Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-7083 May 19, 1955

JUAN EUGENIO and BASILIA EUGENIO, petitioners,

vs.
SILVINA PERDIDO, ROSITA, JOSE, ROMUALDO, FELIX, ALEJANDRINO, FRANCISCA,
ASUNCION, FLORENCIA and AMADO, all surnamed Salang, respondents.

Guillermo E. Boñgolan for petitioners.

Padilla, Carlos, and Fernando for respondents.

BENGZON, J.:

Review on certiorari of a decision of the Court of Appeals, wherein the relevant facts may be stated
as follows:

1. On November 1, 1927 Homestead Patent No. 10847 was issued in the name of Teodoro Eugenio;
2. On March 12, 1932 Teodoro Eugenio in the presence of his son Juan, and daughter Basilia,
(plaintiffs in the case) sold the homestead and delivered possession thereof, for the sum of
P1,300.00 to the defendant Silvina Perdido and her husband Clemente Sadang, whose heirs are
joined as defendants and respondents; 3. On May 4, 1949 this action was filed to recover the land,
upon the theory that the contract was mere mortgage of the homestead, which plaintiff inherited from
their father; and that they had attempted unsuccessfully to repay the debt; 4. The court of first
instance held the contract to be a contract of sale, which was void, because executed within five
years from the issuance of the homestead patent; therefore it ordered to return of the property upon
repayment of P1,300.00 with interest; 5. On appeal, the Court of Appeals reversed the award
holding that plaintiffs had no personality to attack the validity of the sale, and that all they had was
the right to repurchase which they failed to exercise within five years from March 12, 1932.

Denial of plaintiffs' motion to reconsider, led to the presentation of this petition for review, which is
based upon two legal propositions, to wit: (1) The action to annul the sale in 1932 had not
prescribed; (2) the right to repurchase within the five-year period has not lapsed, inasmuch as the
sale was never registered.

There is no question that the sale in March 1932 having been made within five years from "the date
of issuance of the patent" was "unlawful and null void from its execution", by express provision of
sections 116 and 122 of Act No. 2874. (Now Com. Act No. 141).

Under the existing classification, such contract would be "inexisting" and "the action or defense for
declaration" of such inexistence" does not prescribe". (Art. 1410 New Civil Code). While it is true that
this is a new provision of the New Civil Code, it is nevertheless a principle recognized since
Tipton vs. Velasco 6 Phil. 67 that "mere lapse of time cannot give efficacy to contracts that are null
and void"1

The imprescriptibility of plaintiff's action to recover is further strengthened by Sec. 46 of the Land
Registration Act (Act 496) providing that "no title to registered land in derogation to that of the
registered owner shall be acquired by prescription or adverse possession".

In this connection it should be explained that the patent issued to the homesteader Teodoro Eugenio
was recorded in the registry of deeds of Nueva Viscaya, and that Original Certificate of Title No. 62
dated December 5, 1927 Exhibit X was issued in his name. Such being the case his homestead was
considered "registered within the meaning of the Land Registration Act No. 496"2, and enjoys the
same privileges as Torrens titles issued under said legislations.3

The imprescriptibility of such title has recently been recognized in Acierto vs. de los Santos, L-5828,
Sept. 1954.

We are aware, of course, that title by adverse possession (acquisitive prescription) is distinct from
the statute of limitations (extinctive prescription)4 and the operations and effects of such distinction
has been explored during the discussions of this petitions for review.

But we have finally agreed that as to lands registered under the Torrens system, ten years' adverse
possession may not be permitted to defeat the owners' right to possession — which is the necessary
incident ownership. Otherwise loss of the land by prescription would be indirectly approved, in
violation of Sec. 46 of the Land Registration Act. This statute, being a later enactment, may be said
to have partially amended the Statute of Limitation established in Act No. 190 in so far as registered
lands are concerned.

Nevertheless petitioners' case may not so easily prevail on the foregoing considerations, for
respondents have vigorously pressed several points needing particular attention.

Admitting arguendo, they say, that the Deeds of Sale violated the Homestead Law, nevertheless, the
petitioners have no personality to prosecute the instant suit, since it is the Government that is the
real party in interest, and the object of its suit would be reversion of the property to the state. They
cite section 124 of Public Land Law (2874) providing that sale "shall be unlawful and null and void
from its execution; and shall produce the effect of annulling and cancelling the grant, title, patent etc.
. . . and cause the reversion of the property" to the State. The answer to this is that the reversion is
not automatic, (Villacorta vs. Ulanday, 73 Phil. 655) and so long as the Government has not chosen
to act, the rights of the homesteader stand and must be recognized in the courts of law.5

Respondents also content that, having executed the deed of the sale, petitioners are estopped from
denying defendants' ownership and possession, or that, at least, being in pari delicto they should not
be allowed to recover.

As to the first point, it is enough to remember that no estoppel can be predicted on an illegal act. (19
Am. Jur. p. 804). The principle of estoppel as contented by respondents would mean something like
this: petitioners having represented and led the respondents to believe, that the sale was valid, they
may not thereafter allege it is invalid. Yet the respondents are conclusively presumed to know the
law, and should not be allowed to plead estoppel which is founded in ignorance..

"It is generally considered that as between the parties to a contract, validity cannot be given to it by
estoppel if it is prohibited by law or is against the public policy". (19 Am. Jur. p. 802, citing many
cases.)
As to the rule of in pari delicto, homesteaders or their heirs have heretofore been allowed to maintain
actions similar to this.6

In a recent decision annulling a homestead sale, this Court thru Mr. Justice Alex. Reyes said:

Appellants, however, contend that the voiding provision of the Act may not be invoked in
favor of plaintiffs as their predecessor in interest was in pari delicto, and that, since the same
provision says the illegal sale shall have the effect of annulling the grant and cause of
reversion of the property and its improvements to the State, plaintiffs may no longer claim the
homestead. Similar contentions were made in the case of Catalina de los Santos vs. Roman
Catholic Church of Midsayap et al., G.R. No. L-6088, decided February 25, 1954, but they
were there overruled, this Court holding that the pari delicto doctrine may not be invoked in a
case of this kind since it would run counter to an avowed fundamental policy of the State,
that the forfeiture of the homestead is a matter between the State and the grantee of his
heirs, and that until the State has taken steps to annul the grant and asserts title to the
homestead the purchaser is, as against the vendor or his heirs, "no more entitled to keep the
land than any intruder." (Acierto vs. De los Santos 95 Phil., 887).

Lastly respondents say, "Granting, without conceding, that petitioners' predecessor-in-interest,

Teodoro Eugenio, could not have conveyed his homestead title on March 12, 1932, yet his
subsequent acquisition of a complete homestead title sufficient for conveyancing under the
Homestead Law on November 1, 1932 validated whatever defect the title of Clemente Sadang might
have had."

A similar consideration was rejected in Sabas vs. Garma 66 Phil. 471, probably for the reason that a
non-existent contract could not be ratified.

Wherefore, in view of the foregoing consideration, the decision under review should be, and is
hereby reversed. Plaintiffs are permitted to recover the homestead upon payment of P1,300.00 to
defendants. Costs shall be paid by the latter. So ordered.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 111141 March 6, 1998

MARIO Z. TITONG, petitioner,

vs.
THE HONORABLE COURT OF APPEALS (4th Division), VICTORICO LAURIO and ANGELES
LAURIO, respondents.
ROMERO, J.:

Like a priceless treasure coveted by many, but capable of ownership by only one, this 20,592
square-meter parcel of land located at Barrio Titong, Masbate, Masbate is claimed by two
contestants in this petition for review on certiorari. Unfortunately, legal title over the property can be
vested in only one of them.

The case originated from an action for quieting of title filed by petitioner Mario Titong. The Regional
Trial Court of Masbate, Masbate, Branch 44 1 ruled in of private respondents, Victorico Laurio and
Angeles Laurio, adjudging them the true and lawful owners of the disputed land. Affirmed on appeal
to the Court, of Appeals, petitioner comes to us for a favorable reversal.

Petitioner alleges that he is the owner of an unregistered parcel of land with an area of 3.2800
hectares, more or less, surveyed as Lot No. 3918, and declared for taxation purposes in his name.
He claims that on three separate occasions in September 1983, private respondents, with their hired
laborers, forcibly entered a portion of the land containing an area of approximately two (2) hectares;
and began plowing the same under pretext of ownership. Private respondents denied this allegation,
and averred that the disputed property formed part of the 5.5-hectare agricultural land which they
had purchased from their predecessor-in-interest, 2 Pablo Espinosa on August 10, 1981.

In his testimony, petitioner identified Espinosa as his adjoining owner 3, asserting that no
controversy had sprouted between them for twenty years until the latter sold Lot No. 3479 to private
respondent Victorico Laurio. 4 This was corroborated by Ignacio Villamor, who had worked on the
land even before its sale to Espinosa in 1962. The boundary between the land sold to Espinosa and
what of petitioner's property was the old Bugsayon river. When petitioner employed Bienvenido Lerit
as his tenant in 1962, he instructed Lerit to change the course of the old river and direct the flow of
water to the lowland at the southern of petitioner' s property, thus converting the old river into a
riceland. 5

For his part, private respondent anchors his defense on the following facts: He denied petitioner's
claim of ownership, recounting that the area and boundaries of the disputed land remained unaltered
during the series of conveyances prior to its coming into his hands. According to him, petitioner first
declared the land for taxation purposes under Tax Declaration No. 2916, 6 which showed that the
land had an area of 5.5 hectares and was bounded on the North by the Bugsayon River; on the East
by property under the ownership of Lucio Lerit; on the South by property owner by Potenciano
Zaragoza; and on the West by property owned by Agapito de la Cruz. 7 Private Respondent then
alleges that, on December 21, 1960, petitioner sold this property to Concepcion Verano vda. de
Cabug, after which Tax Declaration No. 5339 8 was issued in her favor. In compliance with their
mutual agreement to repurchase the same, petitioner reacquired the property by way of sale 9 on
August 24, 1962 and then declared it for taxation purposes in his name under Tax Declaration No.
5720. 10 However, the property remained in petitioner's hands for only four (4) days because, on
August 28, 1962, he sold it to Espinosa 11who then declared it in his name under Tax Declaration
No. 12311. 12 Consequently, the property became a part of the estate of Pablo Espinosa's wife, the
late Segundina Liao Espinosa. On August 10, 1981, her heirs executed an instrument denominated
as "Extrajudicial Settlement of Estate with Simultaneous Sale" whereby the 5.5-hectare property
under Tax Declaration No. 12311 was sold to private respondent 13 in consideration of the amount
of P5,000.00. Thereafter, Tax Declaration No. 12738 was issued in the name of private respondent.
In all these conveyances, the area and boundaries of the property remained exactly the same as
those appearing in Tax Declaration No. 2916 under petitioner's name.

It was proved at the proceedings in the court a quo that two (2) surveys were made of the disputed
property. The first survey 14 was made for petitioner, while the second was the relocation survey
ordered by the lower court. As anticipated, certain discrepancies between the two surveys surfaced.
Thus, contrary to petitioner's allegation in his complaint that he is the owner of only 3.2800 hectares,
he was actually claiming 5.9789 hectares, the total areas of Lot Nos. 3918, 3918-A and 3606. On the
other hand, Lot No. 3479 pertaining to Espinosa, was left with only an area of 4.1841 hectares
instead of the 5.5 hectares sold by petitioner to him. Apprised of the discrepancy, private respondent
filed a protest 15 before the Bureau of Lands against the first survey, likewise filing a case for
alteration of boundaries before the municipal trial court, the proceedings of which, however, were
suspended of the instant case. 16

Private respondent testified that petitioner is one of the four heirs of his mother, Leonida Zaragoza.
In the Extrajudicial Settlement with Sale of Estate of the deceased Leonida Zaragoza, 17 the heirs
adjudicated unto themselves the 3.6-hectare property of the deceased. The property involved is
described in the instrument as having been declared under Tax Declaration No. 3301 18 and as
bounded on the North by Victor Verano, on the East by Benigno Titong, on the South by the
Bugsayon River and on the West by Benigno Titong. On September 9, 1969, Tax Declaration No.
8723 was issued to petitioner for his corresponding share in the estate.

However, instead of reflecting only .9000 hectare as his rightful share in the extrajudicial
settlement 19 petitioner's share was bloated to 2.4 hectares. It therefore appeared to private
respondent that petitioner encroached upon his (Laurio's) property and declared it a part of his
inheritance. 20 The boundaries were likewise altered so that it was bounded on the North by Victor
Verano, on the East by Benigno Titong, on the South by property owner Espinosa, and on the West
by property owner Adolfo Titong. 21 Private respondent accordingly denied that petitioner had
diverted the course of the Bugsayon River after he had repurchased the land from Concepcion
Verano vda. de Cabug 22 because the land was immediately sold to Espinosa shortly thereafter. 23

The lower court rendered a decision in favor of private respondents, declaring him as the true and
absolute owner of the litigated property and ordering petitioner to respect private respondents' title
and ownership over the property and to pay attorney's fees, litigation expenses, costs and moral
damages.

Petitioner appealed to the Court of Appeals, which affirmed the decision. On motion for
reconsideration, the same was denied for lack of merit. Hence, this petition for review on certiorari.

At the outset, we hold that the instant petition must be denied for the reason that the lower court
should have outrightly dismissed the complaint for quieting of title. The remedy of quieting of title
may be availed of under the circumstances enumerated in the Civil Code:

Art. 476. Whenever there is a cloud on title to real property or any interest therein, by
reason of any instrument, record, claim, encumbrance or proceedingwhich is
apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be brought to
remove such cloud or to quiet the title.

An action may also be brought to prevent a cloud from being cast upon title to real property or any
interest therein.

Under this provision, a claimant must show that there is an instrument, record, claim, encumbrance
or proceeding which constitutes or casts a cloud, doubt, question or shadow upon the owner's title to
or interest in real property. 24 The ground or reason for filing a complaint for quieting of title must
therefore be "an instrument, record, claim, encumbrance or proceeding." Under the maxim expresio
mius est exclusio alterius, these grounds are exclusive so that other reasons outside of the purview
of these reasons may not be considered valid for the same action. 25

Had the lower court thoroughly considered the complaint filed, it would have had no other course of
action under the law but to dismiss it. The complaint failed to allege that an "instrument, record,
claim, encumbrance or proceeding" beclouded the plaintiff's title over the property involved.
Petitioner merely alleged that the defendants (respondents herein), together with their hired laborers
and without legal justification, forcibly entered the southern portion of the land of the plaintiff and
plowed the same.

He then proceeded to claim damages and attorney's fees. He prayed that, aside from issuing a writ
or preliminary injunction enjoining private respondents and their hired laborers from intruding into the
land, the court should declare him "the true and absolute owner" thereof. Hence, through his
allegations, what petitioner imagined as clouds cast on his title to the property were private
respondents' alleged acts of physical intrusion into his purported property. Clearly, the acts alleged
may be considered grounds for an action for forcible entry but definitely not one for quieting of title.

When the issues were joined by the filing of the answer to the complaint, it would have become
apparent to the court that the case was a boundary dispute. The answer alleged, among other
matters, that petitioner, "in bad faith, surreptitiously, maliciously and fraudulently had the land in
question included in the survey of his land which extends to the south only as far as the Bugsayon
River which is the visible and natural and common boundary between the properties." 26 Moreover,
during the hearing of the case, petitioner proved that it was actually a boundary dispute by evidence
showing what he considered as the boundary of his property which private respondents perceived as
actually encroaching on their property. In this regard, the following pronouncements of the Court are
apropos:

. . . (T)he trial court (and likewise the respondent Court) cannot, in an action for
quieting of title, order the determination of the boundaries of the claimed property, as
that would be tantamount to awarding to one or some of the parties the disputed
property in an action where the sole issue is limited to whether the instrument,
record, claim, encumbrance or proceeding involved constitutes a cloud upon the
petitioners' interest or title in and to said property. Such determination of boundaries
is appropriate in adversarial proceedings where possession or ownership may
properly be considered and where evidence aliunde, other than the "instrument,
record, claim, encumbrance or proceeding" itself, may be introduced. An action for
forcible entry, whenever warranted by the period prescribed in Rule 70, or for
recovery of possession de facto, also within the prescribed period, may be availed of
by the petitioners, in which proceeding the boundary dispute may be fully threshed
out. 27

Nonetheless, even if the complaint below were to be considered as a valid one for quieting of title,
still, the instant petition for review on certiorari must fail.

As a general rule, findings of fact of the Court of Appeals are binding and conclusive upon this Court.
Such factual findings shall not be disturbed normally unless the same are palpably unsupported by
the evidence on record or the judgment itself is based on a misapprehension of facts. 28Upon an
examination of the records, the Court finds no evident reason to depart from the general rule.

The courts below correctly held that when petitioner "sold, ceded, transferred and conveyed" the 5.5-
hectare land in favor of Pablo Espinosa, his rights of ownership and possession pertaining thereto
ceased and these were transferred to the latter. In the same manner, Espinosa's rights of ownership
over the land ceased and were transferred to private respondent upon its sale to the latter. This finds
justification in the Civil Code, as follows:

Art. 1458. By the contract of sale one of the contracting parties obligates himself to
transfer the ownership of and to deliver a determinate thing, and the other to pay
therefor a price certain in money or its equivalent.

A contract of sale may be absolute or conditional.

In other words, a sale is a contract transferring dominion and other real rights in the thing sold. 29 In
the case at bar, petitioner's claim of ownership must of necessary fail because he has long
abdicated his rights over the land when he sold it to private respondent's predecessor-in-interest.

Petitioner's claim that he acquired ownership over the disputed land through possession for more
than twenty (20) years is likewise unmeritorious. While Art. 1134 of the Civil Code provides that
"(o)wnership and other real rights over immovable property are acquired by ordinary prescription
through possession of ten years," this provision of law must be read in conjunction with Art. 1117 of
the same Code. This article states that ". . . (o)rdinary acquisitive prescription of things requires
possession in good faith and with just title for the time fixed by law." Hence, a prescriptive title to real
estate is not acquired by mere possession thereof under claim of ownership for a period of tea years
unless such possession was acquired con justo tilulo y buena fe (with color of title and good
faith). 30 The good faith of the possessor consists in the reasonable belief that the person from
whom he received the thing was the owner thereof, and could transmit his ownership. 31 For
purposes of prescription, there is just title when the adverse claimant came into possession of the
property through one of the modes recognized by law for the acquisition of ownership or other real
rights but the grantor was not the owner or could not transmit any right. 32

Petitioners have not satisfactorily met the requirements of good faith and just title. As aptly observed
by the trial court, the plaintiff's admitted acts of converting boundary line (Bugsayon River) into a
ricefield and thereafter claiming ownership thereof were acts constituting deprivation of the rights of
others and therefore "tantamount to bad faith." 33 To allow petitioner to benefit from his own wrong
would run counter to the maxim ex dolo malo non oritur actio (no man can allowed to found a claim
upon his own wrongdoing). Extraordinary acquisitive prescription cannot similarly vest ownership
over the property upon petitioner. Art. 1137 of the Civil Code states that "(o)wnership and other real
rights over immovables prescribe through uninterrupted adverse possession thereof for thirty years,
without need of title or of good faith." Petitioner's alleged possession in 1962 up to September 1983
when private respondents entered the property in question spanned twenty-one (21) years. This
period of time is short of the thirty-year requirement mandated by Art. 1137.

Petitioner basically anchors his claim over the property on the survey plan prepared upon his
request, 34 the tax declaration in his name, 35 the commissioner's report on the relocation
survey, 36 and the survey plan. 37 Respondent court correctly held that these documents do not
conclusively demonstrate petitioner's title over Lot Nos. 3918-A and 3606.

A survey is the act by which the quantity of a parcel of land is ascertained and so a paper containing
a statement of courses, distances, and quantity of
land. 38 A survey under a proprietary title is not a conveyance. It is an instrument sui generis in the
nature of a partition; a customary mode in which a proprietor has set off to himself in severalty a part
of the common estate. 39Therefore, a survey, not being a conveyance, is not a mode of acquiring
ownership. A fortiori, petitioner cannot found his claim on the survey plan reflecting a subdivision of
land because it is not conclusive as to ownership as it may refer only to a delineation of
possession. 40
Furthermore, the plan was not verified and approved by the Bureau of Lands in accordance with
Sec. 28, paragraph 5 of Act No. 2259, the Cadastral Act, as amended by Sec. 1862 of Act No. 2711.
Said law ordains that private surveyors send their original field notes, computations, reports,
surveys, maps and plots regarding a piece of property to the Bureau of Lands for verification and
approval. 41 A survey plan not verified and approved by said Bureau is nothing more than a private
writing, the due execution and authenticity of which must be proven in accordance with Sec. 20 of
Rule 132 of the Rules of Court. The circumstance that the plan was admitted in evidence without any
objection as to its due execution and authenticity does not signify that the courts shall give probative
value therefor. To admit evidence and not to believe it subsequently are not contradictory to each
other. This Court cannot alter the conclusions of
the Court of Appeals on the credibility accorded to evidence presented by the parties. 42

Similarly, petitioner's tax declaration issued under his name is not even persuasive evidence of his
claimed ownership over the land in dispute. A tax declaration, by itself, is not considered conclusive
evidence of ownership. 43 It is merely an indicium of a claim of ownership. 44 Because it does not
by itself give title, it is of little value in proving one's ownership. 45 Moreover, the incompatibility in
petitioner's tax declaration and the commissioner's report as regards the area of his claimed property
is much too glaring to be ignored. Tax Declaration No. 8717 states that petitioner's property has an
area of 3.2800 hectares while the totality of his claim according to the commissioned geodetic
engineer's survey amounts to 4.1385 hectares. There is therefore a notable discrepancy of 8,585
square meters. On the other hand, private respondent's claimed property, as borne out by Tax
Declaration No. 12738, totals 5.5 hectares, a more proximate equivalent of the 5.2433-hectare
property as shown by the commissioner's report.

There is also nothing in the commissioner's report that substantiates petitioner's claim that the
disputed land was inside his property. Petitioner capitalizes on the lower court's statement in its
decision 46 that "as reflected in the commissioner's report dated May 23, 1984 (Exhibit 3-3-A), the
area claimed is inside lot 3918 of the defendants (Exhibit 2)" 47 or the private respondents. A careful
reading of the decision would show that this statement is found in the summary of defendants'
(herein private respondents) evidence. Reference to Lot No. 3918 may, therefore, be attributed to
mere oversight as the lower court even continues to state the defendants' assertion that the 2-
hectare land is part of their 5.5-hectare property. Hence, it is not amiss to conclude that either
petitioner misapprehended the lower court's decision or he is trying to contumaciously mislead or
worse, deceive this Court.

With respect to the awards of moral damages of P10,000.00 and attorney's fees of P2,000.00, the
Court finds no cogent reason to delete the same. Jurisprudence is replete with rulings to the effect
that where fraud and bad faith have been established, the award of moral damages is in
order. 48 This pronouncement finds support in Art. 2219 (10) of the Civil Code allowing the recovery
of moral damages for acts enumerated in Art. 21 of the same Code. This article states that "(a)ny
person who wilfully causes loss or injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for the damage." The moral damages are
hereby increased to P30,000.00. We agree with the respondent court in holding that the award of
attorney's fees is justified because petitioner filed a clearly unfounded civil action. 49

WHEREFORE, the instant petition for review on certiorari is hereby DENIED and the questioned
Decision of the Court of Appeals AFFIRMED. This Decision is immediately executory. Costs against
petitioner.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 121157 July 31, 1997

HEIRS OF SEGUNDA MANINGDING, represented by DELFIN, GIL, EMMA, MANUEL,

RACQUEL, ESTER, REMEDIOS and JESSIE, all surnamed PARAYNO, MAXIMA PARAYNO,
LEONARDO PARAYNO and FELICISIMA PARAYNO, petitioners,
vs.
COURT OF APPEALS and ROQUE BAUZON (deceased), represented by his heirs and co-
defendants Luis and Eriberta Bauzon; LUIS BAUZON, ERIBERTA BAUZON (deceased),
substituted by her husband PLACIDO ZULUETA, and JOSE PARAYNO, respondents.

BELLOSILLO, J.:

This is an action for annulment of documents, accounting and partition of two (2) parcels of land, a
riceland and a sugarland, situated in Calasiao, Pangasinan. Petitioners claim that they, together with
private respondents Luis and Eriberta Bauzon, own the disputed lots in common and pro-indiviso.
Luis and Eriberta, the latter represented by her husband Placido Zulueta, aver that their father
Roque Bauzon was the owner of the subject lots by virtue of a deed of donation propter nuptias.
Roque, together with Juan Maningding, Maria Maningding and Segunda Maningding were the
surviving children of Ramon Bauzon y Untalan who died intestate in 1948. According to petitioners,
Roque Bauzon repudiated the co-ownership over the sugarland in 1965 and adjudicated it to
himself,1 and that in 1970 Juan and Maria Maningding renounced and quitclaimed their shares over
the riceland in favor of Roque Bauzon by virtue of an Affidavit of Quitclaim and
Renunciation.2 Subsequently, Roque Bauzon transferred the riceland to his son Luis Bauzon and the
sugarland to his daughter Eriberta Bauzon, both transactions being evidenced by deeds of sale.

On 31 July 1979 Segunda Maningding died. Her heirs allegedly discovered the transfers made by
Roque Bauzon in favor of his children only in 1986. Consequently, the heirs sought the partition of
the properties as well as the accounting of the produce but were unsuccessful.

On the other hand private respondents aver that the Affidavit of Quitclaim and Renunciation over
the riceland was executed not only by Juan Maningding and Maria Maningding but also by Segunda
Maningding. With regard to the sugarland, Roque Bauzon denied having executed the Affidavit of
Self-Adjudication presented by petitioners. He claimed that he acquired ownership over both
the sugarlandand the riceland by donation propter nuptias from his parents Ramon Bauzon and
Sotera Zulueta on 21 April 1926 in consideration of his marriage to Petra Loresco. Since the death of
Ramon Bauzon in 1948, Roque had been in open, continuous, notorious, adverse and actual
possession of the subject properties.
The trial court found that the parcels of land formed part of the estate of Ramon Bauzon and his wife
Sotera Zulueta which, upon their death, devolved by right of succession to their children Segunda
Maningding, Maria Maningding, Juan Maningding and Roque Bauzon in equal pro-indiviso shares.
The court a quo however awarded both parcels to Segunda Maningding and Roque Bauzon as co-
owners in equal shares after finding that Juan Maningding and Maria Maningding had already
executed an Affidavit of Quitclaimand Renunciation. It rejected the deed of donation for failure to
prove its due execution and authenticity and ruled that the same was negated by the Affidavit of
Quitclaim and Renunciation of Juan Maningding and Maria Maningding in favor of Roque Bauzon
and nullified the deed of sale by Roque Bauzon in favor of Luis Bauzon as regards the riceland and
to Eriberta Bauzon with respect to the sugarland. It concluded that Roque Bauzon could not have
validly conveyed both parcels as one-half (1/2) of each parcel rightfully belonged to Segunda
Maningding and her heirs.

The Court of Appeals however ruled that the properties validly pertained to Roque Bauzon by virtue
of the donationpropter nuptias. Consequently, the transfers made by Roque Bauzon must be given
effect. However, upon motion for reconsideration, the same deed of donation was declared null and
void by the appellate court for failure to comply with Art. 633 of the old Civil Code, the law then
applicable, which required for the validity of the deed of donation to be in a public instrument.
Nevertheless, the same court maintained that the properties belonged to Roque Bauzon by virtue of
acquisitive prescription.

We agree with the Court of Appeals. Rogue Bauzon acquired ownership over the subject properties
by acquisitive prescription. Prescription, in general, is a mode of acquiring (or losing) ownership and
other real rights through the lapse of time in the manner and under conditions laid down by law,
namely, that the possession should be in the concept of an owner, public, peaceful, uninterrupted
and adverse.3Acquisitive prescription is either ordinary or extraordinary.4Ordinary acquisitive
prescription requires possession in good faith and with just title for ten (10) years. In extraordinary
prescription ownership and other real rights over immovable property are acquired through
uninterrupted adverse possession thereof for thirty (30) years, without need of title or of good faith.5

The disputed lots are unregistered lands, both parcels being covered only by tax declarations
formerly in the name of Ramon Bauzon and now transferred to Luis and Eriberta Bauzon. While tax
declarations and receipts are not conclusive evidence of ownership, yet, when coupled with proof of
actual possession, as in the instant case, tax declarations and receipts are strong evidence of
ownership.6

Even assuming that the donation proper nuptias is void for failure to comply with formal requisites,7 it
could still constitute a legal basis for adverse possession. With clear and convincing evidence of
possession, a private document of donation may serve as basis for a claim of
ownership.8 In Pensader v. Pensader9 we ruled that while the verbal donation under which the
defendant and his predecessors-in-interest have been in possession of the lands in question is not
effective as a transfer of title, still it is a circumstance which may explain the adverse and exclusive
character of the possession. In Espique v. Espique10 we held —

There is no question that the donation in question is invalid because it involves an

immovable property and the donation was not made in a public document as required by
Article 633 of the old Civil Code, in connection with Article 1328 of the same Code
(concerning gifts propter nuptias), but it does not follow that said donation may not serve as
basis of acquisitive prescription when on the strength thereof the done has taken possession
of the property adversely and in the concept of owner, or, as this Court well said: "While the
verbal donation, under which the defendants and his predecessors-in-interest have been in
possession of the lands in question, is not effective as a transfer of title, yet it is a
 circumstances which may explain the adverse and exclusive character of the possession'
(Pensader v. Pensader, 47 Phil. 673, 680). This also an action for partition. It was shown that
the donation of the property was made not even in a private document but only verbally. It
was also shown that the defendants, through their predecessors-in-interest, were in adverse
and continuous possession of the lands for a period of over 30 years. Yet, the court decided
the case in favor of defendants on the ground of acquisitive prescription. There is a close
parallelism between the facts of this case and the present.

xxx xxx xxx

We do not need to stretch our mind to see that under such allegations plaintiffs intended to
convey the idea that defendant has possessed the lands openly, adversely and without
interruption from 1916 to 1949 for he is the one who has possessed and reaped the whole
benefit thereof. As to the character of the possession held by defendant during that period
one cannot also deny that it is in the concept of owner considering that the lands were
donated to him by his predecessors-in-interest on the occasion of his marriage even if the
same was not embodied in a public instrument. The essential elements constituting
acquisitive prescription are therefore present which negative the right of plaintiffs to ask for
partition of said properties. On this point we find pertinent the following observation of the
trial court; "Any person who claims right of ownership over immovable properties and does
not invoke that right but instead tolerated others in possession for thirty years is guilty of
laches and negligence and he must suffer the consequence of his acts."

In the instant case, Roque Bauzon possessed the subject parcels of land in the concept of owner by
virtue of the donation propter nuptias. The possession was public as it was Roque Bauzon who
personally tilled and cultivated the lots. The acts of reaping the benefits of ownership were manifest
and visible to all. These acts were made more pronounced and public considering that the parcels of
land are located in a municipality wherein ownership and possession are particularly and normally
known to the community. Roque peacefully possessed the properties as he was never ousted
therefrom nor prevented from enjoying their fruits. His possession was uninterrupted and in good
faith because of his well-founded belief that the donationpropter nuptias was properly executed and
the grantors were legally allowed to convey their respective shares in his favor. He likewise
appropriated to himself the whole produce of the parcels of land to the exclusion of all others.

The donation propter nuptias was effected as early as 21 April 1926. It was only in 1986 when the
heirs of Segunda Maningding demanded partition of the properties and conveyance of the produce.
Sixty (60) years have already elapsed. Even granting that Roque Bauzon possessed the properties
only upon the death of his father in 1948, more than thirty (30) years have already passed. In either
case, acquisitive prescription has already set in in favor of Roque Bauzon.

Again, even if we assume the absence of good faith and just title, the ownership of the two (2)
parcels would still appertain to Roque Bauzon. As testified to by Delfin Parayno, one of petitioners,
Roque Bauzon and his heirs had been in continuous, adverse and public possession of the property
since 1948 up to 1986, or a period of thirty-six (36) years, which is more than the required thirty-year
extraordinary prescription.

Prescription, as a rule, does not run in favor of a co-heir or co-owner as long as he expressly or
impliedly recognizes the co-ownership.11 Co-owners cannot acquire by prescription the share of the
other co-owners, absent a clear repudiation of the co-ownership. In order that title may prescribe in
favor of one of the co-owners, it must be clearly shown that he has repudiated the claims of the
others, and that they were apprised of his claim of adverse and exclusive ownership, before the
prescriptive period would begin to run. Mere refusal to accede to a partition, without specifying the
grounds for such refusal, cannot be considered as notice to the other co-owners of the occupant's
claim of title in himself in repudiation of the co-ownership. The evidence relative to the possession,
as a fact upon which the alleged prescription is based, must be clear, complete and conclusive in
order to establish said prescription without any shadow of doubt; and when upon trial it is not shown
that the possession of the claimant has been adverse and exclusive and opposed to the rights of the
others, the case is not one of ownership, and partition will lie.12

Therefore while prescription among co-owners cannot take place when the acts of ownership
exercised are vague and uncertain, such prescription arises and produces all its effects when the
acts of ownership do not evince any doubt as to the ouster of the rights of the other co-owners.13 As
disclosed by the records, Roque Bauzon and his heirs possessed the property from 1948 to 1986 to
the exclusion of petitioners who were never given their shares of the fruits of the properties, for
which reason they demanded an accounting of the produce and the conveyance to them of their
shares. Unfortunately they slept on their rights and allowed almost thirty-six (36) years to lapse
before attempting to assert their right. Perforce, they must suffer the consequence of their inaction.

WHEREFORE, the petition is DENIED. The Resolution of the Court of Appeals of 7 July 1995 which
modified its Decision of 29 November 1994 and holding that the deceased Roque Bauzon acquired
the disputed two (2) parcels of land by acquisitive prescription is AFFIRMED. Costs against
petitioners.

SO ORDERED.

SECOND DIVISION

G.R. No. 122047 October 12, 2000

SPOUSES SERAFIN SI AND ANITA BONODE SI, petitioners,

vs.
COURT OF APPEALS, SPOUSES JOSE ARMADA and REMEDIOS ALMANZOR (deceased, and
substituted by heirs: Cynthia Armada, Danilo Armada and Vicente Armada) respondents.

DECISION

QUISUMBING, J.:

This petition for certiorari under Rule 45 assails the Decision1 dated March 25, 1994, of the Court of
Appeals and its Resolutions2 dated March 24, 1995 and September 6, 1995 in CA-G.R. CV No.
30727. The Court of Appeals reversed the decision of the Regional Trial Court of Pasig City, Branch
113, and nullified the sale of the subject lot by the spouses Crisostomo and Cresenciana Armada to
spouses Serafin and Anita Si. The dispositive portion of the respondent court's decision reads:
"WHEREFORE, in view of the foregoing, the decision appealed from is hereby REVERSED, and a
new one is rendered:

1) Annulling and declaring as invalid the registration of the Deed of Absolute Sale dated
March 27, 1979 executed by Cresenciana V. Alejo in favor of Anita Bonode Si.

2) Ordering the Register of Deeds of Pasay City to annul and cancel Transfer Certificate of
Title No. 24751, issued in the name of Anita Bonode Si, married to Serafin D. Si., Jose R.
Armada, married to Remedios Almanzor and Dr. Severo R. Armada Jr., single.

3) Ordering the Register of Deeds of Pasay City to reconstitute and revive Transfer
Certificate of Title No. 16007 in the names of Jose, Crisostomo and Severo, Jr.

4) That plaintiffs be allowed to repurchase or redeem the share corresponding to the share of
Crisostomo Armada within thirty (30) days from notice in writing by Crisostomo Armada.

5) The defendants-appellees are jointly and severally ordered to pay the plaintiffs-appellants
the sum of P10,000.00 as moral damages.

6) The defendants-appellees are jointly and severally ordered to pay the plaintiff-appellants
the sum of P10,000.00 as attorney's fees and litigation expenses and costs of suit.

SO ORDERED."3

The factual background of the case is as follows:

The 340 square meters of land, situated in San Jose District, Pasay City, the property in dispute,
originally belonged to Escolastica, wife of Severo Armada, Sr. This was covered by Transfer
Certificate of Title (TCT) No. (17345) 2460. During the lifetime of the spouses, the property was
transferred to their children and the Registry of Deeds, Pasay City, issued TCT No. 16007 in the
names of the three sons, as follows : "DR. CRISOSTOMO R. ARMADA, married to Cresenciana V.
Alejo, 113.34 Square Meters; JOSE R. ARMADA, married to Remedios Almanzor, 113.33 Square
Meters; and DR. SEVERO R. ARMADA, Jr., single, all of legal age, Filipinos."4Annotated also in the
title is the total cancellation of said title "... by virtue of the Deed of Sale, (P.E. 77952/T-24751),
dated March 28, 1979, executed by CRESENCIANA V. ALEJO, as attorney-in-fact of
CRISOSTOMO R. ARMADA, conveying 113.34 square meters of the property herein, in favor of
ANITA BONODE SI, married to Serafin D. Si, for the sum of P75,000.00, issuing in lieu thereof
Transfer Certificate of Title No. 24751, Reg. Book T-102. (Doc. No. 17, Page No. 5, Book No. 253 of
Notary Public of Pasay City, Manila, Julian Florentino)."5

On April 15, 1980, herein spouses Jose Armada and Remedios Almanzor, filed a complaint for
Annulment of Deed of Sale and Reconveyance of Title with Damages, against herein petitioners
Anita and Serafin Si and Conrado Isada, brother-in-law of Cresenciana. Isada brokered the sale.

The complaint alleged that Conrado Isada sold Crisostomo's share by making it appear that
Cresenciana, the attorney-in-fact of her husband, is a Filipino citizen, residing with Isada at No. 13-
4th Camarilla Street, Murphy, Cubao, Quezon City. By this time, Crisostomo and Cresenciana had
migrated and were already citizens of the United States of America. It also stated that when
petitioners registered the deed of absolute sale they inserted the phrase "... and that the co-owners
are not interested in buying the same in spite of notice to them.", and that petitioners knew of the
misrepresentations of Conrado. Further, the complaint alleged that the other owners, Jose and
Severo, Jr., had no written notice of the sale; and that all upon learning of the sale to the spouses Si,
private respondents filed a complaint for annulment of sale and reconveyance of title with damages,
claiming they had a right of redemption.

Petitioners, on the other hand, alleged that on October 2, 1954, Escolastica, with the consent of her
husband executed three separate deeds of sale (Exhibits 1, 2, and 3)6conveying 113.34 square
meters of the property to Severo, and 113.33 square meters each to Crisostomo and Jose. The
three deeds of sale particularly described the portion conveyed to each son in metes and bounds.
Petitioners contend that since the property was already three distinct parcels of land, there was no
longer co-ownership among the brothers. Hence, Jose and Severo, Jr. had no right of redemption
when Crisostomo sold his share to the spouses Si. Petitioners point out that it was only because the
Armada brothers failed to submit the necessary subdivision plan to the Office of the Register of
Deeds in Pasay City that separate titles were not issued and TCT No. 16007 was issued and
registered in the names of Jose, Crisostomo, and Severo, Jr.

After trial on the merits, the court ruled for petitioners:

"IN VIEW OF ALL THE FOREGOING, the complaint is hereby DISMISSED. With costs against the
plaintiffs."7

Private respondents appealed to the Court of Appeals. On March 25, 1994, the appellate court
issued the decision now assailed by petitioners. In reversing the decision of the trial court and ruling
for private respondents, the Court of Appeals found that:

"A careful examination of TCT No. 16007 (Exh. 'A') shows that the portion sold by virtue of the
Deeds of Sale (Exh. 1, 2, & 3) to the Armada brothers do not appear in the said title, neither does it
indicate the particular area sold. Moreover, no evidence was presented to show that the Register of
Deeds issued TCT No. 16007 (Exh. 'A') on the basis of the said deeds of Sale. In fact, TCT No.
16007 (Exh. 'A') shows that the lot is co-owned by Jose, Crisostomo and Severo, Jr. in the
proportion of 113.33, 113.34 and 113.33 sq. m. respectively.

Furthermore, the evidence on record shows that the Deed of Absolute Sale (Exh. 'B'), executed by
Cresencia Armada in favor of defendants Si, stated that the portion sold was the 'undivided one
hundred thirteen & 34/100 (113.34) square meters' of the parcel of land covered by TCT NO. 16007
of the Registry of Deeds for Pasay City, which means that what was sold to defendants are still
undetermined and unidentifiable, as the area sold remains a portion of the whole.

Moreover, plaintiff Remedi[o]s Armada testified that on March 27, 1979, Crisostomo Armada, thru
his attorney-in-fact and co-defendant, Cresenciana Alejo, sold his undivided 113.34 share to
defendants, Sps. Si as evidenced by a Deed of Absolute Sale (Exh. 'B'), and presented for
registration with the Register of Deeds (Exh. 'B-1') without notifying plaintiffs of the sale (TSN, pp. 6-
8, December 20, 1988). Instead, it appears that the phrase 'and that the co-owners are not
interested in buying the same inspite of notice to them', was inserted in the Deed of Sale (Exh. 'B').

xxx

Otherwise stated, the sale by a (sic) co-owner of his share in the undivided property is not invalid,
but shall not be recorded in the Registry Property, unless accompanied by an affidavit of the Vendor
that he has given written notice thereof to all possible redemptioners."8
On August 29, 1994, petitioners' counsel on record, Atty. Roberto B. Yam received a copy of the CA
decision. On October 14, 1994, he filed a motion for reconsideration, but it was denied by the Court
of Appeals on November 21, 1994, for being filed out of time.

On December 5, 1994, petitioners filed their motion for new trial under Section 1, Rule 53 of the
Revised Rules of Court.9Petitioners presented new evidence, TCT No. (17345) 2460, registered in
the name of Escolastica de la Rosa, married to Severo Armada, Sr., with annotation at the back
stating that the cancellation was by virtue of three deeds of sale in favor of Escolastica's sons. On
March 24, 1995, respondent court denied the motion, reasoning that when the motion was filed, the
reglementary period had lapsed and the decision had become final and executory. Petitioners'
motion for reconsideration of said resolution was denied.

Hence, the present petition, alleging that:

"1. Respondent Court of Appeals committed a reversible error in ruling that a co-ownership
still existed.

"2. Respondent Court of Appeals committed a reversible error in denying the Motion for
Reconsideration of its Decision of 25 March 1994 on purely technical grounds.

"3. Respondent Court of Appeals committed a reversible error in denying the Motion for New
Trial.

"4. Respondent Court of Appeals committed a reversible error in ordering petitioners to pay
moral damages, attorney's fees, litigation expenses and the costs of the suit."10

In essence, this Court is asked to resolve: (1) whether respondent court erred in denying petitioners'
motion for reconsideration and/or the Motion for New Trial; (2) whether private respondents are co-
owners who are legally entitled to redeem the lot under Article 1623 of the Civil Code;11 and (3)
whether the award of moral damages, attorney's fees and costs of suit is correct.

The pivotal issue is whether private respondents may claim the right of redemption under Art. 1623
of the Civil Code. The trial court found that the disputed land was not part of an undivided estate. It
held that the three deeds of absolute sale12 technically described the portion sold to each son. The
portions belonging to the three sons were separately declared for taxation purposes with the
Assessor's Office of Pasay City on September 21, 1970.13 Jose's testimony that the land was
undivided was contradicted by his wife when she said they had been receiving rent from the property
specifically allotted to Jose.14 More significantly, on January 9, 1995, the Registry of Deeds of Pasay
City cancelled TCT 24751 and issued three new titles as follows: (1) TCT 13459415 in favor of Severo
Armada, Jr.; (2) TCT 13459516under the name of Anita Bonode Si, married to Serafin Si; and (3) TCT
13459617 owned by Jose Armada, married to Remedios Almanzor. All these are on record.

However, the Court of Appeals' decision contradicted the trial court's findings.18

In instances when the findings of fact of the Court of Appeals are at variance with those of the trial
court, or when the inference drawn by the Court of Appeals from the facts is manifestly mistaken,
this Court will not hesitate to review the evidence in order to arrive at the correct factual
conclusion.19 This we have done in this case. It is our considered view now, that the trial court is
correct when it found that:
"Rightfully, as early as October 2, 1954, the lot in question had already been partitioned when their
parents executed three (3) deed of sales (sic) in favor of Jose, Crisostomo and Severo, all surnamed
Armada (Exh. 1, 2, & 3), which documents purports to have been registered with the Register of
Deeds of Pasay City, on September 18, 1970, and as a consequence TCT No. 16007 (Exh. A) was
issued. Notably, every portion conveyed and transferred to the three sons was definitely described
and segregated and with the corresponding technical description (sic). In short, this is what we call
extrajudicial partition. Moreover, every portion belonging to the three sons has been declared for
taxation purposes with the Assessor's Office of Pasay City on September 21, 1970. These are the
unblinkable facts that the portion sold to defendant spouses Si by defendants Crisostomo Armada
and Cresenciana Armada was concretely determined and identifiable. The fact that the three
portions are embraced in one certificate of title does not make said portions less determinable or
identifiable or distinguishable, one from the other, nor that dominion over each portion less
exclusive, in their respective owners. Hence, no right of redemption among co-owners
exists."20(citation omitted)

". . . [T]he herein plaintiffs cannot deny the fact that they did not have knowledge about the
impending sale of this portion. The truth of the matter is that they were properly notified. Reacting to
such knowledge and notification they wrote defendant Dr. Crisostomo Armada on February 22,
1979, a portion of said letter is revealing: 'Well you are the king of yourselves, and you can sell your
share of Levereza."21 (emphasis omitted)

After the physical division of the lot among the brothers, the community ownership terminated, and
the right of preemption or redemption for each brother was no longer available.22

Under Art. 484 of the Civil Code,23 there is co-ownership whenever the ownership of an undivided
thing or right belongs to different persons. There is no co-ownership when the different portions
owned by different people are already concretely determined and separately identifiable, even if not
yet technically described.24 This situation makes inapplicable the provision on the right of redemption
of a co-owner in the Civil Code, as follows:

"Art. 1623. The right of legal pre-emption or redemption shall not be exercised except within thirty
days from the notice in writing by the prospective vendor, or by the vendor, as the case may be. The
deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of
the vendor that he has given written notice thereof to all possible redemptioners.

The right of redemption of co-owners excludes that of adjoining owners."

Moreover, we note that private respondent Jose Armada was well informed of the impending sale of
Crisostomo's share in the land. In a letter dated February 22, 1979, Jose told his brother Crisostomo:
"Well you are the king of yourselves, and you can sell your share of Leveriza."25 Co-owners with
actual notice of the sale are not entitled to written notice. A written notice is a formal requisite to
make certain that the co-owners have actual notice of the sale to enable them to exercise their right
of redemption within the limited period of thirty days. But where the co-owners had actual notice of
the sale at the time thereof and/or afterwards, a written notice of a fact already known to them, would
be superfluous. The statute does not demand what is unnecessary.26

Considering that respondent Court of Appeals erred in holding that herein private respondent could
redeem the lot bought by petitioners, the issue of whether the appellate court erred in denying
petitioners' motions for reconsideration and new trial need not be delved into. The same is true with
1âwphi1

respect to the questioned award of damages and attorney's fees. Petitioners filed their complaint in
good faith and as repeatedly held, we cannot put a premium on the right to litigate.
WHEREFORE, the petition is GRANTED, the Decision of the Court of Appeals dated March 25,
1994 and its Resolutions dated March 24, 1995 and September 6, 1995 in CA-G.R. CV No. 30727
are ANNULLED and SET ASIDE. Civil Case No. 8023-P is DISMISSED for lack of merit. The
decision of the Regional Trial Court of Pasay City, Branch 113, promulgated on August 29, 1989,
is REINSTATED.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 51655 November 29, 1989

VICENTE DEL ROSARIO, petitioner,

vs.
SPOUSES JULIO BANSIL and JOSEFINA TAMAYO and ALEJANDRA SANCHEZ, respondents.

PARAS, J.:

This case, filed with the Court of Appeals but forwarded to this Court for disposition since it involves
purely questions of law, is an appeal from the September 5, 1977 decision of the then Court of First
Instance of Pampanga, Branch VI, presided over by Hon. Mariano Castaneda, Jr. dismissing the
complaint of herein appellant.

Herein appellant Vicente del Rosario and appellee Julio Bansil are uncle and nephew, and two (2) of
the heirs of Pelagia Sanchez. On November 28, 1973, the heirs of Pelagia Sanchez executed an
extrajudicial partition, and pursuant to the same, appellant was given Lot No. 2854-A, now registered
in his name and that of his spouse Emiliana Gonzales under Transfer Certificate of Title No. 125739-
R of the Register of Deeds of Pampanga. On the other hand, appellee Julio Bansil received as his
share an adjacent lot, Lot No. 2654-B, which was registered in his name and that of his spouse
Josefina Tamayo under Transfer Certificate of Title No. 125740-R of the Register of Deeds of
Pampanga. On May 10, 1976, the said share of appellee Julio Bansil was sold to herein other
appellee, Alejandra Sanchez, for P1,500.00 without first being offered to appellant Vicente del
Rosario as an adjoining owner. Said appellant, claiming the right of preemption, on May 27, 1976,
filed with the then Court of First Instance of Pampanga, Branch VI, a complaint, praying for the
annulment of the sale and for the reconveyance of the said lot in his favor (Record on Appeal, pp. 4-
10). On June 11, 1976, he deposited with the Clerk of Court the sum of P1,500.00 so that his right of
preemption can be upheld (Record on, pp. 11-12).

On July 13, 1976, the appellees filed their Answer with Counterclaim (Record on Appeal, pp. 12-16)
controverting the material allegations of the complaint and by way of special and affirmative
defenses alleged that the complaint states no valid cause of action as there is no law that grant such
pre-emptive rights to adjoining owners with respect to the sale of adjoining properties. Appellees
explained that despite the absence of legal obligation on their part, out of respect to appellant who is
their uncle, they did actually offer to sell said property to appellant and to other relatives who jointly
own another adjoining property of about 86 square meters, prior to its sale to Alejandra Sanchez, but
they refused to buy the same because of financial incapacity. On the other hand, appellant's claim
that he sincerely wanted to buy the said property is belied by the fact that appellant, thru his wife
Emiliana Gonzales, had consistently offered and appealed to appellee Alejandra Sanchez, before
and after the latter bought the property, to likewise buy appellant's lot of about 86 square meters.
The only reason why appellee Alejandra Sanchez failed to buy the properties offered was due to
disagreement over the price. Said failure to sell was surmised to have brought great disenchantment
and ill will to appellant which eventually caused the filing of the instant complaint. At any rate, as
additional proof appellees alleged that a signboard "House and Lot for Sale" was posted in
appellant's premises for several months prior to the filing of the complaint, to which several
prospective buyers responded. Appellees argued further that under appellant's own unfounded
theory that adjoining property owners have legal pre-emptive rights in the sale of adjoining
properties, Alejandra Sanchez must certainly have as much right and should be preferred, being an
adjoining property owner herself of about 300 square meters, as compared to only about 86 square
meters of the adjoining property belonging to appellant. (Record on Appeal, p. 32).

On July 28, 1976, appellant filed his Reply with Answer to Counterclaim (Record on Appeal, pp. 17-
21), to which appellees filed their Rejoinder on September 1, 1976 (Record on Appeal, pp. 21-24).

On October 20, 1976, the parties filed a Joint Petition for Judgment on the Pleadings (Record on
Appeal, p. 25) on the ground that the principal issue involved therein being a question of law, that is,
the application or non-application of either or both Articles 1622 and 1623 of the New Civil Code.
The same, however, was denied by the trial court in an order dated November 15, 1976 (Record on
Appeal, p. 26).

After the hearing on March 28, 1977, wherein the lawyers of the parties jointly requested the
reconsideration of the order denying the joint motion for judgment on the pleadings, the trial court, in
a decision dated September 5, 1977 (Record on Appeal, pp. 30-36), dismissed the complaint—

IN VIEW OF THE FOREGOING, judgment is rendered dismissing the plaintiffs

complaint dated May 27, 1976 without pronouncement as to cost.

Not satisfied with the decision, appellant filed an appeal with the Court of Appeals, docketed therein
as CA-G.R. No. 63585-R.

After the parties have submitted their respective briefs, appellant on June 5, 1978 (Rollo, p. 1 5) and
appellees on October 19, 1978 (Rollo, p. 23), the case was considered submitted for decision (Rollo,
p. 27); and in a resolution promulgated on September 25, 1979, the Court of Appeals *ordered its
Clerk of Court to forward to this Court the whole record of the case for final determination (Rollo, pp.
28-29).

In the resolution dated October 15, 1979 of the First Division of this Court, this case was ordered
docketed and declared submitted for decision (Rollo, p. 31).

Appellant raised two (2) assignments of error, to wit:

I
THE COURT BELOW ERRED IN APPLYING ART. 1622 OF THE NEW CIVIL CODE INSTEAD OF
ART. 1623 OF THE SAME CODE WHICH IS APPLICABLE IN THE CASE AT BAR.

II

THE COURT BELOW ERRED IN NOT DECLARING TRANSFER CERTIFICATE OF TITLE NO.
130540-5 ISSUED BY THE REGISTER OF DEEDS OF PAMPANGA IN FAVOR OF DEFENDANT
ALEJANDRA SANCHEZ NULL AND VOID AFTER IT WAS SHOWN THAT THE REQUIREMENT
PROVIDED UNDER THE PROVISION OF ART. 1623 OF THE NEW CIVIL CODE WAS NOT
COMPLIED,

The instant petition is devoid of merit.

Stripped of bare essentials, the issue in this case is whether or not petitioner is entitled to the right of
preemption or redemption under Article 1622 of the Civil Code as an adjoining owner or under Article
1623 of the same code as co-owner.

As an adjoining owner, this Court has already ruled that an owner of an urban land has no right of
preemption or redemption over the adjoining portion of his land where he has not alleged in his
complaint and has not proved that said portion is so small and so situated that a major portion
thereof cannot be used for any practical purpose within a reasonable time, having been bought
merely for speculation (De la Cruz v. Cruz, 32 SCRA 308 [1970]).

As correctly found by the trial court, the two requisites as enumerated above do not obtain in the
case at bar as to warrant the exercise of the right of preemption or redemption by the appellant. As
pointed out, the 86 square meters lot in question cannot be considered so small for practical
purposes as a residential house can be constructed thereon in the same manner as the residential
houses built on two equally sized lots situated on both sides of the litigated property, one of which
belongs to petitioner himself. Likewise, true is the fact that the disputed lot had not been bought for
speculation, the same having been inherited by appellee Julio Bansil from his grandmother (Record
on Appeal, pp. 34-35).

Neither can appellant claim the right of preemption or redemption as co-owner after the inherited
property has been subdivided and distributed among co-owners, for then the community has
terminated and there is no reason to sustain any right of preemption or redemption (Caro v. Court of
Appeals, 113 SCRA 17 [1982]; Caram et al. v. Court of Appeals et al., 101 Phil. 315 [1957]).

In the case at bar, not only was the inherited property partitioned but actually subdivided into several
parcels which were assigned by lots to the heirs and Transfer Certificates of Titles have already
been issued in their respective names.

PREMISES CONSIDERED, the instant appeal (petition) is hereby DISMISSED.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
 EN BANC

G.R. No. L-27759 April 17, 1970

CRESENCIANO DE LA CRUZ, plaintiff-appellant,

vs.

JULIO CRUZ, ZENAIDA MONTES and ALFONSO MIRANDA, defendants-appellees.

Segundo C. Mastrille for plaintiff-appellant.

E. A. Bernabe for defendants-appellees.

REYES, J.B.L., J.:

Direct appeal from a summary judgment of the Court of First Instance of Rizal (Pasay City), in its
Civil Case No. 2723-P, dismissing the plaintiff's complaint against the defendants for the pre-emption
and legal redemption of a portion of registered land and granting, in the main, the latter's
counterclaim for damages and attorneys' fees.

The undisputed facts are as follows.

The spouses Julio Cruz and Zenaida Montes were once the owners of a parcel of land covered by
Transfer Certificate of Title No. 10680 of the Office of the Registry of Deeds for Pasay City, which
parcel of land is more particularly described therein as follows:

A PARCEL OF LAND (Lot 10) of the subdivision plan Psd-790, being a portion of the
land described on plan Psu-2031-Amd. 2-A, LRC (G.L.R.O.) Record No. 2484,
situated in the Barrio of Malibay, Municipality of Pasay, Province of Rizal. Bounded
on NE., by Lot 9 of the subdivision plan: containing an area of SIX HUNDRED SIXTY
TWO (662) SQUARE METERS.'" On 16 December 1965, Julio Cruz and Zenaida
Montes sold a portion of the aforesaid parcel of land to the plaintiff-appellant,
Cresenciano de la Cruz. The deed of absolute sale described the portion sold as —

... a portion with an area of Three Hundred and Thirty-One Square Meters (331 sq.
m.) on the northern part ...

Inserted in the deed was a stipulation, reading as follows:

It is hereby agreed that a plan will be made on the whole parcel of land above-
described showing the portion with an area of Three Hundred and Thirty-one Square
Meters (331 sq. m), hereby conveyed, and the remaining portion with an area of
Three Hundred Thirty-One Square Meters (331 sq. m.), together with the technical
description of each portion, that is, the portion hereby conveyed, and the portion
remaining.
On 28 February 1966, Julio Cruz and Zenaida Montes sold the remaining portion of the land to
Alfonso Miranda. The deed of sale described the portion sold as —

... that unsegregated portion with an area of THREE HUNDRED THIRTY ONE (331)
SQUARE METERS bordering C. Jose and F. Francisco Streets, Malibay, Pasay City,
which is at the southern part of the parcel of land covered by T.C.T. No. 10680
above-described.

Under date of 25 April 1966, Cresenciano de la Cruz, filed a complaint against Julio Cruz, Zenaida
Montes and Alfonso Miranda, praying the court to have himself (plaintiff-appellant Cresenciano de la
Cruz) declared as entitled to purchase, by way of pre-emption and legal redemption, the one-half (½)
portion of the land that was sold to Miranda.

Upon joinder of issues, the parties agreed, during the pre-trial of the case, to submit the case for
decision on the pleadings, and, on the basis thereof, the court below rendered judgment, as stated
at the beginning of this decision.

Not satisfied with the court's decision, plaintiff-appellant Cresenciano de la Cruz interposed the
present direct appeal to the Supreme Court and assigns the following errors as having been
committed by the lower court;

1. The trial court erred in holding that plaintiff-appellant and defendants-appellees

Julio Cruz and Zenaida Montes are not co-owners of the parcel of land embraced in
Transfer Certificate of Title No. 10680 of the Office of the Register of Deeds for
Pasay City.

2. The trial court erred in concluding that plaintiff is not entitled to the right of pre-
emption or legal redemption.

3. The trial court erred in awarding damages in the amount of P2,000.00 in favor of
defendants-appellees Julio Cruz and Zenaida Montes, and another P2,000.00 in
favor of their co-defendant-appellee Alfonso Miranda.

4. The trial court finally erred in ordering plaintiff-appellant to pay defendants-

appellees the sum of P3,000.00 as attorney's fees.

Appellant's theory, under his first two assignments of error, is that after he bought from the spouses
Julio Cruz and Zenaida Montes the northern half of the parcel of land embraced by Transfer
Certificate of Title No. 10680, he and the spouses became co-owners of the said parcel of land, "the
plaintiff owning one-half (½) (northern part) and defendants Julio Cruz and Zenaida Montes owning
the remaining one-half (1/2) portion (southern part)"; or that, "considering the situation or location of
the parts being owned by plaintiff and defendants Julio Cruz and Zenaida Montes, respectively, ...
the parts are adjacent to each other, and consequently, plaintiff and defendants Julio Cruz and
Zenaida Montes are adjacent owners", such that plaintiff has the right of pre-emption or legal
redemption over the portion that was subsequently sold to Alfonso Miranda (Quoted portions taken
from appellant's brief, pages 3-4).

The foregoing theory is untenable. Tested against the concept of co-ownership, as authoritatively
expressed by the commentators, appellant is not a co-owner of the registered parcel of land, taken
as a unit or subject of co-ownership, since he and the spouses do not "have a spiritual part of a thing
which is not physically divided" (3 Sanchez Roman 162), nor is each of them an "owner of the whole,
and over the whole he exercises the right of dominion, but he is at the same time the owner of a
portion which is truly abstract ..." (3 Manresa 405). The portions of appellant-plaintiff and of the
defendant spouses are concretely determined and identifiable, for to the former belongs the northern
half, and to the latter belongs the remaining southern half, of the land. That their respective portions
are not technically described, or that said portions are still embraced in one and the same certificate
of title, does not make said portions less determinable or identifiable or distinguishable, one from the
other, nor that dominion over each portion less exclusive, in their respective owners. Hence, no right
of redemption among co-owners exists.

Nor is plaintiff-appellant entitled, as an adjoining owner, to the right of pre-emption or redemption

over the southern portion of the parcel of land because he had not alleged in his complaint and has
not proved (since the case was submitted for decision on the pleadings) that said portion is so small
and so situated that a major portion thereof cannot be used for any practical purpose within a
reasonable time, having been bought merely for speculation (Article 1622, Civil Code; Soriente vs.
CA, L-1734), 31 August 1963, 62 O.G. 7013, 8 SCRA 750).

The third assignment of error is concerned with the defendants' counterclaim. The court a
quo awarded damages of P2,000.00 to the spouses Cruz and another P2,000.00 to their co-
defendant Alfonso Miranda because the court considered the allegations on two (2) causes of action
in the counterclaim as not specifically denied by the plaintiff-appellant and, therefore, deemed to
have admitted said allegations. The first cause of action, in brief, alleges that plaintiff had failed to
cause the preparation and subdivision plan that would serve as a basis for the issuance of separate
titles for the northern and southern parts of the land, contrary to their agreement, and for the inaction
and delay on the part of plaintiff had caused damages in the amount of P5,000.00 to the
counterclaimants. The second cause of action, in turn, alleges that the plaintiff had refused to
surrender the certificate of title, despite demands, to the Register of Deeds, for annotation of a
release of mortgage that said plaintiff had himself executed, thus preventing the dealing with the
land, sans the encumbrance, with third persons and prejudicing the counterclaimants in the sum of
P5,000.00. Appellant's argument that the court erred in awarding damages without proof of the
amount of actual damage is well-taken, for even though the rule is that failure to deny specifically the
material allegations in the complaint (or counterclaim) is deemed an admission of the said
allegations, an exception is provided therefor, which is "other than those as to the amount of
damage" (Section 1, Rule 9, Revised Rules of Court).

... Under Section 8, Rule 9 [Sec. 1, Rule 9 of the Revised Rules of Court], however,
allegations regarding the amount of damages are not deemed admitted even if not
specifically denied, and so must be duly proved. Appellants did not offer to present
evidence to prove their damages but merely asked for judgment on the pleadings.
Hence, they must be considered to have waived or renounced their claim for
damages ... (Rili, et al. vs. Chunaco, et al., L-6630, 29 February 1956, 98 Phil. 505,
507).

On his last assignment of error, appellant contests the award of attorney's fees on the ground that
such fees do not accrue merely because of an adverse decision. On the other hand, he does not
claim that the court below had abused its discretion in giving the award, which is a matter that is
discretionary with it under Article 2208, Civil Code of the Philippines, specially since the action was
clearly unfounded (Heirs of Justiva, et al. vs. Gustilo, et al., L-16396, 31 January 1963, 7 SCRA 72;
Lopez, et al. vs. Gonzaga, et al.,
L-18788, 31 January 1964, 10 SCRA 167).

FOR THE FOREGOING REASONS, the appealed decision is hereby affirmed, except insofar as it
awarded damages to the appellees, which is hereby reversed. No pronouncement as to costs.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 124262 October 12, 1999

TOMAS CLAUDIO MEMORIAL COLLEGE, INC., petitioner,

vs.
COURT OF APPEALS, HON. ALEJANDRO S. MARQUEZ, CRISANTA DE CASTRO, ELPIDIA DE
CASTRO, EFRINA DE CASTRO, IRENEO DE CASTRO and ARTEMIO DE CASTRO
ADRIANO, respondents.

QUISUMBING, J.:

This special civil action for certiorari seeks to set aside the Decision of the Court Appeals dated
August 14, 1995, in CA-G.R. SP No. 36349, and its Resolution dated March 15, 1996, which denied
petitioner's motion for reconsideration.
1âwphi1.nêt

On December 13, 1993, private respondents filed an action for Partition before the Regional Trial
Court of Morong, Rizal. They alleged that their predecessor-in-interest, Juan De Castro, died
intestate in 1993 and they are his only surviving and legitimate heirs. They also alleged that their
father owned a parcel of land designated as Lot No. 3010 located at Barrio San Juan, Morong, Rizal,
with an area of two thousand two hundred sixty nine (2,269) square meters more or less. They
further claim that in 1979, without their knowledge and consent, said lot was sold by their brother
Mariano to petitioner. The sale was made possible when Mariano represented himself as the sole
heir to the property. It is the contention of private respondents that the sale made by Mariano
affected only his undivided share to the lot in question but not the shares of the other co-owners
equivalent to four fifths (4/5) of the property.

Petitioner filed a motion to dismiss contending, as its special defense, lack of jurisdiction and
prescription and/or laches. The trial court, after hearing the motion, dismissed the complaint in an
Order dated August 18, 1984. On motion for reconsideration, the trial court, in an Order dated
October 4, 1994, reconsidered the dismissal of the complaint and set aside its previous order.
Petitioner filed its own motion for reconsideration but it was denied in an Order dated January 5,
1995.

Aggrieved, petitioner filed with the Court of Appeals a special civil action for certiorari anchored on
the following grounds: a) the RTC has no jurisdiction to try and take cognizance of the case as the
causes of actions have been decided with finality by the Supreme Court, and b) the RTC acted with
grave abuse of discretion and authority in taking cognizance of the case.

After the parties filed their respective pleadings, the Court of Appeals, finding no grave abuse of
discretion committed by the lower court, dismissed the petition in a Decision dated August 14, 1995.
Petitioner filed a timely motion for reconsideration but it was denied in a Resolution dated March 15,
1996. Hence this petition.
Petitioner submits the following grounds to support the granting of the writ of certiorari in the present
case:

FIRST GROUND

THE HON. COURT OF APPEALS AND THE REGIONAL TRIAL COURT (BR. 79)
HAD NO JURISDICTION TO TRY SUBJECT CASE (SP. PROC. NO. 118-M). THE
"CAUSES OF ACTION" HEREIN HAVE BEEN FINALLY DECIDED BY THE HON.
COURT OF FIRST INSTANCE OF RIZAL (BR. 31) MAKATI, METRO MANILA, AND
SUSTAINED IN A FINAL DECISION BY THE HON. SUPREME COURT.

SECOND GROUND

THE HON. COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND

AUTHORITY WHEN IT SUSTAINED THE ORDERS OF THE HON. REGIONAL
TRIAL COURT (BR. 79) DATED OCTOBER 4, 1994, AND THE ORDER DATED
JANUARY 5, 1995, WHEN SAID RTC (BR. 79) INSISTED IN TRYING THIS CASE
AGAINST TCMC WHEN IT HAS RULED ALREADY IN A FINAL ORDER THAT
PETITIONER IS NOT A "REAL PARTY" IN INTEREST BY THE HON. REGIONAL
TRIAL COURT (BR. 79) IN CIVIL CASE NO. 170, ENTITLED ELPIDIA A. DE
CASTRO, ET. AL. vs. TOMAS CLAUDIO MEMORIAL COLLEGE, ET . AL., WHICH
CASE INVOLVED THE SAME RELIEF, SAME SUBJECT MATTER AND THE SAME
PARTIES.

THIRD GROUND

THE HON. COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND

AUTHORITY WHEN IT CAPRICIOUSLY AND WHIMSICALLY DISREGARDED THE
EXISTENCE OF RES JUDICATA IN THIS CASE.

The pivotal issues to be resolved in this case are: whether or not the Regional Trial Court and/or the
Court of Appeals had jurisdiction over the case, and if so, whether or not the Court of Appeals
committed grave abuse of discretion in affirming the decision of the Regional Trial Court.

In assailing the Orders of the appellate court, petitioner invokes Rule 65 of the Rules of Court as its
mode in obtaining a reversal of the assailed Decision and Resolution. Before we dwell on the merits
of this petition, it is worth noting, that for a petition for certiorari to be granted, it must be shown that
the respondent court committed grave abuse of discretion equivalent to lack or excess of jurisdiction
and not mere errors of judgment, for certiorari is not a remedy for errors of judgment, which are
correctible by appeal. 1 By grave abuse of discretion is meant such capricious and whimsical
exercise of judgment as is equivalent to lack of jurisdiction, and mere abuse of discretion is not
enough — it must be grave. 2

In the case at hand, there is no showing of grave abuse of discretion committed by the public
respondent. As correctly pointed out by the trial court, when it took cognizance of the action for
partition filed by the private respondents, it acquired jurisdiction over the subject matter of the
case. 3Jurisdiction over the subject matter of a case is conferred by law and is determined by the
allegations of the complaint irrespective of whether the plaintiff is entitled to all or some of the claims
asserted therein. 4 Acquiring jurisdiction over the subject matter of a case does not necessarily mean
that the lower court meant to reverse the decision of the Supreme Court in the land registration case
mentioned by the petitioner.
Moreover, settled is the rule that the jurisdiction of the court over the subject matter is determined by
the allegations of the complaint, hence the court's jurisdiction cannot be made to depend upon
defenses set up in the answer or in a motion to dismiss. 5 This has to be so, for were the principle
otherwise, the ends of justice would be frustrated by making the sufficiency of this kind of action
dependent upon the defendant in all cases.

Worth stressing, as long as a court acts within its jurisdiction any alleged errors committed in the
exercise thereof will amount to nothing more than errors of judgment which are revisable by timely
appeal and not by a special civil action of certiorari. 6 Based on the foregoing, even assuming for the
sake of argument that the appellate court erred in affirming the decision of the trial court, which
earlier denied petitioner's motion to dismiss, such actuation on the part of the appellate court cannot
be considered as grave abuse of discretion, hence not correctible by certiorari, because certiorari is
not available to correct errors of procedure or mistakes in the judge's findings and conclusions.

In addition, it is now too late for petitioner to question the jurisdiction of the Court of Appeals. It was
petitioner who elevated the instant controversy to the Court of Appeals via a petition for certiorari. In
effect, petitioner submitted itself to the jurisdiction of the Court of Appeals by seeking affirmative
relief therefrom. If a party invokes the jurisdiction of a court, he cannot thereafter challenge that
court's jurisdiction in the same case. 7 To do otherwise would amount to speculating on the fortune of
litigation, which is against the policy of the Court.

On the issue of prescription, we have ruled that even if a co-owner sells the whole property as his,
the sale will affect only his own share but not those of the other co-owners who did not consent to
the sale. 8 Under Article 493 of the Civil Code, the sale or other disposition affects only the seller's
share pro indiviso, and the transferee gets only what corresponds to his grantor's share in the
partition of the property owned in common. Since a co-owner is entitled to sell his undivided share, a
sale of the entire property by one co-owner without the consent of the other co-owners is not null
and void. However, only the rights of the co-owner/seller are transferred, thereby making the buyer a
co-owner of the property. The proper action in a case like this, is not for the nullification of the sale,
or for the recovery of possession of the property owned in common from the third person, but for
division or partition of the entire property if it continued to remain in the possession of the co-owners
who possessed and administered it. 9 Such partition should result in segregating the portion
belonging to the seller and its delivery to the buyer.1âw phi1.nêt

In the light of the foregoing, petitioner's defense of prescription against an action for partition is a
vain proposition. Pursuant to Article 494 of the Civil Code, "no co-owner shall be obliged to remain in
the co-ownership. Such co-owner may demand at anytime the partition of the thing owned in
common, insofar as his share is concerned." In Budlong vs. Bondoc, 10 this Court has interpreted
said provision of law to mean that the action for partition is imprescriptible. It cannot be barred by
prescription. For Article 494 of the Civil Code explicitly declares: "No prescription shall lie in favor of
a co-owner or co-heirs as long as he expressly or impliedly recognizes the co-ownership."

WHEREFORE, the instant petition is DENIED. The assailed decision of the Court of Appeals is
hereby AFFIRMED. Costs against petitioners.

SO ORDERED
 FIRST DIVISION

G.R. No. 125233 March 9, 2000

Spouses ALEXANDER CRUZ and ADELAIDA CRUZ,petitioners,

vs.
ELEUTERIO LEIS, RAYMUNDO LEIS, ANASTACIO L. LAGDANO, LORETA L. CAYONDA and
the HONORABLE COURT OF APPEALS, respondents.

KAPUNAN, J.:

Private respondents, the heirs of spouses Adriano Leis and Gertrudes Isidro,1 filed an action before
the Regional Trial Court (RTC) of Pasig seeking the nullification of the contracts of sale over a lot
executed by Gertrudes Isidro in favor of petitioner Alexander Cruz, as well as the title subsequently
issued in the name of the latter. Private respondents claimed that the contracts were vitiated by
fraud as Gertrudes was illiterate and already 80 years old at the time of the execution of the
contracts; that the price for the land was insufficient as it was sold only for P39,083.00 when the fair
market value of the lot should be P1,000.00 per square meter, instead of P390.00, more or less; and
that the property subject of the sale was conjugal and, consequently, its sale without the knowledge
and consent of private respondents was in derogation of their rights as heirs.

The facts that gave rise to the complaint:

Adriano and Gertrudes were married on 19 April 1923. On 27 April 1955, Gertrudes acquired from
the then Department of Agriculture and Natural Resources (DANR) a parcel of land with an area of
one hundred (100) square meters, situated at Bo. Sto. Niño, Marikina, Rizal and covered by Transfer
Certificate of Title (TCT) No. 42245. The Deed of Sale described Gertrudes as a widow. On 2 March
1956, TCT No. 43100 was issued in the name of "Gertrudes Isidro," who was also referred to therein
as a "widow."

On 2 December 1973, Adriano died. It does not appear that he executed a will before his death.

On 5 February 1985, Gertrudes obtained a loan from petitioners, the spouses Alexander and
Adelaida Cruz, in the amount of P15,000.00 at 5% interest, payable on or before 5 February 1986.
The loan was secured by a mortgage over the property covered by TCT No. 43100. Gertrudes,
however, failed to pay the loan on the due date.

Unable to pay her outstanding obligation after the debt became due and payable, on 11 March 1986,
Gertrudes executed two contracts in favor of petitioner Alexander Cruz. The first is denominated as
"Kasunduan" which the parties concede is a pacto de retro sale, granting Gertrudes one year within
which to repurchase the property. The second is a "Kasunduan ng Tuwirang Bilihan," a Deed of
Absolute Sale covering the same property for the price of P39,083.00, the same amount stipulated in
the "Kasunduan."
For failure of Gertrudes to repurchase the property, ownership thereof was consolidated in the name
of Alexander Cruz in whose name TCT No. 130584 was issued on 21 April 1987, canceling TCT No.
43100 in the name of Gertrudes Isidro.

On 9 June 1987, Gertrudes Isidro died. Thereafter, her heirs, herein private respondents, received
demands to vacate the premises from petitioners, the new owners of the property. Private
respondents responded by filing a complaint as mentioned at the outset.

On the basis of the foregoing facts, the RTC rendered a decision in favor of private respondents.
The RTC held that the land was conjugal property since the evidence presented by private
respondents disclosed that the same was acquired during the marriage of the spouses and that
Adriano contributed money for the purchase of the property. Thus, the court concluded, Gertrudes
could only sell to petitioner spouses her one-half share in the property.

The trial court also ruled that no fraud attended the execution of the contracts. Nevertheless, the
"Kasunduan," providing for a sale con pacto de retro, had superseded the "Kasunduan ng Tuwirang
Bilihan" the deed of absolute sale. The trial court did not consider the pacto de retro sale an
equitable mortgage, despite the allegedly insufficient price. Nonetheless, the trial court found for
private respondents. It rationalized that petitioners failed to comply with the provisions of Article 1607
of the Civil Code requiring a judicial order for the consolidation of the ownership in the vendee a
retro to be recorded in the Registry of Property.

The dispositive portion of the RTC's Decision reads:

WHEREFORE, in the light of all the foregoing, judgment is hereby rendered:

1. Declaring Exhibit G — "Kasunduan ng Tuwirang Bilihan" Null and Void and

declar[ing] that the title issued pursuant thereto is likewise Null and Void;

2. Declaring the property in litigation as conjugal property;

3. Ordering the Registry of Deeds of Marikina Branch to reinstate the title of

Gertrudes Isidro;

4. Ordering the plaintiff[s] [sic] to comply with the provision[s] of Article 1607 in
relation to Article 1616 of the Civil Code;

5. Ordering the defendant[s] to pay plaintiff[s] P15,000.00 nominal damages for the
violation of plaintiffs' rights;

6. Ordering the defendant[s] to pay plaintiff[s] the sum of P8,000.00 as and for
attorney's fees;

7. Dismissing defendant[s'] counterclaim; and

8. Ordering defendant[s] to pay the cost of suit.

SO ORDERED.2

Petitioners appealed to the Court of Appeals in vain. The Court of Appeals affirmed the decision of
the Regional Trial Court, holding that since the property was acquired during the marriage of
Gertrudes to Adriano, the same was presumed to be conjugal property under Article 160 of the Civil
Code. The appellate court, like the trial court, also noted that petitioner did not comply with the
provisions of Article 1607 of the Civil Code.

Petitioners are now before this Court seeking the reversal of the decision of the Court of Appeals.
First, they contend that the subject property is not conjugal but is owned exclusively by Gertrudes,
who was described in the Deed of Sale between Gertrudes and the DANR as well as in TCT No.
43100 as a widow. Second, assuming the land was conjugal property, petitioners argue that the
same became Gertrudes' exclusively when, in 1979, she mortgaged the property to the Daily
Savings Bank and Loan Association. The bank later foreclosed on the mortgage in 1981 but
Gertrudes redeemed the same in 1983.

The paraphernal or conjugal nature of the property is not determinative of the ownership of the
disputed property. If the property was paraphernal as contended by petitioners, Gertrudes Isidro
would have the absolute right to dispose of the same, and absolute title and ownership was vested
in petitioners upon the failure of Gertrudes to redeem the property. On the other hand, if the property
was conjugal as private respondents maintain, upon the death of Adriano Leis, the conjugal
partnership was terminate,3 entitling Gertrudes to one-half of the property.4 Adriano's rights to the
other half, in turn, were transmitted upon his death to his heirs,5 which includes his widow Gertrudes,
who is entitled to the same share as that of each of the legitimate children.6Thus, as a result of the
death of Adriano, a regime of co-ownership arose between Gertrudes and the other heirs in relation
to the property.

Incidentally, there is no merit in petitioners' contention that Gertrudes' redemption of the property
from the Daily Savings Bank vested in ownership over the same to the exclusion of her co-owners.
We dismissed the same argument by one of the petitioners in Paulmitan vs. Court of Appeals,7 where
one of the petitioners therein claimed ownership of the entire property subject of the case by virtue of
her redemption thereof after the same was forfeited in favor of the provincial government for non-
payment of taxes. We held however, that the redemption of the land "did not terminate the co-
ownership nor give her title to the entire land subject of the co-ownership." We expounded, quoting
our pronouncement in Adille vs. Court of Appeals:8

The petition raises a purely legal issue: May a co-owner acquire exclusive ownership over
the property held in common?

Essentially, it is the petitioner's contention that the property subject of dispute devolved upon
him upon the failure of his co-heirs to join him in its redemption within the period required by
law. He relies on the provisions of Article 1515 of the old Civil Code, Article 1613 of the
present Code, giving the vendee a retro the right to demand redemption of the entire
property.

There is no merit in this petition.

The right of repurchase may be exercised by a co-owner with respect to his share alone
(CIVL CODE, art. 1612; CIVIL CODE (1889), art. 1514.). While the records show that
petitioner redeemed the property in its entirety, shouldering the expenses therefor, that did
not make him the owner of all of it. In other words, it did not put to end the existing state of
co-ownership (Supra, Art. 489). There is no doubt that redemption of property entails a
necessary expense. Under the Civil Code:

Art. 488. Each co-owner shall have a right to compel the other co-owners to contribute to the
expenses of preservation of the thing or right owned in common and to the taxes. Any one of
 the latter may exempt himself from this obligation by renouncing so much of his undivided
interest as may be equivalent to his share of the expenses and taxes. No such waiver shall
be made if it is prejudicial to the co-ownership.

The result is that the property remains to be in a condition of co-ownership. While a vendee a
retro, under Article 1613 of the Code, "may not be compelled to consent to a partial
redemption," the redemption by one co-heir or co-owner of the property in its totality does not
vest in him ownership over it. Failure on the part of all the co-owners to redeem it entitles the
vendee a retro to retain the property and consolidate title thereto in his name (Supra, art.
1607). But the provision does not give to the redeeming co-owner the right to the entire
property. It does not provide for a mode of terminating a co-ownership.

It is conceded that, as a rule, a co-owner such as Gertrudes could only dispose of her share in the
property owned in common. Article 493 of the Civil Code provides:

Art. 493. Each co-owner shall have the full ownership of his part of the fruits and benefits
pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are involved. But the effect of
the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion
which may be allotted to him in the division upon the termination of the co-ownership.

Unfortunately for private respondents, however, the property was registered in TCT No. 43100 solely
in the name of "Gertrudes Isidro, widow." Where a parcel of land, forming past of the undistributed
properties of the dissolved conjugal partnership of gains, is sold by a widow to a purchaser who
merely relied on the face of the certificate of title thereto, issued solely in the name of the widow, the
purchaser acquires a valid title to the land even as against the heirs of the deceased spouse. The
rationale for this rule is that "a person dealing with registered land is not required to go behind the
register to determine the condition of the property. He is only charged with notice of the burdens on
the property which are noted on the face of the register or the certificate of title. To require him to do
more is to defeat one of the primary objects of the Torrens system."9

As gleaned from the foregoing discussion, despite the Court of Appeals' finding and conclusion that
Gertrudes as well as private respondents failed to repurchase the property within the period
stipulated and has lost all their rights to it, it still ruled against petitioners by affirming the Regional
Trial Court's decision on the premise that there was no compliance with Article 1607 of the Civil
Code requiring a judicial hearing before registration of the property in the name of petitioners. This
provision states:

Art. 1607. In case of real property, the consolidation of ownership in the vendee by virtue of
the failure of the vendor to comply with the provisions of article 1616 shall not be recorded in
the Registry of Property without a judicial order, after the vendor has been duly heard.

The aforequoted article is intended to minimize the evils which the pacto de retro sale has caused in
the hands of usurers. A judicial order is necessary in order to determine the true nature of the
1âwphi1

transaction and to prevent the interposition of buyers in good faith while the determination is being
made. 10

It bears stressing that notwithstanding Article 1607, the recording in the Registry of Property of the
consolidation of ownership of the vendee is not a condition sine qua non to the transfer of
ownership. Petitioners are the owners of the subject property since neither Gertrudes nor her co-
owners redeemed the same within the one-year period stipulated in the "Kasunduan." The essence
of a pacto de retro sale is that title and ownership of the property sold are immediately vested in the
vendee a retro, subject to the resolutory condition of repurchase by the vendor a retro within the
stipulated period. Failure thus of the vendor a retro to perform said resolutory condition vests upon
the vendee by operation of law absolute title and ownership over the property sold. As title is already
vested in the vendee a retro, his failure to consolidate his title under Article 1607 of the Civil Code
does not impair such title or ownership for the method prescribed thereunder is merely for the
purpose of registering the consolidated title. 11

WHEREFORE, the decision of the Court of Appeals is MODIFIED in that the petitioners are deemed
owners of the property by reason of the failure of the vendor, Gertrudes Isidro, to repurchase the
same within the period stipulated. However, Transfer Certificate of Title No. 130584, in the name of
Alexander M. Cruz, which was issued without judicial order, is hereby ordered CANCELLED, and
Transfer Certificate of Title No. 43100 in the name of Gertrudes Isidro is ordered REINSTATED,
without prejudice to compliance by petitioners with the provisions of Article 1607 of the Civil Code. 1âwphi1.nêt

SO ORDERED.

SECOND DIVISION

G.R. No. 134329 January 19, 2000

VERONA PADA-KILARIO and RICARDO KILARIO, petitioners,

vs.
COURT OF APPEALS and SILVERIO PADA, respondents.

DE LEON, JR., J.:

The victory1 of petitioner spouses Ricardo and Verona Kilario in the Municipal Circuit Trial Court2 in an
ejectment suit3 filed against them by private respondent Silverio Pada, was foiled by its reversal4 by
the Regional Trial Court5 on appeal. They elevated their cause6 to respondent Court of
Appeals7 which, however, promulgated a Decision8 on May 20, 1998, affirming the Decision of the
Regional Trial Court.

The following facts are undisputed:

One Jacinto Pada had six (6) children, namely, Marciano, Ananias, Amador, Higino, Valentina and
Ruperta. He died intestate. His estate included a parcel of land of residential and coconut land
located at Poblacion, Matalom, Leyte, denominated as Cadastral Lot No. 5581 with an area of
1,301.92 square meters. It is the northern portion of Cadastral Lot No. 5581 which is the subject of
the instant controversy.

During the lifetime of Jacinto Pada, his half-brother, Feliciano Pada, obtained permission from him to
build a house on the northern portion of Cadastral Lot No. 5581. When Feliciano died, his son,
Pastor, continued living in the house together with his eight children. Petitioner Verona Pada-Kilario,
one of Pastor's children, has been living in that house since 1960.

Sometime in May, 1951, the heirs of Jacinto Pada entered into an extra-judicial partition of his
estate. For this purpose, they executed a private document which they, however, never registered in
the Office of the Registrar of Deeds of Leyte.

At the execution of the extra-judicial partition, Ananias was himself present while his other brothers
were represented by their children. Their sisters, Valentina and Ruperta, both died without any issue.
Marciano was represented by his daughter, Maria; Amador was represented by his daughter,
Concordia; and Higina was represented by his son, Silverio who is the private respondent in this
case. It was to both Ananias and Marciano, represented by his daughter, Maria, that Cadastral Lot
No. 5581 was allocated during the said partition. When Ananias died, his daughter, Juanita,
succeeded to his right as co-owner of said property.

On June 14, 1978, Juanita Pada sold to Engr. Ernesto Paderes, the right of his father, Ananias, as
co-owner of Cadastral Lot No. 5881.

On November 17, 1993, it was the turn of Maria Pada to sell the co-ownership right of his father,
Marciano. Private respondent, who is the first cousin of Maria, was the buyer.

Thereafter, private respondent demanded that petitioner spouses vacate the northern portion of
Cadastral Lot No. 5581 so his family can utilize the said area. They went through a series of
meetings with the barangay officials concerned for the purpose of amicable settlement, but all
earnest efforts toward that end, failed.

On June 26, 1995, private respondent filed in the Municipal Circuit Trial Court of Matalom, Leyte, a
complaint for ejectment with prayer for damages against petitioner spouses.

On July 24, 1995, the heirs of Amador Pada, namely, Esperanza Pada-Pavo, Concordia Pada-
Bartolome, and Angelito Pada, executed a Deed of Donation9 transferring to petitioner Verona Pada-
Kilario, their respective shares as co-owners of Cadastral Lot No. 5581.

On February 12, 1996, petitioner spouses filed their Answer averring that the northern portion of
Cadastral Lot No. 5581 had already been donated to them by the heirs of Amador Pada. They
contended that the extra-judicial partition of the estate of Jacinto Pada executed in 1951 was invalid
and ineffectual since no special power of attorney was executed by either Marciano, Amador or
Higino in favor of their respective children who represented them in the extra-judicial partition.
Moreover, it was effectuated only through a private document that was never registered in the office
of the Registrar of Deeds of Leyte.

The Municipal Circuit Trial Court rendered judgment in favor of petitioner spouses. It made the
following findings:

After a careful study of the evidence submitted by both parties, the court finds that the
evidence adduced by plaintiff failed to establish his ownership over . . . Cadastral Lot No.
5581 . . . while defendants has [sic] successfully proved by preponderance of evidence that
said property is still under a community of ownership among the heirs of the late Jacinto
Pada who died intestate. If there was some truth that Marciano Pada and Ananias Pada has
[sic] been adjudicated jointly of [sic] the above-described residential property . . . as their
share of the inheritance on the basis of the alleged extra judicial settlement, how come that
since 1951, the date of partition, the share of the late Marciano Pada was not transferred in
 the name of his heirs, one of them Maria Pada-Pavo and still remain [sic] in the name of
Jacinto Pada up to the present while the part pertaining to the share of Ananias Pada was
easily transferred in the name of his heirs . . ..

The alleged extra judicial settlement was made in private writing and the genuineness and
due execution of said document was assailed as doubtful and it appears that most of the
heirs were not participants and signatories of said settlement, and there was lack of special
power of attorney to [sic] those who claimed to have represented their co-heirs in the
participation [sic] and signing of the said extra judicial statement.

Defendants were already occupying the northern portion of the above-described property
long before the sale of said property on November 17, 1993 was executed between Maria
Pada-Pavo, as vendor and the plaintiff, as vendee. They are in possession of said portion of
the above-described property since the year 1960 with the consent of some of the heirs of
Jacinto Pada and up to the [sic] present some of the heirs of Jacinto Pada has [sic] donated .
. . their share of [sic] the above-described property to them, virtually converting defendants'
standing as co-owners of the land under controversy. Thus, defendants as co-owners
became the undivided owners of the whole estate . . . . As co-owners of . . . Cadastral Lot
No. 5581 . . . their possession in the northern portion is being [sic] lawful.10

From the foregoing decision, private respondent appealed to the Regional Trial Court. On November
6, 1997, it rendered a judgment of reversal. It held:

. . . [T]he said conveyances executed by Juanita Pada and Maria Pada Pavo were never
questioned or assailed by their co-heirs for more than 40 years, thereby lending credence on
[sic] the fact that the two vendors were indeed legal and lawful owners of properties ceded or
sold. . . . At any rate, granting that the co-heirs of Juanita Pada and Maria Pada Pavo have
some interests on the very lot assigned to Marciano and Ananias, nevertheless, said
interests had long been sadly lost by prescription, if not laches or estoppel.

It is true that an action for partition does not prescribe, as a general rule, but this doctrine of
imprescriptibility cannot be invoked when one of the heirs possessed the property as an
owner and for a period sufficient to acquire it by prescription because from the moment one
of the co-heirs claim [sic] that he is the absolute owner and denies the rest their share of the
community property, the question then involved is no longer one for partition but of
ownership. . . . Since [sic] 1951 up to 1993 covers a period of 42 long years. Clearly,
whatever right some of the co-heirs may have, was long extinguished by laches, estoppel or
prescription.

xxx xxx xxx

. . . [T]he deed of donation executed by the Heirs of Amador Pada, a brother of Marciano
Pada, took place only during the inception of the case or after the lapse of more than 40
years reckoned from the time the extrajudicial partition was made in 1951. Therefore, said
donation is illegal and invalid [sic] the donors, among others, were absolutely bereft of any
right in donating the very property in question.11

The dispositive portion of the decision of the Regional Trial Court reads as follows:

WHEREFORE, a judgment is hereby rendered, reversing the judgment earlier promulgated

by the Municipal Circuit Trial Court of Matalom, Leyte, [sic] consequently, defendants-
appellees are hereby ordered:
 1. To vacate the premises in issue and return peaceful possession to the appellant, being the
lawful possessor in concept of owner;

2. To remove their house at their expense unless appellant exercises the option of acquiring
the same, in which case the pertinent provisions of the New Civil Code has to be applied;

3. Ordering the defendants-appellees to pay monthly rental for their occupancy and use of
the portion of the land in question in the sum of P100.00 commencing on June 26, 1995
when the case was filed and until the termination of the present case;

4. Ordering the defendants to pay to the appellant the sum of P5,000.00 as moral damages
and the further sum of P5,000.00 as attorney's fees;

5. Taxing defendants to pay the costs of suit.12

Petitioners filed in the Court of Appeals a petition for review of the foregoing decision of the Regional
Trial Court.

On May 20, 1998, respondent Court of Appeals rendered judgment dismissing said petition. It
explained:

Well-settled is the rule that in an ejectment suit, the only issue is possession de facto or
physical or material possession and not de jure. Hence, even if the question of ownership is
raised in the pleadings, the court may pass upon such issue but only to determine the
question of possession, specially if the former is inseparably linked with the latter. It cannot
dispose with finality the issue of ownership, such issue being inutile in an ejectment suit
except to throw light on the question of possession . . . .

Private respondent Silverio Pada anchors his claim to the portion of the land possessed by
petitioners on the Deed of Sale executed in his favor by vendor Maria Pada-Pavo, a
daughter of Marciano, son of Jacinto Pada who was the registered owner of the subject lot.
The right of vendee Maria Pada to sell the property was derived from the extra-judicial
partition executed in May 1951 among the heirs of Jacinto Pada, which was written in a
Bisayan dialect signed by the heirs, wherein the subject land was adjudicated to Marciano,
Maria Pavo's father, and Ananias Pada. Although the authenticity and genuineness of the
extra-judicial partition is now being questioned by the heirs of Amador Pada, no action was
ever previously filed in court to question the validity of such partition.
1âwphi1.nêt

Notably, petitioners in their petition admitted among the antecedent facts that Maria Pavo is
one of the co-owners of the property originally owned by Jacinto Pada . . . and that the
disputed lot was adjudicated to Marciano (father of Maria Pavo) and Ananias, and upon the
death of Marciano and Ananias, their heirs took possession of said lot, i.e. Maria Pavo the
vendor for Marciano's share and Juanita for Ananias' share . . . . Moreover, petitioners do not
dispute the findings of the respondent court that during the cadastral survey of Matalom,
Leyte, the share of Maria Pada Pavo was denominated as Lot No. 5581, while the share of
Juanita Pada was denominated as Lot No. 6047, and that both Maria Pada Pavo and Juanita
were in possession of their respective hereditary shares. Further, petitioners in their Answer
admitted that they have been occupying a portion of Lot No. 5581, now in dispute without
paying any rental owing to the liberality of the plaintiff . . . . Petitioners cannot now impugn
the aforestated extrajudicial partition executed by the heirs in 1951. As owner and possessor
of the disputed property, Maria Pada, and her vendee, private respondent, is entitled to
possession. A voluntary division of the estate of the deceased by the heirs among
 themselves is conclusive and confers upon said heirs exclusive ownership of the respective
portions assigned to them . . ..

The equally belated donation of a portion of the property in dispute made by the heirs of
Amador Pada, namely, Concordia, Esperanza and Angelito, in favor of petitioner Verona
Pada is a futile attempt to confer upon the latter the status of co-owner, since the donors had
no interest nor right to transfer. . . . This gesture appears to be a mere afterthought to help
petitioners to prolong their stay in the premises. Furthermore, the respondent court correctly
pointed out that the equitable principle of laches and estoppel come into play due to the
donors' failure to assert their claims and alleged ownership for more than forty (40) years . . .
. Accordingly, private respondent was subrogated to the rights of the vendor over Lot No.
5581 which include [sic] the portion occupied by petitioners.13

Petitioner spouses filed a Motion for Reconsideration of the foregoing decision.

On June 16, 1998, respondent Court of Appeals issued a Resolution denying said motion.

Hence this petition raising the following issues:

I.

WHETHER THE COURT OF APPEALS ERRED IN NOT RULING THAT PETITIONERS, AS

CO-OWNERS, CANNOT BE EJECTED FROM THE PREMISES CONSIDERING THAT THE
HEIRS OF JACINTO PADA DONATED TO THEM THEIR UNDIVIDED INTEREST IN THE
PROPERTY IN DISPUTE.

II.

WHETHER THE COURT OF APPEALS ERRED IN NOT RULING THAT WHAT MARIA
PADA SOLD WAS HER UNDIVIDED SHARE IN THE PROPERTY IN DISPUTE.

III.

WHETHER OR NOT THE PETITIONERS ARE BUILDERS IN GOOD FAITH.14

There is no merit to the instant petition.

First. We hold that the extrajudicial partition of the estate of Jacinto Pada among his heirs made in
1951 is valid, albeit executed in an unregistered private document. No law requires partition among
heirs to be in writing and be registered in order to be valid.15 The requirement in Sec. 1, Rule 74 of
the Revised Rules of Court that a partition be put in a public document and registered, has for its
purpose the protection of creditors and the heirs themselves against tardy claims.16 The object of
registration is to serve as constructive notice to others. It follows then that the intrinsic validity of
partition not executed with the prescribed formalities is not undermined when no creditors are
involved.17 Without creditors to take into consideration, it is competent for the heirs of an estate to
enter into an agreement for distribution thereof in a manner and upon a plan different from those
provided by the rules from which, in the first place, nothing can be inferred that a writing or other
formality is essential for the partition to be valid.18 The partition of inherited property need not be
embodied in a public document so as to be effective as regards the heirs that participated
therein.19 The requirement of Article 1358 of the Civil Code that acts which have for their object the
creation, transmission, modification or extinguishment of real rights over immovable property, must
appear in a public instrument, is only for convenience, non-compliance with which does not affect
the validity or enforceability of the acts of the parties as among themselves.20 And neither does the
Statute of Frauds under Article 1403 of the New Civil Code apply because partition among heirs is
not legally deemed a conveyance of real property, considering that it involves not a transfer of
property from one to the other but rather, a confirmation or ratification of title or right of property that
an heir is renouncing in favor of another heir who accepts and receives the inheritance.21 The 1951
extrajudicial partition of Jacinto Pada's estate being legal and effective as among his heirs, Juanita
and Maria Pada validly transferred their ownership rights over Cadastral Lot No. 5581 to Engr.
Paderes and private respondent, respectively.22

Second. The extrajudicial partition which the heirs of Jacinto Pada executed voluntarily and
spontaneously in 1951 has produced a legal status.23 When they discussed and agreed on the
division of the estate Jacinto Pada, it is presumed that they did so in furtherance of their mutual
interests. As such, their division is conclusive, unless and until it is shown that there were debts
existing against the estate which had not been paid.24 No showing, however, has been made of any
unpaid charges against the estate of Jacinto Pada. Thus, there is no reason why the heirs should
not be bound by their voluntary acts.

The belated act of Concordia, Esperanza and Angelito, who are the heirs of Amador Pada, of
donating the subject property to petitioners after forty four (44) years of never having disputed the
validity of the 1951 extrajudicial partition that allocated the subject property to Marciano and
Ananias, produced no legal effect. In the said partition, what was allocated to Amador Pada was not
the subject property which was a parcel of residential land in Sto. Nino, Matalom, Leyte, but rather,
one-half of a parcel of coconut land in the interior of Sto. Nino St., Sabang, Matalom, Leyte and one-
half of a parcel of rice land in Itum, Sta. Fe, Matalom, Leyte. The donation made by his heirs to
petitioners of the subject property, thus, is void for they were not the owners thereof. At any rate it is
too late in the day for the heirs of Amador Pada to repudiate the legal effects of the 1951
extrajudicial partition as prescription and laches have equally set in.

Third. Petitioners are estopped from impugning the extrajudicial partition executed by the heirs of
Jacinto Pada after explicitly admitting in their Answer that they had been occupying the subject
property since 1960 without ever paying any rental as they only relied on the liberality and tolerance
of the Pada family.25 Their admissions are evidence of a high order and bind them insofar as the
character of their possession of the subject property is concerned.

Considering that petitioners were in possession of the subject property by sheer tolerance of its
owners, they knew that their occupation of the premises may be terminated any time. Persons who
occupy the land of another at the latter's tolerance or permission, without any contract between
them, is necessarily bound by an implied promise that they will vacate the same upon demand,
failing in which a summary action for ejectment is the proper remedy against them.26Thus, they
cannot be considered possessors nor builders in good faith. It is well-settled that both Article
44827 and Article 54628 of the New Civil Code which allow full reimbursement of useful improvements
and retention of the premises until reimbursement is made, apply only to a possessor in good
faith, i.e., one who builds on land with the belief that he is the owner thereof.29 Verily, persons whose
occupation of a realty is by sheer tolerance of its owners are not possessors in good faith. Neither
did the promise of Concordia, Esperanza and Angelito Pada that they were going to donate the
premises to petitioners convert them into builders in good faith for at the time the improvements
were built on the premises, such promise was not yet fulfilled, i.e., it was a mere expectancy of
ownership that may or may not be realized.30 More importantly, even as that promise was fulfilled, the
donation is void for Concordia, Esperanza and Angelito Pada were not the owners of Cadastral Lot
No. 5581. As such, petitioners cannot be said to be entitled to the value of the improvements that
they built on the said lot.
WHEREFORE, the petition for review is HEREBY DENIED.

Costs against petitioners.

SO ORDERED.

SECOND DIVISION

G.R. No. 108228 February 1, 2001

SPOUSES MANUEL and SALVACION DEL CAMPO, petitioners,

vs.
HON. COURT OF APPEALS and HEIRS OF JOSE REGALADO, SR., respondents.

QUISUMBING, J.:

This is a petition for review on certiorari of a decision of the Court of Appeals which affirmed the
judgment of the Regional Trial Court of Roxas City, Branch 15 in Civil Case No. V-5369, ordering the
dismissal of the action for repartition, resurvey and reconveyance filed by petitioners.

Pure questions of law are raised in this appeal as the following factual antecedents are undisputed:

Salome, Consorcia, Alfredo, Maria, Rosalia, Jose, Quirico and Julita, all surnamed Bornales, were
the original co-owners of Lot 162 of the Cadastral Survey of Pontevedra, Capiz under Original
Certificate of Title No. 18047. As appearing therein, the lot, which consisted of a total area of 27,179
square meters was divided in aliquot shares among the eight (8) co-owners as follows:

Salome Bornales 4/16

Consorcia Bornales 4/16
Alfredo Bornales 2/16
Maria Bornales 2/16
Jose Bornales 1/16
Quirico Bornales 1/16
Rosalia Bornales 1/16
Julita Bornales 1/16

On July 14, 1940, Salome sold part of her 4/16 share in Lot 162 for P200.00 to Soledad Daynolo. In
the Deed of Absolute Sale signed by Salome and two other co-owners, Consorcia and Alfredo, the
portion of Lot 162 sold to Soledad was described as having more or less the following
measurements:

63-1/2 meters from point "9" to "10", 35 meters from point "10" to point "11", 30 meters from
point "11" to a certain point parallel to a line drawn from points "9" to "10"; and then from this
"Certain Point" to point "9" and as shown in the accompanying sketch, and made an integral
part of this deed, to SOLEDAD DAYNOLO, her heirs and assigns.1

Thereafter, Soledad Daynolo immediately took possession of the land described above and built a
house thereon. A few years later, Soledad and her husband, Simplicio Distajo, mortgaged the
subject portion of Lot 162 as security for a P400.00 debt to Jose Regalado, Sr. This transaction was
evidenced by a Deed of Mortgage2 dated May 1, 1947.

On April 14, 1948, three of the eight co-owners of Lot 162, specifically, Salome, Consorcia and
Alfredo, sold 24,993 square meters of said lot to Jose Regalado, Sr.

On May 4, 1951, Simplicio Distajo, heir of Soledad Daynolo who had since died, paid the mortgage
debt and redeemed the mortgaged portion of Lot 162 from Jose Regalado, Sr. The latter, in turn,
executed a Deed of Discharge of Mortgage3 in favor of Soledad’s heirs, namely: Simplicio Distajo,
Rafael Distajo and Teresita Distajo-Regalado. On same date, the said heirs sold the redeemed
portion of Lot 162 for P1,500.00 to herein petitioners, the spouses Manuel Del Campo and Salvacion
Quiachon. 1âwphi 1.nêt

Meanwhile, Jose Regalado, Sr. caused the reconstitution of Original Certificate of Title No. 18047.
The reconstituted OCT No. RO-4541 initially reflected the shares of the original co-owners in Lot
162. However, title was transferred later to Jose Regalado, Sr. who subdivided the entire property
into smaller lots, each covered by a respective title in his name. One of these small lots is Lot No.
162-C-6 with an area of 11,732 square meters which was registered on February 24, 1977 under
TCT No. 14566.

In 1987, petitioners Manuel and Salvacion del Campo brought this complaint for "repartition,
resurvey and reconveyance" against the heirs of the now deceased Jose Regalado, Sr. Petitioners
claimed that they owned an area of 1,544 square meters located within Lot 162-C-6 which was
erroneously included in TCT No. 14566 in the name of Regalado. Petitioners alleged that they
occupied the disputed area as residential dwelling ever since they purchased the property from the
Distajos way back in 1951. They also declared the land for taxation purposes and paid the
corresponding taxes.

On April 1, 1987, summons were served on Regalado’s widow, Josefina Buenvenida, and two of her
children, Rosemarie and Antonio. Josefina and Rosemarie were declared in default on May 10, 1989
because only Antonio filed an answer to the complaint.

During trial, petitioners presented the Deed of Absolute Sale4 executed between Soledad Daynolo
and Salome Bornales as well as the Deed of Mortgage5 and Deed of Discharge6 signed by Jose
Regalado, Sr. The Deed of Absolute Sale7 showing the purchase by the Del Campos of the property
from the Distajos was likewise given in evidence.

Despite the filing of an answer, Antonio failed to present any evidence to refute the claim of
petitioners. Thus, after considering Antonio to have waived his opportunity to present evidence, the
trial court deemed the case submitted for decision.
On November 20, 1990, the trial court rendered judgment dismissing the complaint. It held that while
Salome could alienate her pro-indiviso share in Lot 162, she could not validly sell an undivided part
thereof by meters and bounds to Soledad, from whom petitioners derived their title. The trial court
also reasoned that petitioners could not have a better right to the property even if they were in
physical possession of the same and declared the property for taxation purposes, because mere
possession cannot defeat the right of the Regalados who had a Torrens title over the land.

On appeal, the Court of Appeals affirmed the trial court’s judgment, with no pronouncement as to
costs.8

Petitioners now seek relief from this Court and maintain that:

I.

THE FACT THAT THE SALE OF THE SUBJECT PORTION CONSTITUTES A SALE OF A
CONCRETE OR DEFINITE PORTION OF LAND OWNED IN COMMON DOES NOT
ABSOLUTELY DEPRIVE HEREIN PETITIONERS OF ANY RIGHT OR TITLE THERETO;

II.

IN ANY EVENT, HEREIN PRIVATE RESPONDENTS ARE ALL ESTOPPED FROM

DENYING THE RIGHT AND TITLE OF HEREIN PETITIONERS.9

In resolving petitioners’ appeal, we must answer the following questions: Would the sale by a co-
owner of a physical portion of an undivided property held in common be valid? Is respondent
estopped from denying petitioners’ right and title over the disputed area? Under the facts and
circumstances duly established by the evidence, are petitioners entitled to ‘repartition, resurvey and
reconveyance’ of the property in question?

On the first issue, it seems plain to us that the trial court concluded that petitioners could not have
acquired ownership of the subject land which originally formed part of Lot 162, on the ground that
their alleged right springs from a void sale transaction between Salome and Soledad. The mere fact
that Salome purportedly transferred a definite portion of the co-owned lot by metes and bounds to
Soledad, however, does not per se render the sale a nullity. This much is evident under Article
49310 of the Civil Code and pertinent jurisprudence on the matter. More particularly in Lopez vs. Vda.
De Cuaycong, et. al.11 which we find relevant, the Court, speaking through Mr. Justice Bocobo, held
that:

…The fact that the agreement in question purported to sell a concrete portion of the
hacienda does not render the sale void, for it is a well-established principle that the binding
force of a contract must be recognized as far as it is legally possible to do so. "Quando res
non valet ut ago, valeat quantum valere potest." (When a thing is of no force as I do it, it shall
have as much force as it can have.)12

Applying this principle to the instant case, there can be no doubt that the transaction entered into by
Salome and Soledad could be legally recognized in its entirety since the object of the sale did not
even exceed the ideal shares held by the former in the co-ownership. As a matter of fact, the deed of
sale executed between the parties expressly stipulated that the portion of Lot 162 sold to Soledad
would be taken from Salome’s 4/16 undivided interest in said lot, which the latter could validly
transfer in whole or in part even without the consent of the other co-owners. Salome’s right to sell
part of her undivided interest in the co-owned property is absolute in accordance with the well-settled
doctrine that a co-owner has full ownership of his pro-indiviso share and has the right to alienate,
assign or mortgage it, and substitute another person in its enjoyment13 Since Salome’s clear
intention was to sell merely part of her aliquot share in Lot 162, in our view no valid objection can be
made against it and the sale can be given effect to the full extent.

We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion
of a co-owned property prior to partition among all the co-owners. However, this should not signify
that the vendee does not acquire anything at all in case a physically segregated area of the co-
owned lot is in fact sold to him. Since the co-owner/vendor’s undivided interest could properly be the
object of the contract of sale between the parties, what the vendee obtains by virtue of such a sale
are the same rights as the vendor had as co-owner, in an ideal share equivalent to the consideration
given under their transaction. In other words, the vendee steps into the shoes of the vendor as co-
owner and acquires a proportionate abstract share in the property held in common.

Resultantly, Soledad became a co-owner of Lot 162 as of the year 1940 when the sale was made in
her favor. It follows that Salome, Consorcia and Alfredo could not have sold the entire Lot 162 to
Jose Regalado, Sr. on April 14, 1948 because at that time, the ideal shares held by the three co-
owners/vendors were equivalent to only 10/16 of the undivided property less the aliquot share
previously sold by Salome to Soledad. Based on the principle that "no one can give what he does
not have,"14 Salome, Consorcia and Alfredo could not legally sell the shares pertaining to Soledad
since a co-owner cannot alienate more than his share in the co-ownership. We have ruled many
times that even if a co-owner sells the whole property as his, the sale will affect only his own share
but not those of the other co-owners who did not consent to the sale. Since a co-owner is entitled to
sell his undivided share, a sale of the entire property by one co-owner will only transfer the rights of
said co-owner to the buyer, thereby making the buyer a co-owner of the property.15

In this case, Regalado merely became a new co-owner of Lot 162 to the extent of the shares which
Salome, Consorcia and Alfredo could validly convey. Soledad retained her rights as co-owner and
could validly transfer her share to petitioners in 1951. The logical effect on the second disposition is
to substitute petitioners in the rights of Soledad as co-owner of the land. Needless to say, these
rights are preserved notwithstanding the issuance of TCT No. 14566 in Regalado’s name in 1977.

Be that as it may, we find that the area subject matter of this petition had already been effectively
segregated from the ‘mother lot’ even before title was issued in favor of Regalado. It must be noted
that 26 years had lapsed from the time petitioners bought and took possession of the property in
1951 until Regalado procured the issuance of TCT No. 14566. Additionally, the intervening years
between the date of petitioners’ purchase of the property and 1987 when petitioners filed the instant
complaint, comprise all of 36 years. However, at no instance during this time did respondents or
Regalado, for that matter, question petitioners’ right over the land in dispute. In the case of Vda. De
Cabrera vs. Court of Appeals,16 we had occasion to hold that where the transferees of an undivided
portion of the land allowed a co-owner of the property to occupy a definite portion thereof and had
not disturbed the same for a period too long to be ignored, the possessor is in a better condition or
right than said transferees. (Potior est condition possidentis). Such undisturbed possession had the
effect of a partial partition of the co-owner property which entitles the possessor to the definite
portion which he occupies. Conformably, petitioners are entitled to the disputed land, having enjoyed
uninterrupted possession thereof for a total of 49 years up to the present.

The lower court’s reliance on the doctrine that mere possession cannot defeat the right of a holder of
a registered Torrens title over property is misplaced, considering that petitioners were deprived of
their dominical rights over the said lot through fraud and with evident bad faith on the part of
Regalado. Failure and intentional omission to disclose the fact of actual physical possession by
another person during registration proceedings constitutes actual fraud. Likewise, it is fraud to
knowingly omit or conceal a fact, upon which benefit is obtained to the prejudice of a third
person.17 In this case, we are convinced that Regalado knew of the fact that he did not have a title to
the entire lot and could not, therefore, have validly registered the same in his name alone because
he was aware of petitioners’ possession of the subject portion as well as the sale between Salome
and Soledad.

That Regalado had notice of the fact that the disputed portion of Lot 162 was under claim of
ownership by petitioners and the latter’s predecessor is beyond question. Records show that the
particular area subject of this case was mortgaged by Soledad and her husband to Jose Regalado,
Sr. as early as May 1, 1947 or one year prior to the alienation of the whole lot in favor of the latter.
Regalado never questioned the ownership of the lot given by Soledad as security for the P400.00
debt and he must have at least known that Soledad bought the subject portion from Salome since he
could not have reasonably accepted the lot as security for the mortgage debt if such were not the
case. By accepting the said portion of Lot 162 as security for the mortgage obligation, Regalado had
in fact recognized Soledad’s ownership of this definite portion of Lot 162. Regalado could not have
been ignorant of the fact that the disputed portion is being claimed by Soledad and subsequently, by
petitioners, since Regalado even executed a Release of Mortgage on May 4, 1951, three years after
the entire property was supposedly sold to him. It would certainly be illogical for any mortgagee to
accept property as security, purchase the mortgaged property and, thereafter, claim the very same
property as his own while the mortgage was still subsisting.

Consequently, respondents are estopped from asserting that they own the subject land in view of the
Deed of Mortgage and Discharge of Mortgage executed between Regalado and petitioners’
predecessor-in-interest. As petitioners correctly contend, respondents are barred from making this
assertion under the equitable principle of estoppel by deed, whereby a party to a deed and his
privies are precluded from asserting as against the other and his privies any right or title in
derogation of the deed, or from denying the truth of any material fact asserted in it.18 A perusal of the
documents evidencing the mortgage would readily reveal that Soledad, as mortgagor, had declared
herself absolute owner of the piece of land now being litigated. This declaration of fact was accepted
by Regalado as mortgagee and accordingly, his heirs cannot now be permitted to deny it.

Although Regalado’s certificate of title became indefeasible after the lapse of one year from the date
of the decree of registration, the attendance of fraud in its issuance created an implied trust in favor
of petitioners and gave them the right to seek reconveyance of the parcel wrongfully obtained by the
former. An action for reconveyance based on an implied trust ordinarily prescribes in ten years. But
when the right of the true and real owner is recognized, expressly or implicitly such as when he
remains undisturbed in his possession, the said action is imprescriptible, it being in the nature of a
suit for quieting of title.19 Having established by clear and convincing evidence that they are the legal
owners of the litigated portion included in TCT NO. 14566, it is only proper that reconveyance of the
property be ordered in favor of petitioners. The alleged incontrovertibility of Regalado’s title cannot
be successfully invoked by respondents because certificates of title merely confirm or record title
already existing and cannot be used to protect a usurper from the true owner or be used as a shield
for the commission of fraud.20

WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals in CA-G.R.
CV No. 30438 is REVERSED and SET ASIDE. The parties are directed to cause a SURVEY for
exact determination of their respective portions in Lot 162-C-6. Transfer Certificate of Title No.
14566 is declared CANCELLED and the Register of Deeds of Capiz is ordered to ISSUE a new title
in accordance with said survey, upon finality of this decision.

Costs against respondents. 1âw phi1.nêt

SO ORDERED.
 SECOND DIVISION

G.R. No. 142056 April 19, 2001

EVELYN ONG, ELIZABETH QUIAMCO, JOSEPHINE REJOLLO and ELEONOR

ORTEGA, petitioners,
vs.
COURT OF APPEALS and SPOUSES RICHARD NILDA CABUCOS, respondents.

BELLOSILLO, J.:

PEDRO and JOSEFA QUIAMCO, spouses, owned a residential lot and a house standing thereon
situated in Barrio Carreta, Cebu City, covered by TCT No. RT-3781. They had six (6) children,
namely, Trinidad, Avelina, Amelia, Camilo, Pedro and Darius, all surnamed Quiamco. Pedro died in
1973 and Josefa in 1981. 1âwphi 1.nêt

On 18 January 1985 the Quiamco children above-named executed an Extra-Judicial Declaration of

Heirs with a Deed of Donation stating that they were the only surviving heirs of their deceased
parents and that they were transferring by way of donation the house and lot embraced in TCT No.
RT-3781 to their sister Trinidad Quiamco who duly accepted it. Consequently, TCT NO. 93046 was
issued in the name of Trinidad Quiamco. Thereafter, their brother Darius Quiamco died.
Nevertheless, Trinidad allowed his surviving wife Elizabeth Quiamco and their children Evelyn Ong,
Josephine Rejollo and Eleonor Ortega, petitioners herein, to occupy the house and lot.

On 19 August 1994 respondent-spouses Richard and Nilda Cabucos purchased the house and lot
from Trinidad. Subsequently, TCT No. 130676 was issued in their names. In 1995 they demanded
that petitioners vacate the premises within ten (10) days from notice. Petitioners refused. The matter
had to be referred to the barangay for amicable settlement but the parties failed to arrive at an
agreement. Consequently, respondents filed four (4) complaints against petitioners for illegal
detainer before the Municipal Trial Court of Cebu City. Respondents alleged that they had already
purchased subject property from Trinidad and that petitioners’ possession of the property was by
their mere tolerance.

Petitioners contended that in 1972 the spouses Pedro and Josefa Quiamco had verbally donated the
subject property to them on condition that they would take care of the old couple. Since then
petitioners had been in uninterrupted, open, continuous and peaceful possession of the property and
religiously paying the realty taxes therefor.

The trial court opined that petitioners’ claim of donation could not stand against the ownership of
respondents as evidenced by a certificate of title. On 14 May 1996 it rendered judgment ordering
petitioners and any of their representatives to peacefully vacate the house and lot; to pay
respondents jointly and severally P500.00 a month as rental beginning 15 May 1995 until
possession could be completely turned over to respondents; and, to pay respondents jointly and
severally P5,000.00 as attorney’s fees and P1,000.00 as litigation expenses, and to pay the costs of
suit.1

On 14 May 1997 the Regional Trial Court of Cebu City affirmed the decision of the Municipal Trial
Court.2 On 22 March 1999 the Court of Appeals likewise affirmed the decision of the Regional Trial
Court.3 On 24 January 2000 reconsideration was denied.4

Petitioners insist that they had acquired ownership of subject property by acquisitive prescription as
shown by their uninterrupted, open, continuous and peaceful possession since 1972 up to the
present, as well as by donation.

Petitioners now come to us by way of certiorari under Rule 65 of the Rules of Court imputing grave
abuse of discretion amounting to excess of jurisdiction on the part of the Court of Appeals. But they
have no substantiated their claim. In fact, it is not unlikely that they merely availed of such remedy
because their period within which to appeal from the decision of the Court of Appeals had already
expired. They received copy of the Court of Appeal’s Resolution denying their Motion for
Reconsideration on 28 January 2000, thus they had until 12 February within which to appeal to this
Court. They did not do so but opted to come to us on certiorari. Their petition was posted on 21
February 2000.5But certiorari, this Court emphasizes, is not a substitute for lost appeal.6

Even on the merits, the petition must fail as it does not provide any reason for this Court to disagree
with the uniform ruling of the three (3) lower courts. Petitioners’ alleged possession of subject
property since 1972 cannot render nugatory the right of respondents as holders of a certificate of
title. Prescription does not run against registered land. A title, once registered, cannot be defeated
even by adverse, open and notorious possession.7 The subject property was previously titled in the
name of spouses Pedro and Josefa Quiamco, then transferred to Trinidad, and later to respondents.
Moreover, in asserting ownership by donation, petitioners were in effect assailing the title of
respondents. The Court of Appeals correctly brushed aside this argument of petitioners by invoking
our ruling that a Torrens title cannot be collaterally attacked; the issue on its validity can only be
raised in an action expressly instituted for that purpose.8

Having failed to show any right to possess subject property, petitioners must surrender possession
to respondents as the new owners and rightfully entitled thereto.

WHEREFORE, the petition is DISMISSED. The Decision of the Court of Appeals affirming that of the
Regional Trial Court, which in turn affirmed that of the Municipal Trial Court,
is AFFIRMED. Petitioners, their relatives, and all persons claiming rights thereto and title under them
are ordered to vacate the house and lot originally covered by TCT RT-3781, later by TCT No. 93046,
now by TCT No. 130676 in the name of respondent-spouses Richard and Nilda Cabucos, situated in
Barrio Carreta, Cebu City, and presently owned by the same respondent-spouses Richard and Nilda
Cabucos as registered owners thereof; to pay jointly and severally the same respondent-spouses
P500.00 a month as rental beginning 15 May 1995 until possession thereof is completely turned
over to them, to pay jointly and severally the same respondent-spouses P5,000.00 as attorney’s
fees, and P1,000.00 as litigation expenses, and to pay the costs of suit.

SO ORDERED. 1âw phi 1.nêt

 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 122947 July 22, 1999

TIMOTEO BALUYOT, JAIME BENITO, BENIGNO EUGENIO, ROLANDO GONZALES,

FORTUNATO FULGENCIO and CRUZ-NA-LIGAS HOMESITE ASSOCIATION, INC., petitioners,
vs.
THE HONORABLE COURT OF APPEALS, THE QUEZON CITY GOVERNMENT and
UNIVERSITY OF THE PHILIPPINES, respondents.

MENDOZA, J.:

This is a petition for review of the decision of the Court of Appeals, dated November 24, 1995,
setting aside an order of the Regional Trial Court of Quezon City, Branch 89, and dismissing the
complaint filed by petitioners against private respondents University of the Philippines and the
Quezon City government.

The facts are as follows:

Petitioners Timoteo Baluyot, Jaime Benito, Benigno Eugenio, Rolando Gonzales, and Fortunato
Fulgencio are residents of Barangay Cruz-na-Ligas,1 Diliman, Quezon City. The Cruz-na-Ligas
Homesite Association, Inc. is a non-stock corporation of which petitioners and other residents of
Barangay Cruz-na-Ligas are members. On March 13, 1992, petitioners filed a complaint for specific
performance and damages against, private respondent University of the Philippines before the
Regional Trial Court of Quezon City, docketed as Civil Case No. 4-92-11663. The complaint was
later on amended to include private respondent Quezon City government as defendant. As
amended, the complaint alleges:2

5. That plaintiffs and their ascendants have been in open, peaceful, adverse and
continuous possession in the concept of an owner since memory can no longer recall
of that parcel of riceland known [as] Sitio Libis, Barrio Cruz-na-Ligas, Quezon City
(now Diliman, Quezon City), as delineated in the Plan herein attached as Annex "B"
while the members of the plaintiff Association and their ascendants have possessed
since time immemorial openly, adversely, continuously and also in the concept of an
owner, the rest of the area embraced by and within the Barrio Cruz-na-Ligas,
Diliman, Quezon City as shown in that Plan herein attached as Annex "C" in all
consisting of at least forty (42) hectares;

6. That since October 1972, the claims of the plaintiffs and/or members of plaintiff
Association have been the subject of quasi-judicial proceedings and administrative
investigations in the different branches of the government penultimately resulting in
the issuance of that Indorsement dated May 7, 1975 by the Bureau of Lands, a copy
of which is made an integral pan of Annex "D", and ultimately, in the issuance of the
Indorsement of February 12, 1985, by the office of the President of the Republic of
the Philippines, a copy of which is herein attached as Annex "E" confirming the rights
of the bonafide residents of Barrio Cruz-na-Ligas to the parcel of land they have
been possessing or occupying as originally found and recommended in that Brief
dated November 2, 1972 and Recommendation dated November 7, 1972, copies of
which are made integral parts hereof as Annexes "F" and "G";

7. That defendant UP, pursuant to the said Indorsement (Annex E) from the Office of
the President of the Republic of the Philippines, issued that Reply Indorsement dated
September 19, 1984, a copy of which is herein attached as Annex "H", pertinent
portion of which is quoted as follows:

2. In 1979, the U.P. Board of Regents approved the donation of about

9.2 hectares of the site, directly to the residents of Brgy. Krus Na
Ligas. After several negotiations with the residents, the area was
increased to 15.8 hectares (158,379 square meters); (emphasis
supplied).1âwphi1.nêt

3. Notwithstanding the willingness of U.P. to proceed with the

donation, Execution of the legal instrument to formalize it failed
because of the unreasonable demand of the residents for an area
bigger than 15.8 hectares.

8. That upon advise of counsel and close study of the said offer of defendant UP to
Donate 15.8379 hectares, plaintiff Association proposed to accept and the defendant
UP manifested in writing [its] consent to the intended donation directly to the plaintiff
Association for the benefit of the bonafide residents of Barrio Cruz-na-Ligas and
plaintiffs' Association have agreed to comply with the terms and conditions of the
donation;

9. That, however, defendant UP backed-out from the arrangement to Donate directly

to the plaintiff Association for the benefit of the qualified residents and high-handedly
resumed to negotiate the donation thru the defendant Quezon City Government
under the terms disadvantageous or contrary to the rights of the bonafide residents
of the Barrio as shown in the Draft of Deed of Donation herein attached as Annex "I";

10. That plaintiff Association forthwith amended [its] petition in the pending case LRC
No. 3151 before Branch 100 of the Regional Trial Court of Quezon City by adding the
additional cause of action for specific performance aside from the exclusion from the
technical description of certificate of title of defendant UP the area embraced in the
Barrio Cruz-na-Ligas, consisting of at least forty-two (42) hectares, more or less, and
praying in the said Amended Petition for a writ of preliminary injunction to restrain
defendant UP from donating the area to the defendant Quezon City Government, a
copy of the said Amended Petition is herein attached as Annex "J";

11. That, after due notice and hearing, the application for writ of injunction as well as
the opposition of defendant UP, the Order dared January 24, 1986 granting the writ
of preliminary injunction was issued, a copy of which is herein attached as Annex
"K";

12. That in the hearing of the Motion for Reconsideration filed by defendant UP.
Reconsideration is herein copy of the said Motion for attached as Annex "L", plaintiff
Association finally agreed to the lifting of the said Order (Annex K) granting the
injunction after defendant UP made an assurance in their said Motion for
Reconsideration that the donation to the defendant Quezon City Government will be
for the benefit of the residents of Cruz-Na-Ligas as shown in the following:

6. The execution of the Deed of Donation in favor of the Quezon City

government will not work any injustice to the petitioners.

As well stated in Respondent's Opposition to the Prayer for Issuance

of a Writ of Preliminary Injunction, it is to the best interest of the
Petitioners that such a deed be executed.

The plan to Donate said property to the residents of Bgy. Krus-na-

Ligas, that is, throughthe Quezon City government, is to their best
interests. Left alone, the present land and physical development of
the area leaves much to be desired. Road and drainage networks
have to be constructed, water and electric facilities installed, and
garbage collection provided for. The residents, even collectively, do
not have the means and resources to provide for themselves such
basis facilities which are necessary if only to upgrade their living
condition.

Should the proposed donation push through, the residents would be

the first to benefit.

thus, Branch 100 of this Honorable Court issued that Order dated April 2, 1986, lifting
the injunction, a copy of which is hereby attached as Annex "M";

13. That, however, defendant UP took exception to the aforesaid Order lifting the
Order of Injunction and insisted [on] the dismissal of the case; thus, it was stated
that:

2. Respondent has consistently taken the position that efforts to

expedite the formalization of a Deed of Donation for the benefit of the
residents of Barangay Kruz-na-Ligas should not only be pre-
conditioned on the lifting of the Writ of Preliminary Injunction, but also
the dismissal of the Petition;

in defendant UP's Motion for Reconsideration of the Order dated April 2, 1986, a
copy of the said Motion is herein attached as Annex "N";

14. That plaintiff Association in [its] "Comment" on the Motion for Reconsideration of
the Order dated April 2, 1986, filed on June 2, 1986, manifested [its] willingness to
the dismissal of the case, aside from [its] previous consent to the lifting of the
preliminary injunction; provided, that the area to be Donated thru the defendant
Quezon City government be subdivided into lots to be given to the qualified residents
together with the certificate of titles, without cost, a copy of the said Comment is
hereby attached as Annex "O";

15. That, that was why, in the hearing re-scheduled on June 13, 1986 of defendant
UP's Motion for Reconsideration of the Order dated April 2, 1986 (Annex N), the
Order dated June 13, 1986, was issued, the full text of which is quoted as follows:
 After hearing the manifestation of Atty. Angeles for the petitioners and
Atty. Raval for the respondent University of the Philippines, since the
petitioners' counsel was the first to make a manifestation that this
case which is now filed before this court should be dismissed first
without prejudice but because of the vehement objection of the
University of the Philippines, thru counsel, that a dismissal without
prejudice creates a cloud on the title of the University of the
Philippines and even with or without this case filed, the University of
the Philippines has already decided to have the property subject of
litigation Donated to the residents of Cruz-na-ligas with, of course, the
conditions set therein, let this case be DISMISSED without
pronouncement as to cost.

As to the charging lien filed by Petitioners thru counsel, it will be a

sole litigation between the petitioners and the oppositors both
represented by counsel, with the University of the Philippines being
neutral in this case.

and a copy of the said Order is herein attached as Annex "P";

16. That, true to [its] commitment stated in the aforesaid Order of June 13, 1986,
defendant UP executed that Deed of Donation on August 5, 1986, in favor of the
defendant Quezon City Government for the benefit of the qualified residents of Cruz-
na-Ligas; however, neither the plaintiffs herein nor plaintiff Association officers had
participated in any capacity in the act of execution of the said deed of donation, a
copy of the said executed Deed of Donation is herein attached as Annex "Q";

17. That under the said deed of donation, the 15.8379 hectares were ceded,
transferred and conveyed and the defendant Quezon City Government accepted the
Donation under the terms and conditions, pertinent portions of which are quoted as
follows:

This donation is subject to the following conditions:

xxx xxx xxx

2. The DONEE shall, within eighteen (18) months from the signing
hereof, undertake at its expense the following:

a. Cause the removal of structures built on the

boundaries of the Donated lot;

b. Relocate inside the Donated lot all families who are

presently outside of the Donated lot;

c. Relocate all families who cannot be relocated within

the boundaries of the Donated lot to a site outside of
the University of the Philippines campus in Diliman,
Quezon City;
 d. Construct a fence on the boundaries adjoining
Kruz-na-Ligas and the University.

In the construction of the fence, the DONEE shall establish a ten-

meter setback in the area adjacent to Pook Amorsolo and the
Peripheral Road (C.P. Garcia Street);

e. Construct a drainage canal within the area Donated

along the boundary line between Kruz- na-ligas and
Pook Amorsolo.

In the construction of the fence and the drainage canal, the DONEE
shall conform to the plans and specifications prescribed by the
DONOR.

xxx xxx xxx

5. The DONEE shall, after the lapse of three (3) years, transfer to the
qualified residents by way of donation the individual lots occupied by
each of them, subject to whatever conditions the DONEE may wish to
impose on said donation;

6. Transfer of the use of any lot in the property Donated during the
period of three (3) years referred to in Item 4 above, shall be allowed
only in these cases where transfer is to be effected to immediate
members of the family in the ascending and descending line and said
Transfer shall be made known to the DONOR. Transfer shall be
affected by the Donee;

7. The costs incidental to this Deed, including the registration of the

property Donated shall be at the expense of the DONEE.

The Donee shall also be responsible for any other legitimate

obligation in favor of any third person arising out of, in connection
with, or by reason of, this donation.

18. That the defendant Quezon City Government immediately prepared the
groundworks in compliance with the afore-quoted terms and conditions; however,
defendant UP under the officer-in-charge then and even under the incumbent
President, Mr. Jose Abueva, had failed to deliver the certificate of title covering the
property to be Donated to enable the defendant Quezon City Government to register
the said Deed of Donation so that corresponding certificate of title be issued under its
name;

19. That defendant UP had continuously and unlawfully refused, despite requests
and several conferences made, to comply with their reciprocal duty, to deliver the
certificate of title to enable the Donee, the defendant Quezon City Government, to
register the ownership so that the defendant Quezon City Government can legally
and fully comply with their obligations under the said deed of donation;
20. That upon expiration of the period of eighteen (18) [months], for alleged non-
compliance of the defendant Quezon City Government with terms and conditions
quoted in par. 16 hereof, defendant UP thru its President, Mr. Jose Abueva,
unilaterally, capriciously, whimsically and unlawfully issued that Administrative Order
No. 21 declaring the deed of donation revoked and the Donated property be reverted
to defendant UP;

21. That the said revocation and reversion without judicial declaration is illegal and
prejudicial to the rights of the plaintiffs who are the bonafide residents or who
represent the bonafide residents of the Barrio Cruz-na-Ligas because: firstly, they
were not made bound to comply with the terms and conditions of the said donation
allegedly violated by the defendant Quezon City Government; secondly, defendant
UP, as averred in the preceding paragraphs 9 and 11, was the one who insisted that
the donation be coursed through the defendant Quezon City Government; and the
said revocation or reversion are likewise pre-judicial to third parties who acquired
rights therefrom;

22. That, as it apparently turned out, the plaintiff Association, who duly represented
the qualified or bonafide resident of Barrio Cruz-na-Ligas, was deceived into
consenting to the lifting of the injunction in said LRC Case No. Q-3151 and in
agreeing to the dismissal of the said LRC Case No. Q-3151 when defendant
unjustifiably revoked the donation which they undertook as a condition to the
dismissal of LRC Case No. 3151;

23. That by reason of the deception, the herein plaintiffs hereby reiterate their claims
and the claims of the bonafide residents and resident/farmers of Barrio Cruz-na-
Ligas [to] the ownership of forty-two (42) hectares area they and their predecessors-
in-interest have occupied and possessed; parenthetically, the said 42 hectares
portion are included in the tax declaration under the name of defendant UP who is
exempted from paying real estate tax; hence, there is no assessment available;

24. That by reason of bad faith and deceit by defendant UP in the execution and in
compliance with [its] obligations under the said Deed of Donation (Annex Q hereof)
plaintiffs have suffered moral damages in the amount of at least P300,000.00;

25. That because of wanton and fraudulent acts of defendant UP in refusing to

comply with what is incumbent upon [it] under the Deed of Donation (Annex Q) and
in whimsically and oppressively declaring the revocation of the said deed of donation
and the reversion of the 15.8 hectares Donated, [it] should be made liable to pay
exemplary damages in the sum of P50,000.00 to serve as example in the interest of
public good;

26. That because of said defendant UP's unlawful acts, plaintiffs have been
compelled to retain the services of their attorneys to prosecute this case with whom
they agreed to pay the sum of Fifty Thousand Pesos (P50,000.00) as attorney's fees;
and by way of:

APPLICATION FOR WRIT OF

PRELIMINARY INJUNCTION
(a) Plaintiffs hereby reallege and reproduce herein by reference all the material and
relevant allegations in the preceding paragraphs;

(b) Having legally established and duly recognized rights on the said parcel of lands
as shown in the documents marked herein as Annexes "D"; E; F; G; and M, plaintiffs
have the rights to be protected by an injunctive writ or at least a restraining order to
restrain and to order defendant UP from:

1) Ejecting the plaintiffs-farmers and from demolishing the

improvements in the parcel of riceland or farmlands situated at Sitio
Libis of Barrio Cruz-na-Ligas, embraced in the claims of the plaintiffs
as shown in these photographs herein attached as Annexes "R" to
"R-3";

2) Executing another deed of donation with different terms and

conditions in favor of another and for the benefit of additional
occupants who are not bonafide residents of the Barrio or Barangay
Cruz-na-Ligas;

(c) Defendant UP has already started ejecting the plaintiffs and demolishing their
improvements on the said riceland and farmlands in order to utilize the same for the
residential house project to the irreparable damages and injuries to the plaintiffs-
farmers, unless restrained or enjoined to desist, plaintiffs will continue to suffer
irreparable damages and injuries;

(d) Plaintiffs are ready and willing to file the injunctive bond in such amount that may
be reasonably fixed;

PRAYER

WHEREFORE, it is respectfully prayed to this Honorable Court that before the

conduct of the proper proceedings, a writ of preliminary injunction or at least a
temporary restraining order be issued, ordering defendant UP to observe status quo;
thereafter, after due notice and hearing, a writ of preliminary injunction be issued; (a)
to restrain defendant UP or to their representative from ejecting the plaintiffs from
and demolishing their improvements on the riceland or farmland situated at Sitio
Libis; (b) to order defendant UP to refrain from executing another deed of donation in
favor another person or entity and in favor of non-bonafide residents of Barrio Cruz-
na-Ligas different from the Deed of Donation (Annex Q hereof), and after trial on the
merits, judgment be rendered:

1. Declaring the Deed of Donation (Annex Q) as valid and subsisting

and ordering the defendant UP to abide by the terms and conditions
thereof;

2. Adjudging the defendant University of the Philippines to segregate

the riceland or farmlands as additional area embraced by the Barrio
Cruz-na-Ligas, pursuant to the First Indorsement of August 10, 1984
(Annex E) and pursuant to Findings, Reports and Recommendation
(Annex G) of the Bureau of Lands with an estimated assessed value
of P700,000.00;
 3. Ordering defendant UP to pay for plaintiffs' moral damages of
P300,000.00, exemplary damages of P50,000.00, and costs of suit;

4. Enjoining defendant UP to pay professional fees of P50,000.00 of

the undersigned attorneys for the plaintiffs; and

Plaintiffs further respectfully pray for other just and equitable reliefs.

Earlier, on May 15, 1992, the trial court denied petitioners' application for preliminary injunction. Its
order stated:3

ORDER

Acting on plaintiffs' application for the issuance of a temporary restraining

order/preliminary injunction and the opposition thereto of the defendant filed on April
3, 1992, as well as plaintiffs' reply therewith filed on April 23, 1992, considered in the
light of the affidavit executed on April 23, 1992 by Timoteo Baluyot, Sr. and by Jaime
Benito, Benigno Eugenio, Rolando Gonzales and Fortunato Fulgencio executed on
April 21, 1929, for the plaintiffs; and, the affidavit of merit executed on April 28, 1992,
by Atty. Carmelita Yadao-Guno, for the defendant, it appearing that the principal
action in this case is one for the specific performance, apparently, of the Deed of
Donation executed on August 8, 1986, by defendant University of the Philippines in
favor of the Quezon City Government, involving the land in question, in virtue of
which, it is clear that the plaintiffs are not parties to the said deed of donation, by
reason of which, consequently, there has not been established by the plaintiffs a
clear legal right to the enforcement of the said deed of donation, especially as the
said deed was already validly revoked by the University of the Philippines, thru its
president, Jose Abueva, in his Administrative Order No. 21, for which reason the
same could no longer be enforced, plaintiffs' prayer for the issuance of a temporary
restraining order/writ of preliminary injunction, is DENIED.

SO ORDERED.

Petitioners moved for a reconsideration of the above order. Without resolving petitioners' motion, the
trial court ordered petitioners to amend their complaint to implead respondent Quezon City
government as defendant.4 Hence, the amended complaint was filed on June 10, 1992, in which it is
alleged:

4. That the Quezon City Government . . . which should be joined as party plaintiff is
instead impleaded herein as party defendant, because its consent can not be
secured within a reasonable time;

On July 27, 1992, respondent city government filed its Answer to the Amended Complaint with
Cross-Claim.5However, on November 29, 1993, it moved to withdraw its cross-claim against UP6 on
the ground that, after conferring with university officials, the city government had recognized "the
propriety, validity and legality of the revocation of the Deed of Donation."7

The motion was granted by the trial court in its order, dated December 22, 1994.8 On the same day,
a Joint Motion to Dismiss was filed by UP and the Quezon City government on the ground that the
complaint fails to state a cause of action.9 Petitioners opposed the motion.
On April 26, 1995, the trial court denied respondents' motion to dismiss on the ground that "a perusal
of [petitioners'] amended complaint, specifically paragraph 5 thereof, . . . shows that it necessarily
alleges facts entitling [petitioners] to acquire ownership over the land in question, by reason of
laches, which cannot be disposed of and resolved at this stage without a trial on the merits." 10 The
trial court, however, reiterated its ruling that petitioners did not have a cause of action for specific
performance on the ground that the deed of donation had already been revoked as stated in its order
denying injunction.

On August 14, 1995, respondents filed a petition for certiorari with the Court of Appeals, charging the
trial court with grave abuse of discretion in refusing to dismiss the complaint filed by petitioners.
Respondents contended that —

1. Respondent Judge himself had declared that [petitioners] clearly are not parties to
the deed of donation sought to be enforced thus they had not shown clear legal right
to the enforcement of said deed of donation which is their principal cause of action;
and

2. Under the factual circumstances obtaining, the respondent judge gravely erred in
denying the joint motion to dismiss and declaring that [petitioners] are entitled to
acquire ownership over the land in question by reason of laches through a trial on the
merits; such constitutes a collateral attack on [respondent UP's] title in the same suit
for specific performance.

On November 24, 1995, the appellate court rendered a decision setting aside the trial court's order
of April 26, 1995 and ordering the dismissal of Civil Case No. 4-92-11663. The appellate court ruled
that —

1. Petitioners' complaint did not allege any claim for the annulment of UP's title over the portion of
land concerned or the reconveyance thereof to petitioners;

2. The alleged cause of action based on ownership of the land by petitioners was tantamount to a
collateral attack on the title of UP which is not allowed under the law; and

3. There is no acquisition of ownership by laches.

Hence, this petition for review on certiorari based on the following grounds:

I. THE RESPONDENT COURT OF APPEALS WAS IN ERROR IN CONCLUDING

THAT THE TRIAL COURT ACTED WITH GRAVE ABUSE OF DISCRETION IN
DENYING THE JOINT MOTION TO DISMISS.

II. IN DISMISSING THE AMENDED COMPLAINT, THE RESPONDENT

APPELLATE COURT HAS ACTED IN EXCESS [OF] JURISDICTION WHEN IT
MADE [THE] FINDING AND CONCLUSION THAT THE REVOCATION OF THE
DONATION IS VALID WHEN THAT IS THE PRIMARY AND CONTROVERTED
ISSUE INVOLVING VARIED QUESTIONS OF FACTS.

Petitioners argue that, on its face, their amended complaint alleges facts constituting a cause of
action which must be fully explored during trial. They cite paragraphs 18, 19, and 20 of their
complaint questioning the validity of the revocation of the donation and seek the enforcement of the
donation through specific performance. 11
On the other hand, respondents contend that by seeking specific performance of the deed of
donation as their primary cause of action, petitioners cannot at the same time claim ownership over
the property subject of the donation by virtue of laches or acquisitive prescription. Petitioners cannot
base their case on inconsistent causes of action. Moreover, as the trial court already found the deed
to have been validly revoked, the primary cause of action was already thereby declared in existent.
Hence, according to respondents, the Court of Appeals correctly dismissed the complaint. 12

First. The question is whether the complaint states a cause of action. The trial court held that
inasmuch as the donation made by UP to the Quezon City government had already been revoked,
petitioners, for whose benefit the donation had been made, had no cause of action for specific
performance. Nevertheless, it denied respondents' joint motion to dismiss petitioners' action on the
ground that respondent UP was barred from contesting petitioners' right to remain in possession on
the ground of laches.

This is error. While prescription does not run against registered lands, nonetheless a registered
owner's action to recover possession of his land may be barred by laches. As held in Mejia de Lucas
v. Gamponia: 13

[W]hile no legal defense to the action lies, an equitable one lies in favor of the
defendant and that is, the equitable defense of laches. No hold that the defense of
prescription or adverse possession in derogation of the title of the registered owner
Domingo Mejia does not lie, but that of the equitable defense of laches. Otherwise
stated, we hold that while defendant may not be considered as having acquired title
by virtue of his and his predecessors' long continued possession for 37 years, the
original owner's right to recover back the possession of the property and the title
thereto from the defendant has, by the long period of 37 years and by patentee's
inaction and neglect, been converted into a stale demand.

Thus, laches is a defense against a registered owner suing to recover possession of the land
registered in its name. But UP is not suing in this case. It is petitioners who are, and their suit is
mainly to seek enforcement of the deed of donation made by UP in favor of the Quezon City
government. The appellate court therefore correctly overruled the trial court on this point. Indeed,
petitioners do not invoke laches. What they allege in their complaint is that they have been
occupying the land in question from time immemorial, adversely, and continuously in the concept of
owner, but they are not invoking laches. If at all, they are claiming ownership by prescription which,
as already stated, is untenable considering that the land in question is a registered land. Nor can
petitioners question the validity of UP's title to the land. For as the Court of Appeals correctly held,
this constitutes a collateral attack on registered title which is not permitted.

On the other hand, we think that the Court of Appeals erred in dismissing petitioners' complaint for
failure to state a cause of action.

A cause of action exists if the following elements are present, namely: (1) a right in favor of the
plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the
part of the defendant to respect or not to violate such right; and (3) an act or omission on the part of
such defendant in violation of the right of the plaintiff or constituting a breach of the obligations of the
defendant to the plaintiff for which the latter may maintain an action for recovery of damages. 14

We find all the elements of a cause of action contained in the amended complaint of petitioners.
While, admittedly, petitioners were not parties to the deed of donation, they anchor their right to seek
its enforcement upon their allegation that they are intended beneficiaries of the donation to the
Quezon City government. Art. 1311, second paragraph, of the Civil Code provides:
 If a contract should contain some stipulation in favor of a third person, he may
demand its fulfillment provided he communicated his acceptance to the obliger
before its revocation. A mere incidental benefit or interest of a person is not
sufficient. The contracting parties must have clearly and deliberately conferred a
favor upon a third person.

Under this provision of the Civil Code, the following requisites must be present in order to have a
stipulationpour autrui: 15

(1) there must be a stipulation in favor of a third person;

(2) the stipulation must be a part, not the whole of the contract;

(3) the contracting parties must have clearly and deliberately conferred a favor upon
a third person, not a mere incidental benefit or interest;

(4) the third person must have communicated his acceptance to the obliger before its
revocation; and

(5) neither of the contracting parties bears the legal representation or authorization of
the third party.

The allegations in the following paragraphs of the amended complaint are sufficient to bring
petitioners' action within the purview of the second paragraph of Art. 1311 on stipulations pour autrui:

1. Paragraph 17, that the deed of donation contains a stipulation that the Quezon City government,
as donee, is required to transfer to qualified residents of Cruz-na-Ligas, by way of donations, the lots
occupied by them;

2. The same paragraph, that this stipulation is part of conditions and obligations imposed by UP, as
donor, upon the Quezon City government, as donee;

3. Paragraphs 15 and 16, that the intent of the parties to the deed of donation was to confer a favor
upon petitioners by transferring to the latter the lots occupied by them;

4. Paragraph 19, that conferences were held between the parties to convince UP to surrender the
certificates of title to the city government, implying that the donation had been accepted by
petitioners by demanding fulfillment thereof 16and that private respondents were aware of such
acceptance; and

5. All the allegations considered together from which it can be fairly inferred that neither of private
respondents acted in representation of the other; each of the private respondents had its own
obligations, in view of conferring a favor upon petitioners.

The amended complaint further alleges that respondent UP has an obligation to transfer the subject
parcel of land to the city government so that the latter can in turn comply with its obligations to make
improvements on the land and thereafter transfer the same to petitioners but that, in breach of this
obligation, UP failed to deliver the title to the land to the city government and then revoked the deed
of donation after the latter failed to fulfill its obligations within the time allowed in the contract.
For the purpose of determining the sufficiency of petitioners' cause of action, these allegations of the
amended complaint must be deemed to be hypothetically true. So assuming the truth of the
allegations, we hold that petitioners have a cause of action against UP. Thus, in Kauffman
v. NationalBank, 17 where the facts were —

Stated in bare simplicity the admitted facts show that the defendant bank for a
valuable consideration paid by the Philippine Fiber and Produce Company agreed on
October 9, 1918, to cause a sum of money to be paid to the plaintiff in New York
City; and the question is whether the plaintiff can maintain an action against the bank
for the non performance of said undertaking. In other words, is the lack of privity with
the contract on the part of the plaintiff fatal to the maintenance of an action by him? 18

it was held:

In the light of the conclusions thus stated, the right of the plaintiff to maintain the
present action is clear enough; for it is undeniable that the bank's promise to cause a
definite sum of money to be paid to the plaintiff in New York City is a stipulation in his
favor within the meaning of the paragraph above quoted; and the circumstances
under which that promise was given disclose an evident intention on the part of the
contracting parties that the plaintiff should have that money upon demand in New
York City. The recognition of this unqualified right in the plaintiff to receive the money
implies in our opinion the right in him to maintain an action to recover it; and indeed if
the provision in question were not applicable to the facts now before us, it would be
difficult to conceive of a case arising under it.

It will be noted that under the paragraph cited a third person seeking to enforce
compliance with a stipulation in his favor must signify his acceptance before it has
been revoked. In this case the plaintiff clearly signified his acceptance to the bank by
demanding payment; and although the Philippine National Bank had already directed
its New York agency to withhold payment when this demand was made, the rights of
the plaintiff cannot be considered to have been prejudiced by that fact. The word
"revoked," as there used, must be understood to imply revocation by the mutual
consent of the contracting parties, or at least by direction of the party purchasing the
exchange. 19

It is hardly necessary to state that our conclusion that petitioners' complaint states a cause of action
against respondents is in no wise a ruling on the merits. That is for the trial court to determine in light
of respondent UP's defense that the donation to the Quezon City government, upon which
petitioners rely, has been validly revoked.

Respondents contend, however, that the trial court has already found that the donation (on which
petitioners base their action) has already been revoked. This contention has no merit. The trial
court's ruling on this point was made in connection with petitioners' application for a writ of
preliminary injunction to stop respondent UP from ejecting petitioners. The trial court denied
injunction on the ground that the donation had already been revoked and therefore petitioners had
no clear legal right to be protected. It is evident that the trial court's ruling on this question was only
tentative, without prejudice to the final resolution of the question after the presentation by the parties
of their
evidence. 20

Second. It is further contended that the amended complaint alleges inconsistent causes of action for
specific performance of the deed of donation. Respondents make much of the fact that while
petitioners claim to be the beneficiaries-donees of 15.8 hectares subject of the deed, 21they at the
same time seek recovery/delivery of title to the 42 hectares of land included in UP's certificate of
title. 22

These are not inconsistent but, rather, alternative causes of action which Rule 8, §2 of the Rules of
Court allows:

Alternative causes of action or defenses. — A party may set forth two or more
statements of a claim or defense alternatively or hypothetically, either in one cause of
action or defense or in separate causes of action or defenses. When two or more
statements are made in the alternative and one of them if made independently would
be sufficient, the pleading is not made insufficient by the insufficiency of one or more
of the alternative statements.

Thus, the parties are allowed to plead as many separate claims as they may have,
regardless of consistency, provided that no rules regarding venue and joinder of parties are
violated. 23

Moreover, the subjects of these claims are not exactly and entirely the same parcel of land;
petitioners' causes of action consist of two definite and distinct claims. The rule is that a trial court
judge cannot dismiss a complaint which contained two or more causes of action where one of them
clearly states a sufficient cause of action against the defendant. 24

WHEREFORE, the decision of the Court of Appeals is REVERSED and the case is REMANDED to
the Regional Trial Court of Quezon City, Branch 89, for trial on the merits.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 132644 November 19, 1999

ERNESTO DAVID, RICARDO DAVID, NELIA DAVID, EMILIA DAVID, LOLITA DAVID, BASILIO
LEMQUE, NICANOR LEMQUE, FELIX LEMQUE, NORMA LEMQUE, WILFREDO LEMQUE,
RODOLFO LEMQUE, ROGELIO LEMQUE, VICTORIA LEMQUE, ESTATE OF MARIA ESPIRITU
and ANDRES ADONA, MILAGROS DE UBAGO-UMALI, FELISA GUBALLA DE UBAGO,
VANESSA DE UBAGO-UMALI, ANTONIO DE UBAGO, JR., JOSEPH GUBALLA DE UBAGO,
MARIETTA DE UBAGO-TAN, and REGISTER OF DEEDS OF ZAMBALES, petitioners,
vs.
CRISTITO MALAY and NORA MALAY, DIONISIO MALAY, FRANCISCA T. CAPACILLO, PEPITO
ALCANTARA, NICOLAS SORIANO and JUAN MORA, respondents.

VITUG, J.:
The instant case is an appeal from a decision of the Court of Appeals reversing that of the Regional
Trial Court on an action for reconveyance of property. The issues submitted by the parties may not
really be all that novel.

The spouses Andres Adona and Leoncia Abad, husband and wife for a good number of years, were
blessed with five children among them being Carmen Adona. Carmen married Filomeno Malay;
three children were begotten by the marriage, namely, Cristito, Nora and Dionisio (among the herein
private respondents). Following the death of Leoncia Abad in 1923, Andres Adona cohabited with
Maria Espiritu, herself a widow, apparently without the benefit of marriage. Andres and Maria sired
two children, Esperanza, represented herein by her heirs all surnamed David, and Vicente Adona.
Maria Espiritu likewise had a child by her previous marriage, Fulgencio Lemque, now herein
represented also by his own heirs.

During his lifetime, Andres Adona applied for a homestead patent over a parcel of agricultural land
located at Dirita, Iba, Zambales, containing an area of 22.5776 hectares. After Andres Adona had
died, Maria Espiritu, predecessor-in-interest of herein petitioners, succeeded in obtaining Original
Certificate of Title No. 398 over the land in her name. After Maria Espiritu had died in 1945, the
children, as well as descendants, of Andres Adona by his marriage with Leoncia Abad, continued to
be in peaceful and quiet possession of the subject land.

Sometime in 1989 petitioners executed a deed of "Extrajudicial Settlement with Sale" over the
subject property in favor of Mrs. Venancia Ungson. Private respondents protested the sale claiming
that they were the true owners of the land. Ultimately, in any event, the sale in favor of Mrs. Ungson
was rescinded in view of the latter's failure to pay in full the consideration agreed upon.
Subsequently petitioners executed another deed of Extrajudicial Settlement with Sale. In this new
instrument, dated 15 December 1990, petitioners divided the land equally among themselves and
sold their respective shares to their co-petitioners herein. Antonio de Ubago, Jr., Milagros de Ubago-
Umali, Felisa Guballa de Ubago, Vanessa de Ubago-Umali and Marietta de Ubago-Tan and Joseph
Guballa de Ubago. On 27 November 1992 Transfer Certificate of Title No. T-42320 was issued in
favor of the de Ubagos.

Less than a month later or on 07 December 1992 private respondents filed a complaint docketed
Civil Case No. RTC-905-1 for "Annulment of Sale with Restraining Order Injunction and Damages"
against petitioners before Branch 71 of the Regional Trial Court of Zambales. In their complaint
private respondents averred that the disputed land sold by the heirs of Maria Espiritu to the de
Ubagos was the subject of a homestead application by their great grandfather. Andres Adona, but
that Original Certificate of Title No. 398 was instead fraudulently issued to Maria Espiritu, on 04
December 1933, upon her false representation that she was the widow of Andres Adona.

In its decision of 25 July 1995 after a hearing on the merits of the case, the trial court dismissed the
complaint for lack of cause of action and on the ground of prescription. It opined that the action being
one for annulment of sale anchored on a fraudulent titling of the subject property, the cause of action
constituted a collateral attack on the Torrens Certificate of Title. The court a quo added that even if
the action were to be treated as being one for reconveyance, the suit would still have to fail since an
action for reconveyance could only be brought within ten (10) years counted from the date of
issuance of the certificate of title (in 1933).

On appeal, the Court of Appeals, in its judgment of 11 February 1998,1 set aside the order of
dismissal of the case decreed by the trial court and directed the cancellation of Transfer Certificate
of Title No. T-42320 in the name of the de Ubagos and the reconveyance of the property to the
estate of Andres Adona. Petitioners were additionally ordered to pay damages and attorney's fees to
private respondents. The appellate court, more particularly, ruled.
The evidence on record shows that OCT No. 398 issued in favor of Maria Espiritu
was obtained by her fraudulent concealment of the existence of Adona's first
marriage to Leoncia Abad, as shown by the affidavit she executed on September 21,
1928 and filed with the Director of Lands.

Consequently, Maria Espiritu's fraudulent concealment of material facts created an

implied or constructive trust in favor of the plaintiffs, the excluded co-heirs and actual
possessors of the subject land. Article 1456 of the Civil Code reads:

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.

Although it is true that after the lapse of one year, a decree of registration is no
longer open to review or attack, although its issuance was tainted with fraud;
however, the aggrieved party is not without a remedy at law. Notwithstanding the
irrevocability of the Torrens Title already issued in favor of Maria Espiritu, she and
her successors-in-interest, although the registered owner under the Torrens system,
may still be compelled under the law to reconvey the subject property to the real
owners. The Torrens system was not designed to shield and protect one who had
committed fraud or misrepresentation and thus holds title in bad faith (Amerol vs.
Bagumbaran, 154 SCRA 396, 404 [1987]);

In an action for reconveyance, the decree of registration is respected as

incontrovertible. What is sought instead is the transfer of the property, which has
been wrongfully or erroneously registered in another person's name, to its rightful
and legal owner, or to one with a better right. (Amerol, supra.)

However, the right to seek reconveyance based on an implied or constructive trust is

not absolute. It is subject to existence prescription. (Amerol, supra.; Caro vs. Court of
Appeals, 180 SCRA 401, 405-407 [1989]; Ramos vs. Court of Appeals, 112 SCRA
542, 550 [1982]; Ramos vs. Ramos, 61 SCRA 284, 299-300 [19741])

An action for reconveyance of a parcel of land based on an implied trust prescribes

in ten years, the point of reference being the date of registration of the deed or the
date of the issuance of the certificate of title over the property. (Amerol, supra.,
Caro, supra., Casipit vs. Court of Appeals, 204 SCRA 684, 694 [1991]). This rule
applies only when the plaintiff or the person enforcing the trust is not in possession of
the property. If a person claiming to be the owner thereof is in actual possession of
the property, the right to seek reconveyance does not prescribe. The reason for this
is one who is in actual possession of a piece of land claiming to be the owner thereof
may wait until his possession is disturbed or his title is attacked before taking steps
to vindicate his right. His undisturbed possession gives him the continuing right to
seek the aid of a court of equity to ascertain the nature of the adverse claim of third
party and its effect on his title, which right can be claimed only by one who is in
possession. (Vda. de Cabrera vs. Court of Appeals, G.R. 108547, February 3, 1997).

Hence, the undisturbed possession by plaintiffs and their predecessors-in-interest

gave them the continuing right to resort to judicial intervention once their claim to
ownership was challenged. It was therefore the defendant. Heirs act of executing the
"Extrajudicial Settlement of Estate with Sale" which constituted the express act of
repudiation of the constructive trust which gave rise to plaintiffs cause of action.2
Aggrieved, petitioners have come to this Court and seek to dispute the judgment of the Court of
Appeals ordering the cancellation of Original Certificate of Title No. 398 issued on 16 November
1933. It is the contention of petitioners that to allow private respondents to question Original
Certificate of Title No. 398 fifty-nine years after its issuance would undermine the Torrens system
and sanctity of the certificate of title.

Private respondents, upon the other hand, ask this Court to sustain the decision of the Court of
Appeals on the thesis that the property in question indubitably belongs to the estate of Andres
Adona whose incontestable right to it is derived from the perfected homestead application two years
prior to his death as so admitted by Maria Espiritu herself in her affidavit submitted to the Director of
Lands.

The Court rules for the affirmance of the challenged decision.

A certificate of title issued under an administrative proceeding pursuant to a homestead patent

covering a disposable public land within the contemplation of the Public Land Law or Commonwealth
Act No. 141 is as indefeasible as a certificate of title issued under a judicial registration proceeding.
Under the Land Registration Act, title to the property covered by a Torrens certificate becomes
indefeasible after the expiration of one year from the entry of the decree of registration. Such decree
of registration is incontrovertible and becomes binding on all persons whether or not they were
notified of, or participated in, the in rem registration process.3 There is no specific provision in the
Public Land Law or the Land Registration Act (Act 496), now Presidential Decree 1529, fixing a
similar one-year period within which a public land patent can be considered open to review on the
ground of actual fraud, such as that provided for in Section 38 of the Land Registration Act, and now
Section 32 of Presidential Decree 1529, and clothing a public land patent certificate of title with
indefeasibility. Nevertheless, this Court has repeatedly applied Section 32 of Presidential Decree
1529 to a patent issued in accordance with the law by the Director of Lands, approved by the
Secretary of Natural Resources, under the signature of the President of the Philippines.4 The date of
the issuance of the patent corresponds to the date of the issuance of the decree in ordinary cases.
Just as the decree finally awards the land applied for registration to the party entitled to it, so also,
the patent issued by the Director of Lands equally and finally grants and conveys the land applied for
to the applicant.5

Original Certificate of Title No. 398 was issued in the name of Maria Espiritu on 04 December 1933
and would have become indefeasible a year thereafter had not its issuance been attended with
fraud. The attendance of fraud created an implied trust in favor of private respondents and gave
them the right of action to seek the remedy of reconveyance of the property wrongfully
obtained.6 In Javier vs. Court of Appeals7 this Court ruled:

. . . The basic rule is that after the lapse of one (1) year, a decree of registration is no
longer open to review or attack although its issuance is attended with actual fraud.
This does not mean however that the aggrieved party is without a remedy at law. If
the property has not yet passed to an innocent purchaser for value, an action for
reconveyance is still available. The decree becomes incontrovertible and can no
longer be reviewed after one (1) year from the date of the decree so that the only
remedy of the landowner whose property has been wrongfully or erroneously
registered in another's name is to bring an ordinary action in court for reconveyance,
which is an action in personam and is always available as long as the property has
not passed to an innocent third party for value. If the property has passed into the
hands of an innocent purchaser for value, the remedy is an action for damages. 8
The caption of the case before the court a quo while denominated as being one for "Annulment of
Sale with Damages" is in reality an action for reconveyance since the ultimate relief sought by
private respondents would be for the property covered by Original Certificate of Title No. 398 to be
reconveyed to the estate of Andres Adona. In this jurisdiction, the dictum adhered to is that the
nature of an action is determined, more importantly, by the body of the pleading or complaint itself
than by its title or heading. The Court of Appeals did not err in treating the action brought by private
respondents as one for reconveyance or as one that seeks the transfer of the property, wrongfully
registered by another, to its rightful and legal owner. 10 It would seem that Andres Adona did perfect
his homestead application prior to his death, 11 the right to the issuance of the patent on which vests
after complying with all the requirements of the law. 12

The next crucial issue focuses on the ruling of the Court of Appeals to the effect that if a person who
claims to be the owner of the property is in actual possession thereof, the right to seek
reconveyance does not prescribe.

There is no doubt about the fact that an action for reconveyance based on an implied trust ordinarily
prescribes in ten years. 13 This rule assumes, however, that there is an actual need to initiate that
action, for when the right of the true and real owner is recognized, expressly or implicitly such as
when he remains undisturbed in his possession, the statute of limitation would yet be irrelevant. An
action for reconveyance, if nonetheless brought, would be in the nature of a suit for quieting of title,
or its equivalent, an action that is imprescriptible. In Faja vs. Court of Appeals, 14 the Court has held
that a person in actual possession of a piece of land under claim of ownership may wait until his
possession is disturbed or his title is attacked before taking steps to vindicate his right, and that his
undisturbed possession gives him the 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 title. In the words
of the Court —

. . . 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. 15

The same dictum is reiterated in Heirs of Jose Olviga vs.Court of Appeals; 16 thus —

With regard to the issue of prescription, this Court has ruled a number of times
before that an action for reconveyance of a parcel of land based on implied or
constructive trust prescribes in ten years, the point of reference being the date of
registration of the deed or the date of the issuance of the certificate of title over the
property (Vda. de Portugal vs. IAC, 159 SCRA 178). But this rule applies only when
the plaintiff is not in possession of the property, since if a person claiming to be the
 owner thereof is in actual possession of the property, the right to seek reconveyance,
which in effect seeks to quiet title to the property, does not prescribe. 17

Finally, this Court sees no cogent reasons to disturb the finding of the Court of Appeals that the de
Ubagos may not be considered buyers in good faith. Said the Appellate Court:

. . . An innocent purchaser for value is one who buys 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 persons in the property. He buys the property
with the belief that the person from whom he receives the thing was the owner and
could convey title to the property. A purchaser can not close his eyes to facts which
should put a reasonable man on his guard and still claim he acted in good faith
(Sandoval vs. Court of Appeals, 260 SCRA 283, 296 [1996]).

It is well settled that one who deals with property registered under the Torrens
system need not go beyond the same, but only has to rely on the title. He is charged
with notice only of such burdens and claims as are annotated on the title.
(Sandoval, supra., at p. 295).

The aforestated principle admits of an unchallenged exception: that a person dealing

with registered land has a right to rely on the Torrens certificate of title and to
dispense with the need of inquiring further except when the party has actual
knowledge of facts and circumstances that would impel a reasonably cautious man
to make such inquiry or when the purchaser has some knowledge of a defect or the
lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to
inquire into the status of the title of the property in litigation. The presence of anything
which excites or arouses suspicion should then prompt the vendee to look beyond
the certificate and investigate the title of the vendor appearing on the face of said
certificate. One who falls within the exception can neither be denominated an
innocent purchaser for value nor a purchaser in good faith and hence does not merit
the protection of the law. (Sandoval, supra.) (Emphasis supplied)

Applying the aforequoted jurisprudence, the defendant buyers can not be considered
as innocent purchasers for value. A perusal of defendant buyers' TCT No. 42320
reveals that it contains an entry by the Register of Deeds which provides that their
ownership over the land is subject to prospective claims by any possible heirs and
creditors who might have been deprived of their lawful participation in the estate. The
said entry reads as follows:

Entry No. 102385 — Section 4 — The

property described in this certificate of
title is subject to the provisions of
Section 4, Rule 74 of the Rules of
Court for the period of two years in
favor of in any other possible heir or
heirs and creditors who might have
been deprived of his or their lawful
participations in the said estate.

Date of Instrument — December 15,

1990
 Date of Inscription — November 27,
1992 at 2:00 p.m. (Exh. "E"; Rollo, p.
137)

Sec. 4, Rule 74 of the Rules of Court reads, in part, as follows:

Sec. 4. Liability of distributees and estate. — If it shall appear at any

time within (2) years after the settlement and distribution of an estate
in accordance with the provisions of either of the first two sections of
this rule, that an heir or other person has been unduly deprived of his
lawful participation in the estate, such heir or such other person may
compel the settlement of the estate in the courts in the manner
hereinafter provided for the purpose of satisfying such lawful
participation . . .

The record shows that the "Extrajudicial Settlement of Estate with Sale" was
executed on December 15, 1990. Plaintiffs' complaint for Reconveyance was filed on
December 7, 1992. Hence, the two-year period has not yet elapsed.

It likewise appears that the subject land was the object of a sale between the
defendant Heirs and one Mrs. Venancia Ungson which was subsequently aborted
due to the intervention of defendant Vicente Adona and plaintiff Cristito Malay. (Exhs.
"K", "K-1" and "L") However, defendant Heirs nevertheless executed another sale in
favor of defendant buyers who are admittedly relatives of Mrs. Venancia Ungson.
(TSN, January 23, 1995, p. 14) Plaintiff Cristito Malay's intervention in the previous
sale should have put defendant buyers on their guard.

Moreover, it is unbelievable that the defendant buyers would not have noticed the
plaintiffs who were in possession of the land when the defendant buyers inspected
the same. Had they made further investigations, they would have discovered that
plaintiffs were in possession of the land under a claim of ownership.

The rule is settled that a buyer of real property which is in the possession of persons
other than the seller must be wary and should investigate the rights of those in
possession. Otherwise, without such inquiry, the buyer can hardly be regarded as a
buyer in good faith. The buyer who has failed to know or discover that the land sold
to him is in the adverse possession of another buyer in bad faith. (Embrado vs. Court
of Appeals, 233 SCRA 335, 347 [1994]). 18

Altogether, the Court sees no reversible error on the part of the Court of Appeals in its assailed
decision.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED Costs against petitioners.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
 FIRST DIVISION

G.R. No. 119714 May 29, 1997

SALVADOR S. ESQUIVIAS and ALICIA DOMALAON-ESQUIVIAS, petitioners,

vs.
COURT OF APPEALS, JOSE G. DOMALAON, ELENA G. DOMALAON and REGISTER OF
DEEDS OF SORSOGON, respondents.

BELLOSILLO, J.:

A 6,270-SQUARE METER PARCEL OF LAND in the poblacionof Gubat, Sorsogon,1 is the subject of
this action for reconveyance and damages.

Julia Galpo de Domalaon was the owner of a piece of land with an area of 1,260 square meters and
the two-storey house standing thereon. In 1950 she extrajudicially constituted this property into a
family home. Alicia Domalaon-Esquivias, Elena G. Domalaon and Jose G. Domalaon, among other
children, were named beneficiaries thereof.2

On 11 March 1974 a Deed of Absolute Sale was executed by Julia Galpo de Domalaon in favor of
her son-in-law, Atty. Salvador Esquivias, husband of Alicia Domalaon. Subject matter of the deed
was the property constituting the family home — the two-storey house and the residential lot on
which it stood, more particularly described in the deed as —

. . . containing an area corresponding to the ground floor area of the house (136 sq.
m.) plus and including its outside surrounding area of land measuring three (3)
meters from the outside walls on all on all sides of said house, and including the
whole width and length of the driveway leading from the house to Manook Street.
This is likewise part and parcel of the family home declared in the name of Julia
Galpo de Domalaon under Tax Declaration No. 9021 containing an original area of
1,260 square meters, more or less, and assessed at P1,070. 3

On 30 March 1977 the family home was dissolved by Julia Galpo de Domalaon with the conformity
of all her children. Afterwards, another deed of sale was executed by her dated 12 April 1977
transferring to Jose G. Domalaon the house and lot which once constituted the family home. The
deed indicated that the property being sold was the entire 1,260 square meters. 4 However, in
the Affidavit of Confirmatory Waiver of Rights, 5 the area was increased to 2,456 square meters.

Prior to the sale of the property to him, or on 21 October 1976, Jose already filed two (2) applications
for Free Patent in his name covering the entire property. When his first application was approved, a
certificate of title 6 was issued on 11 February 1981. His rights over the other application covering the
rest of the property were relinquished by him in favor of his sister Elena. 7 It turned out later that
Elena G. Domalaon also succeeded in her application for Free Patent and a certificate of title was
issued in her name on 18 March 1985. 8

Alleging that it was only in 1981 that she came to know that the document she signed in favor of
Atty. Salvador S. Esquivias in 1974 was actually a deed of sale, Julia Galpo de Domalaon filed a
disbarment case against Atty. Esquivias. According to her, being a son-in-law and lawyer of the
Domalaons, Atty. Esquivias took advantage of her trust and confidence and poor eyesight by
representing that the document was a sale of her land in favor of all her children. But the Solicitor
General, who investigated the case, recommended its dismissal for lack of merit thus —

xxx xxx xxx

The claim of the complainant that respondent took advantage of her trust and
confidence and presented to her for signature a prepared document which he
represented as a distribution of her lands to her children is not credible . . . It is
inconceivable that from March 1974 up to January 1981, complainant had never
informed her children that she had already signed a document transferring her
ricelands to them . . . And what is more, it is too much of a coincidence that Elena
Domalaon discovered the document at the Office of the Register of Deeds of
Sorsogon in January 1981 . . . The only reasonable conclusion is that Elena knew all
along about the existence of said document, which is a genuine deed of sale in favor
of respondent, and she and her mother (complainant herself) only concocted the
alleged misrepresentation committed by respondent just to get even with him . . . The
settled rule is that the serious consequences of disbarment or suspension should
follow only where there is a clear preponderance of evidence against the respondent.
The presumption is that the attorney is innocent of the charges proffered and has
performed his duty as a lawyer in accordance with his oath.

Complainant's evidence is obviously insufficient to prove dishonesty on the part of

respondent. Complainant's version is not credible, and respondent has adduced
sufficient evidence to prove motive for the filing of the instant complaint . . . .9

This Court adopted the above Recommendation and dismissed the case. 10

Upon discovering that the subject lands were already titled in the names of Jose and Elena, Atty.
Esquivias and his wife filed an action for reconveyance and damages before the Regional Trial Court
of Sorsogon. In their complaint they claimed the entire 6,270 square meters and not just the house
and lot they acquired by purchase from Julia. According to them, when Silvestre Domalaon, husband
of Julia, was still alive he promised to transfer the entire property in their names as payment of his
accumulated debts to them. Thus, they declared the property in their names and paid the taxes
thereon.

After trial, the court ruled in favor of plaintiffs thus —

WHEREFORE, premises considered, this Court hereby orders:

1. That plaintiff Salvador Esquivias and Alicia Domalaon-Esquivias be declared the

owners of the house and the portion of the land it is standing on, with an area of 136
sq. m., plus and including its outside surrounding area of land measuring three (3)
meters from the outside walls on all sides of the house, and including the whole width
and length of the driveway leading from the house to Manook Street;

2. That Jose Domalaon should reconvey to the plaintiffs that property mentioned
above; and for the purpose, a licensed surveyor be commissioned to set off that
particular portion of the property. The fee of such surveyor should be paid by
defendant Jose Domalaon;
 3. That the property identified as Lot No. 453 be partitioned by the heirs of Julia G.
Domalaon, and as a consequence, the Register of Deeds of Sorsogon is ordered to
cancel OCT No. P-22729 in the name of Elena Domalaon and issue the
corresponding titles to the portions owned by each heir;

4. That defendants Jose Domalaon and Elena Domalaon should pay to the plaintiffs,
jointly and severally, the sum of P5,000 as moral damages, and P5,000 as attorney's
fees;

5. That defendants, likewise, jointly and severally, should pay the costs of this suit.

Not satisfied with the decision, respondents Jose G. Domalaon and Elena G. Domalaon elevated the
case to the Court of Appeals which reversed the decision of the trial court and dismissed the case on
the basis of its finding that there was no compliance with the mandatory requirements of Art. 222 of
the New Civil Code; hence, the instant petition.

Three (3) issues need to be resolved: (a) Was the appellate court correct in holding that no earnest
effort towards a compromise between members of the same family was made, in contravention of
Art. 222 of the Civil Code? (b) Did the Report/Recommendation of the Solicitor General in the
disbarment case, which was adopted by the Supreme Court, rule on the validity of the sale executed
by Julia Domalaon? (c) Who has a better right over the subject property, the Esquiviases or the
Domalaons?

Petitioners contend that Atty. Esquivias is only a brother-in-law of Jose and Elena Domalaon. Atty.
Esquivias is not a member of the family of his wife and is outside the scope and coverage of the law
requiring that the same members of a family should exert efforts to bring about a compromise before
the commencement of a litigation.

We agree with petitioners. Article 222 of the Civil Code provides that no suit shall be filed or
maintained between members of the same family unless it should appear that earnest efforts
towards a compromise have bee made but the same have failed. The reason for the law is that a
lawsuit between family members generates deeper bitterness than one between strangers. Hence, it
is necessary that every effort should be made towards a compromise before a litigation is allowed to
breed hate and passion in the family. 11

But this requirement in Art. 222 of the Civil Code applies only to suits between or among members of
the same family. The phrase "between members of the same family" should be construed in the light
of Art. 217 of the Civil Code 12 under which "family relations" include only those (a) between husband
and wife, (b) between parent and child, (c) among other ascendants and their descendants, and (d)
among brothers and sisters.

As correctly pointed out by petitioners, Atty. Salvador S. Esquivias is not included in the enumeration
of who are members of the same family, as he is only a brother-in-law of respondents Jose and
Elena by virtue of his marriage to their sister Alicia. His relationship with respondents is based on
affinity and not on consanguinity. Consequently, insofar as he is concerned, he is a stranger with
respect to the family of his wife and, as such, the mandatory requirement of "earnest effort toward a
compromise" does not apply to him. In Magbaleta v. Gonong 13 we ruled that "efforts to compromise"
are not a jurisdictional prerequisite for the maintenance of an action whenever a stranger to the
family is a party thereto, whether as necessary or indispensable one. An alien to the family may not
be willing to suffer the inconvenience of, much less relish, the delay and the complications that
wranglings between and among relatives more often than not entail. Besides, it is neither practical
nor fair that the rights of a family be made to depend on a stranger who just happens to have
innocently acquired some interest in a property by virtue of his affinity to the parties. Contrary to the
ruling of the Court of Appeals, we find no reason to give Art. 222 a broader scope than its literal
import.

On the second issue, petitioner Salvador S. Esquivias postulates that the validity of the deed of sale
in his favor had already been sustained in the disbarment proceedings against him. As a
consequence, the facts established therein have become the law of the case and can no longer be
disturbed by the Court of Appeals.

The argument is flawed. In the case of In re Almacen 14 we ruled —

. . . Disciplinary proceedings against lawyers are sui generis. Neither purely civil nor
purely criminal, they do not involve a trial of an action or a suit, but are rather
investigations by the Court into the conduct of one of its officers. Not being intended
to inflict punishment, it is in no sense a criminal prosecution. Accordingly, there is
neither a plaintiff nor a prosecutor therein. It may be initiated by the Court motu
proprio. Public interest is its primary objective, and the real question for
determination is whether or not the attorney is still a fit person to be allowed the
privileges as such. Hence, in the exercise of its disciplinary powers, the Court merely
calls upon a member of the Bar to account for his actuations as an officer of the
Court with the end in view of preserving the purity of the legal profession and the
proper and honest administration of justice by purging the profession of members
who by their misconduct have proved themselves no longer worthy to be entrusted
with the duties and responsibilities pertaining to the office of an attorney. In such
posture, there can thus be no occasion to speak of a complainant or a prosecutor.

For this reason, whatever has been decided in the disbarment case cannot be a source of
right that may be enforced in another action, like this case before us.

Moreover, what was decided in the disbarment proceedings was the issue of whether Atty. Esquivias
violated his oath by defrauding and deceiving the complainant into conveying to him the properties in
question, and not the issue of the validity of the deed of sale. When the Solicitor General made a
declaration that the deed was valid, it was only because the same was incidentally necessary for the
prompt resolution of the case. Indeed, in matters involving questions of genuineness and due
execution of documents purporting to convey properties of considerable value, no less than an
action instituted for that purpose before a court of competent jurisdiction is necessary, rather than a
mere administrative proceeding, like a disbarment case, where the procedure followed is, more often
than not, summary, and where the question on validity of the instrument is merely a collateral and
not the main issue.

Consequently, the judgment on the disbarment proceedings, which incidentally touched on the issue
of the validity of the deed of sale, cannot be considered conclusive in another action where the
validity of the same deed of sale is merely one of the main issues. At best, such judgment may only
be given weight when introduced as evidence, but in no case does it bind the court in the second
action.

We are convinced, however, that the sale in favor of Atty. Esquivias was made by Julia with full
knowledge of the facts and there appears nothing on record to warrant a declaration of nullity of the
deed from the standpoint of fraud.

It must be emphasized that the bare existence of confidential relation between grantor and grantee
does not, standing alone, raise the presumption of fraud. A deed will not be set aside merely
because the grantor and grantee sustained a confidential relationship where the evidence shows no
fraud or abuse of confidence. 15 Besides, if Julia really had a cause of action against Atty. Esquivias,
why did she file only a disbarment case instead of the more appropriate action for annulment of
contract?

As regards the third issue, this Court notes the glaring irregularities that attended the transfer of the
land in question to Jose G. Domalaon and Elena G. Domalaon: First, the land was sold by Julia to
Jose on 12 April 1977. 16 But even prior to that date, or on 21 October 1976 , Jose already applied for
Free Patent in his name covering the land; 17Second, during the disbarment proceedings against
Atty. Esquivias, Elena admitted on cross-examination that she went to the Register of Deeds of
Sorsogon to register another deed of sale — one executed by her mother in favor of her brother
Jose over the same house and lot — ahead of the deed of sale executed in favor of Atty. Esquivias.
She succeeded in doing so by using the tax receipt paid by Atty. Esquivias himself; 18 Third, in the
deed of sale of Jose, what was sold to him was 1,260 square meters. However, in the Affidavit of
Confirmatory Waiver of Rights the area was increased to 2,456 square meters; Fourth, Jose
relinquished to Elena Lot No. 453 with an area of 3,814 square meters. Surprisingly, the records
contain no deed or evidence showing that Julia likewise sold to Jose Lot No. 453. What was sold
was 1,260 square meters if we go by the deed of sale, or 2,456 square meters if we base it on
the Affidavit of Confimatory Waiver of Rights. As aptly observed by the trial court, how could Jose
relinquish to Elena something which he did not own? Fifth, Julia executed an affidavit 19 dated 17 July
1986 wherein she ceded her rights and interests over Lot No. 453 in favor of Jose. But it will be
observed that such affidavit was not sufficient to transfer ownership of the subject lot. Even if it did, it
was executed only after more than four (4) years from the date Jose relinquished to Elena his
alleged rights over Lot No. 453.

These circumstances confirm the belief that there indeed was collusion among the Domalaons to
defeat the valid and legitimate claim of the Esquiviases by consolidating the ownership of the entire
property in the names of Jose G. Domalaon and Elena G. Domalaon. They likewise belie the
Domalaons' profession of ignorance with respect to the existence of the first sale.

Logically, while the deed of sale in favor of Jose G. Domalaon was registered earlier, the same
cannot prevail over the deed of sale in favor of Atty. Esquivias because private respondent knew of
the prior sale to petitioners, and such knowledge tainted his registration with bad faith. 20 To merit
protection under Art. 1544, second par., 21 the second buyer must act in good faith in registering his
deed.

While we are sustaining petitioners' rights over the house and lot subject of the 11 March 1974 deed
of sale, we cannot find any justification to likewise award to them the rest of the property. They
presented no evidence other than their self-serving assertion that the entire property was promised
to them by the late Silvestre Domalaon. The fact that such promise was not contradicted by private
respondents does not prove that their claim over the entire property is valid and subsisting.
Furthermore, although the entire property was declared by petitioners in their names for taxation
purposes, it does not by itself constitute conclusive evidence of ownership. 22

Finally, while the certificates of title in the names of Jose G. Domalaon and Elena G. Domalaon are
indefeasible, unassailable and binding against the whole world, including the government itself, they
do not create or vest title. They merely confirm or record title already existing and vested. They
cannot be used to protect a usurper from the true owner, nor can they be used as a shield for the
commission of fraud; neither does they permit one to enrich himself at the expense of others. 23

Although a review of the decree of registration is no longer available on account of the expiration of
the one-year period from entry thereof, an equitable remedy is still available to the Esquiviases who
were wrongfully deprived of their property, i.e., to compel Jose G. Domalaon in whose name the
house and lot in question had been wrongfully registered, to reconvey the property to the
Esquiviases, provided that the same has not yet been transferred to innocent persons for value. 24

The registered property is deemed to be held in trust for the real owners by the person in whose
name it has been registered. In this action for reconveyance, the decree of registration is respected
as incontrovertible. What is sought instead is the transfer of the property, in this case, the title
thereof, which has been wrongfully or erroneously registered in another person's name, to its rightful
and legal owners. 25

WHEREFORE, the Decision of respondent Court of Appeals reversing that of the Regional Trial
Court, Branch 54, Gubat, Sorsogon, is REVERSED and SET ASIDE, and the Decision of the latter
court in favor of petitioners as quoted in pages four (4) and five (5) hereof is REINSTATED and
AFFIRMED. Costs against private respondents.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 126875 August 26, 1999

HEIRS OF MARIANO, JUAN, TARCELA and JOSEFA, all surnamed BRUSAS, petitioners,
vs.
COURT OF APPEALS and HEIRS OF SPOUSES INES BRUSAS and CLETO REBOSA,
respondents.

BELLOSILLO, J.:

This is a bitter dispute spanning more than two (2) decades of protracted legal entanglements and
deep-seated enmity among the protagonists, even descending to their children, each claiming
ownership over a 19-hectare land located in San Francisco, Baao, Camarines Sur. In view of the
prolonged litigation, the original parties have since died and are now substituted by their heirs.

Petitioners, heirs of Juan, Mariano, Tarcela and Josefa, all surnamed Brusas, claimed that the
disputed property, formerly a public land, was part of the 33-hectare land in the actual physical
possession of their grandfather Sixto Brusas since 1924, having inherited the same from their great
grandfather Pedro Brusas. Sometime in 1946 Sixto Brusas caused the property to be surveyed in
the name of his five (5) children, namely, Juan, Ines, Mariano, Tarcela and Josefa. The survey was
approved as Psu-116520.1 As indicated in the survey plan the property was traversed by the Barit
River, and the eastern portion thereof with an aggregate area of 19.8992 hectares was denominated
as Lots 1 and 2, while the western portion measuring 13.2439 hectares was designated as Lots 3
and 4. In the same year, the property was subdivided among the five (5) children of Sixto Brusas.
The partition was made lengthwise so that each heir would have access to the river and, as was the
custom of the place, the distribution was made according to their age: the southernmost lot was
assigned to Juan being the eldest, followed successively by Ines, Mariano, Tarcela and Josefa.2 All
of them purportedly took immediate possession of their respective shares. 1âwphi1.nêt

On 17 July 1968 Ines Brusas applied for and was granted a free patent over Lots 1 and 2 of Psu-
116520 with an aggregate area of 19.8992 hectares for which OCT No. 23356 was issued in her
name. Thus, when Mariano Brusas and Josefa Brusas filed their sworn statements of landholdings
in 1973 they supposedly discovered that their properties were already titled in the name of their
sister Ines. The discovery triggered a controversy among the Brusas siblings and earnest efforts to
settle the conflict before the barangay officials, the local police and the PC Provincial Commander
proved futile.

Private respondents, heirs of Ines Brusas and Cleto Rebosa, denied on the other hand that Lots 1
and 2 were owned and possessed by their grandfather Sixto Brusas during his lifetime. They
asserted that Ines Brusas was the absolute owner having entered the property as early as 1924.
Since then Ines Brusas and her husband Cleto Rebosa were clearing the land on their own by
cutting down trees and removing their roots it being a forested area. In 1957 Ines Brusas applied for
a free patent which was approved and the corresponding certificate of title issued in 1967.

Sometime in 1974 Ines Brusas filed a complaint for recovery of six (6) hectares of land alleging that
her brothers and sisters forcibly entered and deprived her of that portion of the property.3 Juan,
Josefa, Mariano and Tarcela countered by instituting in the same court an action for reconveyance
imputing fraud, misrepresentation and bad faith to Ines Brusas in using a forged affidavit to obtain
title over Lots 1 and 2 despite full knowledge that she owned only 1/5 portion thereof.4

After the cases were consolidated trial dragged on for nineteen (19) years. The lower court finally
rendered its decision in 1993 dismissing the complaint filed by Ines Brusas, declaring Lots 1 and 2
as the pro-indiviso property of the Brusas siblings, and ordering Ines Brusas to reconvey to her
brothers and sisters their respective shares in the disputed property.

On appeal, however, the Court of Appeals in its Decision of 16 July 1996 reversed and set aside the
decision of the trial court thus —

WHEREFORE . . . . the appealed decision is REVERSED and SET ASIDE and another judgment is
hereby rendered as follows:

1. In Civil Case No. IR-1058, ordering defendants and/or their successors-in-interest to

vacate the land described in paragraph 4 of the complaint and/or to deliver possession
thereof to plaintiffs or their successors-in-interest;

2. Dismissing the complaint for reconveyance and damages in Civil Case No. IR-1059.

The Court of Appeals ratiocinated —

Apart from the self-serving and bare allegations of appellees, no competent evidence was
adduced to substantiate their claim of fraud on the part of Ines Brusas in her application for a
free patent over the land in dispute. They submitted specimens of their signatures to the NBI
office at Naga City for examination but failed to submit to the court the result thereof. Such
failure indicates either that they did not pursue their request for examination or that, if they
did, the result thereof is adverse to their cause.
 It is significant to note that aside from the supposedly falsified affidavit, Exhibit 4, another
affidavit was executed by Ines, together with Tarcela, Juan and Josefa, all surnamed Brusas,
renouncing their rights to Lots 3 and 4 in favor of Mariano Brusas (Exhibit 11). Both appear
to have been notarized by the same Notary Public on April 22, 1960. The existence of the
two affidavits, Exhibits 4 and 11, strongly suggests that the Brusas recognized Ines Brusas
as the sole claimant of Lots 1 and 2 and Mariano Brusas, the sole claimant of lots 3 and 4.

There is likewise a presumption of regularity in the performance of official duty. There is no

showing that the grant of a free patent in favor of Ines Brusas was predicated solely on the
affidavit of waiver, Exhibit 4, or that without it her application would not have been given due
course.

It must be borne in mind, in this regard, that the land in dispute was originally a public land.
The occupation and cultivation thereof by Sixto Brusas, the father of Ines, Tarcela, Josefa,
Juan and Mariano Brusas, did not make it a part of his hereditary estate. If he had complied
with all the legal requirements for the grant of a free patent, he could have filed the
corresponding application therefor. But he did not. Hence, he could not have transmitted
ownership thereof to his heirs upon his death (citing Naval v. Jonsay, 50 O.G. 4792)

Their motion for reconsideration having been denied by the Court of Appeals in its Resolution of 30
September 1996, petitioners now come to us through this petition for review.

The pivotal issues to be resolved are: first, who are the rightful owners of the disputed property — is
it the heirs of Mariano, Juan, Josefa and Tarcela Brusas, whose claim of ownership is evidenced by
a survey and subdivision plan; or, is it the heirs of spouses Ines Brusas and Cleto Rebosa, whose
claim of ownership flows from an original certificate of title in the name of their parents, and covering
the litigated property? And second, was there fraud on the part of Ines Brusas in causing the
registration of the disputed land under her name thus entitling petitioners to the reconveyance of
their shares therein?

It is a fundamental principle in land registration that the certificate of title serves as evidence of an
indefeasible and incontrovertible title to the property in favor of the person whose name appears
therein. A title once registered under the Torrens System cannot be defeated even by adverse, open
and notorious possession; neither can it be defeated by prescription. It is notice to the whole world
and as such all persons are bound by it and no one can plead ignorance of the registration.5

The real purpose of the Torrens System of land registration is to quiet title to land and stop forever
any question as to its legality. Once a title is registered the owner may rest secure without the
necessity of waiting in the portals of the court, or sitting on the mirador de su casa, to avoid the
possibility of losing his land.6 Indeed, titles over lands under the Torrens system should be given
stability for on it greatly depends the stability of the country's economy. Interest reipublicae ut sit finis
litium.

This does not mean, however, that the landowner whose property has been wrongfully or
erroneously registered in another's name is without remedy in law. When a person obtains a
certificate of title to a land belonging to another and he has full knowledge of the rights of the true
owner, he is considered guilty of fraud. He may then be compelled to transfer the land to the
defrauded owner so long as the property has not passed to the hands of an innocent purchaser for
value.7

In the instant case, the litigated property is still registered in the name of Ines Brusas, so that insofar
as procedure is concerned, petitioners were correct in availing of the remedy of reconveyance.
However, an action for reconveyance presupposes the existence of a defrauded party who is the
lawful owner of the disputed property. It is thus essential for petitioners to prove by clear and
convincing evidence their title to the property, and the fact of fraud committed by Ines Brusas in
registering their property in her name, which they miserably failed to do.

Primarily, the survey and subdivision plan submitted in evidence by petitioners are inferior proofs of
ownership and cannot prevail against the original certificate of title in the name of Ines Brusas who
remains and is recognized as the registered owner of the disputed property.

The survey of the land in the name of the five (5) children of Sixto Brusas is only an indication that
each has an interest over the property, but it does not define the nature and extent of those
interests, nor the particular portions of the property to which those interests appertain. The
subdivision plan, on the other hand, is of doubtful evidentiary value and can hardly be the basis of a
claim of ownership. A careful examination thereof shows that it is nothing but a sketch of the land
purportedly prepared by a private land surveyor. It is not apparent therein when and where the
partition was made, or who caused the property to be subdivided. Worse, this document was not
even signed by any of the parties to the supposed partition to show their conformity thereto, nor
acknowledged in writing by any of them or their heirs.

Even petitioners' tax declarations and tax receipts are unavailing. It is well-settled that they are not
conclusive evidence of ownership or of the right to possess land, in the absence of any other strong
evidence to support them.8 The fact that the disputed property may have been declared for taxation
purposes in the names of the brothers and sisters of Ines Brusas does not necessarily prove their
ownership thereof. The tax receipts and tax declarations are merely indicia of a claim of ownership.

What perhaps militates heavily against petitioners is the Affidavit (of waiver) marked Exh. "4"
executed sometime in 1960 by Mariano, Tarcela, Juan and Josefa, whereby they relinquished,
ceded and transferred to Ines Brusas their rights and interests over the controversial property, and
recognized her as the absolute owner thereof, thus —

WE, MARIANO BRUSAS, JUAN BRUSAS, TARCELA BRUSAS and JOSEFA BRUSAS, all
of legal age, married except the last who is a widow, residence (sic) and with postal address
at Baao, Camarines Sur, after having been duly sworn to according to law, state the
following, to wit —

That we are the brothers and sisters of Ines Brusas, applicant of Free Patent Application No.
10-4375 covering Lots 1 and 2, Psu-116520, situated in Baao, Camarines Sur;

That by virtue of this instrument, we relinquish, cede and transfer whatever rights and
interests we might have over Lots 1 and 2, Psu-116520 in favor of our sister, Ines Brusas;

That we do not have any opposition to Ines Brusas acquiring title to said Lots 1 and 2, Psu-
116520 by virtue of her Free Patent Application No. 10-4375;

That we recognize our sister, Ines Brusas as the legal and absolute owner of Lots 1 and 2,
Psu-116520 as covered by her Free Patent Application No. 10-4375;

WHEREFORE, we sign this instrument of our own will and voluntary act and after the same
has been translated in our own native dialect and understood fully its contents, this April 20,
1960 at Naga City.
 (SGD) MARIANO BRUSAS (SGD) JUAN BRUSAS

(SGD) TARCELA BRUSAS (SGD) JOSEFA BRUSAS

On the basis of the foregoing reasons alone the instant case should immediately be dismissed.
Having failed to show any valid title to the land involved petitioners are not the proper parties who
can rightfully claim to have been fraudulently deprived thereof. Nonetheless, for the satisfaction of all
and sundry, we shall proceed to refute their accusation of fraud.

First, Ines Brusas allegedly misrepresented in her application for free patent that she was the only
claimant of the disputed property, without disclosing that her other brothers and sisters were
claiming portions that supposedly belonged to them. It is worthy to emphasize, to the point of being
repetitious, that Juan, Tarcela, Mariano and Josefa executed an affidavit of waiver recognizing Ines
Brusas as the legal and absolute owner of Lots 1 and 2, and manifesting that they have no
opposition to Ines Brusas' acquiring certificates of title over those lots. It was on the basis of this
affidavit of waiver that Ines stated in her application for free patent that she was the sole claimant of
Lots 1 and 2. Certainly this is not fraud. At any rate, it appears from the records that Juan, Tarcela,
Mariano and Josefa were notified of the application for free patent of Ines Brusas and duly afforded
the opportunity to object to the registration and to substantiate their claims, which they failed to do.
Hence their opposition was accordingly disregarded and Ines Brusas' application was given due
course.9 Petitioners cannot thus feign ignorance of the registration. Moreover, it is significant that
petitioners never contested the order of the Bureau of Lands disregarding their claims, i.e., by filing a
motion for reconsideration, or an appeal, for that purpose. This could only mean that they either
agreed with the order or decided to abandon their claims.

Petitioners next assailed the genuineness of Exh. "4" asserting that the signatures therein were
forged. However, no evidence was adduced by them to substantiate their allegation. It appears that
they submitted for examination by the NBI eighteen (18) specimen signatures of Juan, Tarcela,
Mariano and Josefa. Unfortunately, no standard signature could be found for the year 1960 when
Exh. "4" was executed.10 Petitioners admitted that they were unable to produce what was required by
the NBI, hence, they "just had to give up."11

Furthermore, there was another Affidavit (Exh. "11") signed in the same year by the Brusases, Ines
included, recognizing Mariano Brusas as the sole claimant of Lots 3 and 4 and waiving their interests
therein in his favor. This fact all the more confirms that the affidavit of waiver in favor of Ines Brusas
was authentic. As correctly observed by the appellate court —

It is significant to note that aside from the supposedly falsified affidavit, Exhibit 4, another
affidavit, was executed by Ines, together with Tarcela, Juan and Josefa, all surnamed
Brusas, renouncing their rights to Lots 3 and 4 in favor of Mariano Brusas (Exhibit 11). Both
appear to have been notarized by the same Notary Public on April 22, 1960. The existence
of the two affidavits, Exhibits 4 and 11, strongly suggests that the Brusas[es] recognized Ines
Brusas as the sole claimant of Lots 1 and 2 and Mariano Brusas, the sole claimant of Lots 3
and 4.12

It is not for private respondents to deny forgery. The burden of proof that the affidavit of waiver is
indeed spurious rests on petitioners. Yet, significantly, even as they insist on forgery they never
really took serious efforts in establishing such allegation by preponderant evidence. It must be
stressed that mere allegations of fraud are not enough. Intentional acts to deceive and deprive
another of his right, or in some manner injure him, must be specifically alleged and proved.
The affidavit of waiver in favor of Ines, being a public document duly acknowledged before a notary
public, under his hand and seal, with his certificate thereto attached, isprima facie evidence of the
facts stated therein.13Petitioners cannot impugn its validity by mere self-serving allegations. There
must be evidence of the clearest and most satisfactory character. Correlatively, in granting the
application of Ines Brusas for free patent, the Bureau of Lands enjoyed the presumption of regularity
in the performance of its official duties. This presumption has not been rebutted by petitioners as
there was likewise no evidence of any anomaly or irregularity in the proceedings which led to the
registration of the land.

Finally, as we are not trier of facts, we generally rely upon and are bound by the conclusions of the
lower courts, which are better equipped and have better opportunity to assess the evidence first-
hand, including the testimony of witnesses. We have consistently adhered to the rule that findings of
the Court of Appeals are final and conclusive, and cannot ordinarily be reviewed by this Court as
long as they are based on substantial evidence. Among the exceptions to this rule are: (a) when the
conclusion is grounded entirely on speculations, surmises or conjectures; (b) when the inference
made is manifestly mistaken, absurd or impossible; (c) where there is grave abuse of discretion; (d)
when the judgment is based on a misapprehension of facts; (e) when the findings of facts are
conflicting; and, (f) when the Court of Appeals, in making its findings, goes beyond the issues of the
case and the same is contrary to the admissions of both the appellant and appellee. We emphasize
that none of these exceptions is present in this case.

WHEREFORE, the petition is DENIED. The 16 July 1996 Decision of the Court of Appeals ordering
petitioners to vacate the disputed property and restore respondents in possession thereof, as well as
its 30 September 1996 Resolution denying reconsideration, is AFFIRMED. Costs against
petitioners.
1âwphi1.nêt

SO ORDERED.

SECOND DIVISION

G.R. NO. 118982. February 19, 2001

LORETA BRAVO CERVANTES, LOIDA CERVANTES, LEAH CERVANTES, CHRISTY

CERVANTES, CHARME CERVANTES, SPS. ARMANDO ABAD and ADORACION
ORDUNA, petitioners,
vs.
HON. COURT OF APPEALS, GUILLERMO (GIL) FRANCISCO, VENANCIO FRANCISCO,
APOLONIA FRANCISCO and VIRGINIA FRANCISCO, respondents.

DECISION
DE LEON, JR., J.:

Before us is a petition for review on certiorari of the Decision1 of the Court of Appeals dated August
25, 1994 affirming the decision 2 of the Regional Trial Court of Pangasinan in Civil Case No. 16211
(for Recovery of Land with Damages) ordering herein petitioners to vacate the respective parcel of
land which they are occupying and to recognize private respondents’ ownership thereof. 1âw phi 1.nêt

In dispute are certain portions of a parcel of land (Parcel 1, Lot No. 1, plan Psu-131830) situated in
Poblacion, Bugallon, Pangasinan, with an area of seven thousand seven hundred thirty-three (7,733)
square meters, covered and described in TCT No. 2200-Pangasinan and registered in the name of
Antonio G. Francisco. 3 A portion with an area of 3,768 square meters was earlier ceded to the
Municipality of Bugallon, Pangasinan. 4

On July 8, 1985, plaintiffs, herein private respondents, filed an amended complaint alleging that they
were the heirs of the late Antonio G. Francisco who was the registered owner of the subject
property, and that they recently discovered that the defendants, herein petitioners, were illegally
occupying and had declared in their names portions of said property as follows:

Antonio Cervantes – 398 square meters, declared under Tax Declaration No. 316, now Tax
Declaration No. 445;

Armando Abad and Adoracion Orduña - 442 square meters, declared under Tax Declaration No. 473
and assessed at P2,480.00.

Plaintiffs demanded that the defendants vacate the subject premises, but the latter refused to do
so. 5 Hence, this action for recovery of land wherein the plaintiffs prayed that the defendants be
ordered to (1) vacate immediately the portions of land that they are occupying and to recognize
plaintiffs’ ownership thereof; (2) pay reasonable rentals from the time this complaint was filed up to
the time they vacate the land; (3) pay actual damages amounting to P4,000.00 as reasonable
attorney’s fees, moral damages and the costs. 6

In his answer, defendant Antonio Cervantes, herein petitioner, denied the material allegations of the
complaint, and in defense claimed legal possession over one of the parcels of land in question
alleging that he, together with his brother Claro and sister Macrina-Teresita, inherited the land from
their late father Tranquilino Cervantes who purchased the same on January 22, 1947 from Juan
Abad, now deceased, who in turn earlier purchased the property from plaintiffs’ predecessors-in-
interest. During his lifetime, Tranquilino Cervantes introduced improvements in the land without any
objection from the plaintiffs or their predecessors-in-interest. By virtue of the Deed of Extrajudicial
Partition executed by the heirs of Tranquilino Cervantes, the ownership of the contested premises
were allegedly transmitted to them. In his counterclaim, Cervantes prayed that judgment be
rendered: (1) dismissing the complaint against him for lack of cause of action; (2) declaring the
validity of the Deed of Sale dated January 22, 1947; (3) ordering the plaintiffs, jointly and severally,
to pay him the sum of P5,000.00 as attorney’s fees; P5,000.00 as litigating expenses; P5,000 as
moral damages; P5,000.00 as exemplary damages, plus costs. 7

Defendants spouses Armando and Adoracion Abad, on the other hand, alleged that their
possession, together with that of their predecessors-in-interest, over the questioned parcel of land
was lawful and in the concept of owner. Their possession was for more than 70 years, even dating
back before the year 1920. The questioned parcel was a portion of the land jointly purchased by
their parent, the late Juan Abad, and Marcelino Nievera from Estefania Ignacio Vda. De F. Totañez,
who purchased the same from Antonio Fernandez, who in turn purchased the property from Vicente
Espino, whose possession and ownership of the property was public, exclusive, notorious, open and
continuous long before the alleged registration of the subject property in the name of Antonio
Francisco, under Act No. 496, the latter being known as a mere trustee or overseer. When Juan
Abad died, the defendant spouses acquired the subject property partly by inheritance and partly by
purchase. 8

Defendants Abad alleged that the imprescriptibility and indefeasibility of the Torrens Title do not
apply to the case at bar because registration by the applicant-registrant was done in bad faith and by
way of actual fraudulent acts; that Act No. 496 as amended by P.D. No. 1529 was never intended to
shield the fraudulent and unlawful acts of the applicant-registrant in order to divest the actual owner
and possessor thereof before the registration; and that between the actual owners-possessors
before the registration under Act No. 496 and a usurper-trustee who applied and successfully
registered the same land in his name, the former should prevail over the latter. 9

As counterclaim, defendants Abad prayed that the plaintiffs be ordered to pay them P10,000.00 as
attorney’s fees; appearance fees computed at P300.00 per hearing; P20,000.00 as actual and other
incidental expenses; P50,000.00 as moral damages; P50,000.00 as exemplary damages and costs
of suit. 10

Based on the Pre-trial Order dated July 8, 1985, the parties agreed that the issues are the following:

1. Who are the lawful owners of the parcels of land in question?

2. Whether or not the parties are entitled for damages as claimed in their respective pleadings. 11

On October 28, 1987, the trial court rendered judgment in favor of the plaintiffs, which in part reads:

Thus, this Court hereby declares that the plaintiffs are the owners of the parcels of land subject of
this action having acquired it from their late father, Antonio Francisco by hereditary succession.
Prescription and laches cannot be raised against the plaintiffs. If there is/are somebody who is/are
guilty of laches in this case, it would be the defendants. Because for a considerable long period of
time, they failed to obtain a title over the parcels in question.

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants, to
wit:

a) ordering the defendants to vacate immediately the parcel of land they are occupying, and to
recognize the plaintiffs’ ownership thereof; and

b) ordering the defendants to pay actual damages in the amount of P4,000.00 by way of reasonable
attorney’s fees and P10,000.00 by way of moral damages and to pay the costs.

SO ORDERED. 12

The Court of Appeals affirmed the decision of the trial court in its Decision promulgated on August
25, 1994, the dispositive portion of which reads:

WHEREFORE, finding no reversible error in the decision appealed herefrom the same is hereby
AFFIRMED in toto.

SO ORDERED. 13
Petitioners’ motion for reconsideration was denied by the Court of Appeals in a Resolution dated
February 13, 1995.

Petitioners ascribe to the Court of Appeals the following errors:

1. IT IS AN ERROR TO CONCLUDE THAT THE PLAINTIFFS, HEREIN PRIVATE

RESPONDENTS, ARE THE LAWFUL OWNERS OF THE LANDS IN QUESTION BASED
ON A DOUBTFUL MUTILATED ENTRY IN TCT NO. 2200.

2. IT IS AN ERROR (NOT) TO CONSIDER SUBSEQUENT ACTS OF THE PARTIES

AFTER THE SALE TO ASCERTAIN THE IDENTITY OF THE LAND SUBJECT OF THE
SALE.

3. IT IS AN ERROR NOT TO RECOGNIZE THE DEFENDANTS, HEREIN PETITIONERS,

AS LAWFUL OWNERS OF THEIR RESPECTIVE RESIDENTIAL LOTS. 14

Petitioners faulted the Court of Appeals for concluding that private respondents are the lawful
owners of the parcels of land in question based on a doubtful mutilated entry in TCT No. 2200.
Contrary to the conclusion of the Court of Appeals, petitioners asserted that as shown in the pre-trial
order, they did not admit the authenticity of Exhibits D, D-1 and D-2, which were the photocopy of
TCT No. 2200 in the name of Antonio Francisco. Further, the resolution of the issue of ownership of
the subject premises called for examination of the respective evidence of the parties. It is in this
connection that they questioned the correctness and authenticity of the mutilated portion on page 3
of TCT No. 2200 (Exhibit D) showing that their predecessor-in-interest, Vicente Espino, purchased
parcel 2 of Lot No. 3 instead of parcel 1 of Lot No. 1, where their respective houses were erected
fifty (50) years ago. They argued that under the entry “compraventa – Vicente Espino” on said page,
the true identity of the land sold was mutilated and it was made to appear in handwriting that Vicente
Espino purchased parcel 2 of Lot No. 3. There was no evidence adduced to show that the
handwritten words were the correct words before the mutilation, considering that the next entry
showed that one Pablo Zalazar also purchased the same parcel 2 of Lot No. 3.

As observed by the Court of Appeals, petitioners did not raise in issue the authenticity of the now
contested TCT No. 2200 or a portion thereof during the pre-trial and trial on the merits in the trial
court. An issue which was neither raised in the complaint nor ventilated during the trial in the court
below cannot be raised for the first time on appeal as it would be offensive to the basic rule of fair
play, justice and due process. 15 Moreover, the determination of issues at the pre-trial conference
bars the consideration of other questions on appeal. 16 Further, petitioners did not object to the formal
offer in evidence of TCT No. 2200 as Exhibit D and Series 17 and Exhibit F and Series; 18 hence, there
is a waiver of any objection to its admissibility. 19

Nevertheless, an examination of the evidence on record particularly Exhibits D-2 and F-2, which
contained the encumbrances affecting TCT No. 2200, showed that the sale to Vicente Espino
involved Lot No. 3, while the sale to Pablo Zalazar involved Lot No. 7. 20 Clearly, the sale to Vicente
Espino, the alleged predecessor-in-interest of the Abad spouses did not involve the parcel of land,
subject matter of this case, which is parcel 1, Lot 1, Plan Psu-131830.

Petitioners further argued that the private respondents’ inaction for 50 years showed that they were
not the owners of the subject parcels of land, and realty taxes were not paid by them. On the other
hand, petitioners, who are in physical possession of the lots have been paying their obligation as
landowners as shown by their respective tax declarations and tax receipts.
The argument of petitioners is without merit. It is a fundamental principle in land registration that the
certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in
favor of the person whose name appears therein, 21 in this case the private respondents’ father,
Antonio Francisco. A title once registered under the Torrens System cannot be defeated even by
adverse, open and notorious possession; neither can it be defeated by prescription. 22 Petitioners
cannot prove their ownership of the subject parcels of land through tax declarations and
corresponding tax receipts inasmuch as they are not conclusive evidence of ownership. 23

Further, the trial court found that defendant, herein petitioner Cervantes, had no right to the parcel of
land which he and his siblings were occupying, thus:

Taking into consideration the documentary evidence presented by the plaintiffs, particularly that of
TCT No. 2200 (Exhibit “A.”) which the parcel in question is included, among others, that the sale of
the parcel in question was made by Juan Abad to Tranquilino Cervantes (father of defendant
Antonio Cervantes) on January 22, 1947 took place when the said TCT No. 2200 was already
existing in the name of Antonio Francisco, the late father of the herein plaintiffs. Said TCT No. 2200
was issued on November 8, 1924, or more than twenty-two (22.) years before the aforesaid sale
between Juan Abad and Tranquilino Cervantes. This clearly shows that what Juan Abad sold to
Tranquilino Cervantes on January 22, 1947 was a parcel of land that did not belong to the former. It
is because said parcel of land already belonged to Antonio Francisco for having obtained a title over
said parcel of land covered by TCT No. 2200. Not being the owner of the parcel in question, Juan
Abad did not transmit any right whatsoever with respect to the parcel in question. Well-settled is the
rule that one cannot sell what he does not own and this rule has much force when the subject of the
sale is a titled land that belongs to another person. Simply put, the sale of the parcel in question
made by Juan Abad to Tranquilino Cervantes did not affect the title of Antonio Francisco over said
parcel. 24

Likewise, the trial court correctly held that defendants Abad had no right to the parcel of land they
were occupying, thus:

The purchases alleged by the defendants-spouses on the questioned parcel of land beginning from
their alleged primitive predecessor-in-interest Vicente Espino to Estefania Ignacio Vda. De F.
Totañez to Juan Abad and Marcelino Nievera were never proven in court. The documentary
evidence they presented before this Court were not sufficient to establish their right over the parcel
in question. The Deed of Extra-Judicial Partition of Real and Personal Property with Sale has no
probative value because it is self-serving. Besides, it sought to partition the parcel of land which is
already covered by TCT No. 2200 issued in the name of Antonio Francisco. Simply stated, there was
no property that they could partition among themselves because said property subject of the partition
did not belong to their late father Juan Abad but to the late Antonio Francisco, the father of the
plaintiffs.

The Deed of Absolute Sale (Exhibit “2.”) entered between Juan Abad and Tranquilino Cervantes,
has no probative value also for being irrelevant. Besides, this is the same deed wherein this Court
has already passed upon concerning its efficacy and ruled in the early part of this decision that it has
no effect whatsoever to TCT No. 2200 issued in the name of the late Antonio Francisco. 1âw phi 1.nêt

The Tax Declaration issued in the name of the defendants-spouses and the corresponding Tax
Receipts have no probative value also as against the TCT No. 2200 issued in the name of the late
Antonio Francisco. It is because they are not proofs of ownership. TCT No. 2200, on the other hand,
serves as evidence of an indefeasible title to the property in favor of the person whose name
appears therein—Antonio Francisco. Further, after the expiration of the one year period from the
issuance of the decree of registration upon which it is based, it becomes incontrovertible (Pamintuan
vs. San Agustin, 43 Phil. 558). 25

The Court of Appeals affirmed the decision of the trial court in toto, the same being in accordance
with law and the evidence. Hence, the assailed Decision of the Court of Appeals should be as it is
hereby affirmed.

WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision of the Court of
Appeals and its Resolution denying the motion for reconsideration are hereby AFFIRMED.

SO ORDERED.

FIRST DIVISION

G.R. No. 148180 December 19, 2001

CATALINA VDA. DE RETUERTO AS SURVIVING WIDOW OF THE LATE PANFILO RETUERTO;

LORETO RETUERTO, REPRESENTED BY HIS SURVIVING HEIRS NAMELY: ROMEO
RETUERTO; ANTONIA RETUERTO, NARCISA RETUERTO, CORAZON RETUERTO, AND
PATROCINIA RETUERTO; GAUDENCIO, FRANCISCA, CRUZ, FRANCISCO, EFIGENIA AND
GUILLERMO, ALL SURNAMED RETUERTO; AND SPOUSES JOSE AND ROSA
GESALEM, petitioners,
vs.
ANGELO P. BARZ AND MERLINDA BARZ, respondents.

KAPUNAN, J.:

This is a petition for review on certiorari of the decision of the Court of Appeals, dated December 29,
2000 in CA-GR CV No. 59975, affirming the decision of the Regional Trial Court, Branch 55, of
Mandaue City in a case for quieting of title with damages filed by herein respondents Angelo and
Melinda Barz against petitioners, as surviving heirs of the late Panfilo Retuerto. The RTC's decision
declared respondents as the absolute owners of the lot subject of the litigation.

The facts as found by the Court of Appeals and admitted by herein petitioners are as follows:

During the period from September to October, 1911, a survey was made of a parcel of land,
located in Mandaue, Cebu, identified as "Lot No. 896" of Plan No. II-5121, a part of the
"Hacienda de Mandaue" occupied by the Spouses Esteban Perez and Lorenza Sanchez.
The survey was amended during the period from November, 1926 to March 21, 1927,
identified as Amendment No. 2, Ap-6243, with an area of 20,486 square meters, bearing the
following boundaries:
 "Northwest — Lots 1251 and 1252 (Remigio Judilla and Manuel
Judilla);
Southeast — Lot 894 (Gregorio Perez);
Southwest — Lot 895;
Northwest — Lots 897 and 898 (Juan Perez)"

When the Spouses Esteban Perez and Lorenza Sanchez died intestate, their rights over the
property were inherited by their daughter, Juana Perez, married to Numeriano Barz, who
then declared the properly, for taxation purposes, under her name, under Tax Declaration
No. 21969, but with an area of only 13,160 square meters, more or less, bounded on the
north, by a piece of land, under the name of Pampila (sic) Retuerto, as follows:

North — Pampila Retuerto

South — Vidal Judilla and Catalina Ceniza
East — Paula Perez
West — Felipe Berdijo

On April 16, 1929, Juana Perez, widow of Numeriano Barz, executed a deed confirming her
execution of a "Deed of Absolute Sale," in favor of Panfilo Retuerto, married to Catalina
Ceniza, over a parcel of land, located in Barrio Pagsabungan, Mandaue, Cebu, identified as
Lot No. 896-A, a portion of the "Hacienda de Mandaue," Cebu, with an approximate area of
2,505 square meters, described as follows:

On the North — Remegio Judilla, measuring 29.72 sq.m.

On the East — Paula Perez, measuring 85.35 sq.m.
On the South — Juana Perez, measuring 29.72 sq.m.
On the West — Teofista Perez, measuring 84.32 sq.m.

However, on April 26, 1935, Panfilo Retuerto purchased the aforementioned parcel of land,
this time, from the Archbishop of Cebu, under a "Deed of Absolute Sale," for the price of
P150.00 (Exhibit "4") and declared the same for taxation purposes under Tax Declaration
No. 34652, effective 1937 (Exhibit "2").

In the meantime, the San Carlos Seminary in Cebu filed a Petition with the then Juzgado de
Primera Instancia in Cebu (now the Regional Trial Court) entitled and docketed "El
Seminario de San Carlos de Cebu," Solicitante, Expediente No. 3, G.L.R.O. Record 4030 for
the issuance of titles over several parcels of land in "Hacienda de Mandaue," including Lot
No. 896-A, earlier purchased by Panfilo Retuerto from Juana Perez and from the Archbishop
of Cebu. In August, 1937, the Court promulgated a Decision finding and declaring Panfilo
Retuerto the owner of the said lot (Exhibit "9"). On July 22, 1940, the Court issued an Order
directing the General del Registro de Terrenos (later the Land Registration Commission) for
the issuance of the appropriate Decree in favor of Panfilo Retuerto over the said parcel of
land. However, no such Decree was issued as directed by the Court because, by December
8, 1941, the Second World War ensued in the Pacific. However, Panfilo Retuerto failed to
secure the appropriate decree after the war.

Two (2) decades elapsed. In the meantime, Juana Perez Barz died intestate and was
survived by her son, Pedro Barz, who filed an application, with the then Court of First
Instance of Cebu, sometime in 1966, for the confirmation of his title over Lot 896 of Plan No.
II-5121, entitled and docketed as "IN THE MATTER OF THE REGISTRATION OF TITLE,
Pedro Barz, Applicant," Land Registration Case No. N-529, LRC Record No. N24736. The
Spouses Panfilo Retuerto did not file any opposition to the application. After appropriate
proceedings, the Court promulgated a decision in favor of Pedro Barz declaring him the
lawful owner of the said property. On August 18, 1966, Decree No. N-110287 was issued
over the property, in favor of Pedro Barz, on the basis of which Original Certificate of Title
No. 521 was issued, on November 13, 1968, by the Register of Deeds over the property
(Exhibit "A"). The property was then subdivided into four (4) lots namely, Lot 896-A, with an
area of 507 square meters (Exhibit "B-5"), Lot 896-B, with an area of 2,142 square meters
(Exhibit "B-6"), Lot 896-C, with an area of 5,580 square meters (Exhibit "B-7"), and Lot 896-
D, with an area of 12,253 square meters (Exhibit B-8"). On October 18, 1967, Pedro Barz
executed a "Deed of Absolute Sale" over subdivision Lot 896-C in favor of Jose Gesalem for
P7,000.00. On the basis of the said deed, Original Certificate of Title was partially cancelled
and, in lieu thereof, Transfer Certificate of Title No. 7509 was issued over said lot in favor of
the vendee.

In the interim, Panfilo Retuerto declared the property covered by Tax Declaration No. 34652,
under his name, under Tax Declaration No. 54960, effective 1974 (Exhibit "3").
Subsequently, Panfilo Retuerto died intestate, on December 29, 1975, and was survived by
his widow, Catalina Retuerto and their children, namely Gaudencio Retuerto, Loreto
Retuerto, Francisca Retuerto, Francisco Retuerto, Efigenia Retuerto and Guillerma Retuerto.
The said heirs executed, on January 4, 1976, "Extrajudicial Settlement and Sale of the
Estate of Panfilo Retuerto" adjudicating unto themselves, as owners, the said property and
deeding the same unto Loreto Retuerto a portion thereof, with an area of 1,703 square
meters, and the rest of the property, with an area of 440 square meters, to Efigenia Retuerto,
as follows:

"FOR OR TO LORETO RETUERTO: 'a portion of the above described parcel of land
containing an area of ONE THOUSAND SEVEN HUNDRED TWO (1,702) SQUARE
METERS and bounded by the following: on the Northeast by Pagsabungan Road; on
the Southeast by Lot 896; on the Northwest by Lot 897; and on the Southwest by the
portion sold to Efigenia Retuerto;

FOR OR TO EFIGENIA RETUERTO: 'a portion of the parcel of land described in

paragraph no. 7 hereof containing an area of FOUR HUNDRED FORTY (440)
SQUARE METERS and bounded as follows: on the Northeast by the portion sold to
Loreto Retuerto; on the Southeast by Lot 896; on the Northwest by Lot 897 and on
the Southwest by Lot 896." (at page 38, Records)

Loreto Retuerto and Efigenia Retuerto then declared the property, for taxation purposes,
under their names, under Tax Declaration No. 69084, effective 1976 (Exhibit "7"). The
property covered by Tax Declaration No. 69084 was subdivided into two (2) lots, one with an
area of 440 square meters, and the other, with an area of 1,702 square meters. Efigenia
Retuerto declared the property, with an area of 440 square meters, under her name, under
Tax Declaration No. 69083, effective 1976 (Exhibit "7-A") while Loreto Retuerto declared the
property, with an area of 1,702 square meters, for taxation purposes, under his name, under
Tax Declaration No. 01298 effective 1976. (Exhibit "7-B").

In the meantime, Pedro Barz died intestate and was survived by his heirs, Angelo P. Barz
and Merlinda Barz. Loreto Retuerto likewise, died intestate and was survived by his heirs,
namely, Romeo Retuerto, Antonia Retuerto, Narcisa Retuerto, Corazon Retuerto and
Patrocinia Retuerto.
 Ominously, the heirs of Panfilo Retuerto claimed ownership over subdivision Lot 896-B and a
part of subdivision Lot 896-A, covered by Original Certificate of Title No. 521 under the name
of Teofilo Barz. As it was, subdivision Lot 896-B was subdivided by the heirs of Panfilo
Retuerto, one of which subdivision lots, with an area of 440 square meters, was forthwith
sold to the Spouses Jose Gesalem and Rosa Gesalem. When apprised of the
aforementioned events, Angelo Barz and Merlinda Barz, the heirs of Teofilo Barz, and the
heirs of Panfilo Retuerto, including the Spouses Jose Gesalem had a confrontation during
which the Spouses Jose Gesalem admitted having purchased a portion of subdivision Lot
896-B with an area of 440 square meters.

On September 5, 1989, Angelo P. Barz and Merlinda Barz filed a complaint against Catalina
Retuerto and the other heirs of Panfilo Retuerto, including Loreto, who the Plaintiffs believed,
was still alive, and the Spouses Jose Gesalem, with the Regional Trial Court of Mandaue for
"Quieting of Title, Damages and Attorney's Fees." The Plaintiffs alleged, inter alia, that
subdivision Lots 896-A and 896-B were portions of Lot 896 subject of LRC 529 and covered
by Original Certificate of Title No. 521 under the name of Teofilo Barz after whose death, the
Plaintiffs inherited the property, despite which the Defendants claimed ownership over Lots
896-A and 896-B covered by Original Certificate of Title No. 521. x x x

Romeo Retuerto, Antonia Retuerto, Narcisa Retuerto, Corazon Retuerto, Patrocinia

Retuerto, the heirs of Loreto Retuerto, filed an Answer to the complaint alleging, inter alia, by
way of affirmative defense, that their father, Loreto Retuerto, was already dead and was
survived, by them as his heirs; what was sold to the Defendants Spouses Jose Gesalem was
a portion of Lot 896, with an area of 440 square meters, which was conveyed to Efigenia
Retuerto and not that portion of Lot 896-B deeded to Loreto Retuerto under the "Extrajudicial
Settlement of Real Property of Panfilo Retuerto, who was the lawful owner of the said
property, "that they were not aware of LRC Case No. 529 and/or that the property, sold by
Juana Perez to Panfilo Retuerto, had been included in Original Certificate of Title No. 521
under the name of Teofilo Barz. x x x

In their Answer to the complaint, the Defendants Spouses Jose Gesalem averred, inter alia,
by way of affirmative defense, that they purchased a portion of subdivision Lot 896-B, with an
area of 440 square meters, more or less; Lot 896-B (formerly Lot 896-A) which had been
sold by Juana Perez Barz to Panfilo Retuerto had been the subject of LRC Case No. 3
wherein Panfilo Retuerto was declared the lawful owner of the property; that the inclusion of
the subject property in Original Certificate of Title No. 521 issued to and under the name of
Teofilo Barz did not vest ownership over the title in favor of Pedro Barz but constituted the
latter merely as a trustee under a constructive trust with the concomitant obligation to convey
the said property to the Defendants Heirs of Panfilo Retuerto and to the Defendants
Spouses, as vendees of the said property; Plaintiffs' action was barred by laches. x x x

On April 3, 1997, the Regional Trial Court of Mandaue City promulgated its decision declaring herein
respondents as the absolute owners in fee simple of Lots 896-A and Lot 896-B; declaring the
documents adduced by herein petitioners unenforceable and ineffective against OCT No. 521;
nullifying the deed of sale between herein petitioners and the spouses Gesalem; and ordering herein
petitioners to vacate the premises of Lots 896-A and 896-B.1 The Court of Appeals, on December
29, 2000, affirmed the decision of the trial court except as to the award of attorney's fees which was
deleted.2

Hence, this appeal by the heirs of Panfilo Retuerto and the spouses Gesalem, assigning the
following errors:
 I

The Court of Appeals gravely erred in concluding that petitioners had only ten years from the
date of issuance of OCT No. 521, which erroneously included their Lot No. 896-A, within
which to ask for its reconveyance, in the light of their judicially declared and recognized
possession thereof since time immemorial.

II

The Court of Appeals erred in not finding that it was respondents' right to question
petitioners' ownership and possession over the subject property that has been lost thru
laches.

III

The Court of Appeals erred in concluding that petitioners could not ventilate their claim of title
over the subject property by way of affirmative defense as this would constitute collateral
attack on respondents' original certificate of title.

We do not find merit in the petition. Both the Court of Appeals and the Regional Trial Court correctly
applied the principles of the Torrens system of land registration to the present case.

It is a fundamental principle in land registration that a certificate of title serves as evidence of an

indefeasible and incontrovertible title to the property in favor of the person whose name appears
therein.3 Such indefeasibility commences after the lapse or expiration of one year from the date of
entry of the decree of registration.4 The act of registration is considered a constructive notice to all
persons5 respecting title to property; hence, after the lapse of one year, title to the property can no
longer be contested. This system was so effected in order to quiet title to land.

Records show that in 1966, an application for confirmation of title over Lot 896 was filed by Pedro
Barz, herein respondents' predecessor-in-interest, with the Court of First Instance of Cebu docketed
as LRC Case No. N-529. Thereafter, a decision declaring Pedro Barz as the lawful owner of the said
property was rendered by the court and consequently, an original certificate of title, OCT No. 521,
was issued in his name on November 13, 1968. Thus, after the lapse of one year, which was
November 13, 1969, private respondent's title to the property already became indefeasible and can
no longer be controverted.

Petitioners contest such title and claim that as early as 1929, their predecessor-in-interest, Panfilo
Retuerto, bought the property from Juana Perez Barz and that in 1937, the then Juzgado de Primera
Instancia de Cebu adjudicated said property to Panfilo Retuerto in GLRO Record No. 4030.
However, nowhere has it been shown that a decree of registration was ever issued affecting the
property

The alleged earlier sale of the subject property by petitioners' predecessor-in-interest to

respondents' predecessor-in-interest was not registered. Also, despite the alleged decision in 1937
by the Juzgado de Primero Justancia in favor of Panfilo Retuerto, the latter failed to intervene and
introduce the said decision in the petition for confirmation of title filed by Pedro Barz in 1966. Also,
since the issuance of OCT No. 521 in the name of Pedro Barz in 1968, no action had been taken by
petitioners directly attacking said title and seeking reconveyance of the property. It was only
sometime in 1989 or twenty-one (21) years later, when they were finally impleaded by private
respondents in an action for quieting of title that petitioners actively asserted ownership of the
subject property in their answer to the complaint.
Petitioners insist that despite the indefeasibility of private respondents' title, they can still maintain an
action for reconveyance of the said property on the ground of fraud pursuant to Section 32 of
Presidential Decree No. 1529. It is alleged that respondents' predecessor-in-interest, Pedro Barz
misrepresented with the land registration court that he inherited the whole of Lot 896 when in truth
and in fact a portion thereof designated as Lot 896-A had already been disposed of to Panfilo
Retuerto; hence, a constructive trust was created over the property for and in behalf of Panfilo
Retuerto and his heirs.

The contention is bereft of merit. Constructive trusts are created in equity to prevent unjust
enrichment, arising against one who, by fraud, duress or abuse of confidence, obtains or holds the
legal right to property which he ought not, in equity and good conscience, to hold.6 Petitioners failed
to substantiate their allegation that their predecessor-in-interest had acquired any legal right to the
property subject of the present controversy. Nor had they adduced any evidence to show that the
certificate of title of Pedro Barz was obtained through fraud.

Even assuming arguendo that Pedro Barz acquired title to the property through mistake or fraud,
petitioners are nonetheless barred from filing their claim of ownership. An action for reconveyance
based on an implied or constructive trust prescribes within ten years from the time of its creation or
upon the alleged fraudulent registration of the property.7Since registration of real property is
considered a constructive notice to all persons, then the ten-year prescriptive period is reckoned
from the time of such registering, filing or entering.8 Thus, petitioners should have filed an action for
reconveyance within ten years from the issuance of OCT No. 521 in November 16, 1968. This, they
failed to do so.

Relying on the case of Heirs of Jose Olviga vs. Court of Appeals,9 petitioners argue that the ten-year
period for filing an action for reconveyance of property arising from an implied or constructive trust
applies only when the person enforcing the trust is not in possession of the property, since if a
person claiming to be the owner is in actual possession of the property, the action to seek
reconveyance or to quiet title does not prescribe. Petitioners claim that they and their predecessors-
in-interest were the ones in actual possession of the subject property alleging that in the survey
made by Geodetic Engineer Leopoldo Tuastumban, it was reported that there were "nine houses
and one rattan shop owned by the heirs of Loreto Retuerto constructed thereon."10

Again, the contention does not persuade us. In the 1966 decision of the Land Registration Court in
LRC No. 529, it was found that Pedro Barz, private respondents' predecessor-in-interest, was the
lawful owner of the subject property as he and his predecessors-in-interest had been in peaceful,
continuous and open possession thereof in the concept of owner since 1915. Said court declared
that:

Lot 896: This lot is covered by Tax Declaration No. 21969 in the name of Juana Perez, Exh.
"O-Pedro Barz," containing an area of 20,486 sq. meters. It originally belonged to the
spouses Esteban Perez and Lorenza Sanchez. After their death, the same was inherited by
Juana Perez who died in 1942 and was succeeded by her lone heir son Pedro Barz, Filipino
citizen, married to Teofila Pedroza and resident of Mandaue, Cebu. Juana Perez owned and
possessed this lot since 1915 up to her death in 1942 when Pedro Barz reached the age of
consciousness or when he was around 8 years old; that her possession had been peaceful,
continuous, open and in concept of owner. From 1942 up to the present, the possession of
Pedro Barz over this property had been likewise peaceful, continuous and in concept of
owner as he was religious in the payment of real estate taxes, as shown in Exh. "N-2 Pedro
Barz."11
As previously stated, no action for reconveyance has been filed by herein petitioners. They
interposed their claim of ownership for the first time in their Answer and by way of Affirmative
Defenses to the complaint for quieting of title filed by herein respondents in 1989. This cannot be
allowed. Under Section 48 of PD 1529 or the Property Registration Decree, "a certificate of title
cannot be subject to collateral attack; it cannot be altered, modified or cancelled except in a direct
proceeding."12 The issue of the validity of title, i.e., whether or not it was fraudulently issued, can only
be raised in an action expressly instituted for that purpose.13

WHEREFORE, the Decision of the Court of Appeals dated December 29, 2000 in CA-GR CV No.
59975 is hereby AFFIRMED.

SO ORDERED.