Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 172611               July 9, 2010

SPS. FEDERICO VALENZUELA and LUZ BUENA-VALENZUELA Petitioners,

vs.
SPS. JOSE MANO, JR. and ROSANNA REYES-MANO Respondents.

DECISION

DEL CASTILLO, J.:

The rule that a Torrens Certificate of Title is conclusive evidence of ownership of the land described
therein1 does not apply when such land, or a portion thereof, was illegally or erroneously included in
said title.

This Petition for Review on Certiorari2 assails the Decision3 dated January 16, 2006 of the Court of
Appeals (CA) in CA-G.R. CV No. 83577, which reversed and set aside the Decision 4 dated March
10, 2004 issued by the Regional Trial Court (RTC) of Bulacan, Branch 14, in Civil Case No. 1065-M-
99. Also assailed is the Resolution 5 dated May 3, 2006 denying the motion for reconsideration.

Factual Antecedents

Petitioner Federico Valenzuela (Federico) is the son of Andres Valenzuela (Andres) who was the
owner and possessor of a parcel of land with an area of 938 square meters, more or less, located at
Dampol 1st, Pulilan, Bulacan. The property was declared in the name of Andres under Declaration of
Real Property No. 71876 which described the property as follows:

Location: Dampol 1st, Pulilan, Bulacan

Boundaries:
North: Camino Provincial
East: Felisa Calderon
South: Aurea Caleon
West: Benita Bailon
Kind of Land: Residential Lot
Area: 938 square meters

Andres died on October 10, 1959, and the possession of said property was transferred to Federico.
On August 5, 1980, a document denominated as Pagmamana sa Labas ng Hukuman at
Pagpaparaya o Pagkakaloob7 was executed by the heirs of Andres who waived all their rights to the
property in favor of Federico.

Meanwhile, on February 7, 1991, a Deed of Conditional Sale 8 was executed between Feliciano
Geronimo (Feliciano) and herein respondent Jose Mano, Jr. (Jose), wherein the former agreed to
sell to the latter a 2,056-square meter parcel of land located at Dampol 1st, Pulilan, Bulacan. The
corresponding Deed of Sale9 was subsequently executed in March 1991.

On March 4, 1992,10 Jose applied for a Free Patent and on April 10, 1992, Original Certificate of Title
(OCT) No. P-35111 was issued in his name. This time, the property was indicated as covering an
area of 2,739 square meters.

Sometime in 1997, Federico declared in his name under Tax Declaration No. 97-19005-01105 12 the
property covered by Declaration of Real Property No. 7187 in the name of Andres.

Subsequently, Jose sold a portion of the land covered by OCT No. P-351 to Roberto S.
Balingcongan (Balingcongan). On January 8, 1998, Transfer Certificate of Title (TCT) No. T-
11286513 was issued in the name of Balingcongan covering 2,292 square meters. On the same date,
TCT No. T-11286414 was also issued in the name of Jose covering 447 square meters.

Federico transferred his residence to Malabon and so he left the care of the property to his nephew,
Vicente Joson (Vicente). Sometime in 1999, Federico instructed Vicente to construct a perimeter
fence on his property but he was prevented by Jose, claiming that the 447 square meters was his
property as reflected in his TCT No. T-112864. On the other hand, Federico is claiming it as part of
the property he inherited from his father, Andres.

When the matter could not be settled amicably, the petitioners lodged a Complaint 15 for Annulment of
Title and/or Reconveyance, Damages with the RTC of Malolos, Bulacan. The case was set for pre-
trial conference16 on March 27, 2000. Thereafter, trial ensued.

Ruling of the Regional Trial Court

The RTC found that even before Jose purchased the 2,056 square meters lot from Feliciano on
February 7, 1991, he had already caused the survey of a 2,739-square meter lot on January 30,
1991. The document of sale expressly stated that the area sold was 2,056 square meters and that
the same is located in Dampol 1st, Pulilan, Bulacan. However, in March, 1991, Jose filed his
application for free patent using the survey on the 2,739 square meters. He also indicated therein
that the property is located in Dampol II, Pulilan, Bulacan and that the land described and applied for
is not claimed or occupied by any person. He further claimed that the property was public land which
was first occupied and cultivated by Feliciano.

Thus, the trial court found that the preponderance of evidence showed that the disputed area of 447
square meters rightfully belongs to Federico. This was a part of Lot No. 1306 originally owned and
possessed by Andres as identified and described in the Declaration of Real Property No. 7187.

On March 10, 2004, the trial court rendered a Decision, the decretal portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants, as
follows:

1. Ordering the defendants to return to the plaintiffs the disputed portion consisting of 447
square meters and now covered by TCT No. T-112864 of the Registry of Deeds of Bulacan,
in the name of Jose Mano, Jr. married to Rosanna Reyes;

2. Ordering defendants to immediately demolish and/or remove the concrete fence erected
on the premises;
 3. Ordering the defendants to pay plaintiffs the amounts of ₱50,000.00 for moral damages;
₱30,000.00 for exemplary damages and ₱50,000.00 for attorney’s fees;

4. Ordering the Register of Deeds of Bulacan to cancel said TCT No. T-112864 of the
Registry of Deeds of Bulacan;

5. Defendants to pay costs of this suit.

SO ORDERED.17

Ruling of the Court of Appeals

Respondents went to the CA on appeal. In a Decision18 dated January 16, 2006, the CA reversed
and set aside the ruling of the RTC and dismissed the complaint. According to the CA, respondents
satisfactorily proved their ownership over the disputed property. The Free Patent No. 031418-92-463
and the TCT No. T-112864, as well as the tax declaration offered in evidence by respondents are
more convincing than the evidence presented by the petitioners. Also, petitioners failed to prove by
clear and convincing evidence the fact of fraud allegedly committed by Jose in obtaining title to the
disputed property.

The Motion for Reconsideration filed by petitioners was denied by the CA through its
Resolution19 dated May 3, 2006.

Issues

Hence, this petition raising the following issues:

I.

Whether the CA gravely abused its discretion when it declared that petitioners were unable to prove
ownership of the disputed portion notwithstanding evidence introduced and admitted.

II.

Whether the CA gravely abused its discretion, amounting to lack of jurisdiction, when it reversed the
decision of the lower court finding fraud committed by the respondent in obtaining title to the property
in question.

Simply put, the issues raised are: (1) Did the CA err in holding that the respondents are the owners
of the disputed 447 square meter property? and (2) Did the CA err in finding that no fraud was
committed by the respondents in obtaining title to the disputed property?

Petitioners’ Arguments

Petitioners argue that the CA erred in not holding that they are the rightful owners as Federico
inherited the property from his father Andres, who died on October 10, 1959. Jose purchased a
parcel of land from Feliciano measuring only 2,056 square meters but his application for free patent
indicated a lot with a total area of 2,739 square meters. Moreover, he indicated the same to be
located at Dampol II, Pulilan, Bulacan; however, it is actually located at Dampol 1st. He also
declared that the said property is not claimed or occupied by any person but the truth is that the 447
square meters is owned and possessed by Federico.
Respondents’ Arguments

Respondents, on the other hand, contend that they have a better title to the property. The certificate
of title issued in their name is an absolute and indefeasible evidence of ownership of the property. It
is binding and conclusive upon the whole world. There was also no proof or evidence presented to
support the alleged fraud on the part of Jose, nor was there any allegation of specific acts committed
by him which constitute fraud.

Our Ruling

After serious consideration, we find petitioners’ arguments to be meritorious.

There is preponderance of evidence that Federico is the owner of the disputed property.

We rule that Federico is the owner of the disputed 447 square meter lot. The Deed of Conditional
Sale described the property purchased by Jose as follows:

A part of parcel of land (T.D. No. 14312) situated at Dampol 1st, Pulilan, Bulacan. Bounded on the
North- Lot 6225; East- Lot 1306 & 1311; South- Lot 1307 and 1308 and West- Lot 1304 &
1299. Containing an area of Two Thousand Fifty Six (2,056) square meters, more or less.
(Bulacan)."

Feliciano sold a portion of Lot 1305 to Jose. After the sale was made, a Sketch/Special Plan 20 was
prepared by Geodetic Engineer Fortunato E. Chavez. It is clear from such document that Lot 1305-A
representing the upper portion with an area of 1,112 square meters was retained by Feliciano and
what was sold was the lower portion thereof which became Lot No. 1305-B with a total area of 2,292
square meters. This exceeds the area of 2,056 square meters indicated in the above sale
transaction.

In another Sketch/Special Plan21 prepared by Geodetic Engineer Norberto C. Chavez, it is shown

that Lot No. 10176-B with an area of 2,292 square meters with a right of way going to Camino
Provincial Highway was the one sold to Jose and which was also sold by him to the Balingcongan
spouses. This is also known as Lot No. 1305-B. TCT No. T-112865 was issued in the name of the
spouses Balingcongan. Lot No. 10175 which represents the upper portion of Lot No. 1305 was
retained by Feliciano. This is also known as Lot No. 1305-A. However, what is surprising is that the
said plan showed that Lot No. 10176-A with an area of 447 square meters had been made to appear
as part of the lot sold by Feliciano to Jose. TCT No. T-112864 was issued in the name of Jose. If
indeed this disputed area is part of Lot No. 1305 then it should have been part of Lot No. 1305-A
which was retained by Feliciano as it is at the East side of the said property.

Moreover, during the ocular inspection, 22 it was observed that all the neighboring lots are either
square or rectangle. There is an old fence, measuring about 40 meters long (abutting the newly
constructed fence), which bounds the true and actual area purchased by Jose. Thus, if the old fence
is followed, the land purchased would either be square or rectangular like the adjoining lots.
However, if the disputed 447 square meters would be included in the land purchased by Jose, the
same would slant remarkably to the right, to the extent of covering the entire area fronting the
provincial road, which as per tax declaration of Federico, is the boundary of his land on the north.

Furthermore, Feliciano, the owner of Lot No. 1305 from whom Jose acquired the property through
sale, testified that his lot is only about 2,000 square meters and that Andres owns the adjoining lot
which is enclosed by a fence. Part of his testimony is copied verbatim to wit:
 ATTY. NATIVIDAD:

Q. But before they caused the measuring of the lot in question, do you have any idea how
much is the area of the lot?

A. About 2,000 plus, sir.

Q. This property measuring about 2,000 plus, as you mentioned a while ago before it was
surveyed by them, who is the present owner of this property?

A. Jose Mano, sir.

Q. How did Jose Mano become the owner of the property?

A. I sold it to him in 1991, sir.

xxxx

Q. Mr. Geronimo, I withdraw the manifestation.

May we further request that the description of the land indicated in the first page thereof
particularly the boundary and the area be bracketed and be marked as Exhibit D-3, your
Honor.

Do you know your boundary owners of this lot located at Dampol 1st, Pulilan, Bulacan?

A. Teresa and Andres Valenzuela, sir.

Q. Who else if you know?

A. It is all that I could remember of, sir.

Q. At the time that the property was acquired from you by Jose Mano or by the defendants,
do you have any fence erected on your property?

A. None, sir. The adjacent lot has, sir.

COURT:

On all sides?

A. On Teresa and Andres Valenzuela’s side, sir.

Q. They were fenced?

A. Yes, there is, sir. 23

The testimony of Feliciano from whom Jose purchased the property coincides with the observation
made during the ocular inspection conducted by the RTC that there is an old fence, measuring about
40 meters which encloses the true and actual area purchased by Jose. Feliciano retained the upper
portion of Lot No. 1305 which eventually became Lot No. 1305-A because it is along the national
highway. The disputed 447 square meters property is located at the eastern side of Lot No. 1305-A.
He gave Jose a right of way at the western side24 of the lot he retained for himself. This supports the
theory that Feliciano was fully aware that the property at the eastern part of his property belonged to
Andres from whom Federico inherited the said lot. This is the reason why a right of way going to the
national highway was given to Jose between Lot No. 1305-A and Lot No. 1304. If the disputed
property is part of the sale as claimed by Jose then Feliciano would not have given the said right of
way but would rather keep it to himself.

"Settled is the rule that a person, whose certificate of title included by mistake or oversight the land
owned by another, does not become the owner of such land by virtue of the certificate alone. The
Torrens System is intended to guarantee the integrity and conclusiveness of the certificate of
registration but is not intended to perpetrate fraud against the real owner of the land. The certificate
of title cannot be used to protect a usurper from the true owner." 25

Jose committed fraud in obtaining the title to the disputed property.

Anent the second issue, we rule that Jose committed fraud in obtaining title to the disputed property.
The chain of events leading to the issuance of title in his name shows beyond cavil the bad faith or a
fraudulent pattern on his part. The evidence on record disclosed that even before Jose purchased
the 2,056 square meters from Feliciano, he had already caused on January 30, 1991 the survey of a
2,739 square meters lot. Although the document of sale expressly stated that the area sold was
2,056 square meters and is located at Dampol 1st, Pulilan, Bulacan, however, when he filed his
application for free patent in March 1991, he used the survey on the 2,739 square meters and
indicated the same to be located at Dampol II, Pulilan, Bulacan. Also, in his application, he stated
that the land described and applied for is not claimed or occupied by any person when in reality the
same is owned and possessed by Federico.

Petitioners are entitled to an award of moral and exemplary damages.

Article 221726 of the Civil Code defines what are included in moral damages while Article 2219
enumerates the cases where they may be recovered. Moral damages are in the category of an
award designed to compensate the claimant for actual injury suffered and not to impose a penalty on
the wrongdoer.27 "The person claiming moral damages must prove the existence of bad faith by clear
and convincing evidence for the law always presumes good faith. It is not enough that one merely
suffered sleepless nights, mental anguish, serious anxiety as the result of the actuations of the other
party. Invariably such action must be shown to have been willfully done in bad faith or with ill
motive."28 In the same fashion, to warrant the award of exemplary damages, the wrongful act must
be accompanied by bad faith, and an award of damages would be allowed only if the guilty party
acted in wanton, fraudulent, reckless or malevolent manner. 29 As regards attorney’s fees, the law is
clear that in the absence of stipulation, attorney’s fees may be recovered as actual or compensatory
damages under any of the circumstances provided for in Article 2208 30 of the Civil Code.

Having ruled that Jose committed fraud in obtaining title to the disputed property then he should be
liable for both moral and exemplary damages. Likewise, since petitioners were compelled to litigate
to protect their rights and having proved that Jose acted in bad faith, attorney’s fees should likewise
be awarded.

WHEREFORE, the instant petition for review on certiorari is GRANTED. The assailed Decision of
the Court of Appeals in CA-G.R. CV No. 83577 dated January 16, 2006 and its May 3, 2006
Resolution are REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Bulacan,
Branch 14 in Civil Case No. 1065-M-99 dated March 10, 2004 is reinstated and AFFIRMED.
SO ORDERED.

G.R. Nos. L-31666, L-31667 and L-31668 April 30, 1979

LEPANTO CONSOLIDATED MINING COMPANY, petitioner,

vs.
MANUEL DUMYUNG, THE REGISTER OF DEEDS OF BAGUIO CITY, and the COURT OF FIRST
INSTANCE OF BAGUIO CITY (BRANCH I), respondents.

LEPANTO CONSOLIDATED MINING COMPANY, petitioner,

vs.
FORTUNATO DUMYUNG, THE REGISTER OF DEEDS OF BAGUIO CITY , and the COURT OF
FIRST INSTANCE OF BAGUIO CITY (BRANCH I), respondents.

LEPANTO CONSOLIDATED MINING COMPANY, petitioner,

vs.
DUMYUNG BONAYAN, THE REGISTER OF DEEDS OF BAGUIO CITY, and the COURT OF
FIRST INSTANCE OF BAGUIO CITY (BRANCH I), respondents.

Sycip, Salazar, Luna, Manalo & Feliciano, Jesus B. Santos and Hill & Associates for petitioner.

Floro B. Bugnosen for private respondents.

FERNANDEZ, J.:

This is a petition to review the order of the Court of First Instance of Baguio City, Branch I,
dismissing the three complaints for annulment of titles in Civil Cases Nos. 1068, 1069 and 1070
entitled "Republic of the Philippines, Plaintiff, versus, Manuel Dumyung, et al., Defendants, Lepanto
Consolidated Mining Company, Intervenor" for being without merit.  1

The Republic of the Philippines, represented by the Director of Lands, commenced in the Court of
First Instance of Baguio City Civil Cases Nos. 1068, 1069 and 1070 for annulment of Free Patents
Nos. V-152242, V-155050 and V-152243, and of the corresponding Original Certificates of Title Nos.
P-208, P-210 and P-209, on the ground of misrepresentation and false data and informations
furnished by the defendants, Manuel Dumyung, Fortunate Dumyung and Dumyung Bonayan,
respectively. the land embraced in the patents and titles are Identified as Lots 1, 2 and 3 of survey
plan Psu-181763 containing a total area of 58.4169 hectares, more or less, and situated in the
Municipal District of Mankayan, Sub-province of Benguet, Mountain Province. The Register of Deeds
of Baguio City was made a formal party defendant.

The complaints in Civil Cases Nos. 1068, 1069 and 1070 are all dated September 22, 196 l.  2

The defendants filed their respective answers.  3

The Lepanto Consolidated Mining Company, petitioner herein, filed motions for intervention dated
February 5, 1962 in the three (3) civil cases   which were granted. 
4 5
The complaints in intervention alleged that a portion of the titled lands in question-.ion is within the
intervenor's ordinary timber license No. 140-'62 dated July 7, 1961 expiring and up for renewal on
June 30, 1962 and another portion of said lands is embraced in its mineral claims.  6

The defendants in the three (3) civil cases filed an amended joint answer with counterclaim to the
complaint in intervention.   The said amended joint answer was admitted in an order dated
7

September 10, 1972.  8

Before the hearing on the merits of the three (3) civil cases, the plaintiff, Republic of the Philippines
represented by the Director of Lands, filed in the Court of First Instance of Baguio City three (3)
criminal cases for falsification of public document. 9, docketed as Criminal Cases Nos. 2358, 2359
and 2360, against the defendants Manuel Dumyung, Fortunato Dumyung and Dumyung Bonayan,
private respondents herein, for allegedly making untrue statements in their applications for free
patents over the lands in question. The proceedings on the three (3) civil cases were suspended
pending the outcome of the criminal cases.

After the presentation of evidence by the prosecution in the three (3) criminal cases, the defense
filed a motion to dismiss the same on the ground that the accused had complied with all the legal
requirements in the acquisition of their patents which were duly issued by the Director of Lands and
that they are not guilty of the alleged falsification of public documents.

In an order dated December 6, 1967, the trial court sustained the theory of the defense and
dismissed the three (3) criminal cases, with costs de officio, for insufficiency of evidence to sustain
the conviction of the three (3) accused.  9

Thereupon, the defendants filed a motion to dismiss dated October 12, 1968 in Civil Cases Nos.
1068, 1069 and 1070 on the following grounds: (1) extinction of the penal action carries with it the
extinction of the civil action when the extinction proceeds from a declaration that the fact from which
the civil might arise did not exist; (2) the decision of the trial court acquitting the defendants of the
crime charged renders these civil cases moot and academic, (3) the trial court has no jurisdiction to
order cancellation of the patents issued by the Director of Lands; (4) the certificates of title in
question can no longer be assailed; and (5) the intervenor Lepanto has no legal interest in the
subject matter in litigation.  10

The Court of First Instance of Baguio, Branch I, dismissed the three (3) civil cases because:

After a careful examination and deliberation of the MOTION TO DISMISS, these civil
cases filed by the defendants as well as the two OPPOSITIONS TO MOTION TO
DISMISS filed by both plaintiff and intervenor Lepanto Consolidated Mining Company
and the of all the three civil cases, it clearly shows that upon the issuance of said
Free Patents on November 26, 1960, the same were duly registered with the office of
the Register of Deeds of Baguio and Benguet, pursuant to the provisions of Sec. 122
of Act 496, as amended, and consequently, these properties became the private
properties of the defendants, under the operation of Sec. 38 of said Act; hence, these
titles enjoy the same privileges and safeguards as Torrens titles (Director of Lands
vs. Heirs of Ciriaco Carle, G. R. No. L-12485, July 31, 1964). It is therefore clear that
OCT Nos. P-208, P-209 and P-210 belonging to the defendants are now indefeasible
and this Court has no power to disturb such indefeasibility of said titles, let alone
cancel the same.

The records of this case further disclose that the defendants are ignorant natives of
Benguet Province and are members of the so-called Cultural Minorities of Mountain
 Province, who are the same persons accused in the dismissed criminal cases, based
on the same grounds. It should be noted that these cases fall squarely under Sec. 3
of Rule III of the New Rules of Court.  11

They plaintiff, Republic of the Philippines represented by the Director of Lands, and the intervenor,
Lepanto Consolidated Mining Company,, filed separate motions for reconsideration of the order
dismissing Civil Cases Nos. 1068, 1069 and 1070.   Both motion for reconsideration were denied by
12

the trial court.   Thereupon the intervenor, Lepanto Consolidated Mining Company, filed the instant
13

petition.

The petitioner assigns the following errors:

THE LOWER COURT ERRED IN HOLDING THAT THE ORIGINAL CERTIFICATE

OF TITLE OF PRIVATE RESPONDENTS WERE 'INDEFEASIBLE' SIMPLY
BECAUSE THEY WERE ISSUED PURSUANT TO THE REGISTRATION OF THE
FREE PATENTS OF THE PRIVATE RESPONDENTS.

II

THE LOWER COURT ERRED IN HOLDING THAT THE PRIVATE RESPONDENTS

ARE ENTITLED TO THE BENEFITS OF REPUBLIC ACT NO. 3872.

III

THE LOWER COURT ERRED IN HOLDING THAT THE ACQUITTAL OF THE

PRIVATE RESPONDENTS IN THE CRIMINAL CASES FOR FALSIFICATION OF
PUBLIC DOCUMENTS BARRED THE CIVIL ACTIONS FOR ANNULMENT OF THE
FREE PATENTS AND CANCELLATION OF THE ORIGINAL CERTIFICATES OF
TITLE OF THE PRIVATE RESPONDENTS.  14

Timber and mineral lands are not alienable or disposable. The pertinent provisions of the Public
Land Act, Commonwealth Act No. 141, provide:

Sec. 2. The provisions of this Act shall apply to the lands of the public domain; but
timber and mineral lands shag be governed by special laws and nothing in this Act
provided shall be understood or construed to change or modify the administration
and disposition of the lands commonly called 'friar lands' and those which being
privately owned, have reverted to or become the property of the Commonwealth of
the Philippines, which administration and disposition shall be governed by the laws at
present in force or which may hereafter be enacted.

Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and
Commerce, shall from time to time classify the lands of the public domain into —

(a) Alienable or disposable,

(b) Timber, and

(c) Mineral lands,

 and may at any time and in a like manner transfer such lands from one class to
another, for the purposes of their administration and disposition.

The principal factual issue raised by the plaintiff, Republic of the Philippines represented by the
Director of Lands, and the intervenor, petitioner herein, is that the lands covered by the patents and
certificates of title are timber lands and mineral lands and, therefore, not alienable. Without receiving
evidence, the trial court dismissed the three (3) cases on the ground that upon the issuance of the
free patents on November 26, 1960, said patents were duly registered in the Office of the Registry of
Deeds of Baguio pursuant to Section 122 of Act 496, as amended, and said properties became the
private properties of the defendants under the operation of Section 38 of the Land Registration Act.
The trial court concluded that these titles enjoy the same privileges and safeguards as the torrens
title, and Original Certificates of Title Nos. P-208, P-209 and P-210 of the defendants are now
indefeasible.

In its order denying the motion for reconsideration the trial court said,

On the ground of lack of jurisdiction on the part of the Director of Lands to dispose of
the properties since they are within the forest zone, the court finds Republic Act No.
3872, to clear this point. Section 1, amending Section 44 of the Land Act in its
second paragraph states:

A member of the national cultural, minorities who has continuously

occupied and cultivated, either by himself or through his
predecessors-in- interest, a tract or tracts of land, whether disposable
or not since July 4, 1955, shall be entitled to the right granted in the
preceding paragraph of this section: PROVIDED, that at the time he
files his free patent application, he is not the owner of any real
property secured or disposable under this provision of the Public
Land Law.

The 'preceding paragraph' refers to the right of a person to have a free patent issued
to him, provided he is qualified, which in this case the Director of Lands has the
jurisdiction to dispose, whether the land be disposable or not. This provision of law,
certainly, applies to herein defendants. The reason for this law is explicit and could
very well be seen from its EXPLANATORY NOTE, which reads:

'Because of the aggresiveness of our more enterprising Christian

brothers in Mindanao, Mountain Province, and other places inhabited
by members of the National Cultural Minorities, there has be-en an
exodus of the poor and less fortunate non-christians from their
ancestral homes during the t ten years to the fastnesses of the
wilderness where they have settled in peace on portions of
agricultural lands, unfortunately, in most cases, within the forest
zones. But this is not the end of the tragedy of the national cultural
minorities. Because of the grant of pasture leases or permits to the
more agressive Christians, these National Cultural Minorities who
have settled in the forest zones for the last ten years have been
harassed and jailed or threatened with harassment and
imprisonment.
 The thesis behind the additional paragraph to Section 44 of the
Public Land Act is to give the national culture, minorities a fair chance
to acquire lands of the public domain' ...

It is for this reason — that is, to give these national cultural minorities who were
driven from their ancestral abodes, a fair chance to acquire lands of the public
domain — that Republic Act 3872 was passed. This is the new government policy on
liberation of the free patent provisions of the Public Land Act emphasizing more
consideration to and sympathy on the members of the national cultural minorities,
which our courts of justice must uphold.  15

The trial court assumed without any factual basis that the private respondents are entitled to the
benefits of Republic Act 3872. The pertinent provision of Republic Act No, 3872 reads:

SECTION 1. A new paragraph is hereby added 1--o Section 44 of Commonwealth

Act Numbered One Hundred-d forty-one, to read as follows:

SEC. 44. Any natural-born citizen of the Philippines who is not the owner of more
than twenty-four hectares and who since July fourth, ninth hundred and twenty-six or
prior thereto, has continuously occupied and cultivated, either by, himself' or through
his predecessors-in-interest. a tract or tracts of agricultural public lands subject to
disposition- or who shall have paid the real estate tax thereon while the same has,
not been occupied by any person shall be entitled, under the provision of this
chapter, to have a free patent issued to him for such tract or tracts of such land not to
exceed twenty-four hectares.

A member of the national cultural minorities who has continuously occupied and
cultivated, either by himself or through his predecessors-in- interest, a tract or tracts
of land, whether disposable or not since July 4, 1955, shall be entitled to the right
granted in the preceding paragraph of this section: Provided, That at the time he files
his free patent application he is not the owner of any real property secured or
disposable under this provision of the Public Land Law.

There is no evidence that the private respondents are members of the National Cultural Minorities;
that they have continously occupied and cultivated either by themselves or through their
predecessors-in-interest the lands in question since July 4, 1955; and that they are not the owner of
any land secured or disposable under the Public Land Act at the time they filed the free patent
applications. These qualifications must be established by evidence. Precisely, the intervenor,
petitioner herein, claims that it was in possession of the lands in question when the private
respondents applied for free patents thereon.

It was premature for the trial court to rule on whether or not the titles based on the patents awarded
to the private respondents have become indefeasible. It is well settled that a certificate of title is void
when it covers property of public domain classified as forest or timber and mineral lands. Any title
issued on non-disposable lots even in the hands of alleged innocent purchaser for value, shall be
cancelled.   In Director of lands vs. Abanzado   this Court said:
16 17

4. To complete the picture, reference may be made to the learned and scholarly
opinion of Justice Sanchez in Director of Forestry v. Muñoz, a 1968 decision. After a
review of Spanish legislation, he summarized the present state of the law thus: 'If a
Spanish title covering forest land is found to be invalid, that land is public forest land,
is part of the public domain, and cannot be appropriated. Before private interests
 have intervened, the government may decide for i what Portions of the public domain
shall be set aside and reserved as forest land. Possession of forest lands, however
long, cannot ripen into private ownership.' Nor is this all He reiterated the basic state
objective on the matter in clear and penetrating language: 'The view this Court takes
of the cages at bar is but in adherence to public policy that should be followed with
respect to forest lands. many have written much, and many more have spoken, and
quite often, above the pressing need for forest preservation, conservation. protection,
development and reforestation. Not without justification For, forests constitute a vital
segment of any country's natural resources. It is of common knowledge by now that
absence of the necessary green cover on our lands produces a number Of adverse
or ill effects of serious proportions. Without the trees, watersheds dry up; rivers and
lakes which they supply are emptied of their contents. The fish disappears. Denuded
areas become dust bowls. As waterfalls cease to function, so will hydroelectric
plants. With the rains, the fertile topsoil is washed away; geological erosion results.
With erosion come the dreaded floods that wreak havoc and destruction to property
— crops, livestock, houses and highways — not to mention precious human lives, ...'

The acquittal of the private respondents in the criminal cases for falsification is not a bar to the civil
cases to cancel their titles. The only issue in the criminal cases for falsification was whether there
was evidence beyond reasonable doubt that the private respondents had committed the acts of
falsification alleged in the informations. The factual issues of whether or not the lands in question are
timber or mineral lands and whether or not the private respondents are entitled to the benefits of
Republic Act No. 3872 were not in issue in the criminal case.

There is need to remand these cases to the trial court for the reception of evidence on (1) whether or
not the lands in question are timber and mineral lands; and (2) whether the private respondents
belong to the cultural minorities and are qualified under Republic Act 3872 to be issued free patents
on said lands.

WHEREFORE, the order dismissing Civil Cases Nos. 1968, 1969 and 1970 of the Court of First
Instance of Baguio City is hereby set aside and said cases are remanded to the trial court for further
proceedings, without pronouncement as to costs.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 172102               July 2, 2010

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
HANOVER WORLWIDE TRADING CORPORATION, Respondent.

DECISION

PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking the
reversal and setting aside of the Decision1 dated May 6, 2005 of the Court of Appeals (CA) in CA-
G.R. CV No. 70077, which affirmed the August 7, 1997 Decision of the Regional Trial Court (RTC) of
Mandaue City, Branch 56, in LAND REG. CASE NO. N-281. Petitioner also assails the CA
Resolution2 dated March 30, 2006, denying its Motion for Reconsideration.

The facts of the case are as follows:

On October 15, 1993, Hanover Worldwide Trading Corporation filed an application for Registration of
Title over Lot No. 4488 of Consolacion Cad-545-D (New) under Vs-072219-000396, situated in
Barrio Sacsac, Consolacion, Cebu, containing an area of One Hundred Three Thousand Three
Hundred Fifty (103,350) square meters, more or less, pursuant to Presidential Decree (P.D.) No.
1529, otherwise known as the Property Registration Decree. The application stated that Hanover is
the owner in fee simple of Lot No. 4488, its title thereto having been obtained through purchase
evidenced by a Deed of Absolute Sale.

Attached to the petition are: 1) a Verification Survey Plan; 2) a copy of the approved Technical
Description of Lot 4488; 3) a copy of the Deed of Sale in favor of Hanover’s President and General
Manager; 4) a copy of a Waiver executed by the President and General Manager of Hanover in favor
of the latter; 5) a Geodetic Engineer's Certificate attesting that the property was surveyed; 6) a Tax
Declaration; 7) a tax clearance; 8) a Municipal Assessor's Certification stating, among others, the
assessed value and market value of the property; and 9) a CENRO Certification on the alienability
and disposability of the property.

Except for the Republic, there were no other oppositors to the application. The Republic contended,
among others, that neither Hanover nor its predecessors-in-interest are in open, continuous,
exclusive and notorious possession and occupation of the land in question since June 12, 1945 or
prior thereto; the muniments of title, tax declarations and receipts of tax payments attached to or
alleged in the application do not constitute competent and sufficient evidence of a bona fide
acquisition of the lands applied for; Hanover is a private corporation disqualified under the
Constitution to hold alienable lands of the public domain; the parcels of land applied for are portions
of the public domain belonging to the Republic and are not subject to private appropriation.

The case was then called for trial and respondent proceeded with the presentation of its evidence.
The Republic was represented in the proceedings by officers from the Office of the Solicitor General
(OSG) and the Department of Environment and Natural Resources (DENR).

On August 7, 1997, the RTC rendered its Decision3 approving Hanover’s application for registration
of the subject lot. It held that from the documentary and oral evidence presented by Hanover, the
trial court was convinced that Hanover and its predecessors-in-interest had been in open, public,
continuous, notorious and peaceful possession, in the concept of an owner, of the land applied for
registration of title, and that it had registrable title thereto in accordance with Section 14 of P.D.
1529.

On appeal by the State, the judgment of the RTC was affirmed by the CA via the presently assailed
Decision and Resolution.

Hence, the instant petition based on the following grounds:

I
THE DEFECTIVE AND/OR WANT OF NOTICE BY PUBLICATION OF THE INITIAL HEARING OF
THE CASE A QUO DID NOT VEST THE TRIAL COURT WITH JURISDICTION TO TAKE
COGNIZANCE THEREOF.

II

DEEDS OF SALE AND TAX DECLARATIONS/CLEARANCES DID NOT CONSTITUTE THE

"WELL-NIGH INCONTROVERTIBLE" EVIDENCE NECESSARY TO ACQUIRE TITLE THROUGH
ADVERSE OCCUPATION.4

Petitioner claims that the RTC failed to acquire jurisdiction over the case. It avers that the RTC set
the initial hearing of the case on September 25, 1995 in an Order dated June 13, 1995. Petitioner
contends, however, that, pursuant to Section 23 of P.D. 1529, the initial hearing of the case must be
not earlier than forty-five (45) days and not later than ninety (90) days from the date of the Order
setting the date and hour of the initial hearing. Since the RTC Order was issued on June 13, 1995,
the initial hearing should have been set not earlier than July 28, 1995 (45 days from June 13, 1995)
and not later than September 11, 1995 (90 days from June 13, 1995). Unfortunately, the initial
hearing was scheduled and actually held on September 25, 1998, some fourteen (14) days later
than the prescribed period.

Petitioner also argues that respondent failed to present incontrovertible evidence in the form of
specific facts indicating the nature and duration of the occupation of its predecessor-in-interest to
prove that the latter has been in possession of the subject lot under a bona fide claim of acquisition
of ownership since June 12, 1945 or earlier.

The petition is meritorious.

As to the first assigned error, however, the Court is not persuaded by petitioner’s contention that the
RTC did not acquire jurisdiction over the case. It is true that in land registration cases, the applicant
must strictly comply with the jurisdictional requirements. In the instant case, though, there is no
dispute that respondent complied with the requirements of the law for the court to acquire jurisdiction
over the case.

With respect to the setting of the initial hearing outside the 90-day period set forth under Section 23
of P.D. 1529, the Court agrees with the CA in ruling that the setting of the initial hearing is the duty of
the land registration court and not the applicant. Citing Republic v. Manna Properties, Inc.,5 this
Court held in Republic v. San Lorenzo Development Corporation 6 that:

The duty and the power to set the hearing date lie with the land registration court. After an applicant
has filed his application, the law requires the issuance of a court order setting the initial hearing date.
The notice of initial hearing is a court document. The notice of initial hearing is signed by the judge
and copy of the notice is mailed by the clerk of court to the LRA [Land Registration Authority]. This
involves a process to which the party-applicant absolutely has no participation. x x x

xxxx

x x x a party to an action has no control over the Administrator or the Clerk of Court acting as a land
court; he has no right to meddle unduly with the business of such official in the performance of his
duties. A party cannot intervene in matters within the exclusive power of the trial court. No fault is
attributable to such party if the trial court errs on matters within its sole power. It is unfair to punish
an applicant for an act or omission over which the applicant has neither responsibility nor control,
especially if the applicant has complied with all the requirements of the law.

Moreover, it is evident in Manna Properties, Inc. that what is more important than the date on which
the initial hearing is set is the giving of sufficient notice of the registration proceedings via
publication. x x x

In the instant case, there is no dispute that sufficient notice of the registration proceedings via
publication was duly made. 1avvphi1

Moreover, petitioner concedes (a) that respondent should not be entirely faulted if the initial hearing
that was conducted on September 25, 1995 was outside the 90-day period set forth under Section
23 of Presidential Decree No. 1529, and (b) that respondent substantially complied with the
requirement relating to the registration of the subject land.

Hence, on the issue of jurisdiction, the Court finds that the RTC did not commit any error in giving
due course to respondent’s application for registration.

The foregoing notwithstanding, the Court agrees with petitioner on the more important issue that
respondent failed to present sufficient evidence to prove that it or its predecessors-in-interest
possessed and occupied the subject property for the period required by law.

Section 14 (1) of P.D. 1529, as amended, provides:

SEC. 14. Who may apply. –The following persons may file in the proper Court of First Instance an
application for registration of title to land, whether personally or through their duly authorized
representatives:

(1) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of alienable and disposable lands of
the public domain under a bona fide claim of ownership since June 12, 1945, or earlier. 7

Likewise, Section 48 (b) of Commonwealth Act 141, as amended by Section 4 of P.D. 1073, states:

Section 48. The following described citizens of the Philippines, occupying lands of the public domain
or claiming to own any such lands or an interest therein, but whose titles have not been perfected or
completed, may apply to the Court of First Instance [now Regional Trial Court] of the province where
the land is located for confirmation of their claims and the issuance of a certificate of title therefor,
under the Land Registration Act, to wit:

xxxx

(b) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of agricultural lands of the public
domain, under a bona fide claim of acquisition of ownership, since June 12, 1945, or earlier,
immediately preceding the filing of the application for confirmation of title except when prevented by
war or force majeure. These shall be conclusively presumed to have performed all the conditions
essential to a Government grant and shall be entitled to a certificate of title under the provisions of
this chapter.8
As the law now stands, a mere showing of possession and occupation for 30 years or more is not
sufficient. Therefore, since the effectivity of P.D. 1073 on January 25, 1977, it must now be shown
that possession and occupation of the piece of land by the applicant, by himself or through his
predecessors-in-interest, started on June 12, 1945 or earlier. This provision is in total conformity with
Section 14 (1) of P.D. 1529.9

Thus, pursuant to the aforequoted provisions of law, applicants for registration of title must prove: (1)
that the subject land forms part of the disposable and alienable lands of the public domain, and (2)
that they have been in open, continuous, exclusive and notorious possession and occupation of the
same under a bona fide claim of ownership since June 12, 1945, or earlier.

It is true, as respondent argues, that an examination of these requisites involve delving into
questions of fact which are not proper in a petition for review on certiorari. Factual findings of the
court a quo are generally binding on this Court, except for certain recognized exceptions, 10 to wit:

(1) When the conclusion is a finding grounded entirely on speculation, surmises and
conjectures;

(2) When the inference made is manifestly mistaken, absurd or impossible;

(3) Where there is a grave abuse of discretion;

(4) When the judgment is based on a misapprehension of facts;

(5) When the findings of fact are conflicting;

(6) When the Court of Appeals, in making its findings, went beyond the issues of the case
and the same is contrary to the admissions of both appellant and appellee;

(7) When the findings are contrary to those of the trial Court;

(8) When the findings of fact are conclusions without citation of specific evidence on which
they are based;

(9) When the facts set forth in the petition as well as in the petitioners’ main and reply briefs
are not disputed by the respondents; and

(10) When the findings of fact of the Court of Appeals are premised on the supposed
absence of evidence and contradicted by the evidence on record. 11

The Court finds that the instant case falls under the third and ninth exceptions.

A careful reading of the Decisions of the RTC and the CA will show that there is neither finding nor
discussion by both the trial and appellate courts which would support their conclusion that
respondent’s predecessors-in-interest had open, continuous, exclusive and notorious possession
and occupation of the disputed parcel of land since June 12, 1945 or earlier.

No testimonial evidence was presented to prove that respondent or its predecessors-in-interest had
been possessing and occupying the subject property since June 12, 1945 or earlier. Hanover’s
President and General Manager testified only with respect to his claim that he was the former owner
of the subject property and that he acquired the same from the heirs of a certain Damiano Bontoyan;
that he caused the payment of realty taxes due on the property; that a tax declaration was issued in
favor of Hanover; that Hanover caused a survey of the subject lot, duly approved by the Bureau of
Lands; and that his and Hanover’s possession of the property started in 1990. 12

The pieces of documentary evidence submitted by respondent neither show that its predecessor’s
possession and occupation of the subject land is for the period or duration required by law. The
earliest date of the Tax Declarations presented in evidence by respondent is 1965, the others being
1973, 1980, 1992 and 1993. Respondent failed to present any credible explanation why the realty
taxes due on the subject property were only paid starting in 1965. While tax declarations are not
conclusive evidence of ownership, they constitute proof of claim of ownership. 13 In the present case,
the payment of realty taxes starting 1965 gives rise to the presumption that respondent’s
predecessors-in-interest claimed ownership or possession of the subject lot only in that year.

Settled is the rule that the burden of proof in land registration cases rests on the applicant who must
show by clear, positive and convincing evidence that his alleged possession and occupation of the
land is of the nature and duration required by law. 14 Unfortunately, as petitioner contends, the pieces
of evidence presented by respondent do not constitute the "well-nigh incontrovertible" proof
necessary in cases of this nature.

Lastly, the Court notes that respondent failed to prove that the subject lot had been declared
alienable and disposable by the DENR Secretary.

The well-entrenched rule is that all lands not appearing to be clearly of private dominion presumably
belong to the State.15 The onus to overturn, by incontrovertible evidence, the presumption that the
land subject of an application for registration is alienable and disposable rests with the applicant. 16

In the present case, to prove the alienability and disposability of the subject property, Hanover
submitted a Certification issued by the Community Environment and Natural Resources Offices
(CENRO) attesting that "lot 4488, CAD-545-D, containing an area of ONE HUNDRED THREE
THOUSAND THREE HUNDRED FIFTY (103,350) square meters, more or less, situated at Sacsac,
Consolacion, Cebu" was found to be within "Alienable and Disposable Block-1, land classification
project no. 28, per map 2545 of Consolacion, Cebu." However, this certification is not sufficient.

In Republic v. T.A.N. Properties, Inc.17 this Court held that it is not enough for the Provincial
Environment and Natural Resources Offices (PENRO) or CENRO to certify that a land is alienable
and disposable, thus:

x x x The applicant for land registration must prove that the DENR Secretary had approved the land
classification and released the land of the public domain as alienable and disposable, and that the
land subject of the application for registration falls within the approved area per verification through
survey by the PENRO or CENRO. In addition, the applicant for land registration must present a copy
of the original classification approved by the DENR Secretary and certified as a true copy by the
legal custodian of the official records. These facts must be established to prove that the land is
alienable and disposable x x x.18

In the instant case, even the veracity of the facts stated in the CENRO Certification was not
confirmed as only the President and General Manager of respondent corporation identified said
Certification submitted by the latter. It is settled that a document or writing admitted as part of the
testimony of a witness does not constitute proof of the facts stated therein. 19 In the present case,
Hanover’s President and General Manager, who identified the CENRO Certification, is a private
individual. He was not the one who prepared the Certification. The government official who issued
the Certification was not presented before the RTC so that he could have testified regarding its
contents. Hence, the RTC should not have accepted the contents of the Certification as proof of the
facts stated therein. The contents of the Certification are hearsay, because Hanover’s President and
General Manager was incompetent to testify on the truth of the contents of such Certification. Even if
the subject Certification is presumed duly issued and admissible in evidence, it has no probative
value in establishing that the land is alienable and disposable. 20

Moreover, the CENRO is not the official repository or legal custodian of the issuances of the DENR
Secretary declaring the alienability and disposability of public lands. 21 Thus, the CENRO Certification
should have been accompanied by an official publication of the DENR Secretary’s issuance
declaring the land alienable and disposable.

Respondent, however, failed to comply with the foregoing requirements.

WHEREFORE, the petition is GRANTED. The May 6, 2005 Decision and March 30, 2006 Resolution
of the Court of Appeals in CA-G.R. CV No. 70077 and the August 7, 1997 Decision of the Regional
Trial Court of Mandaue City, Branch 56 in Land Registration Case No. N-281 are SET ASIDE.
Respondent Hanover Worldwide Trading Corporation’s application for registration of Lot No. 4488 of
Consolacion Cad-545-D (New), under Vs-072219-000396, Barrio Sacsac, Consolacion, Cebu, is
DENIED.

SO ORDERED.

G.R. No. 149118             February 16, 2006

FLAVIANA LIM CAJAYON and CARMELITA LIM CONSTANTINO, Petitioners,

vs.
SPOUSES SANTIAGO and FORTUNATA BATUYONG, Respondents.

DECISION

TINGA, J.:

This petition for review on certiorari challenges the two rulings of the Court of Appeals in CA G.R.
SP. No. 50952. The first decision dated 27 November 2000 1 upheld the ruling of the Regional Trial
Court (RTC) affirming the Metropolitan Trial Court (MeTC) order for ejectment, while the Resolution
dated 5 July 20012 denied the motion for reconsideration.

First, the factual background of the case.

Flaviana Lim Cajayon and Carmelita Lim Constantino (petitioners) and Isagani P. Candelaria
(Candelaria) were co-owners of a 260-square meter lot, then covered by Transfer Certificate of Title
(TCT) No. C-10870. On 1 February 1995, a partition agreement 3 was entered into by petitioners and
Candelaria, wherein Lot 6-A, Psd 00-034294, containing an area of 100 square meters, more or
less, was adjudicated to Candelaria, while Lot 6-B, Psd 00-034294, containing an area of 160
square meters, more or less, was given to petitioners. TCT No. C-10870 was cancelled and TCT No.
288500 was issued in the name of petitioners.

On 30 May 1995, Candelaria sold his property, including the improvements thereon, to Spouses
Santiago and Fortunata Batuyong (respondents). TCT No. 294743 was issued in their names over
the said parcel of land.4
On 21 May 1996, petitioners started the construction of a seven (7)-door bungalow-type building that
allegedly intruded into the lot of Respondents. At the instance of respondents, petitioners were
summoned by barangay officials to a meeting on the matter. It was then agreed upon that petitioners
would defer the construction work pending the result of a relocation survey to be conducted by a
government surveyor.

A verification survey was conducted by Geodetic Engineer Florentina C. Valencia. She submitted a
report dated 12 November 1996 which yielded the findings that Lot 6-A (Candelaria’s) and Lot 6-B
(petitioners’) were not correctly positioned geographically on the ground with respect to TCT No.
294743. Thus, as per survey, sub-lot B with an area of 10.43 square meters serves as right of way of
Lot 6-B (petitioners’ lot) while sub-lot C with an area of 10.18 square meters was the portion of Lot 6-
A (respondents’ lot) presently occupied by petitioners. 5

Despite the delineation of said boundaries, petitioners proceeded with the forestalled construction,
allegedly occupying at least 20.61 square meters of respondents’ lot, including the portion being
used as right of way for petitioners’ tenants.

After respondents secured a permit from the barangay and the Caloocan City Building Official to
fence their lot, they made demands to petitioners to vacate the encroached portion but to no avail.
Respondents brought the matter to the barangay but no amicable settlement was reached. A
Certificate to File Action was issued to them by the Barangay Lupon Tagapayapa. A final demand
was made through a letter dated 20 May 1997 upon petitioners to vacate the encroached premises.
Petitioners, however, vehemently refused to vacate and surrender the premises.

On 14 April 1997, respondents filed an ejectment case against petitioners before the Metropolitan
Trial Court6 (MeTC) of Caloocan City, docketed as Civil Case No. 23359. In a Decision 7 dated 2 July
1998, the MeTC ordered petitioners to vacate and surrender possession of a portion of respondents’
lot and to pay ₱500.00 per month as fair rental value from May 1996 until the premises is finally
vacated, plus ₱5,000.00 as attorney’s fees and costs of the suit. 8

On appeal, the RTC9 affirmed the judgment of the MeTC.10 In doing so, the RTC debunked the three
(3) arguments posed by petitioners. First, contrary to petitioners’ submission, the RTC ruled that the
MeTC had jurisdiction over the instant complaint. The RTC noted that the issue of jurisdiction was
never raised in the court a quo while on the other hand, petitioners actively participated in the
proceedings therein by filing their Answer and Position Paper. Evidently, petitioners raised the
question of jurisdiction as a mere afterthought as he did so only after he obtained an adverse
judgment. Second, the allegations of the complaint sufficiently averred a case for ejectment which
the RTC found to be within the jurisdiction of the court a quo. Third, the trial court ruled that
petitioners categorically recognized the validity of the verification survey done by Engineer Valencia,
as shown by the presence of petitioner Flaviana Cajayon during the verification survey and setting of
monuments per survey report.11

Petitioners filed a motion for new trial and/or reconsideration but it was denied in an Order 12 dated 12
January 1999 of the RTC. They elevated the case to the Court of Appeals by way of petition for
review under Rule 42 of the Rules of Court. On 27 November 2000, the appellate court rendered a
Decision13 dismissing the petition. Holding that the exclusive jurisdiction to try unlawful detainer
cases is vested with the MeTC, the appellate court ratiocinated, thus:

The complaint in the instant case establishes jurisdictional facts necessary to sustain the action for
unlawful detainer and the remedy it seeks is merely to obtain possession of the controverted lot from
Respondents. Specifically, it alleges that sometime on May 21, 1996, petitioners started construction
works in the area which intruded into a portion of respondents’ property; that the parties eventually
agreed to stop the construction subject to the result of a survey to be conducted thereon; that a
survey was conducted in the presence of the parties and a report was submitted by Engr. Valencia
on November 12, 1996, showing an encroachment of about 20.61 square meters of respondents’ lot
including that portion being used as a right of way for petitioners’ tenants; that even after the
boundaries had been verified, petitioners resumed the construction on the area; that despite verbal
and written demands, the last of which was made on March 20, 1999, petitioners refused to vacate
and surrender the encroached area. Surely, respondents’ resort to unlawful detainer when
petitioners failed to leave the controverted premises upon demand is in order. 14

The appellate court also held that the fact that petitioners’ houses already stood on the controverted
lot long before the purchase of the land by respondents failed to negate the case for ejectment. 15 The
appellate court emphasized that prior physical possession is not a condition sine qua non in unlawful
detainer cases. The court likewise sustained the RTC findings on the validity of the verification
survey conducted by Engineer Valencia that petitioners have encroached on a 20.61 square meter
portion of respondents’ lot.

On 5 July 2001, the Court of Appeals issued a Resolution 16 denying petitioners’ Motion for
Reconsideration.

Petitioners now come to us via the present petition, submitting as issues the question of jurisdiction
and the weight to be accorded to the verification survey results. 17

Petitioners anchor their petition on the court a quo’s lack of jurisdiction over the instant suit. The
averments in the complaint do not make out a case for ejectment, they claim, as their entry into the
disputed lot was not made by force, intimidation, threat, strategy or stealth. Neither was their
possession of the disputed property by virtue of the tolerance of respondents or the latter’s
predecessor-in-interest.

Respondents counter that the jurisdictional elements necessary to maintain an action for unlawful
detainer clearly obtain in the case at bar, namely: (a) after the parties agreed to the conduct of a
survey by a government surveyor and after the survey, it was determined that the structures
introduced by herein petitioners have encroached a portion of herein respondents’ lot; (b) notices to
vacate and surrender of possession of the encroached portion were made to petitioners, the last
being on March 20, 1997; and (c) the suit was instituted on April 11, 1997 or within one (1) year from
date of last demand.18

Respondents also stress that possession of the premises by petitioners took place more than one
year before the filing of the complaint and the absence of an allegation in the complaint that such
possession of the disputed portion was merely by virtue of respondents’ tolerance does not deprive
the lower court of its original and exclusive jurisdiction nor will it negate respondents’ action for
unlawful detainer.19

It is settled that jurisdiction of the court in ejectment cases is determined by the allegations of the
complaint and the character of the relief sought. 20

The Complaint21 filed by respondents (plaintiffs therein) alleged these material facts: 1avvphil.net

2. That defendants and Isagani P. Candelaria were the former co-owners of a certain piece
of land located in Maypajo, Caloocan City containing an area of 260 square meters, more or
less, under TCT No. C-10870 issued by the Register of Deeds of Caloocan City;
 3. That on February 1, 1995, said co-owners subdivided this parcel of land by virtue of a
Partition Agreement wherein Lot 6-A, Psd 00-034294, containing an area of 100 square
meters, more or less, was given to Isagani P. Candelaria, while Lot 6-B, Psd 00-034294,
containing an area of 160 square meters, more or less, was given to defendants. A copy of
said Partition Agreement is hereto attached as Annex "A";

xxx xxx xxx

5. That on May 30, 1995, Isagani P. Candelaria sold his share to the herein plaintiffs,
including the improvements thereon, in the sum of ₱100,000.00, under a Deed of Absolute
Sale x x x;

xxx xxx xxx

7. That sometime in May 21, 1996, defendants started construction works in the area and
intruded into the lot owned by the plaintiffs causing the latter to protest and report the matter
to the barangay authorities;

8. That on the same day, the parties were summoned to appear before the Barangay
Chairman wherein defendants agreed to stop the construction works, and in a subsequent
conference on June 7, 1996, they agreed to defer the matter pending the result of a survey
to be conducted by a government surveyor;

xxx xxx xxx

11. That the following day, September 5, 1996, Geodetic Engineer Florentina C. Valencia
conducted a survey of the aforesaid property and placed the concrete monuments thereon in
the presence of plaintiffs and defendants;

12. That on November 12, 1996, a verification survey report was submitted by Geodetic
Engineer Florentina C. Valencia together with the survey verification plan xxx;

13. That despite defendants’ knowledge of the property boundary, and despite repeated
serious objections from plaintiffs, defendants proceeded to construct a seven-door
bungalow-type semi-concrete building, occupying at least 10.18 square meters and another
10.43 square meters for the right of way, thus encroaching upon at least 20.61 square
meters of plaintiffs’ lot, and further demolishing plaintiff’s wall.

xxx xxx xxx

20. That despite repeated and continuous demands made by plaintiffs upon defendants,
both oral and written, the last being on March 20, 1997, defendants in manifest bad faith,
wanton attitude, and in a malevolent and oppressive manner and in utter disregard of the
property rights of plaintiffs, have failed and refused, and still fail and refuse to vacate the
same up to the present time x x x.22

From the above-quoted allegations taken in tandem with the textbook distinctions between forcible
entry and unlawful detainer, it is clear that the complaint makes out a case for forcible entry, as
opposed to unlawful detainer. The distinctions between the two forms of ejectment suits, are: first, in
forcible entry, the plaintiff must prove that he was in prior physical possession of the premises until
he was deprived thereof by the defendant, whereas, in unlawful detainer, the plaintiff need not have
been in prior physical possession; second, in forcible entry, the possession of the land by the
defendant is unlawful from the beginning as he acquires possession thereof by force, intimidation,
threat, strategy or stealth, while in unlawful detainer, the possession of the defendant is inceptively
lawful but it becomes illegal by reason of the termination of his right to the possession of the property
under his contract with the plaintiff; third, in forcible entry, the law does not require a previous
demand for the defendant to vacate the premises, but in unlawful detainer, the plaintiff must first
make such demand, which is jurisdictional in nature. 23

Respondents had been in prior physical possession of the property in the concept of owner prior to
petitioners’ intrusion on 21 May 1996. When petitioners encroached upon respondents’ lot and
started construction works thereon the latter was dispossessed of the area involved. Despite various
demands by respondents to vacate, petitioners obstinately refused to do so. Clearly, petitioners’
entry into the said property was illegal from the beginning, precluding an action for unlawful detainer.

On the other hand, to establish a case of forcible entry, the complaint must allege that one in
physical possession of a land or building has been deprived of that possession by another through
force, intimidation, threat, strategy or stealth. 24 It is not essential, however, that the complaint should
expressly employ the language of the law. It would be sufficient that facts are set up showing that
dispossession took place under said conditions. 25

The words "by force, intimidation, threat, strategy or stealth" include every situation or condition
under which one person can wrongfully enter upon real property and exclude another, who has had
prior possession thereof. To constitute the use of "force" as contemplated in the above-mentioned
provision, the trespasser does not have to institute a state of war. Nor is it even necessary that he
use violence against the person of the party in possession. The act of going on the property and
excluding the lawful possessor therefrom necessarily implies the exertion of force over the property,
and this is all that is necessary.26 In the case at bar, petitioners’ encroachment into respondents’
property in an oppressive and malevolent manner, coupled with their refusal to vacate the premises
despite knowledge of the proper boundaries and heedless of respondents’ serious objections,
indelibly connotes "force" within the meaning of the law.

Petitioners contend that while they concede they might have intruded on respondents’ property, the
action is barred by prescription because it was filed more than one (1) year after the occurrence of
the alleged intrusion. The contention is baseless. Section 1, Rule 70 of the Rules of Court allows a
plaintiff to bring an action in the proper inferior court for forcible entry or unlawful detainer within one
(1) year, respectively, after such unlawful deprivation or withholding of possession. In forcible entry,
the one-year period is counted from the date of actual entry on the land. 27

Records show that the ejectment suit was instituted on 11 April 1997. Petitioners’ actual entry into
the property, according to the complaint, took place on 21 May 1996. Thus, the suit was filed well
within the one (1)-year period mandated by law.

As a collateral issue, petitioners claim that they are at least entitled to the rights of a builder in good
faith on the premise that they are not the owners of the property encroached upon.

This contention is not tenable. Good faith consists in the belief of the builder that the land he is
building on is his and his ignorance of any defect or flaw in his title. 28 In the instant case, when the
verification survey report came to petitioners’ knowledge their good faith ceased. The survey report
is a professional’s field confirmation of petitioners’ encroachment of respondents’ titled property. It is
doctrinal in land registration law that possession of titled property adverse to the registered owner is
necessarily tainted with bad faith. Thus, proceeding with the construction works on the disputed lot
despite knowledge of respondents’ ownership put petitioners in bad faith.
Now, the second issue. Petitioners question the evidentiary weight of the verification survey report.
They point out that since the survey was a unilateral act of respondents, done as it was without their
consent, they should not be bound by its findings. 29

In raising the issue, petitioners are in effect asking this Court to reassess the factual findings of the
courts below, a task which is beyond this Court’s domain. Factual matters cannot be raised in a
petition for review on certiorari. This Court at this stage is limited to reviewing errors of law that may
have been committed by the lower courts.30 We find no ample reason to depart from this rule, more
so in this case where the Court of Appeals has affirmed the factual findings of the RTC and the
MeTC.

Moreover, there is a presumption that official duty is regularly performed, 31 i.e., government officials
who perform them are clothed with the presumption of regularity, 32 as the courts below pointed
out.33 In this case, the verification survey was conducted by a government functionary.

Even prescinding from the presumption of regularity, what appears on record is that the verification
survey was conducted with the agreement of both parties and in their presence. That was the finding
made by the courts below and affirmed by the appellate court without any wrinkle. 34

WHEREFORE, based on the foregoing, this Petition is DENIED and the assailed Decision
AFFIRMED. Costs against petitioners. 1avvphil.net

SO ORDERED.

G.R. No. 175485               July 27, 2011

CASIMIRO DEVELOPMENT CORPORATION, Petitioner,

vs.
RENATO L. MATEO, Respondent.

DECISION

BERSAMIN, J.:

The focus of this appeal is the faith that should be accorded to the Torrens title that the seller holds
at the time of the sale.

In its decision promulgated on August 31, 2006, 1 the Court of Appeals (CA) declared that the
respondent and his three brothers were the rightful owners of the land in litis, and directed the Office
of the Register of Deeds of Las Piñas City to cancel the transfer certificate of title (TCT) registered
under the name of petitioner Casimiro Development Corporation (CDC) and to issue in its place
another TCT in favor of the respondent and his three brothers. Thereby, the CA reversed the
judgment of the Regional Trial Court (RTC) rendered on May 9, 2000 (dismissing the respondent’s
complaint for quieting of title and reconveyance upon a finding that CDC had been a buyer in good
faith of the land in litis and that the respondent’s suit had already been time-barred).

Aggrieved, CDC brought its petition for review on certiorari.

Antecedents
The subject of this case is a registered parcel of land (property) with an area of 6,693 square meters,
more or less, located in Barrio Pulang Lupa, Las Piñas City, that was originally owned by Isaias
Lara,2 the respondent’s maternal grandfather. Upon the death of Isaias Lara in 1930, the property
passed on to his children, namely: Miguela, Perfecta and Felicidad, and a grandson, Rosauro (son
of Perfecta who had predeceased Isaias in 1920). In 1962, the co-heirs effected the transfer of the
full and exclusive ownership to Felicidad (whose married surname was Lara-Mateo) under an
agreement denominated as Pagaayos Na Gawa Sa Labas Ng Hukuman.

Felicidad Lara-Mateo had five children, namely: Laura, respondent Renato, Cesar, Candido, Jr. and
Leonardo. With the agreement of the entire Lara-Mateo family, a deed of sale covering the property
was executed in favor of Laura, who, in 1967, applied for land registration. After the application was
granted, Original Certificate of Title (OCT) No. 6386 was issued in Laura’s sole name.

In due course, the property now covered by OCT No. 6386 was used as collateral to secure a
succession of loans. The first loan was obtained from Bacoor Rural Bank (Bacoor Bank). To repay
the loan to Bacoor Bank and secure the release of the mortgage, Laura borrowed funds from
Parmenas Perez (Perez), who, however, required that the title be meanwhile transferred to his
name. Thus, OCT No. 6386 was cancelled and Transfer Certificate of Title (TCT) No. 438959 was
issued in the name of Perez. Subsequently, Laura recovered the property by repaying the obligation
with the proceeds of another loan obtained from Rodolfo Pe (Pe), resulting in the cancellation of TCT
No. 438595, and in the issuance of TCT No. S-91595 in Laura’s name. She later executed a deed of
sale in favor of Pe, leading to the issuance of TCT No. S-91738 in the name of Pe, who in turn
constituted a mortgage on the property in favor of China Banking Corporation (China Bank) as
security for a loan. In the end, China Bank foreclosed the mortgage, and consolidated its ownership
of the property in 1985 after Pe failed to redeem. Thus, TCT No. (99527) T-11749-A was issued in
the name of China Bank.

In 1988, CDC and China Bank negotiated and eventually came to terms on the purchase of the
property, with China Bank executing a deed of conditional sale for the purpose. On March 4, 1993,
CDC and China Bank executed a deed of absolute sale over the property. Resultantly, on March 29,
1993, CDC was issued TCT No. T-34640 in its own name.

In the meanwhile, on February 28, 1991, Felicidad died intestate.

On June 6, 1991, CDC brought an action for unlawful detainer in the Metropolitan Trial Court (MeTC)
in Las Piñas City against the respondent’s siblings, namely: Cesar, Candido, Jr., and Leonardo, and
the other occupants of the property. Therein, the defendants maintained that the MeTC did not have
jurisdiction over the action because the land was classified as agricultural; that the jurisdiction
belonged to the Department of Agrarian Reform Adjudication Board (DARAB); that they had been in
continuous and open possession of the land even before World War II and had presumed
themselves entitled to a government grant of the land; and that CDC’s title was invalid, considering
that the land had been registered before its being declared alienable. 3

On October 19, 1992, the MeTC ruled in favor of CDC, viz:

The Court, after careful consideration of the facts and the laws applicable to this case[,] hereby
resolves:

1. On the issue of jurisdiction.

The defendants alleged that the land in question is an agricultural land by presenting a Tax
Declaration Certificate classifying the land as "FISHPOND." The classification of the land in a
 tax declaration certificate as a "fishpond" merely refers to the use of the land in question for
the purpose of real property taxation. This alone would not be sufficient to bring the land in
question under the operation of the Comprehensive Agrarian Reform Law.

2. On the issue of open and adverse possession by the defendants.

It should be noted that the subject land is covered by a Transfer Certificate of Title in the
name of plaintiffs’ predecessor-in-interest China Banking Corporation. Certificates of Title
under the Torrens System is indefeasible and imprescriptible. As between two persons
claiming possession, one having a [T]orrens title and the other has none, the former has a
better right.

3. On the issue of the nullity of the Certificate of Title.

The defense of the defendants that the subject property was a forest land when the same
was originally registered in 1967 and hence, the registration is void[,] is not for this Court to
decide[,] for lack of jurisdiction. The certificate of title over the property must be respected by
this Court until it has been nullified by a competent Court.

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff[,] ordering
the defendants

1. [sic] and all persons claiming right[s] under it to vacate the subject premises located at
Pulang Lupa I, Las Piñas, Metro Manila and surrender the possession of the same to herein
plaintiff;

2. to pay the plaintiff reasonable compensation for the use and occupation of the subject
premises hereby fixed at (₱100.00) one hundred pesos a month starting November 22, 1990
(the time when the demand letter to vacate was given) until defendants actually vacate the
property;

No pronouncement as to costs and attorney’s fees.

SO ORDERED.4

The decision of the MeTC was assailed in the RTC via petition for certiorari and prohibition. The
RTC resolved against CDC, and held that the MeTC had acted without jurisdiction because the land,
being a fishpond, was agricultural; hence, the dispute was within the exclusive jurisdiction of the
DARAB pursuant to Republic Act No. 6657 (Comprehensive Agrarian Reform Law of 1988). 5

CDC appealed to the CA, which, on January 25, 1996, found in favor of CDC, declaring that the
MeTC had jurisdiction. As a result, the CA reinstated the decision of the MeTC. 6

On appeal (G.R. No. 128392), the Court affirmed the CA’s decision in favor of CDC, ruling thusly:

WHEREFORE, the petition is DENIED and the Court of Appeals’ Decision and Resolution in CA-
G.R. SP No. 34039, dated January 25, 1996 and February 21, 1997 respectively, are AFFIRMED.
No costs.

SO ORDERED.7
The decision in G.R. No. 128392 became final.

Nonetheless, on June 29, 1994, the respondent brought an action for quieting of title, reconveyance
of four-fifths of the land, and damages against CDC and Laura in the RTC in Las Piñas City entitled
Renato L. Mateo v. Casimiro Development Corporation and Laura Mateo de Castro. In paragraph 4
of his complaint, he stated that he was "bringing this action to quiet title on behalf of himself and of
his three (3) brothers – Cesar, Leonardo, and Candido, Jr., all surnamed MATEO – in his capacity
as one of the co-owners of a parcel of land situated at Barrio Pulang Lupa, Municipality of Las Piñas,
Metro Manila."

On May 9, 2001, the RTC held in favor of CDC, disposing:

WHEREFORE, and by strong preponderance of evidence, judgment is hereby rendered in favor of

the defendant Casimiro Development Corporation and against the plaintiff Renato L. Mateo by (1)
Dismissing the complaint, and upholding the validity and indefeasibility of Transfer Certificate of Title
No. T-34640 in the name of Casimiro Development Corporation; (2) Ordering the plaintiff Renato
Mateo to pay defendant Casimiro Development Corporation the sum of [a] ₱200,000.00 as
compensatory damages; [b] ₱200,000.00 as attorney’s fees; and [c] to pay the costs.

SO ORDERED.8

On appeal (C.A.-G.R. CV No. 71696), the CA promulgated its decision on August 31, 2006,
reversing the RTC and declaring CDC to be not a buyer in good faith due to its being charged with
notice of the defects and flaws of the title at the time it acquired the property from China Bank, and
decreeing:

WHEREFORE, the Decision dated May 9, 2001 of Branch 225, Regional Trial Court, Las Piñas City
in Civil Case No. 94-2045 is hereby REVERSED and SET ASIDE and a new one rendered:

(1) Declaring appellant Renato Mateo and his brothers and co-owners Cesar, Candido, Jr.,
and Leonardo, all surnamed Mateo as well as his sister, Laura Mateo de Castro as the
rightful owners of the parcel of land, subject of this case; and

(2) Ordering the Register of Deeds of Las Piñas City, Metro-Manila to cancel Transfer
Certificate of Title No. T-34640 under the name of appellee Casimiro Development
Corporation, and that a new one be issued in favor of the appellant and his co-heirs and
siblings, mentioned above as co-owners pro indiviso of the said parcel.

(3) No pronouncement as to cost.

SO ORDERED.9

The CA denied CDC’s motion for reconsideration.

Hence, this appeal, in which CDC urges that the CA committed serious errors of law, 10 as follows:

(A) xxx in failing to rule that the decree of registration over the Subject Property is
incontrovertible and no longer open to review or attack after the lapse of one (1) year from
entry of such decree of registration in favor of Laura Mateo de Castro.

(B) xxx in failing to rule that the present action is likewise barred by res judicata.
 (C) xxx in failing to rule that the instant action for quieting of title and reconveyance under PD
No. 1529 cannot prosper because the Subject Property had already been conveyed and
transferred to third parties who claimed adverse title for themselves.

(D) xxx in failing to rule that the action of respondent for "quieting of title, reconveyance and
damages" is barred by laches.

(E) xxx in ruling that the Subject Property must be reconveyed to respondent because
petitioner Casimiro Development Corporation is not a "purchaser in good faith."

CDC argues that it was a buyer in good faith; and that the CA did not rule on matters that fortified its
title in the property, namely: (a) the incontrovertibility of the title of Laura; (b) the action being barred
by laches and res judicata; and (c) the property having been conveyed to third parties who had then
claimed adverse title.

The respondent counters that CDC acquired the property from China Bank in bad faith, because it
had actual knowledge of the possession of the property by the respondent and his siblings; that CDC
did not actually accept delivery of the possession of the property from China Bank; and that CDC
ignored the failure of China Bank to warrant its title.

Ruling

We grant the petition.

1.

Indefeasibility of title in the name of Laura

As basis for recovering the possession of the property, the respondent has assailed the title of
Laura.

We cannot sustain the respondent.

There is no doubt that the land in question, although once a part of the public domain, has already
been placed under the Torrens system of land registration. The Government is required under the
Torrens system of registration to issue an official certificate of title to attest to the fact that the person
named in the certificate is the owner of the property therein described, subject to such liens and
encumbrances as thereon noted or what the law warrants or reserves. 11 The objective is 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. The Torrens system gives the
registered owner complete peace of mind, in order that he will be secured in his ownership as long
as he has not voluntarily disposed of any right over the covered land. 12

The Government has adopted the Torrens system due to its being the most effective measure to
guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is
established and recognized. If a person purchases a piece of land on the assurance that the seller’s
title thereto is valid, he should not run the risk of being told later that his acquisition was ineffectual
after all, which will not only be unfair to him as the purchaser, but will also erode public confidence in
the system and will force land transactions to be attended by complicated and not necessarily
conclusive investigations and proof of ownership. The further consequence will be that land conflicts
can be even more abrasive, if not even violent. The Government, recognizing the worthy purposes of
the Torrens system, should be the first to accept the validity of titles issued thereunder once the
conditions laid down by the law are satisfied. 13

Yet, registration under the Torrens system, not being a mode of acquiring ownership, does not
create or vest title.14 The Torrens certificate of title is merely an evidence of ownership or title in the
particular property described therein. 15 In that sense, the issuance of the certificate of title to a
particular person does not preclude the possibility that persons not named in the certificate may be
co-owners of the real property therein described with the person named therein, or that the
registered owner may be holding the property in trust for another person. 16

Nonetheless, it is essential that title registered under the Torrens system becomes indefeasible and
incontrovertible.17

The land in question has been covered by a Torrens certificate of title (OCT No. 6386 in the name of
Laura, and its derivative certificates) before CDC became the registered owner by purchase from
China Bank. In all that time, neither the respondent nor his siblings opposed the transactions
causing the various transfers. In fact, the respondent admitted in his complaint that the registration of
the land in the name of Laura alone had been with the knowledge and upon the agreement of the
entire Lara-Mateo family. It is unthinkable, therefore, that the respondent, fully aware of the exclusive
registration in her sister Laura’s name, allowed more than 20 years to pass before asserting his
claim of ownership for the first time through this case in mid-1994. Making it worse for him is that he
did so only after CDC had commenced the ejectment case against his own siblings.

Worthy of mention is that Candido, Jr., Leonardo, and Cesar’s defense in the ejectment case
brought by CDC against them was not predicated on a claim of their ownership of the property, but
on their being agricultural lessees or tenants of CDC. Even that defense was ultimately rejected by
this Court by observing in G.R. No. 128392 as follows:

With regard to the first element, the petitioners have tried to prove that they are tenants or
agricultural lessees of the respondent corporation, CDC, by showing that the land was originally
owned by their grandfather, Isaias Lara, who gave them permission to work the land, and that CDC
is merely a successor-in-interest of their grandfather. It must be noted that the petitioners failed to
adequately prove their grandfather’s ownership of the land. They merely showed six tax
declarations. It has been held by this Court that, as against a transfer certificate of title, tax
declarations or receipts are not adequate proofs of ownership. Granting arguendo that the land was
really owned by the petitioners’ grandfather, petitioners did not even attempt to show how the land
went from the patrimony of their grandfather to that of CDC. Furthermore, petitioners did not prove,
but relied on mere allegation, that they indeed had an agreement with their grandfather to use the
land.

As for the third element, there is apparently no consent between the parties. Petitioners were unable
to show any proof of consent from CDC to work the land. For the sake of argument, if petitioners
were able to prove that their grandfather owned the land, they nonetheless failed to show any proof
of consent from their grandfather to work the land. Since the third element was not proven, the fourth
element cannot be present since there can be no purpose to a relationship to which the parties have
not consented.18

The respondent’s attack against the title of CDC is likewise anchored on his assertion that the only
purpose for having OCT No. 6386 issued in the sole name of Laura was for Laura to hold the title in
trust for their mother. This assertion cannot stand, however, inasmuch as Laura’s title had long ago
become indefeasible.
Moreover, the respondent’s suit is exposed as being, in reality, a collateral attack on the title in the
name of Laura, and for that reason should not prosper. Registration of land under the Torrens
System, aside from perfecting the title and rendering it indefeasible after the lapse of the period
allowed by law, also renders the title immune from collateral attack.19 A collateral attack occurs
when, in another action to obtain a different relief and as an incident of the present action, an attack
is made against the judgment granting the title. This manner of attack is to be distinguished from a
direct attack against a judgment granting the title, through an action whose main objective is to
annul, set aside, or enjoin the enforcement of such judgment if not yet implemented, or to seek
recovery if the property titled under the judgment had been disposed of. 20

2.

CDC was an innocent purchaser for value

The CA found that CDC acquired the property in bad faith because CDC had knowledge of defects
in the title of China Bank, including the adverse possession of the respondent’s siblings and the
supposed failure of China Bank to warrant its title by inserting an as-is, where-is clause in its
contract of sale with CDC.

The CA plainly erred in so finding against CDC.

To start with, one who deals with property registered under the Torrens system need not go beyond
the certificate of title, but only has to rely on the certificate of title. 21 He is charged with notice only of
such burdens and claims as are annotated on the title. 22 The pertinent law on the matter of burdens
and claims is Section 44 of the Property Registration Decree, 23 which provides:

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 on 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 encumbrances 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 short, considering that China Bank’s TCT No. 99527 was a clean title, that is, it was free from any
lien or encumbrance, CDC had the right to rely, when it purchased the property, solely upon the face
of the certificate of title in the name of China Bank. 24
The CA’s ascribing of bad faith to CDC based on its knowledge of the adverse possession of the
respondent’s siblings at the time it acquired the property from China Bank was absolutely unfounded
and unwarranted. That possession did not translate to an adverse claim of ownership that should
have put CDC on actual notice of a defect or flaw in the China Bank’s title, for the respondent’s
siblings themselves, far from asserting ownership in their own right, even characterized their
possession only as that of mere agricultural tenants. Under no law was possession grounded on
tenancy a status that might create a defect or inflict a flaw in the title of the owner. Consequently,
due to his own admission in his complaint that the respondent’s own possession was not any
different from that of his siblings, there was really nothing – factually or legally speaking – that ought
to have alerted CDC or, for that matter, China Bank and its predecessors-in-interest, about any
defect or flaw in the title.

The vendee’s notice of a defect or flaw in the title of the vendor, in order for it to amount to bad faith,
should encompass facts and circumstances that would impel a reasonably cautious person to make
further inquiry into the vendor’s title,25 or facts and circumstances that would induce a reasonably
prudent man to inquire into the status of the title of the property in litigation. 26 In other words, the
presence of anything that excites or arouses suspicion should then prompt the vendee to look
beyond the certificate and to investigate the title of the vendor appearing on the face of said
certificate.27

And, secondly, the CA grossly erred in construing the as-is, where-is clause contained in the deed of
sale between CDC (as vendee) and China Bank (as vendor) as proof or manifestation of any bad
faith on the part of CDC. On the contrary, the as-is, where-is clause did not affect the title of China
Bank because it related only to the physical condition of the property upon its purchase by CDC. The
clause only placed on CDC the burden of having the occupants removed from the property. In a sale
made on an as-is, where-is basis, the buyer agrees to take possession of the things sold "in the
condition where they are found and from the place where they are located," because the phrase as-
is, where-is pertains solely "to the physical condition of the thing sold, not to its legal situation" and is
"merely descriptive of the state of the thing sold" without altering the seller’s responsibility to deliver
the property sold to the buyer.28

What the foregoing circumstances ineluctably indicate is that CDC, having paid the full and fair price
of the land, was an innocent purchaser for value, for, according to Sandoval v. Court of Appeals: 29

A purchaser in good faith is one who buys property of another, without notice that some other person
has a right to, or interest in, such property and pays a full and fair price for the same, at the time of
such purchase, or before he has notice of the claim or interest of some other persons in the
property. He buys the property with the belief that the person from whom he receives the thing was
the owner and could convey title to the property. A purchaser cannot close his eyes to facts which
should put a reasonable man on his guard and still claim he acted in good faith.

WHEREFORE, we grant the petition for review on certiorari; set aside the decision of the Court of
Appeals in CA-GR. CV No. 71696; dismiss the complaint in Civil Case No. 94-2045; and declare
Transfer Certificate of Title No. T-34640 in the name of Casimiro Development Corporation valid and
subsisting.

The respondent shall pay the costs of suit.

SO ORDERED.

G.R. No. 156117             May 26, 2005

REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
JEREMIAS AND DAVID HERBIETO, respondents.

DECISION

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari, under Rule 45 of the 1997 Rules of Civil
Procedure, seeking the reversal of the Decision of the Court of Appeals in CA-G.R. CV No. 67625,
dated 22 November 2002,1 which affirmed the Judgment of the Municipal Trial Court (MTC) of
Consolacion, Cebu, dated 21 December 1999, 2 granting the application for land registration of the
respondents.

Respondents in the present Petition are the Herbieto brothers, Jeremias and David, who filed with
the MTC, on 23 September 1998, a single application for registration of two parcels of land, Lots No.
8422 and 8423, located in Cabangahan, Consolacion, Cebu (Subject Lots). They claimed to be
owners in fee simple of the Subject Lots, which they purchased from their parents, spouses Gregorio
Herbieto and Isabel Owatan, on 25 June 1976.3 Together with their application for registration,
respondents submitted the following set of documents:

(a) Advance Survey Plan of Lot No. 8422, in the name of respondent Jeremias; and Advance
Survey Plan of Lot No. 8423, in the name of respondent David; 4

(b) The technical descriptions of the Subject Lots;5

(c) Certifications by the Department of Environment and Natural Resources (DENR)

dispensing with the need for Surveyor's Certificates for the Subject Lots; 6

(d) Certifications by the Register of Deeds of Cebu City on the absence of certificates of title
covering the Subject Lots;7

(e) Certifications by the Community Environment and Natural Resources Office (CENRO) of
the DENR on its finding that the Subject Lots are alienable and disposable, by virtue of
Forestry Administrative Order No. 4-1063, dated 25 June 1963; 8

(f) Certified True Copies of Assessment of Real Property (ARP) No. 941800301831, in the
name of Jeremias, covering Lot No. 8422, issued in 1994; and ARP No. 941800301833, in
the name of David, covering Lot No. 8423, also issued in 1994; 9 and

(g) Deed of Definite Sale executed on 25 June 1976 by spouses Gregorio Herbieto and
Isabel Owatan selling the Subject Lots and the improvements thereon to their sons and
respondents herein, Jeremias and David, for P1,000. Lot No. 8422 was sold to Jeremias,
while Lot No. 8423 was sold to David.10

On 11 December 1998, the petitioner Republic of the Philippines (Republic) filed an Opposition to
the respondents' application for registration of the Subject Lots arguing that: (1) Respondents failed
to comply with the period of adverse possession of the Subject Lots required by law; (2)
Respondents' muniments of title were not genuine and did not constitute competent and sufficient
evidence of bona fide acquisition of the Subject Lots; and (3) The Subject Lots were part of the
public domain belonging to the Republic and were not subject to private appropriation. 11
The MTC set the initial hearing on 03 September 1999 at 8:30 a.m. 12 All owners of the land adjoining
the Subject Lots were sent copies of the Notice of Initial Hearing. 13 A copy of the Notice was also
posted on 27 July 1999 in a conspicuous place on the Subject Lots, as well as on the bulletin board
of the municipal building of Consolacion, Cebu, where the Subject Lots were located. 14 Finally, the
Notice was also published in the Official Gazette on 02 August 1999 15 and The Freeman Banat
News on 19 December 1999.16

During the initial hearing on 03 September 1999, the MTC issued an Order of Special Default, 17 with
only petitioner Republic opposing the application for registration of the Subject Lots. The
respondents, through their counsel, proceeded to offer and mark documentary evidence to prove
jurisdictional facts. The MTC commissioned the Clerk of Court to receive further evidence from the
respondents and to submit a Report to the MTC after 30 days.

On 21 December 1999, the MTC promulgated its Judgment ordering the registration and
confirmation of the title of respondent Jeremias over Lot No. 8422 and of respondent David over Lot
No. 8423. It subsequently issued an Order on 02 February 2000 declaring its Judgment, dated 21
December 1999, final and executory, and directing the Administrator of the Land Registration
Authority (LRA) to issue a decree of registration for the Subject Lots. 18

Petitioner Republic appealed the MTC Judgment, dated 21 December 1999, to the Court of
Appeals.19 The Court of Appeals, in its Decision, dated 22 November 2002, affirmed the appealed
MTC Judgment reasoning thus:

In the case at bar, there can be no question that the land sought to be registered has been
classified as within the alienable and disposable zone since June 25, 1963. Article 1113 in
relation to Article 1137 of the Civil Code, respectively provides that "All things which are
within the commerce of men are susceptible of prescription, unless otherwise provided.
Property of the State or any of its subdivisions of patrimonial character shall not be the object
of prescription" and that "Ownership and other real rights over immovables also prescribe
through uninterrupted adverse possession thereof for thirty years, without need of title or of
good faith."

As testified to by the appellees in the case at bench, their parents already acquired the
subject parcels of lands, subject matter of this application, since 1950 and that they
cultivated the same and planted it with jackfruits, bamboos, coconuts, and other trees
(Judgment dated December 21, 1999, p. 6). In short, it is undisputed that herein appellees or
their predecessors-in-interest had occupied and possessed the subject land openly,
continuously, exclusively, and adversely since 1950. Consequently, even assuming
arguendo that appellees' possession can be reckoned only from June 25, 1963 or from the
time the subject lots had been classified as within the alienable and disposable zone, still the
argument of the appellant does not hold water.

As earlier stressed, the subject property, being alienable since 1963 as shown by CENRO
Report dated June 23, 1963, may now be the object of prescription, thus susceptible of
private ownership. By express provision of Article 1137, appellees are, with much greater
right, entitled to apply for its registration, as provided by Section 14(4) of P.D. 1529 which
allows individuals to own land in any manner provided by law. Again, even considering that
possession of appelless should only be reckoned from 1963, the year when CENRO
declared the subject lands alienable, herein appellees have been possessing the subject
parcels of land in open, continuous, and in the concept of an owner, for 35 years already
when they filed the instant application for registration of title to the land in 1998. As such, this
court finds no reason to disturb the finding of the court a quo.20
The Republic filed the present Petition for the review and reversal of the Decision of the Court of
Appeals, dated 22 November 2002, on the basis of the following arguments:

First, respondents failed to establish that they and their predecessors-in-interest had been in open,
continuous, and adverse possession of the Subject Lots in the concept of owners since 12 June
1945 or earlier. According to the petitioner Republic, possession of the Subject Lots prior to 25 June
1963 cannot be considered in determining compliance with the periods of possession required by
law. The Subject Lots were classified as alienable and disposable only on 25 June 1963, per
CENRO's certification. It also alleges that the Court of Appeals, in applying the 30-year acquisitive
prescription period, had overlooked the ruling in Republic v. Doldol,21 where this Court declared that
Commonwealth Act No. 141, otherwise known as the Public Land Act, as amended and as it is
presently phrased, requires that possession of land of the public domain must be from 12 June 1945
or earlier, for the same to be acquired through judicial confirmation of imperfect title.

Second, the application for registration suffers from fatal infirmity as the subject of the application
consisted of two parcels of land individually and separately owned by two applicants. Petitioner
Republic contends that it is implicit in the provisions of Presidential Decree No. 1529, otherwise
known as the Property Registration Decree, as amended, that the application for registration of title
to land shall be filed by a single applicant; multiple applicants may file a single application only in
case they are co-owners. While an application may cover two parcels of land, it is allowed only when
the subject parcels of land belong to the same applicant or applicants (in case the subject parcels of
land are co-owned) and are situated within the same province. Where the authority of the courts to
proceed is conferred by a statute and when the manner of obtaining jurisdiction is mandatory, it must
be strictly complied with or the proceedings will be utterly void. Since the respondents failed to
comply with the procedure for land registration under the Property Registration Decree, the
proceedings held before the MTC is void, as the latter did not acquire jurisdiction over it.

Jurisdiction

Addressing first the issue of jurisdiction, this Court finds that the MTC had no jurisdiction to proceed
with and hear the application for registration filed by the respondents but for reasons different from
those presented by petitioner Republic.

A. The misjoinder of causes of action and parties does not affect the jurisdiction of the MTC to hear
and proceed with respondents' application for registration.

Respondents filed a single application for registration of the Subject Lots even though they were not
co-owners. Respondents Jeremias and David were actually seeking the individual and separate
registration of Lots No. 8422 and 8423, respectively.

Petitioner Republic believes that the procedural irregularity committed by the respondents was fatal
to their case, depriving the MTC of jurisdiction to proceed with and hear their application for
registration of the Subject Lots, based on this Court's pronouncement in Director of Lands v. Court
of Appeals,22 to wit:

. . . In view of these multiple omissions which constitute non-compliance with the above-cited
sections of the Act, We rule that said defects have not invested the Court with the authority
or jurisdiction to proceed with the case because the manner or mode of obtaining jurisdiction
as prescribed by the statute which is mandatory has not been strictly followed, thereby
rendering all proceedings utterly null and void.
This Court, however, disagrees with petitioner Republic in this regard. This procedural lapse
committed by the respondents should not affect the jurisdiction of the MTC to proceed with and hear
their application for registration of the Subject Lots.

The Property Registration Decree23 recognizes and expressly allows the following situations: (1) the
filing of a single application by several applicants for as long as they are co-owners of the parcel of
land sought to be registered; 24 and (2) the filing of a single application for registration of several
parcels of land provided that the same are located within the same province. 25 The Property
Registration Decree is silent, however, as to the present situation wherein two applicants filed a
single application for two parcels of land, but are seeking the separate and individual registration of
the parcels of land in their respective names.

Since the Property Registration Decree failed to provide for such a situation, then this Court refers to
the Rules of Court to determine the proper course of action. Section 34 of the Property Registration
Decree itself provides that, "[t]he Rules of Court shall, insofar as not inconsistent with the provisions
of this Decree, be applicable to land registration and cadastral cases by analogy or in a suppletory
character and whenever practicable and convenient."

Considering every application for land registration filed in strict accordance with the Property
Registration Decree as a single cause of action, then the defect in the joint application for
registration filed by the respondents with the MTC constitutes a misjoinder of causes of action and
parties. Instead of a single or joint application for registration, respondents Jeremias and David,
more appropriately, should have filed separate applications for registration of Lots No. 8422 and
8423, respectively.

Misjoinder of causes of action and parties do not involve a question of jurisdiction of the court to hear
and proceed with the case.26 They are not even accepted grounds for dismissal thereof. 27 Instead,
under the Rules of Court, the misjoinder of causes of action and parties involve an implied admission
of the court's jurisdiction. It acknowledges the power of the court, acting upon the motion of a party
to the case or on its own initiative, to order the severance of the misjoined cause of action, to be
proceeded with separately (in case of misjoinder of causes of action); and/or the dropping of a party
and the severance of any claim against said misjoined party, also to be proceeded with separately
(in case of misjoinder of parties).

The misjoinder of causes of action and parties in the present Petition may have been corrected by
the MTC motu propio or on motion of the petitioner Republic. It is regrettable, however, that the MTC
failed to detect the misjoinder when the application for registration was still pending before it; and
more regrettable that the petitioner Republic did not call the attention of the MTC to the fact by filing
a motion for severance of the causes of action and parties, raising the issue of misjoinder only
before this Court.

B. Respondents, however, failed to comply with the publication requirements mandated by the
Property Registration Decree, thus, the MTC was not invested with jurisdiction as a land registration
court.

Although the misjoinder of causes of action and parties in the present Petition did not affect the
jurisdiction of the MTC over the land registration proceeding, this Court, nonetheless, has discovered
a defect in the publication of the Notice of Initial Hearing, which bars the MTC from assuming
jurisdiction to hear and proceed with respondents' application for registration.

A land registration case is a proceeding in rem,28 and jurisdiction in rem cannot be acquired unless

there be constructive seizure of the land through publication and service of notice. 29
Section 23 of the Property Registration Decree requires that the public be given Notice of the Initial
Hearing of the application for land registration by means of (1) publication; (2) mailing; and (3)
posting. Publication of the Notice of Initial Hearing shall be made in the following manner:

1. By publication. –

Upon receipt of the order of the court setting the time for initial hearing, the Commissioner of
Land Registration shall cause a notice of initial hearing to be published once in the Official
Gazette and once in a newspaper of general circulation in the
Philippines: Provided, however, that the publication in the Official Gazette shall be sufficient
to confer jurisdiction upon the court. Said notice shall be addressed to all persons appearing
to have an interest in the land involved including the adjoining owners so far as known, and
"to all whom it may concern." Said notice shall also require all persons concerned to appear
in court at a certain date and time to show cause why the prayer of said application shall not
be granted.

Even as this Court concedes that the aforequoted Section 23(1) of the Property Registration Decree
expressly provides that publication in the Official Gazette shall be sufficient to confer jurisdiction
upon the land registration court, it still affirms its declaration in Director of Lands v. Court of
Appeals30 that publication in a newspaper of general circulation is mandatory for the land registration
court to validly confirm and register the title of the applicant or applicants. That Section 23 of the
Property Registration Decree enumerated and described in detail the requirements of publication,
mailing, and posting of the Notice of Initial Hearing, then all such requirements, including publication
of the Notice in a newspaper of general circulation, is essential and imperative, and must be strictly
complied with. In the same case, this Court expounded on the reason behind the compulsory
publication of the Notice of Initial Hearing in a newspaper of general circulation, thus –

It may be asked why publication in a newspaper of general circulation should be deemed

mandatory when the law already requires notice by publication in the Official Gazette as well
as by mailing and posting, all of which have already been complied with in the case at hand.
The reason is due process and the reality that the Official Gazette is not as widely read and
circulated as newspaper and is oftentimes delayed in its circulation, such that the notices
published therein may not reach the interested parties on time, if at all. Additionally, such
parties may not be owners of neighboring properties, and may in fact not own any other real
estate. In sum, the all encompassing in rem nature of land registration cases, the
consequences of default orders issued against the whole world and the objective of
disseminating the notice in as wide a manner as possible demand a mandatory construction
of the requirements for publication, mailing and posting. 31

In the instant Petition, the initial hearing was set by the MTC, and was in fact held, on 03 September
1999 at 8:30 a.m. While the Notice thereof was printed in the issue of the Official Gazette, dated 02
August 1999, and officially released on 10 August 1999, it was published in The Freeman Banat
News, a daily newspaper printed in Cebu City and circulated in the province and cities of Cebu and
in the rest of Visayas and Mindanao, only on 19 December 1999, more than three months after the
initial hearing.

Indubitably, such publication of the Notice, way after the date of the initial hearing, would already be
worthless and ineffective. Whoever read the Notice as it was published in The Freeman Banat
News and had a claim to the Subject Lots was deprived of due process for it was already too late for
him to appear before the MTC on the day of the initial hearing to oppose respondents' application for
registration, and to present his claim and evidence in support of such claim. Worse, as the Notice
itself states, should the claimant-oppositor fail to appear before the MTC on the date of initial
hearing, he would be in default and would forever be barred from contesting respondents' application
for registration and even the registration decree that may be issued pursuant thereto. In fact, the
MTC did issue an Order of Special Default on 03 September 1999.

The late publication of the Notice of Initial Hearing in the newspaper of general circulation is
tantamount to no publication at all, having the same ultimate result. Owing to such defect in the
publication of the Notice, the MTC failed to constructively seize the Subject Lots and to acquire
jurisdiction over respondents' application for registration thereof. Therefore, the MTC Judgment,
dated 21 December 1999, ordering the registration and confirmation of the title of respondents
Jeremias and David over Lots No. 8422 and 8423, respectively; as well as the MTC Order, dated 02
February 2000, declaring its Judgment of 21 December 1999 final and executory, and directing the
LRA Administrator to issue a decree of registration for the Subject Lots, are both null and void for
having been issued by the MTC without jurisdiction.

II

Period of Possession

Respondents failed to comply with the required period of possession of the Subject Lots for the
judicial confirmation or legalization of imperfect or incomplete title.

While this Court has already found that the MTC did not have jurisdiction to hear and proceed with
respondents' application for registration, this Court nevertheless deems it necessary to resolve the
legal issue on the required period of possession for acquiring title to public land.

Respondents' application filed with the MTC did not state the statutory basis for their title to the
Subject Lots. They only alleged therein that they obtained title to the Subject Lots by purchase from
their parents, spouses Gregorio Herbieto and Isabel Owatan, on 25 June 1976. Respondent
Jeremias, in his testimony, claimed that his parents had been in possession of the Subject Lots in
the concept of an owner since 1950. 32

Yet, according to the DENR-CENRO Certification, submitted by respondents themselves, the

Subject Lots are "within Alienable and Disposable, Block I, Project No. 28 per LC Map No. 2545 of
Consolacion, Cebu certified under Forestry Administrative Order No. 4-1063, dated June 25, 1963.
Likewise, it is outside Kotkot-Lusaran Mananga Watershed Forest Reservation per Presidential
Proclamation No. 932 dated June 29, 1992." 33 The Subject Lots are thus clearly part of the public
domain, classified as alienable and disposable as of 25 June 1963.

As already well-settled in jurisprudence, no public land can be acquired by private persons without
any grant, express or implied, from the government;34 and it is indispensable that the person claiming
title to public land should show that his title was acquired from the State or any other mode of
acquisition recognized by law.35

The Public Land Act, as amended, governs lands of the public domain, except timber and mineral
lands, friar lands, and privately-owned lands which reverted to the State. 36 It explicitly enumerates
the means by which public lands may be disposed, as follows:

(1) For homestead settlement;

(2) By sale;
 (3) By lease;

(4) By confirmation of imperfect or incomplete titles;

(a) By judicial legalization; or

(b) By administrative legalization (free patent). 37

Each mode of disposition is appropriately covered by separate chapters of the Public Land Act
because there are specific requirements and application procedure for every mode. 38 Since
respondents herein filed their application before the MTC,39 then it can be reasonably inferred that
they are seeking the judicial confirmation or legalization of their imperfect or incomplete title over the
Subject Lots.

Judicial confirmation or legalization of imperfect or incomplete title to land, not exceeding 144
hectares,40 may be availed of by persons identified under Section 48 of the Public Land Act, as
amended by Presidential Decree No. 1073, which reads –

Section 48. The following-described citizens of the Philippines, occupying lands of the public
domain or claiming to own any such lands or an interest therein, but whose titles have not
been perfected or completed, may apply to the Court of First Instance of the province where
the land is located for confirmation of their claims and the issuance of a certificate of title
thereafter, under the Land Registration Act, to wit:

(a) [Repealed by Presidential Decree No. 1073].

(b) Those who by themselves or through their predecessors-in-interest have been in

open, continuous, exclusive, and notorious possession and occupation of agricultural
lands of the public domain, under a bona fide claim of acquisition of ownership, since
June 12, 1945, or earlier, immediately preceding the filing of the applications for
confirmation of title, except when prevented by war or force majeure. These shall be
conclusively presumed to have performed all the conditions essential to a
Government grant and shall be entitled to a certificate of title under the provisions of
this chapter.

(c) Members of the national cultural minorities who by themselves or through their
predecessors-in-interest have been in open, continuous, exclusive and notorious
possession and occupation of lands of the public domain suitable to agriculture
whether disposable or not, under a bona fide claim of ownership since June 12, 1945
shall be entitled to the rights granted in subsection (b) hereof.

Not being members of any national cultural minorities, respondents may only be entitled to judicial
confirmation or legalization of their imperfect or incomplete title under Section 48(b) of the Public
Land Act, as amended. Section 48(b), as amended, now requires adverse possession of the land
since 12 June 1945 or earlier. In the present Petition, the Subject Lots became alienable and
disposable only on 25 June 1963. Any period of possession prior to the date when the Subject Lots
were classified as alienable and disposable is inconsequential and should be excluded from the
computation of the period of possession; such possession can never ripen into ownership and
unless the land had been classified as alienable and disposable, the rules on confirmation of
imperfect title shall not apply thereto. 41 It is very apparent then that respondents could not have
complied with the period of possession required by Section 48(b) of the Public Land Act, as
amended, to acquire imperfect or incomplete title to the Subject Lots that may be judicially confirmed
or legalized.

The confirmation of respondents' title by the Court of Appeals was based on the erroneous
supposition that respondents were claiming title to the Subject Lots under the Property Registration
Decree. According to the Decision of the Court of Appeals, dated 22 November 2002, Section 14(4)
of the Property Registration Decree allows individuals to own land in any other manner provided by
law. It then ruled that the respondents, having possessed the Subject Lots, by themselves and
through their predecessors-in-interest, since 25 June 1963 to 23 September 1998, when they filed
their application, have acquired title to the Subject Lots by extraordinary prescription under Article
1113, in relation to Article 1137, both of the Civil Code. 42

The Court of Appeals overlooked the difference between the Property Registration Decree and the
Public Land Act. Under the Property Registration Decree, there already exists a title which is
confirmed by the court; while under the Public Land Act, the presumption always is that the land
applied for pertains to the State, and that the occupants and possessors only claim an interest in the
same by virtue of their imperfect title or continuous, open, and notorious possession. 43 As
established by this Court in the preceding paragraphs, the Subject Lots respondents wish to register
are undoubtedly alienable and disposable lands of the public domain and respondents may have
acquired title thereto only under the provisions of the Public Land Act.

However, it must be clarified herein that even though respondents may acquire imperfect or
incomplete title to the Subject Lots under the Public Land Act, their application for judicial
confirmation or legalization thereof must be in accordance with the Property Registration Decree, for
Section 50 of the Public Land Act reads –

SEC. 50. Any person or persons, or their legal representatives or successors in right,
claiming any lands or interest in lands under the provisions of this chapter, must in every
case present an application to the proper Court of First Instance, praying that the validity of
the alleged title or claim be inquired into and that a certificate of title be issued to them under
the provisions of the Land Registration Act.44

Hence, respondents' application for registration of the Subject Lots must have complied with the
substantial requirements under Section 48(b) of the Public Land Act and the procedural
requirements under the Property Registration Decree.

Moreover, provisions of the Civil Code on prescription of ownership and other real rights apply in
general to all types of land, while the Public Land Act specifically governs lands of the public domain.
Relative to one another, the Public Land Act may be considered a special law 45 that must take
precedence over the Civil Code, a general law. It is an established rule of statutory construction that
between a general law and a special law, the special law prevails – Generalia specialibus non
derogant.46

WHEREFORE, based on the foregoing, the instant Petition is GRANTED. The Decision of the Court
of Appeals in CA-G.R. CV No. 67625, dated 22 November 2002, is REVERSED. The Judgment of
the MTC of Consolacion, Cebu in LRC Case No. N-75, dated 21 December 1999, and its Order,
dated 02 February 2000 are declared NULL AND VOID. Respondents' application for registration is
DISMISSED.

SO ORDERED.