1
G.R. No. 160748 July 14, 2004SPOUSES ANTONIO and
LUCY VERA CRUZ, petitioners, vs. LUCY CALDERON,
respondent.
YNARES-SANTIAGO, J.:
Before us is a petition for review on certiorari under Rule 45
of the Rules of Court assailing the Court of Appeals' Decision1
dated August 20, 2003 in CA-G.R. CV No. 57900 which
affirmed with modifications the Decision of the Regional Trial
Court of Laguna, Branch 31. Likewise, challenged is the
Resolution dated November 10, 2003 of the Court of Appeals
denying petitioners' motion for reconsideration.2
The antecedent facts are as follows:
Lucy Calderon and Avelino Belisario, Jr. were married on
January 31, 1967.3 On October 23, 1970,4 they bought a
parcel of land with an area of 248 square meters, located on
Mabini Street, Poblacion, Biñan, Laguna, from Avelino's aunt,
Margarita Arguelles. Accordingly, Transfer Certificate of Title
No. 10744 was issued in the name of "Avelino Belizario, Jr.,
married to Lucy Calderon." The spouses separated in 1981
and Lucy resided with her children in Garcia Subdivision, San
Antonio, Biñan, Laguna.
On June 3, 1986, Avelino sold the subject property to
petitioner spouses Antonio and Lucy Vera Cruz.5 The Vera
Cruz spouses registered the sale on July 30, 1986 and TCT No.
T-143101 was issued in their name.6 When Avelino died on
November 20, 1993, his wife, respondent Lucy Calderon,
discovered that their conjugal property had been sold by her
husband without her knowledge and consent and that her
signature on the Deed of Sale had been forged. Hence, she
filed a complaint against the Vera Cruz spouses for
annulment of Deed of Absolute Sale and TCT No. T-143101
with the Regional Trial Court of San Pedro, Laguna, Branch
31, which case was docketed as Civil Case No. B-4488.
In their answer, petitioner spouses assert that they
purchased the property in good faith and for value. In 1984,
Avelino offered to lease the land to Antonio's brother,
Joselito Vera Cruz.7 The latter, as manager of the store and
vice-president of VeraCruz, Inc., entered into a verbal lease
agreement with Avelino for a period of two (2) years. In May
1986, at about the time the lease expired, Avelino and
Joselito visited petitioners in Marikina. Avelino offered to sell
the land to them.9 He showed them the owner's duplicate
title of the property as well as the Deed of Sale executed by
Margarita Arguelles, which were both in his name. Thus,
petitioners were convinced that the lot was Avelino's
exclusive property.10 This notwithstanding, they asked
Avelino to bring his wife during the execution of the deed of
sale.11
On June 3, 1986, Joselito and petitioner spouses, along with
Avelino and a woman, whom he introduced as his wife, Lucy
Calderon, met and executed the deed of sale before Notary
Public Atty. Democlito J. Angeles.12 Thereafter, petitioners
filed the Deed of Sale with the Registry of Deeds of Laguna.
After trial, the trial court rendered a Decision in favor of
respondent Lucy Calderon,13 the dispositive portion of which
states:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against defendants:
1. declaring null and void the Deed of Absolute Sale dated
June 3, 1986 (Exhibits D and 4) as null and void (sic) insofar as
the share of plaintiff on the lot in litigation is concerned;
2. ordering the Register of Deeds of Laguna, Calamba Branch
to cancel TCT No. T-14101 (Exhibits B and 5) in the name of
defendants Antonio Vera Cruz and Lucy Vera Cruz and issue a
new one in lieu thereof in the names of the said defendant
spouses over the ½ undivided share and in the name of
plaintiff over the other half of the subject lot; and
3. ordering the defendant spouses to pay plaintiff P20,000
for and as attorney's fees.
Costs against the defendants.
SO ORDERED.
In so ruling, the trial court declared that the subject parcel of
land was presumed conjugal under Article 160 of the Civil
Code,14 and that petitioners were negligent in failing to
inquire into the ownership of the property purchased.
Petitioners appealed to the Court of Appeals, which affirmed
the decision of the trial court with modification, and ruled:
WHEREFORE, premises considered, the assailed decision is
hereby AFFIRMED with modification. We find the appellants
purchasers in good faith and We delete the award of
attorney's fees and costs:
1. Declaring null and void the Deed of Absolute Sale dated
June 3, 1986 (Exhibits D and 4) as null and void insofar as the
share of plaintiff on the lot in litigation is concerned; and,
2. Ordering the Register of Deeds of Laguna, Calamba Branch
to cancel TCT No. 14101 (Exhibits B and 5) in the name of
defendants Antonio Vera Cruz and Lucy Vera Cruz and issue a
new one in lieu thereof in the names of the said defendant
spouses over the ½ undivided share and in the name of the
plaintiff over the other half of the subject lot.
No costs.
SO ORDERED.
Hence this petition anchored on the sole ground that:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS
OF JURISDICTION IN HOLDING THAT ALTHOUGH PETITIONERS
ARE BUYERS IN GOOD FAITH AND FOR VALUE OF THE LAND
IN QUESTION, THEY ARE ONLY ENTITLED TO OWN ONE HALF
PORTION THEREOF AND THAT RESPONDENT LUCY CALDERON
IS ENTITLED TO THE OTHER HALF PORTION.
As a general rule, only questions of law may be raised in a
petition for review on certiorari to the Supreme Court.
Although it has long been settled that findings of fact are
conclusive upon this Court, there are exceptional
circumstances which would require us to review findings of
fact of the Court of Appeals,15 to wit:
It is well settled that the findings of facts of the Court of
Appeals are conclusive on the parties and on this Court,
unless (1) the conclusion is a finding grounded entirely on
speculation, surmise and conjectures; (2) the inference made
is manifestly mistaken; (3) there is grave abuse of discretion;

(4) the judgment is based on misapprehension of facts; (5)
the findings of fact are conflicting; (6) the Court of Appeals
went beyond the issues of the case and its findings are
contrary to the admissions of both appellant and appellees;
(7) the findings of fact of the Court of Appeals are contrary to
those of the trial court; (8) said findings of fact are
conclusions without citation of specific evidence on which
they are based; (9) the facts set forth in the decision as well
as in the petitioner's main and reply briefs are not disputed
by the respondents; (10) the finding of fact of the Court of
Appeals is premised on the supposed absence of evidence
and is contradicted by evidence on record. (Emphasis
supplied)
The case at bar falls under one of the exceptions, it
appearing that there was a disparity between the findings of
the trial court and those of the Court of Appeals on the issue
of whether petitioners were purchasers in good faith.
ISSUE: Whether petitioners are purchasers in good faith? –
YES!!!
Reviewing the contradicting factual findings of the courts
below, we agree with the following findings of the Court of
Appeals that petitioners are purchasers in good faith:
Under the circumstances of the case, they are entitled to
claim the status of innocent purchasers for value. They
exercised the necessary diligence in ascertaining the
credentials of the seller, the registered owner himself,
Avelino Belisario, Jr.
We cannot charge said appellants with negligence since, at
the time of the sale to them, the land was registered in the
name of the vendor and the tax declaration was also issued
in the latter's name. It was also clearly indicated at the back
of the transfer certificate of title that Avelino acquired
ownership over the said land by virtue of the Deed of Sale.
Even appellee confirmed that they bought the property.
There is no annotation, defect or flaw in the title that would
have aroused any suspicion as to its authenticity. Such being
the case, appellants had the right to rely on what appeared
on the face of the certificate of title.
Based on the records, it was the registered owner who sold
the land to them. Avelino validly possessed the title since he
was the administrator thereof. Avelino presented his title as
well as the deed of sale in his favor to show how he acquired
said property. It was Avelino himself who brought and
introduced another woman as "Lucy Calderon". Joselito
testified that Avelino and this woman were living together as
husband and wife. Even plaintiff-appellee Lucy Calderon
admitted that she knew her husband was living with another
woman.16
Indeed, petitioners were dealing with the registered owner
of the property and they had no reason to suspect that the
woman whom he introduced to them as his wife, Lucy
Calderon, was an impostor.
We have long settled the rule that an innocent purchaser for
value is one who buys the property of another, without
notice that some other person has a right or interest in such
property and pays the full price for the same, at the time of
such purchase or before he has notice of the claims or
interest of some other person in the property.17 A 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 behind the certificate to
determine the condition of the property.18
Anent the issue that the respondents are entitled to only one
half (½) of the portion of the conjugal property
corresponding to the share of Avelino, the pertinent
provisions involved are Articles 165, 166 and 173 of the Civil
Code, the law at the time the sale was contracted in 1986.
Art. 165. The husband is the administrator of the conjugal
partnership.
Art. 166. Unless the wife has been declared a non compos
mentis or a spendthrift, or is under civil interdiction or is
confined in a leprosarium, the husband cannot alienate or
encumber any real property of the conjugal partnership
without the wife's consent. If she refuses unreasonably to
give her consent, the court may compel her to grant the
same. x x x.
2
Art. 173. The wife may, during the marriage, and within ten
years from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into
without her consent, when such consent is required, or any
act or contract of the husband which tends to defraud her or
impair her interest in the conjugal partnership property.
Should the wife fail to exercise this right, she or her heirs,
after the dissolution of the marriage, may demand the value
of property fraudulently alienated by the husband.
In the recent case of Heirs of Ignacia Aguilar-Reyes v. Spouses
Mijares,19 we reiterated the rule that the husband cannot
alienate or encumber any conjugal real property without the
consent, express or implied, of the wife, otherwise, the
contract is voidable. To wit:
Indeed, in several cases the Court has ruled that such
alienation or encumbrance by the husband is void. The better
view, however, is to consider the transaction as merely
voidable and not void. This is consistent with Article 173 of
the Civil Code pursuant to which the wife could, during the
marriage and within 10 years from the questioned
transaction, seek its annulment.
Likewise, in the case of heirs of Christina Ayuste v. Court of
Appeals,20 we declared that:
There is no ambiguity in the wording of the law. A sale of real
property of the conjugal partnership made by the husband
without the consent of his wife is voidable. The action for
annulment must be brought during the marriage and within
ten years from the questioned transaction by the wife.
Where the law speaks in clear and categorical language,
there is no room for interpretation – there is room only for
application.
In the present case, the deed of sale was executed on
February 27, 1987. Rafael Ayuste died on October 13, 1989.
However, it was only on March 2, 1990 that Christina Ayuste
filed her complaint with the lower court asking for the
annulment of the sale. Although the action was filed within
ten years from the questioned transaction, it was not
brought during the existence of the marriage which was
dissolved upon the death of Rafael Ayuste in 1989. Clearly,

the action for annulment filed by Christina Ayuste was barred
for having been filed out of time.
The fact that Christina Ayuste only learned of the sale after
the death of her husband is not material. We affirm public
respondent's ruling that registration of the sale with the
Register of Deeds constitutes a notice to the whole world.
Precisely, the purpose of the legislature in providing a system
of registration is to afford a means of publicity so that
persons dealing with real property may search the records
and thereby acquire security against instruments the
execution of which have not been revealed to them. Since
the deed of sale was registered on March 5, 1987, Christina
Ayuste is presumed to have constructive notice of the sale
from such date.
This case is on all fours with the above-quoted Ayuste case.
Under Article 173 of the Civil Code, an action for the
annulment of any contract entered into by the husband
without the wife's consent must be filed (1) during the
marriage; and (2) within ten years from the transaction
questioned. Where any one of these two conditions is
lacking, the action will be considered as having been filed out
of time. In the case at bar, while respondent filed her
complaint for annulment of the deed of sale on July 8, 1994,
i.e., within the ten-year period counted from the execution
of the deed of sale of the property on June 3, 1986, the
marriage between her and Avelino had already been
dissolved by the death of the latter on November 20, 1993.
In other words, her marriage to Avelino was no longer
subsisting at the time she filed her complaint. Therefore, the
civil case had already been barred by prescription.
Actions prescribe by the mere lapse of time fixed by law.21
The registration of the deed of sale executed by Avelino in
favor of petitioners served as constructive notice thereof. As
such, respondent is chargeable with knowledge of the sale as
to let the prescriptive period run against her. Her complaint
must, therefore, be ordered dismissed.
WHEREFORE, the instant petition is GRANTED. Civil Case No.
B-4488 is ordered DISMISSED on the ground of prescription.
No pronouncement as to costs.
SO ORDERED.
[G.R. No. 132294. August 26, 1999]
DELFIN R. VOLUNTAD and HEIRS OF LUZ VOLUNTAD,
namely, RAMIL, JESUS, MELCHOR, JOSEPH and ERWIN, all
SURNAMED VOLUNTAD, petitioners, vs. SPOUSES
MAGTANGGOL AND CORAZON DIZON, and SPOUSES
EUGENIO AND VICENTA REYES as successors-in-interest and
transferees pendente lite of SPOUSES DIZON, respondents.
BELLOSILLO, J.:
This is a petition for review on certiorari of the Decision of
the Court of Appeals which affirmed the denial by the trial
court of a motion for a second alias writ of execution against
respondent-spouses Eugenio Reyes and Vicenta Reyes.
On 15 February 1993 petitioners filed a petition for
mandamus with the Regional Trial Court of Malolos, Bulacan,
docketed as Civil Case No. 142-M-93, to direct respondent-
spouses Magtanggol Dizon and Corazon Dizon to render a
true and correct accounting of the financial obligation of
petitioners. It appears that on 12 July 1980 petitioners
obtained a loan from the Rural Bank of Pandi secured by a
mortgage over one-half of a parcel of land formerly owned
by petitioners and covered by TCT No. 25073 (T-7456-M) of
the Registry of Deeds of Bulacan. For failure of petitioners to
pay the loan, the Rural Bank of Pandi foreclosed the
mortgage and the property was sold at public auction with
the Bank becoming the highest bidder. More than three (3)
months after the certificates of sheriff's sale were registered,
the mortgagee-vendee Bank, without the knowledge of
petitioners, assigned its rights over the property to
respondent-spouses Magtanggol and Corazon Dizon. In their
petition with the trial court, petitioners prayed to be allowed
to exercise their right of redemption over the subject
property for the amount of P124,762.04 with legal rate of
interest from 17 December 1982 up to its legal redemption.
On 16 February 1993 petitioners caused the annotation of a
notice of lis pendens on the subject property then under the
name of Carmen Voluntad and Maria Voluntad,
predecessors-in-interest of petitioners. Upon partition into
two (2) of the property covered by TCT No. 25073 (T-7456-M)
the notice of lis pendens was carried over to TCT No. T-
166332-M in the name of respondent-spouses Dizon. The
Dizons then filed an omnibus motion to dismiss the petition
and to strike out the notice of lis pendens.
3
On 20 May 1993 the trial court issued an order dismissing the
case on the ground of res judicata and granting the motion to
strike out the notice of lis pendens "there is no longer need
for such annotation on the title of the subject property with
the dismissal of the case." Pursuant to this order, the
Registry of Deeds of Meycauayan on 24 May 1993 cancelled
the notice of lis pendens.
Upon denial of the motion for reconsideration, petitioners
went to the Court of Appeals questioning the order of the
trial court cancelling the lis pendens and dismissing the
petition. On 31 August 1994 the appellate court in CA-G.R.
No. SP-33454 rendered a decision setting aside the order of
the trial court which dismissed the complaint and remanded
the case to the court a quo for further proceedings.
On 8 December 1995 the trial court rendered a decision in
favor of petitioners directing respondent-spouses Dizon (a)
to render a true and correct accounting of the financial
obligation of petitioners to the Rural Bank of Pandi, Inc., in
Bulacan as assigned to respondent Dizons; (b) to allow
petitioners to exercise their right of redemption over the
one-half undivided portion of the parcel of land covered by
TCT No. 25073 (T-7456-M) for the amount of P124,762.04
with legal rate of interest from 17 December 1982 up to the
date of legal redemption; and, (c) to pay petitioners
attorneys fees of P30,000.00.
After the judgment had become final and executory, the trial
court issued an order directing the issuance of a writ of
execution. On 21 February 1995 a writ of execution was
issued which was however returned unsatisfied for the
reason that the property was already sold to respondent-
spouses Eugenio and Vicenta Reyes. Hence, petitioners filed
another motion for the issuance of an alias writ of execution.
The motion was granted by the trial court. Unfortunately, the
sheriff's return dated 4 November 1996 showed that the
alias writ was unsatisfied because the subject property was
already transferred and sold by respondent-spouses Dizons
to another person, referring to respondent-spouses Eugenio
and Vicenta Reyes.[1] As a result of the transfer, TCT No.
166332-M in the name of Magtanggol and Corazon Dizon
was cancelled and TCT No. T-178105-M was issued in the
name of the spouses Eugenio and Vicenta Reyes.[2]

Petitioners filed a Motion for Second Alias Writ of Execution
claiming, inter alia, that a notice of lis pendens had been
annotated in the title with the filing of Civil Case No. 142-M-
93 and the order directing the cancellation of the notice of lis
pendens had been set aside by the Court of Appeals in its
decision in CA-G.R. SP No. 33454, and respondents Vicenta
and Eugenio Reyes were transferees pendente lite when
respondent-spouses Dizon sold and transferred to them the
property subject of a pending litigation.
On 26 November 1996 the trial court issued an order denying
petitioners motion for second alias writ of execution. On 7
February 1997 petitioner's motion for reconsideration was
also denied.
Consequently, petitioners filed with the Court of Appeals a
special civil action of certiorari and mandamus alleging grave
abuse of discretion amounting to lack of or excess of
jurisdiction on the part of the trial court and praying that it
be directed to issue an alias writ of execution against the
transferees of the property, herein respondent-spouses
Reyes. However on 22 October 1997 the Court of Appeals
dismissed the petition.
Hence, petitioners came to this Court alleging that the Court
of Appeals erred: (a) in not ordering the Regional Trial Court
to issue an alias writ of execution against respondents
Eugenio and Vicenta Reyes as successors-in-interest and
transferees pendente lite of respondents Magtanggol and
Corazon Dizon; and, (b) in concluding that respondent-
spouses Reyes are buyers in good faith despite existence of
circumstances that should have alerted them to investigate
beyond the face of the certificate of title but did not.
On 1 March 1999 we gave due course to the petition but only
insofar as respondent-spouses Reyes were concerned, but
denied the petition as against respondent-spouses Dizon for
failure of petitioners to give the correct and present address
of said respondents.
We find the petition meritorious. Based on the records and
the pleadings of the parties with this Court, the following
facts are undisputed: that during the pendency of Civil Case
No. 142-M-93 with the trial court, petitioners caused the
annotation of a notice of lis pendens on TCT No. T-166332-M
covering the subject property; that pursuant to the order of
the trial court of 20 May 1993, the Register of Deeds
cancelled the previous annotation of lis pendens. The
following inscriptions appear in TCT No. T-166332-M:
Entry No. 74364(M): Lis Pendens in favor of Delfin R.
Voluntad - An action has been commenced and is now
pending in RTC of Bulacan Branch, Malolos in Sp. Civil Case
No. 142-M-93 (For: Mandamus with Damages) entitled Delfin
R. Voluntad and heirs of Luz Voluntad Ramil, Jesus, Melchor,
Joseph and Erwin all surnamed Voluntad, Plaintiffs vs.
Spouses Magtanggol Dizon and Corazon Dizon affecting the
one-half (1/2) undivided portion of the land described
herein; Date of Instrument: Feb. 16, 1993; Date of
Inscription: Feb. 16, 1993 at 2:00 p.m.
xxxx
Entry No. 85179 (M): ORDER issued by RTC Br. 16, Malolos,
Bulacan; By virtue of an order, Lis Pendens annotated under
Entry No. 74364(M) is hereby dismissed and cancelled; Date
of the Instrument May 20, 1993; Date of Inscription May 24,
1993 at 10:50 a.m.;[3]
that petitioners timely appealed to the Court of Appeals
which reversed the dismissal by the trial court and remanded
the case for further proceedings; that, meanwhile, on 30
August 1993 respondent-spouses Dizon sold the property to
respondent- spouses Reyes; and, that the trial court later
rendered judgment declaring that petitioners had the right to
repurchase the property from the Dizons, which became final
and executory.
From the attendant circumstances, it is crystal clear that an
examination of the certificate of title and the annotations
therein would disclose that a civil action was filed with the
trial court involving the property described in the title. The
annotation in the title that the property was involved in a
suit should have prompted the prudent purchaser to inquire
and verify if the suit was finally terminated and the property
freed from any legal infirmity or judicial inquiry. Although the
notice of lis pendens was cancelled pursuant to the order of
the trial court dismissing the civil action, the cancellation
effected after barely four (4) days was premature because
the court order was not yet final, as petitioners still had the
4
remaining period of eleven (11) days to appeal the order. In
fact, a mere inquiry with the trial court which issued the
order of dismissal and the cancellation of the lis pendens
would reveal that petitioners timely appealed the dismissal
to the Court of Appeals.
The general rule is that a person dealing with registered land
has a right to rely on the Torrens Certificate of Title without
the need of inquiring further. But this rule cannot apply when
the party has actual knowledge of facts and circumstances
that would impel a reasonably cautious man to make such
inquiry or when the purchaser has knowledge of a defect or
lack of title in his vendor or of sufficient facts to induce a
reasonably prudent man to inquire into the status of the title
of the property in litigation.[4] Hence, when there is
something in the certificate of title to indicate any cloud or
vice in the ownership of the property or any encumbrance
thereon, the purchaser is required to explore further than
what the Torrens title upon its face indicates in quest for any
hidden defect or inchoate right which may subsequently
defeat his right thereto.
As a purchaser, respondent-spouses Reyes should have
examined the certificate of title and all factual circumstances
necessary for them to determine whether or not flaws
existed which might invalidate their title. It is a settled rule
that a purchaser of real estate with knowledge of any defect
or lack of title of the vendor cannot claim that he has
acquired title thereto in good faith as against the true owner
of the land or interest therein. The same rule applies to one
with knowledge of facts which should have put him on
inquiry and investigation as might be necessary to acquaint
him with the defects in the title of his vendor.[5] If
circumstances exist that require a prudent man to investigate
and he does not, he is deemed to have acted in mala fide. A
partys mere refusal to believe that a defect exists or his
willful closing of his eyes to the possibility of the existence of
a defect in his vendors title will not make him an innocent
purchaser for value if it afterwards develops that the title
was in fact defective. Similarly, a buyer of registered land
who fails to act with the diligence of a prudent man cannot
be a purchaser in good faith.[6] Therefore, given the facts of
this case which are clearly set forth in the records and
established by the evidence, there is no need for petitioners

to file a separate action to enforce their right to repurchase
the property as against the new registered owners.
In Lising v. Plan,[7] this Court ruled that a writ of execution
may be issued against a person not a party to the case where
the latters remedy which he did not avail of was to intervene
in the case involving rights over the same parcel of land of
which he claims to be the vendee. The cancellation of the lis
pendens on the title of respondent-spouses Dizon prior to
the purchase by the respondent-spouses Reyes need not
alter our conclusion as the cancellation was prematurely
done while the appeal in the case between petitioners and
respondent-spouses Dizon was still pending with the
appellate court. Having purchased registered land with full
notice of the fact that it is in litigation between the vendor
and a third party, respondent-spouses Reyes stand in the
place of their vendor and their title is subject to the incidents
and results of the pending litigation. Ought to have been
aware of the pendency of the case, respondent-spouses
Reyes should have intervened in the suit for the protection of
their alleged rights. Having failed to do so, they are bound by
the results. A transferee pendente lite stands exactly in the
shoes of the transferor and is bound by any judgment or
decree which may be rendered for or against the
transferor.[8] Petitioners can legally enforce the final
judgment of the trial court against respondent-spouses
Eugenio and Vicenta Reyes with respect to the petitioners'
right to repurchase the property from the Reyeses as
transferees pendente lite of respondent-spouses Magtanggol
and Corazon Dizon.
WHEREFORE, the petition is GRANTED. The Decision of the
Court of Appeals affirming the order of the trial court which
denied petitioners' motion for a second alias writ of
execution against respondent-spouses Eugenio and Vicenta
Reyes is REVERSED and SET ASIDE. Accordingly, the case is
remanded to the trial court for the immediate issuance of a
second alias writ of execution against respondents Eugenio
and Vicenta Reyes for the enforcement of the final judgment
of the Regional Trial Court of Malolos, Bulacan, in Civil Case
142-M-93, allowing petitioners Delfin R. Voluntad and the
heirs of Luz Voluntad, namely, Ramil, Jesus, Melchor, Joseph
and Erwin, all surnamed Voluntad, to exercise their right to
repurchase the property covered by TCT No. T-178105
presently registered in the name of respondent-spouses
Eugenio and Vicenta Reyes.
SO ORDERED.
G.R. No. 183448, June 30, 2014
SPOUSES DOMINADOR PERALTA AND OFELIA PERALTA,
Petitioners, v. HEIRS OF BERNARDINA ABALON,
REPRESENTED BY MANSUETO ABALON, Respondents.
G. R. No. 183464
HEIRS OF BERNARDINA ABALON, REPRESENTED BY
MANSUETO ABALON, Petitioners, v. MARISSA ANDAL,
LEONIL ANDAL, ARNEL ANDAL, SPOUSES DOMINDOR
PERALTA AND OFELIA PERALTA, AND HEIRS OF RESTITUTO
RELLAMA, REPRESENTED BY HIS CHILDREN ALEX,
IMMANUEL, JULIUS AND SYLVIA, ALL SURNAMED RELLAMA,
Respondents.
SERENO, C.J.:
Before us are the consolidated Petitions for Review on
Certiorari under Rule 45 of the Rules of Court assailing the 30
May 2007 Decision1 of the Court of Appeals (CA)
Seventeenth Division in CA-G.R. CV No. 85542. The CA had
reversed the 14 April 2005 Decision2 of the Regional Trial
Court (RTC), Fifth Judicial Region of Legaspi City, Branch 5, in
Civil Case No. 9243.
The civil case before the RTC of Legaspi City involved a parcel
of land registered under the name of Bernardina Abalon and
fraudulently transferred to Restituto Rellama and who, in
turn, subdivided the subject property and sold it separately
to the other parties to this case � Spouses Dominador and
Ofelia Peralta; and Marissa, Leonil and Arnel, all surnamed
Andal. Thereafter, Spouses Peralta and the Andals
individually registered the respective portions of the land
they had bought under their names. The heirs of Bernardina
were claiming back the land, alleging that since it was sold
under fraudulent circumstances, no valid title passed to the
buyers. On the other hand, the buyers, who were now title
holders of the subject parcel of land, averred that they were
buyers in good faith and sought the protection accorded to
them under the law.
5
THE FACTS
The RTC and the CA have the same findings of fact, but differ
in their legal conclusions. There being no factual issues raised
in the Petitions, we adopt the findings of fact of the CA in CA-
G.R. No. 85542, as follows:chanRoblesvirtualLawlibrary
The subject parcel of land, described as Lot 1679 of the
Cadastral Survey of Legaspi, consisting of 8,571 square
meters, was originally covered by Original Certificate of Title
(OCT) No. (O) 16 and registered in the name of Bernardina
Abalon (Abalon). It appears that a Deed of Absolute Sale was
executed over the subject property in favor of Restituto M.
Rellama (Rellama) on June 10, 1975. By virtue of such
conveyance OCT No. (O) 16 was cancelled and in lieu thereof
Transfer Certificate of Title (TCT) No. 42108 was issued in the
name of Rellama. The subject property was then subdivided
into three (3) portions: Lot 1679-A, Lot 1679-B, Lot 1679-C.
Lot 1679-A was sold to Spouses Dominador P. Peralta, Jr. and
Ofelia M. Peralta (Spouses Peralta) for which reason TCT No.
42254 was issued in their names. Lot 1679-B, on the other
hand, was first sold to Eduardo Lotivio (Lotivio) who
thereafter transferred his ownership thereto to Marissa
Andal, Arnel Andal, and Leonil Andal (the Andals) through a
Deed of Absolute Sale dated October 9, 1995. On even date,
TCT No. 42482 was issued in the name of the Andals. The
Andals likewise acquired Lot 1679-C as evidenced by the
issuance of TCT No. 42821 in their favor on December 27,
1995.
Claiming that the Deed of Absolute Sale executed by Abalon
in favor of Rellama was a forged document, and claiming
further that they acquired the subject property by
succession, they being the nephew and niece of Abalon who
died without issue, plaintiff-appellees Mansueta Abalon and
Amelia Abalon filed the case below against Rellama, Spouses
Peralta, and the Andals, the herein defendants-appellants
and the Bank of the Philippines [sic] Islands which was later
dropped as a party defendant.
It was alleged in their Complaint and subsequent Amended
Complaint, under five separate causes of action, that Rellama
was able to cause the cancellation of OCT No. (O) 16, and in
lieu thereof the issuance of TCT No. 42108 in his own name
from which the defendants-appellants derived their own

titles, upon presentation of a xerox copy of the alleged
forged deed of absolute sale and the order granting the
issuance of a second owner�s duplicate copy of OCT No. (O)
16 in his favor in Miscellaneous Cadastral Case No. 10648,
which he had filed on the pretext that Lot 1679 covered by
OCT No. (O) 16 was sold to him and that the owner�s
duplicate copy of the said title got lost in 1976 after the same
was delivered to him. They averred that the owner�s
duplicate copy of Oct NO. (O) 16 had always been with
Abalon and that upon her death, it was delivered to them.
Likewise, they alleged that Abalon had always been in
possession of the subject property through her tenant Pedro
Bellen who was thereafter succeeded by his wife, Ruperta
Bellen, and then his son, Godofredo Bellen. On the other
hand, they said that Rellama had never set foot on the land
he was claiming. They further alleged that after the
ownership over the subject property was transferred to them
upon the death of Abalon, they took possession thereof and
retained Godofredo as their own tenant. However, they
averred that in 1995 the defendants-appellants were able to
wrest possession of the subject property from Godofredo
Bellen. They alleged that the defendants-appellants are not
buyers in good faith as they were aware that the subject land
was in the possession of the plaintiffs-appellees at the time
they made the purchase. They thus claim that the titles
issued to the defendants-appellants are null and void.
In his answer, Rellama alleged that the deed of absolute sale
executed by Abalon is genuine and that the duplicate copy of
OCT No. (O) 16 had been delivered to him upon the
execution of the said deed of transfer.
As for Spouses Peralta and the Andals, who filed their
separate answers to the complaint, they mainly alleged that
they are buyers in good faith and for value.
During the trial, Rellama passed away. He was substituted by
his heirs.
After the plaintiffs-appellees rested their case, instead of
presenting their own evidence, the defendants-appellants
and the Heirs of Restituto Rellama, on different occasions,
filed a demurrer to evidence.
On April 14, 2005, the court a quo rendered judgment in
favor of the plaintiffs-appellees and ordered the restoration
of OCT No. (O) 16 in the name of Abalon and the cancellation
of the titles issued to the defendants-appellants. The fact
that only a xerox copy of the purported deed of sale between
Rellama and Abalon was presented before the Register of
Deeds for registration and the absence of such xerox copy on
the official files of the said Office made the court a quo
conclude that the said document was a mere forgery. On the
other hand, the court a quo noted that the duplicate copy of
OCT No. (O) 16 in the hands of the plaintiffs-appellees bears
[sic] the perforated serial number B 221377, which it held is a
convincing proof of its authenticity and genuineness. It thus
stated that �Miscellaneous Cadastral Case No. 10648 is a
(mere) strategem [sic] fraudulently concocted ... for the
issuance of a fabricated (second) owner�s duplicate
certificate of Oct No. (O) 16� since the owner�s duplicate
copy of OCT No. (O) 16 has not been lost at all. It said that
any subsequent registration procured by the presentation of
such forged instrument is null and void. The dispositive
portion of the court a quo�s decision reads:
WHEREFORE, [p]remises [c]onsidered, judgment is rendered
as follows, to wit:ChanRoblesVirtualawlibrary
Ordering the restoration of Original Certificate of Title No.
(O) 16 embracing Lot 1679 in the name of Bernardina Abalon
into the official files of the Registry of Deeds of Legaspi City
� a copy of the owner�s duplicate certificate embodying
the technical description of Lot 1679 forming official part of
the record as Exhibit �D� � as well as ordering the
cancellation of any and all transfer certificates of title
succeeding Original Certificate of title No. (O) 16 � including
Transfer Certificates (sic) of Title Nos. 42108, 42254, 42255,
42256, 42821 [,] and 42482;
Ordering the defendants Marissa Andal, Leonil Andal, Arnel
Andal[,] and the spouses Dominador and Ofelia Peralta to
vacate Lot 1679 and to peacefully surrender such lot to the
plaintiffs;
Ordering the defendants to pay the plaintiffs the amount of
P50,000.00 as litigation expenses; and
Ordering the defendants to pay the costs of suit.
The counterclaims by [sic] the defendants are all dismissed.
6
SO ORDERED.
Spouses Peralta and the Andals filed their separate Notices of
Appeal and thereafter, upon approval, filed their respective
Defendants-Appellants� Briefs. The Heirs of Rellama, on the
other hand, opted not to challenge the ruling of the lower
court.3cralawlawlibrary
The Andals and Spouses Peralta � appellants in CA-G.R. CV
No. 85542 � raised several issues, which the CA summarized
as follows:chanRoblesvirtualLawlibrary
Whether the Deed of Absolute Sale executed by Abalon in
favor of Rellama was spurious
Whether the Andals and Spouses Peralta were buyers in
good faith and for value
Who among the parties were entitled to their claims for
damages.4
THE RULING OF THE COURT OF APPEALS
On 30 May 2007, the Seventeenth Division of the Court of
Appeals promulgated its assailed judgment setting aside the
RTC Decision. The CA ruled that the circumstances
surrounding the sale of the subject property showed badges
of fraud or forgery against Rellama. It found that Abalon had
not parted with her ownership over the subject property
despite the claim of Rellama that they both executed a Deed
of Absolute Sale. As proof, the CA pointed out the existence
of a notarized contract of leasehold executed by Abalon with
Ruperta Bellen on 11 June 1976. The genuineness and due
execution of the said leasehold agreement was
uncontroverted by the parties. On this basis, the appellate
court concluded that Abalon could not have leased the
subject parcel of land to Bellen if the former had parted with
her ownership thereof.5cralawred
The CA also found no evidence to show that Rellama
exercised dominion over the subject property, because he
had not introduced improvements on the property, despite
claiming to have acquired it in 1975.6 Further, the CA noted
that he did not cause the annotation of the Deed of Sale,

which he had executed with Abalon, on OCT No. (O) 16. It
observed that when the original copy of OCT No. (O) 16 was
allegedly lost in 1976, while Rellama was on his way to
Legaspi City to register the title to his name, it took him
almost 20 years to take steps to judicially reconstitute a copy
thereof. To the appellate court, these circumstances cast
doubt on the veracity of Rellama�s claim of ownership over
such a significant property, which was almost a
hectare.7cralawred
The CA also ruled that the heirs of Bernardina Abalon had the
legal standing to question the sale transaction between
Rellama and their predecessor-in-interest. It concluded that
the heirs of Abalon had acquired the subject property by
ordinary acquisitive prescription and thus had every right to
attack every document that intended to divest them of
ownership thereof,8 which in this case was the Deed of Sale
that Bernardina executed in favor of Rellama. Lastly, the
appellate court considered the Spouses Peralta as buyers in
bad faith for relying on a mere photocopy of TCT No. 42108
when they bought the property from Rellama.9 On the other
hand, it accorded the Andals the presumption of good faith,
finding no evidence that would rebut this
presumption.10cralawred
The dispositive portion of the assailed CA Decision in CA-G.R.
CV No. 85542 is as follows:chanRoblesvirtualLawlibrary
WHEREFORE, the assailed decision is SET ASIDE and a new
judgment is rendered as follows:
1. Transfer Certificate of Title No. 42482 and Transfer
Certificate of Title No. 42821, both in the names of Andals,
are held legal and valid.
2. Transfer Certificate of Title No. 42254 registered in the
names of Spouses Peralta is cancelled for being null and void.
Hence, they are ordered to vacate the land covered thereby
and to surrender possession thereof in favor of the plaintiffs-
appellees.
SO ORDERED.11cralawlawlibrary
The heirs of Abalon filed a Motion for Reconsideration of the
30 May 2007 Decision, insofar as the CA declared the Andals
to be buyers in good faith of the subject property and, thus,
that the land title issued in their favor was valid. Spouses
Peralta, for their part, filed a Motion for Partial
Reconsideration of the said CA Decision pertaining to the
portion that declared them as buyers in bad faith which
accordingly nullified the title issued to them.
On 10 June 2008, the CA denied the Motions for Partial
Reconsideration of the movants for lack of merit.12cralawred
On 11 August 2008, Spouses Peralta filed with this Court a
Petition for Review under Rule 45 of the Rules of Court
assailing the 30 May 2007 Decision in CA-G.R. CV No.
85542.13 On the same day, the heirs of Bernardina Abalon,
represented by Mansueto Abalon, filed a similar Petition
questioning the portion of the mentioned CA Decision
declaring the validity of the title issued to the Andals, who
were adjudged by the appellate court as buyers in good
faith.14cralawred
THE ISSUES
The Petition filed by Spouses Peralta, docketed as G.R. No.
183448, lists the following
issues:chanRoblesvirtualLawlibrary
a) The case for annulment should have been dismissed
because the purported Deed of Sale executed by Abalon and
Rellama was not introduced in evidence and thus, forgery
was not proven.
b) The heirs of Abalon are not forced heirs of Bernardina
Abalon; hence, they do not have the legal personality to file
the action to annul the subject Deed of Sale.
c) The heirs of Abalon failed to prove that they had inherited
the subject property.
d) Spouses Peralta are buyers in good faith and, thus title to
their portion of the subject property must be upheld15
As for the heirs of Abalon, their Petition, docketed as G.R.
No. 183464, raises the following
issues:chanRoblesvirtualLawlibrary
7
a) The Andals cannot be considered as buyers in good faith
by simply applying the ordinary presumption in the absence
of evidence showing the contrary.
b) The CA erred in applying in favor of the Andals, the
doctrine that a forged instrument may become the root of a
valid title in the hands of an innocent purchaser for value,
because Abalon never parted with her possession of the valid
and uncancelled title over the subject property
c) The CA erred in declaring the validity of the title issued in
the names of the Andals, because Rellama was bereft of any
transmissible right over the portion of the property he had
sold to them.16cralawlawlibrary
THE COURT�S RULING
We deny the Petitions and affirm the ruling of the CA.
The main issue to be resolved in this case is whether a forged
instrument may become the root of a valid title in the hands
of an innocent purchaser for value, even if the true owner
thereof has been in possession of the genuine title, which is
valid and has not been cancelled.
It is well-settled that �a certificate of title serves as
evidence of an indefeasible and incontrovertible title to the
property in favor of the person whose name appears therein.
The real purpose of the Torrens system of land registration is
to quiet title to land and put a stop forever to any question
as to the legality of the title.�17cralawred
In Tenio-Obsequio v. Court of Appeals, 18 we explained the
purpose of the Torrens system and its legal implications to
third persons dealing with registered land, as
follows:chanRoblesvirtualLawlibrary
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. 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 the property.
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.
The Torrens system was intended to guarantee the integrity
and conclusiveness of the certificate of registration, but the
system cannot be used for the perpetration of fraud against
the real owner of the registered land. The system merely
confirms ownership and does not create it. It cannot be used
to divest lawful owners of their title for the purpose of
transferring it to another one who has not acquired it by any
of the modes allowed or recognized by law. Thus, the Torrens
system cannot be used to protect a usurper from the true
owner or to shield the commission of fraud or to enrich
oneself at the expense of another.19cralawred
It is well-established in our laws and jurisprudence that a
person who is dealing with a registered parcel of land need
not go beyond the face of the title. A person is only charged
with notice of the burdens and claims that are annotated on
the title.20 This rule, however, admits of exceptions, which
we explained in Clemente v. Razo:21cralawred
Any buyer or mortgagee of realty covered by a Torrens
certificate of title, in the absence of any suspicion, is not
obligated to look beyond the certificate to investigate the
titles of the seller appearing on the face of the certificate.
And, he is charged with notice only of such burdens and
claims as are annotated on the title.
We do acknowledge that the rule thus enunciated is not cast
in stone. For, indeed, there are exceptions thereto. Thus, in
Sandoval vs. CA, we made clear the
following:ChanRoblesVirtualawlibrary
The aforesaid principle admits of an unchallenged exception:
that a person dealing with registered land has a right to rely
on the Torrens certificate of title and to dispense with the
need of inquiring further except when the party has actual
knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry or when the
purchaser has knowledge of a defect or the lack of title in his
vendor or of sufficient facts to induce a reasonably prudent
man to inquire into the status of the title of the property in
litigation. The presence of anything which excites or arouses
suspicion should then prompt the vendee to look beyond the
certificate and investigate the title of the vendor appearing
on the face of said certificate. One who falls within the
exception can neither be denominated an innocent
purchaser for value nor a purchaser in good faith; and hence
does not merit the protection of the law.22
Thus, the determination whether one is a buyer in good faith
or can be considered an innocent purchaser for value
becomes imperative. Section 55 of the Land Registration Act
provides protection to an innocent purchaser for value23 by
allowing him to retain the parcel of land bought and his title
is considered valid. Otherwise, the title would be cancelled
and the original owner of the parcel of land is allowed to
repossess it.
8
Jurisprudence has defined an innocent purchaser for value as
one who buys the property of another without notice that
some other person has a right to or interest therein and who
then pays a full and fair price for it at the time of the
purchase or before receiving a notice of the claim or interest
of some other persons in the property. Buyers in good faith
buy a property with the belief that the person from whom
they receive the thing is the owner who can convey title to
the property. Such buyers do not close their eyes to facts
that should put a reasonable person on guard and still claim
that they are acting in good faith.24cralawred
The assailed Decision of the CA held that the Andals were
buyers in good faith, while Spouses Peralta were not. Despite
its determination that fraud marred the sale between
Bernardina Abalon and Rellama, a fraudulent or forged
document of sale may still give rise to a valid title. The
appellate court reasoned that if the certificate of title had
already been transferred from the name of the true owner to
that which was indicated by the forger and remained as such,
the land is considered to have been subsequently sold to an
innocent purchaser, whose title is thus considered valid.25
The CA concluded that this was the case for the Andals.
The appellate court cited Fule v. Legare26 as basis for its
ruling. In the said case, the Court made an exception to the
general rule that a forged or fraudulent deed is a nullity and
conveys no title. A fraudulent document may then become
the root of a valid title, as it held in
Fule:chanRoblesvirtualLawlibrary
Although the deed of sale in favor of John W. Legare was
fraudulent, the fact remains that he was able to secure a
registered title to the house and lot. It was this title which he
subsequently conveyed to the herein petitioners. We have
indeed ruled that a forged or fraudulent deed is a nullity and
conveys no title (Director of Lands vs. Addison, 49 Phil., 19).
However, we have also laid down the doctrine that there are
instances when such a fraudulent document may become the
root of a valid title. 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 (Inquimboy vs. Cruz, G.R. No. L-13953, July 28,
1960).
We have been constrained to adopt the conclusion here set
forth because 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).
Consequently, where there was 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. (Reynes vs. Barrera, 68
Phil., 656; De Lara and De Guzman vs. Ayroso, 50 O.G. No 10,
4838). The public shall then be denied of its foremost
motivation for respecting and observing the Land
Registration Act. In the end, the business community stands
to be inconvenienced and prejudiced immeasurably.
Furthermore, when the Register of Deeds issued a certificate
of title in the name of John W. Legare, and thereafter
registered the same, John W. Legare, insofar as third parties
were concerned, acquired valid title to the house and lot
here disputed. When, therefore, he transferred this title to
the herein petitioners, third persons, the entire transaction
fell within the purview of Article 1434 of the Civil Code. The
registration in John W. Legare's name effectively operated to
convey the properties to him.
After executing the Deed of Sale with Bernardina Abalon
under fraudulent circumstances, Rellama succeeded in
obtaining a title in his name and selling a portion of the
property to the Andals, who had no knowledge of the
fraudulent circumstances involving the transfer from Abalon
to Rellama. In fact, the Decisions of the RTC and the CA show
no factual findings or proof that would rebut the
presumption in favor of the Andals as buyers in good faith.
Thus, the CA correctly considered them as buyers in good
faith and upheld their title.
The Abalons counter this ruling and allege that the CA erred
in relying on Fule to justify its assailed Decision. They argue
that Torres v. Court of Appeals27 is the applicable ruling,
because the facts therein are on all fours with the instant
case.28cralawred
In Torres, the subject property was covered by TCT No.
53628 registered in the name of Mariano Torres. His brother-
in-law Francisco Fernandez, misrepresenting that the copy of
the title had been lost, succeeded in obtaining a court Order
for the issuance of another copy of TCT No. 53628. He then
forged a simulated deed of sale purportedly showing that
Torres had sold the property to him and caused the
cancellation of TCT No. 53628, as well as the issuance of TCT
No. 86018 in his name. Soon, Fernandez mortgaged the
property to Mota. Upon learning of the fraud committed by
Fernandez, Torres caused the annotation of an adverse claim
on the former�s copy and succeeded in having
Fernandez�s title declared null and void. Meanwhile, Mota
was able to foreclose on Fernandez�s real estate mortgage,
as well as to cause the cancellation of TCT No. 86018 and the
issuance of a new one � TCT No. 105953 � in her name.
The issue to be resolved in Torres was whether Mota can be
considered an innocent mortgagee for value, and whether
her title can be deemed valid. Ruling in the negative, the
Court explained:chanRoblesvirtualLawlibrary
There is nothing on the records which shows that Torres
performed any act or omission which could have jeopardized
his peaceful dominion over his realties. The decision under
review, however, in considering Mota an innocent
mortgagee protected under Section 65 of the Land
Registration Law, held that Torres was bound by the
mortgage. Inevitably, it pronounced that the foreclosure sale,
where Mota was the highest bidder, also bound Torres and
concluded that the certificate of title issued in the name of
Mota prevails over that of Torres'. As correctly pointed out
by Torres, however, his properties were sold on execution,
and not on foreclosure sale, and hence, the purchaser
thereof was bound by his notice of adverse claim and lis
pendens annotated at the back of Fernandez' TCT. Moreover,
even if We grant Mota the status of an innocent mortgagee,
the doctrine relied upon by the appellate court that a forged
instrument may become the root of a valid title, cannot be
applied where the owner still holds a valid and existing
certificate of title covering the same interest in a realty. The
9
doctrine would apply rather when, as in the cases for
example of De la Cruz v. Fabie, 35 Phil. 144 [1916], Fule v. De
Legare, No. L-17951, February 28, 1963, 7 SCRA 351, and
Republic v. Umali, G.R. No. 80687, April 10, 1989, the forger
thru insidious means obtains the owner�s duplicate
certificate of title, converts it in his name, and subsequently
sells or otherwise encumbers it to an innocent holder for
value, for in such a case the new certificate is binding upon
the owner (Sec. 55, Act 496; Sec. 53, P.D. No. 1529). But if
the owner holds a valid and existing certificate of title, his
would be indefeasible as against the whole world, and not
that of the innocent holder's. �Prior tempore potior jure�
as We have said in Register of Deeds v. Philippine National
Bank, No. L-17641, January 30, 1965, 13 SCRA 46, citing
Legarda v. Saleeby, 31 Phil. 590, Roman Catholic Bishop v.
Philippine Railway, 49 Phil. 546, Reyes v. Borbon, 50 Phil.
791.29 (Emphasis and underscoring supplied)
We do not agree with the contention of the Abalons that the
ruling in Torres is controlling in this case. They quoted a
portion in the said case that is clearly an obiter. In Torres, it
was shown that Mariano had annotated an adverse claim on
the title procured by Fernandez prior to the execution sale, in
which Mota was the highest bidder. This Court declared her
as a mortgagee in bad faith because, at the back of
Fernandez�s title, Torres made an annotation of the
adverse claim and the notice of lis pendens. The annotation
of the adverse claim was made while the forged document
was still in the name of the forger, who in this case is
Fernandez. That situation does not obtain in the instant case.
The records of the RTC and the CA have a finding that when
Rellama sold the properties to the Andals, it was still in his
name; and there was no annotation that would blight his
clean title. To the Andals, there was no doubt that Rellama
was the owner of the property being sold to them, and that
he had transmissible rights of ownership over the said
property. Thus, they had every right to rely on the face of his
title alone.
The established rule is that a forged deed is generally null
and cannot convey title, the exception thereto, pursuant to
Section 55 of the Land Registration Act, denotes the
registration of titles from the forger to the innocent
purchaser for value. Thus, the qualifying point here is that

there must be a complete chain of registered titles. 30 This
means that all the transfers starting from the original rightful
owner to the innocent holder for value � and that includes
the transfer to the forger � must be duly registered, and the
title must be properly issued to the transferee.
Contrary to what the Abalons would like to impress on us,
Fule and Torres do not present clashing views. In Fule, the
original owner relinquished physical possession of her title
and thus enabled the perpetrator to commit the fraud, which
resulted in the cancellation of her title and the issuance of a
new one. The forged instrument eventually became the root
of a valid title in the hands of an innocent purchaser for
value. The new title under the name of the forger was
registered and relied upon by the innocent purchaser for
value. Hence, it was clear that there was a complete chain of
registered titles.
On the other hand in Torres, the original owner retained
possession of the title, but through fraud, his brother-in-law
secured a court order for the issuance of a copy thereof.
While the title was in the name of the forger, the original
owner annotated the adverse claim on the forged
instrument. Thus, before the new title in the name of the
forger could be transferred to a third person, a lien had
already been annotated on its back. The chain of registered
titles was broken and sullied by the original owner�s
annotation of the adverse claim. By this act, the mortgagee
was shown to be in bad faith.
In the instant case, there is no evidence that the chain of
registered titles was broken in the case of the Andals.
Neither were they proven to have knowledge of anything
that would make them suspicious of the nature of
Rellama�s ownership over the subject parcel of land. Hence,
we sustain the CA�s ruling that the Andals were buyers in
good faith. Consequently, the validity of their title to the
parcel of the land bought from Rellama must be upheld.
As for Spouses Peralta, we sustain the ruling of the CA that
they are indeed buyers in bad faith. The appellate court
made a factual finding that in purchasing the subject
property, they merely relied on the photocopy of the title
provided by Rellama. The CA concluded that a mere
photocopy of the title should have made Spouses Peralta
suspicious that there was some flaw in the title of Rellama,
because he was not in possession of the original copy. This
factual finding was supported by evidence.
The CA pointed out Spouses Peralta�s Answer to the
Complaint of the Abalons in Case No. 9243 in the RTC of
Legaspi City, Branch 5. In their Answer, they specifically
alleged as follows:chanRoblesvirtualLawlibrary
2- These defendants [Spouses Peralta] acquired lot No. 1679-
A by purchase in good faith and for value from Restituto
Rellama under Doc. No. 11212, page No. 26, Book No. 60,
Series of 1996 of Notary Public Atty. Otilio Bongon, Legaspi
City on March 2, 1995 copy of which is attached as and made
part of this answer as Exhibit �1;�
3- That these defendants were handed over by Rellama xerox
[sic] copy of the Transfer Certificate of Title No. 42103 issued
by the Register of Deed of Legaspi City on the 2nd day of
August 1995 copy attached and made integral part as Exhibit
�1-A� and also Original Certificate of Title No. (O) 16 as
Exhibit �1-B�31
We have no reason to disturb this factual finding of the CA
because it is supported by the evidence on record. Spouses
Peralta filed a Petition for Review on Certiorari under Rule
45, which allows only questions of law to be raised. It is a
settled rule that questions of fact are not reviewable in this
kind of appeal. Under Rule 45, Section 1, �petitions for
review on certiorari shall raise only questions of law which
must be distinctly set forth.�32 A question of fact arises
when there is �as to the truth or falsehood of facts or when
there is a need to calibrate the whole evidence considering
mainly the credibility of the witnesses, the existence and
relevancy of specific surrounding circumstances, as well as
their relation to each other and to the whole, and the
probability of the situation.�33 It is further pointed out that
�the determination of whether one is a buyer in good faith
is a factual issue, which generally is outside the province of
this Court to determine in a petition for
review.�34cralawred
10
Whether or not Spouses Peralta are buyers in good faith, is
without a doubt, a factual issue. Although this rule admits of
exceptions,35 none of these applies to their case. There is no
conflict between the factual findings and legal conclusions of
the RTC and those of the CA, both of which found them to be
buyers in bad faith. The fact that they did not participate in
the proceedings before the lower court does not help their
case either.
On the issue of the legal standing of the Abalons to file this
case, we find that the CA correctly upheld their standing as
heirs of the deceased Bernardina Abalon. The appellate court
ruled that during her lifetime, Bernardina Abalon had
promised her heirs � siblings Mansueto and Amelia � that
she would give them the subject property. A duplicate copy
of OCT No. (O) 16 was delivered to them upon her death.
Thus, the CA concluded that the two siblings acquired the
subject property by ordinary prescription. Further, it deduced
that the mode of transmission of the property from
Bernardina to her nephew and niece was a form of donation
mortis causa, though without the benefit of a will.36 Despite
this omission, it still held that Mansueto and Amelia acquired
the subject property through ordinary acquisitive
prescription because, since the death of their aunt
Bernardina, they had been in possession of the property for
more than 10 years that ripened into full
ownership.37cralawred
Under Article 97538 of the Civil Code, siblings Mansueto and
Amelia Abalon are the legal heirs of Bernardina, the latter
having had no issue during her marriage. As such, they
succeeded to her estate when she passed away. While we
agree with the CA that the donation mortis causa was invalid
in the absence of a will, it erred in concluding that the heirs
acquired the subject property through ordinary acquisitive
prescription. The subject parcel of land is a titled property;
thus, acquisitive prescription is not applicable.39 Upon the
death of Bernardina, Mansueto and Amelia, being her legal
heirs, acquired the subject property by virtue of succession,
and not by ordinary acquisitive prescription.
WHEREFORE, the petitions in G.R. Nos. 183448 and 183464
are DENIED for lack of merit. The Decision in CA-G.R. CV No.
85542 is hereby AFFIRMED.
SO ORDERED.

[G.R. No. 117897. May 14, 1997]
ISLAMIC DIRECTORATE OF THE PHILIPPINES, MANUEL F.
PEREA and SECURITIES & EXCHANGE COMMISSION,
petitioners, vs. COURT OF APPEALS and IGLESIA NI CRISTO,
respondents.
HERMOSISIMA, JR., J.:
The subject of this petition for review is the Decision of the
public respondent Court of Appeals,[1] dated October 28,
1994, setting aside the portion of the Decision of the
Securities and Exchange Commission (SEC, for short) in SEC
Case No. 4012 which declared null and void the sale of two
(2) parcels of land in Quezon City covered by the Deed of
Absolute Sale entered into by and between private
respondent Iglesia Ni Cristo (INC, for short) and the Islamic
Directorate of the Philippines, Inc., Carpizo Group, (IDP, for
short).
The following facts appear of record.
Petitioner IDP-Tamano Group alleges that sometime in 1971,
Islamic leaders of all Muslim major tribal groups in the
Philippines headed by Dean Cesar Adib Majul organized and
incorporated the ISLAMIC DIRECTORATE OF THE PHILIPPINES
(IDP), the primary purpose of which is to establish an Islamic
Center in Quezon City for the construction of a Mosque
(prayer place), Madrasah (Arabic School), and other religious
infrastructures so as to facilitate the effective practice of
Islamic faith in the area.[2]
Towards this end, that is, in the same year, the Libyan
government donated money to the IDP to purchase land at
Culiat, Tandang Sora, Quezon City, to be used as a Center for
the Islamic populace. The land, with an area of 49,652 square
meters, was covered by two titles: Transfer Certificate of
Title Nos. RT-26520 (176616)[3] and RT-26521 (170567),[4]
both registered in the name of IDP.
It appears that in 1971, the Board of Trustees of the IDP was
composed of the following per Article 6 of its Articles of
Incorporation:
Senator Mamintal Tamano[5]
Congressman Ali Dimaporo
Congressman Salipada Pendatun
Dean Cesar Adib Majul
Sultan Harun Al-Rashid Lucman
Delegate Ahmad Alonto
Commissioner Datu Mama Sinsuat
Mayor Aminkadra Abubakar[6]
According to the petitioner, in 1972, after the purchase of
the land by the Libyan government in the name of IDP,
Martial Law was declared by the late President Ferdinand
Marcos. Most of the members of the 1971 Board of Trustees
like Senators Mamintal Tamano, Salipada Pendatun, Ahmad
Alonto, and Congressman Al-Rashid Lucman flew to the
Middle East to escape political persecution.
Thereafter, two Muslim groups sprung, the Carpizo Group,
headed by Engineer Farouk Carpizo, and the Abbas Group,
led by Mrs. Zorayda Tamano and Atty. Firdaussi Abbas. Both
groups claimed to be the legitimate IDP. Significantly, on
October 3, 1986, the SEC, in a suit between these two
contending groups, came out with a Decision in SEC Case No.
2687 declaring the election of both the Carpizo Group and
the Abbas Group as IDP board members to be null and void.
The dispositive portion of the SEC Decision reads:
WHEREFORE, judgment is hereby rendered declaring the
elections of both the petitioners[7] and respondents[8] as
null and void for being violative of the Articles of
Incorporation of petitioner corporation. With the nullification
of the election of the respondents, the approved by-laws
which they certified to this Commission as members of the
Board of Trustees must necessarily be likewise declared null
and void. However, before any election of the members of
the Board of Trustees could be conducted, there must be an
approved by-laws to govern the internal government of the
association including the conduct of election. And since the
election of both petitioners and respondents have been
declared null and void, a vacuum is created as to who should
11
adopt the by-laws and certify its adoption. To remedy this
unfortunate situation that the association has found itself in,
the members of the petitioning corporation are hereby
authorized to prepare and adopt their by-laws for submission
to the Commission. Once approved, an election of the
members of the Board of Trustees shall immediately be
called pursuant to the approved by-laws.
SO ORDERED.[9]
Neither group, however, took the necessary steps prescribed
by the SEC in its October 3, 1986 Decision, and, thus, no valid
election of the members of the Board of Trustees of IDP was
ever called. Although the Carpizo Group[10] attempted to
submit a set of by-laws, the SEC found that, aside from
Engineer Farouk Carpizo and Atty. Musib Buat, those who
prepared and adopted the by-laws were not bona fide
members of the IDP, thus rendering the adoption of the by-
laws likewise null and void.
On April 20, 1989, without having been properly elected as
new members of the Board of Trustees of IDP, the Carpizo
Group caused to be signed an alleged Board Resolution[11]
of the IDP, authorizing the sale of the subject two parcels of
land to the private respondent INC for a consideration of
P22,343,400.00, which sale was evidenced by a Deed of
Absolute Sale[12] dated April 20, 1989.
On May 30, 1991, the petitioner 1971 IDP Board of Trustees
headed by former Senator Mamintal Tamano, or the Tamano
Group, filed a petition before the SEC, docketed as SEC Case
No. 4012, seeking to declare null and void the Deed of
Absolute Sale signed by the Carpizo Group and the INC since
the group of Engineer Carpizo was not the legitimate Board
of Trustees of the IDP.
Meanwhile, private respondent INC, pursuant to the Deed of
Absolute Sale executed in its favor, filed an action for Specific
Performance with Damages against the vendor, Carpizo
Group, before Branch 81 of the Regional Trial Court of
Quezon City, docketed as Civil Case No. Q-90-6937, to
compel said group to clear the property of squatters and
deliver complete and full physical possession thereof to INC.
Likewise, INC filed a motion in the same case to compel one
Mrs. Leticia P. Ligon to produce and surrender to the Register

of Deeds of Quezon City the owners duplicate copy of TCT
Nos. RT-26521 and RT-26520 covering the aforementioned
two parcels of land, so that the sale in INCs favor may be
registered and new titles issued in the name of INC. Mrs.
Ligon was alleged to be the mortgagee of the two parcels of
land executed in her favor by certain Abdulrahman R.T.
Linzag and Rowaida Busran-Sampaco claimed to be in behalf
of the Carpizo Group.
The IDP-Tamano Group, on June 11, 1991, sought to
intervene in Civil Case No. Q-90-6937 averring, inter alia:
xxx xxx xxx
2. That the Intervenor has filed a case before the Securities
and Exchange Commission (SEC) against Mr. Farouk Carpizo,
et, al., who, through false schemes and machinations,
succeeded in executing the Deed of Sale between the IDP
and the Iglesia Ni Kristo (plaintiff in the instant case) and
which Deed of Sale is the subject of the case at bar;
3. That the said case before the SEC is docketed as Case No.
04012, the main issue of which is whether or not the
aforesaid Deed of Sale between IDP and the Iglesia ni Kristo
is null and void, hence, Intervenors legal interest in the
instant case. A copy of the said case is hereto attached as
Annex A;
4. That, furthermore, Intervenor herein is the duly
constituted body which can lawfully and legally represent the
Islamic Directorate of the Philippines;
xxx xxx xxx.[13]
Private respondent INC opposed the motion arguing, inter
alia, that the issue sought to be litigated by way of
intervention is an intra-corporate dispute which falls under
the jurisdiction of the SEC.[14]
Judge Celia Lipana-Reyes of Branch 81, Regional Trial Court of
Quezon City, denied petitioners motion to intervene on the
ground of lack of juridical personality of the IDP-Tamano
Group and that the issues being raised by way of intervention
are intra-corporate in nature, jurisdiction thereto properly
pertaining to the SEC.[15]
Apprised of the pendency of SEC Case No. 4012 involving the
controverted status of the IDP-Carpizo Group but without
waiting for the outcome of said case, Judge Reyes, on
September 12, 1991, rendered Partial Judgment in Civil Case
No. Q-90-6937 ordering the IDP-Carpizo Group to comply
with its obligation under the Deed of Sale of clearing the
subject lots of squatters and of delivering the actual
possession thereof to INC.[16]
Thereupon, Judge Reyes in another Order, dated March 2,
1992, pertaining also to Civil Case No. Q-90-6937, treated INC
as the rightful owner of the real properties and disposed as
follows:
WHEREFORE, Leticia P. Ligon is hereby ordered to produce
and/or surrender to plaintiff[17] the owners copy of RT-
26521 (170567) and RT-26520 (176616) in open court for the
registration of the Deed of Absolute Sale in the latters name
and the annotation of the mortgage executed in her favor by
herein defendant Islamic Directorate of the Philippines on
the new transfer certificate of title to be issued to plaintiff.
SO ORDERED.[18]
On April 6, 1992, the above Order was amended by Judge
Reyes directing Ligon to deliver the owners duplicate copies
of TCT Nos. RT-26521 (170567) and RT-26520 (176616) to the
Register of Deeds of Quezon City for the purposes stated in
the Order of March 2, 1992.[19]
Mortgagee Ligon went to the Court of Appeals, thru a
petition for certiorari, docketed as CA-G.R. No. SP-27973,
assailing the foregoing Orders of Judge Reyes. The appellate
court dismissed her petition on October 28, 1992.[20]
Undaunted, Ligon filed a petition for review before the
Supreme Court which was docketed as G.R. No. 107751.
In the meantime, the SEC, on July 5, 1993, finally came out
with a Decision in SEC Case No. 4012 in this wise:
1. Declaring the by-laws submitted by the respondents[21] as
unauthorized, and hence, null and void.
12
2. Declaring the sale of the two (2) parcels of land in Quezon
City covered by the Deed of Absolute Sale entered into by
Iglesia ni Kristo and the Islamic Directorate of the Philippines,
Inc.[22] null and void.
3. Declaring the election of the Board of Directors[23] of the
corporation from 1986 to 1991 as null and void;
4. Declaring the acceptance of the respondents, except
Farouk Carpizo and Musnib Buat, as members of the IDP null
and void.
No pronouncement as to cost.
SO ORDERED.[24]
Private respondent INC filed a Motion for Intervention, dated
September 7, 1993, in SEC Case No. 4012, but the same was
denied on account of the fact that the decision of the case
had become final and executory, no appeal having been
taken therefrom.[25]
INC elevated SEC Case No. 4012 to the public respondent
Court of Appeals by way of a special civil action for certiorari,
docketed as CA-G.R. SP No. 33295. On October 28, 1994, the
court a quo promulgated a Decision in CA-G.R. SP No. 33295
granting INCs petition. The portion of the SEC Decision in SEC
Case No. 4012 which declared the sale of the two (2) lots in
question to INC as void was ordered set aside by the Court of
Appeals.
Thus, the IDP-Tamano Group brought the instant petition for
review, dated December 21, 1994, submitting that the Court
of Appeals gravely erred in:
1) Not upholding the jurisdiction of the SEC to declare the
nullity of the sale;
2) Encouraging multiplicity of suits; and
3) Not applying the principles of estoppel and laches.[26]
While the above petition was pending, however, the
Supreme Court rendered judgment in G.R. No. 107751 on the
petition filed by Mrs. Leticia P. Ligon. The Decision, dated

June 1, 1995, denied the Ligon petition and affirmed the
October 28, 1992 Decision of the Court of Appeals in CA-G.R.
No. SP-27973 which sustained the Order of Judge Reyes
compelling mortgagee Ligon to surrender the owners
duplicate copies of TCT Nos. RT-26521 (170567) and RT-
26520 (176616) to the Register of Deeds of Quezon City so
that the Deed of Absolute Sale in INCs favor may be properly
registered.
Before we rule upon the main issue posited in this petition,
we would like to point out that our disposition in G.R. No.
107751 entitled, Ligon v. Court of Appeals, promulgated on
June 1, 1995, in no wise constitutes res judicata such that the
petition under consideration would be barred if it were the
case. Quite the contrary, the requisites of res judicata do not
obtain in the case at bench.
Section 49, Rule 39 of the Revised Rules of Court lays down
the dual aspects of res judicata in actions in personam, to
wit:
Effect of judgment. - The effect of a judgment or final order
rendered by a court or judge of the Philippines, having
jurisdiction to pronounce the judgment or order, may be as
follows:
xxx xxx xxx
(b) In other cases the judgment or order is, with respect to
the matter directly adjudged or as to any other matter that
could have been raised in relation thereto, conclusive
between the parties and their successors in interest by title
subsequent to the commencement of the action or special
proceeding, litigating for the same thing and under the same
title and in the same capacity;
(c) In any other litigation between the same parties or their
successors in interest, that only is deemed to have been
adjudged in a former judgment which appears upon its face
to have been so adjudged, or which was actually and
necessarily included therein or necessary thereto.
Section 49(b) enunciates the first concept of res judicata
known as bar by prior judgment, whereas, Section 49(c) is
referred to as conclusiveness of judgment.
There is bar by former judgment when, between the first
case where the judgment was rendered, and the second case
where such judgment is invoked, there is identity of parties,
subject matter and cause of action. When the three identities
are present, the judgment on the merits rendered in the first
constitutes an absolute bar to the subsequent action. But
where between the first case wherein judgment is rendered
and the second case wherein such judgment is invoked, there
is only identity of parties but there is no identity of cause of
action, the judgment is conclusive in the second case, only as
to those matters actually and directly controverted and
determined, and not as to matters merely involved therein.
This is what is termed conclusiveness of judgment.[27]
Neither of these concepts of res judicata find relevant
application in the case at bench. While there may be identity
of subject matter (IDP property) in both cases, there is no
identity of parties. The principal parties in G.R. No. 107751
were mortgagee Leticia P. Ligon, as petitioner, and the Iglesia
Ni Cristo, as private respondent. The IDP, as represented by
the 1971 Board of Trustees or the Tamano Group, was only
made an ancillary party in G.R. No. 107751 as intervenor.[28]
It was never originally a principal party thereto. It must be
noted that intervention is not an independent action, but is
merely collateral, accessory, or ancillary to the principal
action. It is just an interlocutory proceeding dependent on or
subsidiary to the case between the original parties.[29]
Indeed, the IDP-Tamano Group cannot be considered a
principal party in G.R. No. 107751 for purposes of applying
the principle of res judicata since the contrary goes against
the true import of the action of intervention as a mere
subsidiary proceeding without an independent life apart
from the principal action as well as the intrinsic character of
the intervenor as a mere subordinate party in the main case
whose right may be said to be only in aid of the right of the
original party.[30] It is only in the present case, actually,
where the IDP-Tamano Group became a principal party, as
petitioner, with the Iglesia Ni Cristo, as private respondent.
Clearly, there is no identity of parties in both cases.
In this connection, although it is true that Civil Case No. Q-90-
6937, which gave rise to G.R. No. 107751, was entitled,
Iglesia Ni Kristo, Plaintiff v. Islamic Directorate of the
Philippines, Defendant,[31] the IDP can not be considered
13
essentially a formal party thereto for the simple reason that
it was not duly represented by a legitimate Board of Trustees
in that case. As a necessary consequence, Civil Case No. Q-
90-6937, a case for Specific Performance with Damages, a
mere action in personam, did not become final and
executory insofar as the true IDP is concerned since
petitioner corporation, for want of legitimate representation,
was effectively deprived of its day in court in said case. Res
inter alios judicatae nullum aliis praejudicium faciunt.
Matters adjudged in a cause do not prejudice those who
were not parties to it.[32] Elsewise put, no person (natural or
juridical) shall be affected by a proceeding to which he is a
stranger.[33]
Granting arguendo, that IDP may be considered a principal
party in Ligon, res judicata as a bar by former judgment will
still not set in on the ground that the cause of action in the
two cases are different. The cause of action in G.R. No.
107751 is the surrender of the owners duplicate copy of the
transfer certificates of title to the rightful possessor thereof,
whereas the cause of action in the present case is the validity
of the Carpizo Group-INC Deed of Absolute Sale.
Res Judicata in the form of conclusiveness of judgment
cannot likewise apply for the reason that any mention at all
in Ligon as to the validity of the disputed Carpizo Board-INC
sale may only be deemed incidental to the resolution of the
primary issue posed in said case which is: Who between
Ligon and INC has the better right of possession over the
owners duplicate copy of the TCTs covering the IDP
property? G.R. No. 107751 cannot be considered
determinative and conclusive on the matter of the validity of
the sale for this particular issue was not the principal thrust
of Ligon. To rule otherwise would be to cause grave and
irreparable injustice to IDP which never gave its consent to
the sale, thru a legitimate Board of Trustees.
In any case, while it is true that the principle of res judicata is
a fundamental component of our judicial system, it should be
disregarded if its rigid application would involve the sacrifice
of justice to technicality.[34]
The main question though in this petition is: Did the Court of
Appeals commit reversible error in setting aside that portion
of the SECs Decision in SEC Case No. 4012 which declared the

sale of two (2) parcels of land in Quezon City between the
IDP-Carpizo Group and private respondent INC null and void?
We rule in the affirmative.
There can be no question as to the authority of the SEC to
pass upon the issue as to who among the different
contending groups is the legitimate Board of Trustees of the
IDP since this is a matter properly falling within the original
and exclusive jurisdiction of the SEC by virtue of Sections 3
and 5(c) of Presidential Decree No. 902-A:
Section 3. The Commission shall have absolute jurisdiction,
supervision and control over all corporations, partnerships or
associations, who are the grantees of primary franchises
and/or a license or permit issued by the government to
operate in the Philippines xxx xxx.
xxxxxxxxx
Section 5. In addition to the regulatory and adjudicative
functions of the Securities and Exchange Commission over
corporations, partnerships and other forms of associations
registered with it as expressly granted under existing laws
and decrees, it shall have original and exclusive jurisdiction to
hear and decide cases involving:
xxxxxxxxx
c) Controversies in the selection or appointment of directors,
trustees, officers, or managers of such corporations,
partnerships or associations. x x x.
If the SEC can declare who is the legitimate IDP Board, then
by parity of reasoning, it can also declare who is not the
legitimate IDP Board. This is precisely what the SEC did in SEC
Case No. 4012 when it adjudged the election of the Carpizo
Group to the IDP Board of Trustees to be null and void.[35]
By this ruling, the SEC in effect made the unequivocal finding
that the IDP-Carpizo Group is a bogus Board of Trustees.
Consequently, the Carpizo Group is bereft of any authority
whatsoever to bind IDP in any kind of transaction including
the sale or disposition of IDP property.
It must be noted that SEC Case No. 4012 is not the first case
wherein the SEC had the opportunity to pass upon the status
of the Carpizo Group. As far back as October 3, 1986, the
SEC, in Case No. 2687,[36] in a suit between the Carpizo
Group and the Abbas Group, already declared the election of
the Carpizo Group (as well as the Abbas Group) to the IDP
Board as null and void for being violative of the Articles of
Incorporation.[37] Nothing thus becomes more settled than
that the IDP-Carpizo Group with whom private respondent
INC contracted is a fake Board.
Premises considered, all acts carried out by the Carpizo
Board, particularly the sale of the Tandang Sora property,
allegedly in the name of the IDP, have to be struck down for
having been done without the consent of the IDP thru a
legitimate Board of Trustees. Article 1318 of the New Civil
Code lays down the essential requisites of contracts:
There is no contract unless the following requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.
All these elements must be present to constitute a valid
contract. For, where even one is absent, the contract is void.
As succinctly put by Tolentino, consent is essential for the
existence of a contract, and where it is wanting, the contract
is non-existent.[38] In this case, the IDP, owner of the subject
parcels of land, never gave its consent, thru a legitimate
Board of Trustees, to the disputed Deed of Absolute Sale
executed in favor of INC. This is, therefore, a case not only of
vitiated consent, but one where consent on the part of one
of the supposed contracting parties is totally wanting.
Ineluctably, the subject sale is void and produces no effect
whatsoever.
The Carpizo Group-INC sale is further deemed null and void
ab initio because of the Carpizo Groups failure to comply
with Section 40 of the Corporation Code pertaining to the
disposition of all or substantially all assets of the corporation:
14
Sec. 40. Sale or other disposition of assets. - Subject to the
provisions of existing laws on illegal combinations and
monopolies, a corporation may, by a majority vote of its
board of directors or trustees, sell, lease, exchange,
mortgage, pledge or otherwise dispose of all or substantially
all of its property and assets, including its goodwill, upon
terms and conditions and for such consideration, which may
be money, stocks, bonds or other instruments for the
payment of money or other property or consideration, as its
board of directors or trustees may deem expedient, when
authorized by the vote of the stockholders representing at
least two-thirds (2/3) of the outstanding capital stock; or in
case of non-stock corporation, by the vote of at least two-
thirds (2/3) of the members, in a stockholders or members
meeting duly called for the purpose. Written notice of the
proposed action and of the time and place of the meeting
shall be addressed to each stockholder or member at his
place of residence as shown on the books of the corporation
and deposited to the addressee in the post office with
postage prepaid, or served personally: Provided, That any
dissenting stockholder may exercise his appraisal right under
the conditions provided in this Code.
A sale or other disposition shall be deemed to cover
substantially all the corporate property and assets if thereby
the corporation would be rendered incapable of continuing
the business or accomplishing the purpose for which it was
incorporated.
x x x x x x x x x.
The Tandang Sora property, it appears from the records,
constitutes the only property of the IDP. Hence, its sale to a
third-party is a sale or disposition of all the corporate
property and assets of IDP falling squarely within the
contemplation of the foregoing section. For the sale to be
valid, the majority vote of the legitimate Board of Trustees,
concurred in by the vote of at least 2/3 of the bona fide
members of the corporation should have been obtained.
These twin requirements were not met as the Carpizo Group
which voted to sell the Tandang Sora property was a fake
Board of Trustees, and those whose names and signatures
were affixed by the Carpizo Group together with the sham
Board Resolution authorizing the negotiation for the sale
were, from all indications, not bona fide members of the IDP

as they were made to appear to be. Apparently, there are
only fifteen (15) official members of the petitioner
corporation including the eight (8) members of the Board of
Trustees.[39]
All told, the disputed Deed of Absolute Sale executed by the
fake Carpizo Board and private respondent INC was
intrinsically void ab initio.
Private respondent INC nevertheless questions the authority
of the SEC to nullify the sale for being made outside of its
jurisdiction, the same not being an intra-corporate dispute.
The resolution of the question as to whether or not the SEC
had jurisdiction to declare the subject sale null and void is
rendered moot and academic by the inherent nullity of the
highly dubious sale due to lack of consent of the IDP, owner
of the subject property. No end of substantial justice will be
served if we reverse the SECs conclusion on the matter, and
remand the case to the regular courts for further litigation
over an issue which is already determinable based on what
we have in the records.
It is unfortunate that private respondent INC opposed the
motion for intervention filed by the 1971 Board of Trustees
in Civil Case No. Q-90-6937, a case for Specific Performance
with Damages between INC and the Carpizo Group on the
subject Deed of Absolute Sale. The legitimate IDP Board
could have been granted ample opportunity before the
regional trial court to shed light on the true status of the
Carpizo Board and settled the matter as to the validity of the
sale then and there. But INC, wanting to acquire the property
at all costs and threatened by the participation of the
legitimate IDP Board in the civil suit, argued for the denial of
the motion averring, inter alia, that the issue sought to be
litigated by the movant is intra-corporate in nature and
outside the jurisdiction of the regional trial court.[40] As a
result, the motion for intervention was denied. When the
Decision in SEC Case No. 4012, came out nullifying the sale,
INC came forward, this time, quibbling over the issue that it
is the regional trial court, and not the SEC, which has
jurisdiction to rule on the validity of the sale. INC is here
trifling with the courts. We cannot put a premium on this
clever legal maneuverings of private respondent which, if
countenanced, would result in a failure of justice.
Furthermore, the Court observed that the INC bought the
questioned property from the Carpizo Group without even
seeing the owners duplicate copy of the titles covering the
property. This is very strange considering that the subject lot
is a large piece of real property in Quezon City worth
millions, and that under the Torrens System of Registration,
the minimum requirement for one to be a good faith buyer
for value is that the vendee at least sees the owners
duplicate copy of the title and relies upon the same.[41] The
private respondent presumably knowledgeable on the
aforesaid working of the Torrens System, did not take heed
of this and nevertheless went through with the sale with
undue haste. The unexplained eagerness of INC to buy this
valuable piece of land in Quezon City without even being
presented with the owners copy of the titles casts very
serious doubt on the rightfulness of its position as vendee in
the transaction.
WHEREFORE, the petition is GRANTED. The Decision of the
public respondent Court of Appeals dated October 28, 1994
in CA-G.R. SP No. 33295 is SET ASIDE. The Decision of the
Securities and Exchange Commission dated July 5, 1993 in
SEC Case No. 4012 is REINSTATED. The Register of Deeds of
Quezon City is hereby ordered to cancel the registration of
the Deed of Absolute Sale in the name of respondent Iglesia
Ni Cristo, if one has already been made. If new titles have
been issued in the name of Iglesia Ni Cristo, the register of
Deeds is hereby ordered to cancel the same, and issue new
ones in the name of petitioner Islamic Directorate of the
Philippines. Petitioner corporation is ordered to return to
private respondent whatever amount has been initially paid
by INC as consideration for the property with legal interest, if
the same was actually received by IDP. Otherwise, INC may
run after Engineer Farouk Carpizo and his group for the
amount of money paid.
SO ORDERED.
[G.R. No. 145982. July 3, 2003] FRANK N. LIU, deceased,
substituted by his surviving spouse Diana Liu, and children,
namely: Walter, Milton, Frank, Jr., Henry and Jockson, all
surnamed Liu, Rebecca Liu Shui and Pearl Liu Rodriguez,
petitioners, vs. ALFREDO LOY, JR., TERESITA A. LOY and
ESTATE OF JOSE VAO, respondents.
15
CARPIO, J.:
The Case
This is a petition for review on certiorari of the Decision[1]
dated 13 June 2000 and the Resolution dated 14 November
2002 of the Court of Appeals which affirmed the Decision[2]
of the Regional Trial Court, Branch 14, Cebu City. The Court
of Appeals agreed with the trial court that the sales by the
late Teodoro Vao to respondents Alfredo Loy, Jr. and Teresita
A. Loy of Lot Nos. 5 and 6, respectively, were valid. The Court
of Appeals also agreed with the trial court that the unilateral
extrajudicial rescission by the late Teodoro Vao of the
contract to sell involving five lots, including Lot Nos. 5 and 6,
between him and Benito Liu (predecessor-in-interest of Frank
Liu) was valid.
The Facts
On 13 January 1950, Teodoro Vao, as attorney-in-fact of Jose
Vao, sold seven lots of the Banilad Estate located in Cebu City
to Benito Liu and Cirilo Pangalo.[3] Teodoro Vao dealt with
Frank Liu, the brother of Benito Liu, in the sale of the lots to
Benito Liu and Cirilo Pangalo. The lots sold to Benito Liu were
Lot Nos. 5, 6, 13, 14, and 15 of Block 12 for a total price of
P4,900. Benito Liu gave a down payment of P1,000,
undertaking to pay the balance of P3,900 in monthly
installments of P100 beginning at the end of January 1950.
The lots sold to Cirilo Pangalo were Lot Nos. 14 and 15 of
Block 11 for a total price of P1,967.50. Cirilo Pangalo gave
P400 as down payment, undertaking to pay the balance of
P1,567.50 in monthly installments of P400 beginning at the
end of January 1950. Meanwhile, Jose Vao passed away.
Benito Liu subsequently paid installments totaling P2,900,
leaving a balance of P1,000.[4] Apparently, Benito Liu
stopped further payments because Teodoro Vao admitted his
inability to transfer the lot titles to Benito Liu. Later, in a
letter[5] dated 16 October 1954, Teodoro Vao informed
Frank Liu[6] that the Supreme Court had already declared

valid the will of his father Jose Vao. Thus, Teodoro Vao could
transfer the titles to the buyers names upon payment of the
balance of the purchase price.
When Frank Liu failed to reply, Teodoro Vao sent him
another letter,[7] dated 1 January 1955, reminding him of his
outstanding balance. It appears that it was only after nine
years that Frank Liu responded through a letter,[8] dated 25
January 1964. In the letter, Frank Liu informed Teodoro Vao
that he was ready to pay the balance of the purchase price of
the seven lots. He requested for the execution of a deed of
sale of the lots in his name and the delivery of the titles to
him.
On 22 April 1966, Benito Liu sold to Frank Liu the five lots
(Lot Nos. 5, 6, 13, 14 and 15 of Block 12) which Benito Liu
purchased from Teodoro Vao.[9] Frank Liu assumed the
balance of P1,000 for the five lots. Cirilo Pangalo likewise
sold to Frank Liu the two lots (Lot Nos. 14 and 15 of Block 11)
that Pangalo purchased from Teodoro Vao. Frank Liu likewise
assumed the balance of P417 for the two lots.
On 21 March 1968, Frank Liu reiterated in a letter[10] his
request for Teodoro Vao to execute the deed of sale covering
the seven lots so he could secure the corresponding
certificates of title in his name. He also requested for the
construction of the subdivision roads pursuant to the original
contract. In the letter, Frank Liu referred to another letter,
dated 25 June 1966, which he allegedly sent to Teodoro Vao.
According to Frank Liu, he enclosed PBC Check No. D-782290
dated 6 May 1966 for P1,417, which is the total balance of
the accounts of Benito Liu and Cirilo Pangalo on the seven
lots. However, Frank Liu did not offer in evidence the letter
or the check. Frank Liu sent two other letters,[11] dated 7
June 1968 and 29 July 1968, to Teodoro Vao reiterating his
request for the execution of the deed of sale in his favor but
to no avail.
On 19 August 1968, Teodoro Vao sold Lot No. 6 to
respondent Teresita Loy for P3,930.[12] The Register of
Deeds of Cebu City entered this sale in the Daybook on 24
February 1969.[13]
On 2 December 1968, Frank Liu filed a complaint against
Teodoro Vao for specific performance, execution of deed of
absolute sale, issuance of certificates of title and
construction of subdivision roads, before the Court of First
Instance of Davao. The case was docketed as Civil Case No.
6300.[14]
On 19 December 1968, Frank Liu filed with the Register of
Deeds of Cebu City a notice of lis pendens on the seven lots
due to the pendency of Civil Case No. 6300.[15] However, the
Register of Deeds denied the registration of the lis pendens
on the ground that the property is under administration and
said claim must be filed in court.[16]
On 16 December 1969, Teodoro Vao sold Lot No. 5 to
respondent Alfredo Loy for P3,910.[17] The Register of Deeds
of Cebu City entered this sale in the Daybook on 16 January
1970.[18]
On 3 October 1970, the Court of First Instance of Davao, on
motion of Teodoro Vao, dismissed Civil Case No. 6300 on the
ground that Frank Liu should have filed the claim with the
probate court.[19] Thus, on 17 February 1972, Frank Liu filed
before the probate court a claim against the Estate of Jose
Vao for Specific Performance, Execution of Deed of Absolute
Sale, Issuance of Certificate of Title, and Construction of
Subdivision Roads.[20]
During the proceedings, Teodoro Vao died. His widow,
Milagros Vao, succeeded as administratrix of the Estate of
Jose Vao.
On 24 February 1976, the probate court approved the claim
of Frank Liu. On 5 March 1976, Milagros Vao executed a deed
of conveyance covering the seven lots in favor of Frank Liu, in
compliance with the probate courts order.[21] The deed of
conveyance included Lot Nos. 5 and 6, the same lots Teodoro
16
Vao sold respectively to Alfredo Loy, Jr. on 16 December
1969 and to Teresita Loy on 19 August 1968.
On 19 March 1976, the probate court, upon an ex-parte
motion filed by Teresita Loy, issued an Order[22] approving
the 16 August 1968 sale by Teodoro Vao of Lot No. 6 in her
favor. Likewise, upon an ex-parte motion filed by Alfredo Loy,
Jr., the probate court issued on 23 March 1976 an Order[23]
approving the 16 December 1969 sale of Lot No. 5 by
Teodoro Vao in his favor.
On 10 May 1976, the Register of Deeds of Cebu City
cancelled TCT No. 44204 in the name of the Estate of Jose
Vao covering Lot No. 5 and issued a new title, TCT No. 64522,
in the name of Alfredo Loy, Jr. and Perfeccion V. Loy.[24]
Likewise, on the same date, the Register of Deeds cancelled
TCT No. 44205 in the name of the Estate of Jose Vao covering
Lot No. 6, and issued TCT No. 64523 in the name of Teresita
A. Loy.[25]
On 3 June 1976, Milagros Vao, as administratrix of the estate,
filed a motion for reconsideration of the Orders of the
probate court dated 19 and 23 March 1976. She contended
that she already complied with the probate courts Order
dated 24 February 1976 to execute a deed of sale covering
the seven lots, including Lot Nos. 5 and 6, in favor of Frank
Liu. She also stated that no one notified her of the motion of
the Loys, and if the Loys or the court notified her, she would
have objected to the sale of the same lots to the Loys.
On 4 June 1976, Frank Liu filed a complaint for reconveyance
or annulment of title of Lot Nos. 5 and 6. Frank Liu filed the
case in the Regional Trial Court of Cebu City, Branch 14,
which docketed it as Civil Case No. R-15342.
On 5 August 1978, the probate court denied the motion for
reconsideration of Milagros Vao on the ground that the
conflicting claims regarding the ownership of Lot Nos. 5 and
6 were already under litigation in Civil Case No. R-15342.

On 8 April 1991, the Regional Trial Court of Cebu City (trial
court), Branch 14, rendered judgment against Frank Liu as
follows:
WHEREFORE, judgment is hereby rendered:
(1) Dismissing the complaint at bar; and
(2) Confirming the unilateral extrajudicial rescission of the
contract Exhibit A by the late Teodoro Vao, conditioned upon
the refund by the Estate of Jose Vao of one-half (1/2) of what
the plaintiff had paid under that contract.
The counterclaims by the defendants Alfredo A. Loy, Jr. and
Teresita A. Loy and by the defendant Estate of Jose Vao, not
having been substantiated, are hereby denied.
Without special pronouncement as to costs.
SO ORDERED.[26]
Frank Liu appealed to the Court of Appeals, which affirmed in
toto the decision of the trial court. Frank Liu[27] filed a
motion for reconsideration but the Court of Appeals denied
the same.
Hence, the instant petition.
The Trial Courts Ruling
The trial court held that the contract between Teodoro Vao
and Benito Liu was a contract to sell. Since title to Lot Nos. 5
and 6 never passed to Benito Liu due to non-payment of the
balance of the purchase price, ownership of the lots
remained with the vendor. Therefore, the trial court ruled
that the subsequent sales to Alfredo Loy, Jr. and Teresita Loy
of Lot Nos. 5 and 6, respectively, were valid.
The trial court viewed the letter of Teodoro Vao dated 1
January 1995 addressed to Frank Liu as a unilateral
extrajudicial rescission of the contract to sell. The trial court
17
upheld the unilateral rescission subject to refund by the attorneys fees. Besides, the Court of Appeals held that where
Estate of Jose Vao of one-half (1/2) of what Frank Liu paid there is no basis to award moral damages, there is also no
under the contract. basis to award attorneys fees.
The trial court ruled that Teodoro Vao, as administrator of The Issues
the Estate of Jose Vao and as sole heir of Jose Vao, acted
both as principal and as agent when he sold the lots to Petitioners[28] raise the following issues:[29]
Alfredo Loy, Jr. and Teresita Loy. The probate court
1. Whether prior approval of the probate court is necessary
subsequently approved the sales. The trial court also found
to validate the sale of Lot Nos. 5 and 6 to Loys;
that Alfredo Loy, Jr. and Teresita Loy were purchasers in
good faith.
2. Whether the Loys can be considered buyers and
registrants in good faith despite the notice of lis pendens;
The Court of Appeals Ruling
3. Whether Frank Liu has a superior right over Lot Nos. 5 and
In affirming in toto the trial courts decision, the appellate
6;
court found no evidence of fraud or ill-motive on the part of
Alfredo Loy, Jr. and Teresita Loy. The Court of Appeals cited
4. Whether the Court of Appeals erred in not passing upon
the rule that the law always presumes good faith such that
the trial courts declaration that the extra-judicial rescission
any person who seeks to be awarded damages due to the
by Teodoro Vao of the sale in favor of Frank Liu is valid;
acts of another has the burden of proving that the latter
acted in bad faith or ill-motive. 5.Whether petitioners are entitled to moral damages and
attorneys fees.
The Court of Appeals also held that the sales to Alfredo Loy,
Jr. and Teresita Loy of Lot Nos. 5 and 6, respectively, were The Courts Ruling
valid despite lack of prior approval by the probate court. The
Court of Appeals declared that Teodoro Vao sold the lots in The petition is meritorious.
his capacity as heir of Jose Vao. The appellate court ruled
that an heir has a right to dispose of the decedents property, Whether there was a valid cancellation of the contract to sell
even if the same is under administration, because the
There was no valid cancellation of the contract to sell
hereditary property is deemed transmitted to the heir
because there was no written notice of the cancellation to
without interruption from the moment of the death of the
Benito Liu or Frank Liu. There was even no implied
decedent.
cancellation of the contract to sell. The trial court merely
The Court of Appeals held that there is no basis for the claim viewed the alleged unilateral extrajudicial rescission from the
of moral damages and attorneys fees. The appellate court letter of Teodoro Vao, dated 1 January 1955, addressed to
found that Frank Liu failed to prove that he suffered mental Frank Liu, stating that:
anguish due to the actuations of the Loys. The Court of
Two months, I believe, is ample for the allowance of delays
Appeals likewise disallowed the award of attorneys fees. The
caused by your (sic) either too busy, or having been some
fact alone that a party was compelled to litigate and incur
place else, or for consultations. These are the only reasons I
expenses to protect his claim does not justify an award of
can think of that could have caused the delay in your answer,

unless you do not think an answer is necessary at all, as you
are not the party concerned in the matter.
I shall therefor (sic) appreciate it very much, if you will write
me within ten days from receipt of this letter, or enterprete
(sic) your silence as my mistake in having written to the
wrong party, and therefor (sic) proceed to write Misters: B.
Liu and C. Pangalo.[30] (Emphasis supplied)
Obviously, we cannot construe this letter as a unilateral
extrajudicial rescission of the contract to sell. As clearly
stated in the letter, the only action that Teodoro Vao would
take if Frank Liu did not reply was that Teodoro Vao would
write directly to Benito Liu and Cirilo Pangalo. The letter does
not mention anything about rescinding or cancelling the
contract to sell.
Although the law allows the extra-judicial cancellation of a
contract to sell upon failure of one party to comply with his
obligation, notice of such cancellation must still be given to
the party who is at fault.[31] The notice of cancellation to the
other party is one of the requirements for a valid cancellation
of a contract to sell, aside from the existence of a lawful
cause. Even the case cited by the trial court emphasizes the
importance of such notice:
Of course, it must be understood that the act of a party in
treating a contract as cancelled or resolved on account of
infractions by the other contracting party must be made
known to the other and is always provisional, being ever
subject to scrutiny and review by the proper court. If the
other party denies that rescission is justified, it is free to
resort to judicial action in its own behalf, and bring the
matter to court. Then, should the court, after due hearing,
decide that the resolution of the contract was not warranted,
the responsible party will be sentenced to damages; in the
contrary case, the resolution will be affirmed, and the
consequent indemnity awarded to the party prejudiced.[32]
(Emphasis supplied)
The fact that Teodoro Vao advised Frank Liu to file his claim
with the probate court is certainly not the conduct of one
who supposedly unilaterally rescinded the contract with
Frank Liu.[33]
In this case, there was prior delay or default by the seller. As
admitted by Teodoro Vao, he could not deliver the titles
because of a case questioning the authenticity of the will of
his father. In a letter[34] to Frank Liu dated 16 October 1954,
Teodoro Vao stated:
Some time last May, if I remember correctly, you offered to
settle the whole balance of your account if I can have the
Titles transferred immediately in your brothers name, and to
that of Mr. Pangalos. I cannot blame you if you were
disappointed then, to know that I could not have the titles
transferred, even should you have paid in full. (Emphasis
supplied)
In the same letter of 16 October 1954, Teodoro Vao informed
Frank Liu that the titles were ready for transfer, thus:
However, last June 30, of this year, the Supreme Court,
unanimously concurred in the reversal of the decision of the
Court of First Instance, as regard the legality of the Will of my
father. Now that the Will of my Father has been declared
Legal, my opponents have lost their personality in the case,
and with it their power to harass me in court. Also, sometime
in the middle of July, also this year, the Supreme Court again
declared that all the sales I have made of the properties of
my Father, were Legal, and that I should be empowered to
have the Titles transferred in the buyers names, should they
have paid in full. A few have already received their Titles. And
yours can be had too in two days time from the time you
have paid in full.
Nevertheless, the subsequent approval by the probate court
of the sale of Lot Nos. 5 and 6 to Frank Liu rendered moot
any question on the continuing validity of the contract to sell.
18
Whether the lis pendens in the Davao case served as notice
to the Loys
The lis pendens in the Davao case did not serve as notice to
the Loys. The Register of Deeds of Cebu City denied
registration of the lis pendens on 19 December 1968.[35]
Frank Liu did not appeal to the Land Registration
Commission[36] to keep alive the lis pendens. Republic Act
No. 1151,[37] which took effect 17 June 1954, provides:
SEC. 4. Reference of doubtful matters to Commissioner of
Land Registration. When the Register of Deeds is in doubt
with regard to the proper step to be taken or memorandum
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 Register of Deeds
with reference to any such matter, the question shall be
submitted to the Commissioner of Land Registration either
upon the certification of the Register of Deeds, stating the
question upon which he is in doubt, or upon the suggestion
in writing by the party in interest; and thereupon the
Commissioner, after consideration of the matter shown by
the records certified to him, and in case of registered lands,
after notice to the parties and hearing, shall enter an order
prescribing the step to be taken or memorandum to be
made. His decision in such cases shall be conclusive and
binding upon all Registers of Deeds: Provided, however, That
when a party in interest disagrees with a ruling or resolution
of the Commissioner and the issue involves a question of law,
said decision may be appealed to the Supreme Court within
thirty days from and after receipt of the notice thereof.
(Emphasis supplied)
Frank Lius failure to appeal[38] the denial of the registration
rendered the lis pendens ineffective. The Court of First
Instance of Davao City eventually dismissed Frank Lius
complaint on 3 October 1970. Whether the registration by
the Loys of their contracts of sale made them the first
registrants in good faith to defeat prior buyers

The registration by the Loys of their contracts of sale did not
defeat the right of prior buyers because the person who
signed the Loys contracts was not the registered owner. The
registered owner of Lot Nos. 5 and 6 was the Estate of Jose
Vao. Teodoro Vao was the seller in the contract of sale with
Alfredo Loy, Jr. The Estate of Jose Vao was the seller in the
contract of sale with Teresita Loy. Teodoro Vao signed both
contracts of sale. The rule is well-settled that one who buys
from a person who is not the registered owner is not a
purchaser in good faith.[39] As held in Toledo-Banaga v.
Court of Appeals:[40]
To repeat, at the time of the sale, the person from whom
petitioner Tan bought the property is neither the registered
owner nor was the former authorized by the latter to sell the
same. She knew she was not dealing with the registered
owner or a representative of the latter. One who buys
property with full knowledge of the flaws and defects in the
title of his vendor is enough proof of his bad faith and cannot
claim that he acquired title in good faith as against the owner
or of an interest therein. When she nonetheless proceeded
to buy the lot, petitioner Tan gambled on the result of
litigation. She is bound by the outcome of her indifference
with no one to blame except herself if she looses her claim as
against one who has a superior right or interest over the
property. x x x.
The Loys were under notice to inquire why the land was not
registered in the name of the person who executed the
contracts of sale. They were under notice that the lots
belonged to the Estate of Jose Vao and any sale of the lots
required court approval. Any disposition would be subject to
the claims of creditors of the estate who filed claims before
the probate court.[41]
The contracts of the Loys did not convey ownership of the
lots to them as against third persons. The contracts were
binding only on the seller, Teodoro Vao. The contracts of the
Loys would become binding against third persons only upon
approval of the sale by the probate court and registration
19
with the Register of Deeds. Registration of the contracts administratrix, who had already signed the deed of sale to
without court approval would be ineffective to bind third Frank Liu as directed by the same probate court, objected to
persons, especially creditors of the estate. Otherwise, this the sale of the same lots to the Loys. Thus, as found by the
will open the door to fraud on creditors of the estate. trial court:
Whether the probate courts ex-parte On June 3, 1976, Milagros H. Vao moved for the
reconsideration of the Order issued by Judge Ramolete on
approval of the contracts of the Loys was valid March 19, 1976 and March 23, 1976, contending that she
had not been personally served with copies of the motions
Section 8, Rule 89 of the 1964 Rules of Court[42] specifically
presented to the Court by Alfredo Loy, Jr. and by Teresita Loy
requires notice to all interested parties in any application for
seeking the approval of the sales of the lots in their favor, as
court approval to convey property contracted by the
well as the Orders that were issued by the Court pursuant
decedent in his lifetime. Thus:
thereto; that the Court in its Order of February 24, 1976 had
ordered her (Milagros H. Vao), to execute a deed of absolute
SECTION 8. When court may authorize conveyance of realty
sale in favor of the plaintiff, which sale had been approved by
which deceased contracted to convey. Notice. Effect of deed.
the Court; that she had not known of the sale of Lots 5 and 6
Where the deceased was in his lifetime under contract,
to any other person except to the plaintiff; that the sale of
binding in law, to deed real property, or an interest therein,
the two lots in favor of plaintiff was made earlier, when there
the court having jurisdiction of the estate may, on
was yet no litigation with the Bureau of Internal Revenue,
application for that purpose, authorize the executor or
while those in favor of the defendant Loys were made when
administrator to convey such property according to such
there was already a prohibition by the Court against any sale
contract, or with such modifications as are agreed upon by
thereof; that the sales in favor of the Loys were made
the parties and approved by the court; and if the contract is
without Court authority; and that if the approval of the sales
to convey real property to the executor or administrator, the
had not been obtained ex-parte she would have informed
clerk of the court shall execute the deed. The deed executed
the Court of the complication arising therefrom, and she
by such executor, administrator, or clerk of court shall be as
would not have executed the sale in favor of plaintiff, and
effectual to convey the property as if executed by the
she would have asked the Court to decide first as to who had
deceased in his lifetime; but no such conveyance shall be
preference over said lots.[43]
authorized until notice of the application for that purpose
has been given personally or by mail to all persons
The failure to notify the administratrix and other interested
interested, and such further notice has been given, by
persons rendered the sale to the Loys void. As explained by
publication or otherwise, as the court deems proper; nor if
Justice J.B.L. Reyes in De Jesus v. De Jesus:[44]
the assets in the hands of the executor or administrator will
thereby be reduced so as to prevent a creditor from receiving Section 9, Rule 90, however, provides that authority can be
his full debt or diminish his dividend. (Rule 89, 1964 Rules of given by the probate court to the administrator to convey
Court) (Emphasis supplied) property held in trust by the deceased to the beneficiaries of
the trust only after notice given as required in the last
Despite the clear requirement of Section 8 of Rule 89, the
preceding section; i.e., that no such conveyance shall be
Loys did not notify the administratrix of the motion and
authorized until notice of the application for that purpose
hearing to approve the sale of the lots to them. The
has been given personally or by mail to all persons

interested, and such further notice has been given, by
publication or otherwise, as the court deems proper (sec. 8,
Rule 90). This rule makes it mandatory that notice be served
on the heirs and other interested persons of the application
for approval of any conveyance of property held in trust by
the deceased, and where no such notice is given, the order
authorizing the conveyance, as well as the conveyance itself,
is completely void. (Emphasis supplied)
In this case, the administratrix, the wife of the deceased
Teodoro Vao, was not notified of the motion and hearing to
approve the sale of the lots to the Loys. Frank Liu did not also
receive any notice, although he obviously was an interested
party. The issuance of new titles to the Loys on 10 May 1976
by the Registry of Deeds did not vest title to the Loys because
the conveyance itself was completely void. The
consequences for the failure to notify the administratrix and
other interested parties must be borne by the Loys.
Necessity of court approval of sales
Indisputably, an heir can sell his interest in the estate of the
decedent, or even his interest in specific properties of the
estate. However, for such disposition to take effect against
third parties, the court must approve such disposition to
protect the rights of creditors of the estate. What the
deceased can transfer to his heirs is only the net estate, that
is, the gross estate less the liabilities. As held in Baun v. Heirs
of Baun:[45]
The heir legally succeeds the deceased, from whom he
derives his right and title, but only after the liquidation of the
estate, the payment of the debts of the same, and the
adjudication of the residue of the estate of the deceased;
and in the meantime the only person in charge by law to
attend to all claims against the estate of the deceased debtor
is the executor or administrator appointed by the court.
In Opulencia v. Court of Appeals,[46] an heir agreed to
convey in a contract to sell her share in the estate then under
probate settlement. In an action for specific performance
filed by the buyers, the seller-heir resisted on the ground
that there was no approval of the contract by the probate
court. The Court ruled that the contract to sell was binding
between the parties, but subject to the outcome of the
testate proceedings. The Court declared:
x x x Consequently, although the Contract to Sell was
perfected between the petitioner (seller-heir) and private
respondents (buyers) during the pendency of the probate
proceedings, the consummation of the sale or the transfer of
ownership over the parcel of land to the private respondents
is subject to the full payment of the purchase price and to
the termination and outcome of the testate proceedings. x x
x Indeed, it is settled that the sale made by an heir of his
share in an inheritance, subject to the pending
administration, in no wise stands in the way of such
administration. (Emphasis supplied)
In Alfredo Loys case, his seller executed the contract of sale
after the death of the registered owner Jose Vao. The seller
was Teodoro Vao who sold the lot in his capacity as sole heir
of the deceased Jose Vao. Thus, Opulencia applies to the sale
of the lot to Alfredo Loy, Jr., which means that the contract
of sale was binding between Teodoro Vao and Alfredo Loy,
Jr., but subject to the outcome of the probate proceedings.
In Frank Lius case, as successor-in-interest of Benito Liu, his
seller was Jose Vao, who during his lifetime executed the
contract to sell through an attorney-in-fact, Teodoro Vao.
This is a disposition of property contracted by the decedent
during his lifetime. Section 8 of Rule 89 specifically governs
this sale:
SECTION 8. When court may authorize conveyance of realty
which deceased contracted to convey. Notice. Effect of deed.
Where the deceased was in his lifetime under contract,
binding in law, to deed real property, or an interest therein,
20
the court having jurisdiction of the estate may, on
application for that purpose, authorize the executor or
administrator to convey such property according to such
contract, or with such modifications as are agreed upon by
the parties and approved by the court; x x x
Thus, Frank Liu applied to the probate court for the grant of
authority to the administratrix to convey the lots in
accordance with the contract made by the decedent Jose Vao
during his lifetime. The probate court approved the
application.
In Teresita Loys case, her seller was the Estate of Jose Vao.
Teodoro Vao executed the contract of sale in his capacity as
administrator of the Estate of Jose Vao, the registered owner
of the lots. The Court has held that a sale of estate property
made by an administrator without court authority is void and
does not confer on the purchaser a title that is available
against a succeeding administrator.[47]
Manotok Realty, Inc. v. Court of Appeals[48] emphasizes the
need for court approval in the sale by an administrator of
estate property. The Court held in Manotok Realty:
We also find that the appellate court committed an error of
law when it held that the sale of the lot in question did not
need the approval of the probate court.
Although the Rules of Court do not specifically state that the
sale of an immovable property belonging to an estate of a
decedent, in a special proceeding, should be made with the
approval of the court, this authority is necessarily included in
its capacity as a probate court.
An administrator under the circumstances of this case cannot
enjoy blanket authority to dispose of real estate as he
pleases, especially where he ignores specific directives to
execute proper documents and get court approval for the
sales validity.

Section 91 of Act No. 496 (Land Registration Act) specifically
requires court approval for any sale of registered land by an
executor or administrator, thus:
SEC. 91. Except in case of a will devising the land to an
executor to his own use or upon some trust or giving to the
executor power to sell, no sale or transfer of registered land
shall be made by an executor or by an administrator in the
course of administration for the payment of debts or for any
other purpose, except in pursuance of an order of a court of
competent jurisdiction obtained as provided by law.
(Emphasis supplied)
Similarly, Section 88 of Presidential Decree No. 1529
(Property Registration Decree) provides:
SEC. 88. Dealings by administrator subject to court approval.
After a memorandum of the will, if any, and order allowing
the same, and letters testamentary or letters of
administration have been entered upon the certificate of title
as hereinabove provided, the executor or administrator may
alienate or encumber registered land belonging to the estate,
or any interest therein, upon approval of the court obtained
as provided by the Rules of Court. (Emphasis supplied)
Clearly, both the law and jurisprudence expressly require
court approval before any sale of estate property by an
executor or administrator can take effect.
Moreover, when the Loys filed in March 1976 their ex-parte
motions for approval of their contracts of sale, there was
already a prior order of the probate court dated 24 February
1976 approving the sale of Lot Nos. 5 and 6 to Frank Liu. In
fact, the administratrix had signed the deed of sale in favor of
Frank Liu on 5 March 1976 pursuant to the court approval.
This deed of sale was notarized on 5 March 1976, which
transferred ownership of Lot Nos. 5 and 6 to Frank Liu on the
same date.[49]
Thus, when the probate court approved the contracts of the
Loys on 19 and 23 March 1976, the probate court had
already lost jurisdiction over Lot Nos. 5 and 6 because the
lots no longer formed part of the Estate of Jose Vao.
In Dolar v. Sundiam,[50] an heir sold parcels of land that
were part of the estate of the decedent. The probate court
approved the sale. Thereafter, the probate court authorized
the administrator to sell again the same parcels of land to
another person. The Court ruled that the probate court had
already lost jurisdiction to authorize the further sale of the
parcels of land to another person because such property no
longer formed part of the estate of the decedent. The Court
declared:
In our opinion, where, as in this case, a piece of property
which originally is a part of the estate of a deceased person is
sold by an heir of the deceased having a valid claim thereto,
and said piece of property is, by mistake, subsequently
inventoried or considered part of the deceaseds estate
subject to settlement, and, thereafter, with the authority and
approval of the probate court, it sold once more to another
person, a receiver of the property so sold may, during the
pendency of a motion to set aside the second sale, be
appointed by the court when in its sound judgment the grant
of such temporary relief is reasonably necessary to secure
and protect the rights of its real owner against any danger of
loss or material injury to him arising from the use and
enjoyment thereof by another who manifestly cannot
acquire any right of dominion thereon because the approving
surrogate court had already lost jurisdiction to authorize the
further sale of such property. (Emphasis supplied)
Similarly, in this case, the Loys cannot acquire any right of
dominion over Lot Nos. 5 and 6 because the probate court
had already lost jurisdiction to authorize the second sale of
the same lots. Moreover, the probate courts approval of the
sale to the Loys was completely void due to the failure to
notify the administratrix of the motion and hearing on the
sale.
21
Whether the Loys were in good faith when they built on the
Lots.
The Civil Code describes a possessor in good faith as follows:
Art. 526. He is deemed a possessor in good faith who is not
aware that there exists in his title or mode of acquisition any
flaw which invalidates it.
He is deemed a possessor in bad faith who possesses in any
case contrary to the foregoing.
Mistake upon a doubtful or difficult question of law may be
the basis of good faith.
Art. 1127. The good faith of the possessor consists in the
reasonable belief that the person from whom he received
the thing was the owner thereof, and could transmit his
ownership.
In Duran v. Intermediate Appellate Court,[51] the Court
explained possession in good faith in this manner:
Guided by previous decisions of this Court, good faith
consists in the possessors belief that the person from whom
he received the thing was the owner of the same and could
convey his title (Arriola vs. Gomez de la Serna, 14 Phil. 627).
Good faith, while it is always presumed in the absence of
proof to the contrary, requires a well-founded belief that the
person from whom title was received was himself the owner
of the land, with the right to convey it (Santiago vs. Cruz, 19
Phil. 148). There is good faith where there is an honest
intention to abstain from taking unconscientious advantage
from another (Fule vs. Legare, 7 SCRA 351).
The Loys were not in good faith when they built on the lots
because they knew that they bought from someone who was
not the registered owner. The registered owner on the TCTs
of the lots was the Estate of Jose Vao, clearly indicating that
the sale required probate court approval. Teodoro Vao did
not show any court approval to the Loys when they

purchased the lots because there was none. To repeat, any
one who buys from a person who is not the registered owner
is not a purchaser in good faith.[52] If the Loys built on the
lots before the court approval, then they took the risk.
Contract to sell versus contract of sale
A prior contract to sell made by the decedent prevails over
the subsequent contract of sale made by the administrator
without probate court approval. The administrator cannot
unilaterally cancel a contract to sell made by the decedent in
his lifetime.[53] Any cancellation must observe all legal
requisites, like written notice of cancellation based on lawful
cause.[54]
It is immaterial if the prior contract is a mere contract to sell
and does not immediately convey ownership.[55] If it is valid,
then it binds the estate to convey the property in accordance
with Section 8 of Rule 89 upon full payment of the
consideration.
Frank Lius contract to sell became valid and effective upon its
execution.[56] The seller, Jose Vao, was then alive and thus
there was no need for court approval for the immediate
effectivity of the contract to sell. In contrast, the execution of
the contracts of sale of the Loys took place after the death of
the registered owner of the lots. The law requires court
approval for the effectivity of the Loys contracts of sale
against third parties. The probate court did not validly give
this approval since it failed to notify all interested parties of
the Loys motion for court approval of the sale. Besides, the
probate court had lost jurisdiction over the lots after it
approved the earlier sale to Frank Liu. Clearly, Frank Lius
contract to sell prevails over the Loys contracts of sale.
Whether petitioners are entitled to award of moral damages
and attorneys fees.
The Court upholds the ruling of the trial and appellate courts
that petitioners are not entitled to moral damages. Moral
damages should not enrich a complainant at the expense of
the defendant.[57]
Likewise, as found by the trial court and the appellate court,
there is no basis to award attorneys fees. The policy of the
law is to put no premium on the right to litigate.[58] The
court may award attorneys fees only in the instances
mentioned in Article 2208 of the Civil Code. The award of
attorneys fees is the exception rather than the rule.[59] None
of the instances mentioned in Article 2208 apply to this case.
Conclusion
Since the Loys have no contract of sale validly approved by
the probate court, while Frank Liu has a contract of sale
approved by the probate court in accordance with Section 8
of Rule 89, Lot Nos. 5 and 6 belong to Frank Liu. The Estate of
Jose Vao should reimburse the Loys their payments on Lot
Nos. 5 and 6, with annual interest at 6% from 4 June 1976,
the date of filing of the complaint, until finality of this
decision, and 12% thereafter until full payment.[60]
WHEREFORE, the Decision of the Court of Appeals is SET
ASIDE and a new one is RENDERED:
1. Declaring null and void the deeds of sale of Lot Nos. 5 and
6 executed by Teodoro Vao in favor of Alfredo Loy, Jr. and
Teresita Loy, respectively.
2.Ordering the Register of Deeds of Cebu City to cancel TCT
Nos. 64522 and 64523 and to issue a new one in the name of
petitioner Frank N. Liu;
3. Ordering the Estate of Jose Vao to reimburse to
respondent Loys the amounts paid on Lot Nos. 5 and 6, with
interest at 6% per annum from 4 June 1976 until finality of
this decision, and 12% per annum thereafter until full
payment.
SO ORDERED.
22
G.R. No. 147029 February 27, 2004
SPOUSES LEONARDO P. DIMACULANGAN and LUZ
DIMACULANGAN, SPOUSES NORBERTO M. VILLALUNA and
MILAGROS VILLALUNA, ROSAURO K. HERNANDEZ, SPOUSES
FLORENTINO C. REYES, JR. and LOLITA REYES, petitioners,
vs. VIRGINIA AQUINO ROMASANTA, ROSALINDA A.
BALAGTAS, GLORIA A. SANTOS, REBECCA A. LEDESAMA,
VALENTINA A. INOCENTES, ROMAN AQUINO, RODOLFO
AQUINO and VIOLETA A. FOJAS, substituted by ROYAL
MOLUCCAN REALTY HOLDINGS, INC., respondents.
CARPIO-MORALES, J.:
The present petition for review on certiorari seeks to set
aside and nullify the January 31, 2001 decision of the Court
of Appeals in CA-GRCV. No. 58048.
The antecedents of the case culled from the records are as
follows:
On November 11, 1954, Roman Aquino, owner of a parcel of
land located in San Mateo, Norzagaray, Bulacan, containing
75 hectares, 51 ares and 12 centares and registered in his
name under Original Certificate of Title No. 6 issued by the
Register of Deeds of Meycauayan, Bulacan, together with his
wife Valentina Bernardo Aquino executed a Deed of Absolute
Sale covering the land in favor of the spouses Juan and
Esperanza Fabella (spouses Fabella or the Fabellas) in
consideration of P17,500.00. The real agreement of the
parties, however, was one of mortgage to secure the
payment of a loan extended by the Fabellas in favor of the
Aquinos.
By virtue of the Deed of Absolute Sale, Juan Fabella was able
to transfer the title of the land to his name, under Transfer
Certificate of Title (TCT) No. 15770.lawphi1.nêt
Juan Fabella later sold the land to the siblings Saturnino,
Domingo, Raymundo and Rosie D. Liwanag (Liwanag group)
in consideration of P40,000.00. TCT No. 15770 was thus
cancelled and TCT No. 17592 was in its stead issued in the
name of the Liwanag group.
On September 9, 1956, Valentina, on her behalf and in her
capacity as administratrix of the estate of her deceased

husband Roman Aquino, filed before the then Court of First
Instance of Bulacan a complaint against the Fabellas for
reformation of the Deed of Absolute Sale to Deed of
Mortgage, cancellation of TCT Nos. 15770 and 17592, and
damages, which complaint was docketed as Civil Case No.
1376-M. Valentina lost no time in causing the annotation of a
Notice of Lis Pendens on the Liwanag group’s TCT No. 17592
at the local Registry of Deeds which recorded it as follows:
Entry No. 36645;
Kind: Notice of Lis Pendens;
Executed in favor of: Valentina Bernardo Vda. de Aquino;
Conditions: A complaint has been filed in Court (Civil Case
No.
1376, Court of First Instance of Bulacan), affecting the
parcel of land herein described and now pending;
Date of the Instrument: Oct. 9, 1956;
Date of Inscription: Oct. 9, 1956 at 9:40 a.m.
xxx1
The Liwanag group moved to intervene in Civil Case No.
1376-M which was granted by the trial court on March 4,
1961.
After Valentina rested her case in court, the defendants
Fabellas, instead of presenting evidence, filed a
Manifestation dated July 17, 1968, the pertinent portion of
which reads:
2. x x x x
3. That however, in fairness to the plaintiff, herein
defendants confirm plaintiffs testimony to the effect, among
others, that the true intention and real agreement between
her and herein defendants with respect to the property in
litigation has always been one of mortgage to secure the
payment of the original consolidated loan of P16,500.00
pesos extended by the defendants ESPERANZA VDA. DE
FABELLA to the plaintiff and her deceased husband ROMAN
AQUINO, but not a sale of said property to defendant JUAN
FABELLA;
4. x x x x
5. That with plaintiffs case already rested and on the basis of
the foregoing manifestation and confession of judgment,
herein defendants respectfully submit this case for decision.
x x x.2 (Emphasis and underscoring supplied)
The Liwanag group subsequently filed on November 21, 1968
a Manifestation stating that the "confession of judgment
[contained in the partly quoted Manifestation of the
Fabellas] appears to have been executed under oath by
defendants alone and does not show whether the same was
prepared and filed with the assistance and/or consent of
their counsel as the latter has no signature thereon," hence,
its [Liwanag group] filing of a Manifestation "in order to
insure whether the confession of judgment was prepared
and filed [by the Fabellas] knowing the full meaning of the
same, to afford the intervenor [Liwanag group] opportunity
to amend [its] pleadings in accordance therewith; and to
determine whether [the Fabellas] may be proceeded against
for violation of the provisions of the Revised Penal Code."3
On October 31, 1971, Valentina filed a "Motion to Render
Judgment," which was set for hearing on February 22, 1972
on which latter date, however, the parties failed to appear
despite notice, prompting the trial court4 to dismiss the
case.5
Both Valentina and the Liwanag group moved to reconsider
the dismissal order.
In the meantime or on August 24, 1972, Valentina died.6
By Order of August 31, 1972, the trial court reconsidered the
February 22, 1972 order dismissing the case.
By Order of October 31, 1972, the trial court, under a new
presiding judge,7 noted that during the hearing of the case
on October 26, 1972, "only Camalayan, for the office of K. V.
Faylona, appeared and manifested that he was submitting
23
the case for the intervenor without submission of any
evidence inasmuch as the defendant Esperanza Vda. de
Fabella had confessed judgment as of July 2, 1968 in favor of
intervenor Liwanag in the amount of P15,000.00." The trial
court concluded its order by stating that "if no request to
submit memorandum is received, within ten days from
receipt hereof, the case will be deemed submitted for
decision."
About four years later or on October 18, 1976, the trial court,
under a new presiding judge,8 issued an order calling the
parties to an annual conference and setting the same to
November 13, 1976. The parties, however, failed to appear
at said scheduled conference of November 13, 1976, drawing
the trial court to, on even date, consider them as lacking
interest "to proceed with this case."9 The trial court
thereupon ordered the case dismissed "for failure to
prosecute." Before the court adjourned its session, the
counsel of Valentina arrived and verbally moved to
reconsider the order of dismissal. The trial court thereafter
issued the following order:
After the case was ordered dismissed for failure of the
parties and their counsels to appear and before the Court
adjourned its session, Atty. Arsenio L. Cabrera came in to
move for a reconsideration of the order of dismissal.
Considering this has been pending for twenty (20) years and
the Court is now busy trying other cases, the Court believes
that the movant should better be given ten (10) days from
today to submit his written motion for reconsideration
stating therein the history of the case and the reason why
the order of dismissal should be set aside. A copy of such
motion should be furnished the defendants who shall have
five (5) days from receipt of a copy thereof to reply thereto,
if they so desire and thereafter, the motion for
reconsideration shall be submitted for resolution.[10]
(Emphasis supplied)
It appears, however, that no written motion for
reconsideration was ever filed by Valentina’s counsel.
In the meantime, the Liwanag group offered to sell the
property to herein petitioners spouses Leonardo and Luz
Dimaculangan, et al. Upon noting the notice of lis pendens
annotated on the Liwanag group’s TCT No. 17592, petitioners

imposed the condition that such annotation must first be
cancelled before they consider the offer.11
Lawyer-real estate broker Florentino Reyes, Jr., one of herein
petitioners, thereafter helped 12 the Liwanag group secure a
certification13 dated January 27, 1977, issued by one "Spl.
Deputy Clerk" Serafin R. Santos, who appears to have been a
court interpreter of the Court of First Instance of Bulacan,
Branch I, reading:
This is to certify that the Order issued by this Court on
November 13, 1976 [dismissing] Civil Case No. 1376-M,
entitled VALENTINA BERNARDO DE AQUINO, Versus
ESPERANZA VDA. DE FABELLA. et al., SATURNINO LIWANAG,
et al., Intervenors, is already final and executory.
Issued upon request of Rosie D. Liwanag of 1167 Antipolo
cor. J.A. Santos, Tondo, Manila for all legal intents and
purposes. (Emphasis and underscoring supplied)
On the basis of the above-mentioned certification, the
following entry was annotated on TCT No. T-17592:
Entry No. 3629 (M). Kind: Order of the Court of First Instance
of Bulacan, Branch I, dismissing Civil Case No. 1376-M,
VALENTINA BERNARDO DE AQUINO versus ESPERANZA VDA.
DE FABELLA, Defendants, for failure to prosecute, which
Order has become final and executory as per Certificate of
the Deputy Clerk of Court dated January 27, 1977, copies of
which are on file with this Office. Date of Instrument:
November 13, 1976; Date of Inscription: January 27, 1977 at
10:40 a.m.14
On June 1, 1978, the Registry of Deeds of Meycauayan,
Bulacan issued the following certification:15
This is to certify that according to the records available in this
Office, the original of Transfer Certificate of Title No. T-17592
(T-2942 (m), Bulacan Registry, (Meycauayan Branch), is
complete and intact; and that there are no liens and/or
encumbrance appearing at the time of the issuance of this
certificate.
Issued at the request of Mr. Domingo Liwanag. of Tondo
Manila, who paid the certification fee of P3.00 under O.R.
No. 0923146, issued on June 1, 1978. (Emphasis and
underscoring supplied)
On August 10, 1978, the Liwanag group executed a Deed of
Absolute Sale16 covering the land in favor of petitioners.
TCT No. T-17592 was thus cancelled on August 11, 1978 and
TCT No. T-1702-P was in its stead issued in the name of
petitioners.17
On February 16, 1983, the Aquino children (respondents-
heirs of Valentina) filed a motion to set aside the order of
dismissal issued on November 13, 1976 (for failure of the
parties to appear for the annual conference) at Branch 8 of
the now Regional Trial Court where the case was eventually
lodged, anchored on the following grounds:
xxx
7. That, the apparent reason as to why Atty. Arsenio M.
Cabrera, counsel for plaintiff Valentina B. Vda. de Aquino,
was not so able to file his promised Motion to Set Aside
Order of Dismissal, was that plaintiff had already died as
evidenced by her Certificate of Death, certifying that she died
on AUGUST 24, 1972, EXHIBIT "A" of Motion for Substitution
of plaintiff, and for which reasons, she was unable to appear
anymore on November 13, 1976 when so called for
conference by then Honorable Fidel L. Purisima, on which
date the above-entitled case was ordered dismissed for
failure to prosecute;
8. That, plaintiffs now most respectfully submit that the then
plaintiff Valentina B. de Aquino had already prosecuted her
case, duly submitted and closed her case and it was then for
the defendants and intervenors to present their evidence,
which by reason of technicalities of the law and dilatory
tactics resorted to by said defendants and intervenors, the
above-entitled case had up to the present remained pending;
9. That, it is further respectfully submitted that Sec. 6 of Rule
22 of the Rules of Court refers to annual conference on
pending cases, and with due respect to this Honorable Court,
the said conference is a matter of an administrative ways and
means in order to justifiable termination of all cases pending
before courts of justice and does not become a ground for
24
dismissal of any case on the basis of parties’ and counsels’
non-appearance in said conference. x x x"18 (Emphasis and
underscoring supplied)
The motion was denied by Order of June 7, 1983.
Respondents-heirs of Valentina filed a Motion for
Reconsideration of said June 7, 1983 Order which was, by
Order of August 26, 1986, by again a new presiding judge,19
granted on the ground that respondents-heirs of Valentina
did not fail to prosecute the case.20 Said the trial court:
First for reconsideration is the issue of whether the dismissal
done in open court by then Judge Purisima has ever become
final. Nowhere in the record does it show that the motion for
its reconsideration interposed immediately after the
dismissal has been resolved. It is true that counsel for the
plaintiffs failed to file within the extended time the formal
motion as required by then Judge Purisima in his order, but
after a scrutinizing second look at the circumstances, the
court now believes that such failure should not be held to
have resulted in the cancellation or withdrawal of the
standing verbal motion. A careful perusal of said order
reveals that it was not meant to disregard the oral motion
but to afford the then presiding judge, who was still
unfamiliar with the progress of the case, the opportunity to
be better apprised of its history and development. Proof
enough that the judge needed a briefing is the fact that he
dismissed the case "for failure to prosecute" when the
voluminous record shows that there had already been
several incidents, and in fact, trial, particularly the
presentation of evidence by the plaintiff, and the confession
of judgment by the defendant, had taken place before he
became a judge of this court. In fact, the record reveals that
the plaintiff has submitted an unusual bulk of documentary
evidence consisting of thirty-nine (39) exhibits ("A" to "Z" to
"AA-1").21 (Emphasis and underscoring supplied)
On the merits of respondents-heirs of Valentina’s Motion for
Reconsideration of the November 13, 1976 Order of
dismissal, the trial court held:
And now to the merits of the oft-repeated verbal motion for
reconsideration. With respect to the question of whether it is
in order for the substituting plaintiffs to suffer dismissal of

their case by the mere tardiness of their counsel at the
conference set on November 13, 1976, it should be
emphasized that this conference was called under Section 6
of Rule 22 of the Rules of Court, which reads:
Sec. 6. Annual Conference on pending cases. -At the end of
one year from the day the trial proper has commenced, and
every year thereafter, if the trial has not been terminated,
the judge shall call the parties and their counsel to a
conference to devise ways and means of terminating the
trial. A statement of the result of the conference, signed by
the judge and counsel, shall be attached to the record,
showing the reason why the trial has not terminated,
number and names of witnesses yet to be presented by the
parties; any facts stipulated during the conference; the
efforts exerted to settle the case and similar matters. Copy of
the statement shall be furnished the Supreme Court and the
Secretary of Justice within ten (10) days after such
conference.22
The trial court thus disposed:
Premises considered,
1) The order of June 7, 1983 denying the motion to set aside
is hereby reconsidered in the sense that the order dated
November 13, 1976 is deemed not to have become final;
2) The said order of dismissal of November 13, 1976 is
hereby reconsidered, since factually, the plaintiffs did not fail
to prosecute; and
3) The parties are hereby enjoined to move in the premises
within fifteen days from receipt hereof for whatever further
proceedings that may now follow in accordance with the
rules 23
On October 4, 1988, the trial court, under still another
judge,24 finding that the contract between the Aquinos and
the Fabellas was one of equitable mortgage, rendered
judgment in favor of respondents-heirs of Valentina, the
dispositive portion of which reads:
WHEREFORE, the Court hereby renders judgment as follows:
1) Declaring the Contract of Deed of Sale dated November
11, 1954, executed by the spouses Roman Aquino and
Valentina Bernardo in favor of Juan Fabella over the property
covered by Original Certificate of Title No. 6, Registry of
Deeds of Bulacan, as an equitable mortgage;
2) Ordering the Register of Deeds of Malolos, Bulacan, to
annul and cancel Transfer Certificate of Title No. 15770 in the
name of Juan Fabella, and Transfer Certificate of Title No.
17592 in the names of Saturnino D. Liwanag, Domingo D.
Liwanag, Raymundo D. Liwanag, and Rosie D. Liwanag, over
the property subject matter of this case, and to issue the
corresponding title thereon in the names of Spouses Roman
Aquino and Valentina Bernardo;
3) Ordering the spouses Roman Aquino and Valentina
Bernardo to pay the amount of P40,000.00 to the intervenors
as reimbursement of the purchase price of the land subject
thereof, with legal interest of 12% per annum from October
1956 until paid, the amount of P12,000.00 as moral and
exemplary damages, and P15,000.00 as attorney’s fees, plus
expenses of litigation.25 (Emphasis and underscoring
supplied)
There appears to have been no appeal taken from the above-
said judgment.
Respondents-heirs of Valentina, alleging that when their
counsel sought to execute the judgment, he discovered that
the Liwanag group had sold the land to petitioners, filed on
August 14, 1992 before the RTC of Bulacan a complaint,26
docketed as Civil Case No. 534-M-92, for revocation and
annulment of title and reconveyance, against petitioners and
the Liwanag group, they alleging that they (said respondents-
heirs of Valentina) have been in open, continuous possession
and occupation of the land, and that the defendants were in
bad faith.
In their Answer with compulsory counterclaim,27 petitioners
denied that respondents-heirs of Valentina have been in
open, continuous possession and occupation of the land,
they contending that they were the ones who exercised
ownership thereover after they bought it (on August 10,
1978) and have been paying real estate taxes thereon; and
that they are innocent purchasers for value of the land
25
because at the time of the purchase, there were no liens
and/or encumbrances annotated on the title.
Replying,28 respondents-heirs of Valentina denied the
allegations of petitioners, they contending that payment of
real estate taxes does not accord petitioners better right to
the land; that petitioners were not in good faith and
purchasers for value considering that the land has been
under litigation for more than 30 years; and that the January
27, 1977 certification issued by the "Spl. Deputy Clerk" that
the November 13, 1976 dismissal order of the trial court had
become final and executory should have necessarily put
petitioners on guard and prompted them to determine the
actual status of the land.
Claiming res judicata, the Liwanag group filed a motion to
dismiss29 the case, inviting attention to a portion of the
decision rendered in Civil Case No. 1376-M reading:
xxxx
The resolution of this Court to decide this case is not based
merely on the desire to give the parties their just due and put
an end to a protracted litigation. Rather, it finds support
under the assumption that the confession of judgment made
by the defendant and concurred in by the plaintiffs and the
intervenors with their corresponding rights and obligations is
in the form of a compromise agreement.
xxxx
Defendants (Esperanza Vda. de Fabella, et al.) admit the
claim of plaintiffs that the contested document was in fact a
mortgage and not a sale, and his liability to the intervenors
(Saturnino D. Liwanag, et al.). Plaintiffs, in exchange for
having the title of the property reverted to them, will assume
the liabilities of defendants to intervenors and also waived
their claim for damages. On reimbursement of the purchase
price, damages and attorney’s fees without presenting
evidences, but will return the title to the plaintiffs. Although
no direct confrontation or meeting was held among the
parties, it is evident and apparent that there is an agreement
to settle the dispute in court. A confession of judgment
which is intended to put an end to a litigation is in the nature
of a compromise. (Republic vs. Gacuy, L-21416, Dec. 31,

1965). CONTRACT OR AGREEMENT, THEREFORE, IS
PRESUMED TO HAVE BEEN ENTERED INTO. (Underlining in
the original)30
In respondents-heirs of Valentina’s opposition31 to the
Liwanag group’s motion to dismiss, they contended that
there was no identity of cause of action between Civil Case
No. 1376-M and Civil Case No. 534-M-92 as the former
involved a reformation of contract while the latter involved
the cancellation of title of petitioners due to fraud and bad
faith; and that the Liwanag group should not be given the
"courtesy" of a liberal interpretation of the Rules since they
are the ones to be blamed for this second action as they, in
bad faith, sold the land.
Petitioners also filed their own motion to dismiss,32 alleging
that they are innocent purchasers for value, it having sufficed
that a certificate of title on its face is free from all liens and
encumbrances, valid and on file with the Register of Deeds at
the time of purchase; and that they had been paying the real
property taxes thereon under color of a valid title for more
than ten (10) years and, therefore, they are deemed to have
acquired the land by ordinary prescription, hence the
complaint in Civil Case No. 534-M-92 had long prescribed
under Article 1134 of the Civil Code.
Respondents-heirs of Valentina later filed a motion for
admission33 of, to which was attached, their amended
complaint,34 alleging that, inter alia., the certification issued
by the "Spl. Deputy Clerk" was illegal and improper and had
no legal force and effect as he is not a lawyer and no entry of
such order appeared in the judgment book; that both
petitioners and the Liwanag group concocted the strategy of
procuring said certification for they fully knew that at the
time of the issuance of the dismissal order, the case was
already submitted for decision and there was a pending
verbal motion for reconsideration of the same order; and
that at the time of purchase by petitioners, the land was still
under litigation and the sale should, therefore, have borne
the approval of the trial court.
The Amended Complaint was admitted.
Answering the Amended Complaint,35 petitioners raised
prescription and invoked Section 48 of Presidential Decree
No. 1529 (PD1529) which provides that a certificate of title
shall not be subject to collateral attack and cannot be
altered, modified or cancelled except in a direct proceeding
in accordance with law.
As defined in the trial court’s Pre-trial Order, the following
issues were raised:36
1. Whether or not the Order of the Court dismissing Civil
Case No. 1376-[M] for failure to prosecute, dated November
13, 1976, was ever entered in the Judgment Book pursuant
to Sec. 9 of Rule 136 of the Rules of Court:
2. Whether or not the certification issued by [Spl. Deputy
Clerk] Serafin Santos that the Order of Dismissal of Civil Case
No. 1376-[M] had become final and executory was valid;
ISSUE:
3. Whether or not the plaintiffs have been in open, adverse,
continuous possession and occupation in the concept of
owners of the property subject matter of the instant case
since the time of Roman Aquino up to the present;
ISSUE:
Whether the action already prescribed? --- NO!!!!!
4. Whether or not the defendants Dimaculangans, et al., are
buyers in good faith and for value;--- NO!!!!!
5. Whether or not moral and exemplary damages as well as
attorney’s fees may be awarded to the prevailing party.
(Underscoring supplied)
Finding petitioners to be buyers in good faith and for value,
and the cause of action for damages against the Liwanag
group to have prescribed, the trial court, by Decision37 of
June 25, 1996, dismissed the complaint "including the
counterclaims of both sets of defendants for damages and
attorney’s fees which are considered as mere natural
consequences of a legitimate litigation not tainted with
malice."
On respondents-heirs of Valentina’s motion for
reconsideration, the trial court,38 holding that "it is more in
accord with justice and equity to rule x x x [that] the action
26
taken by respondents [-heirs of Valentina] against the
Liwanag group has not yet prescribed,"39 partially
reconsidered its decision by Order of August 20, 1997.
In partially reconsidering its decision, the trial court held:
As the Court has found and still finds clear from the evidence
presented, it was the group of the sellers, the defendant
Liwanags, who defrauded the plaintiffs and apparently
misled defendant Dimaculangans. et al., as their innocent
buyers, into believing that the case against them by plaintiffs
had indeed been already terminated for good, as attested to
by the certification of the finality of the dismissal order. The
truth, however, and these defendant Dimaculangans knew
about it all along, is that they had no right to sell the
property to anyone, because the court then trying plaintiffs’
complaint against them had already declared that plaintiffs
had a better right to the property in question.40
The trial court accordingly disposed as follows:
WHEREFORE, conformably with all the foregoing, the
Decision of the Court dated June 25, 1996, is hereby partially
reconsidered and modified with the judgment ordering
defendants Saturnino D. Liwanag, Domingo D. Liwanag,
Raymundo D. Liwanag, Rosie D Liwanag. and/or their
respective lawful heirs in case of death, to pay, jointly and
severally, the herein plaintiffs the amount of P5,000,000.00
as damages[,] including actual, moral, exemplary, and
attorney’s fees.
The dismissal of the case against defendant Dimaculangans,
et al.. including the counterclaims, remains, still without
pronouncement as to costs.41 (Underscoring supplied)
Respondents-heirs of Valentina and the Liwanag group
appealed to the Court of Appeals.
During the pendency of the appeal or on February 15, 2000,
the Court of Appeals approved the sale of the rights and
interests of respondents-heirs of Valentina to Royal
Moluccan Realty Holdings, Inc. and granted the motion for
substitution of parties.

By its challenged decision,42 the Court of Appeals, finding
petitioners not to be innocent purchasers for value, modified
that of the trial court, disposing as follows:
WHEREFORE, premises considered, the Decision dated June
25, 1996 as modified by the Order dated August 20, 1997 is
further MODIFIED. Transfer Certificate of Title No. T-1702 -
P(M) issued in the names of Sps. Leonardo and Luz
Dimaculangan, Sps. Norberto and Milagros Villaluna, Rosauro
Hernandez and Sps. Florentino and Lolita Reyes, Jr.. is hereby
declared NULL and VOID, and the Register of Deeds of
Bulacan is ORDERED to issue a new Transfer Certificate of
Title to Royal Moluccan Realty Holdings, Inc.. The award of
P5,000,000.00 as damages and attorney’s fees being
excessive is likewise reduced to P50,000.00. Costs against the
LIWANAG GROUP.
Hence, the present petition by petitioners Dimaculangan et
al. raising the following issues:
A. WHETHER OR NOT THE COURT OF APPEALS RADICALLY
DEPARTED FROM JURISPRUDENCE IN HOLDING THAT
PETITIONERS ARE INNOCENT PURCHASERS FOR VALUE OF
THE SUBJECT PROPERTY[;]
B. WHETHER OR NOT THE COURT OF APPEALS ACTED
CONTRARY TO LAW AND JURISPRUDENCE IN REJECTING THE
PETITIONERS’ ARGUMENT OF PRESCRIPTION AND LACHES[;
and]
C. WHETHER OR NOT THE COURT OF APPEALS ACTED
CONTRARY TO LAW, JURISPRUDENCE AND DEVIATED FROM
ACCEPTED STANDARDS IN APPLYING THE DOCTRINE OF
CONCLUSIVENESS OF JUDGMENT TO PETITIONERS DESPITE
THEIR BEING INNOCENT PURCHASERS FOR VALUE.
In holding that petitioners were not innocent purchasers for
value, the Court of Appeals rationalized:
In the case at bar, it is undisputed that defendant-appellee
Florentino C. Reyes, Jr., one of the co-owners of the lot
subject of this case, the others being Spouses Leonardo P.
Dimaculangan x x x , was the lawyer and broker in the
negotiations for the purchase of the lot from appellees
LIWANAG GROUP. As broker and agent of the LIWANAG
GROUP and as lawyer, consultant and broker of Leonardo
Dimaculangan, et al., it cannot be doubted that Atty. Reyes
was very much aware of Civil Case No. 1376-M involving the
same land subject of the negotiations between the LIWANAG
GROUP and the DIMACULANGAN GROUP, to wit:
xxx
From the foregoing admissions of Florentino C. Reyes, Jr., it
can be inferred that he went over the records of Civil Case
No. 1376-M. Presumably, he read and went over the major
pleadings of the parties, the orders in said Civil case No.
1376-M and the transcripts and minutes of the proceedings.
And, assuming that Atty. Reyes did not go over the case
records of Civil Case No. 1376-M by reason of the November
13, 1976 Order of Dismissal, such failure or refusal to verify
the actual status of the case when such knowledge of the
dismissal order should put him to possible defects of the title
of the LIWANAGs will not make him and the rest of the
DIMACULANGAN GROUP innocent purchasers in good faith if
afterwards it turns out that such title is actually defective.
The purchasers, DIMACULANGAN GROUP, by the carry over
of the notice of lis pendens from TCT No. 15770 registered in
the name of Juan Fabella and Esperanza to the title of
LIWANAGs should have been put on guard of the legality and
validity of the title of the LIWANAGs since the case dates
back to the title of the predecessors-in-interest of the
LIWANAGs and therefore, the title of the LIWANAGs were
issued even during the pendency of Civil Case No. 1376-M.
Moreover, as lawyer and as broker of the proposed seller
and the proposed buyer, Atty. Reyes should have conducted
a thorough research and investigation of the title and rights
of LIWANAG. More so that the order of dismissal was made
under Rule 22 which is not a judgment on the merits. Well-
established is the rule that a purchaser who has knowledge
of the facts should put him into inquiry and investigation as
to possible defects of the title of the vendor and fails to make
such inquiry and investigation cannot claim that he is
purchaser in good faith. Knowledge of prior transfer of
registered property by a subsequent purchaser makes him a
purchaser in bad faith and his knowledge of such transfer
vitiates his title acquired by virtue of the later instrument of
conveyance which was registered in the Registry of
Property.43 (Citations omitted)
27
Petitioners contend that there is nothing in the testimony of
Atty. Reyes, or any other witness, to support the conclusion
of the Court of Appeals that Atty. Reyes acted as counsel for
the petitioners and/or for the Liwanag group in the
negotiations for the purchase of the land, for while he
testified that he was the only lawyer in the group, it does not
follow that he acted as lawyer in the consummation of the
sale.
Petitioners also claim that no bad faith can be imputed to
Atty. Reyes in proceeding with the sale as he was armed with
the dismissal order of Civil Case No. 1376-M and the
certification of finality thereof issued by the "Spl. Deputy
Clerk."
Invoking the ruling in Maneclang v. Baun,44 petitioners
contend that it was not incumbent upon them to go beyond
the order of dismissal, otherwise, as Maneclang held, no
order of any court can be relied upon by the parties.
In Centeno v. Court of Appeals,45 this Court ruled:
Well settled is the rule that all persons dealing with property
covered by Torrens certificate of title are not required to go
beyond what appears on the face of the title. When there is
nothing on the certificate of title to indicate any cloud or vice
in the ownership of the property, or any encumbrance
therein, the purchaser is not required to explore further 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. (Underscoring supplied)
In the present case, although at the time of purchase by
petitioners, the notice of lis pendens annotated on the
Liwanag groups title was already cancelled by a subsequent
annotation, they were put ‘on notice of a litigation involving
the land as the title of the Liwanag group bore the said
annotations as in fact they even imposed as a condition
before purchasing the property the cancellation thereof.
Even if petitioners were issued the certification, they should
have been put on guard as to the possibility of the existence
of any defect or flaw therein since it did not mention that the
judgment was entered in the book of entries of judgments as
required by the Rules of Court,46 knowledge or awareness of

which by petitioner Atty. Reyes, a member of the legal
profession, was expected. As held in Egao v. Court of
Appeals:[47]
Where a purchaser neglects to make the necessary inquiries
and closes his eyes to facts which should put a reasonable
man on his guard as to the possibility of the existence of a
defect in his vendor’s title, and relying on the belief that
there was no defect in the title of the vendor, purchases the
property without making any further investigation, he cannot
claim that he is a purchaser in good faith for value.
In ruling out prescription of respondents-heirs of Valentina’s
cause of action, the Court of Appeals declared:
As discussed earlier, the date of registration of the title to the
names of the DIMACULANGAN GROUP on August 11, 1978
cannot be the date when the ten (10) year prescription
should be reckoned because on that date, Civil Case No.
1376-M was still pending as per the Ligot-Telan Order.
Moreover, it was only on October 4, 1989 when Civil Case
No. 1376-M was finally decided by Judge Valentin Cruz in
their favor and that the instant suit was filed on August 14,
1992 or only three (3) years since then. Therefore, in view of
such fact, the present case has not yet prescribed in the
same manner that the principle of laches cannot also be
applied, for it was only when they tried to execute the final
judgment in Civil Case No. 1376-M that they discovered that
the property was already sold to the DIMACULANGAN
GROUP.
The provision therefore that an action for reconveyance of
real property resulting from fraud prescribes in four (4) years
from the discovery of fraud or that an action based on
implied constructive trust prescribes in ten (10) years cannot
be applied in the case at bar based on attendant
circumstances above stated.48 (Underscoring supplied)
Petitioners submit that the above ruling is contrary to
Section 52 of PD 1529 which reads:
SECTION 52. Constructive notice upon registration. - Every
conveyance, mortgage, lease, lien, attachment, order,
judgment, instrument or entry affecting registered land shall,
if registered, filed or entered in the office of the Register of
Deeds for 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,
Petitioners argue that if the action for reconveyance is based
on fraud, it prescribes in four (4) years from discovery
thereof, and if it is based on the existence of a constructive
trust, it prescribes in ten (10) years from the date of its
creation. In both cases, petitioners continue, discovery of
fraud and the creation of the trust are deemed to have taken
place at the time of registration, they citing Buenaventura v.
Court of Appeals [49] and Millena v. Court of Appeals. [50]
They conclude that as the instant case was filed by
respondents-heirs of Valentina on August 14, 1992 or
fourteen (14) years after the title of petitioners were
registered, the action had already prescribed. Petitioners’
thesis does not persuade.
With the annotation of lis pendens on the spouses Fabellas’
title, which annotation was subsequently carried over to the
title issued to the Liwanag group, respondents-heirs of
Valentina were assured that their rights would be protected
regardless of how many times ownership of the land is
transferred since the annotation would always be carried
over to subsequent titles.
As Civil Case No. 1376-M was terminated only in 1988,
respondents-heirs of Valentina had the right to believe that it
was only at such time that the notice of lis pendens would be
cancelled and any transfer of the subject property before
1988 would always be subject to the notice of lis pendens.
Since the cancellation of the Fabellas’ title while the litigation
remained pending did not cancel the notice of lis pendens as
it was carried over to the subsequent titles of the Liwanag
group, to consider the prescriptive period to have run from
the registration of petitioners’ title would result to manifest
injustice to respondents-heirs of Valentina. It bears emphasis
that the rules on prescription and constructive notice are
intended to prevent, not cause, injustice.
The Liwanag group’s submission in its Comment to the
petition at bar that it cannot be considered guilty of fraud in
the absence of supporting evidence; and that the trial court’s
dismissal order in Civil Case No. 1376-M, together with the
28
certification as to its finality and the records of the Register
of Deeds, led them to entertain the honest belief that it was
already free to sell the land, does not lie. For it knew that its
predecessors, the spouses Fabella, were not the owners of
the land as they were just mortgagees.
WHEREFORE, the petition is hereby DENIED.
SO ORDERED.
G.R. No. 202414 June 4, 2014
JOSEPHINE WEE, Petitioner, vs. FELICIDAD MARDO,
Respondent.
MENDOZA, J.:
This is a petition for review on certiorari under Rule 45
assailing the June 26, 2012 Decision of the Court of Appeals
(CA), which reversed and set aside the September 4, 2009
Decision of the Regional Trial Court, Branch XVIII, Tagaytay
City, Cavite (RTC), granting petitioner's "Application for
Registration of Title."
Factual and Procedural Antecedents:
Respondent Felicidad Gonzales, married to Leopoldo Mardo,
was granted a registered Free Patent No. (IV-2) 15284, dated
April 26, 1979, covering Lot No. 8348, situated in Puting
Kahoy, Silang, Cavite.
On February 1, 1993, respondent allegedly conveyed to
petitioner, Josephine Wee, through a Deed of Absolute Sale,1
a portion of Lot No. 8348 known as Lot No. 8348-B, for a
consideration of ₱250,000.00 which was fully paid.
Respondent, however, refused to vacate and turn over the
subject property claiming that the alleged sale was falsified.
On December 22, 1994, petitioner filed an Application for
Original Registration of a parcel of land located at Barangay
Putting Kahoy, Silang, Cavite, known as Lot No. 8349. Said
application was amended on September 19, 1996, this time
covering a parcel of land known as Lot 8348-B situated in
Barangay Puting Kahoy, Silang, Cavite. Petitioner claimed
that she is the owner of the said unregistered land by virtue
of a deed of absolute sale.

On September 19, 1997, respondent filed her Opposition to
the Amended Application alleging 1] that she is the true and
lawful owner of the parcel of land which is the subject of the
amended application; and 2] that petitioner’s deed of
absolute sale is surreptitious.
On October 28, 2000, respondent filed a Motion to Dismiss
the Application alleging that the land described in the
application was different from the land being claimed for
titling. The motion was, however, denied. A motion for
reconsideration and second urgent motion for
reconsideration were subsequently filed by respondent, but
both were denied by the RTC.
Thereafter, petitioner completed her presentation of
evidence and filed a formal offer which was admitted by the
RTC.
On June 10, 2003, during the pendency of the case,
respondent managed to register the land in her name under
Original Certificate of Title (OCT) No. OP-1840. Petitioner
filed a Notice of Lis Pendens with the Registry of Deeds of
Cavite on May 10, 2005 which was annotated on the title. A
"Motion for Leave to File Supplemental Pleading and to
Admit Attached Supplemental Complaint for Reconveyance"
was filed by petitioner which was denied by the RTC on the
ground that a motion for reconveyance was different from an
application for registration of title.
Consequently, respondent presented her own evidence,
through the testimony of her counsel, who testified that the
parcel of land subject of the application for registration was
the property she bought ten (10) years ago. Respondent,
however, did not state from whom she bought it. As proof of
her alleged ownership, she presented copies of tax
declarations in the absence of any deed of sale in her favor.
On September 4, 2009, the RTC rendered a Decision2
granting the application of petitioner. The dispositive portion
of said decision reads:
WHEREFORE, judgment is hereby rendered granting the
applicant, Josephine Wee, as qualified to register the subject
land in her name, and the Administrator of LRA is hereby
directed to issue the corresponding decree in her name
based on the plan and technical description of said land as
submitted by the applicant and the Register of Deeds of the
Province of Cavite to issue title in her name.
SO ORDERED.
A motion for reconsideration was filed by respondent which
was denied by the RTC. Hence, respondent appealed the
decision before the CA, which case was docketed as CA-G.R.
CV No. 96934.
On June 26, 2012, the CA handed down a Judgment3
reversing and setting aside the RTC decision. The decretal
portion of the CA decision reads:
WHEREFORE, the appeal is GRANTED. The Decision, dated
September 4, 2009, of the Regional Trial Court (Branch XVIII)
of Tagaytay City, Cavite, in LRC No. TG-647 is SET ASIDE.
Accordingly, applicant-appellee’s Application for Original
Registration of a parcel of land located at Barangay Putting
Kahoy, Silang Cavite, known as Lot No. 8349, Cad. Lot
042118-011719-D of Silang Cadastre, is hereby DENIED.
SO ORDERED.
The CA held, among others, that petitioner was not able to
comply with the requirement of possession and occupation
under Sec. 14 (1) of P.D. No. 1529. Her admission that the
subject lot was not physically turned over to her due to some
objections and oppositions to her title suggested that she
was not exercising any acts of dominion over the subject
property, an essential element in the requirement of
possession and occupation contemplated under Sec. 14 (1) of
P.D. No. 1529.
A copy of the decision was received by petitioner on July 2,
2012. On August 15, 2012, petitioner filed this subject
petition for review challenging the CA decision.
Hence, this petition.
In advocacy of her petition, petitioner assigns the following
ERRORS:
29
I.
The Court of Appeals gravely erred and ruled contrary to law
in not finding that petitioner is entitled to register the subject
land under her name. Under the peculiar circumstances of
this case, wherein petitioner’s predecessor-in-interest
unexpectedly and unjustifiably continued to be in physical
possession of the subject property after the sale thereof to
petitioner, the latter must be deemed to be in possession
and occupation thereof through her predecessor-in-interest.
Under the Public Land Act and Presidential Decree No. 1529,
the period of possession of an applicant’s predecessor-in-
interest benefits and is credited in favor of the applicant.
II.
Moreover, petitioner was denied actual possession of the
subject land by circumstances amounting to a fortuitous
event. By express provision of Sec. 48(b) of the Public Land
Act, such fortuitous event does not affect her vested right to
register the property under her name.
III.
The Court of Appeals likewise seriously erred and ruled
contrary to the law and to the evidence in not finding that
petitioner’s predecessor-in-interest, respondent Felicidad
Mardo, had possession and occupation of the subject parcel
of land under a bona fide claim of ownership since June 12,
1945, or earlier.
IV.
In view of the fact that the validity of the sale of the subject
parcel of land to petitioner in 1993 was duly established
before the trial court and affirmed by the Court of Appeals
and considering further that the registration of the said land
under respondents name was fraudulently secured, in order
to avoid multiplicity of suits and to put an end to the long
pending dispute between the parties, the Court of Appeals
should have ordered the reconveyance of the subject parcel
of land to the petitioner as its rightful owner.
ISSUE: Whether petitioner is entitled of the subject
property by virtue of the Deed of Sale?—NO!!!!

Petitioner presents the theory that she must be deemed to
have been in possession and occupation of the subject
property through respondent, her predecessor-in-interest,
who after the sale in 1993 and despite demands from her,
unexpectedly and unjustifiably continued to occupy the
property and refused to turn over physical possession to her.
Petitioner argues that it is not necessary that the person in
possession should himself be the occupant as the occupancy
can be held by another in his name.
Moreover, petitioner also seeks reconveyance of the subject
property arguing that by virtue of its fraudulent registration,
respondent became a trustee of an implied trust for her
benefit, as its real owner, having validly acquired the same
from respondent through an absolute deed of sale.
The Court’s Ruling
The petition deserves no merit.
P.D. 1529, otherwise known as Property Registration Decree,
governs the original registration proceedings of unregistered
land. The subject application for original registration was
filed pursuant to Sec. 14(1) of PD 1529, which provides the
condition necessary for registration. Thus:
SEC 14. Who may apply.—The following persons may file in
the proper Court of First Instance an application for
registration of title to land, whether personally or through
their duly authorized representatives:
(1) Those who by themselves or through their predecessors-
in-interest have been in open, continuous, exclusive and
notorious possession and occupation of alienable and
disposable lands of the public domain under a bona fide
claim of ownership since June 12, 1945, or earlier.(Emphasis
supplied)
Based on these legal parameters, applicants for registration
of title under Section 14(1) must sufficiently establish: (1)
that the subject land forms part of the disposable and
alienable lands of the public domain; (2) that the applicant
and his predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and
occupation of the same; and (3) that it is under a bona fide
claim of ownership since June 12, 1945 or earlier.4
The CA denied the application on the issue of open,
continuous, exclusive, and notorious possession and
occupation of the subject land. It was of the view that she
could not have complied with the requirement of possession
and occupation under Sec. 14 (1) of P.D. No. 1529
considering that she had admitted that it was not physically
turned over to her. As she was not in actual and physical
possession, she could not have exercised any acts of
dominion over the subject property which was essential to
the requirement of possession and occupation contemplated
under Sec. 14 (1) of P.D. No. 1529.
A more important consideration, however, is that the subject
land is already registered under OCT No. OP-1840 (Patent No.
042118-03-6111) of the Registry of Deeds of Cavite, under
the name of respondent Felicidad Gonzales.
In the case of Republic vs. Umali,5 this Court ruled that once
a patent is registered and the corresponding certificate of
title is issued, the land ceases to be part of public domain
and becomes private property over which the Director of
Lands has neither control nor jurisdiction. A public land
patent, when registered in the corresponding Register of
Deeds, is a veritable Torrens title, and becomes as
indefeasible upon the expiration of one (1) year from the
date of issuance thereof. Said title, like one issued pursuant
to a judicial decree, is subject to review within one (1) year
from the date of the issuance of the patent. This rule is
embodied in Section 103 of PD 1529, which provides that:
Section 103. Certificates of title pursuant to patents. –
Whenever public land is by the Government alienated,
granted or conveyed to any person, the same shall be
brought forthwith under the operation of this Decree. x x x
After due registration and issuance of the certificate of title,
such land shall be deemed to be registered land to all intents
and purposes under this Decree. (Emphasis supplied)
Accordingly, respondent’s registered patent in the
corresponding Registry of Deeds is a veritable Torrens title
and becomes as indefeasible as a Torrens title upon the
expiration of one (1) year from the date of its issuance.6
30
For said reason, the order of the RTC directing the
Administrator of LRA to issue a corresponding decree in
petitioner’s name is null and void. A land registration court
has no jurisdiction to order the registration of land already
decreed in the name of another in an earlier land registration
case. A second decree for the same land would be null and
void, since the principle behind the original registration is to
register a parcel of land only once.7
Verily, once a title is registered, as a consequence either of
judicial or administrative proceedings, the owner may rest
secure, without the necessity of waiting in the portals of the
court sitting in the mirador de su casa to avoid the possibility
of losing his land.8 The certificate of title cannot be defeated
by adverse, open and notorious possession. Neither can it be
defeated by prescription. As provided under Sec. 47 of PD
1529, no title to registered land in derogation of the title of
the registered owner shall be acquired by prescription or
adverse possession.
A Certificate of Title Not
Subject to Collateral Attack
Petitioner argued that the rule on indefeasibility of title does
not attach to titles secured by fraud and misrepresentation.
In this case, she alleged that the respondent fraudulently
registered the subject property under her name after she
(respondent) had already sold a portion thereof to her
(petitioner). By virtue of the deed of sale, petitioner insists
that she is considered to be the real owner of the subject
parcel of land.
The Court finds no merit in petitioner’s argument. It is settled
in this jurisdiction that the issue of the validity of title can
only be assailed in an action expressly instituted for such
purpose.9 A certificate of title cannot be attacked
collaterally. This rule is provided under Section 48 of PD 1529
which states that:
SEC. 48. Certificate not subject to collateral attack. ― A
certificate of title shall not be subject to collateral attack. It
cannot be altered, modified, or canceled except in a direct
proceeding in accordance with law. (Emphasis supplied)

In Lagrosa v. Court of Appeals,10 it was stated that it is a
well-known doctrine that the issue as to whether title was
procured by falsification or fraud as advanced by petitioner
can only be raised in an action expressly instituted for the
purpose. A Torrens title can be attacked only for fraud,
within one year after the date of the issuance of the decree
of registration. Such attack must be direct, and not by a
collateral proceeding. The title represented by the certificate
cannot be changed, altered, modified, enlarged, or
diminished in a collateral proceeding.
In this case, the petitioner is contesting the indefeasibility of
title on the ground of fraud and misrepresentation. Applying
the abovementioned doctrine, even assuming that the
petitioner’s allegations are true, the same are considered as
collateral attacks, and such must be raised in an action
expressly instituted for such purpose and in a proper
proceeding.
Thus, in Carvajal v. Court of Appeals,11 it was ruled that an
application for registration of an already titled land
constitutes a collateral attack on the existing title. The title
may be challenged only in a proceeding for that purpose, not
in an application for registration of a land already registered
in the name of another person. After one year from its
registration, the title is incontrovertible and is no longer
open to review.
Remedy of the petitioner is to file a separate proceeding
such as an action for specific performance or for
reconveyance
Petitioner further argues that considering the registration of
the said land under respondent’s name was fraudulently
secured, in order to avoid multiplicity of suits and to put an
end to the long pending dispute between the parties, the
courts below should have ordered the reconveyance of the
subject land to her as its rightful owner.
Petitioner advances the theory that by virtue of the
fraudulent registration of a subject property, respondent is a
trustee of an implied trust for her benefit, being the real
owner of the subject property, as she had validly acquired
the same from respondent through an absolute deed of sale.
Petitioner’s argument fails to persuade. The issue of
fraudulent alienation raised in the second application for
registration of the subject property is collateral attack which
should be directly raised in a separate proceeding filed for
such purpose. It cannot be entertained in this proceeding. In
several cases, the Court has ruled that an attack is indirect or
collateral when, in an action to obtain a different relief, an
attack on the judgment or proceeding is nevertheless made
as an incident thereof.12
The RTC was, thus, correct in denying petitioner’s "Motion
for Leave to File Supplemental Pleading and to Admit
Attached Supplemental Complaint For Reconveyance."
Allowing it would not have been permissible because the
application for original registration of title over a parcel of
land already registered is a collateral attack itself. It is settled
that an application for registration of a parcel of land already
covered by a Torrens title is actually a collateral attack, not
permitted under the principle of indefeasibility of a Torrens
title.13
Registration, however, does not deprive an aggrieved party
of a remedy in law. What cannot be collaterally attacked is
the certificate of title and not the title or ownership which is
represented by such certificate. Ownership is different from
a certificate of title. The fact that a person was able to secure
a title in his name did not operate to vest ownership upon
him of the subject land. Registration of a piece of land under
the Torrens System does not create or vest title, because it is
not a mode of acquiring ownership.
A certificate of title is merely an evidence of ownership or
title over the particular property described therein.1âwphi1
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
others. Its issuance in favor of a particular person does not
foreclose the possibility that the real prope1iy may be co-
owned with persons not named in the certificate, or that it
may be held in trust for another person by the registered
owner.14
The remedy of the petitioner is to file a separate proceeding
or action to protect her alleged interest. As she claimed that
she bought the subject property for value from the
31
respondent as evidenced by a deed of sale, she can file an
action for specific performance to compel the respondent to
comply with her obligation in the alleged deed of sale and/or
an action for reconveyance of the property. She can also file
an action for rescission. Needless to state, petitioner must
prove her entitlement because the respondent claims that
the sale was falsified.
Reconveyance is based on Section 55 of Act No. 496, as
amended by Act No. 3322, which states that in all cases of
registration procured by fraud the owner may pursue all his
legal and equitable remedies against the parties to such
fraud, without prejudice, however, to the rights of any
innocent holder for value of a certificate of title.15 It is an
action in personam available to a person whose property has
been wrongfully registered under the Torrens system in
another's name.16 It does not seek to set aside the decree
but, respecting it as incontrovertible and no longer open to
review, seeks to transfer or reconvey the land from the
registered owner to the rightful owner.17 Reconveyance is
always available as long as the property has not passed to an
innocent third person for value.18
WHEREFORE, the petition is hereby DENIED, without
prejudice to any remedial action by the petitioner to protect
her claimed interest.
SO ORDERED.
G.R. No. 204626 June 9, 2014
PAUL P. GABRIEL, JR., IRENEO C. CALWAG, THOMAS L.
TINGGA-AN, and the Heirs of JULIET B. PULKERA,
Petitioners, vs. CARMELING CRISOLOGO, Respondent.
MENDOZA, J.:
Assailed in this petition for review on certiorari under Rule 45
is the June 14, 2012 Decision1 of the Court of Appeals (CA)
and its November 14, 2012 Resolution2 which reversed the
April 18, 201 1 Decision3 of the Regional Trial Court, Branch
6, Baguio City (RTC), and reinstated the September 15, 2009
Decision4 of the Municipal Trial Court in Cities, Branch 1,
Baguio City (MTCC). in Civil Case No. 13209, a complaint for
recovery of possession.
The Facts

Records show that Carmeling Crisologo (Crisologo),
represented by her attorney-in-fact, Pedro Isican (Isican),
filed her complaint5 for Recovery of Possession and/or
Ownership with Damages against Juliet B. Pulkera, Paul P.
Gabriel, Ireneo C. Calwag, and Thomas L. Tingga-an
(petitioners) before the MTCC.
Crisologo alleged, among others, that she was the registered
owner of two parcels of land with a total area of
approximately 2,000 square meters, described in, and
covered by, two (2) certificates of title – Transfer Certificate
of Title (TCT)Nos. T-13935 and T-13936;that the properties
were covered by an Assessment of Real Property; that the
payments of realty taxes on the said properties were
updated; that sometime in 2006, she discovered that
petitioners unlawfully entered, occupied her properties by
stealth, by force and without her prior consent and
knowledge, and constructed their houses thereon; that upon
discovery of their illegal occupation, her daughter, Atty.
Carmelita Crisologo, and Isican personally went to the
properties and verbally demanded that petitioners vacate
the premises and remove their structures thereon; that the
petitioners begged and promised to buy the said properties
for 3,500.00 per square meter; that she gave petitioners time
to produce the said amount, but they reneged on their
promise to buy them; that petitioners refused to vacate the
subject properties despite several demands; that the
petitioners knew full well that the subject premises they
were occupying were titled properties but they insisted on
unlawfully holding the same; and that she was unlawfully
dispossessed and displaced from the subject properties due
to petitioners’ illegal occupation.
On the other hand, petitioners countered that the titles of
Crisologo were products of Civil Registration Case No. 1,
Record 211, which were declared void by the Supreme Court
in Republic v. Marcos,6 and reiterated in Republic v.
Marcos;7 that the said case was later enacted into law,
Presidential Decree (P.D.)No. 1271, entitled "An Act
Nullifying Decrees of Registration and Certificates of Title
within the Baguio Town site Reservation Case No.1, GLRO
Record No. 211, pursuant to Act No. 931, as amended, but
Considering as Valid Certain Titles of Lands that are Alienable
and Disposable Under Certain Conditions and For Other
Purposes" which took effect on December 22, 1977; that
Crisologo failed to comply with the conditions provided in
Section 1 of P.D. No. 1271 for the validation of said titles,
hence, the titles were void; that petitioners had been in
open, actual, exclusive, notorious, uninterrupted, and
continuous possession of the subject land, in good faith; and
that Crisologo was never in prior possession and had no valid
title over the subject land.8
MTCC Ruling
On September 15, 2009, the MTCC rendered a decision in
favor of Crisologo, the dispositive portion of which reads:
WHEREFORE, the Court renders JUDGMENT in favor of the
plaintiff directing the defendants, their heirs, assigns,
representatives and/or any person acting for and in their
behalves to:
a) Immediately vacate the subject properties, and to
demolish/dismantle all their houses and other structures on
the properties; should defendants refuse to comply, the
plaintiff may demolish/dismantle them at the expense of the
defendants;
b) Pay reasonable rentals of the use and occupation of the
subject properties at Php4,000.00 per month from January
2006 for each of the defendants;
c) Pay Php20, 000.00 as attorney’s fees, and
d) Costs of litigation.
SO ORDERED.
The MTCC ruled that Crisologo was the registered owner of
the subject parcels of land, who, as such, had declared these
properties for taxation purposes since 1969 and regularly
paid the realty taxes thereon. It stated that with Crisologo
being the owner, petitioners were illegally occupying the
land.
The MTCC added that petitioners could not question
Crisologo’s titles over the subject parcels of land in an
ordinary civil action for recovery of possession because such
defense was a collateral attack which was prohibited under
32
P.D. No. 1529, otherwise known as the Property Registration
Decree. Thus, it could not inquire into the intrinsic validity of
Crisologo’s titles.
Ruling of the RTC
On April 18, 2011, the RTC reversed and set aside the
decision of the MTCC. It was of the view that petitioners’
assertion of the TCTs’ invalidity was not a collateral attack. It
cited the rulings in Republic v. Marcos,9 and Republic v.
Marcos,10 which perpetually prohibited the reopening of
Civil Reservation Case No. 1, LRC Rec. No. 211, and,
therefore, the registration of parcels of lands. For said
reason, the titles of Crisologo were products of illegal
proceedings nullified by this Court. She also failed to comply
with the conditions set forth in P.D. No. 1271. Accordingly,
the titles were void and the same could not be a legal basis
for Crisologo to justify the eviction of petitioners from the
subject premises. Having been nullified, these certificates of
title ceased to be the best proof of ownership.
Ruling of the CA
On June 14, 2012, the CA rendered the assailed decision,
setting aside the RTC decision and reinstating that of the
MTCC.
The CA held that Crisologo was entitled to the possession of
the subject parcels of land. It explained that her possession
was established when she acquired the same by sale
sometime in 1967 and when the certificates of title covering
the properties were subsequently issued. It added that her
payment of realty taxes due on the said properties since
1969 further strengthened her claim of possession.
Moreover, her appointment of Isican as administrator of the
subject properties and her offer to sell the lots to the
petitioners showed that she had control over the same.
Accordingly, the CA concluded that Crisologo’s right to
remain in possession of the subject lots should be preferred
over the petitioners’ possession regardless of the actual
condition of her titles. Hence, the petitioners, who used
force in occupying her properties, should respect, restore
and not disturb her lawful possession of the subject parcels
of land.

Unsatisfied with the CA decision, the petitioners instituted
this petition anchored on the following
ASSIGNMENT OF ERRORS
(1)
THE HONORABLE COURT OFAPPEALS COMMITTED A
REVERSIBLE ERROR IN LAW WHEN IT RULED THAT
RESPONDENT HAS ACTUAL OR WAS IN PRIOR POSSESSION OF
THE LANDS INVOLVED CONTRARY TO THE EVIDENCE, THE
FACTS AND THE CIRCUMSTANCES OF THIS CASE.
(2)
THE HONORABLE COURT OFAPPEALS COMMITTED A SERIOUS
ERROR IN FINDING THAT THE PURPORTED EXECUTION AND
REGISTRATION OF THE PUBLIC INSTRUMENTS RELATIVE TO
THE SALE IN 1967 OF THE SUBJECT LANDS AND THE
SUBSEQUENT ISSUANCE OF THE TITLES IN HER NAME
ESTABLISH POSSESSION.
(3)
THE HONORABLE COURT OFAPPEALS COMMITTED A SERIOUS
ERROR IN FINDING THAT THE TAX DECLARATIONS AND
RECEIPTS IN THE NAME OF THE RESPONDENT ESTABLISH HER
POSSESSION OVER THE SUBJECT LOTS.
(4)
THE HONORABLE COURT OFAPPEALS COMMITTED A SERIOUS
ERROR IN FINDING THAT THE SUPPOSED APPOINTMENT OF
PEDRO ISICAN AS ADMINISTRATOR ESTABLISHES HER
POSSESSION OVER THE LANDS IN DISPUTE.
(5)
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
RULING THAT RESPONDENT IS THE PRESENT POSSESSOR OF
THE SUBJECT LANDS REGARDLESS OF THE ACTUAL
CONDITION OF HER TITLES, IGNORING THE PRINCIPLE OF
STARE DECISIS AND ADHERENCE TO LAW.
(6)
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT PETITIONERS DISTURBED THE POSSESSION OF
HEREIN RESPONDENT BY FORCE.
(7)
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
RULING THAT RESPONDENT’SSUPPOSED POSSESSION OVER
THE SUBJECT LOTS SHOULD BE PREFERRED DESPITE THE
NATURE OR CONDITION OF THE PROPERTY AS PART OF THE
PUBLIC DOMAIN.11
Petitioners’ position
Petitioners aver that Crisologo failed to show documentary
or testimonial evidence that she acquired the subject
properties by sale or by any other mode of acquisition from
its previous owner. Her only bases in claiming them were the
titles issued in her name, without a deed of sale.
Petitioners further argue that assuming that there was really
a sale that took place, its execution and registration cannot
establish her right of possession, whether actual or
constructive. First, the validity of the subject titles was
stricken down by Republic vs. Marcos cases and P.D. No.
1271.
Hence, the TCTs could not be sources of legal rights. Second,
Crisologo never took actual possession of the subject
properties after the alleged sale in 1967. She appointed an
administrator over the said property only in 2006.
Moreover, petitioners claim that her tax declarations and
receipts evidencing payment of taxes cannot prove her
possession or ownership over the subject properties without
proof of actual possession.
Finally, petitioners submit that there are facts and
circumstances that militate against her claim of possession.
They point out that the titles over the subject properties
have no encumbrances or annotations whatsoever; that for
more than forty (40) years, the subject lots have not been
subjected to any deed, agreement, contract, mortgage or any
other property dealings; that the said titles are not validated
up to the present as certified by the Register of Deeds of
33
Baguio City; that she presented no witnesses to prove her
intention to possess the subject lots; that the documents she
presented are not reliable because they were issued only in
2008; that no improvements were introduced by her; and
that she is guilty of laches due to her inaction to validate her
titles.
Respondent’s position
Crisologo opposes the petition mainly on technical grounds.
First, she argues that the supposed representatives of the
petitioners who filed this petition and signed the certification
on non-forum shopping have no authority to do so. Hence,
they have no standing to prosecute because they are not the
real parties in interest. Second, she claims that the
petitioners failed to furnish the CA a copy of their motion for
extension of time to file this petition for review.
The Court’s Ruling
ISSUE: Whether who between petitioners and respondent
Crisologo have a better right of possession over the subject
parcel of land?—The Court held the CRISOLOGO has a
better right of possession over the subject parcels of
land!!!!!
The only question that needs to be resolved in this petition is
– who between petitioners and respondent Crisologo have a
better right of possession over the subject parcels of land.
Both contending parties claim that they have a superior
possessory right over the disputed lands.
After a careful review of the records, the Court holds that
Crisologo has a better right of possession over the subject
parcels of land.
Accion Publiciana: its nature and purpose
Also known as accion plenaria de posesion, accion publiciana
is an ordinary civil proceeding to determine the better right
of possession of realty independently of title. It refers to an
ejectment suit filed after the expiration of one year from the
accrual of the cause of action or from the unlawful
withholding of possession of the realty.

The objective of the plaintiffs in accion publiciana is to
recover possession only, not ownership. When parties,
however, raise the issue of ownership, the court may pass
upon the issue to determine who between the parties has
the right to possess the property. This adjudication,
nonetheless, is not a final and binding determination of the
issue of ownership; it is only for the purpose of resolving the
issue of possession, where the issue of ownership is
inseparably linked to the issue of possession. The
adjudication of the issue of ownership, being provisional, is
not a bar to an action between the same parties involving
title to the property. The adjudication, in short, is not
conclusive on the issue of ownership.12
In her complaint, Crisologo prayed that she be declared in
prior actual possession of the properties in dispute and that
petitioners vacate the same and demolish their houses
therein. She alleged, among others, that she was the
registered owner of the subject parcels of land and that
petitioners unlawfully entered her properties by stealth,
force and without her prior consent and knowledge. Clearly,
she primarily wanted to recover possession of the subject
parcels of land from petitioners. Hence, the case is an accion
publiciana.
Nonetheless, the petitioners have raised the issue of
ownership in their pleadings. They mainly argue that
Crisologo’s titles on the subject properties are void and that
they have been in open, actual, exclusive, notorious,
uninterrupted and continuous possession over the subject
properties in good faith.
The nullity of the decrees of registration and certificates of
titles in Section 1 of P.D. No. 1271 is not absolute
Although Section 1 of P.D. No. 127113 invalidated decrees of
registration and certificates of title within the Baguio Town
site Reservation Case No. 1, GLRO Record No. 211, the
nullity, however, is not that sweeping. The said provision
expressly states that "all certificates of titles issued on or
before July 31, 1973shall be considered valid and the lands
covered by them shall be deemed to have been conveyed in
fee simple to the registered owners" upon 1) showing proof
that the land covered by the subject title is not within any
government, public or quasi-public reservation, forest,
military or otherwise, as certified by appropriating
government agencies; and 2) compliance by the titleholder
with the payment to the Republic of the Philippines of the
correct assessed value of the land within the required period.
In the case at bench, the records show that the subject
parcels of land were registered on August 24, 1967. The titles
are, thus, considered valid although subject to the conditions
set. But whether or not Crisologo complied with the said
conditions would not matter because, this would be a
collateral attack on her registered titles, as would be
discussed later.
At any rate, petitioners, as private individuals, are not the
proper parties to question the status of the respondent’s
registered titles. Section 6 of P.D. No. 127114 expressly
states that the "Solicitor General shall institute such actions
or suits as may be necessary to recover possession of lands
covered by all void titles not validated under this Decree."
The respondent’s certificates of title give her the better right
to possess the subject parcels of land
It is settled that a Torrens title is evidence of indefeasible
title to property in favor of the person in whose name the
title appears.1âwphi1 It is conclusive evidence with respect
to the ownership of the land described therein. It is also
settled that the titleholder is entitled to all the attributes of
ownership of the property, including possession. Thus, in
Arambulo v. Gungab,15 this Court declared that the "age-old
rule is that the person who has a Torrens title over a land is
entitled to possession thereof."16
The records show that TCT No. T-1393517 and TCT No. T-
1393618 bear the name of Carmeling P. Crisologo, as the
registered owner. Petitioners do not dispute the fact that she
has a Torrens title over the subject parcels of land.
The respondent’s Torrens certificates of title are immune
from a collateral attack.
As a holder of a Torrens certificate of title, the law protects
Crisologo from a collateral attack on the same. Section 48 of
P.D. No. 1529, otherwise known as the Property Registration
34
Decree, provides that a certificate of title cannot be the
subject of a collateral attack. Thus:
SEC. 48. Certificate not subject to collateral attack. – A
certificate of title shall not be subject to collateral attack. It
cannot be altered, modified, or canceled except in a direct
proceeding in accordance with law.
This rule has been applied in innumerable cases, one of
which was Francisco Madrid v. Spouses Mapoy,19 where it
was written:
Registration of land under the Torrens system, aside from
perfecting the title and rendering it indefeasible after the
lapse of the period allowed by law, also renders the title
immune from collateral attack. A collateral attack transpires
when, in another action to obtain a different relief and as an
incident of the present action, an attack is made against the
judgment granting the title.
This manner of attack is to be distinguished from a direct
attack against a judgment granting the title, through an
action whose main objective is to annul, set aside, or enjoin
the enforcement of such judgment if not yet implemented,
or to seek recovery if the property titled under the judgment
had been disposed of. To permit a collateral attack on
respondents-plaintiffs' title is to water down the integrity
and guaranteed legal indefeasibility of a Torrens title.
The petitioners-defendants' attack on the validity of
respondents-plaintiffs' title, by claiming that fraud attended
its acquisition, is a collateral attack on the title. It is an attack
incidental to their quest to defend their possession of the
properties in an "accion publiciana," not in a direct action
whose main objective is to impugn the validity of the
judgment granting the title. This is the attack that possession
of a Torrens Title specifically guards against; hence, we
cannot entertain, much less accord credit to, the petitioners-
defendants' claim of fraud to impugn the validity of the
respondents-plaintiffs' title to their property.
As the lawful possessor. the respondent has the right to eject
the petitioners

The Court agrees with the CA that the only question that
needs to be resolved in this suit to recover possession is who
between the parties is entitled to the physical or material
possession of the subject parcels of land. Therefore, the
foremost relevant issue that needs to be determined here is
simply possession, not ownership.
The testimonial and documentary evidence on record prove
that Crisologo has a preferred claim of possession over that
of petitioners. It cannot be denied that she bought the
subject properties from the previous owner in 1967, which
was why the transfer certificates of title were subsequently
issued in her name. Records further show that she has been
paying the realty taxes on the said properties since 1969. She
likewise appointed Isican as administrator of the disputed
lands. More importantly, there is no question that she
offered to sell to petitioners the portions of the subject
properties occupied by them. Hence, she deserves to be
respected and restored to her lawful possession as provided
in Article 539 of the New Civil Code.20
WHEREFORE, the petition is DENIED.
SO ORDERED.
G.R. No. 163551 July 18, 2011
DATU KIRAM SAMPACO, substituted by HADJI SORAYA S.
MACABANDO, Petitioner, vs. HADJI SERAD MINGCA
LANTUD, Respondent.
PERALTA, J.:
This is a petition for review on certiorari of the Court of
Appeals’ Decision dated August 15, 2003 in CA-G.R. CV No.
63801 and its Resolution dated May 13, 2004, denying
petitioner’s motion for reconsideration.
The facts, as stated by the Court of Appeals, are as follows:
On September 14, 1984, respondent Hadji Serad Mingca
Lantud, the plaintiff in the lower court, filed an action to
quiet title with damages1 with the Regional Trial Court (RTC)
of Lanao del Sur, Branch 8, Marawi City (trial court), against
petitioner Datu Kiram Sampaco (deceased), the defendant in
the lower court, who has been substituted by his heirs,
represented by Hadji Soraya Sampaco-Macabando.2
Respondent alleged in his Complaint3 that he is the owner in
fee simple of a parcel of residential lot located at Marinaut,
Marawi City, with an area of 897 square meters covered by
Original Certificate of Title (OCT) No. P-658. On August 25,
1984, petitioner Datu Kiram Sampaco, through his daughter
Soraya Sampaco-Macabando with several armed men,
forcibly and unlawfully entered his property and destroyed
the nursery buildings, cabbage seedlings and other
improvements therein worth ₱10,000.00. On August 30,
1984, Barangay Captain Hadji Hassan Abato and his
councilmen prepared and issued a decision4 in writing
stating that petitioner Datu Kiram Sampaco is the owner of
the subject parcel of land. Respondent stated that the acts of
petitioner and the said decision of the Barangay Captain may
cast a cloud over or otherwise prejudice his title. Respondent
stated that he and his predecessors-in-interest have been in
open, public and exclusive possession of the subject
property. He prayed that the acts of petitioner and the
decision of Barangay Captain Hadji Hassan Abato and his
councilmen be declared invalid, and that petitioner be
ordered to pay respondent damages in the amount of
₱10,000.00 and attorney’s fees.
In his Answer,5 defendant Datu Kiram Sampaco, petitioner
herein, denied the material allegations of the Complaint.
Petitioner asserted that he and his predecessors-in-interest
are the ones who had been in open, public, continuous, and
exclusive possession of the property in dispute. Petitioner
alleged that OCT No. P-658 was secured in violation of laws
and through fraud, deception and misrepresentation,
considering that the subject parcel of land is a residential lot
and the title issued is a free patent. Moreover, respondent
and his predecessors-in-interest had never taken actual
possession or occupied the land under litigation. On the
contrary, petitioner has all the evidence of actual possession
and ownership of permanent improvements and other plants
on the land in dispute.
Petitioner filed a counterclaim for actual and moral damages,
and attorney's fees for the unfounded complaint and prayed
for its dismissal. He also sought the cancellation of
respondent’s OCT No. P-658 and the reconveyance of the
subject parcel of land.
35
During the trial, respondent Hadji Lantud testified that he
acquired the subject lot from his grandmother, Intumo
Pagsidan, a portion thereof from his grandmother’s helper,
Totop Malacop, pursuant to a court decision after litigating
with him.6 Respondent had been residing on the lot for more
than 30 years, applied for a title thereto and was issued OCT
No. P-658.7 He paid the corresponding real estate taxes for
the land.8 He planted assorted trees and plants on the lot
like bananas, jackfruits, coconuts and others.9 He testified
that he was not aware of the alleged litigation over the lot
before Barangay Captain Hadji Hassan Abato, although he
was furnished a copy of the decision.10
On the other hand, petitioner Datu Kiram Sampaco testified
that the land under litigation is only a portion of the 1,800
square meters of land that he inherited in 1952 from his
father, Datu Sampaco Gubat.11 Since then, he had been in
adverse possession and ownership of the subject lot,
cultivating and planting trees and plants through his
caretaker Hadji Mustapha Macawadib.12 In 1962, he
mortgaged the land (1,800 square meters) with the
Development Bank of the Philippines, Ozamis branch.13 He
declared the land (1,800 square meters) for taxation
purposes14 and paid real estate taxes, and adduced in
evidence the latest Tax Receipt No. 1756386 dated
September 15, 19[9]3.15 Petitioner presented four
corroborating witnesses as regards his possession of the
subject property.
After trial on the merits, the trial court rendered a Decision
on March 31, 1999 in favor of petitioner, the dispositive
portion of which reads:
WHEREFORE, premises considered the court is of the opinion
and so holds that the preponderance of evidence is in favor
of the defendant and against the plaintiff. Judgment is
hereby rendered as follows:
1. Dismissing plaintiff’s complaint for lack of merit;
2. Declaring Original Certificate of Title No. P-658 (Exh. A) null
and void and of no legal effect;
3. Declaring the defendant the absolute or true owner and
possessor of the land in dispute; and

4. Ordering the plaintiff to pay the defendant the sum of
₱10,000.00 for attorney’s fees plus ₱500.00 per
appearance.16
The trial court held that the issuance of respondent’s title,
OCT No. P-658, was tainted with fraud and irregularities and
the title is, therefore, spurious; hence, it is null and void, and
without any probative value. The finding of fraud was based
on: (1) the Certification issued by Datu Samra Andam,
A/Adm. Assistant II, Natural Resources District No. XII-3,
Marawi City, stating that the data contained in respondent’s
title were verified and had no record in the said office; (2)
the said Certification was not refuted or rebutted by
respondent; (3) while free patents are normally issued for
agricultural lands, respondent’s title is a free patent title
issued over a residential land as the lot is described in the
Complaint as a residential lot; and (4) Yusoph Lumampa, an
employee of the local Bureau of Lands, to whom respondent
allegedly entrusted the paperwork of the land titling, was not
presented as a witness.
Moreover, the trial court stated that respondent failed to
establish with competent and credible evidence that he was
in prior possession of the subject property. No corroborative
witness was presented to further prove his prior possession.
On the other hand, the trial court stated that petitioner
offered documentary evidence, consisting of a contract of
real estate mortgage of the subject property, tax
declarations, an official tax receipt, and testimonial evidence
to prove that he had been in open, public, continuous, and
lawful possession of the subject property in the concept of
owner.
Respondent appealed the decision of the trial court to the
Court of Appeals.
On August 15, 2003, the Court of Appeals rendered a
Decision reversing the decision of the trial court, the
dispositive portion of which reads:
WHEREFORE:
1. The appeal is granted and the appealed judgment is
hereby totally REVERSED.
2. To quiet his title, plaintiff-appelant Hadji Serad Mingca
Lantud is confirmed the owner of the parcel of land covered
by Original Certificate of Title No. P-658;
3. The defendant-appellee is ordered to pay ₱50,000.00 as
attorney’s fees to the plaintiff-appellant; and
4. Costs against the defendant-appellee.17
Petitioner’s motion for reconsideration was denied by the
Court of Appeals in its Resolution18 dated May 13, 2004.
The Court of Appeals held that there is no controversy that
respondent is a holder of a Torrens title; hence, he is the
owner of the subject property. The appellate court stressed
that Section 4719 of the Land Registration Act (Act No. 496)
provides that the certificate of title covering registered land
shall be received as evidence in all courts of the Philippines
and shall be conclusive as to all matters stated therein.
The Court of Appeals stated that the Torrens title has three
attributes: (1) a Torrens title is the best evidence of
ownership over registered land and, unless annulled in an
appropriate proceeding, the title is conclusive on the issue of
ownership; (2) a Torrens title is incontrovertible and
indefeasible upon the expiration of one year from the date of
the entry of the decree of registration;20 and (3) a Torrens
title is not subject to collateral attack.21
The Court of Appeals held that petitioner’s counterclaim filed
on October 15, 1984 for cancellation of respondent’s original
certificate of title issued on May 22, 1981 was filed beyond
the statutory one-year period; hence, petitioner’s title had
become indefeasible, and cannot be affected by the decision
made by Barangay Captain Hadji Hassan Abato and his
councilmen. Moreover, the appellate court held that
petitioner’s prayer for the cancellation of respondent’s title,
OCT No. P-658, through a counterclaim included in his
Answer is a collateral attack, which the law does not allow,
citing Cimafranca v. Court of Appeals22 and Natalia Realty
Corporation v. Valdez.23
The allegation of fraud in securing OCT No. P-658 on the
ground that the property in dispute is a residential lot and
not subject of a free patent was not given weight by the
36
appellate court as it was supported only by testimonial
evidence that did not show how (by metes and bounds) and
why the property in dispute could not have been the subject
of a free patent. The appellate court stated that a mere
preponderance of evidence is not adequate to prove
fraud;24 it must be established by clear and convincing
evidence.
The Court of Appeals also noted that petitioner claimed that
the subject property is only part of his larger property.
Although petitioner introduced proof of payment of the real
estate taxes of the said property, as well as a previous
mortgage of the property, petitioner did not show that the
disputed property is part of his larger property. Hence, the
appellate court stated that under such circumstances, it
cannot rule that petitioner owned the land under litigation,
since petitioner failed to show that it is part of his larger
property.
The Court of Appeals did not award actual and moral
damages, because respondent failed to prove the amount of
any actual damages sustained, and the instances enumerated
under Article 2219 of the Civil Code warranting the award of
moral damages were not present.
However, the Court of Appeals awarded attorney's fees in
the amount of ₱50,000.00, considering that respondent was
forced to incur expenses to protect his right through the
action to quiet title.
Petitioner filed this petition raising the following issues:
I
THE COURT OF APPEALS MISERABLY FAILED TO CONSIDER
THE FACT THAT THE TORRENS TITLE INVOLVED HEREIN WAS
ISSUED PURSUANT TO A FREE PATENT WHICH COULD NOT BE
VALIDLY ISSUED OVER A PRIVATE LAND.
II
THE COURT OF APPEALS ERRED IN DISREGARDING THE FACT
THAT AS CERTIFIED TO BY THE BUREAU OF LANDS ITSELF NO
SUCH FREE PATENT OVER THE SUBJECT LAND WAS ISSUED BY
IT; HENCE, SAID FREE PATENT IS SPURIOUS.

III
THE COURT OF APPEALS ERRED IN REVERSING THE DECISION
OF THE TRIAL COURT THAT THE SUBJECT LOT HAD LONG
BEEN OWNED, POSSESSED AND CULTIVATED BY THE
DEFENDANT (PETITIONER HEREIN) OR HIS PREDECESSORS-IN-
INTEREST SINCE TIME IMMEMORIAL IN THE CONCEPT OF AN
OWNER.
IV
THE COURT OF APPEALS ERRED IN RULING THAT THE
PETITIONER’S COUNTERCLAIM FOR CANCELLATION OF
RESPONDENT’S TITLE IS BARRED.
V patent, since only agricultural lands are subject of a free
THE COURT OF APPEALS ERRED IN RULING THAT THE
COUNTERCLAIM IN THE INSTANT CASE IS A COLLATERAL
ATTACK ON RESPONDENT-PLAINTIFF’S TITLE.
VI
THE COURT OF APPEALS ERRED IN DENYING PETITIONER’S
MOTION FOR RECONSIDERATION.25
ISSUE:
The main issue is whether or not the Court of Appeals erred
in sustaining the validity of OCT No. P-658 and confirming
respondent as owner of the property in dispute.--- NO!!!!!!
Petitioner contends that the Court of Appeals erred in
disregarding the fact that the Torrens title was issued to
respondent by virtue of a free patent covering a residential
lot that is private land as it has been acquired by petitioner
through open, public, continuous and lawful possession of
the land in the concept of owner. Petitioner thus prayed for
the cancellation of respondent’s title and the reconveyance
of the subject property. Hence, the Court of Appeals erred in
declaring that the subject lot belongs to respondent.
The contention is without merit.
The Torrens title is conclusive evidence with respect to the
ownership of the land described therein, and other matters
which can be litigated and decided in land registration
proceedings.26 Tax declarations and tax receipts cannot
prevail over a certificate of title which is an incontrovertible
proof of ownership.27 An original certificate of title issued by
the Register of Deeds under an administrative proceeding is
as indefeasible as a certificate of title issued under judicial
proceedings.28 However, the Court has ruled that
indefeasibility of title does not attach to titles secured by
fraud and misrepresentation.29
In this case, petitioner alleged in his Answer to respondent’s
Complaint in the trial court that respondent’s title, OCT No.
P-658, was secured in violation of the law and through fraud,
deception and misrepresentation, because the subject parcel
of land is a residential lot, which cannot be subject of a free
patent.
The trial court found that "[t]he lot under litigation as clearly
described in the complaint is a residential lot and a free
patent title thereto cannot validly be issued." This finding
was one of the bases for the trial court’s declaration that the
issuance of OCT was tainted with fraud and irregularities and
is, therefore, spurious; thus, OCT No. P-658 is null and void.
It should be pointed out that the allegation in the Complaint
that the land is residential was made only by respondent, but
the true classification of the disputed land as residential was
not shown to have been made by the President, upon
recommendation by the Secretary of Environment and
Natural Resources, pursuant to Section 9 of Commonwealth
Act No. 141, otherwise known as The Public Land Act.30
Hence, the trial court erred in concluding that there was
fraud in the issuance of respondent’s free patent title on the
ground that it covered residential land based only on the
Complaint which stated that the property was residential
land when it was not shown that it was the President who
classified the disputed property as residential, and OCT No.
P-658 itself stated that the free patent title covered
agricultural land. It has been stated that at present, not only
agricultural lands, but also residential lands, have been made
available by recent legislation for acquisition by free patent
by any natural born Filipino citizen.31 Nevertheless, the fact
is that in this case, the free patent title was granted over
agricultural land as stated in OCT No. P-658.
37
Moreover, petitioner contends in his petition that the
Certification32 dated July 24, 1987 issued by Datu Samra I.
Andam, A/Adm. Assistant II, Natural Resources District No.
XII-3, Bureau of Lands, Marawi City, certifying that the data
contained in OCT No. P-658 in respondent’s name had no
records in the said office, showed that respondent’s Torrens
title was spurious.
The Court holds that the certification, by itself, is insufficient
to prove the alleged fraud. Fraud and misrepresentation, as
grounds for cancellation of patent and annulment of title,
should never be presumed, but must be proved by clear and
convincing evidence, mere preponderance of evidence not
being adequate.33 Fraud is a question of fact which must be
proved.34 The signatory of the certification, Datu Samra
Andam, A/Adm. Assistant II, Natural Resources District No.
XII-3, Marawi City, was not presented in court to testify on
the due issuance of the certification, and to testify on the
details of his certification, particularly the reason why the
said office had no records of the data contained in OCT No.
P-658 or to testify on the fact of fraud, if any.
Thus, the Court holds that the evidence on record is
insufficient to prove that fraud was committed in the
issuance of respondent’s Torrens title. Hence, respondent’s
Torrens title is a valid evidence of his ownership of the land
in dispute.
On the other hand, petitioner claims ownership of the
subject lot, which is merely a portion of a larger property
(1,800 square meters) that he allegedly inherited from his
father in 1952, by virtue of open, public and continuous
possession of the land in the concept of owner making it
petitioner’s private property. Hence, petitioner prays for
reconveyance of the said property.
Article 434 of the Civil Code governs an action for
reconveyance, thus:
Art. 434. In an action to recover, the property must be
identified, and the plaintiff must rely on the strength of his
title and not on the weakness of the defendant’s claim.
Under Article 434 of the Civil Code, to successfully maintain
an action to recover the ownership of a real property, the

person who claims a better right to it must prove two (2)
things: first, the identity of the land claimed; and second, his
title thereto.35
In regard to the first requisite, in an accion reinvindicatoria,
the person who claims that he has a better right to the
property must first fix the identity of the land he is claiming
by describing the location, area and boundaries thereof.36
In this case, petitioner claims that the property in dispute is
part of his larger property. However, petitioner failed to
identify his larger property by providing evidence of the
metes and bounds thereof, so that the same may be
compared with the technical description contained in the
title of respondent, which would have shown whether the
disputed property really formed part of petitioner’s larger
property. The appellate court correctly held in its Resolution
dated May 13, 2004 that petitioner’s claim is solely
supported by testimonial evidence, which did not
conclusively show the metes and bounds of petitioner’s
larger property in relation to the metes and bounds of the
disputed property; thus, there is no sufficient evidence on
record to support petitioner’s claim that the disputed
property is part of his larger property.
In regard to the second requisite of title to property, both
petitioner and respondent separately claim that they are
entitled to ownership of the property by virtue of open,
public, continuous and exclusive possession of the same in
the concept of owner. Petitioner claims that he inherited the
subject property from his father in 1952, while respondent
claims that he acquired the property from his grandmother
Intumo Pagsidan, a portion thereof from his grandmother’s
helper Totop Malacop pursuant to a court decision after
litigating with him.37 Respondent has OCT No. P-658 to
prove his title to the subject property, while petitioner
merely claims that the property is already his private land by
virtue of his open, public, continuous possession of the same
in the concept of owner.
The Court holds that petitioner failed to prove the requisites
of reconveyance as he failed to prove the identity of his
larger property in relation to the disputed property, and his
claim of title by virtue of open, public and continuous
possession of the disputed property in the concept of owner
is nebulous in the light of a similar claim by respondent who
holds a free patent title over the subject property. As stated
in Ybañez v. Intermediate Appellate Court,38 it is relatively
easy to declare and claim that one owns and possesses public
agricultural land, but it is entirely a different matter to
affirmatively declare and to prove before a court of law that
one actually possessed and cultivated the entire area to the
exclusion of other claimants who stand on equal footing
under the Public Land Act (Commonwealth Act No. 141, as
amended) as any other pioneering claimants.
Further, petitioner contends that the Court of Appeals erred
in ruling that petitioner’s counterclaim is time-barred, since
the one-year prescriptive period does not apply when the
person seeking annulment of title or reconveyance is in
possession of the lot, citing Heirs of Simplicio Santiago v.
Heirs of Mariano E. Santiago.39 Petitioner also contends that
the Court of Appeals erred in ruling that the counterclaim in
this case is a collateral attack on respondent’s title, citing
Cimafranca v. Intermediate Appellate Court.40 Petitioner
cites the case of Heirs of Simplicio Santiago v. Heirs of
Mariano E. Santiago,41 which held that a counterclaim can
be considered a direct attack on the title.
The Court notes that the case of Cimafranca v. Intermediate
Appellate Court,42 cited by the Court of Appeals to support
its ruling that the prayer for the cancellation of respondent’s
title through a counterclaim included in petitioner’s Answer
is a collateral attack on the said title, is inapplicable to this
case. In Cimafranca, petitioners therein filed a complaint for
Partition and Damages, and respondents therein indirectly
attacked the validity of the title involved in their
counterclaim. Hence, the Court ruled that a Torrens title
cannot be attacked collaterally, and the issue on its validity
can be raised only in an action expressly instituted for that
purpose.
Here, the case cited by petitioner, Heirs of Simplicio Santiago
v. Heirs of Mariano E. Santiago, declared that the one-year
prescriptive period does not apply when the party seeking
annulment of title or reconveyance is in possession of the lot,
as well as distinguished a collateral attack under Section 48
of PD No. 1529 from a direct attack, and held that a
counterclaim may be considered as a complaint or an
38
independent action and can be considered a direct attack on
the title, thus:
The one-year prescriptive period, however, does not apply
when the person seeking annulment of title or reconveyance
is in possession of the lot. This is because the action partakes
of a suit to quiet title which is imprescriptible. In David v.
Malay, we held that a person in actual possession of a piece
of land under claim of ownership may wait until his
possession is disturbed or his title is attacked before taking
steps to vindicate his right, and his undisturbed possession
gives him the continuing right to seek the aid of a court of
equity to ascertain and determine the nature of the adverse
claim of a third party and its effect on his title.
xxxx
Section 48 of P.D. 1529, the Property Registration Decree,
provides that a certificate of title shall not be subject to
collateral attack and cannot be altered, modified, or canceled
except in a direct proceeding. An action is an attack on a title
when the object of the action is to nullify the title, and thus
challenge the judgment or proceeding pursuant to which the
title was decreed. The attack is direct when the object of an
action is to annul or set aside such judgment, or enjoin its
enforcement. On the other hand, the attack is indirect or
collateral when, in an action to obtain a different relief, an
attack on the judgment or proceeding is nevertheless made
as an incident thereof.
x x x A counterclaim can be considered a direct attack on the
title. In Development Bank of the Philippines v. Court
Appeals, we ruled on the validity of a certificate of title
despite the fact that the nullity thereof was raised only as a
counterclaim. It was held that a counterclaim is considered a
complaint, only this time, it is the original defendant who
becomes the plaintiff.1avvphi1 It stands on the same footing
and is to be tested by the same rules as if it were an
independent action. x x x43
The above ruling of the court on the definition of collateral
attack under Section 48 of P.D. No. 1529 was reiterated in
Leyson v. Bontuyan,44 Heirs of Enrique Diaz v. Virata,45
Arangote v. Maglunob,46 and Catores v. Afidchao.47

Based on the foregoing, the Court holds that petitioner’s
counterclaim for cancellation of respondent’s title is not a
collateral attack, but a direct attack on the Torrens title of
petitioner. However, the counterclaim seeking for the
cancellation of title and reconveyance of the subject
property has prescribed as petitioner has not proven actual
possession and ownership of the property due to his failure
to prove the identity of his larger property that would show
that the disputed property is a part thereof, and his claim of
title to the subject property by virtue of open, public and
continuous possession in the concept of owner is nebulous in
the light of a similar claim by respondent who holds a
Torrens title to the subject property.
Respondent’s original certificate of title was issued on May
22, 1981, while the counterclaim was filed by petitioner on
October 15, 1984, which is clearly beyond the one-year
prescriptive period.
In fine, the Court of Appeals did not err in confirming that
respondent is the owner of the parcel of land covered by OCT
No. P-658.
WHEREFORE, the petition is DENIED. The Court of Appeals’
decision dated August 15, 2003, and its Resolution dated
May 13, 2004 in CA-G.R. CV No. 63801, are hereby
AFFIRMED.
No costs.
SO ORDERED.
GR No. 77541, Nov 29, 1988
HEIRS OF GREGORIO TENGCO v. HEIRS OF JOSE
CORTES, J.:
The instant case stemmed from an action to quiet title
instituted by the late Victoria L. Vda. de Aliwalas against the
Heirs of Gregorio Tengco, the Director of Lands and the
Register of Deeds of Pampanga.
The facts as found by the Court of First Instance of San
Fernando, Pampanga, Branch VI, in Civil Case No. 4308, are
as follows:
The evidence adduced by the parties in this case shows that
Lot No. 3563 of the Arayat Cadastre was originally a part of
the public domain and it was so declared on October 12,
1933 (Exh. "A-2"). Thereafter, Dr. Jose Aliwalas applied with
the Bureau of Lands for the issuance of a homestead patent
covering this lot. On December 12, 1936, the Director of
Lands granted this application and issued in favor of Jose
Aliwalas Homestead Patent No. 38588 (Exh. "E"). This patent
was duly registered in the Register of Deeds of Pampanga on
April 8, 1937 after the corresponding fees thereon were paid
(Exhs. "D-5" and "D-6"). On the same day, the Register of
Deeds of Pampanga issued OCT No. 159 (Exh. "D") in the
name of Jose Aliwalas. From that time on, Dr. Aliwalas paid
the corresponding land taxes thereon (Exh. "I", "I-1" to "I-
25") after having declared the land for taxes (sic) purposes in
his name (Exh. "F", "G" and "H").
As owner of this property, Jose Aliwalas, thru his overseer
Espiridion Manaul, had this parcel fenced and vegetables
were planted in some portions thereof. Other portions were
dedicated initially to cattle raising until the last war broke
out.
After the war, palay was planted on some portions of this
land, by the tenants of Jose Aliwalas who gave the owner's
share to him, thru his caretaker and overseer Espiridion
Manaul. Other seasonal crops were also planted on the land
as well as ipil-ipil trees for firewood purposes. There were
also planted mango trees which ultimately bore fruit which,
were harvested by the caretaker of Aliwalas in this property
and who delivered them to Jose Aliwalas until he died in
1962 when the administration and management was
assumed by Jose Aliwalas, Jr., a son of Dr. Aliwalas.
When the properties left by Dr. Jose Aliwalas were
partitioned among his surviving heirs, the lot in question was
allotted in favor of the plaintiff Victoria L. Vda. de Aliwalas as
indicated in the amended project of partition (Exh. "B")
executed by her and her nine children, one of whom is Jose
Aliwalas, Jr.
After this amended project of partition was approved (Exh.
"C") and registered with the Register of Deeds of Pampanga,
OCT No. 52526-R (Exh. "A") was issued in the name of the
plaintiff on November 14, 1966 (Exh. "A-1"). Thereafter, the
tax declaration pertaining to this parcel of land was also
39
transferred to her name (Exhs. "O", "P" and "A"). She also
paid the real estate taxes thereon (Exhs. "N", "N-1" to "N-
14", Exhs. "R", "R-1" to "R-53").
On the other hand, the evidence further shows that on
October 31, 1973, the defendant Ponciano Tengco in
representation of the defendants Heirs of Gregorio Tengco
filed an application with the Bureau of Lands, thru its District
Land Office here in San Fernando, Pampanga. Among other
things, he alleged in his application that this parcel of land
had been occupied and cultivated originally and continuously
thereafter by Gregorio Tengco. After being given due course,
this application was approved by the Director of Lands who
issued Free Patent No. 557692 covering this lot on February
5, 1974 (Exh. "3" Tengco; Exh. "6", Dir. of Lands).
This free patent issued in favor of the Heirs of Gregorio
Tengco was predicated on the assumption that the lot still
formed part of the public domain and on the findings of the
Public Land Inspector Romeo Buenaventura who conducted
an investigation thereon and who also reported that the land
in question was possessed and occupied by the applicant,
Heirs of Gregorio Tengco (Exh. "2"-Tengco and Exh. "5"-Dir.
of Lands) who had planted different kinds of trees on the
land aside from rice and corn.
The defendants Heirs of Gregorio Tengco also adduced
evidence tending to show that their late grandfather
Gregorio Tengco had occupied this parcel of land exclusively
years before the last (sic) and after he died in 1934, his
children succeeded him in its possession and enjoying the
fruits from the different trees planted thereon, and that the
possession of Gregorio Tengco and his successors-in-interest
have not been disturbed by anyone including the Aliwalas
family.
On rebuttal, the plaintiff adduced evidence showing that the
pre-war records of the Bureau of Lands pertaining to public
land applications were burned during the war as indicated in
the certification issued by the Chief of the Records
Management Division of the Bureau of Lands. This is to
explain why the Bureau has no more record pertaining to the
Homestead Patent issued in favor of Jose Aliwalas in 1936
which gave rise to the issuance of OCT No. 159 of the
Register of Deeds of Pampanga on April 8, 1937. The

certification also attests that what is now found in the files of
the Bureau of Lands is Free Patent V-557692 issued on
February 5, 1974 in favor of the Heirs of Gregorio Tengco
pertaining to Lot No. 3563. [Rollo, pp. 18-20.]
On the basis of the evidence, the trial court rendered
judgment as follows:
WHEREFORE, and in view of all the foregoing, judgment is
hereby rendered:
1.
Declaring the herein plaintiff Victoria Vda. de Aliwalas as the
true owner of Lot No. 3563 of Arayat Cadastre embraced in
TCT No. 52526-R of the Register of Deeds of Pampanga in her
name;
2.
Ordering the Register of Deeds of Pampanga to cancel TCT
Nos. 132263-R, 132264--R and 132349-R in the name of
Cipriano Tengco, Ponciano Tengco, et al., and Eugenia
Tengco, respectively, covering portions of this Lot No. 3563;
3.
Ordering the herein defendants-Heirs of Gregorio Tengco to
vacate the land in question and to pay the amount of
P5,000.00 a year to the plaintiff beginning from the year
1974 until the land is vacated by them and turned over to the
plaintiff; and
4.
Ordering the defendants-Heirs of Gregorio Tengco to pay the
plaintiff the sum of P2,000.00 as attorney's fees, plus costs.
[Rollo, pp. 17-18.]
Dissatisfied with the trial court's judgment, the Heirs of
Gregorio Tengco interposed an appeal to the Court of
Appeals, docketed as CA-G.R. CV No. 69706. The appellate
court, adopting the trial court's findings of fact, affirmed the
latter's judgment [Rollo, pp, 17-24.] Petitioners moved for
reconsideration but their motion was denied [Rollo, pp. 25-
26.] Hence, the instant petition.
Private respondents filed a comment to the petition, to
which petitioners replied. On September 16, 1987, the Court
resolved to give due course to the petition and the parties
were required to submit their respective memoranda. After
the petitioner filed a reply to private respondent's
memorandum, the case was deemed submitted for decision.
In their petition the Heirs of Gregorio Tengco have ascribed
several errors to the Court of Appeals, which involve mixed
questions of fact and law [Rollo, p. 4.] But, as stated in their
memorandum, the issues may be limited to the following:
(a) Whether or not the court of origin and/or, subsequently,
the respondent Honorable Court of Appeals, had jurisdiction
to take cognizance of, and pass upon, the instant case;
(b) Whether or not the claim or contention of the private
respondents will hold true and prosper before a proper
forum; and
ISSUE: (c) Whether or not the private respondents, assuming
for the sake of argument, that they have proprietary rights
on and to the land in question, have not long lost such rights
by laches and/or prescription. -- Title acquired through a
homestead patent registered under the Land Registration
Act is imprescriptible. Thus, prescription cannot operate
against the registered owner!!!!!! [Memorandum for
Petitioners, p. 6.]
1. Petitioners contend that the trial court (and, consequently,
the Court of Appeals) had no jurisdiction to take cognizance
of and pass upon the instant case as private respondents
have failed to exhaust administrative remedies. They point
out that instead of bringing her case to the Bureau of Lands,
Victoria Vda. de Aliwalas went directly to the court.
On the other hand, private respondents argue that since a
homestead patent and an original certificate of title had
already been issued to their predecessor-in-interest, the land
had ceased to be part of the public domain and, hence, the
Bureau of Lands had no jurisdiction over the controversy.
Private respondents add that since an original certificate of
title had been issued pursuant to the homestead patent,
their title to the property had become conclusive, absolute,
indefeasible and imprescriptible.
In rebuttal, petitioners contend that private respondents'
title had not acquired said qualities as it was derived from a
homestead patent. Petitioners advanced the view that only
40
titles based upon a judicial declaration can be vested with
the attributes of conclusiveness, indefeasibility and
imprescriptibility.
Petitioners' theory is not supported by the jurisprudence on
the matter. The rule is well-settled that an original certificate
of title issued on the strength of a homestead patent
partakes of the nature of a certificate of title issued in a
judicial proceeding, as long as the land disposed of is really
part of the disposable land of the public domain, and
becomes indefeasible and incontrovertible upon the
expiration of one year from the date of the promulgation of
the order of the Director of Lands for the issuance of the
patent [Republic v. Heirs of Carle, 105 Phil. 1227 (1959);
Ingaran v. Ramelo, 107 Phil. 498 (1960); Lopez v. Padilla, G.R.
No. L-27559, May 18, 1972, 45 SCRA 44.] A homestead
patent, once registered under the Land Registration Act,
becomes as indefeasible as a Torrens Title [Pamintuan v. San
Agustin, 43 Phil. 558 (1922); El Hogar Filipino v. Olviga, 60
Phil. 17 (1934); Duran v. Oliva, 113 Phil. 144 (1961);
Pajomayo v. Manipon, G.R. No. L-33676, June 30, 1971, 39
SCRA 676.]
The contention of non-exhaustion of administrative
remedies, on the theory that the case should have been
brought before the Director of Lands, had already been
rejected by the Court in earlier decisions. Thus, while the
Director of Lands has the power to review homestead
patents, he may do so only so long as the land remains part
of the public domain and continues to be under his exclusive
control; but once the patent is registered and a certificate of
title is issued, the land ceases to be a part of public domain
and becomes private property over which the Director of
Lands has neither control nor jurisdiction [Sumail v. Judge of
Court of First Instance, 96 Phil. 946 (1955); Republic v. Heirs
of Carle, supra.]
2. Anent the second issue, petitioners contend that
petitioners' title to the property was defective for the
following reasons: (a) Dr. Jose Aliwalas was not qualified to
be a homesteader being a rich landed person; and (b) private
respondents and their predecessors-in-interest have never
been in actual or physical possession of the property, unlike
petitioners and their predecessor-in-interest who have been
in continuous and open possession of the property since

1918. Thus, petitioners rely on a report prepared by a certain
Librado B. Luna, hearing officer of the Bureau of Lands,
attesting to such facts [Memorandum for Petitioners, p. 13.]
But, as correctly pointed out by the respondent Court of
Appeals, Dr. Aliwalas' title to the property having become
incontrovertible, such may no longer be collaterally attacked.
If indeed there had been any fraud or misrepresentation in
obtaining the title, an action for reversion instituted by the
Solicitor General would be the proper remedy [Sec. 101, C.A.
No. 141; Director of Lands v. Jugado, G.R. No. L-14702, May
21, 1961, 2 SCRA 32; Lopez v. Padilla, supra.]
3. Finally, petitioners contend that private respondents have
lost their title to the property through laches and
prescription. They assert that private respondents and their
predecessors-in-interest have never actually possessed the
property while petitioners and their predecessor-in-interest
have been in actual, open, uninterrupted and adverse
possession of the property since 1918.
But as stated above, title acquired through a homestead
patent registered under the Land Registration Act is
imprescriptible. Thus, prescription cannot operate against
the registered owner.
Moreover, as found by the Court of Appeals:
. . . The allegation of defendants-appellants (petitioners
herein) that plaintiff-appellee (Victoria L. Vda. de Aliwalas)
and her predecessor-in-interest slept on their rights for over
40 years, since 1936 when the patent was issued to Aliwalas
is untenable. It has been established that Jose Aliwalas
through his overseer Espiridion Manaul planted the subject
land to vegetables and raised cattle therein until the last war
broke out. After the war, the land was planted with palay,
seasonal crops, ipil-ipil trees and mango trees. When Jose
Aliwalas died in 1962, the administration and management
of the farm was assumed by his son, Jose Aliwalas, Jr. Upon
the partition of the properties left by the late Jose Aliwalas,
the subject property was allotted to and registered in the
name of plaintiff-appellee. It was in 1974 when the
defendants-Heirs of Gregorio Tengco wrested possession of
the subject land from plaintiff-appellee's caretaker and
deprived her of its produce. On October 14, 1976, the
plaintiff filed her second amended complaint. The foregoing
facts show that plaintiff-appellee and her predecessor-in-
interest occupied, possessed and exercised rights of
ownership over the subject land prior to the filing of the
instant suit. [Rollo, pp. 23-24.]
The Court finds no cogent reason to disturb the appellate
court's findings, in the absence of a clear showing that the
facts have been misapprehended.
WHEREFORE, finding no reversible error, the petition is
DENIED and the decision of the Court of Appeals in CA-G.R.
CV No. 69706 is AFFIRMED.
SO ORDERED.
G.R. No. 157767
REYNALDO BALOLOY and ADELINA BALOLOY-HIJE, - versus -
AUSTRIA-MARTINEZ,*
September 9, 2004
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45
of the Revised Rules of Court, as amended, of the Decision[1]
of the Court of Appeals in CA-G.R. CV No. 51081, which
affirmed the Decision[2] of the Regional Trial Court of
Sorsogon, Branch 51, in Civil Case No. 93-5871.
The antecedents are as follows:
On May 11, 1993, respondent Alfredo Hular filed a complaint
for quieting of title of real property with damages against the
children and heirs of Iluminado Baloloy, namely, Anacorita,
Antonio, and petitioners Reynaldo and Adelina, all surnamed
Baloloy. The respondent alleged, inter alia, in his complaint
that his father, Astrologo Hular, was the owner of a parcel of
residential land located in Sitio Page, Biriran, Juban,
Sorsogon, with an area of 287 square meters, and that such
lot was part of Lot No. 3347 of the Juban Cadastre. The
respondent alleged that Iluminado Baloloy, the petitioners
predecessor-in-interest, was able to secure a Free Patent
over the property through fraud on March 1, 1968, on the
basis of which the Register of Deeds issued
OriginalCertificate of Title (OCT) No. P-16540 in his name.
The respondent later discovered that in the cadastral survey
of lands in Juban, the property of his father, which actually
41
consisted of 1,405 square meters was made to form part of
Lot No. 3353, the property of Iluminado Baloloy. According to
the respondent, even if the residential land was made to
form part of Lot No. 3353 registered under the name of
Iluminado Baloloy, he had acquired ownership of the
property by acquisitive prescription, as he and his
predecessors had been in continuous, uninterrupted and
open possession of the property in the concept of owners for
more than 60 years.
The respondent prayed for alternative reliefs that, after due
hearing, judgment be rendered in his favor, thus:
a) Declaring the plaintiff as the absolute owner of the land
in question;
b) Ordering the defendants to perpetually refrain from
disturbing plaintiff in his peaceful possession in the land in
question;
c) Ordering the defendants to remove their houses in the
land in question, and to declare OCT No. P-16540, and
whatever paper, form, document or proceeding the
defendants may have, as null and void and without any effect
whatsoever as far as the land in question is concerned as
they cast cloud upon the title of the plaintiff;
d) In the alternative, defendants be ordered to reconvey
the title in favor of the plaintiff as far as the land in question
is concerned;
e) Ordering the defendants to jointly and severally pay the
plaintiff the amount of P50,000.00 as moral damages;
P5,000.00 as attorneys fee plus P500.00 for every
appearance or hearing of his lawyer in court; P1,500.00 as
consultation fee; P5,000.00 as incidental litigation expenses;
P20,000.00 as exemplary damages; and to pay the costs.
Plaintiff further prays for such other relief [as are] just and
equitable in the premises.[3]
The Evidence of the Respondent

The respondent adduced evidence that the Spouses Lino and
Victoriana Estopin were the original owners of a parcel of
land located in Barangay Biriran, Juban, Sorsogon, designated
as Lot No. 3347 of the Juban Cadastre. A major portion of the
property, where a house of strong materials was
constructed, was agricultural, while the rest was residential.
The respondent also averred that the Spouses Estopin
declared the property in their names under Tax Declaration
No. 4790. On the north of the agricultural portion of the
property was the road leading to Biriran, while north of the
residential portion was a creek (canal) and the property of
Iluminado.
When Lino Estopin died intestate, his widow, Victoriana
Lagata, executed a Deed of Absolute Sale[4] on November
11, 1961 over the agricultural portion of Lot No. 3347, which
had an area of 15,906 square meters, more or less, in favor
of Astrologo Hular, married to Lorenza Hular. Shortly
thereafter, on November 25, 1961, Lagata executed a Deed
of Absolute Sale[5] over the residential portion of the
property with an area of 287 square meters, including the
house constructed thereon, in favor of Hular. Hular and his
family, including his son, the respondent, then resided in the
property. In 1961 or thereabouts, Iluminado asked Hulars
permission to construct a house on a portion of Lot No. 3347
near the road, and the latter agreed. In l977, Lorenza Hular,
wife of Astrologo, declared the residential land in the latters
name under Tax Declaration No. 6841.[6]
Earlier, or on August 14, 1945, Irene Griarte had executed a
Deed of Absolute Sale over a coconut land located in
Barangay Biriran, Juban, with an area of 6,666 square meters
in favor of Martiniano Balbedina, with the following
boundaries: North, Alejandro Gruta; South, Lino Estopin;
East, River Page; West, Pedro Grepal and Esteban Grepal.[7]
Subsequently, after a cadastral survey was conducted on
lands in Juban, the property of Balbedina was designated as
Lot No. 3353, with the following boundaries: North: Lot No.
3353 (portion), Alejandro Gruta; South: Lino Estopin; West:
Lot No. 3349; East: creek. A trail was then established
between Lot No. 3353 and Lot No. 3347 resulting in the
decrease of Lot No. 3353 owned by Balbedina to 4,651
square meters. He declared the property under his name
under Tax Declaration No. 191 with the following
boundaries: North: Lot No. 3353 (portion) Alejandro Gruta;
South: trail; East: creek; West: Lot No. 3349.[8]
On June 4, 1951, Balbedina executed a Deed of Absolute Sale
over Lot No. 3353 with an area of only 4,651 square meters
in favor of Iluminado.[9] The latter declared the property in
his name under Tax Declaration No. 5359.[10] Iluminado filed
an application with the Bureau of Lands for a free patent
over the entirety of Lot No. 3353 on January 5, 1960.[11] He
indicated in his application that the property was not
occupied by any person and was disposable or alienable
public land. In support thereof, he executed an affidavit
wherein he declared that he purchased about one-half
portion of the property in 1951 based on a deed of absolute
sale attached to said affidavit; that in 1957, he purchased the
other one-half portion, but for economic reasons, no deed of
sale was executed by the parties. He also alleged that the
improvements on the land consisted of coconut trees.[12]
The Bureau of Lands processed the application in due course.
In the meantime, Iluminado constructed his house on a
portion of Lot No. 3353 near the trail (road) leading to
Biriran. He and his family, including his children, forthwith
resided in said house.
On March 1, 1968, the Secretary of Agricultural and Natural
Resources approved Iluminados application and issued Free
Patent No. 384019 covering Lot No. 3353 with an area of
9,302 square meters, on the basis of which OCT No. P-16540
was thereafter issued by the Register of Deeds on March 1,
1968.[13]
On August 2, 1975, Alejandro Gruta had executed a deed of
absolute sale over a portion of Lot No. 3353 with an area of
4,651 square meters in favor of Estelito Hije, the husband of
petitioner Adelina Baloloy, one of Iluminados children.[14]
Before he left for employment in Saudi Arabia in 1979,
respondent Hular had his house constructed near the trail
(road) on Lot No. 3347, which, however, occupied a big
portion of Lot No. 3353.[15]
42
Iluminado died intestate on November 29, 1985. His widow
and their children continued residing in the property, while
petitioner Reynaldo Baloloy, one of Iluminados children, later
constructed his house near that of his deceased father. When
Astrologo died intestate on December 25, 1989, he was
survived by his children, Jose, Romeo, Anacleto, Elena, Leo,
Teresita, and the respondent, among others,[16] who
continued to reside in their house.[17]
Sometime in l991, the respondents house helper was
cleaning the backyard, but was prevented from doing so by
petitioner Adelina Baloloy who claimed that their father
Iluminado owned the land where the respondents house was
located. To determine the veracity of the claim, the
respondent had Lot No. 3353 surveyed by Geodetic Engineer
Rodolfo Cunanan on February 16, 1993, in the presence of
Balbedina, Antonio Baloloy and petitioner Reynaldo Baloloy.
Cunanan prepared a Special Sketch Plan of Lot No. 3353[18]
showing that the house of Iluminado was constructed on Lot
No. 3353[19] near the road behind the houses owned by
Astrologo and Alfredo.[20] The engineer discovered that the
residential area deeded by Lagata to Hular had an area of
1,405 square meters, instead of 287 square meters only.[21]
In their Answer to the complaint, the heirs of Iluminado
Baloloy averred that Iluminados house was built in 1962 on a
portion of Lot No. 3353, which the latter purchased from
Balbedina, and not on a portion of Lot No. 3347 which Hular
purchased from Lagata. They alleged that Hular constructed
his house on a portion of Lot No. 3353 after securing the
permission of their father Iluminado, and that the
respondent had no cause of action for the nullification of
Free Patent No. 384019 and OCT No. P-16540 because only
the State, through the Office of the Solicitor General, may file
a direct action to annul the said patent and title; and even if
the respondent was the real party in interest to file the
action, such actions had long since prescribed. The heirs of
Baloloy prayed that judgment be rendered in their favor,
thus:
WHEREFORE, it is most respectfully prayed of the Honorable
Court to DISMISS this case pursuant to paragraph 15, et seq.,
hereof, and/or DECIDE it in favor of the defendants by
UPHOLDING the sanctity of OCT No. P-16540 and ordering
plaintiff to:

1. RESPECT defendants proprietary rights and interests on
the property in question covered by OCT No. P-16540;
2. VACATE it at his sole and exclusive expense, and never
to set foot on it ever again;
3. PAY defendants:
a) MORAL DAMAGES at P50,000.00 EACH;
b) ACTUAL DAMAGES and UNREALIZED PROFITS at
P1,000.00/MONTH COMPUTED UP TO THE TIME OF
PAYMENT PLUS LEGAL RATE OF INTEREST;
c) EXEMPLARY DAMAGES of P50,000.00
d) ATTYS FEES and LITIGATION EXPENSES of P100,000.00;
and
e) THE COSTS OF THIS SUIT.
DEFENDANTS pray for all other reliefs and remedies
consistent with law and equity.[22]
The Evidence for the Petitioners
Sometime in 1982, Hular asked permission from Iluminado to
construct his house on Lot No. 3353 near the road leading to
Biriran. Iluminado agreed, in the presence of his daughter,
petitioner Adelina Baloloy. As per the plan of Lot No. 3353
certified by a Director of the Bureau of Lands on November
6, 1961, Lot No. 3353 had an area of 9,302 square
meters.[23]
As gleaned from the Sketch Plan of Lot Nos. 3347 and 3353
prepared on February 7, 1991 by Geodetic Engineer Salvador
Balilo, the houses of the Baloloy siblings and those of
Astrologo and Alfredo were located in Lot No. 3353.[24] In
the said sketch plan, Lot No. 3353 had an area of 9,302
square meters, while Lot No. 3347 had an area of 15,905
square meters. When apprised of Hulars claim over the
property, the petitioners and their co-heirs filed a complaint
for unlawful detainer with the Municipal Trial Court of Juban,
docketed as Civil Case No. 331. The case was, however,
dismissed for lack of jurisdiction.
On December 4, 1995, the trial court rendered judgment in
favor of the respondent. The fallo of the decision reads:
a/ Declaring plaintiff the absolute owner of the land in
question, consisting of 1,405 square meters, more or less,
and entitled to the peaceful possession thereof;
b/ Ordering the defendants to reconvey the title to the
plaintiff as far as the land in question is concerned within
fifteen (15) days counted from the finality of the decision,
failing in which, the Clerk of Court is hereby ordered to
execute the necessary document of reconveyance of the title
in favor of the plaintiff after an approved survey plan is
made;
c/ Ordering defendants to remove their houses from the land
in question at their own expense within fifteen (15) days
after the decision has become final;
d/ Ordering the defendants to pay jointly and severally
plaintiff the amount of P5,000.00 as attorneys fees.
P5,000.00 as incidental litigation expenses;
e/ To pay the costs.
SO ORDERED.[25]
The trial court ruled that the property subject of the
complaint, with an area of 1,405 square meters, was part of
Lot No. 3347 which the Spouses Estopin owned, and which
they later sold to Astrologo Hular. The trial court also held
that Iluminado committed fraud in securing the free patent
and the title for the property in question, and that when
Victoriana Lagata executed the deed of absolute sale on the
residential portion of Lot No. 3347, she did not know that it
formed part of Lot No. 3353. It further held that the action of
the plaintiff to nullify the title and patent was
imprescriptible.
The petitioners filed on December 8, 1995 a motion to
reopen the case to admit Tax Declaration Nos. 6957 and
4790 covering Lot No. 3347, under the names of Astrologo
Hular and Victoriana Lagata, respectively, in which it was
declared that Lot No. 3347 was coconut land. The trial court
ruled that the motion had been mooted by its decision.
43
On appeal, the Court of Appeals rendered judgment
affirming the decision of the trial court, and thereafter
denied the motion for reconsideration thereof.
The Present Petition
The petitioners, who are still residing on the subject
property, filed their petition for review on certiorari for the
reversal of the decision and resolution of the Court of
Appeals.
The issues for resolution are:
(1) whether all the indispensable parties had been impleaded
by the respondent in the trial court;
(2) whether the said respondent had a cause of action
against the petitioners for the nullification of Free Patent No.
384019 and OCT No. P-16540; for reconveyance and for
possession of the subject property; and for damages; and
ISSUE:
(3) whether the respondent had acquired ownership over the
property through acquisitive prescription. --- NO!!!!!!!
The first issue, while not raised by the parties in the trial
court and in the Court of Appeals, is so interwoven with the
other issues raised therein and is even decisive of the
outcome of this case; hence, such issue must be delved into
and resolved by this Court.[26]
We note that the action of the respondent in the trial court is
for: (a) reinvidicatoria, to declare the respondent the
absolute owner of the subject property and its reconveyance
to him as a consequence of the nullification of Free Patent
No. 384019 and OCT No. P-16540; (b) publiciana, to order the
petitioners and the other heirs of Iluminado Baloloy to
vacate the property and deliver possession thereof to him;
and (c) damages and attorneys fees.
It is the contention of the respondent that the subject
property was sold by Lagata to his father, Astrologo Hular, in
1961. He adduced evidence that when his parents died
intestate, they were survived by their children, the
respondent and his siblings Elena, Jose, Romeo, Anacleto,

Leo, and Teresita. Article 1078 of the Civil Code provides that
where there are two or more heirs, the whole estate of the
decedent is, before partition, owned in common by such
heirs, subject to the payment of the debts of the deceased.
Until a division is made, the respective share of each cannot
be determined and every co-owner exercises, together with
his co-participants, joint ownership over the pro indiviso
property, in addition to the use and enjoyment of the same.
Under Article 487 of the New Civil Code, any of the co-
owners may bring an action in ejectment. This article covers
all kinds of actions for the recovery of possession, including
an accion publiciana and a reinvidicatory action. A co-owner
may bring such an action without the necessity of joining all
the other co-owners as co-plaintiffs because the suit is
deemed to be instituted for the benefit of all.[27] Any
judgment of the court in favor of the co-owner will benefit
the others but if such judgment is adverse, the same cannot
prejudice the rights of the unimpleaded co-owners. If the
action is for the benefit of the plaintiff alone who claims to
be the sole owner and entitled to the possession thereof, the
action will not prosper unless he impleads the other co-
owners who are indispensable parties.
In this case, the respondent alone filed the complaint,
claiming sole ownership over the subject property and
praying that he be declared the sole owner thereof. There is
no proof that the other co-owners had waived their rights
over the subject property or conveyed the same to the
respondent or such co-owners were aware of the case in the
trial court. The trial court rendered judgment declaring the
respondent as the sole owner of the property and entitled to
its possession, to the prejudice of the latters siblings.
Patently then, the decision of the trial court is erroneous.
Under Section 7, Rule 3 of the Rules of Court, the respondent
was mandated to implead his siblings, being co-owners of the
property, as parties. The respondent failed to comply with
the rule. It must, likewise, be stressed that the Republic of
the Philippines is also an indispensable party as defendant
because the respondent sought the nullification of OCT No.
P-16540 which was issued based on Free Patent No. 384019.
Unless the State is impleaded as party-defendant, any
decision of the Court would not be binding on it. It has been
held that the absence of an indispensable party in a case
renders ineffective all the proceedings subsequent to the
filing of the complaint including the judgment.[28] The
absence of the respondents siblings, as parties, rendered all
proceedings subsequent to the filing thereof, including the
judgment of the court, ineffective for want of authority to
act, not only as to the absent parties but even as to those
present.[29]
Even if we glossed over the procedural lapses of the
respondent, we rule that he failed to prove the material
allegations of his complaint against the petitioners; and that
he is not entitled to the reliefs prayed for.
The burden of proof is on the plaintiff to establish his case by
the requisite quantum of evidence. If he claims a right
granted as created by law or under a contract of sale, he
must prove his claim by competent evidence. He must rely
on the strength of his own evidence and not on the weakness
or absence of the evidence of that of his opponent.[30] He
who claims a better right to real estate property must prove
not only his ownership of the same but also the identity
thereof.[31] In Huy v. Huy,[32] we held that where a property
subject of controversy is duly registered under the Torrens
system, the presumptive conclusiveness of such title should
be given weight and in the absence of strong and compelling
evidence to the contrary, the holder thereof should be
considered as the owner of the property until his title is
nullified or modified in an appropriate ordinary action. A
Torrens Certificate is evidence of an indefeasible title to
property in favor of the person in whose name appears
therein.[33] Such holder is entitled to the possession of the
property until his title is nullified.
The petitioners aver that Lot No. 3347 owned by the Spouses
Estopin was coconut, and not residential, land. The
petitioners contend that, under the deed of absolute sale,
Victoriana Lagata executed on November 25, 1961 in favor of
Astrologo Hular, she sold the residential portion of Lot No.
3347; however, the latter constructed his house on a portion
of Lot No. 3353 which Iluminado had purchased from
Balbedina, now covered by OCT No. P-16540. The petitioners
assert that along with their mother Anacorita and their
brother Antonio Baloloy, they constructed their houses on a
part of Lot No. 3353, titled in the name of their father
Iluminado; hence, they could not be dispossessed of the said
44
property. The petitioners posit that, whether the house of
Hular was constructed on a portion of Lot No. 3353 of the
property of Balbedina or Gruta is irrelevant because both
properties are now covered by OCT No. P-16540 under the
name of Iluminado, their predecessor-in-interest The Court
of Appeals ruled that Victoriana Lagata owned the subject
property, which turned out to be 1,405 square meters, and
sold the same to Hular. In contrast, the RTC declared in its
decision that while under the deed of absolute sale executed
by Irene Griarte in favor of Balbedina, Lot No. 3353 had an
area of 6,666 square meters, Griarte actually owned only
4,651 square meters; a portion of the lot was actually owned
by Lino Estopin. Hence, Balbedina sold only 4,651 square
meters to Iluminado[34] because he was aware that he
owned only 4,651 square meters of the land. It also held
that, unknown to Lagata, a portion of Lot No. 3347 was
declared as part of Lot No. 3353 when the lands in Juban
were surveyed. The trial court concluded that Lagata
erroneously declared, under the deed of absolute sale
executed on November 25, 1961 in favor of Hular, that the
property was part of Lot No. 3347.
The trial and appellate courts erred in their decisions.
The evidence on record shows that Irene Griarte owned a
parcel of land with an area of 6,666 square meters, more or
less.[35] When she sold the property to Martiniano
Balbedina on August 14, 1945, it was bounded on the south
by the property of Lino Estopin. There was no trail yet
between the property of Griarte on the south and of Lino
Estopin on the north. In the meantime, however, a road
(trail) leading to Biriran was established between the
property of Balbedina on the south and that of Lino Estopin
on the north. Thereafter, a cadastral survey of the lands in
Juban was conducted by the Bureau of Lands. The property
of Balbedina was designated as a portion of Lot No. 3353,
while that of Estopin was designated as Lot No. 3347. The
other portion of Lot No. 3353, with an area of 4,561 square
meters, belonged to Alejandro Gruta. Because of the
construction of the road, the property of Balbedina, which
was a part of Lot No. 3353, was reduced to 4,651 square
meters. Balbedina declared, under Tax Declaration No. 391,
that Lot No. 3353 had an area of 4,651 square meters and
was coconut land[36] and that his property was bounded on
the south by a trail (road). Lino Estopin declared Lot No. 3347

under his name for taxation purposes, in which he stated
that his property was bounded on the north by the trail going
to Biriran.[37] Clearly, then, Lot No. 3353 and Lot No. 3347
had a common boundary the trail (road) going to Biriran.
Balbedina sold his property, which was a portion of Lot No.
3353, with an area of 4,651 square meters to Iluminado
Baloloy on June 4, 1951.[38] Under the deed of absolute sale,
the property was bounded on the south by the trail (road)
owned by Lino Estopin.[39] The English translation of the
deed of sale attached as page 85 to the RTC Records, which
both the trial court and the appellate court relied upon, is
incorrect.
The original deed of absolute sale, which is in Spanish, states
that the boundary of the property on the south is con
camino, Lino Estopin, while the English version of the deed,
indicates that the property is bounded on the south by Lino
Estopin. Being an earlier document, the deed in Spanish
signed by the parties therefore should prevail. Conformably
to such deed, Iluminado Baloloy declared in Tax Declaration
No. 5359 under his name that the property is bounded on
the south by a trail,[40] and not by Lot No. 3347 owned by
Lino Estopin.
The respondent failed to adduce any documentary evidence
to prove how the Spouses Estopin acquired the disputed
property. The respondents reliance on the testimonies of
Melissa Estopin, the daughter of the Spouses Estopin, and on
Porfirio Guamos as well as the May 8, 1993 Affidavit of
Martiniano Balbedina, and the deed of sale executed by
Victoriana Lagata on November 27, 1961 in favor of
Astrologo Hular to corroborate his claim over the lot in
question, is misplaced.
First. Per the testimony of Porfirio Guamos, the witness of
the respondent, Lino Estopin purchased the disputed
property in 1941 from Irene Griarte and insisted that there
was a deed of sale evidencing the sale:
Atty. Dealca:
Q The area of the land in question is 1,405 sq. m., you claim
that way back in 1944 the owner of the land was Lino
Estopin; 41 to 44?
45
A 1941. Q That is why, why are you insisting when you did not see a
document?
Q And you said that Lino Estopin was able to acquire the land
by purchase? A Well, during the sale that document was used.
A That was very long time when Lino Estopin sold the Q How was it used when you did not see that document?
property.
A When the deed of sale was executed I did not see the
Q My question is whether you know because you testified document, but I insist there was a document.
earlier that Lino Estopin was able to acquire the land by
purchase; do you confirm that? Q Thats why, how were you able to say before the court that
there was a document when you contend that you did not
A Yes, Sir. see any?
Q From whom? A There was basis in the sale the sale was based on a
document. You cannot sell a property without document?
A From Irene Griarte. (sic)
Q Were you present when that sale was consummated? Q Is that your belief?
A I was not there. A Yes, Sir.
Q So you do not know how much was it bought by Lino Q But you did not see any document?
Estopin from Irene Griarte?
Atty. Diesta:
A No, Sir.
Already answered.
Q You do not know whether a document to that effect was
actually drafted and executed? Witness:
A There was. A I did not see.
Q Have you seen the document? Atty. Dealca:
A I did not see but there was a document. Q You said that that document was used when the property
was sold by Lino Estopin to Alfredo Hular. . .
Q You maintain there was a document but you did not see a
document, is that it? A In 1961. Yes.[41]
A In my belief there was a document. However, the respondent failed to adduce in evidence the
said deed or even an authentic copy thereof. The respondent
Q In your belief, how did you organize that belief when you did not offer any justification for his failure to adduce the
did not see a document? same in evidence. As against the respondents verbal claim
that his father acquired the property from Lagata, the
A I insist there was a document. Torrens title of Iluminado Baloloy must prevail.[42]

Second. The respondent even failed to adduce in evidence
any tax declarations over the disputed property under the
name of Irene Griarte and/or Lino Estopin, or realty tax
payment receipts in their names from 1941 to November
1961. The documents are circumstantial evidence to prove
that Irene Griarte claimed ownership over the disputed
property and that Lino Estopin acquired the same from her.
After all, such tax declarations and tax receipts can be strong
evidence of ownership of land when accompanied by
possession for a period sufficient for acquisitive
prescription.[43]
Third. The respondent even failed to adduce in evidence Tax
Declaration No. 4790 covering the two parcels of land under
the name of Lino Estopin to prove his claim that Lot No. 3347
consisted of agricultural and residential lands. We note that
the petitioners appended a certified true copy of Tax
Declaration No. 4790 under the name of Victoriana Lagata
over Lot No. 3347 to their Motion to Reopen the Case. In the
said declaration, Lot No. 3347 was described as coconut land;
this is contrary to the respondents claim that the said lot was
then residential, and that the boundary of the property on
the north was the road to Biriran which, in turn, is consistent
with the petitioners claim.[44] Unfortunately, the trial court
denied the said motion on the ground that it was mooted by
its decision.
Fourth. During the cadastral survey of lands in Juban, the lot
of Gruta and that of Balbedina, inclusive of the subject
property, were designated as Lot No. 3353 with a total area
of 9,302 square meters under their names, while that of Lino
Estopin was designated as Lot No. 3347 with an area of
15,906 square meters. Iluminado Baloloy applied for a free
patent over Lot No. 3353, including the disputed property,
under his name. The respondent failed to adduce any
evidence that the Spouses Estopin and/or Astrologo Hular
opposed Balbedina and/or Iluminados claim of ownership of
Lot No. 3353 during the survey and after the filing of the
application. A propos is our ruling in Urquiaga v. Court of
Appeals: [45]
As succinctly observed by respondent Court of Appeals in
assessing the totality of the evidence
We do not agree with defendants that they are also the
occupants and possessors of the subject lot just because it is
adjacent to their titled property. Precisely, the boundaries of
defendants titled property were determined, delineated and
surveyed during the cadastral survey of Dipolog and
thereafter indicated in their certificate of title in order that
the extent of their property will be known and fixed. Since
the subject lot was already found to be outside their titled
property, defendants have no basis in claiming it or other
adjacent lots for that matter. Otherwise, the very purpose of
the cadastral survey as a process of determining the exact
boundaries of adjoining properties will be defeated.
Defendants own title, O.C.T. No. 0-357 (in the names of Jose
Aguirre and Cristina Gonzales), in fact belies their claim of
occupation and possession over the adjacent subject lot.
Examining said title, we note that: (1) the cadastral survey of
Dipolog was conducted from January, 1923 to November
1925; (2) defendants titled property was one of those lots
surveyed and this was designated as Lot No. 2623; (3) during
the survey, it was already determined and known that Lot
No. 2623 is bounded on the northeast, southeast, southwest
and west by Lot No. 4443 (as we have seen in our narration
of facts, the subject lot is a subdivision lot of Lot No. 6552
which was originally identified as Lot No. 4443-B-1, Dipolog
Cadastre 85 Ext.: hence, the subject lot is a portion of Lot No.
4443); and (4) O.C.T. No. 0-357 was issued on October 11,
1965 on the strength of the judgment rendered on July 31
(sic), 1941 by the then Court of First Instance of Zamboanga
del Norte in Cadastral Case No. 6, LRC Cadastral Record No.
756.
From the foregoing facts, we find that as early as January,
1923 when the cadastral survey was started, the boundaries
of Lot Nos. 2623 and 4443 were already determined and
delineated. Since the subject lot was surveyed to be part of
Lot No. 4443, it means that during that time defendants
predecessors-in-interest never claimed ownership or
possession over the subject lot. Otherwise, they would have
complained so that the subject lot could be excluded from
Lot No. 4443 and included in Lot No. 2623, they being
adjacent lots. It is obvious then that defendants predecessors
only claimed Lot No. 2623 and they pursued their claim in
Cadastral Case No. 6, LRC Cadastral Record No. 756 until
O.C.T. No. 0-357 was issued to them. The contention of
46
defendants that they and their predecessors-in-interest
occupied and possessed the subject lot since time
immemorial therefore is not true.[46]
Fifth. Under the deed of absolute sale dated November 25,
1961, Lagata sold to Astrologo Hular Lot No. 3347, and not
Lot No. 3353. In Veterans Federation of the Philippines v.
Court of Appeals,[47] we ruled that:
Petitioner VFP maintains that the deed of sale was valid and
enforceable and that it was perfected at the very moment
that the parties agreed upon the thing which was the object
of the sale and upon the price. The parties herein had agreed
on the parcel of land that petitioner would purchase from
respondent PNR, and the same was described therein; thus,
petitioner VFP cannot conveniently set aside the technical
description in this agreement and insist that it is the legal
owner of the property erroneously described in the
certificate of title. Petitioner can only claim right of
ownership over the parcel of land that was the object of the
deed of sale and nothing else.[48]
Sixth. Under the said deed of sale dated November 11, 1961,
Victoriana Lagata sold Lot No. 3347 which had an area of
15,906 square meters and covered by Tax Declaration No.
4790. The deed does not state that what was sold was only a
portion of Lot No. 3347, excluding therefrom the disputed
property. This is understandable, since the subject property
is a portion of Lot No. 3353 owned by Alejandro Gruta and
Iluminado Baloloy, and not of Lino Estopin and/or Victoriana
Lagata. Lagata could not have sold a portion of Lot No. 3353
which she does not own. As the Latin adage goes: NEMO DAT
QUOD NON HABET.
Seventh. The Balbedinas Affidavit dated May 8, 1993 offered
by the respondent to prove the contents thereof is
inadmissible in evidence against the petitioners. Balbedina
did not testify; as such, the petitioners were deprived of their
right to cross-examine him. The said affidavit is thus hearsay
and barren of probative weight. The affidavit varies the
contents of the deed of absolute sale which he (Balbedina)
executed in favor of Iluminado more than forty years earlier.
In the said affidavit, it was made to appear that Balbedina
sold to Iluminado on June 4, 1951 only a portion of Lot 3353
with an area of 3,333 square meters, when under the said

deed of absolute sale, the property that was sold consisted of
4,651 square meters. The affidavit is proscribed by Section 9,
Rule 130 of the Rules of Court, which provides:
Section 9. Evidence of written agreements. - When the terms
of an agreement have been reduced to 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.
...
It bears stressing that the deed of absolute sale executed by
Balbedina in favor of Baloloy was notarized by the Justice of
the Peace who was an Ex-Officio Notary Public; hence,
entitled to full probative weight.
Eighth. The Special Sketch Plan of Lot No. 3353 prepared by
Geodetic Engineer Rodolfo P. Cunanan[49] cannot prevail
over OCT No. P-16540. In fact, the plan even buttressed the
case for the petitioners because it shows that the subject
property is a portion of Lot No. 3353, and not of Lot No.
3347, covered by OCT No. P-16540 under the name of
Iluminado Baloloy, the deceased father of the petitioners.
Ninth. The conclusion of the RTC that Lagata in fact sold a
portion of Lot No. 3347 under the deed of absolute sale
dated November 25, 1961, unaware that the property was a
part of Lot No. 3353, is based on mere speculations and
surmises.
Iluminado Baloloy included in his application for a free patent
the property of Alejandro Gruta, and was able to secure a
free patent over said property in addition to his own. As
such, Gruta, not the respondent, is the proper party to assail
such free patent, as well as OCT No. P-16540 which was
issued based thereon.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED.
The decisions of the Regional Trial Court and the Court of
Appeals are REVERSED and SET ASIDE. The complaint of the
respondent is DISMISSED. No costs.
SO ORDERED.
G.R. No. 205867, February 23, 2015
MARIFLOR T. HORTIZUELA, REPRESENTED BY JOVIER
TAGUFA, Petitioner, v. GREGORIA TAGUFA, ROBERTO
TAGUFA AND ROGELIO LUMABAN, Respondents.
MENDOZA, J.:
This is a petition for review on certiorari under Rule 45 of the
Rules of Court assailing the September 13, 2012 Decision1
and the January 25, 2013 Resolution2 of the Court of Appeals
(CA) in CA- G.R. SP No. 122648 which reversed and set aside
the July 1, 2011 Decision3 of the Regional Trial Court, Branch
22, Cabagan, Isabela (RTC), in an action for reconveyance and
recovery of possession.
The Facts:
The undisputed facts were succinctly summarized in the
August 31, 2010 Decision4 of the 3rd Municipal Circuit Trial
Court, Tumauini-Delfin Albano, Tumauini, Isabela (MCTC)
before which a complaint5 for Reconveyance and Recovery
of Possession with Damages was filed by petitioner Mariflor
Tagufa Hortizuela (Hortizuela) represented by Jovier Tagufa
against respondents Gregoria Tagufa, Roberto Tagufa and
Rogelio Lumaban (respondents). As quoted by the CA, said
undisputed facts are:chanRoblesvirtualLawlibrary
Gleaned from the joint testimonies of R[u]nsted Tagufa xxx
and Jovier Tagufa xxx are the following facts:
The property involved in this case is a parcel of land located
at District IV, Tumauini, Isabela containing an area of 539
square meters, more or less, and covered by OCT No. P-
84609 of the Registry of Deeds of Isabela. By virtue of the
special power of attorney xxx executed by Mariflor Tagufa
Hortizuela, Jovier Tagufa instituted this case against herein
defendants praying for the peaceful surrender of the above-
described property unto them and further ordering
defendant Gregoria Tagufa to reconvey in plaintiff�s favor
the same property which was titled under her name via
fraud.
Before it was titled in the name of Defendant Tagufa, said
property was originally owned by plaintiff�s parents,
Spouses Epifanio Tagufa and Godofreda Jimenez. Although
untitled, the spouses mortgaged the property with the
47
Development Bank of the Philippines (DBP, for brevity). For
failure to redeem the property, DBP foreclosed the same and
sold it to Atty. Romulo Marquez xxx who, in turn, sold it back
to Runsted Tagufa, husband of defendant Gregoria Tagufa,
on April 4, 2002 xxx using the fund sent by plaintiff Hortizuela
who was in America and with the agreement that Runsted
will reconvey the said property to her sister when demanded.
However, plaintiff discovered that the same unregistered
property was titled in the name of Gregoria Tagufa under
OCT No. P-84609 of the Registry of Deeds of Isabela xxx.
Investigating further, plaintiff discovered that Gregoria
Tagufa was able to title the said property by virtue of a free
patent application before the Department of Environment
and Natural Resources (DENR) and the execution of a Deed
of Extrajudicial Settlement of the Estate of the late Spouses
Leandro Tagufa and Remedios Talosig dated May 9, 2003 xxx.
Plaintiff now seeks to recover possession of the said property
which is presently occupied by Gregoria Tagufa and her co-
defendants and have the same be reconveyed unto them.6
ChanRoblesVirtualawlibrary
In its Order, dated May 5, 2010, the MCTC granted the
motion to declare defendants in default and allowed
Hortizuela to present her evidence ex parte.� Thereafter, on
August 31, 2010, the MCTC dismissed the complaint for lack
of merit ruling that �in the judicious analysis by this court,
plaintiffs have resorted to a wrong cause of
action.�7cralawlawlibrary
Not in conformity, Hortizuela appealed to the RTC. In its July
1, 2011 Decision, the RTC reversed the MCTC ruling.� The
decretal portion of the RTC decision reads as
follows:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the appeal is hereby
granted and the Decision dated August 31, 2010, is hereby
REVERSED and judgment is hereby rendered as follows:
Ordering the defendant Gregorio Tagufa to reconvey to the
plaintiff Mariflor Tagufa Hortizuela the land described in
paragraph 4 of the complaint;
Ordering the defendants to vacate the same land and to
surrender the peaceful possession thereof to the plaintiff;
Ordering the defendants to pay to the plaintiff the following
amounts, jointly and severally:

cralawred
a) Fifty Thousand (P50,000.00) Pesos as Moral Damages;
b) Twenty Thousand (P20,000.00) Pesos as Attorney�s Fees.
SO DECIDED.8
Respondents filed a motion for reconsideration, but it was
denied by the RTC.
The reversal being unacceptable to them, respondents filed a
petition for review before the CA questioning the RTC
decision. This time, the case was disposed in their favor.�
According to the CA, although Hortizuela filed with the MCTC
a complaint for reconveyance and recovery of possession of
the subject lot, she was also questioning the validity of the
Torrens title, Original Certificate of Title (OCT) No. P-846609.
9� The CA pointed out that this was in contravention of
Section 48 of Presidential Decree (P.D.) No. 1529 which
provides:chanRoblesvirtualLawlibrary
Sec. 48. Certificate not subject to collateral attack.- 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
It cited the well-settled rule that a Torrens title could not be
collaterally attacked; that the issue of whether or not the
title was fraudulently issued, could only be raised in an action
expressly instituted for that purpose; and that an action for
reconveyance and recovery of possession was not the direct
action contemplated by law.10 Hence, the dispositive portion
of the CA decision reads in this
wise:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the Decision dated July 1,
2011 rendered by the Regional Trial Court of Cabagan,
Isabela, is hereby REVERSED and SET ASIDE. The present
Complaint for reconveyance and recovery of possession with
damages is DISMISSED.
SO ORDERED.11
ChanRoblesVirtualawlibrary
Hortizuela filed a motion for reconsideration, but it was
denied in a Resolution,12 dated January 25, 2013.
Hence, this petition.
ISSUE:
WHETHER OR NOT AN ACTION FOR RECONVEYANCE AND
RECOVERY OF POSSESSION CONSTITUTES AN INDIRECT OR
COLLATERAL ATTACK ON THE VALIDITY OF THE SUBJECT
CERTIFICATE OF TITLE WHICH IS PROSCRIBED BY LAW. -----
NO!!!!!!!!! the complaint of Hortizuela was not a collateral
attack on the title warranting dismissal
Hortizuela claims that respondent Gregoria Tagufa
(Gregoria), being the wife of Runsted, was certainly aware
that the subject land was actually sold by Atty. Romulo
Marquez (Atty. Marquez) to her (Hortizuela). Runsted, only
acted as attorney-in-fact in the sale transaction. Thus, the
action for reconveyance was not a collateral attack on the
said title because Hortizuela was not seeking the nullification
of the title, but rather the reconveyance of the property,
covered by the said title, which Gregoria was holding in trust
for her benefit as the real owner. Gregoria should, therefore,
reconvey the property and its title to her, being the rightful
owner.
Position of Respondents
Respondents counter that although Hortizuela�s complaint
was denominated as one for reconveyance and recovery of
possession, its main objective was to nullify the title held by
Gregoria over the subject property. For said reason, the
complaint would amount to a collateral attack on the title
which was proscribed under the principle of indefeasibility of
a Torrens title. To rule that the action for reconveyance was
not a collateral one would result in the nullity of the decree
of registration.
Another argument that respondents want this Court to
consider in resolving the subject petition is the fact that the
overriding reason why Hortizuela chose to file a complaint
for reconveyance and recovery of possession was that she
failed to avail of the remedy provided under Section 3813 of
Act 496 within the prescribed period of one (1) year, counted
from the issuance of the free patent by the government.
Finally, granting that the title over the property would be
nullified and the property be reconveyed to Hortizuela, still
the latter would be ineligible to own the same pursuant to
Batas Pambansa (B.P.) Blg. 223 which requires, among
48
others, that an applicant for a free patent must be a Filipino
citizen. Hortizuela, by her own admission, is an American
citizen who has been residing in Las Vegas, Nevada.
The Court�s Ruling
The Court finds the petition meritorious.
The Court is not unmindful of the principle of indefeasibility
of a Torrens title and Section 48 of P.D. No. 1528 where it is
provided that a certificate of title shall not be subject to
collateral attack.14 A Torrens title cannot be altered,
modified or cancelled except in a direct proceeding in
accordance with law. When the Court says direct attack, it
means that the object of an action is to annul or set aside
such judgment, or enjoin its enforcement. On the other
hand, the attack is indirect or collateral when, in an action to
obtain a different relief, an attack on the judgment or
proceeding is nevertheless made as an incident thereof.15 In
its decision, the MCTC wrote:chanRoblesvirtualLawlibrary
Obviously, the bone of contention in this case are the deed
of sale by and between Romulo Marquez and Runsted
Tagufa, the estranged husband of defendant Gregoria
Tagufa, and OCT No. P-84609 registered in the name of
Gregoria Tagufa who, according to the plaintiff, fraudulently
caused the titling of the same.
In their lamentations, plaintiff pointed out the following
indicia of fraud committed by Gregoria Tagufa that would
allegedly justify reconveyance:
First, Gregoria Tagufa made it appear in the extrajudicial
settlement of the estate of spouses Leandro Tagufa and
Remedios Talosig that she is an heir when, in truth, she is
only a grand daughter-in-law,
Second, she already knew when she applied for free patent
that plaintiff was already the owner of the land she was
applying for;
Third, she already knew that when she applied for free
patent that plaintiff�s parents were not anymore the
owners of the land as the same was mortgaged with the DBP;
and

Fourth, defendant has never been in actual possession of the
property when she applied for it.
All in all, plaintiff argued, Gregoria Tagufa never acquired any
valid right or legal title over the property.
Studying the merits of this case and removing all its
superfluities, plaintiffs plainly question the title generated in
the name of defendant Gregoria Tagufa having been
obtained by fraud and misrepresentation. However, in the
judicious analysis by this court, plaintiffs have resorted to a
wrong cause of action.16
ChanRoblesVirtualawlibrary
From the foregoing, it can be deduced that the MCTC was
convinced that fraud was attendant in the registration of the
land but was not convinced that reconveyance was an
accepted remedy.
Contrary to the pronouncements of the MCTC and the CA,
however, the complaint of Hortizuela was not a collateral
attack on the title warranting dismissal. As a matter of fact,
an action for reconveyance is a recognized remedy, an action
in personam, available to a person whose property has been
wrongfully registered under the Torrens system in
another�s name. In an action for reconveyance, the decree
is not sought to be set aside. It does not seek to set aside the
decree but, respecting it as incontrovertible and no longer
open to review, seeks to transfer or reconvey the land from
the registered owner to the rightful owner. Reconveyance is
always available as long as the property has not passed to an
innocent third person for value.17cralawlawlibrary
There is no quibble that a certificate of title, like in the case
at bench, can only be questioned through a direct
proceeding. The MCTC and the CA, however, failed to take
into account that in a complaint for reconveyance, the
decree of registration is respected as incontrovertible and is
not being questioned. What is being sought is the transfer of
the property wrongfully or erroneously registered in
another's name to its rightful owner or to the one with a
better right. If the registration of the land is fraudulent, the
person in whose name the land is registered holds it as a
mere trustee, and the real owner is entitled to file an action
for reconveyance of the property.18cralawlawlibrary
The fact that Gregoria was able to secure a title in her name
does not operate to vest ownership upon her of the subject
land. �Registration of a piece of land under the Torrens
System does not create or vest title, because it is not a mode
of acquiring ownership. A certificate of title is merely an
evidence of ownership or title over the particular property
described therein. 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 others. Its issuance in favor of a
particular person does not foreclose the possibility that the
real property may be co-owned with persons not named in
the certificate, or that it may be held in trust for another
person by the registered owner.�19cralawlawlibrary
Furthermore, respondents� argument that the overriding
reason why Hortizuela chose to file a complaint for
reconveyance and recovery of possession was that she failed
to avail of the remedy provided under Section 38 of Act 496
within the prescribed period of one (1) year, counted from
the issuance of the patent by the government, is weak. As
was similarly held in Cervantes v. CA,20 with the land
obtained by respondent Gregoria through fraudulent
machinations by means of which a free patent and a title
were issued in her name, she was deemed to have held it in
trust for the benefit of Hortizuela who was prejudiced by her
actions. Article 1456 provides:chanRoblesvirtualLawlibrary
ARTICLE 1456. If 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.
The remedy of reconveyance, based on Section 53 of P.D. No.
1529 and Article 1456, prescribes in ten (10) years from the
issuance of the Torrens title over the property.
The Court is not unaware of the rule that a fraudulently
acquired free patent may only be assailed by the government
in an action for reversion� pursuant to Section 101 of the
Public Land Act.21 In Sherwill Development Corporation v.
Sitio Sto. Ni�o Residents Association, Inc.,22 this Court
pointed out that:chanRoblesvirtualLawlibrary
49
x x x It is to the public interest that one who succeeds in
fraudulently acquiring title to a public land should not be
allowed to benefit therefrom, and the State should,
therefore, have an even existing authority, thru its duly-
authorized officers, to inquire into the circumstances
surrounding the issuance of any such title, to the end that
the Republic, thru the Solicitor General or any other officer
who may be authorized by law, may file the corresponding
action for the reversion of the land involved to the public
domain, subject thereafter to disposal to other qualified
persons in accordance with law. In other words, the
indefeasibility of a title over land previously public is not a
bar to an investigation by the Director of Lands as to how
such title has been acquired, if the purpose of such
investigation is to determine whether or not fraud had been
committed in securing such title in order that the appropriate
action for reversion may be filed by the Government.23
ChanRoblesVirtualawlibrary
An action for reconveyance is proper
The foregoing rule is, however, not without exception. A
recognized exception is that situation where plaintiff-
claimant seeks direct reconveyance from defendant of public
land unlawfully and in breach of trust titled by him, on the
principle of enforcement of a constructive trust. This was the
ruling in Larzano v. Tabayag, Jr.,24� where it was
written:chanRoblesvirtualLawlibrary
A private individual may bring an action for reconveyance of
a parcel of land even if the title thereof was issued through a
free patent since such action does not aim or purport to re-
open the registration proceeding and set aside the decree of
registration, but only to show that the person who secured
the registration of the questioned property is not the real
owner thereof.
In Roco, et al. v. Gimeda, we stated that if a patent had
already been issued through fraud or mistake and has been
registered, the remedy of a party who has been injured by
the fraudulent registration is an action for reconveyance,
thus:
cralawred
It is to be noted that the petition does not seek for a
reconsideration of the granting of the patent or of the decree

issued in the registration proceeding. The purpose is not to
annul the title but to have it conveyed to plaintiffs.
Fraudulent statements were made in the application for the
patent and no notice thereof was given to plaintiffs, nor
knowledge of the petition known to the actual possessors
and occupants of the property. The action is one based on
fraud and under the law, it can be instituted within four
years from the discovery of the fraud. (Art. 1146, Civil Code,
as based on Section 3, paragraph 43 of Act No. 190.) It is to
be noted that as the patent here has already been issued, the
land has the character of registered property in accordance
with the provisions of Section 122 of Act No. 496, as
amended by Act No. 2332, and the remedy of the party who
has been injured by the fraudulent registration is an action
for reconveyance. (Director of Lands vs. Registered of Deeds,
92 Phil., 826; 49 Off. Gaz. 3 935; Section 55 of Act No. 496.)
In the same vein, in Qui�iano, et al. v. Court of Appeals, et
al., we stressed that:chanRoblesvirtualLawlibrary
The controlling legal norm was set forth in succinct language
by Justice Tuason in a 1953 decision, Director of Lands v.
Register of Deeds of Rizal. Thus: �The sole remedy of the
land owner whose property has been wrongfully or
erroneously registered in another's name is, after one year
from the date of the decree, not to set aside the decree, as
was done in the instant case, but, respecting the decree as
incontrovertible and no longer open to review, to bring an
ordinary action in the ordinary court of justice for
reconveyance or, if the property has passed into the hands
of an innocent purchaser for value, for damages." Such a
doctrine goes back to the 1919 landmark decision of Cabanos
v. Register of Deeds of Laguna. If it were otherwise the
institution of registration would, to quote from Justice
Torres, serve "as a protecting mantle to cover and shelter
bad faith ...." In the language of the then Justice, later Chief
Justice, Bengzon: "A different view would encourage fraud
and permit one person unjustly to enrich himself at the
expense of another." It would indeed be a signal failing of
any legal system if under the circumstances disclosed, the
aggrieved party is considered as having lost his right to a
property to which he is entitled. It is one thing to protect an
innocent third party; it is entirely a different matter, and one
devoid of justification, if [deceit] would be rewarded by
allowing the perpetrator to enjoy the fruits of his nefarious
deed. As clearly revealed by the undeviating line of decisions
coming from this Court, such an undesirable eventuality is
precisely sought to be guarded against. So it has been before;
so it should continue to be. (Citations omitted)
In this case, in filing the complaint for reconveyance and
recovery of possession, Hortizuela was not seeking a
reconsideration of the granting of the patent or the decree
issued in the registration proceedings. What she was
seeking was the reconveyance of the subject property on
account of the fraud committed by respondent Gregoria. An
action for reconveyance is a legal and equitable remedy
granted to the rightful landowner, whose land was
wrongfully or erroneously registered in the name of
another, to compel the registered owner to transfer or
reconvey the land to him.25 Thus, the RTC did not err in
upholding the right of Hortizuela to ask for the reconveyance
of the subject property. To hold otherwise would be to make
the Torrens system a shield for the commission of fraud. To
reiterate,
The fact that petitioner was able to secure a title in her name
did not operate to vest ownership upon her of the subject
land. Registration of a piece of land under the Torrens
System does not create or vest title, because it is not a mode
of acquiring ownership. A certificate of title is merely an
evidence of ownership or title over the particular property
described therein. 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 others. Its issuance in favor of a
particular person does not foreclose the possibility that the
real property may be co-owned with persons not named in
the certificate, or that it may be held in trust for another
person by the registered owner.26
ChanRoblesVirtualawlibrary
Finally, respondents� supposition that Hortizuela was
ineligible to own the subject property pursuant to B.P. Blg.
223 because she was no longer a Filipino citizen cannot be
considered for having been raised only for the first time on
appeal. It must be noted that points of law, theories, issues,
and arguments not brought to the attention of the trial court
ought not to be considered by a reviewing court, as these
cannot be raised for the first time on appeal.27 The reason
therefor is due process.
50
WHEREFORE, the petition is GRANTED. The September 13,
2012 Decision and the January 25, 2013 Resolution of the
Court of Appeals in CA- G.R. SP No. 122648� are hereby
REVERSED and SET ASIDE. The July 1, 2011 Decision of the
Regional Trial Court, Branch 22, Cabagan, Isabela, is hereby
REINSTATED.
SO ORDERED.
[G.R. No. 129980. September 20, 2004]
ALFREDO APUYAN, represented by ERNESTO A. ARABEJO,
petitioner, vs. EVANGELINE A. HALDEMAN, RENATO
RADONA, DIONISIO RADONA, DOMINGO RADONA,
FRANCISCO RADONA, JOSE RADONA, JR., JOSE RADONA,
SR., ISIDRO RADONA, JOSE QUIJANO, EVANGELINE
PARADEZA and FLOREN ARAMAN, respondents.
AZCUNA, J.:
This is a petition for review on certiorari of the Decision of
the Court of Appeals dated April 29, 1997 and its Resolution
dated July 22, 1997 denying petitioners motion for
reconsideration.
The factual antecedents are as follows:
On June 20, 1994, petitioner Alfredo R. Apuyan filed before
the Regional Trial Court of Iba, Zambales, Branch 69, a
petition[1] for quieting of title with prayer for preliminary
injunction and damages against respondents, docketed as
Civil Case No. RTC-1055-I. On November 3, 1994, petitioner
filed an amended petition.[2] He claimed that he is the
registered owner of a parcel of land, with an area of 5.5860
hectares, situated at Locloc, Palauig, Zambales, designated as
Lot No. 1083 (Cad. 364-D), and covered by Original Certificate
of Title No. P-11962. He alleged that respondents claim
ownership over a portion of said parcel of land on the basis
of deeds of absolute sale in their favor, which cast a doubt on
his title over the property.
Petitioner prayed for the issuance of a temporary restraining
order and, thereafter, the issuance of a writ of preliminary
injunction upon payment of a bond, and that after due
proceedings, judgment be rendered, as follows:

a) Making the writ of preliminary injunction permanent.
b) Ordering the defendants, Evangeline Haldeman, Renato
Radona, Dionisio Radona, Doming[o] Radona, Francisco
Radona, Jose Radona, Jr., Jose Radona, Sr., Isidro Radona,
Jose Quijano, Jose Sevilla, Evangeline Paradeza and Floren
Araman to surrender to the Honorable Court their alleged
Deeds of Absolute Sale;
c) Ordering that, after the defendants surrender of the
[Deeds] of Absolute [Sale], the same be ordered cancelled;
d) Ordering the defendants to pay jointly and severally to the
plaintiff the sum of P20,000.00 as and for attorneys fees, plus
P2,000.00 as and for [counsels] court appearance fee per
hearing;
e) Ordering each of the defendants to pay P20,000.00 as
moral damages to the plaintiff, plus P10,000.00 exemplary
damages.[3]
The trial court issued a writ of preliminary injunction after
petitioner filed a bond of P20,000.[4]
On November 10, 1994, respondents filed an Amended
Answer[5] alleging, among others, that they have been in
possession of their respective properties since 1962, and that
petitioner procured his title to the subject property through
fraudulent misrepresentation in his application for free
patent. They stated that there was an ongoing protest filed
with the Department of Environment and Natural Resources
(DENR) for the cancellation of and/or recommendation of the
DENR to cancel petitioners title. (Respondents filed the
protest within one year after the issuance of the patent to
petitioner.)
Respondents also alleged that the ejectment case filed by
petitioner against them was decided in their favor, and the
criminal charges filed before the Fiscals Office attacking the
genuineness of their Deeds of Sale were dismissed.
Respondents prayed for the dismissal of the complaint on the
ground of pendency of an action and/or lack of cause of
action and, in the alternative, for the declaration of
petitioners title as null and void and that petitioners title be
cancelled.
On January 16, 1995, the trial court ordered the suspension
of the hearing of the case, as prayed for by the parties
counsels, until the termination of the proceedings before the
DENR.
In an Order[6] dated January 23, 1994 [should be 1995], the
Regional Executive Director of the DENR, Region III, San
Fernando, Pampanga, dismissed respondents protest, thus:
From the allegations of the protestants, it is crystal clear that
the lot in dispute has already been patented and
corresponding certificate of title was already issued in favor
of the herein respondent, hence, in the eyes of the law, the
same became private land from the time the subject patent
was issued.
Worthy of note at this juncture, is that the Office of the
Solicitor General is presently suspending actions for either
cancellation of free patent and reversion or cancellation of
title involving private lands. Thus, even assuming arguendo
that the protestants allegation of fraud and
misrepresentation in the acquisition of patent is true, this
Office could not recommend the institution of reversion
proceedings to the Office of the Solicitor General in view of
the latters suspension of all actions for reversion and/or
cancellation of title. It bears stressing that the Office of the
Solicitor General is the sole government agency vested by
law with authority to institute reversion proceedings and/or
cancellation of title. This Office believes that the protestants
rights and interest will be adequately protected and their
grievances properly ventilated if they, themselves, are the
ones who will initiate appropriate action for cancellation
before the ordinary court of justice.
On February 20, 1995, the trial court scheduled the case for
hearing after the termination of the proceedings before the
DENR.
On August 22, 1995, a pre-trial conference was held where
the parties entered into a pre-trial agreement, thus:
xxx
51
2. Plaintiff and defendants admit that OCT No. P-11962 was
issued in July 1993 over a parcel of land situated at Locloc,
Palauig, Zambales with an area of 55,860 square meters and
which is identified as Lot No. 1083, Cadastral No. 364-D, a
xerox copy of which is attached as Annex A of the complaint
which the defendants admit to be a faithful reproduction of
the original.
3. Plaintiff and defendants admit that defendants are
presently occupying the premises without prejudice to the
submission of any survey plan to be submitted by the
defendants during the trial;
4. Plaintiff and defendants admit that a protest was filed by
the defendants at DENR, San Fernando, Pampanga asking for
the cancellation of the title issued to the plaintiff but it was
dismissed by the DENR by Order dated 23 January 1994 x x x;
xxx
FACTUAL ISSUES TO BE RESOLVED
1. Whether or not the issuance of Original Certificate of Title
No. P-11962 was through fraud;
ISSUE:
2. Whether or not the defendants are the owners of the
corresponding portions of the land occupied by them.[7]
During the hearing held on November 21, 1995, petitioner
manifested that he was no longer adducing further evidence
because of the admissions contained in the Pre-trial Order
dated August 22, 1995, and rested his case.[8]
Thereafter, respondents presented their evidence and
established the following facts:
1) That the property subject matter of the litigation with an
area of 5.9800 hectares or 59,800 square meters was
declared for taxation purposes in the name of Apolinario
Apuyan under Tax Declaration No. 12662 for the year 1944
(Exhibit 1).

2) On 04 September 1944, Apolinario Apuyan, then 44 years
of age, Filipino and a widower, executed a Pacto de Retro
Sale (Exhibits 2 and 2-A) in favor of Segundo Dador over the
said parcel of land before Notary Public Jesus T. Amon who
entered the document in his notarial register as Document
No. 9, Page 3, Book I, Series of 1944, and which deed of sale
was registered with the Register of Deeds on 05 September
1944 (Exhibit 2-B) for which the corresponding entry and
registration fee under Official Receipt No. 0175555 (Exhibit 2-
C) was paid. Apolinario Apuyan (and his heirs) failed to
repurchase the property within the period of five (5) years as
provided for in the Pacto de Retro Sale (Exhibits 2 and 2-A)
and because of this Segundo Dador executed an Affidavit for
Consolidation of Ownership (Exhibit 3) on 18 November 1949
before Notary Public Jesus T. Amon who entered the same in
his notarial register as Document No. 280, Page 82, Book XII,
Series of 1949 which was registered with the Register of
Deeds also on 18 November 1949 (Exhibit 3-A) for which the
corresponding entry and registration fees under Official
Receipts Nos. A 18045186 (Exhibit 3-B) and 4095175 (Exhibit
3-C) were paid.
3) Segundo Dador declared the property for taxation
purposes per Tax Declaration No. 19288 (Exhibit 4) for the
year 1953 with a notation at the bottom thereof which
states: taxes paid up to and including 1952. Segundo Dador
paid the corresponding real property taxes thereafter up to
the year 1960 (Exhibits 4-A, 4-B, 4-C, 4-D, 4-E, and 4-F). While
the location of the property in Tax Declaration No. 12662 is
Liozon, Palauig, Zambales and the location in Tax Declaration
No. 19288 is Locloc Balite, Palauig, Zambales, the area and
boundaries in both tax declarations are the same.
4) On 15 January 1960, Segundo Dador executed a Deed of
Absolute Sale (Exhibit 4-G) in favor of Emerita Abdon, of legal
age, Filipino, and widow, before Notary Public Esteban Q.
Amon who entered the same in his notarial register as
Document No. 3, Page 55, Book I, Series of 1960, over the
subject parcel of land. Corresponding Tax Declaration No.
20362 (Exhibit 5) was issued in favor of Emerita Abdon who
paid the corresponding real property taxes for the years 1961
and 1962 (Exhibits 5-A and 5-B).
5) The subject parcel of land was mortgaged by Emerita
Abdon in favor of the Rural Bank of San Narciso, Inc. per Real
Estate Mortgage dated 23 May 1960 (Exhibit 6) which was
registered with the Register of Deeds (Exhibit 6-A).
6) On 17 December 1964, Emerita Abdon executed a deed of
absolute sale (Exhibit 9) in favor of Jose Radona over a
portion of the subject parcel of land equivalent to 53,425
square meters before Notary Public Pablo M. Amog who
entered the same in his notarial register as Document No. 79,
Page 12, Book XV, Series of 1964, and the remaining portion
of 6,000 square meters was sold to Jaime R. Abdon per Deed
of Absolute Sale (Exhibits 10 and 10-A) executed by Emerita
Abdon before Notary Public Pablo M. Amog on 26 January
1972 who entered the same in his notarial register as
Document No. 16, Page 40, Book XVII, series of 1972.
7) Jaime Abdon sold his 6,000 square meters to the
following:
a) In favor of Salvador Radona, 2,553 square meters per Deed
of Absolute Sale of a Portion of Real Estate dated 22 May
1972 (Exhibit 11) and Deed of Absolute Sale dated 09 June
1972 (Exhibit 12);
b) In favor of Wilfredo Paradeza, 400 square meters per Deed
of Absolute Sale of a Portion of Real Estate dated 09 June
1972 (Exhibit 13);
c) In favor of Ernesto Abdon, 400 square meters per Deed of
Absolute Sale of a Portion of Real Property dated 09
November 1972 (Exhibit 14), and who, in turn sold the same
in favor of Avelino Paradeza per Deed of Absolute Sale dated
19 April 1976 (Exhibit 4-D). Avelino Paradeza sold the same
to Evangeline Paradeza Sison per Deed of Absolute Sale
dated 09 March 1978 (Exhibit 14-G);
d) In favor of Teofilo Alarcon, 1,311 square meters per Deed
of Absolute Sale of a Portion of Real Property dated 09
November 1972 (Exhibits 15 and 15-A). The same parcel of
land was sold by Teofilo Alarcon to Daniel Rivas per Deed of
Absolute Sale of a Portion of Real Property dated 14
September 1976 (Exhibit 15-G). After the death of Daniel
Rivas, his heirs, namely, Eustaquia Ramos, Modesta R. Mayo
and Felimon Rivas executed an Extra-judicial Settlement of
Estate with Absolute Sale in favor of Salvador Bergado over
the same portion (Exhibit 15-J). Salvador Bergado in turn sold
52
the same portion to Spouses Floren Araman and Martina
Asiatico per Absolute Deed of Sale dated 27 February 1980
(Exhibit 15-O), who in turn sold the same to Evangeline
Araman Haldeman per Deed of Absolute Sale dated 10
September 1987 (Exhibit 15-Q);
e) In favor of Gregorio Sevilla, 400 square meters per Deed of
Absolute Sale of a Portion of Real Property dated 09
November 1972 (Exhibits 16 and 16-A);
f) In favor of Jose Quijano, 400 square meters per Deed of
Absolute Sale of a Portion of Real Estate dated 29 November
1982 (Exhibits 17 and 17-A).
8) Corresponding real property taxes were paid by the
defendants as appearing in Exhibits 11-A to 11-II, 13-G to 13-
W, 15-C-1, 15-C-3 and 15-K.
9) It appears that plaintiff filed his application for free patent
(page 32 of the Records) with the then Bureau of Lands
under the Ministry of Natural Resources [for] the subject
parcel of land sometime on April 1, 1985 and in support
thereof filed a deed of relinquishment of rights and waiver
(Exhibit 7-F) executed by the surviving legal heirs of the
deceased Apolinario Apuyan, father of the plaintiff, in favor
of the plaintiff; joint affidavit (Exhibit 8-A) of a certain
Ramerio Paradeza and Elpidio Vanilla; the affidavit of the
plaintiff himself; the notice of application for free patent
(Exhibit 7-C) which was unsigned and a letter of the
department land inspector Doroteo Asuncion (Exhibit 7-E)
recommending the granting of the application for free patent
of the plaintiff. Apparently, there was no notice to the
defendants of the application for free patent of the plaintiff.
While free patent No. 037108-93-2320 was issued on 07 July
1993, the defendants Renato Radona, Evangeline Paradeza
Sison, Isidro Radona, Floren Araman and a certain Jose
Quijano were invited to a conference on November 24, 1993
(Exhibit D).[9]
Petitioner, thereafter, adduced rebuttal evidence.
According to the trial court, from the rebuttal evidence
adduced by petitioner, there was nothing to controvert the
evidence for the respondents, except that petitioner was
appointed chief of the rural police of Locloc-Balite on

October 4, 1940. The trial court also found that Exhibit E,
which is the Findings/Decision of the Chairman of the Lupong
Tagapayapa at Barangay Locloc, Palauig, Zambales, shows
that said chairman assumed the role of a judge of a municipal
trial court and ordered the respondents to vacate the
premises, which was beyond the power and jurisdiction of
the Lupong Tagapayapa.[10]
The trial court held that petitioner was guilty of fraud and
misrepresentation when he filed his application for free
patent in 1985. It also ruled that the respondents are the
owners of the corresponding portions of land occupied by
them (subject to judicial or administrative legalization) not
only by virtue of the documentary and oral evidence adduced
during the trial of the case, but likewise by the dismissal of
the ejectment case filed by petitioner against the
respondents and the criminal case for falsification filed by
petitioner against the respondents with the Provincial
Prosecutors Office.[11]
In its decision dated October 9, 1996, the trial court
pronounced judgment, thus:
WHEREFORE, premises considered, judgment is rendered in
favor of the defendants and against the plaintiff as follows:
1) The amended petition filed by the plaintiff against the
defendants is dismissed;
2) Free Patent No. 037108-93-3230 and Original Certificate of
Title No. P-11962 are declared null and void;
3) The Register of Deed for the Province of Zambales is
directed to cancel Original Certificate of Title No. P-11962 in
the name of plaintiff Alfredo Apuyan; and
4) The land in question is reverted to the public domain for
which the defendants may file their application for
legalization of their ownership.
SO ORDERED.[12]
Petitioner received a copy of said decision on October 17,
1996. On November 4, 1996, the last day for filing an appeal,
petitioner filed a motion for reconsideration, which was
denied by the trial court in its Order[13] dated January 7,
1997. Petitioner received said Order of denial on January 14,
1997. On the same day, petitioner filed a Notice of
Appeal,[14] thus:
Plaintiff, by counsel unto this Honorable Court, hereby
respectfully give notice that they are appealing to the
Honorable Court of Appeals the order dated January 7, 1997,
copy of which was received by plaintiff on January 14, 1997,
the Order being contrary to law and jurisprudence and not
supported by evidence.
WHEREFORE, it is respectfully prayed that the entire records
be forthwith elevated to the Honorable Court.
In an Order[15] dated January 22, 1997, the trial court denied
the notice of appeal for lack of merit since petitioner only
appealed from the Order of the Court dated January 7, 1997
denying his motion for reconsideration and not the decision
itself dated October 9, 1996 which finally disposed the case.
Petitioner received the Order of January 22, 1997 on January
28, 1997. On January 31, 1997, petitioner filed a motion for
reconsideration.[16] He contended that while his notice of
appeal only mentioned the Order of January 7, 1997, it
inadvertently failed to mention clearly that what was being
appealed included the decision of October 9, 1996, although
the last paragraph of said notice of appeal stated:
Wherefore, it is respectfully prayed that the entire records
be forthwith elevated to the Honorable Court. He prayed
that his notice of appeal be amended to include the decision
of the trial court dated October 9, 1996.
On February 11, 1997, the trial court issued an Order[17]
denying petitioners motion for reconsideration, thus:
xxx
The record shows that on 17 October 1996, plaintiff thru
counsel received a copy of the Decision dated 09 October
1996. Apparently, the 15th day from receipt of the
reglementary period fell on 01 November 1996, a Friday and
a holiday. The motion for reconsideration of the decision was
filed on the next business day, 04 November 1996. An order
dated 07 January 1997 was issued denying the motion, and a
53
copy of which was received by plaintiff thru counsel on 14
January 1997. Subsequently, a Notice of Appeal was filed on
the same day but was denied per order of the Court dated 22
January 1997 which order was allegedly received by counsel
for the plaintiff on 28 January 1997. The motion for
reconsideration under consideration was filed on 31 January
1997 or three (3) days after.
Obviously, plaintiff failed to perfect his appeal and the failure
to perfect the appeal rendered the judgment of this Court
final and executory (Bank of America vs. Gerochi, Jr., 230
SCRA 9).
WHEREFORE, the Motion for Reconsideration dated January
30, 1997 filed by plaintiff is denied for lack of merit.
On February 14, 1997, respondents filed a Motion[18] for
Issuance of a Writ of Execution. Petitioner opposed said
motion on the ground of prematurity and non-compliance
with the rules on notice and hearing.
The trial court, however, issued an Order[19] dated February
18, 1997 setting said motion for hearing on March 12, 1997.
On March 20, 1997, petitioner filed with the Court of Appeals
a petition for certiorari and prohibition with prayer for
issuance of a temporary restraining order and/or a writ of
preliminary injunction to forestall execution of judgment.
Petitioner prayed for the following reliefs:
1. Upon the filing of the instant petition and pending notice
and hearing, a Temporary Restraining Order (TRO) be
forthwith issued enjoining, preventing and prohibiting all the
respondents from implementing, enforcing and executing
any writ of execution that may be issued in this case, the
purpose of which is certainly to render moot and academic
and ineffectual the instant petition;
2. Upon hearing the case on its merits but before judgment,
a writ of preliminary injunction be issued enjoining,
preventing and prohibiting respondents from doing the acts
heretofore mentioned in No. 1 above;
3. Thereafter, judgment be issued annulling and setting aside
the assailed Orders dated 22 January 1997 and 11 February

1997 issued by the respondent trial court, and a new
judgment be issued ordering the trial court to give due
course to petitioners notice of appeal and to reinstate
petitioners appeal therefrom.[20]
On April 29, 1997, the Court of Appeals rendered its Decision
that dismissed the petition, the dispositive portion thereof
stating, thus:
WHEREFORE, the present petition for certiorari and
prohibition, with prayer for issuance of a temporary
restraining order and/or a writ of preliminary injunction, is
hereby DENIED DUE COURSE and the same is DISMISSED.[21]
The Court of Appeals observed that the notice of appeal filed
with the [trial] court on January 14, 1997 was not from the
decision, but from the order denying the motion for
reconsideration, which cannot be done.[22] It stated that
although the notice of appeal prayed for the elevation of the
entire records to the Court of Appeals, it did not cure the
defect in the notice of appeal.[23] It held that since no
appeal was perfected from the trial courts decision within
the reglementary period, deducting the time during which a
motion for reconsideration had been pending, the decision
became final and executory.[24] Hence, the Court of Appeals
ruled that it did not acquire jurisdiction over the appealed
case and had only the power to dismiss it.[25]
Petitioner filed a motion for reconsideration, which was
denied by the Court of Appeals in its Resolution[26] dated
July 22, 1997.
In the meantime, on April 29, 1997, the trial court ordered
the issuance of a writ of execution.[27]
On May 19, 1997, petitioner filed an Urgent Motion to Lift
and/or Quash Order of Execution.[28]
On June 9, 1997, the sheriff of the trial court filed his Sheriffs
Return[29] stating that he served a copy of the writ of
execution to petitioners attorney-in-fact by leaving it with his
nephew, Ferdinand Valdez; that on June 6, 1997, he (the
sheriff) received a photocopy of Original Certificate of Title
No. P-11962 from the Register of Deeds of Zambales
confirming the cancellation of the same document in
compliance with the decision of the trial court.
On July 1, 1997, the trial court issued an Order[30] denying
the Motion to Lift and/or Quash Order of Execution for being
moot and academic considering that a return was already
submitted to the trial court showing that the writ of
execution was fully satisfied.
Aggrieved by the aforesaid decision and resolution of the
Court of Appeals, petitioner filed the instant petition under
Rule 45 of the Rules of Court.
In his Memorandum, petitioner raised the following issues:
I progress of an action nor shall it be the subject of appeal
WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY
ERRED IN HOLDING THAT THE INADVERTENT OMISSION IN
THE PETITIONERS NOTICE OF APPEAL TO INCLUDE THE TRIAL
COURTS DECISION AS BEING APPEALED FROM IS FATAL TO
PETITIONERS APPEAL.
II
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED
IN REFUSING TO RULE ON THE MERITS OF PETITIONERS CASE
AND TO DELVE ON THE PATENTLY ERRONEOUS DECISION OF
THE TRIAL COURT.
III
WHETHER OR NOT SERIOUS ERRORS AND IRREGULARITIES
WERE COMMITTED BY THE TRIAL COURT IN ITS DECISION
WHEN IT ORDERED THE CANCELLATION OF THE FREE PATENT
AND TITLE OF THE PETITIONER, IN REVERTING THE LAND IN
QUESTION TO THE PUBLIC DOMAIN AND IN RULING THAT
THE RESPONDENTS MAY FILE THEIR APPLICATION FOR
LEGALIZATION OF THEIR OWNERSHIP OVER THE SUBJECT
PROPERTY, OVERLOOKING THE FACT THAT PETITIONER IS
THE RIGHTFUL OWNER OF THE LAND IN QUESTION AND
WHOSE TITLE THERETO AND THAT OF HIS PREDECESSOR-IN-
INTEREST HAD ALREADY BECOME INDEFEASIBLE AND
INCONTROVERTIBLE.[31]
54
In his first assigned error, petitioner contends that the Court
of Appeals erred in holding that his inadvertent omission to
include in his notice of appeal that he was appealing from
the trial courts decision was fatal to his appeal.
We agree.
Under the Rules of Court, only judgments or final orders of
the Regional Trial Court shall be subject to appeal. At the
time petitioner filed his notice of appeal on January 14, 1997,
Rule 41 of the Rules of Court provided:
Sec. 2. Judgments or orders subject to appeal.-- Only final
judgments or orders shall be subject to appeal. No
interlocutory or incidental judgment or order shall stay the
until final judgment or order is rendered for one party or the
other.
Section 9 of Rule 37[32] and Section 1 of Rule 41[33] of the
present Rules of Civil Procedure, which took effect on July 1,
1997, provide:
Rule 37, Sec. 9. Remedy against order denying a motion for
new trial or reconsideration.An order denying a motion for
new trial or reconsideration is not appealable, the remedy
being an appeal from the judgment or final order.
Rule 41, Sec. 1. Subject of appeal.An appeal may be taken
from a judgment or final order that completely disposes of
the case, or of a particular matter therein when declared by
these Rules to be appealable.
No appeal may be taken from:
(a) An order denying a motion for new trial or
reconsideration;
xxx
In all the above instances where the judgment or final order
is not appealable, the aggrieved party may file an
appropriate special action under Rule 65. (Emphasis
supplied.)

In Republic v. Court of Appeals,[34] we stated, thus:
It is true the present Rules of Civil Procedure took effect only
on July 1, 1997 whereas this case involves an appeal taken in
February 1995. But Rule 37, 9 and Rule 41, 1 (a) simply
codified the rulings in several cases to the effect that an
order denying a motion for reconsideration is interlocutory in
nature and, therefore, is not appealable. These rules,
therefore, are not really new.
In this case, petitioner filed his appeal within the
reglementary period. However, he did not appeal from the
trial courts decision dated October 9, 1996 which disposed
the case, but from the trial courts Order dated January 7,
1997, denying his motion for reconsideration of the decision
of the trial court.
Can we consider said appeal from the Order denying a
motion for reconsideration of the judgment of the trial court
as an appeal from a final order?
We rule in the affirmative.
In the recent case of Quelnan v. VHF Philippines, Inc.,[35] we
held, thus:
[T]his Court finds that the proscription against appealing
from an order denying a motion for reconsideration refers to
an interlocutory order, and not to a final order or judgment.
That that was the intention of the above-quoted rules is
gathered from Pagtakhan v. CIR, 39 SCRA 455 (1971), cited in
above-quoted portion of the decision in Republic, in which
this Court held that an order denying a motion to dismiss an
action is interlocutory, hence, not appealable.
The rationale behind the rule proscribing the remedy of
appeal from an interlocutory order is to prevent undue delay,
useless appeals and undue inconvenience to the appealing
party by having to assail orders as they are promulgated by
the court, when they can be contested in a single appeal. The
appropriate remedy is thus for the party to wait for the final
judgment or order and assign such interlocutory order as an
error of the court on appeal.
The denial of the motion for reconsideration of an order of
dismissal of a complaint is not an interlocutory order,
however, but a final order as it puts an end to the particular
matter resolved, or settles definitely the matter therein
disposed of, and nothing is left for the trial court to do other
than to execute the order.
Not being an interlocutory order, an order denying a motion
for reconsideration of an order of dismissal of a complaint is
effectively an appeal of the order of dismissal itself.
The reference by petitioner, in his notice of appeal, to the
March 12, 1999 Order denying his Omnibus MotionMotion
for Reconsideration should thus be deemed to refer to the
January 17, 1999 Order which declared him non-suited and
accordingly dismissed his complaint.
If the proscription against appealing an order denying a
motion for reconsideration is applied to any order, then
there would have been no need to specifically mention in
both above-quoted sections of the Rules final orders or
judgments as subject to appeal. In other words, from the
entire provisions of Rule 39 and 41, there can be no
mistaking that what is proscribed is to appeal from a denial
of a motion for reconsideration of an interlocutory order.
Similarly, in the instant case, the trial courts Order dated
January 7, 1997 denying petitioners motion for
reconsideration of the trial courts decision dated October 9,
1996 is not an interlocutory order, but a final order, as the
trial court finally resolved therein the issues raised in the
motion for reconsideration, which were already passed upon
in the trial courts decision.
Petitioners reference in his notice of appeal to the Order of
the trial court dated January 7, 1997 denying petitioners
motion for reconsideration should also be deemed to refer to
the decision of the trial court dated October 9, 1996, which
was the subject of the motion for reconsideration.
In effect, petitioner appealed from the final order of the trial
court dated January 7, 1997 and the decision of the trial
court dated October 9, 1996, which appeal was filed on time.
55
Hence, the Court of Appeals erred in dismissing the
petitioners petition for certiorari and in not ruling that the
trial court gravely abused its discretion in refusing to give due
course to petitioners appeal.
In his second assigned error, petitioner contends that the
Court of Appeals erred in not deciding the case on the merits.
And in his third assigned error, petitioner questions the
validity of the trial courts decision in ordering the
cancellation of his free patent and title over the subject
property and in reverting the property to the public domain
when his title to the property is already indefeasible.
The normal procedure is that the merits of the main case are
to be resolved in the appeal and not in the certiorari
proceedings to allow such appeal. [36]
In the interest of speedy dispensation of justice, we resolve
to make an exception to the normal procedures considering
that this case has been pending for ten years. In Leonor v.
Court of Appeals,[37] we made an exception to the normal
procedures and delved deeper into the substantive issue of
the validity/nullity of the trial courts proceedings and
judgment as we also considered the delay caused to the
parties of the case. We held, thus:
Upon the other hand, remanding the case back to the trial
court for the perfection of the appeal and requiring the
parties to relitigate in the Court of Appeals with the use of
probably the same documents and arguments ventilated in
the kilometric pleadings filed here would just unnecessarily
clog the courts dockets; besides, in all likelihood the parties
would eventually come before this Court anyway.
Also it must be observed that Virginia actually filed a proper
Notice of Appeal which the trial court disallowed. Hence, she
had no choice but to bring her petition for certiorari in the
respondent Court. To constrain her to go back to said court,
this time by ordinary appeal, would be tantamount to
punishing her and delaying her cause for faults not
attributable to her, but rather to the manifest error of the
respondent trial judge.[38]
Hence, in the same manner, we proceed to decide the case
on the merits to provide the parties speedy relief.

ISSUE:
The main issue is whether or not the trial court erred in
ruling that petitioner is not the rightful owner of the subject
property, ---- NO!!!!!!!! having procured his title to the
property through fraud and misrepresentation, and that
respondents are the rightful owners of the portions of the
property occupied by them, subject to judicial or
administrative legalization.
Petitioner claims that he is the rightful owner of the subject
property by virtue of his title to the same, which has become
indefeasible. Petitioner argues that the trial court erred,
thus:
1) In not holding that the pacto de retro sale allegedly
executed by Apolinario Apuyan in 1944 is a fictitious
document;
2) In holding that the petitioner herein committed fraud and
misrepresentation in his application [for] a free patent over
the property in question;
3) In holding that petitioner gave up his claim of ownership
of the property when he transferred to another place with
his wife;
4) In holding that petitioner has not presented evidence
showing his possession, or that he introduced improvement
on the land in question;
5) In holding that the respondents were not notified of the
proceedings in the petitioners application of the free patent
before the Bureau of Lands.[39]
As regards the first argument, we do not agree with
petitioner that the Pacto de Retro Sale allegedly executed by
his father in 1944 is a fictitious document.
Significantly, the Pacto de Retro Sale and the Affidavit for
Consolidation of Ownership were both notarized and
registered with the Register of Deeds; hence, they are public
documents. Public documents are evidence, even against a
third person, of the fact which gave rise to their execution
and of the date of the latter.[40] Petitioner failed to
satisfactorily rebut the aforementioned evidence presented
by respondents and prove that the pacto de retro sale is
fictitious.
As the trial court correctly ruled:
Assuming for the sake of argument that the pacto de retro
sale is fictitious, noteworthy is the fact that said contract
including the affidavit for consolidation of ownership were
registered with the Register of Deeds of Zambales which
have the effect of giving notice to the whole world of its
existence. Plaintiff (petitioner herein) should have stood
guard to protect whatever rights he has. Almost fifty (50)
years had lapsed when the instant case was filed. Moreover,
the land subject of the litigation was then unregistered and
could, therefore, be acquired thru acquisitive prescription.
There is no question that defendants and their predecessors-
in-interest were in possession of said property for more than
thirty (30) years.
Article 1137 of the Civil Code provides as follows:
Art. 1137. Ownership and other real rights over immovables
also prescribe through uninterrupted possession thereof for
thirty years, without need of title or of good faith.[41]
Moreover, petitioner faulted the trial court for holding that
he committed fraud and misrepresentation in his application
for free patent over the property in question.
We disagree.
The trial court correctly found that petitioner was guilty of
fraud and misrepresentation when he filed his application for
free patent in 1985 for the following reasons:
a) He knew for a fact that his father, Apolinario Apuyan, who
died in 1945, was no longer the owner of the subject parcel
of land (Lot No. 1083, Cad. 364-D, Palauig Cadastre) because
of the sale with right to repurchase made by his father in
favor of Segundo Dador on 04 September 1944 which was
duly registered with the Register of Deeds of Zambales and
when plaintiffs father and his heirs failed to repurchase the
property within the period of five (5) years as provided in the
Pacto de Retro Sale, the buyer Segundo Dador executed an
affidavit for consolidation of ownership which likewise was
56
registered with the Register of Deeds of Zambales. From that
time on, Apolinario Apuyan and all his successors-in-interest
(his heirs) lost all their rights over the subject property and
yet when the plaintiff filed his application for free patent, the
heirs executed a deed of relinquishment of rights and waiver
over the subject property by the surviving legal heirs of the
deceased Apolinario Apuyan, father of the plaintiff, in favor
of the plaintiff. Plaintiff claims that the sale with right to
repurchase is fictitious as his father could not read and write.
The document is more that fifty (50) years old and cannot
now be repudiated considering that it was registered with
the Register of Deeds of Zambales and therefore a public
document.
b) By his own testimony, he left Barangay Locloc-Balite
sometime in 1958 or 1959 and resided at Barangay Bato,
both at Palauig, Zambales, and there he started to till a land
and became a vice barrio lieutenant at Barangay Bato and
later became the barangay captain of said barangay as
testified to by him (Tsn, 14 May 1996, pp. 9-11) as follows:
Q- And you said that later you transferred to Barrio Bato,
when was that?
A - Ever since 1958 or 1959, I was already there in Barrio
Bato, sir.
Q - What were you doing there in Barangay Bato?
A - I was tilling a land there, sir, and when election comes
(sic), I ran for the position of vice-barrio lieutenant at
Barangay Bato. On the following term, I ran for barrio
lieutenant until it was changed to barangay captain, and I
won in all those elections.
Q - Were you also elected as barangay captain?
A - Yes, sir. I was even appointed by Governor Barretto as
Municipal Councilor and after the term, I ran for Municipal
Councilor and I won.
c) On rebuttal, plaintiff never presented any tax declaration
or tax receipt showing his possession over the subject
property and neither were there any evidences introduced to

show that he had introduced improvements on the subject
parcel of land.
xxx
d) In the pre-trial agreement, plaintiff admitted that
defendants are in possession of the subject property and no
evidence was ever presented that plaintiff was ever in
possession of the property.[42]
Further, Section 44 of Commonwealth Act No. 141,
otherwise known as the Public Land Act, as amended by
Republic Act No. 6940,[43] provides for the qualification of
an applicant for the grant of a free patent over agricultural
public land, thus:
Any natural-born citizen of the Philippines who is not the
owner of more than twelve (12) hectares and who, for at
least thirty (30) years prior to the effectivity of this
amendatory Act, has continuously occupied and cultivated,
either by himself or through his predecessors-in-interest a
tract or tracts of agricultural public lands subject to
disposition, who shall have paid the real estate tax thereon
while the same has not been occupied by any person shall be
entitled, under the provisions of this Chapter, to have a free
patent issued to him for such tract or tracts of such land not
to exceed twelve (12) hectares.
In this case, petitioner has not complied with the
requirement of continuous occupation and cultivation of the
subject property since he admitted during the trial[44] and
stated in his Memorandum that he transferred to Barangay
Bato, Palauig, Zambales and resided there in 1958, so that
when he filed his application for free patent in 1985, he was
no longer occupying the land he was applying for in Locloc,
Palauig, Zambales. In addition, respondents were then in
possession of their respective portions of the property in
question. Hence, petitioner could not have qualified to apply
for a free patent over the subject property.
Petitioner contends that the trial court erred in holding that
he gave up his claim of ownership of the subject property
when he and his wife lived in another barangay (Barangay
Bato) in 1958 or thereabout.
We disagree.
Petitioners transfer to Barangay Bato, Palauig, Zambales in
1958 was an abandonment of any claim he had over the
subject property. As mentioned earlier, under Section 44 of
Commonwealth Act No. 141, as amended, an applicant for a
free patent must have, among others, continuously occupied
and cultivated, either by himself or through his predecessors-
in-interest, a tract or tracts of agricultural public lands
subject to disposition to be entitled to the issuance of such
patent.
Next, petitioner contends that the trial court erred in holding
that he has not presented evidence showing his possession
or that he had introduced improvements on the land in
question.
We disagree.
As found by the trial court, petitioner neither presented any
tax declaration or tax receipt showing his possession of the
property nor any evidence showing that he had introduced
improvements on the land.
Petitioner, however, points out that the certification[45]
issued on October 15, 1992 by Jovencio M. Mendi, OIC
district supervisor of Region III, Division of Zambales, Palauig
District, stating that we are fully aware that the said parcel of
land [has] been continuously pursued and developed by the
herein instant claimant Alfredo R. Apuyan, impliedly shows
that he and his predecessor-in-interest had introduced
improvements on the land.
We find that said letter/certification is insufficient to prove
particular improvements introduced on the land. It also does
not prove that petitioner continuously occupied and
cultivated the property.
In view of petitioners admission that he was already residing
in another barangay (Barangay Bato) in 1958, we cannot give
credence to petitioners insistence that he has long been in
prior, continuous possession of the subject property before
the issuance of the patent, and that he merely allowed the
respondents to stay on the land by tolerance.
57
Petitioner also contends that respondents were properly
notified of the proceedings before the issuance of the free
patent.
We agree.
Section 46 of Commonwealth Act No. 141, as amended,
provides:
Sec. 46. If, after the filing of the application and the
investigation, the Director of Lands shall be satisfied of the
truth of the allegations contained in the application and that
the applicant comes within the provisions of this chapter, he
shall cause a patent to issue to the applicant or his legal
successor for the tract so occupied and cultivated, provided
its area does not exceed twenty-four hectares: Provided,
That no application shall be finally acted upon until notice
thereof has been published in the municipality and barrio in
which the land is located and adverse claimants have had an
opportunity to present their claims. (Emphasis supplied.)
Under Section 2[46] of Republic Act No. 782,[47] it is the
Director of Lands who shall cause notices of the application
to be posted in conspicuous places in the capital of the
province, the municipality and the barrio where the land
applied for is situated for a period of two consecutive weeks,
requiring in said notices everyone who has any interest in the
matter to present his objections or adverse claims, if any,
before the application is granted.
Section 3[48] of Republic Act No. 782 further provides that at
the expiration of the period of posting of the said notices, the
Director of Lands, if satisfied with the truth of the statements
contained in the application and in the affidavits attached
thereto and that the applicant comes within the provisions of
said Act, shall issue the corresponding title in favor of the
applicant for the tract of land applied for if there were no
objections or adverse claims registered in his office.
Thus, a notice of the application did not have to be sent or
given personally to the respondents since it would be posted
in the municipality and barrio where the land is located.
In the absence of proof to the contrary, it is presumed that
the Director of Lands regularly performed his duty in causing

the notice of petitioners application to be posted in the
municipality and barrio where the land is located.
To show that respondents were properly notified about his
application before the issuance of the free patent, petitioner
incorrectly referred to the conference held by Rolando P.
Mallari, special investigator of the DENR, with respondents
Renato Radona, Evangeline Paradeza Sison, Isidro Radona,
Floren Araman and Jose Quijano, which was held on
November 24, 1993 in connection with the protest they filed
against petitioner after the issuance of the free patent.[49]
The presumed posting of notices to inform adverse claimants
of petitioners application, however, does not change the fact
that petitioner was not qualified to apply for a free patent in
1985 over the subject property because he no longer
occupied the same since 1958, and the property was then
occupied by the respondents.
In view of the foregoing, the trial court correctly found that
respondents are the rightful owners of the corresponding
portions of the property occupied by them, subject to judicial
or administrative legalization. It also properly dismissed
petitioners petition for the quieting of his title under Article
476[50] of the Civil Code, after finding that respondents
claim of ownership over the subject property is valid.
Petitioner, however, contends that his title is already
indefeasible; hence, the trial court erred in ordering the
cancellation of his free patent and title, and in reverting the
subject property to the public domain.
In Republic v. Court of Appeals,[51] we cited Republic v.
Mina,[52] and Piero, Jr. v. Director of Lands,[53] thus:
xxx
A certificate of title that is void may be ordered cancelled.
And, a title will be considered void if it is procured through
fraud, as when a person applies for registration of the land
on the claim that he has been occupying and cultivating it. In
the case of disposable public lands, failure on the part of the
grantee to comply with the conditions imposed by law is a
ground for holding such title void. x x x The lapse of one (1)
year period within which a decree of title may be reopened
for fraud would not prevent the cancellation thereof for to
hold that a title may become indefeasible by registration,
even if such title had been secured through fraud or in
violation of the law would be the height of absurdity.
Registration should not be a shield of fraud in securing title.
Justifying the above-quoted provision, the Court declared in
Piero, Jr. v. Director of Lands:
It is true that under Section 122 of the Land Registration Act,
a Torrens title issued on the basis of a free patent or a
homestead patent is as indefeasible as one judicially secured.
And in repeated previous decisions of this Court that
indefeasibility has been emphasized by Our holding that not
even the Government can file an action for annulment, but at
the same time, it has been made clear that an action for
reversion may be instituted by the Solicitor General, in the
name of the Republic of the Philippines. It is to the public
interest that one who succeeds in fraudulently acquiring title
to a public land should not be allowed to benefit therefrom,
and the State should, therefore, have an ever existing
authority, thru its duly authorized officers, to inquire into the
circumstances surrounding the issuance of any such title, to
the end that the Republic, thru the Solicitor General or any
other officer who may be authorized by law, may file the
corresponding action for the reversion of the land involved to
the public domain, subject thereafter to disposal to other
qualified persons in accordance with law. In other words, the
indefeasibility of a title over land previously public is not a
bar to an investigation by the Director of lands as to how
such title has been acquired, if the purpose of such
investigation is to determine whether or not fraud had been
committed in securing such title in order that the appropriate
action for reversion may be filed by the Government.[54]
It is, therefore, clear that a certificate of title, issued on the
basis of a free patent, that is procured through fraud or in
violation of the law may be cancelled, and indefeasibility of
the title is no defense.
It is true that under the law, it is the Solicitor General or the
officer acting in his stead who is authorized under Section
101[55] of Commonwealth Act No. 141, as amended, to
institute an action for reversion in the name of the Republic
of the Philippines.
58
A private person is, as a rule, not the proper party to bring
such a suit. However, this Court, in the exercise of its equity
jurisdiction, may directly resolve the issue of alleged fraud in
the acquisition of a public land patent although the action is
instituted by a private person, to the end that substantial
justice may be dispended to the party litigants, rather than
leaving the present controversy unresolved and subject to a
circuitous and tedious process.[56]
WHEREFORE, the Decision and Resolution of the Court of
Appeals are MODIFIED so as to sustain petitioners timely
appeal but the decision of the trial court in Civil Case No.
RTC-1055-I is AFFIRMED.
No costs.
SO ORDERED.
[G.R. No. 128967. May 20, 2004]
PAULINO SACDALAN, ROMEO GARCIA, NUMERIANO
BAUTISTA, LEONARDO SACDALAN and SANTIAGO
SACDALAN, petitioners, vs. COURT OF APPEALS and BELEN
LOPEZ DE GUIA represented by her Attorney-in-Fact MELBA
G. VALENZUELA, respondents.
AUSTRIA-MARTINEZ, J.:
Before this Court is a petition for review under Rule 45 of the
Rules of Court, seeking the reversal of the decision of the
Court of Appeals (CA for brevity) in CA-G.R. SP No. 39315
dated June 28, 1996[1] and its resolution dated April 23,
1997 denying petitioners motion for reconsideration.[2]
The facts of the case as found by the CA are as follows:
Belen Lopez Vda. de Guia is the owner of two parcels of
agricultural land in Sta. Barbara, Baliwag, Bulacan covered by
TCT No. 209298 with an area of 197,594 square meters.
Without her knowledge, her son Carlos de Guia forged a
deed of sale on March 19, 1975 and made it appear that she
sold the land to him. As a result, TCT No. 209298 was
cancelled and a new title, TCT No. T-210108, was issued in his
name. The following day, Carlos sold the property to Ricardo
San Juan who immediately registered the deed of sale with
the Register of Deeds of Bulacan. Consequently, TCT No.

210338 was issued in his name. Later, Ricardo mortgaged the
two parcels of land to Simeon Yangco.
Upon learning of the said incidents, Belen filed an adverse
claim with the Register of Deeds of Bulacan and a civil case
for cancellation of sale, reconveyance and damages against
her son Carlos de Guia, Ricardo San Juan and Simeon Yangco
with the Court of First Instance of Baliwag, Bulacan (CFI for
brevity) which was docketed as Civil Case No. 655-B.[3] On
January 20, 1981, the CFI dismissed the complaint, the
dispositive portion of which is quoted verbatim, as follows:
WHEREFORE, judgment is hereby rendered dismissing the
complaint and affirming the deed of sale executed by
plaintiff in favor of her son defendant Carlos de Guia, and
Carlos de Guias sale in favor of Ricardo San Juan.
That plaintiff reimburses the palay withdrawn by her and in
the event of failure, the supersedeas bond be declared
confiscated and forfeited in favor of defendant San Juan.
That plaintiff pays defendants attorneys fees in the sum of
P1,000.00 plus costs.
SO ORDERED.[4]
Belens motion for reconsideration was denied through an
Order dated September 9, 1981.[5] She then appealed to the
then Intermediate Appellate Court (IAC for brevity), docketed
as AC-G.R. CV No. 5524-UDK. The IAC dismissed the appeal
per its Resolution dated April 19, 1983 for non-payment of
docket fees. The dismissal became final and executory on
May 17, 1983[6] and an Entry of Judgment was issued on
June 21, 1983. The records of the case were remanded to the
court of origin on July 6, 1983. A writ of execution was issued
by the CFI on motion of Ricardo San Juan.[7]
The tenants-lessees of the property, namely: Romeo Garcia,
Numeriano Bautista together with Paulino, Leonardo and
Santiago, all surnamed Sacdalan, (petitioners for brevity),
invoked their right to redeem the landholdings pursuant to
Section 12 of Republic Act No. 3844, as amended.[8]
Accordingly, Ricardo San Juan executed a Deed of
Reconveyance dated October 24, 1983 in favor of said
tenants-lessees. Upon registration of the document, TCT No.
T-210338 was cancelled and TCT No. T-301375 was issued in
the names of the said tenants. The land was later subdivided
into several lots and individual titles were issued in their
names.[9]
Belens counsel sent a letter of inquiry to the Clerk of Court of
the IAC dated January 11, 1984 and learned for the first time
that their appeal docketed as AC-G.R. CV No. 5524-UDK has
been dismissed for non-payment of docket fees.[10] She filed
with the IAC a motion to reinstate the appeal,[11] and on
May 21, 1984, the IAC issued a Resolution granting her
motion, thus:
WHEREFORE, in the interest of justice, the motion to re-
instate appeal is hereby GRANTED and the Clerk of Court of
the Court of Origin is hereby ordered to elevate the records
of Civil Case No. 655-B to this Court for purposes of the
appeal.
SO ORDERED.[12]
Acting on the reinstated appeal, docketed as AC-G.R. CV No.
02883, the IAC promulgated its decision on February 20,
1986,[13] the dispositive portion of which reads:
WHEREFORE, the decision appealed from is hereby
REVERSED and SET ASIDE and another one entered:
(1) declaring as null and void and without any effect
whatsoever the deed of sale executed by and between
appellant Belen Lopez Vda. de Guia and defendant Carlos de
Guia, Exhibit A;
(2) declaring defendant-appellee Ricardo San Juan as a
purchaser in bad faith and ordering him to reconvey to
appellant the two (2) parcels of land described in the
complaint;
(3) ordering the Register of Deeds of Bulacan to cancel
and/or annul TCT No. T-210338 in the name of defendant-
appellee Ricardo San Juan as well as TCT No. T-210108 in the
name of defendant-appellee Carlos de Guia for being null
and void and to reinstate TCT No. 209298 in the name of
appellant as the true and valid title over the lands described
therein; and
59
(4) ordering the defendants-appellees to pay the costs.
SO ORDERED.[14]
The decision became final on March 15, 1986 and on
November 7, 1986,[15] the records of the case were
remanded to the former CFI now Regional Trial Court (RTC
for brevity).
On December 18, 1986, Belen filed with the RTC a motion for
execution which was granted. However, before the writ
could be executed, she found that Ricardo San Juan had sold
the two parcels of land to petitioners. She then filed with the
RTC a motion to declare San Juan, petitioner and other
tenants of the land in contempt of court for circumventing
the final and executory judgment of the Court of Appeals[16]
in AC-G.R. CV No. 02883.
In an Order dated October 12, 1987, the RTC declared San
Juan, petitioners and all the other tenants concerned in
contempt of court, and ordered each of them to pay a fine of
P200.00, reconvey and deliver to Belen her two parcels of
land and her share in the harvest. The fallo reads:
WHEREFORE, defendant Ricardo San Juan and his co-
defendants Mariano Bautista, Numeriano Bautista, Pelagio
Bautista, Hermogenes Dimaapi, Romeo Garcia, Bonifacio
Sacdalan, Crispin Sacdalan, Santiago Sacdalan, Santos
Leonardo, Felipe Leonardo, Leonardo Fajardo, and Emilio
Victoria, are hereby declared in contempt of Court for utterly
disregarding and circumventing the decision of the Court of
Appeals which is final and executory and are fined P200.00
each; ordering the defendants Mariano Bautista, et al., to
reconvey the litigated landholding to the plaintiff Belen de
Guia and to deliver to the latter or her duly authorized
representative her share in the palay and mongo harvest in
the next harvest season.
SO ORDERED.[17]
Herein petitioners filed with the CA, a petition for certiorari,
docketed as CA-G.R. SP. No. 14783, assailing the RTC Order
dated October 12, 1987 as having been issued with grave
abuse of discretion.

On July 6, 1989, the CA promulgated its decision holding that
while herein petitioners should not have been considered in
contempt of court by the RTC, it did not commit any error in
ordering them to reconvey the parcels of land to Belen de
Guia. It held that:
Ricardo San Juan was not the owner of the land and
therefore he had no right or title which he could legally
convey to anyone, a fact even admitted by petitioners
(Petition, p.7). It must also be said that while petitioners
were not parties to Civil Case No. 655-B, they could not have
been unaware of the dispute over the land. They claim to be
tenants thereof. The inevitable conclusion is the sale to
petitioners was void from the beginning.
Respondent Judge therefore did not commit any error in
ordering the petitioner to reconvey the lands to Belen de
Guia. As a matter of fact, such was not even necessary. The
cancellation of the titles of Carlos and San Juan and the
reinstatement of Belens title by virtue of the appellate
decision carried with them as a logical consequence the
cancellation of petitioners title and any pretended right over
the land. Petitioners cannot claim refuge behind their title; to
permit them to do so would be to put a premium on bad
faith. Such is never the aim of the torrens system.
...
WHEREFORE, except for the portion holding petitioners in
contempt and ordering them to pay a fine of P200.00 each,
which is eliminated, the order of respondent Judge dated
October 12, 1987 is AFFIRMED.
No costs.
SO ORDERED.[18] (Emphasis supplied)
The decision became final and executory on July 31, 1989.
[19]
Eight months before said date, or on November 8, 1988,
Belen, through her attorney-in-fact, Melba G. Valenzuela,
had filed with the DARAB, Region III at Malolos, Bulacan, a
complaint for ejectment and collection of rentals against
herein petitioners.[20] Belen alleged that they are her
tenants-lessees who have been cultivating the subject
property since 1970 up to the present; that starting 1981,
they have not been paying their rent; and that despite
demands to pay the rent and vacate the premises, they failed
and refused to do so.[21] Petitioners contend that they are
the registered owners of the landholdings, having acquired
the same from Ricardo San Juan. As such, they no longer
have any obligation to pay rentals to Belen whose title
thereto has long been cancelled.[22]
On March 16, 1993, almost five years from the filing of the
complaint for ejectment and four years after the CA decision
in CA-G.R. SP No. 14783 had become final, Atty. Jose V.
Reyes, Provincial Adjudicator, rendered a decision denying
Belens complaint for ejectment and collection of rent. The
dispositive portion reads:
WHEREFORE, premises considered, the Board finds the
instant case wanting of merit, the same is hereby dismissed.
Consequently, the Transfer Certificate of Title Nos. T-307845,
T-307846, T- 307856, T-307857, T-307869, T-307870, T-
307871, T-307873, and T-307874 issued in the names of
Numeriano Bautista, Romeo Garcia, Leonardo Sacdalan,
Paulino Sacdalan and Santiago Sacdalan, respectively, are
hereby AFFIRMED. The plaintiff and all other persons acting
in her behalf are hereby ordered to permanently cease and
desist from committing any acts tending to oust or eject the
defendants or their heirs or assign from the landholding in
question.
SO ORDERED.[23]
Upon appeal, the DARAB affirmed the decision. Complainant
filed a motion for reconsideration but was denied by
DARAB.[24]
Belen then appealed to the CA, docketed as CA-G.R. SP No.
39315. The CA reversed the DARAB in its decision dated June
28, 1996,[25] ruling as follows:
At this juncture, it is pertinent to state that nothing is more
settled in the law than when a final judgment becomes
executory, the same becomes immutable and unalterable,
can no longer be modified in any respect and that all the
issues in between the parties are deemed resolved and laid
60
to rest. Likewise, it is a well-enshrined principle that litigation
must at some time be terminated, even at the risk of
occasional errors, for public policy dictates that once a
judgment becomes final, executory and unappealable, the
prevailing party should not be denied the fruits of his victory
by some subterfuge devised by the losing party.
Consequently, We deem it appropriate to write finis to the
case at bench considering that the title to the property in
controversy has already been adjudicated by this Court to
herein petitioner in AC-G.R. CV No. 02883 and CA-G.R. SP No.
14783, hence she has the right to eject herein private
respondents for their failure to pay rents since 1981.
WHEREFORE, the petition is hereby GRANTED. The decision
of respondent DARAB affirming the decision of the Provincial
Adjudicator is REVERSED and SET ASIDE and another one is
entered ordering private respondents to vacate immediately
the two parcels of land covered by T.C.T. No. T-209298 and
to deliver possession thereof to the petitioner, as well as the
rentals due corresponding to the period from 1981 up to the
time they shall have left the landholdings. Considering that
the amount of rentals have not been determined, let this
matter be threshed out in a proper hearing before another
Provincial Adjudicator who should conduct the same with
dispatch.
COSTS against the private respondents.
SO ORDERED.[26]
A subsequent motion for reconsideration filed by petitioners
was denied by the CA on April 23, 1997.[27]
Hence, the present petition for review, raising the following
issues:
1. WHETHER OR NOT, UNDER EXISTING LAW AND
JURISPRUDENCE, PETITIONERS AS TENANTS-LESSEES IN THE
EXERCISE OF THEIR RIGHTS OF REDEMPTION UNDER SECTION
12 OF REPUBLIC ACT NO. 3844 ARE PURCHASERS IN GOOD
FAITH;
2. CAN THE INTERMEDIATE APPELLATE COURT IN AC-G.R. CV
NO. 02883 REINSTATE THE APPEAL AND RENDER A SECOND

DECISION AFTER ITS DECISION DISMISSING THE APPEAL IN
AC-G.R. CV NO. 5524-UDK BECAME FINAL AND EXECUTORY,
WHICH DECISION WAS REMANDED TO THE LOWER COURT
FOR EXECUTION, AND IN FACT, BEEN EXECUTED; AND
3. WHETHER OR NOT, PETITIONERS, WHO ARE HOLDERS OF
TRANSFER CERTIFICATES OF TITLES BOUND BY THE SECOND
DECISION OF THE INTERMEDIATE APPELLATE COURT IN AC-
G.R. CV NO. 02883. [28]
While petitioners raise three issues, as quoted above, only
two questions are actually crucial for the resolution of the
present petition:
ISSUE:(1) Was the reinstatement of Belen de Guias appeal
valid? --- YES!!!!!! and (2) Are petitioners bound by the
decision rendered by the Court of Appeals on July 6, 1989 in
CA-G.R. SP No. 14783?--- YES!!!!!!!
After reviewing the records of the case, we find the present
petition to be devoid of merit.
Belens appeal from the decision of the CFI was dismissed on
April 19, 1983 for non-payment of docket fees which becAme
final and executory. However, upon her motion, the appeal
was reinstated on May 21, 1984 by the IAC explaining that:
After weighting (sic) the respective arguments of the parties,
this Court finds that justice and equity must play a heavy role
in the determination of the motion to reinstate the appeal.
As gleaned from the records, from the filing of the notice of
appeal, appeal bond and record on appeal, plaintiff-appellant
had been in earnest effort to elevate her case to this Court.
This is indicated by her having engaged the services of a
second lawyer to pursue her appeal.
While, it is true that notice to counsel is binding upon the
client the said rule is not here applicable. The notice was not
actually received by the counsel to whom it was sent. And
although the notice was re-sent to the party herself, still the
same was not returned to this Court with the notation
moved out. Since the records indicate the presence of a
corroborating counsel for the plaintiff-appellant, the notice
should have been re-sent to this counsel, if only to give
justice to the parties who have exerted efforts to perfect
their appeal only to be lost by technicality.
while the rule is that mistake or negligence of the lawyer
binds the client, in the interest of justice and because the
appellee itself also failed to file its comment on the instant
motion despite receipt of the resolution of this Court on
October 16, 1983, the entry of judgment is set aside.
WHEREFORE, in the interest of justice, the motion to re-
instate appeal is hereby GRANTED and the Clerk of Court of
the Court of origin is hereby ordered to elevate the records
of Civil Case No. 655-B to this Court for purposes of the
appeal.
SO ORDERED.[29] (citations omitted)
Petitioners, citing Perfecto Fabular vs. Court of Appeals,[30]
argue that since the judgment of the CFI had long become
final and had in fact been executed, it was already beyond
the power of the appellate court to modify the same;[31]
and therefore, the IAC erred in reinstating Belen de Guias
appeal. The Court is not persuaded to grant their petition.
The Court has recognized instances when reinstatement of
an appeal was deemed just and proper considering the
greater interest of justice.[32] This case is one of them. The
IAC, on April 19, 1983, dismissed Belen de Guias appeal for
non-payment of docket fees. It is settled however that failure
to pay the appeal docket fee confers on the court a mere
directory power to dismiss an appeal which must be
exercised with sound discretion and with a great deal of
circumspection considering all attendant circumstances.
Dismissal of an appeal based on this ground is discretionary
with the appellate court and should be exercised wisely and
prudently with a view to substantial justice.[33]
As noted by the IAC in its decision dated May 21, 1984 in AC-
G.R. CV No. 5524-UDK, Belen failed to pay the appeal docket
fee, not because of lack of interest, but because of lack of
proper notice. It was only upon the inquiry of Belens
corroborating counsel that they found out, for the first time,
the dismissal of her appeal. The Court is aware of its ruling in
Arambulo vs. Court of Appeals[34] that failure of the counsel
to inquire from either the trial or the appellate court the
61
status of their appeal particularly as to the payment of
docket fees, constitutes negligence sufficient to merit the
dismissal of the appeal.[35] However, the fact that the
appeal of Belen involved her claim that her own son Carlos
de Guia forged her signature in a deed of sale transferring to
him the ownership of her two parcels of land, the IAC did not
commit any reversible error nor grave abuse of discretion in
reinstating the appeal. The interest of substantial justice far
outweighs whatever negligence Belen and her counsel might
have committed.
Significantly, it must be emphasized that petitioners
purported predecessor-in-interest did not question the
reinstatement of the appeal and allowed the same to be final
and executory. Thus, for all legal interests and purposes, the
reinstatement of the appeal is valid and binding upon the
parties and their successors-in-interest, including herein
petitioners.
Petitioners further claim that they are purchasers in good
faith since Ricardo San Juan was the registered owner when
they bought the subject landholdings on October 10, 1983
from him.[36] They likewise argue that while there was a
second decision rendered by the IAC in AC-G.R. CV No.
02883, said decision does not bind them since they were not
parties in said action and said proceeding was in personam
and not in rem, thus, a direct action should have been
instituted against them for the lower court to acquire
jurisdiction over their persons.[37]
Here enters the importance of the second issue, i.e., whether
or not petitioners are bound by the CAs decision in CA-G.R.
SP. No. 14783 dated July 6, 1989.
As borne by the records, petitioners filed before the CA a
petition for certiorari, docketed as CA-G.R. SP. No. 14783,
from the order of the RTC dated October 12, 1987 holding
them in contempt of court and ordering them to reconvey
the property to Belen. Except as to the findings that
petitioners were in contempt of court, the CA affirmed the
trial court in its decision dated July 6, 1989 and declared in
no uncertain terms that Ricardo San Juan was not the owner
of the land and therefore he had no right or title which he
could legally convey to anyone, a fact even admitted by
petitioners; that while petitioners were not parties to Civil

Case No. 655-B, they could not have been unaware of the
dispute over the land because they claim to be tenants
thereof; that the sale to petitioners was void from the
beginning; that respondent Judge therefore did not commit
any error in ordering the petitioner to reconvey the lands to
Belen de Guia; that the cancellation of the titles of Carlos and
San Juan and the reinstatement of Belens title by virtue of
the appellate decision carried with them as a logical
consequence the cancellation of petitioners title and any
pretended right over the land; that petitioners cannot claim
refuge behind their title; and that to permit them to do so
would be to put a premium on bad faith which is never the
aim of the torrens system.
Again, petitioners did not appeal from the CA decision in CA-
G.R. SP No. 14783. It became final and executory on July 31,
1989.[38] And it is this final decision which was totally and
erroneously ignored by the DAR Provincial Adjudicator and
the DARAB.
As petitioners themselves espouse, well settled is the
principle that a decision that has acquired finality becomes
immutable and unalterable and may no longer be modified in
any respect even if the modification is meant to correct
erroneous conclusions of fact or law and whether it will be
made by the court that rendered it or by the highest court of
the land.[39]
The reason for this is that litigation must end and terminate
sometime and somewhere, and it is essential to an effective
and efficient administration of justice that, once a judgment
has become final, the winning party be not deprived of the
fruits of the verdict. Courts must guard against any scheme
calculated to bring about that result and must frown upon
any attempt to prolong the controversies.[40]
The only exceptions to the general rule are the correction of
clerical errors, the so-called nunc pro tunc entries which
cause no prejudice to any party, void judgments,[41] and
whenever circumstances transpire after the finality of the
decision rendering its execution unjust and inequitable.[42]
Since the present case does not fall under any of the
recognized exceptions, it is clear that petitioners are bound
by the finality of the CA decision in CA-G.R. SP. No. 14783
which they themselves instituted.
Unlike Belen who appealed the CFI decision in AC-G.R. CV No.
5524-UDK and never lost interest in pursuing her appeal,
petitioners in this case never appealed the decision in CA-
G.R. SP. No. 14783. They cannot therefore successfully raise
before another tribunal, as the DARAB, the issues they could
have raised through an appeal or a motion for
reconsideration within the reglementary period.
Petitioners also claim that their titles are unassailable having
acquired the same pursuant to law.[43] Again the Court does
not agree. The principle of indefeasibility of a Torrens Title
does not apply where fraud attended the issuance of the
title,[44] as is conclusively established in this case. The
Torrens Title does not furnish a shield for fraud.[45]
As a final note, the Court reiterates and hereby adopts the
observations made by the CA speaking through Justice
Angelina Sandoval- Gutierrez in CA-G.R. SP No. 39315, anent
the DAR Provincial Adjudicator and the DARAB:
Just why the Provincial Adjudicator and the DARAB itself
relied on this Courts Resolution dated April 19, 1983 issued in
AC-G.R. No. 5524-UDK dismissing petitioners appeal disturbs
Us no end. They intentionally disregarded the fact that
petitioners appeal was reinstated as shown by this Courts
Resolution dated May 21, 1984 in AC-G.R. No. 5524-UDK.
They cannot disclaim knowledge of the existence of this
Resolution. Petitioners various pleadings and papers
submitted to the Provincial Adjudicator and her brief filed
with the DARAB repeatedly mentioned and reproduced the
same. Yet they simply closed their eyes and refused to take
cognizance that petitioners appeal was reinstated (docketed
as CA-G.R. CV No. 02883) and was decided by this Court
reversing the CFI decision in Civil Case No. 655-B dismissing
the petitioners complaint, declaring as null and void Ricardo
San Juan title from which private respondents titles were
derived; and reinstating T.C.T. No. 209298 in the name of
petitioner Belen Lopez Vda. de Guia.
Worse, said adjudicators likewise did not recognize and
practically impugned the Decision of this Court in CA-G.R. SP.
No. 14783 holding inter alia that Ricardo San Juan was not
the owner of the land and, therefore, he had no right or title
which could regally (sic) convey to anyone, a fact even
62
admitted by petitioners x x x (referring to herein private
respondents).
Let it be stressed at this point that the Provincial Adjudicator
and the DARAB are bound by the findings of fact and
conclusion of law of this Court.
Indeed, in disposing of the case at bench in defiance of the
clear and categorical ruling of this Court in AC-G.R. CV No.
02883 and CA-G.R. SP No. 14783, both the Provincial
Adjudicator and the DARAB committed gross error. Not only
that, they manifested their utter disrespect to the Judiciary.
Without doubt, their egregious conduct engendered doubt
on their honesty and caused serious injustice to herein
petitioner.
They should have remembered that they owe it to the public
to know the law or jurisprudence to be applied in a particular
controversy; and that the conduct of those dispensing justice
should be circumscribed with the heavy burden or
responsibility, comporting themselves in a manner that will
not raise any suspicion about their integrity.[46]
Indeed, the DAR Provincial Adjudicator and the DARAB
should have been more circumspect in the disposition of this
case. Instead of facilitating the administration of justice, their
obstinate refusal to obey a valid final judgment of the Court
of Appeals, further delayed the resolution of this case and
added valuable irretrievable years to a case that has already
dragged on for decades. It blatantly questioned the wisdom
of a higher court by stating that:
this Board cannot comprehend how the Honorable Court of
Appeals reverse itself in its Decision dated February 20, 1986
in AC-G.R. CV No. 02883, after its Decision has already
become final and executory from April 19, 1983 in AC-G.R.
No. 5524-UDK[47]. (Emphasis supplied)
which statement manifest not only a superficial grasp of the
rules, but more disappointingly, a contumacious attitude
which this Court cannot countenance.
WHEREFORE, the petition is hereby DENIED for lack of merit
and the decision of the Court of Appeals in CA-G.R. SP No.
39315 dated June 28, 1996, is hereby AFFIRMED IN TOTO.

Costs against petitioners.
SO ORDERED.
[G.R. No. 128254. January 16, 2004]
HEIRS OF POMPOSA SALUDARES represented by ISABEL
DATOR, petitioners, vs. COURT OF APPEALS, JOSE DATOR
and CARMEN CALIMUTAN, respondents.
CORONA, J.:
Assailed in the instant petition for review on certiorari is the
July 31, 1996 decision[1] of the Court of Appeals reversing
the August 27, 1992 decision[2] of the Regional Trial Court of
Lucena City, Branch 56, which in turn dismissed private
respondents petition for reconveyance on the ground of
prescription of action.
At the core of the present controversy is a parcel of land,
known as Lot 5793, measuring 8,916 square meters, located
at Mahabang Parang, Lucban, Quezon. The land formed part
of the conjugal properties of spouses Juan Dator and
Pomposa Saludares, known as the Tanza estate.
Pomposa died on May 1, 1923, leaving herein petitioners,
Enrica, Petra, Restituto, Amado, Delfina, Beata, Vicenta and
Isabel, all surnamed Dator, as her compulsory heirs
(hereinafter referred to as Heirs).
On February 28, 1940, the Heirs and their father Juan
executed a deed of extra-judicial partition of the share of
Pomposa in the Tanza estate. The settlement conferred the
eastern half of the Tanza estate to Juan and the western half
to the Heirs.
Before the aforementioned partition, Juan was in possession
of the entire Tanza estate. After the partition, the Heirs took
possession of their share and had the same tenanted by a
certain Miguel Dahilig, husband of Petra, one of the Heirs,
who in turn managed the land in behalf of the other siblings.
Juan, the father, remained in possession of his half of the
land until his death on April 6, 1940.
On December 13, 1976, Isabel Dator applied for a free patent
over the entire Tanza estate, including Lot 5793, in behalf of
the Heirs. On May 26, 1977, after all the requirements were
complied with, the Register of Deeds of Quezon awarded
Free Patent No. 4A-2-8976 and issued Original Certificate of
Title (OCT) No. 0-23617 in the names of the Heirs.
Sometime in 1988, the Heirs were informed by their tenant
that private respondents cut some 50 coconut trees located
within the subject lot. Thus, the Heirs sent a letter,[3] dated
July 26, 1988, to private respondents demanding an
explanation for their intrusion into their property and
unauthorized felling of trees.
On August 25, 1988, private respondents retaliated by filing
an action for reconveyance against petitioners, docketed as
civil case no. 88-121, in the Regional Trial Court of Lucena
City. Private respondents alleged in their complaint that: (a)
they were the owners in fee simple and possessors of Lot No.
5793; (b) they bought the land from the successors-in-
interest of Petra Dator, one of the heirs; (c) they were in
possession of the subject land from 1966 to the present and
(d) petitioner Isabel Dator obtained free patent OCT P-23617
over Lot 5793 in favor of the Heirs by means of fraud and
misrepresentation. Thus, private respondents prayed for the
cancellation of OCT P-23617 and the issuance of a new title
in their names.
In their answer, the Heirs denied having sold any portion of
the Tanza estate to anyone. They alleged that: (a) they and
their predecessors-in-interest had been and were still in
actual, continuous, adverse and public possession of the
subject land in the concept of an owner since time
immemorial and (b) title to Lot 5793 was issued in their favor
after faithful compliance with all the requirements necessary
for the issuance of a free patent.
After trial, the lower court rendered a decision dismissing the
action primarily on the ground of prescription of action:
More telling is plaintiff Jose Dators admission that the
adjacent lot which is 5794 is his and he was a cadastral
claimant, in fact, filed (sic) an application for free patent. By
and large, if Jose Dator was personally claiming rights on the
property now denominated as Lot 5793, the Court is
intrigued and cannot see its way clear why Jose Dator did not
file any protest in the application of the heirs of Pomposa
Saludares, neither had Jose Dator filed any petition for
63
review within the time frame, instead it took them eleven
(11) long years to question the validity.
The doctrine of stale demands or laches is even applicable in
the case at bar. Laches means the failure or neglect for an
unreasonable length of time, to do that which by exercising
diligence could or should have been done earlier. (Marcelino
versus Court of Appeals, G.R. No. 94422, June 26, 1992)
xxx xxx xxx
The issues with respect to ownership have already been
amply discussed which brings us to the issue as to whether or
not the action has prescribed and whether the original
certificate of title in the name of the heirs of Pomposa
Saludares is already indefeasible.
The action for reconveyance at bar was filed on August 28,
1988 or more than eleven (11) years from the issuance of the
title, a fact plaintiffs cannot deny. They cannot claim
ignorance that the defendants-heirs of Pomposa Saludares
are applying for a free patent of Lot No. 5793 because
notices were sent.
xxx xxx xxx
In the absence of competent and positive evidence that the
title of the defendants has been secured thru fraud which in
the case at bar is wanting and which would necessarily
invalidate it, the presumption is it has been issued regularly
in the absence of actual fraud.
There being no positive evidence presented which would
establish actual fraud in the issuance of Free Patent Title No.
P-23617 in the defendants name, their title deserves
recognition.
In like manner, in an action for reconveyance after the lapse
of one year from the date of the registration, actual fraud in
securing the title must be proved (J.N. Tuazon Co., Inc. versus
Macalindog, G.R. No. L-15398, December 29, 1962, 6 SCRA
938).
The plaintiffs claim for reconveyance therefore cannot
prosper.

WHEREFORE, judgment is hereby rendered in favor of the
defendants and against the plaintiffs ordering the dismissal
of the case with costs against plaintiffs and declaring
defendants, heirs of Pomposa Saludares, as the rightful
owners of the land.
The claim of defendants in the matter of attorneys fees and
litigation expenses not having been proven by concrete
evidence, the Court opts not to award the same.
SO ORDERED.[4]
On appeal, the appellate court reversed the trial court
decision:
It is true that the Torrens title issued upon a free patent may
not be cancelled after the lapse of ten years from the date of
its registration because the statute of limitations bars such
cancellation. But this doctrine has long been qualified thusly:
If the registered owner, be he the patentee or his successor-
in-interest to whom the Free patent was transferred or
conveyed, knew that the parcel of land described in the
patent and in the Torrens belonged to another who together
with his predecessors-in-interest were never in possession
thereof, then the statute barring an action to cancel a
Torrens title issued upon a free patent does not apply and
the true owner may bring an action to have the ownership or
title to the land judicially settled and the Court in the
exercise of its equity jurisdiction, without ordering the
cancellation of the Torrens title issued upon the patent, may
direct the defendant, the registered owner, to reconvey the
parcel of land to the plaintiff who has been found to be the
true owner thereof. (Vital vs. Anore, et al., 90 Phil. 855,
Underscoring ours.)
In this case, there is clear evidence to show that appellee
Isabel had full knowledge that Lot 5793 had been sold to her
brother-in-law Miguel Dahilig and her sister Petra, that Lot
5793 no longer belonged to her and to the heirs she claimed
to represent. She was signatory to the deed of sale dated
April 16, 1940 in favor of appellant. (Exh. I) With this
knowledge, there is reason to conclude that appellant Isabel
misrepresented herself and the rest of the heirs as owners
entitled to the free patent.
WHEREFORE, all the above considered, judgment is hereby
rendered:
1. Reversing the August 27, 1992 decision of the court below;
2. Ordering the Register of Deeds of Quezon Province to
cancel OCT No. P-23617 in the name of the Heirs of Pomposa
Saludares and to issue another for the same property in the
name of plaintiffs Jose Dator and Carmen Calimutan;
3. Ordering appellees to pay appellants ten thousand
(P10,000.00) pesos for attorneys fees, and to pay the costs.
SO ORDERED.[5]
Aggrieved by the appellate court ruling, the Heirs filed the
instant petition, assigning the following errors:
The Court of Appeals erred in tracing the history of the
transactions involving the property way back to the year
1923 and render judgment based on its findings, considering
that petitioners are the registered owners of the property
under a torrens certificate of title which is conclusive,
incontrovertible and indefeasible.
The Court of Appeals erred when it did not consider that the
complaint filed by the private respondents for reconveyance
and cancellation of title before the trial court eleven (11)
years after a torrens title over the property was issued in the
name of the petitioners (had) prescribed.[6]
Notwithstanding the indefeasibility of the Torrens title, the
registered owner may still be compelled to reconvey the
registered property to its true owner. The rationale for the
rule is that reconveyance does not set aside or re-subject to
review the findings of fact of the Bureau of Lands. In an
action for reconveyance, the decree of registration is
respected as incontrovertible. What is sought instead is the
transfer of the property or its title which has been wrongfully
or erroneously registered in another persons name, to its
rightful or legal owner, or to the one with a better right.[7]
64
Nevertheless, the right to seek reconveyance of registered
property is not absolute because it is subject to extinctive
prescription. In Caro vs. Court of Appeals,[8] the prescriptive
period of an action for reconveyance was explained:
Under the present Civil Code, we find that just as an implied
or constructive trust is an offspring of the law (Art. 1456, Civil
Code), so is the corresponding obligation to reconvey the
property and the title thereto in favor of the true owner. In
this context, and vis--vis prescription, Article 1144 of the Civil
Code is applicable.
Article 1144. The following actions must be brought within
ten years from the time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
xxx xxx xxx
An action for reconveyance has its basis in Section 53,
paragraph 3 of Presidential Decree No. 1529, which provides:
In all cases of registration procured by fraud, the owner may
pursue all his legal and equitable remedies against the
parties to such fraud without prejudice, however, to the
rights of any innocent holder of the decree of registration on
the original petition or application, x x x.
This provision should be read in conjunction with Article
1456 of the Civil Code, which provides:
Article 1456. If 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.
The law thereby creates the obligation of the trustee to
reconvey the property and the title thereto in favor of the
true owner. Correlating Section 53, paragraph 3 of
Presidential Decree No. 1529 and Article 1456 of the Civil
Code with Article 1144(2) of the Civil Code, supra, the

prescriptive period for the reconveyance of fraudulently
registered real property is ten (10) years reckoned from the
date of the issuance of the certificate of title.
There is but one instance when prescription cannot be
invoked in an action for reconveyance, that is, when the
plaintiff is in possession of the land to be reconveyed.[9]
In a series of cases,[10] this Court permitted the filing of an
action for reconveyance despite the lapse of ten years and
declared that said action, when based on fraud, is
imprescriptible as long as the land has not passed to an
innocent purchaser for value. But in all those cases including
Vital vs. Anore[11] on which the appellate court based its
assailed decision, the common factual backdrop was that the
registered owners were never in possession of the disputed
property. Instead, it was the persons with the better right or
the legal owners of the land who had always been in
possession of the same. Thus, the Court allowed the action
for reconveyance to prosper in those cases despite the lapse
of more than ten years from the issuance of title to the land.
The exception was based on the theory that registration
proceedings could not be used as a shield for fraud or for
enriching a person at the expense of another.[12]
In the case at bar, however, it is the rule rather than the
exception which should apply.
This Court does not normally review the factual findings of
the Court of Appeals in a petition for review under Rule 45 of
the Rules of Court. But when the findings of fact of the
appellate court differ from those of the trial court, the Court
in the exercise of its power of review may inquire into the
facts of a case.
The trial court declared the Heirs as having been in actual,
open and continuous possession of the disputed lot. On the
other hand, the appellate court ruled that it was private
respondents.
Private respondents presented documents purportedly
showing a series of transactions which led to the alleged
transfer of ownership of Lot 5793 from the Heirs to them,
namely: (1) a Kasulatan Ng Pagbibilihang Lampasan, dated
April 16, 1940, wherein the disputed lot was allegedly sold by
the Heirs to their sibling Petra Dator and her husband Miguel
Dahilig; (2) an extra-judicial partition showing that, upon the
death of Miguel, his heirs Petra, Angel, Anatalia, Catalina,
Felimon and Jacinto, inherited Lot 5793 and (3) two deeds of
sale dated December 30, 1978 and March 15,1970 wherein
Felimon and Jacinto, and later Catalina, sold their undivided
shares in Lot 5793 to private respondents.
Other than the presentation of these documents, however,
private respondents failed to prove that they were in actual,
open and continuous possession of Lot 5793.
On the other hand, Isabel Dator, who testified for the Heirs,
vehemently denied having signed the Kasulatan Ng
Pagbibilihang Lampasan and pointed out the absence of the
signatures of her other siblings Vicenta, Barcelisa and
Adoracion.
The Heirs likewise presented proof of payment of realty taxes
from 1956 to 1974 in the names of their deceased parents,
and from 1975 to 1988 in their names.
More importantly, the Heirs convincingly established their
open and continuous occupation of the entire Tanza estate,
including Lot 5793, through their tenant Miguel Dahilig. After
Miguels death, he was succeeded by Marcelo Saludares who
testified during the trial that: (a) the farm was under the
administration of Beata and Isabel Dator who took over its
management after Petra Dator died; (b) he had been
consistently tending the land since 1947; (c) he was the one
who planted the various crops and trees thereon, except for
some 100 coconut trees which he explained were planted by
other people in response to the Green Revolution project of
then President Marcos.
Saludares identified each and every landmark and boundary
of the subject lot. He also enumerated all the trees planted
on the subject lot and, when asked about the fruits of the
land, he told the court that he shared the harvest with the
surviving Heirs.
In stark contrast, private respondents witness, farm worker
Perpetuo Daya could not identify the boundaries of the
disputed property, its adjoining owners or recall the dates he
worked and tilled the subject lot.
65
Specially noteworthy was the fact that the recorded cadastral
claimant of Lot 5793, Angel Dahilig, testified that he
executed a waiver in favor of the Heirs because they were
the true owners of the subject parcel of land.[13]
Furthermore, we note private respondent Jose Dators
declaration that he was the cadastral claimant of and free
patent applicant for Lot 5794 which was adjacent to Lot
5793. This being the case, we find private respondents
inaction difficult to understand, considering that they were
among those who received notices of petitioners free patent
application dated January 2, 1979 from the Bureau of
Lands.[14]
If private respondents indeed owned Lot 5793, they should
have filed an application for free patent for it just as they did
for Lot 5794, or at least opposed the Heirs application for
free patent over Lot 5793, to protect their interests. As a
matter of fact, they were aware that the Heirs tenant,
Marcelo Saludares, repeatedly harvested the fruits of Lot
5793.
But even assuming that private respondents indeed validly
acquired Lot 5793 in 1966 as they claimed, they nevertheless
slept on their right to secure title thereto. Their unexplained
inaction for more than 11 years rendered their demand for
reconveyance stale. Vigilantibus sed non dormientibus jura
subverniunt. The law aids the vigilant, not those who sleep
on their rights. This legal precept finds perfect application in
the case at bar.
Accordingly, we find that the Court of Appeals committed
reversible error in disregarding the ten-year prescriptive
period for the reconveyance of registered real property and
in giving due course to said action despite the lapse of more
than 11 years from the issuance of title thereto, which was
clearly barred by prescription.
WHEREFORE, the petition is hereby granted. The decision of
the Court of Appeals, dated July 31, 1996, is REVERSED and
SET ASIDE and the decision of the Regional Trial Court, dated
August 27, 1992, is REINSTATED.
SO ORDERED.