Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 120066 September 9, 1999

OCTABELA ALBA Vda. De RAZ, Spouses MANUEL and SUSANA BRAULIO, RODOLFO, LOURDES and BEATRIZ all surnamed ALBA, petitioners, vs.COURT OF APPEALS and JOSE LACHICA, respondents.

YNARES-SANTIAGO, J.:

Before us is an appeal by certiorari from a decision rendered by the Court of Appeals dated August 18, 1992 affirming in toto the decision of the Regional Trial Court of Kalibo, Aklan, Branch I, in Land Registration Case No. K-101, LRC Record No. K. 15104, the dispositive portion of which reads as follows:

WHEREFORE, judgment is hereby rendered as follows:

1. The parcel of land described in Plan Psu-161277 and the improvements thereon situated in the Poblacion of the Municipality of Banga, Province of Aklan, Philippines, with an area of 4,845 square meters is brought under the operation of the property registration decree (PD No. 1529) and the title thereto is registered and confirmed in the name of applicant Jose Lachica, married to Adela Raz of Kalibo, Aklan, Philippines;

2. A ten (10) meter road width along the national road mentioned in the application be segregated for future road widening program upon payment of just compensation to be annotated at the back of the title;

3. For lack of merit, the opposition filed by the spouses Manuel and Susana Braulio, Octabela Alba Vda. De Raz, Rodolfo Alba, Lourdes Alba and Beatriz Alba are hereby DISMISSED.

SO ORDERED. 1

The factual antecedents of the case as summed by the trial court and adopted by the Court of Appeals are as follows:

Applicant Jose Lachica filed this application for title to land on April 28, 1958 with the claim that the land applied for was purchased by him and his wife, Adela Raz from, from one Eulalio Raz. The documents attached to the application are: technical description, surveyor's certificate, certification by the chief deputy assessor of Aklan and the blue print of Psu-161277.

The initial hearing was scheduled for October 31, 1958 and the certificate of publication in the Official Gazette was issued on September 23, 1958. The certification of posting of the notice of initial hearing was issued on October 13, 1958.

The land applied for is residential, situated in the Poblacion of Banga, Aklan, with an area of 4,845 square meters, bounded on the northeast by the property of the Municipality of Banga (Sketch, Exh. "F").

The initial hearing was held on October 31, 1958. An order of general default was issued but those who presented their opposition, namely, Octabela Alba Vda. De Raz, Manuel and Susana Braulio, Jose Rago, representing Apolonia Rebeco, the Director of Lands and the Municipality of Banga represented by the Provincial Fiscal, were given thirty (30) days to file their written opposition.

Manuel C. Braulio and Susana P. Braulio filed their opposition on October 31, 1958. They opposed the registration of the southeastern portion of the 240 square meters of the land applied for alleging that they are the owners in fee simple and possessors of said portion and all the improvements thereon

for not less than 70 years together with their predecessor-in-interest deriving their title by purchase from the original owners. They prayed for the Court to declare them the true and absolute owners of the disputed portion of the same in their names.

On October 31, 1958, Octabela Vda. de Raz filed her opposition.

Jose Rago filed his opposition on November 29, 1958 as the duly constituted attorney-in-fact of Apolonia Rebeco although no special power of attorney was attached. He opposed the registration of the northeastern portion of the land applied for, with an area of 43.83 square meters. He alleged that his principal is the owner by right of succession and is in the possession of said portion with all its improvements for more than 80 years together with his predecessor-in-interest, continuously, peacefully and openly under claim of ownership. He prayed that his principal be declared the true and absolute owner of the disputed portion of 43.83 square meters.1âwphi1.nêt

On March 22, 1966, the Court issued an Order allowing the applicant to hire another surveyor to segregate the non-controversial portion of the land applied for and to notify the oppositors and their counsels.

On January 12, 1970, a motion to lift the order of general default and to admit the attached opposition of Rodolfo Alba, Lourdes Alba and Beatriz Alba, as well as a motion to admit the attached amended petition of Octabela Vda. de Raz were filed. The Court in its order dated March 21, 1970 admitted said opposition and set aside the order of default.

In their opposition, Rodolfo Alba, Lourdes Alba, represented by their attorney-in-fact, Octabela Alba Vda. de Raz, alleged that they are the co-owners of a portion of the land applied for with an area of 2,262 square meters bounded on the north by Januario Masigon, Nicolas Realtor, Agustina Rebeldia and Apolonia Rebeco, on the south by Eulalio Raz and on the west by the public market of Banga. They claimed to have inherited the above-mentioned portion from their late father, Eufrosino

M. Alba, who purchased the same from Dionisia Regado in 1918. Hence, they have been in possession continuously, openly and peacefully under claim of ownership of the above-mentioned portion for not less 70 years. They prayed that the disputed portion of 2,262 square meters be registered as theirpro-indiviso property.

In her amended opposition, Octabela Alba Vda. de Raz opposed the registration of the southeastern portion of the land applied for with an area of 331.44 square meters. She claimed to have been in peaceful, continuous and open possession together with her deceased husband, Eulalio Raz, under claim of ownership of the above-mentioned portion for not less than 70 years, by purchase from its owners. She likewise opposed the registration of the western portion of the land applied for, with an area of 676 square meters, having purchased the same from its original owners on (sic) her predecessor-in-interest has been open, peaceful and continuous under claim of ownership for a period of not less than 70 years. She prayed that the portion of 331.44 square meters be registered in her name and that of the heirs of Eulalio Raz, pro indiviso., and the other portion of 676 square meters be registered solely in her name.

On February 25, 1970, the applicant Dr. Jose Lachica filed his consolidated opposition and reply to the motion to lift order of default stating that there is no reason to do so under the Rules of Court, and that the opposition of Rodolfo Alba, Lourdes Alba and Beatriz Alba, as well as the amended opposition of Octabela Alba Vda. de Raz are without merit in law and in fact.

On March 21, 1970, the motion to lift the order of general default was granted and the opposition of Rodolfo Alba, Lourdes Alba and Beatriz Alba, as well as the opposition of Octabela Alba Vda. de Raz were all admitted.

In the hearing of March 3, 1972, applicant offered for admission exhibits "A" to "I" and the testimonies of Pedro Ruiz (April 20, 1971), Jose Rago (Oct. 23, 1970) and Dr. Jose Lachica (July 16, 1971; Feb. 10, 1972). The Court admitted the same.

On March 13, 1974, the Court issued an order appointing Engr. Angeles Relor to act as Commissioner and delimit the portions claimed by the three sets of oppositors and submit an amended approved plan together with the technical description for each portion.

The Commissioner's report and sketch was submitted on December 4, 1974. The applicant filed his opposition to the Commissioner's report on December 12, 1974. The Court in its order of December 13, 1974 required the Commissioner to submit an amended report and amended sketch.

The Commissioner's corrected report and sketch was submitted on February 24, 1975 which the Court approved on February 25, 1975 there being no objection from the parties.

On March 15, 1977, the Court issued an order whereby the testimony of oppositor Octabela Alba Vda. de Raz was stricken off the record for her failure to appear in the scheduled hearing on March 15, 1977.

Again, in its order dated May 27, 1977 the testimony of Octabela Alba Vda. de Raz was stricken off record because the latter was bedridden and can not possibly appear for cross-examination.

Oppositor Octabela Alba Vda. de Raz substituted by her heirs filed a formal offer of exhibits on August 24, 1988. Applicant filed his comments thereto on August 29, 1988. The Court admitted said exhibits and the testimony of their witness on March 1, 1989.

In this application for title to land filed by applicant Jose Lachica, four oppositions were filed by the following:

1. Jose Rago, in representation of Apolonia Rebeco;

2. Manuel C. Braulio and Susana Braulio;

3. Rodolfo, Lourdes and Beatriz, all surnamed Alba, represented by Octabela Alba Vda. de Raz; and

4. Octabela Alba Vda. de Raz.

In the hearing of October 23, 1970, counsel for oppositor Jose Rago manifested that he would file a motion for withdrawal of opposition and Jose Rago himself declared his conformity (Tsn, Oct. 23, 1970, p. 5). Although no formal motion to withdraw was actually filed, oppositor Rago has not presented evidence on his behalf; hence, his opposition must be disregarded.

As regards oppositor Manuel C. Braulio ans Susana Braulio, a deed of sale supposedly executed by Susana Braulio and Octabela Alba Vda. de Raz in 1956 was identified by Felimon Raz, a witness for the oppositors (Tsn, Sept. 29, 1977, pp. 3 to 4). However, said deed cannot be found in the records. Even so, the Braulios have not presented evidence to show that by the time this application was filed, they and their predecessors-in-interest have been in actual, open, public, peaceful and continuous possession of the land claimed, in concept of owner, for at least 10 years sufficient to acquire title thereto (Arts. 1117, 1118, 1134, Civil Code of the Philippines). As such, the opposition of Manuel C. Braulio and Susana Braulio must be dismissed. 2

On the basis of the testimonial and documentary evidence presented by the applicant and the oppositor Raz, the court a quo rendered judgment in favor of the applicant as stated at the outset. In dismissing the claim of the remaining oppositors Rodolfo, Lourdes and Beatriz, all surnamed Alba, represented by Octabela Alba Vda. de Raz and Octabela Alba Vda. de Raz herself, the trial court in sum noted that said oppositors have never offered any explanation as to the non-payment of realty taxes for the disputed portions of the subject property from 1941 to 1958 while the respondent/applicant continuously paid taxes under Tax Declaration No. 14181 covering said property from 1945-1958 when the case was filed per certification issued by the Municipal Treasurer's Office of Banga. 3 In rendering judgment in favor of respondent/applicant, the trial court stressed that while it is true that tax receipts and declarations of ownership for tax purposes are not incontrovertible evidence of ownership, they become strong evidence of ownership acquired by prescription when accompanied by proof of actual possession.

Dissatisfied, petitioners interposed an appeal to the Court of Appeals which affirmed the decision of the trial court.

Unfazed, petitioners now come to this Court arguing that —

1. The Civil law provisions on prescription are inapplicable.

2. The applicable law is Section 48 [a] of the Public Land Law or Act 141, as amended.

3. Private respondent has not acquired ownership in fee simple, much less has he met the conditions for judicial confirmation of imperfect title under Section 48 [a] of Act 141, as amended, except perhaps for a 620 square meter portion of the land applied for because:

3.1. There is absolutely no proof of the alleged sales made by Raz and Alba.

3.2. There is absolutely no reliable proof of the alleged theft of the deeds of sale.

3.3. The identity of the land has not been established.

3.4. The Court of Appeals misapplied the basic rules governing the introduction of secondary evidence.

3.5. The applicant/respondent's Tax Declaration No. 14181 is a "doctored" tax declaration.

3.6. Applicant/respondent's tax declarations have no probative value.

3.7. Applicant/respondent has not satisfied the required quantum of evidence in land registration cases.

3.8. Petitioners-oppositors have proven their right over the subject property.

In rendering judgment in favor of private respondent, the Court of Appeals reasoned, inter alia, as follows:

On the basis of the testimonial and documentary evidence presented by the applicant, the trial court did not err in confirming that the applicant is the absolute owner in fee simple of the property subject of the application for registration entitling him to register the same in his name under the operation of PD 1529.

It is of no moment that the applicant failed to produce the originals of those other deeds/documents of conveyances, for he was able to present sufficient substantial secondary evidence, in accordance with the requirements of Section 4, Rule 130 of the Revised Rules of Court, now Section 5, same Rule of the Revised Rules on Evidence, and the doctrines in point.

Thus, Government vs. Martinez, 44 Phil. 817, explained that when the original writing is not available for one reason or another which is the best or primary evidence, to prove its contents is the testimony of some one who has read or known about it. Republic vs. Court of Appeals, 73 SCRA 148, laid out the foundation before secondary evidence is introduced, that the due execution, delivery and reason for non-production of the original writing must first be produced. Raylago vs. Jarabe, 22 SCRA 1247, ruled that it is not necessary to prove the loss of the original document beyond all possibility of mistake. A reasonable probability of its loss is sufficient and this may be shown by a bonafide (sic) and diligent search, fruitlessly made, for it in places where it is likely to be found. After proving the due execution and delivery of the document, together with the fact that the same has been lost or destroyed, its contents may be proved, among others, by the recollection of witnesses. And Beall vs. Dearing, 7 ala. 126; and Bogardas vs. Trinity Church, 4 Sandf. Ch. (Nn.y.) 639, are of the view that that where the lost documents are more than thirty (30) years old and would thus prove themselves if produced, secondary evidence of their contents is admissible without proof of their execution.

In the case at bar, petitioner acquired the property in 1940-1941. He presented the Deed (Exh. G) executed by the vendor Faustino Martirez. While he failed to present the other deeds of sale covering the other portions of the property, he has sufficiently established that they were notarized documents and were taken by his mother-in-law sometime in 1956. He reported the loss to the authorities and even filed a case of theft. He further exerted efforts and made a diligent search of those documents from the notary public but in vain. He presented the clerk of the Municipal Treasurer's Office of Banga, who testified having seen those deeds as they were presented to him by the applicant and which were used as basis for the preparation and issuance of Tax Declaration No. 14181 in the name of the tax declarant. Tax Declaration No. 14181 (Exh. H) was presented in Court, proving that the land was declared for tax purposes in the name of the applicant and his wife. The applicant has been paying the realty tax covering the property since 1945 and beyond 1958, when the application for registration was filed in court, per certification of the Municipal Treasurer of Banga (Exh. 1).

In resume, We find and so hold as did the trial court that Dr. Jose Lachica is the absolute owner in fee simple of the land described in his application for its original registration in his name. The land contains an area of 4,845 square meters, more or less, situated in Banga, Aklan, and

Bounded on the NE., along line 1-2, by property of Apolonia Rimate; on the SE., along line 2-3, by National road; on the SW., along line 3-4, by property of the Mpl. Government of Banga (Public Market); and on the NW., along line 4-1, by property of the Municipal Government of Banga (Public Market). Beginning at a point marked 1 on plan, being N. 45 deg. 02' E., 423.38 m. from B.L.L.M. 1, Mp. of Banga, Aklan;

thence, S. 33 deg. 46' E., 87.66 m. to point "2"

thence, S. 56 deg. 42' W., 63.81 m. to point "3"

thence, N. 37 deg. 22' W., 59.26 m. to point "4"

thence, N. 33 deg. 42' E., 73.08 m. to the point of

beginning, . . . All points referred to are indicated on the plan and are marked on the ground by P.L.S. Cyl. Conc. Mons. Bearings true date of the survey, January 25, 1957, and that of the approval, October 3, 1957.

The applicant has been in public, open, continuous and adverse possession of the property since 1940-41 up to the present to the exclusion of all, and thereby also acquired the property by acquisitive prescription, in accordance with Sections 40 and 43 of Act 190, otherwise known as the "Code of Civil Procedure", having been in actual and adverse possession under claim of ownership for over ten (10) years, and thus in whatever way his occupancy might have commenced or continued under a claim of title exclusive of any other right and adverse to all other claimants, resulted in the acquisition of title to the land by acquisitive prescription (Vda. de Delima vs. Tio, 32 SCRA 516).

Indeed, to borrow the apt words of the ponente in the Delima case, such proof of ownership of, and the adverse, continuous possession of the applicant since 1940, strongly ". . . militate against any judicial cognizance of a matter that could have been withheld in its ken," hence, whatever right oppositors may have had over the property or any portion thereof was thereby also lost through extinctive prescription in favor of the applicant who had been in actual, open, adverse and continuous possession of the land applied for in the concept of owner for over 10 years when the application for registration was filed in court. 4

It is a fundamental and settled rule that findings of fact by the trial court and the Court of Appeals are final, binding or conclusive on the parties and upon this Court, 5 which will not be reviewed 6 or disturbed on appeal unless these findings are not supported by evidence 7 or unless strong and cogent reasons dictate otherwise. 8

More explicitly, the findings of fact of the Court of Appeals, which are as a general rule deemed conclusive, may be reviewed by this Court in the following instances:

1.] When the factual findings of the Court of Appeals and the trial court are contradictory; 9

2.] When the conclusion is a finding grounded entirely on speculation, surmises and conjectures;10

3.] When the inference made by the Court of Appeals from its findings of fact is manifestly mistaken, absurd 11 or impossible;

4.] Where there is a grave abuse of discretion in the appreciation offacts; 12

5.] When the appellate court in making its findings went beyond the issues of the case, and such findings are contrary to the submission of both appellant and appellee;

6.] When the judgment of the Court of Appeals is premised on a misapprehension of facts; 13

7.] When the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties which, if property considered, would justify a different conclusion; 14

8.] When the findings of fact are themselves conflicting;

9.] When the findings of fact are conclusions without citation of specific evidence on which they are based; and

10.] When the findings of fact of the Court of Appeals are premised on the absence of evidence but such findings are contradicted by the evidence on record. 15

The primordial issue to be resolved is whether or not the private respondent/applicant is entitled to the confirmation of his ownership in fee simple for the 4, 845 square meter parcel of land he applied for.

In sum, both the trial court and the Court of Appeals adjudicated confirmed private respondent/applicant's title to the land on the basis of the findings that: 1.] the private respondent/applicant purchased the land from Faustino Martirez; 2.] the subject land is covered by Tax Declaration No. 14181; 3.] the private respondent/applicant has paid the realty taxes on the land from 1945 up to the filing of his application in 1958; 4.] the private respondent/applicant has been in actual, open and continuous possession of the subject land in the concept of owner since 1945, and 5.] the private respondent/applicant has acquired the land by prescription.

As stated earlier, a review of the findings of fact of the Court of Appeals is not a function that this Court normally undertakes 6 unless the appellate court's findings are palpably unsupported by the evidence on record or unless the judgment itself is based on a misapprehension of facts. 17 A thorough review of the record convinces this Court that the general rule with regard to the conclusiveness of the trial court's and appellate tribunal's factual findings should not be applied because there are material circumstances which, when properly considered, would have altered the result of the case.

First, a circumspect scrutiny of the evidence extant on record reveals that with the exception of 620 square meters, there has been no satisfactory showing of how private respondent/applicant acquired the remainder of the subject land.

As can be gathered from the discussion of the appellate court, as well as the arguments proffered by private respondent, he acquired the land in question from three (3) sources, namely: a.] A Deed of Sale dated August 13, 1941 allegedly executed by Faustino Martirez covering 840 square meters; b] 300 square meters allegedly purchased from private respondent's father-in-law Eulalio Raz, and c.] 3,725 square meters private respondent allegedly bought in 1940 from Eugrocino Alba.

The sale involving the first parcel of land covering 840 square meters, was not questioned by petitioners as its technical description delineated in the Escritura De Venta Absoluta dated August 13, 1941, 18 to wit:

Un terreno solar residencia antes palayero regado, actuado en el casco central del municipio de Banga, Capiz. Sin ninguna mejora, de una extension superficial de ochocientos cuarenta metros cuadrados (840 mts. cds.) 6 sean cuarenta metros de frente por otros veinte y unmetrode fondo, cuyos linderos por el Norte con propiedad de Eufrosino Alba y con Eulalio Raz; por 

Este con Eulalio Raz y con la carretera provincial de Kalibo a Banga; por Sur con la misma carretera provincial y con terreno del municipio para mercado; y por al Oeste con al terreno del mercado municipal de Banga y con propiedad de Eufrosino Alba y al terreno tienes sus mojones de cemento en todos sus cuatro cantos de linderia y sin otro limite visible de linderia mas que dichos mojones y esta amillarado a mi nombre en una sola hoja declaratoria de propiedad Tax No. 12374 en la Oficina del Tasador Provincial de Capiz, cuyo valor amilarado actual es veinte pesos (P20.00) . . .

leaves no room for doubt as to its identity, total area of 840 square meters as well as its dimensions of 40 meters in front and 21 meters at the base. How this parcel was further reduced to 620 square meters is explained by the fact that the Municipal Government of Banga appropriated 220 square meters thereof for the Banga Public Market Road.

What, however, is seriously contested are the alleged purchases of the other two parcels from Eulalio Raz measuring 300 square meters and from Eufrocino Alba measuring 3,725 square meters owing to the questionable circumstances surrounding their acquisition.

The records disclose that the subject land was originally owned by Dionisia Regado under Tax Declaration No. 802. 19 The records further reveal that Dionisia Regado sold: [1.] 1,850 square meters of the land to the Municipality of Banga evidenced by a Spanish document denominated as a deed of sale dated April 29, 1914; 20[2.] 1,320 square meters to Eulalio Raz evidenced by a document entitled Escritura de Venta Absoluta dated September 6, 1918, 21 and [3.] 2,938 square meters to Eufrocino Alba evidenced by a deed of conveyance dated September 6, 1918 written in Spanish. 22

Faustino Martirez acquired a portion of 840 square meters from Eulalio Raz on January 15, 1933. 23 Raz retained 480 square meters, however, he and his wife Octabela Alba conveyed a 240 square meter portion thereof to Susana Braulio on November 5, 1956. 24 Subsequently on May 29, 1969, the heirs of Eufrocino Alba sold a 676 square meter portion of the parcel purchased by Eufrocino to Octabela Alba Vda. de Raz. 25 The deed of conveyance was duly registered with the Registry of Deeds of Aklan pursuant to Act No. 334 on June 17, 1969 26and is covered by Tax Declaration No. 332 in the name of Eulalio Raz, her husband. 27

Other than the foregoing transactions involving the subject land which are borne out by the documentary evidence on record, private respondent/applicant did not produce the alleged deeds of conveyances evidencing the purported transfers made by Eulalio Raz and Eufrocino Alba in his favor. Instead he relied chiefly on secondary evidence to prove the existence thereof which was sustained by both the trial and the appellate courts. Such reliance on secondary evidence vis-a-vis the peculiar facts prevailing in this case rests on infirm legal bases much more so in the face of the overwhelming documentary evidence of petitioners arrayed against it because —

. . . [a] contract of sale of realty cannot be proven by means of witnesses, but must necessarily be evidenced by a written instrument, duly subscribed by the party charged, or by his agent, or by secondary evidence of their contents. No other evidence, therefore, can be received except the documentary evidence referred to, in so far as regards such contracts, and these are valueless as evidence unless they are drawn up in writing in the manner aforesaid. 28

An applicant for registration of land, if he relies on a document evidencing his title thereto, must prove not only the genuineness of his title but the identity of the land therein referred to. The document in such a case is either a basis of his claim for registration or not at all. If, as in this case, he only claims a portion of what is included in his title, he must clearly prove that the property sought to be registered is included in that title. 29

Second, there are glaring variances in the identities and technical descriptions of the land applied for by private respondent/applicant and the land he purportedly purchased from Eufrocino Alba.

Private respondent/applicant alleged that he purchased the remainder of the subject land measuring 3,725 square meters from Eufrocino Alba sometime in 1940 averring that this parcel is listed as Item No. 5 of his Exhibit "I" which is denominated as an "Inventory And Appraisal Of The Properties Of The Spouses Adela Raz De Lachica (Deceased) and Dr. Jose Lachica." ItemNo. 5 30 of the said inventory described the parcel of land mentioned therein as follows:

5. Una parcela de terreno cocal secano, amillarado en nombre de Eufrocino Alba bajo el Tax No. 12792 por valor de P390.00, situado en el municipio de Banga, Capiz, que linda el Norte con Lorenzo Retiro, y Silverio Relis; al Este con la carretera provincial Banga-Libacao; al sur con Bienvenido M. Alba y al Oeste con Cirilo rala y Adela Raz; con una extension aproximada de una (1) hectarea (20) areas y (35) centiareas poco mas o menos. (Note: Said property was purchased by the spouses Jose Lachica and Adela Raz Lachica from Eufrocino M. Alba in the amount of P500.00 as evidenced by aEscritura de Compraventa executed on November 25, 1940, at Himamaylan, Negros Occidental and notarized by Atty. Conrado Gensiano, as Reg. Not. 122, Pag. 67, Libro VIII, Serie 1940).

On the other hand, the land applied for is described technically per Psu 161277 as —

A parcel of land (as shown on Plan Psu-161277), situated in Poblacion, Municipality of Banga, Province of Aklan. Bounded on the NE., along line 1-2, by property of Apolonia Rimate; on the SE., along line 2-3, by National Road; on the SW., along line 3-4, by property of the Mpl. Government of Banga (Public Market); and on the NW., along line 4-1, by property of the Municipal Government of Banga (Public Market). Beginning at a point marked "1" on plan, being N. 45 deg. 02' E., 423.38 m. from B.L.L.M. 1, Mp. of Banga, Aklan;

thence S. 33 deg. 46' E. 87.66 m. to point "2"

thence S. 56 deg. 42" W., 63.81 m. to point "3"

thence N. 37 deg. 22' W., 59.26 m. to point "4"

thence N. 33 deg. 42' E., 73.08 m. to the point of

beginning, containing an area of FOUR THOUSAND EIGHT HUNDRED AND FORTY FIVE (4,845) SQUARE METERS. All points referred to are indicated on the plan and are marked on the ground by P.L.S. Cyl. Conc. Mons. Bearings true date of survey, January 25, 1957, and that of the approval, October 3, 1957. 31

It will be readily noted vis-a-vis the foregoing that: a.] the land applied for is covered by Tax Declaration No. 14181 while the parcel allegedly purchased from Eufrocino Alba is covered by Tax Declaration No. 15792; b.] the land applied for is palayero whereas the land allegedly acquired from Eufrocino Alba is cocal secano. Palay is unhusked rice, 32 thus, the term palayero refers to land devoted to the planting rice; cocal, on the other hand, means coconut tree plantation 33 while secano denotes unwatered land or a dry sand bank; 34 c.] the land applied for has an area of 4,845 square meters whereas the land supposedly sold by Eufrocino Alba measures 12,035 square meters; d.] the land applied for is bounded on the NE by the Banga Public Market, on the SE by Apolinia Rimate, on the SW by the Banga-Kalibo National Road; and on the NW by the Banga Public market whereas the land allegedly obtained from Eufrocino Alba is bounded on the N by Ernesto Retino and Silverio Relis, on the E by the Banga-Libaco Carreta Provincial, on the S by Bienvenido Alba and on the W by the Cirilo Rala and Adela Raz. It needs be stressed in this regard that a person who claims that he has better right to real property must prove not only his ownership of the same but also must satisfactorily prove the identity thereof. 35

Third, both trial and appellate courts placed undue reliance on Tax Declaration No. 14181 considering that there is no satisfactory explanation of how the area of land covered by Tax Declaration No. 14181 geometrically ballooned from a modest 620 square meter lot to a huge parcel measuring 4,845 square meters.

As pointed out by petitioners, Tax Declaration No. 14181 was preceded by 1954 Tax Declaration No. 13578 in the name of private respondent/applicant and his spouse which shows that the land declared therein for taxation purposes covers an area of 620 square meters. Tax Declaration No. 13578 was preceded by 1953 Tax Declaration No. 13040 in the name of Adela Raz, private respondent's wife. The land declared for taxation purposes therein also has an area of 620 square meters. Tax Declaration No. 134040 was preceded by 1947 Tax Declaration No. 6528 in the name of private respondent's wife, Adela Raz. The land declared therein for taxation purposes likewise measures 620 square meters.

It appears that the quantum leap from 620 square meters in 1947 to 4,845 square meters in 1956 came about on account of an affidavit dated November 17, 1956

wherein private respondent/applicant requested 36 the Municipal Assessor of Banga to issue a revised tax declaration covering 4,845 square meters on the bare claim that "the area has been decreased" to only 620 square meters. The timing of the revision and its proximity to the date of filing of the application can not but engender serious doubts on the application more so considering that prior thereto realty tax payments covering the period 1945 to 1956 covered an area measuring 620 square meters and private respondent/applicant is banking on said payments to claim possession and ownership over the same period for an infinitely larger area of 4,845 square meters.

A tax declaration, by itself, is not conclusive evidence of ownership. 37 Tax declarations for a certain number of years, although constituting proof of claim of title to land, 38 is not incontrovertible evidence of ownership unless they are supported by other effective proof. 39 It was, thus, held in one case 40 that where realty taxes covering thirty-one (31) years were paid only a few months prior to the filing of an application, such payment does not constitute sufficient proof that the applicant had a bona fide claim of ownership prior to the filing of the application. Still in another case, 41 the claim that the applicant had been incontinuous and uninterrupted possession of the disputed land was not given credence because it was negated by the fact that he declared the land for taxation purposes in October 1959 when he filed his application for registration although he could have done so in 1937 when he allegedly purchased the land. A belated declaration is, furthermore, indicative that the applicant had no real claim of ownership over the subject land prior to the declaration 42 and where there are serious discrepancies in the tax declarations as in this case, registration must be denied. 43 If at all, the foregoing facts only serves to underscore private respondent/applicant's crafty attempt to cloak with judicial color his underhanded scheme to seize the adjoining parcels of land and to enrich himself at the expense of its rightful owners.

Fourth, the lower court's reliance on prescription is not well-taken given the peculiar facts prevailing in this case.

The law in force at the time an action accrues is what governs the proceeding consistent with the fundamental dictum that laws shall have no retroactive effect, unless the contrary is proved. 44 Basic is the rule that no statute, decree, ordinance, rule, regulation or policy shall be given retrospective effect unless explicitly stated so. 45 Along the same vein, a court's jurisdiction depends on the law existing at the time an action is filed 46 and a law continues to be in force with regard to all rights which accrued prior to the amendment thereof. 47

In this case, the controlling statute when the private respondent/applicant filed his application for registration on April 28, 1958 is Section 48 of Commonwealth Act 141, as amended by RA Nos. 1942 and 6236, 48 which states that:

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

(a) Those who prior to the transfer of sovereignty from Spain to the United States have applied for the purchase, composition or other form of grant of lands of the public domain under the laws and royal decrees then in force and have instituted and prosecuted the proceedings in connection therewith, but have with or without default upon their part, or for any other cause, not received title therefor, if such applicants or grantees and their heirs have occupied and cultivated said lands continuously since the filing of their applications. 49

(b) Those who by themselves or through their predecessors in interest have been in open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain under a bona fideclaim of ownership, for at least thirty years immediately preceding the filing of the application for confirmation of title except when prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter. 50

(c) Members of the national cultural minorities who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of lands of the public domain suitable to agriculture, whether disposable or not, under a bona fide claim of ownership for at least 30 years shall be entitled to the rights granted in subsection (b) hereof. 51

A circumspect scrutiny of the assailed Decision readily shows that in the affirming the ruling of the trial court, the Court of Appeals relied on the provisions of Section 19 of Act 496 52 in relation to the Civil Code's provision's on prescription on the assumption that the subject land is private land. Therein lies the flaw in the appellate court's postulate. The application for registration of private respondent is for judicial confirmation of an imperfect title considering that the land is presumed under the Regalian Doctrine to be part of the public domain.

Public lands are broadly classified into 1.] Alienable or disposable lands; and, 2.] Inalienable or non-disposable public lands. Non-disposable public lands or those not susceptible of private appropriation include a.] Timber lands; and, b.] Mineral lands. 53 For purposes of administration and disposition, the lands of the public domain classified as "disposable" or "alienable" are further sub-classified into a.] Agricultural; b.] Residential, commercial, industrial or for similar productive purposes; c.] Educational, charitable or other similar purposes, and d.] Reservations for town sites and for public and quasi-public purposes. 54

From the foregoing classifications, public agricultural land may be defined as those alienable portions of the public domain which are neither timber nor mineral lands. Thus the term includes residential, commercial and industrial lands for the reason that these lands are neither timber nor mineral lands. 55

On the other hand, Section 19 of Act No. 496, as amended, permits the registration of private lands claimed to be owned by the applicant in fee simple which refer to:

1.] Lands acquired by various types of titles from the government during the Spanish Regime by way of grants by the Spanish crown namely the: a.] Titulo real or royal grant; b.] Concession especial or special grant; c]Composicion con el estado title or adjustment title; d.] Titulo de compra or title by purchase and; e.]Informacion posesoria or possessory information title, which could become a Titulo gratuito or a gratuitous title; 56

2.] Lands that are claimed to be owned by accession, i.e. accretion, avulsion, formation of islands, abandoned river beds, as provided for in Articles 457, 461 and 464 of the Civil Code; and

3.] Lands which have been acquired in any other manner provided by law.

Suffice it to state that the land sought to be registered by private respondent hardly falls under any of the latter classifications of land referred to by Act No. 496, as amended. Given the foregoing facts, prescription in the manner invoked by both courts can not be pleaded to bolster private respondent/applicant's claim because —

. . . [N]o public land can be acquired by private persons without any grant, express or implied from the government; it is indispensable that there be a showing of title from the state . . . . 57

xxx xxx xxx

Indeed, the possession of public agricultural land, however, long the period may have extended, never confers title thereto upon the possessor. 58 The reason, to reiterate our ruling, is because the statute of limitations with regard to public agricultural land does not operate against the State, unless the occupant can prove possession and occupation of the same under claim of ownership for the required number of years to constitute a grant from the State. 59

Fifth, even assuming ex gratia argumenti that prescription can be applied in the manner invoked by the trial court and the appellate court, it must be pointed out that —

. . . [W]hile Art. 1134 of the Civil Code provides that "(o)wnership and other real rights over immovable property are acquired by ordinary prescription through possession of ten years," this provision of law must be read in conjunction with Art. 1117 of the same Code. This article states that ". . . (o)rdinary acquisitive prescription of things requires possession in good faith and with just title for the time fixed by law." Hence, a prescriptive title to real estate is not acquired by mere possession thereof under claim of ownership for a period of ten years unless such possession was acquired con justo titulo y buena fe (with color of title and good faith). 60 The good faith of

the possessor consists in the reasonable belief that the person from whom he received the thing was the owner thereof, and could transmit his ownership. 61 For purposes of prescription, there is just title when the adverse claimant came into possession of the property through one of the recognized modes of acquisition of ownership or other real rights but the grantor was not the owner or could not transmit anyright. 62

It can not be said that private respondent's possession was con justo titulo y buena fe. On the contrary, private respondent/applicant's act of appropriating for himself the entire area of 4,845 square meters to the exclusion of petitioners who have been occupying portions of the disputed land constituted acts of deprivation tantamount to bad faith. Indeed this Court has ruled that the —

. . . [c]oncealment and misrepresentation in the application that no other persons had any claim or interest in the said land, constitute specific allegations of extrinsic fraud supported by competent proof. Failure and intentional omission of the applicants to disclose the fact of actual physical possession by another person constitutes an allegation of actual fraud. 63 Likewise, it is fraud to knowingly omit or conceal a fact, upon which benefit is obtained to the prejudice of a third person. 64

Suffice it to state in this regard that to allow private respondent/applicant to benefit from his own wrong would run counter to the maxim ex dolo malo non oritur actio — no man can be allowed to found a claim upon his own wrongdoing. 65

It need not be overemphasized that extraordinary acquisitive prescription can not similarly vest ownership over the property upon private respondent/applicant because Article 1137 of the Civil Code states in no uncertain terms that —

Art. 1137. Ownership and other real rights over immovables also prescribe through uninterrupted adverse possession thereof for thirty years, without need of good faith.

Needless to state, private respondent/applicant's possession of thirteen (13) years falls way below the thirty-year requirement mandated by Article 1137.

Sixth, petitioners/oppositors have, in stark contrast to the secondary proof of private respondent, adduced overwhelming evidence to prove their ownership of the portions they claim in the subject land. The evidence on record clearly points to the fact that private respondent/applicant's right, if at all, is confined to only 620 square meters or what has been left of the 840 square meters he purchased from Faustino Martirez after 220 square meters thereof were appropriated by the Municipality of Banga for the Public Market Road. 66

The records further bear out that the original owner of the whole area was one Dionisia Regado who executed three (3) deeds of sale covering certain portions of the disputed lands, namely: 1.] the Deed of Sale dated April 29, 1914 covering 1,850 square meters executed in favor of the Municipality of Banga; 67 2.] the Deed of Sale dated July 10, 1915 covering 1,320 square meters executed in favor of Eulalio Raz; 68 and, 3.] the Deed of Sale dated September 6, 1918 covering the balance with an area of 2,938 square meters in favor of Eufrocino Alba. 69

Faustino Martirez acquired only an 840 square meter portion of the land by purchase Eulalio Raz on January 15, 1933 as confirmed in paragraph 2 of the Escritura De Venta Absoluta executed by him on August 13, 1941. 70After selling 840 square meters to Faustino Martirez, Eulalio Raz retained 480 square meters to Susana Braulio 71leaving a balance of 240 square meters which remained undiposed.

On May 29, 1969, Virginia Alba, Inocentes Alba and Estrella Alba, children of the deceased Eufrocino Alba, sold a 676 square meter portion of the 2,938 square meter lot purchased by their father from Dionisia Regado to petitioner/oppositor Octabela alba Vda. De Raz. 72 This Deeds was duly registered with the Registry of Deeds of Aklan in accordance with Act No. 3344 on June 17, 1969. 73 The land is covered by Tax Declaration No. 332 in the name of Octabela Alba Vda. De Raz's husband. 74

Petitioner/oppositor Octabela Alba Vda. De Raz's ownership of the remaining 240 square meter portion which she and her husband Eulalio Raz bought from Dionisia Regado 75 and the 676 square meter portion which they bought from the heirs of Eufrocino Alba 76 is fully substantiated by documentary proof. 77 Rodolfo Alba, Lourdes Alba and Beatriz Alba's ownership of a portion measuring 1,335 square meters 78 and another portion measuring 2,262 square meters 79 is likewise backed by documentary evidence. Susana Braulio's ownership of a 240 square meter portion 80 which she acquired from Octabela Alba Vda. De Raz on November 11, 1956 81 is also documented, her predecessor-in-interest having acquired the same from Dionisia Regado on September 6, 1918.82

The foregoing only serves to underscore the paucity of the proof of private respondent/applicant to support his claim of ownership over the entire 4,845 square meter area. He has not adduced evidence to show how and when he was able to acquire, with the exception of 840 square meters further reduced to 620 square meters on account of 220 square meters appropriated for the market road, the bigger area of 3, 755 square meters from anybody let alone the ancestral owner, Dionisia Regado.

His claim is anchored mainly on Revised Tax Declaration No. 14181 which he was able to procure from the Municipal Assessor of Banga in 1956 on the basis of a self-serving affidavit which proffered the lame excuse that there was error in the statement of the area of the land which he claimed to be 4,845 square meters instead of 620 square meters — which was the area reflected in earlier tax declarations namely, 1954 Tax Declaration No. 13578; 1953 Tax Declaration No. 13043; and 1947 Tax Declaration No. 6528.

Be that as it may, the Court has reservations on the propriety of adjudicating to petitioners the contested portions of the subject land, in view of their failure to present the technical descriptions of these areas. Furthermore, there is no sufficient evidence showing that petitioners have been in open, adverse, exclusive, peaceful and continuous possession thereof in the concept of owner, considering that the testimony of Octabela Alba vda. De Raz was stricken off the record.

WHEREFORE, based on foregoing premises, the Decision of the Regional Trial Court of Kalibo, Aklan, Branch 1 dated August 18, 1992 in Land Registration Case No. K-101, LRC Record No. K-15104 is hereby MODIFIED as follows:

1.] The 620 square meter portion on which private respondent Jose N. Lachica's house is situated, clearly delineating its metes and bounds, is hereby ORDERED segregated from the parcel of land described in Psu-161277 situated in the Poblacion of the Municipality of Banga, Province of Aklan, Philippines with an area of 4,484 square meters, to be registered and confirmed in the name of private respondent;

2.] A ten (10) meter road width along the National road mentioned in the application be segregated for future road widening programs upon the payment of just compensation to be annotated at the back of the title.

3.] Insofar as the ownership of the remainder of the subject land is concerned, the case is hereby REMANDED to the court of origin for the reception of further

evidence for the petitioners to establish the other requisites for the confirmation of title and registration in their names of the areas they respectively claim.1âwphi1.nêt

SO ORDERED.

Puno, Kapunan and Pardo, JJ., concur.

Davide, Jr., C.J., on official leave.

Republic of the PhilippinesSUPREME COURT

Baguio City

SECOND DIVISION

G.R. No. 152016 April 13, 2010

NARCISO TUMIBAY,* RUPERTO TUMIBAY, ELENA TUMIBAY, EDUARDO TUMIBAY, CORAZON TUMIBAY, MANUELA SEVERINO VDA. DE PERIDA and GREGORIA DELA CRUZ, Petitioners, vs.SPS. YOLANDA T. SORO and HONORIO SORO, SPS. JULITA T. STA. ANA and FELICISIMO STA. ANA,Respondents.

D E C I S I O N

BRION, J.:

Before us is the petition for review on certiorari,1 filed by petitioners Narciso Tumibay (Narciso), Ruperto Tumibay, Elena Tumibay, Eduardo Tumibay, Corazon Tumibay, Manuela Severino Vda. De Perida and Gregoria Dela Cruz (petitioners), to reverse and set aside the decision2 dated August 24, 2001 and resolution3 dated January 29, 2002 of the Former Special Tenth Division of the Court of Appeals (CA) in CA-G.R. SP No. 56489. The assailed CA decision nullified, for having been issued with grave abuse of discretion, the order dated September 6, 1999 of the Regional Trial Court (RTC), Branch 30, Cabanatuan City in Civil Case No. 8269. The assailed CA Resolution denied the petitioners’ subsequent motion for reconsideration.

FACTUAL BACKGROUND

The facts of the case, gathered from the records, are briefly summarized below.

The petitioners, including the respondent Julita T. Sta. Ana (Julita), were the defendants in Civil Case No. 8269, an action for annulment and recovery of ownership with damages, filed on January 17, 1984 by the respondent Yolanda T. Soro (Yolanda) and her husband, respondent Honorio Soro. The subject of the case was a 1,083 square meter parcel of land in Cabanatuan City (subject property) originally titled in the name of Francisca Sacdal, the grandmother of Yolanda and Julita, under Original Certificate of Title (OCT) No. 1738 of the Registry of Deeds of

Cabanatuan City. Thru a "Bilihang Tuluyan ng Lupa" dated February 2 and 13, 1967, OCT No.1738 was cancelled and Transfer Certificate of Title (TCT) No. T-11574 was issued in Narciso’s name. Narciso subsequently sold the subject property to the other petitioners in this case, thereby causing the issuance of TCT Nos. T-23150, 27151 and 42467 in their names.

On December 30, 1993, the RTC rendered a decision, whose dispositive portion reads:

WHEREFORE, premises considered, decision is hereby rendered, as follows:

1. Declaring the "Bilihang Tuluyan ng Lupa" dated February 2 & 13, 1967 and all sales executed subsequent thereto as null and void ab initio;

2. Ordering the annulment of Transfer Certificate of Title No. T-11574, issued in the name of Narciso Tumibay and all subsequent titles issued thereafter, such as TCT Nos. T-23150, 27151 and 42467 of the Register of Deeds of Cabanatuan City, in the name of the other defendants;

3. Declaring the plaintiff Yolanda T. Soro and defendant Julita T. Sta. Ana, as the sole heirs of Estela Perida and owners of the land covered originally by Original Certificate of Title No. 1738;

4. Ordering the defendants to reconvey the said property to the said Yolanda T. Soro and Julita T. Sta. Ana, and in default thereof, the Branch Clerk of Court of this Court is hereby authorized to execute the necessary deed of conveyance in favor of said Yolanda T. Soro and Julita T. Sta. Ana; and

5. Ordering the defendants, jointly and severally to pay the plaintiff P5,000.00 as actual and moral damages, and attorney’s fee of P5,000.00 and cost of suit.

SO ORDERED.

The RTC decision was affirmed, successively, by the CA and by this Court. After finality, the RTC – on Yolanda’s motion – issued a writ of execution. In obedience to the writ, the Register of Deeds of Cabanatuan City issued TCT No.T-986494 and TCT No. T-986505 in the names of Yolanda and Perlita.

On March 3, 1999, Yolanda and Perlita, with their respective spouses, filed with the RTC a motion to be restored to the possession of the subject property and to demolish the improvements thereon, in accordance with paragraphs (c) and (d) of Section 10, Rule 39 of the Rules of Court.6

The petitioners opposed the motion on the ground that there was nothing in the RTC decision that ordered the demolition of existing improvements.

THE RTC RULING

The RTC issued an Order (dated September 6, 1999) denying the respondents’ motion. In sustaining the petitioners’ views, the RTC noted that a writ of execution should conform to the dispositive portion of the decision sought to be executed; it cannot go beyond the terms of the judgment.7

When the RTC denied8 their motion for reconsideration,9 the respondents elevated their case to the CA via a petition for certiorari under Rule 65 of the Rules of Court. They insisted that the removal or demolition of the improvements was the logical consequence of the RTC decision.

THE CA RULING

The CA decided the petition on August 24, 2001. The appellate court, applying Rule 39, Section 10, paragraph (d) of the Rules of Court, noted that since the RTC ordered the petitioners to reconvey to the respondents the subject property that contains improvements the petitioners introduced, the demolition of the improvements can be done only after a special order of the RTC, issued upon the respondents’ motion, after due hearing, and after the petitioners failed to remove the improvements within the time fixed by the RTC. Thus, the CA declared void the September 6, 1999 RTC Order and directed the RTC to fix the time within which the petitioners should remove the improvements from the subject property.

After the CA’s denial10 of their motion for reconsideration,11 the petitioners filed the present petition for review on certiorari under Rule 45 of the Rules of Court.

THE PETITION

The petitioners argue that the writ of execution should conform to the dispositive portion of the decision sought to be executed and the demolition of the existing improvements was not expressly ordained in the decision. They submit that to

effect the demolition, the respondents must file an ejectment case. They cite Nazareno v. Court of Appeals,12 which held that "being declared owner of the subject lot does not also mean that [the winning party] is automatically entitled to possession of all improvements thereon."

THE CASE FOR THE RESPONDENTS

The respondents submit that the petitioners’ argument runs counter to the express provisions of Rule 39, Section 47 of the Rules of Court that a judgment is conclusive on all matters that the parties could have raised; to further require them to file an ejectment suit to oust the petitioners would amount to encouraging multiplicity of suits.

THE ISSUE

The core issue is whether the CA erred when it declared void the September 6, 1999 RTC Order denying the respondents’ motion to be restored to possession of the subject property and to demolish the improvements thereon.

OUR RULING

We find no merit in the petition.

A judgment is not confined to what appears on the face of the decision

We are not persuaded by the petitioners’ argument that, since the RTC decision to reconvey to respondents the subject property did not expressly order the removal of improvements thereon, the RTC cannot, by order, reach these improvements and accordingly act to enforce its decision.

As a general rule, the writ of execution should conform to the dispositive portion of the decision to be executed; an execution is void if it is in excess of and beyond the original judgment or award. The settled general principle is that a writ of execution must conform strictly to every essential particular of the judgment promulgated,13 and may not vary the terms of the judgment it seeks to enforce, nor may it go beyond the terms of the judgment sought to be executed.14

Nonetheless, we have held that a judgment is not confined to what appears on the face of the decision, but extends as well to those necessarily included therein or

necessary thereto.15 Thus, in Perez v. Evite,16 where the ownership of a parcel of land was decreed in the judgment, the delivery of possession of the land was considered included in the decision where the defeated party's claim to possession was based solely on his claim of ownership.

In Baluyut v. Guiao,17 we stressed that this rule fully conforms with Rule 39, Section 47, paragraph (c) of the Rules of Court that provides:

SECTION 47. Effect of judgments or final orders. — The effect of a judgment or final order rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:

x x x x

(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, orwhich was actually and necessarily included therein or necessary thereto. (Emphasis supplied.) 18

Petitioners misread Nazareno v. Court of Appeals

We find that the petitioners misread the ruling in Nazareno v. Court of Appeals19 when they understood the ruling to mean that in all cases, a declaration of ownership does not include a declaration of the right to possession. What Nazareno actually holds is that adjudication of ownership would include the delivery of possession if the defeated party has not shown any right to possess the land independently of his rejected claim of ownership. This ruling, as understood in its correct sense, fully applies to the present case, as there is no allegation, much less any proof, that the petitioners have any right to possess the improvements on the land independently of their claim of ownership of the subject property. Thus, the respondents have full right to possession of the subject property.

We remind the petitioners that we do not allow the piecemeal interpretation of our Decision as a means to advance one’s case. To get the true intent and meaning of a decision, no specific portion thereof should be isolated and read in this context; the decision must be considered in its entirety.20 Read in this manner, the respondents’ right to possession of the subject property fully follows.

Rule 39, Section 10 sets the procedure for execution of judgment for specific acts

In addition, Rule 39, Section 10, paragraphs (c) and (d), of the Rules of Court provides the procedure for execution of judgments for specific acts, as follows:

SECTION 10. Execution of judgments for specific act.-

x x x x

(c) Delivery or restitution of real property. - The officer shall demand of the person against whom the judgment for the delivery or restitution of real property is rendered and all persons claiming rights under him to peaceably vacate the property within the three (3) working days, and restore possession thereof to the judgment obligee; otherwise, the officer shall oust all such persons therefrom with the assistance, if necessary, of appropriate peace officers, and employing such means as may be reasonably necessary to retake possession, and place the judgment obligee in possession of such property. Any costs, damages, rents or profits awarded by the judgment shall be satisfied in the same manner as a judgment for money.

(d) Removal of improvements on property subject of execution. - When the property subject of execution contains improvements constructed or planted by the judgment obligor or his agent, the officer shall not destroy, demolish or remove said improvements, except upon special order of the court, issued upon motion of the judgment obligee after due hearing and after the former has failed to remove the same within a reasonable time fixed by the court. (Emphasis supplied)1avvphi1

In Buñag v. Court of Appeals,21 we explained that a judgment for the delivery or restitution of property is essentially an order to place the prevailing party in possession of the property. If the defendant refuses to surrender possession of the property to the prevailing party, the sheriff or other proper officer should oust him. No express order to this effect needs to be stated in the decision; nor is a categorical statement needed in the decision that in such event the sheriff or other proper officer shall have the authority to remove the improvements on the property if the defendant fails to do so within a reasonable period of time. The removal of the improvements on the land under these circumstances is deemed read into the decision, subject only to the issuance of a special order by the court for the removal of the improvements.22

In light of the foregoing, we find that the CA committed no reversible error in declaring void the September 6, 1999 RTC Order.

Treble costs against petitioners

We lament that the petitioners, by instituting the present petition, has effectively delayed the full execution of the final and executory RTC judgment. In doing so, they deprived the winning respondents of the fruits of the judgment, and made a mockery of the RTC judgment that has stood scrutiny all the way to our level. We have always frowned upon any scheme to prolong litigations and we view the present dispute as an unwarranted effort to avoid the implementation of a judgment painstakingly arrived at. We cannot countenance, and in fact, condemn this kind of abuse of judicial process. Thus, we deem it fit to impose treble costs against the petitioners.

We note that the petitioners filed a Manifestation dated August 28, 200823 informing us that Julita sold her pro indiviso share in the subject property to one Corazon T. Logramente thru a "Bilihang Lubusan ng Lupa" dated July 17, 2003, and the latter caused the annotation of her adverse claim in the TCT Nos. T-98649 and T-98650. However, this supervening event has no bearing to the present case where the only issue involved is the propriety of the September 6, 1999 RTC Order that denied the respondents’ motion to be restored in possession. Besides, whatever right Corazon T. Logramente, a third party to the present dispute, may have on the subject property is adequately protected by the inscription of her adverse claim in the land titles. Any right she may have can only be raised or brought by her as the affected party, or the real party-in-interest, in a proper forum.

WHEREFORE, in light of all the foregoing, we hereby DENY the petition and AFFIRM the decision dated August 24, 2001 and resolution dated January 29, 2002 of the Former Special Tenth Division of the Court of Appeals (CA) in CA-G.R. SP No. 56489 insofar as it declared void the Order dated September 6, 1999 of the Regional Trial Court, Branch 30, Cabanatuan City in Civil Case No. 8269. The Court is directed to conduct a hearing with dispatch, in accordance with Section 10 (d) of Rule 39 of the Revised Rules of Court, with due notice to the parties involved.

Treble costs against the petitioners.

SO ORDERED.

ARTURO D. BRIONAssociate Justice

Republic of the PhilippinesSUPREME COURTManila

EN BANC

G.R. No. 160657 June 30, 2004

CIVIL SERVICE COMMISSION, petitioner, vs.NIMFA P. ASENSI, respondent.

R E S O L U T I O N

TINGA, J.:

Respondent Nimfa Asensi was ordered dismissed by petitioner Civil Service Commission ("CSC") from her position as Revenue District Officer of the Bureau of Internal Revenue in Lucena City. Her dismissal came after an investigation revealed that she had falsified entries in her Personal Data Sheet (PDS) relative to her educational background.1 Aggrieved, respondent filed a petition for certiorari with the Court of Appeals, assailing the CSC Resolution ordering her dismissal.

On 9 July 2003, the Court of Appeals’ Fourth Division promulgated a D E C I S I O N2 holding that the dismissal of respondent was not warranted, and setting aside the assailed resolution of the CSC.3 Acting upon the CSC’s motion for reconsideration, the Court of Appeals denied it in a R E S O L U T I O N dated 29 October 2003.

The Office of the Solicitor General ("OSG") received a copy of the 29 October 2003 Resolution on 7 November 2003. Having until 22 November 2003 to file a petition for review on certiorari before this Court, on 21 November 2003, the OSG filed a motion for extension until 22 December 2003 to file the petition for review.4 This Court granted the OSG’s motion in a Resolution dated 9 December 2003.5

Apparently, the CSC remained in the dark as to the legal moves made by its counsel, the OSG. On 25 November 2003, the CSC, filed a Manifestation To File Its Own Petition for Review.6 This Manifestation was signed by three lawyers from the Office of Legal Affairs of the CSC.7

On 27 November 2003, the CSC, through its Office of Legal Affairs, filed with this Court a Petition for Certiorari under Rule 65, assailing the 9 July 2003 Decision of the Court of Appeals, which it received on 30 July 2003.8 In a Resolution dated 13 January 2004, the Court, without giving due course to the petition, directed the respondent to file her comment thereon.9

The OSG was surprised by the twin legal moves taken by the CSC without their consent and participation. On 22 December 2003, the OSG filed a Manifestation and Motion stating that considering the CSC’s manifested intention to file its own petition, the OSG had no recourse but to withdraw its 21 November 2003 Motion for Extension and allow the CSC to actively pursue its own case.10 We required the CSC to comment on the OSG’s Manifestation and Motion.11 In their Comment filed on 27 April 2004, the CSC asserted that Under Section 16 (3), Chapter 3, Subtitle A, Title I, Book V of the Administrative Code of 1987, its Office for Legal Affairs was authorized to represent the CSC "before any Court or tribunal".12

In the meantime, respondent filed her Comment on the Petition for Certiorari.13 She prayed for the immediate dismissal of the petition, as the proper remedy for the CSC was not the special civil action for certiorari under Rule 65, but a petition for review under Rule 45. Moreover, since the period for filing a petition for review had already elapsed, according to the respondent, the CSC had deliberately resorted to the special civil action.

We agree with the respondent. So, we dismiss the petition. There is little need to elaborate on the reasons, which are after all, elementary in procedural law. The special civil action for certiorari lies only to correct acts rendered without jurisdiction, in excess of jurisdiction, or with grave abuse of discretion.14 The grave abuse of discretion imputed to the Court of Appeals was its finding that respondent was not guilty of the charges against her, a charge that if true, would only constitute an error in law. Certiorari will issue only to correct errors of jurisdiction, not errors of procedure or mistakes in the findings or conclusions of the lower court. As long as a court acts within its jurisdiction, any alleged errors committed in the exercise of its discretion will amount to nothing more than errors of judgment which are reviewable by timely appeal and not by special civil action for certiorari.15 Neither is certiorari warranted if there is another plain, speedy and adequate remedy in the ordinary course of law.16 The remedy to the adverse decision of the Court of Appeals in this case is a petition for review under Rule 45.17

The OSG, counsel of record for the CSC, well understood the proper procedure for appeal, and undertook the initiatory step for a petition for review by filing a Motion for Extension of Time to file such petition.18 It is unclear if the CSC had known about

the OSG’s Motion, though the answer to that question does not really matter to the disposition of this case. The Court granted the OSG’s Motion, allowing the OSG to file its Petition until 22 December 2003. The OSG, being the designated legal representative of the Government and its instrumentalities, has a long history of association with this Court and acquired in the process an awesome wealth of experience in appellate practice. Had the CSC relied on its counsel’s expertise, it would have been spared of the needless burden of salvaging its petition from outright dismissal and, of course, the inevitable ignominy which such dismissal entails.

Instead, the CSC, using its own lawyers, filed the wrong mode of review. The CSC’s assertion as to the capacity of its Office of Legal Affairs to appear before this Court is of dubious legal basis. A similar issue was raised, albeit pertaining to the legal officers of the Bureau of Internal Revenue, in the Court’s R E S O L U T I O N in Commissioner of Internal Revenue v. La Suerte Cigar and Cigarette Factory.19 The BIR therein asserted that on the basis of Section 220 of the Tax Reform Act of 1997, its legal officers were allowed to institute civil and criminal actions and proceedings in behalf of the government. The Court disagreed, saying that it is the Solicitor General who has the primary responsibility to appear for the government in appellate proceedings,20 it being the principal law officer and legal defender of the government.21 The Court also cited with approval, the exception enunciated in Orbos v. Civil Service Commission22 which is that the government office may appear in its own behalf through its legal personnel or representative only if it is adversely affected by the contrary position taken by the OSG. Herein, there is no indication that the OSG has adopted a position contrary to that of the CSC; hence, appearance by the CSC on its own behalf would not be warranted.

Yet, even if the CSC Office of Legal Affairs were allowed to represent the CSC in this petition, still the dismissal of the case would still be warranted in view of the erroneous mode by which the assailed Court of Appeals D E C I S I O N was elevated. Moreover, the OSG, which had been given until 22 December 2003 to file the petition for review, did not file any such petition, interposing instead the Manifestation and Motion.23 This Manifestation, of course, did not stay the period for filing the petition for review. Thus, such period has already elapsed for good. On account of the lapse of the period, there is no need for us to pass upon the OSG’sManifestation and Motion.

We are hardly sympathetic to the CSC’s predicament. Not only did it supply the noose by which it was hung, it also tied the knot. Had the CSC been in consultation with its counsel of record, the petition could have been taken without incident. Instead, without seeking the heed of sager minds, it went off by its lonesome into

high noon, ill-equipped. There is nothing left to do but pronounce the demise of the case.

The Petition is DISMISSED. No costs.

SO ORDERED.

Davide, Jr., Puno, Vitug, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., andAzcuna, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 101387 March 11, 1998

SPOUSES MARIANO and ERLINDA LABURADA, represented by their attorney-in-fact, MANUEL SANTOS, JR., petitioner, vs.LAND REGISTRATION AUTHORITY, respondent.

PANGANIBAN, J.:

In an original land registration proceeding in which applicants have been adjudged to have a registrable title, may the Land Registration Authority (LRA) refuse to issue a decree of registration if it has evidence that the subject land may already be included in an existing Torrens certificate of title? Under this circumstance, may the LRA be compelled by mandamus to issue such decree?

The Case

These are the questions confronting this Court in this special civil action for mandamus 1 under Rule 65 which asks this Court to direct the Land Registration Authority (LRA) to issue the corresponding decree of registration in Land Registration Case (LRC) No. N-11022. 2

The Facts

Petitioners were the applicants in LRC Case No. N-11022 for the registration of Lot 3-A, Psd-1372, located in Mandaluyong City. On January 8, 1991, the trial court, acting as a land registration court, rendered its decision disposing thus: 3

WHEREFORE, finding the application meritorious and it appearing that the applicants, Spouses Marciano [sic] and Erlinda Laburada, have a registrable title over the parcel of land described as Lot 3A, Psd-1372, the Court declares, confirms and orders the registration of their title thereto.

As soon as this decision shall become final, let the corresponding decree be issued in the name of spouses Marciano [sic] and Erlinda Laburada, both of legal age, married, with residence and postal address at No. 880 Rizal Ave., Manila.

After the finality of the decision, the trial court, upon motion of petitioners, issued an order 4 dated March 15, 1991 requiring the LRA to issue the corresponding decree of registration. However, the LRA refused. Hence, petitioners filed this action for mandamus. 5

Attached to the LRA's comment on the petition is a report dated April 29, 1992 signed by Silverio G. Perez, director of the LRA Department of Registration, which explained public respondent's refusal to issue the said decree: 6

In connection with the Petition for Mandamus filed by Petitioners through counsel, dated August 27, 1991 relative to the above-noted case/record, the following comments are respectfully submitted:

On March 6, 1990, an application for registration of title of a parcel of land, Lot 3-A of the subdivision plan Psd-1372, a portion of Lot 3, Block No. 159, Swo-7237, situated in the Municipality of San Felipe Neri, Province of Rizal was filed by Spouses Marciano [sic] Laburada and Erlinda Laburada;

After plotting the aforesaid plan sought to be registered in our Municipal Index Sheet, it was found that it might be a portion of the parcels of land decreed in Court of Land Registration (CLR) Case Nos. 699, 875 and 817, as per plotting of the subdivision plan (LRC) Psd-319932, a copy of said subdivision plan is Annex "A" hereof;

The records on file in this Authority show that CLR Case Nos. 699, 875 & 917 were issued Decree Nos. 240, 696 and 1425 on August 25, 1904, September 14, 1905 and April 26, 1905, respectively;

On May 23, 1991, a letter of this Authority was sent to the Register of Deeds, Pasig, Metro Manila, a copy is Annex "B" hereof, requesting for a certified true copy of the Original Certificate of Title No. 355, issued in the name of Compania Agricola de Ultramar;

On May 20, 1991, a certified true copy of the Original Certificate of Title (OCT) No. 355 was received by this Authority, a copy is Annex "C" hereof, per unsigned letter of the Register of Deeds of Pasig, Metro Manila, a copy is Annex "D" hereof;

After examining the furnished OCT NO. 355, it was found that the technical description of the parcel of land described therein is not readable, that prompted this Authority to send another letter dated April 15, 1992 to the Register of Deeds of Pasig, Metro Manila, a copy is Annex "E" hereof, requesting for a certified typewritten copy of OCT No. 355, or in lieu thereof a certified copy of the subsisting certificate of title with complete technical description of the parcel of land involved therein. To date, however, no reply to our letter has as yet been received by this Authority;

After verification of the records on file in the Register of Deeds for the Province of Rizal, it was found that Lot 3-B of the subdivision plan Psd-1372 being a portion of Lot No. 3, Block No. 159, Plan S.W.O. — 7237, is covered by Transfer Certificate of Title No. 29337 issued in the name of Pura Escurdia Vda. de Buenaflor, a copy is attached as Annex "F" hereof. Said TCT No. 29337 is a transfer from Transfer Certificate of Title No. 6595. However, the title issued for Lot 3-A of the subdivision plan Psd-1372 cannot be located because TCT No. 6595 consisting of several sheets are [sic] incomplete.

For this Authority to issue the corresponding decree of registration sought by the petitioners pursuant to the Decision dated January 8, 1991 and Order dated March 15, 1991, it would result in the duplication of titles over the same parcel of land, and thus contravene the policy and purpose of the Torrens registration system, and destroy the integrity of the same (G.R. No. 63189, Pedro E. San Jose vs. Hon. Eutropio Migriño, et al.,); . . . .

In view of the foregoing explanation, the solicitor general prays that the petition be dismissed for being premature.

After the filing of memoranda by the parties, petitioners filed an urgent motion, dated September 4, 1995, 7 for an early resolution of the case. To this motion, the Court responded with a Resolution, dated October 23, 1995, which ordered: 8

. . . Acting on the urgent motion for early resolution of the case dated 04 September 1995 filed by petitioner Erlinda Laburada herself, the Court resolved to require the Solicitor General to report to the Court in detail, within fifteen (15) days from receipt of this Resolution, what concrete and specific steps, if any, have been taken by respondent since 19 May 1993 (the date of respondent's Memorandum) to actually verify whether the lot subject of LRC Case No. N-11022 (Regional Trial Court of Pasig, Branch 68), described as Lot 3A, Psd-1372 and situated in Mandaluyong City, might be a portion of the parcels of land decreed in Court of Land Registration Case (CLR) Nos. 699, 875 and 917.

On December 29, 1995, the solicitor general submitted his compliance with the above resolution, to which was attached a letter, dated November 27, 1997, of Feline M. Cortez, chief of the LRA Ordinary and Cadastral Decree Division, which states: 9

With reference to your letter dated November 13, 1995, enclosed herewith is a copy of our letter dated 29 April 1992 addressed to Hon. Ramon S. Desuasido stating among others that Lot 3-B, of the subdivision plan Psd-1372, a portion of Lot 3, Blk. 159, Swo-7237 is really covered by Transfer Certificate of Title No. 29337 issued in the name of Pura Escurdia Vda. de Bunaflor [sic] which was transfer[ed] from Transfer Certificate of Title No. 6395, per verification of the records on file in the Register of Deeds of Rizal. However, the title issued for the subject lot, Lot 3-A of the subdivision plan Psd-1372, cannot be located because TCT #6595 is incomplete.

It was also informed [sic] that for this Authority to issue the corresponding decree of registration sought by the petitioners pursuant to the decision dated January 9, 1991 and order dated March 15, 1991, would result in the duplication of [the] title over the same parcel of land, and thus contravene the policy and purposes of the torrens registration system, and destroy the integrity of the same (O.R. No. 63189 Pedro K. San Jose vs. Hon. Eutropio Migriño, et. al.).

Hence, this case will be submitted to the Court for dismissal to avoid duplication of title over the same parcel of land.

Issue

Petitioners submit this lone issue: 10

Whether or not Respondent Land Registration Authority can be compelled to issue the corresponding decree in LRC Case No. N-11022 of the Regional Trial Court of Pasig, Branch LXVIII (68).

The Court's Ruling

The petition is not meritorious.

Sole Issue: Is Mandamus the Right Remedy?

Petitioners contend that mandamus is available in this case, for the LRA "unlawfully neglect[ed] the performance of an act which the laws specifically enjoins as a duty resulting from an office . . . ." They cite four reasons why the writ should be issued. First, petitioners claim that they have a "clear legal right to the act being prayed for and the LRA has the imperative duty to perform" because, as land registration is an in rem proceeding, the "jurisdictional requirement of notices and publication should be complied with." 11 Since there was no showing that the LRA filed an opposition in this proceeding, it cannot refuse to issue the corresponding decree. Second, it is not the duty of the LRA to "take the cudgels for the private persons in possession of OCT No. 355, TCT No. 29337 snf [sic] TCT No. 6595." Rather, it is the "sole concern of said private person-holders of said titles to institute in a separate but proper action whatever claim they may have against the property subject of petitioners' application for registration." Third, petitioners contend that they suffered from the delay in the issuance of their title, because of "the failure of the Register of Deeds of Pasig, Metro Manila to furnish LRA of [sic] the certified copies of TCT No. 29337 and TCT No. 6595" notwithstanding the lack of opposition from the holders of said titles. 12 Fourth, the State "consented to its being sued" in this case[;] thus, the legislature must recognize any judgment that may be rendered in this case "as final and make provision for its satisfaction." 13

On the other hand, the LRA, represented by the solicitor general, contends that the decision of the trial court is not valid, considering that "[the] Court of First Instance has no jurisdiction to decree again the registration of land already decreed in an earlier land registration case and [so] a second decree for the same land is null and void."14 On the question of whether the LRA can be compelled to issue a decree of registration, the solicitor general cites Ramos vs. Rodriguez 15 which held: 16

Nevertheless, even granting that procedural lapses have been committed in the proceedings below, these may be ignored by the Court in the interest of substantive justice. This is especially true when, as in this case, a strict adherence to the rules would result in a situation where the LRA would be compelled to issue a decree of registration over land which has already been decreed to and titled in the name of another.

It must be noted that petitioners failed to rebut the LRA report and only alleged that the title of the Payatas Estate was spurious, without offering any proof to substantiate this claim. TCT No. 8816, however, having been issued under the Torrens system, enjoys the conclusive presumption of validity. As we declared in an early case, "(t)he very purpose of the Torrens system would be destroyed if the same land may be subsequently brought under a second action for registration." The application for registration of the petitioners in this case would, under the circumstances, appear to be a collateral attack of TCT No. 8816 which is not allowed under Section 48 of P.D. 1529. (Emphasis supplied.)

We agree with the solicitor general. We hold that mandamus is not the proper remedy for three reasons.

First: Judgment Is Not Yet Executory

Contrary to the petitioners' allegations, the judgment they seek to enforce in this petition is not yet executory and incontrovertible under the Land Registration Law. That is, they do not have any clear legal right to implement it. We have unambiguously ruled that a judgment of registration does not become executory until after the expiration of one year after the entry of the final decree of registration. We explained this in Gomez vs. Court of Appeals: 17

It is not disputed that the decision dated 5 August 1981 had become final and executory. Petitioners vigorously maintain that said decision having become final, it may no longer be reopened, reviewed, much less, set aside. They anchor this claim on section 30 of P.D. No. 1529 (Property Registration Decree) which provides that, after judgment has become final and executory, the court shall forthwith issue an order to the Commissioner of Land Registration for the issuance of the decree of registration and certificate of title. Petitioners contend that section 30 should be read in relation to section 32 of P.D. 1529 in that, once the judgment becomes final and executory under section 30, the decree of registration must issue as a matter of course. This being the law,

petitioners assert, when respondent Judge set aside in his decision, dated 25 March 1985, the decision of 5 August 1981 and the order of 6 October 1981, he clearly acted without jurisdiction.

Petitioners' contention is not correct. Unlike ordinary civil actions, the adjudication of land in a cadastral or land registration proceeding does not become final, in the sense of incontrovertibility until after the expiration of one (1) year after the entry of the final decree of registration. This Court, in several decisions, has held that as long as a final decree has not been entered by the Land Registration Commission (now NLTDRA) and the period of one (1) year has not elapsed from date of entry of such decree, the title is not finally adjudicated and the decision in the registration proceeding continues to be under the control and sound discretion of the court rendering it.

Second: A Void Judgment Is Possible

That the LRA hesitates in issuing a decree of registration is understandable. Rather than a sign of negligence or nonfeasance in the performance of its duty, the LRA's reaction is reasonable, even imperative. Considering the probable duplication of titles over the same parcel of land, such issuance may contravene the policy and the purpose, and thereby destroy the integrity, of the Torrens system of registration.

In Ramos vs. Rodriguez, 18 this Court ruled that the LRA is mandated to refer to the trial court any doubt it may have in regard to the preparation and the issuance of a decree of registration. In this respect, LRA officials act not as administrative officials but as officers of said court, and their act is the act of the court. They are specifically called upon to "extend assistance to courts in ordinary and cadastral land registration proceedings."

True, land registration is an in rem proceeding and, therefore, the decree of registration is binding upon and conclusive against all persons including the government and its branches, irrespective of whether they were personally notified of the application for registration, and whether they filed an answer to said application. This stance of petitioners finds support in Sec. 38 of Act 496 which provides:

Sec. 38. If the court after hearing finds that the applicant or adverse claimant has title as stated in his application or adverse claim and proper

for registration, a decree of confirmation and registration shall be entered. Every decree of registration shall bind the land, and quiet title thereto, subject only to the exceptions stated in the following section. It shall be conclusive upon and against all persons, including the Insular Government and all the branches thereof, whether mentioned by name in the application, notice, or citation, or included in the general description "To all whom it may concern." Such decree shall not be opened by reason of the absence, infancy, or other disability of any person affected thereby, nor by any proceeding in any court for reversing judgments or decrees; subject, however, to the right of any person deprived of land or of any estate or interest therein by decree of registration obtained by fraud to file in the competent Court of First Instance a petition for review within one year after entry of the decree, provided no innocent purchaser for value has acquired an interest. Upon the expiration of said term of one year, every decree or certificate of title issued in accordance with this section shall be incontrovertible. If there is any such purchaser, the decree of registration shall not be opened, but shall remain in full force and effect forever, subject only to the right of appeal hereinbefore provided: Provided, however, That no decree or certificate of title issued to persons not parties to the appeal shall be cancelled or annulled. But any person aggrieved by such decree in any case may pursue his remedy by action for damages against the applicant or any other person for fraud in procuring the decree. Whenever the phrase "innocent purchaser for value" or an equivalent phrase occurs in this Act, it shall be deemed to include an innocent lessee, mortgagee, or other encumbrancer for value. (As amended by Sec. 3, Act No. 3621; and Sec. 1, Act No. 3630, and PD 1529, Sec. 39).

However, we must point out that the letters of Silverio G. Perez and Felino M. Cortez, dated April 29, 1992 and November 27, 1995, respectively, clearly stated that, after verification from the records submitted by the Registry of Deeds of Rizal, the property which petitioners are seeking to register — Lot 3-A of Subdivision Plan Psd-1372 — is a portion of Lot No. 3, Block 159, Plan S.W.O.-7237, over which TCT No. 6595 has already been issued. Upon the other hand, in regard to Lot 3-B of said Lot 3, TCT No. 29337 was issued in lieu of TCT No. 6595. Thus, the LRA's refusal to issue a decree of registration is based on documents which, if verified, may render the judgment of the trial court void.

It is settled that a land registration court has no jurisdiction to order the registration of land already decreed in the name of another in an earlier land registration case. A second decree for the same land would be null and void, 19since the principle behind original registration is to register a parcel of land

only once. 20 Thus, if it is proven that the land which petitioners are seeking to register has already been registered in 1904 and 1905, the issuance of a decree of registration to petitioners will run counter to said principle. As ruled in Duran vs. Olivia: 21

As the title of the respondents, who hold certificates of title under the Land Registration Act becomes indefeasible, it follows that the Court of First Instance has no power or jurisdiction to entertain proceedings for the registration of the same parcels of land covered by the certificates of title of the respondents. Such has been our express ruling in the case of Rojas, et al. v. The City of Tagaytay, et al., G.R. No. L-13333, prom. November 24, 1959, in which this Court, through Mr. Justice Barrera, said:

As thus viewed, the pivotal issue is one of jurisdiction on the part of the lower court. All the other contentions of respondent regarding possession in good faith, laches or claims of better right, while perhaps valid in an appropriate ordinary action, as to which we here express no opinion, can not avail in the case at bar if the court a quo, sitting as land registration court, had no jurisdiction over the subject matter in decreeing on June 30, 1957, the registration, in favor of respondent city, of a lot already previously decreed and registered in favor of the petitioners.

In a quite impressive line of decisions, it has been well-settled that a Court of First Instance has no jurisdiction to decree again the registration of land already decreed in an earlier land registration case and a second decree for the same land is null and void. This is so, because when once decreed by a court of competent jurisdiction, the title to the land thus determined is already a res judicata binding on the whole world, the proceedings being in rem. The court has no power in a subsequent proceeding (not based on fraud and within the statutory period) to adjudicate the same title in favor of another person. Furthermore, the registration of the property in the name of first registered owner in the Registration

Book is a standing notice to the world that said property is already registered in his name. Hence, the latter applicant is chargeable with notice that the land he applied for is already covered by a title so that he has no right whatsoever to apply for it. To declare the later title valid would defeat the very purpose of the Torrens system which is to quiet title to the property and guarantee its indefeasibility. It would undermine the faith and confidence of the people in the efficacy of the registration law.

Third: Issuance of a Decree Is Not a Ministerial Act

The issuance of a decree of registration is part of the judicial function of courts and is not a mere ministerial act which may be compelled through mandamus. Thus, this Court held in Valmonte and Jacinto vs. Nable: 22

Moreover, after the rendition of a decision by a registration or cadastral court, there remain many things to be done before the final decree can be issued, such as the preparation of amended plans and amended descriptions, especially where the decision orders a subdivision of a lot, the segregation therefrom of a portion being adjudicated to another party, to fit the said decision. As said by this Court in the case of De los Reyes vs. De Villa, 48 Phil., 227, 234:

Examining section 40, we find that the decrees of registration must be stated in convenient form for transcription upon the certificate of title and must contain an accurate technical description of the land. This requires trained technical men. Moreover, it frequently occurs that only portions of a parcel of land included in an application are ordered registered and that the limits of such portions can only be roughly indicated in the decision of the court. In such cases amendments of the plans and sometimes additional surveys become necessary before the final decree can be entered. That can hardly be done by the court itself; the law very wisely charges the chief surveyor of the General Land Registration Office with such duties (Administrative Code, section 177).

Furthermore, although the final decree is actually prepared by the Chief of the General Land Registration Office, the administrative officer, the issuance of the final decree can hardly be considered a ministerial act for the reason that said Chief of the General Land Registration Office acts not as an administrative officer but as an officer of the court and so the issuance of a final decree is a judicial function and not an administrative one (De los Reyes vs. De Villa, supra). . . . (Emphasis supplied.)

Indeed, it is well-settled that the issuance of such decree is not compellable by mandamus because it is a judicial act involving the exercise of discretion. 23 Likewise, the writ of mandamus can be awarded only when the petitioners' legal right to the performance of the particular act which is sought to be compelled is clear and complete. 24 Under Rule 65 of the Rules of Court, a clear legal right is a right which is indubitably granted by law or is inferable as a matter of law. If the right is clear and the case is meritorious, objections raising merely technical questions will be disregarded. 25 But where the right sought to be enforced is in substantial doubt or dispute, as in this case, mandamus cannot issue.

A court may be compelled by mandamus to pass and act upon a question submitted to it for decision, but it cannot be enjoined to decide for or against one of the parties. 26 As stated earlier, a judicial act is not compellable bymandamus. 27 The court has to decide a question according to its own judgment and understanding of the law. 28

In view of the foregoing, it is not legally proper to require the LRA to issue a decree of registration. However, to avoid multiplicity of suits and needless delay, this Court deems it more appropriate to direct the LRA to expedite its study, to determine with finality whether Lot 3-A is included in the property described in TCT No. 6595, and to submit a report thereon to the court of origin within sixty (60) days from receipt of this Decision, after which the said court shall act with deliberate speed according to the facts and the law, as herein discussed.

WHEREFORE, the petition is hereby DISMISSED but the case is REMANDED to the court of origin in Pasig City. The Land Registration Authority, on the other hand, is ORDERED to submit to the court a quo a report determining with finality whether Lot 3-A is included in the property described in TCT No. 6595, within sixty (60) days from notice. After receipt of such report, the land registration court, in turn, is ordered to ACT, with deliberate and judicious speed, to settle the issue of whether the LRA may issue the decree of registration, according to the facts and the law as herein discussed.

SO ORDERED.

Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ., concur.

CHAPTER 9

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-55152 August 19, 1986

FLORDELIZA L. VALISNO and HONORIO D. VALISNO, petitioners, vs.HON. JUDGE ANDRES B. PLAN, Presiding Judge of the Court of First Instance of Isabela, Second Branch, and VICENCIO CAYABA, respondents.

Francisco A. Lava, Jr. for petitioners.

Diosdado B. Ramirez for private respondent.

FERNAN, J.:

Challenged in this petition for certiorari with prayer for a temporary restraining order are two [2] orders issued by respondent judge in Land Registration Case No. Branch 11-N-204 of the then Court of First Instance of Isabela, Second Branch, entitled, "Application for Registration of Title, Vicencio Q. Cayaba, Applicant, vs. Flordeliza Valisno and Honorio D. Valisno, Oppositors," the order dated July 2, 1980, dismissing the opposition filed by petitioners on the ground of res judicata, and the order dated September 19, 1980, denying petitioners' motion for reconsideration.

The antecedents are as follows:

On August 21, 1964, petitioners-spouses Flordeliza and Honorio Valisno purchased from the legal heirs of Agapita V. Blanco, namely, Guillermo, Guillermo, Jr., Manuel and Rosario, all surnamed Blanco, two parcels of land, particularly described as follows:

[a] a tract of land situated at Sitio Sisim Barangay Cabaruan, Municipality of Cauayan, Province of Isabela, having an area of Five Thousand (5,000) square meters or fifty (50) meters facing the Provincial Road by one hundred (100) meters long; bounded on the North by Pedro del Rosario, on the South by Alberto Tungangui, on the East by the Provincial Road; and on the West, by Terreno del Estado, now Matias del Rosario;

and,

[c] a parcel of land situated in the Municipality of Cauayan, Province of Isabela, having an area of Six Thousand Two Hundred Fifty (6,250) square meters or fifty (50) meters at the east side by one hundred twenty-five (125) meters at the North and South; bounded on the north by Matias del Rosario, on the south by Alberto Tungangui, on the east by Agapita Blanco and on the west by Cauayan Diversion Road and Matias del Rosario. [Annex "B", Petition, pp. 41-42, Rollo.]

Thereafter, petitioners declared the above-described parcels of land in their name for taxation purposes and exercised exclusive possession thereof in the concept of owners by installing as caretaker one Fermin Lozano, who had his house built thereon.

On August 12, 1968, private respondent Vicencio Q. Cayaba, claiming to be the owner of the land in question by virtue of a deed of sale executed in his and one Bienvenido G. Noriega's favor on June 30, 1967 by the heirs of Dr. Epifanio Q. Verano, ousted Fermin Lozano from possession of the land. He subsequently erected a six-door apartment on said land.

On January 22, 1970, petitioners instituted before the then Court of First Instance of Isabela a complaint against private respondent for recovery of possession of said parcels of land. The case, docketed as Civil Case No. Branch II-895, was in due time resolved in favor of petitioners who were declared owners thereof. On appeal, however, by private respondent to the then Court of Appeals, the appeal being docketed as CA-G.R. No. 60142-R, the appellate court in a decision promulgated on January 19, 1978, reversed the decision of the lower court and dismissed the complaint of petitioners on a finding that:

Firstly, the 'land in question described in the complaint and sketched in Exhibit C ... by Dr. Guillermo Blanco,' is completely different from the land appearing in the Subdivision Plan of the appelles appellant, their respective area and boundaries being completely dissimilar.

Clearly, we fail to see anything in the evidence of the appellees showing that their property encroaches, much less covers that of the property presently occupied by the appellant, except the self-serving sketch prepared by the appellees' own witness, Dr. Blanco. We refuse to give any weight to this piece of evidence because it was prepared by someone who' has an incentive to exaggerate or give false color to his statement or to suppress or prevent the truth or to state what is false. [Deering v. Wisona Harvester Workers, 155 U.S. Sup. Ct. Rep. 238]

Therefore, as the land occupied by the appellant has not been successfully Identified with that described in the complaint, the instant action should have been dismissed outright, in view of the provision of Article 434 of the New Civil Code which reads.

Art. 434. In an action to recover, the property must be Identified, and the plaintiff must rely on the strength of his title and not on the weakness of the defendant's claim' as well as the doctrine enunciated in a long line of decision [sic] starting from Lim vs. Director of Lands, 64 Phil. 343.

Secondly, it is undisputed that the appellant is the present occupant of the land since he purchased the same from Tomasita F. Verano on June 30, 1967, having constructed a six-door apartment in the premises which he lets to both transients and residents of the locality. Being the actual possessor of the property, he, therefore, possesses it with a just title and he need not show or prove why he is possessing the same. [Arts. 433 and 541 of the New Civil Code].

Finally, between the evidence of the appellees and that of the appellant, We unhesitatingly choose the latter in the matter of Identifying the property in question because it is a vicinity plan [Exhibit "8"] showing the position of the land in relation not only to the properties adjoining the same but also with known

boundaries and landmarks in the area. On the other hand, the appellees' evidence, particularly the description in Tax Declaration No. 17009, is unreliable, since the area and boundaries of the property are mere estimations, reached thru pure guess-work. [Smith Bell & Co. vs. Director of Lands, 50 Phil. 8791]. Expressing the same sentiment, one noted authority states:

The proposition that in Identifying a particular piece of land its boundaries and not the area are the main factors to be considered holds true only when the boundaries given are sufficiently certain and the Identity of the land proved by the boundaries clearly indicates that an erroneous statement concerning the area can be disregarded.' [Bilog, Effective Judicial Implementation of Land and Forestry Laws, Fourth Advanced Course for Municipal Courts (1971), cit. Paterno v. Salud, L-15620, September 30, 19631. (Annex "C-l," Petition, pp. 5355, Rollo.]

A petition for review on certiorari of said decision filed by petitioners before this Court was denied due course.

Subsequently, on September 25, 1979, private respondent filed before the Court of First Instance of Isabela an application for registration in his name of the title of the lands in question, basing his entitlement thereto on the aforementioned deed of sale as well as the decision of the appellate court in CA-G.R. No. 60142-R, [Annex "A", Petition, pp. 32-40, Rollo).

On April 26, 1980, petitioners filed an opposition to the application. [Annex "B", Petition, p. 41, Rollo] Private respondent, however, moved for the dismissal of said opposition on the ground that the same is barred by a prior judgment, i.e., the appellate court's decision in CA-G.R. No. 60142-R. Despite the opposition of petitioners to said motion to dismiss, the lower court issued the first of the assailed orders dismissing the petitioner's opposition on the ground of res judicata. [Annex "E", Petition, p. 83, Rollo] When their motion for reconsideration was denied, petitioners filed the instant petition, raising as grounds therefor the following:

RESPONDENT JUDGE ERRED GRAVELY IN DISMISSING PETITIONERS' OPPOSITION TO RESPONDENTS' APPLICATION FOR REGISTRATION OF TITLE, WHICH IS HIGHLY IRREGULAR IN LAND REGISTRATION PROCEEDINGS.

RESPONDENT JUDGE ERRED GRAVELY IN DISREGARDING THE PRECEDENT OF ABELLERA VS. FAROL THAT RES JUDICATA CANNOT BE SET UP IN A LAND REGISTRATION CASE.

RESPONDENT JUDGE ERRED GRAVELY IN HOLDING THAT THE REQUISITES FOR RES JUDICATAEXIST IN THE CASE AT BAR, ASSUMING ARGUENDO THAT A MOTION TO DISMISS OPPOSITION IS PROPER IN A LAND REGISTRATION CASE, AND THAT RES JUDICATA MAYBE RAISED IN SAID MOTION TO DISMISS.

RESPONDENT JUDGE ERRED GRAVELY IN DEPRIVING PETITIONERS HEREIN OF THEIR DAY IN COURT, SPECIALLY IN THE FACE OF STRONG INDICATIONS, ALREADY IN THE RECORD, THAT RESPONDENT CAYABA IS ACTUALLY TRYING TO SECURE TITLE TO WHAT REALLY IN THE LAND OF THE PETITIONERS.

RESPONDENT JUDGE ERRED GRAVELY, WITH GRAVE ABUSE OF DISCRETION AND IN EXCESS OF JURISDICTION IN ISSUING HIS ORDERS OF JULY 2,1980 [ANNEX "E"] AND SEPTEMBER 19, 1980 [ANNEX "H"]. (pp. 18-19, Rollo)

On April 1, 1981, this Court gave due course to the petition and required the parties to file their briefs. Petitioners did so on August 26, 1981. Private respondent, on the other hand, failed to file his brief within the given period which expired on October 9, 1981. Thus, the case was consider submitted for decision without the brief of private respondent.

On July 8, 1985, this Court received a copy of the motion to amend application filed by Bienvenido G. Noriega, Sr., thru counsel, in LRC Case No. Br. II-N-204, praying that he be included as co-applicant to the land sought to be registered.

In the course of our study of pertinent jurisprudence, We observe that the situation obtaining in the case at bar, i.e., a motion to dismiss the opposition having been filed and more importantly, granted, is indeed unique and peculiar. But while this may be so, it is not highly irregular as petitioners would characterize it.

Verily, the Land Registration Act [Act 496] does not provide for a pleading similar or corresponding to a motion to dismiss. Rule 132 of the Rules of Court, however, allows the application of the rules contained therein in land registration

proceedings in a suppletory character or whenever practicable and convenient. Thus, for the expeditious termination of the land registration case, this Court in Duran v. Oliva, 3 SCRA 154, sustained the dismissal of the application for registration of therein appellants upon a motion to dismiss filed by five [5] oppositors, it having been indubitably shown that the court a quo did not have jurisdiction over the res as the lands sought to be registered in appellants' name had previously been registered in the names of the oppositors. To have allowed the registration proceeding to run its usual course would have been a mere exercise in futility. The same consideration applies to the case at bar.

It must be noted that the opposition partakes of the nature of an answer with a counterclaim. In ordinary civil cases, the counterclaim would be considered a complaint, this time with the original defendant becoming the plaintiff. The original plaintiff, who becomes defendant in the counterclaim may either then answer the counterclaim or be declared in default, or may file a motion to dismiss the same. The latter choice was what respondent Cayaba opted for. Although as We have earlier said, such situation rarely, if ever, happens in land registration cases, the irregularity that petitioners complain of stems basically from the infrequent use of a motion to dismiss in land registration cases, and not from it being unauthorize.

The case of Abellera vs. Farol 74 Phil. 284, heavily relied upon by petitioners needs re-evaluation. In said case, Mr. Justice Bocobo, speaking for the Court, ruled that "while in a cadastral case, res judicata is available to a claimant in order to defeat the alleged rights of another claimant, nevertheless, prior judgment can not be set up in a motion to dismiss. " Concurring in said opinion were then Chief Justice Yulo and Associate Justices Moran and Ozaeta. Mr. Justice Paras dissented, saying "in my opinion, Rule 132 in connection with Rule 8 of the Rules of Court, instead of prohibiting expressly authorizes the lower court in land registration or cadastral proceedings to entertain a motion for dismissal on the ground of res judicata or prescription. Of course, the dismissal of petitioner's claim will not necessarily or automatically mean adjudication of title to the individual respondents but it will certainly facilitate the consideration of their claims which cease to be contested. Prompt disposal of cases or such claims is the main purpose of said rules. Let there be no retrogression in the application of sound rules and doctrines." [Ibid, pp. 286-287) In support of his opinion, Justice Paras cited the cases of Menor v. Quintana, 56 Phil. 657, Versoza v. Nicolas, 29 Phil. 425 and Santiago v. Santos, 54 Phil. 619, wherein the Court invariably ruled that a "final judgment in an ordinary civil case determining the ownership of certain land is res judicata in a registration case when the parties and the property are the same as in the former case. " [Menor v. Quintana,supra.]

There is no doubt that the principle of res judicata operates in the case at bar. For said principle to apply: [a] the former judgment must be final, [b] it must have been' rendered by a court having jurisdiction of the subject matter and of the parties, [c] it must be a judgment on the merits and [d] there must be between the first and second actions identity of parties, of subject matter and of cause of action. [Carandang v. Venturanza, 133 SCRA 344] The decision in CA-G. R. No. 60142-R is a final judgment on the merits rendered by a court which had jurisdiction over the subject matter and the parties. There is, between the registration case under consideration and the previous civil action for recovery of property, identity of parties, subject matter and cause of action. The inclusion of private respondent Cayaba's co-owner, Bienvenido Noriega, Sr., in the application for registration does not result in a difference in parties between the two cases. One right of a co-owner is to defend in court the interests of the co-ownership. [Paras, Civil Code of the Philippines, Annotated, Vol. II, 7th Edition, p. 258] Thus, when private respondent Cayaba defended his ownership over the land in question, he was doing so in behalf of the co-ownership. This is evident from the fact that one of the evidence he presented to prove ownership was the deed of sale executed by the heirs of Dr. Epifanio Q. Verano is his and Bienvenido Noriega's favor.

With respect to the subject matter, there can be no question that the land sought to be recovered by petitioners are the very same parcels of land being sought to be registered in Cayaba's and Noriega's names.

While the complaint in the first action is captioned for recovery of possession, the allegations and the prayer for relief therein raise the issue of ownership. In effect, it is in the nature of an accion reinvidicatoria. The second case is for registration of title. Consequently, between the two cases there is identity of causes of action because in accion reinvidicatoria, possession is sought on the basis of ownership and the same is true in registration cases. Registration of title in one's name is based on ownership. In both cases, the plaintiff and the applicant seek to exclude other persons from ownership of the land in question. The only difference is that in the former case, the exclusion is directed against particular persons, while in the latter proceedings, the exclusion is directed against the whole world. Nonetheless, the cause of action remains the same. In fact, this Court held in Dais v. Court of First Instance of Capiz, [51 Phil. 896] that the answers in a cadastral proceedings partake of an action to recover title, as real rights are involved therein. It is only the form of action which is different. "But the employment of two different forms of action, does not enable one to escape the operation of the principle that one and the same cause of action shall not be twice litigated." [Yusingco v. Ong Hing Lian, 42 SCRA 590 and the cases cited therein, Gonzales v. Gonzales, 26 SCRA 76; Aguilar v. Tuason Co., 22 SCRA 690; Albano v. Coloma, 21 SCRA 411; Sumarariz v. Development Bank of the Phil., 21 SCRA 1378; Abes, et al. v. Rodil, et al., 17 SCRA

824; Cayco, et al. v. Cruz et al., 106 Phil. 68; Ma. Garcia de Lim Toco v. Go Pay, 81 Phil. 258; San Diego v. Cardona, et al., 70 Phil. 281].

It does not matter that the first case was decided by a court of general jurisdiction, while the second case is being heard by one of a limited jurisdiction, such as a registration court. It is enough that the court which decided the first case on the merits had validly acquired jurisdiction over the subject matter and the parties. That both courts should have equal jurisdiction is not a requisite of res judicata.

If, as the Abellera case, supra, held that res judicata can be set up by a claimant to defeat the alleged right of another claimant, what useful purpose would be served by allowing a party to present evidence of ownership over the land sought to be registered when the final result would necessarily be in favor of the claimant who had set up the defense of res judicata? And supposing the land registration court finds that the party against whom the principle of res judicata operates does have a better right or title to the land, what happens to the principle of res judicata? Can a court sitting as a land registration court in effect, annul a final judgment of another court of general jurisdiction?

To our mind, therefore, the better policy, both for practicality and convenience, is to grant the dismissal of either the application for registration or the opposition thereto, once it has been indubitably shown, as in the case at bar, that one or the other is barred by a prior judgment. The ruling in the Abellera case, should therefore be, as it is, hereby abandoned.

Petitioners complain that by dismissing their opposition, respondent court had denied them their day in court. It is well to remind petitioners that they had their day in court in Civil Case No. Branch II-895 as well as CA-G.R. No. 60142-R, where their claim over the land in question was fully aired and ventilated.

The conflicting claims of petitioners and respondent Cayaba [in behalf of the co-ownership] with respect to the land under consideration had been put to rest in CA-G.R. No. 60142-R. Said decision having attained finality, the same remains the law of the case between the parties.

Finding no error to have been committed by respondent judge in dismissing petitioners' opposition, such dismissal must be affirmed.

WHEREFORE, the instant petition is hereby dismissed. Cost against petitioners..

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-66242 August 31, 1984

HEIRS OF CORNELIO LABRADA represented by NATIVIDAD L. DIOCTON, petitioner, vs.THE HONORABLE SINFORIANO A. MONSANTO, in his capacity as Presiding Judge, Regional Trial Court, Branch XXVII, Catbalogan, Samar, and the HEIRS OF ISABEL YBOA, represented by Tito V. Tizon,respondents.

Mateo Leanda for petitioner.

Tito V. Tizon for private respondent.

TEEHANKEE, Acting C.J.:

The procedural issue at bar is whether an appeal by a conflicting claimant to a specific lot of cadastral survey proceedings from the adverse decision of the regional trial court in favor of another conflicting claimant may be taken by filing a simple notice of appeal within the reglementary 15-day period, as provided in the Interim Rules and Guidelines relative to the implementation of the Judiciary Reorganization Act of 1981 (Batas Pambansa Blg. 129), adopted by the Supreme Court on January 11, 1983. Or does such appeal fall within the exception provided by the same interim rules for special proceedings under Rule 109 of the Rules of Court and other cases wherein multiple appeals are allowed, in which case an appeal must still be filed by the filing of a record on appeal within a period of 30 days provided for the purpose. The Court rules that appeals in cadastral proceedings may be taken by a simple notice of appeal.

The lot involved is Lot No. 1910 of the Catbalogan Cadastral Survey. It is contested by the claimants, petitioners-heirs of Cornelio Labrada, on one hand, and by respondents-heirs of Isabel Yboa on the other. Said predecessors-in-interest had filed their respective answers in the cadastral proceedings in June, 1932.

Petitioners thus state their claim to the lot, as follows: "Cornelio Labrada who had previously deforested the area which is now the disputed Lot No. 1910, had already been in continuous possession of said lot for more than forty-three (43) years when he filed his answer in 1932, or at least from 1894; and that he continued his possession until 1943 when he died. His son, Meliton, succeeded in possessing the land. Immediately after his demise, Meliton Labrada was succeeded in the possession of said land until he himself died sometime in 1976; and that subsequent thereto, possession of the property in issue passed to Meliton's direct heirs, who until the present are still in possession thereof, (Decision, p.1 ). None of the heirs of Isabel Iboa is in possession of any portion of the questioned lot." 1 Petitioners had moved in 1973 for the case to be heard by the now defunct Court of First Instance of Samar. The conflicting parties presented both their oral and documentary evidence in support of their respective claims over the lot. On July 11, 1983, the respondent regional trial court rendered its decision in favor of respondents-claimants. Within 2 days from receipt of the adverse decision, petitioners filed their appeal on August 6, 1983 by filing a notice of appeal with a prayer that the records be elevated to the Intermediate Appellate Court, pursuant to the new Interim Rules of Court. Over a month later, on September 14, 1983, respondents-claimants filed their motion for the issuance of a decree contending that petitioners had failed to perfect their appeal because they failed to file a record on appeal. Respondent court granted respondents' motion for the issuance of a decree on the theory that an appeal taken in a cadastral case involves "multiple appeals," for which the filing of the record on appeal was required. The decree for the registration was accordingly ordered by respondent court. Petitioners' motion for reconsideration having failed, they have now filed the petition at bar for the setting aside of respondent court's questioned orders denying due course to their appeal and ordering the issuance of a decree of registration on the lot in question in favor of respondents.

The pertinent provisions of Appellate Procedure on appeals are contained in sections 18 and 19 of the Interim Rules and Guidelines, as follows:

18. Elimination of record on appeal and appeal bond. — The filing of a record on appeal shall be dispensed with, except in the cases referred to in sub-paragraph (b) of paragraph 19 hereof.

No appeal bond shall be required for an appeal.

19. Period of Appeal. —

(a) All appeals, except in habeas corpus cases and in the cases referred to in paragraph (b) hereof, must be taken within fifteen (15) days from notice of the judgment, order, resolution or award appealed from.

(b) In appeals in special proceedings in accordance with Rule 109 of the Rules of Court and other cases wherein multiple appeals are allowed, the period of appeal shall be thirty (30) days, a record of appeal being required.

These rules were issued pursuant to the provisions of Batas Pambansa Blg. 129, particularly section 39 thereof which provides for a 15-day period within which to take an appeal and expressly abolished the need of a record on appeal, as follows:

SEC. 39. Appeals. — The period for appeal from final orders, resolutions, awards, judgments or decisions of any court in all cases shall be fifteen days counted from the notice of the final order, resolution, award, judgment, or decision appealed from.

No record on appeal shall be required to take an appeal. In lieu therefor, the entire original record shall be transmitted with all the pages prominently numbered consecutively, together with an index of the contents thereof.

The appeal sought to be taken in the petition at bar concerning conflicting claims of the parties to a specific lot clearly falls under this general rule. Therefore, petitioners' appeal must be given due course and the issuance of a decree of registration and the corresponding certificate of title were prematurely and baselessly ordered by respondent court and must be set aside. All that respondent trial court had to do was to transmit the original record consisting of the pleadings of the parties and its decision and orders, which petitioners have in effect so elevated with their petition at bar as per Annexes "A" to "I" of their petition, 2 together with the transcripts and exhibits. 3

It must not be lost sight of that the basic objective of this innovative Rule which dispenses with the filing of a record on appeal and the filing of an appeal bond was and is to simplify appellate court procedure by doing away with the tedious and expensive requirement of reproducing practically the entire original record of the case in the record on appeal in the trial court. This old requirement of a record on appeal by itself laid the appellate procedure open to a number of dilatory and

vexing questions of clerical errors and claims of omitted pleadings and orders which in tum required the filing of an amended record on appeal. Such record on appeal under the Rules still had to be printed, mimeographed or typed in 12 copies resulting many times in typographical errors 4 and adding needless expense and additional burden on litigants. Thus, have the legislators and the Court sought to simplify the rules to assist the parties in obtaining just, expeditious and inexpensive determination of every court case, as well as decongesting judicial dockets.

The exceptions must be strictly construed. The Court provided for specific exceptions with respect to "appeals in special proceedings in accordance with Rule 109 of the Rules of Court," wherein multiple appeals at different stages of the case are allowed such as when the order or judgment on appeal refers to: (a) the allowance or disallowance of a will, (b) determination of the lawful heirs of a deceased person or their distributive shares in the estate; (c) the allowance or disallowance, in whole or in part, of any claim against the estate or any claim presented on behalf of the estate in offset to a claim against it; (d) the settlement of the accounts of an executor, administrator, trustee or guardian; (e) a final determination in the lower court of the rights of the party appealing in proceedings relating to settlement of the estate of a deceased person or the administration of a trustee or guardian; and (f) the final order or judgment rendered in the case. In these cases, therefore, since the original record has to remain with the probate court in connection with the other various pending matters, a party appealing from a specific order is required to file the corresponding record on appeal.

This is not the case in cadastral proceedings. Cadastral proceedings involve contest over specific lots which may be claimed by parties who have timely filed their respective answers, failing which the land is declared to belong to the State. In all such cases of contested lots, records may readily be kept of each lot or lots so contested by the same parties and the State, and given a separate sub-number corresponding to each contested lot. Upon the trial court's rendering of its judgment as to such specific lot(s), then the original records pertaining to such lot(s) may be readily elevated, leaving with the lower court the records or pleadings referring to disputed lots not covered by said court's adjudication. In this particular cadastral proceeding, as stated by respondent court itself in its questioned order, there remain only "around 8 contested ones [lots] which have not yet been adjudicated not counting the 180 lots which were 'archived' by a predecessor of the presiding judge." 5 This readily shows the lack of any difficulty to keep separate records for specific lots claimed by conflicting parties, and elevating only the particular record for the specific lot, subject of judgment and appeal.

ACCORDINGLY, the petition is granted. Dispensing with briefs or memoranda, judgment is hereby rendered (a) setting aside the questioned orders which denied due course to petitioners' appeal and ordered the issuance of a decree of registration; (b) annulling any certificate of title which may have been issued to respondents pursuant thereto; and (c) ordering respondent court to give due course to petitioners' appeal from its decision of July 11, 1983 and to transmit to the Intermediate Appellate Court the records of the case pertaining to the disputed Lot No. 1910 of the Catbalogan Cadastral survey, together with the oral and documentary evidence as hereinabove indicated. No costs.

Melencio-Herrera, Plana, Relova, Gutierrez, Jr. and De la Fuente, JJ., concur.

CHAPTER 10

Republic of the PhilippinesSUPREME COURTManila

THIRD DIVISION

G.R. No. 141145 November 12, 2004

REPUBLIC OF THE PHILIPPINES (REPRESENTED BY THE LAND REGISTRATION COMMISSIONER), petitioner, vs.WILSON P. ORFINADA, SR. and LUCRESIA K. ORFINADA, respondents.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

Before us is the instant petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Joint Decision1 dated December 13, 1999 rendered by the Court of Appeals in CA-G.R. CV No. 32815, "Republic of the Philippines (represented by the Land Registration Commissioner) vs. Wilson P. Orfinada, Sr., Lucresia K. Orfinada and the Register of Deeds of Pasay City," and CA-G.R. CV No. 35230, ISIA vs. Enrique Factor and Pilar Development Corporation."

On May 8, 1985, the Republic of the Philippines, petitioner, represented by the Land Registration Commissioner, filed with the Regional Trial Court (RTC), Branch 113, Pasay City, a complaint for annulment of title, docketed as Civil Case No. 2846-P. Impleaded as defendants were spouses Wilson and Lucresia Orfinada, respondents, and the Register of Deeds of Pasay City.

The complaint alleges that Transfer Certificate of Title (T.C.T.) No. 38910-A issued by the Register of Deeds of Pasig, Rizal, now Pasig City, on September 18, 1956, in the names of respondents, is spurious as shown by the following:

1. Respondents obtained T.C.T. No. 38910 by making it appear that it originated from Original Certificate of Title (O.C.T.) No. 383 in the name of Guillermo Cruz. However, O.C.T. No. 383 was actually issued and registered in the name of Paulino Cruz. This O.C.T. was pursuant to Free Patent No. 38910 issued by the Governor General of the Philippine Islands on March 17, 1932 covering a parcel of land described in Plan F-44878 situated in Barrio Sampaloc, Tanay, Rizal, with an area of 22.8387 hectares.

2. On "its face," T.C.T. No. 38910-A in respondents’ names was derived from O.C.T. No. 383 registered in the name of Guillermo Cruz. This O.C.T. was based on a Free Patent granted by the President of the Philippines on May 12, 1935. The land covered by this Free Patent is located at Barrio Tanay, Almanza, Las Piñas, Rizal, (now Las Piñas City) consisting of 22.1688 hectares. But this Free Patent was issued by the President of the Philippines on May 12, 1935 under Commonwealth Act (C.A.), No. 141, otherwise known as the Public Land Act. This Act took effect only on November 7, 1936. Hence, no Free Patent could have been issued by the President prior to such date, specifically on May 12, 1935.

In their answer, respondents claimed that they purchased their land from Guillermo Cruz on June 7, 1955. The corresponding Deed of Sale was duly registered in the Registry of Deeds of Pasig, Rizal and annotated at the back of O.C.T. No. 383 in the name of Guillermo Cruz. This O.C.T. was cancelled and in lieu thereof, T.C.T. No. 38910-A was issued in their names.

Contrary to petitioner’s allegations, the Free Patent granted by the President of the Philippines in favor of Guillermo Cruz was issued on May 12, 1937, not May 12, 1935. This Free Patent covers a parcel of land described in Plan F-48390 consisting of 21.1688 hectares situated in Barrio Almanza, Las Piñas, Rizal (now Las Piñas City). On the basis of this Free Patent, O.C.T. No. 383 was issued to Guillermo Cruz on August 22, 1937. On the same day, this title was registered in the Registration Book of the Registry of Deeds of Pasig, Rizal, appearing on p. 84, Volume I-A.

Both O.C. T. No. 383 in the name of Guillermo Cruz and its derivative title - T.C.T. No. 38910-A, in the names of respondents, are intact and in the files of the Registry of Deeds of Pasig. Due to the decentralization of this Office, T.C.T. No. 38910-A was one of those transferred to the Registry of Deeds of Pasay City which was given a new number – T.C.T. No. 13674-A, and then to the Registry of Deeds of Las Piñas. Eventually, or on May 19, 1981, they (respondents) sold the land to the Insurance Savings and Investment Agency (ISIA).

Meantime, ISIA, being the new owner of the same parcel of land, filed with the RTC of Makati, Branch 143, a complaint for recovery of the subject property against Enrique Factor and Pilar Development Corporation, docketed as Civil Case No. 2262. In due course, the RTC rendered a Decision dated February 23, 1989 in favor of ISIA, ordering the defendants to vacate the land. The defendants then interposed an appeal to the Court of Appeals, docketed as CA-G.R. CV No. 35230.

Going back to Civil Case No. 2846-P filed by the petitioner against respondents, on January 25, 1991, the RTC of Pasay City, Branch 113, rendered its Decision dismissing the complaint, "there being no competent evidence" to prove the allegations therein. In disposing of the case, the trial court held:

"Deliberating on the evidence as completely and clearly narrated/illustrated above, it is overwhelmingly indisputable and certain that Transfer Certificate of Title No. (38910-A) 13674-A of the Registry of Deeds of Las Piñas (Exh. DD; Exh. 27) in the name of Wilson P. Orfinada, Sr., married to Lucresia K. Orfinada was duly issued on September 18, 1956, the same being a direct transfer from Original Certificate of Title No. 383 (Exh. 65; Exh. K) in the name of Guillermo Cruz, pursuant to a Free Patent issued by the President of the Philippines on May 12, 1937. The aforesaid Transfer Certificate of Title was transferred to the Register of Deeds of Pasay from the Register of Deeds of Pasig, Rizal, then from Pasay City to Las Piñas. (Exh. 27).

"It is no less significant to mention that the defendants were in possession of the property for twenty-nine (29) years already at the time when this complaint for annulment of title was filed on May 8, 1985. The possession can be characterized as continuous, actual, public and adverse possession as established with competent evidence testimonial and documentary. Undeniably, twenty-nine (29) years of possession is more than the requirement for acquiring land under the possessory information (See Republic vs. C.A., 161 SCRA 368). The required number of years is only twenty (20) years.

"With precision and clarity, the land in question is registered under the Torrens System. Under this system title of the defendants is made binding against the whole world, including the government, (NGA vs. I.A.C., 157 SCRA 380) as soon as the deed of transfer shall have been presented and registered in the office of the Register of Deeds. Importantly, the principle is that it is the act of registration that operates to transfer the title to the land. And to facilitate registration under this

system, the government provides to the owner a Torrens Certificate of Title which is submitted for cancellation when the property is transferred to another person who will then be entitled to the issuance of the new Torrens Title.

x x x

"Evidently, the Deed of Absolute Sale (Exh. 2-Orfinada) executed by Guillermo Cruz in favor of Wilson F. Orfinada, was duly registered with the Register of Deeds of Pasig, Rizal, wherein it was annotated at the back of Original Certificate of Title 383 in the name of Guillermo Cruz (Exh. K; Exh. 65), and said OCT was cancelled and in lieu thereof the Pasig Register of Deeds issued Transfer Certificate of Title No. 38910-A in the name of Wilson P. Orfinada on September 18, 1956 (Exh. M).

"Jurisprudentially, the main purpose of the Torrens System is to avoid conflicts of title in and to real estate, and to facilitate transactions relative thereto by giving the public the right to rely upon the fact of a Torrens Certificate of Title and to dispense with the need of inquiring further except when the party concerned has actual knowledge of facts and circumstances that should impel a reasonably cautious man to make such further inquiry (Capitol Subdivision, Inc. vs. Province of Negros Occidental, 7 SCRA 60; Pascua vs. Copuyoc, 77 SCRA 78).

Clear enough, from the culled evidence the defendants just purchased the property in question when the same was offered to them without inquiring further and firmly relied upon the fact of the Original Certificate of Title in the name of Guillermo Cruz (Exh. K; Exh. 65) and after the perfection of the sale in favor of the defendants that deed of sale was registered with the Registry of Deeds of Pasig, Rizal and the corresponding Transfer Certificate of Title No. 38910-A (Exh. M) was issued in the name of the defendants. Rightfully, they being innocent purchasers in good faith and for value, the posture of these defendants would certainly prevail for it was tersely said by the Honorable Supreme Court in the case of Fule vs. Lagare, 7 SCRA 351:

‘A purchaser in good faith is one who buys property of another without notice, that some other person has a right to, or interest in such property and pays a full and fair price for the same, at the time of such purchase, or before he has notice of the claim or interest of some other persons in the property.’

"The assertion of plaintiff that the land in question lies in Sampaloc, Tanay, Rizal has not been established with competent evidence. The fact remains that the land lies in Bo. Almanza, Las Piñas and actually in the possession of defendants. The plaintiff was so dependent on the LRA Verification Committee (Exh. A) – giving a conclusion that the title of Wilson P. Orfinada is fake and spurious. To the mind of the Court, said report is tenuous, uncorroborated and unsubstantiated.

"Between the Deed of Absolute Sale (Exh. 2) and the verification report (Exh. A) which the plaintiff was firmly dependent in its cause of action, the former has to be sustained. The reason being that ‘a notarial document is evidence of the facts in clear unequivocal manner therein expressed. It has in its favor the presumption of regularity. To contradict all these, there must be evidence that is clear, convincing and more than merely preponderant.’ (Ytuirralde vs. Aganon, 28 SCRA 407; Cabrera vs. Villanueva, 160 SCRA 672; Dy vs. Sacay, 165 SCRA 473). And anent the title of the defendants, TCT No. (38910-A) 13674-A, to assert that it is fake and spurious it has to be supported by strong and compelling evidence that it is so. In reliance to the case of Legaspi vs. C.A., the Honorable Supreme Court said: ‘The evidentiary nature of public document must be sustained in the absence of strong, complete and conclusive proof of its falsity or nullity.’

"Finally, ‘the annulment of a registration under the Torrens System should be made with the utmost caution, to maintain the integrity of titles secured thereunder.’ (Cabrera vs. C.A., 163 SCRA 214)."

Petitioner Republic appealed from the above Decision to the Court of Appeals, docketed as CA-G.R. CV No. 32815.

Later, upon motion of ISIA, the Appellate Court ordered the consolidation of CA-G.R. CV No. 35330 (filed by ISIA) and CA-G.R. CV No. 32815 (filed by petitioner).

On December 13, 1999, the Court of Appeals promulgated the assailed Joint Decision affirming in toto the Decisions of the RTC of Makati, Branch 143 in Civil Case No. 2262 and RTC of Pasay City, Branch 113 in Civil Case No. 2846-P, thus:

"WHEREFORE, PREMISES CONSIDERED,

1) The decision of the Regional Trial Court of Makati, Branch 143, in Civil Case No. 2262 dated February 23, 1989 is hereby AFFIRMED in toto. Costs against appellant.

2) The decision of the Regional Trial Court of Pasay City, Branch 113, in Civil Case No. 2846-P dated January 25, 1991 dismissing plaintiff-appellant’s complaint is likewise AFFIRMED in toto. No costs.

SO ORDERED."

Petitioner, in the instant petition, ascribes to the Court of Appeals the following errors:

"1. The Court of Appeals grossly erred and acted under a misapprehension of facts in ruling that the title of the Orfinadas is valid.

2. The Court of Appeals likewise erred when it did not consider that the Torrens System is not a means of acquiring lands but merely a system for registration of title."

In their comment, respondents contend that factual findings of the Court of Appeals are binding on this Court. Considering that the issues raised in the petition are factual, this Court may no longer review the assailed Joint Decision.

Obviously, petitioner here, in its first assigned error, is raising factual issues. Time and again, we had occasion to rule that only questions of law may be raised in a petition for review on certiorari filed with this Court. Moreover, factual findings of the trials courts, when adopted and confirmed by the Court of Appeals, are final and conclusive on this Court,2 but there are exceptions.

In Go vs. Court of Appeals,3 we held that:

"[I]n Reyes v. Court of Appeals, this Court held that factual findings of the trial court, when adopted and confirmed by the Court of Appeals, are final and conclusive and may not be reviewed on appeal; except: (1) when the inference made is manifestly mistaken, absurd or impossible; (2) when there is a grave abuse of discretion; (3) when the finding is grounded entirely on speculations, surmises or conjectures; (4) when the judgment of the Court of Appeals is based on misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of

Appeals, in making its findings, went beyond the issues of the case and the same are contrary to the admissions of both appellant and appellee; (7) when the findings of the Court of Appeals are contrary to those of the trial court; (8) when the findings of fact are conclusions without citation of specific evidence on which they are based; (9) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion; and (10) when the findings of fact of the Court of Appeals are premised on the absence of evidence and are contradicted by the evidence on record."

Petitioner, in filing this petition, is invoking one of the exceptions mentioned above, i.e., when the judgment of the Court of Appeals is based on misapprehension of facts. We, therefore, opt to evaluate the evidence of both parties on the basis of the old and cold records before us.

The basic issue for our resolution is whether petitioner has proved by preponderance of evidence that T.C.T. No. 38910-A in the names of respondents is spurious.

"In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence. ‘Preponderance of evidence’ is the weight, credit, and value of the aggregate evidence on either side and is usually considered to be synonymous with the term ‘greater weight of the evidence’ or ‘greater weight of the credible evidence.’ Preponderance of evidence is a phrase which, in the last analysis, means probability of the truth. It is evidence which is more convincing to the court as worthy of belief than that which is offered in opposition thereto. Section 1, Rule 133 of the Revised Rules of Court provides the guidelines in determining preponderance of evidence, thus:

"In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence. In determining where the preponderance or superior weight of evidence on the issues involved lies, the court may consider all the facts and circumstances of the case, the witnesses’ manner of testifying, their intelligence, their means and opportunity of knowing the facts to which they are testifying, the nature of the facts to which they testify, the probability or improbability of their testimony, their interest or want of interest, and also their personal credibility so far as the same legitimately appear upon the trial. The court may also consider the number of witnesses, though the preponderance is not necessarily with the greater number."4

Evidence for petitioner shows that on October 21, 1981, the Director of the Bureau of Lands (now Land Management Bureau) wrote the Administrator of the Land Registration Commission (now Land Registration Authority) pointing to the dubiousness of T.C.T. No. 38910-A in the names of respondents. The Land Registration Commission then formed a Committee to conduct an investigation.

Thereafter, the Committee submitted to the Director of Lands its Verification Report and Supplementary Report which disclose the following:

In his letters dated October 9 and November 15, 1981, pursuant to the directive of the Committee, Atty. Ramon Manalastas, then Acting Register of Deeds of Pasig, informed the said Committee that O.C.T. No. 383 in the name of Paulino Cruz "is no longer available." However, his office has in its files a "certified copy" of Free Patent No. 13409 in the name of Paulino Cruz issued by Governor General Theodore Roosevelt on March 17, 1932 covering a parcel of land in Barrio Sampaloc, Tanay, Rizal, with an area of "22 hectares." Pursuant to this Free Patent, O.C.T. No. 383 was issued in the name of Paulino Cruz by the same Registry of Deeds. T.C.T No. 38910 derived therefrom is in the name of Marina Cruz Vda. De San Jose, not in the names of respondents.

On the basis of Atty. Manalatas’ letters, the Committee concluded that T.C.T. No. 38910-A could not have been issued in the names of respondents and, therefore, the same is "manufactured and spurious."

The Committee compared the data appearing on Free Patent No. 13409 in the name of Paulino Cruz with those of T.C.T. No. 38910-A in respondents’ names (derived from O.C.T. No. 383 in the name of Guillermo Cruz) and found that Free Patent No. 13409 was issued by Governor General Theodore Roosevelt on March 17, 1932. It embraces a parcel of land in Barrio Sampaloc, Tanay, Rizal. Whereas, the Free Patent on the basis of which O.C.T. No. 383 was issued in the name of Guillermo Cruz (from which T.C.T No. 38910-A originated), was granted on May 12, 1935 by the President pursuant to C.A. 141 (Public Land Act), which law was not yet enacted at that time. It took effect only on November 7, 1936.

The Committee Reports further state that, "We therefore presume that the description of the land covered by O.C.T. No. 383 should be the same as what appears on Free Patent No. 13409 in the name of Paulino Cruz."

Petitioner, in contending that T.C.T. No. 38910-A in the names of respondents is a nullity asserts that (a) the latter derived their title fraudulently from O.C.T. No. 383

in the name of Paulino Cruz, based on Free Patent No. 13409; and (b) that O.C.T. No. 383 in the name of their predecessor-in-interest, Guillermo Cruz, is not authentic since the Free Patent on which it was based could not have been issued on May 12, 1935 considering that the governing law, C.A. 141 (Public Land Act), took effect only on November 7, 1936.

Evidence for respondents shows that Atty. Modesto Jimenez, their attorney-in-fact, was able to secure a certified true copy of O.C.T. No. 383 in the name of Guillermo Cruz from the Registry of Deeds of Pasig. He paid the corresponding fee under O.R. No. 9614248.5

One time, he went to the same Registry of Deeds to ask for the cancellation of the entry of a mortgage contract an encumbrance appearing at the back page of the original copy of T.C.T. No. 38910-A in the names of respondents. He came to know that the original copy of the title was transferred by the Registry of Deeds of Pasig to the Registry of Deeds of Pasay City. So he proceeded there and upon his request, Atty. Victoriano Torres, the Register of Deeds of Pasay City, had the entry of encumbrance canceled. Atty. Jimenez also learned that the original copy of T.C.T. No. 38910-A was given a new title number by the said Register of Deeds which is T.C.T. No. 13674-A.6 Then Atty. Jimenez, being authorized by respondents, had the land re-surveyed and sold the same to the Insurance Savings and Investment Agency (ISIA).

ISIA found that a portion of the area was occupied by Pilar Development and Enrique Factor. This prompted ISIA to file with the RTC of Pasay City a complaint for recovery of property against them. The case was docketed as Civil Case No. 2262. Later, this case was transferred to the RTC, Branch 143 at Makati. During the hearing, Rolando Golla, an employee of the Registry of Deeds of Pasig, testified that in obedience to the order of the trial court, he brought the following:

1) Original copy of O.C.T. No. 383 in the name of Guillermo Cruz; and

2) Xerox copy of the certified true copy of the same O.C.T.7

After considering the evidence presented by both parties, we agree with the Court of Appeals and the trial court that petitioner’s complaint must be dismissed for its failure to prove its allegations by preponderance of evidence, specifically that T.C.T. No. 38910-A in the names of respondents is spurious.

I.

Let it be stressed that respondents Wilson and Lucresia Orfinada purchased the property from Guillermo Cruz as early as June 7, 1955, as shown by the Deed of Absolute Sale8 duly registered in the Registry of Deeds of Pasig. However, it was only on October 21, 1981, or after 26 years, that the Director of Lands came to realize that respondents’ land title, T.C.T. No. 38910-A, now 13674-A, is spurious. What prompted the Director of Lands, after such length of time, to conclude that this title is not genuine? Records are silent on this point.

II

Petitioner maintains that T.C.T. No. 38910-A is spurious just because it was derived from O.C.T. No. 383. Petitioner insists that there is only one O.C.T. No. 383 and it is in the name of Paulino Cruz, not Guillermo Cruz. But Atty. Ramon Manalastas, then Acting Register of Deeds of Pasig, a witness for petitioner, admitted that O.C.T. No. 383 in the name of Paulino Cruz "is no longer available."

Considering that O.C.T. No. 383 in the name of Paulino Cruz no longer exits, petitioner, in maintaining that T.C.T. No. 38910-A originated therefrom, relies on a "certified copy" of Free Patent No. 13409 in the name of Paulino Cruz. According to petitioner, this Free Patent was the basis for the issuance of O.C.T. No. 383 to Paulino Cruz. Such assertion does not persuade us considering that per admission of petitioner itself, O.C.T. No. 383 in the name of Paulino Cruz, is not in the files of the Registry of Deeds of Pasig. Indeed, the Committee Reports state that the investigators merely "presume that the description of the land covered by O.C.T. No. 383 (in the name of Paulino Cruz) should be the same as what appears on Free Patent No. 13409." This means that while Free Patent No. 13409 was granted by the Governor General on March 17, 1932, it does not follow that the corresponding O.C.T. was actually issued to Paulino Cruz and registered in his name.

There being no O.C.T. No. 383 in the name of Paulino Cruz as admitted by petitioner, its allegations that respondents secured their title through fraud and misrepresentation by making it appear that it originated from such O.C.T. No. 383 must fail. Even assuming that O.C.T. No. 383 was issued to Paulino Cruz on the basis of Free Patent No. 13409, still we cannot conclude that respondents committed fraud in obtaining their title. The land covered by Free Patent No. 13409 is in Barrio Sampaloc, Tanay, Rizal, while the property embraced by the Free Patent of Guillermo Cruz is in Barrio Almanza, Las Piñas.

In contending that the respondents’ title is void, petitioner also points out that the Free Patent on which it was based is defective. As earlier mentioned, petitioner claims that this Free Patent was issued by the President of the Philippines on May

12, 1935, pursuant to C.A. No. 141 (Public Land Act). But this Act took effect only on November 7, 1936 or prior to May 12, 1935. Hence, no Free Patent could have been issued on that date.

Significantly, respondents presented to the trial court the original copy of T.C.T. No. 38910-A, now in the custody of the Registry of Deeds of Las Piñas. Inscribed on this title is the following:

"It is further certified that said land was originally registered on the 22nd day of August in the year nineteen hundred and thirty-seven, in Registration Book No. l-4, page 84, of the Office of Register of Deeds of Rizal, as Original Certificate of Title No. 383, pursuant to a free patent granted by the President of the Philippines, on the 12th day of May, the year nineteen hundred and thirty seven, under Act No. 141."9

From the above statement, it can easily be discerned that it was on May 12, 1937, not in 1935, when the President issued to Guillermo Cruz his Free Patent, pursuant to C.A. 141 (Public Land Act). After three (3) months or on August 22, 1937, the Registry of Deeds of Rizal issued to him O.C.T. No. 383.

There is sufficient evidence to show that this O.C.T. No. 383 in the name of Guillermo Cruz exists. Atty. Jimenez testified that he was able to obtain a certified true copy of the said title from the Registry of Deeds of Pasig. Likewise, Rolando Golla, an employee of the same Registry of Deeds presented to the trial court the original copy of O.C.T. No. 383 in the name of Guillermo Cruz. Petitioner failed to dispute this evidence.

Still, petitioner would not rest in claiming that T.C.T No. 38910-A is a nullity. It invites our attention that T.C.T No. 38910, derived from O.C.T. No. 383 in the name of Paulino Cruz, was issued and registered in the name of one Marina Cruz Vda. de San Jose, not in the names of respondents. Suffice it to state that the land covered by Marina’s title is in Barrio San Roque, Tanay, Rizal. Respondents’ property is in Barrio Almanza, Las Piñas, Rizal.

Even assuming that there was a defect in O.C.T. No. 383 in the name of Guillermo Cruz, respondents being buyers in good faith have acquired rights over the property. Consequently, we cannot disregard such rights and order the cancellation of the certificate of title. The Court of Appeals held:

"When Wilson Orfinada and Guillermo Cruz entered into a Contract of Deed of Absolute Sale (Folder of Exhibits, p. 85), what was required from Orfinada was merely to look at OCT 383 in the name of Guillermo Cruz. He need not go beyond what he saw on the face of the title. x x x.

x x x

A careful review of the records indicates that the Deed of Absolute Sale (Exh. 2-Orfinada, p. 85) executed by Guillermo Cruz in favor of Wilson P. Orfinada, was duly registered with the Register of Deeds of Pasig, Rizal, wherein it was annotated at the back of Original Certificate of Title No. 383 in the name of Guillermo Cruz (Exh. 65, p. 145) and said OCT was cancelled and in lieu thereof, the Pasig Register of Deeds issued, on September 18, 1956, Transfer Certificate of Title No. 38910-A in the name of Wilson Orfinada.

Consequently, plaintiff-appellant is implying that defendant is not a buyer in good faith. The reliance is misplaced. What is clear from the record is that when Wilson Orfinada purchased the property in question on September 18, 1956 (Exh. M, p. 27), the same was offered to him. He did not inquire further and firmly relied on the face of the original certificate of title in the name of Guillermo Cruz (Exh. 65, p. 145). He had no knowledge whatsoever of any irregularity of the title. As far as Orfinada is concerned, the OCT 383 shown to him was free from any flaw or defect that could give rise to any iota of evidence that it is fake and spurious."

In Legarda vs. Court of Appeals,10 we sustained the buyer’s right to rely on the correctness of the certificate of title, thus:

"If a person purchases a piece of land on the assurance that the seller's title thereto is valid, she should not run the risk of being told later that her acquisition was ineffectual after all. If we were to void a sale of property covered by a clean and unencumbered torrens title, public confidence in the Torrens System would be eroded and land transactions would have to be attended by complicated and inconclusive investigations and uncertain proof of ownership. The consequence would be that land conflicts could proliferate and become more abrasive, if not even violent."

Indeed, a Torrens title is generally conclusive evidence of ownership of the land referred to therein, and a strong presumption exists that a Torrens title was regularly issued and valid. A Torrens title is incontrovertible against any informacion possessoria, of other title existing prior to the issuance thereof not annotated on the Torrens title. Moreover, persons dealing with property covered by a Torrens certificate of title are not required to go beyond what appears on its face.11

Similarly, in Heirs of Spouses Benito Gavino and Juana Euste vs. Court of Appeals,12 we held:

"x x x, the general rule that the direct result of a previous void contract cannot be valid, is inapplicable in this case as it will directly contravene the Torrens system of registration. Where innocent third persons, relying on the correctness of the certificate of title thus issued, acquire rights over the property, the court cannot disregard such rights and order the cancellation of the certificate. The effect of such outright cancellation will be to impair public confidence in the certificate of title. The sanctity of the Torrens system must be preserved; otherwise, everyone dealing with the property registered under the system will have to inquire in every instance as to whether the title had been regularly or irregularly issued, contrary to the evident purpose of the law. Every person dealing with the registered land may safely rely on the correctness of the certificate of title issued therefore and the law will in no way oblige him to go behind the certificate to determine the condition of the property."

On petitioner’s second assigned error, suffice it to state that the Court of Appeals did not say that the Torrens System is a means of acquiring lands.

WHEREFORE, the petition is DENIED. The assailed Joint Decision dated December 13, 1999 of the Court of Appeals in CA-G.R. CV No. 32815 is hereby AFFIRMED.

No costs.

SO ORDERED.

Panganiban, (Chairman), Carpio-Morales, and Garcia, JJ., concur.Corona, J., on leave.

Republic of the PhilippinesSUPREME COURTManila

SECOND DIVISION

G.R. No. 156357 February 18, 2005

ENGR. GABRIEL V. LEYSON, DR. JOSEFINA L. POBLETE, FE LEYSON QUA, CARIDAD V. LEYSON and ESPERANZA V. LEYSON,petitioners, vs.NACIANSINO BONTUYAN and MAURECIA B. BONTUYAN, respondents.

D E C I S I O N

CALLEJO, SR., J.:

This is a petition for review on certiorari of the Decision1 of the Court of Appeals (CA), as well as its Resolution in CA-G.R. CV No. 64471 denying the motion for reconsideration of the said decision.

The Antecedents

Calixto Gabud was the owner of a parcel of land located in Barangay Adlawon, Mabolo, Cebu City, which was declared for taxation purposes under Tax Declaration (T.D.) No. 03276-R in 19452 with the following boundaries:

North Calixto Gabud East Marcelo Cosido

South Pedro Bontuyan West Asuncion Adulfo.3

Because of the construction of a provincial road, the property was divided into two parcels of land covered by T.D. No. 03276-R and T.D. No. 01979-R. On February 14, 1948, Gabud executed a Deed of Absolute Sale4 over the property covered by T.D. No. 03276-R, as well as the other lot covered by T.D. No. 01979-R, in favor of Protacio Tabal, married to Leodegaria Bontuyan. On the basis of the said deed, T.D. No. 03276-R was cancelled by T.D. No. 13615-R in the name of Protacio Tabal effective 1949.5 On January 5, 1959, Tabal executed a Deed of Sale6 over the property covered by T.D. No. 13615-R in favor of Simeon Noval, married to Vivencia

Bontuyan, daughter of Gregorio Bontuyan, for P800.00. T.D. No. 13615-R was cancelled by T.D. No. 100356 in the names of the spouses Noval.7 Gregorio Bontuyan received a copy of the said tax declaration in behalf of the spouses Noval.8 The latter tax declaration was then cancelled by T.D. No. 008876 under the same names effective 1967.9

Subsequently, the property was surveyed by Cadastral Land Surveyor Mauro U. Gabriel on January 22, 1964. The plan survey was approved on September 30, 1966.10 The property covered by T.D. No. 008876 was identified as Lot No. 17150 of Cebu Cadastre No. 12, while the property covered by T.D. No. 01979-R was identified as Lot No. 13272. On May 22, 1968, the spouses Noval executed a Deed of Absolute Sale11 over the two lots covered by T.D. No. 008876 in favor of Lourdes V. Leyson for P4,000.00. Lourdes Leyson took possession of the property and had it fenced. Despite the said sale, T.D. No. 008876 was cancelled by T.D. No. 21267 effective 1974.12 Thereafter, T.D. No. 21267 was cancelled by T.D. No. 2382113 which, in turn, was cancelled by T.D. No. 01-17455 effective 1980.14 In 1989, the latter was cancelled by a new tax declaration, T.D. No. 01-001-00646. All these tax declarations were in the names of the spouses Noval.15

Meanwhile, Lourdes Leyson paid for the realty taxes over the property. However, the tax declaration issued thereon continued to be under the names of the spouses Noval.16

Despite his knowledge that the property had been purchased by his son-in-law and daughter, the spouses Noval, Gregorio Bontuyan, who was then 91 years old, filed an application with the Bureau of Lands for a free patent over Lot No. 17150 on December 4, 1968. He alleged therein that the property was public land and was neither claimed nor occupied by any person,17 and that he first entered upon and began cultivating the same in 1918. Thus, on November 19, 1971, Free Patent No. 510463 was issued over Lot No. 17150 in his favor, on the basis of which Original Certificate of Title (OCT) No. 0-1619 was issued to and under his name on March 21, 1974.18 Another parcel of land, Lot No. 13272, was also registered under the name of Gregorio Bontuyan under OCT No. 0-1618. He then declared Lot No. 17150 for taxation purposes under T.D. No. 13596 effective 1974.19 On February 20, 1976, Gregorio Bontuyan executed a Deed of Absolute Sale20 over Lot No. 17150 in favor of his son, Naciansino Bontuyan.

On April 28, 1980, Gregorio Bontuyan, then 103 years old, executed another Deed of Absolute Sale21 over Lot Nos. 13272 and 17150, covered by OCT No. 0-1618 and OCT No. 0-1619, respectively, in favor of Naciansino Bontuyan for P3,000.00. On the basis of the said deed, OCT No. 0-1619 was cancelled by TCT No. 1392 in the

name of Naciansino Bontuyan on December 2, 1980.22 Gregorio Bontuyan died intestate on April 12, 1981.23

On March 30, 1981, the spouses Bontuyan executed a Real Estate Mortgage over Lot No. 17150 covered by OCT No. 0-1619 in favor of the Development Bank of the Philippines (DBP) as security for a loan of P11,200.00.24 Naciansino Bontuyan had earlier executed an affidavit that the property was not tenanted. Shortly thereafter, the spouses Bontuyan left the Philippines and resided in the United States. Meanwhile, Lourdes Leyson died intestate.

The spouses Bontuyan returned to the Philippines in 1988 to redeem the property from DBP only to discover that there were tenants living on the property installed by Engineer Gabriel Leyson, one of the late Lourdes Leyson’s children. Despite being informed that the said spouses owned the property, the tenants refused to vacate the same. The tenants also refused to deliver to the spouses the produce from the property. The spouses Bontuyan redeemed the property from DBP on September 22, 1989.

On February 12, 1993, Jose Bontuyan, Nieves Atilano, Pacifico Bontuyan, Vivencia Noval and Naciansino Bontuyan, the surviving heirs of Gregorio Bontuyan, executed an Extrajudicial Settlement25 of the latter’s estate and adjudicated Lot No. 13272 in favor of Naciansino. Based on the said deed, T.D. No. 01-001-00877 was issued to and under the name of Naciansino over the said property starting 1994.

On June 24, 1993, Naciansino Bontuyan, through counsel, wrote Engr. Gabriel Leyson, demanding that he be furnished with all the documents evidencing his ownership over the two lots, Lots Nos. 17150 and 13272.26 Engr. Leyson ignored the letter.

The spouses Bontuyan, thereafter, filed a complaint against Engr. Leyson in the Regional Trial Court (RTC) of Cebu City for quieting of title and damages. They alleged that they were the lawful owners of the two lots and when they discovered, upon their return from the United States, that the property was occupied and cultivated by the tenants of Engr. Leyson, they demanded the production of documents evidencing the latter’s ownership of the property, which was ignored.

The spouses Bontuyan prayed that, after due proceedings, judgment be rendered in their favor, thus:

WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Court to render judgment against the defendant and in favor of the plaintiffs, to wit:

(a) Confirming the ownership of the plaintiffs on the lots in question;

(b) Ordering defendant to pay the plaintiffs the amount of Twenty Thousand Pesos (P20,000.00) as the share of the plaintiffs of the produce of the lots in question;

(c) Ordering defendant to pay plaintiffs the sum of P50,000.00 as reimbursement of attorney’s fees and the further sum of P500.00 as appearance fee every time the case is called for trial;

(d) Ordering the defendant to pay plaintiffs the sum of P50,000.00 as moral damages and exemplary damages may be fixed by the court;

(e) Ordering defendant to pay plaintiffs the sum of P5,000.00 as actual expenses for the preparation and filing of the complaint;

(f) Ordering defendant to pay the costs; and

(g) Granting to plaintiffs such other reliefs and remedies just and equitable in the premises.27

In his answer to the complaint, Engr. Leyson averred, by way of affirmative defenses, that the two lots were but portions of a parcel of land owned by Calixto Gabud, covered by T.D. No. 03276-R, and was subdivided into two parcels of land because of the construction of a provincial road on the property; Gabud later sold the two lots to Protacio Tabal, who sold the same to Simeon Noval, married to Vivencia Bontuyan, one of the children of Gregorio Bontuyan; Simeon Noval later sold the property to Lourdes Leyson on May 22, 1968 who, forthwith, took possession thereof as owner; and Gregorio Bontuyan was issued a free patent over the property through fraud. Engr. Leyson concluded that the said patent, as well as OCT No. 0-1619 and TCT No. 1392, were null and void and that the plaintiffs acquired no title over the property.

Engr. Leyson interposed a counterclaim against the spouses Bontuyan and repleaded as an integral part thereof all the material allegations in his affirmative

defense. He prayed that, after due proceedings, judgment be rendered in his favor, thus:

a) Dismissing Plaintiffs’ complaint for failure to include indispensable parties;

b) Declaring the Defendant and his four (4) sisters, namely, Dr. Josefina L. Poblete, Mrs. Fe L. Qua, Esperanza Leyson and Caridad Leyson as the true and legal owners and possessors of the parcels of land in issue;

c) Declaring OCT No. 0-1619 in the name of Gregorio Bontuyan and TCT No. 1392 in the name of Naciansino Bontuyan null and void and to order the Register of Deeds to cancel the same and issue new ones in favor of the Defendant Gabriel V. Leyson and his four (4) sisters, namely: Dr. Josefina L. Poblete, Mrs. Fe L. Qua, Esperanza V. Leyson and Caridad V. Leyson;

d) And on the Counterclaim, to order Plaintiffs to pay the Defendant the following sums:

d-1) P50,000.00 as attorney’s fees and appearance fee of P1,000.00 per hearing;

d-2) P500,000.00 as moral damages;

d-3) P20,000.00 as exemplary damages;

d-4) P10,000.00 as expenses of litigation.

Defendant further prays for such other reliefs just and equitable in the premises.28

In due course, the other children of Lourdes Leyson, namely, Dr. Josefina L. Poblete, Fe Leyson Qua, Caridad V. Leyson and Esperanza V. Leyson, were allowed to intervene as defendants. They filed their answer-in-intervention wherein they adopted, in their counterclaim, paragraphs 7 to 26 of the answer of their brother, Engr. Leyson, the original defendant. They prayed that, after due hearing, judgment be rendered in their favor as follows:

Wherefore, this Honorable Court is prayed to render judgment in favor of the Defendant and the Defendants-in-Intervention and against the Plaintiffs as follows:

a) Promissory Plaintiffs’ complaint for failure to include indispensable parties and for lack of cause of action;

b) Declaring the Defendant and his four (4) sisters, namely: Dr. Josefina L. Poblete; Mrs. Fe L. Qua, Esperanza Leyson and Caridad Leyson as the true and legal owners and possessors of the parcels of land in issue;

c) Declaring OCT No. 0-1619 in the name of Gregorio Bontuyan and TCT No. 1392 in the name of Naciansino Bontuyan null and void and to order the Register of Deeds to cancel the same and issue new ones in favor of the Defendant Gabriel V. Leyson and his four (4) sisters, namely: Dr. Josefina L. Poblete, Mrs. Fe L. Qua, Esperanza V. Leyson and Caridad V. Leyson;

d) On the Counterclaim, Plaintiffs should pay the Defendants the following sums:

d-1) P50,000.00 as attorney’s fees and appearance fee of P1,000.00 per hearing;

d-2) P500,000.00 as moral damages to each Intervenor;

d-3) P50,000.00 as exemplary damages;

d-4) P15,000.00 as expenses of litigation.

Defendant further prays for such other reliefs just and equitable in the premises.29

In their reply, the spouses Bontuyan averred that the counterclaim of the defendants for the nullity of TCT No. 1392 and the reconveyance of the property was barred by laches and prescription.

On January 21, 1999, the trial court rendered judgment in favor of the Leyson heirs and against the spouses Bontuyan. The fallo of the decision reads:

WHEREFORE, foregoing considered judgment is hereby rendered dismissing plaintiff’s complaint for dearth of evidence declaring the defendant and the intervenors as the true and legal owners and possessors of the subject parcels of land; declaring OCT No. 0-1619 in the name of Gregorio Bontuyan and TCT No. 1392 in the name of Naciansino Bontuyan null and void; ordering the Register of Deeds to cancel OCT No. 0-1619 and TCT No. 1392 and issue new ones in favor of defendant Gabriel Leyson and intervenors Josefina Poblete, Fe Qua, Esperanza Leyson and Caridad Leyson; ordering plaintiff to pay defendant and intervenors the following:

a) P50,000.00 attorney’s fees;

b) 1,000.00 per appearance;

c) 100,000.00 moral damages for defendant and intervenors;

d) 10,000.00 exemplary damages; and

e) 10,000.00 litigation expenses.

SO ORDERED.30

The trial court held that Simeon Noval had sold the lots to Lourdes Leyson on May 22, 1968, who thus acquired title over the property.

The spouses Bontuyan appealed the decision to the CA which affirmed, with modification, the decision of the RTC. The appellate court held that the Leyson heirs were the owners of Lot No. 13273, while the spouses Bontuyan were the owners of Lot No. 17150. The CA ruled that the answer of the Leyson heirs to the complaint constituted a collateral attack of OCT No. 0-1619 which was proscribed by law. The Leyson heirs filed a motion for reconsideration of the decision insofar as Lot No. 17150 was concerned, contending that their counterclaim for the nullification of OCT No. 0-1619 contained in their answer constituted a direct attack on the said title. The CA denied the motion.

The Leyson heirs then filed a petition for review with this Court and made the following assignments of error:

First Assignment of Error

THE HONORABLE COURT OF APPEALS COMMITTED ERROR WHEN IT RULED THAT THE NULLITY OR THE VALIDITY OF OCT NO. 0-1619 CANNOT BE RULED UPON IN THESE PROCEEDINGS BROUGHT BY THE RESPONDENTS FOR THE QUIETING OF THEIR TITLE.

Second Assignment of Error

THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT PETITIONERS’ ANSWER WITH COUNTERCLAIM, PRAYING FOR THE CANCELLATION OF PLAINTIFFS’ TORRENS CERTIFICATE IS A MERE COLLATERAL ATTACK ON THE TITLE.31

Third Assignment of Error

THE APPELLATE COURT GRAVELY ERRED WHEN IT MODIFIED THE DECISION OF THE REGIONAL TRIAL COURT DATED JANUARY 21, 1999 BY RULING THAT PETITIONERS ARE DECLARED THE OWNERS OF LOT 13273 BUT RESPONDENTS ARE DECLARED THE OWNERS OF LOT 17150 UNDER OCT NO. 0-1619 AND PRESENTLY COVERED BY TCT NO. 1392 IN THE NAME OF NACIANSINO BONTUYAN, DESPITE THE APPELLATE COURT’S AFFIRMING THE FINDINGS OF THE TRIAL COURT THAT FRAUD WAS COMMITTED BY GREGORIO BONTUYAN (RESPONDENTS’ PREDECESSOR-IN-INTEREST) IN ACQUIRING TITLE OVER THE SUBJECT PROPERTIES.32

Fourth Assignment of Error

THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT RECONVEYANCE OF TITLE OF LOT 17150 COVERED BY OCT NO. 0-1619 AND PRESENTLY COVERED BY TCT NO. 1392, IN FAVOR OF PETITIONERS HAD PRESCRIBED.33

Fifth Assignment of Error

THE APPELLATE COURT GRAVELY ERRED IN NOT GRANTING ATTORNEY’S FEES AND APPEARANCE FEES DESPITE RESPONDENTS’ FRAUD IN ACQUIRING TITLE OVER THE SUBJECT PROPERTIES.34

On the first two assignments of errors, the petitioners aver that the counterclaim in their answer to the complaint constituted a direct attack of the validity of OCT No. 0-1619. They maintain that the appellate court’s reliance on the ruling of this Court in Cimafrancia v. Intermediate Appellate Court35 was misplaced. They assert that

what is controlling is the ruling in Pro Line Sports Center, Inc. v. Court of Appeals36wherein this Court held that the counterclaim of the petitioners therein constituted a direct attack on a certificate of title. The petitioners, likewise, cited Section 55 of Act No. 496, as amended, to buttress their stance. They plead that their answer to the complaint should be liberally construed so as to afford them substantial justice.

On the other hand, the respondents assert that the decision of the CA is correct. They claim that Lot No. 17150 was still public land when Lourdes Leyson purchased the same from Simeon Noval, and that the property became private land only when Free Patent No. 510463 was issued to and under the name of Gregorio Bontuyan.

We agree with the contention of the petitioners that the CA erred in not nullifying OCT No. 0-1619 and TCT No. 1392 and ordering the respondents to reconvey the property covered by the said title to the petitioners.

The respondents, as plaintiffs in the court a quo, were burdened to prove their claim in their complaint that Gregorio Bontuyan was the owner of Lot No. 17150 and that they acquired the property in good faith and for valuable consideration from him.37 However, the respondents failed to discharge this burden. The evidence on record shows that Calixto Gabud sold the property to Protacio Tabal on February 14, 1948,38 and that the latter sold the property to Simeon Noval on January 5, 1959.39 Simeon Noval then sold the property to Lourdes Leyson on May 22, 1968.40 The respondents failed to adduce any evidence to prove that Lourdes Leyson, or even Simeon Noval, sold the property to Gregorio Bontuyan, or to any of the respondents for that matter. Since Gregorio Bontuyan was not the owner of the property, he could not have sold the same to his son Naciansino Bontuyan and the latter’s wife, the respondents herein. As the Latin adage goes: NEMO DAT QUOD NON HABET. Gregorio Bontuyan could not feign ignorance of Simeon Noval’s ownership of the property, considering that the latter was his son-in-law, and that he (Gregorio Bontuyan) was the one who received the owner’s copy of T.D. No. 100356 covering the property under the name of Simeon Noval.41 At the dorsal portion of the said tax declaration, there was even an annotation that the property was transferred to Simeon Noval as shown by the deed of sale executed before Notary Public Gregorio A. Uriarte who notarized the deed of sale over the property executed by Protacio Tabal in favor of Simeon Noval on January 5, 1959.42 We note that the respondents failed to adduce in evidence any receipts of real property tax payments made on the property under their names, which would have fortified their claim that they were the owners of the property. We agree with the findings of the CA, thus:

This case involves two parcels of land – Lot 17150 and Lot 13273. Lot 17150 is registered under the Torrens System under the names of plaintiffs-appellants, while Lot 13273 remained to be unregistered.

In this case, records show that defendant-appellee and intervenors-appellees are the true owners of the subject lots. They have in their favor tax receipts covering the subject lots issued since 1945.

While, indeed, tax receipts and declarations are not incontrovertible evidence of ownership, such, however, if accompanied with open, adverse, continuous possession in the concept of an owner, as in this case, constitute evidence of great weight that person under whose name the real taxes were declared has a claim of right over the land.

Further, defendant-appellee and intervenors-appellees presented before the trial court the Deed of Absolute Sale dated February 14, 1948, executed by Calixto Gabud, conveying the subject lots in favor of Protacio Tabal. The deed is a notarial document.

Likewise presented is the Deed of Absolute Sale of the subject lots dated January 5, 1959, executed by Protacio Tabal in favor of spouses Simeon Noval and Vivencia Bontuyan. The document is, likewise, a notarial document.

Defendant-appellee and intervenors-appellees also presented the Deed of Absolute Sale of the subject lots dated May 22, 1968, executed by spouses Simeon Noval and Vivencia Bontuyan in favor of Lourdes Leyson. The deed is a notarial document.

A notarial document is evidence of the facts in clear, unequivocal manner therein expressed. It has in its favor the presumption of regularity. It is admissible in evidence without necessity of preliminary proof as to its authenticity and due execution.

There exist (sic) no trace of irregularity in the transfers of ownership from the original owner, Calixto Gabud, to defendant-appellee and intervenors-appellees.

Plaintiffs-appellants, on the other hand, offered no convincing evidence as to how their predecessor-in-interest, Gregorio Bontuyan, acquired the subject lots. Plaintiffs-appellants presented only the Free Patent and OCT No. 0-1619, covering Lot No. 17150, issued in the name of Gregorio Bontuyan.

As to Lot No. 13273, We find no sufficient reason why defendant-appellee and intervenors-appellees should be disturbed in their ownership and possession of the same.43

As copiously shown by the record, Gregorio Bontuyan filed his application for a free patent with the Bureau of Lands on December 4, 1968 in gross bad faith, thereby defrauding Lourdes Leyson of the said property through deceit. Gregorio Bontuyan falsely declared in the said application: (a) that he entered upon and cultivated the property since 1918 and that the property was not claimed or occupied by any person; and (b) that Lot No. 17150 was located in Sirao, Cebu City, when, in fact, the property was located in Adlawon, Cebu City. Lourdes Leyson was not notified of the said application and failed to file any opposition thereto. Gregorio Bontuyan was then able to secure Free Patent No. 510463 on November 19, 1971 and OCT No. 0-1619 on March 21, 1974. It appears in the said title that the property’s location was indicated as "Sirao, Cebu City."44 Indeed, the CA declared that Gregorio Bontuyan had acquired title to the property through fraud:

However, as to Lot No. 17150, We find that despite the fraud committed by Gregorio Bontuyan (plaintiffs-appellants’ predecessor-in-interest) in acquiring his title over the said lot, ownership over the said lot should be adjudged in favor of plaintiffs-appellants.

Records, indeed, show that, at the time when Gregorio Bontuyan applied for Free Patent, Gregorio Bontuyan was living with his daughter, Vivencia Bontuyan (defendant-appellee’s predecessor-in-interest). Thus, Gregorio Bontuyan must have known that at the time when he applied for free patent on December 1968, the subject lots were already sold on May 1968 by his daughter Vivencia Bontuyan in favor of Lourdes Leyson, predecessor-in-interest of defendants-appellees.

Moreover, records further show that Gregorio Bontuyan sold twice Lot [No.] 17150 to plaintiffs-appellants. The first was in 1976 and the other was in 1980. Plaintiffs-appellants offered no reasonable explanation why Gregorio Bontuyan have (sic) to sell twice Lot No. 17150 in favor of plaintiffs-appellants.

As found by the trial court, these are badges of bad faith which affect the validity of the title of Gregorio Bontuyan over the subject lots.

We are aware that the torrens system does not create or vest title. It only confirms and records title already existing and vested. It does not protect a usurper from the true owner. It cannot be a shield for the commission of fraud. It does not permit

one to enrich himself at the expense of another. Where one does not have any rightful claim over a real property, the torrens system of registration can confirm or record nothing.45

The findings of the CA affirmed the findings of the trial court in its decision, thus:

After having thoroughly analyzed the records and the evidences adduced during the trial of this case, this Court is convinced and sincerely believes that the lots in question were originally owned by Calixto Gabud as evidenced by T.D. [No.] 03276R marked as Exh. "1." In 1945, this consisted of only one lot in Adlawon, Cebu City, as there was no provincial road yet. However in 1948, the said parcel of land was divided into two because a provincial road was constructed passing through it. Hence, T.D. [No.] 03276R and T.D. [No.] 01979-R were issued to Calixto Gabud. On February 16, 1948, Calixto Gabud sold the said parcels of land to spouses Protacio Tabal and Ludegaria (sic) Bontuyan as evidenced by an Absolute Deed of Sale, Exh. "2." On January 5, 1959, spouses Protacio Tabal and Ludegaria (sic) Bontuyan, in turn, sold the same parcels of land to spouses Simeon Noval and Vivencia Bontuyan as evidenced by a Deed of Sale, Exh. "4." It is noteworthy to mention at this point in time that Vivencia Bontuyan is one of the daughters of Gregorio Bontuyan, the father of herein plaintiff Naciansino Bontuyan. In May 1968, spouses Simeon Noval and Vivencia Bontuyan sold the subject parcels of land to Lourdes vs. (sic) Leyson, the mother of herein defendant as evidenced by a Deed of Sale marked as Exh. "6." It is quite perplexing for the court to imagine that Gregorio Bontuyan, father of herein plaintiff, who was then residing with spouses Simeon Noval and Vivencia Bontuyan at 179 C San Jose dela Montaña, Mabolo, Cebu City, as reflected in his application for Free Patent (Exhs. "8" & "26") dated December 4, 1968 was unaware of the sale of the subject parcels of land made by his daughter Vivencia Bontuyan and spouse Simeon Noval to Lourdes Leyson. It is evident that, after the sale from spouses Noval to Lourdes Leyson in May 1968, Gregorio Bontuyan applied for Free Patent for the same parcels of land in December 1968 claiming to have cultivated the land since 1918, stating therein the location as Sirao and not Adlawon which is the true and correct location. Sirao and Adlawon are two different barangays which are not even adjacent to each other. In fact, as borne out by Exh. "25," it is separated by Barangay Guba. In 1974, Free Patent No. 510463 and OCT# 0-1619 was issued to Gregorio Bontuyan covering subject property, the location of which is in Barangay Sirao in consonance to his application. Gregorio Bontuyan’s application for Free Patent over subject parcels of land had raised in the mind of this Court reasonable badges of bad faith on his part as the subject parcels of land were already sold by his daughter Vivencia Bontuyan and spouse Simeon Noval to Lourdes Leyson. Another badge of bad faith is raised in the mind of this Court when he (Gregorio) sold the subject parcels of land twice to his son

Naciansino Bontuyan in 1976 and 1980, respectively, wherein both Deeds of Sale were notarized by different Notary Publics, (Exhs. "10" & "16").46

Considering that Lourdes Leyson was in actual possession of the property, the respondents cannot, likewise, claim that they were in good faith when Gregorio Bontuyan allegedly sold the property to them on April 28, 1980.1awphi1.nét

Anent the third and fourth assignments of error, we do not agree with the ruling of the CA that the petitioners failed to directly attack the validity of OCT No. 0-1619. The CA failed to consider the fact that, in their respective answers to the complaint, the petitioners inserted therein a counterclaim wherein they repleaded all the material allegations in their affirmative defenses, that Gregorio Bontuyan secured OCT No. 0-1619 through fraud and deceit and prayed for the nullification thereof.

While Section 47 of Act No. 496 provides that a certificate of title shall not be subject to collateral attack, the rule is that an action is an attack on a title if its object is to nullify the same, and thus challenge the proceeding pursuant to which the title was decreed.l^vvphi1.net The attack is considered direct when the object of an action is to annul or set aside such proceeding, or enjoin its enforcement. On the other hand, an attack is indirect or collateral when, in an action to obtain a different relief, an attack on the proceeding is nevertheless made as an incident thereof.47 Such action to attack a certificate of title may be an original action or a counterclaim in which a certificate of title is assailed as void. A counterclaim is considered a new suit in which the defendant is the plaintiff and the plaintiff in the complaint becomes the defendant. It stands on the same footing and is to be tested by the same rules as if it were an independent action.48 Furthermore, since all the essential facts of the case for the determination of the title’s validity are now before the Court, to require the party to institute cancellation proceedings would be pointlessly circuitous and against the best interest of justice.49

The CA, likewise, erred in holding that the action of the petitioners to assail OCT No. 0-1619 and TCT No. 1392 and for the reconveyance of the property covered by the said title had already prescribed when they filed their answer to the complaint.

Case law has it that an action for reconveyance prescribes in ten years, the point of reference being the date of registration of the deed or the date of issuance of the certificate of title over the property. In an action for reconveyance, the decree of registration is highly regarded as incontrovertible. What is sought instead is the transfer of the property or its title, which has been wrongfully or erroneously registered in another person’s name, to its rightful or legal owner, or to one who has a better right.50

However, in a series of cases, this Court declared that an action for reconveyance based on fraud is imprescriptible where the plaintiff is in possession of the property subject of the acts. In Vda. de Cabrera v. Court of Appeals,51 the Court held:

... [A]n action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years, the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title over the property, but this rule applies only when the plaintiff or the person enforcing the trust is not in possession of the property, since if a person claiming to be the owner thereof is in actual possession of the property, as the defendants are in the instant case, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. The reason for this is that one who is in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in possession.

Similarly, in the case of David v. Malay,52 the same pronouncement was reiterated by the Court:

... There is settled jurisprudence that one who is in actual possession of a piece of land claiming to be owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid of the court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in possession. No better situation can be conceived at the moment for Us to apply this rule on equity than that of herein petitioners whose ... possession of the litigated property for no less than 30 years and was suddenly confronted with a claim that the land she had been occupying and cultivating all these years, was titled in the name of a third person. We hold that in such a situation the right to quiet title to the property, to seek its reconveyance and annul any certificate of title covering it, accrued only from the time the one in possession was made aware of a claim adverse to his own, and it is only then that the statutory period of prescription commences to run against such possessor.1awphi1.nét

The paramount reason for this exception is based on the theory that registration proceedings could not be used as a shield for fraud.53Moreover, to hold otherwise would be to put premium on land-grabbing and transgressing the broader principle

in human relations that no person shall unjustly enrich himself at the expense of another.54

In the present case, Lourdes Leyson and, after her death, the petitioners, had been in actual possession of the property. The petitioners were still in possession of the property when they filed their answers to the complaint which contained their counterclaims for the nullification of OCT No. 0-1619 and TCT No. 1392, and for the consequent reconveyance of the property to them. The reconveyance is just and proper in order to put a stop to the unendurable anomaly that the patentees should have a Torrens title for the land which they and their predecessors never possessed and which has been possessed by another in the concept of an owner.55

On the fifth assignment of error, we rule for the petitioners. The award of attorney’s and appearance fees is better left to the sound discretion of the trial court, and if such discretion is well exercised, as in this case, it will not be disturbed on appeal.56 With the trial and the appellate courts’ findings that the respondents were in bad faith, there is sufficient basis to award attorney’s and appearance fees to the petitioners. Had it not been for the filing of a baseless suit by the respondents against the petitioners, the latter would not have sought the services of counsel to defend their interests and represent them in this case.1awphi1.nét

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision of the Court of Appeals declaring the respondents the owners of Lot No. 17150 covered by OCT No. 0-1619 and TCT No. 1392; and setting aside the award of attorney’s fees in favor of the petitioners by the Regional Trial Court are REVERSED AND SET ASIDE.

The Court hereby AFFIRMS the ownership of the petitioners of Lot No. 17150. OCT No. 0-1619 and TCT No. 1392 covering the said lot are hereby nullified. The Register of Deeds is ORDERED to cancel TCT No. 1392 and to issue another title over the property in favor of the petitioners as co-owners thereof. The trial court’s award of P50,000.00 for attorney’s fees to the petitioners is AFFIRMED. No pronouncement as to costs.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

Republic of the PhilippinesSUPREME COURTManila

SECOND DIVISION

G.R. No. 152440 January 31, 2005

FELICITACION B. BORBAJO, petitioner, vs.HIDDEN VIEW HOMEOWNERS, INC., SPS. MARCELINA A. SARCON, ELY D. SARCON, ROBERTO ALVAREZ, CORAZON NOMBRADO, and GILBERT ANDRALES, in their personal capacities, respondents.

D E C I S I O N

TINGA, J.:

Before this Court is a Rule 45 petition assailing the Decision1 dated 21 September 2001 of the Court of Appeals which reversed theDecision2 dated 14 September 1999 of the Regional Trial Court (RTC) of Cebu City, Branch 58.

The factual antecedents are as follows:

Jose C. Bontuyan (Bontuyan), Lucy Solon, Georgina Solon, Helen Solon and Vicente Solon, Jr. (the Solons) were the registered owners of a parcel of agricultural land (Lot 10183-A), covering an area of 13,910 square meters situated at Barangay Bacayan, Cebu City as evidenced by Transfer Certificate of Title (TCT) No. 73709 of the Register of Deeds of Cebu City.3 At the instance of Bontuyan, the property was surveyed on 19 May 1991 to convert it into a subdivision. On 6 June 1991, the corresponding subdivision plan, showing three (3) road lots as such, was submitted to the Cebu Office of the Department of Environment and Natural Resources (DENR). On 24 July 1991, the Regional Technical Director of the DENR, Lands Management Sector, Region Office VII, in Cebu, approved the subdivision plan.4 Meanwhile, in his own behalf and as attorney-in-fact of the Solons and following the subdivision scheme in the plan, Bontuyan sold the resulting lots to different individuals,5 as evidenced by the Deed of Absolute Sale6 dated 18 June 1991.

Among the lots sold are the ones which later became the subject of this case, the three (3) road lots. The road lots were sold to petitioner Felicitacion B. Borbajo, married to Danilo S. Borbajo, and Prescillana B. Bongo (Bongo), married to Patricio P. Bongo.7 However, they obtained the titles to the lots more than a month later on 30 July 1991.8

Using the advance payments of his lot purchasers, Bontuyan proceeded to develop a subdivision which was later named Hidden View Subdivision I by its residents and homeowners.9 Later, he applied for and secured from the Housing and Land Use Regulatory Board (HLURB) a License to Sell10 dated 29 July 1991.

Borbajo also decided to develop into a subdivision the other properties adjacent to Hidden View Subdivision I which she acquired. Thus, she applied for and received SSA 674-5-94 issued by the Cebu City Planning and Development Department, covering the parcel of land embraced by TCT No. 127642, to be subdivided into twenty-three (23) lots.11 She named this new subdivision ST Ville Properties. On 29 July 1994, she secured Certificate of Registration No. 05005 for the ST Ville Properties project and a License to Sell the same from the HLURB. She also secured a Certificate of Registration dated 18 August 1994 for another subdivision project called Hidden View Subdivision II from the HLURB, with the corresponding License to Sell issued on 16 August 1994. The two new subdivision projects were located at the back of Hidden View Subdivision I.

The residents and homeowners of Hidden View Subdivision I heard reports to the effect that Borbajo had purchased the entire subdivision from Bontuyan through an oral agreement. They also heard that they have no right to use the road lots, since the lots have already been registered in Borbajo’s name. As a consequence, the Hidden View Homeowners, Inc. invited Borbajo to a meeting. When confronted by the homeowners about her claim that she had bought the subdivision from Bontuyan, Borbajo confirmed her claim of ownership over the subdivision and the road lots. She also told them that they have "no right regarding the road right-of-way."12

The incident prompted the homeowners of Hidden View Subdivision I to inquire with the HLURB about the validity of the registration of the subdivision road lots in the name of Borbajo. They also asked whether she had the necessary documents for the development of Hidden View Subdivision II and ST Ville Properties. In a letter13 dated 17 March 1997, HLURB Regional Officer Antonio Decatoria, Sr. replied that under the law the owner or developer of the subdivision should have legal title or right over the road lots of the subdivision and that if the title or right is in the name of other persons it follows that there is failure to comply with the requirements of the law. The HLURB Officer pointed out that Hidden View Subdivision II and ST Ville Properties had not filed an application for registration and license to sell with the HLURB.14

On 10 August 1997, the homeowners caused the construction of a guardhouse at the entrance of Hidden View Subdivision I and hired the services of a security guard

to prevent unauthorized persons and construction vehicles from passing through their subdivision. The measures adversely affected the residents of the subdivisions at the back, as well as Borbajo herself since her delivery trucks and heavy equipment used in the construction of her housing projects then on-going had been effectively prevented from passing through the road lots.15

On 28 August 1997, Borbajo filed before the RTC of Cebu City, Branch 58, an action for damages and injunction against Hidden View Homeowners, Inc., spouses Marcelina A. Sarcon and Ely D. Sarcon, Roberto Alvarez and Corazon Nombrado and Gilbert Andrales (respondents herein). Borbajo prayed for the issuance of a temporary restraining order (TRO) directing respondents to maintain the status quo and to desist from preventing her delivery trucks and other construction vehicles, and her construction workers, from passing through the road lots, and, after hearing on the merits, that judgment be rendered making the restraining order or preliminary injunction permanent and ordering the defendants to pay damages.16

The trial court issued a TRO effective for seventy-two (72) hours. After due hearing, it also granted Borbajo’s application for a writ of preliminary injunction. It denied respondents’ motion to dismiss on the ground that it is the HLURB which has jurisdiction over the case.17

After trial, the trial court rendered its decision dated 14 September 1999, the dispositive portion of which reads:

"WHEREFORE, premises considered, judgment is hereby rendered enjoining the defendants to close [sic] the road lots in question, hence, making the injunction permanent, subject to the right of the defendants to regulate the passage thereof by the plaintiff and the general public; and directing the plaintiff to donate the road lots in question to the government of Cebu City. No pronouncement as to any damages and as to costs.

SO ORDERED."18

On appeal, the Court of Appeals reversed the lower court decision. The decretal portion of the appellate court’s decision dated 21 September 2001 reads:

WHEREFORE, premises considered, the present appeal is hereby GRANTED. The appealed Decision in Civil Case No. CEB-20796 is hereby REVERSED and SET ASIDE

and a new one is hereby rendered DISMISSING the complaint. The counterclaim of defendants-appellants is likewise dismissed for lack of legal and factual bases.

No pronouncement as to costs.

SO ORDERED."19

Undaunted, Borbajo elevated the case to this Court.

In her petition, Borbajo imputes error to the appellate court (a) in reversing the decision of the trial court which declared her to be the developer of Hidden View Subdivision I, (b) in finding that she had fraudulently secured the registration of the three (3) road lots, and (c) in declaring that she is not entitled to the injunctive relief.20

Borbajo contends that the appellate court erred in reversing the finding of the RTC that she is the developer of Hidden View Subdivision I. According to her, and as borne out by her testimony before the RTC, she was the true developer of Hidden View Subdivision I even though the License to Sell was issued in the name of Bontuyan. The appellate court allegedly violated prevailing jurisprudence when it held that she fraudulently secured the registration of the three (3) road lots since a certificate of title cannot be collaterally attacked except in direct proceedings instituted for that purpose. In fact, Hidden View Homeowners, Inc. has filed a separate case for annulment of title against Borbajo which is now pending before Branch 9 of the RTC of Cebu City. Further, she claims that she is entitled to the injunctive relief considering that she is the registered owner of these road lots in question and, hence, she has a right in esse which deserves legal protection.21

On the other hand, respondents argue that the sale of the road lots made by Bontuyan in favor of Borbajo was illegal and contrary to the provisions of Presidential Decree (P.D.) No. 957 which requires that the road lots in a subdivision development shall be in the name of the developer or owner, of which Borbajo is neither.22 They aver that Borbajo fraudulently obtained her titles to the road lots through a falsified deed of sale which was the document presented to the Office of the Register of Deeds.23 They also point out that the use by Borbajo of the road lots for the ingress and egress of heavy equipment has continuously resulted in the rapid deterioration of the roads. Moreover, the road lots are not the nearest point between the development project of Borbajo and the provincial road.24 Finally, they assert that they are merely exercising acts of ownership which include the right to prevent others from enjoying the thing owned by them. Respondents

oppose the issuance of a preliminary injunction because notwithstanding the registration of the subject road in Borbajo’s name, her title thereto is tainted by the discovery of fraud she allegedly perpetrated in securing the questioned titles.25

The result which Borbajo seeks to achieve which is to reinstate the preliminary injunction issued by the lower court has to be granted, but not for the reasons which she has raised nor for the grounds which the lower court relied upon.

The ultimate question for resolution is whether respondents may legally prevent Borbajo from using and passing through the three (3) road lots within Hidden View Subdivision I. It is worthy of note that the right of respondents to use the road lots themselves is not in dispute.

In resolving the controversy, the lower court addressed only the issue of whether respondents have the right to close the road lots, and the question of damages.26 It concluded that respondents cannot legally close the road lots because these are intended for public use. It opted not to resolve the question pertaining to the validity of Borbajo’s acquisition of the road lots and her title thereto on the ground that a Torrens title cannot be collaterally attacked.27

For its part, the Court of Appeals addressed the trial court’s errors assigned by the respondents herein. The trial court allegedly erred in: (a) finding that Borbajo was the developer of Hidden View Subdivision I; (b) finding that the manner by which Borbajo acquired the road lots is irrelevant to the resolution of the issues in this case; (c) finding that the road lots are open to the public and the only right of the residents therein is to regulate its use; (d) not finding that the elements of an easement of a right-of-way are not present; (e) finding that the injunction was properly issued and the court ordered Borbajo to donate the road lots in favor of the local government unit; and (f) failing to award damages to the respondents.28

The appellate court found that the injunctive writ was erroneously issued as the same was not based on an actual right sought to be protected by law. The fact that Borbajo was the developer of Hidden View Subdivision I was not clearly established by evidence. Although Borbajo has claimed that she was the developer of the subdivision and that Bontuyan’s name was indicated in the License to Sell, such claim carried scant weight in the absence of a certificate of registration of the subdivision project issued in her name by the HLURB and other documents which prove that she was indeed the developer.29 Further, the appellate court ruled that the fact of registration of the road lots in Borbajo’s name was insufficient to defeat the right of the homeowners of the subdivision and preclude them from regulating their use and administration thereof in accordance with existing laws and

regulations.30 It likewise held that Borbajo had not complied with the requisites of a compulsory easement of right-of-way and pointed out the general rule that mere convenience for the dominant estate is not what is required by law as the basis for setting up a compulsory easement.31 Hence, this instant judicial recourse.

Noticeably, the appellate court dwelt at length on the question of whether Borbajo was the developer of the Hidden View Subdivision I as she claimed. Apparently, Borbajo submitted this point, with her focus set on the provisions of P.D. No. 957, as amended, ordaining that road lots may be titled only in the name of the owner of the subdivision or its developer. In the process, however, the Court of Appeals lost sight of the settled and decisive fact that Borbajo is one of the registered co-owners of the road lots along with Bongo. The evidence reveals that Borbajo and Bongo were issued TCTs, all dated 30 July 1991, for the three (3) road lots situated within the Hidden View Subdivision I. These titles were issued pursuant to the Deed of Absolute Sale dated 18 June 1991 which also mentioned the road lots as such.

As a registered co-owner of the road lots, Borbajo is entitled to avail of all the attributes of ownership under the Civil Code–jus utendi, fruendi, abutendi, disponendi et vindicandi.32 Article 428 of the New Civil Code is explicit that the owner has the right to enjoy and dispose of a thing, without other limitations than those established by law. A co-owner, such as Borbajo, is entitled to use the property owned in common under Article 486 of the Civil Code. Therefore, respondents cannot close the road lots to prevent Borbajo from using the same.

The Court of Appeals ruled that the road lots cannot be sold to any person pursuant to P.D. No. 957, as amended. It also pointed out that fraud is manifest in the acquisition of titles thereto. However, it is a settled rule that a Torrens title cannot be collaterally attacked.

It is a well-known doctrine that the issue as to whether title was procured by falsification or fraud can only be raised in an action expressly instituted for the purpose. A Torrens title can be attacked only for fraud, within one year after the date of the issuance of the decree of registration. Such attack must be direct, and not by a collateral proceeding. The title represented by the certificate cannot be changed, altered, modified, enlarged, or diminished in a collateral proceeding.33 The certificate of title serves as evidence of an indefeasible title to the property in favor of the person whose name appears therein.34

However, in upholding the efficiency value of the disputed titles for purposes of the present petition, we are not foreclosing any future determination by appropriate forum on the legality of Borbajo’s titles over the road lots. Verily, a separate case

for annulment of titles over the road lots is now pending before the court. There are serious allegations that the issuance of the TCTs over the road lots was tainted with fraud as evidenced by alterations made on the face of the certificates and discrepancies in the records of the contract of absolute sale filed before the Office of the Register of Deeds and the Notarial Division of the RTC of Cebu City.35 If the court finds that the titles of Borbajo were obtained fraudulently, her right to the road lots ceases as well as her right-of-way by virtue of said titles.

In the meantime, however, we are bound by the value in law and the evidentiary weight of the titles in the name of Borbajo. As long as the titles are not annulled, Borbajo remains registered a co-owner and therefore her right to use the road lots subsists.

Likewise, with Borbajo as a registered co-owner of the road lots, it is utterly pointless to discuss whether she is entitled to the easement of right of way. Both from the text of Article 64936 of the Civil Code and the perspective of elementary common sense, the dominant estate cannot be the servient estate at the same time. One of the characteristics of an easement is that it can be imposed only on the property of another, never on one’s own property. An easement can exist only when the servient and the dominant estates belong to different owners.37

Borbajo, being a registered co-owner of the three (3) road lots, is entitled to the injunctive relief.

The requisites to justify an injunctive relief are: (a) the existence of a right in esse or the existence of a right to be protected; and (b) the act against which injunction is to be directed as a violation of such right.38 A preliminary injunction order may be granted only when the application for the issuance of the same shows facts entitling the applicant to the relief demanded.39 A preliminary injunction is not proper when its purpose is to take the property out of the possession or control of one party and transfer the same to the hands of another who did not have such control at the inception of the case and whose legal title has not clearly been established.40

One final note. Respondents in their Answer41 neither claimed nor asked for the right to regulate the use of the road lots or that the road lots be donated to the Cebu City Government. Thus, there was utterly no basis for the trial court to include as it did its disposition along these lines in the decretal portion of its decision.

WHEREFORE, the Decision of the Court of Appeals dated 21 September 2001 is REVERSED and SET ASIDE and the writ of preliminary injunction issued by the Regional Trial Court of Cebu City, Branch 58, is made permanent, subject to the final outcome of Civil Case No. 21239 pending before the Regional Trial Court of Cebu City, Branch 9.

No costs.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, and Chico-Nazario, JJ., concur.

Callejo, Sr., J., on official leave.

THIRD DIVISION

HEIRS OF TAMA TAN BUTO, represented by JAYNOL TAMA TAN BUTO,

Petitioners,

G.R. No. 149609 Present:

- versus - ERNESTO T. LUY,

Respondent.

YNARES-SANTIAGO,   Chairperson,AUSTRIA-MARTINEZ,CHICO-NAZARIO, andNACHURA, JJ. Promulgated: __________________

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

This is a petition for review on certiorari assailing the Decision[1] dated April

30, 2001 and the Resolution[2] dated August 17, 2001 of the Court of Appeals (CA)

in CA-G.R. SP No. 62961.

The Facts

This case involves the ownership of a parcel of land with an area of seven

thousand nine hundred eighty-three (7,983) square meters, located

at Barrio Makar, General Santos City, and covered by Transfer Certificate of Title

(TCT) No. T-35185 presently in the name of Ernesto T. Luy (Luy).

On April 13, 1989, Luy purchased the land from Eligio T. Leyva (Leyva), its

then registered owner under TCT No. 34648.[3]On account of the sale, TCT No. T-

34648 was cancelled and TCT No. T-35185 was issued to Luy on April 19, 1989.[4]

The land originally formed part of the property described in plan SA-V-5244-D

covering an area of fifty-four thousand five hundred fifty-eight (54,558) square

meters.[5] On August 11, 1954, Datu Tama Tan Buto (Buto) applied for the

registration of the lot under plan SA-V-5244-D in accordance with Section 122 of

Act No. 486, in Land Registration Case No. N-62, before the Court of First Instance

(CFI) of Cotabato.[6]

Buto claims that he inherited the land from his late father Datu Buto

Tumagon who was in possession thereof continuously, publicly and exclusively in

the concept of an owner, long before the end of the Spanish regime. [7] The land

subject of Buto’s application is identical to Lot 3 of the approved Plan No. T3-50 of

the Makar Townsite covered by Sales Patent No. V-1113 and Original Certificate of

Title (OCT) No. V-160 in the name of Eligio T. Leyva.[8]

The Director of Lands and Leyva opposed the application for registration by

Buto. The Director of Lands objected to Buto’s application on the ground that the

subject property forms part of the public domain. Leyva, for his part, opposed the

application because he was the registered owner of the land, as evidenced by OCT

No. V-160 issued by the Register of Deeds of Cotabato.[9]

On February 27, 1961, the CFI issued a Decision [10] granting the application for

registration of the land in the name of Buto due to the finding of fraud in the

procurement of the sales patent by Leyva. The dispositive portion of the trial

court’s decision reads:

PREMISES CONSIDERED, the registration and adjudication of the aforementioned parcel of land, with all improvements existing thereon, is hereby decreed in favor of TAMA TAN BUTO, 55 years old, married to Ulana Baliwan, resident of Kindap, Kiamba, Cotabato, Philippines. The Register of Deeds of the Province of Cotabato is hereby directed to cancel Original Certificate of Title No. V-160 in the name of Eligio T. Leyva. SO ORDERED.[11]

The decision of the trial court was appealed by Leyva to the CA docketed as

CA-G.R. No. 30813-R. In a Decision[12] datedMarch 15, 1968, the CA reversed the

decision of the CFI and dismissed the application for registration of Buto. The

appellate court ruled that the trial court, sitting as a land registration court, has

limited jurisdiction. It has no jurisdiction to take cognizance of the application filed

by Buto since the land was already registered in the name of Leyva under OCT No.

V-160.[13] The pertinent findings of fact by the CA in the 1968 decision are herein

quoted:

After the requisite investigation conducted by the representatives of the Bureau of Lands of his Sales Application, and the requirements of the law complied with, the land was scheduled to be sold at public auction. At the said auction sale,

the applicant and the oppositor Leyva participated. Oppositor was declared the highest bidder and, consequently, the property was awarded to him (Leyva) by the Director of Lands. From this award applicant appealed but his appeal was dismissed. Accordingly, Sales Patent No. V-1113, covering the land in question was finally granted to the oppositor Leyva on October 9, 1954 (Exh. 65) and by virtue of the Sales Patent, Original Certificate of Title No. V-160 (Exh. 65) was issued in favor of the oppositor Leyva.[14]

The 1968 Decision of the appellate court further ruled that Buto failed to

pursue the remedies available to him as a person aggrieved by registration of a

land under Act No. 496, which is to file a petition for review within one (1) year

from the issuance of a decree of registration obtained by fraud; or to institute an

ordinary action for the cancellation and/or reconveyance of title. Buto, instead of

filing the appropriate remedy provided for by law, instituted an application for

registration of land previously registered. Hence, the Land Registration Court has

no jurisdiction over the same. Furthermore, Buto’s participation in the auction sale

is tantamount to his admission that the land belonged to the public domain. Having

taken that position, Buto is estopped from taking a stand contrary to it.[15]

The CA decision dated March 15, 1968 became final and executory on April 6,

1968 and was accordingly entered in the book of judgments.[16]

In 1999, the heirs of Buto inquired with the CA if an appeal was made on the

decision of the trial court dated February 27, 1961.[17] On September 10, 1999, the

Chief of the Judicial Records Division of the CA issued a Certification [18] to this

effect:

This is to certify that Land Reg. Case No. N-62, LRC Record No. 8541 of the Regional Trial Court (CFI), 12th Judicial Region of Cotabato City entitled “APPLICATION FOR REGISTRATION OF LAND/TAMA TAN BUTO,” was not received on appeal by this Court as per verification from our records of appealed civil case.[19]

In view of the above-cited certification, the heirs of Buto filed a Motion for

Execution of the February 27, 1961 decision of the trial court.[20] On May 12, 2000,

the trial court[21] in Registration Case No. N-62, entitled “Heirs of Tama Tan Buto,

represented byJaynol   Tama   v.   Heirs   of   Eligio   T.   Leyva, represented by

Emmanuel Leyva & Conception Leyva Cornelio, and the Director of Lands,” issued

an Order[22] granting the writ of execution. The dispositive portion of the Order

reads:

WHEREFORE, let a writ of execution be issued against private respondents, his heirs, and assigns, and successors-in-interests. SO ORDERED.[23]

On December 14, 2000, a Resolution[24] was issued by the Regional Trial Court

(RTC), Branch 22, General Santos City, ordering the cancellation of Luy’s certificate

of title and directed the issuance of a writ placing the heirs of Buto in possession of

the subject land. The dispositive portion of the Resolution reads:

WHEREFORE, PREMISES CONSIDERED, the Court hereby orders the cancellation of the remaining titles of Eligio Leyva and all derivative titles of certain persons/entities listed above from the fraudulent title of Eligio Leyva. The Register of Deeds of General Santos [City] is directed to cancel the titles listed in this resolution and in lieu thereof, he/she should issue titles in the name of the Heirs of TAMA TAN BUTO. Collaterally, let a writ of possession be issued in favor of petitioner and his heirs against all occupants of the lands, and the Sheriff is directed to place the Heirs of TAN BUTO in actual possession of the land. SO ORDERED.[25]

Luy filed a petition for certiorari and prohibition, docketed as CA-G.R. SP No.

62961, seeking to annul the RTC Resolution dated December 14, 2000. Luy alleged

the lack of jurisdiction of the judge who issued the same citing the decision of the

CA dated March 15, 1968 in CA-G.R. No. 30813-R.[26]

On April 30, 2001, the CA decided the case[27] granting the petition of Luy. The

pertinent portions of the decision read:

Considering that, as repeatedly stated, the decision of the registration court was the subject of an earlier reversal via the decision of this court promulgated on March 15, 1968, the resolution of [the] respondent judge issued on December 14, 2000, which ordered the cancellation of petitioner’s certificate of title and issuance of a writ to place private respondents in possession of the premises, is obviously without legal basis. Put a little differently, respondent judge did not have any jurisdiction to issue the same as in fact the whole registration proceedings have effectively been voided and set aside.

It may be stated in this connection that a sales patent issued in accordance with the Public Land Act and registered in conformity with the provisions of the Land Registration Act (Act No. 496) becomes irrevocable and enjoys the same privileges as Torrens title issued thereunder (Samonte v. Sambillon, 107 Phil. 198 [1960]). A certificate of title cannot be the subject of collateral attack (Trinidad v. Intermediate Appellate Court, 204 SCRA 524 [1991]). WHEREFORE, the petition is GRANTED. The resolution of respondent judge dated December 14, 2000 and [the] writ of possession dated January 9, 2001, and writ of demolition which may have been subsequently issued, are hereby SET ASIDE. Respondent Sheriff and respondent heirs of Tama Tan Buto, and all persons acting for and in their behalf, are hereby ENJOINED from entering petitioner’s property, blockading or barring people or any kind of motor vehicle from entering or leaving the same, and disturbing the business activities of petitioner therein. Respondent Register of Deeds is enjoined from canceling TCT No. T-35185 of petitioner and from issuing, in lieu thereof, a transfer certificate of title to the heirs of Tama Tan Buto. Costs against private respondents. SO ORDERED.[28]

A motion for reconsideration was timely filed by the heirs of Buto. However,

the same was denied in a Resolution[29] datedAugust 17, 2001. Hence, this recourse.

The Issue

 

The sole issue in this case is whether or not the heirs of Buto are barred

by res judicata.

The Ruling of the Court

 

          We rule in the affirmative.

The heirs of Buto can no longer question the decision of the CA dated March

15, 1968 which has long become final and executory. The judgment by a court of

competent jurisdiction operates as res judicata and bars subsequent cases filed by

the same parties and their successors-in-interest, involving the same subject matter

and cause of action.

The requisites of res judicata are: (a) The former judgment must be final; (b) it

must have been rendered by a court having jurisdiction over the subject matter and

the parties; (c) it must be a judgment on the merits; and (d) there must be,

between the first and the second actions, identity of parties, of subject matter, and

of cause of action.[30]

In this case, there is a concurrence of all these requisites.

The present petition assails the Decision dated April 30, 2001 and the

Resolution dated August 17, 2001 of the CA in CA-G.R. SP No. 62961. While the

aforesaid decision and resolution are not yet final, what is ultimately challenged in

the present case is the decision of the CA dated March 15, 1968 in CA-G.R. No.

30813-R which already attained finality on April 6, 1968.[31]

As mentioned above, the CA Decision dated April 6, 1968 is an offshoot of the

decision of the CFI in LRC Case No. N-62 dated February 27, 1961. Based on a

finding of fraud, the trial court cancelled OCT No. V-160 in the name of Leyva, and

adjudicated the land to Buto. On appeal, the CA reversed the decision of the trial

court. The CA pronounced that the finding of fraud by the trial court in the

procurement of registration of the subject parcel of land was unfounded. The

appellate court ruled that the participation of Buto in the auction sale conducted

by the Bureau of Lands is acquiescence by him that the land belonged to the public

domain. Due to Buto’s participation in the said auction sale, he was placed in

estoppel and may no longer insist on his claim of ownership over the land.

There is also no denying the identity of the parties in this petition and in the

previous case decided with finality by the CA in CA-G.R. No. 30813-R. Although the

name of Luy does not appear in LRC No. N-62 and in CA-G.R. No. 30813-R, [32] there

is still identity of parties. Luy, as successor-in-interest and as the new owner of the

land covered by TCT No. T-35185, is the legal substitute of Leyva. As previously

pronounced by this Court, there is identity of parties not only where the parties are

identical, but also when the parties are in privity with them such as between their

successors-in-interest by title subsequent to the commencement of the action,

litigating for the same thing, under the same title, and in the same capacity.[33]

The requirement of identity of cause of action is met in the present petition.

The heirs of Buto are invoking the same ground of fraud to nullify Sales Patent No.

V-1113 which was the basis for the issuance of OCT No. V-160 in the name of

Leyva. As previously stated, the parcel of land consisting of 7,983 square meters in

TCT No. T-35185 in the name of Luy, was part of the 54,558 square meters of land

covered by OCT No. V-160 in the name of Leyva. Leyva subdivided the land in OCT

No. V-160, and had transfer certificates of title covering the subdivided lots issued

in his name. By virtue of a valid contract of sale between Leyva and Luy, TCT No. T-

34648 in the name of Leyva was cancelled, and thereafter, TCT No. T-35185 was

issued to Luy.

As all the requisites of res judicata are present in this case, the heirs of Buto

can no longer question the March 15, 1968 Decision of the CA. The motions for the

issuance of writ of execution, writ of possession, and cancellation of derivative

titles from OCT No. V-160 filed by the heirs of Buto in RTC, Branch 22, General

Santos City, are barred by this principle, and the subsequent grant of said motions

by the trial court are without force and effect for being inconsistent with the rules

of procedure established by this Court. It is clear that the trial court no longer had

jurisdiction to act on these motions of the heirs of Buto because the decision of the

CA regarding the parcel of land in question is already final. A final judgment or

order on the merits by a court having jurisdiction over the subject matter and over

the parties, is conclusive between the same parties and their successors-in-interest

litigating on the same issue.[34]

The heirs of Buto argue that due process was not accorded to them in CA-G.R.

No. 30813-R. They claim that they were unaware of the CA decision. They also

claim that the notices from the court regarding the filing of briefs were not sent to

them. They further assert that the decision is of doubtful validity since the justices

who promulgated the same appear to have used the same pen in signing their

names in the decision.[35]

All these allegations of the heirs of Buto cannot be sustained. They are

merely conjectures unsupported by evidence. The findings of facts of the CA are

deemed conclusive upon this Court. Any question with regard to the findings of the

appellate court should have been timely brought on appeal or other appropriate

remedy provided for by law. Any question as to the soundness or validity of a

decision of any court of this land which has already attained finality may no longer

be reviewed by this Court.

Another reason why we can no longer entertain the present petition is

because after the expiration of one (1) year from the issuance of the decree of

registration, the certificate of title serves as evidence of an indefeasible title to the

property in favor of the person whose name appears thereon. [36] The certificate of

title that was issued to Leyva on November 27, 1953,[37] attained the status of

indefeasibility one year after its issuance. The attack on its validity on the ground of

fraud was reversed by the CA in theMarch 15, 1968 decision. From the finality of

said decision, any other attack on the certificate of title issued to Leyva must fail.

InDuran v. Olivia,[38] it was enunciated that:

The primary and fundamental purpose of the Torrens System of registration is to finally settle the titles to land and put to stop any question of legality of title thereto. That being the purpose of the law, there would be no end to litigation if every property covered by torrens title may still be relitigated in a subsequent land registration proceedings. Pursuant to this purpose, a homestead patent once registered under the Land Registration Act, can not be the subject matter of a cadastral proceeding, and any title issued thereon is null and void. The same may be said of a sales patent. Once a certificate of title is issued under the Land Registration Act in lieu of a sales patent, the land is considered registered under the Torrens system and the title of the patentee become indefeasible. x x x x

A Court of First Instance has no jurisdiction to decree again the registration of land already decreed in an earlier land registration case and a second decree for the same land is null and void. This is so, because when once decreed by a court of competent jurisdiction, the title to the land thus determined is already a res judicata binding on the whole world, the proceeding being in rem. The court has no power in a subsequent proceeding (not based on fraud and within the statutory period) to adjudicate the same title in favor of another person. Furthermore, the registration of the property in the name of the first registered owner in the Registration Book is a standing notice to the world that said property is already registered in his name. Hence, the latter applicant is chargeable with notice that the land he applied for is already covered by a

title so that he has no right whatsoever to apply for it. To declare the later title valid would defeat the very purpose of the Torrens system which is to quiet title to the property and guarantee its indefeasibility. It would undermine the faith and confidence of the people in the efficacy of the registration law. (Rojas, et al., v. The City of Tagaytay, et al., 106 Phil., 512; 60 Off. Gaz., 820.)[39]

WHEREFORE, premises considered, the Petition is hereby DENIED. Cost

against petitioners.

SO ORDERED.

ANTONIO EDUARDO B. NACHURA

Associate Justice

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 139672 March 4, 2009

GREGORIO ARANETA UNIVERSITY FOUNDATION, Petitioner, vs.THE REGIONAL TRIAL COURT OF KALOOKAN CITY, BRANCH 120, REGISTER OF DEEDS OF KALOOKAN CITY, NATIONAL HOUSING AUTHORITY, HEIRS OF GREGORIO BAJAMONDE AND SATURNINA MENDOZA, AND THE REMINGTON REALTY DEVELOPMENT, INC., Respondents.

D E C I S I O N

LEONARDO-DE CASTRO, J.:

In this petition for review under Rule 45 of the Rules of Court, herein petitioner Gregorio Araneta University Foundation (GAUF) assails and seeks to set aside the Decision1 dated March 31, 1999 of the Court of Appeals (CA) in CA-G.R. SP No. 23872 and its Resolution2 of August 16, 1999, denying petitioner's motion for reconsideration.

The assailed decision upheld the Joint Order3 dated August 29, 1986 and the Order4 dated December 23, 1988 of the Regional Trial Court (RTC) of Caloocan City, Branch 120, in Civil Case No. C-760 which, among others, directed the cancellation of GAUF’s Transfer Certificate of Title (TCT) No. C-24153 and the issuance in lieu thereof of new titles in the name of the respondent Heirs of Gregorio Bajamonde over Lots 54 and 75 of the Gonzales Estate.

The factual antecedents as found by the CA are quoted hereunder:

By virtue of a decision rendered on March 29, 1950 by the then Court of First Instance of Rizal in Civil Case No. 131 and affirmed by the Supreme Court on May 14, 1954, in G.R. No. L-4918, the Gonzales or Maysilo estate in Malabon, Rizal, with an area of 871,982 square meters and covered by TCT No. 35487, was expropriated by the Republic of the Philippines, with the understanding that the Government would resell the property to its occupants.

In view of the failure of the Government and its instrumentality, then Rural Progress Administration and later the People’s Homesite and Housing Corporation (PHHC), to implement the decision in Civil Case No. 131, the occupants and tenants

of the estate filed on October 20, 1960, a complaint in Civil Case No. 6376 (now Civil Case No. C-760) with the then Court of First Instance of Rizal (Pasig Branch) to compel PHHC to sell to the tenants their respective occupied portions of the Gonzales estate.

On April 29, 1961, the then Araneta Institute of Agriculture, now Gregorio Araneta University Foundation (GAUF) sought to intervene in Civil Case No. 6376 (Civil Case No. C-760) on the ground that 52 tenants of the property and Araneta Institute of Agriculture entered into an agreement or "Kasunduan" whereby the former conveyed to the latter their priority rights to purchase portion of the estate with an area of 507,376 square meters.

On the basis of this "Kasunduan," a compromise agreement dated November 28, 1961 was submitted in Civil Case No. 6376 (Civil Case No. C-760) which was duly approved by the court. Included in this compromise agreement are Lots 75 and 54 awarded to Gregorio Bajamonde.

xxx xxx xxx

Incidentally, it appears that on the basis of the "Kasunduan" and the forged compromise, Araneta University was able to register in its name with the Register of Deeds of Caloocan City Transfer Certificate of Title No. C-24153 for Lots 75 and 54 which as adverted to above, had been awarded to Gregorio Bajamonde.

However, in Civil Cases Nos. 17347 and 17364, both of the then Court of First Instance of Rizal, the compromise agreement entered into by and between Araneta University and the tenants on November 28, 1961 was declared null and void for being a forgery, and the partial decision rendered in accordance therewith was likewise declared null and void and of no force and effect.

On appeal to the Court of Appeals in CA-G.R. No. 45330-R the appellate court sustained the nullity of the "Kasunduan" and the compromise agreement in accordance thereto. xxx.

Thus, on motion by the heirs of Gregorio Bajamonde, the lower court in Civil Case No. C-760 issued the order dated August 29, 1986:

(1) Declaring that any transfer or conveyance of Lots 75 and 54 or any purpose thereof from Gregorio Bajamonde to Araneta Institute of Agriculture or Gregorio Araneta University Foundation, or their assignee

or successors-in-interest as rescinded, and to restore said lots 75 and 54 to the real owners, Gregorio Bajamonde and/or heirs;

(2) Ordering the Register of Deeds of Caloocan City to cancel TCT No. C-24153 issued in the name of Gregorio Araneta University Foundation and to issue a new Transfer Certificate of Title over lots 75 and 54 in the name of Gregorio Bajamonde or heirs;

(3) Ordering the Clerk of Court to issue writ of possession in favor of Gregorio Bajamonde or heirs.

And then on May 27, 1988 the lower court issued the order for issuance of a writ of execution for the enforcement of the joint order dated August 29, 1986, with a restraining order against Nonong Ridad, Graciano Napbua, Sergio Yeban, Gavino Miguel, Angel Cabrera and nine other persons, and their agents or representatives from squatting, occupying, staying and taking possession of Lots 75 and 54, or any portions thereof, including all the improvements and structures existing thereon.

GAUF Personnel Homeowners Association, Inc., et al. assailed the said order via a petition for certiorari, injunction and restraining order in this Court, docketed as CA-G.R. SP No. 14839, which was however dismissed for lack of merit in a decision promulgated by this Court on June 29, 1989. A petition for review filed with the Supreme Court, docketed as G.R. No. 89969 was likewise denied with finality on February 19, 1990.

Meanwhile, on December 23, 1988, respondent Judge Arturo Romero issued in Civil Case No. 6376 (now Civil Case No. C-760) an order for the execution of the aforesaid joint order dated August 29, 1986.

Eventually, (in compliance with the joint order dated December 23, 1988), TCT No. C-24153 for Lots 75 and 54 in the name of Araneta University was cancelled and TCT No. 174672 for lot 75 and TCT No. 174671 for lot 54 were issued by the Register of Deeds of Caloocan City on December 27, 1988 to the rightful owner thereof, Gregorio Bajamonde.

On June 29, 1989, the heirs of Bajamonde sold a portion of lot 54 consisting of 7,685 square meters to the herein other respondent, Remington Realty Development, Inc.5

On January 14, 1991, GAUF filed with the CA a petition for annulment6 of the aforementioned Joint Order dated August 29, 1986 and the Order dated December 23, 1988. In its petition, docketed as CA-G.R. SP No. 23872, GAUF essentially alleged that the twin orders in question were issued by the trial court without jurisdiction as the same constituted a collateral attack on its certificate of title (TCT No. C-24153) in violation of Section 48 of Presidential Decree No. 1529 (P.D. 1529),7 otherwise known as the Property Registration Decree.

In the herein challenged decision dated March 31, 1999, the appellate court denied the petition for annulment. In explanation of the denial, the CA ruled as follows:

It may not be remiss to state that by virtue of the "Kasunduan" which was submitted in Civil Case No. 6376 (now Civil Case No. C-760), GAUF was able to register in its name with the Register of Deeds of Caloocan City TCT No. C-24153 for Lots 75 and 54 which had been awarded to Gregorio Bajamonde. However, in Civil Cases Nos. 17347 and 17364, the said "Kasunduan" or compromise agreement was declared null and void for being a forgery. Such ruling was appealed to the Court of Appeals, CA-G.R. No. 45330-R which affirmed the decision rendered in Civil Cases Nos. 17347 and 17634. Correspondingly, xxx, the finality of the orders impugned in the present petition cannot be therefore disturbed without impugning likewise the finality of the orders rendered in Civil Cases Nos. 17347 and 17364 rendered by the then Court of First Instance of Rizal and affirmed likewise by this Court in CA-G.R. No. 45330-R in a decision promulgated on February 7, 1973.

It clearly appears that the basis of respondent judge in issuing the questioned order is the declared nullity of the "Kasunduan." It was in Civil Case No. 6376 (now Civil Case No. C-760) where the nullified "Kasunduan" was submitted by the petitioner and the private respondents herein; it was in the same case where, by virtue of the said "Kasunduan,"petitioner GAUF was able to register in its name with the Register of Deeds of Caloocan City TCT No. C-24153 for Lots 54 and 75 which had been awarded to Gregorio Bajamonde. Accordingly, it is also in the same case and court where the cancellation should be sought as a result of the nullity of the "Kasunduan."

With its motion for reconsideration having been denied by the CA in its resolution of August 16, 1999, petitioner GAUF is now before this Court via the instant recourse submitting for our consideration the following arguments:

1. THE JOINT ORDER OF AUGUST 29, 1986 AND THE DECEMBER 23, 1988 ORDER OF THE RESPONDENT REGIONAL TRIAL COURT ARE NULL AND VOID AB INITIO FOR LACK OF JURISDICTION BECAUSE IT (SIC) AMENDED THE ALREADY FINAL AND

EXECUTORY ORDER OF JULY 19, 1978 DISMISSING AND GRANTING THE WITHDRAWAL OF THE COMPLAINT IN CIVIL CASE NO. C-474 OF THE THEN CFI OF RIZAL FILED BY THE DECEASED GREGORIO BAJAMONDE;

2. THE RESPONDENT REGIONAL TRIAL COURT HAS NO JURISDICTION TO CANCEL PETITIONER GAUF'S TCT NO. C-24153 IN THE HEARING OF THE OMNIBUS MOTION DATED MAY 12, 1986 AND MANIFESTATION AND MOTION DATED JULY 1, 1986 OF THE HEIRS OF GREGORIO BAJAMONDE. THE SAID PROCEEDINGS CONSTITUTE A COLLATERAL ATTACK ON PETITIONER'S TCT NO. C-24153 WHICH IS PROHIBITED BY SECTION 48 OF P.D. NO. 1529, OTHERWISE KNOWN AS THE PROPERTY REGISTRATION DECREE;

3. "A VOID JUDGMENT MAY BE ASSAILED OR IMPUGNED AT ANY TIME" [ZAIDE, JR. VS. COURT OF APPEALS, 184 SCRA 531];

4. THE RULING OF THE COURT OF APPEALS THAT THE ISSUES RAISED IN THE PETITION TO ANNUL JUDGMENT ARE ALLEGEDLY BARRED BY THE RULE OF RES JUDICATA IS CONTRARY TO LAW. THE SUPPOSED RULINGS IN CIVIL CASE NOS. 17347 AND 17364, AS WELL AS THE RULING IN CA-G.R. NO. 45330-R DO NOT BAR THE PETITION TO ANNUL JUDGMENT.8

Fundamentally, petitioner’s arguments center on the question of whether or not the trial court has jurisdiction to issue the Joint Order dated August 29, 1986 and December 23, 1988 Order, which directed the cancellation of the petitioner's title over Lots 54 and 75 of the former Gonzales /Maysilo Estate and ordered the issuance of new titles over the same lots in the name of the Heirs of Gregorio Bajamonde.

It is the petitioner’s thesis that the orders in question directing the cancellation of its TCT No. 24153 constituted a collateral attack on its title, a course of action prohibited by Section 48 of P. D. No. 1529 because said orders were issued in connection with Civil Case No. C-760, a suit for specific performance and damages and not a direct proceeding for the cancellation of its title. On this premise, petitioner argues that the trial court is bereft of jurisdiction to issue the disputed orders.

We find the present petition unmeritorious.

An action or proceeding is deemed an attack on a title when the object of the action is to nullify the title, and thus challenge the judgment pursuant to which the

title was decreed. The attack is direct when the object of the action is to annul or set aside such judgment, or enjoin its enforcement. On the other hand, it is indirect or collateral when, in an action or proceeding to obtain a different relief, an attack on the judgment is nevertheless made as an incident thereof.9

Here, while it may be true that Civil Case No. C-760 was originally an action for specific performance and damages, nonetheless the case cannot constitute a collateral attack on the petitioner's title which, to begin with, was irregularly and illegally issued. It bears stressing that the source of GAUF's title was the Compromise Agreement purportedly executed by Gregorio Bajamonde, et al. on November 28, 1961. This Compromise Agreement was approved by the trial court in Civil Case No. C-760 in its Partial Decision dated December 23, 1961. As petitioner’s own evidence shows, the subject property was conveyed to it in compliance with and in satisfaction of the said Partial Decision in Civil Case No. C-760 and the writ of execution issued in connection therewith.10 The same Compromise Agreement and Partial Decision, however, were declared null and void in Civil Cases Nos. 17347 and 17364 and likewise effectively invalidated in CA-G.R. No. 45330-R.11 The rule that a title issued under the Torrens System is presumed valid and, hence, is the best proof of ownership does not apply where the very certificate itself is faulty as to its purported origin,12 as in the present case.

With the reality that the presumption of authenticity and regularity enjoyed by the petitioner’s title has been overcome and overturned by the aforementioned decisions nullifying the aforesaid Compromise Agreement from whence the petitioner's title sprung, that title can never be indefeasible as its issuance was replete with badges of fraud and irregularities that rendered the same nugatory. Well-settled is the rule that the indefeasibility of a title does not attach to titles secured by fraud and misrepresentation.13 In view of these circumstances, it was as if no title at all was ever issued in this case to the petitioner and therefore this is hardly the occasion to talk of collateral attack against a title.

We agree with the CA that the trial court in Civil Case No. C-760 had jurisdiction to annul petitioner’s title. It must be emphasized that, notwithstanding the original denomination of the said action as one for specific performance and damages, it was petitioner GAUF no less which sought to intervene in Civil Case No. C-760 and claimed that it has rights or interests in the subject matter being litigated therein. GAUF voluntarily submitted in Civil Case No. C-760 the purported "Kasunduan" which, in turn, became the basis of the Compromise Agreement and the Partial Decision dated December 23, 1961. It is undeniable that petitioner’s TCT No. C-24153 was issued in enforcement or execution of a partial decision in Civil Case No. C-760. As it were, the validity of petitioner’s title was an issue litigated in Civil Case

No. C-760 on account of the presentation therein of the Compromise Agreement which, to stress, was the springboard of petitioner’s title. Hence, when that same Compromise Agreement and the Partial Decision in connection therewith were eventually nullified, the trial court acted very much within its jurisdiction in ordering the cancellation of petitioner's title in the same Civil Case No. C-760.

Lest it be forgotten, it was likewise petitioner itself and/or its privies or assignees which instituted numerous petitions relative to the validity/enforceability of the Compromise Agreement and the Partial Decision and the validity of petitioner’s certificate of title. In fact, in one of those petitions, the appellate court ordered the trial court to hear and pass upon all unresolved incidents in Civil Case No. C-760, including motions assailing the Compromise Agreement and the Partial Decision upon which petitioner’s title was based.14 Clearly then, when the trial court granted respondent heirs’ Omnibus Motion and Motion to Vest Title in its assailed Joint Order of August 29, 1986 and Order dated December 23, 1988, respectively, that court was unquestionably exercising its jurisdiction to hear and resolve those incidents pursuant to the appellate court’s directive.

With the above, petitioner’s challenge with respect to the jurisdictional competence of the trial court to order the cancellation of its certificate of title in Civil Case No. C-760 must simply collapse. Quite the contrary, the trial court having acquired jurisdiction not only over the subject matter of the case but also over the parties thereto, it was unnecessary to institute a separate action to nullify petitioner’s title. Having voluntarily submitted itself to the jurisdiction of the trial court through the process of intervention, it is rather too late in the day for the petitioner to now turn its back and disclaim that jurisdiction, more so where, as here, an adverse judgment has already been rendered against it. Case law teaches that if the court has jurisdiction over the subject matter and the person of the parties, its ruling upon all questions involved are mere errors of judgment reviewable by appeal.15 Any error in the judgment of the trial court should have been raised by petitioner through appeal by way of a petition for review with the CA. Having failed to file such an appeal, petitioner cannot anymore question the final and executory order, in a petition for annulment with the CA, as petitioner did in this case.1avvphi1.zw+

Interestingly, in its present petition for review, GAUF concede the various decisions which have declared the Compromise Agreement and the Partial Decision void but argues that the annulment of the Compromise Agreement will not affect the validity of petitioner’s TCT No. C-24153 on the ground that GAUF’s title was allegedly not issued by virtue of the Compromise Agreement but rather the purported withdrawal by Gregorio Bajamonde of his complaint in Civil Case No. C-

474 which was an action for annulment of the Compromise Agreement dated November 28, 1961. We cannot agree with petitioner’s opinion on this point. The fact still remains that the ultimate source of petitioner’s right to Lots 54 and 75 is the voided Compromise Agreement.

In any event, the purported withdrawal of Civil Case No. C-474 and the authenticity of the amicable settlement attached to the present petition are factual issues improperly and belatedly raised in this appeal. It is elementary that in a petition for review under Rule 45 only legal, not factual, issues may be raised before this Court unless exceptional circumstances exist to warrant a review of the facts.16 A perusal of the GAUF’s petition filed with the CA would also show that the alleged valid amicable settlement of Civil Case No. C-474 was not raised therein as a ground for the annulment of the Joint Order dated August 29, 1986 and December 23, 1988 Order. Petitioner is, therefore, precluded from raising this argument for the first time on appeal. All in all, we find no reason to disturb the trial court’s finding that:

Even on the assumptions that the void "Compromise Agreement" dated November 28, 1961 and the subsequent Amicable Settlement dated July 13, 1978 between the intervenor and Gregorio Bajamonde or heirs were both valid, the tenants, particularly Gregorio Bajamonde or heirs, have all the rights (sic) to regard as rescinded the said two (2) agreements by reason of the consistent refusals or failures of the intervenor to fully comply with or to abide with its obligations or commitments to the affected tenants.

xxx xxx xxx

On the part of the Intervenor, it cannot insist on the enforcement of the terms and conditions of the Amicable Settlement dated July 13, 1978 against the tenant Gregorio Bajamonde or heir over Lots 75 and 54 of the Gonzales Estate because it was not judicially approved by this Court nor by other competent courts and that it was also regarded as rescinded by the heirs of Gregorio Bajamonde.17

In light of the foregoing, this Court is inclined to believe that the instant petition was a last-ditch effort on the part of petitioner GAUF to secure a reversal of the final and executory orders of the trial court in Civil Case No. C-760. However, and as correctly pointed out by the CA in the decision under review, Rule 47 of the Revised Rules of Civil Procedure18 permits annulment of judgment only on two (2) grounds, to wit: (a) that the judgment sought to be annulled is void for want of jurisdiction or lack of due process of law; or (b) that it has been obtained by fraud, neither of which obtain herein.

In closing, let it be mentioned that a writ of execution for the enforcement of the assailed August 29, 1986 Joint Order had already been issued by the trial court in its Order of May 27, 1988, which Order was upheld by the CA in CA-G.R. SP No. 1483919 and ultimately by this Court no less in G.R. No. 89969.20 Petitioner, its privies, assignees and/or successors in interest are bound by these final and executory decisions and orders. For this Court now to annul the Joint Order is for it to vacate its Resolution in G.R. No. 89969. The policy of judicial stability, not to mention the confusion such course of action would entail in the speedy administration of justice simply dictates the rejection of petitioner’s legal maneuverings to avoid the consequences of adverse decisions and orders that have long become final and executory.

IN VIEW WHEREOF, the instant petition is DENIED and the assailed decision dated March 31, 1999 of the Court of Appeals and its resolution dated August 16, 1999 in CA-G.R. SP No. 23872 are hereby AFFIRMED.

Costs against the petitioner.

SO ORDERED.

TERESITA J. LEONARDO-DE CASTROAssociate Justice

THIRD DIVISION

RENATO S. SANCHEZ,

Petitioner,

- versus -

RODOLFO M. QUINIO and ISMAEL M. QUINIO,

Respondents.

G.R. No. 133545

Present:

PANGANIBAN, J., Chairman

SANDOVAL-GUTIERREZ,

CORONA,

CARPIO MORALES, and

GARCIA, JJ.

Promulgated:

July 15, 2005

x-----------------------------------------------------------------------------------------x

D E C I S I O N

GARCIA, J.:

Under consideration is this appeal by way of a petition for review on

certiorari under Rule 45 of the Rules of Court to nullify and set aside the following

issuances of the Court of Appeals in CA-G.R. CV No. 51764, to wit:

1. Decision dated 27 January 1998,[1] reversing and setting aside an earlier decision of the Regional Trial Court at Makati City dismissing respondents’ complaint per quieting of title, etc., thereat commenced by them against, among others, the herein petitioner Renato S. Sanchez; and

2. Resolution dated 28 April 1998,[2] denying petitioner’s

motion for reconsideration.

The material facts, as found by the trial court and as adopted by the

Court of Appeals, may briefly be stated, as follows:

At the core of this case is a parcel of land with an area of 300 square

meters, more or less, located at San Antonio Valley I, Parañaque City and originally

owned by and registered in the name of one Celia P. Santiago (Santiago,

hereinafter) under Transfer Certificate of Title (TCT) No. 391688 of the Registry of

Deeds of Rizal. On 12 July 1979, Santiago sold the disputed parcel to herein

respondents Rodolfo M. Quinio and Ismael M. Quinio(collectively the “Quinios”).

Following the registration of the conveying deed of absolute sale, the Registry of

Deeds of Metro Manila, District IV (Makati) issued on 13 July 1979 TCT No. S-89991

in herein respondents’ name.

A little over thirteen (13) years later, one Renato Sanding, by virtue of a

deed of absolute sale covering the same parcel of land purportedly executed in his

favor on 22 February 1993 by Santiago, was issued TCT No. 70372 of the Registry

of Paranaque. Renato Sanding subsequently sold the property to Romeo Abel,

married to Ma. Nora S. Abel, resulting in the issuance in the latter’s name of TCT

No. 72406.

In turn, Romeo Abel sold the subject parcel of land to herein

petitioner Renato Sanchez on 16 November 1993, executing for this purpose a

deed of absolute sale in the latter’s favor. This sale was registered with the

Registry of Deeds of Paranaque, and, on 17 May 1994, TCT No. 81125 was issued in

the name of petitioner.

It appears that, before proceeding with the purchase, petitioner, who

happened to own the lot adjacent to the parcel sought to be acquired, repaired to

the Registry of Deeds of Paranaque to look into the authenticity of TCT No. 72406

which was then in the hands of Romeo S. Abel. Only upon being assured of the

authenticity of Romeo S. Abel’s TCT No. 72406 did petitioner conclude the

purchase.

Disturbed, as may be expected, when later apprised that their property

was the subject of several transactions and that a building was being constructed

thereon pursuant to a building permit issued to Renato S. Sanchez, the Quinios

instituted on 12 May 1994 before the Regional Trial Court at Makati City a

complaint for quieting of title and cancellation of titles against Sanchez and the

spouses Romeo Abel and Ma. Nora Abel, which complaint, docketed as Civil Case

No. 94-1736, was raffled to Branch 147 of the court.

After due proceedings, the trial court, in a decision dated 6 July 1995,

[3] rendered judgment dismissing the complaint, it being its holding that Sanchez

was an innocent purchaser for value of the disputed property and, therefore, has a

better right over it than the Quinios.

Following the denial of their motion for reconsideration, the Quinios

went on appeal to the Court of Appeals whereat their recourse was docketed

as CA-G.R. CV NO. 51764. As stated at the outset hereof, the Court of Appeals, in a

decision dated 27 January 1998,[4] reversed and set aside the appealed decision of

the trial court, thus:

WHEREFORE, the   decision   appealed   from   is 

hereby REVERSED. Transfer   Certificate   of   Title   No.   S-89991 issued on July 13, 1979 in favor of Rodolfo M. Quinio and Ismael M.  Quinio   is   forever  quieted;  Transfer  Certificate  of  Title  No. 72406 issued on May 19, 1993 in favor of Spouses Romeo S. Abel   and   Ma.   Nora   S.   Abel   is   hereby ordered CANCELLED including   any   and   all   titles,   deeds   or proceedings   derived   or   that   may   emanate   therefrom; Defendant-appellee Renato S. Sanchez and any and all persons acting in his behalf   is ordered to DEMOLISH and REMOVE any and all buildings, structures, tenements and works constructed, built and made on the property covered by Transfer Certificate of   Title   No.   S-89991;   Defendants-appellees   to   jointly   and solidarily pay plaintiffs-appellants attorney’s fees in the amount of TEN THOUSAND (P10,000.00) PESOS.   Costs   against defendants-appellees.

 SO ORDERED.

In a subsequent resolution[5] dated 28 April 1998, the appellate court

denied herein petitioner’s motion for reconsideration.

Hence, this recourse by petitioner Renato S. Sanchez.

As we see it, the singular issue to be resolved is who between petitioner,

on one hand, and respondents, on the other, is entitled to the subject land.

Petitioner latches his case on his being an innocent purchaser for value of

the land in question, and asserts the rights and guarantees accorded by law on such

purchaser.

We find no merit in the petition.

It cannot be over-emphasized that Santiago sold the subject land in July

1979 to respondents, who lost no time in registering the conveying deed of sale

and securing title in their names. From that time on, ownership and other rights

flowing therefrom over the land in question pertained to respondents. In other

words, Santiago was no longer possessed of transmissible rights over such property

when she executed on 22 February 1993 a deed of sale in favor of Renato Sanding.

The aforesaid deed, in fine, could not have conveyed valid title over the land.

Lest it be overlooked, Santiago, testifying below, denied having executed

the deed of sale adverted to in favor of Renato Sanding. But assuming, ex 

gratia argumenti, the authenticity of such deed and the bona   fides of the

corresponding transaction, the consequent issuance in Renato Sanding’s name of

TCT No. 70372 – and Romeo S. Abel’s TCT No. 72406 and petitioner’s TCT No.

81125 descending therefrom - would not defeat respondents’ superior right to the

property in question. For, in cases where two (2) certificates of title covering the

same parcel of land are issued to two (2) different persons, he who holds in good

faith that certificate which is earlier in date has superior right over the land covered

thereby. Thus, we said in Margolles vs. Court of Appeals:[6]

Lastly, it is a settled rule that when two certificates of

title are issued to different persons covering the same land in whole or in part, the earlier in date must prevail, and, in case of successive registrations where more than one certificate is issued over the land, the person holding a prior certificate is entitled to the land as against a person who relies on a subsequent certificate. The titles of the petitioners, having emanated from an older title, should thus be upheld.

Even if petitioner and Romeo S. Abel, the former’s immediate

predecessor-in-interest, are to be accorded the status of innocent purchasers for

value, as the term is juridically understood, the superior right of respondents will

still have to be posited and recognized. Baltazar vs.  Court  of  Appeals[7] explains

why:

We might assume for the moment and for purposes

of argument only that Baltazar’s vendees had successfully proven they were purchasers in good faith and for value. Even so, as between two persons both of whom are in good faith and both innocent of any negligence, the law must protect and prefer the lawful holder of registered title over the transferee of a vendor bereft of any transmissible rights. Under the foregoing principle derived from the above case law, Baltazar’s vendees have no rights as against Good Earth. Their recourse is against Baltazar himself.

In Torres vs. Court of Appeals,[8] we also said:

Moreover, even if We grant Mota the status of an innocent mortgagee, the doctrine relied upon by the appellate court that a forged instrument may become the root of a valid title, cannot be applied where the owner still holds a valid and existing certificate of title covering the same interest in a realty. The doctrine would apply rather when, as in the cases for example of De la Cruz v. Fabie, 35 Phil. 144 [1916], Fule v. De Legare, No. L-17951, February 28, 1963, 7 SCRA 351, and Republic v. Umali, G.R. No. 80687, April 10, 1989, the forger thru insidious means obtains the owner's duplicate certificate of title, converts it in his name, and subsequently sells or

otherwise encumbers it to an innocent holder for value, for in such a case the new certificate is binding upon the owner (Sec. 55, Act 496; Sec. 53, P.D. No. 1529). But if the owner holds a valid and existing certificate of title, his would be indefeasible as against the whole world, and not that of the innocent holder's. ‘Prior tempore potior jure’ as We have said in Register of Deeds v. Philippine National Bank, No. L-17641, January 30, 1965, 13 SCRA 46, citing Legarda v. Saleeby, 31 Phil. 590, Roman Catholic Bishop v. Philippine Railway, 49 Phil. 546, Reyes v. Borbon, 50 Phil. 791 (Emphasis supplied).

It may be that one dealing with property brought under the Torrens

system of land registration may rely, as petitioner did with respect to the land in

question, on what appears on the face of the covering certificate without inquiring

further as to the title of the seller or mortgagor.[9] But the guarantee generally

accorded a Torrens title holder to be secured in his ownership as long as he has not

voluntarily disposed of any right over the covered property admits of a couple of

exceptions. C.N. Hodges vs. Dy Buncio & Co., Inc.,[10] deals with one of them, thus:

The claim of indefeasibility of the petitioner's title

under the Torrens land title system would be correct if previous valid title to the same parcel of land did not exist. The respondent had a valid title x x x It never parted with it; it never handed or delivered to anyone its owner's duplicate of the transfer certificate of title; it could not be charged with negligence in the keeping of its duplicate certificate of title or with any act which could have brought about the issuance of another certificate upon which a purchaser in good faith and for value could rely. If the petitioner's contention as to

indefeasibility of his title should be upheld, then registered owners without the least fault on their part could be divested of their title and deprived of their property. Such disastrous results which would shake and destroy the stability of land titles had not been foreseen by those who had endowed with indefeasibility land titles issued under the Torrens system (Emphasis supplied).

At bottom then, the present petition basically features an instance where

two (2) different persons acquired by purchase at different times from the same

owner (Santiago), the same piece of registered land. And although the records do

not provide clear answer on how the second vendee, Renato Sanding, in this case,

was able to secure a certificate of title despite the existence of an outstanding valid

certificate of title in the hands and name of the first vendee, herein respondents,

who appear to have never relinquished the document, the stubborn reality is that

such a second title was issued and whence two (2) other titles eventually

descended.

Following the lessons imparted by Margolles,  Baltazar,  Torres and C.N. 

Hodges, supra, however, whatever right Renato Sanding may have acquired over

the disputed property cannot prevail over, but must yield to, the superior right

thereon of respondents, as the appellate court rightfully held. And, inasmuch as his

title is traceable to that of Romeo S. Abel, who in turn derived his right and title

from Renato Sanding, petitioner cannot plausibly have better rights than either

Romeo S. Abel or Renato Sanding, since no one can acquire a right greater than

what the transferor himself has.[11] As the saying goes, the spring cannot rise higher

than its source.

In all, this Court finds and so holds that the assailed decision and

resolution of the appellate court decreeing the cancellation of TCT No. 72406 in the

name of Romeo S. Abel and the derivative TCT No. 81125 in the name of petitioner

Renato S. Sanchez, are in accordance with law and applicable jurisprudence.

FOR ALL THE FOREGOING, the instant petition is hereby DENIED and

the assailed decision and resolution of the Court of Appeals AFFIRMED.

No pronouncement as to costs.

SO ORDERED.

Republic of the PhilippinesSUPREME COURTManila

FIRST DIVISION

G.R. No. 152483 July 14, 2006

RURAL BANK OF SIATON, (NEGROS ORIENTAL), INC., petitioner, vs.FELIX MACAJILOS and QUIRICO MACAJILOS, JR., respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

This petition for review on certiorari assails the April 18, 2001 Decision1 of the Court of Appeals in CA-G.R. CV No. 51290, which affirmed the July 12, 1995 Decision2 of the Regional Trial Court of Negros Oriental, Dumaguete City, Branch 39 in Civil Case No. 9049, and the November 12, 2001 Resolution3 denying petitioner Rural Bank of Siaton, Inc.'s (RBSI) motion for reconsideration.

The controversy arose from the complaint for removal of cloud over title to and/or recovery of real property and damages filed by Felix Macajilos and Quirico Macajilos, Jr. (Macajilos) against RBSI and Fidela Macalipay (Fidela) on July 27, 1987.

In their complaint,4 Macajilos alleged that they are the children of the late Gregoria Macalipay Macajilos who during her lifetime owned and possessed a parcel of residential land situated at Poblacion, Siaton, Negros Oriental with an area of 441 square meters; that upon Gregoria's death on July 25, 1959, Macajilos inherited the subject property as compulsory heirs of Gregoria, their father Quirico Macajilos, Sr. having predeceased Gregoria; that in 1975, Macajilos allowed Juanito Macalipay, a nephew of Gregoria to build a house on the subject property where he lived together with his wife Fidela, and their son, Lamberto; that Fidela and Lamberto continued to live in the house even after the death of Juanito; that on February 12, 1975, Fidela executed an "Affidavit of Heirship" before a Notary Public at Dumaguete City falsely claiming to be the sole heir of Gregoria Macalipay and adjudicating to herself the subject property; that the tax declaration in the name of Gregoria Macalipay was cancelled and transferred to the name of Fidela under Tax Declaration No. 022478; that Lamberto was the manager of RBSI when Fidela obtained a loan using as collateral the subject property; that Fidela defaulted thus the subject property was foreclosed and sold at public auction with RBSI as the only and highest bidder; that Fidela failed to redeem the property thus RBSI was able to transfer the tax declaration to its name; that Macajilos have always been in actual possession under claim of ownership of the subject property from the time of their mother's death up to the present; that RBSI knew that Fidela did not own the subject property; that Macajilos filed a criminal case for estafa through falsification of public document (Criminal Case No. 9096 before the Municipal Trial Court in Cities, Dumaguete City, Branch I) against Fidela and Lamberto immediately upon discovery of the foreclosure sale; that in her counter affidavit in the preliminary investigation of that criminal case, Fidela denied that she signed the "Affidavit of Heirship".

In its answer,5 RBSI claimed it considered Fidela to be the owner of the subject property as she was in actual physical possession thereof when she applied for a loan; that Macajilos maliciously built a house on the subject property pretending to be the owners thereof; that, if they owned the subject property, they are already in estoppel since the mortgage document was duly registered with the Register of Deeds and they have constructive notice thereof; that the extrajudicial foreclosure and the public auction proceedings were duly published and that the Sheriff's Certificate of Sale in favor of RBSI and the final deed of sale were registered with the Register of Deeds of the Province of Negros Oriental.

On the other hand, Fidela averred in her answer6 that the property belonged to her late husband, Juanito Macalipay; that she lacks formal education and anything she did was the work of her son, Lamberto, who was at the time the manager of RBSI.

After trial, the trial court found in favor of Macajilos, thus:

WHEREFORE, on the basis of the foregoing discussion, judgment is hereby rendered:

1. Declaring the foreclosure of the mortgaged property null and void ab initio;

2. Declaring [Macajilos] the rightful owners of the land subject matter of this case;

3. Ordering the Provincial Assessor's Office to cancel Tax Dec. No. 022478 in the name of Fidela Macalipay and issue another Tax Declaration in the name of Felix Macajilos and Quirico Macajilos covering the same property;

4. Ordering the Rural Bank of Siaton, Inc. to immediately release from mortgage the land covered by Tax Dec. 022478 in the name of Fidela Macalipay; and

5. Ordering the Rural Bank of Siaton, Inc. to pay [Macajilos] the following:

a. P10,000.00 as moral damages;

b. P10,000.00 as exemplary damages;

c. P5,000.00 as attorney's fees; and

d. costs of the suit.

SO ORDERED.7

The trial court noted that RBSI failed to ascertain whether Fidela was the lawful owner of the property being mortgaged. Rather, it relied on the tax declaration in Fidela's name and the "Affidavit of Ownership and Possession" that she executed. No investigator inspected the premises. Thus, the trial court ruled that RBSI must suffer for its failure to investigate and determine the lawful owner of the subject property who turned out to be Macajilos.

The Court of Appeals denied RBSI's appeal and affirmed the decision of the trial court in toto. Hence, this petition.

The assigned errors revolve around four principal issues: (1) who between Macajilos and RBSI has a superior right over the property, (2) assuming the Macajilos brothers have a better right, whether RBSI was a mortgagee-buyer in good faith of the subject property, (3) assuming the Macajilos brothers have a better right, whether they are barred from recovering the subject property due to estoppel and laches, and (4) whether the award of damages in favor of Macajilos was proper.

RBSI principally raises questions of fact that have been settled by the court a quo. As a general rule, questions of fact are not covered by a petition for review under Rule 45 of the Rules of Court because it is limited to a review of errors of law committed by the appellate court especially so in the case at bar where the findings of fact of the trial court and Court of Appeals coincide and are, thus, binding on this Court.8 However, RBSI claims that the instant case falls under recognized exceptions to this general rule because the lower courts' conclusions are grounded entirely on speculations, surmises or conjectures,9 and are based on a misapprehension of facts.10

After a review of the records, we rule that RBSI failed to impugn the ruling of the lowers courts on the main issue of ownership over the subject property. However, the award of damages should be modified by deleting the award of exemplary damages for lack of factual and legal bases.

Anent the first issue, RBSI contends that Fidela owned the mortgaged property based on her answer to the complaint where she asserted that she inherited the subject property from her late husband, Juanito Macalipay. It argues that the lower courts should not have given credence to the subsequent repudiation by Fidela of her ownership over the subject property during the pre-trial conference as the same was done allegedly in exchange for her being dropped from the instant case.

The contention lacks merit.

To begin with, Fidela was not dropped from the case. During the hearing on April 18, 1988, the trial court sought to have Fidela dropped from the case considering her admission during the pre-trial conference that Macajilos owned the subject property. However, counsel for Macajilos objected.11 Consequently, Atty. Rosalinda Ybañez continued to represent Fidela throughout the trial of this case.

Moreover, RBSI has failed to produce evidence to show that Fidela's admission was not freely and knowingly given. While it is true that Fidela was no longer presented as a witness after the pre-trial conference for reasons not borne out by the records, this does not necessarily mean that her repudiation of ownership over the subject property was prompted by ill-will against RBSI. The pre-trial order dated December 2, 1987 reflected Fidela's admissions during the pre-trial conference:

2. Co-defendant Fidela Macalipay's claims: that the property in question did really belong to plaintiffs [herein respondents Macajilos brothers] by virtue of their rightful succession to the same; that it was her own son, Lamberto Macalipay, who subsequently became an officer-in-charge as manager of co-defendant Rural Bank of Siaton, who so maneuvered her into signing certain documents, in effect making her a debtor of Rural Bank of Siaton, which circumstances were never explained to her by her son Lamberto Macalipay; and that as a consequence of it, said Rural Bank of Siaton did grant a loan to her although the proceeds of said loan only went into the hands of Lamberto Macalipay, her son; that Fidela Macalipay recognizes the fact that she absolutely had nothing, and in fact still has nothing, to do with the property in question, the same property's ownership being always that of plaintiffs, which ownership she recognizes;12 (Italics supplied)

Although the records do not contain the transcript during the pre-trial conference, it should be noted that on April 18, 1988, the trial court recalled the events that transpired during the pre-trial conference where Fidela freely and knowingly

acknowledged that Macajilos were the rightful owners of the subject property, thus:

COURT:

Then, what happened now[?] Did you convince Fidela that she was just a daughter-in law? In this case, Fidela was a daughter-in-law of…

Logronio:13

The first cousin of the plaintiffs.

COURT:

Fidela Macalipay whom you are representing is merely the daughter…

Ybañez:14

Is the mother of Lamberto…

COURT:

Wait a minute, … is the wife of the plaintiff's cousin?

Ybañez:

Yes, your honor.

COURT:

And even her husband, the plaintiff's cousin, had nothing to do with this property, right?

Ybañez:

Yes, that is what the defendant

COURT:

And even your client, the co-defendant Fidela Macalipay, admits that it was only her son, Lamberto, who soon became OIC…

Logronio:

Who was the OIC at the time.

COURT:

Yes, who soon became the OIC of the Rural Bank who did something using Fidela's name. Is that correct?

Logronio:

Yes, your honor.

x x x x

COURT:

But Fidela said, "Yes, the plaintiff really owned this property," admitting it.

Ybañez:

Yes, your honor.

COURT:

What is the problem of this case now?

Logronio:

So, we have no more problem with Fidela, as far as ownership is concerned. Our target now is the Rural Bank of Siaton who

appears to have purchased this property and the foreclosure, and have it transferred to their name and even threatening to eject the plaintiffs who are the real owners x x x.15 (Emphasis supplied)

As regards Fidela's initial assertion of ownership over the subject property, we agree with the findings of the Court of Appeals that the same should not be given weight. It bears stressing that only a thumb mark appears on top of her printed name at the last page of her answer and the name of the lawyer who prepared the same was not even indicated. The records also show that Fidela's answer was belatedly filed with the trial court. In her opposition16 to the motion to have her declared in default, there was a plea for understanding and a statement that the attached answer was prepared by an unnamed lawyer, without being formally engaged, out of pity and compassion for Fidela who was an indigent. Thus, as between the allegations in the answer which was merely thumbmarked by Fidela and prepared by an unknown lawyer, and her admissions in open court with the assistance of her counsel of record, Atty. Rosalinda Ybañez, during the pre-trial conference of this case, the lower courts correctly gave weight to the latter.

At any rate, the lower courts' finding that the subject property rightly belonged to Macajilos was not principally grounded on Fidela's admission. Rather, this admission merely confirmed the undisputed documentary evidence which showed Gregoria Macalipay as the owner of the subject property and the same passed on to her two sons upon her death. The records show that Tax Declaration No. 85817 covering the period prior to the year 1949,18 Tax Declaration No. 1389519 for the year 1949, Tax Declaration No. 2586420 for the year 1969 and Tax Declaration No. 1065121 for the year 1974 over the subject property were all in the name of Gregoria Macalipay. It is true that tax declarations or realty tax payments are not conclusive evidence of ownership, however, they constitute good indicia of possession in the concept of owner and a claim of title over the subject property.22 Coupled with her uncontested actual possession of the subject property, these tax declarations constitute strong evidence of ownership over the subject property by Gregoria Macalipay,23 the mother of herein respondents Macajilos.

The tax declarations in the name of Gregoria Macalipay takes on great significance because Fidela tacked her claim of ownership to that of Gregoria Macalipay. In 1975, Fidela had Tax Declaration No. 10651 in the name of Gregoria Macalipay cancelled through the execution of an "Affidavit of Heirship" where she claimed to be the sole heir of Gregoria Macalipay. Yet, she was merely the wife of Juanito who was a nephew of Gregoria. Neither she nor Juanito could inherit from Gregoria

whose compulsory heirs are respondents Macajilos. Clearly, the "Affidavit of Heirship" was fraudulent and could never be Fidela's source of ownership over the subject property. Neither could Tax Declaration No. 022478 in the name of Fidela and the "Affidavit of Ownership and Possession" be the source of any derivative right of ownership of RBSI over the subject property considering that these documents were the products of the aforementioned fraudulent scheme. Thus, the trial court correctly ruled that the mortgage over the subject property and the foreclosure proceedings were a nullity, and that respondents Macajilos brothers should be declared the lawful owners of the subject property.

We note that in its Memorandum,24 RBSI contended, among others, that should this Court rule in favor of Macajilos, the mortgage should be declared valid insofar as the one-half portion of the subject property is concerned, based on the alleged admission by respondent Quirico Macajilos, Jr. on cross-examination that there was an oral settlement of the estate of Gregoria Macalipay where respondents Macajilos brothers agreed that the subject property should be apportioned between respondent Quirico Macajilos, Jr. and Fidela Macalipay.

This issue is being raised by RBSI for the first time on appeal and only belatedly in its memorandum before this Court. Well-settled is the rule that points of law, theories, issues and arguments not adequately brought to the attention of the trial court need not be, and ordinarily will not be, considered by a reviewing court as they cannot be raised for the first time on appeal.25 An issue which was neither averred in the complaint nor raised during the trial in the court below cannot be raised for the first time on appeal as it would be offensive to the basic rules of fair play, justice and due process.26 Thus, we cannot bend backwards to examine this issue raised by RBSI at this late stage in the proceedings.

Be that as it may, even if we were to consider RBSI's new theory and, thus, assume that the aforementioned oral settlement did take place, the relinquishment of respondent Felix Macajilos' one-half share in the subject property in favor of Fidela would amount to an oral donation of real property which, under Article 74927 of the Civil Code, is null and void.28 This void donation to Fidela did not ripen into ownership through acquisitive prescription because, as will be discussed in detail shortly, RBSI was a mortgagee-buyer in bad faith. Only six years had elapsed from the auction sale to the filing of the instant case, which is less than the required 30-year-period for extraordinary acquisitive prescription29 to set in.

Anent the second issue, we agree with the trial court and the Court of Appeals that RBSI was a mortgagee-buyer in bad faith. The subject property was mortgaged three times by Fidela to RBSI, to wit: in 1975 for P2,000.00, in 1976 for 10,000.00,

and in 1978 for P12,300.00. After fully paying the first two mortgage debts, Fidela failed to pay the third thus the property was extrajudicially foreclosed and sold at public auction with RBSI as the only and highest bidder. However, in contracting the aforesaid mortgages, RBSI failed to exercise the proper diligence in verifying the true owners of the subject property. Certainly, a mortgagee is not expected to conduct an exhaustive investigation on the history of the mortgagor's title but RBSI, especially because it is a banking institution, must have at least exercised due diligence before entering into said contract. Banks are expected to exercise more care and prudence than private individuals in their dealings because their business is impressed with public interest.30

It is a standard practice for banks before approving a loan to send representatives to the premises of the land offered as collateral and to investigate who are the real owners thereof.31 However, in the case at bar, no investigator was sent to the location of the subject property to verify the real owners thereof. Instead, RBSI relied solely on Tax Declaration No. 022478 in the name of Fidela as well as the "Affidavit of Possession and Ownership" that RBSI required her to execute.32 Atty. Teodoro Singson, a witness for RBSI, explained that when RBSI was established in 1974, there was so much money coming from the Central Bank that the bank was in a hurry to grant loans and was not strict with the documents presented by prospective borrowers as collateral.33

What is more, Atty. Singson admitted that RBSI was aware that Tax Declaration No. 022478 in the name of Fidela was previously in the name of Gregoria Macalipay and that the tax declaration was transferred to the name of Fidela through the "Affidavit of Heirship" she executed naming her as the sole heir of Gregoria Macalipay.34 However, it did not take steps to ascertain whether Fidela was, indeed, the sole heir of Gregoria Macalipay. Rather, it placed full faith on the false representation of Fidela that her husband, Juanito Macalipay, was the son of Gregoria Macalipay.35 To make matters worse, neither did it inquire from Lamberto, son of Fidela, who was then the manager of the bank when the first loan was granted to her in 1975, as to whether his father, Juanito Macalipay, was the son of Gregoria Macalipay.36

As its defense, RBSI dwells on the alleged error of the trial court in finding Lamberto as the manager of RBSI when the mortgage debts were contracted when in fact Lamberto was a mere clerk-typist. However, the records show that RBSI categorically admitted during the pre-trial conference that Lamberto was the manager of the bank when the loan transactions took place.37 Even in its Reply38 dated June 21, 2002 filed before this Court, RBSI admitted that Lamberto was the officer-in-charge (OIC) of the bank prior to 1978 or when the first two

mortgage debts were contracted by his mother, Fidela, and that Lamberto was demoted to the rank of a clerk-typist only in 1978.39

At any rate, we need not belabor this point because whether Lamberto was an OIC or a mere clerk-typist of the bank when the mortgage debts were contracted will not excuse RBSI from exercising prudence in verifying the true owners of the subject property. The fact that Lamberto was the son of its prospective debtor, Fidela, should have prompted RBSI to be more cautious in granting the loan.

Based on the foregoing, it is clear that RBSI chose to close its eyes to facts which should have put a reasonable man on his guard.40 Far from being prudent, RBSI hastily granted the loan without investigation, and placed full faith on the false documents submitted by Fidela. Consequently, it cannot now claim that it acted in good faith on the belief that there was no defect in the title of Fidela.

While the findings of the lower courts that RBSI was a mortgagee-buyer in bad faith is in accord with the evidence on record, we must point out, however, that they overlooked the fact that the subject property is an unregistered piece of land. As we ruled in David v. Bandin,41 which was reiterated in Sales v. Court of Appeals,42 "the issue of good faith or bad faith of a buyer is relevant only where the subject of the sale is a registered land but not where the property is an unregistered land. One who purchases an unregistered land does so at his peril. His claim of having bought the land in good faith, i.e., without notice that some other person has a right to, or interest in, the property, would not protect him if it turns out that the seller does not actually own the property." Nevertheless, the application of this doctrine will not affect the outcome of this case. RBSI bought the property during the auction sale at its own peril and must suffer the consequences of its failure to investigate the true owners of the subject property who turned out to be respondents Macajilos brothers. Although the discussion on RBSI's bad faith would now seem superfluous given the application of this doctrine, the finding of bad faith is still relevant in the resolution of the last issue with respect to the award of damages.

Anent the third issue, we likewise agree with the findings of the Court of Appeals that respondent Macajilos brothers are not barred by laches or estoppel from recovering the ownership of the subject property. They are not estopped from denying the representations of Fidela that she owns the subject property because they were never privy to the loan agreements between the bank and Fidela. The fact that the mortgages and subsequent foreclosure proceedings were duly registered with the register of deeds will not cure their nullity because Fidela never owned the subject property.

Neither can respondent Macajilos brothers be said to have slept on their rights. Essentially, laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which, by the exercise of due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it has either abandoned or declined to assert it.43

In the case at bar, respondents Macajilos brothers performed acts which showed their intent to assert their rightful ownership over the subject property. Specifically, in 1980, respondent Quirico Macajilos, Jr. came across the notice of public auction of the subject property in the public market.44 Upon investigation with the provincial assessor's office, he discovered that Fidela had mortgaged the subject property to RBSI by transferring the tax declaration to her name after falsely claiming in the "Affidavit of Heirship" that she was the sole heir of Gregoria Macalipay.

Consequently, in 1981 or within a year from the discovery of the fraudulent scheme perpetuated by Fidela, respondents Macajilos brothers filed a criminal case against Fidela and Lamberto for estafa through falsification of public document.45 After knowing about the foreclosure of the subject property, respondent Quirico Macajilos, Jr. took possession of the subject property46 and demanded Fidela to vacate. In 1987, the instant case to remove cloud over the title and/or recovery of real property and damages was filed by respondents Macajilos brothers against RBSI as an off-shoot of the latter's demand on respondent Quirico Macajilos to vacate the subject property. All in all, these acts show that respondents Macajilos brothers did not sleep on their rights but reasonably took steps to assert their ownership over the subject property.

Anent the fourth issue, we note that the task of fixing the amount of damages primarily rests with the trial court as the circumstances of each case may warrant provided that the bases therefor are fully established.47 In the case at bar, the trial court awarded moral and exemplary damages as well as attorney's fees in view of its finding that RBSI acted in bad faith.48 As previously discussed, this finding of bad faith by the trial court is sufficiently supported by the evidence on record. However, the award of exemplary damages should be deleted since there is no clear and convincing proof that RBSI acted in a wanton, fraudulent, reckless, oppressive or malevolent manner to warrant the imposition of the same.49

WHEREFORE, the petition is PARTLY GRANTED. The April 18, 2001 Decision and November 12, 2001 Resolution of the Court of Appeals in CA-G.R. CV No. 51290 which affirmed the July 12, 1995 Decision of the Regional Trial Court of Negros

Oriental, Dumaguete City, Branch 39 in Civil Case No. 9049 declaring respondents Felix Macajilos and Quirico Macajilos, Jr. the rightful owners of the subject property, areAFFIRMED with the MODIFICATION that the award of exemplary damages is DELETED for lack of basis.

SO ORDERED.

Panganiban, C.J., Austria-Martinez, Callejo, Sr., Chico-Nazario, J.J., concur.

CHAPTER 11

Republic of the PhilippinesSUPREME COURTManila

THIRD DIVISION

G.R. No. 146208 August 12, 2004

HEIRS OF BALDOMERO ROXAS y HERMANOS, represented by EDUARDO GONZALES, petitioners, vs.HON. ALFONSO S. GARCIA, Presiding Judge, Branch 18, RTC, Tagaytay City; REPUBLIC PLANTERS BANK; & SOLID BUILDERS, INC., respondents.

D E C I S I O N

CARPIO-MORALES, J.:

Assailed via petition for review on certiorari are the Court of Appeals Resolutions1 dated July 28, 2000 and November 6, 2000 which respectively dismissed petitioners' petition for certiorari and denied their motion for reconsideration of the dismissal.

Two (2) parcels of land with a total land area of 438,018 square meters, more or less, situated in Tagaytay City2 were surveyed and approved by the Bureau of Lands on March 29, 1941 under Psu-113427 for the heirs of Baldomero Roxas y Hermanos (Roxas property).3

A parcel of land also situated in Tagaytay was surveyed under Psu-136750 for Martin Landicho (Landicho property) and was decreed in his name on May 23, 19534 in LRC Case No. 167, LRC (GLRO) Record No. N-72008. OCT No. 157 was accordingly issued to Landicho.5

"Lot No. 2" of the Landicho property was later sold to Porfirio Beljica who was issued TCT No. 3255.6

Beljica in turn sold "Lot No. 2" of the Landicho property to the Taal Development Corporation which was issued TCT No. 3445.7

The Taal Development Corporation later mortgaged "Lot No. 2" of the Landicho property to the Republic Planters Bank which eventually acquired it on July 7, 1965 following the foreclosure sale thereof after the former failed to comply with its mortgage obligation. Republic Planters Bank was then issued TCT No. T-4211.8

On April 11, 1962, Vicente Singson, Jr., husband of one of the children of the spouses Sixto Roxas and Alejandra Luz – heirs of the late Baldomero Roxas (Roxas), filed an application for registration covering the Roxas property at the then Court of First Instance (CFI) of Cavite, docketed as Case No. N-249, LRC Record No. 22973.9

By Decision of April 2, 1963, Branch 3 of the Cavite CFI adjudged in Case No. N-249, LRC Record No. 22973 the registration of the Roxas property in favor of the heirs. By Order of May 23, 1963, the court declared its April 2, 1963 decision final and accordingly ordered the Land Registration Commission (LRC) to issue a decree of confirmation and registration.10

The LRC, by Report of October 15, 1963, stated, however, that the confirmation could not be done due to "overlapping claims on the area."11

From a Report dated September 5, 1983 prepared by Geodetic Engineer Basilio Cabrera, and a later Report dated November 12, 1987 prepared by the Chief of the Surveys Division Regional Management Bureau who was directed by the court to comment on Engineer Cabrera's report, it is gathered that Psu-136750 (covering the Landicho property) overlapped Psu N-113427 (covering the Roxas property).12

It turned out that in Case No. 167, LRC (GLRO) Record No. N-7208, the alleged overlapping by Psu-136750 of Psu-113427 was overlooked.

Vicente Singson, Jr., in the meantime, died on April 20, 1965.13

The Heirs of Roxas later filed in Case No. N-249 LRC Record No. 22973 a motion to intervene dated August 10, 197814 which was granted. By Order of June 29, 1988, the land registration court, Branch 17 of the Regional Trial Court (RTC) of Cavite which took over the cases pending before Branch 3 of the former CFI of Cavite, noting that titles to properties cannot be collaterally attacked, directed the parties "to have Plan PSU-113427 amended to exclude the portions already titled [in the name of Landicho] without prejudice to filing the corresponding case for annulment of titles."15

By Order16 of July 2, 1991, the land registration court, resolving two motions to reopen the decree of registration in LRC Case No. N-249, ruled:

x x x

After evidence pro and con for the reopening of this case to determine the merits of the report of the Land Registration Commission of October 15, 1963 which states that there are several overlappings upon the very land subject matter of this application and which have been adjudicated in previous land registration proceedings in which said land had been issued corresponding certificates of title pursuant to the provisions of Act

496 and that only a small portion remains undecreed, counsel for the parties in open Court this morning, after hearing the testimony of Isidro R. Cellez, Geodetic Engineer and Chief of the Technical Standards and Surveys of the Bureau of Lands, DENR, testified that the parcels of land subject matter of this proceedings and covered by Plan Psu-113427 is [ sic ] entirely within the perimeters of the parcel of land surveyed for Martin Landicho and Librado Catapang under Plan Psu-136750 which was subsequently decreed and titled in case N-167, GLRO Rec. No. N-720[0]8 in the name of Martin Landicho precursor of oppositor Republic Planters Bank derived its title.

Thus there is nothing more to be adjudicated in the names of the applicants now the intervenors Heirs of Baldomero Roxas, and only recourse now is to seek the annulment of the certificates of title issued in [LRC] case no. 167 and the reconveyance of the properties in the proper regional trial court.17

x x x (Emphasis and underscoring supplied)

By the said Order of July 2, 1991, the land registration court thus set aside its April 2, 1963 decision, recalled its order for the issuance of a decree of confirmation and registration, and dismissed LRC Case No. N-249, without prejudice to the right of the Heirs of Roxas to file the "proper action for annulment and reconveyance [of the Roxas property] in the proper court."18

On October 4, 1991,19 herein petitioners - heirs of Roxas filed before the RTC of Cavite in Tagaytay City a complaint against the Republic Planters Bank for the cancellation of the latter's title over the Landicho property, TCT No. 4211, "to the extent of that portion which overlapped the [Roxas] property." The complaint, now the subject of the present decision, which was docketed as Civil Case No. TG-1212, was later amended20 to enumerate the names, addresses and civil status of all the heirs of Roxas.

Solid Builders Inc., to which a portion of the Landicho property appeared to have been subsequently sold by Republic Planters Bank and which was allowed to intervene, filed an Answer in Intervention with Counterclaim.21 It later filed a Motion for Summary Judgment22 which was, by Order of January 21, 1997,23 denied.

Republic Planters Bank then filed its Answer to the Amended Complaint with Counterclaim.24

Solid Builders Inc. subsequently filed a Second Motion for Summary Judgment25 which was, by Order of December 17, 1999, 26 granted. In the same Order, Branch 18 of the RTC of Tagaytay dismissed herein petitioners' complaint for lack of merit, it finding that the only basis of their claim of ownership to the Roxas property, said to have been included in the Landicho title, is Psu-113427, whereas the subsequent transfer of the Landicho property to Republic Planters Bank and later to intervenor Solid Builders, Inc. were evidenced by documents including titles, the existence of which documents petitioners admitted in their Complaint and Amended Complaint.27

Petitioners' motion for reconsideration of the dismissal of their complaint having been denied by Order of April 10, 2000, petitioners filed apetition for certiorari with the Court of Appeals.28

The appellate court, by Resolution of July 28, 2000,29 dismissed petitioners' petition for certiorari on the ground that the RTC Tagaytay's order dismissing their complaint is a final, not an interlocutory order, hence, a subject of appeal and not certiorari.

Petitioners' motion for reconsideration of the appellate court's July 28, 2000 Resolution having been denied by Resolution of November 6, 200030 for lack of merit and, in any event, the petition for certiorari was filed out of time, they lodged the petition for review on certiorari at bar, submitting the following

x x x

REASONS FOR THE PETITION

A. Respondent Court of Appeals erred in holding that the dismissal of the complaint by way of granting private respondents' motion for summary judgment is a proper subject of appeal, not certiorari, despite the grave abuse of discretion committed by public respondent Presiding Judge Alfonso Garcia of the trial court;

B. Respondent Court of Appeals also committed error of law in applying the presumption of completeness of service after five (5) days from

receipt of the first notice, considering the actual receipt of the registered mail by the petitioners;

C. Respondent Court of Appeals gravely abused its discretion in resorting to strict technicality in dismissing the petition for certiorari.31(Underscoring supplied)

The petition fails.

It is settled that an order dismissing a complaint is a final, not an interlocutory order, hence, a proper subject of appeal. If indeed petitioners received the December 17, 1999 Order of the trial court dismissing their complaint on February 1, 2000 and filed on February 3, 2000 a motion for reconsideration thereof, the Order denying which motion they received on May 26, 2000, they had fifteen days32 or until June 8, 2000 to appeal. They, however, did not appeal and instead filed on July 24, 2000 before the Court of Appeals the petition for certiorari.

When the remedy of appeal is available but is lost due to petitioner's own negligence or error in the choice of remedies, resort to certiorari is precluded. That is settled.

Even if, in the greater interest of substantial justice, certiorari may be availed of, it must be shown that the trial court acted with grave abuse of discretion amounting to lack or excess of jurisdiction, that is, that the trial court exercised its powers in an arbitrary or despotic manner by reason of passion or personal hostilities, so patent and gross as to amount to an evasion or virtual refusal to perform the duty enjoined or to act in contemplation of law.33 Petitioners' assignment of errors of the trial court before the appellate court, to wit:

a. PUBLIC RESPONDENT GRAVELY ERRED IN APPLYING THE RULE ON SUMMARY JUDGMENT IN THE CASE AT BAR, THE SAME BEING ONE FOR CANCELLATION OF TITLE OR DECLARATION OF NULLITY OF TITLES, AND THERE BEING SERIOUS AND TRIABLE ISSUES ON THE MERITS, JOINED AFTER PRIVATE RESPONDENTS FILED THEIR ANSWERS TO THE AMENDED COMPLAINT;

b. PUBLIC RESPONDENT GRAVELY ABUSED HIS DISCRETION IN APPLYING THE RULING IN ARMY AND NAVY CLUB OF MANILA, INC. VS. COURT OF APPEALS, ET AL., G.R. NO. 110223, APRIL 8, 1997;

c. PUBLIC RESPONDENT GRAVELY ABUSED HIS DISCRETION IN HOLDING THAT PETITIONERS' ALLEGATION IN THE COMPLAINT ABOUT TRANSFERS OF TITLES TO SUPPOSED SUBSEQUENT PURCHASERS WARRANT DISMISSAL OF THE COMPLAINT THROUGH SUMMARY JUDGMENT.

d. PUBLIC RESPONDENT GRAVELY ABUSED HIS DISCRETION IN DENYING PETITIONERS' MOTION FOR RECONSIDERATION, BASED ON THE OPPOSITION FILED BY THE INTERVENOR WHOSE ONLY BASIS FOR INTERVENTION IS A DEED OF PROMISE TO SELL WHICH HAD BEEN PREVIOUSLY DECLAREED NULL AND VOID BY ANOTHER COURT OF COMPETENT JURISDICTION.34(Underscoring supplied),

shows, however, that what were being assailed were errors not of jurisdiction but of judgment.35

Whether a trial court, which has jurisdiction over the person of the parties to, and the subject matter of the case, will grant a motion for summary judgment is within its power or authority in law to perform. Its propriety rests on its sound exercise of discretion36 and judgment. In the event that it errs in finding that there is no genuine issue to thus call for the rendition of a summary judgment, the resulting decision may not be set aside either directly or indirectly by petition for certiorari, but may only be corrected on appeal or other direct review. Parenthetically, contrary to petitioners' argument that the rule on summary judgment applies to only two kinds of action — an action to recover a debt or a liquidated demand for money, and an action for declaratory relief, the rule is applicable to all kinds of actions. De Leon v. Faustino37 holds so.

It is contended that the procedure of summary judgment is not warranted in the instant case since it is not an action "to recover upon a claim, counterclaim, or cross-claim". It is argued that section 1 of Rule 36 providing for the remedy of summary judgment for the claimant contemplates action or cases which are in the nature of money claims. The contention cannot be sustained. Summary judgment procedure is a method for promptly disposing of actions in which there is no genuine issue as to any material fact. Under this definition and from the provision of section 1 of Rule 36, there would seem to be no limitation as to the type of actions in which the remedy is available, except, of course, where the material facts alleged in the complaint are required to be proved. As observed in the note of the Advisory Committee of the United States Supreme Court, quoted by former Chief Justice Moran in his comments on the Rules of Court (Vol. I, 1957 ed., p. 497) —

x x x

In England it was first employed only in cases of liquidation claims, but there has been a steady enlargement of the scope of the remedy until it is now used in actions to recover land or chattels and in all other actions at law, for liquidated or unliquidated claims, except for a few designated torts and breach of promise of marriage.38 (Underscoring supplied)

The foregoing discussions leave it unnecessary to pass on the second reason proffered for the petition, that bearing on the timeliness of the filing of the petition for certiorari before the appellate court.

At all events, the remedy of one who has established his ownership over a property but which property has been wrongfully or erroneously registered through fraud or mistake in another's name is, after the lapse of one year from the date of issuance of the questioned decree, not to set aside the decree, it having become incontrovertible and no longer open to review, but to institute an ordinary action in the ordinary court of justice for reconveyance.39

If the property, however, has already passed into the hands of an innocent purchaser for value, the remedy is to file an action for damages from the person who allegedly registered the property through fraud,40 or if he had become insolvent or if the action is barred by prescription, to file an action for recovery against the Assurance Fund under Section 95 of P.D. No. 152941 (the Property Registration Decree) within a period of six years from the time the right to bring such action accrues.42

WHEREFORE, the petition is hereby DISMISSED for lack of merit.

SO ORDERED.

Panganiban, (Chairman), and Corona, JJ., concur.Sandoval-Gutierrez, J., on leave.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 115284 November 13, 1997

PABLO STA. ANA. JR., petitioner, vs.COURT OF APPEALS, ERNESTO P. CAYETANO, LEONOR C. CAYETANO, and ALEJANDRO B. MANAHAN,respondents.

FRANCISCO, J.:

The controversy stemmed from an action for reconveyance filed by herein petitioner Pablo Sta. Ana, Jr. and his now-deceased mother Socorro Sta. Ana against private respondent Ernesto Cayetano, Leonor Cayetano (hereafter spouses Cayetanos) and Alejandro B. Manahan on August 27, 1973, involving a 900 square-meter parcel of land in Barrio San Antonio, Calabanga, Camarines Sur (hereafter subject land).

In the complaint, 1 it was alleged, in a nutshell, that the spouses Cayetanos, without the knowledge of petitioner and his mother, fraudulently included the subject land in the registration proceedings covering two (2) lots situated in the same locality (described in Plan PSU-183419) notwithstanding petitioner's and his deceased mother's continuous and actual possession of the subject land since 1951 when they inherited said property upon the death of petitioner's father, Pablo Sta. Ana, Sr. in the same year. Since the spouses Cayetanos obtained OCT No. 989 over the subject land on March 26, 1962 and thereafter sold the same to private respondent Manahan who was issued TCT No. 17218 on August 17, 1973, petitioner and his mother pray that TCT No. 17218 be cancelled, the subject land be segregated from the area covered on Plan PSU-183419 and thereafter be reconveyed to them with damages.

A complaint in intervention 2 was filed by one Asteria Maulauen containing similar allegations and relief sought —i.e., that her land was fraudulently included by the spouses Cayetanos in the same registration proceedings which was also sold to respondent Manahan, and thus she prays for its reconveyance.

Private respondents, as defendants below, filed a motion to dismiss 3 on the ground of prescription. They argue that petitioner's filing of the complaint for reconveyance on August 27, 1973 — which spanned 11 years and 5 months from the registration of spouses Cayetanos' OCT No. 989 over the subject land on March 26, 1962 — was too late considering the well-settled jurisprudence that an action for reconveyance of real property based on implied or constructive trust prescribes in 10 years. To this motion to dismiss, petitioner filed an Objection. 4

The trial court deferred the resolution of petitioner's motion to dismiss as "the ground alleged therein does not appear to be indubitable, and furthermore, to resolve said motion would require presentation of evidence which would be practically a trial on the merits of this case." 5 Trial thus ensued with petitioner having presented two (2) witnesses. Subsequently, the trial court, on motion of petitioner, appointed a commissioner who will conduct a relocation survey to identify the lots claimed by petitioner and intervenor Maulauen. 6 Upon submission by the commissioner of his Report dated March 2, 1987, 7 private respondents

objected to its approval 8 and reiterated their motion to dismiss grounded on prescription 9 to which petitioner filed an objection. 10

A decision dated August 9, 1988 11 was rendered by the trial court dismissing petitioner's complaint and Maulauen's complaint in intervention, declaring private respondent Manahan as the rightful owner of the land covered by TCT No. 17218 and ordering petitioner to deliver/surrender possession of the subject land to private respondent Manahan. On appeal, public respondent Court of Appeals, in a decision dated October 12, 1993, 12affirmed the trial court judgment and denied, per Resolution dated April 29, 1994, petitioner's motion for reconsideration. Hence, this petition wherein petitioner claims that:

I.

Respondent Court of Appeals erred in disregarding the uncontroverted fact that petitioner and his predecessors-in-interest have been in open and continuous possession in the concept of owner of the land in question long before the issuance in 1962 of Original Certificate of Title No. 989.

II.

Respondent Court of Appeals erred in not applying the well-established doctrine that IMPRESCRIPTIBLE is "an action for reconveyance which in effect seeks to quiet title to property against its registered owner", if filed by one in possession of the property.

III.

Respondent Court of Appeals erred in ignoring the Commissioner's Report.

IV.

Respondent Court of Appeals erred in affirming the trial court's award of affirmative relief in favor of private respondent Manahan when such relief was not raised in the pleadings, and neither was it prayed for.

The petition has no merit.

Both lower courts correctly found that petitioner's action for reconveyance has prescribed when the complaint therefor was filed only in 1973 — or eleven (11) years from March, 1962 when the spouses Cayetanos' OCT No. 989 over the subject land was registered. An action for reconveyance based on an implied or constructive trust must perforce prescribe in ten (10) years and not otherwise. 13 A long line of decisions of this Court, such as those cited by the trial court 14 and respondent CA, 15 illustrates this rule. Petitioner cannot escape the onset of prescription by arguing now that his action for reconveyance is really one that seeks a quieting of title (which is admittedly imprescriptible) and not one based on implied or constructive trust. From the complaint, it is evident that petitioner's theory is based on implied or constructive trust, as it is alleged therein that "the property in question is within the property in trust for the plaintiffs. . . .". It is well to emphasize at this juncture that a party cannot subsequently take a position contrary to, or inconsistent with, his pleadings. 16 Thus, a party is bound by the theory he adopts and by the cause of action he stands on and cannot be permitted after having lost thereon to repudiate his theory and cause of action and adopt another and seek to re-litigate the matter anew either in the same forum or on appeal. 17

Likewise unpersuasive is the claim that, granting the verity of the ten-year prescriptive period, the complaint for reconveyance was nonetheless well-within said period since the ten (10) years began to lapse only from the time petitioner had actual knowledge of private respondents' adverse claim of ownership over the subject land, which petitioner alleges to be shortly after August 7, 1973 when TCT No. 17218 was issued in the name of private respondent Manahan. Equally settled is that an action for reconveyance based on an implied or constructive trust prescribes in ten (10) years from the issuance of the Torrens title over the property. 18 The reckoning date in this case, therefore, is March 26, 1962 — the date OCT No. 989 was issued in the name of the spouses Cayetanos.

As the above resolution of the issue of prescription is, by itself, determinative of the instant petition's fate, discussion of the other assigned errors is unnecessary.

WHEREFORE, premises considered, the petition is hereby DENIED. The decision of respondent Court of Appeals dated October 12, 1993, affirming the trial court judgment of August 9, 1988, is AFFIRMED.

SO ORDERED.

Romero, Melo and Panganiban, JJ., concur.

Naravasa, C.J., is on leave.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 136021 February 22, 2000

BENIGNA SECUYA, MIGUEL SECUYA, MARCELINO SECUYA, CORAZON SECUYA, RUFINA SECUYA, BERNARDINO SECUYA, NATIVIDAD SECUYA, GLICERIA SECUYA and PURITA SECUYA, petitioners, vs.GERARDA M. VDA. DE SELMA, respondent.

PANGANIBAN, J.:

In action for quieting of title, the plaintiff must show not only that there is a cloud or contrary interest over the subject real property, but that the have a valid title to it. In the present case, the action must fail, because petitioners failed to show the requisite title.

The Case

Before us is a Petition for Review seeking to set aside the July 30, 1998 Decision of the Court of Appeals (CA) in CA-G.R. CV No. 38580,1 which affirmed the judgment2 of the Regional Trial Court (RTC) of Cebu City. The CA ruled:

WHEREFORE, [there being] no error in the appealed decision, the same is hereby AFFIRMED in toto.3

The decretal portion of the trial court Decision reads as follows:

WHEREFORE, in view of all the foregoing [evidence] and considerations, this court hereby finds the preponderance of evidence to be in favor of the defendant Gerarda Selma as judgment is rendered:

1. Dismissing this Complaint for Quieting of title, Cancellation of Certificate of Title of Gerarda vda. de Selma and damages,

2. Ordering the plaintiffs to vacate the premises in question and turn over the possession of the same to the defendant Gerarda Selma;

3. Requiring the plaintiffs to pay defendant the sum of P20,000 as moral damages, according to Art. 2217, attorney's fees of P15,000.00, litigation expenses of P5,000.00 pursuant to Art. 2208 No. 11 and to pay the costs of this suit.1âwphi1.nêt

SO ORDERED.4

Likewise challenged is the October 14, 1998 CA Resolution which denied petitioners' Motion for Reconsideration.5

The Facts

The present Petition is rooted in an action for quieting of title filed before the RTC by Benigna, Miguel, Marcelino, Corazon, Rufina, Bernardino, Natividad, Gliceria and Purita — all surnamed Secuya — against Gerarda M. vda. de Selma. Petitioners asserted ownership over the disputed parcel of land, alleging the following facts:

x x x x x x x x x

8. The parcel of land subject of this case is a PORTION of Lot 5679 of the Talisay-Minglanilla Friar Lands Estate, referred to and covered [o]n Page 279, Friar Lands Sale Certificate Register of the Bureau of Lands (Exh. "K"). The property was originally sold, and the covering patent issued, to Maxima Caballero Vda. de Cariño (Exhs. "K-1"; "K-2). Lot 5679 has an area of 12,750 square meters, more or less;

9. During the lifetime of Maxima Caballero, vendee and patentee of Lot 5679, she entered into that AGREEMENT OF PARTITION dated January 5, 1938 with Paciencia Sabellona, whereby the former bound herself and parted [with] one-third (1/3) portion of Lot 5679 in favor of the latter (Exh. "D"). Among others it was stipulated in said agreement of partition that the said portion of one-third so ceded will be located adjoining the municipal road (par. 5. Exh "D");

10. Paciencia Sabellona took possession and occupation of that one-third portion of Lot 5679 adjudicated to her. Later, she sold the three thousand square meter portion thereof to Dalmacio Secuya on October 20, 1953, for a consideration of ONE THOUSAND EIGHT HUNDRED FIFTY PESOS (P1,850.00), by means of a private document which was lost (p. 8, tsn., 8/8/89-Calzada). Such sale was admitted and confirmed by Ramon Sabellona, only heir of Paciencia Sabellona, per that instrument denominated CONFIRMATION OF SALE OF UNDIVIDED SHARES, dated September 28, 1976(Exh. "B");

11. Ramon Sabellona was the only [or] sole voluntary heir of Paciencia Sabellona, per that KATAPUSAN NGA KABUT-ON UG PANUGON NI PACIENCIA SABELLONA (Last Will and Testament of Paciencia Sabellona), dated July 9, 1954, executed and acknowledged before Notary Public Teodoro P. Villarmina (Exh. "C"). Pursuant to such will, Ramon Sabellona inherited all the properties left by Paciencia Sabellona;

12. After the purchase [by] Dalmacio Secuya, predecessor-in interest of plaintiffs of the property in litigation on October 20, 1953, Dalmacio, together with his brothers and sisters — he being single — took physical possession of the land and cultivated the same. In 1967, Edilberto Superales married Rufina Secuya, niece of Dalmacio Secuya. With the permission and tolerance of the Secuyas, Edilberto Superales constructed his house on the lot in question in January 1974 and lived thereon continuously up to the present (p. 8., tsn 7/25/88 — Daclan). Said house is inside Lot 5679-C-12-B, along lines 18-19-20 of said lot, per Certification

dated August 10, 1985, by Geodetic Engineer Celestino R. Orozco (Exh. "F");

13. Dalmacio Secuya died on November 20, 1961. Thus his heirs — brothers, sisters, nephews and nieces — are the plaintiffs in Civil Case No. CEB-4247 and now the petitioners;

14. In 1972, defendant-respondent Gerarda Selma bought a 1,000 square-meter portion of Lot 5679, evidenced by Exhibit "P". Then on February 19, 1975, she bought the bigger bulk of Lot 5679, consisting of 9,302 square meters, evidenced by that deed of absolute sale, marked as Exhibit "5". The land in question, a 3,000-square meter portion of Lot 5679, is embraced and included within the boundary of the later acquisition by respondent Selma;

15. Defendant-respondent Gerarda Selma lodged a complaint, and had the plaintiffs-petitioners summoned, before the Barangay Captain of the place, and in the confrontation and conciliation proceedings at the Lupong Tagapayapa, defendant-respondent Selma was asserting ownership over the land inherited by plaintiffs-petitioners from Dalmacio Secuya of which they had long been in possession . . . in concept of owner. Such claim of defendant-respondent Selma is a cloud on the title of plaintiffs-petitioners, hence, their complaint (Annex "C").6

Respondent Selma's version of the facts, on the other hand, was summarized by the appellate court as follows:

She is the registered owner of Lot 5679-C-120 consisting of 9,302 square meters as evidenced by TCT No. T-35678 (Exhibit "6", Record, p. 324), having bought the same sometime in February 1975 from Cesaria Caballero as evidenced by a notarized Deed of Sale (Exhibit "5", Record, p. 323) and ha[ve] been in possession of the same since then. Cesaria Caballero was the widow of Silvestre Aro, registered owner of the mother lot, Lot. No. 5679 with an area of 12,750 square meters of the Talisay-Minglanilla Friar Lands Estate, as shown by Transfer Certificate of Title No. 4752 (Exhibit "10", Record, p. 340). Upon Silvestre Aro's demise, his heirs executed an "Extrajudicial Partition and Deed of Absolute Sale" (Exhibit "11", Record, p. 341) wherein one-half plus one-fifth of Lot No. 5679 was adjudicated to the widow, Cesaria Caballero, from whom defendant-appellee derives her title.7

The CA Ruling

In affirming the trial court's ruling, the appellate court debunked petitioners' claim of ownership of the land and upheld Respondent Selma's title thereto. It held that respondent's title can be traced to a valid TCT. On the other hand, it ruled that petitioners anchor their claim on an "Agreement of Partition" which is void for being violative of the Public Land Act. The CA noted that the said law prohibited the alienation or encumbrance of land acquired under a free patent or homestead patent, for a period of five years from the issuance of the said patent.

Hence, this Petition.8

The Issues

In their Memorandum, petitioners urge the Court to resolve the following questions:

1. Whether or not there was a valid transfer or conveyance of one-third (1/3) portion of Lot 5679 by Maxima Caballero in favor of Paciencia Sabellona, by virtue of [the] Agreement of Partition dated January 5, 1938[;] and

2. Whether or not the trial court, as well as the court, committed grave abuse of discretion amounting to lack of jurisdiction in not making a finding that respondent Gerarda M. vda. de Selma [was] a buyer in bad faith with respect to the land, which is a portion of Lot 5679.9

For a clearer understanding of the above matters, we will divide the issues into three: first, the implications of the Agreement of Partition; second, the validity of the Deed of Confirmation of Sale executed in favor of the petitioners; and third, the validity of private respondent's title.

The Court's Ruling

The Petition fails to show any reversible error in the assailed Decision.

Preliminary Matter:The Action for Quieting of Title

In an action to quiet title, the plaintiffs or complainants must demonstrate a legal or an equitable title to, or an interest in, the subject real property.10 Likewise, they must show that the deed, claim, encumbrance or proceeding that purportedly casts a cloud on their title is in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.11 This point is clear from Article 476 of the Civil Code, which reads:

Whenever there is cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently 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 brought to remove such cloud or to quiet title.

An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein.

In the case at bar, petitioners allege that TCT No. 5679-C-120, issued in the name of Private Respondent Selma, is a cloud on their title as owners and possessors of the subject property, which is a 3,000 —square-meter portion of Lot No. 5679-C-120 covered by the TCT. But the underlying question is, do petitioners have the requisite title that would enable them to avail themselves of the remedy of quieting of title?

Petitioners anchor their claim of ownership on two documents: the Agreement of Partition executed by Maxima Caballero and Paciencia Sabellona and the Deed of Confirmation of Sale executed by Ramon Sabellona. We will now examine these two documents.

First Issue:The Real Nature of the "Agreement of Partition"

The duly notarized Agreement of Partition dated January 5, 1938; is worded as follows:

AGREEMENT OF PARTITION

I, MAXIMA CABALLERO, Filipina, of legal age, married to Rafael Cariño, now residing and with postal address in the Municipality of Dumaguete, Oriental Negros, depose the following and say:

1. That I am the applicant of vacant lot No. 5679 of the Talisay-Minglanilla Estate and the said application has already been indorsed by the District Land Officer, Talisay, Cebu, for private sale in my favor;

2. That the said Lot 5679 was formerly registered in the name of Felix Abad y Caballero and the sale certificate of which has already been cancelled by the Hon. Secretary of Agriculture and Commerce;

3. That for and in representation of my brother, Luis Caballero, who is now the actual occupant of said lot I deem it wise to have the said lot paid by me, as Luis Caballero has no means o[r] any way to pay the government;

4. That as soon as the application is approved by the Director of Lands, Manila, in my favor, I hereby bind myself to transfer the one-third (l/3) portion of the above mentioned lot in favor of my aunt, Paciencia Sabellana y Caballero, of legal age, single, residing and with postal address in Tungkop, Minglanilla, Cebu. Said portion of one-third (1/3) will be subdivided after the approval of said application and the same will be paid by her to the government [for] the corresponding portion.

5. That the said portion of one-third (1/3) will be located adjoining the municipal road;

6. I, Paciencia Sabellana y Caballero, hereby accept and take the portion herein adjudicated to me by Mrs. Maxima Caballero of Lot No. 5679 Talisay-Minglanilla Estate and will pay the corresponding portion to the government after the subdivision of the same;

IN WITNESS WHEREOF, we have hereunto set our hands this 5th day of January, 1988, at Talisay, Cebu."12

The Agreement: An Express Trust, Not a Partition

Notwithstanding its purported nomenclature, this Agreement is not one of partition, because there was no property to partition and the parties were not co-owners. Rather, it is in the nature of a trust agreement.

Trust is the right to the beneficial enjoyment of property, the legal title to which is vested in another. It is a fiduciary relationship that obliges the trustee to deal with

the property for the benefit of the beneficiary.13 Trust relations between parties may either be express or implied. An express trust is created by the intention of the trustor or of the parties. An implied trust comes into being by operation of law.14

The present Agreement of Partition involves an express trust. Under Article 1444 of the Civil Code, "[n]o particular words are required for the creation of an express trust, it being sufficient that a trust is clearly intended." That Maxima Caballero bound herself to give one third of Lot No. 5629 to Paciencia Sabellona upon the approval of the former's application is clear from the terms of the Agreement. Likewise, it is evident that Paciencia acquiesced to the covenant and is thus bound to fulfill her obligation therein.

As a result of the Agreement, Maxima Caballero held the portion specified therein as belonging to Paciencia Sabellona when the application was eventually approved and a sale certificate was issued in her name.15 Thus, she should have transferred the same to the latter, but she never did so during her lifetime. Instead, her heirs sold the entire Lot No. 5679 to Silvestre Aro in 1955.

From 1954 when the sale certificate was issued until 1985 when petitioners filed their Complaint, Paciencia and her successors-in-interest did not do anything to enforce their proprietary rights over the disputed property or to consolidate their ownership over the same. In fact, they did not even register the said Agreement with the Registry of Property or pay the requisite land taxes. While petitioners had been doing nothing, the disputed property, as part of Lot No. 5679, had been the subject of several sales transactions16 and covered by several transfer certificates of title.

The Repudiation of the Express Trust

While no time limit is imposed for the enforcement of rights under express trusts,17 prescription may, however, bar a beneficiary's action for recovery, if a repudiation of the trust is proven by clear and convincing evidence and made known to the beneficiary.18

There was a repudiation of the express trust when the heirs of Maxima Caballero failed to deliver or transfer the property to Paciencia Sabellona, and instead sold the same to a third person not privy to the Agreement. In the memorandum of incumbrances of TCT No. 308719 issued in the name of Maxima, there was no notation of the Agreement between her and Paciencia. Equally important, the Agreement was not registered; thus, it could not bind third persons. Neither was

there any allegation that Silvestre Aro, who purchased the property from Maxima's heirs, knew of it. Consequently, the subsequent sales transactions involving the land in dispute and the titles covering it must be upheld, in the absence of proof that the said transactions were fraudulent and irregular.

Second Issue:The Purported Sale to Dalmacio Secuya

Even granting that the express trust subsists, petitioners have not proven that they are the rightful successors-in-interest of Paciencia Sabellona.

The Absence of the Purported Deed of Sale

Petitioners insist that Paciencia sold the disputed property to Dalmacio Secuya on October 20, 1953, and that the sale was embodied in a private document. However, such document, which would have been the best evidence of the transaction, was never presented in court, allegedly because it had been lost. While a sale of a piece of land appearing in a private deed is binding between the parties, it cannot be considered binding on third persons, if it is not embodied in a public instrument and recorded in the Registry of Property.20

Moreover, while petitioners could not present the purported deed evidencing the transaction between Paciencia Sabellona and Dalmacio Secuya, petitioners' immediate predecessor-in-interest, private respondent in contrast has the necessary documents to support her claim to the disputed property.

The Questionable Value of the Deed

Executed by Ramon Sabellona

To prove the alleged sale of the disputed property to Dalmacio, petitioners instead presented the testimony of Miguel Secuya, one of the petitioners; and a Deed21 confirming the sale executed by Ramon Sabellona, Paciencia's alleged heir. The testimony of Miguel was a bare assertion that the sale had indeed taken place and that the document evidencing it had been destroyed. While the Deed executed by Ramon ratified the transaction, its probative value is doubtful. His status as heir of Paciencia was not affirmatively established. Moreover, he was not presented in court and was thus not quizzed on his knowledge — or lack thereof — of the 1953 transaction.

Petitioners' Failure to Exercise Owners'

Rights to the Property

Petitioners insist that they had been occupying the disputed property for forty-seven years before they filed their Complaint for quieting of title. However, there is no proof that they had exercised their rights and duties as owners of the same. They argue that they had been gathering the fruits of such property; yet, it would seem that they had been remiss in their duty to pay the land taxes. If petitioners really believed that they owned the property, they have should have been more vigilant in protecting their rights thereto. As noted earlier, they did nothing to enforce whatever proprietary rights they had over the disputed parcel of land.

Third Issue:The Validity of Private Respondent's Title

Petitioners debunk Private Respondent Selma's title to the disputed property, alleging that she was aware of their possession of the disputed properties. Thus, they insist that she could not be regarded as a purchaser in good faith who is entitled to the protection of the Torrens system.

Indeed, a party who has actual knowledge of facts and circumstances that would move a reasonably cautious man to make an inquiry will not be protected by the Torrens system. In Sandoval v. Court of Appeals,22 we held:

It is settled doctrine that one who deals with property registered under the Torrens system need not go beyond the same, but only has to rely on the title. He is charged with notice only of such burdens and claims as are annotated on the title.

The aforesaid principle admits of an unchallenged exception: that a person dealing with registered land has a right to rely on the Torrens certificate of title and to dispense without the need of inquiring further except when the party has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry, or when the purchaser has knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to inquire into the status of title of the property in litigation. The presence of anything which excites or arouses suspicion should then prompt the vendee to look beyond the certificate and investigate the title of the

vendor appearing on the face of the certificate. One who falls within the exception can neither be denominated an innocent purchaser for value purchaser in good faith; and hence does not merit the protection of the law.

Granting arguendo that private respondent knew that petitioners, through Superales and his family, were actually occupying the disputed lot, we must stress that the vendor, Cesaria Caballero, assured her that petitioners were just tenants on the said lot. Private respondent cannot be faulted for believing this representation, considering that petitioners' claim was not noted in the certificate of the title covering Lot No. 5679.

Moreover, the lot, including the disputed portion, had been the subject of several sales transactions. The title thereto had been transferred several times, without any protestation or complaint from the petitioners. In any case, private respondent's title is amply supported by clear evidence, while petitioners' claim is barren of proof.

Clearly, petitioners do not have the requisite title to pursue an action for quieting of title.1âwphi1.nêt

WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against petitioners.

SO ORDERED.

Melo, Vitug, Purisima and Gonzaga-Reyes, JJ., concur.

FIRST DIVISION

[G.R. No. 143281. August 3, 2000]

SPOUSES FRANCISCO and AMPARO DE GUZMAN, JR., petitioners, vs. THE NATIONAL TREASURER OF THE REPUBLIC OF THE PHILIPPINES and THE REGISTER OF DEEDS OF MARIKINA CITY, respondents.

R E S O L U T I O N

KAPUNAN, J.:

Petitioners De Guzman spouses seek the reversal of the decision of the Court of Appeals holding that the Assurance Fund established under the Property Registration Decree is not liable for the losses allegedly sustained by petitioners.

The facts that led to the present proceedings are succinctly set forth by the Court of Appeals as follows:

On 01 July 1985, Urlan Milambiling and Asuncion Velarde purchased a parcel of land situated in Antipolo, Rizal from Sta. Lucia Realty and Development, Inc. Although they were already civilly married, Asuncion used her maiden name in the Deed of Sale because, being conservative, she did not want to use her married name until she was married in church.

After their church wedding on 05 July 1985, Urlan and Asuncion Milambiling left for Europe on their honeymoon and from there, they proceeded to Saudi Arabia where they were working as accountant and nurse, respectively.

Before leaving for abroad, the spouses Milambiling entrusted the Deed of Sale of the parcel of land they bought from Sta. Lucia Realty and the corresponding Certificate of Title still in the name of Sta. Lucia Realty to a long-time friend and one of their principal wedding sponsors, Marilyn Belgica, who volunteered to register the sale and transfer the title in their names.

Later, the spouses Milambiling learned from Belgica through an overseas telephone call that a transfer certificate of title of the said parcel of land had already been issued in their names. Belgica committed to the Milambiling spouses that she will personally deliver the title to them in Saudi Arabia. Sometime in May 1986, Belgica arrived in Saudi Arabia but the title was not with her. Belgica said that she left it in their house in the Philippines and forgot to bring it with her.

Urlan Milambiling was angry and immediately called up his relatives in the Philippines and asked them to find out from the Office of the Register of Deeds of Rizal what happened to their title. He was informed that the Certificate of Title covering the said parcel of land had indeed been transferred in their names but was subsequently cancelled and title transferred in the names of x x x the spouses De Guzman.

Milambiling was also told about the circumstances that led to the cancellation of their title. It appears that while the spouses Milambiling were in Saudi Arabia, a couple identifying themselves as the spouses Urlan and Asuncion Milambiling went to the house of a certain Natividad Javiniar, a real estate broker, inquiring if the latter could find a buyer for their lot located in Vermont Subdivision, Antipolo, Rizal. Javiniar accompanied the said couple to the house of [the] spouses De Guzman. Having somehow obtained possession of the owner’s duplicate copy of

the certificate of title in the name of the spouses Milambiling, the impostor-couple were able to convince the de Guzmans to buy the property. On 20 November 1985, the impostor-couple, posing as the spouses Milambiling, executed a Deed of Absolute Sale in favor of [the] spouses de Guzman who paid the stipulated purchase price of P99,200.00. On 30 April 1986, [the De Guzmans] registered the said sale with the Register of Deeds of Marikina who cancelled the certificate of title in the name of the Milambilings and issued TCT No. N-117249 in the names of [the] De Guzman[s].

Upon learning of the above, Urlan Milambiling quickly returned to the Philippines. On 24 July 1986, the spouses Milambiling filed an action against [the spouses De Guzman] before the Regional Trial Court of Antipolo, Rizal, Branch 73, for declaration of nullity of sale and title with damages.

x x x

[The] spouses De Guzman appealed the decision of the trial court to the Court of Appeals. On 18 July 1991, [the Court of Appeals] rendered its decision affirming the decision of the court a quo.

[The] spouses De Guzman then went to the Supreme Court on a petition for review on certiorari. On 01 July 1992, the High Tribunal issued a resolution denying the petition on the ground that no reversible error was committed by the Court of Appeals.

On 11 February 1993, [the] spouses De Guzman filed [an] action for damages against the Assurance Fund before the Regional Trial Court of Pasig, Branch 153[,] [impleading the National Treasurer of the Republic of the Philippines and the Register of Deeds of Marikina City.][1]

On January 20, 1995, the RTC rendered its decision finding in favor of the De Guzman spouses, thus:

IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of the plaintiffs and against the defendants adjudging the Assurance Fund liable to the amount actually paid by the plaintiffs which is in the amount of P99,200.00 and ordering the defendants Treasurer and/or Registrar to pay or cause the payment of the said amount to herein plaintiffs.

SO ORDERED.[2]

The National Treasurer and the Marikina Registrar of Deeds appealed from the above decision. The Court of Appeals found merit in the appeal and reversed the decision of the RTC.

We affirm the decision of the Court of Appeals.

Section 95 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, provides:

SEC. 95. Action for compensation from funds. – A person who, without negligence on his part, sustains loss or damage, or is deprived of land or any estate or interest therein in consequence of the bringing of the land under the operation of the Torrens system or arising after original registration of land, through fraud or in consequence of any error, omission, mistake or misdescription in any certificate of title or in any entry or memorandum in the registration book, and who by the provisions of this Decree is barred or otherwise precluded under the provision of any law from bringing an action for the recovery of such land or the estate or interest therein, may bring an action in any court of competent jurisdiction for the recovery of damage to be paid out of the Assurance Fund.

The precursor of Section 95, Section 101 of the Land Registration Act (Act No. 496), similarly states:

SEC. 101.  Any person who without negligence on his part sustains loss or damage through any omission, mistake or misfeasance of the clerk, or register of deeds, or of any examiner of titles, or of any deputy or clerk of the register of deeds in the performance of their respective duties under the provisions of this Act, and any person who is wrongfully deprived of any land or any interest therein, without negligence on his part, through the bringing of the same under the provisions of this Act or by the registration of any other persons as owner of such land, or by any mistake, omission, or misdescription in any certificate or owner’s duplicate, or in any entry or memorandum in the register or other official book, or by any cancellation, and who by the provisions of this Act is barred or in any way precluded from bringing an action for the recovery of such land or interest therein, or claim upon the same, may bring in any court of competent jurisdiction an action against the Treasurer of the Philippine Archipelago for the recovery of damages to be paid out of the Assurance Fund.

It may be discerned from the foregoing provisions that the persons who may recover from the Assurance Fund are:

1) Any person who sustains loss or damage under the following conditions:

a) that there was no negligence on his part; and

b) that the loss or damage sustained was through any omission, mistake or malfeasance of the court personnel, or the Registrar of Deeds, his deputy, or other employees of the Registry in the performance of their respective duties under the provisions of the Land Registration Act, now, the Property Registration Decree; or

2) Any person who has been deprived of any land or interest therein under the following conditions:

a) that there was no negligence on his part;

b) that he was deprived as a consequence of the bringing of his land or interest therein under the provisions of the Property Registration Decree; or by the registration by any other person as owner of such land; or by mistake, omission or misdescription in any certificate of owner’s duplicate, or in any entry or memorandum in the register or other official book or by any cancellation; and

c) that he is barred or in any way precluded from bringing an action for the recovery of such land or interest therein, or claim upon the same.[3]

The Court of Appeals correctly held that petitioners’ circumstances do not fall under the first case. Petitioners have not alleged that the loss or damage they sustained was “through any omission, mistake or malfeasance of the court personnel, or the Registrar of Deeds, his deputy, or other employees of the Registry in the performance of their respective duties.” Moreover, petitioners were negligent in not ascertaining whether the impostors who executed a deed of sale in their (petitioner's) favor were really the owners of the property.[4]

Nor does petitioners’ situation fall under the second case. They were not deprived of their land “as a consequence of the bringing of [the] land or interest therein under the provisions of the Property Registration Decree.” Neither was the deprivation due to “the registration by any other person as owner of such land,” or “by mistake, omission or misdescription in any certificate or owner’s duplicate, or in any entry or memorandum in the register or other official book or by any cancellation.”

Petitioners' claim is not supported by the purpose for which the Assurance Fund was established. The Assurance Fund is intended to relieve innocent persons

from the harshness of the doctrine that a certificate is conclusive evidence of an indefeasible title to land.[5] Petitioners did not suffer any prejudice because of the operation of this doctrine. On the contrary, petitioners sought to avail of the benefits of the Torrens System by registering the property in their name. Unfortunately for petitioners, the original owners were able to judicially recover the property from them. That petitioners eventually lost the property to the original owners, however, does not entitle them to compensation under the Assurance Fund. While we commiserate with petitioners, who appear to be victims of unscrupulous scoundrels, we cannot sanction compensation that is not within the law's contemplation. As we said in Treasurer  of   the Philippines vs.  Court  of Appeals,[6] the Government is not an insurer of the unwary citizen’s property against the chicanery of scoundrels. Petitioners’ recourse is not against the Assurance Fund, as the Court of Appeals pointed out, but against the rogues who duped them.

ACCORDINGLY, the petition is DENIED.

Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.

SECOND DIVISION

[G.R. No. 125758. January 20, 2004]

HEIRS OF SUSANA DE GUZMAN TUAZON, represented by CIRILO TUAZON, petitioners, vs. HON. COURT OF APPEALS and MA. LUISA VICTORIO, ALBERTO GUANIO, JAIME B. VICTORIO, INES MOLINA, ERLINDA V. GREGORIO, VISITACION V. GERVACIO, and FROILAN C. GERVACIO, respondents.

D E C I S I O N

CALLEJO, SR., J.:

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the March 12, 1996 Decision[1] of the Court of Appeals, as well as its July 19, 1996 Resolution[2] denying the petitioners’ Motion for Reconsideration.

As culled from the records, the petition at bench stemmed from the following factual backdrop –

On August 17, 1994, Branch 71 of the Regional Trial Court of Antipolo, Rizal, issued an Order[3] in LRC Case No. 93-1310 granting the petitioners’ prayer for the issuance of a second owner’s duplicate copy of Original Certificate of Title (OCT) No. 4331 of the Registry of Deeds of Rizal, in lieu of the lost copy.

On June 19, 1995, the private respondents filed with Branch 74 of the same court an action for “Quieting of Title and Nullification and Cancellation of Title,” which was docketed as Civil Case No. 95-3577, praying in the main “that an order be issued directing the Register of Deeds of Rizal to cancel the owner’s duplicate copy of OCT No. 4331 it has issued pursuant to the order of the Regional Trial Court of Antipolo, Rizal, Branch 71, in LRC Case No. 93-1310 thereof.” [4] In their Answer filed on August 14, 1995, the petitioners averred inter   alia that the private respondents had no cause of action against them; that Branch 74 had no jurisdiction to annul and/or reverse an order of a co-equal court; and that OCT No. 4331, on file with the Registry of Deeds of Pasig, Rizal, is subsisting, otherwise, Branch 71 would not have ordered the issuance of a new duplicate OCT in lieu of that which was irretrievably lost.[5]

On September 25, 1995, the private respondents filed a “Motion to Transfer Case” to Branch 71 “in order to avoid any conflict of decision between two separate branches of this court which are co-equal to each other.”[6] On October 11, 1995, the petitioners opposed the motion on the following grounds: (1) Under the doctrine of judicial stability or non-interference which bars Branch 74 from entertaining the case, the remedy is not to transfer the case to Branch 71, as prayed for by the private respondents, but to dismiss the case outright; (2) The Order promulgated by Branch 71 on August 17, 1994, declaring the lost owner’s duplicate copy of OCT No. 4331 null and void and directing the Register of Deeds of Pasig to issue a new one to the petitioners, had long attained finality and can no longer be amended, modified nor set aside; and (3) Neither Branch 74 nor Branch 71 has the jurisdiction to annul the said order since the jurisdiction to annul the same is exclusively lodged with the Court of Appeals, as provided in Section 9 of Batas Pambansa Bilang 129.[7] The petitioners, therefore, prayed that the private respondents’ motion to transfer case be denied and an order be issued dismissing outright the petition on the ground of lack of jurisdiction.

On October 24, 1995, Branch 74 issued an Order denying the petitioners’ prayer to dismiss the case as well as the private respondents’ motion to transfer case, to wit:

For resolution is the Motion to Transfer Case dated September 25, 1995 filed by the petitioners thru counsel as well as the opposition thereto dated October 12, 1995 filed by the respondents, thru counsel and it appearing that the Order dated August 17, 1994 issued by the Regional Trial Court of Antipolo, Rizal, Branch 71, granting the petition for the issuance of new owner’s duplicate copy of OCT NO. 4331 had long become final and executory and considering that the present case involves an action for the cancellation and nullification of the title which is entirely different from the said petition, which is founded on a different cause of action and further considering the reasons stated therein to be bereft of merit, the same is hereby denied.

Defendant’s prayer for dismissal of this case is likewise denied.[8]

Assailing the above-quoted order to have been issued with grave abuse of discretion amounting to lack or excess of jurisdiction, the petitioners on December 4, 1995 filed with the Court of Appeals a petition for certiorari under Rule 65 of the Rules of Court seeking to annul the order. On March 12, 1996, the respondent Court rendered its herein assailed decision dismissing the petitioners’ petition for certiorari.[9] The petitioners’ motion for reconsideration of the aforesaid decision was, likewise, denied by the respondent Court in an Order dated July 19, 1996.[10]

Hence, the present petition. The petitioners allege the following grounds therefor:

I

THE RESPONDENT COURT ERRED IN HOLDING THAT THE PETITION FILED BY PRIVATE RESPONDENTS IN CIVIL CASE NO. 95-3577 IN BRANCH 74 OF THE REGIONAL TRIAL COURT OF ANTIPOLO, RIZAL, IS FOR QUIETING OF TITLE AND CANCELLATION OF ORIGINAL CERTIFICATE OF TITLE NO. 4331.

II

THE RESPONDENT COURT ERRED IN HOLDING THAT THE PETITION FOR ISSUANCE OF OWNER’S DUPLICATE OF OCT NO. 4331 FILED BY PETITIONERS IN BRANCH 71 OF THE REGIONAL TRIAL COURT OF ANTIPOLO, RIZAL, IS FOR RECONSTITUTION OF TITLE.

III

THE RESPONDENT COURT ERRED IN HOLDING THAT THE REGIONAL TRIAL COURT OF ANTIPOLO, BRANCH 74, HAS JURISDICTION TO ENTERTAIN THE PETITION FILED BY PRIVATE RESPONDENTS IN CIVIL CASE NO. 95-3577.

IV

THE RESPONDENT COURT ERRED IN NOT HOLDING THAT THE PRIVATE RESPONDENTS HAVE NO CAUSE OF ACTION AGAINST THE PETITIONERS.[11]

The petition has no merit.

It is axiomatic that the allegations in the complaint determine the nature of the action, and consequently, the jurisdiction of the courts. [12] This is because the complaint must contain a concise statement of the ultimate facts constituting the plaintiff’s cause of action and specify the relief sought. [13] The pertinent allegations made by the private respondents in their petition in Civil Case No. 95-3577 are herein-below reproduced, to wit:

2. Nazario de Guzman was the owner in fee simple of those parcels of land situated at Barrio Dilang-Cainta, Rizal, embraced in and covered by then Original Certificate of Title No. 4331 issued by the Register of Deeds of Rizal, a photocopy of which is hereto attached as Annex “A” and made a part hereof and which parcels of land are more particularly described as follows:

…

3. On October 13, 1931, the surviving spouse of Nazario de Guzman, Maria Gonzaga, with the approval of the Court, sold the above-described parcel of land to Alejandro Santos; a certified photocopy of which Sale in Spanish is hereto attached as Annex “B” and made part hereof; and Original Certificate of Title No. 4331 was cancelled and in lieu thereof, Transfer Certificate of Title No. 21839 was issued by the Register of Deeds of Rizal in the name of Alejandro Santos; a certified photocopy of which is hereto attached as Annex “B-1” and made a part hereof;

4. On April 7, 1941 by virtue of a Deed of Absolute Sale, a certified photocopy of which is hereto attached as Annex “C” and made a part hereof, Alejandro Santos sold the above-described parcel of land to the spouses Jacinto de la Cruz and Andrea de Leon and Transfer Certificate of Title No. 21839 was cancelled and in lieu thereof Transfer Certificate of Title No. 43164, a certified photocopy of which is

hereto attached as Annex “C-1” and made part hereof, was issued in the names of the said spouses;

5. On June 19, 1941, the spouses Jacinto de la Cruz and Andrea de Leon sold to Gabriel de la Cruz the above-described parcels of land pursuant to the Deed of Absolute Sale they executed on the same date, a certified photocopy of which Deed of Absolute Sale is hereto attached as Annex “D” and made a part hereof and as a consequence thereof, Transfer Certificate of Title No. 43164 was cancelled and in lieu thereof Transfer Certificate of Title No. 44790 was issued by the Register of Deeds of Rizal, a certified photocopy of which is hereto attached as Annex “D-1” and made a part hereof;

6. On June 9, 1943, Gabriel de la Cruz sold the above-described parcels of land to Isidro Victorio, the predecessor of the petitioners, by virtue of that Deed of Absolute Sale of Land executed by the former in favor of the latter, a certified photocopy of which is hereto attached as Annex “E” and made a part hereof. Transfer Certificate of Title No. 44790 was cancelled and in its place was issued Transfer Certificate of Title No. 44851 in the name of Isidro Victorio a certified photocopy of which is hereto attached as Annex “E-1” and made a part hereof;

7. Isidro Victorio had caused the parcels of land covered by the Transfer Certificate of Title No. 44851 to be consolidated with the parcel of land shown on Plan PSU-188478 as Lot 1 and 2 thereof, and subdivided in accordance with consolidation-subdivision plan (LRC) PCS-188478 into 4 lots and the corresponding titles for each resulting subdivision lots were issued as per Transfer Certificates of Title Nos. 304776, 304777, 304778 and 304779, photocopies of which are all hereto attached as Annexes F, F-1, F-2, and F-3, respectively, and made part hereof;

8. Isidro Victorio in turn sold to petitioners by virtue of those Deeds of Absolute Sale hereto attached as Annexes “G,” “G-1,” “G-2,” and “G-3,” the parcels of land now covered by Annexes F to F-3 as follows:

…

9. On November 5, 1993, the respondents filed a petition before the Regional Trial Court of Antipolo Rizal, Branch 71, asking for the issuance of a second owner’s duplicate copy of the Original Certificate of Title No. 4331 and which petition was docketed as LRC Case No. 93-1310 in said Court;

10. On August 17, 1994, an order was issued by the Regional Trial Court of Antipolo, Rizal, Branch 71, declaring the owner’s duplicate copy of Original Certificate of Title No. 4331 which was supposedly lost, as null and void and directed the Register of Deeds of Pasig, Metro Manila to issue a new owner’s duplicate copy of Original Certificate of Title No. 4331;

11. Such order of the Regional Trial Court of Antipolo, Rizal, Branch 71 in LRC Case No. 93-1310 is based on the perjured testimony of respondent Cirilo Tuazon that the copy of the owner’s duplicate copy of Original Certificate of Title No. 4331 was lost while in the possession of his mother, Susana de Guzman and they found this out after the death of Susana de Guzman Tuazon;

12. Such order of the Regional Trial Court of Antipolo, Rizal, Branch 71 in LRC Case No. 93-1310 thereof should be annulled as the said Court was made to believe the oral testimony of respondent Cirilo Tuazon, despite the documentary evidences annexed hereto, which were deliberately concealed by the respondents from the Court, which show that the owner’s duplicate copy of Original Certificate of Title No. 4331 was already cancelled;

13. The issuance of a new owner’s duplicate copy of Original Certificate of Title No. 4331, having no factual and legal basis, casts a cloud on the titles of the petitioners and should be ordered cancelled;

13.a. That by reason of the unlawful and illegal acts of respondents heirs of Susana de Guzman Tuazon in causing the issuance of a fake second owner’s duplicate copy, the petitioners were forced to hire the services of counsel and to pay the latter the amount of P200,000.00 as attorney’s fees;

13.b. That likewise as a result of respondent’s action, respondents should be made liable to pay herein petitioners’ litigation expenses as may be incurred in the prosecution of this case and such amount of exemplary damages as may be fixed by this court;

WHEREFORE, it is respectfully prayed that an order be issued directing the Register of Deeds of Rizal to cancel the owner’s duplicate copy of Original Certificate of Title No. 4331 it has issued pursuant to the order of the Regional Trial Court of Antipolo, Rizal, Branch 71 in LRC Case No. 93-1310 thereof.[14]

A cursory examination of the foregoing averments readily shows that the private respondents’ petition is indeed, as captioned, one for quieting of title and

nullification and cancellation of title. Thus, the private respondents assert therein that the issuance to petitioners of a new owner’s duplicate copy of OCT No. 4331, which was procured by fraudulent representation, casts a cloud on the titles of the private respondents and, therefore, should be ordered cancelled. In Baricuatro, Jr. v. Court of Appeals,[15] we held that:

…[Q]uieting of title is a common law remedy for the removal of any cloud upon or doubt or uncertainty with respect to title to real property. Originating in equity jurisprudence, its purpose is to secure “… an adjudication that a claim of title to or an interest in property, adverse to that of the complainant, is invalid, so that the complainant and those claiming under him may be forever afterward free from any danger of hostile claim.” In an action for quieting of title, the competent court is tasked to determine the respective rights of the complainant and other claimants, “… not only to place things in their proper place, to make the one who has no rights to said immovable respect and not disturb the other, but also for the benefit of both, so that he who has the right would see every cloud of doubt over the property dissipated, and he could afterwards without fear introduce the improvements he may desire, to use, and even to abuse the property as he deems best (citation omitted).” Such remedy may be availed of under the circumstances enumerated in the Civil Code:

“ART. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently 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 brought to remove such cloud or to quiet the title.

An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein.”

Verily, the private respondents’ complaint before Branch 74 seeks the removal of a cloud from and an affirmation of their ownership over the disputed properties covered by the titles issued subsequent to the cancellation of OCT No. 4331. Penultimate to the primary relief sought is the private respondents’ prayer for the cancellation of the new owner’s duplicate copy of OCT No. 4331 issued to the petitioners by virtue of the August 17, 1994 Order of Branch 71 in LRC Case No. 93-1310. Hence, contrary to the petitioners’ asseveration, the private respondents’ petition before Branch 74 makes out a case for quieting of title, and nullification and cancellation of title, and not a mere annulment of a final order of the RTC as viewed under par. (2), Sec. 9, B.P. Blg. 129. [16] Under the circumstances, the case before Branch 74 was actually a real action, affecting as it does title to or

possession of real property,[17] jurisdiction over which is clearly vested in the Regional Trial Court as provided in par. (2), Sec. 19, B.P. Blg. 129. [18] Thus, even the petitioners’ allusion to paragraph 12 of the private respondents’ petition above, in support of their claim that the main, if not the real, thrust of the private respondents’ petition is for nullification of the order of Branch 71 on the ground of fraud, cannot be given serious consideration. We have declared that under our system of pleading it is the duty of the courts to grant the relief to which the parties are shown to be entitled by the allegations in their pleadings and the facts proved at the trial, and the mere fact that they themselves misconstrued the legal effect of the facts thus alleged and proved will not prevent the court from placing the just construction thereon and adjudicating the issue accordingly.[19]

The petitioners, likewise, asseverate that their petition in LRC Case No. 93-1310 involved the issuance, in lieu of the lost one, of the owner’s copy of OCT No. 4331 which is governed by Section 109 of Presidential Decree No. 1529, otherwise, known as the “Property Registration Decree.”[20] Hence, the Court of Appeals erred when it found that LRC Case No. 93-1310 was a petition for reconstitution which can be validly made only in case it is the original copy of the certificate of title with the Register of Deeds which is lost or destroyed, and the cause of action of which is based on Republic Act No. 26.[21] The argument, however, is non sequitur. Regardless of whether petitioners’ cause of action in LRC Case No. 93-1310 is based on Section 109 of P.D. No. 1529 or under Rep. Act No. 26, the same has no bearing on the petitioners’ cause in this case. Precisely, in both species of reconstitution under Section 109 of P.D. No. 1529 and R.A. No. 26, the nature of the action denotes a restoration of the instrument which is supposed to have been lost or destroyed in its original form and condition. The purpose of the action is merely to have the same reproduced, after proper proceedings, in the same form they were when the loss or destruction occurred, and does not pass upon the ownership of the land covered by the lost or destroyed title.[22] It bears stressing at this point that ownership should not be confused with a certificate of title. Registering land under the Torrens System does not create or vest title because registration is not a mode of acquiring ownership. A certificate of title is merely an evidence of ownership or title over the particular property described therein.[23] Corollarily, any question involving the issue of ownership must be threshed out in a separate suit, which is exactly what the private respondents did when they filed Civil Case No. 95-3577 before Branch 74. The trial court will then conduct a full-blown trial wherein the parties will present their respective evidence on the issue of ownership of the subject properties to enable the court to resolve the said issue. Branch 74, therefore, committed no reversible error when it denied the petitioners’ motion to dismiss the private respondents’ petition in Civil Case No. 95-3577.

IN THE LIGHT OF ALL THE FOREGOING, the petition is DENIED. The Decision of the Court of Appeals dated March 12, 1996 in CA-G.R. SP No. 39167 is hereby AFFIRMED.

SO ORDERED.

Puno, (Chairman), Quisumbing, Austria-Martinez and Tinga, JJ., concur.

FIRST DIVISION

[G.R. No. 103959. August 21, 1997]

SPOUSES REGALADO SANTIAGO and ROSITA PALABYAB, JOSEFINA ARCEGA, petitioners, vs. THE HON. COURT OF APPEALS; THE HON. CAMILO C. MONTESA, JR., Presiding Judge of the RTC of Malolos, Bulacan, Branch 19, and QUIRICO ARCEGA, respondents.

D E C I S I O N

HERMOSISIMA, JR., J.:

Assailed in this petition for review under Rule 45 is the November 8, 1991 Decision of respondent Court of Appeals in CA-G.R. CV No. 25069. It affirmed in toto the judgment of Branch 19, Regional Trial Court of Malolos, Bulacan, in Civil Case No. 8470-M. The action therein sought to declare null and void the “Kasulatan ng Bilihang Tuluyan ng Lupa” executed on July 18, 1971 by the late Paula Arcega, sister of private respondent, in favor of herein petitioners over a parcel of land consisting of 927 square meters, situated in Barangay Tabing Ilog, Marilao, Bulacan.

Paula Arcega was the registered owner of that certain parcel of land covered by Transfer Certificate of Title No. T-115510. Her residential house stood there until 1970 when it was destroyed by a strong typhoon.

On December 9, 1970, Paula Arcega executed what purported to be a deed of conditional sale over the land in favor of Josefina Arcega and the spouses Regalado Santiago and Rosita Palabyab, the petitioners herein, for and in consideration of P20,000.00. The vendees were supposed to pay P7,000.00 as downpayment. It was expressly provided that the vendor would execute and deliver to the vendees an absolute deed of sale upon full payment by the vendees of the unpaid balance of the purchase price of P13,000.00.

Subsequently, on July 18, 1971, supposedly upon payment of the remaining balance, Paula Arcega executed a deed of absolute sale of the same parcel of land in favor of petitioners. Thereupon, on July 20, 1971, TCT No. T-115510, in the name of Paula Arcega, was cancelled and a new title, TCT No. T-148989 was issued in the name of petitioners.

On April 10, 1985, Paula Arcega died single and without issue, leaving as heirs her two brothers, Narciso Arcega[1] and private respondent Quirico Arcega.

Incidentally, before Paula Arcega died, a house of four bedrooms with a total floor area of 225 square meters was built over the parcel of land in question. Significantly, the master's bedroom, with toilet and bath, was occupied by Paula Arcega until her death despite the execution of the alleged deed of absolute sale. The three other bedrooms, smaller than the master's bedroom, were occupied by the petitioners who were the supposed vendees in the sale.

Private respondent Quirico Arcega, as heir of his deceased sister, filed on October 24, 1985 Civil Case No. 8470-M before the RTC of Malolos, Bulacan, seeking to declare null and void the deed of sale executed by his sister during her lifetime in favor of the petitioners on the ground that said deed was fictitious since the purported consideration therefor of P20,000.00 was not actually paid by the vendees to his sister.

Answering the complaint before the RTC, petitioner spouses averred that private respondent's cause of action was already barred by the statute of limitations considering that the disputed deed of absolute sale was executed in their favor on July 18, 1971, by which TCT No. 148989 was issued on July 20, 1971, while private respondent's complaint was filed in court only on October 24, 1985 or more than fourteen (14) years from the time the cause of action accrued. Petitioners also deny that the sale was fictitious. They maintain that the purchase price was actually paid to Paula Arcega and that said amount was spent by the deceased in the construction of her three-door apartment on the parcel of land in question.

Josefina Arcega, the other petitioner, was declared in default for failure to file her answer within the reglementary period.

After trial, the RTC rendered judgment in favor of private respondent Quirico Arcega, viz.:

"(a) Declaring as null and void and without legal force and effect the 'Kasulatan Ng Bilihang Tuluyan ng Lupa' dated July 18, 1971 executed by the deceased Paula Arcega covering a parcel of land embraced under TCT No. T-115510 in favor of the defendants;

(b) Declaring TCT No. T-148989 issued and registered in the names of defendants Josefina Arcega and spouses Regalado Santiago and Rosita Palabyab as null and void;

(c) Ordering the reconveyance of the property including all improvements thereon covered by TCT No. T-115510, now TCT No. T-148989, to the plaintiff, subject to real estate mortgage with the Social Security System; and

(d) To pay jointly and severally the amount of P10,000.00 as attorney's fees.

On the counterclaim, the same is hereby dismissed for lack of legal and/or factual basis (p. 6, decision, pp. 295-300, rec.)."[2]

In ruling for private respondent, the trial court, as affirmed in   toto by the public respondent Court of Appeals, found that:

"On the basis of the evidence adduced, it appears that plaintiff Quirico Arcega and his brother Narciso Arcega are the only surviving heirs of the deceased Paula Arcega who on April 10, 1985 died single and without issue. Sometime in 1970, a

strong typhoon destroyed the house of Paula Arcega and the latter together with the defendants decided to construct a new house. All the defendants[3] being members of the SSS, Paula deemed it wise to lend her title to them for purposes of loan with the SSS.  She executed a deed of sale to effect the transfer of the property in the name of the defendants and thereafter the latter mortgaged the same for P30,000.00 but the amount actually released was only P25,000.00. Paula Arcega spent the initial amount of P30,000.00 out of her savings for the construction of the house sometime in 1971 and after the same and the proceeds of the loan were exhausted, the same was not as yet completed. Paula Arcega and her brothers sold the property which they inherited for P45,000.00 and the same all went to the additional construction of the house, however, the said amount is not sufficient. Thereafter, Paula Arcega and her brothers sold another property which they inherited for P805,950.00 and one-third (1/3) thereof went to Paula Arcega which she spent a portion of which for the finishing touches of the house. The house as finally finished in 1983 is worth more than P100,000.00 with a floor area of 225 square meters consisting of four bedrooms . A big master's bedroom complete with a bath and toilet was occupied by Paula Arcega up to the time of her death on April 10, 1985 and the other three smaller bedrooms are occupied by spouses, defendants Regalado Santiago and Rosita Palabyab, and Josefina Arcega.After the death of Paula Arcega defendant Josefina Arcega and Narciso Arcega constructed their own house at back portion of the lot in question.

There is clear indication that the deed of sale, which is unconscionably low for 937 square meters in favor of the defendants sometime on July 18, 1971 who are all members of SSS, is merely designed as an accommodation for purposes of loan with the SSS. Paula Arcega cognizant of the shortage of funds in her possession in the amount of P30,000.00, deemed it wise to augment her funds for construction purposes by way of a mortgage with the SSS which only defendants could possibly effect they being members of the SSS. Since the SSS requires the collateral to be in the name of the mortgagors, Paula Arcega executed a simulated deed of sale (Kasulatan ng Bilihang Tuluyan ng Lupa) for P20,000.00 dated July 18, 1971 in favor of the defendants and the same was notarized by Atty. Luis Cuvin who emphatically claimed that no money was involved in the transaction as the parties have other agreement. The allegations of the defendants that the property was given to them (Kaloob) by the deceased has no evidentiary value. While it is true that Rosita Palabyab stayed with the deceased since childhood, the same cannot be said with respect to defendant Josefina Arcega, distant relative and a niece of the wife of Narciso Arcega, who stayed with deceased sometime in 1966 at the age of 19 years and already working as a saleslady in Manila. Did the deceased indeed give defendant Josefina Arcega half of her property out of love and gratitude? Such circumstance appears illogical if not highly improbable. As a matter of fact defendant Josefina Arcega in her unguarded moment unwittingly told the truth that 

couple (Regalado Santiago and Rosita Palabyab) had indeed borrowed the title and then mortgaged the same with the SSS as shown in her direct testimony which reads:

'Atty Villanueva:

Q- Why did you say that the house is owned by spouses Santiago but the lot is bought by you and Rosita?

A- Because at that time, the couple[4] borrowed the title and then mortgaged the property with the SSS. There is only one title but both of us owned it. (TSN dtd. 19 Oct. '88, p. 5)"[5]

On appeal, the public respondent Court of Appeals dismissed the same, affirming in all respects the RTC judgment.

Hence, this petition.

The petition is unmeritorious.

Verily, this case is on all fours with Suntay  v. Court of Appeals.[6] There, a certain Federico Suntay was the registered owner of a parcel of land in Sto. Nino, Hagonoy, Bulacan. A rice miller, Federico applied on September 30, 1960 as a miller-contractor of the then National Rice and Corn Corporation (NARIC), but his application was disapproved because he was tied up with several unpaid loans. For purposes of circumvention, he thought of allowing his nephew-lawyer, Rafael Suntay, to make the application for him. To achieve this Rafael prepared a notarized Absolute Deed of Sale whereby Federico, for and in consideration of P20,000.00, conveyed to Rafael said parcel of land with all its existing structures. Upon the execution and registration of said deed, Certificate of Title No. 0-2015 in the name of Federico was cancelled and, in lieu thereof, TCT No. T-36714 was issued in the name of Rafael. Sometime in the months of June to August, 1969,[7] Federico requested Rafael to deliver back to him the owner's duplicate of the transfer certificate of title over the properties in question for he intended to use the property as collateral in securing a bank loan to finance the expansion of his rice mill. Rafael, however, without just cause, refused to deliver the title insisting that said property was "absolutely sold and conveyed [to him] xxx for a consideration of P20,000.00, Philippine currency, and for other valuable consideration." We therein ruled in favor of Federico Suntay and found that the deed of sale in question was merely an absolutely simulated contract for the purpose of accommodation and therefore void. In retrospect, we observed in that case:

"Indeed the most protuberant index of simulation is the complete absence of an attempt in any manner on the part of the late Rafael to assert his rights of ownership over the land and rice mill in question. After the sale, he should have entered the alnd and occupied the premises thereof. He did not even attempt to. If he stood as owner, he would have collected rentals from Federico for the use and occupation of the land and its improvements. All that the late Rafael had was a title in his name.

xxx xxx xxx

xxx The fact that, notwithstanding the title transfer, Federico remained in actual possession, cultivation and occupation of the disputed lot from the time the deed of sale was executed until the present, is a circumstance which is unmistakably added proof of the fictitiousness of the said transfer, the same being contrary to the principle of ownership." [8]

In the case before us, while petitioners were able to occupy the property in question, they were relegated to a small bedroom without bath and toilet, [9] while Paula Arcega remained virtually in full possession of the completed house and lot using the big master's bedroom with bath and toilet up to the time of her death on April 10, 1985.[10] If, indeed, the transaction entered into by the petitioner's and the late Paula Arcega on July 18, 1971 was a veritable deed of absolute sale, as it was purported to be, then Ms. Arcega had no business whatsoever remaining in the property and, worse, to still occupy the big master's bedroom with all its amenities until her death on April 10, 1985. Definitely, any legitimate vendee of real property who paid for the property with good money wil not accede to an arrangement whereby the vendor continues occupying the most favored room in the house while he or she, as new owner, endures the disgrace and absurdity of having to sleep in a small bedroom without bath and toilet as if he or she is a guest or a tenant in the house. In any case, if petitioners really stood as legitimate owners of the property, they would have collected rentals from Paula Arcega for the use and occupation of the master's bedroom as she would then be a mere lessee of the property in question. However, not a single piece of evidence was presented to show that this was the case. All told, the failure of petitioners to take exclusive possession of the property allegedly sold to them, or in the alternative, to collect rentals from the alleged vendee Paula Arcega, is contrary to the principle of ownership and a clear badge of simulation that renders the whole transaction void and without force and effect, pursuant to Article 1409 of the New Civil Code:

"The following contracts are inexistent and void from the beginning:

xxx xxx xxx

(2) Those which are absolutely simulated or fictitious;

xxx xxx xxx."

The conceded fact that subject deed of absolute sale executed by Paula Arcega in favor of petitioners is a notarized document does not justify the petitioners' desired conclusion that said sale is undoubtedly s true conveyance to which the parties thereto are irrevocably and undeniably bound. To be considered with great significance is the fact that Atty. Luis Cuvin who notarized the deed disclaimed the truthfulness of the document when he testified that "NO MONEY WAS INVOLVED IN THE TRANSACTION."[11] Furthermore, though the notarization of the deed of sale in question vests in its favor the presumption of regularity, it is not the intention nor the function of the notary public to validate and make binding an instrument never, in the first place, intended to have any binding legal effect upon the parties thereto. The intention of the parties still is and always will be the primary consideration in determining the true nature of a contract. Here, the parties to the "Kasulatan ng Bilihang Tuluyan ng Lupa," as shown by the evidence and accompanying circumstances, never intended to convey the property thereto from one party to the other for valuable consideration. Rather, the transaction was merely used to facilitate a loan with the SSS with petitioners-mortgagors using the property in question, the title to which they were able to register in their names through the simulated sale, as collateral.

The fact that petitioners were able to secure a title in their names, TCT No. 148989, did not operate to vest upon petitioners ownership over Paula Arcega's property. That act has never been recognized as a mode of acquiring ownership. As a matter of fact, even the original registration of immovable property does not vest title thereto.[12] The Torrens system does not create or vest title. It only confirms and records title already existing and vested. It does not protect a usurper from the true owner. It cannot be a shield for the commission of fraud. It does not permit one to enrich himself at the expense of another. [13] Where one does not have any rightful claim over a real property, the Torrens system of registration can confirm or record nothing.

Petitioners, nevertheless, insist that both the trial court and the respondent court should have followed the Parole Evidence Rule and prevented evidence, like the testimony of Notary Public, Atty. Luis Cuvin, private respondent Quirico Arcega, among others, which impugned the two notarized deeds of sale.

The rule on parole evidence under Section 9, Rule 130 is qualified by the following exceptions:

“However, a party may present evidence to modify, explain or add to the terms of the written agreement if he puts in issue in his pleading;

(a) An intrinsic ambiguity, mistake or imperfection in the written agreement;

(b) The failure of the written agreement to express the true intent and agreement of the parties thereto;

(c) The validity of the written agreement; or

(d) The existence of other terms agreed to by the parties or their successors in interest after the execution of the written agreement.

The term ‘agreement’ includes wills.”

In this case, private respondent Quirico Arcega was able to put in issue in his complaint before the Regional Trial Court the validity of the subject deeds of sale for being a simulated transaction:

“6. That in 1971, the defendants, who by then were already employed in private firms and had become members of the Social Security System by virtue of their respective employments, decided among themselves to build a new house on the property of PAULA ARCEGA above described and to borrow money from the Social Security System to finance the proposed construction.

7. That in order to secure the loan from the Social Security System it was necessary that the lot on which the proposed house would be erected should be registered and titled in the names of the defendants.

xxx xxx xxx

9. That in conformity with the above plans and schemes of the defendants, they made PAULA ARCEGA execute and sign a fictitious, hence null and void “KASULATAN NG  BILIHANG TULUYAN NG LUPA” on July 18, 1971, before Notary Public LUIS CUVIN, of Bulacan and entered in his register as Doc. No. 253, Page No. 52, Book No. XIX, Series of 1971, by which PAULA ARCEGA purportedly convyed(sic) in favor of the defendants JOSEFINA ARCEGA and the spouses REGALADO SANTIAGO and ROSITA PALABYAB, the whole parcel of land above described for the sum of TWENTY THOUSAND (P20,000.00), as consideration which was not actually, 

then or thereafter paid either wholly or partially. A copy of said document is hereto attached as Annex ‘B’ and made integral part hereof.

10. That defendants pursuing their unlawful scheme registered the said void and inexistent “KASULATAN NG BILIHANG TULUYAN NG LUPA” with the office of the Register of Deeds of Bulacan, procured the cancellation of Transfer Certificate of Title No. 115510, in the name of PAULA ARCEGA and the issuance of Transfer Certificate of Title No. 148989, in their names, a xeroxed copy of which is hereto attached as Annex ‘C’ and made integral part hereof.

11. That still in furtherance of their unjust and unlawful schemes, defendants secured a loan from Social Security System in the amount of P30,000.00, securing the payment thereof with a Real Estate Mortgage on the above-described property then already titled in their names as aforestated (pp. 2-3, complaint, pp. 1-5, rec.).”[14]

Moreover, the parol evidence rule may be waived by failure to invoke it, as by failure to object to the introduction of parol evidence. And, where a party who is entitled to the benefit of the rule waives the benefit thereof by allowing such evidence to be received without objection and without any effort to have it stricken from the minutes or disregarded by the trial court, he cannot, after the trial has closed and the case has been decided against him, invoke the rule in order to secure a reversal of the judgment by an appellate court.[15] Here, the records are devoid of any indication that petitioners ever objected to the admissibility of parole evidence introduced by private respondent in open court. The court cannot disregard evidence which would ordinarily be incompetent under the rules but has been rendered admissible by the failure of party to object thereto.[16] Petitioners have no one to blame but themselves in this regard.

Finally, petitioners argue that private respondent’s complaint filed before the trial court on October 24, 1985 is already barred by the statute of limitations and laches considering that the deed of absolute sale was executed in their favor by the deceased Paula Arcega on July 20, 1971. Indeed, more than fourteen (14) years had elapsed from the time his cause of action accrued to the time that the complaint was filed. Articles 1144 and 1391 of the New Civil Code provide:

“ART. 1144. The following actions must be brought within ten years from the time the right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment.”

“ART. 1391. The action for annulment shall be brought within four years.

This period shall begin:

In cases of intimidation, violence or undue influence, from the time the defect of the consent ceases.

In cases of mistake or fraud, from the time of the discovery of the same.

And when the action refers to contracts entered into by minors or other incapacitated persons, from the time the guardianship ceases.”

This submission is utterly without merit, the pertinent provision being Article 1410 of the New Civil Code which provides unequivocably that “[T]he action or defense for the declaration of the inexistence of a contract does not prescribe.”[17]

As for laches, its essence is the failure or neglect, for an unreasonable and unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier; it is the negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. [18] But there is, to be sure, no absolute rule as to what constitutes laches or staleness of demand; each case is to be determined according to its particular circumstances. The question of laches is addressed to the sound discretion of the court, and since laches is an equitable doctrine, its application is controlled by equitable considerations. It cannot be worked to defeat justice or to perpetrate fraud and injustice. [19] In the case under consideration, it would not only be impractical but well-nigh unjust and patently inequitous to apply laches against private respondent and vest ownership over a valuable piece of real property in favor of petitioners by virtue of an absolutely simulated deed of sale never, in the first place, meant to convey any right over the subject property. It is the better rule that courts, under the principle of equity, will not be guided or bound strictly by the statute of limitations or the doctrine of laches when to do so, manifest wrong or injustice would result.[20]

WHEREFORE, premises considered, the petition is hereby DENIED with costs against petitioners.

SO ORDERED.

Padilla, (Chairman), Bellosillo, Vitug, and Kapunan, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 112567 February 7, 2000

THE DIRECTOR, LANDS MANAGEMENT BUREAU, petitioner, vs.COURT OF APPEALS and AQUILINO L. CARIÑO, respondents.

PURISIMA, J.:

At bar is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to set aside the Decision of the Court of Appeals, dated November 11, 1993, in CA-G.R. No. 29218, which affirmed the Decision, dated February 5, 1990, of Branch XXIV, Regional Trial Court of Laguna, in LRC No. B-467, ordering the registration of Lot No. 6 in the name of the private respondent.

The facts that matter are as follows:

On May 15, 1975, the private respondent, Aquilino Cariño, filed with the then Branch I, Court of First Instance of Laguna, a petition1 for registration of Lot No. 6, a sugar land with an area of forty-three thousand six hundred fourteen (43,614) square meters, more or less, forming part of a bigger tract of land surveyed as Psu-108952 and situated in Barrio Sala, Cabuyao, Laguna.

Private respondent declared that subject land was originally owned by his mother, Teresa Lauchangco, who died on February 15, 1911,2 and later administered by him in behalf of his five brothers and sisters, after the death of their father in 1934.3

In 1949, private respondent and his brother, Severino Cariño, became co-owners of Lot No. 6 by virtue of an extra-judicial partition of the land embraced in Plan Psu-108952, among the heirs of Teresa Lauchangco. On July 26, 1963, through another deed of extrajudicial settlement, sole ownership of Lot No. 6 was adjudicated to the private respondent.4

Pertinent report of the Land Investigator of the Bureau of Lands (now Bureau of Lands Management), disclosed:

x x x x x x x x x

1. That the land subject for registration thru judicial confirmation of imperfect title is situated in the barrio of Sala, municipality of Cabuyao, province of Laguna as described on plan Psu-108952 and is identical to Lot No. 3015, Cad. 455-0, Cabuyao Cadastre; and that the same is agricultural in nature and the improvements found thereon are sugarcane, bamboo clumps, chico and mango trees and one house of the tenant made of light materials;

2. That the land subject for registration is outside any civil or military reservation, riverbed, park and watershed reservation and that same land is free from claim and conflict;

3. That said land is neither inside the relocation site earmarked for Metro Manila squatters nor any pasture lease; it is not covered by any existing public land application and no patent or title has been issued therefor;

4. That the herein petitioner has been in continuous, open and exclusive possession of the land who acquired the same thru inheritance from his deceased mother, Teresa Lauchangco as mentioned on the Extra-judicial

partition dated July 26, 1963 which applicant requested that said instrument will be presented on the hearing of this case; and that said land is also declared for taxation purposes under Tax Declaration No. 6359 in the name of the petitioner;

x x x x x x x x x5

With the private respondent as lone witness for his petition, and the Director of Lands as the only oppositor, the proceedings below ended. On February 5, 1990, on the basis of the evidence on record, the trial court granted private respondent's petition, disposing thus:

WHEREFORE, the Count hereby orders and declares the registration and confirmation of title to one (1) parcel of land identified as Lot 6, plan Psu-108952, identical to Cadastral Lot No. 3015, Cad. 455-D, Cabuyao Cadastre, situated in the barrio of Sala, municipality of Cabuyao, province of Laguna, containing an area of FORTY THREE THOUSAND SIX HUNDRED FOURTEEN (43,614) Square Meters, more or less, in favor of applicant AQUILINO L. CARINO, married to Francisca Alomia, of legal age, Filipino, with residence and postal address at Biñan, Laguna.

After this decision shall have become final, let an order for the issuance of decree of registration be issued.

SO ORDERED.6

From the aforesaid decision, petitioner (as oppositor) went to the Court of Appeals, which, on November 11, 1993, affirmed the decision appealed from.

Undaunted, petitioner found his way to this Court via the present Petition; theorizing that:

I

THE COURT OF APPEALS ERRED IN NOT FINDING THAT PRIVATE RESPONDENT HAS NOT SUBMITTED PROOF OF HIS FEE SIMPLE TITLE OR PROOF OF POSSESSION IN THE MANNER AND FOR THE LENGTH OF TIME REQUIRED BY THE LAW TO JUSTIFY CONFIRMATION OF AN IMPERFECT TITLE.

II

THE COURT OF APPEALS ERRED IN NOT DECLARING THAT PRIVATE RESPONDENT HAS NOT OVERTHROWN THE PRESUMPTION THAT THE LAND IS A PORTION OF THE PUBLIC DOMAIN BELONGING TO THE REPUBLIC OF THE PHILIPPINES.7

The Petition is impressed with merit.

The petition for land registration8 at bar is under the Land Registration Act.9 Pursuant to said Act, he who alleges in his petition or application, ownership in fee simple, must present muniments of title since the Spanish times, such as a titulo real or royal grant, a concession especial or special grant, a composicion con al estado or adjustment title, or a titulo de compra or title through purchase; and "informacion possessoria" or "possessory information title", which would become a "titulo gratuito" or a gratuitous title.10

In the case under consideration, the private respondents (petitioner below) has not produced a single muniment of title substantiate his claim of ownership.11 The Court has therefore no other recourse, but to dismiss private respondent's petition for the registration of subject land under Act 496.

Anyway, even if considered as petition for confirmation of imperfect title under the Public land Act (CA No. 141), as amended, private respondent's petition would meet the same fate. For insufficiency of evidence, its denial is inevitable. The evidence adduced by the private respondent is not enough to prove his possession of subject lot in concept of owner, in the manner and for the number of years required by law for the confirmation of imperfect title.

Sec. 48(b) of Commonwealth Act No. 141,12 as amended R.A. No. 1942 and R.A. No. 3872, the law prevailing at the time the Petition of private respondent was filed on May 15, 1975, provides:

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

x x x x x x x x x

(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive, and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, for at least thirty years immediately preceding the filing of the application for confirmation of title except when prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter. (Emphasis supplied)

Possession of public lands, however long, never confers title upon the possessor, unless the occupant can prove possession or occupation of the same under claim of ownership for the required period to constitute a grant from the State.13

Notwithstanding absence of opposition from the government, the petitioner in land registration cases is not relieved of the burden of proving the imperfect right or title sought to be confirmed. In Director of Lands vs. Agustin,14 this Court stressed that:

. . . The petitioner is not necessarily entitled to have the land registered under the Torrens system simply because no one appears to oppose his title and to oppose the registration of his land. He must show, even though there is no opposition, to the satisfaction of the court, that he is the absolute owner, in fee simple. Courts are not justified in registering property under the Torrens system, simply because there is no opposition offered. Courts may, even in the absence of any opposition, deny the registration of the land under the Torrens system, upon the ground that the facts presented did not show that petitioner is the owner, in fee simple, of the land which he is attempting to have registered.15

There is thus an imperative necessity of the most rigorous scrutiny before imperfect titles over public agricultural lands may be granted judicialrecognition.16

The underlying principle is that all lands that were not acquired from the government, either by purchase or by grant, belong to the state as part of the public domain. As enunciated in Republic vs. Lee:17

. . . Both under the 1935 and the present Constitutions, the conservation no less than the utilization of the natural resources is ordained. There would be a failure to abide by its command if the judiciary does not scrutinize with care applications to private ownership of real estate. To be granted, they must be grounded in well-nigh incontrovertible evidence. Where, as in this case, no such proof would be forthcoming, there is no justification for viewing such claim with favor. It is a basic assumption of our polity that lands of whatever classification belong to the state. Unless alienated in accordance with law, it retains its right over the same as dominus. . . .18

In order that a petition for registration of land may prosper and the petitioners may savor the benefit resulting from the issuance of certificate of title for the land petitioned for, the burden is upon him (petitioner) to show that he and/or his predecessor-in-interest has been in open, continuous, exclusive, and adverse possession and occupation of the land sought for registration, for at least (30) thirty years immediately preceding the filing of the petition for confirmation of title.19

In the case under consideration, private respondent can only trace his own possession of subject parcel of land to the year 1949, when the same was adjudicated to him by virtue of an extra-judicial settlement and partition. Assuming that such a partition was truly effected, the private respondent has possessed the property thus partitioned for only twenty-six (26) years as of 1975, when he filed his petition for the registration thereof. To bridge the gap, he proceeded to tack his possession to what he theorized upon as possession of the same land by his parents. However, other than his unilateral assertion, private respondent has not introduced sufficient evidence to substantiate his allegation that his late mother possessed the land in question even prior to 1911.1âwphi1.nêt

Basic is the rule that the petitioner in a land registration case must prove the facts and circumstances evidencing his alleged ownership of the land applied for. General statements, which are mere conclusions of law and not factual proof of possession are unavailing and cannot suffice.20

From the relevant documentary evidence, it can be gleaned that the earliest tax declaration covering Lot No. 6 was Tax Declaration No. 3214 issued in 1949 under the names of the private respondent and his brother, Severino Cariño. The same was followed by Tax Declaration No. 1921 issued in 1969 declaring an assessed value of Five Thousand Two Hundred Thirty-three (P5,233.00) Pesos and Tax Declaration No. 6359 issued in 1974 in the name of private respondent, declaring

an assessment of Twenty-One Thousand Seven Hundred Seventy (P21,770.00) Pesos.21

It bears stressing that the Exhibit "E" referred to in the decision below as the tax declaration for subject land under the names of the parents of herein private respondent does not appear to have any sustainable basis. Said Exhibit "E" shows that it is Tax Declaration 1921 for Lot No. 6 in the name of private respondent and not in the name of his parents.22

The rule that findings of fact by the trial court and the Court of Appeals are binding upon this Court is not without exceptions. Where, as in this case, pertinent records belie the findings by the lower courts that subject land was declared for taxation purposes in the name of private respondent's predecessor-in-interest, such findings have to be disregarded by this Court. In Republic vs. Court of Appeals,23 the Court ratiocinated thus:

This case represents an instance where the findings of the lower court overlooked certain facts of substance and value that if considered would affect the result of the case (People v. Royeras, 130 SCRA 259) and when it appears that the appellate court based its judgment on a misapprehension of facts (Carolina Industries, Inc. v. CMS Stock Brokerage, Inc., et al., 97 SCRA 734; Moran, Jr. v. Court of Appeals, 133 SCRA 88; Director of Lands v. Funtillar, et al., G.R. No. 68533, May 3, 1986). This case therefore is an exception to the general rule that the findings of facts of the Court of Appeals are final and conclusive and cannot be reviewed on appeal to this Court.'

and—

. . . in the interest of substantial justice this Court is not prevented from considering such a pivotal factual matter that had been overlooked by the Courts below. The Supreme Court is clothed with ample authority to review palpable errors not assigned as such if it finds that their consideration is necessary in arriving at a just decision.24

Verily, the Court of Appeals just adopted entirely the findings of the trial court. Had it examined the original records of the case, the said court could have verified that the land involved was never declared for taxation purposes by the parents of the respondent. Tax receipts and tax declarations are not incontrovertible evidence of ownership. They are mere indicia of claim of ownership.25 In Director of Lands vs. Santiago.26

. . . if it is true that the original owner and possessor, Generosa Santiago, had been in possession since 1925, why were the subject lands declared for taxation purposes for the first time only in 1968, and in the names of Garcia and Obdin? For although tax receipts and declarations of ownership for taxation purposes are not incontrovertible evidence of ownership, they constitute at least proof that the holder had a claim of title over the property.27

As stressed by the Solicitor General, the contention of private respondent that his mother had been in possession of subject land even prior to 1911 is self-serving, hearsay, and inadmissible in evidence. The phrase "adverse, continuous, open, public, and in concept of owner", by which characteristics private respondent describes his possession and that of his parents, are mere conclusions of law requiring evidentiary support and substantiation. The burden of proof is on the private respondent, as applicant, to prove by clear, positive and convincing evidence that the alleged possession of his parents was of the nature and duration required by law. His bare allegations without more, do not amount to preponderant evidence that would shift the burden of proof to the oppositor.28

In a case,29 this Court set aside the decisions of the trial court and the Court of Appeals for the registration of a parcel of land in the name of the applicant, pursuant to Section 48 (b) of the Public Land Law; holding as follows:

Based on the foregoing, it is incumbent upon private respondent to prove that the alleged twenty year or more possession of the spouses Urbano Diaz and Bernarda Vinluan which supposedly formed part of the thirty (30) year period prior to the filing of the application, was open, continuous, exclusive, notorious and in concept of owners. This burden, private respondent failed to discharge to the satisfaction of the Court. The bare assertion that the spouses Urbano Diaz and Bernarda Vinluan had been in possession of the property for more than twenty (20) years found in private respondent's declaration is hardly the "well-nigh incontrovertible" evidence required in cases of this nature. Private

respondent should have presented specific facts that would have shown the nature of such possession. . . .30

In Director of Lands vs. Datu,31 the application for confirmation of imperfect title was likewise denied on the basis of the following disquisition, to wit:

We hold that applicants' nebulous evidence does not support their claim of open, continuous, exclusive and notorious occupation of Lot No. 2027-B en concepto de dueño. Although they claimed that they have possessed the land since 1950, they declared it for tax purposes only in 1972. It is not clear whether at the time they filed their application in 1973, the lot was still cogon land or already cultivated land.

They did not present as witness their predecessor, Peñaflor, to testify on his alleged possession of the land. They alleged in their application that they had tenants on the land. Not a single tenant was presented as witness to prove that the applicants had possessed the land as owners.

x x x x x x x x x

On the basis of applicants' insubstantial evidence, it cannot justifiably be concluded that they have an imperfect title that should be confirmed or that they had performed all the conditions essential to a Government grant of a portion of the public domain.32

Neither can private respondent seek refuge under P.D. No. 1073,33 amending Section 48(b) of Commonwealth Act No. 141 under which law a certificate of title may issue to any occupant of a public land, who is a Filipino citizen, upon proof of open, continuous exclusive, and notorious possession and occupation since June 12, 1945, or earlier. Failing to prove that his predecessors-in-interest occupied subject land under the conditions laid down by law, the private respondent could only establish his possession since 1949, four years later than June 12, 1945, as set by law.

The Court cannot apply here the juris et de jure presumption that the lot being claimed by the private respondent ceased to be a public land and has become private property.34 To reiterate, under the Regalian doctrine all lands belong to the State.35 Unless alienated in accordance with law, it retains its basic rights over the same as dominus.36

Private respondent having failed to come forward with muniments of title to reinforce his petition for registration under the Land Registration Act (Act 496), and to present convincing and positive proof of his open, continuous, exclusive and notorious occupation of Lot No. 6 en concepto de dueño for at least 30 years immediately preceding the filing of his petition,37 the Court is of the opinion, and so finds, that subject Lot No. 6 surveyed under Psu-108952, forms part of the public domain not registrable in the name of private respondent.

WHEREFORE, the Petition is GRANTED; the Decision of the Court of Appeals, dated November 11, 1993, in CA-G.R. No. 29218 affirming the Decision, dated February 5, 1990, of Branch XXIV, Regional Trial Court of Laguna in LRC No. 8-467, is SET ASIDE; and Lot No. 6, covered by and more particularly described in Psu-108952, is hereby declared a public land, under the administrative supervision and power of disposition of the Bureau of Lands Management. No pronouncement as to costs.1âwphi1.nêt

SO ORDERED.

Melo, Vitug, Panganiban and Gonzaga-Reyes, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 159131 July 27, 2009

HEIRS OF TORIBIO WAGA, represented by MERBA A. WAGA, Petitioners, vs.ISABELO SACABIN, Respondent.

D E C I S I O N

CARPIO, J.:

The Case

This is a petition for review1 of the Decision2 dated 9 July 2003 of the Court of Appeals in CA-GR CV No. 71137. The Court of Appeals affirmed the Decision3 dated 24 April 2001 of the Regional Trial Court of Misamis Oriental, Branch 44 (trial court).

The Facts

Petitioners’ predecessor-in-interest, Toribio Waga, filed a Free Patent Application for Lot No. 450 containing an area of 4,960 sq.m. On 1 October 1965, Lot No. 450 was surveyed by a Cadastral Land Surveyor. On 25 September 1968, Free Patent No. 411315 and Original Certificate of Title No. P-8599 (OCT No. P-8599),4covering Lot No. 450, were issued in the name of the Heirs of Toribio Waga (petitioners). OCT No. P-8599 was registered in the Office of the Register of Deeds for the Province of Misamis Oriental on 29 August 1974.

On 26 December 1991, Isabelo Sacabin (respondent) filed a protest before the Department of Environment and Natural Resources (DENR), Region X, against the issuance of Free Patent No. 411315 and OCT No. P-8599 to petitioners and their subsequent registration. Respondent alleged that around 500 sq.m. portion of his land, identified as Lot No. 452 which is adjacent to Lot No. 450, had been erroneously included in OCT No. P-8599. The DENR ordered an investigation on the alleged encroachment on respondent’s property. On 10 October 1996, the Regional Executive Director of the DENR, Region X, issued a decision5 recommending that an action be taken by the Director of Lands for the annulment of Free Patent No. 411315 and OCT No. P-8599 issued to petitioners, segregating from Lot No. 450 the 790 sq.m. portion belonging to respondent.

When the Director of Lands failed to act on the recommendation, respondent filed on 9 October 1998 a complaint against petitioners for Amendment of Original Certificate of Title, Ejectment, and Damages. The Special Investigator who conducted the ocular inspection of the lots of the parties testified that he found seven fifty-year old coconut trees planted in a straight line and forming a common natural boundary between the lots of the parties. In his report, the Special Investigator found that respondent’s lot included the disputed 790 sq.m. portion.

The trial court found that respondent and his predecessors-in-interest have been in possession of Lot No. 452, including the disputed 790 sq.m. portion, in an open, continuous, peaceful, and adverse manner since 1940. Since respondent and his predecessors-in-interest have been in possession of Lot No. 452, including the disputed 790 sq.m. portion, for more than 30 years in peaceful, open, continuous and adverse manner and in the concept of owner, then the subject land has become private property of respondent by operation of law.

On 24 April 2001, the trial court rendered a decision, the dispositive portion of which reads:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered in favor of plaintiff (Isabelo Sacabin) and against the defendants (Heirs of Toribio

Waga, represented by Nellie W. Villamor and Elves Galarosa). Defendants are ordered:

1) To segregate from OCT No. P-8599 reconvey that portion belonging to plaintiff with an area of 790 sq. meters, more or less;

2) That defendant Elves Galarosa and all defendants occupying inside or in possession of that portion belonging to plaintiff are ordered to vacate therefrom and turn-over the same to plaintiff;

3) To pay, jointly and severally, the sum of

a) P50,000.00 - for damages

b) P30,000.00 - for attorney’s fees

c) P10,000.00 - for litigation

4) To pay the cost.

SO ORDERED.6

Petitioners appealed the trial court’s decision to the Court of Appeals, which affirmed the decision. Hence, this petition.

The Court of Appeals’ Ruling

The Court of Appeals held that the action filed by respondent was not intended to defeat the indefeasibility of the title of petitioners but merely to correct the area covered by their title since it encroached on respondent’s property. Settled is the rule that a person, whose certificate of title included by mistake or oversight the land owned by another, does not become the owner of such land by virtue of the certificate alone. The Torrens System is intended to guarantee the integrity and conclusiveness of the certificate of registration but it is not intended to perpetrate fraud against the real owner of the registered land. The certificate of title cannot be used to protect a usurper from the true owner.

As regards the rule on the indefeasibility of the Torrens title after one year from the decree of registration, the Court of Appeals held that the one-year prescriptive

period is not applicable in this case since there is no collateral or direct attack made against petitioners’ title but merely a petition for amendment or correction of the true area covered by petitioners’ title.

The Issue

The primary issue in this case is whether the complaint for amendment of OCT No. P-8599, which seeks the reconveyance of the disputed property, has already prescribed.

The Ruling of the Court

We find the petition without merit.

Respondent’s Possession of Land Since 1940 is Uncontroverted

The DENR and the trial court’s finding that respondent and his predecessors-in-interest have been in possession of Lot No. 452, including the disputed 790 sq.m.

portion, in an open, continuous, peaceful, and adverse manner since 1940 is uncontroverted. To defeat the claim of respondent, petitioners relied primarily on

their certificate of title which includes the disputed 790 sq.m. portion.

The Special Investigator from the DENR who conducted the second investigation in 1996 testified that the disputed 790 sq.m. portion is part of respondent’s property. The Geodetic Engineer who assisted the investigation and conducted a survey of the adjoining properties of the parties also found that the disputed 790 sq.m. portion rightfully belongs to respondent. Respondent offered as evidence the sketch plan7 of the adjoining properties prepared by the Geodetic Engineer, which clearly shows that the disputed 790 sq.m. portion is within the property of respondent. Taking into consideration the seven fifty-year old coconut trees planted in a straight line which form a common natural boundary between the lots of the parties, the sketch plan clearly shows that the disputed 790 sq.m. portion is within the side of respondent’s property, and is part of Lot No. 452. Another DENR employee who assisted in the ocular inspection of the properties testified that the petitioners and respondent admitted the existence of the common boundary between their lots.8

Prescriptive Period Not Applicable

Petitioners contend that respondent’s action is barred by prescription. Petitioners maintain that their OCT No. P-8599, which was issued in 1968 and registered in the Register of Deeds in 1974, is already indefeasible. They allege that when respondent filed his protest on 26 December 1991, or 17 years after the registration of OCT No. P-8599, it was already too late to question the validity of petitioners’ certificate of title.

Indeed, respondent filed his claim to a portion of Lot No. 450 through a protest before the DENR only on 26 December 1991 because it was only in that year that respondent learned that a portion of his property was inadvertently included in petitioners’ certificate of title. Petitioners themselves came to know about the exact boundaries of Lot No. 450 and the inclusion of the disputed portion in their certificate of title only in 1991 when they subdivided said land for partition among the heirs.9 Thus, when petitioners started to take possession of the disputed 790 sq.m. portion in 1991, respondent filed a protest before the DENR on 26 December 1991 to claim the disputed portion for which respondent and his predecessors-in-interest have been in possession since 1940. On 9 October 1998, respondent filed a complaint against petitioners for Amendment of Original Certificate of Title, Ejectment, and Damages. The action primarily seeks the reconveyance of the disputed 790 sq.m. portion of land through the amendment of OCT No. P-8599.

An action for reconveyance of property respects the decree of registration as incontrovertible and merely seeks the transfer of the property wrongfully or erroneously registered in another’s name to its rightful owner or to one who claims to have a better right.10

An action for reconveyance of property based on an implied or constructive trust is the proper remedy of an aggrieved party whose property had been erroneously registered in another’s name.11 The prescriptive period for the reconveyance of registered property is ten years, reckoned from the date of the issuance of the certificate of title. However, the ten-year prescriptive period for an action for reconveyance is not applicable where the complainant is in possession of the land to be reconveyed and the registered owner was never in possession of the disputed property.12 In such a case, the action for reconveyance filed by the complainant who is in possession of the disputed property would be in the nature of an action to quiet title which is imprescriptible.13

This case is similar to the case of Caragay-Layno v. CA,14 which involves a counterclaim for reconveyance of property which was filed by petitioner Juliana Caragay-Layno on the ground that a portion of her property had been fraudulently or mistakenly included in the certificate of title issued for the adjoining lot of the respondent. The Court held:

Prescription cannot be invoked against JULIANA for the reason that as lawful possessor and owner of the Disputed Portion, her cause of action for reconveyance which, in effect, seeks to quiet title to the property, falls within settled jurisprudence that an action to quiet title to property in one’s possession is imprescriptible. Her undisturbed possession over a period of fifty-two (52) years gave her a continuing right to seek the aid of a Court of equity to determine the nature of the adverse claim of a third party and the effect on her own title.

Besides, under the circumstances, JULIANA’s right to quiet title, to seek reconveyance, and to annul OCT No. 63 accrued only in 1966 when she was made aware of a claim adverse to her own. It was only then that the statutory period of prescription may be said to have commenced to run against her x x x.15

In this case, respondent who has been in possession of the disputed property since 1940, by himself and through his predecessors-in-interest, is not barred from bringing the action for reconveyance, which in effect seeks to quiet title to the property, against petitioners whose claim to the property is based merely on their certificate of title which mistakenly included respondent’s property. Respondent has a better right to the disputed property since he and his predecessors-in-interest had long been in possession of the property in the concept of owner. Petitioners only took possession of the disputed property sometime in 1991 when they realized upon partition of Lot No. 450 that the certificate of title issued to them included the disputed property. Reconveyance is just and proper to end the intolerable anomaly that the patentees should have a Torrens title for the land which has never been in their possession and which have been possessed by another person in the concept of owner.16

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 9 July 2003 of the Court of Appeals in CA-GR CV No. 71137.

SO ORDERED.

ANTONIO T. CARPIOAssociate Justice

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 115794 June 10, 1999

ANASTACIO MANANGAN, petitioner, vs.ANGEL DELOS REYES, GERMAN DELOS REYES, AURELLANA DELOS REYES, JOSEFINA DELOS REYES and INOCENCIO DELOS REYES, respondents.

PARDO, J.:

Can possession by a vendee of an unregistered real property defeat the torrens title thereon later secured by the vendor inspite of the sale, where the title was obtained in land registration proceedings filed thirty eight (38) years ago?

In this appeal via certiorari, petitioner seeks to reverse the decision 1 of the Court of Appeals holding that an action for reconveyance or recovery of ownership of the land fraudulently titled to respondent has prescribed and is barred by laches.

We affirm.

The facts are as follows:

Respondents were co-owners of three (3) parcels of land with an area of 13,083 square meters, located in Mabaliguen, San Narciso, Zambales, covered by OCT No. 7372 of the Register of Deeds of Zambales. 2

Petitioner, on the other hand, was a tenant of the respondents and had been sharing the harvest of the land with respondents’ mother, Macaria Villanueva, during her lifetime. 3

On December 11, 1932, Macaria Villanueva sold the parcels of land in question to Victoriano Manangan, petitioner’s father, in consideration of one thousand pesos (P 1,000.00) as evidenced by a duly notarized deed of sale signed by Macaria and the respondents except Inocencio de los Reyes. 4

In 1934, after cadastral proceedings were initiated over the land, the registration court decreed registration under the torrens system of the parcels of land involved in the names of Macaria Villanueva, Cirilo de los Reyes, and Francisco de los Reyes.

On June 21, 1937, the Register of Deeds of Zambales, pursuant to the decree of registration, issued Original Certificate of Title No. 7372 in the names of Macaria Villanueva, Cirilo de los Reyes, and Francisco de los Reyes, now all deceased. Macaria is survived by three children, namely respondents Angel de los Reyes, Germana de los Reyes and Aureliana de los Reyes. Francisco is survived by two children, respondents Josefina and Incocencio de los Reyes. Cirilo died without any issue. 5

On July 6, 1974, respondents filed with the Court of First Instance of Zambales, a complaint for recovery of possession of the aforesaid parcels of land against petitioner claiming the right of possession of said land. Petitioner resisted such claim alleging fraud in causing the land to be registered in respondents’ names despite its sale to petitioner’s father. On March 14, 1975, petitioner filed with the lower court an amended answer for reconveyance of the lots in question.

On October 19, 1987, the Regional Trial Court, Branch 71, Iba, Zambales, rendered a decision in favor of respondents declaring that they had a better right over the subject parcels of land.

The dispositive portion of the decision reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs — adjudging them to have a better right to own and possess the subject parcels of land — and the defendant (his agents, privies, successors-in-interest, representatives, acting under him are ordered to:

1) Vacate the subject premises and deliver or restore peacefully the possession of the properties described in the complaint to the plaintiffs;

2) Pay to the plaintiffs the aggregate amount representing the value of palay (twenty cavans annually) from 1956 up to the time the defendant finally vacates or surrenders the possession of subject parcels at the rate of P25.00 per cavan;

3) Pay to the plaintiffs the sum of P 2,000.00 for and attorney’s fees.

Costs against the defendant.1âwphi1.nêt

SO ORDERED.

Manila for Iba, Zambales, October 19, 1987.

RAMON MABUTAS, JR.

Judge 6

In due time, petitioners appealed to the Court of Appeals. 7

After due proceedings, on April 19, 1993, the Court of Appeals promulgated its decision affirming the trial court’s conclusion and ruling that petitioner’s action had prescribed and was barred by laches. 8

Thus, the Court of Appeals said:

We find the appeal without merit on the sole ground that appellants are guilty of laches and they have lost their right to ask for reconveyance of the property in their favor. Appellants’ Exhibit "1" and "1-D", a notarized document, shows that Macaria Villanueva, the now deceased mother of appellees, had actually sold the lots in question to the father of herein appellants in 1922. However, Exhibit "A" of appellees shows that the lots in question were registered in the names of said Macaria Villanueva and her children, herein appellees, in 1937 with the register of Deeds of Zambales under O.C.T. No. 7372.

Evidently, the serious mistake, if not fraud, was committed when the original certificate of title was issued in the name of Macaria Villanueva and appellees. . . . The title to said lots in question in the names of Macaria Villanueva and appellees was entered in the Registry Book for the Province of Zambales by the Register of Deeds of Zambales on June 21, 1937 (Exh. "A") or 38 years before appellants sought reconveyance. Appellants are guilty of laches. It is now well-settled that an action for reconveyance based on an implied or constructive trust must perforce prescribe in ten years from the issuance of the Torrens Title over the property (Tala vs. Court of Appeals, et. al., 208 SCRA 266).

Such being the case, appellant’s appeal has no leg to stand on and We find it no longer necessary to discuss each of the assigned errors.

WHEREFORE, for lack of reversible error committed by the trial court, We hereby AFFIRM the herein appealed decision.

No costs. 9

Hence, this petition for review on certiorari. 10

Petitioner’s right of action to recover ownership of the land in question has prescribed and is barred by laches.

In Alvarez vs. Intermediate Appellate Court, 11 we ruled that the remedy of the land owner whose property has been wrongfully or erroneously registered in another’s name is to bring an action in the ordinary courts of justice for reconveyance. The Court of Appeals correctly ruled that an action for reconveyance based on an implied or constructive trust prescribes in ten (10) years from the issuance of the torrens title over the property, citing Tale vs. Court of Appeals. 12 We reiterated this ruling in the more recent cases of Catalina Buan Vda. De Esconde vs. Court of Appeals, 13 Salvatierra vs. Court of Appeals 14 and Ochagabia vs. Court of Appeals. 15

Petitioner slept on his right for thirty eight (38) years counted from the time the Original Certificate of Title was issued on June 21, 1937, until he filed his amended answer to respondents’ complaint on March 14, 1975, asking for reconveyance of the lots in question. The petitioner’s right to bring such action was barred by laches as he took no step towards that direction reasonably after the title to the property was issued under the torrens system.16 Finally, petitioner cannot invoke Article 1141 of the Civil Code as this law provides only a period of thirty (30) years to bring real actions over immovable property.

WHEREFORE, the Court DENIES the petition for review on certiorari and AFFIRMS the appealed decision of the Court of Appeals in CA-G.R. CV No. 20459. No costs.

SO ORDERED.

Davide, Jr., C.J., Melo, Kapunan and Ynares-Santiago, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 161925 November 25, 2009

SPOUSES EXEQUIEL LOPEZ and EUSEBIA LOPEZ, Petitioners, vs.SPOUSES EDUARDO LOPEZ and MARCELINA R. LOPEZ, Respondents.

D E C I S I O N

NACHURA, J.:

This is a petition for review on certiorari of the Court of Appeals (CA) Decision1 dated January 26, 2004, which ordered the cancellation of Transfer Certificate of Title (TCT) No. T-5066 in the name of petitioners.

Respondents, spouses Eduardo and Marcelina Lopez, are the owners and occupants of an 80-square-meter residential lot situated in San Pascual, Hagonoy, Bulacan. They acquired the property by donation inter vivos from Maria Alvarado and Agatona Caparas, in whose names the lot was previously declared for taxation purposes. Respondents have occupied the lot since 1977.2

In November 1992, respondents discovered that Victor Villadares was granted a free patent over an 885-sq-m land, which included respondents’ lot, and was subsequently issued Original Certificate of Title (OCT) No. RP-253 (P-8511) on March 8, 1978. Thereafter, Villadares subdivided the entire parcel of land into 3 lots, namely: Lot 9954-A, Lot 9954-B and Lot 9954-C. As shown in the Deed of Absolute Sale of Portions of a Parcel of Land, Villadares sold Lot 9954-B with an area of 273 sq m to petitioners, spouses Eusebia and Exequiel Lopez, and Lot 9954-C with an area of 337 square meters to Filomena Caparas. Consequently, OCT No. RP-253 (P-8511) was cancelled and TCT Nos. T-5065, T-5066 and T-5067 were issued to Villadares, to petitioners, and to Caparas, respectively.

Respondents filed an action for reconveyance, declaration of nullity of a deed of absolute sale, cancellation of titles, and damages against Villadares and petitioners. The action was filed only against the two parties because respondents’ property is situated between their properties, Lots 9954-A and 9954-B.

In their Answer, petitioners averred that respondents had no personality to institute the action, that the free patent in favor of Villadares was issued pursuant to law, that they were innocent purchasers for value, and that their certificate of title was already incontrovertible.3

During trial, Pedro Manansala, a witness for respondents, testified that petitioners’ lot consisted of 168 sq m only, which they bought from him for P20,000.00 sometime after Martial Law.4

Petitioner Eusebia Lopez refuted this by stating that she bought a 273-sq-m lot from Pedro Manansala.5 She admitted that she filed a protest against Villadares’ application for registration but claimed that Villadares later agreed to sell the property to her for P30,000.00.6 Villadares corroborated her testimony, saying that when petitioners showed him proof that they owned a portion of the lot registered in his name, he agreed to transfer the title of the said portion to their names.7

The Regional Trial Court ruled in favor of respondents. According to the trial court, the declaration of the subject property for taxation purposes in the name of

respondents, coupled with their actual possession thereof, strongly indicated that they owned the same. It held that petitioners were not buyers in good faith because it appeared that the execution of the deed of sale was only an afterthought. The dispositive portion of the trial court’s decision reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and against herein defendants:

1. that the deed of absolute sale, dated May 8, 1990 is hereby declared null and void;

2. that defendants reconvey to the plaintiffs the subject 80-square meter lot;

3. the Register of Deeds of Tabang, Guiguinto, Bulacan is hereby ordered to cancel TCT Nos. T-5065 in the name of defendant Victor Villadares and T-5066 in the name of defendants/Spouses Exequiel and Eusebia Lopez;

4. that defendants jointly and severally pay the plaintiffs the sum of: P10,000.00 for moral damages;P10,000.00 for exemplary damages and P10,000.00 for attorney’s fees and cost of suit.

SO ORDERED.8

Subsequently, the case was elevated to the CA on appeal, through petitioners’ and Villadares’ respective notices of appeal.

Based on the doctrine that land registration proceedings cannot shield fraud or permit the enrichment of a person at the expense of another, the CA affirmed the trial court’s decision. In so ruling, the appellate court considered the following: (a) respondents’ ownership of the 80-sq-m lot was admitted by petitioners during pre-trial; (b) petitioners were not innocent purchasers for value; (c) respondents were in possession of the subject property and paid the real property taxes thereon; and (d) the conveyance of the 273-sq-m lot from Villadares to petitioners was simulated.9

Only Villadares filed a motion for reconsideration with the CA; petitioners elevated the case immediately to this Court. In a Resolution10 dated April 28, 2004, the CA resolved to hold in abeyance the resolution of Villadares’ motion and to consider it abandoned if the present petition would be given due course by this Court.

In this petition, petitioners ascribe the following errors to the CA:

I.

THE HONORABLE COURT OF APPEALS FAILED TO RECOGNIZE THE ACTUAL POSSESSION OF PETITIONERS AND THEIR PREDECESSORS-IN-INTEREST ON (sic) THE PROPERTY NOW COVERED BY TCT NO. T-5066 OF THE REGISTRY OF DEEDS FOR THE PROVINCE OF BULACAN FOR MORE THAN FIFTY (50) YEARS.

II.

THE HONORABLE COURT OF APPEALS FAILED TO RECOGNIZE THAT PETITIONERS EXEQUIEL LOPEZ AND EUSEBIA LOPEZ HAVE BEEN PAYING REAL ESTATE TAXES ON THE SUBJECT PROPERTY AFTER THEY HAVE BOUGHT IT FROM PEDRO MANANSALA AND MIGUELA AYUSON MANANSALA ON AUGUST 2, 1974.

III.

THE HONORABLE COURT OF APPEALS ERRED IN CONSIDERING THE POSSESSION OF RESPONDENTS ON (sic) THE SUBJECT PROPERTY FOR LESS THAN THIRTY (30) YEARS.

IV.

THE HONORABLE COURT OF APPEALS FAILED TO RECOGNIZE THAT THE DEED OF ABSOLUTE SALE OF PORTION OF PARCEL OF LAND EXECUTED BY DEFENDANT VICTOR VILLADARES IN FAVOR OF PETITIONERS, EXEQUIEL LOPEZ AND EUSEBIA LOPEZ, WAS MERELY TO SETTLE THEIR CONFLICT OF OWNERSHIP ON THE SUBJECT PROPERTY AND TO EXPEDITE THE TRANSFER THEREOF TO THE PETITIONERS.

V.

THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE RULING OF THE LOWER COURT FOR THE CANCELLATION OF TCT NO. T-5065 WITH AN AREA OF 275 SQUARE METERS IN THE NAME OF DEFENDANT VICTOR VILLADARES AND THE CANCELLATION OF TCT NO. T-5066 WITH AN AREA OF 273 SQUARE METERS IN THE NAME OF PETITIONERS EXEQUIEL LOPE[Z] AND EUSEBIA LOPEZ, WHEN THE CLAIM OF RESPONDENTS IS ONLY EIGHTY (80) SQUARE METERS.11

The petition is partly meritorious.

An action for reconveyance is a legal and equitable remedy granted to the rightful owner of a land which has been wrongfully or erroneously registered in the name of another for the purpose of compelling the latter to transfer or reconvey the land to him.12 The action does not seek to reopen the registration proceedings and to set aside the decree of registration but only purports to show that the person who secured the registration of the property in controversy is not the real owner thereof.13

Initially, we affirm the CA’s findings of fact that respondents are the rightful owners of the subject property, an 80-sq-m portion of land, wrongfully included in either or in both of the certificates of title of petitioners or Villadares, and that petitioners were not innocent purchasers for value. As neighbors of respondents, petitioners certainly would have known that respondents actually occupied the subject property. Thus, Villadares, not being the owner of the subject property, could not have transferred ownership of the subject 80-sq-m portion of land to petitioners.

As a logical consequence, petitioners did not become the owners of the subject property even after a TCT had been issued in their names. After all, registration does not vest title. Certificates of title merely confirm or record title already existing and vested. They cannot be used to protect a usurper from the true owner, nor can they be used as a shield for the commission of fraud, or to permit one to enrich oneself at the expense of others.14 Hence, reconveyance of the subject property is warranted.

It is well to remember that in an action for reconveyance, the decree of registration is highly regarded as incontrovertible. What is sought is the transfer of the property or its title, which has been wrongfully or erroneously registered in another person’s name, to its rightful owner or to one who has a better right.15 The present action for reconveyance only entails the segregation of the portion wrongfully included in the certificate of title. The decree of registration is to be respected, but the certificate of title will be cancelled for the purpose of amending it in order to exclude the portion wrongfully included therein. A new certificate covering the portion reconveyed shall then be subsequently issued in the name of the real owner.

However, the CA went beyond this and declared the entire deed of sale, covering 273 sq m, void for being simulated. As such, the CA decision would result not only in the amendment of petitioners’ certificate of title, but in the absolute revocation of petitioners’ title itself. The property would then revert to its previous owner, subject to the right of respondents over the portion of the lot which they claim as their own.

Understandably, petitioners anxiously insist that their TCT should not be cancelled even if the deed of sale is declared void. They maintain that they own the entire Lot 9954-B, not because they purchased the same from Villadares, but because they previously acquired the same from Pedro Manansala, in whose name the lot was previously declared for taxation purposes. Petitioners allegedly acquired the property from Pedro Manansala long before they bought the property from Villadares, and they claim that they and their predecessors-in-interest have been in possession thereof for more than 50 years. Hence, even if the deed of sale executed by Villadares in their favor is nullified, they would remain owners of the land and their title thereto should not be cancelled.16

However, petitioners are barred from raising this issue as it constitutes a collateral attack on the decree of registration. The record shows that petitioners had participated in the land registration proceeding by filing their opposition to Villadares’ application for registration. Petitioners’ alleged possession of the property prior to Villadares’ filing of the application for registration was, in fact, the meat of their opposition in the land registration proceeding. And in a proceeding for land registration, whether with or without opposition, the final judgment of the court confirming the title of the applicant or oppositor, as the case may be, and ordering its registration in his name constitutes res judicata against the whole world.17

Thus, the Court is compelled to exercise its authority to review the validity of the Deed of Absolute Sale of Portions of a Parcel of Land, though not specifically assigned as error in this petition, because its resolution is necessary to arrive at a just decision and complete disposition of the case.18

In finding that the contract of sale was simulated, the CA held that petitioner’s opposition to Villadares’ application for registration, together with Pedro Manansala’s testimony that petitioners actually bought the property from him, evinces the falsity of the claim that petitioners purchased the property from Villadares.

We are not convinced. The primary consideration in determining the true nature of a contract is the intention of the parties. Such intention is determined not only from the express terms of their agreement, but also from the contemporaneous and subsequent acts of the parties.191avvphi1

Simulation takes place when the parties do not really want the contract they have executed to produce the legal effects expressed by its wordings.20 This Court’s pronouncement in Valerio v. Refresca21 is instructive —

Article 1345 of the Civil Code provides that the simulation of a contract may either be absolute or relative. In absolute simulation, there is a colorable contract but it has no substance as the parties have no intention to be bound by it. The main characteristic of an absolute simulation is that the apparent contract is not really desired or intended to produce legal effect or in any way alter the juridical situation of the parties. As a result, an absolutely simulated or fictitious contract is void, and the parties may recover from each other what they may have given under the contract. However, if the parties state a false cause in the contract to conceal their real agreement, the contract is relatively simulated and the parties are still bound by their real agreement. Hence, where the essential requisites of a contract are present and the simulation refers only to the content or terms of the contract, the agreement is absolutely binding and enforceable between the parties and their successors in interest.22l a w p h i l

Based on the foregoing, the subject deed of sale can hardly be considered simulated. There is no showing that the parties did not intend to be bound by the contract and to comply with its terms. In fact, Villadares surrendered to petitioners any right he had over the property. He caused the titling of the property and the transfer of the tax declaration in petitioners’ names, and thereafter, delivered the certificate of title and the tax declaration to petitioners and accepted the purchase price from them. To recall, Villadares admitted that he was swayed by petitioners’ claim that they had a right over the property and thus, he agreed to sell it to them. Such motivation for entering into the contract would not negate the efficacy of the contract. In the same way, petitioners’ opposition in the land registration case does not necessarily mean that petitioners did not really intend to purchase the property. Petitioners could have accepted or acquiesced to Villadares’ title and entered into the agreement to finally settle their claim over the property. The following testimony of petitioner Eusebia Lopez is telling:

Q Then after filing the protest, what did you do?

A I talked with Victor Villadares and we agreed that he will sell the land in a much lower price, sir.

Q Did he comply with his promise?

A Yes, sir.

Q So how much was it sold [to] you[;] as you said it will be sold to you at a lower price. How much was the selling price?

A P30,000.00, sir.

Q Did you pay the P30,000.00 to him?

A Yes, sir.

Q When did you pay it to defendant Victor Villadares?

A When the title was given to me by him as well as the tax declaration and the Bilihang Patuluyan, sir.23

We, therefore, uphold the validity of the deed of sale subject to the reconveyance of respondents’ 80-sq-m portion of the land.

WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The Court of Appeals Decision dated January 26, 2004 is AFFIRMED WITH MODIFICATIONS. The Deed of Absolute Sale of Portions of a Parcel of Land dated May 8, 1990 is declared VALID but subject to our disposition hereunder. Petitioners and Victor Villadares are directed to cause a SURVEY of Lots 9954-A and 9954-B in order to determine the exact location of the 80-sq m portion pertaining to respondents. Thereafter, the Register of Deeds of Tabang, Guiguinto, Bulacan is ordered to ISSUE the corresponding transfer certificates of title in the names of petitioners, respondents and Victor Villadares, in accordance with said survey.

SO ORDERED.

ANTONIO EDUARDO B. NACHURAAssociate Justice

ELAND PHILIPPINES, INC.,

Petitioner,

-versus-

AZUCENA GARCIA, ELINO FAJARDO, and HEIR OF TIBURCIO MALABANANnamed TERESA MALABANAN,

Respondents.

G.R. No. 173289

Present:

 

 

CARPIO,* J.,

CORONA, J., Chairperson,

NACHURA,

PERALTA, and

MENDOZA, JJ.

 

 

Promulgated:

February 17, 2010

x-----------------------------------------------------------------------------------------x

D E C I S I O N

PERALTA, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of

Court, seeking to reverse and set aside the decision[1] 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, Regional Trial Court (RTC) of Tagaytay City.

The facts of the case, as shown in the records, are the following:

Respondents Azucena Garcia, Elino Fajardo, and Teresa Malabanan, the

heir of Tiburcio Malabanan, filed a Complaint[2]dated March 2, 1998 for Quieting of

Title with Writ of Preliminary Injunction with the RTC, Branch XVIII, Tagaytay City

against petitioner Eland Philippines, Inc. Respondents claimed that they are the

owners, in fee simple title, of a parcel of land identified as Lot 9250 Cad-355,

Tagaytay Cadastre, Plan Ap-04-008367, situated in Barangay Iruhin, Tagaytay City,

containing an area of Two Hundred Forty-Four Thousand One Hundred Twelve

(244,112) square meters, by occupation and possession under the provisions of

Sec. 48 (b)[3] of the Public Land Law or Commonwealth Act No. 141, as amended.

For having been in continuous, public, and adverse possession as owners

of the said lot for at least thirty years, respondents stated that they were not aware

of any person or entity who had a legal or equitable interest or claim on the same

lot until the time they were requesting that the lot be declared for tax

purposes. They found out that the lot was the subject of a land registration

proceeding that had already been decided by the same court [4] where their

complaint was filed. They also found out that Decree No. N-217313, LRC 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

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.

Summons, together with a copy of the complaint, were served on the

petitioner on April 7, 1998. On April 29, 1998, petitioner filed an Entry of

Appearance with Motion for Extension of Time,[5] which the trial court granted[6] 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 Answer[7] dated April 29, 1998, which

the trial court likewise granted.[8]

Thereafter, petitioner filed a Motion to Dismiss[9] dated May 9, 1998,

stating that the pleading asserting the claim of respondents stated no cause of

action, and that the latter were not entitled to the issuance of a writ of preliminary

injunction, setting the same for hearing on May 21, 1998. On the date of the

hearing, the trial court issued an Order,[10] which granted the respondents ten (10)

days from that day to file a comment, and set the date of the hearing on July 23,

1998. Respondents filed a Motion to Admit Comment/Opposition to Defendant

Eland,[11] together with the corresponding Comment/Opposition[12] dated June 8,

1998.

On the scheduled hearing of September 23, 1998, the trial court issued

an Order,[13] considering the Motion to Dismiss submitted for resolution due to the

non-appearance of the parties and their respective counsels. The said motion was

eventually denied by the trial court in an Order[14] dated September 25, 1998, ruling

that the allegations in the complaint established a cause of action and enjoined

petitioner Eland to file its answer to the complaint within ten (10) days from receipt

of the same. Petitioner then filed two Motions for Extension to File an Answer.[15]

Petitioner, on November 9, 1998, filed a Motion for Reconsideration [16] of

the trial court's Order dated September 25, 1998, denying the former's Motion to

Dismiss. Again, petitioner filed a Motion for Final Extension of Time to File

Answer[17] dated November 6, 1998. Respondents filed their Comment/Opposition

to Motion for Reconsideration dated November 24, 1998. Subsequently, the trial

court denied petitioner's motion for reconsideration in an Order [18] dated January

11, 1999.

Meanwhile, respondents filed a Motion to Declare Defendant Eland in

Default[19] dated November 17, 1998. On December 4, 1998 Petitioner Eland filed

its Comment (on Plaintiff's Motion to Declare Defendant Eland in Default)[20] dated

December 2, 1998, while respondents filed a Reply to Comment (on Plaintiff's

Motion to Declare Defendant Eland in Default)[21] dated December 29,

1998. Thereafter, the trial court issued an Order[22] 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)[23]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[24]dated

March 18, 1999, denied the former and granted the latter. In the same Order, the

trial court admitted petitioner's Answer Ad Cautelam.

Earlier, petitioner filed its Answer Ad   Cautelam (With Compulsory

Counterclaim)[25] dated November 12, 1998. Respondents countered by filing a

Motion to Expunge Eland's Answer from the Records[26] dated December 2,

1998. Petitioner filed its Opposition (to Plaintiff's Motion to Expunge Eland's

Answer from the Records)[27] dated December 21, 1998, as well as a Comment (on

Plaintiff's Motion to Expunge Eland's Answer from the Records)[28] dated January

26, 1999.

Consequently, respondents filed a Motion to Set Presentation of

Evidence Ex   Parte[29] dated January 18, 1999, which was granted in an

Order[30] dated January 22, 1999.

On January 28, 1999, respondents presented their evidence before the

Clerk of Court of the trial court which ended on February 3, 1999; and, on February

10, 1999, respondents filed their Formal Offer of Evidence. [31] However, petitioner

filed an Urgent Motion to Suspend Plaintiff's Ex   Parte Presentation of

Evidence[32] dated February 8, 1999. In that regard, the trial court issued an

Order[33] dated February 11, 1999 directing the Clerk of Court to suspend the

proceedings.

On May 14, 1999, respondents filed a Motion for Clarification[34] as to

whether or not the evidence presented ex parte was nullified by the admission of

petitioner's Answer Ad Cautelam. Petitioner filed its Comment[35] dated May 13,

1999 on the said motion for clarification.

A pre-trial conference was scheduled on May 27, 1999, wherein the

parties submitted their pre-trial briefs.[36] However, petitioner filed a Motion to

Suspend Proceedings[37] 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 petition for certiorari was

subsequently denied; and a copy of the Resolution [38] dated June 14, 1999 was

received by the trial court. Hence, in an Order[39] dated July 7, 1999, the trial court

ruled that the reception of evidence already presented by the respondents before

the Clerk of Court remained as part of the records of the case, and that the

petitioner had the right to cross-examine the witness and to comment on the

documentary exhibits already presented. Consequently, petitioner filed a Motion

for Reconsideration[40] dated July 19, 1999, but it was denied by the trial court in an

Omnibus Order[41] dated September 14, 1999.

Eventually, respondents filed a Motion for Summary Judgment[42] dated

August 5, 1999, while petitioner filed its Opposition[43] to the Motion dated August

31, 1999. In its Resolution[44] dated November 3, 1999, the trial court found favor

on the respondents. The dispositive portion of the Resolution reads:

WHEREFORE, premises considered, the motion for summary judgment is hereby GRANTED and it is hereby adjudged that:

1. Plaintiffs are the absolute owners and rightful possessors of Lot 9250, CAD-355, Tagaytay Cadastre, subject to the rights of occupancy of the farm workers on the one-third area thereof;

2. The Judgment dated June 7, 1994 in Land Registration Case No. TG-423 is set aside and the Decree No. N-217313, LRC Record No. N-62686 dated August 20, 1997 is null and void;

3. The Original Transfer Certificate of Title is ordered to be canceled, as well as tax declaration covering Lot 9250, Cad-355.

SO ORDERED.

Petitioner appealed the Resolution of the trial court with the CA, which

dismissed it in a Decision dated February 28, 2006, which reads:

WHEREFORE, for lack of merit, the appeal is DISMISSED. The assailed Resolution dated November 3, 1999, of the RTC, Branch 18, Tagaytay City, in Civil Case No. TG-1784, is AFFIRMED. No pronouncement as to cost.

SO ORDERED.

Hence, the present petition.

The grounds relied upon by the petitioner are the following:

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 RULE UNDER SECTION 3, RULE 35 OF THE 1997 RULES OF CIVIL PROCEDURE.

5.2 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 A MOTION FOR SUMMARY JUDGMENT IS PROPER IN AN ACTION FOR QUIETING OF TITLE.

5.3 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 THERE ARE NO GENUINE FACTUAL AND TRIABLE ISSUES IN CIVIL CASE NO. TG-1784.

5.4 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 COURTA QUO, BASED ON TESTIMONIES OF RESPONDENTS' WITNESSES TAKEN WITHOUT GRANTING HEREIN PETITIONER THE RIGHT TO CROSS-EXAMINE AND UPON DOCUMENTARY EXHIBITS PRESENTED BUT NOT ADMITTED AS EVIDENCE.

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 COURTA QUO BASED ON FALSIFIED “EVIDENCE.”

5.6 THE COURT OF APPEALS ACTED IN A MANNER NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT FAILED TO RULE THAT THE COURT A QUO PATENTLY DEPRIVED PETITIONER OF ITS RIGHT TO DUE PROCESS IN RENDERING ITS SUMMARY JUDGMENT.

5.7 THE COURT OF APPEALS ACTED IN A MANNER NOT 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.

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 Revised Rules of Court, which was not observed

because the petitioner received a copy of the respondents' motion for summary

judgment only on August 20, 1999, or the very same day that the motion was set

for hearing. Petitioner further claims that the trial court never conducted any

hearing on the motion for summary judgment.

Petitioner also argued that a summary judgment is only available to a

claimant seeking to recover upon a claim, counterclaim or cross-claim or to obtain

a declaratory relief, and does not include cases for quieting of title. Furthermore,

petitioner also averred that a summary judgment has no place in a case where

genuine factual and triable issues exist, like in the present case. It added that the

genuine and triable issues were all raised in its Answer Ad Cautelam.

Another ground relied upon by petitioner is its failure to cross-examine

the witnesses for the respondents without fault on its part. It also stated that the

trial court did not issue any order admitting in evidence the documentary exhibits

presented by the respondents. Hence, according to the petitioner, the trial court

gravely erred in relying upon the testimonies of the witnesses for the respondents,

without having the latter cross-examined; and upon the documentary exhibits

presented but not admitted as evidence.

Petitioner further claimed that the trial court based its Resolution dated

November 3, 1999 on falsified evidence.

Lastly, petitioner raised the issue that by rendering summary judgment,

the trial court deprived the former of its right to due process.

Respondents, in their Comment[45] dated October 16, 2006, countered

the first issue raised by the petitioner, stating that their filing of the motion for

summary judgment fourteen (14) days before the requested hearing of the same

motion was in compliance with Sec. 3, Rule 35 of the Rules of Court.

As to the second and third issues, respondents argued that petitioner

had a constricted perception of the coverage of the Rules of Summary Judgment,

and that the latter's citation of cases decided by this Court showed the diverse

causes of action that could be the subject matters of summary judgment.

Respondents also posited that petitioner's statements in its Answer Ad Cautelam,

although denominated as Specific Denial, were really general denials that did not

comply with the provisions of Section 10, Rule 8 of the Rules of Court.

Anent the fourth and fifth issues, respondents claimed that despite the

opportunity, or the right allowed in the Order dated July 17, 1999 of the trial court,

for the petitioner to cross-examine respondents' witnesses and to comment on the

documentary evidence presented ex parte after the default order against the same

petitioner, the latter evasively moved to set aside respondents' evidence in order

to suspend further 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 opposing affidavit,

deposition or admission in the records; and by not objecting to the 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 records of the proceedings for the

presentation of the evidence ex parte to be able to know 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.

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 Code and for the review of the decree of registration pursuant to

Sec. 32 of the Property Registration Decree or P.D. No. 1529, because they are

complimentary with each other.

The petition is impressed with merit.

The basic contention that must be resolved by this Court is the propriety

of the summary judgment in this particular case of quieting of title.

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 declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting affidavits for a summary judgment in his favor upon all or any part thereof

SEC. 3. Motion and proceedings thereon. - The motion shall be served at least ten (10) days before the time specified for the 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.[46]

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

judgment.

Petitioner contended that the ten-day notice rule was violated, because

the copy of the motion for summary judgment was served only on August 20, 1999

or on the same 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 above specific contention, however, is misguided. The CA was

correct in its observation that there was substantial compliance with due

process. The CA ruled, as the 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.

Due process, a constitutional precept, does not, therefore, always and in

all situations a trial-type proceeding. The essence of due process is found in the

reasonable 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 of opportunity to be heard.[47]

Petitioner further argues that summary judgment is not proper in an

action for quieting of title. This particular argument, however, is misplaced. This

Court has already ruled that any action can be the subject of a summary judgment

with the sole exception of actions for annulment of marriage or declaration of its

nullity or for legal separation.[48]

Proceeding to the main issue, this Court finds that the grant of summary

judgment was not proper. A summary judgment is permitted only if there is no

genuine issue as to any material fact and a moving party is entitled to a judgment

as a matter of law. Asummary judgment is proper if, while the pleadings on their

face appear to raise issues, the affidavits, depositions, and admissions presented by

the moving party show that such issues are not genuine.[49]

It must be remembered that the non-existence of a genuine issue is the

determining factor in granting a motion for summary judgment, and the movant

has the burden of proving such nonexistence. The trial court found no genuine

issue as to any material fact that would necessitate conducting a full-blown

trial. However, a careful study of the case shows otherwise.

In their motion for summary judgment, the respondents failed to clearly

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:

Nonetheless, going by the records of the admitted and uncontroverted facts and facts established there is no more litigious or genuine issue of basic fact to be the subject of further trial on the merits.

The first defense as to the identity of the subject property, the issue has already become nil because of not only the lack of seriousness in the allegations but also because the identity of the subject parcel of land Lot 9250 was proven by the approved plan Ap-04-008367 that was already presented and offered in evidence as Exhibit “B” for the plaintiffs.

The second defense that plaintiffs' claim of the property is 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 x.

(2) Tax Declaration No. 05019-B (Exhibit “R”; x x x.

(3) Tax Declaration No. 01926-B (Exhibit “S”; x x x.

(4) Tax Declaration No. GR-007-0007 (Exhibit “T” x x x.

are the very documentary evidence adopted and relied upon by the 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.

On the other hand, as to the gravamen of the claims in the complaint, the plaintiffs have presented clear and convincing evidence as the well-nigh or almost incontrovertible evidence of a registerable title to the subject land in the proceedings conducted on the reception of evidence ex-partefor the plaintiffs establishing in detail the specifications of continuous, open, exclusive possession as aspects of 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 stated that:

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 an area of 244,112 square meters with Lot 9121, Cad 335, Tagaytay Cadastre, containing only an area of 19,356 square meters. While defendant Eland

in its answer practically and mainly interposed the 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-423; (b) the claim of the plaintiffs is barred by prior judgment of this Court in said Land Registration Case; and (c) plaintiffs' complaint is barred by the Statute of Limitation since Original Certificate of Title No. 0-660 has become incontrovertible.

Cross-reference of the above-cited Land Registration Case 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 Court has and can take judicial notice of the said land registration case, this Court observed that there is no genuine issue of fact to be tried on the merits. Firstly, because the supposed identity crisis of the controverted parcel of land covered by the Land Registration Case No. TG-423 with the subject parcel of land is established by Plan Ap-04-006275 (Exhibit “N”) LRC Case No. 423 and by Plan A04 008367 (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 records. (Heirs of Manuel Roxas v. Court of Appeals, G. R. No. 1184436, pro. March 21, 1997). Thirdly, it is incontrovertible that the complaint in this case seeking to review the judgment and annul the 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).

Notwithstanding, the issue of possession is a question of fact by the interaction of the basic pleadings, the observation of this Court is that the plaintiffs were able to prove by the well-nigh incontrovertible evidence, the aspects of possession in accordance with Section 48 (b) of Commonwealth Act 141, as amended, as hereinafter illustrated.

The CA, in affirming the above Resolution of the trial court, propounded

thus:

The contention of defendant-appellant is untenable. Summary judgment is not only limited to solving actions involving 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 material fact and the moving party is entitled to a judgment as a matter of law, summary judgment may be allowed. The term “genuine issue” has been defined as an issue of fact which calls for the presentation of evidence as distinguished from an issue which is sham, fictitious, contrived, set up in bad faith and patently unsubstantial so as not to constitute a genuine issue for trial.

Thus, under the aforecited rule, summary judgment is appropriate when there are no genuine issues of fact, which call for the presentation of evidence in a full-blown trial. Thus, even if on their face the pleadings appear to raise issues, but when the affidavits, depositions and admissions show that such issues are not genuine, then summary judgment as prescribed by the rules must ensue as a matter of law.

It should be stressed that the court a   quo which rendered the assailed resolution in Civil Case No. TG-1784 was the very court that decided the LRC Case No. TG-423. Such being the case, the court a quo was privy to all relevant facts and rulings pertaining to LRC Case No. TG-423 which it considered and applied to this case. Thus, where all the facts are within the judicial knowledge of the court, summary judgment may be granted as a matter of right.

On the contrary, in petitioner's Answer Ad Cautelam, genuine, factual

and triable issues were raised, aside from specifically denying all the allegations in

the complaint, thus:

2. SPECIFIC DENIALS

2.1 Answering defendant specifically denies the allegations contained in paragraphs 1 and 3 of the Complaint insofar as it alleges the personal circumstances of the plaintiff and one A. F. Development Corporation for lack of knowledge or information sufficient to form a 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 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 with finality by no less than this Honorable Court as absolutely owned by herein answering defendant as will be further discussed hereunder.

2.3 Answering defendant specifically denies the allegations contained in paragraph 8 of the Complaint insofar as it alleged that “(u)pon exercise of further circumspection, counsel for the plaintiffs once followed-up in writing the 1994 request of the plaintiffs to have the subject parcel of land be declared for taxation purposes” and insofar as it is made to appear that parcel of land being claimed by the plaintiffs is the same parcel of land subject matter of Land Registration Case No. TG-423 for lack of knowledge or information sufficient to form a belief as to the truth thereof and for the reason that the names of the herein plaintiffs were never mentioned during the entire proceedings in said land registration case and by reason of the Affirmative Allegations contained hereunder.

2.4 Answering defendant specifically denies the allegations contained in paragraphs 9, 10, 10 (a), 10 (b), 10 (c), 10 (d), 10 (e), 10 (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- 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 absolutely owned by herein defendant to the exclusion of all other persons as attested to by the subsequent issuance of an Original Certificate of Title in favor of answering defendant and for reasons stated in the Affirmative Allegations.

2.5 Answering defendant specifically denies the allegations 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 considering that up to the present they still do not have any certificate 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 Court had adjudged with finality that the parcel of land subject matter of Land Registration Case No. TG-423 is absolutely owned by herein defendant.

2.6 Answering defendant specifically denies the allegations contained in paragraph 13 of the complaint for the reason that defendant has never ladgrabbed any parcel of land belonging to others, much less from the plaintiffs, and further, answering defendant specifically denies the allegations therein that plaintiffs engaged the services of a lawyer for a fee for lack of knowledge r information sufficient to form a belief as to the truth thereof.

2.7 Answering defendant specifically denies the allegations contained in paragraphs 14, 15, 16, 17 and 18 of the Complaint for lack of knowledge or information sufficient to form a belief as the truth thereof.

2.8 Answering defendant specifically denies the allegations 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 and additionally, for those reasons stated in defendant's Motion to Dismiss.

2.9 Answering defendant specifically denies the allegations contained in paragraph IV (d) of the Complaint for lack of knowledge or information sufficient to form a belief as to the truth thereof.

Special and affirmative defenses were also raised in the same Answer Ad 

Cautelam, to wit:

x x x x

4.1 The pleading asserting the claim of the plaintiff states no cause of action as asserted in the Motion To Dismiss filed by herein answering defendant and for the reason that there is no evidence whatsoever showing or attesting to the fact that the parcel of land 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-423.

4.2 The complaint was barred by the prior judgment rendered by this Honorable in Land Registration Case No. TG-423.

4.3 The complaint is barred by the Statute of Limitation in that OCT No. 0-660 had become incontrovertible by virtue of the Torrens System of Registration; and to allow plaintiffs to question the validity of answering defendant's title through the instant complaint would be a collateral of OCT No. 0-660 which is not permissible under the law.

4.4 Plaintiffs are barred by their own acts and/or omission from filing the present complaint under the principles of estoppel and laches.

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 Case No. TG- 423 and inspite of such knowledge, plaintiffs never bothered to present their alleged claims in the proceedings.

4.6 Answering defendant has always acted with justice, given everyone his due, and observed honesty and good faith in his dealings.

Clearly, the facts pleaded by the respondents in their motion for

summary judgment have been duly disputed and contested by petitioner, raising

genuine issues that must be resolved only after a full-blown trial. When the facts as

pleaded by the parties are disputed or contested, proceedings

for summary judgment cannot take the place of trial.[50] In 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,

fictitious, contrived or false claim.[51]

It is of utmost importance to remember that petitioner is already the

registered owner (Original Certificate of Title [OCT] No. 0-660 issued by the

Register of Deeds) of the 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 judgment for the quieting of title.

Incidentally, the findings of the trial court contained in the disputed

summary judgment were obtained through judicial notice of the facts and rulings

pertaining to that earlier case (LRC Case No. TG-423) wherein the same trial court

ruled in favor of the petitioner. It is, therefore, disorienting that the same trial

court reversed its earlier ruling, which categorically stated that:

x x x There is overwhelming evidence or proof on record that the vendors listed in Exhibit “HH,” with submarkings, are the previous 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 grandchildren of the spouses Lucio Petate and Maria Pobleta Petate, the former owners of the same property, whose ownership is further bolstered by tax receipts showing payments of realty taxes (Exhibits “U” to “GG,” inclusive, with submarkings).

x x x

On the basis of the foregoing facts and circumstances, and considering that applicant is a domestic corporation not otherwise disqualified from owning real properties in the Philippines, this Court finds that applicant has satisfied all the conditions/requirements essential to the grant of its application pursuant to the provisions of the Land Registration Law, as amended, inspite of the opposition filed by the Heirs of the late Doroteo Miranda. Hence, the grant of applicant's petition appears to be inevitable.

WHEREFORE, this Court hereby approves the instant 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 addition to other proofs adduced in the name of the applicant, ELAND PHILIPPINES, INC., with principal office at No. 43 E. Rodriguez Ave. (España Extension), Quezon City, Metro Manila.

Once this decision becomes final and executory, the corresponding decree of registration shall forthwith issue.

SO ORDERED.

By granting the summary judgment, the trial court has in effect annulled

its former ruling based on a claim of possession and ownership of the same land for

more than thirty years without the benefit of a full-blown trial. The fact that the

respondents seek to nullify the original certificate of title issued to the petitioner

on the claim that the former were in 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. Trial courts have

limited authority to render summary judgments and may do so only when there is

clearly no genuine issue as to any material fact.[52]

Based on the foregoing, this Court deems it necessary to delve briefly on

the nature of the action of quieting of title as applied in this case. This Court's

ruling in Calacala, et al. v. Republic, et al.[53] is instructive on this matter, thus:

To begin with, it bears emphasis that an action for quieting of title is essentially a common law remedy grounded on equity. As we held inBaricuatro, Jr. vs. CA:[54]

Regarding the nature of the action filed before the trial court, quieting of title is a common law remedy for the removal of any cloud upon or doubt or uncertainty with respect to title to real property. Originating in equity jurisprudence, its purpose is to secure ‘x x x an adjudication that a claim of title to or an interest in property, adverse to that of the complainant, is invalid, so that the complainant and those claiming under him may be forever afterward free from any danger of hostile claim.’ In an action for quietingof title, the competent court is tasked to determine the respective rights of the complainant and other claimants, ‘x x x not only to place things in their proper

place, to make the one who has no rights to said immovable respect and not disturb the other, but also for the benefit of both, so that he who has the right would see every cloud of doubt over the property dissipated, and he could afterwards without fear introduce the improvements he may desire, to use, and even to abuse the property as he deems best xxx.

Under Article 476 of the New Civil Code, the remedy may be availed of only when, by reason of any instrument, record, claim, encumbrance or proceeding, which appears valid but is, in fact, invalid, ineffective, voidable, or unenforceable, a cloud is thereby cast on the complainant’s title to real property or any interest therein. The codal provision reads:

Article 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently 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 brought to remove such cloud or to quiet the title.

An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein.

In turn, Article 477 of the same Code identifies the party who may bring an action to quiet title, thus:

Article 477. The plaintiff must have legal or equitable title to, or interest in the real property which is the subject-matter of the action. He need not be in possession of said property.

It can thus be seen that for an action for quieting of title to prosper, the plaintiff must first have a legal, or, at least, an equitable title on the real property subject of the action and that the alleged cloud on his title must be shown to be in fact invalid. So it is that in Robles, et al. vs. CA,[55] we ruled:

It is essential for the plaintiff or complainant to have a legal title or an equitable title to or interest in the real property which is the subject matter of the action. Also, the deed, claim, encumbrance or proceeding that is being alleged as a cloud on plaintiff’s title must be shown to be in fact invalid or inoperative despite its prima   facie appearance of validity or legal efficacy.

Verily, for an action to quiet title to prosper, two (2) indispensable requisites must concur, namely: (1) the plaintiff

or complainant has a legal or an equitable title to or interest in the real property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.

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. 48 (b) of the Public Land Law or Commonwealth Act No. 141,

as amended. Thus, it appears that the first requisite has been satisfied. Anent the

second requisite, respondents enumerated several facts that would tend to prove

the invalidity of the claim of the petitioner. All of these claims, which would

correspond to the two requisites for the quieting of title, are factual; and, as

discussed earlier, the petitioner interposed its objections and duly disputed the

said claims, thus, presenting genuine issues that can only be resolved through a

full-blown trial.

Anent the propriety of the filing of an action for the quieting of title, the

indefeasibility and incontrovertibility of the decree of registration come into

question. Under Sec. 32 of P.D. No. 1529 or the Property Registration Decree:

Section 32. Review of decree of registration; Innocent purchaser for value. The decree of registration shall not be reopened or revised by reason of absence, minority, or other disability of any person adversely affected thereby, nor by any proceeding in any court for reversing judgments, subject, however, to the right of any person, including the government and the branches thereof, deprived of land or 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 a petition for reopening and review of the decree of registration not later than one year from and after the date of the entry of such decree of registration, but in no case shall such petition be entertained by the court where an innocent purchaser for value has acquired the land or 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, mortgagee, or other encumbrancer for value.

Upon the expiration of said period of one year, the decree of registration and the certificate of title issued shall become incontrovertible. Any person aggrieved by such decree of registration in any case may pursue his remedy by action for damages against the applicant or any other persons responsible for the fraud.

As borne out by the records and undisputed by the parties, OCT No. 0-660 of

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 the review thereof. However, a closer examination

of the above provisions would clearly indicate that the action filed, which was for

quieting of title, was not the proper remedy.

Courts may reopen proceedings already closed by final decision or decree

when an application for review is filed by the party aggrieved within one year from

the issuance of the decree of registration.[56] However, the basis of the aggrieved

party must be anchored solely on actual fraud. Shedding light on the matter is a

discussion presented in one of the recognized textbooks on property registration,

[57] citing decisions of this Court, thus:

The right of a person deprived of land or of any estate or interest therein by adjudication or confirmation of title obtained by actual fraud is recognized by law as a valid and legal basis for reopening and revising a decree of registration.[58] One of the remedies available to him is a petition for review. To avail of a petition for review, the following requisites must be satisfied:

(a) The petitioner must have an estate or interest in the land;

(b) He must show actual fraud in the procurement of the decree of registration;

(c) The petition must be filed within one year from the issuance of the decree by the Land Registration Authority; and

(d) The property has not yet passed to an innocent purchaser for value.[59]

A mere claim of ownership is not sufficient to avoid a certificate of title obtained under the Torrens system. An important feature of a certificate of title is its finality. The proceedings whereby such a title is obtained are directed against all persons, known or unknown, whether actually served with notice or not, and includes all who have an interest in the land. If they do not appear and oppose the registration of their own estate or interest in the property in 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.[60]

As further pointed out in the same book, [61] the petition for review must

be filed within one year from entry of the decree of registration. As written:

As long as a final decree has not been entered by the Land 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 decision in the registration case continues to be under the control and sound discretion of the

registration court.[62] After the lapse of said period, the decree becomes incontrovertible and no longer subject to reopening or review.

Section 32 provides that a petition for review of the decree of registration may be filed “not later than one year from and after the date of entry of such decree of registration.” Giving 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 entered. However, it has been ruled that the petition may be filed at any time after the rendition of the court's decision and before the expiration of one year from the entry of the final decree of registration for, as noted inRivera v. Moran,[63] there can be no possible reason requiring the complaining party to wait until the final decree is entered before urging his claim for fraud.

The one-year period stated in Sec. 32 within which a petition to re-open and review the decree of registration refers to the decree of registration described in Section 31, which decree is prepared and issued by the Land Registration Administrator.[64]

The provision of Section 31 that every decree of registration shall bind the land, quiet title thereto, and be conclusive upon and against all persons, including the national government, and Sec. 32 that the decree shall not be reopened or revised by reason of absence, minority or other disability or by any proceeding in court, save only in 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 decrees of registration. A decision or, as it is sometimes called after 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 judge on motion for new trial, upon any of the grounds stated in the Rules of Court.[65] 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.[66]

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.[67]

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.[68]

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.

SO ORDERED.

CHAPTER 12

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 103476 November 18, 1999

CODIDI MATA, CELESTINO, LUCIA, INGRACIO, PIO, MARCELO, MELETON, RICARDA, PAGAKAN, and CARING, all surnamed MATA, and duly represented by their attorney-in-fact ISIDRO SEMBRANO,petitioners, vs.COURT OF APPEALS and HEIRS OF CLARO L. LAURETA, respondents.

KAPUNAN, J.:

The instant case is the fourth case that reached this Court involving the same parties and property.

In this case, the heirs of Marcos Mata (petitioners) seek the reversal of the decision, dated 31 July 1991, of the Court of Appeals in CA-G.R. SP No. 24434, permanently enjoining the Regional Trial Court, Branch 1, Tagum, Davao City, from proceeding with Civil Case No. 2468, an action to enforce petitioners' right to repurchase the subject lot under Section 119 of the Public Land Act (Commonwealth Act No. 141, as amended).

The antecedent facts are as follows:

Sometime in 1940, spouses Marcos and Codidi Mata, members of a non-christian cultural minority in Davao and predecessors-in-interest of petitioners, were granted a homestead patent over a parcel of land situated in Tagum, Davao del Norte containing an area of 4.5777 hectares. Original Certificate of Title No. 3019 covering the subject lot issued in their favor.

On 10 June 1945, Marcos Mata (Mata) executed a Deed of Absolute Sale conveying the ownership of the subject lot in favor of Claro L. Laureta the predecessors-in-interest of private respondents. On 10 May 1947, Mata executed another document selling the same property to Fermin Caram, Jr. (Caram), who caused the cancellation of OCT No. 3019. In lieu thereof, Transfer Certificate of Title No. 140 was issued in Caram's name.

On 25 June 1956, Laureta filed before the Court of First Instance of Tagum (now RTC) an action, docketed as Civil Case No. 3083, to declare the first sale of the subject lot in his favor valid and the second sale thereof to Caram void.

On 29 February 1964, the CFI of Tagum rendered judgment as follows:

WHEREFORE, judgment is hereby rendered:

1. Declaring that the deed of sale, Exhibit A, executed by Marcos Mata in favor of Claro L. Laureta stands and prevails over the deed of sale, Exhibit F, in favor of Fermin Caram, Jr.;

2. Declaring as null and void the deed of sale, Exhibit F, in favor of Fermin Caram, Jr.;

3. Directing Marcos Mata to acknowledge the deed of sale, Exhibit A, in favor of Claro L. Laureta;

4. Directing Claro L. Laureta to secure the approval of the Secretary of Agriculture and Natural Resources on the deed, Exhibit A, after Marcos Mata shall have acknowledged the same before a notary public;

5. Directing Claro L. Laureta to surrender to the Register of Deeds for the City and Province of Davao the Owner's Duplicate of Original Certificate of Title No. 3019 and the latter to cancel the same;

6. Ordering the Register of Deeds for the City and Province of Davao to cancel Transfer Certificate of Title No. T-140 in the name of Fermin Caram, Jr.;

7. Directing the Register of Deeds for the City and Province of Davao to issue a title in favor of Claro L. Laureta, Filipino, resident of Quezon City, upon presentation of the deed executed by Marcos Mata in his favor, Exhibit A, duly acknowledged by him and approved by the Secretary of Agriculture and Natural Resources; and

8. Dismissing the counterclaim and crossclaim of Marcos Mata and Codidi Mata, the counterclaim of Caram, Jr., the answer in intervention, counterclaim and crossclaim of the Mansacas. 1

On appeal by the spouses Mata and Caram, the CA affirmed the aforesaid decision of the CFI. Two (2) separate petitions for review were then filed by the Matas and Caram with this Court. The petition filed by the spouses Mata, docketed as G.R. No. L-29147, was dismissed by the Court for lack of merit on 20 June 1968. Said decision became final and executory on 26 July 1968. Upon the other hand, the petition filed by Caram, docketed as G.R. No. L-28740, was dismissed by the Court on 24 February 1981. 2 Said decision became final and executory on 12 February 1982.

Meanwhile, on 23 February 1979, spouses Mata filed with the Court of First Instance (now RTC), Branch 1 of Tagum, Davao del Norte, Civil Case No. 1071 against the Lauretas for recovery of ownership and possession of the subject lot. The spouses Mata alleged that the deed of sale executed between Mata and Laureta involving the subject lot is null and void and/or unenforceable because the same had not been approved by the Secretary of Agriculture and Natural Resources as required by law and as directed by the CFI of Davao in its decision of 29 February 1964 in Civil Case No. 3083, and that said decision could no longer be executed as the same had already prescribed.

On 12 February 1983, an alias writ of execution was issued by the CFI enforcing its decision in Civil Case No. 3083. By then, Mata was already dead while his heirs (petitioners) refused to acknowledge the deed of sale in accordance with the said decision. In lieu of the requisite acknowledgment, the officer-in-charge of the court (now RTC, Branch VIII, Davao City) certified and affirmed the due execution of the deed of sale executed between Mata and Laureta. Thereafter, on 21 February 1984, the deed of absolute sale in favor of Laureta was duly approved by the Minister of Natural Resources. Finally, on 9 May 1985, TCT No. T-46346 covering the subject lot was issued in the name of Laureta.

On 20 April 1983, the RTC rendered judgment in Civil Case No. 1071 declaring, among others, that the decision in Civil Case No. 3083 in favor of private respondents had "become stale and unenforceable due to prescription." It ordered the return of the ownership of the subject lot to petitioners.

On appeal by private respondents, the CA affirmed in toto the CFI decision in Civil Case No. 1071. The case was then elevated to the Supreme Court which reversed and set aside the decision of the CA. Speaking through Justice Regalado, the Court, in its decision 3 in G.R. No. 72194 promulgated on 5 April 1990, ruled that the execution of the judgment in Civil Case No. 3083 was not time-barred because the ten-year period for the execution of the judgment in Civil Case No. 3083

commenced to run only on 12 February 1982 when the decision denying Caram's petition became final and executory.

Upon the belief that they could still exercise their right to repurchase the subject lot under the Public Land Act, on 22 November 1990, petitioners filed with the RTC, Branch 1 of Tagum, Davao City, an action against private respondents for legal redemption, reconveyance and consignation, docketed as Civil Case No. 2468.

Maintaining that Civil Case No. 2468 would render nugatory and ineffectual the decision of the Court in G.R. No. 72194, private respondents instituted with this Court a petition for injunction and prohibition seeking, among others, to restrain the trial court from proceeding with said case. On 11 March 1991, this Court referred the same to the CA for resolution.

The CA ruled in favor of private respondents and permanently enjoined the RTC from further proceeding with Civil Case No. 2468. The CA categorically declared that petitioners' right to repurchase the subject lot under the Public Land Act had already prescribed. 4 Petitioners filed a motion for reconsideration but it was denied by the CA in its resolution, dated 12 November 1991.

Aggrieved, the petitioners filed the instant Petition for Review alleging in the main that respondent CA erred in holding that petitioners' right to repurchase the subject property under Section 119 of the Public Land Act had already prescribed.

After the parties have submitted their respective pleadings, this Court issued a resolution, dated 5 September 1994, denying the petition for review for failure of the petitioners to sufficiently show that respondent court committed any reversible error in rendering the assailed decision.

Upon petitioners' motion for reconsideration, dated 27 September 1994, however, this Court, in its resolution, dated 24 October 1994, reinstated the instant petition, gave due course to the same and directed the parties to file their respective memoranda.

In their petitioner, the fundamental issue raised by petitioners is whether or not they could still exercise their right to repurchase the subject lot under the Public Land Act. In their motion for reconsideration and memorandum, however, petitioners question the validity of the sale of the subject lot to Laureta. They contend that said sale was void because the document evidencing the same was written in English, a language not understood by the vendor, and that it was not

approved by the Office for the Southern Cultural Communities (OSCC) in violation of Section 120 of the Public Land Act.

Subsequently, the various pleadings separately filed by petitioners themselves, on one hand, and Atty. Rodolfo U. Jimenez, their counsel, and Isidro Sembrano, their purported attorney-in-fact, on the other hand, have left this Court baffled as to petitioners' real stand on the matter. Thus:

1. In a Manifestation with Motion, dated 23 November 1995, filed by petitioners themselves without the assistance of their counsel, they informed the Court that they have agreed to an amicable settlement of the case with private respondents. In view thereof, they prayed that they be allowed to withdraw their petition. Attached to the said Manifestation with Motion were petitioners' letters, dated 23 November 1995, addressed to their attorney-in-fact (Isidro Sembrano) and to their counsel-on-record (Attys. Winston F. Garcia and Rodolfo U. Jimenez), informing them of the termination of their services. The amicable settlement, of even date, purportedly signed by all the petitioners and private respondents' attorney-in-fact, was also attached to the said Manifestation with Motion.

2. On 15 January 1996, Celestino Mata and Andres Basaca filed with the Court their respective affidavits, dated 30 December 1995. Celestino Mata, one of petitioners, claimed that he is the same person referred to as Lucino Mata who was made to sign the Manifestation with Motion the letters terminating the services of the attorney-in-fact and the lawyers, and the amicable settlement, all dated 23 November 1995. Celestino Mata averred that he did not understand the contents of these documents and that his signatures thereon were obtained by fraud.

3. For his part, Alfredo Basaca assailed the authority of Arcadio Mata Pasindo to sign the amicable settlement on behalf of the heirs of Marcos and Codidi Mata. While Alfredo Basaca asserted that he is one of the heirs of the spouses Mata, however, the records show that he is not named as one of the petitioners in this case.

4. The Court, in its Resolution, dated 26 February 1996, directed the petitioners and Atty. Jimenez to comment on and/or confirm the Manifestation with Motion of 23 November 1995. In compliance therewith, Atty. Jimenez filed his Comment, dated 29 March 1996, informing the Court that he was not consulted by petitioners when they filed said Manifestation with Motion. He urged the Court to decide the case on the merits.

5. Upon the other hand, most of the petitioners, namely Clarita Mata Pasindo, Julieta Mata Abundo, Engracio Mata, Dagakan Mata vda. de Cuanas, Marcelo Mata, Severino Antolihao, Arcadio Mata Pasindo, Lucia Mata Antolihao and Meliton Mata, filed their Manifestation with Motion (to Comment and/or Confirm), dated 27 March 1996. They affirmed their respective signatures on the Manifestation with Motion of 23 November 1995 and the attachments thereto and averred that they understood the contents thereof as these were fully explained to them in the presence of the Provincial Officer of the OSCC in Tagum, Davao. They reiterated their prayer that they be allowed to withdraw their petition.

6. On 5 September 1996, Isidro Sembrano submitted to this Court a Joint Affidavit of petitioners Celestino Mata and Ricarda Mata, dated 21 February 1996, claiming, among others, that they were deceived into signing the amicable settlement. On 10 January 1997, Isidro Sembrano submitted a Joint Affidavit of Rosendo Mata-Pasindo, Carmelita Mata-Pasindo, Wilfredo Mata and Julieta Mata-Abundio, dated 9 January 1997, again claiming that they were deceived into signing the amicable settlement. Curiously, however, except for Julieta Mata-Abundio, the three (3) other affiants, namely, Rosendo Mata-Pasindo, Carmelita Mata-Pasindo and Wilfredo Mata, were not signatories to the amicable settlement.

7. On 23 June 1997, petitioners filed with the Court their Joint Affidavit, dated 26 May 1997, reiterating their Manifestation with Motion of 23 November 1995. They manifested in the Joint Affidavit that they voluntarily signed the amicable settlement and reiterated their prayer that they be allowed to withdraw their petition. In support of said Joint Affidavit,

petitioners attached thereto the report of Mr. Romero A. Maing, the Provincial Officer of the OSCC in Tagum, Davao, dated 10 February, regarding an investigation he conducted on 3 February 1997 attended by petitioners. Mr. Maing attested that petitioners categorically denied having been coerced, forced or intimidated into signing the amicable settlement. Upon Mr. Maing's query, petitioners expressed their desire to proceed with the amicable settlement of the case.

8. Thereafter, Atty. Jimenez filed a motion, dated 25 August 1997, urging this Court to resolve the petition. He also filed a Motion to Require Personal Appearance of Petitioners before the OSCC to Verify their Final Stand on the Petition, dated 29 September 1997. In said motion, Atty. Jimenez admitted that he had only been in contact with the attorney-in-fact of petitioners and never with petitioners themselves.

9. Private respondents then filed a Dismiss Petition, dated 10 September 1997. Petitioners likewise filed an Opposition to Motion to Resolve Petition Filed by Attorney Rodolfo U. Jimenez as Counsel for Petitioners, dated 1 October 1997. In said opposition, signed by all the petitioners themselves, they reiterated that the amicable settlement of 23 November 1995 was their own free and voluntary act. They explained that although it was written in English, the contents thereof were translated and fully explained to them in the dialect known to and understood by them. With regard to their relationship to Attorney Jimenez, petitioners denied that they personally engaged him to represent them in this case. It was allegedly only Isidro Sembrano, acting on his own, who engaged Atty. Jimenez' legal services. At any rate, having terminated the same on 23 November 1995, petitioners claimed that Atty. Jimenez no longer had any authority to represent them in the case. Petitioners reiterated their prayer that they be allowed to withdraw their petition. The Provincial Officer of the OSCC in Tagum, Davao issued a Certification, dated 3 October 1997, attesting that the contents of said opposition were fully explained to petitioners in their dialect.

10. In a resolution, dated 10 December 1997, the Court required Atty. Jimenez to file his comment on said opposition.

In compliance therewith, Atty. Jimenez averred in his comment, dated 5 February 1998, that he is merely protecting the interests of petitioners and urged this Court to resolve the case on the merits. A few months later, said counsel filed the Motion for Leave to File Attached Joint Affidavit of Some of the Petitioners, dated 1 June 1998. The Joint Affidavit, dated 20 March 1998, purportedly executed by six (6) affiants, namely, Arcadio M. Pasindo, Julieta M. Abundio, Celestino Mata, Clarita M. Pasindo, Marcelo Mata and Ricarda vda. de Ayonan, averred that they are retracting their statements contained in the Manifestation with Motion, dated 23 November 1995, and its attachments, and in the Opposition to Motion to Resolve Petition Filed by Atty. Rodolfo Jimenez as counsel for petitioners, dated 1 October 1997.

11. The affiants in said Joint Affidavit claimed that they were deceived into signing and/or affixing their thumbmarks on the said pleadings and documents. They stated that they are no longer withdrawing their petition and urged the Court to resolve it on the merits. A careful perusal of the said Joint Affidavit shows that petitioners Marcelo Mata and Ricarda vda. de Ayonan did not personally affix their respective signatures thereon. Rather, two (2) other persons signed above their names although it does not appear that they had been duly authorized by petitioners Marcelo Mata and Ricarda vda. de Ayonan to do so.

12. Petitioners thereafter filed their Opposition, dated 4 November 1998, to Atty. Jimenez' Motion to Resolve petition Attached to the said opposition is a Clarificatory Affidavit, dated 26 August 1998, executed by the petitioners except Celestino Mata and Clarita Mata Pasindo, who did not affix their respective signatures thereon. In said affidavit, affiants accused Isidro Sembrano and Atty. Manuel Iral, Chief of the Legal Division of the Central Office of the OSCC of having conspired with each other and deceived some of the petitioners into signing the Joint Affidavit, dated 20 March 1998, and retracting their statements in the Manifestation with Motion, dated 23 November 1995. Affiants affirmed that they voluntarily signed said Manifestation with Motion and its attached documents including the amicable settlement. They likewise maintained that Isidro Sembrano is no longer authorized to act on their

behalf and that Atty. Jimenez no longer had any authority to represent them in this case. Petitioners once again sought this Court's approval of their amicable settlement.

13. On 1 March 1999, Atty. Jimenez submitted to this Court an Investigation Report, dated 14 January 1999, purportedly prepared by Atty. Iral in his capacity as Chief of the Legal Division of the present National Commission on Indigenous People. Attached to the report were the Panunumpa, both dated 11 January 1999, of petitioners Celestino Mata and Clarita Mata-Pasindo. These affiants affirmed the retraction of their signatures on the Manifestation with Motion, dated 23 November 1995, claiming that they did not understand its contents. They likewise affirmed the appointment of Isidro Sembrano and Atty. Jimenez as their attorney-in-fact and counsel, respectively.

Given the dizzying and seemingly interminable equivocation in the stance of the petitioners vis-a-vis the proposed amicable settlement of 23 November 1995, we are constrained to disregard the same and proceed with the resolution of the case on the merits.

I

As stated earlier, in their Motion for Reconsideration and Memorandum, petitioners harp on the alleged nullity of the deed of sale executed between Mata and Laureta in 1945 on the ground that it was written in English, a language not understood by the former, and that it was not approved by the OSCC in violation of Section 4(n), Republic Act No. 1888, as amended, in relation to Section 120 of the Public Land Act. The issue of the validity or nullity of the aforesaid deed of sale, however, had already been passed upon by this Court in the case of Caram, Jr. vs. Laureta, 5 the first case decided at length by this Court involving the subject property. Previously, another petition filed by Mata questioning the decision of the CA which upheld the sale of the subject property to Laureta was dismissed by this Court on 24 February 1981.

In the Caram case, the issue raised was which sale was valid considering that Mata sold the same property twice: first to Laureta and later on to Caram. We upheld therein the validity of the sale in favor of Laureta as we affirmed the findings of the lower court to the effect that while the sale to Laureta was voidable, as it was procured by force, the same "was cured when, after the lapse of four years from

the time the intimidation ceased, Marcos Mata lost both his rights to file an action for annulment or to set up the nullity of the contract as a defense in an action to enforce the same." 6 We stated therein that "the first sale in favor of Laureta prevails over the sale in favor of Caram." 7 This pronouncement cannot be construed in any other way but that the Court affirmed the validity of the sale of the subject property in favor of Laureta as against the sale of the same to Caram, which we categorically declared as void.

Then again, in the case of Heirs of Claro L. Laureta vs. Intermediate Appellate Court, 8 this Court ordered the dismissal of Civil Case No. 1071 filed by petitioners. It must be noted that in their complaint therein, petitioners also raised the issue of the nullity of the deed of sale executed between Mata and Laureta on the ground that, among others, it had not been approved by the then Secretary of Agriculture and Natural Resources as required by law. Thus, by ordering the dismissal of Civil Case No. 1071, we, in effect, upheld anew the validity of the sale of the subject property in favor of Laureta. In the said decision, we likewise allowed private respondents to proceed with the execution of the judgment in Civil Case No. 3083 as the same was not yet time-barred.

The foregoing rulings in the earlier related cases, which had long attained finality, upholding the validity of the sale of the subject property in favor of Laureta effectively foreclose any further inquiry as to its validity. This is in consonance with the doctrine of res judicata as embodied in Rule 39, Section 47 of the Rules of Court:

Sec. 47. Effect of judgments or final orders. — The effect of a judgment or final order rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:

(a) . . .

(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing

and under the same title and in the same capacity; and

(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto.

The doctrine of res judicata actually embraces two (2) concepts: the first is "bar by prior judgment" under paragraph (b) of Rule 39, Section 47, and the second is "conclusiveness of judgment" under paragraph (c) thereof. 9 In the present case, the second concept — conclusiveness of judgment — applies. The said concept is explained in this manner:

[A] fact or question which was in issue in a former suit and was there judicially passed upon and determined by a court of competent jurisdiction, is conclusively settled by the judgment therein as far as the parties to that action and persons in privity with them are concerned and cannot be again litigated in any future action between such parties or their privies, in the same court or any other court of concurrent jurisdiction on either the same or different cause of action, while the judgment remains unreversed by proper authority. It has been held that in order that a judgment in one action can be conclusive as to a particular matter in another action between the same parties or their privies, it is essential that the issue be identical. If a particular point or question is in issue in the second action, and the judgment will depend on the determination of that particular point or question, a former judgment between the same parties or their privies will be final and conclusive in the second if that same point or question was in issue and adjudicated in the first suit . . . . . 10

Although the action instituted by petitioners in the lower court in this case (action for reconveyance) is different from the actions they instituted in the earlier cases, the concept of conclusiveness of judgment still applies because under this principle "the identity of causes of action is not required but merely identity of issues." 11

Simply put, conclusiveness of judgment bars the relitigation of particular facts or issues in another litigation between the same parties on a different claim or cause of action. In Lopez vs. Reyes, 12 we expounded on the concept of conclusiveness of judgment as follows:

The general rule precluding the relitigation of material facts questions which were in issue and adjudicated in former action are commonly applied to all matters essentially connected with the subject matter of litigation. Thus it extends to questions "necessarily involved in an issue, and necessarily adjudicated, or necessarily implied in the final judgment, although no specific finding may have been made in reference thereto, and although such matters were directly referred to in the pleadings and were not actually or formally presented. Under this rule, if the record of the former trial shows that the judgment could not have been rendered without deciding the particular matter, it will be considered as having settled that matter as to all future actions between the parties, and if a judgment necessarily presupposes certain premises, they are as conclusive as the judgment itself. Reasons for the rule are that a judgment is an adjudication on all the matters which are essential to support it, and that every proposition assumed or decided by the court leading up to the final conclusion and upon which such conclusion is based is as effectually passed upon as the ultimate question which is solved. 13

There is no question that the issue of the validity or nullity of the sale of the subject property in favor of Laureta had already been passed upon by this Court in Caram, where we categorically pronounced that the sale in favor of Laureta prevails over that of Caram, which we declared void, and in Laureta, where we stated that private respondents may still validly proceed with the execution of the decision in Civil Case No. 3083. Caram became final and executory on 12 February 1982 while Laureta on 5 July 1990. Applying the rule on conclusiveness of judgment, the matter may no longer be relitigated in this case.

As held in Legarda vs. Savellano 14 —

It is a general rule common to all civilized system of jurisprudence, that the solemn and deliberate sentence of the law, pronounced by its appointed organs, upon a disputed fact or a state of facts, should be regarded as a final and conclusive

determination of the question litigated, and should forever set the controversy at rest. Indeed, it has been well said that this maxim is more than a mere rule of law, more than an important principle of public policy; and that it is not too much to say that it is a fundamental concept in the organization of the jural sytem. Public policy and sound practice demand that, at the risk of occasional errors, judgments of courts should become final at some definite date fixed by law. The very object for which courts were constituted was to put an end tocontroversies. 15

II

The next issue is whether or not petitioners can still validly exercise their right to repurchase the subject property pursuant to Section 119 of the Public Land Act:

Sec. 119. Every conveyance of land acquired under the free patent or homestead provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal heirs, within a period of five (5) years from date of conveyance.

The term "conveyance" imports the transfer of legal title from one person to another. It usually takes place upon the execution of the deed purporting to transfer the ownership of the land as the same is already valid and binding against the parties thereto even without the act of registration. The registration is intended to protect the buyer against claims of third parties against subsequent alienations by the vendor, and is certainly not necessary to give effect, as between the parties, to their deed of sale. Thus, for the purpose of reckoning the five-year period to exercise the right to repurchase, the date of conveyance is construed to refer to the date of the execution of the deed transferring the ownership of the land to the buyer. 16

In this case, Mata conveyed the ownership of the subject property to Laureta by virtue of a Deed of Absolute Sale, dated 10 June 1945. Petitioners, as heirs of Marcos Mata, filed the action for reconveyance (Civil Case No. 2468) on 24 November 1990. From this date up to the time of the filing of the action for reconveyance, more than forty-five (45) years had lapsed. Clearly, petitioners' right to redeem the subject property had already prescribed by the time they went to court. As correctly pointed out by the CA, if the five-year period to repurchase were

to be reckoned from 12 February 1982, the date of finality of our decision in the Caram case 17 where we declared that the sale in favor of Laureta prevails over that in favor of Caram, prescription of the right to repurchase had set in.

The same conclusion would obtain even if the running of the five-year period were to start from 9 May 1985, when Transfer Certificate of Title No. T-46346 covering the subject property was issued in favor Laureta after the sale in his favor was approved by the Minister of Natural Resources in accordance with the decision in Civil Case No. 3083, petitioners' action to repurchase the subject property would still be time-barred, as more than five (5) years had already lapsed.

Petitioners further argue that the five-year period should be reckoned from September 1990, when the decision of this Court in Laureta 18 allegedly became final and executory. Petitioners maintain that prior to the said date, they could not exercise their right to repurchase since the issue of its ownership was still then under litigation. This contention is without merit. As earlier discussed, the act of conveyance within the meaning within the meaning of the Section 119 of the Public Land Act had already been made long before the finality of our decision in Laureta. At any rate, said case resolved an entirely different issue, i.e., whether or not private respondents' motion for execution of the judgment in Civil Case No. 3083 was time-barred. Accordingly, the CA correctly ordered the dismissal of petitioners' action for reconveyance on ground of prescription.

III

With respect to the procedural issue raised by petitioners, i.e., whether the CA erred in granting private respondents' petition for injunction as it had allegedly the effect of disposing the case without trial on the merits, suffice it to say that since private respondents' right to injunctive relief was clear, the CA properly granted the same. The CA, likewise, correctly ordered the dismissal of Civil Case No. 2468 as the records of the case clearly showed that petitioners' right to repurchase had already prescribed. A trial on the merits thereon would serve no other purpose and would only result in needless delay.

Indeed, this controversy has already dragged on for more than half a century, it is, thus, high time that we write finis to it.

. . . (L)itigations must end and terminate sometime and somewhere, it being essential to the effective administration of justice that once judgment has become final, the winning party

be not, through a mere subterfuge, deprived of the fruits of the verdict. Hence, courts must guard themselves against any scheme to bring about that result, for constituted as they are to put an end to controversies, they should frown upon any attempt to prolong it. Public policy and sound practice demand that at the risk of occasional errors, judgments of courts should become final and irrevocable at some definite date fixed by law. Interes rei publicae ut finis sitlitium. . . . 19

WHEREFORE, premises considered, the petition is hereby DENIED and the assailed decision of the respondent Court of Appeals is AFFIRMED.

SO ORDERED.

Davide, Jr., C.J., Puno, Pardo and Ynares-Santiago, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 104296 March 29, 1996

REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR OF LAND, petitioner, vs.THE COURT OF APPEALS, HEIRS OF IRENE BULLUNGAN, represented by her husband DOMINGO PAGGAO and THE REGISTER OF DEEDS OF ISABELA, respondents.

MENDOZA, J.:p

This is a petition for review of the decision 1 of the Court of Appeals reversing the decision of the Regional Trial Court, Branch XIX, 2 Cauayan, Isabela declaring Free Patent No. V-79740 and Original Certificate of Title No. P-8817 in the name of Irene Bullungan null and void so far as the portion of Lot No. 1, Psu-150801 involved in this case is concerned.

The facts of this case are as follows:

On September 10, 1955, Irene Bullungan (now deceased) applied for a free patent covering lot situated in Fugaru (now San Guillermo), Angadanan, Isabela. The lots included a portion of Lot No. 1, Psu-150801, between Lot No. 763 and Lot No. 764, consisting of 1.04 hectares, which Vicente Carabbacan claimed. In her application, Irene Bullungan stated that the land applied for by her was not claimed or occupied by any other person and that it was public land which had been continuously occupied and cultivated by her since 1925. 3

Upon certification of Assistant Public Land Inspector Jose M. Telmo at Ilagan, Isabela that Irene Bullungan had been in actual, continuous open, notorious, exclusive and adverse possession of the land since 1925, the Director of Lands approved Bullungan's application on June 4, 1957. On December 26, 1957, Original Certificate of Title No. P-8817 was issued in the name of Irene Bullungan.

Alleging that a portion of Lot No. 1, Psu-150801 covered by the free patent issued to Irene Bullungan overlapped the lot between Lot No. 763 and Lot No. 764, which he was occupying, Vicente Carrabacan filed a protest on September 7, 1961. The District Land Officer at Ilagan, Isabela recommended the dismissal of the protest on the ground that the Bureau of Lands no longer had jurisdiction over the matter as a result of the grant of a free patent to Irene Bullungan. But the Director of Lands on March 23, 1982 ordered an investigation of the protest.

Vicente Carabbacan also brought an action for the reconveyance of the portion of Lot No. 1, Psu-150801 and the cancellation of free patent against Irene Bullungan on September 5, 1961, although this was dismissed by the court without prejudice.

The heirs of Irene Bullungan in turn sought to recover possession of the land in an action which they brought in the Court of First Instance of Isabela on April 13, 1972. The case was docketed as Civil Case No. Br. II-1102. On the other hand, refusing to give up his claim, Vicente Carabbacan filed a case for reconveyance on August 15, 1972, which was docketed as Civil Case No. 1108. The cases were thereafter tried jointly.

On November 22, 1972 the court rendered a decision, dismissing the complaint of Vicente Carabbacan and ordering him to vacate the land, even as it upheld the ownership of Irene Bullungan. Carabbacan, who had been in possession of the land in question, was finally ousted on December 10, 1981.

As already stated, the Director of Lands ordered on March 23, 1982 an investigation of Carabbacan's protest. The investigation was undertaken by Senior

Special Investigator Napoleon R. Dulay, who found that Vicente Carabbacan had been in-actual cultivation of the land identified as Lot No. 763, Pls-594 since 1947, having acquired the same from Tomas Tarayao on May 4, 1947. In his report dated September 17, 1985, the land investigator stated that due to a big flood which occurred in December 1947, the Cagayan River changed its course by moving north-east, resulting in the emergence of a piece of land, which is the subject of this dispute. Carrabacan took possession of the land and cultivated it. He was in the continuous; peaceful, open and adverse occupation and cultivation of the land from December 1947 until 1981 when he was ejected by virtue of the decision in Civil Cases No. 1088 and 1102. 4

Based on these findings, the Chief of the Legal Division of the Bureau of Lands recommended on March 10, 1986 that steps be taken to seek the amendment of Free Patent No. V-79747 and Original Certificate of Title No.P-8817 of the late Irene Bullungan so as to exclude the disputed portion and for the reversion of the same to the State.

On November 28, 1986, the Solicitor General filed in behalf of the Republic of the Philippines a complaint for the cancellation of Free Patent No. V-79740 and OCT No. P-8817 on the ground of fraud and misrepresentation in obtaining the free patent. The case was filed in the Regional Trial Court of Cauayan, Isabela which, on September 25, 1989, rendered a decision declaring Free Patent No. V-79740 and OCT No. P-8817 null and void insofar as the portion of Lot No. 1, Psu-150801 between Lot No. 763 and Lot No. 764, is concerned. The lower court found that Irene Bullungan made misrepresentations by claiming in her application for a free patent that she was in possession of the disputed portion of Lot No. 1, Psu-150801, when in fact Vicente Carabbacan was occupying and cultivating the land. The court justified the reversion of the land in question as an assertion of "a governmental right."

On appeal, however, the Court of Appeals reversed the lower court's ruling on the ground that, after the lapse of one year from the date of issuance of the patent, the State could no longer bring an action for reversion. The appellate court held that the certificate of title issued in the name of Irene Bullungan became incontrovertible and indefeasible upon the lapse of one year from the issuance of the free patent.

The Republic controverts the ruling of the Court of Appeals. It contends that the doctrine of indefeasibility of Torrens Titles does not bar the filing of an action for cancellation of title and reversion of land even if more than one year has elapsed from the issuance of the free patent in case of fraud in obtaining patents.

We agree with petitioner. To begin with, there is no question that Free Patent No. 79740 and Original Certificate of Title P-8817 were obtained through fraud. The trial court found that Irene Bullungan falsely stated in her application for a free patent that Lot No. 1, Psu-150801 was not claimed or occupied by any other person. The trial court found that a portion of the lot in question had been in the possession and cultivation of Vicente Carabbacan since December 1947. 5 Indeed private respondents admit that before Irene Bullungan filed her application for a free patent, she had filed a complaint for forcible entry against Vicente Carrabacan. The complaint, which was filed in the Justice of the Peace Court of Angadanan, Isabela, was dismissed precisely because the court found that Carabbacan had been in possession of the land long before it was sold to Irene Bullungan by Leonida Tarayao. 6

The Court of Appeals did not disturb the trial court's finding in this case that Irene Bullungan committed fraud and misrepresentation. Its decision rests solely on the ground that after the lapse of one year from the date of issuance of a free patent an action for the cancellation of patent and title on ground of fraud and misrepresentation can no longer be maintained.

We think that this is error. It is settled that once a patent is registered under Act No. 496 (now P.D. No. 1529) and the corresponding certificate of title is issued, the land ceases to be part of the public domain and becomes private property over which the Director of Lands will no longer have either control or jurisdiction. 7 The Torrens Title issued on the basis of a free patent or homestead patent becomes as indefeasible as one which was judicially secured upon the expiration of one year from date of issuance of patent as provided in P.D. No. 1529, §32 (formerly Act No. 496, (§38). However, as held in Director of Lands v. De Luna, 8 even after the lapse of one .year, the State may still bring an action under §101 9 of the Public Land Act for the reversion to the public domain of lands which have been fraudulently granted to private individuals. This has been the consistent ruling of this Court. 10

The failure of Irene Bullungan to disclose that Vicente Carrabacan was in possession of the portion of land in dispute constitutes fraud and misrepresentation and is a ground for annulling her title. 11 Thus §91 of the Public Land Act provides:

§91. The statements made in the application shall be considered as essential conditions and parts of any concession, title, or permit issued on the basis of such application, and any false statement therein or omission of facts altering, changing, or modifying the consideration of the facts set forth in such

statements, and any subsequent modification, alteration, or change of the material facts set forth in the application shall ipso facto produce the cancellation of the concession, title, or permit granted. It shall be the duty of the Director of Lands, from-time to time and whenever he may deem it advisable, to make the necessary investigations for the purpose of ascertaining whether the material facts set out in the application are true, or whether they continue to exist and are maintained and preserved in good faith, and for the purpose of such investigation, the Directors Lands is hereby empowered to issue subpoenas and subpoenas duces tecum and, if necessary, to obtain compulsory process from the courts. In every investigation made in accordance with this section, the existence of bad faith, fraud, concealment, or fraudulent and illegal modification of essential facts shall be presumed if the grantee or possessor of the land shall refuse or fail to obey a subpoena or subpoena duces tecum lawfully issued by the Director of Lands or his authorized delegates or agents, or shall refuse or fail to give direct and specific answers to pertinent questions, and on the basis of such presumption, an order of cancellation may issue out further proceedings.

The appellate court said in its decision:

We are not, of course, unaware of cases where the patent and the certificate of title issued pursuant thereto were declared null and void notwithstanding the expiration of the aforementioned period of one (1) year simply because of false statement of material and essential facts made in the application therefor. Be it noted, however, that in these cases the lots patented or granted were no longer part of the public domain but private ones segregated from the mass thereof. Consequently, no right whatsoever was awarded in said cases for it is already settled that a free patent which purports to convey land to which the government did not have any title at the time of its issuance does not vest any title in the patentee as against the true owner (Suva v. Ventura, 40 O.G. 8, 4th sup. August 23, 1941; Vital v. Anore, 90 Phil. 855; Director of Lands v. Abanilla, G.R. No. L-26324, August 31, 1983). This does not obtain in the present case for it is beyond dispute that the subject land was still a part of the public domain when the same was patented by the Government in favor of appellants'

predecessor in interest. Accordingly, there was indeed a title awarded such that when the same was brought under operation of Land Registration Act in 1957, it became incontrovertible in 1958. 12

This is not so. Where public land is acquired by an applicant through fraud and misrepresentation, as in the case. at bar, the State may institute reversion proceedings even after the lapse of the one-year period.

Nor is there merit in the claim of private respondents that the action taken by the Republic in this case is "not in keeping with the policy of State to foster families as the factors of society, to give them a sense of protection and permanency in their homes." 13 Public policy demands that one who obtains title to a public land through fraud should not be allowed to benefit therefrom. Vicente Carabbacan had been in possession of the land even before Irene Bullungan bought the possessory rights to the land. It was therefore a misrepresentation for her to state in her application for a free patent that she had been in possession of the lot in question when the fact is that Carabbacan had been there ahead of her.

WHEREFORE, the decision appealed from is REVERSED and the decision dated September 25, 1989 of the Regional Trial Court of Cauayan, Isabela, Branch XIX is REINSTATED.

SO ORDERED.

Regalado, Romero, Puno and Mendoza, JJ., concur.

Torres, Jr., J., is on leave.

Republic of the PhilippinesSUPREME COURTManila

FIRST DIVISION

G.R. No. 151440 June 17, 2003

HEIRS OF SIMPLICIO SANTIAGO, represented by ANGELITA S. CASTRO, petitioners, vs.HEIRS OF MARIANO E. SANTIAGO, respondents.

YNARES-SANTIAGO, J.:

A free patent issued over a private land is null and void and produces no legal effects whatsoever. Quod nullum est, nullum producit effectum.1 Free patent applications under the Public Land Act2 apply only to disposable lands of the public domain, and not to private lands which became such by virtue of a duly registered possessory information or by open, continuous, exclusive, and notorious possession, of the present or previous occupants.3

This petition seeks to reverse and set aside the December 3, 1999 decision4 of the Court of Appeals in CA-G.R. CV No. 42761, which reversed and set aside the December 3, 1999 decision5 of the Regional Trial Court of Malolos, Bulacan, Branch 27 in Civil Case No. 7401-M.

The instant controversy involves a 574 square meter parcel of land known as Lot No. 2344, Cad-349,6 located in Poblacion, Angat, Bulacan, which was formerly owned by the spouses Vicente Santiago and Magdalena Sanchez. The spouses had

five children, among whom were Pablo and Marta. Pablo is the father of Simplicio Santiago and Guillermo Santiago; while Marta is the mother of Jose Santiago.7

On April 3, 1984, petitioners, the heirs of Simplicio Santiago, initiated a complaint8 for accion publiciana with damages against Mariano Santiago, son of Jose Santiago.9 They alleged that Lot 2344 was acquired by Simplicio by purchase from his father, Pablo, and brother, Guillermo.10 When Simplicio retired from government service in 1968, he constructed a house on the said lot.11 Before his demise on May 6, 1983, he applied for a free patent,12 which was granted. Thus, on September 26, 1980, Original Certificate of Title No. P-10878 covering Lot 2344 was issued in his name.13 Sometime in 1983, Mariano Santiago, through stealth and evident bad faith, constructed a house on a portion of Lot 2344 and refused to vacate the premises despite written and oral demands.14

At the trial, twenty-three-year old Nestor Santiago, one of the children of Simplicio Santiago, admitted that since he attained the age of reason, the house of Mariano Santiago was already existing in Lot No. 2344-C. His father allegedly advised Mariano to remove the house but the latter refused to do so.15

In his answer,16 Mariano Santiago contended that Lot 2344 was subdivided into three portions, i.e., Lot 2344-A, with an area of 168 square meters; Lot 2344-B, with an area of 349 square meters; and Lot 2344-C, with an area of 57 square meters.17 Petitioners owned only Lot 2344-B, and Lots 2344-A and 2344-C, containing an area of 225 square meters, was fraudulently included in the free patent and certificate of title issued to Simplicio Santiago. Mariano testified that he and his sister, Belen S. Marcelo, purchased Lot 2344-A from Simplicio Santiago for the price of P5,000.00, as evidenced by a deed of sale dated September 15, 1972.18 Immediately after the sale, they constructed a house on the lot.19 Without their knowledge, however, Simplicio secured a free patent and an original certificate of title over the entire Lot 2344. On the other hand, he and his sister inherited Lot 2344-C from their grandmother, Marta Santiago, who in turn inherited the lot from her parents, Vicente and Magdalena. During her lifetime, Marta had been living in the house built on the said lot.20 When Mariano was born in 1926, the house was still made of nipa, but it was subsequently improved in 1931 and 1952 into a house of strong materials.21

Mariano’s testimony was corroborated by seventy-year old Socorro Ocampo,22 first cousin of Simplicio and Mariano’s father, Jose, and by fifty-two-year old Flordeliza Austria,23 a long-time neighbor of the parties. Both witnesses testified that since they were still children, the house of Marta where she and Mariano’s family resided was already existing on Lot 2344-C.

On August 6, 1991, the trial court rendered a decision in favor of petitioners. It found that Mariano’s claim over the controverted lot lacks basis and held that his defense constitutes a collateral attack on the validity of a Torrens title which was barred by prescription for having been raised more than one year after the entry of the decree of registration. The dispositive portion of the decision reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendant:

1. Declaring the plaintiffs, children and heirs of the late Simplicio Santiago, the owners of the property covered by Original Certificate of Title No. P-10878 of the Registry of Deeds of Bulacan, which is registered in the name of Simplicio Santiago;

2. Ordering the defendant Mariano Santiago to remove and vacate the 57 square meter portion of the property covered by said title (O.C.T. No. P-10878) on which his house is established and surrender the possession thereof to the plaintiffs;

3. Dismissing/denying all claims and counterclaims for damages by the parties.

No pronouncement as to costs.

SO ORDERED.24

Meanwhile, Mariano died on July 5, 1993 and was substituted by his heirs.25

Respondents appealed to the Court of Appeals which reversed the decision of the trial court on December 3, 1999. It sustained respondents’ claim over Lots 2344-A and 2344-C and ruled that the Free Patent and the Original Certificate of Title issued in favor of Simplicio Santiago are void, because Lot 2344 is a private land which cannot be the subject of a Free Patent. The decretal portion thereof states:

WHEREFORE, premises considered, the decision dated August 6, 1991 is hereby REVERSED and SET ASIDE and in its stead another judgment is rendered in favor of the appellant and against the appellees as follows:

a. declaring the Free Patent Title under O.C.T. No. P-10878 (Exh. "A") null and void;

b. declaring the appellants the absolute owner of the 225 square meters of Lot 2344, designated as Lot 2344-A and 2344-C (Exhs. "2-A" & "2-B", respectively;

c. declaring the appellees the absolute owners of 349 square meters of Lot 2344, designated as Lot No. 2344-B (Exh. "2-C");

d. ordering the appellees to pay the costs.

SO ORDERED.26

Hence, the instant petition.

The main issues are: (1) whether or not the free patent and the certificate of title issued to Simplicio Santiago are valid; and (2) whether or not respondents’ claim over Lots 2344-C and 2344-A is supported by the evidence.

The settled rule is that a free patent issued over a private land is null and void, and produces no legal effects whatsoever. Private ownership of land – as when there is a prima facie proof of ownership like a duly registered possessory information or a clear showing of open, continuous, exclusive, and notorious possession, by present or previous occupants – is not affected by the issuance of a free patent over the same land, because the Public Land law applies only to lands of the public domain. The Director of Lands has no authority to grant free patent to lands that have ceased to be public in character and have passed to private ownership. Consequently, a certificate of title issued pursuant to a homestead patent partakes of the nature of a certificate issued in a judicial proceeding only if the land covered by it is really a part of the disposable land of the public domain.27

In the instant case, it was established that Lot 2344 is a private property of the Santiago clan since time immemorial, and that they have declared the same for taxation.28 Although tax declarations or realty tax payment of property are not conclusive evidence of ownership, nevertheless, they are good indicia of possession in the concept of owner, for no one in his right mind would be paying taxes for a property that is not in his actual or constructive possession. They constitute at least proof that the holder has a claim of title over the property. The voluntary declaration of a piece of property for taxation purposes manifests not only one’s

sincere and honest desire to obtain title to the property and announces his adverse claim against the State and all other interested parties, but also the intention to contribute needed revenues to the Government. Such an act strengthens one’s bona fide claim of acquisition of ownership.29

Considering the open, continuous, exclusive and notorious possession and occupation of the land by respondents and their predecessors in interests, they are deemed to have acquired, by operation of law, a right to a government grant without the necessity of a certificate of title being issued. The land was thus segregated from the public domain and the director of lands had no authority to issue a patent. Hence, the free patent covering Lot 2344, a private land, and the certificate of title issued pursuant thereto, are void.30

Similarly in Magistrado v. Esplana,31 the applicant for a free patent declared that the lots subject of the application formed part of the public domain for the sole purpose of obtaining title thereto as cheaply as possible. We annulled the titles granted to the applicant after finding that the lots were privately owned and continuously possessed by the applicant and his predecessors-in-interest since time immemorial. Likewise, in Robles v. Court of Appeals,32 the free patent issued to the applicant was declared void because the lot involved was shown to be private land which petitioner inherited from his grandparents.

Respondents’ claim of ownership over Lot 2344-C and Lot 2344-A is fully substantiated. Their open, continuous, exclusive, and notorious possession of Lot 2344-C in the concept of owners for more than seventy years supports their contention that the lot was inherited by Mariano from her grandmother Marta, who in turn inherited the lot from her parents. This fact was also corroborated by respondents’ witnesses who declared that the house where Marta and Mariano’s family resided was already existing in the disputed portion of Lot 2344 even when they were still children. It is worthy to note that although Lot 2344-C was within the property declared for taxation by the late Simplicio Santiago, he did not disturb the possession of Marta and Mariano. Moreover, while the heirs of Simplicio tried to make it appear that Mariano built his house only in 1983, Nestor Santiago admitted on cross-examination that Mariano Santiago’s house was already existing in the disputed lot since he attained the age of reason. The fact that Mariano did not declare Lot 2344-C for taxation does not militate against his title. As he explained, he was advised by the Municipal Assessor that his 57 square meter lot was tax exempt and that it was too small to be declared for taxation, hence, he just gave his share in the taxes to his uncle, Simplicio, in whose name the entire Lot 2344 was declared for taxation.33

The Court of Appeals correctly ruled that Lot 2344-C was sold by Simplicio Santiago to Mariano Santiago and Belen Sanchez. The document of sale evidencing the transaction is duly notarized and, as such, is considered a public document and enjoys the presumption of validity as to its authenticity and due execution. This legal presumption was not overcome by petitioners.34 Other than their allegation that the deed of sale was a forgery,35 no other evidence was presented to substantiate their claim. Hence, the presumption of validity of the deed of sale, ceding Lot 2344-C to Mariano Santiago and Belen Marcelo, prevails.

Furthermore, respondents’ assertion of ownership is buttressed by their possession of Lot 2344-C. Immediately after the sale in 1972, Mariano Santiago and Belen Sanchez built a house on the said lot. The lack of opposition on the part of petitioners, indicates that they recognized the validity of the sale and it was only later that they thought of repudiating the authenticity thereof.

Clearly, therefore, respondents are the lawful owners of Lot 2344-C and Lot 2344-A, which they co-own with Belen Marcelo. Free Patent No. 0130448 and OCT No. P-10878 are void not only because of the fraudulent inclusion therein of respondents’ lots, but also because Lot 2344 is a private lot, over which the Bureau of Lands had no jurisdiction.

Petitioners contend that respondents’ action to annul OCT No. P-10878 is barred by prescription and that, even assuming that it was filed within one year from the entry of the decree of registration, it constitutes a collateral attack on a Torrens title. Further, they averred that respondents have no personality to sue for the annulment of OCT No. P-10878.

The contentions are without merit.

A certificate of title issued under an administrative proceeding pursuant to a homestead patent covering a disposable public land within the contemplation of the Public Land Law or Commonwealth Act No. 141 is as indefeasible as a certificate of title issued under a judicial registration proceeding. Under the Land Registration Act, title to the property covered by a Torrens certificate becomes indefeasible after the expiration of one year from the entry of the decree of registration. Such decree of registration is incontrovertible and becomes binding on all persons whether or not they were notified of, or participated in, the in rem registration process. There is no specific provision in the Public Land Law or the Land Registration Act (Act 496), now Presidential Decree 1529, fixing a similar one-year period within which a public land patent can be considered open to review on the ground of actual fraud (such as that provided for in Section 38 of the

Land Registration Act, and now Section 32 of Presidential Decree 1529), and clothing a public land patent certificate of title with indefeasibility. Nevertheless, this Court has repeatedly applied Section 32 of Presidential Decree 1529 to a patent issued by the Director of Lands, approved by the Secretary of Natural Resources, under the signature of the President of the Philippines. The date of the issuance of the patent corresponds to the date of the issuance of the decree in ordinary cases. Just as the decree finally awards the land applied for registration to the party entitled to it, the patent issued by the Director of Lands equally and finally grants and conveys the land applied for to the applicant. 36

The one-year prescriptive period, however, does not apply when the person seeking annulment of title or reconveyance is in possession of the lot. This is because the action partakes of a suit to quiet title which is imprescriptible.37 In David v. Malay,38 we held that a person in actual possession of a piece of land under claim of ownership may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, and his undisturbed possession gives him the continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his title.

In the case at bar, inasmuch as respondents are in possession of the disputed portions of Lot 2344, their action to annul Original Certificate of Title No. P-10878, being in the nature of an action to quiet title, is therefore not barred by prescription.

Section 48 of P.D. 1529, the Property Registration Decree, provides that a certificate of title shall not be subject to collateral attack and can not be altered, modified, or canceled except in a direct proceeding. An action is an attack on a title when the object of the action is to nullify the title, and thus challenge the judgment or proceeding pursuant to which the title was decreed. The attack is direct when the object of an action is to annul or set aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment or proceeding is nevertheless made as an incident thereof.39

In this case, while the original complaint filed by the petitioners was for recovery of possession, or accion publiciana, and the nullity of the title was raised merely as respondents’ defense, we can rule on the validity of the free patent and OCT No. P-10878 because of the counterclaim filed by respondents. A counterclaim can be considered a direct attack on the title. In Development Bank of the Philippines v. Court Appeals,40 we ruled on the validity of a certificate of title despite the fact that

the nullity thereof was raised only as a counterclaim. It was held that a counterclaim is considered a complaint, only this time, it is the original defendant who becomes the plaintiff. It stands on the same footing and is to be tested by the same rules as if it were an independent action. Moreover, since all the facts necessary in the determination of the title’s validity are now before the Court, it would be in the best interest of justice to settle this issue which has already dragged on for 19 years.41

There is no merit in petitioners’ contention that only the State may bring an action for reconveyance of the lots in dispute. To reiterate, Lot 2344 is a private property in open, continuous, exclusive and notorious possession of the Santiago family. The nullification of its free patent and title would not therefore result in its reversion to the public domain. Hence, the State, represented by the Solicitor General, is not the real party in interest. Parenthetically, in Robles v. Court of Appeals,42 a case involving the personality to sue for the reconveyance of a private land, we ruled that inasmuch as there was no reversion of the disputed property to the public domain, the State is not the proper party to bring a suit for reconveyance.

It should be clarified, however, that notwithstanding the Court’s declaration that Lot No. 2344 is a private property and not a part of the public domain, the parties’ title to the said lot is imperfect and is still subject to the rules on confirmation of title under Section 48 (b) of the Public Land Act. Nevertheless, this imperfect title is enough to defeat the free patent and certificate of title issued over the said lot. Hence, the ruling of the Court of Appeals declaring the respondents as the absolute owners of Lot Nos. 2344-A and C; and declaring petitioners as absolute owners of Lot No. 2344-B, should be modified.

WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals in CA-G.R. CV No. 42761 is AFFIRMED with MODIFICATION. Patent No. 0130448 and Original Certificate of Title No. P-10878, both in the name of Simplicio Santiago are declared null and void. Respondent Heirs of Mariano Santiago are declared owners and holders of imperfect title over Lot No. 2344-A and Lot No. 2344-C; while petitioner Heirs of Simplicio Santiago are declared owners and holders of imperfect title over Lot No. 2344-B. Costs against petitioners.

SO ORDERED.

Davide, Jr., C.J., Vitug, Carpio, and Azcuna, JJ., concur.

Republic of the PhilippinesSUPREME COURTManila

SECOND DIVISION

G.R. No. 123586 August 12, 2004

SPOUSES BEDER MORANDARTE and MARINA FEBRERA, petitioners, vs.COURT OF APPEALS, REPUBLIC OF THE PHILIPPINES, and SPOUSES VIRGINIO B. LACAYA and NENITA LACAYA, respondents.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before us is a petition for review on certiorari under Rule 45 of the Rules of Court which seeks the reversal of the Decision,1 dated August 23, 1995, of the Court of Appeals (CA for brevity) in CA-G.R. CV No. 36258, affirming the Decision, dated November 5, 1991, rendered by the Regional Trial Court (Branch 7), Dipolog City, Zamboanga del Norte (RTC for brevity) in Civil Case No. 3890, declaring Free Patent No. (IX-8) 7852 and Original Certificate of Title No. P-21972, in the name of petitioner Beder Morandarte (Morandarte for brevity), and all its derivative titles, null and void ab initio.

The factual antecedents are as follows:

Morandarte filed an application for free patent, dated December 5, 1972, before the Bureau of Lands, Dipolog City District Land Office (BOL for brevity), covering a parcel of land located at Sta. Filomena, Dipolog City with an area of 4.5499 hectares and described as a portion of Lot 1038 of Dipolog Cadastre No. 85.3

On July 27, 1976, the District Land Officer of the BOL approved the free patent application of Morandarte and directed the issuance of a free patent in his favor.4 Accordingly, Free Patent No. (IX-8) 785 for Lot No. 7, Csd-09-05-00078-D was issued in the name of Morandarte. On September 20, 1976, the Register of Deeds of Zamboanga del Norte issued the corresponding Original Certificate of Title No. (P-21972) 5954.5

Subsequently, Morandarte caused a subdivision survey of the lot, dividing the same into Lot No. 6781-A, with an area of 13,939 square meters, and Lot No. 6781-B, with an area of 32,819 square meters. As a result of the subdivision survey, Transfer Certificates of Title Nos. T-1835 and T-1836 covering Lots 6781-A and 6781-B, respectively, were issued in favor of Morandarte on May 12, 1980 by the Registry of Deeds of Dipolog City.6

On May 22, 1981, Morandarte and his wife, Marina Febrera, executed a real estate mortgage over Lot 6781-B, subject of TCT No. 1836, in favor of the Development Bank of the Philippines, Dipolog City branch (DBP for brevity), in consideration of a loan in the amount ofP52,160.00.7

More than ten years after the issuance of the OCT in Morandarte's name, or on March 19, 1987, respondent Republic of the Philippines (Republic for brevity), represented by the Director of Lands, filed before the RTC a Complaint for Annulment of Title and Reversion against the Morandarte spouses, the Register of Deeds of Zamboanga del Norte, the Register of Deeds of Dipolog City, and DBP, docketed as Civil Case No. 3890.8

The Republic alleged that the BOL found that the subject land includes a portion of the Miputak River which cannot be validly awarded as it is outside the commerce of man and beyond the authority of the BOL to dispose of. It claimed that the Morandarte spouses deliberately and intentionally concealed such fact in the application to ensure approval thereof. Considering that the Morandarte spouses are guilty of fraud and misrepresentation in the procurement of their title, the Republic stressed that their title is void.9

The Register of Deeds of Dipolog City filed a Motion to Dismiss, dated April 7, 1987, praying for the dismissal of the complaint as against her since the complaint failed to state a claim against her.10

In their Answer dated April 13, 1987, the Morandarte spouses denied the allegations of the complaint and claimed that they were able to secure the title in accordance and in compliance with the requirements of the law. They alleged that the land is a portion of inherited property from Antonio L. Morandarte whose ownership thereof is covered by Tax Declaration No. 2296.

As regards the Miputak River, they argued that the river changed its course brought about by the fact that a portion of the Miputak River was leased by the Bureau of Fisheries (BOF for brevity) to a certain Aguido Realiza whose rights were subsequently transferred to Virginio Lacaya. They alleged that they indicated in their survey plan the actual location of the Miputak River in relation to the property but the BOL returned the survey with the directive that the existence of the river should not be indicated as the original survey did not show its existence, to which they complied with by submitting a new survey plan which did not indicate the existence of the river.

In the alternative, they alleged that inclusion of the Miputak River should not render the title void; only the portion of the property covered by the Miputak River should be nullified but their title to the remaining portion should be maintained.11

For its part, DBP filed its Answer dated April 13, 1987 praying for the dismissal of the complaint as against it since it had nothing to do with the issuance of the title to the spouses.12 DBP interposed a cross-claim against the spouses for the payment of their outstanding obligations.13 The Morandarte spouses filed an Answer to the Crossclaim dated April 29, 1987.14

No answer was filed by the Register of Deeds of Zamboanga del Norte.

On March 4, 1988, upon prior leave of court, herein respondent spouses Virginio B. Lacaya and Nenita Lacaya filed their Complaint-In-Intervention which alleged that they are holders of a fishpond lease agreement covering a fishpond area of about 5.0335 hectares, 1.2681 hectares of which have been included in the title issued to the Morandarte spouses. Considering that the land of the Morandarte spouses encroaches on the area leased to them, the Lacaya spouses submit that the former's title thereto is void.15

In their Answer to the complaint-in-intervention, dated March 19, 1988, the Morandarte spouses denied the allegations of the Lacaya spouses.16 They maintained that the portion of the fishpond originally belonged to Antonio L. Morandarte, their predecessor-in-interest, and the Lacaya spouses have never been in possession thereof but are actually squatters therein.

On the other hand, the Republic, in its Answer to the complaint-in-intervention, dated March 21, 1988, adopted the allegations of the complaint-in-intervention to further support its claim that the title of the Morandarte spouses is void.17 The Lacaya spouses filed their Reply and Answer on March 30, 1988, denying the arguments of the Morandarte spouses and reiterating the allegations in their complaint-in-intervention.18

Following trial on the merits, on November 5, 1992, the RTC rendered a Decision19 in favor of the Republic and the Lacaya spouses. The RTC declared that while fraud in the procurement of the title was not established by the State, Morandarte's title is, nonetheless, void because it includes a portion of the Miputak River which is outside the commerce of man and beyond the authority of the BOL to dispose of. In addition, the RTC sustained the fishpond rights of the Lacaya spouses over a portion included in Morandarte's title based on a Deed of Transfer of Fishpond Rights from Felipe B. Lacaya and a Fishpond Lease Agreement with the BOF.

The dispositive portion of the decision of the trial court reads:

WHEREFORE, judgment is hereby rendered:

1. Declaring null and void ab initio Free Patent No. (IX-5) (sic) 785 and Original Certificate of Title No. P-21972 in the name of Beder Morandarte, as well as all derivative titles issued thereafter;

2. Ordering defendants spouses Beder Morandarte and Marina Febrera to surrender their owner's duplicate copies of Transfer Certificate of Title Nos. T-1835 and T-1836, which were the derivative titles of Original Certificate of Title No. P-21972;

3. Directing the Register of Deeds of Zamboanga del Norte to cancel Original Certificate of Title No. P-21972 in the name of Beder Morandarte, and the Register of Deeds of Dipolog City to cancel Transfer

Certificate of Title Nos. T-1835 and T-1836 in the name of the same defendant;

4. Ordering the reversion of the land in question to the state, free from liens and encumbrances;

5. Enjoining defendants spouses Beder Morandarte and Marina Febrera from exercising any act of ownership or possession of the subject property;

6. Dismissing the Cross-Claim of defendant Development Bank of the Philippines against Cross Defendants Spouses Beder Morandarte and Marina Febrera, for being premature, but ordering the latter cross defendants to give a substitute security in favor of DBP as indicated in this decision;

7. Declaring valid and enforceable the Lease Agreement for a period of twenty five years over the fishpond area of Intervenors;

8. Denying Intervenors' prayer for damages against defendants-spouses Morandarte; and

9. Dismissing, for lack of merit, the counterclaim and prayer for damages of defendants spouses Morandarte against the Intervenors.

No costs against defendant-spouses Morandarte.

IT IS SO ORDERED.20

Dissatisfied, the Morandarte spouses appealed to the CA.21 In a Decision dated August 23, 1995, the CA affirmed the decision of the RTC,22 ratiocinating, as follows:

The present controversial Miputak River used to occupy the area adjacent to the northern and western boundaries of Lot No. 6781 Cad-85 (Exh. J). As time passed, it changed its course and occupies (sic) Lot No. 6781 Cad-85 (identical to Lot 7, Exh. H). This will explain Beder Morandarte's argument that when he applied for the Sales Patent Lot 7 (identical to Lot 6781), the original technical description did not show the Miputak River. But it is inescapable though, that while originally, Lot 6781

is not occupied by the river, at the time that the Sales Application was filed by Beder Morandarte, the Miputak River was actually occupying said Lot 6781 or Lot 7 covered by his Sales Application and the titles sought to be annulled in this case.

Rivers and their natural beds are undoubtedly properties of public dominion (Art. 502 par. 1, Civil Code of the Philippines). Whether navigable or not, rivers belong to the public and cannot be acquired by prescription (Com vs. Meneses, 38 O.G. 2839, Paras, Civil Code, p. 328, Vol. II, 12th Edition). In fact, a stream located within private land is still property of public dominion, even if the Torrens Title of the land does not show the existence of said stream (Talion vs. Sec. of Public Works and Highways, L-24281, May 16, 1967; Paras, supra).

Correspondingly, Art. 462 of the same Civil Code provides:

Art. 462. Whenever a river, changing its course by natural causes, opens a new bed through a private estate, this bed shall become of public dominion.

The rule is the same that even if the new bed is on private property. The bed becomes property of public dominion. Just as the old bed had been of public dominion before the abandonment, the new riverbed shall likewise be of public dominion (Hilario vs. City of Manila, L-19570, April 27, 1967).23

On October 10, 1995, the Morandarte spouses filed a motion for reconsideration.24 In its Resolution dated January 19, 1996, the CA found no justifiable cause or reason to modify or reverse its decision.25

Hence, the instant petition for review anchored on the following assigned errors:

A.

RESPONDENT COURT COMMITTED A GRAVE ERROR OF LAW IN APPLYING ARTICLE 462 OF THE CIVIL CODE TO THIS CASE WHEN THE CHANGE IN COURSE OF THE OLD MIPUTAK RIVER WAS NOT DUE TO NATURAL CAUSES BUT WAS ACCIDENTAL.

B.

ASSUMING ARGUENDO THAT THE CHANGE OF COURSE OF THE OLD MIPUTAK RIVER WAS DUE TO NATURAL CAUSE ONLY A PORTION OF THE SUBJECT PROPERTY OF PETITIONERS WAS AFFECTED THEREBY SO THAT THE TITLE OF PETITIONERS TO THE REMAINING PORTION IS VALID AND CANNOT BE NULLIFIED AS IT REMAINED PRIVATE PROPERTY.

C.

RESPONDENT COURT GRAVELY ERRED IN ORDERING THE REVERSION OF LOT 7, CSD-09-05-00078-D TO THE PUBLIC DOMAIN.

D.

RESPONDENT COURT GRAVELY ERRED IN NOT DECLARING AS NULL AND VOID THE LEASE AGREEMENT EXECUTED IN FAVOR OF INTERVENORS.

E.

RESPONDENT COURT GRAVELY ERRED IN NOT DISMISSING THE COMPLAINT CONSIDERING THAT NO FRAUD OR MISREPRESENTATION WAS EMPLOYED BY THE SPOUSES MORANDARTE IN OBTAINING THE TITLE.26

The Morandarte spouses emphatically argue that the CA failed to take into consideration the true state of the present Miputak River in relation to Lot 7. They contend that the Miputak River changed its course due to the closure of the river bed through the construction of dikes by the Lacaya spouses, forcing the river to be diverted into Lot 6781-B. Thus, they submit that the applicable provision is Article 77 of the Law of Waters, which provides that "[l]ands accidentally inundated by the waters of lakes, or by creeks, rivers and other streams shall continue to be the property of their respective owners."

Furthermore, they staunchly claim that the Miputak River does not actually correspond to Lot 7. The Miputak River occupies only 12,162 square meters of Lot 7 which has an area of 45,499 square meters. Also, they insist that the lower courts made capital, albeit erroneously, of their agreement to a reversion. The reversion agreed to refers only to the 12,162 square meters portion covered by the Miputak River, which should be voided, while the portion unaffected by the Miputak River is valid and their title thereto should be maintained and respected.

Moreover, they vigorously contend that the CA erred in sustaining the validity of fishpond rights of the Lacaya spouses. They aver that the Lacaya spouses violated the terms of the lease agreement by constructing dikes for the fishponds which caused the Miputak River to traverse the property of the Morandarte spouses.

Prefatorily, it must be stated that in petitions for review on certiorari, only questions of law may be raised by the parties and passed upon by this Court.27 Factual findings of the trial court, when adopted and confirmed by the CA, are binding and conclusive upon the Supreme Court and generally will not be reviewed on appeal.28 Inquiry upon the veracity of the CA's factual findings and conclusion is not the function of the Supreme Court for the Court is not a trier of facts.29

While this Court has recognized several exceptions to this rule, to wit: (1) when the findings are grounded entirely on speculation, surmises, or conjectures; (2) when the inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making its findings, the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion,30none of these exceptions find application here.

A complaint for reversion involves a serious controversy, involving a question of fraud and misrepresentation committed against the government and it seeks the return of the disputed portion of the public domain. It seeks to cancel the original certificate of registration, and nullify the original certificate of title, including the transfer certificate of title of the successors-in-interest because the same were all procured through fraud and misrepresentation.31

The State, as the party alleging that fraud and misrepresentation attended the application for free patent, bears the burden of proof. The circumstances evidencing fraud and misrepresentation are as varied as the people who perpetrate it in each case. It assumes different shapes and forms and may be committed in as many different ways.32 Therefore, fraud and misrepresentation are never presumed

but must be proved by clear and convincing evidence;33 mere preponderance of evidence not even being adequate.34

In this case, the State failed to prove that fraud and misrepresentation attended the application for free patent. The RTC, in fact, recognized that no fraud attended the application for free patent35 but declared reversion based on the judicial admission of the Morandarte spouses that reversion is warranted due to the inalienability of the Miputak River. Ordinarily, a judicial admission requires no proof and a party is precluded from denying it except when it is shown that such admission was made through palpable mistake or that no such admission was made.36 In this case, the exception finds application since the records lay bare that such admission was made through mistake and not in the context it was considered. As reflected in the Order dated May 25, 1998,37 the Morandarte spouses essentially agreed only to a reconveyance of the portion covering the Miputak River. Undoubtedly, such acquiescence to return the portion covering the Miputak River is not, and cannot be considered, an admission that fraud and misrepresentation attended the application for free patent. This fact, standing alone, does not prove fraud and misrepresentation.

Besides, it is undisputed that the original survey plan submitted by Morandarte to the BOL reflected the true state of the Miputak River in Lot 1038 but the BOL did not approve the plan because a 1916 survey did not so indicate the existence of a river traversing Lot 1038 such that Morandarte was directed to submit an amended plan deleting the existence of the Miputak River. This mothered the subsequent error of the BOL of approving the amended plan as CAS-09-05-000078-D.

This error could have been discovered through a thorough ocular inspection of the property claimed under the free patent application. However, Aurelio F. Bureros, Hearing Officer I of the BOL, surprisingly failed to notice the existence of the river traversing Lot 1038 in the field investigation he conducted on January 10, 1976.38

Neither did Bureros note the 13,339 square meter portion already covered by an existing fishpond lease agreement granted by the BOF in favor of Felipe B. Lacaya, the predecessor-in-interest of the Lacaya spouses.39

The records reveal that as early as 1948, 4.6784 hectares40 of the public land have been leased for fishpond purposes. Aguido S. Realiza was the initial grantee of a fishpond lease agreement.41 Amor A. Realiza, Aguido's son, acquired his fishpond permit on May 29, 1953.42Amor A. Realiza transferred his fishpond rights to Felipe B. Lacaya on May 14, 1956.43 By 1960, the public land leased for fishpond purposes had increased to 5.0335 hectares.44 Felipe B. Lacaya transferred his fishpond rights

to Virgilio B. Lacaya on October 25, 1977.45Thus, the fishpond rights have been in existence since 1948, prior to the 1972 free patent application of Morandarte.

Regardless of the foregoing, Aurelio F. Bureros, concluded that Morandarte is a qualified applicant and recommended that a free patent be granted to him. This error culminated in the erroneous grant of a free patent on July 27, 1976 covering the Miputak River and land subject of the fishpond rights of Felipe B. Lacaya.46

Be that as it may, the mistake or error of the officials or agents of the BOL in this regard cannot be invoked against the government with regard to property of the public domain. It has been said that the State cannot be estopped by the omission, mistake or error of its officials or agents.47

It is well-recognized 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 Director of Lands did not have jurisdiction over the same because it is a public domain, the grantee does not, by virtue of the said certificate of title alone, become the owner of the land or property illegally included.48 Otherwise stated, property of the public domain is incapable of registration and its inclusion in a title nullifies that title.49

The present controversy involves a portion of the public domain that was merely erroneously included in the free patent. A different rule would apply where fraud is convincingly shown. The absence of clear evidence of fraud will not invalidate the entire title of the Morandarte spouses.

Accordingly, the 12,162-square meter portion traversed by the Miputak River and the 13,339-square meter portion covered by the fishpond lease agreement of the Lacaya spouses which were erroneously included in Free Patent No. (IX-8) 785 and Original Certificate of Title No. P-21972 should be reconveyed back to the State.

The Morandarte spouses cannot seek refuge in their claim that Antonio A. Morandarte, their predecessor-in-interest, was already the owner of that portion of Lot 1038 when the fishpond application of Aguido S. Realiza was approved in 1948 because Lot 1038 was still part of the public domain then. It was only in 1972, through Forestry Administrative Order No. 4-1257, which was approved August 14, 1972, when Lot 1038 was declared alienable or disposable property of the State.50

It is a settled rule that unless a public land is shown to have been reclassified as alienable or actually alienated by the State to a private person, that piece of land

remains part of the public domain. Hence, Antonio A. Morandarte's occupation thereof, however long, cannot ripen into private ownership.51

The Morandarte spouses also unsuccessfully harp on the inapplicability of Article 462 of the Civil Code by claiming that the change of course of the Miputak River was due to a man-made cause and not by natural means. They offered no iota of evidence to substantiate this claim, other than the bare testimony of Beder Morandarte. Neither is there proof that the movement of the river was caused by accident or calamity, such as a typhoon, and not by the natural movements thereof. General statements, which are mere conclusions of law and not proofs, are unavailing and cannot suffice.

Besides, at the time of the filing of the application for free patent in 1972, a portion of the Miputak River was already in its present course, traversing Lot 1038, particularly Lot 7 of the amended plan submitted by Morandarte.

We need not delve on the question of whether the Lacaya spouses violated the terms of the fishpond lease agreement. It is not material in this case in the sense that it was not made an issue by the parties. Neither is there evidence to corroborate the bare allegation of petitioners that the Lacaya spouses constructed dikes for the fishponds which caused the Miputak River to traverse Lot 7. What is significant here is the established fact that there was an existing fishpond lease agreement between Felipe Lacaya and the Bureau of Fisheries at the time of Morandarte's application for free patent; in effect, proving that the area covering the fishpond belongs to the Government and petitioners have no rights thereto.

In closing, we cannot but decry the carelessness of the BOL in having issued the Free Patent in Morandarte's favor which covered the Miputak River and the fishpond rights of Felipe B. Lacaya. Surely, a more diligent search into their records and thorough ocular inspection of Lot 7 would have revealed the presence of the Miputak River traversing therein and an existing fishpond right thereon. Had more vigilance been exercised by the BOL, the government agency entrusted specifically with the task of administering and disposing of public lands, the present litigation could have been averted.

WHEREFORE, the petition is partly GRANTED. The assailed Decision of the Court of Appeals, dated August 23, 1995, in CA G.R. No. 36258 is REVERSED insofar only as it affirmed the nullity of Free Patent No. (IX-8) 785 and Original Certificate of Title No. P-21972, in the name of petitioner Beder Morandarte. In its stead, petitioners Spouses Beder Morandarte and Marina Febrera are directed to reconvey to the respondent Republic of the Philippines within thirty (30) days from the finality of

this Decision the 12,162-square meter portion traversed by the Miputak River and the 13,339-square meter portion covered by the fishpond lease agreement of the Lacaya spouses. No pronouncement as to costs.

SO ORDERED.

Puno, (Chairman), Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Baguio City

THIRD DIVISION

G.R. No. 173365 April 15, 2010

JULIO FLORES (deceased), substituted by his heirs; BENITO FLORES (deceased), substituted by his heirs; DOLORES FLORES and VIRGINIA FLORES-DALERE, represented by their Attorney-in-Fact, JIMENA TOMAS, Petitioners, vs.MARCIANO BAGAOISAN, Respondent.

D E C I S I O N

NACHURA, J.:

Petitioners seek a review of the March 29, 2006 Decision1 and the June 20, 2006 Resolution of the Court of Appeals (CA), denying their motion for reconsideration.

The case involves a 13,552-square meter portion of a parcel of land covered by Original Certificate of Title (OCT) No. P-118802 in the name of the Heirs of Victor Flores, namely: Julio, Benito, Dolores, and Virginia, herein petitioners. OCT No. P-11880 was issued pursuant to Homestead Patent No. 138892, given on November 12, 1973. This property is located in the Municipality of Piddig, Ilocos Norte.

On December 20, 1976, petitioners, together with their mother Luisa Viernes, executed a Deed of Confirmation and Quitclaim3 in favor of Vicente T. Lazo. Through this document, petitioners agreed to "sell, cede, convey, grant, and transfer by way of QUITCLAIM" the subject property to Lazo. Thereafter, respondent, Marciano Bagaoisan, bought the subject property from Lazo, as evidenced by a Deed of Absolute Sale dated February 20, 1977.4

On April 4, 1983, Viernes and petitioner Virginia Flores-Dalere executed a Palawag A Nasapataan (Affidavit), attesting to the fact that they conveyed to Lazo the subject property through the Deed of Confirmation and Quitclaim. Affiants also

attested that Lazo and his predecessors-in-interest had been in possession of the disputed portion since 1940 and that the same was mistakenly included in the patent application of Victor Flores.

On June 21, 1996, respondent filed an action for ownership, quieting of title, partition and damages against petitioners, praying that he be declared as the true owner of the subject property and that the entire property covered by OCT No. P-11880 be partitioned among them. In the Complaint, respondent asserted that he was a tenant of Lazo and that he had been working on the subjec0t property since time immemorial. He said that, since he bought the property in 1977, he possessed the land as owner and paid real property tax thereon. He claimed that the subject property was erroneously covered by OCT No. P-11880 and that petitioners have previously recognized such fact, considering that they executed an affidavit acknowledging the erroneous inclusion of the property in their title. He averred that, lately, petitioners had denied his ownership of the land and asserted their ownership thereof by working and harvesting the crops thereon.5

In answer, petitioners stated that they did not relinquish ownership or possession of the land to Lazo. While admitting that they executed the Deed of Confirmation and Quitclaim in favor of Lazo, petitioners claimed that they were misled into signing the same, with Lazo taking advantage of their lack of education. Petitioners contended that it was too late for respondent to assert title to the disputed portion because the title covering the same had already become indefeasible one year after it was issued.6

On February 3, 2000, the Regional Trial Court rendered a decision, disposing as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered ordering the defendants, jointly and severally:

1. To recognize plaintiff Marciano Bagaoisan as owner of the 13,552 sq.m. parcel of land situated in Barrio Maab-abucay (now Estancia) Municipality of Piddig, Ilocos Norte;

2. To cease and desist from further possession of said parcel of land and to immediately reconvey the same to plaintiff;

3. To pay said plaintiff such amount as would be the peso equivalent of 100 cavanes of palay per year, for the loss of harvest he incurred in 1994,

1995, 1996, 1997, 1998 and 1999, computed as the price then obtaining in said years; and

4. To pay plaintiff the amount of P20,000.00 as reasonable attorney’s fees.

No pronouncement as to costs.

SO ORDERED.7

On appeal, the CA upheld the validity of the Deed of Confirmation and Quitclaim. In light of petitioners’ admission that they signed the deed after it was read to them, the CA dismissed their assertion that they did not know the contents of the document. It further declared that the deed merely confirmed petitioners’ non-ownership of the subject property and it did not involve an alienation or encumbrance. Accordingly, it concluded that the five-year prohibition against alienation of a property awarded through homestead patent did not apply.

The CA likewise rejected petitioners’ contention that the action was barred by prescription or laches. Citing Vital v. Anore,8 the CA held that where the registered owner knew that the property described in the patent and the certificate of title belonged to another, any statute barring an action by the real owner would not apply, and the true owner might file an action to settle the issue of ownership.

The dispositive portion of the assailed March 29, 2006 Decision reads:

WHEREFORE, the appeal is hereby DISMISSED for lack of sufficient merit. The assailed 3 February 2000 decision by the Regional Trial Court, Laoag City, in Civil Case No. 11048-14 is hereby AFFIRMED.

SO ORDERED.9

The CA likewise denied petitioners’ motion for reconsideration in its Resolution dated June 20, 2006.10

Consequently, petitioners filed this petition for review, insisting that the Deed of Confirmation and Quitclaim is void as its contents were not fully explained to them, and it violates Section 118 of the Public Land Act (Commonwealth Act No. 141), which prohibits the alienation of lands acquired through a homestead patent.

The petition is meritorious.

Without going into petitioners’ allegation that they were unaware of the contents of the Deed of Confirmation and Quitclaim, we nonetheless hold that the deed is void for violating the five-year prohibitory period against alienation of lands acquired through homestead patent as provided under Section 118 of the Public Land Act, which states:

Sec. 118. Except in favor of the Government or any of its branches, units, or institutions, lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent and grant, nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period, but the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations.

No alienation, transfer, or conveyance of any homestead after five years and before twenty-five years after the issuance of title shall be valid without the approval of the Secretary of Agriculture and Commerce, which approval shall not be denied except on constitutional and legal grounds.

We do not agree with the CA that the Deed of Confirmation and Quitclaim merely "confirmed" petitioners’ non-ownership of the subject property. The deed uses the words "sell," "cede," "convey," "grant," and "transfer." These words admit of no other interpretation than that the subject property was indeed being transferred to Lazo.

The use of the words "confirmation" and "quitclaim" in the title of the document was an obvious attempt to circumvent the prohibition imposed by law. Labeling the deed as a confirmation of non-ownership or as a quitclaim of rights would actually make no difference, as the effect would still be the alienation or conveyance of the property. The act of conveyance would still fall within the ambit of the prohibition. To validate such an arrangement would be to throw the door open to all possible fraudulent subterfuges and schemes that persons interested in land given to a homesteader may devise to circumvent and defeat the legal provisions prohibiting their alienation within five years from the issuance of the patent.11

It bears stressing that the law was enacted to give the homesteader or patentee every chance to preserve for himself and his family the land that the State had

gratuitously given to him as a reward for his labor in cleaning and cultivating it.12 Its basic objective, as the Court had occasion to stress, is to promote public policy, that is to provide home and decent living for destitutes, aimed at providing a class of independent small landholders which is the bulwark of peace and order.13 Hence, any act which would have the effect of removing the property subject of the patent from the hands of a grantee will be struck down for being violative of the law.

To repeat, the conveyance of a homestead before the expiration of the five-year prohibitory period following the issuance of the homestead patent is null and void and cannot be enforced, for it is not within the competence of any citizen to barter away what public policy by law seeks to preserve.14 There is, therefore, no doubt that the Deed of Confirmation and Quitclaim, which was executed three years after the homestead patent was issued, is void and cannot be enforced.1avvphi1

Furthermore, respondent failed to present sufficient evidence to surmount the conclusiveness and indefeasibility of the certificate of title.

An OCT issued on the strength of a homestead patent partakes of the nature of a certificate issued in a judicial proceeding and becomes indefeasible and incontrovertible upon the expiration of one year from the date of the promulgation of the Director of Lands’ order for the issuance of the patent.15 After the lapse of such period, the sole remedy of a landowner, whose property has been wrongfully or erroneously registered in another’s name is to file an action for reconveyance so long as the property has not passed to an innocent purchaser for value.16 In order that an action for reconveyance based on fraud may prosper, it is essential for the party seeking reconveyance to prove, by clear and convincing evidence, his title to the property and the fact of fraud.17

Respondent did not allege in his complaint or prove during the trial that fraud attended the registration of the subject property in petitioners’ names. In fact, there was no allegation as to how petitioners were able to secure title to the property despite the alleged ownership of respondent’s predecessor.

More importantly, respondent failed to prove that he has title to the subject property. He merely asserted that his predecessors-in-interest had been in possession of the property since 1940. The basic presumption is that lands of whatever classification belong to the State and evidence of a land grant must be "well-nigh incontrovertible." The Public Land Act requires that the possessor or his predecessors-in-interest must be in open, continuous, exclusive, and notorious possession and occupation of the land for at least thirty years. When these

conditions are complied with, the possessor is deemed to have acquired, by operation of law, a right to a government grant, without the necessity of a certificate of title being issued. The land ceases to be a part of the public domain and beyond the authority of the Director of Lands,18 such that the latter would have no more right to issue a homestead patent to another person.

Respondent merely established that he had been in possession of the property and that he had been paying real property taxes thereon since 1977. The only evidence on record attesting to the fact that respondent and his predecessors-in-interest had been in possession of the property since 1940 was the affidavit executed by some of petitioners. This, however, would not suffice.

In closing, it would be well to mention that the execution of the Deed of Confirmation and Quitclaim within the five-year prohibitory period also makes the homestead patent susceptible to cancellation, and the subject property being reverted to the public domain.19 It is the Solicitor General, on behalf of the government, who is by law mandated to institute an action for reversion.20 Should the Solicitor General decide to file such an action, it is in that action that petitioners’ defenses, particularly their alleged lack of knowledge of the contents of the deed, will have to be resolved.

WHEREFORE, the petition is GRANTED. The March 29, 2006 Decision of the Court of Appeals and its June 20, 2006 Resolution are REVERSED and SET ASIDE. The complaint for ownership, quieting of title and damages is DISMISSED, without prejudice to an action for reversion that the Solicitor General may decide to file for the State.

SO ORDERED.

ANTONIO EDUARDO B. NACHURAAssociate Justice