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SANTIAGA BLANCO, ET AL.

, plaintiffs-appellees, Philippines admitted that a mortgage was constituted on the land by the defendant
vs. Fructuosa Esquierdo as security for the loan obtained by her from the said bank, and as
FRUCTUOSA ESQUIERDO, ET AL., defendants. special defenses alleged that the complaint did not state facts sufficient to constitute a
DEVELOPMENT BANK OF THE PHILIPPINES (formerly Rehabilitation Finance cause of action as against it and that it is a mortgagee in good faith.
Corporation), defendant-appellant.
After trial, the lower court, on December 11, 1958, rendered judgment declaring the
Antonio T. de Jesus for appellees. certificate of title issued in the name of Fructuosa Esquierdo invalid, and ordering its
Jesus A. Avanceña and Ramon Totengco for appellant. cancellation and the restoration of Original Certificate of Title No. P-268 in the name of the
heirs of Maximiano Blanco, or the issuance of a new transfer certificate of title in the name
of said heirs. The court, likewise, ordered the cancellation of the registration of the
mortgage deed annotated on the back of the certificate of title.

GUTIERREZ DAVID, J.:


Arguing that it is an innocent mortgagee for valuable consideration and as such it is fully
protected by law in its rights in the mortgage, regardless of whether the title to the land has
This is an appeal from a decision of the Court of First Instance of Negros Occidental been secured fraudulently or not by the defendant mortgagor Fructuosa Esquierdo, the
ordering the cancellation of Transfer Certificate of Title No. T-6582 issued in the name of defendant bank moved for a reconsideration of the decision. The court below, however,
Fructuosa Esquierdo on the ground that it was procured thru fraud, including the after opposition to the land has been filed by plaintiff, denied the same. Hence, this appeal
registration of a mortgage annotated on the back thereof which was constituted on the land by the defendant bank.
by said Fructuosa Esquierdo as security for the loan obtained by her from the appellant
Development Bank of the Philippines.
That the certificate of title issued in the name of Fructuosa Esquierdo is a nullity, the same
having been secured thru fraud, is not here in question. The only question for determination
It appears that the land covered by the certificate of title above-mentioned was originally is whether the defendant bank is entitled to the protection accorded to "innocent
registered in the name of the "Heirs of Maximiano Blanco" as evidenced by Original purchasers for value", which phrase, according to sec. 38 of the Land Registration Law,
Certificate of Title No. P-268 of the land records of Negros Occidental. The latter certificate includes an innocent mortgagee for value. The question, in our opinion, must be answered
was issued pursuant to the homestead application of Maximiano Blanco, who died on June in the affirmative.
15, 1930 before the corresponding patent could be issued. After his death, his common law
wife, Fructuosa Esquierdo, and his surviving brothers sisters took joint possession of the
The trial court, in the decision complained of, made no finding that the defendant
land in question.
mortgagee bank was a party to the fraudulent transfer of the land to Fructuosa Esquierdo.
Indeed, there is nothing alleged in the complaint which may implicate said defendant
On July 24, 1950, Fructuosa Esquierdo made an judicial adjudication in her favor of the mortgagee in the fraud, or justify a finding that it acted in bad faith. On the other hand, the
entire land, claiming in an affidavit filed by her with the Register of Deeds that she was certificate of title was in the name of the mortgagor Fructuosa Esquierdo when the land was
Maximiano Blanco's widow and only heir. In accordance with said adjudication, the Register mortgaged by her to the defendant bank. Such being the case, the said defendant bank, as
of Deeds, on the following day, cancelled Original Certificate of Title No. P-268 and in lieu mortgagee, had the right to rely on what appeared in the certificate and, in the absence of
thereof issue Transfer Certificate of Title No. T-6582 in her name. anything to excite suspicion, was under no obligation to look beyond the certificate and
investigate the title of the mortgagor appearing on the face of said certificate. (De Lara, et
al. vs. Ayroso, 95 Phil., 185; 50 Off. Gaz., [10] 4838; Joaquin vs. Madrid, et al., 106 Phil.,
On August 3, 1956, after learning of the transfer title, Santiaga, Meycala, Facunda, 1060). Being thus an innocent mortgagee for value, its right or lien upon the land
Florencia, Mamerta, Teodora, Fabian and Juan, all surnamed Blanco, filed present mortgaged must be respected and protected, even if the mortgagor obtained her title there
proceedings with the Court of First Instance Negros Occidental, praying for the annulment thru fraud. The remedy of the persons prejudice bring an action for damages against those
of the affidavit executed by Fructuosa Esquierdo and the cancellation of the certificate of causing fraud, and if the latter are insolvent, an action against the Treasurer of the
title issued in her name. The complaint, in substance, alleged that the deceased Maximiano Philippines may be filed for the recovery of damages against the Assurance Fund. (De la
Blanco died single without leaving any descendant, ascendant or forced heir, except the Cruz vs. Fabie, 35 Phil., 144; Blondeau vs. Nano, 61 Phil., 625; Sumira, et al. vs. Vistan, et
plaintiffs who are his brothers and sisters, and that defendant Fructuosa Esquierdo, through al., 74 Phil. 138; Raymundo, et al. vs. Afable, et al., 96 Phil., 655; 51 Off. Gaz. [3] 1329;
the inducement of her nephew and co-defendant Fabio Silva, secured the issuance of the Domingo, et al. vs. Mayon Realty Corp., et al. 102 Phil., 32; 54 Off. Gaz., [17] 4954;
certificate of title in her name thru fraud, or by means false and fraudulent representations Avecilla vs. Yatco, et al., 103 Phil., 666; 54 Off. Gaz. 6415.)lawphil.net
made by her in the affidavit adjudicating the entire property to herself. Included as party
defendant was the Development Bank of the Philippines (formerly Rehabilitation Finance
Corporation) to which the property was alleged to have been mortgaged by defendant In this connection, it will be noted that the deceased Maximiano Blanco died way back in
Fructuosa Esquierdo. 1930 and the certificate of title pursuant to his homestead application was issued in the
name of his heirs sometime in 1934. Plaintiffs, however, took no steps for the settlement of
their late brother's estate, and instead merely took possession of the land in question jointly
In due time, the defendants Fructuosa Esquierdo and Fabio Silva filed their answer, which with Fructuosa Esquierdo. They also appear to have entrusted the owner's certificate to
was subsequently amended. In a separate answer, The Development Bank of the said Fructuosa Esquierdo thus making it possible for her to fraudulently secure a transfer
certificate of title in her name. This should be emphasized, for in several cases it is what CRISTINA PENULLAR, petitioner,
impelled this Court to apply the principle of equity that "as between two innocent persons, vs.
one of whom must suffer the consequences of a breach of trust, the one who made it PHILIPPINE NATIONAL BANK, respondent.
possible by his act of confidence must bear the loss." (De Lara, et al. vs. Ayroso, supra.)
Teodoro T Junio for petitioner.
Wherefore, the judgment appealed from is hereby modified in the sense that the annulment
of Transfer Certificate of Title No. T-6582 and the issuance of a new one in lieu thereof in
Antonio M. Ramos for respondent PNB.
the names of the heirs of Maximiano Blanco shall be without prejudice to the rights of the
defendant-appellant bank as an innocent mortgagee for value. So ordered without costs.

GUTIERREZ, JR., J.:

The principal issue raised in this petition is whether or not the Court of Appeals, even as it
sustained the trial court's finding that the titles covering the disputed parcels of land are null
and void, could still declare that the mortgages annotated on those titles are valid.

The Court of Appeals stated the facts of this case as follows:

RESOLVING: On Appeal Civil Case No. D-894 of the Court of First


Instance of Pangasinan instituted by Cristina P. Penullar against
Florencio Felix et. al., for declaration of absolute nullity of judicial
proceedings in which after filing of the complaint on 9 May, 1959,
answer on 27 May, 1959 by the Philippine National Bank stipulation of
facts on 1 February, 1967 and hearing on 11 August 1967 with only
plaintiff presenting evidence purely documentary there was after that
promulgated decision disposing.

WHEREFORE, in view of all the foregoing the


Court rules that:

(1) that the proceedings made under Land Registration Case No.
16347 are null and void;

(2) that all the titles issued by the Land Registration Court pursuant to
the said Land Registration proceedings, as well as all Certificate of
Title flowing from the said original title are null and void;

(3) that the land covered by this case are the registered properties of
the plaintiff over which she holds an irrevocable and indefeasible title
over the same;

(4) that the writ of possession issued by the land registration court on
26 of September 1958 in connection with Land Registration Case No.
16347 is null and void; (5) that since the plaintiff has been found to be
the sole and absolute owner of the properties in question, the
defendants are hereby ordered to vacate the same and to surrender
the possession as well as the ownership thereof in favor of the plaintiff;
(6) that the defendants are required to render a true and faithful since September 11, 1940 up to this date, the
accounting of the fruits of the said properties from September 26, 1958 plaintiff has failed to take any steps for the
until the possession of the plaintiff has been restored, and to indemnify prosecution of her action.
value of said products as may be found in said accounting. The
defendants are likewise ordered to pay the costs of this suit.
trial Judge in Civil Case No. 7199 dismissed the case,

xxx xxx xxx


without prejudice and without pronouncement as to costs,

which defendant Philippine National Bank has taken here on appeal on


and what Genoveva Miguel instead did after that was to prosecute the
the errors assigned in its brief;
registration case and after the same had been finally heard, in the
absence of Praxedes Moya, et. al., the Registration Court promulgated
IT APPEARING: That the antecedents are rather complicated; it will be its decision on 20 December, 1955 ordering the inscription of the
the task of this Court to simplify; on 27 February, 1936 claiming that properties now in question in the name of applicant Genoveva Miguel's
she was the absolute owner but that therein defendants were heirs because she had died in the meantime and as the judgment
pretending to have an interest in the property and had intruded afterwards became final: Genoveva Miguel or better stated her
sometime in December, 1935, Genoveva Miguel filed Civil Case No. successors in interest applied for a writ of possession which was
7199 in the Court of First Instance of Pangasinan against Praxedes granted the Registration Court on 25 September, 1958 and it was
Moya et al., predecessors of herein plaintiff Cristina Penullar, for executed by the Sheriff on 30 September, 1958 but in the words of the
declaration of ownership over three (3) portions of agricultural land Sheriff, herein plaintiff successor in interest of oppositor Praxedes
situated at Bayambang, Pangasinan; Praxedes Moya and companions Moya,
presented their answer in due time Exh. A-1; while that Civil Case No.
7199 was pending, Genoveva Miguel presented formal application for
vehemently objected to the possession of the applicant,'
registration of her title on 1 February, 1938 in land Case No. 16347;
and Praxedes Moya opposed on 10 June, 1938 Exh. B-3; well then on
a date which is not very clear in the records but during the pendency of and a few months after that herein plaintiff Cristina Penullar filed the
both Civil Case No. 7199 and the land registration Case No. 160.47, present Civil Case No, T-894 for annulment of the Registration
Praxedes Moya was able to obtain free patent over the property and Proceeding specifically the decision rendered therein and the titles
unto her was issued original certificate of title No. 3148 and on another issued pursuant to that in the name of the heirs of Genoveva Miguel,
parcel also was issued a free patent in the name of one Josefa Sison namely Original Certificates No. 14242, 24244, 24240, 14238, 24313
also one of herein plaintiff's predecessors and unto her was issued as well as the incumbrance by way of mortgage constituted by the said
Original Certificate of Title No. 2932; in both cases, Civil Case No. adjudicatees in favor of the Philippine National Bank, on the Position
7199 and Expediente 16347 trial Judge issued order on 15 February, that the lands having already been registered, although by way of free
1940 suspending hearing in order to give a chance to Genoveva patent, the titles in the names of Praxedes Moya and Josefa Sison,
Miguel to investigate the Original Certificates of Title No, 3148 and predecessors in interest of Cristina Penullar became an absolute bar
2932 Exh. A-4, issuing a supplementary order on 11 September, 1940 against posterior registration and in the trial of the case plaintiff
that said cases be held in abeyance, submitted her case on the basis of aforementioned documentary
proofs constituting of Exhs. A to 0, against this, Philippine National
Bank in its answer p. 23 R.A. submitted as special defense that it was
Until after the Department of Agriculture and
an innocent mortgagee for value having granted loans to the
Commerce pass upon the complaint that
adjudicatees in the registration case namely Maximo Alejo, Filomeno
Genoveva Miguel and others have made for the
Domingo, Serafina Gascon relying on their titles which appeared to be
cancellation or withdrawal of the free 'patent
genuine, issued in due course and regular on their face; and it is to be
certificate issued in the name of Praxedes Moya
stated that the fact of this constitution of the mortgages in favor of the
and others.
Philippine National Bank by the said adjudicatees successors in
interest of Genoveva Miguel does not appear to be debated; but trial
the parties shall immediately notify the Court soon Judge after hearing the case held for Cristina Penullar successor in the
after the Department of Agriculture and Commerce interest of Praxedes Moya and Josefa Sison and annulled the titles
renders any action on said claim. 'Exh. B- 6; issued pursuant to the decision of the Land Registration Court in favor
of the successors in interest of Genoveva Miguel; ...
but nothing more happened with respect to the cancellation of the free
patents; and so it was that, on 22 May, 1947 Exh. A-7 because The respondent Court of Appeals modified the appealed decision to the effect ... that the
mortgages in favor of Philippine National Bank attacked by plaintiff are hereby declared
valid.' In all other respects, the decision of the lower court was affirmed. (Annex " D ", p. 18, respondent Philippine National Bank to file a Reply to the Opposition. (Record on Appeal
rollo) pp, 48- 50).

Not satisfied with the modified decision, plaintiff-appellee Cristina Penullar filed a motion for In its appeal to the Court of Appeals, the Philippine National Bank maintained its position
reconsideration and when the motion was denied by the respondent court, filed the instant that it was a mortgagee in good faith. Thus, in the third Assignment of Error of its brief filed
petition. before the appellate court, the Philippine National Bank adequately discussed its being a
mortgagee in good faith. The first proposition is without merit.
The petitioner assigns the following errors:
The second proposition covered by the first and third assignments of errors is premised on
the following arguments: Since the torrens titles wherein respondent Philippine National
I
Bank's mortgages were annotated were declared void, necessarily the same mortgages
annotated in the said torrens title should also be declared void, on the theory that a
THE COURT OF APPEALS ERRED IN HOLDING AS VALID THE mortgage is but an accessory contract. The petitioner maintains that her torrens title should
MORTGAGES NEVER ANNOTATED IN PETITIONER'S TITLES BUT not answer for the same mortgages since the latter were not annotated considering the
IN THE VOID TITLES OF RESPONDENT'S CO-DEFENDANTS. "fundamental principle of registration that Torrens titles are affected only by the
encumbrance registered and annotated in said titles." Furthermore, she argues that to
validate the mortgages annotated in the void titles of Philippine National Bank's co-
II defendants but never annotated in her torrens titles would in effect revalidate the void titles
to co-exist with her valid title.
THE COURT OF APPEALS ERRED IN ADJUDICATING
RESPONDENT'S APPEAL UPON AN ISSUE NOT RAISED IN THE The petitioner considers the ruling of the Court of Appeals inconsistent because according
PLEADINGS BEFORE ITSELF NOR BEFORE THE TRIAL COURT. to her no valid lien could emanate from a void title.

III The petitioner's arguments have no merit. The Court of Appeals fully explained the reasons
why the mortgages annotated in the void torrens titles should be considered valid. Thus:
THE COURT OF APPEALS ERRED IN RESORTING TO PALPABLY
UNTENABLE THEORIES AND POSTULATES TO JUSTIFY ITS ... now in resolving this question let it be granted that there is clear
DECISION. logic in the position of appellees that the titles of the heirs of Genoveva
Miguel mortgagors to Philippine National Bank having been declared
The main issue centers on the ruling of the Court of Appeals' sustaining the validity of the void, on the principle that the rights of Philippine National Bank being
mortgages in favor of the respondent Philippine National Bank. dependent upon those void titles, Philippine National Bank should not
be permitted to pretend that its mortgages should be considered a
valid encumbrance upon the property, for it is like the branch of a dead
The petitioner contends: 1. that the Court of Appeals did not have a basis to rule on the tree so to speak but the trouble is that cases cannot be decided upon
matter since the issue of the Philippine National Bank as a mortgagee in good faith was pure logic; the fact of the matter is that the Bank relief upon regular
never raised before the trial court and the Court of Appeals, and 2. under the facts Torrens Titles issued pursuant to a regular judgment of the registration
obtaining in the case was not justified in ruling that respondent Philippine National Bank's Court: there is no showing, absolutely no showing, that the Bank was
mortgages were valid. made specifically aware of the fact that the very property already
covered by the free patents were only afterwards adjudicated to and
The record on Appeal filed by the Philippine National Bank shows that in the Answer of the Torrens Titles issued in the name of the heirs of Genoveva Miguel,
bank, there was alleged the special defense .. that the Philippine National Bank, a credit who were the parties that afterwards had secured the mortgages from
institution, in the ordinary course of business, in good faith and for valuable consideration, the Bank, not only this, the declaration of nullity of the titles of the heirs
is an innocent purchaser having granted loans to Maximo Alejo. ... and to Filomeno of Genoveva Miguel due to the fact that there had already been free
Domingo and Serafina Gascon ... under the security of Torrens Title issued to the borrower patents issued in the name of plaintiff's predecessors Praxedes Moya
and relying on the fact of the same which appeared to be genuine, regular and in due and Josefa Sison came in only much later and in fact as of the time
form." (Record on Appeal, p. 24) Moreover, respondent Philippine National Bank on the when these mortgages were accepted by the Bank, there was as yet
very theory that it was a mortgage in good faith filed a Motion to Dismiss the case as no decision declaring the titles of the mortgagors null and void; stated
against it. (Record on Appeal, pp. 31-34) And this motion was subject to another URGENT otherwise there can be no denying the fact that the Bank was made to
MOTION for Resolution filed by respondent Philippine National Bank (Record on Appeal, rely and had the right to rely upon regular certificates of title first
pp. 39-40).1äwphï1.ñët The same motion prompted the petitioner plaintiff in the trial court, presented to it by the mortgagors; ... (Rollo, pp. 17-18)
to file an Opposition thereto, (Record on Appeal, PP- 40-41) which in turn led the
The foregoing findings and conclusions of the respondent Court are sustained by rulings in In the instant case, the Philippine National Bank relied on the torrens titles of the
precedent cases. mortgagors which had been regularly issued. The torrens titles were the result of regular
land registration proceedings duly registered with the Register of Deeds. There was nothing
in the torrens titles which would excite suspicion that the same were fraudulently processed
In Director of Lands v. Abache (73 Phil. 606) the principal issue hinged on whether or not
by the mortgagors. Applying, therefore, the principles enunciated in the afore- cited cases,
the mortgage lien annotated on the torrens title which was declared null and void should
the respondent Bank was not duty bound to further investigate the validity and/or invalidity
likewise be ordered null and void. We said:
of the torrens title.

Where, however, innocent third persons, relying on the correctness of


The assertion that the Philippine National Bank could not be an innocent mortgagee in
the certificate of title thus issued, acquire rights over the property, the
good faith considering that the same parcel of land covered by the invalidated titles was
court cannot disregard such rights and order the total cancellation of
previously mortgaged by: first, Domingo Cayabyab, a predecessor-in-interest of the
the certificate. The effect of such an outright cancellation would be to
petitioner and second, by the petitioner herself under Transfer Certificate of Title No. 8822
impair public confidence in the certificates of title, for everyone dealing
to the respondent Philippine National Bank is not well-taken. An examination of the
with property registered under the Torrens System would have to
technical descriptions of the parcels of land covered by the three subject torrens titles
inquire in every instance as to whether the title has been regularly or
shows that they are different from each other and there is no way for a reader to detect that
irregularly issued by the court. And this is contrary to the evident
the void torrens titles covered the same parcels of land in Transfer Certificate of Title No.
purpose of the law. Section 39 of Act No. 496 provides that every
8822, previously mortgaged to the respondent Bank. Thus, Transfer Certificate of Title No.
person receiving a certificate of title in pursuance of a dectree of
8822 has the following technical description of the land it covers:
registration, and every subsequent purchaser of registered land who
takes a certificate of title for value in good faith, shall hold the same
free of all encumbrance except those noted on said certificate. We A parcel of land Plan F-61451, situated in the barrio of Pant-at
have heretofore emphasized, and do so now, that every person Municipality of Bayambang, Province of Pangasinan, Islands of Luzon,
dealing with registered land may safely rely on the correctness of the Bounded on the Northeast by Lot No. 1-B of Plan Psd 8364, Lot No. 1
certificate of title issued therefor and the law will in no way oblige him of Plan Psu-30431-Amd. and Lot No. 2 of plan Psu-37494 vs. Lot No. 2
to go behind the certificate to determine the condition of the property . of plan Psu 30431 Amd. on the Southeast, by property of Josefa Sison
de Mananzan, on the Southwest, by properties of Maximiano Felix and
Heirs of Martin Palisoc, and on the Northwest by Lot No. 5 of plan Psu-
Resolving a similar issue in Blanco, et al. v. Esquierdo, et al. (110 Phil. 495) this Court
103094, and Lot No. 1-B of plan Psd 8364. Containing an area of ONE
ruled:
HUNDRED FIVE THOUSAND TWO HUNDRED SEVENTY EIGHT
(105,278), square meters more or less. Surveyed under authority of
That the certificate of title issued in the name of Fructuosa Esquierdo Sections 41, 43, Act No. 2874 and in accordance with existing
(mortgagor) is a nullity, the same having been secured thru fraud, is regulations of the Bureau of Lands by Pedro Terrado, Private Land
not here in question. The only question for determination is whether Surveyor, on Dec. 17, 1933.
the defendant bank is entitled to the protection accorded to 'innocent
purchasers for value', which phrase, according to sec. 38 of the Land
On the other hand, the technical description of the parcel of land awarded to Maximo Alejo,
Registration Law, includes an innocent mortgagee for value. The
mortgagor in one of the subject mortgages in favor of the respondent Bank, which appears
question, in our opinion, must be answered in the affirmative.
in the writ of possession issued by the cadastral court in the voided land registration
proceedings and which necessarily must have been included in the Original Certificate of
The trial court, in the decision complained of, made no finding that the Title No. 14240 issued in the name of the same Maximo Alejo reads:
defendant mortgagee bank was a party to the fraudulent transfer of the
land to Fructuosa Esquierdo. Indeed, there is nothing alleged in the
4. A parcel of land (Lot No. 3, plan Psu-103094). Bounded on the NE,
complaint which may implicate said defendant mortgagee in the fraud,
by property of Gregorio de Leon & Domingo Rodriguez (before) Onofre
or justify a finding that it acted in bad faith. On the other hand, the
Sison Abalos (now); on the SE. by lot No. 2; on the SW. by properties
certificate of title was in the name of the mortgagor Fructuosa
of Flaviano Junio and Vicente Castillo; and on the NW. by Lot No. Area
Esquierdo when the land was mortgaged by her to the defendant bank.
14,807 square meters. Adjudicated in favor of Maximo Alejo.
Such being the case, the said defendant bank, as mortgagee, had the
right to rely on what appeared in the certificate and, in the absence of
anything to excite suspicion, was under no obligation to look beyond The technical description of the parcel of land awarded to Filomeno Domingo, the
the certificate and investigate the title of the mortgagor appearing on mortgagor in the other mortgage in favor of respondent Philippine National Bank, which
the fact of said certificate. (De Lara, et. al. vs. Ayroso 95 Phil. 185; 50 description necessarily must have been inscribed on Transfer Certificate of Title No. 24313
Off. Gaz., [101 4838; Joaquin vs. Madrid, et al., 106 Phil. 1060). Being issued in his name reads:
thus an innocent mortgagee for value, its right or lien upon the land
mortgaged must be respected and protected, even if the mortgagor
obtained her title thereto thru fraud. ...
1. A parcel of land (Lot No. 1, plan Psu- 103094).Bounded on the N. (7) That Notice of Hearing of the Registration Case No. 16347,
and NW. by Lot No. 2; on the NE. by property of Gregorio de Leon & G.L.R.O. Record No. 52435, dated July 11, 1955 was issued by the
Domingo Rodriguez (before) Onofre Sison Abalos (now); on the SE. by Court, setting the trial for October 6, 1955.
Vecinal Road (before) heirs of German Maramba (now); and on the
SW. by properties of Faustino Pinto and Filemon Padua. Area 27,463
(8) Copy of this Notice of Hearing was sent by registered mail, under
square meters. Adjudicated in favor of Florencio Felix.
Registered letter No. 118, which was received by counsel for Praxedes
Moya Atty. Jose M. Garcia, on July 22, 1955, as evidenced by Registry
2. A parcel of land (Lot No. 2, Plan Psu-103094). Bounded on the NE: Return Card of letter No. 118 attached in the Record of the said
by property of Gregorio de Leon & Domingo Rodriguez before Onofre registration case on page 148; and,
Sison Abalos (now); on the SE. and S. by Lot No. 1; on the SW. by
property of Flaviano Junio and on the NW. by Lot No. 3. Area 26,870
(9) Praxedes Moya herself received or. July 23, 1955 copy of the
square meters. Adjudicated in favor of Florencio Felix.
Notice of Hearing as evidenced by Registry Return Card of registered
letter No. 119 attached to the records of Registration Case No. 16347
We agree with the invocation by the Court of Appeals of the principle of equity: on page 151. (See minutes of October 6, 1955, page 153 of the
Records of Registration Case No. 16347, G.L.R.O. Records No. 524
35.
... if there be any doubt as to the correctness of this solution this court
might as well invoke the principle that where one of two innocent
parties must have to suffer due to the act of a third person, he whose (10) On December 20, 1955, the Court rendered its decision in said
negligence had caused the damage should be made to bear the loss; Reg. Case 16347, Record 52435 making the following adjudication ...
in the present case if 'he heirs of Genoveva Miguel, that is to say
herein plaintiff had only been diligent, and had appealed from the
xxx xxx xxx
decision in the registration case, no certificate of Title would have been
issued just like that in the name of the heirs of Genoveva Miguel and
no mortgage could have been constituted by them in favor of Bank but Copy of this Decision were (sic) sent by registered mail to Atty. Jose
as it is, said successors of Praxedes Moya and Josefa Sison failed to M. Garcia, counsel for Praxedes Moya who received it on January 27,
do that; instead they let the decision in the registration case gain the 1956 as evidenced by Registry Return Card of Letter No. 39 attached
status of finality; allowed without prior protest, the certificate of title to to the Record of Registration Case No. 16347, on page 187,
be issued; did not even as early as possible, annotate an adverse
claim on the "titles; and they filed this case only several months
(12) Praxedes Moya, herself, was also notified of this decision,
afterwards, it was their negligence that permitted said adjudicatees in
furnished to her by registered letter which she received on January 30,
the said registration case to apply for and secure mortgages from the
1956 as evidenced by Registry Return Card of Registered Letter No.
Bank.
138, attached to the record of this registration Case 16347, on page
179. " (Record on Appeal pp, 55-56)
The petitioner argues that neither she nor her predecessors could have appealed the
decision in the land registration proceedings because: 1) her predecessors were already
xxx xxx xxx
dead at the time of the promulgation of the decision, and 2) she was not substituted as a
party nor was she aware of said registration proceedings, 3) petitioner's predecessor
Praxedes Moya who was aware of the land registration proceedings had the right to rely on As successor-in-interest, the petitioner did not only succeed to the rights and interests of
the previous suspension of the land registration proceedings; and 4) petitioner's her predecessor-in-interest but she was also bound to recognize the liens and/or
predecessor had the right to rely on the dismissal of Civil Case No. 7199 filed by encumbrances attached to the subject parcels of land which by law are considered to be
respondent's co-defendant against; petitioner's predecessors for "declaration of ownership valid though not inscribed in the torrens title of that land. The petitioner cannot invoke her
'over the subject, parcels of land and that nobody notified petitioner or her predecessors of relationship with her predecessor when it is to her advantage and yet disclaim the effects of
the revival of the void subsequent registration proceedings. said relationship on exactly the same subject matter when it is to her disadvantage. This is
the principle which the Court of Appeals took into consideration when it ruled that the
negligence of petitioner's predecessor-in-interest was binding upon the petitioner herself
The arguments are not well-taken. The records show that Praxedes Moya, predecessor-in-
notwithstanding her non- substitution as party to the subject land registration proceedings.
interest of the petitioner, was fully aware of the subject land registration proceedings. From
the stipulation of the Facts" alone, the extent of her knowledge can be gleaned Thus:

xxx xxx xxx


ESTATE OF THE LATE JESUS S. YUJUICO, REPRESENTED BY ADMINISTRATORS Corporation of the Philippines (1977) was issued. Land reclaimed in the foreshore and
BENEDICTO V. YUJUICO AND EDILBERTO V. YUJUICO; AND AUGUSTO Y. CARPIO, offshore areas of Manila Bay became the properties of the Public Estates Authority (PEA),
PETITIONERS, VS. REPUBLIC OF THE PHILIPPINES AND THE COURT OF APPEALS, a government corporation that undertook the reclamation of lands or the acquisition of
RESPONDENTS. reclaimed lands. On January 13, 1989, OCT No. SP 02 was issued in favor of PEA. The
PEA also acquired ownership of other parcels of land along the Manila Bay coast, some of
DECISION which were subsequently sold to the Manila Bay Development Corporation (MBDC), which
in turn leased portions to Uniwide Holdings, Inc.[7]
VELASCO JR., J.:
The PEA undertook the construction of the Manila Coastal Road. As this was being
In 1973, Fermina Castro filed an application for the registration and confirmation of her title planned, Yujuico and Carpio discovered that a verification survey they commissioned
over a parcel of land with an area of 17,343 square meters covered by plan (LRC) Psu-964 showed that the road directly overlapped their property, and that they owned a portion of
located in the Municipality of Parañaque, Province of Rizal (now Parañaque City), in the the land sold by the PEA to the MBDC.
Pasig-Rizal Court of First Instance (CFI), Branch 22. The application was docketed LRC
Case No. N-8239. The application was opposed by the Office of the Solicitor General On July 24, 1996, Yujuico and Carpio filed before the Parañaque City Regional Trial Court
(OSG) on behalf of the Director of Lands, and by Mercedes Dizon, a private party. Both (RTC), a complaint for the Removal of Cloud and Annulment of Title with Damages
oppositions were stricken from the records since the opposition of Dizon was filed after the docketed as Civil Case No. 96-0317 against the PEA. On May 15, 1998 the parties entered
expiration of the period given by the court, and the opposition of the Director of Lands was into a compromise agreement approved by the trial court in a Resolution dated May 18,
filed after the entry of the order of general default. After considering the evidence, the trial 1998. On June 17, 1998, the parties executed a Deed of Exchange of Real Property,
court rendered its April 26, 1974 Decision. The dispositive portion reads: pursuant to the compromise agreement, where the PEA property with an area of 1.4007
WHEREFORE, the Court hereby declares the applicant, Fermina Castro, of legal age, hectares would to be conveyed to Jesus Yujuico and petitioner Carpio in exchange for their
single, Filipino and a resident of 1515 F. Agoncillo St., Corner J. Escoda St., Ermita, property with a combined area of 1.7343 hectares.
Manila, the true and absolute owner of the land applied for situated in the Municipality of
Parañaque, Province of Rizal, with an area of 17,343 square meters and covered by plan On July 31, 1998, the incumbent PEA General Manager, Carlos P. Doble, informed the
(LRC) Psu-964 and orders the registration of said parcel of land in her name with her OSG that the new PEA board and management had reviewed the compromise agreement
aforementioned personal circumstances. and had decided to defer its implementation and hold it in abeyance following the view of
the former PEA General Manager, Atty. Arsenio Yulo, Jr., that the compromise agreement
Once this decision becomes final and executory, let the corresponding order for the did not reflect a condition of the previous PEA Board, requiring the approval of the Office of
issuance of the decree be issued. the President. The new PEA management then filed a petition for relief from the resolution
approving the compromise agreement on the ground of mistake and excusable negligence.
SO ORDERED.[1]
The Director of Lands and Mercedes Dizon did not appeal from the adverse decision of the The petition was dismissed by the trial court on the ground that it was filed out of time and
Pasig-Rizal CFI. Thus, the order for the issuance of a decree of registration became final, that the allegation of mistake and excusable negligence lacked basis.
and Decree No. N-150912 was issued by the Land Registration Commission (LRC).[2]
Original Certificate of Title (OCT) No. 10215 was issued in the name of Fermina Castro by The PEA fared no better in the Court of Appeals (CA), as the petition was dismissed for
the Register of Deeds for the Province of Rizal on May 29, 1974.[3] failure to pay the required docket fees and for lack of merit.

The land was then sold to Jesus S. Yujuico, and OCT No. 10215 was cancelled. On May The matter was raised to the Supreme Court in Public Estates Authority v. Yujuico[8] but
31, 1974,[4] Transfer Certificate of Title (TCT) No. 445863 was issued in Yujuico’s PEA’s petition was denied, upholding the trial court’s dismissal of the petition for
name, who subdivided the land into two lots. TCT No. 446386[5] over Lot 1 was issued in relief for having been filed out of time. The allegation of fraud in the titling of the subject
his name, while TCT No. S-29361[6] over Lot 2 was issued in the name of petitioner property in the name of Fermina Castro was not taken up by the Court.
Augusto Y. Carpio.
On June 8, 2001, in a Complaint for Annulment and Cancellation of Decree No. N-150912
Annotations at the back of TCT No. 446386 show that Yujuico had, at one time or another, and its Derivative Titles, entitled Republic of the Philippines v. Fermina Castro, Jesus S.
mortgaged the lot to the Philippine Investments System Organization (PISO) and Citibank, Yujuico, August Y. Carpio and the Registry of Deeds of Parañaque City docketed as Civil
N.A. Annotations in the title of petitioner Carpio reveal the lot was mortgaged in favor of Case No. 01-0222, filed with the Parañaque City RTC, respondent Republic of the
Private Development Corporation (PDC), Rizal Commercial Banking Corporation (RCBC) Philippines, through the OSG, alleged that when the land registered to Castro was
and then Philippine Commercial and Industrial Bank (PCIB) and the Development Bank of surveyed by Engr. H. Obreto on August 3, 1972 and subsequently approved by the LRC on
the Philippines (DBP) to secure various loans. April 23, 1973, the land was still a portion of Manila Bay as evidenced by Namria
Hydrographic Map No. 4243, Surveys to 1980; 1st Ed/. January 9/61: Revised 80-11-2; that
Sometime in 1977 Presidential Decree No. (PD) 1085 entitled Conveying the Land Roman Mataverde, the then OIC of the Surveys Division, Bureau of Lands, informed the
Reclaimed in the Foreshore and Offshore of the Manila Bay (The Manila-Cavite Coastal OIC of the Legal Division that “[w]hen projected on Cadastral Maps CM 14 deg. 13’
Road Project) as Property of the Public Estates Authority as well as Rights and Interests N-120 deg, 59’E, Sec.2-A of Parañaque Cadastre (Cad. 299), (LRC) Psu-964 falls
with Assumptions of Obligations in the Reclamation Contract Covering Areas of the Manila inside Manila Bay, outside Cad. 299”; that then Acting Regional Lands Director Narciso
Bay between the Republic of the Philippines and the Construction and Development V. Villapando issued a Report dated November 15, 1973 stating that plan (LRC) Psu-964 is
a portion of Manila Bay; that then Officer-in-Charge, Assistant Director of Lands, Ernesto C.
Mendiola, submitted his Comment and Recommendation re: Application for Registration of The Issues
Title of FERMINA CASTRO, LRC Case No. N-8239, dated Dec. 1, 1977, praying that the
instant registration case be dismissed; and that Fermina Castro had no registrable rights Petitioners now raise the following issues before this Court:
over the property. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR AND DECIDED A
QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORDANCE WITH LAW AND THE
More significantly, respondent Republic argued that, first, since the subject land was still APPLICABLE DECISIONS OF THE HONORABLE COURT AND HAS DEPARTED FROM
underwater, it could not be registered in the name of Fermina Castro. Second, the land THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS
registration court did not have jurisdiction to adjudicate inalienable lands, thus the decision NECESSITATING THE HONORABLE COURT’S EXERCISE OF ITS POWER OF
adjudicating the subject parcel of land to Fermina Castro was void. And third, the titles of SUPERVISION CONSIDERING THAT:
Yujuico and Carpio, being derived from a void title, were likewise void.[9]

On September 13, 2001, Yujuico and Carpio filed a Motion to Dismiss (With Cancellation of I. THE REVERSAL BY THE COURT OF APPEALS OF THE TRIAL COURT’S
Notice of Lis Pendens),[10] on the grounds that: (1) the cause of action was barred by prior APPLICATION OF THE PRINCIPLE OF RES JUDICATA IN THE INSTANT
judgment; (2) the claim had been waived, abandoned, or otherwise extinguished; (3) a CASE IS BASED ON ITS ERRONEOUS ASSUMPTION THAT THE SUBJECT
condition precedent for the filing of the complaint was not complied with; and (4) the LAND IS OF PUBLIC DOMAIN, ALLEGEDLY PART OF MANILA BAY.
complaint was not verified and the certification against forum shopping was not duly
executed by the plaintiff or principal party.

On November 27, 2001, respondent Republic filed an Opposition[11] to the motion to dismiss
to which defendants filed a Reply[12] on January 14, 2002, reiterating the grounds for the A. IN THE FIRESTONE CASE, THE HONORABLE COURT APPLIED
motion to dismiss. THE PRINCIPLE OF RES JUDICATA NOTWITHSTANDING
ALLEGATIONS OF LACK OF JURISDICTION OF A LAND
In the August 7, 2002 Order of the RTC,[13] Civil Case No. 01-0222 was dismissed. The trial REGISTRATION COURT, FORECLOSING ANY FURTHER ATTEMPT
court stated that the matter had already been decided in LRC Case No. N-8239, and that BY RESPONDENT THEREIN, AS IN THE INSTANT CASE, TO
after 28 years without being contested, the case had already become final and executory. RESURRECT A LONG-SETTLED JUDICIAL DETERMINATION OF
The trial court also found that the OSG had participated in the LRC case, and could have REGISTRABILITY OF A PARCEL OF LAND BASED ON THE SHEER
questioned the validity of the decision but did not. Civil Case No. 01-0222 was thus found ALLEGATION THAT THE SAME IS PART OF THE PUBLIC DOMAIN.
barred by prior judgment.

On appeal to the CA, in CA-G.R. CV No. 76212, respondent Republic alleged that the trial B. THE LAND REGISTRATION COURT HAD JURISDICTION TO
court erred in disregarding that appellant had evidence to prove that the subject parcel of DETERMINE WHETHER THE SUBJECT LAND WAS PART OF THE
land used to be foreshore land of the Manila Bay and that the trial court erred in dismissing PUBLIC DOMAIN.
Civil Case No. 01-0222 on the ground of res judicata.[14]
C. RESPONDENT’S REVERSION CASE SEEKS TO RETRY THE
The CA observed that shores are properties of the public domain intended for public use VERY SAME FACTUAL ISSUES THAT HAVE ALREADY BEEN
and, therefore, not registrable and their inclusion in a certificate of title does not convert the JUDICIALLY DETERMINED OVER THIRTY (30) YEARS AGO.
same into properties of private ownership or confer title upon the registrant.

Further, according to the appellate court res judicata does not apply to lands of public D. THE JURISPRUDENTIAL BASES APPLIED BY THE COURT OF
domain, nor does possession of the land automatically divest the land of its public APPEALS IN ITS QUESTIONED DECISION ARE MISPLACED,
character. CONSIDERING THAT THEY ARE ALL PREDICATED ON THE
ERRONEOUS PREMISE THAT IT IS UNDISPUTED THAT THE
The appellate court explained that rulings of the Supreme Court have made exceptions in SUBJECT LAND IS PART OF THE PUBLIC DOMAIN.
cases where the findings of the Director of Lands and the Department of Environment and
Natural Resources (DENR) were conflicting as to the true nature of the land in as much as
reversion efforts pertaining foreshore lands are embued with public interest.

The dispositive portion of the CA decision reads, II. RESPONDENT IS BARRED BY JURISDICTIONAL ESTOPPEL AND LACHES
WHEREFORE, premises considered, the present appeal is hereby GRANTED. The FROM QUESTIONING THE JURISDICTION OF THE LAND REGISTRATION
appealed Order dated August 7, 2002 of the trial court in Civil Case No. 01-0222 is hereby COURT.
REVERSED and SET ASIDE. The case is hereby REMANDED to said court for further
proceedings and a full-blown trial on the merits with utmost dispatch.[15] III. RELIANCE BY THE COURT OF APPEALS ON THE ISOLATED
Hence, this petition. PRONOUNCEMENT OF THE HONORABLE COURT IN THE PEA CASE IS
UNWARRANTED AND MISLEADING CONSIDERING THAT THE MATTER OF 3. Alienations of lands acquired under CA No. 141 in favor of persons not qualified
WHETHER RES JUDICATA APPLIES WITH RESPECT TO THE LAND under Sections 121, 122, and 123 of CA No. 141.
REGISTRATION COURT’S DECISION IN 1974 WAS NOT IN ISSUE IN
SAID CASE.
From the foregoing, an action for reversion to cancel titles derived from homestead patents
or free patents based on transfers and conveyances in violation of CA No. 141 is filed by
the OSG pursuant to its authority under the Administrative Code with the RTC. It is clear
therefore that reversion suits were originally utilized to annul titles or patents
administratively issued by the Director of the Land Management Bureau or the Secretary of
A. THE INSTANT REVERSION CASE IS NOT THE PROPER
the DENR.
RECOURSE.
While CA No. 141 did not specify whether judicial confirmation of titles by a land
B. THE VALIDITY OF THE COURT-APPROVED COMPROMISE registration court can be subject of a reversion suit, the government availed of such remedy
AGREEMENT 15 MAY 1998 HAS ALREADY BEEN AFFIRMED BY by filing actions with the RTC to cancel titles and decrees granted in land registration
THE HONORABLE COURT IN THE PEA CASE. applications.

The situation changed on August 14, 1981 upon effectivity of Batas Pambansa (BP) Blg.
129 which gave the Intermediate Appellate Court the exclusive original jurisdiction over
actions for annulment of judgments of RTCs.
IV. EQUITABLE CONSIDERATIONS MANDATE THE APPLICATION OF THE
RULE ON ORDINARY ESTOPPEL AND LACHES IN THE INSTANT CASE When the 1997 Rules of Civil Procedure became effective on July 1, 1997, it incorporated
AGAINST RESPONDENT. Rule 47 on annulment of judgments or final orders and resolutions of the RTCs. The two
grounds for annulment under Sec. 2, Rule 47 are extrinsic fraud and lack of jurisdiction. If
based on extrinsic fraud, the action must be filed within four (4) years from its discovery,
V. RESPONDENT CANNOT BE GIVEN SPECIAL CONSIDERATION AND and if based on lack of jurisdiction, before it is barred by laches or estoppel as provided by
EXCUSED FOR TRANSGRESSING RULES OF PROCEDURE.[16] Section 3, Rule 47. Thus, effective July 1, 1997, any action for reversion of public land
instituted by the Government was already covered by Rule 47.
Essentially, the issues boil down to three: (1) Is a reversion suit proper in this case? (2) Is
The instant Civil Case No. 01-0222 for annulment and cancellation of Decree No. N-
the present petition estopped by laches? (3) Did the CA erroneously apply the principle of
150912 and its derivative titles was filed on June 8, 2001 with the Parañaque City RTC. It
res judicata?
is clear therefore that the reversion suit was erroneously instituted in the Parañaque RTC
and should have been dismissed for lack of jurisdiction. The proper court is the CA which is
An action for reversion seeks to restore public land fraudulently awarded and disposed of to
the body mandated by BP Blg. 129 and prescribed by Rule 47 to handle annulment of
private individuals or corporations to the mass of public domain.[17] This remedy is provided
judgments of RTCs.
under Commonwealth Act (CA) No. 141 (Public Land Act) which became effective on
December 1, 1936. Said law recognized the power of the state to recover lands of public
In Collado v. Court of Appeals,[18] the government, represented by the Solicitor General
domain. Section 124 of CA No. 141 reads:
pursuant to Section 9(2) of BP Blg. 129, filed a petition for annulment of judgment with the
SEC. 124. Any acquisition, conveyance, alienation, transfer, or other contract made or
CA. Similarly in the case of Republic v. Court of Appeals,[19] the Solicitor General correctly
executed in violation of any of the provisions of Sections one hundred and eighteen, one
filed the annulment of judgment with the said appellate court.
hundred and twenty, one hundred and twenty one, one hundred and twenty-two, and one
hundred twenty-three of this Act shall be unlawful and null and void from its execution and
This was not done in this case. The Republic misfiled the reversion suit with the
shall produce the effect of annulling and cancelling the grant, title, patent, or permit
Parañaque RTC. It should have been filed with the CA as required by Rule 47. Evidently,
originally issued, recognized or confirmed, actually or presumptively, and cause the
the Parañaque RTC had no jurisdiction over the instant reversion case.
reversion of the property and its improvements to the State. (Emphasis supplied.)
Pursuant to Section 124 of the Public Land Act, reversion suits are proper in the following
Assuming that the Parañaque RTC has jurisdiction over the reversion case, still the lapse
instances, to wit:
of almost three decades in filing the instant case, the inexplicable lack of action of the
Republic and the injury this would cause constrain us to rule for petitioners. While it may be
1. Alienations of land acquired under free patent or homestead provisions in true that estoppel does not operate against the state or its agents,[20] deviations have been
violation of Section 118, CA No. 141; allowed. In Manila Lodge No. 761 v. Court of Appeals, we said:
Estoppels against the public are little favored. They should not be invoked except in rare
2. Conveyances made by non-Christians in violation of Section 120, CA No. 141; and unusual circumstances, and may not be invoked where they would operate to defeat
and the effective operation of a policy adopted to protect the public. They must be applied with
circumspection and should be applied only in those special cases where the interests of
justice clearly require it. Nevertheless, the government must not be allowed to deal
dishonorably or capriciously with its citizens, and must not play an ignoble part or
do a shabby thing; and subject to limitations x x x, the doctrine of equitable estoppel SEC. 32. Review of decree of registration; Innocent purchaser for value.—The decree of
may be invoked against public authorities as well as against private individuals.[21] registration shall not be reopened or revised by reason of absence, minority, or other
(Emphasis supplied.) disability of any person adversely affected thereby, nor by any proceeding in any court for
Equitable estoppel may be invoked against public authorities when as in this case, the lot reversing judgments, subject, however, to the right of any person, including the
was already alienated to innocent buyers for value and the government did not undertake government and the branches thereof, deprived of land or of any estate or interest
any act to contest the title for an unreasonable length of time. therein by such adjudication or confirmation of title obtained by actual fraud, to file
in the proper Court of First Instance a petition for reopening and review of the decree
In Republic v. Court of Appeals, where the title of an innocent purchaser for value who of registration not later than one year from and after the date of the entry of such
relied on the clean certificates of the title was sought to be cancelled and the excess land to decree of registration, but in no case shall such petition be entertained by the court
be reverted to the Government, we ruled that “[i]t is only fair and reasonable to apply where an innocent purchaser for value has acquired the land or an interest therein,
the equitable principle of estoppel by laches against the government to avoid an whose rights may be prejudiced. Whenever the phrase “innocent purchaser for
injustice to innocent purchasers for value (emphasis supplied).”[22] We explained: value” or an equivalent phrase occurs in this Decree, it shall be deemed to include an
Likewise time-settled is the doctrine that where innocent third persons, relying on the innocent lessee, mortgagee, or other encumbrances for value. (Emphasis supplied.)
correctness of the certificate of title, acquire rights over the property, courts cannot In this petition, the LRC (now LRA), on May 30, 1974, issued Decree No. N-150912 in favor
disregard such rights and order the cancellation of the certificate. Such cancellation would of Fermina Castro and OCT No. 10215 was issued by the Rizal Registrar of Deeds on May
impair public confidence in the certificate of title, for everyone dealing with property 29, 1974. OCT No. 10215 does not show any annotation, lien, or encumbrance on its face.
registered under the Torrens system would have to inquire in every instance whether the Relying on the clean title, Yujuico bought the same in good faith and for value from her. He
title has been regularly issued or not. This would be contrary to the very purpose of the law, was issued TCT No. 445863 on May 31, 1974. There is no allegation that Yujuico was a
which is to stabilize land titles. Verily, all persons dealing with registered land may safely buyer in bad faith, nor did he acquire the land fraudulently. He thus had the protection of
rely on the correctness of the certificate of title issued therefore, and the law or the courts the Torrens System that every subsequent purchaser of registered land taking a certificate
do not oblige them to go behind the certificate in order to investigate again the true of title for value and in good faith shall hold the same free from all encumbrances except
condition of the property. They are only charged with notice of the liens and encumbrances those noted on the certificate and any of the x x x encumbrances which may be subsisting.
on the property that are noted on the certificate.[23] [26]
The same legal shield redounds to his successors-in-interest, the Yujuicos and Carpio,
more particularly the latter since Carpio bought the lot from Jesus Y. Yujuico for value and
xxxx in good faith.

But in the interest of justice and equity, neither may the titleholder be made to bear the Likewise protected are the rights of innocent mortgagees for value, the PISO, Citibank,
unfavorable effect of the mistake or negligence of the State’s agents, in the absence of N.A., PDC, RCBC, PCIB, and DBP. Even if the mortgagor’s title was proved fraudulent
proof of his complicity in a fraud or of manifest damage to third persons. First, the real and the title declared null and void, such declaration cannot nullify the mortgage rights of a
purpose of the Torrens system is to quiet title to land to put a stop forever to any question mortgagee in good faith.[27]
as to the legality of the title, except claims that were noted in the certificate at the time of
the registration or that may arise subsequent thereto. Second, as we discussed earlier, All told, a reversion suit will no longer be allowed at this stage.
estoppel by laches now bars petitioner from questioning private respondents’ titles to
the subdivision lots. Third, it was never proven that Private Respondent St. Jude was a More on the issue of laches. Laches is the failure or neglect, for an unreasonable and
party to the fraud that led to the increase in the area of the property after its subdivision. unexplained length of time, to do that which by exercising due diligence could or should
Finally, because petitioner even failed to give sufficient proof of any error that might have have been done earlier. It is negligence or omission to assert a right within a reasonable
been committed by its agents who had surveyed the property, the presumption of regularity time, warranting a presumption that the party entitled thereto has either abandoned or
in the performance of their functions must be respected. Otherwise, the integrity of the declined to assert it.[28]
Torrens system, which petitioner purportedly aims to protect by filing this case, shall forever
be sullied by the ineptitude and inefficiency of land registration officials, who are ordinarily When respondent government filed the reversion case in 2001, 27 years had already
presumed to have regularly performed their duties.[24] elapsed from the time the late Jesus Yujuico purchased the land from the original owner
Republic v. Court of Appeals is reinforced by our ruling in Republic v. Umali,[25] where, in a Castro. After the issuance of OCT No. 10215 to Castro, no further action was taken by the
reversion case, we held that even if the original grantee of a patent and title has obtained government to question the issuance of the title to Castro until the case of Public Estates
the same through fraud, reversion will no longer prosper as the land had become private Authority, brought up in the oral argument before this Court on September 6, 2000.[29] We
land and the fraudulent acquisition cannot affect the titles of innocent purchasers for value. then held that allegation of fraud in the issuance of the title was not proper for consideration
and determination at that stage of the case.
Considering that innocent purchaser for value Yujuico bought the lot in 1974, and more
than 27 years had elapsed before the action for reversion was filed, then said action is now From the undisputed facts of the case, it is easily revealed that respondent Republic took
barred by laches. its sweet time to nullify Castro’s title, notwithstanding the easy access to ample
remedies which were readily available after OCT No. 10215 was registered in the name of
While the general rule is that an action to recover lands of public domain is imprescriptible, Castro. First, it could have appealed to the CA when the Pasig-Rizal CFI rendered a
said right can be barred by laches or estoppel. Section 32 of PD 1592 recognized the rights decision ordering the registration of title in the name of applicant Castro on April 26, 1974.
of an innocent purchaser for value over and above the interests of the government. Section Had it done so, it could have elevated the matter to this Court if the appellate court affirms
32 provides: the decision of the land registration court. Second, when the entry of Decree No. N-150912
was made on May 29, 1974 by the Rizal Register of Deeds, the Republic had one (1) year made clear that a judgment based on a compromise agreement is a judgment on the
from said date or up to May 28, 1975 to file a petition for the reopening and review of merits, wherein the parties have validly entered into stipulations and the evidence was duly
Decree No. N-150912 with the Rizal CFI (now RTC) on the ground of actual fraud under considered by the trial court that approved the agreement. In the instant case, the May 18,
section 32 of PD 1592. Again, respondent Republic did not avail of such remedy. Third, 1998 Resolution approving the compromise agreement confirmed the favorable decision
when Jesus Yujuico filed a complaint for Removal of Cloud and Annulment of Title with directing the registration of the lot to Castro’s name in LRC Case No. N-8239. Similarly,
Damages against PEA before the Parañaque RTC in Civil Case No. 96-0317, respondent in Firestone, the Margolles case confirmed the decision rendered in favor of Gana in Land
could have persevered to question and nullify Castro’s title. Instead, PEA undertook a Registration Case No. 672 ordering the issuance of the decree to said applicant. Fourth, in
compromise agreement on which the May 18, 1998 Resolution[30] was issued. PEA in effect Firestone, the Supreme Court relied on the letter of then Solicitor General Francisco
admitted that the disputed land was owned by the predecessors-in-interest of petitioners Chavez that the evidence of the Bureau of Lands and the LRC was not sufficient to support
and their title legal and valid; and impliedly waived its right to contest the validity of said an action for cancellation of OCT No. 4216. In the instant case, both the Solicitor General
title; respondent Republic even filed the petition for relief from judgment beyond the time and the Government Corporate Counsel opined that the Yujuico land was not under water
frames allowed by the rules, a fact even acknowledged by this Court in Public Estates and that “there appears to be no sufficient basis for the Government to institute the
Authority. Lastly, respondent only filed the reversion suit on June 8, 2001 after the passage action for annulment.” Fifth, in Firestone, we ruled that “the Margolles case had long
of 27 years from the date the decree of registration was issued to Fermina Castro. become final, thus the validity of OCT No. 4216 should no longer be disturbed and should
be applied in the instant case (reversion suit) based on the principle of res judicata or,
Such a Rip Van Winkle, coupled with the signing of the settlement with PEA, otherwise, the rule on conclusiveness of judgment.”[34]
understandably misled petitioners to believe that the government no longer had any right or
interest in the disputed lot to the extent that the two lots were even mortgaged to several Clearly from the above, Firestone is a precedent case. The Public Estates Authority had
banks including a government financing institution. Any nullification of title at this stage become final and thus the validity of OCT No. 10215 issued to Castro could no longer be
would unsettle and prejudice the rights and obligations of innocent parties. All told, we are questioned.
constrained to conclude that laches had set in.
While we said in Public Estates Authority that the court does not foreclose the right of the
Even granting arguendo that respondent Republic is not precluded by laches from Republic from pursuing the proper recourse in a separate proceedings as it may deem
challenging the title of petitioners in the case at bar, still we find that the instant action for warranted, the statement was obiter dictum since the inquiry on whether or not the disputed
reversion is already barred by res judicata. land was still under water at the time of its registration was a non-issue in the said case.

Petitioners relying on Firestone Ceramics, Inc. v. Court of Appeals[31] as a precedent to the Even granting for the sake of argument that Firestone is not squarely applicable, still we
case at bar contend that the instant reversion suit is now barred by res judicata. find the reversion suit already barred by res judicata.

We agree with petitioners. For res judicata to serve as an absolute bar to a subsequent action, the following requisites
must concur: (1) there must be a final judgment or order; (2) the court rendering it must
The doctrine on precedents is expressed in the latin maxim—Stare decisis et non quieta have jurisdiction over the subject matter and the parties; (3) it must be a judgment or order
movere. Follow past precedents and do not disturb what has been settled.[32] In order on the merits; and (4) there must be between the two cases, identity of parties, subject
however that a case can be considered as a precedent to another case which is pending matter and causes of action.[35]
consideration, the facts of the first case should be similar or analogous to the second case.
There is no question as to the first, third and last requisites. The threshold question pertains
A perusal of the facts of the Firestone case and those of the case at bar reveals that the to the second requisite, whether or not the then Pasig-Rizal CFI, Branch 22 had jurisdiction
facts in the two (2) cases are parallel. First, in Firestone and in this case, the claimants filed over the subject matter in LRC Case No. N-8239. In Civil Case No. 01-0222, the
land registration applications with the CFI; both claimants obtained decrees for registration Parañaque City RTC, Branch 257 held that the CFI had jurisdiction. The CA reversed the
of lots applied for and were issued OCTs. Second, in Firestone, the Republic filed a decision of the Parañaque City RTC based on the assertion of respondent Republic that
reversion case alleging that the land covered by the OCT was still inalienable forest land at the Pasig-Rizal CFI had no jurisdiction over the subject matter, and that there was a need
the time of the application and hence the Land Registration Court did not acquire to determine the character of the land in question.
jurisdiction to adjudicate the property to the claimant. In the instant case, respondent
Republic contend that the land applied for by Yujuico was within Manila Bay at the time of The Parañaque City RTC Order dismissing the case for res judicata must be upheld.
application and therefore the CFI had no jurisdiction over the subject matter of the
complaint. Third, in Firestone, the validity of the title of the claimant was favorably ruled The CA, in rejecting the dismissal of the reversion case by the Parañaque RTC, relied on
upon by this Court in G.R. No. 109490 entitled Patrocinio E. Margolles v. CA. In the case at two cases, namely: Municipality of Antipolo v. Zapanta[36] and Republic v. Vda. De Castillo.
[37]
bar, the validity of the compromise agreement involving the disputed lot was in effect
upheld when this Court in Public Estates Authority v. Yujuico dismissed the petition of PEA
seeking to reinstate the petition for relief from the May 18, 1998 Resolution approving said In Municipality of Antipolo, we held that the land registration court had no jurisdiction to
compromise agreement. With the dismissal of the petition, the May 18, 1998 Resolution entertain any land registration application if the land was public property, thus:
became final and executory and herein respondent Republic through PEA was deemed to Since the Land Registration Court had no jurisdiction to entertain the application for
have recognized Castro’s title over the disputed land as legal and valid. In Romero v. registration of public property of ANTIPOLO, its Decision adjudicating the DISPUTED
Tan,[33] we ruled that “a judicial compromise has the effect of res judicata.” We also PROPERTY as of private ownership is null and void. It never attained finality, and can be
attacked at any time. It was not a bar to the action brought by ANTIPOLO for its annulment Registration Court [has] no jurisdiction to entertain the application for registration of
by reason of res judicata. public property x x x” for such court precisely has the jurisdiction to entertain land
“[x x x] the want of jurisdiction by a court over the subject matter renders the judgment registration applications since that is conferred by PD 1529. The applicant in a land
void and a mere nullity, and considering that a void judgment is in legal effect no judgment, registration case usually claims the land subject matter of the application as his/her private
by which no rights are divested, from which no rights can be obtained, which neither binds property, as in the case of the application of Castro. Thus, the conclusion of the CA that the
nor bars any one, and under which all acts performed and all claims flowing out of are void, Pasig-Rizal CFI has no jurisdiction over the subject matter of the application of Castro has
and considering, further, that the decision, for want of jurisdiction of the court, is not a no legal mooring. The land registration court initially has jurisdiction over the land applied
decision in contemplation of law, and hence, can never become executory, it follows that for at the time of the filing of the application. After trial, the court, in the exercise of its
such a void judgment cannot constitute a bar to another case by reason of res judicata.” jurisdiction, can determine whether the title to the land applied for is registrable and can be
confirmed. In the event that the subject matter of the application turns out to be inalienable
xxxx public land, then it has no jurisdiction to order the registration of the land and perforce must
dismiss the application.
“It follows that ‘if a person obtains a title under the Public Land Act which includes,
by oversight, lands which cannot be registered under the Torrens System, or when the Based on our ruling in Antipolo, the threshold question is whether the land covered by the
Director of Lands did not have jurisdiction over the same because it is a public forest, the titles of petitioners is under water and forms part of Manila Bay at the time of the land
grantee does not, by virtue of the said certificate of title alone, become the owner of the registration application in 1974. If the land was within Manila Bay, then res judicata does
land illegally included’ (Republic vs. Animas, 56 SCRA 499, 503; Ledesma vs. not apply. Otherwise, the decision of the land registration court is a bar to the instant
Municipality of Iloilo, 49 Phil. 769).” reversion suit.

[x x x x] After a scrutiny of the case records and pleadings of the parties in LRC Case No. N-8239
and in the instant petition, we rule that the land of Fermina Castro is registrable and not
“Under these circumstances, the certificate of title may be ordered cancelled (Republic part of Manila Bay at the time of the filing of the land registration application.
vs. Animas, et al., supra), and the cancellation maybe pursued through an ordinary action
therefore. This action cannot be barred by the prior judgment of the land registration court, The trial court’s Decision in 1974 easily reveals the basis for its conclusion that the
since the said court had no jurisdiction over the subject matter. And if there was no such subject matter was a dry land, thus:
jurisdiction, then the principle of res judicata does not apply. [x x x] Certainly, one of the On February 1, 1974, the applicant presented her evidence before the Deputy Clerk of this
essential requisites, i.e., jurisdiction over the subject matter, is absent in this case.” Court and among the evidence presented by her were certain documents which were
(Italics supplied).[38] marked as Exhibits D to J, inclusive. The applicant testified in her behalf and substantially
The plain import of Municipality of Antipolo is that a land registration court, the RTC at declared that: she was 62 years old, single, housekeeper and residing at 1550 J. Escoda,
present, has no jurisdiction over the subject matter of the application which respondent Ermita, Manila; that she was born on June 3, 1911; that she first came to know of the land
Republic claims is public land. This ruling needs elucidation. applied for which is situated in the Municipality of Parañaque, province of Rizal, with an
area of 17,343 square meters and covered by plan (LRC) Psu-964 while she was still ten
Firmly entrenched is the principle that jurisdiction over the subject matter is conferred by (10) years old or sometime in 1921; that when she first came to know of the land applied
law.[39] Consequently, the proper CFI (now the RTC) under Section 14 of PD 1529[40] for, the person who was in possession and owner of said land was her father, Catalino
(Property Registration Decree) has jurisdiction over applications for registration of title to Castro; that during that time her father used to plant on said land various crops like pechay,
land. mustard, eggplant, etc.; that during that time, her father built a house on said land which
was used by her father and the other members of the family, including the applicant, as
Section 14 of PD 1592 provides: their residential house; that the land applied for was inherited by her father from her
SEC. 14. Who may apply.—The following persons may file in the proper Court of grandfather Sergio Castro; that Catalino Castro continuously possessed and owned the
First Instance an application for registration of title to land, whether personally or land in question from 1921 up to the time of his death in 1952; and that during that period of
through their duly authorized representatives: time nobody ever disturbed the possession and ownership of her father over the said parcel
of land; that after the death of her father in 1952 she left the place and transferred her place
(1) Those who by themselves or through their predecessors-in-interest have been in open, of residence but she had also occasions to visit said land twice or thrice a week and
continuous, exclusive and notorious possession and occupation of alienable and sometimes once a week; that after she left the land in question in 1952, she still continued
disposable lands of the public domain under a bona fide claim of ownership since June 12, possessing said land, through her caretaker Eliseo Salonga; that her possession over the
1945, or earlier. (Emphasis supplied.) land in question from the time she inherited it up to the time of the filing of the application
Conformably, the Pasig-Rizal CFI, Branch XXII has jurisdiction over the subject matter of has been continuous, public, adverse against the whole world and in the concept of an
the land registration case filed by Fermina Castro, petitioners’ predecessor-in-interest, owner; that it was never encumbered, mortgaged, or disposed of by her father during his
since jurisdiction over the subject matter is determined by the allegations of the initiatory lifetime and neither did she ever encumber or sell the same; that it was declared for
pleading-the application.[41] Settled is the rule that “the authority to decide a case and taxation purposes by her father when he was still alive and her father also paid the real
not the decision rendered therein is what makes up jurisdiction. When there is jurisdiction, estate taxes due to the government although the receipt evidencing the payment of said
the decision of all questions arising in the case is but an exercise of jurisdiction.”[42] real estate taxes for the property applied for have been lost and could no longer be found
inspite of diligent effort exerted to locate the same.
In our view, it was imprecise to state in Municipality of Antipolo that the “Land
The other witness presented by the applicant was Emiliano de Leon, who declared that he (Cad-299), (LRC) Psu-964 falls inside Manila Bay, outside Cad-299.”[45]
was 70 years old, married, farmer and residing at San Jose, Baliwag, Bulacan; that he
knew Catalino Castro, the father of the applicant because said Catalino Castro was his The same conclusion was adopted in a November 15, 1973 letter of Narciso Villapando,
neighbor in Tambo, Parañaque, Rizal, he had a house erected on the land of Catalino Acting Regional Lands Director to the Chief, Legal Division, Bureau of Lands and in the
Castro; that he was born in 1903 and he first came to know of the land in question when in Comment and Recommendation of Ernesto C. Mendiola, Assistant Director, also of the
1918 when he was about 18 years old; that the area of the land owned and possessed by Bureau of Lands.
Catalino Castro where he constructed a residential house has an area of more than one
and one-half (1 ½) hectares; that the possession of Catalino Castro over the land in Respondent likewise cites Namria Hydrographic Map No. 4243 Revised 80-11-2 to support
question was peaceful, continuous, notorious, adverse against the whole world and in the its position that Castro’s lot is a portion of Manila Bay.
concept of an owner; that during the time that Catalino Castro was in possession of the
land applied for he planted on said parcel of land mango, coconut and banana, etc.; that The burden of proving these averments falls to the shoulders of respondent Republic. The
Catalino Castro continuously possessed and owned said parcel of land up to the year 1952 difficulty is locating the witnesses of the government. Roman Mataverde, then OIC of the
when he died; that during the time that Catalino Castro was in possession of said land, Surveys Division retired from the government service in 1982. He should by this time be in
nobody ever laid claim over the said property; that said land is not within any military or his 90s. Moreover, Asst. Regional Director Narciso Villapando and Asst. Director Ernesto
naval reservation; that upon the death of Catalino Castro, the applicant took possession of C. Mendiola are no longer connected with the Bureau of Lands since 1986.
the land applied for and that up to the present the applicant is in possession of said land;
that he resided in the land in question from 1918 up to the time he transferred his place of Assuming that OIC Roman Mataverde, Asst. Regional Director Narciso Villapando and
residence in Baliwag, Bulacan in the year 1958. Assistant Director Ernesto C. Mendiola are still available as witnesses, the projections
made on the cadastral maps of the then Bureau of Lands cannot prevail over the results of
On February 11, 1974, the Court, pursuant to the provision of Presidential Decree No. 230 the two ocular inspections by several Bureau of Lands officials that the disputed lot is
issued by his Excellency, Ferdinand E. Marcos dated July 9, 1973 held in abeyance the definitely “dry and solid land” and not part of Manila Bay. Special Attorney Saturnino
rendition of a decision in this case and directed the applicant to submit a white print copy of A. Pacubas, Land Inspector Adelino G. Gorospe, Geodetic Engineer Manuel A. Cervantes
plan (LRC) Psu-964 to the Director of lands who was directed by the Court to submit his and Administrative Asst. Lazaro A. Berana, all officials of the Bureau of Lands, were
comment and recommendation thereon. positive that the disputed land is solid and dry land and no longer forms part of Manila Bay.
Evidence gathered from the ocular inspection is considered direct and firsthand information
The property in question is declared for taxation purposes under Tax Declaration No. entitled to great weight and credit while the Mataverde and Villapando reports are evidence
51842 (Exhibit G) and real estate taxes due thereon have been paid up to the year 1973 weak in probative value, being merely based on theoretical projections “in the cadastral
(Exhibit H). map or table surveys.”[46] Said projections must be confirmed by the actual inspection
and verification survey by the land inspectors and geodetic engineers of the Bureau of
In compliance with the Order of this Court February 11, 1974, the Director of Lands, Lands. Unfortunately for respondent Republic, the bureau land inspectors attested and
thru Special Attorney Saturnino A. Pacubas, submitted a report to this Court dated affirmed that the disputed land is already dry land and not within Manila Bay.
April 25, 1974, stating among other things, that upon ocular inspection conducted by
Land Inspector Adelino G. Gorospe and the subsequent joint ocular inspection On the other hand, the Namria Hydrographic Map No. 4243 does not reveal what portion of
conducted by Geodetic Engineer Manuel A. Cervantes and Administrative Assistant Manila Bay was Castro’s lot located in 1974. Moreover, a hydrographic map is not the
Lazaro G. Berania, it was established that the parcel of land covered by plan (LRC) best evidence to show the nature and location of the lot subject of a land registration
Psu-964 no longer forms part of the Manila Bay but is definitely solid and dry land. application. It is derived from a hydrographic survey which is mainly used for navigation
purposes, thus:
In this connection, it should be noted that Administrative Assistant Lazaro G. Berania and Surveys whose principal purpose is the determination of data relating to bodies of water. A
Geodetic Engineer Manuel A. Cervantes, in their report dated March 22, 1974 have also hydrographic survey may consist of the determination of one or several of the following
stated that the land applied for cannot be reached by water even in the highest tide classes of data: depth water; configuration and nature of the bottom; directions and force of
and that the said land is occupied by squatter families who have erected makeshift currents; heights and times of tides and water stages; and location of fixed objects for
shanties and a basketball court which only prove that the same is dry and solid land survey and navigation purposes.[47]
away from the shores of Manila Bay. Juxtaposed with finding of the ocular inspection by Bureau of Lands Special Attorney
Pacubas and others that Castro’s lot is dry land in 1974, Namria Hydrographic Map No.
Furthermore, Land Inspector Adelino G. Gorospe in his letter-report dated November 28, 4243 is therefore inferior evidence and lacking in probative force.
1973 has also stated that there is a house of pre-war vintage owned by the applicant on the
land in question which in effect corroborates the testimony of the applicant and her witness Moreover, the reliability and veracity of the July 18, 1973 report of Roman Mataverde
that they have lived on the land in question even prior to the outbreak of the second world based on the alleged projection on cadastral maps and the Villapando report dated
war and that the applicant has been in possession of the land in question long time ago.[43] November 15, 1973 are put to serious doubt in the face of the opinion dated October 13,
To counter the evidence of applicant Castro, and bolster its claim that she has no valid title, 1997 of the Government Corporate Counsel, the lawyer of the PEA, which upheld the
respondent Republic relies on the July 18, 1973 Office Memorandum[44] of Roman validity of the titles of petitioners, thus:
Mataverde, OIC, Surveys Division, to the OIC, Legal Division, of the Bureau of Lands, We maintain to agree with the findings of the court that the property of Fermina Castro was
stating that “when projected on cadastral maps CM 14º 13’N -120º 59’ E., registrable land, as based on the two (2) ocular inspections conducted on March 22, 1974
Sec. 3-D and CM 14º 30’N - 120º 59’E., Sec. 2-A of Paranaque [sic] Cadastre by Lands Administrative Assistant Lazaro G. Berania and Lands Geodetic Engr. Manuel
Cervantes, It may be stated at the outset that a petition for annulment of certificate of title or
reconveyance of land may be based on fraud which attended the issuance of the decree of
finding ‘… the same no longer forms part of Manila Bay but is definitely solid land which registration and the corresponding certificate of title.
cannot be reached by water even in the highest of tides’. This Berania-Cervantes
report based on ocular inspections literally overturned the findings and Based on the decision in the LRC Case No. N-8239 involving the petition for registration
recommendations of Land Director Narciso V. Villapando dated November 15, 1973, and confirmation of title filed by Fermina Castro, there is no showing that fraud attended the
and that of Director Ernesto C. Mendiola dated December 1, 1977, and the fact that issuance of OCT No. 10215. it appears that the evidence presented by Fermina Castro was
the Villapando-Mendiola reports were merely based on projections in the cadastral sufficient for the trial court to grant her petition.
map or table surveys.
The testimony of Fermina Castro, which was corroborated by Emiliano de Leon, that she
xxxx and her predecessors-in-interest had been in possession of the land for more than thirty
A. The Legal prognosis of the case is not promising in favor of PEA. (30) years sufficiently established her vested right over the property initially covered by
4.1 LRC Case No. N-8239 has already become final and executory and OCT No. 10215 OCT No. 10215. The report dated April 25, 1974 which was submitted to the trial court by
was already issued in favor of Fermina Castro. Any and all attempts to question its validity the Director of Lands through Special Attorney Saturnino Pacubas showed that the parcel
can only be entertained in a quo warranto proceedings (sic), assuming that there are legal of land was solid and dry land when Fermina Castro’s application for registration of title
grounds (not factual grounds) to support its nullification. Subjecting it to a collateral attack is was filed. It was based on the ocular inspection conducted by Land Inspector Adelino
not allowed under the Torrens Title System. In Calalang vs. Register of Deeds of Quezon Gorospe and the joint circular inspection conducted by Geodetic Engineer Manuel A.
City, 208 SCRA 215, the Supreme Court held that the present petition is not the proper Cervantes and Administrative Assistant Lazaro Berania on November 28, 1973 and March
remedy in challenging the validity of certificates of titles since the judicial action required is 22, 1974 respectively.
a direct and not a collateral attack (refer also to: Toyota Motor Philippine Corporation vs.
CA, 216 SCRA 236). The aforesaid report must be requested unless there is a concrete proof that there was an
irregularity in the issuance thereof. In the absence of evidence to the contrary, the ocular
4.2 OCT No. 10215 in favor of Fermina Castro was issued pursuant to a cadastral inspection of the parcel of land, which was made the basis of said report, is presumed to be
proceeding, hence is a rem proceedings which is translated as a constructive notice to the in order.
whole world, as held in Adez Realty Incorporated vs. CA, 212 SCRA 623.
Based on the available records, there appears to be no sufficient basis for the
4.3 From the cursory and intent reading of the decision of Judge Sison in LRC Case No. N- Government to institute an action for the annulment of OCT No. 10215 and its
8239, we cannot find any iota of fraud having been committed by the court and the parties. derivative titles. It is opined that a petition for cancellation/annulment of Decree No.
In fact, due process was observed when the Office of the Solicitor General represented N-150912 and OCT No. 10215 and all its derivative titles will not prosper unless there
ably the Bureau of Lands. In Balangcad vs. Justices of the Court of Appeals, 206 SCRA is convincing evidence to negate the report of the then Land Management Bureau
169, the Supreme Court held that title to registered property becomes indefeasible after through Special Attorney Pacubas. Should the Government pursue the filing of such
one-year from date of registration except where there is actual fraud in which case it may an action, the possibility of winning the case is remote.[49]
be challenged in a direct proceeding within that period. This is also the ruling in Bishop vs. More so, respondent Government, through its counsel, admits that the land applied by
CA, 208 SCRA 636, that to sustain an action for annulment of a torrens certificate for being Fermina Castro in 1973 was solid and dry land, negating the nebulous allegation that said
void ab initio, it must be shown that the registration court had not acquired jurisdiction over land is underwater. The only conclusion that can be derived from the admissions of the
the case and there was actual fraud in securing the title. Solicitor General and Government Corporate Counsel is that the land subject of the titles of
petitioners is alienable land beyond the reach of the reversion suit of the state.
4.4 As to priority of torrens title, PEA has no defense, assuming that both PEA and Yujuico
titles are valid, as held in Metropolitan Waterworks and Sewerage System vs. CA, 215 Notably, the land in question has been the subject of a compromise agreement upheld by
SCRA 783, where two (2) certificates purport to include the same land, the earlier in date this Court in Public Estates Authority.[50] In that compromise agreement, among other
prevails. provisions, it was held that the property covered by TCT Nos. 446386 and S-29361, the
land subject of the instant case, would be exchanged for PEA property. The fact that PEA
4.5 The documents so far submitted by the parties to the court indicate that the signed the May 15, 1998 Compromise Agreement is already a clear admission that it
mother title of the Yujuico land when registered in 1974 was not underwater. This recognized petitioners as true and legal owners of the land subject of this controversy.
was shown in the two (2) ocular inspections conducted by the officials of the Land
Bureau. Moreover, PEA has waived its right to contest the legality and validity of Castro’s title.
Such waiver is clearly within the powers of PEA since it was created by PD 1084 as a body
4.6 The provision of P.D. 239 that no decree of registration may be issued by the court corporate “which shall have the attribute of perpetual succession and possessed of the
unless upon approval and recommendation of the Bureau of Lands was substantially powers of the corporations, to be exercised in conformity with the provisions of this Charter
complied with in the Report of Lands Special Attorney Saturnino Pacubas, submitted to the [PD 1084].”[51] It has the power “to enter into, make, perform and carry out contracts
court.[48] of every class and description, including loan agreements, mortgages and other types of
Even the counsel of respondent Republic, the OSG, arrived at the conclusion that there is security arrangements, necessary or incidental to the realization of its purposes with any
no sufficient legal basis for said respondent to institute action to annul the titles of person, firm or corporation, private or public, and with any foreign government or
petitioners, thus: entity.”[52] It also has the power to sue and be sued in its corporate name.[53] Thus, the
Compromise Agreement and the Deed of Exchange of Real Property signed by PEA with
the petitioners are legal, valid and binding on PEA. In the Compromise Agreement, it is
provided that it “settles in full all the claims/counterclaims of the parties against each ELAND PHILIPPINES, INC., G.R. No. 173289
other.”[54] The waiver by PEA of its right to question petitioners’ title is fortified by the
manifestation by PEA in the Joint Motion for Judgment based on Compromise Agreement
that Petitioner,

4. The parties herein hereto waive and abandon any and all other claims and
counterclaims which they may have against each other arising from this case or
related thereto.[55] Present:

Thus, there was a valid waiver of the right of respondent Republic through PEA to
challenge petitioners’ titles.
-versus-
The recognition of petitioners’ legal ownership of the land is further bolstered by the
categorical and unequivocal acknowledgment made by PEA in its September 30, 2003
letter where it stated that: “Your ownership thereof was acknowledged by PEA when it CARPIO,* J.,
did not object to your membership in the CBP-IA Association, in which an owner of a piece
of land in CBP-IA automatically becomes a member thereof.”[56] Section 26, Rule 130
CORONA, J., Chairperson,
provides that “the act, declaration or omission of a party as to a relevant fact may be
given in evidence against him.” The admissions of PEA which is the real party-in-interest
in this case on the nature of the land of Fermina Castro are valid and binding on NACHURA,
respondent Republic. Respondent’s claim that the disputed land is underwater falls flat
in the face of the admissions of PEA against its interests. Hence, res judicata now
AZUCENA GARCIA, ELINO FAJARDO, PERALTA, and
effectively precludes the relitigation of the issue of registrability of petitioners’ lot.
and HEIR OF TIBURCIO MALABANAN
named TERESA MALABANAN,
In sum, the Court finds that the reversion case should be dismissed for lack of jurisdiction MENDOZA, JJ.
on the part of the Parañaque RTC. Even if we treat said case as a petition for annulment
of judgment under Rule 47 of the 1997 Rules of Civil Procedure, the dismissal of the case Respondents.
nevertheless has to be upheld because it is already barred by laches. Even if laches is
disregarded, still the suit is already precluded by res judicata in view of the peculiar facts
and circumstances obtaining therein.

WHEREFORE, premises considered, the petition is GRANTED. The Decision of the Court
of Appeals in CA-G.R. CV No. 76212 is REVERSED and SET ASIDE, and the August 7, Promulgated:
2002 Order of the Parañaque City RTC, Branch 257 in Civil Case No. 01-0222 entitled
Republic of the Philippines v. Fermina Castro, et al. dismissing the complaint is
AFFIRMED. February 17, 2010

No costs. x-----------------------------------------------------------------------------------------x

SO ORDERED.

DECISION
PERALTA, J.: misrepresentation amounting to actual or extrinsic fraud. Thus, they argued that they were
also entitled to a writ of preliminary injunction in order to restrain or enjoin petitioner, its
privies, agents, representatives, and all other persons acting on its behalf, to refrain from
committing acts of dispossession on the subject lot.

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
seeking to reverse and set aside the decision dated February 28, 2006 of the Court of
Appeals (CA) in CA-G.R. CV No. 67417, which dismissed the appeal of petitioner Eland Summons, together with a copy of the complaint, were served on the petitioner
Philippines, Inc. and affirmed the Resolutions dated November 3, 1999 and June 28, 2006 on April 7, 1998. On April 29, 1998, petitioner filed an Entry of Appearance with Motion for
of Branch 18, Regional Trial Court (RTC) of Tagaytay City. Extension of Time, which the trial court granted for a period of ten (10) days within which to
file a responsive pleading. Petitioner filed a Second Motion for Extension of Time to File
The facts of the case, as shown in the records, are the following: Answer dated April 29, 1998, which the trial court likewise granted.

Respondents Azucena Garcia, Elino Fajardo, and Teresa Malabanan, the heir of Thereafter, petitioner filed a Motion to Dismiss dated May 9, 1998, stating that
Tiburcio Malabanan, filed a Complaint dated March 2, 1998 for Quieting of Title with Writ of the pleading asserting the claim of respondents stated no cause of action, and that the
Preliminary Injunction with the RTC, Branch XVIII, Tagaytay City against petitioner Eland latter were not entitled to the issuance of a writ of preliminary injunction, setting the same
Philippines, Inc. Respondents claimed that they are the owners, in fee simple title, of a for hearing on May 21, 1998. On the date of the hearing, the trial court issued an Order,
parcel of land identified as Lot 9250 Cad-355, Tagaytay Cadastre, Plan Ap-04-008367, which granted the respondents ten (10) days from that day to file a comment, and set the
situated in Barangay Iruhin, Tagaytay City, containing an area of Two Hundred Forty-Four date of the hearing on July 23, 1998. Respondents filed a Motion to Admit
Thousand One Hundred Twelve (244,112) square meters, by occupation and possession Comment/Opposition to Defendant Eland, together with the corresponding
under the provisions of Sec. 48 (b) of the Public Land Law or Commonwealth Act No. 141, Comment/Opposition dated June 8, 1998.
as amended.

On the scheduled hearing of September 23, 1998, the trial court issued an Order,
For having been in continuous, public, and adverse possession as owners of the considering the Motion to Dismiss submitted for resolution due to the non-appearance of
said lot for at least thirty years, respondents stated that they were not aware of any person the parties and their respective counsels. The said motion was eventually denied by the
or entity who had a legal or equitable interest or claim on the same lot until the time they trial court in an Order dated September 25, 1998, ruling that the allegations in the complaint
were requesting that the lot be declared for tax purposes. They found out that the lot was established a cause of action and enjoined petitioner Eland to file its answer to the
the subject of a land registration proceeding that had already been decided by the same complaint within ten (10) days from receipt of the same. Petitioner then filed two Motions
court where their complaint was filed. They also found out that Decree No. N-217313, LRC for Extension to File an Answer.
Record No. N-62686, was already issued on August 20, 1997 to the petitioner pursuant to
the Decision dated June 7, 1994 of the same court. They averred that they were not
notified of the said land registration case; thus, they claimed the presence of
Petitioner, on November 9, 1998, filed a Motion for Reconsideration of the trial On January 28, 1999, respondents presented their evidence before the Clerk of
court's Order dated September 25, 1998, denying the former's Motion to Dismiss. Again, Court of the trial court which ended on February 3, 1999; and, on February 10, 1999,
petitioner filed a Motion for Final Extension of Time to File Answer dated November 6, respondents filed their Formal Offer of Evidence. However, petitioner filed an Urgent
1998. Respondents filed their Comment/Opposition to Motion for Reconsideration dated Motion to Suspend Plaintiff's Ex Parte Presentation of Evidence dated February 8, 1999. In
November 24, 1998. Subsequently, the trial court denied petitioner's motion for that regard, the trial court issued an Order dated February 11, 1999 directing the Clerk of
reconsideration in an Order dated January 11, 1999. Court to suspend the proceedings.

Meanwhile, respondents filed a Motion to Declare Defendant Eland in Default On May 14, 1999, respondents filed a Motion for Clarification as to whether or
dated November 17, 1998. On December 4, 1998 Petitioner Eland filed its Comment (on not the evidence presented ex parte was nullified by the admission of petitioner's Answer
Plaintiff's Motion to Declare Defendant Eland in Default) dated December 2, 1998, while Ad Cautelam. Petitioner filed its Comment dated May 13, 1999 on the said motion for
respondents filed a Reply to Comment (on Plaintiff's Motion to Declare Defendant Eland in clarification.
Default) dated December 29, 1998. Thereafter, the trial court issued an Order dated
January 11, 1999 declaring the petitioner in default and allowed the respondents to present
evidence ex parte. Petitioner filed a Motion for Reconsideration (of the Order dated 11
January 1999) dated February 5, 1999 on the trial court's denial of its motion to dismiss
and in declaring it in default. The trial court in an Order dated March 18, 1999, denied the
former and granted the latter. In the same Order, the trial court admitted petitioner's A pre-trial conference was scheduled on May 27, 1999, wherein the parties
Answer Ad Cautelam. submitted their pre-trial briefs. However, petitioner filed a Motion to Suspend Proceedings
dated May 24, 1999 on the ground that the same petitioner had filed a petition for certiorari
with the CA, asking for the nullification of the Order dated March 18, 1999 of the trial court
and for the affirmation of its earlier Order denying petitioner's Motion to Dismiss. The
Earlier, petitioner filed its Answer Ad Cautelam (With Compulsory Counterclaim) petition for certiorari was subsequently denied; and a copy of the Resolution dated June 14,
dated November 12, 1998. Respondents countered by filing a Motion to Expunge Eland's 1999 was received by the trial court. Hence, in an Order dated July 7, 1999, the trial court
Answer from the Records dated December 2, 1998. Petitioner filed its Opposition (to ruled that the reception of evidence already presented by the respondents before the Clerk
Plaintiff's Motion to Expunge Eland's Answer from the Records) dated December 21, 1998, of Court remained as part of the records of the case, and that the petitioner had the right to
as well as a Comment (on Plaintiff's Motion to Expunge Eland's Answer from the Records) cross-examine the witness and to comment on the documentary exhibits already
dated January 26, 1999. presented. Consequently, petitioner filed a Motion for Reconsideration dated July 19,
1999, but it was denied by the trial court in an Omnibus Order dated September 14, 1999.

Consequently, respondents filed a Motion to Set Presentation of Evidence Ex


Parte dated January 18, 1999, which was granted in an Order dated January 22, 1999. Eventually, respondents filed a Motion for Summary Judgment dated August 5,
1999, while petitioner filed its Opposition to the Motion dated August 31, 1999. In its
Resolution dated November 3, 1999, the trial court found favor on the respondents. The
dispositive portion of the Resolution reads:
5.1 THE COURT OF APPEALS ACTED IN A MANNER NOT
IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS
OF THIS HONORABLE COURT WHEN IT RULED THAT
RESPONDENTS' MOTION FOR SUMMARY JUDGMENT DATED
AUGUST 05, 1999 DID NOT VIOLATE THE TEN (10)-DAY NOTICE
WHEREFORE, premises considered, the motion for
RULE UNDER SECTION 3, RULE 35 OF THE 1997 RULES OF CIVIL
summary judgment is hereby GRANTED and it is hereby adjudged
PROCEDURE.
that:
5.2 THE COURT OF APPEALS ACTED IN A MANNER NOT
1. Plaintiffs are the absolute owners and rightful possessors
IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS
of Lot 9250, CAD-355, Tagaytay Cadastre, subject to the rights of
OF THIS HONORABLE COURT WHEN IT RULED THAT A MOTION
occupancy of the farm workers on the one-third area thereof;
FOR SUMMARY JUDGMENT IS PROPER IN AN ACTION FOR
QUIETING OF TITLE.

5.3 THE COURT OF APPEALS ACTED IN A MANNER NOT


2. The Judgment dated June 7, 1994 in Land Registration
IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS
Case No. TG-423 is set aside and the Decree No. N-217313, LRC
OF THIS HONORABLE COURT WHEN IT RULED THAT THERE ARE
Record No. N-62686 dated August 20, 1997 is null and void;
NO GENUINE FACTUAL AND TRIABLE ISSUES IN CIVIL CASE NO.
TG-1784.
3. The Original Transfer Certificate of Title is ordered to be
canceled, as well as tax declaration covering Lot 9250, Cad-355.
5.4 THE COURT OF APPEALS ACTED IN A MANNER NOT
IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS
SO ORDERED.
OF THIS HONORABLE COURT WHEN IT UPHELD THE
RESOLUTION DATED NOVEMBER 03, 1999 OF THE COURT A
QUO, BASED ON TESTIMONIES OF RESPONDENTS' WITNESSES
TAKEN WITHOUT GRANTING HEREIN PETITIONER THE RIGHT TO
Petitioner appealed the Resolution of the trial court with the CA, which dismissed CROSS-EXAMINE AND UPON DOCUMENTARY EXHIBITS
PRESENTED BUT NOT ADMITTED AS EVIDENCE.
it in a Decision dated February 28, 2006, which reads:
5.5 THE COURT OF APPEALS ACTED IN A MANNER NOT
IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS
OF THIS HONORABLE COURT WHEN IT UPHELD THE
RESOLUTION DATED NOVEMBER 03, 1999 OF THE COURT A
QUO BASED ON FALSIFIED “EVIDENCE.”
WHEREFORE, for lack of merit, the appeal is DISMISSED.
The assailed Resolution dated November 3, 1999, of the RTC, Branch 5.6 THE COURT OF APPEALS ACTED IN A MANNER NOT
18, Tagaytay City, in Civil Case No. TG-1784, is AFFIRMED. No IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS
pronouncement as to cost. OF THIS HONORABLE COURT WHEN IT FAILED TO RULE THAT
THE COURT A QUO PATENTLY DEPRIVED PETITIONER OF ITS
SO ORDERED. RIGHT TO DUE PROCESS IN RENDERING ITS SUMMARY
JUDGMENT.

5.7 THE COURT OF APPEALS ACTED IN A MANNER NOT


Hence, the present petition. IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS
OF THIS HONORABLE COURT WHEN IT HELD THAT THE COURT
A QUO HAS JURISDICTION TO CANCEL PETITIONER'S ORIGINAL
CERTIFICATE OF TITLE (OCT) NO. 0-660 IN AN ACTION TO QUIET
TITLE.

The grounds relied upon by the petitioner are the following:


According to the petitioner, a motion for summary judgment must be served at
least ten (10) days before the date set for hearing thereof, and that a hearing must be held
to hear the parties on the propriety of a summary judgment, per Sec. 3 of Rule 35 of the Respondents, in their Comment dated October 16, 2006, countered the first
Revised Rules of Court, which was not observed because the petitioner received a copy of issue raised by the petitioner, stating that their filing of the motion for summary judgment
the respondents' motion for summary judgment only on August 20, 1999, or the very same fourteen (14) days before the requested hearing of the same motion was in compliance
day that the motion was set for hearing. Petitioner further claims that the trial court never with Sec. 3, Rule 35 of the Rules of Court.
conducted any hearing on the motion for summary judgment.

As to the second and third issues, respondents argued that petitioner had a
Petitioner also argued that a summary judgment is only available to a claimant constricted perception of the coverage of the Rules of Summary Judgment, and that the
seeking to recover upon a claim, counterclaim or cross-claim or to obtain a declaratory latter's citation of cases decided by this Court showed the diverse causes of action that
relief, and does not include cases for quieting of title. Furthermore, petitioner also averred could be the subject matters of summary judgment. Respondents also posited that
that a summary judgment has no place in a case where genuine factual and triable issues petitioner's statements in its Answer Ad Cautelam, although denominated as Specific
exist, like in the present case. It added that the genuine and triable issues were all raised Denial, were really general denials that did not comply with the provisions of Section 10,
in its Answer Ad Cautelam. Rule 8 of the Rules of Court.

Another ground relied upon by petitioner is its failure to cross-examine the Anent the fourth and fifth issues, respondents claimed that despite the
witnesses for the respondents without fault on its part. It also stated that the trial court did opportunity, or the right allowed in the Order dated July 17, 1999 of the trial court, for the
not issue any order admitting in evidence the documentary exhibits presented by the petitioner to cross-examine respondents' witnesses and to comment on the documentary
respondents. Hence, according to the petitioner, the trial court gravely erred in relying evidence presented ex parte after the default order against the same petitioner, the latter
upon the testimonies of the witnesses for the respondents, without having the latter cross- evasively moved to set aside respondents' evidence in order to suspend further
examined; and upon the documentary exhibits presented but not admitted as evidence. proceedings that were intended to abort the pre-trial conference. They added that
petitioner neglected to avail itself of, or to comply with, the prescription of the rules found in
Rule 35 of the Rules of Court by opting not to avail itself of the hearing of its opposition to
the summary judgment after receiving the Order dated August 20, 1999; by failing to serve
Petitioner further claimed that the trial court based its Resolution dated opposing affidavit, deposition or admission in the records; and by not objecting to the
November 3, 1999 on falsified evidence. decretal portion of the said Order dated August 20, 1999, which stated that the motion for
summary judgment has been submitted for resolution without further argument. With
regard to the contention of the petitioner that the trial court wrongly appreciated falsified
evidence, respondents asserted that petitioner's counsel failed to study carefully the
Lastly, petitioner raised the issue that by rendering summary judgment, the trial records of the proceedings for the presentation of the evidence ex parte to be able to know
court deprived the former of its right to due process. that it was not only a single-day proceeding, and that more than one witness had been
presented. They further averred that the trial court did not only rely on the photographs of
the houses of the occupants of the property in question.

In the present case, it was the respondents who moved for a summary judgment.

Finally, as to the sixth and seventh issues, respondents asseverated that their
complaint alleged joint causes of action for quieting of title under Art. 476 of the New Civil
Petitioner contended that the ten-day notice rule was violated, because the copy
Code and for the review of the decree of registration pursuant to Sec. 32 of the Property
of the motion for summary judgment was served only on August 20, 1999 or on the same
Registration Decree or P.D. No. 1529, because they are complimentary with each other.
day it was set for hearing. It also added that even if the petitioner received a copy of the
motion only on August 20, 1999, there was no hearing conducted on that date because the
trial court issued an order giving petitioner 10 days within which to file its comment or
opposition.
The petition is impressed with merit.

The above specific contention, however, is misguided. The CA was correct in its
The basic contention that must be resolved by this Court is the propriety of the
observation that there was substantial compliance with due process. The CA ruled, as the
summary judgment in this particular case of quieting of title.
records show, that the ten-day notice rule was substantially complied with because when
the respondents filed the motion for summary judgment on August 9, 1999, they furnished
petitioner with a copy thereof on the same day as shown in the registry receipt and that the
motion was set for hearing on August 20, 1999, or 10 days from the date of the filing
thereof.

Rule 35 of the 1997 Rules of Civil Procedure provides:

SEC. 1. Summary judgment for claimant. - A party seeking


to recover upon a claim, counterclaim, or cross-claim or to obtain a Due process, a constitutional precept, does not, therefore, always and in all
declaratory relief may, at any time after the pleading in answer thereto situations a trial-type proceeding. The essence of due process is found in the reasonable
has been served, move with supporting affidavits for a summary
judgment in his favor upon all or any part thereof opportunity to be heard and submit one's evidence in support of his defense. What the law
prohibits is not merely the absence of previous notice, but the absence thereof and the lack
SEC. 3. Motion and proceedings thereon. - The motion shall
be served at least ten (10) days before the time specified for the of opportunity to be heard.
hearing. The adverse party prior to the day of hearing may serve
opposing affidavits. After the hearing, the judgment sought shall be
rendered forthwith if the pleading, depositions, and admissions on file
together with the affidavits, show that, except as to the amount of
damages, there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.
Petitioner further argues that summary judgment is not proper in an action for subject parcel of land Lot 9250 was proven by the approved plan Ap-
04-008367 that was already presented and offered in evidence as
quieting of title. This particular argument, however, is misplaced. This Court has already
Exhibit “B” for the plaintiffs.
ruled that any action can be the subject of a summary judgment with the sole exception of
The second defense that plaintiffs' claim of the property is
actions for annulment of marriage or declaration of its nullity or for legal separation.
barred by prior judgment rule is unavailing considering that the vital
documentary evidence they presented in Land Registration Case No.
TG-423 before this Honorable Court the markings and descriptions of
such documents are stated in the Judgment quoted as follows:

(1) Tax Declaration No. 015224-A (Exhibit “Q”; x x


Proceeding to the main issue, this Court finds that the grant of summary
x.
judgment was not proper. A summary judgment is permitted only if there is no genuine (2) Tax Declaration No. 05019-B (Exhibit “R”; x x x.
(3) Tax Declaration No. 01926-B (Exhibit “S”; x x x.
issue as to any material fact and a moving party is entitled to a judgment as a matter of law.
(4) Tax Declaration No. GR-007-0007 (Exhibit “T” x
A summary judgment is proper if, while the pleadings on their face appear to raise issues, x x.
the affidavits, depositions, and admissions presented by the moving party show that such
are the very documentary evidence adopted and relied upon by the
issues are not genuine. plaintiffs in seeking the review and nullity of the Decree No. 217313
issued on August 20, 1997 under LRC Record No. N-62686 pursuant
to the Judgment dated June 7, 1994 rendered by this Honorable Court
penned by the acting presiding Judge Eleuterio F. Guerrero in said
Land Registration Case No. TG-423.

It must be remembered that the non-existence of a genuine issue is the On the other hand, as to the gravamen of the claims in the
complaint, the plaintiffs have presented clear and convincing evidence
determining factor in granting a motion for summary judgment, and the movant has the as the well-nigh or almost incontrovertible evidence of a registerable
burden of proving such nonexistence. The trial court found no genuine issue as to any title to the subject land in the proceedings conducted on the reception
of evidence ex-parte for the plaintiffs establishing in detail the
material fact that would necessitate conducting a full-blown trial. However, a careful study specifications of continuous, open, exclusive possession as aspects of
of the case shows otherwise. acquisitive prescription as confirmed in the affidavit herein attached as
Annex “A”;

In ruling that there was indeed no genuine issue involved, the trial court merely
In their motion for summary judgment, the respondents failed to clearly
stated that:
demonstrate the absence of any genuine issue of fact. They merely reiterated their
averments in the complaint for quieting of title and opposed some issues raised by the
petitioner in its Answer Ad Cautelam, to wit:

This Court, going by the records, observed keenly that


plaintiffs’ cause of action for quieting of title on the disputed parcel of
land is based on the alleged fraud in the substitution of their
landholdings of Lot 9250, Cad 355, Tagaytay Cadastre containing only
Nonetheless, going by the records of the admitted and an area of 244,112 square meters with Lot 9121, Cad 335, Tagaytay
uncontroverted facts and facts established there is no more litigious or Cadastre, containing only an area of 19,356 square meters. While
genuine issue of basic fact to be the subject of further trial on the defendant Eland in its answer practically and mainly interposed the
merits. defenses of: (a) the parcel of land being claimed by the plaintiffs is not
the parcel of land subject matter of Land Registration Case No. TG-
The first defense as to the identity of the subject property, 423; (b) the claim of the plaintiffs is barred by prior judgment of this
the issue has already become nil because of not only the lack of Court in said Land Registration Case; and (c) plaintiffs' complaint is
seriousness in the allegations but also because the identity of the
barred by the Statute of Limitation since Original Certificate of Title No. face the pleadings appear to raise issues, but when the affidavits,
0-660 has become incontrovertible. depositions and admissions show that such issues are not genuine,
then summary judgment as prescribed by the rules must ensue as a
Cross-reference of the above-cited Land Registration Case matter of law.
No. TG-423 that was decided previously by this Court with the case at
bench was imperatively made by this Court. Being minded that the It should be stressed that the court a quo which rendered the
Court has and can take judicial notice of the said land registration case, assailed resolution in Civil Case No. TG-1784 was the very court that
this Court observed that there is no genuine issue of fact to be tried on decided the LRC Case No. TG-423. Such being the case, the court a
the merits. Firstly, because the supposed identity crisis of the quo was privy to all relevant facts and rulings pertaining to LRC Case
controverted parcel of land covered by the Land Registration Case No. No. TG-423 which it considered and applied to this case. Thus, where
TG-423 with the subject parcel of land is established by Plan Ap-04- all the facts are within the judicial knowledge of the court, summary
006275 (Exhibit “N”) LRC Case No. 423 and by Plan A04 008367 judgment may be granted as a matter of right.
(Exhibit “B” of the plaintiffs) and the Technical Description of Lot 9250,
Cad 355 (Exhibit “B-1” of the plaintiffs). Secondly, the prior judgment
rule cannot be availed of by defendant Eland since not only intrinsic
fraud but extrinsic fraud were alleged in and established by the
On the contrary, in petitioner's Answer Ad Cautelam, genuine, factual and triable
records. (Heirs of Manuel Roxas v. Court of Appeals, G. R. No.
1184436, pro. March 21, 1997). Thirdly, it is incontrovertible that the issues were raised, aside from specifically denying all the allegations in the complaint,
complaint in this case seeking to review the judgment and annul the
thus:
decree was filed on March 5, 1998 or within one (1) year from August
20, 1997 or the date of issuance of Decree No. 217313, LRC Record
No. N-62686, hence, the Original Certificate of Title No. 0-660 issued
to defendant Eland has not attained incontrovertibility. (Heirs of Manuel
Roxas v. Court of Appeals, G.R. No. 118436, prom. March 21, 1997).
2. SPECIFIC DENIALS
Notwithstanding, the issue of possession is a question of
fact by the interaction of the basic pleadings, the observation of this
2.1 Answering defendant specifically denies the allegations
Court is that the plaintiffs were able to prove by the well-nigh
contained in paragraphs 1 and 3 of the Complaint insofar as it alleges
incontrovertible evidence, the aspects of possession in accordance
the personal circumstances of the plaintiff and one A. F. Development
with Section 48 (b) of Commonwealth Act 141, as amended, as
Corporation for lack of knowledge or information sufficient to form a
hereinafter illustrated.
belief as to the truth thereof.

2.2 Answering defendant specifically denies the allegations


contained in paragraphs 4, 5, 6 and 7 of the Complaint for lack of
The CA, in affirming the above Resolution of the trial court, propounded thus: knowledge or information sufficient to form a belief as to the truth of
said allegations. And if the property referred to in said paragraphs is
that parcel of land which was the subject matter of Land Registration
Case No. TG-423 which was previously decided by this Honorable
Court with finality, said allegations are likewise specifically denied for
the obvious reason that the said property had already been adjudged
The contention of defendant-appellant is untenable.
with finality by no less than this Honorable Court as absolutely owned
Summary judgment is not only limited to solving actions involving
by herein answering defendant as will be further discussed hereunder.
money claims. Under Rule 35 of the 1997 Rules of Court, except as to
the amount of damages, when there is no genuine issue as to any
2.3 Answering defendant specifically denies the allegations
material fact and the moving party is entitled to a judgment as a matter
contained in paragraph 8 of the Complaint insofar as it alleged that
of law, summary judgment may be allowed. The term “genuine issue”
“(u)pon exercise of further circumspection, counsel for the plaintiffs
has been defined as an issue of fact which calls for the presentation of
once followed-up in writing the 1994 request of the plaintiffs to have
evidence as distinguished from an issue which is sham, fictitious,
the subject parcel of land be declared for taxation purposes” and
contrived, set up in bad faith and patently unsubstantial so as not to
insofar as it is made to appear that parcel of land being claimed by the
constitute a genuine issue for trial.
plaintiffs is the same parcel of land subject matter of Land Registration
Case No. TG-423 for lack of knowledge or information sufficient to
Thus, under the aforecited rule, summary judgment is
form a belief as to the truth thereof and for the reason that the names
appropriate when there are no genuine issues of fact, which call for the
of the herein plaintiffs were never mentioned during the entire
presentation of evidence in a full-blown trial. Thus, even if on their
proceedings in said land registration case and by reason of the
Affirmative Allegations contained hereunder.
Special and affirmative defenses were also raised in the same Answer Ad
2.4 Answering defendant specifically denies the allegations
contained in paragraphs 9, 10, 10 (a), 10 (b), 10 (c), 10 (d), 10 (e), 10 Cautelam, to wit:
(f), 10 (g), 10 (h), and 11 for the reason that there is no showing that
the parcel of land being claimed by the plaintiff is the same parcel of
land which was the subject matter of Land Registration Case No. TG- xxxx
423, and in the remote possibility that the parcel of land being claimed
by the plaintiffs is the same as that parcel of land subject of Land
Registration Case No. TG-423, the allegations contained in said
paragraphs are still specifically denied for the reason that no less than
the Honorable Court had decided with finality that the parcel of land is 4.1 The pleading asserting the claim of the plaintiff states no
absolutely owned by herein defendant to the exclusion of all other cause of action as asserted in the Motion To Dismiss filed by herein
persons as attested to by the subsequent issuance of an Original answering defendant and for the reason that there is no evidence
Certificate of Title in favor of answering defendant and for reasons whatsoever showing or attesting to the fact that the parcel of land
stated in the Affirmative Allegations. being claimed by the plaintiffs in the Complaint is the same parcel of
land which was the subject matter of Land Registration Case No. TG-
2.5 Answering defendant specifically denies the allegations 423.
contained in paragraph 12 of the Complaint for the obvious reason that
it was the plaintiffs who appear to have been sleeping on their rights 4.2 The complaint was barred by the prior judgment
considering that up to the present they still do not have any certificate rendered by this Honorable in Land Registration Case No. TG-423.
of title covering the parcel of land they are claiming in the instant case,
while on the part of herein defendant, no less than the Honorable 4.3 The complaint is barred by the Statute of Limitation in
Court had adjudged with finality that the parcel of land subject matter that OCT No. 0-660 had become incontrovertible by virtue of the
of Land Registration Case No. TG-423 is absolutely owned by herein Torrens System of Registration; and to allow plaintiffs to question the
defendant. validity of answering defendant's title through the instant complaint
would be a collateral of OCT No. 0-660 which is not permissible under
2.6 Answering defendant specifically denies the allegations the law.
contained in paragraph 13 of the complaint for the reason that
defendant has never ladgrabbed any parcel of land belonging to 4.4 Plaintiffs are barred by their own acts and/or omission
others, much less from the plaintiffs, and further, answering defendant from filing the present complaint under the principles of estoppel and
specifically denies the allegations therein that plaintiffs engaged the laches.
services of a lawyer for a fee for lack of knowledge r information
sufficient to form a belief as to the truth thereof. 4.5 Plaintiffs does not to the Court with clean hands as they
appear to be well aware of the proceedings in said Land Registration
2.7 Answering defendant specifically denies the allegations Case No. TG- 423 and inspite of such knowledge, plaintiffs never
contained in paragraphs 14, 15, 16, 17 and 18 of the Complaint for bothered to present their alleged claims in the proceedings.
lack of knowledge or information sufficient to form a belief as the truth
thereof. 4.6 Answering defendant has always acted with justice,
given everyone his due, and observed honesty and good faith in his
2.8 Answering defendant specifically denies the allegations dealings.
contained in paragraphs IV (a) to IV (c) for the reason that, as above-
stated, if the parcel of land being claimed by the plaintiffs is the same
as that parcel of land subject matter of Land Registration Case No.
TG-423, this Honorable Court had already decided with finality that
said parcel of land is absolutely owned by herein answering defendant Clearly, the facts pleaded by the respondents in their motion for summary
and additionally, for those reasons stated in defendant's Motion to judgment have been duly disputed and contested by petitioner, raising genuine issues that
Dismiss.
must be resolved only after a full-blown trial. When the facts as pleaded by the parties are
2.9 Answering defendant specifically denies the allegations disputed or contested, proceedings for summary judgment cannot take the place of trial. In
contained in paragraph IV (d) of the Complaint for lack of knowledge or
information sufficient to form a belief as to the truth thereof. the present case, the petitioner was able to point out the genuine issues. A “genuine issue”
is an issue of fact that requires the presentation of evidence as distinguished from a sham,
WHEREFORE, this Court hereby approves the instant
fictitious, contrived or false claim.
petition for land registration and, thus, places under the operation of
Act 141, Act 496 and/or P.D. 1529, otherwise known as the Property
Registration Law, the land described in Plan Ap-04-006275 and
containing an area of Two Hundred Forty-Two Thousand Seven
Hundred Ninety-Four (242,794) square meters, as supported by its
technical description now forming part of the record of this case, in
It is of utmost importance to remember that petitioner is already the registered
addition to other proofs adduced in the name of the applicant, ELAND
owner (Original Certificate of Title [OCT] No. 0-660 issued by the Register of Deeds) of the PHILIPPINES, INC., with principal office at No. 43 E. Rodriguez Ave.
(España Extension), Quezon City, Metro Manila.
parcel of land in question, pursuant to a decree of registration (Decree No. N-217313, LRC
Record No. 62686) based on the ruling of the same court that granted the summary Once this decision becomes final and executory, the
corresponding decree of registration shall forthwith issue.
judgment for the quieting of title.
SO ORDERED.

Incidentally, the findings of the trial court contained in the disputed summary By granting the summary judgment, the trial court has in effect annulled its former
judgment were obtained through judicial notice of the facts and rulings pertaining to that ruling based on a claim of possession and ownership of the same land for more than thirty
earlier case (LRC Case No. TG-423) wherein the same trial court ruled in favor of the years without the benefit of a full-blown trial. The fact that the respondents seek to nullify
petitioner. It is, therefore, disorienting that the same trial court reversed its earlier ruling, the original certificate of title issued to the petitioner on the claim that the former were in
which categorically stated that: possession of the same land for a number of years, is already a clear indicium that a
genuine issue of a material fact exists. This, together with the failure of the respondents to
show that there were no genuine issues involved, should have been enough for the trial
court to give the motion for summary judgment, filed by respondents, scant consideration.
x x x There is overwhelming evidence or proof on record that Trial courts have limited authority to render summary judgments and may do so only when
the vendors listed in Exhibit “HH,” with submarkings, are the previous there is clearly no genuine issue as to any material fact.
owners of the parcel of land mentioned in the same deed of sale and
aside form the tax declarations covering the same property (Exhibits
“Q” to “T,” inclusive), the uncontroverted testimony of Atty. Ruben
Roxas establishes beyond any shadow of doubt that applicant's
(referring to herein defendant-appellant) sellers/predecessors-in-
interest are the grandchildren, great grandchildren and great great Based on the foregoing, this Court deems it necessary to delve briefly on the
grandchildren of the spouses Lucio Petate and Maria Pobleta Petate,
the former owners of the same property, whose ownership is further nature of the action of quieting of title as applied in this case. This Court's ruling in
bolstered by tax receipts showing payments of realty taxes (Exhibits Calacala, et al. v. Republic, et al. is instructive on this matter, thus:
“U” to “GG,” inclusive, with submarkings).

xxx

On the basis of the foregoing facts and circumstances, and


considering that applicant is a domestic corporation not otherwise To begin with, it bears emphasis that an action for quieting of
disqualified from owning real properties in the Philippines, this Court title is essentially a common law remedy grounded on equity. As we
finds that applicant has satisfied all the conditions/requirements held in Baricuatro, Jr. vs. CA:
essential to the grant of its application pursuant to the provisions of the
Land Registration Law, as amended, inspite of the opposition filed by Regarding the nature of the action filed
the Heirs of the late Doroteo Miranda. Hence, the grant of applicant's before the trial court, quieting of title is a common
petition appears to be inevitable. law remedy for the removal of any cloud upon or
doubt or uncertainty with respect to title to real It is essential for the plaintiff or
property. Originating in equity jurisprudence, its complainant to have a legal title or an equitable
purpose is to secure ‘x x x an adjudication that a title to or interest in the real property which is the
claim of title to or an interest in property, adverse subject matter of the action. Also, the deed, claim,
to that of the complainant, is invalid, so that the encumbrance or proceeding that is being alleged
complainant and those claiming under him may as a cloud on plaintiff’s title must be shown to be
be forever afterward free from any danger of in fact invalid or inoperative despite its prima facie
hostile claim.’ In an action for quieting of title, the appearance of validity or legal efficacy.
competent court is tasked to determine the
respective rights of the complainant and other Verily, for an action to quiet title to prosper, two (2)
claimants, ‘x x x not only to place things in their indispensable requisites must concur, namely: (1) the plaintiff or
proper place, to make the one who has no rights complainant has a legal or an equitable title to or interest in the
to said immovable respect and not disturb the real property subject of the action; and (2) the deed, claim,
other, but also for the benefit of both, so that he encumbrance, or proceeding claimed to be casting cloud on his
who has the right would see every cloud of doubt title must be shown to be in fact invalid or inoperative despite its
over the property dissipated, and he could prima facie appearance of validity or legal efficacy.
afterwards without fear introduce the
improvements he may desire, to use, and even to
abuse the property as he deems best xxx. Respondents, in their Complaint, claim that they have become the owners in fee-
simple title of the subject land by occupation and possession under the provisions of Sec.
Under Article 476 of the New Civil Code, the remedy may be
availed of only when, by reason of any instrument, record, claim, 48 (b) of the Public Land Law or Commonwealth Act No. 141, as amended. Thus, it
encumbrance or proceeding, which appears valid but is, in fact, invalid,
appears that the first requisite has been satisfied. Anent the second requisite, respondents
ineffective, voidable, or unenforceable, a cloud is thereby cast on the
complainant’s title to real property or any interest therein. The codal enumerated several facts that would tend to prove the invalidity of the claim of the
provision reads:
petitioner. All of these claims, which would correspond to the two requisites for the
Article 476. Whenever there is a cloud quieting of title, are factual; and, as discussed earlier, the petitioner interposed its
on title to real property or any interest therein, by
objections and duly disputed the said claims, thus, presenting genuine issues that can only
reason of any instrument, record, claim,
encumbrance or proceeding which is apparently be resolved through a full-blown trial.
valid or effective but is in truth and in fact invalid,
ineffective, voidable, or unenforceable, and may
be prejudicial to said title, an action may be Anent the propriety of the filing of an action for the quieting of title, the
brought to remove such cloud or to quiet the title.
indefeasibility and incontrovertibility of the decree of registration come into question.
An action may also be brought to prevent a cloud from being Under Sec. 32 of P.D. No. 1529 or the Property Registration Decree:
cast upon title to real property or any interest therein.

In turn, Article 477 of the same Code identifies the party who Section 32. Review of decree of registration; Innocent
may bring an action to quiet title, thus: purchaser for value. The decree of registration shall not be reopened
or revised by reason of absence, minority, or other disability of any
Article 477. The plaintiff must have legal person adversely affected thereby, nor by any proceeding in any court
or equitable title to, or interest in the real property for reversing judgments, subject, however, to the right of any person,
which is the subject-matter of the action. He need including the government and the branches thereof, deprived of land or
not be in possession of said property. of any estate or interest therein by such adjudication or confirmation of
title obtained by actual fraud, to file in the proper Court of First Instance
It can thus be seen that for an action for quieting of title to a petition for reopening and review of the decree of registration not
prosper, the plaintiff must first have a legal, or, at least, an equitable later than one year from and after the date of the entry of such decree
title on the real property subject of the action and that the alleged cloud of registration, but in no case shall such petition be entertained by the
on his title must be shown to be in fact invalid. So it is that in Robles, court where an innocent purchaser for value has acquired the land or
et al. vs. CA, we ruled: an interest therein, whose rights may be prejudiced. Whenever the
phrase "innocent purchaser for value" or an equivalent phrase occurs
in this Decree, it shall be deemed to include an innocent lessee, A mere claim of ownership is not sufficient to avoid a
mortgagee, or other encumbrancer for value. certificate of title obtained under the Torrens system. An important
feature of a certificate of title is its finality. The proceedings
Upon the expiration of said period of one year, the whereby such a title is obtained are directed against all persons,
decree of registration and the certificate of title issued shall known or unknown, whether actually served with notice or not, and
become incontrovertible. Any person aggrieved by such decree of includes all who have an interest in the land. If they do not appear and
registration in any case may pursue his remedy by action for damages oppose the registration of their own estate or interest in the property in
against the applicant or any other persons responsible for the fraud. the name of another, judgment is rendered against them by default,
and, in the absence of fraud, such judgment is conclusive. If an
interest in the land will not by itself operate to vacate a decree of
registration, a fortiori, fraud is not alone sufficient to do so.

As further pointed out in the same book, the petition for review must be filed
As borne out by the records and undisputed by the parties, OCT No. 0-660 of
within one year from entry of the decree of registration. As written:
petitioner was issued on August 29, 1997 pursuant to a Decree issued on August 20, 1997,
while the complaint for the quieting of title in Civil Case No. TG-1784 was filed and
docketed on March 5, 1998; hence, applying the above provisions, it would seem that the
period of one (1) year from the issuance of the decree of registration has not elapsed for
As long as a final decree has not been entered by the Land
the review thereof. However, a closer examination of the above provisions would clearly Registration Authority and period of one year has not elapsed from the
date of entry of such decree, the title is not finally adjudicated and the
indicate that the action filed, which was for quieting of title, was not the proper remedy.
decision in the registration case continues to be under the control and
sound discretion of the registration court. After the lapse of said
period, the decree becomes incontrovertible and no longer subject to
reopening or review.

Courts may reopen proceedings already closed by final decision or decree when an Section 32 provides that a petition for review of the
decree of registration may be filed “not later than one year from
application for review is filed by the party aggrieved within one year from the issuance of
and after the date of entry of such decree of registration.” Giving
the decree of registration. However, the basis of the aggrieved party must be anchored this provision a literal interpretation, it may at first blush seem that the
petition for review cannot be presented until the final decree has been
solely on actual fraud. Shedding light on the matter is a discussion presented in one of the
entered. However, it has been ruled that the petition may be filed at
recognized textbooks on property registration, citing decisions of this Court, thus: any time after the rendition of the court's decision and before the
expiration of one year from the entry of the final decree of
registration for, as noted in Rivera v. Moran, there can be no possible
The right of a person deprived of land or of any estate or reason requiring the complaining party to wait until the final decree is
interest therein by adjudication or confirmation of title obtained by entered before urging his claim for fraud.
actual fraud is recognized by law as a valid and legal basis for
reopening and revising a decree of registration. One of the remedies The one-year period stated in Sec. 32 within which a petition
available to him is a petition for review. To avail of a petition for to re-open and review the decree of registration refers to the decree of
review, the following requisites must be satisfied: registration described in Section 31, which decree is prepared and
issued by the Land Registration Administrator.
(a) The petitioner must have an estate or interest in the land;
The provision of Section 31 that every decree of registration
(b) He must show actual fraud in the procurement of the shall bind the land, quiet title thereto, and be conclusive upon and
decree of registration; against all persons, including the national government, and Sec. 32
that the decree shall not be reopened or revised by reason of absence,
(c) The petition must be filed within one year from the minority or other disability or by any proceeding in court, save only in
issuance of the decree by the Land Registration Authority; and cases of actual fraud and then only for one year from the entry of the
decree, must be understood as referring to final and unappealable
(d) The property has not yet passed to an innocent decrees of registration. A decision or, as it is sometimes called after
purchaser for value. entry, a decree of a registration court, does not become final and
unappealable until fifteen days after the interested parties have been
notified of its entry, and during that period may be set aside by the trial SO ORDERED.
judge on motion for new trial, upon any of the grounds stated in the
Rules of Court. An appeal from the decision of the trial court prevents
the judgment from becoming final until that decree is affirmed by the
judgment of the appellate court.

A petition for review under Section 32 is a remedy


separate and distinct from a motion for new trial and the right to
the remedy is not affected by the denial of such a motion
irrespective of the grounds upon which it may have been
presented. Thus, where petitioners acquired their interest in the land
before any final decree had been entered, the litigation was therefore in
effect still pending and, in these circumstances, they can hardly be
considered innocent purchasers in good faith.

Where the petition for review of a decree of registration is


filed within the one-year period from entry of the decree, it is error for
the court to deny the petition without hearing the evidence in support of
the allegation of actual and extrinsic fraud upon which the petition is
predicated. The petitioner should be afforded an opportunity to prove
such allegation.

In the present case, the one-year period before the Torrens title becomes
indefeasible and incontrovertible has not yet expired; thus, a review of the decree of
registration would have been the appropriate remedy.

Based on the above disquisitions, the other issues raised by the petitioner are
necessarily rendered inconsequential.

WHEREFORE, the petition for review on certiorari of petitioner Eland


Philippines, Inc. is hereby GRANTED, and the decision dated February 28, 2006 of the
Court of Appeals (CA) in CA-G.R. CV No. 67417, which dismissed the appeal of petitioner
Eland Philippines, Inc. and affirmed the resolutions dated November 3, 1999 and June 28,
2006 of Branch 18, RTC of Tagaytay City, is hereby REVERSED and SET ASIDE.
Consequently, the resolutions dated November 3, 1999 and June 28, 2006 of Branch 18,
RTC of Tagaytay City in Civil Case No. TG-1784 are hereby declared NULL and VOID.

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