G.R. No. 107967 March 1, 1994
CONSORCIA TENIO-OBSEQUIO, ORLANDO OBSEQUIO,
and MANUEL, REGINA, TUNAY and MELITON, all
surnamed OBSEQUIO, petitioners,
vs.
COURT OF APPEALS, EUFRONIO ALIMPOOS, and
PONCIANA ALIMPOOS respondents.
Estanislao G. Ebarle for petitioners.
Generoso S. Sansaet for private respondents.
REGALADO, J.:
This petition for review on certiorari seeks to annul and set
aside the decision of the Court of Appeals in CA-G.R. CV No.
22990, dated July 9, 1992, which reversed the judgment of the
trial court, as well as its resolution of November 6, 1992
denying the motion for reconsideration of its aforesaid
decision.
The subject matter of the present petition is a parcel of land,
designated as Lot No. 846, Pls-225 located at Andanan,
Baguyan, Agusan del Sur. This lot was previously covered by
Original Certificate of Title No. P-1181 registered in the name
of herein respondent Eufronio Alimpoos and which he acquired
through a homestead application.1 The said land is now
registered in the name of herein petitioner, Consorcia TenioObsequio, as evidence by Transfer Certificate of Title No.
T-1421.2
In their answer, the heirs of Eduardo Deguro claimed that
respondent Alimpoos spouses sold the land to their late
parents on June 25, 1965 for a consideration of P10,000.00, as
evidenced by the deed of absolute sale; that as a result
thereof, Transfer Certificate of Title No. T-1360 was issued in
favor of their parents, that on April 23, 1970, after the death of
their parents, they sold the said land to Consorcia TenioObsequio; that on September 22, 1970, a new Transfer
Certificate of Title No. 1421 was issued in the name of the
latter. Consorcia Tenio-Obsequio, on the other hand, maintains
that she purchased the land in question from the heirs of
Deguro in good faith, for valuable consideration and without
knowledge of any flaw or defect whatsoever.
The trial court, giving credence to the evidence presented by
herein petitioners, defendants therein, ruled in their favor and
rendered judgment disposing as follows:
1) dismissing the herein complaint;
2) declaring defendant Consorcia Tenio Obsequio as the true
and absolute owner of the land in litis;
3) ordering plaintiffs to pay P10,000.00 by way of moral
damages;
4) ordering plaintiffs to pay P10,000.00 by way of exemplary
damages;
5) ordering plaintiffs to pay the expenses of litigation in the
amount of P5,000.00;
6) ordering plaintiffs to pay (a)ttorney's fees in the amount of
P5,000.00; and
7) to pay the costs.
On September 10, 1986, private respondents filed a complaint
in the court a quo against herein petitioners Consorcia Tenio
and her husband, Orlando Obsequio, and the heirs of Eduardo
Deguro for recovery of possession and ownership, alleging that
sometime in 1964, they mortgaged the land to Eduardo Deguro
for P10,000.00; that to guaranty the loan they delivered to the
latter the original certificate of title to the land; that in the
meantime, they continued to cultivate the same and, at the end
of the harvest season, they gave two-thirds (2/3) of the harvest
to Eduardo Deguro; that on June 25, 1965, Eduardo Deguro
and his wife, without the knowledge and consent of herein
private respondents, prepared a document of sale and through
misrepresentation and other manipulations made it appear that
private respondents sold the land to them.
This deed of sale was annotated at the back of the said
certificate of title as Entry No. 16007. By virtue thereof, Original
Certificate of Title No. P-1181 in the name of Eufronio Alimpoos
was cancelled and Transfer Certificate of Title No. T-1360 was
correspondingly issued in favor of Eduardo Deguro. After the
death of Eduardo Deguro, his heirs sold the land to Consorcia
Tenio-Obsequio. On September 22, 1970, Transfer Certificate
of Title No. T-1421 was issued in her name. It was allegedly
only in 1982, when Eufronio Alimpoos received a Certificate of
Agricultural Leasehold of his land from the Department of
Agrarian Reform (DAR), that he learned that the land was
already titled in the name of another.
In like manner, the money deposited in the Municipal
Treasurer's Office of Bayugan in the amounts of P2,724.95
covered by Official Receipt No. 0442623 dated September 7,
1988 and P1,658.10 covered by Official Receipt No. 5497715
dated September 14, 1988, as well as the sum of P3,927.00
deposited in Court pursuant to the Court's Orders of January
16, 1987 and March 13, 1987, consisting of the proceeds from
the sale of the harvest taken from the area involved, is
awarded to defendant Consorcia Tenio Obsequio, is owner
thereof after deducting the necessary expenses and Clerk of
Court (s) commission fee.3
On appeal, respondent Court of Appeals reversed the decision
of the lower court and rendered judgment:
1) Declaring the plaintiff Eufronio Alimpoos as the true and
legal owner of the property subject of this case;
2) Declaring null and void the Deed of Absolute Sale marked
as Annex "C" or exhibit "D" and ordering the cancellation of
TCT Nos.
T-1360 and T-1421 in the names of Eduardo Deguro and
Consorcia Tenio Obsequio, respectively;
3) Ordering the heirs of Eduardo Deguro and Laureana
Rabuya, namely, Gonzalo Deguro, Manuel Deguro, Tunay
Deguro and Regina Deguro to reconvey the said property to
the plaintiffs:
4) Ordering the Register of Deeds to cancel the annotation of
the Deed of Absolute Sale at the back of TCT P-1181 in favor
of Consorcia Tenio Obsequio and to clear said TCT of all
encumbrances executed by Eduardo Deguro and/or his heirs.
In addition, the defendants are ordered to pay the plaintiffs,
jointly and severally, the sum of P50,000.00 bay way of moral
damages; P30,000.00 by way of compensatory damages and
P5,000.00 by way of attorney's fees and costs of litigation.4
Petitioners then filed a motion for reconsideration of the said
decision which was denied by the Court of Appeals in its
resolution dated November 6, 1992,5 hence the instant
recourse by petitioners.
After a careful review of the records of this case and the legal
consideration applicable to the proven facts thereof, we find
the petition at bar to be meritorious. Reconveyance of the land
in question to the original owner is not in order.
Herein respondent Alimpoos, as the original owner of the said
land, is assailing the title of petitioner on the ground that their
original certificate of title over the said land was cancelled by
virtue of a forged deed of absolute sale.
Under Section 55 the Land Registration Act, as amended by
Section 53 of Presidential Decree No. 1529, an original owner,
of registered land may seek the annulment of a transfer thereof
on the ground of fraud. However, such a remedy is without
prejudice to the rights of any innocent holder for value with a
certificate of title.A purchaser in good faith and for value is one who buys the
property of another, without notice that some other person has
a right to or interest in such property, and pays a 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 person in the
property6 In consonance with this accepted legal definition,
petitioner Consorcia Tenio-Obsequio is a purchaser in good
faith. There is no showing whatsoever nor even an allegation
that herein petitioner had any participation, voluntarily or
otherwise, in the alleged forgery.
Nor can we charge said petitioner with negligence since, at the
time of the sale to her, the land was already registered in the
name of Eduardo Deguro7 and the tax declaration was also
issued in the latter's name.8 It was also clearly indicated at the
back of the original certificate of title that Eduardo Deguro
acquired ownership over the said land by virtue of the deed of
sale executed in his favor.9 In fact, it is not disputed that one of
his heirs was actually residing therein. 10 There is no
annotation, defect or flaw in the title that would have aroused
any suspicion as to its authenticity. Such being the case,
petitioner has the right to rely on what appears on the face of
the certificate of title.
The main purpose of the Torrens system is to avoid possible
conflicts of title to real estate and to facilitate transactions
relative thereto by giving the public the right to rely upon the
face 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. 11
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 total
cancellation of the certificate. The effect of such an outright
cancellation would be to impair public confidence in the
certificate of title, for everyone dealing with property registered
under the Torrens system would have to inquire in every
instance as to whether the title has been regularly or irregularly
issued by the court. Every person dealing with registered land
may safely rely on the correctness of the certificate of title
issued therefor and the law will in no way oblige him to go
beyond the certificate to determine the condition of property.12
The Torrens system was adopted in this country because it
was believed to be the most effective measure to guarantee
the integrity of land titles and to protect their indefeasibility
once the claim of ownership is established and recognized. If a
person purchases a piece of land on the assurance that the
seller's title thereto is valid, he should not run the risk of being
told later that his acquisition was ineffectual after all. This
would not only be unfair to him. What is worse is that if this
were permitted, public confidence in the system would be
eroded and land transactions would have to be attended by
complicated and not necessarily conclusive investigations and
proof of ownership. The further consequence would be that
land conflicts could be even more numerous and complex than
they are now and possibly also more abrasive, if not even
violent. The Government, recognizing the worthy purposes of
the Torrens system, should be the first to accept the validity of
titles issued thereunder once the conditions laid down by the
law are satisfied.13
Moreover, there is no reason to doubt the authenticity of the
deed of sale which constituted the basis for the issuance of the
transfer certificate of title in the name of Eduardo Deguro,
considering that not only was the contract notarized but that it
was also approved by the Secretary of Agriculture and Natural
Resources in compliance with Section 118 of the Public Land
Act. 14
There is no indubitable, legal and convincing reason for
nullifying the deed of sale. Herein private respondents have not
presented any cogent, complete and convincing proof to
override the evidentiary value of the duly notarized deed of
sale. A notarial document is evidence of the facts in the 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. 15
The fact alone that the signature of private respondent
Eufronio Alimpoos appearing on the deed of sale of Deguro
differs in certain points from his signature appearing in the
"Kasabutan sa Prenda" is not enough to warrant the
conclusion that the signature in said deed of sale is not
genuine. The records show that the signatures of private
respondent Eufronio Alimpoos in one of the cash advance
receipts 16 and in the notice of the trial court's order dated
March 4, 1988 17 are similar to the signature appearing in the
deed of sale. It is, therefore, not improbable that, as claimed by
herein petitioners, private respondent could have deliberately
and purposely altered their signatures on the mortgage
contract to thereafter make it appear that a discrepancy
actually exists.
Forgery cannot be presumed; it must be proved by clear,
positive and convincing evidence. Those who make the
allegation of forgery have the burden of providing it since a
mere allegation is not evidence. 18 Private respondents in this
case ruefully failed to substantiate with sufficient evidence their
claim that their signatures appearing on the deed of sale were
forged.
At any rate, there are several reasons to doubt the authenticity
of the "Kasabutan sa Prenda." Firstly, it has not been
sufficiently explained why, although it should normally be with
the mortgagee, the original mortgage contract remained in the
possession of the mortgagor and it was only after the death of
the alleged mortgagee that the same was presented, which
was more than twenty years from the date of its alleged
execution. Secondly, the consideration of P10,000.00 for a
mortgage in 1964 of a piece of rural land consisting of only
81,882 square meters, with the mortgagee paying the taxes
thereon, is too high or excessive, considering that the same
piece of land was coetaneously mortgaged with the
Development Bank of the Philippine for only P1,900.00. 19
Thirdly, the texture of the paper on which it was written and the
clarity of the writing show that the document, supposedly
executed on July 25, 1964, is of recent vintage and could not
be more than twenty years old, even as of this late date. 20
Yet, even on the implausible assumption, ex gratia argumenti,
that the deed of sale in favor of Eduardo Deguro was forged
and is, therefore, null and void, such fact cannot be
successfully invoked to invalidate the title subsequently issued
to herein petitioner who, as earlier stated, is an innocent
purchaser for value and in good faith.
It has been consistently ruled that a forged deed can legally be
the root of a valid title when an innocent purchaser for value
intervenes. 21 A deed of sale executed by an impostor without
the authority of the owner of the land sold is a nullity, and
registration will not validate what otherwise is an invalid
document. However, where the certificate of title was already
transferred from the name of the true owner to the forger and,
while it remained that way, the land was subsequently sold to
an innocent purchaser, the vendee had the right to rely upon
what appeared in the certificate and, in the absence of
anything to excite suspicion, was under no obligation to look
beyond the certificate and investigate the title of the vendor
appearing on the face of said certificate.22
The Torrens Act, in order to prevent a forged transfer from
being registered, erects a safeguard by requiring that no
transfer shall be registered unless the owner's certificate of title
is produced along with the instrument of transfer. However, an
executed document of transfer of registered land placed by the
registered owner thereof in the hands of another operates as a
representation to a third party that the holder of the document
of transfer is authorized to deal with the land. 23 In the case at
bar, it was even private respondents who made the allegation
that they further delivered their certificate of title to Eduardo
Deguro, allegedly to secure the loan extended to them.
Consequently, petitioner cannot be faulted and, as a matter of
fact, she is vested with the right to rely on the title of Eduardo
Deguro.
Furthermore, it was the very act of the respondent Alimpoos
spouses in entrusting their certificate of title to Eduardo Deguro
that made it possible for the commission of the alleged fraud, if
indeed there was such a fraudulent conduct as imputed to the
latter. Hence, the rule of law and justice that should apply in
this case is that as between two innocent persons, one of
whom must suffer the consequences of a breach of trust, the
one who made it possible by his act of confidence must bear
the loss.24
The right of the innocent purchaser for value must be
respected and protected, even if the seller obtained his title
through fraud. The remedy of the person prejudiced is to bring
an action for damages against those who caused or employed
the fraud, and if the latter are insolvent, an action against the
Treasurer of the Philippines may be filed for recovery of
damages against the Assurance Fund.25
It is also significant and worth noting that herein respondents
filed the instant complaint only after twenty-two years from the
execution of the supposedly forged deed of absolute sale, and
after sixteen years from the date the title was transferred in the
name of herein petitioner. An action for reconveyance is a legal
remedy granted to a landowner whose property has been
wrongfully or erroneously registered in another's name, but
then the action must be filed within ten years from the issuance
of the title since such issuance operates as a constructive
notice.26
WHEREFORE, the decision and resolution of respondent court
now under review are hereby REVERSED and the decision of
the court a quo is accordingly REINSTATED.
SO ORDERED.
G.R. No. L-8936
October 2, 1915
CONSUELO LEGARDA, with her husband MAURO
PRIETO, plaintiffs-appellants,
vs.
N.M. SALEEBY, defendant-appellee.
Singson, Ledesma and Lim for appellants.
D.R. Williams for appellee.
JOHNSON, J.:
From the record the following facts appear:
First. That the plaintiffs and the defendant occupy, as owners,
adjoining lots in the district of Ermita in the city of Manila.
Second. That there exists and has existed a number of years a
stone wall between the said lots. Said wall is located on the lot
of the plaintiffs.
Third. That the plaintiffs, on the 2d day of March, 1906,
presented a petition in the Court of Land Registration for the
registration of their lot. After a consideration of said petition the
court, on the 25th day of October, 1906, decreed that the title
of the plaintiffs should be registered and issued to them the
original certificate provided for under the torrens system. Said
registration and certificate included the wall.
Fourth. Later the predecessor of the defendant presented a
petition in the Court of Land Registration for the registration of
the lot now occupied by him. On the 25th day of March, 1912,
the court decreed the registration of said title and issued the
original certificate provided for under the torrens system. The
description of the lot given in the petition of the defendant also
included said wall.
Fifth. Several months later (the 13th day of December, 1912)
the plaintiffs discovered that the wall which had been included
in the certificate granted to them had also been included in the
certificate granted to the defendant .They immediately
presented a petition in the Court of Land Registration for an
adjustment and correction of the error committed by including
said wall in the registered title of each of said parties. The
lower court however, without notice to the defendant, denied
said petition upon the theory that, during the pendency of the
petition for the registration of the defendant's land, they failed
to make any objection to the registration of said lot, including
the wall, in the name of the defendant.
Sixth. That the land occupied by t he wall is registered in the
name of each of the owners of the adjoining lots. The wall is
not a joint wall.
Under these facts, who is the owner of the wall and the land
occupied by it?
The decision of the lower court is based upon the theory that
the action for the registration of the lot of the defendant was a
judicial proceeding and that the judgment or decree was
binding upon all parties who did not appear and oppose it. In
other words, by reason of the fact that the plaintiffs had not
opposed the registration of that part of the lot on which the wall
was situate they had lost it, even though it had been
theretofore registered in their name. Granting that theory to be
correct one, and granting even that the wall and the land
occupied by it, in fact, belonged to the defendant and his
predecessors, then the same theory should be applied to the
defendant himself. Applying that theory to him, he had already
lost whatever right he had therein, by permitting the plaintiffs to
have the same registered in their name, more than six years
before. Having thus lost hid right, may he be permitted to
regain it by simply including it in a petition for registration? The
plaintiffs having secured the registration of their lot, including
the wall, were they obliged to constantly be on the alert and to
watch all the proceedings in the land court to see that some
one else was not having all, or a portion of the same,
registered? If that question is to be answered in the affirmative,
then the whole scheme and purpose of the torrens system of
land registration must fail. The real purpose of that system is to
quiet title to land; to put a stop forever to any question of the
legality of the title, except claims which were noted at the time
of registration, in the certificate, or which may arise subsequent
thereto. That being the purpose of the law, it would seem that
once a title is registered the owner may rest secure, without
the necessity of waiting in the portals of the court, or sitting in
the "mirador de su casa," to avoid the possibility of losing his
land. Of course, it can not be denied that the proceeding for
the registration of land under the torrens system is judicial
(Escueta vs. .Director of Lands, 16 Phil. Rep., 482). It is
clothed with all the forms of an action and the result is final and
binding upon all the world. It is an action in rem. (Escueta vs.
Director of Lands (supra); Grey Alba vs. De la Cruz, 17 Phil.
rep., 49 Roxas vs. Enriquez, 29 Phil. Rep., 31; Tyler vs.
Judges, 175 Mass., 51 American Land Co. vs. Zeiss, 219 U.S.,
47.)
While the proceeding is judicial, it involves more in its
consequences than does an ordinary action. All the world are
parties, including the government. After the registration is
complete and final and there exists no fraud, there are no
innocent third parties who may claim an interest. The rights of
all the world are foreclosed by the decree of registration. The
government itself assumes the burden of giving notice to all
parties. To permit persons who are parties in the registration
proceeding (and they are all the world) to again litigate the
same questions, and to again cast doubt upon the validity of
the registered title, would destroy the very purpose and intent
of the law. The registration, under the torrens system, does not
give the owner any better title than he had. If he does not
already have a perfect title, he can not have it registered. Fee
simple titles only may be registered. The certificate of
registration accumulates in open document a precise and
correct statement of the exact status of the fee held by its
owner. The certificate, in the absence of fraud, is the evidence
of title and shows exactly the real interest of its owner. The title
once registered, with very few exceptions, should not
thereafter be impugned, altered, changed, modified, enlarged,
or diminished, except in some direct proceeding permitted by
law. Otherwise all security in registered titles would be lost. A
registered title can not be altered, modified, enlarged, or
diminished in a collateral proceeding and not even by a direct
proceeding, after the lapse of the period prescribed by law.
For the difficulty involved in the present case the Act (No. 496)
providing for the registration of titles under the torrens system
affords us no remedy. There is no provision in said Act giving
the parties relief under conditions like the present. There is
nothing in the Act which indicates who should be the owner of
land which has been registered in the name of two different
persons.
The rule, we think, is well settled that the decree ordering the
registration of a particular parcel of land is a bar to future
litigation over the same between the same parties .In view of
the fact that all the world are parties, it must follow that future
litigation over the title is forever barred; there can be no
persons who are not parties to the action. This, we think, is the
rule, except as to rights which are noted in the certificate or
which arise subsequently, and with certain other exceptions
which need not be dismissed at present. A title once registered
can not be defeated, even by an adverse, open, and notorious
possession. Registered title under the torrens system can not
be defeated by prescription (section 46, Act No. 496). The title,
once registered, is notice to the world. All persons must take
notice. No one can plead ignorance of the registration.
The question, who is the owner of land registered in the name
of two different persons, has been presented to the courts in
other jurisdictions. In some jurisdictions, where the "torrens"
system has been adopted, the difficulty has been settled by
express statutory provision. In others it has been settled by the
courts. Hogg, in his excellent discussion of the "Australian
Torrens System," at page 823, says: "The general rule is that in
the case of two certificates of title, purporting to include the
same land, the earlier in date prevails, whether the land
comprised in the latter certificate be wholly, or only in part,
comprised in the earlier certificate. (Oelkers vs. Merry, 2
Q.S.C.R., 193; Miller vs. Davy, 7 N.Z.R., 155; Lloyd vs. Myfield,
7 A.L.T. (V.) 48; Stevens vs. Williams, 12 V.L. R., 152; Register
of Titles, vs. Esperance Land Co., 1 W.A.R., 118.)" Hogg adds
however that, "if it can be very clearly ascertained by the
ordinary rules of construction relating to written documents,
that the inclusion of the land in the certificate of title of prior
date is a mistake, the mistake may be rectified by holding the
latter of the two certificates of title to be conclusive." (See Hogg
on the "Australian torrens System," supra, and cases cited.
See also the excellent work of Niblack in his "Analysis of the
Torrens System," page 99.) Niblack, in discussing the general
question, said: "Where two certificates purport to include the
same land the earlier in date prevails. ... In successive
registrations, where more than one certificate is issued in
respect of a particular estate or interest in land, the person
claiming under the prior certificates is entitled to the estate or
interest; and that person is deemed to hold under the prior
certificate who is the holder of, or whose claim is derived
directly or indirectly from the person who was the holder of the
earliest certificate issued in respect thereof. While the acts in
this country do not expressly cover the case of the issue of two
certificates for the same land, they provide that a registered
owner shall hold the title, and the effect of this undoubtedly is
that where two certificates purport to include the same
registered land, the holder of the earlier one continues to hold
the title" (p. 237).
Section 38 of Act No. 496, provides that; "It (the decree of
registration) 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 Court of
Land Registration a petition for review within one year after
entry of the decree (of registration), provided no innocent
purchaser for value has acquired an interest.
It will be noted, from said section, that the "decree of
registration" shall not be opened, for any reason, in any court,
except for fraud, and not even for fraud, after the lapse of one
year. If then the decree of registration can not be opened for
any reason, except for fraud, in a direct proceeding for that
purpose, may such decree be opened or set aside in a
collateral proceeding by including a portion of the land in a
subsequent certificate or decree of registration? We do not
believe the law contemplated that a person could be deprived
of his registered title in that way.
We have in this jurisdiction a general statutory provision which
governs the right of the ownership of land when the same is
registered in the ordinary registry in the name of two persons.
Article 1473 of the Civil Code provides, among other things,
that when one piece of real property had been sold to two
different persons it shall belong to the person acquiring it, who
first inscribes it in the registry. This rule, of course,
presupposes that each of the vendees or purchasers has
acquired title to the land. The real ownership in such a case
depends upon priority of registration. While we do not now
decide that the general provisions of the Civil Code are
applicable to the Land Registration Act, even though we see no
objection thereto, yet we think, in the absence of other express
provisions, they should have a persuasive influence in
adopting a rule for governing the effect of a double registration
under said Act. Adopting the rule which we believe to be more
in consonance with the purposes and the real intent of the
torrens system, we are of the opinion and so decree that in
case land has been registered under the Land Registration Act
in the name of two different persons, the earlier in date shall
prevail.
In reaching the above conclusion, we have not overlooked the
forceful argument of the appellee. He says, among other
things; "When Prieto et al. were served with notice of the
application of Teus (the predecessor of the defendant) they
became defendants in a proceeding wherein he, Teus, was
seeking to foreclose their right, and that of orders, to the parcel
of land described in his application. Through their failure to
appear and contest his right thereto, and the subsequent entry
of a default judgment against them, they became irrevocably
bound by the decree adjudicating such land to Teus. They had
their day in court and can not set up their own omission as
ground for impugning the validity of a judgment duly entered by
a court of competent jurisdiction. To decide otherwise would be
to hold that lands with torrens titles are above the law and
beyond the jurisdiction of the courts".
As was said above, the primary and fundamental purpose of
the torrens system is to quiet title. If the holder of a certificate
cannot rest secure in this registered title then the purpose of
the law is defeated. If those dealing with registered land cannot
rely upon the certificate, then nothing has been gained by the
registration and the expense incurred thereby has been in vain.
If the holder may lose a strip of his registered land by the
method adopted in the present case, he may lose it all.
Suppose within the six years which elapsed after the plaintiff
had secured their title, they had mortgaged or sold their right,
what would be the position or right of the mortgagee or
vendee? That mistakes are bound to occur cannot be denied,
and sometimes the damage done thereby is irreparable. It is
the duty of the courts to adjust the rights of the parties under
such circumstances so as to minimize such damages, taking
into consideration al of the conditions and the diligence of the
respective parties to avoid them. In the present case, the
appellee was the first negligent (granting that he was the real
owner, and if he was not the real owner he can not complain)
in not opposing the registration in the name of the appellants.
He was a party-defendant in an action for the registration of the
lot in question, in the name of the appellants, in 1906.
"Through his failure to appear and to oppose such registration,
and the subsequent entry of a default judgment against him, he
became irrevocably bound by the decree adjudicating such
land to the appellants. He had his day in court and should not
be permitted to set up his own omissions as the ground for
impugning the validity of a judgment duly entered by a court of
competent jurisdiction." Granting that he was the owner of the
land upon which the wall is located, his failure to oppose the
registration of the same in the name of the appellants, in the
absence of fraud, forever closes his mouth against impugning
the validity of that judgment. There is no more reason why the
doctrine invoked by the appellee should be applied to the
appellants than to him.
We have decided, in case of double registration under the
Land Registration Act, that the owner of the earliest certificate
is the owner of the land. That is the rule between original
parties. May this rule be applied to successive vendees of the
owners of such certificates? Suppose that one or the other of
the parties, before the error is discovered, transfers his original
certificate to an "innocent purchaser." The general rule is that
the vendee of land has no greater right, title, or interest than
his vendor; that he acquires the right which his vendor had,
only. Under that rule the vendee of the earlier certificate would
be the owner as against the vendee of the owner of the later
certificate.
We find statutory provisions which, upon first reading, seem to
cast some doubt upon the rule that the vendee acquires the
interest of the vendor only. Sections 38, 55, and 112 of Act No.
496 indicate that the vendee may acquire rights and be
protected against defenses which the vendor would not. Said
sections speak of available rights in favor of third parties which
are cut off by virtue of the sale of the land to an "innocent
purchaser." That is to say, persons who had had a right or
interest in land wrongfully included in an original certificate
would be unable to enforce such rights against an "innocent
purchaser," by virtue of the provisions of said sections. In the
present case Teus had his land, including the wall, registered in
his name. He subsequently sold the same to the appellee. Is
the appellee an "innocent purchaser," as that phrase is used in
said sections? May those who have been deprived of their land
by reason of a mistake in the original certificate in favor of Teus
be deprived of their right to the same, by virtue of the sale by
him to the appellee? Suppose the appellants had sold their lot,
including the wall, to an "innocent purchaser," would such
purchaser be included in the phrase "innocent purchaser," as
the same is used in said sections? Under these examples
there would be two innocent purchasers of the same land, is
said sections are to be applied .Which of the two innocent
purchasers, if they are both to be regarded as innocent
purchasers, should be protected under the provisions of said
sections? These questions indicate the difficulty with which we
are met in giving meaning and effect to the phrase "innocent
purchaser," in said sections.
May the purchaser of land which has been included in a
"second original certificate" ever be regarded as an "innocent
purchaser," as against the rights or interest of the owner of the
first original certificate, his heirs, assigns, or vendee? The first
original certificate is recorded in the public registry. It is never
issued until it is recorded. The record notice to all the world. All
persons are charged with the knowledge of what it contains. All
persons dealing with the land so recorded, or any portion of it,
must be charged with notice of whatever it contains. The
purchaser is charged with notice of every fact shown by the
record and is presumed to know every fact which the record
discloses .This rule is so well established that it is scarcely
necessary to cite authorities in its support (Northwestern
National Bank vs. Freeman, 171 U.S., 620, 629; Delvin on
Real Estate, sections 710, 710 [a]).
When a conveyance has been properly recorded such record
is constructive notice of its contents and all interests, legal and
equitable, included therein. (Grandin vs. Anderson, 15 Ohio
State, 286, 289; Orvis vs. Newell, 17 Conn., 97; Buchanan vs.
Intentional Bank, 78 Ill., 500; Youngs vs. Wilson, 27 N.Y., 351;
McCabe vs. Grey, 20 Cal., 509; Montefiore vs. Browne, 7
House of Lords Cases, 341.)
Under the rule of notice, it is presumed that the purchaser has
examined every instrument of record affecting the title. Such
presumption is irrebutable. He is charged with notice of every
fact shown by the record and is presumed to know every fact
which an examination of the record would have disclosed. This
presumption cannot be overcome by proof of innocence or
good faith. Otherwise the very purpose and object of the law
requiring a record would be destroyed. Such presumption
cannot be defeated by proof of want of knowledge of what the
record contains any more than one may be permitted to show
that he was ignorant of the provisions of the law. The rule that
all persons must take notice of the facts which the public
record contains is a rule of law. The rule must be absolute. Any
variation would lead to endless confusion and useless
litigation.
While there is no statutory provision in force here requiring that
original deeds of conveyance of real property be recorded, yet
there is a rule requiring mortgages to be recorded. (Arts. 1875
and 606 of the Civil Code.) The record of a mortgage is
indispensable to its validity. (Art .1875.) In the face of that
statute would the courts allow a mortgage to be valid which
had not been recorded, upon the plea of ignorance of the
statutory provision, when third parties were interested? May a
purchaser of land, subsequent to the recorded mortgage, plead
ignorance of its existence, and by reason of such ignorance
have the land released from such lien? Could a purchaser of
land, after the recorded mortgage, be relieved from the
mortgage lien by the plea that he was a bona fide purchaser?
May there be a bona fide purchaser of said land, bona fide in
the sense that he had no knowledge of the existence of the
mortgage? We believe the rule that all persons must take
notice of what the public record contains in just as obligatory
upon all persons as the rule that all men must know the law;
that no one can plead ignorance of the law. The fact that all
men know the law is contrary to the presumption. The conduct
of men, at times, shows clearly that they do not know the law.
T h e r u l e , h o w e v e r, i s m a n d a t o r y a n d o b l i g a t o r y,
notwithstanding. It would be just as logical to allow the defense
of ignorance of the existence and contents of a public record.
In view, therefore, of the foregoing rules of law, may the
purchaser of land from the owner of the second original
certificate be an "innocent purchaser," when a part or all of
such land had theretofore been registered in the name of
another, not the vendor? We are of the opinion that said
sections 38, 55, and 112 should not be applied to such
purchasers. We do not believe that the phrase "innocent
purchaser should be applied to such a purchaser. He cannot
be regarded as an "innocent purchaser" because of the facts
contained in the record of the first original certificate. The rule
should not be applied to the purchaser of a parcel of land the
vendor of which is not the owner of the original certificate, or
his successors. He, in nonsense, can be an "innocent
purchaser" of the portion of the land included in another earlier
original certificate. The rule of notice of what the record
contains precludes the idea of innocence. By reason of the
prior registry there cannot be an innocent purchaser of land
included in a prior original certificate and in a name other than
that of the vendor, or his successors. In order to minimize the
difficulties we think this is the safe rule to establish. We believe
the phrase "innocent purchaser," used in said sections, should
be limited only to cases where unregistered land has been
wrongfully included in a certificate under the torrens system.
When land is once brought under the torrens system, the
record of the original certificate and all subsequent transfers
thereof is notice to all the world. That being the rule, could Teus
even regarded as the holder in good fifth of that part of the land
included in his certificate of the appellants? We think not.
Suppose, for example, that Teus had never had his lot
registered under the torrens system. Suppose he had sold his
lot to the appellee and had included in his deed of transfer the
very strip of land now in question. Could his vendee be
regarded as an "innocent purchaser" of said strip? Would his
vendee be an "innocent purchaser" of said strip? Certainly not.
The record of the original certificate of the appellants precludes
the possibility. Has the appellee gained any right by reason of
the registration of the strip of land in the name of his vendor?
Applying the rule of notice resulting from the record of the title
of the appellants, the question must be answered in the
negative. We are of the opinion that these rules are more in
harmony with the purpose of Act No. 496 than the rule
contended for by the appellee. We believe that the purchaser
from the owner of the later certificate, and his successors,
should be required to resort to his vendor for damages, in case
of a mistake like the present, rather than to molest the holder
of the first certificate who has been guilty of no negligence. The
holder of the first original certificate and his successors should
be permitted to rest secure in their title, against one who had
acquired rights in conflict therewith and who had full and
complete knowledge of their rights. The purchaser of land
included in the second original certificate, by reason of the
facts contained in the public record and the knowledge with
which he is charged and by reason of his negligence, should
suffer the loss, if any, resulting from such purchase, rather than
he who has obtained the first certificate and who was innocent
of any act of negligence.
The foregoing decision does not solve, nor pretend to solve, all
the difficulties resulting from double registration under the
torrens system and the subsequent transfer of the land.
Neither do we now attempt to decide the effect of the former
registration in the ordinary registry upon the registration under
the torrens system. We are inclined to the view, without
deciding it, that the record under the torrens system,
supersede all other registries. If that view is correct then it will
be sufficient, in dealing with land registered and recorded
alone. Once land is registered and recorded under the torrens
system, that record alone can be examined for the purpose of
ascertaining the real status of the title to the land.
It would be seen to a just and equitable rule, when two persons
have acquired equal rights in the same thing, to hold that the
one who acquired it first and who has complied with all the
requirements of the law should be protected.
In view of our conclusions, above stated, the judgment of the
lower court should be and is hereby revoked. The record is
hereby returned to the court now having and exercising the
jurisdiction heretofore exercised by the land court, with
direction to make such orders and decrees in the premises as
may correct the error heretofore made in including the land in
the second original certificate issued in favor of the
predecessor of the appellee, as well as in all other duplicate
certificates issued.
Without any findings as to costs, it is so ordered.
G.R. No. L-21381
April 5, 1924
SANTIAGO QUIMSON, plaintiff-appellee,
vs.
PABLO SUAREZ, defendant-appellant.
Camus and Delgado and Jose Serapio for appellant.
Jose Bernabe for appellee.
OSTRAND, J.:
This is an action of forcible entry and detainer, the plaintiff
alleging that he is entitled to the possession of the land in
question under a lease from its owner and that the defendant is
wrongfully withholding it from him. The defendant maintains
that he is lawfully in possession under another lease of an
earlier date from the same owner.
It appears from the evidence that on February 28, 1917, the
deceased Pablo Tecson leased a large fishpond situated in the
municipality of Orani, Province of Bataan, to one David Luna
for the term of ten years at an annual rent of P900. Two
months later Luna, with the consent of Tecson, assigned the
lease to Pablo Suarez, the defendant herein. Shortly
afterwards Tecson applied for the registration of the land under
Act No. 496, but died before the final disposal of the case and
the final decree and corresponding certificate of title were
issued in the names of Esperanza Tongco de Trias, as
administratrix of Tecson's estate, and Maximiana Tongco, his
widow, in equal shares. Neither in the final decree nor in the
certificate of title was any mention made of the lease in favor of
Suarez.
Esperanza Tongco de Trias appears to have been succeeded
as administratrix by Maximiana Tongco and the latter as such
administratrix, and as guardian of the heirs of Tecson, and also
in her own behalf, granted a lease of the land to the plaintiff
Quimson. The lease is dated May 23, 1920, and is for the term
of six years from May 1, 1921, the rent for the entire term being
fixed at P6,250, payable at the time of the execution of the
lease. This lease was at once entered by memorandum upon
the certificate of title for the land. At the time of the execution of
the lease the plaintiff knew that the defendant Suarez was in
possession of the land as a tenant of Maximiana Tongco, by
whom he had been told that the term of Suarez' lease expired
on March 1, 1921, and there is no evidence showing that he
had notice of the fact that the term extended beyond that date.
On November 15, 1920, Suarez brought an action in the Court
of First Instance against Quimson and Maximiana Tongco to
have Quimson's lease set aside. As far as the record shows
the action may still be pending.
On May 1, 1921, Quimson made a formal demand upon
Suarez for the surrender of the possession and the demand
not being complied with, the present action was brought in the
court of the justice of the peace of Orani, the complaint being
filed May 6, 1921. The defendant objected formally to the
jurisdiction of the court on the ground that the action was in
reality not one of forcible entry and unlawful detainer, and
therefore not within the jurisdiction of the justice of the peace.
The court overruled the objection, took cognizance of the case,
and rendered judgment in favor of the plaintiff ordering the
defendant to vacate the land and to pay damages in the sum of
P280.
The defendant appealed to the Court of First Instance where
he appeared specially and presented a motion for the
dismissal of the complaint on the same grounds as those
urged in support of his objection to the jurisdiction of the justice
of the peace. The motion was denied.
The case was placed on the calendar for June 22, 1922, but
was continued on motion of the defendant. It was again set for
trial on August 11, 1922, and plaintiff appeared accompanied
by his counsel; the defendant also appeared and presented
another motion for a continuance on the ground that his
counsel had a case for trial in another court and was unable to
appear in the present case on that date. The court denied the
motion and proceeded with the trial, at which trial the
defendant testified in his own behalf. The court thereupon
rendered judgment in favor of the plaintiff for the possession of
the land and the sum of P590 in damages, with costs, and the
case is now before us upon appeal by the defendant from that
judgment.
The appellant presents three assignments of error, viz.:
(a) The trial court erred in overstepping its discretionary powers
by denying the petition for postponement of the trial filed by the
defendant on August 9, 1922.
(b) The trial court erred in overruling the motion for dismissal
presented by the defendant on the ground that the Court of
First Instance of Bataan had no jurisdiction to take cognizance
of this case on appeal.
(c) The trial court erred in holding that the right of possession
of the defendant to the land described in paragraph 1 of the
complaint was extinguished on April 30, 1921; and in adjudging
that the contract of lease, Exhibit 4 of the defendant, is null and
void for not having been noted on the corresponding certificate
of title.
(1) There is no merit in the first assignment of error. The
defendant had already been granted a continuance of the case
and failed to give plaintiff's counsel due notice of the second
motion for a continuance, thus causing the latter the expense
and trouble of going from Manila to Balanga. Under the
circumstances, the denial of the second motion certainly did
not constitute abuse of discretion.
(2) Neither can the second assignment of error be sustained.
The defendant argues that the action is not one of forcible
entry and detainer as defined in section 80 of the Code of Civil
Procedure. The pertinent part of that section reads as follows:
Anyone deprived of the possession of any land or building by
force, intimidation, threat, strategy, or stealth, and any landlord,
vendor, vendee, or other person against whom the possession
of any land or building is unlawfully withheld after the expiration
or determination of the right to hold possession, by virtue of
any contract, express or implied, and the legal representatives
or assigns of any such landlord, vendor, vendee, or other
person, shall at any time within one year after such unlawful
deprivation or withholding of possession be entitled, as against
the person or persons unlawfully withholding or depriving of
possession, or against any person or persons claiming under
them, to restitution of the land, building, and premises
possession of which is unlawfully withheld, together with
damages and costs. . . .
The complaint alleges that the plaintiff has been entitled to the
possession of the land since May, 1921; that the defendant's
right of possession expired April 30, 1921; and that the
defendant is illegally withholding the possession from the
plaintiff. These allegations bring the case squarely within the
section quoted and, if so, the justice of the peace had original
jurisdiction. The authorities cited by the defendant in support of
his contention are so clearly inapplicable to this case that a
discussion of them seems unnecessary.
(3) The third assignment of error relates to the principal
question in the case, i.e., the determination of the legal effect
of the two leases and of their relative priority. As we have
already stated, the land in question is registered under Act No.
496. The plaintiff's lease is duly entered upon the certificate of
title; the defendant's lease, though prior in date, has never
been registered, nor is any intimation of its existence to be
found upon the certificate of title. At the time the plaintiff
entered into his contract of lease, he had knowledge of the fact
that the defendant was in physical possession of the land and
if the land were unregistered this would be sufficient to put him
upon inquiry and charge him with constructive notice of the
defendant's rights.
But here the land is registered and in regard to such lands as
unrecorded lease operates only as a contract between the
parties and does not affect the rights of third parties in the
absence of fraud on their part. Inasmuch as sales, mortgages
and leases stand on the same footing in this respect, the
following quotation from Niblack on the Torrens System, p. 222,
citing Independent Lumber Co. vs. Gardiner (3 Sask., 140), is
in point:
The rule relative to the protection which will be afforded by a
new registration is that a purchaser for value will be protected
in his registered interests unless actual and moral fraud on his
part is to be inferred from the circumstances under which he
obtained them. A person taking a mortgage from a registered
owner of land is not affected by notice of an unregistered
interest in another person, whereby such person is the owner
of an undivided one-half of the land, but if the mortgagor, when
he executed it, expressly told the mortgagee that he owned
only an undivided one-half of the land, that he only intended to
mortgage his one-half, and that he intended to exempt the
interest of his cotenant, the mortgagee is guilty of fraud against
the unregistered owner in attempting to enforce the mortgage
against the whole land. Fraud on the part of a vendor in
acquiring his title cannot affect the statutory protection and
indefeasibility of title given to a registered purchaser for value,
who had no part in or knowledge of the fraud. This rule is the
same as in case of original registration.
One of the principal features of the Torrens System of
registration is that all incumbrances on the land or special
estates therein shall be shown, or, at least, intimated upon the
certificate of title and a person dealing with the owner of the
registered land is not bound to go behind the certificate and
inquire into transactions, the existence of which is not there
intimated. There being in the present case not indication on the
certificate of title of the existence of the defendant's lease, and
the certificate therefore showing a clear title and right of
possession in favor of the lessor, the plaintiff had a perfect right
to rely on the lessor's statement that defendant's right of
possession terminated on April 30, 1921, and was not bound to
make further inquiries. He can, therefore, not be charged with
fraud neither actual nor constructive.
The disadvantages of adopting the rule suggested by the
appellant would far outweigh the advantages, would be out of
harmony with the underlying principles of the Torrens System
of registration and would tend to impair the value of registered
titles.
The judgment appealed from is therefore affirmed, with the
costs against the appellant. So ordered.
G.R. No. L-42897
July 27, 1937
WILLIAM H. ANDERSON & CO., petitioner-appellant,
vs.
GREGORIO GARCIA, oppositor-appellee.
Ohnick and Opisso for appellant.
Antonio G. Lucero for appellee.
LAUREL, J.:
Pursuant to an order of execution issued on June 22, 1927 by
the municipal court of the City of Manila in civil case No.
54079, entitled William H. Anderson & Co., plaintiff, vs.
Cipriano Obcena, defendant, two parcels of land in Paniqui,
Tarlac, identified as lots 4019 and 4043 (cadastral case No. 26,
G. L. R. O. record No. 395) belonging to the defendant and
registered in his name under original certificate of title No.
13639, were levied upon and sold at public auction by the
sheriff of the province and awarded to the judgment creditor,
William H. Anderson & Co. This was on September 7, 1927.
On the following day, the sheriff of Tarlac issued a certificate of
sale which was filed and recorded in the office of the register of
deeds of the province on the 21st of the month and annotated
on the back of certificate of title No. 13639. Cipriano Obcena,
the judgment debtor, having failed to exercise his right of
redemption within the statutory period, the sheriff of Tarlac, on
July 12, 1934, executed a final deed of sale covering lots 4019
and 4043 in favor of William H. Anderson & Co. It appears,
however, that on March 23, 1927, by a document of absolute
sale (Exhibit B) dated March 23, 1927, acknowledged before a
notary public, Cipriano Obcena and his wife, Magdalena
Labitoria, conveyed lot No. 4019 to Aurora Riquez for the sum
of P160. Although the document inserted in the bill of
exceptions as Exhibit B does not appear to have been
registered in the registry of deeds of the province, an
examination of the duplicate original presented as evidence in
the lower court shows that the same was presented and
registered on November 3, 1930. On this same date, Aurora
Riquez obtained the cancellation of the original certificate of
title No. 13639 and the issuance in her name of transfer
certificate of title No. 5214 covering lot 4019. The sale in favor
of William H. Anderson & Co. was annotated on the back of
Rique' new certificate. On March 23, 1927, Aurora Riquez sold
with pacto de retracto the same lot 4019 to Gregorio Garcia, as
evidenced by document presented as Exhibit A, and the sale
was also registered in the registry of deed of the province on
November 3, 1930. As in the issued to Gregorio Garcia bore an
annotation of the lien in favor of William H. Anderson & Co.
The purpose of the original petition filed in this case and
bearing date of July 20, 1934, was to have the original
certificate of title 13639 and transfer certificate 5214 covering
lot 4019 issued to Obcena and Riquez, respectively, cancelled
and this petition appears to have been granted by the lower
court in its order of August 6, 1934 (bill of exceptions, p. 7).
The petitioner, however, upon learning that transfer certificate
of title 5212 had been issued to the latter filed an amended
petition bearing date of August 28, 1934 praying, among other
things, for the cancellation of transfer certificate 5215 issued to
Gregorio Garcia. This second petition was opposed by Garcia
alleging, among other things, that he was the owner of lot No.
4019, having acquired the same from Aurora Riquez by virtue
of a contract of sale with pacto de retracto on March 23, 1927
(Exhibit A); that Aurora Riquez in turn acquired lot 4019 from
the virtue of a contract of absolute sale executed on March 23,
1927 (Exhibit B); that he was a purchaser in good faith and
that, when the contract of sale with pacto de retracto was had
on March 23, 1927 between him and Aurora Riquez, lot 4019
was free from all encumbrances; that the absolute sale
effected by Cipriano Obcena and Magdalena Labitoria in favor
of Aurora Riquez on March 23, 1927, and the subsequent sale
made by the latter in his favor on the same date, took place
before the issuance of the order of execution in civil case No.
54079 of the municipal court of Manila, and that at the time of
said execution Cipriano Obcena was no longer the owner of
said lot 4019.
Acting upon this second petition of William H. Anderson & Co.
and the opposition thereto of Gregorio Garcia the court below,
on September 27, 1934, entered an order denying the petition
on the ground that the issue therein involved could only be
determined in a separate ordinary action. The petitionerappellant duly excepted to this order, moved for a new trial
which was denied, and after due exceptions. The petitionerappellant assigns various errors in this appeal. The primary
question, however, which is presented for determination is: On
the foregoing related facts, who has a superior right over the
controverted lot No. 4019, William H. Anderson & Co. or
Gregorio Garcia?
The several decisions of this court may indeed have given rise
to difficulties in the application of the proper rule. In the case of
Worcester vs. Ocampo and Ocampo (34 Phil., 646), it was held
that a pacto de retracto sale which was not recorded, filed, or
entered in the office of the register of deeds until after the
purchaser at an execution sale had secured his lien by
attachment was subject to the rights of the latter and the same
could not be enforced against the land until after the rights of
purchaser had been fully satisfied. Under the facts of that case,
the rights of the judgment creditor who was the purchaser at
the auction sale were declared superior to those of a vendee or
transferee of the same property under a contract of sale with
pacto de retracto entered into before the levy and unregistered
at the time of such levy. Such result was arrived at in view of
the provisions of section 50 and 51 of the Land Registration
Act (No. 496). In the case of Lanci vs. Yangco (52 Phil., 563), it
was said that a judgment interest possessed by the judgment
debtor in the property which is the subject in the hands of the
debtor. It was held, further, that the circumstance that at the
time of the levy of the execution, and the consequent sale of
the property, the certificate of title showed the debtor in the
execution to be unqualified owner of the property, did not
interfere with the application of this rule. In Laxamana vs.
Carlos (57 Phil., 722), it was held, following the Lanci-Yangco
case, that a purchaser at public auction of the rights, interests
and participation of the judgment in the property which the
latter had validly sold, acquires only the judgment debtor's right
to repurchase, and the fact that the vendee in a sale with the
right of repurchase did not object to the auction sale or file a
third party claim does not safeguard said purchaser at the
auction sale from the claim of the vendee in a sale with the
right of repurchase even if the sheriff's visions of section 194 of
the Revised Administrative Code, as amended by Act No.
2837, do not apply to judicial sales (citing Williams vs. Suner,
49 Phil., 534), and because it was his duty, before bidding at
the auction sale, to ascertain the real rights of the judgment
debtor, which are to be sold (citing 23 Corpus Juris, 746;
Sarmiento vs. Villamor, 13 Phil., 112; Pabico vs. Ong Pauco,
43 Phil., 572).
It should be observed that in Lanci vs. Yangco, supra, unlike
the case of Worcester vs. Ocampo and Ocampo, supra, the
vendees under a contract of sale anterior to the execution had
presented a third party claim to the sheriff, alleging that the
property belonged to them. The purchaser at the auction sale,
therefore, had notice of the claim, a situation which did not
obtain in Worcester vs. Ocampo and Ocampo. Upon the other
hand, the levy in the former case included the house built on
the property with the money supplied by the predecessor in
interest of the third party claimants, and this court took further
notice of the fact that the certificate of title issued in the name
of the judgment debtor contained no special notation with
respect to improvements on the property, but the levy effected
by the sheriff purported to be executed upon the debtor's
interest not only in the land but also in the improvements.
Under these circumstances, it was said that a judgment
creditor only acquires at an execution sale the identical interest
possessed by the judgment debtor in the property which is the
subject of the sale, and that "he therefore takes the property
subject to all existing equities to which the property would have
been subject in the hands of the debtor." In Laxamana vs.
Carlos, supra, the property involved was at the time an
unregistered land as could be inferred from the stipulation
between the parties concerned that the vendor was to procure
its registration under the Torrens system. Other cases
apparently involving the application of the same legal principle
are not here mentioned because of wide dissimilarity of facts.
In the case at bar, the record does not show when civil case
No. 54079 was initiated in the municipal court of Manila, but it
does not appear that the order of execution was issued on
June 22, 1927. The sales from the Obcena spouses to Aurora
Riquez and from the latter to Gregorio Garcia, the appellee,
were effected on the same date, or on March 23, 1927, and
both documents were also registered on the same date,
November 3, 1930, or more than two years after their
accomplishment by the parties. The order of execution having
been issued on June 22, 1927, the complaint against the
judgment debtor Obcena must have been presented some
time before. At any rate, there is nothing to indicate that
William H. Anderson & Co. had actual or constructive notice of
the previous conveyance to Gregorio Garcia or of any
outstanding equities in favor of the latter at the time of the
adjudication to that company of lot 4019. On the contrary, lot
4019 was at the time registered in the name of the judgment
debtor, free from all encumbrances. When the certificate of title
was issued to him on November 3, 1930, it bore an annotation
of the lien in favor of William H. Anderson & Co., the judgment
creditor and purchaser at the auction sale. No third party claim
was presented by Gregorio Garcia to the sheriff.
Whatever might have been generally or unqualifiedly stated in
the cases heretofore decided by this court, we hold that under
the Torrens system registration is the operative act that gives
validity to the transfer or creates a lien upon the land (secs. 50
and 51, Land Registration Act). A person dealing with
registered land is not required to go behind the register to
determine the condition of the property. He is only charged with
notice of the burdens on the property which are noted on the
face of the register or the certificate of title. To require him to do
more is to defeat one of the primary objects of the Torrens
system. A bona fide purchaser for value of such property at an
auction sale acquires good title as against a prior transferee of
the same property if such transfer was unrecorded at the time
of the auction sale. The existence or absence of good faith will,
of course, have to be determined upon the facts and the legal
environment of each particular case.
From what has been said it follows that judgment should be
rendered in favor of the petitioner-appellant, William H.
Anderson & Co. The corresponding certificate of title covering
lot No. 4019 should, therefore, be issued in its name. Without
pronouncement as to costs. So ordered.
G.R. No. L-9940
March 30, 1960
AVELINO REVILLA and ELENA FAJARDO, plaintiffsappellants,
and ordering the Register of Deeds to cancel T.C.T. No.
NT-7938.
Raising questions purely of law, plaintiffs have appealed
directly to this Court.
vs.
GODOFREDO GALINDEZ, defendant-appellee.
Vergara and Associates for appellants.
Lauro O. Sansano for appellee.
GUTIERREZ DAVID, J.:
In the complaint they filed in the Court of First Instance of
Nueva Ecija, Avelino Revilla, and Elena Fajardo are seeking to
recover the possession of a parcel of land, now known as Lot
No. 659-A, subdivision plan Psd-28954, but which used to be
the southwestern portion of Lot No. 659 of the cadastral survey
of Rizal, Nueva Ecija. This latter lot was formerly registered in
the name of Alipio Gasmeña as per T.C.T. No. 7454 (Exhibit 4).
On May 18, 1938, Alipio Gasmeña donated to Florencio
Gasmeña said southwestern portion of the lot, with an area of
1.8144 hectares (Exhibit 5). The donation was duly annotated
on the certificates of title. On May 21, 1938, Florencio
Gasmeña mortgaged his unsegregated portion to Godofredo
Galindez, defendant-appellee herein, for the sum of P350.00
(Exhibit 8); and on October 5, 1938 sold it outright to
defendant-appellee (Exhibit 7). The mortgage was registered
and a memorandum thereof entered on T.C.T. No. 7454, but
the subsequent sale was never registered. However, from the
date of the mortgage, defendant-appellee had been in
possession of the property.
Several years after Florencio Gasmeña's death in 1941, the
portion which he had conveyed to defendant-appellee was
segregated and designated as Lot No. 659-A. On August 28,
1950, T.C.T. No. NT-7782, covering Lot No. 659-A, was issued
in the name of the already deceased Florencio Gasmeña. This
certificate of title carried no annotation of the registered
mortgage in favor of defendant-appellee. On September 20,
1950, the widow and heirs of Florencio Gasmeña executed a
deed of extrajudicial partition with sale (Exhibit B) wherein they
declared that on November 15, 1941, Florencio Gasmeña died
intestate, without debts and possessed solely of Lot No. 659-A,
which lot they adjudicated to themselves and then sold for
P2,000.00 to plaintiff-appellants. Before they purchased the
land, plaintiff-appellants had examined Florencio Gasmeña's
title and had found no encumbrance noted thereon. The deed
of extrajudicial partition with sale was registered, so T.C.T. No.
NT-7782 in the name of Florencio Gasmeña was cancelled,
and in lieu thereof T.C.T. No. NT-7938 was issued to plaintiffsappellants subject to the provisions of Sections 4 and 5 of Rule
74, Rules of Court. Plaintiffs-appellants attempted to take
possession of the land, but defendant-appellee's overseer
informed them that defendant-appellee had previously
purchased it from Florencio Gasmeña. Defendant-appellee's
refusal to relinquish possession of the lot prompted plaintiffsappellants to commence this action.
The lower court, after trial, rendered judgment declaring the
deed of extrajudicial partition with sale (Exhibit B) null and void
We have here a case of registered land which had been sold to
two different persons. Where the same immovable property is
sold to different vendees, the property shall belong to the one
who first recorded it in the Registry of Deeds (Article 1544,
N.C.C., Article 1473, O.C.C.). This rule covers all kinds of
immovables, including land, and makes no distinction as to
whether the immovable is registered or not. But in so far as
registered land is concerned said rule is in perfect accord with
the Land Registration Act, Section 50 of which provides that no
deed, mortgage, lease or other voluntary instrument except a
will, purporting to convey or affect registered land shall take
effect as a conveyance or bind the land until its registration.
The first sale was in favor of defendant-appellee, and never
registered, although from the time the land was mortgaged to
him up to the present, he has been in uninterrupted possession
of the land. But since we are dealing with registered land, title
to which is imprescriptible (Section 46, Act 496), defendantappellee certainly cannot claim title by acquisitive prescription.
To successfully bind the land, he should have registered the
sale in his favor. By reason of his failure to do so, the sale
operated only as a contract between him and the vendor,
Florencio Gasmeña, and as evidence of authority to the
Register of Deeds to make registration (Section 50, Act 496;
Buzon vs. Licauco, 13 Phil., 354; Worcester vs. Ocampo, 34
Phil., 646; Fidelity and Surety Co. vs. Conegero, 41 Phil., 396).
Florencio Gasmeña and his heirs were bound to respect the
contract, but innocent third persons cannot be affected thereby.
From the time Florencio Gasmeña acquired the questioned lot
up to the time of his death (and even for nine years thereafter),
there was an annotation on Alipio Gasmeña's certificate of title
to the effect that said portion of land had been conveyed to
Florencio Gasmeña. Hence, from the viewpoint of third
persons, Florencio Gasmeña was still the owner even after the
unregistered sale to defendant-appellee. And it follows that if
Florencio Gasmeña had been of a mind to sell the land, he
could have subsequently sold it and could still have passed
good title to an innocent purchaser for value, subject, of
course, to the registered mortgage in favor of defendantappellee.
One of the main features of the Torrens system of registration
is that all encumbrances on the land or special estates therein
shall be shown, or at least intimated upon the certificate of title
and a person dealing with the owner of the registered land is
not bound to go behind the certificate and inquire into
transactions, the existence of which is not there intimated
(Quimson vs. Suarez, 45 Phil., 901); but he is only charged
with notice of the burdens on the property which are noted on
the face of the register or on the certificate of title (Anderson
and Co. vs. Garcia, 64 Phil., 506). The Torrens system seeks
to insure the efficacy and conclusiveness of the certificate of
title. To enhance this aim we thus have the provision that every
person receiving a certificate of title in pursuance of a degree
of registration, and every subsequent purchaser of registered
land who takes certificate of title for value in good faith shall
hold the same free of all incumbrances except those noted on
said certificate (Section 39, Act 496).
Unquestionably, the sale in favor of plaintiffs-appellants was a
registered one, and a certificate of title was issued to them.
The point of inquiry is whether they are purchasers in good
faith. It is true that before they bought the lot they had first
examined the certificate of title of Florencio Gasmeña and had
found it absolutely clean in the sense that there was no
annotation of any encumbrance. But one fact stands out just as
clearly. Plaintiffs-appellants did not buy the land from the
registered owner, Florencio Gasmeña. They bought it from his
heirs.
The law protects to a greater degree a purchaser who buys
from the registered owner himself. Corollarily, it requires a
higher degree of prudence from one who buys from a person
who is not the registered owner, although the land object of the
transaction is registered. While one who buys from the
registered owner does not need to look behind the certificate of
title, one who buys from one who is not the registered owner is
expected to examine not only the certificate of title but all
factual circumstances necessary for him to determine if there
are any flaws in the title of the transferor, or in his capacity to
transfer the land.
This Court has consistently applied the stricter rule when it
comes to deciding the issue of good faith of one who buys from
one who is not the registered owner, but who exhibits a
certificate of title.
This is well illustrated in Veloso and Rosales vs. La Urbana
and Del Mar (58 Phil., 681) where this Court declared that one
who deals with the supposed attorney in fact of a registered
owner, has the duty of ascertaining the genuineness of the
deed purporting to be a power of attorney, and that should he
fail to determine whether such attorney in fact has the power to
dispose of the land, then he must suffer the consequences and
damages resulting from the transaction. One who intends to
purchase registered land, must first make sure that the
persons selling it to him is the person named as owner in the
certificate of title, and not an impostor. If he should neglect to
ascertain the identity of the seller, the law will not protect him,
should such seller turn out to be an impostor (De Lara and De
Guzman vs. Ayroso, 95 Phil., 185; 50 Off. Gaz., No. 10, 4838).
Where a person buys land not from the registered owner but
from one whose right to the land has been merely annotated
on the certificate of title, and such purchaser merely had his
deed of sale annotated on the certificate of title, he is not
considered a "subsequent purchaser of registered land who
takes certificate of title for value and in good faith and who is
protected against any encumbrance except those noted on
said certificate" (Mirasol vs. Gerochi, 93 Phil., 480).
The problem before us finds a parallel in the case of Mari vs.
Bonilla (83 Phil., 137; 46 Off. Gaz., 4258), where a question
also arose respecting the vendees' good faith. In said case, the
property was still in the name of the already deceased
Casimiro Evangelista at the time the vendees purchased it
from one of Casimiro's son. This son, Deogracias Evangelista,
posing as sole heir of the deceased, had adjudicated the land
to himself and had then sold it to the vendees without first
acquiring a certificate of title in his name. It turned out later that
the deceased had other heirs who sought to recover the
property from the vendees. In resolving the question
presented, this Court declared that:
Good faith affords protection only to purchasers for value from
the registered owner. Deogracias Evangelista, defendants'
grantor, was not a registered owner. The land was and still is
registered in the name of Casimiro Evangelista. In no way
does the certificate state that Deogracias owned the land;
consequently defendants cannot summon to their aid the
theory of indefeasibility of Torrens Title. There is nothing in the
certificate and in the circumstances of the transaction which
warrant them in supposing that they need not look beyond the
title. If anything, it would have put them on their guard,
cautioned them to ascertain and verify that the vendor was the
only heir of his father, that there was no debt, and that the
latter was the sole owner of the parcel of land.
The above pronouncement may well be made here. Plaintiffsappellants did not buy the lot from the registered owner. Thus
they were bound at their peril to investigate their transferors'
right to sell the property. Ordinary prudence called for a
scrutiny of the deed of extrajudicial partition with sale (Exhibit
B) as well as the transfer certificate in the name of Florencio
Gasmeña. Such an examination would have inevitably
revealed to plaintiffs-appellants that Florencio Gasmeña's heirs
allowed almost a decade to pass before they attempted to
adjudicate the lot unto themselves, and, more important, that
Florencio Gasmeña had been dead nine years before the lot
was segregated from Lot No. 659 and T.C.T. No. NT-7782
issued in his name. With these facts on hand, any prospective
buyer of the land would have examined the previous transfer
certificate of title in the name of Alipio Gasmeña, T.C.T. No.
7454, and would thus have discovered that at no time during
his life was Florencio Gasrmeña ever the registered owner of
said portion of land. The memorandum of conveyance to him in
the certificate of title of Alipio Gasmeña served merely as a
notice to third parties of the fact that said portion had been
transferred to Florencio Gasmeña (Section 58, Act No. 496, as
amended by Act No. 4029), but it did not have the same effect
as a certificate of title issued to Florencio Gasmeña himself.
The doctrine therefore in the Bonilla case applies with more
force herein for neither plaintiffs-appellants transferors nor the
latter's predecessor was ever the registered owner of the lot.
An examination of Alipio Gasmeña's certificate of title would
likewise have yielded the fact that said portion of land had
been mortgaged to defendant-appellee. All these
circumstances were sufficient to warn plaintiffs-appellants that
their transferors did not have clean title to the land. Their failure
to make the investigations required by the circumstances
constitutes lack of good faith. They cannot now plead
ignorance because they had before them facts which would
have reasonably impelled an ordinarily prudent buyer to make
an inquiry and to exercise due care.
A purchaser cannot close his eyes to facts which should put a
reasonable man upon his guard, and then claim that he acted
in good faith under the belief that there was no defect in the
title of the vendor. His mere refusal to believe that such defect
exists, or his willful closing of his eyes to the possibility of the
existence of a defect in his vendor's title, will not make him an
innocent purchaser for value, if it afterwards develops that the
title was in fact defective, and it appears that he had such
notice of the defect as would have led to its discovery had he
acted with that measure of precaution which may reasonably
be required of a prudent man in like situation. (Leung Yee vs. F.
L. Strong Machinery Co., and Williamson, 37 Phil., 644).
Not being purchasers in good faith, plaintiffs-appellants are
clearly not entitled to the rights of a registered owner.
Neither of the vendees having registered their respective sales
in good faith, their right to the property must be determined by
the priority of possession. Where the same immovable
property was sold to two different persons neither of whom
recorded the transfer in good faith, ownership shall pertain to
the person who in good faith was first in the possession (Article
1544, N.C.C.; Article 1473, O.C.C.). The lot, therefore properly
belongs to defendant-appellee.
Having arrived at the foregoing conclusions, we find it
unnecessary to discuss the other points raised by the parties.
Wherefore, the appealed judgment is hereby affirmed with
costs against appellants.
G.R. No. 169454
December 27, 2007
THE HEIRS OF MARCELINO DORONIO, NAMELY: REGINA
AND FLORA, BOTH SURNAMED DORONIO, Petitioners,
vs.
HEIRS OF FORTUNATO DORONIO, NAMELY: TRINIDAD
ROSALINA DORONIO-BALMES, MODING DORONIO,
FLORENTINA DORONIO, AND ANICETA ALCANTARAMANALO, Respondents.
DECISION
REYES, R.T., J.:
For Our review on certiorari is the Decision1 of the Court of
Appeals (CA) reversing that2 of the Regional Trial Court (RTC),
Branch 45, Anonas, Urdaneta City, Pangasinan, in an action for
reconveyance and damages. The CA declared respondents as
rightful owners of one-half of the subject property and directed
petitioners to execute a registerable document conveying the
same to respondents.
The Facts
Spouses Simeon Doronio and Cornelia Gante, now both
deceased, were the registered owners of a parcel of land
located at Barangay Cabalitaan, Asingan, Pangasinan covered
by Original Certificate of Title (OCT) No. 352.3 The courts
below described it as follows:
Un terreno (Lote 1018), situada en el municipio de Asingan,
Linda por el NE; con propriedad de Gabriel Bernardino; con el
SE con propriedad de Zacarias Najorda y Alejandro Najorda;
por el SO con propriedad de Geminiano Mendoza y por el NO
con el camino para Villasis; midiendo una extension superficial
mil ciento cincuenta y dos metros cuadrados.4
The spouses had children but the records fail to disclose their
number. It is clear, however, that Marcelino Doronio and
Fortunato Doronio, now both deceased, were among them and
that the parties in this case are their heirs. Petitioners are the
heirs of Marcelino Doronio, while respondents are the heirs of
Fortunato Doronio.
On April 24, 1919, a private deed of donation propter nuptias5
was executed by spouses Simeon Doronio and Cornelia Gante
in favor of Marcelino Doronio and the latter’s wife, Veronica
Pico. One of the properties subject of said deed of donation is
the one that it described as follows:
Fourth – A piece of residential land located in the barrio of
Cabalitian but we did not measure it, the area is bounded on
the north by Gabriel Bernardino; on the east by Fortunato
Doronio; on the south by Geminiano Mendoza and on the west
by a road to Villasis. Constructed on said land is a house of
light materials – also a part of the dowry. Value …200.00.6
It appears that the property described in the deed of donation
is the one covered by OCT No. 352. However, there is a
significant discrepancy with respect to the identity of the owner
of adjacent property at the eastern side. Based on OCT No.
352, the adjacent owners are Zacarias Najorda and Alejandro
Najorda, whereas based on the deed of donation, the owner of
the adjacent property is Fortunato Doronio. Furthermore, said
deed of donation remained a private document as it was never
notarized.7
Both parties have been occupying the subject land for several
decades8 although they have different theories regarding its
present ownership. According to petitioners, they are now the
owners of the entire property in view of the private deed of
donation propter nuptias in favor of their predecessors,
Marcelino Doronio and Veronica Pico.
Respondents, on the other hand, claim that only half of the
property was actually incorporated in the said deed of donation
because it stated that Fortunato Doronio, instead of Zacarias
Najorda and Alejandro Najorda, is the owner of the adjacent
property at the eastern side. Respondents posit that the donors
respected and segregated the possession of Fortunato
Doronio of the eastern half of the land. They are the ones who
have been possessing said land occupied by their
predecessor, Fortunato Doronio.
Eager to obtain the entire property, the heirs of Marcelino
Doronio and Veronica Pico filed, on January 11, 1993, before
the RTC in Urdaneta, Pangasinan a petition "For the
Registration of a Private Deed of Donation"9 docketed as
Petition Case No. U-920. No respondents were named in the
said petition10 although notices of hearing were posted on the
bulletin boards of Barangay Cabalitaan, Municipalities of
Asingan and Lingayen.11
During the hearings, no one interposed an objection to the
petition.12 After the RTC ordered a general default,13 the
petition was eventually granted on September 22, 1993. This
led to the registration of the deed of donation, cancellation of
OCT No. 352 and issuance of a new Transfer Certificate of
Title (TCT) No. 44481 in the names of Marcelino Doronio and
Veronica Pico.14 Thus, the entire property was titled in the
names of petitioners’ predecessors.
On April 28, 1994, the heirs of Fortunato Doronio filed a
pleading before the RTC in the form of a petition in the same
Petition Case No. U-920. The petition was for the
reconsideration of the decision of the RTC that ordered the
registration of the subject deed of donation. It was prayed in
the petition that an order be issued declaring null and void the
registration of the private deed of donation and that TCT No.
44481 be cancelled. However, the petition was dismissed on
May 13, 1994 on the ground that the decision in Petition Case
No. U-920 had already become final as it was not appealed.
Determined to remain in their possessed property, respondent
heirs of Fortunato Doronio (as plaintiffs) filed an action for
reconveyance and damages with prayer for preliminary
injunction15 against petitioner heirs of Marcelino Doronio (as
defendants) before the RTC, Branch 45, Anonas, Urdaneta
City, Pangasinan. Respondents contended, among others, that
the subject land is different from what was donated as the
descriptions of the property under OCT No. 352 and under the
private deed of donation were different. They posited that
spouses Simeon Doronio and Cornelia Gante intended to
donate only one-half of the property.
During the pre-trial conference, the parties stipulated, among
others, that the property was originally covered by OCT No.
352 which was cancelled by TCT No. 44481. They also agreed
that the issues are: (1) whether or not there was a variation in
the description of the property subject of the private deed of
donation and OCT No. 352; (2) whether or not respondents
had acquired one-half of the property covered by OCT No. 352
by acquisitive prescription; (3) whether or not the transfer of
the whole property covered by OCT No. 352 on the basis of the
registration of the private deed of donation notwithstanding the
discrepancy in the description is valid; (4) whether or not
respondents are entitled to damages; and (5) whether or not
TCT No. 44481 is valid.16
RTC Decision
After due proceedings, the RTC ruled in favor of petitioner
heirs of Marcelino Doronio (defendants). It concluded that the
parties admitted the identity of the land which they all occupy;17
that a title once registered under the torrens system cannot be
defeated by adverse, open and notorious possession or by
prescription;18 that the deed of donation in consideration of the
marriage of the parents of petitioners is valid, hence, it led to
the eventual issuance of TCT No. 44481 in the names of said
parents;19 and that respondent heirs of Fortunato Doronio
(plaintiffs) are not entitled to damages as they are not the
rightful owners of the portion of the property they are
claiming.20
The RTC disposed of the case, thus:
WHEREFORE, premises considered, the Court hereby renders
judgment DISMISSING the herein Complaint filed by plaintiffs
against defendants.21
Disagreeing with the judgment of the RTC, respondents
appealed to the CA. They argued that the trial court erred in
not finding that respondents’ predecessor-in-interest acquired
one-half of the property covered by OCT No. 352 by tradition
and/or intestate succession; that the deed of donation dated
April 26, 1919 was null and void; that assuming that the deed
of donation was valid, only one-half of the property was
actually donated to Marcelino Doronio and Veronica Pico; and
that respondents acquired ownership of the other half portion
of the property by acquisitive prescription.22
Cornelia Gante and in the deed of donation propter nuptias
executed on April 24, 1919 in favor of appellees’
predecessors."24
The CA based its conclusion on the disparity of the following
technical descriptions of the property under OCT No. 352 and
the deed of donation, to wit:
The court below described the property covered by OCT No.
352 as follows:
"Un terreno (Lote 1018), situada en el municipio de Asingan,
Linda por el NE; con propriedad de Gabriel Bernardino; con el
SE con propriedad de Zacarias Najorda y Alejandro Najorda;
por el SO con propriedad de Geminiano Mendoza y por el NO
con el camino para Villasis; midiendo una extension superficial
mil ciento cincuenta y dos metros cuadrados."
On the other hand, the property donated to appellees’
predecessors was described in the deed of donation as:
"Fourth – A piece of residential land located in the barrio of
Cabalitian but we did not measure it, the area is bounded on
the north by Gabriel Bernardino; on the east by Fortunato
Doronio; on the south by Geminiano Mendoza and on the west
by a road to Villasis. Constructed on said land is a house of
light materials – also a part of the dowry. Value …200.00."25
(Emphasis ours)
Taking note "that the boundaries of the lot donated to
Marcelino Doronio and Veronica Pico differ from the
boundaries of the land owned by spouses Simeon Doronio and
Cornelia Gante," the CA concluded that spouses Simeon
Doronio and Cornelia Gante donated only half of the property
covered by OCT No. 352.26
Regarding the allegation of petitioners that OCT No. 352 is
inadmissible in evidence, the CA pointed out that, "while the
OCT is written in the Spanish language, this document already
forms part of the records of this case for failure of appellees to
interpose a timely objection when it was offered as evidence in
the proceedings a quo. It is a well-settled rule that any
objection to the admissibility of such evidence not raised will be
considered waived and said evidence will have to form part of
the records of the case as competent and admitted
evidence."27
CA Disposition
In a Decision dated January 26, 2005, the CA reversed the
RTC decision with the following disposition:
WHEREFORE, the assailed Decision dated June 28, 2002 is
REVERSED and SET ASIDE. Declaring the appellants as
rightful owners of one-half of the property now covered by TCT
No. 44481, the appellees are hereby directed to execute a
registerable document conveying the same to appellants.
SO ORDERED.23
The appellate court determined that "(t)he intention to donate
half of the disputed property to appellees’ predecessors can be
gleaned from the disparity of technical descriptions appearing
in the title (OCT No. 352) of spouses Simeon Doronio and
The CA likewise ruled that the donation of the entire property in
favor of petitioners’ predecessors is invalid on the ground that it
impairs the legitime of respondents’ predecessor, Fortunato
Doronio. On this aspect, the CA reasoned out:
Moreover, We find the donation of the entire property in favor
of appellees’ predecessors invalid as it impairs the legitime of
appellants’ predecessor. Article 961 of the Civil Code is explicit.
"In default of testamentary heirs, the law vests the inheritance,
x x x, in the legitimate x x x relatives of the deceased, x x x." As
Spouses Simeon Doronio and Cornelia Gante died intestate,
their property shall pass to their lawful heirs, namely: Fortunato
and Marcelino Doronio. Donating the entire property to
Marcelino Doronio and Veronica Pico and excluding another
heir, Fortunato, tantamounts to divesting the latter of his rightful
share in his parents’ inheritance. Besides, a person’s
prerogative to make donations is subject to certain limitations,
one of which is that he cannot give by donation more than what
he can give by will (Article 752, Civil Code). If he does, so
much of what is donated as exceeds what he can give by will is
deemed inofficious and the donation is reducible to the extent
of such excess.28
An offer of evidence in writing shall be objected to within three
(3) days after notice of the offer unless a different period is
allowed by the court.
Petitioners were not pleased with the decision of the CA.
Hence, this petition under Rule 45.
Since petitioners did not object to the offer of said documentary
evidence on time, it is now too late in the day for them to
question its admissibility. The rule is that evidence not objected
may be deemed admitted and may be validly considered by
the court in arriving at its judgment.33 This is true even if by its
nature, the evidence is inadmissible and would have surely
been rejected if it had been challenged at the proper time.34
Issues
Petitioners now contend that the CA erred in:
1. DECLARING ADMISSIBILITY OF THE ORIGINAL
CERTIFICATE OF TITLE NO. 352 DESPITE OF LACK OF
TRANSLATION THEREOF.
2. (RULING THAT) ONLY HALF OF THE DISPUTED
PROPERTY WAS DONATED TO THE PREDECESSORS-ININTEREST OF THE HEREIN APPELLANTS.
3. (ITS) DECLARATION THAT THE DONATION PROPTER
NUPTIAS IS INNOFICIOUS, IS PREMATURE, AND THUS IT
IS ILLEGAL AND UNPROCEDURAL.29
Our Ruling
OCT No. 352 in Spanish Although Not
Translated into English or Filipino Is
Admissible For Lack of Timely Objection
Petitioners fault the CA for admitting OCT No. 352 in evidence
on the ground that it is written in Spanish language. They posit
that "(d)ocumentary evidence in an unofficial language shall
not be admitted as evidence, unless accompanied with a
translation into English or Filipino."30
The argument is untenable. The requirement that documents
written in an unofficial language must be accompanied with a
translation in English or Filipino as a prerequisite for its
admission in evidence must be insisted upon by the parties at
the trial to enable the court, where a translation has been
impugned as incorrect, to decide the issue.31 Where such
document, not so accompanied with a translation in English or
Filipino, is offered in evidence and not objected to, either by the
parties or the court, it must be presumed that the language in
which the document is written is understood by all, and the
document is admissible in evidence.32
Moreover, Section 36, Rule 132 of the Revised Rules of
Evidence provides:
SECTION 36. Objection. – Objection to evidence offered orally
must be made immediately after the offer is made.
Objection to a question propounded in the course of the oral
examination of a witness shall be made as soon as the
grounds therefor shall become reasonably apparent.
In any case, the grounds for the objections must be specified.
(Emphasis ours)
As a matter of fact, instead of objecting, petitioners admitted
the contents of Exhibit "A," that is, OCT No. 352 in their
comment35 on respondents’ formal offer of documentary
evidence. In the said comment, petitioners alleged, among
others, that "Exhibits A, B, C, D, E, F and G, are admitted but
not for the purpose they are offered because these exhibits
being public and official documents are the best evidence of
that they contain and not for what a party would like it to
prove."36 Said evidence was admitted by the RTC.37 Once
admitted without objection, even though not admissible under
an objection, We are not inclined now to reject it.38
Consequently, the evidence that was not objected to became
property of the case, and all parties to the case are considered
amenable to any favorable or unfavorable effects resulting from
the said evidence.39
Issues on Impairment of Legitime
Should Be Threshed Out in a Special
Proceeding, Not in Civil Action for
Reconveyance and Damages
On the other hand, petitioners are correct in alleging that the
issue regarding the impairment of legitime of Fortunato
Doronio must be resolved in an action for the settlement of
estates of spouses Simeon Doronio and Cornelia Gante. It
may not be passed upon in an action for reconveyance and
damages. A probate court, in the exercise of its limited
jurisdiction, is the best forum to ventilate and adjudge the issue
of impairment of legitime as well as other related matters
involving the settlement of estate.40
An action for reconveyance with damages is a civil action,
whereas matters relating to settlement of the estate of a
deceased person such as advancement of property made by
the decedent, partake of the nature of a special proceeding.
Special proceedings require the application of specific rules as
provided for in the Rules of Court.41
As explained by the Court in Natcher v. Court of Appeals:42
Section 3, Rule 1 of the 1997 Rules of Civil Procedure defines
civil action and special proceedings, in this wise:
x x x a) A civil action is one by which a party sues another for
the enforcement or protection of a right, or the prevention or
redress of a wrong.
A civil action may either be ordinary or special. Both are
governed by the rules for ordinary civil actions, subject to
specific rules prescribed for a special civil action.
xxxx
c) A special proceeding is a remedy by which a party seeks to
establish a status, a right or a particular fact.
As could be gleaned from the foregoing, there lies a marked
distinction between an action and a special proceeding. An
action is a formal demand of one’s right in a court of justice in
the manner prescribed by the court or by the law. It is the
method of applying legal remedies according to definite
established rules. The term "special proceeding" may be
defined as an application or proceeding to establish the status
or right of a party, or a particular fact. Usually, in special
proceedings, no formal pleadings are required unless the
statute expressly so provides. In special proceedings, the
remedy is granted generally upon an application or motion.
Citing American Jurisprudence, a noted authority in Remedial
Law expounds further:
It may accordingly be stated generally that actions include
those proceedings which are instituted and prosecuted
according to the ordinary rules and provisions relating to
actions at law or suits in equity, and that special proceedings
include those proceedings which are not ordinary in this sense,
but is instituted and prosecuted according to some special
mode as in the case of proceedings commenced without
summons and prosecuted without regular pleadings, which are
characteristics of ordinary actions x x x. A special proceeding
must therefore be in the nature of a distinct and independent
proceeding for particular relief, such as may be instituted
independently of a pending action, by petition or motion upon
notice.
Applying these principles, an action for reconveyance and
annulment of title with damages is a civil action, whereas
matters relating to settlement of the estate of a deceased
person such as advancement of property made by the
decedent, partake of the nature of a special proceeding, which
concomitantly requires the application of specific rules as
provided for in the Rules of Court.
Clearly, matters which involve settlement and distribution of the
estate of the decedent fall within the exclusive province of the
probate court in the exercise of its limited jurisdiction.
Thus, under Section 2, Rule 90 of the Rules of Court,
questions as to advancement made or alleged to have been
made by the deceased to any heir may be heard and
determined by the court having jurisdiction of the estate
proceedings, and the final order of the court thereon shall be
binding on the person raising the questions and on the heir.
While it may be true that the Rules used the word "may," it is
nevertheless clear that the same provision contemplates a
probate court when it speaks of the "court having jurisdiction of
the estate proceedings."
Corollarily, the Regional Trial Court in the instant case, acting
in its general jurisdiction, is devoid of authority to render an
adjudication and resolve the issue of advancement of the real
property in favor of herein petitioner Natcher, inasmuch as Civil
Case No. 71075 for reconveyance and annulment of title with
damages is not, to our mind, the proper vehicle to thresh out
said question. Moreover, under the present circumstances, the
RTC of Manila, Branch 55, was not properly constituted as a
probate court so as to validly pass upon the question of
advancement made by the decedent Graciano Del Rosario to
his wife, herein petitioner Natcher.
We likewise find merit in petitioners’ contention that before any
conclusion about the legal share due to a compulsory heir may
be reached, it is necessary that certain steps be taken first.43
The net estate of the decedent must be ascertained, by
deducting all payable obligations and charges from the value of
the property owned by the deceased at the time of his death;
then, all donations subject to collation would be added to it.
With the partible estate thus determined, the legitime of the
compulsory heir or heirs can be established; and only then can
it be ascertained whether or not a donation had prejudiced the
legitimes.44
Declaration of Validity of Donation
Can Be Challenged by an Interested
Party Not Impleaded in Petition for
Quieting of Title or Declaratory Relief
or Where There is No Res Judicata.
Moreover, This Court Can Consider
a Factual Matter or Unassigned Error
in the Interest of Substantial Justice.
Nevertheless, petitioners cannot preclude the determination of
validity of the deed of donation on the ground that (1) it has
been impliedly admitted by respondents; (2) it has already
been determined with finality by the RTC in Petition Case No.
U-920; or (3) the only issue in an action for reconveyance is
who has a better right over the land.45
The validity of the private deed of donation propter nuptias in
favor of petitioners’ predecessors was one of the issues in this
case before the lower courts. The pre-trial order46 of the RTC
stated that one of the issues before it is "(w)hether or not the
transfer of the whole property covered by OCT No. 352 on the
basis of the private deed of donation notwithstanding the
discrepancy in the description is valid." Before the CA, one of
the errors assigned by respondents is that "THE TRIAL
COURT ERRED IN NOT FINDING THAT THE PRIVATE DEED
OF DONATION DATED APRIL 26, 1919 WAS NULL AND
VOID."47
The issue of the validity of donation is likewise brought to Us
by petitioners as they stated in their Memorandum48 that one of
the issues to be resolved is regarding the alleged fact that
"THE HONORABLE COURT OF APPEALS ERRED IN
FINDING THE DONATION INVALID." We are thus poised to
inspect the deed of donation and to determine its validity.
We cannot agree with petitioners’ contention that respondents
may no longer question the validity of the deed of donation on
the ground that they already impliedly admitted it. Under the
provisions of the Civil Code, a void contract is inexistent from
the beginning. The right to set up the defense of its illegality
cannot be waived.49 The right to set up the nullity of a void or
non-existent contract is not limited to the parties as in the case
of annullable or voidable contracts; it is extended to third
persons who are directly affected by the contract.50
Consequently, although respondents are not parties in the
deed of donation, they can set up its nullity because they are
directly affected by the same.51 The subject of the deed being
the land they are occupying, its enforcement will definitely
affect them.
Petitioners cannot also use the finality of the RTC decision in
Petition Case No. U-92052 as a shield against the verification of
the validity of the deed of donation. According to petitioners,
the said final decision is one for quieting of title.53 In other
words, it is a case for declaratory relief under Rule 64 (now
Rule 63) of the Rules of Court, which provides:
SECTION 1. Who may file petition. – Any person interested
under a deed, will, contract or other written instrument, or
whose rights are affected by a statute, executive order or
regulation, or ordinance, may, before breach or violation
thereof, bring an action to determine any question of
construction or validity arising under the instrument or statute
and for a declaration of his rights or duties thereunder.
An action for the reformation of an instrument, to quiet title to
real property or remove clouds therefrom, or to consolidate
ownership under Article 1607 of the Civil Code, may be
brought under this rule.
SECTION 2. Parties. – All persons shall be made parties who
have or claim any interest which would be affected by the
declaration; and no declaration shall, except as otherwise
provided in these rules, prejudice the rights of persons not
parties to the action. (Emphasis ours)
However, respondents were not made parties in the said
Petition Case No. U-920.1âwphi1 Worse, instead of issuing
summons to interested parties, the RTC merely allowed the
posting of notices on the bulletin boards of Barangay
Cabalitaan, Municipalities of Asingan and Lingayen,
Pangasinan. As pointed out by the CA, citing the ruling of the
RTC:
x x x In the said case or Petition No. U-920, notices were
posted on the bulletin boards of barangay Cabalitaan,
Municipalities of Asingan and Lingayen, Pangasinan, so that
there was a notice to the whole world and during the initial
hearing and/or hearings, no one interposed objection thereto.54
Suits to quiet title are not technically suits in rem, nor are they,
strictly speaking, in personam, but being against the person in
respect of the res, these proceedings are characterized as
quasi in rem.55 The judgment in such proceedings is conclusive
only between the parties.56 Thus, respondents are not bound
by the decision in Petition Case No. U-920 as they were not
made parties in the said case.
The rules on quieting of title57 expressly provide that any
declaration in a suit to quiet title shall not prejudice persons
who are not parties to the action.
That respondents filed a subsequent pleading58 in the same
Petition Case No. U-920 after the decision there had become
final did not change the fact that said decision became final
without their being impleaded in the case. Said subsequent
pleading was dismissed on the ground of finality of the
decision.59
Thus, the RTC totally failed to give respondents their day in
court. As a result, they cannot be bound by its orders.
Generally accepted is the principle that no man shall be
affected by any proceeding to which he is a stranger, and
strangers to a case are not bound by judgment rendered by the
court.60
Moreover, for the principle of res judicata to apply, the following
must be present: (1) a decision on the merits; (2) by a court of
competent jurisdiction; (3) the decision is final; and (4) the two
actions involve identical parties, subject matter and causes of
action.61 The fourth element is not present in this case. The
parties are not identical because respondents were not
impleaded in Petition Case No. U-920. While the subject
matter may be the same property covered by OCT No. 352, the
causes of action are different. Petition Case No. U-920 is an
action for declaratory relief while the case below is for recovery
of property.
We are not persuaded by petitioners’ posture that the only
issue in this action for reconveyance is who has a better right
over the land; and that the validity of the deed of donation is
beside the point.62 It is precisely the validity and enforceability
of the deed of donation that is the determining factor in
resolving the issue of who has a better right over the property.
Moreover, notwithstanding procedural lapses as to the
appropriateness of the remedies prayed for in the petition filed
before Us, this Court can brush aside the technicalities in the
interest of justice. In some instances, this Court even
suspended its own rules and excepted a case from their
operation whenever the higher interests of justice so
demanded.63
Moreover, although respondents did not directly raise the issue
of validity of the deed of donation at the commencement of the
case before the trial court, it was stipulated64 by the parties
during the pre-trial conference. In any event, this Court has
authority to inquire into any question necessary in arriving at a
just decision of a case before it.65 Though not specifically
questioned by the parties, additional issues may also be
included, if deemed important for substantial justice to be
rendered.66
Furthermore, this Court has held that although a factual issue
is not squarely raised below, still in the interest of substantial
justice, this Court is not prevented from considering a pivotal
factual matter. 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.67
A rudimentary doctrine on appealed cases is that this Court is
clothed with ample authority to review matters, even if they are
not assigned as errors on appeal, if it finds that their
consideration is necessary at arriving at a just decision of the
case.68 Also, an unassigned error closely related to an error
properly assigned or upon which the determination of the
question raised by the error properly assigned is dependent,
will be considered by the appellate court notwithstanding the
failure to assign it as an error.69
Donation Propter Nuptias of Real
Property Made in a Private Instrument
Before the New Civil Code Took Effect
on August 30, 1950 is Void
We now focus on the crux of the petition, which is the validity of
the deed of donation.1avvphi1 It is settled that only laws
existing at the time of the execution of a contract are applicable
to it and not the later statutes, unless the latter are specifically
intended to have retroactive effect.70 Accordingly, the Old Civil
Code applies in this case as the donation propter nuptias was
executed in 1919, while the New Civil Code took effect only on
August 30, 1950.
Under the Old Civil Code, donations propter nuptias must be
made in a public instrument in which the property donated
must be specifically described.71 Article 1328 of the Old Civil
Code provides that gifts propter nuptias are governed by the
rules established in Title 2 of Book 3 of the same Code. Article
633 of that title provides that the gift of real property, in order to
be valid, must appear in a public document.72 It is settled that a
donation of real estate propter nuptias is void unless made by
public instrument.73
In the instant case, the donation propter nuptias did not
become valid. Neither did it create any right because it was not
made in a public instrument.74 Hence, it conveyed no title to
the land in question to petitioners’ predecessors.
Logically, then, the cancellation of OCT No. 352 and the
issuance of a new TCT No. 44481 in favor of petitioners’
predecessors have no legal basis. The title to the subject
property should, therefore, be restored to its original owners
under OCT No. 352.
Direct reconveyance to any of the parties is not possible as it
has not yet been determined in a proper proceeding who
among the heirs of spouses Simeon Doronio and Cornelia
Gante is entitled to it. It is still unproven whether or not the
parties are the only ones entitled to the properties of spouses
Simeon Doronio and Cornelia Gante. As earlier intimated,
there are still things to be done before the legal share of all the
heirs can be properly adjudicated.75
Titled Property Cannot Be Acquired
By Another By Adverse Possession
or Extinctive Prescription
Likewise, the claim of respondents that they became owners of
the property by acquisitive prescription has no merit. Truth to
tell, respondents cannot successfully invoke the argument of
extinctive prescription. They cannot be deemed the owners by
acquisitive prescription of the portion of the property they have
been possessing. The reason is that the property was covered
by OCT No. 352. A title once registered under the torrens
system cannot be defeated even by adverse, open and
notorious possession; neither can it be defeated by
prescription.76 It is notice to the whole world and as such all
persons are bound by it and no one can plead ignorance of the
registration.77
The torrens system is intended to guarantee the integrity and
conclusiveness of the certificate of registration, but it cannot be
used for the perpetration of fraud against the real owner of the
registered land.78 The system merely confirms ownership and
does not create it. Certainly, it cannot be used to divest the
lawful owner of his title for the purpose of transferring it to
another who has not acquired it by any of the modes allowed
or recognized by law. It cannot be used to protect a usurper
from the true owner, nor can it be used as a shield for the
commission of fraud; neither does it permit one to enrich
himself at the expense of another.79 Where such an illegal
transfer is made, as in the case at bar, the law presumes that
no registration has been made and so retains title in the real
owner of the land.80
Although We confirm here the invalidity of the deed of donation
and of its resulting TCT No. 44481, the controversy between
the parties is yet to be fully settled. The issues as to who truly
are the present owners of the property and what is the extent
of their ownership remain unresolved. The same may be
properly threshed out in the settlement of the estates of the
registered owners of the property, namely: spouses Simeon
Doronio and Cornelia Gante.
WHEREFORE, the appealed Decision is REVERSED AND
SET ASIDE. A new one is entered:
(1) Declaring the private deed of donation propter nuptias in
favor of petitioners’ predecessors NULL AND VOID; and
(2) Ordering the Register of Deeds of Pangasinan to:
(a) CANCEL Transfer Certificate of Title No. 44481 in the
names of Marcelino Doronio and Veronica Pico; and
(b) RESTORE Original Certificate of Title No. 352 in the names
of its original owners, spouses Simeon Doronio and Cornelia
Gante.
SO ORDERED.
G.R. No. 171056
March 13, 2009
DINAH C. CASTILLO, Petitioner,
vs.
ANTONIO M. ESCUTIN, AQUILINA A. MISTAS, MARIETTA L.
LINATOC, AND THE HONORABLE COURT OF APPEALS,
Respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari 1 under
Rule 45 of the Rules of Court filed by petitioner Dinah C.
Castillo seeking the reversal and setting aside of the Decision,2
dated 18 October 2005, of the Court of Appeals in CA-G.R. SP
No. 90533, as well as the Resolution,3 dated 11 January 2006
of the same court denying reconsideration of its aforementioned Decision. The Court of Appeals, in its assailed
Decision, affirmed the Joint Resolution4 dated 28 April 2004
and Joint Order5 dated 20 June 2005 of the Office of the
Deputy Ombudsman for Luzon in OMB-L-A-03-0573-F and
OMB-L-C-03-0728-F, dismissing petitioner Dinah C. Castillo’s
complaint for grave misconduct and violation of Section 3(e) of
Republic Act No. 3019, the Anti-Graft and Corrupt Practices
Act, as amended, against respondent public officers Antonio M.
Escutin (Escutin), Aquilina A. Mistas (Mistas) and Marietta L.
Linatoc (Linatoc), together with private individuals Lauro S.
Leviste II (Leviste) and Benedicto L. Orense (Orense).
Petitioner is a judgment creditor of a certain Raquel K.
Moratilla (Raquel), married to Roel Buenaventura. In the
course of her search for properties to satisfy the judgment in
her favor, petitioner discovered that Raquel, her mother
Urbana Kalaw (Urbana), and sister Perla K. Moratilla (Perla),
co-owned Lot 13713, a parcel of land consisting of 15,000
square meters, situated at Brgy. Bugtongnapulo, Lipa City,
Batangas, and covered by Tax Declaration No. 00449.
Petitioner set about verifying the ownership of Lot 13713. She
was able to secure an Order6 dated 4 March 1999 issued by
Secretary Horacio R. Morales, Jr. of the Department of
Agrarian Reform (DAR) approving the application of Summit
Point Golf & Country Club, Inc. for conversion of several
agricultural landholdings, including Lot 13713 owned by "Perla
K. Mortilla, et al." and covered by Tax Declaration No. 00449,
to residential, commercial, and recreational uses. She was also
able to get from the Office of the City Assessor, Lipa City, a
Certification 7 stating that Lot 13713, covered by Tax
Declaration No. 00554-A, was in the name of co-owners
Raquel, Urbana, and Perla; and a certified true copy of Tax
Declaration No. 00554-A itself.8 Lastly, the Register of Deeds
of Lipa City issued a Certification9 attesting that Lot 13713 in
the name of co-owners Raquel, Urbana, and Perla, was not
covered by a certificate of title, whether judicial or patent, or
subject to the issuance of a Certificate of Land Ownership
Award or patent under the Comprehensive Agrarian Reform
Program.
Only thereafter did petitioner proceed to levy on execution Lot
13713, and the public auction sale of the same was scheduled
on 14 May 2002. Sometime in May 2002, before the scheduled
public auction sale, petitioner learned that Lot 13713 was
inside the Summit Point Golf and Country Club Subdivision
owned by Summit Point Realty and Development Corporation
(Summit Realty). She immediately went to the Makati City
office of Summit Realty to meet with its Vice President,
Orense. However, she claimed that Orense did not show her
any document to prove ownership of Lot 13713 by Summit
Realty, and even threatened her that the owners of Summit
Realty, the Leviste family, was too powerful and influential for
petitioner to tangle with.
The public auction sale pushed through on 14 May 2002, and
petitioner bought Raquel’s 1/3 pro-indiviso share in Lot 13713.
On 4 June 2002, petitioner had the following documents, on
her acquisition of Raquel’s 1/3 pro-indiviso share in Lot 13713,
recorded in the Primary Entry Book and Registration Book of
the Register of Deeds of Lipa City in accordance with Act No.
334410: (a) Notice of Levy;11 (b) Certificate of Sale;12 (c)
Affidavit of Publication;13 and (d) Writ of Execution.14
Subsequently, petitioner was issued by the City Assessor of
Lipa City Tax Declaration No. 00942-A,15 indicating that she
owned 5,000 square meters of Lot 13713, while Urbana and
Perla owned the other 10,000 square meters.
When petitioner attempted to pay real estate taxes for her
5,000-square-meter share in Lot 13713, she was shocked to
find out that, without giving her notice, her Tax Declaration No.
00942-A was cancelled. Lot 13713 was said to be
encompassed in and overlapping with the 105,648 square
meter parcel of land known as Lot 1-B, covered by Transfer
Certificate of Title (TCT) No. 12964216 and Tax Declaration No.
00949-A,17 both in the name of Francisco Catigbac (Catigbac).
The reverse side of TCT No. 129642 bore three entries,
reflecting the supposed sale of Lot 1-B to Summit Realty, to
wit:
ENTRY NO. 184894: SPECIAL POWER OF ATTORNEY: In
favor of LEONARDO YAGIN: For purposes more particularly
stipulated in the contract ratified before Atty. Ernesto M.
Vergara of Lipa City as per Doc. No. 639; Page No. 29; Book
No. LXXVI; Series of 1976.
Date of instrument – 2-6-1976
Date of inscription – 6-26-2002 at 11:20 a.m.
ENTRY NO. 185833: SALE IN FAVOR OF SUMMIT POINT
REALTY & DEVELOPMENT CORP: –
ENTRY NO. 185834: BIR CLEARANCE: – Of the parcel of
land described in this cert. of title is hereby sold and cancelled
TCT No. 134609(SN-6672938) Vol. 671-A, having been issued
by virtue of the aforesaid instrument ratified before Perfecto L.
Dimayuga, Notary Public for Makati City as per Doc. No. 148;
Page 31, Book No. LXVII, Series of 2002.
Date of instrument: July 22, 2002
Date of inscription: July 25, 2002 at 2:30 P.M.18
On 25 July 2002, at 2:30 p.m., TCT No. 129642 in the name of
Catigbac was cancelled and TCT No. T-134609 in the name of
Summit Realty was issued in its place.
Secretary’s Certificate eventually surfaced, but it was executed
only on 30 July 2002, five days after TCT No. T-134609 in the
name of Summit Realty was already issued.
The foregoing incidents prompted petitioner to file a Complaint
Affidavit19 before the Office of the Deputy Ombudsman for
Luzon charging several public officers and private individuals
as follows:
The Deed of Absolute Sale was presented before and recorded
by the Register of Deeds of Lipa City on 25 July 2002 at 2:30
p.m., at exactly the same date and time TCT No. T-134609
was issued to Summit Realty. Petitioner theorizes that for this
to happen, TCT No. T-134609 was already prepared and ready
even before the presentation for recording of the Deed of
Absolute Sale before the Register of Deeds.
32. I respectfully charge that on or about the months of June
2002 and July 2002 and onwards in Lipa City, Atty. Antonio M.
[Escutin], the Register of Deeds of Lipa City[;] Aquilina A.
Mistas, the Local Assessment Operations Officer III of the City
Assessor’s Office of Lipa City[;] Marietta Linatoc, Records
Clerk, Office of the City Assessor of Lipa City, who are public
officers and acting in concert and conspiring with Lauro S.
Leviste II and Benedicto L. Orense, Executive Vice-President
and Vice-President, respectively[,] of Summit Point Realty and
Development Corporation x x x while in the discharge of their
administrative functions did then and there unlawfully, through
evident bad faith, gross inexcusable negligence and with
manifest partiality towards Summit caused me injury in the sum
of ₱20,000,000.00 by cancelling my TD #00942-A in the Office
of the City Assessor of Lipa City and instead issuing in the
name of Francisco Catigbac TC #00949-A when aforesaid
personalities well knew that TCT No. 129642 was already
cancelled and therefore not legally entitled to a new tax
declaration thereby manifestly favoring Summit Point Realty
and Development Corporation who now appears to be the
successor-in-interest of Francisco Catigbac, all to my damage
and prejudice.20 (Emphasis ours.)
Petitioner’s Complaint Affidavit gave rise to simultaneous
administrative and preliminary (criminal) investigations,
docketed as OMB-L-A-03-0573-F and OMB-L-C-03-0728-F,
respectively.
Petitioner pointed out several irregularities in the
circumstances surrounding the alleged sale of Lot 1-B to
Summit Realty and in the documents evidencing the same.
The supposed Deed of Absolute Sale in favor of Summit Realty
executed on 22 July 2002 by Leonardo Yagin (Yagin), as
Catigbac’s attorney-in-fact, appeared to be a "one-way street."
It did not express the desire of Summit Realty, as vendee, to
purchase Lot 1-B or indicate its consent and conformity to the
terms of the Deed. No representative of Summit Realty signed
the left margin of each and every page of said Deed. It also did
not appear from the Deed that a representative of Summit
Realty presented himself before the Notary Public who
notarized the said document. The Tax Identification Numbers of
Yagin, as vendor, and Summit Realty, as vendee, were not
stated in the Deed.
Petitioner also averred that, being a corporation, Summit
Realty could only act through its Board of Directors. However,
when the Deed of Absolute Sale of Lot 1-B was presented for
recording before the Register of Deeds, it was not
accompanied by a Secretary’s Certificate attesting to the
existence of a Board Resolution which authorized said
purchase by Summit Realty. There was no entry regarding
such a Secretary’s Certificate and/or Board Resolution,
whether on TCT No. 129642 or TCT No. T-134609. A
Moreover, Catigbac had long been dead and buried. The
agency Catigbac supposedly executed in favor of Yagin was
extinguished by Catigbac’s death. Thus, petitioner argued,
Yagin no longer had authority to execute on 22 July 2002 the
Deed of Absolute Sale of Lot 1-B in favor of Summit Realty,
making the said Deed null and void ab initio.
Petitioner asserted that Summit Realty was well-aware of
Catigbac’s death, having acknowledged the same in LRC Case
No. 00-0376, the Petition for Issuance of New Owner’s
Duplicate of TCT No. 181 In Lieu of Lost One, filed by Summit
Realty before the Regional Trial Court (RTC) of Lipa City.
During the ex parte presentation of evidence in the latter part
of 2000, Orense testified on behalf of Summit Realty that
Catigbac’s property used to form part of a bigger parcel of land,
Lot 1 of Plan Psu-12014, measuring 132,975 square meters,
covered by TCT No. 181 in the name of Catigbac; after
Catigbac’s death, Lot 1 was informally subdivided into several
parts among his heirs and/or successors-in-interest, some of
whom again transferred their shares to other persons; Summit
Realty separately bought subdivided parts of Lot 181 from their
respective owners, with a consolidated area of 105,648 square
meters, and identified as Lot 1-B after survey; despite the
subdivision and transfer of ownership of Lot 1, TCT No. 181
covering the same was never cancelled; and the owner’s
duplicate of TCT No. 181 was lost and the fact of such loss
was annotated at the back of the original copy of TCT No. 181
with the Registry of Deeds. Subsequently, in an Order21 dated
3 January 2001, the RTC granted the Petition in LRC Case No.
00-0376 and directed the issuance of a new owner’s duplicate
of TCT No. 181 in the name of Catigbac, under the same terms
and condition as in its original form.
Petitioner further cast doubt on the acts undertaken by Summit
Realty in connection with Catigbac’s property, purportedly
without legal personality and capacity. The Special Power of
Attorney dated 6 February 1976 granted Yagin the right to sue
on behalf of Catigbac, yet it was Summit Realty which
instituted LRC Case No. 00-0376, and Yagin had no
participation at all in said case. Likewise, it was not Yagin, but
Orense, who, through a letter22 dated 27 June 2001, requested
the cancellation of TCT No. 181 covering Lot 1 and the
issuance of a new certificate of title for Lot 1-B. Hence, it was
Orense’s request which resulted in the issuance of TCT No.
129642 in the name of Catigbac, later cancelled and replaced
by TCT No. T-134609 in the name of Summit Realty.
Lastly, petitioner questioned why, despite the cancellation of
TCT No. 129642 in the name of Catigbac and the issuance in
its place of TCT No. T-134609 in the name of Summit Realty, it
was the former cancelled title which was used as basis for
canceling petitioner’s Tax Declaration No. 00942-A. Tax
Declaration No. 00949-A was thus still issued in the name of
Catigbac, instead of Summit Realty.
Piecing everything together, petitioner recounted in her
Complaint Affidavit the alleged scheme perpetrated against her
and the involvement therein of each of the conspirators:
28. Summit Point Realty and Development Corporation went
into action right after I paid Orense a visit sometime May 2002.
Summit resurrected from the grave. (sic) Francisco Catigbac
whom they knew to be long dead to face possible litigation.
This is the height of malice and bad faith on the part of Summit
through its Lauro Leviste II, the Executive Vice President and
Benedicto Orense, the Vice President. I had only in my favor a
tax declaration to show my interest and ownership over the 5,
000 sq.m. of the subject parcel of land. Evidently, Leviste and
Orense came to the desperate conclusion that they needed a
TCT which is a far better title than any tax declaration.
Both then methodically commenced their evil and illegal
scheme by causing on June 26, 2002 at 11:20 a.m. the
inscription with the Register of Deeds of Lipa City of a
purported Special Power of Attorney in favor of Leonardo Yagin
(Annex "I"). Next, the Deed of Absolute Sale (Annex "J") was
made the following month in order to make it appear that Yagin
unilaterally sold to Summit the subject parcel of land
purportedly belonging to Francisco Catigbac. Since the latter
was already dead and realizing that the agency was already
extinguished, Annex "J" was not signed or executed by Leviste
or Orense. This fact however did not deter the two from
securing a BIR clearance on July 25, 2002. Also, on this same
day, July 25, 2002, Annex "J" was presented to Atty. [Escutin]
at 2:30 p.m. simultaneously, at exactly the same time of 2:30
p.m. TCT No. T-134609 in Summit’s name was issued by Atty.
[Escutin] WITHOUT benefit of the submission of the necessary
documentation such as the Board Resolution, DAR Clearance,
Revenue Tax Receipts for documentary stamps, real property
tax clearance, proof of payment of transfer tax, tax declaration,
articles of incorporation, SEC certification, license to sell and/or
certificate of registration by HLURB, etc. Without the total and
lightning speed cooperation of Atty. [Escutin] to close his eyes
to the total absence of said vital documents, the desperately
needed TCT to erase my interest and ownership would not
have come into existence. Atty. [Escutin] had indeed acted in
concert and in conspiracy with Leviste and Orense in
producing Annex "H" and Annex "K".
29. Thereafter, Leviste and Orense utilized the already
cancelled TCT No. 129642 in the name of Francisco Catigbac
to be the basis in seeking the cancellation of TD #00942A in
my name (Annex "F"). The Tax Mapping Division of the Office
of City Assessor of Lipa City opined that my 5,000 sq.m. was
(sic) part and parcel of the 105,648 sq.m. covered by TCT No.
129642. A photocopy of the Certification from said division is
hereto marked and attached as Annex "P", hereof. Aquilina
Mistas, the Local Assessment Operations Officer III of the
Office of the City Assessor of Lipa City then conveniently
caused the disappearance of my Notice of Levy and other
supporting documents which she had personally received from
me on March 13, 2002. For her part of the conspiracy likewise,
Marietta Linatoc, Records Clerk, forthwith cancelled by
TD#00942-A and in lieu thereof she issued TD #00949-A in the
name of Francisco Catigbac. I dare say so because Mistas and
Linatoc were presented a cancelled TCT as basis for
obliterating my 5,000 sq.m. The fact of cancellation is clearly
stated on the posterior side of TCT No. 129642. Both can read.
But the two nevertheless proceeded with dispatch in canceling
my TD, though they had ample time and opportunity to reject
the request of Summit who is not even the registered owner
appearing on TCT No. 129642. Francisco Catigbac could not
have been in front of Mistas and Linatoc because he was
already six feet below the ground. Mistas and Linatoc could
have demanded presentation of the document authorizing
Summit in requesting for the cancellation of my TD. Also, they
could have demanded from Summit any document transferring
my interest and ownership in favor of a third party. Or, at least,
they could have annotated in Tax Declaration No. 00949-A the
fact that I bought my 5,000 sq.m. from a public auction sale
duly conducted by the court sheriff. Alternatively, Linatoc and
Mistas should have advised Summit to the effect that since
they already appear to be the owners of the subject parcel of
land, the new tax declaration should bear their name instead.
Mistas and Linatoc indeed conspired with Summit in the illegal
and unwarranted cancellation of my TD and in covering up the
behind-the-scenes activities of Summit by making it appear
that it was Francisco Catigbac who caused the cancellation.
Even Leonardo Yagin, the alleged attorney-in-fact did not
appear before Mistas and Linatoc. Yagin could not have
appeared because he is rumored to be long dead. The
aforementioned acts of the two benefitted (sic) Summit through
their manifest partiality, evident bad faith and/or gross
inexcusable negligence. Perhaps, there is some truth to the
rumor that Yagin is dead because he does not even have a TIN
in the questioned Deed of Absolute Sale. If indeed Yagin is
already dead or inexistent[,] the allged payment of the
purchase price of P5,282,400.00 on July 25, 2002 is a mere
product of the fertile imagination of Orense and
Leviste.1avvphi1.zw+ To dispute this assertion[,] the live body
of Leonardo Yagin must be presented by Orense and Leviste.23
After filing her Affidavit Complaint, petitioner attempted to have
the Sheriff’s Deed of Final Sale/Conveyance of her 5,000
square meter pro-indiviso share in Lot 13713 registered with
the Register of Deeds of Lipa City. She also sought the
annotation of her Affidavit of Adverse Claim on the said 5,000
square meters on TCT No. T-134609 of Summit Realty.
Escutin, the Register of Deeds of Lipa City, relying on the
finding of Examiner Juanita H. Sta. Ana (Sta. Ana), refused to
have the Sheriff’s Deed of Final Sale/Conveyance registered,
since:
The Sheriff’s Deed of Final Sale/Conveyance is a Mode of
Transfers (sic) ownership in favor of the Plaintiff, [Dinah] C.
Castillo, (sic) However[,] it happen (sic) that the presented Tax
Declaration [No.] 00942-A is already transfer (sic) in the name
of the said [Dinah] C. Castillo, therefore[,] the registration of
Sheriff (sic) Final Sale is no longer necessary.24
Escutin likewise denied petitioner’s request to have her
Affidavit of Adverse Claim annotated on TCT No. T-134609 on
the following grounds:
1. The claimants (sic) rights or interest is not adverse to the
registered owner. The registered owner is Summit Point Realty
and Development Corporation under Transfer Certificate of
Title No. T-134609 of the Registry of Deeds for Lipa City.
2. The records of the Registry reveals that the source of the
rights or interest of the adverse claimant is by virtue of a Levy
on Execution by the Regional Trial Court Fourth Judicial
Region, Branch 30, San Pablo City, in Civil Case No. SP-4489
(1996), [Dinah] C. Castillo vs. Raquel Buenaventura. The
registered owner, Summit Point Realty and Development
Corporation nor its predecessor-in-interest are not the
judgment debtor or a party in the said case. Simply stated,
there is no privity of contract between them (Consulta No. 1044
and 1119). If ever, her adverse claim is against Raquel
Buenaventura, the judgment debtor who holds no title over the
property.25
Escutin did mention, however, that petitioner may elevate en
consulta to the Land Registration Authority (LRA) the denial of
her request for registration of the Sheriff’s Deed of Final Sale/
Conveyance and annotation of her adverse claim on TCT No.
T-134609. This petitioner did on 3 July 2003.
While her Consulta was pending before the LRA, petitioner
filed a Supplemental Complaint Affidavit26 and a Second
Supplemental Complaint Affidavit27 with the Office of the
Deputy Ombudsman for Luzon, bringing to its attention the
aforementioned developments. In her Second Supplemental
Complaint Affidavit, petitioner prayed that Sta. Ana be included
as a co-respondent in OMB-L-A-03-0573-F and OMB-LC-03-0728-F, averring that the latter’s actuation deprived
petitioner of a factual basis for securing a new title in her favor
over her 5,000 square meter pro-indiviso share in Lot 13713,
because the public auction sale of the said property to her
could never become final without the registration of the
Sheriff’s Deed.
The persons charged in OMB-L-A-03-0573-F and OMB-LC-03-0728-F filed their respective Counter-Affidavits.
Respondent Escutin clarified in his Counter Affidavit that TCT
No. T-134609 reflected the same date and time of entry of the
Deed of Absolute Sale between Yagin (as Catigbac’s attorneyin-fact) and Summit Realty, i.e., 25 July 2002 at 2:30 p.m., in
accordance with Section 5628 of Presidential Decree No. 1529,
otherwise known as the Property Registration Decree. He
emphasized that his duty as Register of Deeds to register the
Deed of Absolute Sale presented before him was purely
ministerial. If the document was legal and in due form, and
there was nothing mutilated or irregular on its face, the
Register of Deeds had no authority to inquire into its intrinsic
validity based upon proofs aliunde. It was not true that he
allowed the registration of the Deed of Absolute Sale
notwithstanding the absence of the required documents
supporting the application for registration thereof. On the
contrary, all the required documents such as the DAR
Clearance, Bureau of Internal Revenue (BIR) Certificate
Authorizing Registration (CAR), Real Property Tax, Transfer
Tax, Secretary’s Certificate and Articles of Incorporation of
Summit Realty were submitted. While it was true that the
Secretary’s Certificate did not accompany the Deed of Absolute
Sale upon the presentation of the latter for registration, Section
117 of the Property Registration Decree gives the party
seeking registration five days to comply with the rest of the
requirements; and only if the party should still fail to submit the
same would it result in the denial of the registration. The
License to Sell and the Housing and Land Use Regulatory
Board Registration of Summit Realty are only required when a
subdivision project is presented for registration. The use of
TINs in certain documents is a BIR requirement. The BIR itself
did not require from Yagin as vendor his TIN in the Deed of
Absolute Sale, and issued the CAR even in the absence
thereof. The Register of Deeds, therefore, was only bound by
the CAR. As to the Certification earlier issued by the Register
of Deeds of Lipa City attesting that Lot 13713 in the name of
co-owners Raquel, Urbana, and Perla, was not covered by any
certificate of title, Escutin explained that the Register of Deeds
was not technically equipped to determine whether a cadastral
lot number was within a titled property or not. Lastly, Escutin
denied conspiring or participating in the cancellation of
petitioner’s Tax Declaration No. 00942-A for, as Register of
Deeds, he was not concerned with the issuance (or
cancellation) of tax declarations.
Respondent Mistas, the Assistant City Assessor for
Administration of the Office of the City Assessor, Lipa City,
disputed petitioner’s allegations that she personally received
from petitioner copies of the Notice of Levy and other
supporting documents, and that she caused the disappearance
thereof. Although she admitted that said documents were
shown to her by petitioner, she referred petitioner to the
Receiving Clerk, Lynie Reyes, who accordingly received the
same. Mistas maintained that she was not the custodian of
records of the Office and she should not be held responsible
for the missing documents. She opined that petitioner’s
documents could have been among those misplaced or
destroyed when the Office of the City Assessor was flooded
with water leaking from the toilet of the Office of the City Mayor.
As Assistant City Assessor for Administration, Mistas identified
her main function to be the control and management of all
phases of administrative matters and support. She had no
hand in the cancellation of petitioner’s Tax Declaration No.
00942-A, and the issuance of Catigbac’s Tax Declaration No.
00949-A for such function pertained to another division over
which she did not exercise authority. Thus, it was also not
within her function or authority to demand the presentation of
certain documents to support the cancellation of petitioner’s
Tax Declaration No. 00942-A or to cause the annotation of
petitioner’s interest on Catigbac’s Tax Declaration No. 00949A.
Respondent Linatoc averred that as Local Assessment
Operation Officer II of the Office of the City Assessor, Lipa City,
she was in charge of safekeeping and updating the North
District Records. With respect to the transfer of a tax
declaration from one name to another, her duty was limited
only to the act of preparing the new tax declaration and
assigning it a number, in lieu of the cancelled tax declaration. It
was a purely ministerial duty. She had no authority to demand
the presentation of any document or question the validity of the
transfer. Neither was it within her jurisdiction to determine
whether petitioner’s interest should have been annotated on
Catigbac’s Tax Declaration No. 00949-A. Examining the
documents presented in support of the transfer of the tax
declaration to another’s name was a function belonging to
other divisions of the Office of the City Assessors. The flow of
work, the same as in any other ordinary transaction, mandated
her to cancel petitioner’s Tax Declaration No. 00942-A, and to
prepare and release Catigbac’s Tax Declaration No. 00949-A
after the transfer had been reviewed and approved by other
divisions of the Office. It was also not true that TCT No.
129642 in the name of Catigbac was already cancelled when it
was presented before the Office of the City Assessors; the
photocopy of said certificate of title with the Office bore no
mark of cancellation.
Leviste and Orense, the private individuals charged with the
respondent public officers, admitted that they were corporate
officers of Summit Realty. They related that Summit Realty
bought a parcel of land measuring 105,648 square meters,
later identified as Lot 1-B, previously included in TCT No. 181,
then specifically covered by TCT No. 129642, both in the name
of Catigbac. As a result of such purchase, ownership of Lot 1-B
was transferred from Catigbac to Summit Realty. Summit
Realty had every reason to believe in good faith that said
property was indeed owned by Catigbac on the basis of the
latter’s certificate of title over the same. Catigbac’s right as
registered owner of Lot 1-B under TCT No. 181/No. 129642,
was superior to petitioner’s, which was based on a mere tax
declaration. Leviste and Orense rebutted petitioner’s assertion
that the Deed of Absolute Sale between Yagin, as Catigbac’s
attorney-in-fact, and Summit Realty was a "one-way street."
The Deed was actually signed on the left margin by both Yagin
and the representative of Summit Realty. The inadvertent
failure of the representative of Summit Realty to sign the last
page of the Deed and of both parties to indicate their TINs
therein did not invalidate the sale, especially since the Deed
was signed by witnesses attesting to its due execution.
Questions as regards the scope of Catigbac’s Special Power of
Attorney in favor of Yagin and the effectivity of the same after
Catigbac’s death can only be raised in an action directly
attacking the title of Summit Realty over Lot 1-B, and not in an
administrative case and/or preliminary investigation before the
Ombudsman, which constituted a collateral attack against said
title. Leviste and Orense further explained that since the
owner’s duplicate of TCT No. 181 was lost and was judicially
ordered replaced only on 3 January 2001, entries/inscriptions
were necessarily made thereon after said date. As to Orense’s
failure to show petitioner any document proving ownership of
Lot 1-B by Summit Realty when the latter paid him a visit, it
was not due to the lack of such documents, but because of
petitioner’s failure to establish her right to peruse the same.
Orense also denied ever threatening petitioner during their
meeting. Finally, according to Leviste and Orense, petitioner’s
allegations were based on mere conjectures and unsupported
by evidence. That particular acts were done or not done by
certain public officials was already beyond the control of
Leviste and Orense, and just because they benefited from
these acts did not mean that they had a hand in the
commission or omission of said public officials.
After more exchange of pleadings, OMB-L-A-03-0573-F and
OMB-L-C-03-0728-F were finally submitted for resolution.
In a Joint Resolution29 dated 28 April 2004, the Office of the
Deputy Ombudsman for Luzon gave more credence to
respondent Escutin’s defenses, as opposed to petitioner’s
charges against him:
Going to the charges against respondent Escutin, he
convincingly explained that he allowed the registration of the
allegedly defective Deed of Sale because he, as Register of
Deeds, has no power to look into the intrinsic validity [of] the
contract presented to him for registration, owing to the
ministerial character of his function. Moreover, as sufficiently
explained by said respondent, all the documents required for
the registration of the Deed of Sale were submitted by the
applicant.
We likewise find said respondent’s explanation satisfactory that
Section 56 of P.D. 1529 mandates that the TCT bear the date
of registration of the instrument on which the said TCT’s
issuance was based. It is for this reason that TCT 134609
bears the same date and time as the registration of the Deed
of Absolute Sale, which deed served as basis for its issuance.
As to his denial to register [herein petitioner’s] Affidavit of
Adverse Claim and Sheriff’s Certificate of Final Sale, through
the issuance by the Registry of Deeds Examiner Juanita H.
Sta. Ana, of the 29 June 2003 Order denying registration
thereof, such matter had been raised by herein [petitioner] in a
letter-consulta to the Administrator of the Land Registration
Authority (LRA) on 03 July 2003. As the criminal and
administrative charges respecting this issue is premised, in
part, on a matter still pending with the LRA, we find it
premature to make a finding on the same.
It is for the same reason that we deny the motion contained in
the Second Supplemental Complaint Affidavit praying for the
inclusion, as additional respondent, of Juanita H. Sta. Ana, who
is impleaded solely on the basis of having signed, by authority
of Escutin, the 29 July 2003 Order of denial of [petitioner’s]
application for registration.
Finally, respondent Escutin was able to successfully
demonstrate, through Consulta 2103 dated 25 July 1994,
wherein the denial of registration by the Examiner of the
Registry of Deeds of Quezon City was upheld by the LRA
Administrator, that the (sic) it was practice in the different
Registries that Examiners are given authority by the Register
to sign letters of denial.30
The Office of the Deputy Ombudsman for Luzon declared in
the same Joint Resolution that there was no basis to hold
respondents Mistas and Linatoc administratively or criminally
liable:
In this respect, this Office notes that while [herein petitioner]
alleges that Aquilina Mistas caused the disappearance of the
Notice of Levy and other supporting documents received from
[petitioner] on 13 March 2003 when she applied for the
issuance of a Tax Declaration in her favor, she did not present
her receiving copy thereof showing that it was Mistas who
received said documents from her. Neither did she show that
Mistas is the employee responsible for record safekeeping.
Next, we find, as convincingly answered, the allegation that
respondent Marietta Linatoc cancelled Tax Declaration No.
00942-A and issued Tax Declaration 00949-Q (sic) on the basis
of a cancelled Transfer Certificate of Title upon the behest of
Summit [Realty], which was not the registered owner of the
property.
Respondent Linatoc, meeting squarely [petitioner’s] allegation,
admits having physically cancelled Tax Declaration No. 00942A and having prepared a new declaration covering the same
property in Catigbac’s [name], as mandated by the flow of work
in the City Assessor’s Office. However, she denies having the
authority or discretion to evaluate the correctness and
sufficiency of the documents supporting the application for the
issuance of the Tax Declaration, arguing that her official
function is limited to the physical preparation of a new tax
declaration, the assignment of a new tax declaration number
and the cancellation of the old tax declaration, after the
application had passed the other divisions of the City
Assessor’s Office.
Verily, [petitioner] failed to establish that respondent Mistas and
Linatoc, are the ones officially designated to receive
applications for issuance of Tax Declaration, evaluate the
sufficiency of the documents supporting such applications, and
on the basis of the foregoing recommend or order the
cancellation of an existing Tax Declaration and direct the
annotation of any fact affecting the property and direct the
issuance of a new tax declaration covering the same property.
In fact, there is even a discrepancy as to the official
designation of said respondents. While [petitioner] impleads
Mistas, in her capacity as Local Assessment Officer, and
Linatoc, in her capacity as Records Clerk, Mistas, in her
counter-affidavit, alleges a different designation, i.e., Assistant
City Assessor for Administration, while Linatoc claims to be the
Local Assessment Operation Officer II of the City Assessor’s
Office.
With the scope of work of said respondents not having been
neatly defined by [petitioner], this Office cannot make a
definitive determination of their liability for Grave Misconduct
and violation of Section 3(e) of R.A. No. 3019, which charges
both relate to the performance or discharge of Mistas’ and
Linatoc’s official duties.31
Neither did the Office of the Deputy Ombudsman for Luzon find
any probable cause to criminally charge private individuals
Leviste and Orense for the following reasons:
Anent private respondents, with the alleged conspiracy to
unlawfully cause the transfer of the title of [herein petitioner’s]
property to Summit sufficiently explained by respondent
Register of Deeds, such allegation against private respondents
loses a legal leg to stand on.1avvphi.zw+
Inasmuch as [petitioner] was not able to sufficiently outline the
official functions of respondents Mistas and Linatoc to pin down
their specific accountabilities, the imputation that private
respondent (sic) conspired with said public respondents
respecting the cancellation of Tax Declaration No. 00942-A is
likewise stripped of any factual and legal bases.32
As to whether petitioner was indeed unlawfully deprived of her
5,000 square meter property, which issue comprised the very
premise of OMB-L-A-03-0573-F and OMB-L-C-03-0728-F, the
Office of the Deputy Ombudsman for Luzon ruled that such
matter was not within its jurisdiction and should be raised in a
civil action before the courts of justice.
In the end, the Office of the Ombudsman decreed:
WHEREFORE premises considered, it is respectfully
recommended that : (1) the administrative case against public
respondents ANTONIO M. ESCUTIN, AQUILINA A. MISTAS
and MARIETA L. LINATOC be DISMISSED, for lack of
substantial evidence; and (2) the criminal case against the
same respondents including private respondent LAURO S.
LEVISTE II and BENEDICTO L. ORENSE, be DISMISSED, for
lack of probable cause.33
In a Joint Order34 dated 20 June 2005, the Office of the Deputy
Ombudsman for Luzon denied petitioner’s Motion for
Reconsideration.
The Office of the Deputy Ombudsman for Luzon, in its Joint
Order, took notice of the Resolution dated 17 December 2002
of the LRA in Consulta No. 3483, which involved
circumstances similar to those in petitioner’s case. The LRA
distinguished between two systems of land registration: one is
the Torrens system for registered lands under the Property
Registration Decree, and the other is the system of registration
for unregistered land under Act No. 3344 (now Section 113 of
the Property Registration Decree). These systems are
separate and distinct from each other. For documents involving
registered lands, the same should be recorded under the
Property Registration Decree. The registration, therefore, of an
instrument under the wrong system produces no legal effect.
Since it appeared that in Consulta No. 3483, the registration of
the Kasulatan ng Sanglaan, the Certificate of Sale and the
Affidavit of Consolidation was made under Act No. 3344, it did
not produce any legal effect on the disputed property, because
the said property was already titled when the aforementioned
documents were executed and presented for registration, and
their registration should have been made under the Property
Registration Decree.
Furthermore, the Office of the Deputy Ombudsman for Luzon,
in the same Joint Order, took into account petitioner’s
withdrawal of her appeal en consulta before the LRA of the
denial by the Register of Deeds of her request for registration
of the Sheriff’s Deed of Final Sale/Conveyance and Affidavit of
Adverse Claim, which prompted the LRA Administrator to
declare the consulta moot and academic. For want of a
categorical declaration on the registerability of petitioner’s
documents from the LRA, the competent authority to rule on
the said matter, there could be no basis for a finding that
respondent public officers could be held administratively or
criminally liable for the acts imputed to them.
Petitioner sought recourse from the Court of Appeals by filing a
Petition for Review under Rule 43 of the Rules of Court
challenging the 28 April 2004 Joint Resolution and 20 June
2005 Joint Order of the Office of the Deputy Ombudsman for
Luzon.35 The appeal was docketed as CA-G.R. SP No.
90533.1avvphi1
The Court of Appeals promulgated its Decision36 on 18 October
2005, also finding no reason to administratively or criminally
charge respondents. Essentially, the appellate court adjudged
that petitioner can not impute corrupt motives to respondents’
acts:
Without evidence showing that respondents received any gift,
money or other pay-off or that they were induced by offers of
such, the Court cannot impute any taint of direct corruption in
the questioned acts of respondents. Thus, any indication of
intent to violate the laws or of flagrant disregard of established
rule may be negated by respondents’ honest belief that their
acts were sanctioned under the provisions of existing law and
regulations. Such is the situation in the case at bar.
Respondent Register of Deeds acted in the honest belief that
the agency recognized by the court in LRC Case No. 00-0376
between the registered owner Francisco Catigbac and
Leonardo Yagin subsisted with respect to the conveyance or
sale of Lot 1 to Summit as the vendee, and that the Special
Power of Attorney and Deed of Absolute Sale presented as
evidence during said proceedings are valid and binding.
Hence, respondent Escutin was justified in believing that there
is no legal infirmity or defect in registering the documents and
proceeding with the transfer of title of Lot 1 in the name of the
new owner Summit. On the other hand, respondent Linatoc
could not be held administratively liable for effecting the
cancellation in the course of ordinary flow of work in the City
Assessor’s Office after the documents have undergone the
necessary evaluation and verification by her superiors.37
The Court of Appeals referred to the consistent policy of the
Supreme Court not to interfere with the exercise by the
Ombudsman of his investigatory power. If the Ombudsman,
using professional judgment, finds the case dismissible, the
Court shall respect such findings, unless clothed with grave
abuse of discretion. The appellate court pronounced that there
was no grave abuse of discretion on the part of the Office of
the Deputy Ombudsman for Luzon in dismissing petitioner’s
Complaint Affidavit against respondents.
Hence, the dispositive portion of the Decision of the Court of
Appeals reads:
WHEREFORE, premises considered, the present petition is
hereby DISMISSED for lack of merit. The challenged Joint
Resolution dated April 28, 2004 and Joint Order dated June 20,
2005 in OMB-L-A-03-0573-F and OMB-L-C-03-0728-F are
hereby AFFIRMED.38
In its Resolution dated 11 January 2006, the Court of Appeals
denied petitioner’s Motion for Reconsideration for failing to
present new matter which the appellate court had not already
considered in its earlier Decision.
Petitioner now comes before this Court via the instant Petition
for Review on Certiorari, with the following assignment of
errors:
I.
THE HONORABLE COURT OF APPEALS
PATENTLY ERRED IN AFFIRMING THE
CANCELLATION OF THE TAX DECLARATION
00942 OF PETITIONER IN VIOLATION OF
SECTION 109 OF PRESIDENTIAL DECREE
1529, OTHERWISE KNOWN AS THE
PROPERTY REGISTRATION ACT (sic);
II.
THE HONORABLE COURT OF APPEALS
PAT E N T LY E R R E D I N R U L I N G T H AT
RESPONDENTS COULD NOT BE HELD
ADMINISTRATIVELY LIABLE FOR UNDULY
FAVORING SUMMIT TO THE DAMAGE AND
PREJUDICE OF PETITIONER.39
The Petition at bar is without merit.
As to the first issue, petitioner invokes Section 109 of the
Property, Registration Decree which provides:
SEC. 109. Notice and replacement of lost duplicate certificate.
– In case of loss or theft of an owner’s duplicate certificate of
title, due notice under oath shall be sent by the owner or by
someone in his behalf to the Register of Deeds of the province
or city where the land lies as soon as the loss or theft is
discovered. If a duplicate certificate is lost or destroyed, or
cannot be produced by a person applying for the entry of a
new certificate to him or for the registration of any new
instrument, a sworn statement of the fact of such loss or
destruction may be filed by the registered owner or other
person in interest and registered.
Upon the petition of the registered owner or other person in
interest, the court may, after notice and due hearing, direct the
issuance of a new duplicate certificate, which shall contain a
memorandum of the fact that it is issued in place of the lost
duplicate certificate, but shall in all respects be entitled to like
faith and credit as the original duplicate, and shall thereafter be
regarded as such for all purposes of this decree.
Petitioner argues that the RTC, in LRC Case No. 00-0376, only
ordered the issuance of a new owner’s duplicate of TCT No.
181 in lieu of the lost one. However, respondents did not only
issue a new owner’s duplicate of TCT No. 181, but also
cancelled petitioner’s Tax Declaration No. 00942-A and issued
in its place Tax Declaration No. 00949-A in the name of
Catigbac. Respondents did not even annotate petitioner’s
existing right over 5,000 square meters of Lot 1-B or notify
petitioner of the cancellation of her Tax Declaration No. 00942A. Petitioner maintains that a new owner’s duplicate of title is
not a mode of acquiring ownership, nor is it a mode of losing
one. Under Section 109 of the Property Registration Decree,
the new duplicate of title was issued only to replace the old; it
cannot cancel existing titles.
Petitioner’s position on this issue rests on extremely tenuous
arguments and befuddled reasoning.
Before anything else, the Court must clarify that a title is
different from a certificate of title. Title is generally defined as
the lawful cause or ground of possessing that which is ours. It
is that which is the foundation of ownership of property, real or
personal.40 Title, therefore, may be defined briefly as that which
constitutes a just cause of exclusive possession, or which is
the foundation of ownership of property.41 Certificate of title, on
the other hand, is a mere evidence of ownership; it is not the
title to the land itself.42 Under the Torrens system, a certificate
of title may be an Original Certificate of Title, which constitutes
a true copy of the decree of registration; or a Transfer
Certificate of Title, issued subsequent to the original
registration.
Summit Realty acquired its title to Lot 1-B, not from the
issuance of the new owner’s duplicate of TCT No. 181, but
from its purchase of the same from Yagin, the attorney-in-fact
of Catigbac, the registered owner of the said property. Summit
Realty merely sought the issuance of a new owner’s duplicate
of TCT No. 181 in the name of Catigbac so that it could
accordingly register thereon the sale in its favor of a substantial
portion of Lot 1 covered by said certificate, later identified as
Lot 1-B. Catigbac’s title to Lot 1-B passed on by sale to Summit
Realty, giving the latter the right to seek the separation of the
said portion from the rest of Lot 1 and the issuance of a
certificate of title specifically covering the same. This resulted
in the issuance of TCT No. 129642 in the name of Catigbac,
covering Lot 1-B, which was subsequently cancelled and
replaced by TCT No. T-134609 in the name of Summit Realty.
Petitioner’s reliance on Section 109 of the Property
Registration Decree is totally misplaced. It provides for the
requirements for the issuance of a lost duplicate certificate of
title. It cannot, in any way, be related to the cancellation of
petitioner’s tax declaration.
The cancellation of petitioner’s Tax Declaration No. 00942-A
was not because of the issuance of a new owner’s duplicate of
TCT No. 181, but of the fact that Lot 1-B, which encompassed
the 5,000 square meters petitioner lays claim to, was already
covered by TCT No. 181 (and subsequently by TCT No.
129642) in the name of Catigbac. A certificate of title issued is
an absolute and indefeasible evidence of ownership of the
property in favor of the person whose name appears therein. It
is binding and conclusive upon the whole world.43 All persons
must take notice, and no one can plead ignorance of the
registration.44 Therefore, upon presentation of TCT No.
129642, the Office of the City Assessor must recognize the
ownership of Lot 1-B by Catigbac and issue in his name a tax
declaration for the said property. And since Lot 1-B is already
covered by a tax declaration in the name of Catigbac,
accordingly, any other tax declaration for the same property or
portion thereof in the name of another person, not supported
by any certificate of title, such that of petitioner, must be
cancelled; otherwise, the City Assessor would be twice
collecting a realty tax from different persons on one and the
same property.
As between Catigbac’s title, covered by a certificate of title, and
petitioner’s title, evidenced only by a tax declaration, the former
is evidently far superior and is, in the absence of any other
certificate of title to the same property, conclusive and
indefeasible as to Catigbac’s ownership of Lot 1-B. Catigbac’s
certificate of title is binding upon the whole world, including
respondent public officers and even petitioner herself. Time
and again, the Court has ruled that tax declarations and
corresponding tax receipts cannot be used to prove title to or
ownership of a real property inasmuch as they are not
conclusive evidence of the same.45 Petitioner acquired her title
to the 5,000 square meter property from Raquel, her judgment
debtor who, it is important to note, likewise only had a tax
declaration to evidence her title. In addition, the Court of
Appeals aptly observed that, "[c]uriously, as to how and when
petitioner’s alleged predecessor-in-interest, Raquel K. Moratilla
and her supposed co-owners acquired portions of Lot 1
described as Lot 13713 stated in TD No. 00449, petitioner had
so far remained utterly silent."46
Petitioner’s allegations of defects or irregularities in the sale of
Lot 1-B to Summit Realty by Yagin, as Catigbac’s attorney-infact, are beyond the jurisdiction of the Office of the Deputy
Ombudsman for Luzon to consider. It must be remembered
that Summit Realty had already acquired a certificate of title,
TCT No. T-134609, in its name over Lot 1-B, which constitutes
conclusive and indefeasible evidence of its ownership of the
said property and, thus, cannot be collaterally attacked in the
administrative and preliminary investigations conducted by the
Office of the Ombudsman for Luzon. Section 48 of the Property
Registration Decree categorically provides that a certificate of
title shall not be subject to collateral attack. It cannot be
altered, modified, or cancelled except in a direct proceeding in
accordance with law. For this same reason, the Court has no
jurisdiction to grant petitioner’s prayer in the instant Petition for
the cancellation of TCT No. T-134609 in the name of Summit
Realty.
Which now brings the Court to the second issue raised by
petitioner on the administrative liability of respondents.
Before the Court proceeds to tackle this issue, it establishes
that petitioner’s Complaint Affidavit before the Office of the
Ombudsman for Luzon gave rise to two charges: (1) OMB-LA-03-0573-F involved the administrative charge for Gross
Misconduct against respondent public officers; and (2) OMB-LC-03-0728-F concerned the criminal charge for violation of
Section 3(e) of the Anti-Graft and Corrupt Practices Act47
against respondent public officers and private individuals
Leviste and Orense. The Office of the Deputy Ombudsman for
Luzon, affirmed by the Court of Appeals, dismissed both
charges. In the Petition at bar, petitioner only assails the
dismissal of the administrative charge for grave misconduct
against respondent public officers. Since petitioner did not
raise as an issue herein the dismissal by the Office of the
Deputy Ombudsman for Luzon, affirmed by the Court of
Appeals, of the criminal charge against respondent public
officers for violation of Section 3(e) of the Anti-Graft and
Corrupt Practices Act, the same became final and executory.48
In Domingo v. Quimson,49 the Court adopted the well-written
report and recommendation of its Clerk of Court on the
administrative matter then pending and involving the charge of
gross or serious misconduct:
"Under Section 36, par. (b) [1] of PD No. 807, otherwise known
as the Civil Service Decree of the Philippines, 'misconduct' is a
ground for disciplinary action. And under MC No. 8, S. 1970,
issued by the Civil Service Commission on July 28, 1970,
which sets the 'Guidelines in the Application of Penalties in
Administrative Cases and other Matters Relative Thereto,' the
administrative offense of 'grave misconduct' carries with it the
maximum penalty of dismissal from the service (Sec. IV-C[3],
MC No. 8, S. 1970). But the term 'misconduct' as an
administrative offense has a well defined meaning. It was
defined in Amosco vs. Judge Magno, Adm. Mat. No. 439-MJ,
Res. September 30, 1976, as referring 'to a transgression of
some established and definite rule of action, more particularly,
unlawful behavior or gross negligence by the public officer.' It is
a misconduct 'such as affects the performance of his duties as
an officer and not such only as effects his character as a
private individual.' In the recent case of Oao vs. Pabato, etc.,
Adm. Mat. No. 782-MJ, Res. July 29, 1977, the Court defined
'serious misconduct' as follows:
such findings only after a meticulous consideration of the
evidence submitted by the parties.
‘Hence, even assuming that the dismissal of the case is
erroneous, this would be merely an error of judgment and not
serious misconduct. The term `serious misconduct’ is a
transgression of some established and definite rule of action
more particularly, unlawful behavior of gross negligence by the
magistrate. It implies a wrongful intention and not a mere error
of judgment. For serious misconduct to exist, there must be
reliable evidence showing that the judicial acts complained of
were corrupt or inspired by intention to violate the law, or were
a persistent disregard of well-known legal rules. We have
previously ruled that negligence and ignorance on the part of a
judge are inexcusable if they imply a manifest injustice which
cannot be explained by a reasonable interpretation. This is not
so in the case at bar.’" (Italics supplied.)
Respondents were able to clearly describe their official
functions and to convincingly explain that they had only acted
in accordance therewith in their dealings with petitioner and/or
her documents. Respondents also enjoy in their favor the
presumption of regularity in the performance of their official
duty. The burden of proving otherwise by substantial evidence
falls on petitioner, who failed to discharge the same.
To reiterate, for grave misconduct to exist, there must be
reliable evidence showing that the acts complained of were
corrupt or inspired by an intention to violate the law, or were a
persistent disregard of well-known legal rules. Both the Office
of the Deputy Ombudsman for Luzon and the Court of Appeals
found that there was no sufficient evidence to substantiate
petitioner’s charge of grave misconduct against respondents.
For this Court to reverse the rulings of the Office of the Deputy
Ombudsman for Luzon and the Court of Appeals, it must
necessarily review the evidence presented by the parties and
decide on a question of fact. Once it is clear that the issue
invites a review of the evidence presented, the question posed
is one of fact.50
Factual issues are not cognizable by this Court in a Petition for
Review under Rule 45 of the Rules of Court. In order to resolve
this issue, the Court would necessarily have to look into the
probative value of the evidence presented in the proceedings
below. It is not the function of the Court to reexamine or
reevaluate the evidence all over again. This Court is not a trier
of facts, its jurisdiction in these cases being limited to reviewing
only errors of law that may have been committed by the lower
courts or administrative bodies performing quasi-judicial
functions. It should be emphasized that findings made by an
administrative body, which has acquired expertise, are
accorded not only respect but even finality by the Court. In
administrative proceedings, the quantum of evidence required
is only substantial.51
Absent a clear showing of grave abuse of discretion, the Court
shall not disturb findings of fact. The Court cannot weigh once
more the evidence submitted, not only before the Ombudsman,
but also before the Court of Appeals. Under Section 27 of
Republic Act No. 6770, findings of fact by the Ombudsman are
conclusive, as long as they are supported by substantial
evidence.52 Substantial evidence is the amount of relevant
evidence which a reasonable mind might accept as adequate
to justify a conclusion.53
The Court finds no reason to disturb the finding of the Office of
the Deputy Ombudsman for Luzon and the Court of Appeals
that respondents did not commit gross misconduct. Evident
from the 28 April 2004 Joint Resolution of the former and the
18 October 2005 Decision of the latter is that they arrived at
From the very beginning, petitioner was unable to identify
correctly the positions held by respondents Mistas and Linatoc
at the Office of the City Assessor. How then could she even
assert that a particular action was within or without their
jurisdiction to perform? While it may be true that petitioner
should have at least been notified that her Tax Declaration No.
00942-A was being cancelled, she was not able to establish
that such would be the responsibility of respondents Mistas or
Linatoc. Moreover, petitioner did not present statutory,
regulatory, or procedural basis for her insistence that
respondents should have done or not done a particular act. A
perfect example was her assertion that respondents Mistas
and Linatoc should have annotated her interest on Tax
Declaration No. 00949-A in the name of Catigbac. However,
she failed to cite any law or rule which authorizes or
recognizes the annotation of an adverse interest on a tax
declaration. Finally, absent any reliable evidence, petitioner’s
charge that respondents conspired with one another and with
corporate officers of Summit Realty is nothing more than
speculation, surmise, or conjecture. Just because the acts of
respondents were consistently favorable to Summit Realty
does not mean that there was a concerted effort to cause
petitioner prejudice. Respondents’ actions were only consistent
with the recognition of the title of Catigbac over Lot 1-B,
transferred by sale to Summit Realty, registered under the
Torrens system, and accordingly evidenced by certificates of
title.
WHEREFORE, premises considered, the instant Petition for
Review is hereby DENIED. The Decision dated 18 October
2005 and Resolution dated 11 January 2006 of the Court of
Appeals in CA-G.R. SP No. 90533 are hereby AFFIRMED in
toto. Costs against the petitioner Dinah C. Castillo.
SO ORDERED.
G.R. No. 140528
December 7, 2011
MARIA TORBELA, represented by her heirs, namely:
EULOGIO TOSINO, husband and children: CLARO,
MAXIMINO, CORNELIO, OLIVIA and CALIXTA, all
surnamed TOSINO, APOLONIA TOSINO VDA. DE RAMIREZ
a n d J U L I TA TO S I N O D E A N ; P E D R O TO R B E L A ,
represented by his heirs, namely: JOSE and DIONISIO,
both surnamed TORBELA; EUFROSINA TORBELA
ROSARIO, represented by her heirs, namely: ESTEBAN T.
ROSARIO, MANUEL T. ROSARIO, ROMULO T. ROSARIO
and ANDREA ROSARIO-HADUCA; LEONILA TORBELA
TAMIN; FERNANDO TORBELA, represented by his heirs,
namely: SERGIO T. TORBELA, EUTROPIA T. VELASCO,
PILAR T. ZULUETA, CANDIDO T. TORBELA, FLORENTINA
T. TORBELA and PANTALEON T. TORBELA; DOLORES
TORBELA TABLADA; LEONORA TORBELA AGUSTIN,
represented by her heirs, namely: PATRICIO, SEGUNDO,
CONSUELO and FELIX, all surnamed AGUSTIN; and
SEVERINA TORBELA ILDEFONSO, Petitioners,
vs.
SPOUSES ANDRES T. ROSARIO and LENA DUQUER O S A R I O a n d B A N C O F I L I P I N O S AV I N G S A N D
MORTGAGE BANK, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 140553
LENA DUQUE-ROSARIO, Petitioner,
vs.
BANCO FILIPINO SAVINGS AND MORTGAGE BANK,
Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
Presently before the Court are two consolidated Petitions for
Review on Certiorari under Rule 45 of the Rules of Court, both
assailing the Decision1 dated June 29, 1999 and Resolution2
dated October 22, 1999 of the Court of Appeals in CA-G.R. CV
No. 39770.
The petitioners in G.R. No. 140528 are siblings Maria Torbela,3
Pedro Torbela,4 Eufrosina Torbela Rosario,5 Leonila Torbela
Tamin, Fernando Torbela,6 Dolores Torbela Tablada, Leonora
Torbela Agustin,7 and Severina Torbela Ildefonso (Torbela
siblings).
The petitioner in G.R. No. 140553 is Lena Duque-Rosario
(Duque-Rosario), who was married to, but now legally
separated from, Dr. Andres T. Rosario (Dr. Rosario). Dr.
Rosario is the son of Eufrosina Torbela Rosario and the
nephew of the other Torbela siblings.
The controversy began with a parcel of land, with an area of
374 square meters, located in Urdaneta City, Pangasinan (Lot
No. 356-A). It was originally part of a larger parcel of land,
known as Lot No. 356 of the Cadastral Survey of Urdaneta,
measuring 749 square meters, and covered by Original
Certificate of Title (OCT) No. 16676,8 in the name of Valeriano
Semilla (Valeriano), married to Potenciana Acosta. Under
unexplained circumstances, Valeriano gave Lot No. 356-A to
his sister Marta Semilla, married to Eugenio Torbela (spouses
Torbela). Upon the deaths of the spouses Torbela, Lot No. 356A was adjudicated in equal shares among their children, the
Torbela siblings, by virtue of a Deed of Extrajudicial Partition9
dated December 3, 1962.
On December 12, 1964, the Torbela siblings executed a Deed
of Absolute Quitclaim10 over Lot No. 356-A in favor of Dr.
Rosario. According to the said Deed, the Torbela siblings "for
and in consideration of the sum of NINE PESOS (₱9.00) x x x
transfer[red] and convey[ed] x x x unto the said Andres T.
Rosario, that undivided portion of THREE HUNDRED
SEVENTY-FOUR square meters of that parcel of land
embraced in Original Certificate of Title No. 16676 of the land
records of Pangasinan x x x."11 Four days later, on December
16, 1964, OCT No. 16676 in Valeriano’s name was partially
cancelled as to Lot No. 356-A and TCT No. 5275112 was
issued in Dr. Rosario’s name covering the said property.
Another Deed of Absolute Quitclaim13 was subsequently
executed on December 28, 1964, this time by Dr. Rosario,
acknowledging that he only borrowed Lot No. 356-A from the
Torbela siblings and was already returning the same to the
latter for ₱1.00. The Deed stated:
That for and in consideration of the sum of one peso (₱1.00),
Philippine Currency and the fact that I only borrowed the above
described parcel of land from MARIA TORBELA, married to
Eulogio Tosino, EUFROSINA TORBELA, married to Pedro
Rosario, PEDRO TORBELA, married to Petra Pagador,
LEONILA TORBELA, married to Fortunato Tamen,
FERNANDO TORBELA, married to Victoriana Tablada,
DOLORES TORBELA, widow, LEONORA TORBELA, married
to Matias Agustin and SEVERINA TORBELA, married to Jorge
Ildefonso, x x x by these presents do hereby cede, transfer and
convey by way of this ABSOLUTE QUITCLAIM unto the said
Maria, Eufrosina, Pedro, Leonila, Fernando, Dolores, Leonora
and Severina, all surnamed Torbela the parcel of land
described above.14 (Emphasis ours.)
The aforequoted Deed was notarized, but was not immediately
annotated on TCT No. 52751.
Following the issuance of TCT No. 52751, Dr. Rosario obtained
a loan from the Development Bank of the Philippines (DBP) on
February 21, 1965 in the sum of ₱70,200.00, secured by a
mortgage constituted on Lot No. 356-A. The mortgage was
annotated on TCT No. 52751 on September 21, 1965 as Entry
No. 243537.15 Dr. Rosario used the proceeds of the loan for
the construction of improvements on Lot No. 356-A.
On May 16, 1967, Cornelio T. Tosino (Cornelio) executed an
Affidavit of Adverse Claim,16 on behalf of the Torbela siblings.
Cornelio deposed in said Affidavit:
3. That ANDRES T. ROSARIO later quitclaimed his rights in
favor of the former owners by virtue of a Deed of Absolute
Quitclaim which he executed before Notary Public Banaga,
and entered in his Notarial Registry as Dec. No. 43; Page No.
9; Book No. I; Series of 1964;
4. That it is the desire of the parties, my aforestated kins, to
register ownership over the above-described property or to
perfect their title over the same but their Deed could not be
registered because the registered owner now, ANDRES T.
ROSARIO mortgaged the property with the DEVELOPMENT
BANK OF THE PHILIPPINES, on September 21, 1965, and for
which reason, the Title is still impounded and held by the said
bank;
5. That pending payment of the obligation with the
DEVELOPMENT BANK OF THE PHILIPPINES or redemption
of the Title from said bank, I, CORNELIO T. TOSINO, in behalf
of my mother MARIA TORBELA-TOSINO, and my Aunts
EUFROSINA TORBELA, LEONILA TORBELA-TAMEN,
DOLORES TORBELA, LEONORA TORBELA-AGUSTIN,
SEVERINA TORBELA-ILDEFONSO, and my Uncles PEDRO
TORBELA and FERNANDO, also surnamed TORBELA, I
request the Register of Deeds of Pangasinan to annotate their
adverse claim at the back of Transfer Certificate of Title No.
52751, based on the annexed document, Deed of Absolute
Quitclaim by ANDRES T. ROSARIO, dated December 28,
1964, marked as Annex "A" and made a part of this Affidavit,
and it is also requested that the DEVELOPMENT BANK OF
THE PHILIPPINES be informed accordingly.17
The very next day, on May 17, 1967, the Torbela siblings had
Cornelio’s Affidavit of Adverse Claim dated May 16, 1967 and
Dr. Rosario’s Deed of Absolute Quitclaim dated December 28,
1964 annotated on TCT No. 52751 as Entry Nos. 27447118
and 274472,19 respectively.
The construction of a four-storey building on Lot No. 356-A was
eventually completed. The building was initially used as a
hospital, but was later converted to a commercial building. Part
of the building was leased to PT&T; and the rest to Mrs. Andrea
Rosario-Haduca, Dr. Rosario’s sister, who operated the Rose
Inn Hotel and Restaurant.
Dr. Rosario was able to fully pay his loan from DBP. Under
Entry No. 520197 on TCT No. 5275120 dated March 6, 1981,
the mortgage appearing under Entry No. 243537 was
cancelled per the Cancellation and Discharge of Mortgage
executed by DBP in favor of Dr. Rosario and ratified before a
notary public on July 11, 1980.
In the meantime, Dr. Rosario acquired another loan from the
Philippine National Bank (PNB) sometime in 1979-1981.
Records do not reveal though the original amount of the loan
from PNB, but the loan agreement was amended on March 5,
1981 and the loan amount was increased to ₱450,000.00. The
loan was secured by mortgages constituted on the following
properties: (1) Lot No. 356-A, covered by TCT No. 52751 in Dr.
Rosario’s name; (2) Lot No. 4489, with an area of 1,862 square
meters, located in Dagupan City, Pangasinan, covered by TCT
No. 24832; and (3) Lot No. 5-F-8-C-2-B-2-A, with an area of
1,001 square meters, located in Nancayasan, Urdaneta,
Pangasinan, covered by TCT No. 104189.21 The amended loan
agreement and mortgage on Lot No. 356-A was annotated on
TCT No. 52751 on March 6, 1981 as Entry No. 520099.22
Five days later, on March 11, 1981, another annotation, Entry
No. 520469,23 was made on TCT No. 52751, canceling the
adverse claim on Lot No. 356-A under Entry Nos.
274471-274472, on the basis of the Cancellation and
Discharge of Mortgage executed by Dr. Rosario on March 5,
1981. Entry No. 520469 consisted of both stamped and
handwritten portions, and exactly reads:
Entry No. 520469. Cancellation of Adverse Claim executed by
Andres Rosario in favor of same. The incumbrance/mortgage
appearing under Entry No. 274471-72 is now cancelled as per
Cancellation and Discharge of Mortgage Ratified before Notary
Public Mauro G. Meris on March 5, 1981: Doc. No. 215; Page
No. 44; Book No. 1; Series Of 1981.
Lingayen, Pangasinan, 3-11, 19981
[Signed: Pedro dela Cruz]
Register of Deeds 24
On December 8, 1981, Dr. Rosario and his wife, DuqueRosario (spouses Rosario), acquired a third loan in the amount
of ₱1,200,000.00 from Banco Filipino Savings and Mortgage
Bank (Banco Filipino). To secure said loan, the spouses
Rosario again constituted mortgages on Lot No. 356-A, Lot No.
4489, and Lot No. 5-F-8-C-2-B-2-A. The mortgage on Lot No.
356-A was annotated on TCT No. 52751 as Entry No.
53328325 on December 18, 1981. Since the construction of a
two-storey commercial building on Lot No. 5-F-8-C-2-B-2-A
was still incomplete, the loan value thereof as collateral was
deducted from the approved loan amount. Thus, the spouses
Rosario could only avail of the maximum loan amount of
₱830,064.00 from Banco Filipino.
Because Banco Filipino paid the balance of Dr. Rosario’s loan
from PNB, the mortgage on Lot No. 356-A in favor of PNB was
cancelled per Entry No. 53347826 on TCT No. 52751 dated
December 23, 1981.
On February 13, 1986, the Torbela siblings filed before the
Regional Trial Court (RTC) of Urdaneta, Pangasinan, a
Complaint for recovery of ownership and possession of Lot No.
356-A, plus damages, against the spouses Rosario, which was
docketed as Civil Case No. U-4359. On the same day, Entry
Nos. 593493 and 593494 were made on TCT No. 52751 that
read as follows:
Entry No. 593494 – Complaint – Civil Case No.
U-4359 (For: Recovery of Ownership and
Possession and Damages. (Sup. Paper).
Entry No. 593493 – Notice of Lis Pendens –
The parcel of land described in this title is
subject to Lis Pendens executed by Liliosa B.
Rosario, CLAO, Trial Attorney dated February
13, 1986. Filed to TCT No. 52751
February 13, 1986-1986 February 13 – 3:30
p.m.
(SGD.) PACIFICO M. BRAGANZA
Register of Deeds27
The spouses Rosario afterwards failed to pay their loan from
Banco Filipino. As of April 2, 1987, the spouses Rosario’s
outstanding principal obligation and penalty charges amounted
to ₱743,296.82 and ₱151,524.00, respectively.28
Banco Filipino extrajudicially foreclosed the mortgages on Lot
No. 356-A, Lot No. 4489, and Lot No. 5-F-8-C-2-B-2-A. During
the public auction on April 2, 1987, Banco Filipino was the lone
bidder for the three foreclosed properties for the price of
₱1,372,387.04. The Certificate of Sale29 dated April 2, 1987, in
favor of Banco Filipino, was annotated on TCT No. 52751 on
April 14, 1987 as Entry No. 610623.30
On December 9, 1987, the Torbela siblings filed before the
RTC their Amended Complaint,31 impleading Banco Filipino as
additional defendant in Civil Case No. U-4359 and praying that
the spouses Rosario be ordered to redeem Lot No. 356-A from
Banco Filipino.
Sale dated May 24, 1988, judicial cancelation of TCT No.
165813, and damages, against Banco Filipino, the Ex Officio
Provincial Sheriff, and the Register of Deeds of Pangasinan,
which was docketed as Civil Case No. U-4733.
On June 19, 1991, Banco Filipino filed before the RTC of
Urdaneta City a Petition for the issuance of a writ of
possession. In said Petition, docketed as Pet. Case No. U-822,
Banco Filipino prayed that a writ of possession be issued in its
favor over Lot No. 5-F-8-C-2-B-2-A and Lot No. 356-A, plus the
improvements thereon, and the spouses Rosario and other
persons presently in possession of said properties be directed
to abide by said writ.
The RTC jointly heard Civil Case Nos. U-4359 and U-4733 and
Pet. Case No. U-822. The Decision38 on these three cases was
promulgated on January 15, 1992, the dispositive portion of
which reads:
WHEREFORE, judgment is rendered:
The spouses Rosario instituted before the RTC on March 4,
1988 a case for annulment of extrajudicial foreclosure and
damages, with prayer for a writ of preliminary injunction and
temporary restraining order, against Banco Filipino, the
Provincial Ex Officio Sheriff and his Deputy, and the Register of
Deeds of Pangasinan. The case was docketed as Civil Case
No. U-4667. Another notice of lis pendens was annotated on
TCT No. 52751 on March 10, 1988 as Entry No. 627059, viz:
1. Declaring the real estate mortgage over Lot 356-A covered
by TCT 52751 executed by Spouses Andres Rosario in favor of
Banco Filipino, legal and valid;
Entry No. 627059 – Lis Pendens – Dr. Andres T.
Rosario and Lena Duque Rosario, Plaintiff
versus Banco Filipino, et. al. Civil Case No.
U-4667 or Annulment of ExtraJudicial
Foreclosure of Real Estate Mortgage – The
parcel of land described in this title is subject to
Notice of Lis Pendens subscribed and sworn to
before Notary Public Mauro G. Meris, as Doc.
No. 21; Page No. 5; Book 111; S-1988. March
7, 1988-1988 March 10, 1:00 p.m.
3. Declaring Banco Filipino the owner of Lot 356-A covered by
TCT No. 52751 (now TCT 165813);
(SGD.) RUFINO M. MORENO, SR.
Register of Deeds32
The Torbela siblings intervened in Civil Case No. U-4667.
Eventually, on October 17, 1990, the RTC issued an Order33
dismissing without prejudice Civil Case No. U-4667 due to the
spouses Rosario’s failure to prosecute.
Meanwhile, the Torbela siblings tried to redeem Lot No. 356-A
from Banco Filipino, but their efforts were unsuccessful. Upon
the expiration of the one-year redemption period in April 1988,
the Certificate of Final Sale34 and Affidavit of Consolidation35
covering all three foreclosed properties were executed on May
24, 1988 and May 25, 1988, respectively.
On June 7, 1988, new certificates of title were issued in the
name of Banco Filipino, particularly, TCT No. 165812 for Lot
No. 5-F-8-C-2-B-2-A and TCT No. 165813 for Lot No. 356-A .36
The Torbela siblings thereafter filed before the RTC on August
29, 1988 a Complaint37 for annulment of the Certificate of Final
2. Declaring the sheriff’s sale dated April 2, 1987 over Lot 356A covered by TCT 52751 and subsequent final Deed of Sale
dated May 14, 1988 over Lot 356-A covered by TCT No. 52751
legal and valid;
4. Banco Filipino is entitled to a Writ of Possession over Lot
356-A together with the improvements thereon (Rose Inn
Building). The Branch Clerk of Court is hereby ordered to issue
a writ of possession in favor of Banco Filipino;
5. [The Torbela siblings] are hereby ordered to render
accounting to Banco Filipino the rental they received from
tenants of Rose Inn Building from May 14, 1988;
6. [The Torbela siblings] are hereby ordered to pay Banco
Filipino the sum of ₱20,000.00 as attorney’s fees;
7. Banco Filipino is hereby ordered to give [the Torbela
siblings] the right of first refusal over Lot 356-A. The Register of
Deeds is hereby ordered to annotate the right of [the Torbela
siblings] at the back of TCT No. 165813 after payment of the
required fees;
8. Dr. Rosario and Lena Rosario are hereby ordered to
reimburse [the Torbela siblings] the market value of Lot 356-A
as of December, 1964 minus payments made by the former;
9. Dismissing the complaint of [the Torbela siblings] against
Banco Filipino, Pedro Habon and Rufino Moreno in Civil Case
No. U-4733; and against Banco Filipino in Civil Case No.
U-4359.39
The RTC released an Amended Decision40 dated January 29,
1992, adding the following paragraph to the dispositive:
Banco Filipino is entitled to a Writ of Possession over Lot-5F-8-C-2-[B]-2-A of the subdivision plan (LRC) Psd-122471,
covered by Transfer Certificate of Title 104189 of the Registry
of Deeds of Pangasinan[.]41
The Torbela siblings and Dr. Rosario appealed the foregoing
RTC judgment before the Court of Appeals. Their appeal was
docketed as CA-G.R. CV No. 39770.
In its Decision42 dated June 29, 1999, the Court of Appeals
decreed:
WHEREFORE, foregoing considered, the appealed decision is
hereby AFFIRMED with modification. Items No. 6 and 7 of the
appealed decision are DELETED. Item No. 8 is modified
requiring [Dr. Rosario] to pay [the Torbela siblings] actual
damages, in the amount of ₱1,200,000.00 with 6% per annum
interest from finality of this decision until fully paid. [Dr.
Rosario] is further ORDERED to pay [the Torbela siblings] the
amount of ₱300,000.00 as moral damages; ₱200,000.00 as
exemplary damages and ₱100,000.00 as attorney’s fees.
Costs against [Dr. Rosario].43
The Court of Appeals, in a Resolution44 dated October 22,
1999, denied the separate Motions for Reconsideration of the
Torbela siblings and Dr. Rosario.
The Torbela siblings come before this Court via the Petition for
Review in G.R. No. 140528, with the following assignment of
errors:
First Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED
IN NOT FINDING THAT THE REGISTRATION OF THE DEED
OF ABSOLUTE QUITCLAIM EXECUTED BY [DR. ANDRES T.
ROSARIO] IN FAVOR OF THE [TORBELA SIBLINGS] DATED
DECEMBER 28, 1964 AND THE REGISTRATION OF THE
NOTICE OF ADVERSE CLAIM EXECUTED BY THE
[TORBELA SIBLINGS], SERVE AS THE OPERATIVE ACT TO
CONVEY OR AFFECT THE LAND AND IMPROVEMENTS
THEREOF IN SO FAR AS THIRD PERSONS ARE
CONCERNED.
Second Issue and Assignment of Error:
Fourth Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED
IN FINDING THAT RESPONDENT BANCO FILIPINO
SAVINGS AND MORTGAGE BANK IS A MORTGAGEE IN
GOOD FAITH.
Fifth Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED
IN NOT FINDING THAT THE FILING OF A CIVIL CASE NO.
U-4359 ON DECEMBER 9, 1987, IMPLEADING
RESPONDENT BANCO FILIPINO AS ADDITIONAL PARTY
DEFENDANT, TOLL OR SUSPEND THE RUNNING OF THE
ONE YEAR PERIOD OF REDEMPTION.
Sixth Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED
IN NOT FINDING THAT THE OWNERSHIP OVER THE
S U B J E C T P R O P E R T Y WA S P R E M AT U R E LY
CONSOLIDATED IN FAVOR OF RESPONDENT BANCO
FILIPINO SAVINGS AND MORTGAGE BANK.
Seventh Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED
IN FINDING THAT THE SUBJECT PROPERTY IS AT LEAST
WORTH ₱1,200,000.00.45
The Torbela siblings ask of this Court:
WHEREFORE, in the light of the foregoing considerations, the
[Torbela siblings] most respectfully pray that the questioned
DECISION promulgated on June 29, 1999 (Annex "A",
Petition) and the RESOLUTION dated October 22, 1999
(Annex "B", Petition) be REVERSED and SET ASIDE, and/or
further MODIFIED in favor of the [Torbela siblings], and
another DECISION issue ordering, among other reliefs, the
respondent Banco Filipino to reconvey back Lot No. 356-A,
covered by T.C.T. No. 52751, in favor of the [Torbela siblings]
who are the actual owners of the same.
The [Torbela siblings] likewise pray for such other reliefs and
further remedies as may be deemed just and equitable under
the premises.46
THE HONORABLE COURT OF APPEALS GRAVELY ERRED
IN FINDING THAT THE SUBJECT PROPERTY COVERED BY
T.C.T. NO. 52751 IS CLEAN AND FREE, DESPITE OF THE
ANNOTATION OF ENCUMBRANCES OF THE NOTICE OF
ADVERSE CLAIM AND THE DEED OF ABSOLUTE
QUITCLAIM APPEARING AT THE BACK THEREOF AS
ENTRY NOS. 274471 AND 274472, RESPECTIVELY.
Duque-Rosario, now legally separated from Dr. Rosario, avers
in her Petition for Review in G.R. No. 140553 that Lot No. 4489
and Lot No. 5-F-8-C-2-B-2-A were registered in her name, and
she was unlawfully deprived of ownership of said properties
because of the following errors of the Court of Appeals:
Third Issue and Assignment of Error:
THE HON. COURT OF APPEALS PATENTLY ERRED IN NOT
FINDING THAT THE PERIOD TO REDEEM THE PROPERTY
HAS NOT COMMENCED, HENCE, THE CERTIFICATE OF
SALE, THE CONSOLIDATION OF OWNERSHIP BY [BANCO
FILIPINO], ARE NULL AND VOID.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED
IN FINDING THAT THE NOTICE OF ADVERSE CLAIM OF
THE [TORBELA SIBLINGS] UNDER ENTRY NO. 274471 WAS
VALIDLY CANCELLED BY THE REGISTER OF DEEDS, IN
THE ABSENCE OF A PETITION DULY FILED IN COURT FOR
ITS CANCELLATION.
A
B
THE COURT OF APPEALS PATENTLY ERRED IN REFUSING
TO RULE THAT THE FILING OF THE COMPLAINT BEFORE
THE COURT A QUO BY THE [TORBELA SIBLINGS] HAD
ALREADY BEEN PRESCRIBED.47
Duque-Rosario prays that the appealed decision of the Court
of Appeals be reversed and set aside, and that Lot No. 4489
and Lot No. 5-F-8-C-2-B-2-A be freed from all obligations and
encumbrances and returned to her.
Review of findings of fact by the RTC and the Court of Appeals
warranted.
The Torbela siblings instituted Civil Case No. U-4359 on
February 13, 1986, when Presidential Decree No. 1508,
Establishing a System of Amicably Settling Disputes at the
Barangay Level, was still in effect.50 Pertinent provisions of
said issuance read:
Section 2. Subject matters for amicable settlement. The Lupon
of each barangay shall have authority to bring together the
parties actually residing in the same city or municipality for
amicable settlement of all disputes except:
1. Where one party is the government, or any subdivision or
instrumentality thereof;
A disquisition of the issues raised and/or errors assigned in the
Petitions at bar unavoidably requires a re-evaluation of the
facts and evidence presented by the parties in the court a quo.
2. Where one party is a public officer or employee, and the
dispute relates to the performance of his official functions;
In Republic v. Heirs of Julia Ramos,48 the Court summed up
the rules governing the power of review of the Court:
3. Offenses punishable by imprisonment exceeding 30 days, or
a fine exceeding ₱200.00;
Ordinarily, this Court will not review, much less reverse, the
factual findings of the Court of Appeals, especially where such
findings coincide with those of the trial court.http://
s c . j u d i c i a r y. g o v. p h / j u r i s p r u d e n c e / 2 0 1 0 /
february2010/169481.htm - _ftn The findings of facts of the
Court of Appeals are, as a general rule, conclusive and binding
upon this Court, since this Court is not a trier of facts and does
not routinely undertake the re-examination of the evidence
presented by the contending parties during the trial of the case.
4. Offenses where there is no private offended party;
The above rule, however, is subject to a number of exceptions,
such as (1) when the inference made is manifestly mistaken,
absurd or impossible; (2) when there is 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 is contrary to the admissions of both
parties; (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.49
As the succeeding discussion will bear out, the first, fourth, and
ninth exceptions are extant in these case.
Barangay conciliation was not a pre-requisite to the institution
of Civil Case No. U-4359.
Dr. Rosario contends that Civil Case No. U-4359, the
Complaint of the Torbela siblings for recovery of ownership and
possession of Lot No. 356-A, plus damages, should have been
dismissed by the RTC because of the failure of the Torbela
siblings to comply with the prior requirement of submitting the
dispute to barangay conciliation.
5. Such other classes of disputes which the Prime Minister
may in the interest of justice determine upon recommendation
of the Minister of Justice and the Minister of Local
Government.
Section 3. Venue. Disputes between or among persons
actually residing in the same barangay shall be brought for
amicable settlement before the Lupon of said barangay. Those
involving actual residents of different barangays within the
same city or municipality shall be brought in the barangay
where the respondent or any of the respondents actually
resides, at the election of the complainant. However, all
disputes which involved real property or any interest therein
shall be brought in the barangay where the real property or any
part thereof is situated.
The Lupon shall have no authority over disputes:
1. involving parties who actually reside in barangays of
different cities or municipalities, except where such barangays
adjoin each other; and
2. involving real property located in different municipalities.
xxxx
Section 6. Conciliation, pre-condition to filing of complaint. –
No complaint, petition, action or proceeding involving any
matter within the authority of the Lupon as provided in Section
2 hereof shall be filed or instituted in court or any other
government office for adjudication unless there has been a
confrontation of the parties before the Lupon Chairman or the
Pangkat and no conciliation or settlement has been reached as
certified by the Lupon Secretary or the Pangkat Secretary,
attested by the Lupon or Pangkat Chairman, or unless the
settlement has been repudiated. x x x. (Emphases supplied.)
The Court gave the following elucidation on the jurisdiction of
the Lupong Tagapayapa in Tavora v. Hon. Veloso51 :
The foregoing provisions are quite clear. Section 2 specifies
the conditions under which the Lupon of a barangay "shall
have authority" to bring together the disputants for amicable
settlement of their dispute: The parties must be "actually
residing in the same city or municipality." At the same time,
Section 3 — while reiterating that the disputants must be
"actually residing in the same barangay" or in "different
barangays" within the same city or municipality —
unequivocably declares that the Lupon shall have "no
authority" over disputes "involving parties who actually reside
in barangays of different cities or municipalities," except where
such barangays adjoin each other.
conciliation was not a pre-condition for the filing of Civil Case
No. U-4359.
Thus, by express statutory inclusion and exclusion, the Lupon
shall have no jurisdiction over disputes where the parties are
not actual residents of the same city or municipality, except
where the barangays in which they actually reside adjoin each
other.
Indeed, the Torbela siblings executed a Deed of Absolute
Quitclaim on December 12, 1964 in which they transferred and
conveyed Lot No. 356-A to Dr. Rosario for the consideration of
₱9.00. However, the Torbela siblings explained that they only
executed the Deed as an accommodation so that Dr. Rosario
could have Lot No. 356-A registered in his name and use said
property to secure a loan from DBP, the proceeds of which
would be used for building a hospital on Lot No. 356-A – a
claim supported by testimonial and documentary evidence, and
borne out by the sequence of events immediately following the
execution by the Torbela siblings of said Deed. On December
16, 1964, TCT No. 52751, covering Lot No. 356-A, was already
issued in Dr. Rosario’s name. On December 28, 1964, Dr.
Rosario executed his own Deed of Absolute Quitclaim, in which
he expressly acknowledged that he "only borrowed" Lot No.
356-A and was transferring and conveying the same back to
the Torbela siblings for the consideration of ₱1.00. On
February 21, 1965, Dr. Rosario’s loan in the amount of
₱70,200.00, secured by a mortgage on Lot No. 356-A, was
approved by DBP. Soon thereafter, construction of a hospital
building started on Lot No. 356-A.
It is true that immediately after specifying the barangay whose
Lupon shall take cognizance of a given dispute, Sec. 3 of PD
1508 adds:
"However, all disputes which involve real property or any
interest therein shall be brought in the barangay where the real
property or any part thereof is situated."
Actually, however, this added sentence is just an ordinary
proviso and should operate as such.
The operation of a proviso, as a rule, should be limited to its
normal function, which is to restrict or vary the operation of the
principal clause, rather than expand its scope, in the absence
of a clear indication to the contrary.
"The natural and appropriate office of a proviso is . . . to except
something from the enacting clause; to limit, restrict, or qualify
the statute in whole or in part; or to exclude from the scope of
the statute that which otherwise would be within its terms." (73
Am Jur 2d 467.)
Therefore, the quoted proviso should simply be deemed to
restrict or vary the rule on venue prescribed in the principal
clauses of the first paragraph of Section 3, thus: Although
venue is generally determined by the residence of the parties,
disputes involving real property shall be brought in the
barangay where the real property or any part thereof is
situated, notwithstanding that the parties reside elsewhere
within the same city/municipality.52 (Emphases supplied.)
The original parties in Civil Case No. U-4359 (the Torbela
siblings and the spouses Rosario) do not reside in the same
barangay, or in different barangays within the same city or
municipality, or in different barangays of different cities or
municipalities but are adjoining each other. Some of them
reside outside Pangasinan and even outside of the country
altogether. The Torbela siblings reside separately in Barangay
Macalong, Urdaneta, Pangasinan; Barangay Consolacion,
Urdaneta, Pangasinan; Pangil, Laguna; Chicago, United States
of America; and Canada. The spouses Rosario are residents of
Calle Garcia, Poblacion, Urdaneta, Pangasinan. Resultantly,
the Lupon had no jurisdiction over the dispute and barangay
The Court now looks into the merits of Civil Case No. U-4359.
There was an express trust between the Torbela siblings and
Dr. Rosario.
There is no dispute that the Torbela sibling inherited the title to
Lot No. 356-A from their parents, the Torbela spouses, who, in
turn, acquired the same from the first registered owner of Lot
No. 356-A, Valeriano.
Among the notable evidence presented by the Torbela siblings
is the testimony of Atty. Lorenza Alcantara (Atty. Alcantara),
who had no apparent personal interest in the present case.
Atty. Alcantara, when she was still a boarder at the house of
Eufrosina Torbela Rosario (Dr. Rosario’s mother), was
consulted by the Torbela siblings as regards the extrajudicial
partition of Lot No. 356-A. She also witnessed the execution of
the two Deeds of Absolute Quitclaim by the Torbela siblings
and Dr. Rosario.
In contrast, Dr. Rosario presented TCT No. 52751, issued in
his name, to prove his purported title to Lot No. 356-A. In Lee
Tek Sheng v. Court of Appeals,53 the Court made a clear
distinction between title and the certificate of title:
The certificate referred to is that document issued by the
Register of Deeds known as the Transfer Certificate of Title
(TCT). By title, the law refers to ownership which is
represented by that document. Petitioner apparently confuses
certificate with title. Placing a parcel of land under the mantle
of the Torrens system does not mean that ownership thereof
can no longer be disputed. Ownership is different from a
certificate of title. The TCT is only the best proof of ownership
of a piece of land. Besides, the certificate cannot always be
considered as conclusive evidence of ownership. Mere
issuance of the certificate of title in the name of any person
does not foreclose the possibility that the real property may be
under co-ownership with persons not named in the certificate
or that the registrant may only be a trustee or that other parties
may have acquired interest subsequent to the issuance of the
certificate of title. To repeat, registration is not the equivalent of
title, but is only the best evidence thereof. Title as a concept of
ownership should not be confused with the certificate of title as
evidence of such ownership although both are interchangeably
used. x x x.54 (Emphases supplied.)
Registration does not vest title; it is merely the evidence of
such title. Land registration laws do not give the holder any
better title than what he actually has.55 Consequently, Dr.
Rosario must still prove herein his acquisition of title to Lot No.
356-A, apart from his submission of TCT No. 52751 in his
name.
Dr. Rosario testified that he obtained Lot No. 356-A after
paying the Torbela siblings ₱25,000.00, pursuant to a verbal
agreement with the latter. The Court though observes that Dr.
Rosario’s testimony on the execution and existence of the
verbal agreement with the Torbela siblings lacks significant
details (such as the names of the parties present, dates,
places, etc.) and is not corroborated by independent evidence.
In addition, Dr. Rosario acknowledged the execution of the two
Deeds of Absolute Quitclaim dated December 12, 1964 and
December 28, 1964, even affirming his own signature on the
latter Deed. The Parol Evidence Rule provides that when the
terms of the agreement have been reduced into writing, it is
considered as containing all the terms agreed upon and there
can be, between the parties and their successors in interest,
no evidence of such terms other than the contents of the
written agreement.56 Dr. Rosario may not modify, explain, or
add to the terms in the two written Deeds of Absolute Quitclaim
since he did not put in issue in his pleadings (1) an intrinsic
ambiguity, mistake, or imperfection in the Deeds; (2) failure of
the Deeds to express the true intent and the agreement of the
parties thereto; (3) the validity of the Deeds; or (4) the
existence of other terms agreed to by the Torbela siblings and
Dr. Rosario after the execution of the Deeds.57
Even if the Court considers Dr. Rosario’s testimony on his
alleged verbal agreement with the Torbela siblings, the Court
finds the same unsatisfactory. Dr. Rosario averred that the two
Deeds were executed only because he was "planning to
secure loan from the Development Bank of the Philippines and
Philippine National Bank and the bank needed absolute
quitclaim[.]"58 While Dr. Rosario’s explanation makes sense for
the first Deed of Absolute Quitclaim dated December 12, 1964
executed by the Torbela siblings (which transferred Lot No.
356-A to Dr. Rosario for ₱9.00.00), the same could not be said
for the second Deed of Absolute Quitclaim dated December
28, 1964 executed by Dr. Rosario. In fact, Dr. Rosario’s Deed
of Absolute Quitclaim (in which he admitted that he only
borrowed Lot No. 356-A and was transferring the same to the
Torbela siblings for ₱1.00.00) would actually work against the
approval of Dr. Rosario’s loan by the banks. Since Dr.
Rosario’s Deed of Absolute Quitclaim dated December 28,
1964 is a declaration against his self-interest, it must be taken
as favoring the truthfulness of the contents of said Deed.59
It can also be said that Dr. Rosario is estopped from claiming
or asserting ownership over Lot No. 356-A based on his Deed
of Absolute Quitclaim dated December 28, 1964. Dr. Rosario's
admission in the said Deed that he merely borrowed Lot No.
356-A is deemed conclusive upon him. Under Article 1431 of
the Civil Code, "[t]hrough estoppel an admission or
representation is rendered conclusive upon the person making
it, and cannot be denied or disproved as against the person
relying thereon."60 That admission cannot now be denied by Dr.
Rosario as against the Torbela siblings, the latter having relied
upon his representation.
Considering the foregoing, the Court agrees with the RTC and
the Court of Appeals that Dr. Rosario only holds Lot No. 356-A
in trust for the Torbela siblings.
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. 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, while an implied
trust comes into being by operation of law.61
Express trusts are created by direct and positive acts of the
parties, by some writing or deed, or will, or by words either
expressly or impliedly evincing an intention to create a 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."62 It is possible to create a trust
without using the word "trust" or "trustee." Conversely, the
mere fact that these words are used does not necessarily
indicate an intention to create a trust. The question in each
case is whether the trustor manifested an intention to create
the kind of relationship which to lawyers is known as trust. It is
immaterial whether or not he knows that the relationship which
he intends to create is called a trust, and whether or not he
knows the precise characteristics of the relationship which is
called a trust.63
In Tamayo v. Callejo,64 the Court recognized that a trust may
have a constructive or implied nature in the beginning, but the
registered owner’s subsequent express acknowledgement in a
public document of a previous sale of the property to another
party, had the effect of imparting to the aforementioned trust
the nature of an express trust. The same situation exists in this
case. When Dr. Rosario was able to register Lot No. 356-A in
his name under TCT No. 52751 on December 16, 1964, an
implied trust was initially established between him and the
Torbela siblings under Article 1451 of the Civil Code, which
provides:
ART. 1451. When land passes by succession to any person
and he causes the legal title to be put in the name of another, a
trust is established by implication of law for the benefit of the
true owner.
Dr. Rosario’s execution of the Deed of Absolute Quitclaim on
December 28, 1964, containing his express admission that he
only borrowed Lot No. 356-A from the Torbela siblings,
eventually transformed the nature of the trust to an express
one. The express trust continued despite Dr. Rosario stating in
his Deed of Absolute Quitclaim that he was already returning
Lot No. 356-A to the Torbela siblings as Lot No. 356-A
remained registered in Dr. Rosario’s name under TCT No.
52751 and Dr. Rosario kept possession of said property,
together with the improvements thereon.
The right of the Torbela siblings to recover Lot No. 356-A has
not yet prescribed.
The Court extensively discussed the prescriptive period for
express trusts in the Heirs of Maximo Labanon v. Heirs of
Constancio Labanon,65 to wit:
On the issue of prescription, we had the opportunity to rule in
Bueno v. Reyes that unrepudiated written express trusts are
imprescriptible:
"While there are some decisions which hold that an action
upon a trust is imprescriptible, without distinguishing between
express and implied trusts, the better rule, as laid down by this
Court in other decisions, is that prescription does supervene
where the trust is merely an implied one. The reason has been
expressed by Justice J.B.L. Reyes in J.M. Tuason and Co.,
Inc. vs. Magdangal, 4 SCRA 84, 88, as follows:
Under Section 40 of the old Code of Civil Procedure, all actions
for recovery of real property prescribed in 10 years, excepting
only actions based on continuing or subsisting trusts that were
considered by section 38 as imprescriptible. As held in the
case of Diaz v. Gorricho, L-11229, March 29, 1958, however,
the continuing or subsisting trusts contemplated in section 38
of the Code of Civil Procedure referred only to express
unrepudiated trusts, and did not include constructive trusts
(that are imposed by law) where no fiduciary relation exists and
the trustee does not recognize the trust at all."
This principle was amplified in Escay v. Court of Appeals this
way: "Express trusts prescribe 10 years from the repudiation of
the trust (Manuel Diaz, et al. vs. Carmen Gorricho et al., 54
O.G. p. 8429, Sec. 40, Code of Civil Procedure)."
In the more recent case of Secuya v. De Selma, we again ruled
that the prescriptive period for the enforcement of an express
trust of ten (10) years starts upon the repudiation of the trust by
the trustee.66
To apply the 10-year prescriptive period, which would bar a
beneficiary’s action to recover in an express trust, the
repudiation of the trust must be proven by clear and convincing
evidence and made known to the beneficiary.67 The express
trust disables the trustee from acquiring for his own benefit the
property committed to his management or custody, at least
while he does not openly repudiate the trust, and makes such
repudiation known to the beneficiary or cestui que trust. For
this reason, the old Code of Civil Procedure (Act 190) declared
that the rules on adverse possession do not apply to
"continuing and subsisting" (i.e., unrepudiated) trusts. In an
express trust, the delay of the beneficiary is directly attributable
to the trustee who undertakes to hold the property for the
former, or who is linked to the beneficiary by confidential or
fiduciary relations. The trustee's possession is, therefore, not
adverse to the beneficiary, until and unless the latter is made
aware that the trust has been repudiated.68
Dr. Rosario argues that he is deemed to have repudiated the
trust on December 16, 1964, when he registered Lot No. 356-A
in his name under TCT No. 52751, so when on February 13,
1986, the Torbela siblings instituted before the RTC Civil Case
No. U-4359, for the recovery of ownership and possession of
Lot No. 356-A from the spouses Rosario, over 21 years had
passed. Civil Case No. U-4359 was already barred by
prescription, as well as laches.
The Court already rejected a similar argument in Ringor v.
Ringor69 for the following reasons:
A trustee who obtains a Torrens title over a property held in
trust for him by another cannot repudiate the trust by relying on
the registration. A Torrens Certificate of Title in Jose’s name did
not vest ownership of the land upon him. 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. The Torrens system was not intended to foment
betrayal in the performance of a trust. It does not permit one to
enrich himself at the expense of another. Where one does not
have a rightful claim to the property, the Torrens system of
registration can confirm or record nothing. Petitioners cannot
rely on the registration of the lands in Jose’s name nor in the
name of the Heirs of Jose M. Ringor, Inc., for the wrong result
they seek. For Jose could not repudiate a trust by relying on a
Torrens title he held in trust for his co-heirs. The beneficiaries
are entitled to enforce the trust, notwithstanding the
irrevocability of the Torrens title. The intended trust must be
sustained.70 (Emphasis supplied.)
In the more recent case of Heirs of Tranquilino Labiste v. Heirs
of Jose Labiste,71 the Court refused to apply prescription and
laches and reiterated that:
[P]rescription and laches will run only from the time the
express trust is repudiated. The Court has held that for
acquisitive prescription to bar the action of the beneficiary
against the trustee in an express trust for the recovery of the
property held in trust it must be shown that: (a) the trustee has
performed unequivocal acts of repudiation amounting to an
ouster of the cestui que trust; (b) such positive acts of
repudiation have been made known to the cestui que trust, and
(c) the evidence thereon is clear and conclusive. Respondents
cannot rely on the fact that the Torrens title was issued in the
name of Epifanio and the other heirs of Jose. It has been held
that a trustee who obtains a Torrens title over property held in
trust by him for another cannot repudiate the trust by relying on
the registration. The rule requires a clear repudiation of the
trust duly communicated to the beneficiary. The only act that
can be construed as repudiation was when respondents filed
the petition for reconstitution in October 1993. And since
petitioners filed their complaint in January 1995, their cause of
action has not yet prescribed, laches cannot be attributed to
them.72 (Emphasis supplied.)
It is clear that under the foregoing jurisprudence, the
registration of Lot No. 356-A by Dr. Rosario in his name under
TCT No. 52751 on December 16, 1964 is not the repudiation
that would have caused the 10-year prescriptive period for the
enforcement of an express trust to run.
The Court of Appeals held that Dr. Rosario repudiated the
express trust when he acquired another loan from PNB and
constituted a second mortgage on Lot No. 356-A sometime in
1979, which, unlike the first mortgage to DBP in 1965, was
without the knowledge and/or consent of the Torbela siblings.
The Court only concurs in part with the Court of Appeals on
this matter.
For repudiation of an express trust to be effective, the
unequivocal act of repudiation had to be made known to the
Torbela siblings as the cestuis que trust and must be proven by
clear and conclusive evidence. A scrutiny of TCT No. 52751
reveals the following inscription:
Entry No. 520099
Amendment of the mortgage in favor of PNB inscribed under
Entry No. 490658 in the sense that the consideration thereof
has been increased to PHILIPPINE PESOS Four Hundred Fifty
Thousand Pesos only (₱450,000.00) and to secure any and all
negotiations with PNB, whether contracted before, during or
after the date of this instrument, acknowledged before Notary
Public of Pangasinan Alejo M. Dato as Doc. No. 198, Page No.
41, Book No. 11, Series of 1985.
Date of Instrument March 5, 1981
Date of Inscription March 6, 198173
Although according to Entry No. 520099, the original loan and
mortgage agreement of Lot No. 356-A between Dr. Rosario
and PNB was previously inscribed as Entry No. 490658, Entry
No. 490658 does not actually appear on TCT No. 52751 and,
thus, it cannot be used as the reckoning date for the start of
the prescriptive period.
The Torbela siblings can only be charged with knowledge of
the mortgage of Lot No. 356-A to PNB on March 6, 1981 when
the amended loan and mortgage agreement was registered on
TCT No. 52751 as Entry No. 520099. Entry No. 520099 is
constructive notice to the whole world74 that Lot No. 356-A was
mortgaged by Dr. Rosario to PNB as security for a loan, the
amount of which was increased to ₱450,000.00. Hence, Dr.
Rosario is deemed to have effectively repudiated the express
trust between him and the Torbela siblings on March 6, 1981,
on which day, the prescriptive period for the enforcement of the
express trust by the Torbela siblings began to run.
From March 6, 1981, when the amended loan and mortgage
agreement was registered on TCT No. 52751, to February 13,
1986, when the Torbela siblings instituted before the RTC Civil
Case No. U-4359 against the spouses Rosario, only about five
years had passed. The Torbela siblings were able to institute
Civil Case No. U-4359 well before the lapse of the 10-year
prescriptive period for the enforcement of their express trust
with Dr. Rosario.
Civil Case No. U-4359 is likewise not barred by laches. Laches
means 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
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. As the Court
explained in the preceding paragraphs, the Torbela siblings
instituted Civil Case No. U-4359 five years after Dr. Rosario’s
repudiation of the express trust, still within the 10-year
prescriptive period for enforcement of such trusts. This does
not constitute an unreasonable delay in asserting one's right. A
delay within the prescriptive period is sanctioned by law and is
not considered to be a delay that would bar relief. Laches
apply only in the absence of a statutory prescriptive period.75
Banco Filipino is not a mortgagee and buyer in good faith.
Having determined that the Torbela siblings are the true
owners and Dr. Rosario merely the trustee of Lot No. 356-A,
the Court is next faced with the issue of whether or not the
Torbela siblings may still recover Lot No. 356-A considering
that Dr. Rosario had already mortgaged Lot No. 356-A to
Banco Filipino, and upon Dr. Rosario’s default on his loan
obligations, Banco Filipino foreclosed the mortgage, acquired
Lot No. 356-A as the highest bidder at the foreclosure sale,
and consolidated title in its name under TCT No. 165813. The
resolution of this issue depends on the answer to the question
of whether or not Banco Filipino was a mortgagee in good
faith.
Under Article 2085 of the Civil Code, one of the essential
requisites of the contract of mortgage is that the mortgagor
should be the absolute owner of the property to be mortgaged;
otherwise, the mortgage is considered null and void. However,
an exception to this rule is the doctrine of "mortgagee in good
faith." Under this doctrine, even if the mortgagor is not the
owner of the mortgaged property, the mortgage contract and
any foreclosure sale arising therefrom are given effect by
reason of public policy. This principle is based on the rule that
all persons dealing with property covered by a Torrens
Certificate of Title, as buyers or mortgagees, are not required
to go beyond what appears on the face of the title. This is the
same rule that underlies the principle of "innocent purchasers
for value." The prevailing jurisprudence is that a mortgagee
has a right to rely in good faith on the certificate of title of the
mortgagor to the property given as security and in the absence
of any sign that might arouse suspicion, has no obligation to
undertake further investigation. Hence, even if the mortgagor is
not the rightful owner of, or does not have a valid title to, the
mortgaged property, the mortgagee in good faith is,
nonetheless, entitled to protection.76
On one hand, the Torbela siblings aver that Banco Filipino is
not a mortgagee in good faith because as early as May 17,
1967, they had already annotated Cornelio’s Adverse Claim
dated May 16, 1967 and Dr. Rosario’s Deed of Absolute
Quitclaim dated December 28, 1964 on TCT No. 52751 as
Entry Nos. 274471-274472, respectively.
On the other hand, Banco Filipino asseverates that it is a
mortgagee in good faith because per Section 70 of Presidential
Decree No. 1529, otherwise known as the Property
Registration Decree, the notice of adverse claim, registered on
May 17, 1967 by the Torbela siblings under Entry Nos.
274471-274472 on TCT No. 52751, already lapsed after 30
days or on June 16, 1967. Additionally, there was an express
cancellation of Entry Nos. 274471-274472 by Entry No.
520469 dated March 11, 1981. So when Banco Filipino
approved Dr. Rosario’s loan for ₱1,200,000.00 and constituted
a mortgage on Lot No. 356-A (together with two other
properties) on December 8, 1981, the only other encumbrance
on TCT No. 52751 was Entry No. 520099 dated March 6,
1981, i.e., the amended loan and mortgage agreement
between Dr. Rosario and PNB (which was eventually cancelled
after it was paid off with part of the proceeds from Dr. Rosario’s
loan from Banco Filipino). Hence, Banco Filipino was not
aware that the Torbela siblings’ adverse claim on Lot No. 356-A
still subsisted.
The Court finds that Banco Filipino is not a mortgagee in good
faith. Entry Nos. 274471-274472 were not validly cancelled,
and the improper cancellation should have been apparent to
Banco Filipino and aroused suspicion in said bank of some
defect in Dr. Rosario’s title.
The purpose of annotating the adverse claim on the title of the
disputed land is to apprise third persons that there is a
controversy over the ownership of the land and to preserve
and protect the right of the adverse claimant during the
pendency of the controversy. It is a notice to third persons that
any transaction regarding the disputed land is subject to the
outcome of the dispute.77
Adverse claims were previously governed by Section 110 of
Act No. 496, otherwise known as the Land Registration Act,
quoted in full below:
ADVERSE CLAIM
SEC. 110. Whoever claims any part or interest in registered
land adverse to the registered owner, arising subsequent to the
date of the original registration, may, if no other provision is
made in this Act for registering the same, make a statement in
writing setting forth fully his alleged right or interest, and how or
under whom acquired, and a reference to the volume and page
of the certificate of title of the registered owner, and a
description of the land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state
the adverse claimant’s residence, and designate a place at
which all notices may be served upon him. This statement shall
be entitled to registration as an adverse claim, and the court,
upon a petition of any party in interest, shall grant a speedy
hearing upon the question of the validity of such adverse claim
and shall enter such decree therein as justice and equity may
require. If the claim is adjudged to be invalid, the registration
shall be cancelled. If in any case the court after notice and
hearing shall find that a claim thus registered was frivolous or
vexatious, it may tax the adverse claimant double or treble
costs in its discretion.
Construing the aforequoted provision, the Court stressed in Ty
Sin Tei v. Lee Dy Piao78 that "[t]he validity or efficaciousness of
the [adverse] claim x x x may only be determined by the Court
upon petition by an interested party, in which event, the Court
shall order the immediate hearing thereof and make the proper
adjudication as justice and equity may warrant. And it is ONLY
when such claim is found unmeritorious that the registration
thereof may be cancelled." The Court likewise pointed out in
the same case that while a notice of lis pendens may be
cancelled in a number of ways, "the same is not true in a
registered adverse claim, for it may be cancelled only in one
instance, i.e., after the claim is adjudged invalid or
unmeritorious by the Court x x x;" and "if any of the
registrations should be considered unnecessary or
superfluous, it would be the notice of lis pendens and not the
annotation of the adverse claim which is more permanent and
cannot be cancelled without adequate hearing and proper
disposition of the claim."
With the enactment of the Property Registration Decree on
June 11, 1978, Section 70 thereof now applies to adverse
claims:
SEC. 70. Adverse claim. – Whoever claims any part or interest
in registered land adverse to the registered owner, arising
subsequent to the date of the original registrations, may, if no
other provision is made in this Decree for registering the same,
make a statement in writing setting forth fully his alleged right,
or interest, and how or under whom acquired, a reference to
the number of the certificate of title of the registered owner, the
name of the registered owner, and a description of the land in
which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state
the adverse claimant’s residence, and a place at which all
notices may be served upon him. This statement shall be
entitled to registration as an adverse claim on the certificate of
title. The adverse claim shall be effective for a period of thirty
days from the date of registration. After the lapse of said
period, the annotation of adverse claim may be cancelled upon
filing of a verified petition therefor by the party in interest:
Provided, however, that after cancellation, no second adverse
claim based on the same ground shall be registered by the
same claimant.
Before the lapse of thirty days aforesaid, any party in interest
may file a petition in the Court of First Instance where the land
is situated for the cancellation of the adverse claim, and the
court shall grant a speedy hearing upon the question of the
validity of such adverse claim, and shall render judgment as
may be just and equitable. If the adverse claim is adjudged to
be invalid, the registration thereof shall be ordered cancelled.
If, in any case, the court, after notice and hearing, shall find
that the adverse claim thus registered was frivolous, it may fine
the claimant in an amount not less than one thousand pesos
nor more than five thousand pesos, in its discretion. Before the
lapse of thirty days, the claimant may withdraw his adverse
claim by filing with the Register of Deeds a sworn petition to
that effect. (Emphases supplied.)
In Sajonas v. Court of Appeals,79 the Court squarely interpreted
Section 70 of the Property Registration Decree, particularly, the
new 30-day period not previously found in Section 110 of the
Land Registration Act, thus:
In construing the law aforesaid, care should be taken that
every part thereof be given effect and a construction that could
render a provision inoperative should be avoided, and
inconsistent provisions should be reconciled whenever
possible as parts of a harmonious whole. For taken in solitude,
a word or phrase might easily convey a meaning quite different
from the one actually intended and evident when a word or
phrase is considered with those with which it is associated. In
ascertaining the period of effectivity of an inscription of adverse
claim, we must read the law in its entirety. Sentence three,
paragraph two of Section 70 of P.D. 1529 provides:
"The adverse claim shall be effective for a period of thirty days
from the date of registration."
At first blush, the provision in question would seem to restrict
the effectivity of the adverse claim to thirty days. But the above
provision cannot and should not be treated separately, but
should be read in relation to the sentence following, which
reads:
"After the lapse of said period, the annotation of adverse claim
may be cancelled upon filing of a verified petition therefor by
the party in interest."
If the rationale of the law was for the adverse claim to ipso
facto lose force and effect after the lapse of thirty days, then it
would not have been necessary to include the foregoing caveat
to clarify and complete the rule. For then, no adverse claim
need be cancelled. If it has been automatically terminated by
mere lapse of time, the law would not have required the party
in interest to do a useless act.
A statute's clauses and phrases must not be taken separately,
but in its relation to the statute's totality. Each statute must, in
fact, be construed as to harmonize it with the pre-existing body
of laws. Unless clearly repugnant, provisions of statutes must
be reconciled. The printed pages of the published Act, its
history, origin, and its purposes may be examined by the courts
in their construction. x x x.
xxxx
Construing the provision as a whole would reconcile the
apparent inconsistency between the portions of the law such
that the provision on cancellation of adverse claim by verified
petition would serve to qualify the provision on the effectivity
period. The law, taken together, simply means that the
cancellation of the adverse claim is still necessary to render it
ineffective, otherwise, the inscription will remain annotated and
shall continue as a lien upon the property. For if the adverse
claim has already ceased to be effective upon the lapse of said
period, its cancellation is no longer necessary and the process
of cancellation would be a useless ceremony.
It should be noted that the law employs the phrase "may be
cancelled," which obviously indicates, as inherent in its
decision making power, that the court may or may not order the
cancellation of an adverse claim, notwithstanding such
provision limiting the effectivity of an adverse claim for thirty
days from the date of registration. The court cannot be bound
by such period as it would be inconsistent with the very
authority vested in it. A fortiori, the limitation on the period of
effectivity is immaterial in determining the validity or invalidity of
an adverse claim which is the principal issue to be decided in
the court hearing. It will therefore depend upon the evidence at
a proper hearing for the court to determine whether it will order
the cancellation of the adverse claim or not.
To interpret the effectivity period of the adverse claim as
absolute and without qualification limited to thirty days defeats
the very purpose for which the statute provides for the remedy
of an inscription of adverse claim, as the annotation of an
adverse claim is a measure designed to protect the interest of
a person over a piece of real property where the registration of
such interest or right is not otherwise provided for by the Land
Registration Act or Act 496 (now P.D. 1529 or the Property
Registration Decree), and serves as a warning to third parties
dealing with said property that someone is claiming an interest
or the same or a better right than the registered owner thereof.
The reason why the law provides for a hearing where the
validity of the adverse claim is to be threshed out is to afford
the adverse claimant an opportunity to be heard, providing a
venue where the propriety of his claimed interest can be
established or revoked, all for the purpose of determining at
last the existence of any encumbrance on the title arising from
such adverse claim. This is in line with the provision
immediately following:
"Provided, however, that after cancellation, no second adverse
claim shall be registered by the same claimant."
Should the adverse claimant fail to sustain his interest in the
property, the adverse claimant will be precluded from
registering a second adverse claim based on the same ground.
It was held that "validity or efficaciousness of the claim may
only be determined by the Court upon petition by an interested
party, in which event, the Court shall order the immediate
hearing thereof and make the proper adjudication as justice
and equity may warrant. And it is only when such claim is
found unmeritorious that the registration of the adverse claim
may be cancelled, thereby protecting the interest of the
adverse claimant and giving notice and warning to third
parties."80 (Emphases supplied.)
Whether under Section 110 of the Land Registration Act or
Section 70 of the Property Registration Decree, notice of
adverse claim can only be cancelled after a party in interest
files a petition for cancellation before the RTC wherein the
property is located, and the RTC conducts a hearing and
determines the said claim to be invalid or unmeritorious.
No petition for cancellation has been filed and no hearing has
been conducted herein to determine the validity or merit of the
adverse claim of the Torbela siblings. Entry No. 520469
cancelled the adverse claim of the Torbela siblings, annotated
as Entry Nos. 274471-774472, upon the presentation by Dr.
Rosario of a mere Cancellation and Discharge of Mortgage.
Regardless of whether or not the Register of Deeds should
have inscribed Entry No. 520469 on TCT No. 52751, Banco
Filipino could not invoke said inscription in support of its claim
of good faith. There were several things amiss in Entry No.
520469 which should have already aroused suspicions in
Banco Filipino, and compelled the bank to look beyond TCT
No. 52751 and inquire into Dr. Rosario’s title. First, Entry No.
520469 does not mention any court order as basis for the
cancellation of the adverse claim. Second, the adverse claim
was not a mortgage which could be cancelled with Dr.
Rosario’s Cancellation and Discharge of Mortgage. And third,
the adverse claim was against Dr. Rosario, yet it was cancelled
based on a document also executed by Dr. Rosario.
It is a well-settled rule that a purchaser or mortgagee cannot
close his eyes to facts which should put a reasonable man
upon his guard, and then claim that he acted in good faith
under the belief that there was no defect in the title of the
vendor or mortgagor. His mere refusal to believe that such
defect exists, or his willful closing of his eyes to the possibility
of the existence of a defect in the vendor's or mortgagor's title,
will not make him an innocent purchaser or mortgagee for
value, if it afterwards develops that the title was in fact
defective, and it appears that he had such notice of the defects
as would have led to its discovery had he acted with the
measure of precaution which may be required of a prudent
man in a like situation.81
While the defective cancellation of Entry Nos. 274471-274472
by Entry No. 520469 might not be evident to a private
individual, the same should have been apparent to Banco
Filipino. Banco Filipino is not an ordinary mortgagee, but is a
mortgagee-bank, whose business is impressed with public
interest. In fact, in one case, 82 the Court explicitly declared
that the rule that persons dealing with registered lands can rely
solely on the certificate of title does not apply to banks. In
another case,83 the Court adjudged that unlike private
individuals, a bank is expected to exercise greater care and
prudence in its dealings, including those involving registered
lands. A banking institution is expected to exercise due
diligence before entering into a mortgage contract. The
ascertainment of the status or condition of a property offered to
it as security for a loan must be a standard and indispensable
part of its operations.
Banco Filipino cannot be deemed a mortgagee in good faith,
much less a purchaser in good faith at the foreclosure sale of
Lot No. 356-A. Hence, the right of the Torbela siblings over Lot
No. 356-A is superior over that of Banco Filipino; and as the
true owners of Lot No. 356-A, the Torbela siblings are entitled
to a reconveyance of said property even from Banco Filipino.
Nonetheless, the failure of Banco Filipino to comply with the
due diligence requirement was not the result of a dishonest
purpose, some moral obliquity, or breach of a known duty for
some interest or ill will that partakes of fraud that would justify
damages.84
Given the reconveyance of Lot No. 356-A to the Torbela
siblings, there is no more need to address issues concerning
redemption, annulment of the foreclosure sale and certificate of
sale (subject matter of Civil Case No. U-4733), or issuance of a
writ of possession in favor of Banco Filipino (subject matter of
Pet. Case No. U-822) insofar as Lot No. 356-A is concerned.
Such would only be superfluous. Banco Filipino, however, is
not left without any recourse should the foreclosure and sale of
the two other mortgaged properties be insufficient to cover Dr.
Rosario’s loan, for the bank may still bring a proper suit against
Dr. Rosario to collect the unpaid balance.
The rules on accession shall govern the improvements on Lot
No. 356-A and the rents thereof.
The accessory follows the principal. The right of accession is
recognized under Article 440 of the Civil Code which states
that "[t]he ownership of property gives the right by accession to
everything which is produced thereby, or which is incorporated
or attached thereto, either naturally or artificially."
There is no question that Dr. Rosario is the builder of the
improvements on Lot No. 356-A. The Torbela siblings
themselves alleged that they allowed Dr. Rosario to register
Lot No. 356-A in his name so he could obtain a loan from DBP,
using said parcel of land as security; and with the proceeds of
the loan, Dr. Rosario had a building constructed on Lot No.
356-A, initially used as a hospital, and then later for other
commercial purposes. Dr. Rosario supervised the construction
of the building, which began in 1965; fully liquidated the loan
from DBP; and maintained and administered the building, as
well as collected the rental income therefrom, until the Torbela
siblings instituted Civil Case No. U-4359 before the RTC on
February 13, 1986.
When it comes to the improvements on Lot No. 356-A, both the
Torbela siblings (as landowners) and Dr. Rosario (as builder)
are deemed in bad faith. The Torbela siblings were aware of
the construction of a building by Dr. Rosario on Lot No. 356-A,
while Dr. Rosario proceeded with the said construction despite
his knowledge that Lot No. 356-A belonged to the Torbela
siblings. This is the case contemplated under Article 453 of the
Civil Code, which reads:
ART. 453. If there was bad faith, not only on the part of the
person who built, planted or sowed on the land of another, but
also on the part of the owner of such land, the rights of one
and the other shall be the same as though both had acted in
good faith.
It is understood that there is bad faith on the part of the
landowner whenever the act was done with his knowledge and
without opposition on his part. (Emphasis supplied.)
When both the landowner and the builder are in good faith, the
following rules govern:
ART. 448. The owner of the land on which anything has been
built, sown or planted in good faith, shall have the right to
appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in articles 546 and 548,
or to oblige the one who built or planted to pay the price of the
land, and the one who sowed, the proper rent. However, the
builder or planter cannot be obliged to buy the land if its value
is considerably more than that of the building or trees. In such
case, he shall pay reasonable rent, if the owner of the land
does not choose to appropriate the building or trees after
proper indemnity. The parties shall agree upon the terms of the
lease and in case of disagreement, the court shall fix the terms
thereof.
ART. 546. Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may retain the
thing until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in
good faith with the same right of retention, the person who has
defeated him in the possession having the option of refunding
the amount of the expenses or of paying the increase in value
which the thing may have acquired by reason thereof.
ART. 548. Expenses for pure luxury or mere pleasure shall not
be refunded to the possessor in good faith; but he may remove
the ornaments with which he has embellished the principal
thing if it suffers no injury thereby, and if his successor in the
possession does not prefer to refund the amount expended.
Whatever is built, planted, or sown on the land of another, and
the improvements or repairs made thereon, belong to the
owner of the land. Where, however, the planter, builder, or
sower has acted in good faith, a conflict of rights arises
between the owners and it becomes necessary to protect the
owner of the improvements without causing injustice to the
owner of the land. In view of the impracticability of creating
what Manresa calls a state of "forced co-ownership," the law
has provided a just and equitable solution by giving the owner
of the land the option to acquire the improvements after
payment of the proper indemnity or to oblige the builder or
planter to pay for the land and the sower to pay the proper
rent. It is the owner of the land who is allowed to exercise the
option because his right is older and because, by the principle
of accession, he is entitled to the ownership of the accessory
thing.85
The landowner has to make a choice between appropriating
the building by paying the proper indemnity or obliging the
builder to pay the price of the land. But even as the option lies
with the landowner, the grant to him, nevertheless, is
preclusive. He must choose one. He cannot, for instance,
compel the owner of the building to remove the building from
the land without first exercising either option. It is only if the
owner chooses to sell his land, and the builder or planter fails
to purchase it where its value is not more than the value of the
improvements, that the owner may remove the improvements
from the land. The owner is entitled to such remotion only
when, after having chosen to sell his land, the other party fails
to pay for the same.86
This case then must be remanded to the RTC for the
determination of matters necessary for the proper application
of Article 448, in relation to Article 546, of the Civil Code. Such
matters include the option that the Torbela siblings will choose;
the amount of indemnity that they will pay if they decide to
appropriate the improvements on Lot No. 356-A; the value of
Lot No. 356-A if they prefer to sell it to Dr. Rosario; or the
reasonable rent if they opt to sell Lot No. 356-A to Dr. Rosario
but the value of the land is considerably more than the
improvements. The determination made by the Court of
Appeals in its Decision dated June 29, 1999 that the current
value of Lot No. 356-A is ₱1,200,000.00 is not supported by
any evidence on record.
Should the Torbela siblings choose to appropriate the
improvements on Lot No. 356-A, the following ruling of the
Court in Pecson v. Court of Appeals87 is relevant in the
determination of the amount of indemnity under Article 546 of
the Civil Code:
Article 546 does not specifically state how the value of the
useful improvements should be determined. The respondent
court and the private respondents espouse the belief that the
cost of construction of the apartment building in 1965, and not
its current market value, is sufficient reimbursement for
necessary and useful improvements made by the petitioner.
This position is, however, not in consonance with previous
rulings of this Court in similar cases. In Javier vs. Concepcion,
Jr., this Court pegged the value of the useful improvements
consisting of various fruits, bamboos, a house and camarin
made of strong material based on the market value of the said
improvements. In Sarmiento vs. Agana, despite the finding that
the useful improvement, a residential house, was built in 1967
at a cost of between eight thousand pesos (₱8,000.00) to ten
thousand pesos (₱10,000.00), the landowner was ordered to
reimburse the builder in the amount of forty thousand pesos
(₱40,000.00), the value of the house at the time of the trial. In
the same way, the landowner was required to pay the "present
value" of the house, a useful improvement, in the case of De
Guzman vs. De la Fuente, cited by the petitioner.
The objective of Article 546 of the Civil Code is to administer
justice between the parties involved. In this regard, this Court
had long ago stated in Rivera vs. Roman Catholic Archbishop
of Manila that the said provision was formulated in trying to
adjust the rights of the owner and possessor in good faith of a
piece of land, to administer complete justice to both of them in
such a way as neither one nor the other may enrich himself of
that which does not belong to him. Guided by this precept, it is
therefore the current market value of the improvements which
should be made the basis of reimbursement. A contrary ruling
would unjustly enrich the private respondents who would
otherwise be allowed to acquire a highly valued incomeyielding four-unit apartment building for a measly amount.
Consequently, the parties should therefore be allowed to
adduce evidence on the present market value of the apartment
building upon which the trial court should base its finding as to
the amount of reimbursement to be paid by the landowner.88
(Emphases supplied.)
Still following the rules of accession, civil fruits, such as rents,
belong to the owner of the building.89 Thus, Dr. Rosario has a
right to the rents of the improvements on Lot No. 356-A and is
under no obligation to render an accounting of the same to
anyone. In fact, it is the Torbela siblings who are required to
account for the rents they had collected from the lessees of the
commercial building and turn over any balance to Dr. Rosario.
Dr. Rosario’s right to the rents of the improvements on Lot No.
356-A shall continue until the Torbela siblings have chosen
their option under Article 448 of the Civil Code. And in case the
Torbela siblings decide to appropriate the improvements, Dr.
Rosario shall have the right to retain said improvements, as
well as the rents thereof, until the indemnity for the same has
been paid.90
Dr. Rosario is liable for damages to the Torbela siblings.
The Court of Appeals ordered Dr. Rosario to pay the Torbela
siblings ₱300,000.00 as moral damages; ₱200,000.00 as
exemplary damages; and ₱100,000.00 as attorney’s fees.
Indeed, Dr. Rosario’s deceit and bad faith is evident when,
being fully aware that he only held Lot No. 356-A in trust for the
Torbela siblings, he mortgaged said property to PNB and
Banco Filipino absent the consent of the Torbela siblings, and
caused the irregular cancellation of the Torbela siblings’
adverse claim on TCT No. 52751. Irrefragably, Dr. Rosario’s
betrayal had caused the Torbela siblings (which included Dr.
Rosario’s own mother, Eufrosina Torbela Rosario) mental
anguish, serious anxiety, and wounded feelings. Resultantly,
the award of moral damages is justified, but the amount thereof
is reduced to ₱200,000.00.
May 25, 1988, the Register of Deeds cancelled TCT No.
104189 and issued TCT No. 165812 in the name of Banco
Filipino for Lot No. 5-F-8-C-2-B-2-A on June 7, 1988.
In addition to the moral damages, exemplary damages may
also be imposed given that Dr. Rosario’s wrongful acts were
accompanied by bad faith. However, judicial discretion granted
to the courts in the assessment of damages must always be
exercised with balanced restraint and measured objectivity.
The circumstances of the case call for a reduction of the award
of exemplary damages to ₱100,000.00.
The Court has consistently ruled that the one-year redemption
period should be counted not from the date of foreclosure sale,
but from the time the certificate of sale is registered with the
Registry of Deeds.91 No copy of TCT No. 104189 can be found
in the records of this case, but the fact of annotation of the
Certificate of Sale thereon was admitted by the parties, only
differing on the date it was made: April 14, 1987 according to
Banco Filipino and April 15, 1987 as maintained by DuqueRosario. Even if the Court concedes that the Certificate of Sale
was annotated on TCT No. 104189 on the later date, April 15,
1987, the one-year redemption period already expired on April
14, 1988.92 The Certificate of Final Sale and Affidavit of
Consolidation were executed more than a month thereafter, on
May 24, 1988 and May 25, 1988, respectively, and were clearly
not premature.
As regards attorney's fees, they may be awarded when the
defendant's act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his
interest. Because of Dr. Rosario’s acts, the Torbela siblings
were constrained to institute several cases against Dr. Rosario
and his spouse, Duque-Rosario, as well as Banco Filipino,
which had lasted for more than 25 years. Consequently, the
Torbela siblings are entitled to an award of attorney's fees and
the amount of ₱100,000.00 may be considered rational, fair,
and reasonable.
Banco Filipino is entitled to a writ of possession for Lot No. 5F-8-C-2-B-2-A.
The Court emphasizes that Pet. Case No. U-822, instituted by
Banco Filipino for the issuance of a writ of possession before
the RTC of Urdaneta, included only Lot No. 5-F-8-C-2-B-2-A
and Lot No. 356-A (Lot No. 4489, the third property mortgaged
to secure Dr. Rosario’s loan from Banco Filipino, is located in
Dagupan City, Pangasinan, and the petition for issuance of a
writ of possession for the same should be separately filed with
the RTC of Dagupan City). Since the Court has already
granted herein the reconveyance of Lot No. 356-A from Banco
Filipino to the Torbela siblings, the writ of possession now
pertains only to Lot No. 5-F-8-C-2-B-2-A.
To recall, the Court of Appeals affirmed the issuance by the
RTC of a writ of possession in favor of Banco Filipino. Dr.
Rosario no longer appealed from said judgment of the
appellate court. Already legally separated from Dr. Rosario,
Duque-Rosario alone challenges the writ of possession before
this Court through her Petition in G.R. No. 140553.
Duque-Rosario alleges in her Petition that Lot No. 5-F-8-C-2B-2-A had been registered in her name under TCT No. 104189.
Yet, without a copy of TCT No. 104189 on record, the Court
cannot give much credence to Duque-Rosario’s claim of sole
ownership of Lot No. 5-F-8-C-2-B-2-A. Also, the question of
whether Lot No. 5-F-8-C-2-B-2-A was the paraphernal property
of Duque-Rosario or the conjugal property of the spouses
Rosario would not alter the outcome of Duque-Rosario’s
Petition.
The following facts are undisputed: Banco Filipino
extrajudicially foreclosed the mortgage constituted on Lot No.
5-F-8-C-2-B-2-A and the two other properties after Dr. Rosario
defaulted on the payment of his loan; Banco Filipino was the
highest bidder for all three properties at the foreclosure sale on
April 2, 1987; the Certificate of Sale dated April 2, 1987 was
registered in April 1987; and based on the Certificate of Final
Sale dated May 24, 1988 and Affidavit of Consolidation dated
It is true that the rule on redemption is liberally construed in
favor of the original owner of the property. The policy of the law
is to aid rather than to defeat him in the exercise of his right of
redemption.93 However, the liberal interpretation of the rule on
redemption is inapplicable herein as neither Duque-Rosario
nor Dr. Rosario had made any attempt to redeem Lot No. 5F-8-C-2-B-2-A. Duque-Rosario could only rely on the efforts of
the Torbela siblings at redemption, which were unsuccessful.
While the Torbela siblings made several offers to redeem Lot
No. 356-A, as well as the two other properties mortgaged by
Dr. Rosario, they did not make any valid tender of the
redemption price to effect a valid redemption. The general rule
in redemption is that it is not sufficient that a person offering to
redeem manifests his desire to do so. The statement of
intention must be accompanied by an actual and simultaneous
tender of payment. The redemption price should either be fully
offered in legal tender or else validly consigned in court. Only
by such means can the auction winner be assured that the
offer to redeem is being made in good faith.94 In case of
disagreement over the redemption price, the redemptioner may
preserve his right of redemption through judicial action, which
in every case, must be filed within the one-year period of
redemption. The filing of the court action to enforce
redemption, being equivalent to a formal offer to redeem,
would have the effect of preserving his redemptive rights and
"freezing" the expiration of the one-year period.95 But no such
action was instituted by the Torbela siblings or either of the
spouses Rosario.
Duque-Rosario also cannot bar the issuance of the writ of
possession over Lot No. 5-F-8-C-2-B-2-A in favor of Banco
Filipino by invoking the pendency of Civil Case No. U-4359, the
Torbela siblings’ action for recovery of ownership and
possession and damages, which supposedly tolled the period
for redemption of the foreclosed properties. Without belaboring
the issue of Civil Case No. U-4359 suspending the redemption
period, the Court simply points out to Duque-Rosario that Civil
Case No. U-4359 involved Lot No. 356-A only, and the legal
consequences of the institution, pendency, and resolution of
Civil Case No. U-4359 apply to Lot No. 356-A alone.
Equally unpersuasive is Duque-Rosario’s argument that the
writ of possession over Lot No. 5-F-8-C-2-B-2-A should not be
issued given the defects in the conduct of the foreclosure sale
(i.e., lack of personal notice to Duque-Rosario) and
consolidation of title (i.e., failure to provide Duque-Rosario with
copies of the Certificate of Final Sale).
The right of the purchaser to the possession of the foreclosed
property becomes absolute upon the expiration of the
redemption period. The basis of this right to possession is the
purchaser's ownership of the property. After the consolidation
of title in the buyer's name for failure of the mortgagor to
redeem, the writ of possession becomes a matter of right and
its issuance to a purchaser in an extrajudicial foreclosure is
merely a ministerial function.961avvphi1
The judge with whom an application for a writ of possession is
filed need not look into the validity of the mortgage or the
manner of its foreclosure. Any question regarding the validity of
the mortgage or its foreclosure cannot be a legal ground for the
refusal to issue a writ of possession. Regardless of whether or
not there is a pending suit for the annulment of the mortgage or
the foreclosure itself, the purchaser is entitled to a writ of
possession, without prejudice, of course, to the eventual
outcome of the pending annulment case. The issuance of a
writ of possession in favor of the purchaser in a foreclosure
sale is a ministerial act and does not entail the exercise of
discretion.97
WHEREFORE, in view of the foregoing, the Petition of the
Torbela siblings in G.R. No. 140528 is GRANTED, while the
Petition of Lena Duque-Rosario in G.R. No. 140553 is DENIED
for lack of merit. The Decision dated June 29, 1999 of the
Court of Appeals in CA-G.R. CV No. 39770, which affirmed
with modification the Amended Decision dated January 29,
1992 of the RTC in Civil Case Nos. U-4359 and U-4733 and
Pet. Case No. U-822, is AFFIRMED WITH MODIFICATIONS,
to now read as follows:
(1) Banco Filipino is ORDERED to reconvey Lot No. 356-A to
the Torbela siblings;
(2) The Register of Deeds of Pangasinan is ORDERED to
cancel TCT No. 165813 in the name of Banco Filipino and to
issue a new certificate of title in the name of the Torbela
siblings for Lot No. 356-A;
(3) The case is REMANDED to the RTC for further
proceedings to determine the facts essential to the proper
application of Articles 448 and 546 of the Civil Code,
particularly: (a) the present fair market value of Lot No. 356-A;
(b) the present fair market value of the improvements thereon;
(c) the option of the Torbela siblings to appropriate the
improvements on Lot No. 356-A or require Dr. Rosario to
purchase Lot No. 356-A; and (d) in the event that the Torbela
siblings choose to require Dr. Rosario to purchase Lot No. 356A but the value thereof is considerably more than the
improvements, then the reasonable rent of Lot No. 356-A to be
paid by Dr. Rosario to the Torbela siblings;
(4) The Torbela siblings are DIRECTED to submit an
accounting of the rents of the improvements on Lot No. 356-A
which they had received and to turn over any balance thereof
to Dr. Rosario;
(5) Dr. Rosario is ORDERED to pay the Torbela siblings
₱200,000.00 as moral damages, ₱100,000.00 as exemplary
damages, and ₱100,000.00 as attorney’s fees; and
(6) Banco Filipino is entitled to a writ of possession over Lot-5F-8-C-2-B-2-A, covered by TCT No. 165812. The RTC Branch
Clerk of Court is ORDERED to issue a writ of possession for
the said property in favor of Banco Filipino.
SO ORDERED.
G.R. No. 5246
September 16, 1910
MANUELA GREY ALBA, ET AL., petitioners-appellants,
vs.
ANACLETO R. DE LA CRUZ, objector-appellee.
Ramon Salinas, for appellants.
Aniceto G. Reyes, for appellee.
TRENT, J.:
These petitioners, Manuela, Jose, Juan, and Francisco,
surnamed Grey y Alba, are the only heirs of Doña Segunda
Alba Clemente and Honorato Grey, deceased. Remedios Grey
y Alba, a sister of the petitioners, was married on the 21st day
of March, 1903, to Vicente Reyes and died on the 13th of July,
1905, without leaving any heirs except her husband. The four
petitioners, as coowners, sought to have registered the
following-described property:
A parcel of land situated in the barrio of Talampas, municipality
of Baliuag, Province of Bulacan, upon which are situated three
houses and one camarin of light material, having a superficial
area of 52 hectares, 51 ares, and 22 centares; bounded on the
north by the highway (calzada) of Talampas and the lands of
Rita Ruiz Mateo; on the east by the lands of the said Rita Ruiz
Mateo, Hermenegildo Prado, Policarpo de Jesus, and a stream
called Sapang Buslut; on the south by the same stream and
the lands of the capellania; and on the west by the stream
called Sapang Buslut, and the lands of Vicente de la Cruz,
Jose Camacho and Domingo Ruiz Mateo.
This parcel of agricultural land is used for the raising of rice
and sugar cane and is assessed at $1,000 United States
currency. The petition, which was filed on the 18th of
December, 1906, was accompanied by a plan and technical
description of the above-described parcel of land.
After hearing the proofs presented, the court entered, on the
12th of February, 1908, a decree in accordance with the
provisions of paragraph 6 of section 54 of Act No. 926,
directing that the land described in the petitioner be registered
in the names of the four petitioners, as coowners, subject to
the usufructuary right of Vicente Reyes, widower of Remedios
Grey.
On the 16th of June, 1908, Anacleto Ratilla de la Cruz filed a
motion in the Court of Land Registration asking for a revision of
the case, including the decision, upon the ground that he is the
absolute owner of the two parcels of land which are described
in said motion, and which, according to his allegations, are
included in the lands decreed to the petitioners. He alleged that
the decree of February 12, 1908, was obtained maliciously and
fraudulently by the petitioners, thereby depriving him of said
two parcels of land. He further alleged that he was the absolute
owner of the two parcels of land, having inherited them from
his father, Baldomero R. de la Cruz, who had a state grant for
the same. He therefore asked, under the provisions of section
38 of the Land Registration Act (No. 496), a revision of the
case, and that the said decree be modified so as to exclude
the two parcels of land described in said motion. The Land
Court upon this motion reopened the case, and after hearing
the additional evidence presented by both parties, rendered,
on the 23rd of November, 1908, its decision modifying the
former decree by excluding from the same the two parcels of
land claimed by Anacleto Ratilla de la Cruz. From this decision
and judgment the petitioners appealed and now insist, first,
that the trial court erred in reopening the case and modifying its
decree dated the 12th of February, 1908, for the reason that
said decree was not obtained by means of fraud; and, second,
that the court erred in holding that the two parcels of land
described in the appellee's motion are not their property.
It was agreed by counsel that the two small parcels now in
dispute forma part of the land described in the petition and
were included in the decree of February 12, 1908, and that the
petitioners are the owners of the remainder of the land
described in the said decree.
The petitioners inherited this land from their parents, who
acquired the same, including the two small parcels in question,
by purchase, as is evidenced by a public document dated the
26th of November, 1864, duly executed before Francisco
Iriarte, alcalde mayor and judge of the Court of First Instance
of the Province of Bulacan.
Baldomero R. de la Cruz, father of the appellee, obtained in
march, 1895, a state grant for several parcels of land, including
the two parcels in question. This grant was duly inscribed in the
old register of property in Bulacan on the 6th of April of the
same year.
It is admitted that at the time the appellants presented their
petition in this case the appellee was occupying the two
parcels of land now in question. It is also admitted that the
name of the appellee does not appear in the said petition as an
occupant of the said two parcels. The petitioners insist that the
appellee was occupying these parcels as their tenant and for
this reason they did not include his name in their petition, as an
occupant, while the appellee contends that he was occupying
the said parcels as the absolute owner under the estate grant
by inheritance.
The court below held that the failure on the part of the
petitioners to include the name of the appellee in their petition,
as an occupant of these two parcels of land, was a violation of
section 21 of Act No. 496, and that this constituted fraud within
the meaning of section 38 of said Land Registration Act. The
trial court further held that the grant from the estate should
prevail over the public document of purchase of 1864.
The mother of the petitioners died on November 15, 1881; their
father died prior to that time. Manuela, the oldest of the
petitioners, was about six years of age when their mother died.
So these children were minors when the father of the appellee
obtained the estate grant.
On the 13th of June, 1882, Jose Grey, uncle and
representative of the petitioners, who were then minors, rented
the land owned by the petitioners' deceased parents to one
Irineo Jose for a period of three years. On the 23d of March,
1895, the said Jose Grey, as the representative of the
petitioners, rented the same land for a period of six years to
Baldomero R. de la Cruz, father of the appellee. This rental
contract was duly executed in writing. This land was cultivated
during these six years by Baldomero R. de la Cruz and his
children, one of whom is the appellee. On the 14th of
December, 1905, Jose Grey, for himself and the other
petitioners, rented the same land to Estanislao R. de la Cruz
for a period of two years. Estanislao de la Cruz on entering into
this rental contract with Jose Grey did so for himself and his
brothers, one of whom is the appellee. While the appellee
admits that his father and brother entered into these rental
contracts and did, in fact, cultivate the petitioners' land,
nevertheless he insists that the two small parcels in question
were not included in these contracts. In the rental contract
between the uncle of the petitioners and he father of the
appellee the land is not described. In the rental contract
between Jose Grey, one of the petitioners, and Estanislao R.
de la Cruz, brother of the appellee, the two small parcels of
land in question are included, according to the description
given therein. This was found to be true by the court below, but
the said court held that as this contract was made by
Estanislao R. de la Cruz it was not binding upon Anacleto R.
de la Cruz, the appellee.
The two small parcels of land in question were purchased by
the parents of the petitioners in 1864, as is evidenced by the
public document of purchase and sale of that year. The same
two parcels of land are included in the state grant issued in
favor of Baldomero Ratilla de la Cruz in 1895. This grant was
obtained after the death of the petitioners' parents and while
they were minors. So it is clear that the petitioners honestly
believed that the appellee was occupying the said parcels as
their lessee at the time they presented their application for
registration. They did not act in bad faith, nor with any
fraudulent intent, when they omitted to include in their
application the name of the appellee as one of the occupants
of the land. They believed that it was not necessary nor
required that they include in their application the names of their
tenants. Under these circumstances, did the court below
commit an error in reopening this case in June, 1908, after its
decree had been entered in February of the same year?
The application for the registration is to be in writing, signed
and sworn to by the applicant, or by some person duly
authorized in his behalf. It is to contain an accurate description
of the land. It shall contain the name in full and the address of
the applicant, and also the names and addresses of all
occupants of land and of all adjoining owners, if known; and, if
not known, it shall state what search has been made to find
them. In the form of notice given by statute, which shall be
sworn to, the applicant is required to state and set forth clearly
all mortgages or encumbrances affecting said land, if any, the
rights and interests, legal or equitable, in the possession,
remainder, reversion, or expectancy of all persons, with their
names in full, together with their place of residence and post
office addresses. Upon receipt of the application the clerk shall
cause notice of the filling to be published twice in the Official
Gazette. This published notice shall be directed to all persons
appearing to have an interest in the land sought to be
registered and to the adjoining owners, and also "to all whom it
may concern." In addition to the notice in the Official Gazette
the Land Court shall, within seven days after said publication,
cause a copy of the notice, in Spanish, to be mailed by the
clerk to every person named in the application whose address
is known; to cause a duly attested copy of the notice, in
Spanish, to be posted in a conspicuous place on every parcel
of land included in the application, and in a conspicuous place
on the chief municipal building of the town in which the land is
situated. The court may also cause other or further notice of
the application to be given in such manner and to such
persons as it may deem proper. The certificate of the clerk that
he has served the notice as directed by the court by publication
or mailing shall be conclusive proof of such service. Within the
time allowed in the notices, if no person appears and answers,
the court may at once, upon motion of the applicant, no reason
to the contrary appearing, order a general default. By the
description in the published notice "to all whom it may
concern," and by express provisions of law "all the word are
made parties defendant and shall be concluded by the default
an order." If the court, after hearing, finds that the applicant has
title, as stated in his application, a decree or 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 proceedings 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 Court of
Land Registration a petition for review within one year. . . .
(Sec. 38 of Act No. 496.)
The appellee is not included in any of the exceptions named in
section 38 referred to above.
It will be seen that the applicant is required to mention not only
the outstanding interest which he admits but also all claims of
interest, though denied by him. By express provision of law the
world are made parties defendant by the description in the
notice "to all whom it may concern."
Although the appellee, occupying the two small parcels of land
in question under the circumstances as we have set forth, was
not served with notice, he was made a party defendant by
publication; and the entering of a decree on the 12th of
February, 1908, must be held to be conclusive against all
persons, including the appellee, whether his (appellee's) name
is mentioned in the application, notice, or citation.
The said decree of February 12, 1908, should not have been
opened on account of the absence, infancy, or other disability
of any person affected thereby, and could have been opened
only on the ground that the said decree had been obtained by
fraud. That decree was not obtained by fraud on the part of the
applicants, inasmuch as they honestly believed that the
appellee was occupying these two small parcels of land as
their tenant. One of the petitioner went upon the premises with
the surveyor when the original plan was made.
Proof of constructive fraud is not sufficient to authorize the
Court of Land Registration to reopen a case and modify its
decree. Specific, intentional acts to deceive and deprive anther
of his right, or in some manner injure him, must be alleged and
proved; that is, there must be actual or positive fraud as
distinguished from constructive fraud.
The question as to the meaning of the word "fraud" in the
Australian statutes has been frequently raised. Two distinctions
have been noted by the Australian courts; the first is the
distinction between the meaning of the word "fraud" in the
sections relating to the conclusive effect of certificates of title,
and its meaning in the sections relating to the protection of
bona fide purchasers from registered proprietors. The second
is the distinction between "legal," "equitable," or "constructive"
fraud, and "actual" or "moral" fraud. In none of the groups of
the sections of the Australian statutes relating to the conclusive
effect of certificates of title, and in which fraud is referred to, is
there any express indication of the meaning of "fraud," with the
sole exception of that of the South Australian group. (Hogg on
Australian Torrens System, p. 834.)
With regard to decisions on the sections relating to the
conclusive effect of certificates of title, it has been held in some
cases that the "fraud" there mentioned means actual or moral
fraud, not merely constructive or legal fraud. In other cases
"fraud" has been said to include constructive, legal, and every
kind of fraud. In other cases, against, knowledge of other
persons' right, and the deliberate acquisition of registered title
in the face of such knowledge, has been held to be "fraud"
which rendered voidable the certificates of title so obtained;
and voluntary ignorance is, for this purpose, the same as
knowledge. But in none of these three classes of cases was
there absent the element of intention to deprive another of just
rights, which constitutes the essential characteristics of actual
— as distinguished from legal-fraud. (Id., p. 835, and cases
cited in notes Nos. 85, 86, 87, 88, and 89 at bottom of pages
835 and 836.)
By "fraud" is meant actual fraud-dishonesty of some sort.
(Judgment of Privy Council in Assets Co. vs. Mere Roihi, and
Assets Co. vs. Panapa Waihopi, decided in March, 1905, cited
by Hogg in his Supplementary Addendum to his work on
Australian Torrens System, supra.) The same meaning should
be given to the word "fraud" used in section 38 of our statutes
(Act No. 496).
The Land Registration Act requires that all occupants be
named in the petition and given notice by registered mail. This
did not do the appellee any good, as he was not notified; but
he was made a party defendant, as we have said, by means of
the publication "to all whom it may concern." If this section of
the Act is to be upheld this must be declared to be due process
of law.
Before examining the validity of this part of the Act it might be
well to note the history and purpose of what is known as the
"Torrens Land Registration System." This system was
introduced in South Australia by Sir Robert Torrens in 1857 and
was there worked out in its practicable form.
The main principle of registration is to make registered titles
indefeasible. As we have said, upon the presentation in the
Court of Land Registration of an application for the registration
of the title to lands, under this system, the theory of the law is
that all occupants, adjoining owners, adverse claimants, and
other interested persons are notified of the proceedings, and
have have a right to appear in opposition to such application.
In other words, the proceeding is against the whole word. This
system was evidently considered by the Legislature to be a
public project when it passed Act No. 496. The interest of the
community at large was considered to be preferred to that of
private individuals.
At the close of this nineteenth century, all civilized nations are
coming to registration of title to land, because immovable
property is becoming more and more a matter of commercial
dealing, and there can be no trade without security. (Dumas's
Lectures, p. 23.)
The registered proprietor will no longer have reasons to fear
that he may evicted because his vendor had, unknown to him,
already sold the and to a third person. . . The registered
proprietor may feel himself protected against any defect in his
vendor's title. (Id., p. 21.)
The following summary of benefits of the system of registration
of titles, made by Sir Robert Torrens, has been fully justified in
its use:
First. It has substituted security for insecurity.
The question as to whether any particular transaction shows
fraud, within the meaning of the word as used in our statutes,
will in each case be a question of fact. We will not attempt to
say what acts would constitutes this kind of fraud in other
cases. This must be determined from the fact an
circumstances in each particular case. The only question we
are called upon to determine, and have determined, is whether
or not, under the facts and circumstances in this case, the
petitioners did obtain the decree of February 12, 1908, by
means of fraud.
Second. It has reduced the costs of conveyances from pounds
to shillings, and the time occupied from months to days.
It might be urged that the appellee has been deprived of his
property without due process of law, in violation of section 5 of
the Act of Congress of July 1, 1902, known as the Philippine
Bill," which provides "that no law shall be enacted in the said
Islands which shall deprive any person of life, liberty, or
property without due process of law."
Sixth. It has restored to their just value many estates held
under good holding titles, but depreciated in consequence of
some blur or technical defect, and has barred the reoccurrence
of any similar faults. (Sheldon on Land Registration, pp. 75,
76.)
Third. It has exchanged brevity and clearness for obscurity and
verbiage.
Fourth. It has so simplified ordinary dealings that he who has
mastered the "three R's" can transact his own conveyancing.
Fifth. It affords protection against fraud.
The boldest effort to grapple with the problem of simplification
of title to land was made by Mr. (afterwards Sir Robert)
Torrens, a layman, in South Australia in 1857. . . . In the
Torrens system title by registration takes the place of "title by
deeds" of the system under the "general" law. A sale of land,
for example, is effected by a registered transfer, upon which a
certificate of title is issued. The certificate is guaranteed by
statute, and, with certain exceptions, constitutes indefeasible
title to the land mentioned therein. Under the old system the
same sale would be effected by a conveyance, depending for
its validity, apart from intrinsic flaws, on the correctness of a
long series of prior deeds, wills, etc. . . . The object of the
Torrens system, them, is to do away with the delay, uncertainty,
and expense of the old conveyancing system. (Duffy &
Eagleson on The Transfer of Land Act, 1890, pp. 2, 3, 5, 7.)
By "Torrens" system generally are meant those systems of
registration of transactions with interest in land whose declared
object . . . is, under governmental authority, to establish and
certify to the ownership of an absolute and indefeasible title to
realty, and to simplify its transfer. (Hogg on Australian Torrens
system, supra, pp. 1, 2.)
Compensation for errors from assurance funds is provided in
all countries in which the Torrens system has been enacted.
Cases of error no doubt will always occur. The percentage of
errors, as compared with the number of registered dealings in
Australia, is very small. In New South Wales there were, in
1889, 209, 894 registered dealings, the average risk of error
being only 2 ½ cents for each dealing. In Queensland the risk
of error was only 1 ½ cents, the number of registered dealings
being 233,309. In Tasmania and in Western Australia not a
cent was paid for compensation for errors during the whole
time of operation, (Dumas's Lectures, supra, p. 96.) This
system has been adopted in various countries of the civilized
world, including some of the States of the American Union, and
practical experience has demonstrated that it has been
successful as a public project.
The validity of some of the provisions of the statutes adopting
the Torrens system has been the subject of judicial decision in
the courts of the United States. (People vs. Chase, 165 Ill.,
527; State vs. Guilbert, 56 Ohio St., 575; People vs. Simon,
176 Ill., 165; Tyler vs. Judges, 175 Mass., 71.)
Act No. 496 of the Philippine Commission, known as the "Land
Registration Act," was copied substantially from the
Massachussetts law of 1898.
The Illinois and Massachusetts statutes were upheld by the
supreme courts of those States.
It is not enough to show a procedure to be unconstitutional to
say that we never heard of it before. (Tyler vs. Judges, supra;
Hurtado vs. California, 110 U. S., 516.)
Looked at either from the point of view of history or of the
necessary requirements of justice, a proceeding in rem dealing
with a tangible res may be instituted and carried to judgment
without personal service upon claimants within the State or
notice by name to those outside of it, and not encounter any
provision of either constitution. Jurisdiction is secured by the
power of the court over the res. As we have said, such a
proceeding would be impossible, were this not so, for it hardly
would do to make a distinction between the constitutional rights
of claimants who were known and those who were not known
to the plaintiff, when the proceeding is to bar all. (Tyler vs.
Judges, supra.)
This same doctrine is annunciated in Pennoyer vs. Neff (95 U.
S., 714); The Mary (9 Cranch, 126); Mankin vs. Chandler (2
Brock., 125); Brown vs. Levee Commission (50 Miss., 468); 2
Freeman, Judgments, 4th ed., secs. 606, 611.
If the technical object of the suit is to establish a claim against
some particular person, with a judgment which generally, in
theory at least, binds his body, or to bar some individual claim
or objection, so that only certain persons are entitled to be
heard in defense, the action is in personam, although it may
concern the right to or possession of a tangible thing. If, on the
other hand, the object is to bar indifferently all who might be
minded to make an objection of any sort against the right
sought to be established, and if anyone in the world has a right
to be heard on the strenght of alleging facts which, if true,
show an inconsistent interest, the proceeding is in rem. (Tyler
vs. Judges, supra.)
In the case of Hamilton vs. Brown (161 U. S., 256) a judgment
of escheat was held conclusive upon persons notified by
advertisement to all persons interested. In this jurisdiction, by
the provisions of the Code of Civil Procedure, Act No. 190, a
decree allowing or disallowing a will binds everybody, although
the only notice of the proceedings given is by general notice to
all persons interested.
The supreme court Massachusetts, in the case of Tyler vs.
Judges (supra), did not rest its judgment as to the conclusive
effect of the decree upon the ground that the State has
absolute power to determine the persons to whom a man's
property shall go at his death, but upon the characteristics of a
proceeding in rem. So we conclude that the proceedings had in
the case at bar, under all the facts and circumstances,
especially the absolute lack on the part of the petitioners of any
dishonest intent to deprive the appellee of any right, or in any
way injure him, constitute due process of law.
As to whether or not the appellee can succesfully maintain an
action under the provisions of sections 101 and 102 of the
Land Registration Act (secs. 2365, 2366, Compilation) we do
not decide.
For these reasons we are of the opinion, and so hold, that the
judgment appealed from should be, and the same is hereby
reversed and judgment entered in favor of the petitioners in
conformity with the decree of the lower court of February 12,
1908, without special ruling as to costs. It is so ordered.
G.R. Nos. 162335 & 162605 December 12, 2005
SEVERINO M. MANOTOK IV, FROILAN M. MANOTOK,
FERNANDO M. MANOTOK, FAUSTO MANOTOK III, MA.
MAMERTA M. MANOTOK, PATRICIA L. TIONGSON, PACITA
L. GO, ROBERTO LAPERAL III, MICHAEL MARSHALL V.
MANOTOK, MARY ANN MANOTOK, FELISA MYLENE V.
MANOTOK, IGNACIO MANOTOK, JR., MILAGROS V.
MANOTOK, SEVERINO MANOTOK III, ROSA R. MANOTOK,
MIGUEL A.B. SISON, GEORGE M. BOCANEGRA, MA.
CRISTINA E. SISON, PHILIPP L. MANOTOK, JOSE
CLEMENTE L. MANOTOK, RAMON SEVERINO L.
MANOTOK, THELMA R. MANOTOK, JOSE MARIA
MANOTOK, JESUS JUDE MANOTOK, JR. and MA.
THERESA L. MANOTOK, represented by their Attorney-infact, Rosa R. Manotok, Petitioners,
vs.
HEIRS OF HOMER L. BARQUE, represented by TERESITA
BARQUE HERNANDEZ, Respondents.
DECISION
YNARES-SANTIAGO, J.:
These consolidated petitions for review assail, in G.R. No.
162335, the February 24, 2004 Amended Decision1 of the Third
Division of the Court of Appeals in CA-G.R. SP No. 66642,
ordering the Register of Deeds of Quezon City to cancel
petitioners’ TCT No. RT-22481 and directing the Land
Registration Authority (LRA) to reconstitute respondents’ TCT
No. 210177; and in G.R. No. 162605, the November 7, 2003
Amended Decision2 of the Special Division of Five of the
Former Second Division in CA-G.R. SP No. 66700 directing the
Register of Deeds of Quezon City to cancel petitioners’ TCT
No. RT-22481, and the LRA to reconstitute respondents’ TCT
No. T-210177 and the March 12, 2004 Resolution3 denying the
motion for reconsideration.
The facts as found by the Court of Appeals4 are as follows:
Petitioners, (respondents herein) as the surviving heirs of the
late Homer Barque, filed a petition with the LRA for
administrative reconstitution of the original copy of TCT No.
210177 issued in the name of Homer L. Barque, which was
destroyed in the fire that gutted the Quezon City Hall, including
the Office of the Register of Deeds of Quezon City, sometime
in 1988. In support of the petition, petitioners submitted the
owner’s duplicate copy of TCT No. 210177, real estate tax
receipts, tax declarations and the Plan FLS 3168 D covering
the property.
Upon being notified of the petition for administrative
reconstitution, private respondents (petitioners herein) filed
their opposition thereto claiming that the lot covered by the title
under reconstitution forms part of the land covered by their
reconstituted title TCT No. RT-22481, and alleging that TCT
No. 210177 in the name of petitioners’ predecessors-in-interest
is spurious.
On June 30, 1997, Atty. Benjamin M. Bustos, as reconstituting
officer, denied the reconstitution of TCT No. 2101775 on
grounds that:
1. Lots 823-A and 823-B, Fls-3168-D, containing areas of
171,473 Sq. Mtrs. and 171,472 Sq. Mtrs., respectively, covered
by TCT No. 210177, appear to duplicate Lot 823 Piedad
Estate, containing an area of 342,945 Sq. Mtrs., covered by
TCT No. 372302 registered in the name of Severino M.
Manotok, et. al., reconstituted under Adm. Reconstitution No.
Q-213 dated February 01, 1991;
2. The submitted plan Fls-3168-D is a spurious document as
categorically stated by Engr. Privadi J.G. Dalire, Chief,
Geodetic Surveys Division, Land Management Bureau, in his
letter dated February 19, 1997.6
Respondents’ motion for reconsideration was denied in an
order7 dated February 10, 1998 hence they appealed to the
LRA.
The LRA ruled that the reconstituting officer should not have
required the submission of documents other than the owner’s
duplicate certificate of title as bases in denying the petition and
should have confined himself with the owner’s duplicate
certificate of title.8 The LRA further declared:
Based on the documents presented, petitioners have
established by clear and convincing evidence that TCT NO.
210177 was, at the time of the destruction thereof, valid,
genuine, authentic and effective. Petitioners duly presented the
original of the owner’s duplicate copy of TCT No. 210177 ....
The logbook of the Register of Deeds of Quezon City lists TCT
No. 210177 as among the titles lost .... The Register of Deeds
of Quezon City himself acknowledged the existence and
authenticity of TCT No. 210177 when he issued a certification
to the effect that TCT No. 210177 was one of the titles
destroyed and not salvaged from the fire that gutted the
Quezon City Hall on 11 June 1988 ....
It is likewise noteworthy that the technical description and
boundaries of the lot reflected in TCT No. 210177 absolutely
conform to the technical description and boundaries of Lot 823
Piedad Estate ... as indicated in the B. L. Form No. 28-37-R
dated 11-8-94 and B. L. Form No. 31-10 duly issued by the
Bureau of Lands ....
It therefore becomes evident that the existence, validity,
authenticity and effectivity of TCT No. 210177 was established
indubitably and irrefutably by the petitioners. Under such
circumstances, the reconstitution thereof should be given due
course and the same is mandatory.9
….
It would be necessary to underscore that the certified copy of
Plan FLS 3168 D was duly issued by the office of Engr.
Ernesto Erive, Chief, Surveys Division LMS-DENR-NCR
whose office is the lawful repository of survey plans for lots
situated within the National Capital Region including the
property in question. Said plan was duly signed by the
custodian thereof, Carmelito Soriano, Chief Technical Records
and Statistics Section, DENR-NCR. Said plan is likewise duly
supported by Republic of the Philippines Official Receipt No.
2513818 Q dated 9-23-96 .... Engr. Erive in his letter dated 28
November 1996 addressed to Atty. Bustos … confirmed that a
microfilm copy of Plan FLS 3168D is on file in the Technical
Records and Statistics Section of his office. Engr. Dalire, in his
letter dated 2 January 1997 addressed to Atty. Bustos even
confirmed the existence and authenticity of said plan. …
In CA-G.R. SP No. 66700, the Second Division of the Court of
Appeals rendered a Decision16 on September 13, 2002, the
dispositive portion of which reads:
WHEREFORE, the foregoing premises considered the
assailed Resolution of the LRA dated June 24, 1998 is
AFFIRMED in toto and the petition for review is ordered
DISMISSED. No pronouncement as to costs.
.…
SO ORDERED.17
The claim of Engr. Dalire in his letter dated 19 February 1997
that his office has no records or information about Plan FLS
3168-D is belied by the certified copy of the computer print-out
duly issued by the Bureau of Lands indicating therein that FLS
3168D is duly entered into the microfilm records of the Bureau
of Lands and has been assigned Accession Number 410436
appearing on Page 79, Preliminary Report No. 1, List of
Locator Cards and Box Number 0400 and said computer printout is duly supported by an Offical Receipt ….
The said Plan FLS 3168D is indeed authentic and valid coming
as it does from the legal repository and duly signed by the
custodian thereof. The documentary evidence presented is
much too overwhelming to be simply brushed aside and be
defeated by the fabricated statements and concoctions made
by Engr. Dalire in his 19 February 1997 letter. …10
Respondents moved for reconsideration.18 On November 7,
2003, the Special Division of Five of the Former Second
Division rendered an Amended Decision in CA-G.R. SP No.
66700, the dispositive portion of which reads:
WHEREFORE, our decision dated 13 September 2002 is
hereby reconsidered. Accordingly, the Register of Deeds of
Quezon City is hereby directed to cancel TCT No. RT-22481 of
private respondents and the LRA is hereby directed to
reconstitute forthwith petitioners’ valid, genuine and existing
Certificate of Title No. T-210177.
No pronouncement as to costs.
SO ORDERED.19
Nevertheless, notwithstanding its conclusion that petitioners’
title was fraudulently reconstituted, the LRA noted that it is only
the Regional Trial Court (RTC) which can declare that the
same was indeed fraudulently reconstituted. It thus opined that
respondents’ title may only be reconstituted after a judicial
declaration that petitioners’ title was void and should therefore
be cancelled.11
Petitioners’ motion for reconsideration of the amended decision
in CA-G.R. SP No. 66700 was denied,20 hence, this petition
docketed as G.R. No. 162605.
The dispositive portion of the LRA’s decision reads:
WHEREFORE, the petition is hereby DENIED. The Resolution
of the LRA dated 24 June 1998 is hereby AFFIRMED.
WHEREFORE, in view of the foregoing, it is hereby ordered
that reconstitution of TCT No. 210177 in the name of Homer L.
Barque, Sr. shall be given due course after cancellation of TCT
No. RT-22481 (372302) in the name of Manotoks upon order of
a court of competent jurisdiction.
Meanwhile, in CA-G.R. SP No. 66642, the Third Division of the
Court of Appeals rendered a Decision21 on October 29, 2003,
the dispositive portion of which reads:
SO ORDERED.22
SO ORDERED.12
In so ruling, the Third Division of the Court of Appeals declared
that the LRA correctly deferred in giving due course to the
petition for reconstitution since there is yet no final judgment
upholding or annulling respondents’ title.23
Petitioners’ filed a motion for reconsideration which was
opposed by respondents with a prayer that reconstitution be
ordered immediately.
Respondents’ motion for reconsideration was granted by the
Third Division of the Court of Appeals on February 24, 2004,
thus:
On June 14, 2001, petitioners’ motion for reconsideration and
respondents’ prayer for immediate reconstitution were
denied.13
WHEREFORE, the Motion for Reconsideration is hereby
GRANTED. The Decision of this Court dated 29 October 2003
is RECONSIDERED and a new one is entered ordering the
Register of Deeds of Quezon City to cancel petitioners’ TCT
No. RT-22481 and directing the LRA to reconstitute forthwith
respondents’ TCT No. T-210177.
From the foregoing, respondents filed a petition for review14
with the Court of Appeals docketed as CA-G.R. SP No. 66700
and praying that the LRA be directed to immediately
reconstitute TCT No. 210177 without being subjected to the
condition that petitioners’ TCT No. RT-22481 [372302] should
first be cancelled by a court of competent jurisdiction.15
Petitioners likewise filed a petition for review with the Court of
Appeals docketed as CA-G.R. SP No. 66642.
SO ORDERED.24
From the foregoing decisions of the Court of Appeals in CAG.R. SP No. 66700 and CA-G.R. SP No. 66642, petitioners
filed separate petitions for review before this Court docketed as
G.R. No. 162605 and G.R. No. 162335, respectively.
In G.R. No. 162605, petitioners argue that:
I
THE MAJORITY JUSTICES ACTED WITHOUT
JURISDICTION IN ORDERING THE CANCELLATION OF
PETITIONERS’ EXISTING TITLE, CONSIDERING THAT:
a. THEY ORDERED THE CANCELLATION OF TITLE
DESPITE THE FACT THAT THE SAME IS NOT PART OF THE
RELIEF SOUGHT IN A RECONSTITUTION PROCEEDINGS.
b. THEY ALLOWED A COLLATERAL ATTACK ON A
TORRENS CERTIFICATE OF TITLE; and
c. THE COURT OF APPEALS, IN RESOLVING AN APPEAL
OF THE DECISION OF THE LAND REGISTRATION
AUTHORITY, DOES NOT HAVE JURISDICTION TO ORDER
THE CANCELLATION OF TITLE, SINCE ONLY A PROPER
REGIONAL TRIAL COURT CAN ORDER THE ANNULMENT/
CANCELLATION OF A TORRENS TITLE. BY ALLOWING A
"SHORT CUT", THE MAJORITY JUSTICES DEPRIVED THE
PETITIONERS OF THEIR PROPERTY AND THEIR
CONSTITUTIONALLY PROTECTED RIGHT TO DUE
PROCESS OF LAW.
II
THE MAJORITY JUSTICES GRAVELY MISAPPLIED THE
RULING OF THIS HONORABLE COURT IN ORTIGAS V.
VELASCO, CONSIDERING THAT:
a. IN THE ORTIGAS CASE, THERE WERE TWO TITLES
EXISTING OVER THE SAME PARCEL OF LAND, AS A
RESULT OF THE RECONSTITUTED TITLE ISSUED IN THE
NAME OF MOLINA. IN THE INSTANT CASE, ONLY
PETITIONERS HOLD TITLE TO THE PROPERTY IN
QUESTION, AS RESPONDENTS ARE MERELY TRYING TO
HAVE TITLE RECONSTITUTED IN THEIR NAMES.
b. IN ORTIGAS, THERE WERE SEVERAL DECISIONS OF
THE SUPREME COURT WHICH PREVIOUSLY RESOLVED
THE ISSUE OF OWNERSHIP OF ORTIGAS’ PROPERTY.
HENCE, THERE WAS SUFFICIENT GROUND TO ANNUL
MOLINA’S TITLE OUTRIGHT. IN THE INSTANT CASE,
THERE ARE NO SUCH DECISIONS IN FAVOR OF
RESPONDENTS WHICH WOULD JUSTIFY THE
CANCELLATION OF THE TITLE OF PETITIONERS
WITHOUT ANY HEARING.25
In G.R. No. 162335, petitioners raise the following issues:
I. THE HONORABLE COURT OF APPEALS (THIRD
DIVISION) COMMITTED GRAVE ABUSE OF DISCRETION
AND GROSS IGNORANCE OF THE LAW IN ORDERING THE
LAND REGISTRATION AUTHORITY TO CANCEL TCT NO.
RT-22481 OF PETITIONERS MANOTOK
NOTWITHSTANDING THE FACT THAT SAID COURT WAS
FULLY COGNIZANT THAT IT HAS NO JURISDICTION TO
EXERCISE SUCH AUTHORITY AND POWER AND THE
LAND REGISTRATION AUTHORITY IS EQUALLY DEVOID
OF JURISDICTION ON THE MATTER BECAUSE UNDER
THE JUDICIARY REORGANIZATION ACT OF 1980
SPECIFICALLY SECTION 19 (2) THEREOF, ONLY THE
REGIONAL TRIAL COURTS HAVE EXCLUSIVE ORIGINAL
JURISDICTION OVER CIVIL ACTIONS WHICH INVOLVES
TITLE TO, OR POSSESSION OF, REAL PROPERTY, OR ANY
INTEREST THEREIN.
II. THE HONORABLE COURT OF APPEALS (THIRD
DIVISION) COMMITTED GRAVE ABUSE OF DISCRETION
AND GROSS IGNORANCE OF THE LAW IN INVOKING
E Q U I TA B L E C O N S I D E R AT I O N T O J U S T I F Y I T S
CHALLENGED AMENDED DECISION DATED FEBRUARY
24, 2004 DIRECTING LRA TO CANCEL PETITIONERS
MANOTOK’S TITLE NOTWITHSTANDING THE FACT, AS
STATED, THE LAW EXPLICITLY VESTS EXCLUSIVE
ORIGINAL JURISDICTION TO THE REGIONAL TRIAL
COURTS OVER CIVIL ACTIONS WHICH INVOLVES TITLE
TO, OR POSSESSION OF, REAL PROPERTY, OR ANY
INTEREST THEREIN.
III. THE HONORABLE COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
IN EXCESS OF JURISDICTION IN FAILING TO ORDER THE
SETTING ASIDE OF THE CHALLENGED RESOLUTION
D AT E D J U N E 2 4 , 1 9 9 8 O F R E S P O N D E N T L A N D
REGISTRATION AUTHORITY IN LRC ADMIN. CASE NO.
Q-547 [97] VIEWED FROM THE FACT THAT SAID
RESOLUTION OF LRA IS PATENTLY AT WAR WITH LAW
AND CONTROLLING JURISPRUDENCE THAT PROHIBITS
RECONSTITUTION OF TITLE BY THIRD PARTY ALLEGED
TO HAVE BEEN LOST OR DESTROYED IF ANOTHER VALID
TITLE IS EXISTING COVERING THE LAND SUBJECT
THEREOF.
IV. THE LRA COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION
IN ORDERING THE RECONSTITUTION OF THE TITLE OF
HOMER BARQUE, SR. SUBJECT ONLY TO THE CONDITION
THAT THE TITLE OF PETITIONERS MANOTOK SHOULD
FIRST BE ORDERED CANCELLED BY COURT OF
COMPETENT JURISDICTION IN THE FACE OF THE
GLARING FACTS THAT SAID TITLE IS HIGHLY SUSPECT
A N D B E A R S B A D G E S O F F A B R I C AT I O N A N D
FALSIFICATION AND THEREFORE NO OTHER LOGICAL
AND CREDIBLE CONCLUSION CAN BE DRAWN EXCEPT
THAT IT IS A FAKE AND SPURIOUS TITLE.
V. THE HONORABLE COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
IN EXCESS OF JURISDICTION IN ALLOWING
RESPONDENTS’ MOTION FOR RECONSIDERATION
WHICH WAS CLEARLY FILED OUT OF TIME.26
On August 2, 2004, the petition in G.R. No. 162605 was
consolidated with the petition in G.R. No. 162335.27
In sum, petitioners contend that (a) the LRA has no authority to
annul their title; (b) the reconstitution of respondents’ Torrens
title would be a collateral attack on petitioners’ existing title; (c)
they were not given the opportunity to be heard, specifically the
chance to defend the validity of their Torrens title; (d) the Court
of Appeals, in resolving the appeal from the LRA, has no
jurisdiction to order the cancellation of petitioners’ title; and (e)
the ruling in Ortigas was misapplied.
The petitions must be denied.
The LRA properly ruled that the reconstituting officer should
have confined himself to the owner’s duplicate certificate of title
prior to the reconstitution. Section 3 of Republic Act (RA) No.
2628 clearly provides:
Section 3. Transfer certificates of title shall be reconstituted
from such of the sources hereunder enumerated as may be
available, in the following order:
(a) The owner’s duplicate of the certificate of title;
....
When respondents filed the petition for reconstitution, they
submitted in support thereof the owner’s duplicate certificate of
title, real estate tax receipts and tax declaration. Plainly, the
same should have more than sufficed as sources for the
reconstitution pursuant to Section 3 of RA No. 26 which
explicitly mandates that the reconstitution shall be made
following the hierarchy of sources as enumerated by law. In
addition, Section 12 of the same law requires that the petition
shall be accompanied with a plan and technical description of
the property only if the source of the reconstitution is Section
3(f) of RA No. 26. Thus:
Section 12. … Provided, That in case the reconstitution is to be
made exclusively from sources enumerated in section 2(f) or
3(f) of this Act, the petition shall further be accompanied with a
plan and technical description of the property duly approved by
the Chief of the General Land Registration Office, or with a
certified copy of the description taken from a prior certificate of
title covering the same property.29
Since respondents’ source of reconstitution is the owner’s
duplicate certificate of title, there is no need for the
reconstituting officer to require the submission of the plan,
much less deny the petition on the ground that the submitted
plan appears to be spurious. By enumerating the hierarchy of
sources to be used for the reconstitution, it is the intent of the
law to give more weight and preference to the owner’s
duplicate certificate of title over the other enumerated sources.
The factual finding of the LRA that respondents’ title is
authentic, genuine, valid, and existing, while petitioners’ title is
sham and spurious, as affirmed by the two divisions of the
Court of Appeals, is conclusive before this Court. It should
remain undisturbed since only questions of law may be raised
in a petition for review under Rule 45 of the Rules of Court.
Findings of fact of administrative bodies are accorded respect,
even finality by this Court and, when affirmed by the Court of
Appeals, are no longer reviewable except only for very
compelling reasons. Basic is the rule that factual findings of
agencies exercising quasi-judicial functions … are accorded
not only respect but even finality, aside from the consideration
that this Court is essentially not a trier of facts.30
Such questions as whether certain items of evidence should be
accorded probative value or weight, or rejected as feeble or
spurious, or whether or not the proofs on one side or the other
are clear and convincing and adequate to establish a
proposition in issue, are without doubt questions of fact.
Whether or not the body of proofs presented by a party,
weighed and analyzed in relation to contrary evidence
submitted by adverse party, may be said to be strong, clear
and convincing; whether or not certain documents presented
by one side should be accorded full faith and credit in the face
of protests as to their spurious character by the other side;
whether or not inconsistencies in the body of proofs of a party
are of such gravity as to justify refusing to give said proofs
weight – all these are issues of fact. Questions like these are
not reviewable by this court which, as a rule, confines its
review of cases decided by the Court of Appeals only to
questions of law raised in the petition and therein distinctly set
forth.31 A petition for review should only cover questions of law.
Questions of fact are not reviewable.32
In Dolfo v. Register of Deeds for the Province of Cavite,33 this
Court categorically declared:
Second. Both the trial court and the Court of Appeals made a
factual finding that petitioner’s title to the land is of doubtful
authenticity.
Having jurisdiction only to resolve questions of law, this Court
is bound by the factual findings of the trial court and the Court
of Appeals....
In view of the foregoing, it is no longer necessary to remand
the case to the RTC for the determination of which title,
petitioners' or respondents', is valid or spurious. This has been
ruled upon by the LRA and duly affirmed by the two divisions of
the Court of Appeals.
The LRA has the jurisdiction to act on petitions for
administrative reconstitution. It has the authority to review,
revise, reverse, modify or affirm on appeal the decision of the
reconstituting officer. The function is adjudicatory in nature – it
can properly deliberate on the validity of the titles submitted for
reconstitution. Logically, it can declare a title as sham or
spurious, or valid on its face. Otherwise, if it cannot make such
declaration, then there would be no basis for its decision to
grant or deny the reconstitution. The findings of fact of the
LRA, when supported by substantial evidence, as in this case,
shall be binding on the Court of Appeals.34
In the reconstitution proceedings, the LRA is bound to
determine from the evidence submitted which between or
among the titles is genuine and existing to enable it to decide
whether to deny or approve the petition. Without such authority,
the LRA would be a mere robotic agency clothed only with
mechanical powers.
The Court of Appeals also properly exercised its appellate
jurisdiction over the judgment of the LRA. Under Sections 1
and 3, Rule 43 of the Rules of Court, the appellate court has
jurisdiction on appeals from judgments or final orders of the
LRA, whether the appeal involves questions of fact, of law, or
mixed questions of fact and law.
Indeed, it would be needlessly circuitous to remand the case to
the RTC to determine anew which of the two titles is sham or
spurious and thereafter appeal the trial court’s ruling to the
Court of Appeals. After all, the LRA and the two divisions of the
appellate court have already declared that petitioners’ title is
forged. In Mendoza v. Court of Appeals,35 we ruled that:
Now, technically, the revocation and cancellation of the deed of
sale and the title issued in virtue thereof in de los Santos’ favor
should be had in appropriate proceedings to be initiated at the
instance of the Government. However, since all the facts are
now before this Court, and it is not within de los Santos’
power in any case to alter those facts at any other
proceeding, or the verdict made inevitable by said facts,
for this Court to direct at this time that cancellation
proceedings be yet filed to nullify the sale to de los Santos
and his title, would be needlessly circuitous and would
unnecessarily delay the termination of the controversy at
bar, .... This Court will therefore make the adjudication
entailed by the facts here and now, without further
proceedings, as it has done in other cases in similar
premises.
No useful purpose will be served if a case or the determination
of an issue in a case is remanded to the trial court only to have
its decision raised again to the Court of Appeals and then to
the Supreme Court. The remand of the case or of an issue to
the lower court for further reception of evidence is not
necessary where the Court is in position to resolve the dispute
based on the records before it and particularly where the ends
of justice would not be subserved by the remand thereof.36
The Register of Deeds, the LRA and the Court of Appeals have
jurisdiction to act on the petition for administrative
reconstitution. The doctrine laid down in Alabang Dev. Corp., et
al. v. Hon. Valenzuela, etc., et al.37 does not apply in the instant
case. In Alabang, the Court stressed that:
… [L]ands already covered by duly issued existing Torrens
Titles … cannot be the subject of petitions for reconstitution of
allegedly lost or destroyed titles filed by third parties without
first securing by final judgment the cancellation of such existing
titles. … The courts simply have no jurisdiction over petitions
by such third parties for reconstitution of allegedly lost or
destroyed titles over lands that are already covered by duly
issued subsisting titles in the names of their duly registered
owners. The very concept of stability and indefeasibility of titles
covered under the Torrens System of registration rules out as
anathema the issuance of two certificates of title over the same
land to two different holders thereof. …38
The Alabang ruling was premised on the fact that the existing
Torrens title was duly issued and that there is only one title
subsisting at the time the petition for reconstitution was filed. In
the instant case, it cannot be said that petitioners’ title was
duly issued much less could it be presumed valid considering
the findings of the LRA and the Court of Appeals that the same
is sham and spurious.
The Court of Appeals properly applied the doctrine laid down in
Ortigas in refusing to remand the case to the trial court. As
expressly declared in Ortigas & Company Limited Partnership
v. Velasco:39
Ordinarily, the relief indicated by the material facts would be
the remand of the reconstitution case (LRC No. Q-5405) to the
Court of origin with instructions that Ortigas’ and the Solicitor
General’s appeals from the judgment rendered therein, which
were wrongly disallowed, be given due course and the records
forthwith transmitted to the appellate tribunal. This, in fact, is a
relief alternatively prayed for by petitioner Ortigas. Considering
however the fatal infirmities afflicting Molina’s theory or cause
of action, evident from the records before this Court, such a
remand and subsequent appeal proceedings would be
pointless and unduly circuitous. Upon the facts, it is not
possible for Molina’s cause to prosper. To defer adjudication
thereon would be unwarranted and unjust.
The same rationale should apply in the instant case. As
already discussed, the validity of respondents’ and petitioners’
title have been squarely passed upon by the LRA and reviewed
and affirmed by the Court of Appeals, which factual findings are
no longer reviewable by this Court.
A careful examination of the case of Spouses Cayetano, et al.
v. CA, et al.,40 where this Court, as claimed by petitioners, have
affirmed their title over the disputed property, would reveal that
the sole issue resolved therein is whether or not a tenancy
relationship exists between the parties.41 There was no
adjudication on ownership. In fact, it cannot even be discerned
if the property subject of the Spouses Cayetano case refers to
the property subject of the instant controversy.
There is no basis in the allegation that petitioners were
deprived of "their property" without due process of law when
the Court of Appeals ordered the cancellation of their Torrens
title, even without a direct proceeding in the RTC. As already
discussed, there is no need to remand the case to the RTC for
a re-determination on the validity of the titles of respondents
and petitioners as the same has been squarely passed upon
by the LRA and affirmed by the appellate court. By opposing
the petition for reconstitution and submitting their
administratively reconstituted title, petitioners acquiesced to
the authority and jurisdiction of the reconstituting officer, the
LRA and the Court of Appeals, and recognized their authority
to pass judgment on their title. All the evidence presented was
duly considered by these tribunals. There is thus no basis to
petitioners’ claim that they were deprived of their right to be
heard and present evidence, which is the essence of due
process.
As held in Yusingco v. Ong Hing Lian:42
Therefore, it appearing from the records that in the previous
petition for reconstitution of certificates of title, the parties
acquiesced in submitting the issue of ownership for
determination in the said petition, and they were given the full
opportunity to present their respective sides of the issues and
evidence in support thereof, and that the evidence presented
was sufficient and adequate for rendering a proper decision
upon the issue, the adjudication of the issue of ownership was
valid and binding.
The reconstitution would not constitute a collateral attack on
petitioners’ title which was irregularly and illegally issued in the
first place.43 As pertinently held in Dolfo v. Register of Deeds
for the Province of Cavite:44
The rule that a title issued under the Torrens System is
presumed valid and, hence, is the best proof of ownership of a
piece of land does not apply where the certificate itself is faulty
as to its purported origin.
In this case, petitioner anchors her arguments on the premise
that her title to the subject property is indefeasible because of
the presumption that her certificate of title is authentic.
However, this presumption is overcome by the evidence
presented, consisting of the LRA report … that TCT No.
T-320601 was issued without legal basis …
….
Thus, petitioner cannot invoke the indefeasibility of her
certificate of title. It bears emphasis that the Torrens system
does not create or vest title but only confirms and records one
already existing and vested. Thus, while it may be true, as
petitioner argues, that a land registration court has no
jurisdiction over parcels of land already covered by a certificate
of title, it is equally true that this rule applies only where there
exists no serious controversy as to the authenticity of the
certificate.
Under similar circumstances, this Court has ruled that wrongly
reconstituted certificates of title secured through fraud and
misrepresentation cannot be the source of legitimate rights and
benefits.45
WHEREFORE, the petitions are DENIED. In G.R. No. 162335,
the February 24, 2004 Amended Decision of the Third Division
of the Court of Appeals in CA-G.R. SP No. 66642, ordering the
Register of Deeds of Quezon City to cancel petitioners’ TCT
No. RT-22481 and directing the Land Registration Authority to
reconstitute respondents’ TCT No. 210177; and in G.R. No.
162605, the November 7, 2003 Amended Decision of the
Special Division of Five of the Former Second Division in CAG.R. SP No. 66700 directing the Register of Deeds of Quezon
City to cancel petitioners’ TCT No. RT-22481, and the Land
Registration Authority to reconstitute respondents’ TCT No.
T-210177 and the March 12, 2004 Resolution denying the
motion for reconsideration, are AFFIRMED.
SO ORDERED.
G.R. No. 46724
September 30, 1939
CRESCENCIO REYNES, ET AL., plaintiffs-appellees,
vs.
ROSALINA BARRERA, ET AL., defendants-appellants.
Jose S. Leyson and Juan M. Wahing for appellant Barrera.
No appearance for other appellants.
Ramon Duterte for appellees.
MORAN, J.:
The spouses, Vidal Reynes and Lucia R. de Reynes, were
owners of lot No. 471 of the cadastral survey of Cebu. On July
23, 1922, Lucia R. de Reynes died, leaving the plaintiffsappellees herein, Cresencio Reynes et al., as her heirs. After
her death, Vidal Reynes contracted, on December 15, 1923, a
debt of one thousand pesos (P1,000) with one Pedro
Malacahan. In an action subsequently brought by the creditor
against said Vidal Reynes, a condemnatory judgment was
rendered, and in virtue thereof, execution was levied on said
lot No. 471, which was later sold at public auction by the
provincial sheriff of Cebu. Vidal Reynes conveyed his right of
redemption to his brother Manuel Reynes who thereafter
redeemed the property. Subsequently, the lot was subdivided
into lot No. 471-a and 471-b, the second lot having been
registered in the name of Manuel Reynes, as evidenced by
transfer certificate of title No. 11364. Lot No. 471-a is not
involved in this appeal, for apparently it has been conveyed to
Angel C. Sanchez, the same person to whom it had been sold
by the spouses Vidal Reynes and Lucia R. de Reynes during
the latter's lifetime. With respect to lot No. 471-b, Manuel
Reynes conveyed the same, under pacto de retro, to the
defendant-appellant herein, Rosalina Barrera who, thereafter,
acquired full ownership thereof and since then had been in
continuous possession of the property until the
commencement of the present action. Plaintiffs-appellees now
seek to declare null and void the sale at public auction of onehalf of the property in question, which appertained to them be
heirship, as well as all subsequent transfer thereof. The lower
court rendered judgment for the plaintiffs, from which
defendant, Rosalina Barrera, took the present appeal.
There is no question that the defendant-appellant is a
purchaser of lot No. 471-b in good faith and for a valuable
consideration. There was nothing in the certificate of title of
Manuel Reynes, from whom she acquired the property, to
indicate any cloud or vice in his ownership of the property, or
any encumbrance thereon. Where the subject of a judicial sale
is a registered property, the purchaser thereof is not required to
explore farther than what the Torrens title, upon its face,
indicates in quest for any hidden defect or inchoate right that
may subsequently defeat his right thereto. If the rule were
otherwise, the efficacy and conclusiveness of the certificate of
title which the Torrens system seeks to insure, would entirely
be futile and nugatory. "Every applicant receiving a certificate
of title in pursuance of a decree of registration, and every
subsequent purchaser or registered land who takes a
certificate of title for value in good faith, shall hold the same
free of all encumbrance except those noted on said certificate .
. .." (Sec. 39, Act No. 496, as amended by Act No. 2011.) In De
la Cruz vs. Fabie (35 Phil., 144), it was held that, even
admitting the fact that a registration obtained by means of
fraud or forgery is not valid, and may be cancelled forthwith,
yet, when a third person has acquired the property subjectmatter of such registration from the person who appears as
registered owner of same, his acquisition is valid in all respects
and registration in his favor cannot be annulled or cancelled;
neither can the property be recovered by the previous owner
who is deprived thereof by virtue of such fraud or forgery.
Judgment is accordingly reversed, and defendant-appellant is
hereby absolved from the complaint, with costs in both
instances against plaintiffs-appellees.