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THEREFORE, THERE
WAS NOTHING THAT Regardless, the holding by both
THEY COULD HAVE lower courts was proper and
SOLD TO THE correct. The non-inclusion in the
RESPONDENTS.25 pre-trial order barred the identity
of the property in litis as an issue,
for it is basic that any factual issue
Ruling of the Court not included in the pre-trial order
will not be heard and considered
The appeal is at the trial,29 much less, on appeal.
meritorious.chanrobleslaw The parties had the obligation to
disclose during the pre-trial all the
1. issues they intended to raise
Identity of the lot in litis is no during the trial, except those
longer a proper issue herein involving privileged or impeaching
matters, for the rule is that the
The CA and the RTC both held that definition of issues during the pre-
the identity of the property in trial conference will bar the
litis was no longer an issue to be consideration of others, whether
considered and determined during trial or on appeal. The basis
because the parties did not raise it of the exclusion is that the parties
at the pre-trial. The Spouses are concluded by the delimitation
Ybaez insist herein, however, that of the issues in the pre-trial order
the RTC and the CA should have because they themselves agreed to
made such a finding nonetheless in it.30chanrobleslaw
view of the materiality of whether
the land claimed by Aznar The waiver of the identity of the
Brothers was different from Lot property in litis as an issue did not
No. 18563, the land subject of violate the right of any of the
their OCT No. 2150. parties herein due to the Rules of
Court having forewarned them in
We clarify that although the Section 7, Rule 18 of the Rules of
Spouses Ybaezs non-appeal Court that should the action
barred them from assigning errors proceed to trial, the pre-trial order
for purposes of this review, they would
are not prevented from now explicitly define and limit the
insisting, if only to uphold the issues to be tried, and its contents
judgment of the CA against Aznar would control the subsequent
course of the action, unless Section 5. Amendment to conform
modified before trial to prevent to or authorize presentation of
manifest injustice. evidence. When issues not
raised by the pleadings are tried
In reality, the parties could still with the express or implied
have reversed the waiver had they consent of the parties, they shall
so wanted. Towards that end, they be treated in all respects as if they
had three opportunities after the had been raised in the pleadings.
issuance of the pre-trial order to Such amendment of the pleadings
submit the identity of the as may be necessary to cause them
property in litis as an issue for trial to conform to the evidence and to
and decision. The first was for raise these issues may be made
either of them to seek the upon motion of any party at any
modification of the pre-trial order time, even after judgment; but
prior to the trial in order to failure to amend does not affect
prevent manifest injustice,31 but the result of the trial of these
neither did so. The second was for issues. If evidence is objected to at
either of them to have the trial the trial on the ground that it is
court consider the identity of the not within the issues made by the
propertyin litis as an issue proper pleadings, the court may allow the
for the trial, but such party must pleadings to be amended and shall
give a special reason to justify the do so with liberality if the
trial court in doing so. This would presentation of the merits of the
have been authorized under action and the ends of substantial
Section 5, Rule 30 of the Rules of justice will be subserved thereby.
Court.32Again, neither of them The court may grant a continuance
seized such opportunity. And the to enable the amendment to be
third was for the Spouses Ybaez made. (5a)
to adduce evidence on Lot No.
18563 being different from the Moreover, for the Spouses Ybaez
land claimed by Aznar Brothers. to call upon the Court now to
Had they done so, Aznar Brothers analyze or weigh evidence all over
could have either allowed such again upon such a factual matter
evidence without objection, or would be impermissible
objected to such evidence on the considering that the Court is not a
ground of its not being relevant to trier of facts.33chanrobleslaw
any issue raised in the pleadings
or in the pre-trial order. The RTC There are exceptional instances in
could then have proceeded as it which the Court has held itself
deemed fit, including allowing competent to make its own
such evidence. This procedure appreciation of the facts, and not
would have been authorized by be concluded by the findings of
Section 5, Rule 10 of the Rules of fact of the trial and appellate
Court, courts, namely: (1) when the
viz:chanRoblesvirtualLawlibrary factual findings of the CA and
those of the trial court were the Spouses Ybaez
contradictory; (2) when the were not buyers in good faith
findings are grounded entirely on
speculation, surmises, or In its assailed judgment, the CA
conjectures; (3) when the concluded that the RTC erred in
inference made by the CA from its holding in favor of the Spouses
findings of fact was manifestly Ybaez, observing as
mistaken, absurd, or impossible; follows:chanRoblesvirtualLawlibra
(4) when there is grave abuse of ry
discretion in the appreciation of
facts; (5) when the CA, in making The trial court however erred
its findings, went beyond the when it
issues of the case, and such held:chanroblesvirtuallawlibrary
findings were contrary to the
admissions of both appellant and Nevertheless, from the totality of
appellee; (6) when the judgment of the evidence adduced by the
the CA was premised on a parties, there is no preponderant
misapprehension of facts; (7) when evidence that the defendants had
the CA failed to notice certain prior knowledge of the previous
relevant facts that, if properly sale of subject property to the
considered, would justify a plaintiff when they bought the
different conclusion; (8) when the same from Adriano D. Ybaez on
findings of facts were themselves June 21, 1978. And there is neither
conflicting; (9) when the findings any showing that defendant had
of fact were conclusions without prior knowledge of such sale when
citation of the specific evidence on they applied for and was issued
which they were based; and (10) Original Certificate of Title No.
when the findings of fact of the CA 2150 on August 14, 1979. Thus,
were premised on the absence of defendants can very well be
evidence but such findings were considered as purchasers to the
contradicted by the evidence on protection of the provisions of P.D.
record. 34 None of the 1529. While plaintiff has shown to
aforementioned exceptions obtains have acquired or was issued tax
in this case. declaration No. GR-07-049-00694
and had paid taxes on the property,
Accordingly, the Court, just as the said tax declaration and realty tax
lower courts have been bound, payments are not conclusive
shall proceed upon the assumption evidence of ownership (Ferrer-
that the property in litis and Lot Lopez vs. Court of Appeals, 150
No. 18563 were one and the same SCRA 393). It cannot prevail over
realty. Original Certificate of Title No.
2150 in the name of the
2. defendants, as a torrens title
CA correctly concluded that concludes all controversies over
Aznar Brothers ownership of land covered by a
owned Lot No. 18563; and that final decree of registration (PNB
vs. Court of Appeals, 153 SCRA Lot No. 18563 from Casimiro, their
435). father, who had died intestate on
July 3, 1968. Holding themselves
The Deed of Absolute Sale (Exhibit as the heirs and successors-in-
F) in favor of plaintiff-appellant interest of Casimiro, they had then
Aznar was registered under Act executed on August 29, 1977 the
3344, as amended on March 23, Extrajudicial Declaration of Heirs
1964 with the Register of Deeds of with an Extrajudicial Settlement of
Cebu City. The registration of said Estate of Deceased Person and
deed gave constructive notice to Deed of Absolute Sale, whereby
the whole world including they divided and adjudicated Lot
defendant-appellees of the No. 18563 among themselves, and
existence of said deed of then sold the entire lot to Adriano.
conveyance. (Gerona v. Guzman,
11 SCRA 153) Defendant- But, as the CA correctly found, the
appellees cannot, therefore, claim Spouses Ybaez held no right to
to be buyers in good faith of the Lot No. 18563 because Adriano,
land in question. Resultantly, they their seller, and his siblings were
merely stepped into the shoes of not the owners of Lot No. 18563.
their sellers vis a vis said land. Indeed, Casimiro had absolutely
Since their sellers were not conveyed his interest in Lot No.
owners of the property in question, 18563 to Aznar Brothers under
there was nothing that they could the Deed of Absolute Sale of
have sold to defendant-appellees.35 March 21, 1964 with the marital
consent of Maria Daclan,
We sustain the CAs conclusion Casimiros surviving spouse and
that the Spouses Ybaez were the mother of Adriano and his
guilty of bad faith, and that they siblings. Considering that such
acquired Lot No. 18563 from conveyance was effective and
sellers who were not the owners. binding on Adriano and his
Accordingly, we resolve the second siblings, there was no valid
error raised herein in favor of transmission of Lot No. 18563
Aznar Brothers. upon Casimiros death to any of
said heirs, and they could not
The records and evidence fully legally adjudicate Lot No. 18563
substantiated the CAs conclusion. unto themselves, and validly
The Spouses Ybaez acquired Lot transfer it to Adriano. The
No. 18563 through the deed of conveyance by Adriano to Jose R.
sale executed on June 21, 1978 by Ybaez on June 21, 1978 was
Adriano in favor of Jose R. Ybaez. absolutely void and ineffectual.
Together with his siblings Fabian
Ybaez, Carmen Ybaez- There is also no question that the
Tagimacruz, Fe Ybaez-Alison, and Spouses Ybaez were aware of the
Dulcisima Ybaez-Tagimacruz, conveyance of Lot No. 18563 by
Adriano had supposedly inherited Casimiro to Aznar Brothers
considering that the Deed of
Absolute Sale of March 21, 1964 prepared by the Chief of the
between Casimiro and Aznar General Land Registration Office,
Brothers was registered in the with the approval of the Secretary
book of registry of unregistered of Justice. The day book shall
land on the same day pursuant to contain the names of the parties,
their agreement. Such registration the nature of the instrument or
constituted a constructive notice of deed for which registration is
the conveyance on the part of the requested, the hour and minute,
Spouses Ybaez pursuant to date and month of the year when
Section 194 of the Revised the instrument was received. The
Administrative Code of 1917, as register book shall contain, among
amended by Act No. 3344, which other particulars, the names, age,
provided as civil status, and the residences of
follows:chanRoblesvirtualLawlibra the parties interested in the act or
ry contract registered and in case of
marriage, the name of the wife, or
Section 194. Recording of husband, as the case may be, the
instruments or deeds relating character of the contract and its
to real estate not registered conditions, the nature of each
under Act Numbered Four piece of land and its improvements
hundred and ninety-six or only, and not any other kind of real
under the Spanish Mortgage estate or properties, its situation,
Law. No instrument or deed boundaries, area in square meters,
establishing, transmitting, whether or not the boundaries of
acknowledging, modifying or the property are visible on the land
extinguishing rights with respect by means of monuments or
to real estate not registered under otherwise, and in the affirmative
the provisions of Act Numbered case, in what they consist; the
Four hundred and ninety-six, permanent improvements existing
entitled The Land Registration on the property; the page number
Act, and its amendments, or of the assessment of each property
under the Spanish Mortgage in the year when the entry is
Law,shall be valid, except as made, and the assessed value of
between the parties thereto, the property for that year; the
until such instrument or deed notary or the officer who
has been registered, in the acknowledged, issued, or certified
manner hereinafter prescribed, the instrument or deed; the name
in the office of the register of of the person or persons who,
deeds for the province or city according to the instrument, are in
where the real estate lies. present possession of each
property; a note that the land has
It shall be the duty of the register not been registered under Act
of deeds for each province or city Numbered Four hundred and
to keep a day book and a register ninety-six nor under the Spanish
book of unregistered real estate, in Mortgage Law; that the parties
accordance with a form to be have agreed to register said
instrument under the provisions of hundred and fifty-two of Act
this Act, and that the original Numbered Twenty-seven hundred
instrument has been filed in the and eleven, the register of deeds
office of the register of deeds, shall register the instrument in the
indicating the file number, and that proper book. In case the
the duplicate has been delivered to instrument or deed presented has
the person concerned; the exact defects preventing its registration,
year, month, day, hour, and minute said register of deeds shall refuse
when the original of the to register it until the defects have
instrument was received for been removed, stating in writing
registration, as stated in the day his reasons for refusing to record
book. It shall also be the duty of said instrument as requested. Any
the register of deeds to keep an registration made under this
index-book of persons and an section shall be understood to
index-book of estates, respectively, be without prejudice to a third-
in accordance with a form to be party with a better right.
also prepared by the Chief of the
General Land Registration Office, The register of deeds shall be
with the approval of the Secretary entitled to collect in advance as
of Justice. fees for the services to be
rendered by him in accordance
Upon presentation of any with this Act, the same fees
instrument or deed relating to real established for similar services
estate not registered under Act relating to instruments or deeds in
Numbered Four hundred and connection with real estate in
ninety-six and its amendments or section one hundred fourteen of
under the Spanish Mortgage Law, Act Numbered Four hundred
which shall be accompanied by as ninety-six entitled The Land
many duplicates as there are Registration Act, as amended by
parties interested, it shall be the Act Numbered Two thousand eight
duty of the register of deeds to hundred and sixty-six. (Emphasis
ascertain whether said instrument in the original; bold italics
has all the requirements for proper supplied.)
registration. If the instrument is
sufficient and there is no Although a deed or instrument
legitimate objection thereto, or in affecting unregistered lands would
case of there having been one, if be valid only between the parties
the same has been dismissed by thereto, third parties would also be
final judgment of the courts, and if affected by the registered deed or
there does not appear in the instrument on the theory of
register any valid previous entry constructive notice once it was
that may be affected wholly or in further registered in accordance
part by the registration of the with Section 194, i.e., the deed or
instrument or deed presented, and instrument was written or
if the case does not come under inscribed in the day book and the
the prohibition of section fourteen
register book for unregistered could not be entitled to the rights
lands in the Office of the Register of a purchaser in good faith. The
of Deeds for the province or city Court emphasized that as to lands
where the realty was located. As not registered under either
ruled inGutierrez v. Mendoza- the Spanish Mortgage Law or
Plaza:36chanrobleslaw theLand Registration Act, the
registration under Act No. 3344
The non-registration of the should produce its effects against
aforesaid deed does not also affect third persons if the law was to
the validity thereof. Registration is have utility at all.38chanrobleslaw
not a requirement for validity of
the contract as between the It is worth mentioning that Act No.
parties, for the effect of 3344 (approved on December 8,
registration serves chiefly to bind 1926) was the governing law at the
third persons. The principal time of the execution of the deed
purpose of registration is of absolute sale of March 21, 1964
merely to notify other persons between Casimiro and Aznar
not parties to a contract that a Brothers, and the deed of absolute
transaction involving the sale of February 17, 1967 between
property has been entered into. Tanuco and Aznar Brothers. Both
The conveyance of unregistered deeds were registered pursuant to
land shall not be valid against any Section 194; while, on the other
person unless registered, except hand, the sale between Adriano
(1) the grantor, (2) his heirs and and Jose R. Ybaez on June 21,
devisees, and (3) third persons 1978 was covered by the P.D. No.
having actual notice or knowledge 1529, also known as theProperty
thereof. As held by the Court of Registration Decree (whose
Appeals, petitioners are the heirs effectivity was upon its approval
of Ignacio, the grantor of the on June 11, 1978).39chanrobleslaw
subject property. Thus, they are
bound by the provisions of the Section 3 of P.D. No. 1529, albeit
deed of donation inter vivos. expressly discontinuing the system
of registration under theSpanish
The effect on third parties of the Mortgage Law, has considered
constructive notice by virtue of the lands recorded under that system
registration of the deed or as unregistered land that could
instrument was aptly illustrated still be recorded under Section 113
in Bautista v. Fule,37 where the of P.D. No. 1529 until the land
Court pronounced that the shall have been brought under the
subsequent buyer of unregistered operation of the Torrens system;
land sold at an execution sale, and has provided that [t]he books
which the purchaser at the public of registration for unregistered
auction registered under Act No. lands provided under Section 194
3344 seven days after that sale, of the Revised Administrative
was deemed to have constructive Code, as amended by Act No.
notice of the sale, and, therefore, 3344, shall continue to remain in
force; provided, that all follows:chanRoblesvirtualLawlibra
instruments dealing with ry
unregistered lands shall
henceforth be registered under It thus appears that the better
Section 113 of this Decree. It is right referred to in Act No. 3344
clear, therefore, that even with the is much more than the mere prior
effectivity of P.D. No. 1529, all deed of sale in favor of the first
unregistered lands may still be vendee. In the Lichauco case just
registered pursuant to Section 113 mentioned, it was the
of P.D. No. 1529, which essentially prescriptive right that had
replicates Section 194, as supervened. Or, as also suggested
amended by Act No. 3344, to the in that case, other facts and
effect that a deed or instrument circumstances exist which, in
conveying real addition to his deed of sale, the
estate notregistered under the first vendee can be said to have
Torrens system should affect only
40 better right than the second
the parties thereto unless the deed purchaser.43 (Bold emphasis
or instrument was registered in supplied.)
accordance with the same
section. chanrobleslaw
41
The Court also observes in Sales v.
Court of Appeals,44 a case
The only exception to the rule on involving parties to a deed of
constructive notice by registration donation who had agreed to
of the deed or instrument affecting register the instrument under Act
unregistered realty exists in favor No. 3344 but failed to do so, that
of a third party with a better the better right of a third party
right. This exception is provided relates to other titles which a
in Section 194, as amended by Act party might have acquired
No. 3344, to the effect that the independently of the unregistered
registration shall be understood deed such as title by
to be without prejudice to a third prescription.45 But the exception
party with a better right; and in does not obviously apply to the
paragraph (b) of Section 113 of Spouses Ybaez because they
P.D. No. 1529, to the effect that acquired their right from Adriano
any recording made under this who did not hold any legal or
section shall be without prejudice equitable interest in Lot No. 18563
to a third party with a better that he could validly transfer to the
right. As to who is a third party Spouses Ybaez.chanrobleslaw
with better right under these
provisions is suitably explained 3.
in Hanopol v. Pilapil,42 a case Estoppel by laches did not bar
where the sale of unregistered Aznar Brothers right over Lot
land was registered under Act No. No. 18563
3344 but the land was sold twice,
as Unexpectedly, the CA disregarded
its aforecited correct conclusion on
Aznar Brothers ownership of Lot
No. 18563, and instead ruled that Aznar Brothers now assails this
estoppel by laches had already adverse ruling under its first
barred Aznar Brothers dominical assigned error by pointing out that
claim over Lot No. 18563. It the CA erred in relying on estoppel
ratiocinated by laches, a rule of equity, to bar
thusly:chanRoblesvirtualLawlibrar its dominical claim over Lot No.
y 18563. It insists that its action to
declare the nullity of
But then, there were pre-existing the Extrajudicial Declaration of
and supervening circumstances Heirs with Extrajudicial
which effectively quashed the Settlement of Estate of Deceased
dominical claim of plaintiff- Person and Deed of Absolute
appellant over the subject land. Sale dated August 29, 1977, and
Plaintiff-appellant was never in the Deed of Absolute Sale of June
possession of the land which it 21, 1978 was imprescriptible
bought. Even after buying the land under Article 1410 of theCivil
from Casimiro Ybaez, plaintiff- Code; and that on the assumption
appellant did not take possession that accion publiciana would
of it. On the other hand, the heirs prescribe in ten years, its filing of
of Casimiro Ybaez took the original complaint on May 26,
possession of said land upon the 1989 was done within the 10-year
latters death. Said heirs sold their period counted from August 14,
shares on said land to one of their 1979, the date of the issuance of
co-heirs, Adriano Ybaez, who in OCT No. 2150 in the name of Jose
turn, sold the whole land to R. Ybaez.
defendant appellees, the spouses
Jose and Magdalena Ybaez. The The Spouses Ybaez counter that
latter continued possessing said the CA was correct because Aznar
land, tax declared it, paid realty Brothers did not assert possession
taxes thereon and finally secured a and ownership over the land for 25
free patent and title over it. Up to years; that it brought its complaint
the present, defendant-appellees only in 1989 after they had
are in possession of the land as undergone the proceedings in
owners thereof. rem for the issuance of OCT No.
2150; that it did not challenge
There is absolutely no doubt that their application for the free
in law, plaintiff-appellant had lost patent or the proceedings for the
its dominical and possessory claim issuance of OCT No. 2150; that it
over the land for its inaction from did not also oppose the conduct of
1964 when it bought the land up to the survey of the land relevant to
1989 when it filed the Complaint in the application for the free patent
the trial court or a long period of despite the notice of the survey
25 years. This is called estoppel given by the surveying engineer to
by laches.46 the adjoining lot owners; that
during the hearing of the case,
Jose R. Ybaez testified that only et sui juris contemptores (For time
three hectares of the land is a means of dissipating
originally owned by Casimiro had obligations and actions, because
been sold to it, the rest having time runs against the slothful and
been retained by Casimiro that careless of their own
became the subject of the rights). Truly, the law serves
49
case. cralawred
10
The governing law for judicial From the foregoing, the following
reconstitution of title is R.A. No. must be present for an order for
26. Sec. 15 thereof provides when reconstitution to issue: (a) that the
an order for reconstitution should certificate of title had been lost or
issue, as destroyed; (b) that the documents
follows:ChanRoblesVirtualawlibrar presented by petitioner are
y sufficient and proper to warrant
the reconstitution of the lost or
Section 15. If the court, after
destroyed certificate of title; (c)
hearing, finds that the documents
that the petitioner is the registered
presented, as supported by parole
owner of the property or had an
evidence or otherwise, are
interest therein; (d) that the
sufficient and proper to warrant
certificate of title was in force at
the reconstitution of the lost or
the time it was lost and destroyed;
destroyed certificate of title,
and (e) that the description, area
and that petitioner is the
and boundaries of the property are
registered owner of the
substantially the same as those
property or has an interest
contained in the lost or destroyed
therein, that the said certificate
certificate of title.27cralawred
of title was in force at the time
it was lost or destroyed, and
In reconstitution proceedings, the
that the description, area and Court has repeatedly ruled that
boundaries of the property are before jurisdiction over the case
substantially the same as those can be validly acquired, it is a
contained in the lost or condition sine quo non that the
destroyed certificate of title, an certificate of title has not been
order of reconstitution shall be
issued to another person. If a Pertinent portions of the LRA
certificate of title has not been lost Report, which the RTC did not wait
but is in fact in the possession of for,
another person, the reconstituted read:ChanRoblesVirtualawlibrary
title is void and the court
rendering the decision has not x x x
acquired jurisdiction over the
petition for issuance of new title. 2.1 When the technical description
The courts simply have no of Lot No. 804-New-B, Psd-2341,
jurisdiction over petitions by appearing on the reproduction of
(such) third parties for Transfer Certificate of Title No.
reconstitution of allegedly lost or 301617, was plotted on the
destroyed titles over lands that are Municipal Index Map No. 5708, it
already covered by duly issued appears that the aforesaid lot is
subsisting titles in the names of identical to Lot 939, Piedad Estate
their duly registered owners. The covered by TCT No. RT-55869
existence of a prior title ipso (42532) in the name of Magnolia
facto nullifies the reconstitution W. Antonino, which title is already
proceedings. The proper recourse totally cancelled and issuing in lieu
is to assail directly in a proceeding thereof TCT Nos. 296725 to
before the regional trial court the 296728 inclusive all in the name of
validity of the Torrens title already Magnolia Antonino, covering Lots
issued to the other 939-A to 939-D of subdivision plan
person. cralawred
28 Psd-00-065898.
No pronouncement as to costs.
SO ORDERED.