February 17, 2016 G.R. No. 175760 Republic of The Philippines, Petitioner, Sogod Development Corporation, Respondent. Decision Leonen, J.

Land Titles and Deeds Cases
February 17, 2016
G.R. No. 175760
REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
SOGOD DEVELOPMENT CORPORATION, Respondent.
DECISION
LEONEN, J.:
For a judicial confirmation of title under Section 48(b) of the Public Land Act, the
land subject of the application needs only to be alienable and disposable as of the
time of the application, provided the applicant's possession and occupation of the
land dates back to June 12, 1945, or earlier.
This Petition for Review on Certiorari 1 seeks to annul and set aside the
Decision2 dated August 25, 2005 and Resolution3 dated November 7, 2006 of the
Court of Appeals Cebu City in CA-G.R. CV No. 72389.4 The Court of Appeals
affirmed5 the Decision dated May 10, 2001 of the Municipal Circuit Trial Court of
Catmon-Carmen-Sogod, Cebu, which granted respondent Sogod Development
Corporation’s (Sogod) application for original registration of title over Lot No.
2533, Cadastre 827-D, situated in Tabunok, Sogod, Cebu.6
On December 9, 1999, Sogod filed an application for registration and confirmation

of land title over Lot No. 2533, Cad. 827-D with an area of 23,896 square meters
and situated in Brgy. Tabunok, Municipality of Sogod, Province of Cebu.7 The case
was docketed as Land Registration Case No. 016-SO.8
Sogod claimed that it purchased the land "from Catalina Rivera per deed of
absolute sale dated Oct[ober] 28, 1996[.]"9 It also averred that "by itself and
through its predecessors-in-interest[,] [it had] been in open, continuous,
exclusive[,] and notorious possession and occupation of [the land] since June 12,
1945[.]"10
On February 11, 2000, the Office of the Solicitor General moved to dismiss the
Petition11 on the ground that Sogod was disqualified from applying for original
Page 1 of 157
registration of title to alienable lands pursuant to Article XII, Section 3 of the 1987
Constitution.12
The trial court issued an Order dated June 15, 2000 pronouncing a "general
default against all persons except against the Solicitor General[.]"13
On September 19, 2000, the Regional Executive Director of the Department of

Environment and Natural Resources, Region VII, Banilad, Mandaue City filed an
Opposition on the ground that the land was previously forest land and "was
certified and released as alienable and disposable only on January 17,
1986."14 Thus, it could not be registered without violating Section 48, paragraph
(b) of Commonwealth Act No. 141, otherwise known as the Public Land Act, as
amended by Republic Act No. 6940.15
Apart from presenting documentary evidence, Sogod also presented witnesses

Celedonio Campos, Jr., Bonifacia Sugarol, and Ranito Quadra to prove its
ownership and possession of the land.16 According to their testimonies, the land
"was originally in the possession of Ignacia Rivera, the mother of
Catalina."17 "Catalina inherited this land from her mother[.]"18 On October 28,
1996, Catalina sold the land to Sogod.19 "A tax clearance dated July 30, 1999 was
issued by the Office of the Municipal Treasurer, certifying that all taxes over the
land covered by Tax Declaration No. 043-6156 had been paid."20 "Thereafter, Tax
Declaration No. 11096 A was issued in the name of [Sogod]."21
The Office of the Solicitor General did not present any controverting evidence.22
On May 10, 2001, the trial court rendered the Decision23 granting the
application.24 The Decision stated, in part:
The facts presented show that the applicant corporation and its predecessor-in-
interest have been in open, continuous, exclusive, notorious and undisturbed
possession of the land, subject of this application for registration of title for not
less than fifty (50) years or since time immemorial. The state did not present
evidence to controvert these facts.
WHEREFORE, from all the foregoing undisputed facts which are supported by oral
and documentary evidence, the court finds and so holds that the applicant, Sogod
Development Corporation represented by Celedonio Campos, Jr. has a registrable
title to the land sought to be registered, hereby confirming the same and ordering
Page 2 of 157
its registration under Act 494, as amended by Presidential Decree No. 1529 over
Lot 2533, Cad 827-D, situated in Tabunok, Sogod, Cebu, Island of Cebu,
Philippines, as described in Plan As-07-001393, and strictly in line with its
Technical Description, upon the finality of this decision.25
The Office of the Solicitor General appealed to the Court of Appeals.26 According
to the Office of the Solicitor General, the trial court erred in allowing the titling of
Lot No. 2533 because:
(1) Sogod failed to prove its open, continuous, exclusive, and notorious
possession and occupation of the land since June 12, 1945 or earlier;27
(2) The tax declarations presented by Sogod "are of recent vintage"28 and
are "not accompanied by proof of actual possession . . . since June 12,
1945[;]"29
(3) The land was only declared alienable and disposable on January 17,
1986, pursuant to Forestry Administrative Order No. 4-1611,30 "making it
impossible for [Sogod] and its predecessor-sin-interest to have possessed
the land in concept of an owner since June 12, 1945 or earlier[;]"31 and
(4) "Article XII, Section 3 of the 1987 Constitution disqualifies private

corporations from applying for original registration of title to alienable
lands."32
On August 25, 2005, the Court of Appeals rendered its Decision affirming the
Decision of the 6th Municipal Circuit Trial Court of Catmon-Carmen-Sogod,
Cebu.33 It ruled that Sogod was able to prove that "it and its predecessors-in-
interest ha[d] been in possession of [Lot No. 2533] since June 12, 1945 or earlier
and the land sought to be registered is an agricultural land[.]"34 Upholding the
corporation’s right to file the application before the court a quo, the Court of
Appeals held that lands possessed in the manner and for the period required by
Section 48 of Commonwealth Act No. 141 become ipso jure private
lands.35 Judicial confirmation in this case would only be a formality to confirm
"the earlier conversion of the land into private land[.]"36
The Office of the Solicitor General moved for reconsideration37 of the Court of
Appeals Decision. In the Resolution dated November 7, 2006, the Court of
Appeals denied the Motion for Reconsideration for lack of merit.38 Hence, the
Page 3 of 157
present Petition for Review was filed. Respondent Sogod Development

Corporation assigns the following errors:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION

WHEN IT ALLOWED THE TITLING OF LOT NO. 2533 DESPITE RESPONDENT’S
FAILURE TO SHOW THAT IT AND ITS PREDECESSORS-ININTEREST HAVE BEEN IN
OPEN, CONTINUOUS, EXCLUSIVE AND NOTORIOUS POSSESSION AND
OCCUPATION OF ALIENABLE AND DISPOSABLE LANDS OF THE PUBLIC DOMAIN
UNDER A BONAFIDE CLAIM OF OWNERSHIP SINCE JUNE 12, 1945 OR PRIOR
THERETO.
II
THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN

AFFIRMING THE TRIAL COURT’S DECISION, GRANTING RESPONDENT’S
APPLICATION FOR REGISTRATION OF LOT NO. 2533 IN VIEW OF THE OPPOSITION
DATED SEPTEMBER 13, 2000 OF THE DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES (DENR) STATING THAT SAID PROPERTY WAS ONLY
DECLARED ALIENABLE AND DISPOSABLE ON JANUARY 17, 1986.
III
THE HONORABLE COURT OF APPEALS ERRED IN GRANTING RESPONDENT’S

APPLICATION FOR REGISTRATION OF TITLE SINCE ARTICLE XII, SECTION 3 OF THE
1987 CONSTITUTION DISQUALIFIES PRIVATE CORPORATIONS FROM APPLYING
FOR ORIGINAL REGISTRATION OF ALIENABLE LANDS.
IV
THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED THE TRIAL

COURT’S DECISION DATED AUGUST 2, 2001, GRANTING THE APPLICATION FOR
REGISTRATION OF TITLE OF THE RESPONDENT ON THE BASES OF TAX
DECLARATIONS WHICH ARE OF RECENT VINTAGE.39
Respondent filed its Comment,40 to which petitioner filed its Reply.41 On May 30,
2011, the court gave due course to the Petition and required the parties to submit
their respective memoranda.42
Page 4 of 157
Petitioner and respondent filed their memoranda on January 4, 201243 and

October 15, 2014,44 respectively.
Petitioner raises the following issues in its Memorandum:
First, "whether the occupation of forest land prior to its classification as alienable
and disposable land may be considered for purposes of complying with the
requirements for judicial confirmation of title[;]"45 and
Second, "whether [respondent] and its predecessors-in-interest have possessed

the property in the manner and length of time required by law."46
Petitioner contends that since the "application for registration was filed on
December 9, 1999, respondent could only be considered in bona fide possession
for a period of 13 years from the time [the land] was classified as alienable and
disposable [in 1986]."47 It adds that any possession or occupation of the land prior
to its declaration as "alienable and disposable cannot be counted for purposes of
acquisitive prescription because forest lands are not susceptible of [private
appropriation]."48 It further argues that Section 48(b) of Commonwealth Act No.
141, as amended, "applies exclusively to alienable and disposable public
agricultural land[,] [and] [f]orest lands are excluded."49
Moreover, petitioner contends that possession in good faith "is important in the
consideration of whether the applicant has acquired a grant of registrable title
from the government."50 "The alienable nature of the land is essential to the bona
fide claim of ownership and possession since June 12, 1945."51
Even if the court’s ruling in Heirs of Mario Malabanan v. Republic52 is applied,

respondent’s possession would allegedly be short of the length of time required
by law.53 The earliest tax declaration presented by respondent is 1947, which was
"short of the June 12, 1945 requirement of [the] law."54 According to petitioner,
"[a] statement that a tax declaration for the year 1945 existed does not equate to
clear and convincing proof of possession required by law considering further that
the person who declared the property [could not] be precisely
determined."55 Petitioner also "point[s] out that the total area . . . declared by
respondent’s predecessor’s-in-interest [sic] [was] at most 21,000 square meters
as opposed to the area of 23,45656 [square] meters [that was] sought to be
registered."57 Finally, according to petitioner, "it does not appear that respondent
Page 5 of 157
submitted a document proving that Catalina Rivera inherited the property from
her mother."58
On the other hand, respondent’s application, even when considered under

Section 14(2) of Presidential Decree No. 1529, "must still be dismissed for failure
to prove the existence of an express government manifestation that the property
is already patrimonial."59
Respondent counters that factual issues could not be raised in a petition for
review on certiorari, and the findings of the trial court and the Court of Appeals
"that the respondent and its predecessor-in-interest have been in open,
continuous, exclusive, notorious, and adverse possession of the . . . land since 12
June 1945 or earlier"60 must be respected.61
Respondent contends that it sufficiently complied with the requirements of the

law. First, the land applied for was alienable and disposable when it filed its
application in 1999.62 Citing Republic v. Court of Appeals and Naguit,63respondent
contends that "it [was] enough that the land [was] declared as alienable and
disposable prior to the filing of the application for registration and not at the start
of possession[.]"64 Second, it and its predecessor-in-interest "occupied and
possessed the land openly, continuously, exclusively, and adversely under a bona
fide claim of ownership since [June 12,] 1945 or earlier."65
Contrary to petitioner’s claim, respondent stresses that it was able to present the
tax declaration for 1945.66Moreover, "the various tax declarations, which prove
continuity and without intermission, and the tax clearance all in the name of
Catalina Rivera[,] support the claim that [she] was in possession of the . . . land
since 1945 and even earlier[.]"67 Respondent adds that "both the trial court and
the Court of Appeals found that the . . . land was planted with
corn[.]"68 "[P]lanting of corn requires cultivation and fostering[,] which proves
that the possession by Catalina Rivera was actual, open and continuous."69
We deny the Petition.
The main issue revolves around the proper interpretation of Section 48(b) of
Commonwealth Act No. 141, as amended,70 otherwise known as the Public Land
Act, which requires possession under a bona fide claim of ownership since June
12, 1945 for a judicial confirmation of title:
Page 6 of 157
SECTION 48. The following described citizens of the Philippines, occupying lands
of the public domain or claiming to own any such lands or an interest therein, but
whose titles have not been perfected or completed, may apply to the Court of
First Instance of the province where the land is located for confirmation of their
claims and the issuance of a certificate of title thereafter, under the Land
Registration Act, to wit:
....
(b) 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 acquisition or ownership, since
June 12, 1945, or earlier, immediately preceding the filing of the
application for confirmation of title, except when prevented by war
or force majeure. These shall be conclusively presumed to have
performed all the conditions essential to a Government grant and
shall be entitled to a certificate of title under the provisions of this
chapter. (Emphasis supplied)
A similar provision is found in Section 14(1) of Presidential Decree No. 1529,

otherwise known as the Property Registration Decree, which reads:
SECTION 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.
This court in Heirs of Mario Malabanan v. Republic71 has clarified that the fixed
date of June 12, 1945 qualifies possession and occupation, not land classification,
as alienable and disposable.72 The agricultural land subject of the application
needs only to be classified as alienable and disposable as of the time of the
application, provided the applicant's possession and occupation of the land dates
back to June 12, 1945, or earlier.73 Thus:
Page 7 of 157
The dissent stresses that the classification or reclassification of the land as

alienable and disposable agricultural land should likewise have been made on
June 12, 1945 or earlier, because any possession of the land prior to such
classification or reclassification produced no legal effects. It observes that the
fixed date of June 12, 1945 could not be minimized or glossed over by mere
judicial interpretation or by judicial social policy concerns, and insisted that the
full legislative intent be respected.
We find, however, that the choice of June 12, 1945 as the reckoning point of the
requisite possession and occupation was the sole prerogative of Congress, the
determination of which should best be left to the wisdom of the lawmakers.
Except that said date qualified the period of possession and occupation, no other
legislative intent appears to be associated with the fixing of the date of June 12,
1945. Accordingly, the Court should interpret only the plain and literal meaning of
the law as written by the legislators.1avvphi1
Moreover, an examination of Section 48 (b) of the Public Land Act indicates that
Congress prescribed no requirement that the land subject of the registration
should have been classified as agricultural since June 12, 1945, or earlier. As such,
the applicant’s imperfect or incomplete title is derived only from possession and
occupation since June 12, 1945, or earlier. This means that the character of the
property subject of the application as alienable and disposable agricultural land of
the public domain determines its eligibility for land registration, not the
ownership or title over it. Alienable public land held by a possessor, either
personally or through his predecessors-in-interest, openly, continuously and
exclusively during the prescribed statutory period is converted to private property
by the mere lapse or completion of the period. In fact, by virtue of this doctrine,
corporations may now acquire lands of the public domain for as long as the lands
were already converted to private ownership, by operation of law, as a result of
satisfying the requisite period of possession prescribed by the Public Land Act. It is
for this reason that the property subject of the application of Malabanan need
not be classified as alienable and disposable agricultural land of the public domain
for the entire duration of the requisite period of possession.
To be clear, then, the requirement that the land should have been classified as
alienable and disposable agricultural land at the time of the 0application for
registration is necessary only to dispute the presumption that the land is
inalienable.74 (Citations omitted)
Page 8 of 157
The ruling in Heirs of Malabanan adopted the earlier interpretation in Republic v.

Court of Appeals and Naguit75 that Section 14(1) of the Property Registration
Decree "merely requires the property sought to be registered as already alienable
and disposable at the time the application for registration of title is filed."76 This
court also emphasized in Naguit the absurdity that would result in interpreting
Section 14(1) as requiring that the public land should have already been
characterized as alienable by June 12, 1945.77
Besides, we are mindful of the absurdity that would result if we adopt petitioner's
position. Absent a legislative amendment, the rule would be, adopting the OSG’s
view, that all lands of the public domain which were not declared alienable or
disposable before June 12, 1945 would not be susceptible to original registration,
no matter the length of unchallenged possession by the occupant. Such
interpretation renders paragraph (1) of Section 14 virtually inoperative and even
precludes the government from giving it effect even as it decides to reclassify
public agricultural lands as alienable and disposable. The unreasonableness of the
situation would even be aggravated considering that before June 12, 1945, the
Philippines was not yet even considered an independent state.
Instead, the more reasonable interpretation of Section 14(1) is that it merely

requires the property sought to be registered as already alienable and disposable
at the time the application for registration of title is filed. If the State, at the time
the application is made, has not yet deemed it proper to release the property for
alienation or disposition, the presumption is that the government is still reserving
the right to utilize the property; hence, the need to preserve its ownership in the
State irrespective of the length of adverse possession even if in good faith.
However, if the property has already been classified as alienable and disposable,
as it is in this case, then there is already an intention on the part of the State to
abdicate its exclusive prerogative over the property.78
Untenable is petitioner’s reliance on Republic v. Diloy,79 which pronounced that

the period of possession before the declaration that land is alienable and
disposable agricultural land should be excluded in the computation of possession
for purposes of confirmation of imperfect title.80 Diloy was based on Republic v.
Herbieto,81 which was expressly declared in Heirs of Malabanan to be incorrect
and without precedental value with respect to Section 14(1). The court declared
that:
Page 9 of 157
[T]he correct interpretation of Section 14(1) is that which was adopted in Naguit.
The contrary pronouncement in Herbieto, as pointed out in Naguit, absurdly limits
the application of the provision to the point of virtual inutility since it would only
cover lands actually declared alienable and disposable prior to 12 June 1945, even
if the current possessor is able to establish open, continuous, exclusive and
notorious possession under a bona fide claim of ownership long before that date.
Moreover, the Naguit interpretation allows more possessors under a bona

fide claim of ownership to avail of judicial confirmation of their imperfect titles
than what would be feasible under Herbieto. This balancing fact is significant,
especially considering our forthcoming discussion on the scope and reach of
Section 14(2) of the Property Registration Decree.
....
Thus, neither Herbieto nor its principal discipular ruling Buenaventura has any
precedental value with respect to Section 14(1). On the other hand, the ratio
of Naguit is embedded in Section 14(1), since it precisely involved [a] situation
wherein the applicant had been in exclusive possession under a bona fide claim of
ownership prior to 12 June 1945. The Court’s interpretation of Section 14(1)
therein was decisive to the resolution of the case. Any doubt as to which
between Naguit or Herbieto provides the final word of the Court on Section 14(1)
is now settled in favor of Naguit.82
Petitioner’s claim that "[t]he alienable nature of the land is essential to the bona
fide claim of ownership and possession since June 12, 1945"83 is likewise
untenable. In AFP Retirement and Separation Benefits System (AFP-RSBS) v.
Republic:84
Although adverse, open, continuous, and notorious possession in the concept of

an owner is a conclusion of law to be determined by courts, it has more to do
with a person’s belief in good faith that he or she has just title to the property
that he or she is occupying. It is unrelated to the declaration that land is alienable
or disposable. A possessor or occupant of property may, therefore, be a possessor
in the concept of an owner prior to the determination that the property is
alienable and disposable agricultural land. His or her rights, however, are still to
be determined under the law.85
Page 10 of 157
We proceed to the second issue relating to the sufficiency of evidence showing

the nature and length of respondent’s possession over the land. As a rule, factual
findings of both the trial court and the Court of Appeals are binding on this court.
Petitioner did not show the existence of any exceptions for us to depart from this
rule.
The trial court and the Court of Appeals found that respondent applicant had
sufficiently proved its and its predecessors-in-interest’s continuous possession of
the land tracing back to June 12, 1945 or earlier. Possession since 1945 was
established through testimonies of respondents’ witnesses, the unbroken chain of
tax declarations in the name of Catalina Rivera, the person from whom
respondent bought the property in 1996,86 and a certification from the municipal
treasurer that all previous taxes had been paid.87 Tax declarations or realty tax
payments constitute at least proof that the holder has a sincere and honest claim
of title over the property.88 Moreover, witness Bonifacia Sugarol, the owner of the
adjoining land, stated that the land was owned by Ignacia Rivera and inherited by
Catalina; and the land was planted with corn and had many tenants.89
Contrary to petitioner’s claim, respondent was able to present in evidence the tax
declaration for 1945. What were not presented were tax declarations before 1945
because as testified by a representative from the Office of the Municipal Assessor
of Sogod, all its records before the war were destroyed. This was discussed by the
Court of Appeals, thus:
The applicant also presented a representative from the Office of the Municipal
Assessor of Sogod in the person Ranito Quadra relative to the tax declaration
history of Lot 2533. The oldest tax declaration on file in the said government
office was TD 04024 (marked and submitted as Exh. "CC") for the year 1945. In
the said tax declaration, a notation was placed in the entry –
I (a) Land (Agricultural/Mineral)

ASSESSOR’S FINDINGS
Kind Area Class Unit Value Market Value

Cornland 4.0000 3a P800.00
Maguey 2.0000 1a 120.00
Page 11 of 157
Pasture 4.0169 120.50
Total 10.0169 P1040.50
As can be gleaned from the face of this evidence, the land was already devoted to
the planting of corn, maguey and the rest was pastureland.1âwphi1 Also, i[t]
appears that TD 04024 cancelled the previous tax declaration with number TD
1417. A testimony was also adduced by the same witness that the previous tax
declarations covering the property cannot be produced anymore because all of
their records prior to the Second World War were destroyed.
Analyzing the above-quoted testimony as well as the documentary evidence

submitted, it can be clearly surmised that the land was devoted to agriculture in
1945 and even prior to that year. Based on human experience, the area planted
with corn and maguey is a considerable tract of land that it presupposes that the
land ceased to be a forest land. Such that, even if the land was declared to be
alienable and disposable only in the year 1986, the actual use of Catalina Rivera of
this tract of land was already agriculture.90 (Citations omitted)
Thus, respondent had established (by itself and through its predecessor-in-
interest) its possession in the concept of owner of the property since 1945. It is
further undisputed that the property was declared alienable and disposable in
1986 prior to respondent's filing of its application in 1999.91 The Court of Appeals,
therefore, did not err in affirming the Municipal Circuit Trial Court Decision
granting respondent's application for original registration of title.
WHEREFORE, the Petition is DENIED and the Court of Appeals Decision dated
August 25, 2005 and Resolution dated November 7, 2006 are AFFIRMED.
MARVIC M.V.F. LEONEN

Associate Justice
WE CONCUR:
G.R. No. 192717 March 12, 2014
Page 12 of 157
MINDA S. GAERLAN, Petitioner,

vs.
REPUBLIC OF THE PHILIPPINES, Respondent.
DECISION
VILLARAMA, JR., J.:
Before this Court is a petition for review on certiorari under Rule 45 of the 1997
Rules of Civil Procedure, as amended, seeking to annul and set aside the
Decision1 dated March 11 , 2010 and the Resolution2 dated May 20, 2010 of the
Court of Appeals (CA) in CA-G.R. CV No. 00319-MIN. The CA had reversed and set
aside the Judgment3 of the Regional Trial Court (RTC) ofMisamis Oriental, Branch
20, in LRC No. 92-05 and dismissed the application for registration of title filed by
petitioner Minda S. Gaerlan.
The records bear out the following factual antecedents:
On April 10, 1992, petitioner filed an Application4 for original registration of title
over a parcel of land known as Lot 18793, Cad-237 of Cagayan Cadastre, with an
area of 1,061 square meters, more or less, and particularly described as follows:
A parcel of land situated at Patag, Cagayan de Oro City. Bounded on the North, by
Lot 835, Cag. Cad; on the East, by Lot No. 4342-A of Subd. Plan; on the South, by
Lot 4342-K of Subd. Plan; and on the West, by lot 4342-C of Subd. Plan with an
area of ONE THOUSAND SIXTY ONE (1,061) SQUARE METERS more or less (Lot
4342-B - Sketch Plan).5
In her application, petitioner alleged that she acquired the above-mentioned

property from Mamerta Tan in November 1989 by virtue of a Deed of Absolute
Sale of Unregistered Land.6 She had the property declared for taxation purposes
under her name and was issued Tax Declaration Nos. 998937 and 05 83
51.8 Attached to the application are the following documents:
(a) Original Tracing Cloth Plan together with the three (3) Blue print copies;9
(b) Technical Description of the parcel of land;10
(c) Surveyor's Report of Survey or Surveyor' s Certificate;11
Page 13 of 157
(d) Deed of Absolute Sale of Unregistered Land;12 and
(e) Tax Declaration No. 99893.13
After finding petitioner's application sufficient in form and substance, the trial
court set the case for initial hearing.
On August 25, 1992, the Republic of the Philippines, through the Office of the
Solicitor General (OSG), filed an Opposition14 to petitioner's application for
registration on the ground that (1) neither petitioner nor her predecessors-in-
interest have been in open, continuous, exclusive and notorious possession and
occupation of the subject land since June 12, 1945 or earlier; (2) the muniments
of title and tax declarations attached to the petition do not constitute competent
and sufficient evidence of a bona fide acquisition of the subject land; (3) the claim
of ownership based on Spanish title is no longer available for purposes of
registration; and (4) the subject land is a portion of the public domain, hence, not
registrable.
During the hearing, petitioner testified that (1) she is the applicant for registration
of a parcel of land located at Buenavista Village, Carmen, Patag, Cagayan de Oro
City, known as Lot 18793, Cad-237, Cagayan Cadastre, containing an area of 1,061
square meters; (2) that she acquired said land through sale on November 28,
1989 from Mamerta Tan; (3) that after the sale, she declared the property for
taxation purposes under her name; (4) that she was issued Tax Declaration Nos.
99893 and 058351 ; (5) that she has been religiously paying taxes thereon since
1989 up to 1991; and ( 6) that she took possession of the land and caused its
survey.15
Petitioner also presented Mamerta Tan who testified that she is the vendor of the
land subject of the present application and that she sold the land to petitioner in
1989. Mamerta averred that she became the owner of the said property in 1975
after she bought the land from Teresita Tan. She declared the property under her
name for taxation purposes under Tax Declaration No. 36942.16
Another witness, Mr. Honesto Velez, the City Assessor of Cagayan de Oro City,
testified that he issued certifications or certified copies of records on file in his
office and he identified the certified photocopy of the Land History
Card17pertaining to Cadastral Lot 4342, Case No. 4 situated at Patag, Cagayan de
Oro City under the name of cadastral claimant Potenciano Abragan. The history
Page 14 of 157
card started with Tax Declaration No. 1645 in the name of Potenciano Abragan.
Later, another tax declaration, Tax Declaration No. 37129 in the name of
Presentacion Eviofa, was issued. This tax declaration was subsequently replaced
by Tax Declaration No. 37130. He stated that based on the records in their office,
it appeared that petitioner is the owner of Lot 4342. Another claimant is
Presentacion Eviota and the remaining portion was in the name of Potenciano
Abragan. Presentacion Eviota was also issued a tax declaration, Tax Declaration
No. 124750 covering an area of 897 square meters, but not involving the same
parcel of land. Eviota's land was only a portion of Lot 4342. The original area of
the land claimed by Abragan is 12,293 square meters.18
City Assessor Velez further testified that their records showed that petitioner
possessed a 1,061-square meter portion of Lot 4342 covered by Tax Declaration
No. 058351. All the transfers made over portions of this parcel of land were all
recorded in the land history card on file with their office, thus paving the way for
the issuance of corresponding tax declaration to its new owners.19
Petitioner also presented and offered the following exhibits20 to support her
application for registration of title, to wit:
1) Deed of Absolute Sale of Unregistered Land,
2) Tax Declaration Nos. 99893 and 058351 ,
3) Tax Receipts,
4) Certified True Copy of Land History Card,
5) Tax Declaration in the name of Potenciano Abragan,
6) Tax Declaration in the name of Presentacion T. Eviota,
7) Tax Declaration in the name of Potenciano Abragan.
On November 20, 2001, the trial court rendered Judgment21 granting petitioner's
application for registration of title. The dispositive portion of the decision reads:
There being no evidence presented by the oppositor, JUDGMENT is hereby

rendered finding applicant Minda S. Gaerlan as owner in fee simple of the land
Page 15 of 157
subject of this application and hereby decreeing that Lot 18793, Cad-237, Cagayan
Cadastre, containing an area of One Thousand Sixty One (1 ,061) square meters,
more or less, be registered in her name [in] accordance with the technical
description attached to the application.
SO ORDERED.22
The Republic, through the OSG, appealed from the aforementioned decision
asserting that the trial court erred in ruling that the subject parcel of land is
available for private appropriation. The appeal was docketed as CA-G.R. CV No.
00319-MIN.
On March 11, 2010, the CA rendered a Decision23 reversing and setting aside the
ruling of the trial court and dismissing the application for registration of title filed
by petitioner.
The CA found that petitioner failed to present any proof to establish that the
subject land is alienable and disposable. The CA stressed that the applicant for
land registration must prove that the Department of Environment and Natural
Resources (DENR) Secretary had approved the land classification and released the
land of the public domain as alienable and disposable and that the land subject of
the application falls within the approved area per verification through survey by
the Provincial Environment and Natural Resources Offices (PENRO) or Community
Environment and Natural Resources Offices (CENRO). In addition, the CA held that
the applicant must present a copy of the original classification approved by the
DENR Secretary and certified as true copy by the legal custodian of the official
records. Moreover, the CA observed that there is no evidence on record to
establish that petitioner, by herself or through her predecessors-in-interest, had
been in open, continuous, exclusive and notorious possession and occupation of
the subject land and that she possessed the subject land since June 12, 1945 or
earlier. Thus, the appellate court ruled that petitioner is not entitled to
registration under Section 14(1) of Presidential Decree (P.D.) No. 1529.24
Hence, petitioner is now before us claiming that the CA erred in denying her
application for registration of title.
Petitioner asserts that her predecessor-in-interest, Potenciano Abragan,

possessed the subject property as early as 1929. She claims Potenciano was the
one who asked for the original survey of Lot 4342, Cad-23 7 with an original land
Page 16 of 157
area of 12,293 square meters, situated in Patag, Cagayan de Oro City. She averred
that the property subject of the present application consisting of an area of 1,061
square meters and known as Lot 18793, Cad-237, is a portion of Lot 4342, Cad-
237. In support of her claim, petitioner seeks to submit as additional evidence
Bureau of Lands (BL) Form No. 700-2A25 of the Land Management Services which
conducted a survey on Lot 4342, Cad-237 on November 28, 1929 with Potenciano
Abragan as the Cadastral Survey Claimant.
Petitioner also maintains that the subject land is alienable and disposable land of
the public domain and this land classification has long been approved by the
DENR Secretary. She points out that during the entire period of possession of
Potenciano Abragan, the subject land had already been classified as alienable and
disposable land. To support her claim, petitioner submits as additional evidence
the Certification26 issued by the CENRO stating that a parcel of land designated as
Lot 4342, Cad-237 located in Patag, Cagayan de Oro City containing a total area of
12,293 square meters more or less falls within an area classified as Alienable and
Disposable under Project 8, Block I and Land Classification (LC) Map No. 5 85
certified and approved on December 31, 1925. She prays that she be allowed with
leave of, court to submit the aforementioned document in support of her
application for registration.
Furthermore, petitioner claims that she and her witnesses had testified on the
issue of actual, open, continuous, exclusive and notorious possession and
occupation of the subject land, including the act of declaring the subject lot for
tax purposes in their names and religiously paying the taxes of the land to the
government. Thus, petitioner argues that the CA erred in not declaring that she is
entitled to registration of the subject land.
Respondent, through the OSG, filed a Comment27 asserting that only questions of
law may be raised in a petition filed under Rule 45 of the 1997 Rules of Civil
Procedure, as amended. Respondent posits that in the present case, petitioner,
for the first time and only in the present appeal, seeks the admission to evidence
of the following: (1) the Certification dated July 16, 2010 issued by the CENRO in
Cagayan de Oro City to prove that Lot 4342, Cad-23 7 located in Patag, Cagayan
de Oro City falls within the alienable and disposable area under Project No. 8,
Block I and LC Map No. 585 which was certified and approved on December 31,
1925 and (2) BL Form No. 700-2A which shows that Potenciano Abragan was the
Page 17 of 157
original claimant of the entire land denominated as Lot 4342 since 1929, to prove
her supposed acquisitive prescription of the contested lot.
Respondent argues that petitioner's attempt to introduce additional evidence is

impermissible as its introduction would involve a review and assessment of the
evidence on record. Respondent adds that the determination of the probative
value of evidence is a question of fact which is beyond the province of a petition
for review on certiorari. Petitioner should have offered the aforementioned
documents before the land registration court and while the case was pending
appeal before the CA as it is an appellate court with authority to receive evidence.
Moreover, respondent points out that BL Form No. 700-2A submitted by

petitioner named Potenciano Abragan as the original claimant of the entire area
known as Lot 4342 but the same document does not show that petitioner is
likewise a claimant of a part of Lot 4342 or that she derived title to the lot in
question from Potenciano Abragan. Petitioner's possession only started in 1989
when she acquired the lot from Mamerta Tan who in turn acquired the lot from
Teresita Tan. But there is no clear evidence showing how, when and from whom
Teresita Tan acquired the subject lot.
Respondent cites the rule that the applicant for registration must be able to
establish by evidence that he and his predecessor-in-interest have exercised acts
of dominion over the lot under a bona fide claim of ownership since June 12, 1945
or earlier. It is respondent's contention that even if said BL Form No. 700-2A were
considered in this appeal, it would not help petitioner's cause because the
document is bereft of any information showing that petitioner has been in open,
continuous, exclusive and notorious possession of the subject lot since June 12,
1945 or earlier.
Hence, respondent maintains that the CA properly reversed and set aside the trial
court's ruling granting petitioner's application for land registration since
petitioner failed to offer in evidence the necessary certification that the parcel of
land applied for registration is alienable and disposable in character during the
proceedings below. Petitioner also did not present any certification from the
DENR or a certified copy of any land classification map in order to establish
irrefutably the fact that the subject parcel of land is, in fact, alienable and
disposable. Respondent claims that in the absence of such classification the land
Page 18 of 157
remains an unclassified land until it is released therefrom and rendered open to

disposition.
Also, respondent avers that petitioner failed to present specific acts that would
show the nature of her possession and that of her predecessors-in-interest. The
trial court's decision merely relied on the testimony of petitioner and her
witnesses regarding the transfer of possession of the subject property from one
possessor to another without, however, adverting to the particulars of their
respective possession thereof. To prove adverse possession, it is not enough to
simply declare one's possession and that of the petitioner's predecessors-in-
interest to have been adverse, continuous, open, public, peaceful and in the
concept of owner for the required number of years. The applicant should present
specific acts that would show such nature of possession. Thus, according to
respondent, petitioner has failed to positively establish a registrable title to the
subject parcel of land.
Essentially, the main issue to be resolved is whether the CA erred in dismissing

petitioner's application for registration of title.
Prefatorily, we address the issue raised by respondent that only questions of law
may be raised in a petition for review on certiorari. Indeed, the principle is well
established that this Court is not a trier of facts . Therefore, in an appeal by
certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, only
questions of law may be raised.28
The distinction between a "question of law" and a "question of fact" is settled.

There is a question of law when the doubt or difference arises as to what the law
is on a certain state of facts, and the question does not call for an examination of
the probative value of the evidence presented by the parties-litigants. On the
other hand, there is a "question of fact" when the doubt or controversy arises as
to the truth or falsity of the alleged facts. Simply put, when there is no dispute as
to the facts, the question of whether the conclusion drawn therefrom is correct or
not, is a question of law.29 In Republic v. Vega,30 the Court held that when
petitioner asks for a review of the decision made by a lower court based on the
evidence presented, without delving into their probative value but simply on their
sufficiency to support the legal conclusions made, then a question of law is raised.
Page 19 of 157
In the present case, there seems to be no dispute as to the facts, and the question
presented before us calls for a review of the CA's conclusion that the documents
and evidence presented by petitioner are insufficient to support her application
for registration of title. Hence, the petition is properly filed.
Now, on the merits. Petitioner asserts that the land subject of her application has
been declared alienable and disposable in 1925 and that her possession through
her predecessors-in-interest started in 1929. However, after a careful
examination of the evidence adduced by petitioner, we find no error on the part
of the CA in dismissing petitioner's application for registration of title for the
failure of petitioner to prove satisfactorily the requirements for registration
provided under the law.
P.D. No. 1529 or the Property Registration Decree in relation to Section 48(b) of
Commonwealth Act No. 141,31 as amended by Section 4 of P.D. No.
107332 specifies those who are qualified to apply for registration of land. Section
14 of P.D. No. 1529 and Section 48(b) of Commonwealth Act No. 141, as amended
provide thus:
SEC. 14. Who may apply. -The following persons may file in the proper Court of
First Instance [now Regional Trial Court] 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.
xxxx
SEC. 48. The following described citizens of the Philippines, occupying lands of the
public domain or claiming to own any such lands or an interest therein, but whose
titles have not been perfected or completed, may apply to the Court of First
Instance [now Regional Trial Court] of the province where the land is located for
confirmation of their claims and the issuance of a certificate of title therefor,
under the Land Registration Act, to wit:
xxxx
Page 20 of 157
(b) Those who by themselves or through their predecessors-in-interest have been

in the open, continuous, exclusive and notorious possession and occupation of
alienable and disposable lands of the public domain, under a bona fide claim of
acquisition or ownership, since June 12, 1945, except when prevented by war or
force majeure. These shall be conclusively presumed to have performed all the
conditions essential to a Government grant and shall be entitled to certificate of
title under the provisions of this chapter.
Based on the above-quoted provisions, applicants for registration of title must

establish and prove: (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 his possession has been under a bona fide
claim of ownership since June 12, 1945, or earlier.33Each element must
necessarily be proven by no less than clear, positive and convincing evidence;
otherwise the application for registration should be denied.34
Under the Regalian doctrine, all lands of the public domain belong to the State.
The burden of proof in overcoming the presumption of State ownership of the
lands of the public domain is on the person applying for registration, who must
prove that the land subject of the application is alienable and disposable. To
overcome this presumption, incontrovertible evidence must be presented to
establish that the land subject of the application is alienable and disposable.35
To prove that the land subject of the application for registration is alienable, an
applicant must establish the existence of a positive act of the government such as
a presidential proclamation or an executive order; an administrative action;
investigation reports of Bureau of Lands investigators; and a legislative act or
statute. The applicant may secure a certification from the government that the
lands applied for are alienable and disposable, but the certification must show
that the DENR Secretary had approved the land classification and released the
land of the public domain as alienable and disposable, and that the land subject of
the application for registration falls within the approved area per verification
through survey by the PENRO or CENRO. The applicant must also present a copy
of the original classification of the land into alienable and disposable, as declared
by the DENR Secretary or as proclaimed by the President.36
Page 21 of 157
To comply with the first requisite, petitioner submitted a CENRO Certification

stating that Lot 4342, Cad-237 located in Patag, Cagayan de Oro City falls within
the alienable and disposable area under Project No. 8, Block I. Petitioner also
submitted LC Map No. 543 which was certified and approved on December 31,
1925. We, however, find that the attached certification is inadequate to prove
that the subject lot is alienable and disposable. We held in Republic v. TA .N
Properties, Inc.37 that a CENRO certification is insufficient to prove the alienable
and disposable character of the land sought to be registered. The applicant must
also show sufficient proof that the DENR Secretary has approved the land
classification and released the land in question as alienable and disposable. We
ruled in Republic v. TA .N Properties, Inc. that:
x x x it is not enough for the PENRO or CENRO to certify that a land is alienable
and disposable. The applicant for land registration must prove that the DENR
Secretary had approved the land classification and released the land of the public
domain as alienable and disposable, and that the land subject of the application
for registration falls within the approved area per verification through survey by
the PENRO or CENRO. In addition, the applicant for land registration must present
a copy of the original classification approved by the DENR Secretary and certified
as a true copy by the legal custodian of the official records. These facts must be
established to prove that the land is alienable and disposable. Respondents failed
to do so because the certifications presented by respondent do not, by
themselves, prove that the land is alienable and disposable.38
Thus, as it now stands, aside from the CENRO certification, an application for
original registration of title over a parcel of land must be accompanied by a copy
of the original classification approved by the DENR Secretary and certified as a
true copy by the legal custodian of the official records in order to establish that
the land is indeed alienable and disposable.39
In Republic v. Medida,40 the Court explained why a CENRO or PENRO certification

cannot be considered prima facie evidence of the facts stated therein:
Public documents are defined under Section 19, Rule 132 of the Revised Rules on
Evidence as follows:
Page 22 of 157
(a) The written official acts, or records of the official acts of the sovereign
authority, official bodies and tribunals, and public officers, whether of the
Philippines, or of a foreign country;
(b) Documents acknowledged before a notary public except last wills and
testaments; and
(c) Public records, kept in the Philippines, of private documents required by

law to be entered therein.
Applying Section 24 of Rule 132, the record of public documents referred to in

Section 19(a), when admissible for any purpose, may be evidenced by an official
publication thereof or by a copy attested by the officer having legal custody of the
record, or by his deputy x x x. The CENRO is not the official repository or legal
custodian of the issuances of the DENR Secretary declaring public lands as
alienable and disposable. The CENRO should have attached an official publication
of the DENR Secretary s issuance declaring the land alienable and disposable.
Section 23, Rule 132 of the Revised Rules on Evidence provides:
Sec. 23. Public documents as evidence.-Documents consisting of entries in public

records made in the performance of a duty by a public officer are prima facie
evidence of the facts stated therein. All other 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.
The CENRO and Regional Technical Director, FMS-DENR, certifications [do] not fall
within the class of public documents contemplated in the first sentence of Section
23 of Rule 132. The certifications do not reflect "entries in public records made in
the performance of a duty by a public officer," x x x. The certifications are not the
certified copies or authenticated reproductions of original records in the legal
custody of a government office. The certifications are not even records of public
documents. x x x41
Moreover, the CENRO certification attached by petitioner to her petition deserves

scant consideration since it was not presented during the proceedings before the
trial court or while the case was pending before the appellate court. Petitioner
only presented the said certification for the first time before this Court. The
genuineness and due execution of the said document had not been duly proven in
Page 23 of 157
the manner required by law.42 Also, generally, additional evidence is allowed

when it is newly discovered, or where it has been omitted through inadvertence
or mistake, or where the purpose of the evidence is to correct evidence
previously offered.43 In the present case, petitioner did not offer any explanation
why the CENRO certification was not presented and submitted during the
proceedings before the trial court to justify its belated submission to this Court.
As to the second and third requisites, we agree with the appellate court that
petitioner failed to establish that she and her predecessors-in-interest have been
in open, continuous, exclusive and notorious possession and occupation of the
subject land on or before June 12, 1945. Based on the records, the earliest
evidence of possession that petitioner and her predecessor-in-interest Mamerta
Tan had over the subject property was only in 1975 when Mamerta Tan
purchased the subject lot from Teresita Tan. While Mamerta Tan testified that she
purchased the property from Teresita, the records are bereft of any evidence to
show Teresita's mode of acquisition of ownership over the subject lot or from
whom she acquired the property and when her possession of the subject lot had
commenced.1âwphi1
In addition, Honesto Velez, City Assessor of Cagayan de Oro City, merely testified
on the tax declarations issued to certain persons including petitioner and
Mamerta Tan as enumerated in the Land History Card of Cadastral Lot 4342 but
his testimony did not prove their possession and occupation over the subject
property. What is required is open, exclusive, continuous and notorious
possession by the applicant and her predecessors-in-interest, under a bona fide
claim of ownership, since June 12, 1945 or earlier.44 Here, it is not shown by clear
and satisfactory evidence that petitioner by herself or through her predecessors-
in-interest had possessed and occupied the land in an open, exclusive, continuous
and notorious manner since June 12, 1945 or earlier.
Notably, petitioner attempted to convince this Court that Potenciano Abragan is

her predecessor-in-interest and was in possession of the subject property even
before 1929. However, there was absolutely no evidence proffered by petitioner
that she derived her title to the property from Potenciano Abragan. Moreover, BL
Form No. 700-2A attached by petitioner to her present petition and sought to be
submitted as additional evidence, does not in any way prove that Potenciano
Abragan was in possession and occupation of the property before 1929. At best, it
merely shows that it was Potenciano who requested for an original survey of the
Page 24 of 157
lot. More importantly, just like the CENRO certification, BL Form No. 700-2A could
not be given any evidentiary weight and value since it was not presented before
the trial court and its genuineness and due execution has not been duly proven. It
must be emphasized that any evidence which a party desires to submit for the
consideration of the court must formally be offered by the party; otherwise, it is
excluded and rejected.45
In fine, since petitioner failed to prove that (1) the subject property was classified
as part of the disposable and alienable land of the public domain; and (2) she and
her predecessors-in-interest have been in open, continuous, exclusive, and
notorious possession and occupation thereof under a bona fide claim of
ownership since June 12, 1945 or earlier, her application for registration of title of
the subject property under P.D. No. 1529 should be denied.
WHEREFORE, the petition is DENIED. The Decision dated March 11, 2010 and
Resolution dated May 20, 2010 of the Court of Appeals in CA-G.R. CV No. 00319-
MIN are AFFIRMED.
With costs against the petitioner.
SO ORDERED.
MARTIN S. VILLARAMA, JR.

Associate Justice
WE CONCUR:
G.R. No. 202414 June 4, 2014
JOSEPHINE WEE, Petitioner,

vs.
FELICIDAD MARDO, Respondent.
DECISION
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
Page 25 of 157
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
Page 26 of 157
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.
Page 27 of 157
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:
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.
Page 28 of 157
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.
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:
Page 29 of 157
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:
Page 30 of 157
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
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
Page 31 of 157
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
Page 32 of 157
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 respondent as evidenced by a deed of sale, she can file an action
Page 33 of 157
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.
JOSE CATRAL MENDOZA

Associate Justice
WE CONCUR:
G.R. No. 212388 December 10, 2014
REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
HEIRS OF SPOUSES DONATO SANCHEZ and JUANA MENESES, represented by
RODOLFO S. AGUINALDO,Respondents.
DECISION
VELASCO, JR., J.:
Page 34 of 157
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
seeking the reversal and setting aside of the Decision1 dated November 8, 2013
and Resolution dated April 29, 2014 of the Court or Appeals in CA-G.R. CV No. 94
720, entitled Heirs of the Spouses Donato Sanchez and Juana Meneses,
represented by Rodolfo S. Aguinaldo v. Republic of the Philippines.
Respondents filed an amended petition for reconstitution of Original Certificate of

Title (OCT) No. 45361 that covered Lot No. 854 of the Cadastral Survey of
Dagupan, pursuant to Republic Act (RA) No. 26.2 In said petition, respondents
made the following allegations:
1. That OCT No. 45361 was issued in the name of their predecessor-
ininterest, the spouses Sanchez, pursuant to Decree No. 41812 issued in
relation to a Decision dated March 12, 1930 of the then Court of First
Instance (CFI) of Pangasinan;
2. Said lot was declared for taxation purposes in the name of the spouses
Sanchez and that when the latter died intestate, they executed a Deed of
Extrajudicial Partition. Said Deed, however, could not be registered because
the owner’s copy of OCT No. 45361 was missing; and
3. The Offices of the Register of Deeds (RD) of Lingayen and Dagupan,

Pangasinan issued a certification that the copies of Decree No. 41812 and
OCT No. 45361 could not be found among its records.
Finding the petition sufficient in form and substance, the CFI issued an Order
dated June 24, 2001 giving due course thereto and ordered the requisite
publication thereof, among others. Meanwhile, the Administrator of the Land
Registration Authority (LRA) requested the trial court, which the latter granted
through its October 11, 2002 Order, torequire respondents to submit the
following documents:
1. Certification from the RD that OCT No. 45361 was either lost or
destroyed;
2. Copies of the technical description of the lot covered by OCT No. 45361,
certified by the authorized officer of the Land Management Bureau/LRA;
and
Page 35 of 157
3. Sepia film plan of the subject lot prepared by the duly licensed geodetic
engineer.
Due to difficulties encountered in securing said documents, respondents moved

for the archiving of the case, which motion was granted by the trial court. It was
later revived when respondents finally secured the said documents.
The petition was published anew and trial later ensued, with the following
documents submitted by respondents in evidence, to wit:
1. Decision dated March 12, 1930 (written in Spanish) in Cadastral Case No.
40, GLRO Cad. Record No. 920 adjudicating Lot No. 854 in favor of the
spouses Donato Sanchez and Juana Meneses which was certified by the LRA
as a true copy of the original; and
2. Certified true copy of the Registrar’s Index Card containing the notation
that OCT No. 45361 covering Lot No. 854 was listed under the name of
Donato Sanchez.
On January 11, 2008, the LRA submitted its Report pertaining to the legality of the
reconstitution sought in favor of respondents, the relevant portions of which, as
quoted by the CA in the assailed Decision, are as follows:
(2) From Book No. 35 of the Record Book of Cadastral Lots on file at the
Cadastral Decree Section, this Authority, it appears that Decree No. 418121
was issued to Lot No. 854, Dagupan Cadastre on January 12, 1931, in
Cadastral Case No. 40, GLRO Cad. Record No. 920. Copy of the said decree,
however, is no longer available in this Authority.
(3) The plan and technical description of lot 854, cad 217, Case 3, Dagupan
Cadastre, were verified correctby this Authority to represent the aforesaid
lot and the same have been approved under (LRA) PR-07-01555-R pursuant
to the provisions of Section 12 of Republic Act No. 26.
On June 30, 2008, however, the Regional Trial Court (RTC) rendered its
Decision3 dismissing the petition for lack of sufficient evidence, ruling that RA No.
26 only applies in cases where the issuance of the OCT sought to be reconstituted
has been established, only that it was lost or destroyed. While acknowledging the
existence of Decree No. 418121 which was issued for the lot subject of the case,
Page 36 of 157
the RTC nevertheless held that there is no established proof that OCT No. 45361
was issued by virtue of said Decree.
Aggrieved, respondents moved for reconsideration of the above Decision,

insisting that there was sufficient evidence to prove the issuance of OCT No.
45361. Instead of filing a comment thereto, the RD of Dagupan City manifested
that OCT No. 45361 had been superseded by TCT No. 10202 issued to a certain
Rufino Mariñas with notation that the land it covered was "originally registered
on the 29th day of January, [1931] x x x as OCT No. 45361 pursuant to Decree No.
418121 issued in G.L.R.O. Cadastral Record No. 920." Furthermore, TCT No. 10202
was cancelled by TCT No. 44365 and later by TCT No. 80792 in the name of
Dagupan Doctors Villaflor Memorial Hospital, both bearing a note which reads,
"The name of the registered owner of OCT No. 45361 is not available as per
certification of the [RD of Lingayen], dated August 18, 1982, entries nos. 107415
and 107416, respectively."
Disagreeing with the trial court’s findings and holding that Lot 854 was judicially
awarded to respondents’ predecessor-in-interest in Cadastral Case No. 40, GLRO
Cad. Record No. 920,the CA reversed the RTC ruling on appeal and directed the
reconstitution of OCT No. 45361 in favor of herein respondents.
The CA held that even though respondents were unable to present the
documents necessary for reconstitution of title as enumerated under Section 2 of
RA No. 26, particularly (a) to (e) thereof, the documentary pieces of evidence
presented by respondents fall under paragraph (f) of said provision and are
sufficient to warrant the reconstitution of OCT No. 45361. In this regard, the CA
emphasized that the certificates of title which the RD manifested to have
superseded OCT No. 45361 all bear the notation to the effect that Lot No. 854
was originally registered on January 29, 1931 as OCT No. 45361 pursuant to
Decree No. 418121 issued in G.L.R.O. Cadastral Record No. 920, the name of the
registered owner of which is not available. This, to the CA, substantially complies
with the requirement enunciated in Republic v. Tuastumban4 that the documents
must come from official sources which recognize the ownership of the owner and
his predecessors-in-interest.
Its motion for reconsideration having been denied by the appellate court in the
assailed Resolution, petitioner lodged the instant petition questioning the
Page 37 of 157
sufficiency of the documents presented by respondents to warrant the

reconstitution of the alleged lost OCT No. 45361.
We resolve to grant the petition.
The Court agrees with the trial court that no clear and convincing proof has been
adduced that OCT No. 45361 was issued by virtue of Decree No. 418121. The
Decision dated March 21, 1930 and the Registrar’s Index Card containing the
notation on OCT No. 45361 do not cite nor mention that Decree No. 418121 was
issued to support the issuance of OCT No. 45361. At this point, it is well to
emphasize that a petition for reconstitution of lost or destroyed OCT requires, as
a condition precedent, that an OCT has indeed been issued, for obvious reasons.
Assuming arguendo that respondents were able to sufficiently prove the

existence of OCT No. 45361 considering the totality of the evidence presented,
the Court finds that reconstitution thereof is still not warranted, applying Section
15 of RA No. 26. Said provision reads:
Section 15. If the court, after hearing, finds that the documents presented, as
supported by parole evidence or otherwise, are sufficient and proper to warrant
the reconstitution of the lost or destroyed certificate of title, and that the
petitioner is the registered owner of the property or has an interest therein, that
the said certificate oftitle was in force at the time it was lost or destroyed, and
that the description, area and boundaries of the property are substantially the
same as those contained in the lost or destroyed certificate of title, an order of
reconstitution shall be issued. x x x
As explicitly stated in the above-quoted provision, before a certificate of title

which has been lost or destroyed may be reconstituted, it must first be proved by
the claimants that said certificate of title was still in force at the time it was lost or
destroyed, among others. Here, the mere existence of TCT No. 10202, later
cancelled by TCT No. 44365, which, in turn, was superseded by TCT No. 80792,
which bear the notations:
originally registered on the 29th day of January, [1931] x x x as OCT No. 45361
pursuant to Decree No. 418121 issued in G.L.R.O. Cadastral Record No. 920.
Page 38 of 157
The name of the registered owner of OCT No. 45361 is not available as per
certification of the [RD of Lingayen], dated August 18, 1982, entries nos. 107415
and 107416, respectively.
clearly shows that the OCT which respondents seek to be reconstituted is no

longer in force, rendering the procedure, if granted, a mere superfluity.
Additionally, if indeed OCT No. 45361 was lost or destroyed, it is necessary that
the RD issue a certification that such was in force at the time of its alleged loss or
destruction. Definitely, the RD cannot issue such certification because of the
dearth of records in support of the alleged OCT No. 45361 in its file. The
presentation of alleged derivative titles––TCT No. 10202, TCT No. 44365 and TCT
No. 80792––will not suffice to replace this certification because the titles do not
authenticate the issuance of OCT No. 45361 having been issued by the RD without
any basis from its official records. As a matter of fact, it isa wonder how the
derivative titles were issued when the existence of OCT No. 45361 could not be
established based on the RD’s records. The RD failed to explain how it was able to
make an annotation of the original registration of the lot under OCT No. 45361
when respondents are now asking for its reconstitution. It is also highly suspicious
why respondents are asking the reconstitution of OCT No. 45361 when,
supposedly, it has already been cancelled and new titles have already been issued
based on transfers purportedly made by respondents. Lastly, of what use is the
reconstituted OCT No. 45361 when the lot has already been transferred to other
persons. It will practically be of no value or worth to respondents.
If the respondents still insist on the reconstitution of OCT No. 45361, the proper
procedure is to file a petition for the cancellation and re-issuance of Decree No.
418121 following the opinion of then LRA Administrator Benedicto B. Ulep. In said
Opinion, Administrator Ulep explained the reason for the necessity of the petition
for cancellation of the old decree and its re-issuance, thus:
1. Under the premises, the correctproceeding is a petition for cancellation of the

old decree, re-issuance of decree and for issuance of OCT pursuant to that re-
issued decree.
In the landmark decision of Teofilo Cacho vs. Court of Appeals, et al., G.R. No.
123361, March 3, 1997, our Supreme Court had affirmed the efficacy of filing a
Page 39 of 157
petition for cancellation of the old decree; the reissuance of such decree and the
issuance of OCT corresponding to that reissued decree.
"Thus, petitioner filed an omnibus motion for leave of court to file and to admit
amended petition, but this was denied. Petitioner elevated the matter to his
Court (docketed as Teofilo Cacho vs. Hon. Manindiara P. Mangotara, G.R. No.
85495) but we resolved to remand the case to the lower court, ordering the latter
to accept the amended petition and to hear it as one for re-issuance of
decreeunder the following guidelines:
Considering the doctrines in Sta. Ana vs. Menla, 1 SCRA 1297 (1961) and Heirs of
Cristobal Marcos vs. de Banuvar, 25 SCRA 315 [1968], and the lower court findings
that the decrees had in fact been issued, the omnibus motion should have been
heard as a motion to re-issue the decrees in order to have a basis for the issuance
of the titles and the respondents being heard in their opposition.
Considering the foregoing, we resolve to order the lower court to accept the
amended petition subject to the private respondent’s being given the opportunity
to answer and to present their defenses. The evidence already on record shall be
allowed to stand but opportunity to controvert existing evidence shall be given
the parties."
Following the principle laid down in the above-quoted case, a question may be
asked: Why should a decree be canceled and re-issued when the same is valid and
intact? Within the context of this discussion, there is no dispute that a decree has
been validly issued. And in fact, in some instances, a copy of such decree is intact.
What is not known is whether or not an OCT is issued pursuant to that decree. If
such decree is valid, why is there a need to have it cancelled and re-issued?
Again, we invite you back to the highlighted provision of Section 39 of PD 1529

which states that: "The original certificate of title shall be a true copy of the
decree of registration." This provision is significant because it contemplates an
OCT which is an exact replica of the decree. If the old decree will not be canceled
and no new decree issued, the corresponding OCT issued today will bear the
signature of the present Administrator while the decree upon which it was based
shall bear the signature of the past Administrator. This is not consistent with the
clear intention of the law which states that the OCT shall be true copy of the
Page 40 of 157
decree of registration. Ostensibly, therefore, the cancellation of the old decree

and the issuance of a new one is necessary.
2. Republic Act No. 26 for reconstitution of lost OCT will not lie.
It is so basic under Republic Act No. 26 that the same shall only apply in cases
where the issuance of OCT has been established, only that it was lost or destroyed
under circumstances provided for under said law. Again, within the context of this
discussion, RA No. 26 will not apply because in this case, there is no established
proof that an OCT had been issued. In other words, the applicability of RA No. 26
hinges on the existence of priorly issued OCT.
Will reconstitution of Decree lie then? Again, the answer is no. There is no
showing that the decree is lost. In fact, it can be established that a decree,
pursuant either to a cadastral proceeding or an ordinary land registration case,
has been issued. Under existing land registration laws and jurisprudence, there is
no such thing as reconstitution of a decree. RA No. 26 cannot likewise be the basis
because the latter refers to an OCT and not a decree of registration.
3. For as long as a decree has not yet been transcribed (entered in registration
book of the RD), the court which adjudicated and ordered for the issuance of such
decree continues to be clothed with jurisdiction.
This matter has been settled in several cases, to name a few:
"There is nothing in the law that limits the period within which the court may
order or issue a decree.1âwphi1 The reason is what is stated in the consideration
of the second assignment error, that the judgment is merely declaratory in
character and does not need to be asserted or enforced against the adverse
party. Furthermore, the issuance of a decree is a ministerial duty both of the
judge and of the Land Registration Commission; failure of the court or of the clerk
to issue the decree for the reason that no motion therefore has been filed can not
prejudice the owner, or the person in whom the land is ordered to be registered."
"We fail to understand the arguments of the appellant in support of the above
assignment, except in so far as it supports his theory that after a decision in a land
registration case has become final, it may not be enforced after the lapse of a
period of 10 years, except by another proceeding to enforce the judgment may be
enforced within 5 years by motion, and after five years but within 10 years, by an
Page 41 of 157
action (Sec. 6, Rule 39). This provision of the Rules refers to civil actions and is not
applicable to special proceedings, such as a land registration case. This is so
because a party in a civil action must immediately enforce a judgment that is
secured as against the adverse party. And his failure to act to enforce the same
within a reasonable time as provided in the Rules makes the decision
unenforceable against the losing party." (Sta. Ana vs. Menla, 1 SCRA 1297 and
Heirs of Cristobal Marcos vs. de Banuvar, 25 SCRA 315) Furthermore, in Gomez v.
Court of Appeals, No. L-77770, December 15, 1988, 168 SCRA 503, the Supreme
Court declared that:
". . . Unlike ordinary civil actions, the adjudication of land in a cadastral or land
registration proceeding does not become final, in the sense of
incontrovertibility(,) until after the expiration of one (1) year after (sic) the entry
of the final decree of registration. This Court, in several decisions, has held that as
long as a final decree has not been entered by the Land Registration Commission
(now NLTDRA) and the period of one (1) year has not elapsed from the date of
entry of such decree, the title is not finally adjudicated and the decision in the
registration proceeding continues to be under the control and sound discretion of
the court rendering it." (Also cited in Labarada v. CA and Ramos v. Rodriguez, 244
SCRA 418, 423-424)
4. The heirs of the original adjudicate may file the petition in representation of
the decedent and the re-issued decree shall still be under the name of the original
adjudicate.
It is a well settled rule that succession operates upon the death of the decedent.
The heirs shall then succeed into the shoes of the decedent. The heirs shall have
the legal interest in the property, thus, they cannot be prohibited from filing the
necessary petition.
As the term connotes, a mere re-issuance of the decree means that the new
decree shall be issued which shall, in all respects, be the same as that of the
original decree. Nothing in the said decree shall be amended nor modified; hence,
it must be under the name of the original adjudicatee.
In sum, from the foregoing, it may be safely concluded that for as long as the
decree issued in an ordinary or cadastral registration case has not yet been
entered, meaning, it has not yet been transcribed in the Registration Book of the
Page 42 of 157
concerned Registrar of Deeds, such decree has not yet attained finality and
therefore may still be subject to cancellation in the same land registration case.
Upon cancellation of such decree, the decree owner (adjudicatee or his heirs)
may then pray for the issuance of a new decree number and, consequently, pray
for the issuance of an original certificate of title based on the newly issued decree
of registration.
As such, We find no reason to disturb the ruling of the R TC that reconstitution of

OCT No. 45361 is not warranted under the circumstances, albeit on a different
ground.
WHEREFORE, premises considered, the instant petition is hereby GRANTED.

Accordingly, the Decision of the Court of Appeals dated November 8, 2103 and its
Resolution dated April 29, 2014 in CA-G.R. CV No. 94720 are hereby REVERSED
and SET ASIDE. The Decision of the Regional Trial Court, Branch 40 in Dagupan
City in Cad. Case No. 2001-0043-D is hereby REINSTATED.
SO ORDERED.
PRESBITERO J. VELASCO, JR.

Associate Justice
WE CONCUR:
EASTWORLD MOTOR G.R. No. 163994

INDUSTRIES CORPORATION,
Represented by Its President, Present:
PETER TY,
Petitioner, Panganiban, J.,
Chairman,
Sandoval-Gutierrez,
- versus - Corona,
Carpio Morales, and
Garcia, JJ
SKUNAC CORPORATION,
Represented by Its Alleged President Promulgated:
LARRY LIM; and MIGUEL LIM,
Respondents. December 16, 2005
x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- x
Page 43 of 157
DECISION
PANGANIBAN, J.:
his Court has consistently held that a reconstituted certificate of title is void if
the owners duplicate certificate is not lost or destroyed, but is in the possession
T
of another person. Nonetheless, a valid transfer can issue from the void
reconstituted title if an innocent purchaser for value intervenes. A finding of good
faith and for value requires a judicious evaluation of the facts of each case.
The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court,

assailing the November 5, 2003 Decision[2] and the June 3, 2004 Resolution[3]of the
Court of Appeals (CA) in CA-GR SP No. 72615. The challenged Decision disposed as
follows:
WHEREFORE, foregoing premises considered, the Petition is

hereby GRANTED. Resultantly, the assailed order of x x x RTC, Branch
4, Manila in LRC Case 309 is declared NULL and VOID for having been
issued without jurisdiction. The Register of Deeds of Manila is ordered
to cancel the new owners duplicate copies pursuant to the assailed
order. The writ of injunction issued is hereby made permanent. x x x
Miguel Lim is ordered to pay [respondent corporation] attorneys fees
in the amount of P150,000.00 and to pay the costs.
The Intervention of Eastworld is hereby ordered DISMISSED.[4]
Page 44 of 157
The assailed Resolution denied petitioners Motion for Reconsideration.
The Facts
The CA narrates the facts as follows:
Sometime in February 2, 2001, x x x Miguel Lim, then presenting

himself as [p]resident of [respondent] corporation filed with x x x [the]
Regional Trial Court, Branch 4, Manila[,] a petition for the issuance of
a new transfer certificate of title in lieu of the lost TCT No. 207104
pursuant to RA 26 as amended by P.D. 1425.
As one of the jurisdictional requirements, [Miguel Lim] executed

an affidavit of loss and also attached a [photocopy] of the alleged title
to the petition.
On the basis of said proofs and compliance of other

jurisdictional requirements[, the trial] court issued an order on March
7, 2001, setting the petition for ex-parte reception of evidence before
LRA Clerk of Court Atty. Josefina L. Montaer. The reception of evidence
was set on March 28, 2001, transcript of said proceedings [was]
attached to [the] records.
On May 22, 2001, [the trial] court issued an order directing the
Register of Deeds of Manila to issue a new owners duplicate of TCT
No. 207104 in lieu of the lost one and to deliver the same to [Miguel
Lim or his] authorized representative. A copy of said order was served
upon a hand written request of [Miguel Lim] and on June 25, 2001 a
certificate of finality was issued by the chief, clerks of court division of
the Land Registration Authority.
Page 45 of 157
As a consequence, [a petition to annul order and injunction with

prayer for a temporary restraining order was filed with the CA] with
the lone issue raised, to wit:
ISSUE
WHETHER OR NOT THE ORDER RENDERED BY THE

REGIONAL TRIAL COURT OF MANILA, BRANCH 4 IS NULL
AND VOID FOR LACK OF JURISDICTION.
In support of its submission, [respondent corporation]

advance[d] the following arguments:
DISCUSSION/ARGUMENTS
In the above-mentioned Affidavit of Loss, x x x

Miguel Lim falsely asserted that the owners duplicate
copy of TCT No. 207104 was lost.
x x x Miguel Lims above averment is a total lie,

calculated to mislead the Regional Trial Court of Manila
into issuing a new owners duplicate copy of TCT No.
207104.
The truth of the matter is that x x x Miguel Lim was

fully cognizant that the owners duplicate copy of TCT No.
207104 is in the custody and possession of Larry Lim,
President of [respondent]-corporation.
Miguel Lim was never in custody or possession of

the said title.
Clearly, the subject Order was issued on the basis

of the false and fraudulent representation of x x x Miguel
Lim, and is, therefore, null and void, and must be annulled
and set aside.
Page 46 of 157
[Despite] due notice, [Miguel Lim] never filed any comment,

much less a memorandum as required, [despite] the time extension
granted him.
On the other hand, [Petitioner] Eastworld Motor Industries

Corporation, represented by its [c]hairman, Peter Ty filed a Motion to
Intervene which [the Court of Appeals] granted in an Order dated
January 14, 2003. Intervenor assert[ed] its ownership being a
purchaser in good faith of such property. It submits that [respondent
corporation] must bear the loss being responsible for the loss of title.[5]
Ruling of the Court of Appeals

Because the owners certificate of title was not lost but was in fact in the possession
of the true owner, the reconstituted one was deemed void and its cancellation
ordered by the CA.[6]
The appellate court further ruled that petitioner was not a purchaser in good
faith and for value.[7] The latter should have been on guard, because the Affidavit
of Loss was annotated at the back of the reconstituted title. Moreover, petitioner
verified the identity of the seller of the property only after the sale had taken
place.[8]
Hence, this Petition.[9]
The Issues
Petitioner states the issues in this wise:
Page 47 of 157
Whether or not the Court of Appeals erred in declaring as null

and void the reconstituted title more than one (1) year after the same
was issued.
Whether or not the mere fact that the TCT 207104 shown to
petitioner is a reconstituted one overturn the fact that petitioner is a
purchaser in good faith and for value.
Whether or not the Court of Appeals erred in dismissing

petitioners intervention. The nullification of the new (reconstituted)
owners duplicate certificate issued by the RTC Branch 4, Manila in LRC
Case No. 309 cannot prejudice petitioners rights.
Whether or not the Court of Appeals erred in failing to note that it is

Larry Lims negligent act of failing to update the corporations SEC
documents which made the sale of the subject lot possible.[10]
The Courts Ruling
The Petition is partly meritorious.
Main Issue:
Validity of the Reconstituted Title
Being intertwined, the second and the third issues raised by petitioner will
initially be addressed by the Court. Also, a discussion of these issues will lead to a
resolution of the first one.
Page 48 of 157
At the outset, the Court observes that the applicable law in applying for a
replacement of an owners duplicate certificate of title is PD 1529. New Durawood
Company v. Court of Appeals[11] clarified that RA No. 26 applies only in cases of
reconstitution of lost original certificates on file with the Register of
Deeds.[12]Respondent Miguel Lim procured the reconstituted title on the basis of
RA No. 26.
At any rate, the procedure employed for the issuance of the reconstituted
certificate of title has not been raised as an issue in the present case. The
controversy relates primarily to petitioners right as purchaser of the property
covered by the replaced certificate.
Ownership Merely Evidenced

by the Certificate of Title
This Court has consistently held that when the owners duplicate certificate
of title has not been lost, but is in fact in the possession of another person, then
the reconstituted certificate is void, because the court that rendered the decision
had no jurisdiction.[13] Reconstitution can validly be made only in case of loss of the
Page 49 of 157
original certificate.[14] The rationale for this principle is summarized in Strait Times
v. Court of Appeals,[15] from which we quote:
The reconstitution of a title is simply the reissuance of a new

duplicate certificate of title allegedly lost or destroyed in its original
form and condition. It does not pass upon the ownership of the land
covered by the lost or destroyed title. Possession of a lost certificate is
not necessarily equivalent to ownership of the land covered by it. The
certificate of title, by itself, does not vest ownership; it is merely an
evidence of title over a particular property.[16]
Applying the above ruling to the instant case, the certificate of title procured
by Miguel Lim was clearly void. Respondent corporations presentation of the
original owners duplicate certificate of title showed to the court the physical
existence, and the corporations possession, of the certificate. The existence of the
document is in fact unrebutted by petitioner.
Buyers in Good Faith
Settled is the rule that no valid transfer certificate of title (TCT) can issue from a
void TCT, unless an innocent purchaser for value had intervened.[17] An innocent
purchaser for value is one who buys the property of another, without notice that
some other person has a right to or interest in the property, for which a full and fair
price is paid by the buyer at the time of the purchase or before receipt of any notice
of the claims or interest of some other person in the property.[18] The protection
Page 50 of 157
given to innocent purchasers for value is
necessary to uphold a certificate of titles efficacy and conclusiveness, which the
Torrens system ensures.[19]
In the last analysis, good faith, or the lack of it, is a question of intention. But in
ascertaining the intention that impels one on a given occasion, the courts are
necessarily controlled by the evidence as to the conduct and other outward acts by
which the motive may safely be determined.[20] Naturally, a finding of good faith
depends on the factual circumstances of each case. The absence of any knowledge
or circumstance that ought to put a person on inquiry implies good faith.
CAs Finding Not

Supported by Evidence
The evidence considered by the CA supposedly supported the finding that
petitioner was not a purchaser in good faith and for value. This Court finds that
evidence wanting. We quote the pertinent portion of the appellate courts Decision:
x x x. A careful reading of TCT No. [207104] will readily show that the
affidavit of loss which was the alleged basis for the issuance of a new
title was annotated [at] the back of said title. x x x [Petitioner] could
not close its eyes to such fact and that it should have been sufficient
basis for it to be on guard and cause the necessary investigation as to
the truth of the allegation contained in said affidavit of loss. Having
failed to do so, it cannot claim that it is a purchaser in good faith.
Page 51 of 157
Besides, records undeniably show that the alleged SEC certification

[petitioner] secured and which it now presents to [allege] good faith is
dated only September 10, 2002. Clearly the same was secured long
after the sale took place and only after [respondent] instituted the
action to annul. Under such circumstances, the allegation of good faith
is negated.[21]
The annotation of an affidavit of loss on a reconstituted certificate is a direct
result of the reconstitution. The annotation does not necessarily categorize every
purchaser of property covered by the reconstituted certificate as a purchaser in
bad faith. As a rule, the annotation serves as a fair notice that the reconstituted
certificate might be defective and inferior to an already existing original certificate
of title. Hence, purchasers should make the necessary investigation regarding the
procurement of property covered by a reconstituted certificate.[22]
The present case, however, presents circumstances that make such an
investigation futile. Thus, the annotation of the Affidavit of Loss on the
reconstituted certificate cannot, by itself, be the basis of a finding of either good or
bad faith.
First, the property is titled under the name of respondent corporation, which
was also the party that petitioned for the reconstituted certificate. Second, the
Deed of Absolute Sale was executed on July 5, 2002, between petitioner and Skunac
Page 52 of 157
Corporation, as represented by Miguel Lim.[23] Third, the Verification and
Certification attached to the Petition for the Issuance of Lost Owners Copy of TCT
was signed by Lim as president of the corporation.[24] Fourth, the Secretarys
Certificate that authorized Lim for the judicial reconstitution of the lost duplicate
original was prepared by Lani G. Wenceslao, the corporate secretary of Skunac
Corporation.[25] Significantly, in the records of the Securities and Exchange
Commission (SEC), both Lim and Wenceslao, both of whom are stockholders of
respondent corporation,[26] appear as the president and the corporate secretary,
respectively.[27]
This Court also disagrees with the CAs finding that the allegation of good faith
was negated by the SEC Certification, which stated that Lim was president of
Skunac Corporation. Although dated September 10, 2002, the Certification was not
a substantial proof that petitioner had failed to verify the records prior to the sale
on July 5, 2002.[28] The Certification had obviously been procured to address
respondents Petition to Annul the Order of judicial reconstitution, filed on
September 4, 2002.[29] Moreover, the Certification simply confirmed that on June
10, 2002, prior to the sale, Lim was elected president.
Further Proceedings Necessary
Page 53 of 157
The Court is not prepared to rule categorically that petitioner was a purchaser in
good faith and for value, and therefore entitled to the property covered by the
subject certificate of title. The right of respondent corporation to due process
would be violated if it is not given the opportunity to prove that petitioner was not
an innocent
purchaser. Indeed, the CA should have ordered further proceedings to determine
whether petitioners right should prevail over respondents.
The procedure to be followed when trial is necessary for cases involving the
annulment of judgment is stated in Rule 47 of the Rules of Court:
Sec. 6. Procedure. The procedure in ordinary civil cases shall be

observed. Should a trial be necessary, the reception of the evidence
may be referred to a member of the court or a judge of a Regional Trial
Court.
This Court observes that the assailed Decision failed to address many questions
that may shed light on the present controversy, as follows: (1) How did Larry Lim
obtain possession of the original duplicate certificate of title, when the SEC records
were silent as to his involvement in the corporation? (2) Was the original duplicate
certificate of title really lost? (3) Who was the true president of the corporation?
Page 54 of 157
(4) Was the corporation negligent in failing to update its SEC records? (5) Was the
sale valid?
Petitioners contention that the case had already been litigated when
respondent allegedly filed an injunction case before the Regional Trial Court of Manila
on August 29, 2002, should also be addressed.[30]
The instant case cannot be fully settled by voiding a reconstituted certificate
on the basis of the existence of the duplicate original. The rights of a purchaser of
the property covered by the reconstituted certificate should also be determined.
Another Issue:
Indefeasibility of Title
Petitioner claims that the indefeasibility of a title one year after its entry bars
respondent corporation from annulling the trial courts judgment. This argument
must necessarily fail. As discussed earlier, the reconstituted certificate is void.
Consequently, it may be attacked anytime.[31] Demetriou v. Court of
Appeals[32]affirms that the remedy to nullify an order granting reconstitution is a
petition for annulment under Rule 47 of the Rules of Court.[33]
Page 55 of 157
WHEREFORE, the Petition is PARTLY GRANTED. The case is REMANDED to

the appellate court for reception of evidence in conformity with this Decision. The
assailed CA Decision is PARTLY AFFIRMED, only insofar as it declared the
reconstituted certificate of title null and void.
No pronouncement as to costs.
SO ORDERED.
[G.R. No. 111732. February 20, 1996]
NEW DURAWOOD CO., INC., petitioner, vs. COURT OF APPEALS, HON. FELIX S.
CABALLES, as Judge, RTC of Antipolo, Rizal, Branch 71, WILSON M. GAW,
ORLANDO S. BONGAT, DURAWOOD CONSTRUCTION AND LUMBER SUPPLY
CO., INC., respondents.
DECISION
PANGANIBAN, J.:
The main issue here is: does a court have jurisdiction to issue a new
owners duplicate of a Torrens certificate of title if it is shown that
the existing owners copy has not, in fact and in truth, been lost or destroyed? The
Court resolved this issue in the negative in this petition for review under Rule 45 of
the Rules of Court, of the Decision1 of the Court of Appeals2promulgated on May
Page 56 of 157
31, 1993 and the subsequent Resolution denying the motion for reconsideration.
The said Rulings dismissed the petition in CA-G.R. SP No. 25434 and in effect
affirmed the order3 of the Regional Trial Court, Branch LXXI, Antipolo,
Rizal4 dated April 16, 1991 in LRC Case No. 9 1-924, the dispositive portion of which
reads:
WHEREFORE, premises considered, judgment is hereby rendered:
(a) Declaring the owner s duplicate copy of Transfer Certificates of Title Nos.
140486, 156454 and 140485 which were lost, null and void and of no further
force and effect and in lieu thereof.
(b) Hereby orders and directs that new copy of the said titles be issued to the
petitioner giving them the same faith and credit and carrying over the same terms
and conditions appearing on the originals thereof, upon payment of the required
fees.
SO ORDERED.
By Resolution of the First Division dated November 15, 1995, this case along
with several others was transferred to the Third Division. After due consultation
and deliberation, the Court assigned the undersigned ponente to write this
Decision.
The Facts
On February 14, 1990, a Petition for Judicial Reconstitution of the Lost Owners
Duplicate Certificates of TCT Nos. 140486; 156454 and 1404855. was filed in the
Regional Trial Court, Branch LXXI, Antipolo, Rizal by petitioner-corporation,
represented by its Branch Manager, Wilson M. Gaw x x x. Attached to said petition
was an Affidavit of Loss dated December 31, 19906 of respondent Orlando S.
Bongat, one of the stockholders of petitioner-corporation.
Finding the petition to be sufficient in form and in substance, respondent Judge
set the case for hearing on March 18, 1991. On April 16, 1991, respondent Judge
issued the questioned order.
Sometime in May, 1991, petitioner discovered that the original TCT Nos. N-
140485, N-140486 and 156454 on file with the Register of Deeds of Rizal had been
Page 57 of 157
cancelled and, in lieu thereof, TCT Nos. 200100, 200101 and 200102 had been
issued in the name of respondent Durawood Construction and Lumber Supply, Inc.
Surprised by this cancellation, petitioner - after investigation - found out about the
reconstitution proceeding in the respondent trial court. So, on July 17, 1991,
petitioner filed suit7 in the Court of Appeals docketed as CA-G.R.25434 praying for
the annulment of the assailed order in LRC Case No. 91-924 penned by
respondent Judge. It also prayed for the cancellation of the new certificates (TCT
Nos. 200100, 200101 and 200102). On May 31, 1993, the respondent Court of
Appeals rendered the assailed Decision and on August 30, 1993, the Resolution
denying the motion for reconsideration. Hence, the present recourse to the
Supreme Court.
The Issues
Petitioner brought up the following ground as basis for its petition:
The Court of Appeals gravely abused its authority in not declaring the order of
respondent Judge Caballes in LRC Case No. 91-924 null and void for want of
jurisdiction and in not declaring that the reconstitution of the owners duplicate
transfer certificates of title Nos. N-140486, N-140485 and 156454 was obtained
through fraud.
Petitioner argues that a reconstitution proceeding is one in rem and thus

jurisdiction can be acquired only through publication and notice sent pursuant to
Section 13, Republic Act No. 26. It also alleges that fraud is manifest (1) from the
insufficient allegations of the petition filed before the trial court, as it (the petition)
does not mention the names of adjoining land owners and interested persons, as
well as (2) from the affidavit of loss attached to the petition.
In their Comment, private respondents aver that in 1990, these three lots were
sold by petitioner to Durawood Construction and Lumber Supply, Inc. but the sale
in their favor could not be registered because the certificates of title x x x were lost.
They also allege that the applicable law is Section 109 of R.A. No. 496, as amended
by P.D. 1529, and not Sec. 13 of R.A. No. 26, and that fraud, in order to serve as
basis for the annulment of ajudgment must be extrinsic or collateral in character,
which is not the case in the action before the court a quo. They also fault (t)he
deliberate failure of Dy Quim Pong (petitioners board chairman) and his family,
Page 58 of 157
who constitute the majority of the stockholders and directors of (herein petitioner-
corporation), to disclose the whereabouts (of) there (sic) son, the President and
General Manager Francis Dytiongsee x x x who allegedly executed the deed of sale
of the lots and who allegedly claimed that the owners copies of the TCTs were lost.
In its Reply, petitioner contends that the very procedure provided under Sec.
109, P.D. 1529, which they (private respondents) insist is the applicable provision
of law in the matter, was not strictly followed x x x. It also argues that the owners
duplicate copies of the TCTs were all along in the custody of Dy Quim Pong, whom
private respondents should have sued to compel him to surrender the same in
order that the alleged deed of sale in favor of private respondent could be
registered.
Finally, petitioner claims that respondent Wilson Gaw had no authority to
institute the petition for reconstitution in the trial court because (t)he Court of
Appeals itself, in its questioned resolution stated that said board resolution
(authorizing Gaw) was passed without the required quorum.
From the foregoing, the issues may be summed up as follows:
(1) Which law governs the issuance of new owners duplicate certificates of title in
lieu of lost ones?
(2) Did the respondent trial court have jurisdiction to order the issuance of the
new owners duplicate certificates?
(3) Was the reconstitution of the said owners duplicate certificates of title
obtained through fraud?
The First Issue:

Law Governing Issuance of
Lost Owners Duplicate Titles
To resolve this issue, it is necessary to reexamine the following provisions
referred to by the parties:
(1) Section 13, Republic Act No. 26:8
Sec. 13. The court shall cause a notice of the petition, filed under the preceding
section, to be published, at the expense of the petitioner, twice in successive
issues of the Official Gazette, and to be posted on the main entrance of the
Page 59 of 157
provincial building and of the municipal building of the municipality or city in

which the land is situated, at least thirty days prior to the date of hearing. The
court shall likewise cause a copy of the notice to be sent, by registered mail or
otherwise, at the expense of the petitioner, to every person named therein whose
address is known, at least thirty days prior to the date of hearing. Said notice shall
state, among other things, the number of the lost or destroyed certificate of title,
if known, the name of the registered owner, the names of the occupants or
persons in. possession of the property, the owners of the adjoining properties and
all other interested parties, the location, area and boundaries of the property,
and the date on which all persons having any interest therein must appear and
file their claim or objections to the petition. The petitioner shall, at the hearing,
submit proof of the publication, posting and service of the notice as directed by
the court.
(2) Section 109, P.D. 1529 (amending R.A. 496):
Sec. 109. Notice and replacement of lost duplicate certificate. - In case of loss or
theft of an owners duplicate certificate of title, due notice under oath shall be
sent by the owner or by someone in his behalf to the Register of Deeds of the
province or city where the land lies as soon as the loss or theft is discovered. If a
duplicate certificate is lost or destroyed, or cannot be produced by a person
applying for the entry of a new certificate to him or for the registration of any
instrument, a sworn statement of the fact of such loss or destruction may be filed
by the registered owner or other person in interest and registered.
Upon the petition of the registered owner or other person in interest, the court
may, after notice and due hearing, direct the issuance of a new duplicate
certificate, which shall contain a memorandum of the fact that it is issued in place
of the lost duplicate certificate, but shall in all respects be entitled to like faith and
credit as the original duplicate, and shall thereafter be regarded as such for all
purposes of this decree.
A reading of both provisions clearly shows that Section 109 of P.D. 1529 is the
law applicable in petitions for issuance of new owners duplicate certificates of title
which are lost or stolen or destroyed. On the other hand, R.A. 26 applies only in
cases of reconstitution of lost or destroyed original certificates on file with the
Register of Deeds. This is expressly provided for under Section 110 of P.D. 1529 as
follows:
Page 60 of 157
Sec. 110. Reconstitution of lost or destroyed original of Torrens title. - Original

copies of certificates of title lost or destroyed in the offices of Registers of Deeds as
well as liens and encumbrances affecting the lands covered by such titles shall be
reconstituted judicially in accordance with the procedure prescribed in Republic
Act No. 26 insofar as not inconsistent with this Decree. The procedure relative to
administrative reconstitution of lost or destroyed certificate prescribed in said Act
may be availed of only in case of substantial loss or destruction of land titles due
to fire, flood or other force majeure as determined by the Administrator of the
Land Registration Authority: Provided, That the number of certificates of titles lost
or damaged should be at least ten percent (10%) of the total number in the
possession of the Office of the Register of Deeds: Provided, further, That in no
case shall the number of certificates of titles lost or damaged be less than five
hundred (500).
Notice of all hearings of the petition for judicial reconstitution shall be furnished
by the Register of Deeds of the place where the land is situated and to the
Administrator of the Land Registration Authority. No order or judgment ordering
the reconstitution of a certificate of title shall become final until the lapse of
fifteen (15) days from receipt by the Register of Deeds and by the Administrator
of the Land Registration Authority of a notice of such order or judgment without
any appeal having been filed by any such officials. (As amended by R.A. 6732;
italics supplied)
The Second Issue: Jurisdiction
In Demetriou vs. Court of Appeals, et al., 9 this Court ruled:
In Serra Serra v. Court Appeals (195 SCRA 482 [1991]), on facts analogous to those
involved in this case, this Court already held that if a certificate of title has not
been lost but is in fact in the possession of another person, the reconstituted title
is void and the court rendering the decision has not acquired jurisdiction.
Consequently the decision may be attacked any time.
In the instant case, the owners duplicate certificates of title were in the
possession of Dy Quim Pong, the petitioners chairman of the board and whose
family controls the petitioner-corporation. Since said certificates were not in fact
lost or destroyed, there was no necessity for the petition filed in the trial court for
Page 61 of 157
the Issuance of New Owners Duplicate Certificates of Title x x x. In fact, the said
court never acquired jurisdiction to order the issuance of new certificates. Hence,
the newly issued duplicates are themselves null and void.
It is obvious that this lapse happened because private respondents and
respondent judge failed to follow the procedure set forth in P.D. No. 1529 which,
as already stated, governs the issuance of new owners duplicate certificates of title.
Section 109 of said law provides, inter alia, that due notice under oath of the
loss or theft of the owners duplicate shall be sent by the owner or by someone in
his behalf to the Register of Deeds x x x (italics supplied). In this case, while an
affidavit of loss was attached to the petition in the lower court, no such notice was
sent to the Register of Deeds.
Private respondents tried to convince the Court that by their failure to locate
Francis Dytiongsee, they had no other recourse but to file a petition for
reconstitution. Sec. 107 of P.D. 1529, however, states that the remedy, in case of
the refusal or failure of the holder - in this case, the petitioner - to surrender the
owners duplicate certificate of title, is a petition in court to compel surrender of
the same to the Register of Deeds, and not a petition for reconstitution.
The Third Issue: Fraud
The respondent Court of Appeals, in its own words, confine(d) its discussion10 in
the assailed Decision only to the ground of fraud. It ruled that the RTCs decision
could be annulled only where extrinsic or collateral fraud is shown - that is, when
the fraudulent acts prevented a party from exhibiting fully his side of the case x x
x. Hence, petitioner could not claim extrinsic fraud inasmuch as it was duly
represented by Gaw in the reconstitution proceeding.
The appellate court explained that while there may not have been a quorum
during the board meeting of petitioner-corporation on May 10, 1984 when a
resolution authorizing Gaw to sue on its behalf was allegedly passed, this did not
mean however, that New Durawood Co., Inc. cannot be bound by Gaws action
because no howl of protest, complaint or denial came from (said corporation), and
that said corporation in fact had taken advantage of the benefits therefrom. Hence,
petitioner is estopped from questioning Gaws acts. The appellate Court was of the
belief that petitioner-corporation ratified Gaw s authority by acquiescence to his
Page 62 of 157
acts. The respondent Court thus concluded that petitioner-corporations claim of

being a victim of extrinsic fraud is baseless.
We are appalled by this rather novel interpretation of corporate law. It is clear
that, there having been no quorum present during the meeting in question, the
board of directors could not have validly given Gaw any express authority to file the
petition. Upon the other hand, the doctrine of apparent authority cannot apply as
to Gaw because, being a mere branch manager, he could not be looked upon as
a corporate officer clothed with the implied or apparent power to file suit for and
in behalf of a corporation.11 Neither will estoppel prevent the corporation from
questioning Gaws acts. Precisely, these acts were hidden from the company and its
top officers. How then can estoppel attach?12
Suffice it to say then, that by his surreptitious filing of the petition for
reconstitution without authority - express or implied - of his employer, Gaw
enabled respondent corporation to acquire the certificates of title in a manner
contrary to law.
In petitions for issuance of new owners duplicate copies of Torrens titles, it is
essential - as provided under Sec. 109 of P.D. 1529 as amended (supra) - that the
trial court take steps to assure itself that the petitioner is the registered owner or
other person in interest. Otherwise, new owners duplicate certificates might be
issued in favor of impostors who could fraudulently dispose, hypothecate or
otherwise deal in and with real estate in mockery of the Torrens system of titling
properties.
Be that as it may, in the case before us, whether Gaw was authorized to file the
suit or not is of little significance in finally resolving this case. Jurisdiction is and
remains the main issue. Since we already concluded earlier that the trial court did
not have jurisdiction, necessarily its judgment must fall.
WHEREFORE, the petition is GRANTED; the assailed decision SET ASIDE and
REVERSED; the proceedings in LRC Case No. 91-924 ANNULLED; and the order
issued therein dated April 15, 1991 as well as the reconstituted Transfer
Certificates of Title issued pursuant thereto, namely, TCT Nos. 200100, 200101 and
200102 in the name of private respondent declared NULL and VOID. Costs against
private respondents.
SO ORDERED.
Narvasa, C.J. (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur.
Page 63 of 157
G.R. No. 107751 June 1, 1995
LETICIA P. LIGON, petitioner,

vs.
COURT OF APPEALS, JUDGE CELIA LIPANA-REYES, Presiding Judge, Branch 81,
Regional Trial Court of Quezon City, Iglesia ni Kristo and the Register of Deeds of
Quezon City, respondent.
BELLOSILLO, J.:
This is a petition for review of the decision of the Court of Appeals which affirmed
the order of the Regional Trial Court of Quezon City, Br. 82, granting the motion
of respondent of Iglesia ni Kristo to direct petitioner to surrender the owner's
duplicate of the certificates of title in her possession.
On 19 October 1990 respondent Iglesia ni Kristo (INK) filed with the Regional Trial
Court of Quezon City a complaint 1 for specific performance with damages against
the Islamic Directorate of the Philippines (IDP) docketed as Civil Case No. Q90-
6937. Respondent INK alleged in its complaint that by virtue of an Absolute Deed
of Sale dated 20 April 1989 IDP sold to it two (2) parcels of land located at
Tandang Sora, Barrio Culiat, Quezon City, both of which IDP is the registered
owner. The parties stipulated in the deed of sale that the IDP shall undertake to
evict all squatters and illegal occupants in the property within forty-five (45) days
from the execution of the contract.
IDP failed to fulfill this obligation. Hence INK prayed that the trial court order IDP
to comply with its obligation of clearing the subject lots of illegal occupants and to
pay damages to INK.
IDP alleged in its answer that it was INK which violated the contract by delaying
the payment of the purchase price and prayed that the contract of sale be
rescinded and revoked.
On 15 June 1991 INK filed a motion for partial summary judgment on the ground
that there was actually no genuine issue as to any material fact.
Page 64 of 157
On 12 September 1991 the trial court rendered partial judgment, and on 7

October 1991 an amended partial judgment granting the reliefs prayed for by INK
except the prayer for damages which was to be resolved later.
On 22 January 1992 INK filed a motion in the same case praying that petitioner
Leticia Ligon, who was in possession of the certificates of title over the properties
as mortgagee of IDP, be directed to surrender the certificates to the Register of
Deeds of Quezon City for the registration of the Absolute Deed of Sale in its name.
INK alleged that the document could not be registered because of the refusal
and/or failure of petitioner to deliver the certificates of title despite repeated
requests.
On 31 January 1992 petitioner Ligon filed an opposition to the motion on the

ground that the IDP was not served copy of the motion, and the ownership of the
INK over the property was still in issue since rescission was sought by the IDP as a
counterclaim. She prayed that the motion be denied, but should it be granted, the
Register of Deeds be directed after registration to deliver the owner's duplicate
copies of the new certificates of title to her.
On 15 February 1992 petitioner filed a Supplemental Opposition questioning the

jurisdiction of the trial court because the motion involved the registrability of the
document of sale, and she was not made a party to the main case.
On 2 March 1992 the trial court granted the motion of INK and ordered petitioner
to surrender to INK the owner's copy of RT-26521 (170567) and RT-26520
(176616) in open court for the registration of the Absolute Deed of Sale in the
latter's name and the annotation of the mortgage executed in favor of petitioner
on the new transfer certificates of title to be issued to INK.2
On 6 April 1992, on motion of petitioner Ligon, the trial court reconsidered its
order by directing her to deliver the certificates of title to the Register of Deeds of
Quezon City. 3
Petitioner filed a petition for certiorari with the Court of Appeals seeking the
annulment of the two (2) orders. However, on 28 October 1992 the Court of
Appeals dismissed the petition and affirmed the orders of the trial court.
Petitioner now comes to us alleging that the trial court erred: (a) in ruling that it
had jurisdiction over petitioner; (b) in upholding the orders of the trial court even
Page 65 of 157
as they violated the rule prohibiting splitting of a single cause of action and
forum-shopping; (c) in holding that INK is the owner of the property and entitled
to registration of its ownership; and, (d) in holding that INK has a superior right to
the possession of the owner's copies of the certificates of title.
Upon prior leave, the IDP intervened alleging that prior to the issuance by the trial
court of the order of 2 March 1992, its legal Board of Trustees filed a motion for
intervention informing said court that the sale of the properties was not executed
by it but was made possible by a fake Board of Trustees, hence, the sale is void.
The trial court denied the motion since jurisdiction over the incident properly
belonged to the Securities and Exchange Commission (SEC). Conformably
therewith, IDP brought the matter before the SEC which later declared that the
sale of the properties was void. Thus, IDP banks on this favorable decision in
similarly seeking the nullification of the questioned orders of the trial court.
Under our land registration law, no voluntary instrument shall be registered by

the Register of Deeds unless the owner's duplicate certificate is presented
together with such instrument, except in some cases or upon order of the court
for cause shown. In case the person in possession of the duplicate certificates
refuses or fails to surrender the same to the Register of Deeds so that a voluntary
document may be registered and a new certificate issued, Sec. 107, Chapter 10, of
P.D. No. 1529 clearly states:
Sec. 107. Surrender of withheld duplicate certificates. — Where it is

necessary to issue a new certificate of title pursuant to any
involuntary instrument which divests the title of the registered
owner against his consent or where a voluntary instrument cannot
be registered by reason of the refusal or failure of the holder to
surrender the owner's duplicate certificate of title, the party in
interest may file a petition in court to compel surrender of the same
to the Register of Deeds. The court, after hearing, may order the
registered owner or any person withholding the duplicate certificate
to surrender the same and direct the entry of a new certificate or
memorandum upon such surrender. If the person withholding the
duplicate certificate is not amenable to the process of the court, or if
for any reason the outstanding owner's duplicate certificate cannot
be delivered, the court may order the annulment of the same as well
as the issuance of a new certificate of title in lieu thereof. Such new,
Page 66 of 157
certificate and all duplicates thereof shall contain a memorandum of

the annulment of the outstanding duplicate.
Before the enactment of P.D. No. 1529 otherwise known as the Property
Registration Decree, the former law, Act No. 496 otherwise known as the Land
Registration Act, and all jurisprudence interpreting the former law had
established that summary reliefs such as an action to compel the surrender of
owner's duplicate certificate of title to the Register of Deeds could only be filed
with and granted by the Regional Trial Court sitting as a land registration court if
there was unanimity among the parties or there was no adverse claim or serious
objection on the part of any party in interest, otherwise, if the case became
contentious and controversial it should be threshed out in an ordinary action or in
the case where the incident properly belonged.4
Under Sec. 2 of P.D. No. 1529, it is now provided that "Courts of First Instance
(now Regional Trial Courts) shall have exclusive jurisdiction over all applications
for original registration of titles to lands, including improvements and interest
therein and over all petitions filed after original registration of title, with power to
hear and determine all questions arising upon such applications or petitions." The
above provision has eliminated the distinction between the general jurisdiction
vested in the regional trial court and the limited jurisdiction conferred upon it by
the former law when acting merely as a cadastral court. Aimed at avoiding
multiplicity of suits the change has simplified registration proceedings by
conferring upon the regional trial courts the authority to act not only on
applications for original registration but also over all petitions filed after original
registration of title, with power to hear and determine all questions arising upon
such applications or petitions.5
The principal action filed by INK in Civil Case No. Q-90-6937 before the trial court
was for specific performance with damages based on a document of sale. Such
action was well within the exclusive jurisdictions of the Regional Trial
Court.6 When IDP, the defendant in the trial court, did not question the
genuineness and validity of said deed of sale and its obligations thereunder, the
summary judgment issued by the court granting the reliefs sought by INK was also
an exercise of its general jurisdiction.
Hence, when INK filed a motion for the issuance of an order from the same court
to compel the holder of the duplicate certificates of title to surrender the same to
Page 67 of 157
the Register of Deeds for the registration of the deed of sale subject of the
principal action, the motion was a necessary incident to the main case. When the
sale of the property was upheld by the court in its judgment and the defendant
was directed to comply with its terms and conditions, the right of INK to have the
same registered with the Register of Deeds could not be disregarded. To assert
and enjoy its right, INK should be allowed to seek the aid of the court to direct the
surrender of the certificates of title. Since Regional Trial Courts are courts of
general jurisdiction, they may therefore take cognizance of this case pursuant to
such jurisdiction. 7 Even while Sec. 107 of P.D. 1529 speaks of a petition which can
be filed by one who wants to compel another to surrender the certificates of title
to the Register of Deeds, this does not preclude a party to a pending case to
include as incident therein the relief stated under Sec. 107, especially if the
subject certificates of title to be surrendered are intimately connected with the
subject matter of the principal action.8 This principle is based on expediency and
in accordance with the policy against multiplicity of suits.
The records of the case show that the subsisting mortgage lien of petitioner
appears in the certificates of title Nos. 26520 and 26521. Hence, the order of the
trial court directing the surrender of the certificates to the Register of Deeds in
order that the deed of sale in favor of INK can be registered, cannot in any way
prejudice her rights and interests as a mortgagee of the lots. Any lien annotated
on the previous certificates of title which subsists should be incorporated in or
carried over to the new transfer certificates of title. This is true even in the case of
a real estate mortgage because pursuant to Art. 2126 of the Civil Code it directly
and immediately subjects the property upon which it is imposed, whoever the
possessor may be, to the fulfillment of the obligation for whose security it was
constituted. It is inseparable from the property mortgaged as it is a right in rem —
a lien on the property whoever its owner may be. It subsists notwithstanding a
change in ownership; in short, the personality of the owner is disregarded. Thus,
all subsequent purchasers must respect the mortgage whether the transfer to
them be with or without the consent of the mortgagee, for such mortgage until
discharged follows the property.9 It is clear therefore that the surrender by
petitioner of the certificates of title to the Register of Deeds as ordered by the
trial court will not create any substantial injustice to her. To grant the petition and
compel INK to file a new action in order to obtain the same reliefs it asked in the
motion before the trial court is to encourage litigations where no substantial
rights are prejudiced. This end should be avoided. Courts should not be so strict
about procedural lapses that do not really impair the proper administration of
Page 68 of 157
justice. The rules are intended to insure the orderly conduct of litigations because
of the higher objective they seek, which is, to protect the parties' substantive
rights. 10
WHEREFORE, the appealed decision of the Court of Appeals dated 28 October

1992 is AFFIRMED.
SO ORDERED.
G.R. No. 197923 June 22, 2015
RUBY RUTH S. SERRANO MAHILUM, Petitioner,

vs.
SPOUSES EDILBERTO ILANO and LOURDES ILANO, Respondents.
DECISION
DEL CASTILLO, J.:
Assailed in this Petition for Review on Certiorari1 are the following dispositions of
the Court of Appeals: 1) February 2, 2011 Decision2 in CA-G.R. SP No. 113782
which granted herein respondents' Petition for Certiorari and Prohibition and thus
nullified and set aside the January 5, 20103 and February 24, 20104 Orders of the
Regional Trial Court of Las Pinas City, Branch 255 in Civil Case No. LP-07-0109; and
2) July 28, 2011 Resolution5denying the herein petitioner's motion for
reconsideration.
Factual Antecedents
Petitioner Ruby Ruth S. Serrano Mahilum is the registered owner of a parcel of

land covered by Transfer Certificate of Title No. 855336 (TCT 85533) of the
Registry of Deeds of Las Pinas City.
In September 2003, she entrusted the original owner’s duplicate copy of TCT
85533 to Teresa Perez (Perez) – a purported real estate broker – who claimed
that she can assist petitioner in obtaining a loan, with TCT 85533 serving as
collateral. After several months, petitioner demanded the return of the title, but
Perez failed to produce the same; after much prodding, Perez admitted that the
title was lost. Thus, in June 2004, petitioner executed an Affidavit of Loss and
Page 69 of 157
caused the same to be annotated upon the origin al registry copy of TCT 85533 as
Entry No. 1668-247 on October 7, 2004.
In June 2006, petitioner received a letter from the Registry of Deeds of Las Piñas
City informing her that the owner’s duplicate copy of TCT 85533 was not lost, but
that it was presented to the registry by respondents, spouses Edilberto and
Lourdes Ilano, who claimed that the property covered by the title was sold to
them. In this connection, respondents – instead of registering the supposed sale
in their favor – executed an Affidavit of Non-Loss, which was entered on TCT
85533 on June 28, 2006 as Entry No.1875-27.8
Petitioner confronted respondents, w ho showed her a notarized

Agreement9 with right of repurchase dated December 4, 2003 and a notarized
and undated Deed of Absolute Sale,10 on which documents petitioner’s purported
signatures were affixed. These documents indicate that petitioner sold the
property covered by TCT 85533 to respondents for 250,000.00 with right to
repurchase the same within a period of 90 days. Petitioner told respondents that
she did not execute these documents, and that her purported signatures therein
were in fact falsified and forged. She demanded the return of TCT85533, but
respondents refused to surrender the title to her. They claimed that the property
was sold to them by Perez and "a companion."
All this time, title to the property remained in petitioner’s name, as respondents
have not registered the unnotarized and undated Deed of Absolute Sale.
Civil Case No. LP-07-0109
On June 20, 2007, petitioner and her husband Richard instituted against
respondents and Perez Civil Case No. LP-07-0109 with the Regional Trial Court of
Las Piñas City. Her Complaint11 for "annulment of agreement and deed of
absolute sale, specific performance, with damages," which contained the
foregoing statement of facts, likewise contained the following allegations and
prayer:
18. That by reason of the actuations of the defendants in facilitating the execution
of the aforesaid falsified documents, and adamant refusal to return to plaintiffs
the duplicate original owner’s copy of their title, which were all done with evident
bad faith, the plaintiffs suffered and continue to suffer sleepless nights, wounded
feelings, besmirched reputation, serious anxiety and other similar feelings, which,
Page 70 of 157
when quantified, can reasonably be compensated with the sum of Fifty Thousand
(50,000.00) Pesos, as moral damages;
PRAYER
WHEREFORE, it is most respectfully prayed of this Honorable Court, that after due
notice and hearing, judgment be rendered in favor of the plaintiffs and against
the defendants, as follows:
1. Ordering the annulment of the documents denominated as Agreement

(Deed of Sale with Right to Repurchase) , dated December 4, 2003, and
Deed of Absolute Sale and declaring the same as null and void;
2. Ordering defendants Ilano to surrender and return to plaintiffs the

duplicate original owner’s copy of TCT No. 85533;
3. Ordering the defendants, jointly and severally, to pay the plaintiffs the
sum of Fifty Thousand Pesos (50,000.00) as moral damages;
[4.] Ordering the defendants, jointly and severally, to pay the plaintiffs the
sum of Twenty Thousand Pesos (20,00 0.00) as attorney’s fees, and the
additional amount of Two Thousand Pesos (2,000.00) for every court
hearing; and
[5.] Ordering the defendants to pay the costs of this suit.
Other reliefs deemed just and equitable are also prayed for.12
Respondents’ Amended Answer with Compulsory Counterclaim13 alleged and

admitted, among others, that petitioner was the owner of the lot covered by TCT
85533; that said title was entrusted to Perez; that petitioner executed an affidavit
of loss which was annotated on TC T 85533; that they caused the annotation of an
affidavit of non-loss on TCT 85533, as Entry No. 1875-27; that petitioner
confronted them ; that they showed petitioner the Agreement and unnotarized
Deed of Absolute Sale; that they are in possession of the owner’s copy of TCT
85533; that sometime in October 2003, Perez – accompanied by one Corazon
Tingson (Tingson) "and a female person who introduced herself as Ruby Ruth
Serrano" – offered to sell to them the property covered by TCT 85533; that "in
support of the identity of the said Ruby Ruth Serrano, the original owner’s copies
Page 71 of 157
of the title (T CT No. T-85533), Declaration of Real Property, Tax Clearance,

Barangay Clearance, Community Tax Certificate with picture of Ruby Ruth Serrano
attached therein" were presented to respondent Edilberto Ilano (Edilberto); that
upon being satisfied as to the "identity of the person who introduced herself as
Ruby Ruth Serrano," Edilberto instructed his secretary to verify the authenticity of
the title with the Register of Deeds of Las Piñas City and conduct an ocular
inspection of the property; that "the person who introduced herself as Ruby Ruth
Serrano" obtained a cash advance of 50,000.00; that after verification confirmed
that the property is indeed owned by and registered in the name of Ruby Ruth
Serrano, Edilberto – "believing in good faith that the person [with] whom he is
dealing x x x is indeed the real Ruby Ruth Serrano" – entered into the sale
transaction; that on the same day, or October 30, 2004, petitioner received the
full consideration of 250,000.00 and signed the Agreement and Deed of Absolute
Sale; that petitioner’s affidavit of loss filed with the Registry of Deeds is false as
TCT 85533 was never lost but was entrusted to Perez who, together with Tingson
"and another person he rein named as ‘Jane Doe’ whose identity is yet to be
established who introduced herself as Ruby Ruth Serrano," came to respondents’
office to obtain a loan because petitioner was in dire need of money as she
admitted in her complaint; that TCT 85533 was negotiated and/or sold by
petitioner "or by her duly authorized person, otherwise no one can
present/deliver the original owner’s duplicate copy of the said title x x x and the
original copies of the documents x x x;" that "for failure of the registered owner,
Ruby Ruth Serrano, to exercise her right of repurchase within the agreed period,
ownership of the subject property now lawfully belongs to" respondents; that the
complaint failed to allege that respondents were purchasers in bad faith or at
least with notice of the defect in the title, which leads to the conclusion that the
complaint states no cause of action; and that respondents filed a perjury case
against petitioner with the Office of the City Prosecutor of Parañaque.
Respondents thus prayed for the dismissal of the complaint, and by way of
counterclaim, sought indemnity for moral damages in the amount of 300,000.00;
100,000.00 as nominal damages; 200,000.00 as exemplary damages; 100,000.00
for attorney’s fees; and costs of suit.
Pre-trial and presentation of petitioner’s evidence ensued. Thereafter, petitioner

rested her case.
Page 72 of 157
Respondents filed a Demurrer to Evidence,14arguing that the complaint failed to

state a cause of action in that petitioner failed to allege that respondents were
purchasers in bad faith or with notice of a defect in the title; that in the absence
of such an allegation, the presumption that respondents are purchasers in good
faith prevails. Petitioner filed a Comment/ Opposition,15 contending essentially
that her complaint contained an allegation that respondents were purchasers in
bad faith, which is found in paragraphs 13 to 15 of the complaint; and that the
issues raised in the demurrer may only be resolved after trial on the merits.
Ruling of the Regional Trial Court
In a January 5, 2010 Order,16 the trial court denied respondents’ demurrer. It held
that the question of whether respondents are purchasers in bad faith can only be
resolved after the parties present their respective evidence. Thus, it stated:
The Court, after taking into account a ll the foregoing, does not find merit in the
above demurrer. For one, the Court already held in its Order dated 11 April 2008
that "during the pre-trial held last 11 February 2008 one of the issues submitted
for resolution by the Court is whether or not [sic] defendants Sps. Ilano are buyers
in good faith and for value of the property subject hereof". This being so, the
same can only be resolved upon presentation of evidence by the parties herein
regarding their respective positions."Thus, the instant case cannot just be
dismissed simply because the defendants said so base on their own evaluation of
the evidence presented by the plaintiff.
If only to stress, as far as the Court is concerned the assertions of the defendants
are merely conclusions they arrived at on their own that [run] counter to the
position of the plaintiffs. As such, the defendants will have to present their own
evidence to substantiate their claims.
More importantly, the Court cannot just disregard the evidence and testimonies
of the witnesses presented by the plaintiffs. Further, in order to ferret out the
truth and determine the veracity of the assertions being made by the parties
herein, it is best that the "other side" be heard. It is only in allowing the
defendants to present their evidence that this can be achieved so that the herein
case against them can be resolved judiciously.
In the end, it is for the Court to evaluate the evidence to be presented by the
parties herein. The conclusions being forwarded by the parties will have to be
Page 73 of 157
reckoned with what have been presented and not on their respective self-serving
assertions.
Indeed, a demurrer to evidence is anchored on the claim that "upon the facts and
the law the plaintiff has shown no right to relief" (Sec. 1, Rule 33, Rules of Court).
With respect to the herein case, there is no clear showing that plaintiffs Sps.
Mahilum have no right to the reliefs being sought by them. On the contrary, and if
not opposed by contravening evidence by the defendants, their causes of action
may end up being supported by evidence that may merit rulings in their favor.
WHEREFORE, premises considered, the "Demurrer to Evidence" dated 11

November 2009 filed by defendants Sps. Edilberto and Lourdes Ilano is DENIED for
lack of merit.
SO ORDERED.17
Respondents filed a Motion for Reconsideration,18but the trial court denied the
same in a February 24, 2010 Order.19
Respondents went up to the Court of Appeals (CA) via an original Petition for
Certiorari.20 Docketed as CA-G.R. SP No. 113782, the petition essentially insisted
that since petitioner’s complaint failed to include an allegation that respondents
were purchasers in bad faith, then her complaint for annulment of sale failed to
state a cause of action, which entitles them to a dismissal on demurrer; and that
in denying their demurrer, the trial court disregarded existing jurisprudence to
the effect that where a complaint does not contain all the facts constituting the
plaintiff’s cause of action, it is subject to a motion to dismiss. In addition to
seeking the reversal of the trial court’s January 5, 2010 and February 24, 2010
Orders, respondents prayed for injunctive relief as well.
On July 15, 2010, the CA issued a Resolution21 denying respondents’ application

for a temporary restraining order.
Petitioner filed her Comment to the Petition.
On February 2, 2011, the CA issued the assailed Decision, which contained the
following decretal portion:
Page 74 of 157
WHEREFORE, the above premises considered, the instant petition is GRANTED.

The Orders of public respondent Regional Trial Court of Las Piñas City, Branch 255
dated 5 January 2010 and 24 February 2010, respectively, are NULLIFIED and SET
ASIDE. Private respondents’ complaint for Annulment of Agreement and Deed of
Absolute Sale, Specific Performance with Damages is DISMISSED for lack of cause
of action.
SO ORDERED.22
The CA held that –
A careful reading of private respondents’23 complaint before public respondent

would show that private respondents indeed failed to allege that
petitioners24 were in bad faith or at least aw are of the misrepresentation of the
vendor of the subject property at the time they purchased the same.
Thus, absent an allegation in the subject complaint that petitioners were in bad
faith or with notice of the vendor’s misrepresentation at the time of sale or prior
thereto, they are presumed to be innocent purchasers for value of the subject
property.
Under the law, a title procured through fraud and misrepresentation can still be
the source of a completely legal and valid title if the same is in the hands of an
innocent purchaser for value and in good faith. Again, how can public respondent
render a valid judgment when, based on the allegations in the complaint,
petitioners are presumed to have bought the subject lot in good faith? Stated
differently, private respondents have no cause of action against petitioners.
In their comment or opposition to petitioners’ demurrer to evidence, private

respondents argued that it is not accurate that they failed to allege bad faith
because paragraphs 13, 14, and 15 of their complaint indicated the evident bad
faith of petitioners. However, a review of said averments would only prove that
petitioners became aware of the alleged fraud or misrepresentation after the
execution of the assailed agreement and deed of sale when private respondents
confronted the former, and not before or during the execution of the same. The
Supreme Court held:
"A person is considered in law as an innocent purchaser for value when he buys
the property of another, without notice that some other person has a right or an
Page 75 of 157
interest in such property, and pays a 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. A person dealing with registered land may safely rely on the
correctness of the certificate of title of the vendor/transferor, and the law will in
no way oblige him to go behind the certificate to determine the condition of the
property."25
When the complaint alleges that private respondents did not sell the subject
property to petitioners but does not allege that the latter were purchasers in bad
faith or with notice of the defect in the title of their vendors, there is a failure to
state a cause of action.26 By reason of this failure, petitioners are presumed to be
innocent purchasers for value and in good faith, entitled to protection under the
law.
"In Spouses Chu, Sr. v. Benelda Estate Development Corporation, this Court
pronounced that it is crucial that a complaint for annulment of title must allege
that the purchaser was aware of the defect in the title, so that the cause of action
against him or her will be sufficient. Failure to do so, as in the case at bar, is fatal
for the reason that the court cannot render a valid judgment against the
purchaser who is presumed to be in good faith in acquiring said property."27
It was further held that a title issued to an innocent purchaser and for value
cannot be revoked on the basis that the deed of sale was falsified, if he or she had
no knowledge of the fraud committed.28 Here, there is clearly no imputation that
petitioners had knowledge of the fraud committed during the execution of the
assailed agreement and deed of sale. Furthermore, in the formal offer of the
testimony of private respondent Ruby Ruth, proving bad faith was not even
among the purposes for which her testimony was offered. Accordingly, the
testimony itself did not show bad faith on the part of petitioners.
It is significant to note that in the subject complaint, formal offer of evidence, and
oral testimony, only two things were established: (1) private respondents did not
sell the subject property to petitioners and (2) Teresa Perez breached the trust
given to her by private respondents. These facts cannot constitute a cause of
action or relief against petitioners because, absent an allegation of bad faith in
the complain t, they are presumed to be innocent purchasers for value during the
execution of the agreement and deed of sale.
Page 76 of 157
There is the established rule that if the defendant permits evidence to be

introduced, without objection, which supp lies the necessary allegations of a
defective complaint, this evidence has the effect of curing the defects of such
complaint, and a demurrer thereafter is inadmissible on the ground that the
complaint does not state fact s sufficient to constitute a cause of action. This rule,
however, cannot be applied in the instant case. Granting that petitioners did not
object to the presentation of evidence of private respondents, the latter still
failed to cure the defect in their complaint since no evidence of bad faith on the
part of petitioners was presented before the court. Proofs of bad faith were all
directed against Teresa Perez and her companion who introduced herself as Ruby
Ruth Serrano.
Although this Court relied on the transcript of stenographic notes quoted by

petitioners, as complete records of the case are still with public respondent,
private respondents did not question in their Comment on the petition, the
truthfulness of the statements quoted therein. Hence, private respondents are
deemed to have admitted the veracity of said transcript. Without an imputation
[or] a showing that petitioners were in bad faith or aware of the fraud
perpetrated by Teresa Perez and her companion, no action can be maintained
against them.
In view of the foregoing, public respondent RTC committed grave abuse of

discretion amounting to lack or excess of jurisdiction when it denied the
Demurrer to Evidence notwithstanding the complete absence of a cause of action
against petitioners. Public respondent RTC contravened and disregarded the
settled and prevailing jurisprudence on the matter.29
Petitioner filed her Motion for Reconsideration,30 which the CA denied in its
assailed July 28, 2011Resolution. Hence, the present Petition.
Issues
Petitioner raises the following issues:
ON QUESTION OF LAW, WHETHER x x x FAILURE TO ALLEGE BAD FAITH IN

THE COMPLAINT IS A FATAL DEFECT CONSIDERING THAT THE SUBJECT
DOCUMENTS (AGREEMENT/DEED OF ABSOLUTE SALE WITH RIGHT TO
Page 77 of 157
REPURCHASE, AND UNNOTARIZED DEED OF SALE) WERE MERELY

SIMULATED, FICTITIOUS AND FORGERY [sic], AND HENCE, NULL AND VOID
FROM THE BEGINNING.
II
ON QUESTION OF LAW, WHETHER x x x THE PETITIONER WAS DEPRIVED OF

HER PROPERTY WHEN THE COURT OF APPEALS GRANTED THE DEMURRER
TO EVIDENCE ON THE GROUND THAT THERE WAS NO CAUSE OF ACTION
WHEN ONE OF THE ISSUED[sic] AGREED UPON BY THE PARTIES DURING
THE PRE-TRIAL BEFORE THE RTC WAS WHETHER x x x PRIVATE
RESPONDENTS WERE PURCHASERS IN GOOD FAITH.
III
WHETHER x x x PETITIONER/S WERE PREVENTED FROM CONFRONTING THE

PRIVATE RESPONDENTS AND THEIR WITNESSES TO DETERMINE WHETHER x
x x THEY REALLY DEALT WITH PETITIONER AND TO DETERMINE WHO WAS
THE IMPOSTOR WHO SIGNED THE SUBJECT AGREEMENT AND DEED OF
ABSOLUTE SALE AND HENCE, ALLOW THE RTC COURT TO DETERMINE
WHETHER THE SUBJECT AGREEMENT AND DEED OF ABSOLUTE SALE WERE
SIMULATED, FICTITIOUS AND NULL AND VOID AND IF PRIVATE
RESPONDENTS WERE REALLY PURCHASERS FOR VALUE IN GOOD FAITH
THAT WILL AF FECT THE OUTCOME OF THE INSTANT CASE.31
Petitioner’s Arguments
In praying that the assailed CA dispositions be set aside and that in effect the
January 5, 2010 and February 24, 2010 Orders of the trial court denying
respondents’ demurrer to evidence be re instated, petitioner insists in her
Petition and Reply32 that during the pre-trial conference, one of the issues agreed
upon by the parties to be resolved was whether respondents were buyers in good
faith, which was reflected in the trial court’s January 5, 2010 Order;33that since
the issue of good or bad faith has been agreed upon by the parties as one of the
matters to be tackled during trial, then the failure to allege bad faith in the
complaint is deemed cured, and the defense is deemed waived by the
respondents with their assent given during pre-trial; and that the agreement and
deed of absolute sale, being forgeries, are null and void and without force and
effect.
Page 78 of 157
Petitioner adds that although a complaint which does not contain all the facts
constituting the plaintiff’s cause of action is subject to a motion to dismiss, the
defect is cured if the defendant permits the introduction of evidence which
supplies or remedies such defect;34 thus, respondents’ assent to the framing of
the issues during pre-trial and their failure to object to the presentation of
evidence on the issue of good or bad faith cu red her defective complaint.
Finally, petitioner contends that the grant of respondents’ demurrer amounts to a

deprivation of property without due process of law, as she was prevented from
defending her ownership over the same by duly confronting the respondents and
their witnesses and proving that the agreement and deed of absolute sale were
mere forgeries.
Respondents’ Arguments
Respondents, on the other hand, argue in their Comment35 that the CA was
correct in declaring that petitioner’s complaint in Civil Case No. LP-07-0109 failed
to state a cause of action owing to her failure to allege that the property in
question was purchased in bad faith. They add that petitioner failed to present
evidence during trial to the effect that they bought the subject property in bad
faith; that the scope of her evidence covered only her claim that she did not
execute the subject agreement and deed of absolute sale, and that these
documents are fictitious and forged – she did not present evidence to show that
they were buyers in bad faith. Thus, they maintain that for failing to allege and
prove bad faith on their part, the CA was correct in ordering the dismissal of Civil
Case No. LP-07-0109.
Our Ruling
The Court grants the Petition.
In granting demurrer, the CA failed to consider that title to the property remained
in petitioner’s name; TCT 85533 was never cancelled and no new title was issued
in respondents’ name. As a matter of fact, what they did when petitioner
annotated her affidavit of loss upon TCT 85533 was to cause the annotation of an
"affidavit of non-loss" afterward.
Since a new title was never issued in respondents’ favor and, instead, title
remained in petitioner’s name, the former never came within the coverage and
Page 79 of 157
protection of the Torrens system, where the issue of good or bad faith becomes
relevant. Since respondents never acquired a new certificate of title in their
name, the issue of their good or bad faith which is central in an annulment of title
case is of no consequence; petitioner’s case is for annulment of the Agreement
and Deed of Absolute Sale , and not one to annul title since the certificate of title
is still in her name. The jurisprudential bases for the CA’s pronouncement that
there is a failure to state a cause of action if the e is no allegation in the complaint
that respondents were purchasers in bad faith – Castillo v. Heirs of Vicente
Madrigal36and Heirs of Julian Tiro v. Philippine Estates Corporation37 – involved
complaints for annulment of new titles issued to the buyers ; they cannot apply to
petitioner’s case where title remains in her name.
Petitioner’s case is to annul the agreement and deed of sale based on the
allegation that they are forgeries, and that respondents were parties to the fraud;
since no new title was issued in respondents ’ favor, there is no new title to annul.
Indeed, if the agreement and deed of sale are forgeries, then they are a nullity
and convey no title.38 The underlying principle is that no one can give what one
does not have. Nemo dat quod non habet .
In Sps. Solivel v. Judge Francisco, we held that:
x x x in order that the holder of a certificate for value issued by virtue of the
registration of a voluntary instrument may be considered a holder in good faith
for value, the instrument registered should not be forged. When the instrument
presented is forged, even if accompanied by the owner’s duplicate certificate of
title, the registered owner does not thereby lose his title, and neither does the
assignee in the forged deed acquire any right or title to the property.
x x x The innocent purchaser for value protected by law is one who purchases a
titled land by virtue of a deed executed by the registered owner himself, not by a
forged deed, as the law expressly states. x x x
In Instrade, Inc. v. Court of Appeals, we reiterated the said ruling maintaining that
"[A]s early as Joaquin v. Madrid, x x x, we said that in order that the holder of a
certificate for value issued by virtue of the registration of a voluntary instrument
may be considered a holder in good faith and for value, the instrument registered
should not be forged." Indubitably, therefore, the questioned Deed of Absolute
Page 80 of 157
Sale did not convey any title to herein petitioners. Consequently, they cannot take
refuge in the protection accorded by the Torrens system on titled lands.
Thus, we hold that with the presentation of the forged deed, even if accompanied
by the owner’s duplicate certificate of title, the registered owner did not thereby
lose his title, and neither does the assignee in the forged deed acquire any right
or title to the said property. x x x39
In this case, it is petitioner who must be protected under the Torrens system – as
the registered owner of the subject property. "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."40
In Tenio-Obsequio v. Court of Appeals , we explained the purpose of the Torrens

system and its legal implications to third persons dealing with registered land, as
follows:
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 syst em 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
there for 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
Page 81 of 157
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 there under 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.41
A cursory examination of the record will show that petitioner’s action does not
appear to be groundless. There are circumstances which lead one to believe that
respondents are not exactly innocent of the charge. Their failure to register the
unnotarized and undated deed of absolute sale is at the very least unusual; it is
contrary to experience. It is uncharacteristic of a conscientious buyer of real
estate not to cause the immediate registration of his deed of sale as well as the
issuance of a new certificate of title in his name. Having supposedly paid a
considerable amount (250,000.00) for the property, respondents certainly would
have protected themselves by immediately registering the sale and obtaining a
new title in their name; but they did not. Even after petitioner caused the
annotation of her affidavit of loss, respondents did not register their supposed
sale, but merely annotated an "affidavit of non-lo ss." This, together with the fact
that the deed of absolute sale is undated and unnotarized, places their claim that
they are purchasers in good faith seriously in doubt. The ruling in Rufloe v.
Burgos42 comes to mind:
Page 82 of 157
We cannot ascribe good faith to those who have not shown any diligence in
protecting their rights, Respondents had know ledge of facts that should have led
them to inquire and investigate in order to acquaint themselves with possible
defects in the title of the seller of the property. However, they failed to do so.
Thus, Leonarda, as well as the Burgos siblings, cannot take cover under the
protection the law accords to purchasers in good faith and for value. They cannot
claim valid tit le to the property.
Moreover, the defense of indefeasibility of a Torrens title does not extend to a

transferee who takes it with notice of a flaw in the title of his
transferor.1âwphi1 To be effective, the inscription in the regist ry must have been
made in good faith. A holder in bad faith of a certificate of title is not entitled to
the protection of the law, for the law cannot be used as a shield for fraud.
We quote with approval the following findings of the trial court showing that the
sale between the Burgos siblings and Leonarda is simulated :
1. The sale was not registered, a circumstance which is inconceivable in a

legitimate transfer. A true vendee would not brook any delay in registering the
sale in his favor. Not only because registration is the operative act that effects
property covered by the Torrens System, but also because registration and
issuance of new title to the transferee, enable this transferee to assume
domiciliary and possessory rights over the property. These benefits of ownership
shall be denied him if the titles of the property shall remain in the name of
vendor. Therefore, it is inconceivable as contrary to behavioral pattern of a true
buyer and the empirical knowledge of man to assume that a buyer who invested
on the property he bought would be uninvolved and not endeavor to register the
property he bought. The nonchalance of Leonarda amply demonstrates the
pretended sale to her, and the evident scheme of her brother
Amado who invested on the property he bought.43
Most telling is respondents’ Amended Answer with Compulsory Counterclaim,

which tends to admit and indicate that when the December 4, 2003 Agreement
with right of repurchase and unnotarized and undated Deed of Absolute Sale
were executed, an individual – who falsely represented herself to be petitioner –
appeared and signed these documents. Thus, respondents alleged in their
amended answer that sometime in October 2003, Perez – accompanied by one
Page 83 of 157
Corazon Tingson (Tingson) " and a female person who introduced herself as Ruby
Ruth Serrano" – offered to sell to them the property covered by TCT 85533; that
"in support of the identity of the said Ruby Ruth Serrano, the original owner’s
copies of the title (TCT No. T-85533), Declaration of Real Property, Tax Clearance,
Barangay Clearance, Community Tax Certificate with picture of Ruby Ruth Serrano
attached therein" were presented to respondent Edilberto Ilano (Edilberto); that
upon being satisfied as to the "identity of the person who introduced herself as
Ruby Ruth Serrano," Edilberto instructed his secretary to verify the authenticity of
the title from the Register of Deeds of Las Piñas City and conduct an ocular
inspection of the property; that " the person who introduced herself as Ruby Ruth
Serrano " obtained a cash advance of 50,000.00; that after verification confirmed
that the property is indeed owned by and registered in the name of Ruby Ruth
Serrano, Edilberto – " believing in good faith that the person [with] whom he is
dealing x x x is indeed the real Ruby Ruth Serrano" – entered into the sale
transaction; that petitioner’s affidavit of loss filed with the Registry of Deeds is
false as TCT 85533 was never lost but was entrusted to Perez who, together with
Tingson "and another person herein named as ‘Jane Doe’ whose identity is yet to
be established who introduced herself as Ruby Ruth Serrano ," came to
respondents’ office to obtain a loan because petitioner was in dire need of money
as she admitted in her complaint.
Even at the level of the CA, respondents admitted, in their petition for certiorari,
that they bought the property not from petitioner, but from their "co-defendants
who had a defective title" – presumably Perez and the impostor. The pertinent
portion of their petition reads:
Bad faith cannot be presumed. It must be established by clear evidence. And it

appearing that the subject complaint is for recovery and possession of a parcel of
land, and that defendants bought it from their co-defendants who had a defective
title, but does not allege in the complaint that the purchasers were buyers in bad
faith or with notice of the defect in the title of their vendors x x x44
The above allegations in respondents’ pleadings are certainly revealing. They

already knew petitioner’s identity and how she looked, having me t her even
before the filing of the complaint – when petitioner confronted them and they
showed her the agreement and deed of sale. Thus, they should not have referred
to the supposed seller as " another person herein named as ‘Jane Doe’ whose
identity is yet to be established who introduced herself as Ruby Ruth Serrano" or
Page 84 of 157
"the person who introduced herself as Ruby Ruth Serrano" if indeed it was
petitioner herself who appeared and signed the agreement and deed of sale in
question. They should have categorically alleged that they bought the property
from petitioner herself if indeed this was so. Their ambiguous allegations
constitute a negative pregnant, which is in effect an admission.
Evidently, this particular denial had the earmark of what is called in the law on
pleadings as a negative pregnant, that is, a denial pregnant with the admission of
the substantial facts in the pleading responded to which are not squarely denied.
It was in effect an admission of the averments it was directed at. Stated
otherwise, a negative pregnant is a form of negative expression which carries with
it an affirmation or at least an implication of some kind favorable to the adverse
party. It is a denial pregnant with an admission of the substantial facts alleged in
the pleading. Where a fact is alleged with qualifying or modifying language and
the words of the allegation as so qualified or modified are literally denied, it has
been held that the qualifying circumstances alone are denied while the fact itself
is admitted.45
"If an allegation is not specifically denied or the denial is a negative pregnant, the
allegation is deemed admitted." "Where a fact is alleged with some qualifying or
modifying language, and the denial is conjunctive, a 'negative pregnant' exists,
and only the qualification or modification is denied, while the fact itself is
admitted." "A denial in the form of a negative pregnant is an ambiguous pleading,
since it cannot be ascertained whether it is the fact or only the qualification that is
intended to be denied." "Profession of ignorance about a fact which is patently
and necessarily within the pleader's knowledge, or means of knowing as
ineffectual, is no denial at all.'46
Finally, petitioner's complaint in Civil Case No. LP-07-0109 clearly states that in
the execution of the agreement and deed of absolute sale, respondents and Perez
acted in bad faith and connived in the forgery. Specifically, paragraph 18 of her
complaint states, as follows:
18. That by reason of the actuations of the defendants in facilitating the execution
of the aforesaid falsified documents, and adamant refusal to return to plaintiffs
the duplicate original owner's copy of their title, which were all done with evident
bad faith, the plaintiffs suffered and continue to suffer sleepless nights, wounded
feelings, besmirched reputation, serious anxiety and other similar feelings, which,
Page 85 of 157
when quantified, can reasonably be compensated with the sum of Fifty Thousand
(₱50,000.00) Pesos, as moral damages;47
Thus, the CA' s pronouncement - that nowhere in the complaint is it alleged that
respondents were purchasers in bad faith - is patently erroneous. The primary
ground for reversing the trial court's denial of respondents' demurrer is therefore
completely unfounded. Besides, the action itself, which is grounded on forgery,
necessarily presupposes the existence of bad faith.
With the foregoing pronouncement, the Court finds no need to tackle the other
issues raised by petitioner. They are rendered moot and irrelevant by the view
taken and manner in which the case was resolved.
WHEREFORE, the Petition is GRANTED. The assailed February 2, 2011 Decision

and July 28, 2011 Resolution of the Court of Appeals in CA-G.R. SP No. 113782 are
REVERSED and SET ASIDE. The case is remanded to the Regional Trial Court of Las
Pifias City, Branch 255 in Civil Case No. LP-07-0109 for proper disposition.
SO ORDERED.
MARIANO C. DEL CASTILLO

Associate Justice
WE CONCUR:
February 22, 2017
G.R. No. 206343
LAND BANK OF THE PHILIPPINES, Petitioner,

vs.
LORENZO MUSNI, EDUARDO SONZA and SPOUSES IRENEO AND NENITA
SANTOS, Respondents.
DECISION
LEONEN, J.:
Banks must show that they exercised the required due diligence before claiming
to be mortgagees in good faith or innocent purchasers for value.
Page 86 of 157
This is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of Court,
praying that the assailed Decision2dated February 29, 2012, and the
Resolution3 dated March 12, 2013 of the Court of Appeals in CA-GR. CV No. 92304
be nullified and set aside, and that judgment to the complaint against petitioner
be rendered dismissed.4Petitioner likewise prays that the deleted award be
reinstated should the assailed Decision and Resolution be affirmed.5
Respondent Lorenzo Musni (Musni) was the compulsory heir of Jovita Musni
(Jovita), who was the owner of a lot in Comillas, La Paz, Tarlac, under Transfer of
Certificate Title (TCT) No. 07043.6
Musni filed before the Regional Trial Court of Tarlac City a complaint for
reconveyance of land and cancellation of TCT No. 333352 against Spouses Nenita
Sonza Santos and Ireneo Santos (Spouses Santos), Eduardo Sonza (Eduardo), and
Land Bank of the Philippines (Land Bank). 7
Musni alleged that Nenita Sonza Santos (Nenita) falsified a Deed of Sale, and
caused the transfer of title of the lot in her and her brother Eduardo's names. He
claimed that the Spouses Santos and Eduardo mortgaged the lot to Land Bank as
security for their loan of ₱1,400,000.00.8
Musni said that he was dispossessed of the lot when Land Bank foreclosed the
property upon Nenita and Eduardo's failure to pay their loan. Later, the titles of
the lot and another foreclosed land were consolidated in TCT No. 333352, under
the name of Land Bank.9
Musni claimed that he filed a criminal case against Nenita and Eduardo for
falsification of a public document. 10 The case was filed before the Municipal Trial
Court of Tarlac, and was docketed as Criminal Case No. 4066-99 .11According to
him, the municipal trial court rendered a decision finding Nenita guilty of the
imputed crime.12
In their Answer, the Spouses Santos admitted having mortgaged the lot to Land
Bank.1âwphi1 They also admitted that the property was foreclosed because they
failed to pay their loan with the bank. Moreover, they confirmed that Nenita was
convicted in the falsification case filed by Musni.13
In defense, the Spouses Santos alleged that they, together with Eduardo, ran a
lending business under the name "Sonza and Santos Lending Investors." As
Page 87 of 157
security for the loan of ₱286,640.82, Musni and his wife executed a Deed of Sale
over the lot in favor of the Spouses Santos. The title of the lot was then
transferred to Nenita and Eduardo. The lot was then mortgaged to Land Bank,
and was foreclosed later. 14
Land Bank filed its Amended Answer with Counterclaim and Cross-claim. 15 It
asserted that the transfer of the title in its name was because of a decision
rendered by the Department of Agrarian Reform Adjudication Board, Region III. It
countered that its transaction with the Spouses Santos and Eduardo was
legitimate, and that it verified the authenticity of the title with the Register of
Deeds. Further, the bank loan was secured by another lot owned by the Spouses
Santos, and not solely by the lot being claimed by Musni. 16
Land Bank prayed that it be paid the value of the property and the expenses it
incurred, should the trial court order the reconveyance of the property to
Musni. 17
On June 27, 2008, the trial court rendered a Decision, 18 in favor of Musni. It relied
on the fact that Nenita was convicted of falsification of the Deed of Sale. The trial
court found that Musni did not agree to sell the property to the Spouses Santos
and Eduardo. In addition, the amount of Musni 's indebtedness was an insufficient
consideration for the market value of the property. Lastly, the sale was executed
before the loan's maturity. 19
The trial court also found that Land Bank was not an "innocent purchaser for
value[.]"20 The institution of the criminal case against Nenita should have alerted
the bank to ascertain the ownership of the lot before it foreclosed the same.21
The dispositive portion of the Decision reads:
WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of

the plaintiff Lorenzo Musni and against the defendant[s] Sps. Nenita Sonza and
Ireneo Santos and the Land Bank of the Philippines.
1. Ordering the land covered by TCT No. 333352 in the name of the Land Bank of
the Philippines be conveyed to plaintiff Lorenzo Musni by defendant Land Bank of
the Philippines
Page 88 of 157
2. Ordering the defendant Nenita Sonza-Santos and Eduardo Santos to pay to the
Land Bank of the Philippines Php.448,000.00 which in the amount of damages the
latter suffered by reason of the mortgage, foreclosure and consolidation of the
land in its name.
3. Ordering the defendant Spouses Nenita S. Sonza and Ireneo Santos and
defendant Land Bank of the Philippines to pay attorney's fees in the amount of
Php.30,000.00; and
4. Ordering the defendants to pay the cost of the suit.
SO ORDERED.22
Land Bank and Nenita separately moved for reconsideration, which were both
denied by the trial court in an Omnibus Order23 dated September 11, 2008.
Land Bank and Spouses Santos separately appealed to the Court of Appeals.24 In
its appeal,25 Land Bank reiterated that "it has demonstrated, by a preponderance
of evidence, that it is a mortgagee in good faith and a subsequent innocent
purchaser for value; as such, its rights as the new owner of the subject property
must be respected and protected by the courts."26
The Court of Appeals rendered a Decision27 on February 29, 2012. It found that
the sale of the lot between Musni, and the Spouses Santos and Eduardo, was null
and void since Nenita was convicted for falsifying the signatures of Jovita and
Musni in the Deed of Sale. Therefore, the Spouses Santos and Eduardo could not
have been the absolute owners, who could validly mortgage the property. 28
The Court of Appeals also held that Land Bank was neither a mortgagee in good
faith nor an innocent purchaser for value for failure to observe the due diligence
required of banks. 29
The Court of Appeals affirmed with modifications the Decision of the trial court:
WHEREFORE, in view of the foregoing, the assailed Decision rendered by the

Regional Trial Court of Tarlac City, Branch 65 is
hereby AFFIRMED with MODIFICATIONS:
Page 89 of 157
1. The Real Estate Mortgage Contract executed between Land Bank of the
Philippines and appellants Irineo and Nenita Santos is hereby
declared NULL and VOID.
2. The Extra-judicial Foreclosure Sale over the two parcels of land subject of the
mortgage is hereby declared NULL and VOID.
3. The Land Bank of the Philippines is hereby directed to reconvey TCT No. 333352
registered in its name to appellee Musni.
4. Appellee Musni is directed to pay appellants Santos the amount of

Php286,640.82 with 12% legal interest per annum from date of judicial demand
on March 15, 2002.
SO ORDERED.30 (Emphasis in the original)
Land Bank moved for reconsideration, which was denied by the Court of Appeals
in a Resolution dated March 12, 2013.31
On May 6, 2013, Land Bank filed a Petition for Review before this Court against
Musni, Eduardo, and the Spouses Santos.32 Petitioner reiterates that it observed
good faith in both the mortgage transaction, and the foreclosure sale. From the
time the property was mortgaged to it until the title was consolidated in its name,
no one filed an adverse claim or notice of lis pendens with the Registry of Deeds.
Petitioner argues that it has complied with all the requirements of foreclosure,
including the required publication and posting. 33
Petitioner asserts that upon examination of the titles offered by the Spouses
Santos as security for their loan, it found neither infirmity nor defect.34 It also
"verified [the Spouses Santos'] financial capability and credit worthiness."35 The
bank ascertained the ownership of the subject lot by conducting the following: 36
a) Verifications with the proper Registry of Deeds, the Municipal treasurer's

office, the police and proper courts concerned, as well interview (sic) with
adjoining property owners;
b) Confirmation that the Spouses Santos were up to date in paying realty taxes
and had no record of tax delinquencies;
Page 90 of 157
c) Verification that Spouses Santos have no pending criminal and civil cases;
d) Findings that LBP found no adverse information against the spouses Santos
from owners of neighboring properties;
e) Findings that there was no notice of adverse claim or lis pendens filed or
registered by Lorenzo Musni or by any person with the concerned Registry of
Deeds and have it annotated on TCT No. 304649;
f) Inspection of TCT No. 07403 (source of TCT No. 304649) indicates that the same
was cancelled and TCT No. 304649 was issued in the name of Nenita Santos and
Eduardo Santos (sic), by virtue of the Decision of the [Department of Agrarian
Reform] Adjudication Board, Region III, Diwa ng Tarlac, Tarlac[.]37
Moreover, petitioner contends that the mortgage was executed before the
institution of the criminal case against one of the mortgagors. 38 It insists that the
"filing of the [criminal] complaint could not operate as a notice to the whole
world."39 Since the bank "was not a party to the case[,] it could not have been
notified of the existence of the [criminal] complaint."40
Petitioner also assails the Court of Appeal's deletion of the ₱448,000.00 award in
its favor. This constitutes the amount suffered by the bank in its undertakings
with respondents Spouses Santos. According to petitioner, the alleged falsification
of the Deed of Sale should not affect the bank since it was not a party to the
transaction between respondent Musni, and respondents Spouses Santos and
Eduardo.41
Petitioner prays that the February 29, 2012 Decision and the March 12, 2013
Resolution of the Court of Appeals be set aside, and that the Complaint against it
be dismissed. If the Decision is sustained, petitioner prays that the award of
₱448,000.00 be reinstated.42
On April 17, 2015, respondents Spouses Santos and Eduardo filed their
Comment.43 They countered that the deletion of the award in favor of petitioner
was correct since the loss that petitioner allegedly suffered did not result to a
compensable injury. 44
On April 28, 2015, respondent Musni filed his Comment.45 He pointed out that
petitioner's argument that it transacted in good faith was a factual issue, which
Page 91 of 157
could no longer be raised in a Rule 45 petition.46 Further, both the trial court and
the Court of Appeals ruled against petitioner's allegation of good faith.47
On July 31, 2015, petitioner filed its Reply,48 reiterating its arguments in its
Petition.
In a Resolution49 dated November 11, 2015, this Court required the parties to
submit their respective memoranda.
Petitioner submitted its Memorandum50 on February 26, 2016. Respondents

Spouses Santos and Eduardo filed their Memorandum51 on February 23, 2016,
while respondent Musni filed his Memorandum52 on March 2, 2016. The parties
rehashed the arguments in their earlier pleadings.
This Court resolves the following issues:
1. Whether petitioner is a mortgagee in good faith and an innocent purchaser for

value; and
2. Whether petitioner is entitled to the award of damages.
Petitioner is neither a mortgagee in good faith nor an innocent purchaser for

value.
The determination of whether petitioner acted in good faith is a factual matter,

which cannot be raised before this Court in a Rule 45 petition.53 To emphasize,
"this Court is not a trier of facts and does not normally embark on a re-
examination of the evidence adduced by the parties during trial."54 Although this
rule admits of exceptions, 55 the present case does not fall under any of them.
Nevertheless, this Court recognized the relevance of the concept of a mortgagee,

and a purchaser in good faith in Andres, et al. v. Philippine National Bank:56
The doctrine protecting mortgagees and innocent purchasers in good faith

emanates from the social interest embedded in the legal concept granting
indefeasibility of titles. The burden of discovery of invalid transactions relating to
the property covered by a title appearing regular on its face is shifted from the
Page 92 of 157
third party relying on the title to the co-owners or the predecessors of the title
holder. Between the third party and the co-owners, it will be the latter that will
be more intimately knowledgeable about the status of the property and its
history. The costs of discovery of the basis of invalidity, thus, are better borne by
them because it would naturally be lower. A reverse presumption will only
increase costs for the economy, delay transactions, and, thus, achieve a less
optimal welfare level for the entire society. 57 (Citation omitted)
In Philippine Banking Corporation v. Dy, et al.,58 this Court explained this concept
in relation to banks:
Primarily, it bears noting that the doctrine of "mortgagee in good faith" is based
on the rule that all persons dealing with property covered by a Torrens Certificate
of Title are not required to go beyond what appears on the face of the title. This is
in deference to the public interest in upholding the indefeasibility of a certificate
of title as evidence of lawful ownership of the land or of any encumbrance
thereon. In the case of banks and other financial institutions, however, greater
care and due diligence are required since they are imbued with public interest,
failing which renders the mortgagees in bad faith. Thus, before approving a loan
application, it is a standard operating practice for these institutions to conduct an
ocular inspection of the property offered for mortgage and to verify the
genuineness of the title to determine the real owner(s) thereof. The apparent
purpose of an ocular inspection is to protect the "true owner" of the property as
well as innocent third parties with a right, interest or claim thereon from a
usurper who may have acquired a fraudulent certificate of title
thereto. 59 (Citations omitted)
Further, in Philippine National Bank v. Corpuz:60
As a rule, the Court would not expect a mortgagee to conduct an exhaustive

investigation of the history of the mortgagor's title before he extends a loan. But
petitioner . . . is not an ordinary mortgagee; it is a bank. Banks are expected to be
more cautious than ordinary individuals in dealing with lands, even registered
ones, since the business of banks is imbued with public interest. It is of judicial
notice that the standard practice for banks before approving a loan is to send a
staff to the property offered as collateral and verify the genuineness of the title to
determine the real owner or owners.61 (Citations omitted)
Page 93 of 157
On petitioner's claim that it was a mortgagee in good faith, the Court of Appeals
held that petitioner "was actually remiss in its duty to ascertain the title of
[respondents Eduardo and Nenita] to the property."62 The Court of Appeals'
Decision reads:
During trial, appellant [Land Bank] presented its Account Officer Randy Quijano
who testified that while it conducted a credit investigation and inspection of the
subject property as stated in its Credit Investigation Report dated March 17, 1998,
a perusal of the report and the testimony of the account officer failed to establish
that the bank's standard operating procedure in accepting the property as
security, including having investigators visit the subject property and appraise its
value were followed.
At the most, the report and the testimonial evidence presented were limited to
the credit investigation report conducted by Randy Quijano who, in turn relied on
the report made by its field officers. [Land Bank's] field officers who allegedly
visited the property and conducted interviews with the neighbors and verified the
status of the property with the courts and the police were not presented. At the
most, We find [Land Bank's] claim of exhaustive investigation was a just
generalization of the bank's operating procedure without any showing if the same
has been followed by its officers.
The Credit Investigation Report also does not corroborate the material allegations
of [Land Bank] that verifications were made with the Treasurer's Office and the
courts and the owners of the adjoining properties. For one, the report failed to
mention the names of the adjoining owners or neighbors whom the credit
investigation team were able to interview; second, the report did not mention the
status of the realty taxes covering the property although Land Bank is now
claiming that [Eduardo and Nenita] were up to date in paying the realty taxes. No
certification from the Treasurer's Office was presented to prove [Land Bank's]
claim that [Eduardo and Nenita] were the one[s] regularly paying the taxes on the
said property.
Moreover, what further militates against the claim of [Land
Bank's] good faith is the fact that TCT No. 304649 which was mortgaged to the
bank, was issued by virtue of a Decision of the [Department of Agrarian Reform
Adjudication Board] Region III dated December 29,
Page 94 of 157
1997. The said Decision was, however, inscribed only on February 25, 1998, after
the issuance of TCT No. 304649 on February 8, 1998. In addition, the property was
mortgaged to [Land Bank] a few days after the inscription of the alleged Decision
of the [Department of Agrarian Reform Adjudication Board]. This circumstance
should have aroused a suspicion on the part of [Land Bank] and anyone who
deliberately ignores a significant fact that would create suspicion in an otherwise
reasonable person cannot be considered as a mortgagee in good faith.
We quote the following disquisitions of the trial court on the Land Bank's
apparent bad faith in the transaction:
"[Land Bank] however tried to show that the title of the land owned by Jovita
Musni was cancelled by virtue of a decision of the [Department of Agrarian
Reform] Adjudication Board, Region III and in lieu thereofTCT No. 304649 was
issued in favor of Nenita Sonza et.al. The date of the decision in (sic) December
29, 1997 but inscribed only on February 25, 1998. If this were so, why is it that
Nenita Santos was issued TCT No. 304649 on February 8, 1998, before the
Decision was inscribed. Defendant Nenita Santos never mentioned any decision of
the [Department of Agrarian Reform Adjudication Board] awarding the lot to her."
....
The cited case of Philippine Veterans Bank vs. Monillas is not controlling to Land
Bank's case. In the said case, [Philippine Veterans Bank] has the right to rely on
what appears on the certificate of title because of the absence of any infirmity
that would cast cloud on the mortgagor's title. The situation is different in the
present case since the certificate of title (TCT No. 304649) apparently shows the
defect in the owner's title. As previously stated, the title of [Eduardo and Nenita]
to the subject property was dubious because the certificate of title was issued
before the inscription of the Decision of the [Department of Agrarian Reform
Adjudication Board]. Accordingly, Land Bank cannot be considered a mortgagee in
good faith. 63 (Citations omitted)
The Court of Appeals also found that petitioner was not an innocent purchaser for
value:
Neither can We also consider [Land Bank] as an innocent purchaser for value
because the subject property was foreclosed on May 4, 1999 while the complaint
for falsification was filed on March 4, 1999.
Page 95 of 157
A purchaser in good faith is one who buys property without notice that some
other person has a right to or interest in such property and pays its fair price
before he has notice of the adverse claims and interest of another person in the
same property. Clearly, the factual circumstances as afore-cited surrounding the
acquisition of the disputed property do not make [Land Bank] an innocent
purchaser for value or a purchaser in good faith. Thus, We are in accord with the
ruling of the trial court in that:
"In the instant case, the Court cannot consider the Land Bank of the Philippines as
innocent purchaser for value. With all its resources, it could have ascertained how
Nenita Sonza acquired the land mortgaged to it and later foreclosed by it. The fact
the land (sic) was foreclosed after Criminal Case No. 4066-99 was instituted
should have warned it. The questionable ownership of Nenita Sonza for it and its
employees to obtain knowledge of the questionable transfer of the land to Nenita
Sonza. Its failure to take the necessary steps or action shall make the bank liable
for damages. The bank shall be responsible for its and its employer
shortcomings."64 (Citations omitted)
Petitioner's defense that it could not have known the criminal action since it was
not a party to the case and that there was no notice of lis pendens filed by
respondent Musni, is unavailing. This Court held in Heirs of Gregorio Lopez v.
Development Bank of the Philippines:65
The rule on "innocent purchasers or [mortgagees] for value" is applied more

strictly when the purchaser or the mortgagee is a bank. Banks are expected to
exercise higher degree of diligence in their dealings, including those involving
lands. Banks may not rely simply on the face of the certificate of title. 66
Had petitioner exercised the degree of diligence required of banks, it would have
ascertained the ownership of one of the properties mortgaged to it.1âwphi1
Where "the findings of fact of the trial courts are affirmed by the Court of
Appeals, the same are accorded the highest degree of respect and, generally, will
not be disturbed on appeal[;] Such findings are binding and conclusive on this
Court."67 Accordingly, this Court finds no reason to disturb the findings of the
Court of Appeals, which affirmed the findings of the trial court, that petitioner is
neither a mortgagee in good faith nor an innocent purchaser for value.
II
Page 96 of 157
Petitioner is not entitled to the award of ₱448,000.00 as damages.
In its Decision, the trial court ordered respondents Nenita and Eduardo to pay
petitioner damages in the amount equivalent to the appraised value of the
property being claimed by respondent Musni.68 The Court of Appeals deleted the
award, and held that:
In so ruling, the trial court resorted to a partial nullification of the real estate
mortgage executed by [respondents Spouses Santos] and [Land Bank] because
while maintaining the validity of the mortgage over the parcel of land with an
area of 800 square meters, the trial court however, partially nullified the
mortgage pertaining to the parcel of land containing an area of 24,937 square
meters. 69
The Court of Appeals considered the grant of award as a partial extinguishment of

the real estate mortgage, which is not allowed. Since the mortgage is indivisible,
the Court of Appeals nullified the real estate mortgage involving the two
properties, and deleted the award. 70
Although the Court of Appeals' basis for deleting the award is erroneous, this
Court affirms the removal on a different ground.
The Court of Appeals misconstrued the award given by the trial court. When the
trial court awarded the amount of ₱448,000.00, it did so in representation of the
damages that petitioner suffered "by reason of the mortgage, foreclosure[,] and
consolidation of the land in its name."71 The award was meant to compensate
petitioner for the loss it suffered in transacting with respondents Spouses Santos
and Eduardo.
Nonetheless, this Court affirms the removal of the damages since petitioner did
not seek relief from the Court with clean hands. Petitioner may have incurred
losses when it entered into the mortgage transaction with respondents Spouses
Santos and Eduardo, and the corresponding foreclosure sale. However, the losses
could have been avoided if only petitioner exercised the required due diligence.
This Court notes that both lower courts erroneously reconveyed TCT No. 333352
to respondent Musni, despite finding that only one of the properties covered by
the title was in question. Thus, the consolidated title should be cancelled before
the reconveyance of the subject property.
Page 97 of 157
WHEREFORE, the petition is DENIED. The Court of Appeals' Decision dated

February 29, 2012, and the Resolution dated March 12, 2013 are AFFIRMED with
the following MODIFICATIONS:
1. TCT No. 333352 is hereby CANCELLED;
2. Eduardo Sonza and Nenita Sonza Santos are hereby ordered to reconvey
TCT No. 304649 to Lorenzo Musni; and
3. Lorenzo Musni is directed to pay Nenita Sonza Santos and Ireneo Santos
the amount of P286,640.82, with legal interest at the rate of 12% per
annum computed from the date of judicial demand on March 15, 2002 up
to June 30, 2013, and at 6% per annum from July 1, 2013 until full payment.
SO ORDERED.
MARVIC M.V.F. LEONEN

Associate Justice
WE CONCUR:
G.R. No. 194846 June 19, 2013
*HOSPICIO D. ROSAROSO, ANTONIO D. ROSAROSO, MANUEL D. ROSAROSO,

ALGERICA D. ROSAROSO, and CLEOFE R. LABINDAO, Petitioners,
vs.
LUCILA LABORTE SORIA, SPOUSES HAM SOLUTAN and **LAILA SOLUTAN, and
MERIDIAN REALTY CORPORATION, Respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court
assailing the December 4, 2009 Decision1 of the Court of Appeals (CA). in CA G.R.
CV No. 00351, which reversed and set aside the July 30, 2004 Decision2 of the
Regional Trial Court, Branch 8, 7th Judicial Region, Cebu City (RTC), in Civil Case
No. CEB-16957, an action for declaration of nullity of documents.
The Facts
Page 98 of 157
Spouses Luis Rosaroso (Luis) and Honorata Duazo (Honorata) acquired several real
properties in Daan Bantayan, Cebu City, including the subject properties. The
couple had nine (9) children namely: Hospicio, Arturo, Florita, Lucila, Eduardo,
Manuel, Cleofe, Antonio, and Angelica. On April 25, 1952, Honorata died. Later
on, Luis married Lourdes Pastor Rosaroso (Lourdes).
On January 16, 1995, a complaint for Declaration of Nullity of Documents with

Damages was filed by Luis, as one of the plaintiffs, against his daughter, Lucila R.
Soria (Lucila); Lucila’s daughter, Laila S. Solutan (Laila); and Meridian Realty
Corporation (Meridian). Due to Luis’ untimely death, however, an amended
complaint was filed on January 6, 1996, with the spouse of Laila, Ham Solutan
(Ham); and Luis’ second wife, Lourdes, included as defendants.3
In the Amended Complaint, it was alleged by petitioners Hospicio D. Rosaroso,

Antonio D. Rosaroso (Antonio), Angelica D. Rosaroso (Angelica), and Cleofe R.
Labindao (petitioners) that on November 4, 1991, Luis, with the full knowledge
and consent of his second wife, Lourdes, executed the Deed of Absolute
Sale4 (First Sale) covering the properties with Transfer Certificate of Title (TCT) No.
31852 (Lot No. 8); TCT. No. 11155 (Lot 19); TCT No. 10885 (Lot No. 22); TCT No.
10886 (Lot No. 23); and Lot Nos. 5665 and 7967, all located at Daanbantayan,
Cebu, in their favor.5
They also alleged that, despite the fact that the said properties had already been
sold to them, respondent Laila, in conspiracy with her mother, Lucila, obtained
the Special Power of Attorney (SPA),6 dated April 3, 1993, from Luis (First SPA);
that Luis was then sick, infirm, blind, and of unsound mind; that Lucila and Laila
accomplished this by affixing Luis’ thumb mark on the SPA which purportedly
authorized Laila to sell and convey, among others, Lot Nos. 8, 22 and 23, which
had already been sold to them; and that on the strength of another SPA7 by Luis,
dated July 21, 1993 (Second SPA), respondents Laila and Ham mortgaged Lot No.
19 to Vital Lending Investors, Inc. for and in consideration of the amount of
₱150,000.00 with the concurrence of Lourdes.8
Petitioners further averred that a second sale took place on August 23, 1994,
when the respondents made Luis sign the Deed of Absolute Sale9 conveying to
Meridian three (3) parcels of residential land for ₱960,500.00 (Second Sale); that
Meridian was in bad faith when it did not make any inquiry as to who were the
occupants and owners of said lots; and that if Meridian had only investigated, it
Page 99 of 157
would have been informed as to the true status of the subject properties and
would have desisted in pursuing their acquisition.
Petitioners, thus, prayed that they be awarded moral damages, exemplary

damages, attorney’s fees, actual damages, and litigation expenses and that the
two SPAs and the deed of sale in favor of Meridian be declared null and void ab
initio.10
On their part, respondents Lucila and Laila contested the First Sale in favor of
petitioners. They submitted that even assuming that it was valid, petitioners were
estopped from questioning the Second Sale in favor of Meridian because they
failed not only in effecting the necessary transfer of the title, but also in
annotating their interests on the titles of the questioned properties. With respect
to the assailed SPAs and the deed of absolute sale executed by Luis, they claimed
that the documents were valid because he was conscious and of sound mind and
body when he executed them. In fact, it was Luis together with his wife who
received the check payment issued by Meridian where a big part of it was used to
foot his hospital and medical expenses.11
Respondent Meridian, in its Answer with Compulsory Counterclaim, averred that

Luis was fully aware of the conveyances he made. In fact, Sophia Sanchez
(Sanchez), Vice-President of the corporation, personally witnessed Luis affix his
thumb mark on the deed of sale in its favor. As to petitioners’ contention that
Meridian acted in bad faith when it did not endeavor to make some inquiries as to
the status of the properties in question, it countered that before purchasing the
properties, it checked the titles of the said lots with the Register of Deeds of Cebu
and discovered therein that the First Sale purportedly executed in favor of the
plaintiffs was not registered with the said Register of Deeds. Finally, it argued that
the suit against it was filed in bad faith.12
On her part, Lourdes posited that her signature as well as that of Luis appearing
on the deed of sale in favor of petitioners, was obtained through fraud, deceit and
trickery. She explained that they signed the prepared deed out of pity because
petitioners told them that it was necessary for a loan application. In fact, there
was no consideration involved in the First Sale. With respect to the Second Sale,
she never encouraged the same and neither did she participate in it. It was purely
her husband’s own volition that the Second Sale materialized. She, however,
Page 100 of 157

affirmed that she received Meridian’s payment on behalf of her husband who was
then bedridden.13
RTC Ruling
After the case was submitted for decision, the RTC ruled in favor of petitioners. It
held that when Luis executed the second deed of sale in favor of Meridian, he was
no longer the owner of Lot Nos. 19, 22 and 23 as he had already sold them to his
children by his first marriage. In fact, the subject properties had already been
delivered to the vendees who had been living there since birth and so had been in
actual possession of the said properties. The trial court stated that although the
deed of sale was not registered, this fact was not prejudicial to their interest. It
was of the view that the actual registration of the deed of sale was not necessary
to render a contract valid and effective because where the vendor delivered the
possession of the parcel of land to the vendee and no superior rights of third
persons had intervened, the efficacy of said deed was not destroyed. In other
words, Luis lost his right to dispose of the said properties to Meridian from the
time he executed the first deed of sale in favor of petitioners. The same held true
with his alleged sale of Lot 8 to Lucila Soria.14 Specifically, the dispositive portion
of the RTC decision reads:
IN VIEW OF THE FOREGOING, the Court finds that a preponderance of evidence

exists in favor of the plaintiffs and against the defendants. Judgment is hereby
rendered:
a. Declaring that the Special Power of Attorney, Exhibit "K," for the plaintiffs
and Exhibit "3" for the defendants null and void including all transactions
subsequent thereto and all proceedings arising therefrom;
b. Declaring the Deed of Sale marked as Exhibit "E" valid and binding;
c. Declaring the Deed of Absolute Sale of Three (3) Parcels of Residential

Land marked as Exhibit "F" null and void from the beginning;
d. Declaring the Deed of Sale, Exhibit "16" (Solutan) or Exhibit "FF," null and
void from the beginning;
Page 101 of 157

e. Declaring the vendees named in the Deed of Sale marked as Exhibit "E"
to be the lawful, exclusive and absolute owners and possessors of Lots Nos.
8, 19, 22, and 23;
f. Ordering the defendants to pay jointly and severally each plaintiff

₱50,000.00 as moral damages; and
g. Ordering the defendants to pay plaintiffs ₱50,000.00 as attorney’s fees;

and ₱20,000.00 as litigation expenses.
The crossclaim made by defendant Meridian Realty Corporation against

defendants Soria and Solutan is ordered dismissed for lack of sufficient
evidentiary basis.
SO ORDERED."15
On appeal, the CA reversed and set aside the RTC decision. The CA ruled that the
first deed of sale in favor of petitioners was void because they failed to prove that
they indeed tendered a consideration for the four (4) parcels of land. It relied on
the testimony of Lourdes that petitioners did not pay her husband. The price or
consideration for the sale was simulated to make it appear that payment had
been tendered when in fact no payment was made at all.16
With respect to the validity of the Second Sale, the CA stated that it was valid
because the documents were notarized and, as such, they enjoyed the
presumption of regularity. Although petitioners alleged that Luis was manipulated
into signing the SPAs, the CA opined that evidence was wanting in this regard. Dr.
Arlene Letigio Pesquira, the attending physician of Luis, testified that while the
latter was physically infirmed, he was of sound mind when he executed the first
SPA.17
With regard to petitioners’ assertion that the First SPA was revoked by Luis when
he executed the affidavit, dated November 24, 1994, the CA ruled that the Second
Sale remained valid. The Second Sale was transacted on August 23, 1994, before
the First SPA was revoked. In other words, when the Second Sale was
consummated, the First SPA was still valid and subsisting. Thus, "Meridian had all
the reasons to rely on the said SPA during the time of its validity until the time of
Page 102 of 157

its actual filing with the Register of Deeds considering that constructive notice of
the revocation of the SPA only came into effect upon the filing of the Adverse
Claim and the aforementioned Letters addressed to the Register of Deeds on 17
December 1994 and 25 November 1994, respectively, informing the Register of
Deeds of the revocation of the first SPA."18 Moreover, the CA observed that the
affidavit revoking the first SPA was also revoked by Luis on December 12, 1994.19
Furthermore, although Luis revoked the First SPA, he did not revoke the Second
SPA which authorized respondent Laila to sell, convey and mortgage, among
others, the property covered by TCT T-11155 (Lot No. 19). The CA opined that had
it been the intention of Luis to discredit the
Second Sale, he should have revoked not only the First SPA but also the Second
SPA. The latter being valid, all transactions emanating from it, particularly the
mortgage of Lot 19, its subsequent redemption and its second sale, were
valid.20 Thus, the CA disposed in this wise:
WHEREFORE, the appeal is hereby GRANTED. The Decision dated 30 July 2004 is
hereby REVERSED AND SET ASIDE, and in its stead a new decision is hereby
rendered:
1. DECLARING the Special Power of Attorney, dated 21 July 1993, as valid;
2. DECLARING the Special Power of Attorney, dated 03 April 1993, as valid

up to the time of its revocation on 24 November 1994;
3. DECLARING the Deed of Absolute sale, dated 04 November 1991, as

ineffective and without any force and effect;
4. DECLARING the Deed of Absolute Sale of Three (3) Parcels of Residential

Land, dated 23 August 1994, valid and binding from the very beginning;
5. DECLARING the Deed of Absolute Sale, dated 27 September 1994, also

valid and binding from the very beginning;
6. ORDERING the substituted plaintiffs to pay jointly and severally the

defendant-appellant Meridian Realty Corporation the sum of
Php100,000.00 as moral damages, Php100,000.00 as attorney’s fee and
Php100,000.00 as litigation expenses; and
Page 103 of 157

7. ORDERING the substituted plaintiffs to pay jointly and severally the

defendant-appellants Leila Solutan et al., the sum of Php50,000.00 as moral
damages.
SO ORDERED.21
Petitioners filed a motion for reconsideration, but it was denied in the CA

Resolution,22 dated November 18, 2010. Consequently, they filed the present
petition with the following ASSIGNMENT OF ERRORS
I.
THE HONORABLE COURT OF APPEALS (19TH DIVISION) GRAVELY ERRED WHEN IT

DECLARED AS VOID THE FIRST SALE EXECUTED BY THE LATE LUIS ROSAROSO IN
FAVOR OF HIS CHILDREN OF HIS FIRST MARRIAGE.
II.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT SUSTAINING AND

AFFIRMING THE RULING OF THE TRIAL COURT DECLARING THE MERIDIAN REALTY
CORPORATION A BUYER IN BAD FAITH, DESPITE THE TRIAL COURT’S FINDINGS
THAT THE DEED OF SALE (First Sale), IS GENUINE AND HAD FULLY COMPLIED
WITH ALL THE LEGAL FORMALITIES.
III.
THE HONORABLE COURT OF APPEALS FURTHER ERRED IN NOT HOLDING THE SALE
(DATED 27 SEPTEMBER 1994), NULL AND VOID FROM THE VERY BEGINNING SINCE
LUIS ROSAROSO ON NOVEMBER 4, 1991 WAS NO LONGER THE OWNER OF LOTS
8, 19, 22 AND 23 AS HE HAD EARLIER DISPOSED SAID LOTS IN FAVOR OF THE
CHILDREN OF HIS (LUIS ROSAROSO) FIRST MARRIAGE.23
Petitioners argue that the second deed of sale was null and void because Luis
could not have validly transferred the ownership of the subject properties to
Meridian, he being no longer the owner after selling them to his children. No less
than Atty. William Boco, the lawyer who notarized the first deed of sale, appeared
and testified in court that the said deed was the one he notarized and that Luis
and his second wife, Lourdes, signed the same before him. He also identified the
Page 104 of 157

signatures of the subscribing witnesses.24 Thus, they invoke the finding of the RTC
which wrote:
In the case of Heirs of Joaquin Teves, Ricardo Teves versus Court of Appeals, et al.,
G.R. No. 109963, October 13, 1999, the Supreme Court held that a public
document executed [with] all the legal formalities is entitled to a presumption of
truth as to the recitals contained therein. In order to overthrow a certificate of a
notary public to the effect that a grantor executed a certain document and
acknowledged the fact of its execution before him, mere preponderance of
evidence will not suffice. Rather, the evidence must (be) so clear, strong and
convincing as to exclude all reasonable dispute as to the falsity of the certificate.
When the evidence is conflicting, the certificate will be upheld x x x .
A notarial document is by law entitled to full faith and credit upon its face.
(Ramirez vs. Ner, 21 SCRA 207). As such it … must be sustained in full force and
effect so long as he who impugns it shall not have presented strong, complete
and conclusive proof of its falsity or nullity on account of some flaw or defect
provided against by law (Robinson vs. Villafuerte, 18 Phil. 171, 189-190).25
Furthermore, petitioners aver that it was erroneous for the CA to say that the
records of the case were bereft of evidence that they paid the price of the lots
sold to them. In fact, a perusal of the records would reveal that during the cross-
examination of Antonio Rosaroso, when asked if there was a monetary
consideration, he testified that they indeed paid their father and their payment
helped him sustain his daily needs.26
Petitioners also assert that Meridian was a buyer in bad faith because when its
representative visited the site, she did not make the necessary inquiries. The fact
that there were already houses on the said lots should have put Meridian on its
guard and, for said reason, should have made inquiries as to who owned those
houses and what their rights were over the same.27
Meridian’s assertion that the Second Sale was registered in the Register of Deeds
was a falsity. The subject titles, namely: TCT No. 11155 for Lot 19, TCT No. 10885
for Lot 22, and TCT No. 10886 for Lot 23 were free from any annotation of the
alleged sale.28
After an assiduous assessment of the records, the Court finds for the petitioners.
Page 105 of 157

The First Deed Of Sale Was Valid
The fact that the first deed of sale was executed, conveying the subject properties
in favor of petitioners, was never contested by the respondents. What they
vehemently insist, though, is that the said sale was simulated because the
purported sale was made without a valid consideration.
Under Section 3, Rule 131 of the Rules of Court, the following are disputable
presumptions: (1) private transactions have been fair and regular; (2) the ordinary
course of business has been followed; and (3) there was sufficient consideration
for a contract.29 These presumptions operate against an adversary who has not
introduced proof to rebut them. They create the necessity of presenting evidence
to rebut the prima facie case they created, and which, if no proof to the contrary
is presented and offered, will prevail. The burden of proof remains where it is but,
by the presumption, the one who has that burden is relieved for the time being
from introducing evidence in support of the averment, because the presumption
stands in the place of evidence unless rebutted.30
In this case, the respondents failed to trounce the said presumption. Aside from
their bare allegation that the sale was made without a consideration, they failed
to supply clear and convincing evidence to back up this claim. It is elementary in
procedural law that bare allegations, unsubstantiated by evidence, are not
equivalent to proof under the Rules of Court.31
The CA decision ran counter to this established rule regarding disputable

presumption. It relied heavily on the account of Lourdes who testified that the
children of Luis approached him and convinced him to sign the deed of sale,
explaining that it was necessary for a loan application, but they did not pay the
purchase price for the subject properties.32 This testimony, however, is self-
serving and would not amount to a clear and convincing evidence required by law
to dispute the said presumption. As such, the presumption that there was
sufficient consideration will not be disturbed.
Granting that there was no delivery of the consideration, the seller would have no
right to sell again what he no longer owned. His remedy would be to rescind the
sale for failure on the part of the buyer to perform his part of their obligation
pursuant to Article 1191 of the New Civil Code. In the case of Clara M. Balatbat v.
Page 106 of 157

Court Of Appeals and Spouses Jose Repuyan and Aurora Repuyan,33 it was
written:
The failure of the buyer to make good the price does not, in law, cause the
ownership to revest to the seller unless the bilateral contract of sale is first
rescinded or resolved pursuant to Article 1191 of the New Civil Code. Non-
payment only creates a right to demand the fulfillment of the obligation or to
rescind the contract. [Emphases supplied]
Meridian is Not a
Buyer in Good Faith
Respondents Meridian and Lucila argue that, granting that the First Sale was valid,
the properties belong to them as they acquired these in good faith and had them
first recorded in the Registry of Property, as they were unaware of the First Sale.34
Again, the Court is not persuaded.
The fact that Meridian had them first registered will not help its cause. In case of
double sale, Article 1544 of the Civil Code provides:
ART. 1544. If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have first possession
thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person

acquiring it who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in
good faith was first in possession; and, in the absence thereof; to the person who
presents the oldest title, provided there is good faith.
Otherwise stated, ownership of an immovable property which is the subject of a

double sale shall be transferred: (1) to the person acquiring it who in good faith
first recorded it in the Registry of Property; (2) in default thereof, to the person
who in good faith was first in possession; and (3) in default thereof, to the person
who presents the oldest title, provided there is good faith. The requirement of the
law then is two-fold: acquisition in good faith and registration in good faith. Good
faith must concur with the registration. If it would be shown that a buyer was in
Page 107 of 157

bad faith, the alleged registration they have made amounted to no registration at
all.
The principle of primus tempore, potior jure (first in time, stronger in right) gains
greater significance in case of a double sale of immovable property. When the
thing sold twice is an immovable, the one who acquires it and first records it in
the Registry of Property, both made in good faith, shall be deemed the owner.
Verily, the act of registration must be coupled with good faith— that is, the
registrant must have no knowledge of the defect or lack of title of his vendor or
must not have been aware of facts which should have put him upon such inquiry
and investigation as might be necessary to acquaint him with the defects in the
title of his vendor.)35 [Emphases and underlining supplied]
When a piece of land is in the actual possession of persons other than the seller,
the buyer must be wary and should investigate the rights of those in possession.
Without making such inquiry, one cannot claim that he is a buyer in good faith.
When a man proposes to buy or deal with realty, his duty is to read the public
manuscript, that is, to look and see who is there upon it and what his rights are. A
want of caution and diligence, which an honest man of ordinary prudence is
accustomed to exercise in making purchases, is in contemplation of law, a want of
good faith. The buyer who has failed to know or discover that the land sold to him
is in adverse possession of another is a buyer in bad faith.36 In the case of Spouses
Sarmiento v. Court of Appeals,37 it was written:
Verily, 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 behind the certificate to determine the condition of the
property. Thus, the general rule is that a purchaser may be considered a
purchaser in good faith when he has examined the latest certificate of title. An
exception to this rule is when there exist important facts that would create
suspicion in an otherwise reasonable man to go beyond the present title and to
investigate those that preceded it. Thus, it has been said that a person who
deliberately ignores a significant fact which would create suspicion in an
otherwise reasonable man is not an innocent purchaser for value. A purchaser
cannot close his eyes to facts which should put a reasonable man upon his guard,
and then claim that he acted in good faith under the belief that there was no
defect in the title of the vendor. As we have held:
Page 108 of 157

The failure of appellees to take the ordinary precautions which a prudent man
would have taken under the circumstances, specially in buying a piece of land in
the actual, visible and public possession of another person, other than the
vendor, constitutes gross negligence amounting to bad faith.
In this connection, it has been held that where, as in this case, the land sold is in
the possession of a person other than the vendor, the purchaser is required to go
beyond the certificate of title to make inquiries concerning the rights of the actual
possessor. Failure to do so would make him a purchaser in bad faith. (Citations
omitted).
One who purchases real property which is in the actual possession of another
should, at least make some inquiry concerning the right of those in possession.
The actual possession by other than the vendor should, at least put the purchaser
upon inquiry. He can scarely, in the absence of such inquiry, be regarded as a
bona fide purchaser as against such possessors. (Emphases supplied)
Prescinding from the foregoing, the fact that private respondent RRC did not
investigate the Sarmiento spouses' claim over the subject land despite its
knowledge that Pedro Ogsiner, as their overseer, was in actual possession thereof
means that it was not an innocent purchaser for value upon said land. Article 524
of the Civil Code directs that possession may be exercised in one's name or in that
of another. In herein case, Pedro Ogsiner had informed RRC that he was
occupying the subject land on behalf of the Sarmiento spouses. Being a
corporation engaged in the business of buying and selling real estate, it was gross
negligence on its part to merely rely on Mr. Puzon's assurance that the occupants
of the property were mere squatters considering the invaluable information it
acquired from Pedro Ogsiner and considering further that it had the means and
the opportunity to investigate for itself the accuracy of such information.
[Emphases supplied]
In another case, it was held that if a vendee in a double sale registers the sale
after he has acquired knowledge of a previous sale, the registration constitutes a
registration in bad faith and does not confer upon him any right. If the
registration is done in bad faith, it is as if there is no registration at all, and the
buyer who has first taken possession of the property in good faith shall be
preferred.38
Page 109 of 157

In the case at bench, the fact that the subject properties were already in the
possession of persons other than Luis was never disputed. Sanchez,
representative and witness for Meridian, even testified as follows:
x x x; that she together with the two agents, defendant Laila Solutan and Corazon
Lua, the president of Meridian Realty Corporation, went immediately to site of
the lots; that the agents brought with them the three titles of the lots and Laila
Solutan brought with her a special power of attorney executed by Luis B.
Rosaroso in her favor but she went instead directly to Luis Rosaroso to be sure;
that the lots were pointed to them and she saw that there were houses on it but
she did not have any interest of the houses because her interest was on the lots;
that Luis Rosaroso said that the houses belonged to him; that he owns the
property and that he will sell the same because he is very sickly and he wanted to
buy medicines; that she requested someone to check the records of the lots in
the Register of Deeds; that one of the titles was mortgaged and she told them to
redeem the mortgage because the corporation will buy the property; that the
registered owner of the lots was Luis Rosaroso; that in more or less three months,
the encumbrance was cancelled and she told the prospective sellers to prepare
the deed of sale; that there were no encumbrances or liens in the title; that when
the deed of absolute sale was prepared it was signed by the vendor Luis Rosaroso
in their house in Opra x x x.39 (Underscoring supplied)
From the above testimony, it is clear that Meridian, through its agent, knew that
the subject properties were in possession of persons other than the seller. Instead
of investigating the rights and interests of the persons occupying the said lots,
however, it chose to just believe that Luis still owned them. Simply, Meridian
Realty failed to exercise the due diligence required by law of purchasers in
acquiring a piece of land in the possession of person or persons other than the
seller.
In this regard, great weight is accorded to the findings of fact of the RTC. Basic is
the rule that the trial court is in a better position to examine real evidence as well
as to observe the demeanor of witnesses who testify in the case.40
WHEREFORE, the petition is GRANTED. The December 4, 2009 Decision and the
November 18, 201 0 Resolution of the Court of Appeals, in CA-G.R. CV No. 00351,
are REVERSED and SET ASIDE. The July 30, 2004 Decision of the Regional Trial
Page 110 of 157

Court, Branch 8, 7th Judicial Region, Cebu City, in Civil Case No. CEB-16957, is
hereby REINSTATED.
SO ORDERED.
JOSE CATRAL MENDOZA

Associate Justice
WE CONCUR:
SPOUSES HENRY G. LIM and ROSARIO T. LIM, petitioners, vs. PEPITO M. VERA
CRUZ, respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
Lis pendens is a Latin term which literally means a pending suit. Notice of lis
pendens is filed for the purpose of warning all persons that the title to certain
property is in litigation and that if they purchase the same, they are in danger of
being bound by an adverse judgment.[1] The notice is, therefore, intended to be a
warning to the whole world that one who buys the property does so at his own
risk. This is necessary in order to save innocent third persons from any involvement
in any future litigation concerning the property.[2]
Petitioners filed the instant petition for review on certiorari under Rule 45 of
the 1997 Rules of Civil Procedure, assailing the Decision dated January 25, 2000 and
Resolution dated June 9, 2000 of the Court of Appeals[3] which set aside the order
of the trial court cancelling the notice of lis pendens.
The antecedent facts of this case as found by the Court of Appeals are:
A complaint for quieting of title, annulment and damages was filed by

petitioner[4] against private respondents[5] before the Regional Trial Court, Branch
84, Malolos, Bulacan, docketed as Civil Case No. 195-M-94, alleging that he has
been in possession since 1960 of a 200 square meter portion of Lot 4204 situated
in Barrio Tikay, Malolos, Bulacan covered by TCT No. 191498 of the Registry of
Deeds of Bulacan in the names of Turandut, Traviata, Marcelita, Pacita, Marlene,
Mathews, Victoria and Rosary, all surnamed Aldaba; that on January 11, 1983,
Rosary Aldaba sold to him said 200 square meter portion, which is included in the
Page 111 of 157

formers one-eight share in Lot 4204, consisting of 1,732 square meters; that a
complaint for ejectment was filed against him in 1993 by private respondent
Henry Lim, who claims to be the owner of the property occupied by him, being a
portion of the parcel of land covered by TCT No. T-16375 registered in his name;
that judgment was rendered against him in the ejectment case, which he elevated
to the appellate court, and that upon investigation, he discovered that TCT No. T-
16375 in the name of private respondents was obtained in bad faith, by fraud
and/or clever machination. On the other hand, private respondents maintained
that their title is valid and legal.
Petitioner caused the annotation of a notice of lis pendens at the back of TCT T-
16375.
A motion to cancel notice of lis pendens was filed by private respondents on the
grounds that said notice was designed solely to molest them/or it is not necessary
to protect petitioners rights. The same was opposed by petitioner insisting that
the notice of lis pendens was recorded in order to protect his right over the
property covered by TCT No. T-16375 and to avoid sale of property pending the
execution of the judgment in the case.
On July 22, 1998, respondent judge issued an order cancelling the notice of lis
pendens annotated at the back of TCT No. T-16375 upon the posting by private
respondents of an indemnity bond in the amount of P2,000,000.00. Petitioners
motion for reconsideration was denied in an order dated October 7, 1998.
The issue before this Court is whether or not the Court of Appeals erred in
holding that the trial court committed grave abuse of discretion in cancelling the
notice of lis pendens.
Petitioners contend that the cancellation of the notice of lis pendens by the
trial court is justified because respondent had it registered for the sole purpose of
molesting them and that it is not necessary to protect his rights. According to
petitioners, the trial court correctly ratiocinated as follows:
A very thin line exists and separates the protection afforded by the notice to the
plaintiff and the restriction it imposes on the right of the defendants dominion
over the property. Indubitably, the 200 square meter portion claimed by the
plaintiff is grossly disproportional to the entire 5,432 square meter property
which the notice virtually hold hostage. More so, the annotation proceeds from a
Page 112 of 157

still to be proven claim. Thus, based on the allegations in the pleadings, as

between a bare assertion of ownership over the claimed portion anchored on an
unregistered deed of sale as against the indefeasible title possessed by the
defendants over the entire subject property, the presumption under our rules
favor the latter, unless rebutted by evidence on the contrary. As it stands,
plaintiffs unregistered deed of sale, cannot, therefore, be accorded more weight
than the certificate of title in defendants name which is proof of ownership over
the entire 5,432 square meter property.
While afflictive consequences will be suffered by plaintiff if the notice is cancelled

in case he is adjudged the lawful owner of the claim 200 square meter property,
defendants will likewise suffer a grave injustice if denied the remedy of cancelling
the notice, resort to which is allowed by law and discretionary on the courts upon
proper showing. The injustice will take the form of an unlawful dispossession
though what is claimed only is 200 square meters, yet the entire 5,432 square
meter property is affected. Instead of serving its real purpose as laid by law
pursuant to public policy, the continued retention of the notice fosters inequity as
clearly established based on the claimed portion vis a vis the unclaimed of free
portion of the 5,432 square meter property. To the mind of the Court, this
inequity translates to an unwanted and unjustified burden that utterly molest the
tranquil possession and enjoyment by the defendants of the subject part.
Nevertheless, in the interest of substantial justice and equity, the Court deems it
wise under the prevailing circumstances to direct the defendants to post an
indemnity bond in an amount commensurate and reasonable proportionate to
the per square value of the claimed area of 200 square meter property. To the
mind of the Court, thru the posting of a bond, the claim of the plaintiff
(respondent herein) would still remain protected and safeguarded even though
the notice is eventually cancelled. Equity and fair play dictate the same be
resorted to by the Court relative to the peculiar circumstances of the case.
Petitioners contention lacks merit.

Sec. 14, Rule 13 of the 1997 Rules of Civil Procedure, as amended, provides:
Sec. 14 Notice of lis pendens In an action affecting the title or the right of
possession of real property, the plaintiff and the defendant, when affirmative
relief is claimed in his answer, may record in the office of the registry of deeds of
the province in which the property is situated a notice of the pendency of the
Page 113 of 157
action. Said notice shall contain the names of the parties and the object of the
action or defense, and a description of the property in that province affected
thereby. Only from the time of filing of such notice for record shall a purchaser, or
encumbrancer of the property affected thereby, be deemed to have constructive
notice of the pendency of the action, and only of its pendency against the parties
designated by their real names.
The notice of lis pendens hereinabove mentioned may be cancelled only upon
order of the court, after proper showing that the notice is for the purpose of
molesting the adverse party, or that it is not necessary to protect the rights of the
party who caused it to be recorded. (Emphasis ours)
Sec. 77 of Presidential Decree No. 1529 states:
Sec. 77. Cancellation of lis pendens Before final judgment, a notice of lis
pendens may be cancelled upon order of the court, after proper showing that the
notice is for the purpose of molesting the adverse party, or that it is not necessary
to protect the rights of the party who caused it to be registered. It may also be
cancelled by the Register of Deeds upon verified petition of the party who caused
registration thereof.
Petitioners claim that the notice of lis pendens practically covers his entire land
covered by TCT No. T-16375 and thus molests his right as an owner.
Lis pendens has been conceived to protect the real rights of the party causing
the registration thereof. With the lis pendens duly recorded, he could rest secure
that he would not lose the property or any part of it. For such notice serves as a
warning to a prospective purchaser or incumbrancer that the particular property is
in litigation; and that he should keep his hands off the same unless of course, he
intends to gamble on the results of the litigation.[6] Based on this principle as well
as the express provisions of Sec. 14, Rule 13 of the 1997 Rules of Civil Procedure,
as amended, only the particular property subject of litigation is covered by the
notice of lis pendens. In this case, only the 200 square meter portion of the entire
area is embraced by the notice of lis pendens. In causing the annotation of
such notice, respondents aim is to protect his right as an owner of this specific
area. Thus, the ruling of the trial court that the notice of lis pendens is tantamount
to an unlawful dispossession and restriction of petitioners right of dominion over
the entire 5,432 square meter lot covered by TCT 16375 in their names is,
therefore, an erroneous conclusion.
Page 114 of 157
Pursuant to Section 14, Rule 13 of the 1997 Rules of Civil Procedure, as

amended, earlier quoted, courts can cancel a notice of lis pendens only on two
grounds: a) after a proper showing that the notice is for the purpose of molesting
the adverse party; or b) it is not necessary to protect the interest of the party who
caused it to be recorded
In justifying the cancellation of the notice of lis pendens, the trial court held
that respondents unregistered deed of sale can not be accorded more weight than
petitioners certificate of title.
For purposes of annotating a notice of lis pendens, there is nothing in the rules
which requires the party seeking annotation to show that the land belongs to
him. In fact, there is no requirement that the party applying for the annotation of
the notice must prove his right or interest over the property sought to be
annotated.[7] Hence, even on the basis of an unregistered deed of sale, a notice
of lis pendensmay be annotated on the title. And such annotation can not be
considered as a collateral attack against the certificate of title. This is based on the
principle that the registration of a notice of lis pendens does not produce a legal
effect similar to a lien. It does not create a right or lien. It only means that a person
purchases or contracts on the property in dispute subject to the result of the
pending litigation.[8]
We observe that the trial judge was convinced that the cancellation of the lis
pendens is not in order. Otherwise, he should not have required petitioners to post
a bond of P2,000,000.00
The doctrine of lis pendens is founded upon reasons of public policy and
necessity, the purpose of which is to keep the properties in litigation within the
power of the court until the litigation is terminated, and to prevent the defeat of
the judgment or decree by subsequent alienation. This purpose would be rendered
meaningless if petitioners are allowed to file a bond, regardless of the amount, in
substitution of said notice. In Tan vs. Lantin[9], this Court held that the law does not
authorize a judge to cancel a notice of lis pendens pending litigation upon the mere
filing of sufficient bond by the party on whose title said notice is annotated.
Petitioners likewise insist that since respondent lost in the ejectment suit they
filed against him, it follows that he also lost whatever right he has in the 200 square
meter portion and that, therefore, he has no more right to be protected by the
notice of lis pendens. It bears emphasis that respondent caused the registration of
the notice of lis pendens in Civil Case No. 195-M-94 for quieting of title to his, 200
Page 115 of 157

square meter lot, not in the ejectment case. Consequently, the notice of lis
pendens annotated on TCT No. T-16375 must stay.
Indeed, there is nothing in the records indicating that the notice of lis
pendens is for the purpose of molesting herein petitioners or that it is not
necessary to protect the rights of respondent.
WHEREFORE, the petition is DENIED. The assailed Decision of the Court of
Appeals is AFFIRMED. Costs against petitioners.
SO ORDERED.
G.R. No. 148568 March 20, 2003
ATLANTIC ERECTORS, INC., petitioner,

vs.
HERBAL COVE REALTY CORPORATION, respondent.
PANGANIBAN, J.:
The pendency of a simple collection suit arising from the alleged nonpayment of
construction services, materials, unrealized income and damages does not justify
the annotation of a notice of lis pendens on the title to a property where
construction has been done.
Statement of the Case
Before the Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules
of Court, challenging the May 30, 2000 Decision2 of the Court of Appeals (CA) in
CA-GR SP No. 56432. The dispositive portion of the Decision is reproduced as
follows:
"WHEREFORE, the petition is granted and the assailed November 4, 1998

and October 22, 1999 orders annulled and set aside. The July 30, 1998
order of respondent judge is reinstated granting the cancellation of the
notices of lis pendens subject of this petition."3
In its July 21, 2001 Resolution,4 the CA denied petitioner's Motion for
Reconsideration.
The Facts
Page 116 of 157
The factual antecedents of the case are summarized by the CA in this wise:
"On June 20, 1996, [respondent] and [petitioner] entered into a

Construction Contract whereby the former agreed to construct four (4)
units of [townhouses] designated as 16-A, 16-B, 17-A and 17-B and one (1)
single detached unit for an original contract price of P15,726,745.19 which
was late[r] adjusted to P16,726,745.19 as a result of additional works. The
contract period is 180 days commencing [on] July 7, 1996 and to terminate
on January 7, 1997. [Petitioner] claimed that the said period was not
followed due to reasons attributable to [respondent], namely: suspension
orders, additional works, force majeure, and unjustifiable acts of omission
or delay on the part of said [respondent]. [Respondent], however, denied
such claim and instead pointed to [petitioner] as having exceeded the 180
day contract period aggravated by defective workmanship and utilization of
materials which are not in compliance with specifications.
xxx xxx xxx
"On November 21, 1997, [petitioner] filed a complaint for sum of money
with damages (Civil Case No. 97-2707) with the Regional Trial Court of
Makati entitled 'Atlantic Erectors, Incorporated vs. Herbal Cove Realty Corp.
and Ernest C. Escal[e]r'. This case was raffled to Branch 137, x x x Judge
Santiago J. Ranada presiding. In said initiatory pleading, [petitioner] AEI
asked for the following reliefs:
'AFTER DUE NOTICE AND HEARING, to order x x x defendant to:
1. Pay plaintiff the sum of P4,854,229.94 for the unpaid construction

services already rendered;
2. To x x x pay plaintiff the sum of P1,595,551.00 for the construction

materials, equipment and tools of plaintiff held by defendant;
3. To x x x pay plaintiff the sum of P2,250,000.00 for the [loss] x x x of

expected income from the construction project;
4. [T]o x x x pay plaintiff the sum of P800,000.00 for the cost of

income by way of rental from the equipment of plaintiff held by
defendants;
Page 117 of 157

5. To x x x pay plaintiff the sum of P5,000,000.00 for moral damages;
6. To x x x pay plaintiff the sum of P5,000,000.00 for exemplary

damages;
7. To x x x pay plaintiff the sum equivalent of 25% of the total money

claim plus P200,000.00 acceptance fee and P2,500.00 per court
appearance;
8. To x x x pay the cost of suit.'
"On the same day of November 21, 1997, [petitioner] filed a notice of lis
pendens for annotation of the pendency of Civil Case No. 97-707 on titles
TCTs nos. T-30228, 30229, 30230, 30231 and 30232. When the lots covered
by said titles were subsequently subdivided into 50 lots, the notices of lis
pendens were carried over to the titles of the subdivided lots, i.e., Transfer
Certificate of Title Nos. T-36179 to T-36226 and T-36245 to T-36246 of the
Register of Deeds of Tagaytay City.
"On January 30, 1998, [respondent] and x x x Ernest L. Escaler, filed a

Motion to Dismiss [petitioner's] Complaint for lack of jurisdiction and for
failure to state a cause of action. They claimed [that] the Makati RTC has no
jurisdiction over the subject matter of the case because the parties'
Construction Contract contained a clause requiring them to submit their
dispute to arbitration.
xxx xxx xxx
"On March 17, 1998, [RTC Judge Ranada] dismissed the Complaint as
against [respondent] for [petitioner's] failure to comply with a condition
precedent to the filing of a court action which is the prior resort to
arbitration and as against x x x Escaler for failure of the Complaint to state a
cause of action x x x.
"[Petitioner] filed a Motion for Reconsideration of the March 17, 1998

dismissal order. [Respondent] filed its Opposition thereto.
"On April 24, 1998, [respondent] filed a Motion to Cancel Notice of Lis
Pendens. It argued that the notices of lis pendens are without basis because
Page 118 of 157

[petitioner's] action is a purely personal action to collect a sum of money

and recover damages and x x x does not directly affect title to, use or
possession of real property.
"In his July 30, 1998 Order, [Judge Ranada] granted [respondent's] Motion
to Cancel Notice of Lis Pendens x x x:
"[Petitioner] filed a Motion for Reconsideration of the aforesaid July 30,

1998 Order to which [respondent] filed an Opposition.
"In a November 4, 1998 Order, [Judge Ranada,] while finding no merit in

the grounds raised by [petitioner] in its Motion for Reconsideration,
reversed his July 30, 1998 Order and reinstated the notices of lis pendens,
as follows:
'1. The Court finds no merit in plaintiff's contention that in dismissing

the above-entitled case for lack of jurisdiction, and at the same time
granting defendant Herbal Cove's motion to cancel notice of lis
pendens, the Court [took] an inconsistent posture. The Rules provide
that prior to the transmittal of the original record on appeal, the
court may issue orders for the protection and preservation of the
rights of the parties which do not involve any matter litigated by the
appeal (3rd par., Sec. 10, Rule 41). Even as it declared itself without
jurisdiction, this Court still has power to act on incidents in this case,
such as acting on motions for reconsideration, for correction, for
lifting of lis pendens, or approving appeals, etc.
'As correctly argued by defendant Herbal Cove, a notice of lis

pendens serves only as a precautionary measure or warning to
prospective buyers of a property that there is a pending litigation
involving the same.
'The Court notes that when it issued the Order of 30 July 1998 lifting
the notice of lis pendens, there was as yet no appeal filed by plaintiff.
Subsequently, on 10 September 1998, after a notice of appeal was
filed by plaintiff on 4 September 1998, the Branch Clerk of Court was
ordered by the Court to elevate the entire records of the above-
entitled case to the Court of Appeals. It therefore results that the
above-entitled case is still pending. After a careful consideration of
Page 119 of 157
all matters relevant to the lis pendens, the Court believes that justice
will be better served by setting aside the Order of 30 July 1998.'
"On November 27, 1998, [respondent] filed a Motion for Reconsideration

of the November 4, 1998 Order arguing that allowing the notice of lis
pendens to remain annotated on the titles would defeat, not serve, the
ends of justice and that equitable considerations cannot be resorted to
when there is an applicable provision of law.
xxx xxx xxx
"On October 22, 1999, [Judge Ranada] issued an order denying

[respondent's] Motion for Reconsideration of the November 4, 1998 Order
for lack of sufficient merit."5
Thereafter, Respondent Herbal Cove filed with the CA a Petition for Certiorari.
Setting aside the Orders of the RTC dated November 4, 1998 and October 22,
1999, the CA reinstated the former's July 30, 1998 Order6 granting Herbal Cove's
Motion to Cancel the Notice of Lis Pendens. According to the appellate court, the
re-annotation of those notices was improper for want of any legal basis. It
specifically cited Section 76 of Presidential Decree No. 1529 (the Property
Registration Decree). The decree provides that the registration of such notices is
allowed only when court proceedings directly affect the title to, or the use or the
occupation of, the land or any building thereon.
The CA opined that the Complaint filed by petitioner in Civil Case No. 97-2707 was
intended purely to collect a sum of money and to recover damages. The appellate
court ruled that the Complaint did not aver any ownership claim to the subject
land or any right of possession over the buildings constructed thereon. It further
declared that absent any claim on the title to the buildings or on the possession
thereof, the notices of lis pendens had no leg to stand on.
Likewise, the CA held that Judge Ranada should have maintained the notice
cancellations, which he had directed in his July 30, 1998 Order. Those notices
were no longer necessary to protect the rights of petitioner, inasmuch as it could
have procured protective relief from the Construction Industry Arbitral
Page 120 of 157

Commission (CIAC), where provisional remedies were available. The CA also

mentioned petitioner's admission that there was already a pending case before
the CIAC, which in fact rendered a decision on March 11, 1999.
The appellate court further explained that the re-annotation of the Notice of Lis
Pendens was no longer warranted after the court a quo had ruled that the latter
had no jurisdiction over the case. The former held that the rationale behind the
principle of lis pendens -- to keep the subject matter of the litigation within the
power of the court until the entry of final judgment -- was no longer applicable.
The reason for such inapplicability was that the Makati RTC already declared that
it had no jurisdiction or power over the subject matter of the case.
Finally, the CA opined that petitioner's Complaint had not alleged or claimed, as
basis for the continued annotation of the Notice of Lis Pendens, the lien of
contractors and laborers under Article 2242 of the New Civil Code. Moreover,
petitioner had not even referred to any lien of whatever nature. Verily, the CA
ruled that the failure to allege and claim the contractor's lien did not warrant the
continued annotation on the property titles of Respondent Herbal Cove.
Hence, this Petition.7
The Issues
Petitioner raises the following issues for our consideration:
"I. Whether or not money claims representing cost of materials [for] and
labor [on] the houses constructed on a property [are] a proper lien for
annotation of lis pendens on the property title[.]
"II. Whether or not the trial court[,] after having declared itself without
jurisdiction to try the case[,] may still decide on [the] substantial issue of
the case."8
This Court's Ruling
The Petition has no merit.
First Issue:
Page 121 of 157

Proper Basis for a Notice of Lis Pendens
Petitioner avers that its money claim on the cost of labor and materials for the
townhouses it constructed on the respondent's land is a proper lien that justifies
the annotation of a notice of lis pendens on the land titles. According to
petitioner, the money claim constitutes a lien that can be enforced to secure
payment for the said obligations. It argues that, to preserve the alleged
improvement it had made on the subject land, such annotation on the property
titles of respondent is necessary.
On the other hand, Respondent Herbal Cove argues that the annotation is bereft
of any factual or legal basis, because petitioner's Complaint9 does not directly
affect the title to the property, or the use or the possession thereof. It also claims
that petitioner's Complaint did not assert ownership of the property or any right
to possess it. Moreover, respondent attacks as baseless the annotation of the
Notice of Lis Pendens through the enforcement of a contractor's lien under Article
2242 of the Civil Code. It points out that the said provision applies only to cases in
which there are several creditors carrying on a legal action against an insolvent
debtor.
As a general rule, the only instances in which a notice of lis pendens may be
availed of are as follows: (a) an action to recover possession of real estate; (b) an
action for partition; and (c) any other court proceedings that directly affect the
title to the land or the building thereon or the use or the occupation
thereof.10 Additionally, this Court has held that resorting to lis pendens is not
necessarily confined to cases that involve title to or possession of real property.
This annotation also applies to suits seeking to establish a right to, or an equitable
estate or interest in, a specific real property; or to enforce a lien, a charge or an
encumbrance against it.11
Apparently, petitioner proceeds on the premise that its money claim involves the
enforcement of a lien. Since the money claim is for the nonpayment of materials
and labor used in the construction of townhouses, the lien referred to would have
to be that provided under Article 2242 of the Civil Code. This provision describes a
contractor's lien over an immovable property as follows:
Page 122 of 157

"Art. 2242. With reference to specific immovable property and real rights of
the debtor, the following claims, mortgages and liens shall be preferred,
and shall constitute an encumbrance on the immovable or real right:
xxx xxx xxx
"(3) Claims of laborers, masons, mechanics and other workmen, as well as

of architects, engineers and contractors, engaged in the construction,
reconstruction or repair of buildings, canals or other works, upon said
buildings, canals or other works;
"(4) Claims of furnishers of materials used in the construction,

reconstruction, or repair of buildings, canals or other works, upon said
buildings, canals or other works[.]" (Emphasis supplied)
However, a careful examination of petitioner's Complaint, as well as the reliefs it

seeks, reveals that no such lien or interest over the property was ever alleged.
The Complaint merely asked for the payment of construction services and
materials plus damages, without mentioning -- much less asserting -- a lien or an
encumbrance over the property. Verily, it was a purely personal action and a
simple collection case. It did not contain any material averment of any
enforceable right, interest or lien in connection with the subject property.
As it is, petitioner's money claim cannot be characterized as an action that

involves the enforcement of a lien or an encumbrance, one that would thus
warrant the annotation of the Notice of Lis Pendens. Indeed, the nature of an
action is determined by the allegations of the complaint.12
Even assuming that petitioner had sufficiently alleged such lien or encumbrance
in its Complaint, the annotation of the Notice of Lis Pendens would still be
unjustified, because a complaint for collection and damages is not the proper
mode for the enforcement of a contractor's lien.
In J.L. Bernardo Construction v. Court of Appeals,13 the Court explained the

concept of a contractor's lien under Article 2242 of the Civil Code and the proper
mode for its enforcement as follows:
"Articles 2241 and 2242 of the Civil Code enumerates certain credits which
enjoy preference with respect to specific personal or real property of the
Page 123 of 157

debtor. Specifically, the contractor's lien claimed by the petitioners is

granted under the third paragraph of Article 2242 which provides that the
claims of contractors engaged in the construction, reconstruction or repair
of buildings or other works shall be preferred with respect to the specific
building or other immovable property constructed.
"However, Article 2242 finds application when there is a concurrence of

credits, i.e., when the same specific property of the debtor is subjected to
the claims of several creditors and the value of such property of the debtor
is insufficient to pay in full all the creditors. In such a situation, the question
of preference will arise, that is, there will be a need to determine which of
the creditors will be paid ahead of the others. Fundamental tenets of due
process will dictate that this statutory lien should then only be enforced in
the context of some kind of a proceeding where the claims of all the
preferred creditors may be bindingly adjudicated, such as insolvency
proceedings."14 (Emphasis supplied)
Clearly then, neither Article 2242 of the Civil Code nor the enforcement of the lien
thereunder is applicable here, because petitioner's Complaint failed to satisfy the
foregoing requirements. Nowhere does it show that respondent's property was
subject to the claims of other creditors or was insufficient to pay for all concurring
debts. Moreover, the Complaint did not pertain to insolvency proceedings or to
any other action in which the adjudication of claims of preferred creditors could
be ascertained.
Another factor negates the argument of petitioner that its money claim involves
the enforcement of a lien or the assertion of title to or possession of the subject
property: the fact that it filed its action with the RTC of Makati, which is
undisputedly bereft of any jurisdiction over respondent's property in Tagaytay
City. Certainly, actions affecting title to or possession of real property or the
assertion of any interest therein should be commenced and tried in the proper
court that has jurisdiction over the area, where the real property involved or a
portion thereof is situated.15 If petitioner really intended to assert its claim or
enforce its supposed lien, interest or right over respondent's subject properties, it
would have instituted the proper proceedings or filed a real action with the RTC
of Tagaytay City, which clearly had jurisdiction over those properties.16
Page 124 of 157

Narciso Peña, a leading authority on the subject of land titles and registration,
gives an explicit exposition on the inapplicability of the doctrine of lis pendens to
certain actions and proceedings that specifically include money claims. He
explains in this wise:
"By express provision of law, the doctrine of lis pendens does not apply to
attachments, levies of execution, or to proceedings for the probate of wills,
or for administration of the estate of deceased persons in the Court of First
Instance. Also, it is held generally that the doctrine of lis pendens has no
application to a proceeding in which the only object sought is the recovery
of a money judgment, though the title or right of possession to property be
incidentally affected. It is essential that the property be directly affected, as
where the relief sought in the action or suit includes the recovery of
possession, or the enforcement of a lien, or an adjudication between
conflicting claims of title, possession, or the right of possession to specific
property, or requiring its transfer or sale"17 (Emphasis supplied)
Peña adds that even if a party initially avails itself of a notice of lis pendens upon
the filing of a case in court, such notice is rendered nugatory if the case turns out
to be a purely personal action. We quote him as follows:
"It may be possible also that the case when commenced may justify a
resort to lis pendens, but during the progress thereof, it develops to be
purely a personal action for damages or otherwise. In such event, the notice
of lis pendens has become functus officio."18 (Emphasis supplied)
Thus, when a complaint or an action is determined by the courts to be in

personam, the rationale for or purpose of the notice of lis pendens ceases to exist.
To be sure, this Court has expressly and categorically declared that the annotation
of a notice of lis pendens on titles to properties is not proper in cases wherein the
proceedings instituted are actions in personam.19
Second Issue:
Jurisdiction of the Trial Court
Petitioner argues that the RTC had no jurisdiction to issue the Order canceling the
Notice of Lis Pendens as well as the Order reinstating it. Supposedly, since both
Page 125 of 157

Orders were issued by the trial court without jurisdiction, the annotation made by
the Register of Deeds of Tagaytay City must remain in force.
Petitioner avers that the trial court finally declared that the latter had no
jurisdiction over the case on July 27, 1998, in an Order denying the former's
Motion for Reconsideration of the March 17, 1998 Order dismissing the
Complaint. Petitioner insists that the subsequent July 30, 1998 Order cancelling
the subject Notice of Lis Pendens is void, because it was issued by a court that had
no more jurisdiction over the case.
Rule 41 of the 1997 Rules on Civil Procedure, which governs appeals from regional
trial courts, expressly provides that RTCs lose jurisdiction over a case when an
appeal is filed. The rule reads thus:
"SEC. 9. Perfection of appeal; effect thereof. -- A party's appeal by notice of

appeal is deemed perfected as to him upon the filing of the notice of appeal
in due time.
xxx xxx xxx
"In appeals by notice of appeal, the court loses jurisdiction over the case
upon the perfection of the appeals filed in due time and the expiration of
the time to appeal of the other parties." (Emphasis supplied)
On the basis of the foregoing rule, the trial court lost jurisdiction over the case
only on August 31, 1998, when petitioner filed its Notice of Appeal.20 Thus, any
order issued by the RTC prior to that date should be considered valid, because the
court still had jurisdiction over the case. Accordingly, it still had the authority or
jurisdiction to issue the July 30, 1998 Order canceling the Notice of Lis Pendens.
On the other hand, the November 4, 1998 Order that set aside the July 30, 1998
Order and reinstated that Notice should be considered without force and effect,
because it was issued by the trial court after it had already lost jurisdiction.
In any case, even if we were to adopt petitioner's theory that both the July 30,
1998 and the November 4, 1998 Orders were void for having been issued without
jurisdiction, the annotation is still improper for lack of factual and legal bases.
As discussed previously, erroneously misplaced is the reliance of petitioner on the

premise that its money claim is an action for the enforcement of a contractor's
Page 126 of 157

lien. Verily, the annotation of the Notice of Lis Pendens on the subject property
titles should not have been made in the first place. The Complaint filed before the
Makati RTC -- for the collection of a sum of money and for damages -- did not
provide sufficient legal basis for such annotation.
Finally, petitioner vehemently insists that the trial court had no jurisdiction to
cancel the Notice. Yet, the former filed before the CA an appeal, docketed as CA-
GR CV No. 65647,21 questioning the RTC's dismissal of the Complaint for lack of
jurisdiction. Moreover, it must be remembered that it was petitioner which had
initially invoked the jurisdiction of the trial court when the former sought a
judgment for the recovery of money and damages against respondent. Yet again,
it was also petitioner which assailed that same jurisdiction for issuing an order
unfavorable to the former's cause. Indeed, parties cannot invoke the jurisdiction
of a court to secure affirmative relief, then repudiate or question that same
jurisdiction after obtaining or failing to obtain such relief.22
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED.
Costs against petitioner.
SO ORDERED.
G.R. No. L-60323 April 17, 1990
MAGDALENA HOMEOWNERS ASSOCIATION, INC., RICARDO CHUNG, JOSE

ESTRELLA, LEONCIO PALANCA, NORBERTO ROBLEZA, J.S. VALBUENA, GREGORIO
CANCIO FRANCISCO BUENCAMINO, and JESUS TOMACRUZ, petitioners,
vs.
COURT OF APPEALS, MAGDALENA ESTATE, INC., QUEZON CITY, DEVELOPMENT
BANK OF THE PHILIPPINES, and THE REGISTER OF DEEDS, QUEZON
CITY, respondents.
NARVASA, J.:
A Resolution of the Court of Appeals 1 ordering, on motion, the Register of Deeds

to cancel a notice of lis pendensannotated in several Torrens titles 2 is the subject
of the special civil action of certiorari at bar.
Page 127 of 157

The notice of lis pendens was recorded at the instance of the plaintiffs in Civil
Case No. Q-18223 of the Court of First Instance at Quezon City. 3 The case
involved a dispute regarding the ownership of certain lots within a subdivision
known as Magdalena Rolling Hills which the residents claimed had been reserved
as an "open space" and therefore could not in any manner be sold, disposed of or
encumbered.
The subdivision was owned by the Magdalena Estate, Inc. (hereafter simply MEI),
located at New Manila, Quezon City. It originally had a total area of 355,490
square meters. Among the subdivision lots was Lot 15, Block 18, which had an
area of 21,460 square meters. A part of this Lot 15, measuring 7,100 square
meters, had initially been set aside as the subdivision's "open space," i.e.,
reserved for use as a park, playground or recreational zone.
However, an amendment of the plan of the subdivision (amended subdivision

plan [LRC] Psd-18617) 4 — substituting the area earlier designated as open space
with an area of 7,100 square meters (being as aforesaid a portion of Lot 15, Block
18), with several other lots (Lots 21 to 27 of Block 20) having a combined area
also of 7,100 square meters — was approved by the City Council of Quezon City.
The Council also authorized the subdivision for disposition to the public of the
former open space. 5 Subsequently, the Court of First Instance of Quezon City also
approved the same amended subdivision plan [LRC] Psd-18167) in accordance
with Republic Act No. 44, subject to the condition "that all the roads, alleys,
drainage and open space, dedicated for public use, delineated therein, shall be
made subject to the limitations imposed by law." 6
MEI then had the original open space (a portion of Lot 15, Block 18) result
resurveyed and subdivided into several lots. The new plan, (LRC) Pcs-2299, was
approved in due course by the Land Registration Commission. 7
Some time afterwards, by virtue of a deed executed by MEI and accepted by the
City Mayor of Quezon City, MEI donated to the City Government certain lots in its
subdivision for use as parks and playgrounds; and the donation was ratified by the
Council.8
After the donation of the parks and playgrounds just mentioned, MEI disposed of
the entire Lot 15, Block 18 including that part thereof or originally designated as
open space (measuring 7,100 square meters). An area of' 15,778 square meters
Page 128 of 157

within this Lot 15, was subsequently conveyed to the Development Bank of the
Philippines (DBP) by way of dacion en pago on May 19, 1971. 9 The rest,
residential lots with an aggregate area of 5,688 square meters, were sold to third
parties who thereafter constructed houses thereon. 10
Now, the purchasers of the other subdivision lots, who had organized themselves
into a non-stock corporation known as the Magdalena Homeowners Association,
Inc., believed that the act of the Quezon City Government of authorizing the
release of said Lot 15 as open space, after it had been so declared and earlier
dedicated as such — and its substitution by another portion of the subdivision —
was beyond the City Government's authority. They therefore brought suit against
the Magdalena Estate, Inc. MEI in the Court of First Instance at Quezon City for
the recovery of said Lot 15 as "open space" for public use of the residents of the
subdivision. 11 The complaint, amended a few months later to implead the
Quezon City Government, 12 prayed for judgment (1) that MEI pay Quezon City
P2,575,200, representing the market value of Lot 15, Block 18, or that,
alternatively, (2) the transfer certificates covering Lots 1 to 10, Block 11 (12?),
(LRC) Psd-19167, with an aggregate area of 5,359 square meters i.e., Transfer
Certificates of Title Numbered 166683, 166754 to 166763, inclusive, of the
Registry of Deeds for Quezon City be cancelled and new ones issued in the name
of Quezon City for the use and employment, as parks and playgrounds, of the
residents of the subdivision. 13 Answers were in due course filed by the
defendants.
While the case was pending, notices of lis pendens were, at the plaintiffs'
instance, inscribed by the Register of Deeds of Quezon City on the Torrens is titles
of all the lots embraced within Block 12 (Numbered 166754 to 166763, inclusive,
as well as those titles numbered 258973, 258974, 266509, 266510, 267304 to
267309, inclusive). 14These were among the lots previously conveyed by MEI to
the Development Bank of the Philippines by way of dacion en pago, supra. 15
Judgment was rendered by the Trial Court after due proceedings, 16 the
dispositive portion of which is as follows:
WHEREFORE, considering that the plaintiffs have no cause of action against

defendant Quezon City government, the complaint against it is hereby
DISMISSED.
Page 129 of 157

HOWEVER, insofar as the action for recovery of open space is concerned,

judgment is hereby rendered authorizing the plaintiffs to recover the
subject space from MEI, thereafter to be donated to the Quezon City
government, to maintain and develop the same for the ultimate use of the
common weal.
Not satisfied with this judgment, the petitioners went up to the Court of Appeals
to seek its modification. 17
While the case was pending adjudgment, MEI and DBP filed separate motions
with the Court of Appeals praying for cancellation of the notice of lis
pendens annotated on the titles of the lots in Block 12 of the subdivision. 18 These
motions were granted by resolution dated December 10, 1981. Reconsideration
was sought and denied by Resolution dated February 8, 1982. Hence, the petition
at bar, for nullification of the resolutions of December 10, 1981 and February 8,
1982 on the theory that in promulgating them, the Court of Appeals had acted
with grave abuse of discretion if not indeed without or in excess of its jurisdiction.
The petitioners' first argument, that the Court of Appeals had no jurisdiction to
take cognizance of and grant the motion to cancel notice of lis pendens because
no such motion had ever been filed in the Court a quo, cannot be sustained.
According to Section 24, Rule 14 of the Rules of Court 19 and Section 76 of

Presidential Decree No. 1529, 20 a notice of lis pendens is proper in the following
cases, viz.:
a) An action to recover possession of real estate;
b) An action to quiet title thereto;
c) An action to remove clouds thereon;
d) An action for partition and
e) Any other proceedings of any kind in Court directly affecting the title to
the land or the use or occupation thereof or the buildings thereon.
The notice of lis pendens — i.e., that real property is involved in an action — is
ordinarily recorded without the intervention of the court where the action is
Page 130 of 157

pending. The notice is but an incident in an action, an extra judicial one, to be

sure. It does not affect the merits thereof. It is intended merely to constructively
advise, or warn, all people who deal with the property that they so deal with it at
their own risk, and whatever rights they may acquire in the property in any
voluntary transaction are subject to the results of the action, and may well be
inferior and subordinate to those which may be finally determined and laid down
therein. 21 The cancellation of such a precautionary notice is therefore also a mere
incident in the action, and may be ordered by the Court having jurisdiction of it at
any given time. And its continuance or removal — like the continuance or removal
of a preliminary attachment or injunction — is not contingent on the existence of
a final judgment in the action, and ordinarily has no effect on the merits thereof.
In the case at bar, the case had properly come within the appellate jurisdiction of
the Court of Appeals in virtue of the perfection of the plaintiffs' appeal.1âwphi1 It
therefore had power to deal with and resolve any incident in connection with the
action subject of the appeal, even before final judgment. The rule that no
questions may be raised for the first time on appeal have reference only to those
affecting the merits of the action, and not to mere incidents thereof, e.g.,
cancellation of notices of lis pendens, or, to repeat, the grant or dissolution of
provisional remedies.
Now, a notice of lis pendens may be cancelled upon order of the court, "after
proper showing that the notice is for the purpose of molesting the adverse party,
or that it is not necessary to protect the rights of the party who caused it to be
recorded." 22
The Court of Appeals found as a fact that the case had dragged on and had been
unnecessarily prolonged by repeated amendments of the complaints by the
plaintiffs, and that the circumstances on record justified the conclusion that the
annotation of the notice of lis pendens was intended to molest and harass the
defendants. 23
That determination, and the conclusion that Presidential Decree No. 1529
"authorizes the cancellation of notices oflis pendens before final judgment upon
order of the Court, upon the grounds previously mentioned," are not whimsical or
capricious, despotic, arbitrary or oppressive in the premises so as to call for
correction by the extraordinary remedy of certiorari.
Page 131 of 157

WHEREFORE, the petition is DISMISSED, with costs against the petitioners.
IT IS SO ORDERED.
Cruz, Gancayco, Griño-Aquino and Medialdea JJ., concur.
PERLAS-BERNABE, J.:
Before the Court is a petition for review on certiorari[1] assailing the
Decision[2] dated December 13, 2013 and the Resolution[3] dated June 27, 2014 of
the Court of Appeals (CA) in CA-G.R. CV No. 98819, which affirmed the
Order[4] dated June 27, 2011 and the Amended Order[5] dated December 29, 2011
of the Regional Trial Court of Biñan, Laguna, Branch 25 (RTC) in LRC Case No. B-
4122, directing the cancellation of Entry No. 626131, Entry No. 626132, Entry No.
626133, and Entry No. 626134 on Transfer Certificate of Title (TCT) No. CLO-763.
The Facts
Respondent Catalino M. Mangahis (respondent) is the registered owner of a

parcel of land in Barangay Malitlit, Sta. Rosa, Laguna, with an area of 28,889
square meters, and covered by TCT No. CLO-763 (subject property).[6] He
authorized a certain Venancio Zamora (Zamora) to sell the subject property, who,
in turn, delegated his authority to Victor Peña (Peña).[7]
On January 23, 2001, Peña entered into a Memorandum of Agreement[8] (MOA)

with Carmona Realty and Development Corporation (Carmona Realty),
represented by petitioner Alicia P. Logarta (petitioner), for the sale to Carmona
Realty of contiguous parcels of land in Malitlit, Sta. Rosa, Laguna (Malitlit Estate)
which included the subject property. The Malitlit Estate had a total area of
1,194,427 square meters and Carmona Realty agreed to deposit in escrow the
total consideration of P1,476,834,000.00 within thirty (30) days from the
execution of the MOA.[9] The release of the escrow deposits was subject to Peña's
submission of a number of documents, among others, the order of conversion
from the Department of Agrarian Reform (DAR) allowing the use of the Malitlit
Page 132 of 157

Estate for residential, industrial, commercial, or a combination of the foregoing

uses, the transfer of the TCTs and the Certificates of Land Ownership (CLOAs) in
Carmona Realty's name, and the release waiver and quitclaim executed by
complainants and/or order of dismissal of pending cases involving any of the
lands constituting the Malitlit Estate.[10] The parties also agreed to make the same
effective unless Carmona Realty withdraws from it by reason of force majeure or
fails to make the escrow deposits within the period specified therein, in which
case the MOA shall be considered automatically null and void.[11]
On March 28, 2003, the MOA was annotated[12] on TCT No. CLO-763, pursuant to
the Sworn Statement to Request for Annotation[13]executed by petitioner and the
Secretary's Certificate[14] issued by Marianito R. Atienza, Carmona Realty's
Corporate Secretary. Thus, Entry Nos. 626131-626134 (the subject entries) were
made on TCT No. CLO-763:
Entry No. 626131. Secretary's Certificate

No. 626132. Letter;
No. 626133. Sworn Statement to Request Annotation of Memorandum of
Agreement. Executed by Alicia P. Logarta on 26 March 2003, ratified before
Notary Public Anthony B. Escobar, as per Doc. No. 499, Page No. 100, Book No. 1,
Series of 2003.
No. 626134. Memorandum of Agreement. Executed by and between Victor Peña
and Carmona Realty and Development Corporation on 23 January 2001, ratified
before Notary Public Ma. Loreto U. Navarro, as per Doc. No. 68, Page No. 14,
Book No. XVIII, Series of 2001, filed in Env. No. CLO-213.
Date of instrument: March 26, 2003

Date of inscription : March 28, 2003 at 1:05 p.m.
On August 8, 2008, respondent filed a petition [15] to cancel the subject entries on
the ground that the MOA was a private document that had no legal effect
because the Notary Public before whom it was acknowledged was not
commissioned as such in the City of Manila for the year 2001. In the same
petition, respondent also sought the revocation of Zamora's authority to sell the
subject property.[16]
In opposition,[17] petitioner contended that the MOA was duly notarized in Makati
City where the Notary Public, Atty. Loreto Navarro, was commissioned.[18] She
Page 133 of 157

also maintained that Peña had the authority to enter into the MOA at the time it
was executed, considering that respondent expressed his intention to revoke the
same only in the petition.[19]
During the trial, respondent's brother and authorized[20] representative, Emiliano

M. Mangahis, asserted that the subject entries should be cancelled because the
purpose for which they were made is no longer present since petitioner did
nothing to enforce the MOA.[21] On the other hand, petitioner argued that she is
not the proper party to the case as she merely acted as representative of
Carmona Realty in the MOA.[22]
The RTC Ruling
In an Order[23] dated June 27, 2011, the RTC granted the petition and ordered the
cancellation of the subject entries. It found that the subject entries are adverse
claims which ceased to be effective 30 days after registration and should,
therefore, be cancelled, pursuant to Section 70 of Presidential Decree No. (PD)
1529,[24] otherwise known as the "Property Registration Decree," which states:
Section 70. Adverse claim. Whoever claims any part or interest in registered land
adverse to the registered owner, arising subsequent to the date of the original
registration, may, if no other provision is made in this Decree for registering the
same, make a statement in writing setting forth fully his alleged right or interest,
and how or under whom acquired, a reference to the number of the certificate of
title of the registered owner, the name of the registered owner, and a description
of the land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimant's
residence, and a place at which all notices may be served upon him. This
statement shall be entitled to registration as an adverse claim on the certificate of
title. The adverse claim shall be effective for a period of thirty days from the date
of registration. After the lapse of said period, the annotation of adverse claim
may be cancelled upon filing of a verified petition therefor by the party in
interest: Provided, however, that after cancellation, no second adverse claim
based on the same ground shall be registered by the same claimant.
Page 134 of 157

x x x x (Emphases supplied)
The RTC also remarked that the MOA no longer has any force and effect,
considering that Carmona Realty failed to make the escrow deposits stipulated
therein which rendered the same automatically null and void.[25] It further
explained that petitioner has other remedies which she can pursue if Peña failed
to comply with his obligations under the MOA. In any case, however, the adverse
claim cannot be inscribed on TCT No. CLO-763 forever.[26]
Dissatisfied, petitioner moved for reconsideration,[27] arguing that the subject

entries do not constitute an adverse claim but a voluntary dealing which is
governed by Section 54 of PD 1529.[28] She also contended that the RTC erred in
declaring that the MOA no longer had any force and effect, considering that there
was no such allegation in respondent's petition and no evidence to such effect
was presented during trial.[29]
In an Amended Order[30] dated December 29, 2011, the RTC denied petitioner's
motion for reconsideration and reiterated its directive to cancel the subject
entries. Aggrieved, petitioner appealed to the CA.[31]
The CA Ruling
In a Decision[32] dated December 13, 2013, the CA dismissed petitioner's appeal

and affirmed the RTC ruling. It agreed with the trial court that the subject entries
are akin to an annotation of adverse claim which is a measure designed to protect
the interest of a person over a piece of real property and governed by Section 70
of PD 1529.[33] The CA reiterated the RTC's observation that the MOA no longer
had any force and effect, absent any showing that Carmona Realty had made the
escrow deposits stipulated therein or that there was a mutual agreement
between the parties to extend its effectivity.[34]
Petitioner moved for reconsideration,[35] which was, however, denied by the CA in

its Resolution[36] dated June 27, 2014; hence, the present petition.
The Issue Before the Court
Page 135 of 157

The sole issue for the Court's resolution is whether or not the CA and the RTC
erred in ordering the cancellation of the subject entries.
The Court's Ruling
The Court finds the petition meritorious.
An adverse claim is a type of involuntary dealing[37] designed to protect the

interest of a person over a piece of real property by apprising third persons that
there is a controversy over the ownership of the land.[38] It seeks to preserve and
protect the right of the adverse claimant during the pendency of the
controversy,[39] where registration of such interest or right is not otherwise
provided for by the Property Registration Decree.[40] An adverse claim serves as a
notice to third persons that any transaction regarding the disputed land is subject
to the outcome of the dispute.[41] Section 70 of PD 1529 states:
Section 70. Adverse claim. Whoever claims any part or interest in registered land
registration, may, if no other provision is made in this Decree for registering the
and how or under whom acquired, a reference to the number of the certificate of
title of the registered owner, the name of the registered owner, and a description
of the land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimant's
of registration. After the lapse of said period, the annotation of adverse claim
may be cancelled upon filing of a verified petition therefor by the party in
Before the lapse of thirty days aforesaid, any party in interest may file a petition
in the Court of First Instance where the land is situated for the cancellation of the
Page 136 of 157

adverse claim, and the court shall grant a speedy hearing upon the question of
the validity of such adverse claim, and shall render judgment as may be just and
equitable. If the adverse claim is adjudged to be invalid, the registration thereof
shall be ordered cancelled. If, in any case, the court, after notice and hearing,
shall find that the 4 adverse claim thus registered was frivolous, it may fine the
claimant in an amount not less than one thousand pesos nor more than five
thousand pesos, in his discretion. Before the lapse of thirty days, the claimant
may withdraw his adverse claim by filing with the Register of Deeds a sworn
petition to that effect. (Emphases supplied)
Thus, before a notice of adverse claim is registered, it must be shown that there
is no other provision in law for the registration of the claimant's alleged right in
the property.[42] In Register of Deeds of Quezon City v. Nicandro,[43] the Court held
that where the basis of the adverse claim was a perfected contract of sale which
is specifically governed by Section 57 of the Land Registration Act, or Act No. 496,
the filing of an adverse claim was held ineffective for the purpose of protecting
the vendee's right.[44] Similarly, in L.P. Leviste & Company, Inc. v. Noblejas,[45] the
Court emphasized that if the basis of the adverse claim is a perfected contract of
sale, the proper procedure is to register the vendee's right as prescribed by
Sections 51[46] and 52[47] of PD 1529, and not under Section 70 which is ineffective
for the purpose of protecting the vendee's right since it does not have the effect
of a conveyance.[48]
In the case at hand, a cursory perusal of the MOA[49] shows that it is essentially a
conditional sale where Carmona Realty's payment is subject to the submission of
certain documents by Peña, respondent's authorized representative. Its relevant
provisions state:
WITNESSETH, That:
xxxx
WHEREAS, the FIRST PARTY represents, that subject to the payment of an agreed
compensation to the CLOA holders/ARB[s], the Land Bank, and the National
Irrigation Authority, FIRST PARTY is willing and able to have all titles, rights,
interests and claims, transferred, ceded, conveyed, assigned or waived in favor of
the SECOND PARTY who has accepted the offer to sell and has agreed to acquire
and purchase the property, subject to the terms and conditions set forth under
Page 137 of 157

this Agreement.
xxxx
III
ESCROW DEPOSIT OF PURCHASE PRICE
3.1 Within thirty (30) days from the execution of this Memorandum of
Agreement, the SECOND PARTY or its assignee or nominee shall deposit in escrow
with a bank or financial institution which is mutually acceptable to the Parties, the
total amount of x x x. Said amount shall be subject to release by the escrow
agent/bank and/or withdrawal in favor of the Parties specified in Section II above,
upon presentation of the documents specified herein below, and as set forth in
the Escrow instructions given by both parties to the Escrow agent/bank.
3.2. To the FIRST PARTY:
All releases of the amounts under escrow in favor of the FIRST PARTY of the full
amount of x x x, shall be subject to the submission by the FIRST PARTY of the
following documents:
1) Order of Conversion x x x
xxxx
IV
TRANSFER OF TITLE TO THE SECOND PARTY
4.1. The SECOND PARTY shall be entitled to have the subject CLOAs-TCTs
cancelled and in lieu of the same, new TCTs shall be issued in the name of the
SECOND PARTY or its assignee free from any liens or encumbrances as provided
herein,
xxxx
Page 138 of 157

VI
EFFECTIVITY OF THIS AGREEMENT
This Agreement shall take effect upon execution hereof and shall continue in
force unless the SECOND PARTY withdraws from this Agreement by reason of
force majeure or it fails to make the escrow deposits within the period as
specified herein, in which event, this Agreement shall be considered automatically
null and void, unless extended by mutual agreement of the parties.[50]
It is settled that in a deed of conditional sale, ownership is transferred after the
full payment of the installments of the purchase price or the fulfillment of the
condition and the execution of a definite or absolute deed of sale.[51] Verily, the
efficacy or obligatory force of the vendor's obligation to transfer title in a
conditional sale is subordinated to the happening of a future and uncertain event,
such that if the suspensive condition does not take place, the parties would stand
as if the conditional obligation had never existed.[52] Given the foregoing, the
MOA is essentially a dealing affecting less than the ownership of the subject
property that is governed by Section 54 of PD 1529, to wit:
Section 54. Dealings less than ownership, how registered. No new certificate shall
be entered or issued pursuant to any instrument which does not divest the
ownership or title from the owner or from the transferee of the registered
owners. All interests in registered land less than ownership shall be registered by
filing with the Register of Deeds the instrument which creates or transfers or
claims such interests and by a brief memorandum thereof made by the Register
of Deeds upon the certificate of title, and signed by him. A similar memorandum
shall also be made on the owner's duplicate. The cancellation or extinguishment
of such interests shall be registered in the same manner. (Emphasis supplied)
Moreover, being a conditional sale, the MOA is a voluntary instrument which, as a
rule, must be registered as such and not as an adverse claim. In Philippine Charity
Sweepstakes Office v. New Dagupan Metro Gas Corporation,[53] the Court
explained that:
Apart from the foregoing, the more important consideration was the improper
resort to an adverse claim. In L.P. Leviste & Co. v. Noblejas, this Court emphasized
that the availability of the special remedy of an adverse claim is subject to the
absence of any other statutory provision for the registration of the claimant's
Page 139 of 157

alleged right or interest in the property. That if the claimant's interest is based
on a perfected contract of sale or any voluntary instrument executed by the
registered owner of the land, the procedure that should be followed is that
prescribed under Section 51 in relation to Section 52 of P.D. No.
1529.Specifically, the owner's duplicate certificate must be presented to the
Register of Deeds for the inscription of the corresponding memorandum thereon
and in the entry day book. It is only when the owner refuses or fails to surrender
the duplicate certificate for annotation that a statement setting forth an
adverse claim may be filed with the Register of Deeds.Otherwise, the adverse
claim filed will not have the effect of a conveyance of any right or interest on the
disputed property that could prejudice the rights that have been subsequently
acquired by third persons.
What transpired in Gabin is similar to that in Leviste. In Gabin, the basis of the
claim on the property is a deed of absolute sale. In Leviste, what is involved is a
contract to sell. Both are voluntary instruments that should have been registered
in accordance with Sections 51 and 52 of P.D. No. 1529 as there was no showing
of an inability to present the owner's duplicate of title.
It is patent that the contrary appears in this case. Indeed, New Dagupan's claim
over the subject property is based on a conditional sale, which is likewise a
voluntary instrument. However, New Dagupan's use of the adverse claim to
protect its rights is far from being incongruent in view of the undisputed fact that
Peralta failed to surrender the owner's duplicate of TCT No. 52135 despite
demands.[54] (Emphases supplied; citations omitted.)
Thus, the prevailing rule is that voluntary instruments such as contracts of sale,
contracts to sell, and conditional sales are registered by presenting the owner's
duplicate copy of the title for annotation, pursuant to Sections 51 to 53 of PD
1529.[55] The reason for requiring the production of the owner's duplicate
certificate in the registration of a voluntary instrument is that, being a willful act
of the registered owner, it is to be presumed that he is interested in registering
the instrument and would willingly surrender, present or produce his duplicate
certificate of title to the Register of Deeds in order to accomplish such
registration.[56] The exception to this rule is when the registered owner refuses or
fails to surrender his duplicate copy of the title, in which case the claimant may
file with the Register of Deeds a statement setting forth his adverse claim.[57]
Page 140 of 157

In the case at hand, there was no showing that respondent refused or failed to
present the owner's duplicate of TCT No. CLO-763, which would have prompted
Carmona Realty to cause the annotation of the MOA as an adverse claim instead
of a voluntary dealing. On this score, therefore, the RTC and the CA erred in
ordering the cancellation of the subject entries on the strength of Section 70 of
PD 1529 which authorizes regional trial courts to cancel adverse claims after the
lapse of thirty (30) days from registration. Being a voluntary dealing affecting less
than the ownership of the subject property, Section 54 of PD 1529 - which states
that the cancellation of annotations involving interests less than ownership is
within the power of the Register of Deeds - should have been applied.
Accordingly, the RTC and the CA should have dismissed the petition for
cancellation of the subject entries for being the wrong remedy.
WHEREFORE, the petition is GRANTED. The Decision dated December 13, 2013
and the Resolution dated June 27, 2014 of the Court of Appeals in CA-G.R. CV No.
98819, which affirmed the Order dated June 27, 2011 and the Amended Order
dated December 29, 2011 of the Regional Trial Court of Biñan, Laguna, Branch 25
in LRC Case No. B-4122 are hereby SET ASIDE. The Petition to cancel Entry No.
626131, Entry No. 626132, Entry No. 626133, and Entry No. 626134 on Transfer
Certificate of Title No. CLO-763 filed by respondent Catalino M. Mangahis
is DISMISSED.
SO ORDERED.
Sereno, C. J., on official leave.

Leonardo-De Castro,** (Acting Chairperson), Bersamin, and Caguioa, JJ., concur.
[G. R. No. 102377. July 5, 1996]
ALFREDO SAJONAS and CONCHITA SAJONAS, petitioners, vs. THE COURT OF

APPEALS, DOMINGO A. PILARES, SHERIFF ROBERTO GARCIA OF QUEZON
CITY and REGISTER OF DEEDS OF MARIKINA, respondents.
DECISION
TORRES, JR., J.:
Page 141 of 157

A word or group of words conveys intentions. When used truncatedly, its

meaning disappears and breeds conflict. Thus, it is written - By thy words shalt thou
be justified, and by thy words shalt thou be condemned. (Matthew, 12:37)
Construing the new words of a statute separately is the raison detre of this
appeal.
Essentially, the case before us is for cancellation of the inscription of a Notice
of Levy on Execution from a certificate of Title covering a parcel of real
property. The inscription was caused to be made by the private respondent on
Transfer Certificate of Title No. N-79073 of the Register of Deeds of Marikina, issued
in the name of the spouses Ernesto B. Uychocde and Lucita Jarin, and was later
carried over to and annotated on Transfer Certificate of Title No. N-109417 of the
same registry, issued in the name of the spouses Alfredo Sajonas and Conchita R.
Sajonas, who purchased the parcel of land from the Uychocdes, and are now the
petitioners in this case.
The facts are not disputed, and are hereby reproduced as follows:
On September 22, 1983, the spouses Ernesto Uychocde and Lucita Jarin agreed to
sell a parcel of residential land located in Antipolo, Rizal to the spouses Alfredo
Sajonas and Conchita R. Sajonas on installment basis as evidenced by a Contract
to Sell dated September 22, 1983. The property was registered in the names of
the Uychocde spouses under TCT No. N-79073 of the Register of Deeds of
Marikina, Rizal. On August 27, 1984, the Sajonas couple caused the annotation of
an adverse claim based on the said Contract to Sell on the title of the subject
property, which was inscribed as Entry No. 116017. Upon full payment of the
purchase price, the Uychocdes executed a Deed of Sale involving the property in
question in favor of the Sajonas couple on September 4, 1984. The deed of
absolute sale was registered almost a year after, or on August 28, 1985.
Meanwhile, it appears that Domingo Pilares (defendant-appellant) filed Civil Case

No. Q-28850 for collection of sum of money against Ernesto Uychocde. On June
25, 1980, a Compromise Agreement was entered into by the parties in the said
case under which Ernesto Uychocde acknowledged his monetary obligation to
Domingo Pilares amounting to P27,800 and agreed to pay the same in two years
from June 25, 1980. When Uychocde failed to comply with his undertaking in the
compromise agreement, defendant-appellant Pilares moved for the issuance of a
writ of execution to enforce the decision based on the compromise agreement,
which the court granted in its order dated August 3, 1982. Accordingly, a writ of
Page 142 of 157
execution was issued on August 12, 1982 by the CFI of Quezon City where the civil
case was pending. Pursuant to the order of execution dated August 3, 1982, a
notice of levy on execution was issued on February 12, 1985. On February 12,
1985, defendant sheriff Roberto Garcia of Quezon City presented said notice of
levy on execution before the Register of Deeds of Marikina and the same was
annotated at the back of TCT No. 79073 as Entry No. 123283.
When the deed of absolute sale dated September 4 1984 was registered on
August 28, 1985, TCT No. N-79073 was cancelled and in lieu thereof, TCT No. N-
109417 was ssued in the name of the Sajonas couple. The notice of levy on
execution annotated by defendant sheriff was carried over to the new title. On
October 21, 1985, the Sajonas couple filed a Third Party Claim with the sheriff of
Quezon City, hence the auction sale of the subject property did not push through
as scheduled.
On January 10, 1986, the Sajonas spouses demanded the cancellation of the
notice of levy on execution upon defendant-appellant Pilares, through a letter to
their lawyer, Atty. Melchor Flores. Despite said demand, defendant-appellant
Pilares refused to cause the cancellation of said annotation. In view thereof,
plaintiffs-appellees filed this complaint dated January 11, 1986 on February 5,
1986.[1]
The Sajonases filed their complaint[2] in the Regional Trial Court of Rizal, Branch
71, against Domingo Pilares, the judgment creditor of the Uychocdes. The relevant
portion of the complaint alleges:
7. That at the time the notice of levy was annotated by the defendant, the
Uychocde spouses, debtors of the defendant, have already transferred, conveyed
and assigned all their title, rights and interests to the plaintiffs and there was no
more title, rights or interests therein which the defendant could levy upon;
8. That the annotation of the levy on execution which was carried over to the title
of said plaintiffs is illegal and invalid and was made in utter bad faith, in view of
the existence of the Adverse Claim annotated by the plaintiffs on the
corresponding title of the Uychocde spouses;
9. That a demand was made by the plaintiffs upon the defendant Domingo A.
Pilares, to cause the cancellation of the said notice of levy but the latter, without
Page 143 of 157

justifiable reason and with the sole purpose of harassing and embarrassing the
plaintiffs ignored and refused plaintiffs demand;
10. That in view of the neglect, failure and refusal of the defendant to cause the
cancellation of the notice of levy on execution, the plaintiffs were compelled to
litigate and engage the services of the undersigned counsel, to protect their rights
and interests, for which they agreed to pay attorney’s fees in the amount of
P10,000 and appearance fees of P500 per day in court.[3]
Pilares filed his answer with compulsory counterclaim[4] on March 8, 1986,

raising special and affirmative defenses, the relevant portions of which are as
follows:
10. Plaintiff has no cause of action against herein defendants;
11. Assuming, without however admitting that they filed an adverse claim against
the property covered by TCT No. 79073 registered under the name of spouses
Ernesto Uychocde on August 27, 1984, the same ceases to have any legal force
and effect (30) days thereafter pursuant to Section 70 of P.D. 1529;
12. The Notice of Levy annotated at the back of TCT No. 79073 being effected
pursuant to the Writ of Execution dated August 31, 1982, duly issued by the CFI
(now RTC) of Quezon City proceeding from a decision rendered in Civil Case No.
28859 in favor of herein defendant against Ernesto Uychocde, is undoubtedly
proper and appropriate because the property is registered in the name of the
judgment debtor and is not among those exempted from execution;
13. Assuming without admitting that the property subject matter of this case was
in fact sold by the registered owner in favor of the herein plaintiffs, the sale is the
null and void (sic) and without any legal force and effect because it was done in
fraud of a judgment creditor, the defendant Pilares.[5]
Pilares likewise sought moral and exemplary damages in a counterclaim against

the Sajonas spouses. The parties appeared at pre-trial proceedings on January 21,
1987,[6] after which, trial on the merits ensued.
The trial court rendered its decision on February 15, 1989.[7] It found in favor of
the Sajonas couple, and ordered the cancellation of the Notice of Levy from
Transfer Certificate of Title No. N-109417.
Page 144 of 157

The court a quo stated, thus:
After going over the evidence presented by the parties, the court finds that
although the title of the subject matter of the Notice of Levy on Execution was
still in the name of the Spouses Uychocde when the same was annotated on the
said title, an earlier Affidavit of Adverse Claim was annotated on the same title by
the plaintiffs who earlier bought said property from the Uychocdes.
It is a well settled rule in this jurisdiction (Guidote vs. Maravilla, 48 Phil. 442) that
actual notice of an adverse claim is equivalent to registration and the subsequent
registration of the Notice of Levy could not have any legal effect in any respect on
account of prior inscription of the adverse claim annotated on the title of the
Uychocdes.
xxx xxx xxx
On the issue of whether or not plaintiffs are buyers in good faith of the property
of the spouses Uychocde even notwithstanding the claim of the defendant that
said sale executed by the spouses was made in fraud of creditors, the Court finds
that the evidence in this instance is bare of any indication that said plaintiffs as
purchasers had notice beforehand of the claim of the defendant over said
property or that the same is involved in a litigation between said spouses and the
defendant. Good faith is the opposite of fraud and bad faith, and the existence of
any bad faith must be established by competent proof.[8](Cai vs. Henson, 51 Phil
606)
xxx xxx xxx
In view of the foregoing, the Court renders judgment in favor of the plaintiffs and
against the defendant Pilares, as follows:
1. Ordering the cancellation of the Notice of Levy on Execution annotated on

Transfer Certificate of Title No. N-109417.
2. Ordering said defendant to pay the amount of P5,000 as attorney’s fees.
3. Dismissing the Counterclaim interposed by said defendant.
Said defendant is likewise ordered to pay the costs.
Page 145 of 157

Dissatisfied, Pilares appealed to the Court of Appeals[9], assigning errors on the

part of the lower court. The appellate court reversed the lower court’s decision,
and upheld the annotation of the levy on execution on the certificate of title, thus:
WHEREFORE, the decision of the lower court dated February 15, 1989 is reversed
and set aside and this complaint is dismissed.
Costs against the plaintiffs-appellees."[10]
The Sajonas couple are now before us, on a Petition for Review on Certiorari[11],
praying inter alia to set aside the Court of Appeals decision, and to reinstate that
of the Regional Trial Court.
Private respondent filed his Comment[12] on March 5, 1992, after which, the
parties were ordered to file their respective Memoranda. Private respondent
complied thereto on April 27, 1994[13], while petitioners were able to submit their
Memorandum on September 29, 1992.[14]
Petitioner assigns the following as errors of the appellate court, to wit:
I
THE LOWER COURT ERRED IN HOLDING THAT THE RULE ON THE 30-DAY PERIOD
FOR ADVERSE CLAIM UNDER SECTION 70 OF P.D. NO. 1529 IS ABSOLUTE
INASMUCH AS IT FAILED TO READ OR CONSTRUE THE PROVISION IN ITS ENTIRETY
AND TO RECONCILE THE APPARENT INCONSISTENCY WITHIN THE PROVISION IN
ORDER TO GIVE EFFECT TO IT AS A WHOLE.
II
THE LOWER COURT ERRED IN INTERPRETING SECTION 70 OF P.D. NO. 1529 IN

SUCH WISE ON THE GROUND THAT IT VIOLATES PETITIONERS SUBSTANTIAL
RIGHT TO DUE PROCESS.
Primarily, we are being asked to ascertain who among the parties in suit has a
better right over the property in question. The petitioners derive their claim from
the right of ownership arising from a perfected contract of absolute sale between
them and the registered owners of the property, such right being attested to by the
notice of adverse claim[15] annotated on TCT No. N-79073 as early as August 27,
1984. Private respondent on the other hand, claims the right to levy on the
Page 146 of 157

property, and have it sold on execution to satisfy his judgment credit, arising from
Civil Case No. Q-28850[16] against the Uychocdes, from whose title, petitioners
derived their own.
Concededly, annotation of an adverse claim is a measure designed to protect
the interest of a person over a piece of real property where the registration of such
interest or right is not otherwise provided for by the Land Registration Act or Act
496 (now P.D. 1529 or the Property Registration Decree), and serves a warning to
third parties dealing with said property that someone is claiming an interest on the
same or a better right than that of the registered owner thereof. Such notice is
registered by filing a sworn statement with the Register of Deeds of the province
where the property is located, setting forth the basis of the claimed right together
with other dates pertinent thereto.[17]
The registration of an adverse claim is expressly recognized under Section 70 of
P.D. No. 1529.*
Noting the changes made in the terminology of the provisions of the law,
private respondent interpreted this to mean that a Notice of Adverse Claim remains
effective only for a period of 30 days from its annotation, and does not
automatically lose its force afterwards. Private respondent further maintains that
the notice of adverse claim was annotated on August 27, 1984, hence, it will be
effective only up to September 26, 1984, after which it will no longer have any
binding force and effect pursuant to Section 70 of P.D. No. 1529. Thus, the sale in
favor of the petitioners by the Uychocdes was made in order to defraud their
creditor (Pilares), as the same was executed subsequent to their having defaulted
in the payment of their obligation based on a compromise agreement.[18]
The respondent appellate court upheld private respondent’s theory when it
ruled:
The above stated conclusion of the lower court is based on the premise that the
adverse claim filed by plaintiffs-appellees is still effective despite the lapse of 30
days from the date of registration. However, under the provisions of Section 70 of
P.D. 1529, an adverse claim shall be effective only for a period of 30 days from the
date of its registration. The provision of this Decree is clear and specific.
xxx xxx xxx
Page 147 of 157

It should be noted that the adverse claim provision in Section 110 of the Land
Registration Act (Act 496) does not provide for a period of effectivity of the
annotation of an adverse claim. P.D. No. 1529, however, now specifically provides
for only 30 days. If the intention of the law was for the adverse claim to remain
effective until cancelled by petition of the interested party, then the aforecited
provision in P.D. No. 1529 stating the period of effectivity would not have been
inserted in the law.
Since the adverse claim was annotated On August 27, 1984, it was effective only
until September 26, 1984. Hence, when the defendant sheriff annotated the
notice of levy on execution on February 12, 1985, said adverse claim was already
ineffective. It cannot be said that actual or prior knowledge of the existence of the
adverse claim on the Uychocdes title is equivalent to registration inasmuch as the
adverse claim was already ineffective when the notice of levy on execution was
annotated. Thus, the act of defendant sheriff in annotating the notice of levy on
execution was proper and justified.
The appellate court relied on the rule of statutory construction that Section 70
is specific and unambiguous and hence, needs no interpretation nor
construction.[19] Perforce, the appellate court stated, the provision was clear
enough to warrant immediate enforcement, and no interpretation was needed to
give it force and effect. A fortiori, an adverse claim shall be effective only for a
period of thirty (30) days from the date of its registration, after which it shall be
without force and effect. Continuing, the court further stated;
. . . clearly, the issue now has been reduced to one of preference- which should be
preferred between the notice of levy on execution and the deed of absolute
sale. The Deed of Absolute Sale was executed on September 4, 1984, but was
registered only on August 28, 1985, while the notice of levy on execution was
annotated six (6) months prior to the registration of the sale on February 12,
1985.
In the case of Landig vs. U.S. Commercial Co., 89 Phil 638 it was held that where a
sale is recorded later than an attachment, although the former is of an earlier
date, the sale must give way to the attachment on the ground that the act of
registration is the operative act to affect the land. A similar ruling was restated
in Campillo vs. Court of Appeals (129 SCRA 513).
Page 148 of 157

xxx xxx xxx
The reason for these rulings may be found in Section 51 of P.D. 1529, otherwise
known as the Property Registration Decree, which provides as follows:
Section 51. Conveyance and other dealings by the registered owner.- An owner of
registered land may convey, mortgage, lease, charge, or otherwise deal with the
same in accordance with existing laws. He may use such forms of deeds,
mortgages, leases or other voluntary instruments as are sufficient in law. But no
deed, mortgage, lease or other voluntary instrument, except a will purporting to
convey or affect registered land shall take effect as a conveyance or bind the land,
but shall operate only as a contract between the parties and as evidence of
authority to the Register of Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land in so
far as third persons are concerned, and in all cases under the Decree, the
registration shall be made in the office of the Register of Deeds for the province or
city where the land lies. (Italics supplied by the lower court.)
Under the Torrens system, registration is the operative act which gives validity
to the transfer or creates a lien upon the land. A person dealing with registered
land is not required to go behind the register to determine the condition of the
property. He is only charged with notice of the burdens on the property which are
noted on the face of the register or certificate of title.[20]
Although we have relied on the foregoing rule, in many cases coming before us,
the same, however, does not fit in the case at bar. While it is the act of registration
which is the operative act which conveys or affects the land insofar as third persons
are concerned, it is likewise true, that the subsequent sale of property covered by
a Certificate of Title cannot prevail over an adverse claim, duly sworn to and
annotated on the certificate of title previous to the sale.[21] While it is true that
under the provisions of the Property Registration Decree, deeds of conveyance of
property registered under the system, or any interest therein only take effect as a
conveyance to bind the land upon its registration, and that a 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, nonetheless, this rule is not absolute. Thus, one who buys from the
registered owner need not have to look behind the certificate of title, he is,
nevertheless, bound by the liens and encumbrances annotated thereon. One who
Page 149 of 157
buys without checking the vendors title takes all the risks and losses consequent to
such failure.[22]
In PNB vs. Court of Appeals, we held that the subsequent sale of the property
to the De Castro spouses cannot prevail over the adverse claim of Perez, which was
inscribed on the banks certificate of title on October 6, 1958. That should have put
said spouses on notice, and they can claim no better legal right over and above that
of Perez. The TCT issued in the spouses names on July, 1959 also carried the said
annotation of adverse claim. Consequently, they are not entitled to any interest on
the price they paid for the property.[23]
Then again, in Gardner vs. Court of Appeals, we said that the statement of
respondent court in its resolution of reversal that until the validity of an adverse
claim is determined judicially, it cannot be considered a flaw in the vendors title
contradicts the very object of adverse claims. As stated earlier, the annotation of
an adverse claim is a measure designed to protect the interest of a person over a
piece of real property, and serves as a notice and warning to third parties dealing
with said property that someone is claiming an interest on the same or has a better
right than the registered owner thereof. A subsequent sale cannot prevail over the
adverse claim which was previously annotated in the certificate of title over the
property.[24]
The question may be posed, was the adverse claim inscribed in the Transfer
Certificate of Title No. N-109417 still in force when private respondent caused the
notice of levy on execution to be registered and annotated in the said title,
considering that more than thirty days had already lapsed since it was
annotated? This is a decisive factor in the resolution of this instant case.
If the adverse claim was still in effect, then respondents are charged with
knowledge of pre-existing interest over the subject property, and thus, petitioners
are entitled to the cancellation of the notice of levy attached to the certificate of
title.
For a definitive answer to this query, we refer to the law itself. Section 110 of
Act 496 or the Land Registration Act reads:
Sec. 110. Whoever claims any part or interest in registered lands adverse to the
registered owner, arising subsequent to the date of the original registration, may,
if no other provision is made in this Act for registering the same, make a
statement in writing setting forth fully his alleged right or interest, and how or
Page 150 of 157

under whom acquired, and a reference to the volume and page of the certificate
of title of the registered owner, and a description of the land in which the right or
interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimants
residence, and designate a place at which all notices may be served upon
him. The statement shall be entitled to registration as an adverse claim, and the
court, upon a petition of any party in interest, shall grant a speedy hearing upon
the question of the validity of such adverse claim and shall enter such decree
therein as justice and equity may require. If the claim is adjudged to be invalid,
the registration shall be cancelled. If in any case, the court after notice and
hearing shall find that a claim thus registered was frivolous or vexatious, it may
tax the adverse claimant double or treble the costs in its discretion.
The validity of the above-mentioned rules on adverse claims has to be

reexamined in the light of the changes introduced by P.D. 1529, which provides:
Sec. 70 Adverse Claim- Whoever claims any part or interest in registered land
registration, may, if no other provision is made in this decree for registering the
and how or under whom acquired, a reference to the number of certificate of title
of the registered owner, the name of the registered owner, and a description of
the land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimants
of registration. After the lapse of said period, the annotation of adverse claim may
be cancelled upon filing of a verified petition therefor by the party in
Before the lapse of thirty days aforesaid, any party in interest may file a petition
in the Court of First Instance where the land is situated for the cancellation of the
adverse claim, and the court shall grant a speedy hearing upon the question of
the validity of such adverse claim, and shall render judgment as may be just and
Page 151 of 157

equitable. If the adverse claim is adjudged to be invalid, the registration thereof

shall be ordered cancelled. If, in any case, the court, after notice and hearing shall
find that the adverse claim thus registered was frivolous, it may fine the claimant
in an amount not less than one thousand pesos, nor more than five thousand
pesos, in its discretion. Before the lapse of thirty days, the claimant may withdraw
his adverse claim by filing with the Register of Deeds a sworn petition to that
effect. (Italics ours)
In construing the law aforesaid, care should be taken that every part thereof be
given effect and a construction that could render a provision inoperative should be
avoided, and inconsistent provisions should be reconciled whenever possible as
parts of a harmonious whole.[25] For taken in solitude, a word or phrase might easily
convey a meaning quite different from the one actually intended and evident when
a word or phrase is considered with those with which it is associated.[26] In
ascertaining the period of effectivity of an inscription of adverse claim, we must
read the law in its entirety. Sentence three, paragraph two of Section 70 of P.D.
1529 provides:
The adverse claim shall be effective for a period of thirty days from the date of
registration.
At first blush, the provision in question would seem to restrict the effectivity of
the adverse claim to thirty days. But the above provision cannot and should not be
treated separately, but should be read in relation to the sentence following, which
reads:
After the lapse of said period, the annotation of adverse claim may be
cancelled upon filing of a verified petition therefor by the party in interest.
If the rationale of the law was for the adverse claim to ipso facto lose force and
effect after the lapse of thirty days, then it would not have been necessary to
include the foregoing caveat to clarify and complete the rule. For then, no adverse
claim need be cancelled. If it has been automatically terminated by mere lapse of
time, the law would not have required the party in interest to do a useless act.
A statutes clauses and phrases must not be taken separately, but in its relation
to the statutes totality. Each statute must, in fact, be construed as to harmonize it
with the pre-existing body of laws. Unless clearly repugnant, provisions of statutes
must be reconciled. The printed pages of the published Act, its history, origin, and
Page 152 of 157

its purposes may be examined by the courts in their construction.[27] An eminent

authority on the subject matter states the rule candidly:
A statute is passed as a whole and not in parts or sections, and is animated by one
general purpose and intent. Consequently, each part or section should be
construed in connection with every other part or section so as to produce a
harmonious whole. It is not proper to confine its intention to the one section
construed. It is always an unsafe way of construing a statute or contract to divide
it by a process of etymological dissection, into separate words, and then apply to
each, thus separated from the context, some particular meaning to be attached to
any word or phrase usually to be ascertained from the context.[28]
Construing the provision as a whole would reconcile the apparent inconsistency

between the portions of the law such that the provision on cancellation of adverse
claim by verified petition would serve to qualify the provision on the effectivity
period. The law, taken together, simply means that the cancellation of the adverse
claim is still necessary to render it ineffective, otherwise, the inscription will remain
annotated and shall continue as a lien upon the property. For if the adverse claim
has already ceased to be effective upon the lapse of said period, its cancellation is
no longer necessary and the process of cancellation would be a useless
ceremony.[29]
It should be noted that the law employs the phrase may be cancelled, which
obviously indicates, as inherent in its decision making power, that the court may or
may not order the cancellation of an adverse claim, notwithstanding such provision
limiting the effectivity of an adverse claim for thirty days from the date of
registration. The court cannot be bound by such period as it would be inconsistent
with the very authority vested in it. A fortiori, the limitation on the period of
effectivity is immaterial in determining the validity or invalidity of an adverse claim
which is the principal issue to be decided in the court hearing. It will therefore
depend upon the evidence at a proper hearing for the court to determine whether
it will order the cancellation of the adverse claim or not.[30]
To interpret the effectivity period of the adverse claim as absolute and without
qualification limited to thirty days defeats the very purpose for which the statute
provides for the remedy of an inscription of adverse claim, as the annotation of an
adverse claim is a measure designed to protect the interest of a person over a piece
of real property where the registration of such interest or right is not otherwise
provided for by the Land Registration Act or Act 496 (now P.D. 1529 or the Property
Page 153 of 157

Registration Decree), and serves as a warning to third parties dealing with said
property that someone is claiming an interest or the same or a better right than
the registered owner thereof.[31]
The reason why the law provides for a hearing where the validity of the adverse
claim is to be threshed out is to afford the adverse claimant an opportunity to be
heard, providing a venue where the propriety of his claimed interest can be
established or revoked, all for the purpose of determining at last the existence of
any encumbrance on the title arising from such adverse claim. This is in line with
the provision immediately following:
Provided, however, that after cancellation, no second adverse claim shall be

registered by the same claimant.
Should the adverse claimant fail to sustain his interest in the property, the
adverse claimant will be precluded from registering a second adverse claim based
on the same ground.
It was held that validity or efficaciousness of the claim may only be determined
by the Court upon petition by an interested party, in which event, the Court shall
order the immediate hearing thereof and make the proper adjudication as justice
and equity may warrant. And it is only when such claim is found unmeritorious that
the registration of the adverse claim may be cancelled, thereby protecting the
interest of the adverse claimant and giving notice and warning to third parties.[32]
In sum, the disputed inscription of adverse claim on the Transfer Certificate of
Title No. N-79073 was still in effect on February 12, 1985 when Quezon City Sheriff
Roberto Garcia annotated the notice of levy on execution thereto. Consequently,
he is charged with knowledge that the property sought to be levied upon on
execution was encumbered by an interest the same as or better than that of the
registered owner thereof. Such notice of levy cannot prevail over the existing
adverse claim inscribed on the certificate of title in favor of the petitioners. This can
be deduced from the pertinent provision of the Rules of Court, to wit:
Section 16. Effect of levy on execution as to third persons- The levy on execution
shall create a lien in favor of the judgment creditor over the right, title and
interest of the judgment debtor in such property at the time of the levy, subject
to liens or encumbrances then existing. (Italics supplied)
Page 154 of 157

To hold otherwise would be to deprive petitioners of their property, who

waited a long time to complete payments on their property, convinced that their
interest was amply protected by the inscribed adverse claim.
As lucidly observed by the trial court in the challenged decision:
True, the foregoing section provides that an adverse claim shall be effective for a
period of thirty days from the date of registration. Does this mean however, that
the plaintiffs thereby lost their right over the property in question? Stated in
another, did the lapse of the thirty day period automatically nullify the contract to
sell between the plaintiffs and the Uychocdes thereby depriving the former of
their vested right over the property?
It is respectfully submitted that it did not.[33]
As to whether or not the petitioners are buyers in good faith of the subject
property, the same should be made to rest on the findings of the trial court. As
pointedly observed by the appellate court, there is no question that plaintiffs-
appellees were not aware of the pending case filed by Pilares against Uychocde at
the time of the sale of the property by the latter in their favor. This was clearly
elicited from the testimony of Conchita Sajonas, wife of plaintiff, during cross-
examination on April 21, 1988.[34]
ATTY. REYES
Q - Madam Witness, when Engr. Uychocde and his wife offered to you and
your husband the property subject matter of this case, they showed you
the owners transfer certificate, is it not?
A - Yes, sir.
Q - That was shown to you the very first time that this lot was offered to
you for sale?
A - Yes.
Q - After you were shown a copy of the title and after you were informed
that they are desirous in selling the same, did you and your husband
decide to buy the same?
A - No, we did not decide right after seeing the title. Of course, we visited...
Q - No, you just answer my question. You did not immediately decide?
Page 155 of 157

A - Yes.
Q - When did you finally decide to buy the same?
A - After seeing the site and after verifying from the Register of Deeds in
Marikina that it is free from encumbrances, that was the time we
decided.
Q - How soon after you were offered this lot did you verify the exact
location and the genuineness of the title, as soon after this was offered
to you?
A - I think its one week after they were offered.[35]
A purchaser in good faith and for value is one who buys property of another
without notice that some other person has a right to or interest in such property
and pays a full and fair price for the same, at the time of such purchase, or before
he has notice of the claims or interest of some other person in the
property.[36] Good faith consists in an honest intention to abstain from taking any
unconscientious advantage of another.[37] Thus, the claim of the private respondent
that the sale executed by the spouses was made in fraud of creditors has no basis
in fact, there being no evidence that the petitioners had any knowledge or notice
of the debt of the Uychocdes in favor of the private respondents, nor of any claim
by the latter over the Uychocdes properties or that the same was involved in any
litigation between said spouses and the private respondent. While it may be stated
that good faith is presumed, conversely, bad faith must be established by
competent proof by the party alleging the same. Sans such proof, the petitioners
are deemed to be purchasers in good faith, and their interest in the subject
property must not be disturbed.
At any rate, the Land Registration Act (Property Registration Decree)
guarantees to every purchaser of registered land in good faith that they can take
and hold the same free from any and all prior claims, liens and encumbrances
except those set forth on the Certificate of Title and those expressly mentioned in
the ACT as having been preserved against it.Otherwise, the efficacy of the
conclusiveness of the Certificate of Title which the Torrens system seeks to insure
would be futile and nugatory.[38]
ACCORDINGLY, the assailed decision of the respondent Court of Appeals dated
October 17, 1991 is hereby REVERSED and SET ASIDE. The decision of the Regional
Page 156 of 157

Trial Court dated February 15, 1989 finding for the cancellation of the notice of levy
on execution from Transfer Certificate of Title No. N-109417 is hereby REINSTATED.
The inscription of the notice of levy on execution on TCT No. N-109417 is hereby
CANCELLED.
Costs against private respondent.
SO ORDERED.
Regalado, (Chairman), Romero, Puno, and Mendoza, JJ., concur.
Page 157 of 157

February 17, 2016 G.R. No. 175760 Republic of The Philippines, Petitioner, Sogod Development Corporation, Respondent. Decision Leonen, J.

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February 17, 2016 G.R. No. 175760 Republic of The Philippines, Petitioner, Sogod Development Corporation, Respondent. Decision Leonen, J.

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Land Titles and Deeds Cases

February 17, 2016

G.R. No. 175760

REPUBLIC OF THE PHILIPPINES, Petitioner,

On December 9, 1999, Sogod filed an application for registration and confirmation

On September 19, 2000, the Regional Executive Director of the Department of

Apart from presenting documentary evidence, Sogod also presented witnesses

(4) "Article XII, Section 3 of the 1987 Constitution disqualifies private

present Petition for Review was filed. Respondent Sogod Development

THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION

THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN

THE HONORABLE COURT OF APPEALS ERRED IN GRANTING RESPONDENT’S

THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED THE TRIAL

Petitioner and respondent filed their memoranda on January 4, 201243 and

Petitioner raises the following issues in its Memorandum:

Second, "whether [respondent] and its predecessors-in-interest have possessed

Even if the court’s ruling in Heirs of Mario Malabanan v. Republic52 is applied,

On the other hand, respondent’s application, even when considered under

Respondent contends that it sufficiently complied with the requirements of the

We deny the Petition.

(b) Those who by themselves or through their predecessors-in-interest

A similar provision is found in Section 14(1) of Presidential Decree No. 1529,

(1) Those who by themselves or through their predecessors-in-

The dissent stresses that the classification or reclassification of the land as

The ruling in Heirs of Malabanan adopted the earlier interpretation in Republic v.

Instead, the more reasonable interpretation of Section 14(1) is that it merely

Untenable is petitioner’s reliance on Republic v. Diloy,79 which pronounced that

Moreover, the Naguit interpretation allows more possessors under a bona

Although adverse, open, continuous, and notorious possession in the concept of

We proceed to the second issue relating to the sufficiency of evidence showing

I (a) Land (Agricultural/Mineral)

Kind Area Class Unit Value Market Value

Pasture 4.0169 120.50

Total 10.0169 P1040.50

Analyzing the above-quoted testimony as well as the documentary evidence

MARVIC M.V.F. LEONEN

G.R. No. 192717 March 12, 2014

MINDA S. GAERLAN, Petitioner,

VILLARAMA, JR., J.:

The records bear out the following factual antecedents:

In her application, petitioner alleged that she acquired the above-mentioned

(b) Technical Description of the parcel of land;10

(c) Surveyor's Report of Survey or Surveyor' s Certificate;11

(d) Deed of Absolute Sale of Unregistered Land;12 and

(e) Tax Declaration No. 99893.13

1) Deed of Absolute Sale of Unregistered Land,

2) Tax Declaration Nos. 99893 and 058351 ,

4) Certified True Copy of Land History Card,

5) Tax Declaration in the name of Potenciano Abragan,

6) Tax Declaration in the name of Presentacion T. Eviota,

7) Tax Declaration in the name of Potenciano Abragan.

There being no evidence presented by the oppositor, JUDGMENT is hereby

Petitioner asserts that her predecessor-in-interest, Potenciano Abragan,

Respondent argues that petitioner's attempt to introduce additional evidence is

Moreover, respondent points out that BL Form No. 700-2A submitted by

remains an unclassified land until it is released therefrom and rendered open to

Essentially, the main issue to be resolved is whether the CA erred in dismissing

The distinction between a "question of law" and a "question of fact" is settled.

(1) Those who by themselves or through their predecessors-in-interest have been

(b) Those who by themselves or through their predecessors-in-interest have been

Based on the above-quoted provisions, applicants for registration of title must

To comply with the first requisite, petitioner submitted a CENRO Certification

In Republic v. Medida,40 the Court explained why a CENRO or PENRO certification