Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-28529 April 30, 1979

L. P. LEVISTE & COMPANY, INC., and NITA U. BERTHELSEN, petitioners,

vs.
HON. ANTONIO H. NOBLEJAS in his capacity as Land Registration Commissioner, THE
REGISTER OF DEEDS OF RIZAL, and MARIA VILLANUEVA, respondents.

Roberto E. Falgui for petitioners.

Felino S. Megino for private respondent.

MELENCIO-HERRERA, J.:

This is an appeal by certiorari from the Resolution of the Land Registration Commission in LRC
Consulta No. 555 issued on October 20, 1967.

The property involved, situated in Parañaque, Rizal has a total area of approximately 1.6 hectares
and is covered by Transfer Certificate of Title No. 108425 of the Province of Rizal in the name of Z.
Garcia Realty, Inc, (Garcia Realty, for short), a corporation duly organized and existing under our
laws. On a date that does not appear of record, the property was converted into a subdivision called
the Garville Subdivision. This subdivision has blocks and certain lots and the controversy in this case
centers on Lot 6, Block 4 (subsequently Lot 16, plan (LRC) Psd-56800).

The following chronology will' explain the controversy between the parties:

September 7, 1964 — Notice of lis pendens (Entry No. 7115), presented by Melecio

B. Emata, noting the pendency of Civil Case No. 2489-P of the Court of First
Instance of Rizal entitled Vivencio R. de Guzman vs. Z. Garcia & Company referring
specifically to Lot 3, redesignated as Lot 5 of the new subdivision plan. The block
number was not indicates.

It is to be noted that the lis pendens does not refer to Lot 6, Block 4.

April 28, 1966 — Affidavit of Adverse Claim (Entry No. 55209)covering Lot 1, Block
5 presented by J. Antonio Leviste, Executive Vice President of petitioner company,
based on an assignment in his favor by one Leticia P. Ramos, buyer of said lot from
Garcia Realty.

Also to be noted is that this has no reference to Lot 6, Block 4.

May 6, 1966 — Affidavit of Adverse Claim (Entry No. 55804) covering Lot 6, Block
4 (subsequently Lot 16, plan (LRC) Psd 56800), consisting of 510 square meters
 presented by respondent Maria Villanueva based on an agreement to sell in her
favor executed by Garcia Realty.

This is the Disputed Lot.

July 19, 1966 — Attachment (Entry No. 62224) presented by petitioner Nita U.
Berthelsen "affecting all rights, interests and participation of defendants Z. Garcia
Realty Inc., in the property described in this certificate of title in Accordance with
Notice of Attachment or Levy issued by the Provincial Sheriff of Rizal in Civil Case,
No Court of First Instance of Manila, , entitled Nita U. Berthelsen versus, Garcia
Realty, Inc., etc.

The attachment covers the Disputed Lot.

July 25, 1966 — Attachment (Entry No. 62748) presented by Leviste & Co. "affecting
all rights, interests and participation of the defendant Garcia Realty, Inc., in the
property described by the certificate of title, in accordance with the Notice of
Attachment or Levy issued by the Provincial Sheriff of Rizal, in Civil Case No. 9269
of the Court of First Instance of Rizal entitled L P. Leviste. Inc., versus Z. Garcia
Realty, Inc."

This attachment also covers the Disputed Lot.

November 18, 1966 — Attachment, (Entry No. 73465) "affecting all rights, interest
and participation of the defendants, Z. Garcia & Co. in the property described herein,
in accordance with the Notice of Attachment or Levy issued by the Provincial Sheriff
of Rizal in Civil Case No. 2489-P of the Court of First Instance of Rizal,
entitled Vivencio R, de Guzman vs. Z. Garcia & Co.

Again, the attachment covers the Disputed Lot.

May 29,1967 — Garcia Realty and respondent Villanueva consummated a contract

of sale over the Disputed Lot.

Respondent Villanueva sought to have the sale registered and title issued in her favor, free of any
encumbrance, but petitioners Leviste and Berthelsen objected alleging that they had registered
adverse claims and attachments. The Register of Deeds refused to issue a new title to Villanueva
without carrying over (A) the two annotations registered prior to Villanueva's adverse claim, namely,
the notice of lis pendens (Entry No. 7115) made on September 7, 1964 referring to a pending Civil
Case No. 2489-P in the Court of First Instance of Rizal entitled Vivencio R. de Guzman vs. Z. Garcia
Realty, Inc.; and the adverse claim (Entry No. 55205) of J. Antonio Leviste registered on April 28,
1966 according to the deed of assignment in his favor executed by one Leticia P. Ramos; and (B)
the attachments covering the entire property annotated on the title subsequent to Villanueva's
adverse claim, namely, the Berthelsen attachment on July 19, 1966 (Entry No. 62224), the Leviste
attachment on July 25, 1966 (Entry No. 62748), and the attachment issued in connection with Civil
Case No. 2489P of the Court of First Instance of Rizal on November 18, 1966 (Entry No. 73465).

The position taken by the Register of Deeds was predicated on the following reasons:
 1. A registered adverse claim is only a claim and not a lien or encumbrance on the
property, Hence, the superior rights of lienholder establish by law cannot be involved
in this case.

The case would have been otherwise, if the agreement itself were the one registered.

2. From the annotations of the said attachments on Transfer Certificate of Title No.
108425, it appears clearly that the whole property known as Lot 1 E-2, describe
therein is being attached; therefore, it is no longer necessary to make any distinction.

Upon the request of respondent Villanueva, the Register of Deeds elevated the matter en consults to
the Land Registration Commission, which on October 20, 1967, issued its Resolution, the decretal
portion of which is worded thus:

IN VIEW OF THE FOREGOING, this Commission holds that the deed of sale may be
registered; Transfer Certificate of Title No. 108425 may be partially cancelled; and a
new transfer certificate of title covering Lot 16 of subdivision plan (LRC) Psd-66800
may be issued to Maria Villanueva free of any encumbrance.

SO ORDERED.  1

In disposing of the consulta, the Commission opined:

A registered notice of adverse claim takes priority over all subsequent encumbrances
and becomes subject only to all annotations registered prior to it, except legal liens
While the notice of adverse claim of Maria Villanueva appears to be subject to the
notice of lis pendens filed in connection with Civil Case No. 2489-P of the Court of
First Instance of Rizal and to the notice of adverse claim of J. Antonio C. Leviste,
both having been registered ahead, yet, as said notice of lis pendens and adverse
claim refer to specific lots other than Lot 6, Block 4, sold to Maria Villanueva, her
notice of adverse claim becomes free of any encumbrances, much less of the
attachments subsequently annotated.

Petitioners' Motion for Reconsideration having been denied, they interposed this appeal by certiorari,
with the following Assignments of Error:

THE HONORABLE COMMISSIONER ERRED IN NOT CONSIDERING THE FACT

THAT RESPONDENT MARIA VILLANUEVA'S ADVERSE CLAIM HAS FOR IT'S
BASIS AN UNREGISTERED 'AGREEMENT TO SELL.' SAID ADVERSE CLAIM,
THEREFORE, HAS NO FORCE AND EFFECT AND, HENCE, A NULLITY AS FAR
AS PETITIONERS ARE CONCERNED.

II

THE HONORABLE COMMISSIONER ERRED IN NOT CONSIDERING THE FACT

THAT RESPONDENT MARIA VILLANUEVA ACTED IN BAD FAITH WHEN SHE
ENTERED INTO A CONTRACT OF ABSOLUTE SALE WITH Z. GARCIA REALTY,
INC. AS REGARDS THAT PARCEL OF LAND (LOT 6, BLOCK 4, OF THE SCHEME
 PLAN OF GARVILLE SUBDIVISION AND COVERED BY TRANSFER
CERTIFICATE OF TITLE NO. 108425).

III

THE HONORABLE COMMISSIONER ERRED IN NOT CONSIDERING THE FACT

THAT RESPONDENT, MARIA VILLANUEVA, FAILED TO EXHAUST THE REMEDY
OF REGISTERING THE 'AGREEMENT TO SELL' SHE EXECUTED WITH Z.
GARCIA REALTY, INC.  2

Petitioners take the position that:

The registered adverse claim or lien of J. Antonio Leviste under Entry No. 55209
involving Lot 5 of Block 5 of the Garville Subdivision, according to the deed of
assignment executed by Leticia Ramos is prior to and superior to that of petitioner
Maria Villanueva (herein respondent). Hence, the hen annotated in favor of Leviste
holds preference over that of Maria Villanueva.

The agreement to sell in favor of Maria Villanueva was not registered. Hence, the
rights of a lienholder established by law cannot be invoked in favor of petitioner
(herein respondent).

On the other hand, respondent Villanueva contends that her adverse claim is valid; that it conforms
with the requirements of Section 110 of Act 496, and until found to be frivolous, vexatious or
unmeritorious by a Court of competent jurisdiction, it is an interest or hen protected by law.
Moreover, a registered adverse claim is a lien or encumbrance on the property, specifically on the
particular portion which it covers. Furthermore, Section 110 of Act 496 does not require registration
as the basis of the adverse claim, referring to the agreement to sell in this case, it being sufficient
that a statement be made setting forth the basis of the claim.

The rule is that between two involuntary documents, the earlier entry prevails.   Ordinarily, therefore,
3

the notice of lis pendens entered on September 7, 1964, and Leviste's adverse claim annotated on
April 28, 1966, both registered prior to respondent Villanueva's adverse claim, which was entered on
May 6, 1966, are entitled to precedence over the latter. However, inasmuch as the aforesaid lis
pendens refers to Lot 3 (redesignated as Lot 5) and Leviste's adverse claim to Lot 1, Block 5,
notwithstanding their prior registration, they cannot affect Villanueva's adverse claim over Lot 6,
Block 4. The aforesaid inscriptions, therefore, need not be carried over to the new title to be issued
in Villanueva's favor.

The question to resolve is the priority between Villanueva's adverse claim and the attachments of
Berthelsen, Leviste, and that in Civil Case No. 2489- P of the Court of First Instance of Rizal all
registered subsequent to Villanueva's adverse claim. The answer would depend on whether
Villanueva's adverse claim is, in fact, registerable, and if so, whether it can be preferred over the
attachments.

Section 110 of Act 496 provides:

Whoever claims any right or interest in registered land adverse to the registered
owner, arising subsequent to the date of the original registration, may, if no other
provision is made in the Land Registration Act for registering the same, make a
statement in writing setting forth fully his alleged right or interest, and how or under
 whom acquired, and a Reference to the volume and page of the certificate of title of
the registered owner, and a description of the land in which the right or interest is
claimed. The statement shall be signed and sworn to, and shall state the adverse
claimant's residence, and designate a place at which all notices may be served upon
him. This shall be entitled to registration as an adverse claim, and the court, upon a
petition of any party in interest, shall grant a speedy hearing upon the question of the
validity of such adverse claim and shall enter such decree therein as justice and
equity may require. If the claim is adjudged to be invalid, the registration shall be
cancelled. If in any case the court after notice and hearing finds that claim thus
registered was frivolous or vexatious, it may tax the adverse claimant double or
treble costs in its discretion.

The basis of respondent Villanueva's adverse claim was an agreement to sell executed in her favor
by Garcia Realty. An agreement to self is a voluntary instrument as it is a wilful act of the registered
owner. As such voluntary instrument, Section 50 of Act No. 496 expressly provides that the act of
registration shall be the operative act to convey and affect the land. And Section 55 of the same Act
requires the presentation of the owner's duplicate certificate of title for the registration of any deed or
voluntary instrument. As the agreement to see involves an interest less than an estate in fee simple,
the same should have been registered by filing it with the Register of Deeds who, in turn makes a
brief memorandum thereof upon the original and owner's duplicate certificate of title.   The reason for
4

requiring the production of the owner's duplicate certificate in the registration of a voluntary
instrument is that, being a wilful act of the registered owner, it is to be presumed that he is interested
in registering the instrument and would willingly surrender, present or produce his duplicate
certificate of title to the Register of Deeds in order to accomplish such registration.   However, where
5

the owner refuses to surrender the duplicate certificate for the annotation of the voluntary instrument,
the grantee may file with the Register of Deeds a statement setting forth his adverse claim, as
provided for in Section 110 of Act No. 496.   In such a case, the annotation of the instrument upon
6

the entry book is sufficient to affect the real estate to which it relates, although Section 72 of Act No.
496 imposes upon the Register of Deeds the duty to require the production by the Registered owner
of his duplicate certificate for the inscription of the adverse claim.   The annotation of an adverse
7

claim is a measure designed to protect the interest of a person over a piece of real property where
the registration of such interest or right is not otherwise provided for by the Land Registration Act,
and serves as a notice and warming to third parties dealing with said property that someone is
claiming an interest on the same or a better right than the registered owner thereof.  8

In Register of Deeds of Quezon City vs. Nicandro (1 SCRA 1334 [1961]), it was held that for the
special remedy of adverse claim to be availed of, it must be shown that there is no other provision in
the law for registration of the claimant's alleged right or interest in the property. In said case, the
basis of the adverse claim was a perfected contract of sale. As the Land Registration Act specifically
prescribes the procedure for registration of the vendee's right on a registered property (Section 57),
the filing of an adverse claim was held ineffective for the purpose of protecting the vendee's right.

In the case at bar, it does not appear that Villanueva attempted to register the agreement to sell
under Section 52 of Act No. 496 and that the registered owner, Garcia Realty, refused to surrender
the duplicate certificate for the annotation of said instrument. Instead, Villanueva merely filed an
adverse claim based on said agreement to sell Considering that Section 62 of the Land Registration
Act prescribes the procedure for the registration of Villanueva's interest less than an estate in fee
simple on the disputed lot and there being no showing of her inability to produce the owner's
duplicate certificate, the remedy provided in Section 110 of Act 496, which was resorted to by
Villanueva, is, therefore, ineffective for the purpose of protecting her right or interest on the disputed
lot.
Inasmuch as the adverse claim filed by Villanueva was not valid, the same did not have the effect of
a conveyance of her right or interest on the disputed lot and could not prejudice any right that may
have arisen thereafter in favor of third parties. Consequently, the attachments of Berthelsen, Leviste,
and that in Civil Case No. 2489-P of the Court of First Instance of Rizal covering the disputed lot are
superior to that acquired by Villanueva and will have to be carried over to the new title to be issued
in her favor. Thus, Section of Act 496 provides that:

If at the time of any transfer there appear upon the registration book encumbrances
or claims adverse to the title of the registered owner, they shall be stated in the new
certificate or certificates, except so far as they may be simultaneously released or
discharged.

WHEREFORE, the Resolution of the Land Registration Commission in LRC Consults No. 555
decreeing the issuance of a new transfer certificate of title covering Lot 16 of subdivision plan (LRC)
Psd-56800 in the name of Maria Villanueva free of any encumbrance is hereby set aside. The
attachments of Nita U. Berthelsen (Entry No. 62224). Leviste & Co. (Entry No. 62748) and that in
Civil Case No. 2489-P of the Court of First Instance of Rizal (Entry No. 73465), must have to be
carried over to the new transfer certificate of title to be issued to respondent Maria Villanueva.

No pronouncement as to costs.

SO ORDERED.

Teehankee (Chairman), Makasiar, Fernandez, Guerrero, and De Castro, JJ., concur.

 THIRD DIVISION

[GR. No. 166536 : February 04, 2010]

FLOR MARTINEZ, REPRESENTED BY MACARIO MARTINEZ, AUTHORIZED REPRESENTATIVE AND

ATTORNEY-IN-FACT, PETITIONER, VS. ERNESTO G. GARCIA AND EDILBERTO M. BRUA,
RESPONDENTS.

DECISION

PERALTA, J.:

Before us is a special civil action for certiorari under Rule 65 of the Rules of Court to annul and set aside the
Decision[1] dated August 12, 2004 and the Resolution[2] dated November 18, 2004 of the Court of Appeals
(CA) in CA-G.R. CV No. 61591, which reversed and set aside the Decision [3] dated April 15, 1998 and
Order[4] dated August 11, 1998 of the Regional Trial Court (RTC) of Pasig, Branch 267, in Special Civil Action
No. 574.

The factual antecedents are as follows:

Respondent Edilberto Brua was the registered owner of a parcel of land located in Mandaluyong, Rizal,
covered by Transfer Certificate of Title (TCT) No. 346026 of the Registry of Deeds of Rizal, which is the
subject matter of this case. The property was first mortgaged to the Government Service Insurance System
(GSIS), and such mortgage was annotated at the back of TCT No. 346026 as Entry No. 91370, inscribed on
June 5, 1974.[5] On February 5, 1980, respondent Brua obtained a loan from his brother-in-law, respondent
Ernesto Garcia, in the amount of One Hundred Fifty Thousand Pesos (P150,000.00) and, to secure the
payment of said loan, respondent Brua mortgaged the subject prbperty to respondent Garcia, as evidenced
by a Deed of Real Estate Mortgage[6] executed in respondent Garcia's favor. Since the title to the subject
property was in the possession of the GSIS and respondent Garcia could not register the Deed of Real Estate
Mortgage, he then executed an Affidavit of Adverse Claim [7] and registered it with the Registry of Deeds of
Rizal on June 23, 1980 as Entry No. 49853/T-346026,[8] which remained uncanceled up to this time.

Sometime in October 1991, respondent Brua requested respondent Garcia to pay the former's loan with the
GSIS, so that the title to the subject property would be released to the latter. Respondent Garcia then paid
GSIS the amount of P400,000.00 and, thus, the title to the subject property was released to him.

On October 22, 1991, a Deed of Absolute Sale[9] was executed between respondents Garcia and Brua over
the subject property, where respondent Brua sold the property in the amount of P705,000.00. In the same
deed, it was stated that the subject property was only a partial payment of respondent Brua's mortgage
indebtedness to respondent Garcia, which he could no longer redeem from the latter. Respondent Garcia
then registered the Deed of Sale with the Registry of Deeds of Rizal on October 24 1991, and a new TCT No.
5204[10] was issued in the names of respondent Garcia and his wife. However, the annotations at the back of
the previous title were carried over to the new title, to wit: Entry No. 56837, a Notice of Levy on Attachment
and/or Levy inscribed on January 8, 1981;[11] Entry No. 2881 showing a Notice of Levy on Execution in favor
of petitioner Flor Martinez, which was inscribed on July 11, 1988; [12] Entry No. 3706, which was a Certificate
of Sale in favor of petitioner inscribed on September 2, 1988; [13] Entry No. 72854, which was a Notice of
Levy on Execution in favor of Pilipinas Bank inscribed on December 8, 1981; [14] and Entry No. 16611
inscribed on October 24, 1991, which was the cancellation of respondent Brua's mortgage with GSIS. [15]

It appeared that the annotations found at the back of the title of the subject property in favor of
petitioner, i.e., Notice of Levy on Attachment and/or Levy, Notice of Levy on Execution, and Certificate of
Sale, were all made in connection with petitioner's action for Collection of Sum of Money, which she filed
against respondent Brua at the RTC of Makati City, Branch 60, docketed as Civil Case No. 39633. In that
case, a decision was rendered in favor of petitioner, where the RTC ordered respondent Bma to pay the
former the amount of P244,594.10, representing the value of the dishonored checks plus 12% interest per
annum as damages and the premium paid by petitioner for the attachment bond. The decision became final
and executory as respondent Brua failed to appeal the same, and a notice of levy on execution was issued.
A public auction was subsequently conducted, where the subject property was awarded to petitioner as the
sole bidder in the amount of P10,000.00, and a Certificate of Sale was issued in her favor.
The annotation of Pilipinas Bank's Notice of Levy on Execution annotated as Entry No. 72854 on the title of
the subject property was by virtue of a civil case filed by Filipinas Manufacturers Bank, now known as
Pilipinas Bank, against respondent Brua.

On February 9, 1994, respondents Garcia and Brua filed with the RTC of Pasig, Branch 267, an Action to
Quiet Title, initially against petitioner due to the encumbrances/liens annotated on respondent Garcia's new
title. They contended that these encumbrances/liens were registered subsequent to the annotation of
respondent Garcia's adverse claim made in 1980, and prayed that these be canceled. Subsequently, the
complaint was amended to include Pilipinas Bank as an additional defendant. Petitioner and Pilipinas Bank
filed their respective Answers thereto. Trial thereafter ensued.

On April 15, 1998, the RTC rendered its decision dismissing respondent Garcia's action for quieting of title,
the dispositive portion of which reads:

WHEREFORE, PREMISES CONSIDERED, the instant complaint is hereby dismissed for lack of merit and
judgment is hereby rendered in favor of defendants Flor Martinez and Pilipinas Bank as against plaintiffs
Ernesto Garcia and Edilberto Brua who are further directed to pay both defendants attorney's fees in the
amount of P50,000.00 each.

Accordingly, the judicial inscriptions particularly, Entry No. 3706/T-346026, annotation of certificate of sale
and Entry No. 72854/T-346026 are held to be valid, subsisting liens which do not constitute a cloud on
Transfer Certificate of Title No. 5204.[16]

In so ruling, the RTC found that the adverse claim which respondent Garcia caused to be annotated on the
previous title of the subject property, i.e, TCT No. 346026, on June 23, 1980 was predicated on his interest
as a mortgagee of a loan of PI 50,000.00, which he extended to respondent Brua; that respondent Garcia's
adverse interest was merely that of a second mortgagee, as he was not yet the purchaser of the subject
property as of said date; that when the judicial liens, i.e., Notice of Levy on Attachment and/or Levy and
Notice of Levy on Execution, were caused to be registered by petitioner on respondent Brua's title on
January 8, 1981 and July 8, 1998, respectively, by virtue of petitioner being adjudged judgment creditor by
Branch 60 of RTC Makati, respondent Garcia's claim became inferior to that of petitioner. The RTC said that
respondent Garcia's inaction to preserve his adverse claim as a second mortgagee, which was inscribed on
June 23, 1980, and his sudden decision to redeem and purchase the subject property from the GSIS in
October 1991 -- when petitioner's Notice of Levy on Attachment and/or Levy, Notice of Levy on Execution
and Certificate of Sale were already inscribed at the back of respondent Brua's title -- showed bad faith on
the part of respondent Garcia; that respondent Brua did not even testify or participate in the case, except
when he was impleaded as a plaintiff in the case. The RTC did not give credit to respondent Garcia's claim
that he and respondent Brua had no prior knowledge of the occurrence of a public auction and the
consequent annotation of the certificate of sale, and found respondent: Garcia to be a buyer in bad faith of
the subject property.

The RTC also ruled that the Notice of Levy on Execution, which was annotated on December 8, 1981 as
Entry No. 72854 on respondent Brua's title arising from Civil'Case No. 7262 entitled "Pilipinas Bank v.
Edilberto Brua" was a valid levy on the subject property in favor of Pilipinas Bank. The levy could not be
canceled, as this would impair the interest of the bank which had been decided upon by a co-equal court.
The RTC found that the sale between respondents appeared to be tainted with bad faith, which constrained
petitioner and Pilipinas Bank from engaging the services of lawyers; thus, the award of attorney's fees in the
latter's favor.

Respondents' motion for reconsideration was denied by the RTC on August 11, 1998.

Respondents filed their appeal with the CA. However, respondent Brua failed to file his appellant's brief;
thus, his appeal was considered abandoned and dismissed. Petitioner and Pilipinas Bank filed their
respective appellees' briefs.

On August 12, 2004, the CA reversed and set aside the RTC decision, the dispositive portion of which reads:

WHEREFORE, the appealed Decision dated April 15, 1998 is REVERSED and SET ASIDE. Granting the instant
appeal, Entry No. 72854 (Notice of Levy on Execution in favor of Pilipinas Bank), Entry No. 2881 (Notice of
Levy on Execution in favor of Flor Martinez) and Entry No. 3706 (Certificate of Sale in favor of Flor Martinez)
inscribed in TCT No. 346026 and carried over to TCT No. 5204, are hereby CANCELLED. [17]

The CA said that a subsequent sale of property covered by a certificate of title cannot prevail over an
adverse claim, duly sworn to and annotated on the certificate of title previous to the sale; that while one
who buys a property from the registered owner need not have to look behind the title, he is nevertheless
bound by the liens and encumbrances annotated thereon; and, thus, one who buys without checking the
vendor's title takes all the risks and losses consequent to such failure. The CA found that in order to protect
his interest, respondent Garcia executed an Affidavit of Adverse Claim on June 23, 1980, annotated it on the
title of the subject property under Entry No. 49853 and it has remained uncanceled up to this time; that
such adverse claim was registered prior to the inscription of the Certificate of Sale in favor of petitioner
under Entry No. 3706 and Pilipinas Bank's Notice of Levy on Execution under Entry No. 72854; that the prior
registration of respondent Garcia's adverse claim effectively gave petitioner and Pilipinas Bank notice of the
former's right to the subject property and, thus, petitioner was deemed to have knowledge of respondent
Garcia's claim and could not be considered as a buyer in good faith at the time she purchased the subject
property in the public auction; that petitioner could not claim that she was a purchaser in good faith, since
respondent Garcia's adverse claim was entered on June 23, 1980, eight years ahead of petitioner's
Certificate of Sale on September 2, 1988; that when the Notice of Levy on Execution in favor of Pilipinas
Bank was annotated on respondent Brua's title, the sheriff who caused the annotation was charged with
knowledge that the property sought to be levied upon on execution was encumbered by an interest, which
was the same if not better than that of the registered owner thereof; and that such notice of levy could not
prevail over the existing adverse claim of respondent Garcia inscribed on the title as can be deduced from
Section 12, Rule 39 of the Rules of Court.

The CA found that the RTC erred in concluding that respondent Garcia was a purchaser in bad faith, since
his adverse claim was entered in respondent Brua's title in 1980, and respondent Garcia could not have
foretold at the time he caused such annotation of adverse claim that petitioner would purchase the same
property eight years thereafter; and that while good faith is presumed, bad faith must be established by
competent proof by the party alleging the same; and, thus, in the absence of respondent Garcia's bad faith,
he is deemed to be a purchaser in good faith, and his interest in the property must not be disturbed.

The CA also found that a Notice of Adverse Claim remains valid even after the lapse of 30 days, as provided
for in Sec, 70 of Presidential Decree No. (PD) 1529 pursuant to our ruling in Sajonas v. CA; that since no
petition was filed by petitioner for the cancellation of respondent Garcia's Notice of Adverse Claim, the
adverse claim subsisted and his rights over the subject property must consequently be upheld.

Petitioner's motion for reconsideration was denied by the CA in a Resolution dated November 18, 2004.

Petitioner is now before us via a petition for certiorari under Rule 65, i alleging grave abuse of discretion
amounting to lack or excess of jurisdiction committed by the CA in issuing its assailed decision and
resolution.

Petitioner contends that respondent Garcia's adverse claim is nothing but a notice that he has an interest
adverse to that of respondent Brua to the extent of PI 50,000.00, which was the amount of the loan secured
by a Deed of Real Estate Mortgage executed by respondent Brua in favor of respondent Garcia; that the
adverse claim cannot be said to be superior to a final sale conducted by the sheriff by authority of the court
pursuant to a judgment that has attained finality; that Sajonas v. CA, on which the CA anchored its decision,
differs from this case, since the adverse claim made in the title by therein petitioner Sajonas was by virtue
of a contract to sell; that unlike in this case, respondent Garcia caused the annotation of his adverse claim
as a mortgagee of respondent Brua in the amount of P150,000.00 in 1980; and respondent Garcia's
payment of the GSIS loan in 1991, upon the request of respondent Brua, was presumably for the reason
that respondent Brua could no longer discharge the GSIS obligation; and to avoid the foreclosure of the
property by the GSIS, respondent Brua asked Garcia to redeem it; that respondent Garcia's adverse claim in
1980 was not as a vendee of the property like in Sajonas, but merely as a mortgagee.

Petitioner admits' that respondent Garcia, as a mortgagee on the basis of which an adverse claim was
inscribed on the title of the subject property, is protected by Sec. 12, Rule 39 of the Rules of Court; and,
thus, petitioner knows that she is obliged as a vendee in the public sale to pay liens and encumbrances then
existing at the time of the sale on September 2, 1988, which necessarily included the adverse claim of
respondent Garcia in the amount of P150,000.00.

In his Comment, respondent Garcia claims that the petition faces outright dismissal, since the appropriate
remedy of the petitioner should have been a petition for review under Rule 45 which had already lapsed;
that when the CA reversed the RTC decision, such action did not constitute grave abuse of discretion since it
had legal basis; that any lien or adverse claim earlier inscribed prevails over those liens or adverse claims
inscribed subsequent thereto.

Respondent Brua did not file his comment. Thus, we dispensed with the filing of the same in a Resolution
dated June 19, 2006.

Petitioner filed her Reply, arguing that a petition for certiorari may be availed of where appeal is inadequate
and ineffectual.

The parties submitted their respective memoranda as required in Our Resolution dated August 30, 2006.

We dismiss the petition.

Petitioner should have filed a petition for review under Rule 45 of the Rules of Court instead of a petition
for certiorari under Rule 65, since she is assailing the CA decision and resolution which are final judgments.
Rule 45 clearly provides that decisions, final orders or resolutions of the CA in any case,  i.e., regardless of
the nature of the action or proceedings involved, may be appealed to us by filing a petition for review, which
is just a continuation of the appellate process over the original case. [18] And the petition for review must be
filed within fifteen (15) days from notice of the judgment or final order or resolution appealed from, or of the
denial of petitioner's motion for a new trial or reconsideration filed in due time after notice of the judgment.
[19]

In this case, petitioner received a copy of the CA Resolution denying her motion for reconsideration on
November 24, 2004; and, thus, under Rule 45, she has 15 days from receipt of such resolution, or until
December 9, 2004, to file a petition for review. However, petitioner did not file a petition for review; instead,
she filed a petition for certiorari under Rule 65 on January 24, 2005.[20] Hence, the CA decision and
resolution have already attained finality, and petitioner has lost her right to appeal.

A petition for certiorari under Rule 65 is proper if a tribunal, a board or an officer exercising judicial or quasi-
judicial functions has acted without or in excess of jurisdiction or with grave abuse of discretion amounting
to lack or excess of jurisdiction and there is no appeal, or any plain, speedy and adequate remedy in the
ordinary course of law.[21] In this case, petitioner had the remedy of appeal, and it was the speedy and
adequate remedy in the ordinary course of law. Thus, a special civil action for certiorari cannot be used as a
substitute for an appeal that the petitioner has already lost. Certiorari cannot be allowed when a party to a
case fails to appeal a judgment to the proper forum despite the availability of that remedy, certiorari not
being a substitute for a lost appeal.[22] Certiorari will not be a cure for failure to timely file a petition for
review on certiorari under Rule 45.[23]

While there are instances where the extraordinary remedy of certiorari may be resorted to despite the
availability of an appeal, the long line of decisions denying the special civil action for certiorari, either before
appeal was availed of or in instances where the appeal period had lapsed, far outnumber the instances
where certiorari was given due course.[24] The few significant exceptions are: (1) when public welfare and
the advancement of public policy dictate; (2) when the broader interests of justice so require; (3) when the
writs issued are null; (4) when the questioned order amounts to an oppressive exercise of judicial authority,
[25]
 which we find to be not present in this case. Notably, petitioner did not even fail to advance an
explanation why appeal was not availed of, nor was there any showing that the issue raised in the petition
for certiorari could not be raised on appeal. Concomitant to a liberal application of the rules of procedure
should be an effort on the part of the party invoking liberality to adequately explain his failure to abide by
the rules.[26]

In fact, the argument raised by petitioner, i.e., that the Court of Appeals had no legal authority to vary the
findings of the trial court and substitute its own conclusion, which were patently contrary to the trial court's
findings, and conclusion, relates to the wisdom and soundness of the assailed CA decision and resolution.
Where the issue or question involved affects the wisdom or legal soundness of the decision - not the
jurisdiction of the court to render said decision - the same is beyond the province of a special civil action
for certiorari.[27] Erroneous findings and conclusions do not render the appellate' court vulnerable to the
corrective writ of certiorari, for where the court has jurisdiction over the case, even if its findings are not
correct, these would, at the most, constitute errors of law and not abuse of discretion correctible
by certiorari.[28] For if every error committed by the trial court or quasi-judicial agency were to be the proper
subject of review by certiorari, then trial-would never end, and the dockets of appellate courts would be
clogged beyond measure.[29]

Even if we consider this petition for certiorari under Rule 65, it must be shown that the CA committed grave
abuse of discretion equivalent to lack or excess of jurisdiction, and not mere errors of judgment, for the
petition to be granted.[30] As we said, certiorari is not a remedy for errors of judgment, which are correctible
by appeal. By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction, and mere abuse of discretion is not enough — it must be grave. [31]

Petitioner contends that the adverse claim of respondent Garcia inscribed on the title of the subject property
is but a notice that the latter has an interest adverse to respondent Brua's title, to the extent of
P150,000.00 secured by a real estate mortgage, and such adverse claim cannot be considered superior to
that of a final sale conducted by the sheriff by virtue of a court judgment that has attained finality.

Sec. 12, Rule 39 of the Rules of Court provides:

SEC. 12. Effect of levy on execution as to third persons. - The levy on execution shall create a lien in favor
of the judgment obligee over the right, title and interest of the judgment obligor in such property at the time
of the levy, subject to liens and encumbrances then existing.

Clearly, the levy does not make the judgment creditor the owner of the property levied upon. He merely
obtains a lien.[32] Such levy on execution is subject and subordinate to all valid claims and liens existing
against the property at the time the execution lien attached, such as real estate mortgages. [33]

Respondent Garcia's adverse claim, which refers to the deed of mortgage executed by respondent Brua in
his favor, was annotated on respondent Brua's title registered with the Registry of Deeds of Rizal on June
23, 1980 as Entry No. 49853. The adverse claim was already existing when the Notice of Levy on Execution,
as well as the Certificate of Sale in favor of petitioner, was inscribed on July 11, 1988 and September 2,
1988, respectively; and, hence, the adverse claim is sufficient to constitute constructive notice to petitioner
regarding the subject property. When petitioner registered her Notice of Levy on Execution on the title of the
subject property, she was charged with the knowledge that the subject property sought to be levied upon on
execution was encumbered by an interest the same as or better than that of the registered owner thereof.
[34]
 Thus, no grave abuse of discretion was committed by the CA when it held that the notice of levy and
subsequent sale of the subject property could not prevail over respondent Garcia's existing adverse claim
inscribed on respondent Brua's certificate of title.

The annotation of an adverse claim is a measure designed to protect the interest of a person over a piece of
real property, where the registration of such interest or right is not otherwise provided for by the Land
Registration Act or Act No. 496 (now RD. No. 1529 or the Property Registration Decree), and serves a
warning to third parties dealing with said property that someone is claiming an interest on the same or a
better right than that of the registered owner thereof. [35]

Petitioner cannot be considered as a buyer in good faith. A purchaser in good faith and for value is one who
buys the property of another without notice that some other person has a right to or interest in such
property and pays a frill and fair price for the same at the time of such purchase, or before he has notice of
the claims or interest of some other person in the property. [36] Here, petitioner admitted on cross-
examination that when she registered her notice of attachment in 1981 and the levy on execution on July
11, 1988, she already saw respondent Garcia's adverse claim inscribed on respondent Brua's title on June
23, 1980.[37]

Petitioner claims that Sajonas v. CA[38] is not applicable, since the adverse claim registered on the title of the
subject property made by the Sajonases in 1984 was by virtue of a contract to sell, so that when the full
purchase price was eventually paid on September 4, 1984, a deed of sale of the property was subsequently
executed and registered in the Registry of Deeds of Marikina on August 28, 1985; that when the respondent
therein registered his notice levy on execution on February 12, 1985, such notice of levy could not have
precedence over the adverse claim, because there was no more property to levy upon. In this case,
however, respondent Garcia caused the annotation of his adverse claim only as a mortgagee of respondent
Brua in the amount of P150,000.00 in 1980. The subsequent deed of sale was executed in 1991 between
respondents Garcia and Brua after the former paid the latter's loan from with the GSIS. When a new title
was issued in respondent Garcia's name, the notice of levy on execution and the certificate of sale were
already annotated on the title of the subject property; and, thus, the sale in favor of respondent Garcia
could not prevail over the previous auction sale in petitioner's favor.
We are not impressed.

The issue posed in Sajonas was whether the adverse claim inscribed on TCT No. N-190417 was still in force
when private respondent therein caused the annotation of the notice of levy on execution on the title; if the
adverse claim was still in effect, then respondent therein was charged with the knowledge of pre-existing
interest over the subject property and, thus, the Sajonases were entitled to the cancellation of the notice of
levy inscribed on the title.

We ruled in Sajonas that the inscription of the adverse claim on the title of the subject property was still in
effect on February 12, 1985, when the sheriff annotated the notice of levy on execution in favor of
respondent therein; that respondent therein was charged with knowledge that the subject property sought
to be levied upon on execution was encumbered by an interest the same as or better than that of the
registered owner thereof. We then said that such notice of levy could not prevail over the existing adverse
claim inscribed on the certificate of title in favor of the Sajonases.

As in that case, the adverse claim of respondent Garcia based on the Deed of Mortgage executed by
respondent Brua over the subject land in the former's favor was existing when the Notice of Levy on
Execution was inscribed in favor of petitioner. Although the deed of sale between respondents Brua and
Garcia was done after the notice of levy on execution and certificate of sale were inscribed on the title, it
was clearly stated in the deed that the subject property was only a partial payment for respondent Brua's
mortgage indebtedness to respondent Garcia, which the former could no longer redeem from the latter.
Thus, the sale of the subject property by respondent Brua to respondent Garcia was by reason of
respondent Brua's prior loan from respondent Garcia, which was secured by a mortgage on the subject
property; and this mortgage was registered and already existing on the title of the subject property when
the Notice of Levy on Execution and Certificate of Sale in favor of petitioner were inscribed thereon. Thus,
petitioner's claim over the subject property must yield to the earlier encumbrance registered by respondent
Garcia.

WHEREFORE, the petition is DISMISSED. The Decision dated August 12, 2004 and Resolution dated
November 18, 2004 of the Court of Appeals in CA-G.R. CV No. 61591 are AFFIRMED.

SO ORDERED.

Corona, (Chairperson), Carpio, Velasco, Jr., and Nachura, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 187451               August 29, 2012

JESUS VIRTUCIO, represented by ABDON VIRTUCIO, Petitioner,

vs.
JOSE ALEGARBES, Respondent.

PERALTA, J., Acting Chairperson,*

VILLARAMA, JR.,**

PEREZ,***

DECISION

MENDOZA, J.:

This petition for review on certiorari under Rule 45 seeks to reverse and set aside the February 25,
2009 Decision of the Court of Appeals (CA), in CA-G.R. CV No. 72613, reversing and setting aside
1 

the February 19, 2001 Decision of the Regional Trial Court, Branch 1, Isabela, Basi Ian (RTC), in
2 

Civil Case No. 685-627, an action for "Recovery of Possession and Ownership with Preliminary
Injunction."

The Facts

Respondent Jose Alegarbes (Alegarbes) filed Homestead Application No. V-33203 (E-V-49150) for

a 24-hectare tract of unsurveyed land situated in Bañas, Lantawan, Basilan in 1949. His application
was approved on January 23, 1952. In 1955, however, the land was subdivided into three (3) lots –
3 

Lot Nos. 138,139 and 140, Pls-19 - as a consequence of a public land subdivision. Lot 139 was
allocated to Ulpiano Custodio (Custodio), who filed Homestead Application No. 18-4493 (E-18-
2958). Lot 140 was allocated to petitioner Jesus Virtucio (Virtucio), who filed Homestead Application
No. 18-4421 (E-18-2924). 4

Alegarbes opposed the homestead applications filed by Custodio and Virtucio, claiming that his
approved application covered the whole area, including Lot Nos. 139 and 140. 5

On October 30, 1961, the Director of Lands rendered a decision denying Alegarbes' protest and
amending the latter's application to exclude Lots 139 and 140. Only Lot 138 was given due course.
The applications of Custodio and Virtucio for Lots 139 and 140, respectively, were likewise given
due course. 6
Alegarbes then appealed to the Secretary of Agriculture and Natural Resources, who dismissed his
appeal on July 28, 1967. He then sought relief from the Office of the President (OP), which,
however, affirmed the dismissal order of the Secretary of Agriculture and Natural Resources in a
decision, dated October 25, 1974. Alegarbes moved for a reconsideration, but the motion was
subsequently denied. 7

On May 11, 1989, an order of execution was issued by the Lands Management Bureau of the
8 

Department of Environment and Natural Resources to enforce the decision of the OP. It ordered
Alegarbes and all those acting in his behalf to vacate the subject lot, but he refused.

On September 26, 1997, Virtucio then filed a complaint for "Recovery of Possession and Ownership
9 

with Preliminary Injunction" before the RTC.

In his Answer, Alegarbes claimed that the decision of the Bureau of Lands was void ab initio
10 

considering that the Acting Director of Lands acted without jurisdiction and in violation of the
provisions of the Public Land Act. Alegarbes argued that the said decision conferred no rights and
imposed no duties and left the parties in the same position as they were before its issuance. He
further alleged that the patent issued in favor of Virtucio was procured through fraud and deceit,
thus, void ab initio.

Alegarbes further argued, by way of special and/or affirmative defenses, that the approval of his
homestead application on January 23, 1952 by the Bureau of Lands had already attained finality and
could not be reversed, modified or set aside. His possession of Lot Nos. 138, 139 and 140 had been
open, continuous, peaceful and uninterrupted in the concept of an owner for more than 30 years and
had acquired such lots by acquisitive prescription.

In his Amended and Supplemental Answer, Alegarbes also averred that his now deceased brother,
11 

Alejandro Alegarbes, and the latter's family helped him develop Lot 140 in 1955. Alejandro and his
family, as well as Alegarbes' wife and children, had been permanently occupying the said lot and,
introducing permanent improvements thereon since 1960.

The RTC Ruling

The RTC rendered its decision on February 19, 2001, favoring Virtucio. The decretal portion of which
reads:

WHEREFORE, upon the merit of this case, this court finds for the plaintiff and against the defendant
by:

1. Ordering the defendant and all those acting in his behalf to vacate Lot No. 140, Pls-19, located at
Lower Bañas, Lantawan, Basilan and surrender the possession and ownership thereof to plaintiff;

2. Ordering the defendant to pay the plaintiff the amount of Fifteen Thousand Pesos (₱ 15,000.00)
as attorney's fees and another Ten Thousand Pesos (₱ 10,000.00) as expenses for litigation; and

3. To pay the cost of the suit in the amount of Five Hundred Pesos (₱500.00).

SO ORDERED. 12

Not in conformity, Alegarbes appealed his case before the CA.

The CA Ruling

On February 25, 2009, the CA promulgated its decision declaring Alegarbes as the owner of Lot No.
140, Pls-19, thereby reversing and setting aside the decision of the RTC. The CA ruled that
Alegarbes became ipso jure owner of Lot 140 and, therefore, entitled to retain possession of it.

Consequently, the awards of attorney's fees, litigation expenses and costs of suit were deleted.

In so ruling, the CA explained that even if the decision to approve Virtucio's homestead application
over Lot 140 had become final, Alegarbes could still acquire the said lot by acquisitive prescription.
The decisions on the issues of the approval of Virtucio's homestead application and its validity were
impertinent as Alegarbes had earlier put in issue the matter of ownership of Lot 140 which he
claimed by virtue of adverse possession.

The CA also found reversible error on the part of the RTC in disregarding the evidence before it and
relying entirely upon the decisions of the administrative bodies, none of which touched upon the
issue of Alegarbes' open, continuous and exclusive possession of over thirty (30) years of an
alienable land. The CA held that the Director of Lands, the Secretary of Agriculture and Natural
Resources and the OP did not determine whether Alegarbes' possession of the subject property had
ipso jure segregated Lot 140 from the mass of public land and, thus, was beyond their jurisdiction.

Aggrieved, Virtucio filed this petition.

ISSUES

Virtucio assigned the following errors in seeking the reversal of the assailed decision of the CA, to
wit:

1. The Court of Appeals erred in setting aside the judgment of the trial court, which awarded
the lot in question to the respondent by virtue of acquisitive prescription and ordered herein
petitioner to surrender the ownership and possession of the same to them. 13

2. The Court of Appeals gravely erred in disregarding the decision in CA-G.R. CV-26286 for
Recovery of Possession and Ownership, Custodio vs. Alegarbes which contains same
factual circumstances as in this case and ruled against JOSE ALEGARBES. 14

3. The Court of Appeals erred in deleting the award of attorney's fees to the petitioner. 15

The lone issue in this case is whether or not Alegarbes acquired ownership over the subject property
by acquisitive prescription.

Ruling of the Court

The petition must fail.

Indeed, it is fundamental that questions of fact are not reviewable in petitions for review
on certiorari under Rule 45 of the Rules of Court. Only questions of law distinctly set forth shall be
raised in the petition.
16

Here, the main issue is the alleged acquisition of ownership by Alegarbes through acquisitive
prescription and the character and length of possession of a party over a parcel of land subject of
controversy is a factual issue. The Court, however, is not precluded from reviewing facts when the
17 

case falls within the recognized exceptions, to wit:

(a) When the findings are grounded entirely on speculation, surmises, or conjectures;

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

(c) When there is grave abuse of discretion;

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

(e) When the findings of facts are conflicting;

(f) When in making its findings the CA went beyond the issues of the case, or its findings are
contrary to the admissions of both the appellant and the appellee;

(g) When the CA’s findings are contrary to those by the trial court;

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

(i) When the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not
disputed by the respondent;

(j) When the findings of fact are premised on the supposed absence of evidence and contradicted by
the evidence on record; or

(k) When the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if
properly considered, would justify a different conclusion. [Emphasis supplied]
18 

In the case at bench, the findings and conclusions of the CA are apparently contrary to those of the
RTC, hence, the need to review the facts in order to arrive at the proper conclusion.

On Acquisitive Prescription

Virtucio insists that the period of acquisitive prescription was interrupted on October 30, 1961 (or in
1954 when Alegarbes filed the protest) when the Director of Lands rendered a decision giving due
course to his homestead application and that of Ulpiano Custodio. Virtucio further claims that since
1954, several extrajudicial demands were also made upon Alegarbes demanding that he vacate said
lot. Those demands constitute the "extrajudicial demand" contemplated in Article 1155, thus, tolling
the period of acquisitive prescription. 19

Article 1106 of the New Civil Code, in relation to its Article 712, provides that prescription is a mode
of acquiring ownership through the lapse of time in the manner and under the conditions laid down
by law. Under the same law, it states that acquisitive prescription may either be ordinary or
extraordinary. Ordinary acquisitive prescription requires possession of things in good faith and with
20 

just title for a period of ten years, while extraordinary acquisitive prescription requires uninterrupted
21 

adverse possession of thirty years, without need of title or of good faith. 22

There are two kinds of prescription provided in the Civil Code. One is acquisitive, that is, the
acquisition of a right by the lapse of time as expounded in par. 1, Article 1106. Other names for
acquisitive prescription are adverse possession and usucapcion. The other kind is extinctive
prescription whereby rights and actions are lost by the lapse of time as defined in Article 1106 and
par. 2, Article 1139. Another name for extinctive prescription is litigation of action. These two kinds
23 

of prescription should not be interchanged.

Article 1155 of the New Civil Code refers to the interruption of prescription of actions. Interruption of
acquisitive prescription, on the other hand, is found in Articles 1120-1125 of the same Code. Thus,
Virtucio’s reliance on Article 1155 for purposes of tolling the period of acquisitive prescription is
misplaced. The only kinds of interruption that effectively toll the period of acquisitive prescription are
natural and civil interruption.
24

Civil interruption takes place with the service of judicial summons to the possessor. When no action
25 

is filed, then there is no occasion to issue a judicial summons against the respondents. The period of
acquisitive prescription continues to run.

In this case, Virtucio claims that the protest filed by Alegarbes against his homestead application
interrupted the thirty (30)-year period of acquisitive prescription. The law, as well as jurisprudence,
however, dictates that only a judicial summons can effectively toll the said period.

In the case of Heirs of Marcelina Azardon-Crisologo v. Rañon, the Court ruled that a mere Notice of
26 

Adverse Claim did not constitute an effective interruption of possession. In the case of Heirs of
Bienvenido and Araceli Tanyag v. Gabriel, which also cited the Rañon Case, the Court stated that
27 

the acts of declaring again the property for tax purposes and obtaining a Torrens certificate of title in
one's name cannot defeat another's right of ownership acquired through acquisitive prescription. 28

In the same vein, a protest filed before an administrative agency and even the decision resulting
from it cannot effectively toll the running of the period of acquisitive prescription. In such an instance,
no civil interruption can take place. Only in cases filed before the courts may judicial summons be
issued and, thus, interrupt possession. Records show that it was only in 1997 when Virtucio filed a
case before the RTC. The CA was, therefore, correct in ruling that Alegarbesbecame ipso jure owner
of Lot 140 entitling him to retain possession of it because he was in open, continuous and exclusive
possession for over thirty (30) years of alienable public land.Virtucio emphasizes that the CA erred in
disregarding the decisions of the administrative agencies which amended Alegarbes' homestead
application excluding Lot 140 and gave due course to his own application for the said lot, which
decisions were affirmed by the RTC.

Well-settled is the rule that factual findings of the lower courts are entitled to great weight and
respect on appeal and, in fact, are accorded finality when supported by substantial evidence on the
record. It appears, however, that the conclusion made by the RTC was not substantially supported.
29 

Even the RTC itself noted in its decision:

The approval of a Homestead Application merely authorizes the applicant to take possession of the
land so that he could comply with the requirements prescribed by law before a final patent could be
issued in his favor – what divests the government of title to the land is the issuance of a patent and
its subsequent registration with the Register of Deeds. 30

A perusal of the records would reveal that there was no issuance of any patent in favor of either
parties. This simply means that the land subject of the controversy remains to be in the name of the
State. Hence, neither Virtucio nor Alegarbes can claim ownership. There was, therefore, no
substantial and legal basis for the RTC to declare that Virtucio was entitled to possession and
ownership of Lot 140.
It can be argued that the lower court had the decisions of the administrative agencies, which
ultimately attained finality, as legal bases in ruling that Virtucio had the right of possession and
ownership. In fact, the Department of Environment and Natural Resources (DENR) even issued the
Order of Execution on May 11, 1989 ordering Alegarbes to vacate Lot 140 and place Virtucio in
31 

peaceful possession of it. The CA, however, was correct in finding that:

But appellant had earlier put in issue the matter of ownership of Lot 140 which he claims by virtue of
adverse possession. On this issue, the cited decisions are impertinent. Even if the decision to
approve appellee's homestead application over Lot 140 had become final, appellant could still
acquire the said lot by acquisitive prescription.32

In the case of Heirs of Gamos v. Heirs of Frando, the Court ruled that the mere application for a
33 

patent, coupled with the fact of exclusive, open, continuous and notorious possession for the
required period, is sufficient to vest in the applicant the grant applied for. It likewise cited the cases
34 

of Susi v. Razon and Pineda v. CA, where the Court ruled that the possession of a parcel of
35  36 

agricultural land of the public domain for the prescribed period of 30 years ipso jure converts the lot
into private property. 37

In this case, Alegarbes had applied for homestead patent as early as 1949. He had been in
exclusive, open, continuous and notorious possession of Lot 140 for at least 30 years. By the time
the DENR issued its order of execution in 1989, Alegarbes had Lot 140 in his possession for more
than 30 years. Even more so when Virtucio filed the complaint before the RTC in 1997, Alegarbes
was already in possession of the subject property for forty-eight (48) years.

The CA correctly observed that the RTC erred in disregarding the evidence before it and relying
entirely upon the decisions of the Director of Lands, the Secretary of Agriculture and Natural
Resources and the OP, which never touched the issue of whether Alegarbes’ open, continuous and
exclusive possession of over thirty (30) years of alienable land had ipso jure segregated Lot 140
from the mass of public land and beyond the jurisdiction of these agencies. 38

When the CA ruled that the RTC was correct in relying on the abovementioned decisions, it merely
recognized the primary jurisdiction of these administrative agencies. It was of the view that the RTC
was not correct in the other aspects of the case. Thus, it declared Alegarbes as owner ipso jure of
Lot 140 and entitled to retain possession of it. There is no reason for the Court to disturb these
findings of the CA as they were supported by substantial evidence, hence, are conclusive and
binding upon this Court. 39

On the CA Decision involving a similar case

Virtucio insists that the CA gravely erred in disregarding its decision in Custodio v. Alegarbes, CA-
G.R. CV 26286, for Recovery of Possession and Ownership, which involved the same factual
circumstances and ruled against Alegarbes.

It must be noted that the subject property in the said case was Lot 139 allocated to Custodio and
that Virtucio was not a party to that case. The latter cannot enjoy whatever benefits said favorable
judgment may have had just because it involved similar factual circumstances. The Court also found
from the records that the period of acquisitive prescription in that case was effectively interrupted by
Custodio's filing of a complaint, which is wanting in this case.

Moreover, it is settled that a decision of the CA does not establish judicial precedent. "The principle
40 

of stare decisis enjoins adherence by lower courts to doctrinal rules established by this Court in its
final decisions. It is based on the principle that once a question of law has been examined and
decided, it should be deemed settled and closed to further argument. " 41

The Court agrees with the position of Alegarbes that by Virtucio's insistence that it was erroneous for
the CA to disregard its earlier decision in CA-G.R. CV 26286, he, in effect, calls upon this Court to
adhere to that decision by invoking the stare decisis principle, which is not legally possible because
only final decisions of this Court are considered precedents. 42

In view of the foregoing, the Court need not dwell on the complaint of Virtucio with regard to the
deletion of the award of attorney's fees in his favor. It is ludicrous for the CA to order Alegarbes to
pay attorney's fees, as a measure of damages, and costs, after finding him to have acquired
ownership over the property by acquisitive prescription.

WHEREFORE, the petition is DENIED.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice

WE CONCUR:

DIOSDADO M. PERALTA
Associate Justice
Acting Chairperson

ROBERTO A. ABAD MARTIN S. VILLARAMA, JR.

Associate Justice Associate Justice

JOSE PORTUGAL PEREZ

Associate Justice

ATTESTATION

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

DIOSDADO M. PERALTA
Associate Justice
Acting Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I
certify that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court's Division.

MARIA LOURDES P. A. SERENO

Chief Justice