G.R. No. 171531.

January 30, 2009

GUARANTEED HOMES, INC., Petitioner, vs. , HEIRS OF MARIA P. VALDEZ, (EMILIA V. YUMUL and
VICTORIA V. MOLINO), HEIRS OF SEVERINA P. TUGADE (ILUMINADA and LEONORA P. TUGADE, HEIRS OF
ETANG P. GATMIN (LUDIVINA G. DELA CRUZ (by and through ALFONSO G. DELA CRUZ), HILARIA G.
COBERO and ALFREDO G. COBERO) and SIONY G. TEPOL (by and through ELENA T. RIVAS and ELESIO
TEPOL, JR.), AS HEIRS OF DECEDENT PABLO PASCUA, Respondents.

Facts

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, whom the respondents alleged that he died
intestate and was survived by his four children, one of whom was the deceased Cipriano. In the
alternative, the respondents prayed that damages be awarded in their favour.

The respondents attached OCT No. 404 as one of the annexes in the complaint and 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.

Cipriano 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, In
which followed by the respondents aversion the following day

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 for the issuance of a new owners duplicate of
OCT No. 404, but denied by the RTC. 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.

Petitioner filed a motion to dismiss 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.

The RTC granted petitioners motion to dismiss. Undaunted, respondents appealed to the Court
of Appeals. The Court of Appeals reversed the RTCs order. 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. 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.

Issue

Whether or not there is propriety of the RTCs granting of the motion to dismiss and conversely
the tenability of the Court of Appeals reversal of the RTCs ruling.

Held

Yes. 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.

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.
G.R. No. 185063. July 23, 2009

SPS. LITA DE LEON and FELIX RIO TARROSA, Petitioners, vs., ANITA B. DE LEON, DANILO B. DE LEON, and
VILMA B. DE LEON, Respondents.

Facts

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 square-meter 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 purchased, PHHC executed a Final Deed
of Sale in favour of Bonifacio and a Transfer Certificate Title No. 173677 was issued to Bonifacio, single.

Subsequently, Bonifacio sold the subject lot to her sister, Lita, and husband Felix Rio Tarrosa
(Tarrosas), petitioners herein. The conveying Deed of Sale did not bear the written consent and
signature of Anita.

Thereafter, Bonifacio and Anita renewed their vows in a church wedding at St. John the Baptist
Parish in San Juan, Manila.

Three months after Bonifacio died, 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.

Danilo and Vilma, after knowing the said registration of the Tarrosas, filed 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.

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 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.Aggrieved, the Tarrosas
appealed to the CA that the RTC erred.

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
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.

Issue
 Whether or not the CA erred in concluding that the land purchased on installment by
Bonifacio O. De Leon before marriage although some installments were paid during the
marriage are conjugal and not his exclusive property.

Held
No. 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. 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.

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. 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.

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.
G.R. No. 81163. September 26, 1988
EDUARDO S. BARANDA and ALFONSO HITALIA, petitioners, vs. HONORABLE JUDGE TITO GUSTILO,
ACTING REGISTER OF DEEDS AVITO SACLAUSO, HONORABLE COURT OF APPEALS, and ATTY. HECTOR P.
TEODOSIO, respondents.

Facts

Eduardo S. Baranda and Alfonso Hitalia were the petitioners in G.R. No. 64432 and the private
respondents in G.R. No. 62042. The subject matter of these two (2) cases and the instant case is the
same — a parcel of land designated as Lot No. 4517 of the Cadastral Survey of Sta. Barbara, Iloilo
covered by Original Certificate of Title No. 6406.

A petition for reconstitution of title filed with the Court of First Instance of Iloilo involving a
parcel of land known as Lot No. 4517 of the Sta. Barbara Cadastre covered by Original Certificate of Title
No. 6406 in the name of Romana Hitalia. Eventually, Original Certificate of Title No. 6406 was cancelled
and TCT No. 106098 was issued in the names of Alfonso Hitalia and Eduardo S. Baranda. The Court
issued a writ of possession which Gregorio Perez, Maria P. Gotera and Susana Silao refused to honor on
the ground that they also have TCT No. 25772 over the same Lot No. 4517. The Courtfound out that TCT
No. 25772 fraudulently acquired by Perez, Gotera and Silao, ordered that the writ of possession be
carried out.

A motion for reconsideration having been denied, a writ of demolition was issued. Then, Perez
and Gotera filed a petition for certiorari and prohibition with the Court of Appeals but were denied.

Perez and Gotera filed the petition for review on certiorari (G.R. No. 62042) before the Supreme
Court while the CA dismissed the civil case (GR. NO. 00827) involving the same properties.

The petitioners prayed that an order be released to cancel No.T-25772. Likewise to cancel No.T-
106098 and once cancelled to issue new certificates of title to each of Eduardo Baranda and Alfonso
Hitalia to cancel No.T-25772. Likewise to cancel No.T-106098 and once cancelled to issue new
certificates of title to each of Eduardo S. Baranda and Alfonso Hitalia.
In compliance with the order or the RTC, the Acting Register of Deeds Avito Saclauso annotated the
order declaring TCT T-25772 null and void, cancelled the same and issued new certificate of titles in the
name of petitioners.

However, by reason of a separate case pending in the Court of Appeals, a notice of lis pendens
was annotated in the new certificate of title. This prompted the petitioners to move for the cancellation
of the notice of lis pendens in the new certificates.
Judge Tito Gustilo then ordered the Acting Register of Deeds for the cancellation of the notice of lis
pendens but the Acting Register of Deeds filed a motion for reconsideration invoking Sec 77 of PD 1529.

Issue

Whether or not the Register of Deeds has the authority to annotate or annul a notice of lis
pendens in a torrens certificate of title is valid.

Held
Yes. Section 10, Presidential Decree No. 1529 states that "It shall be the duty of the
Register of Deeds to immediately register an instrument presented for registration dealing with
real or personal property which complies with all the requisites for registration. ...”
 If the instrument is not registrable, he shall forthwith deny registration thereof and
inform the presentor of such denial in writing, stating the ground or reasons therefore, and
advising him of his right to appeal by consulta in accordance with Section 117 of this Decree."

Section 117 provides that "When the Register of Deeds is in doubt with regard to the
proper step to be taken or memoranda to be made in pursuance of any deed, mortgage or other
instrument presented to him for registration or where any party in interest does not agree with
the action taken by the Register of Deeds with reference to any such instrument, the question
shall be submitted to the Commission of Land Registration by the Register of Deeds, or by the
party in interest thru the Register of Deeds. ... ."

The elementary rule in statutory construction is that when the words and phrases of the statute
are clear and unequivocal, their meaning must be determined from the language employed and the
statute must be taken to mean exactly what it says.
G.R. No. 128573. January 13, 2003
NAAWAN COMMUNITY RURAL BANK INC., petitioner, vs. THE COURT OF APPEALS and SPOUSES
ALFREDO AND ANNABELLE LUMO, respondents.

Facts
Naawan Community Rural Bank Inc. filed petition for Review on Certiorari challenging the
February 7, 1997 Decision of the Court of Appeals where the plaintiffs-spouses are adjudged the
absolute owners and possessors of the properties in question (Lot 18583, under TCT No. T-50134, and all
improvements thereon) and quieting title thereto as against any and all adverse claims of the defendant.
On April 30, 1988, a certain Guillermo Comayas offered to sell to private respondent-spouses
Alfredo and Annabelle Lumo, a house and lot measuring 340 square meters located at Pinikitan,
Camaman-an, Cagayan de Oro City.

Private respondents later on found out that the property was mortgaged to a certain Mrs.
Galupo and that the owners copy of the Certificate of Title to said property was in her possession.

On May 30, 1988, a release of the adverse claim of Galupo was annotated on TCT No. T-41499
which covered the subject property.

In the meantime, even before the release of Galupos adverse claim, private respondents and
Guillermo Comayas, executed a deed of absolute sale.The subject property was allegedly sold
for P125,000 but the deed of sale reflected the amount of only P30,000 which was the amount private
respondents were ready to pay at the time of the execution of said deed, the balance payable by
installment.

On June 9, 1988, the deed of absolute sale was registered and inscribed on TCT No. T-41499
and, on even date, TCT No. T-50134 was issued in favor of private respondents.

After obtaining their TCT, private respondents that the property was also declared for tax
purposes in the name of petitioner Naawan Community Rural Bank Inc for the lot covered by TCT No. T-
50134, Alfredo Lumos T/D # 83324 bore the note: This lot is also declared in the name of Naawan
Community Rural Bank Inc. under T/D # 71210.

Apparently, on February 7, 1983, Guillermo Comayas obtained a P15,000 loan from petitioner
Bank using the subject property as security. At the time said contract of mortgage was entered into, the
subject property was then an unregistered parcel of residential land, tax-declared in the name of a
certain Sergio A. Balibay while the residential one-storey house was tax-declared in the name of
Comayas.

Balibay executed a special power of attorney authorizing Comayas to borrow money and use the
subject lot as security. But the Deed of Real Estate Mortgage and the Special Power of Attorney were
recorded in the registration book of the Province of Misamis Oriental, not in the registration book of
Cagayan de Oro City. It appears that, when the registration was made, there was only one Register of
Deeds for the entire province of Misamis Oriental, including Cagayan de Oro City.

For failure of Comayas to pay, the real estate mortgage was foreclosed and the subject property
sold at a public auction to the mortgagee Naawan Community Rural Bank as the highest. Thereafter, the
sheriffs certificate of sale was issued and registered under Act 3344 in the Register of Deeds of the
Province of Misamis Oriental.
 On April 17, 1984, the subject property was registered in original proceedings under the Land
Registration Act. Title was entered in the registration book of the Register of Deeds of Cagayan de Oro
City as Original Certificate of Title No. 0-820, pursuant to Decree No. N-189413.

On July 23, 1984, Transfer Certificate of Title No. T-41499 in the name of Guillermo P. Comayas
was entered in the Register of Deeds of Cagayan de Oro City.

Meanwhile, on September 5, 1986, the period for redemption of the foreclosed subject
property lapsed and the MTCC Deputy Sheriff of Cagayan de Oro City issued and delivered to petitioner
bank the sheriffs deed of final conveyance. This time, the deed was registered under Act 3344 and
recorded in the registration book of the Register of Deeds of Cagayan de Oro City.

Thereafter, petitioner Bank instituted an action for ejectment against Comayas before the MTCC
which decided in its favor. On appeal, the Regional Trial Court affirmed the decision of the MTCC in a
decision dated April 13, 1988.

On January 27, 1989, the Regional Trial Court issued an order for the issuance of a writ of
execution of its judgment. The MTCC, being the court of origin, promptly issued said writ.

However, when the writ was served, the property was no longer occupied by Comayas but
herein private respondents, the spouses Lumo .

Private respondents filed an action for quieting of. After trial, the Regional Trial Court rendered
a decision declaring private respondents as purchasers for value and in good faith, and consequently
declaring them as the absolute owners and possessors of the subject house and lot.

Petitioner appealed to the Court of Appeals which in turn affirmed the trial courts decision.

Issues

1. Whether or not the sheriffs deed of final conveyance was duly executed and registered in the
register of deeds of Cagayan de Oro City on December 2, 1986.

2. Whether or not the private respondents exercised the required diligence in ascertaining the
legal condition of the title to the subject property so as to be considered as innocent purchasers for
value and in good faith.

Held

Yes. Article 1544 provides:

x x x. Should it be immovable property, the ownership shall belong to the person acquiring it who in
good faith first recorded it in the Registry of Property.

Petitioner bank contends that the earlier registration of the sheriffs deed of final conveyance in the
day book under Act 3344 should prevail over the later registration of private respondents deed of
absolute sale under Act 496, as amended by the Property Registration Decree, PD 1529.

It has been held that, where a person claims to have superior proprietary rights over another on
the ground that he derived his title from a sheriffs sale registered in the Registry of Property, Article
1473 (now Article 1544) of the Civil Code will apply only if said execution sale of real estate is registered
under Act 496.
 Unfortunately, the subject property was still untitled when it was acquired by petitioner bank by
virtue of a final deed of conveyance. On the other hand, when private respondents purchased the same
property, it was already covered by the Torrens System.

Petitioner also relies on the case of Bautista vs. Fule where the Court ruled that the registration of
an instrument involving unregistered land in the Registry of Deeds creates constructive notice and binds
third person who may subsequently deal with the same property.

2. Yes. Before private respondents bought the subject property from Guillermo Comayas, inquiries
were made with the Registry of Deeds and the Bureau of Lands regarding the status of the vendors
title. No liens or encumbrances were found to have been annotated on the certificate of title. Neither
were private respondents aware of any adverse claim or lien on the property other than the adverse
claim of a certain Geneva Galupo to whom Guillermo Comayas had mortgaged the subject
property. But, as already mentioned, the claim of Galupo was eventually settled and the adverse claim
previously annotated on the title cancelled. Thus, having made the necessary inquiries, private
respondents did not have to go beyond the certificate of title. Otherwise, the efficacy and
conclusiveness of the Torrens Certificate of Title would be rendered futile and nugatory.

Considering therefore that private respondents exercised the diligence required by law in
ascertaining the legal status of the Torrens title of Guillermo Comayas over the subject property and
found no flaws therein, they should be considered as innocent purchasers for value and in good faith.

Accordingly, the appealed judgment of the appellate court upholding private respondents Alfredo
and Annabelle Lumo as the true and rightful owners of the disputed property is affirmed.