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Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-24568             March 2, 1926

SISENANDO RIVERA, RUPERTA GONZALEZ, JULIAN PANLILIO and MARIA


RIVERA, petitioners,
vs.
THE HONORABLE MANUEL V. MORAN, Auxiliary Judge of First Instance of Tarlac,
THE DIRECTOR OF LANDS, ESTANISLAO GARCIA and RAFAEL LLORENTE, respondents.

Ariston I. Rivera for petitioner.


Attorney-General Jaranilla and Quintin Paredes for respondents.

OSTRAND, J.:

This is a petition for a writ of certiorari. The record shows that in cadastral case No. 9 of the Province
of Tarlac, the Court of First Instance in a decision dated September 16, 1922, ordered lots Nos.
1199, 1208, 1209, 1210, 1222, 1223, 1224, 1225 and 1230 registered in the names of Estanislao
Garcia and Rafael Llorente. Both the provincial fiscal of Tarlac and the Attorney-General,
representing the Director of Lands, filed motions for a new trial which are denied. A bill of exceptions
was also presented but was disapproved by the court on the ground that it had not been filed in time.

Subsequently, Rafael Llorente transferred his interest in the lots to Estanislao Garcia who on March
7, 1923, mortgaged the land to the petitioners herein for the sum of P10,691. The mortgage was
inscribed in the unregistered land register on April 10, 1923.

The meantime on February 15 1923 the Attorney-General presented a petition for review under
section 38 of the Land of Transportation Act, alleging that the adjudication by fraud consisting in
fraudulent alterations of the stenographic notes taken in the cadastral case.

On April 25, 1923, the Court of First Instance granted the petition for review, set aside the decision
of September 16, 1922, and ordered that the case be reopened and reset for a new trial. The case
was assigned for trial on June 15, 1923, but on motion of the respondents Garcia and Llorente
without objection too the jurisdiction of the court the trial was postponed until further notice.

On July 21, 1925, the herein petitioner, Sisenando Rivera, Ruperta Gonzalez, Julian Panlilio and
Maria Rivera filed a motion in the cadastral case alleging among other things that they had accepted
the mortgage hereinbefore mentioned on the strength of the decision of September 16, 1922; that
they were the holders of the mortgage as innocent third parties and in good faith; that by reason
thereof, the court had no jurisdiction to grant the petition for review under section 38; and they
therefore asked that the court declare itself without jurisdiction and desist from proceeding with the
retrial of the case. This motion was denied.

On August 1, 1925, the mortgagees filed the present petition in this court alleging that the Court of
First Instance was without jurisdiction to reopen the cadastral case for the following reasons:
(a) That no sufficient notice was given of the hearing of the petition for review filed on
February 15, 1923 and heard on the 21st of the same month.

(b) That the respondent the Director of Lands in his motion for reconsideration of the
decision rendered in the cadastral case alleged fraud on the part of Estanislao Garcia and
Rafael Llorente and therefore after having failed to appeal from the order denying said
motion the matter is res judicata and is thereby precluded from availing himself of the
remedy of a petition for review under article 38 of the Land Registration Act.

(c) That no final decree in the case having been issued, the petition for review was
presented prematurely.

(d) That in if the decision of September 16, 1922, is to be regard as a decree the petitioner
herein having acquired their interest in the land subsequent to said decision are innocent
parties and that therefore the remedy provided by section 38 is not available.

1. As to the first ground state the facts are in dispute but we think it has been shown
by a clear preponderance of evidence that the motion and notice of hearing was
served upon Mr. Vicente Francisco the attorney for Garcia and Llorente in the
cadastral case that said attorney refused to accept service on the ground that he had
nothing further to do with the case; and that thereupon copies of the motion and
notice of the hearing were forwarded by registered mail to Garcia and Llorente,
personally five days before the hearing. As Mr. Francisco was still the attorney of
record for Garcia and Llorente in the cadastral case, an offer of service upon him
might well in itself be considered a sufficient compliance with the rules of the Court of
First Instance. But in addition thereto it also appears that Garcia and Llorente, the
only respondents in the petition for review, appeared generally before the court
through their counsel on several occasions without questioning the jurisdiction of the
court and thereby impliedly waived their objections to such defects as there might
have been in the service of notice. The herein petitioners not being parties in the
cadastral case and not having acquired any interest in the land at the time the
petition for review was filed, were not legally entitles to notice.

2. The second ground upon which the petition is based is also of no substantial merit.
The petition for a review under section 38 is a remedy separate and distinct from a
motion for a new trial under section 145 of the Code of Civil Procedure and in our
opinion the right to the remedy is not affected by the denial of such a motion
irrespective of the grounds upon which it may have been presented.

3. The third ground for the present petition is perhaps, the most important point in the
case. It is conceded that no decree of registration has been entered and section 38
of the Land Registration Act provides that a petition for review of such a decree on
the grounds of fraud must be filed "within one year after entry of the decree." Giving
this provision a literal interpretation it may at first blush seen that the petition for
review cannot be presented until the final decree has been entered. But on further
reflection it is obvious that such could not have been the intention of the Legislature
and that what it meant would have been better expressed by stating that such
petitions must be presented before the expiration of one year from the entry of the
decree. Statutes must be given a reasonable construction and there can be no
possible reason for requiring the complaining party to wait until the final decree is
entered before arguing his claim for fraud. We therefore hold that a petition for review
under section 38, supra, may be filed at any time after the rendition of the court's
decision and before the expiration of one year from the entry of the final decree of
registration.

4. The contention that the petitioners must be regarded as innocent purchasers for
value within the meaning of the section 38 cannot be sustained. They acquired their
interest in the land before any final decree had been entered; the litigation was
therefore in effect still pending and to appear that they were aware of the fact. In
these circumstances they can hardly be considered innocent purchasers in good
faith. It is further to be observed at that time, the petitioner could have acquired no
interest valid as against third parties until their title thereto had been duly entered in
the Torrens register in the office of the register of deeds; section 59 of the Land of
Registration Act provides that "the act of registration shall be the operative act to
convey and affect the land." The inscription in the unregistered land register did not
materially improve the petitioner's situation; such inscriptions are without prejudice to
third parties with a better right (section 194 of the Administrative Code as amended
by Act No. 2837).

From what has been said, it follows that the court below did not exceed its jurisdiction in taking
cognizance of the petition for review and in reopening the case.

The petition for a writ of certiorari is therefore denied with the costs against the petitioners. So
ordered.

Avanceña, C. J., Street, Malcolm, Villamor, Johns, Romualdez, and Villa-Real, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 27449           September 10, 1927

CHUA PUA CHERMANOS, petitioner -appellant,


vs.
REGISTER OF DEEDS OF BATANGAS, respondent-appellee.

M. H. de Joya, Jose Mayo Librea and Claudio R. Sandoval for appellant.


Attorney-General Jaranilla for appellee.

STREET, J.:

This is an appeal from a ruling of the Judge of the fourth branch of the Court of First Instance of
Manila, in the exercise of the supervisory power conferred in section 200 of the Administrative Code,
sustaining the register of deeds of Batangas in refusing to record a sheriff's certificate showing that
certain property located in Lipa, Batangas, had been sold to the appellant at a sheriff's sale under
execution.

It appears that on April 3, 1922, the appellant, Chua Pua Hermanos, instituted a civil action in the
Court of First Instance of Batangas for the purpose of recovering a sum of money from the
defendant therein, one Jose H. Katigbak. Shortly thereafter the plaintiff in said action caused a writ
of attachment against the defendant to be placed in the hands of Carlos Ilustre, as provincial sheriff.
This attachment was levied, as was supposed, upon a house and lot located in the poblacion of
Lipa, Batangas, and more particularly described in the sheriff's return to the writ, the same being the
house in which Katigbak was then living. On June 11, 1926, a judgment was rendered in said civil
case in favor of the then plaintiff and present appellant, Chua Pua Hermanos, to recover of the
defendant Katigbak the sum of P13,912.37, with interest as prayed in the complaint. Upon said
judgment execution was issued on August 13, 1926, and levied upon the same property that had
been already attached. On September 4, 1926, the property thus levied was sold at public auction by
the sheriff to the appellant, as the only bidder at such sale, for the sum of P15,000. Pursuan to this
sale the sheriff issued his certificate of sale in due form to Chua Pua Hermanos, who on September
11, 1926, presented said certificate to the register of deeds of the province for registration.

The objection which the register of deeds has raised to the placing of this certificate of sale on
record has its basis in the following facts: After the attachment had been levied, as was supposed, in
the action instituted by Chua Pua Hermanos, another creditor of Katigbak, namely, Samuel Murray,
Admr., also commenced a civil action against Katigbak in the Court of First Instance of Manila to
recover a large sum of money (Murray, administrator of James Mitchel, deceased, vs. Jose H.
Katigbak); and in due time judgment was entered in favor of Murray to recover the amount sued for.
Execution for the enforcement of this judgment was issued forthwith, and on July 15, 1926, the same
was levied on all the right, title, and interest which the judgment debtor Katigbak had or might have
in the same property which had already been attached by Chua Pua Hermanos. Thereafter said
property was sold at public auction, on August 21, 1926, issued his certificate of sale to Murray,
which certificate was duly presented to the register of deeds and by him recorded.

It is thus apparent that, although Murray, Admr., began his action against Katigbak in the Court of
First Instance of Manila after the action had been begun by Chua Pua Hermanos in the Court of First
Instance of Batangas, nevertheless Murray succeeded in obtaining final judgment before final
judgment had been entered in favor of Chua Pua Hermanos. Furthermore, proceedings for the
execution of the first judgment were brought to their consummation by Murray, and the sheriff's
certificate of sale to him was presented to the register of deeds, before the similar steps had been
accomplished by Chua Pua Hermanos.

But reliance is place, by Chua Pua Hermanos, upon the lien of his attachment; and if that lien in fact
existed, there can be no doubt that, under the law, such lien would be superior to the right acquired
by Murray, who is simple execution creditor under judgment rendered subsequent to the date of the
attachment (Kuenzle & Streiff vs. Villanueva, 41 Phil., 611). But the efficacy of the lien is challenged
upon the ground that the attachment was not lawfully effected. This criticism is in our opinion well
founded; for the return of the sheriff, telling how the attachment was effected in this case, shows that
no copy of the order of attachment was filed with the register of deeds. Under section 429 of the
Code of Civil Procedure the leaving of such copy with the register of deeds, with a description of the
property and certification of notice to the judgment debtor, is essential to the effectuation of an
attachment. Where this step is not taken the attachment is necessarily ineffectual. It is therefore
apparent that, so far as appears in this record, the attachment lien in favor of Chua Pua Hermanos is
imaginary. The case before us must therefore be considered as one where two judgment creditors
are competing in their efforts to reach a single piece of property by simple writs of execution.

In providing a scheme for the noting or recording of attachments and execution sales the law intends
that there shall be a public repository of information where persons interested in the state of titles to
real property can discover whether attachments have been levied or execution sale effected. These
provisions apply to all property, whether registered under some existing system of registration or not,
though of course the steps to be taken by the register differ somewhat according as to whether the
property is registered under one system or another or not registered at all. In the case before us the
property in question has not heretofore, so far as appears, been admitted to registration under either
of the two systems for the registration of real property prevailing in these Islands. It therefore has the
status merely of unregistered property.

In Garcia Sanchez vs. Rosauro (40 Phil., 231), we held that the register of deeds must record a
sheriff's certificate of sale; and in Williams vs. Suner (49 Phil., 534), it was held, with reference to
unregistered property, that until separate books shall be provided especially for noting and recording
of instruments executed by the public officials, the registration of such instruments must be effected
by noting and recording them in the books ordinarily used for the registration of instruments relating
to unregistered property. In the last named case it was pointed out that the conditions prescribed in
section 194 of the Administrative Code, as amended by Act No. 2837, are not applicable to the deed
of a sheriff conveying land sold by the sheriff under execution. Moreover, it has been held by this
court that the fact that the property sold under execution is found to be already registered in the
name of some other person than the execution debtor is no obstacle to the registration of the
sheriff's deed (Consulta No. 441, Smith, Bell & Co. vs. Register of Deeds of Leyte, 48 Phil., 656).
These decision are decisive of the present case, and the certificate of sale presented to the register
by Chua Pua Hermanos should have been recorded.

The only feature found in the present case consists in the fact that, when the certificate of sale of the
appellant was presented to the registrar, there was already on record the similar certificate of sale
presented by the rival creditor. But this circumstance is of no moment. The register of deeds seems
to have supposed that inasmuch as the two instruments were apparently inconsistent, the
appellant's certificate could not be recorded, since there already appeared in the register a valid
previous entry which might be affected by the registration of the instrument last offered for
registrations, of which this is one, expressed in the amendatory Act No. 2837, are not applicable to
instruments of this character.
Furthermore, the register of deeds in this case was in error in supposing that he exercises a quasi-
judicial power in determining the rights of persons under sheriff's deeds. His duty with respect to the
notation or recording of these instruments, so far at least as relates to unregistered property, is
ministerial only. The noting of these instruments of record adds nothing to their intrinsic effect, such
step being devised only as a means of notification of the claimants right to the public, in accordance
with the American system of registration. If, for instance, is should transpire that there was some
fatal defect in the execution of Murray's judgment which would have rendered the sale to Murray
invalid without the registration of the certificate of sale, such defect has not been cured by the
recording of the certificate.

Again, there can be not doubt of the right of a junior judgment creditor to levy upon property that has
already been levied upon, subject of course to the efficacy of the prior execution; and the duty of
passing upon the competitive rights of two judgment creditors pertains to the courts when such rights
are drawn in question in proper proceedings.

For the reasons stated the order appealed from must be reversed, and the respondent register of
deeds is directed to receive and record the appellant's certificate of sale, upon tender by the
appellant of the proper fee incident to the service to be rendered. So ordered, without costs.

Avanceña, C.J., Johnson, Villamor, Johns and Romualdez, JJ., concur.


Republic of the Philippines
SUPREME COURT
Manila

G.R. No. 185477               December 4, 2009

HERMINIO M. GUTIERREZ and ELISA A. GUTIERREZ-MAYUGA, Petitioners,


vs.
FLORA MENDOZA-PLAZA and PONCIANO HERNANDEZ, Respondents.

DECISION

CHICO-NAZARIO, J.:

This Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assails the Amended
Decision2 dated 26 September 2008 of the Court of Appeals in CA-G.R. CV No. 89555, which
recalled and set aside its earlier Decision3 dated 2 June 2008. The prior Decision of the appellate
court reversed the Decision4 dated 15 June 2007 of the Regional Trial Court (RTC) of Tanauan City,
Branch 83, in Civil Case No. 06-04-2929, which pronounced that herein respondents Flora Mendoza
and Ponciano Hernandez (respondents) were the lawful owners of the property subject of this case.

As culled from the records, the antecedents of the case are as follows:

Ignacio Mendoza is the common ascendant of the parties herein. Ignacio was first married to Juana
Jaurigue,5 to whom Dominador and Victoria were born. Petitioner Herminio M. Gutierrez
(Herminio)6 is the son of Victoria, and petitioner Elisa A. Gutierrez-Mayuga (Elisa) 7 is the daughter of
Herminio.

After the death of Juana in 1913, Ignacio married Ignacia Jaurigue, the younger sister of Juana. Out
of this second marriage, five children were born, namely: Crisostomo, Flora, Felisa, Mercedes and
Constancia. As aforesaid, respondent Flora Mendoza-Plaza (Flora) is the daughter of Ignacia, while
respondent Ponciano Hernandez (Ponciano) is the son of Felisa.

The parcel of land subject of this case (subject property) is an unregistered land located in Barangay
Sta. Clara, Sto. Tomas, Batangas, containing an area of 446 square meters, more or less.

On 25 March 1916, Ignacio acquired the subject property by way of purchase from Luis Custodio for
₱200.00, which sale was contained in a notarized document entitled Escritura Publica. 8

Thereafter, on 8 March 1940, Ignacio executed a deed of donation inter vivos, 9 whereby the subject
property was donated to the children whom he begot with Ignacia, his second wife. Ignacia accepted
the donation in the same instrument on behalf of her children. Dominador and Victoria were also
signatories to the deed of donation inter vivos as instrumental witnesses. The deed was likewise
duly notarized, but the same was not recorded in the Registry of Deeds.

Subsequently, on 27 April 2006, respondents filed a Complaint for Accion Reivindicatoria, Publiciana
and Quieting of Title against petitioners in the RTC of Tanauan City, which was docketed as Civil
Case No. 06-04-2929. Respondents alleged that after the execution of the deed of donation inter
vivos, the subject property was assigned to Flora and her sister Felisa, who then possessed and
occupied the same as owners. Ponciano took over and exercised the rights of his mother Felisa after
the latter died in 1988. On or about late January or early February of 2006, petitioners took
possession of the southern portion of the subject property and constructed a house of strong
materials therein, despite the vigorous objection and opposition of the respondents. As the parties
were close relatives, respondents exerted efforts to compromise and amicably settle the case, but
petitioners refused. Respondents prayed, inter alia, that they be declared the true and rightful
owners of the subject land; petitioners be directed to demolish and remove the house of strong
materials, which they built in bad faith; and petitioners be ordered to pay attorney’s fees, expenses
of litigation, damages and judicial costs.

Petitioners accordingly denied the above material averments in their Answer, 10 asserting that Ignacio
and his first wife, Juana, had been in possession of the subject property as early as 1900. After the
death of Juana, Dominador, Victoria and Ignacio took over possession of the subject property. When
Dominador and Victoria died in 1940 and 1943, respectively, their heirs, including petitioners,
occupied and possessed the subject property openly, peacefully and publicly. Petitioners likewise
disputed the genuineness and authenticity of the deed of donation inter vivos, considering that for
more than 65 years the said document was not registered with the office of the Register of Deeds to
cause its transfer to respondents. Respondents’ presence on and occupancy of a portion of the
subject property were allegedly a mere tolerance on the part of petitioners. Thus, the title and rights
of petitioners over the subject property were absolute and legal by virtue of succession.

On 15 June 2007, the RTC rendered its Decision in favor of respondents, the dispositive portion of
which provides:

WHEREFORE, judgment is rendered in favor of the [respondents] and against [petitioners]:

1. Pronouncing and confirming that the [respondents] are the lawful, true and rightful owners
of the land described in paragraph 4 of the complaint [subject property], and hereby remove
the cloud and quiet their title thereto:

2. Ordering the [petitioners] to refrain from disturbing in whatever manner the ownership and
possession of the [respondents] over the land subject matter of this litigation;

3. Pronouncing [petitioners] to have lost the house of strong and concrete materials which
they built in bad faith on the land of the [respondents] without right to indemnity, and ordering
the [petitioners] to demolish and remove the said house from the [respondents’] land within
thirty (30) days from the date this judgment becomes final at their own expense and
thereafter vacate and restore to the [respondents] possession of the portion of the land
which the [petitioners] have occupied.

4. Ordering the [petitioners] to pay [respondent] Ponciano Hernandez the sum of ₱50,000.00
for moral damages, and another sum of ₱20,000.00 to both [respondents] for attorney’s fees.

5. Plus the costs assessed against the [petitioners]. 11

Principally, the RTC relied on the deed of donation inter vivos in awarding the subject property to
respondents. The same was properly identified and described in the testimony of Mercedes
Mendoza, one of the daughters of Ignacio by his second marriage. The deed was also a notarized
document, which was executed with all the formal requirements of the law. Thus, the recitals
contained therein were presumed to be true and authentic, which presumption the petitioners failed
to overcome with clear, convincing, overwhelming and more than merely preponderant evidence.
The RTC also ruled that the deed of donation inter vivos was an ancient document, 12 having been
executed on 8 March 1940 and being clearly more than thirty (30) years old. The deed was in the
proper custody of respondent Ponciano who acquired the same from his mother Felisa, before the
latter’s death. On its face, the deed was free from any alterations, interlineations, or erasures of a
material character, or any circumstance that may generate suspicion of its authenticity. The
certificate of the Clerk of Court of Batangas City offered by petitioners, stating that the office had no
available records/documents notarized by the notary public who signed the deed of donation inter
vivos, did not rule out the authenticity of the said deed. It did not follow that the deed was also
inexistent in another government depositories of ancient documents.

Moreover, the RTC declared petitioners to be in bad faith in building a house of strong materials on a
portion of the subject property. The respondents strongly opposed the construction from the start,
given that the occupation and possession by the petitioners were merely tolerated.

Petitioners filed an appeal with the Court of Appeals, which was docketed as CA-G.R. CV No.
89555.

On 2 June 2008, the Court of Appeals promulgated a Decision, reversing the ruling of the RTC,
ratiocinating in this wise:

It is undisputed that the subject property is an unregistered land over which both parties, who are
descendants of Ignacio Mendoza, claim ownership. [Respondents] claim ownership by virtue of a
donation inter vivos, allegedly executed in 1940 by Ignacio in favor of Ignacia, and possession
thereof. On the other hand, [petitioners] claim that they are owners of a portion of the property by
acquisitive possession. Both parties presented receipts proving that they have been paying realty
taxes on the property. Thus, the controversy boils down to the examination of the evidence
presented.

The RTC herein relied heavily on the donation inter vivos, Exh. "B" dated March 8, 1940, allegedly
executed by Ignacio Mendoza in favor of [his children with his second wife Ignacia], which was
acknowledged by Ignacia in the same instrument x x x. Reliance on Exh. "B", however, is flawed. It
must be noted that the property subject of controversy is an unregistered land, and the parties
therein are [the children of Ignacio with his second wife] and Ignacio Mendoza. [Petitioners] are
strangers to the instrument. Thus, while Exh. "B" is valid between Ignacio Mendoza and
[respondents], the same cannot affect third parties such as [petitioners], unless the same is
registered in the manner provided under Section 194 of Act No. 2711, effective March 10, 1917, as
amended by Act No. 2837 and later by Act No. 3344, which states:

"Sec. 194. Recording of instruments or deeds relating to real estate not registered under Act
Numbered Four Hundred and Ninety-Six or under the Spanish Mortgage Law. – No instrument or
deed establishing, transmitting, acknowledging, modifying or extinguishing rights with respect to real
estate not registered under the provisions of Act Numbered Four Hundred and Ninety-Six entitled
"The Land Registration Act," and its amendments, or under the Spanish Mortgage Law, shall be
valid, except as between the parties thereto, until such instrument or deed has been registered x x x
in the office of the register of deeds for the province or city where the real estate lies.

xxxx

The above provision of the law has been reiterated in Section 113 of Presidential Decree No. 1529,
as amended, which states:

"Sec. 113. Recording of instruments relating to unregistered lands. – No deed, conveyance,


mortgage, lease or other voluntary instrument affecting land not registered under the Torrens system
shall be valid, except as between the parties thereto, unless such instrument shall have been
recorded in the manner herein prescribed in the office of the Register of Deeds for the province or
city where the land lies.

xxxx

A careful review of the records shows that Exh. "B", purporting to be a deed of donation, was not
registered at all. Apropos, the [petitioners], being third parties thereto, are not bound by the
transmittal of rights from Ignacio Mendoza to the [respondents] x x x.

Setting aside Exh. "B", the pieces of evidence left are the tax declarations presented during the trial.
However, it is an established jurisprudence that tax declarations and tax receipts are not conclusive
evidence of ownership x x x. "In the absence of actual public and adverse possession, the
declaration of the land for tax purposes does not prove ownership" x x x. Further examination of the
tax declarations x x x show that both parties have been paying realty taxes thereon in the name of
Ignacio Mendoza. Likewise, while the parties rely on the tax receipts and tax declarations coupled
with the assertions of adverse possession, these do not indicate that they own the same because
the property was not declared in their names. x x x.13 (Emphases ours.)

The Court of Appeals, thus, decreed:

IN VIEW OF THE FOREGOING, the instant appeal is GRANTED. The Decision of the Regional Trial
Court (RTC) dated June 15, 2007, promulgated by Branch 83, City of Tanuan, Batangas, in Civil
Case No. 06-04-2929, is hereby REVERSED and SET ASIDE, and a new one entered DISMISSING
the complaint in Civil Case No. 06-04-2929. No cost.14

Respondents forthwith filed a Motion for Reconsideration 15 on the above Decision, contending, inter
alia, that where a party has knowledge of a prior existing interest which was unregistered at the time
he acquired a right to the same land, his knowledge of that prior unregistered interest has the effect
of registration as to him. The knowledge of Victoria, an instrumental witness to the deed of donation
inter vivos, of the existing prior interest of the heirs of Ignacio by his second marriage is deemed in
law to be knowledge of the petitioners.

On 26 September 2008, the Court of Appeals promulgated an Amended Decision, 16 setting aside its
earlier Decision, holding that:

After a careful analysis of the circumstances of this case, We find merit in the arguments of the
plaintiff-appellees.

xxxx

To clarify, as a general rule, "no deed, conveyance, mortgage, lease or other voluntary instrument
affecting land not registered under the Torrens system shall be valid, except as between the parties
thereto, unless such instrument shall have been recorded in the manner herein prescribed in the
office of the Register of Deeds for the province or city where the land lies" (Section 113, Presidential
Decree No. 1529, as amended). This means that any instrument dealing with unregistered land shall
not bind third persons, unless the instrument is registered in the Office of the Register of Deeds
albeit valid as between the parties therein.

As correctly pointed out by the [respondents], the law has 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 of knowledge thereof" (Heirs of Eduardo Manlapat v. Court of
Appeals, supra, p. 426, citing Peña, Registration of Land Titles and Deeds, 1994 ed. p. 28.)

xxxx

Appropriately, the proper exception applicable in this case to bind the [petitioners] to the donation
inter vivos should be under the second exception, that is, being heirs of Ignacio Mendoza. It should
be stressed that the owner of the unregistered property is Ignacio Mendoza and that both parties are
his successors. [Respondents] are his successors by his second marriage, while [petitioners] are his
successors by his first marriage. Thus, being his heirs and successors, the [petitioners] must be
bound for they are considered mere extension of the grantor (Peña, Registration of Land Titles and
Deeds, p. 28).

IN VIEW OF ALL THE FOREGOING, the instant motion for reconsideration is hereby GRANTED.
This Court’s Decision promulgated on June 2, 2008 is RECALLED AND SET ASIDE, and a new one
entered AFFIRMING the Regional Trial Court’s Decision dated June 15, 2007, in Civil Case No. 06-
04-2929. No Cost. (Emphases ours.)

Petitioners filed a Motion for Reconsideration17 and a Supplement to the Motion for


Reconsideration,18 but the Court of Appeals was not persuaded. On 21 November 2008, the
appellate court issued a Resolution,19 finding that:

A careful review of the motion for reconsideration shows that the issues raised therein have been
already been (sic) clarified in and by Our Amended Decision. As to the arguments raised in the
Supplement, i.e., that the [petitioners’] legitimes are prejudiced, the same must likewise be denied
for having been raised for the first time at this stage of the appeal in a motion for reconsideration. In
any case, the [petitioners] are not without recourse regarding their alleged prejudiced right to their
legitimes.

IN VIEW OF THE FOREGOING, the instant motion for reconsideration and Supplement are
DENIED.

Petitioners filed the instant Petition for Review on Certiorari, imploring the Court to take another
judicious look at their case, in their hope of securing a more favorable judgment.

Petitioners insist on disputing the authenticity of the deed of donation inter vivos in favor of the
children of Ignacio and his second wife, Ignacia. Not only was the deed belatedly introduced by
Ponciano; the same is also fatally invalid in view of its non-registration as prescribed by law.
Supposedly, the said deed is likewise inherently flawed substantively, because its provisions totally
exclude petitioners from participating in the sharing of the property subject of the case, thereby
impairing their legitimes. Furthermore, petitioners claim that they have occupied and possessed a
portion of the subject property in their own right and in the concept of owners, thus acquiring the
same by prescription, if not laches.

We deny the petition.

Petitioners seem to have overlooked the fact that the deed of donation inter vivos is a notarized
document. According to Section 30, Rule 132 of the Rules of Court, "every instrument duly
acknowledged or proved and certified as provided by law, may be presented in evidence without
further proof, the certificate of acknowledgment being a prima facie evidence of the execution of the
instrument or document involved." A notarial document is evidence of the facts expressed
therein.20 A notarized document enjoys a prima facie presumption of authenticity and due execution.
Clear and convincing evidence must be presented to overcome such legal presumption. 21

In the instant case, petitioners failed to adduce sufficient evidence to overcome the above
presumption. The only evidence offered by petitioners to impugn the deed of donation inter vivos
was the testimony22 of petitioner Elisa, wherein she stated that the contents of the deed could not
have been true, given that petitioners inherited the subject property from Victoria Mendoza, the
daughter of Ignacio with his first wife Juana. Such testimony was utterly lacking. Furthermore, the
Court finds nothing wrong and/or unusual in the fact that the deed of donation inter vivos was
produced and made known to petitioners only in the early part of the year 2006 or more than sixty
(60) years after its execution. Understandably, it was only when petitioners claimed ownership of a
portion of the subject property that respondents were compelled to assert their own title to the
property, which they traced to the deed of donation inter vivos.

The non-registration of the aforesaid deed does not also affect the validity thereof. Registration is not
a requirement for validity of the contract as between the parties, for the effect of registration serves
chiefly to bind third persons. 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. 23 The
conveyance of unregistered land 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. As held by the Court of Appeals, petitioners are the heirs of Ignacio, the grantor of the
subject property. Thus, they are bound by the provisions of the deed of donation inter vivos.

Anent the argument that the donation inter vivos impaired the legitimes of petitioners, the Court
deems it unnecessary to discuss the same. Said argument was indeed only raised for the first time
on appeal to the Court of Appeals and in the Supplement to the Motion for Reconsideration of the
appellate court’s Amended Decision at that. Points of law, theories, issues, and arguments not
brought to the attention of the lower court need not be, and ordinarily will not be, considered by a
reviewing court, as these cannot be raised for the first time at such late stage. Basic considerations
of due process underlie this rule.24

Petitioners’ claim of prescription in their favor likewise deserves scant consideration. Unlike
respondents who can trace their title to the subject property by virtue of the deed of donation inter
vivos, petitioners cannot adequately explain how they entered and possessed the subject property to
become owners thereof. More importantly, petitioners cannot even rebut the testimony 25 of Mercedes
Mendoza that she was present when Victoria entreated their father Ignacio to allow her (Victoria) to
construct a house on a portion of the subject property. Ignacio gave permission to Victoria, but only
on the condition that she would have to leave when his children by his second marriage would need
the property. Thus, the possession of the property by Victoria was only by virtue of the mere
tolerance thereof by Ignacio and the children of his second marriage. As such, the alleged
possession by petitioners, which they claim to trace to Victoria, was also by mere tolerance on the
part of respondents.

Prescription as a mode of acquisition requires the existence of the following: (1) capacity to acquire
by prescription; (2) a thing capable of acquisition by prescription; (3) possession of the thing under
certain conditions; and (4) lapse of time provided by law. Acquisitive prescription may either be
ordinary, in which case the possession must be in good faith and with just title; or extraordinary, in
which case there is neither good faith nor just title. In either case, there has to be possession, which
must be in the concept of an owner, public, peaceful and uninterrupted. 26 As a corollary, Article 1119
of the Civil Code provides that:
Art. 1119. Acts of possessory character executed in virtue of license or by mere tolerance of the
owner shall not be available for the purposes of possession. 1avvphi1

Acts of possessory character performed by one who holds by mere tolerance of the owner are
clearly not en concepto de dueño, and such possessory acts, no matter how long so continued, do
not start the running of the period of prescription.

In light of the foregoing, petitioners cannot claim any better right to the subject property as against
respondents.

WHEREFORE, the Petition for Review on Certiorari under Rule 45 of the Rules of Court is DENIED.
The Amended Decision dated 26 September 2008 of the Court of Appeals in CA-G.R. CV No. 89555
is hereby AFFIRMED. No costs.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:

RENATO C. CORONA
Associate Justice
Chairperson

PRESBITERO J. VELASCO, JR. ANTONIO EDUARDO B. NACHURA


Associate Justice Associate Justice

DIOSDADO M. PERALTA
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA
Associate Justice
Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, it
is hereby certified that the conclusions in the above Decision were reached in consultation before
the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO
Chief Justice