EILEEN EIKA M.

DELA CRUZ

LTD case

This is a petition for review[1] under Rule 45 of the Rules of Court of

the Court of Appeals Decision dated 22 March 2005[2] and Resolution
dated 9 February 2006[3] in CA-G.R. CV No. 67462. The Court of
Appeals reversed the 12 November 1999 Order of the Regional Trial
Court (RTC) of Olongapo City, Branch 73[4] which granted the motion
to dismiss filed by Guaranteed Homes, Inc. (petitioner). The appellate
court denied petitioners motion for reconsideration.
The factual antecedents are as follows:
Respondents, who are the descendants of Pablo Pascua (Pablo), filed
a complaint seeking reconveyance of a parcel of land with an area of
23.7229 hectares situated in Cabitaugan, Subic, Zambales and
covered by Original Certificate of Title (OCT) No. 404 in the name of
Pablo.[5] In the alternative, the respondents prayed that damages be
awarded in their favor.[6]
OCT No. 404[7] was attached as one of the annexes of respondents
complaint. It contained several annotations in the memorandum of
encumbrances which showed that the property had already been sold
by Pablo during his lifetime to Alejandria Marquinez and Restituto
Morales. Respondents also attached copies of the following
documents as integral parts of their complaint: Transfer Certificate of
Title (TCT) No. T-8241,[8] TCT No. T-8242,[9] TCT No. T-10863,[10]
the Extrajudicial Settlement of a Sole Heir and Confirmation of
Sales[11] executed by Cipriano Pascua, Sr. (Cipriano), and the Deed of
Sale with Mortgage[12] between spouses Albino Rodolfo and Fabia
Rodolfo (spouses Rodolfo) and petitioner.

SY 2016-2017
SECOND DIVISION

GUARANTEED HOMES, INC., G.R. No. 171531

Petitioner,
- versus - Present:
HEIRS OF MARIA P. VALDEZ, QUISUMBING, J.,
(EMILIA V. YUMUL and VICTORIA Chairperson,
V. MOLINO), HEIRS OF SEVERINA CORONA,*
P. TUGADE (ILUMINADA and CARPIO MORALES,
LEONORA P. TUGADE, HEIRS OF TINGA, and
ETANG P. GATMIN (LUDIVINA BRION, JJ.
G. DELA CRUZ (by and through
ALFONSO G. DELA CRUZ), HILARIA
G. COBERO and ALFREDO G. COBERO) Promulgated:
and SIONY G. TEPOL (by and through
ELENA T. RIVAS and ELESIO TEPOL,
JR.), AS HEIRS OF DECEDENT PABLO January 30, 2009
PASCUA,
Respondents.
x
------------------------------------------------------------------------------------------------ x
DECISION
TINGA, J.:

EILEEN EIKA M. DELA CRUZ

LTD case

Petitioner filed a motion to dismiss[23] the complaint on the grounds

that the action is barred by the Statute of Limitations, more than 28
years having elapsed from the issuance of TCT No. T-10863 up to the
filing of the complaint, and that the complaint states no cause of action
as it is an innocent purchaser for value, it having relied on the clean
title of the spouses Rodolfo.
Impleaded as defendants, the heirs of Cipriano filed an answer to the
complaint in which they denied knowledge of the existence of the
extrajudicial settlement allegedly executed by Cipriano and averred that
the latter, during his lifetime, did not execute any document transferring
ownership of the property.[24]
The Register of Deeds and the National Treasurer filed, through the
Office of the Solicitor General, an answer averring that the six (6)-year
period fixed in Section 102 of Presidential Decree (P.D.) No. 1529 for
the filing of an action against the Assurance Fund had long prescribed
since the transfer of ownership over the property was registered
through the issuance of TCT No. T-10863 in favor of petitioner as early
as 1969. They also claimed that respondents have no cause of action
against the Assurance Fund since they were not actually deprived of
ownership over the property, as they could have recovered the property
had it not been for their inaction for over 28 years.[25]
The RTC granted petitioners motion to dismiss.[26] Noting that
respondents had never claimed nor established that they have been in
possession of the property and that they did not present any evidence
to show that petitioner has not been in possession of the property

SY 2016-2017

In their complaint,[13] respondents alleged that Pablo died intestate

sometime in June 1945 and was survived by his four children, one of
whom was the deceased Cipriano.[14] On 13 February 1967, Cipriano
executed a document denominated as Extrajudicial Settlement of a
Sole Heir and Confirmation of Sales,[15] wherein he declared himself
as the only heir of Pablo and confirmed the sales made by the
decedent during his lifetime, including the alleged sale of the disputed
property to spouses Rodolfo.
Respondents likewise averred that on the following day 14 February
1967, TCT No. T-8241[16] was issued in the name of Cipriano without
OCT No. 404 having been cancelled.[17] However, TCT No. T-8241
was not signed by the Register of Deeds. On the same day, TCT No. T8242 was issued in the name of the spouses Rodolfo and TCT No. T8241 was thereby cancelled.[18] Subsequently, on 31 October 1969,
the spouses Rodolfo sold the disputed property to petitioner by virtue
of a Deed of Sale with Mortgage. Consequently, on 5 November 1969,
TCT No. T-8242 was cancelled and TCT No. T-10863[19] was issued
in the name of petitioner.[20]
It was further averred in the complaint that Jorge Pascua, Sr., son of
Cipriano, filed on 24 January 1997 a petition before the RTC of
Olongapo City, Branch 75, for the issuance of a new owners duplicate
of OCT No. 404, docketed as Other Case No. 04-0-97.[21] The RTC
denied the petition.[22] The trial court held that petitioner was already
the owner of the land, noting that the failure to annotate the
subsequent transfer of the property to it at the back of OCT No. 404
did not affect its title to the property.

EILEEN EIKA M. DELA CRUZ

LTD case

SY 2016-2017

issuance of the challenged TCT No. T-10863 on 5 November 1969 and

thus expired in 1975.

either, the RTC applied the doctrine that an action to quiet title
prescribes where the plaintiff is not in possession of the property.

Undaunted, respondents appealed to the Court of Appeals.[27]

The trial court found that the complaint per its allegations presented a
case of implied or constructive trust on the part of Cipriano who had
inaccurately claimed to be the sole heir of Pablo in the deed of
extrajudicial settlement of estate which led to the issuance of TCT No.
T- 8241 in his favor. As the prescriptive period for reconveyance of a
fraudulently registered real property is ten (10) years reckoned from
the date of the issuance of the title, the trial court held that the action
for reconveyance had already prescribed with the lapse of more than
28 years from the issuance of TCT No. T-10863 on 5 November 1969
as of the filing of the complaint on 21 November 1997.

The Court of Appeals reversed the RTCs order.[28] In ordering the

reinstatement of the complaint, the appellate court ruled that the
averments in respondents complaint before the RTC make out a case
for quieting of title which has not prescribed. Respondents did not have
to prove possession over the property since petitioner as the movant in
a motion to dismiss hypothetically admitted the truth of the allegations
in the complaint. The appellate court found that possession over the
property was sufficiently alleged in the complaint which stated that
neither petitioner nor the Rodolfo spouses ever had possession of the
disputed property as a number of the Pascua heirs either had been
(still are) in actual, continuous and adverse possession thereof or had
been enjoying (still are enjoying) the use thereof.[29] By the same
token, laches had not set in, the Court of Appeals added.
The appellate court further held that the ruling of the RTC that
petitioner is an innocent purchaser for value is contrary to the
allegations in respondents complaint.
Hence, the present petition for review.
The sole issue before this Court revolves around the propriety of the
RTCs granting of the motion to dismiss and conversely the tenability of
the Court of Appeals reversal of the RTCs ruling.

The RTC added that it is an enshrined rule that even a registered

owner of property may be barred from recovering possession of
property by virtue of laches.
The RTC further held that petitioner had the right to rely on TCT No. T8242 in the name of spouses Rodolfo. Petitioner is not obliged to go
beyond the title considering that there were no circumstances
surrounding the sale sufficient to put it into inquiry.
Concerning the Assurance Fund, the RTC held that the claim against it
had long prescribed since Section 102 of P.D. No. 1529 provides for a
six-year period within which a plaintiff may file an action against the
fund and in this case the period should be counted from the time of the

EILEEN EIKA M. DELA CRUZ

LTD case

In the case at bar, the trial court conducted a hearing on the motion to
dismiss. At the hearing, the parties presented documentary evidence.
Among the documents marked and offered in evidence are the
annexes of the complaint.[35]
Based on the standards set by this Court in relation to the factual
allegations and documentary annexes of the complaint as well as the
exhibits offered at the hearing of the motion to dismiss, the inescapable
conclusion is that respondents complaint does not state a cause of
action against petitioner.
Firstly, the complaint does not allege any defect with TCT No. T-8242
in the name of the spouses Rodolfo, who were petitioners
predecessors-in-interest, or any circumstance from which it could
reasonably be inferred that petitioner had any actual knowledge of
facts that would impel it to make further inquiry into the title of the
spouses Rodolfo.[36] It is basic that a person dealing with registered
property need not go beyond, but only has to rely on, the title of his
predecessor-in-interest. Since "the act of registration is the operative
act to convey or affect the land insofar as third persons are concerned,
it follows that where there is nothing in the certificate of title to indicate
any cloud or vice in the ownership of the property, or any encumbrance
thereon, the purchaser 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. The public shall then be denied of its foremost

SY 2016-2017

The petition is meritorious.

It is well-settled that to sustain a dismissal on the ground that the
complaint states no cause of action, the insufficiency of the cause of
action must appear on the face of the complaint, and the test of the
sufficiency of the facts alleged in the complaint to constitute a cause of
action is whether or not, admitting the facts alleged, the court could
render a valid judgment upon the same in accordance with the prayer
of the complaint. For the purpose, the motion to dismiss must
hypothetically admit the truth of the facts alleged in the complaint.[30]
The admission, however, is limited only to all material and relevant
facts which are well pleaded in the complaint.[31]
The factual allegations in respondents complaint should be considered
in tandem with the statements and inscriptions on the documents
attached to it as annexes or integral parts. In a number of cases, the
Court held that in addition to the complaint, other pleadings submitted
by the parties should be considered in deciding whether or not the
complaint should be dismissed for lack of cause of action.[32]
Likewise, other facts not alleged in the complaint may be considered
where the motion to dismiss was heard with the submission of
evidence, or if documentary evidence admitted by stipulation discloses
facts sufficient to defeat the claim.[33] For while the court must accept
as true all well pleaded facts in the complaint, the motion does not
admit allegations of which the court will take judicial notice are not true,
nor does the rule apply to legally impossible facts, nor to facts
inadmissible in evidence, nor to facts which appear by record or
document included in the pleadings to be unfounded.[34]

EILEEN EIKA M. DELA CRUZ

LTD case

SY 2016-2017

encumbrances except those noted on said certificate and any of the

following encumbrances which may be subsisting, namely:
xxxx

motivation for respecting and observing the Torrens system of

registration. In the end, the business community stands to be
inconvenienced and prejudiced immeasurably.[37]

Even assuming arguendo that the extrajudicial settlement was a

forgery, the Court still has to uphold the title of petitioner. The case law
is that although generally a forged or fraudulent deed is a nullity and
conveys no title, there are instances when such a fraudulent document
may become the root of a valid title.[39] And one such instance is
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. For then, the vendee
had the right to rely upon what appeared in the certificate.[40]

Contrary to the assertion of respondents, OCT No. 404 was expressly

cancelled by TCT No. T-8241. The alleged non-signature by the
Register of Deeds Soliman Achacoso, , does not affect the validity of
TCT No. T-8241 since he signed TCT No. T- 8242 and issued both
titles on the same day. There is a presumption of regularity in the
performance of official duty. The presumption is further bolstered by
the fact that TCT No. T-8241 was certified to be on file with the
Registry of Deeds and registered in the name of Cipriano. It is enough
that petitioner had examined the latest certificate of title which in this
case was issued in the name of the immediate transferor, the spouses
Rodolfo. The purchaser is not bound by the original certificate but only
by the certificate of title of the person from whom he had purchased
the property.[38]

The Court cannot give credence to respondents claims that the

Extrajudicial Settlement of a Sole Heir and Confirmation of Sales was
not registered and that OCT No. 404 was not cancelled by the Register
of Deeds. The Register of Deeds of Zambales certified that the
extrajudicial settlement was recorded on 14 February 1967, per Entry
No. 18590. This is in compliance with Section 56 of Act No. 496,[41]
the applicable law at the time of registration, which provides that:
Sec. 56. Each register of deeds shall keep an entry book in which he
shall enter in the order of their reception all deeds and other voluntary
instruments, and all copies of writs and other process filed with him
relating to registered land. He shall note in such book the year, month,
day, hour, and minute of reception of all instruments, in the order in
which they are received. They shall be regarded as registered from the
time so noted, and the memorandum of each instrument when made

Secondly, while the Extrajudicial Settlement of a Sole Heir and

Confirmation of Sales executed by Cipriano alone despite the
existence of the other heirs of Pablo, is not binding on such other heirs,
nevertheless, it has operative effect under Section 44 of the Property
Registration Decree, which provides that:
SEC. 44. Statutory Liens Affecting Title. Every registered owner
receiving a certificate of title in pursuance of a decree of registration,
and every subsequent purchaser of registered land taking a certificate
of title for value and in good faith, shall hold the same free from all

EILEEN EIKA M. DELA CRUZ

LTD case

SY 2016-2017

facts not stated; nor conclusions of law; nor matters of evidence; nor
surplusage and irrelevant matters.[47]

on the certificate of title to which it refers shall bear the same date.
[Emphasis supplied]

The other heirs of Pablo should have filed an action for reconveyance
based on implied or constructive trust within ten (10) years from the
date of registration of the deed or the date of the issuance of the
certificate of title over the property.[48] The legal relationship between
Cipriano and the other heirs of Pablo is governed by Article 1456 of the
Civil Code which provides that if a property is acquired through mistake
or fraud, the person obtaining it is, by force of law, considered a trustee
of an implied trust for the benefit of the person from whom the property
comes.

Registration in the public registry is notice to the whole world. Every

conveyance, mortgage, lease, lien, attachment, order, judgment,
instrument or entry affecting registered land shall be, if registered, filed
or entered in the Office of the Register of Deeds of the province or city
where the land to which it relates lies, be constructive notice to all
persons from the time of such registering, filing or entering.[42]

From the above discussion, there is no question that petitioner is an

innocent purchaser for value; hence, no cause of action for
cancellation of title will lie against it.[49] The RTC was correct in
granting petitioners motion to dismiss.
Lastly, respondents claim against the Assurance Fund also cannot
prosper. Section 101 of P.D. No. 1529 clearly provides that the
Assurance Fund shall not be liable for any loss, damage or deprivation
of any right or interest in land which may have been caused by a
breach of trust, whether express, implied or constructive. Even
assuming arguendo that they are entitled to claim against the
Assurance Fund, the respondents claim has already prescribed since
any action for compensation against the Assurance Fund must be
brought within a period of six (6) years from the time the right to bring
such action first occurred, which in this case was in 1967.

Thirdly, respondents cannot make out a case for quieting of title since
OCT No. 404 had already been cancelled. Respondents have no title
to anchor their complaint on.[43] Title to real property refers to that
upon which ownership is based. It is the evidence of the right of the
owner or the extent of his interest, by which means he can maintain
control and, as a rule, assert right to exclusive possession and
enjoyment of the property.[44]
Moreover, there is nothing in the complaint which specified that the
respondents were in possession of the property. They merely alleged
that the occupants or possessors are others not defendant Spouses
Rodolfo[45] who could be anybody, and that the property is in actual
possession of a number of the Pascua heirs[46] who could either be
the respondents or the heirs of Cipriano. The admission of the truth of
material and relevant facts well pleaded does not extend to render a
demurrer an admission of inferences or conclusions drawn therefrom,
even if alleged in the pleading; nor mere inferences or conclusions
from

EILEEN EIKA M. DELA CRUZ

LTD case

in consultation before the case was assigned to the writer of the

opinion of the Courts Division.

LEONARDO A. QUISUMBING
Acting Chief Justice

*As replacement of Justice Presbitero J. Velasco, Jr., per Special Order

No. 558.
[1]Rollo, pp. 34-95.
[2]Id. at 11-19. The decision was penned by Associate Justice Edgardo
Cruz and concurred in by Associate Justices Romeo Brawner and Jose
Mendoza. The dispositive portion reads as follows:
WHEREFORE, the appealed order of the Regional Trial Court of
Olongapo City (Branch 73) is REVERSED and SET ASIDE, while the
motion to dismiss filed by Guaranteed Homes, Inc. is DENIED and the
complaint is REINSTATED. Let this case be REMANDED to that court
for further proceedings.
SO ORDERED.
[3]Id. at 28.

SY 2016-2017

WHEREFORE, the petition is GRANTED. The decision of the Court of

Appeals in CA-G.R. CV No. 67462 is REVERSED and SET ASIDE.
The 12 November 1999 Order of the Regional Trial Court of Olongapo
City, Branch 73 in Civil Case No. 432-097 is REINSTATED.
SO ORDERED.

DANTE O. TINGA Associate Justice

WE CONCUR
LEONARDO A. QUISUMBING
Acting Chief Justice
Chairperson
RENATO C. CORONA CONCHITA CARPIO MORALES
Associate Justice Associate Justice
ARTURO D. BRION
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby

certified that the conclusions in the above Decision had been reached

EILEEN EIKA M. DELA CRUZ

LTD case

SY 2016-2017

[22]Id. at 124-127.
[23]Id. at 145-148.
[24]Id. at 160-162.
[25]Id. at 171-174.
[26]CA rollo, pp. 46-49.
[27]Rollo, pp. 194-195.
[28]Supra note 2.
[29]Rollo, p. 17.

[4]Id. at 22-26. The order was penned by Judge Alicia L. Santos. The
dispositive portion reads as follows:

[30]Azur v. Provincial Board, No. L-22333, 27 February 1969, 27 SCRA

50, 55; See also Militante III v. Edrosolano, et al., 148-A Phil. 421, 428
(1971); Phil. Sugar Institute v. CIR, et al., No. L-18930, 28 Feb. 1967,
19 SCRA 471, 479; Espinosa v. Belda, No. L-17988, 31 March 1967,
19 SCRA 715; Rava Development Coporation v. Court of Appeals, 197
SCRA 663 (1991); Paredes v. Intermediate Appellate Court, G.R. No.
70717, 8 May 1990, 185 SCRA 134; D.C. Crystals, Inc. v. Laya, G.R.
No. 53597, 28 February 1989, 170 SCRA 734.

[5]Id. at 118.

[31]Alzua and Arnalot v. Johnson, 21 Phil. 308, 349-350 (1912).

[32]Marcopper Mining Corp. v. Garcia, 227 Phil. 166, 174 (1986).
[33]Tan v. Director of Forestry, et al., 210 Phil. 244, 255 (1983).
[34]Id.
[35]Records, p. 107.
[36]Santos v. CA, G.R. No. 90380, 13 September 1990, 189 SCRA
550; Bailon-Casilao v. Court of Appeals, No. L-78178, 15 April 1988,
160 SCRA 738, 750, citing Gonzales v. IAC, G.R. No. 69622, 29
January 1988.
37]Fule and Aragon v. De Legare and CA, 117 Phil. 367, 377 (1963).

WHEREFORE, viewed from the foregoing considerations, the Motion

to Dismiss filed by defendant Guaranteed Homes, Inc. is hereby
GRANTED. Consequently, this case is hereby DISMISSED.
SO ORDERED.

[6]Id. at 128-141.
[7]Records, pp. 21-22.
[8]Rollo, p. 120.
[9]Id. at 26-27.
[10]Id. at 33.
[11]Id. at 143-144.
[12]Id. at 28-32.
[13]Id. at 128-142.
[14]Id. at 131.
[15]Supra note 11.
[16]Supra note 8.
[17]Rollo, p. 135.
[18]Id. at 121-122.
[19]Id. at 123.
[20]Id. at 135.
[21]Id. at 114-117.

EILEEN EIKA M. DELA CRUZ

LTD case

All deeds and voluntary instruments shall be presented with their

respective copies and shall be attested and sealed by the Register of
Deeds, endorsed with the file number, and copies may be delivered to
the person presenting them.
Certified copies of all instruments filed and registered may also be
obtained from the Register of Deeds upon payment of the prescribed
fees. [Emphasis supplied]
[42]Presidential Decree No. 1529 (1978), Sec. 52.
[43]CIVIL CODE. Art. 477. The plaintiff must have legal or equitable
title to, or interest in the real property which is the subject-matter of the
action. He need not be in possession of said property. [Emphasis
supplied] See Evangelista, et al. v. Santiago, G.R. No. 157447, 29 April
2005, 457 SCRA 744.
[44]Id. at 766, citing Narciso Pea, et al., Registration of Land Titles and
Deeds 3 (1994 ed.).
[45]Rollo, p. 136.
[46]Id.
[47]Vergel De Dios v. Bristol Laboratories (Phils.), Inc., 154 Phil. 311,
318 (1974).
[48]Vda de Portugal v. Intermediate Appellate Court, No. L- 73564, 159
SCRA 178; Amerol v. Bagumbaran, No. L-33261, 30 September 1987,
154 SCRA 396.
[49]Medina, et al. v. Hen. Chanco, et al., 202 Phil. 515 (1982);
Spouses Chu, Sr. v. Benelda Estate Devt Corporation, 405 Phil. 936
(2001); Republic of the Phils. v. Court of Appeals, 365 Phil. 522 (1999).
Republic of the Philippines

SY 2016-2017

[38]Co v. Court of Appeals, G.R. No. 93687, 6 May 1991, 196 SCRA
705, 713 citing Lim v. Court of Appeals, 182 SCRA 564 (1990);
Hernandez v. Katigbak Vda. de Salas, 69 Phil. 744 (1940).
[39]Director of Lands v. Addison, 49 Phil. 19 (1926).
[40]Inquimboy v. Vda. de Cruz, G.R. No. L-13953, 26 July 1960.
[41]The Land Registration Act. A similar provision is now found in
Section 56 of P.D. No. 1529, which reads:
Sec. 56. Primary Entry Book; Fees; Certified Copies. Each Register of
Deeds shall keep a primary entry book in which, upon payment of the
entry fee, he shall enter, in the order of their reception, all instruments
including copies of writs and processes filed with him relating to
registered land. He shall, as a preliminary process in registration, note
in such book the date, hour and minute of reception of all instruments,
in the order in which they were received. They shall be regarded as
registered from the time so noted, and the memorandum of each
instrument, when made on the certificate of title to which it refers, shall
bear the same date: Provided, that the national government as well as
the provincial and city governments shall be exempt from the payment
of such fees in advance in order to be entitled to entry and registration.
Every deed or other instrument, whether voluntary or involuntary, so
filed with the Register of Deeds shall be numbered and indexed and
endorsed with a reference to the proper certificate of title. All records
and papers relative to registered land in the office of the Register of
Deeds shall be open to the public in the same manner as court
records, subject to such reasonable regulations as the Register of
Deeds, under the direction of the Commissioner of Land Registration,
may prescribe.

EILEEN EIKA M. DELA CRUZ

LTD case
SUPREME COURT
ManilA

DECISION
VELASCO, JR., J.:
The Case

THIRD DIVISION
SPS. LITA DE LEON and
FELIX RIO TARROSA,
Petitioners,

Before us is a Petition for Review on Certiorari under Rule 45 assailing

and seeking to set aside the Decision[1] and Resolution[2] dated
August 27, 2008 and October 20, 2008, respectively, of the Court of
Appeals (CA) in CA-G.R. CV No. 88571. The CA affirmed with
modification the October 4, 2006 Decision[3] in Civil Case No. Q0451595 of the Regional Trial Court (RTC), Branch 22 in Quezon City.

- versus ANITA B. DE LEON, DANILO B.

DE LEON, and VILMA B. DE LEON,
Respondents.

The Facts
On July 20, 1965, Bonifacio O. De Leon, then single, and the Peoples
Homesite and Housing Corporation (PHHC) entered into a Conditional
Contract to Sell for the purchase on installment of a 191.30 squaremeter lot situated in Fairview, Quezon City. Subsequently, on April 24,
1968, Bonifacio married Anita de Leon in a civil rite officiated by the
Municipal Mayor of Zaragosa, Nueva Ecija. To this union were born
Danilo and Vilma.
Following the full payment of the cost price for the lot thus purchased,
PHHC executed, on June 22, 1970, a Final Deed of Sale in favor of
Bonifacio. Accordingly, Transfer Certificate of Title (TCT) No. 173677
was issued on February 24, 1972 in the name of Bonifacio, single.

SY 2016-2017

G.R. No. 185063

Present:
YNARES-SANTIAGO, Chairperson,
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA, and
PERALTA, JJ.
Promulgated:
July 23, 2009
x-----------------------------------------------------------------------------------------x

EILEEN EIKA M. DELA CRUZ

LTD case

b. A Civil Complaint filed by Bonifacio against spouses Cesar

Diankinay and Filomena Almero on November 27, 1979 for nullification
of the Real Estate Mortgage.
c. The Decision issued by the Court of First Instance of Rizal, Quezon
City, promulgated on July 30, 1982, nullifying the Real Estate
Mortgage.[4]

SY 2016-2017

Subsequently, Bonifacio, for PhP 19,000, sold the subject lot to her
sister, Lita, and husband Felix Rio Tarrosa (Tarrosas), petitioners
herein. The conveying Deed of Sale dated January 12, 1974 (Deed of
Sale) did not bear the written consent and signature of Anita.
Thereafter, or on May 23, 1977, Bonifacio and Anita renewed their
vows in a church wedding at St. John the Baptist Parish in San Juan,
Manila.

The Tarrosas, in their Answer with Compulsory Counterclaim, averred

that the lot Bonifacio sold to them was his exclusive property inasmuch
as he was still single when he acquired it from PHHC. As further
alleged, they were not aware of the supposed marriage between
Bonifacio and Anita at the time of the execution of the Deed of Sale.

On February 29, 1996, Bonifacio died.

After several scheduled hearings, both parties, assisted by their

respective counsels, submitted a Joint Stipulation of Facts with Motion,
to wit:
1.
The parties have agreed to admit the following facts:

Getting wind of the cancellation of their fathers title and the issuance of
TCT No. N-173911, Danilo and Vilma filed on May 19, 2003 a Notice of
Adverse Claim before the Register of Deeds of Quezon City to protect
their rights over the subject property. Very much later, Anita, Danilo,
and Vilma filed a reconveyance suit before the RTC in Quezon City. In
their complaint, Anita and her children alleged, among other things,
that fraud attended the execution of the Deed of Sale and that
subsequent acts of Bonifacio would show that he was still the owner of
the parcel of land. In support of their case, they presented, inter alia,
the following documents:

a. Bonifacio O. De Leon, while still single x x x, purchased from the

[PHHC] through a Conditional Contract to Sell on July 20, 1965 a
parcel of land with an area of 191.30 square meters situated in
Fairview, Quezon City for P841.72;
b. On April 24, 1968, Bonifacio O. De Leon married plaintiff Anita B. De
Leon before the Municipal Mayor of Zaragosa, Nueva Ecija. Both
parties stipulate that said marriage is valid and binding under the laws
of the Philippines;

Three months later, the Tarrosas registered the Deed of Sale and had
TCT No. 173677 canceled. They secured the issuance in their names
of TCT No. N-173911 from the Quezon City Register of Deeds.

a. A Real Estate Mortgage execution by Bonifacio in favor of spouses

Cesar Diankinay and Filomena Almero on July 22, 1977.

EILEEN EIKA M. DELA CRUZ

LTD case

The Ruling of the Trial Court

On October 4, 2006, the RTC, on the finding that the lot in question
was the conjugal property of Bonifacio and Anita, rendered judgment in
favor of Anita and her children. The dispositive portion of the decision
reads:
WHEREFORE, premises considered, judgment is hereby rendered in
favor of plaintiffs and against defendants in the following manner:
(1) Declaring the Deed of Sale dated January 12, 1974 executed by
the late Bonifacio O. De Leon in favor of defendants-spouses Lita De
Leon and Felix Rio Tarrosa void ab initio;
(2) Directing the Register of Deed of Quezon City to cancel Transfer
Certificate of Title No. N-173911 in the name of Lita O. De Leon,
married to Felix Rio Tarrosa and restore Transfer Certificate of Title No.
173667 in the name of Bonifacio O. De Leon;
(3) Ordering the defendants-spouses to pay plaintiffs the following
sums:
(a) P25,000.00 as moral damages;
(b) P20,000.00 as exemplary damages;
(c) P50,000.00 as attorneys fees plus appearance fee of P2,500.00 per
court appearance;
(d) Costs of this suit.

SY 2016-2017

c. On June 22, 1970, Bonifacio O. De Leon paid [PHHC] the total

amount of P1,023.74 x x x. The right of ownership over the subject
parcel of land was transferred to the late Bonifacio O. De Leon on June
22, 1970, upon the full payment of the total [price] of P1,023.74 and
upon execution of the Final Deed of Sale;
d. After full payment, Bonifacio O. De Leon was issued [TCT] No.
173677 on February 24, 1972;
e. On January 12, 1974, Bonifacio O. De Leon executed a Deed of
Sale in favor of defendants-spouses Felix Rio Tarrosa and Lita O. De
Leon disposing the parcel of land under TCT No. 173677 for valuable
consideration amount of P19,000.00 and subscribed before Atty.
Salvador R. Aguinaldo who was commissioned to [notarize] documents
on said date. The parties stipulate that the Deed of Sale is valid and
genuine. However, plaintiff Anita De Leon was not a signatory to the
Deed of Sale executed on January 12, 1974;
f. That plaintiff Anita B. De Leon and the late Bonifacio O. De Leon
were married in church rites on May 23, 1977 x x x;
g. The late Bonifacio O. De Leon died on February 29, 1996 at the
UST Hospital, Espaa, Manila;
h. The said Deed of Sale executed on January 12, 1974 was registered
on May 8, 1996 before the Office of the Register of Deeds of Quezon
City and [TCT] No. N-173911 was issued to Lita O. De Leon and Felix
Rio Tarrosa.[5]

EILEEN EIKA M. DELA CRUZ

LTD case

in Civil Case No. Q-04-51595 is hereby AFFIRMED with

MODIFICATION, in that the award of moral and exemplary damages
as well as attorneys fees, appearance fee and costs of suit are hereby
DELETED.
SO ORDERED.

Just like the RTC, the CA held that the Tarrosas failed to overthrow the
legal presumption that the parcel of land in dispute was conjugal. The
appellate court held further that the cases they cited were inapplicable.
As to the deletion of the grant of moral and exemplary damages, the
CA, in gist, held that no evidence was adduced to justify the award.
Based on the same reason, it also deleted the award of attorneys fees
and costs of suit.
The Tarrosas moved but was denied reconsideration by the CA in its
equally assailed resolution of October 20, 2008.

SY 2016-2017

SO ORDERED.
Aggrieved, the Tarrosas appealed to the CA. As they would submit, the
RTC erred:
(1)
in finding for the plaintiffs-appellees by declaring that the
land subject matter of the case is conjugal property;
(2)
in not declaring the land as the exclusive property of
Bonifacio O. De Leon when sold to defendant-appellants;
(3)
in ruling that defendant-appellants did not adduce any
proof that the property was acquired solely by the efforts of Bonifacio
O. De Leon;
(4)
in declaring that one-half of the conjugal assets does not
vest to Bonifacio O. De Leon because of the absence of liquidation;
(5)
in cancelling TCT No. N-173911 and restored TCT No.
[173677] in the name of Bonifacio O. De Leon;
(6)
in awarding moral and exemplary damages and attorneys
fees to the plaintiffs-appellees.[6]

Hence, they filed this petition.

The Ruling of the Appellate Court

The Issues

On August 27, 2008, the CA rendered a decision affirmatory of that of

the RTC, save for the award of damages, attorneys fees, and costs of
suit which the appellate court ordered deleted. The fallo of the CA
decision reads:

I
Whether the [CA] gravely erred in concluding that the land purchased
on installment by Bonifacio O. De Leon before marriage although some

WHEREFORE, in view of the foregoing, the assailed decision dated

October 4, 2006, of the Regional Trial Court, Branch 22, Quezon City

EILEEN EIKA M. DELA CRUZ

LTD case

SY 2016-2017

installments were paid during the marriage is conjugal and not his
exclusive property.
The Subject Property is the
Conjugal Property of Bonifacio and Anita
The first three issues thus raised can be summed up to the question of
whether or not the subject property is conjugal.
Petitioners assert that, since Bonifacio purchased the lot from PHHC
on installment before he married Anita, the land was Bonifacios
exclusive property and not conjugal, even though some installments
were paid and the title was issued to Bonifacio during the marriage. In
support of their position, petitioners cite Lorenzo v. Nicolas[7] and
Alvarez v. Espiritu.[8]

II
Whether the [CA] gravely erred in ruling that the Lorenzo, et al. vs.
Nicolas, et al., and Alvarez vs. Espiritu cases do not apply in the case
at bar because in the latter the land involved is not a friar land unlike in
the former.
III
Whether the [CA] gravely erred in affirming the decision of the trial
court a quo which ruled that petitioners did not adduce any proof that
the land was acquired solely by the efforts of Bonifacio O. De Leon.

We disagree.

IV

Article 160 of the 1950 Civil Code, the governing provision in effect at
the time Bonifacio and Anita contracted marriage, provides that all
property of the marriage is presumed to belong to the conjugal
partnership unless it is proved that it pertains exclusively to the
husband or the wife. For the presumption to arise, it is not, as Tan v.
Court of Appeals[9] teaches, even necessary to prove that the property
was acquired with funds of the partnership. Only proof of acquisition
during the marriage is needed to raise the presumption that the
property is conjugal. In fact, even when the manner in which the
properties were acquired does not appear, the presumption will still
apply, and the properties will still be considered conjugal.[10]

Whether the court of appeals gravely erred in affirming the decision of

the trial court which ruled that one-half (1/2) of the conjugal assets do
not vest to Bonifacio O. De Leon because of the absence of liquidation.

Our Ruling
The petition lacks merit.

EILEEN EIKA M. DELA CRUZ

LTD case

APPLICANT a final deed of sale of the aforesaid land, and the

APPLICANT agrees to accept said deed, as full performance by the
CORPORATION of its covenants and undertakings hereunder.[13] x x
x

Evidently, title to the property in question only passed to Bonifacio after

he had fully paid the purchase price on June 22, 1970. This full
payment, to stress, was made more than two (2) years after his
marriage to Anita on April 24, 1968. In net effect, the property was
acquired during the existence of the marriage; as such, ownership to
the property is, by law, presumed to belong to the conjugal partnership.
Such presumption is rebuttable only with strong, clear, categorical, and
convincing evidence.[14] There must be clear evidence of the exclusive
ownership of one of the spouses,[15] and the burden of proof rests
upon the party asserting it.[16]
Petitioners argument that the disputed lot was Bonifacios exclusive
property, since it was registered solely in his name, is untenable. The
mere registration of a property in the name of one spouse does not
destroy its conjugal nature.[17] What is material is the time when the
property was acquired.
Thus, the question of whether petitioners were able to adduce proof to
overthrow the presumption is a factual issue best addressed by the trial
court. As a matter of long and sound practice, factual determinations of
the trial courts,[18] especially when confirmed by the appellate court,
are accorded great weight by the Court and, as rule, will not be

SY 2016-2017

In the case at bar, ownership over what was once a PHHC lot and
covered by the PHHC-Bonifacio Conditional Contract to Sell was only
transferred during the marriage of Bonifacio and Anita. It is well settled
that a conditional sale is akin, if not equivalent, to a contract to sell. In
both types of contract, the efficacy or obligatory force of the vendors
obligation to transfer title is subordinated to the happening of a future
and uncertain event, usually the full payment of the purchase price, so
that if the suspensive condition does not take place, the parties would
stand as if the conditional obligation had never existed.[11] In other
words, in a contract to sell ownership is retained by the seller and is
not passed to the buyer until full payment of the price, unlike in a
contract of sale where title passes upon delivery of the thing sold.[12]
Such is the situation obtaining in the instant case. The conditional
contract to sell executed by and between Bonifacio and PHHC on July
20, 1965 provided that ownership over and title to the property will vest
on Bonifacio only upon execution of the final deed of sale which, in
turn, will be effected upon payment of the full purchase price, to wit:
14. Titles to the property subject of this contract remains with the
CORPORATION and shall pass to, and be transferred in the name of
the APPLICANT only upon the execution of the final Deed of Sale
provided for in the next succeeding paragraph.
15. Upon the full payment by the APPLICANT of the price of the lot
above referred to together with all the interest due thereon, taxes and
other charges, and upon his faithful compliance with all the conditions
of this contract the CORPORATION agrees to execute in favor of the

EILEEN EIKA M. DELA CRUZ

LTD case

paid and a certificate of sale is issued.[22] Plainly, the said cases are
not applicable here considering that the disputed property is not friar
land.
There can be no quibbling that Anitas conformity to the sale of the
disputed lot to petitioners was never obtained or at least not formally
expressed in the conveying deed. The parties admitted as much in
their Joint Stipulation of Facts with Motion earlier reproduced. Not lost
on the Court of course is the fact that petitioners went to the process of
registering the deed after Bonifacios death in 1996, some 22 years
after its execution. In the interim, petitioners could have had workbut
did nottowards securing Anitas marital consent to the sale.
It cannot be over-emphasized that the 1950 Civil Code is very explicit
on the consequence of the husband alienating or encumbering any
real property of the conjugal partnership without the wifes consent.[23]
To a specific point, the sale of a conjugal piece of land by the husband,
as administrator, must, as a rule, be with the wifes consent. Else, the
sale is not valid. So it is that in several cases we ruled that the sale by
the husband of property belonging to the conjugal partnership without
the consent of the wife is void ab initio, absent any showing that the
latter is incapacitated, under civil interdiction, or like causes. The
nullity, as we have explained, proceeds from the fact that sale is in
contravention of the mandatory requirements of Art. 166 of the Code.
[24] Since Art. 166 of the Code requires the consent of the wife before
the husband may alienate or encumber any real property of the
conjugal partnership, it follows that the acts or transactions executed
against this mandatory provision are void except when the law itself
authorized their validity.[25]

SY 2016-2017

disturbed on appeal, except for the most compelling reasons.[19]

Petitioners have not, as they really cannot, rebut the presumptive
conjugal nature of the lot in question. In this regard, the Court notes
and quotes with approval the following excerpts from the trial courts
disposition:
The defendants, however, did not adduce any proof that the property in
question was acquired solely by the efforts of [Bonifacio]. The
established jurisprudence on the matter leads this Court to the
conclusion that the property involved in this dispute is indeed the
conjugal property of the deceased [Bonifacio] De Leon.
In fact, defendant even admitted that [Bonifacio] brought into his
marriage with plaintiff Anita the said land, albeit in the concept of a
possessor only as it was not yet registered in his name. The property
was registered only in 1972 during the existence of the marriage.
However, the absence of evidence on the source of funding has called
for the application of the presumption under Article 160 in favor of the
plaintiffs.[20]

The cases petitioners cited are without governing applicability to this

case simply because they involved a law specifically enacted to govern
the disposition of and ownership of friar lands. In Lorenzo, the Court
held that the pervading legislative intent of Act No. 1120 is to sell the
friar lands acquired by the Government to actual settlers and
occupants of the same.[21] The Court went on further to say in Alvarez
that under the Friar Lands Act of 1120, the equitable and beneficial title
to the land passes to the purchaser the moment the first installment is

EILEEN EIKA M. DELA CRUZ

LTD case

Nevertheless, this Court is mindful of the fact that the Tarrosas paid a
valuable consideration in the amount of PhP 19,000 for the property in
question. Thus, as a matter of fairness and equity, the share of
Bonifacio after the liquidation of the partnership should be liable to
reimburse the amount paid by the Tarrosas. It is a well-settled principle
that no person should unjustly enrich himself at the expense of
another.[29]
WHEREFORE, the petition is DENIED. The CA Decision in CA-G.R.
CV No. 88571 is AFFIRMED. Costs against petitioners.
SO ORDERED.

PRESBITERO J. VELASCO, JR.

Associate Justice
WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

MINITA V. CHICO-NAZARIO ANTONIO EDUARDO B. NACHURA

SY 2016-2017

Accordingly, the Deed of Sale executed on January 12, 1974 between

Bonifacio and the Tarrosas covering the PHHC lot is void.
Interest in the Conjugal Partnership Is
Merely Inchoate until Liquidation
As a final consideration, the Court agrees with the CA that the sale of
one-half of the conjugal property without liquidation of the partnership
is void. Prior to the liquidation of the conjugal partnership, the interest
of each spouse in the conjugal assets is inchoate, a mere expectancy,
which constitutes neither a legal nor an equitable estate, and does not
ripen into a title until it appears that there are assets in the community
as a result of the liquidation and settlement.[26] The interest of each
spouse is limited to the net remainder or remanente liquido (haber
ganancial) resulting from the liquidation of the affairs of the partnership
after its dissolution.[27] Thus, the right of the husband or wife to onehalf of the conjugal assets does not vest until the dissolution and
liquidation of the conjugal partnership, or after dissolution of the
marriage, when it is finally determined that, after settlement of conjugal
obligations, there are net assets left which can be divided between the
spouses or their respective heirs.[28]
Therefore, even on the supposition that Bonifacio only sold his portion
of the conjugal partnership, the sale is still theoretically void, for, as
previously stated, the right of the husband or the wife to one-half of the
conjugal assets does not vest until the liquidation of the conjugal
partnership.

EILEEN EIKA M. DELA CRUZ

Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
[1] Rollo, pp. 191-209. Penned by Associate Justice Remedios A.
Salazar-Fernando and concurred in by Associate Justices Rosalinda
Asuncion-Vicente and Ramon M. Bato, Jr.
[2] Id. at 216-217.
[3] Id. at 99-103.
[4] Id. at 28-29.
[5] Id. at 63-65.
[6] Id. at 115-116.
[7] 91 Phil. 686 (1952).
[8] No. L-18833, August 14, 1965, 14 SCRA 892.
[9] G.R. No. 120594, June 10, 1997, 273 SCRA 229, 236.
[10] Ching v. Court of Appeals, G.R. No. 124642, February 23, 2004,
423 SCRA 356, 370; Tan, supra note 9; Viloria v. Aquino, 28 Phil. 258
(1914).
[11] Serrano v. Caguiat, G.R. No. 139173, February 28, 2007, 517
SCRA 57, 64; Philippine National Bank v. Court of Appeals, G.R. No.
119580, September 26, 1996, 262 SCRA 464, citing Rose Packing
Co., Inc. v. Court of Appeals, No. L-33084, November 14, 1988, 167
SCRA 309, 318 and Lim v. Court of Appeals, G.R. No. 85733,
February 23, 1990, 182 SCRA 564, 670.
[12] Serrano, supra at 65.
[13] Rollo, p. 45.

LTD case

SY 2016-2017

Associate Justice Associate Justice

DIOSDADO M. PERALTA
Associate Justice

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

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, I certify that the conclusions in the above

EILEEN EIKA M. DELA CRUZ

LTD case

[22] Supra note 8, at 897; citing Director of Lands v. Rizal, 87 Phil. 806
(1950).
[23] Art. 166.
[24] Nicolas v. Court of Appeals, No. L-37631, October 12, 1987, 154
SCRA 635, 643; Garcia v. Court of Appeals, 215 Phil. 380 (1984);
Tolentino v. Cardenas, 123 Phil. 517 (1966).
[25] CIVIL CODE, Art. 5.
[26] Abalos v. Macatangay, Jr., G.R. No. 155043, September 30, 2004,
439 SCRA 649, 663; Wong, supra note 14, at 803.
[27] Manuel v. Losano, 41 Phil. 855 (1918); Nable Jose v. Nable Jose,
41 Phil. 713 (1916).
[28] Abalos, supra note 26; citing Quintos de Ansaldo v. Sheriff of
Manila, 64 Phil. 115 (1937).
[29] CIVIL CODE, Art. 22; Hulst v. PR Builders, Inc., G.R. No. 156364,
September 3, 2007, 532 SCRA 74, 96; Advanced Foundation
Construction Systems Corporation v. New World Properties and
Ventures, Inc., G.R. No. 143154, June 21, 2006, 491 SCRA 557, 578;
Reyes v. Lim, et al., G.R. No. 134241, August 11, 2003.

SY 2016-2017

[14] Go v. Yamane, G.R. No. 160762, May 3, 2006, 489 SCRA 107,
117; citing Wong v. Intermediate Appellate Court, G.R. No. 70082,
August 19, 1991, 200 SCRA 792.
[15] Ching, supra note 10; Francisco v. Court of Appeals, November
25, 1988, 229 SCRA 188.
[16] Tan, supra note 9.
[17] Go, supra note 14, at 119; Acabal v. Acabal, G.R. No. 148376,
March 31, 2005, 454 SCRA 555, 580, citing Mendoza v. Reyes, No. L31618, August 17, 1983, 124 SCRA 154 and Bucoy v. Paulino, No. L25775, April 26, 1968, 23 SCRA 248.
[18] Villanueva v. Court of Appeals, G.R. No. 143286, April 14, 2004,
427 SCRA 439, 451; citing People v. Cordero, G.R. Nos. 136894-96,
February 7, 2001, 351 SCRA 383.
[19] Republic v. Court of Appeals, G.R. No. 116372, January 18, 2001,
349 SCRA 451, 460.
[20] Rollo, p. 101.
[21] Supra note 7.