Republic v. Munoz G.R No.

151910 October 15, 2007 FACTS: Respondent filed an application for registration of title of a parcel of land of 1,986 sq.m. before RTC of Albay. The application for registration, respondent averred that no mortgage or encumbrance of any kind affects the property that no other person has an interest, legal, on the subject lot. The property was acquired by donation inter vivos, executed by spouses Apolonio Muoz and Anastacia Vitero on Nov. 1956 and the spouses and predecessors-in-interest have been in possession thereof since time immemorial for more than 70 years. On Nov. 1996, petitioner through the OSG opposed the application. Alleging that: 1. the applicant nor the predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of the land in question since June 12, 1945 or prior thereto 2. the muniment/s of title and/or the tax payment/s receipts of application, if any, attached to or alleged in the application do not constitute competent and sufficient evidence of a bona fide acquisition of the lands, 3. that the claim of ownership in gee simple on the basis of Spanish title or grant can no loner be availed because it failed to file for a period of 6 mos. from Feb. 1976 as required by PD 892 4. the parcel applied for is part of public domain 5. filed beyond Dec. 31, 1987, which is filed out of time. Respondents Answer to opposition, the said lot was originally owned and possessed by Puvinar and Lozada. In April 1917, Pulvinar sold his share of the unregistered land to Sps. Muoz and Vitero to respondents parents. In June 1920, Lozada likewise sold his remaining part to the parents of respondent. Ownership and possession of the property were consolidated by the spouses and declared for taxation purposes in the name of Muoz in 1920.It was stated that during cadastral survey conducted in Lingao, Albay in 1928 the land was designated as Lot 2276as per Survey Notification Card issued to Muoz dated Oct. 2, 1928. Finally, respondent contended that from 1920 up to 1996, the time of application, the land taxes for the property had been fully paid. During the trial, respondent, as sole witness, who was 81 years old, testified that he acquired the property in 1956 when his parents donated the same to him. He presented the tax declaration for payment of realty tax. A certification from the Office of the Municipal Treasurer was showed for payment of real estate taxes from 1956 up to 1997. Declared that the property is residential with improvements such as a house and fruit bearing trees. In 1957, he also constructed a concrete fence surrounding the entire property and narrated that his childhood days. Also none of his sibling were claiming interests over the property. The trial court noted the report of the Director of Lands, the land in question was covered by Free Patent application no. 10-2-664 of Anastacia Vitero. The RTC granted the application for registration. On appeal, the petitioner argued that the trial court did not acquire jurisdiction over the subject lot: 1) the notice of initial hearing was not timely filed; 2) the applicant failed to present the original tracing cloth plan of the property sought to be registered during the trial; and 3) the applicant failed to present evidence that the land is alienable and disposable. The CA affirmed the decision of the court a quo, that there was conclusive proof that the jurisdictional requirement of due notice had been complied with under Sec. 24 PD 1529. Further the failure to present in evidence the tracing cloth plan of the

subject property did not deprive the lower court of its jurisdiction to act on the application in question. Lastly CA ruled that respondent need not adduce document proof that the disputed property had been declared alienable and disposable for the simple reason that the lot had once been covered by free patent application; hence, this alone is conclusive evidence that the property was already declared by the government as open for public dominion. Hence, this petition. ISSUE: (a) Whether or not, failure to present the original tracing cloth plan is a fatal omission? (b) Whether or not, that in proving the alienable and disposable nature of the property, there hasto be a certification from the DENR and CENRO (Community Environment and NaturalResources Office)? HELD: The instant petition is granted. Accordingly, the decision dated August 29,2001 of the Court of Appeals in CA-G.R. CV No. 58170, as reiterated in its resolution of January 29, 2002, is reversed and set aside, and the application for registration filed by respondent Ludolfo V. Muoz is denied. (a) YES. The court has recognized instances of substantial compliance with this rule. It is true that the best evidence to identify a piece of land for registration purposes is the original tracing cloth plan from the Bureau of Lands, but blueprint copies and other evidence could also provide sufficient identification. In the present application for registration, respondent submitted the supporting documents: 1) blue print copy of the survey plan approved by the Bureau of Lands 2) technical description duly verified and approved by the Director of Lands. In Recto v. Republic, the blueprint copy of the cloth plan together with the lots description duly certified as to their correctness by the Bureau of Lands are adequate to identify the land applied for registration. If the survey plan is approved by the Director of Lands and its correctness has not been overcome by clear, strong and convince evidence, the presentation of the tracing cloth plan may be dispensed with. All the evidence on record sufficiently identified the property as the one applied for by respondent and containing the corresponding metes and bounds as well as area. Original tracing cloth plan need not be presented in evidence. (b) NO. The CA said that the respondent need not to adduce documentary proof over the disputed property since it has been declared alienable and disposable because it is covered by Free Patent Application No. 10-2-664 in the name of respondents mother. It is proof enough that the property was declared by the government as open for public disposition, the court cannot sustain the argument of respondent that subject property was declared alienable and disposable land. The court also noted that neither the Director of Lands nor the LRA attested that the land subject of this proceeding is alienable or disposable. Application for confirmation of imperfect title must be able to prove the following: 1) the land forms part of the alienable and disposable agricultural lands of public domain;2) that they have been in open, continuous, exclusive and notorious possession and occupation of the same under a bona fide claim of ownership either since time immemorial or since June 12, 1945.The Public Land Act remains to this day the existing general law governing the classification and disposition of the public domain, other than

timber and mineral lands. Under the Regalian Doctrine, embodied in the Constitution, public lands not shown to have been reclassified or released as alienable agricultural land or alienated to a private person by the State remain part of the alienable public domain. Under the jurisprudence, no public land can be acquired by private persons without any grant, express or implied, from the government; and it is indispensable that the person claiming title to public land should show that his title was acquired from the State or any other mode of acquisition recognized by law. In the present case, respondent failed to submit a certification from proper government agency to prove that the land subject of registration is indeed alienable and disposable. A CENRO certificate, which respondent failed to secure, could have evidence the alienability of the land involved. Respondent failed to convince the court that the land applied for is alienable and disposable character. The Court cannot approve the application

held that Lot 736 is public in nature. Since Lot 736 is property of public dominion, it is outside the commerce of man. Thus, the Sangguniang Bayan of Binmaley, Pangasinan exceeded its authority when it adopted Resolution Nos. 104 and 105 converting Lot 736 from an institutional lot to a commercial lot and authorizing the municipal mayor to enter into a contract of lease for 25 years with the Rural Bank of Anda over a 252 square meter portion of Lot 736. CA: Agreed with the trial court that Lot 736 is property of public dominion and is used by the public as a pathway. Respondent and the Municipality of Binmaley are mere claimants with no sufficient evidence to prove their ownership of Lot 736. CA held that property of public dominion is intended for the common welfare and cannot be the object of appropriation either by the state or by private persons. Since Lot 736 is for public use, it is a property of public dominion and it is not susceptible of private ownership. Thus, Resolution Nos. 104 and 105 are void for being enacted beyond the powers of the Sangguniang Bayan of Binmaley. The contract of lease between the Municipality of Binmaley and the Rural Bank of Anda is therefore void. CA also ruled that since neither the respondent nor the Municipality of Binmaley owns Lot 736, there is no basis for the monetary awards granted by the trial court. ISSUES: The issue in this case is whether Resolution Nos. 104 and 105 of the Sangguniang Bayan of Binmaley are valid. HELD: No. The records show that Lot 736 is used as a pathway going to the school, the seminary, or the church, which are all located on lots adjoined to Lot 736. Lot 736 was also used for parking and playground. In other words, Lot 736 was used by the public in general. Both respondent and the Municipality of Binmaley failed to prove their right over Lot 736. Since Lot 736 has never been acquired by anyone through purchase or grant or any other mode of acquisition, Lot 736 remains part of the public domain and is owned by the state. There being no evidence whatever that the property in question was ever acquired by the applicants or their ancestors either by composition title from the Spanish Government or by possessory information title or by any other means for the acquisition of public lands, the property must be held to be public domain. For it is well settled that no public land can be acquired by private persons without any grant, express or implied, from the government. It is indispensable then that there be a showing of a title from the state or any other mode of acquisition recognized by law. This is in accordance with the Regalian doctrine which holds that the state owns all lands and waters of the public domain. Thus, under Article XII, Section 2 of the Constitution: "All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the state." Municipal corporations cannot appropriate to themselves public or government lands without prior grant from the government. Since Lot 736 is owned by the state, the Sangguniang Bayan of Binmaley exceeded its authority in passing Resolution Nos. 104 and 105. Thus, Resolution Nos. 104 and 105 are void and consequently, the contract of

Rural Bank Of Anda, Inc. v. Roman Catholic Archbishop Of Lingayen- Dagupan G.R. No. 155051, May 29, 2007 FACTS: The lot in dispute, Cadastral Lot 736 (1,300 sq.m. - part of Lot 3 along with Lot 737 called Imeldas Park & Lot 739, which was a waiting shed), is located in the Poblacion of Binmaley, Pangasinan. The front side of Lot 3 is bounded by Lot 1 (includes Mary Help of Christians Seminary and owned by respondent Roman Catholic Archbishop of Lingayen.) and on the south by the national road. In 1958, the Rector of the seminary ordered the construction of the fence separating Lot 736 from the national road to prevent the caretelas from parking because the smell of horse manure was already bothering the priests living in the seminary. The concrete fence enclosing Lot 736 has openings in the east, west, and center and has no gate. People can pass through Lot 736 at any time of the day. On 22 December 1997, the Sangguniang Bayan of Binmaley, Pangasinan, passed and approved Resolution Nos. 104 and 105. Resolution No. 104 converted Lot 736 from an institutional lot to a commercial lot. Resolution No. 105 authorized the municipal mayor to enter into a contract of lease for 25 years with the Rural Bank of Anda over a portion of Lot 73. In December 1997, Fr. Arenos, the director of the seminary, discovered that a sawali fence was being constructed enclosing a portion of Lot 736. In January 1998, the Municipal Mayor of Binmaley, Rolando Domalanta came to the seminary to discuss the situation. Mayor Domalanta and Fr. Arenos agreed that the construction of the building for the Rural Bank of Anda should be stopped. On 24 March 1998, respondent requested Mayor Domalanta to remove the sawali fence and restore the concrete fence. On 20 May 1998, Mayor Domalanta informed respondent that the construction of the building of the Rural Bank of Anda would resume but that he was willing to discuss with respondent to resolve the problem concerning Lot 736. On 1 June 1998, respondent filed a complaint for Abatement of Illegal Constructions, Injunction and Damages with Writ of Preliminary Injunction in the RTC of Lingayen, Pangasinan. RTC: Ruled in favor of Respondent. Lot 736 is not covered by any Torrens title either in the name of respondent or in the name of the Municipality of Binmaley. The trial court

lease between the Municipality of Binmaley and the Rural Bank of Anda over a portion of Lot 736 is also void.

Corollarily, on February 14, 1990, the sale of Lot No. 1253-B to Wilfredo was registered with the RD of Antique. Consequently, a TCT, cancelling the previous TCT, was issued in favor of Wilfredo pursuant to the Deed of Absolute Sale dated December 7, 1989. On September 29, 1995, spouses Gabino and Ma. Dorothy Vagilidad filed a Complaint for Annulment of Document, Reconveyance and Damages, with the RTC of Antique against spouses Wilfredo and Lolita Vagilidad, claiming that that they are the lawful owners of Lot No. 1253-B which was sold to him by Loreto in 1986. They alleged that Gabino Jr. is a nephew of defendant Wilfredo and that when Gabino Sr. died, defendant Wilfredo requested Gabino Jr. to transfer the ownership of Lot No. 1253-B in defendant Wilfredos name for loaning purposes with the agreement that the land will be returned when the plaintiffs need the same. They added that, pursuant to the mentioned agreement, plaintiff Gabino Jr., without the knowledge and consent of his spouse, Dorothy, executed the Deed of Sale dated December 7, 1989 in favor of defendant Wilfredo receiving nothing as payment therefor. They pointed out that after defendant Wilfredo was able to mortgage the property, plaintiffs demanded the return of the property but the defendants refused to return the same. The plaintiffs claimed that the same document is null and void for want of consideration and the same does not bind the non-consenting spouse. The defendants denied the material allegations of the plaintiffs, claiming that they are the lawful owners of Lot No. 1253-B. They alleged that Loreto sold to them Lot No. 1253 on December 7, 1989 for P5,000.00 and the transaction was registered with the RD of Antique. They added that, a TCT covering Lot No. 1253-B, was issued in favor of the defendants. RTC: The trial court ruled in favor of Wilfredo and Lolita and held that Loreto did not validly convey Lot No. 1253-B to Gabino, Jr. on May 12, 1986 since at that time, the heirs of Zoilo had not partitioned Lot No. 1253. It ruled that Loreto could only sell at that time his aliquot share in the inheritance. He could not have sold a divided part thereof designated by metes and bounds. Thus, it held that Loreto remained the owner of the subject lot when he sold it to Wilfredo on December 7, 1989. It further found that there was no proof that Wilfredo knew of the sale that took place between Loreto and Gabino, Jr. on May 12, 1986. CA: Reversed and Set Aside Rtc and declared the sale made by Loreto in favor of Gabino, Jr. on May 12, 1986 is valid. The rights of Loreto to succession are transmitted from the moment of Zoilos death in 1931. Thus, when Loreto sold the Lot No. 1253 to Gabino Jr., he already had the right as co-owner to his share to Lot No. 1253, even if at that time the property had not yet been partitioned. Consequently, the sale made by Loreto in favor of Wilfredo is void because Loreto and Francisca were no longer the owners of Lot No. 1253-B as of that time. ISSUE: WON Spouses Wilfredo and Lolita are the rightful owners of the property. HELD: No. Petitioners contend that the appellate court should have upheld the title of Wilfredo under Article 1544 of the Civil Code and the doctrine of double sale where the buyer who is in possession of the Torrens Title must prevail. First, petitioners title was issued pursuant to the purported Deed of Absolute Sale of Portion of Land dated December 7,

Republic vs. Naguiat Jan. 24, 2006 unclassified lands cannot be acquired by adverse possession/occupation; occupation in the concept of an owner however long cannot ripen into private ownership and be registered as a title. Facts: Respondent applies for registration of title to 4 parcels of land contending she is the owner of the said land which she acquired from the LID Corporation which in turn acquired the same from persons who have been in possession thereof for more than 30 years. The Republic filed in opposition that said lands belong to the public domain and not subject to private appropriation. Issue: Whether or not the land in dispute as a forest land belonging to public domain may be appropriated as private property. Ruling: For a public forest land/reserves to be subject for private appropriation, it requires an express and positive act of the government that it will become a part of alienable and disposable agricultural lands of public domain. Occupation in the concept of an owner cannot ripen into private ownership and be registered to as a title.

Vagilidad v. Vagilidad G.R. No. 161136 FACTS: A parcel of land, Lot No. 1253, situated in Atabay, San Jose, Antique, measuring 4,280 sq.m., was owned by Zoilo. Sometime in 1931, ZOILO died. Subsequently, on May 12, 1986, Loreto Labiao, son of Zoilo, sold to Gabino Vagilidad Jr. a portion of Lot No. 1253 (Lot 1253-B - 1,604 sq.m. In view of the death of Zoilo, his children, Loreto, Efren Labiao and Priscilla Espanueva executed an Extrajudicial Settlement of Estate adjudicating the entire Lot to Loreto. On January 29, 1987, a TCT was issued in the name of Loreto alone. On September 21, 1988, Gabino Jr. paid real estate taxes on the land he bought from Loreto where the property was specified as Lot No. 1253-B. Gabino Jr. thereafter sold the same lot to Wilfredo Vagilidad. Deed of Absolute Sale of a Portion of Land involving the opt-described property was also executed by Loreto in favor of Wilfredo (December 7, 1989). The aforementioned deeds, which were notarized by Atty. Warloo Cardenal, appear to have been given the same entry number in his notarial books.

1989. Second, Wilfredo did not see any encumbrance at the back of the title of the subject lot when he purchased it from Loreto on December 7, 1989. Thus, since he is not bound to go beyond the certificate of title, he has acquired the subject property in due course and in good faith. However, petitioners reliance on Article 1544 is misplaced. While title to the property was issued in Wilfredos name on February 15, 1990, the following circumstances show that he registered the subject parcel with evident bad faith. It is a fact that the Deed of Absolute Sale of Portion of Land and the Deed of Absolute Sale between GABINO, JR. and WILFREDO are of even date. Both Deeds had the same object Lot No. 1253-B. Both deeds were notarized by Atty. Warloo Cardenal and bear the same entry in his notarial register. The testimony of a disinterested witness, Febe Mabuhay, established the irregularity. Mabuhay used to work as secretary for Atty. Cardenal and co-signed as witness in both Deeds. She stated that Atty. Cardenal instructed her to prepare the two documents in the last week of November 1989. She was present when Gabino, Jr. signed the Deed of Absolute Sale. She testified that after Gabino, Jr. left, Loreto and his wife Francisca arrived and signed the Deed of Absolute Sale of Portion of Land. Credence is given to the testimony of Gabino, Jr. that Loreto and Wilfredo had employed the scheme to deprive him and his wife of their lawful title to the subject property. The facts speak for themselves. Wilfredo knew that he could not use the Deed of Absolute Sale executed in his favor by Gabino, Jr. because the latter had no title to transfer (kasi ung owners copy ng title over the lot ay nakay Loreto pa na ayaw ibigay despite demand by Gabino para ma-transfer na yung title sa pangalan niya). Without a title, Wilfredo could not use the subject property as collateral for a bank loan. Hence, Loreto, who had refused to surrender the title to Gabino, Jr. and in whose name the land remained registered, had to execute the Deed of Absolute Sale of Portion of Land in favor of Wilfredo. Hence, it was convenient for Wilfredo to deny the existence of the Deed of Absolute Sale of December 7, 1989 between him and Gabino, Jr. But the evidence on record shows that after he was able to register the subject property in his name on February 15, 1990, Wilfredo used the title as collateral in the loans that he contracted with the PNB and the DBP. This supports the claim of Gabino, Jr. that Wilfredo needed the lot for loaning purposes. With these corroborating circumstances and the following irrefragable documents on record, the evidence preponderates in favor of Gabino, Jr. He acquired Lot No.1253-B from Loreto on May 12, 1986 by virtue of the Deed of Absolute Sale. The Bureau of Internal Revenue issued a Certification, also on May 12, 1986, for the exemption from the payment of capital gains tax when Loreto sold to him the subject parcel. Gabino, Jr. paid the real estate tax on the subject parcel in 1987. He filed a Petition for the Surrender of Loretos title on July 31, 1987 so he could transfer the title of the property in his name. Petitioners likewise err in their argument that the contract of sale between Loreto and Gabino, Jr. is void on the ground that at the time of the sale on May 12, 1986, Loreto had a right to dispose only an aliquot part of the yet undivided property of Zoilo. The subject parcel, being an inherited property, is subject to the rules of co-ownership under the Civil Code. Loreto had a right, even before the partition of the property to transfer in whole or in part his undivided interest in the lot even without the consent of his co-heirs. This right is absolute in accordance with the well-settled

doctrine that a co-owner has full ownership of his pro-indiviso share and has the right to alienate, assign or mortgage it, and substitute another person for its enjoyment. Consequently, when Loreto purportedly sold to Wilfredo the same portion of the lot, he was no longer the owner. Based on the principle that no one can give what he does not have, Loreto did not have the right to transfer the ownership of the subject property at the time of sale. Petitioners contend that since the subdivision plan of Lot No. 1253 was only approved on January 19, 1987, the appellate court can not presume that the aliquot part of Loreto was the parcel designated as Lot 1253-B. Petitioners err. The mere fact that Loreto sold a definite portion of the co-owned lot by metes and bounds before partition does not, per se, render the sale a nullity. The fact that an agreement purported to sell a concrete portion of a co-owned property does not render the sale void, for it is wellestablished that the binding force of a contract must be recognized as far as it is legally possible to do so. The contract of sale between Loreto and Gabino, Jr. on May 12, 1986 could be legally recognized. At the time of sale, Loreto had an aliquot share of one-third of the 4,280square meter property or some 1,426 square meters but sold some 1,604 square meters to Gabino, Jr. If a co-owner sells more than his aliquot share in the property, the sale will affect only his share but not those of the other co-owners who did not consent to the sale. Be that as it may, the co-heirs of Loreto waived all their rights and interests over Lot No. 1253 in favor of Loreto in an Extrajudicial Settlement of Estate dated January 20, 1987. They declared that they have previously received their respective shares from the other estate of their parents. The rights of Gabino, Jr. as owner over Lot No. 1253-B are thus preserved. These rights were not effectively transferred by Loreto to Wilfredo in the Deed of Absolute Sale of Portion of Land. Nor were these rights alienated from Gabino, Jr. upon the issuance of the title to the subject property in the name of Wilfredo. Registration of property is not a means of acquiring ownership. Its alleged incontrovertibility cannot be successfully invoked by Wilfredo because certificates of title cannot be used to protect a usurper from the true owner or be used as a shield for the commission of fraud.

SPOUSES DE GUZMAN v. CA and QUIRIMIT Deogracias Queriza was the original owner of a parcel of unregistered residential land containing an area of 745 sq.m., more or less, situated at San Fabian, Pangasinan. On July 20, 1957, he executed a Deed of Pacto de Retro sale over said land in favor of his niece, Quirmit, for the sum of P 500.00, with the express stipulation that the "vendor a retro may exercise the right of repurchase within 5 years from the execution of these presents and upon failure to take advantage of the right herein granted him, then this contract shall acquire the character of absolute, irrevocable and consummated sale. Private respondent did not register the Deed of Pacto de Retro Sale, but took possession of the land by building her house on a portion thereof. It appears that subsequently, Deogracias Queriza mortgaged the same parcel of land to the Manaoag Rural Bank, from which it was allegedly redeemed on his behalf by his nephew Miguel Queriza on November 4, 1963. Supposedly for this reason, on April 26, 1967, Deogracias Queriza, without having exercised his right to repurchase under the Pacto de Retro Sale, executed over said parcel of land and two others, a Deed of

"Rimunitary Inter-vivos Donation in favor of Miguel Queriza, who thereafter declared the land in his name for taxation purposes and registered the Deed of Donation on August 8, 1967 in the Register of Deeds of Pangasinan. On December 8, 1970, Miguel Queriza sold the land to petitioners spouses de Guzman. The Deed of Sale was registered on December 9, 1970 and the tax declaration placed under their names. In January, 1971, petitioners sent private respondent written notice to vacate the land in question, and upon refusal by the latter to do so, instituted on a civil case for Quieting of Title and Recovery of Possession before the then CFI of Pangasinan. RTC: Declared petitioners owners of the land. It ruled that the Pacto de Retro Sale was only a mortgage and that the Deed of Donation in favor of Miguel Queriza was valid. CA: Reversed the decision of the trial court. Applying Article 1544 of the New Civil Code, the appellate court held that private respondent had a preferential right to the land as against petitioners who were purchasers in bad faith. It also found the transaction between Deogracias Queriza and private respondent to be what it purported to be a pacto de retro sale and not an equitable mortgage. ISSUE: WON the Spouses Guzman has a better right over the property. HELD: No. Although appellate court erred in applying Article 1544 of the New Civil Code relating to double sales to this case which involves an earlier pacto de retro sale of an unregistered land and the subsequent donation thereof by the vendor a retro, the transactions between Deogracias Queriza and private respondent was a pacto de retro sale and not a mortgage. The consideration of P500.00 paid by private respondent in 1957 was not unusually inadequate, considering that the land had an assessed value of only P380.00 at the time of Miguel Queriza's sale thereof to petitioners in 1971. Private respondent explained why she did not consolidate her ownership over the land in question - Deogracias told me not to worry because he has no child to question me. Ordinarily, such explanation would sound lame and flimsy. Considering however the close blood relationship between Deogracias Queriza and private respondent as well as the degree of trust and confidence traditionally accorded by Filipinos to their relatives, particularly in this case where private respondent had reason to rely on the words of Deogracias Queriza, the latter being a Notary Public, We find such explanation satisfactory. Ironically, the rule relied upon by petitioners that as between two innocent parties, he who was negligent should bear the loss, cannot apply to this case for the simple reason that it is petitioners themselves who cannot be considered innocent purchasers. When the sale was consummated in favor of appellee, appellant was actually residing in a house standing right on the land in question, and appellees were living not far from appellant. And even before appellees bought the land, appellant had already confronted them and informed them that the land had already been sold to her. Appellees were thus forewarned. Had appellees exercised due diligence in inquiring into the right or title of the appellant who was residing in the property they would doubtless have found out that

appellant was occupying it by virtue of the Pacto de Retro Sale, which apparently had become an absolute sale on July 20, 1962 by express provision thereof and the apparent failure of Deogracias Queriza to redeem the property. While the appellate court misapplied Article 1544 of the Civil Code in this case, its ultimate conclusion that private respondent should be declared owner of the land in question is correct. As stated earlier, the transaction between Deogracias Queriza and private respondent was a true pacto de retro sale. The essence of a pacto de retro sale is that title and ownership of the property sold are immediately vested in the vendee a retro, subject to the resolutory condition of repurchase by the vendor a retro within the stipulated period. Failure thus of the vendor a retro to perform said resolutory condition vests upon the vendee by operation of law absolute title and ownership over the property sold and failure of the vendee a retro to consolidate his title under Article 1607 of the Civil Code does not impair such title or ownership for the method prescribed thereunder is merely for the purpose of registering the consolidated title. In the case at bar, absolute ownership of the land in question was vested on private respondent in 1962 upon failure of Deogracias Queriza to repurchase said land. Thus, in 1967 when he allegedly donated the same to Miguel Queriza, he was no longer the owner thereof. There being no title to the property which Deogracias Queriza could convey to Miguel Queriza, it necessarily follows that no title to the property could be conveyed by the latter to petitioners. The registration of the deeds under which they claimed to have acquired ownership of the land in dispute was a useless ceremony. Registration does not vest title. It is not a mode of acquiring ownership but is merely evidence of such title over a particular property. Besides, petitioners' registration of their deed of sale was done in bad faith. The effect is that it is as if no registration was made at all in so far as private respondent is concerned.

Cruz vs. Cabaa 129 SCRA 656 FACTS: In June 1965, respondent Leodegaria Cabaa sold the subject property to respondent spouses Teofilo Legaspi and Iluminada Cabaa (spouses Legaspi) under their contract entitled Bilihang Muling Mabibili which stipulated that Cabaa can repurchase the land within one year from December 31, 1966. The said land was not repurchased, however, so the spouses Legaspi took possession of the said property. Later, Cabaa requested that the land title be lent to her in order to mortgage the property to the Philippine National Bank (PNB), to which the spouses Legaspi yielded. On October 21, 1968, Cabaa formally sold the land to spouses Legaspi by way of an absolute sale. The spouses Legaspi then attempted to register the deed of sale, but failed because they could not present the owner's duplicate of title which was still in the possession of the PNB as mortgage. Subsequently, they were able to register the document of sale on May 13, 1969 under Primary Entry No. 210113 of the Register of Deeds of Quezon Province. On November 29, 1968, Cabaa sold the same property to herein petitioner Abelardo Cruz (now deceased), who, in turn, tried to register the deed of sale on September 3, 1970. However, he was informed that Cabaa had already sold the property to the spouses Legaspi, so he was only able to register the land in his name on February 9, 1971. The CFI of Quezon Province declared the spouses Legaspi as the true and rightful

owners of the subject property and the land title that Cruz had acquired as null and void. The Court of Appeals affirmed said decision, but ordered Cabaa reimburse to Cruz's heirs the amounts of P2,352.50, which the late petitioner Abelardo Cruz paid to PNB to discharge the mortgage obligation of Cabaa in favor of said bank, and the amount of P3,397.50, representing the amount paid by said Abelardo Cruz to her as consideration of the sale with pacto de retro of the subject property. ISSUE: Who is the rightful owner of the subject property? COURT RULING: The Supreme Court affirmed the decision of the appellate court with modification ordering and sentencing respondent Leodegaria Cabaa to reimburse and pay to petitioner's heirs the total sum of P5,750.00. There is no question that spouses Legaspi were the first buyers, first on June 1, 1965 under a sale with right of repurchase and later on October 21, 1968 under a deed of absolute sale and that they had taken possession of the land sold to them; that Abelardo Cruz was the second buyer under a deed of sale dated November 29, 1968, which to ail indications, contrary to the text, was a sale with right of repurchase for ninety (90) days. There is no question, either, that spouses Legaspi were the first and the only ones to be in possession of the subject property. The knowledge of the first sale Abelardo Cruz had gained defeats his rights even if he is first to register the second sale, since such knowledge taints his prior registration with bad faith. This is the price exacted by Article 1544 of the Civil Code. Before the second buyer can obtain priority over the first, he must show that he acted in good faith throughout (i.e. in ignorance of the first sale and of the first buyer's rights) - from the time of acquisition until the title is transferred to him by registration or failing registration, by delivery of possession. The second buyer must show continuing good faith and innocence or lack of knowledge of the first sale until his contract ripens into full ownership through prior registration as provided by law."