by
Sabina Capua to Gualberto Calulot (Exhibit A) describes the land sold
to be " at P240.00 under Tax No. 17426 for the current year," that is,
1950, the deed having been executed April 21, 1950. When the
spouses Gualberto Calulot and Olimpia Lomibao sold the same
property to Felipe Capua under Exhibit C, the land as described in the
deed still bears the same description as in Exhibit A, that is, 'assessed
at P240.00 under Tax No. 17426 for the current year." i.e. 1960 as the
deed was executed on May 27, 1960. The tax number of the lot in
1950 is the same tax number in 1960. The name of Sabina Capua as
the declared owner remained from 1950 to 1964. The tax receipts,
Exhibits F-1, F-2, F-3, F-4, showed that Sabina Capua was the
declared owner. In other words, Gualberto Calulot had not declared the
land in his own name for tax purposes. He had not sought the
cancellation of the tax declaration in the name of Sabina Capua to him
as the vendee, hence the inevitable conclusion is that said Gualberto
Calulot did not deem himself the owner thereof and, therefore, his
possession was not in the concept of owner. This being so, Calulot's
occupancy failed in one essential requisite of acquisitive prescription,
which is possession in the concept of owner. The same is true with
Felipe Capua. Although Gualberto Calulot paid taxes on the land for
the year in 1958, there is no evidence that he paid taxes in his name or
that he paid taxes any other year before or after 1958.
The claim of the respondents based on acquisitive prescription is,
therefore, without merit. What remains, therefore, is the sole question
of ownership which as respondent court itself held - if respondents'
claim of acquisitive prescription is defeated - must unquestionably be
rendered in favor of petitioner Jose Maramba and his co-petitioners by
right of res judicata. (Supra at p. 4)
WHEREFORE, the judgment of the respondent Court of Appeals is
hereby reversed and the decision of the Court of First Instance of
Pangasinan in Civil Case No. 1455 affirmed, with costs against the
respondents.
Petition granted.
SO ORDERED.

We hold that the vendee Gualberto Calulot cannot legally acquire

possession during the pendency of the litigation; it can only commence
after the decision is rendered therein, which was promulgated on
September 1, 1952. By this time, the New Civil Code was already
enforced and the possession of Gualberto Calulot including its legal
effects must be governed by the New Civil Code. Under Article 1131
and 1128, N.C.C. good faith and just title are necessary for ordinary
prescription of real property.

When possession of the property was taken from Felipe Capua and
given to Jose Maramba by the Provincial Sheriff on October 4, 1960 by
virtue of a writ of possession issued by the court in Civil Case No. 895,
Felipe Capua became aware or came to know that there existed a flaw
in his title or mode of acquisition. Felipe Capua may have acquired the
land in good faith on May 27, 1960 when he bought the property from
Gualberto Calulot but his eviction therefrom thru the writ of possession,
although later annulled in January, 1961, made him aware that he
possessed the land improperly or wrongfully. Consequently, Felipe
Capua cannot claim good faith as to ripe his possession to acquisitive
prescription.

3. The facts are also undisputed that the deed of sale executed
between Jose Maramba as vendee and Emiliana Abad as vendor in
1958 was duly registered in the Registry of Deeds as well as the deed
of sale executed in 1929 between Emiliana Abad and the original
owner Florentino Quinajon. Under the law, Article 709 of the New Civil
Code, titles of ownership or of other rights over immovable property
duly inscribed or annotated in the Registry of Property constitute notice
to third persons and affords protection in favor of him who in good faith
relies upon what appears in the registry. As between two parties
relying on their respective instruments of sale of the same property,
law and justice command that he who has registered his deed must
G.R. No. 138660 February 5, 2004
HEIRS OF TRINIDAD DE LEON VDA. DE ROXAS, petitioners
vs.
COURT OF APPEALS and MAGUESUN MANAGEMENT AND
DEVELOPMENT CORPORATION, respondents.
DECISION
CARPIO, J.:
The Case
This is a petition to cite for indirect contempt the officers of
Meycauayan Central Realty Corporation ("Meycauayan") for defying
the final and executory Decision and Resolution of this Court in G.R.
No. 118436 entitled "Heirs of Manuel A. Roxas and Trinidad de Leon
Vda. De Roxas v. Court of Appeals and Maguesun Management &
Development Corporation" ("G.R. No. 118436").1
The Antecedents
This petition stems from a case filed by Trinidad de Leon Vda. De
Roxas to set aside the decree of registration over two unregistered
parcels of land in Tagaytay City granted to Maguesun Management
and Development Corporation ("Maguesun") before the Regional Trial
Court on the ground of actual fraud. The trial court dismissed the
petition to set aside the decree of registration. On appeal, the Court of
Appeals denied the petition for review and affirmed the findings of the
trial court. On 21 March 1997, this Court reversed the appellate court's
decision in G.R. No. 118436. The dispositive portion reads:
WHEREFORE, the instant petition is hereby GRANTED. The Decision
of the Court of Appeals in C.A. G.R. CV No. 38328 ("Trinidad de Leon
Vda. de Roxas v. Maguesun Management & Development
Corporation, et al.") promulgated on December 8, 1994 is hereby
REVERSED AND SET ASIDE. Accordingly, registration of title over the
subject parcels of land, described in Plan AS-04-000108, Lot Nos.
7231 and 7239, with an area of 3,461 and 10,674 square meters,
respectively, as shown and supported by the corresponding technical
descriptions now forming part of the Records of LRC No. TG-373, is
awarded to herein petitioner Trinidad de Leon vda. de Roxas and her
heirs, herein substituted as petitioners. Upon finality of this Decision,
the Land Registration Authority is hereby directed to ISSUE with
reasonable dispatch the corresponding decree of registration and
certificate of title pursuant to Section 39 of Presidential Decree No.
1529.2
On 22 May 1997, Meycauayan filed a Petition for Intervention in G.R.
No. 118436. Meycauayan alleged that on 14 May 1992, it purchased
three parcels of land from Maguesun which form part of the property
awarded to the heirs of Trinidad de Leon Vda. De Roxas ("Roxas
heirs"). Meycauayan contended that since it is a purchaser in good
faith and for value, the Court should afford it the opportunity to be
heard. Meycauayan contends that the adverse decision in G.R. No.
118436 cannot impair its rights as a purchaser in good faith and for
value.
On 25 June 1997, this Court denied the Petition for Intervention. This
Court also denied the Motion for Reconsideration filed by Maguesun.
Thus, on 21 August 1997, the Decision dated 21 March 1997 in G.R.
No. 118436 became final and executory.
On 13 April 1998, the Land Registration Authority ("LRA") submitted a
Report to the Regional Trial Court of Tagaytay City, Branch 18 ("land
registration court"), in LR Case No. TG-373, praying that the land
registration court:
a) Order the LRA to cancel Decree No. N-197092 in the name of
Maguesun to enable it to issue another decree in favor of the heirs of
Manuel A. Roxas and Trinidad de Leon Vda. de Roxas;
b) Order the Register of Deeds to cancel OCT No. 0-515 and all its
derivative titles; and
c) Order the issuance of the Decree with respect to the decision of the
Supreme Court dated 21 March 1997.
Meycauayan filed with the land registration court a "Motion For Leave
To Intervene And For Period Of Time To File Opposition To The
Report Dated March 25, 1998 Filed By The LRA And To File
Complaint-in-Intervention."
On 4 June 1998, the Roxas heirs filed a Motion for Clarification with
this Court raising the following issues:
a) Whether it is necessary for the trial court to first order the LRA "to
cancel Decree No. N-197092 in the name of Maguesun Management
and Development Corporation to enable (the LRA) to issue another
decree in favor of the Heirs of Manuel A. Roxas and Trinidad de Leon
Vda. de Roxas"? Or is that order necessarily included in the dispositive
portion of the Supreme Court decision directing the LRA "to issue with
reasonable dispatch the corresponding decree of registration and
certificate of title" in favor of the Roxas heirs? Please note that this
necessary implication is a consequence of the Supreme Court finding
that the decree in favor of Maguesun was wrongfully issued because it
was "not entitled to the registration decree" as it had no registrable
title, since "Zenaida Melliza (from whom Maguesun supposedly bought
the lots) conveyed no title over the subject parcels of land to
Maguesun Corporation as she was not the owner thereof."
b) Whether an order from the trial court is necessary for "the Register
of Deeds concerned to cancel OCT No. 0-515 and all its derivative
titles"? Or is that order necessarily included in the dispositive portion of
the Supreme Court decision directing the LRA to issue the
corresponding decree of registration and certificate of title in favor of
the Roxas heirs, considering that the original certificate of title issued
to Maguesun was basedon an illegal decree of registration as found by
this Honorable Court. Further, the unconditional order of the Supreme
Court to LRA to issue the corresponding certificate of title to the Roxas
heirs necessarily implies that the OCT issued to Maguesun and its
derivative titles shall be canceled, for it cannot [be] assumed that the
Supreme Court intended that the same parcel of land shall be covered
by more than one certificate of title.
c) Whether an order from the trial court is necessary before the LRA
can comply with the Supreme Court decision directing the LRA "to
issue with reasonable dispatch the corresponding decree of
registration and certificate of title" in favor of the Roxas heirs?
On 23 June 1998, the Roxas heirs filed a Supplement to Motion for
Clarification, the pertinent portions of which are:
1. In petitioners' Motion for Clarification, one of the items sought to be
clarified is whether the derivative titles (i.e., the titles derived from
Maguesun Management and Development Corporation's ["Maguesun"]
Original Certificate of Title No. 0-515 and issued to Meycauayan
Central Realty Corp.) should be canceled, together with Maguesun's
certificates of title, so that new decree of registration and certificate of
title can be issued to petitioners, as ordered in the decision of this
Honorable Court dated 21 March 1997, which has become final and
executory?
2. From the Petition for Intervention filed by Meycauayan Central
Realty Corporation ("Meycauayan") with this Honorable Court on 22
May 1997, the following statements, among others, are alleged:
a. "That on May 14, 1992, the intervenor purchased for value several
parcels of real property from private respondent Maguesun
Management and Development Corp. covered by TCT Nos. 24294,
24295 and 24296 containing an area of 2,019 square meters each,
more or less."
b. "That prior to paying the agreed purchase price in full to respondent
Maguesun, an investigation with the Tagaytay City Office of the
Register of Deeds was made to determine and ascertain the
authenticity, status and condition of the titles of Maguesun over the
aforesaid properties."
c. "That investigation made by the intervenor with the Office of Register
of Deeds of Tagaytay City showed that in all the certified true copies of
the titles to the properties above-mentioned which were registered in
the name of Maguesun, the last entry which appeared was the
following, to wit: x x x".
d. "Appearing that the properties to be purchased by the herein
intervenor from respondent Maguesun have no existing liens and/or
encumbrances and considering that the properties do not appear to be
the subject of a pending case which would affect the titles of those who
may subsequently purchase the same, the herein intervenor
proceeded to pay, in full, the total amount of ONE MILLION FIVE
HUNDRED THOUSAND PESOS (1,500,000.00) to Maguesun.
Immediately thereafter, Maguesun, through its duly authorized officer,
executed the corresponding Deeds of Absolute Sale."
e. "That after the corresponding taxes and/or fees were paid by herein
intervenor, the aforementioned TCT Nos. T-24294, 24295 and 24296,
were canceled and in lieu thereof, new titles in the name of intervenor
were issued by the Register of Deeds of Tagaytay City."
f. "That on March 25, 1997, an officer of the intervenor corporation was
informed of a newspaper report stating, in big bold letters, the following
sub-headline, to wit:
SC RULES ON ROXAS FAMILY
LAND ROW IN TAGAYTAY".
g. "The President of herein intervenor right after secured from the
Tagaytay City Office of the Register of Deeds certified true copies of
torrens titles over its Tagaytay City properties."
h. "That only then, after it secured certified true copies of the titles
mentioned in the preceding paragraph from the Office of the Register
of Deeds of Tagaytay City, did intervenor come to know of the
existence of a case involving the properties sold to it by respondent
Maguesun on May 14, 1992."
3. Meycauayan's Petition for Intervention was denied by this Honorable
Court in its Resolution dated 25 June 1997, a denial that has since
become final and executory. However, as stated in petitioners' Motion
for Clarification, Meycauayan committed the proscribed act of forum-
shopping by filing with the trial court a motion for leave to intervene
raising again the issue of its alleged ownership of portions of the land.
4. In order to settle once and for all Meycauayan's allegation that it was
a buyer in good faith, and to show that its derivative titles should be
declared void and canceled by this Honorable Court, petitioners will
show herein that the sale to Meycauayan was spurious or, at the very
least, it was a buyer in bad faith.
In a Resolution dated 29 July 1998, this Court acted favorably on the
Roxas heirs' Motion for Clarification and its Supplement. The pertinent
portions of the Resolution read:
Upon careful consideration of the points made by petitioners in their
motions, this Court finds the same meritorious and, hence, a
clarification is in order. We, therefore, declare that our directive on the
LRA to issue with reasonable dispatch the corresponding decree of
registration and certificate of title also includes, as part thereof, the
cancellation, without need of an order of the land registration court, of
Decree No. N-197092, as well as OCT No. 0-515, and all its derivative
titles. This is a necessary consequence of the Court's earlier finding
that the foregoing documents were illegally issued in the name of
respondent. But in light of Section 39 of Presidential Decree No. 1529
(the "Property Registration Decree"), Decree No. N-197092 which
originated from the LRA must be cancelled by the LRA itself. On
account of this cancellation, it is now incumbent upon the LRA to issue
in lieu of the cancelled decree a new one in the name of petitioners as
well as the corresponding original certificate of title. Cancellation of
OCT No. 0-515, on the other hand, properly devolves upon the
Register of Deeds who, under Section 40 of P.D. No. 1529, has earlier
entered a copy thereof in his record book. OCT No. 0-515 having been
nullified, all titles derived therefrom must also be considered void it
appearing that there had been no intervening rights of an innocent
purchaser for value involving the lots in dispute.
ACCORDINGLY, the Court hereby resolves to GRANT petitioners'
Motion for Clarification together with the Supplement thereto. For this
reason, the dispositive portion of our decision dated March 21, 1997 is
clarified, thus:
First, the Register of Deeds shall CANCEL OCT No. 0-515 and all its
derivative titles, namely, TCT Nos. T-25625, T-25626, T-25627, T-
25628, T-25688, T-25689, and T-25690, the latter three being already
in the name of Meycauayan Realty and Development Corporation (also
designated as "Meycauayan Central Realty, Inc." and "Meycauayan
Realty Corporation").
Thereafter, the Land Registration Authority shall:
(a) CANCEL Decree No. N-197092 originally issued in the name of
Maguesun Management and Development Corporation without need of
an order from the land registration court; and
(b) ISSUE with reasonable dispatch a new decree of registration and a
new original certificate of title (OCT) in favor of petitioners pursuant to
Section 39 of Presidential Decree No. 1529. (Emphasis added)
On 11 December 1998, the land registration court issued an order
denying the LRA Report dated 25 March 1998 and the Motion for
Leave to Intervene filed by Meycauayan since the Supreme Court
Resolution of 29 July 1998 had rendered them moot.
The Register of Deeds of Tagaytay City then canceled TCT Nos. T-
25626, T-25627, T-25628, T-25688, T-25689, T-25690 and T-
27390.3 TCT Nos. T-25688, T-25689, T-25690 and T-27390 were
derivative titles already in the name of Meycauayan.
On 5 April 1999, the Roxas heirs filed a Motion for Issuance of Writ of
Possession with the land registration court.
On 20 April 1999, Meycauayan filed a Complaint for reconveyance,
damages and quieting of title with the trial court entitled "Meycauayan
Central Realty Corp. v. Heirs of Manuel A. Roxas and Trinidad de Leon
Vda. de Roxas, Maguesun Management and Development Corp.,
Register of Deeds of Tagaytay City, City Assessor of Tagaytay City
and Land Registration Authority."4 The Complaint is almost an exact
reproduction of the Petition for Intervention filed by Meycauayan before
this Court. The Complaint prayed for judgment:
1. Ordering the defendants Land Registration Authority and the
Register of Deeds of Tagaytay City to cancel the titles and decree of
registration they issued in lieu of TCT Nos. 25688, 25689, 25690 and
27390 registered in the name of plaintiff Meycauayan Central Realty
Corporation and reconvey said properties to the plaintiff corporation by
reinstating the said cancelled titles or if the same not be possible,
cause the issuance of new decrees and titles thereto;
2. Ordering the defendant City Assessor of Tagaytay City to reinstate
the Assessments for real estate taxes it previously cancelled covering
the properties of plaintiff;
3. Ordering the defendants Roxas and Maguesun to jointly and
solidarily pay the plaintiff actual and/or compensatory damages in the
total amount of FIVE HUNDRED THOUSAND PESOS (500,000.00);
4. Ordering the defendants Roxas and Maguesun to jointly and
solidarily pay the plaintiff the amount of TWO HUNDRED THOUSAND
PESOS (200,000.00) as and by way of nominal damages;
5. Ordering the defendants Roxas and Maguesun to jointly and
solidarily pay the plaintiff exemplary damages in the amount of TWO
HUNDRED THOUSAND PESOS (200,000.00);
6. Ordering the defendants Roxas and Maguesun to jointly and
solidarily pay the plaintiff Attorney's fees in the amount of ONE
HUNDRED THOUSAND PESOS (100,000.00); and
7. Ordering the defendants Roxas and Maguesun to jointly and
solidarily pay the plaintiff the costs of suit.5
On 6 May 1999, Meycauayan filed a "Special Appearance Questioning
Court Jurisdiction and Opposition to the Motion for Issuance of Writ of
Possession Against Meycauayan Central Realty Corporation" with the
land registration court.
On 2 September 1999, the land registration court issued an order, the
dispositive portion of which reads:
WHEREFORE, in the light of the foregoing, let a Writ of Possession be
issued against Maguesun Management and Development Corporation
in these cases. However, insofar as Meycauayan Central Realty is
concerned, let a resolution of the motion filed by the movants herein be
deferred until the Supreme Court had resolved with finality the petition
for contempt of herein movant in G.R. No. 138660.
On 7 March 2000, the trial court dismissed for lack of merit
Meycauayan's complaint for reconveyance, damages and quieting of
title. The trial court held that (1) the nullity of OCT No. 0-515, which is
the source of Meycauayan's titles, is now res judicata; (2) the
complaint's prayer for the trial court to annul the decision of the
Supreme Court in G.R. No. 118436 is beyond the trial court's
jurisdiction; and (3) Meycauayan is guilty of forum shopping. 6 The trial
court likewise denied Meycauayan's Motion for Reconsideration in an
Order dated 20 June 2000.7 On 24 August 2000, Meycauayan filed a
petition for certiorari under Rule 65 of the Rules of Court with the Court
of Appeals assailing the trial court's dismissal of the complaint.
Meanwhile, the Roxas heirs filed on 2 June 1999 this petition to cite for
indirect contempt the officers of Meycauayan.
The Issues
The parties raised the following issues:
1. Whether this Court's Decision and Resolution in G.R. No. 118436
bind Meycauayan;
2. Whether Meycauayan's act of filing with the trial court a complaint
for reconveyance, damages and quieting of title involving parcels of
land, which were the subject of this Court's Decision and Resolution in
G.R. No. 118436, constitutes indirect contempt under Section 3, Rule
71 of the Rules of Civil Procedure; and
3. Whether Meycauayan is guilty of forum shopping.
The Court's Ruling
The petition is meritorious. We find Meycauayan's Executive Vice-
President Juan M. Lamson, Jr. guilty of indirect contempt. We also find
that Meycauayan committed forum shopping, and thus Meycauayan
and its Executive Vice President Juan M. Lamson, Jr. are guilty of
direct contempt.
The Roxas heirs allege that the following acts of Meycauayan
constitute indirect contempt under Section 3, Rule 71 of the Rules of
Civil Procedure: (1)Meycauayan's defiance of the final and executory
Decision and Resolution of this Court in G.R. No. 118436; (2) its act of
filing pleadings before the land registration court to prevent execution
of the Decision and Resolution; (3) its act of filing a Complaint raising
the same issues in its Petition for Intervention which this Court had
already denied and urging the trial court to ignore and countermand
the orders of this Court.
On the other hand, Meycauayan alleges that the Decision in G.R. No.
118436 does not bind Meycauayan because it was not a party in the
case. According to Meycauayan, the Decision in G.R. No. 118436 may
be enforced against Maguesun but not against Meycauayan which is a
stranger to the case. Meycauayan insists that as a purchaser in good
faith and for value its rights cannot be prejudiced by the alleged
fraudulent acquisition by Maguesun of the subject properties.
Meycauayan, therefore, is not liable for contempt of court for filing an
action for reconveyance, quieting of title and damages.
The issue of whether the Decision in G.R. No. 118436 binds
Meycauayan was already addressed by this Court when it denied
Meycauayan's Petition for Intervention. Furthermore, this Court's
Resolution dated 29 July 1998 clarified the Decision dated 21 March
1997 by ordering the Register of Deeds to CANCEL OCT No. 0-515
and all its derivative titles, namely, TCT Nos. T-25625, T-25626, T-
25627, T-25628, T-25688, T-25689, and T-25690, the latter three
already in the name of Meycauayan Realty and Development
Corporation (also designated as "Meycauayan Central Realty, Inc."
and "Meycauayan Realty Corporation"). This Court also found that
there had been no intervening rights of an innocent purchaser for value
involving the lots in dispute.
Indirect Contempt
Meycauayan's obstinate refusal to abide by the Court's Decision in
G.R. No. 118436 has no basis in view of this Court's clear
pronouncement to the contrary. The fact that this Court specifically
ordered the cancelation of Meycauayan's titles to the disputed parcels
of land in the Resolution dated 29 July 1998 should have laid to rest
the issue of whether the Decision and Resolution in G.R. No. 118436
is binding on Meycauayan. Clearly, Meycauayan's defiance of this
Court's Decision and Resolution by filing an action for reconveyance,
quieting of title and damages involving the same parcels of land which
this Court already decided with finality constitutes indirect contempt
under Section 3(d), Rule 71 of the Rules of Civil Procedure. Section
3(d) of Rule 71 reads:
SEC. 3. Indirect contempt to be punished after charge and hearing. -
After a charge in writing has been filed, and an opportunity given to the
respondent to comment thereon within such period as may be fixed by
the court and to be heard by himself or counsel, a person guilty of any
of the following acts may be punished for indirect contempt:
xxx
(d) Any improper conduct tending, directly or indirectly, to impede,
obstruct, or degrade the administration of justice;
In Halili, et al. v. CIR, et al.,8 this Court explained the concept of
contempt of court:
Contempt of court is a defiance of the authority, justice or dignity of the
court; such conduct as tends to bring the authority and administration
of the law into disrespect or to interfere with or prejudice parties litigant
or their witnesses during litigation (12 Am. Jur. 389, cited in 14 SCRA
813).
Contempt of court is defined as a disobedience to the Court by acting
in opposition to its authority, justice and dignity. It signifies not only a
willful disregard or disobedience of the court's orders, but such conduct
as tends to bring the authority of the court and the administration of law
into disrepute or in some manner to impede the due administration of
justice (17 C.J.S. 4).
This Court has thus repeatedly declared that the power to punish for
contempt is inherent in all courts and is essential to the preservation of
order in judicial proceedings and to the enforcement of judgments,
orders, and mandates of the court, and consequently, to the due
administration of justice (Slade Perkins vs. Director of Prisons, 58 Phil.
271; In re Kelly, 35 Phil. 944; Commissioner of Immigration vs.
Cloribel, 20 SCRA 1241; Montalban vs. Canonoy, 38 SCRA 1).
Meycauayan's continuing resistance to this Court's judgment is an
affront to the Court and to the sovereign dignity with which it is
clothed.9 Meycauayan's persistent attempts to raise issues long since
laid to rest by a final and executory judgment of no less than the
highest tribunal of the land constitute contumacious defiance of the
authority of this Court and impede the speedy administration of
justice.10
Well-settled is the rule that when a court of competent jurisdiction has
tried and decided a right or fact, so long as the decision remains
unreversed, it is conclusive on the parties and those in privity with
them.11 More so where the Supreme Court has already decided the
issue since the Court is the final arbiter of all justiciable controversies
properly brought before it.12 As held in Buaya v. Stronghold Insurance
Co., Inc.:13
x x x An existing final judgment or decree - rendered upon the merits,
without fraud or collusion, by a court of competent jurisdiction acting
upon a matter within its authority - is conclusive of the rights of the
parties and their privies. This ruling holds in all other actions or suits, in
the same or any other judicial tribunal of concurrent jurisdiction,
touching on the points or matters in issue in the first suit.
xxx
Courts will simply refuse to reopen what has been decided. They will
not allow the same parties or their privies to litigate anew a question,
once it has been considered and decided with finality. Litigations must
end and terminate sometime and somewhere. The effective and
efficient administration of justice requires that once a judgment has
become final, the prevailing party should not be deprived of the fruits of
the verdict by subsequent suits on the same issues filed by the same
parties.
This is in accordance with the doctrine of res judicata which has the
following elements: (1) the former judgment must be final; (2) the court
which rendered it had jurisdiction over the subject matter and the
parties; (3) the judgment must be on the merits; and (4) there must be
between the first and the second actions, identity of parties, subject
matter and causes of action.14 The application of the doctrine of res
judicata does not require absolute identity of parties but merely
substantial identity of parties.15 There is substantial identity of parties
when there is community of interest or privity of interest between a
party in the first and a party in the second case even if the first case
did not implead the latter.16
The Court ruled in G.R. No. 118436 that Meycauayan's predecessor-
in-interest, Maguesun, committed actual fraud in obtaining the decree
of registration of the subject properties. The Decision in G.R. No.
118436 binds Meycauayan under the principle of "privity of interest"
since it was a successor-in-interest of Maguesun. Meycauayan,
however, insists that it was a purchaser in good faith because it had no
knowledge of any pending case involving the lots. Meycauayan claims
that the trial court had already canceled the notice of lis pendens on
the titles when it purchased the lots from Maguesun. In its
Memorandum, Meycauayan stresses that to ensure the authenticity of
the titles and the annotations appearing on the titles, particularly the
cancelation of the notice of lis pendens, Meycauayan checked with the
Register of Deeds and the Regional Trial Court of Tagaytay
City.17 Since Meycauayan checked with the Regional Trial Court of
Tagaytay City, Meycauayan then had actual knowledge, before it
purchased the lots, of the pending case involving the lots despite the
cancelation of the notice of lis pendens on the titles.
Furthermore, as found by this Court in G.R. No. 118436, the Roxas
family has been in possession of the property uninterruptedly through
their caretaker, Jose Ramirez, who resided on the property.18 Where
the land sold is in the possession of a person other than the vendor,
the purchaser must go beyond the certificates of title and make
inquiries concerning the rights of the actual possessor. 19 Meycauayan
therefore cannot invoke the right of a purchaser in good faith and could
not have acquired a better right than its predecessor-in-interest. This
Court has already rejected Meycauayan's claim that it was a purchaser
in good faith when it ruled in G.R. No. 118436 that there had been no
intervening rights of an innocent purchaser for value involving the lots
in dispute. As held in Heirs of Pael v. Court of Appeals:20
In the case of Santiago Land Development Corporation vs. Court of
Appeals (G.R. No. 106194, 276 SCRA 674 [1997]), petitioner
maintained that as a purchaser pendente lite of the land in litigation, it
had a right to intervene under Rule 12, Section 2. We rejected this
position and said that "since petitioner is not a stranger to the action against a Regional Trial Court or a court of equivalent or higher rank.
between Quisumbing and the PNB, petitioner in fact having stepped Hence, Meycauayan30 and its Executive Vice President Juan M.
into the shoes of PNB in a manner of speaking, it follows that it cannot Lamson, Jr. are each fined 2,000 for direct contempt of court for
claim any further right to intervene in the action." As in the instant forum shopping.
Petition, it was argued that the denial of the Motion to Intervene would
be a denial likewise of due process. But this, too, was struck down in
WHEREFORE, we find Meycauayan Central Realty Corporation's
Santiago Land where we held that "petitioner is not really denied
Executive Vice President Juan M. Lamson, Jr. GUILTY of INDIRECT
protection. It is represented in the action by its predecessor in interest."
CONTEMPT and FINE him TEN THOUSAND PESOS (10,000).
Indeed, since petitioner is a transferee pendente lite with notice of the
Furthermore, we find Meycauayan Central Realty Corporation and its
pending litigation between Reyes and private respondent Carreon,
Executive Vice President Juan M. Lamson, Jr. GUILTY of DIRECT
petitioner stands exactly in the shoes of Reyes and is bound by any
CONTEMPT for forum shopping and FINE them TWO THOUSAND
judgment or decree which may be rendered for or against the latter.
PESOS (2,000) each. The Court warns them that a repetition of the
same or similar offense shall merit a more severe penalty.
Indeed, one who buys property with full knowledge of the flaws and
defects of the title of his vendor and of a pending litigation over the
SO ORDERED.
property gambles on the result of the litigation and is bound by the
outcome of his indifference.21 A purchaser cannot close his eyes to
facts which should put a reasonable man on guard and then claim that
he acted in good faith believing that there was no defect in the title of
the vendor.22

For the penalty for indirect contempt, Section 7 of Rule 71 of the Rules
of Court provides:

SEC. 7. Punishment for indirect contempt. - If the respondent is

adjudged guilty of indirect contempt committed against a Regional Trial
Court or a court of equivalent or higher rank, he may be punished by a
fine not exceeding thirty thousand pesos or imprisonment not
exceeding six (6) months or both. x x x

In this case, Meycauayan Executive Vice President Juan M. Lamson,

Jr. caused the preparation and the filing of the Petition for Intervention
in G.R. No. 118436 and the Complaint for Reconveyance, Damages
and Quieting of Title with the trial court.23 Juan M. Lamson, Jr. signed
the verification and certification of non-forum shopping for the Petition
for Intervention and the Complaint for Reconveyance, Damages and
Quieting of Title. "Even though a judgment, decree, or order is
addressed to the corporation only, the officers, as well as the
corporation itself, may be punished for contempt for disobedience to its
terms, at least if they knowingly disobey the court's mandate, since a
lawful judicial command to a corporation is in effect a command to the
officers."24 Thus, for improper conduct tending to impede the orderly
administration of justice, Meycauayan Executive Vice President Juan
M. Lamson, Jr. should be fined ten thousand pesos (10,000). 25

Direct Contempt

Meycauayan's act of filing a Complaint for Reconveyance, Quieting of

Title and Damages raising the same issues in its Petition for
Intervention, which this Court had already denied, also constitutes
forum shopping. Forum shopping is the act of a party against whom an
adverse judgment has been rendered in one forum, seeking another
and possibly favorable opinion in another forum other than by appeal
or special civil action of certiorari. There is also forum shopping when a
party institutes two or more actions based on the same cause on the
expectation that one or the other court might look with favor on the
party.26

In this case, the Court had already rejected Meycauayan's claim on the
subject lots when the Court denied Meycauayan's Petition for
Intervention in G.R. No. 118436. The Court ruled that there had been
no intervening rights of an innocent purchaser for value involving the
lots in dispute. The Decision of this Court in G.R. No. 118436 is
already final and executory. The filing by Meycauayan of an action to
re-litigate the title to the same property, which this Court had already
adjudicated with finality, is an abuse of the court's processes and
constitutes direct contempt.

Section 5 of Rule 7 of the Rules of Court provides that "if the acts of
the party or his counsel clearly constitute willful and deliberate forum
shopping, the same shall be a ground for summary dismissal with
prejudice and shall constitute direct contempt, as well as a cause for
administrative sanctions." The fact that Meycauayan did mention in its
certification of non-forum shopping its attempt to intervene in G.R. No.
118436, which this Court denied,27does not negate the existence of
forum shopping. This disclosure does not exculpate Meycauayan for
deliberately seeking a friendlier forum for its case and re-litigating an
issue which this Court had already decided with finality.28

The general rule is that a corporation and its officers and agents may
be held liable for contempt. A corporation and those who are officially
responsible for the conduct of its affairs may be punished for contempt
in disobeying judgments, decrees, or orders of a court made in a case
within its jurisdiction.29

Under Section 1 of Rule 71 of the Rules of Court, direct contempt is

punishable by a fine not exceeding two thousand pesos (2,000) or
imprisonment not exceeding ten (10) days, or both, if committed
G.R. No. L-28740 February 24, 1981
FERMIN Z. CARAM, JR., petitioner,
vs.
CLARO L. LAURETA, respondent.
FERNANDEZ, J.:
This is a petition for certiorari to review the decision of the Court of
Appeals promulgated on January 29, 1968 in CA-G. R. NO. 35721-R
entitled "Claro L. Laureta, plaintiff-appellee versus Marcos Mata,
Codidi Mata and Fermin Caram, Jr., defendants- appellants; Tampino
(Mansaca), et al. Intervenors-appellants," affirming the decision of the
Court of First Instance of Davao in Civil Case No. 3083. 1
On June 25, 1959, Claro L. Laureta filed in the Court of First Instance
of Davao an action for nullity, recovery of ownership and/or
reconveyance with damages and attorney's fees against Marcos Mata,
Codidi Mata, Fermin Z. Caram, Jr. and the Register of Deeds of Davao
City. 2
On June 10, 1945, Marcos Mata conveyed a large tract of agricultural
land covered by Original Certificate of Title No. 3019 in favor of Claro
Laureta, plaintiff, the respondent herein. The deed of absolute sale in
favor of the plaintiff was not registered because it was not
acknowledged before a notary public or any other authorized officer. At
the time the sale was executed, there was no authorized officer before
whom the sale could be acknowledged inasmuch as the civil
government in Tagum, Davao was not as yet organized. However, the
defendant Marcos Mata delivered to Laureta the peaceful and lawful
possession of the premises of the land together with the pertinent
papers thereof such as the Owner's Duplicate Original Certificate of
Title No. 3019, sketch plan, tax declaration, tax receipts and other
papers related thereto. 3 Since June 10, 1945, the plaintiff Laureta had
been and is stin in continuous, adverse and notorious occupation of
said land, without being molested, disturbed or stopped by any of the
defendants or their representatives. In fact, Laureta had been paying
realty taxes due thereon and had introduced improvements worth not
less than P20,000.00 at the time of the filing of the complaint. 4
On May 5, 1947, the same land covered by Original Certificate of Title
No. 3019 was sold by Marcos Mata to defendant Fermin Z. Caram, Jr.,
petitioner herein. The deed of sale in favor of Caram was
acknowledged before Atty. Abelardo Aportadera. On May 22, 1947,
Marcos Mata, through Attys. Abelardo Aportadera and Gumercindo
Arcilla, filed with the Court of First Instance of Davao a petition for the
issuance of a new Owner's Duplicate of Original Certificate of Title No.
3019, alleging as ground therefor the loss of said title in the evacuation
place of defendant Marcos Mata in Magugpo, Tagum, Davao. On June
5, 1947, the Court of First Instance of Davao issued an order directing
the Register of Deeds of Davao to issue a new Owner's Duplicate
Certificate of Title No. 3019 in favor of Marcos Mata and declaring the
lost title as null and void. On December 9, 1947, the second sale
between Marcos Mata and Fermin Caram, Jr. was registered with the
Register of Deeds. On the same date, Transfer Certificate of Title No.
140 was issued in favor of Fermin Caram Jr. 5
On August 29, 1959, the defendants Marcos Mata and Codidi Mata
filed their answer with counterclaim admitting the existence of a private
absolute deed of sale of his only property in favor of Claro L. Laureta
but alleging that he signed the same as he was subjected to duress,
threat and intimidation for the plaintiff was the commanding officer of
the 10th division USFIP operating in the unoccupied areas of Northern
Davao with its headquarters at Project No. 7 (Km. 60, Davao Agusan
Highways), in the Municipality of Tagum, Province of Davao; that
Laureta's words and requests were laws; that although the defendant
Mata did not like to sell his property or sign the document without even
understanding the same, he was ordered to accept P650.00 Mindanao
Emergency notes; and that due to his fear of harm or danger that will
happen to him or to his family, if he refused he had no other alternative
but to sign the document. 6
The defendants Marcos Mata and Codidi Mata also admit the
existence of a record in the Registry of Deeds regarding a document
allegedly signed by him in favor of his co-defendant Fermin Caram, Jr.
but denies that he ever signed the document for he knew before hand
that he had signed a deed of sale in favor of the plaintiff and that the
plaintiff was in possession of the certificate of title; that if ever his
thumb mark appeared in the document purportedly alienating the
property to Fermin Caram, did his consent was obtained through fraud
and misrepresentation for the defendant Mata is illiterate and ignorant
and did not know what he was signing; and that he did not receive a
consideration for the said sale. 7
The defendant Fermin Caram Jr. filed his answer on October 23, 1959
alleging that he has no knowledge or information about the previous
encumbrances, transactions, and alienations in favor of plaintiff until
the filing of the complaints. 8
The trial court rendered a decision dated February 29, 1964, the
dispositive portion of which reads: 9
1. Declaring that the deed of sale, Exhibit A, executed by Marcos Mata
in favor of Claro L. Laureta stands and prevails over the deed of sale,
Exhibit F, in favor of Fermin Caram, Jr.;
2. Declaring as null and void the deed of sale Exhibit F, in favor of
Fermin Caram, Jr.;
3. Directing Marcos Mata to acknowledge the deed of sale, Exhibit A,
in favor of Claro L. Laureta;
4. Directing Claro L. Laureta to secure the approval of the Secretary of
Agriculture and Natural Resources on the deed, Exhibit A, after Marcos
Mata shall have acknowledged the same before a notary public;
5. Directing Claro L. Laureta to surrender to the Register of Deeds for
the City and Province of Davao the Owner's Duplicate of Original
Certificate of Title No. 3019 and the latter to cancel the same;
6. Ordering the Register of Deeds for the City and Province of Davao
to cancel Transfer Certificate of Title No. T-140 in the name of Fermin
Caram, Jr.;
7. Directing the Register of Deeds for the City and Province of Davao
to issue a title in favor of Claro L. Laureta, Filipino, resident of Quezon
City, upon presentation of the deed executed by Marcos Mata in his
favor, Exhibit A, duly acknowledged by him and approved by the
Secretary of Agriculture and Natural Resources, and
8. Dismissing the counterclaim and cross claim of Marcos Mata and
Codidi Mata, the counterclaim of Caram, Jr., the answer in
intervention, counterclaim and cross-claim of the Mansacas.
The Court makes no pronouncement as to costs.
SO ORDERED.
The defendants appealed from the judgment to the Court of
Appeals. 10 The appeal was docketed as CA-G.R. NO. 35721- R.
The Court of Appeals promulgated its decision on January 29, 1968
affirming the judgment of the trial court.
11
In his brief, the petitioner assigns the following errors:
I
THE RESPONDENT COURT OF APPEALS ERRED IN
CONCLUDING THAT IRESPE AND APORTADERA WERE
ATTORNEYS-IN-FACT OF PETITIONER CARAM FOR THE
PURPOSE OF BUYING THE PROPERTY IN QUESTION.
II
THE RESPONDENT COURT OF APPEALS ERRED IN
CONCLUDING THAT THE EVIDENCE ADDUCED IN THE TRIAL
COURT CONSTITUTE LEGAL EVIDENCE OF FRAUD ON THE
PART OF IRESPE AND APORTADERA AT TRIBUTABLE TO
PETITIONER.
III
THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE
ERROR OF LAW IN HOLDING THAT KNOWLEDGE OF IRESPE
AND APORTADERA OF A PRIOR UNREGISTERED SALE OF A
TITLED PROPERTY ATTRIBUTABLE TO PETITIONER AND
EQUIVALENT IN LAW OF REGISTRATION OF SAID SALE.
IV
THE RESPONDENT COURT OF APPEALS ERRED IN NOT
HOLDING THAT AN ACTION FOR RECONVEYANCE ON THE
GROUND OF FRAUD PRESCRIBES WITHIN FOUR (4) YEARS.
The petitioner assails the finding of the trial court that the second sale
of the property was made through his representatives, Pedro Irespe
and Atty. Abelardo Aportadera. He argues that Pedro Irespe was
acting merely as a broker or intermediary with the specific task and
duty to pay Marcos Mata the sum of P1,000.00 for the latter's property
and to see to it that the requisite deed of sale covering the purchase
was properly executed by Marcos Mata; that the Identity of the
property to be bought and the price of the purchase had already been
agreed upon by the parties; and that the other alleged representative,
Atty. Aportadera, merely acted as a notary public in the execution of
the deed of sale.
The contention of the petitioner has no merit. The facts of record show
that Mata, the vendor, and Caram, the second vendee had never met.
During the trial, Marcos Mata testified that he knows Atty. Aportadera
but did not know Caram. 12 Thus, the sale of the property could have
only been through Caram's representatives, Irespe and Aportadera.
The petitioner, in his answer, admitted that Atty. Aportadera acted as
his notary public and attorney-in-fact at the same time in the purchase
of the property. 13
The petitioner contends that he cannot be considered to have acted in
bad faith because there is no direct proof showing that Irespe and
Aportadera, his alleged agents, had knowledge of the first sale to
Laureta. This contention is also without merit.
The Court of Appeals, in affirming the decision of the trial court, said: 14
The trial court, in holding that appellant Caram. Jr. was not a purchaser
in good faith, at the time he bought the same property from appellant
Mata, on May 5, 1947, entirely discredited the testimony of Aportadera.
Thus it stated in its decision:
The testimony of Atty. Aportadera quoted elsewhere in this decision is
hollow. There is every reason to believe that Irespe and he had known
of the sale of the property in question to Laureta on the day Mata and
Irespe, accompanied by Leaning Mansaca, went to the office of Atty.
Aportadera for the sale of the same property to Caram, Jr.,
represented by Irespe as attorney-in-fact. Ining Mansaca was with the
two Irespe and Mata to engage the services 6f Atty. Aportadera
in the annulment of the sale of his land to Laureta. When Leaning
Mansaca narrated to Atty. Aportadera the circumstances under which
his property had been sold to Laureta, he must have included in the
narration the sale of the land of Mata, for the two properties had been
sold on the same occassion and under the same circumstances. Even
as early as immediately after liberation, Irespe, who was the witness in
most of the cases filed by Atty. Aportadera in his capacity as Provincial
Fiscal of Davao against Laureta, must have known of the purchases of
lands made by Laureta when he was regimental commander, one of
which was the sale made by Mata. It was not a mere coincidence that
Irespe was made guardian ad litem of Leaning Mansaca, at the
suggestion of Atty. Aportadera and attorney-in-fact of Caram, Jr.
The Court cannot help being convinced that Irespe, attorney-in-fact of
Caram, Jr. had knowledge of the prior existing transaction, Exhibit A,
between Mata and Laureta over the land, subject matter of this
litigation, when the deed, Exhibit F, was executed by Mata in favor of
Caram, Jr. And this knowledge has the effect of registration as to
Caram, Jr. RA pp. 123-124)
We agree with His Honor's conclusion on this particular point, on two
grounds the first, the same concerns matters affecting the credibility
of a witness of which the findings of the trial court command great
weight, and second, the same is borne out by the testimony of Atty.
Aportadera himself. (t.s.n., pp. 187-190, 213-215, Restauro).
Even if Irespe and Aportadera did not have actual knowledge of the
first sale, still their actions have not satisfied the requirement of good
faith. Bad faith is not based solely on the fact that a vendee had
knowledge of the defect or lack of title of his vendor. In the case of
Leung Yee vs. F. L. Strong Machinery Co. and Williamson, this Court
held: 15
One who purchases real estate with knowledge of a defect or lack of
title in his vendor can not claim that he has acquired title thereto in
good faith, as against the true owner of the land or of an interest
therein, and the same rule must be applied to one who has knowledge
of facts which should have put him upon such inquiry and investigation
as might be necessary to acquaint him with the defects in the title of
his vendor.
In the instant case, Irespe and Aportadera had knowledge of
circumstances which ought to have put them an inquiry. Both of them
knew that Mata's certificate of title together with other papers
pertaining to the land was taken by soldiers under the command of
Col. Claro L. Laureta. 16 Added to this is the fact that at the time of the
second sale Laureta was already in possession of the land. Irespe and
Aportadera should have investigated the nature of Laureta's
possession. If they failed to exercise the ordinary care expected of a
buyer of real estate they must suffer the consequences. The rule
of caveat emptor requires the purchaser to be aware of the supposed
title of the vendor and one who buys without checking the vendor's title
takes all the risks and losses consequent to such failure. 17
The principle that 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 18 should not
apply in this case. It was of common knowledge that at the time the
soldiers of Laureta took the documents from Mata, the civil government
of Tagum was not yet established and that there were no officials to
ratify contracts of sale and make them registerable. Obviously,
Aportadera and Irespe knew that even if Mata previously had sold t he
Disputed such sale could not have been registered.
There is no doubt then that Irespe and Aportadera, acting as agents of
Caram, purchased the property of Mata in bad faith. Applying the
principle of agency, Caram as principal, should also be deemed to
have acted in bad faith.
Article 1544 of the New Civil Code provides that:
Art. 1544. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who may
have first taken possession thereof in good faith, if it should be
movable property.
Should it be immovable property, the ownership shall belong to the
person acquiring it who in good faith first recordered it in the Registry
of Property.
Should there be no inscription, the ownership shag pertain to the
person who in good faith was first in the possession; and, in the
absence thereof, to the person who presents the oldest title, provided
there is good faith. (1473)
Since Caram was a registrant in bad faith, the situation is as if there
was no registration at all. 19
The question to be determined now is, who was first in possession in
good faith? A possessor in good faith is one who is not aware that
there exists in his title or mode of acquisition any flaw which invalidates
it. 20 Laureta was first in possession of the property. He is also a
possessor in good faith. It is true that Mata had alleged that the deed
of sale in favor of Laureta was procured by force. 21 Such defect,
however, was cured when, after the lapse of four years from the time
the intimidation ceased, Marcos Mata lost both his rights to file an
action for annulment or to set up nullity of the contract as a defense in
an action to enforce the same.
Anent the fourth error assigned, the petitioner contends that the
second deed of sale, Exhibit "F", is a voidable contract. Being a
voidable contract, the action for annulment of the same on the ground
of fraud must be brought within four (4) years from the discovery of the
fraud. In the case at bar, Laureta is deemed to have discovered that
the land in question has been sold to Caram to his prejudice on
December 9, 1947, when the Deed of Sale, Exhibit "F" was recorded
and entered in the Original Certificate of Title by the Register of Deeds
and a new Certificate of Title No. 140 was issued in the name of
Caram. Therefore, when the present case was filed on June 29, 1959,
plaintiff's cause of action had long prescribed.
The petitioner's conclusion that the second deed of sale, "Exhibit F", is
a voidable contract is not correct. I n order that fraud can be a ground
for the annulment of a contract, it must be employed prior to or
simultaneous to the, consent or creation of the contract. The fraud
or dolo causante must be that which determines or is the essential
cause of the contract. Dolo causante as a ground for the annulment of
contract is specifically described in Article 1338 of the New Civil Code
of the Philippines as "insidious words or machinations of one of the
contracting parties" which induced the other to enter into a contract,
and "without them, he would not have agreed to".
The second deed of sale in favor of Caram is not a voidable contract.
No evidence whatsoever was shown that through insidious words or
machinations, the representatives of Caram, Irespe and Aportadera
had induced Mata to enter into the contract.
Since the second deed of sale is not a voidable contract, Article 1391,
Civil Code of the Philippines which provides that the action for
annulment shall be brought within four (4) years from the time of the
discovery of fraud does not apply. Moreover, Laureta has been in
continuous possession of the land since he bought it in June 1945.
A more important reason why Laureta's action could not have
prescribed is that the second contract of sale, having been registered
in bad faith, is null and void. Article 1410 of the Civil Code of the
Philippines provides that any action or defense for the declaration of
the inexistence of a contract does not prescribe.
In a Memorandum of Authorities 22 submitted to this Court on March
13, 1978, the petitioner insists that the action of Laureta against Caram
has prescribed because the second contract of sale is not void under
Article 1409 23 of the Civil Code of the Philippines which enumerates
the kinds of contracts which are considered void. Moreover, Article
1544 of the New Civil Code of the Philippines does not declare void a
second sale of immovable registered in bad faith.

The fact that the second contract is not considered void under Article
1409 and that Article 1544 does not declare void a deed of sale
registered in bad faith does not mean that said contract is not void.
Article 1544 specifically provides who shall be the owner in case of a
double sale of an immovable property. To give full effect to this
provision, the status of the two contracts must be declared valid so that
one vendee may contract must be declared void to cut off all rights
which may arise from said contract. Otherwise, Article 1544 win be
meaningless.

The first sale in favor of Laureta prevails over the sale in favor of
Caram.

WHEREFORE, the petition is hereby denied and the decision of the

Court of Appeals sought to be reviewed is affirmed, without
pronouncement as to costs.

SO ORDERED.
G.R. Nos. 91383-84 May 31, 1991 On the other hand, San Jose filed in an apparent attempt to forestall
the extra-judicial foreclosure and public auction sale scheduled on
September 18, 1979, Civil Case No. 34489 on September 17, 1979
SOCORRO COSTA CRISOSTOMO, petitioner,
against respondent Torres. On January 9, 1980 both actions were
vs.
consolidated on motion of the parties and were jointly tried thereafter
COURT OF APPEALS and NORMA SAN JOSE, DIANA J.
(Ibid.).
TORRES, respondents.

In a decision dated March 31, 1986, the Regional Trial Court of Pasig,
PARAS, J.:
Branch CLIV (154) decided in favor of the petitioner, the dispositive
portion of which decision reads:
This is a petition for review on certiorari of the: (1) decision * of the
Court of Appeals dated July 31, 1989 in CA-G.R. CV Nos. 11816 and
WHEREFORE, judgment is hereby rendered against the defendants in
11817, entitled "Socorro Costa Crisostomo vs. Norma San Jose and
favor of the plaintiff as follows:
Diana Torres", which modified the decision of the Regional Trial Court,
Branch 154, Pasig, Metro Manila, and (2) resolution dated December
11, 1989, which denied the motion for reconsideration. In Civil Case No. 34356

As gathered from the records, the facts of the case are as follows: 1) The Deed of Absolute Sale executed by plaintiff over the property
covered by Transfer Certificate of Title No. 39286 of the Register of
Deeds of Pasig, Metro Manila, is hereby ordered rescinded;
Socorro Costa Crisostomo (Crisostomo for short) was the registered
owner of a residential house and lot known as Lot No. 6, Block 60,
located in Mandaluyong, Metro Manila and covered by Transfer 2) Transfer Certificate of Title No. 11835 of the Register of Deeds of
Certificate of Title No. 39286 of the Register of Deeds of Pasig. Pasig, Metro Manila, in the name of defendant Norma San Jose is
Crisostomo has occupied the property ever since she had the house hereby ordered cancelled;
built and has introduced other improvements thereon like fruit bearing
trees and ornamental plants (Rollo, Petition, p. 9).
3) Defendant Norma San Jose is hereby ordered to reconvey the title
covering subject property within twenty (20) days from the finality of
Sometime in 1978, Norma San Jose (San Jose for short) offered to this judgment;
buy the above-mentioned parcel of land including the house thereon
for the sum of P300,000.00 which amount was agreed upon to be paid
4) Defendants are also hereby ordered, jointly and severally, to pay
from the proceeds of a loan that was to be obtained by said
plaintiff (a) the amount of P100,000.00 representing moral damages,
respondent San Jose from a bank using petitioner Crisostomo's title as
(b) P20,000.00 as attorney's fees, and (c) the costs;
collateral. As payment, San Jose issued three (3) post dated Far East
Bank and Trust Company checks in the total amount of P300,000.00
(Ibid., p. 4). 5) As a consequence of the rescission of the sale, plaintiff is ordered to
return the amount of P20,000.00 which she received as earnest
money. However, this amount shall be off-set against the amount of
Crisostomo accepted the offer, lent her title to San Jose and on May
damages assessed against defendants;
17, 1978 executed a Deed of Absolute Sale in favor of San Jose
(Rollo, Petitioner's Memorandum, p. 106).
6) The Deed of Real Estate Mortgage executed by defendant Norma
San Jose in favor of defendant Diana Torres is hereby order (sic)
On May 22, 1978, Crisostomo, upon San Jose's request, executed
nullified. The Register of Deeds of Pasig, Metro Manila is authorized to
another deed of sale over the same property with the understanding
cancel the annotation of said mortgage on the title to be issued in favor
that said document was for the purpose of reducing San Jose's
of plaintiff.
registration fees and tax liabilities (Ibid.).

In Civil Case No. 34489

On May 26, 1978, San Jose registered the second deed of absolute
sale with the Registry of Deeds of Pasig. At the same time, Transfer
Certificate of Title No. 39286 was cancelled, and in its place, Transfer 1) Defendant Norma San Jose is hereby ordered to pay defendant
Certificate of Title No. 11835 was issued (Rollo, Petition, pp. 10-11). Diana Torres the amount of P100,000.00.

After Crisostomo got tired of San Jose's unfulfilled promises to make SO ORDERED. (Rollo, Annex "A", pp. 37-38).
good the postdated checks, the former decided to encash the
postdated checks after their maturity dates with Far East Bank and
Trust Company. Unfortunately, the same were all dishonored and Torres appealed the above-stated decision to the Court of Appeals
returned to Crisostomo with the notation of the Bank as "Account which modified the judgment of the trial court in a decision, the
dispositive portion of which reads as follows:
Closed." (Ibid.).

Upon inquiry by Crisostomo, San Jose replied that when her
application for a loan with a second bank, the Philippine Commercial
and Industrial Bank, was not approved, she shifted to Security Bank
and Trust Company. Soon enough, Crisostomo discovered that San
Jose's loan application was disapproved because the collateral was
insufficient for the amount of the loan she was borrowing (Ibid.).
WHEREFORE, the decision appealed from is hereby MODIFIED in
that the Deed of Real Estate Mortgage in favor of appellant Diana
Torres be noted on the Certificate of Title which is to be re-issued to
the appellee, and, appellant Diana Torres is hereby excluded from
indemnifying the appellee the amounts representing moral damages,
attorney's fees, and costs, but is AFFIRMED in all other respects.

SO ORDERED. (Rollo, Annex "A", p. 41).

For Crisostomo's protection, San Jose signed a written undertaking for
the forfeiture of the earnest money in the amount of P20,000.00 in
favor of herein petitioner with a certification that the title to the property Petitioner filed a motion for partial reconsideration of the appellate
will be returned within one (1) month after non-effectivity of its sale, court's decision but the same was denied in a Resolution dated
duly registered in petitioner's name. The aforementioned amount of December 11, 1989 (Rollo, Annex "B", p. 45).
P20,000.00 was the only payment Crisostomo ever received from San
Jose (Ibid.).
Hence, the petition.

Upon Crisostomo's insistence for the return of the title, San Jose
informed Crisostomo that the title was in the possession of Diana J. The Court in its resolution dated June 27, 1990 gave due course to the
Torres, the mortgagee (Rollo, Memorandum for Petitioner, p. 108). petition and required both parties to submit their respective
memoranda (Rollo, Resolution, p. 78).

San Jose never returned the said title as she had promised nor did she
ever make any payment to the petitioner (Ibid.). The only issue to be resolved in the instant case is whether or not
private respondent Diana Torres is a mortgagee in good faith.

Crisostomo made a written demand to Diana J. Torres (Torres for

short) to reconvey the subject property to her. This demand was not
satisfied (Ibid.).
Petitioner was thus compelled to file Civil Case No. 34356 on
September 3, 1979 against San Jose but this was later amended to
include Torres (Ibid.).
The petition is impressed with merit.
While it is settled that the jurisdiction of the Supreme Court in cases
brought to it from the Court of Appeals is limited to reviewing and
revising errors of law imputed to the latter, the findings of fact of the
Court of Appeals may be set aside, among others, on the following
grounds: ". . . (2) the inference made is manifestly mistaken; . . . (6) the A She claimed that that was the bank wherein she was borrowing her
findings of fact of the Court of Appeals are contrary to those of the trial loan.
court; . . .," (Tolentino vs. De Jesus, 56 SCRA 167 [1974]; Villamor vs.
Court of Appeals, 162 SCRA 574 [1988]; Layugan vs. Intermediate
Q In connection with that inspection supposed to be made, what was
Appellate Court, 167 SCRA 363 [1988]).
the purpose, if you know?

A careful study of the records shows that the Court of Appeals erred in
A To facilitate to (sic) processing, according to them." (T.S.N., pp. 16-
finding that private respondent Diana Torres is a mortgagee in good
17, Feb. 5, 1981)
faith on the basis of the evidence.

xxx xxx xxx

There are strong indications that Atty. Flor Martinez, the lawyer of
Diana J. Torres, the mortgagee, knew of the defect of San Jose's title.
On cross-examination of Atty. Flor Martinez by Atty. Beltran, she
stated:
Atty. Martinez is a close acquaintance of Norma San Jose, their long
relationship dating back to 1974 (Rollo, p. 60). When the subject
property was offered by San Jose as collateral for a loan, Atty. xxx xxx xxx
Martinez referred her to a client, Diana Torres. For her part, Torres
instructed and authorized Atty. Martinez to view and inspect the
property as well as to ascertain the genuineness and authenticity of Q But your visit of the premises was purposely for the benefit of this
Diana Torres, am I right?
San Jose's title (Hearing of October 6, 1989, TSN, p. 6; Rollo, p. 113).

While feigning ignorance of the owner of subject property, she A Of course, because she is my client.
admitted later on cross-examination that Socorro Crisostomo was the
owner from whom San Jose allegedly bought the property (Hearing of Q And so in that visit of yours, you saw the plaintiff here personally?
April 20, 1983, TSN, pp. 6-11).
A Yes, I saw her then.
Even more persuasive is the fact that when Atty. Martinez personally
inspected the property with San Jose for her client Torres, she allowed
herself to be introduced to Socorro Crisostomo who was then actually Q And you had a conversation with her?
occupying the house, as a Bank Inspector of the Development Bank
of Meycauayan, Bulacan from whom the loan was being obtained, A I had.
obviously to convince Crisostomo that the procedure is in accordance
with her agreement with San Jose.
xxx xxx xxx

Thus, petitioner Crisostomo and Atty. Flor Martinez testified as follows

in the trial court: Q Will you please tell the Honorable Court what was the main purpose
of your visit at the premises?

TESTIMONY OF PETITIONER SOCORRO COSTA CRISOSTOMO:

A As the lawyer of the prospective mortgagee, I was duty bound to
make a fair assessment as to whether the proposed collateral (sic)
Atty. Beltran commensurate to the amount applied for. In other words, it was in
connection with the mortgage.
Q Do you know Atty. Martinez here, have you ever met Atty. Martinez?
xxx xxx xxx
A I met her June 17, 1978.
Q And did you inquire from the plaintiff why was she there at the
Q Where did you meet Atty. Martinez? moment?

A She came at home that evening with Norma San Jose. A She was introduced to me as the Tia Coring.

Q Where were you when Atty. Martinez and Norma San Jose came to Q And from your conversation, did you come to know that the plaintiff
your house? here, Socorro Crisostomo, is the same Tia Coring whom she
mentioned to you she bought the property from? (Emphasis supplied)

A I was at home.
A Yes, the same Tia Coring who sold the property to her. (Emphasis
supplied)
Q Did you have any companion there?
xxx xxx xxx
A I was with my maid.
Q And under these circumstances, you never inquired from the plaintiff
Q Before that date, did you have occasion to meet Atty. Martinez? whom you personally saw why she was there in the property or until
when she would remain in that place? (Emphasis supplied)
A Yes. (sic) That was my first time to meet her.
A No, because it would be unethical to ask that question, she being the
Q Was there any introduction made to you? Tia Coring of (sic) the owner. (Emphasis supplied) (T.S.N., pp. 81-85,
April 28, 1983)

A She was introduced as a Bank Inspector of Private Development

Bank of Meycauayan, Bulacan. (Emphasis supplied) xxx xxx xxx

Q Who introduced her to you? Finally, when Torres herself visited the property she carefully evaded
seeing Crisostomo personally, the actual occupant thereof, who could
have easily enlightened her as to the true owner (Rollo, p. 116). Such
A Norma San Jose. unnatural behavior points more convincingly to the fact that she was
aware that San Jose was not its real owner.
Q You mean she was introduced to you to inspect that property in
question? In Philippine National Bank vs. Court of Appeals (153 SCRA 435
[1987]), the Supreme Court had the occasion to rule that a person
dealing with registered land has a right to rely upon the fact of the
A Yes.
Torrens Certificate of Title and to dispense with the need of inquiring
further, except when the party concerned has actual knowledge of
Q Why was that supposed inspection to be made on behalf of facts and circumstances that would impel a reasonably cautious man
the Meycauayan Bank? to make further inquiries (Gonzales vs. Intermediate Appellate Court,
157 SCRA 587 [1988]).
Even assuming that Torres does not in fact know the circumstances of
the sale, she is bound by the knowledge of Atty. Martinez or by the
latter's negligence in her haphazard investigation because the
negligence of her agents is her own negligence (PCIB vs. Villalva, 48
SCRA 37 [1972]).

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 (Leung Yee vs. Strong
Machinery Co., 37 Phil. 644; RFC vs. Javillonar,57 O.G. 39,
September 25, 1961; C.N. Hodges vs. Dy Buncio and Co., Inc., 116
Phil. 595; Manacop vs. Cansino, 61 O.G. 21, August 2, 1965, 1 SCRA
527; Gaticana vs. Gaffud, 27 SCRA 706 [1969]).

The appellate court, therefore, gravely erred in the appreciation of

evidence on the good faith of private respondent Diana
Torres.1wphi1 Consequently, because respondent Torres was not a
mortgagee in good faith, there is no sufficient basis for the appellate
court to order the notation of the Deed of Real Estate Mortgage in
favor of private respondent Diana Torres on the Certificate of title
which is to be re-issued to herein petitioner.

PREMISES CONSIDERED, the decision of the respondent appellate

court is REVERSED and SET ASIDE, and the decision of the trial court
is REINSTATED.

SO ORDERED.
G.R. No. 51457 June 27, 1994
LUCIA EMBRADO and ORESTE TORREGIANI, petitioners,
vs.
COURT OF APPEALS, PACIFICO CIMAFRANCA, MARCOS
SALIMBAGAT, EDA JIMENEZ and SANTIAGO
JIMENEZ, respondents.
BELLOSILLO, J.:
LUCIA EMBRADO and ORESTE TORREGIANI, spouses, filed this
petition for review on certiorari from the decision of respondent Court
of Appeals 1 upholding the validity of the Deed of Sale over Lot No. 564
executed by petitioner Lucia Embrado in favor of private respondent
Eda Jimenez.
Lot No. 564 is a 366-square meter lot situated in Dipolog City originally
owned by Juan, Pastor and Matias Carpitanos. On 2 July 1946,
a Venta Definitiva, a notarized document written entirely in Spanish,
was executed by the Carpitanos whereby they sold Lot No. 564 to
"Srta. LUCIA C. EMBRADO . . . soltera, con residencia y direccion
postal Municipio de Dipolog, Provincia de Zamboanga." 2 The
document provided that even though the deed was prepared and
signed on 2 July 1946, the effects of the document would retroact to
the 15th day of April 1941, the date the lot and its improvements were
actually sold to Lucia C. Embrado.
The sale was registered and Transfer Certificate of Title No. T-99 3 was
issued on 13 February 1948 in the name of Lucia Embrado alone, who
was by then already married to petitioner Oreste Torregiani since
1943. However, by virtue of a court order in Misc. Sp. Proc. No. 2330
of the then Court of First Instance of Zamboanga del Norte, the word
"single" appearing in TCT No. T-99 was canceled and replaced on 19
October 1970 by the phrase "married to Oreste Torregiani." The
Torregianis then made their conjugal abode on the lot and in 1958
constructed a residential/commercial building thereon. 4
As appearing from a document entitled Absolute Deed of Sale dated 1
May 1971 5, Lucia Embrado Torregiani sold Lot No. 564, described as
her "own paraphernal property," to her adopted daughter, herein
private respondent Eda Jimenez, for the sum of P1,000.00. Transfer
Certificate of Title No. T-99 was canceled to give way to TCT No. T-
17103 6 in the name of Eda Jimenez, married to Santiago Jimenez.
On 6 March 1972, Eda Jimenez sold sixty-five (65) square meters of
Lot 564 to Marcos Salimbagat for P6,500.00, and on 1 August 1972,
conveyed 301 square meters of the same lot to Pacifico
Cimafranca 8 for P30,000. Both sales were duly annotated on TCT No.
T-17103.
On 25 September 1972, the Torregianis instituted in the Court of First
Instance, now Regional Trial Court, of Zamboanga del Norte an action
for declaration of nullity of contract, annulment of sales, reconveyance
and damages 9 against the spouses Santiago and Eda Jimenez,
Marcos Salimbagat and Pacifico Cimafranca alleging that the sale of
Lot 564 by Lucia Embrado to Eda Jimenez was void not only for lack of
consideration but also because Oreste Torregiani did not consent to
the sale, which consent was necessary because Lot 564 was conjugal
property. In addition, the petitioners claim that Lucia was misled into
signing the deed of sale marked as Exh. "D" on the belief that Lot 564
was merely intended as security for a loan that the Jimenez spouses
were then negotiating with the First Insular Bank of Cebu. Since the
Jimenez spouses did not acquire valid title to the land, the subsequent
sales in favor of Salimbagat and Cimafranca were without legal effect.
The Torregianis were sustained by the CFI of Zamboanga del
Norte 10 which held that the sale of Lot 564 to Eda Jimenez and its
subsequent transfers to Marcos Salimbagat and Pacifico Cimafranca,
who were declared buyers in bad faith, were void and of no effect.
More specifically, the judgment (a) declared Exhs. "D," "G" and "H" as
well as TCT No. 17103 null and void and of no force and effect; (b)
ordered defendants jointly and severally to pay plaintiffs the sum of
P2,000.00 as actual damages and P1,500.00 for attorneys fees; (c)
ordered the Register of Deeds of Dipolog City to cancel TCT No.
17103 in the name of Eda Jimenez and issue another one in favor of
plaintiff Lucia Embrado, married to Oreste Torregiani, and to cancel all
the annotations thereon emanating from the void transfers in favor of
Marcos Salimbagat and Pacifico Cimafranca; (d) ordered defendants
Eda and Santiago Jimenez to return to defendant Pacifico Cimafranca
the sum of P30,000.00 paid by him for the 301 square meters and the
house in question, and to defendant Marcos Salimbagat the P6,500.00
paid by him for the 65 square meters occupied by Comendador Clinic
with legal interest of six percent (6%) until fully paid; and, (e) ordered
defendant Cimafranca to pay plaintiffs all the rents he has been
collecting from the lessees of the first floor of the house with legal
interest thereon from the time he started collecting them until fully paid,
with costs against defendants. 11
The foregoing judgment was reversed by the Court of Appeals which
held that since Lucia Embrado actually agreed with Juan, Pastor and
Matias Carpitanos, the original owners, to the purchase of Lot 564 on
15 April 1941 12 when she was not yet married, then the lot was her
paraphernal property since a sale is considered perfected the moment
the parties agree on the object and cause of the contract. In addition,
the respondent court declared Salimbagat and Cimafranca buyers in
good faith since the contrary was not proved. Consequently, the
complaint in the trial court was ordered dismissed by respondent Court
of Appeals.
Three (3) issues are herein involved: (a) whether Lot 564 was
paraphernal property of Lucia Embrado or conjugal with her husband
Oreste Torregiani; (b) whether the sale in favor of Eda Jimenez was
valid; and, (c) whether vendees Marcos Salimbagat and Pacifico
Cimafranca were buyers in good faith so that the sale to them was
valid, hence, would bar reconveyance.
We sustain petitioners. While we agree with respondent court that Lot
564 was originally the paraphernal property of Lucia, we cannot adopt
its conclusion that because Lucia and the original owners agreed in
1941 for its purchase and sale, ownership was already acquired by
Lucia at that moment. Under Art. 1496 of the Civil Code, "ownership of
the thing sold is acquired by the vendee from the moment it is
delivered to him in any of the ways specified in articles 1497 to 1501,
or in any other manner signifying an agreement that the possession is
transferred from the vendor to the vendee," and under Art. 1498,
"(w)hen 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 case at bar, the Venta Definitiva over Lot 564 in favor of Lucia
Embrado was executed by the Carpitanoses on 2 July 1946 when her
marriage to petitioner Oreste Torregiani was already subsisting.
Although ownership was acquired during the marriage and hence
presumed conjugal, the presumption of conjugality 13 was successfully
overcome by the terms of the Venta Definitiva which contains a
positive assertion of exclusive ownership, which was duly supported by
the testimony of Matias Carpitanos, one of the original sellers of the
lot. 14
However, a decisive fact appears which prevents us from ultimately
affirming the validity of her sale of Lot 564 to private respondent Eda
Jimenez. The trial court found as a fact the construction in 1958 of a
residential/commercial building 15 on said lot a part of which was
leased to third persons and another part serving as the Torregianis
conjugal dwelling.
Although no evidence was presented on the source of funds used in
the construction to determine whether the same was conjugal or
paraphernal, other than the testimony of Torregiani, 16 petitioners
nevertheless enjoy in their favor the presumption that the funds used
were conjugal. 17
The second paragraph of Art. 158 of the Civil Code provides that
"[b]uildings constructed, at the expense of the partnership, during the
marriage on land belonging to one of the spouses, also pertain to the
partnership, but the value of the land shall be reimbursed to the
spouse who owns the same." Under this article, the land becomes
conjugal upon the construction of the building without awaiting
reimbursement before or at the liquidation of the partnership upon the
concurrence of two conditions, to wit: (a) the construction of the
building at the expense of the partnership; and, (b) the ownership of
the land by one of the spouses. 18 The conditions have been fully met
in the case at bench. Thus, even if Lot 564 was originally the
paraphernal property of Lucia as evident from the "Venta Definitiva",
the same became conjugal upon the construction of the
residential/commercial building in 1958.
Lucia claims that she was misled by her daughter and son-in-law into
signing a deed of absolute sale in their favor thinking that she would be
helping them obtain a loan from a bank if they could mortgage the
property as security for their loan; that although she signed the deed of
sale, she did not consent to the sale nor did she intend to convey or
transfer her title to Eda Jimenez; and, that she never received the
alleged amount of P1,000.00 as consideration for the sale of the
property.
While it is true that a notarized document is admissible in evidence
without proof of its due execution and is conclusive as to the
truthfulness of its contents, this rule is not absolute and may be
rebutted by evidence to the contrary. 19 In this case, it was clearly
shown that Eda and Santiago Jimenez had no sufficient means of
livelihood and that they were totally dependent on their mother Lucia
for the support of their family. This fact strengthens the claim of Lucia
that the price of the property was fictitious and that Eda Jimenez could
not have paid the price of the property as she was financially incapable
to do so. In fact, Eda Jimenez did not prove as to how she obtained the
money to pay for the property she supposedly bought
When the source of the purchase price is "intriguing"
convincingly shown to have been given by the "buyer" to
the claim of the latter that she signed the deed of sale
consent may be upheld. 20
from Lucia. sale to Salimbagat and Cimafranca, petitioners had already been in
and is not continuous possession of the property for fourteen (14) years, or since
the "seller," 1958. Santiago Jimenez admitted that after his marriage he and his
without her wife Eda lived and stayed with her parents, herein petitioners, and
dependent on them for support. 31

Even assuming in gratia argumenti that Lucia signed the document Before buying the property, Salimbagat and Cimafranca allegedly
knowing that it was a deed of sale of the property, the sale thereof by inquired from the office of the Register of Deeds concerning the
Lucia to Eda Jimenez without her husbands conformity should be genuineness of the certificate of title of Eda Jimenez, and from the
considered void ab initio being contrary to law. 21 Since "(t)he wife Clerk of Court of the Court of First Instance of Dipolog City as to
cannot bind the conjugal partnership without the husbands consent, whether the property was involved in any litigation. 32 However, they
except in cases provided by law," 22 it follows that Lucia Embrado failed to inquire from petitioners as to why they were the ones in actual
Torregiani could not, by herself, validly dispose of Lot 564 without her possession of the property.
husbands consent. Consequently, Eda Jimenez likewise could not
have acquired ownership over the land. The issuance of a certificate of
The rule is settled that a buyer of real property which is in the
title in favor of Eda Jimenez did not vest upon her ownership over the
possession of persons other than the seller must be wary and should
property. Neither did it validate the alleged purchase thereof which is
investigate the rights of those in possession. Otherwise, without such
null and void. Registration does not vest title. It is merely evidence of
inquiry, the buyer can hardly be regarded as a buyer in good
such title. Our land registration laws do not give the holder any better
faith. 33 When a man proposes to buy or deal with realty, his first duty is
title than what he actually has. 23 Being null and void, the sale to Eda
to read the public manuscript, i.e., to look and see who is there upon it,
Jimenez and the transfer of the property she made to Salimbagat and
and what are his rights. A want of caution and diligence which an
Cimafranca produced no legal effects whatsoever. Quod nullum est,
honest man of ordinary prudence is accustomed to exercise in making
nullum producit effectum. There being no valid title to the land that Eda
purchases is, in contemplation of law, a want of good faith. The buyer
Jimenez acquired from Lucia, it follows that no title to the same land
who has failed to know or discover that the land sold to him is in the
could be conveyed by the former to Salimbagat and
adverse possession of another, is a buyer in bad faith. 34
Cimafranca. 24

The fact that Lucia Embrado resides in the premises, coupled with the
It is worthy to note that Salimbagat and Cimafranca, as buyers of Eda
relatively young age and meager financial standing of the Jimenez
Jimenez, have not proved their status as purchasers in good faith and
spouses, should have been sufficient for Cimafranca to hesitate
for value of the land which, in the first place, Eda Jimenez had no right
accepting Edas transfer certificate of title at its face value. Cimafranca,
to sell. The burden of proving the status of a purchaser in good faith
after deliberately closing his eyes to such a vital information, is now
and for value lies upon him who asserts that status. In discharging the
claiming good faith. For obvious reasons, we cannot accept his
burden, it is not enough to invoke the ordinary presumption of good
contention. We thus declare him, together with Marcos Salimbagat, to
faith, i.e., that everyone is presumed to act in good faith. The good
be purchasers in bad faith hence not entitled to protection under the
faith that is here essential is integral with the very status which must be
Torrens system of registration.
proved. 25

Lot 564 is now registered in the name of Eda Jimenez "married to

We agree with the trial court when it found that Salimbagat and
Santiago Jimenez" under Transfer Certificate of Title No. T-17103
Cimafranca purchased the disputed lot from Eda and Santiago
which was issued pursuant to the "Absolute Deed of Sale" executed in
Jimenez with knowledge of facts and circumstances which should have
her favor by petitioner Lucia Embrado. We have already declared said
put them upon such inquiry and investigation as might be necessary to
deed of sale as null and void since its object, Lot 564, is conjugal
acquaint them with the defects in the title of their vendor. A purchaser
property which was sold by Lucia Embrado without her husbands
cannot close his eyes to facts which should put a reasonable man on
conformity. The present vendees, Marcos Salimbagat and Pacifico
his guard and then claim that he acted in good faith under the belief
Cimafranca, who bought the property from Eda Jimenez have failed to
that there was no defect in the title of the vendor. His mere refusal to
persuade us that they acquired the property in good faith.
believe that such defect exists, or his willful closing of his eyes to the
possibility of the existence of a defect in the vendors title will not make
him an innocent purchaser for value if afterwards it develops that the WHEREFORE, the decision of respondent Court of Appeals dated 26
title is in fact defective, and it appears that he had such notice of the April 1979 is REVERSED and SET ASIDE and the Decision of the then
defect as would have led to its discovery had he acted with the Court of First Instance (now Regional Trial Court) of Zamboanga del
measure of precaution which may reasonably be required of a prudent Norte dated 14 June 1976 is REINSTATED and ADOPTED herein as
man in like situation. 26 the decision in this case.

Cimafranca is a close relative of Santiago Jimenez and at the same SO ORDERED.

time godfather to one of his children. As such, there can be no doubt
that Cimafranca was aware of the personal circumstances and
financial standing of the Jimenez spouses, including their financial
ability to acquire any property. It would be impossible for Cimafranca
not to know that Santiago Jimenez was only twenty-two years old, a
working student earning six pesos per day 27 with a wife and three
children to support. 28 With these facts, there is every reason for him to
inquire further as to how Eda Jimenez came up with the sum of
P1,000.00 to buy the property. When there is a clear showing that Eda
Jimenez, being the transferee of a registered property, is not gainfully
employed or did not have an independent source of income or is
financially incapable of paying the price of the property she bought, this
is sufficient to engender doubt as to whether Eda validly bought the
property from Lucia. 29

On the part of Salimbagat, he has been a resident of Dipolog for about

thirty (30) years. He has a daughter renting a portion of the building
with her husband for more than a year prior to the sale by Eda Jimenez
to Salimbagat on 6 March 1972. 30 This means that the lease of the
building by Salimbagats daughter already commenced while Lucia
Torregiani was still the registered owner and this was prior to the
alleged sale by Lucia Torregiani of the property to Eda Jimenez on 1
May 1971. There can be no doubt that Salimbagats daughter was
aware of the factual background of the property and the personal
circumstances of the owners thereof especially that they are all
occupying the same building. During the time that Salimbagat was
already interested in buying the property, it would have been usual and
part of ordinary human nature for him to inquire about the property
from his daughter who was living very near the supposed owners.
Considering that the Torregiani and Jimenez families are not total
strangers to Salimbagat, it is safe to conclude that Salimbagat had
some knowledge of the financial status of the supposed vendors which
should have put him on guard before buying the property. Moreover,
the records show that this would not have escaped the notice of
Salimbagat and Cimafranca that at the time of the sale to them
petitioners were in actual possession of the property with Salimbagats
daughter renting a portion thereof. For that matter, at the time of the
G.R. No. L-40399 February 6, 1990
MARCELINO C. AGNE, FELIX ORIANE, AGATON TAGANAS,
HILARIO ESCORPIZO, ISABELO MAURICIO, HEIRS OF ROMAN
DAMASO, NAMELY: JORGE DAMASO and ALEJANDRO
DAMASO, HEIRS OF FRANCISCO RAMOS, NAMELY:
ENCARNACION R. LEANO and DOMINGA R. MEDRANO, HEIRS
OF SABINA GELACIO AGAPITO, NAMELY: SERAPIO AGAPITO,
and NICOLASA AGAPITO, FELISA DICCION AGNE, ESTANISLAO
GOROSPE, LIBRADO BADUA, NICOLAS VILLANUEVA, HEIRS OF
CARLOS PALADO, NAMELY: FORTUNATA PALADO and
ISABELITA PALADO, PRIMITIVO TAGANAS, PANFILO SOINGCO,
BERNARDO PALATTAO, MARCELINO S. SANTOS and PAULINO
D. AGNE JR. (Minor), represented by his mother FELISA DICCION
AGNE, petitioners,
vs.
THE DIRECTOR OF LANDS, PRESENTACION AGPOON GASCON,
JOAQUIN GASCON and HON. ROSALIO C. SEGUNDO, Presiding
Judge, Court of First Instance of Pangasinan, Branch
V, respondents.
REGALADO, J.:
Before us are two separate petitions for review on certiorari of the
order of the defunct Court of First Instance of Pangasinan, Branch V, in
Civil Case No. 2649, entitled "Marcelino Agne et al. vs. The Director of
Lands, et al.," dismissing the complaint filed by herein petitioners in
said case; 1 and the decision of the then Intermediate Appellate Court
in AC-G.R. CV No. 60388-R, entitled "Presentacion Agpoon Gascon
vs. Marcelino C. Agne et al.," promulgated on January 30, 1985,
affirming in toto the decision of the trial court in favor of herein private
respondents 2 which cases are docketed herein as G.R. No. L-40399
and G.R. No. 72255, respectively.
These two petitions, arising from the same facts and involving the
same parties and common questions of law, were ordered
consolidated in our resolution of August 9, 1989.
As found by respondent court and disclosed by the records, the land
subject matter of this case was originally covered by Free Patent No.
23263 issued on April 17, 1937 in the name of Herminigildo Agpoon.
On May 21, 1937, pursuant to the said patent, the Register of Deeds of
Pangasinan issued to said Herminigildo Agpoon Original Certificate of
Title No. 2370. 3 Presentacion Agpoon Gascon inherited the said
parcel of land upon the death of her father, Herminigildo, and was
issued Transfer Certificate of Title No. 32209 on April 6,1960.
Respondent Presentacion declared the said land for taxation purposes
in her name under Tax Declaration No. 11506 and taxes were paid
thereon in her name. 4
On April 13, 1971, private respondent spouses filed Civil Case No. U-
2286 in the then Court of First Instance of Pangasinan for recovery of
possession and damages against petitioners. Their complaint states
that they are the registered owners under the aforesaid Transfer
Certificate of Title No. 32209 of the parcel of land situated in Barrio
Bantog, Asingan, Pangasinan which is now in the possession of
petitioners; that during the Japanese occupation, petitioners, taking
advantage of the abnormal conditions then obtaining, took possession
of said land by means of fraud, stealth, strategy and intimidation; that
private respondents repeatedly demanded the surrender of the
physical possession of said property but the latter refused. 5
Petitioners, in answer to said complaint, alleged that the land in
question was formerly a part of the river bed of the Agno-Chico River;
that in the year 1920, a big flood occurred which caused the said river
to change its course and abandon its original bed; that by virtue of the
provisions of Article 370 of the Spanish Civil Code which was then the
law in force, petitioners, by operation of law, became the owners by
accession or accretion of the respective aliquot parts of said river bed
bordering their properties; that since 1920, they and their predecessors
in interest occupied and exercised dominion openly and adversely over
said portion of the abandoned river bed in question abutting their
respective riparian lands continuously up to the present to the
exclusion of all other persons, particularly Herminigildo Agpoon; that
they have introduced improvements thereon by constructing irrigation
canals and planting trees and agricultural crops thereon 6 and
converted the land into a productive area.
In their joint stipulation of facts, the parties agreed as follows:
1. That the parties admit the identity and area of the land in question,
which forms part of the river bed of the Agno-Chico River, and further
admit that the said river bed was abandoned as a result of a flood in
1920 and opened a new bed. The location and course of the aforesaid
abandoned river bed as well as the relative position of the lands
bordering the same can be gleaned from Cadastral Survey Plan of
Asingan, Pangasinan, Street No. 49 thereof, as approved by the
Director of Lands on October 12, 1912, a photostat copy of which is
hereto attached and made an integral part hereof a Annex "A".
2. That the parties admit that the defendants are the riparian owners of
the area in question and further admit that the defendants are in
possession thereof but that each of them is in possession only of an
aliquot part of the said area proportionate to the length of their
respective lands. (As amended).
3. That the parties likewise admit that a Free Patent No. 23263 in the
name of Herminigildo Agpoon covering the area in question was
issued on April 17, 1937 and that they admit O.C.T. No. 2370 of the
Register of Deeds of Pangasinan covering the same parcel of land was
issued to the same Herminigildo Agpoon on May 21, 1937, a photostat
copy of said O.C.T. is hereto attached as Annex "B".
4. That the parties admit that the property in controversy is now
covered by T.C.T. No. 32209 in the name of Presentacion Agpoon
Gascon and by Tax Declaration No. 11506 in the name of said
Presentacion Agpoon Gascon, a photostat reproduction of said T.C.T.
No. and Tax Declaration are hereto attached and marked as Annexes
"C" and "F", respectively. 7
On March 6, 1974, while the above-mentioned case was still pending,
petitioners filed a complaint against the respondents Director of Lands
and spouses Agpoon with the former Court of First Instance of
Pangasinan for annulment of title, reconveyance of and/or action to
clear title to a parcel of land, which action was docketed as Civil Case
No. U-2649. Petitioners alleged in their said complaint that the land in
question, which was formerly a portion of the bed of Agno-Chico river
which was abandoned as a result of the big flood in 1920, belongs to
them pursuant to the provision of Article 370 of the old Civil Code; that
it was only on April 13, 1971, when respondent spouses filed a
complaint against them, that they found out that the said land was
granted by the Government to Herminigildo Agpoon under Free Patent
No. 23263, pursuant to which Original Certificate of Title No. 2370 was
issued in the latter's name; and that the said patent and subsequent
titles issued pursuant thereto are null and void since the said land, an
abandoned river bed, is of private ownership and, therefore, cannot be
the subject of a public land grant. 8
On June 21, 1974, the trial court rendered a decision in Civil Case No.
U-2286, the dispositive part of which reads as follows:
WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Court
renders judgment:
1. Ordering the defendants to surrender to the plaintiffs the physical
possession of the land in question described in paragraph 3 of the
amended complaint;
2. Ordering the defendants to pay jointly and severally to the plaintiff
the produce of the land in question in the total sum of P5,000.00 per
year from the date of the filing of the present action at the rate of 6%
interest per annum until fully paid;
3. Ordering the defendants to pay jointly and severally the amount of
P800.00 representing attorney's fees;
4. And to pay the costs.
SO ORDERED. 9
Not satisfied with said decision, petitioners appealed to respondent
court. As earlier stated, on January 30, 1985 the former Intermediate
Appellate Court affirmed in toto in AC-G.R. CV No. 60388-R the said
decision of the court a quo, 10 and with the denial of petitioner's motion
for reconsideration, 11 the case came up to us as G.R. No. 72255.
On June 24, 1974, the aforesaid Court of First Instance of Pangasinan,
acting on the motion to dismiss filed by respondents Director of Lands
and spouses Agpoon, issued an order dismissing Civil Case No. U-
2649 for annulment of title by merely citing the statement in the case
of Antonio, et al. vs. Barroga, et al. 12 that an action to annul a free
patent many years after it had become final and indefeasible states no
cause of action . 13 Petitioners' motion for the reconsideration of said
order was denied on September 11, 1974, 14 hence the recourse to us
in G.R. No. L-40399.
In these petitions, petitioners raise the following issues:
1. Whether or not the lower court is justified in dismissing the complaint
by simply invoking the ruling in the aforestated case
of Antonio although the facts and circumstances set forth in the
complaint show that the land in question was private land under Article
370 of the old Civil Code and that the subsequent derivative
certificates of title in question were null and void ab initio because the
said land was not within the authority of the government to dispose of
in favor of any party and must be ordered annulled, cancelled or
rescinded; 15
2. Whether or not the trial court and the former Intermediate Appellate
Court were justified in not basing their judgments on the judicial
admissions of private respondents in the stipulation of facts of the
parties, since such admissions have the legal force and effect of
precluding private respondents from disputing such admission;
3. Whether or not respondent court can presume that private
respondents or their predecessor had prior possession of the land in
dispute in the light of provisions of law which oblige them to prove such
possession, as well as the stipulated facts and other facts and
circumstances on record showing that private respondents or their
predecessor were not in actual occupancy of the said land, and without
appreciating the evidence put up by petitioners to prove their prior
possession thereof;
4. Whether or not respondent court was justified in its application of
Section 41 of the Code of Civil Procedure in favor of private
respondents, although the private respondents did not invoke said law
in this case and did not adduce any evidence or proof that all the
essential requisites of acquisitive prescription under the said law were
present in their favor;
5. Whether or not the Government had the right to convey by way of
free patent to any party the land in dispute which belonged to the
riparian owners as decreed by Article 370 of the old Civil Code, the law
then in force, and despite the fact that the patentee herein never
occupied the said land during the period prescribed by Act No. 2874;
and
6. Whether or not private respondents are guilty of laches for not
having attempted to file suit to recover the land in dispute during an
interval of 50 or 30 years. 16
The issues and arguments raised by the proponents in these petitions
are well taken.
We agree with petitioners that the lower court erred in ordering the
dismissal of Civil Case No. U-2649. The aforesaid case
of Antonio relied upon by the lower court in its dismissal order is not
controlling. In that case, the complaint was dismissed for failure to
state a cause of action, not only because of the delay in the filing of the
complaint but specifically since the ground relied upon by the plaintiff
therein, that is, that the land was previously covered by a titulo real,
even if true, would not warrant the annulment of the free patent and the
subsequent original certificate of title issued to defendant. Thus:
It is true that by filing the application for a free patent Barroga impliedly
admitted either the invalidity or insufficiency of Titulo Real No. 12479
issued in the name of his predecessor in interest on July 22, 1894, but
neither the allegation made in his answer that his aforesaid
predecessor in interest was the absolute owner of the property covered
by said Titulo Real nor his implied admission of the latter's invalidity or
insufficiency are grounds for the annulment of the free patent and
original certificate of title in question. Evidently, it was Barroga's
privilege to rely or not to rely upon his claim of private ownership in
favor of his predecessor in interest and of whatever the latter's Titulo
Real was worth. He decided not to rely upon them and to consider that
the property covered by the Titulo Real was still part of the public
domain. Acting accordingly he applied for a free patent and was
successful. It must be borne in mind that the Titulo Real was not an
indefeasible title and that its holder still had to prove that he had
possessed the land covered by it without interruption during a period of
ten years by virtue of a good title and in good faith (Royal Decree of
June 25,1880). We may well presume that Barroga felt that he had no
sufficient evidence to prove this, for which reason he decided to
acquire the land as part of the public domain.
In the case at bar, the facts alleged in the complaint, which are
deemed hypothetically admitted upon the filing of the motion to
dismiss, constitute a sufficient cause of action against private
respondents. Petitioners in their complaint in Civil Case No. U-2649
alleged, among others, that the disputed area was formerly an
abandoned river bed formed due to natural causes in 1920; that the
riparian owners of the lands abutting said abandoned river bed were
the plaintiffs and/or their predecessors in interest; that since then and
up to the present, they have been occupying and cultivating aliquot
portions of the said land proportionate to the respective lengths of their
riparian lands; that they are the real and lawful owners of the said land
as decreed by Article 370 of the old Civil Code, the law then in force;
that since the said area was a private land, the same could not have
been the subject matter of an application for free patent; and that all
these facts were known to the private respondents and their
predecessor in interest.
If the said averments are true, and the factual recitals thereon have
been admitted in the stipulation of facts hereinbefore quoted, then the
land in question was and is of private ownership and, therefore,
beyond the jurisdiction of the Director of Lands. The free patent and
subsequent title issued pursuant thereto are null and void. The
indefeasibility and imprescriptibility of a Torrens title issued pursuant to
a patent may be invoked only when the land involved originally formed
part of the public domain. If it was a private land, the patent and
certificate of title issued upon the patent are a nullity. 17
The rule on the incontrovertibility of a certificate of title upon the
expiration of one year, after the entry of the decree, pursuant to the
provisions of the Land Registration Act, does not apply where an
action for the cancellation of a patent and a certificate of title issued
pursuant thereto is instituted on the ground that they are null and void
because the Bureau of Lands had no jurisdiction to issue them at all,
the land in question having been withdrawn from the public domain
prior to the subsequent award of the patent and the grant of a
certificate of title to another person. Such an action is different from a
review of the decree of title on the ground of fraud. 18
Although a period of one year has already expired from the time a
certificate of title was issued pursuant to a public grant, said title does
not become incontrovertible but is null and void if the property covered
thereby is originally of private ownership, and an action to annul the
same does not prescribe. 19 Moreover, since herein petitioners are in
possession of the land in dispute, an action to quiet title is
imprescriptible. 20 Their action for reconveyance which, in effect, seeks
to quiet title to property in one's possession is imprescriptible. Their
undisturbed possession for a number of years gave them a continuing
right to seek the aid of a court of equity to determine the nature of the
adverse claims of a third party and the effect on her title. 21 As held
in Caragay-Layno vs. Court of Appeals, et al., 22an adverse claimant of
a registered land, undisturbed in his possession thereof for a period of
more than fifty years and not knowing that the land he actually
occupied had been registered in the name of another, is not precluded
from filing an action for reconveyance which, in effect, seeks to quiet
title to property as against the registered owner who was relying upon
a Torrens title which could have been fraudulently acquired. To such
adverse claimant, the remedy of an action to quiet title is
imprescriptible. In actions for reconveyance of property predicated on
the fact that the conveyance complained of was void ab initio, a claim
of prescription of the action would be unavailing. 23
The resolution of the other assigned errors hinges on the issue of who,
as between the riparian owner presently in possession and the
registered owner by virtue of a free patent, has a better right over the
abandoned river bed in dispute.
We rule in favor of petitioners.
The claim of ownership of herein petitioners is based on the old Civil
Code, the law then in force, which provides:
The beds of rivers which remain abandoned because the course of the
water has naturally changed belong to the owners of the riparian lands
throughout their respective lengths. If the abandoned bed divided
estates belonging to different owners, the new dividing line shall run at
equal distance therefrom. 24
It is thus clear under this provision that once the river bed has been
abandoned, the riparian owners become the owners of the abandoned
bed to the extent provided by this article. The acquisition of ownership
is automatic. 25There need be no act on the part of the riparian owners
to subject the accession to their ownership, as it is subject thereto ipso
jure from the moment the mode of acquisition becomes evident,
without the need of any formal act of acquisition. 26 Such abandoned
river bed had fallen to the private ownership of the owner of the
riparian land even without any formal act of his will and any
unauthorized occupant thereof will be considered as a trespasser. The
right in re to the principal is likewise a right in re to the accessory, as it
is a mode of acquisition provided by law, as the result of the right of
accretion. Since the accessory follows the nature of the principal, there
need not be any tendency to the thing or manifestation of the purpose
to subject it to our ownership, as it is subject thereto ipso jurefrom the
moment the mode of acquisition becomes evident. 27
The right of the owner of land to additions thereto by accretion has
been said to rest in the law of nature, and to be analogous to the right
of the owner of a tree to its fruits, and the owner of flocks and herds to
their natural increase. 28 Petitioners herein became owners of aliquot
portions of said abandoned river bed as early as 1920, when the Agno
River changed its course, without the necessity of any action or
exercise of possession on their part, it being an admitted fact that the
land in dispute, prior to its registration, was an abandoned bed of the
Agno River and that petitioners are the riparian owners of the lands
adjoining the said bed.
The failure of herein petitioners to register the accretion in their names
and declare it for purposes of taxation did not divest it of its character
as a private property. Although we take cognizance of the rule that an
accretion to registered land is not automatically registered and
therefore not entitled or subject to the protection of imprescriptibility
enjoyed by registered property under the Torrens system. 29 The said
rule is not applicable to this case since the title claimed by private
respondents is not based on acquisitive prescription but is anchored on
a public grant from the Government, which presupposes that it was
inceptively a public land. Ownership over the accession is governed by
the Civil Code. Imprescriptibility of registered land is a concern of the
Land Registration Act.
the expense of another. Stated elsewise, the Torrens system was not
established as a means for the acquisition of title to private land. It is
intended merely to confirm and register the title which one may already
have on the land. Where the applicant possesses no title or ownership
over the parcel of land, he cannot acquire one under the Torrens
system of registration. 41 Resort to the provisions of the Land
Registration Act does not give one a better title than he really and
lawfully has. 42 Registration does not vest title. It is not a mode of
acquiring property. It is merely evidence of such title over a particular
property. It does not give the holder any better title than what he
actually has, especially if the registration was done in bad faith. The
effect is that it is as if no registration was made at all. 43

Under the provisions of Act No. 2874 pursuant to which the title of Moreover, the failure of herein private respondents to assert their claim
private respondents' predecessor in interest was issued, the President over the disputed property for almost thirty 30 years constitute
of the Philippines or his alter ego, the Director of Lands, has no laches 44 and bars an action to recover the same. 45 The registered
authority to grant a free patent for land that has ceased to be a public owners' right to recover possession of the property and title thereto
land and has passed to private ownership, and a title so issued is null from petitioners has, by long inaction or inexcusable neglect, been
and void. 30 The nullity arises, not from the fraud or deceit, but from the converted into a stale demand. 46
fact that the land is not under the jurisdiction of the Bureau of
Lands. 31 The jurisdiction of the Director of Lands is limited only to
Considering that petitioners were well within their rights in taking
public lands and does not cover lands privately owned. 32 The purpose
possession of the lot in question, the findings of respondent court that
of the Legislature in adopting the former Public Land Act, Act No.
herein petitioners took advantage of the infirmities and weakness of
2874, was and is to limit its application to lands of the public domain,
the preceding claimant, Herminigildo Agpoon, in taking possession of
and lands held in private ownership are not included therein and are
said land during the Japanese occupation is neither tenable in law nor
not affected in any manner whatsoever thereby. Land held in freehold
sustained by preponderant evidence in fact.
or fee title, or of private ownership, constitute no part of the public
domain and cannot possibly come within the purview of said Act No.
2874, inasmuch as the "subject" of such freehold or private land is not Where the evidence show that the plaintiff is the true owner of the land
embraced in any manner in the title of the Act 33 and the same are subject of the free patent and title granted to another and that the
excluded from the provisions or text thereof. defendant and his predecessor in interest were never in possession
thereof, the Court, in the exercise of its equity jurisdiction and without
ordering the cancellation of said title issued upon the patent, may
We reiterate that private ownership of land is not affected by the
direct the defendant registered owner to reconvey the property to the
issuance of a free patent over the same land because the Public Land
plaintiff. 47 Further, if the determinative facts are before the Court and it
Act applies only to lands of the public domain. 34 Only public land may
is in a position to finally resolve the dispute, the expeditious
be disposed of by the Director of Lands. 35 Since as early as 1920, the
administration of justice will be subserved by such a resolution and
land in dispute was already under the private ownership of herein
thereby obviate the needless protracted proceedings consequent to
petitioners and no longer a part of the lands of the public domain, the
the remand of the case of the trial court. 48 On these considerations, as
same could not have been the subject matter of a free patent. The
well as the fact that these cases have been pending for a long period
patentee and his successors in interest acquired no right or title to the
of time, we see no need for remanding Civil Case No. 2649 for further
said land. Necessarily, Free Patent No. 23263 issued to Herminigildo
proceedings, and we hold that the facts and the ends of justice in this
Agpoon is null and void and the subsequent titles issued pursuant
case require the reconveyance by private respondents to petitioners of
thereto cannot become final and indefeasible. Hence, we ruled
the disputed lot.
in Director of Lands vs. Sisican, et al. 36that if at the time the free
patents were issued in 1953 the land covered therein were already
private property of another and, therefore, not part of the disposable WHEREFORE, the assailed decision of respondent court in its AC-
land of the public domain, then applicants patentees acquired no right G.R. CV No. 60388-R and the questioned order of dismissal of the trial
or title to the land. court in its Civil Case No. 2649 are hereby REVERSED and SET
ASIDE and judgment is hereby rendered ORDERING private
respondents to reconvey the aforesaid parcel of land to petitioners.
Now, a certificate of title fraudulently secured is null and void ab initio if
the fraud consisted in misrepresenting that the land is part of the public
domain, although it is not. As earlier stated, the nullity arises, not from SO ORDERED.
the fraud or deceit but, from the fact that the land is not under the
jurisdiction of the Bureau of Lands. 37 Being null and void, the free
patent granted and the subsequent titles produce no legal effects
whatsoever. Quod nullum est, nullum producit effectum. 38

A free patent which purports to convey land to which the Government

did not have any title at the time of its issuance does not vest any title
in the patentee as against the true owner. 39 The Court has previously
held that the Land Registration Act and the Cadastral Act do not give
anybody who resorts to the provisions thereof a better title than what
he really and lawfully has.

. . . The Land Registration Act as well as the Cadastral Act protects

only the holders of a title in good faith and does not permit its
provisions to be used as a shield for the commission of fraud, or that
one should enrich himself at the expense of another (Gustilo vs.
Maravilla, 48 Phil. 838). The above-stated Acts do not give anybody,
who resorts to the provisions thereof, a better title than he really and
lawfully has. If he happened to obtain it by mistake or to secure, to the
prejudice of his neighbor, more land than he really owns, with or
without bad faith on his part, the certificate of title, which may have
been issued to him under the circumstances, may and should be
cancelled or corrected (Legarda and Prieto vs. Saleeby, 31 Phil., 590).
. . . 40

We have, therefore, to arrive at the unavoidable conclusion that the

title of herein petitioners over the land in dispute is superior to the title
of the registered owner which is a total nullity. The long and continued
possession of petitioners under a valid claim of title cannot be defeated
by the claim of a registered owner whose title is defective from the
beginning.

The quality of conclusiveness of a Torrens title is not available for use

to perpetrate fraud and chicanery. To paraphrase from Angeles
vs. Samia, supra, the Land Registration Act 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. It cannot be a shield
for the commission of fraud. It does not permit one to enrich himself at
G.R. No. L-47491 May 4, 1989
GALICANO GOLLOY, petitioner,
vs.
HONORABLE COURT OF APPEALS, JOSE VALDEZ, JR.,
CONSOLACION VALDEZ, LOURDES VALDEZ, SOLEDAD VALDEZ
and BENNY MADRIAGA, respondents.
PARAS, J.:
This is a petition for review on certiorari of the September 29, 1977
Decision ** of the Court of Appeals in CA-G.R. No. L-43359R, entitled,
Galicano Golloy vs. Jose J. Valdez Jr., et. al., affirming the judgment of
the then Court of First Instance of Tarlac; and the November 29,1977
Resolution of the same court denying the motion for reconsideration. .
Herein petitioner, for more than twenty (20) years, has been the
registered owner and in possession of a 41,545-square meter parcel of
land covered by Transfer Certificate of Title No. 45764. The Southwest
portion of this land is bounded by herein private respondents' land
which is covered by Certificate of Title No. 8565. Sometime in
February, 1966, private respondents subdivided their land among
themselves. In the course of the subdivision, private respondents
caused to be placed two (2) monuments inside the Southwest, portion
of petitioner's land. Hence, petitioner filed with the then Court of First
Instance of Tarlac, presided over by Judge Arturo B. Santos an action
to quiet title. The same was docketed therein as Civil Case No. 4312. .
Private respondents, in their filed motion to dismiss with counterclaim,
alleged that they never encroached upon the landholding of petitioner
and nothing has been placed on his land which would create any cloud
thereon; and that the truth of the matter was that they merely
subdivided their own land according to their title and therefore there
was nothing for petitioner to quiet or remove cloud on his title. .
In the pre-trial of December 12, 1967, the parties agreed that inasmuch
as the only issue in dispute referred ultimately to the question of the
boundaries of their respective lots, the same might be resolved by
appointing a public surveyor of the Bureau of Lands to relocate the
disputed area with the end in view of determining the true and correct
boundaries of their parcels. .
The trial court, in line with the above-said agreement, in an Order
dated December 13, 1968, ordered the Director of Lands to appoint an
impartial public land surveyor to conduct the relocation survey on the
disputed area. .
On May 20, 1968, Jovino B. Dauz, Surveyor of the Bureau of Lands,
Dagupan City, submitted his Report (Record on Appeal, pp. 21-
28, Rollo, p. 34), which states in substance, that petitioner's land is Lot
A of the Subdivision plan, Psd-1413, being a portion of the land
described in Original Certificate of Title No. 126 in the name of Agustin
Golloy (No. 11, Record on Appeal, p. 23); that the land titled under
OCT No. 126 was surveyed on March 18, 1918 and subsequently titled
and registered on August 15, 1919 (No. 12, Ibid); that on the other
hand, private respondents' land is Lot No. 1, 11-8218 in the name of
Domingo Balanga, surveyed on March 11, 1913 and originally titled
and registered on March 1, 1918 (No. 15, Ibid.); that there are
overlappings on the boundaries of the two (2) lands (Nos. 226, 27, 28
and 29, Ibid.); and that the overlappings are due to the defect in the
survey on petitioner's land since it did not duly conform with the
previously approved survey of Lot 1, 11-3218 under OCT 8565 (No.
25, lbid). He ended his report by submitting that private respondents'
land, TCT No. 8565, prevails over petitioner's land, TCT No. 45764,
since the former was surveyed and titled ahead. .
On July 8, 1968, petitioner filed a Memorandum (Record on Appeal,
pp. 28-35). .
On October 21, 1968, the trial court ruled in favor of private
respondents. The decretal portion of the decision, reads: .
WHEREFORE, conformably to the agreement of the parties during the
pre-trial on December 12, 1967, this Court renders judgment in
accordance with the aforesaid surveyor's Report and Relocation Plan;
and the plaintiff and the defendants are accordingly directed to abide
by and respect the boundaries indicated on the relocation plan of
Surveyor Dauz which he found to be the true and correct boundaries of
the properties covered by TCT Nos. 8567 and 45764 of the land
records of Tarlac. .
For lack of proof, the claim for damages by plaintiff and the defendants
are both denied. .
No pronouncement on costs. .
SO ORDERED. (Rollo, p. 14) .
Petitioner, after his motion for reconsideration was denied by the trial
court, appealed the said decision, which was affirmed by the Court of
Appeals, in a Decision promulgated on September 29, 1977 (Rollo, pp.
22-29). A motion for reconsideration was filed, but the same was
denied in a Resolution promulgated on November 29, 1977 (Ibid., pp.
30-32). Hence, the instant petition. .
The Second Division of this Court, in a Resolution dated January 4,
1978, resolved to require the respondents to comment (lbid., p. 36);
which comment was filed on February 14, 1978 (Ibid., pp. 41-42).
Petitioners filed a reply thereto on March 27, 1978 (lbid., p. 47) in
compliance with the resolution of February 14, 1978 (Ibid., p. 44). .
In a Resolution dated April 5, 1978 the Court gave due course to the
petition (Ibid., p. 52). Petitioner filed his Brief on January 10, 1981
(Ibid., p. 60). Private respondents having failed to file their brief within
the required period, the case was considered submitted for decision
without private respondents' brief in the resolution of February 8, 1981
(Ibid., p. 66). .
The sole issue in this case is who between the two title holders is
entitled to the land in dispute? .
The instant petition is impressed with merit. .
It must be stated that private respondents and their predecessor or
predecessors never possessed, much less, claimed the overlapped
portions. Petitioner has been always in possession of the same in the
concept of an owner, and his possession was disturbed only in
February, 1966, when the private respondents caused to be placed
two (2) monuments inside his land. It will be recalled that, as per report
of Surveyor Jovino B. Dauz (Record on Appeal, pp. 21-28), private
respondents' land (TCT-8565 is Lot No. 1, 11- 8218) was surveyed on
March 11, 1913 and originally titled and registered on March 1, 1918 in
the name of Dominga Balanga. On the other hand, petitioner's land
(TCT No. 45764) is Lot-A of Subdivision plan, Psd-14013, a portion of
land described in OCT No. 126) was surveyed on March 18, 1918 and
subsequently titled and registered in the name of Agustin Golloy. The
said lands, having been surveyed and thereafter registered, it follows
that monuments were placed therein to indicate their respective
boundaries. It is hardly persuasive that private respondents'
predecessor, Dominga Balanga, believing that she has a rightful claim
to the overlapped portions, did not make any move to question the
placement of the monuments. She could have easily objected to the
placement and pointed out that the placement of the monuments
excluded the overlapped portions from her property. However, no such
objection was made. These facts could only be construed to mean that
private respondents' predecessor, Dominga Balanga, never believed
that she has a right and legal claim to the overlapped portion. There
appears to be no evidence to support claims of repeated demands
against petitioner to refrain from cultivating the contested portion, much
less an action filed in court to enforce such demands. .
Besides, considering that petitioner and his predecessor or
predecessors have been in continuous possession in the concept of an
owner, for almost fifty (50) years (from August 15, 1919, when the
property was registered, up to February, 1966, when the private
respondents caused the placement of two (2) monuments inside his
land), the latter if they have any right at all to the overlapped portion,
are guilty of laches. .
In the case of Caragay-Layno vs. Court of Appeals (133 SCRA 718,
723- 724 [1984], this Court stated- .
Of significance is the fact, as disclosed by the evidence, that for twenty
(20) years from the date of registration of title in 1947 up to 1967 when
this suit for recovery of possession was instituted, neither the
deceased DE VERA up to the time of his death in 1951, nor his
successors-in-interest, had taken steps to possess or lay adverse
claim to the disputed portion. They may, therefore be said to be guilty
of laches as would effectively derail their cause of action. Administrator
ESTRADA took interest in recovering the said portion only when he
noticed the discrepancy in areas in the Inventory of Property and in the
title. .
The foregoing conclusion does not necessarily wreak havoc on the
indefeasibility of a Torrens title. For, mere possession of certificate of
title under the Torrens System is not conclusive as to the holder's true
ownership of all the property described therein for he does not by
virtue of said certificate alone become the owner of the land illegally
included. In a more recent case, the case of Lola vs. Court of Appeals
(145 SCRA 439, 449 [1986]), this Court ruled: .
We also agree with the petitioners that laches effectively bars the
respondent from recovering the lot in dispute. .
Although the defense of prescription is unavailing to the petitioners
because, admittedly, the title to Lot No. 5517 is still registered in the
name of respondent, still the petitioners have acquired title to it by
virtue of the equitable principle of laches due to respondent's failure to
assert her claims and ownership for thirty two (32) years. .

There are precedents for this ruling. In the following cases, we upheld
the equitable defense of laches and ruled that the long inaction and
delay of the title holder in assertings right over the disputed lot bars
him from recovering the same. .

PREMISES CONSIDERED, the decision of the Court of Appeals under

review is REVERSED and SET ASIDE and a new one rendered
ordering, private respondents to cause the segregation of the disputed
portion presently occupied by the petitioner Galicano Golloy and
reconvey the same to the latter and after the segregation to order the
Register of Deeds of Tarlac to issue a new certificate of title covering
said portion in favor of the petitioner. .

SO ORDERED. .
G.R. No. L-52064 December 26, 1984
JULIANA CARAGAY-LAYNO, Assisted by Her Husband, BENITO
LAYNO, petitioner,
vs.
HONORABLE COURT OF APPEALS and SALVADOR ESTRADA as
Administrator of the Estate of the Deceased, MARIANO DE
VERA, respondents.
MELENCIO-HERRERA, J.:
Respondent Appellate Court, then the Court of Appeal, affirmed in
toto the judgment of the former Court of First Instance of Pangasinan,
Branch III, at Dagupan adjudging private respondent entitled to recover
possession of a parcel of land and ordering petitioners, as defendants
below, to vacate the premises. Petitioners, as paupers, now seek a
reversal of that judgment.
It was established by a relocation survey that the Disputed Portion is a
3,732 square-meter-area of a bigger parcel of sugar and coconut land
(Lot No. 1, Psu-24206 [Case No. 44, GLRO Rec. No. 117]), with a total
area of 8,752 square meters, situated at Calasiao, Pangasinan. The
entire parcel is covered by Original Certificate of Title No. 63, and
includes the adjoining Lots 2 and 3, issued on 11 September 1947 in
the name of Mariano M. DE VERA, who died in 1951 without issue. His
intestate estate was administered first by his widow and later by her
nephew, respondent Salvador Estrada.
Petitioner, JULIANA Caragay, and the decedent, Mariano DE VERA,
were first cousins, "both orphans, who lived together under one roof in
the care of a common aunt."
As Administratrix, DE VERA's widow filed in Special Proceedings No.
4058 of the former Court of First Instance of Pangasinan, Branch III, an
Inventory of all properties of the deceased, which included "a parcel of
land in the poblacion of Calasiao, Pangasinan, containing an area of
5,417 square meters, more or less, and covered by Tax Declaration
No. 12664."
Because of the discrepancy in area mentioned in the Inventory as
5,147 square meters (as filed by the widow), and that in the title as
8,752 square meters, ESTRADA repaired to the Disputed Property and
found that the northwestern portion, subsequently surveyed to be
3,732 square meters, was occupied by petitioner-spouses Juliana
Caragay Layno and Benito Layno. ESTRADA demanded that they
vacate the Disputed Portion since it was titled in the name of the
deceased DE VERA, but petitioners refused claiming that the land
belonged to them and, before them, to JULIANA's father Juan
Caragay.
ESTRADA then instituted suit against JULIANA for the recovery of the
Disputed Portion (Civil Case No. D-2007), which she resisted, mainly
on the ground that the Disputed Portion had been fraudulently or
mistakenly included in OCT No. 63, so that an implied or constructive
trust existed in her favor. She then counterclaimed for reconveyance of
property in the sense that title be issued in her favor.
After hearing, the Trial Court rendered judgment ordering JULIANA to
vacate the Disputed Portion.
On appeal respondent Appellate Court affirmed the Decision in toto.
Before us, JULIANA takes issue with the following finding of
respondent Court:
Although Section 102 of Act 496 allows a Petition to compel a Trustee
to reconvey a registered land to the cestui que trust (Severino vs.
Severino, 44 Phil 343; Escobar vs. Locsin, 74 PhiL 86) this remedy is
no longer available to Juliana Caragay. Mariano de Vera's land, Lot 1,
Psu-24206, was registered on September 11, 1947 (Exhibit"C") and it
was only on March 28, 1967 when the defendants filed their original
answer that Caragay sought the reconveyance to her of the 3,732
square meters. Thus, her claim for reconveyance based on implied or
constructive trust has prescribed after 10 years (Banaga vs. Soler, L-
15717, June 30,1961; J.M. Tuason & Co. vs. Magdangal, L-15539,
Jan. 30, 1962; Alzona vs. Capunitan, 4 SCRA 450). In other words,
Mariano de Vera's Original Certificate of Title No. 63 (Exhibit "C") has
become indefeasible. 1
We are constrained to reverse.
The evidence discloses that the Disputed Portion was originally
possessed openly, continuously and uninterruptedly in the concept of
an owner by Juan Caragay, the deceased father of JULIANA, and had
been declared in his name under Tax Declaration No. 28694 beginning
with the year 1921 (Exhibit "2-C"), later revised by Tax Declaration No.
2298 in 1951 (Exhibit "2-B"). Upon the demise of her father in 1914,
JULIANA adjudicated the property to herself as his sole heir in 1958
(Exhibit "4"), and declared it in her name under Tax Declaration No.
22522 beginning with the year 1959 (Exhibit "2-A"), later cancelled by
TD No. 3539 in 1966 (Exhibit "2"). Realty taxes were also religiously
paid from 1938 to 1972 (Exhibits "3-A" to "3-H"). Tacking the previous
possession of her father to her own, they had been in actual open,
continuous and uninterrupted possession in the concept of owner for
about forty five (45) years, until said possession was disturbed in 1966
when ESTRADA informed JULIANA that the Disputed Portion was
registered in Mariano DE VERA's name.
To substantiate her claim of fraud in the inclusion of the Disputed
Portion in OCT No. 63, JULIANA, an unlettered woman, declared that
during his lifetime, DE VERA, her first cousin, and whom she regarded
as a father as he was much older, borrowed from her the Tax
Declaration of her land purportedly to be used as collateral for his loan
and sugar quota application; that relying on her cousin's assurances,
she acceded to his request and was made to sign some documents
the contents of which she did not even know because of her ignorance;
that she discovered the fraudulent inclusion of the Disputed Portion in
OCT No. 63 only in 1966 when ESTRADA so informed her and sought
to eject them.
Of significance is the fact, as disclosed by the evidence, that for twenty
(20) years from the date of registration of title in 1947 up to 1967 when
this suit for recovery of possession was instituted, neither the
deceased DE VERA up to the time of his death in 1951, nor his
successors-in-interest, had taken steps to possess or lay adverse
claim to the Disputed Portion. They may, therefore be said to be guilty
of laches as would effectively derail their cause of action. Administrator
ESTRADA took interest in recovering the said portion only when he
noticed the discrepancy in areas in the Inventory of Property and in the
title.
Inasmuch as DE VERA had failed to assert any rights over the
Disputed Portion during his lifetime, nor did he nor his successors-in-
interest possess it for a single moment: but that, JULIANA had been in
actual, continuous and open possession thereof to the exclusion of all
and sundry, the inescapable inference is, fraud having been
unsubstantiated, that it had been erroneously included in OCT No. 63.
The mistake is confirmed by the fact that deducting 3,732 sq. ms., the
area of the Disputed Portion from 8,752 sq. ms., the area of Lot 1 in
OCT No. 63, the difference is 5,020 sq. ms., which closely
approximates the area of 5,147 sq. ms., indicated in the Inventory of
Property of DE VERA. In fact, the widow by limiting the area in said
Inventory to only 5,147 sq. ms., in effect, recognized and admitted that
the Disputed Portion of 3,132 sq. ms., did not form part of the
decedent's estate.
The foregoing conclusion does not necessarily wreak havoc on the
indefeasibility of a Torrens title. For, mere possession of a certificate of
title under the Torrens System is not conclusive as to the holder's true
ownership of all the property described therein for he does not by
virtue of said certificate alone become the owner of the land illegally
included. 2 A Land Registration Court has no jurisdiction to decree a lot
to persons who have never asserted any right of ownership over it.
... Obviously then, the inclusion of said area in the title of Lot No. 8151
is void and of no effect for a land registration Court has no jurisdiction
to decree a lot to persons who have put no claim in it and who have
never asserted any right of ownership over it. The Land Registration
Act as well as the Cadastral Act protects only the holders of a title in
good faith and does not permit its provisions to be used as a shield for
the commission of fraud, or that one should enrich himself at the
expense of another. 3
JULIANA, whose property had been wrongfully registered in the name
of another, but which had not yet passed into the hands of third parties,
can properly seek its reconveyance.
The remedy of the landowner whose property has been wrongfully or
erroneously registered in another's name is, after one year from the
date of the decree, not to set aside the decree, but, respecting the
decree as incontrovertible and no longer open to review, to bring an
ordinary action in the ordinary court of justice for reconveyance or, if
the property has passed into the hands of an innocent purchaser for
value, for damages. 4
Prescription cannot be invoked against JULIANA for the reason that as
lawful possessor and owner of the Disputed Portion, her cause of
action for reconveyance which, in effect, seeks to quiet title to the
property, falls within settled jurisprudence that an action to quiet title to
property in one's possession is imprescriptible. 5 Her undisturbed
possession over a period of fifty two (52) years gave her a continuing
right to seek the aid of a Court of equity to determine the nature of the
adverse claim of a third party and the effect on her own title. 6
Besides, under the circumstances, JULIANA's right to quiet title, to
seek reconveyance, and to annul OCT. No. 63 accrued only in 1966
when she was made aware of a claim adverse to her own. It was only
then that the statutory period of prescription may be said to have
commenced to run against her, following the pronouncement in Faja
vs. Court of Appeals, supra, a case almost Identical to this one.

... Inasmuch as it is alleged in paragraph 3 of Frial's complaint, that

Felipa Faja has been in possession of the property since 1945 up to
the present for a period of 30 years, her cause of action for
reconveyance, which in effect seeks to quiet her title to the property,
falls within that rule. If at all, the period of prescription began to run
against Felipa Faja only from the time she was served with copy of the
complaint in 1975 giving her notice that the property she was
occupying was titled in the name of Indalecio Frial.

There is settled jurisprudence that one who is in actual possession of a

piece of land claiming to be owner thereof may wait until his
possession is disturbed or his title is attacked before taking steps to
vindicate his right, the reason for the rule being, that his undisturbed
possession gives him a continuing right to seek the aid of a court of
equity to ascertain and determine the nature of the adverse claim of a
third party and its effect on his own title, which right can be claimed
only by one who is in possession. No better situation can be conceived
at the moment for Us to apply this rule on equity than that of herein
petitioners whose mother, Felipa Faja, was in possession of the
litigated property for no less than 30 years and was suddenly
confronted with a claim that the land she had been occupying and
cultivating all these years, was titled in the name of a third person. We
hold that in such a situation the right to quiet title to the property, to
seek its reconveyance and annul any certificate of title covering it,
accrued only from the time the one in possession was made aware of
a claim adverse to his own, and it is only then that the statutory period
of prescription commences to run against such possessor.

WHEREFORE, the judgment under review is hereby REVERSED and

SET ASIDE, and another one entered ordering private respondent
Salvador Estrada, as Administrator of the Estate of the Deceased,
Mariano de Vera, to cause the segregation of the disputed portion of
3,732 square meters forming part of Lot No. 1, Psu-24206, Case No.
44, GLRO Rec. No. 117, presently occupied by petitioner Juliana
Caragay-Layno, and to reconvey the same to said petitioner. After the
segregation shall have been accomplished, the Register of Deeds of
Pangasinan is hereby ordered to issue a new certificate of title
covering said 3,732 sq. m. portion in favor of petitioner, and another
crtificate of title in favor of the Estate of the deceased, Mariano de Vera
covering the remaining portion of 5,0520 square meters. No costs.

SO ORDERED
G.R. No. L-26083 May 31, 1977
CONSUELO MALALUAN VDA. DE RECINTO, petitioner,
vs.
RUPERTO INCIONG and COURT OF APPEALS, respondents.
MARTIN, J.:
Petition for review on certiorari of the decision of the Court of Appeals
which reversed the decision of the trial court in a suit for recovery of
possession of a parcel of land.
Ruperto Inciong (hereinafter referred to as private respondent) is the
registered owner of a parcel of land located in Barrio Santol,
Mataasnakahoy, Batangas, with an area of 34,263 square meters
covered by Transfer Certificate of Title No. Rt-379 (T-211) of the
Register of Deeds of Batangas. The land was formerly Identified as Lot
No. 8151 of the Cadastral Survey in the area during the cadastral
proceedings from 1936 to 1940. Private respondent acquired this land
in 1946 by purchase from Matias Amurao. In 1961, after a relocation
survey of the land was effected it was discovered that its southern
boundary covering an area of 8,591 square meters was in the
possession of petitioner, Consuelo Malaluan Vda. de Recinto. In due
time private respondent filed an action for recovery of possession of
the portion held by the petitioner. In her answer to private respondent's
complaint, petitioner claimed to be the owner of the area in question
and as counter-claim demanded its reconveyance from the private
respondent.
After trial, the lower court rendered judgment declaring the petitioner to
be the lawful owner of the land in question and ordering private
respondent to execute a deed of reconveyance over the same in favor
of petitioner. However, on appeal said judgment was reversed by the
Court of Appeals in a decision the dispositive portion of which, reads:
WHEREFORE, the judgment rendered by the trial court is hereby
ordered reversed, and another one entered, by ordering defendant-
appellee to return that portion of 8,591 square meters of the land in
question to plaintiff-appellant; to pay damages in the sum of P100.00 a
month from the time of the filing of the action until the property is
returned; to pay further the sum of P1,000.00 for attorney's fees; and
for defendant to pay the costs in both instances.
A motion to reconsider said decision proved unavailing. Hence, this
petition for review, petitioner faulting the Court of Appeals
I. IN NOT CONSIDERING THAT IT WAS THRU ERROR THAT THE
AREA IN DISPUTE WAS INCLUDED IN THE TITLE OF
RESPONDENT RUPERTO INCIONG AND HIS PREDECESSORS,
AND THAT THE DECREE OF REGISTRATION WAS NULL AND
VOID AB INITIO WITH RESPECT TO SAID AREA;
II. IN NOT CONSIDERING THAT THE LAND IN QUESTION WAS
NOT INCLUDED IN THE SALE BY MATIAS AMURAO TO
RESPONDENT RUPERTO INCIONG, AND THAT IT HAS NOT YET
PASSED INTO THE HANDS OF AN "INNOCENT PURCHASER FOR
VALUE";
III. IN NOT SEEING THAT RESPONDENT RUPERTO INCIONG, IN
CLAIMING THE LAND IN QUESTION, IS ACTING IN BAD FAITH
AND TRYING TO ENRICH HIMSELF AT THE EXPENSE OF
PETITIONER;
IV. IN DECLARING IN EFFECT THAT PETITIONER'S EXHIBIT "4",
DEED OF DONATION PROPTER NUPTIAS AND EXHIBIT "3-A",
DEED OF SALE, ARE INVALID AND WITHOUT LEGAL FORCE AND
EFFECT;
V. IN REVERSING THE DECISION OF THE TRIAL COURT.
It is evident from the records that the area in dispute is a part of the
land formerly owned by Petronilo Acar. On March 11, 1918, Petronilo
Acar sold the same to the spouses Mariano Recinto and Marta
Magsumbol (Exhibit 3-A). On July 2, 1931, said spouses conveyed the
said property by way of a donation propter nuptias to petitioner
Consuelo Malaluan Vda, de Recinto and her late husband, Juanario
Recinto. Since then, petitioner and her late husband have been in
open, public and continuous possession of the entire property including
that portion now in question which adjoins private respondent's land on
the north. The adjoining lands have since then been separated by a
fence consisting of morado, madre cacao, antipolo and other kinds of
living trees. The land north of the disputed area which is now in the
name of the private respondent was previously owned by Norberto
Leyesa, the Templos, Atty. Ponciano Hernandez and Matias Amurao.
All of these previous owners of the land admitted that they recognize
the fence of the property in question and disclaimed any interest or
right over the disputed portion. Private respondent acquired his land
from Matias Amurao while the latter purchased the same from Atty.
Ponciano Hernandez. Atty. Hernandez disclosed that the area he
acquired from his predecessor-in-interest was only that parcel north of
the disputed area separated by the fence (Exhibit I) and that he never
exercised nor claimed any right over the land in question. Said land
was the same piece of land that he sold to Matias Amurao who also
had only occupied the same area and did not go over the dividing line.
The only boundary that Matias Amurao could point to the private
respondent as separating the land that he was then selling from that
owned by petitioner was the fence (Exhibit I). It was also the same
parcel of land which Matias Amurao conveyed to private respondent in
1946. During the ocular inspection conducted by the trial court it was
found out that the disputed portion and the land adjoining it on the
north (private respondent's) are separated by a long fence consisting
of morado, madre cacao, antipolo and other kinds of trees which could
not be less than 25 years old, with a single line of a rusty barbed wire.
Inside the disputed area were coconut trees and other plants similar to
those found in the land of the petitioner but different from those
improvements in the land of the private respondent.
As found by the trial court the preponderance of evidence shows that
the area in question has been erroneously included in the cadastral
survey of Lot No. 8151 and in the original certificate of title without the
knowledge of the, parties concerned. As a result, the same description
in the original certificate of title was carried over into the succeeding
transfer certificates of title of the subsequent owners covering the
same parcel of land. This is confirmed by the fact that private
respondent's predecessors-in-interest and later, private respondent
himself, have all along treated the area in question as belonging to the
petitioner. What seemed to have prompted private respondent to get
interested over the disputed area was when he came to learn after the
relocation survey in 1961 that said disputed area was included in his
title. Obviously then, the inclusion of said area in the title of Lot No.
8151 is void and of no effect for a land registration Court has no
jurisdiction to decree a lot to persons who have put no claim in it and
who have never asserted any right of ownership over it. 1 the Land
Registration Act as well as the Cadastral Act protects only the holders
of a title in good faith and does not permit its provisions to be used as
a shield for the commission of fraud, or that one should enrich himself
at the expense of another.
Resort to the provisions of said Acts do not give one a better title than
he really and lawfully has. 2 In the case at bar, private respondent
could not have acquired an area more than what was actually
conveyed to him by Matias Amurao which extended only as far as the
dividing fence on the south thereof (Exhibit I). The mere possession of
a certificate of title under the Torrens system does not necessarily
make the possessor a true owner of all the property described therein
for he does not by virtue of said certificate alone become the owner of
the land illegally included. 3It is evident from the records that the
petitioner owns the portion in question and therefore the area should
be conveyed to her.
The remedy of the land owner whose property has been wrongfully or
erroneously registered in another's name is, after one year from the
date of the decree, not to set aside the decree, but, respecting the
decree as incontrovertible and no longer open to review, to bring an
ordinary action in the ordinary court of justice for reconveyance or, if
the property has passed into the hands of an innocent purchaser for
value, for damages. 4 This was what petitioner did. But was private
respondent an innocent purchaser for value? We can hardly consider
private respondent one because at the time he purchased the land
covered by the certificate of title now in his hands he was aware that
the disputed portion was not included in the area conveyed to him by
Matias Amurao. This is clearly evident when he acknowledged as the
true boundary the one (Exhibit I) pointed to him by Matias Amurao.
between his land and the disputed portion by not raising any question
about it and not disturbing the possession of the petitioner over the
area in dispute for almost 15 years. A purchaser in good faith is one
who buys the property of another without notice that some other
person has a right to, or interest in, such property and pays a full and
fair price for the same, at the time of such purchase, or before he has
notice of the claim or interest of some other person in the property. 5
In its decision, the Court of Appeals underscored the alleged defects in
the deed of sale executed by Petronilo Acar in favor of the spouses
Marta Magsumbol and Mariano Recinto, in 1918 (Exhibit 3-A) and of
the donation propter nuptias made by the latter in favor of the petitioner
and her late husband, Juanario Recinto, in 1931 as having
substantially weakened the case of the latter. It appears that the deed
of sale executed by Petronilo Acar was not registered in the office of
the Register of Deeds and that the donation propter nuptias was only
embodied in a private instrument. We note, however, that said alleged
defects were not raised in issue by the private respondent before the
trial court. Hence, it was improper for the Court of Appeals to have
considered them as the same could not have even been raised for the
first time on appeal. 6
As to the claim of private respondent that petitioner's action for
reconveyance of the land in the form of a counterclaim has long been
barred by prescription. suffice it to state that private respondent and his
predecessors-in-interest have never possessed the land in question
nor claimed it to be their own and if private respondent ever claimed it
after fifteen (15) years from the time he acquired the land covered by
his title, it was because the same was erroneously included in his
title. 7 Moreover, the defense of prescription interposed by the private
respondent cannot be entertained as it has been raised only for the
first time in this instance. 8

IN VIEW OF ALL THE FOREGOING, the decision of the respondent

Court of Appeals is hereby reversed and set aside and another one
entered, ordering private respondent to return to petitioner the disputed
portion of the land in question covering an area of 8,591 square
meters; to pay petitioner damages in the sum of 100.00 a month from
the time of the filing of the action until the property is returned and the
sum of P1,000.00 for attorney's fees. The Register of Deeds of
Batangas is further ordered to segregate said disputed portion from the
entire portion embraced by Transfer Certificate of Title No. Rt-379 (T-
211) and issue anew certificate of title in favor of petitioner over said
disputed portion and another new certificate of title over the remaining
portion of the land in question in favor of private respondent after
cancelling Transfer Certificate of Title No. Rt-379 (T-211). With costs
against private respondent.

SO ORDERED.
G.R. No. L-30240 March 25, 1988
REPUBLIC OF THE PHILIPPINES as Lessor, ZOILA DE CHAVEZ,
assisted by her husband Col. Isaac Chavez, DEOGRACIAS
MERCADO, ROSENDO IBANEZ and GUILLERMO MERCADO, as
permittees and/or Lessees of public fishponds, petitioners,
vs.
HON. JUDGE JAIME DE LOS ANGELES of the court of First
Instance of Batangas, (BR. III, Balayan) [later replaced by JUDGE
JESUS ARLEGUI] SHERIFF OF BATANGAS, ENRIQUE ZOBEL and
THE REGISTER OF DEEDS AT BALAYAN,
BATANGAS, respondents.
TEEHANKEE, C.J.:
The moment of truth is finally at hand. It is about time to cause the
execution in favor of the Republic of the Philippines of the 1965 final
and executory judgment of this Court (Republic vs. Ayala y Cia
) 1affirming that of the CFI of Batangas in Civil Case No. 373 thereof
and to recover for the Republic what "Ayala y Cia Hacienda de
Calatagan and/or Alfonso Zobel had illegally expanded [in] the original
area of their TCT No. 722 (derived from OCT No. 20) from 9,652.583
hectares to about 12,000 hectares thereby usurping about 2,000
hectares consisting of portions of the territorial sea, the foreshore, the
beach and navigable waters properly belong(ing) to the public
domain."2
The Court's decision in said case found that
We have gone over the evidence presented in this case and found no
reason to disturb the factual findings of the trial court. It has been
established that certain areas originally portions of the navigable water
or of the foreshores of the bay were converted into fishponds or sold
by defendant company to third persons. There is also no controversy
as to the fact that the said defendant was able to effect these
sales after it has obtained a certificate of title (TCT No. 722) and
prepared a "composite plan" wherein the aforesaid foreshore areas
appeared to be parts of Hacienda Calatagan. Defendants- appellants
do not deny that there is an excess in area between those delimited as
boundaries of the hacienda in TCT No. 722 and the plan prepared by
its surveyor. This, however, was justified by claiming that it could have
been caused by the system (magnetic survey) used in the preparation
of the original titles, and, anyway, the excess in area (536 hectares,
according to defendants) is within the allowable margin given to a
magnetic survey.
But even assuming for the sake of argument that this contention is
correct, the fact remains that the areas in dispute (those covered by
permits issued by the Bureau of Fisheries), were found to be portions
of the foreshore, beach, or of the navigable water itself And, it is an
elementary principle of law that said areas not being capable of
registration, their inclusion in a certificate of title does not convert the
same into properties of private ownership or confer title on the
registrant. 3
The Solicitor General's Memorandum 4 further points out
... that the modus operandi in said usurpation, i.e. grabbing lands of
the public domain, was expressly made of record in the case of Dizon
v. Rodriguez, 13 SCRA 704 (April 30, 1965), where it was recounted
that Hacienda de Calatagan, owned by Alfonso and Jacobo Zobel, was
originally covered by TCT No. 722, and that in 1948, upon the
cessation of their sugar mill operations, the hacienda owners
converted the pier (used by vessels loading sugar) which stretched to
about 600 meters off the shore into the navigable waters of the
Pagaspas Bay" into a fishpond dike by enclosing 30 and 37 hectares of
the bay on both sides of the pier in the process.
Subsequently, in 1949, the owners of the hacienda ordered its
subdivision which enabled them to acquire titles to the subdivided lots
which were outside the hacienda's perimeter. Thus, these subdivided
lots, which were converted into fishponds were illegally absorbed as
part of the hacienda and titled in the name of Jacobo Zobel which were
subsequently sold and transferred to the Dizons, Gocos and others. In
said Dizon case, "this Honorable Court affirmed the court a quo's
findings that the subdivision plan was prepared not in accordance with
the technical description in TCT No. 722 but in disregard of it." And that
the appropriated fishpond lots "are actually part of the territorial waters
and belong to the State.
But all through the years, as stressed in the Republic's memorandum,
"the technical maneuvers employed by Ayala and Zobel [of which the
instant petition is an off-shoot] .... undercut the Republic's efforts to
execute the aforesaid 1965 final judgment" 5 to recover the estimated
2,000 hectares of territorial sea, foreshore, beach and navigable
waters and marshy land of the public domain.
It may seem incredible that execution of such 1965 final judgment in
favor of the Republic no less could have been thwarted for twenty-
three years now. But the Republic's odyssey and travails since 1965
through the martial law regime to now are recorded in the annals of our
jurisprudence. Suffice it to point out that upon petition of the Republic
and its co- petitioners (as permittees and/or lessees of the Republic),
mandamus was issued on June 30, 1967 by unanimous decision with
one abstention in Republic vs. De los Angeles, 6 overruling the therein
respondent-judge's refusal to issue a writ of execution of the aforesaid
1965 final judgment and ordering him to issue such writ. The Court
denied reconsideration on September 19, 1967, but on a second and
supplemental motion for reconsideration, it set aside the original
decision of Jane 30, 1967 and dismissed the petition for mandamus
and denied execution, per its Resolution of October 4, 1971 by a split
6-3-2 vote. 7 The court denied the Republic, et al motions for
reconsideration by the same split 6-3-2 vote per its Resolution of April
11, 1972. 8 An undermanned Court subsequently denied the Republic's
co-petitioner Tolentino's second motion for reconsideration for lack of
necessary votes per its Resolution of April 27, 1973.9
Parenthetically, the complexity magnitude and persistence of
respondents' maneuvers are set forth in the series of decisions and
extended resolutions and majority and dissenting opinions reported in
the Supreme Court Reports Annotated as per the citations
hereinabove given. A reading of said reports together with the
Memorandum for Granting of the Petition at bar (and giving the case's
backgrounder) which I had circulated in the Court as against the
proposed contrary draft of Justice Estanislao A. Fernandez (which did
not gain the concurrence of the majority of the Court during his
seventeen-month incumbency from October 20, 1973 to March 28,
1975) shows the full extent background and scope of these
maneuvers, particularly those in the present case. For the sake of
brevity and conciseness, I attach the said Memorandum as Annex A
hereof and make the same an integral part of this decision, instead of
reproducing the same in the body of this opinion.
Pending respondents' maneuvers in this Court for thwarting the
issuance of a writ for execution of the aforesaid 1965 final judgment for
the Republic's recovery of land and waters of the public domain in the
1967 mandamus case brought by the Republic, supra, they intensified
their maneuvers to defeat the Republic's judgment for recovery of the
public lands and waters when they got the trial judge, notwithstanding
this Court's final 1965 judgment for reversion of the public lands, to
uphold their refusal to recognize the rights of the Republic's public
fishponds permittees and/or lessees to the lands leased by the
Republic to them. Thus, the Republic as lessor and said
permittees/lessees as co-petitioners filed through then Solicitor
General Antonio P. Barredo their Amended Complaint of August 2,
1967 in Civil Case No. 653 against herein respondent Enrique Zobel
as defendant and the Register of Deeds of Batangas. As summarized
by the Solicitor General in his Memorandum of June 1, 1984:
Respondent Zobel had ousted Zoila de Chavez, a government's
fishpond permittee from a portion of the subject fishpond lot described
as Lot 33 of Plan Swo-30999 (also known as Lots 55 and 66 of
subdivision TCT No. 3699) by bulldozing the same, and threatened to
eject fishpond permittees Zoila de Chavez, Guillermo Mercado,
Deogracias Mercado and Rosendo Ibaez from their respective
fishpond lots described as Lots 4, 5, 6 and 7 and Lots 55 and 56, of
Plan Swo-30999, embraced in the void subdivision titles TCT No. 3699
and TCT No. 9262 claimed by said respondent. Thus, on August 2,
1967, the Republic filed an Amended Complaint captioned Accion
Reinvidicatoria with Preliminary Injunction" against respondent Zobel
and the Register of Deeds of Batangas, docketed as Civil Case No.
653, for cancellation of Zobel's void subdivision titles TCT No. 3699
and TCT No. 9262, and the reconveyance of the same to the
government; to place aforenamed fishpond permittees in peaceful and
adequate possession thereof; to require respondent Zobel to pay back
rentals to the Republic; and to enjoin said respondent from usurping
and exercising further acts of dominion and ownership over the subject
land of public domain;
Respondent Zobel, however, filed a Motion to Dismiss Amended
Complaint, dated August 16, 1967, contendinginter alia that said
Amended Complaint (Civil Case No. 653) is barred by prior judgment
in Civil Case No. 373 (G.R. No. 20950, the 1965 final judgment in favor
of the Republic), and arguing that "if TCT Nos. T-3699 and T-9262 had
been declared null and void in Civil Case No. 373, the proper
procedure would be to secure the proper execution of the decision in
the same proceedings and not thru the filing of a new case." He further
contended "that there is another action pending between the same
parties for the same cause," and points to the abovementioned
mandamus case, G.R. No. 26112 anent execution of Civil Case No.
373 as the said pending case. His aforesaid motion, however, was
denied by the trial court in its order of December 13, 1967, and
accordingly he was required to file his answer.
But in his answer with counterclaim, respondent Zobel averred, among
others, that the subject TCT Nos. 3699 and 9262 registered in his
name are valid and subsisting since in the decision under G. R. No. L-
20950 "only TCT No. T-9550 was specifically declared as null and void
and no other;" and that when Civil Case No. 373 was docketed,
respondent Enrique Zobel "was and still is at present one of the
members and managing .ng partners of Ayala y Cia one of the
defendants in the 91 said civil case, and, therefore, privy thereto." He
then prayed for a writ of preliminary mandatory injunction restoring to
him possession of the subject land, and further prayed for judgment
ordering Zoila de Chavez and Guillermo Mercado to vacate the
premises in question and to surrender possession thereof to defendant
Zobel. This was unfortunately granted by respondent Judge De los
Angeles per the impugned order at bar of October 1, 1968. (Annex D,
petition). Hence, the filing of the instant petition.
On March 7, 1969, the Court issued a restraining order in the case at
bar, enjoining respondent judge from enforcing the writ of preliminary
mandatory injunction until further orders.
While G.R. No. L-26112 re: execution) and G.R. No. L-30240 (the case
at bar) were pending, the Republic filed its motion of July 8, 1970 in
Civil Case No. 373, for authority to conduct the necessary resurvey of
the lands affected so as to properly segregate from Ayala and Zobel's
private land originally covered by TCT No. 722 the areas outside
thereof comprising about 2,000 hectares of public land, beach,
foreshore and territorial sea. Ayala and Zobel vigorously opposed the
same, contending again that the proper step for the government was to
ask for a writ of execution; that no other subdivision titles, besides TCT
No. T- 9550 were really declared null and void in the 1965 judgment;
and that the lower court could not make a ruling on the motion for
resurvey "without requiring the presentation of additional evidence, and
that, in effect, would be tantamount to reopening a case where the
judgment is already final and executory and that the Government's
failure to seek a "clarification of the decision to find out what other titles
should have been declared null and void" precludes it from doing so
now, I since the decision is now final and executory." The respondent
judge, having earlier denied execution of the 1965 final judgment,
issued his order of October 27, 1970 denying the Government's motion
for authority to conduct such prerequisite re-survey;
Ayala and Zobel's technical maneuvers to impede execution of the
1965 final judgment again bore fruit, as above indicated, when their
second motion for reconsideration in G.R. No. L26112 was granted by
a split Court in a Resolution dated October 4, 1971 (41 SCRA 422). As
a result, the earlier decision of June 30, 1967 directing the issuance of
the writ of execution was set aside and the Republic's petition for
certiorari and mandamus impugning the lower court's quashal and
denial of the writ of execution was dismissed.
While the Court's new majority denied the Republic's motion for
reconsideration of aforesaid resolution, per its resolution of April 11,
1972, it, however, made the important modification that said denial
"does not constitute a denial of the right of the Republic to the
cancellation of the titles nullified by the decision of Judge Tengco (in
Civil Case No. 373) affirmed by this Court (in G.R. No. L-20950)." It
also stated that: "(E)ven the (trial court's) order of October 27, 1970
about the resurvey merely held the remedy to be premature until the
decision in this case has become final. Of course, it is understood that
in such eventuality, the resurvey requested by the Provincial
Fiscal would be in order and as soon as the same is completed, the
proper writ of execution for the delivery of possession of the portions
found to be public land should issue." (G.R. No. I, 26112, 44 SCRA
255, 262 [19721) Thus, the majority's denial of the motions for
reconsideration was made expressly "with the clarification aforemade
of the rights of the Republic."
[Note: My attached Memorandum, Annex A hereof (at pages 2 to 6
thereof), quotes more extensively the same pronouncements of
the ponente, Justice Villamor, speaking for the majority, that the
Resolution simply cancelled out the final damage award in favor of
intervenor Tolentino, as government permittee/lessee it covers as well
similar pronouncements from Justice Makalintal in his separate
concurrence that "The resolution in no way affects the rights of the
Government as declared in the decision," and Justice Barredo's
separate concurrence that "I am sure that the five justices whom I am
joining in denying Petitioners motion for reconsideration are as firm as
the three distinguished dissenters in the resolution not to allow this
Court to be an instrument of land-grabbing as they are against the
reversal or even modification in any substantial degree of any final and
executory judgment whether of this Court or any other court in this
country, and, that if there were such possibilities in consequence of the
resolution of October 4, 1971 and the present resolution of denial, they
would not give their assent to said resolutions. We are certain that in
deciding against Petitioner Tolentino, We are not condoning nor
permitting that the lands in question remain with the Dizons or with "the
Ayalas."
In my dissenting opinion, I expressed gratification that the dissents
(submitted by then Chief Justice Roberto Concepcion and myself, both
concurred in by Justice J.B.L. Reyes) had contributed to the overriding
clarification "that the majority's position although it denies
reconsideration and maintains reversal of the June 30, 1967 decision
at bar-is that the Government may now finally effect reversion and
recover possession of all usurped areas of the public domain "outside
(Ayala's) private land covered by TCT No. 722, which including the lots
in T-9550 (Lots 360, 362, 363 and 182) are hereby reverted to public
dominion." (Paragraph [al of 1965 judgment). 10
After said G.R. No. L-26112 was finally disposed of, herein petitioner
filed in Civil Case No. 373, a "Motion to Re-survey." This was granted
in an Order dated August 21, 1973, as well as in the Orders of
December 27, 1973 and February 26, 1974, respectively. About three
(3) years later, a Report on the Re-survey dated August 5, 1977
(Annex "A" to Republic's Comment dated March 30, 1981), as well as
the "Final Report" thereon dated September 2, 1977 and the
"Resurvey Plan" (Annexes "B" and "C", Ibid.) were approved by the
Director of Lands and the Secretary of Agriculture and Natural
Resources. The Re-survey further confirmed the uncontroverted fact
that the disputed areas in the case at bar form part of the expanded
area already reverted to public dominion.
Upon approval of said Re-survey Plan and Report, petitioner submitted
the same to the trial court in Civil Case No. 373. However,
notwithstanding its approval by the Director of Lands, and the
Secretary of Agriculture and Natural Resources, Judge Jesus P.
Arlegui [who had been assigned to respondent Judge De los Angeles"
court in Batangas upon the latter's retirement] arrogating unto himself
the function which properly belongs to the Director of
Lands, disapproved the said Report and Re-survey Plan, thereby
preventing execution of the subdivision (a) of the decision in Civil Case
No. 373. In effect, such disapproval by Judge Arlegui was intended to
negate the earlier resolution in G.R. No. L-26112 (44 SCRA 255, 263)
that as soon as resurvey "is completed the proper writ of execution for
the delivery of possession of the portions found to be public land
should issue;"
Earlier, in Civil Case No. 653, respondent Zobel filed on July 10, 1969
a Motion to Suspend Further Hearing, etc., praying that the hearings in
said Civil Case be indefinitely suspended until the case at bar is
resolved by this Honorable Court. He contended that the issues raised
in the case at bar are the very issues pending in the case below, Civil
Case No. 653, and that the decision that the Court renders here "would
greatly affect the respective claims of said parties in (said) case." (G.R.
No. 1, 46396, Record, pp. 128-130)
The aforesaid motion was followed by respondent Zobel's Motion for
Immediate Resolution of Defendant-Movant's Motion to Suspend, etc.,
dated August 20, 1969. An opposition thereto was filed by plaintiff
therein and a reply was filed in turn by respondent Zobel on July 30, 1
969. Acting on the said motions, the trial court issued an order on
September 2, 1969 giving the parties certain periods to file their
pleadings and cancelling a scheduled hearing until it shall have
resolved the motion to suspend.
Since that time, however, the trial court chose not, or failed, to act
formally on the aforesaid motion to suspend hearings. Then after five
(5) years, with the trial court now presided by Judge Arlegui,
respondent Zobel flip-flopped and filed a Motion to Dismiss the case
below dated January 14, 1976, claiming alleged failure to prosecute
and res judicata, which was vigorously opposed by herein petitioner.
Judge Arlegui, robot-like, nonetheless dismissed the Republic's
complaint for Zobel's alleged grounds of failure to prosecute for an
unreasonable length of time and res judicata per his order of January
12, 1977.
A 35-page motion for reconsideration thereof was filed by Petitioner
within the extended period sought for in an earlier motion. The then
Presiding Judge Arlegui summarily denied the motion for extension of
time earlier filed, per its order of March 3, 1977.
The "Motion for Reconsideration of Order" dated March 3, 1977, and
"Supplement to Motion for Reconsideration of Order" dated March
3,1977, were similarly denied by Judge Arlegui in his order dated June
14, 1977. Petitioner Republic thus elevated the matter to this Court by
certiorari and mandamus which was docketed as G.R. No. L-
46396 11 and asked that it be consolidated with the case at bar which
from the beginning was assigned to the Court en banc. However, G.R.
No. L-46396 was somehow assigned to the Second Division of the
Court which peremptorily dismissed the petition per its minute
resolution dated December 1 7, 1977, which reads:
Acting on the petition for certiorari and mandamus in this case as well
as the comment thereon of the private respondent and the reply of
petitioner and rejoinder thereto of said respondent, the Court resolved
to DISMISS the petition, considering that although the motion for
extension of time to file a motion for reconsideration of petitioner dated
February 19, 1977 may be deemed as filed within the reglementary
period for appeal, the same did not suspend said period which expired
on February 21, 1977 (Gibbs v. Court of First Instance of Manila, 80
Phil. 160, where the appeal albeit late by one day, was nevertheless
allowed on the ground that under the peculiar circumstances of the
case showing utmost effort on the part of appellant to make the same
on time, there was excusable neglect, which does not obtain here)
because "the petition for extension of time should not .interrupt the
period fixed by law for the taking of the appeal" on the ground that "the
only purpose of said petition is to ask the court to grant an additional
period to that fixed by law to that end." (Alejandro v. Endencia 64 Phil,
321)
Soon after the dismissal of the petition in G.R. No. 46396, respondent
Zobel filed in this case a "Motion to Dismiss Petition" and
"Manifestation and Motion to Lift Temporary Restraining Order" issued
on March 7, 1969, and another supplemental motion, on the ground
that the instant case has become moot and academic by the dismissal
of the complaint in Civil Case No. 653 in the court below. This was
refuted by the herein petitioner in its Comment dated March 30, 1981.
On December 15, 1981, Judge Arlegui precipitately rendered in Civil
Case No. 653 a decision on the Counterclaim of herein respondent
Zobel, declaring him the true, absolute and registered owner of the
lands covered by Transfer Certificate of Title Nos. 3699, T-7702 and
9262 (now No. 10031) and directing the Government's licensees and
permittees occupying the same to vacate the lands held by them.
Subsequently, on March 9, 1982, Judge Arlegui issued a writ of
execution in Civil Case No. 653, prompting the heirs of Guillermo
Mercado to file in this case an Urgent Motion dated March 22,1982 to
stay the same. Acting on the Urgent Motion, the "Court issued another
restraining order dated June 17, 1982, emphasizing the necessity
therefor in this wise:
... the issuance of the restraining order now prayed for by movants-
heirs of Guillermo Mercado is necessary to retain the status quo since
whatever rights they have are only in representation of the petitioner
Republic who claims the said lands by virtue of their reversion to the
public dominion as specifically adjudged by this court in G.R. No. L-
26112.,
Respondent Zobel then moved for a reconsideration and lifting of
aforesaid restraining order. The heirs of intervenor Zoila de Chavez on
the other hand, moved for a preliminary mandatory injunction to restore
them in possession of a Portion of the land in dispute from where they
had been ousted by virtue of the writ of execution issued in Civil Case
No. 653.
In a Consolidated Comment dated September 30, 1982, petitioner
Republic opposed the said motion of respondent Zobel, and at the
same time concurred with the motion filed by the heirs of Zoila de
Chavez for the issuance of a writ of preliminary mandatory injunction.
On or about November 8, 1983, the heirs of intervenor Guillermo
Mercado filed an "Urgent Motion for Contempt and Issuance of a
Temporary Restraining Order, etc.," as respondent Zobel's
representative, in spite of the restraining order enjoining them from
enforcing the writ of execution, had begun to acquire possession of the
land in question by cutting off trees in the undeveloped fishpond being
leased by Mercado from the 7 government.
On November 10, 1983, the Court issued the corresponding restraining
order prayed for "enjoining respondent Enrique Zobel or his duly
authorized representative from further cutting off the trees in the
undeveloped fishpond of Guillermo Mercado having an area of two (2)
hectares, more or less, and from hauling the big trees already cut off
costing P10,000.00 "Resolution dated November 13, 1983).
On or about November 23, 1983, the heirs of Guillermo Mercado filed
a "Second Urgent Motion for Contempt and a Second Restraining
Order, etc." since, in spite of the foregoing restraining order issued by
this Court, respondent Zobel and his agent were still cutting off the
trees in the disputed areas.
On December 6, 1983, after the hearing en banc of this case on the
merits, a resolution was rendered by this Court "to ISSUE a second
temporary restraining order enjoining respondent Enrique Zobel and
his agents, representatives and/or any other person or persons acting
on his behalf to desist from cutting off or removing any tree in the
questioned areas which were declared reverted to the public domain
and which are claimed by the Republic, effective immediately and until
further orders by the Court.
Against this background, respondent Zobel now contends that his TCT
No. 3699 and TCT No. 9262 (now T-10031) are valid and subsisting as
said titles "cannot be considered automatically annulled" by the
decision in G.R. No. L-20950; that the decision in G.R. No. L-20950
annulled only TCT No. 9550 and no other; that he cannot be bound by
the decision in said G.R. No. L-20950 since he was not a party thereto;
that the dismissal of Civil Case No. 653 and of the appeal therefrom by
the Republic has quieted his questioned titles and has rendered the
instant petition moot and academic; that the decision on his
counterclaim in Civil Case No. 653 declaring him to be the true and
registered owner of the subject land had long become final and
executory, and that under the principle of res judicata the present
petition ought to be dismissed; and that intervenors Mercado and
Chavez have no right of possession over the land in question.
The Republic's petition is patently meritorious.
1. On the original issue at bar brought against respondent Judge
Angeles" issuance of preliminary mandatory injunction per the
questioned Order of October 1, 1968, petitioner Republic and its co-
petitioner licensees are manifestly entitled to the restraining orders
issued by the Court on March 7, 1969 enjoining respondent judge from
enforcing the preliminary mandatory injunction that he had issued that
would oust the Republic and its licensees from the public lands in
question and transfer possession thereof to respondent Zobel; that
issued on June 17, 1982 enjoining enforcement of respondent Judge
Arlegui's writ of execution issued on March 9, 1982 declaring without
trial respondent Zobel (on his counterclaim to the dismissed complaint)
as the true and registered owner of the lands covered by TCT Nos.
3699, 7702 and 9262 (now 10031) and directing the Republic's
licensees to vacate the same; and that issued on December 6, 1983
after the hearing on the merits, "enjoining respondent Enrique Zobel
and his agents, representatives and/ or any other person or persons
acting on his behalf to desist from cutting off or removing any tree in
the questioned areas which were declared reverted to the public
domain and which are claimed by the Republic."
Respondent Judge Arlegui, after he succeeded Judge Angeles as
presiding judge, committed the gravest abuse of discretion, when,
instead of granting the preliminary injunction sought by the Republic
and its co-petitioners to enjoin respondent Zobel from usurping lands
of the public domain covered by his voided expanded subdivision titles,
he dismissed the complaint on January 12, 1977 and almost four years
later on December 15, 1981, without any trial, granted said
respondent's counter prayer in his Answer to the complaint in Civil
Case No. 653 for the issuance of a mandatory injunction upon a
P10,000.00 bond to oust petitioner Republic and its permittees and/or
lessees from the property and to deliver possession thereof to
respondent Zobel. It is settled doctrine that as a preliminary mandatory
injunction usually tends to do more than to maintain the status quo, it is
generally improper to issue such an injunction prior to the final hearing
and that it may issue only in cases of extreme urgency, where the right
is very clear. 12
Contrary to respondent Zobel's assertion, the 1965 final judgment in
favor of the Republic declared as null and void, not only TCT No. 9550,
but also "other subdivision titles" issued over the expanded areas
outside the private land of Hacienda Calatagan covered by TCT No.
722. As shown at the outset,13 after respondents ordered subdivision of
the Hacienda Calatagan which enabled them to acquire titles to
and "illegally absorb" the subdivided lots which were outside the
hacienda's perimeter, they converted the same into fishponds and sold
them to third parties, But as the Court stressed in the 1965 judgment
and time and again in other cases, 'it is an elementary principle of law
that said areas not being capable of registration, their inclusion in a
certificate of title does not convert the same into properties of private
ownership or confer title on the registrant." 14 This is crystal clear from
the dispositive portion or judgment which reads:
WHEREFORE, judgment is hereby rendered as follows:
(a) Declaring as null and void Transfer Certificate of Title No. T 550 (or
Exhibit "24") of the Register of Deeds of the Province of Batangas
and other subdivision titles issued in favor of Ayala y Cia and/or
Hacienda de Calatagan over the areas outside its private land covered
by TCT No. 722, which including the lots in T-9550 (lots 360, 362, 363
and 182) are hereby reverted to public dominion."
This final 1965 judgment reverting to public dominion all public lands
unlawfully titled by respondent Zobel and Ayala and/or Hacienda
Calatagan is now beyond question, review or reversal by any court,
although as sadly shown hereinabove, respondents' tactics and
technical maneuvers have all these 23 long years thwarted its
execution petition and the Republic's recovery of the lands and waters
of the public domain.
Respondent Zobel is bound by his admission in his Answer to the
Complaint below that when Civil Case No. 373 was docketed, he "was
and still is at present one of the members and managing partners of
Ayala y Cia one of the defendants in the said civil case, and, therefore.
privy thereto."
Clearly, the burden of proof lies on respondent Zobel and other
transferees to show that his subdivision titles are not among the
unlawful expanded subdivision titles declared null and void by the said
1965 judgment. Respondent Zobel not only -did not controvert the
Republic's assertion that his titles are embraced within the phrase
"other subdivision titles" ordered cancelled but failed to show that the
sub division titles in his name cover lands within the original area
covered by Ayala's TCT No. 722 (derived from OCT No. 20) and not
part of the beach, foreshore and territorial sea belonging and ordered
reverted to public dominion in the aforesaid 1965 judgment.
2. The issues at bar have been expanded by the parties, as shown by
the voluminous records of the case (which have expanded to 2,690
pages in three volumes), to cover the questioned actions of respondent
Judge Arlegui (a) in dismissing the Republic's complaint in Civil Case
No. 653 of his court per his Order of January 12, 1977 (subject of the
Court's Second Division's Resolution of December 17, 1979 dismissing
the Republic's petition for review in Case G.R. No. L,46396); and (b)
his decision of December 15, 1981, after almost four years, on
respondent Zobel's counterclaim in the same case, declaring him the
true and registered owner of the lands covered by some three
subdivision titles in his name, 15 as well as (c) the resurvey of the lands
affected so as to properly segregate from Ayala's expanded TCT No.
722 the estimated 2,000 hectares of territorial sea, foreshore, and
navigable waters, etc., of the public domain and enforcement and
execution of the 1965 final judgment reverting these usurped public
areas to public dominion. 16
3. On the first question of the precipitate dismissal of the Republic's
complaint in the case below, Civil Case No. 653, the . records show
respondent judge's action to have been capricious , arbitrary and
whimsical. His first ground of non-prosecution of the action by the
Republic is belied by his very Order which shows that the proceedings
had been suspended all the while since its filing in 1967 upon insistent
motions of respondent Zobel. against petitioner's vigorous opposition,
that it was necessary as a cuestion previa to await the Court's
resolution of the case at bar.
His second ground of res judicata is likewise devoid of logic and
reason. The first case (the 1965 judgment in Case L-20950) decreeing
the reversion to public dominion of the public lands and waters
usurped by respondent's unlawfully expanded titles -and ordering the
cancellation of all such titles and their transfers could not possibly be
invoked as res judicata in the case at bar on respondent Zobel's
untenable submission that his unlawfully expanded titles were not
specifically mentioned in the 1965 judgment. The Court in said 1965
judgment had stressed the elementary rule that the generally
incontestable and indefeasible character of a Torrens Certificate of
Title does not operate when the land covered thereby is not capable of
registration, as in this case, being part of the sea, beach, foreshore or
navigable water or other public lands incapable of registration. 17 It
should be noted further that the doctrine of estoppel or laches does not
apply when the Government sues as a Sovereign or asserts
governmental rights, nor does estoppel or laches validate an act that
contravenes law or public policy 18 and that res judicata is to be
disregarded if its application would involve the sacrifice of justice to
technicality. 19
Respondent Judge Arlegui's refusal to grant the Republic a simple 15-
day extension of time to file a Motion for Reconsideration on the
ground that such motion was filed on the last day (following a Sunday)
and he could no longer act thereon within the original period per his
Orders of March 3, 1977 and June 14, 1977 20 depict an
incomprehensible disregard of the cardinal principle that procedural
rules are supposed to help and not hinder the administration of justice
and crass indifference, if not outright hostility against the public
interest.
At any rate, such dismissal of the complaint and dismissal on
December 17, 1979 of the petition for certiorari thereof by the Court's
Second Division, based on purely procedural and technical grounds,
does not and cannot in any way have any legal significance or
prejudice the Republic's case. Such dismissal by the Second Division
cannot in any way affect, much less render nugatory, the final and
executory 1965 judgment in G.R. No. L-20950 reverting the public
lands and waters to public dominion. Much more so when we take into
account the mandatory provisions of Article VIII, Section 4(3) of the
1987 Constitution (and its counterpart Article X, Section 2(3) of the
1973 Constitution) to the effect that only the Supreme Court en
banc may modify or reverse a doctrine or principle of law or ruling laid
down by the Court in a decision rendered en banc or in division.
3. Respondent judge's "decision" on respondent Zobel's counterclaim
and declaring him, four years after dismissal of the Republic's
complaint, as the true owner of the lands unlawfully titled in Zobel's
name is properly before the Court in the case at bar. We declare the
same null and void for want of jurisdiction over the subject properties
which were reverted to public dominion in the final 1965 judgment
which annulled all expanded titles unlawfully secured by respondents
and their transferees to public waters and lands.
4. As to the third and most important question of finally executing and
enforcing the 1965 judgment in favor of the Republic and reverting all
usurped areas to public dominion, the Solicitor General has
complained rightfully in his Memorandum that "mass usurpation of
public domain remains unabated . ... for almost (23) years now
execution of the 1965 final judgment in G.R. No. L-20950, ordering the
cancellation of the subdivision titles covering the expanded areas
outside the private lands of Hacienda Calatagan, is being frustrated by
respondent Zobel, the Ayala and/or Hacienda Calatagan. As a
consequence, the mass usurpation of lands of public domain
consisting of portions of the territorial sea, the foreshore, beach and
navigable water bordering Balayan Bay, Pagaspas Bay and the China
Sea, still remain unabated . ... (T)he efforts of Ayala and Zobel to
prevent execution of said final judgment are evident from the
heretofore-mentioned technical maneuvers they have resorted to. In
brief, they moved to quash and secured the quashal of the writ of
execution, succeeded in opposing the issuance of another writ of
execution, opposed the motion to conduct re-survey, opposed the
approval and secured a disapproval of resurvey plan, moved to
dismiss and got a dismissal of Civil Case No. 653, ousted government
fishpond permittees from the subject lands and threatened to eject the
other permittees therefrom, and secured from the lower court a
declaration of validity of their void titles. Also, in this case, respondent
Zobel is trying to prevent the cancellation of his void titles by resorting
to frivolous technicalities thus flouting this Honorable Court's decision
in G.R. No. L-20950 . " 21
We heed the Republic's pleas that
"It bears stressing that the Re-survey Plan (Annex "C", together with
Annexes "A" and "B" of Republic's Comment dated March 30,1981,
being a Report on the Re-survey dated August 5,1977 and the "Final
Report" dated September 2, 1977, respectively) delineating the
expanded areas covered by subdivision titles derived from TCT No.
722 has been prepared by a Committee created by the Secretary of
Agriculture and Natural Resources wherein Ayala and/or Hacienda
Calatagan was represented by Engineer Tomas Sanchez, Jr. and
approved by the Director of Lands. Well to recall that under G.R. No.
26112 (44 SCRA 255, 263), this Honorable Court, in a Resolution
dated April 11, 1972, declared that as soon as said resurvey Is
completed the proper writ of execution for the delivery of possession of
the portion found to be public land should issue." Thus: [See pages 3-5
of Annex "A" hereof for text of Resolution.]
"By virtue of the aforesaid resolution, therefore, there should no longer
be any legal impediment against the execution of the final judgment in
Civil Case No. 373 (G.R. No. L-20950), the issuance of which is purely
ministerial the dubious decision in Civil Case No. 653 notwithstanding.
Accordingly, to give legal significance to the earlier decision and
resolution of this Honorable Court in G.R. No. L-20950 and 26112,
respectively, and to foreclose any further legal obstacle on the matter,
we pray this Honorable Court to declare the proceedings conducted by
respondent judge in Civil Case No. 653 null and void ab initio, and to
consider the resurvey plan as sufficient basis for the immediate
issuance of the corresponding writ of execution in Civil Case No. 373.
For it is only upon said execution that the oft revived issues of
ownership and possession over the land in question, as well as over all
other lots covered by the subdivision titles outside the private land
covered by TCT No. 722, may be finally laid to rest. Indeed, under the
facts and circumstances obtaining in the case at bar, execution of the
final judgment in Civil Case No. 373 is long overdue ." 22
To allow repetition after repetition of the maneuvers hereinabove set
forth in detail, notwithstanding the final 1965 judgment in favor of the
Republic, and to protract further the return to the Republic of the
usurped lands pertaining to the public domain would be to sanction a
legal abomination As stated by the late Chief Justice Roberto
Concepcion, to frustrate delivery and return of the usurped lands to the
Republic would:
(1) Establish a precedent-fraught with possibilities tending to impair the
stability of judicial decisions and affording a means to prolong court
proceedings or justify the institution of new ones, despite the finality of
the judgment or decree rendered in the main case, by sanctioning a
departure from the clear, plain and natural meaning of said judgment
or decree;
(2) Contribute to the further increase of the steadily mounting number
of cases pending before our courts of justice, and thus generate
greater delay in the determination of said cases, as well as offset the
effect of legislative and administrative measures taken-some upon the
suggestion or initiative of the Supreme Court to promote the early
disposal of such cases;
(3) Impair a normal and legitimate means to implement the
constitutional mandate for the protection and conservation of our
natural resources and the patrimony of the nation; and
(4) Promote usurpations of the public domain, as well as the simulation
of sales thereof by the original usurper, by exempting him from
responsibility for damage which would not have been sustained were it
not for the irregularities committed by him so long as he has conveyed
the subject matter thereof to a purchaser for value, in good faith. 23
As in Air Manila, Inc. v. CIR 24 and several other cases in order to avoid
further intolerable delay and finally bring to reality the execution of the
1965 judgment that would enable the State to recover at last the
estimated 2,000 hectares of lands and waters of the public domain, the
Court will order its Clerk of Court to issue directly the corresponding
writ of execution of judgment addressed to the sheriffs of the locality.
We declare respondent judge's gratuitous "disapproval" of the Re-
survey Plan and Report duly approved by the Director of Lands and
the then Secretary of Agriculture and Natural Resources as null and
void for being ultra vires and lack of jurisdiction over the same. It is
well-recognized principle that purely administrative and discretionary
functions may not be interfered with by the courts. In general, courts
have no supervising " power over the proceedings and actions of the
administrative departments of government. This is generally true with
respect to acts involving the exercise of judgment or discretion, and
findings of fact. 25 There should be no thought of disregarding the
traditional line separating judicial and administrative competence, the
former being entrusted with the determination of legal questions and
the latter being limited as a result of its expertise to the ascertainment
of the decisive facts.26

WHEREFORE, judgment is hereby rendered

1. Annulling the questioned mandatory injunction of October 1, 1968

issued by respondent-judge and making permanent the restraining
orders issued by the Court;

2. Declaring as null and void the questioned decision of December 15,

1981, as well as the corresponding writ of execution therefore having
been issued by respondent judge with grave abuse of discretion and
without jurisdiction, and for being in contravention of the final 1965
decision in Civil Case No. 373 as affirmed in G.R. No. L-20950;

3. Declaring the Re-survey Plan duly approved by the Director of

Lands as sufficient basis for the execution of the final judgment in the
aforesaid Civil Case No. 373 as affirmed in G.R. No. L- 20950; and

4. Directing the Clerk of this Court to forthwith issue the corresponding

writ of execution in the case at bar for Civil Case No. 373 of the
Regional Trial Court (formerly Court of First Instance) of Batangas
(Balayan Branch) reverting to public dominion and delivering to the
duly authorized representatives of the Republic all public lands and
lots, fishponds, territorial bay waters, rivers, manglares foreshores and
beaches, etc. as delineated in the aforesaid duly approved Re-survey
Plan (Annex "C") and any supplemental Re-survey Plan as may be
found necessary * and duly approved by the Secretary of Agriculture.
This decision is IMMEDIATELY EXECUTORY and no motion for
extension of time to file a motion for reconsideration will be granted.
G.R. No. 96259 September 3, 1996
HEIRS OF LUIS J. GONZAGA, namely ROMANA, FERNANDO,
PAZ, LUISA and LUIS ANTONIO, all surnamed
GONZAGA, petitioners,
vs.
HON. COURT OF APPEALS and SPOUSES JOSE LEELIN and
LILIA SEVILLA, respondents.
HERMOSISIMA, JR., J.:
Assailed in these consolidated petitions is the decision1 of the Court of
Appeals2 in the exercise of its review jurisdiction over a case for
annulment of Torrens title and/or quieting of title with damages 3 filed
before the then Court of First Instance, now the Regional Trial Court of
Caloocan City.4
There were two (2) defendants in the said case, namely, Luis J.
Gonzaga, now deceased, and petitioner Guillermo Y. Mascarias. The
latter's appeal from the herein assailed decision was docketed as G.R.
No. 96274, while the former was substituted by his heirs whose appeal
from the same decision was docketed as G.R. No. 96259. Considering
that the two appeals raised the same questions and issues and
involved the same private respondents, we ordered them consolidated
upon petitioner Mascarias' motion.5
The present controversy arose when private respondents filed on
October 14, 1981, a complaint for annulment of Gonzaga's Torrens title
insofar as it embraced lot nos. 3619 and 3620 which are identical with
those described in private respondents' own title as lot nos. 65 and 66.
Before the court a quo, Gonzaga interposed an answer asserting that
since he had already sold and conveyed the subject lots on September
28, 1981 to petitioner Mascarias, private respondents no longer have
any cause of action against him. Consequently, private respondents
filed an amended complaint to include petitioner Mascarias as party-
defendant.
Both the court a quo and the respondent appellate court recognize that
the two conflicting TCTs were derived from one common OCT, viz.,
OCT No. 994. However, while both the court a quo and the respondent
appellate court found that OCT No. 994 was registered on May 3,
1917, we find that on the one hand, petitioners' titles indicate original
registration to have been made on May 3, 1917, but on the other hand,
private respondents' title indicates original registration to have been
made on April 19, 1917.
The court a quo resolved the conflicting claims in favor of private
respondents. It ratiocinated in this wise:
As matters stand, the Court is once more called upon to determine
which of the conflicting titles is valid.

Let us examine the hard facts.

The irreconcilable conflict between petitioners and private respondents
centers on two parcels of land which they each claim in full exclusive
ownership. A deepening scrutiny over the evidence in record bares a relevant
distinction between plaintiffs' [private respondents'] and defendants'
[petitioners'] titles as to their origin. As may be seen, defendants'
We gather from the records that one Jose Eugenio had once been the
[petitioners'] titles were registered under Cadastral Proceedings in
registered owner of lot nos. 3619 and 3620 of the Cadastral Survey of
Cadastral Case No. 34, Cadastral Record No. 1606, Cadastral Survey
Caloocan under Transfer Certificate of Title (TCT) No. 17519. Some in
of Caloocan.
1960, Eugenio sold the two lots to deceased defendant Luis J.
Gonzaga.6 Consequently, Eugenio's TCT No. 17519 was cancelled,
and the Registry of Deeds for the Province of Rizal issued on Whereas, as the Court finds, plaintiffs' [private respondents'] title was
November 29, 1960, TCT No. 813387 in the name of Gonzaga. On derived from the Original Certificate of Title No. 994, issued in Land
September 28, 1981, Gonzaga sold the two lots to petitioner Registration Case No. 4429, pursuant to Decree 36455 in 1917.
Mascarias.8 Following the conveyance, Gonzaga's TCT No. 81338
was cancelled, and issued in the name of Mascarias was TCT No.
As indubitably shown in a Deed of Absolute Sale dated January 14,
480789 covering the same two lots.
1977 . . . plaintiffs [private respondents] acquired the two properties in
question, together with other several parcels of land, from Felicidad
Equally borne out by the records, however, is the fact that another Rivera, Benito Rivera and Victoria Rivera, the legal heirs of one
subsisting Torrens title covers the same two lots subject of the sale Bartolome Rivera.
between Eugenio and Gonzaga and that between Gonzaga and
petitioner Mascarias. This other title is TCT No. C-2608610 in the
Bartolome Rivera and other co-plaintiffs are the successors-in-interests
name of private respondent Lilia Sevilla, married to Jose Seelin, issued
to the undivided share of Maria Concepcion Vidal in several parcels of
on August 2, 1979 by the Registry of Deeds for Metro Manila, District
land under Original Certificates of Titles Nos. 982, 983, 984, 985
III. TCT No. C-26086 covers a number of lots, among them, lot nos. 65
and 994, as duly established in the two Decisions rendered in Civil
and 66 which are identical with lot nos. 3619 and 3620 embraced by
Case No. C-424 and in Civil Case No. C-1796 by the Court of First
the titles issued in the names of Eugenio, Gonzaga and petitioner
Instance of Rizal . . .
Mascarias.

As may be seen, Maria Concepcion Vidal was one of the original co-
We note on the face of TCT No. C-26086 that the same is a transfer
owners of the properties registered under the Original Certificate of
from Original Certificate of Title (OCT) No. 994 which was registered
Title No. 994, issued by the Land Registration Court in Land
on April 19, 1917 pursuant to Decree No. 36455. The court a
Registration Case No. 4429, pursuant to Decree No. 36455 . . .
quo made the following findings of fact as regards the circumstances of
that transfer, as follows:
Thus, in said Decision . . . dated December 29, 1965, it ordered a
partition of the subject properties among the plaintiffs being the
. . . plaintiff [private respondent] purchased the two lots described as
successors-in-interest of Maria Concepcion Vidal.
Lots No. 65 and 66 from Felicidad Rivera, Benito Rivera and Victoria
Rivera, the legal heirs of Bartolome Rivera, as evidenced by a deed of
absolute sale . . . which was registered on August 2, 1979, under It bears emphasis that in said Decision of December 29, 1965 . . . it
Transfer Certificate of Title No. 26086 . . . states, in part, to wit:

xxx xxx xxx . . . This undivided share of Maria de la Concepcion Vidal, consisting of
1-189/1000 per cent of the properties described in Original Certificates
of Title Nos. 982, 983, 984, 985 and 994, has never been sold or
Bartolome Rivera and his co-plaintiffs in Civil Case No. C-424 are the
disposed of by said Maria de la Concepcion Vidal, and therefore, her
successors-in-interests of Maria de la Concepcion Vidal, and in a
said share now belongs to the herein plaintiffs who are the surviving
Decision, dated December 29, 1965, rendered by the Court of First
heirs of the said Maria de la Concepcion Vidal and entitled to said
Instance of Rizal in Civil Case No. C-424, an action for partition and
undivided share in the following proportions: Bartolome Rivera, 1/3 of
accounting . . . it ordered the partition for the plaintiffs of the properties
1-89/1000 per
described under Original Certificates of Titles Nos. 982, 983, 984, 985
cent . . . These plaintiffs, therefore, are now co-owners of the parcels
and 994. [emphasis supplied]
of land described in Original Certificates of Title Nos. 982, 983, 984,
985 and 994, in the aforestated proportions and entitled to demand the
In Civil Case No. 4557, the then Court of First Instance of Rizal, under partition of said properties. (emphasis supplied)
Presiding Judge Cecilia Munoz-Palma, ordered the Register of Deeds
of Rizal to cancel the name of Maria de la Concepcion Vidal from
Evidently, the sale of the property by Jose Eugenio to defendant Luis
Original Certificate of Title No. 994 and substitute in lieu thereof the
Gonzaga on November 29, 1960 has no valid basis.
name of Bartolome Rivera and his co-plaintiffs.

In final focus is the Court Order issued by the Court of First Instance of
Evidently, Bartolome Rivera, the predecessor-in-interest of herein
Rizal . . . in Civil Case No. C-1796 ordering the issuance of a transfer
plaintiffs appears as co-owner in the Original Certificate of Title No.
certificate of title in favor of plaintiffs [private respondents] over several
994 . . . .11
parcels of land including the two lots in questions.

xxx xxx xxx

Considering the findings and the dispositive portion of the Decision of
the then Court of First Instance . . . to the effect that there being no
valid ground why the torrens title should not be issued to the
petitioners . . . [private respondents], considering the deed of sale
executed by Victoria, Benito and Felicidad all surnamed Rivera . . . in
favor of petitioners [private respondents] were duly acknowledged
before a notary public and the same found to be regular in due form,
thereby divesting the land in fee simple form, the registered owner
Bartolome Rivera or his heirs in favor of petitioners . . . [private
respondents] their corresponding technical descriptions having been
approved and verified by the Bureau of Lands, this Court finds
plaintiffs' [private respondents'] rights and title over the properties in
question indubitably established.
True, it is that defendants' [petitioners'] title was issued by a Cadastral
Court in Cadastral Case No. 34, G.L.R.O. Cadastral Record No. 1106,
which was undeniably subsequent to the Land Registration Case No.
4429 of 1917 . . . but well-settled in a catenna [sic] of cases is the
doctrine that in a cadastral case the Court has no jurisdiction to decree
again the registration of land already decreed in an earlier land
registration case and a second decree for the same land is NULL and
VOID.12
Accordingly, the court a quo rendered judgment declaring private
respondents' TCT No. C-26086 as valid and legal and ordering the
Register of Deeds of Caloocan City to cancel Gonzaga's TCT No.
81338 and petitioner Mascarias' TCT No. 48079, the same being null
and void.
Petitioners appealed that decision to the respondent court. Petitioners
reiterated specific errors allegedly committed by the court a quo,
especially as regards appreciation of the document denominated as
Report and Recommendation issued by the Land Registration
Commission (LRC). Said document was formally offered by petitioner
Mascarias13 but had been apparently ignored by the court a quo and
considered of little probative value by respondent court for being a
mere xerox copy. In that Report and Recommendation, the LRC
concluded that all titles emanating from Bartolome Rivera under OCT
No. 994 have been issued through fraud and misrepresentation
essentially because Maria de la Concepcion Vidal, indicated on the
LRC records to have died at the age of only nine (9) years old, could
not have possibly borne children, among them, Severo who is said to
be the ascendant of Bartolome Rivera from whose heirs, in turn,
private respondents purchased the subject lots.
Likewise rebuffed by the respondent court, petitioner filed a motion for
reconsideration, which was however denied in a resolution14 dated
November 13, 1990.
The respondent Court of Appeals, in affirming the findings and ruling of
the court a quo, gave nary a significance to the aforecited LRC Report
and Recommendation. It ruled:
While We agree with appellants' [petitioners'] thesis that their
respective titles are valid, the same observation must likewise be
extended as regards appellee [private respondent] Sevilla's title, the
contrary view not having been adequately substantiated through
relevant and competent evidence. This benefit of the doubt stands
notwithstanding the xeroxed copy of the Land Registration
Commission's purported "Report and Recommendation" . . . the
apended [sic] copy purportedly to be that of the Commission's report
was merely a xerox copy and never a certified true copy thereof as
expressly mandated by Sections 25 and 26, Rule 132, of the Revised
Rules of Court as reiterated in Section 7, Rule 130, of the Revised
Rules of Evidence. Moreover, worth nothing is the fact that said xerox
copy bore no signatures of the supposed officials who executed the
same . . . No wonder the court a quo did not bother to lend any weight
to this piece of evidence, notwithstanding the failure of Sevilla to
interpose a timely objection thereto. The lack of objection may make
any incompetent evidence admissible . . . But admissibility of evidence
should not be equated with weight of evidence . . . Failure to object to
the presentation of incompetent evidence does not give probative
value to the evidence . . .
Granting arguendo, that the Land Registration Commission issued
such a report on February 2, 1981, We believe that the same suffers
from a congenital infirmity as it could not have possibly overruled the
final decisions of the various branches of the then Court of First
Instance of Rizal in Civil Case No. C-424, enjoining Bartolome Rivera
and his co-heirs to partition the properties described under OCT nos.
982, 983, 984, 985 and 994 . . . Civil Case no. 4557, ordering the
cancellation of the name of Maria de la Concepcion Vidal from OCT
No. 994 and substitute in lieu thereof the name of Bartolome Rivera
and his co-heirs; and in Land Registration case no. 1796, in which the
subject realty was ordered to be registered in the name of herein
appellee [private respondent] . . . Incidentally, LRC No. 1796 dealt with
a Land Registration case which is a proceeding in rem, dealing with a
tangible res, and may be instituted and carried to judgment without
personal service upon the claimants within the state or notice by mail
to those outside of it . . . Jurisdiction is secured by the power of the
court over the res . . . Accordingly, in a registration proceeding, such
as LRC-1796, instituted with or without opposition, the judgment of the
court confirming the title of the applicant . . . [private respondent] and
ordering its registration in his [sic] name constitutes, when final, res
judicata against the whole world (Trey Alba vs. De la Cruz, 17 Phil.
49), herein appellants [petitioners] included.15
Petitioner now come before us seeking a reversal of the aforecited
decisions of the trial court and the respondent appellate court on the
basis of the following issues:
(1) Whether or not the trial court may invalidate transfer certificate of
title which have [sic] been previously cancelled.
(2) Whether or not there is a cause of action against Luis Gonzaga.
(3) Whether or not the respondent court should rule on Mascarias
motion to hold in abeyance.
(4) Whether or not Sevilla's petition to order the City Register of Deeds
of Caloocan City to issue Transfer Certificate of Title in the Name of
the Petitioner in case #C-1796 in CFI Rizal Branch 32 Caloocan
City is a proceeding in rem.
(5) Whether or not Luis Gonzaga was barred from questioning the title
of Sevilla for his failure to file a petition for review within one year from
the decree of registration issued in favor of Sevilla.16
Unfortunately neither can we accord petitioners the relief they seek. In
fact, we must affirm the decisions assailed in this petition, for we are
confronted with facts that are exactly the same as those that we have
passed and ruled upon in the case of Metropolitan Waterworks and
Sewerage System (MWSS) vs. Court of Appeals.17
The antecedent facts of that case are as follows:
Jose B. Dimson was the registered owner of a parcel of land situated
in Balintawak, Kalookan City . . . and covered by TCT No. C-15167
which was registered on June 8, 1978. Said parcel of land was
originally Lot 28 of the Maysilo Estate (LRC 5268) covered by Original
Certificate of Title (OCT) No. 994 which was registered on April 19,
1917 pursuant to Decree No. 36455 issued in Land Registration Case
No. 4429.
It appears that one of the original owners of OCT NO. 994 was the late
Maria Concepcion Vidal married to Pioquinto Rivera. Among the four
children was Severo Rivera y Vidal who died in 1907 leaving
Bartolome Rivera as the sole surviving heir.
Bartolome Rivera executed a Deed of Transfer and Conveyance in
favor of Jose B. Dimson whereby he agreed to transfer twenty-five
percent (25%) of whatever land he is entitled in Lot 28 and Lots 25, 26,
27 and 29, all of which are covered by OCT No. 994.
In an action for partition and accounting docketed as Civil Case No. C-
424 filed by Bartolome Rivera and his co-heirs, the then Court of First
Instance of Rizal rendered a decision dated December 29, 1965
ordering the partition of the properties described in OCT Nos. 994,
983, 984 and 985 among Bartolome Rivera and his co-heirs being co-
owners and successors-in-interest of the late Maria Concepcion Vidal.
In an Order dated June 13, 1966, the then Court of First Instance of
Rizal approved the Deed of Transfer and Conveyance executed by
Bartolome Rivera in favor of Jose B. Dimson over Lot 28 and directed
the Register of Deeds of Rizal to cancel the name of Maria Concepcion
Vidal from OCT No. 994 and to substitute the names of Bartolome
Rivera and his co-heirs.
In a verified petition docketed as Special Proceedings No. 732 filed by
Jose B. Dimson, the validity of the court Order dated June 13, 1966
was confirmed. . . .
xxx xxx xxx
On the other hand, Metropolitan Waterworks and Sewerage System
(MWSS, for brevity) claimed that it is the registered owner of Lots 2693
and 2695, both with an area of 599 square meters covered by TCT No.
41028 issued by the Register of Deeds of Kalookan City on July 29,
1940 and based on the Cadastral Survey of Kalookan City, Cadastral
Case No. 34. It appeared that both lots covered or included the parcels
of land owned by Jose B. Dimson . . . It further appeared on the face of
TCT No. 41028 that it was a transfer from TCT No. 36957 which was
derived from OCT No. 994 dated May 3, 1917.18
In the present controversy, judicial adjudication hinges on the question
as to who, between petitioners and private respondents, have the legal
and valid title to the two lots. In resolving this question, we are bound
by our ruling in the aforecited earlier case of MWSS, not only because
the latter involved the same OCT No. 994 and the same Cadastral
Survey of Kaloocan City under Cadastral Case No. 34, but also
because we squarely dealt with and ruled upon this same issue in the
case of MWSS. In that case we had ruled:

The main issue to be resolved is: In case of overlapping titles, which

title should prevail.

It is the contention of petitioner MWSS that since its TCT No. 41028
was issued in 1940 while the TCT No. 15167 of private respondents
was issued only in 1978, petitioner's title prevails over that of private
respondents' in point of priority of issuance.

We do not agree.

Although petitioner's title was issued in 1940, it will be noted that

petitioner's title over Lots 2693 and 2695 both with an area of 599
square meters was based on the Cadastral Survey of Kaloocan City,
Cadastral Case No. 34, while private respondents' title was derived
from OCT No. 994 issued on April 19, 1917. In the case of Pamintuan
vs. San Agustin, this Court ruled that in a cadastral case the court has
no jurisdiction in an earlier land registration case and a second decree
for the same land is null and void.

It must be observed that the title of petitioner MWSS was a transfer

from TCT No. 36957 which was derived from OCT No. 994 registered
on May 3, 1917. Upon the other hand, private respondents' title was
derived from the same OCT No. 994 but dated April 19, 1917. Where
two certificates (of title) purport to include the same land, the earlier in
date prevails. . . . In successive registrations, where more than one
certificate is issued in respect of a particular estate or interest in land,
the person claiming under the prior certificate is entitled to the estate or
interest; and the person is deemed to hold under the prior certificate
who is the holder of, or whose claim is derived directly or indirectly
from the person who was the holder of the earliest certificate issued in
respect thereof. Hence, in point of priority of issuance, private
respondents' title prevails over that of petitioner MWSS.

Lastly, a certificate is not conclusive evidence of title if it is shown that

the same land had already been registered and an earlier certificate for
the same is in existence. Since the land in question has already been
registered under OCT No. 994 dated April 19, 1917, the subsequent
registration of the same land on May 3, 1917 is null and void.19

We empathize with petitioner Mascarias who may be a purchaser for

value and in good faith, but whose title, which is only a derivative of the
void OCT No. 994 dated May 3, 1917, could not possibly be of force
and effect more than its parent title. Certainly the spring cannot rise
higher than its source.

WHEREFORE, the consolidated petitions are hereby DISMISSED.

Costs against petitioners.

SO ORDERED.
G.R. No. L-67451 September 28, 1987
REALTY SALES ENTERPRISE, INC. and MACONDRAY FARMS,
INC., petitioners,
vs.
INTERMEDIATE APPELLATE COURT (Special Third Civil Cases
Division), HON. RIZALINA BONIFACIO VERA, as Judge, Court of
First Instance of Rizal, Branch XXIII, MORRIS G. CARPO, QUEZON
CITY DEVELOPMENT AND FINANCING CORPORATION, and
COMMISSIONER OF LAND REGISTRATION, respondents.
CORTES, J.:
The litigation over the ownership of the parcels of land which are the
subject of this petition started in 1927 when an application for their
registration under the Torrens System was first filed. In the present
petition for review Realty Sales Enterprise, Inc. (hereafter referred to
as Realty) and Macondray Farms, Inc. (hereafter referred to as
Macondray) seek a reversal of the Resolution of May 2, 1984 of the
Intermediate Appellate Court, and an affirmance of the Court of
Appeals Decision of December 29, 1982.
Two (2) adjacent parcels of land located in Almanza, Las Pias, Metro
Manila, having an aggregate area of 373,868 sq. m., situated in the
vicinity of the Ayala Alabang Project and BF Homes Paraaque are
covered by three (3) distinct sets of Torrens titles to wit:
1) TCT No. 20408 issued on May 29, 1975 in the name of Realty Sales
Enterprise, Inc., which was derived from OCT No. 1609, issued on May
21, 1958, pursuant to Decree No. N-63394 in LRC Cases Nos. 657,
758 and 976, GLRO Record Nos. N-29882, N-33721 and N-43516,
respectively.
2) TCT No. 303961 issued on October 13, 1970 in the name of Morris
G. Carpo, which was derived from OCT No. 8629, issued on October
13, 1970 pursuant to decree No. N-131349 in LRC Case No. N-11-M
(N-6217), GLRO Record No. N-32166.
3) TCTs Nos. 333982 and 333985, issued on July 27, 1971 in the
name of Quezon City Development and Financing Corporation, derived
from OCT No. 8931 which was issued on July 27, 1971 pursuant to
LRC Case No. P-206 GLRO Record No. N-31777.
On December 29, 1977, Morris Carpo filed a complaint with the Court
of First Instance of Rizal, Branch XXIII, presided over by Judge
Rizalina Bonifacio Vera (hereafter referred to as Vera Court), for
"declaration of nullity of Decree No. N-63394 and TCT No. 20408."
Named defendants were Realty Sales Enterprise, Inc., Macondray
Farms, Inc. and the Commissioner of Land Registration. Subsequently,
however, Carpo withdrew his complaint as against the last named
defendant, and the answer filed on behalf of said government official
was ordered stricken off the record. The complaint alleged that TCT
No. 20408 as well as OCT No. 1609 from which it was derived, is a
nullity as the CFI of Rizal, Branch VI, then presided over by Judge
Andres Reyes (hereafter referred to as the Reyes Court) which issued
the order dated May 21, 1958 directing the issuance of a decree of
registration, was not sitting as a land registration court, but as a court
of ordinary jurisdiction. It was further alleged that the original records of
LRC Case No. 657, GLRO Record No. 29882 which was the basis for
the issuance of said order of May 21, 1958, were lost and/or destroyed
during World War II and were still pending reconstitution; hence, the
Reyes Court had no authority to order the issuance of a certificate of
title.
Realty and Macondray alleged in their answer that the Reyes Court
was acting as a court of land registration and in issuing the order of
May 21, 1958, was actually performing a purely ministerial duty for the
registration court in Case No. 657, GLRO Record No. 29882 (and the
two other cases, Cases Nos. 758 and 976, with which said case had
been jointly tried and decided) which on August 19, 1935 had rendered
a decision adjudicating the two (2) lots in question to Estanislao
Mayuga (father of Dominador Mayuga, predecessor-in-interest of
Realty and Macondray), which decision was upheld by the Court of
Appeals. It was alleged that it is the title of Carpo which is null and
void, having been issued over a parcel of land previously registered
under the Torrens System in favor of another.
With leave of court, Realty and Macondray filed a third-party complaint
against the Quezon City Development and Financing Corporation
(hereafter referred to as QCDFC) and the Commissioner of Land
Registration alleging that TCTs Nos. 333982 and 333985 in the name
of QCDFC also covered the same parcels of land subject of the
dispute between Carpo and the two corporations, Realty and
Macondray. They thus prayed that Decree No. N-135938 issued on
July 22, 1971, OCT No. 8931 issued on July 27, 1971, as well as TCTs
Nos. 333982 and 333985 derived from OCT No. 8931 be declared null
and void.
In its answer to the third-party complaint, QCDFC asserted the validity
of its own title alleging that it is the title in the name of Realty which is
null and void. QCDFC also filed a fourth-party complaint against
Carmelino Alvendia, Esperanza Alvendia, Felicisimo Alvendia,
Josefina Alvendia, Jacinto G. Miranda, Rosa G. Miranda, Isabel G.
Miranda, and Feliciano G. Miranda, alleging that it bought said parcels
of land from them. It prayed that in the event of an unfavorable
judgment against it, fourth-party defendants be ordered to reimburse
the purchase price which the corporation paid to them. However,
QCDFC failed to prosecute its case, and the fourth-party complaint
was dismissed for lack of interest.
After hearing, the Vera Court rendered judgment on January 20, 1981,
sustaining the title of Morris G. Carpo to the two (2) lots in question
and declaring the titles of Realty Sales Enterprise, Inc. and QCDFC
null and void.
On March 20, 1981, Realty filed a Petition for certiorari with this Court
docketed as G.R. No. L-56471 questioning the decision of the lower
court. It also asked that it be allowed to appear directly to this Court as
it was raising only questions of law. After respondents filed their
comments to said petition, this Court passed a resolution dated
October 19, 1981 referring the case to the Court of Appeals "in aid of
its appellate jurisdiction for proper determination on the merits of the
appeal."
In its decision dated December 29, 1982, the Court of Appeals,
through its Ninth Division, with Justice Patajo asponente, concurred in
by Justices Gopengco and Kapunan, set aside the decision of the trial
court and rendered a new one upholding the validity of the title in the
name of Realty Sales Enterprise, Inc. and declaring null and void the
titles in the name of Carpo and QCDFC.
Carpo filed a motion for reconsideration with the appellate court. In the
meantime, by virtue and pursuant to Batas Pambansa Bldg. 129, or the
Judiciary Reorganization Act of 1980, the Court of Appeals was
reorganized into the Intermediate Appellate Court (IAC). As a
consequence, there was a re-raffling of cases and the case was
assigned to the Second Special Cases Division which, however,
returned the records of the case for another re-raffling to the Civil
Cases Divisions as it deemed itself without authority to act on
a civil case in view of the allocation of cases to the different divisions of
the IAC under Section 8 of BP 129. The case was then assigned to the
Third Civil Cases Division, composed of Justices de la Fuente, Coquia,
Zosa and Bartolome.
Justices Coquia and Bartolome inhibited themselves, and Justices
Camilon and Bidin were assigned to the Third Civil Cases Division.
On May 2, 1984, the IAC, through its Special Third Civil Cases
Division, with Justice Zosa as ponente; concurred in by Justices
Camilon and Bidin, promulgated its Resolution granting Carpo's motion
for reconsideration, reversing and setting aside the decision of
December 29, 1982, and affirming the decision of the trial court.
Hence, this petition docketed as G.R. No. 67451.
Petitioners assign the following errors:
I
The SPECIAL THIRD CIVIL CASES DIVISION of the Intermediate
Appellate Court (for brevity, referred to herein as SPECIAL DIVISION)
which promulgated the disputed RESOLUTION of May 2, 1984 had no
legal standing under the provisions of Batas Pambansa Bldg. 129 and,
as such, not vested with jurisdiction and adjudicatory power to
pronounce any decision of final resolution for the Court.
II
On the assumption that the SPECIAL DIVISION is legally vested with
jurisdiction and adjudicatory powers under the provisions of BP 129, it
decided questions of substance contrary to law and the applicable
decisions of the Supreme Court because:
(a) The SPECIAL DIVISION'S Resolution of May 2, 1984 amounted to
a denial to the Petitioners of their right to appeal and judicial review
over fundamental issues of law duly raised by them in their Petition for
Review on certiorari (G.R. No. 56471), as authorized by the
Constitution (Art. X, sec. 5 (2) (e), the provisions of the Judiciary Act of
1948 and Rule 42, Sec. 2 of the Rules of Court; and
(b) By its RESOLUTION of May 2, 1984, it ruled that the decision of
the Court of Appeals could not have gained the nature of a proper and
valid judgment as the latter had no power to pass upon the appealed
judgment of the Court of First Instance of Rizal (the Vera Court), as
appeal and not certiorari was the proper remedy;
Furthermore, the said SPECIAL DIVISION grossly departed from the
accepted and usual course of judicial proceedings by giving a
perverted and obviously unjustified and illogical interpretation of the
RESOLUTION of July 25, 1983, of the Ninth Division of the Court of
Appeals, holding and declaring that "it has in effect erased or cancelled
the validity of (the DECISION of December 29, 1982), when the said
RESOLUTION merely "RESOLVED to return the records of the case ...
for re-raffling and reassignment ... in view of the allocation of cases to
the different Divisions of the Intermediate Appellate Court under
Section 8 of BP 129.
III
The SPECIAL DIVISION by confirming the appealed judgment of the
lower court in effect sanctioned the contemptible disregard of law and
jurisprudence committed by Judge Vera, which call for an exercise of
the power of supervision;
IV
The SPECIAL DIVISION did state in its RESOLUTION of May 2, 1984
a deliberate falsehood, namely, that Morris G. Carpo is a purchaser in
good faith and for value when there is absolutely no evidence, whether
written or testimonial, that was presented by Carpo, or by anyone else
that he was, in fact, a purchaser for value and in good faith a
material matter which was neither alleged nor referred to in the
complaint and in all the pleadings, nor covered by any of the exhibits
presented by all of the parties herein and solely on the bases of which
the case at bar was submitted by the parties for consideration and
decision.
1. To support their contention that the Special Third Civil Cases
Division of the Intermediate Appellate Court which promulgated the
Resolution of May 2, 1984 had no legal standing under the provisions
of BP 129 and, as such, not vested with jurisdiction and adjudicatory
power, petitioners cite Sections 4 and 8 of BP 129, to wit:
Thus, the reassignment of Justices Bidin and Camilon to form the
Special Third Civil Cases Division in view of the voluntary inhibition of
two (2) "regular" members, is still within legal bounds. Otherwise, a
situation would have arisen where a regular division could not decide a
particular case because some members thereof inhibited themselves
from participating in said case.
2. The second assigned error involves a determination of the
correctness of the ruling of the IAC that the CA Decision of December
29, 1982 could not have gained the nature of a proper and valid
judgment (since appeal and not certiorari was the proper remedy) and
that the Resolution of July 25, 1983 had in effect erased or cancelled
the validity of said Decision.
The IAC said in its Resolution of May 2,1984:
Said resolution of July 25, 1983, to Our view, was effectively an
acknowledgment by the Division that promulgated it that the earlier
Decision dated December 29, 1983 rendered in a Special Civil Action
case for certiorari, CA-G.R. No. SP-13530, was not appropriate and
beyond the authority of the Ninth Division of the Court of Appeals to
promulgate. The said Resolution was actually a statement that the
Ninth Division of the Court of Appeals had over-stepped its bounds by
reviewing in certiorari proceedings a decision in a purely civil case that
should have passed through the processes of an ordinary appeal. We
are not aware of any legal doctrine that permits an appellate court to
treat a petition for review on certiorari upon purely questions of law,
such as that filed by petitioners herein, as an ordinary appeal. Neither
can we find any legal basis or justification for the election by the
appellate court of the essential requisites then prescribed for the
validity of an appeal, such as the submission of a formal notice of
appeal, an appeal bond and approved record on appeal. Without any
of these mandatory requisites, the appeal could not have been
deemed perfected and ought to have been dismissed outright.
The Court does not agree.

There are two modes by which cases decided by the then Courts of
Sec. 4. Exercise of powers and functions.The Intermediate Appellate
First Instance in their original jurisdiction may be reviewed: (1) an
Court shall exercise its powers, functions and duties, through ten (10)
ordinary appeal either to the Supreme Court or to the Court of Appeals,
divisions, each composed of five members. The Court may sit en
or (2) an appeal on certiorari to the Supreme Court. To the latter
banc only for the purpose of exercise administrative, ceremonial or
category belong cases in which only errors or questions of law are
other non-adjudicatory functions.
involved. Each of these modes have different procedural requirements.

Sec. 8. Grouping of Divisions.Of the ten (10) divisions, of the Court,

As stated earlier, Realty originally filed a Petition for certiorari with this
four (4) divisions, to be known as Civil case Divisions, shall take
Court docketed as G.R. No. L-56471 questioning the decision of the
cognizance of appeals in civil cases originating from the Regional Trial
Vera Court, and asking that it be allowed to appeal directly to this
Court; two (2) divisions, to be known as Criminal Cases Divisions, of
Court as it was raising only questions of law. However, this Court
appeals in cases originating from the Regional Trial Courts; and four
referred the case to the Court of Appeals "in aid of its appellate
(4) divisions, to be known as Special Cases Divisions, of original
jurisdiction for proper determination on the merits of the appeal."
actions or petitions, petitions for review, and appeals in all other cases,
including those from administrative agencies, except as provided in
Section 9 hereof. It may thus be observed that even this Court treated the petition first
filed as an appeal, and not as a special civil action for certiorari. After
as, a petition for review by certiorari is also a form of appeal. (People v.
Except with respect to the Presiding Appellate Justice, the appointment
Resuello L-30165, August 22, 1969, 69 SCRA 35).
of a member of the court should specifically indicate whether it is for
the Civil Cases Divisions, the Criminal Cases Divisions, or the Special
Cases Divisions of the Court. No member of the Court appointed to This mode of appeal under Rule 42 is in the form and procedure
any of the three classes of conclusions shall be assigned to any of the outlined in Rule 45 which, unlike ordinary appeals, does not require a
other classes of division except when authorized by the Supreme notice of appeal, an appeal bond and a record on appeal.
Court, upon recommendation of the Intermediate Appellate Court en
banc, if the exigencies of the service so require. . . . (emphasis
Thus it was error for the IAC to hold that the Decision of the Vera Court
supplied)
"cannot be passed upon anymore in the Court of Appeals decision
because appeal and not certiorari was the proper remedy." Precisely,
As officially constituted, the Third Civil Cases Division was composed petitioners brought the case to this Court on appeal, albeit by way of
of Justice B.S. de la Fuente, as Chairman, Justices Jorge Coquia, certiorari.
Mariano Zosa, and Flores Bartolome, as Members. In view, however,
of the voluntary inhibition of Justices Coquia and Bartolome from
Respondent Carpo cited authorities holding that certiorari is not a
taking part in the case, Justices Bidin and Camilon were reassigned to
substitute for appeal. Those cases are not in point. They refer to the
the Third Civil Cases Division to form the Special Third Civil Cases
special civil action of certiorari under Rule 65, and not to appeal by
Division.
way of certiorari under Rule 45.

Petitioners argue that the so-called Special Third Civil Cases Division,
not being one of the ten (10) Divisions of the Court duly vested with
jurisdiction, had no adjudicatory powers. It is also alleged that the
reassignment of Justices Bidin and Camilon is violative of the
injunction against appointment of an appellate Justice to a class of
divisions other than that to which he is appointed. (Petition, pp. 21-26.)
This contention has no merit. A reading of the law will readily show that
what BP 129 prohibits is appointment from one class of divisions to
another class. For instance, a Justice appointed to the Criminal Cases
Divisions cannot be assigned to the Civil Cases Divisions.
Justice Bidin was reassigned from the Fourth Civil Cases Division,
while Justice Camilon was reassigned from the Second Civil Cases
Division. The two therefore come from the same class of divisions to
which they were appointed.
Similarly, the IAC Special Civil Cases Division erred in interpreting the
Resolution dated July 25, 1983 of the Second Special Cases Division
(to which the case was assigned after the reorganization under BP
129) as having "erased or cancellation" the validity of the Decision of
the Ninth Division. A perusal of said Resolution shows that it merely
made clarification about the nature of the case and why it should be
reassigned to the Civil Cases Division of the IAC. There was not the
slightest implication that it "erased or cancelled" the validity of the
Decision of the Ninth Division.
Even the IAC Special Third Civil Cases Division impliedly admitted the
validity of the Decision of the Ninth Division when it granted Carpo's
motion for reconsideration. It would have been incongruous to grant a
motion to reconsider a decision, reverse and set it aside, if in the first
place it did not have any validity. It would have been necessary only to
decide its invalidity.
3. In the third assigned error, Petitioners contend that the Vera Court,
and the IAC Special Third Civil Cases Division, erred in upholding the
validity of the title in the name of Carpo and declaring null and void the
titles in the names of Realty and of QCDFC.
The basis of the complaint fired by Carpo, which was the same basis
for the of the Vera Court and the IAC Special Division, is that the
Reyes Court had no authority to issue the order of May 21, 1958
directing the issuance of a decree of registration in favor of Mayuga,
predecessor-in-interest of Realty, as it was not sitting as a land
registration court and also because the original records of LRC Case
No. 657, Record No. N-29882 were lost and/or destroyed during World
War II and were still pending reconstitution.
Under Act No. 496, Land Registration Act, (1902) as amended by Act
No. 2347 (1914), jurisdiction over all applications for registration of title
to and was conferred upon the Courts of First Instance of the
respective provinces in which the land sought to be registered is
situated.
Jurisdiction over land registration cases, as in ordinary actions, is
acquired upon the filing in court of the application for registration, and
is retained up to the end of the litigation. The issuance of a decree of
registration is but a step in the entire land registration process; and as
such, does not constitute a separate proceeding.
In the case at bar, it appears that it was Estanislao Mayuga, father of
Dominador Mayuga, predecessor-in-interest of Realty, who originally
filed on June 24, 1927 a registration proceeding docketed as LRC
Case No. 657, GLRO Record No. N-29882 in the Court of First
Instance of Rizal to confirm his title over parcels of land described as
Lots 1, 2 and 3, Plan Psu-47035. (Lots 2 and 3 the subject of the
instant litigation among Carpo, RRealty and QCDFC.) Case No. 657
was jointly tried with two other cases, LRC Case No. 976, GLRO
Record No. 43516 filed by Eduardo Guico and LRC Case No. 758,
GLRO Record No. 33721 filed by Florentino Baltazar, as the three
cases involved Identical parcels of land, and Identical
applicants/oppositors.
On August 19, 1935 the CFI-Rizal acting as a land registration court
issued a consolidated decision on the three cases, the dispositive
portion of which reads:
En meritos de to do lo expuesto, se ordena el registro de los lotes, 1, 2
y 3 del plans PSU-47035 a nombre de Estanislao Mayuga, desist
oposicion de Florentino Baltazar y Eduardo Guico con respects a
dichos lotes....
On appeal, the above decision of the CFI was affirmed by the Court of
Appeals in its decision dated November 17, 1939. the dispositive
portion of which reads:
Por todas last consideraciones expuestas confirmamos la decision
apelada en cuanto adjudica a Estanislao Mayuga los lotes, 1, 2 y 3 de
such piano y que equivalent a lost lotes, 4, 5 y 6 del plano de Baltazar
y 4 y 5 del plans de Guico.
xxx xxx xxx
Guico filed a petition for review on certiorari before this Court, but the
petition was dismissed and the Court of Appeals decision was affirmed
(See Guico v. San Pedro, 72 Phil. 415 [1941]).
Before he could secure a decree of registration in his name, Estanislao
died.
On May 13, 1958 Dominador Mayuga, son of Estanislao, filed a
petition with the Reyes Court docketed as Case No. 2689 alleging that
he was the only heir of the deceased Estanislao Mayuga and praying
for the issuance of a decree of registration over the property
adjudicated in favor of Estanislao. At this point, it cannot be
overemphasized that the petition filed by Dominador is NOT a distinct
and separate proceeding from, but a continuation of, the original land
registration proceedings initiated by Estanislao Mayuga, Florentino
Baltazar and Eduardo Guico. In the same vein, the Reyes Court, as
Branch VI of the Court of First Instance of Rizal, was continuing in the
exercise of jurisdiction over the case, which jurisdiction was vested in
the CFI-Rizal upon filing of the original applications.
On May 21, 1958 the Reyes Court issued an order granting the petition
of Dominador Mayuga and directing the Commissioner of Land
Registration to issue a decree of registration over Lots 1, 2 and 3 of
Plan Psu-47035, substituting therein as registered owner Dominador
Mayuga in liue of Estanislao.
Respondent Carpo, however, contends, that since the records of LRC
Case No. 657 were not properly reconstituted, then there was no
pending land registration case. And since the Reyes Court was acting
without a pending case, it was acting without jurisdiction. (Respondent
Carpo's Memorandum, pp, 2-8.)
He cites the case of Villegas v. Fernando (L-27347, April 29, 1969, 27
SCRA 1119) where this Court said that upon failure to reconstitute
pursuant to law, "the parties are deemed to have waived the effects of
the decision rendered in their favor and their only alternative is to file
an action anew for the registration in their names of the lots in
question," citing the case of Ambat v. Director of Lands, (92) Phil. 567
[1953]) and other cases. The basis of said ruling is Section 29 of Act
No. 3110, an Act to provide an adequate procedure for the
reconstitution of the records of pending judicial proceedings and
books, documents, and files of the office of the register of deeds,
destroyed by fire or other public calamities, and for other purposes.
However, the Ambat case, in so far as it ruled on the effect of failure to
reconstitute records on the status of the case in its entirety, was
modified in the case of Nacua v. de Beltran, (93) Phil. 595 [1953]).
where this Court said:
(W)e are inclined to modify the ruling (in the Ambat case) in the sense
that Section 29 of Act No. 3110 should be applied only where the
records in the Court of First Instance as well as in the appellate court
were destroyed or lost and were not reconstituted, but not where the
records of the Court of First Instance are intact and complete, and only
the records in the appellate court were lost or destroyed, and were not
reconstituted. One reason for this view is that section 29 of Act 3110 is
found among the sections and provisions dealing with the
reconstitution of records in the Court of First Instance in pending civil
cases, special proceedings, cadastral cases and criminal cases. A
study of Act (No.) 3110 ... who show that there are separate
procedures for the reconstitution of records in the Justice of the Peace
Courts, from Sec. 48 to Sec. 53; for the reconstitution of records in the
Supreme Court, now including the Court of Appeals, from Sec. 54 to
Sec. 74; for the reconstitution of records in the office of the Register of
Deeds, from Sec. 75 to Sec. 90 and for the reconstitution of destroyed
records in the Courts of First Instance, from Sec. 1 to Sec. 47, under
which sections, Sec. 29 is obviously comprehended.
The whole theory of reconstitution is to reproduce or replace records
lost or destroyed so that said records may be complete and court
proceedings may continue from the point or stage where said
proceedings stopped due to the loss of the records. The law
contemplates different stages for purposes of reconstitution. . . .
. . . (S)ection 4 covers the stage were a civil case was pending trial in
the Court of First Instance at the time the record was destroyed or lost;
section 6 evidently refers to the stage where the case had been tried
and decided but was still pending in the Court of First Instance at the
time the record was destroyed or lost; section 6 covers the stage
where the case was pending in the Supreme Court (or Court of
Appeals) at the time the record was destroyed or lost. *
If the records up to a certain point or stage are lost and they are not
reconstituted, the parties and the court should go back to the next
preceding age where records are available, but not beyond that;
otherwise to ignore and go beyond the stage next preceding would be
voiding and unnecessarily ignoring proceedings which are duly
recorded and documented, to the great prejudice not only of the parties
and their witnesses, but also of the court which must again perforce
admit pleadings, rule upon them and then try the case and decide it
anew,-all of these, when the records up to said point or stage are intact
and complete, and uncontroverted.
xxx xxx xxx
. . . (T)o require the parties to file their action anew and incur the
expenses and (suffer) the annoyance and vexation incident to the filing
of pleadings and the conduct of hearings, aside from the possibility that
some of the witnesses may have died or left the jurisdiction, and also
to require the court to again rule on the pleadings and hear the
witnesses and then decide the case, when an along and all the time
the record of the former pleadings of the trial and evidence and
decision are there and are not disputed, all this would appear to be not
exactly logical or reasonable, or fair and just to the parties, including
the trial court which has not committed any negligence or fault at all.
The ruling in Nacua is more in keeping with the spirit and intention of
the reconstitution law. As stated therein, "Act 3110 was not
promulgated to penalize people for failure to observe or invoke its
provisions. It contains no penal sanction. It was enacted rather to aid
and benefit litigants, so that when court records are destroyed at any
stage of judicial proceedings, instead of instituting a new case and
starting all over again, they may reconstitute the records lost and
continue the case. If they fail to ask for reconstitution, the worst that
can happen to them is that they lose the advantages provided by the
reconstitution law" (e.g. having the case at the stage when the records
were destroyed).
Applying the doctrine in the Nacua decision to LRC Case No. 657, the
parties thereto did not have to commence a new action but only had to
go back to the preceding stage where records are available. The land
registration case itself re. mained pending and the Court of First
Instance of Rizal continued to have jurisdiction over it.
The records were destroyed at that stage of the case when an that
remained to be done was the ministerial duty of the Land Registration
Office to issue a decree of registration (which would be the basis for
the issuance of an Original Certificate of Title) to implement a judgment
which had become final (See Government v. Abural, 39 Phil. 996
[1919] at 1002; Sta. Ana v. Menla, 111 Phil. 947 [1961], 1 SCRA 1294;
Heirs of Cristobal Marcos v. De Banuvar, 134 Phil. 257 [1968], 26
SCRA 316). There are however authentic copies of the decisions of
the CFI and the Court of Appeals adjudicating Lots 1, 2 and 3 of Plan
Psu-47035 to Estanislao Mayuga. Moreover, there is an official report
of the decision of this Court affirming both the CFI and the CA
decisions. A final order of adjudication forms the basis for the issuance
of a decree of registration.
Considering that the Reyes court was actually in the exercise of its
jurisdiction as a land registration court when it issued the order
directing the issuance of a decree of registration, "substituting therein
as registered owner Dominador Mayuga, in hue of the original
adjudicates, Estanislao Mayuga, based on the affidavit of self-
adjudication, subject to the provisions of Sec. 4, Rule 74 of the Rules
of Court," which order is in consonance with the ruling of this Court in
the Guico decision, and the decisions of the CFI-Rizal and the CA
dated August 19, 1935 and November 17, 1939, respectively, We
uphold the validity of said order and rule that Judge Vera was without
jurisdiction to set it aside.
4. In upholding the title of Carpo as against those of Realty and
QCDFC, the Special Division also relied on Carpo's being an innocent
purchaser for value.
Whether or not Carpo is an innocent purchaser for value was never
raised as an issue in the trial court. A perusal of the records of the
case reveals that no factual basis exists to support such a conclusion.
Even Carpo himself cites no factual proof of his being an innocent
purchaser for value. He merely relies on the presumption of good faith
under Article 527 of the Civil Code.
It is settled that one is considered an innocent purchaser for value only
if, relying on the certificate of title, he bought the property from the
registered owner, "without notice that some other person has a right to,
or interest in, such property and pays a full and fair price for the same,
at the time of such purchase, or before he has notice of the claim or
interest of some other persons in the property." (Cui v. Henson, 51
Phil. 606 [1928], Fule v. De Legare, 117 Phil. 367 [1963], 7 SCRA
351.) He is not required to explore farther than what the Torrens title
upon its face indicates. (Fule v. De Legare supra.)
Carpo bought the disputed property from the Baltazars, the original
registered owners, by virtue of a deed executed before Iluminada
Figueroa, Notary Public of Manila dated October 9, 1970. However, it
was only later, on October 13, 1970, that the decree of registration in
favor of the Baltazars was transcribed in the Registration Book for the
Province of Rizal and that an Original Certificate of Title was issued. It
was on the same day, October 13, 1970, that the deed evidencing the
sale between the Baltazars and Carpo was inscribed in the Registry of
Property, and the Original Certificate of Title was cancelled as Transfer
Certificate of Title No. 303961 in the name of Carpo was issued.
(Exhibit 12, Rollo pp. 270-273.)
Thus, at the time of sale there was as yet no Torrens title which Carpo
could have relied upon so that he may qualify as an innocent
purchaser for value. Not being a purchaser for value and in good faith,
he is in no better position than his predecessors-in-interest.
The Baltazars, predecessors-in-interest of Carpo are heirs of
Florentino Baltazar, an oppositor in the original application filed by
Estanislao Mayuga in 1927. As stated earlier, the CFI-Rizal confirmed
the title of Estanislao to Lots 1, 2 and 3 of Plan Psu-47035
"desestimando oposicion de Florentino Baltazar . . . con respeto a
dichos lotes . . ." As such successors of Florentino, they could not
pretend ignorance of the land registration proceedings over the
disputed parcels of land earlier initiated by Eduardo Guico, Florentino
Baltazar and Estanislao Mayuga, as when as the decisions rendered
therein.
Moreover, it is not disputed that the title in the name of Dominador
Mayuga, from whom Realty derived its title, was issued in 1958, or
twelve years before the issuance of the title in the name of the
Baltazars in 1970.
In this jurisdiction, it is settled that "(t)he general rule is that in the case
of two certificates of title, purporting to include the same land, the
earlier in date prevails . . . . In successive registrations, where more
than one certificate is issued in respect of a particular estate or interest
in land, the person claiming under the prior certificate is entitled to the
estate or interest; and that person is deemed to hold under the prior
certificate who is the holder of, or whose claim is derived directly or
indirectly from the person who was the holder of the earliest certificate
issued in respect thereof . . . ." (Legarda and Prieto v. Saleeby, 31 Phil.
590 [1915] at 595-596; Garcia V. CA, Nos. L-48971 and 49011,
January 22, 1980, 95 SCRA 380.)
TCT No. 20408 derived from OCT 1609, is therefore superior to TCT
No. 303961 derived from OCT 8629.
5. For its part, respondent Quezon City Development and Financing
Corporation (QCDFC) alleges that it has been improperly impleaded as
thirty-party defendant inasmuch as Realty's alleged cause of action
against it is neither for contribution, indemnity, subrogation or any other
relief in respect of Carpo's claim against Realty. It likewise alleges that
Realty had no cause of action against it since the third party complaint
did not allege that QCDFC violated any legal right of Realty, QCDFC
also assails the Vera Court decision in that it declares QCDFC directly
liable to Carpo and not to Realty.
In the first place, QCDFC did not appeal from the decision of the Vera
Court, nor from the decision of the Court of Appeals dated December
29, 1982, nor from the resolution of the IAC Special Third Civil Cases
Division dated May 2, 1984 all of which voided QCDFCs title to the
disputed property. Hence, said decisions/resolution have become final
and executory as regards QCDFC.
Moreover, even as this Court agrees with QCDFC that the third-party
complaint filed against it by Realty was procedurally defective in that
the relief being sought by the latter from the former is not in respect of
Carpo's claim, policy considerations and the factual circumstances of
the case compel this Court now to rule as well on QCDFC's claim to
the disputed property. ** To rule on QCDFC's claim now is to avoid
multiplicity of suits and to put to rest these conflicting claims over the
property. After an, QCDFC was afforded fun opportunity, and
exercised its right, to prove its claim over the land. It presented
documentary as well as testimonial evidence. It was even permitted to
file a fourth-party complaint which, however, was dismissed since it
failed to prosecute its case.
QCDFC derived its title from Carmelino Alvendia et. al., the original
registered owners. Original Certificate of Title No. 8931 in the name of
Spouses Carmelino Alvendia, et. al. was issued on July 27, 1971, or
thirteen (13) years after the issuance of Mayuga's title in 1958.
Since Realty is claiming under TCT No. 1609 which was issued earlier
than OCT No. 8931 from which QCDFC's title was derived, Realty's
title must prevail over that of QCDFC.
6. During the pendency of this case, Petitioners filed a manifestation
alleging that the case at bar is closely connected with G.R. No. L-
469953, Jose N. Mayuga et. al. v. The Court of Appeals, Macondray
Farms, Inc., Realty Sales Enterprise, inc., et. al. and moved for
consolidation of the two cases involving as they do the same property.
By Resolution of August 29, 1984, this Court denied the motion for
consolidation.
In this connection, it must be emphasized that the action filed by Carpo
against Realty is in the nature of an action to remove clouds from title
to real property. By asserting its own title to the property in question
and asking that Carpo's title be declared null and void instead, and by
filing the third-party complaint against QCDFC, Realty was similarly
asking the court to remove clouds from its own title. Actions of such
nature are governed by Articles 476 to 481, Quieting of Title, Civil
Code (Republic Act No. 386), and Rule 64, Declaratory Relief and
Similar Remedies, Rules of Court.
Suits to quiet title are not technically suits in rem, nor are they, strictly
speaking, in personam, but being against the person in respect of
the res, these proceedings are characterized as quasi in
rem. (McDaniel v. McElvy, 108 So. 820 [1926].) The judgment in such
proceedings is conclusive only between the parties. (Sandejas v.
Robles, 81 Phil. 421 [1948]).
The ruling in this case is therefore without any prejudice to this Court's
final determination of G.R. No. L-46953.
WHEREFORE, the Resolution of May 2,1984 of the Intermediate
Appellate Court and the Decision of January 20, 1981 of the CFI-Rizal
Branch XXIII, are SET ASIDE and the Decision of December 29, 1982
of the Court of Appeals is AFFIRMED.
G.R. No. L-43679 October 28, 1980
LEONARDO N. AZARCON and ROSA CAJUCOM
AZARCON, plaintiffs-appellants,
vs.
LEOPOLDO VALLARTA, LUIS T. VALLARTA, JULIAN T.
VALLARTA, CORAZON VALLARTA and EMILIO LORENZO
(Husband), defendants- appellees.
MELENCIO-HERRERA, J.:,
Appeal certified to this Tribunal in 1976 by the Court of Appeals on a
question of law in that the issue is the construction or interpretation
placed upon pleadings and documentary evidence or the correctness
of the conclusions drawn therefrom.
The plaintiffs are the spouses ROSA Cajucom-Azarcon and Leonardo
Azarcon, hereinafter referred to as the appellants Azarcons. The
defendants are Leopoldo Vallarta, Luis T. Vallarta, Julian T. Vallarta,
Corazon Vallarta and her husband Emilio Lorenzo, who shall
collectively be called the appellees Vallartas.
The controversy centers around a parcel of irrigated riceland situated
at Sitio Bagnoy, San Juan de Dios, Aliaga, Nueva Ecija, of
approximately ten hectares, previously owned by Dr. Jose V. Cajucom,
father of appellant ROSA Cajucom-Azarcon. It used to be covered by
two titles, namely, Original Certificate of Title No. P-28151 in the name
of appellants Azarcons, and Original Certificate of Title No. L-
3093 2 previously in the names of the appellees Vallartas, but now
covered by several Transfer Certificates of Title in their individual
names. 3
Evidence for the appellees Vallartas shows that on March .14, 1932,
Dr. Jose V. Cajucom sold to Julian Vallarta Sr., and his first wife
Francisca Trinidad, parents of the Vallartas, a parcel of agricultural
land of nine hectares situated in Sitio Bagnoy, San Juan de Dios,
Aliaga, Nueva Ecija. The Vallartas claim that in a resurvey made on
September 6, 1959, their parents discovered that the land sold,
believed to be only nine hectares, was actually nineteen hectares.
Consequently, on October 7, 1960, Dr. Cajucom executed, in favor of
Julian Vallarta, Sr., a "Waiver and Quit claim" over the excess ten
hectares, now in dispute, in consideration of the amount of P5,
000.00. 4 The land referred to in said document was that described in
Psu-171661, a survey plan prepared for Dr. Cajucom on November 7,
1958, with an area of 106,632 square meters. A subsequent survey on
September 6, 1959 (psu-177178) disclosed an actual area of 102,704
sq. m. after deducting the areas covered by irrigation canals.
On the other hand, evidence for the appellants Azarcons also show
that on October 20, 1959, a year before the aforementioned waiver, Dr.
Cajucom executed a "Deed of Absolut0e Sale" of the same land in
favor of the Azarcons, in the amount of P20,000.00. The document
also referred to the same plan Psu-171661 and recited that the
property was unregistered land and that it was the "paraphernal"
property of Dr. Cajucom having been inherited by him from his father
Nicolas Sarenas Cajucom.5
In 1961, appellant ROSA filed a Free Patent Application over the
disputed property. 6 In support of her application, ROSA presented the
affidavits of Antonio Puno, Antonio de la Cruz, Bruno Santos and
Emilio Sanguesa attesting to the actual occupation and cultivation of
the land in dispute since 1934 by herself and/or her predecessors-in-
interest. 7 The Free Patent Application was approved on February 26,
1961 and Free Patent Entry No. 18504 was thereafter issued by the
Director of Lands. 8
On May 8, 1961, the Register of Deeds of Nueva Ecija issued Original
Certificate of Title No. P-2815 in the name of the Azarcons.
Going back to the Vallartas, their evidence further discloses that on
May 12, 1964, Julian Vallarta, Sr. sold his one half portion of the
disputed property to his children by his first wife who died in 1959,
namely, Jaime, Julian, Jr., Francisca, Luis, Corazon, Librada, Cesar,
Roberto, Mariano and Leopoldo, all surnamed Vallarta, in the amount
of P10,000.00. 9
Sometime in 1965, the Vallarta heirs, including appellees, filed with the
Court of First Instance, Branch III, Nueva Ecija, an application for
registration of the disputed property (LRC Rec. No. L-26618). The
opposition of the Director of Lands and the Director of Forestry having
been withdrawn, decision was rendered on April 18, 1966 affirming the
title of the Vallarta heirs and ordering registration in their
names, 10 Conformably thereto, on July 18, 1966, the Register of
Deeds of Nueva Ecija issued Original Certificate of Title No. L-3093 in
the name of the aforementioned Vallarta heirs.
Later, the disputed property was subdivided and the appellees herein
secured for themselves Transfer Certificates of Title in their names as
previously mentioned. Appellees also secured the corresponding Tax
Declarations in their names 11 and paid real estate taxes on the
property 12 from 1966-1969, as well as irrigation fees from 1956-1963
fully and partially for the years 1964-1968. 13
The resultant situation then is a 10-hectare irrigated riceland sold
successively by its previous owner to the two sets of opposing parties
herein, and covered by two distinct original certificates of title in their
respective favor.
The Azarcon letters of demand to vacate, dated March 5 and 22, 1968,
having been ignored by the Vallartas, on March 18, 1969, appellants
Azarcons filed a petition with the Court of First Instance, Branch III, of
Nueva Ecija in LRC No. 26618 for the cancellation of the Vallarta titles.
On a motion to dismiss filed by the Vallartas and without going into the
merits of the case, the Court dismissed the same on the ground that it
could not entertain in the same registration proceedings a petition
where its decision had long become final and executory. The
dismissal, however, was without prejudice to the filing of the proper
action before the competent Court. 14
Thus, on May 6, 1968, the Azarcons filed the instant Complaint for
Cancellation and Annulment of Titles with the Court a quo, which the
Vallartas traversed and controverted, and with each set of litigants
asserting the validity, superiority, and indefeasibility of their respective
titles. Without trial and only on the basis of memoranda and
documentary evidence submitted the lower Court rendered a Decision
in favor of the Vallartas on December 27, 1969, the dispositive portion
of which reads:
WHEREFORE, judgment is hereby rendered in favor of the defendants
and against the plaintiffs, and declaring plaintiff's Free Patent No.
167650 and/or OCT No. P-2815 of the Land Records of Nueva Ecija
null and void, and ordering the Register of Deeds of this Province to
cancel the same, at plaintiff's expense.
Dissatisfied with the judgment and with the denial of their Motion for
Reconsideration, the Azarcons elevated the case to the Court of
Appeals which certified the same to this Court.
The Azarcons ascribe the following errors to the lower Court:
1. ... in holding that the land covered by the Free Patent Title of the
plaintiffs-appellants is the private property of Jose V. Cajucom, Sr. and
not a part of the public domain;
II. ... in holding that Free Patent No.16750 issued on May 8, 1961 and
registered in the Registry of Deeds of Nueva Ecija on July 18, 1961
under Original Certificate of Title No. P-2815 is under section 91 of CA
141, ipso facto cancelled is null and void;
III. ... in holding that the defendants are the owners and in actual
possession of the land in question since March 14, 1932, the same
having been sold by Jose V. Cajucom in favor of Julian Vallarta;
IV. ... in considering that the Land Title no. 3093 of the defendants is
superior to the Free Patent Title of the plaintiff-appellants
V. ... in not considering the counterclaim filed by defendants for which
they paid no docket fee to the clerk of court a collateral attack to the
title of the plaintiffs-appellants.
The foregoing take issue with the following findings of the trial Court:
In view of the existence of two distinct titles over the same property it is
thus clear that the only issue to be resolved by this Court is: which of
the two titles must prevail, is it Free Patent No. 167690 of the plaintiffs
or Original Certificate of Title No. L-3093 (now Transfer Certificate of
Titles Nos. 67396, 67397, 80934 and 80936) of the defendants?
Upon consideration of the applicable laws and jurisprudence, the Court
decides the foregoing issues in favor of the defendants.
A free patent which purports to convey land to which the government
did not have any title at the time of its issuance does not vest any title
in the patentee as against the true owner (Suva vs. Ventura, 40 Off.
Gaz., pp. 47-48, 4th Supp., Aug. 2341, Ct. App; Ramoso vs. Obligado,
70 Phil. 86; Director of Lands vs. Reyes, 69 Phil. 497: Vital vs. Anora,
G. R. No. L-4176, February 29, 1952). Plaintiffs were fully aware that
on February 26, 1961 when their application was approved, the land in
question was not a part of the public domain as to be disposable by the
Director of Lands, because as early as October 20, 1959 by virtue of
their Exh. 'A' they knew too well that the land of the private ownership
of the patentees' father Jose V. Cajucom from when they allegedly
bought the same for P 2,000.00. That said land was no longer a part of Costs against plaintiffs-appellants.
the public domain but of the private ownership of Jose V. Cajucom
even before the Second World War is further attested by the fact that
SO ORDERED.
as early as March 14, 1932 the Same owner had disposed of his
private property to defendant's predecessors and reaffirmed by him on
October 7, 1960 (Exh. '3'). Pursuant to the abovecited cases, where a
person, who obtained free patent, knowingly made a false statement of
material and essential facts in his application, by stating that the land
applied for was part of the public domain not occupied or claimed by
any other person, when in fact, the same had formally belonged to
another as his private property from whom he alleged to have acquired
it, it was held that in accordance with Section 91 of Com Act No. 141
his title ipso facto cancelled, and consequently, rendered null and void.

Another fatal misrepresentation in plaintiffs' application which legally

results in the nullity of their free patent are their statements that they
and their predecessors were in actual possession of the land since
1926 and that they have paid continuously since July 4, 1926 the real
estate tax thereof, both of which are cont contrary to the evidence
adduced in this case. As to possession, the defendants or their
predecessors were in continuous possession of the disputed land
since March 14, 1932. In fact, it was only on March 5, 1968 when
plaintiffs attempted, to take over said possession. The same is true on
the matter of payments of the realty tax (Exhs. B-C, plaintiffs; Exhs. 5
to 18, inclusive, defendant).

On the other hand, the Court finds no defect, fatal or otherwise, in

defendants' titles, much less any legal ground to nullify them. On the
contrary, Original Certificate of Title No. 3093 was obtained by them in
a decision of this Court (Branch III) in L.R.C. Rec. No. L-26618 on April
18, 1966, without the plaintiffs opposing the registration thereof and
with no opposition on the part of the Director of Lands (Exh. '2'). At any
rate, said title is now indefeasible and incontestable. 15

We find the foregoing conclusions drawn by the trial Court from the
documentary evidence submitted by the parties to be in order. The
document of sale in favor of he Azarcons executed on October 20,
1959 explicitly recites that the land sold was the exclusive property of
the vendor, Dr. Jose Cajucom, who had inherited it from his father.
Indeed, if were private property but still public land, he could not have
disposed of it in favor of Julian Vallarta, Sr. as early as 1932. That was
obviously the reason why both the Director of Lands and the Director
of Forestry withdrew their respective oppositions to the application for
registration filed by the Vallartas. Not having been part of the public
domain, the Government was bereft of title to convey to any applicant.
Again, ROSA's allegation in support of her application for Free Patent
regarding her possession was, in fact, a misrepresentation, because
the Vallartas had been in possession since the sale in 1932 and had
continued in such occupancy, as shown by the demand by the
Azarcons in 1968, reiterated in their Complaint, that the Vallartas
vacate the disputed property.

We are fully cognizant of the well-settled rule that where two

certificates of title are issued to different persons covering the same
land in whole or in part, the earlier date must prevail as between the
original parties, and in case of successive registration where more than
one certificate is issued over the land the person holding under the
prior certificate is entitled to the land as against the person who relies
on the second certificate. 16 This presupposes, however, that the prior
title is a valid one. Where, as in the case at bar, it is evident that the
prior title of the Azarcons suffers from an inherent informity, such a rule
cannot be invoked in their favor.

Finally, the Azarcons' contention that appellees' counterclaim assailing

the Azarcon title should have been considered by the trial Court as
merely a permissive counterclaim for which they should have been
made to pay docketing fees, is untenable. It is a compulsory
counterclaim, which could have been barred if. not set up. Accordingly,
no fees therefor need have been paid. Nor can it be successfully
argued that said counterclaim was a collateral attack on the Azarcon
title. On the contrary the validity of both titles of the opposing parties
was directly and squarely put in issue and formed the crux of the
controversy.

We cannot but decry the carelessness of the Bureau of Lands in

having issued the Free Patent in ROSA's favor. Surely, a more diligent
search into their records would have revealed the true character of the
disputed property as private land. It should also be noted that in the
voluntary registration proceedings filed by the Vallartas (LRC Rec. No.
L-26618), the Director of Lands, through the Provincial Fiscal who
represented him, should have known of the Free Patent previously
issued and should have informed the Court accordingly. Had more
vigilance been exercise by a government agency entrusted specifically
with the task of administering and disposing of public lands, the
present litigation could have been averted.

WHEREFORE, the judgment appealed from, being in conformity with

law, is hereby affirmed.
G.R. No. L-18861 June 30, 1964
DEVELOPMENT BANK OF THE PHILIPPINES, plaintiff-appellant,
vs.
LAZARO MANGAWANG, ET AL., defendants-appellees.
Jesus A. Avancea for plaintiff-appellant.
Pablo Q. Ilaya for defendants-appellees.
BAUTISTA ANGELO, J.:
This is an appeal from a decision of the Court Of First instance of
Bataan declaring the Mangawang brothers owners of Lot No. 1633 of
the Balanga cadastre.
It appears that Gavino Amposta applied with the Director of Lands for
the issuance of a homestead patent over a parcel of land situated at
Balanga, Bataan. Pending action on his application, cadastral
proceedings were instituted by the government in said municipality
wherein Amposta filed an answer praying for the adjudication of the
same land in his favor which was designated therein as Lot No. 1633.
On March 8, 1920, the cadastral court rendered decision awarding the
land to Amposta. Since no advice on this matter was given either to the
Bureau of Lands or to the Governor General, the latter, on November
2, 1920, issued in favor of Amposta Homestead Patent No. 2388
covering the same land, and on November 29, 1920, Original
Certificate of Title No. 100 was issued to him by the Governor-General.
On December 20, 1922, the cadastral court issued a decree of
registration of the land in favor of Amposta pursuant to the decision
rendered in the cadastral case, and or, July 5, 1924, Original
Certificate of Title No. 2668 was issued to him covering the same
property.
Cadastral Act. Said titles were regularly issued and on their face both
appear to be valid, and under such predicament it behooves Amposta
to choose which of them he would prefer, as he could not validly make
use of both of them. But this Amposta did not do. On the contrary, he
took advantage of the situation by selling the land to two different
persons surrendering to each purchaser the pertinent certificate of title.
The question then that arises is: Who of the two buyers should be
considered as the rightful owner of the land?
On this score, it is important to consider the facts that led to the sale of
the land to the parties herein. Note that Amposta first sold the land to
Santos Camacho on November 24, 1941, who registered it in his name
on the same date. And seven years thereafter, or on March 17, 1948,
Amposta again sold the land to the Mangawang brother, who also
registered it in their name on the same date. Since both purchasers
apparently have acted in good faith, as there is nothing in the evidence
to show that they did otherwise, we cannot but conclude that the sale
made by Amposta to Santos Camacho is the valid one considering that
when Amposta sold the same land to the Mangawang brothers he had
nothing more to sell even if the title he surrendered to them is one
issued covering the same property. In legal contemplation, therefore,
Amposta sold a property he no longer owned, and hence the
transaction is legally ineffective.
On the other hand, the case under consideration can also be viewed
under a different angle. It can also be treated as one of double sale,
where a person sells the same land to two different persons who are
unaware of the flaw that lies in its title, and where the law adjudicates
the property to the purchaser who first registers the transaction in his
name in the registry of property.2 And applying this principle, we cannot
conclude that the title should likewise be adjudicated to appellant
whose predecessor-in-interest acquired and registered the property
much ahead in point of time than the appellees. Verily, the title
acquired by the latter is invalid and ineffective, contrary to the finding of
the court a quo.

On November 24, 1941, Amposta sold the land to Santos Camacho WHEREFORE, the decision appealed from is reversed. We hereby
surrendering to him Original Certificate of Title No. 100, and because declare appellant owner of Lot No. 1633 of the Balanga cadastre and
of this transfer said title was cancelled and transfer Certificate of Title uphold the validity of Transfer Certificate of Title No. 6961 issued in its
No. 5506 was issued in the name of Camacho. On November 18, favor. Transfer Certificate of Title No. 1098 issued in the name of
1946, Santos-Camacho sold the land to Bonifacio Camacho as a result appellees is hereby ordered cancelled. No pronouncement as to costs.
of which Transfer Certificate of Title No. 248 was issued to the latter.
On April 28, 1948, Bonifacio Camacho mortgaged the land to the
Rehabilitation Finance Corporation (now Development Bank of the
Philippines), and having failed to pay the loan as agreed upon the land
was sold at public auction to said bank as the highest bidder. The
period of redemption having elapsed without Camacho being able to
redeem the property, a final deed of sale was executed in favor of the
bank, and Transfer Certificate of Title No. 6961 was issued in its name
on June 29, 1957.

Meanwhile, or on June 11, 1947, Gavino Amposta again sold the same
property to Lazaro and Arsenio Mangawang for the sum of P2,000.00,
the vendees executing a mortgage on the land to secure the payment
of the balance. On March 17, 1948, the vendees paid the balance of
the purchase price, and an absolute deed of sale was executed in their
favor. In connection with this transaction, Amposta surrendered to the
vendees the title that was issued to him in the cadastral case, which
was later substituted by Transfer Certificate of Title No. 1098 issued in
the name of the vendees.

As a consequence of their purchase of the land, the Mangawang

brothers took possession thereof, and upon learning of this transfer,
the Development Bank of the Philippines, which as already stated
became the owner of the property, commenced the present action
against them in the Court of First Instance of Bataan to recover its
possession and damages. In this case, the parties submitted a
stipulation of facts, and on the strength thereof, the court a
quo rendered decision awarding the land to the Mangawang brothers.
Seasonably, the bank appealed to this Court.

Appellees contend that their right over the property in litigation should
be restored because the certificate of title they are holding is derived
from that issued pursuant to a decision rendered by a cadastral court,
while the title being held by appellant was merely based on the title
issued in an administrative proceeding, upon the theory that a judicial
title is deemed preferred to one issued administratively. They further
contend that since the decision which gave rise to their title was
rendered on March 8, 1920, which became final thirty days thereafter,
their right over the land must be deemed vested on said date, whereas
the title of appellant is merely a deprivation of the one issued to
Amposta on November 29, 1920, or seven months after the decision
rendered in the cadastral case.

There is no doubt that if the two original certificates of title were issued
on different occasions to two different persons the contention of
appellees would be correct it being in line with the several decisions
rendered by this Court.1 But the case at bar is different. Here two
certificates of title were issued to Gavino Amposta over the same
parcel of land, one under the Homestead Law and another under the
G.R. No. L-17955 May 31, 1962
PILAR LAZARO VDA. DE JACINTO, ET AL., petitioners,
vs.
SALUD DEL ROSARIO VDA. DE JACINTO, ET AL., respondents.
G.R. No. L-17957 May 31, 1962
SALUD DEL ROSARIO VDA. DE JACINTO, ET AL., petitioners,
vs.
PILAR LAZARO VDA. DE JACINTO, ET AL., respondents.
DIZON, J.:
The present action filed in the Court of First Instance of Bulacan by
Pilar Lazaro Vda. de Jacinto and her son, Melchor Jacinto, Jr., against
Salud del Rosario Vda. de Jacinto and her children, is for the
reconveyance to them of a parcel of land located in barrio Sto.
Rosario, Paombong, Bulacan, with an area of 5.4574 hectares,
covered originally by OCT No. 12515 and at present by TCT No. 5380
issued by the Register of Deeds of Bulacan in the name of the now
deceased Pedro Jacinto.
Their complaint alleged, in substance that the land subject matter
thereof was a portion of a bigger parcel allotted to their predecessor-in-
interest, Melchor Jacinto, Sr., when the estate of the deceased
spouses Andres Jacinto and Maria C. Santos was partitioned, and that
Melchor's surviving brother, Pedro, predecessor-in-interest of the
defendants, had succeeded in registering it in his name through fraud
and with breach of trust, to their prejudice.
The defendants denied the allegations of the complaint and further
alleged that their predecessor-in-interest had acquired ownership of
the property in litigation by virtue of the provisions of Act 496 and/or by
prescription.
After due trial the action was dismissed. On appeal to the Court of
Appeals, however, the latter reversed the decision and rendered
judgment as follows:
IN VIEW OF ALL THE FOREGOING, we find that the errors assigned
are well taken. The decision appealed from, not being in conformity
with the evidence and the law on the matter, should be, as it is hereby
reversed and another entered declaring the plaintiffs-appellants
owners of the land described in their complaint and designated as Lot
No. 5, plan S.C. No. 11075 (under TCT No. 5830) of the Register of
Deeds of Bulacan, and ordering the defendants-appellees, upon finality
of this decision, to reconvey the same to said plaintiffs-appellants. We
find that appellants' claim for damages are abandoned by them in their
appeal, and that appellees' counterclaim, is unmeritorious. Costs is
taxed against the defendant-appellees, proportionately.
From the above decision both parties appealed by certiorari. The
appeal of Pilar Lazaro and her son is now G.R. No. L-17955, and that
Salud del Rosario and children is G.R. No. L-17957.
There is no dispute and the Court of Appeals so found that the
land in question originally belonged to the now deceased spouses
Andres Jacinto and Maria C. Santos, both of whom died intestate
survived by their children named Melchor, Sr., (husband of Pilar
Lazaro and father of Melchor, Jr.,) and Pedro (husband of Salud del
Rosario and father of her co-parties). Melchor, Sr. also died intestate
before the estate of his parents could be partitioned. After the estate
was partitioned (Exhibit A), their surviving son, Pedro, besides
receiving his share, continued administering the property which
corresponded to the heirs of his deceased brother. Among them was a
richland located in barrio Sto. Rosario, Paombong, with an area of 11
hectares, 34 ares and 3 centiares, Pedro Jacinto himself, according to
Exhibit A, received as part of his share a richland in the same barrio,
but with an area of 3 hectares, 57 ares and 69 centiares only.
In the year 1926 Pedro Jacinto delivered to the widow of his deceased
brother the properties that corresponded to the latter. This delivery,
according to the Court of Appeals, was made only "in paper" because
Pedro did not make an actual delivery of the properties but limited
himself to telling his sister-in-law that there were "kasamas" working for
her. One year thereafter, although the properties composing the estate
of his deceased parents had already been surveyed since June 10,
1913, as shown by Exhibit B, Pedro caused them to be resurveyed,
this resulting in the drawing of Exhibit C. The practical result of the
resurvey as found by the Court of Appeals was that a portion of
lot 2 described in Exhibit B, which was subsequently one of the
properties allotted to the heirs of Melchor, was segregated therefrom
and was designated as lot 5 in Exh. C. After the resurvey, Pedro
applied to register, and succeeded in having lot 5 and other properties
registered in his name, for which reason OCT No. 12515 was issued
covering three lots numbered 2, 4 and 5. Lot 2 was subsequently sold,
so the original certificate of title was cancelled and TCT No. 583 was
issued.1wph1.t
From all the evidence of record the Court of Appeals found that Pilar
Lazaro and her son "were always of the belief, until the latter part of
1953, that he (Pedro) delivered to them all that which were rightfully
theirs"; that they discovered the shortage only when Pilar less than
one year before the action was filed decided to sell the parcel of
more than 11 hectares that she was supposed to have received from
her brother-in-law; that it was only then that she realized for the first
time that the parcel delivered to her had only an area of 5.8829
hectares. The Court further found that the land in question was not the
same parcel allotted to Pedro Jacinto, and located in the same barrio,
which had an area of a little over three hectares only.
On the basis of the facts stated above which are now final and
beyond review the Court of Appeals made the following
considerations:
It is not also controverted that upon a survey of the property (item No.
1 of Exhibit "A", which should have an area of 11.3403 hectares), when
appellant Pilar Lazaro Vda. de Jacinto decided to sell four (4) hectares
of the supposed 11.3403 hectares, there was lacking 54,574 square
meters therefrom which incidentally corresponded exactly to Lot No. 5,
item No. 2 of TCT No. 5830, in the name of Pedro Jacinto. Appellees
claim, however, that the supposed 11,3403 hectares appearing in
Exhibit "A", could have been short of 54,574 square meters and that
the 3.5769 hectares appearing in the receipt Exhibit "1", item No. 3
thereof, could have been really 5.5474 hectares, which is not the lot in
question.
The striking coincidence in the area disputed and that registered in the
name of appellees' predecessor-in-interest, more than catches the eye.
Under the partition, the appellants were to receive as one of the
properties, 11.3403 hectares of riceland. This being the case, there are
no reasons discernible in the records why, after an actual survey of the
said property, 54,574 meters should be lacking therefrom. It could not
be said that the area was just a product of a calculation. When Exhibit
"A" was executed, the boundaries were plainly indicated thereon. As a
matter of fact, Exhibit "A" designated the number of hectares, ares and
centiares, which is indicative of the preciseness of the area to be
delivered to the respective heirs. The fact that the lacking
measurement fits exactly with Lot No. 5 of Pedro Jacinto under TCT
No. 5830, warrants the conclusion that Pedro Jacinto to had deprived
the appellants herein of their just share. . . .
There are sufficient proofs to show that fraud was practiced by Pedro
Jacinto against the appellants herein. When Pedro supposedly
delivered the property, he did it only in paper, without bringing plaintiff
Pilar Lazaro to the premises, although he told her that there were
"kasamas" working for her. On December 15, 1927, Pedro Jacinto
caused that the properties be resurveyed, which resulted in the
drawing of Exhibit "C", which in effect amended Exhibit "B". Part of Lot
2 was segregated and had been designed as lot 5 in Exhibits "C". And
this Lot 5 has an area exactly equal to the area which was found
lacking in the 11.3403 hectares belonging to the plaintiffs-appellants.
(pp. 6-7 & 9, decision)
As a result of the foregoing, the Court of Appeals held that Pedro
Jacinto must be deemed to have registered the land in question as a
trustee for and in behalf of the widow and son of his deceased brother.
The pertinent portion of its decision reads as follows:
Implied Trusts have been said to be those which are raised by legal
implication from the facts and circumstances of the case, to effect the
presumed intention of the parties or to satisfy demands of justice or to
protect against fraud (65 C.J. 222), or those enforced by equity
because morality, justice, conscience, and fair dealing demand that the
relation be established (supra). The new Civil Code provides that, "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" (Art. 1456). That
there was fraud on the part of Pedro Jacinto in registering the property
in his name to the prejudice of the appellants is revealed by the
records. It will be seen that on Exhibit "C", the amended survey of the
properties which Pedro Jacinto and Melchor Jacinto, Sr. inherited from
their parents, changes were made.
This resurvey was done at the instance of Pedro Jacinto, in spite of the
fact that on June 10, 1913, the same, properties were already
surveyed, divided and delineated (Exhibit "B"). The boundaries of Lot 5
as appearing in Exhibit "G" (the amended plan) are the same as those
appearing in Exhibit "B" minus the designation as Lot 5 and its
segregation from the greater mass of Lot 2. In Exhibit "E" or "I", a
receipt of the properties inherited by Pedro Jacinto from his father
Andres, no property coincide in boundaries with the properties given to
Pedro. Under the above set of facts, it is quite evident that the property
in question rightfully belonged to the plaintiffs and that an implied trust
was created between the plaintiffs and the appellees' father Pedro
Jacinto. (pp. 9-10, decision)

The heirs of Pedro Jacinto now contend that the Court of Appeals
erred in applying to this case the law of implied or constructive trusts,
and, in holding that, under the facts of the case, the right of the heirs of
Melchor Jacinto to recover the property in question is imprescriptible.
We find these contentions to be without merit.

The following findings of fact made by the Court of Appeals cannot

now be questioned: (1) after the partition of the estate of the deceased
spouses Andres Jacinto and Maria C. Santos, Pedro Jacinto, their
surviving son, continuedadministering the properties allotted to the
heirs of his deceased brother; (2) when he delivered the share of the
latter, he withheld delivery of the parcel of more than 11 hectares
allotted, among others, to his aforesaid co-heirs; (3) one year
thereafter he caused the portion withheld from co-heirs to be registered
in his name; (4) the widow and son of his deceased brother did not
know that the parcel of land delivered to them by their co-heir was
short of 5 hectares, 45 ares and 74 centiares, and said parties "were
always of the belief, until the latter part of 1953, that he (Pedro)
delivered to them all that which were rightfully theirs".

In view of these facts, it would be against reason and good

conscience not to hold that Pedro Jacinto committed a breach of trust
which enabled him to secure registration of the land in question to the
prejudice of his co-heirs. Therefore, in an lotion like the present, he
may be ordered to make reconveyance of the property to the person
rightfully entitled to it. In fact, it has been held that even in the absence
of fraud in obtaining registration, or even after the lapse of one year
after the issuance of a decree of registration, a co-owner of land who
applied for and secured its adjudication and registration in his name
knowing that it had not been allotted to him in the partition, may be
compelled to convey the same to whoever received it in the
apportionment, so long as no innocent third party had acquired rights
therein, in the meantime, for a valuable consideration (Palet vs.
Tejedor, 55 Phil. 790-798). Indeed, any rule to the contrary would
sanction one's enrichment at the expense of another. Public policy
demands that a person guilty of fraud or, it least, of breach of trust,
should not be allowed to use a Torrens title as a shield against the
consequences of his wrongdoing (Cabanos vs. Register of Deeds, etc.,
40 Phil. 620; Severino vs. Severino, 41 Phil. 343).

Lastly, the claim of the heirs of Pedro Jacinto that the latter had
acquired ownership of the property in litigation by prescription, is
likewise untenable. As we have recently held in Juan, et al. vs. Zuiga,
G.R. No. L-17044, April 28, 1962, an action to enforce a trust is
imprescriptible. Consequently, a cohier who, through fraud, succeeds
in obtaining a certificate of title in his name to the prejudice of his co-
heirs, is deemed to hold the land in trust for the latter, and the action
by them to recover the property does not prescribe.

On the other hand, in their appeal Pilar Lazaro and her son contend
that the Court of Appeals erred in holding that they had abandoned
their claim for damages. We also find this to be without merit.

As stated heretofore, the Court of First Instance of Bulacan, after the

trial, dismissed this case and the plaintiffs (Pilar Lazaro Vda. de
Jacinto and her son) appealed to the Court of Appeals. In rendering
judgment the latter court held that said appellants had abandoned their
claim for damages, presumably because of their failure to make in their
brief in assignment of error to the effect that the Court of First Instance
had erred in not awarding them damages. It is now their contention
that having appealed from the dismissal, they were no longer in duty
bound to make a separate specific assignment of error regarding the
court's failure to award damages, because their right to them was
entirely dependent upon the favorable resolution of the assignment of
errors made in their brief assailing the dismissal. This argument loses
force upon consideration of the fact that their right to have the
reconveyance was one thing, and their right to damage, another. There
could be reconveyance in their favor, without this necessarily entitling
them to damages, as for instance, if they produced no evidence to
prove them, or that produced does not sufficiently prove the claim. It
seems clear, therefore, that it was their duty as appellants to bring up
before the Court of Appeals, by specific assignment of error, this
particular question.

WHEREFORE, the decision appealed from being in accordance with

law, the same is hereby affirmed, with costs.