MATTHEWS VS.

TAYLOR

FACTS:

On June 30, 1988, Benjamin Taylor (Benjamin), a British subject, married Joselyn Taylor , a 17-year old Filipina. On June 9, 1989, while
their marriage was subsisting, Joselyn bought a 1,294 square-meter lot in Boracay, for and in consideration of P129,000.00. The sale
was allegedly financed by Benjamin. They constructed improvements thereon and eventually converted the property to a vacation and
tourist resort, also using Benjamin’s funds.

All required permits and licenses for the operation of the resort were obtained in the name of Ginna Celestino, Joselyn’s sister. However,
Benjamin and Joselyn had a falling out, and Joselyn ran away with Kim Philippsen.

Joselyn executed a Special Power of Attorney (SPA) in favor of Benjamin, authorizing the latter to maintain, sell, lease, and sub-lease
and otherwise enter into contract with third parties with respect to their Boracay property. On July 20, 1992, Joselyn as lessor and
petitioner Philip Matthews as lessee, entered into an Agreement of Lease involving the Boracay property for a period of 25 years, with an
annual rental of P12,000.00. The agreement was signed by the parties and executed before a Notary Public. Petitioner thereafter took
possession of the property and renamed the resort.

Claiming that the Agreement was null and void since it was entered into by Joselyn without his (Benjamin’s) consent, Benjamin instituted
an action for Declaration of Nullity of Agreement of Lease with Damages against Joselyn and the petitioner. Benjamin claimed that his
funds were used in the acquisition and improvement of the Boracay property, and coupled with the fact that he was Joselyn’s husband,
any transaction involving said property required his consent.

ISSUE:

Whether or not an alien husband nullify a lease contract entered into by his Filipina wife bought during their marriage?

RULING:

NO! The rule is clear and inflexible: aliens are absolutely not allowed to acquire public or private lands in the Philippines, save only in
constitutionally recognized exceptions. There is no rule more settled than this constitutional prohibition, as more and more aliens attempt
to circumvent the provision by trying to own lands through another.

In a long line of cases, we have settled issues that directly or indirectly involve the above constitutional provision. We had cases where
aliens wanted that a particular property be declared as part of their father’s estate; that they be reimbursed the funds used in purchasing
a property titled in the name of another; that an implied trust be declared in their (aliens’) favor; and that a contract of sale be nullified for
their lack of consent.

Benjamin has no right to nullify the Agreement of Lease between Joselyn and petitioner. Benjamin, being an alien, is absolutely prohibited
from acquiring private and public lands in the Philippines. Considering that Joselyn appeared to be the designated “vendee” in the Deed
of Sale of said property, she acquired sole ownership thereto. This is true even if we sustain Benjamin’s claim that he provided the funds
for such acquisition. By entering into such contract knowing that it was illegal, no implied trust was created in his favor; no reimbursement
for his expenses can be allowed; and no declaration can be made that the subject property was part of the conjugal/community property
of the spouses.

In any event, he had and has no capacity or personality to question the subsequent lease of the Boracay property by his wife on the
theory that in so doing, he was merely exercising the prerogative of a husband in respect of conjugal property. To sustain such a theory
would countenance indirect controversion of the constitutional prohibition. If the property were to be declared conjugal, this would accord
the alien husband a substantial interest and right over the land, as he would then have a decisive vote as to its transfer or disposition.
This is a right that the Constitution does not permit him to have.

LAUSA VS. QUILATON

FACTS:

The main issue in the present case involves the title to Lot No. 557, a parcel of land situated in V. Ranudo and D. Jakosalem Streets,
Cogon Central, Cebu City.

The petitioners and the respondents are relatives residing in Lot No. 557.

Petitioners Filadelfa T. Lausa, Loreta T. Torres, Primitivo Tugot, and Anacleto T. Caduhay are the cousins of respondents Rodrigo Tugot,
Purificacion Codilla, Teofra Sadaya, and Estrellita Galeos; while Mauricia Quilaton is the respondents' mother and the petitioners' aunt-
in-law.

The respondent Rosita T. Lopez, on the other hand, acquired the rights of Rodrigo when he mortgaged Lot No. 557-A, a portion of Lot
No. 557, to her. Rodrigo subsequently defaulted on his loan.

The petitioners and respondents, with the exception of Mauricia and Rosita, are all grandchildren of Alejandro Tugot. Alejandro had
possessed Lot No. 557 since September 13, 1915, after it was assigned to him by Martin Antonio.
Lot No. 557 formed part of the Banilad Friar Estate Lands, which had been bought by the government through Act No. 1120 for distribution
to its occupants. Antonio had initially been Lot No. 557's beneficiary, but subsequently assigned his rights over Lot No. 557 to Alejandro.

Since then, Alejandro possessed Lot No. 557 until his death; thereafter, his children and grandchildren continued to reside in the lot. The
present controversy arose when the respondents, claiming to be its registered owners, attempted to eject the petitioners from Lot No.
557.

On January 1993, Mauricia filed before the RTC of Cebu City Branch 17 a petition for the issuance of a new owner's duplicate of TCT
No. 571, which purportedly covers Lot No. 557. Mauricia claimed to own TCT No. 571, but lost her owner's duplicate during a strong
typhoon sometime in 1946. The RTC, after due hearing, granted Quilaton's petition and directed the issuance of a new owner's duplicate
of TCT No. 571.

On September 27, 1994, Mauricia donated Lot No. 557 to her children Rodrigo, Purificacion, Teofra and Estrellita. Thus, TCT No. 571
was cancelled, and re-issued as TCT Nos. 130517, 130518, 130519, 130520 and 130521 in the names of Mauricia's children.[1]

Mauricia's children subsequently performed several acts of ownership over Lot 571: first, Rodrigo, on March 23, 1995, mortgaged TCT
No. 130517 to Lopez as security for a loan he obtained from the latter. Rodrigo subsequently defaulted on his loan, prompting the
foreclosure of TCT No. 130517. The land covered by TCT No. 130517 was thereafter sold by public auction to Lopez, for which she was
issued TCT No. 143511 on March 31, 1997.

Second, Mauricia's children filed a complaint for ejectment against the petitioners, docketed as Civil Case No. R-35137, on August 4,
1995.

In response, the petitioners filed Civil Case No. CEB-17857 for the annulment of TCT No. 571 and the subsequent titles that originate
from TCT No. 571, as well as criminal complaints[2] for falsification and perjury against the respondents.

The Regional Trial Court's ruling

The RTC found TCT No. 571 to be a forgery, and declared it and all titles originating from it to be null and void ab initio . On Appeal, the
CA reversed the RTC's decision, and upheld the validity of TCT No. 571 and all the titles originating from it.

In upholding the validity of TCT No. 571 (and all the titles originating from it), the CA emphasized the existence of a copy of TCT No. 571
in the custody of the Office of the Register of Deeds of Cebu City, and noted that it is presumed by law to have been issued in a regular
manner. The application of this presumption is called for by the purpose of the Torrens system, which is to promote the stability and
integrity of land titles.

According to the CA, the petitioners have failed to disprove this presumption of regularity. The pieces of evidence that the petitioners
presented (i.e., the tax receipts and Antonio's Deed of Assignment of Lot No. 557 to Alejandro) do not prove with clear, positive, and
convincing evidence that TCT No. 571 had been fraudulently issued. The payment of real estate taxes over Lot No. 557 does not prove
ownership. The Deed of Assignment, on the other hand, had been subsequently cancelled, as shown by the Friar Lands Sale Certificate
Register on file with the DENR. It proves that the lot had been earlier assigned to Alejandro, but because the assignment was canceled,
the ownership of Lot No. 557 remained with Antonio.

The CA also noted that the lot that Alejandro appears to have owned was not Lot No. 557 but Lot No. 357. The description of Lot No. 557
- as set forth by the petitioners in their original complaint - substantially varies from the actual and precise technical description of Lot No.
557. Additionally, some of the documentary evidence in the case (such as tax declarations, tax receipts and notices of tax delinquency)
show that what Alejandro owned was Lot No. 357, not Lot No. 557.

The CA also pointed out that Alejandro could not have acquired Lot 557 through acquisitive prescription for two reasons: first, Mauricia
had been in possession of the property since 1946; and second, a lot registered under the Torrens system cannot be acquired through
acquisitive prescription. Records show that the lands comprising the Banilad Friar Lands Estate, of which Lot No. 557 was a part, had
been brought under the operation of the Torrens system on September 23, 1913.

The CA found Lopez to be an innocent purchaser for value. Applying the Court's ruling in Bank of the Philippine Islands v. Noblejas, the
CA held that Lopez's good faith as a mortgagee extends to her eventual purchase of the lot during its foreclosure. Since TCT No. 130517
had no notice of any adverse claim at the time it was mortgaged to Lopez, then the subsequent annotation of Notice of Lis Pendens prior
to TCT No. 130517's foreclosure should not affect her status as a mortgagee-in-good-faith. The clean title presented to Lopez at the time
TCT No. 130517 was mortgaged to her maintains this status at the time of its foreclosure, and cannot be prejudiced by the subsequent
annotation of a claim to it before the lot is foreclosed.

Lastly, the CA found that the RTC erred when it did not immediately dismiss the petitioners' complaint, as their cause of action had been
barred by prescription and laches. An action for the annulment of title to land prescribes in ten years. The petitioners filed their complaint
only on September 20, 1995, almost fifty years after Mauricia had been issued TCT No. 571 on July 16, 1946. Thus, the petitioners had
slept on their claimed right over Lot 557; consequently, they are now barred by laches from seeking redress before the courts.

The petitioners filed a motion for reconsideration assailing the CA's decision, which motion the CA denied. The denial opened the way
for the present petition for review on certiorari before this Court.
ISSUES:

(1)
Whether the CA erred in finding that the lot that the petitioners claim to own covers Lot No. 357, and not Lot No. 557;
(2)
Whether the CA erred in finding that the respondents, and not the petitioners, are the owners and possessors of Lot No. 557;
(3)
Whether the CA erred in finding Lopez an innocent purchaser in good faith; and
(4)
Whether the CA erred in finding the petitioners' cause of action to have been barred by prescription and laches.

The Court's Ruling

We find the petition meritorious.

We note at the outset that the Court is not a trier of facts, and our jurisdiction in cases brought before us from the appellate court is limited
to the review of errors of law.

We have, however, recognized several exceptional situations that call for a re-evaluation of the CA's factual conclusions, among them,
the situation when the CA's findings are contrary to that of the trial court, and when the CA manifestly overlooks relevant facts not disputed
by the parties and which, if properly considered, would lead to a different conclusion.[3]

We find these circumstances in the present case, prompting us to re-examine the records of the case and to reverse the CA's decision
after due consideration of the records.

The CA erred in finding that the lot that the petitioners claim to own is Lot No. 357, and not Lot No. 557

The CA, in upholding the validity of Mauricia's title and ownership over Lot No. 557, pointed out that the lot that Alejandro claimed to own
was not Lot No. 557, but Lot No. 357.

The CA based this conclusion on several tax documents in the name of Alejandro Tugot, which indicate that the lot covered is Lot No.
357, and not Lot No. 557.

In so doing, the CA overlooked several key pieces of evidence presented before the RTC, which had led the latter to conclude that the
designation of Lot No. 357 in Alejandro's tax declarations actually pertained to Lot No. 557. These pieces of evidence are as follows:

First, the testimony of Mr. Antonio Abellana of the City of Cebu Assessor's Office established that he issued a Certification of Correction
to change Alejandro's tax declarations, which initially covered Lot No. 357, to Lot No. 557.

According to Abellana, Lot No. 357 is located in a barangay different from the address found in Alejandro's tax declaration. The base map
of Cebu locates Lot No. 357 to be in Barangay Day-as, almost five meters from Sikatuna Street, while the address in Alejandro's erroneous
tax declaration indicates that Lot No. 357 is located in Jakosalem Street.

Second, records of the Cebu City Assessor's Office show that Lot No. 357 is covered by another tax declaration with an address
corresponding to the city's base map. In this tax declaration, Lot No. 357 is owned by a certain Antonio Yap.

Third, the deed of donation[4] of Lot No. 558, which adjoins Lot Nos. 557 and 559, recognized Alejandro Tugot as the owner of Lot No.
557.

We find that these pieces of evidence sufficiently explain that the lot in Alejandro and Aurea's tax declarations actually covered Lot No.
557, and its initial designation as Lot No. 357 was an error. The Assessor's Office of Cebu City, which had the responsibility of classifying,
appraising, and assessing real property in Cebu, had acknowledged this designation to be erroneous, and subsequently made
rectification. This acknowledgment is not only entitled to the presumption of regularity; it is also corroborated by the Deed of Donation of
an adjoining lot.

Additionally, we also found other pieces of evidence supporting the conclusion of the Cebu City Assessor's Office. The tax declarations
in Alejandro and (subsequently) Aurea's names indicate that they covered the same address as the Lot No. 557 described in the Deed
of Assignment that Antonio executed in Alejandro's favor in 1915. The identity of the addresses in these two documents show that what
the petitioners intended to pay real property tax for, was the lot covered in the Deed of Assignment, which was Lot No. 557. Thus, the tax
declarations that placed Lot No. 357 under Alejandro's name actually pertained to the lot covered by Lot No. 557; its designation as
covered by Lot No. 357 was an error that the Cebu City Assessor's Office eventually discovered and corrected.

In the same vein, the court-approved subdivision plan for Lot No. 557 indicated it to be found along Jakosalem Street, the address of the
lot covered by Alejandro and Aurea's tax declarations. The plan was commissioned for Alejandro and his children, including Romualdo
(Mauricia's husband and the father of her children), in 1960. That the address of Lot No. 557 in the subdivision plan is identical to the
address in Alejandro and Aurea's tax declarations establishes that what they actually claim to own is Lot No. 557, and not Lot No. 357.

With this foundation established, we now resolve the issue of who among them have the better right over Lot No. 557.
The CA erred in finding that the petitioners failed to prove that TCT No. 571 is a fabricated title

In upholding the validity of Mauricia's TCT No. 571, the CA held that the petitioners failed to overcome the presumption of regularity that
attended its issuance. The CA emphasized that a copy of TCT No. 571 is currently with the Register of Deeds, and that the documents
that the petitioners presented do not prove their ownership over the lot.

The CA's conclusion, however, overlooked the evidence that the petitioners presented before the RTC to prove that TCT No. 571 is a
fabricated title. These pieces of evidence include the TCTs issued immediately before and after TCT No. 571; TCT No. 16534 (the TCT
from which TCT No. 571 allegedly originated); and several TCTs that contain the signature of the Acting Register of Deeds who signed
TCT No. 571. Taken together, all these pieces of evidence sufficiently prove, by preponderance of evidence, that TCT No. 571 is a
fabricated title.

We cite with approval the RTC's factual observations and conclusions, viz:

First, the text of TCT No. 571 contains glaring discrepancies with TCT No. 16534, the title indicated in TCT No. 571 as its precursor.

TCT No. 16534 covered a different area from TCT No. 571. TCT No. 16534 covered Lot 7005-E-2, which has an area of 3,311 square
meters, while TCT No. 571 covers Lot No. 557 with an area of 525 square meters. Too, TCT No. 16534 was issued in September 1957,
or almost ten years after the title it supposedly gave rise to was issued in 1946.

Second, TCT No. 571 contains discrepancies when compared with TCT Nos. 570 and 572, the TCTs that were supposedly issued before
and after TCT No. 571. These discrepancies are as follows:

(i)
TCT Nos. 570 and 572 had both been issued on February 26, 1947, almost a year after TCT No. 571 was issued on July 16, 1946. Since
TCT No. 571 was an intervening title between TCT No. 570 and 572, then it should have also been issued on February 26, 1947.
(ii)
TCT No. 571 used an old form, Judicial Form No. 140-D, which was revised in June 1945 by Judicial Form No. 109. Since TCT No. 571
shows that it was issued in 1946, then it should have used Judicial Form No. 109. Notably, both TCT Nos. 570 and 572 used the updated
Judicial Form No. 109, as they were issued in 1947.
(iv)
TCT Nos. 570 and 572 were signed by Martina L. Arnoco as Register of Deeds, while TCT No. 571 was signed by Gervasio Lavilles as
Acting Register of Deeds.
(v)
There are distinct differences in Lavilles' signature as it appears in TCT No. 571, compared with his signatures in other TCTs, such as
TCT Nos. 525 and 526.

Additionally, we note that Mauricia's claim that she bought Lot No. 557 from Antonio is contradicted by the contents of TCT No. 16534.

For a new TCT to be issued, the owner's duplicate of the seller should have been surrendered to the Registry of Deeds, along with a
copy of the TCT's Deed of Sale. Thus, the seller's TCT would be cancelled, and the new TCT of the buyer would indicate the seller's TCT
as its TCT of origin.

The text of TCT No. 571 shows that it originated from TCT No. 16534. If indeed TCT No. 571 was issued to Mauricia because the latter
bought Lot No. 557 from Antonio, then TCT No. 16534 should have reflected this transaction.

However, instead of reflecting Antonio's title to Lot No. 557, TCT No. 16534 shows that it pertained to a different lot, and had been issued
ten years after the issuance of TCT No. 571 to a certain Crispina Lopez.

The original certificate of title from which TCT No. 571 and TCT No. 16534 originated are also different: TCT No. 571 originated from
Original Certificate of Title (OCT) No. 251-253, while TCT No. 16534 originated fromOCTNo. 11375.

These discrepancies, taken together with its variations from the other titles issued around the same time and Mauricia's failure to present
proof of how she acquired the lot from Antonio, reasonably establish that TCT No. 571 is a fabricated title.

We now proceed to determine whether Alejandro was Lot No. 557's rightful owner.

The CA erred in relying on a fabricated title as basis to deny Alejandro's claim to acquisitive prescription

The CA, in reversing the RTC's decision recognizing Alejandro's ownership over Lot No. 571, held that Lot No. 557 could no longer be
acquired through prescription because it had already been brought under the Torrens system, in Registry Book No. A-3.

Registry Book No. A-3 refers to the registry book where OCT No. 251-253 is registered, as indicated in TCT No. 571. Thus, the CA
concluded that Lot No. 557 has been brought under the Torrens system because TCT No. 571 is already covered by the system. But as
TCT No. 571 is a fabricated title, the CA erred in relying on its contents to conclude that Lot No. 557 has already been brought under the
Torrens system.

Alejandro Tugot did not acquire Lot No. 557 through acquisitive prescription
We agree with the CA's conclusion that Lot No. 557 cannot be acquired through prescription, but for a different reason.

In the present case, the Deed of Assignment between Antonio and Alejandro was cancelled three months after it was executed. The
Deed, executed on September 13, 1915, was inscribed with the phrase: "Cancelled December 21, 1915. See letter # 12332."

Both the trial court and the CA found this inscription to be sufficient proof that the Deed of Assignment had been cancelled three months
after its execution. As a consequence, the Deed of Assignment could not have vested Antonio's rights over Lot No. 557 to Alejandro.

Thus, Lot No. 557 reverted to its original status after the Deed of Assignment was cancelled. It remained subject to the conditional sale[5]
between the government and Antonio; under the Certificate of Sale between the Bureau of Lands and Antonio, the government should
transfer title to Lot No. 557 to Antonio upon full payment of the lot's purchase price.

The nature of the contract of sale between Antonio and the government is in line with Section 15 of Act No. 1120, which provides for the
administration, temporary lease, and sale of friar lands that the government bought through sections 63 to 65 of "An Act temporarily to
provide for the administration of the affairs of civil government in the Philippine Islands, and for other purposes." These friar lands included
the Banilad Estate Friar Lands, from where Lot No. 557 originated.

Section 15 of Act No. 1120 that applied to Lot No. 557 provides:
Sec. 15. The Government hereby reserves the title to each and every parcel of land sold under the provisions of this Act until the full
payment of all installments or purchase money and interest by the purchaser has been made, and any sale or encumbrance made b y
him shall be invalid as against the Government of the Philippine Islands and shall be in all respects subordinate to its prior claim.

xxxx
According to jurisprudence, Section 15 of Act No. 1120 reserves to the government the naked title to the friar lands, until its beneficiaries
have fully paid their purchase price. Since the intent of Act No. 1120 was to transfer ownership of the friar lands to its actual occupants,
the equitable and beneficial title to the land passes to them the moment the first installment is paid and a certificate of sale is issued. This
right is subject to the resolutory condition that the sale may be rescinded if the agreed price shall not be paid in full.

When the Certificate of Sale was executed, Antonio obligated himself to pay P9.00 as the final installment to purchase Lot No. 557. His
previous lease payments to the lot were applied as initial installments for the payment of the lot's purchase price of PI5.16. Upon full
payment of the installment and its annual 4% interest, the government was bound to transfer full ownership of Lot No. 557 to Antonio
under Section 122 of Act No. 496.

While the records of the case do not show any documents or paper trail showing the actions of the parties to the Certificate of Sale after
the Deed of Assignment was cancelled, we can, with certainty, rule out the possibility that Alejandro acquired title to it through prescription.

Three scenarios could have happened after the Deed of Assignment was cancelled - all of which forego the possibility of acquisitive
prescription.

First, Antonio could have completed payment of the purchase price of Lot No. 557. Upon full payment, the lot would have then been
registered in Antonio's name.

The Certificate of Sale between Antonio and the government requires registration under Section 122 of Act No. 496, or the Land
Registration Act of 1902, for the ownership over Lot No. 557 to be transferred to Antonio. Section 122 of Act No. 496 provides:
Section 122. Whenever public lands in the Philippine Islands belonging to the Government of the United States or to the Government of
the Philippine Islands are alienated, granted, or conveyed to persons or to public or private corporations, the same shall be brought
forthwith under the operation of this Act and shall become registered lands. It shall be the duty of the official issuing the instrument of
alienation, grant, or conveyance in behalf of the Government to cause such instrument, before its delivery to the grantee, to be filed with
the register of deeds for the province where the land lies and to be there registered like other deeds and conveyances, whereupon a
certificate shall be entered as in other cases of registered land, and an owner's duplicate certificate issued to the grantee. The deed,
grant, or instrument of conveyance from the Government to the grantee shall not take effect as a conveyance or bind the land, but shall
operate as a contract between the Government and the grantee and as evidence of authority to the clerk or register of deeds to make
registration. The act of registration shall be the operative act to convey and affect the lands, and in all cases under this Act registration
shall be made in the office of the register of deeds for the province where the land lies. The fees for registration shall be paid by the
grantee. After due registration and issue of the certificate and owner's duplicate such land shall be registered land for all purposes under
this Act.
Thus, the government could have registered the title to Lot No. 557 in Antonio's name only after he had paid the purchase price in full.
Had Antonio eventually completed the payment of Lot No. 557's purchase price, it would have been registered under the Torrens system,
through Section 122 of Act No. 496.

Land registered under the Torrens system cannot be acquired through prescription. As early as 1902, Section 46 of Act No. 496
categorically declared that lands registered under the Torrens system cannot be acquired by prescription, viz:
Section 46. No title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession.
Second, Antonio could have failed to complete payment of Lot No. 557's purchase price; thus, the naked title to Lot No. 557 remains with
the government.

Under Act No. 1120, the Chief of the Bureau of Public Lands is required to register title to the friar lands acquired by the government
through Act No. 496. Section 6 of Act No. 1120, in particular, provides:
SECTION 6. The title, deeds and instruments of conveyance pertaining to the lands in each province, when executed and delivered by
said grantors to the Government and placed in the keeping of the Chief of the Bureau of Public Lands, as above provided, shall be by
him transmitted to the register of deeds of each province in which any part of said lands lies, for registration in accordance with law. But
before transmitting the title, deeds, and instruments of conveyance in this section mentioned to the register of deeds of each province for
registration, the Chief of the Bureau of Public Lands shall record all such deeds and instruments at length in one or more books to be
provided by him for that purpose and retained in the Bureau of Public Lands, when duly certified by him shall be received in all courts of
the Philippine Islands as sufficient evidence of the contents of the instrument so recorded whenever it is not practicable to produce the
originals in court.
The law on land registration at that time was Act No. 496, which established the Torrens system in the Philippines. As earlier pointed out,
a piece of land, once registered under the Torrens system, can no longer be the subject of acquisitive prescription.

No certificate of title pertaining to the government's transfer of ownership of Lot No. 557 was ever presented in evidence. Assuming,
however, that the Chief of the Bureau of Public Lands failed to register Lot No. 557, the lot could not have been acquired by Alejandro
through prescription, under the rule that prescription does not lie against the government.

Third, Antonio could have sold his rights to Lot No. 557 to another person. Assuming he did, only that person could have stepped into his
shoes, and could have either completed payment of the purchase price of Lot No. 557 and had it registered in his name; or, he could
have failed to pay the purchase price in full, in which case the naked title to the lot remains government property.

In all three scenarios, Alejandro could not have acquired ownership over Lot No. 557 through prescription.

Republic Act No. 9443 and the friar lands

The Court is not unaware of the enactment of Republic Act No. 9443, which confirms the validity of titles covering any portion of the
Banilad Friar Lands with Certificates of Sale and Assignment of Sale that do not contain the signature of the then Secretary of the Interior
and/or Chief of the Bureau of Public Lands. It does not apply to TCTs that have been fraudulently issued and registered.

Republic Act No. 9443, however, does not validate any of the parties' claims of ownership over Lot No. 557.

Mauricia's title, as earlier established, is fabricated; thus, her situation falls within the exception expressed under Section 1 of RA No.
9443, viz:
This confirmation and declaration of validity shall in all respects be entitled to like effect and credit as a decree of registration, binding the
land and quieting the title thereto and shall be conclusive upon and against all persons, including the national government and all branches
thereof; except when, in a given case involving a certificate of title or a reconstituted certificate of title, there is a clear evidence that such
certificate of title or reconstituted certificate of title was obtained through fraud, in which case the solicitor general or his duly designated
representative shall institute the necessary judicial proceeding to cancel the certificate of title or reconstituted certificate of title as the
case may be, obtained through such fraud.
With respect to Alejandro, his claim to Lot No. 557 rests on the Deed of Assignment executed between him and Antonio, which had been
cancelled; hence, it cannot be confirmed through Republic Act No. 9443.

Effects of the nullity of TCT No. 571

After establishing that neither Mauricia nor Alejandro has title over Lot No. 557, we now resolve the validity of the TCTs that originated
from TCTNo. 571.

As a general rule, a person transmits only the rights that he possesses. When innocent third persons, however, purchase or acquire rights
over the property relying on the correctness of its certificate of title, courts cannot disregard the rights they acquired and order the
cancellation of the certificate. As the third paragraph of section 53 of Presidential Decree No. 1529, otherwise known as the Property
Registration Decree, provides:
Section 53. xxx
xxxx

In all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies against the parties to such fraud
without prejudice, however, to the rights of any innocent holder for value of a certificate of title. After the entry of the decree of registration
on the original petition or application, any subsequent registration procured by the presentation of a forged duplicate certificate of title, or
a forged deed or other instrument, shall be null and void.
Thus, innocent purchasers in good faith may safely rely on the correctness of the certificate of title issued therefor, and neither the law
nor the courts can oblige them to go behind the certificate and investigate again the true condition of the property. They are only charged
with notice of the liens and encumbrances on the property that are noted on the certificate.

Jurisprudence defines innocent purchaser for value as "one who buys the property of another, without notice that some other person has
a right or interest in such property and pays a full price for the same, at the time of such purchase or before he has notice of the claims
or interest of some other person in the property."

PD 1529 has expanded the definition of an innocent purchaser for value to include an innocent lessee, mortgagee, or other encumbrancer
for value.
Neither PD 1529 nor jurisprudence, however, has included an innocent donee to the definition, and for good reason. An innocent
purchaser for value pays for the full price of the property, while a donee receives the property out of the donor's liberality. Additionally,
what the law does not include, it excludes, and a donee is not included in the expansion of the term innocent purchaser for value.

Applying these principles of law in the case at hand, we hold that the Deed of Donation Mauricia issued in favor of her children immediately
after getting a copy of TCT No. 571 could not have transferred ownership over Lot No. 557 to her children. Since TCT No. 571 is a
fabricated title, it does not indicate ownership over Lot No. 557; thus, the Deed of Donation involving TCT No. 571 could not have
conveyed the ownership of Lot No. 557 to Mauricia's children.

Neither could her children claim the status of an innocent purchaser in good faith, as they received the property through donation.

The TCTs issued to Mauricia's children pursuant to the donation should thus be cancelled, as they do not signify ownership over Lot No.
557.

We also note several circumstances that cast doubt over the ignorance of Mauricia's children regarding the fabricated nature of TCT No.
571, viz: (1) the petitioners are their close relatives, who have been residing in Lot No. 557 as early as 1928; (2) their father, Romualdo,
signed and recognized a subdivision plan of Lot No. 557 that would divide the lot among all of Alejandro's heirs, including the petitioners;
(3) their mother executed the deed of donation as soon as she acquired a copy of TCT No. 571; (4) their mother's nonpayment of taxes
due Lot No. 557 since 1946; and (5) the payment of real property taxes only to facilitate the subdivision of Lot No. 557 among them.

Lopez is not an innocent purchaser for value of Lot 5 57-A

We now determine Lopez's claim that she is an innocent purchaser for value of Lot No. 557-A, and should thus be allowed to keep her
title over it.

The CA, in affirming Lopez's title over Lot No. 557-A, held that she was an innocent mortgagee for value. According to the CA, TCT No.
130517 had no encumbrances and liens at the time it was mortgaged to Lopez, and this status extended to the time that TCT No. 130517
was foreclosed to answer for Rodrigo's loan.

We cannot agree with the CA's conclusion.

As a general rule, a person dealing with registered land has a right to rely on the Torrens certificate of title and to dispense with the need
of further inquiring over the status of the lot.

Jurisprudence has established exceptions to the protection granted to an innocent purchaser for value, such as when the purchaser has
actual knowledge of facts and circumstances that would compel a reasonably cautious man to inquire into the status of the lot; or 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 that 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 the certificate. One who falls within the exception can neither be denominated as innocent
purchaser for value nor a purchaser in good faith, and hence does not merit the protection of the law.

In particular, the Court has consistently held that that a buyer of a piece of land that is in the actual possession of persons other than the
seller must be wary and should investigate the rights of those in possession. Without such inquiry, the buyer can hardly be regarded as
a buyer in good faith.

We find that Lopez knew of circumstances that should have prodded her to further investigate the Lot No. 557-A's status before she
executed a mortgage contract over it with Rodrigo.

In the pre-trial brief she submitted before the trial court, Lopez made the following admissions:
xxx Only after these checking did an actual inspection of the properties took (sic) place, but on this occasion, unfortunately, none of the
plaintiffs, especially plaintiff Filadelfa T. Lausa, who is found lately to be residing nearby, furnished her the information of the present
claims.
She likewise made the same admission in an affidavit, viz:
6. The properties which were mortgaged were checked and no one at that time, even plaintiff Filadelfa T. Lausa who is just residing
nearby, disputed that the absolute owners thereof were the spouses Rodrigo and Ligaya Tugot.
While these admissions pertain to the petitioners' act of not telling Lopez of the status of Lot No. 557-A, it implies that she had inspected
the property, and accordingly found that Rodrigo did not reside in Lot No. 557-A.

Records of the case show that Filadelfa resided in Lot No. 557-A at the time Lopez executed the real estate mortgage with Rodrigo. In
August 1995, Rodrigo and his siblings filed an ejectment case against the petitioners Filadelfa Lausa and Anacleto Caduhay - Filadelfa
resides in Lot No. 557-A while Anacleto's in Lot 557-B. Notably, this ejectment case was filed five months after Lopez had entered into
the real estate mortgage contract. Thus, at the time Lopez inspected Lot No. 557, she would have found Filadelfa residing in it, and not
Rodrigo.

That Filadelfa - and not Rodrigo - resided in Lot No. 557-A should have prompted Lopez to make further inquiries over its status. Further
inquiries with the lot owners of surrounding property could have informed her of its actual status. Instead, she contented herself with
checking the copy of the title to Lot No. 557-A against the copy in the Registry of Deeds of Cebu, which she had done prior to the actual
inspection of Lot No. 557-A. The law cannot protect Lopez's rights to Lot 557-A given her complacency.

Further, the status of an innocent-purchaser for value or innocent mortgagor for value is established by the person claiming it, an onus
probandi that Lopez failed to meet.

In her memorandum, Lopez urged the Court to acknowledge her rights over Lot No. 557-A, arguing that the declaration of her status as
an innocent-purchaser and innocent mortgagor is a non-issue because it was never pleaded in her co-respondents' amended complaint.
She also pointed out that a valid title can emerge from a fabricated title, and essentially invoked the innocent purchaser for value doctrine.

The amended complaint alleges that Lopez's status as current owner of Lot 557-A prejudices the rights of the petitioners, who are its true
owners. The circumstances regarding how Lopez acquired ownership over Lot No. 557-A had also been pleaded therein.

Verily, the amended complaint does not need to allege Lopez's status as an innocent purchaser or mortgagor in good faith precisely
because it was incumbent upon her to allege and prove this to defend her title to Lot No. 557-A. It merely needed to allege a cause of
action against Lopez, (which it did by alleging the circumstances surrounding Lopez's ownership of Lot No. 557-A) and that it prejudices
the petitioners' rights as its true owners.

Further, Lopez chose to ignore in her Memorandum the petitioners' contention that she knew that Filadelfa Lausa, and not Rodrigo,
resided in Lot No. 557-A. To reiterate, Lopez has the burden of proving her status as an innocent purchaser for value in order to invoke
its application. Failing in this, she cannot avail of the protection the law grants to innocent purchasers for value.

The CA erred in finding that the petitioners' claim of ownership over Lot No. 557 had been barred by prescription and laches

The outcome of the present case dispenses with the need for a discussion regarding extinctive prescription and laches.

We note, however, that the CA erred in applying the principle of prescription and laches to the petitioners' cause of action involving Lot
No. 557.

An action for annulment of title or reconveyance based on fraud is imprescriptible where the plaintiff is in possession of the property
subject of the fraudulent acts. One who is in actual possession of a piece of land on a claim of ownership thereof may wait until his
possession is disturbed or his title is attacked before taking steps to vindicate his right.

The records of the case show that the petitioners resided in the property at the time they learned about TCT No. 571. Being in possession
of Lot No. 557, their claim for annulment of title had not expired. Their ownership of Lot No. 571, however, is a different matter.

Effects of the Court's decision

Our decision in the present case does not settle the ownership of Lot No. 557. To recapitulate, our examination of the records and the
evidence presented by the petitioners and the respondents lead us to conclude that neither of them own Lot No. 557.

Despite the intent of Act No. 1120 and Republic Act No. 9443 to transfer ownership of the Banilad Friar Estate Lands to its occupants,
we cannot settle the ownership of Lot No. 557 in the present case.

Indeed, the petitioners and the respondents are the actual occupants of Lot No. 557, and they and their families (with the exception of
Rosita Lopez) have resided in the lot since 1915.

However, as we have discussed above, neither party had been able to establish their right of ownership, much less possession, of Lot
No. 557. The petitioners anchor their claim on acquisitive prescription, which does not lie against registered land or the government. The
respondents, on the other hand, presented spurious TCTs. Thus, no amount of liberal interpretation of Act No. 1120 or Republic Act No.
9443 could give either party the right over the lot.

Neither can we ignore the evidence showing that none of them could rightfully own Lot No. 557. The petitioners' cancelled deed of
assignment and tax declarations cannot establish their ownership over Lot No. 557; especially since the operation of pertinent laws
prevented the possibility of acquisitive prescription. The respondents' TCT No. 571, on the other hand, had several discrepancies
indicating that it was a fake.

The exercise of the Court's judicial power settles actual controversies between parties, through which the Court establishes their legally
enforceable and demandable rights. We determine the parties' rights based on the application of the law to the facts established through
the pieces of evidence submitted by the parties. The application of the law on the facts of the present case establishes that neither party
has a legally enforceable right over Lot No. 557.

Given this situation, we direct that the records of the case be transmitted to the Land Management Bureau[6] for further investigation and
appropriate action over Lot No. 557 of the Banilad Friar Estate Lands.

Additionally, we direct that a copy of the records of the case be transmitted to the Ombudsman, for further investigation regarding how
the fake TCTs covering Lot No. 557 ended up in the Registry of Deeds of Cebu City, and for the criminal and administrative investigation
of government officials liable for them.
WHEREFORE, premises considered, the instant Petition for Review on Certiorari is PARTIALLY GRANTED. The Court of Appeals
Decision in CA-G.R. CV No. 63248 is MODIFIED,

MANOTOK VS. BARQUE

FACTS:

At bar are the motions for reconsideration separately filed by the Manotoks, Barques and Manahans of our Decision promulgated on
August 24, 2010, the dispositive portion of which reads:

WHEREFORE, the petitions filed by the Manotoks under Rule 45 of the 1997 Rules of Civil Procedure, as amended, as well as the
petition-in-intervention of the Manahans, are DENIED. The petition for reconstitution of title filed by the Barques is likewise DENIED. TCT
No. RT-22481 (372302) in the name of Severino Manotok IV, et al., TCT No. 210177 in the name of Homer L. Barque and Deed of
Conveyance No. V-200022 issued to Felicitas B. Manahan, are all hereby declared NULL and VOID. The Register of Deeds of Caloocan
City and/or Quezon City are hereby ordered to CANCEL the said titles. The Court hereby DECLARES that Lot 823 of the Piedad Estate,
Quezon City legally belongs to the NATIONAL GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES, without prejudice to the
institution of REVERSION proceedings by the State through the Office of the Solicitor General.

With costs against the petitioners.

SO ORDERED.

The Manotoks raised the following grounds in their motion for reconsideration with motion for oral arguments:

1. It is unjust and oppressive to deprive the Manotoks of property they have long held and acquired from the State, on consideration fully
paid and received, and under registered title issued by the State itself, on nothing more than the assumed failure of the State’s agents to
inscribe a ministerial "approval" on the transaction deeds.

2. The annulment of Friar Land sales, simply because physical evidence of the Secretary’s ministerial approval can no longer be found,
may void transactions involving thousands of hectares of land, and affect possibly millions of people to whom the lands may have since
been parceled out, sold and resold.

3. The Manotoks were given no due notice of the issue of reversion, which this case on appeal did not include, and which was thrust
upon the Manotoks only in the final resolution disposing of the appeal.

It would be error for the Honorable Court to let this matter go without a serious and full re-examination. This can be accomplished, among
others, by allowing this motion for reconsideration to be heard on oral argument, to try to permit all pertinent considerations to be aired
before the Court and taken into account.

4. These G.R. Nos. 162335 and 162605 were an appeal from administrative reconstitution proceedings before LRA Reconstitution officer
Benjamin Bustos. But the Resolution dated 18 December 2008 which finally reversed the CA’s rulings, affirmed the denial by Bustos of
the application for administrative reconstitution of the Barques’ purported transfer certificate of title, and terminated the appeal introduced
a new "case" on the Manotok property. It ordered evidence-taking at the CA, on which the Supreme Court proposed itself to decide, in
the first instance, an alleged ownership controversy over the Manotok property.

5. The Manotoks objected to the "remand" on jurisdictional and due process grounds. The original and exclusive jurisdiction over the
subject matter of the case is vested by law on the regional trial courts.

6. The Honorable Court erred in proceeding to judgment divesting the Manotoks of their title to Lot 823 of the Piedad Estate, without a
trial in the courts of original and exclusive jurisdiction, and in disregard of process which the law accords to all owners-in-possession.

7. The Honorable Court erred in concluding that the Manotoks, despite being owners in possession under a registered title, may be
compelled to produce the deeds by which the Government had transferred the property to them, and "failing" which can be divested of
their ownership in favor of the Government, even if the latter has not demanded a reversion or brought suit for that purpose.

8. The Honorable Court erred in imposing on the Manotoks, contrary to Art. 541 of the Civil Code, the obligation to prove their ownership
of the subject property, and in awarding their title to the Government who has not even sued to contest that ownership.

9. The Honorable Court erred in finding that Sale Certificate No. 1054, which Severino Manotok acquired by assignment in 1923, was not
approved by the Director of Lands and the Secretary of Agriculture and Natural Resources, and in finding that a Sale Certificate without
the Secretary’s approval is void.

10. The Honorable Court erred in concluding that the Manotoks had no valid Deed of Conveyance of Lot 823 from the Government The
original of Deed of Conveyance No. 29204 gave the register of deeds the authority to issue the transfer certificate of title in the name of
the buyer Severino Manotok, which is required by law to be filed with and retained in the custody of the register of deeds.We presume
that the copy thereof actually transmitted to and received by the register of deeds did contain the Secretary’s signature because he in
fact issued the TCT. And we rely on this presumption because the document itself can no longer be found.
11. Assuming arguendo that the original Deed of Conveyance No. 29204 the register of deeds received did not bear the Department
Secretary’s signature, DENR Memorandum Order No. 16-05 dated October 27, 2005 cured the defect. To deny the Manotoks the benefit
of ratification under said MO, on the erroneous interpretation that it covered only those found in the records of the "field offices" of the
DENR and LMB, would be discriminatory. The Department Secretary’s (assumed) failure to affix his signature on the deed of conveyance
could not defeat the Manotoks’ right to the lot after they had fully paid for it.

Republic Act No. 9443 must be applied, mutatis mutandis, to the Manotoks and the Piedad Estate.

12. The Honorable Court erred in denying their right to be informed of the CA’s report and be heard thereon prior to judgment, as basic
requirements of due process.

The Barques anchor their motion for reconsideration on the following:

THE HONORABLE SUPREME COURT GRAVELY ERRED IN DENYING THE PETITION FOR RECONSTITUTION FILED BY
RESPONDENTS HEIRS OF BARQUE WITHOUT STATING THE GROUNDS FOR SUCH DENIAL.

II

THE HONORABLE SUPREME COURT GRAVELY ERRED IN INSTANTLY DECLARING IN THE DISPOSITIVE PORTION OF THE
DECISION THAT ALONG WITH FELICITAS B. MANAHAN’S TITLE, RESPONDENTS HEIRS OF BARQUE’S TITLE TCT NO. 210177
IS LIKEWISE NULL AND VOID, WITHOUT STATING A CLEAR AND DEFINITE BASIS THEREFOR.

III

THE HONORABLE SUPREME COURT GRAVELY ERRED IN DECLARING TRANSFER CERTIFICATE OF TITLE NO. 210177 IN THE
NAME OF HOMER L. BARQUE NULL AND VOID.

IV

THE HONORABLE COURT OF APPEALS’ FACTUAL FINDINGS, ADOPTED BY THE HONORABLE SUPREME COURT IN THE
DECISION DATED 24 AUGUST 2010, ARE CONTRARY TO THE EVIDENCE PRESENTED.

THE HONORABLE SUPREME COURT’S FINDINGS IN THE DECISION DATED 24 AUGUST 2010 ARE CONTRARY TO LAW.

As to the Manahans, they seek a partial reconsideration and to allow further reception of evidence, stating the following grounds:

I. As the original of Sale Certificate No. 511 could not be found in the files of the LMB or the DENR-NCR at the time of the hearings before
the Commissioners, the existence of the certificate was proven by secondary evidence. The Commissioners erred in ignoring secondary
evidence of the contents of Sale Certificate No. 511 because of mere doubt and suspicion as to its authenticity and in the absence of
contradicting evidence.

II. The OSG which has been tasked by the Honorable Court to obtain documents from the LMB and DENR-NCR relative to the conveyance
of Lot 823, Piedad Estate, furnished intevenors with a certified true copy of Sale Certificate No. 511 which it obtained from the DENR-
NCR on September 11, 2010, together with the explanation of DENR-NCR why the document is available only now. (Certified true copy
of Sale Certificate No. 511 and Sworn Explanation of Evelyn G. Celzo attached as Annexes "I" and "II".

III. When Valentin Manahan offered to purchase Lot 823, Piedad Estate, being the "actual settler and occupant" who under the law
enjoyed preference to buy the lot, his status as "actual settler and occupant" must have been verified by the Bureau of Public Lands
because the presumption is that official duty has been regularly performed. The administrative determination of the status of Valentin
Manahan as "actual settler and occupant" can not now be reviewed after the lapse of about eight (8) decades when parties, witnesses,
documents and other evidence are hardly or no longer available.

IV. Abundant evidence was submitted by intervenors that they and their predecessors-in-interest occupied and possessed Lot 823 up to
1948 when they were dispossessed by armed men. It was error for the Commissioners to ignore the evidence of the intervenors, there
being no contradicting proof.

V. The Commissioners committed palpable error in not according evidentiary value to the Investigation Report of Evelyn dela Rosa
because it is allegedly "practically a replica or summation of Felicitas B. Manahan’s allegations embodied in her petition." Examination of
the dates of the documents will show that the Investigation Report preceded the Petition. The Petition, therefore, is based on the
Investigation Report, and not the other way around.

VI. The pronouncement of the Commissioners that Sale Certificate No. 511 is stale is incorrect. Intervenors made continuing efforts to
secure a deed of conveyance based on Sale Certificate No. 511. Defense of staleness or laches belongs to the party against whom the
claim is asserted; it is only that party who can raise it. It can also be waived, as in this case when the LMB which had the sole authority
under Act No. 1120 to convey friar lands, issued to intervenor Felicitas B. Manahan Deed of Conveyance No. V-2000-22.
VII. The requirement of Act No. 1120 that a deed of conveyance of friar land must be signed by the Secretary of Interior was dispensed
with pursuant to law and Presidential issuances which have the force of law.

VIII. Deeds of conveyance lacking the signature of the Department Secretary were ratified by President Joseph Estrada and DENR
Secretary Michael T. Defensor.

The motions are bereft of merit.

Upon the theory that this Court had no power to cancel their certificate of title over Lot 823, Piedad Estate in the resolution of the present
controversy, the Manotoks contend that our Resolution of December 18, 2008 terminated the appeal from the Land Registration Authority
(LRA) administrative reconstitution proceedings by reversing the CA’s rulings and affirming the denial by LRA Reconstitution Officer
Benjamin M. Bustos of the application for administrative reconstitution of the Barques’ Transfer Certificate of Title (TCT) No. 210177. The
appeal having been terminated, the Manotoks argued that the remand to the CA for evidence-taking had introduced a new "case" in which
this Court will decide, in the first instance, an "alleged" ownership issue over the property. Such action is legally infirm since the law has
vested exclusive original jurisdiction over civil actions involving title to real property on the trial courts.

The argument is untenable.

In our December 18, 2008 Resolution, we set aside the December 12, 2005 Decision rendered by the First Division and recalled the entry
of judgment. We ruled that neither the CA nor the LRA had jurisdiction to cancel the Manotok title, a relief sought by the Barques in the
administrative reconstitution proceedings. The Court En Banc proceeded with the reevaluation of the cases on a pro hac vice basis.
During the oral arguments, there were controversial factual matters which emerged as the parties fully ventilated their respective claims,
in the course of which the Barques’ claim of ownership was found to be exceedingly weak. Indeed, both the LRA and CA erred in ruling
that the Barques had the right to seek reconstitution of their purported title. Reevaluation of the evidence on record likewise indicated that
the Manotoks’ claim to title is just as flawed as that of the Barques. Following the approach in Alonso v. Cebu Country Club, Inc.1 also
involving a Friar Land, Republic v. Court of Appeals2 and Manotok Realty Inc. v. CLT Realty Development Corporation,3 the majority
resolved to remand this case for reception of evidence on the parties’ competing claims of ownership over Lot 823 of the Piedad Estate.
Given the contentious factual issues, it was necessary for this Court to resolve the same for the complete determination of the present
controversy involving a huge tract of friar land. It was thus not the first time the Court had actually resorted to referring a factual matter
pending before it to the CA.

Maintaining their objection to the order for reception of evidence on remand, the Manotoks argue that as owners in possession, they had
no further duty to defend their title pursuant to Article 541 of the Civil Code which states that: "[a] possessor in the concept of owner has
in his favor the legal presumption that he possesses with a just title and he cannot be obliged to show or prove it." But such presumption
is prima facie, and therefore it prevails until the contrary is proved.4 In the light of serious flaws in the title of Severino Manotok which
were brought to light during the reconstitution proceedings, the Court deemed it proper to give all the parties full opportunity to adduce
further evidence, and in particular, for the Manotoks to prove their presumed just title over the property also claimed by the Barques and
the Manahans. As it turned out, none of the parties were able to establish by clear and convincing evidence a valid alienation from the
Government of the subject friar land. The declaration of ownership in favor of the Government was but the logical consequence of such
finding.

We have ruled that the existence of Sale Certificate No. 1054 in the records of the DENR-LMB was not duly established. No officer of the
DENR-NCR or LMB having official custody of sale certificates covering friar lands testified as to the issuance and authenticity of Exh. 10
submitted by the Manotoks. And even assuming that Exh. 10 was actually sourced from the DENR-LMB, there was no showing that it
was duly issued by the Director of Lands and approved by the Secretary of Agriculture and Natural Resources (DENR). On this point, the
Manotoks hinted that the LMB’s certifying the document (Exh. 10) at the Manotoks’ request was a deliberate fraud in order to give them
either a false document, the usual unsigned copy of the signed original, or a fake copy.

The Manotoks further assert that this would imply that the LMB either did not produce the genuine article, or could not produce it. This
could only mean that the document which the NBI "found" to be fake or spurious, if this Court accepts that finding, was "planted
evidence"or evidence inserted in the LMB files to discredit the Manotok title. Nonetheless, the Manotoks insist there were independent
evidence which supposedly established the prior existence of Sale Certificate No. 1054. These documents are: (a) photocopy of
Assignment of Sale Certificate No. 1054 dated 1929; (b) official receipt of payment for said certified copy; (c) photocopies of the other
assignment deeds dated 1923; (d) official receipts of installment payments on Lot 823 issued to Severino Manotok; (e) file copies in the
National Archives of the Deed of Conveyance No. 29204; and (f) the notarial registers in which the said Deed of Conveyance, as well as
the assignment documents, were entered.

The contentions have no merit, and at best speculative. As this Court categorically ruled in Alonso v. Cebu Country Club, Inc.,5 "approval
by the Secretary of Agriculture and Commerce of the sale of friar lands is indispensable for its validity, hence, the absence of such
approval made the sale null and void ab initio." In that case, the majority declared that no valid titles can be issued on the basis of the
sale or assignment made in favor of petitioner’s father due to the absence of signature of the Director of Lands and the Secretary of the
Interior, and the approval of the Secretary of Natural Resources in the Sale Certificate and Assignment of Sale Certificate. Applying the
Alonso ruling to these cases, we thus held that no legal right over the subject friar land can be recognized in favor of the Manotoks under
the assignment documents in the absence of the certificate of sale duly signed by the Director of Lands and approved by the Secretary
of Agriculture and Natural Resources.

That a valid certificate of sale was issued to Severino Manotok’s assignors cannot simply be presumed from the execution of assignment
documents in his favor. Neither can it be deduced from the alleged issuance of the half-torn TCT No. 22813, itself a doubtful document
as its authenticity was not established, much less the veracity of its recitals because the name of the registered owner and date of
issuance do not appear at all. The Manotoks until now has not offered any explanation as to such condition of the alleged title of Severino
Manotok; they assert that it is the Register of Deeds himself "who should be in a position to explain that condition of the TCT in his
custody." But then, no Register of Deeds had testified and attested to the fact that the original of TCT No. 22813 was under his/her
custody, nor that said certificate of title in the name of Severino Manotok existed in the files of the Registry of Deeds of Caloocan or
Quezon City. The Manotoks consistently evaded having to explain the circumstances as to how and where TCT No. 22813 came about.
Instead, they urge this Court to validate their alleged title on the basis of the disputable presumption of regularity in the performance of
official duty. Such stance hardly satisfies the standard of clear and convincing evidence in these cases. Even the existence of the official
receipts showing payment of the price to the land by Severino Manotok does not prove that the land was legally conveyed to him without
any contract of sale having been executed by the government in his favor. Neither did the alleged issuance of TCT No. 22183 in his favor
vest ownership upon him over the land nor did it validate the alleged purchase of Lot 283, which is null and void. The absence of the
Secretary’s approval in Certificate of Sale No. 1054 made the supposed sale null and void ab initio.6

In the light of the foregoing, the claim of the Barques who, just like the Manahans, were unable to produce an authentic and genuine sale
certificate, must likewise fail. The Decision discussed extensively the findings of the CA that the Barques’ documentary evidence were
either spurious or irregularly procured, which even buttressed the earlier findings mentioned in the December 18, 2008 Resolution. The
CA’s findings and recommendations with respect to the claims of all parties, have been fully adopted by this Court, as evident in our
disquisitions on the indispensable requirement of a validly issued Certificate of Sale over Lot 823, Piedad Estate.

As to the motion of the Manahans to admit an alleged certified true copy of Sale Certificate No. 511 dated June 23, 1913 in the name of
Valentin Manahan which, as alleged in the attached Sworn Explanation of Evelyn G. Celzo, the latter hadinadvertently failed to attach to
her Investigation Report forwarded to the CENRO, this Court cannot grant said motion.

This belatedly submitted copy of Sale Certificate No. 511 was not among those official documents which the Office of the Solicitor General
(OSG) offered as evidence, as in fact no copy thereof can be found in the records of either the DENR-NCR or LMB. Moreover, the sudden
emergence of this unauthenticated document is suspicious, considering that Celzo who testified, as witness for both the OSG and the
Manahans, categorically admitted that she never actually saw the application to purchase and alleged Sale Certificate No. 511 of the
Manahans. The relevant portions of the transcript of stenographic notes of the cross- examination of said witness during the hearing
before the CA are herein quoted:

ATTY. SAN JUAN:

How about this part concerning Valentin Manahan having applied for the purchase of the land? Did you get this from the neighbors or
from Felicitas Manahan?

xxxx

WITNESS:

No, sir. Only the Records Section, sir, that Valentin Manahan applied, sir.

ATTY. SAN JUAN:

You did not see Valentin Manahan’s application but only the Records Section saw it?

WITNESS:

Yes, sir.

ATTY. SAN JUAN:

Did they tell you that they saw the application?

WITNESS:

I did not go further, sir.

xxxx

ATTY. SAN JUAN:

And this report of yours says that Valentin Manahan was issued Sale Certificate No. 511 after completing the payment of the price of
P2,140?

WITNESS:

Yes, sir.

ATTY. SAN JUAN:

You also got this from the records of the LMB, is that correct?

WITNESS:

Yes, sir.

ATTY. SAN JUAN:

You actually saw the sale certificate that was issued to Valentin Manahan after he paid the price of P2,140?

WITNESS:

No, sir. I did not go further.

ATTY. SAN JUAN:

You did not see the sale certificate?

WITNESS:

Yes, Sir, but I asked only.

ATTY. SAN JUAN:

Who did you ask?

WITNESS:

The records officer, sir.

ATTY. SAN JUAN:

Whose name you can no longer recall, correct?

WITNESS:

I can no longer recall, sir.

ATTY. SAN JUAN:

And the information to you was the Sale Certificate No. 511 was issued after the price was fully paid?

WITNESS:

Yes, sir.

ATTY. SAN JUAN:

And it was only after he applied for the purchase of the lot sometime after the survey of 1939 that he was issued sale certificate No. 511?

WITNESS:

I am not aware of the issuance of sale certificate. I am aware only of the deed of assignment, Sir.

x x x x7 (Emphasis supplied.)

In view of the above admission, Celzo’s explanation that the copy of Sale Certificate No. 511 signed by the Director of Lands and Secretary
of the Interior was originally attached to her Investigation Report, cannot be given credence. Even her testimony regarding the conduct
of her investigation of Lot 823, Piedad Estate and the Investigation Report she submitted thereafter, failed to impress the CA on the
validity of the Manahans’ claim. Indeed, records showed that Celzo’s findings in her report were merely based on what Felicitas Manahan
told her about the alleged occupation and possession by Valentin Manahan of the subject land.

In their Offer of Additional Evidence, the Manahans submitted a photocopy of a letter dated December 21, 2010 allegedly sent by Atty.
Allan V. Barcena (OIC, Director) to their counsel, Atty. Romeo C. dela Cruz, which reads:

This has reference to your letter dated August 20, 2010 addressed to the Secretary of the Department of Environment and Natural
Resources (DENR) requesting that Deed of Conveyance No. V-200022 issued on October 30, 2000 over Lot 823 of the Piedad Estate in
favor of Felicitas B. Manahan be ratified or confirmed for reasons stated therein. The Office of the DENR Secretary in turn referred the
letter to us for appropriate action.

Records of this Office on Lot 823 of the Piedad Estate, show that the Deed of Conveyance No. V-200022 covering said lot in favor of
Felicitas Manahan was issued by then Director of the Land Management Bureau (LMB), now Undersecretary Ernesto D. Adobo, Jr., on
October 30, 2000. The Deed was issued based on General Memorandum Order (GMO) No. 1 issued by then Secretary Jose J. Leido,
Jr. of the Department of Natural Resources on January 17, 1977, which authorized the Director of Lands, now Director of LMB, to approve
contracts of sale and deeds of conveyance affecting Friar Lands.

It is stressed that the confirmation of the Deed by this office is only as to the execution and issuance based on the authority of LMB
Director under GMO No. 1. This is without prejudice to the final decision of the Supreme Court as to its validity in the case of "Severino
Manotok IV, et al. versus Heirs of Homer L, Barque" (G.R. No. 162335 & 162605).

Please be guided accordingly.8 (Emphasis supplied.)

However, in the absence of a valid certificate of sale duly signed by the Secretary of Interior or Agriculture and Natural Resources, such
alleged confirmation of the execution and issuance by the DENR-LMB of Deed of Conveyance No V-00022 in favor of Felicitas Manahan
on October 30, 2000 is still insufficient to prove the Manahans’ claim over the subject land.

In a Supplemental Manifestation dated November 18, 2010, the Manotoks submitted an affidavit supposedlyexecuted on November 11,
2010 by former DENR Secretary Michael T. Defensor("Defensor Affidavit") clarifying that MO 16-05 applies to all Deeds of Conveyance
that do not bear the signature of the Secretary of Natural Resources, contrary to the CA and this Court’s statement that said issuance
refers only to those deeds of conveyance on file with the records of the DENR field offices.

By its express terms, however, MO 16-05 covered only deeds of conveyances and not unsigned certificates of sale. The explanation of
Secretary Defensor stated theavowed purpose behind the issuance, which is "to remove doubts or dispel objections as to the validity of
all Torrens transfer certificates of title issued over friar lands" thereby "ratifying the deeds of conveyance to the friar land buyers who have
fully paid the purchase price, and are otherwise not shown to have committed any wrong or illegality in acquiring such lands."

The Manahans propounded the same theory that contracts of sale over friar lands without the approval of the Secretary of Natural
Resources may be subsequently ratified, but pointed out that unlike the Manotoks’ Deed of Conveyance No. 29204 (1932), their Deed of
Conveyance No. V-2000-22 (2000) was issued and approved by the Director of Lands upon prior authority granted by the Secretary.

In their Consolidated Memorandum dated December 19, 2010, the Manahans reiterated their earlier argument that the LMB Director
himself had the authority to approve contracts of sale and deeds of conveyance over friar lands on the basis of General Memorandum
Order No. 1 issued in 1977 by then Secretary of Natural Resources Jose J. Leido, Jr. delegating such function to the Director of Lands.
This delegated power can also be gleaned from Sec. 15, Chapter 1, Title XIV of the Administrative Code of 1987 which provides that the
Director of Lands shall "perform such other functions as may be provided by law or assigned by the Secretary." Moreover, former
President Corazon C. Aquino issued Executive Order No. 131 dated January 20, 1987 reorganizing the LMB and providing that the LMB
Director shall, among others, perform other functions as may be assigned by the Minister of Natural Resources.

On the basis of Art. 13179 of the Civil Code, the Manahans contend that deeds of conveyance not bearing the signature of the Secretary
can also be ratified. Further, they cite Proclamation No. 172 issued by former President Joseph Ejercito Estrada which declared that there
should be no legal impediment for the LMB to issue such deeds of conveyance since the applicants/purchasers have already paid the
purchase price of the lot, and as sellers in good faith, it is the obligation of the Government to deliver to said applicants/purchasers the
friar lands sold free of any lien or encumbrance whatsoever. Eventually, when MO 16-05 was issued by Secretary Defensor, all these
deeds of conveyance lacking the signature of the Secretary of Natural Resources are thus deemed signed or otherwise ratified. The CA
accordingly erred in holding that MO 16-05 cannot override Act No. 1120 which requires that a deed of conveyance must be signed by
the Secretary, considering that MO 16-05 is based on law and presidential issuances, particularly EO 131, which have the force of law.

Meanwhile, in compliance with our directive, the Solicitor General filed his Comment on the Defensor Affidavit submitted by the Manotoks.
The Solicitor General contends that said document is hearsay evidence, hence inadmissible and without probative value. He points out
that former DENR Secretary Defensor was not presented as a witness during the hearings at the CA, thus depriving the parties including
the government of the right to cross-examine him regarding his allegations therein. And even assuming arguendo that such affidavit is
admissible as evidence, the Solicitor General is of the view that the Manotoks, Barques and Manahans still cannot benefit from the
remedial effect of MO 16-05 in view of the decision rendered by this Court which ruled that none of the parties in this case has established
a valid alienation from the Government of Lot 823 of the Piedad Estate, and also because the curative effect of MO 16-05 is intended
only for friar land buyers whose deeds of conveyance lack the signature of the Secretary of the Interior or Agriculture and Natural
Resources, have fully paid the purchase price and are otherwise not shown to have committed any wrong or illegality in acquiring the
friar lands. He then emphasizes that this Court has ruled that it is not only the deed of conveyance which must be signed by the Secretary
but also the certificate of sale itself. Since none of the parties has shown a valid disposition to any of them of Lot 823 of the Piedad Estate,
this Court therefore correctly held that said friar land is still part of the patrimonial property of the national government.

The Court is not persuaded by the "ratification theory" espoused by the Manotoks and Manahans.

The argument that the Director of Lands had delegated authority to approve contracts of sale and deeds of conveyances over friar
landsignores the consistent ruling of this Court in controversies involving friar lands. The aforementioned presidential/executive issuances
notwithstanding, this Court held in Solid State Multi-Products Corporation v. CA,10 Liao v. Court of Appeals,11 and Alonso v. Cebu
Country Club12 that approval of the Secretary of Agriculture and Commerce (later the Natural Resources) is indispensable to the validity
of sale of friar land pursuant to Sec. 18 of Act No. 1120 and that the procedure laid down by said law must be strictly complied with.

As to the applicability of Art. 1317 of the Civil Code, we maintain that contracts of sale lacking the approval of the Secretary fall under the
class of void and inexistent contracts enumerated in Art. 140913 which cannot be ratified. Section 18 of Act No. 1120 mandated the
approval by the Secretary for a sale of friar land to be valid.

In his dissenting opinion, Justice Antonio T. Carpio disagreed with the majority’s interpretation of Section 18 of Act No. 1120, and proposed
that based on Section 12 of the same Act, it is the Deed of Conveyance that must bear the signature of the Secretary of Interior/Agriculture
and Natural Resources "because it is only when the final installment is paid that the Secretary can approve the sale, the purchase price
having been fully paid." It was pointed out that the majority itself expressly admit that "it is only a ministerial duty on the part of the
Secretary to sign the Deed of Conveyance once the applicant had made full payment on the purchase price of the land", citing
jurisprudence to the effect that "notwithstanding the failure of the government to issue the proper instrument of conveyance when the
purchaser finally pays the final installment of the purchase price, the purchase of the friar land still acquired ownership.

We are unable to agree with the view that it is only the Director of Lands who signs the Certificate of Sale.

The official document denominated as "Sale Certificate" clearly required both the signatures of the Director of Lands who issued such
sale certificate to an applicant settler/occupant and the Secretary of the Interior/Agriculture and Natural Resources indicating his approval
of the sale. These forms had been prepared and issued by the Chief of the Bureau of Public Lands under the supervision of the Secretary
of the Interior, consistent with Act No. 1120 "as may be necessary x x x to carry into effect all the provisions [thereof] that are to be
administered by or under [his] direction, and for the conduct of all proceedings arising under such provisions."14

We reiterate that Section 18 of Act No. 1120, as amended, is plain and categorical in stating that:

SECTION 18. No lease or sale made by the Chief of the Bureau of Public Lands under the provisions of this Act shall be valid until
approved by the Secretary of the Interior.

Section 12 did not mention the requirement of signature or approval of the Secretary in the sale certificate and deed of conveyance.

SECTION 12. It shall be the duty of the Chief of the Bureau of Public Lands by proper investigation to ascertain what is the actual value
of the parcel of land held by each settler and occupant, taking into consideration the location and quality of each holding of land, and any
other circumstances giving [it] value. The basis of valuation shall likewise be, so far as practicable, such [as] the aggregate of the values
of all the holdings included in each particular tract shall be equal to the cost to the Government to the entire tract, including the cost of
surveys, administration and interest upon the purchase money to the time of sale. When the cost thereof shall have been thus ascertained,
the Chief of the Bureau of Public Lands shall give the said settler and occupant a certificate which shall set forth in detail that the
Government has agreed to sell to such settler and occupant the amount of land so held by him, at the price so fixed, payable as provided
in this Act at the office of the Chief of Bureau of Public Lands, in gold coin of the United States or its equivalent in Philippine currency,
and that upon the payment of the final installment together with [the] accrued interest the Government will convey to such settler and
occupant the said land so held by him by proper instrument of conveyance, which shall be issued and become effective in the manner
provided in section one hundred and twenty-two of the Land Registration Act. The Chief of the Bureau of Public Lands shall, in each
instance where a certificate is given to the settler and occupant of any holding, take his formal receipt showing the delivery of such
certificate, signed by said settler and occupant.

On the other hand, the first paragraph of Section 15 provides for the reservation of title in the Government only for the purpose of ensuring
payment of the purchase price, which means that the sale was subject only to the resolutory condition of non-payment, while the second
paragraph states that the purchaser thereby acquires "the right of possession and purchase" by virtue of a certificate of sale "signed
under the provisions [thereof]." The certificate of sale evidences the meeting of the minds between the Government and the applicant
regarding the price, the specific parcel of friar land, and terms of payment. In Dela Torre v. Court of Appeals,15 we explained that the
non-payment of the full purchase price is the only recognized resolutory condition in the case of sale of friar lands. We have also held
that it is the execution of the contract to sell and delivery of the certificate of sale that vests title and ownership to the purchaser of friar
land.16 Where there is no certificate of sale issued, the purchaser does not acquire any right of possession and purchase, as implied
from Section 15. By the mandatory language of Section 18, the absence of approval of the Secretary of Interior/Agriculture and Natural
Resources in the lease or sale of friar land would invalidate the sale. These provisions read together indicate that the approval of the
Secretary is required in both the certificate of sale and deed of conveyance, although the lack of signature of the Secretary in the latter
may not defeat the rights of the applicant who had fully paid the purchase price.

Justice Conchita Carpio Morales’ dissent asserted that case law does not categorically state that the required "approval" must be in the
form of a signature on the Certificate of Sale, and that there is no statutory basis for the requirement of the Secretary’s signature on the
Certificate of Sale "apart from a strained deduction of Section 18."

As already stated, the official forms being used by the Government for this purpose clearly show that the Director of Lands signs every
certificate of sale issued covering a specific parcel of friar land in favor of the applicant/purchaser while the Secretary of Interior/Natural
Resources signs the document indicating that the sale was approved by him. To approve is to be satisfied with; to confirm, ratify, sanction,
or consent to some act or thing done by another; to sanction officially.17 The Secretary of Interior/Natural Resources signs and approves
the Certificate of Sale to confirm and officially sanction the conveyance of friar lands executed by the Chief of the Bureau of Public Lands
(later Director of Lands). It is worth mentioning thatSale Certificate No. 651 in the name of one Ambrosio Berones dated June 23, 1913,18
also covering Lot 823 of the Piedad Estate and forming part of the official documents on file with the DENR-LMB which was formally
offered by the OSG as part of the official records on file with the DENR and LMB pertaining to Lot 823, contains the signature of both the
Director of Lands and Secretary of the Interior. The Assignment of Sale Certificate No. 651 dated April 19, 1930 was also signed by the
Director of Lands.19

Following the dissent’s interpretation that the Secretary is not required to sign the certificate of sale while his signature in the Deed of
Conveyance may also appear although merely a ministerial act, it would result in the absurd situation wherein thecertificate of sale and
deed of conveyance both lacked the signature and approval of the Secretary, and yet the purchaser’s ownership is ratified, courtesy of
DENR Memorandum Order (MO) No. 16-05. It is also not farfetched that greater chaos will arise from conflicting claims over friar lands,
which could not be definitively settled until the genuine and official manifestation of the Secretary’s approval of the sale is discerned from
the records and documents presented. This state of things is simply not envisioned under the orderly and proper distribution of friar lands
to bona fide occupants and settlers whom the Chief of the Bureau of Public Lands was tasked to identify.20

The existence of a valid certificate of sale therefore must first be established with clear and convincing evidence before a purchaser is
deemed to have acquired ownership over a friar land notwithstanding the non-issuance by the Government, for some reason or another,
of a deed of conveyance after completing the installment payments. In the absence of such certificate of sale duly signed by the Secretary,
no right can be recognized in favor of the applicant. Neither would any assignee or transferee acquire any right over the subject land.

In Alonso v. Cebu Country Club, Inc.,21 the Court categorically ruled that the absence of approval by the Secretary of Agriculture and
Commerce in the sale certificate and assignment of sale certificate made the sale null and void ab initio. Necessarily, there can be no
valid titles issued on the basis of such sale or assignment.22

Justice Carpio, however, opined that the ruling in Alonso "was superseded with the issuance by then Department of [Environment] and
Natural Resources (DENR) Secretary Michael T. Defensor of DENR Memorandum Order No. 16-05." It was argued that the majority had
construed a "limited application" when it declared that the Manotoks could not benefit from said memorandum order because the latter
refers only to deeds of conveyance "on file with the records of the DENR field offices".

We disagree with the view that Alonso is no longer applicable to this controversy after the issuance of DENR MO No. 16-05 which
supposedly cured the defect in the Manotoks’ title.

First, DENR MO No. 16-05 explicitly makes reference only to Deeds of Conveyances, not to Sale Certificates by which, under the express
language of Section 15, the purchaser of friar land acquires the right of possession and purchase pending final payment and the issuance
of title, such certificate being duly signed under the provisions of Act No. 1120. Although the whereas clause of MO No. 16-05 correctly
stated that it was only a ministerial duty on the part of the Secretary to sign the Deed of Conveyance once the applicant had made full
payment on the purchase price of the land, it must be stressed that in those instances where the formality of the Secretary’s approval
and signature is dispensed with, there was a valid certificate of sale issued to the purchaser or transferor. In this case, there is no indication
in the records that a certificate of sale was actually issued to the assignors of Severino Manotok, allegedly the original claimants of Lot
823, Piedad Estate.

Second, it is basic that an administrative issuance like DENR Memorandum Order No. 16-05 must conform to and not contravene existing
laws. In the interpretation and construction of the statutes entrusted to them for implementation, administrative agencies may not make
rules and regulations which are inconsistent with the statute it is administering, or which are in derogation of, or defeat its purpose. In
case of conflict between a statute and an administrative order, the former must prevail.23 DENR Memorandum Order No. 16-05 cannot
supersede or amend the clear mandate of Section 18, Act No. 1120 as to dispense with the requirement of approval by the Secretary of
the Interior/Agriculture and Natural Resources of every lease or sale of friar lands.

But what is worse, as the dissent suggests, is that MO 16-05 would apply even to those deeds of conveyances not found in the records
of DENR or its field offices, such as the Manotoks’ Deed of Conveyance No. 29204 sourced from the National Archives. It would then
cover cases of claimants who have not been issued any certificate of sale but were able to produce a deed of conveyance in their names.
The Bureau of Lands was originally charged with the administration of all laws relative to friar lands, pursuant to Act No. 2657 and Act
No. 2711. Under Executive Order No. 192,24 the functions and powers previously held by the Bureau of Lands were absorbed by the
Lands Management Bureau (LMB) of the DENR, while those functions and powers not absorbed by the LMB were transferred to the
regional field offices.25 As pointed out by the Solicitor General in the Memorandum submitted to the CA, since the LMB and DENR-NCR
exercise sole authority over friar lands, they are naturally the "sole repository of documents and records relative to Lot No. 823 of the
Piedad Estate."26

Third, the perceived disquieting effects on titles over friar lands long held by generations of landowners cannot be invoked as justification
for legitimizing any claim or acquisition of these lands obtained through fraud or without strict compliance with the procedure laid down in
Act No. 1120. This Court, in denying with finality the motion for reconsideration filed by petitioner in Alonso v. Cebu Country Club, Inc.27
reiterated the settled rule that "[a]pproval by the Secretary of the Interior cannot simply be presumed or inferred from certain acts since
the law is explicit in its mandate."28 Petitioners failed to discharge their burden of proving their acquisition of title by clear and convincing
evidence, considering the nature of the land involved.

As consistently held by this Court, friar lands can be alienated only upon proper compliance with the requirements of Act No. 1120. The
issuance of a valid certificate of sale is a condition sine qua non for acquisition of ownership under the Friar Lands Act. Otherwise, DENR
Memorandum Order No. 16-05 would serve as administrative imprimatur to holders of deeds of conveyance whose acquisition may have
been obtained through irregularity or fraud.

Contrary to the dissent of Justice Maria Lourdes P. A. Sereno that our decision has "created dangers for the system of property rights in
the Philippines", the Court simply adhered strictly to the letter and spirit of the Friar Lands Act and jurisprudence interpreting its provisions.
Such imagined scenario of instability and chaos in the established property regime, suggesting several other owners of lands formerly
comprising the Piedad Estate who are supposedly similarly situated, remains in the realm of speculation. Apart from their bare allegations,
petitioners (Manotoks) failed to demonstrate how the awardees or present owners of around more than 2,000 hectares of land in the
Piedad Estate can be embroiled in legal disputes arising from unsigned certificates of sale.

On the other hand, this Court must take on the task of scrutinizing even certificates of title held for decades involving lands of the public
domain and those lands which form part of the Government’s patrimonial property, whenever necessary in the complete adjudication of
the controversy before it or where apparent irregularities and anomalies are shown by the evidence on record. There is nothing sacrosanct
about the landholdings in the Piedad Estate as even prior to the years when Lot 823 could have been possibly "sold" or disposed by the
Bureau of Lands, there were already reported anomalies in the distribution of friar lands in general.29

Significantly, subsequent to the promulgation of our decision in Alonso, Republic Act No. (RA) 9443 was passed by Congress confirming
and declaring, subject to certain exceptions, the validity of existing TCTs and reconstituted certificates of title covering the Banilad Friar
Lands Estate situated in Cebu. Alonso involved a friar land already titled but without a sale certificate, and upon that ground we declared
the registered owner as not having acquired ownership of the land. RA 9443 validated the titles "notwithstanding the lack of signatures
and/or approval of the then Secretary of Interior (later Secretary of Agriculture and Natural Resources) and/or the then Chief of the Bureau
of Public lands (later Director of Public Lands) in the copies of the duly executed Sale Certificate and Assignments of Sale Certificates,
as the case may be, now on file with the Community Environment and Natural Resources Office (CENRO), Cebu City".

The enactment of RA 9443 signifies the legislature’s recognition of the statutory basis of the Alonso ruling to the effect that in the absence
of signature and/or approval of the Secretary of Interior/Natural Resources in the Certificates of Sale on file with the CENRO, the sale is
not valid and the purchaser has not acquired ownership of the friar land. Indeed, Congress found it imperative to pass a new law in order
to exempt the already titled portions of the Banilad Friar Lands Estate from the operation of Section 18. This runs counter to the dissent’s
main thesis that a mere administrative issuance (DENR MO No. 16-05) would be sufficient to cure the lack of signature and approval by
the Secretary in Certificate of Sale No. 1054 covering Lot 823 of the Piedad Estate.

In any event, the Manotoks now seek the application of RA 9443 to the Piedad Estate, arguing that for said law to be constitutionally
valid, its continued operation must be interpreted in a manner that does not collide with the equal protection clause. Considering that the
facts in Alonso from which RA 9443 sprung are similar to those in this case, it is contended that there is no reason to exclude the Piedad
Estate from the ambit of RA 9443.

Justice Carpio’s dissent concurs with this view, stating that to limit its application to the Banilad Friar Lands Estate will result in class
legislation. RA 9443 supposedly should be extended to lands similarly situated, citing the case of Central Bank Employees Association,
Inc. v. Bangko Sentral ng Pilipinas.30

In the aforesaid case, the Court extended the benefits of subsequent laws exempting all rank-and-file employees of other government
financing institutions (GFIs) from the Salary Standardization Law (SSL) to the rank-and-file employees of the BSP. We upheld the position
of petitioner association that the continued operation of Section 15 (c), Article II of RA 7653 (the New Central Bank Act), which provides
that the compensation and wage structure of employees whose position fall under salary grade 19 and below shall be in accordance with
the rates prescribed under RA 6758 (SSL), constitutes "invidious discrimination on the 2,994 rank-and-file employees of the [BSP]". Thus,
as regards the exemption from the SSL, we declared that there were no characteristics peculiar only to the seven GFIs or their rank-and-
file so as to justify the exemption from the SSL which BSP rank-and-file employees were denied. The distinction made by the law is
superficial, arbitrary and not based on substantial distinctions that make real differences between BSP rank-and-file and the seven other
GFIs.31

We are of the opinion that the provisions of RA 9443 may not be applied to the present case as to cure the lack of signature of the Director
of Lands and approval by the Secretary of Agriculture and Natural Resources in Sale Certificate No. 1054.

The Court has explained the nature of equal protection guarantee in this manner:

The equal protection of the law clause is against undue favor and individual or class privilege, as well as hostile discrimination or the
oppression of inequality. It is not intended to prohibit legislation which is limited either in the object to which it is directed or by territory
within which it is to operate. It does not demand absolute equality among residents; it merely requires that all persons shall be treated
alike, under like circumstances and conditions both as to privileges conferred and liabilities enforced. The equal protection clause is not
infringed by legislation which applies only to those persons falling within a specified class, if it applies alike to all persons within such
class, and reasonable grounds exist for making a distinction between those who fall within such class and those who do not.32 (Emphasis
and underscoring supplied.)

Section 1 of RA 9443 provides:

Section 1. All existing Transfer Certificates of Title and Reconstituted Certificates of Title duly issued by the Register of Deeds of Cebu
Province and/or Cebu City covering any portion of the Banilad Friar Lands Estate, notwithstanding the lack of signatures and/or approval
of the then Secretary of the Interior (later Secretary of Agriculture and Natural Resources) and/or the then Chief of the Bureau of Public
Lands (later Director of Public Lands) in the copies of the duly executed Sale Certificates and Assignments of Sales Certificates, as the
case may be, now on file with the Community Environment and Natural Resources Office (CENRO), Cebu City, are hereby confirmed
and declared as valid titles and the registered owners recognized as absolute owners thereof.

This confirmation and declaration of validity shall in all respects be entitled to like effect and credit as a decree of registration, binding the
land and quieting the title thereto and shall be conclusive upon and against all persons, including the national government and al1
branches thereof; except when, in a given case involving a certificate of title or areconstituted certificate of title, there is clear evidence
that such certificate of title or reconstituted certificate of title was obtained through fraud, in which case the solicitor general or his duly
designated representative shall institute the necessary judicial proceeding to cancel the certificate of title or reconstituted certificate of
title as the case may be, obtained through such fraud.(Emphasis supplied.)

Without ruling on the issue of violation of equal protection guarantee if the curative effect of RA 9443 is not made applicable to all titled
lands of the Piedad Estate, it is clear that the Manotoks cannot invoke this law to "confirm" and validate their alleged title over Lot 823. It
must be stressed that the existence and due issuance of TCT No. 22813 in the name of Severino Manotok was not established by the
evidence on record. There is likewise no copy of a "duly executed certificate of sale" "on file" with the DENR regional office. In the absence
of an existing certificate of title in the name of the predecessor-in-interest of the Manotoks and certificate of sale on file with the
DENR/CENRO, there is nothing to confirm and validate through the application of RA 9443.

Moreover, RA 9443 expressly excludes from its coverage those cases involving certificates of title which were shown to have been
fraudulently or irregularly issued. As the reconstitution and remand proceedings in these cases revealed, the Manotoks’ title to the subject
friar land, just like the Barques and Manahans, is seriously flawed. The Court cannot allow them now to invoke the benefit of confirmation
and validation of ownership of friar lands under duly executed documents, which they never had in the first place. Strict application by the
courts of the mandatory provisions of the Friar Lands Act is justified by the laudable policy behind its enactment -- to ensure that the lands
acquired by the government would go to the actual occupants and settlers who were given preference in their distribution.33

The dissent reiterates that the existence of Sale Certificate No. 1054 was clearly and convincingly established by the original of
Assignment of Sale Certificate No. 1054 dated May 4, 1923 between M. Teodoro and Severino Manotok as assignors and Severino
Manotok as assignee (approved by the Director of Lands on June 23, 1923), which is on file with the LMB, as well as the Deed of
Conveyance No. 29204 secured from the National Archives which is the repository of government and official documents, the original of
Official Receipt No. 675257 dated 20 February 1920 for certified copy of Assignment of Sale Certificate No. 1054 on Lot 823 and the
original of the Provincial Assessor’s declaration of title in Severino Manotok’s name for tax purposes on August 9, 1933 assessing him
beginning with the year 1933. The dissent further listed some of those alleged sale certificates, assignment deeds and deeds of
conveyance either signed by the Director of Lands only or unsigned by both Director of Lands and Secretary of Interior/Natural Resources,
gathered by the Manotoks from the LMB. It was stressed that if MO 16-05 is not applied to these huge tracts of land within and outside
Metro Manila, "[H]undreds of thousands, if not millions, of landowners would surely be dispossessed of their lands in these areas," "a
blow to the integrity of our Torrens system and the stability of land titles in this country."

The Court has thoroughly examined the evidence on record and exhaustively discussed the merits of the Manotoks’ ownership claim over
Lot 823, in the light of established precedents interpreting the provisions of the Friar Lands Act. The dissent even accused the majority
of mistakenly denigrating the records of the National Archives which, under R.A. No. 9470 enacted on May 21, 2007, is mandated to
store and preserve "any public archive transferred to the National Archives" and tasked with issuing certified true copies or certifications
on public archives and for extracts thereof.

The Friar Lands Act mandated a system of recording all sale contracts to be implemented by the Director of Lands, which has come to
be known as the Friar Lands Sales Registry.

SEC. 6. The title, deeds and instruments of conveyance pertaining to the lands in each province, when executed and delivered by said
grantors to the Government and placed in the keeping of the Chief of the Bureau of Public Lands, as above provided, shall be by him
transmitted to the register of deeds of each province in which any part of said lands lies, for registration in accordance with law. But before
transmitting the title, deeds, and instruments of conveyance in this section mentioned to the register of deeds of each province for
registration, the Chief of the Bureau of Public Lands shall record all such deeds and instruments at length in one or more books to be
provided by him for that purpose and retained in the Bureau of Public Lands, when duly certified by him shall be received in all courts of
the Philippine Islands as sufficient evidence of the contents of the instrument so recorded whenever it is not practicable to produce the
originals in court. (Section 1, Act No. 1287).

It is thus the primary duty of the Chief of the Bureau of Public Lands to record all these deeds and instruments in sales registry books
which shall be retained in the Bureau of Public Lands. Unfortunately, the LMB failed to produce the sales registry book in court, which
could have clearly shown the names of claimants, the particular lots and areas applied for, the sale certificates issued and other pertinent
information on the sale of friar lands within the Piedad Estate. Witness Teresita J. Reyes, a retired Assistant Chief of the Records
Management Division (RMD), LMB who was presented by the Manahans, testified that when the LMB was decentralized, the sales
registry books pertaining to friar lands were supposedly turned over to the regional offices. These consisted of copies of the appropriate
pages of the sales registry books in the LMB RMD main office which has an inventory of lots subject of deeds of conveyance an d sales
certificates. However, Reyes said that the sales registry book itself is no longer with the RMD. On the other hand, the alleged affidavit of
Secretary Defensor dated November 11, 2010 states that MO 16-05 was intended to address situations when deeds of conveyance
lacked the signature of the Secretary of Agriculture and Commerce, or such deeds or records from which the Secretary’s signature or
approval may be verified were lost or unavailable.

Whether the friar lands registry book is still available in the LMB or properly turned over to the regional offices remains unclear. With the
statutorily prescribed record-keeping of sales of friar lands apparently in disarray, it behooves on the courts to be more judicious in settling
conflicting claims over friar lands. Titles with serious flaws must still be carefully scrutinized in each case. Thus, we find that the approach
in Alonso remains as the more rational and prudent course than the wholesale ratification introduced by MO 16-05.1âwphi1

The prospect of litigants losing friar lands they have possessed for years or decades had never deterred courts from upholding the
stringent requirements of the law for a valid acquisition of these lands. The court’s duty is to apply the law. Petitioners’ concern for other
landowners which may be similarly affected by our ruling is, without doubt, a legitimate one. The remedy though lies elsewhere -- in the
legislature, as what R.A. 9443 sought to rectify.
WHEREFORE, the present motions for reconsideration are all hereby DENIED with FINALITY.

DE LOS REYES VS. MUNICIPALITY OF KALIBO

FACTS:

Jose Peralta owns a land in Kalibo, which through accretion, land was added to the said lot. When he died, the lot together with the
supposed area of accretion was transferred to his son, Juanito Peralta. While the area of accretion was apportioned and registered for
tax declaration purposes under the names of siblings Juanito, Javier, Josephine, and Julius. On the other hand, the Municipality of Kalibo,
through its then Mayor Diego Luces and the member of its Sangguniang Bayan, sought to convert more or less four (4) hectares of said
area of accretion into a garbage dumpsite. Juanito, opposed said project in a letter. Despite his opposition, the Municipality of Kalibo
continued the project under the justification that the contested property is actually part of the public domain. The Peraltas filed a complaint
for quieting of title over the subject properties.

ISSUE:

Whether or not the subject parcels of land are part of the public domain.

RULING:

YES! In order that an action for quieting of title may prosper, the plaintiff must have legal or equitable title to, or interest in, the property
which is the subject matter of the action. While legal title denotes registered ownership, equitable title means beneficial ownership. In the
absences of such legal or equitable title, or interest, there is no cloud to be prevented or removed. Likewise, the plaintiff must show that
the deed, claim, encumbrance, or proceeding that purportedly casts a cloud on their title is in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy.

Art. 457 of the Civil Code of the Philippines, under which the Peraltas claim ownership over the disputed parcels of land, provides:

Art. 457. To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the
current of the waters.

Accretion is the process whereby the soil is deposited along the banks of rivers. The deposit of soil, to be considered accretion, must be:
(a) gradual and imperceptible; (b) made through the effects of the current of the water; and (c) taking place on land adjacent to the banks
of rivers.

Here, Ignacio characterized the land in question as swampy and its increase in size as the effect of the change of the shoreline of the
Visayan Sea, and not through the gradual deposits of soil coming from the river or the sea. Also, Baltazar Gerardo, the Officer-in-Charge
of the Community Environment and Natural Resources Office of the Bureau of Lands, found upon inspection in 1987 that the subject area
was predominantly composed of sand rather than soil. One of the plaintiffs, Javier, also testified that in 1974 or 1976, the Visayan Sea
was around one (1) kilometer from the land in question, and in 2003, the distance already became around three (3) kilometers, giving the
impression that the increment was actually the result of additional area of sand deposits left by the sea when it had receded, and not by
gradual deposits of soil or sediment caused by the action of water. In addition, the DENR has remained firm and consistent in classifying
the area as land of the public domain for being part of either the Visayan Sea of the Sooc Riverbed and is reached by tide water. Further,
the Sheriff’s Report shows that when he conducted an ocular inspection of the area, part of it was reached by the tide. At around 11:30am,
he was able to measure the deepest portion of the high tide at around nineteen (19) inches, and its wideness at five (5) meters near the
concrete wall.

Indeed by reason of their special knowledge and expertise over matters falling under their jurisdiction, administrative agencies, like the
DENR, are in a better position to pass judgment on the same, and their findings of fact are generally accorded great respect, if not finality,
by the courts. Such findings must be respected as long as they are supported by substantial evidence, even if such evidence is not
overwhelming or even preponderant. Hence, the questionable character of the land, which could most probably be part of the public
domain, indeed bars Jose from validly transferring the increment to any of his successors.

Indubitably, the plaintiffs are merely successors who derived their alleged right of ownership from tax declarations. But neither can they
validly rely on said tax declarations and the supposed actual, open, continuous, exclusive, and notorious possession of the property by
their predecessors-in-interest. Any person who claims ownership by virtue of tax declarations must also prove that he has been in actual
possession of the property. Thus, proof that the property involved had been declared for taxation purposes for a certain period of time,
does not constitute proof of possession, nor is it proof of ownership, in the absence of the claimant’s actual possession of said property.
In the case at bar, the Peraltas failed to adequately prove their possession and that of their predecessors-in-interest.

CALMA VS. LACHICA

FACTS:

FACTS: Respondent Atty. Jose Lachica claims to be the owner of a 20,000 sq.m. parcel of land in Cabanatuan City covered by TCT No.
T-28380, having acquired the same through sale from Ceferino Tolentino. The title to said property was also delivered to him in 1974 and
he has been in actual physical possession of the property since then. However, the 1974 Deed of Sale was lost so the parties executed
a new Deed of Sale executed on April 29, 1979. Respondent had to travel to far-away places because of his job in the government but
he continued to possess the entire property through his helper. In 1981, he caused the annotation of a Notice of Adverse Claim on TCT
No. T-28380. After the notarization of the 1979 Deed of Sale in 1986, Ceferino and his son Ricardo requested respondent to allow them
to cultivate the 5,000 sq.m. portion of the subject land and in consideration, they would process the transfer of the title to respondent’s
name. Respondent agreed out of trust. In 2001, respondent returned to Cabanatuan and found that title to the property was transferred
to Ricardo’s name, which was in turn cancelled and transferred under petitioner Emilio Calma’s name. Respondent argued that the sale
between Ceferino and Ricardo was null and void for being executed with fraud and that that not only was Ricardo in full knowledge of
the sale of the subject property to him by Ceferino, but also his adverse claim was evidently annotated in the latter's title and carried over
to Ricardo's title. Respondent filed a petition for the annulment of deeds of sale and cancellation of title petitioner.

ISSUE:

Whether or not respondent Calma is a buyer in good faith

RULING:

YES! Every person dealing with registered land may safely rely on the correctness of the COT issued therefor and is in no way obliged
to go beyond it to determine the condition of the property unless the party has knowledge of a defect or the lack of title in his vendor or of
facts and circumstances that would impel a reasonably cautious man to make further inquiry. In the case at bar, petitioner was never
remiss in his duty of ensuring that the property that he was going to purchase had a clean title. Despite Ricardo's title being clean on its
face, petitioner still conducted an investigation to check its authenticity and status with the RD and the mortgagee-bank. Thus, petitioner
was proven to be in good faith. The CA’s conclusion that the annotation of the adverse claim on Ceferino's title and carried over to
Ricardo's title for a total of 13 years before it was cancelled should have aroused suspicion have no factual or legal basis. What is
essential on the matter of petitioner's good faith in the acquisition of the subject property is the cancellation of such adverse claim, which
clearly appears on the face of Ricardo's title. Even the defect in Ricardo's title due to his bad faith in the acquisition of the subject property,
as found by both the RTC and the CA, should not affect petitioner's rights as an innocent purchaser for value. Under Article 1544 of the
Civil Code, petitioner's right as an innocent purchaser for value who was able to register his acquisition of the subject property should
prevail over the unregistered sale of the same to the respondent.

DE LA CRUZ VS. DOMINGO

Factual Antecedents

Respondent Ireneo Domingo (Domingo) is the registered owner of a parcel of land in San Miguel (Mambarao), Quezon, Nueva Ecija
while petitioner Regino Dela Cruz (Dela Cruz), on the other hand, was a farmer-beneficiary of three (3) parcels of land.

On January 30, 2006, Domingo filed a case tbr recovery of possession with the DARAB Nueva Ecija against Dela Cruz.. In his Petition.6
Domingo claimed that Dela Cruz was in possession by mere tolerance of his land covered by TCT EP-82013, and the latter refused to
vacate the same even after demand and mediation before the Barangay Agrarian Reform Committee. Thus, Domingo prayed that as
owner of the land occupied by Dela Cruz, he be placed in possession thereof.

Domingo immediately thereafter filed two more cases for recovery of possession against Dela Cruz before the DARAB, docketed as
DARAB Case Nos. 299 and 300, relative to his land covered by TCT EP-82013 and TCT EP-82015.

Dela Cruz failed to timely file an answer to the three petitions, for which reason a consolidated Decision dated April 25, 2006 was rendered
by DARAB Provincial Adjudicator Marvin Bernal ordering Dela Cruz to vacate Domingo's lands.7

Dela Cruz filed a motion for n. consideration with motion to admit his answer.

Without awaiting the resolution of his motions for reconsideration and to admit answer in DARAB Case Nos. 298-300, Dela Cruz filed
DARAB Case No. 372 (or 372'NNE'06) for annulment of TCT EP-82013 and TCT EP-82015. He claimed in his Petition8that Domingo
sold his lands (subsequently covered by TCT EP-82013 and TCT EP-82015) to one Jovita Vda. de Fernando (Fernando); that Fernando
sold the same to him (Dela Cruz), and to prove the sale, he attached Fernando's Sinumpaang Salaysay9 and also the Sinumpaang
Salaysay10 of two disinterested persons attesting to the fact that Domingo sold the lands, totaling 12,500 square meters, to Fernando;
that he (Dela Cruz) took possession of the said lands; that in 1978, he was issued Certificate of Land Transfer No. 0401815 (CLT 0401815)
covering 12,280 square meters of the said 12,500-square meter land;11 that he has fully paid the cost of the said lands; that he later
found out that his land covered by CLT 0401815 was subsequently awarded to Domingo and registered under TCT EP-82013 and TCT
EP-82015; that said registration was made through fraud, deceit and false machinations; and that Domingo could not have been a valid
beneficiary of the said lands, since he was physically disabled ("lumpo")· since birth. Dela Cruz prayed that Domingo's titles be annulled
and cancelled; that he be declared owner of the lands covered thereby; that new titles be issued in his name; and that he be awarded
attorney's fees and litigation expenses.

Domingo filed his Answer with Motion to Dismiss,12 arguing that Dela Cruz's CLT 0401815 covers a parcel of land different from his
lands; that he (Domingo) is in actual possession of the lands covered by TCT EP-82013 and TCT EP-82015; that Dela Cruz is guilty of
forum shopping for filing the case in spite of the fact that a consolidated Decision has been issued in DARAB Case Nos. 298-300 against
him; and for these reasons, the case should be dismissed.

On September 26, 2007, a Decision13 was rendered by Talavera, Nueva Ecija DARAB Provincial Adjudicator Marvin Bernal, who also
rendered the consolidated Decision in DARAB Case Nos. 298-300. It was held that Dela Cruz failed to prove that the subject parcels of
land were sold to him; that the pieces of documentary evidence he submitted do not sufficiently prove a sale in his favor; that the lands
belong to Domingo as the awardee thereof; that Domingo's disability does not disqualify him from becoming a farmer-beneficiary under
the agrarian laws; that Dela Cruz's allegations of fraud, deceit and false machinations have not been substantially proved; and that Dela
Cruz merely holds a certificate of land transfer covering the subject lands, which does not grant ownership, as opposed to Domingo's
transfer certificate of title. Thus, it was decreed that -
WHEREFORE, in view of all the foregoing, judgment is hereby rendered by DISMISSING the instant petition, as it is hereby DISMISSED
for lack of merit.

All claims and other counterclaims the parties may have against each other [are] likewise dismissed for want of evidence.

SO ORDERED.14
Ruling of the DARAB

Dela Cruz took the matter before the DARAB via appeal docketed as DARAB Case No. 15566. On December 3, 2009, the DARAB issued
its Decision15 declaring as follows:
[Dela Cruz] claimed that he is the farmer-beneficiary of the involved landholding. Further, he alleged that the issuance of the said EPs to
[Domingo] was tainted with fraud, false machination and deceit, if not mistalce x x x. This allegation, however, was denied by the latter x
x x. The Board finds no merit on [Dela Cruz's] allegation as this was only supported by certification/affidavits, receipts, and statements of
accounts, which are not considered substantial.

Besides[,] the landholding referred to by [Dela Cruz] is located at San Manuel (Quezon, Nueva Ecija), and not San Miguel (where the
landholding involved herein is located), thereby conoborating [Domingo's] claim that [Dela Cruz] is claiming a different landholding not
subject hereof x x x.

[Dela Cruz] failed to overcome the presumption of regularity in the issuance of the Emancipation Patents (EPs) sought to be cancelled
herein.

WHEREFORE, premises considered, the appeal is hereby DISMISSED and the decision appealed from is AFFIRMED in toto.

SO ORDERED.16 (Citations omitted)

Dela Cruz moved to reconsider,17 but in an April 5, 2010 Resolution,18 the DARAB held its ground.

Ruling of the Court of Appeals

Petitioners thus filed a Petition for Review, docketed as CA-G.R. SP No. 114223, questioning the DARAB's pronouncements.

On April 11, 2013, the CA issued the assailed Decision dismissing the Petition on the ground of forum shopping. It held that Dela Cruz
should have raised his claim of ownership and possession as a counterclaim in DARAB Case Nos. 298-300; that since Domingo's cases
for recovery of possession or reconveyance involved an assertion of his ownership over the subject parcels of land, Dela Cruz should
have interposed his own claim in these cases and sought annulment and cancellation of titles therein; and that since the parties, issues,
and causes of action in these cases are identical, a decision in one will constitute res judicata in the others.

Petitioners moved to reconsider,19 but the CA stood firm. Hence, the present Petition.

Issues

Petitioners submit the following issues for resolution:

WHETHER FORUM SHOPPING AND LITIS PENDENTIA ARE VIOLATED IN THE CASE AT BAR.

WHETHER THE CASE OF CANCELLATION OF EMANCIPATION PATENTS AND CERTIFICATES OF TITLES CAN BE MADE AS
COMPULSORY COUNTERCLAIM WITHOUT VIOLATING THE RULE THAT CERTIFICATE[S] OF TITLE CANNOT BE
COLLATERALLY ATTACKED.20
Petitioners' Arguments

Praying that the assailed CA pronouncements be set aside, and that Domingo's titles be annulled and in their stead new titles be issued
in their name, petitioners maintain in their Petition and Reply21 that there is no forum shopping in Dela Cruz's filing ofDARAB Case No.
372 during the pendency of DARAB Case Nos. 298-300; that the latter cases involve merely the issue of recovery of possession and not
ownership, which is the issue in DARAB Case No. 372; that Dela Cruz could not have raised the issue of ownership in DARAB Case
Nos. 298-300, as this is tantamount to a collateral attack upon Domingo's titles, which is why he (Dela Cruz) filed a separate case for
annulment and cancellation of said titles; that while Dela Cruz was the farmer-beneficiary of three parcels of land, he was "mysteriously"
issued only two Emancipation Patents (EP), and no EP was issued with respect to his 1.228-hectare parcel of land, which is now covered
by Domingo's titles TCT EP-82013 and TCT EP-82015, despite the fact that he (Dela Cruz) has fully paid for the same; that Domingo is
incapable of personally cultivating the lands awarded to him because he is suffering from physical disability, and thus he is not a qualified
farmer-beneficiary in contemplation of agrarian laws; and that contrary to what the DARAB pronounced, Dela Cruz was able to prove his
case by substantial evidence, which thus entitles him to the remedies he seeks.

Domingo's Arguments

In his Comment22 seeking affirmance of the questioned CA dispositions, Domingo counters that the CA is correct in finding that Dela
Cruz is guilty of forum shopping; that there is a pending appeal by Dela Cruz of the consolidated Decision in DARAB Case Nos. 298-300,
and a decision in said appeal would constitute res judicata in the instant case; and that Dela Cruz should have interposed his claim of
ownership by way of counterclaim in DARAB Case Nos. 298-300.

Our Ruling

The Court denies the Petition.

Dela Cruz asserted that he is the owner of the parcels of land covered by Domingo's TCT EP-82013 and TCT EP-82015, and that these
lands are covered by his CLT 0401815; and for this reason, Domingo's titles should be cancelled and annulled. This is the essence of his
claim.

However, a certificate of land transfer does not vest ownership in the holder thereof. In Martillano v. Court of Appeals,23 this Court held
that
x x x A certificate of land transfer merely evinces that the grantee thereof is qualified to, in the words of Pagtalunan, 'avail of the statutory
mechanisms for the acquisition of ownership of the land tilled by him as provided under Pres. Decree No. 27.' It is not a muniment of title
that vests upon the fanner/grantee absolute ownership of his tillage. On the other hand, an emancipation patent, while it presupposes
that the grantee thereof shall have already complied with all the requirements prescribed under Presidential Decree No. 27, serves as a
basis for the issuance of a transfer certificate of title. It is the issuance of this emancipation patent that conclusively entitles the
farmer/grantee of the rights of absolute ownership. x x x24 (Citations omitted)
Dela Cruz must have relied on past interpretations relative to the document he possesses. But these no longer hold true.
It is true that in past decisions of this Court, in particular Torres v. Ventura (which was cited by the DARAB Appeal Board) and Quiban v.
Butalid (which was relied upon by the CA), we held that a tenant issued a CLT is deemed the owner of the land. This is because PD 27
states that '(t)he tenant farmer, whether in land classified as landed estate or not, shall be deemed owner of a portion constituting a
family-size farm of five (5) hectares if not irrigated and three (3) hectares if irrigated.'

But, as correctly argued by PDB, more current decisions of this Court (where the interpretation of the phrase 'deemed owner' was directly
tackled) have clarified these pronouncements by distinguishing the legal effects of a CLT and those of an emancipation patent. Martillano
v. Court of Appeals is instructive:
Both instruments have varying legal effects and implications insofar as the grantee's entitlements to his landholdings. A certificate of land
transfer merely evinces that the grantee thereof is qualified to, in the words of Pagtalunan, 'avail of the statutory mechanisms for the
acquisition of ownership of the land tilled by him as provided under Pres. Decree No. 27.' It is not a muniment of title that vests upon the
farmer/grantee absolute ownership of his tillage. On the other hand, an emancipation patent, while it presupposes that the grantee thereof
shall have already complied with all the requirements prescribed under Presidential Decree No. 27, serves as a basis for the issuance of
a transfer certificate of title. It is the issuance of this emancipation patent that conclusively entitles the farmer/grantee of the rights of
absolute ownership. Pagtalunan distinctly recognizes this point when it said that:
It is the emancipation patent which constitutes conclusive authority for the issuance of an Original Certificate of Transfer, or a Transfer
Certificate of Title, in the name of the grantee . . .

Clearly, it is only after compliance with the above conditions which entitle a farmer/grantee to an emancipation patent that he acquires
the vested right of absolute ownership in the landholding - a right which has become fixed and established, and is no longer open to doubt
or controversy. At best, the fanner/grantee, prior to compliance with these conditions, merely possesses a contingent or expectant right
of ownership over the landholding.
Given that Garcia is a holder of a CLT but not of an emancipation patent, full ownership of the land has not yet vested in him. Hence,
there is no basis for the CA and DARAB Appeal Board to direct the bank to turn over the land to him.25 (Citations omitted)
Petitioners concede that Dela Cruz was not issued an EP over the subject property; he only has CLT 0401815. On the other hand,
Domingo was issued EPs over the same property, after which transfer certificates of title, TCT EP-82013 and TCT EP-82015, were issued
to him. Between the two of them, Domingo is deemed the owner of the subject lands, and Dela Cruz has no valid claim. For some reason
or other, Dela Cruz was not issued an EP for the subject lands, while for other lands, he was granted patents. This can only mean that
for the subject lands, he failed to qualify as owner thereof under the government's agrarian reform program.

For this reason alone, it is clear that Dela Cruz has no cause of action against Domingo. His claim of ownership, which is the sole
foundation for his case in DARAB Case No. 372, has fallen. His accompanying claims of fraud, deceit, and machinations; prior sale in his
favor; and disqualification of Domingo as farmer-beneficiary do not deserve consideration by this Court. These have been passed upon
by the DARAB itself and on two levels, no less. It need not be said that the Department of Agrarian Reform, through the DARAB, is in a
"better position to resolve agrarian disputes, being the administrative agency possessing the necessary expertise on the matter and
vested with primary jurisdiction to determine and adjudicate agrarian reform controversies."26

With the view taken of the case, there is no need to discuss the issues raised by the parties. They are not essential to the proper disposition
of this simple case.

WHEREFORE, the Petition is DENIED.

CABRAL VS. HEAIRS OF ADOLFO

Petitioner claims that she is the registered owner of several parcels of land situated, at Barangay Purok (formerly Iba), Meycauayan,
Bulacan, originally covered by Original Certificate of Title (OCT) No. 0-1670, subsequently renumbered as OCT No. 0-220 (M), of the
Registry of Deeds of Meycauayan, Bulacan.4 The property subject of the instant case are portions of Lot 4 of Plan Psu-164390 covered
by the said OCT No. 0-1670.
On October 21, 1972, the Ministry of Agrarian Reform subjected the said land under the coverage of the Operation Land Transfer (OLT)
program of the government under Presidential Decree (P.D.) No. 27.5

In July 1973, petitioner sought to convert her landholdings, which include not only the subject property but also her lands in Marilao and
Meycauayan, to non-agricultural purposes.6 In his 2nd Indorsement Letter7 to the DAR Secretary dated October 1, 1973, DAR District
Officer Fernando Ortega, stated that per the reports of the Agrarian Reform Team, the subject property was not included in the OLT
program under P.D. No. 27, nor has any portion thereof been transferred to a tenant. Thus, District Officer Ortega recommended the
conversion of the same into residential, commercial, industrial, or other purposes.8

On April 25, 1988, Emancipation Patents (EPs) were issued to Gregoria Adolfo, Gregorio Lazaro, Florencio Adolfo, and Elias Policarpio
pursuant to the OLT program covering the subject property. Corresponding Transfer Certificates of Titles (TCTs) were then issued to
herein respondents Florencio Adolfo on October 24, 1989 and Elias Policarpio on November 8, 1989 upon registration of their respective
EPs with the Register of Deeds of Meycauayan, Bulacan9 as follows:10
NAMES
LOT NO.
EP NO.
TCT NO.
AREA (sq. m.)
Florencio Adolfo
1
A-117858
EP-003(M)
29759
Florencio Adolfo
2
A-117859-H
EP-004(M)
957
Gregoria Adolfo
3
A-117978-H
EP-005(M)
630
Gregoria Adolfo
4
A-117979
EP-006(M)
21793
Gregorio Lazaro
5
A-117980-H
EP-007(M)
839
Gregorio Lazaro
10
A-117981
EP-008(M)
16906
Elias Policarpio
11
A-117983
EP-010(M)
995
Elias Policarpio
12
A-117982-H
EP-009(M)
18019
On January 16, 1990, petitioner filed a petition before the Barangay Agrarian Reform Council (BARC) for the cancellation of the EPs
issued in favor of Florencio Adolfo, Gregorio Lazaro, Gregoria Adolfo, and Elias Policarpio.11 On January 19, 1990, petitioner filed another
petition for cancellation of the said EPs and TCTs before the DAR. The said petition was, however, forwarded to the DAR Regional
Director, who dismissed the case. In a case decided by this Court in 2001 entitled Victoria P. Cabral v. CA,12 however, this Court held
that the Regional Director had no jurisdiction over the case as it is the PARAD who has jurisdiction over cases involving cancellation of
EPs.13

Meanwhile, in 1994, petitioner filed an OLT Letter Protest before the DAR Regional Director, questioning the coverage of her landholdings
under P.D. No. 27, on the ground that the same had already been classified as either residential, commercial, or industrial.14
In its November 16, 1994 Order, the DAR Regional Director denied the said OLT protest, finding that despite the reclassification of the
subject parcels of land, the same will not be a bar in placing the said lands under the OLT program, considering that petitioner's
landholdings exceeded 24 hectares.15

On appeal, the then DAR Secretary Ernesto D. Garilao, in his Order16 dated July 12, 1996, affirmed the DAR Regional Director's Order,
declaring that the subject landholdings are covered by the OLT program under P.D. No. 27 as it was only after the landholdings were
placed under the OLT program on October 21, 1972 when it was classified as within the residential zone. The Order cited Administrative
Order (A.O.) No. 06, series of 1994,17 which provides that reclassification of lands to non-agricultural uses shall not operate to divest
tenant-farmers of their rights over lands covered by P.D. No. 27, which were vested prior to June 15, 1988, and also Executive Order
(E.O.) No. 22818 which provides that tenant-farmers are deemed full owners of the land they acquired by virtue of P.D. No. 27 as of
October 21, 1972. In fine, Secretary Garilao concluded that the petitioner's landholdings are covered by P.D. No. 27.19

On August 16, 2003, petitioner filed a Petition for Cancellation of Emancipation Patents and Torrens Title20 before the Office of the
Provincial Agrarian Reform Adjudicator (PARAD) of Malolos City, Bulacan against the said respondents and the Department of Agrarian
Reform (DAR), Region III. In the main, petitioner contended that the issuance of the said EPs and TCTs were violative of applicable
agrarian laws considering that the subject property was already classified as residential, hence, not covered by P.D. No. 27. Petitioner
invoked a Certification21 dated February 24, 1983 issued by the Zoning Administrator of the Office of the HSRC Deputized Zoning
Administration of Meycauayan, Bulacan, and Certification22 dated August 28, 1989 issued by the Zoning Administrator of Meycauayan,
Bulacan, both attesting to the classification of the subject property as within the residential zone. Petitioner also averred that the said EPs
were issued without due process and without payment of just compensation.23

On June 18, 2004, the Provincial Reform Adjudicator (PARAD) rendered a Decision24 in favor of the petitioner,
thus:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, judgment is hereby rendered, as follows:

1. Ordering the Register of Deeds of Bulacan to cancel the Emancipation Patent Titles issued to the private respondents, as follows:
FLOPRENCIO [sic] ADOLFO - TCT No. EP-003, FLORECNCIO [sic] ADOLFO TCT No. RP-004, GREGORIA ADOLFO TCT No. EP-
005, GREGORIA ADOLFO - TCT No. EP-006, GREGORIO LAZARO - TCT No. EP-008, ELIAS POLICARPIO - TCT No. 010, ELIAS
POLICARPIO - TCT No. 009.

2. Ordering the private respondents and all persons claiming rights under them to vacate the landholdings under their respective
possessions and surrender the same to petition.

3. Ordering the Register of Deeds of Bulacan to revived (sic) OCT No. 0-220-(M) (formerly OCT No. 0-1670 registered under the name
of petitioner Victoria Cabral), insofar as Lot 4 thereof is concerned.

SO ORDERED.25
Aggrieved, Gregoria Adolfo, Gregorio Lazaro, Heirs of Florencio Adolfo, and Heirs of Elias Policarpio appealed the said decision to the
Department of Agrarian Reform Adjudication Board (DARAB).

In its July 29, 2008 Decision26, the DARAB affirmed PARAD's Decision, thus:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the Appeal is DENIED for lack of merit and the assailed Decision is hereby affirmed.

SO ORDERED.27
Undaunted, herein respondents elevated the case to the CA for review.

In its assailed Decision, the CA reversed and set aside the DARAB Decision. The CA found that the subject land was never converted
into a residential land and, therefore, not exempt from the coverage of the government's OLT program under P.D. No. 27, relying heavily
upon Secretary Gari1ao's Order above-cited. Hence, the CA concluded that when the predecessors-in-interest of the herein respondents
were identified as farmer-beneficiaries and were given EPs/TCTs, they were deemed owners thereof. The CA disposed,
thus:chanRoblesvirtualLawlibrary
WHEREFORE, the July 29, 2008 Decision of the [DARAB] is hereby REVERSED and SET ASIDE. The Petition for Cancellation of
Emancipation Patents and Torrens Titles (Case No. 2-03-02-0242'03) is hereby ordered DISMISSED.

SO ORDERED.28
Respondents' Motion for Reconsideration was denied in the DARAB's Resolution29 dated March 11, 2009.

Hence, this petition.

G.R. No. 198160

Before We proceed to discuss the instant petition, it is noteworthy that the issue on the coverage of Lot 4 under the OLT program pursuant
to P.D. No. 27 had already been settled by this Court in its Decision dated August 31, 2016 in the case of Victoria P. Cabral v. Gregoria
Adolfo, Gregorio Lazaro, and Heirs of Elias Policarpio.30

The said case involves the same issues, same assailed decisions of the PARAD and DARAB, same subject property, and same parties
(except Gregoria Adolfo and Gregorio Lazaro who were parties in G.R. No. 198160 but not in this case, and Florencio Adolfo who is a
party herein but not in G.R. No. 198160).
Essentially, this Court upheld the findings of the PARAD and DARAB, recognizing the zoning reclassification made on the subject property
as evidenced by the Certifications dated February 24, 1983 and August 28, 1989 issued by the zoning administrator of Meycauayan,
Bulacan above-cited. We also considered therein the 2nd Indorsement Letter of then DAR District Officer Ortega, declaring that
petitioner's landholdings were not covered by the OLT program. The Court also found that no CLTs were issued in favor of the respondents
therein, which bolstered the fact that the subject property was not covered by P.D. No. 27.

Hence, as it was established that Lot 4 was not covered by the OLT program, this Court declared that the EPs covering the subject lands
therein were erroneously issued to the respondents.31

With this judicial precedent in mind, We now proceed to resolve the instant petition.

Issue

Did the CA err in reversing the PARAD and DARAB's order of cancelling the subject EPs/TCTs?

The Court's Ruling

We answer in the affirmative.

DAR Administrative Order No. 02-9432 provides that a registered EP or Certificate of Land Ownership Award (CLOA) may be cancelled
on the following grounds, to wit:chanRoblesvirtualLawlibrary
Grounds for the cancellation of registered EPs or CLOAs may include but not limited to the following:

1. Misuse or diversion of financial and support services extended to the ARB (Agrarian Reform Beneficiaries); (Section 37 of R.A. No.
6657)

2. Misuse of the land; (Section 22 of R.A. No. 6657)

3. Material misrepresentation of the ARB's basic qualifications as provided under Section 22 of R.A. No. 6657, P.D. No. 27, and other
agrarian laws;

4. Illegal conversion by the ARB; (Cf. Section 73, Paragraphs C and E of R.A. No. 6657)

5. Sale, transfer, lease or other forms of conveyance by a beneficiary of the right to use or any other usufructuary right over the land
acquired by virtue of being a beneficiary, in order to circumvent the provisions of Section 73 of R.A. No. 6657, P.D. No. 27, and other
agrarian laws. However, if the land has been acquired under P.D. No. 27/E.O. No. 228, ownership may be transferred after full payment
of amortization by the beneficiary; (Sec. 6 of E.O. No. 228)

6. Default in the obligation to pay an aggregate of three (3) consecutive amortizations in case of voluntary land transfer/direct payment
scheme, except in cases of fortuitous events and force majeure;

7. Failure of the ARBs to pay for at least three (3) annual amortizations to the LBP, except in cases of fortuitous events and force majeure;
(Section 26 of R.A. No. 6657)

8. Neglect or abandonment of the awarded land continuously for a period of two (2) calendar years as determined by the Secretary or his
authorized representative; (Section 22 of R.A. No. 6657)

9. The land is found to be exempt/excluded from P.D. No. 27/E.O. No. 228 or CARP coverage or to be part of the landowners' retained
area as determined by the Secretary or his authorized representative; and

10. Other grounds that will circumvent laws related to the implementation of agrarian reform program.33 (emphasis supplied)
In this case, petitioner maintains that the subject property is excluded from the coverage of P.D. No. 27 as it has already been classified
as residential land, invoking the Certifications dated February 24, 1983 and August 28, 1989 issued by the zoning administrator. Petitioner
also avers that as early as October 1, 1973, the DAR already made a declaration that her landholdings are not included under the OLT
program, and thus made a recommendation for the conversion of the same to residential, commercial, industrial, or other purposes.34 In
fine, petitioner argues that there was never any showing that the lands subject of the controversy were primarily devoted to rice and com
as to be covered by P.D. No. 27. Also, petitioner argues that the subject EPs were issued without compliance with the requirements for
its issuance under P.D. No. 27, such as the prior issuance of corresponding Certificates of Land Transfer (CLTs). Further, petitioner
alleges that her constitutional right to due process was violated as the issuance of the subject EPs was done without any notice or
consultation with her and without the payment of just compensation.35

The subect property (Lot 4) is not covered by the OLT program under P.D. No. 27.

The resolution of the instant controversy is primarily anchored upon the determination of whether the subject lands are covered by the
OLT program under P.D. No. 27.

As We have determined in G.R. No. 198160, Lot 4 had already been reclassified to non-agricultural uses and was, therefore, already
outside the coverage of the OLT program under P.D. No. 27.
The CA in this case, however, ruled otherwise, relying heavily upon the July 12, 1996 Order of then DAR Secretary Garilao. In the said
Order, Sec. Garilao cited AO 6-94, which states that "reclassification of lands to non-agricultural uses shall not operate to divest tenant-
farmers of their rights over lands covered by P.D. No. 27, which have vested prior to June 15, 1988," and EO 228, which provides that
"tenant-farmers are deemed full owners of the land they acquired by virtue of P.D. No. 27 as of October 21, 1972."36 Notably, respondents'
arguments are also grounded on these provisions.37

We differ.

As this Court has often stressed, factual findings of administrative bodies charged with their specific field of expertise, such as the PARAD
and the DARAB, are afforded great weight, nay, finality by the courts, and in the absence of substantial showing that such findings were
made from an erroneous estimation of the evidence presented, they are conclusive, and in the interest of stability of the governmental
structure, should not be disturbed.38 Contrary to the CA's conclusion, We find no cogent reason to disturb the said quasi-judicial agency's
findings. Consider:

(1) The July 12, 1996 Order of DAR Secretary Garilao involves parcels of land different from the subject property in the case at bar.

As can be gleaned from the said Order, the certifications of reclassification considered in the said case are as follows, to
wit:chanRoblesvirtualLawlibrary
1. Certification for TCT No. T-149964 (M) with an area of of [sic] 42,109 square meters that it is classified as RESIDENTIAL ZONE as
per Municipal Ordinance No. 43, Series of 1988 dated December 21, 1988.

2. Certification for TCT No. T-149928 (M) with an area of 20,954 square meters classified as INDUSTRIAL ZONE as per Municipal
Ordinance No. 43, Series 1988 dated December 21, 1988.

3. Certification for TCT No. T-0611 (M) with an area of 30,881 square meters classified as RESIDENTIAL ZONE per Municipal Ordinance
No. 43, Series of 1988 dated December 21, 1988.

4. Certification for TCT No. T-73.736 (M) (Lot 1-A) with an area of 3,020 square meters classified as RESIDENTIAL ZONE as per
Comprehensive Zoning Code dated October 14, 1987.

5. Certification for TCT No. T-73.737 (M) (Lot 1-A) with an area of 3,020 square meters classified as RESIDENTIAL ZONE as per
Comprehensive Zoning Code dated October 14, 1987.

6. Certification for OCT No. 0-1670 with an area of 12,299 square meters (Lot 2) classified as RESIDENTIAL ZONE as per Comprehensive
Zoning Code approved on November 7, 1990.39 (emphasis supplied)
Contrariwise, the subject property in the case at bar constitutes parcels of land covering certain portions of Lot 4 of Plan Psu-164390 of
OCT No. 0-1670. Clearly, thus, the CA erred in relying heavily on the said Order in reversing the PARAD and DARAB decisions.

(2) The records are bereft of proof that the subject lands are tenanted and devoted primarily to rice or corn production.

It bears stressing that P.D. No. 27, which implemented the OLT program, covers only tenanted rice or com lands. The requisites for
coverage under the OLT program are the following: (1) the land must be devoted to rice or com crops; and (2) there must be a system of
share-crop or lease tenancy obtaining therein.40

Neither of these requisites is present in this case.

(a) The subject property is not covered by the OLT because of its residential nature.

Again, as found by both the PARAD and the DARAB as early as October 1, 1973, the DAR, through District Officer Ortega, already
declared that the subject landholding is not included in the OLT program by virtue of the Agrarian Refonn Team's report that the subject
property is suited for residential, commercial, industrial, or other urban purposes considering its potential for national development.41
District Officer Ortega, thus, recommended for its conversion into residential, commercial, industrial, or other urban purposes.42

This Court, in G.R. No. 198160, sustained such findings, as well as the Certifications43 issued by the zoning administrator, attesting to
the classification of the property as being within the residential zone. Evidentiary weight is accorded to the said documents as the same
were issued by such officer having jurisdiction over the area where the land in question is situated and is, therefore, more familiar with
the property in issue.44 These certifications carried the presumption of regularity in its issuance and respondents have the burden of
overcoming this presumption45, which they failed to do.

(b) As to whether a tenancy relationship exists, petitioner insists that respondents are not her tenants. On the other hand, the respondents,
anchoring their rights upon P.D. No. 27, necessarily claim that there is a system of share-crop between them and the petitioner.

This Court has, time and again, held that occupancy and cultivation of an agricultural land will not ipso facto make one a de jure tenant.46
Independent and concrete evidence is necessary to prove personal cultivation, sharing of harvest, or consent of the landowner.47
Tenancy relationship cannot be presumed; the elements for its existence are explicit in law and cannot be done away by conjectures.48
Thus, as petitioner denies such tenancy relationship and it is respondents who assert the same, the latter has the burden to prove their
affirmative allegation of tenancy.49 Again, the respondents failed to discharge such burden as there is nothing on record that will provide
this Court factual basis to determine that indeed a crop-sharing agreement exists between the parties.
(c) Farmer-beneficiaries cannot be deemed full owners when there is no compliance with the procedure for the issuance of an EP under
P.D. No. 27 and related rules.

Thus, neither do We subscribe to Sec. Garilao's reasoning and respondents' argument that since the reclassication of the property was
made after the effectivity of P.D. No. 27, tenant-farmers enjoy a vested right and should be deemed as "full owners" of the property.

Indeed, under P.D. No. 27, tenant-farmers of rice and corn lands were deemed owners of the land they till as of October 21, 1972 or the
effectivity of the said law.50 This policy was intended to emancipate the tenant-farmers from the bondage of the soil.51 However, the
provision declaring tenant-farmers as owners as of October 21, 1972 should not be construed as automatically vesting upon them absolute
ownership over the land they are tilling.52

Certain requirements must also be complied with before full ownership is vested upon the tenant-farmers.53 Thus, in G.R. No. 198160,
We laid down the steps to be undertaken before an EP can be issued to effectively transfer the land to the tenant-farmers, to wit: first,
the identification of tenants, and the land covered by OLT; second, land survey and sketching of the actual cultivation of the tenant to
determine parcel size, boundaries, and possible land use; third, the issuance of the CLT. To ensure accuracy and safeguard against
falsification, these certificates are processed at the National Computer Center (NCC) at Camp Aguinaldo; fourth, valuation of the land
covered for amortization computation; fifth, amortization payments of tenant-tillers over afifteen (15) year period; and sixth, the issuance
of the EP.54

Furthermore, there are several supporting documents which a tenant-farmer must submit before he can receive the EP such as: (a)
Application for issuance of EP; (b) Applicant's (owner's) copy of the CLT; (c) Certification of the landowner and the Land Bank of the
Philippines that the applicant has tendered full payment of the parcel of land as described in the application and as actually tilled by him;
(d) Certification by the President of the Samahang Nayon or by the head of a farmers' cooperative duly confirmed by the municipal district
officer (MDO) of the Ministry of Local Government and Community Development (MLGCD) that the applicant is a full-fledged member of
a duly registered farmers' cooperative or a certification to these effect; (e) Copy of the technical (graphical) description of the land parcel
applied for prepared by the Bureau of Land Sketching Team (BLST) and approved by the regional director of the Bureau of Lands; (f)
Clearance from the MAR field team (MARFT) or the MAR District Office (MARDO) legal officer or trial attorney; or in their absence, a
clearance by the MARFT leader to the effect that the land parcel applied for is not subject of adverse claim, duly confirmed by the legal
officer or trial attorney of the MAR Regional Office or, in their absence, by the regional director; (g) Xerox copy of Official Receipts or
certification by the municipal treasurer showing that the applicant has fully paid or has effected up-to-date payment of the realty taxes
due on the land parcel applied for; and (h) Certification by the MARFT leader whether applicant has acquired farm machineries from the
MAR and/or from other government agencies.55

As We have held in the case of Association of Small Landowners in the Philippines, Inc. v. Sec. of Agrarian Reform:56
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as of October 21, 1972 and declared that he shall be
deemed the owner of a portion of land consisting of a family-sized farm except that no title to the land owned by him was to be actually
issued to him unless and until he had become a full-fledged member of a duly recognized farmers cooperative. It was understood,
however, that full payment of the just compensation also had to be made first, conformably to the constitutional requirement.

When E.O. No. 228, categorically stated in its Section 1 that:chanRoblesvirtualLawlibrary

All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they acquired by virtue of P.D. No. 27.
it was obviously referring to lands already validly acquired under the said decree, after proof of full-fledged membership in the farmers
cooperatives and full payment of just compensation. Hence, it was also perfectly proper for the Order to also provide in its Section 2 that
the lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 (pending transfer of ownership after full payment
of just compensation), shall be considered as advance payment for the land.

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on receipt by the landowner
of the corresponding payment or deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title
also remains with the landowner. No outright change of ownership is contemplated either.
Clearly, thus, prior to the compliance with the prescribed requirements, tenant-farmers have, at most, an inchoate right over the land they
were tilling.57

In this case, the records are bereft of evidence to show that the procedure above-enumerated was complied with by the respondents to
prove that the said provisional title was perfected, from the time that the entitlement to such right started pursuant to P.D. No. 27 or
specifically on October 21, 1972 and before the claimed land was reclassified.

Foremost, there was no CLT issued prior to the issuance of the subject EPs.

In recognition of the said inchoate right, a CLT is issued to a tenant-farmer to serve as a provisional title of ownership over the landholding
while the lot owner is awaiting full payment of just compensation or for as long as the tenant-farmer is an amortizing owner.58 The CLT
proves inchoate ownership of an agricultural land primarily devoted to rice or com production.59

In Del Castillo v. Orciga,60 We explained that land transfer under P.D. No. 27 is effected in two stages: first, the issuance of a CLT; and
second, the issuance of an EP. The first stage serves as the government's recognition of the tenant-farmer's inchoate right as "deemed
owners" of the land they till. The second stage perfects the title of the tenant-farmers and vests in them absolute ownership upon full
compliance with the prescribed requirements.61 As a preliminary step then, the CLT immediately serves as the tangible evidence of the
government's recognition of the the tenant-farmers' inchoate right and of the subjection of the land to the OLT program.62
To bolster the finding that the subject landholding was not covered by the OLT program, We echo the PARAD and DARAB pronouncement
that the fact that no CLTs were previously issued to the respondents signifies the non-inclusion of the subject lands under the coverage
of the OLT.63 Indeed, there is nothing in the records that will show that CLTs were issued in favor of the respondents before the issuance
of the subject EPs considering that, to reiterate, the issuance of a CLT is a proof that the property was previously covered by the OLT
program and proof of the government's recognition of the farmer-beneficiary's inchoate right over the same.

In G.R. No. 198160, this Court found that Elias Policarpio's TCTs, along with therein respondent Gregoria Adolfo's TCTs, were not derived
from a CLT. In this case, the CA cited a Certification64 from the DAR dated April 27, 2009 to conclude that CLTs were issued to the
respondents. A perusal of the said Certification, however, shows that only one of the lands being claimed by Florencio Adolfo was issued
a CLT (CLT No. 0-056491). The other person stated therein who was purportedly issued a CLT was Gregorio Lazaro, who is not a party
in this case. Hence, We are perplexed on why the CA sweepingly concluded that CLTs were issued to the respondents and applied the
same to this case.

At any rate, assuming that such Certification is valid, it could readily be seen that CLT No. 0-056491 was only issued on September 11,
1981 or nine years after the lot had supposedly been brought under the OLT program. The fact that as of October 1973 a determination
had already been made by the DAR Regional Director that the subject property was not covered by the OLT program is also telling. Thus,
We agree with the findings of the PARAD and DARAB that no CLTs were issued in this case, in violation of the procedure for the issuance
of an EP above-enumerated.

Likewise, there is no showing that petitioner was notified of the placement of her landholdings under the OLT program and, more
importantly, there was no proof that petitioner was paid just compensation therefor.

Land acquisition by virtue of P.D. No. 27 and Republic Act (R.A.) No. 665765 partakes of the nature of expropriation. In fact, jurisprudence
states that it is an extraordinary method of expropriating private property.66 As such, the law on the matter must be strictly construed.
Faithful compliance with legal provisions, especially those which relate to procedure for acquisition of expropriated lands should therefore
be observed. In expropriation proceedings, as in judicial proceedings, notice is part of the constitutional right to due process of law. It
informs the landowner of the State's intention to acquire private land upon payment of just compensation and gives him the opportunity
to present evidence that his landholding is not covered or is otherwise excused from the agrarian law.67

In this case, the respondents and the DAR failed to adduce evidence to prove actual notice to the petitioner and payment of just
compensation for the taking of the latter's property.

Indeed as We have settled in G.R. No. 198160,68 there is nothing on record that will show that the landholding was brought under the
OLT program, CLTs were issued prior to the issuance of the subject EPs, respondents are full-fledged members of a duly recognized
farmer's cooperative, they finished payment of amortizations, and that petitioner, as the landowner, was notified and paid just
compensation for the taking of her lands before the issuance of the subject EPs.

In this issue of compliance with the procedure, it must be remembered that the burden of proof lies with the party who asserts a right and
the quantum of evidence required by law in civil cases is preponderance of evidence.69 Preponderance of evidence is the weight, credit,
and value of the aggregate evidence on either side and is usually considered to be synonymous with the term "greater weight of evidence"
or "greater weight of credible evidence".70 Moreover, parties must rely on the strength of their own evidence, not upon the weakness of
that of their opponent's.71 Significantly, as We have observed by in G.R. No. 198160, this Court is in the dark as to what actually transpired
prior to the issuance of the subject EPs, which only raises more questions than answers.

To Our mind, it would have been easy for the respondents to prove their claims had they presented the documents above-enumerated.
Thus, this Court is baffled by the fact that the respondents did not adduce such evidence before the PARAD and/or the DARAB, instead,
they resorted to defenses such as an attack to the complaint for suffering from procedural defect and prescription of the action. Also,
respondents merely relied on the provision in P.D. No. 27 declaring that farmer-beneficiaries are deemed owners of the land that they
are tilling as of October 21, 1972, which, as amply discussed above, is not sufficient to vest absolute ownership to farmer-beneficiaries.
Notably, respondent presented documents such as certifications to prove payment of the value of land allotted to Florencio Adolfo, TCTs
reflecting CLT numbers, among others, for the first time on appeal before the CA and also before this Court as attached to their Comment
to the Petition. However, these documents are merely photocopies and were not presented before the PARAD and DARAB, hence,
cannot be given evidentiary value by this Court.

The issue on the validity of EPs is not barred by prescription.

Respondents argue that the EPs and subsequent TCTs issued to them, registered with the Register of Deeds, have already become
indefeasible upon the expiration of one year from the date of the issuance thereof and can no longer be cancelled. Respondents point
out that their EPs were issued in 1988 and the instant case was filed only in 2003 or 15 years after such issuance.

This Court has already ruled that the mere issuance of EPs and TCTs does not put the ownership of the agrarian reform beneficiary
beyond attack and scrutiny.72 EPs issued to agrarian refonn beneficiaries may be corrected and cancelled for violations of agrarian laws,
rules, and regulations.73

Besides, registration is nothing more than a mere species of notice of an acquired vested right of ownership of a landholding. Registration
of a piece of land under the Torrens System does not create or vest title, because it is not a mode of acquiring ownership.74 A certificate
of title is merely an evidence of ownership or title over the particular property described therein. It cannot protect a usurper from the true
owner. Thus, the jurisdiction of the PARAD/DARAB cannot be deemed to disappear the moment a certificate of title is issued as such
certificates are not modes of transfer of property but merely evidence of such transfer, and there can be no valid transfer o f title should
the EPs, on which such TCTs are grounded, be void.75

At any rate, contrary to the respondents' contention, records reveal that as early as January 1990, or less than three and two months
after Florencio Adolfo and Elias Policarpio registered their titles with the Register of Deeds, respectively, petitioner had already pursued
actions to protect her right over the subject landholding.76

WHEREFORE, premises considered, the instant petition is GRANTED.

MUNICIPALITY OF CAINTA VS. CITY OF PASIG

FACTS:

THE FACTS

Petitioner Uniwide conducted and operated business in buildings and establishments constructed on parcels of land covered by Transfer
Certificate of Title (TCT) Nos. 72983, 74003, and PT-74468 (subject properties) issued by the Registry of Deeds of Pasig City. In said
TCTs, the location of the parcels of land is indicated as being in Pasig.[6]

In 1989, Uniwide applied for and was issued a building permit by Pasig for its building. Uniwide also secured the requisite Mayor's Permit
for its business from Pasig and consequently paid thereto its business and realty taxes, fees, and other charges from 1989 to 1996.

However, beginning 1997, Uniwide did not file any application for renewal of its Mayor's Permit in Pasig nor paid the local taxes thereto.
Instead, it paid local taxes to Cainta after the latter gave it notice, supported by documentary proof of its claims, that the subject properties
were within Cainta's territorial jurisdiction.

Consequently, Pasig filed a case for collection of local business taxes, fees, and other legal charges due for fiscal year 1997 against
Uniwide with the RTC-Pasig on 28 January 1997. Uniwide, in turn, filed a third-party complaint against Cainta for reimbursement of the
taxes, fees, and other charges it had paid to the latter in the event that Uniwide was adjudged liable for payment of taxes to Pasig.

On 6 May 1999, Uniwide sold the subject properties to Robinsons Land Corporation.

Prior to the institution of said tax collection case, Cainta had filed a petition for the settlement of its boundary dispute with Pasig on 30
January 1994, before RTC, Branch 74, Antipolo City (RTC-Antipolo), entitled Municipality of Cainta v. Municipality of Pasig, docketed as
Civil Case No. 94-3006. Among the territories disputed in the aforesaid case are the subject properties.

In the course of the trial of the tax collection case, Cainta filed a Motion to Dismiss or Suspend Proceedings on the ground of litis pendentia
on 6 November 2001, in view of the pending petition for settlement of the land boundary dispute with Pasig. On 22 January 2002, the
RTC-Pasig denied said motion. Cainta moved for reconsideration, but the same was denied in an order dated 7 March 2002.

Thereafter, Cainta filed a petition for certiorari with the CA, docketed as CA-G.R. SP No. 70408, with prayer for issuance of a temporary
restraining order (TRO) or a writ of preliminary injunction. No TRO or writ of preliminary injunction was issued by the CA, and on 30
September 2004, the CA dismissed Cainta's petition.

The RTC Ruling

In its decision dated 30 June 2003, the RTC-Pasig ruled in favor of Pasig. It upheld the indefeasibility of the Torrens title held by Uniwide
over the subject properties, whose TCTs indicate that the parcels of land described therein are located within the territorial limits of Pasig.
The RTC-Pasig ruled that the location indicated in the TCTs is conclusive for purposes of the action for tax collection, and that any other
evidence of location would constitute a collateral attack on a Torrens title proscribed by law. It thus held that Pasig has the right to collect,
administer, and appraise business taxes, real estate taxes, and other fees and charges from 1997 up to the present. It ordered Uniwide
to pay Pasig local taxes and fees and real estate taxes beginning 1997, as well as attorney's fees in the amount of P500,000.00 plus
costs of suit.

Anent the third-party complaint filed by Uniwide against Cainta, RTC-Pasig rendered judgment in favor of Uniwide. It found that Uniwide
paid business and real estate taxes and other fees due beginning 1997 upon the parcels of land covered by the subject TCTs to Cainta
instead of Pasig. The RTC-Pasig thus directed Cainta to return these amounts to Uniwide pursuant to the principle against unjust
enrichment under Articles 2154 and 2155 of the Civil Code, as well as attorney's fees and costs of suit.

The fallo reads:

WHEREFORE, IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of plaintiff City of Pasig, ordering the defendant
Uniwide Sales Warehouse Club, Inc. to pay the former the following:

(1)
The local taxes and fees and real estate taxes beginning the year 1997 up to present; and
(2)
Attorney's fees in the amount of P500,000.00 plus the costs of suit.
Anent the third-party complaint, judgment is hereby rendered in favor of third-party plaintiff Uniwide Sales Club Warehouse Club, Inc.,
ordering third-party defendant Municipality of Cainta the following:

(1)
To reimburse Uniwide Sales Club Warehouse Club, Inc. the amount it paid to the Municipality as real estate taxes for the years 1997 to
present plus legal interest thereon until fully paid;
(2)
Attorney's fees in the amount of P500,000.00 and the costs of suit.[7]
On 6 August 2003, Uniwide filed a motion for partial reconsideration of the decision. On 12 August 2003, Cainta also filed a motion for
reconsideration. On 30 October 2003, RTC-Pasig issued an omnibus order denying both motions.

Aggrieved, Cainta and Uniwide elevated their respective appeals before the CA.

The CA Ruling

In its assailed decision dated 12 July 2006, the CA affirmed the ruling of the RTC-Pasig with modification as to the award of attorney's
fees. The dispositive portion reads:
WHEREFORE, premises considered, the appealed Decision is MODIFIED, in that the award of attorney's fees against defendant-third
party plaintiff Uniwide in favor of plaintiff City of Pasig is reduced to PI00,000.00, while the award of attorney's fees against third party
defendant Municipality of Cainta in favor of defendant third-party plaintiff Uniwide is likewise reduced to P100,000.00. All other Orders
are AFFIRMED.[8]
Uniwide and Cainta filed their motion for partial reconsideration and motion for reconsideration, respectively, of the decision. These were
denied by the CA in its resolution dated 14 February 2007.

The present petitions

In praying for the reversal of the 12 July 2006 decision of the CA, Cainta assigned the following errors in its petition:
ASSIGNMENT OF ERRORS

I.

THE COURT A QUO ERRED WHEN IT REFUSED TO HOLD IN ABEYANCE THE PROCEEDINGS IN THIS CASE PENDING
RESOLUTION OF THE PETITION FOR CERTIORARI BY THE HONORABLE COURT OF APPEALS IN CA SP 70408.

II.

THE COURT A QUO ERRED WHEN IT REFUSED TO DISMISS THE ORIGINAL COMPLAINT ON THE GROUND OF LITIS
PENDENTIA.

III.

THE COURT A QUO ERRED WHEN IT REFUSED TO DISMISS THE ORIGINAL COMPLAINT ON THE GROUND OF FORUM
SHOPPING.

IV.

THE COURT A QUO ERRED WHEN IT REFUSED TO SUSPEND THE HEARING ON THE ORIGINAL COMPLAINT DUE TO
EXISTENCE OF A PREJUDICIAL QUESTION.

V.

THE COURT A QUO ERRED IN RULING IN FAVOR OF PASIG AND AGAINST UNIWIDE ON THE ORIGINAL CASE AND
CORRESPONDINGLY IN FAVOR OF UNIWIDE AND AGAINST CAINTA ON THE THIRD PARTY COMPLAINT.
SPECIFICALLY, THE COURT A QUO ERRED WHEN IT FAILED TO RESOLVE IN ITS DECISION THE ISSUES OF:

LITIS PENDENTIA;

FORUM SHOPPING;

SUSPENSION OF THE PROCEEDINGS DUE TO THE EXISTENCE OF A PREJUDICIAL QUESTION;

PENDENCY OF THE PETITION FOR CERTIORARI BEFORE THE HONORABLE COURT OF APPEALS;

SPECIFICALLY, THE COURT A QUO ERRED WHEN IT RULED THAT THE PROPERTIES SUBJECT MATTER OF THE DISPUTED
TAXES IN INSTANT CASE FALL WITHIN THE JURISDICTION OF PASIG ON THE BASIS OF THE LOCATIONAL ENTRIES
APPEARING IN THE RESPECTIVE TITLES THEREOF; and
VI.
THE COURT A QUO ERRED WHEN IT AWARDED THE PAYMENT OF REAL ESTATE TAXES BY UNIWIDE TO PASIG ON THE
ORIGINAL CASE AND CORRESPONDINGLY WHEN IT AWARDED THE REIMBURSEMENT THEREOF BY CAINTA TO UNIWIDE ON
THE THIRD PARTY COMPLAINT.[9]
On the other hand, Uniwide, seeking partial reversal of the CA's decision, assigned the following errors in its petition:
ASSIGNMENT OF ERRORS

I.

THE COURT OF APPEALS ERRED WHEN IT DID NOT ORDER THE RESPONDENT MUNICIPALITY TO DIRECTLY REIMBURSE TO
THE RESPONDENT CITY THE TAX PAYMENTS WHICH THE PETITIONER ERRONEOUSLY BUT IN GOOD FAITH PAID TO THE
RESPONDENT MUNICIPALITY.

II.

THE COURT OF APPEALS ERRED WHEN IT AFFIRMED THE LIABILITY OF THE PETITIONER FOR ATTORNEY'S FEES IN FAVOR
OF THE RESPONDENT CITY.

III.

THE COURT OF APPEALS ERRED WHEN IT FIXED THE AWARD OF ATTORNEY'S FEES AGAINST THE RESPONDENT
MUNICIPALITY IN FAVOR OF THE PETITIONER IN A WAY NOT IN ACCORD WITH LAW AND JURISPRUDENCE.[10]
ISSUES

The issues culled from the errors presented can be summarized as follows:
Whether the RTC-Pasig and the CA were correct in deciding in favor of Pasig by upholding the indefeasibility of the Torrens title over the
subject properties, despite the pendency of the boundary dispute case between Pasig and Cainta; and if so, whether they properly
decided the manner in settling the obligations due to Pasig; and

Whether the award of attorney's fees was proper.

THE COURT'S RULING

For purposes of complying with local tax liabilities, the taxpayer is entitled to rely on the location stated in the certificate of title.

Under the Local Government Code (LGC), local business taxes are payable for every separate or distinct establishment or place where
business subject to the tax is conducted, which must be paid by the person conducting the same.[11] Section 150 therein provides the
situs of taxation, to wit:
Section 150. Situs of the Tax. -

(a) For purposes of collection of the taxes under Section 143 of this Code, manufacturers, assemblers, repackers, brewers, distillers,
rectifiers and compounders of liquor, distilled spirits and wines, millers, producers, exporters, wholesalers, distributors, dealers,
contractors, banks and other financial institutions, and other businesses, maintaining or operating branch or sales outlet elsewhere shall
record the sale in the branch or sales outlet making the sale or transaction, and the tax thereon shall accrue and shall be paid to the
municipality where such branch or sales outlet is located. In cases where there is no such branch or sales outlet in the city or municipality
where the sale or transaction is made, the sale shall be duly recorded in the principal office and the taxes due shall accrue and shall be
paid to such city or municipality. (emphasis and underlining supplied)
For real property taxes, Presidential Decree (PD) 464 or the Real Property Tax Code provides that collection is vested in the locality
where the property is situated, to wit:
Sec. 5. Appraisal of Real Property. All real property, whether taxable or exempt, shall be appraised at the current mad fair market value
prevailing in the locality where the property is situated.

xxxx

Sec. 57. Collection of tax to be the responsibility of treasurers. The collection of the real property tax and all penalties accruing thereto,
and the enforcement of the remedies provided for in this Code or any applicable laws, shall be the responsibility of the treasurer of the
province, city or municipality where the property is situated. (emphases and underlining supplied)
This is affirmed by Sections 201 and 247 of the LGC, viz.:
Sec. 201. Appraisal of Real Property. All real property, whether taxable or exempt, shall be appraised at the current and fair market value
prevailing in the locality where the property is situated. The Department of Finance shall promulgate the necessary rules and regulations
for the classification, appraisal, and assessment of real property pursuant to the provisions of this Code.

xxxx

Sec. 247. Collection of Tax. - The collection of the real property tax with interest thereon and related expenses, and the enforcement of
the remedies provided for in this Title or any applicable laws, shall be the responsibility of the city or municipal treasurer concerned.
(emphases and underlining supplied)
Since it is clear that local business taxes and realty taxes are to be collected by the local government unit where the business is conducted
or the real property is located, the primordial question presented before this Court is: how is location determined for purposes of identifying
the LGU entitled to collect taxes.
This Court holds that the location stated in the certificate of title should be followed until amended through proper judicial proceedings.

PD 1529, or the Property Registration Decree (PRD), is an update of the Land Registration Act (Act 496) and relates to the registration
of real property. Section 31 thereof provides that a decree of registration, once issued, binds the land and quiets title thereto, and it is
conclusive upon and against all persons, including the National Government and all branches thereof.[12]

The same section requires every decree of registration to contain a description of the land, as finally determined by the court. Such final
determination is obtained by requiring the applicant to file a sworn application containing, among others, a description of the land sought
to be registered,[13] together with all original muniments of title or copies thereof and a survey plan of the land approved by the Bureau
of Lands.[14] A copy of the application and all its annexes must also be furnished to the Director of Lands.[15] The law also requires the
applicant to attach to his application the plan and technical description showing the boundaries and location of the land.[16] The land
registration court shall thereafter render judgment confirming the title of the applicant if it finds that the applicant has sufficient title proper
for registration, after considering the evidence and reports of the Commissioner of Land Registration and Director of Lands.[17]

The import of these provisions is that the land registration court, in confirming the applicant's title, necessarily passes upon the technical
description of the land and consequently its location, based on proof submitted by the applicant and reports by the Commissioner of Land
Registration and Director of Lands. There is thus basis to presume correct the location stated in the Certificate of Title and to rely thereon
for purposes of determining the situs of local taxation, until it is cancelled or amended.

Said reliance is further demanded by Section 31 of the PRD when it mandated that a decree of registration, which necessarily includes
the registered location of the land, is conclusive upon all persons, including the National Government and all branches thereof. In Odsique
v. Court of Appeals,[18] the Supreme Court held that a certificate of title is conclusive not only of ownership of the land but also its location.

In the case at bar, it is undisputed that the subject properties are covered by TCTs which show on their faces that they are situated in
Pasig;[19] that Uniwide's business establishment is situated within the subject properties; that the stated location has remained
unchanged since their issuance; that prior payments of the subject taxes, fees, and charges have been made by Uniwide to Pasig;[20]
and that there is no court order directing the amendment of the subject TCTs with regard to the location stated therein.[21] This gives
Pasig the apparent right to levy and collect realty taxes on the subject properties and business taxes on the businesses conducted therein.

The evidence presented by Cainta (i.e., Cadastral Survey and Maps, Certification from the DENR) to sustain its claim that the subject
properties fall within its territorial jurisdiction are more properly submitted for the appreciation of the RTC-Antipolo, where the boundary
dispute case is pending. The RTC—Antipolo would be able to best ascertain the extent and reach of Pasig and Cainta's respective
territories.

Without the adjudication of the RTC-Antipolo finally determining the precise territorial jurisdiction of these local government units (LGU),
these documents alone cannot automatically effect a modification or amendment to the stated location in the TCTs for the purpose of
exacting tax compliance, as the taxpayer is entitled to rely on the location clearly reflected in the certificate of title covering the properties.
To hold otherwise would subject taxpayers to the vagaries of boundary disputes, to their prejudice and inconvenience and to the detriment
of proper tax administration. Such scenario is contrary to the canons of a sound tax system. Administrative feasibility is one of the canons
of a sound tax system. It simply means that the tax system should be capable of being effectively administered and enforced with the
least inconvenience to the taxpayer.[22]

Moreover, the Implementing Rules and Regulations (IRR) of the LGC provides that in case of a boundary dispute, the status of the
affected area prior to the dispute shall be maintained and continued for all purposes.[23] It is not controverted that the stated location in
the TCTs has remained unchanged since their issuance and that Uniwide has faithfully paid its local business taxes, fees, and other
charges to Pasig since 1989, prior to the institution of the boundary dispute case. This status should be maintained until final judgment is
rendered and the necessary amendments to the TCTs, if any, are made.

Notably, Section 108 of the PRD provides for the proper procedure in case of amendments to a certificate of title, wherein a registered
owner or other person having an interest in registered property may apply by petition to the court on the ground that an omission or error
was made in entering a certificate or any memorandum thereon, or upon any other reasonable ground, to wit:
Section 108. Amendment and alteration of certificates. No erasure, alteration, or amendment shall be made upon the registration book
after the entry of a certificate of title or of a memorandum thereon and the attestation of the same be Register of Deeds, except by order
of the proper Court of First Instance. A registered owner of other person having an interest in registered property, or, in proper cases, the
Register of Deeds with the approval of the Commissioner of Land Registration, may apply by petition to the court upon the ground that
the registered interests of any description, whether vested, contingent, expectant or inchoate appearing on the certificate, have terminated
and ceased; or that new interest not appearing upon the certificate have arisen or been created; or that an omission or error was made
in entering a certificate or any memorandum thereon, or, on any duplicate certificate; or that the same or any person on the certificate
has been changed; or that the registered owner has married, or, if registered as married, that the marriage has been terminated and no
right or interests of heirs or creditors will thereby be affected; or that a corporation which owned registered land and has been dissolved
has not convened the same within three years after its dissolution; or upon any other reasonable ground; and the court may hear and
determine the petition after notice to all parties in interest, and may order the entry or cancellation of a new certificate, the entry or
cancellation of a memorandum upon a certificate, or grant any other relief upon such terms and conditions, requiring security or bond if
necessary, as it may consider proper; Provided, however, That this section shall not be construed to give the court authority to reopen
the judgment or decree of registration, and that nothing shall be done or ordered by the court which shall impair the title or other interest
of a purchaser holding a certificate for value and in good faith, or his heirs and assigns, without his or their written consent. Where the
owner's duplicate certificate is not presented, a similar petition may be filed as provided in the preceding section.
All petitions or motions filed under this Section as well as under any other provision of this Decree after original registration shall be filed
and entitled in the original case in which the decree or registration was entered. (emphasis and underlining supplied)
Thus, in the event that the RTC-Antipolo renders judgment finding that the subject properties are within the territorial jurisdiction of Cainta,
Cainta may be considered a "person having an interest in registered property" for the purpose of applying for amendment to Uniwide's
TCTs to reflect the proper locational entry based on a final judgment. Until then, however, the location stated in the TCTs shall be
presumed correct and subsisting for the purpose of determining which LGU has taxing jurisdiction over the subject properties.

All told, considering that the TCTs show that the subject properties are located in Pasig, Pasig is deemed the LGU entitled to collect local
business taxes and realty taxes, as well as relevant fees and charges until an amendment, if any, to the location stated therein is ordered
by the land registration court after proper proceedings.

The action for tax collection can proceed despite the pendency of the boundary dispute case before the RTC-Antipolo and the petition for
certiorari before the CA.

There is no merit to Cainta's contention that the RTC-Pasig should have dismissed or suspended the proceedings for tax collection on
the ground of litis pendentia/forum shopping or the existence of a prejudicial question, respectively, in view of the pending boundary
dispute case before the RTC-Antipolo .

There was no litis pendentia or forum shopping as would justify the dismissal of the tax collection case. The test to determine the existence
of forum shopping is whether the elements of litis pendentia are present, or whether a final judgment in one case amounts to res judicata
in the other. Thus, there is forum shopping when the following elements are present, namely: (a) identity of parties, or at least such parties
as represent the same interests in both actions; (b) identity of rights asserted and reliefs prayed for, the relief being founded on the same
facts; and (c) the identity of the two preceding particulars, such that any judgment rendered in the other action will, regardless of which
party is successful, amount to res judicata in the action under consideration.[24]

As correctly found by the RTC-Pasig and affirmed by the CA, the first and second requisites are wanting. Uniwide is not a party to the
boundary dispute case between Cainta and Pasig, and the first action is for settlement of boundary dispute while the second action is for
collection of tax.

Moreover, the third requisite is also wanting, because regardless of which party is successful, a judgment in the boundary dispute case
will not amount to res judicata in the tax collection case. As discussed above, the basis for determining which LGU has the apparent right
to collect local taxes is the location as appearing on the certificate of title, unless an amendment thereto is duly made. It must be noted
that during the subject years, the TCTs show that the subject properties are situated in Pasig, giving the latter the apparent right to collect
taxes thereon, which is precisely the subject of the action under consideration. For this same reason, the Court cannot sustain Cainta's
contention that the boundary dispute case presented a prejudicial question warranting the suspension of the tax collection case.

There is also no merit to the contention that it was erroneous for the RTC-Pasig to proceed with the tax collection case despite Cainta's
filing of a petition for certiorari with the CA. A special civil action for certiorari under Rule 65 is an original or independent action.[25] An
independent action does not interrupt the course of the case unless there be a writ of injunction stopping it.[26] Although Cainta's petition
for certiorari sought the issuance of a temporary restraining order and/or preliminary injunction, none was issued by the CA.[27] In any
case, said petition had already been decided by the CA against Cainta on 30 September 2004,[28] which became final and executory on
28 October 2004.[29]

Uniwide must pay the applicable taxes and fees to Pasigfor the subject years; and Cainta must reimburse to Uniwide the taxes that the
latter paid for said period.

There is also no merit to Uniwide's contention that Pasig should directly recover from Cainta the tax payments under consideration, as a
matter of expediting and inexpensively settling the tax liabilities.

Section 146 of the LGC expressly provides that the tax on a business must be paid by the person conducting the same, to wit:
Section 146. Payment of Business Taxes. —

(a) The taxes imposed under Section 143 shall be payable for every separate or distinct establishment or place where business subject
to the tax is conducted and one line of business does not become exempt by being conducted with some other business for which such
tax has been paid. The tax on a business must be paid by the person conducting the same. (emphasis and underlining supplied)
It is undisputed that Uniwide is the person conducting the business under consideration. Thus, it is the person against whom Pasig may
properly pursue for payment of local business taxes.

However, it was erroneous for the CA to sustain the RTC-Pasig's decision directing Uniwide to also pay real estate taxes to Pasig for the
applicable years. In its complaint,[30] Pasig only alleged that Uniwide did not pay the fees for Mayor's Permit, business taxes, and other
incidental fees and charges (i.e., sanitary and garbage fees, other miscellaneous charges) and consequently prayed for the payment
thereof. It did not allege that Uniwide is also liable for payment of real estate taxes.

In fact, as alleged by Pasig[31] and admitted by Uniwide in its answer,[32] the realty taxes for the subject properties are paid by their
registered owner. Both the CA and the RTC-Pasig found that the subject TCTs are registered under the name of Uniwide Sales Realty
and Resources Corporation ("USRRC"), an affiliate of Uniwide,[33] and a corporation with separate and distinct personality from the latter
which is not a party to the case at bar. Moreover, the RTC-Pasig even found that Uniwide paid to Pasig realty taxes for the subject
properties amounting to P2,200,000.00 for the years 1996 to the first quarter of 1999, evidenced by an official receipt dated 22 June
1999.[34] The foregoing creates doubt as to Uniwide's liability for real estate taxes "beginning the year 1997 up to present," as directed
by the RTC—Pasig, further considering that the subject properties had already been conveyed to Robinsons Land Corporation on 6 May
1999.[35]

In fine, for lack of sufficient proof to hold Uniwide liable for real estate taxes, it must only be liable to pay local business taxes to Pasig for
the applicable years.

Cainta, on the other hand, is obligated to return the taxes erroneously paid to it by Uniwide pursuant to the principle against unjust
enrichment.[36] The principle of unjust enrichment has two conditions. First, a person must have been benefited without a real or valid
basis or justification. Second, the benefit was derived at another person's expense or damage.[37]

As previously discussed, prior to final adjudication by the RTC-Antipolo on the boundary dispute case and necessary amendment to the
TCTs, Cainta has no apparent right to collect the taxes on the subject properties. Thus, when Uniwide paid taxes to it, Cainta was
benefited without real or valid basis, which benefit was derived at the expense of both Uniwide and Pasig.

The award of attorney's fees is not proper.

The award of attorney's fees is improper because the RTC-Pasig automatically awarded the same in the dispositive portion of its decision
without stating the factual or legal basis therefor in the body of the decision.

The award of attorney's fees is the exception rather than the general rule. As such, it is necessary for the trial court to make findings of
fact and law that would bring the case within the exception and justify the grant of such award. The matter of attorney's fees cannot be
mentioned only in the dispositive portion of the decision. They must be clearly explained and justified by the trial court in the body of its
decision. On appeal, the CA is precluded from supplementing the bases for awarding attorney's fees when the trial court failed to discuss
in its decision the reasons for awarding the same. Consequently, the award of attorney's fees should be deleted.[38]

WHEREFORE, the petitions are DENIED.

TIU VS. JANGAS

FACTS:

This case stemmed from a Complaint[5] dated August 6, 1992 for reconveyance of property filed by Spouses Jacinto and Petronila Merto-
Jangas (Spouses Jangas) against Felix Tiu (petitioner) and Rural Bank of Amlan, Inc. (RBAI).

The subject of this petition is a parcel of land designated as Lot No. 480-A, originally owned by Gregorio Pajulas (Gregorio), with an area
of 25,340 square meters, located in Salag, Siaton, Negros Oriental.[6]

The records of the case show the following sequence of events:

a) During Gregorio's lifetime, he owned a parcel of land known as Lot No. 480. He then gave a portion of the land (Lot No. 480-B) to his
granddaughter Lulihala Pajulas who took care of him;[7]

b) In 1956, Gregorio died and was survived by his three daughters, namely, Adelaida, Bruna and Isabel (Pajulas sisters), who adjudicated
in 1958 the remaining portion of the land (Lot No. 480-A) unto themselves and declared the same in their names under Tax Declaration
(TD) No. 17560;[8]

c) In 1962, the Pajulas sisters agreed to divide Lot No. 480-A equally among themselves;[9]

d) Upon the death of Isabel, her share was inherited by her heirs, namely: her husband and children Iluminada Gadiane (Iluminada),
Norma Gadiane (Norma) and Maria Gadiane-Ortiza (Maria) (Gadiane sisters);[10]

e) On August 5, 1974, Norma sold to Spouses Jangas a portion of her share with an area of 1,462 sq m, which the latter declared in the
name of Petronila under TD No. 21-827;[11]

f) On December 31, 1981, Iluminada and Norma sold to the Spouses Jangas another portion with an area of 912 sq m, which was later
also declared in the name of Petronila under TD No. 21-1064;[12]

g) Thereafter, Iluminada made subsequent sales as follows: (1) 288 sq m to Candelaria Rusiana (Candelaria); (2) 3,243 sq m to Merla
Macalipay-Kitane (Merla); and (3) 288 sq m to Juana Jalandoni (Juana);[13]

h) Sometime in 1962, Bruna sold her one-third-share of Lot No. 480-A to Spouses Gaudencio Delayco (Gaudencio) and Lucia Amigo-
Delayco (Spouses Delayco);[14]

i) On January 8, 1980, the heirs of Gaudencio, represented by Bridiana Delayco (Bridiana), applied for and was granted a free patent
over the entire Lot No. 480-A. Consequently, Original Certificate of Title (OCT) No. FV- 29932 under Free Patent (FP) No. (VII-3) 9852
was issued in the name of the heirs of Gaudencio;[15]
j) Subsequently, Bridiana transferred the title over Lot No. 480-A to her name alone, and was issued Transfer Certificate ofTitle (TCT)
No. FT-4925 on September 26, 1985. She also declared the subject property under her name for taxation purposes evidenced by TD No.
21-1031; [16]

k) In March of 1990, Bridiana sold the subject property to the petitioner;[17] and

l) On August 24, 1990, TCT No. FT-5683 was issued to Spouses Felix and Evelyn Tiu (Spouses Tiu), who also had the subject property
declared in their names under TD No. 21-1097 (A). Then, in 1991, the Spouses Tiu mortgaged the subject property with the RBAI.[18]

A summary of the transfer of the property is as follows:

(See image)

The aforementioned events prompted the Spouses Jangas to file a complaint[19] for reconveyance and damages against the petitioner
and RBAI on August 6, 1992.

A motion for leave to intervene and complaints in intervention was filed, on March 31, 1993, by Spouses Maria and Melencio Ortiz
(Spouses Ortiz), Spouses Merla and Pacito Kitane (Spouses Kitane), Spouses Candelaria and Rodrigo Rusiana (Spouses Rusiana) and
Juana, who contended that they are now the owners of different portions of Lot No. 480-A, having bought the same from the Gadiane
sisters. The complaints in intervention were later amended to include Spouses Adelaida and Teopisto Ragay, Sr. (Spouses Ragay), who
assailed that they owned one-third-share of Lot No. 480-A, since Adelaida is the daughter of Gregorio.[20]

After trial, the court a quo rendered its judgment in favor of Spouses Jangas, Spouses Ortiz, Spouses Kitane, Spouses Rusiana, Juana
and Spouses Ragay (collectively, the respondents). The trial court dismissed the petitioner's claim of ownership over the subject property
taking note that the sale and transfer effected by Bruna in favor of the Spouses Delayco was merely her one-third-share of the subject
property. Thus:

WHEREFORE, premises considered, judgment is hereby rendered:

Declaring [Spouses Jangas] part owners of Lot 480-A of Plan Csd-07-03-000548 to the extent of 2,374 square meters located at the
eastern portion;

Declaring [Spouses Tiu] as owners of one-third portion of the same Lot No. 480-A located in between the shares of Adelaida and Isabel,
both surnamed Pajulas as indicated in the rough sketch plan (Exh. "B") [and] which portion is the only portion being mortgaged by them
to [RBAI];

Declaring the Heirs of [Adelaida], namely intervenors Marilyn Ragay, married to Casiano Palamos and a resident of Bondo Siaton, Negros
Oriental; Melyn Ragay married to Judy Taganile and a resident of Guihulngan, Negros Oriental; Carolina Ragay, married to Efren
Bangcairen and a resident of Piapi, Dumaguete City; Teopisto Ragay, Jr., married to Gerfrodes Pahulas and a resident of Mantuyop,
Siaton, Negros Oriental, and Susan Ragay, married to Isabelito Guevara, a resident of Siaton, Negros [Oriental], all Filipinos and of legal
ages as owners of one-third portion of the same Lot No. [480]-A, which portion is located on the western side of the land;

Declaring the Heirs of [Isabel] as owners to the extent of 6,099 square meters plus over the same land and which share is located at the
eastern portion; [and]

As a consequence, TCT No. FT-5683 covering said Lot No. [480]-A has to be cancelled partially in order to reflect the foregoing lawful
and legitimate owners of the said parcel of land and the Register of Deeds for the Province of Negros Oriental, Dumaguete City is directed
to effect such partial cancellation.
Plaintiffs' claim for damages as well as defendants' counter-claim is ordered dismissed.

No pronouncement as to costs.

SO ORDERED.[21]

On August 31, 2010, the CA, in its Decision[22] denied the petitioner's appeal and affirmed in toto the findings of the RTC. In sustaining
the RTC's decision, the appellate court ratiocinated:

In the instant case, Bruna owned 1/3 of Lot 480-A, the same 1/3 share is what she can validly transfer to [S]pouses Delayco and not the
whole lot. Nemo dat quod non habet – no one can give what one does not have. Accordingly, one can sell only what one owns or is
authorized to sell, and the buyer can acquire no more than what the seller can transfer legally. Such being the case, the Delaycos could
not validly transfer the whole of Lot 480-A to themselves and sell the same to [S]pouses Tiu.

Although the fact of sale of Bruna's share to the [S]pouses Delaycos was not an issue, this Court however, could not actually determine
the extent of the property sold by Bruna to them as there was no deed of sale found in the records. Even assuming arguendo that Bruna
sold the entire Lot 480-A to the Delaycos, the said sale is not null and void. This only made the Delaycos co-owner of the property which
pertains to the share of Bruna.[23]

Aggrieved by the foregoing disquisition, the petitioner moved for reconsideration but it was denied by the CA in its Resolution[24] dated
December 6, 2011. Hence, he filed this petition for review.
The Issue Presented

WHETHER THE PETITIONER IS ENTITLED TO THE RECONVEYANCE OF THE SUBJECT PROPERTY.

Ruling of the Court

The petition lacks merit.

In this case, the petitioner's cause of action for reconveyance is grounded on his alleged ownership of the subject property which he
merely purchased from Bridiana. He mainly argues that he acquired the subject property in good faith and for value, and had it recorded
in the Registry of Property, since he was unaware of any prior sale over the subject property, and Bridiana's title was free from any liens
or encumbrances that could have aroused his suspicion.

The respondents, however, rebut this claim by contending that: (1) Lot No. 480-A was adjudicated among the heirs of Gregorio, who
declared the same in their names under TD No. 17560 and later orally partitioned the same; (2) the heirs of Isabel sold an equivalent of
2,374 sq m to Spouses Jangas, in separate notarized deeds of sale while the other respondents also claimed that portions of the share
of Isabel had been sold to them by Isabel's heirs; (3) the Spouses Jangas alleged that they had been in possession of the land since
1972; and (4) Bruna sold her one-third-share to the Spouses Delayco, however, the latter caused the titling of the whole Lot No. 480-A
in their name.[25]

The main issue to be discussed is whether the petitioner is entitled to reconveyance of the subject property. Consequently, the bone of
contention is whether the petitioner is a buyer in good faith.

The determination of whether the petitioner is a buyer in good faith is a factual issue, which generally is outside the province of this Court
to determine in a petition for review. Although this rule admits of exceptions, none of these apply to this case. There is no conflict between
the factual findings and legal conclusions of the RTC and the CA, both of which found the petitioner to be a buyer in bad faith and not
entitled to reconveyance of the subject property.

It is undisputed that the subject property was originally owned by Gregorio, and upon his death, the subject property was transmitted by
succession to his heirs, as confirmed by the issuance of TD No. 17560 issued in 1961 where the owner described therein were Gregorio's
daughters, Adelaida, Bruna and Isabel. Thereafter, the Pajulas sisters equally partitioned the subject property among themselves. Thus,
Bruna is entitled to only one-third of the subject property.

A scrutiny of the records established the fact that the property sold to the Spouses Delayco was the one-third share only of Bruna over
Lot No. 480-A. However, it was clearly ascertained that the heirs of Spouses Delayco, represented by Bridiana, applied for and was
granted an FP over the whole Lot No. 480-A as evidenced by OCT No. FV-29932. Furthermore, Bridiana transferred the title to her name
alone and was then issued TCT No. FT-4925.

As correctly emphasized by the lower courts, the petitioner's right in the subject property is limited only to Bruna's share in the co-owned
property. When the subject property was sold to the Spouses Delayco, they merely stepped into the shoes of Bruna and acquired whatever
rights and obligations appertain thereto.

The petitioner mistakenly relied upon the title of Bridiana to conclude that the latter was a possessor in good faith and with just title who
acquired the subject property through a valid deed of sale. Neither can the petitioner benefit from the contract of sale of the subject
property, executed by Bridiana in his favor, to support his claim of possession in good faith and with just title.

Be that as it may, the rights of the respondents as owners of their respective shares of the subject property were never alienated from
them despite having the whole Lot No. 480-A titled under Bridiana's name. Neither does the fact that the petitioner had bought the subject
property from Bridiana and having a new title issued in his name displaced the existing ownership of the respondents. Besides, it seems
that the petitioner knew of the fact that there were other occupants of the subject property. In fact, during cross examination, the petitioner
testified that when he visited the subject property for surveying he already saw two structures that were built thereon, thus, he already
knew that someone else besides his seller has possession over the same. As the appellate court expressly pointed out:

In, the instant case, We found that [the petitioner] had actual knowledge that other persons were in actual possession of the lot. [The
petitioner] testified during his cross examination that he saw two (2) structures (nipa hut/house) in Lot 480-A during his relocation survey.
He admittedly knew the owner of the first structure as a certain Botit Bangay but he did not know the owner of the second one. [The
petitioner] admitted that he did not inquire who is the owner thereof. The mere fact that [the petitioner] did not investigate as to the
ownership of the land after he knew that other persons other than the seller were in possession thereof only means that he was not an
innocent purchaser for value of said land.[26]

The Court has repeatedly emphasized that one who purchases real estate with knowledge of a defect or lack of title in his vendor cannot
claim that he has acquired title thereto in good faith as against the true owner of the land or of an interest therein; and the same rule must
be applied to one who has knowledge of facts which should have put him upon such inquiry and investigation as might be necessary to
acquaint him with the defects in the title of his vendor.[27]

When a piece of land is in the actual possession of persons other than the seller, the buyer must be wary and should investigate the
rights of those in possession. Without making such inquiry, one cannot claim that he is a buyer in good faith.[28] As in this case, the
failure of buyer to take the ordinary precautions which a prudent man would have taken under the circumstances, especially in buying a
piece of land in the actual, visible and public possession of another person, other than the vendor, constitutes gross negligence amounting
to bad faith.[29]

Far from being prudent, it is clear that the petitioner chose to close his eyes to facts which should have put a reasonable man on his
guard. Consequently, he cannot now claim that he acted in good faith on the belief that there was no defect in the title of his predecessor-
in-interest. The fact that Bridiana was the first to apply for an FP over the subject property will not help the petitioner's cause.

Moreover, the petitioner cannot rely on his TCT No. FT-5683 as an incontrovertible evidence of his ownership over the subject property.
The fact that he was able to secure a title in his name does not operate to vest ownership upon him of the subject property. As the Court
reiterated in Hortizuela v. Tagufa:[30]

Registration of a piece of land under the Torrens System does not create or vest title, because it is not a mode of acquiring ownership. A
certificate of title is merely an evidence of ownership or title over the particular property described therein. It cannot be used to protect a
usurper from the true owner; nor can it be used as a shield for the commission of fraud; neither does it permit one to enrich himself at the
expense of others. Its issuance in favor of a particular person does not foreclose the possibility that the real property may be co-owned
with persons not named in the certificate, or that it may be held in trust for another person by the registered owner.[31]

The petitioner'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 the respondents were almost deprived of their rights over the subject property through fraud and with
evident bad faith. The petitioner and Bridiana's failure and intentional omission to disclose the fact of actual physical possession by
another person during registration proceedings constitutes actual fraud.[32] Hence, the alleged incontrovertibility of title cannot be
successfully invoked by the petitioner because certificates of title merely confirm or record title already existing and cannot be used as a
shield for the commission of fraud.

Applying these parameters, the Court is convinced that the petitioner cannot be considered a buyer and registrant in good faith and for
value. It is apparent from the records of this case that the respondents have been in actual possession and occupation of the subject
property at the time that it was sold by Bridiana to the petitioner. Thus, the petitioner did not acquire any right from Bridiana over two-
thirds of the subject property since the latter was no longer the owner of the same at the time the sale was made to the petitioner. The
ownership over the two-thirds-portion of the subject property had already been vested to the respondents prior to such sale. Hence,
reconveyance of the subject property to the petitioner is unwarranted.

WHEREFORE, the petition is DENIED.

JALBAY, SR. VS. PNB

FACTS:

Spouses Emiliano and Mamerta Jalbay are the owners of a 257 square-meter property located in Sauyo Road, Novaliches. In 1988, the
TCT covering the property was destroyed in a fire that gutted the Quezon City Hall. When it was reconstituted, the title was issued in the
name of “Emiliano Jalbay, married to Mamerta C. Jalbay,”, which title was given to their daughter, Virginia Agus as they were then residing
abroad. To secure additional funds for their garments business, Virginia and her husband Danilo mortgaged the property to the Philippine
National Bank, representing to the bank that the lot is owned by the siblings Emiliano and Teresita Jalbay-Cinco. Because they failed to
pay the loan in time, the bank foreclosed the property. When the spouses Jalbay learned that the property was mortgaged to PNB, they
filed a complaint against the PNB before the Quezon City RTC, contending that they had no knowledge of the mortgage and the
subsequent foreclosure. They also sought to prevent the PNB from consolidating title to the property. After trial, the TC declared the real
estate mortgage null an void and the foreclosure proceedings without force and effect. PNB appealed to the CA, which ruled in their
favour. The spouses moved to reconsider, arguing that that PNB did not act with the requisite diligence when it approved the loan
application of the Spouses Agus, Emiliano, Jr., and Cinco. They claim that the RTC was correct in finding that PNB was not a mortgagee
in good faith, making the mortgage constituted on the subject lot null and void. The CA, however, refused to reconsider, hence the
spouses appealed to the Supreme Court.

ISSUE:
Whether or not the PNB was a mortgagee in good faith.

RULING:

The petition lacks merit.

True, banks, in handling real estate transactions, are required to exert a higher degree of diligence, care, and prudence than individuals.
Unlike private individuals, it is expected to exercise greater care and prudence in its dealings, including those involving registered lands.
A banking institution is expected to exercise due diligence before entering into a mortgage contract.⁠2 Indeed, there is a situation where,
despite the fact that the mortgagor is not the owner of the mortgaged property, his title being fraudulent, the mortgage contract and any
foreclosure sale arising therefrom are given effect by reason of public policy. This is the doctrine of “the mortgagee in good faith,” wherein
buyers or mortgagees dealing with property covered by a Torrens Certificate of Title are no longer required to go beyond what appears
on the face of the title.⁠3 However, the rule that persons dealing with registered lands can rely solely on the certificate of title is not
applicable to banks. Thus, before approving a loan application, it is a standard operating practice for these institutions to conduct an
ocular inspection of the property offered for mortgage and to verify the veracity of the title to determine its real owners. An ocular
inspection is necessary to protect the true owner of the property as well as innocent third parties with a right, interest or claim thereon
from a usurper who may have acquired a fraudulent certificate of title.
 REPUBLIC VS. YAP

FACTS:

On July 28, 2010, respondent Claro Yap (Yap) filed a petition 3 for cancellation and re-issuance of Decree No. 99500 covering Lot No.
922 for the issuance of the corresponding Original Certificate of Title (OCT) pursuant to the re-issued decree.

His petition alleged the following:

1. Lot No. 922 with an area of thirty four (34) square meters is covered by Decree No. 99500 issued on November 29, 1920 in the name
of Andres Abellana, as Administrator of the Estate of Juan Rodriguez;
2. Ownership over Lot No. 922 was vested upon Yap by virtue of inheritance and donation and that he and his predecessors -in-interest
have been in open, continuous, exclusive and notorious possession of the said lot since June 12, 1945, or earlier, and/or by acquisitive
prescription being possessors in good faith in the concept of an owner for more than thirty (30) years;
3. While a valid decree was issued for Lot No. 922, based on the certification from the Register of Deeds of the Province of Cebu, there
is no showing or proof that an OCT was ever issued covering the said lot;
4. Lot No. 922 was registered for taxation purposes in the name of Heirs of Porfirio Yap; and
5. There is no mortgage or encumbrance of any kind affecting Lot No. 922, or any other person having any interest therein, legal or
equitable, in possession, reversion or expectancy, other than Yap.

Yap presented the following documents, among others, as proof of his claim:

1. Certified true copy of Decree No. 99500 issued by the authorized officer of the Land Registration Authority (LRA);
2. Index of decree showing that Decree No. 99500 was issued for Lot No. 922;
3. Certification from the Register of Deeds of Cebu that no certificate of title covering Lot No. 922, Cad. 30 has been issued;
4. Extrajudicial Settlement of the Estate of the Late Porfirio C. Yap with Deed of Donation;
5. Certification from the Office of the City Assessor of Carcar indicating that the heirs of Porfirio Yap had been issued Tax Declarations
for Lot No. 922 since 1948;
6. Tax Declarations covering Lot No. 922 from 1948 up to 2002;
7. Blueprint of the approved consolidation and subdivision plan; and
8. Certification from Community Environment and Natural Resources Office (CENRO), Cebu City stating that there is no existing public
land application for Lot No. 922.

Main argument/s of Petitioner (OSG):

1. Petition should be denied due to Yap and his predecessors' failure to file the proper motion to execute Decree No. 99500 as
prescribed under Section 6, Rule 39 of the Rules of Court. It also subscribes that the petition is now barred by the statute of limitations
since nine (9) decades had already passed after the issuance of the said decree in November 1920 without any action brought upon by
Yap or his predecessors-in-interest. Further added that there is no proof that Decree No. 99500 has attained finality and the decision
granting the issuance thereof was not appealed or modified.
2. Even assuming that Yap's petition is not barred by the statute of limitations, the re-issuance of Decree No. 99500 is still improper
due to the total lack of evidence presented before the court.

Ruling of Lower Courts

RTC: The RTC found that Yap had sufficiently established his claims and was able to prove his ownership and possession over Lot No.
922. As such, it granted the petition and ordered the Register of Deeds of the Province of Cebu to cancel Decree No. 99500, re-issue a
new copy thereof, and on the basis of such new copy, issue an Original Certificate of Title in the name of Andres Abellana, as administrator
of the Estate of Juan Rodriguez.

Since the order of the RTC was for the re-issuance of the decree under the name of its original adjudicate, Yap filed a Partial Motion for
Reconsideration stating that the new decree and OCT should be issued under his name instead of Andres Abellana.

Petitioner’s argument: through (OSG), Yap's petition and motion should be denied since the Republic was not furnished with copies
thereof.

The RTC denied Yap's motion ruling that the law provides that the decree, which would be the basis for the issuance of the OCT, should
be issued under the name of the original adjudicate. Likewise, the RTC also denied the OSG's motion finding that the records of the case
show that it was furnished with copies of the Petition as well as the Partial Motion for Reconsideration

Petitioner’s argument: OSG interposed an appeal before the CA; Yap's petition should have been denied due to insufficiency of evidence
and failure to implead indispensable parties such as the heirs of Juan Rodriguez and/or Andres Abellana.

CA: upheld the RTC's ruling finding that the pieces of evidence submitted by Yap were sufficient to support the petition. It ruled that since
it has been established that no certification of title or patent had been issued over Lot No. 922, the RTC did not err in ordering the re-
issuance of Decree No. 99500 in
the name of Andres Abellana, as Administrator of the Estate of Juan Rodriguez.

As regards the OSG's argument on non-joinder of indispensable parties, the CA highlighted that it is not a ground for dismissal of an
action. Nevertheless, it ruled that the heirs of either Andres Abellana or Juan Rodriguez were not deprived of the opportunity to be heard
as the proceeding before the RTC was an in rem proceeding (thus said heirs were deemed notified).
Thus, the OSG filed the instant petition raising essentially the same arguments but this time also advancing the theory that Yap's action
had already prescribed.

Issue: whether or not the RTC correctly ordered the cancellation of Decree No. 99500, the re-issuance thereof, and the issuance of the
corresponding Original Certificate of Title covering Lot No. 922.

SC Ruling: We deny the petition.

Prescription cannot be raised for the first time on appeal; the general rule being that the appellate court is not authorized to consider and
resolve any question not properly raised in the courts below.

1. There is nothing in the law that limits the period within which the court may order or issue a decree
Decree No. 99500 covering Lot No. 922 had been issued on November 29, 1920 pursuant to the court's decision in Cadastral
Case No. 1, GLRO Cadastral Record No. 58. The issuance of the said decree creates a strong presumption that the decision in Cadastral
Case No. 1 had become final and executory. Thus, it is incumbent upon the OSG to prove otherwise and no evidence was submitted to
support its claims.

The fact that the ownership over Lot No. 922 had been confirmed by judicial declaration several decades ago does not, however,
give room for the application of the statute of limitations or laches, nor bars an application for the re-issuance of the corresponding decree.

In the landmark case of Sta. Ana v. Menla, the Court elucidated the raison d'etre why the statute of limitations and Section 6, Rule 39 of
the Rules of Court do not apply in land registration proceedings.

“In special proceedings the purpose is to establish a status, condition or fact; in land registration proceedings, the ownership by a person
of a parcel of land is sought to be established. After the ownership has been proved and confirmed by judicial declaration, no further
proceeding to enforce said ownership is necessary, except when the adverse or losing party had been in possession of the land and the
winning party desires to oust him therefrom.”

For the past decades, the Sta. Ana doctrine on the inapplicability of the rules on prescription and laches to land registration cases has
been repeatedly affirmed. Clearly, the peculiar procedure provided in the Property Registration Law from the time decisions in land
registration cases become final is complete in itself and does not need to be filled in.

Furthermore, the issuance of a decree is a ministerial duty both of the judge and of the Land Registration Commission; failure of the court
or of the clerk to issue the decree for the reason that no motion therefore has been filed cannot prejudice the owner, or the person in
whom the land is ordered to be registered.

Regarding: Res Judicata, as reiterated by the Court in the more recent Ting v. Heirs of Diego Lirio:

The judgment of the court confirming the title of the applicant or oppositor, as the case may be, and ordering its registration in his name
constitutes, when final, constitutes “res judicata” against the whole world. It becomes final when no appeal within the reglementary period
is taken from a judgment of confirmation and registration.

2. The propriety of cancellation and reissuanceof Decree No. 99500, to serve as basis for the issuance of an OCT covering Lot
No. 922, had been sufficiently proven in the instant case

Records show that Yap sufficiently established that Decree No. 99500 was issued on November 29, 1920 in the name of Andres Abellana,
as Administrator of the Estate of Juan Rodriguez. Further, it was also proven during the proceedings before the court that no OCT was
ever issued covering the said lot. In this regard, Section 39 of Presidential Decree No. 1529 or the "Property Registration Decree" provides
that the original certificate of title shall be a true copy of the decree of registration. There is, therefore, a need to cancel the old decree
and a new one issued in order for the decree and the OCT to be exact replicas of each other.

Q: Why should a decree be canceled and re-issued when the same is valid and intact? If such decree is valid, why is there a need to
have it cancelled and re-issued?
Section 39 of PD 1529: "The original certificate of title shall be a true copy of the decree of registration.”
A: This provision is significant because it contemplates an OCT which is an exact replica of the decree. If the old decree will not be
canceled and no new decree issued, the corresponding OCT issued today will bear the signature of the present Administrator while the
decree upon which it was based shall bear the signature of the past Administrator. This is not consistent with the clear intention of the
law which states that the OCT shall be true copy of the decree of registration.

Court added that the heirs of the original adjudicate may file the petition in representation of the decedent and the re-issued decree shall
still be under the name of the original adjudicate. It is a well settled rule that succession operates upon the death of the decedent. The
heirs shall then succeed into the shoes of the decedent. A mere re-issuance of the decree means that the new decree shall be issued
which shall, in all respects, be the same as that of the original decree. Nothing in the said decree shall be amended nor modified; hence,
it must be under the name of the original adjudicate.

Fallo: IN VIEW OF THE FOREGOING, the petition is DENIED. The Decision dated March 16, 2017 of the Court of Appeals in CA-G.R.
CV No. 05491 is hereby AFFIRMED.
Principle/ Doctrine: Sta. Ana doctrine (Sta. Ana v. Menla) - In land registration proceedings, the ownership by a person of a parcel of land
is sought to be established. After the ownership has been proved and confirmed by judicial declaration, no further proceeding to enforce
said ownership is necessary. The issuance of a decree is a ministerial duty both of the judge and of the Land Registration Commission;
failure of the court or of the clerk to issue the decree for the reason that no motion therefore has been filed cannot prejudice the owner,
or the person in whom the land is ordered to be registered.

BERBOSO VS. CABRAL

FACTS:

The subject matter of this case is a parcel of land located in Barangay Saluysoy, Municipality of Meycauyan, Bulacan containing an area
of 23,426 square meters (subject land). The subject land was awarded to Alejandro Berboso (Alejandro) by the Department of Agrarian
Reform (DAR) on September 11, 1981 pursuant to Presidential Decree (P.D.) No. 273 by virtue of a Certificate of Land Transfer (CLT)
No. 0-056450. The same was duly registered with the Register of Deeds of Meycauyan, Bulacan.

On July 27, 1987, CLT No. 0-056450 was replaced by EP No. 445829 covering 22,426 sq m and EP No. 445830 covering the remaining
1,000 sq m.

On November 17, 1992, after Alejandro had fully complied with all the requirements for the final grant of title, the Register of Deeds of
Meycauyan, Bulacan issued Transfer Certificate of Title (TCT) No. EP-046 and TCT No. EP-047 in the name of Alejandro. TCT Nos. EP-
046 and EP-047 thereby cancelled EP Nos. 445829 and 445830.

On September 8, 1993, respondent filed with the DAR Provincial Agrarian Reform Adjudication Board (PARAB) her first petition to cancel
EP Nos. 445829 and 445830.

Meanwhile, Alejandro died in 1994. After his death, his heirs settled his estate and executed an Extra-Judicial Settlement of Estate. Thus,
on Aprill5, 1996, TCT Nos. EP-046 and EP-047 were cancelled and TCT Nos. 263885(M) and 263886(M) were issued in the name of the
heirs of Alejandro, namely, Esperanza Vda. De Berboso, Juan Berboso, Benita Berboso Gonzales, Adelina Berboso Villegas and Rolando
Berboso.

The PARAB rendered a decision in favor of Alejandro and accordingly affirmed the validity of the EP Nos. 445829 and 445830.
Respondent's appeal to the DARAB was denied. Respondent elevated the case to the CA via a Petition for Review docketed as CA-G.R.
SP No. 44666. The CA in its Decision4 dated April 21, 1998, affirmed the decisions of the PARAB and the DARAB.

Respondent assailed the CA decision to this Court, but on December 9, 1998 Resolution,5 this Court dismissed the respondent's petition.
Pending the resolution of the motion for reconsideration (MR) filed by the respondent, the latter filed on February 26, 1999, her second
petition for the cancellation of the said EP Nos. 445829 and 445830 before the PARAB docketed as DARAB Case No. R-03-02-8506'99.
Respondent claimed that petitioner sold a portion of the subject land to a certain Rosa Fernando (Fernando) within the prohibitory period
under the existing rules and regulations of the DAR and prayed again for the cancellation of EP Nos. 445829 and 445830 awarded to
Alejandro. Petitioner specifically denied the allegation of respondent that she sold a portion of the subject land to Fernando.

On March 17, 1999, this Court, in its Resolution6 denied with finality the MR filed by respondent.

Then, on December 20, 2000, the PARAB issued its Decision,7 in connection with the second petition of respondent, granting
respondent's petition and ordered as follows:

WHEREFORE, judgment is hereby rendered in favor of the [respondent] and against [petitioner] and order is hereby issued:

1. ORDERING [petitioner] and other persons acting in her behalf to vacate the landholdings in question, subject of this present litigation;

2. ORDERING the cancellation of Emancipation Patent Nos. 445829 and 445830;

3. DIRECTING the DAR officers and personnel concerned to re-allocate the subject landholdings in favor of qualified farmer- beneficiaries
in accordance with its existing DAR laws, rules and regulations on the matter.

No pronouncement as to costs.

SO ORDERED.8
Petitioner appealed the PARAB's decision to the DARAB, which the latter granted in its Decision9 dated August 30, 2006 in DARAB Case
No. 12283, thus:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the Decision of the Honorable Adjudicator a quo dated December 20, 2000 is hereby SET ASIDE.
A NEW JUDGMENT is hereby rendered DISMISSING the petition filed by petitioner-appel1ee for lack of merit.

SO ORDERED.10
Respondent herein appealed the DARAB's decision to the CA docketed as CA-G.R. SP No. 100831. The CA in its Decision11 dated May
7, 2012, reversed the DARAB and reinstated the PARAB's decision, to wit:chanRoblesvirtualLawlibrary
WHEREFORE, foregoing premises considered, the Petition for Review is GRANTED and the assailed 30 August 2006 Decision and the
Resolution dated 21 June 2007 of the DARAB is [sic] REVERSED and SET ASIDE. Accordingly, the 20 December 2000 Decision of the
Provincial Adjudicator is REINSTATED.
SO ORDERED.12
Aggrieved, petitioner brought the present Petition for Review on Certiorari raising the following issues, viz.:chanRoblesvirtualLawlibrary
DOES THE PROVINCIAL ADJUDICATOR HAVE JURISDICTION TO ACT ON A SECOND PETITION FOR CANCELLATION OF AN
EMANCIPATION PATENT WHICH HAS ALREADY BEEN CANCELLED, FILED AFTER THE DEATH OF THE ORIGINAL
GRANTEE/BENEFICIARY OF THE SAID EMANCIPATION PATENT[,] AND ONG REPLACED BY A CERTIFICATE OF TITLE ISSUED
IN THE NAME OF THE PETITIONER AND HER CHILDREN WHO WERE NOT EVEN IMPLEADED IN THE SAID PETITION AND
WHEREIN THE PARTIES HAVE NO TENANCY RELATIONSHIP WHATSOEVER;

CAN THE RESPONDENT QUESTION THE VALIDITY OF THE TORRENS TITLE ISSUED TO THE PETITIONER AND TO HER
CHILDREN BEFORE THE PROVINCIAL ADJUDICATOR WITHOUT VIOLATING THE EXPRESS PROVISION OF SECTION 48 OF
PRESIDENTIAL DECREE NO. 1529 WHICH EXPRESSLY PROVIDES THAT A CERTIFICATE OF TITLE SHALL NOT BE SUBJECT
TO COLLATERAL ATTACK, IT CANNOT BE ALTERED, MODIFIED, OR CANCELLED EXCEPT IN A DIRECT PROCEEDING IN
ACCORDANCE WITH LAW AND DOES THE PROVINCIAL ADJUDICATOR HAVE ANY JURISDICTION TO ISSUE AN ORDER WHICH
WOULD AFFECT THE RIGHTS, OWNERSHIP, INTEREST AND POSSESSION OF THE REGISTERED OWNER OF. A CERTIFICATE
OF TITLE WHO WERE NOT EVEN IMPLEADED IN THE PETITION;

WHEN WILL THE TEN YEARS PROHIBITORY PERIOD PROVIDED FOR IN SECTION 24 OF THE COMPREHENSIVE AGRARIAN
REFORM PROGRAM (R.A. NO. 6657) COMMENCE, IS IT FROM THE DATE THE LAND WAS AWARDED TO THE BENEFICIARY,
OR WILL IT COMMENCE TO RUN ONLY FROM THE DATE THE CLOA OR EMANCIPATION PATENT WAS ISSUED TO THE
BENEFICIARY?

UNDER THE RULE OF EVIDENCE, WHICH WEIGHT [sic] MORE, A FINAL DECISION RENDERED BY A COMPETENT COURT OR
THE FINDINGS AND OPINION OF THE PROVINCIAL ADJUDICATOR BASE [sic] ON UNVERIFIED AND UNIDENTIFIED PRIVATE
DOCUMENTS WHOSE ORIGINAL COPY WERE NOT EVEN PRESENTED[;]

DOES FORUM SHOPPING AND THE PRINCIPLE OF RES JUDICATA APPLIES [sic] IN THIS SECOND PETITION FOR
CANCELLATION OF EMANCIPATION PATENT FILED BY THE RESPONDENT[.]13
Ultimately, the issues to be resolved in this case are: 1) whether the principle of res judicata and forum shopping apply in this case, such
that the second petition for cancellation of EP Nos. 445829 and 445830 was barred by Our decision in G.R. No. 135317 dismissing
respondent's first petition; 2) whether the petitioner sold the subject land to a certain Fernando in violation of the prohibition to transfer
under the provisions of P.D. No. 27; and 3) whether the petition for cancellation of EP Nos. 445829 and 445830 constitute as a collateral
attack to the certificate of title issued in favor of Alejandro.

The Court's Ruling

At the outset, a Rule 45 petition is limited to questions of law, and the factual findings of the lower courts are, as a rule, conclusive on this
Court. Despite this Rule 45 requirement, however, Our pronouncements have likewise recognized exceptions,14 such as the situation
obtaining here - where the tribunals below conflict in their factual findings and when the judgment is based on a misapprehension of
facts.15

The principle of res judicata and forum shopping does not apply in the present case.

Petitioner alleges that the respondent in filing the second petition for cancellation of EP Nos. 445829 and 445830 raised issues which
have been already resolved by this Court in the first petition. The second petition involves the same subject land, same parties, same
cause of action and same reliefs prayed for. The respondent filed the second petition while the MR in G.R. No. 135317 was still pending
for resolution before this Court. As such, respondent was guilty of forum shopping. Further, petitioner claims that the elements of litis
pendentia were clearly present in this case. In the first petition, the validity of EP Nos. 445829 and 445830 was affirmed by this Court in
G.R. 135317; as such, the same constitutes res judicata to the second petition.

We are not persuaded.

In Daswani v. Banco de Oro Universal Bank, et al.,16 the Court elucidated that:chanRoblesvirtualLawlibrary
In determining whether a party violated the rule against forum shopping, the most important factor to consider is whether the elements of
litis pendentia concur, namely: a) there is identity of parties, or at least such parties who represent the same interests in both actions; b)
there is identity of rights asserted and reliefs prayed for, the relief being founded on the same facts; and, c) that the identity with respect
to the two preceding particulars in the two cases is such that any judgment that may be rendered in the pending case, regardless of which
party is successful, would amount to res judicata in the other case.17
Meanwhile, in Club Filipino Inc., et al. v. Bautista, et al.,18 the Court enumerated, to wit:chanRoblesvirtualLawlibrary
The elements of res judicata are: 1) the judgment sought to bar the new action must be final; 2) the decision must have been rendered
by a court having jurisdiction over the subject matter and the parties; 3) the disposition of the case must be a judgment on the merits; and
4) there must be as between the first and second action, identity of parties, subject matter and causes of action.19
In the case at bar, the first petition for cancellation of EP Nos. 445829 and 445830 was based on the validity of its issuance in favor of
Alejandro, while the second petition was based on the alleged violation of the prohibition on the sale of the subject land. As such, there
is no, as between the first petition and the second petition, identity of causes of action. Therefore, the final decision in G.R. No. 135317
does not constitute as res judicata on the second petition.
II

Respondent was not able to prove that petitioner violated the prohibition on the sale of the subject land.

It is a basic rule of evidence that each party must prove his affirmative allegation.20 The party who alleges an affirmative fact has the
burden of proving it because mere allegation of the fact is not evidence of it. Verily, the party who asserts, not he who denies, must
prove.21

Respondent alleged that petitioner sold a portion of the subject land to Fernando as evidenced by the Kasunduan22 dated December 17,
1994. As such, respondent bears the burden of proving that there is indeed a sale between petitioner and Fernando, rather than petitioner
to prove that there is no sale.

Examination of the records will show that the Kasunduan dated December 17, 1994 is a mere photocopy; as such, the same cannot be
admitted to prove the contents thereof. The best evidence rule requires that the highest available degree of proof must be produced. For
documentary evidence, the contents of a document are best proved by the production of the document itself to the exclusion of secondary
or substitutionary evidence.23

Rule 130, Section 3 of the Rules of Court states that:chanRoblesvirtualLawlibrary

Sec. 3. Original document must be produced; exceptions. - When the subject of inquiry is the contents of a document, no evidence shall
be admissible other than the original document itself, except in the following cases:

(a) When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the offeror;

(b) When the original is in the custody or under the control of the party against whom the evidence is offered, and the latter fails to produce
it after reasonable notice;

(c) When the original consists of numerous accounts or other documents which cannot be examined in court without great loss of time
and the fact sought to be established from them is only the general result of the whole; and

(d) When the original is a public record in the custody of a public officer or is recorded in a public office.
Rule 130, Section 5 of the Rules of Court provides the rules when secondary evidence may be presented,
thus:chanRoblesvirtualLawlibrary
Sec. 5. When original document is unavailable. - When the original document has been lost or destroyed, or cannot be produced in court,
the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on his part, may prove its contents
by a copy, or by a recital of its contents in some authentic document, or by the testimony of witnesses in the order stated.
Accordingly, the offeror of the secondary evidence is burdened to satisfactorily prove the predicates thereof, namely: (1) the execution or
existence of the original; (2) the loss and destruction of the original or its non-production in court; and (3) the unavailability of the original
is not due to bad faith on the part of the proponent/offeror. Proof of the due execution of the document and its subsequent loss would
constitute the basis for the introduction of secondary evidence.24

Nowhere in the records will show that the respondent proved that the original of the Kasunduan dated December 17, 1994 exists.
Respondent even failed to explain why she merely presented a photocopy of the Kasunduan. Respondent likewise failed to prove the
contents of the Kasunduan in some authentic document, nor presented Fernando, a party to the said Kasunduan or any witness for that
matter. As such, respondent failed to prove the due execution and existence of the Kasunduan. Therefore, a photocopy of the Kasunduan
cannot be admitted to prove that there is indeed a sale between petitioner and Fernando.

Further, the Kasunduan is merely a private document since the same was not notarized before a notary public.

Rule 132, Section 20 of the Rules of Court states that a private document, before the same can be admitted as evidence, must first be
authenticated, to wit:chanRoblesvirtualLawlibrary
Sec. 20. Proof of private document. - Before any private document offered as authentic is received in evidence, its due execution and
authenticity must be proved either:

(a) By anyone who saw the document executed or written; or

(b) By evidence of the genuineness of the signature or handwriting of the maker.

Any other private document need only be identified as that which it is claimed to be.
In Otero v. Tan,25 the Court held that:chanRoblesvirtualLawlibrary
The requirement of authentication of a private document is excused only in four instances, specifically: (a) when the document is an
ancient one within the context of Section 21, Rule 132 of the Rules of Court; (b) when the genuineness and authenticity of an actionable
document have not been specifically denied under oath by the adverse party; (c) when the genuineness and authenticity of the document
have been admitted; or (d) when the document is not being offered as genuine.26
Here, the Kasunduan is not authenticated by the respondent. No one attested to the genuineness and due execution of the document.
Fernando was not presented nor did he submit an affidavit to confirm and authenticate the document or its contents. Neither was the
requirement of authentication excused under the above-cited instances.
Since the Kasunduan dated December 17, 1994 was not authenticated and was a mere photocopy, the same is considered hearsay
evidence and cannot be admitted as evidence against the petitioner. The CA, therefore erred when it considered the Kasunduan as
evidence against the petitioner.

III

The petition for cancellation of EP Nos. 445829 and 445830 constitutes as a collateral attack to the validity of the certificate of title issued
in favor of petitioner and her children. Therefore, the same should be dismissed.

Section 48 of P.D. No. 1529 or the Property Registration Decree proscribes a collateral attack to a certificate of title and allows only a
direct attack thereof.27 A Torrens title cannot be altered, modified or cancelled except in a direct proceeding in accordance with law.
When the Court says direct attack, it means that the object of an action is to annul or set aside such judgment, or enjoin its enforcement.
On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment or proceeding
is nevertheless made as an incident thereof.28

In Bumagat, et al. v. Arribay,29 the Court reiterated the rule that:

Certificates of title issued pursuant to emancipation patents acquire the same protection accorded to other titles, and become indefeasible
and incontrovertible upon the expiration of one year from the date of the issuance of the order for the issuance of the patent Lands so
titled may no longer be the subject matter of a cadastral proceeding; nor can they be decreed to other individuals. The rule in this
jurisdiction, regarding public land patents and the character of the certificate of title that may be issued by virtue thereof, is that where
land is granted by the government to a private individual, the corresponding patent therefor is recorded, and the certificate of title is issued
to the grantee; thereafter, the land is automatically brought within the operation of the Land Registration Act.30
As such, upon expiration of one year from its issuance, the certificate of title shall become irrevocable and indefeasible like a certificate
issued in a registration proceeding.31 Therefore, TCT Nos. 263885(M) and 263886(M) issued in favor of petitioner and her children as
heirs of Alejandro are indefeasible and binding upon the whole world unless it is nullified by a court of competent jurisdiction in a direct
proceeding for cancellation of title.32 Thus, We find that the petition to cancel EP Nos. 445829 and 445830 is a collateral attack to the
validity of TCT Nos. 263885(M) and 263886(M); as such, the same should not be allowed.

Therefore, in view of the fact that respondent was not able to sufficiently prove that petitioner sold the subject land to Fernando and that
the petition to cancel EP Nos. 445829 and 445830 is a collateral attack to the validity of TCT Nos. 263885(M) and 263886(M), We hold
that the CA erred in reversing the decision of the DARAB.

WHEREFORE, the foregoing considered, the petition is GRANTED.

CLT REALTY VS. HI GRADE FEEDS CORP

FACTS:

The properties in dispute were formerly part of the notorious Maysilo Estate left by Gonzalo Tuason, the vastness of which measures
1,660.26 hectares, stretching across Caloocan City, Valenzuela, and Malabon, covered by five (5) mother titles or Original Certificate of
Title (OCT). One of the mother titles is OCT No. 994, the mother title in dispute. Later on, smaller lots forming part of the Maysilo Estate
were sold to different persons. Several subsequent subdivisions, consolidations, and one expropriation of the Estate, spawned numerous
legal disputes, living-up to the name "Land of Caveat Emptor." One of these disputed lots was Lot 26, the property subject of this litigation.
The conflict arose due to an overlapping of the properties of CLT and Hi-Grade, which prompted CLT to file a case for Annulment of
Transfer Certificates of Title, Recovery of Possession, and Damages before the Regional Trial Court (RTC) of Caloocan City, Branch
121, docketed as Civil Case No. C-15463 against Hi-Grade.

The Ruling of the RTC:

After trial, the RTC ruled in favor of CLT. According to the RTC, Hi-Grade's title, the older title, cannot prevail over CLT's title because it
suffers from patent defects and infirmities. Although Hi-Grade paid realty taxes on the subject properties, it is not considered as a
conclusive proof of ownership.
Hi-Grade filed a Motion for New Trial and/or Reconsideration on the grounds of newly discovered evidence and serious and patent errors
in the court's appreciation of evidence and factual findings based on the decision of the court in Civil Case No. C-15491, entitled "CLT v.
Sto. Niño Kapitbahayan Association."
The RTC denied the motion for utter lack of merit. According to the RTC, the ruling in favor of Hi-Grade in Sto. Niño is not a newly-
discovered evidence, as Hi-Grade could not have failed to produce such evidence if it exercised reasonable diligence. Hi-Grade's reliance
in the aforesaid case is already moot and academic as the court in Sto. Niño already reconsidered its decision and upheld the validity of
CLT's title.

The Ruling of the Court of Appeals:

During the pendency of the appeal, Hi-Grade filed a Motion to Admit and Take Judicial Notice of Committee Report on Senate Inquiry
into Maysilo Estate Submitted by the Committees on Justice and Human Rights and on Urban Planning, Housing and Resettlement
(Senate Report) on 1 July 1998. The Court of Appeals granted the motion in a Resolution. Included in the Resolution, however, is a
statement that although the Court of Appeals takes judicial notice of the Senate Report, the Court of Appeals is not bound by the findings
and conclusions therein. S
Departing from the trial court's findings of fact, the Court of Appeals ruled as baseless the trial court's reliance on the testimonies of CLT's
witnesses, Vasquez and Bustalino, on the alleged patent infirmities and defects in TCT No. 4211. According to the Court of Appeals,
Vasquez and Bustalino never testified that the issuance of TCT No. 4211 failed to conform to the registration procedures in 1917, the
year it was issued. Also, Vasquez and Bustalino are incompetent to testify on the customary practices in land registration at that time.
Reversing the Decision of the RTC, the Decision of the Court of Appeals reads:

Issue(s):
Whether the Court of Appeals committed a reversible error when it
took judicial notice of the Senate Report.

Ruling:
Taking judicial notice of acts of the Senate is well within the ambit of the law. Section 1 of Rule 129 of the Revised Rules on Evidence
provides:
SECTION 1. Judicial notice, when mandatory. — A court shall take judicial notice, without the introduction of evidence, of the existence
and territorial extent of states, their political history, forms of government and symbols of nationality, the law of nations, the admiralty and
maritime courts of the world and their seals, the political constitution and history of the Philippines, the official acts of legislative, executive
and judicial departments of the Philippines, the laws of nature, the measure of time, and the geographical divisions. (1a) (Emphasis and
underscoring supplied)

Judicial notice is the cognizance of certain facts that judges may properly take and act on without proof because these facts are already
known to them; it is the duty of the court to assume something as a matter of fact without need of further evidentiary support. Otherwise
stated, by the taking of judicial notice, the court dispenses with the traditional form of presentation of evidence, i.e. the rigorous rules of
evidence and court proceedings such as cross-examination.
The Senate Report, an official act of the legislative department, may be taken judicial notice of.
Since this Court is not a trier of fact[s], we are not prepared to adopt the findings made by the DOJ and the Senate, or even consider
whether these are admissible as evidence, though such questions may be considered by the Court of Appeals upon the initiative of the
parties. . . . The reports cannot conclusively supersede or overturn judicial decisions, but if admissible they may be taken into account as
evidence on the same level as the other pieces of evidence submitted by the parties. The fact that they were rendered by the DOJ and
the Senate should not, in itself, persuade the courts to accept them without inquiry. The facts and arguments presented in the reports
must still undergo judicial scrutiny and analysis, and certainly the courts will have the discretion to accept or reject them. cHA

Thus, the Senate Report shall not be conclusive upon the courts, but will be examined and evaluated based on its probative value. The
Court of Appeals explained quite pointedly why the taking of judicial notice of the Senate Report does not violate the republican principle.
Thus:
However, the question of the binding effect of that Report upon this Court is altogether a different matter. Certainly, a determination by
any branch of government on a justiciable matter which is properly before this Court for adjudication does not bind the latter. The finding
of the Senate committees may be the appropriate basis for remedial legislation but when the issue of the validity of a Torrens title is
submitted to a court for resolution, only the latter has the competence to make such a determination and once final, the same binds not
only the parties but all agencies of government.

That there is such a document as the Senate Report was all that was conceded by the Court of Appeals. It did not allow the Senate
Report to determine the decision on the case.

WHEREFORE, the petition is hereby DISMISSED.

MENDOZA VS. GARANA

FACTS:

Spouses Garana bought the subject property from certain Jalbuena. Before the sale, there was an adverse claim recorded in the title of
Jalbuena,this fact was known to Spuses Garana. By virtue of such adverse claim, Jalbuena was directed to surrender her srcinal duplicate
copy for the properannotation of the adverse claim, however, jalbuena did not do so. Suchadverse claim was later on removed but still
the heirs of Manuel Uy soughtfor the registration of notice of lis pendens to the title of Jalbuena but thesame was not recorded in the
srcinal duplicate title of Jalbuena due to someslight of hand of an employee of ROD but the same notice was entered inthe primary book
or day book in the ROD.Spouses Garana, after knowing that such adverse claim was alreadyremoved, the Spouses pursued the sale.
Thus, by virtue of the sale, a newtitle was issued over the subject land without annotating the notice of lispendens. Subsequently, Spouses
Garana mortgaged the property to FarEast Bank and Trust Company.The Heirs of Manuel Uy learned of the sale between Jalbuena and
SpousesGarana. The Heirs then notified the Register of Deeds of the procedurallapses. Thus, to remedy the lapses, the ROD the filed a
petition with the trialcourt to allow the ROD Lucena to annotate the notice to the new title. Therespondents opposed the move alleging,
among others, that when the salewas perfected there was no annotation whatsoever in the title. Therefore, therespondents, specifically
Spouses Garana, is not required to go beyond theface of the title when dealing with a registered land. The Trial Court ruled infavor of
ROD Lucena. The respondents agrrieved, appealed the decision ofthe Trial Court with the CA. The appeal was granted. Hence, the
instantpetition.

ISSUES:

WHETHER ENTRY IN THE PRIMARY ENTRY BOOK OR DAY BOOK ISALREADY SUFFICIENT NOTICE TO ALL PERSONS OF
SUCHADVERSE CLAIM.

WHETHER SPOUSES GARANA AND BPI IS ENTITLED TO RAISE THEDOCTRINE OF INDEFEASIBLITY OF TITLE.

RULING:
YES! in the registration of a voluntary instrument such as a sale, a mortgage, or a lease, the owner’s production of his duplicate certificate
of title is necessary before registration. Since the instrument sought to be registered is the willful act of the owner, he is expected to
produce all the necessary documents that will facilitate its registration. On the other hand, an involuntary instrument such as an
attachment, a lien, a notice of lis pendens, and the like, are adverse to the claims of the registered owner. Thus, he cannot be expected
to provide all the necessary documents such as his owner’s duplicate copy of the title.

For this reason, the law does not require the presentation as well as the annotation of the involuntary instrument on the owner’s duplicate
title, or even on the srcinal title. The mere recording of the involuntary instrument in the primary entry book or day book is sufficient to
bind the registered land and affect third persons dealing with it .x x xin involuntary registration, the entry of the instrument in the primary
entry book or day book already serves as adequate notice to all persons of another person’s or entity’s adverse claim over a registered
land.

2. No. Before buying the property, the Spouses Garana already knew of Belen Uy’s annotation of an adverse claim on TCT No. T-72029
on August 16, 1993.The Spouses Garana did not rebut the petitioner’s allegation that upon knowing that this first annotation was cancelled
by Bienaflor C. Umali on October 4, 1994, they immediately proceeded with their purchase of the subject land from Jalbuena a month
after, or on November 7, 1994. They did not even bother to check further with Jalbuena, or inquire from Belen Uy, knowing well that it
was not she who caused the cancellation of her adverse claim. The existing circumstances before their purchase should have compelled
them to check beyond the four corners of TCT No. T-72029. Their failure todo so negated their claim that they were innocent purchasers
for value. The same is true with BPI which should have exercised a higher degree ofdiligence when it dealt with TCT No. T-77739 and its
antecedent title, TCT No. T-72029. As a banking institution, BPI is expected to exert a higher degree of diligence, care, and prudence
than ordinary individuals in handling its real estate transactions. In addition, the Court notes that the Spouses Garana and BPI should not
be allowed to raise the defense of the doctrine of indefeasibility of title as theydid not act in good faith. They disregarded glaring facts and
circumstances that should have prompted them to inquire beyond the four comers of TCTNo. T-72029.

RD NEGROS VS. ANGLO

FACTS:

The Assurance Fund is part of our property registration system covered by Presidential Decree No. 1529.1 Its purpose is to protect
individuals who rely on a property's certificate of title as evidence of ownership. A claim from the fund must meet the strict requirements
of Presidential Decree No. 1529:chanRoblesvirtualLawlibrary

SEC. 95. Action for compensation from funds. — A person who, without negligence on his part, sustains loss or damage, or is deprived
of land or any estate or interest therein in consequence of the bringing of the land under the operation of the Torrens system of arising
after original registration of land, through fraud or in consequence of any error, omission, mistake or misdescription in any certificate of
title or in any entry or memorandum in the registration book, and who by the provisions of this Decree is barred or otherwise precluded
under the provision of any law from bringing an action for the recovery of such land or the estate or interest therein, may bring an action
in any court of competent jurisdiction for the recovery of damages to be paid out of the Assurance Fund.ChanRoblesVirtualawlibrary
Claims will not be allowed when the claimant is negligent.

On June 29, 1960, Alfredo V. de Ocampo (de Ocampo) filed an application before the Court of First Instance of Negros Occidental2 to
register two parcels of prime sugar land,3 Lot No. 25094 of the cadastral survey of Escalante and Lot No. 8175 of the cadastral survey
of Sagay. The registration was contested by the Republic of the Philippines Bureau of Education (the Republic).6 According to the
Republic, the lots de Ocampo sought to register were bequeathed to the Bureau of Education by the late Esteban Jalandoni on September
21, 1926.7 Due to the donation, the Bureau of Education owned the lots as evidenced by Transfer Certificate of Title (TCT) No. 6014.8

While registration proceedings were pending, de Ocampo entered into an agreement with Oscar Anglo, Sr. (Anglo, Sr.) on June 15, 1962.
Their agreement, denominated as a Deed of Conditional Sale, included an undertaking that de Ocampo would cede, transfer, and convey
Lot No. 2509 and part of Lot No. 817 under certain conditions.9

In the Decision dated August 3, 1965, Branch IV of the Court of First Instance of Negros Occidental ordered the registration of Lot No.
2509 and Lot No. 817 in favor of de Ocampo.10 On October 1, 1965, Original Certificate of Title (OCT) No. 576-N11 covering both lots
was issued in the name of de Ocampo.12

On December 28, 1965, the Republic filed a Petition for Relief from Judgment with Preliminary Injunction Pending Proceeding before the
Court of First Instance in San Carlos City13 assailing the Decision dated August 3, 1965.14

On January 6, 1966, de Ocampo sold Lot No. 2509 and a portion of Lot No. 817, Lot No. 817-D,15 to Anglo, Sr.16 The Deed of Absolute
Sale was registered and annotated at the back of OCT No. 576-N.17 The Register of Deeds cancelled OCT No. 576-N and subsequently
issued TCT No. T-42217, covering Lot No. 2509 and Lot No. 817-D, in favor of Anglo, Sr.18

On March 3, 1966 and August 24, 1966, the Republic caused the annotations of notices of lis pendens in Anglo, Sr.'s transfer certificate
of title.19

On August 20, 1967, the Court of First Instance in San Carlos City dismissed the Republic's Petition for Relief from Judgment.20

The Republic's appeal before the Court of Appeals was likewise dismissed in the Resolution dated August 21, 1969.21 The Republic filed
an appeal by certiorari to this court.22 The case was entitled Republic of the Philippines v. Court of Appeals.23
Despite the notices of lis pendens, on May 17, 1976, Anglo, Sr. conveyed the lots covered by TCT No. T-42217 to Anglo Agricultural
Corporation in exchange for shares of stock.24 In the Deed of Conveyance, Anglo Agricultural Corporation, as transferee, assumed the
risk of an adverse decision relating to the lots as stated in the notices of lis pendens:chanRoblesvirtualLawlibrary
5. That whatever adverse decision that might finally be rendered regarding the case involving the above described properties which are
the subject matter of the notices of lis pendens mentioned in the second WHEREAS clause above, shall be at the risk of the
TRANSFEREE and TRANSFEREE hereby agrees to free, release, acquit, and forever discharge [Anglo, Sr.] his heirs, successors and
assigns from any liability, claims, demands, suits, actions, causes of action and damages whatsoever, at law or in equity of any matter,
or thing, done or omitted, or suffered to be done by [Anglo, Sr.] prior to or and including the date hereof, and more specifically with regards
to the parcels of land herein conveyed[.]25cralawredChanRoblesVirtualawlibrary
On May 19, 1976, TCT No. T-42217 was cancelled, and a new certificate of title, TCT No. T-88727, was issued in favor of Anglo
Agricultural Corporation.26

However, on June 7, 1976, Anglo Agricultural Corporation and Anglo, Sr. amended the agreement such that Anglo, Sr. assumed all risks
in case of an adverse decision:27
WHEREAS, it was brought that [Paragraph 5 of the Deed of Conveyance dated May 17, 1976] is clearly damaging and prejudicial to the
interest of the ANGLO AGRICULTURAL CORPORATION, and therefore requires to be corrected and remedied;cralawlawlibrary

WHEREAS, MR. OSCAR ANGLO, Sr. the Transferor of the subject parcels of land, has agreed to the deletion of Paragraph 5 stated in
the aforementioned Deed of Conveyance and to solely assume whatever liabilities that may arise from the adverse decision finally
rendered over the property conveyed[.]28ChanRoblesVirtualawlibrary
In the Decision dated May 31, 1978, this court remanded the Republic's case back to the Court of Appeals to be decided on its merits.29

The case was reinstated on July 29, 1983.30 The Court of Appeals promulgated a Decision against de Ocampo and his successors-in-
interest. The dispositive portion of the Decision states:chanRoblesvirtualLawlibrary
WHEREFORE, finding this appeal meritorious, the decision of the lower court in Civil Case No. 264(6164) [sic] dated August 20, 1967
and the decision in Land Registration Case N-4 dated August 3, 1965 are hereby REVERSED in toto and new judgment is hereby
rendered:

1.) granting the petition for review in Civil Case No. 264(6154);cralawlawlibrary

2.) denying the application for registration of lots 817 and 2509 of the Sagay and Escalante Cadastre in the name of respondent-applicant
Alfredo V. de Ocampo;cralawlawlibrary

3.) declaring OCT No. 576 in favor of Alfredo V. de Ocampo & TCT No. 44127 in the name of intervenor-appellee Oscar Anglo null and
void and ordering their cancellation;

4.) declaring lots 817 and 2509 of Sagay & Escalante Cadastre the property of the Bureau of Education and confirming its title TCT No.
6014 over said property;cralawlawlibrary

5.) remanding the case to the lower court for determination of the amount of income which would have been derived by the Bureau of
Education from the above-mentioned lots from 1958 until possession is transferred to the Bureau;cralawlawlibrary

6.) ordering Alfredo V. de Ocampo to pay the Bureau of Education, the amount of income as determined by the lower court under
paragraph 5 with the interest thereon at the legal rate from the filing of the complaint until fully paid.

With costs against respondent-applicant, Alfredo de Ocampo. SO ORDERED.31 (Emphasis supplied)ChanRoblesVirtualawlibrary

The Court of Appeals remanded the case to the court of origin, the Regional Trial Court of San Carlos City, Negros Occidental,32 for
execution.33

Pursuant to the Order34 dated August 20, 1984 of the Regional Trial Court, the Register of Deeds of Negros Occidental wrote a letter35
to Oscar Anglo36 requiring him to surrender TCT No. T-88727. In compliance, Oscar Anglo of Anglo Agricultural Corporation surrendered
the title.37

On April 5, 1988, Anglo, Sr. and Anglo Agricultural Corporation filed a Complaint for Recovery of Damages from the Assurance Fund
against the Register of Deeds of Negros Occidental and the National Treasurer of the Republic of the Philippines before the Regional
Trial Court of Bacolod City, Negros Occidental.38 According to their Complaint,39 Anglo, Sr. acquired the lots in good faith and for value
without any negligence on his part.40 Considering that de Ocampo passed away and left no property to his heirs before the finality of the
Court of Appeals' Decision, the only available remedy for Anglo, Sr. and Anglo Agricultural Corporation was to recover the value of the
lots from the Assurance Fund as provided for under Act No. 496 and Presidential Decree No. 1529.41

During trial, only Anglo, Sr. and Anglo Agricultural Corporation presented witnesses. Atty. David Lozada, then the Registrar of Deeds of
Negros Occidental, Anglo, Sr., and Oscar Anglo, Jr. took the witness stand.42 Atty. David Lozada confirmed that at the time of the sale
between de Ocampo and Anglo, Sr., there were no annotations of notices of lis pendens in de Ocampo's original certificate of title.43 In
Anglo, Sr.'s testimony, he stated that it was de Ocampo who was in possession of the lots prior to the sale between them.44

The Register of Deeds and the National Treasurer did not file an Opposition or Comment on the Formal Offer of Exhibits by Anglo, Sr.
and Anglo Agricultural Corporation. They also did not present evidence during trial and, instead, submitted a Memorandum.45
In the Decision46 dated November 29, 1995, the Regional Trial Court, Branch 51, of Bacolod City, Negros Occidental, awarded damages
in favor of Anglo, Sr. and Anglo Agricultural Corporation.47 The Regional Trial Court computed the fair market value at the time Anglo
Agricultural Corporation suffered the loss, in keeping with Section 97 of Presidential Decree No. 1529.48 The properties involved had a
total area of 189.2462 hectares.49 At the time of the loss, the properties were worth P35,000.00 per hectare; hence, the Regional Trial
Court awarded P6,623,617.00 as damages payable under the Assurance Fund. The Regional Trial Court also awarded P20,000.00 in
attorney's fees in favor of Anglo, Sr. and Anglo Agricultural Corporation.50

The Register of Deeds and the National Treasurer elevated the case to the Court of Appeals, questioning the propriety of the award of
damages and attorney's fees.51 In the Decision52 dated September 7, 2005, the Court of Appeals affirmed the award of damages
because it found that the situation of Anglo, Sr. and Anglo Agricultural Corporation fell within the requisites of Section 95 of Presidential
Decree No. 1529.53 However, the Court of Appeals deleted the award of attorney's fees.54 The dispositive portion of the Decision
stated:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the challenged Decision is AFFIRMED with MODIFICATION by DELETING the award of attorney's
fees.

SO ORDERED.55 (Emphasis in the original)ChanRoblesVirtualawlibrary

In the Resolution56 dated March 3, 2006, the Court of Appeals denied the Register of Deeds and the National Treasurer's Motion for
Reconsideration for lack of merit.

Hence, the Register of Deeds and the National Treasurer filed this Petition for Review on Certiorari .57 On July 9, 2007, this court decided
to give due course to the Petition and required both parties to submit their respective Memoranda.58

The Register of Deeds and the National Treasurer argue that Anglo, Sr. is not entitled to recovery from the Assurance Fund because he
is a purchaser in bad faith.59 Anglo, Sr. was negligent because "[h]e did not ascertain the legal condition of the title [of] the [properties]
he was buying."60 The Register of Deeds and the National Treasurer claim that at the time Anglo, Sr. purchased the properties from de
Ocampo, OCT No. 576-N had entries in its Memorandum of Incumbrances.61

The Register of Deeds and the National Treasurer also note that Anglo, Sr. and Anglo Agricultural Corporation's loss was caused by the
fraud committed by their predecessor-in-interest in registering and obtaining OCT No. 576-N.62 A claim from Section 95 of Presidential
Decree No. 1529 is precluded because Anglo, Sr. and Anglo Agricultural Corporation were not able to show that they were deprived of
their lots as a consequence of bringing the lots or interest under the provisions of Presidential Decree No. 1529,63 or because the
registration was made by "mistake, omission, or misdescription in any certificate or owner's duplicate."64

Finally, the Register of Deeds and the National Treasurer argue that Anglo, Sr. and Anglo Agricultural Corporation are not entitled to a
claim from the Assurance Fund because there were no lots or interest that they have been deprived of. Their predecessor-in-interest was
not the real owner of the lots; hence, no title or interest could have been validly conveyed to Anglo, Sr. and Anglo Agricultural
Corporation.65

On the other hand, Anglo, Sr. and Anglo Agricultural Corporation argue that they qualify for a claim from the Assurance Fund under
Section 95 of Presidential Decree No. 1529.66 Anglo, Sr. purchased the lots in good faith and for value; hence, a legitimate transfer
certificate of title was issued under his name.67 No negligence could be attributed to Anglo, Sr. because he relied on an original certificate
of title, and the state guarantees the correctness of the certificate.68 The loss or damage Anglo, Sr. and Anglo Agricultural Corporation
sustained "was not occasioned by a breach of trust."69 It was caused by the "fraud or ... wrongful acts committed by the original owner
... in registering and obtaining the original Certificatre [sic] of Title[.]"70

The Register of Deeds and the National Treasurer also argue that Anglo, Sr. and Anglo Agricultural Corporation's failure to implead de
Ocampo in their claim for damages bars them from claiming from the Assurance Fund because this is not in keeping with Section 97 of
Presidential Decree No. 1529.71 According to the Register of Deeds and the National Treasurer, the law requires that if the deprivation
of property is caused by persons other than the government, the action should be brought first against such person, in this case, de
Ocampo.72

Anglo, Sr. and Anglo Agricultural Corporation argue that the non-inclusion of de Ocampo as a party to the suit is allowable because de
Ocampo had passed away several years before the suit was filed. De Ocampo likewise did not leave any property as certified by the
provincial and city assessors.73

We resolve the following issues:

First, whether respondents Oscar Anglo, Sr. and Anglo Agricultural Corporation are entitled to an award of damages from the Assurance
Fund under Section 95 of Presidential Decree No. 1529; and

Second, whether respondents Oscar Anglo, Sr. and Anglo Agricultural Corporation should have impleaded Alfredo de Ocampo in their
Complaint for recovery of damages from the Assurance Fund.

We grant the Petition.

Respondents Anglo, Sr. and Anglo Agricultural Corporation do not meet the criteria set to recover damages from the Assurance Fund.

We rule that respondent Anglo, Sr. in the sale transaction on January 6, 1966 acted in good faith. However, he no longer had an interest
over the lots after he had transferred these to respondent Anglo Agricultural Corporation in exchange for shares of stock. Hence, he no
longer has a claim from the Assurance Fund. On the other hand, respondent Anglo Agricultural Corporation cannot be considered a
transferee in good faith, considering it was aware of the title's notices of lis pendens. Hence, it also has no right to claim damages from
the Assurance Fund.

A certificate of title or a Torrens74 title has special characteristics:chanRoblesvirtualLawlibrary

Under the Land Registration Act, title to the property covered by a Torrens title becomes indefeasible after the expiration of one year from
the entry of the decree of registration. The decree is incontrovertible and becomes binding on all persons whether or not they were notified
of, or participated in, the in rem registration process. . . A Torrens title is the best evidence of ownership of registered land.75 (Emphasis
supplied, citations omitted)ChanRoblesVirtualawlibrary
Every certificate of title contains an attestation that the person named is the owner of the property described in the certificate.76 Hence,
"every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and the law will in
no way oblige him to go behind the certificate to determine the condition of the property."77 When a certificate of title is clean and free
from any encumbrance, potential purchasers have every right to rely on such certificate.78 Individuals who rely on a clean certificate of
title in making the decision to purchase the real property are often referred to as "innocent purchasers for value"79 and "in good faith."80

In addition, this court has recognized the rule of caveat emptor, which translates to "buyer beware."81 In order to exercise the diligence
required by the rule, every potential purchaser must inspect the real property's certificate of title. "The rule of caveat emptor requires the
purchaser to be aware of the supposed title of the vendor and one who buys without checking the vendor's title takes all the risks and
losses consequent to such failure."82

In cases involving caveat emptor, this court reminds purchasers that their rights are always limited by the rights of the seller as stated in
the certificates of title.83 The limitations to ownership over the property, such as additional liens and mortgages, should be ascertained
by the purchaser.

It is not enough that interested purchasers rely on the copy of the certificate of title presented by the seller. In the exercise of caveat
emptor, interested purchasers must check if the seller's certificate of title corresponds to the public record of the certificate in the Registry
of Deeds.

Business transactions are facilitated by government's guarantees made through the Torrens system. Every interested buyer of real
property presumes that the seller may not be providing him or her complete information. In economics, this problem is called information
asymmetry.84 Hence, prospective buyers need a reliable system to assess the validity of the information communicated by their sellers.

Our property registration system corrects the information asymmetry by making sure pertinent information about the property, such as its
registered owner, or any encumbrances made over the property, are of public record. Laws such as Presidential Decree No. 1529 and
its predecessor, Act No. 496, ensure that the registration of property goes through a vetting process that is in rem and binds not only
government but the whole world.85

Without the indefeasibility of titles, purchasers will be forced to conduct meticulous due diligence over every real property they are about
to buy. This will require them to hire lawyers and private investigators just to ensure that the property is free from adverse claims. Hence,
transaction costs of purchasing real property will increase, which will be detrimental to commerce.

However, the Torrens system is not infallible. It is possible that through fraud or error, a person who is not the owner acquires a certificate
of title over property. The law thus created an Assurance Fund to address this possibility.

Under Presidential Decree No. 1529, for every certificate of title issued to a registered owner of the property, building, or other
improvements, the registered owner contributes "one-fourth of one per cent of the assessed value of the real estate on the basis of the
last assessment for taxation purposes, as contribution to the Assurance Fund."86 If the property has not yet been assessed for taxation
purposes, the contribution will be based on the value determined by two disinterested persons.87 These collections are pooled together
under the custody of the National Treasurer.88

In Estrellado and Alcantara v. Martinez,89 this court explained the purpose of the Assurance Fund as created under Act No. 496, the
predecessor of Presidential Decree No. 1529.
The authors of the Torrens system also wisely included provisions intended to safeguard the rights of prejudiced parties rightfully entitled
to an interest in land but shut off from obtaining titles thereto. As suppletory to the registration of titles, pecuniary compensation by way
of damages was provided for in certain cases for persons who had lost their property. For this purpose, an assurance fund was created.
But the assurance fund was not intended to block any right which a person might have against another for the loss of his land. Damages
were not to be recoverable from the assurance fund when they could be recovered from the person who caused the
loss.90ChanRoblesVirtualawlibrary
This court further explained that "[t]he Assurance Fund is intended to relieve innocent persons from the harshness of the doctrine that a
certificate is conclusive evidence of an indefeasible title to land."91

An individual who relied on the validity of a certificate of title should not be prejudiced by fraud committed during the original registration,
nor should he or she be prejudiced by the error, omission, mistake, or misdescription in the certificate of title caused by court personnel
or the Register of Deeds, his or her deputy, or other employees of the Registry. Hence, under Section 95 of Presidential Decree No.
1529:chanRoblesvirtualLawlibrary
SEC. 95. Action for compensation from funds.—A person who, without negligence on his part, sustains loss or damage, or is deprived of
land or any estate or interest therein in consequence of the bringing of the land under the operation of the Torrens system of arising after
original registration of land, through fraud or in consequence of any error, omission, mistake or misdescription in any certificate of title or
in any entry or memorandum in the registration book, and who by the provisions of this Decree is barred or otherwise precluded under
the provision of any law from bringing an action for the recovery of such land or the estate or interest therein, may bring an action in any
court of competent jurisdiction for the recovery of damages to be paid out of the Assurance Fund.ChanRoblesVirtualawlibrary
In Spouses De Guzman, Jr. v. The National Treasurer,92 this court identified two types of claimants from the Assurance Fund and the
requirements under the law:chanRoblesvirtualLawlibrary
1)
Any person who sustains loss or damage under the following conditions:
a)
that there was no negligence on his part; and
b)
that the loss or damage sustained was through any omission, mistake or malfeasance of the court personnel, or the Registrar of Deeds,
his deputy, or other employees of the Registry in the performance of their respective duties under the provisions of the Land Registration
Act, now, the Property Registration Decree; or
2)
Any person who has been deprived of any land or interest therein under the following conditions:
a)
that there was no negligence on his part;
b)
that he was deprived as a consequence of the bringing of his land or interest therein under the provisions of the Property Registration
Decree; or by the registration by any other person as owner of such land; or by mistake, omission or misdescription in any certificate of
owner's duplicate, or in any entry or memorandum in the register or other official book or by any cancellation; and
c)
that he is barred or in any way precluded from bringing an action for the recovery of such land or interest therein, or claim upon the
same.93 (Citation omitted)
However, the enumeration of these elements is closer to the construction of Section 101 of Act No. 496, and not the newer law, Section
95 of Presidential Decree No. 1529. For reference, the provision on the Assurance Fund under Act No. 496
states:chanRoblesvirtualLawlibrary
SEC. 101. Any person who without negligence on his part sustains loss or damage through any omission, mistake, or misfeasance of the
clerk, or register of deeds, or of any examiner of titles, or of any deputy or clerk of the register of deeds in the performance of their
respective duties under the provisions of this Act, and any person who is wrongfully deprived of any land or any interest therein, without
negligence on his part, through the bringing of the same under the provisions of this Act or by the registration of any other person as
owner of such land, or by any mistake, omission, or misdescription in any certificate or owner's duplicate, or in any entry or memorandum
in the register or other official book, or by any cancellation, and who by the provisions of this Act is barred or in any way precluded from
bringing an action for the recovery of such land or interest therein, or claim upon the same, may bring in any court of competent jurisdiction
an action against the Treasurer of the Philippine Archipelago for the recovery of damages to be paid out of the assurance
fund.ChanRoblesVirtualawlibrary
The governing law at the time of the transactions in this case is Presidential Decree No. 1529. Based solely on Section 95 of Presidential
Decree No. 1529, the following conditions must be met: First, the individual must sustain loss or damage, or the individual is deprived of
land or any estate or interest. Second, the individual must not be negligent. Third, the loss, damage, or deprivation is the consequence
of either (a) fraudulent registration under the Torrens system after the land's original registration, or (b) any error, omission, mistake, or
misdescription in any certificate of title or in any entry or memorandum in the registration book. Fourth, the individual must be barred or
otherwise precluded under the provision of any law from bringing an action for the recovery of such land or the estate or interest therein.

In the earliest case of La Urbana v. Bernardo,94 this court qualified that "it is a condition sine qua non that the person who brings an
action for damages against the assurance fund be the registered owner, and, as to holders of transfer certificates of title, that they be
innocent purchasers in good faith and for value."95

In Gayondato v. Treasurer of the Philippine Islands,96 there was an erroneous registration of the property that led to the exclusion of one
of the co-owners of the property from the certificate of title.97 Since the excluded co-owner was a minor at that time and no negligence
was found on her part, this court made the Treasurer of the Philippines secondarily liable for the disenfranchised co-owner's claim for
damages.98

Recent cases decided on claims from the Assurance Fund usually involve impostors selling to innocent purchasers for value. In Treasurer
of the Philippines v. Court of Appeals,99 the seller was not the real owner of the property. The seller found a way to judicially reconstitute
the title and pretended to be the owner of the property described in the title. The seller found a buyer for the property. However, two years
after, the real owner discovered the sale and sued to have the sale made by the impostor declared null and void.100

In Treasurer of the Philippines, this court denied the claim from the Assurance Fund because the "sale conveyed no title or any interest
at all to [the buyers] for the simple reason that the supposed vendor had no title or interest to transfer."101

Treasurer of the Philippines and a similar case, Spouses De Guzman, Jr., do not apply squarely to this case. In this case, there are two
different certificates of title, one in favor of de Ocampo and the other in favor of the Bureau of Education, covering the same lots. In
Treasurer of the Philippines and Spouses De Guzman, Jr., the spurious titles involve the same certificate of title.

In addition, we need to depart from the rule in Treasurer of the Philippines and Spouses De Guzman, Jr. that the sale conveyed no
interest to the buyer because the vendor did not have title. We emphasize that certificates of title, especially if in their original form and
backed by the Register of Deeds, may be relied upon by purchasers.102 Innocent purchasers should not be prejudiced by individuals
who only appear to be owners but are not the actual owners. However, there should be complete compliance with the requirements of
Section 95.

II

Respondents Anglo, Sr. and Anglo Agricultural Corporation appear to have similar interests. However, in evaluating compliance with
Section 95, they have to be treated as separate entities with different legal personalities.103 Both the Regional Trial Court and the Court
of Appeals' Decisions treated respondents Anglo, Sr. and Anglo Agricultural Corporation as a single party.

Respondent Anglo, Sr. meets the second requirement of claiming from the Assurance Fund. He was a buyer in good faith, and negligence
cannot be attributed to him when he bought the lots. The encumbrances on de Ocampo's original certificate of title did not include the
claims of the Republic at the time respondent Anglo, Sr. purchased the lots. The other encumbrances pointed out by the Republic may
co-exist with the peaceful ownership of respondent Anglo, Sr. over the lots. In the annotations on de Ocampo's original certificate of title,
the claims of a certain Alfred Maranon were only with respect to 35% of de Ocampo's lots,104 while respondent Anglo, Sr. purchased
only 65% of the lots. The other claims were attorney's liens of de Ocampo's lawyer and another claim from another lawyer, and these
liens covered only part of the value of the lots.105

Despite buying the properties in good faith and for value, respondent Anglo, Sr. does not meet the first and third requirements under
Section 95. It is clear that there is no error, omission, mistake, or misdescription in de Ocampo's certificate of title. We also find that the
fraudulent registration is not the cause of the loss suffered by respondent Anglo, Sr.

On May 17, 1976, respondent Anglo, Sr. conveyed the lots to respondent Anglo Agricultural Corporation and, in exchange, he received
3,150 shares with par value of P100.00 each.106 He could not have suffered loss because he was able to obtain P315,000.00 for the
lots. Even when his son, as First Vice President of respondent Anglo Agricultural Corporation,107 testified that his "father lost [the]
land,"108 it is not clear if that meant respondent Anglo, Sr. incurred a liability with respondent Anglo Agricultural Corporation due to an
agreement that he would be liable for any adverse decision of the court.

Respondent Anglo, Sr. only suffered loss because of the subsequent agreement between him and respondent Anglo Agricultural
Corporation. In the Board Resolution109 dated June 7, 1976, respondent Anglo, Sr. agreed "to solely assume whatever liabilities that
may arise from the adverse decision finally rendered over the property conveyed[.]"110 This undertaking caused the loss for respondent
Anglo, Sr., and not de Ocampo's fraudulent registration of the lots. Respondent Anglo, Sr. shed his rights as an innocent purchaser for
value but, instead, acted as a surety to respondent Anglo Agricultural Corporation. He may have sustained a loss, but it was under a
different capacity.

Whatever good faith that had attached during respondent Anglo, Sr.'s transaction with de Ocampo no longer existed by the time he took
the undertaking with respondent Anglo Agricultural Corporation. On June 7, 1976, the adverse claim of the Republic was already known
to the world because of the notices of lis pendens on respondent Anglo, Sr.'s transfer certificate of title. When respondent Anglo, Sr.
transferred the lots to respondent Anglo Agricultural Corporation, he already knew of the conflicting claims of ownership over the lots.

III

Respondent Anglo Agricultural Corporation is presumed to have taken cognizance of the notices of lis pendens as well. Its act of entering
into a Deed of Conveyance with respondent Anglo, Sr. is an act of negligence on the part of respondent Anglo Agricultural Corporation;
hence, this act fails to comply with the second requirement under Section 95 of Presidential Decree a No. 1529.

In Leyson v. Hon. Tañada, et al.,111 the certificate of title had also contained a notice of lis pendens before the property was sold at a
public auction.112 This court ruled that the purchaser at the public auction was "bound by the outcome of the [pending litigation.]"113
Similarly, respondent Anglo Agricultural Corporation's awareness of the notices of lis pendens makes it bound to the Court of Appeals'
decision that the lots belong to the Bureau of Education.

Respondent Anglo Agricultural Corporation also does not meet the first requisite of a loss because it no longer suffered a loss due to
respondent Anglo, Sr.'s undertaking to assume all liability in the agreement dated June 7, 1976.

Respondent Anglo Agricultural Corporation is not precluded by law from bringing an action against respondent Anglo, Sr. for the loss it
sustained. On the other hand, respondent Anglo, Sr. is barred from recovering the land because its current owner, the Bureau of
Education, holds a valid certificate of title over the lots. Respondent Anglo, Sr. meets the last requisite for a claim from the Assurance
Fund. However, due to non-compliance with all the requirements under Section 95, respondent Anglo, Sr. is barred from his claim.

Respondent Anglo, Sr. would have met the requirements for claims from the Assurance Fund had he not conveyed the properties to
respondent Anglo Agricultural Corporation. The purpose of the Assurance Fund would be fulfilled because respondent Anglo, Sr.
purchased the properties in good faith, not knowing that there was another titleholder over the same properties. Eventually, respondent
Anglo, Sr. would realize that the business transaction involved properties whose title had severe defects. However, instead of going after
his rights under the Assurance Fund, respondent Anglo, Sr. made the conscious choice of recovering the value of the properties he
purchased by selling the properties to another buyer. This bars respondent Anglo, Sr. from making a subsequent claim from the Assurance
Fund because that will be tantamount to unjust enrichment.

On the other hand, respondent Anglo Agricultural Corporation was aware of the properties' defects when respondent Anglo, Sr. conveyed
the properties to the corporation. The Deed of Conveyance even recognized the notices of lis pendens in the title. The law does not
protect parties who knowingly enter into risky business transactions. It is part of the freedom to contract, and the state is not mandated
to insure parties who enter into risky business transactions.114 As this court has stated in La Urbana:chanRoblesvirtualLawlibrary
Plaintiffs negligence is manifest in the instant case because with its knowledge of the pending litigations and of the notices of lis pendens
it should not have taken the risk of purchasing the property if it had acted prudently. As it chose to run the risk, it must suffer the
consequences of its own acts.115 (Emphasis in the original)ChanRoblesVirtualawlibrary
ChanRoblesVirtualawlibrary
IV

With respect to compliance with the procedural requirement under Presidential Decree No. 1529, respondents Anglo, Sr. and Anglo
Agricultural Corporation were able to substantially comply with the need to implead the person causing the fraud.

Section 96,116 in relation to Section 97,117 requires that the person causing the fraud, in this case, de Ocampo, should be impleaded in
the claim for damages. Respondents Anglo, Sr. and Anglo Agricultural Corporation did not include de Ocampo as a party when they filed
for their claims from the Assurance Fund.

However, in the proceedings before the Regional Trial Court, respondents Anglo, Sr. and Anglo Agricultural Corporation presented
evidence with respect to the death of de Ocampo and the absence of properties that could constitute his estate.118 The Republic did not
present countervailing evidence to show that de Ocampo or his estate was still a viable party. Using preponderance of evidence, the
Regional Trial Court could reasonably conclude that de Ocampo can no longer be impleaded.

The Assurance Fund is only liable in the last resort, as suggested under Section 97 of Presidential Decree No. 1529. The person causing
the fraud or the error should be liable first. However, if the judgment cannot be executed, the Assurance Fund is the insurance to the
innocent purchaser for value who relied on the validity of the real property's certificate of title. In showing that the person causing the
fraud passed away and did not leave property, it meant that the state cannot execute a judgment granting the innocent purchaser's claim
from such person. It excuses the claimant from impleading the person causing the fraud or his estate in the Petition because in this
situation, the judgment may only be enforced against the Assurance Fund.

Despite substantial compliance with the requirement to implead the person who caused the fraud, this does not cure the non-conformity
of respondents Anglo, Sr. and Anglo Agricultural Corporation's claim with the requirements set in Section 95 of Presidential Decree No.
1529.

WHEREFORE, the Petition is GRANTED. The Court of Appeals' Decision dated September 7, 2005 and Resolution dated March 3, 2006
are REVERSED and SET ASIDE.

ROTAIRO VS. ALCANTARA

FACTS:

Civil Case No. 672 was filed by the respondent Rovira Alcantara (Rovira) for the recovery of possession of a parcel of land in Barangay
San Andres, Cainta, Rizal, measuring 2,777 square meters and originally titled under Transfer Certificate of Title (TCT) No. 481018. Said
property was formerly owned by Rovira’s father, Victor C. Alcantara (Alcantara), and Alfredo C. Ignacio (Ignacio), who mortgaged the
property to Pilipinas Bank and Trust Company (Pilipinas Bank) in 1968. Two years after, the property was parcelled out by Alcantara and
Ignacio, through their firm Wilfredo S. Ignacio & Company (Ignacio & Co.), and separately sold to different buyers. One of the buyers was
Ambrosio Rotairo (Rotairo) who bought a 200-square meter portion on installment basis. Rotairo constructed his house on the property
identified as Lot C-1, and after completing payments, a Deed of Absolute Sale was executed on September 25, 1979 in his favor by
Ignacio & Co.4

In the meantime, Alcantara and Ignacio defaulted in their loan obligations causing Pilipinas Bank to foreclose the mortgage on the entire
property. Without redemption being made by Alcantara and Ignacio, title was consolidated in the name of Pilipinas Bank, being the highest
bidder during the auction sale. Pilipinas Bank then sold the property in a Deed of Absolute Sale dated June 6, 1975 to Rovira, who
happens to be Alcantara’s daughter.5

In 1988, Rovira filed her Amended Complaint in Civil Case No. 672 for recovery of possession and damages.After trial, the RTC dismissed
Civil Case No. 672. The Decision dated December 27, 1996 provides for the following dispositive portion:

WHEREFORE, judgment is hereby rendered dismissing the complaint and defendant’s counterclaim; and plaintiff, being the successor-
in-interest of the subdivision owner, Wilfredo S. Ignacio, is ordered to issue the corresponding transfer certificate of title to defendant
Ambrosio Rotairo pursuant to the provisions of PD [No.] 957.

SO ORDERED.6

The RTC ruled that the transaction between Ignacio & Co. and Rotairo was covered by Presidential Decree (P.D.) No. 957.7 Rovira, as
"successor-in-interest of Wilfredo S.Ignacio [and Victor Alcantara] was well aware of the condition of the property which she bought from
the Pilipinas Bank, because she lives near the land, and at the time she purchased it she was aware of the existing houses or structures
on the land."8 She was, therefore, not entitled to the relief prayed for in her complaint.

On appeal, the CA set aside the RTC decision and ordered the turnover of possession of the property to Rovira. The dispositive portion
of the assailed CA Decision dated July 21, 2005 provides:
WHEREFORE, the decision appealed from is SET ASIDE. The Heirs of Ambrosio Rotairo and their assigns, are ORDERED to turn over
possession of Lot C-1 to Rovira Alcantara. Third party defendants, William [sic] Ignacio and Victor Alcantara, are ORDERED to return
the purchase price of ₱10,000.00 to the Heirs of Ambrosio Rotairo, with interest at the rate of 6% per annum until finality of this decision,
and at the rate of 12% per annum thereafter until fully paid.

SO ORDERED.9

Petitioners sought reconsideration, which was denied by the CA in the assailed Resolution10 dated July 7, 2006.

In granting possession in favor of Rovira, the CA held that P.D. No. 957 is not applicable since the mortgagewas constituted prior to the
sale to Rotairo. According to the CA, Section 1811 of P.D. No. 957 protects innocent lot buyers, and where there is a prior registered
mortgage, the buyer purchases it with knowledge of the mortgage. In the caseof Rotairo, P.D. No. 957 does not confer "more" rights to
an unregistered buyer like him, as against a registered prior mortgagee like Pilipinas Bank and its buyer, Rovira.12 Hence, the present
petition.

Petitioners raise the following issues:

1. Whether or not, notwithstanding that the subject land is subdivision lot, Ambrosio Rotairo (father of the Petitioners), [a] buyer and
builder in good faith should suffer, while the seller in bad faith Victor Alcantara should be benefited by his malicious acts.

2. Whether or not, Ambrosio Rotairo (father of the Petitioners), a buyer and builder in good faith should suffer while the seller in bad faith
Victor Alcantara should be benefited by his malicious acts.13

Petitioners insist on the applicabilityof P.D. No. 957 in this case, and that the transaction between Rotairo and Ignacio & Co. should fall
within the protection of the law. On the other hand, Rovira principally relies on the prior registration of the mortgage and the sale in her
favor vis-à-visthe petitioners’ unregistered transactions.

The first issue then that must be resolved is whether P.D. No. 957 is applicable in this case. But the more crucial issue before the Court
is who, as between the petitioners and Rovira, has better right to the property in dispute?

Retroactive application of P.D. No. 957

The retroactive application of P.D. No. 957 to transactions entered into prior to its enactment in 1976 is already settled.1âwphi1 In Eugenio
v. Exec. Sec. Drilon,14 which involved a land purchase agreement entered into in 1972, the Court stated that the unmistakeable intent of
the legislature is to have P.D. No. 957 operate retrospectively. Moreover, the specific terms of P.D. No. 957 provide for its retroactive
effect even to contracts and transactions entered into prior to its enactment. In particular, Section 21 of P.D. No. 957 provides:

Sec. 21. Sales Prior to Decree. In cases of subdivision lots or condominium units sold or disposed of prior to the effectivity of this Decree,
it shall be incumbent upon the owner or developer of the subdivision or condominium project to complete compliance with his or its
obligations as provided in the preceding section within two years from the date of this Decree unless otherwise extended by the Authority
or unless an adequate performance bond isfiled in accordance with Section 6 hereof.

Failure of the owner or developer to comply with the obligations under this and the preceding provisions shall constitute a violation
punishable under Section 38 and 39 ofthis Decree. (Emphasis ours)

In this case, the contract to sell between Rotairo and Ignacio & Co. was entered into in 1970, and the agreement was fully consummated
with Rotairo’s completion of payments and the execution of the Deed of Sale in his favor in 1979. Clearly, P.D. No. 957 is applicable in
this case.

It was error for the CA to rule thatthe retroactive application of P.D. No. 957 is "warranted only where the subdivision is mortgaged after
buyers have purchased individual lots."15 According to the CA, the purpose of Section 18 requiring notice of the mortgage to the buyers
is to give the buyer the option to pay the instalments directly to the mortgagee; hence, if the subdivision is mortgaged before the lots are
sold, then there are no buyers to notify.16 What the CA overlooked is that Section 21 requires the owner or developer of the subdivision
project to complete compliance with its obligations within two years from 1976.The two-year compliance provides the developer the
opportunity to comply with its obligation to notify the buyers of the existence of the mortgage, and consequently, for the latter to exercise
their option to pay the instalments directly to the mortgagee.

Nevertheless, such concomitant obligation of the developer under Section 21 did not arise in this case. It must be noted that at the time
of the enactment of P.D. No. 957 in 1976 and asearly as 1974, Pilipinas Bank had already foreclosed the mortgage and bought the
properties in the foreclosure sale. There was, thus, no mortgage to speak of such that Rotairo should be notified thereof so that he could
properly exercise his option to pay the instalments directly to Pilipinas Bank.

Rovira is not a buyer in good faith

Notwithstanding the preceding discussion, the Court finds that Rovira cannot claim a better right to the property because she is not a
buyer in good faith. Initially, it must be stated that the determination of whether one is a buyer in good faith is a factual issue, which
generally cannotbe determined by the Court in a petition for review filed under Rule 45.17 The rule, nonetheless, admits of exceptions,
someof which are when the judgment of the CA is based on a misapprehension offacts or when the CA overlooked undisputed facts
which, if properly considered, would justify a different conclusion.18 A review of this case shows that the CA failed to appreciate the
relevance of certain undisputed facts, thus giving rise to its erroneous conclusion that Rovira has a better right to the property in dispute.

Rovira contended that the registered mortgage between Pilipinas Bank and Alcantara and Ignacio is superior to the unregistered contract
to sell between Ignacio & Co. and Rotairo, which was sustained by the CA. The CA applied Section 50 of Act No. 496 or the Land
Registration Act and ruled that since the sale to Rotairo was unregistered and subsequent to the registered mortgage, the latter was
obligated to respect the foreclosure and eventual sale of the property in dispute, among others.19

Indeed, the rule is that as "[b]etween two transactions concerning the same parcel of land, the registered transaction prevails over the
earlier unregistered right."20 This is in accord with Section 50 of the Land Registration Act,21 which provides:

Sec. 50. An owner of registered land may convey, mortgage, lease, charge, or otherwise deal with the same as fully as if it had not been
registered. He may use forms of deeds, mortgages[,] leases, or other voluntary instruments like those now in use and sufficient in law for
the purpose intended. But no deed, mortgage, lease, or other voluntary instrument, except a will purporting to convey or affect registered
land, shall take effect as a conveyance or bind the land, but shall operate only as a contract between the parties and as evidence of
authority to the clerk or register of deeds to make registration. The act of registration shall be the operative act to convey and affect the
land, and in all cases under this Act the registration shall be made inthe office of register of deeds for the province or provinces or city
where the land lies. (Emphasis ours)

Section 51 of the Land Registration Act further states that "[e]very conveyance, mortgage, lease, lien, attachment, order, decree,
instrument, or entry affecting registered land x x x, if registered x x x be notice to all persons from the time of such registeringx x x." "The
principal purpose of registration is merely to notify other persons not parties to a contract that a transaction involving the property has
been entered into."22 Thus, it has been held that "registration in a publicregistry creates constructive notice to the whole world."23
Moreover, "[a] person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor, and he is
not required to go beyond the certificate to determine the condition of the property."24

The rule, however, is not without recognized exceptions. "The conveyance shall not be valid against any person unless registered, except
(1) the grantor, (2) his heirs and devisees, and (3) third persons having actual notice or knowledge thereof."25 Moreover, "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 knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to inq uire into the
status of the title of the property in litigation,26 he cannot find solace in the protection afforded by a prior registration. Neither can such
person be considered an innocent purchaser for value nor a purchaser in good faith.27

In this case, two factors work against Rovira as a buyer in good faith. One, she cannot be considered a third person for purposes of
applying the rule. Rovira does not deny that she is the daughter and an heir of Victor C. Alcantara, one of the parties to the contract to
sell (and the contract of sale) executed in favor of Rotairo. "The vendor’s heirs are his privies."28 Based on such privity, Rovira is charged
with constructive knowledge of prior dispositions or encumbrances affecting the subject property made by her father.29 The fact that the
contract to sell was unregistered became immaterial and she is, therefore, bound by the provisions of the contract to sell and eventually,
the contract of sale, executed by her father in favor of Rotairo.

Further, more than the chargeof constructive knowledge, the surrounding circumstances of this case show Rovira’s actual knowledgeof
the disposition of the subject property and Rotairo’s possession thereof. It is undisputed that after the contract to sell was executed in
April 1970, Rotairo immediately secured a mayor’s permit in September 28, 1970 for the construction of his residential house on the
property.30 Rotairo, and subsequently, his heirs, has been residing on the property since then. Rovira, who lives only fifty (50) meters
away from the subject property, in fact, knew that there were "structures built on the property."31 Rovira, however, claims that "she did
not bother to inquire as to the legitimacy of the rights of the occupants, because she was assured by the bank of its title to the property."32
But Rovira cannot rely solely on the title and assurances of Pilipinas Bank; it was incumbent upon her to look beyond the title and make
necessary inquiries because the bank was not in possession of the property. "Where the vendor is not in possession of the property, the
prospective vendees are obligated to investigate the rights of one in possession."33 A purchaser cannot simply close his eyes to facts
which should put a reasonable man on guard,34 and thereafter claim that he acted in good faith under the belief that there was no defect
in the title of the vendor.35 Hence, Rovira cannot claim a right better than that of Rotairo' s as she is not a buyer in good faith.

"[I]t is a settled rule that the Land Registration Act protects only holders of title in good faith, and does not permit its provision to be used
as a shield for the commission of fraud, or as a means to enrich oneself at the expense of others. "36

Under different circumstances, the prior registration of the mortgage between Pilipinas Bank and Alcantara and Ignacio, and Rovira's
subsequent purchase of the subject property would have been valid and binding, and could have defeated Rotairo's unregistered claim
over it. But given Rovira's privity with her father Victor C. Alcantara and the fact that she had actual knowledge of the disposition of the
property and Rotairo's possession thereof, her acquisition of the property cannot be upheld.

WHEREFORE, the petition is GRANTED.

OLIVEROS VS. SMC

FACTS:

This case involves a parcel of land known as Lot 1131 (subject property) of the Malinta Estate located in Barrio Bagbaguin of Valenzuela,
Metro Manila.
Ramitex bought the subject property from co-owners Tomas Soriano (Soriano) and Concepcion Lozada (Lozada) in 1957. On the basis
of such sale, the Register of Deeds of Bulacan (Bulacan RD) cancelled the vendors’ Transfer Certificate of Title (TCT) No. 29334 and
issued TCT No. T-18460 on March 6, 1957 in favor of Ramitex.

Lot 1131 is just one of the 17 lots owned by Ramitex within the Malinta Estate. In 1986, Ramitex consolidated and subdivided its 17 lots
within the Malinta Estate into six lots only under Consolidation Subdivision Plan Pcs-13-000535. Lot 1131, which contains 8,950 square
meters, was consolidated with portions of Lots 1127-A and 1128-B to become consolidated Lot No. 4. The consolidated area of Lot 4 is
16,958 square meters. By virtue of this consolidation, the Register of Deeds of Caloocan City cancelled Ramitex’ individual title to Lot
1131 (TCT No. T-18460) and issued a new title, TCT No. T-137261, for the consolidated Lot 4.

Troubles began for Ramitex on February 22, 1989, when Oliveros filed a petition in Branch 172 of the Regional Trial Court of Valenzuela
(Valenzuela RTC) for the reconstitution of TCT No. T-17186, his alleged title over Lot 1131 of the Malinta Estate (reconstitution case). He
claimed that the srcinal copy was destroyed in the fire that gutted the office of the Bulacan RD on March 7, 1987.

Ramitex filed its opposition to Oliveros’ petition asserting that TCT No. T-17186 never existed in the records of the Bulacan RD and
cannot therefore be reconstituted. The State, through the provincial prosecutor, also opposed on the basis that Oliveros’ TCT No. T-
17186, which is embodied on a judicial form with Serial Number (Serial No.) 124604, does not come from official sources. The State
submitted a certification from the Land Registration Authority (LRA) that its Property Section issued the form with Serial No. 124604 to
the Register of Deeds of Davao City (Davao RD), and not to the Bulacan RD, as claimed in Oliveros’ alleged title.

In light of Ramitex’ opposition and ownership claims over Lot 1131, Oliveros filed a complaint for the declaration of nullity of Ramitex’ title
over Lot 1131 on November 16, 1990 (nullity case). This complaint was docketed as Civil Case No. 3232-V-89 and raffled to Branch 172
of the Valenzuela RTC. Oliveros claimed that he bought the subject property sometime in November 1956 from the spouses Domingo
De Leon and Modesta Molina, and pursuant to such sale, the Bulacan RD issued TCT No. T-17186 in his favor on November 14, 1956.

He was joined in the suit by his alleged overseers to Lot 1131, petitioners Moises and Felix Dela Cruz, who were judicially ejected by
Ramitex from Lot 1127 two years before.

Oliveros and his co-petitioners alleged that Ramitex did not own Lot 1131 and that its individual title to Lot 1131, TCT No. 18460, was
fake and was used by Ramitex to consolidate Lot 1131 with its other properties in the Malinta Estate. They further claimed that the
resulting consolidated Lot 4 is not actually a consolidation of several lots but only contains Lot 1131, which belongs to Oliveros. Thus,
they asked for the nullification as well of Ramitex’ title to consolidated Lot 4, insofar as it unlawfully included Lot 1131.

ISSUE:

Whether the doctrines of indefeasibility and conclusiveness of title may be applied in the case at bar.

RULING:

NO! Oliveros et al contend that the CA erred in holding that it was their burden to prove the invalidity of SMC’s title and that they failed to
discharge such burden. They maintain that the mere existence of a prior title in Oliveros’ name suffices to create the presumption that
SMC’s title, being the later title, is void. With that presumption, it was incumbent upon SMC to prove the validity of its alleged title.

Petitioners are oversimplifying the rule. The principle that the earlier title prevails over a subsequent one applies when there are two
apparently valid titles over a single property. The existence of the earlier valid title renders the subsequent title void because a single
property cannot be registered twice. As stated in Metropolitan Waterworks and Sewerage Systems v. Court of Appeals, which petitioners
themselves cite, “a certificate is not conclusive evidence of title if it is shown that the same land had already been registered and an
earlier certificate for the same is in existence.” Clearly, a mere allegation of an earlier title will not suffice.

It is elementary that parties have the burden of proving their respective allegations. Since petitioners allege that they have a title which
was issued earlier than SMC’s title, it was their burden to prove the alleged existence and priority of their title. The trial and appellate
courts’ shared conclusion that petitioners’ TCT No. T-17186 does not exist in the official records is a finding of fact that is binding on this
Court. Petitioners have not offered a reason or pointed to evidence that would justify overturning this finding. Neither did they assert that
this factual finding is unsubstantiated by the records. Without a title, petitioners cannot assert priority or presumptive conclusiveness.

DESIDERIO DALISAY VS. SSS

FACTS:

Involved is a parcel of land in Agdao, Davao City.

Sometime in the year 1976, respondent Social Security System (SSS) filed a case before the Social Security Commission (SSC) against
the Dalisay Group of Companies (DGC) for the collection of unremitted SSS premium contributions of the latter's employees.

On March 11, 1977, Desiderio Dalisay, then President of petitioner Desiderio Dalisay Investments, Inc. (DDII), sent a Letter to SSS
offering the subject land and building to offset DGC's liabilities subject of the aforementioned cases at P3,500,000.

On July 24, 1982, DDII issued a Resolution stating that the properties covered by TCT Nos. T-18204 and T-8227 together with all
improvements thereon be sold to SSS in order to settle the unremitted premiums and penalty obligations of DDII, Davao Stevedore
Terminal Co., and Desidal Fruits, Inc. In the same Board Resolution, Desiderio Dalisay, or in his absence, Veronica Dalisay-Tirol (Dalisay-
Tirol), was authorized to sign in behalf of the corporation any and all papers pertinent to effect full and absolute transfer of said properties
to the SSS.

On May 21, 1982, the real estate appraisers Joson, Capili and Associates, whose services Dalisay engaged for the purpose of appraising
the value of the properties being offered to SSS, sent a letter to him informing him that the total value of the lots is One Million Nine
Hundred Fifty Four Thousand Seven Hundred Seventy-Seven & 78/100 (P1,954,777.78), rounded to P1,955,000. This Appraisal Report
was then indorsed to the SSC.

On May 27, 1982, during a meeting (1982 Meeting) of the SSS' Committee on Buildings, Supplies and Equipment (Committee) attended
by Atty. Cabarroguis, the latter, representing DGC, explained that the DGC is in financial distress and is in no way capable of settling its
obligation in cash. When asked what the DGC's offer is, he stated that he has "the authority to offer [the properties] in the amount of 2
million pesos." He also assured them that that they will turn the properties over to SSS free of liens and encumbrances. The offer for
dacion was accepted at the appraised value of P2,000,000. As regards the implementation of the dacion, Atty. Cabarroguis stated that
"[t)]he Legal Department of the SSS can prepare the Deed of Sale or whatever documents that have to be prepared. My clients are ready
to vacate the premises and you can have it occupied anytime." During the same Meeting, Atty. Cabarroguis likewise relayed to SSS that
they are requesting that the P2,000,000 amount be applied first to the unpaid premiums and the excess be used to settle part of the
penalties due.

On May 28, 1982, DDII's total liabilities with SSS covering unpaid premium contributions, inclusive of penalties and salary/calamity loan
amortizations, amounted to P4,421,321.62.

On June 9, 1982, the SSC issued Resolution No. 849 - s. 82. In said Resolution, it accepted DDII's proposed dacion en pago pegged at
the appraised value of P2,000,000.

The SSC then informed DDII of its acceptance of the proposed dacion in payment, including its specified terms and conditions, via a
Letter dated June 17, 1982.

On July 8, 1982, Dalisay-Tirol, then Acting President and General Manager of Dalisay Investment, informed SSS that the company is
preparing the subject property, especially the building, for its turnover on August 15, 1982.

Later, or on July 31, 1982, An Affidavit of Consent for the Sale of Real Property was executed by the surviving heirs of the late Regina L.
Dalisay, stating that in order to settle the companies' obligations to SSS, they expressly agree to the sale thereof to the SSS for its partial
settlement.

On September 18, 1989, Desiderio Dalisay passed away.

As of November 30, 1995, the company's total obligations allegedly amounted to P15,689,684.93.

Later, or on December 29, 1995, the Philippine National Bank (PNB) executed a Deed of Confirmatory Sale in favor of DDII for properties
that it reacquired, including the property subject of the present dispute.

On March 20, 1998, Eddie A. Jara (Jara), Assistant Vice-President of the SSS - Davao I Branch, executed an Affidavit of Adverse Claim
over the properties subject of the instant case because of the companies' failure to turn over the certificates of title to SSS.

Then, on April 2, 1998, Jara sent a letter to Dalisay-Tirol, formally demanding the certificates of title over the properties subject of the
dacion.[26] In said letter, Jara stated that "[t]he mortgage with PNB has already been settled by Desiderio Dalisay Investments, Inc. last
January 20, 1994, but the titles were not delivered to the SSS in violation of the express terms in the dacion in payment that the Dalisay
group should deliver the titles after the release of the mortgage with the PNB."[27]

In her reply dated May 5, 1998 to the April 2, 1998 Letter, Dalisay-Tirol, who was then the President of DDII, stated that the corporation
could not at that time give due course to and act on the matter because of several issues that need to be resolved first, including two
cases involving the subject properties, to wit: (1) the properties are being claimed by the estate of Desiderio F. Dalisay, Sr. and included
in the inventory already filed by the executrix, where the corporation's stockholders are contesting said inclusion; and (2) the SSS' pending
petition covering the properties where the accuracy and propriety of the amount of PI5,605,079.25 contained therein has yet to be
substantiated and verified.[28] She likewise pointed out that the "Board Resolution covers only two (2) parcels of land which were
proposed and submitted for the purpose of a negotiated sale to settle unremitted premiums and penalties."

On November 18, 1999, DDII, through its Managing Director Edith L. Dalisay-Valenzuela (Dalisay-Valenzuela), wrote a letter addressed
to SSS President and Chief Executive Officer Carlos A. Arellano, requesting the reevaluation and reconsideration of their problem.

On January 18, 2000, DDII issued a Letter to SSS proposing the "offset of SSS obligations with back rentals on occupied land and building
of the obligor." It alleged that SSS is bound to pay back rentals totaling P34,217,988.19 for its use of the subject property from July 1982
up to the present. It likewise demanded for the return of the said property.

Meanwhile, despite repeated written and oral demands made by SSS for DDII to deliver the titles of the subject property, free from all
liens and encumbrances, DDII still failed to comply.
On October 8, 2002, DDII filed a complaint for Quieting of Title, Recovery of Possession and Damages against SSS with the Regional
Trial Court (RTC), Branch 14, in Davao City, docketed as Civil Case No. 29, 353-02.

In said complaint, DDII asserted that it is the owner of the subject property. It averred that when SSS filed the abovementioned cases,
the late Desiderio Dalisay, during his lifetime and as president of the company, offered the property appraised at P3,500,000 to SSS for
the offsetting of said amount against DGC's total liability to SSS. SSS accepted such but only in the amount of P2,000,000 and subject
to certain conditions. It also insists that while negotiations with SSS were still ongoing, it decided to vacate the subject property in favor
of SSS to show goodwill on its part. Unfortunately, the negotiations were not fruitful as they failed to agree on the terms and conditions
set forth by SSS. Furthermore, DDII insists that Atty. Cabarroguis' alleged acceptance of the proposals of SSS was not covered by any
Board Resolution or Affidavit of Consent by the corporate and individual owners of the properties. Thus, according to DDII, there was no
meeting of the minds between the parties. Consequently, there was no dation in payment to speak of, contrary to the claim of SSS. With
these, DDII asserted that SSS owes it P43,208,270.99 as back rentals for its use of the property from 1982 onwards. It also prayed for
attorney's fees and costs of litigation.

In its Answer, SSS argued that the offer for dacion was categorically accepted by SSS, thereby perfecting such.

ISSUES:

The pivotal issue in the instant case is whether or not there was a perfected dacion en pago; and if answered in the affirmative, whether
or not SSS validly acquired title or interest over the subject properties. This is so since if there was a perfected dacion and if title or interest
over the property was transferred to SSS, then an action for quieting of title filed by DDII would not prosper since SSS has a legitimate
interest and claim over the properties subject of the case.

RULING:

YES! For an action to quiet title to prosper, two indispensable requisites must concur, namely: (1) the plaintiff or complainant has a legal
or an equitable title to or interest in the real property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed
to be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal
efficacy.

If, in this case, dacion en pago was indeed perfected, SSS has a legitimate title and interest over the properties in question. As a result,
SSS' claim which allegedly casts a cloud on DDII's title is valid and operative, and consequently, the action for quieting of title filed by
DDII will not prosper.

Dacion en pago. Among other modes, an obligation is extinguished by payment or performance. There is payment when there is delivery
of money or performance of an obligation. Corollary thereto, Article 1245 of the Civil Code provides for a special mode of payment called
dacion in payment (dacion en pago).

In dacion en pago, property is alienated to the creditor in satisfaction of a debt in money. The debtor delivers and transmits to the creditor
the former's ownership over a thing as an accepted equivalent of the payment or performance of an outstanding debt. In such cases,
Article 1245 provides that the law on sales shall apply, since the undertaking really partakes—in one sense—of the nature of sale; that
is, the creditor is really buying the thing or property of the debtor, the payment for which is to be charged against the debtor's obligation.

As a mode of payment, dacion en pago extinguishes the obligation to the extent of the value of the thing delivered, either as agreed upon
by the parties or as may be proved, unless the parties by agreement—express or implied, or by their silence—consider the thing as
equivalent to the obligation, in which case the obligation is totally extinguished. It requires delivery and transmission of ownership of a
thing owned by the debtor to the creditor as an accepted equivalent of the performance of the obligation. There is no dacion in payment
when there is no transfer of ownership in the creditor's favor, as when the possession of the thing is merely given to the creditor by way
of security.

In the case at hand, in order to determine whether or not there was indeed a perfected, or even consummated, dacion in payment, it is
necessary to review and assess the evidence and events that transpired and see whether these correspond to the three stages of a
contract of sale. This is so since, as previously mentioned, dacion en pago agreements are governed, among others, by the law on sales.

Stages of a contract of sale

Briefly, the stages of a contract of sale are: (1) negotiation, covering the period from the time the prospective contracting parties indicate
interest in the contract to the time the contract is perfected; (2) perfection, which takes place upon the concurrence of the essential
elements of the sale, which is the meeting of the minds of the parties as to the object of the contract and upon the price; and (3)
consummation, which begins when the parties perform their respective undertakings under the contract of sale, culminating in the
extinguishment thereof. Each shall hereinafter be discussed in seriatim.

First Stage: Negotiation Offer validly reduced

To recall, the negotiation stage covers the period from the time the prospective contracting parties indicate interest in the contract to the
time the contract is perfected. This then includes the making of an offer by one party to another and ends when both parties agree on the
object and the price.
In the instant case, the late Desiderio Dalisay, on March 11, 1977, offered to SSS that they partially settle their obligations to the latter
via dacion. Dalisay offered several properties for P3,500,000 in favor of SSS to partially extinguish petitioner's obligation which amounted
to P4,421,321.62.

Then, years later or on May 27, 1982, the SSS' Committee met with the corporation, represented by Atty. Cabarroguis. During said
meeting, Atty. Cabarroguis explained that he has "the authority to offer [the properties] in the amount of 2 million pesos." He also gave
them an assurance that that they will turn the properties over to SSS free of liens and encumbrances, and that his clients are ready to
vacate the premises and you can have it occupied anytime.

In this respect, petitioner argues that Atty. Cabarroguis did not have the requisite authority to make said representations and thereby bind
the corporation. DDII thus maintains that the offer to SSS remained at P3,500,000. We beg to disagree.

While petitioner is correct that there is no evidence of Atty. Cabarroguis' authority to represent the company in said meeting, this however
is outweighed by the fact that no one questioned Atty. Cabarroguis' representations and authority after the conclusion of the negotiations;
and that a few days after the said meeting, the company immediately arranged for the property's turnover through Dalisay-Tirol, Acting
President and General Manager, and eventually delivered possession thereof to SSS.

What makes matters worse for petitioner is that it was well aware of what transpired during the meeting and the agreements reached. In
fact, the SSC issued Resolution No. 849 - s. 82 where it accepted DDII's proposed dacion en pago at P2,000,000.

We emphasize that it is only now, in this action for quieting of title filed decades after the conclusion of the 1982 Meeting, that DDII
questioned Atty. Cabarroguis' authority to represent the corporation. Because of this, the Supreme Court was sufficiently convinced that,
contrary to petitioner's claim, Atty. Cabarroguis acted within the scope of the authority given him, which includes offering the properties
at P2,000,000. There was tacit ratification of the agency.

Accordingly, the Court rule that DDII's offer was validly reduced from P3,500,000 to P2,000,000.

Second Stage: Perfection Acceptance absolute and unqualified

According to the CA, SSC Resolution No. 849 — s. 82 constitutes an absolute and unequivocal acceptance which perfected the offered
dacion. Thus, when possession of the subject property was delivered to SSS, this signified a transfer of ownership thereon, consistent
with the supposedly perfected agreement. The Court agreed with the CA that there was perfected dation in payment.

Within the purview of the law on sales, a contract of sale is perfected by mere consent, upon a meeting of the minds on the offer and the
acceptance thereof based on subject matter, price and terms of payment. It is perfected at the moment there is a meeting of the minds
upon the thing which is the object of the contract and upon the price.

It is clearly shown by the records that the SSS simply agreed to said proposal when it included such in its Resolution. It is not a new
condition imposed by the SSS as petitioner argues.

Third Stage: Consummation Transfer of possession to SSS tantamount to "delivery"

Agreeing with SSS, the CA held that the agreement on dacion en pago was consummated by DDII's delivery of the property to SSS. This
is correct.

The third stage of a contract of sale is consummation which begins when the parties perform their respective undertakings under the
contract of sale, culminating in the extinguishment thereof.

While a contract of sale is perfected by mere consent, ownership of the thing sold is acquired only upon its delivery to the buyer. Upon
the perfection of the sale, the seller assumes the obligation to transfer ownership and to deliver the thing sold, but the real right of
ownership is transferred only "by tradition" or delivery thereof to the buyer.

Material to the case at bar is tradition by real or actual delivery contemplated Article 1497 of the same Code.

Here, petitioner DDII insists that its delivery of the property to SSS was only to show its goodwill in the negotiations. The records, however,
reveal otherwise. It is well to emphasize that nowhere in their communications or during the discussions at the meeting is it stated that
the company will turn over possession of the property to SSS to show its goodwill while the negotiations were pending.

Thus, contrary to petitioner's arguments, We are of the view that the turnover was in fact tantamount to tradition and was not done simply
to show goodwill on the part of the company. What was only left to be done was for the corporation to surrender the certificates of title
over the properties, free from all liens and encumbrances as promised during the 1982 meeting, so as to facilitate its transfer in SSS'
name.

This being the case, We find that SSS has validly and in good faith acquired title to the property subject of the dispute, making the action
to quiet title filed by DDII improper.

Additionally, it is well to emphasize that in order that an action for quieting of title may prosper, it is essential that the plaintiff must have
legal or equitable title to, or interest in, the property which is the subject-matter of the action. Legal title denotes registered ownership,
while equitable title means beneficial ownership. In the absence of such legal or equitable title, or interest, there is no cloud to be prevented
or removed.

Here, DDII having divested itself of any claim over the property in favor of SSS by means of sale via dacion en pago, petitioner has lost
its title over the property which would give it legal personality to file said action.

HEIRS OF YUSINGCO VS. BUSILAK

FACTS:

On August 11, 2005, herein petitioners filed five separate (5) Complaints[5] for accion publiciana and/or recovery of possession against
herein respondents and a certain Reynaldo Peralta

The suits, which were subsequently consolidated, were filed with the MTCC of Surigao City

Petitioners uniformly alleged in the said Complaints that: they are owners of three (3) parcels of land... all located at Barangay Taft,
Surigao City; they inherited the lots from their predecessor-in-interest, Alfonso Yusingco... they were in possession of the said properties
prior to and at the start of the Second World War, but lost possession thereof during the war; after the war, petitioners discovered that
the subject properties were occupied by several persons, which prompted petitioners to file separate cases for accion reivindicatoria and
recovery of possession against these persons... herein respondents entered different portions of the same properties and occupied them
without the knowledge and consent of petitioners; petitioners were forced to tolerate the illegal occupation of respondents as they did not
have sufficient resources to protect their property at that time and also because their ownership was still being disputed in the earlier
cases filed... the cases which they earlier filed were decided in their favor and they were declared the owners of the subject properties;
thereafter, petitioners demanded that respondents vacate the said properties, but the latter refused.

In their Answer, respondents raised essentially similar defenses, contending, in essence, that: they have been in possession of the subject
properties for more than thirty (30) years; petitioners never actually possessed the said parcels of land and that they never had title over
the same; thus, petitioners' claim would be in conflict with and inferior to respondents' claim of possession.

Herein respondents filed an appeal with the RTC of Surigao City.

On August 17, 2011, the RTC, Branch 30, Surigao City, rendered a Joint Decision, which affirmed, with modification, the Omnibus
Judgment of the MTCC.

Herein respondents then filed with the CA a petition for review under Rule 42 of the Rules of Court assailing the abovementioned Joint
Decision of the RTC.On July 31, 2013, the CA promulgated its Decision granting the petition of herein respondents.

Aggrieved by the CA Decision, herein petitioners are now before this Court via the instant petition for review on certiorari contending that
the assailed CA Decision is replete with legal infirmities

ISSUES:

When Honorable Court of Appeals held that the prior judgments declaring herein petitioners as the true and lawful co-owners of the
property did not bind herein respondents, as they were not parties to the actions, saying that these were an accion reivindicatoria and an
action for recovery of possession, hence in personam, and as such, they bound only the parties properly impleaded and duly heard or
given an opportunity to be heard; even if such principle is inapplicable in the instant case.

RULING:

The issues raised in the instant petition boil down to the basic question of whether or not the final and executory decisions rendered in a
previous accion reivindicatoria, finding petitioners to be the lawful owners of the subject properties, are binding upon respondents.

YES! A perusal of the complaints filed by petitioners shows that the actions were captioned as "Accion Publiciana and/or Recovery of
Possession." However, the Court agrees with the ruling of the lower courts that the complaints filed were actually accion reivindicatoria.

Accion reivindicatoria or accion de reivindicacion is, thus, an action whereby the plaintiff alleges ownership over a parcel of land and
seeks recovery of its full possession.[11] It is a suit to recover possession of a parcel of land as an element of ownership.[12] The judgment
in such a case determines the ownership of the property and awards the possession of the property to the lawful owner.[13] It is different
from accion interdictal or accion publiciana where plaintiff merely alleges proof of a better right to possess without claim of title.[14]

On the basis of the above discussions, it is clear that the lower courts did not err in ruling that the suits filed by petitioners are accion
reivindicatoria, not accion publiciana, as petitioners seek to recover possession of the subject lots on the basis of their ownership thereof.

Proceeding to the main issue in the instant petition, there is no dispute that the RTC Decision in Civil Case No. 1645 and the CA Decision
in CA-G.R. CV No. 66508-R used by the MTCC in the present case as bases in holding that herein petitioners are owners of the subject
properties and are, thus, entitled to legal possession thereof, are judgments on a previous case for accion reivindicatoria, which was filed
by petitioners against persons other than herein respondents.
It is settled that a judgment directing a party to deliver possession of a property to another is in personam.[15] It is conclusive, not against
the whole world, but only "between the parties and their successors in interest by title subsequent to the commencement of the action."

However, this rule admits of the exception that even a non-party may be bound by the judgment in an ejectment suit[19] where he is any
of the following: (a) trespasser, squatter or agent of the defendant fraudulently occupying the property to frustrate the judgment; (b) guest
or occupant of the premises with the permission of the defendant; (c) transferee pendente lite; (d) sublessee; (e) co-lessee; or (f) member
of the family, relative or privy of the defendant.

In the instant case, the Court finds no cogent reason to depart from the findings and conclusions of the MTCC, as affirmed by the RTC,
that respondents are mere intruders or trespassers who do not have a right to possess the subject lots.

On the other hand, the evidence for the defendants showed that they are mere intruders on the lots in question. They are occupying their
respective portions simply as places to stay with intention of acquiring the said properties in the event that they are public lands and not
owned by any private person.

It is noted that while the defendants had declared their houses and improvements for tax purposes, not one of them had declared in his
name the lot in which his house or improvement is built on. They just waited for the Yusingcos to show proof of their ownership of the lot.

It was indeed revealing that while professing that the lots are public land, the defendants never bothered to apply under any of the legal
modes of acquiring land of the public domain for the portion occupied by them.

the CA erred in ruling that the judgments of the RTC (in Civil Case No. 1645) and the CA (in CA-GR. CV No. 66508-R) on the suit for
accion reivindicatoria filed by petitioners against persons other than herein respondents are not binding upon the latter.

Respondents, being trespassers on the subject lots are bound by the said judgments, which find petitioners to be entitled to the possession
of the subject lots as owners thereof.

YU HWA PING VS. AYALA LAND

FACTS:

On March 17, 1921, petitioners Spouses Andres Diaz and Josefa Mia (Spouses Diaz) submitted to the General Land Registration Office
for approval of the Director of Lands a survey plan designated as Psu-25909, which covered a parcel of land located at Sitio of Kay
Monica, Barrio Pugad Lawin, Las Piñas, Rizal, with an aggregate area of 460,626 square meters covered by Lot 1. On May 26, 1921, the
Director of Lands approved survey plan Psu-25909.

On October 21, 1925, another survey plan was done covering Lot 3 of the same parcel of land designated as Psu-47035 for a certain
Dominador Mayuga. The said survey, however, stated that the lot was situated at Sitio May Kokek, Barrio Almanza, Las Piñas, Rizal.
Then, on July 28, 1930, another survey was undertaken designated as Psu-80886 for a certain Eduardo C. Guico (Guico). Again, the
survey indicated a different address that the lots were situated in Barrio Tindig na Mangga, Las Piñas, Rizal. Finally, on March 6, 1931,
an additional survey plan was executed over the similar parcel of land designated as Psu-80886/SWO-20609 for a certain Alberto
Yaptinchay (Yaptinchay). Psu-80886 and Psu-80886/SWO-20609 covered Lot 2, with 158,494 square meters, and Lot 3, with 171,309
square meters, of the same land.

On May 9, 1950, Original Certificate of Title (OCT) No. 242 was issued in favor of Yaptinchay covering Lots 2 and 3 pursuant to Psu-
80886/SWO-20609. On May 11, 1950, OCT No. 244 was also issued to Yaptinchay. On May 21, 1958, OCT No. 1609 covering Lot 3
pursuant to Psu-47035 was issued in favor of Dominador Mayuga. On May 18, 1967, some of properties were sold to CPJ Corporation
resulting in the issuance of Transfer Certificate Title (TCT) No. 190713 in its name.

On February 16, 1968, petitioner Andres Diaz filed a petition for original registration before the Court of First Instance (CFI) of Pasay for
Lot No. 1 of Psu-25909. On October 19, 1969, judgment was rendered by the CFI of Pasay for the original registration of Psu-25909 in
favor of Andres Diaz. On May 19, 1970, OCT No. 8510 was issued in the name of Spouses Diaz. On May 21, 1970, the Spouses
Diazsubdivided their 460,626 square meter property covered by OCT No. 8510 into ten (10) lots, described as Lots No. 1-A to 1-J and
conveyed to different third parties.

On May 17, 1971, CPJ Corporation, then owner of the land covered by TCT No. 190713, which originated from OCT No. 242, filed Land
Registration Case No. N-24-M before the Regional Trial Court (RTC) of Pasig City, Branch 166, against Spouses Diaz and other named
respondents (Diaz Case). It sought to review OCT No. 8510 in the names of Spouses Diaz on the ground that the interested persons
were not notified of the application.

On August 30, 1976 and December 4, 1976, Andres Diaz sold to Librado Cabautan (Cabautan) the following parcels of land, which
originated from OCT No. 8510 under Psu-25909, to wit:

Lot 1-I, with an area of 190,000 square meters covered by the new TCT No. 287416;
Lot 1-B, with an area of 135,000 square meters covered by the new TCT No. 287411;
Lot 1-A with an area of 125,626 square meters covered by the new TCT No. 287412; and
Lot 1-D, with an area of 10,000 square meters also covered by the new TCT No. 287412.4
On March 12, 1993, petitioner Spouses Yu Hwa Ping and Mary Gaw (Spouses Yu) acquired ownership over 67,813 square me ters
representing the undivided half-portion of Lot 1-A originating from OCT No. 8510 of Spouses Diaz. The said property was co-owned by
Spouses Diaz with Spouses Librado and Susana Cabautan resulting from a civil case decided by the RTC of Makati on March 29, 1986.

On January 27, 1994, Spouses Yu acquired ownership over Lot 1-B originating from OCT No. 8510 of Spouses Diaz with an area of
135,000 square meters. Pursuant to the transfers of land to Spouses Yu, TCT Nos. 39408 and 64549 were issued in their names.

On the other hand, on May 4, 1980, CPJ Corporation transferred their interest in the subject properties to third persons. Later, in 1988,
Ayala Corporation obtained the subject properties from Goldenrod, Inc. and PESALA. In 1992, pursuant to the merger of respondent
Ayala Land, Inc. (ALI) and Las Piñas Ventures, Inc., ALI acquired all the subject properties, as follows:

Lot 3 which originated from OCT No. 1609 under Psu- 47035 and covered by a new TCT No. 41325;
Lot 2 which originated from OCT No. 242 under Psu- 80886/SWO-20609 and covered by a new TCT No. 41263;
Lot 3 which originated from OCT No. 242 under Psu- 80886/SWO-20609 and covered by a new TCT No. 41262; and
Lot 6 which originated from OCT No. 242 under Psu- 80886/SWO-20609 and covered by a new TCT No. 41261.5
First RTC Ruling

Returning to the Diaz case, on December 13, 1995, the RTC of Pasig City rendered a Decision6 against Spouses Diaz. It held that OCT
No. 8510 and all the transfer certificates issued thereunder must be cancelled. The RTC of Pasig City opined that Spouses Diaz committed
fraud when they filed their application for original registration of land without informing the interested parties therein in violation of Sections
31 and 32 of Act No. 496. It also held that Spouses Diaz knew that CPJ Corporation had an appropriate interest over the subject properties.

Aggrieved, Spouses Diaz elevated an appeal before the CA docketed asCA-G.R.CV No. 61593.

Meanwhile, sometime in August 1995, Spouses Yu visited their lots. To their surprise, they discovered that ALI had already clandestinely
fenced the area and posted guards thereat and they were prevented from entering and occupying the same.7 They also discovered that
the transfer of certificates of titles covering parcels of land overlapping their claim were in the name of ALI under TCT Nos. 41325, 41263,
41262, and 41261.

On December 4, 1996, Spouses Yu filed a complaint before the RTC of Las Piñas City, Branch 255, against ALI for declaration of nullity
of the TCTs issued in the name of the latter (Yu case). They also sought the recovery of possession of the property covered by ALI's title
which overlapped their land alleging that Spouses Diaz, their predecessors had open, uninterrupted and adverse possession of the same
from 1921 until it was transferred to Cabautan in 1976. Spouses Yu averred that Cabautan possessed the said land until it was sold to
them in 1994.8 They likewise sought the judicial confirmation of the validity of their titles.

Spouses Yu principally alleged that the titles of ALI originated from OCT Nos. 242, 244, and 1609, which were covered by Psu-80886
and Psu-47035. The said surveys were merely copied from Psu-25909, which was prepared at an earlier date, and the Director of Lands
had no authority to approve one or more surveys by different claimants over the same parcel of land.9 They asserted that OCT No. 8510
and its transfer certificates, which covered the Psu-25909, must be declared valid against the titles of ALI.

The RTC of Las Piñas ordered the conduct of a verification survey to help in the just and proper disposition of the case. Engr. Veronica
Ardina-Remolar from the Bureau of Lands, the court-appointed commissioner, supervised the verification survey, and the parties sent
their respective surveyors. After the verification survey was completed and the parties presented all their pieces of evidence, the case
was submitted for resolution.

Second RTC Ruling

In its May 7, 2001 Decision,10 the RTC of Las Piñas ruled in favor of Spouses Yu. It held that based on the verification survey and the
testimonies of the parties' witnesses, OCT Nos. 242, 244, and 1609 overlapped OCT No. 8510. The RTC of Las Piñas also pointed out,
and extensively discussed, that Psu-80886 and Psu-47035, which were the bases of OCT Nos. 242, 244, and 1609, were marred with
numerous and blatant errors. It opined that ALI did not offer any satisfactory explanation regarding the glaring discrepancies of Psu-80886
and Psu-47035. On the other hand, it observed that Psu-25909, the basis of OCT No. 8510, had no irregularity in its preparation. Thus,
the RTC of Las Piñas concluded that the titles of ALI were void ab initio because their original titles were secured through fraudulent
surveys. The fallo reads:

WHEREFORE, judgment is rendered in favor of the plaintiffs in that the three transfer certificates issued in the name of Ayala Land, Inc.
by the Register of Deeds in the City of Las Piñas, namely, Transfer Certificate of Title Nos. 41325, 41263 and 41262 all covering Lots
Nos. 1, 2 and 6 of survey plans PSU-47035, PSU-80886, Psu-80886/SWO-20609, the original survey under PSU-47035 and decree of
registration no. N-63394, and Original Certificate of Title No. 1609 issue in favor of Dominador Mayuga, including all other titles, survey
and decrees pertaining thereto and from or upon which the aforesaid titles emanate, are hereby declared spurious and void ab initio. In
the same vein, the Court upholds the validity of Transfer Certificates of Title Nos. TCT Nos. T-64549 covering Lot 1-A in the name of
Mary Gaw, spouse of Yu Hwa Ping, and T-39408 covering Lot 1-B in the name of Yu Hwa Ping (both originating from Original Certificate
of Title No. 8510) pursuant to plan PSU-25909 undertaken on March 17, 1921. The defendant is also ordered to pay the plaintiffs
temperate damages in the amount of One Million Pesos (PHP1,000,000.00) exemplary damages in the amount of Five Hundred
Thousand Pesos (PHP500,000.00), and to pay the costs.

SO ORDERED.11
Unconvinced, ALI appealed to the CA, where the case was docketed as CA-G.R. CV No. 70622. Eventually, said appeal was consolidated
with the earlier appeal of Spouses Diaz in CA-G.R. CV No. 61593.

The CA Rulings

In its decision, dated June 19, 2003, the CA ruled in favor of ALI. It held that in the Diaz case, the RTC of Pasig properly cancelled OCT
No. 8510 because Spouses Diaz committed fraud. It opined that Spouses Diaz knew of CPJ Corporation's interest over the subject land
but failed to inform it of their application.

With respect to the Yu case, the CA ruled that Spouses Yu could no longer assert that the titles of ALI were invalid because the one-year
period to contest the title had prescribed. Hence, ALI's titles were incontestable. The CA underscored that the errors cited by the RTC of
Las Piñas in Psu-80886 and Psu-47035, upon which the titles of ALI were based, were innocuous or already explained. It also stressed
that OCT Nos. 242, 244, and 1609, from which the titles of ALI originated, were issued in 1950 and 1958; while the OCT No. 8510, from
which the titles of Spouses Yu originated, was only issued in 1970. As the original titles of ALI predated that of Spouses Yu, the CA
concluded that the former titles were superior.

Undaunted, Spouses Yu and Spouses Diaz filed their motions for reconsideration.

In its decision, dated February 8, 2005, the CA granted Spouses Yu and Spouses Diaz' motions for reconsideration. It opined that the
numerous errors in Psu-80886 and Psu-47035 were serious and these affected the validity of the original titles upon which the surveys
were based. In contrast, the CA noted that Psu-25909, upon which the original titles of Spouses Yu and Spouses Diaz were based, bore
all the hallmarks of verity.

The CA also emphasized that in Guico v. San Pedro,12 the Court alreadyrecognized the defects surrounding Psu-80886. In that case,
the Court noted that the applicant-predecessor of Psu-80886 was not able to submit the corresponding measurements of the land and
he failed to prove that he had occupied and cultivated the land continuously since the filing of their application. The CA likewise cited (1)
the certification from the Department of Environment and Natural Resources-Land Management Bureau (DENR-LMB) that Psu-80886
was included in the list of restricted plans because of the doubtful signature of the surveyor, and (2) the memorandum, dated August 3,
2000, from the Assistant Regional Director for Operations of the DENR directing all personnel of the Land Survey Division not to issue
copies or technical descriptions of Psu-80886 and Psu-47035.

The CA further wrote that the slavish adherence to the issue of prescription and laches by ALI should not be countenanced. It declared
that the doctrine that registration done fraudulently is no registration at all prevails over the rules on equity. With respect to the Diaz case,
the CA held that Spouses Diaz had no obligation to inform CPJ Corporation and its successors about their registration because the
original titles of the latter, from which their transferred titles were derived, were based on fraudulent surveys.

Undeterred, ALI filed a second motion for reconsideration.

In its assailed June 19, 2006 decision, the CA granted the second motion for reconsideration in favor of ALI. It reversed and set aside its
February 8, 2005 decision and reinstated its February 28, 2003 decision. The CA held that Guico v. San Pedro did not categorically
declare that Psu-80886 was invalid and it even awarded some of the lots to the applicant; and that the certification of DENR-LMB and
the memorandum of the Assistant Director of the DENR could not be considered by the courts because these were not properly presented
in evidence.

The CA reiterated its ruling that Spouses Yu could no longer question the validity of the registrations of OCT Nos. 242, 244, and 1609
because the one-year reglementary period from the time of registration had already expired and these titles were entitled to the
presumption of regularity. Thus, once a decree of registration was made under the Torrens system, and the reglementary period had
lapsed, the title was perfected and could not be collaterally attacked. The CA also stressed that the noted discrepancies in Psu-80886
and Psu-47035 were immaterial to assail the validity of OCT Nos. 242, 244 and 1609, which were registered earlier than OCT No. 8510.

Hence, these petitions, anchored on the following

ISSUES

WHETHER THE COMPLAINT OF SPOUSES YU IS BARRED BY PRESCRIPTION

II

WHETHER THE VALIDITY OF THE SURVEYS OF OCT NOS. 242, 244 AND 1609 AS AGAINST OCT NO. 8510 CAN BE ASSAILED
IN THE PRESENT CASE

III

WHETHER THE CASE OF GUICO V. SAN PEDRO IS APPLICABLE IN THE PRESENT CASE

IV
WHETHER THE ALLEGED ERRORS IN PSU-80886 AND PSU-47035 ARE OF SUCH DEGREE SO AS TO INVALIDATE OCT NOS.
242, 244 AND 1609 AND ITS TRANSFER CERTIFICATES OF TITLES

In their Memorandum,13 the petitioners chiefly argue that the complaint filed by Spouses Yu is not barred by the one-year prescriptive
period under Act No. 496 because an action to annul the fraudulent registration of land is imprescriptible; that there are several and
conspicuous irregularities in Psu-80886 and Psu-47035 which cast doubt on the validity of OCT Nos. 242, 244, and 1609; that Guico v.
San Pedro did not categorically award Lots No. 2 and 3 covered by Psu-80886 to the applicant therein because he was still required to
submit an amended plan duly approved by the Director of Lands; that the applicant in Guico v. San Pedro never submitted any amended
plan, hence, no lot was awarded under Psu-80886 and its irregularity was affirmed by the Supreme Court; that the registration of OCT
Nos. 242, 244, and 1609 on a date earlier than OCT No. 8510 did not render them as the superior titles; that in case of two conflicting
titles, the court must look into the source of the titles; that the sources of the titles, Psu-80886 and Psu-47035, had numerous errors that
could not be satisfactorily explained by ALI; and that Psu-25909 had the hallmark of regularity and it was approved by the Director of
Lands at an earlier date.

In its Memorandum,14 ALI essentially countered that in the June 19, 2006 decision, the CA properly disregarded the certification of
DENR-LMB and the memorandum of the Assistant Director of the DENR because these were not presented in evidence; that Guico v.
San Pedro recognized the registrability of Lots No. 2 and 3 under Psu-80886; that the RTC of Las Piñas did not have jurisdiction to look
beyond the details of the decrees of registration; that the registration of a land under the Torrens system carries with it a presumption of
regularity; that in case of conflict between two certificates of title, the senior and superior title must be given full effect and validity; and
that the alleged errors in the Psu-80886 and Psu-47035 were sufficiently explained.

The Court's Ruling

The Court finds the petitions meritorious.

The present case essentially involves the issue: between the registered titles of the petitioners and ALI, which is more superior? Before
the said issue can be discussed thoroughly, the Court must first settle whether the actions instituted by the petitioners were filed within
the reglementary periods.

The actions were filed within their respective prescriptive periods

The Diaz case was a petition for review before the RTC of Pasig. It assailed OCT No. 8510 in the names of Spouses Diaz on the ground
that the said title was issued through fraud because the interested persons were not informed of their application for registration. Under
Section 38 of Act No. 496, "any person deprived of land or of any estate or interest therein by decree of registration obtained by fraud
[may] file in the competent Court of First Instance a petition for review within one year after entry of the decree provided no innocent
purchaser for value has acquired an interest."15

Here, OCT No. 8510 was issued in the name of Spouses Diaz on May 21, 1970. On the other hand, the petition for review of CPJ
Corporation was filed on May 17, 1971. Thus, the said petition was timely filed and the RTC of Pasig could tackle the issues raised
therein. When the RTC of Pasig ruled in favor of CPJ Corporation, Spouses Diaz appealed to the CA. In the same manner, when they
received an unfavorable judgment from the CA, Spouses Diaz filed a petition for review on certiorari before the Court. Accordingly, the
appeal of Spouses Diaz is proper and it can be adjudicated on the merits.

On the other hand, the Yu case began when they filed a complaint before the RTC of Las Piñas against ALI for declaration of nullity of
the TCTs issued in the name of the latter because of the spurious, manipulated and void surveys of OCT Nos. 242, 244 and 1609. They
also sought the recovery of possession of the property covered by ALI's title that overlapped their land alleging that their predecessors,
Spouses Diaz, had open, uninterrupted and adverse possession of the same from 1921 until it was transferred to Cabautan in 1976.
Spouses Yu also alleged that Cabautan possessed the said land until it was sold to them in 1994.16 It was only in August 1995 that they
discovered that ALI clandestinely fenced their property and prevented them from occupying the same. They also sought the judicial
confirmation of the validity of their titles.

ALI argues that the complaint of Yu is barred by prescription because it was filed beyond the one-year period under Section 38 of Act No.
496. On the other hand, Spouses Yu assert that their action was imprescriptible because they sought to set aside the titles that were
obtained through void surveys and they assert that the principle of indefeasibility of a Torrens title does not apply where fraud attended
the issuance of the title.

The Court finds that the complaint of Spouses Yu is not barred by prescription. While Section 38 of Act No. 496 states that the petition
for review to question a decree of registration must be filed within one (1) year after entry of the decree, such provision is not the only
remedy of an aggrieved party who was deprived of land by fraudulent means. The remedy of the landowner whose property has been
wrongfully or erroneously registered in another's name is, after one year from the date of the decree, not to set aside the decree, as was
done in this case, but, respecting the decree as incontrovertible and no longer open to review, to bring an ordinary action in the ordinary
court of justice for reconveyance or, if the property has passed into the hands of an innocent purchaser for value, for damages.17

Uy v. Court of Appeals18 remarkably explained the prescriptive periods of an action for reconveyance depending on the ground relied
upon, to wit:

The law creates the obligation of the trustee to reconvey the property and its title in favor of the true owner. Correlating Section 53,
paragraph 3 of PD No. 1529 and Article 1456 of the Civil Code with Article 1144 (2) of the Civil Code, the prescriptive period for the
reconveyance of fraudulently registered real property is ten (10) years reckoned from the date of the issuance of the certificate of title.
This ten-year prescriptive period begins to run from the date the adverse party repudiates the implied trust, which repudiation takes place
when the adverse party registers the land. An exception to this rule is when the party seeking reconveyance based on implied or
constructive trust is in actual, continuous and peaceful possession of the property involved. Prescription does not commence to run
against him because the action would be in the nature of a suit for quieting of title, an action that is imprescriptible.

The foregoing cases on the prescriptibility of actions for reconveyance apply when the action is based on fraud, or when the contract
used as basis for the action is voidable. Under Article 1390 of the Civil Code, a contract is voidable when the consent of one of the
contracting parties is vitiated by mistake, violence, intimidation, undue influence or fraud. When the consent is totally absent and not
merely vitiated, the contract is void. An action for reconveyance may also be based on a void contract. When the action for reconveyance
is based on a void contract, as when there was no consent on the part of the alleged vendor, the action is imprescriptible. The property
may be reconveyed to the true owner, notwithstanding the TCTs already issued in another's name. The issuance of a certificate of title in
the latter's favor could not vest upon him or her ownership of the property; neither could it validate the purchase thereof which is null and
void. Registration does not vest title; it is merely the evidence of such title. Our land registration laws do not give the holder any better
title than what he actually has. Being null and void, the sale produces no legal effects whatsoever.

Whether an action for reconveyance prescribes or not is therefore determined by the nature of the action, that is, whether it is founded
on a claim of the existence of an implied or constructive trust, or one based on the existence of a void or inexistent contract. x x x x19

As discussed-above, when the action for reconveyance is based on an implied or constructive trust, the prescriptive period is ten (10)
years, or it is imprescriptible if the movant is in the actual, continuous and peaceful possession of the property involved. On the other
hand, when the action for reconveyance is based on a void deed or contract the action is imprescriptible under Article 1410 of the New
Civil Code.20 As long as the land wrongfully registered under the Torrens system is still in the name of the person who caused such
registration, an action in personam will lie to compel him to reconvey the property to the real owner.21

In Hortizuela v. Tagufa,22 the complainant therein filed an action for reconveyance and recovery of possession with damages for a parcel
of land which was wrongfully granted a patent or decree issued in a registration proceedings in the name of a third person. The CA and
the Municipal Circuit Trial Court initially dismissed the complaint because it allegedly questioned the validity of the Torrens title in a
collateral proceeding and it had prescribed. When the case reached the Court, it ruled that the instituted complaint had not prescribed
because "in a complaint for reconveyance, the decree of registration is respected as incontrovertible and is not being questioned. What
is being sought is the transfer of the property wrongfully or erroneously registered in another's name to its rightful owner or to the one
with a better right. If the registration of the land is fraudulent, the person in whose name the land is registered holds it as a mere trustee,
and the real owner is entitled to file an action for reconveyance of the property."23 It was eventually ruled therein that the action for
reconveyance was proper and the possession was recovered.

In this case, Spouses Yu sought to reconvey to them once and for all the titles over the subject properties. To prove that they had a
superior right, they questioned the validity of the surveys which were the bases of OCT Nos. 242, 244 and 1609, the origin of ALI's TCTs.
Moreover, they also sought to recover the possession that was clandestinely taken away from them. Thus, as the subject matter of this
case is the ownership and possession of the subject properties, Spouses Yu's complaint is an action for reconveyance, which is not
prohibited by Section 38 of Act No. 496.

Moreover, a reading of Spouses Yu's complaint reveals that they are seeking to declare void ab initio the titles of ALI and their
predecessors-in-interest as these were based on spurious, manipulated and void surveys.24 If successful, the original titles of ALI's
predecessors-in-interest shall be declared void and, hence, they had no valid object to convey. It would result to a void contract or deed
because the subject properties did not belong to the said predecessors-in-interest. Accordingly, the Yu case involves an action for
reconveyance based on a void deed or contract which is imprescriptible under Article 1410 of the New Civil Code.

Further, the Court agrees with the observation of the CA in its February 8, 2005 Amended Decision, to wit:

9. In light of the circumstances, we feel that a slavish adherence to the doctrine being invoked by ALI with respect to alleged prescription
and laches, should not be countenanced. The said axioms do not possess talismanic powers, the mere invocation of which will
successfully defeat any and all attempts by those who claim to be the real owners of property, to set aright what had been done through
fraud and imposition. Consistent with the doctrine that registration done fraudulently is no registration at all, then this court must not allow
itself to be swayed by appeals to a strict interpretation of what are, after all, principles based on equity. To rule otherwise would be to
reward deception and duplicity and place a premium on procedural niceties at the expense of substantial justice.25

Neither can ALI be considered an innocent purchaser for value of the subject properties. As discussed by the RTC of Las Piñas, when
ALI purchased the subject lots from their predecessors-in-interest in 1988, the titles bore notices of the pending cases and adverse claims
sufficient to place it on guard. In the TCTs of ALI, the notices of lis pendens indicated therein were sufficient notice that the ownership of
the properties were being disputed. The trial court added that even the certified true copy of Psu-80886 had markings that it had been
used in some other cases as early as March 7, 1959.26 Accordingly, ALI is covered by the present action for reconveyance. As both the
Diaz and Yu cases were properly filed and are not barred by prescription, these can be adjudicated by the Court on the merits.

The Rule - that between two (2) conflicting titles, the title registered earlier prevails - is Not Absolute
The June 19, 2006 and February 28, 2003 decisions of the CA essentially ruled that ALI's titles were superior to those of the petitioners
because OCT Nos. 242, 244 and 1609 were registered earlier than OCT No. 8510. The CA emphasized that the general rule was that in
case of two certificates of title purporting to include the same land, the earlier date prevails. This general rule was first discussed in
Legarda v. Saleeby,27 as follows:

The question, who is the owner of land registered in the name of two different persons, has been presented to the courts in o ther
jurisdictions. In some jurisdictions, where the "torrens" system has been adopted, the difficulty has been settled by express statutory
provision. In others it has been settled by the courts. Hogg, in his excellent discussion of the "Australian Torrens System," at page 823,
says: "The general rule is that in the case of two certificates of title, purporting to include the same land, the earlier in date prevails,
whether the land comprised in the latter certificate be wholly, or only in part, comprised in the earlier certificate, xxx In successive
registrations, where more than one certificate is issued in respect of a particular estate or interest in land, the person claiming under the
prior certificate is entitled to the estate or interest; and that person is deemed to hold under the prior certificate who is the holder of, or
whose claim is derived directly or indirectly from the person who was the holder of the earliest certificate issued in respect thereof xxxx.28

The said general rule has been repeated by the Court in its subsequent decisions in Garcia v. Court of Appeals,29MWSS v. Court of
Appeals,30Spouses Carpo v. Ayala Land, Inc.,31 and recently in Jose Yulo Agricultural Corp. v. Spouses Davis32 Nevertheless, the rule
on superiority is not absolute. The same case of Legarda v. Saleeby explains the exception to the rule, viz:

Hogg adds however that, "if it can be clearly ascertained by the ordinary rules of construction relating to written documents, that
theinclusion of the land in the certificate of title of prior date is a mistake, the mistake may be rectified by holding the latter of the two
certificates of titleto be conclusive."33 [Emphasis supplied]

Accordingly, if the inclusion of the land in the earlier registered title was a result of a mistake, then the latter registered title will prevail.
The ratio decidendi of this exception is to prevent a title that was earlier registered, which erroneously contained a parcel of land that
should not have been included, from defeating a title that was later registered but is legitimately entitled to the said land. It reinforced the
doctrine that "[r]egistering a piece of land under the Torrens System does not create or vest title because registration is not a mode of
acquiring ownership. A certificate of title is merely an evidence of ownership or title over the particular property described therein."34

In his book, Land Registration and Related Proceedings,35 Atty. Amado D. Aquino further explained that the principle of according
superiority to a certificate of title earlier in date cannot, however, apply if it was procured through fraud or was otherwise jurisdictionally
flawed. Thus, if there is a compelling and genuine reason to set aside the rule on the superiority of earlier registered title, the Court may
look into the validity of the title bearing the latter date of registration, taking into consideration the evidence presented by the parties.

In Golloy v. Court of Appeals,36 there were two conflicting titles with overlapping boundaries. The first title was registered on March 1,
1918, while the second title was registered on August 15, 1919. Despite having been registered at a prior date, the Court did not allow
the earlier registered title of the respondents to prevail because of the continuing possession of the petitioners therein and the laches
committed by the respondents. Hence, the holder of an earlier registered title does not, in all instances, absolutely triumph over a holder
of a latter registered title.

In this case, the petitioners assail the numerous and serious defects in the surveys of OCT Nos. 242, 244 and 1609, which cast doubt on
the inclusion of the subject lands in ALI’s titles. Accordingly, the Court must delve into the merits of their contentions to determine whether
the subject properties are truly and genuinely included in ALI’s title. Merely relying on the date of registration of the original titles is
insufficient because it is the surveys therein that are being assailed. It is only through a judicious scrutiny of the evidence presented may
the Court determine whether to apply the general rule or the exception in the superiority of titles with an earlier registration date.

The survey of the registered land may be scrutinized by the courts when compelling reasons exist
In its June 19, 2006 decision, the CA emphasized that OCT Nos. 242, 244, and 1609 carry with it the presumption of regularity and that
the surveys therein were presumably undertaken by qualified surveyors before the issuance of the titles. In effect, the appellate court
declares that the surveys of these titles should no longer be inspected.

The Court does not agree.

Although 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,37 it is not a conclusive proof of ownership. It is a well-settled rule that ownership is different from a certificate of
title. The fact that a person was able to secure a title in his name does not operate to vest ownership upon him of the subject land.
Registration of a piece of land under the Torrens System does not create or vest title, because it is not a mode of acquiring ownership. A
certificate of title is merely an evidence of ownership or title over the particular property described therein. It cannot be used to protect a
usurper from the true owner; nor can it be used as a shield for the commission of fraud; neither does it permit one to enrich himself at the
expense of others. Its issuance in favor of a particular person does not foreclose the possibility that the real property may be co-owned
with persons not named in the certificate, or that it may be held in trust for another person by the registered owner.38

Hence, the Court may inquire into the validity of the ownership of a property by scrutinizing the movant's evidence of title and the basis
of such title. When there is compelling proof that there is doubt on the validity of the sources or basis of such title, then an examination is
proper. Thus, the surveys of the certificates of title are not immune from judicial scrutiny, in light of the genuine and legitimate reasons
for its analysis.

In Dizon v. Rodriguez39 and Republic v. Ayala y Cia,40 the Court confronted the validity of the surveys conducted on the lands to
determine whether the title was properly subdivided. It was ruled therein that subdivision plan Psd-27941 was erroneous because it was
"prepared not in accordance with the technical descriptions in TCT No. T-722 but in disregard of it, support the conclusion reached by
both the lower court and the Court of Appeals that Lots 49 and 1 are actually part of the territorial waters and belong to the State."41
Accordingly, the sole method for the Court to determine the validity of the title was to dissect the survey upon which it was sourced. As a
result, it was discovered that the registered titles therein contained areas which belong to the sea and foreshore lands.

Here, only a direct review of the surveys of OCT Nos. 242, 244, and 1609, as well as OCT No. 8510 can resolve the issue on the validity
of these titles. The findings of the RTC of Las Piñas and the CA differ with respect to the cited errors in the surveys. The Court is convinced
that through a rigorous study of the affected surveys, the valid owners of the subject properties are can be finally adjudicated.
Finally, after resolving the various preliminary issues, the Court can now tackle the crux of these petitions - the validity of Psu-25909,
Psu-47035, Psu-80886, and Psu-80886/SWO-20609. The resolution of this issue will decisively determine the true and rightful owner of
the subject properties.

Psu-47035, Psu-80886 and Psu-80886/SWO-20609 contain numerous and serious irregularities which cast doubt on the validity of OCT
Nos. 242, 244 and 1609
At the onset, the present case poses an issue on the validity of registered and overlapping titles based on their surveys. The Court must
commend the RTC of Las Piñas for taking the correct procedure in resolving such issue.

In Cambridge Realty and Resources Corp. v. Eridanus Development, Inc.,42 it was ruled that a case of overlapping of boundaries or
encroachment depends on a reliable, if not accurate, verification survey; barring one, no overlapping or encroachment may be proved
successfully, for obvious reasons. The first step in the resolution of such cases is for the court to direct the proper government agency
concerned to conduct a verification or relocation survey and submit a report to the court, or constitute a panel of commissioners for the
purpose. In that case, the Court lamented that the trial court therein did not order the conduct of a verification survey and the appointment
of geodetic engineers as commissioners, to wit:

This is precisely the reason why the trial court should have officially appointed a commissioner or panel of commissioners and not leave
the initiative to secure one to the parties: so that a thorough investigation, study and analysis of the parties' titles could be made in order
to provide, in a comprehensive report, the necessary information that will guide it in resolving the case completely, and not merely leave
the determination of the case to a consideration of the parties' more often than not self-serving evidence.43

Similarly, in Chua v. B.E. San Diego, Inc.,44 the Court ruled that in overlapping boundary disputes, the verification survey must be actually
conducted on the very land itself. In that case, the verification survey conducted it was merely based on the technical description of the
defective titles. The opinion of the surveyor lacked authoritativeness because his verification survey was not made on the land itself.

In this case, the RTC of Las Piñas issued an Order,45 dated December 5, 1997, which directed the parties to conduct a verification survey
pursuant to the prescribed rules. Engr. Veronica Ardina-Remolar (Remolar) from the Bureau of Lands of the DENR was the court-
appointed commissioner who supervised and coordinated the verification survey. Engrs. Rolando Nathaniel Pada (Pada) and Alexander
Ocampo (Ocampo) were the geodetic engineers for Spouses Yu; while Engr. Lucal Francisco (Francisco) was the geodetic engineer for
ALI. They conducted actual verification survey on April 5, 6, 7 and 16, 1998 and June 8, 1998. Afterwards, Engr. Remolar submitted her
Report,46 dated November 4, 1998, to the trial court which stated that there were overlapping areas in the contested surveys. Likewise,
Engrs. Pada and Francisco submitted their Verification Reports and Survey Plans,47 which were approved by the DENR. Then, the
parties presented their respective witnesses.

The RTC of Las Piñas had a technical and accurate understanding and appreciation of the overlapping surveys of Psu-25909, Psu-
47035, Psu-80886, and Psu-80886/SWO-20609. In its decision, dated May 7, 2001, it ruled in favor of Spouses Yu and it discussed
extensively its observations and findings regarding the overlapping areas, to wit:

From the evidence on record, it appears that the following plans were made on the dates and by the surveyor specified herein:

Survey No. PSU-25909 March 17, 1921 A.N. Feliciano

Survey No. PSU-47035 October 21, 1925 A.N. Feliciano
Survey No. PSU-80886 July 28, 1930 A.N. Feliciano
Survey No. SWO-20609 March 6, 1931 A.N. Feliciano

Plan PSU-25909 (Exhibit "F") invoked by the plaintiffs and authenticity of which is certified by appropriate government custodians including
Engineer Remolar, the court-designated commissioner, appears to have been prepared on March 17, 1921 for one Andres Diaz and
recites the following entries:

"THE ORIGINAL FIELD NOTES, COMPUTATIONS AND PLAN OF THIS SURVERY EXECUTED BY A.M. FELICIANO HAVE BEEN
CHECKED AND VERIFIED IN THIS OFFICE IN ACCORDANCE WITH SECTIONS 1858 TO 1865, ACT 2711 AND ARE HEREBY
APPROVED MAY 26, 1921."

-and-

"This is to certify that this is a true and correct plan of Psu-25909 as traced from the mounted paper of plan Psu-25909 which is on file at
T.R.S. Lands Management Sector, N.C.R.

"This true copy of the plan is requested by the Chief, Technical Records Section as contained in a letter dated February 15, 1989.

TEODORICO C. CALISTERIO
Chief, Topographic 7 Special Maps Section

Traced by: F. SUMAGUE

Checkd by: A.O. VENZON (Sgd.) 4/28/89

Thus, the Court holds that plan PSU-25909 (Exhibit”F) is a true copy of an official document on file with the Bureau of Lands and is,
therefore, entitled to great weight and appreciation, there being no irregularity demonstrated in the preparation thereof.
On the other hand, an examination of Plan PSU-47035 (Exhibit "G") invites suspicion thereto. As observed by Engineer Pada in his
verification survey report, the photocopy of plan PSU-47035 submitted by the defendant shows that the plan appears to have done for
one Estanislao Mayuga, while in the certified true copy of the pertinent decree (Exhibit "HH"/Exhibit 20), it appears that the same was
done for a certain Dominador Mayuga. Viewing this discrepancy in the light of the fact that the plan for PSU-47035 was undertaken on
October 21, 1925 or more than four years after the survey for plan PSU-25909 was done, the same discrepancy leads the Court to
conclude that PSU-47035 is spurious and void.

The third plan enumerated above, plan PSU-80886 (Exhibit "II/Exhibit 29), prepared on July 28, 1930 or more than five years since plan
PSU-25909 was done for Andres Diaz, alsoinvites suspicion. An examination of the same reveals that the lower right hand corner of the
plan, which bears the serial number PSU-80886, is manifestly different from the main document in terms of the intensity of its contrast,
and that the change in the intensity of the shading is abrupt as one examines the document starting from the lower right hand corner to
anywhere else in the same document. Also, it is worth observing that the main document, minus the lower right hand corner mentioned,
does not indicate anything to even suggest that it pertains to plan PSU-80886. For these reasons, the contention of the plaintiffs that this
lower right hand corner of the plan appears to be a spurious attachment to the main document to make the main document it look like it
is actually plan PSU-80886, has merit.

Another discrepancyinvites further suspicion under the circumstances. The main document bears what appears to be the actual signature
of the surveyor, Mr. A.N. Feliciano while the lower right hand corner of the plan mentions only the name "Serafin P. Hidalgo - Director of
Lands" with the prefix "Sgd." But without any actual signature. An interesting query arises: Why would the document bear an actual
signature of the surveyor without bearing the signature of the Director of Lands which in essence is the more important signature for
authentication purposes?

Still another discrepancy is with respect to a monument appearing in PSU-80886 (Exhibit "II"). At the upper off-right portion thereof are
entries referring to a monument more specifically described as B.L.L.M. No. 4. According to Engineer Pada, citing a certified document
taken from the Land Management Bureau of the Department of Environment and Natural Resources, this monument was established
only on November 27, 1937 (TSN, March 24, 2000, pp. 18-20) which is more than seven years after PSU-80886 was undertaken. How a
monument which was established only in November 1937 can actually exist in a plan made on July 28, 1930 is absolutely incredible.

In view of the foregoing, the Court finds good reason to consider PSU-80886 (Exhibit "II" and 29), relied upon by the defendant, spurious
and void as well.

The fourth and last plan mentioned is SWO-20609, done on March 6, 1931.

It is admitted by the geodetic engineer of the defendant that a specific work order (SWO) co-exists with a survey plan, and that in particular,
SWO-20609 was undertaken in view of alleged errors in plan PSU-80886 (TSN, February 16, 2001, pp. 31-32). Therefore, SWO-20609
must be evaluated in relation to plan PSU-80886. From this perspective, the Court also notes that SWO-20609 is attended with
discrepancies thus rendering it devoid of any credence.

For the record, in PSU-80886 (Exhibit "II"/Exhibits 29 and 30), the land concerned appears to have been surveyed for one Eduardo C.
Guico while in PSU-80886/SW0-20609 (Exhibit "H"/Exhibit 35), the same land appears to have been surveyed for one Alberto Yaptinchay.
In addition, it is evident in PSU-80886 (Exhibits 29 and 30) that vital entries regarding the total area of the property covered by the
document bear many erasures, particularly two erasures as to the total area in terms of number and one erasure as to that total area in
terms of unit of measurement.

The Court likewise notes with suspicion the fact that all four survey plans were purportedly undertaken by one and the same surveyor, a
Mr. A.N. Feliciano. It seems extremely unusual why the same A.N. Feliciano, who surveyed the same property for Andres Diaz in 1921,
would do so again in 1925 with different results, and again in 1930 once more with different results, and still one more time in 1931 with
still different results. The only reasonable and logical conclusion under these telling circumstances is that the second, third and last
surveys corresponding to PSU-47035, PSU-80886 and PSU-80886/SW0-20609 are all spurious and void, too.

The Court went through the record of the case and no satisfactory explanation has been offered by the defendant regarding these
discrepancies. Even the documentary evidence presented by the defendant offers no plausible reason for the Court to reject the
contentions of the plaintiffs. This all the more strengthens the view of the Court to effect that PSU-47035, PSU-80886 and PSU-
80886/SW0-20609 are spurious and void ab initio. This view is also strengthened by the credentials of Engineer Pada whom the Court
considers as a very credible witness.

All in all, the Court is convinced that the title of the plaintiffs to the properties in dispute is superior over those invoked by the defendant.48
[Emphases supplied]

The findings of the RTC of Las Piñas were affirmed by the CA in its February 8, 2005 decision. It agreed that there are indeed glaring
errors in the surveys relied upon by ALI. These errors could not be merely disregarded as they affect the authenticity and validity of OCT
Nos. 242, 244 and 1609.

Conclusion

After a judicious study of the case, the Court agrees with the findings of the RTC of Las Piñas and the CA in its February 8, 2005 decision.
First, Psu-25909 was conducted by a certain A.N. Feliciano in favor of Andres Diaz and was approved on May 26, 1921. Curiously, the
subsequent surveys of Psu-47035 for a certain Dominador Mayuga, Psu-80886 for a certain Guico and Psu-80886/SWO-20609 for a
certain Yaptinchay were also conducted by A.N. Feliciano. It is dubious how the same surveyor or agrimensor conducted Psu-47035,
Psu-80886 and Psu-80886/SWO-20609 even though an earlier survey on Psu-25909, which the surveyor should obviously be aware,
was already conducted on the same parcel of land. Engr. Pada, witness of Spouses Yu, also observed this irregularity and stated that
this practice is not the standard norm in conducting surveys.

Second, even though a single entity conducted the surveys, the lands therein were described to be located in different places. Psu-25909,
the earliest dated survey, indicated its location at Sitio of Kay Monica, Barrio Pugad Lawin, Las Piñas, Rizal, while Psu-47035 and Psu-
80886 stated their locations at Sitio May Kokek, Barrio Almanza, Las Piñas, Rizal, and Barrio Tindig na Mangga, Las Piñas, Rizal,
respectively. Again, Engr. Pada observed this peculiarity and pointed out that the subject properties should have had the same address.
ALI did not provide an explanation to the discrepancies in the stated addresses. Thus, it led the CA to believe that the same surveyor
indicated different locations to prevent the discovery of the questionable surveys over the same parcel of land.

Third, there is a discrepancy as to who requested the survey of Psu-47035. The photocopy of Psu-47035 as submitted by ALI shows that
it was done for a certain Estanislao Mayuga. On the other hand, the certified true copy of Psu-47035 depicts that it was made for
Dominador Mayuga. Once more, Engr. Pada noticed this discrepancy on the said survey. ALI, however, did not give any justification on
the diverging detail, which raises question as to the authenticity and genuineness of Psu-47035.

Fourth, Psu-80886 does not contain the signature of then Director of Lands, Serafin P. Hidalgo; rather, the prefix "Sgd." was simply
indicated therein. As properly observed by the CA in its February 8, 2005 decision, any person can place the said prefix and it does not
show that the Director of Lands actually signed and gave his imprimatur to Psu-80886. The absence of the approval of the Director of
Lands on Psu-80886 added doubt to its legitimacy. The excuse proffered by ALI - that Psu-80886 is regular and valid simply because
land registration proceedings were undertaken - is insufficient to cure the crucial defect in the survey.

In University of the Philippines v. Rosario,49 it was held that "[n]o plan or survey may be admitted in land registration proceedings until
approved by the Director of Lands. The submission of the plan is a statutory requirement of mandatory character. Unless a plan and its
technical description are duly approved by the Director of Lands, the same are of no value. " Hence, the lack of approval by the Director
of Lands of Psu-80886 casts doubt on its legality. It also affects the jurisdictional facts before the land registration courts which relied on
Psu-80886 for registration.

Fifth, Psu-80886 was issued on July 28, 1930 but it referred to a specific monument described as B.L.L.M No. 4. According to the LMB-
DENR, the said monument was only established on November 27, 1937, more than seven years after Psu-80886 was issued.50 This
discrepancy was duly noted in the findings of the verification report and it was affirmed by the testimony of Engr. Pada. Thus, both the
RTC of Las Piñas and the CA in its February 8, 2005 decision properly observed that it was highly irregular for Psu-80886 to refer to
B.L.L.M No. 4 because the said monument existed seven years later.

Sixth, ALI attempted to explain this anomaly by stating that Psu-80886 was amended by Psu-80886/SWO-20609, a Special Work Order,
in view of the discrepancies of the former. While Psu-80886/SWO-20609 is dated March 6, 1931, ALI insists that it was actually conducted
in 1937 and approved in 1940. However, in its February 8, 2005 decision, the CA noted that said testimony crumbled under cross-
examination as ALI's witness, Engr. Felino Cortez (Cortez), could not reaffirm the said justification for Psu-80886's manifest error of
including a latter dated monument. Also, the Court observed that ALI's other witness, Engr. Percival Bacani, testified that he does not
know why B.L.L.M No. 4 was used in preparing Psu-80886 even though the said monument appears on all the titles.51 Moreover, the
alleged explanation provided by ALI to justify the existence of B.L.L.M No. 4 in Psu-80886 was not indicated at all in the verification report
and survey plan they submitted before the RTC of Las Piñas. Accordingly, ALI did not resolve the uncertainty surrounding the reference
to B.L.L.M No. 4 by Psu-80886 and it seriously damages the validity of the said survey.

Seventh, ALI explained that Psu-80886/SWO-20609 was undertaken to correct a discrepancy in Psu-80886. Its witness, Engr. Cortez,
confirmed that Psu-80886/SWO-20609 was commenced to resolve the mistake in the timeline. He added that the timeline published in
the notice of initial hearing in the Official Gazette for Psu-80886 was different from the approved plan in Psu-80886/SWO-20609. He also
noted some difference in the area of Psu-80886 compared to Psu-80886/SWO-20609.52These admissions show that Psu-80886 was
flawed from the very beginning. Yaptinchay merely requested the conduct of Psu-80886/SWO-20609 in order to resurrect or salvage the
erroneous Psu-80886 and to wrongfully acquire OCT No. 242. It does not, however, erase the fact that Psu-80886, from which ALI's titles
originated, is marred with irregularities. This is a badge of fraud that further runs counter to the legitimacy of the surveys that ALI relied
upon.

Eight, the RTC of Las Piñas continuously observed the irregularities in Psu-80886. It stated that "the total area of the property covered
by the document bear many erasures, particularly two erasures as to the total area in terms of number and one erasure as to that total
area in terms of unit of measurement."53 Manifestly, no explanation was provided why it was necessary to make erasures of the crucial
data in the survey regarding the total area.

Ninth, the RTC of Las Piñas continued its observations regarding Psu-80886's anomalies. It added that "[a]n examination of the same
reveals that the lower right hand corner of the plan, which bears the serial number PSU-80886, is manifestly different from the main
document in terms of the intensity of its contrast, and that the change in the intensity of the shading is abrupt as one examines the
document starting from the lower right hand corner to anywhere else in the same document. Also, it is worth observing that the main
document, minus the lower right hand corner mentioned, does not indicate anything to even suggest that it pertains to plan PSU-80886.
For these reasons, the contention of the plaintiffs that this lower right hand corner of the plan appears to be a spurious attachment to the
main document to make the main document it look like it is actually plan PSU-80886, has merit."54 These observations were based on
the first-hand examination of the surveys, verification reports, and witnesses by the RTC of Las Piñas.
Tenth, as correctly emphasized by the CA in its February 8, 2005 decision, the Supreme Court had previously noted the defects
surrounding Psu-80886 in the case of Guico v. San Pedro. The said case involved the application of registration of Guico of a tract of
land covered by Psu-80886, subdivided into eleven (11) lots, filed on November 4, 1930 before the Court of First Instance of Rizal (CFI).
The said land originated from Pedro Lopez de Leon, covered by Psu-16400. It was transferred to his son, Mariano Lopez de Leon, and
then one-third portion thereof was conveyed to Guico. Several oppositors appeared therein to assail Guico's application. On August 19,
1935, the CFI ruled that only Lot Nos. 1, 2, 3, 6, 7 and 10 may be registered in the name of Guico.

On appeal, the CA disposed the case in this wise:

Adjudicamos a Eduardo C. Guico los lotes 2 y 3 de su plano y las porciones que quedan de las adjudicadas a el por el Juzgado inferior
y que no estan comprendidos en los terrenos reclamados por Valeriano Miranda, Nicasio san Pedro, Jose Dollenton, Gregorio Arciaga,
Donato Navarro, Leon Navarro, Dionisio Dollenton, Basilio Navarro, Bernardo Mellama y Lorenzo Dollenton, debiendo al efecto presentar
un plano enmendado debidamente aprobado por el Director de Terrenos, confirmado asi la decision apelada en lo que estuvira conforme,
y revocandola en lo que no estuviera.55

When translated, the text reads:

We adjudicate to Eduardo C. Guico Lots 2 and 3 of his plant and the portions that remain adjudicated to him by the lower court and that
are not included in the lands claimed by Valeriano Miranda, Nicasio San Pedro, Jose Dollenton, Gregorio Arciaga, Donato Navarro, Leon
Navarro, Dionisio Dollenton, Basilio Navarro, Bernardo Mellama, and Lorenzo Dollenton, under the obligation to present an amended
properly approved plan to the Director of Lands, confirming therefore the appealed decision what is consistent with this and revoking it
on what is not.56 [Emphasis and underscoring supplied]

Undeterred, Guico filed an appeal before the Supreme Court alleging that the CA erred in declaring that there was no imperfect title in
favor of Pedro Lopez de Leon, his predecessor-in-interest.

In its decision, dated June 20, 1941, the Court dismissed the appeal of Guico and affirmed the CA ruling. It was held that "la solicitud de
Pedro Lopez de Leon composicion con el Estado no fue aprobada porque no pudo hacerse la medicion correspondiente." Its translation
stated that the application of Pedro Lopez de Leon regarding the composition of the estate was not approved because he was not able
to submit the corresponding measurements, referring to Psu-16400, from which Psu-80886 was derived.

In addition, the Supreme Court noted that "while abundant proof is offered concerning the filing of the application for composition title by
the original possessor, the records nowhere exhibits compliance with the operative requirement of said section 45 (a) of Act. No. 2874,
that such applicants or grantees and their heirs have occupied and cultivated said lands continuously since the filing of their
applications."57

Consequently, the Court observed two major irregularities in the application of Guico under Psu-80886, (1) his predecessor-in-interest
did not submit any valid measurement of the estate from which Psu-80886 was derived; and (2) that the applicant or his grantees failed
to occupy or cultivate the subject land continuously. These findings are substantial and significant as these affect the validity of Psu-
80886.

ALI insisted that Guico v. San Pedro should actually be construed in their favor because the Court affirmed the ruling of the CA which
awarded Lot Nos. 2 and 3 to Guico, hence, Psu-80886 was valid.

The Court is not persuaded.

A reading of the dispositive portion of the CA decision in Guico v. San Pedro does not categorically state that Lot Nos. 2 and 3 were
absolutely and completely awarded to Guico. The award of the said lots was subject to the vital and primordial condition or obligation to
present to the court an amended, properly approved, plan to the Director of Lands. Evidently, the Court was not satisfied with Psu-80886
because it lacked the requisites for a valid survey. Thus, it required Guico to secure an amended and correctly approved plan, signed by
the Director of Lands. The purpose of this new plan was to confirm that the appealed decision was consistent with the facts established
therein. The records, however, did not show that Guico indeed secured an amended and properly approved plan. Psu-80886/SWO-20609
obviously was not the required amended order because a special work order is different from an amended survey.58 Moreover, the said
special work order was initiated by Yaptinchay, and not Guico. The insufficiency of Psu-80886 is evident in this decision.

Thus, as Guico did not subject Psu-80886 to a valid amended approved plan, he was not awarded Lot Nos. 2 and 3 for registration. It
can be seen from the OCT Nos. 242, 244, and 1609; that Guico never secured their registration because the Court discovered the
anomalous Psu-80886. The Court's pronouncement in Guico v. San Pedro, although promulgated more than half a century ago, must be
respected in accordance with the rule on judicial adherence.

Lastly, the Court also agrees with the finding of the CA in its February 8, 2005 decision that Psu-25909 bears all the hallmarks of verity.
It was established that Andres Diaz was the very first claimant of the subject property and was the proponent of Psu-25909. The said
survey clearly contained the signature of the surveyor and the Director of Lands, as can be seen on its face. In stark contrast with Psu-
80886, which contained alterations and erasures, Psu-25909 has none. The original of Psu-25909 was likewise on file with the Bureau
of Lands and a microfilm reproduction was readily obtained from the file of the said office, unlike in Psu-80886 and Psu-47909.

The RTC of Las Piñas shared this examination. It ruled that Psu-25909 was a true copy of an official document on file with the Bureau of
Lands. It also gave great weight and appreciation to the said survey because no irregularity was demonstrated in the preparation thereof.
The trial court added that Engr. Remolar, as the appropriate government custodian and court-appointed commissioner, certified the
authenticity of Psu-25909.

In fine, the Court finds that there are numerous defects in Psu-47909, Psu-80886 and Psu-80886/SWO-20609, which are all hallmarks
of fraud, viz:

That A.N. Feliciano conducted all the surveys even though he should have known that the earlier dated survey Psu- 25909, already
covered the same parcel of land;

That Psu-47909, Psu-80886 and Psu-25909 covered the same parcel of land and were conducted by the same surveyor but each survey
stated a different location;

That the photocopy of Psu-47035, as submitted by ALI, shows that it was done for a certain Estanislao Mayuga but the certified true copy
of Psu-47035 depicted that it was made for Dominador Mayuga;

That Psu-80886 did not contain the signature of then Director of Lands, Serafin P. Hidalgo, and it is well-settled rule that no plan or survey
may be admitted in land registration proceedings until approved by the Director of Lands;

That Psu-80886 was issued on July 28, 1930 but it referred to a specific monument described as B.L.L.M No.4, which was only established
on November 27, 1937;

That ALI attempted to explain this anomaly by stating that Psu-80886 was amended by Psu-80886/SWO-20609, which was done in 1937.
On cross-examination, however, the witness of ALI was unable to reaffirm that the special work order was rightly performed in 1937 and
the said explanation was not reflected in the verification report and survey plan of ALI;

That Psu-80886/SWO-20609 was undertaken to correct a discrepancy in Psu-80886, which was an admission that the latter survey, from
which the titles of ALI originated, was defective;

That the total area of the property covered by Psu-80886 contained many erasures, which were not satisfactorily explained;

That there was a difference in the intensity of the lower right portion of Psu-80886 which showed that it may simply have been an
attachment to the main document; and

That in Guico v. San Pedro, the Court found that irregularities surround Psu-80886 because its predecessor-in-interest did not submit the
corresponding measurement of his survey and the applicant or his grantees failed to occupy and cultivate the subject land continuously.
Further, Lot Nos. 2 and 3 of Psu-80886 were not awarded to Guico because the records do not show that he submitted the required
amended properly approved plan by the Director of Lands.
In contrast, Psu-25909 bore all the hallmarks of verity because it contains the signatures of the surveyor and the Director of Lands, and
it did not contain any erasure or alterations thereon. Likewise, a duly authenticated copy of Psu-25909 is readily available in the Bureau
of Lands.

The foregoing anomalies surrounding Psu-47909, Psu-80886, and Psu-80886/SWO-20609 were similarly observed by the RTC of Las
Piñas. The trial court was able to establish its findings based on the verification survey it ordered, under the supervision of the court-
appointed commissioner. Hence, the trial court had the direct access to the evidence presented by the parties as well as the verification
reports and survey plans submitted by the parties. It is a fundamental rule that the conclusion and findings of fact by the trial court are
entitled to great weight on appeal and should not be disturbed except for strong and cogent reasons, because the trial court is in a better
position to examine real evidence, as well as to observe the demeanor of the witnesses while testifying in the case.59

Even without considering (1) the certification from the DENR-LMB that Psu-80886 is included in the list of restricted plans because of the
doubtful signature of the surveyor, and (2) the memorandum, dated August 3, 2000, from the Assistant Regional Director of the DENR
directing all personnel of the Land Survey Division not to issue copies or technical descriptions of Psu-80886 and Psu-47035, there were
numerous defects on the surveys that affected their validity. The exclusion of these documents did not alter the finding of the Court that
the surveys were spurious and must be set aside.

Further, the Court cannot subscribe to the finding of the CA in its June 19, 2006 decision that the numerous defects in Psu-47909, Psu-
80886 and Psu-80886/SWO-20609 are "not enough to deprive the assailed decree of registration of its conclusive effect, neither are they
sufficient to arrive at the conclusion that the survey was definitely, certainly, conclusively spurious."60 The Court cannot close its eyes to
the blatant defects on the surveys upon which the original titles of ALI were derived simply because its titles were registered. To allow
these certificates of title in the registration books, even though these were sourced from invalid surveys, would tarnish and damage the
Torrens system of registration, rather than uphold its integrity.

It is an enshrined principle in this jurisdiction that registration is not a mode of acquiring ownership. A certificate of title merely confirms
or records title already existing and vested. The indefeasibility of a Torrens title should not be used as a means to perpetrate fraud against
the rightful owner of real property. Good faith must concur with registration because, otherwise, registration would be an exercise in
futility. A Torrens title does not furnish a shield for fraud, notwithstanding the long-standing rule that registration is a constructive notice
of title binding upon the whole world. The legal principle is that if the registration of the land is fraudulent, the person in whose name the
land is registered holds it as a mere trustee.61
When a land registration decree is marred by severe irregularity that discredits the integrity of the Torrens system, the Court will not think
twice in striking down such illegal title in order to protect the public against unscrupulous and illicit land ownership. Thus, due to the
numerous, blatant and unjustifiable errors in Psu-47909, Psu-80886, and Psu-80886/SWO-20609, these must be declared void. Likewise,
OCT Nos. 242, 244, and 1609, their transfer certificates, and instruments of conveyances that relied on the anomalous surveys, must be
absolutely declared void ab initio.

With respect to the Diaz case, the Court agrees with the CA in its February 8, 2005 decision that Spouses Diaz did not commit fraud. As
Psu-47909, Psu-80886 and Psu-80886/SWO-20609 are void, then OCT Nos. 242, 244 and 1609 are also void ab initio. The transfer
certificates in the hands of third parties, including CPJ Corporation and ALI, are likewise void. Accordingly, Spouses Diaz had no obligation
to inform CPJ Corporation of their application for registration and they could not be held guilty of fraud.

WHEREFORE, the petitions are GRANTED.

NEWS CLIPPING:

The Supreme Court (SC) has ruled against Ayala Land Inc. (ALI) in an dispute over a prime tract of land in Las Piñas City, as its title bore
erroneous land survey details.

In a recent 30-page decision, the SC 2nd Division reinstated the Court of Appeals’ (CA) original February 2005 ruling in favor of spouses
Yu Hwa Ping and Mary Gaw as well as the heirs of the spouses Andres Diaz and Josefa Mia.

While a genuine land title is usually considered a conclusive proof of ownership, the SC said blatant errors in the land surveys were a
ground to invalidate ALI’s title over the property that now covers Southlinks golf course and a materials depot inside Ayala Southvale.

“To allow these certificates of title in the registration books, even though these were sourced from invalid surveys, would tarnish and
damage the Torrens system of registration, rather than uphold its integrity,” read the decision penned by Associate Justice Jose Catral
Mendoza.

It added: “Good faith must concur with registration because, otherwise, registration would be an exercise in futility.”

Such errors in the surveys made during the American occupation include the fact that an even earlier survey already covered the land
under Psu-47909, Psu-80886 and Psu-80886/SWO-20609.

Yet, the three surveys were made by three different surveyors all covering the same tract of land despite indicating different locations.

Also, Psu-80886 issued July 28, 1930 referred to a monument established only on November 27, 1937.

The SC also took the creation of Psu-80886/SWO-20609 to amend the second survey as an admission that it was defective.

On the other hand, the earlier Psu-25909 was deemed to bear “all the hallmarks of verity” because it was signed by the surveyor and the
director of lands and did not contain erasures or alterations.

ABOITIZ VS. PO

FACTS:

This case involves a parcel of land located in Cabancalan, Mandaue City, initially registered as Original Certificate of Title No. 0-887, and
titled under the name of Roberto Aboitiz (Roberto). The land is referred to as Lot No. 2835. This parcel of land originally belonged to the
late Mariano Seno. On July 31, 1973, Mariano executed a Deed of Absolute Sale in favor of his son, Ciriaco Seno (Ciriaco), over a 1.0120-
hectare land in Cebu covered by Tax Declaration No. 43358. This property included two (2) lots: Lot No. 2807 and the land subject of this
case, Lot No. 2835.

In 1990, Peter Po (Peter) discovered that Ciriaco "had executed a quitclaim dated August 7, 1989 renouncing [his] interest over Lot [No.]
2807 in favor of [petitioner] Roberto." In the quitclaim, Ciriaco stated that he was "the declared owner of Lot [Nos.] 2835 and 2807." The
Spouses Po confronted Ciriaco. By way of remedy, Ciriaco and the Spouses Po executed a Memorandum of Agreement dated June 28,
1990 in which Ciriaco agreed to pay Peter the difference between the amount paid by the Spouses Po as consideration for the entire
property and the value of the land the Spouses Po were left with after the quitclaim. In its Decision dated October 28, 1993, the trial court
granted the issuance of Original Certificate of Title No. 0-887 in the name of Roberto. The lot was immediately subdivided with portions
sold to Ernesto and Jose.

The trial court ruled in favor of the Spouses Po in its Decision dated November 23, 2009. The Spouses Aboitiz appealed to the Court of
Appeals. The Court of Appeals, in its Decision dated October 31, 2012, partially affirmed the trial court decision, declaring the Spouses
Po as the rightful owner of the land. However, it ruled that the titles issued to respondents Jose, Ernesto, and Isabel should be respected.
The Court of Appeals discussed the inapplicability of the rules on double sale and the doctrine of buyer in good faith since the land was
not yet registered when it was sold to the Spouses Po. However, it ruled in favor of the Spouses Po on the premise that registered
property may be reconveyed to the "rightful or legal owner or to the one with a better right if the title [was] wrongfully or erroneously
registered in another person's name."
The Court of Appeals held that the Mariano Heirs were no longer the owners of the lot at the time they sold it to Roberto in 1990 because
Mariano, during his lifetime, already sold this to Ciriaco in 1973. However, the Court of Appeals ruled that the certificates of title of Jose,
Ernesto, and Isabel were valid as they were innocent buyers in good faith.

The Spouses Aboitiz thus filed their Petition for Review, which was docketed as G.R. No. 208450. They argue that the Decision of Branch
55, Regional Trial Court of Mandaue City granting the complaint of the Spouses Po is void for lack of jurisdiction over the matter. They
claim that a branch of the Regional Trial Court has no jurisdiction to nullify a final and executory decision of a co-equal branch; it is the
Court of Appeals that has this jurisdiction. The Spouses Po also filed a Petition for Review, which was docketed as G.R. No. 208497.
They claim that respondents Jose, Ernesto, and Isabel are not "innocent purchasers for value."

They allegedly knew of the defective title of Roberto because his tax declaration had the following annotation: "This tax declaration is also
declared in the name of Mrs. VICTORIA LEE PO, married to PETER PO under tax dec. No. 0634-A so that one may be considered a
duplicate to the other.

ISSUES:

1) Whether or not the Regional Trial Court has jurisdiction over the Spouses Peter and Victoria Po's complaint;

2) Whether the action is barred by prescription;

3) Whether the doctrines of estoppel and laches apply;

4) Whether the land registration court's finding that Ciriaco Seno only held the property in trust for the Mariano Heirs is binding as res
judicata in this case;

5) Whether the Deed of Absolute Sale between Ciriaco Seno and the Spouses Peter and Victoria Po should be considered as evidence
of their entitlement to the property;

6) Whether the Mariano Heirs, as sellers in a deed of conveyance of realty, are indispensable parties; and

7) Whether the respondents Jose Maria Moraza, Ernesto Aboitiz, and Isabel Aboitiz are innocent purchasers in good faith.

HELD:

1) Except for actions falling within the jurisdiction of the Municipal Trial Courts, the Regional Trial Courts have exclusive original jurisdiction
over actions involving "title to, or possession of, real property." Section 19 of Batas Pambansa Blg. 129 provides: Section 19. Jurisdiction
in Civil Cases. - Regional Trial Courts shall exercise exclusive original jurisdiction: (2) In all civil actions which involve the title to, or
possession of, real property, or any interest therein, except actions for forcible entry into and unlawful detainer of lands or buildings,
original jurisdiction over which is conferred upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts. The
Spouses Aboitiz claim that it is the Court of Appeals that has jurisdiction over the annulment of Regional Trial Court judgments. The
jurisdiction of the Court of Appeals is provided in Section 9 of Batas Pambansa Blg. 129: Section 9. Jurisdiction. - The Intermediate
Appellate Court shall exercise: (2) Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts. While
the Court of Appeals has jurisdiction to annul judgments of the Regional Trial Courts, the case at bar is not for the annulment of a judgment
of a Regional Trial Court. It is for reconveyance and the annulment of title. Considering the Spouses Aboitiz's fraudulent registration
without the Spouses Po's knowledge and the latter's assertion of their ownership of the land, their right to recover the property and to
cancel the Spouses Aboitiz's title, the action is for reconveyance and annulment of title and not for annulment of judgment. Thus, the
Regional Trial Court has jurisdiction to hear this case.

2) "An action for reconveyance prescribes in ten [10] years from the issuance of the Torrens title over the property." The basis for this is
Section 53, Paragraph 3 of Presidential Decree No. 1529 in relation to Articles 1456 and 1144(2) of the Civil Code. Under Presidential
Decree No. 1529 (Property Registration Decree), the owner of a property may avail of legal remedies against a registration procured by
fraud: SECTION 53. Presentation of Owner's Duplicate Upon Entry of New Certificate. – In all cases of registration procured by fraud, the
owner may pursue all his legal and equitable remedies against the parties to such fraud without prejudice, however, to the rights of any
innocent holder for value of a certificate of title ... CIVIL CODE, Art. 1456 provides: Article 1456. If property is acquired through mistake
or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the
property comes. CIVIL CODE, Art. 1144(2) provides: Article 1144. The following actions must be brought within ten years from the time
the right of action accrues: (2) Upon an obligation created by law. In an action for reconveyance, the right of action accrues from the time
the property is registered. An action for reconveyance and annulment of title does not seek to question the contract which allowed the
adverse party to obtain the title to t h e property. What is put on issue in an action for reconveyance and cancellation of title is the
ownership of the property and its registration. It does not question any fraudulent contract. Should that be the case, the applicable
provisions are Articles 1390 and 1391 of the Civil Code. Thus, an action for reconveyance and cancellation of title prescribes in 10 years
from the time of the issuance of the Torrens title over the property. Considering that the Spouses Po's complaint was filed on November
19, 1996, less than three (3) years from the issuance of the Torrens title over the property on April 6, 1994, it is well within the 10-year
prescriptive period imposed on an action for reconveyance.

3) There is laches when a party was negligent or has failed "to assert a right within a reasonable time," thus giving rise to the presumption
that he or she has abandoned it. Laches has set in when it is already inequitable or unfair to allow the party to assert the right. The
elements of laches were enumerated in Ignacio v. Basilio: There is laches when: (1) the conduct of the defendant or one under whom he
claims, gave rise to the situation complained of; (2) there was delay in asserting a right after knowledge of the defendant's conduct and
after an opportunity to sue; (3) defendant had no knowledge or notice that the complainant would assert his right; (4) there is injury or
prejudice to the defendant in the event relief is accorded to the complainant. "Laches is different from prescription." Prescription deals
with delay itself and thus is an issue of how much time has passed. The time period when prescription is deemed to have set in is fixed
by law. Laches, on the other hand, concerns itself with the effect of delay and not the period of time that has lapsed. When they discovered
that the property was registered in the name of the Spouses Aboitiz in 1993, the Spouses Po then filed the instant complaint to recover
the property sold to them by Ciriaco, alleging that it was done without their knowledge, through evident bad faith and fraud. The Spouses
Po filed this case in less than three (3) years from the time of registration. Based on these circumstances, the elements of laches are
clearly lacking in this case. There was no delay in asserting their right over the property, and the Spouses Aboitiz had knowledge that the
Spouses Po would assert their right. Thus, it cannot be said that they are barred by laches.

4) This Court rules that this cannot be binding in this action for reconveyance. Res judicata embraces two (2) concepts: (i) bar by prior
judgment and (ii) conclusiveness of judgment, respectively covered under Rule 39, Section 47 of the Rules of Court, paragraphs (b) and
(c): Section 47. Effect of judgments or final orders. - The effect of a judgment or final order rendered by a court of the Philippines, having
jurisdiction to pronounce the judgment or final order, may be as follows: (b) In other cases, the judgment or final order is, with respect to
the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and
their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and
under the same title and in the same capacity; and (c) In any other litigation between the same parties or their successors in interest, that
only is deemed to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or
which was actually and necessarily included therein or necessary Thereto. An exception to this rule is if the party claiming ownership has
already had the opportunity to prove his or her claim in the land registration case. In such a case, res judicata will then apply. When an
issue of ownership has been raised in the land registration proceedings where the adverse party was given full opportunity to present his
or her claim, the findings in the land registration case will constitute a bar from any other claim of the adverse party on the property.
However, this is not the circumstance in the case at bar. The Spouses Po were not able to prove their claim in the registration proceedings.
Thus, res judicata cannot apply to their action for reconveyance.

5) The Spouses Aboitiz posit that the Deed of Absolute Sale between Ciriaco and the Spouses Po is fake and fraudulent. They argue
that this is evidenced by certifications of the document's non-existence in the notarial books and the Spouses Po's failure to enforce their
rights over the property until 18 years later. They also claim that the Deed of Absolute Sale is inadmissible as no documentary stamp was
paid and affixed. The Spouses Aboitiz failed to prove that these exceptions exist in the case at bar. The Regional Trial Court lent credence
to documents presented by the Spouses Po, Peter's testimony about Mariano's sale of the property to Ciriaco, Ciriaco's sale of the
property to the Spouses Po, and the issuance of a Tax Declaration in the name of Victoria. The Regional Trial Court thus held: In this
case, the Court believes that defendant Roberto Aboitiz is aware of the proprietary rights of the plaintiffs considering the land was already
declared for taxation purposes in plaintiffs' names after the tax declaration of said land, first in the name of Mariano Seno was cancelled
and another one issued in the name of Ciriaco Seno when the latter bought the said land from his father Mariano Seno, and after the said
tax declaration in the name of Ciriaco Seno was cancelled and another one issued in the name of plaintiffs herein. So, defendant Roberto
Aboitiz purchased the subject land from the Heirs of Mariano Seno who are no longer the owners thereof and the tax declaration of
subject land was no longer in the name of Mariano Seno nor in the name of Heirs of Mariano Seno. The City Assessor of Mandaue City
even issued a Certification (Exh. X) to the effect that Tax Declaration No. 0634-A in the name of Mrs. Victoria Lee Po married to Peter
Po was issued prior to the issuance of T.D. No. 1100 in the name of Roberto Aboitiz married to Maria Cristina Cabarruz. Buyers of any
untitled parcel of land for that matter, to protect their interest, will first verify from the Assessor's Office that status of said land whether it
has clean title or not. The Spouses Aboitiz failed to present clear and convincing evidence to overturn the presumption. The notarized
Deed of Absolute Sale between Ciriaco and the Spouses Po is, thus, presumed regular and authentic. Consequently, this Court can
affirm the finding that the property was sold to Ciriaco in 1973, and that Ciriaco, as the owner of the property, had the right to sell it to the
Spouses Po. Hence, the lot did not form part of the estate of Mariano, and the Mariano Heirs did not have the capacity to sell the property
to the Spouses Aboitiz later on.

6) The Mariano Heirs are not indispensable parties. Rule 3, Section 7 of the Revised Rules of Court provides: Section 7. Compulsory
Joinder of Indispensable Parties. - Parties in interest without whom no final determination can be had of an action shall be joined either
as plaintiffs or defendants. An indispensable party is the party whose legal presence in the proceeding is so necessary that "the action
cannot be finally determined" without him or her because his or her interest in the matter and in the relief "are so bound up with that of
the other parties. The Mariano Heirs, as the alleged sellers of the property, are not indispensable parties. They are at best necessary
parties, which are covered by Rule 3, Section 8 of the Rules of Court: Section 8. Necessary Party. - A necessary party is one who is not
indispensable but who ought to be joined as a party if complete relief is to be accorded as to those already parties, or for a complete
determination or settlement of the claim subject of the action. It is clear that the Mariano Heirs are not indispensable parties. They have
already sold all their interests in the property to the Spouses Aboitiz. They will no longer be affected, benefited, or injured by any ruling
of this Court on the matter, whether it grants or denies the complaint for reconveyance. The ruling of this Court as to whether the Spouses
Po are entitled to reconveyance will not affect their rights. Their interest has, thus, become separable from that of Jose, Ernesto, and
Isabel. Thus, the Court of Appeals correctly ruled that the Mariano Heirs are not indispensable parties.

7) An innocent purchaser for value refers to the buyer of the property who pays for its full and fair price without or before notice of another
person's right or interest in it. He or she buys the property believing that "the seller is the owner and could transfer the title to the property."
If a property is registered, the buyer of a parcel of land is not obliged to look beyond the transfer certificate of title to be considered a
purchaser in good faith for value. Section 44 of Presidential Decree No. 1529 states: Section 44. Statutory liens affecting title. - Every
registered owner receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered
land taking a certificate of title for value and in good faith, shall hold the same free from all encumbrances except those noted in said
certificate and any of the following encumbrances which may be subsisting, namely: First. Liens, claims or rights arising or existing under
the laws and Constitution of the Philippines which are not by law required to appear of record in the Registry of Deeds in order to be valid
against subsequent purchasers or encumbrancers of record. Second. Unpaid real estate taxes levied and assessed within two years
immediately preceding the acquisition of any right over the land by an innocent purchaser for value, without prejudice to the right of the
government to collect taxes payable before that period from the delinquent taxpayer alone. Third. Any public highway or private way
established or recognized by law, or any government irrigation canal or lateral thereof, if the certificate of title does not state that the
boundaries of such highway or irrigation canal or lateral thereof have been determined. Fourth. Any disposition of the property or limitation
on the use thereof by virtue of, or pursuant to, Presidential Decree No. 27 or any other law or regulations on agrarian reform. In Leong v.
See: The Torrens system was adopted to "obviate possible conflicts of title by giving the public the right to rely upon the face of the
Torrens certificate and to dispense, as a rule, with the necessity of inquiring further." One need not inquire beyond the four comers of the
certificate of title when dealing with registered property... The protection of innocent purchasers in good faith for value grounds on the
social interest embedded in the legal concept granting indefeasibility of titles. Between the third party and the owner, the latter would be
more familiar with the history and status of the titled property. Consequently, an owner would incur less costs to discover alleged
invalidities relating to the property compared to a third party. Such costs are, thus, better borne by the owner to mitigate costs for the
economy, lessen delays in transactions, and achieve a less optimal welfare level for the entire society. Thus, respondents were not
obliged to look beyond the title before they purchased the property. They may rely solely on the face of the title. The only exception to
the rule is when the purchaser has actual knowledge of any defect or other circumstance that would cause "a reasonably cautious man"
to inquire into the title of the seller. If there is anything which arouses suspicion, the vendee is obliged to investigate beyond the face of
the title. Otherwise, the vendee cannot be deemed a purchaser in good faith entitled to protection under the law.

HEIRS OF AOAS VS. AS-IL

FACTS:

As-il filed a complaint for forcible entry and damages against the Heirs of Aoas before the MTC, claiming absolute ownership and
possessory rights over the 42 square meter portion of a parcel of land covered by TCT No. T-57645. She alleged that since time
immemorial, she, by her predecessors and successors-in-interest, had been in actual, open, physical, and notorious possession of the
subject property; that sometime in January 2005, she discovered that the Heirs of Aoas, by stealth and strategy, initiated the preparatory
digging, clearing and construction of a house and enclosing the subject land, thus, depriving and dispossessing her of the same; and that
when confronted, they asserted ownership of the same property. From the foregoing, As-il asked the MTC to order the Heirs of Aoas to
vacate the subject property and that compensation be given to her as well as damages and attorney's fees.

In their Answer, the Heirs of Aoas contended that the area As-il claimed was their property, it being part of a land registered in their names
under TCT No. T-32507; that they had been in continuous, public and adverse possession and occupation of it; that they have erected a
residential house and undertook activities such as fencing, rip-rapping and other improvements done openly and publicly on the said
property; that it was only after completion of the residential house when As-il asserted her claim over the property; and that in the belief
of being the true owners, they refused As-il's demands to turn over the property.

At the MTC Level

During trial, the MTC, with the concurrence of both parties, ordered the conduct of a relocation survey over the property. A Survey
Commission was agreed to be formed and upon completion of its tasks, a report was issued which, however, failed to address the
question on ownership. It merely confirmed that the properties overlapped each other. In other words, conflict in boundaries was
acknowledged.

In its August 9, 2006 Decision, the MTC ruled that a portion of the land claimed by the Heirs of Aoas encroached a part of the land
registered under As-il's name. It found that As-il had prior physical possession over the subject property, which could not be defeated by
the subsequent possession of the Heirs of Aoas. Thus:chanRoblesvirtualLawlibrary

WHEREFORE, in view of all the foregoing, Judgment is hereby rendered in favor of the plaintiff and against the defendants as
follows:chanRoblesvirtualLawlibrary
a) Ordering the defendants, their representative and all persons acting under them to vacate and to turn over peacefully the actual and
material possession of the 42 square meter lot indicated (PORTION of LOT 4 (ALLEY) occupied by the HRS AOAS, REP. BY PUCAY
AREA-42 sq.m.) in the Joint Relocation Survey/Sketch Plan prepared by the Survey Commission and marked as Exh. "D" for the plaintiff
and Exh. "4" for the defendants which is part and parcel of the land of the plaintiff covered by Transfer Certificate of Title No. T-
57645;ChanRoblesVirtualawlibrary

b) [t]o remove any and all of the improvements found within the 42 square meters within sixty (60) days from the finality of the
judgment;ChanRoblesVirtualawlibrary

c) to pay by way of compensation for the reasonable use and occupation of the said 42 square meters fixed at a reasonable amount of
P1,000.00 a month from the commencement of the action until the same shall have been fully paid;ChanRoblesVirtualawlibrary

d) to pay by way of attorney's fees in the amount of P5,000; and;ChanRoblesVirtualawlibrary

e) to pay the costs

chanrobleslaw
SO ORDERED.7
chanrobleslaw
Aggrieved, the Heirs of Aoas appealed before the RTC.

RTC Ruling
In its August 31, 2010 Decision, the RTC initially affirmed the MTC decision. It reiterated that as per the report of the Survey Commission,
a portion of the property owned by the Heirs of Aoas encroached the property of As-il. The dispositive portion
reads:chanRoblesvirtualLawlibrary
WHEREFORE, in view of the foregoing, the instant appeal is hereby DISMISSED for lack of merit. And the Decision appealed from is
hereby AFFIRMED in toto.
SO ORDERED.8

Acting on petitioners' motion for reconsideration, however, the RTC reversed itself. Thus, in its October 6, 2010 Resolution,9 the RTC
dismissed the complaint for forcible entry stating that had it earlier considered the Tax Declaration of Real Property No. 007-02522 in the
names of Heirs of Aoas, its conclusions and that of the MTC would have been different.

It opined that the said tax declaration, which was formally offered as Exhibit "3," showed that the Heirs of Aoas had already been in
possession of the subject property even prior to the year 2000, negating As-il's claim that she was deprived of her prior possession. The
RTC observed that while the Heirs of Aoas submitted a position paper together with the documentary evidence and affidavits of witnesses,
As-il did not. Thus, it posited that As-il's complaint was unsupported by evidence, which was insufficient to debunk the documentary
evidence of the Heirs of Aoas, specifically the tax declaration supporting the latter's right to possess the disputed portion of the lot.
Thus:chanRoblesvirtualLawlibrary
WHEREFORE, in view of the foregoing, the Decision rendered by this Court dated August 31, 2010 is hereby RECONSIDERED and SET
ASIDE. In its stead, another judgment is hereby rendered REVERSING the Decision appealed from. The Complaint filed by the appellee
is hereby DISMISSED, for lack of merit.

SO ORDERED.10
chanrobleslaw
Unsatisfied, As-il appealed before the CA.

The CA Ruling

In its September 17, 2014 Decision,11 the CA held that points of law, theories, issues and arguments, including the tax assessments, not
brought to the attention of the trial court could not be and ought not to be considered by a reviewing court, as those could not be raised
for the first time on appeal. Considering that the tax declaration used by the RTC as basis to reverse its earlier decision and that of the
MTC was not presented during the trial proper, the appellate court upheld the right of As-il to evict the Heirs of Aoas, as earlier adjudged
by the MTC and the RTC in the latter's earlier decision. Thus, it disposed:chanRoblesvirtualLawlibrary
WHEREFORE, the Petition for Review is GRANTED. The assailed Resolution is SET ASIDE. The Decision of August 31, 2010 of the
Regional Trial Court is REINSTATED.12
chanrobleslaw
Aggrieved, the Heirs of Aoas moved for reconsideration but their motion was denied by the CA in its June 8, 2015 Resolution.13

Hence, this petition raising this

SOLE ISSUE

WHETHER THE HONORABLE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION IN SETTING ASIDE THE
RESOLUTION OF THE REGIONAL TRIAL COURT AND THAT THE PETITIONERS HAVE COMMITTED FORCIBLE ENTRY.14
chanrobleslaw
The Heirs of Aoas argue that the issue as to who has a better right over the disputed property with an area of 42 square meters could not
be resolved in an ejectment suit considering that they had built their structures within the confines of their property covered by TCT No.
T-32507; that no stealth or strategy was employed in erecting their residential house over the area because they possessed and occupied
the property within the metes and bound of their land as described in their certificate of title; that even if the tax declaration were to be
disregarded, other documents still prove their prior possession of the land even prior to year 2000, citing official tax receipts of real
property payments for 1994 up to 2005; that these tax receipts supported the conclusion that they were in possession of the property
even before the year 2000 as well as the fact that their house was built sometime in 1997; that the tax declaration merely confirmed their
possession; and that even without the tax assessment, their actual right to possess the property should be affirmed as it has been
substantiated already during trial.

In her Comment,15 dated December 17, 2015, As-il manifested that she was adopting, by way of reference and incorporation, the CA
decision as her Comment.

In their Reply,16 dated April 11, 2016, the Heirs of Aoas manifested that they would just adopt the arguments/discussion in the petition
they had filed earlier.chanroblesvirtuallawlibrary

The Court's Ruling

The petition is meritorious.

The Heirs of Aoas insist that the CA should have not found them liable for forcible entry.
The Court, however, finds that the real issue here is whether an ejectment case under Rule 70 was a proper remedy to resolve this
controversy.

From a deeper analysis of the records and attendant circumstances, it is clear that this case deals not with the right to possess the
property. Instead, the main discussions in the lower courts and the CA went around the boundary dispute between the contending parties
over the 42 square meter parcel of land. This is apparent from the fact that the properties being claimed by both parties are covered by
separate certificates of title and overlapped each other. Stated differently, both parties lay claim to that property on the basis of their
certificates of title, both of which cover the contested land. The MTC and RTC findings confirm this.

In its decision, the MTC stated as follows:chanRoblesvirtualLawlibrary

The ground verification survey conducted by Survey Commission shows that the theory of the plaintiff is true and correct. A portion of the
titled land of the plaintiff on the East is invaded by the titled land of the defendants on the West by 42 square meters. The shaded portion
ALLEY 3.00. wide portion of Lot 4-PSU-174581-AMD. is the encroachment or overlapping. The defendants therefore have encroached
or invaded or intruded into the 42 suare meters area which is clearly within the metes and bounds of the titled land of the plaintiff. Whatever
claim of possession insisted by the defendants must yield to the possession of the plaintiff. The reason is but a conclusion of logic and
common sense.
chanrobleslaw
The RTC on the other hand similarly stated the following:chanRoblesvirtualLawlibrary
In asserting their ownership over the disputed lot, the plaintiff-appellee claimed that the same formed part of the parcel of land covered
by Transfer Certificate of Title No. T-57645 in her name.

On the other hand, the defendants-appellants also maintained that the said disputed portion is situated within the parcel of land covered
by Transfer of Certificate of Title No. T-32507 in the names of their late parents Johnny and Jocelyn Aoas,

xxxx

And as per said Report of the Survey Commission xxx apart from three (3) others who are separately occupying a portion thereof, an
extent of 42 sq. ms., is being occupied by the defendants which is a part and parcel of land covered by Transfer Certificate of Title No.
T-57645 in the name of the plaintiff. Such findings of the Survey Commission readily resolved in the affirmative, the issue agreed upon
by the parties in the pre-trial as "whether or not the defendants have unlawfully encroached a portion of the lot of the plaintiff.
chanrobleslaw
Settled is the rule that a boundary dispute, as in this case, can only be resolved in the context of an accion reivindicatoria, and not in an
ejectment case.17 In Manalang v. Bacani, the Court held that boundary dispute cannot be resolved in ejectment proceedings as it
involves different issues, to wit: The boundary dispute is not about possession, but encroachment, that is, whether the property claimed
by the defendant formed part of the plaintiffs property. A boundary dispute cannot be settled summarily under Rule 70 of the Rules of
Court, the proceedings under which are limited to unlawful detainer and forcible entry. In unlawful detainer, the defendant unlawfully
withholds the possession of the premises upon the expiration or termination of his right to hold such possession under any contract,
express or implied. The defendant's possession was lawful at the beginning, becoming unlawful only because of the expiration or
termination of his right of possession. In forcible entry, the possession of the defendant is illegal from the very beginning, and the issue
centers on which between the plaintiff and the defendant had the prior possession de facto.18 [Emphasis supplied]

Given the foregoing, the CA erred in affirming the ejectment of the Heirs of Aoas considering that the issue raised cannot be properly
ventilated in a forcible entry case as the main contention of the parties deal with encroachment. In other words, the MTC in passing upon
the case, acted without authority as the case was beyond the ambit of a summary proceeding.

All other issues raised need not be discussed as the remedy availed of by the parties was improper in the first place. To afford the parties
the constitutional right to due process, this case should be dismissed without prejudice to the proper filing of a case in the proper forum.

WHEREFORE, the petition is GRANTED.

NPC VS. ASOQUE

FACTS:

Spouses Asoque are the registered owners of a parcel of coconut land located in Barangay Bugtong, Calbayog City.

Sometime in November 1995, the National Power Corporation entered the Spouses Asoque's land to install transmission lines for its 350
KV Leyte-Luzon HVDC Power Transmission Line Project.

The National Power Corporation utilized 4,352 square meters for the project.

Spouses Asoque allege that beforehand, they were made to understand that the National Power Corporation would pay them the value
of the portion of the land used and all improvements that would be destroyed for the National Power Corporation's project.

Spouses Asoque incurred actual damages as a result of the National Power Corporation's cutting off some coconut trees and other fruit-
and non-fruit-bearing plants during the construction.
They were also prohibited from introducing on the 4,352-square-meter area any improvement that could rise by a few meters from the
ground.

Upon Spouses Asoque's demand for just compensation, the National Power Corporation only paid for the improvements destroyed and
refused to pay for the actual value of the 4,352-square-meter area utilized for the project.

The National Power Corporation claimed that it was only liable to pay for right of way at 10% of the market value under Section 3-A of
Republic Act No. 6395,... as amended.

On September 20, 1999, Spouses Asoque filed before the Regional Trial Court of Calbayog City a Complaint... for payment of just
compensation and damages against the National Power Corporation.

In its Answer... dated February 7, 2000, the National Power Corporation denied Spouses Asoque's claims that it had illegally utilized their
property. It alleged that it entered the property with Spouses Asoque's consent, as shown by the acknowledgment receipt... for P9,897.00
as payment for damaged improvements and waiver of claims to improvements damaged.

By virtue of the acknowledgement receipt and the waiver, the National Power Corporation claimed that there was no more need for it to
institute an expropriation proceeding.

On June 25, 2002, the Regional Trial Court rendered the Decision... in favor of Spouses Asoque and ordered the National Power
Corporation to pay them

Aggrieved, the National Power Corporation filed an appeal before the Court of Appeals.

The Court of Appeals denied... the National Power Corporation's appeal in its Decision dated November 21, 2005. It affirmed with
modification the Regional Trial Court Decision by deleting the amount of P158,369.00 as compensation for the damaged improvements
for lack of legal and factual basis.

The Court of Appeals found no impropriety on the part of the Regional Trial Court in allowing Spouses Asoque to present their evidence
ex parte and in appointing the Branch Clerk of Court as Commissioner to receive Spouses Asoque's evidence ex parte.

It also found no irregularity in the trial court's adoption of the Commissioner's report/recommendation, which was found to be
comprehensive and supported by evidence.

Rejecting the National Power Corporation's stance that only an easement of right of way was acquired at 10% of the market value under
Section 3-A of Republic Act No. 6395, the Court of Appeals ruled that the determination of just compensation is a judicial function and
cannot be diminished by Republic Act No. 6395, as amended.

Finally, the Court of Appeals found that Spouses Asoque have already been properly compensated for the damaged improvements per
disbursement vouchers in the total amount of P17,133.50, and Spouses Asoque failed to present competent proof that they were entitled
to an additional award of actual damages.

ISSUES:

Whether or not petitioner should be made to pay simple easement fee or full compensation for the land traversed by its transmission
lines.

RULING:

Petitioner is liable to pay respondents just compensation and not merely an easement fee on the basis that its acquisition of a right-of-
way easement over the portion of respondents' land was a taking under the power of eminent domain.

While expropriation normally involves a taking of title to and possession of the property, an easement of right of way on a private property
can be considered a taking under eminent domain under certain conditions. In Republic v. PLDT:

Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession of, the expropriated
property; but no cogent reason appears why the said power may not be availed of to impose only a burden upon the owner of condemned
property, without loss of title and possession. It is unquestionable that real property may, through expropriation, be subjected to an
easement of right of way.

There is taking in the context of the state's power of eminent domain when the following elements are present:(1) The expropriator enters
a private property;(2) The entrance into the private property is indefinite or permanent;(3) There is color of legal authority in the entry into
the property;(4) The property is devoted to public use or purpose; and(5) The use of property for public use removed from the owner all
beneficial enjoyment of the property.

A right-of-way easement or burden becomes a "taking" under eminent domain when there is material impairment of the value of the
property or prevention of the ordinary uses of the property for an indefinite period.
The intrusion into the property must be so immediate and direct as to subtract from the owner's full enjoyment of the property and to limit
his or her exploitation of it.

In Republic v. Andaya, he enforcement by the Republic of its legal easement on Andaya's property for concrete levees and floodwalls
would render the remaining property unusable and uninhabitable. This Court held that there was a taking of the remaining area of Andaya's
property:

We are, however, unable to sustain the Republic's argument that it is not liable to pay consequential damages if in enforcing the legal
easement on Andaya's property, the remaining area would be rendered unusable and uninhabitable. "Taking," in the exercise of the
power of eminent domain, occurs not only when the government actually deprives or dispossesses the property owner of his property or
of its ordinary use, but also when there is a practical destruction or material impairment of the value of his property. Using this standard,
there was undoubtedly a taking of the remaining area of Andaya's property. True, no burden was imposed thereon and Andaya still
retained title and possession of the property. But, as correctly observed by the Board and affirmed by the courts a quo, the nature and
the effect of the Jloodwalls would deprive Andaya of the normal use of the remaining areas. It would prevent ingress and egress to the
property and turn it into a catch basin for the floodwaters coming from the Agusan River.

National Power Corporation v. Heirs of Sangkay... held that the National Power Corporation's surreptitious construction of a tunnel
underneath the respondents' land adversely affected the respondent's rights and interests. This is because the National Power
Corporation's subterranean intervention prevented the respondents from introducing any developments on the surface and from disposing
of the land or any portion of it. Hence, there was a taking of the land as to entitle the owners to just compensation:We agree with both
the RTC and the CA that there was a full taking on the part of NPC, notwithstanding that the owners were not completely and actually
dispossessed. It is settled that the taking of private property for public use, to be compensable, need not be an actual physical taking or
appropriation. Indeed, the expropriator's action may be short of acquisition of title, physical possession, or occupancy but may still amount
to a taking. Compensable taking includes destruction, restriction, diminution, or interruption of the rights of ownership or of the common
and necessary use and enjoyment of the property in a lawful manner, lessening or destroying its value. It is neither necessary that the
owner be wholly deprived of the use of his property, nor material whether the property is removed from the possession of the owner, or
in any respect changes hands.

The right-of-way easement resulting in a limitation on property rights over the land traversed by transmission lines also falls within the
ambit of the term "expropriation."

Hence, due to the nature of the easement, which will deprive the normal use of the land for an indefinite period and expose the property
owners' lives and limbs to danger, just compensation must be based on the full market value of the affected property.

Section 3(a) of Republic Act No. 6395, as amended, states that only 10% of the market value of the property is due the owner of the
property subject to a right-of-way easement. However, this rule is not binding on the Court. Well-settled is the rule that the determination
of just compensation for property taken in expropriation is a judicial prerogative.

Such discretion cannot be curtailed by legislation.

The value and character of the land at the time it was taken by government are the criteria for determining just compensation.

"All the facts as to the condition of the property and its surroundings, as well as its improvements and capabilities, must thus be
considered."

Furthermore, the Branch Clerk of Court as Commissioner stated that one high-ranking personnel of the City Assessor's Office of Calbayog
observed that the market value of respondents' land in the Tax Declaration is a very low appraisal.

As such, when he made the recommendation, he considered other factors such as the accessibility of the property, availability of basic
services in the area, land valuation trend in the City of Calbayog (which was somewhere between P600.00 and P3,000.00 per square
meter),... and interviews with some landowners of the adjacent lots stating that they would not sell their lands lower than P500.00 per
square meter.

The Regional Trial Court found the amount recommended by the Commissioner as just compensation for the property to be reasonable,
thus:[T]he Court finds the amount recommended by the commissioner as just compensation of the property expropriated by defendant to
be reasonable and fairly based on the evidence adduced by plaintiff. Exhibits "F" and series, "G" and series, and "H" and series show the
comparative value of the lands in Western Samar. The Court takes note that in the three cases of expropriation involving lands in
Catbalogan, Samar, the National Power Corporation was adjudged to pay the value of the properties from Php2,000.00 to Php2,200.00
per square meter, and these were cases decided in 1997. Likewise, this Court takes cognizance of the fact that the commissioner may
avail or consider certain factors in determining the fair market value of the property apart from the preferred documentary evidences.
Thus, the factors taken into account by the commissioner in arriving at the recommended fair market value of the property at Php800.00
per square meter, aside from the evidence available, were valid criteria or gauge in the determination of the just compensation of the
subject property.

The determination of just compensation being a judicial function, we find no compelling reason to disturb the valuation set by the Regional
Trial Court and approved by the Court of Appeals. It has not been sufficiently shown to be grossly exorbitant or otherwise unjustified.

WHEREFORE, the Petition is DENIED.

Principles:

There is taking in the context of the state's power of eminent domain when the following elements are present:(1) The expropriator enters
a private property;(2) The entrance into the private property is indefinite or permanent;(3) There is color of legal authority in the entry into
the property;(4) The property is devoted to public use or purpose; and(5) The use of property for public use removed from the owner all
beneficial enjoyment of the property.

A right-of-way easement or burden becomes a "taking" under eminent domain when there is material impairment of the value of the
property or prevention of the ordinary uses of the property for an indefinite period.

The intrusion into the property must be so immediate and direct as to subtract from the owner's full enjoyment of the property and to limit
his or her exploitation of it.

The right-of-way easement resulting in a limitation on property rights over the land traversed by transmission lines also falls within the
ambit of the term "expropriation."

Well-settled is the rule that the determination of just compensation for property taken in expropriation is a judicial prerogative.

INALVEZ VS. NOOL

FACTS:

The records showed that the subject property was originally covered by TCT No. 583986 originally registered in the names of Spouses
Nicolas and Francisca Nool and Spouses Cornelio and Bayang, with an area of 15.1441 ha. On May 3, 1965, Spouses Cornelio and
Bayang sold a large portion of their one-half share of the landholding to the petitioners and Maria Zamora (Zamora). Then, on April 16,
1980, the new set of owners, namely, Spouses Macayanan, Zamora, Spouses Cornelio and Bayang, and the petitioners executed a Real
Estate Mortgage (REM) over the whole property in favor of Tarlac Development Bank (TDB) to secure a loan of Pl0,000.00.

Unfortunately, the mortgage was foreclosed, and the title to the subject property was consolidated with TDB, together with the
corresponding issuance of TCT No. 188251.13 On April 17, 1985, TDB sold the parcel of land to the petitioners and Spouses Jim and
Liberty Baluyot (Spouses Baluyot). Hence, TCT No. 188251 was cancelled and TCT No. 1882521 was issued in the names of the
petitioners and Spouses Baluyot. Meanwhile, the respondents continued possession of the subject lot. On June 16, 2000, the petitioners
instituted a complaint for ejectment, collection of shares and damages, against the respondents alleging that since Bayang is Juliana's
sister, they allowed the respondents to cultivate 2-ha portion of the subject property with the obligation to share the landowners 25% of
the harvest proceeds thereof.

The respondents' cultivation thereof was purportedly conditioned upon the payment to the petitioners of a rightful share in the produce.
Thus, when the respondents failed to fulfil their undertaking, the petitioners instituted an ejectment complaint against them. For her part,
Bayang averred that she and her late husband were the actual and registered co-owners of the subject property, which they inherited
from her father, together with the petitioners. Bayang denied having sold portions of their property to the petitioners and Zamora.

ISSUE:

Whether or not the Bayang is a co-owner since she inherited the land from her father and thus made the petitioners a trustee of the land
as co-owners?

RULING:

YES! Records show that the subject property was originally owned by Juliana and Bayang's father, Cleto Macayanan under Original
Certificate of Title No. 1665. "Pursuant to Article 1451 of the Civil Code, when land passes by succession to any person and he causes
the legal title to be put in the name of another, a trust is established by implication of law for the benefit of the true owner." Bayang, being
an heir and a co-owner, is thus entitled to the possession of the subject property. This was confirmed by the issuance of TCT No. 58439
in the names of Spouses Nicolas and Francisca for one-half share, Spouses Cornelio and Bayang for one-eighth share, Zamora for one-
fourth share, and the petitioners for one-eighth share.

Evidently, a co-ownership existed between the parties prior to the foreclosure and consolidation of title in favor of TDB and the subsequent
re-acquisition thereof by the petitioners. Coownership is a form of trust and every co-owner is a trustee for the others. Before the partition
of a land or thing held in common, no individual or co-owner can claim title to any definite portion thereof. All that the co-owner has is an
ideal or abstract quota proportionate share in the entire land or thing. Should a co-owner alienate or mortgage the co-owned property
itself, the 14 alienation or mortgage shall remain valid but only to the extent of the portion which may be allotted to him in the division
upon the termination of the co-ownership. In case of foreclosure, a sale would result in the transmission only of whatever rights the seller
had over of the thing sold. Indeed, a co-owner does not lose his part ownership of a co-owned property when his share is mortgaged by
another co-owner without the farmer's knowledge and consent as in the case at bar.

The mortgage of the inherited property is not binding against co-heirs who never benefited. As correctly emphasized by the CA, the
petitioners' right in the subject property is limited only to their share in the co-owned property. When the subject property was sold to and
consolidated in the name of TDB, the latter merely held the subject property in trust for the respondents. The rights of the respondents
as co-owners of the subject property were never alienated despite TDB's consolidation of ownership over the subject property.
 DELFIN VS. BACUD

FACTS:

On September 9, 1999, petitioners Delfin Tappa (Delfin) and Maria Tappa (Spouses Tappa) filed a complaint[6] for Quieting of Title,
Recovery of Possession and Damages (Complaint) against respondents Jose Bacud (Bacud),[7] Henry Calabazaron (Calabazaron), and
Vicente Malupeng (Malupeng).[8] The property subject of the complaint is a parcel of land identified as Lot No. 3341, Pls-793 with an
area of 21,879 square meters, located in Kongcong, Cabbo, Peñablanca, Cagayan (Lot No. 3341).[9]

In their complaint, Spouses Tappa alleged that they are the registered owners of Lot No. 3341, with OCT Title.

September 18, 1992, Delfin allegedly inherited Lot No. 3341 from his father, Lorenzo Tappa (Lorenzo). Spouses Tappa claimed that both
Delfin and Lorenzo were in open, continuous, notorious, exclusive possession of the lot since time immemorial

In their Answer, respondents Bacud, Calabazaron and Malupeng claimed that the original owner of Lot No. 3341 was Genaro Tappa
(Genaro) who had two children, Lorenzo and Irene. Upon Genaro's death, the property passed on to Lorenzo and Irene by operation of
law; and they became ipso facto co-owners of the property.

Respondents presented before the RTC a joint affidavit... stated that Genaro originally owned Lot No. 3341. It further stated that one-half
(1/2) of the property was owned by Lorenzo; but that the whole property was declared as his, only for taxation purposes.

Respondents started occupying their respective portions after the sale made to each of them. They continued to occupy them despite
several demands to vacate from Spouses Tappa.

Spouses Tappa claimed that the 1963 Affidavit was executed through force and intimidation.[23] Bacud and Malupeng denied this
allegation.[24]

The RTC ruled that there was no document in the hands of respondents as strong and persuasive as the title in the name of the Spouses
Tappa that will support respondents' claim of ownership. Respondents appealed to the CA

They alleged that Spouses Tappa committed fraud because they were not in possession of the lot since 1963, which possession was
required for an applicant for a free patent under the law. Respondents argued that the complaint should be dismissed because both
extinctive and acquisitive prescription have already set in.

They also argued that the action for quieting of title had already prescribed since the possession of Bacud and Malupeng started in 1963,
which fact was allegedly admitted by Spouses Tappa in their complaint.[40] Thus, Spouses Tappa had only until 1993 to file a complaint,
which they failed to do.

Ail respondents claimed that from the start of their possession, they (1) have paid real taxes on the lot, (2) have planted crops, and (3)
have continued to possess the lot in the concept of owners.[41]... respondents alleged that Spouses Tappa failed to prove their right over
the subject lot because they cannot rely on the certificate of title issued to them on September 18, 1992 by virtue of a free patent

The CA set aside the decision of the RTC and ruled in favor of respondents and explained that their possession over Lot No. 3341 already
ripened into ownership through acquisitive prescription.

A noted that Spouses Tappa acknowledged in their complaint that they have not been in possession of the lot, and that respondents have
been continuously occupying portions of it since 1963.

first requisite is absent because Spouses Tappa do not have a legal or an equitable title to or an interest in the property. The CA explained
that the free patent granted to Spouses Tappa produced no legal effect because Lot No. 3341 was a private land,... while Spouses Tappa
were able to obtain a free patent over the property, and were able to register it under the Torrens system, they have not become its
owners.

"[r]egistration has never been a mode of acquiring ownership over immovable property—it does not create title nor vest one but it simply
confirms a title already vested, rendering it forever indefeasible."

ISSUES:

Whether the CA erred in dismissing Spouses Tappa's complaint for quieting of title against respondents;[56]Whether the CA erred in not
finding that Spouses Tappa's certificate of title cannot be collaterally attacked in this case;[57] andWhether the CA erred in finding that
respondents have acquired the property through acquisitive prescription.[58]

RULING:

NO! For an action to quiet title to prosper, two indispensable requisites must concur, namely: (1) the plaintiff or complainant has a legal
or an equitable title to or interest in the real property subject of the action; and (2) the deed, claim, encumbrance or proceeding claimed
to be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal
efficacy. Spouses Tappa failed to meet these two requisites
We agree with the CA that at the time of the application for free patent, Lot No. 3341 had already become private land by virtue of the
open, continuous, exclusive, and notorious possession by respondents. Hence, Lot No. 3341 had been removed from the coverage of
the Public Land Act, which governs public patent applications.

Spouses Tappa also admitted in their complaint that sometime in 1963, Bacud and Malupeng started occupying portions of Lot No. 3341
and planted crops on the property, while Calabazaron did the same on another portion of the lot in the 1970's. The complaint stated
further that since 1963, the respondents "continuously occupied portion of the subject land."

Records also show that Spouses Tappa were aware of respondents' possession of the disputed portions of Lot No. 3341. They even
admitted such possession (since 1963) by respondents in their complaint filed in 1999.

A cloud....(deed, or contract) or record or claim or encumbrance or proceeding; (2) which is apparendy valid or effective; (3) but is, in truth
and in fact, invalid, ineffective, voidable, or unenforceable, or extinguished (or terminated) or barred by extinctive prescription; and (4)
and may be prejudicial to the title

1963 Affidavit however, was not proven to be, in fact, invalid, ineffective, voidable, or unenforceable, or extinguished (or terminated) or
barred by extinctive prescription. The CA correctly found that Spouses Tappa's claim of force and intimidation m the execution of the
1963 Affidavit was unsubstantiate.