ORTIGAS & COMPANY, LIMITED The case was heard on pre-trial but before it could be

PARTNERSHIP, Petitioner,  terminated, on January 23, 1996 Ortigas filed a motion to

vs. dismiss the case on the ground that the RTC had no
COURT OF APPEALS, HON. JESUS G. BERSAMIRA jurisdiction over it, such jurisdiction being in the Housing
as Judge-RTC of Pasig City, Branch 166 and the CITY and Land Use Regulatory Board (HLURB) for unsound
OF PASIG, Respondents. real estate business practices.

DECISION On April 15, 1996 the RTC denied the motion to

dismiss.1 It held that HLURB’s jurisdiction pertained to
ABAD, J.: disputes arising from transactions between buyers,
salesmen, and subdivision and condominium developers. In
this case, the City is a local government unit seeking to
This case resolves the question of jurisdiction of the enforce compliance with a municipal ordinance, an action
Regional Trial Court over a complaint filed against a that is not within the scope of the disputes cognizable by
subdivision owner. the HLURB. With the denial of its motion for
reconsideration on August 7, 1996, Ortigas filed a petition
The Facts and the Case for certiorari before the Court of Appeals (CA) to challenge
the RTC’s actions.
Petitioner Ortigas & Company, Limited Partnership
(Ortigas), a realty company, developed the Ortigas Center On February 18, 1997 the CA rendered judgment, affirming
that straddled the three cities of Mandaluyong, Quezon, and the RTC’s denial of the motion to dismiss.2 The appellate
Pasig. This case concerns the Pasig City side of the court ruled that the City sought compliance with a statutory
commercial district known as the Ortigas Center, known in obligation enacted "to promote the general welfare (Section
1969 as Capitol VI Subdivision. 16, Local Government Code) which invariably includes the
preservation of open spaces for recreational
In 1994 respondent City of Pasig (the City) filed a purposes."3 Since the City was not a buyer or one entitled to
complaint against Ortigas and Greenhills Properties, Inc. refund for the price paid for a lot, the dispute must fall
(GPI) for specific compliance before the Regional Trial under the jurisdiction of the RTC pursuant to Section 19 of
Court (RTC) of Pasig in Civil Case 64427. The City The Judiciary Reorganization Act of 1980.4
alleged that Ortigas failed to comply with Municipal
Ordinance 5, Series of 1966 (MO 5) which required it to The CA denied Ortigas’ motion for reconsideration on June
designate appropriate recreational and playground facilities 27, 1997, prompting it to file the present petition for
at its former Capitol VI Subdivision (regarded as a review.
residential site), now the Pasig City side of the Ortigas
Center. Further, the City alleged that despite the fact that The Issue Presented
the plan was only approved by the Municipal Council as to
layout, petitioner proceeded to develop the property
without securing a final approval. The sole issue in this case is whether or not the CA erred in
affirming the lower court’s ruling that jurisdiction over the
City’s action lies with the RTC, not with the HLURB.
The City impleaded GPI as the party to whom Ortigas sold
a piece of property within the subdivision.
The Court’s Ruling
In answer, Ortigas alleged that its development plan for the
subject land was for a commercial subdivision, outside the Ortigas maintains that the HLURB has jurisdiction over the
scope of MO 5 that applied only to residential subdivisions; complaint since a land developer's failure to comply with
that the City cannot assail the validity of that development its statutory obligation to provide open spaces constitutes
plan after its approval 25 years ago. Its development plan unsound real estate business practice that Presidential
had been approved: (1) by the Department of Justice Decree (P.D.) 1344 prohibits. Executive Order 648
through the Land Registration Commission on June 16, empowers the HLURB to hear and decide claims of
1969; (2) by the Municipal Council of Pasig under unsound real estate business practices against land
Resolution 128 dated May 27, 1969; and (3) by the Court developers.1âwphi1
of First Instance of Rizal, Branch 25 in its Order dated July
11, 1969. Ultimately, whether or not the HLURB has the authority to
hear and decide a case is determined by the nature of the
Ortigas further alleged that only in 1984, 15 years after the cause of action, the subject matter or property involved,
approval of its plan, that the National Housing Regulatory and the parties.5 Section 1 of P.D. 13446 vests in the
Commission imposed the open space requirement for HLURB the exclusive jurisdiction to hear and decide the
commercial subdivisions through its Rules and Regulations following cases:
for Commercial Subdivision and Commercial Subdivision
Development. (a) unsound real estate business practices;
 (b) claims involving refund and any other claims
filed by subdivision lot or condominium unit
buyer against the project owner, developer,
dealer, broker, or salesman; and

(c) cases involving specific performance of

contractual and statutory obligations filed by
buyers of subdivision lots or condominium units
against the owner, developer, dealer, broker or
salesman.

Unlike paragraphs (b) and (c) above, paragraph (a) does not
state which party can file a claim against an unsound real
estate business practice. But, in the context of the evident
objective of Section 1, it is implicit that the "unsound real
estate business practice" would, like the offended party in
paragraphs (b) and (c), be the buyers of lands involved in
development. The policy of the law is to curb unscrupulous
practices in real estate trade and business that prejudice
buyers.

This position is supported by the Court’s statement in

Delos Santos v. Sarmiento7 that not every case involving
buyers and sellers of subdivision lots or condominium units
can be filed with the HLURB. Its jurisdiction is limited to
those cases filed by the buyer or owner of a subdivision lot
or condominium unit and based on any of the causes of
action enumerated in Section 1 of P.D. 1344.

Obviously, the City had not bought a lot in the subject area
from Ortigas which would give it a right to seek HLURB
intervention in enforcing a local ordinance that regulates
the use of private land within its jurisdiction in the interest
of the general welfare. It has the right to bring such kind of
action but only before a court of general jurisdiction such
as the RTC.

WHEREFORE, the Court DISMISSES the petition,

AFFIRMS the Court of Appeals Decision in CA-G.R. SP
42270 dated February 18, 1997, and ORDERS the Regional
Trial Court of Pasig City, Branch 166, to hear and decide
the case before it with deliberate dispatch.

SO ORDERED

\\\\
G.O.A.L., INC., petitioner,  On appeal to the Office of the President Legal Affairs
vs. (OPLA) and subsequently to the Court of Appeals, the
COURT OF APPEALS, OFFICE OF THE decision rendered by the HLURB-OAALA was affirmed in
PRESIDENT LEGAL AFFAIRS, HOUSING AND toto. Petitioner's motion for reconsideration was denied.
LAND USE REGULATORY BOARD, RIZALINO Hence this petition.
SIMBILLO, WILLIAM ONG, HERMINIA MESINA,
SELFA MARTINEZ, FILOMENO TENG, RAFAEL Petitioner imputes error to the Court of Appeal in not
JAVIER, FERNANDO DEL MUNDO, MILDRED finding the true facts of the case that greatly affected its
PAREJA, REMEDIOS LASQUETE, GEORGE decision, and its decision being contrary to law.
CABIGAN and ARCADIO SAMPANG, respondents.
GOAL contends that the Court of Appeals failed to
appreciate the fact that the construction of the fifth floor
was with the written approval of public respondent HLURB
as required by Sec. 22 of P.D. 957 which provides —
BELLOSILLO, J.:
Sec. 22. Alteration of Plans. — No owner or
G.O.A.L., INC., (GOAL), in this petition for review developer shall change or alter the roads, open
on certiorari, seeks to set aside part of the decision of the spaces, infrastructures, facilities for public use
Court of Appeals dated 28 September and/or other form of subdivision development as
1994 1 which affirmed the decision of the Office of the contained in the approved subdivision plan and/or
President Legal Affairs (OPLA) that earlier likewise represented in its advertisements, without the
affirmed the decision of the Housing and Land Use permission of the Authority and the written
Regulatory Board (HLURB). Petitioner confines its petition conformity or consent of the duly organized
to the construction of the fifth floor of Gemin I homeowners association, or in the absence of the
Condominium and all works related thereto, including the latter, by majority of the lot buyers in the
issuance of title to private respondent Teng and providing subdivision (emphasis supplied).
free parking spaces for the condominium units.2
The above provision is clear. We do not have to tussle with
On 23 May 1983 GOAL and the National Housing legal hermeneutics in the interpretation of Sec. 22 of P.D.
Authority (NHA) entered into an agreement whereby NHA 957. The written approval of the National Housing
extended to GOAL a loan of P4.425 million for the Authority alone is not sufficient. It must be coupled with
construction of Gemin I Condominium at 941 Gonzales St., the written conformity or consent of the duly organized
Ermita, Manila. Sometime in 1984 a "Contract Agreement" homeowners association of the majority of the lot buyers.
was entered into between GOAL and Matson International Failing in this, the construction of the fifth floor is violative
Corporation for the construction of the condominium of the decree invoked. The Court of Appeals simply applied
within one (1) year at the cost of P4.2 million. However, in the law, and correctly so.
the later part of 1984, the contractor abandoned the project
with only 60% of it finished. In 1985 GOAL offered the Petitioner likewise contends that it should not have been
condominium units for sale with private respondents faulted for failing to deliver the title to private respondent
among its buyers. To remedy the situation brought about by Teng as the proximate cause thereof was the abandonment
the abandonment of the project by the first contractor, of the construction project by the first contractor, hence,
GOAL subsequently pursued the construction of the fifth due to force majeure.4
floor with NHA granting additional funding on the
condition that it would hold on to the condominium We cannot sustain petitioner. There is no one else to blame
certificates of title of private respondents. but itself. Upon full payment of the agreed price, petitioner
is mandated by law to deliver the title of the lot or unit to
In August 1989 private respondents filed with the Housing the buyer. Both the "Contract to Sell" of petitioner and
and Land Use Regulatory Board (HLURB), Office of private respondents, and Sec. 25 of P.D. 957 state —
Appeals, Adjudication and Legal Affairs (OAALA), a
complaint against GOAL. Among the issues raised were Sec. III (Contract to Sell). — Title and
the illegal construction of the fifth floor of Gemin I Ownership of Unit. Upon full payment by the
Condominium, the failure to deliver the title of private vendees of the full amount of the purchase price
respondent Filomeno Teng despite his repeated demands, stipulated under Sec. III hereof, the assessments
and the failure to provide adequate parking spaces for the and expenses under Sec. IV and otherwise upon
unit owners. compliance by the VENDEES of all obligations
therein, the VENDOR will convey to the
On 31 March 1989 OAALA rendered its decision ordering VENDEE all rights and interests of the former
GOAL, inter alia, (a) to stop the construction of the fifth and to the Unit, subject hereof together with the
floor, (b) to deliver the title of private respondent Teng, and interest in the common area in the Condominium
(c) to provide adequate parking space for the unit owners.3
 Corporation appurtenant to such life, liberty or property without due process of law."
unit . . . Petitioner alone does not own the parking area. The parking
space is owned in common by the developer and the unit
Sec. 25, P.D. 957 — Issuance of Title. — The owners. Private respondents must be allowed to use the
owner or developer shall deliver the title of the parking area.
lot or unit to the buyer upon full payment of the
lot or unit . . . In the event a mortgage over the lot Finally, petitioner contends that the payment of P10,000.00
or unit is outstanding at the time of the issuance as moral damages and P5,000.00 as exemplary damages
of the title to the buyer, the owner or developer plus P5,000.00 as attorney's fees is too much of a penalty.
shall redeem the mortgage or the corresponding However, the Court of Appeals upheld these awards
portion thereof within six months from such holding that —
issuance in order that the title over any paid lot or
unit may be secured and delivered to the buyer in In the light of the foregoing premises, we sense
accordance herewith. no error in the award of attorney's fees, moral and
exemplary damages, and administrative fine
Petitioner also attempts to justify its failure to deliver the against petitioner. This is allowed by the
certificate of title of private respondent Teng by claiming provisions of civil law and under Secs. 38 and 39
that it used the title as part collateral for the additional loan of P.D. 957:
NHA had extended for the construction of the fifth floor.
Sec. 38. Administrative Fines — The Authority
The Court observes the frequent allusion of petitioner to its may prescribe and impose fines not exceeding ten
predicament brought about by the abandonment of the thousand pesos for violations of the provisions of
project by the first contractor. But such is irrelevant in light this Decree or any rule or regulation thereunder.
of Sec. 25 of P.D. 957 as well as the Contract to Sell of the Fines shall be payable to the Authority and
parties. While we empathize with petitioner in its financial enforceable through writs of execution in
dilemma we cannot make innocent parties suffer the accordance with the provisions of the Rules of
consequences of the former's lack of business acumen. Court.
Upon full payment of a unit, petitioner loses all its right and
interests to the unit in favor of the buyer. Consequently, it Sec. 39. Penalties — Any person who shall
has no right to use the certificate of title of respondent Teng violate any of the provisions of this Decree
as collateral for a new loan. The title of Teng must be and/or any rule or regulation that may be issued
released to him as provided by law. pursuant to this Decree shall, upon conviction, be
punished by a fine of not more than twenty
With respect to the second issue, petitioner contends that thousand (P20,000.00) pesos and/or
the decision of the Court of Appeals is contrary to law imprisonment of not more than ten
considering that under Sec. 12-D, No. 2, Rule V of the years: Provided, that in the case of corporations,
Implementing Rules of P.D. 957, what should be given for partnership, cooperatives, or associations, the
free are only "off-street" parking spaces and not indoor President, manager, or Administrator or the
parking areas. person who has charge of the administration of
the business shall be criminally responsible for
Petitioner is wrong. It has for purposes of its own construed any violation of this Decree and/or the rules and
"off-street" to mean "not including indoor." On the other regulations promulgated pursuant thereto.6
hand, the law does not exclude "indoor parking." What it
specifically excludes is "street parking." Therefore, parking Petitioner can hardly be excused for its failure to comply
may be in the basement or, in the absence thereof, in the with the provisions of P.D. 957 by claiming ignorance of
first floor. the requirements of the decree and that a "mistake upon a
doubtful or difficult question of law may be the basis of
Furthermore, at this point, a definition of terms may be good faith." Being engaged in a business affected by P.D.
necessary. In a condominium, common areas and facilities 957, petitioner should be aware of its provisions and its
are "portions of the condominium property not included in mandates which, as can be readily perceived, are clear,
the units," whereas, a unit is "a part of the condominium simple and unmistakable.7
property which is to be subject to private
ownership."5 Inversely, that which is not considered a unit WHEREFORE, finding no error in the Decision sought to
should fall under common areas and facilities. be reviewed, the petition is DENIED. Costs against
petitioner.
Hence, the parking spaces not being subject to private
ownership form part of the common area over which the SO ORDERED
condominium unit owners hold undivided interest. As such,
petitioner cannot invoke Sec. I, Art. III, of the Bill of
Rights which provides that "No person shall be deprived of
GOLD LOOP PROPERTIES, INC. and EMMANUEL HUNDRED EIGHTY FOUR THOUSAND
R. ZAPANTA, petitioners,  THREE HUNDRED SEVENTY FIVE
vs. (P2,484,375.00) Pesos, Philippine Currency,
THE COURT OF APPEALS, BHAVNA HARILELA payable as follows:
SADHWANI and RAMESH J. SADHWANI,
represented by their attorney-in-fact PURSHUTAM
DIALANI, respondents. Amount Due Date

Downpayment of 35% P869,531.25  

PARDO, J.:
Less: Reservation 50,000.00 July 16, 1988
The case before the Court is an appeal via certiorari from
the decision1 of the Court of Appeals dismissing the Net Downpayment 819,531.25 Oct. 21, 1988
petition for certiorari assailing the decision of the Senior
Deputy Executive Secretary, Office of the President Balance Payable P1,614,843.80  
sustaining the ruling of the Housing Land Use and
Regulatory Board of Commissioners requiring petitioners
to furnish private respondents with copy of the contract to
sell and to accept the balance of the purchase price of a
condominium unit. thru the bank designated by the SELLER and
subject to standard banking requisites and
On July 16, 1988, private respondents Bhavna Harilela and approval.
Ramesh Sadhwani (hereinafter referred to as "Sadhwanis")
submitted through St. Martin Realty Corporation, a realtor "NOTE: In the event of non-approval of the loan
agent of petitioner Gold Loop Properties, Inc. (hereinafter by the bank, the BUYER commits to adopt the
referred to as "GLPI"), a signed pro forma reservation "Co-Terminus Payment Plan" retroactive to the
application addressed to GLPI for the purchase of one (1) date of scheduled downpayment as reflected
condominium unit at Gold Loop Towers residential above. This plan requires the payment of non-
complex, located in Ortigas Complex, Pasig. One of the interest bearing equal monthly installments
terms of the reservation was the execution of a contract to spreads on the full balance of the purchase price
sell once the downpayment was paid in full. Upon commencing 30 days after the scheduled
submission of the reservation, the Sadhwanis issued a downpayment up to January 1990."3
check for P50,000.00 to cover the reservation fees to
Josephine Flores Guina, agent of St. Martin Realty who
issued a receipt to them.1âwphi1.nêt GLPI informed the Sadhwanis that the bank loan
accommodation which was to serve as payment of the
balance of the purchase price was disapproved, and thus,
On November 18, 1988, the Sadhwanis paid GLPI the per the terms of the Contract to Sell, the balance would
amount of P819,531.25. Subsequently, Bhavna Harilela become payable through the Co-terminus Payment Plan
signed a "Contract To Sell"2 with GLPI, represented by its schedule of payments, in implementation of which
President Emmanuel Zapanta. Ms. Guina assured them that petitioners were informed by letter4 dated March 15, 1989,
they would be furnished with a copy of the contract after its which pertinently reads:
notarization, and that the amount, representing the balance
of the purchase price, would be included in a loan
application with a bank. However, the contract to sell was "Despite diligent efforts and ardent
not notarized, as the private respondents were not able to representations on our part to have the approval
supply GLPI with a copy of their passports. of the loan in accordance with the Contract, such
approval could not be obtained for the reason that
banks are not willing to extend a loan to be
Under the contract, GLPI agreed to sell to Sadhwanis a secured by a still ongoing project. Accordingly,
198.75 square meters condominium unit particularly Unit the balance of the purchase price should now be
R-84 of Southwest Tower. The contract price was paid in equal monthly installments until January
P2,484,375.00, inclusive of a reservation deposit of 1990 pursuant to the aforequoted provision. The
P50,000.00. schedule of these payments in implementation of
this ‘Co-Terminus Payment Plan’ should be as
The Contract to Sell, Section 3, provides: follows:

"Section 3. PURCHASE PRICE AND TERMS

OF PAYMENT. "Date of Payment Amount

March 20, 1989 (Covering the period from Nov. 21, P538,281.25
"(a) The purchase price of the UNIT, exclusive of1989 to March 21, 1989)
interest shall be TWO MILLION FOUR
 April 20, 1989 198.75107,626.25
sq. m. @ P14,500.00 per sq. m. = P2,881,875.00

May 20, 1989 Less: Balance

107,626.25 = 1,614,843.75

June 20, 1989 107,626.25   P1,267,031.25

July 20, 1989 Less: Interest

107,626.25
for delayed Amortization = 8,074.22

August 20, 1989 Net cash

107,626.25
involved payable in 6 months = P1,258,957.03"

September 20, 1989 107,626.25

October 20, 1989 107,626.25

Petitioners rejected the offer on the resale of the rights over
November 20, 1989 107,626.25the condominium unit proposed by private respondents
because the offer was unreasonable, unfair and inequitable.
December 20, 1989 107,626.25
On March 19 and April 25, 1989, respondent Ramesh J.
January 20, 1989 107,626.25
Sadhwani demanded a copy of the contract to sell, noting
that his wife had no official document to show that she
"TOTAL P1,614,843.80"
bought a condominium unit from GLPI and there were
conditions and/or stipulations in the contract which she
could not be expected to comply with, unless a copy of the
same be given to her. By letter dated May 22, 1989 to
GLPI, respondent Sadhwani’s counsel made a formal
By letter5 dated March 16, 1989, addressed to GLPI, the demand for the delivery to him of a copy of the contract to
Sadhwanis offered to resell their rights to the condominium sell.
unit they purchased. The letter contained proposals which
read:
Spouses Sadhwanis failed to pay any of the monthly
amortizations in the payment plan.
"Per our verbal agreement, this comes to
formalize the earnest intention of my clients,
Spouses Ramesh and Anita Sadhwani, to sell On August 7, 1989, petitioners sent a letter demanding
their rights over Unit R-84 of the Gold Loop payment of the balance amounting to P1,614,814.80, and
Towers, under the following terms and informed the Sadhwanis that GLPI will rescind the
conditions: Contract to Sell and automatically forfeit their down
payment should they fail to pay within five (5) days from
receipt of the letter in accordance with section 8 of the
"ACQUISITION:     contract to sell.5

198.75 SQ. M. @ 12,500 PER SQ. M. = P2,484,375.00

On August 14, 1990, spouses Sadhwanis filed with the
Housing and Land Use Regulatory Board (hereinafter
Less: 35% downpayment paid 11-15-88   referred to as "HLURB"), a complaint for specific
performance with an alternative prayer for refund against
Balance = 1,614,843.75
GLPI. Spouses Sadhwanis prayed that they be furnished
with a copy of the contract to sell and allowed them to
Monthly amortization payable in = remit the balance of the consideration to GLPI and to
deliver to them the title and possession of the condominium
18 months starting December 1988 until May 1990 @ 3% = unit, or to be reimbursed of the amount they paid with
penalty for delayed amortization interest and damages.6

Penalty per month = On October 8, 1990, petitioners filed with the HLURB an
answer to the complaint and subsequently, the parties
    submitted their position papers.
"Total Penalty =
On October 2, 1992, HLURB Arbiter Roberto F. Paras
    rendered a decision, the dispositive portion of which
provides:
"RE-SALE:
 "WHEREFORE, premises considered, judgment days from receipt hereof while respondents are
is hereby rendered: ordered to accept said payment and turn over to
complainants the unit subject of said contract to
"1. Ordering respondents Gold Loop sell.
Properties, Inc. and St. Martin to
furnish complainants with a copy of the "All other aspects of the decision is hereby
subject Contract to Sell and to accept AFFIRMED IN TOTO.
complainant’s payment of the agreed
purchase price balance of the "SO ORDERED."9
Condominium unit described in the
said contract to Sell;
On January 7, 1994, petitioners elevated the case to the
Office of the President.
"2. Ordering said respondents to deliver
possession of and to effect the transfer
of title to the subject condominium unit On August 24, 1994, Senior Deputy Executive Secretary
in favor of the complainants after full Leonardo A. Quisumbing10 rendered a decision11dismissing
payment of the purchase price; petitioners’ appeal. He also denied petitioners’ motion for
reconsideration12 in a Resolution13 dated December 22,
1994.
"In the event compliance with the
above dispositive portion is no longer
possible, respondents instead are On March 22, 1995, petitioners filed with the Supreme
hereby ordered to jointly and severally Court a special civil action for certiorari assailing the
reimburse complainants the amount of decision of the Senior Deputy Executive Secretary, Office
Eight Hundred Seventy Eight Thousand of the President. In a resolution dated April 4, 1995, the
Three Hundred Sixty Six Pesos and Court referred the case to the Court of Appeals for proper
Thirty Five Centavos (P878,366.35) disposition.13
representing complainants’ reservation
deposit and downpayment, with legal On June 22, 1995, the Court of Appeals promulgated its
interest from the time of the filing of decision dismissing the petition.14 The court ruled that the
this complaint; failure of petitioners to give respondents a copy of the
contract to sell sued upon, despite repeated demands
"3. Ordering respondents jointly and therefor, and notwithstanding the payment of P878,366.35,
severally to pay complainants (a) moral was a valid ground for private respondents to suspend their
damages in the amount of Ten payments. And given the fact that the contract to sell was in
Thousand Pesos (P10,000.00), and (b) writing, the Sadhwanis, as buyers, were entitled to a copy.
attorney'’ fees in the amount of Thirty Their request for a copy sprung from their desire to comply
Thousand Pesos (P30,000.00); with what was incumbent upon them to perform
thereunder. While buyers do not need a copy of the contract
to know the stipulated purchase price, the schedule of
"4. Dismissing respondents’ payments and the outstanding balance, the contract to sell,
counterclaim for lack of merit. being an eight pages single-spaced document, broken down
into twelve sections, spelling out the parties’ respective
"IT IS SO ORDERED."7 monetary and non-monetary rights and obligations, the
buyers could not be expected to recall each and every detail
On November 16, 1992, petitioners appealed to the of the stipulations of the contract without a copy of the
HLURB Board of Commissioners, Quezon City while contract to guide them.
private respondents interposed a partial appeal thereto.
On July 14, 1995, petitioners filed with the Court of
On October 11, 1993, the HLURB Board of Appeals a motion for reconsideration.16 However, the court
Commissioners rendered a decision, the dispositive portion denied the motion.17
of which reads:
Hence, this petition.18
"WHEREFORE, premises considered,
respondents’ appeal is hereby DENIED and Petitioners contend that private respondents are not entitled
complainants’ Partial Appeal is hereby given due to suspend payment of their monthly amortizations because
course and the Decision subject of this Appeal is of the alleged failure of petitioners to furnish them copy of
hereby MODIFIED by DELETING the second the contract to sell and that private respondents used the
paragraph of order number two. Accordingly, alleged failure to give them copy of the contract as an
complainants are directed to pay the balance of excuse for defaulting in their contractual obligation to pay
the purchase price, without interest, within 30 the installments. Petitioners insist that private respondents
were given copy of the contract to sell. Petitioners pointed The private respondents are entitled to a copy of the
out that under the contract, they had the right to rescind the contract to sell, otherwise they would not be informed of
contract in case private respondents breached the contract. their rights and obligations under the contract. When the
Sadhwanis parted with P878,366.35 or more than one third
In their Comment19 and Memorandum,20 private of the purchase price for the condominium unit, the
respondents alleged that they have not in fact received a contract to sell, or what it represents is concrete proof of
copy of the contract to sell. Private respondents likewise the purchase and sale of the condominium unit.
averred that petitioners’ assertion is premised on its
completely wrong proposition that private respondents had WHEREFORE, the Court hereby DENIES the petition for
given petitioners a reason to rescind the contract to sell. review on certiorari, for lack of merit. The
What was really in issue was that it was petitioners that Court AFFIRMSthe decision of the Court of Appeals in
gave them sufficient and well-founded cause to suspend CA-G. R. SP No. 36977 affirming the order for delivery of
payment of their monthly amortizations on the a copy of the contract to sell to private respondents and to
condominium unit. accept payment of the balance of the purchase price and
deliver title over the condominium unit to the private
We agree with private respondents. respondents upon full payment of the balance of the
purchase price.1âwphi1.nêt
The core issue actually boils down to the question of
whether or not respondents may suspend payment of their No costs.
monthly amortizations due to failure of petitioners to
furnish them copy of the contract to sell. SO ORDERED

Time and again, the Court had occasion to reiterate the

well-established rule that findings of fact of the Court of
Appeals are conclusive on the parties and are not generally
reviewable by this Court.21 We find no compelling reason
to disturb the factual findings of the Court of Appeals, in
the absence of showing that the present case falls within the
exceptions to this rule.22 When supported by sufficient
evidence, the findings of fact of the Court of Appeals
affirming those of the trial court, are not to be disturbed on
appeal. The rationale behind this doctrine is that review of
the findings of fact of the Court of Appeals is not a function
that the Supreme Court normally undertakes. In the case at
bar, we subscribe to the findings of fact of the Court of
Appeals when it held that:

"x x x Private respondents were indeed justified

in suspending payment of their monthly
amortizations. The failure of petitioners to give
them a copy of the Contract to Sell sued upon,
despite repeated demands therefor, and
notwithstanding the private respondents’ payment
of P878,366.35 for the subject condominium unit
was a valid ground for private respondents to
suspend their payments. x x x

xxx

"And contrary to petitioner’s stance, records

disclose that they were the ones who did
fraudulent acts against private respondents by
entering into a Contract to Sell with the latter and
accepting their downpayment of P878,366.35,
withholding a copy thereof for no valid reason at
all, and then threatening them with rescission and
forfeiture, when private respondents only
suspended payment of the balance of the
purchase price while waiting for their copy of the
Contract to Sell."23
GREGORIO DE VERA, JR., petitioner,  payment by QPSDCI to bring the total payment to
vs. P184,040.00.
COURT OF APPEALS, Q. P. SAN DIEGO
CONSTRUCTION, INC., ASIATRUST Pursuant to their Condominium Reservation Agreement,
DEVELOPMENT BANK, SECOND LAGUNA petitioner submitted through FIL-ESTATE his application
DEVELOPMENT BANK, CAPITOL CITY for the Pag-IBIG loan. On 28 December 1983
DEVELOPMENT BANK, EX-OFFICIO SHERIFF OF ASIATRUST as originating bank notified FIL-ESTATE
QUEZON CITY and/or HIS DEPUTY, respondents. that petitioner's Pag-IBIG loan application had been
approved.4 In a letter dated 18 January 1984 QPSDCI
BELLOSILLO, J.: President Quintin P. San Diego forwarded the letter to
petitioner. However, the amount approved was only
This is a Petition for Review, under Rule 45 of the Revised P139,100.00 and not P160,000.00. Additional charges
Rules of Court, of the Decision of the Court of Appeals in further reduced the amount to P117,043.33.
CA-G.R. CV No. 37281, "Gregorio de Vera, Jr. v. Court of
Appeals, QP San Diego Construction, Inc., Asiatrust Petitioner De Vera Jr. approached QPSDCI to have the
Development Bank, Second Laguna Development Bank, P12,040.00 discount credited to his additional equity. Since
Capitol City Development Bank, Ex-Officio Sheriff of the resultant net loan of P117,043.33 was insufficient to
Quezon City and/or his Deputy," and of its Resolution of 18 cover the balance of the purchase price, De Vera Jr.
February 1998 denying petitioner's Manifestation with negotiated with QPSDCI to defer payment of the
Motion for Reconsideration. P23,916.67 deficiency until the project was completed and
the unit was ready for turnover. QPSDCI agreed.5
Respondent Q. P. San Diego Construction, Inc. (QPSDCI),
owned a parcel of land located at 101 Panay Avenue, The condominium project was substantially completed in
Quezon City, on which it built Lourdes I Condominium. On June 1984 and the unit was turned over to De Vera Jr. the
10 June 1983, to finance its construction and development, following month. Accordingly, petitioner paid QPSDCI the
QPSDCI entered into a Syndicate Loan Agreement1 with P23,916.67 shortfall between the balance and the granted
respondents Asiatrust Development Bank (ASIATRUST) loan.
as lead bank, and Second Laguna Development Bank
(LAGUNA) and Capitol City Development Bank On 26 June 1984 ASIATRUST through its Vice-President
(CAPITOL) as participating banks (hereafter collectively Pedro V. Lucero and Manager Nicanor T. Villanueva wrote
known as FUNDERS). QPSDCI mortgaged to the creditor to QPSDCI asking the unit buyers to pay in advance the
banks as security the herein mentioned Panay Avenue costs of the transfer of titles and registration of their Pag-
property and the condominium constructed thereon. The IBIG loan mortgages.6 QPSDCI forwarded the letter to De
mortgage deed was registered with the Register of Deeds of Vera Jr. and requested that he pay the amount to
Quezon City and annotated on the individual condominium QPSDCI.7 As ASIATRUST indicated that the amount be
certificates of title (CCT) of each condominium unit.2 paid directly to it, De Vera Jr. went to the bank for
clarification. On 23 August 1983, after learning that
On 23 June 1983 petitioner Gregorio de Vera Jr. and ASIATRUST was in possession of the certificate of title,
QPSDCI, through its authorized agent Fil-Estate Realty De Vera Jr. paid the transfer expenses directly to
Corporation (FIL-ESTATE), entered into a Condominium ASIATRUST.
Reservation Agreement3 where petitioner undertook to buy
Unit 211-2C of the condominium for P325,000.00 under On 17 September 1984 ASIATRUST sent another notice of
the following agreed terms of payment: (a) an option approval8 to QPSDCI and De Vera Jr. with the notation,
money of P5,000.00 payable upon signing of the agreement "additional equity of all accounts have (sic) to be paid
to form part of the purchase price; (b) a full downpayment directly to the Bank."
of P175,675.00 broken down into the reservation fee of
P5,000.00 and three (3) equal monthly installments payable
beginning the month after the signing of the contract; and, On 3 October 1984 ASIATRUST wrote another
(c) the remaining balance of P160,000.00 to be secured letter9 asking QPSDCI to advise the unit buyers, among
through petitioner's Pag-IBIG and Open-Housing Loan. others, to pay all additional and remaining equities on 10
Pending release of the loan, petitioner was to avail of a October 1984; that their Pag-IBIG loan mortgages would
bridge financing loan with ASIATRUST or any accredited be registered only upon payment of those equities; and, that
originating bank of the Pag-IBIG program. loan mortgages registered after 31 October 1984 would be
subject to the increased Pag-IBIG interest rates.
On 2 June 1983 petitioner paid the reservation fee of
P5,000.00, and on 11 July 1983 the balance of the On 12 October 1984 ASIATRUST also wrote a letter to
downpayment of P167,000.00, thus completing the petitioner and signed by its Assistant Manager Leticia R. de
downpayment of P175,675.00 well before the due date. As la Cruz informing him that his housing loan would only be
incentive, petitioner was given a full discount on cash implemented upon the following conditions: (a) Payment of
the remaining equity directly to ASIATRUST Development
Bank; and (b) Signing of all Pag-IBIG documents not later
than 20 October 1984, so his mortgages could be registered On 20 May 1988 petitioner, upon discovering that the
on or before 31 October 1984. Mortgages registered FUNDERS had already published a notice14 of extrajudicial
beyond said date shall subject the Pag-IBIG loan to the foreclosure of the mortgage, filed a complaint against
increased interest rates of the National Home Mortgage respondents for damages and injunction with urgent prayer
Finance Corp. (per Circular #27 dated June 21, 1984). for issuance of a writ of preliminary injunction, annulment
of mortgage based on fraud, with urgent prayer for the
According to petitioner, the letter came as a total surprise to issuance of a writ of preliminary attachment and specific
him; all the while he thought that his loan had already been performance. The complaint was docketed as Civil Case
released to QPSDCI and the titles transferred to his name; No. Q-53737 and subsequently raffled to Branch 107 of the
he promptly wrote ASIATRUST to seek clarification; Regional Trial Court of Quezon City.
ASIATRUST responded by informing De Vera Jr. that the
developmental loan agreement between QPSDCI and the Meanwhile, QPSDCI failed to pay its obligations to the
three (3) banks, under which the individual titles of the FUNDERS. On 23 May 1988 ASIATRUST extrajudicially
condominium units were mortgaged in favor of the foreclosed the mortgage on twenty-seven (27)
FUNDERS to secure the loan, shall be paid out of the net condominium units, including that of petitioner De Vera Jr.
proceeds of the Pag-IBIG loans of the buyers; that the total The units were sold at public auction, with the FUNDERS
amount of loan from the FUNDERS was distributed among as the highest bidder. The certificate of sale was issued and
all condominium units such that each unit had to bear a annotated on the CCTs.
certain portion of the total loan, or a "loan value;" that per
agreement with QPSDCI, ASIATRUST would only grant On 3 March 1992 the trial court rendered judgment
the Pag-IBIG-Housing Loan with the release of the "directing the defendants (herein respondents) to pay to the
mortgage liens, which could not be released unless the plaintiff (herein petitioner) jointly and severally the sum
buyers fully paid their respective loan values; and that equivalent to the penalties and charges plus whatever
petitioner's equity payments to QPSDCI had not been amount may be necessary to redeem Unit 211-2C from any
remitted to the bank. lien and encumbrances so that the title may be released and
delivered to the plaintiff, free from any lien and
On 30 May 1985 ASIATRUST informed QPSDCI that it encumbrances, subject only to the deduction of his unpaid
could no longer extend the bridge financing loan to some of balance of P139,000.00, which the plaintiff should pay out
the buyers, including petitioner, for various of his own funds, plus exemplary damages of P100,000.00
reasons,10 among which was that petitioner had already each and to pay plaintiff attorney's fees jointly and
exceeded the age limit, hence, he was disqualified.11 severally x x x P50,000.00 plus the expenses of litigation."
The lower court denied plaintiff's prayer for moral damages
After learning of the disapproval of his loan, petitioner and dismissed defendants' counterclaim against the plaintiff
wrote the president of QPSDCI to make arrangements to and cross-claims against each other.15
settle his balance. Since petitioner had already invested a
substantial amount in remodelling and improving his unit, The Court of Appeals affirmed the decision of the trial
rescinding the sale was no longer a viable option. court with the modification that respondents were ordered
Consequently, he only asked the president of QPSDCI for solidarily to pay petitioner P50,000.00 as nominal damages,
some assurance that the title would be turned over to him but the award for actual and exemplary damages was
upon full payment. deleted.

In response, QPSDCI suggested that petitioner deal directly On 9 July 1997 petitioner filed a "Compliance with
with ASIATRUST for any matter regarding the sale of the Manifestation and Motion for Extension of Time to File
unit.12 President San Diego explained that "as far as we are Motion for Reconsideration" alleging that he received the
concerned we have sold to you our property at a certain decision of the Court of Appeals on 4 July 1997 and
price and we have correspondingly issued to your goodself, requesting a thirty (30)-day extension within which to file a
thru the Bank, a Deed of Absolute Sale for the unit we sold motion for reconsideration. The motion was denied by
to you taking into consideration that the Bank has approved respondent appellate court.
your loan per their advice dated December 28, 1983 and
presumably credited us for the approved amount of loan." On 8 August 1997 petitioner filed a "Manifestation with
Motion for Reconsideration," and on 6 February 1998 a
As petitioner failed to obtain the housing loan, he was not "Compliance with Motion to Resolve Manifestation with
able to pay the balance of the purchase price. QPSDCI sent Motion for Reconsideration," with respondent court.
him a letter13 dated 6 August 1987 presenting him with two Reckoning the deadline of the period to file a motion for
options: (a) to pay the remaining balance of the purchase reconsideration at 19 July 1997, the Court of Appeals
price, with interest, which had already ballooned to denied petitioner's Motion for Reconsideration for having
P263,751.63, on or before 15 August 1987; or, (b) to pay been filed out of time. Hence, the instant petition for review
rent for the use of the unit from 28 July 1984 to June 1987. on certiorari.
Petitioner assails the 18 February 1998 Resolution denying x x x it (QPSDCI) has not exerted any reasonable
his Motion for Reconsideration, asserting that the Court of diligence or effort to procure the issuance of the
Appeals should not have denied his motion on mere title to the plaintiff. All that it did was to refer the
technicality. Petitioner claims that his counsel was not plaintiff to the Funder(s), alleging that he
notified of the Court of Appeals' decision. The Notice of (plaintiff) should transact business with them as
Judgment16 of the decision of the Court of Appeals shows the matter of loan is between the plaintiff and the
that the same was served on petitioner Gregorio de Vera Funder(s), and they had nothing to do with it.
himself and not on his counsel. Petitioner asserts that However, it collected the additional equity and
service to a party is allowed only if the party is not never forwarded the same to the Funder(s) nor
represented by counsel. But if he is represented by a informed the latter of plaintiff's payment thereof.
counsel, then service shall be made upon his counsel unless Thus, to the mind of Asiatrust, plaintiff never
service upon the party himself is ordered by the court. paid the additional equity, although per records of
Unless so ordered, service on the party himself who is the Seller, he already had.
represented by counsel is not notice in law, hence, invalid.17
All these show negligence on the part of the
Furthermore, justice will be better served by entertaining Seller to perform its obligations under the
this petition than by dismissing it outright. It is always in contract — to the detriment of the plaintiff, for
the power of this Court to suspend its own rules, or to which it should be liable for damages under Art.
except a particular case from its operation, whenever the 2201 of the Civil Code, for the natural and
purposes of justice require it.18 probable consequences of the breach of the
obligation which the parties, specially the Seller,
The trial court found that petitioner's failure to pay the should have foreseen or could have reasonably
balance of the price of Unit 211-2C was not his fault. It foreseen at the time the obligation was
also found that petitioner was a real party in interest to contracted.
annul the loan agreement between QPSDCI and the
FUNDERS, and that he had priority in right to the unit over As to respondent ASIATRUST, the trial court held that its
the FUNDERS. The trial court rejected QPSDCI's failure to notify petitioner of the required steps to be taken
counterclaim against petitioner for rentals and sustained after the approval of the loan, of the requirement that
petitioner's claim for damages against private respondents. additional equity be paid directly to the bank and other
important aspects of the bridging loan, made it liable for
The Court of Appeals ruled that the regular courts had no damages under the general provisions on torts under Art.
jurisdiction over the subject matter of the case, the proper 2176 of the Civil Code, in relation to Art. 2202.
venue being the Housing and Land Use Regulatory Board
(HLURB). However, respondents were estopped from In deleting the award for damages, the respondent Court of
questioning jurisdiction because they filed counterclaims in Appeals explained —
the lower court.
As earlier found, QPSDCI failed to comply with
As to the issue of who had superior right over the Unit 211- its warranties as seller. Unfortunately, plaintiff-
2C, the Court of Appeals ruled in favor of petitioner, appellee posits the propriety of the award of
holding that the mortgage in favor of ASIATRUST, which actual damages only in the probable sense: that
was the basis for its title, did not bind petitioner inasmuch such award is to the amount of interests, penalties
as the same was not registered with the National Housing and other charges as plaintiff may stand liable for
Authority (NHA), contrary to the mandate of Sec. 18 of PD by reason of the non-payment of the purchase
957, or "The Subdivision and Condominium Buyers' price. In other words, plaintiff-appellee admits
Protective Decree.''19 The appellate court further found that not having suffered damages in consequence of
QPSDCI breached its warranties as seller under Art. 1547, non-compliance of seller's warranties. Since
and also violated its obligation to deliver to petitioner a actual damages are predicated on such pecuniary
clean title as required by Sec. 4 of PD 957. It declared that loss as duly proved, the award of the lower court
delivery of the unit to petitioner operated to transfer therefor is plainly not in order x x x (citations
ownership to him from QPSDCI. omitted).

Respondents did not appeal. Petitioner contests the decision We agree with the respondent Court of Appeals on this
of the Court of Appeals only insofar as it deleted the award point. Petitioner did not present any proof that he suffered
of actual and exemplary damages and attorney's fees. The any damage as a result of the breach of seller's warranty.
only issue to be addressed by this Court therefore is the He did not lose possession of his condominium unit,
propriety of the award of damages in favor of petitioner. although the same had not yet been registered in his name.
In his Consolidated Reply, petitioner came up with this
In finding QPSDCI liable for damages, the trial court held feeble argument for claiming actual damages, a rehash of
— his motion for reconsideration with the Court of Appeals —
 Petitioner reiterates that the compensatory that the title over any fully paid lot or unit may be
damages awarded is to the amount of interests, secured and delivered to the buyer in accordance
penalties and other charges as (he) may stand herewith.
liable for by reason of the non-payment of the
balance of the purchase price of Unit #211 in From the foregoing it is clear that upon full payment, the
consequence of the respondent's fault or seller is duty-bound to deliver the title of the unit to the
negligence as evidenced by Exhs. S and S-1. The buyer. Even with a valid mortgage over the lot, the seller is
compensation is the same amount as whatever the still bound to redeem said mortgage without any cost to the
liability may be and therefore merely offsets the buyer apart from the balance of the purchase price and
liability x x x x registration fees. It has been established that respondent
QPSDCI had been negligent in failing to remit petitioner's
The cost of clearing the CCT of liens and payments to ASIATRUST. If QPSDCI had not been
encumbrances and transferring it to the name of negligent, then even the possibility of charges, liens or
the petitioner are also part of the actual or penalties would not have arisen. Therefore, as between
compensatory damages and are its own proof. QPSDCI and petitioner, the former should be held liable for
any charge, lien or penalty that may arise. However, it was
Article 2199 of the Civil Code provides that one is entitled error for the trial court to remedy the situation in the form
to adequate compensation only for such pecuniary loss of an award for damages because, as discussed earlier, the
suffered by him as is "duly proved."20 This provision denies basis for the same does not appear indubitable.
the grant of speculative damages, or such damage not
actually proved to have existed and to have been caused to Part of the confusion lies in the deficiency of the trial
the party claiming the same.21 Actual damages, to be court's decision. It had found that petitioner had superior
recoverable, must not only be capable of proof, but must right to the unit over the FUNDERS and the mortgage in
actually be proved with reasonable degree of certainty. favor of the FUNDERS was contrary to Condominium
Courts cannot simply rely on speculation, conjecture or laws. Therefore, the proper remedy was to annul the
guesswork in determining the fact and amount of mortgage foreclosure sale and the CCT issued in favor of
damages.22 ASIATRUST, and not merely decree an award for
damages. We held in Union Bank of the Philippines v.
This does not mean however that petitioner is liable to HLURB —23
private respondents for penalties, interests and other
charges that accrued by reason of non-payment of the Clearly, FRDC's act of mortgaging the
balance of the purchase price. Respondent ASIATRUST condominium project to Bancom and FEBTC,
had made several representations to petitioner that his loan without the knowledge and consent of David as
had been approved. The tenor of the letters sent by buyer of a unit therein, and without the approval
ASIATRUST would lead a reasonable man to believe that of the NHA (now HLURB) as required by P.D.
there was nothing left to do but await the release of the No. 957, was not only an unsound real estate
loan. ASIATRUST cannot hide behind the pithy excuse business practice but also highly prejudicial to
that the grant of the bridge financing loan was subject to the buyer David, (who) has a cause of action for
the release of the Pag-IBIG loan. The essence of bridge annulment of the mortgage, the mortgage
financing loans is to obtain funds through an interim loan foreclosure sale, and the condominium certificate
while the Pag-IBIG funds are not yet available. To await of title that was issued to the UBP and FEBTC as
the release of the Pag-IBIG loan would render any bridge highest bidders of the sale.
financing nugatory. Thus, we agree with the trial court
when it said that "the conclusion is inevitable that although These remedies were clearly within those sought for in
the plaintiff was not able to pay, he was a victim of petitioner's complaint. The trial court should have also
circumstances and his failure was not due to his own fault." ordered QPSDCI to credit petitioner's payments to his
outstanding balance and deliver to petitioner a clean CCT
Furthermore, Sec. 25 of PD 957 provides: upon full payment of the purchase price as mandated by
Sec. 25 of PD 957.
SECTION 25. Issuance of Title. — The owner or
developer shall deliver the title of the lot or unit We note that petitioner, believing that he won, did not
to the buyer upon full payment of the lot or unit. appeal the trial court's decision. Petitioner is partly to
No fee, except those required for the registration blame for the difficult situation he is in, having filed his
of the deed of sale in the Registry of Deeds, shall complaint with the regular courts instead of the HLURB.
be collected for the issuance of such title. In the Nevertheless, both trial court and the Court of Appeals
event a mortgage over the lot or unit is found that petitioner had superior rights over the
outstanding at the time of the issuance of the title condominium unit, that petitioner was not bound by the
to the buyer, the owner or developer shall redeem mortgage in favor of the FUNDERS and, that QPSDCI
the mortgage or the corresponding portion thereof violated its contract with petitioner by its failure to remit
within six months from such issuance in order the latter's payments. Such findings are uncontested before
us and provide enough ground to warrant the modification
of the ruling, so that full relief may be accorded to
petitioner. The general rule that an appellate court may only
pass upon errors assigned may be waived, and the appellate
court may consider matters not assigned when
consideration of which is necessary in arriving at a just
decision and complete resolution of the case or serve the
interests of justice or to avoid dispensing piecemeal
justice.24

WHEREFORE, the assailed Decision of the Court of

Appeals in CA-G.R. CV No. 37281 is MODIFIED thus

(a) The mortgage over Unit 211-2C of Lourdes I

Condominium covered by CCT No. 2307 as well as its
foreclosure sale is declared NULL and VOID. The Ex-
Officio Sheriff of Quezon City is ordered to cancel the
certificate of sale in favor of ASIATRUST Development
Bank over the aforesaid Unit 211-2C and the Register of
Deeds of Quezon City to cancel the Annotation of the Real
Estate Mortgage (Entry No. 7714) and the Annotation of
the Certificate of Sale (Entry No. 8087); and

(b) Respondents Q. P. San Diego Construction, Inc., and

ASIATRUST are ordered to credit all payments made by
petitioner Gregorio de Vera Jr., to his outstanding balance,
and to deliver to petitioner the certificate of title over Unit
211-2C, Lourdes I Condominium, upon full payment of the
purchase price, free from all penalties, liens, charges,
except those accruing after finality of this Decision.

The award of nominal damages in favor of petitioner in the

amount of P50,000.00 is AFFIRMED.

SO ORDERED
 documents as may be necessary for the issuance
BANK OF THE PHILIPPINE ISLANDS, as Successor- of the corresponding Condominium Certificate of
in-Interest of BPI Investment Corporation, petitioner,  Title. After the [petitioner] complied with its
vs. obligations under the said Deed of Sale,
ALS MANAGEMENT & DEVELOPMENT [respondent], notwithstanding demands made by
CORP., respondent. [petitioner], failed and refused to pay [petitioner]
its legitimate advances for the expenses
DECISION mentioned above without any valid, legal or
justifiable reason.
PANGANIBAN, J.:
"In its Answer with Compulsory Counterclaim,
[respondent] averred among others that it has just
Factual findings of the lower courts are entitled to great and valid reasons for refusing to pay
respect, but may be reviewed if they do not conform to law [petitioner’s] legal claims. In clear and direct
and to the evidence on record. In the case at bar, a contravention of Section 25 of Presidential
meticulous review of the facts compels us to modify the Decree No. 957 which provides that ‘No fee
award granted by the Court of Appeals. except those required for the registration of the
deed of sale in the Registry of Deeds shall be
The Case collected for the issuance of such title’, the
[petitioner] has jacked-up or increased the
Before us is a Petition for Review1 under Rule 45 of the amount of its alleged advances for the issuance
Rules of Court, seeking to set aside the November 24, 2000 and registration of the Condominium Certificate
Decision2 and the January 9, 2002 Resolution3 of the Court of Title in the name of the [respondent], by
of Appeals (CA) in CA-GR CV No. 25781. The assailed including therein charges which should not be
Decision disposed as follows: collected from buyers of condominium units.
[Petitioner] made and disseminated brochures
and other sales propaganda in and before May
"WHEREFORE, premises considered, the 1980, which made warranties as to the facilities,
assailed decision is hereby AFFIRMED in improvements, infrastructures or other forms of
toto and the instant appeal DISMISSED."4 development of the condominium units (known
as ‘The Twin Towers’) it was offering for sale to
The assailed Resolution denied reconsideration. the public, which included the following:

The Facts ‘The Twin Towers is destined to reflect

condominium living at its very best.’
The facts of the case are narrated by the appellate court as
follows: ‘While the twin tower design and its
unusual height will make the project
the only one of its kind in the
"On July 29, 1985, [petitioner] BPI Investment
Philippines, the human scale and
Corporation filed a complaint for a Sum of
proportion [are] carefully maintained.’
Money against ALS Management and
Development Corporation, alleging inter alia that
on July 22, 1983, [petitioner] and [respondent] ‘To be sure, modern conveniences are
executed at Makati, Metro Manila a Deed of Sale available as in the installation of an
for one (1) unfurnished condominium unit of the intercom system and a closed-circuit
Twin Towers Condominium located at Ayala TV monitor through which residents
Avenue, corner Apartment Ridge Street, Makati, from their apartments can see their
Metro Manila designated as Unit E-4A guests down at the lobby call station.’
comprising of 271 squares [sic] meters more or
less, together with parking stalls identified as ‘Some of the features of each typical
G022 and G-63. The Condominium Certificate of apartment unit are: x x x A bar x x x
Title No. 4800 of the Registry of Deeds for Three toilets with baths x x x.’
Makati, Metro Manila was issued after the
execution of the said Deed of Sale. [Petitioner]
advanced the amount of ₱26,300.45 for the ‘The penthouse units are privileged
expenses in causing the issuance and registration with the provision of an all-around
of the Condominium Certificate of Title. Under balcony. x x x’
the penultimate paragraph of the Deed of Sale, it
is stipulated that the VENDEE [respondent] shall "[Respondent] further averred that [petitioner]
pay all the expenses for the preparation and represented to the [respondent] that the
registration of this Deed of Sale and such other condominium unit will be delivered completed
 and ready for occupancy not later than December and one (1) month deposit (totaling U.S.
31, 1981. [Respondent] relied solely upon the $15,785.00) corresponding to the period January
descriptions and warranties contained in the 1, 1982 to June 17, 1982, which [petitioner]
aforementioned brochures and other sales would have earned had he deposited the said
propaganda materials when [respondent] agreed amount in a bank;
to buy Unit E-4A of the Twin Tower(s) for the
hefty sum of ₱2,048,900.00 considering that the "4. The sum of U.S.$1,214.30 per month,
Twin Towers was then yet to be built. In commencing from May 1, 1985, which the
contravention of [petitioner’s] warranties and of [respondent] no longer earns as rental on the
good engineering practices, the condominium premises because the lessee vacated the same by
unit purchased by [respondent] suffered from the reason of defects and/or deficiencies;
following defects and/or deficiencies:
"5. The sum of ₱50,000.00 plus appearance fees
‘1. The clearance in the walkway at the of ₱300.00 per court hearing, as attorney’s fees;
balcony is not sufficient for passage;
"6. Litigation expenses and costs of suit."7
‘2. The anodized aluminum used in the
door and windows were damaged;
On February 6, 1990, the trial court issued this judgment:
‘3. The kitchen counter
tops/splashboard suffered from cracks "1. Ordering the [respondent] to pay [petitioner]
and were mis-cut and misaligned; the sum of ₱26,300.45, with legal interest from
the filing of the complaint up to full payment
thereof, representing the amount spent for the
‘4. The partition between living and registration of the title to the condominium unit
master’s bedroom was unpainted and it in [respondent’s] name;
had no access for maintenance due to
aluminum fixed glass cover;
"2. Ordering [petitioner] to deliver, replace or
correct at [petitioner’s] exclusive expense/cost or
‘5. The varifold divider, including the appoint a licensed qualified contractor to do the
bar and counter top cabinet were not same on its behalf, the following
installed; defects/deficiencies in the condominium unit
owned by the [respondent]:
‘6. The toilets had no tiles;
a) KITCHEN
‘7. No closed circuit TV was installed;
i) The sides of the kitchen
‘8. Rainwater leaks inside or into the sink covered with sealants as
condominium unit.’"5 well as miscut marble
installed as filler at the right
Respondent’s Answer prayed that "judgment be rendered side of the sink;
ordering [petitioner] to correct such defects/deficiencies in
the condominium unit,"6 and that the following reliefs be ii) Miscut marble installed on
granted: both sides of the side wall
above the gas range;
"1. The sum of ₱40,000.00 plus legal interest
thereon from the date of extra-judicial demand, b) FOYERS
representing the amount spent by the defendant
for the completion works it had undertaken on the Water marks at the parquet flooring,
premises. near the main water supply room;

"2. The sum of U.S.$6,678.65 (or its equivalent c) MAIDS ROOM

in the Philippine currency) representing the
unearned rental of the premises which the
defendant did not realize by reason of the late Ceiling cut off about one (1) square
delivery to him of the condominium unit; foot in size and left unfinished

"3. Twenty-four percent (24%) interest per d) DINING ROOM

annum on the agreed one (1) year advance rental
 i) Water damaged parquet up i) Water mark on the parquet
to about one (1) meter from flooring due to water
the wall underneath the open seepage;
shelves and directly behind
the plant box; ii) Asphalt plastered at the
exterior wall/floor joints to
ii) Plant box directly behind prevent water seepage;
the dining room;
i) ANALOC FINISH of the aluminum
iii) The water damaged frames of doors and windows all
parquet flooring near the door around the condominium were painted
of the dining room to the with dark gray paint to cover dents and
passage way scratches;

e) MASTER’S BEDROOM j) LIVING ROOM

i) Falling off paint layers at Intercom equipment installed without

the bathroom wall behind the the TV monitor;
bathtub/faucet along the
passageway of the master’s k) STORAGE FACILITIES at the
bedroom; ground floor

ii) Falling off water-damaged "3. Ordering [petitioner] to pay [respondent] the
plywood ceiling in the following:
master’s bedroom bathroom;
a) The sum of ₱40,000.00 representing
iii) Grinders mark damage at reimbursement for expenses incurred
the bathtub; for the materials/labor in installing
walls/floor titles in 2 bathrooms and bar
f) BALCONY WALKWAY counter cabinet.

i) PVC pipes installed two (2) b) The sum of ₱136,608.75,

inches above floor level representing unearned income for the
causing water to accumulate; five-month period that the defendant
had to suspend a lease contract over the
ii) Cracks on level of wash premises.
out flooring;
c) The sum of ₱27,321.75 per month
iii) 14-inches passageway for a period of twenty-one (21) months
going to the open terrace not (from May 1985 to January 1987),
sufficient as passageway; representing unearned income when
defendant’s lessee had to vacate the
premises and condominium unit
iv) PVC pipe installed on the remained vacant, all with legal interest
plant box water drained from the filing of the counterclaim until
directly on the balcony floor; the same are fully paid."8

g) BALCONY (OPEN) TERRACE Ruling of the Court of Appeals

i) Two (2) concrete cement On appeal, after "a thorough review and examination of the
measuring about 6 x 4 inches evidence on record,"9 the CA found "no basis for
with protruding live wires, disbelieving what the trial court found and arrived at."10
purportedly lamp posts which
were not installed;
The appellate court sustained the trial court’s finding that
"while [petitioner] succeeded in proving its claim against
h) BOYS BEDROOM the [respondent] for expenses incurred in the registration of
[the latter’s] title to the condominium unit purchased, x x x
for its part [respondent] in turn succeeded in establishing an A. Unsound real estate business
even bigger claim under its counterclaim."11 practices;

Hence, this Petition.12 B. Claims involving refund and any

other claims filed by subdivision lot or
The Issues condominium unit buyer against the
project owner, developer, dealer,
broker or salesman; and
Petitioner raises the following issues for our consideration:
C. Cases involving specific
"I. Whether or not the Honorable Court of performance of contractual and
Appeals erred in not holding that the trial court statutory obligations filed by buyers of
had no jurisdiction over the respondent’s subdivision lot or condominium unit
counterclaims. against the owner, developer, broker or
salesman." (Italics ours.)
"II. Whether or not the decision of the Court of
Appeals is based on misapprehension of facts On February 7, 1981, by virtue of Executive Order No.
and/or manifestly mistaken warranting a review 648, the regulatory functions of the NHA were transferred
by this Honorable Court of the factual findings to the Human Settlements Regulatory Commission
therein. (HSRC). Section 8 thereof provides:

"III. Whether or not the award of damages by the "SECTION 8. Transfer of Functions. - The
Honorable Court of Appeals is conjectural regulatory functions of the National Housing
warranting a review by this Honorable Court of Authority pursuant to Presidential Decree Nos.
the factual findings therein."13 957, 1216, 1344 and other related laws are hereby
transferred to the Commission (Human
The Court’s Ruling Settlements Regulatory Commission). x x x.
Among these regulatory functions are: 1)
The Petition is partly meritorious. Regulation of the real estate trade and business; x
x x 11) Hear and decide cases of unsound real
estate business practices; claims involving refund
First Issue: filed against project owners, developers, dealers,
brokers, or salesmen; and cases of specific
Jurisdiction performance."

Contending that it was the Housing and Land Use Pursuant to Executive Order No. 90 dated December 17,
Regulatory Board (HLURB) -- not the RTC -- that had 1986, the functions of the HSRC were transferred to the
jurisdiction over respondent’s counterclaim, petitioner HLURB.
seeks to nullify the award of the trial court.
As mandated by PD No. 957, the jurisdiction of the
Promulgated on July 12, 1976, PD No. 957 -- otherwise HLURB is encompassing. Hence, we said in Estate
known as "The Subdivision and Condominium Buyers’ Developers and Investors Corporation v. Sarte:15
Protective Decree" -- provides that the National Housing
Authority (NHA) shall have "exclusive authority to "x x x. While PD 957 was designed to meet the
regulate the real estate trade and business."14 Promulgated need basically to protect lot buyers from the
later on April 2, 1978, was PD No. 1344 entitled fraudulent manipulations of unscrupulous
"Empowering the National Housing Authority to Issue subdivision owners, sellers and operators, the
Writs of Execution in the Enforcement of Its Decisions ‘exclusive jurisdiction’ vested in the NHA is
Under Presidential Decree No. 957." It expanded the broad and general -‘to regulate the real estate
jurisdiction of the NHA as follows: trade and business’ in accordance with the
provisions of said law."
"SECTION 1. In the exercise of its function to
regulate the real estate trade and business and in Furthermore, the jurisdiction of the HLURB over cases
addition to its powers provided for in Presidential enumerated in Section 1 of PD No. 1344 is exclusive. Thus,
Decree No. 957, the National Housing Authority we have ruled that the board has sole jurisdiction in a
shall have exclusive jurisdiction to hear and complaint of specific performance for the delivery of a
decide cases of the following nature: certificate of title to a buyer of a subdivision lot;16 for
claims of refund regardless of whether the sale is perfected
or not;17 and for determining whether there is a perfected "Laches, in general sense, is failure or neglect,
contract of sale.18 for an unreasonable and unexplained length of
time, to do that which, by exercising due
In Solid Homes v. Payawal,19 we declared that the NHA diligence, could or should have been done earlier;
had the competence to award damages as part of the it is negligence or omission to assert a right
exclusive power conferred upon it -- the power to hear and within a reasonable time, warranting a
decide "claims involving refund and any other claimsfiled presumption that the party entitled to assert it
by subdivision lot or condominium unit buyers against the either has abandoned it or declined to assert it.
project owner, developer, dealer, broker or salesman."20
"The doctrine of laches or of ‘stale demands’ is
Clearly then, respondent’s counterclaim -- being one for based upon grounds of public policy which
specific performance (correction of defects/deficiencies in requires, for the peace of society, the
the condominium unit) and damages -- falls under the discouragement of stale claims and, unlike the
jurisdiction of the HLURB as provided by Section 1 of PD statute of limitations, is not a mere question of
No. 1344. time but is principally a question of the inequity
or unfairness of permitting a right or claim to be
enforced or asserted."28
The Applicability of Estoppel
Thus, we struck down the defense of lack of jurisdiction,
The general rule is that any decision rendered without since the appellant therein failed to raise the question at an
jurisdiction is a total nullity and may be struck down at any earlier stage. It did so only after an adverse decision had
time, even on appeal before this Court.21 Indeed, the been rendered.
question of jurisdiction may be raised at any time, provided
that such action would not result in the mockery of the
tenets of fair play.22 As an exception to the rule, the issue We further declared that if we were to sanction the said
may not be raised if the party is barred by estoppel.23 appellant’s conduct, "we would in effect be declaring as
useless all the proceedings had in the present case since it
was commenced x x x and compel the judgment creditors
In the present case, petitioner proceeded with the trial, and to go up their Calvary once more. The inequity and
only after a judgment unfavorable to it did it raise the issue unfairness of this is not only patent but revolting."29
of jurisdiction. Thus, it may no longer deny the trial court’s
jurisdiction, for estoppel bars it from doing so. This Court
cannot countenance the inconsistent postures petitioner has Applicable herein is our ruling in Gonzaga v. Court of
adopted by attacking the jurisdiction of the regular court to Appeals,30 in which we said:
which it has voluntarily submitted.24
"Public policy dictates that this Court must
The Court frowns upon the undesirable practice of strongly condemn any double-dealing by parties
submitting one’s case for decision, and then accepting the who are disposed to trifle with the courts by
judgment only if favorable, but attacking it for lack of deliberately taking inconsistent positions, in utter
jurisdiction if it is not.25 disregard of the elementary principles of justice
and good faith. There is no denying that, in this
case, petitioners never raised the issue of
We also find petitioner guilty of estoppel by laches for jurisdiction throughout the entire proceedings in
failing to raise the question of jurisdiction earlier. From the the trial court. Instead, they voluntarily and
time that respondent filed its counterclaim on November 8, willingly submitted themselves to the jurisdiction
1985, the former could have raised such issue, but failed or of said court. It is now too late in the day for
neglected to do so. It was only upon filing its appellant’s them to repudiate the jurisdiction they were
brief26 with the CA on May 27, 1991, that petitioner raised invoking all along."31
the issue of jurisdiction for the first time.
Second and Third Issues:
In Tijam v. Sibonghanoy,27 we declared that the failure to
raise the question of jurisdiction at an earlier stage barred
the party from questioning it later. Applying the rule on Appreciation of Facts
estoppel by laches, we explained as follows:
It is readily apparent that petitioner is raising issues of fact
"A party may be estopped or barred from raising that have been ruled upon by the RTC and sustained by the
a question in different ways and for different CA. The factual findings of lower courts are generally
reasons. Thus, we speak of estoppel in pais, of binding upon this Court and will not be disturbed on
estoppe[l] by deed or by record, and of estoppel appeal, especially when both sets of findings are the
by laches. same.32 Nevertheless, this rule has certain exceptions,33 as
when those findings are not supported by the evidence on
record.
We have carefully scrutinized the records of this case and other’s evidence.43 This exception is not present in the case
found reason to modify the award to conform to law and at bar.
the evidence. We thus address the arguments of
petitioner seriatim. Moreover, a cursory reading of the brochure shows that
there is no promise to provide individual storage facilities
Warranties and Representations in the Brochure on the ground floor for each condominium unit. The
brochure reads: "Storage facilities in the apartment units
The brochure that was disseminated indicated features that and the ground floor."44 Apparent from the letter of
would be provided each condominium unit; and that, under petitioner dated June 18, 1982,45 was its compliance with its
Section 19 of PD No. 957, would form part of the sales promise of storage facilities on the ground floor. In that
warranties of petitioner.34 Respondent relied on the letter, respondent was also informed that it may course a
brochure in its decision to purchase a unit.35 Since the reservation of those facilities through the building
former failed to deliver certain items stated therein, then superintendent.
there was a clear violation of its warranties and
representations. Damages for Delay in Delivery

The brochure says that "[t]he particulars stated x x x as well It is undisputed that petitioner sent respondent a "Contract
as the details and visuals shown x x x are intended to give a to Sell"46 declaring that the construction would be finished
general idea of the project to be undertaken, and as such, on or before December 31, 1981.47 The former delivered
are not to be relied [upon] as statements or representations the condominium unit only in June 1982;48 thus, the latter
of fact."36 This general disclaimer should apply only to the claims that there was a delay in the delivery.
general concept of the project that petitioner aptly
characterizes thus: Because of this delay, the trial court ordered petitioner to
pay damages of ₱136,608.75 representing unearned income
"’x x x [D]estined to reflect condominium living for the period that respondent had to suspend a lease
at its very best’ and ‘its design x x x will make contract. We find a dearth of evidence to support such
the project the only one of its kind in the award.
Philippines.’"37
To recover actual damages, the amount of loss must not
This disclaimer, however, should not apply to the features only be capable of proof, but also be proven with a
and the amenities that the brochure promised to provide reasonable degree of certainty.49 The lone evidence for this
each condominium unit. Petitioner was thus in breach when award was the self-serving testimony of respondent’s
it failed to deliver a "closed-circuit TV monitor through witness that a lease contract had indeed been intended to
which residents from their apartments can see their guests x commence in January 1982, instead of the actual
x x."38 implementation on June 18, 1982.50 Without any other
evidence, we fail to see how the amount of loss was proven
Storage Facilities with a reasonable degree of certainty.

The trial court erred, though, in requiring petitioner to Condominium Defects

provide storage facilities on the ground floor, as the non-
delivery had not been alleged in respondent’s Answer with The rule is that a party’s case must be established through a
Counterclaim.39 "preponderance of evidence."51 By such term of evidence is
meant simply evidence that is of greater weight, or is more
It is elementary that a judgment must conform to and be convincing than that which is offered in opposition to
supported by both the pleadings and the evidence, and that it.52 Respondent was able to establish through its witness’
it be in accordance with the theory of the action on which testimony that the condominium unit suffered from
the pleadings were framed and the case was tried.40Indeed, defects.53 This testimony was confirmed by an inspection
issues in each case are limited to those presented in the report54 noted and signed by petitioner’s representative, as
pleadings.41 well as by a commissioner’s report55 prepared after an
ocular inspection by the clerk of court acting as a
commissioner. Furthermore, this conclusion is supported by
We are aware that issues not alleged in the pleadings may the circumstances that occurred during the lease period, as
still be decided upon, if tried with the parties’ express or evidenced by the complaint and the update letters56 of
implied consent.42 Trial courts are not precluded from respondent’s lessee.
granting reliefs not specifically claimed in the pleadings --
notwithstanding the absence of their amendment -- upon
the condition that evidence has been presented properly, Petitioner’s contention that the claim arising from the
with full opportunity on the part of the opposing parties to alleged defects has already prescribed must fail for being
support their respective contentions and to refute each raised for the first time only on appeal.57 Well-settled is the
rule that issues not raised below cannot be resolved on The lower courts did not err in ordering petitioner to correct
review in higher courts.58 the defects in the condominium unit, but in requiring it to
reimburse respondent in the amount of ₱40,000 for
We agree, however, that the lower courts erred in finding completion work done.
that there was a defect in a portion of the balcony, which
respondent alleges to be a "walkway x x x [that] is not Petitioner argues that the trial court’s Decision
sufficient for passage."59 Petitioner was able to prove, encompassed the areas beyond those alleged in
however, that the specifications thereof conformed to the respondent’s Answer.64 This contention is not convincing,
building plan. because the allegations in the latter were broad enough to
cover all the defects in the condominium unit. In fact,
Respondent contends that this portion should have been 65 respondent prayed that "judgment be rendered ordering
to 80 centimeters wide, so that it would be sufficient as a [petitioner] to correct such defects x x x in the
passageway.60 The building plan61 had not specified the condominium unit as may be prove[d] during the trial."65
width, however. Architect Leo Ramos of W.V. Coscolluela
& Associates, the architectural firm that prepared the Petitioner further challenges the award of ₱40,000 as
building plan, testified thus: reimbursement for completion work done by respondent,
on the ground that this claim was not proven during the
"Q I am directing your attention xxx to a certain trial. The latter’s evidence partook of a witness’
portion in this condominium unit x x x it appears testimony66and of a demand letter67 sent to petitioner
x x x [that] there is no measurement indicated requesting reimbursement for completion work done.
therein, do you know why the measurement of Petitioner argues that respondent should have presented
said portion was not indicated in the building receipts to support the expenses.68
plan?
We agree with petitioner. While respondent may have
A Normally, it is variable. suffered pecuniary losses for completion work done, it
failed to establish with reasonable certainty the actual
amount spent. The award of actual damages cannot be
Q What do you mean by variable? based on the allegation of a witness without any tangible
document, such as receipts or other documentary proofs to
A It depends on the actual measurement of the support such claim.69 In determining actual damages, courts
building construction. cannot rely on mere assertions, speculations, conjectures or
guesswork, but must depend on competent proof and on the
Q Could you please tell the Court, what x x x the best obtainable evidence of the actual amount of loss.70
purpose of the said portion of the condominium
unit [is]? Unearned Lease Income

A It is used for watering the plants and the Respondent entered into a lease contract with Advanced
servicing of some area[s]. Micro Device on May 18, 1982, for the period June 18,
1982 to June 17, 1983, with option to renew.71 The lease --
Q How much measurement is made to affix the which was for an agreed monthly rental of ₱17,000 -- was
portion of watering the plants? renewed for a period ending May 1, 1985, when Advanced
Micro Device vacated the unit.72 On the basis of these facts,
the trial court ordered petitioner to pay damages by way of
A Approximately .50 [m]."62 unrealized income for twenty-one months or from May 1,
1985, until January 1987 -- when respondent decided to
Respondent maintains that this portion should have been . move into the condominium unit, which was unoccupied by
80 meters (or 80 centimeters), similar to another area in the then.
building plan that it offered as Exhibit "2-A."63 But an
analysis of this plan reveals that the latter area has a Despite the defects of the condominium unit, a lessee
different width from that of the former. stayed there for almost three years.73 The damages claimed
by respondent is based on the rent that it might have
It is readily apparent from the foregoing facts that the earned, had Advanced Micro Device chosen to stay and
portion in controversy was not intended to be a walkway. renew the lease. Such claim is highly speculative,
Thus, there was no deviation from the building plan. considering that respondent failed to adduce evidence that
Because it has not been shown that this section was the unit had been offered for lease to others, but that there
insufficient to serve the purpose for which it was intended, were no takers because of the defects therein. Speculative
the lower courts erred in considering it as defective. damages are too remote to be included in an accurate
estimate thereof.74 Absent any credible proof of the amount
of actual damage sustained, the Court cannot rely on
Reimbursement of ₱40,000 for Completion Work
speculations as to its existence and amount.75
We recognize, however, that respondent suffered damages
when its lessee vacated the condominium unit on May 1,
1985, because of the defects therein. Respondents are thus
entitled to temperate damages.76 Under the circumstances,
the amount equivalent to three monthly rentals of ₱17,000
-- or a total of ₱51,000 -- would be reasonable.

WHEREFORE, this Petition is PARTLY GRANTED, and

the assailed Decision and Resolution of the Court of
Appeals MODIFIED, as follows:

Hereby DELETED is the requirement on the part

of petitioner to (1) deliver storage facilities on the
ground floor; (2) pay ₱136,608.75 for unearned
income for the five-month period that the lease
contract was allegedly suspended; (3) correct the
alleged passageway in the balcony; (4) pay
₱40,000.00 as reimbursement for completion
work done by respondent; (5) pay ₱27,321.75 per
month for a period of twenty-one months for the
alleged unearned income during the period when
the condominium unit remained vacant.
Petitioner, however, is ORDERED to pay
₱51,000 as temperate damages for the
termination of the lease contract because of the
defects in the condominium unit. All other
awards are AFFIRMED.

No pronouncement as to costs.

SO ORDERED
 sale dated May 21, 1924, issued by the sheriff of
CONSULTA NO. 441 DE LOS ABOGADOS DE Leyte and presented to this registry at 7. 30 a. m.
SMITH, BELL AND CO., LTD., BLOCK, JOHNSTON f May 29, 1924. — Tacloban, June 5, 1924.
AND GREENBAUM, appellants, 
vs. Observing that this notation was not signed by the registrar,
THE REGISTER OF DEEDS OF LEYTE, appellee. and that the certificate of sale was not endorse on its
margin, the attorneys for the plaintiff in the writ called
Block, Johnston and Greenbaum; Ross, Lawrence and upon the registrar of deeds, who then added in parenthesis,
Selph and Antonio T. Carrascoso, Jr, for appellant Smith, following the inscription, the words "no vale." In May,
Bell and Co. 1925, the sheriff delivered to the plaintiff his original
Attorney-General Jaranilla for appellee. certificate of sale endorsed as follows:

STATEMENT The foregoing sheriff's certificate of sale having

been presented at 7.30 a.m. on May 29, 1924, its
For a purported consideration of P78,000, Teofilo Mejia inscription is denied for the reason that the
and Casilda Martinez de Mejia signed a deed of sale and in property, with all the improvements described in
favor of Cristina Martinez for four parcels of land in the said certificate, is registered in the name of a
Ormoc, Leyte, and certain personal property. April 26, person other than any of the judgment debtors,
1921, the deed was presented for registration under Act No. Teofilo Mejia and Casilda Martinez de Mejia (see
2837 to the registrar of deeds of the Province of Leyte, and the fourth parcel in the inscription No. 57, pp. 57
owing to certain defects in it, registration was refused. June to 59, of book 1, of inscriptions under Act No.
7, 1921, Teofilo Mejia made an amendatory affidavit of her 2837). Tacloban, Leyte, May 7, 1925.
husband. On August 12 1921, the property was then
registered as inscription No. 57 in the register of lands not A letter setting out the foregoing facts was then addressed
registered under Act No. 496. Thereafter Smith, Bell and to the Chief of the General Land Registration Office, who
Co. commenced an action, known as civil case No. 4030, in in turn submitted it to the Judge of the Fourth Branch of the
the Court of First Instance of Cebu against Teofilo Mejia Court of First Instance of Manila, who held, first, that after
and Casilda Martinez de Mejia, defendants., and grantors in the filing of the affidavits, there was no error in registering
the deed, to recover the sum of P14,000, in which a writ of the original deed, and, second, that the registrar had the
attachment was issued, and on April 18, 1923, it was levied legal right to refuse to inscribe the sheriff's certificate of
upon the four parcels of land described in the deed of sale for property sold at public auction which was not
Cristina Martinez. A record of this certificate of attachment registered in the name of the judgment debtor, but in the
appears under paragraph 16 of inscription No. 57 of the name of a third party, and third, refused to order
deed to Cristina Martinez In the ordinary course of registration of the deed to plaintiff in the writ, which was
business, judgment was rendered against the defendants, executed by the sheriff under sections 429 and 466 of Act
and an order of sale of the four parcels of land, and No. 190. From this ruling, the plaintiff appeals, assigning
execution was issued, and on February 15, 1924, the fourth the following errors:
parcel of land described in the deed was levied upon by the
sheriff to satisfy the judgment, and that fact was also noted The court erred:
under paragraph 16 of inscription No 57 of the deed. After
the levy was made and the property advertised for sale,
Cristina Martinez, the vendee in the deed, entered a terceria 1. In finding that defects in a original conveyance
with the sheriff, claiming that the property advertised for presented for registration under Act No. 2837,
sale was her sole property. The sheriff required Smith, Bell (amending Act No. 2711, sec.. 1940, can be
and Co. to give him an indemnity bond in the sum of cured by affidavit alone.
P150,000 as a condition precedent to the making of the
sale. The bond was furnished, and the property sold, and in 2. In holding that a registrar of deeds may refuse
due course, the sheriff executed and presented a certificate to register a sheriff's deed of sale, on the ground
of sale to the registrar for inscription, which was duly that the property sold stands inscribed in the
inscribed in the registry under inscription No. 57 as registry book for unregistered real estate in the
follows: name of some person other than the judgment
debtor.
The fourth parcel described in this inscription,
together with all the improvements thereon, was 3. In failing to order the registrar of deeds of
sold at public auction by the sheriff of Leyte, by Leyte (1) to annul inscription No. 57 in his
order of the Court of First Instance of Cebu (civil register under Act No. 2837; or (if the inscription
case No. 4030), for the best bidder, this property be held valid) (2) to require the said registrar to
being subject to repurchase by the judgment record the sheriff's certificate of sale.
debtor in the said case within the period of one
year from May 21st of this year. All the
aforementioned is contained in the certificate of
JOHNS, J.: It was under the second paragraph of this section that the
property was attached as the property of the grantors in the
Upon the facts, we are clearly of the opinion that there is no deed, and attachment indexed by the registrar as therein
merit in the first assignment of error. As the Attorney- provided. That portion of the section deals with real
General points out, there was no material defect in the property or an interest therein belonging to the defendants
conveyance itself, because the instrument was regular on its in the attachment suit, which may be held by any other
face, valid in substance, and had all of the requirements person, and section 450 of the Code of Civil Procedure
provided for in section 127 of Act No. 496, as amended. provides:
Nothing was conveyed by the affidavits which were simply
furnished for the purpose of conforming to the All goods, chattels, moneys, and other property,
requirements of the entries to be made in the registry book. both real and personal, or ant interest therein of
the judgment debtor, not exempt by law, and all
As to the second assignment of error, it will be noted that, property and rights of property seized and held
although the deed of sale was duly registered on August 12, under attachment in the action, shall be liable to
1921, that on April 18, 1923, the land therein described was execution. Shares and interests in any corporation
attached as the property of the grantors in the deed. That or company, and debts, credits and all other
later judgment was obtained in the attachment proceedings, property, both real and personal, or any interest in
execution was issued, and that the fourth parcel of land either real or personal property, and all other
described in the deed was advertised for sale when the property, not capable of manual delivery, may be
grantees notified the sheriff that it was their sole and attached on execution, in like manner as upon
exclusive property. The sheriff then demanded the writs of attachment.
indemnity bond from the plaintiff in the writ, which was
furnished, and the fourth parcel of land was then sold by And section 463 provides:
the sheriff to Smith, Bell and Co. as purchaser for the sum
of P20,000. Later, a certificate of sale was issued and the Upon a sale of real property, the purchaser shall
sale confirmed, and the sheriff's deed was executed. be substituted to, and acquire all the right,
interest, title, and claim of the judgment debtor
Section 429 of the Code of Civil Procedure provides: thereto, subject to the right of redemption as
hereinafter provided. The officer must give to the
Real property, standing upon the records in the purchaser a certificate of sale containing:
name of the defendant or not appearing at all
upon the record, shall be attached by filing with 1. A particular description of the real property
the registrar of titles of land, for the province in sold;
which the land is situated, a copy of the order of
attachment, together with a description of the 2. The price paid for each distinct lot or parcel;
property attached, and a notice that it is attached,
and by leaving a similar copy of the order,
description, and notice with an occupant of the 3. The whole price by him paid;
property, if there is one.
4. The date when the right of redemption expires.
Real property or an interest therein, belonging to
the defendant and held by any other person, shall When the judgment under which the sale has
be attached by filing with the registrar of land been made is made payable in a specified kind of
titles in the province in which the land is situated, money or currency, the certificate must also show
a copy of the order of attachment, together with a the kind of money or currency in which such
description of the property, and a notice that such redemption must be made, which must be the
real property and any interest of the defendant same as that specified in the judgment. A
therein, held by or standing in the name of such duplicate of such certificate must be filed by the
other person (naming him) are attached; and by officer in the office of the registrar of land titles
leaving with the occupant, if any, and with such of the province.
other person, or his agent, if known and within
the province, a copy of the order, description, and Under section 465, if the judgment debtor redeems, he is
notice. The registrar must index statements filed entitled to a certificate of redemption, which must be filed
under the first paragraph of this section, in the with the registrar of deeds, but if the property is not
names, both the plaintiff and of the defendant, redeemed, the sheriff's deed of the property sold must also
and must index attachments filed under the be registered, for, under the provisions of section 1 of Act
second paragraph of this section, in the names of No. 2837, if not registered, it would only be valid as
the plaintiff and of the defendant and of the between the parties, and hence in the instant case, it would
person by whom the property is held or in whose not be of any value to the purchaser at the sheriff's sale.
name it stands on the records.
Section 466 of the Code of Civil Procedure provides: Co. was the owner of the property described in the sheriff's
deed, or any interest therein. It would simply mean that by
If no redemption be made within twelve months the sheriff's deed, Smith, Bell, and Co. had acquired any
after the sale, the purchaser, or his assignee, is right, title or interest which the grantors had in the fourth
entitled to a conveyance; or, if so redeemed, parcel of land described in the deed at the time the
whenever sixty days have elapsed and no other attachment was levied. It might be a cloud on the title of
redemption has been made, notice thereof given, Cristina Martinez, and it might be necessary for her to
and the time for redemption has expired, the last bring a suit to remove the cloud and to quiet her title. Be
redemptioner, or his assignee, is entitled to a deed that as it may, she would be fully protected from all loss or
from the officer. but in all cases the judgment damage by the sheriff, or after the deed is registered, Smith,
debtor shall have the entire period of twelve Bell and Co., could then maintain a suit to ascertain what
months from the date of the sale to redeem the rights, if any, it had acquired by the sheriff's deed in and to
property. If the judgment debtor redeem, he must the fourth parcel of land.
make the same payments as are required to effect
a redemption by a redemptioner. If the debtor Although in some matters, the registrar may have some
redeem, the effect of the sale is terminated and he quasi-judicial power, yet a suit to quiet a title to ascertain
is restored to his estate. Upon a redemption by and determine an interest in real property is a matter
the debtor, the person to whom the payment is exclusively within the jurisdiction of the courts. The title, if
made must execute and deliver to him a any, which Smith, Bell and Co. has in the fourth parcel of
certificate of redemption acknowledged or land by the sheriff's deed was acquired by and through a
approved before an officer authorized to take judicial proceeding, and it has a legal right to have that title
acknowledgment of conveyances of real property. settled and determined in the courts, and under the
Such certificate must be filed and recorded in the provisions of its sheriff deed, it would in legal effect be
office of the registrar of land titles of the deprived of that right. In the registering the actual sheriff's
province in which the property is situated, and deed, care should be taken to recite the actual facts, the
the registrar must note the record thereof on the source and chain of title, so as to protect the rights of
margin of the record of the certificate of sale. The Smith, Bell and Co., and it should be done so as not to
payment mentioned in this section and the prejudice, injure or impair any rights which Cristina
preceding one may be made to the purchaser or Martinez may have acquired in the land by her deed, thus
redemptioner, or for him to the officer who made leaving the respective rights of each party to be settled and
the sale. When the judgment under which the sale determined upon proper pleadings in a judicial proceeding.
has been made is payable in a specified kind of
money or currency, payments must be made in The judgment of the lower court is reversed, and following
the same kind of money or currency. this opinion, the writ of mandamus shall issue as prayed for
by the petitioner. Neither party to recover costs. So ordered.
Of course, if at the time the attachment was levied in the
grantors in the deed, the defendants in the attachment Avanceña, C. J., Street, Malcolm, Villamor, Ostrand, and
proceedings, did not have any right, title, or interest in the Villa-Real, JJ., concur
property, Smith, Bell and Co. did not acquire any title to
the land by the sheriffs deed. But, if it be a fact that at the
time the attachment was levied, the grantors in the deed did
have an interest in the property at the time the attachment
was levied, it follows that Smith, Bell and Co. acquired that
interest by and through the sheriff's deed. That is to say,
that if at the time attachment was levied Cristina Martinez
was in good faith the real owner of the property, Smith,
Bell and Co. did not acquire any title, and Cristina Martinez
would be and remain the owner of the property, the same as
if had never been sold at the sheriff's sale. But Smith, Bell
and Co., having attached the property as property of the
grantors in the deed at the time the attachment was made,
and following the claim of Cristina Martinez, having
executed a good and sufficient bond to purchased the
property at the sale, and having received the sheriff's deed,
is entitled to have the result of such proceedings made a
matter of official record, so as to preserve and protect any
legal rights it may have acquired in the land as a result of
such proceedings, and under the provisions of section 1 of
Act No. 2837, those rights, if any, cannot be protected
without the registration of the sheriff's deed. Such
registration would not legally mean that Smith, Bell and
 CLEMENCIO C. SABITSANA, JR. and MA. On April 11, 2000, Juanito, through his attorney-in-fact
ROSARIO M. SABITSANA, Petitioners,  Domingo Jr., filed Civil Case No. B-109712 for quieting of
vs. title and preliminary injunction, against herein petitioners
JUANITO F. MUERTEGUI, represented by his Atty. Sabitsana and his wife, Rosario, claiming that they
Attorney-in-Fact DOMINGO A. MUERTEGUI, bought the lot in bad faith and are exercising acts of
JR., Respondent. possession and ownership over the same, which acts thus
constitute a cloud over his title. The Complaint13 prayed,
DECISION among others, that the Sabitsana Deed of Sale, the August
24, 1998 letter, and TD No. 5327 be declared null and void
and of no effect; that petitioners be ordered to respect and
DEL CASTILLO, J.: recognize Juanito’s title over the lot; and that moral and
exemplary damages, attorney’s fees, and litigation expenses
A lawyer may not, for his own personal interest and be awarded to him.
benefit, gamble on his client's word, believing it at one time
and disbelieving it the next. He owes his client his In their Answer with Counterclaim,14 petitioners asserted
undivided loyalty. mainly that the sale to Juanito is null and void absent the
marital consent of Garcia’s wife, Soledad Corto (Soledad);
Assailed in this Petition for Review on Certiorari1 are the that they acquired the property in good faith and for value;
January 25, 2007 Decision2 of the Court of Appeals (CA) and that the Complaint is barred by prescription and laches.
which denied the appeal in CA-G.R. CV No. 79250, and its They likewise insisted that the Regional Trial Court (RTC)
January 11, 2008 Resolution3 denying petitioner’s Motion of Naval, Biliran did not have jurisdiction over the case,
for Reconsideration.4 which involved title to or interest in a parcel of land the
assessed value of which is merely ₱1,230.00.
Factual Antecedents
The evidence and testimonies of the respondent’s witnesses
On September 2, 1981, Alberto Garcia (Garcia) executed during trial reveal that petitioner Atty. Sabitsana was the
an unnotarized Deed of Sale5 in favor of respondent Juanito Muertegui family’s lawyer at the time Garcia sold the lot to
Muertegui6 (Juanito) over a 7,500-square meter parcel of Juanito, and that as such, he was consulted by the family
unregistered land (the lot) located in Dalutan Island, before the sale was executed; that after the sale to Juanito,
Talahid, Almeira, Biliran, Leyte del Norte covered by Tax Domingo Sr. entered into actual, public, adverse and
Declaration (TD) No. 1996 issued in 1985 in Garcia’s continuous possession of the lot, and planted the same to
name.7 coconut and ipil-ipil; and that after Domingo Sr.’s death,
his wife Caseldita, succeeded him in the possession and
exercise of rights over the lot.
Juanito’s father Domingo Muertegui, Sr. (Domingo Sr.)
and brother Domingo Jr. took actual possession of the lot
and planted thereon coconut and ipil-ipil trees. They also On the other hand, Atty. Sabitsana testified that before
paid the real property taxes on the lot for the years 1980 up purchasing the lot, he was told by a member of the
to 1998. Muertegui family, Carmen Muertegui Davies (Carmen),
that the Muertegui family had bought the lot, but she could
not show the document of sale; that he then conducted an
On October 17, 1991, Garcia sold the lot to the Muertegui investigation with the offices of the municipal and
family lawyer, petitioner Atty. Clemencio C. Sabitsana, Jr. provincial assessors; that he failed to find any document,
(Atty. Sabitsana), through a notarized deed of absolute record, or other proof of the sale by Garcia to Juanito, and
sale.8 The sale was registered with the Register of Deeds on instead discovered that the lot was still in the name of
February 6, 1992.9 TD No. 1996 was cancelled and a new Garcia; that given the foregoing revelations, he concluded
one, TD No. 5327,10 was issued in Atty. Sabitsana’s name. that the Muerteguis were merely bluffing, and that they
Although Domingo Jr. and Sr. paid the real estate taxes, probably did not want him to buy the property because they
Atty. Sabitsana also paid real property taxes in 1992, 1993, were interested in buying it for themselves considering that
and 1999. In 1996, he introduced concrete improvements it was adjacent to a lot which they owned; that he then
on the property, which shortly thereafter were destroyed by proceeded to purchase the lot from Garcia; that after
a typhoon. purchasing the lot, he wrote Caseldita in October 1991 to
inform her of the sale; that he then took possession of the
When Domingo Sr. passed away, his heirs applied for lot and gathered ipil-ipil for firewood and harvested
registration and coverage of the lot under the Public Land coconuts and calamansi from the lot; and that he
Act or Commonwealth Act No. 141. Atty. Sabitsana, in a constructed a rip-rap on the property sometime in 1996 and
letter11 dated August 24, 1998 addressed to the Department 1997.
of Environment and Natural Resources’ CENRO/PENRO
office in Naval, Biliran, opposed the application, claiming Ruling of the Regional Trial Court
that he was the true owner of the lot. He asked that the
application for registration be held in abeyance until the
issue of conflicting ownership has been resolved.
On October 28, 2002, the trial court issued its and litigation expenses; and that they should be the ones
Decision15 which decrees as follows: awarded attorney’s fees and litigation expenses.

WHEREFORE, in view of the foregoing considerations, The CA, through its questioned January 25, 2007
this Court finds in favor of the plaintiff and against the Decision,21 denied the appeal and affirmed the trial court’s
defendants, hereby declaring the Deed of Sale dated 2 Decision in toto. It held that even though the lot admittedly
September 1981 as valid and preferred while the Deed of was conjugal property, the absence of Soledad’s signature
Absolute Sale dated 17 October 1991 and Tax Declaration and consent to the deed did not render the sale to Juanito
No. 5327 in the name of Atty. Clemencio C. Sabitsana, Jr. absolutely null and void, but merely voidable. Since Garcia
are VOID and of no legal effect. and his wife were married prior to the effectivity of the
Family Code, Article 173 of the Civil Code22should apply;
The Provincial Assessor and the Municipal Assessor of and under the said provision, the disposition of conjugal
Naval are directed to cancel Tax Declaration No. 5327 as property without the wife’s consent is not void, but merely
void and done in bad faith. voidable. In the absence of a decree annulling the deed of
sale in favor of Juanito, the same remains valid.
Further, Atty. Clemencio C. Sabitsana, Jr. is ordered to pay
plaintiff Juanito Muertigui, represented by his attorney-in- The CA added that the fact that the Deed of Sale in favor of
fact Domingo Muertigui, Jr. the amounts of: Juanito was not notarized could not affect its validity. As
against the notarized deed of sale in favor of petitioners, the
CA held that the sale in favor of Juanito still prevails.
a) ₱30,000.00 as attorney’s fees; Applying Article 1544 of the Civil Code, the CA said that
the determining factor is petitioners’ good faith, or the lack
b) ₱10,000.00 as litigation expenses; and of it. It held that even though petitioners were first to
register the sale in their favor, they did not do so in good
c) Costs. faith, for they already knew beforehand of Garcia’s prior
sale to Juanito. By virtue of Atty. Sabitsana’s professional
and confidential relationship with the Muertegui family,
SO ORDERED.16 petitioners came to know about the prior sale to the
Muerteguis and the latter’s possession of the lot, and yet
The trial court held that petitioners are not buyers in good they pushed through with the second sale. Far from acting
faith. Petitioner Atty. Sabitsana was the Muertegui family’s in good faith, petitioner Atty. Sabitsana used his legal
lawyer, and was informed beforehand by Carmen that her knowledge to take advantage of his clients by registering
family had purchased the lot; thus, he knew of the sale to his purchase ahead of them.
Juanito. After conducting an investigation, he found out
that the sale was not registered. With this information in Finally, the CA declared that Juanito, as the rightful owner
mind, Atty. Sabitsana went on to purchase the same lot and of the lot, possessed the requisite cause of action to institute
raced to register the sale ahead of the Muerteguis, the suit for quieting of title and obtain judgment in his
expecting that his purchase and prior registration would favor, and is entitled as well to an award for attorney’s fees
prevail over that of his clients, the Muerteguis. Applying and litigation expenses, which the trial court correctly held
Article 1544 of the Civil Code,17 the trial court declared to be just and equitable under the circumstances.
that even though petitioners were first to register their sale,
the same was not done in good faith. And because
petitioners’ registration was not in good faith, preference The dispositive portion of the CA Decision reads:
should be given to the sale in favor of Juanito, as he was
the first to take possession of the lot in good faith, and the WHEREFORE, premises considered, the instant appeal is
sale to petitioners must be declared null and void for it DENIED and the Decision dated October 28, 2002 of the
casts a cloud upon the Muertegui title. Regional Trial Court, 8th Judicial Region, Branch 16,
Naval, Biliran, is hereby AFFIRMED. Costs against
Petitioners filed a Motion for Reconsideration18 but the trial defendants-appellants.
court denied19 the same.
SO ORDERED.23
Ruling of the Court of Appeals
Issues
20
Petitioners appealed to the CA  asserting that the sale to
Juanito was null and void for lack of marital consent; that Petitioners now raise the following issues for resolution:
the sale to them is valid; that the lower court erred in
applying Article 1544 of the Civil Code; that the Complaint I. THE COURT OF APPEALS ERRED IN NOT
should have been barred by prescription, laches and HOLDING THAT THE REGIONAL TRIAL
estoppel; that respondent had no cause of action; that COURT DID NOT HAVE JURISDICTION
respondent was not entitled to an award of attorney’s fees OVER THE CASE IN VIEW OF THE FACT
 THAT THE ASSESSED VALUE OF THE assert their rights for an unreasonable length of time. As
SUBJECT LAND WAS ONLY ₱1,230.00 (AND such, their action to quiet title should be deemed barred by
STATED MARKET VALUE OF ONLY laches and estoppel.
₱3,450.00).
Lastly, petitioners take exception to the award of attorney’s
II. THE COURT OF APPEALS ERRED IN fees and litigation expenses, claiming that since there was
APPLYING ART. 1544 OF THE CIVIL CODE no bad faith on their part, such award may not be
INSTEAD OF THE PROPERTY considered just and equitable under the circumstances. Still,
REGISTRATION DECREE (P.D. NO. 1529) an award of attorney’s fees should remain the exception
CONSIDERING THAT THE SUBJECT LAND rather than the rule; and in awarding the same, there must
WAS UNREGISTERED. have been an express finding of facts and law justifying
such award, a requirement that is absent in this case.
III. THE COURT OF APPEALS ERRED IN
NOT HOLDING THAT THE COMPLAINT Petitioners thus pray for the reversal of the questioned CA
WAS ALREADY BARRED [BY] LACHES Decision and Resolution; the dismissal of the Complaint in
AND THE STATUTE OF LIMITATIONS. Civil Case No. B-1097; the deletion of the award of
attorney’s fees and litigation expenses in respondent’s
IV. THE COURT OF APPEALS ERRED IN favor; and a declaration that they are the true and rightful
AFFIRMING THE DECISION OF THE owners of the lot.
REGIONAL TRIAL COURT ORDERING THE
PETITIONERS TO PAY ATTORNEY’S FEES Respondent’s Arguments
AND LITIGATION EXPENSES TO THE
RESPONDENT.24 Respondent, on the other hand, counters that a suit for
quieting of title is one whose subject matter is incapable of
Petitioners’ Arguments pecuniary estimation, and thus falls within the jurisdiction
of the RTC. He likewise insists that Article 1544 applies to
Petitioners assert that the RTC of Naval, Biliran did not the case because there is a clear case of double sale of the
have jurisdiction over the case. They argue that since the same property to different buyers, and the bottom line
assessed value of the lot was a mere ₱1,230.00, jurisdiction thereof lies in petitioners’ lack of good faith in entering into
over the case lies with the first level courts, pursuant to the subsequent sale. On the issue of laches/estoppel,
Republic Act No. 7691,25 which expanded their exclusive respondent echoes the CA’s view that he was persistent in
original jurisdiction to include "all civil actions which the exercise of his rights over the lot, having previously
involve title to, or possession of, real property, or any filed a complaint for recovery of the lot, which
interest therein where the assessed value of the property or unfortunately was dismissed based on technicality.
interest therein does not exceed Twenty thousand pesos
(₱20,000.00) or, in civil actions in Metro Manila, where On the issue of attorney’s fees and litigation expenses,
such assessed value does not exceed Fifty thousand pesos respondent finds refuge in Article 2208 of the Civil
(₱50,000.00) exclusive of interest, damages of whatever Code,28citing three instances which fortify the award in his
kind, attorney’s fees, litigation expenses and favor – petitioners’ acts compelled him to litigate and incur
costs."26 Petitioners thus conclude that the Decision in Civil expenses to protect his interests; their gross and evident bad
Case No. B-1097 is null and void for lack of jurisdiction. faith in refusing to recognize his ownership and possession
over the lot; and the justness and equitableness of his case.
Petitioners next insist that the lot, being unregistered land,
is beyond the coverage of Article 1544 of the Civil Code, Our Ruling
and instead, the provisions of Presidential Decree (PD) No.
1529 should apply. This being the case, the Deed of Sale in The Petition must be denied.
favor of Juanito is valid only as between him and the seller
Garcia, pursuant to Section 113 of PD 1529;27 it cannot
affect petitioners who are not parties thereto. The Regional Trial Court has jurisdiction over the suit for
quieting of title.
On the issue of estoppel, laches and prescription,
petitioners insist that from the time they informed the On the question of jurisdiction, it is clear under the Rules
Muerteguis in writing about their purchase of the lot, or in that an action for quieting of title may be instituted in the
October 1991, the latter did not notify them of their prior RTCs, regardless of the assessed value of the real property
purchase of the lot, nor did respondent interpose any in dispute. Under Rule 63 of the Rules of Court,29 an action
objection to the sale in their favor. It was only in 1998 that to quiet title to real property or remove clouds therefrom
Domingo Jr. showed to petitioners the unnotarized deed of may be brought in the appropriate RTC.
sale. According to petitioners, this seven-year period of
silence and inaction on the Muerteguis’ part should be It must be remembered that the suit for quieting of title was
taken against them and construed as neglect on their part to prompted by petitioners’ August 24, 1998 letter-opposition
to respondent’s application for registration. Thus, in order Our land registration laws do not give the holder any better
to prevent30 a cloud from being cast upon his application title than what he actually has.36
for a title, respondent filed Civil Case No. B-1097 to obtain
a declaration of his rights. In this sense, the action is one Specifically, we held in Radiowealth Finance Co. v.
for declaratory relief, which properly falls within the Palileo37 that:
jurisdiction of the RTC pursuant to Rule 63 of the Rules.
Under Act No. 3344, registration of instruments affecting
Article 1544 of the Civil Code does not apply to sales unregistered lands is ‘without prejudice to a third party
involving unregistered land. with a better right.’ The aforequoted phrase has been held
by this Court to mean that the mere registration of a sale in
Both the trial court and the CA are, however, wrong in one’s favor does not give him any right over the land if the
applying Article 1544 of the Civil Code. Both courts seem vendor was not anymore the owner of the land having
to have forgotten that the provision does not apply to sales previously sold the same to somebody else even if the
involving unregistered land. Suffice it to state that the issue earlier sale was unrecorded.
of the buyer’s good or bad faith is relevant only where the
subject of the sale is registered land, and the purchaser is Petitioners’ defense of prescription, laches and estoppel are
buying the same from the registered owner whose title to unavailing since their claim is based on a null and void
the land is clean. In such case, the purchaser who relies on deed of sale. The fact that the Muerteguis failed to
the clean title of the registered owner is protected if he is a interpose any objection to the sale in petitioners’ favor does
purchaser in good faith for value.31 not change anything, nor could it give rise to a right in their
favor; their purchase remains void and ineffective as far as
Act No. 3344 applies to sale of unregistered lands. the Muerteguis are concerned.

What applies in this case is Act No. 3344,32 as amended, The award of attorney’s fees and litigation expenses is
which provides for the system of recording of transactions proper because of petitioners’ bad faith.
over unregistered real estate. Act No. 3344 expressly
declares that any registration made shall be without Petitioners’ actual and prior knowledge of the first sale to
prejudice to a third party with a better right. The question to Juanito makes them purchasers in bad faith. It also appears
be resolved therefore is: who between petitioners and that petitioner Atty. Sabitsana was remiss in his duties as
respondent has a better right to the disputed lot? counsel to the Muertegui family. Instead of advising the
Muerteguis to register their purchase as soon as possible to
Respondent has a better right to the lot. forestall any legal complications that accompany
unregistered sales of real property, he did exactly the
The sale to respondent Juanito was executed on September opposite: taking advantage of the situation and the
2, 1981 via an unnotarized deed of sale, while the sale to information he gathered from his inquiries and
petitioners was made via a notarized document only on investigation, he bought the very same lot and immediately
October 17, 1991, or ten years thereafter. Thus, Juanito caused the registration thereof ahead of his clients, thinking
who was the first buyer has a better right to the lot, while that his purchase and prior registration would prevail. The
the subsequent sale to petitioners is null and void, because Court cannot tolerate this mercenary attitude. Instead of
when it was made, the seller Garcia was no longer the protecting his client’s interest, Atty. Sabitsana practically
owner of the lot. Nemo dat quod non habet. preyed on him.

The fact that the sale to Juanito was not notarized does not Petitioner Atty. Sabitsana took advantage of confidential
alter anything, since the sale between him and Garcia information disclosed to him by his client, using the same
remains valid nonetheless. Notarization, or the requirement to defeat him and beat him to the draw, so to speak. He
of a public document under the Civil Code,33 is only for rushed the sale and registration thereof ahead of his client.
convenience, and not for validity or enforceability.34 And He may not be afforded the excuse that he nonetheless
because it remained valid as between Juanito and Garcia, proceeded to buy the lot because he believed or assumed
the latter no longer had the right to sell the lot to that the Muerteguis were simply bluffing when Carmen
petitioners, for his ownership thereof had ceased. told him that they had already bought the same; this is too
convenient an excuse to be believed. As the Muertegui
family lawyer, he had no right to take a position, using
Nor can petitioners’ registration of their purchase have any information disclosed to him in confidence by his client,
effect on Juanito’s rights. The mere registration of a sale in that would place him in possible conflict with his duty. He
one’s favor does not give him any right over the land if the may not, for his own personal interest and benefit, gamble
vendor was no longer the owner of the land, having on his client’s word, believing it at one time and
previously sold the same to another even if the earlier sale disbelieving it the next. He owed the Muerteguis his
was unrecorded.35 Neither could it validate the purchase undivided loyalty. He had the duty to protect the client, at
thereof by petitioners, which is null and void. Registration all hazards and costs even to himself.38
does not vest title; it is merely the evidence of such title.
Petitioner Atty. Sabitsana is enjoined to "look at any
representation situation from the point of view that there
are possible conflicts, and further to think in terms of
impaired loyalty, that is, to evaluate if his representation in
any way will impair his loyalty to a client."39

Moreover, as the Muertegui family’s lawyer, Atty.

Sabitsana was under obligation to safeguard his client's
property, and not jeopardize it. Such is his duty as an
attorney, and pursuant to his general agency.40

Even granting that Atty. Sabitsana has ceased to act as the

Muertegui family's lawyer, he still owed them his
loyalty.1âwphi1The termination of attorney-client relation
provides no justification for a lawyer to represent an
interest adverse to or in conflict with that of the former
client on a matter involving confidential information which
the lawyer acquired when he was counsel. The client's
confidence once reposed should not be divested by mere
expiration of professional employment.41 This is
underscored by the fact that Atty. Sabitsana obtained
information from Carmen which he used to his advantage
and to the detriment of his client.

from the foregoing disquisition, it can be seen that

petitioners are guilty of bad faith in pursuing the sale of the
lot despite being apprised of the prior sale in respondent's
favor. Moreover, petitioner Atty. Sabitsana has exhibited a
lack of loyalty toward his clients, the Muerteguis, and by
his acts, jeopardized their interests instead of protecting
them. Over and above the trial court's and the CA's
findings, this provides further justification for the award of
attorney's fees, litigation expenses and costs in favor of the
respondent.

Thus said, judgment must be rendered in favor of

respondent to prevent the petitioners' void sale from casting
a cloud upon his valid title.

WHEREFORE, premises considered, the Petition is

DENIED. The January 25, 2007 Decision and the January
11, 2008 Resolution of the Court of Appeals in CA-G.R.
CV No. 79250 are AFFIRMED. Costs against petitioners.

SO ORDERED
 Norte. Since the execution of the deed of sale,
RADIOWEALTH FINANCE COMPANY, petitioner,  appellee Manuelito Palileo who was then
vs. employed at Lianga Surigao del Sur, exercised
MANUELITO S. PALILEO, respondent. acts of ownership over the land through his
mother Rafaela Palileo, as administratrix or
Rolando A. Calang for petitioner. overseer. Appellee has continuously paid the real
Sisenando Villaluz, Sr. for respondent. estate taxes on said land from 1971 until the
present (Exhs. "C" to "C-7", inclusive).

On November 29, 1976, a judgment was rendered

against defendant Enrique T. Castro, in Civil
Case No. 0103145 by the then Court of First
GANCAYCO, J.: Instance of Manila, Branch XIX, to pay herein
defendant-appellant Radiowealth Finance
Company (petitioner herein), the sum of
If the same piece of land was sold to two different P22,350.35 with interest thereon at the rate of
purchasers, to whom shall ownership belong? Article 1544 16% per annum from November 2, 1975 until
of the Civil Code provides that in case of double sale of an fully paid, and the further sum of P2,235.03 as
immovable property, ownership shall be transferred: (1) to attorney's fees, and to pay the costs. Upon the
the person acquiring it who in good faith first recorded it in finality of the judgment, a writ of execution was
the Registry of Property; (2) in default thereof, to the issued. Pursuant to said writ, defendant provincial
person who in good faith was first in possession; and (3) in Sheriff Marietta E. Eviota, through defendant
default thereof, to the person who presents the oldest title, Deputy Provincial Sheriff Leopoldo Risma,
provided there is good faith. There is no ambiguity levied upon and finally sold at public auction the
regarding the application of the law with respect to lands subject land that defendant Enrique Castro had
registered under the Torrens System. Section 51 of sold to appellee Manuelito Palileo on April
Presidential Decree No. 1529 (amending Section 50 of Act 13,1970. A certificate of sale was executed by the
No. 496 clearly provides that the act of registration is the Provincial Sheriff in favor of defendant-
operative act to convey or affect registered lands insofar as appellant Radiowealth Finance Company, being
third persons are concerned. Thus, a person dealing with the only bidder. After the period of redemption
registered land is not required to go behind the register to has (sic) expired, a deed of final sale was also
determine the condition of the property. He is only charged executed by the same Provincial Sheriff. Both the
with notice of the burdens on the property which are noted certificate of sale and the deed of final sale were
on the face of the register or certificate of title.1 Following registered with the Registry of Deeds.3
this principle, this Court has time and again held that a
purchaser in good faith of registered land (covered by a
Torrens Title) acquires a good title as against all the Learning of what happened to the land, private respondent
transferees thereof whose right is not recorded in the Manuelito Palileo filed an action for quieting of title over
registry of deeds at the time of the sale.2 the same. After a trial on the merits, the court a
quo rendered a decision in his favor. On appeal, the
decision of the trial court was affirmed. Hence, this petition
The question that has to be resolved in the instant petition for review on certiorari.
is whether or not the rule provided in Article 1544 of the
Civil Code as discussed above, is applicable to a parcel of
unregistered land purchased at a judicial sale. To be more In its petition, Radiowealth Finance Company presents the
specific, this Court is asked to determine who, as between following errors:
two buyers of unregistered land, is the rightful owner—the
first buyer in a prior sale that was unrecorded, or the second 1. THE COURT OF APPEALS ERRED IN NOT
buyer who purchased the land in an execution sale whose FINDING THAT THE DEED OF ABSOLUTE
transfer was registered in the Register of Deeds. SALE (EXHIBIT B) ALLEGEDLY
EXECUTED BY ENRIQUE CASTRO IN
The facts as found by the Court of Appeals are as follows: FAVOR OF APPELLEE MANUELITO
PALILEO, WAS SIMULATED OR
FICTITIOUS.
On April 13, 1970, defendant spouses Enrique
Castro and Herminia R. Castro sold to plaintiff-
appellee Manuelito Palileo (private respondent 2. THE COURT OF APPEALS ERRED IN NOT
herein), a parcel of unregistered coconut land FINDING APPELLEE MANUELITO PALILEO
situated in Candiis, Mansayaw, Mainit, Surigao AS ADMINISTRATOR ONLY OF THE
del Norte. The sale is evidenced by a notarized DISPUTED PROPERTY; AND
Deed of Absolute Sale (Exh. "E"). The deed was
not registered in the Registry of Property for 3. THE COURT OF APPEALS ERRED IN NOT
unregistered lands in the province of Surigao del FINDING DEFENDANT-APPELLANT
 RADIOWEALTH FINANCE COMPANY The case of Carumba vs. Court of Appeals6 is a case in
OWNER OF THE DISPUTED PROPERTY BY point. It was held therein that Article 1544 of the Civil
REASON OF THE CERTIFICATE OF SALE Code has no application to land not registered under Act
AND THE DEED OF FINAL SALE WHICH No. 496. Like in the case at bar, Carumba dealt with a
WERE ALL REGISTERED IN THE REGISTER double sale of the same unregistered land. The first sale
OF DEEDS, HENCE, SUPERIOR TO THAT OF was made by the original owners and was unrecorded while
THE DEED OF SALE IN POSSESSION OF the second was an execution sale that resulted from a
MANUELITO PALILEO, FOR BEING NOT complaint for a sum of money filed against the said original
REGISTERED.4 owners. Applying Section 35, Rule 39 of the Revised Rules
of Court,7 this Court held that Article 1544 of the Civil
As regards the first and second assigned errors, suffice it to Code cannot be invoked to benefit the purchaser at the
state that findings of fact of the Court of Appeals are execution sale though the latter was a buyer in good faith
conclusive on this Court and will not be disturbed unless and even if this second sale was registered. It was
there is grave abuse of discretion. The finding of the Court explained that this is because the purchaser of unregistered
of Appeals that the property in question was already sold to land at a sheriffs execution sale only steps into the shoes of
private respondent by its previous owner before the the judgment debtor, and merely acquires the latter's
execution sale is evidenced by a deed of sale. Said deed of interest in the property sold as of the time the property was
sale is notarized and is presumed authentic. There is no levied upon.
substantive proof to support petitioner's allegation that the
document is fictitious or simulated. With this in mind, We Applying this principle, the Court of Appeals correctly held
see no reason to reject the conclusion of the Court of that the execution sale of the unregistered land in favor of
Appeals that private respondent was not a mere petitioner is of no effect because the land no longer
administrator of the property. That he exercised acts of belonged to the judgment debtor as of the time of the said
ownership through his mother also remains undisputed. execution sale.

Going now to the third assigned error which deals with the WHEREFORE, in view of the foregoing, the decision of
main issue presented in the instant petition, We observe the Court of Appeals in CA-G.R. CV No. 10788 is hereby
that the Court of Appeals resolved the same in favor of AFFIRMED. No costs.
private respondent due to the following reason; what the
Provincial Sheriff levied upon and sold to petitioner is a SO ORDERED
parcel of land that does not belong to Enrique Castro, the
judgment debtor, hence the execution is contrary to the
directive contained in the writ of execution which
commanded that the lands and buildings belonging to
Enrique Castro be sold to satisfy the execution.5

There is no doubt that had the property in question been a

registered land, this case would have been decided in favor
of petitioner since it was petitioner that had its claim first
recorded in the Registry of Deeds. For, as already
mentioned earlier, it is the act of registration that operates
to convey and affect registered land. Therefore, a bona
fide purchaser of a registered land at an execution sale
acquires a good title as against a prior transferee, if such
transfer was unrecorded.

However, it must be stressed that this case deals with a

parcel of unregistered land and a different set of rules
applies. We affirm the decision of the Court of Appeals.

Under Act No. 3344, registration of instruments affecting

unregistered lands is "without prejudice to a third party
with a better right". The aforequoted phrase has been held
by this Court to mean that the mere registration of a sale in
one's favor does not give him any right over the land if the
vendor was not anymore the owner of the land having
previously sold the same to somebody else even if the
earlier sale was unrecorded.
 Sometime in March 1966. defendant St.
REPUBLIC OF THE PHILIPPINES, (Represented by Jude's Enterprises, Inc. subdivided Lot
the Acting Commissioner of Land No. 865-B-1 under subdivision plan
Registration), petitioner,  (LRC) PSD-55643 and as a result
vs. thereof the Register of Deeds of
COURT OF APPEALS, Spouses CATALINO SANTOS Caloocan City cancelled TCT No.
and THELMA BARRERO SANTOS, ST. JUDE'S 22660 and in lieu thereof issued
ENTERPRISES, INC., Spouses DOMINGO Certificates of Title Nos. 23967 up to
CALAGUIAN and FELICIDAD CALAGUIAN, 24068 inclusive, all in the name of
VIRGINIA DELA FUENTE and LUCY defendant St. Jude's Enterprises, Inc.
MADAYA, respondents. The subdivision of lot 865-B-1 [which
was] covered [by] TCT No. 22660 was
later found to have expanded and
enlarged from its original area of
40,523 square meters to 42,044 square
meters or an increase of 1,421 square
PANGANIBAN, J.: meters. This expansion or increase in
area was confirmed by the Land
Registration Commission [to have been
Is the immunity of the government from laches and made] on the northern portion of Lot
estoppel absolute? May it still recover the ownership of lots 865-B-1.
sold in good faith by a private developer to innocent
purchaser for value, notwithstanding its approval of the
subdivision plan issuance of seperate individual certificates Subsequently, defendant St. Jude's
of the title thereto? Enterprises, Inc. sold the lots covered
by TCT Nos. 24013 and 24014 to
defendant Sps. Catalino Santos and
The Case Thelma Barreto Santos[;] TCT No.
24019 to defendant Sps. Domingo
These are the main questions raised in the Petition for Calaguian and Felicidad de Jesus[;]
Review before us, seeking to set aside the November 29, TCT No. 24022 to defendant Virginia
1993 Decision 1 of the Court of Appeals 2 in CA-G.R CV dela Fuente[;] and TCT No. 2402[3] to
No. 34647. The assailed Decision affirmed the ruling 3 of defendant Lucy Madaya. Accordingly,
the Regional Trial Court in Caloocan City, Branch 125, in these titles were cancelled and said
Civil Case No. C-111708, which dismissed petitioner's defendants were issued the following:
Complaint for the cancellation of Transfer Certificates of TCT No. C-43319 issued in the name
Title (TCTs) to several lots in Caloocan City, issued in the of Sps. Santos containing an area of
name of private respondents. 344 square meters[;] TCT No. 55513
issued in the name of defendants Sps.
Calaguian containing an area of 344
In a Resolution 4 dated July 7, 1994, the Court of
square meters[;] TCT 13309 issued in
Appeals denied the Republic's motion for
the name of Sps. Santos[;] TCT No.
reconsideration.
24069 issued in the name of Virginia
dela Fuente containing an area of 350
The Fact square meters[;] and TCT No. C-46648
issued in the name of defendant Lucy
The facts of the case are not disputed. The trial court's Madaya with an area of 350 square
summary, which was adopted by the Court of Appeals, is meters. 5
reproduced below:
[On January 29, 1985, then Solicitor
Defendant St. Jude's Enterprises, Inc. is General Estelito Mendoza filed] an
the registered owner of a parcel of land action seeking . . . the annulment and
known as Lot 865-B-1 of the cancellation of Transfer Certificates of
subdivision plan (LRC) PSD-52368, Title (TCT) Nos. 24015, 24017, 24018,
being a portion of Lot 865-B located in 24020, 24021, 24024, 24025 and 24068
Caloocan City containing an area of issued in the name of defendant St.
40,623 square meters. For Lot 865-B-1 Jude's Enterprises, Inc.[;] Transfer
defendant St. Jude's Enterprises, Inc. Certificates of Title Nos. 13309 and C-
was issued TCT No. 22660 on July 25, 43319 both registered in the name of
1995. Sps. Catalino Santos and Thelma B.
Santos[;] and TCT No. 55513
registered in the name of Sps. Domingo
 Calaguian and Felicidad de Jesus[;] have been subjected to investigation, study and verification
TCT No. 24069 registered in the name by the LRC, there was no one to blame for the increase in
of Virginia dela Fuente[;] and TCT No. the area "but the plaintiff[,] for having allowed and
C-46648 registered in the name of Lucy approved the subdivision plan." Thus, the court concluded,
Madaya, principally on the ground that the government was already "in estoppel to question the
said Certificates of Title were issued on approved subdivision plan."
the strength of [a] null and void
subdivision plan (LRC) PSD-55643 The trial court also took into account the "absence of
which expanded the original area of complaints from adjoining owners whose supposed lots
TCT No. 22660 in the name of St. [were] encroached upon by the defendants," as well as the
Jude's Enterprises, Inc. from 40,623 fact that an adjoining owner had categorically stated that
square meters to 42,044 square meters there was no such encroachment. Finding that Spouses
upon its subdivision. Santos, Spouses Calaguian, Dela Fuente and Madaya had
bought their respective lots from St. Jude for value and
Defendants Virginia dela Fuente and good faith, the court held that their titles could no longer be
Lucy Mandaya were declared in default questioned, because under the Torrens system, such titles
for failure to file their respective had become absolute and irrevocable. As regards the
answer within the reglementary period. Republic's allegation that it had filed the case to protect the
integrity of the said system, the court said:
Defendants Sps. Catalino Santos and
Thelma Barreto Santos, St. Jude's . . . [S]ustaining the position taken by
Enterprises, Inc. and Sps. Domingo the government would certainly lead to
Calaguian and Felicidad Calaguian disastrous consequences. Buyers in
filed separate answers to the complaint. good faith would lose their titles.
Defendants Sps. Domingo Calaguian Adjoining owners who were deprived
and Sps. Catalino Santos interposed of a portion of their lot would be forced
defenses, among others, that they to accept the portion of the property
acquired the lots in question in good allegedly encroached upon. Actions for
faith from their former owner, recovery will be filed right and left[;]
defendant St. Jude's Enterprises, Inc. thus instead of preserving the integrity
and for value and that the titles issued of the Torrens System it would
to the said defendants were rendered certainly cause chaos rather than
incontrovertible, conclusive and stability. Finally, if only to strengthen
indefeasible after one year from the the Torrens System and in the interest
date of the issuance of the titles by the of justice, the boundaries of the
Register of Deeds of Caloocan City. affected properties of the defendants
should not be disturbed and the status
On the other hand, defendant St. Jude's quo should be 
Enterprises, Inc. interposed defenses, maintained.8
among others, that the cause of action
of plaintiff is barred by prior The solicitor general appealed the trial court's Decision to
judgement; that the subdivision plan the Court of Appeals.
submitted having been approved by the
LRC, the government is now in Ruling of the Appelate Court
estoppel to question the approved
subdivision plan; and the plaintiff's
allegation that the area of the Citing several cases 9 upholding the indefeasibility of the
subdivision increased by 1,421 square titles issued under the Torrens system, the appelate court
meters is without any basis in fact and affirmed the trial court. It berated petitioner for bringing the
in law.6 suit only after nineteen (19) years had passed since the
issuance of St. Jude's title and the approval of the
subdivision plan. The pertinent portion of the assailed
Ruling of the Trial Court Decision reads:10

On April 30, 1991, the trial court dismissed the Complaint. . . . Rather than make the Torrens
While the plaintiff sufficiently proved the enlargement or system reliable and stable, [its] act of
expansion of the area of the disputed property, it presented filing the instant suit rocks the system,
no proof that Respondent St. Jude Enterprises, Inc. ("St. as it gives the impression to Torrens
Jude") had committed fraud when it submitted the title holders, like appellees, that their
subdivision plan to the Land Registration Commission titles to properties can be questioned by
(LRC) for approval. Because the plan was presumed to the same authority who had approved
 the same even after a long period of be applied only in those special cases
time. In that case, no Torrens title where the interests of justice clearly
holder shall be at peace with the require it. Nevertheless, the
ownership and possession of his land, government must not be allowed to
for the Commission of Land deal dishonorably or capriciously with
Registration can question his title its citizens, and must not play an
anytime it makes a finding unfavorable ignoble part or do a shabby thing; and
to said Torrens title holder. subject to limitations . . ., the doctrine
of equitable estoppel may be invoked
Undauted, petitioner seeks a review by this Court. 11 against public authorities as well as
against private individuals.
The Issues
In Republic v. Sandiganbayan,15 the government, in its
effort to recover ill-gotten wealth, tried to skirt the
In this petition, the Republic raises the following issues for application of estoppel against it by invoking a specific
our resolution:12 constitutional provision.16 The Court countered: 17

1. Whether or not the government is We agree with the statement that the
estopped from questioning the State is immune from estoppel, but this
approved subdivision plan which concept is understood to refer to acts
expanded the areas covered by the and mistakes of its officials especially
transfer certificates of title in question; those which are irregular (Sharp
International Marketing vs. Court of
2. Whether or not the Court of Appeals Appeals, 201 SCRA 299; 306 [1991];
erred when it did not consider the Republic v. Aquino, 120 SCRA 186
Torrens System as merely a means of [1983]), which peculiar circumstances
registering title to land; are absent in this case at bar. Although
the State's right of action to recover ill-
3. Whether or not the Court of Appeals gotten wealth is not vulnerable to
erred when it failed to consider that estoppel[;] it is non sequitur to suggest
petitioner's complaint before the lower that a contract, freely and in good faith
court was filed to preserve the integrity executed between the parties thereto is
of the Torrens System. susceptible to disturbance ad
infinitum.A different interpretation will
lead to the absurd scenario of
We shall discuss the second and third questions together. permitting a party to unilaterally
Hence, the issues shall be (1) the applicability of estoppel jettison a compromise agreement which
against the State and (2) the Torrens system. is supposed to have the authority of res
judicata (Article 2037, New Civil
The Court's Ruling Code), and like any other contract, has
the force of law between parties thereto
(Article 1159, New Civil Code;
The petition is bereft of merit.
Hernaez vs. Kao, 17 SCRA 296 [1996];
6 Padilla, Civil Code Annotated, 7th
First Issue: ed., 1987, p. 711; 3 Aquino, Civil
Code, 1990 ed., p. 463). . . .
Estoppel Against the Government
The Court further declared that "(t)he real office of the
The general rule is that the State cannot be put in estoppel equitable norm of estoppel is limited to supply[ing]
by the mistakes or errors of its officials or deficiency in the law, but it should not supplant positive
agents.13However, like all general rules, this is also subject law." 18
to exception, viz.:14
In the case at bar, for nearly twenty years (starting from the
Estoppels against the public are little issuance of St. Jude's titles in 1996 up to the filing of the
favored. They should not be invoked Complaint in 1985), petitioner failed to correct and recover
except in a rare and unusual the alleged increase in the land area of St. Jude. Its
circumstances, and may not be invoked prolonged inaction strongly militates against its cause, as it
where they would operate to defeat the is tantamount to laches, which means "the failure or
effective operation of a policy adopted neglect, for an unreasonable and unexplained length of
to protect the public. They must be time, to do what which by exercising due diligence could or
applied with circumspection and should should have been done earlier; it is negligence or omission
to assert a right within a reasonable time, warranting a The main purpose of the Torrens
presumption that the party entitled to assert it either has System is to avoid possible conflicts of
abandoned it or declined to assert it."19 title to real estate and to facilitate
transactions relative thereto by giving
The Court notes private repondents' argument that, prior to the public the right to rely upon the
the subdivision, the surveyors erred in face of a Torrens Certificate of the Title
the original survey of the whole tract of land covered by and to dispense with the need of
TCT No. 22660, so that less than the actual land area was inquiring further, except when the party
indicated on the title. Otherwise, the adjoining owners concerned had actual knowledge of
would have complained upon the partition of the land in facts and circumtances that should
accordance with the LRC-approved subdivision plan. As it impel a reasonably cautious man to
is, Florenci Quintos, the owner of the 9,146 square-meter make such further inquiry (Pascua v.
Quintos Village adjoining the northern potion of St. Jude's Capuyoc, 77 SCRA 78). Thus, where
property (the portion allegedly "expanded"), even attested innocent third persons relying on the
on August 16, 1973 that "there [was] no everlapping of correctness of the certificate thus
boundaries as per my approved plan (LRC) PSD 147766 issued, acquire rights over the property,
dated September 8, 1971." 20 None of the other neighboring the court cannot disregard such rights
owners ever complained against St. Jude or the purchaser (Director of Land v. Abache, et al., 73
of its property. It is clear, therefore, that there was no actual Phil. 606).
damage to third persons caused by the resurvey and the
subdivision. In another case, 25 this Court further said:

Significantly, the other private respondents — Spouses The Torrens System was adopted in
Santos, Spouses Calaguian, Dela Fuente and Madaya — this country because it was believed to
bought such "expanded" lots in good faith, relying on the be the most effective measure to
clean certificates of St. Jude, which had no notice of any guarantee the integrity of land titles and
flaw in them either. It is only fair and reasonable to apply to protect their indefeasibility once the
the equitable principle of estoppel by laches against the claim of ownership is established and
government to avoid an injustice 21 to the innocent recognized. If a person purchases a
purchasers for value. piece of land on the assurance that the
seller's title thereto is valid, he should
Likewise time-settled is the doctrine that where innocent not run the risk of being told later that
third persons, relying on the correctness of the certificate of his acquisition was ineffectual after all.
title, acquire rights over the property, courts cannot This would not only be unfair to him.
disregard such rights and order the cancellation of the What is worse is that if there were
certificate. Such cancellation would impair public permitted, public confidence in the
confidence in the certificate of title, for everyone dealing system would be eroded and land
with property registered under the Torrens system would transactions would have to be attended
have to inquire in very instance whether the title has been by complicated and not necessarily
regularly issued or not. This would be contrary to the very conclusive investigations and proof of
purpose of the law, which is to stabilize land titles. Verily, ownership. The further consequence
all persons dealing with registered land may safely rely on would be that land conflicts could be
the correctness of the certificate of title issued therefor, and even more abrasive, if not even violent.
the law or the courts do not oblige them to go behind the The Government, recognizing the
certificate in order to investigate again the true condition of worthy purposes of the Torrens System,
the property. They are only charged with notice of the liens should be the first to accept the validity
and encumbrances on the property that are noted on the of the titles issued thereunder once the
certificate.22 conditions laid down by the law are
satisfied [Emphasis supplied.]
When private respondent-purchasers bought their lots from
St. Jude, they did not have to go behind the titles thereto to Petitioner never presented proof that the private
verify their contents or search for hidden defects or respondents who had bought their lots from St. Jude were
inchoate rights that could defeat their rights to said lots. buyers in bad faith. Consequently, their claim of good faith
Although they were bound by liens and encumbrances prevails. A purchaser in good faith and for value is one who
annonated on the titles, private respondents-purchasers buys the property of another without notice that some other
could not have had notice of defects that only an inquiry person has right to or an interest in such property; and who
beyond the face of the titles could have satisfied. 23 The pays a full and fair price for the same at the time of such
rationale for this presumption has been stated thus:24 purchase or before he or she has notice of the claims or
interest of some other person.26 Good faith is the honest
intention to abstain from taking any unconsientious
advantage of another.27
Furthermore, it should be stressed that the total area of 96,930 sq. meters
forty thousand six hundred twenty-three (40,623) square
meters indicated on St. Jude's original title (TCT No, ———
22660) was not an exact area. Such figure was followed by
the phrase "more or less." This plainly means that the land
area indicated was not precise. Atty. Antonio H. Noblejas, f. There is no allegation whatever in the
who became the counsel of St. Jude subsequent to his Perez report that there was no error in
tenure as0 Land Registration Commissioner, offers a laying out the metes and bound of Lot
sensible explanation. In his letter 28 to the LRC dated 865-B-1 in Plan (LRC) Psd-55643 as
November 8, 1982, he gave the following information: specified in Technical Description of
the said lot set forth in T.C.T. No. N-
22660 covering the same. There is
a. Records show that our client owned a likewise no allegation, on the contrary
large tract of land situated in an area there is no confirmation from the
cutting the boundary of Quezon City boundary owner on the northern side.
and Caloocan City, then known as Lot Mr. Florencio Quintos, that there is no
865-B, Psd 60608, and described in overlapping of boundaries on the
T.C.T. No. 100412, containing an area northern side of Lot 865-B-1, Psd-
of 96.931 sq. meters, more or less. 55643.

b. It will be noted that on the northern g. We respectfully submit that the area
portion of this lot 865-B, Psd-60608, of 42, 044 sq. meters stated in Plan
is . . . Lot 865-A, Psd-60608, which (LRC) Psd-55643 as the size of Lot
means that at previous point of time, 865-B-a, is the more accurate area,
these 2 lots composed one whole tract confirmed by the Perez report 'as per
of land. surveyor[']s findings on the ground,
which rectifies previous surveyor's
c. On December 23, 1995, Lot 865-B, error in computing its area as 40,622
Psd-60608, was subdivided into 2 lots, sq. meters in Plan (LRC) Psd-52368,
denominated as Lot 865-B-1, with an which is about 3.5% tolerable error
area of 40,622 sq. meters, more or less, (1,422 divided by 40,622 = 035).
on the Caloocan side, and Lot 865-B-2,
with an area of 56,308 sq. meters, more [h.] It is well settled that in the
or less, Quezon City side, under identification of a parcel of land
plan (LRC) Psd-52368. covered by certificate of title, what is
controlling are the metes and bounds as
d. On March 1-10, 1966, Lot 865-B-1, set forth in its Technical Description
Psd-52368, then covered by T.C.T. No. and not the area stated therein, which is
N-22660, was subdivided into merely an approximation as indicated
residential lots under Plan (LRC)Psd- in the more or less phrase placed after
55643, with a total area of 42,044 sq. the number of square meters.
meters, more or less.
i. There is thus no unauthorized
e. It will be noted that Lot 865-B, Psd- expansion of the survey occasioned by
60608, covered by T.C.T. No. 100412, the subdivision of Lot 865-B-1 under
contained an area of 96,931 sq. meters, Plan (LRC) Psd-55643; consequently,
more or less, but when subdivided LRC Circular No. 167, Series of 1967,
under Plan (LRC) Psd-52368, into 2 finds no application thereto, as to bar
lots its total area shrank by 1 sq. meter, the processing and registration in due
to wit: course of transactions involving the
subdivision lots of our client, subject
Lot 865-B-1, Psd- hereof. This is apart from the fact that
52368 = 40,622 sq. LRC Circular No. 167 has not been
meters implemented by the Register of Deeds
of Caloocan City or any proper
government authority since its issuance
Lot 865-B-2, Psd- in 1967, and that, in the interest of
52368 = 56,308 sq. justice and equity, its restrictive and
meters oppressive effect on transactions over
certificates of titles of subdivisions that
——— allegedly expanded on re-surveys,
 cannot be allowed to continue respected. Otherwise, the integrity of the Torrens system,
indefinitely. (Emphasis supplied.) which petitioner purportedly aims to protect by filing this
case, shall forever be sullied by the ineptitude and
The discrepancy in the figures could have been caused by inefficiency of land registration officials, who are
the inadvertence or the negligence of the surveyors. There ordinarily presumed to have regularly performed their
is no proof, though, that the land area indicated was duties.33
intentionally and fraudulently increased. The property
originally registered was the same property that was We cannot, therefore, adhere to petitioner's submission
subdivided. It is well-settled that what defines a piece of that, in filing this suit, it seeks to preserve the integrity of
titled property is not the numerical data indicated as the the Torrens system. To the contrary, it is rather evident
area of the land, but the boundaries or "metes and bounds" from our foregoing discussion that petitioner's action
of the property specified in its technical description as derogates the very integrity of the system. Time and again,
enclosing it and showing its limits.29 we have said that a Torrens certificate is evidence of an
indefeasible title to property in favor of the person whose
Petitioner miserably failed to prove any fraud, either on the name appears thereon.
part of Private Respondent St. Jude or on the part of land
registration officials who had approved the subdivision WHEREFORE, the petition is hereby DENIED and the
plan and issued the questioned TCTs. Other than its assailed Decision is AFFIRMED.1âwphi1.nêt
peremptory statement in the Complaint that the
"expansion" of the area was "motivated by bad faith with SO ORDERED
intent to defraud, to the damage and prejudice of the
government and public interest," petitioner did not allege
specifically how fraud was perpetrated to cause an increase
in the actual land size indicated. Nor was any evidence
proffered to substantiate the allegation. That the land
registration authorities supposedly erred or committed an
irregularity was merely a conclusion drawn from the "table
survey" showing that the aggregate area of the subdivision
lots exceeded the area indicated on the title of the property
before its subdivision. Fraud cannot be presumed, and the
failure of petitioner to prove it defeats its own cause.

Second Issue:

The Torrens System

True, the Torrens system is not a means of acquiring titles

to lands; it is merely a system of registration of titles to
lands. 30 Consequently, land erroneously included in a
Torrens certificate of title is not necessarily acquired by the
holder of such certificate.31

But in the interest of justice and equity, neither may the

title holder be made to bear the unfavorable effect of the
mistake or negligence of the State's agents, in the absence
of proof of his complicity in a fraud or of manifest damage
to third persons. First, the real purpose of the Torrens
system is to quiet title to land to put a stop forever to any
question as to the legality of the title, except claims that
were noted in the certificate at the time of the registration
or that may arise subsequent thereto.32 Second, as we
discussed earlier, estoppel by laches now bars petitioner
from questioning private respondent's titles to the
subdivision lots. Third, it was never proven that Private
Respondent St. Jude was a party to the fraud that led to the
increase in the area of the property after its subdivision.
Finally, because petitioner even failed to give sufficient
proof of any error that might have been committed by its
agent who had surveyed the property, the presumption of
regularity in the performance of their functions must be
REPUBLIC OF THE PHILIPPINES, Petitioner,  7. That the original and office file copy of said
vs. OCT NO. 3980 kept and to be on file in the
CONCEPCION LORENZO, ORLANDO Registry of Deeds of Isabela is not now available,
FONTANILLA, SAMUEL FONTANILLA, JULIET utmost same was included burned and lost
FONTANILLA, ELIZABETH FONTANILLA, beyond recovery when the office was razed by
ROSELA FONTANILLA, RENATO FONTANILLA fire sometime in 1976, a certification to this
AND EVELYN FONTANILLA,Respondents. effect as issued by the office is hereto marked as
ANNEX "D";
DECISION
8. That for taxation purposes, the lot as covered
LEONARDO-DE CASTRO, J.: by OCT NO. 3980, still in the name of Antonia
Pascua for Lot 18, Cad. 210, with an assessed
value of P16,920.00, x x x;
Before the Court is a petition for review under Rule 45 of
the 1997 Rules of Civil Procedure assailing the
Decision 1dated April 17, 2006 of the Court of Appeals in 9. That no mortgagee’s and/or lessee’s co-
CA-G.R. CV No. 80132, entitled "Concepcion Lorenzo, owner’s copy to the subject OCT NO. 3980 was
Orlando Fontanilla, Samuel Fontanilla, Juliet Fontanilla, ever issued, and likewise no related documents
Elizabeth Fontanilla. RosPln Fontanilla, Renato affecting the land covered thereby is presented
Fontanilla and Evelyn Fontanilla v. Republic of the and pending for registration in favor of any
Philippines." Said Court of Appeals Decision affirmed the person whomsoever, and henceforth, it is free
Decision2 dated August 26, 2003 in LRC Case No. 24-2692 from lien and encumbrance;
of Branch 24, Regional Trial Court (RTC), Echague,
Isabela. xxxx

The genesis of the present case can be traced back to the 11. That in support for the reconstitution of
filing before the trial court on February 11, 2002 of a [OCT] No. 3980, the following documents which
Petition3 for the reconstitution of Original Certificate of may constitute as source or basis for the purpose
Title (OCT) No. 3980 covering a parcel of land measuring are herewith submitted:
811 square meters, situated in Echague, Isabela.
(a) S[E]PIA PLAN with Blue Prints x x
In seeking the reconstitution of OCT No. 3980, respondents x;
averred before the trial court:
(b) Certified technical description of
3. That during the lifetime of Pedro Fontanilla Lot 18, Cad. 210 x x x;
and herein petitioner Concepcion Lorenzo,
husband and wife, respectively, they acquired a (c) Certification by LRA as to the non-
parcel of residential land, x x x; availability of a copy of DECREE NO.
650254 x x x[.]4
4. That subject parcel of land is identical to Lot
18 of Echague Cadastre 210, covered by and During the trial, the testimony of co-respondent Evelyn
embraced under ORIGINAL CERTIFICATE OF Fontanilla- Gozum was offered in order to prove the above-
TITLE NO. 3980 of the Land Records of Isabela, mentioned allegations in the petition. In her testimony, she
in the name of Antonia Pascua as her paraphernal declared that she is the daughter of the late Pedro Fontanilla
property and being the mother of Pedro and co-respondent Concepcion Lorenzo who, during their
Fontanilla; marriage, acquired a parcel of land covered and embraced
by OCT No. 3890 from her grandmother Antonia Pascua as
5. That because of the death of Pedro Fontanilla evidenced by a Deed of Sale. She also averred that the
the lot as covered by the aforesaid title was owner’s duplicate of the said Torrens certificate of title was
settled and adjudicated among the herein later discovered to have been eaten by termites and that the
petitioners, x x x; original copy of the said Torrens certificate of title on file
with the Register of Deeds of Isabela was certified to be
6. That the OWNER’S DUPLICATE COPY OF burned and lost beyond recovery when the office was razed
OCT NO. 3980 was handed and delivered unto by fire of unknown origin on December 4, 1976 as certified
the spouses Pedro Fontanilla and Concepcion to by the Register of Deeds. Since both the original copy on
Lorenzo which they have been keeping only to file and the owner’s duplicate copy are non-existent, she
find out thereafter that it was eaten by white ants and her co-heirs, who are also co-respondents in this case,
(Anay); instituted the petition for reconstitution of lost or destroyed
Torrens certificate of title.5
In its Decision dated August 26, 2003, the trial court (a) HAS THERE BEEN SUFFICIENT
granted respondents’ petition and directed the Register of COMPLIANCE OF ACT 26, REQUIREMENTS
Deeds of Isabela to reconstitute OCT No. 3980 in the name RECONSTITUTING OCT NO. 3890 AND
of Antonia Pascua on the basis of the deed of sale, the ISSUANCE OF ANOTHER OWNER’S
technical description and the sketch plans, and to issue DUPLICATE COPY?
another owner’s duplicate copy of the said Torrens
certificate of title. The dispositive portion of the said ruling (b) DID THE HONORABLE COURT OF
states: APPEALS CORRECTLY SUSTAIN THE
RENDERED DECISION OF THE COURT OF
WHEREFORE, premises considered, judgment is hereby ORIGIN?9
rendered ordering the Register of Deeds of Isabela to
reconstitute the original copy of OCT No. 3980 in the name Petitioner argues that the alleged loss or destruction of the
of Antonia Pascua, on the basis of the deed of sale, the owner’s duplicate copy of OCT No. 3980 has no
technical description and the sketch plans, and to issue evidentiary basis and that there is no sufficient basis for the
another Owner’s Duplicate of the said title after payment of reconstitution of OCT No. 3980. Petitioner likewise
the necessary legal fees. maintains that the findings of fact of the Court of Appeals
are not supported by the evidence on record. Lastly,
Furnish copy of this Order to the Land Registration petitioner insists that, contrary to respondents’ assertion,
Authority, The Register of Deeds of Isabela and the Office the government of the Republic of the Philippines is not
of the Solicitor General.6 estopped by the mistakes, negligence or omission of its
agents.
Petitioner Republic of the Philippines, through the Office
of the Solicitor General, appealed the ruling to the Court of For their part, respondents maintain that they have
Appeals arguing that the trial court erred in granting complied with Section 2 of Republic Act No. 26
respondents’ petition for reconstitution of Torrens title considering that there was no opposition from the Office of
since they failed to present substantial proof that the the Solicitor General (OSG); that the OSG is guilty of
purported original certificate of title was valid and existing estoppel; that there was a valid basis for reconstitution of
at the time of its alleged loss or destruction, and that they OCT No. 3980; that there was compliance with
failed to present sufficient basis or source for jurisdictional requirements; that both the original file copy
reconstitution. and the owner’s copy of the subject OCT for reconstitution
were lost or destroyed beyond discovery; and that questions
The Court of Appeals dismissed petitioners appeal in the of fact are not subject to review by this Court.
assailed Decision dated April 17, 2006, the dispositive
portion of which states: In essence, the focal issue of the present case is whether or
not the reconstitution of OCT No. 3980 was in accordance
WHEREFORE, premises considered, the appeal is with the pertinent law and jurisprudence on the matter.
hereby DISMISSED for lack of merit.7
The petition is impressed with merit.
Hence, the petitioner sought relief before this Court and
relied on the following grounds to support its petition: The relevant law that governs the reconstitution of a lost or
destroyed Torrens certificate of title is Republic Act No.
I 26. Section 2 of said statute enumerates the following as
valid sources for judicial reconstitution of title:
THE COURT OF APPEALS ERRED IN
AFFIRMING THE TRIAL COURT’S ORDER SECTION 2. Original certificates of title shall be
GRANTING RECONSTITUTION OF reconstituted from such of the sources hereunder
ORIGINAL CERTIFICATE OF TITLE NO. enumerated as may be available, in the following order:
3980.
(a) The owner’s duplicate of the certificate of
II title;

THE COURT OF APPEALS ERRED IN ITS (b) The co-owner’s, mortgagee’s, or lessee’s
APPLICATION OF PARAGRAPH F, SECTION duplicate of the certificate of title;
2 OF REPUBLIC ACT NO. 26.8
(c) A certified copy of the certificate of title,
On the other hand, respondents put forward the following previously issued by the register of deeds or by a
issues for consideration: legal custodian thereof;
 (d) An authenticated copy of the decree of "F", Supra & Annex "H", Record, p. 13, respectively). It is
registration or patent, as the case may be, on this premise that paragraph (f) of Section 2, RA 26
pursuant to which the original certificate of title comes to the fore, viz: "Any other document which, in the
was issued; judgment of the court, is sufficient and proper basis for
reconstituting the lost or destroyed certificate of title."13
(e) A document, on file in the Registry of Deeds,
by which the property, the description of which is As correctly pointed out by petitioner, we had emphasized
given in said document, is mortgaged, leased or in Republic v. Holazo14 that the term "any other document"
encumbered, or an authenticated copy of said in paragraph (f) refers to reliable documents of the kind
document showing that its original had been described in the preceding enumerations and that the
registered; and documents referred to in Section 2(f) may be resorted to
only in the absence of the preceding documents in the list.
(f) Any other document which, in the judgment Therefore, the party praying for the reconstitution of a title
of the court, is sufficient and proper basis for must show that he had, in fact, sought to secure such
reconstituting the lost or destroyed certificate of documents and failed to find them before presentation of
title. "other documents" as evidence in substitution is allowed.
Thus, we stated in Holazo that:
As borne out by the records of this case, respondents were
unable to present any of the documents mentioned in When Rep. Act No. 26, Section 2(f), or 3(f) for that matter,
paragraphs (a) to (e) above. Thus, the only documentary speaks of "any other document," it must refer to similar
evidence the respondents were able to present as possible documents previously enumerated therein or
sources for the reconstitution of OCT No. 3980 are those documents ejusdem generis as the documents earlier
that they believed to fall under the class of "any other referred to. The documents alluded to in Section 3(f) must
document" described in paragraph (f). be resorted to in the absence of those preceding in order. If
the petitioner for reconstitution fails to show that he had, in
fact, sought to secure such prior documents (except with
In the assailed April 17, 2006 Decision of the Court of respect to the owner’s duplicate copy of the title which it
Appeals, the appellate court affirmed the trial court’s ruling claims had been, likewise, destroyed) and failed to find
by granting respondents’ petition for reconstitution of OCT them, the presentation of the succeeding documents as
No. 3980 merely on the bases of a purported deed of substitutionary evidence is proscribed.15 (Citation omitted.)
sale,10sketch plan,11 and technical description.12 The relevant
portion of said Decision reads:
Furthermore, in a more recent case, this Court enumerated
what should be shown before an order for reconstitution
The appeal is bereft of merit. can validly issue, namely: (a) that the certificate of title had
been lost or destroyed; (b) that the documents presented by
In granting the petition, the trial court ratiocinated: petitioner are sufficient and proper to warrant reconstitution
of the lost or destroyed certificate of title; (c) that the
"As basis for the reconstitution of the lost title, the deed of petitioner is the registered owner of the property or had an
sale, Exh "M", evidencing transaction over the property, in interest therein; (d) that the certificate of title was in force
addition to the sketch plan, Exh. "E" and the technical at the time it was lost or destroyed; and (e) that the
description, Exh. "D", duly approved under (LRA) PR-02- description, area and boundaries of the property are
00022-R pursuant to the provisions (of) Section 12 of substantially the same and those contained in the lost or
Republic Act No. 26, as embodied in the report filed by the destroyed certificate of title.16
Land Registration Authoriy, Exh. "J", would be sufficient
basis for the reconstitution of the lost title." (p. 3, Rollo, p. In the case at bar, the respondents were unable to discharge
38) the burden of proof prescribed by law and jurisprudence for
the reconstitution of lost or destroyed Torrens certificate of
Appellees presented the approved sketch plan with its blue title. First, respondents failed to prove that the owner’s
print, the certified technical description of the subject lot, duplicate copy of OCT No. 3980 was indeed eaten by
the Deed of Sale executed by Antonia Pascua, the Tax termites while in the custody of respondent Concepcion
Declaration, and Tax Payment Receipts. To the mind of Lorenzo and her late husband Pedro Fontanilla who,
this Court, there was sufficient and preponderant evidence inexplicably, did not execute an affidavit of loss as required
thus presented to warrant the reconstitution of the original by Section 10917 of Presidential Decree No. 1529. Second,
of OCT No. 3980 and the issuance of another Owner’s The Certification18 dated April 23, 2001 issued by the
Duplicate Copy thereof. The enumeration of the Register of Deeds of Ilagan, Isabela did not categorically
preferential documents to be produced, as provided under state that the original copy of OCT No. 3980, which
Section 2 of Republic Act 26 had been substantially respondents alleged to be on file with said office, was
complied with. Certifications of loss of documents were among those destroyed by the fire that gutted the premises
attested to by the custodian thereof, the Land Registration of said office on December 4, 1976. The document only
Authority of Ilagan, Isabela and Quezon City (Exh. stated that said office "could not
give any information/data involving the existence of does not warrant the granting of such
Original/Transfer Certificate of Title No. Lot No. 18, area petition.21 (Citation omitted, emphasis supplied.)
770 sq. m., located at Taggapan, Echague, Isabela." Third,
a comparison between the aforementioned certification and Lastly, on the peripheral issue of whether or not the OSG
the technical description and sketch plan will reveal that should be faulted for not filing an opposition to
there was a discrepancy in the land area of the lot allegedly respondents’ petition for reconstitution before the trial
covered by OCT No. 3980. What was reflected on the court, we rule that such an apparent oversight has no
former was a land area of 770 sq. m. while the latter two bearing on the validity of the appeal which the OSG filed
documents pertained to a land area of 811 sq. m. before the Court of Appeals. This Court has reiterated time
Furthermore, respondents were not able to show adequate and again that the absence of opposition from government
proof that a Torrens certificate of title was issued covering agencies is of no controlling significance because the State
the subject parcel of land or that the same piece of land is cannot be estopped by the omission, mistake or error of its
what is covered by the allegedly lost or destroyed OCT No. officials or agents.22 Neither is the Republic barred from
3980. The Certification19 dated December 3, 2001 issued by assailing the decision granting the petition for
the Land Registration Authority (LRA) which indicates that reconstitution if, on the basis of the law and the evidence
Decree No. 650254 issued on September 1, 1937 is not on record, such petition has no merit.23
among the salvaged decrees on file in the LRA and is
presumed to have been lost or destroyed as a consequence
of World War II does not support respondents’ assertion WHEREFORE, premises considered, the petition
that OCT No. 3980 did exist prior to its loss or destruction is GRANTED. The Decision dated April 17, 2006 of the
because said document failed to show a connection Court of Appeals in CA-G.R. CV No. 80132 and the
between Decree No. 650254 and OCT No. 3980. From the August 26, 2003 Decision of the Regional Trial Court,
foregoing, it is apparent that the conclusion of the Court of Branch 24 of Echague, Isabela are
Appeals that "(t)he enumeration of the preferential hereby REVERSED and SET ASIDE. The petition for
documents to be produced as provided under Section 2 of reconstitution is DENIED.
Republic Act 26 had been substantially complied with" had
no foundation based on the evidence on record. SO ORUERED

Likewise, the deed of sale purportedly between Antonia

Pascua, as seller, and Pedro Fontanilla, as buyer, which
involves OCT No. 3980 cannot be relied upon as basis for
reconstitution of Torrens certificate of title. An examination
of the deed of sale would reveal that the number of the
OCT allegedly covering the subject parcel of land is clearly
indicated, however, the date when said OCT was issued
does not appear in the document. This circumstance is fatal
to respondents’ cause as we have reiterated in Republic v.
El Gobierno de las Islas Filipinas20that the absence of any
document, private or official, mentioning the number of the
certificate of title and the date when the certificate of title
was issued, does not warrant the granting of a petition for
reconstitution. We held that:

We also find insufficient the index of decree showing that

Decree No. 365835 was issued for Lot No. 1499, as a basis
for reconstitution. We noticed that the name of the
applicant as well as the date of the issuance of such decree
was illegible. While Decree No. 365835 existed in the
Record Book of Cadastral Lots in the Land Registration
Authority as stated in the Report submitted by it, however,
the same report did not state the number of the original
certificate of title, which is not sufficient evidence in
support of the petition for reconstitution. The deed of
extrajudicial declaration of heirs with sale executed by
Aguinaldo and Restituto Tumulak Perez and respondent on
February 12, 1979 did not also mention the number of the
original certificate of title but only Tax Declaration No.
00393. As we held in Tahanan Development Corp. v.
Court of Appeals, the absence of any document, private
or official, mentioning the number of the certificate of
title and the date when the certificate of title was issued,
HEIRS OF GREGORIO AND MARY in question, the government’s negotiation committee
VENTURANZA, Petitioners,  assigned a deputy clerk of the Land Registration
vs. Commission (LRC) to verify the true copies of TCT No.
REPUBLIC OF THE PHILIPPINES, Respondent. 2574 in the name of Gregorio Venturanza.

DECISION Per verification, it was found out that Venturanzas’ TCT

No. 2574, was derived from TCT No. RT-40 (140) in the
GARCIA, J.: name of one Florencio Mora (Mora) which covers Lots 1, 2
and 3 of Plan RS-383-D containing a combined area of
23,944,635 square meters or 2,394 hectares, situated in the
By this petition for review under Rule 45 of the Rules of municipality of Buhi, Camarines Sur.
Court, petitioners seek the reversal of the decision1 dated
January 31, 2001 of the Court of Appeals (CA) in CA-G.R.
CV No. 38630, as reiterated in its resolution of March 22, In turn, TCT No. RT-40 (140) appears to have been
2001, denying the petitioners’ motion for reconsideration. reconstituted from TCT No. 140 which was issued to one
The assailed CA decision affirmed [and dismissed the Sebastian Moll on June 7, 1928.
appeal taken by the petitioners from] an earlier decision of
the Regional Trial Court (RTC) of Iriga City, Branch 37, TCT No. 140, on the other hand, appears to be a transfer
which ordered the cancellation of petitioners’ Transfer from Land Registration Case (LRC) No. 3480 issued to one
Certificate of Title (TCT) No. 2574 and the reversion of the Casimiro Natividad.
land covered thereby to the mass of the public domain, in a
suit thereat commenced for the purpose by respondent Upon further investigation, it was discovered that the land
Republic of the Philippines, originally against the spouses subject of LRC No. 3480, originally registered on July 28,
Gregorio Venturanza and Mary Edwards-Venturanza, 1911, covered a parcel of land consisting of only 451
predecessors-in-interest of the herein petitioners. square meters and situated in Tigaon, Camarines Sur.

The petition traces its beginning from a complaint filed by In the report submitted by the LRC deputy clerk, the latter
the Republic of the Philippines, through the Office of the made a finding that the Venturanzas’ TCT No. 2574, a
Solicitor General (OSG), in the RTC of Iriga City, thereat direct transfer from TCT No. RT-40 (140) which was, in
docketed as Civil Case No. IR-122 and raffled to Branch 37 turn, derived from TCT No. 140, covers only a parcel of
thereof, against the Venturanza couple for the cancellation land with an area of 451 square meters and not 23,944,635
of their TCT No. 2574, covering a vast track of land with a square meters or 2,394 hectares which practically comprise
combined area of 23,944, 635 square meters located at the entire Municipality of Buhi.
Buhi, Camarines Sur.
Such was the state of things when, sometime in 1965, in the
Reviewed, the records unfold the following facts and then Court of First Instance (now RTC) of Camarines Sur,
antecedents: the Republic of the Philippines, through the OSG, filed a
complaint for the Cancellation of Transfer Certificate of
The title in question – TCT No. 2574 of the Registry of Title No. 2574 and the Reversion of the Land Described
Deeds of Camarines Sur – was issued sometime in 1959 in Therein to the Republic of the Philippines. Thereat
the name of Gregorio Venturanza, married to Mary originally docketed as Civil Case No. 5973, the complaint
Edwards-Venturanza. The memorandum of registration eventually became Civil Case No. IR-122 which was
shows that TCT No. 2574 was derived from TCT No. RT- raffled to Branch 37 of the court.
40 (140), which is a reconstituted title issued to one
Florencio Mora who sold the property therein described to On April 8, 1992, the trial court came out with its
Gregorio Venturanza in 1956 for ₱107,730.00. The same decision2 ordering the annulment and cancellation of the
memorandum of registration, however, does not show Venturanzas’ TCT No. 2574 and the reversion of the land
when the land covered by TCT No. 2574 was originally covered thereby to the mass of the public domain.
registered and the other data were merely noted as (NA). Dispositively, the decision reads:

In 1964, GregorioVenturanza and the then Abaca WHEREFORE, premises considered, judgment is rendered
Development Board entered into an agreement for purchase in favor of the Republic of the Philippines and against the
and sale of the property covered by TCT No. 2574, defendants ordering the annulment of TCT No. 2574 in the
whereby the former agreed to convey the property to the name of Gregorio Venturanza, ordering the Register of
latter, subject to the approval of the document of sale by the Deeds of Camarines Sur to cancel said title, and reverting
concerned government office. The final sale, however, did the land covered by the questioned title, except that which
not materialize. may have already been alienated by the proper authorities
and lawfully passed to private ownership, to the public
Meanwhile, it appears that in the course of the parties’ domain of the Republic of the Philippines, with costs
negotiation for the sale of the property covered by the title against the defendants.
SO ORDERED. TCT No. 2574 had never been brought within the operation
of said law. As correctly pointed out by the CA to which
In resolving the suit in favor of the Republic, the trial court we are in full accord:
principally anchored its judgment on the ground that the
reconstituted title issued in the name of Florencio Mora xxx the Land Registration Act is not applicable considering
could have been fraudulently secured, hence, does not that the land covered by TCT No. 2574 had never been
legally exist. The court further ruled that since the within the operation of the Land Registration Act because
reconstituted title issued to Florencio Mora is a nullity, then of the irregularities attending the issuance of the
the order for its reconstitution did not attain finality and reconstituted title. As found by the trial court:
therefore may be attacked anytime.
TCT No. RT-40 (140) supposedly reconstituted from TCT
Therefrom, the Venturanzas went on appeal to the CA in no. 140 in the name of Florencio Mora consists of 2,394
CA-G.R. CV No. 38630, arguing that Mora’s reconstituted hectares supposedly situated in Buhi, Camarines Sur. It
title from where their TCT No. 2574 was derived is already appears from the survey plan that the land was surveyed
indefeasible on the ground that upon the lapse of one (1) only in 11 days, which according to Engr. Antonio
year, the decision granting reconstitution of Mora’s title Rodriguez was quite impossible considering the rugged
becomes final. The Venturanzas also claimed that they are terrain and the mountainous features of the area. Moreover,
protected by law as buyers in good faith. Lastly, they it covers timberland.
argued that the Republic’s action for the cancellation of
TCT No. 2574 and the reversion of the land described Significantly, from the exhibits presented by the plaintiff it
therein to the mass of public domain was already barred by can be seen that the resurvey plan (Exh. A) shows that the
the decision of the CA in CA-G.R. No. 20681-R, entitled, survey of Lot Nos. 1, 2 and 3 was based on TCT No. 140
Florencio Mora v. Venancio Infante, et al., which granted and it covered an area of 23,944,635 square meters and
the petition for reconstitution of Mora’s TCT No. RT-40 appeared to have been surveyed on January 20, to January
(140). 31, 1953 or a period of 11 days. Exh. "B" shows that the
area supposedly covered by TCT 2574 is within the
In the herein assailed decision dated January 31, 2001, the timberland, Project 12, Block B, L.C. 646 and Project 19,
CA affirmed that of the trial court. With their motion for Block ALC 761, Exh. "C", the official map of Legaspi City
reconsideration having been denied by the CA in its shows that the land covered by TCT 140, which was issued
resolution3 of May 22, 2001, petitioners as successors-in- on the basis of the resurvey (Exh. "A") is a land situated in
interest of the spouses Venturanza are now with this Court Tigaon, Camarines Sur, while the land covered by TCT No.
via the present recourse raising the same issues already 40 (140) is a vast tract of land in Buhi, Camarines Sur; that
passed upon by the appellate court. it further appears that the lots covered by TCT No. 40 (140)
were supposedly registered in GRLO Sp. Proceedings No.
We DENY. 112 with an area of 23,944,635 square meters but records
of the LRC revealed that GRLO records No. 112 refers to a
land registration case in Iloilo, and not in Camarines Sur.
Petitioners maintain that under Section 112 of Act No. 496 Exh "D" also shows that Mr. Florencio Mora had never
(Land Registration Act), Mora’s reconstituted TCT No. applied for original registration of title covering a land in
RT-40 (140) is already indefeasible the same having the municipality of Buhi, Camarines Sur, and that plan RS-
attained finality one (1) year after the CA granted its 383-D (without the suffix capital letter D) involving Lots 1
reconstitution in CA-G.R. No. 20681-R. Citing the second and 2 situated in the Municipality of Calawag, Quezon, was
paragraph of Section 31 of P.D. No. 15294 which reads: the subject of Land Registration Case No. 322, GRLO
Record No. 13804 with Maximina Zepeda as applicant.
The decree of registration shall bind the land and quiet title
thereto, subject only to such exceptions or liens as may be The stench of anomaly became at once pervading when we
provided by law. It shall be conclusive upon and against all consider the evidence submitted by the plaintiff. The land
persons, including the National Government and all practically covers the Municipality of Buhi and are being
branches thereof, whether mentioned by name in the claimed and possessed by claimants, who appeared as
application or notice, the same being included in the intervenors in this case. The Venturanzas never materially
general description "to all whom it may concern", and physically occupied the property because there are
actual occupants and possessors. The Venturanzas only
petitioners contend that the two courts below were without asserted ownership over the property in papers but not in
authority to annul TCT No. 2574 issued in the name of physical possession.5
Gregorio Venturanza.
As a necessary consequence, no court could have ever
Petitioners are wrong. Clearly, the provisions relied upon acquired jurisdiction to order the reconstitution of Mora’s
refer to original decrees of registration and not to orders of TCT No. RT-40 (140) over the land which has never been
reconstitution. As it is, petitioners cannot even seek refuge originally registered. As aptly pointed out by the trial court:
in the Land Registration Act because the land covered by
The evidence shows that TCT No. 2574, the title in alienated.8 A certificate of title covering inalienable lands
question, derived its existence from RT-40 (140) in the of the public domain is void and can be cancelled in
name of Florencio Mora which was a reconstituted title whosever hand said title may be found.9 Thus, we have
based on TCT No. 140 allegedly obtained by Florencio ruled that a certificate of title is void when it covers
Mora during the Japanese occupation. The records of the property of the public domain classified as forest or timber
Register of Deeds of Camarines Sur, however, do not show and mineral lands. And any title issued on non-disposable
how the land covered by TCT No. 140 supposedly in the lands even if in the hands of alleged innocent purchaser for
name of Florencio Mora was registered. Neither is there a value, shall be cancelled.10 1avvphi1
decree number, when said decree was entered, the OCT
number or LRC Record Number. 6 All told, the Court finds no reversible error in the assailed
decision of the CA, affirming that of the trial court.
Corollarily, petitioners’ argument that the Republic’s action
for the cancellation of TCT No. 2574 and the reversion of WHEREFORE, the instant petition is DENIED and the
the land covered thereby to the State is barred by the assailed decision of the CA is AFFIRMED.
decision of the CA in CA-G.R. No. 20681-R has no leg to
stand on.
No pronouncement as to costs.
Aside from the fact that no court could have ever acquired
jurisdiction to order the reconstitution of Mora’s title over SO ORDERED
the property which has never been originally registered, the
judgment in CA-G.R. No. 20681-R did not operate as res
judicata which would bar the Republic’s action because
there was no identity of cause of action between CA-G.R.
No. 20681-R and the instant case.

The issue in CA-G.R. No. 20681-R was whether or not

Mora’s evidence in Special Proceedings No. 674 and the
procedures adopted by him for the reconstitution of
certificate of title alleged to have been lost or destroyed
were in conformity with the provisions of Republic Act No.
26. The questions of ownership and whether or not the
property or portion thereof was registrable, being a
timberland, were never put at issue in CA-G.R. No. 20681-
R. Neither the non-existence of the original title from
which Mora’s TCT No. RT-40 (140) and petitioners’ TCT
No. 2574 were derived, nor the non-registrability of the
timberland included in the area in question which constitute
Republic’s cause of action against the herein petitioners,
were ever raised, much less, decided by the CA in CA-G.R.
No. 20681-R.

Petitioners also claim that they are protected by law

considering that they were buyers in good faith.

Again, this assertion is without basis considering that

Mora’s reconstituted TCT No. RT-40 (140), from where
petitioners’TCT No. 2574 was derived, is void. The only
way by which Mora could have acquired ownership over
the subject parcels of land and validly transfer that
ownership to the petitioners was for Mora to apply for their
registration in his own name.

What makes petitioners’ cause doubly undeserving of merit

is the finding of the two courts below that the land subject
matter of this case is part timberland,7 a finding not even
once disputed by petitioners. It is, thus, safe to conclude
that the land subject of TCT No. 2574 could not have been
registered in the name of petitioners or their predecessors-
in-interest for the simple reason that under the Constitution,
timberlands, which are part of the public domain, cannot be
 In response to the Solicitor General's Comment,
REPUBLIC OF THE PHILIPPINES, Represented by respondents submitted a Report, dated 5 September 1996
the Land Registration Authority, petitioner,  ("First Report"), signed by Benjamin Bustos ("Bustos"),
vs. Chief, Reconstitution Division, LRA. The First Report,
SPOUSES ROBERTO and MARINA which was endorsed7 to the trial court in a letter signed by
SANCHEZ, respondents. Salvador L. Oriel ("Oriel"), Chief, Docket Division, LRA,
reads in full:
DECISION
REPORT
CARPIO, J.:
COMES NOW the Land Registration Authority
The Case and to the Honorable Court respectfully reports
that:
This is a petition for review1 of the Decision2 dated 31
August 2000 and Resolution dated 17 November 2000 of (1) The present petition seeks the reconstitution
the Court of Appeals. The 31 August 2000 Decision of Transfer Certificate of Title No. 252708,
granted the petition of respondent spouses Roberto and allegedly lost or destroyed and supposedly
Marina Sanchez ("respondents") to set aside the ruling of covering Lots 12, 13, 14, 15, & 16 all of Blocks
the Regional Trial Court, Quezon City, Branch 225 ("trial 5, of (LRC) Psd-4786, respectively, on the basis
court") in a suit for reconstitution of title. The 17 of the owner's duplicate thereof, reproductions of
November 2000 Resolution denied the motion for which, not certified by the clerk of Court, as
reconsideration of petitioner Land Registration Authority required under LRC circular 35, Series of 1983,
("petitioner"). were submitted to this Authority.

The Facts (2) The technical description of the consolidation

of Lots, 12, 13, 14, 15 & 16 all of Block 5, Psd-
4786, appearing in the reproduction of Transfer
On 28 May 1996, respondents filed a petition ("LRC Case Certificate of Title No. 252708, respectively,
No. Q-96-8296") in the trial court to reconstitute the have been examined and verified against the
original of Transfer Certificate of Title No. 252708 ("TCT technical description on file in the Volume 2753
No. 252708"), covering a parcel of land measuring 2,991 in the Vault Section Docket Division, this
square meters ("Lot 1").3 Respondents claimed that TCT Authority. Said technical description when
No. 252708 was issued in the name of respondent Marina plotted in the Municipal Index Sheet No. 3669-C
Sanchez ("Marina") by the Register of Deeds, Quezon City. do [sic] not appear to overlap previously
Respondents alleged that the original of TCT No. 252708 plotted/decreed properties in the area.
was among the documents destroyed by the fire which
razed the Office of the Register of Deeds, Quezon City in
June 1988. Respondents sought reconstitution under The technical description of Lot 1, Pcn-04-
Section 3(a)4 of Republic Act No. 265 ("RA 26") based on 000007 of the cosolidation [sic] of Lots 12, 13,
Marina's duplicate title. 14, 15 & 16 of Block 5, appearing in the
reproductions of Transfer Certificate of Title No.
252708, respectively have been examined and
The trial court scheduled the case for hearing on 15 August verified against the Lot Description on file in the
1996. The notice of hearing dated 30 May 1996 was vault section, Docket Division, this Authority.
published in the 8 and 15 July 1996 issues of the Official Said technical descriptions when plotted in the
Gazette and posted at the main entrance of the City Hall Municipal Index Sheet No. 3669-C do not appear
and the Hall of Justice, Quezon City on 1 July 1996. to overlap previously plotted/decreed properties
Petitioner, the Office of the Solicitor General, the Land in the area.
Management Section, Surveys Division of the Department
of Environment and Natural Resources, the Office of the
Quezon City Prosecutor, and the Register of Deeds, WHEREFORE, the foregoing information anent
Quezon City were furnished copies of the notice of hearing. the lots in question is respectfully submitted for
consideration in the resolution of the instant
petition, and if the Honorable Court, after notice
The Solicitor General filed his Comment to the petition, and hearing, finds justification pursuant to
noting that since the petition is based on Section 3(a) of RA Section 15 of the Republic Act No. 26 to grant
26, the trial court should defer acting on the petition until the same, the owners [sic] duplicate of Transfer
the Land Registration Authority (LRA) has submitted its Certificate of Title No. 252708 may be used as
Report on the petition as required under Land Registration sources [sic] of the desired reconstitution
Commission (now LRA) Circular No. 35 ("Circular No. pursuant to Section 3 (a) of said Act. Provided,
35").6 however, that in case the petition is granted, the
reconstituted title should be made subject to such
 encumbrances as maybe subsisting, and provided, of the Notice of Hearing dated May 30, 1996,
further, that no certificate of title covering the submitted to this Authority. Attached also to our
same parcels of land exists in the office of the records of this case is a xerox copy of the
Register of Deeds Concerned [sic]. purported Transfer Certificate of Title No.
252708 covering Lot 1, Pcn-04-000007 in the
Quezon City, Philippines, September 5, 1996. name of Marina Sanchez, not certified by the
Clerk of Court, as required under LRC Circular
35, Series of 1983.
REYNALDO Y. MAULIT
Administrator (2) In the 1st Indorsement dated October 21,
1997 of Engr. Alberto H. Lingayo, Acting Chief,
By: Ordinary and Cadastral Decree Division, this
Authority, xerox copy attached as Annex "A", the
[Sgd.] following information are stated relative to the
above-entitled petition and its enclosures[] to wit:
BENJAMIN M. BUSTOS
Reconstituting Officer & Chief, 1. On or about October 1, 1997, a certain Marvin
Reconstitution Division8 Bautista came to this office to inquire about the
above petition, showing a copy of the
reconstituted title No. RT-115027 (252708) and a
As no opposition was filed against the petition, the trial copy of a report purportedly issued by this
court allowed respondents to present evidence ex Authority, xerox copies attached as Annexes "B"
parte.Apart from the First Report, respondents also & "C";
presented a Certification, dated 14 December 1994, of the
Quezon City Register of Deeds, that the original of TCT
2. We checked our records and found out that on
No. 252708 was among those destroyed in the 1988 fire.
August 6, 1996, we sent a letter to the Clerk of
Respondents further presented a Certification, dated 14
Court requiring petitioner to submit to this
May 1996, of the Office of the City Treasurer, Quezon
Authority, certain documents,
City, confirming that respondents last paid the real estate
however, petitioner has not yet complied as of
taxes on Lot No. 1 in January 1996.
this date, hence, we could not have rendered a
report, xerox copy attached as Annex "D";
The Ruling of the Trial Court
3. On October 2, 1997, we secured from the
In its Order dated 28 October 1996 ("28 October 1996 RTC Branch 225, Quezon City, certified
Order"), the trial court granted reconstitution and ordered copies of pertinent documents relative to the
TCT No. 252708 reconstituted. The 28 October 1996 Order above-petition and found out that there is
became final on 6 January 1997. The Register of Deeds, indeed a copy of a fake LRA Report, copies
Quezon City issued to respondents reconstituted Transfer attached hereto;
Certificate of Title No. RT-115027 (252708) ("TCT No.
RT-115027").
4. Initial verification of the purported TCT
No. 252708 reveals that the same is a
In a letter dated 4 November 1997, Oriel submitted to the questionable title, because, among other
trial court another Report, dated 24 October 1997 ("Second reasons, the Serial No. 3002163 appearing on
Report"), also signed by Bustos. Oriel informed the trial the face of the certificate pertains to x x x
court that the First Report was fake. The Second Report, judicial forms issued to the Registry of Deeds
which recommended that the trial court set aside the 28 of Manila on January 13, 1976, as per records
October 1996 Order, reads: on file at the Property Section, this Authority;
and it overlaps properties covered by TCT
REPORT Nos. 187042 and 187040 when plotted on our
Municipal Index Map.
COMES NOW the Land Registration Authority,
and to the Honorable Court respectfully reports 5. It is suggested that this case be referred to
that: proper authorities for investigation and
prosecution of the perpetrators, and that the order
of reconstitution rendered by the court be
(1) The above-entitled case appears to seek the
recommended vacated or set aside because it was
reconstitution of Transfer Certificate of Title No.
obtained through fraud and forgery.
252708 allegedly lost or destroyed and
supposedly covering Lot 1, Pcn-04-000007,
situated at Quezon City, as indicated in the copy WHEREFORE, the foregoing observation anent
the lot in question is respectfully submitted for
 the information and guidance of the Honorable In its Order of 17 July 1998 ("17 July 1998 Resolution"),
Court, with the recommendation that the order of the trial court set aside the 28 October 1996 Order and
reconstitution rendered relative to the purported dismissed LRC Case No. Q-96-8296. The trial court held:
Transfer Certificate of Title No. 252708 be
ordered vacated or set aside and the Records reveal, x x x, that TCT No. 25[2]708, the
corresponding title that was issued be declared title to be reconstituted, overlaps TCT Nos.
null and void. 187040 and 187042. Petitioners' design of having
their title reconstituted, notwithstanding the fact
That the person[] or persons responsible for the that the same is covered in two other titles, eludes
reconstitution of this questionable title be the comprehension of this Court.
investigated and if evidence warrants be charged
or prosecuted in Court. xxxx

Quezon City, Philippines, October 24, 1997. The unscrupulous manner by which the
petitioners misled the Court is glaring in two (2)
REYNALDO Y. MAULIT instances, to wit: 1) the petition unceremoniously
Administrator omitted the names of the registered owners of
TCT Nos. 187040 and 187042; and 2) the
spurious LRA Report submitted by the
By: petitioners.

[Sgd.] This Court is of the view that the failure to notify

the registered owners of TCT Nos. 187040 and
BENJAMIN M. BUSTOS 187042 of the Reconstitution proceeding proved
Reconstituting Officer & Chief, to be a mistake.
Reconstitution Division9
Section 13, Republic Act No. 26 x x x provides
On 24 March 1998, petitioner filed a Manifestation and that "x x x x The Court shall likewise cause a
Motion to set aside the 28 October 1996 Order. Petitioner copy of the notice to be sent, by registered mail
contended that considering the Second Report, respondents' or otherwise, at the expense of the petitioner, to
petition should be considered as having been filed under every person named therein whose address is
Section 3(f)10 of RA 26, that is, based on "any other known, at least thirty days prior to the date of the
document." Petitioner pointed out that under Section 1311 in hearing. Said notice shall state among other
relation to Section 1212 of RA 26, the notice of a petition things, the number of the lost or destroyed
for reconstitution of lost or destroyed titles based on certificate[] of title[,] if known, the name of the
Section 3(f) should not only be published and posted but registered owner, the name[s] of the occupants or
also served on, among others, the owners of the adjoining persons in possession of the property,
properties. For non-compliance with this requirement, the the owner[s] of the adjoining properties and all
trial court did not acquire jurisdiction over LRC Case No. other interested parties, the location, area and
Q-96-8296. boundaries of the property, and the date on which
all persons having any interest therein, must
appear and file their claim o[r] objection to the
Respondents opposed petitioner's motion, primarily on the
petition. The petitioner shall, at the hearing,
ground that the 28 October 1996 Order had become final.
submit proof of the publication, posting and
service of the noticeas directed by the court."
The heirs of Mario Uy ("Heirs"), whose predecessor-in-
interest allegedly owned Lot No. 12 covered by Transfer
Petitioners' failure to comply with this provision
Certificate of Title No. 187042, filed an "amicus
is a fatal defect for the same is mandatory and
curiae" brief disclosing that they have caused the filing of
jurisdictional (Ortigas and Company Limited
criminal complaints against respondents for Falsification of
Partnership vs. Velasco, 234 SCRA 435).
TCT No. 252708 (Criminal Case No. 77668) and Use of
Falsified Public Document (Criminal Case No.
90649).13 Mario Uy and Maria Corazon Uy-Zalamea When this Court issued the questioned order
("Zalamea), the latter being the alleged owner of Lot No. dated October 28, 1996, it was under the
13 covered by TCT No. 187042, had earlier sued impression that there was no legal impediment
respondents in the Regional Trial Court, Quezon City, for the reconstitution of TCT No. 252708. Had it
Branch 227 ("Civil Case No. Q-96-29545") for quieting of been apprised at that time that the LRA report
title, nullity of [TCT No. 252708], recovery of possession submitted by the petitioner was spurious then it
and damages.14 would not have issued the same.15 (Italicization in
the original)
Respondents sought reconsideration but the trial court already been issued on 06 January 1997.
denied their motion on 4 January 1999. Presumably, the proper parties received a copy of
the Order dated 28 October 1996 on or before 21
Respondents filed a petition for certiorari in the Court of December 1996. Entry of Judgment having been
Appeals. The appellate court initially dismissed the petition made on 06 January 1997, a petition for relief
for respondents' failure to submit a certified true copy or from judgment should have been filed on or
duplicate original of the trial court's 17 July 1998 and 4 before 05 July 1997. The Manifestation and
January 1999 Resolutions. However, on respondents' Motion was only filed on 24 March 1998, long
motion, the Court of Appeals, without giving due course to after the order of reconstitution had become final
the petition, required petitioner and respondents to file and a reconstituted title actually issued
Comment and Reply, respectively. petitioners. There having been no sufficient
evidence to discredit petitioners' duplicate of the
certificate of title within the time to appeal, move
The Ruling of the Court of Appeals for new trial or file a petition for relief, there is
no need to serve notice of the petition on the
In its Decision of 31 August 2000, the Court of Appeals adjoining landowners under Section 13 of RA
granted respondents' petition, set aside the trial court's 17 No. 26. Said section applies only when the source
July 1998 and 4 January 1999 Resolutions, and reinstated of reconstitution is other than the owner's
the 28 October 1996 Order. The appellate court held: duplicate of the certificate of title. x x x xThus, at
the time the Order of 28 October 1996 was
The motion to set aside the [28 October 1996 rendered, respondent court was properly clothed
Order] contemplates a petition for relief from a with jurisdiction. After said order became final,
final order entered against a party in any court and the petition for relief having been foreclosed
through fraud, accident, mistake, or excusable against aggrieved parties, respondent judge was
negligence under Rule 38 of the 1997 Rules of without jurisdiction to entertain the attack against
Civil Procedure, which must be filed within sixty the order of reconstitution. x x x x
(60) days after the petitioner learns of the final
order, and not more than six (6) months after Moreover, it must be remembered that
such final order was entered, and must be the fallo of the Decision dated 28 October 1996
accompanied with affidavits showing the fraud, contains a caveat, i.e.,"provided, however, that no
accident, mistake, or excusable negligence relied certificate of title covering the same parcel of
upon, and the facts constituting the petitioner's land exists in the office of the Register of Deeds."
good and substantial cause of action or defense, The reconstituted title issued petitioners militates
as the case may be. against any doubt or suspicion cast on their title.
The Registrar of Deeds concerned would not
xxxx have issued a reconstituted title had the land
covered by TCT No. 252708 already been
covered by another certificate of title. Thus, [w]e
As mentioned previously, the LRA, represented reiterate, until Branch 227, Regional Trial Court
by the OSG, contends that notice of the petition of Quezon City declares TCT No. 252708 to be
should have been served on adjoining landowners void and orders its cancellation, [w]e cannot but
as one of the jurisdictional requirements, since recognize the validity of the same.
the Authentic LRA Report of 24 October 1997
found petitioners' title to be a fake title. However,
a mere LRA Report cannot declare a certificate of The allegation of fraud requires a higher burden
title spurious without the proper court declaring of persuasion, but this Court maintains that the
its nullity and cancellation. A certificate of title reconstitution proceeding, which has now
cannot be subject to collateral attack and can be become final, is not the proper forum to thresh
altered, modified or cancelled only in a direct out the same. It is a fundamental rule that when a
proceeding in accordance with law. Incidentally, final judgment becomes executory, it thereby
private respondents filed an action for quieting of becomes immutable and unalterable and any
title, nullity of title (viz., TCT No. 252708), amendment or alteration which substantially
recovery of possession and damages against affects a final and executory judgment is null and
petitioners, which is still pending before Branch void for lack of jurisdiction, including the entire
227, Regional Trial Court of Quezon City. Until proceedings held for that purpose. Thus, it is as if
the trial court declares TCT No. 252708 to be no Manifestation and Motion was filed and no
void and orders its cancellation, [w]e cannot but suspicion or cloud of doubt was cast on the
recognize the validity of the same. Granting that genuineness and authenticity of petitioners'
a suspicion or cloud of doubt was cast on the certificate of title by the presentation of the LRA
genuineness and authenticity of petitioners' Report of 24 October 1997.16
certificate of title, the same was brought to the
fore belatedly. A Certificate of Finality had
Petitioner sought reconsideration but the appellate court by the registered owner, his assigns, or
denied its motion in the Resolution of 17 November 2000. any person having an interest in the
property. The petition shall state or
Hence, this petition. Petitioner reiterates its claim that the contain, among other things, the
trial court did not acquire jurisdiction over LRC Case No. following: x x x (e) the name and
Q-96-8296 for lack of actual notice to all interested parties addresses of the occupants or persons
as required under Section 13 in relation to Section 12 of in possession of the property, of the
RA 26. owners of the adjoining properties and
of all persons who may have interest in
the property; x x x x All the documents,
In their Comment, respondents countered that the actual or authenticated copies thereof, to be
notice requirement in Section 13 does not apply to LRC introduced in evidence in support to the
Case No. Q-96-8296 because that case was based on petition for reconstitution shall be
Marina's duplicate copy of TCT No. 252708. At any rate, attached thereto and filed with the
respondents contended that it is the posting and publication same: Provided, That in case the
of the notice of hearing, not its actual service, which vests reconstitution is to be made exclusively
jurisdiction to the trial court, citing our ruling in Calalang from sources enumerated in Section
v. Register of Deeds of Quezon City.17 Lastly, respondents 2(f) or 3(f) of this Act, the petition shall
maintained that the 28 October 1996 Order is already final be further accompanied with a plan and
and can no longer be set aside. technical description of the property
duly approved by the Commissioner of
The Issue Land Registration, or with a certified
copy of the description taken from a
The question is whether the trial court acquired jurisdiction prior certificate of title covering the
over LRC Case No. Q-96-8296. same property."

The Ruling of the Court In other words, the requirements under Sections
12 and 13 do not apply to all petitions for judicial
reconstitution, but only to those based on any of
We hold in the negative and accordingly grant the petition. the sources specified in Section 12, that is,
"sources enumerated in Section 2(c), 2(d), 2(e),
The Actual Notice Requirement under Section 13 in 2(f), 3(c), 3(d), 3(e), and/or 3(f) of this Act."
Relation
to Section 12 of RA 26 Applies Here Sections 2 and 3 of RA 26 provide as follows:

Respondents are correct in saying that the service of notice "SEC. 2. Original certificates of title
of the petition for reconstitution filed under RA 26 to the shall be reconstituted from such of the
occupants of the property, owners of the adjoining sources hereunder enumerated as may
properties, and all persons who may have any interest in the be available, in the following order:
property is not required if the petition is based on the
owner's duplicate certificate of title or on that of the co-
owner's, mortgagee's, or lessee's. This was our ruling (a) The owner's duplicate of
in Puzon v. Sta Lucia Realty and Development, the certificate of title;
Inc.,18 involving a petition filed with the Regional Trial
Court of Quezon City, Branch 80, ("Branch 80") for (b) The co-owner's,
reconstitution of the original of two Torrens certificates of mortgagee's, or lessee's
title based on Puzon's duplicate certificates of title. We held duplicate of the certificate of
in that case: title;

[T]he first sentence of Section 13 provides that (c) A certified copy of the
the requirements therein pertain only to petitions certificate of title, previously
for reconstitution filed under "the preceding issued by the register of
section," Section 12, which in turn governs those deeds or by a legal custodian
petitions based on specified sources. We quote thereof;
Section 12 below:
(d) An authenticated copy of
"SEC. 12. Petition for reconstitution the decree of registration or
from sources enumerated in Section patent, as the case may be,
2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e), pursuant to which the original
and/or 3(f) of this Act, shall be filed certificate of title was issued;
with the proper Court of First Instance,
 (e) A document, on file in the (f) Any other document[]
registry of deeds, by which which, in the judgment of the
the property, the description court, is sufficient and proper
of which is given in said basis for reconstituting the
document, is mortgaged, lost or destroyed certificate of
leased or encumbered, or an title." x x x
authenticated copy of said
document showing that its In the present case, the source of the Petition for
original had been registered; the reconstitution of title was petitioner's
and duplicate copies of the two TCTs mentioned in
Section 3(a). Clearly, the Petition is governed,
(f) Any other document not by Sections 12 and 13, but by Section 10 of
which, in the judgment of the RA 26. We quote said Section 10 in full:
court, is sufficient and proper
basis for reconstituting the "SEC. 10. Nothing hereinabove
lost or destroyed certificate of provided shall prevent any registered
title. owner or person in interest from filing
the petition mentioned in Section Five
"SEC. 3. Transfer certificates of title of this Act directly with the proper
shall be reconstituted from such of the Court of First Instance, based on
sources hereunder enumerated as may sources enumerated in Section 2(a),
be available, in the following order: 2(b), 3(a), 3(b), and/or 4(a) of this Act:
Provided, however, That the Court
(a) The owner's duplicate of shall cause a notice of the petition,
the certificate of title; before hearing and granting the same,
to be published in the manner stated in
Section Nine hereof: And provided,
(b) The co-owner's, further, That certificates of title
mortgagee's or lessee's reconstituted pursuant to this section
duplicate of the certificate of shall not be subject to the encumbrance
title; referred to in Section Seven of this
Act."
(c) A certified copy of the
certificate of title, previously Nothing in this provision requires that notices be
issued by the register of sent to owners of adjoining lots. Verily, that
deeds or by a legal custodian requirement is found in Section 13, which does
thereof; not apply to petitions based on an existing
owner's duplicate TCT.
(d) The deed of transfer or
other document on file in the Put differently, Sections 9 and 10 of RA 26
registry of deeds, containing require that 30 days before the date of hearing,
the description of the (1) a notice be published in two successive issues
property, or an authenticated of the Official Gazette at the expense of the
copy thereof, showing that its petitioner, and (2) such notice be posted at the
original had been registered, main entrances of the provincial building and of
and pursuant to which the the municipal hall where the property is located.
lost or destroyed transfer The notice shall state the following: (1) the
certificate of title was issued; number of the certificate of title, (2) the name of
the registered owner, (3) the names of the
(e) A document, on file in the interested parties appearing in the reconstituted
registry of deeds, by which certificate of title, (4) the location of the property,
the property the description and (5) the date on which all persons having an
of which is given in said interest in the property, must appear and file such
documents, is mortgaged, claims as they may have.
leased or encumbered, or an
authenticated copy of said For petitions based on sources enumerated in
document showing that its Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e) and
original had been registered; 3(f), Section 13 adds another requirement: that
and the notice be mailed to occupants, owners of
adjoining lots, and all other persons who may
 have an interest in the property. To repeat, We hold that the trial court did not commit grave abuse of
mailing the notice is not required for a petition discretion.
based on Sections 2(a), 2(b), 3(a), 3(b) and 4(a),
as in the present case. We were faced with substantially the same situation
in Director of Lands v. Court of Appeals.23 In that case,
xxxx the petition for reconstitution, as in the present case, was
filed under Section 3(a) of RA 26 based on an alleged
[T]here is no question that in [petitions for] owner's duplicate certificate of title. However, the Director
reconstitution involving Sections 12 and 13 of of Lands, in an adverse Report, challenged the authenticity
RA 26], notices to adjoining owners and to the of the purported duplicate certificate of title. The trial court
actual occupants of the land are mandatory denied reconstitution but the Court of Appeals reversed the
and jurisdictional. But in petitions for trial court's ruling. Upon further review, we reversed the
reconstitution falling under Sections 9 and 10 of Court of Appeals and dismissed the reconstitution petition.
RA 26 where, as in the present case, the source is We held that with the Director of Lands' Report, the
the owner's duplicate copy, notices to adjoining petition for reconstitution "falls squarely" under Section
owners and to actual occupants of the land are 3(f) of RA 26, thus:
not required. When the law is clear, the mandate
of the courts is simply to apply it, not to interpret In the instant case, the change in the number of
or to speculate on it. the certificate of title sought to be reconstituted
from T-12/79 to TCT No. 42449 rendered at once
In sum, RA 26 separates petitions for the authenticity or genuineness of respondent's
reconstitution of lost or destroyed certificates of certificate of title under suspicion or cloud of
title into two main groups with two different doubt. And since respondent alleges that the
requirements and procedures. Sources technical descriptions under both certificates of
enumerated in Sections 2(a), 2(b), 3(a), 3(b), and title are identical and the same, x x x, We hold
4(a) of RA 26 are lumped under one group that the instant petition for judicial
(Group A); and sources enumerated in Sections reconstitution falls squarely under Section
2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e), and 3(f) are 3(f), Republic Act No. 26, because the Director
placed together under another group (Group B). of Lands claims that the respondent's
For Group A, the requirements for judicial duplicate of the Certificate of Title No. T-12/79
reconstitution are set forth in Section 10 in or TCT No. 42449 are [sic] both fake and
relation to Section 9 of RA 26; while for Group fictitious.24 (Emphasis supplied)
B, the requirements are in Sections 12 and 13 of
the same law.19 (Italicization in the original; Consequently, we applied Sections 12 and 13 of RA 26 and
boldfacing supplied) held that for non-compliance with these provisions, the trial
court did not acquire jurisdiction over the petition for
However, contrary to respondents' claim, Puzon finds no reconstitution.
application here. No report from a pertinent government
agency challenging the authenticity of Puzon's duplicate Contrary to the Court of Appeals' finding, the Second
certificates of title was presented in Puzon. Thus, when Report is not a "collateral attack" on TCT No. 252708.
Branch 80 granted reconstitution, Puzon's duplicate transfer Circular No. 35 requires the submission of an LRA Report
certificates of title remained unchallenged.20 in all proceedings to judicially reconstitute lost or destroyed
Torrens certificates of title.25 Indeed, to "x x x prevent
In contrast, the trial court in the present case was misled duplication of titles, x x x and [the] irregular reconstitution
into treating LRC Case No. Q-96-8296 as having been filed of lost or destroyed land certificates of title based on
under Section 3(a) based on Marina's purported duplicate unauthorized sources," this Court issued Administrative
title. Thus, the trial court followed Section 1021 in Circular No. 7-96 ("Circular 7-96") on 15 July 1996
connection with Section 922 of RA 26 to publicize LRC reminding trial court judges and clerks of courts "under
Case No. Q-96-8296. Relying on the First Report's finding pain of disciplinary sanctions, x x x to comply strictly"
that TCT No. 252708 "do[es] not appear to overlap with, among others, Circular No. 35. Trial courts hearing
previously plotted/decreed properties in the area," the trial reconstitution petitions under RA 26 are thus duty-bound to
court granted reconstitution. However, petitioner later take into account the LRA's Report. When the trial court
informed the trial court of the First Report's spuriousness, considered the authentic Second Report in issuing the 17
the serious doubts on TCT No. 252708's authenticity, and July 1998 Resolution, it merely complied with Circular 7-
the existence of two other titles that overlapped Lot No. 1. 96.
After hearing the parties, the trial court dismissed LRC
Case No. Q-96-8296 for lack of jurisdiction as all interested True, petitioner submitted the Second Report after the
parties were not actually notified of the petition as required period to appeal, or seek relief against, the 28 October 1996
under Section 13 in relation to Section 12 of RA 26. Order had lapsed. However, this is no bar for the trial court
to consider the Second Report. Petitioner was not at fault
when it did not submit its Report before the trial court such defect deprives the court of jurisdiction (Po
resolved LRC Case No. Q-96-8296. Petitioner explained vs. Republic, L-27443, July 19, 1971, 40 SCRA
that respondents failed to submit the documents petitioner 37). And when the court a quolacks jurisdiction
had requested in its letter of 6 August 1996. But more than to take cognizance of a case, the same lacks
this, courts have inherent power to authority over the whole case and all its aspects
(Development Bank of the Phils. Employees
correct fatal infirmities in its proceedings,26 especially if, as Union vs. Juan Perez, L-22584 and L-23083,
here, the flaw was intentionally brought about by a party May 30, 1972, 45 SCRA 179, 187). Further,
who employed deceit in misleading the trial court. To hold absent jurisdiction the court cannot pass upon the
otherwise would render courts helpless in maintaining the merits of the petition (Pinza vs. Aldovino, 25
integrity of its proceedings and correspondingly embolden SCRA 220, 224).
parties to make a mockery of judicial rules. The trial court
merely exercised such inherent power in the higher interest In the case at bar, the jurisdiction or authority of
of justice.27 the Court of First Instance is conferred upon it by
Republic Act 26 entitled "An Act providing a
The issuance by the Register of Deeds of Quezon City of special procedure for the reconstitution of
TCT No. RT-115027 does not erase the doubts the Second Torrens Certificates of Title lost or destroyed,"
Report raises on the authenticity of TCT No. 252708. Nor approved on September 25, 1946. The Act
does it negate the existence of TCT Nos. 187040 and specifically provides the special requirements and
187042. Paragraph 12 of Circular No. 35 requires that the mode of procedure that must be followed before
Register of Deeds shall submit "written findings" on the the court can act on the petition and grant to the
status of the title sought to be reconstituted.28 No such petitioner the remedy sought for. These
"written findings" exist in the records of this case. What requirements and procedure are mandatory.
respondents submitted was a Certification dated 14 The petition for reconstitution must allege the
December 1994 that the original of TCT No. 252708 was jurisdictional facts; the notice of hearing must
among those destroyed in the 1988 fire. This falls short of also be published and posted in particular
what paragraph 12 of Circular 35 requires. places and the same sent to specified persons.
Specifically, the requirements and procedure are
set forth in detail under Sections 12 and 13 of the
Consequently, it is Section 13 in relation to Section 12 of Act [.] x x x x32 (Emphasis supplied)
RA 26 which applies to LRC Case No. Q-96-8296. Hence,
in addition to its posting and publication, the notice of
hearing of LRC Case No. Q-96-8296 should also have been On the particular requirement of service of notice to all
served through mail on the owners of the adjoining interested parties, we held in the earlier case of Manila
properties and all persons who may have any interest in the Railroad Company v. Moya:
property.29 The records show that neither Lot No. 1's
adjoining owners30 nor the other interested parties, namely, It is clear from section 13 of Republic Act No. 26
Mario Uy and Maria Corazon Uy-Zalamea ("Uy that notice by publication is not sufficient under
the circumstances. Notice must be actually sent
and Zalamea"), in whose names TCT Nos. 187042 and or delivered to parties affected by the petition
187040 were issued, were notified of respondents' petition for reconstitution. The order of reconstitution,
in LRC Case No. Q-96-8296.31 therefore, having been issued without
compliance with the said requirement, has
never become final as it was null and void. The
The Actual Notice Requirement in Section 13 in Manila Railroad cannot then complain that the
Relation to Section 12, RA 26 is Jurisdictional motion to set aside was filed beyond the
reglementary period.33 (Emphasis supplied)
That the requirement of actual notice in Section 13 in
relation to Section 12 of RA 26 is jurisdictional was settled We have since reiterated this ruling in Ortigas & Company
in Director of Lands v. Court of Appeals where we held: Limited Partnership v. Velasco34 and Puzon.

To ascertain whether a court has jurisdiction or Respondents erroneously invoke Calalang as authority for
not, the provisions of the law should be inquired their claim that it is only the publication and posting of the
into (Auyong vs. Hon. Court of Tax Appeals, L- notice of hearing which are mandatory. The question of
25181, Jan. 11, 1967, 19 SCRA 10). In all cases whether the actual notice requirement in Section 13 in
where the authority of the courts to proceed is relation to Section 12 of RA 26 is mandatory and
conferred by a statute and when the manner of jurisdictional was not the main issue in that case – it was
obtaining jurisdiction is mandatory and must whether the petitioners were bound by our ruling in De la
strictly be complied with, or the proceedings will Cruz v. De la Cruz,35 affirming the validity of a Torrens
be utterly void (Caltex, et al. vs. CIR, et al., L- certificate of title issued to one who had obtained the
28472, April 30, 1968, 23 SCRA 492). So that property covered by the title through a conveyance duly
where there is defect of publication of petition,
recorded in the Register of Deeds of Quezon City and who Reconstitution proceedings under RA 26 has for their
had the title subsequently reconstituted. We answered in purpose the restoration in the original form and condition
the affirmative and dismissed the petitions principally on of a lost or destroyed instrument attesting the title of a
the ground of res judicata.36 Notably, we found person to a piece of land.41 Thus, reconstitution must be
in Calalang that thepredecessor-in-interest of the granted only upon clear proof that the title sought to be
petitioners did not own the disputed property, thus the latter restored was indeed issued to the petitioner. Strict
could not claim any better right than the former. observance of this rule is vital to prevent parties from
exploiting reconstitution proceedings as a quick but illegal
For non-compliance with the actual notice requirement in way to obtain Torrens certificates of titles over parcels of
Section 13 in relation to Section 12 of RA 26, the trial court land which turn out to be already covered by existing
did not acquire jurisdiction over LRC Case No. Q-96-8296. titles.42 The social and economic costs of such modus
The proceedings in that case were thus a nullity and the 28 operandi cannot be underestimated.43 Asweobserved
October 1996 Order was void. in Director of Lands v. Court of Appeals:

Void Rulings Subject to Challenge at any Time The efficacy and integrity of the Torrens System
must be protected and preserved to ensure the
stability and security of land titles for otherwise
In MWSS v. Sison, also involving a motion to set aside a land ownership in the country would be rendered
"final" reconstitution order for non-compliance with erratic and restless and can certainly be a potent
Section 13 of RA 26, we laid down the attributes of a void and veritable cause of social unrest and agrarian
judgment or ruling: agitation. x x x x The real purpose of the Torrens
System which is to quiet title to the land must be
x x x a void judgment is not entitled to the upheld and defended, and once a title is
respect accorded to a valid judgment, but may be registered, the owner may rest secure, without the
entirely disregarded or declared inoperative by necessity of waiting in the portals of the court or
any tribunal in which effect is sought to be given sitting in the mirador de su casa to avoid the
to it. It is attended by none of the consequences possibility of losing his land.44
of a valid adjudication. It has no legal or binding
effect or efficacy for any purpose or at any place. WHEREFORE, we GRANT the petition. We SET
It cannot affect, impair or create rights. It is not ASIDE the Decision dated 31 August 2000 and the
entitled to enforcement and is, ordinarily, no Resolution dated 17 November 2000 of the Court of
protection to those who seek to enforce. All Appeals. We ENTER a new judgment declaring the
proceedings founded on the void judgment are reconstitution proceedings in LRC Case No. Q-96-
themselves regarded as invalid. In other words, a 8296 VOID for lack of jurisdiction. Accordingly, we
void judgment is regarded as a nullity, and the declare VOID the Order dated 28 October 1996 of the
situation is the same as it would be if there were Regional Trial Court of Quezon City, Branch 225 and the
no judgment. It, accordingly, leaves the parties reconstituted Transfer Certificate of Title No. RT-115027
litigants in the same position they were in before (252708). We direct the Register of Deeds of Quezon City
the trial.37 to CANCEL Transfer Certificate of Title No. RT-115027
(252708).
Guided by this rule, we had set aside so-called "final"
reconstitution Orders for being void for non-compliance Let a copy of this ruling be served on the Register of
with Section 13 of RA 26 where the Orders were Deeds, Quezon City.
challenged either through a motion filed in the trial court
issuing the reconstitution order38 or through a petition under
Rule 47 of the Rules of Court filed with the Court of SO ORDERED
Appeals.39Here, petitioner availed of the former remedy.40

However, a modification in the disposition of LRC Case

No. Q-96-8296 is in order. In its 17 July 1998 Resolution,
the trial court set aside the 28 October 1996 and dismissed
LRC Case No. Q-96-8296. At that time, however, the
Register of Deeds, Quezon City had already issued
reconstituted TCT No. RT-115027. That title must
similarly be set aside, emanating as it did from a void
ruling.

A Final Word
SAINT MARY CRUSADE TO ALLEVIATE (1) the copy of the original application for registration
POVERTY OF BRETHREN FOUNDATION, dated January 27, 1955; (2) the notice of initial hearing
INC., Petitioner,  dated June 23, 1955; (3) the letter of transmittal to the
vs. Court of First Instance in Quezon City; (4) the copy of the
HON. TEODORO T. RIEL, ACTING PRESIDING Spanish Testimonial Title No. 3261054 dated March 25,
JUDGE, REGIONAL TRIAL COURT, NATIONAL 1977 in the name of Eladio Tiburcio; (5) the copy of Tax
CAPITAL JUDICIAL REGION, BRANCH 85, Assessment No. 14238; and (6) the approved Plan SWD-
QUEZON CITY, Respondent. 37457.

x-----------------------x On February 5, 2007, the RTC denied the motion for

reconsideration for lack of any cogent or justifiable ground
UNIVERSITY OF THE PHILIPPINES, Intervenor. to reconsider.4

Hence, on February 22, 2007, the petitioner came directly

DECISION
to the Court alleging that respondent Judge had "unfairly
abused his discretion and unlawfully neglected the
BERSAMIN, J.: performance of an act which is specifically enjoined upon
him as a duly [sic] under Rule 7, Section 8, of the Revised
A petition for the judicial reconstitution of a Torrens title Rules of Court;"5 that "in finally dismissing the herein
must strictly comply with the requirements prescribed in subject Petition for Reconsideration, respondent Honorable
Republic Act No. 26;1 otherwise, the petition should be Acting Presiding Judge has acted without and in excess of
dismissed. his authority and with grave abuse of discretion to the
further damage and prejudice of the herein petitioner;"6 and
that it had no other remedy in the course of law except
This case is a direct resort to the Court by petition for through the present petition for certiorari and mandamus.
certiorari and mandamus. The petitioner applied for the
judicial reconstitution of Original Certificate of Title
(OCT) No. 1609 of the Register of Deeds of Quezon City, Issues
and for the issuance of a new OCT in place thereof,
docketed as L.R.C. Case No. Q-18987 (04), but respondent The Court directed respondent Judge and the Office of the
Acting Presiding Judge of Branch 85 of the Regional Trial Solicitor General (OSG) to comment on the petition for
Court (RTC) in Quezon City dismissed the petition for certiorari and mandamus. Respondent Judge submitted his
reconstitution through the assailed order dated September comment on May 23, 2007,7 and the OSG its comment on
12, 2006. The petitioner alleges that the respondent Judge July 19, 2007.8 On November 13, 2007, the University of
thereby committed grave abuse of discretion and unlawful the Philippines (UP) sought leave to intervene, attaching to
neglect of performance of an act specifically enjoined upon its motion the intended comment/opposition-in-
him. Equally assailed is the ensuing denial of its motion for intervention.9 The motion for the UP’s intervention was
reconsideration through the order dated February 5, 2007. granted on November 28, 2007.10 In turn, the petitioner
presented its consolidated reply on February 8, 2008.11 The
The antecedents follow. parties, except respondent Judge, then filed their
memoranda in compliance with the Court’s directive.
On October 28, 2004, the petitioner claimed in its petition
for reconstitution that the original copy of OCT No. 1609 Respondent Judge justified the dismissal of the petition for
had been burnt and lost in the fire that gutted the Quezon reconstitution by citing the opposition by the OSG and the
City Register of Deeds in the late 80’s. Initially, respondent UP, as well as the recommendation of the Land
Judge gave due course to the petition, but after the Registration Authority (LRA). He pointed out that the
preliminary hearing, he dismissed the petition for petitioner did not present its purported Torrens title to be
reconstitution through the first assailed order of September reconstituted; that the petitioner’s claim was doubtful given
12, 2006,2 to wit: the magnitude of 4,304,623 square meters as the land area
involved;12 and that the UP’s ownership of the portion of
land covered by petitioner’s claim had long been settled by
With the receipt of Report dated July 14, 2006 from Land
the Court in a long line of cases.13
Registration Authority (LRA) recommending that the
petition be dismissed, and considering the Opposition filed
by the Republic of the Philippines and University of the The OSG and the UP argued that by directly coming to the
Philippines, the above-entitled petition is hereby ordered Court by petition for certiorari and mandamus, the
DISMISSED. petitioner had availed itself of the wrong remedies to
substitute for its lostappeal; that the correct recourse for the
petitioner was an appeal considering that the two assailed
On October 11, 2006, the petitioner moved for
orders already finally disposed of the case; that the
reconsideration of the dismissal,3 attaching the following petitioner intended its petition for certiorari and mandamus
documents to support its petition for reconstitution, namely:
to reverse the final orders;14 that the petitioner further failed
to observe the doctrine of hierarchy of courts, despite the exercise isso patent or so gross as to amount to an evasion
Court of Appeals (CA) having concurrent jurisdiction with of a positive duty or to a virtual refusal either to perform
the Court over special civil actions under Rule 65;15 that the the duty enjoined or to act at all in contemplation of law.20
RTC would have gravely erred had it proceeded on the
petition for reconstitution despite the petitioner not having The petition for certiorari and mandamus did not show how
notified the adjoining owners of the land or other parties respondent Judge could have been guilty of lacking or
with interest over the land;16 that the petitioner had no exceeding his jurisdiction, or could have gravely abused his
factual and legal bases for reconstitution due to its failure to discretion amounting to lack or excess of jurisdiction.
prove the existence and validity of the certificate of title Under Section 1221 of Republic Act No. 26, the law on the
sought to be reconstituted, in addition to the ownership of judicial reconstitution of a Torrens title, the Regional Trial
the land covered by the petition for reconstitution being Court (as the successor of the Court of First Instance) had
already settled in a long line of cases; that the petitioner’s the original and exclusive jurisdiction to act on the petition
claim over the land was derived from the Deed of for judicial reconstitution of title. Hence, the RTC neither
Assignment executed by one Marcelino Tiburcio – the lacked nor exceeded its authority in acting on and
same person whose claim had long been settled and dismissing the petition. Nor did respondent Judge gravely
disposed of in Tiburcio v. People’s Homesite and Housing abuse his discretion amounting to lack or excess of
Corporation and University of the Philippines (106 Phil. jurisdiction considering that the petition for reconstitution
477), which vested title in the UP, and in Cañero v. involved land already registered in the name of the UP, as
University of the Philippines (437 SCRA 630); and that the confirmed by the LRA. Instead, it would have been
Deed of Transfer and Conveyance dated November 26, contrary to law had respondent Judge dealt with and
1925 executed by Tiburcio in favor of St. Mary Village granted the petition for judicial reconstitution of title of the
Association, Inc. was not a basis for the judicial petitioner.
reconstitution of title accepted under Section 2 of Republic
Act No. 26.
Secondly, the petitioner did not present the duplicate or
certified copy of OCT No. 1609. Thereby, it disobeyed
In its memorandum, the petitioner indicates that the RTC Section 2 and Section 3 of Republic Act No. 26, the
gravely abused its discretion amounting to lackor excess of provisions that expressly listed the acceptable bases for
its jurisdiction in dismissing its petition for reconstitution judicial reconstitution of an existing Torrens title, to wit:
on the basis of the recommendation of the LRA and the Sec. 2. Original certificates of titleshall be reconstituted
opposition of the Republic and the UPdespite having from such of the sources hereunder enumerated asmay be
initially given due course to the petition for reconstitution. available, in the following order:
It urges that the dismissal should be overturned because it
was not given a chance to comment on the recommendation
of the LRA, or to controvert the oppositions filed.17 It (a) The owner's duplicate of the certificate of
contends that the LRA report did not substantiate the title;
allegation of dismissal of the application for registration of
Marcelino Tiburcio on October 17, 1955, in addition to the (b) The co-owner's, mortgagee's,or lessee's
veracity of the report being questionable by virtue of its not duplicate of the certificate of title;
having been under oath.18
(c) A certified copy of the certificate of title,
Ruling previously issued by the register of deeds or by a
legal custodian thereof;
The petition for certiorari and mandamus, being devoid of
procedural and substantive merit, is dismissed. (d) An authenticated copy of the decree of
registration or patent, as the case may be,
Firstly, certiorari, being an extraordinary remedy, is granted pursuant to which the original certificate of title
only under the conditions defined by the Rules of Court. was issued;
The conditions are that: (1) the respondent tribunal, board
or officer exercising judicial or quasi judicial functions has (e) A document, on file in the registry of deeds,
acted without or inexcess of its or his jurisdiction, or with by which the property, the description of which is
grave abuse of discretion amounting to lack or excess of given in said document, is mortgaged, leased or
jurisdiction; and (2) there is no appeal, or any plain, encumbered, or an authenticated copy of said
speedy, and adequate remedy in the ordinary course of document showing that its original had been
law.19Without jurisdiction means that the court acted with registered; and
absolute lack of authority; there is excess of jurisdiction
when the court transcends its power or acts without any (f) Any other document which, in the judgment
statutory authority; grave abuse of discretionimplies such of the court, is sufficient and proper basis for
capricious and whimsical exercise of judgment as to be reconstituting the lost or destroyed certificate of
equivalent to lack or excess of jurisdiction; in other words, title.
power is exercised in an arbitrary or despotic manner by
reason of passion, prejudice, or personal hostility; and such
Sec. 3. Transfer certificates of title shall be reconstituted of courts in order to free itself from unnecessary, frivolous
from such of the sources hereunder enumerated asmay be and impertinent cases and thus afford time for it to deal
available, in the following order: with the more fundamental and more essential tasks that the
Constitution has assigned to it.23 There being no special,
(a) The owner's duplicate of the certificate of important or compelling reason, the petitioner thereby
title; violated the observance of the hierarchy of courts,
warranting the dismissal of the petition for certiorari.
(b) The co-owner's, mortgagee's,or lessee's
duplicate of the certificate of title; Finally, the land covered by the petition for judicial
reconstitution related to the same area that formed the UP
campus.1âwphi1 The UP’s registered ownership of the land
(c) A certified copy of the certificate of title, comprising its campus has long been settled under the law.
previously issued by the register of deeds or by a Accordingly, the dismissal of the petition for judicial
legal custodian thereof; reconstitution by respondent Judge only safeguarded the
UP’s registered ownership. In so doing, respondent Judge
(d) The deed of transfer or other document, on actually heeded the clear warnings to the lower courts and
file in the registry of deeds, containing the the Law Profession in general against mounting or abetting
description of the property, or an authenticated any attack against such ownership. One such warning was
copy thereof, showing that its original had been that in Cañero v. University of the Philippines,24 as follows:
registered, and pursuant to which the lost or
destroyed transfer certificate of title was issued; We strongly admonish courts and unscrupulous lawyers to
stop entertaining spurious cases seeking further to assail
(e) A document, on file in the registry of deeds, respondent UP’s title. These cases open the dissolute
by which the property, the description of which is avenues of graft to unscrupulous land-grabbers who prey
given in said document, is mortgaged, leased or like vultures upon the campus of respondent UP. By such
encumbered, or an authenticated copy of said actions, they wittingly or unwittingly aid the hucksters who
document showing that its original had been want to earn a quick buck by misleading the gullible to buy
registered; and the Philippine counterpart of the proverbial London Bridge.
It is well past time for courts and lawyers to cease wasting
(f) Any other document which, in the judgment their time and resources on these worthless causes and take
of the court, is sufficient and proper basis for judicial notice of the fact that respondent UP’s title had
reconstituting the lost or destroyed certificate of already been validated countless times by this Court. Any
title. ruling deviating from such doctrine is to be viewed as a
deliberate intent to sabotage the rule of law and will no
longer be countenanced.25
Thirdly, with the questioned orders of the RTC having
finally disposed of the application for judicial
reconstitution, nothing more was left for the RTC to do in WHEREFORE, the Court DISMISSES the petition for
the case. As of then, therefore, the correct recourse for the certiorari and mandamus for lack of merit; and ORDERS
petitioner was to appeal to the Court of Appeals by notice the petitioner to pay the costs of suit.
of appeal within 15 days from notice of the denial of its
motion for reconsideration. By allowing the period of SO ORDERED
appeal toelapse without taking action, it squandered its
right to appeal. Its present resort to certiorari is
impermissible, for an extraordinary remedy like certiorari
cannot be a substitute for a lost appeal. That the
extraordinary remedy of certiorari is not an alternative to an
available remedy inthe ordinary course of law is clear from
Section 1 of Rule 65, which requires that there must be no
appeal, or any plain, speedy, and adequate remedy in the
ordinary course of law. Indeed, no error of judgment by a
court will be corrected by certiorari, which corrects only
jurisdictional errors.22

Fourthly, the filing of the instant special civil action

directly in this Court is in disregard of the doctrine of
hierarchy of courts. Although the Court has concurrent
jurisdiction with the Court of Appeals in issuing the writ of
certiorari, direct resort is allowed only when there are
special, extraordinary or compelling reasons that justify the
same. The Court enforces the observance of the hierarchy
IN RE: ORIGINAL CERTIFICATE OF TITLE NO. O- new owner's duplicate copy of O.C.T. No. O-1385; (2) in
1385, SP. NO. 695, BOOK NO. 1-5, PATENTEE — requiring him to secure the appointment of a legal
PAULINO P. GOCHECO, CESARIO representative to the estate of the original registered owner,
GOCHECO, petitioner-appellant,  Paulino P. Gocheco and to obtain a judicial declaration of
vs. his lawful heirs before giving due course to his petition and
FRANCISCO T. ESTACIO, ET AL., oppositors- (3) in dismissing the petition.
appellees.
The petition is only for the issuance of an owner's duplicate
Cesario Gocheco is a legitimate son of Paulino P. Gocheco copy of O.C.T. No. O-1385, in lieu of the one that was lost.
registered owner of a parcel of land, with improve Section 109 of Act No. 496, as amended, provides:
comments, in Margosatubig, Zamboanga del Sur, as
evidenced by Original Certificate of Title No. O-1385 of SEC. 109. If a duplicate certificate is lost or
the Register of Deeds for the said province. The owner's destroyed or cannot be produced by a guarantee,
duplicate copy of the said original certificate of title was heir, devisee, assignee, or other person applying
lost, and notwithstanding diligent search to ascertain its for the entry of a new certificate to him or for the
whereabouts, the said owner's duplicate copy has not been registration of any instrument, a suggestion of the
found. However, in the records of the Register of Deeds of fact of such loss or destruction may be filed by
Zamboanga del Sur, the original of the above number the registered owner or other person in interest
certificate No. O-1385 of title is found intact and complete and registered. The court may thereupon, upon
in Sp. No. 695, Book No. 1-5 — patentee Paulino P. the petition of the registered owner or other
Gocheco. persons in interest, after notice and hearing direct
the issue of a new duplicate certificate, which
On January 18, 1957, Cesario Gocheco, in his capacity as shall contain a memorandum of the fact that it is
heir of the registered owner, filed a petition before the trial issued in place of the lost duplicate certificate,
court to require the Register of Deeds of Zamboanga del but shall in all respects be entitled to like faith
Sur to issue another owner's duplicate copy of the O.C.T. and credit as the original duplicate for all the
No. O-1385, in lieu of the owners copy which was lost, purposes of this act.
copy of which petition was served to the Register of Deeds,
thru the Provincial Fiscal, on April 30, 1957. Francisco T. In view of the existence of the complete record in the
Estacio and others opposed the petition, claiming that they Register of Deeds of Zamboanga del Sur, of the original of
have been in continuous, peaceful, lawful, public and the certificate of title in question, which appears in Book
adverse possession of the property covered by O.C.T. No. No. 1-5 of the said Register of Deeds' Office (Exh. A) and
O-1385. On June 1, 1957, petitioner replied, stating that the of the fact that the present petition is not one for
oppositors can not intervene in the petition for want of reconstitution as provided by Republic Act No. 26, there is
personality Industrial that to allow them to claim ownership no necessity for publishing notice of the hearing thereof.
and/or possession of the subject property would defeat and And the petition, coming as it does, under the provisions of
destroy the indefeasibility of title guaranteed and protected Section 109, aforequoted, there is likewise no need to first
by Act No. 496. secure the appointment of a legal representative of the
estate and the declaration of the lawful heirs of the
On June 29, 1957 petitioner appeared in Court and deceased Paulino P. Gocheco. The petition does not at all
submitted his oral and documentary evidence. seek the distribution of the decedents estate. The owner's
Notwithstanding notice of hearing served upon them, the duplicate copy to be issued will be only an owner's
oppositors or their counsel failed to appear. On the same duplicate copy of the O.C.T. No. O-1385 and the petitioner
day, however, the trial court entered an order suspending is a person in interest is he is a legal heir, according to his
hearing of the petition and required the petitioner to publish uncontroverted verified petition.
within 30 days his petition or to file a testate or intestate
proceeding, and to secure the appointment of a legal The oppositors-appellees, who had not chosen to file their
representative to the estate of registered owner and the brief, have no personality to intervene and their grounds of
ultimate declaration of heirs. For failure of petitioners to intervention, namely, that they have been in public,
comply with the order, on August 23, 1957, the oppositors continuous, peaceful, adverse and lawful possession of the
filed an ex-parte motion to dismiss the petition. The Court, property is immaterial, impertinent and of no consequence,
instead, on August 24, 1957 gave the petitioner 10 days in the present proceeding. Their claim of ownership or
within which to show cause why the petition should not be possession of the property can be properly instituted in a
dismissed. On September 3, 1957, petitioner filed his separate, independent and ordinary civil action.
"constancia" manifesting that he was submitting his case,
on the evidences adduced in the hearing. On September 9,
1957, the trial court dismissed the petition against which IN VIEW HEREOF, the order of June 29, 1957 of the Trial
petitioner interposed the present appeal. Court, appealed from, is set aside, and another entered,
directing the Register of Deeds of Zamboanga del Sur, to
issue to the petitioner a new owner's duplicate copy which
Petitioner-appellant alleges that the trial court erred (1) in was lost. With costs on the oppositors-appellees
requiring him to publish the petition for the issuance of a
LUCIANO P. PAZ, Petitioner,  Philippines, Book 26, Page 152, Register of Deeds,
vs. Muntinlupa City, and all subsequent titles derived from
REPUBLIC OF THE PHILIPPINES, ACTING said TCT No. 185552 as stated in paragraphs 23, 24, 25 and
THROUGH THE DEPARTMENT OF 28 above-quoted, Proclamation No. 1240 dated June 23,
ENVIRONMENT AND NATURAL RESOURCES, 1998, Resolution No. 01-311 of the City of Muntinlupa
PUBLIC ESTATES AUTHORITY, FILINVEST dated February 7, 2001 be cancelled and in lieu thereof, and
DEVELOPMENT CORPORATION, and FILINVEST said Register of Deeds be ordered to issue a new certificate
ALABANG, INC., Respondents. of title in the name of Luciano P. Paz, married to Elvira
Joson, both of legal ages, Filipinos and residents of Lot 5,
DECISION Block 31, Modesta Village, San Mateo, Rizal, free from all
liens and encumbrances, and defendants be ordered to
vacate the property covered by said title; ordering
BERSAMIN, J.: respondents jointly and severally to pay petitioner
compensatory damages in the amount of not less than P10
The petitioner assails the decision promulgated on August Million, moral damages in the amount of P1 Million,
1, 2002,1 whereby the Court of Appeals (CA) affirmed the exemplary damages in the amount of P1 Million and P2
dismissal by the Regional Trial Court (RTC), Branch 276, Million for attorney’s fees.
in Muntinlupa City of his petition for the cancellation of a
certificate of title brought under Section 108 of Presidential Petitioner prays for other reliefs just and equitable to the
Decree (P.D.) No. 1529 (Property Registration Decree). premises.

Antecedents xxxx

On November 29, 2000, the petitioner brought a petition On January 19, 2001, FDC and FAI moved to dismiss the
for the cancellation of Original Certificate of Title (OCT) petition for cancellation on the following grounds,4 to wit:
No. 684 docketed as LRC Case No. 00-059. The petition,
ostensibly made under Section 108 of P.D. No. 1529,
impleaded the Republic of the Philippines (Republic), (1) The serious and controversial dispute
Filinvest Development Corporation (FDC), and Filinvest spawned by the Petition for cancellation of title is
Alabang, Inc. (FAI) as respondents. litigable in an ordinary action outside the special
and limited jurisdiction of land registration
courts. The Petition is thus removed from the
The petition averred that the petitioner was the owner of ambit of Sec. 108 of the Property Registration
Parcel 1, Plan 11-69, with an area of 71,692,754 square Decree which requires, as an indispensable
meters, situated in Parañaque City, Pasay City, Taguig City element for availment of the relief thereunder,
and San Pedro, Laguna, and Parcel 2 Plan 11-69, with a either unanimity of the parties or absence of
total area of 71,409,413 square meters, situated in Alabang, serious controversy or adverse claim. It
Muntinlupa, Parañaque City and Las Piñas City; that the authorizes only amendment and alteration of
total landholding of the petitioner consisted of 143,102,167 certificates of title, not cancellation thereof;
square meters, or approximately 14,310 hectares; that OCT
No. 684 was registered in the name of the Republic, and
included Lot 392 of the Muntinlupa Estate with an area of (2) Lack of jurisdiction of the Court over the
approximately 244 hectares; that Lot 392 was segregated persons of the respondents who were not validly
from OCT No. 684, resulting in the issuance of Transfer served with summons but only a copy of the
Certificate of Title (TCT) No. 185552,2 also in the name of Petition;
the Republic; that FDC and FAI developed Lot 392 into a
subdivision based on their joint venture agreement with the (3) Docket fees for the Petition have not been
Government; that pursuant to the joint venture agreement, paid.
Lot 392 was further subdivided, causing the cancellation of
TCT No. 185552, and the issuance of TCTs for the (4) The Petition does not contain the requisite
resulting individual subdivision lots in the names of the certificate of non-forum shopping.
Republic and FAI; and that the subdivision lots were then
sold to third parties.
The petitioner countered that his petition for cancellation
was not an initiatory pleading that must comply with the
The petition for cancellation prayed as follows:3 regular rules of civil procedure but a mere incident of a past
registration proceeding; that unlike in an ordinary action,
xxxx land registration was not commenced by complaint or
petition, and did not require summons to bring the persons
WHEREFORE, it is most respectfully prayed that OCT No. of the respondents within the jurisdiction of the trial court;
684 in the name of the Republic of the Philippine Islands and that a service of the petition sufficed to bring the
and TCT No. 185552 in the name of the Republic of the respondents within the jurisdiction of the trial court.
On May 21, 2001, the RTC granted FDC and FAI’s motion Not only that. As long as a court acts within its jurisdiction,
to dismiss,5 viz: any alleged errors committed in the exercise thereof will
amount to nothing more than errors of judgment which are
xxxx reversible by timely appeal and not by a special civil action
of certiorari (Tomas Claudio Memorial College, Inc. vs.
CA, 316 SCRA 502). A Petition for Certiorari must be
The petition at bench therefore bears all the elements of an based on jurisdictional grounds because, as long as the
action for recovery: (A) it was commenced long after the respondent acted with jurisdiction, any error committed by
decree of registration in favor of the Respondent Republic him or it in the exercise thereof will amount to nothing
of the Philippines had become final and incontrovertible, more than an error of judgment which may be reviewed or
following the expiration of the reglementary period; for a corrected only by appeal (Jalandoni vs. Drilon, 327 SCRA
review of the decree of registration issued to the 107).
"government of the Philippine Islands."; (B) there is an
imputation of a wrongful or fraudulent titling in the
issuance of Original Certificate of Title No. 684 allegedly Applying the aforecited jurisprudence to the case at bench,
irregular due to the absence of survey plan, decree of the Petition must fail. It is all too obvious that Petitioner
registration and court records; (C) the Petition finally seeks would have Us determine whether or not Public
as its main relief the issuance of a new title to him, Luciano Respondent correctly rendered judgment in ordering the
Paz, after Original Certificate of Title No. 684 is dismissal of his Petition. Sadly, as the aforecited rulings
invalidated, or the reconveyance of the property to him. have shown, a special civil action for certiorari is a remedy
This action although entitled a Petition for cancellation of a designed for correction of errors of jurisdiction and not
title, which is a complaint by itself, is complete with the errors of judgment (Diaz vs. Diaz, 331 SCRA 302).
name of the parties, the subject matter, the cause of action, Certiorari will not be issued to xxx correct erroneous
and the reliefs prayed for, which are all components of a conclusion of law or fact (Tensorex Industrial Corp. vs.
regular complaint. It is in fact an initiatory pleading, and is CA, 316 SCRA 471).
not a mere motion.
To reiterate, Petitioner has failed to overcome the burden of
It is futile to deny that the petition is a fresh lawsuit, proving how Public Respondent may be faulted with
involving title to a land or an interest thereon "arising after having acted with grave abuse of discretion in rendering
the original" proceeding, which should be filed and entitled judgment ordering the dismissal of his Petition. That the
under the original land registration case under the court a quo cannot share Petitioner’s interpretation of
instructions of Sec. 2 of PD 1529. Indeed, this Section certain alleged laws and jurisprudence hardly constitute the
states further post registration cause of an aggrieved party abuse of discretion contemplated under Rule 65 of the 1997
who complains of being deprived of a land wrongfully or Rules of Civil Procedure and as applied by the Highest
fraudulently titled in the name of another. As such it is fair Tribunal in numerous cases. Ours is not, through this
and logical to assume that this is covered by the current Petition, to determine whether or not Public Respondent
rules on an initiatory pleading and becomes vulnerable to erred in its judgment but to determine whether or not Public
dismissal under any grounds invoked by the respondent Respondent court acted with grave abuse of discretion
which are mandatory and jurisdictional requirements under amounting to lack or excess of jurisdiction.
the present rules, including the payment of docket fees and
the certification of non forum shopping. WHEREFORE, foregoing premises considered, the Petition
is hereby DENIED DUE COURSE and ordered
Thence, the petitioner assailed the dismissal in the CA via DISMISSED. Resultantly, the assailed Resolution/s are
petition for certiorari, ascribing grave abuse of discretion hereby AFFIRMED, with costs to Petitioner.
on the part of the RTC in granting FDC and FAI’s motion
to dismiss. SO ORDERED.

On August 1, 2002, the CA dismissed the petition for On February 24, 2003, the CA denied the petitioner’s
certiorari,6 stating: motion for partial reconsideration.7

Petition denied. Hence, the petitioner has come to the Court for review,
asserting the applicability of Section 108 of P.D. 1529, and
In a special civil action for certiorari, the burden is on insisting that his petition filed under Section 108 of P.D.
Petitioner to prove not merely reversible error, but grave 1529 should not be dismissed because it was exempt from
abuse of discretion amounting to lack or excess of the requirements of paying docket fees, of service of
jurisdiction for the part of Public Respondent. Mere abuse summons, and of the certification against forum shopping
of discretion is not enough (Don Orestes Romualdez due to its not being an initiatory pleading.
Electric Corporation, Inc. vs. NLRC, 319 SCRA 255). The
mere fact that Public Respondent does not subscribe to nor Ruling
accepts Petitioner’s arguments or viewpoint does not make
the former guilty of committing grave abuse of discretion.
The petition for review is devoid of merit. The dismissal of on the certificate has been changed; (e) when the registered
the petition for certiorari by the CA was proper and correct owner has been married, or, registered as married, the
because the RTC did not abuse its discretion, least of all marriage has been terminated and no right or interest of
gravely. heirs or creditors will thereby be affected; (f) when a
corporation, which owned registered land and has been
Section 108 of P.D. No. 1529 reads as follows: dissolved, has not conveyed the same within three years
after its dissolution; and (g) when there is reasonable
ground for the amendment or alteration of title.8
Section 108. Amendment and alteration of certificates. –
No erasure, alteration, or amendment shall be made upon
the registration book after the entry of a certificate of title We agree with both the CA and the RTC that the petitioner
or of a memorandum thereon and the attestation of the was in reality seeking the reconveyance of the property
same by the Register of Deeds, except by order of the covered by OCT No. 684, not the cancellation of a
proper Court of First Instance. A registered owner or other certificate of title as contemplated by Section 108 of P.D.
person having interest in the registered property, or, in No. 1529. Thus, his petition did not fall under any of the
proper cases, the Register of Deeds with the approval of the situations covered by Section 108, and was for that reason
Commissioner of Land Registration, may apply by petition rightly dismissed.1âwphi1
to the court upon the ground that the registered interest of
any description, whether vested, contingent, expectant or Moreover, the filing of the petition would have the effect of
inchoate appearing on the certificate, have terminated and reopening the decree of registration, and could thereby
ceased; or that new interest not appearing upon the impair the rights of innocent purchasers in good faith and
certificate have arisen or been created; or that an omission for value. To reopen the decree of registration was no
or an error was made in entering a certificate or any longer permissible, considering that the one-year period to
memorandum thereon, or on any duplicate certificate: or do so had long ago lapsed, and the properties covered by
that the same or any person in the certificate has been OCT No. 684 had already been subdivided into smaller lots
changed or that the registered owner has married, or, if whose ownership had passed to third persons. Thusly, the
registered as married, that the marriage has been terminated petition tended to violate the proviso in Section 108 of P.D.
and no right or interest of heirs or creditors will thereby be No. 1529, to wit:
affected; or that a corporation which owned registered land
and has been dissolved has not yet convened the same xxx Provided, however, That this section shall not be
within three years after its dissolution; or upon any other construed to give the court authority to reopen the
reasonable ground; and the court may hear and determine judgment or decree of registration, and that nothing shall be
the petition after notice to all parties in interest, and may done or ordered by the court which shall impair the title or
order the entry or cancellation of a new certificate, the other interest of a purchaser holding a certificate for value
entry or cancellation of a memorandum upon a certificate, in good faith, or his heirs and assigns without his or their
or grant any other relief upon such terms and conditions, written consent. Where the owner’s duplicate certificate is
requiring security and bond if necessary, as it may consider not presented, a similar petition may be filed as provided in
proper; Provided, however, That this section shall not be the preceding section.
construed to give the court authority to reopen the
judgment or decree of registration, and that nothing shall be
done or ordered by the court which shall impair the title or Nor is it subject to dispute that the petition was not a mere
other interest of a purchaser holding a certificate for value continuation of a previous registration proceeding. Shorn of
and in good faith, or his heirs and assigns without his or the thin disguise the petitioner gave to it, the petition was
their written consent. Where the owner’s duplicate exposed as a distinct and independent action to seek the
certificate is not presented, a similar petition may be filed reconveyance of realty and to recover damages.
as provided in the preceding section. Accordingly, he should perform jurisdictional acts, like
paying the correct amount of docket fees for the filing of an
initiatory pleading, causing the service of summons on the
All petitions or motions filed under this section as well as adverse parties in order to vest personal jurisdiction over
any other provision of this decree after original registration them in the trial court, and attaching a certification against
shall be filed and entitled in the original case in which the forum shopping (as required for all initiatory pleadings).
decree of registration was entered. He ought to know that his taking such required acts for
granted was immediately fatal to his petition, warranting
Based on the provision, the proceeding for the amendment the granting of the respondents’ motion to dismiss.
and alteration of a certificate of title under Section 108 of
P.D. No. 1529 is applicable in seven instances or situations, WHEREFORE, the PETITION FOR REVIEW ON
namely: (a) when registered interests of any description, CERTIORARI is DENIED, and the decision of the Court
whether vested, contingent, expectant, or inchoate, have of Appeals is AFFIRMED.
terminated and ceased; (b) when new interests have arisen
or been created which do not appear upon the certificate;
(c) when any error, omission or mistake was made in The petitioner shall pay the costs of suit.
entering a certificate or any memorandum thereon or on
any duplicate certificate; (d) when the name of any person SO ORDERED
REPUBLIC OF THE PHILIPPINES, Petitioner,  Herein petitioner Republic of the Philippines (petitioner),
vs. through the Office of the Solicitor General (OSG), filed a
CARMEN SANTORIO GALENO, Respondent. motion for reconsideration claiming that the adjoining
owners had not been notified, stressing that such notice is a
DECISION jurisdictional requirement. 15 In the Order 16 dated January
22, 2007, the RTC denied the motion, finding that a Notice
of Hearing 17 was sent to the adjoining owners. As such,
PERLAS-BERNABE, J.: respondent was able to prove compliance with the said
jurisdictional requirement. 18
Assailed in this petition for review on certiorari1 are the
Decision2 Aggrieved, petitioner appealed to the CA.19

dated June 27, 2013 and the Resolution3 dated September The CA Ruling
17, 2014 rendered by the Court of Appeals (CA) in CA-
G.R. CV No. 02085, affirming the Orders dated October
13, 20064 and January 22, 20075 of the Regional Trial In a Decision20 dated June 27, 2013, the CA affirmed the
Court of Dumangas, Iloilo, Branch 68 (RTC), which RTC Order.1âwphi1 It found that respondent, by a
allowed the correction of the area of Lot No. 2285 in preponderance of evidence, was able to prove, based on the
Original Certificate of Title (OCT) No. 46417 from 20,948 records of the proper government authority, i.e., the Office
square meters to 21,298 square meters. of the Technical Director, Land Management Services of
the DENR, that the true and correct area of the subject
property was 21,298 square meters as shown in the
The Facts approved plan. Moreover, petitioner failed to rebut with
contrary evidence respondent's claim that she and her co-
On September 2, 2003, respondent Carmen Santorio owners followed the boundaries in the technical description
Galeno (respondent) filed a petition6 for correction of the of OCT No. 46417 when they caused its resurvey. In fact,
area of Lot No. 2285 covered by OCT No. 46417, Dingle no proof had been adduced to show that the boundaries had
Cadastre (subject property) before the RTC. She alleged been altered. Also, the CA pointed out that none of the
therein that she is one of the co-owners of the subject adjoining owners, who were properly notified of the
property by virtue of a Deed of Sale7 dated July 6, 1962. proceedings and who stand to be adversely affected by the
The survey and subdivision of the subject property was change in the land area of the subject property, objected to
duly approved by the Department of Environment and respondent's petition.21
Natural Resources (DENR) per its Approved Subdivision
Plan of Lot No. 2285.8 Petitioner's motion for reconsideration22 was denied in a
Resolution23 dated September 17, 2014; hence, this petition.
Respondent further alleged that when she and her co-
owners had the subject property resurveyed for the purpose The Issue Before the Court
of partition, they discovered a discrepancy in the land area
of the subject property as appearing in OCT No. 46417,9in
that the title reflects an area of 20,948 square meters, while The issue advanced for the Court's resolution is whether or
the Certification 10 issued by the DENR Office of the not the CA erred in upholding the correction of the area of
Regional Technical Director, Lands Management Services, the subject property in OCT No. 46417.
shows an area of 21,298 square meters. Hence, she sought
to correct the area of the subject property in order to avoid The Court's Ruling
further confusion, and claimed to have notified the
adjoining owners. 11 The petition is meritorious.

There being no opposition to the petition, the RTC allowed A scrutiny of the evidence marked and formally offered by
the presentation of respondent's evidence ex parte before respondent before the court a quo shows that the former
the Branch Clerk as well as for the satisfaction of the failed to prove that there was sufficient basis to allow the
jurisdictional requirements. 12 correction of the area of the subject property in OCT No.
46417 from 20,948 square meters to 21,248 square meters.
The RTC Ruling
Records reveal that respondent offered in evidence the
In an Order13 dated October 13, 2006, the RTC granted the following documents: (a) the Certification24 issued by a
petition upon a finding that respondent was able to certain Althea C. Acevedo (Acevedo), Engineer IV, Chief
substantiate the allegations in her petition to warrant a of the Technical Services Section of the Office of the
correction of the area of the subject property. Hence, it Regional Technical Director, Land Management Services
directed the Register of Deeds of the Province of Iloilo to of the DENR in Iloilo City, which states that "the true and
correct such area in OCT No. 46417 from 20,948 to 21,298 correct area of [L]ot 2285, Cad. 246 Dingle Cadastre is
square meters. 14 21,928 square meters;" (b) the technical description25 of
Lot No. 2285, a copy of which was certified by Ameto duty by a public officer," such as entries made by the Civil
Caballero (Caballero), Chief of the Surveys Division, while Registrar in the books of registries, or by a ship captain in
another copy was certified correct by Acevedo; and (c) the the ship's logbook. The certifications are not the certified
approved subdivision plan of Lot No. 2258, 26 certified by copies or authenticated reproductions of original official
Rogelio M. Santome (Santome), Geodetic Engineer; records in the legal custody of a government office. The
Alfredo Muyarsas (Muyarsas), Chief of the Regional certifications are not even records of public
Surveys Division, and Edgardo R. Gerobin (Gerobin), OIC, documents. x x x28 (Emphases supplied)
Regional Technical Director of the Land Management
Services, DENR. On the strength of these pieces of As such, sans the testimonies of Acevedo, Caballero, and
evidence, respondent sought a reconciliation of the area of the other public officers who issued respondent's
the subject property with the records of the DENR. documentary evidence to confirm the veracity of its
contents, the same are bereft of probative value and cannot,
Unfortunately, the foregoing documentary evidence are not by their mere issuance, prove the facts stated therein. 29 At
sufficient to warrant the correction prayed for. The Court best, they may be considered only as prima facie evidence
cannot accord probative weight upon them in view of the of their due execution and date of issuance but do not
fact that the public officers who issued the same did not constitute prima facie evidence of the facts stated therein.30
testify in court to prove the facts stated therein.
In fact, the contents of the certifications are hearsay
In Republic v. Medida,  27 the Court held that certifications because respondent's sole witness and attorney-in-fact, Lea
of the Regional Technical Director, DENR cannot be Galeno Barraca, was incompetent to testify on the veracity
considered prima facie evidence of the facts stated therein, of their contents, 31 as she did not prepare any of the
holding that: certifications nor was she a public officer of the concerned
government agencies. Notably, while it is true that the
Public documents are defined under Section 19, Rule 132 public prosecutor who represented petitioner interposed no
of the Revised Rules on Evidence as follows: objection to the admission of the foregoing evidence in the
proceedings in the court below,32 it should be borne in mind
that "hearsay evidence, whether objected to or not, has no
(a) The written official acts, or records of the official acts probative value unless the proponent can show that the
of the sovereign authority, official bodies and tribunals, and evidence falls within the exceptions to the hearsay evidence
public officers, whether of the Philippines, or of a foreign rule,"33 which do not, however, obtain in this case. Verily,
country; while respondent's documentary evidence may have been
admitted due to the opposing party's lack of objection, it
(b) Documents acknowledged before a notary public except does not, however, mean that they should be accorded any
last wills and testaments; and probative weight. The Court has explained that:

(c) Public records, kept in the Philippines, of private The general rule is that hearsay evidence is not admissible.
documents required by law to be entered therein. However, the lack of objection to hearsay testimony may
result in its being admitted as evidence. But one should not
Applying Section 24 of Rule 132, the record of public be misled into thinking that such declarations are thereby
documents referred to in Section 19(a), when admissible impressed with probative value. Admissibility of evidence
for any purpose, may be evidenced by an official should not be equated with weight of evidence. Hearsay
publication thereof or by a copy attested by the officer evidence whether objected to or not cannot be given
having legal custody of the record, or by his deputy x x x. credence for it has no probative value.34

Section 23, Rule 132 of the Revised Rules on Evidence Besides, case law states that the "absence of opposition
provides: from government agencies is of no controlling significance
because the State cannot be estopped by the omission,
mistake or error of its officials or agents. Neither is the
"Sec. 23. Public documents as evidence. - Documents Republic barred from assailing the decision granting the
consisting of entries in public records made in the petition for reconstitution [or correction of title, as in this
performance of a duty by a public officer are prima case] if, on the basis of the law and the evidence on record,
facie evidence of the facts stated therein. All other public such petition has no merit."35 Moreover, "in civil cases, the
documents are evidence, even against a third person, of the party having the burden of proof must produce a
fact which gave rise to their execution and of the date of the preponderance of evidence thereon, with plaintiff having to
latter." rely on the strength of his own evidence and not upon the
weakness of the defendant's."36
The CENRO and Regional Technical Director, FMS-
DENR, certifications [do] not fall within the class of In fine, the Court holds that respondent did not present any
public documents contemplated in the first sentence of competent evidence to prove that the true and correct area
Section 23 of Rule 132. The certifications do not reflect of the subject property is 21,298 square meters instead of
"entries in public records made in the performance of a
20,948 square meters to warrant a correction thereof in
OCT No. 46417. Accordingly, respondent's petition for the
correction of the said Certificate of Title must be denied,
and the present petition be granted.

WHEREFORE, the petition is GRANTED. The assailed

Decision dated June 27, 2013 and the Resolution dated
September 17, 2014 rendered by the Court of Appeals in
CA-G.R. CV No. 02085 are hereby REVERSED and SET
ASIDE. Carmen Santorio Galeno's petition for correction
of area of Lot No. 2285 on Original Certificate of Title No.
46417 is DISMISSED.

SO ORDERED

DORIS CHIONGBIAN-OLIVA, Petitioner, 
vs. Certificate of Title No. 5455 be reduced to the applicable
REPUBLIC OF THE PHILIPPINES, THE legal easement of three (3) meters in accordance with law.
DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES AND THE REGISTER OF Accordingly, the Register of Deeds of Cebu City is hereby
DEEDS OF CEBU CITY, Respondents. directed to cancel the above legal encumbrance of forty
(40) meters annotated on Petitioner’s Transfer Certificate
DECISION of Title No. 5455 and in lieu thereof, annotate the
applicable legal encumbrance of three (3) meters for river
QUISUMBING, J.: bank protection.

This petition for certiorari assails (1) the Decision1 dated SO ORDERED.10

August 7, 2003 of the Court of Appeals in CA-G.R. CV.
No. 74409, reversing the Decision2 dated December 13, On appeal, the Court of Appeals reversed the trial court’s
2001 of the Regional Trial Court of Cebu City, Branch 12 decision. It upheld the DENR’s claim that the property was
in SP. Proc. No. 10746-CEB, and (2) the Resolution3 dated inalienable. Accordingly, a positive act of the government
March 17, 2004, denying the motion for reconsideration. was necessary to declassify it from forest land to alienable
land. Declaration of the property as residential in the tax
The following facts are undisputed. declaration and reclassification of the area where it is
located as urban were insufficient bases to reclassify the
property. The fallo of the appellate court’s decision reads:
Petitioner Doris Chiongbian-Oliva is the registered owner
of a parcel of land in Talamban, Cebu City, as evidenced
by Transfer Certificate of Title (TCT) No. 5455.4 This title WHEREFORE, premises considered, the Decision dated
originated from Original Certificate of Title (OCT) No. December 13, 2001, of the Regional Trial Court, 7th
1066 from a free patent granted on September 11, 1969 Judicial Region, Branch 12, Cebu City, in SP. PROC. NO.
under Commonwealth Act No. 141,5 as amended. The free 10746-CEB, is hereby REVERSED and SET ASIDE. No
patent, OCT No. 1066, and TCT No. 5455 contained the pronouncement as to costs.
condition that a forty-meter legal easement from the bank
of any river or stream shall be preserved as permanent SO ORDERED.11
timberland.6
The appellate court later denied petitioner’s motion for
On October 1, 2001, petitioner filed a petition for reduction reconsideration.
of legal easement docketed as SP. Proc. No. 10746-CEB
before the Regional Trial Court of Cebu City, Branch 12. Petitioner now raises the following issues:
Petitioner alleged that the property is residential as shown
by the tax declaration7 and the Certification8 of the Office
of the City Assessor. Thus, the applicable legal easement is I.
only three meters pursuant to Department of Environment
and Natural Resources (DENR) Administrative Order No. WHETHER OR NOT PETITIONER’S LOT COVERED
99-21,9 and not forty meters, which applies to timberlands BY THE LEGAL ENCUMBRANCE IS A PUBLIC
and forest lands. Petitioner also alleged that enforcing the LAND/LAND OF THE PUBLIC DOMAIN (AND THUS,
forty-meter legal easement would virtually deprive her of CANNOT BE RECLASSIFIED EXCEPT BY THE
the use and enjoyment of the property since it consists only EXECUTIVE DEPARTMENT) OF THE
of 1,000 square meters. GOVERNMENT, OR A PRIVATE LAND.

The DENR countered that the property is inalienable. It II.

also claimed that the applicant agreed on the forty-meter
legal easement when the free patent was applied for. WHETHER OR NOT THE TRIAL COURT IS CORRECT
IN TAKING JUDICIAL NOTICE OF THE FACT THAT
The trial court ruled in favor of petitioner. It said that there PETITIONER’S LOT COVERED BY TCT NO. 5455 IS
is no longer any reason for the forty-meter legal easement SITUATED IN AN URBAN AREA AND NOT IN A
because the property had been transformed into residential FOREST AREA, AND IN THUS CONCLUDING THAT
land and the area where it is located has been reclassified as THE LEGAL EASEMENT APPLICABLE FOR RIVER
urban. Applying DENR A.O. No. 99-21, the applicable BANK PROTECTION IS THREE (3) METERS AND
legal easement is only three meters. The decision’s decretal NOT FORTY (40) METERS.
portion states:
III.
WHEREFORE, premises considered, it is hereby ordered
that the legal encumbrance of forty (40) meters for river WHETHER OR NOT SECTION 90(i) OF C.A. NO. 141
bank protection annotated on Petitioner’s Transfer WHICH PROVIDES FOR A UNIFORM EASEMENT OF
FORTY (40) METERS FROM THE BANK ON EACH R.A. 1273 [C.A. No. 141, Section 90(i)] whereby a strip of
SIDE OF ANY RIVER, AND WHICH PRESERVES THE forty (40) meters wide starting from the banks on each side
SAID 40-METER PORTION AS PERMANENT of any river or stream that may be found on the land shall
TIMBERLAND REGARDLESS OF WHETHER IT IS be demarcated and preserved as permanent timberland.
SITUATED IN A FOREST AREA OR AN URBAN
AREA, IS STILL APPLICABLE TO LOTS SITUATED Likewise, to be demarcated are public lands along the
IN AN URBAN AREA IN THE LIGHT OF THE banks of rivers and streams and the shores of the seas and
PROVISIONS OF SUBSEQUENT LEGISLATION, lakes throughout their entire length and within a zone of
SPECIFICALLY SECTION 51 OF P.D. NO. 1067.12 three (3) meters in urban areas, twenty (20) meters in
agricultural areas and forty (40) meters in forest area, along
Simply stated, the issues are: (1) Is the property public or their margins which are subject to the easement for public
private land? and (2) Is the applicable legal easement forty use in the interest of recreation, navigation, floatage,
or three meters? fishing and salvage.

On the first issue, C.A. No. 141, as amended, provides that xxxx
lands of the public domain may be classified by the
President, upon the recommendation of the Secretary of 2.3 Survey of Titled Lands:
Environment and Natural Resources, into: (1) alienable or
disposable; (2) timber; and (3) mineral lands.13 However,
only alienable or disposable lands may be disposed of 2.3.1 Administratively Titled Lands:
through any of the forms of concession enumerated in the
law.14 A free patent is one of such concessions15 and once it The provisions of item 2.1.a and 2.1.b shall be observed as
is registered and the corresponding certificate of title the above. However, when these lands are to be subdivided,
issued, the land covered by them ceases to be part of the consolidated or consolidated-subdivided, the strip of three
public domain and becomes private property.16 (3) meters which falls within urban areas shall be
demarcated and marked on the plan for easement and bank
Verily, by the issuance of a free patent on September 11, protection.
1969, and the subsequent issuance of OCT No. 1066 and
TCT No. 5455, the property in this case had become private The purpose of these strips of land shall be noted in the
land. It is inconsistent for an alienable land of the public technical description and annotated in the title.
domain to be covered by a free patent and at the same time
retain its character as public land. xxxx

On the second issue, Section 90(i) of C.A. No. 141 requires Running in parallel vein is the Water Code of the
that a forty-meter legal easement from the bank of any river Philippines17 which provides:
or stream shall be preserved as permanent timberland.
More specifically, it provides:
Art. 51. The banks of rivers and streams and the shores of
the seas and lakes throughout their entire length and within
(i) That the applicant agrees that a strip forty meters wide a zone of three (3) meters in urban areas, twenty (20)
starting from the bank on each side of any river or stream meters in agricultural areas and forty (40) meters in forest
that may be found on the land applied for, shall be areas, along their margins, are subject to the easement of
demarcated and preserved as permanent timberland to be public use in the interest of recreation, navigation, floatage,
planted exclusively to trees of known economic value, and fishing and salvage. No person shall be allowed to stay in
that he shall not make any clearing thereon or utilize the this zone longer than what is necessary for recreation,
same for ordinary farming purposes even after patent shall navigation, floatage, fishing or salvage or to build
have been issued to him or a contract of lease shall have structures of any kind.
been executed in his favor. (Emphasis supplied.)

Since the property in this case was originally alienable land

To implement this, the DENR promulgated A.O. No. 99-21 of the public domain, the application for free patent
which provides the guidelines in the processing, contained the condition that a forty-meter legal easement
verification, and approval of isolated and cadastral surveys. from the banks on each side of any river or stream found on
Pertinent to this case are the following provisions: the land shall be demarcated and preserved as permanent
timberland. However, after the property was
2.1 Original Surveys: administratively titled, it underwent several surveys for
purposes of subdivision, consolidation, or consolidation-
2.1.a Public Lands: subdivision as evidenced by TCT No. 5455. This title
provides that it is a transfer from TCT Nos. 3975 and
436018and describes the property as Lot 2 of the
All alienable and disposable (A and D) lands of the public consolidation-subdivision plan Pcs-07-002121, being a
domain shall be surveyed pursuant to Section 1 Par. (1) of portion of Lot 6 and 7 Pcs-07-000974.19 Thus, presently
only three meters is required to be demarcated and
preserved as permanent timberland.

In this case, the trial court properly took judicial notice that
Talamban, Cebu City is an urban area. Judicial notice is the
cognizance of certain facts which judges may properly take
and act on without proof because they already know
them.20 A municipal jurisdiction, whether designated as
chartered city or provincial capital, is considered as urban
in its entirety if it has a population density of at least 1,000
persons per square kilometer.21 The City of Cebu was
created on October 20, 1934 under Commonwealth Act No.
58.22 It is a highly urbanized city classified as entirely
urban.23 Thus, all its barangays, including Talamban, are
considered urban.

Conformably with the foregoing considerations, the

reduction of the legal easement of forty meters on
petitioner’s property covered by TCT No. 5455 to three
meters now is in order.

WHEREFORE, the instant petition is GRANTED. The

assailed Decision dated August 7, 2003 and Resolution
dated March 17, 2004 of the Court of Appeals in CA-G.R.
CV. No. 74409 are REVERSED, and the Decision dated
December 13, 2001 of the Regional Trial Court of Cebu
City, Branch 12 in SP. Proc. No. 10746-CEB is
REINSTATED.

SO ORDERED

BIBLIA TOLEDO-BANAGA and JOVITA

TAN, petitioners, 
vs. Meanwhile, on January 7, 1993, petitioner Banaga sold the
COURT OF APPEALS and CANDELARIO subject property to petitioner Tan with the deed of absolute
DAMALERIO, respondents. sale mentioning private respondent's certificate of title
which was not yet cancelled. Notwithstanding the notice
of lis pendens, petitioner Tan subdivided the property in
question under a subdivision plan, which she made not in
her name but in the name of private respondent. There
being no preliminary injunction issue and with the
MARTINEZ, J.: expiration of the TRO, petitioner Tan asked the Register of
Deeds to issue new titles in her name. On March 24, 1993,
such titles were issued in petitioner Tan's name but it still
The Court of Appeals (CA), in a decision penned by then carried the annotations of the two notices of lis pendens.
justice Richard Francisco, 1 categorically declared private Upon learning of the new title of petitioner Tan, private
respondent as the absolute owner of the land subject of this respondent impleaded the former in his petition in CA-G.R.
case. That decision was affirmed by this Court, became No. 29869.
final and executory and was remanded to the lower court
for execution. But the Register of Deeds frustrated private
respondent's judicially determined right as it refused to On October 28, 1993, the CA set aside the August 7, 1992
issue Certificates of Title in his name on the ground that the and January 4, 1993 orders of the trial court and declared
matter should be referred "en consulta" to the Register of private respondent absolute owner of the subject property
Deeds before petitioner's title can be canceled and a new the CA disposed of the petition as follows:
one issued in the name of the winning party — herein
private respondent. So, for the third time, this simple WHEREFORE, in view of the
redemption case which commenced in the 1980's is again foregoing considerations, the instant
before this Court. petition is hereby GRANTED. The
order issued by public respondent judge
Here is a summary of the facts, over which there is no dated August 7, 1992 and January 4,
dispute: 1993 are hereby order SET ASIDE and
a new one is hereby entered declaring
petitioner as the absolute owner of the
In an action for redemption filed by petitioner Banaga, the parcels of land subject of redemption
trial court declared that she had lost her right to redeem her for failure of private respondent to
property earlier foreclosed and which was subsequently exercise the right of redemption within
sold at public auction to private respondent 2Certificates of the thirty (30) days period previously
Title covering the said property were issued to private granted her by this court. 7
respondent over which petitioner Banaga annotated on
March 3, 1983 a notice of lis pendens. 3 On appeal by
petitioner Banaga, the CA reversed the decision of the trial That decision became final and executory after petitioner
court and allowed the former to redeem the property within Banaga's petition for review was dismissed by this Court
a certain period.4 Private respondent's petition to this Court for lack of merit.8 Upon motion of private respondent, the
was dismissed5 and the decision became final. trial court issued a writ of execution on December 27, 1994
ordering the Register of Deeds to reinstate the Certificates
of Title in the name of the movant — herein private
On June 11, 1992 petitioner Banaga tried to redeem the respondent. In its order which petitioners did not contest,
property by depositing with the trial court the amount of the court a quo said that:
redemption which was financed by her co-petitioner Tan.
Private respondent opposed the redemption arguing that it
was made beyond the time given to her by the court in the Although there is no specific
earlier case However, the lower court issued an order on pronouncement in the decision of the
August 7, 1992 upholding the redemption and ordered the Court of Appeals that reverts the titles
Register of Deeds to cancel private respondent's to the land subjects of redemption to
Certificates of Title and issue new titles in the name of the defendant, the fact that it declared
petitioner Banaga6 When his motion for reconsideration the petioner (Damalerio) as the
was denied by the trial court in an order dated January 4, absolute owner of the lands entitles him
1993, private respondent filed a petition for certiorari with to writ of execution issuing from this
the CA which was docketed as CA-G.R. No. 29869. On court directing the Register of Deeds to
January 11, 1993, private respondent caused the annotation reinstate his titles to his name. As it is
of said petition as another notice of lis pendens on the implied from the decision declaring
Certificates of Title. Three days later, the CA issued a him the absolute owner of the land be
temporary restraining order to enjoin the execution of the reverted to him (See Uy v. Capulong,
August 7, 1992 and January 4, 1993 orders. 221, SCRA 87).
 Let therefore a writ of execution issue Upon denial by the CA of their motion for reconsideration,
in this case to enforce the decision of petitioners filed the instant petition
the Court of Appeals. In this for certiorari and mandamus. The Court, however, is
connection, the Register of Deeds of puzzled why petitioners, in their petition, would seek to set
the Registry of Deeds for General aside the two orders (January 4, 1995 and March 29, 1996)
Santos City is hereby ordered to of "respondent judge" who was not named in their
reinstate the title of Candelario B. petition.13 Assuming this be a mere lapsus since they also
Damalerio — Transfer Certificates of confusingly refer to Banaga and Tan as "private
Title No. T-19570 and T-19571, both respondent" and to Damalerio as "petitioner",14 the petition
of the Registry of Deeds from General is still utterly without merit. It is petitioners' stand (1) that
Santos City.9 petitioner Tan is a buyer in god faith and (2) that the
remedy of private respondent to secure the titles in his
But the Register of Deeds refused to comply with the writ name is by consulta to the Land Registration Commissioner
of execution alleging that the Certificates of Title issued to and not through contempt.
petitioner Tan must first be surrendered. Accordingly,
private respondent moved to cite the Register of Deeds in The Court is not convinced of the arguments proffered by
contempt of court which was denied, as the trial court ruled petitioners.
on January 11, 1995 that the former's remedy is
by consulta to the Commissioner of Land Registration.10 In By arguing that petitioner Tan was a buyer in good faith,
another order (dated March 29, 1996) the trial court petitioners in effect raise once more the issue of ownership
likewise denied private respondent's motion for the of the subject property. But such issue had already been
issuance of a writ of possession ruling that the latter's clearly and categorically ruled upon by the CA and
remedy is a separate action to declare petitioner Tan's affirmed by this Court, wherein private respondent was
Certificates of Title void. Aggrieved, private respondent adjudged the rightful and absolute owner thereof. The
again elevated the case to the CA via a petition decision in that case bars a further repeated consideration
for certiorari and mandamus  11 assailing the above- of the very same issue that has already been settled with
mentioned two orders of the court a quo naming as finality. To once again re-open that issue through a
respondents the trial court judge, the Register of Deeds and different avenue would defeat the existence of our courts as
the petitioners. On November 7, 1996, the CA rendered a final arbiters of legal controversies. Having attained
decision granting the petition and, among others, set aside finality, the decision is beyond review or modification even
the assailed orders of the trial court. The dispositive portion by this Court.15
of the CA decision reads:
Under the principle of res judicata, the Court and the
WHEREFORE, in view of all the parties, are bound by such final decision, otherwise, there
foregoing considerations, the petition is will be no end to litigation. It is to the interest of the public
GRANTED. Judgment is hereby that there should be an end to litigation by the parties over a
rendered: subject fully and fairly adjudicated, and an individual
should not be vexed twice for the same cause. 16 All the
1. setting aside the orders of the elements of res judicata are present in this case, which are:
respondent judge dated January 11,
1995 and March 29, 1996; a. the former judgment must be final;
2. declaring the title issued to Biblia b. the court which rendered judgment had
Toledo-Banaga, Jovita Tan and to those jurisdiction over the parties and the
other subsequent transferee or subject matter;
transferees, if any, as null and void; c. it must be a judgment on the merits;
3. ordering the Register of Deeds of
General Santos City to issue a new d. and there must be between the first and
certificates of title to Candelario second actions identity of parties,
Damalerio over the parcels of land in subject matter, and cause of action.17
question;
4. ordering the respondent court to issue The judgment in the redemption suit had long become final
writ of execution for the enforcement and executory; there is no question that the court had
of this decision and of the decision in jurisdiction over the parties and the subject matter; it
CA-G.R. SP No. 29868 (sic), as well as involves an adjudication on the merits of the case as the
writ of possession for the delivery to court discussed and passed upon petitioner Banaga's right
petitioner Damalerio of the Physical of redemption which she did not timely exercise and as a
possession of the parcels of land consequence, lost her claim of ownership of the lot. Both
subject matter of this case. petitioners and private respondent are parties to the earlier
cases, disputing the same parcel of land with both opposing
SO ORDERED. 12 parties claiming ownership thereof. Certainly, res
judicata had set in. Besides, once judgment had become
final and executory, it can no longer distributed no matter enforcement of a final and executory decision, they should
how erroneous it may be. In any case, no such error was have secured the issuance of a writ of preliminary
attributed to in this case. injunction,25 but which they did not avail knowing that
there exists no legal or even equitable justifications to
Contrary to petitioners' argument, private respondent's support it.
remedy is not a direct or independent civil action for
cancellation of petitioner Tan's titles. The facts, At any rate, the time petitioner Banaga sold the property to
circumstances, evidence and arguments invoked in this petitioner Tan, the latter was well aware or the interest of
derailed final and executory decision are the very same private respondent over the lot. Petitioner Tan furnished the
matters that will be established assuming such independent amount used by petitioner Banaga for the attempted
suit is legally warranted. It does not matter whether the redemption. One who redeems in vain a property of another
former case was a redemption suit and the new one will be acquires notice that there could be a controversy. It is for
for cancellation of title because the test of identity of causes the same reason that petitioner Tan was included as party to
of action is not in its form but whether the same evidence the case filed in court. Worse, at the time of the sale,
would support and establish the former and present causes petitioner Tan was buying property not registered in the
of action. 18 seller's name. This clear from the deed of absolute sale
which even mentioned that the Certificates of Title is still
Petitioners other contention that the execution of the final in the name of private respondent. It is settled that a party
and executory decision — which is to issue titles in the dealing with a registered land need not go beyond the
name of private respondent — cannot be compelled Certificate of Title to determine the true owner thereof so
by mandamus because of the "formality" that the registered as to guard or protect her interest. She has only to look and
owner first surrenders her duplicate Certificates of Title for rely on the entries in the Certificate of Title. By looking at
cancellation per Section 80 of Presidential Decree the title, however, petitioner Tan cannot feigned ignorance
152919cited by the Register of Deeds,20 bears no merit. In that the property is registered in private respondent's name
effect, they argue that the winning party must wait and not in the name of the person selling to her. Such fact
execution until the losing party has complied with the alone should have at least prompted, if not impelled her to
formality of surrender of the duplicate title. Such investigate deeper into the title of her seller — petitioner
preposterous contention borders on the absurd and has no Banaga, more so when such effort would not have entailed
place in our legal system. Precisely, the Supreme Court had additional hardship, and would have been quite easy, as the
already affirmed the CA's judgment that Certificates of titles still carried the two notices of lis pendens.
Title be issued in private respondent's name. To file another
action just to compel the registered owner, herein petitioner By virtue of such notices, petitioner Tan is bound by the
Tan, to surrender her titles constitute violation of, if not outcome of the litigation subject of the lis pendens. As a
disrespect to, the orders of the highest tribunal. Otherwise, transferee pendente lite, she stands exactly in. the shoes of
if execution cannot be had just because the losing party will the transferor and must respect any judgment or decree
not surrender her titles, the entire proceeding in the courts, which may be rendered for or against the transferor. Her
not to say the efforts, expenses and time of the parties, interest is subject to the incident or results of the pending
would be rendered nugatory. It is revolting to conscience to suit, and her Certificates of Title will, in that respect, afford
allow petitioners to further avert the satisfaction of their her no special protection.26
obligation because of sheer literal adherence to
technicality,21 or formality of surrender of the duplicate To repeat, at the time of the sale, the person from whom
titles. The surrender of the duplicate is implied from the petitioner Tan bought the property is neither the registered
executory decision since petitioners themselves were owner nor was the former authorized by the latter to sell the
parties thereto. Besides, as part of the execution process, it same. She knew she was not dealing with the registered
is a ministerial function of the Register of Deeds to comply owner or a representative of the latter. One who buys
with the decision of the court to issue a title and register a property with full knowledge of the flaws and defects in the
property in the name of a certain person, especially when title of his vendor is enough proof of his bad faith27 and
the decision had attained finality, as in this case. cannot claim that he acquired title in good faith as against
the owner or of an interest therein.28 When she nonetheless
In addition, the enforcement of final and executory proceeded to buy the lot, petitioner Tan gambled on the
judgment is likewise a ministerial function of the result of litigation.29 She is bound by the outcome of her
courts22 and does not call for the exercise of discretion. indifference with no one to blame except herself if she
Being a ministerial duty, a writ of mandamus lies to compel looses her claim as against one who has a superior right or
its performance.23 Moreover, it is axiomatic that where a interest over the property. These are the undeniable and
decision on the merits is rendered and the same has become unconverted facts found by the CA, which petitioners even
final and executory, as in this case, the action on procedural quote and cite in their petition. As aptly concluded by the
matters or issues becomes moot and academic. 24Thus, the CA that petitioner Tan is indeed a buyer in bad faith on
so-called consulta to the Commissioner of Land which the Court agrees:
Registration, which is not applicable herein, was only a
naive and belated effort resorted to by petitioners in order Notwithstanding her constructive and
to delay execution. If petitioners desire to stop the actual knowledge that Damalerio was
 claiming the land, that the land was in in bad faith does not exempt the latter
his name, and it was involved in from complying with the decision
pending litigation. Jovita Tan bought it adverse to his predecessor in interest,
from Banaga on January 7, 1993. The nor preclude him from being reached
deed of sale recites that the parcels of by writ of execution;
land so I were covered by Transfer
Certificates of Title No. (formerly) [T- 2. Private respondent Tan was a party
12488] T-530) and TCT No. (formerly respondent in CA-G.R. SP No. 29869,
[T-12488] T-530) (sic) "and TCT No. she having been impleaded in a
(formerly P-1294) (Annex "F", supplemental petition, which this Court
Petition). Apart from the fact that gave due course and required the
Banaga was without any TCT, as above respondents to file their answer. The
stated, TCT No. T-12488 was fact that she did not file any pleading,
petitioner's title (Annex "C", Petition). nor intervene therein did not excuse her
Herein private respondent Tan was from being bound by the decision,
buying a land not registered in her otherwise all that a party respondent
seller's (Banaga's) name, but in that was to fold his arm to prevent him from
petitioner Damalerio who had been being bound by a decision in a case.
claiming it as his own. She admitted Her securing titles over the land during
this fact when she had the land the pendency of said case did not
subdivided on February 2, 1993 not in protect her from the effects of said
her name but in the name of Candelario decision. The validity of tile of a
Damalerio (Annex "Q", Reply). purchaser of registered land depends on
Evidently, she was a purchaser in bad whether he had knowledge, actual or
faith because she had full knowledge of constructive, of defects in the title of
the flaws and defects of title of her his vendor. If he has such knowledge,
seller, Banaga . . . . he is a purchaser in bad faith and
acquires the land subject to such
The notice of lis pendens registered on defects (. . . indicates that citations of
March 3, 1993 involving the land in authorities omitted) The title secured
question and private respondent Tan's by a purchaser in bad faith is a nullity
actual knowledge of the then pending and gave the latter no right whatsoever
Civil Case No. 2556, where the as against the owner (. . .).
question as to whether the redemption
of the land which she financed was 3. Private, respondent Tan's titles and
raised, rendered her a purchaser in bad those of her predecessor, Banaga arose
faith and made the decision therein from the void orders of August 7, 1992
binding upon her.30 and January 4, 1993. Since a void order
could not give rise to valid rights, said
Being a buyer in bad faith, petitioner Tan cannot acquire a titles were also necessarily null and
better rights than her predecessor in interest,31 for she void (. . .).
merely stepped into the shoes of the latter. Such finding of
bad faith is final and may not be re-opened for the law 4. Private respondents and respondent
cannot allow the parties to trifle with the courts.32 Judge executed the questioned orders
of August 7, 1993 and January 4, 1993,
With respect to the issue of possession, such right is a pending review of said orders in CA-
necessary incident of ownership.33 The adjudication or G.R. SP No. 29869. The nullification of
ownership to private respondent includes the delivery of said orders by this out imposed upon
possession since the defeated parties in this case has not the private respondents the obligation
shown by what right to retain possession of the land to return the property to Damalerio and
independently of their claim of ownership which was upon respondent Judge, upon motion
rejected.34Otherwise, it would be unjust if petitioners who for execution, to order the cancellation
has no valid right over the property will retain the of private respondents titles and the
same.35 Thus, the CA correctly disagreed with the trial issuance of new titles to him.
court's order denying private respondent's motion for writ
of possession for the following reasons cited in its decision: 5. This Court in its decision in CA-G.R.
SP. No. 29869 declared petitioner
1. The order violates the doctrine laid Damalerio absolute owner of the
down in Javier vs. Court of Appeals, property in question. Private
224 SCRA 704, which ruled that the respondents were parties litigants in
issuance of title in favor of a purchaser said case, who did not claim possession
 of the land separately from their claim
of ownership thereof. Such being the
case, the delivery of possession is
considered included in this Court's
decision declaring Damalerio absolute
owner of the property
(. . .), which can be enforced by writ of
possession (. . .). In denying petitioner's
motion for writ of possession, the trial
court violated said doctrines, and

6. Lastly, the effect of respondent

Judge's order of March 29, 1996 is to
re-open the decision in CA-G.R. SP
No. 29689 for re-litigation and
alteration in a separate action. For
while this Court already declared that
Banaga's redemption of the land
financed by private respondent Tan was
invalid, and as a consequence declared
Damalerio absolute owner of the
property, which was binding against
private respondent Tan, as she was a
respondent therein and a
purchaser pendente lite and in bad
faith, the order of the respondent Court
holding that another civil action be
filed to annul private respondent Tan's
titles would be to re-litigate such issues
and modify or alter this Court's final
decision.

The respondent Court has no authority

to do so.36

WHEREFORE, premises considered, the petition is hereby

DENIED and the assailed decision of the Court of Appeals
is AFFIRMED in toto with costs against petitioners. No
further proceeding will be entertained in this
case.1âwphi1.nêt

SO ORDERED
LETICIA P. LIGON, petitioner,  and/or failure of petitioner to deliver the certificates of title
vs. despite repeated requests.
COURT OF APPEALS, JUDGE CELIA LIPANA-
REYES, Presiding Judge, Branch 81, Regional Trial On 31 January 1992 petitioner Ligon filed an opposition to
Court of Quezon City, Iglesia ni Kristo and the Register the motion on the ground that the IDP was not served copy
of Deeds of Quezon City, respondent. 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.
BELLOSILLO, J.:
On 15 February 1992 petitioner filed a Supplemental
This is a petition for review of the decision of the Court of Opposition questioning the jurisdiction of the trial court
Appeals which affirmed the order of the Regional Trial because the motion involved the registrability of the
Court of Quezon City, Br. 82, granting the motion of document of sale, and she was not made a party to the main
respondent of Iglesia ni Kristo to direct petitioner to case.
surrender the owner's duplicate of the certificates of title in
her possession. On 2 March 1992 the trial court granted the motion of INK
and ordered petitioner to surrender to INK the owner's copy
On 19 October 1990 respondent Iglesia ni Kristo (INK) of RT-26521 (170567) and RT-26520 (176616) in open
filed with the Regional Trial Court of Quezon City a court for the registration of the Absolute Deed of Sale in
complaint 1 for specific performance with damages against the latter's name and the annotation of the mortgage
the Islamic Directorate of the Philippines (IDP) docketed as executed in favor of petitioner on the new transfer
Civil Case No. Q90-6937. Respondent INK alleged in its certificates of title to be issued to INK.2
complaint that by virtue of an Absolute Deed of Sale dated
20 April 1989 IDP sold to it two (2) parcels of land located On 6 April 1992, on motion of petitioner Ligon, the trial
at Tandang Sora, Barrio Culiat, Quezon City, both of which court reconsidered its order by directing her to deliver the
IDP is the registered owner. The parties stipulated in the certificates of title to the Register of Deeds of Quezon
deed of sale that the IDP shall undertake to evict all City. 3
squatters and illegal occupants in the property within forty-
five (45) days from the execution of the contract.
Petitioner filed a petition for certiorari with the Court of
Appeals seeking the annulment of the two (2) orders.
IDP failed to fulfill this obligation. Hence INK prayed that However, on 28 October 1992 the Court of Appeals
the trial court order IDP to comply with its obligation of dismissed the petition and affirmed the orders of the trial
clearing the subject lots of illegal occupants and to pay court.
damages to INK.
Petitioner now comes to us alleging that the trial court
IDP alleged in its answer that it was INK which violated erred: (a) in ruling that it had jurisdiction over petitioner;
the contract by delaying the payment of the purchase price (b) in upholding the orders of the trial court even as they
and prayed that the contract of sale be rescinded and violated the rule prohibiting splitting of a single cause of
revoked. action and forum-shopping; (c) in holding that INK is the
owner of the property and entitled to registration of its
On 15 June 1991 INK filed a motion for partial summary ownership; and, (d) in holding that INK has a superior right
judgment on the ground that there was actually no genuine to the possession of the owner's copies of the certificates of
issue as to any material fact. title.

On 12 September 1991 the trial court rendered partial Upon prior leave, the IDP intervened alleging that prior to
judgment, and on 7 October 1991 an amended partial the issuance by the trial court of the order of 2 March 1992,
judgment granting the reliefs prayed for by INK except the its legal Board of Trustees filed a motion for intervention
prayer for damages which was to be resolved later. informing said court that the sale of the properties was not
executed by it but was made possible by a fake Board of
On 22 January 1992 INK filed a motion in the same case Trustees, hence, the sale is void. The trial court denied the
praying that petitioner Leticia Ligon, who was in motion since jurisdiction over the incident properly
possession of the certificates of title over the properties as belonged to the Securities and Exchange Commission
mortgagee of IDP, be directed to surrender the certificates (SEC). Conformably therewith, IDP brought the matter
to the Register of Deeds of Quezon City for the registration before the SEC which later declared that the sale of the
of the Absolute Deed of Sale in its name. INK alleged that properties was void. Thus, IDP banks on this favorable
the document could not be registered because of the refusal decision in similarly seeking the nullification of the
questioned orders of the trial court.
Under our land registration law, no voluntary instrument questions arising upon such applications or petitions." The
shall be registered by the Register of Deeds unless the above provision has eliminated the distinction between the
owner's duplicate certificate is presented together with such general jurisdiction vested in the regional trial court and the
instrument, except in some cases or upon order of the court limited jurisdiction conferred upon it by the former law
for cause shown. In case the person in possession of the when acting merely as a cadastral court. Aimed at avoiding
duplicate certificates refuses or fails to surrender the same multiplicity of suits the change has simplified registration
to the Register of Deeds so that a voluntary document may proceedings by conferring upon the regional trial courts the
be registered and a new certificate issued, Sec. 107, authority to act not only on applications for original
Chapter 10, of P.D. No. 1529 clearly states: registration but also over all petitions filed after original
registration of title, with power to hear and determine all
Sec. 107. Surrender of withheld questions arising upon such applications or petitions.5
duplicate certificates. — Where it is
necessary to issue a new certificate of The principal action filed by INK in Civil Case No. Q-90-
title pursuant to any involuntary 6937 before the trial court was for specific performance
instrument which divests the title of the with damages based on a document of sale. Such action
registered owner against his consent or was well within the exclusive jurisdictions of the Regional
where a voluntary instrument cannot be Trial Court.6 When IDP, the defendant in the trial court, did
registered by reason of the refusal or not question the genuineness and validity of said deed of
failure of the holder to surrender the sale and its obligations thereunder, the summary judgment
owner's duplicate certificate of title, the issued by the court granting the reliefs sought by INK was
party in interest may file a petition in also an exercise of its general jurisdiction.
court to compel surrender of the same
to the Register of Deeds. The court, Hence, when INK filed a motion for the issuance of an
after hearing, may order the registered order from the same court to compel the holder of the
owner or any person withholding the duplicate certificates of title to surrender the same to the
duplicate certificate to surrender the Register of Deeds for the registration of the deed of sale
same and direct the entry of a new subject of the principal action, the motion was a necessary
certificate or memorandum upon such incident to the main case. When the sale of the property
surrender. If the person withholding the was upheld by the court in its judgment and the defendant
duplicate certificate is not amenable to was directed to comply with its terms and conditions, the
the process of the court, or if for any right of INK to have the same registered with the Register
reason the outstanding owner's of Deeds could not be disregarded. To assert and enjoy its
duplicate certificate cannot be right, INK should be allowed to seek the aid of the court to
delivered, the court may order the direct the surrender of the certificates of title. Since
annulment of the same as well as the Regional Trial Courts are courts of general jurisdiction,
issuance of a new certificate of title in they may therefore take cognizance of this case pursuant to
lieu thereof. Such new, certificate and such jurisdiction. 7 Even while Sec. 107 of P.D. 1529
all duplicates thereof shall contain a speaks of a petition which can be filed by one who wants to
memorandum of the annulment of the compel another to surrender the certificates of title to the
outstanding duplicate. Register of Deeds, this does not preclude a party to a
pending case to include as incident therein the relief stated
Before the enactment of P.D. No. 1529 otherwise known as under Sec. 107, especially if the subject certificates of title
the Property Registration Decree, the former law, Act No. to be surrendered are intimately connected with the subject
496 otherwise known as the Land Registration Act, and all matter of the principal action.8 This principle is based on
jurisprudence interpreting the former law had established expediency and in accordance with the policy against
that summary reliefs such as an action to compel the multiplicity of suits.
surrender of owner's duplicate certificate of title to the
Register of Deeds could only be filed with and granted by The records of the case show that the subsisting mortgage
the Regional Trial Court sitting as a land registration court lien of petitioner appears in the certificates of title Nos.
if there was unanimity among the parties or there was no 26520 and 26521. Hence, the order of the trial court
adverse claim or serious objection on the part of any party directing the surrender of the certificates to the Register of
in interest, otherwise, if the case became contentious and Deeds in order that the deed of sale in favor of INK can be
controversial it should be threshed out in an ordinary action registered, cannot in any way prejudice her rights and
or in the case where the incident properly belonged.4 interests as a mortgagee of the lots. Any lien annotated on
the previous certificates of title which subsists should be
Under Sec. 2 of P.D. No. 1529, it is now provided that incorporated in or carried over to the new transfer
"Courts of First Instance (now Regional Trial Courts) shall certificates of title. This is true even in the case of a real
have exclusive jurisdiction over all applications for original estate mortgage because pursuant to Art. 2126 of the Civil
registration of titles to lands, including improvements and Code it directly and immediately subjects the property upon
interest therein and over all petitions filed after original which it is imposed, whoever the possessor may be, to the
registration of title, with power to hear and determine all 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 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
APOLONIO EGAO AND BEATRIZ Notarial Registry under Doc. No. 20;
EGAO, petitioners,  Page 4; Book V; Series of 1965.
vs.
THE HONORABLE COURT OF APPEALS (NINTH WHEREAS, the VENDEES herein is
DIVISION), SEVERO DIGNOS AND SEVERO [sic] aware of the fact that the
BONTILAO, respondents. Certificate of Title over the
abovementioned parcels of land have
Eliud J. Pailagao for petitioners. not yet been transferred in favor of
ROBERTO N. MARFORI except for
Guerrero A. Adaza for private respondents. the tax declarations but that the
VENDOR herein is in actual, physical,
continuous, uninterrupted, and adverse
possession of the above described
parcels of land free from all liens and
PADILLA, J.: encumbrances whatsoever; 1

This is a land dispute which culminated in the filing by Allegedly, upon purchase of Lot No. 662 from Roberto
private respondents Severo Dignos and Severo Bontilao of Marfori, improvements were introduced and taxes paid by
a verified complaint for Quieting of Title and/or Recovery private respondents. Sometime in June 1983, herein
of Possession and Ownership before the RTC of Manolo petitioners allegedly occupied illegally portions of the
Fortich, Bukidnon, * against petitioners Apolonio and land. 2
Beatriz Egao.
Petitioners' answer to the complaint asserted that Apolonio
Private respondents' complaint alleged that they are the Egao is the registered owner of the parcel of land known as
legitimate owners and possessors of two (2) parcels of land Lot No. 662, Pls 854 with an area of 3,451 sq. meters
situated at Lonocan, Manolo Fortich, Bukidnon, per deed evidenced by OCT No. P-3559 issued by the Register of
of absolute sale dated 21 December 1979 which, among Deeds of Bukidnon pursuant to Free Patent No. 298112
others, recited thus: dated 12 August 1965; that he (Apolonio Egao) and his
family have been in actual, physical, adverse, open and
continuous possession thereof even before the issuance to
WHEREAS, the abovementioned
him of the free patent; that the land has never been sold by
Parcels of land Lot No. 662 is covered reason of the prohibition against alienation under
by Original Certificate of Title No. P-
Commonwealth Act No. 141 (Public Land Law); and that
3559 Free Patent No. 298112 registered the instant case was the fourth in a series filed against the
in the name of APOLONIO EGAO
Egaos and is part of respondents' scheme to grab said
married to Beatriz Menosa and Lot No. parcel of land from the petitioners.
661 is covered by Original Certificate
of Title No. P-3558 Free Patent No.
303249 registered in the name of Judge Felicidario M. Batoy ruled in favor of the Egaos,
RAULITA CONEJOS married to Pedro herein petitioners (defendants in the court a quo), ordering
Conejos, all transcribed in the respondent Severo Bontilao (plaintiff in the court a quo) to
Registration Book in the Register of immediately deliver to the Egaos the owner's duplicate
Deeds for the Province of Bukidnon; copy of Original Certificate of Title No. P-3559. Said trial
judge held:
WHEREAS, Lot No. 662 has been
transferred in ownership from In the instant case, granting arguendo,
BEATRIZ MENOSA EGAO, married that defendants executed the 2
to Apolonio Egao in favor of documents in favor of Marfori (Exhs. A
ROBERTO N. MARFORI per Deed of & B) after the filing of the application
Absolute Sale executed before Tommy for free patent but before the issuance
C. Pacana, Notary Public of Cagayan of the latter, without the approval of the
de Oro City entered in his Notarial Director of Lands, upon issuance of
Registry under Doc. No. 75; Page No. Free Patent No. 29811 2 on August 12,
15; Book V Series of 1965; and Lot 1965, the said deeds of sale (Exhs. A &
No. 661 likewise has been transferred B) were ipso facto cancelled or
in ownership from RAULITA R. superseded by said free patent.
CONEJOS in favor of ROBERTO N. Moreover, it appears from the evidence
MARFORI per Deed of Absolute Sale that defendants never vacated or
executed before Tommy C. Pacana, abandoned their possession of Lot No.
Notary Public of Cagayan de Oro City, 662 as they have continuously lived on
dated June 3, 1965, entered in his said lot since 1950, a fact admitted by
 the plaintiffs themselves. And as long Original Certificate
as Original Certificate of Title No. P- of Title No. P-3559
3559 remains in the name of defendant in the name of
Apolonio Egao, married to Beatriz Apolonio Egao and
Menoza Egao, this is the ultimate and in lieu thereof,
best evidence of title granted by the another one be
government which must be honored issued in the names
and respected by the courts. In a of plaintiffs, after
nutshell, the plaintiffs miserably failed payment of the
to present or show any title to Lot No. proper fees;
662, PLS-854 which should be quieted
or freed from any cloud of doubt as 3. Ordering the
prayed for in their complaint and they defendants to
further failed to show that they are surrender peaceful
entitled to the ownership and possession of the
possession to Lot No. 662, PLS-854. 3 land to plaintiffs
and to desist from
Private respondents went to the Court of Appeals in CA- further disturbing
G.R. No. 09539. Setting aside the RTC decision, the the possession over
appellate court ** held, in part, thus- the land of
plaintiffs;
That the land is titled in the name of
defendant Apolonio Egao is not in 4. Ordering the
question. The main point in issue is defendants to pay
whether defendants could validly sell the costs.
the land to Marfori who in turn
transferred ownership thereof to the SO ORDERED. 5
plaintiff. 4
Petitioners turn to this Court for relief, assailing the
Marfori and Egao were both held by the Court of Appeals appellate court for allegedly committing grave abuse of
in pari delicto for violating the five (5) year restriction discretion amounting to lack of jurisdiction in holding that:
under Sec. 118, Commonwealth Act No. 141 as amended
by Act No. 496 against encumbrance or alienation of lands
acquired under a free patent or homestead; hence, they a. Petitioners sold
cannot, according to the appellate court, seek affirmative Lot 662 to Roberto
relief, but respondents on the other hand were declared Marfori;
innocent purchasers for value who obtained the owner's
duplicate copy of the OCT (still in the name of the Egaos) b. It was only in
from Marfori who transferred to them (respondents) 1983 when
physical possession of the property. Finally, the Court of Petitioners wrested
Appeals held: possession over the
land from private
WHEREFORE, the decision appealed respondents;
from is hereby SET ASIDE and a new
one is rendered: c. Petitioners never
denied the sales
1. Declaring the made in favor of
plaintiffs as the Marfori, in their
absolute owners of answer;
the land known as
Lot No. 662, Pls- d. Private
854 of the Land Respondents are
Registry of "innocent
Bukidnon; purchasers for
value. 6
2. Ordering the
Register of Deeds and/or for allegedly deciding questions of substance not in
of Bukidnon to accordance with law and/or applicable decisions of this
effect the Court.
cancellation of
Without giving due course to the petition, the Court Original Certificate of Title No. P-3559 over the land in
required respondents to comment. 7 After comment, the dispute was issued on 1 March 1966, a few
Court resolved to require petitioners to file a reply, which months after the execution by the Egaos of the last Deed of
they did. Respondents filed a rejoinder. Considering the Sale in favor of Marfori. 11 The OCT is registered in the
allegations, issues and arguments adduced, the Court name of the Egaos, herein petitioners.
resolved to give due course to the petition. Upon
submission by the parties of their respective memorandum, A Torrens title, once registered, cannot be defeated, even
the petition was submitted for decision. 8 by adverse open and notorious possession. A registered title
under the Torrens system cannot be defeated by
Validity of the Deeds of Sale executed between Marfori (as prescription. The title, once registered, is notice to the
purchaser) and the petitioners (as sellers) is the main issue world. All persons must take notice. No one can plead
to be resolved, in determining respondents' right over the ignorance of the registration. 12
disputed land, the respondents being the transferees of
Marfori. Contrary to the appellate court's conclusion, respondents
are not innocent purchasers for value. 13 An "innocent
It is undisputed that Free Patent No. 298112 was issued to purchaser for value" is deemed, under the Torrens system,
petitioner Apolonio Egao over Lot No. 662 on 12 August, to include an innocent lessee, mortgagee or other
1965. Sec. 118 of Commonwealth Act No. 141, as encumbrancer for value. 14 Where a purchaser neglects to
amended, prohibits the alienation or encumbrance, within a make the necessary inquiries and closes his eyes to facts
period of five (5) years from the date of issuance of the which should put a reasonable man on his guard as to the
patent, of lands acquired under free patent or homestead. possibility of the existence of a defect in his vendor's title,
Assuming, arguendo, the authenticity of the Deeds of Sale and relying on the belief that there was no defect in the title
executed by the Egaos in favor of Marfori over portions of of the vendor, purchases the property without making any
Lot No. 662 (the land in question), dated 7 May 1964, 14 further investigation, he cannot claim that he is a purchaser
January and 6 October 1965, it clearly appears that all in good faith for value. 15
deeds were executed within the prohibited period of five
(5) years. As correctly found by the appellate court- Furthermore, a private individual may not bring an action
for reversion or any action which would have the effect of
Section 124 of the Public Land Act cancelling a free patent and the corresponding certificate of
provided [sic] that any acquisition, title issued on the basis thereof, with the result that the land
conveyance, abenation, transfer or covered thereby will again form part of the public domain,
other contract made or executed as only the Solicitor General or the officer acting in his
inviolation of any of the provisions of stead may do so. 16
Sections 118,121,120,122 and 123 of
this Act shall be unlawful, null and The rule of pari delicto non oritur actio (where two persons
void from its execution and shall are equally at fault neither party may be entitled to relief
produce the effect of annulling and under the law), admits of exceptions and does not apply to
cancelling the grant, title, patent or an inexistent contract, such as, a sale void ab initiounder
permit originally issued, recognized or the Public Land Act, when its enforcement or application
confirmed, actually or prescriptively, runs counter to the public policy of preserving the grantee's
and cause the reversion of the property right to the land under the homestead law. 17
and its improvements to the state. 9
Sec. 51, par. 2 of the Property Registration Decree (PD
Petitioners deny the authenticity and due execution of the 1529), formerly Sec. 50 of the Land Registration Act (Act
notarized deeds of sale in favor of Marfori, asserting No. 496) expressly provides that the registration of the
continued ownership over the land by virtue of a Torrens Deed is the operative act that binds or affects the land
Certificate of Title issued in their name. While the Court is insofar as third persons are concerned. The law requires a
not satisfied with respondents' explanation of their failure higher degree of prudence from one who buys from a
to present the notaries public (who were residents of a person who is not the registered owner, when the land
neighboring province) to affirm their participation in the object of the transaction is registered land. While one who
preparation of the Deeds, the Court also finds as buys from the registered owner need not look behind the
insufficient the mere denials by petitioners as to due certificate of title, one who buys from another who
execution and authenticity of said Deeds of Sale. A notarial is notthe registered owner is expected to examine not only
document is evidence of the facts in clear unequivocal the certificate of title but all factual circumstances
mariner therein expressed. It has in its favor the necessary for him to determine if there are any flaws in the
presumption of regularity To contradict all these there must title of the transferor, or in his capacity to transfer the land.
be evidence that is clear, convincing and more than merely Failing to exercise caution of any kind whatsoever is
preponderant. 10 The question of authenticity being one of tantamount to bad faith.18
fact, the Court will not disturb the conclusions of the Court
of Appeals on the matter.
Deeds of sale of patented lands, perfected within the
prohibited five (5) year period are null and void (Sec. 124,
Public Land Act). No title passed from the Egaos to
Marfori which could be validly transferred to herein
respondents Bontilao and Dignos. Nemo dat quod non
habet (nobody can dispose of that which does not belong to
him).19

While the government has not taken steps to assert its title,
by reversion, to a homestead sold in violation of the Public
Land Act, the vendor or his heirs is better entitled to the
possession of the said, the vendee being in no better
situation than any intruder.20

Accordingly, respondents who are not innocent purchasers

for value have no standing to question petitioners' right to
the land and to file an action for quieting of title.

WHEREFORE, the appealed decision of the Court of

Appeals in CA G.R. CV No. 09539 is REVERSED and
SET ASIDE. Meanwhile, petitioners as registered owners
are entitled to remain in physical possession of the disputed
property. Respondents are ordered to deliver the owner's
duplicate copy of the OCT (No. P-3559) to petitioners,
without prejudice to an action for reversion of the land,
which may be instituted by the Solicitor General for the
State.

Let a copy of this decision be furnished the Solicitor

General.

SO ORDERED
FRANCISCO ALONSO, substituted by MERCEDES It is relevant to mention at this point that the current TCT
V. ALONSO, TOMAS V. ALONSO and ASUNCION V. covering Lot 727-D-2 in the name of Cebu Country Club is
ALONSO, Petitioners,  TCT No. 94905, which was entered in the land records of
vs. Cebu City on August 8, 1985.5
CEBU COUNTRY CLUB, INC., Respondent,
REPUBLIC OF THE PHILIPPINES, represented by With his discoveries, Francisco formally demanded upon
the OFFICE OF THE SOLICITOR GENERAL, Public Cebu Country Club to restore the ownership and possession
Respondent. of Lot 727-D-2 to him. However, Cebu Country Club
denied Francisco’s demand and claim of ownership, and
DECISION refused to deliver the possession to him.6

BERSAMIN, J.: On September 25, 1992, Francisco commenced against

Cebu Country Club in the RTC in Cebu City an action for
By petition for review on certiorari, the petitioners appeal the declaration of nullity and non-existence of deed/title,
the order dated December 28, 2007 of the Regional Trial the cancellation of certificates of title, and the recovery of
Court (RTC), Branch 20, in Cebu City, denying the motion property. On November 5, 1992, Cebu Country Club filed
for issuance of writ of execution of the Office of the its answer with counterclaim.7
Solicitor General (OSG) in behalf of the Government, and
the order dated April 24, 2009, denying their motion for On May 7, 1993, the RTC decided in favor of Cebu
reconsideration filed against the first order. Country Club.

Antecedents Both parties appealed to the Court of Appeals (CA), which

ultimately affirmed the RTC on March 31, 1997. Thus,
The antecedent facts are those established in Alonso v. Francisco filed a motion for reconsideration, which was
Cebu Country Club,1 which follow. denied on October 2, 1997.8

Petitioner Francisco M. Alonso (Francisco) was the only Nothing daunted, Francisco appealed to this Court (G.R.
son and sole heir of the late spouses Tomas N. Alonso and No. 130876).
Asuncion Medalle. Francisco died during the pendency of
this case, and was substituted by his legal heirs, namely: On January 31, 2002, this Court decided G.R. No. 130876,
his surviving spouse, Mercedes V. Alonso, his son Tomas decreeing:
V. Alonso (Tomas) and his daughter Asuncion V. Alonso.2
WHEREFORE, we DENY the petition for review.
In 1992, Francisco discovered documents showing that his However, we SET ASIDE the decision of the Court of
father Tomas N. Alonso had acquired Lot No. 727 of the Appeals and that of the Regional Trial Court, Cebu City,
Banilad Friar Lands Estate from the Government in or Branch 08.
about the year 1911; that the original vendee of Lot No.
727 had assigned his sales certificate to Tomas N. Alonso, IN LIEU THEREOF, we DISMISS the complaint and
who had been consequently issued Patent No. 14353; and counterclaim of the parties in Civil Cases No. CEB 12926
that on March 27, 1926, the Director of Lands had executed of the trial court. We declare that Lot No. 727 D-2 of the
a final deed of sale in favor of Tomas N. Alonso, but the Banilad Friar Lands Estate covered by Original Certificate
final deed of sale had not been registered with the Register of Title Nos. 251, 232, and 253 legally belongs to the
of Deeds because of lack of requirements, like the approval Government of the Philippines. 9
of the final deed of sale by the Secretary of Agriculture and
Natural Resources, as required by law.3
The petitioners sought a reconsideration. On December 5,
2003, however, the Court denied their motion for
Francisco subsequently found that the certificate of title reconsideration.10 Hence, the decision in G.R. No. 130876
covering Lot No. 727-D-2 of the Banilad Friar Lands Estate became final and executory.
had been "administratively reconstituted from the owner’s
duplicate" of Transfer Certificate of Title (TCT) No. RT-
1310 in the name of United Service Country Club, Inc., the In late 2004, the Government, through the OSG, filed in the
predecessor of respondent Cebu Country Club, Inc (Cebu RTC a motion for the issuance of a writ of
Country Club); and that upon the order of the court that had execution.11Cebu Country Club opposed the motion for the
heard the petition for reconstitution of the TCT, the name issuance of a writ of execution in due course.
of the registered owner in TCT No. RT-1310 had been
changed to that of Cebu Country Club; and that the TCT Later on, the proceedings on the OSG’s motion for the
stated that the reconstituted title was a transfer from TCT issuance of a writ of execution at the instance of Cebu
No. 1021.4 Country Club in deference to the on-going hearings being
conducted by the Committee on Natural Resources of the
House of Representatives on a proposed bill to confirm the The petitioners challenge the orders dated December 28,
TCTs and reconstituted titles covering the Banilad Friar 2007 and April 29, 2009, because:
Lands Estate in Cebu City.12 The Congress ultimately
enacted a law to validate the TCTs and reconstituted titles 1. R.A. No. 9443 did not improve Cebu Country
covering the Banilad Friar Lands Estate in Cebu City. This Club’s plight, inasmuch as R.A. No. 9443
was Republic Act No. 9443,13 effective on July 27, 2007. presupposed first a sales certificate that lacked
the required signature, but Cebu Country Club
Thereafter, both Cebu Country Club and the OSG brought did not have such sales certificate. Moreover, the
the passage of R.A. No. 9443 to the attention of the RTC titleholders were in fact the owners of the lands
for its consideration in resolving the OSG’s motion for the covered by their respective titles, which was not
issuance of a writ of execution.14 On December 28, 2007, true with Cebu Country Club due to its being
therefore, the RTC denied the OSG’s motion for the already adjudged with finality to be not the owner
issuance of a writ of execution through the first appealed of Lot 727-D-2. Lastly, Cebu Country Club’s title
order.15 was hopelessly defective, as found by the
Supreme Court itself;
The petitioners filed a motion for reconsideration dated
February 1, 2008, questioning the denial of the OSG’s 2. The doctrine of law of the case barred the
motion for the issuance of a writ of execution.16 application of R.A. No. 9443 to Cebu Country
Club;
Upon being directed by the RTC to comment on the
petitioners’ motion for reconsideration, the OSG 3. The RTC’s declaration that R.A. No. 9443
manifested in writing that the Government was no longer confirmed Cebu Country Club as the absolute
seeking the execution of the decision in G.R. No. 130876, owner of Lot 727-D-2 despite the prior and final
subject to its reservation to contest any other titles within judgment of the Supreme Court that Cebu
the Banilad Friar Lands Estate should clear evidence show Country Club was not the owner was
such titles as having been obtained through fraud.17 unconstitutional, because it virtually allowed the
legislative review of the Supreme Court’s
After the filing of the OSG’s comment, the RTC issued the decision rendered against Cebu Country Club;
second appealed order, denying the petitioners’ motion for
reconsideration, giving the following reasons: 4. The use of R.A. No. 9443 as a waiver on the
part of the Government vis-à-vis Cebu Country
1. The party who had a direct interest in the Club was not only misplaced but downrightly
execution of the decision and the reconsideration repugnant to Act 1120, the law governing the
of the denial of the motion for execution was the legal disposition and alienation of Friar Lands;
Government, represented only by the OSG; and
hence, the petitioners had no legal standing to file
the motion for reconsideration, especially that 5. The petitioners had the requisite standing to
they were not authorized by the OSG for that question the patent errors of the RTC, especially
purpose; in the face of the unholy conspiracy between the
OSG and Cebu Country Club, on the one hand,
2. R.A. No. 9443 "confirms and declares as and, on the other hand, the passage of R.A. No.
valid" all "existing" TCTs and reconstituted titles; 9443 and DENR Memorandum No. 16, both of
thereby, the State in effect waived and divested which in fact made their predecessor Tomas N.
itself of whatever title or ownership over the Alonso’s sales certificate and patent valid.19
Banilad Friar Lands Estate in favor of the
registered owners thereof, including Lot 727 D-2; Issues
and
The Court confronts and resolves the following issues, to
3. The situation of the parties had materially wit:
changed, rendering the enforcement of the final
and executory judgment unjust, inequitable, and 1. Whether or not the petitioners were the real
impossible, because Cebu Country Club was now parties-in-interest to question the denial by the
recognized by the State itself as the absolute RTC of the OSG’s motion for the issuance of a
owner of Lot 727 D-2.18 writ of execution;

Hence, the petitioners appeal by petition for review 2. Whether or not R.A. No. 9443 gave the
on certiorari. petitioners a legal interest to assail the RTC’s
orders; and
Contentions of the Petitioners
 3. Whether or not the petitioners can appeal by Procedure, which demands that an appeal by petition for
petition for review on certiorari in behalf of the review on certiorari be limited to questions of law.22
OSG.
The second violation concerns the omission of a sworn
Ruling certification against forum shopping from the petition for
review on certiorari. Section 4, Rule 45 of the 1997 Rules
The petition for review is denied due course. of Civil Procedure requires that the petition for review
should contain, among others, the sworn certification on the
undertakings provided in the last paragraph of Section 2,
A. Preliminary Considerations: Rule 42 of the 1997 Rules of Civil Procedure, viz:

Petitioners contravene the hierarchy of courts, and the Section 2. xxx

petition is fatally defective
The petitioner shall also submit together with the petition a
Before delving on the stated issues, the Court notes that the certification under oath that he has not theretofore
petitioners are guilty of two violations that warrant the commenced any other action involving the same issues in
immediate dismissal of the petition for review on certiorari. the Supreme Court, the Court of Appeals or different
divisions thereof, or any other tribunal or agency; if there is
The first refers to the petitioners’ breach of the hierarchy of such other action or proceeding, he must state the status of
courts by coming directly to the Court to appeal the the same; and if he should thereafter learn that a similar
assailed issuances of the RTC via petition for review on action or proceeding has been filed or is pending before the
certiorari. They should not have done so, bypassing a Supreme Court, the Court of Appeals, or different divisions
review by the Court of Appeals (CA), because the thereof, or any other tribunal or agency, he undertakes to
hierarchy of courts is essential to the efficient functioning promptly inform the aforesaid courts and other tribunal or
of the courts and to the orderly administration of justice. agency thereof within five (5) days therefrom. (n)
Their non-observance of the hierarchy of courts has
forthwith enlarged the docket of the Court by one more Only petitioner Tomas V. Alonso has executed and signed
case, which, though it may not seem burdensome to the the sworn certification against forum shopping attached to
layman, is one case too much to the Court, which has to the petition. Although neither of his co-petitioners –
devote time and effort in poring over the papers submitted Mercedes V. Alonso and Asuncion V. Alonso – has joined
herein, only to discover in the end that a review should the certification, Tomas did not present any written express
have first been made by the CA. The time and effort could authorization in his favor authorizing him to sign the
have been dedicated to other cases of importance and certification in their behalf. The signing of the certification
impact on the lives and rights of others. by only one of the petitioners could not be presumed to
reflect the personal knowledge by his co-petitioners of the
The hierarchy of courts is not to be lightly regarded by filing or non-filing of any similar action or claim.23 Hence,
litigants. The CA stands between the RTC and the Court, the failure of Mercedes and Asuncion to sign and execute
and its establishment has been precisely to take over much the certification along with Tomas warranted the dismissal
of the work that used to be done by the Court. Historically, of their petition.24
the CA has been of the greatest help to the Court in
synthesizing the facts, issues, and rulings in an orderly and B. Petitioners are not proper parties to appeal and
intelligible manner and in identifying errors that ordinarily assail the order of the RTC
might escape detection. The Court has thus been freed to
better discharge its constitutional duties and perform its
most important work, which, in the words of Dean Vicente The petitioners are relentless in insisting that their claim to
G. Sinco,20 "is less concerned with the decision of cases Lot No. 727-D-2 of the Banilad Friar Lands Estate should
that begin and end with the transient rights and obligations be preferred to that of Cebu Country Club, despite the final
of particular individuals but is more intertwined with the judgment in G.R. No. 130876 being adverse to their claim.
direction of national policies, momentous economic and Their insistence raises the need to resolve once and for all
social problems, the delimitation of governmental authority whether or not the petitioners retained any legal right to
and its impact upon fundamental rights."21 assert over Lot No. 727-D-2 following the Government’s
manifest desistance from the execution of the judgment in
G.R. No. 130876 against Cebu Country Club.
The need to elevate the matter first to the CA is also
underscored by the reality that determining whether the
petitioners were real parties in interest entitled to bring this The above-noted defects of the petition for review
appeal against the denial by the RTC of the OSG’s motion notwithstanding, therefore, the Court has now to address
for the issuance of a writ of execution was a mixed question and resolve the stated issues on the sole basis of the results
of fact and law. As such, the CA was in the better position the Court earlier reached in G.R. No. 130876. In this
to review and to determine. In that regard, the petitioners regard, whether or not the petitioners are the proper parties
violate Section 1, Rule 45 of the 1997 Rules of Civil to bring this appeal is decisive.
After careful consideration, the Court finds that the cause Only recently, in Jesus P. Liao v. Court of Appeals, the
of the petitioners instantly fails. Court has ruled categorically that approval by the
Secretary of Agriculture and Commerce of the sale of
In G.R. No. 130876, the Court found that the petitioners did friar lands is indispensable for its validity, hence, the
not validly acquire ownership of Lot No. 727-D-2, and absence of such approval made the sale null and void ab-
declared that Lot No. 727 D-2 legally belonged to the initio. Necessarily, there can be no valid titles issued on the
Government, thus: basis of such sale or assignment. Consequently, petitioner
Francisco’s father did not have any registerable title to
the land in question. Having none, he could not transmit
The second issue is whether the Court of Appeals erred in anything to his sole heir, petitioner Francisco Alonso or
ruling that the Cebu Country Club, Inc. is owner of Lot No. the latter’s heirs.
727.
In a vain attempt at showing that he had succeeded to the
Admittedly, neither petitioners nor their predecessor estate of his father, on May 4, 1991, petitioner Francisco
had any title to the land in question. The most that Alonso executed an affidavit adjudicating the entire estate
petitioners could claim was that the Director of Lands to himself (Exh. "Q"), duly published in a newspaper of
issued a sales patent in the name of Tomas N. Alonso. The general circulation in the province and city of Cebu (Exh.
sales patent, however, and even the corresponding deed "Q-1"). Such affidavit of self-adjudication is inoperative, if
of sale were not registered with the Register of Deeds not void, not only because there was nothing to adjudicate,
and no title was ever issued in the name of the latter. but equally important because petitioner Francisco did not
This is because there were basic requirements not complied show proof of payment of the estate tax and submit a
with, the most important of which was that the deed of sale certificate of clearance from the Commissioner of Internal
executed by the Director of Lands was not approved by Revenue. Obviously, petitioner Francisco has not paid the
the Secretary of Agriculture and Natural estate taxes.
Resources. Hence, the deed of sale was void. "Approval
by the Secretary of Agriculture and Commerce is
indispensable for the validity of the sale." Moreover, Cebu Consequently, we rule that neither Tomas N. Alonso
Country Club, Inc. was in possession of the land since nor his son Francisco M. Alonso or the latter’s heirs are
1931, and had been paying the real estate taxes thereon the lawful owners of Lot No. 727 in dispute. xxx.25
based on tax declarations in its name with the title number
indicated thereon. Tax receipts and declarations of The pronouncement in G.R. No. 130876 renders beyond
ownership for taxation purposes are strong evidence of dispute that the non-execution of the judgment would not
ownership. This Court has ruled that although tax adversely affect the petitioners, who now hold no right
declarations or realty tax payments are not conclusive whatsoever in Lot No. 727-D-2. Otherwise put, they are not
evidence of ownership, nevertheless, they are the proper parties to assail the questioned orders of the
good indicia of possession in the concept of owner for no RTC, because they stand to derive nothing from the
one in his right mind will be paying taxes for a property execution of the judgment against Cebu Country Club.
that is not in his actual or constructive possession.
Every action must be prosecuted or defended in the name
Notwithstanding this fatal defect, the Court of Appeals of the real party in interest, unless otherwise authorized by
ruled that "there was substantial compliance with the law or the rules.26 A real party in interest is one who stands
requirement of Act No. 1120 to validly convey title to said to be benefited or injured by the judgment in the suit, or the
lot to Tomas N. Alonso." party entitled to the avails of the suit.27 "Interest" within the
meaning of the rule means material interest, an interest in
On this point, the Court of Appeals erred. issue and to be affected by the decree, as distinguished
from mere interest in the question involved, or a mere
incidental interest. The rule refers to a real or present
Under Act No. 1120, which governs the administration and substantial interest, as distinguished from a mere
disposition of friar lands, the purchase by an actual and expectancy; or from a future, contingent, subordinate, or
bona fide settler or occupant of any portion of friar land consequential interest.28 One having no right or interest to
shall be "agreed upon between the purchaser and the protect cannot invoke the jurisdiction of the court as a
Director of Lands, subject to the approval of the Secretary party-plaintiff in an action.29
of Agriculture and Natural Resources (mutatis mutandis)."
Thus, an appeal, like this one, is an action to be prosecuted
In his Memorandum filed on May 25, 2001, the Solicitor by a party in interest before a higher court. In order for the
General submitted to this Court certified copies of Sale appeal to prosper, the litigant must of necessity continue to
Certificate No. 734, in favor of Leoncio Alburo, and hold a real or present substantial interest that entitles him to
Assignment of Sale Certificate No. 734, in favor of Tomas the avails of the suit on appeal. If he does not, the appeal,
N. Alonso. Conspicuously, both instruments do not bear the as to him, is an exercise in futility. So it is with the
signature of the Director of Lands and the Secretary of the petitioners!
Interior. They also do not bear the approval of the Secretary
of Agriculture and Natural Resources.
In contrast, the Government, being the legal owner of Lot Title or Reconstituted Certificate of Title respecting Lot
No. 727-D-2, is the only party adversely affected by the 727-D-2 or any portion thereof.1awph!1
denial, and is the proper party entitled to assail the
denial.30 However, its manifest desistance from the The appropriate recourse for the petitioners, if they persist
execution of the decision effectively barred any challenge in the belief that the TCT of Cebu Country Club should be
against the denial, for its non-appeal rendered the denial nullified, is to compel the OSG through the special civil
final and immutable. action for mandamus to commence the action to annul on
the ground that Cebu Country Club had obtained its title to
C. R.A. No. 9443 gives petitioners no legal interest to Lot 7217-D-2 through fraud. Yet, that recourse is no longer
assail the denial of the motion for execution availing, for the decision in G.R. No. 130876 explicitly
found and declared that the reconstituted title of Cebu
Section 1 of R.A. No. 9443 provides: Country Club had not been obtained through fraud. Said the
Court:
Section 1. All existing Transfer Certificates of Title and
Reconstituted Certificates of Title duly issued by the On the question that TCT No. RT-1310 (T-11351) bears the
Register of Deeds of Cebu Province and/or Cebu City same number as another title to another land, we agree
covering any portion of the Banilad Friar Lands Estate, with the Court of Appeals that there is nothing
notwithstanding the lack of signatures and/or approval of fraudulent with the fact that Cebu Country Club, Inc.’s
the then Secretary of Interior (later Secretary of Agriculture reconstituted title bears the same number as the title of
and Natural Resources) and/or the then Chief of the Bureau another parcel of land. This came about because under
of Public Lands (later Director of Public Lands) in the General Land Registration Office (GLRO) Circular No. 17,
copies of the duly executed Sale Certificates and dated February 19, 1947, and Republic Act No. 26 and
Assignments of Sale Certificates, as the case may be, now Circular No. 6, RD 3, dated August 5, 1946, which were in
on file with the Community Environment and Natural force at the time the title was reconstituted on July 26,
Resources Office (CENRO), Cebu City, are hereby 1948, the titles issued before the inauguration of the
declared as valid titles and the registered owners Philippine Republic were numbered consecutively and the
recognized as absolute owners thereof. titles issued after the inauguration were numbered also
consecutively starting with No. 1, so that eventually, the
titles issued before the inauguration were duplicated by
The law expressly declares as valid "(a)ll existing Transfer titles issued after the inauguration of the Philippine
Certificates of Title and Reconstituted Certificates of Title Republic. xxx.
duly issued by the Register of Deeds of Cebu Province
and/or Cebu City covering any portion of the Banilad Friar
Lands Estate," and recognizes the registered owners as xxx
absolute owners. To benefit from R.A. No. 9443, therefore,
a person must hold as a condition precedent a duly issued Petitioners next argue that the reconstituted title of
Transfer Certificate of Title or a Reconstituted Certificate Cebu Country Club, Inc. had no lawful source to speak
of Title. of; it was reconstituted through extrinsic and intrinsic
fraud in the absence of a deed of conveyance in its
Although Lot 727-D-2 was earlier declared to be owned by favor. In truth, however, reconstitution was based on the
the Government in G.R. No. 130876, R.A. No. 9443 later owner’s duplicate of the title, hence, there was no need
validated Cebu Country Club’s registered ownership due to for the covering deed of sale or other modes of
its holding of TCT No. RT-1310 (T-11351) in its own conveyance. Cebu Country Club, Inc. was admittedly in
name. As the OSG explained in its manifestation in lieu of possession of the land since long before the Second
comment31 (filed in the RTC vis-à-vis the petitioners’ World War, or since 1931. In fact, the original title
motion for reconsideration against the RTC’s denial of the (TCT No. 11351) was issued to the United Service
OSG’s motion for issuance of a writ of execution), the Country Club, Inc. on November 19, 1931 as a transfer
enactment of R.A. No. 9443 had "mooted the final and from Transfer Certificate of Title No. 1021. More
executory Decision of the Supreme Court in "Alonso v. importantly, Cebu Country Club, Inc. paid the realty
Cebu Country Club, Inc.," docketed as G.R. No. 130876, taxes on the land even before the war, and tax
which declared the Government as the owner of Lot 727-D- declarations covering the property showed the number
2 based on the absence of signature and approval of the of the TCT of the land. Cebu Country Club, Inc.
then Secretary of Interior;" and that the decision in G.R. produced receipts showing real estate tax payments
No. 130876 had "ceased to have any practical effect" as the since 1949. On the other hand, petitioner failed to produce
result of the enactment of R.A. No. 9443, and had thereby a single receipt of real estate tax payment ever made by his
become "academic."32 father since the sales patent was issued to his father on
March 24, 1926. Worse, admittedly petitioner could not
show any [T]orrens title ever issued to Tomas N. Alonso,
On the other hand, the petitioners could not benefit from because, as said, the deed of sale executed on March 27,
R.A. No. 9443 because of their non-compliance with the 1926 by the Director of Lands was not approved by the
express condition of holding any Transfer Certificate of Secretary of Agriculture and Natural Resources and could
not be registered. "Under the law, it is the act of registration
of the deed of conveyance that serves as the operative act to
convey the land registered under the Torrens system. The
act of registration creates constructive notice to the whole
world of the fact of such conveyance." On this
point, petitioner alleges that Cebu Country Club, Inc.
obtained its title by fraud in connivance with personnel
of the Register of Deeds in 1941 or in 1948, when the
title was administratively reconstituted. Imputations of
fraud must be proved by clear and convincing evidence.
Petitioner failed to adduce evidence of fraud. In an
action for re-conveyance based on fraud, he who charges
fraud must prove such fraud in obtaining a title. "In this
jurisdiction, fraud is never presumed." The strongest
suspicion cannot sway judgment or overcome the
presumption of regularity. "The sea of suspicion has no
shore, and the court that embarks upon it is without rudder
or compass." Worse, the imputation of fraud was so
tardily brought, some forty-four (44) years or sixty-one
(61) years after its supposed occurrence, that is, from the
administrative reconstitution of title on July 26, 1948, or
from the issuance of the original title on November 19,
1931, that verification is rendered extremely difficult, if
not impossible, especially due to the supervening event
of the second world war during which practically all
public records were lost or destroyed, or no longer
available.33

IN VIEW OF THE FOREGOING, the petition for review

on certiorari is denied for lack of merit.

The Court declares that Cebu Country Club, Inc. is the

exclusive owner of Lot No.727-D-2 of the Banilad Friar
Lands Estate, as confirmed by Republic Act No. 9443.

Costs of suit to be paid by the petitioners.

SO ORDERED
 against Pagarigan, Menardo Metran and Rene Galope to
BEVERLY ANNE C. YAP, Petitioner  enjoin them from demolishing the former's houses pending
vs the determination of the Department of Environment and
REPUBLIC OF THE PHILIPPINES, represented by Natural Resources (DENR) on the propriety of cancelling
THE REGIONAL EXECUTIVE DIRECTOR, the title obtained by Pagarigan.13
DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES (DENR), Respondent The administrative protest of the protestants reached the
Office of the Secretary of the DENR. On May 15, 1995,
DECISION Secretary Angel C. Alcala rendered a Decision14 against
Pagarigan, the salient portion and the fallo of which read as
REYES, J.: follows:

This is a petition for review on certiorari1 seeking to annul From the Investigation Reports submitted by both the
and set aside the Decision2 dated June 30, 2011 and, Department's Regional Office involved and this Office as
Resolution3 dated November 14, 2011 of the Court of well as from the other pieces of evidence available, both
Appeals (CA) in CA-G.R. CV No. 01753-MIN which documentary and testimonial, it is obvious that actual fraud
reversed and set aside the Decision4 dated October 24, 2008 and bad faith have been committed by [Pagarigan] in his
of the Regional Trial Court (RTC) of Davao City, Branch subject public land application which led to the issuance of
16, in Civil Case No. 29,705-03, dismissing the complaint the title. The following facts and circumstances are
for reversion of a parcel of land. uncontroverted, to wit; that the [protestants] have been in
actual occupation of the land in dispute since 1945 and
have introduced improvements thereon; that [Pagarigan]
Antecedent Facts never occupied the same nor his predecessor-in-interest,
Consuelo dela Cruz, that [Pagarigan] misrepresented in his
Consuelo Vda. de dela Cruz applied for free patent over a application that he was the actual occupant and that there
parcel of land constituting about 1,292 square meters, were no others who occupied the lot in dispute; that the title
designated as Lot No. 9087, Cad. 102, located in Daliao, was issued sans an actual ground survey; and that
Toril, Davao City. As she could not wait for the approval of [Pagarigan] did not post a copy of his Notice for [FPA] on
her application, she executed a Deed of both the Bulletin Boards of Daliao and Lizardo as required
Waiver/Quitclaim5 on November 25, 1981 in favor of by law.
Rollie Pagarigan (Pagarigan).6
xxxx
Pagarigan filed his own Free Patent Application (FPA)7 and
subsequently, Free Patent No. (XI-1)5133 was issued to WHEREFORE, the instant appeal is hereby given DUE
him over said lot. Original Certificate of Title (OCT) No. COURSE and the subject Decision appealed from SET
P-111828 was thereby issued in his name on November 25, ASIDE and REVOKED. Consequently, the Regional
1982.9 Executive Director (RED), DENR Region XI, Davao City,
is hereby ordered to institute an action for cancellation of
On September 5, 1989, Pagarigan mortgaged the lot to Original Certificate of Title (OCT) No. V-11182 of the
Banco Davao-Davao City Development Bank (the Bank). Registry of Deeds of Davao City covering Lot No. 9087,
For failure to pay his loan, the property was foreclosed, and Cad-102, and for the reversion of the property covered
was eventually sold to the Bank at public auction on thereby to the government.
October 26, 1990. These proceedings were duly annotated
in the title.10 After the cancellation of the subject title and the land
already reverted to the government, Regional. Executive.
However, the land covered by OCT No. P-11182 was Director (RED) concerned shall then order the ground
allegedly occupied by Teodoro Valparaiso and Pedro survey of the land in dispute and give due course to the
Malalis (protestants). On October 24, 1990, the protestants public land applications of the [protestants].
filed a formal protest with the Bureau of Lands (Bureau).
They prayed for the recall of the free patent issued to so ORDERED.15
Pagarigan, and for the institution of a corresponding action
for reversion considering that they have been in adverse,
exclusive, and continuous occupation of the subject Meanwhile, on November 5, 1992, without consolidating
property since 1945, cultivating it, and planting various title over the land in its name, the Bank sold the subject
crops, nipa palms and coconut trees on said land.11 property to herein petitioner Beverly Anne C. Yap (Yap)
and Rosanna F. Villamor (Villamor). Upon the execution of
the deed of sale, OCT No. P-11182 was delivered to them
On January 2 7, 1992, the protestants caused the annotation and Transfer Certificate of Title No. 36698316 was
of a notice of lis pendens in OCT No. P-11182. Assigned eventually issued in the name ofYap and Villamor on
as Entry No. 647677, said notice of lis pendens pertained to December 16, 2003.17
Civil Case No. 20-435-912 instituted by the protestants
On February 28, 1997, the Department of Transportation IN VIEW of the foregoing, judgment 1s hereby rendered
and Communication filed a complaint for expropriation of a dismissing the instant complaint.
portion of the subject lot before the RTC of Davao City,
Branch 13, docketed as Civil Case No. 25,084-97.18 Defendants' [sic] [Bank] and Pagarigan compulsory
counterclaim[ s] are likewise dismissed in the absence of
On February 19, 2003, the RTC Branch 13 rendered its proof that there was malice or bad faith on [the
Decision.19 Confronted with the issue of who among the respondent's] part when it sought the reversion of the
claimants shall be entitled to just compensation, the trial property.
court ruled in this wise:
The dismissal of the action necessarily carries with it the
WHEREFORE, it is the judgment of this court that[:] dismissal of defendant's [sic] [Bank] cross-claim against
[Pagarigan].
1. The plaintiff is entitled to expropriate the land subject of
this case for the purpose of road right of way to the Davao SO ORD[E]RED.23
Fish Port, which is for public use;
Ruling of the CA
2. The just compensation for the land is ₱278,[000].00;
The respondent elevated its case to the CA. On June 30,
3. [Villamor and Yap] are the ones entitled to the payment 2011 , the CA rendered the assailed Decision24 reversing
of just compensation for the property subject of this case, that of the trial court. In so ruling, the CA adopted the
and plaintiff is directed to pay the said amount to the said findings of the DENR as to the commission of fraud by
defendants; Pagarigan in his FPA, and held that neither the Bank nor
Yap and Villamor were innocent purchasers for value.
4. The Commissioner's Fee of ₱3,850.00 shall be paid by Further, the CA maintained that the decision of the RTC
plaintiff to Asian Appraisal Company, Inc., and may be Branch 13 did not constitute res judicata insofar as the
deducted from the just compensation for the land being same has not yet attained finality. The fallo of the CA
expropriated. decision reads:

This case is now considered closed. WHEREFORE, We GRANT the appeal and REVERSE
the decision of the [RTC]. We declare Free Patent No. (XI-
1)5133 and [OCT] No. P-11182 issued in the name of
SO ORDERED.20 [Pagarigan], and [TCT] No. T-366983 in the name of [Yap]
and [Villamar], and all subsequent [TCTs] derived
Ruling of the RTC therefrom, as null and void. We order the reversion of Lot
9087, Cad. 102, [l]ocated in Daliao, ToriI, Davao City, to
On May 22, 2003, the respondent, through the Office of the the mass of public domain.
Solicitor General (OSG), filed the Complaint for
Cancellation of Patent, Nullification of Title and Reversion SO ORDERED.25
with the RTC of Davao City.21 The case was raffled to
Branch 16 thereof. The Bank,26 Yap,27 and Villamor28 sought reconsideration
of the CA decision, but their motion was evenly denied in
On October 24, 2008, the RTC Branch 16 rendered a the Resolution29 dated November 14, 2011.
Decision22 dismissing the respondent's complaint. The court
ruled that since the subject land has already been sold to Hence this petition filed solely by Yap.
third persons, it must be shown that the latter were part of
the fraud and/or misrepresentation committed by the
original grantee, or at least were aware of it. However, Yap propounds the following assignments of errors:
since the RTC Branch 13 already declared in its decision in
Civil Case No. 25,084-97 that Yap and Villamor were I. Whether or not the decision of the CA is not in accord
purchasers in good faith and for value of the land in with the applicable decision enunciated by the Court in the
question, RTC Branch 16 maintained that, as a court of co- case of Spouses Macadangdang v. Spouses Martinez;30
equal jurisdiction, it is bound by the said finding under the
principle of conclusiveness of judgment. Moreover, the fact II. Whether or not the CA departed from the rule declared
that it took the respondent 26 years, from the issuance of by the Court in the case of Saad Agro-Industries, Inc. v.
the free patent before it instituted an action for reversion, Republic of the Philippines,31 that in reversion proceedings
militates against its cause. Thefallo of the trial court's the same must be proved by clear and convincing evidence,
decision reads: mere preponderance of evidence not even being adequate;
and
III. Whether or not the decision of the CA runs counter to of action, while the judgment remains unreversed by proper
the rule on res judicata.321âwphi1 authority. It has been held that in order that a judgment in
one action can be conclusive as to a particular matter in
Yap asserts that she and Villamor purchased the subject another action between the same parties or their privies, it
property in good faith and for value. She maintains that on is essential that the issue be identical. If a particular point
its face, nothing appears in OCT No. P-11182 indicating or question is in issue in the second action, and the
that some other person has a right to, or interest over the judgment will depend on the determination of that
property covered thereby. As such, there was no obligation particular point or question, a former judgment between the
on their part to look beyond the certificate of title to same parties or their privies will be final and conclusive in
determine the legal condition of the concerned property. the second if that same point or question was in issue and
adjudicated in the first suit x x x. Identity of cause of action
is not required but merely identity of issue.
Granting that a notice of lis pendens was annotated in OCT
No. P- 11182 filed before the Register of Deeds of Davao
City, the same, however, was not offered in evidence and Justice Feliciano, in Smith Bell & Company (Phils.), Inc. v.
should not have been considered. Accordingly, the Court of Appeals x x x, reiterated Lopez v. Reyes x x x in
presumption that Yap and Villamor were purchasers in regard to the distinction between bar by former judgment
good faith and for value was not effectively rebutted. which bars the prosecution of a second action upon the
same claim, demand, or cause of action, and conclusiveness
of judgment which bars the relitigation of particular facts or
Moreover, in the case for expropriation heard before the issues in another litigation between the same parties on a
RTC Branch 13, they were already adjudged as innocent different claim or cause of action.
purchasers for value. Under the principle of res judicata, it
was but proper for RTC Branch 16 to uphold said
pronouncement. Accordingly, it was an error on the part of The general rule precluding the re-litigation of material
the CA to reverse the same. facts or questions which were in issue and adjudicated in
former action are commonly applied to all matters
essentially connected with the subject matter of the
Invoking the Court's ruling in Saad Agro-Jndustries,33 Yap litigation. Thus, it extends to questions necessarily implied
asserts that the respondent failed to discharge the burden of in the final judgment, although no specific finding may
proving the alleged fraud and misrepresentation which have been made in reference thereto and although such
attended Pagarigan's FPA. matters were directly referred to in the pleadings and were
not actually or formally presented. Under this rule, if the
Ruling of the Court record of the former trial shows that the judgment could not
have been rendered without deciding the particular matter,
Yap's contentions are untenable. The decision of the CA it will be considered as having settled that matter as to all
does not run counter to the rule on conclusiveness of future actions between the parties and if a judgment
judgment. necessarily presupposes certain premises, they are as
conclusive as the judgment itself.34 (Emphasis and
underlining ours, and emphasis in the original deleted)
Yap asserts that the CA erred in setting aside the decision
of RTC Branch 16 in violation of the rule on res
judicata. It was a finding already made by the RTC Branch In Nabus v. CA,35 the Court stressed that when a party
13, a co-equal branch that the land is now in the hands of seeks relief upon a cause of action different from the one
innocent purchasers for value. Thus, the respondent's asserted by him in a previous one, the judgment in the
complaint for reversion must be dismissed on the basis of former suit is conclusive only as to such points or
the principle of conclusiveness of judgment. questions as were actually in issue or adjudicated
therein.36 However, in Calalang v. Register of Deeds of
Quezon City,37 the Court clarified that the bar on re-
The Court does not agree. litigation of a matter or question extends to those
questions necessarily implied in the final judgment,
In a catena of cases, the Court discussed the doctrine of although no specific finding may have been made in
conclusiveness of judgment, as a concept of res judicata as reference thereto, and although those matters were directly
follows: referred to in the pleadings and were not actually or
formally presented.38 "If the record of the former trial
shows that the judgment could not have been rendered
The second concept - conclusiveness of judgment - states
without deciding a particular matter, it will be
that a fact or question which was in issue in a former suit
considered as having settled that matter as to all future
and was there judicially passed upon and determined by a
actions between the parties."39 Verily, as developed, these
court of competent jurisdiction, is conclusively settled by
principles now embody paragraph (c) of Section 47, Rule
the judgment therein as far as the parties to that action and
39 of the Rules of Court, which reads:
persons in privity with them are concerned and cannot be
again litigated in any future action between such parties or
their privies, in the same court or any other court of (c) In any other litigation between the same parties or their
concurrent jurisdiction on either the same or different cause successors in interest, that only is deemed to have been
adjudged in a former judgment or final order which appears As correctly stated by defendants Yap and Villamar in their
upon its face to have been so adjudged, or which was Memorandum, a Torrens title cannot be collaterally
actually and necessarily included therein or necessary attacked. The title must be attacked directly in a case filed
thereto. in court specifically to annul the said title. The alleged
fraud in the issuance of OCT No. P-11182 therefore cannot
Guided by the foregoing, the Court finds that RTC Branch be raised in this case, and the court will not consider the
16 falsely appreciated the decision of RTC Branch 13. The decision of the DENR Secretary to say that the title of
Court quotes the pertinent portions of the Decision dated [Pagarigan] is void, and that the [protestants] are the
February 19, 2003 of the RTC Branch 13: owners of the land subject of this case.

THE COURT'S RULING: Moreover, a Torrens title has the presumption of having
been validly issued, and the defendants Yap and Villamor
are not expected to look beyond the title to determine its
CLAIMS OF [THE PROTESTANTS]: validity. They are purchasers in good faith and for value,
and are therefore entitled to the protection of the court.
[The protestants] claim that the decision of the Secretary of
the DENR in effect conferred ownership of the land to Contrary to the allegation of [the protestants], there was in
them, so that they should be paid the compensation and not fact a valid delivery of the land to defendants Yap and
defendants Yap and Villamar. In fact, defendant Malalis Villamor. The execution of a Deed of Sale in their favor by
had declared the property for taxation purposes, and had defendant [Bank], and delivery to them of the owner's copy
paid the taxes thereon from the time they had occupied the of OCT No. P-11182 is a constructive delivery of the
land. property sold to them.

[The protestants] alleged that the land subject of this case is Although defendants Yap and Villamar had not taken
still in the name of [Pagarigan], and OCT No. P-11182 has actual physical possession of the property covered by OCT
not yet been cancelled and transferred in the names of No. P-11182, the same did not divest them of the
defendants Yap and Villamar, who never even set foot on ownership of the land covered by the said title. The
the land, nor declared the land for taxation purposes. The occupation and possession of [the protestants] of the land in
alleged sale of [the Bank] of the land to Yap and Villamor question did not ripen into ownership because their
did not confer ownership of the land to them, because the occupation (even in the concept of an owner) cannot defeat
land had not been delivered to them by the owner, and they a Torrens title. OCT No. P-11182 is presumed to be valid
have not exercised ownership over the same. In short their until declared void by the courts.40
claim of ownership is based on a technicality, and no
amount of technicality may serve as a solid foundation for
the enjoyment of the fruits of fraud, [the protestants] The foregoing shows that the question of whether or not
alleged. Yap and Villamar are innocent purchasers was not an
actual issue of fact in the case before the RTC Branch 13,
and which called for said court's adjudication. "An issue of
CLAIMS OF DEFENDANTS YAP AND VILLAMOR: fact is a point supported by one party's evidence and
controverted by another's."41 That Yap and Villamor were
Defendants Yap and Villamar for their part, dispute the buyers in good faith is merely an allegation which was not
claim of [the protestants]. They alleged that they were proven in court. The RTC Branch 13 did not actually make
buyers in good faith of the property, and in fact, the owner's any clear pronouncement on the matter.
copy of OCT No. P-11182 has been delivered to them by
[the Bank]. They alleged that the title which was issued to The expropriation proceeding was filed on February 28,
[Pagarigan] cannot be attacked collaterally as in this case. 1997. The protestants caused the annotation of a notice
There should be a case filed in court to annul the title if of lis pendens on the original copy of OCT No. P-11182 on
indeed the same was fraudulently issued. For as long as the January 27, 1992. Accordingly, if indeed the question on
title is not yet declared null and void, the same remains whether Yap and Villamar are buyers in good faith was an
valid, and whoever succeeds to the same is the owner of the actual issue of fact before the expropriation proc;eeding,
land, they alleged. Moreover, since they are purchasers in the protestants could have easily controverted such claim
good faith, and for value, they have a right to be protected, by the mere expedience of presenting a certified original
defendants Yap and Villamar alleged. copy of OCT No. P-11182. Forsooth, the notice at the back
of a Torrens title serves as notice to the whole world of the
THE COURT'S RULING: pending controversy over the land so registered.42

The Decision of the Secretary of the DENR, in the case The RTC Branch 13 basically anchored its judgment on the
cited by [the protestants] cannot justify the court to declare indefeasibility of a Torrens title. Pursuant to the well-
that the title issued to [Pagarigan] is void, and that [the settled rule that a certificate of title cannot be subject to
protestants] are the owners of the property in question. collateral attack and can only be altered, modified, or
cancelled in a direct proceeding in accordance with law,43 it
was clear that the trial court was without jurisdiction in an prosper, it is not enough to prove that the original grantee
expropriation proceeding, to rule whether the title issued to of a patent has obtained the same through fraud; it must
Pagarigan is void - notwithstanding the decision of the also be proven that the subject property has not yet been
DENR Secretary. Thereupon, since the position of the acquired by an innocent purchaser for value, because
protestants rests mainly on the validity of Pagarigan's title fraudulent acquisition cannot affect the titles of the latter.
which cannot be considered in the action, RTC Branch 13,
in effect, posited that there was no legal way for it to rule Henceforth, the ultimate resolution of this case boils down
otherwise. to the determination on whether the subsequent
conveyances of the subject lot from Pagarigan were made
Accordingly, and as similarly advanced by the OSG in its to innocent purchasers for value. Specifically, based on the
Comment, the RTC Branch 13's pronouncement that Yap records, can we regard the Bank, and thereafter, Yap and
and Villamor were buyers in good faith was, at best, a Villamor as innocent purchasers for value?
mere obiter dictum. Contrary to Yap's claim, there was
nothing final or conclusive with the decision of the RTC The Court answers in the negative.
Branch 13 which the CA should be bound.
Verily, the Court is in full accord with the following
Neither the Bank, nor Yap and Villamor were purchasers in disquisitions of the CA on the matter, thus:
good faith and for value. Reversion of subject lot is in
order.
It cannot be overemphasized that [the Bank], being in the
business of extending loans secured by real estate
"[F]actual findings of administrative or quasi-judicial mortgage, is familiar with rules on land registration. As
bodies, which are deemed to have acquired expertise in such, it was, as here, expected to exercise more care and
matters within their respective jurisdictions, are generally prudence than private individuals in its dealings with
accorded not only respect but even finality, and bind the registered lands. Accordingly, given inter alia the
Court when supported by substantial evidence."44 suspicion-provoking presence of occupants other than the
owner on the land to be mortgaged, it behooved them to
The fact that Pagarigan fraudulently secured his free patent conduct a more exhaustive investigation on the history of
was duly established by the investigation conducted by the the mortgagor's title. That appellee Bank accepted in
DENR through Senior mortgage the property in question notwithstanding the
existence of structures on the property and which were in
Special Investigator Domingo Mendez. The decision of the actual, visible, and public possession of persons other than
DENR is very clear in this regard, thus: the mortgagor, constitutes gross negligence amounting to
bad faith.46(Citation omitted)
From the Investigation Reports submitted by both the
Department's Regional Office involved and this Office as Yap and Villamor are not innocent purchasers for
well as from the other pieces of evidence available, both value.
documentary and testimonial, it is obvious that actual fraud
and bad faith have been committed by [Pagarigan] in his As pointed out by the CA, the respondent argued that at the
subject public land application which led to the issuance of time Yap and Villamar purchased the said lot from the
the title. The following facts and circumstances are Bank, a notice of lis pendens was already annotated on
uncontroverted, to wit; that the [protestants] have been in OCT No. P-11182; hence, they cannot be considered as
actual occupation of the land in di spute since 1945 and innocent purchasers for value. Yap and Villamor, on the
have introduced improvements thereon; that [Pagarigan] other hand, contended that the owner's duplicate copy they
never occupied the same nor his predecessor-in-interest, received from the Bank did not contain any annotations of
Consuelo de la Cruz; that [Pagarigan] misrepresented in his encumbrance or liens; hence, they cannot be bound by such
application that he was the actual occupant and that there annotation.47
were no others who occupied the lot in dispute; that the title
was issued sans an actual ground survey; and that In the present petition, Yap maintains that the presumption
[Pagarigan] did not post a copy of his Notice for [FPA] on that she and Villamor are buyers in good faith and for value
both the Bulletin Boards of Daliao and Lizardo as required has not been rebutted. She adds that even if it is assumed,
by law.45 (Emphasis ours) for the sake of argument, that their predecessor-in-interest
committed fraud and misrepresentation, their title as
Thus, the DENR ordered for the institution of the present innocent purchasers and for value will not in any way be
action seeking the cancellation of the certificate of title affected.48
issued in the name of Pagarigan, and for the reversion of
the land covered thereby to the government. This Court cannot sanction Yap's assertion. Time and
again, the Court has ruled that the burden of proof to
However, as adverted to above, Section 32 of Presidential establish the status of a purchaser and registrant in good
Decree No. 1529 mandates that for a reversion case to faith lies upon the one who asserts it. This onus
probandi cannot be discharged by mere invocation of the certificate of title but all factual circumstances necessary
legal presumption of good faith.49 for him to determine if there are any flaws in the title of the
transferor, or in his capacity to transfer the land.
It must be emphasized that aside from the fact that a notice
of lis pendens was already annotated on OCT No. P-11182 This Court has consistently applied the stricter rule when it
even before Yap and Villamar purchased the subject comes to deciding the issue of good faith of one who buys
property, it was also established that when they did so, the from one who is not the registered owner, but who exhibits
said property was still registered in the name of Pagarigan a certificate of title.53(Emphasis in the original)
since the Bank did not consolidate its title thereto.50Stated
simply, Yap and Villamor purchased the subject Neither estoppel nor laches lies
property not from the registered owner. against the respondent m the
present case
In Trifonia D. Gabutan, et al. v. Dante D. Nacalaban, et
al.,51 the Court held that: Citing the cases of Saad Agro-Jndustries54 and Republic of
the Philippines v. CA,55 the RTC Branch 16 opined that in
A buyer for value in good Faith is one who buys property an action for reversion, the defenses of
of another, without notice that some other person has a equitable estoppel, laches and Torrens System in land titles
right to, or interest in, such property and pays full and fair are available - without, however, stating that the foregoing
price for the same, at the time of such purchase, or before also applies in this case, and how.
he has notice of the claim or interest of some other persons
in the property. He buys the property with the well-founded In any event, neither of said cases is on all fours with the
belief that the person from whom he receives the thing had present case. Said cases did not dwell on whether an FPA
title to the property and capacity to convey it. was granted through the employment of fraud and/or
misrepresentation, nor the question of whether the
To prove good faith, a buyer of registered and titled land concerned properties were conveyed to innocent
need only show that he relied on the face of the title to the purchasers.
property. He need not prove that he made further inquiry
for he is not obliged to explore beyond the four comers of In Saad Agro-Industries, free patent was alleged to have
the title. Such degree of proof of good faith, however, is been mistakenly issued over a property that was claimed by
sufficient only when the following conditions therein respondent as inalienable for being part of a track of
concur: first, the seller is the registered owner of the land classified as forest land. However, it was established
land; second, the latter is in possession thereof; that government has not yet classified the lot in question as
and third, at the time of the sale, the buyer was not aware forest reserve prior to the issuance of the concerned free
of any claim or interest of some other person in the patent. Moreover, it was also established that therein
property, or of any defect or restriction in the title of the subject property was already conveyed to an innocent
seller or in his capacity to convey title to the property. purchaser for value, Saad Agro-Industries, Inc. before the
action for reversion was instituted.
Absent one or two of the foregoing conditions, then the law
itself puts the buyer on notice and obliges the latter to In Republic of the Philippines v. CA,56 therein petitioner
exercise a higher degree of diligence by scrutinizing the instituted an action to annul the certificates of title that
certificate of title and examining all factual circumstances were issued on the basis of a null and void subdivision
in order to determine the seller's title and capacity to plan. While therein petitioner sufficiently proved that the
transfer any interest in the property. Under such actual area of the disputed property was unduly enlarged in
circumstance, it is no longer sufficient for said buyer to the said subdivision plan, it, however, presented no proof
merely show that he relied on the face of the title; he must that therein respondent committed fraud when it submitted
now also show that he exercised reasonable precaution by the subdivision plan to the Land Registration Commission
inquiring beyond the title. Failure to exercise such degree for approval. Since the plan was presumed to have been
of precaution makes him a buyer in bad faith.52 (Emphasis subjected to investigation, study and verification by said
and italics in the original) commission, there was no one to be blamed except therein
petitioner, acting through said body, itself. Thus, for having
Verily, as the Court held in a catena of cases: allowed and approved the subdivision plan, the government
was held to be in estoppel to question the same, and seek
[T]he law protects to a greater degree a purchaser who buys the annulment of titles issued pursuant thereto. Moreover,
from the registered owner himself. Corollarily, it requires a when the action was instituted, the subdivided properties
higher degree of prudence from one who buys from a were already sold to innocent purchasers for value.
person who is not the registered owner, although the land Additionally, although therein petitioner asserted that the
object of the transaction is registered. While one who buys action was instituted to protect the integrity of the Torrens
from the registered owner does not need to look behind the System, it was, however, unjustifiable that it took nearly 20
certificate of title, one who buys from one who is not the years before therein petitioner acted on the matter. Verily,
registered owner is expected to examine not only the
therein petitioner's prolonged inaction was held as to titles secured by fraud and misrepresentation. Well-
tantamount to laches. settled is the doctrine that the registration of a patent under
the Torrens System does not by itself vest title; it merely
In the instant case, it was established that Pagarigan's FPA confirms the registrant's already existing one. Verily,
was secured on the basis of his fraudulent registration under the Torrens System is not a mode of
representations.1âwphi1 The respondent cannot be faulted acquiring ownership.63 (Citations omitted)
for having been misled into believing that an applicant is
legally qualified to be granted free patent as to render it A fraudulently acquired free patent
estopped from asserting its right to recover its own may only be assailed by the
property. While the action for reversion was instituted only government m an action for
in 2003, the circumstances leading to the institution of the reversion
case hardly spells inaction or neglect on the part of the
respondent as to be considered guilty of laches. Nonetheless, a free patent that was fraudulently acquired,
and the certificate of title issued pursuant to the same, may
Forsooth, there was no prolonged inaction on the part of the only be assailed by the government in an action for
respondent in this case. This can be gleaned in the reversion, pursuant to Section 101 of the Public Land Act.
decision57 of the DENR Secretary. Shortly after the In Sherwill Development Corporation v. Sitio Sta. Nino
protestants filed a formal protest with the Bureau on Residents Association, Inc.,64 the Court pointed out that:
October 24, 1990, the Officer-in-Charge, Regional
Executive Director (RED) of the DENR Region XI, Davao It is also to the public interest that one who succeeds in
City immediately ordered an investigation on November fraudulently acquiring title to a public land should not be
15, 1990,58 and the same commenced on November 19, allowed to benefit therefrom, and the State should,
1990. On February 14, 1994, the RED issued a decision therefore, have an even existing authority, thru its duly-
dismissing the protestants' protest.59 Undaunted, the authorized officers, to inquire into the circumstances
protestants elevated their case to the Office of the DENR surrounding the issuance of any such title, to the end that
Secretary. On May 15, 1995, the DENR Secretary set-aside the Republic, thru the Solicitor General or any other officer
the RED's decision and ordered the institution of who may be authorized by Jaw, may file the corresponding
appropriate action for the cancellation of OCT No. P- action for the reversion of the land involved to the public
11182, and for the reversion of the property covered domain, subject thereafter to disposal to other qualified
thereby to the government. persons in accordance with law. In other words, the
indefeasibility of a title over land previously public is not a
The instant action does not bar to an investigation by the Director of Lands as to how
undermine the indefeasibility of such title has been acquired, if the purpose of such
Torrens title investigation is to determine whether or not fraud had been
committed in securing such title in order that the
In the case of Lorzano v. Tabayag, Jr.,60 the Court appropriate action for reversion may be filed by the
reiterated that a Torrens title emanating from a free patent Government.65
which was secured through fraud does not become
indefeasible because the patent from whence the title WHEREFORE, the petition is hereby DENIED. The
sprung is itself void and of no effect whatsoever. Thus: Decision dated June 30, 2011 and Resolution dated
November 14, 2011 of the Court of Appeals in CA-GR. CV
Once a patent is registered and the corresponding certificate No. 01753-MIN are AFFIRMED
of title is issued, the land covered thereby ceases to be part
of public domain and becomes private property, and the
Torrens Title issued pursuant to the patent becomes
indefeasible upon the expiration of one year from the date
of such issuance. However, a title emanating from a free
patent which was secured through fraud does not become
indefeasible, precisely because the patent from whence the
title sprung is itself void and of no effect whatsoever.61

On this point, the Court's ruling m Republic v. Heirs of

Felipe Alejaga, Sr.62 is instructive:

True, once a patent is registered and the corresponding

certificate of title [is] issued, the land covered by them
ceases to be part of the public domain and becomes private
property. Further, the Torrens Title issued pursuant to the
patent becomes indefeasible a year after the issuance of the
latter. However, this indefeasibility of a title does not attach
MARIANO TORRES Y CHAVARRIA, petitioner,  On March 30, 1968, Torres filed Civil Case No. 72494
vs. against Fernandez to annul TCT No. 86018 as well as the
THE HONORABLE COURT OF APPEALS, proceedings in LRC GLRO Cad. Rec. No. 133. On April 2,
FRANCISCO E. FERNANDEZ and FE FERNANDEZ, 1968, a notice of lis pendens was annotated at the back of
ROSARIO MOTA CUE, ERNESTO MEDINA CUE Fernandez' TCT.
and the NATIONAL TREASURER, as Custodian of the
Assurance Fund, respondents. In the meantime, Fernandez failed to pay his various loans
which prompted the Cues to institute an extrajudicial
This is a petition for review of the decision of the Court of foreclosure of the mortgage.
Appeals in CA-G.R. No. 62248-R entitled "Mariano
Torres Y Chavarria v. Francisco E. Fernandez, et al., etc.," On February 11, 1969, Fernandez filed Civil Case No.
which reversed the decision of the then Court of First 75643 against the spouses Cue for the annulment of the
Instance of Manila, Branch 7, by holding that it is the mortgage with preliminary injunction.
respondent Rosario Mota who is legally entitled to the
disputed realties, being an innocent mortgagee and later the
highest bidder when the properties were supposedly After the foreclosure was enjoined, the parties entered into
foreclosed, and not the petitioner Mariano Torres, the an amicable settlement, approved by the court whereby it
defrauded owner thereof; and of the resolution of that Court was stipulated that Fernandez acknowledged and promised
denying Torres' motion for reconsideration. to pay his debt to the Cues for Five Hundred Sixty-Two
Thousand Nine Hundred Fifty-Five and 28/100
(P562,955.28) Pesos on or before, March 30, 1970, while
The parcel of land located at the comer of Quezon the spouses bound themselves to execute and deliver,
Boulevard and Raon Street (now Gonzalo Street), and the within ten (10) days from receipt of the sum mentioned
building erected thereon known as "M. Torres Building" is such documents as are necessary to release the mortgages
owned by Mariano Torres, the herein petitioner, as in favor of defendants on plaintiffs' property.
evidenced by Transfer Certificate of Title No. 53628-
Manila issued in his name. As far as the records show,
Torres was and still is in possession of the realties, holding Before Fernandez could pay his obligation under the
safely to his owner's duplicate certificate of title, and, at settlement agreement, a decision was rendered in Civil
least until 1971, paying the real estate taxes due thereon, Case No. 72494 where it was declared that the proceedings
and collecting rentals from his tenants occupying the held in LRC GLRO Cad. Rec, No. 133 was void and that
building. TCT No. 86018, issued in the name of Fernandez, is
without force and effect as TCT No. 53628 in the name of
Torres is the true and legal evidence of ownership of the
Sometime in 1966, Francisco Fernandez, Torres' brother- subject immovables. Fernandez appealed from this decision
in-law, filed a petition with the Court of First Instance of to the Court of Appeals where it was docketed as CA-G.R.
Manila, docketed as LRC GLRO Cad. Rec. No. 133, where No. 46386-R. The Court of Appeals, on April 20, 1979,
he, misrepresenting to be the attorney-in-fact of Torres and affirmed the decision of the trial court. There being nothing
falsely alleging that the a duplicate copy of TCT No. 53628 on the records that would indicate that the judgment of the
was lost, succeeded in obtaining a court order for the appellate court was elevated here, it would appear that it
issuance of another copy of the certificate. had become final and executory.

Once in possession thereof, Fernandez forged a simulated But meanwhile, prior to the Court of Appeals' decision
deed of sale of the realties in his favor. Whereupon TCT mentioned above, Fernandez failed to comply with his
No. 53628 in the name of Torres was canceled and TCT obligation under the amicable settlement and whereupon
No. 86018 was issued in Fernandez' name. the Cues applied for and were granted a writ of execution.
The subject realties were then levied upon and sold at
On various dates from December, 1966 to November, 1967 public auction where Rosario Mota was the highest bidder.
Fernandez mortgaged the realties to Rosario Mota, wife of
Ernesto Cue, and also to Angela Fermin, who later assigned On August 31, 1971, the redemption period for the subject
her credit to the spouses Cue. The mortgages were immovables having lapsed without Fernandez nor Torres
annotated at the back of TCT No. 86018 and so was the redeeming the properties, Rosario Mota was issued the
deed of assignment. Sheriffs Deed of Sale. Thereafter, TCT No. 86018 was
canceled and TCT No. 105953 was issued in her name.
Torres, who up to this time still had possession of his
owner's duplicate certificate of title and who was still On December 7, 1971 Mota, through her lawyer, notified
collecting rentals from the occupants of the subject the tenants occupying "M. Torres Building" that she is the
building, upon Teaming of the fraud committed by new owner thereof and henceforth, payment of their rentals
Fernandez, caused, on March 18, 1968, the annotation on should be made to her.
the latter's TCT a notice of adverse claim.
On December 17, 1971 Torres filed a complaint, which 16096, October 30, 1962, 6 SCRA 287, 292, We laid down
later gave rise to this petition, with the Court of First the doctrine that:
Instance of Manila, docketed as Civil Case No. 85753,
against Fernandez and his spouse and the Cues to restrain The claim of indefeasibility of the
the latter from collecting rentals and for the declaration as petitioner's title under the Torrens land
void TCT No. 105953. The Cues in turn filed a cross-claim title system would be correct if
against Fernandez spouses and a third party complaint previous valid title to the same parcel
against the National Treasurer as the custodian of the of land did not exist. The respondent
Assurance Fund. had a valid title ... It never parted with
it; it never handed or delivered to
During the proceeding, Mariano Torres, having died anyone its owner's duplicate of the
sometime in 1974, was substituted by his widow. On June transfer certificate of title, it could not
3, 1977, the trial court rendered its decision declaring TCT be charged with negligence in the
No. 105953 in the name of Rosario Mota nun and void as it keeping of its duplicate certificate of
upheld the validity of TCT No. 53628 in the name of title or with any act which could have
Torres as the true evidence of title to the disputed realties, brought about the issuance of another
and at the same time dismissing the Cue's third party certificate upon which a purchaser in
complaint and cross claim. good faith and for value could rely. If
the petitioner's contention as to
The decision was reviewed by the respondent court at the indefeasibility of his title should be
instance of the Cues which, as aforementioned, reversed the upheld, then registered owners without
trial court in its decision dated July 30, 1982 and the the least fault on their part could be
Resolution of January 14, 1983. Hence, this petition. divested of their title and deprived of
their property. Such disastrous results
which would shake and destroy the
There is nothing on the records which shows that Torres stability of land titles had not been
performed any act or omission which could have foreseen by those who had endowed
jeopardized his peaceful dominion over his realties. The with indefeasibility land titles issued
decision under review, however, in considering Mota an under the Torrens system. Veronica
innocent mortgagee protected under Section 55 of the Land Bareza perpetrated the fraud by making
Registration Law, held that Torres was bound by the false representations in her petition and
mortgage. Inevitably, it pronounced that the foreclosure the title issued to her being the product
sale, where Mota was the highest bidder, also bound Torres of fraud could not vest in her valid and
and concluded that the certificate of title issued in the name legal title to the parcel of land in
of Mota prevails over that of Torres'. As correctly pointed litigation. As she had no title to the
out by Torres, however, his properties were sold on parcel of land, in the same way that a
execution, and not on foreclosure sale, and hence, the thief does not own or have title to the
purchaser thereof was bound by his notice of adverse claim stolen goods, she could not transmit
and lis pendens annotated at the back of Fernandez' TCT. title which she did not have nor
Moreover, even if We grant Mota the status of an innocent possess.
mortgagee, the doctrine relied upon by the appellate court
that a forged instrument may become the root of a valid
title, cannot be applied where the owner still holds a valid We have applied this doctrine in the case of the Register of
and existing certificate of title covering the same interest in Deeds v. P.N.B., supra, where We noted that said ruling is
a realty. The doctrine would apply rather when, as in the "a mere affirmation of the recognized principle that a
cases for example of De la Cruz v. Fable, 35 Phil. 144 certificate is not conclusive evidence of title if it is shown
[1916], Fule v. De Legare, No. L-17951, February 28, that the same land had already been registered and an
1963, 7 SCRA 351, and Republic v. Umali, G.R. No. earlier certificate for the same land is in existence." Again
80687, April 10, 1989, the forger thru insidious means in the case of Baltazar v. Court of Appeals, G.R. No.
obtains the owner's duplicate certificate of title, converts it 78728, December 8, 1988, 168 SCRA 354, We held that as
in his name, and subsequently sells or otherwise encumbers between two persons both of whom are in good faith and
it to an innocent holder for value, for in such a case the new both innocent of any negligence, the law must protect and
certificate is binding upon the owner (Sec. 55, Act 496; prefer the lawful holder of registered title over the transfer
Sec. 53, P.D. No. 1529). But if the owner holds a valid and of a vendor bereft of any transmissible rights.
existing certificate of title, his would be indefeasible as
against the whole world, and not that of the innocent In view of the foregoing, to hold, for the purpose of
holder's. "Prior tempore potior jure" as We have said enforcing the mortgage, that Mota was an innocent
in Register of Deeds v. Philippine National Bank, No. L- mortgagee would be futile because, as above shown, no
17641, January 30, 1965, 13 SCRA 46 , citing Bank, No. L certificate of title covering the subject realties in derogation
Legarda v. Saleeby, 31 Phil. 590, Roman Catholic Bishop of Torres' certificate of title may validly be issued.
v. Philippine Railway, 49 Phil. 546, Reyes v. Borbon, 50
Phil. 791. in C.N. Hodges v. Dy Buncio & Co., Inc., No. L-
Then it becomes evident that the remaining possible Another thing that defendants Mota and
remedies of the Cues are to go against Fernandez or the Medina Cue must have investigated, as
Assurance Fund, as they in fact had done in the lower court any prudent buyer or mortgagee should
by filing a cross claim and third party complaint. The lower before consummating any transaction
court dismissed the Cues' cross-claim against Fernandez on real property, in the matter of
reasoning out that their remedy is to cause the final payment of taxes on the property. After
judgment (compromise agreement) in Civil Case No. 75643 all, the big value of the property in
executed. This, of course, is correct since the rights and question necessarily means that even
obligations of both parties had been determined in that real estate taxes on it alone would
case. involve big amounts of money, and if
there are tax arrearages, any buyer or
The trial court also dismissed the Cues' third party subsequent owner of the property wig
complaint against the Treasurer of the Philippines as have to come face to face with the tax
custodian of the Assurance Fund after finding them hen attaching to the property wherever
negligent in protecting their interest. The trial court its owner may be. ... (P. 257, Record on
recognized the principle that a person dealing with Appeal)
registered lands need not go beyond the certificate of title
but nevertheless pointed out that there are circumstances in We likewise take note of the manifestation of the Office of
this case which should have put the Cues on guard and the Solicitor General that the Cues failed to contest the
prompted them to investigate the property being mortgaged ruling of the trial court negating the liability of the
to them, thus: Assurance Fund. For these reasons, We hold that the Cues'
remedy merely is to go against Francisco Fernandez or
The property in question is a very rather his estate since record shows that he died sometime
valuable property, in fact accepted by in 1983.
defendants Mota and Medina Cue as
collateral for more than half a million ACCORDINGLY, the decision and resolution under
pesos in loans granted by them to review are REVERSED and the decision of the then Court
Fernandez. Its value lies principally in of First Instance, Branch 7, Manila in Civil Case No. 85753
its income potential, in the form of is REINSTATED.
substantial monthly rentals. Certainly,
the registered title does not yield any SO ORDERED
information as to the amount of rentals
due from the building, much less on
who is collecting them, or who is
recognized by the tenants as their
landlord. Any prospective buyer or
mortgagee of such a property, if
prudent and in good faith, is normally
expected to inquire into all these and
related facts and circumstances.

Besides, by the course of visible

dimensions of the M. Torres Building,
it should be readily obvious to any one
that the area of the two lots ... covered
by TCT No. 86018 cannot
accommodate the building, as in fact it
also rests upon a lot covered by TCT
No. 56387, and partly upon a lot leased
by (Torres) from the City of Manila.
Had (the Cues) known of this fact
would they have accepted the mortgage
alone over TCT No. 86018? The
answer is obvious. And yet, to all
indications, they never bothered to look
into this fact about the M. Torres
Building.

xxx xxx xxx

 of the Register of Deeds of Nueva Ecija pursuant to Section
DEVELOPMENT BANK OF THE 122 of Act 496 on June 3, 1949 (Exh. A), as a result of
PHILIPPINES, plaintiff-appellant,  which Original Certificate of Title No. P-389 was issued in
vs. her favor."1
LOURDES GASPAR BAUTISTA, THE DIRECTOR
OF THE LANDS and THE NATIONAL TREASURER How the loan was contracted by now appellee Bautista was
OF THE PHILIPPINES, defendants-appellees. therein set forth. Thus: "On July 16, 1949, Bautista applied
for a loan with the Rehabilitation Finance Corporation
Jesus A. Avanceña for plaintiff-appellant. (RFC), predecessor in interest of the plaintiff-appellee
Lourdes Gaspar Bautista in her own behalf as defendant- Development Bank of the Philippines (DBP), offering as
appellee. security the parcel of land covered by O.C.T. No. P-389.
Assistant Solicitor General Antonio Torres, Solicitor Aside from her certificate of title, Bautista also submitted
Francisco J. Bautista and Special Attorney Daniel G. to the RFC other documents to show her ownership and
Florida for defendants-appelles Director of Lands, et al. possession of the land in question, namely, Tax Declaration
No. 5153 (Exh. A-4) in her name and the blueprint plan of
FERNANDO, J.: the land. On the basis of the documents mentioned and the
appraisal of the property by its appraiser, the RFC approved
a loan of P4,000.00 in favor of Bautista. On July 16, 1949,
The question this appeal from a judgment of a lower court Bautista executed the mortgage contract over the property
presents is one that possesses both novelty and covered by O.C.T. No. P-389 and the promissory note for
significance. It is this: What is the right, if any, of a creditor P4,000.00 in favor of RFC (Exhs. C and C-1), after which
which previously satisfied its claim by foreclosing the proceeds of the loan were released."2
extrajudicially on a mortgage executed by the debtor,
whose title was thereafter nullified in a judicial proceeding
where she was not brought in as a party? The satisfaction of the mortgage debt with the acquisition
of the title to such property by appellant Bank, by virtue of
an extrajudicial foreclosure sale, and such title losing its
As creditor, the Development Bank of the Philippines now validity in view of a court proceeding, where however,
appellant, filed a complaint against one of its debtors, appellee Bautista, was not made a party, was next taken up
Lourdes Gaspar Bautista, now appellee, for the recovery of in the brief of plaintiff-appellant. Thus: "Bautista failed to
a sum of money representing the unpaid mortgage pay the amortization on the loan so that the RFC took steps
indebtedness, which previously had been wiped out with to foreclose the mortgage extra-judicially under Act 3135,
the creditor bank acquiring the title of the mortgaged as amended. In the ensuing auction sale conducted by the
property in an extrajudicial sale. Thereafter, the title was sheriff of Nueva Ecija on June 27, 1951, the RFC acquired
nullified in a judicial proceeding, the land in question being the mortgaged property as the highest bidder (Exh. D). On
adjudged as belonging to another claimant, without, the date of the sale, the total obligation of Bautista with the
however, such debtor, as above noted, having been cited to RFC was P4,858.48 (Exh. I). On July 21, 1952, upon
appear in such court action. failure of Bautista to redeem the property within the one (1)
year period as provided bylaw, plaintiff-appellant RFC
The Development Bank was unsuccessful, the lower court consolidated its ownership thereon (Exhs. E and E-I). On
being of the view that with the due process requirement July 26, 1952, the Register of Deeds of Nueva Ecija
thus flagrantly disregarded, since she was not a party in cancelled O.C.T. No. P-389 and replaced it with T.C.T. No.
such action where her title was set aside, such a judgment NT-12108 in the name of the RFC (Exhs. F and F-1). On or
could in no wise be binding on her and be the source of a about this time, however, an action (Civil Case No. 870)
claim by the appellant bank. The complaint was thus was filed by Rufino Ramos and Juan Ramos in the Court of
dismissed by the lower court, then presided by Judge, now First Instance of Nueva Ecija against the Government of
Justice, Magno Gatmaitan of the Court of Appeals. Hence, the Republic of the Philippines and the RFC (as successor
this appeal by appellant bank. in interest of Bautista) claiming ownership of the land in
question and seeking the annulment of T.C.T. No. 2336 in
Such dismissal is in accordance with law. There is no the name of the Government, O.C.T. No. P-389 in the name
occasion for us to repudiate the lower court. of Bautista and T.C.TG. No. NT-12108 in the name of the
RFC. A decision thereon was rendered on June 27, 1955
(Exhs. G, G-1, and G-3) whereby the aformentioned
From the very statement of facts in the brief for appellant certificates of title were declared null and void."3
bank, the following appears: "On or before May 31, 1949,
the defendant-appellee, Lourdes Gaspar Bautista, who shall
hereafter be referred to as Bautista, applied to the Why the complaint had to be dismissed was explained thus
Government for the sale favor of a parcel of land with an in the decision now on appeal: "The Court after examining
area of 12 has., 44 ares, and 22 centares, located at Bo. the proofs, is constrained to sustain her on that; it will
Barbara, San Jose, Nueva Ecija. After proper investigation, really appear that she had never been placed within the
Sales Patent no. V-132 covering said property was issued in jurisdiction of the Nueva Ecija Court; as the action there
her favor on June 1, 1949 (Exh. A-1) by the Director of was one to annual the title, it was an action strictly in
Lands. Sales Patent No. V-132 was registered in the office personam, if that was the case as it was, the judgment there
could not in any way bind Lourdes who had not acquired in the litigation when he was forced out of the property by the
said decision in any way for what only happened is that as sheriff, and so he filed the present motion to be heard and
to the mortgage, the Bank foreclosed, and then sold unto prove his title to the property. This he has the right to do as
Conrada and when the title had been annulled, the Bank the most expeditious manner to protect his interest instead
reimbursed Conrada; stated otherwise, the annulment of of filing a separate action which generally is long, tedious
Lourdes' title was a proceeding ex parte as far as she was and protracted.'"
concerned and could not bind her at all; and her mortgage
was foreclosed an the Bank realized on it, when the Bank Reinforcement to the above conclusion comes from a codal
afterwards acquiesced in the annulment of the title and took provision. According to the Civil Code:7 "The vendor shall
it upon itself to reimburse Conrada, the Bank was acting on not be obliged to make good the proper warranty, unless he
its own peril because it could not have by that, bound is summoned in the suit for eviction at the instance of the
Lourdes at all."4 vendee. "While not directly in point, the principle on which
the above requirement is based sustains the decision of the
As stated at the outset, the decision must be affirmed. The lower court. In effect, appellant bank would hold appellee
fundamental due process requirement having been Bautista liable for the warranty on her title, its annullment
disregarded, appellee Bautista could not in any wise be having the same effect as that of an eviction. In such a case,
made to suffer, whether directly or indirectly, from the it is wisely provided by the Civil Code that appellee
effects of such decision. After appellant bank had acquired Bautista, as vendor, should have been summoned and given
her title by such extrajudicial foreclosure sale and thus, the opportunity to defend herself. In view of her being
through its own act, seen to it that her obligation had been denied her day in court, it would to be respected, that she is
satisfied, it could not thereafter, seek to revive the same on not "obliged to made good the proper warranty."
the allegation that the title in question was subsequently
annulled, considering that she was not made a party on the In the suit before the lower court, the Director of Lands and
occasion of such nullification. the National Treasurer of the Philippines were likewise
made defendants by appellant bank because of its belief
If it were otherwise, then the cardinal requirement that no that if no right existed as against appellee Bautista,
party should be made to suffer in person or property recovery could be had from the Assurance Fund. Such a
without being given a hearing would be brushed aside. The belief finds no support in the applicable, law, which allows
doctrine consistently adhered to by this Court whenever recovery only upon a showing that there be no negligence
such a question arises in a series of decisions is that a on the part of the party sustaining any loss or damage or
denial of due process suffices to cast on the official act being deprived of any land or interest therein by the
taken by whatever branch of the government the impress of operation of the Land Registration Act.8 This certainly is
nullity.5 not the case here, plaintiff-appellant being solely
responsible for the light in which it now finds itself.
A recent decision, Macabingkil v. Yatco,6 possesses Accordingly, the Director of Lands and the National
relevance. "A 1957 decision, Cruzcosa v. Concepcion, is Treasurer of the Philippines are likewise exempt from any
even more illuminating in so far as the availability of the liability.
remedy sought is concerned. In the language of this Court,
speaking through Justice J.B.L. Reyes: 'The petition is WHEREFORE, the judgment appealed from is affirmed,
clearly meritorious. Petitioners were conclusively found by with costs against the Development Bank of the
the Court of Appeals to be co-owners of the building in Philippines.
question. Having an interest therein, they should have been
made parties to the ejectment proceedings to give them a Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal,
chance to protect their rights: and not having been made Zaldivar, Sanchez, Castro and Capistrano, JJ., concur
parties thereto, they are not bound and can not be affected
by the judgment rendered therein against their co-owner
Catalino Cruzcosa. Jr. ....' Two due process cases deal
specifically with a writ of execution that could not validly
be enforced against a party who was not given his day in
court, Sicat v. Reyes, and Hamoy v. Batingoplo. According
to the former: 'The above agreement, which served as basis
for the ejectment of Alipio Sicat, cannot be binding and
conclusive upon the latter, who is not a party to the case.
Indeed, that order, as well as the writ of execution, cannot
legally be enforced against Alipio Sicat for the simple
reason that he was not given his day in court.' From the
latter: 'The issue raised in the motion of Rangar is not
involved in the appeal for it concerns a right which he
claims over the property which has not so far been litigated
for the reason that he was not made a party to the case
either as plaintiff for a defendant. He only came to know of
 Ervin Abad et. als. ordering the latter and all persons
SPOUSES LETICIA & JOSE ERVIN ABAD, SPS. claiming rights under them
ROSARIO AND ERWIN COLLANTES, SPS. to VACATE and SURRENDERpossession of the
RICARDO AND FELITA ANN, SPS. ELSIE AND premises (Lots covered by TCT NOS. (71065) 21712 and
ROGER LAS PIÑAS, LINDA LAYDA, RESTITUTO (71066) 21713 otherwise known as Purok I Silverio
MARIANO, SPS. ARNOLD AND MIRIAM Compound, Barangay San Isidro, Parañaque City to
MERCINES, SPS. LUCITA AND WENCESLAO A. plaintiff and to PAY the said plaintiff as follows:
RAPACON, SPS. ROMEO AND EMILYN HULLEZA,
LUZ MIPANTAO, SPS. HELEN AND ANTHONY 1. The reasonable compensation in the amount of
TEVES, MARLENE TUAZON, SPS. ZALDO AND ₱20,000.00 a month commencing November 20,
MIA SALES, SPS. JOSEFINA AND JOEL YBERA, 2002 and every month thereafter until the
SPS. LINDA AND JESSIE CABATUAN, SPS. WILMA defendants shall have finally vacated the
AND MARIO ANDRADA, SPS. RAYMUNDO AND premises and surrender peaceful possession
ARSENIA LELIS, FREDY AND SUSANA thereof to the plaintiff;
PILONEO, Petitioners, 
vs.
FIL-HOMES REALTY and DEVELOPMENT 2. ₱20,000.00 as and for attorney’s fees, and
CORPORATION and MAGDIWANG REALTY finally
CORPORATION,Respondents.
3. Costs of suit.
DECISION
SO ORDERED.1 (emphasis in the original)
CARPIO MORALES, J.:
The MeTC held that as no payment had been made to
Fil-Homes Realty and Development Corporation and respondents for the lots, they still maintain ownership
Magdiwang Realty Corporation (respondents), co-owners thereon. It added that petitioners cannot claim a better right
of two lots situated in Sucat, Parañaque City and covered by virtue of the issuance of a Writ of Possession for the
by Transfer Certificates of Title Nos. 21712 and 21713, project beneficiaries have yet to be named.
filed a complaint for unlawful detainer on May 7, 2003
against above-named petitioners before the Parañaque On appeal, the Regional Trial Court (RTC), by Decision of
Metropolitan Trial Court (MeTC). September 4, 2008,2 reversed the MeTC decision
and dismissed respondents’ complaint in this wise:
Respondents alleged that petitioners, through tolerance, had
occupied the subject lots since 1980 but ignored their x x x The court a quo ruled that the case filed by plaintiffs
repeated demands to vacate them. (respondents herein) is unlawful detainer as shown by the
allegations of the Complaint. The ruling of the court a quo
Petitioners countered that there is no possession by is not accurate. It is not the allegations of the Complaint
tolerance for they have been in adverse, continuous and that finally determine whether a case is unlawful
uninterrupted possession of the lots for more than 30 years; detainer, rather it is the evidence in the case.
and that respondent’s predecessor-in-interest, Pilipinas
Development Corporation, had no title to the lots. In any Unlawful detainer requires the significant element of
event, they contend that the question of ownership must "tolerance". Tolerance of the occupation of the property
first be settled before the issue of possession may be must be present right from the start of the defendants’
resolved. possession. The phrase "from the start of defendants’
possession" is significant. When there is no "tolerance"
During the pendency of the case or on June 30, 2004, the right from the start of the possession sought to be
City of Parañaque filed expropriation proceedings covering recovered, the case of unlawful detainer will not
the lots before the Regional Trial Court of Parañaque with prosper.3 (emphasis in the original; underscoring supplied)
the intention of establishing a socialized housing project
therein for distribution to the occupants including The RTC went on to rule that the issuance of a writ of
petitioners. A writ of possession was consequently issued possession in favor of the City bars the continuation of the
and a Certificate of Turn-over given to the City. unlawful detainer proceedings, and since the judgment had
already been rendered in the expropriation proceedings
Branch 77 of the MeTC, by Decision of March 3, 2008, which effectively turned over the lots to the City, the
rendered judgment in the unlawful detainer case against MeTC has no jurisdiction to "disregard the . . . final
petitioners, disposing as follows: judgment and writ of possession" due to non-payment of
just compensation:
WHEREFORE, judgment is hereby rendered in favor
of the plaintiff and against the defendants Leticia and The Writ of Possession shows that possession over the
properties subject of this case had already been given to the
City of Parañaque since January 19, 2006 after they were signify the completion of the expropriation proceedings.
expropriated. It is serious error for the court a quo to Thus it disposed:
rule in the unlawful detainer case that Magdiwang
Realty Corporation and Fil-Homes Realty and WHEREFORE, premises considered, the instant Petition is
Development Corporation could still be given GRANTED. The assailed Decision of the Court a quo is
possession of the properties which were already REVOKED and SET ASIDE. The Decision of the
expropriated in favor of the City of Parañaque. Metropolitan Trial Court dated March 3, 2008 is hereby
REINSTATED with MODIFICATION [by] deleting the
There is also another serious lapse in the ruling of the court award for attorney’s fees.
a quo that the case for expropriation in the Regional Trial
Court would not bar, suspend or abate the ejectment SO ORDERED. (underscoring supplied)
proceedings. The court a quo had failed to consider the fact
that the case for expropriation was already decided by the
Regional Trial Court, Branch 196 way back in the year Petitioners’ motion for reconsideration was denied by
2006 or 2 years before the court a quo rendered its Resolution dated August 26, 2009, hence, the filing of the
judgment in the unlawful detainer case in the year 2008. In present petition for review.
fact, there was already a Writ of Possession way back in the
year 1996 (sic) issued in the expropriation case by the The petition fails.
Regional Trial Court, Branch 196. The court a quo has no
valid reason to disregard the said final judgment and In the exercise of the power of eminent domain, the State
the writ of possession already issued by the Regional expropriates private property for public use upon payment
Trial Court in favor of the City of Parañaque and of just compensation. A socialized housing project falls
against Magdiwang Realty Corporation and Fil-Homes within the ambit of public use as it is in furtherance of the
Realty Development Corporation and make another constitutional provisions on social justice.9
judgment concerning possession of the subject
properties contrary to the final judgment of the
Regional Trial Court, Branch 196.4 (emphasis in the As a general rule, ejectment proceedings, due to its
original) summary nature, are not suspended or their resolution held
in abeyance despite the pendency of a civil action regarding
ownership.
Before the Court of Appeals where respondents filed a
petition for review, they maintained that respondents’ "act
of allowing several years to pass without requiring [them] Section 1 of Commonwealth Act No. 53810 enlightens,
to vacate nor filing an ejectment case against them amounts however:
to acquiescence or tolerance of their possession."5
Section 1. When the Government seeks to acquire, through
By Decision of May 27, 2009,6 the appellate court, noting purchase or expropriation proceedings, lands belonging to
that petitioners did not present evidence to rebut any estate or chaplaincy (cappellania), any action for
respondents’ allegation of possession by tolerance, and ejectment against the tenants occupying said lands shall be
considering petitioners’ admission that they commenced automatically suspended, for such time as may be required
occupation of the property without the permission of the by the expropriation proceedings or the necessary
previous owner ─ Pilipinas Development Corporation ─ as negotiations for the purchase of the lands, in which latter
indicium of tolerance by respondents’ predecessor-in- case, the period of suspension shall not exceed one year.
interest, ruled in favor of respondents. Held the appellate
court: To avail himself of the benefits of the suspension, the
tenants shall pay to the landowner the current rents as they
Where the defendant’s entry upon the land was with become due or deposit the same with the court where the
plaintiff’s tolerance from the date and fact of entry, action for ejectment has been instituted. (emphasis and
unlawful detainer proceedings may be instituted within one underscoring supplied)
year from the demand on him to vacate upon demand. The
status of such defendant is analogous to that of a tenant or Petitioners did not comply with any of the acts mentioned
lessee, the term of whose lease, has expired but whose in the law to avail of the benefits of the suspension. They
occupancy is continued by the tolerance of the lessor. The nevertheless posit that since the lots are the subject of
same rule applies where the defendant purchased the house expropriation proceedings, respondents can no longer assert
of the former lessee, who was already in arrears in the a better right of possession; and that the City Ordinance
payment of rentals, and thereafter occupied the premises authorizing the initiation of expropriation proceedings
without a new lease contract with the landowner.7 designated them as beneficiaries of the lots, hence, they are
entitled to continue staying there.
Respecting the issuance of a writ of possession in the
expropriation proceedings, the appellate court, Petitioners’ position does not lie.
citing Republic v. Gingoyon,8 held the same does not
The exercise of expropriation by a local government unit is respondents prior to the City’s possession of the lots,
covered by Section 19 of the Local Government Code contrary to Section 19 of the LGC.
(LGC):
Respecting petitioners’ claim that they have been named
SEC. 19. Eminent Domain. – A local government unit may, beneficiaries of the lots, the city ordinance authorizing the
through its chief executive and acting pursuant to an initiation of expropriation proceedings does not state
ordinance, exercise the power of eminent domain for public so.13 Petitioners cannot thus claim any right over the lots on
use, or purpose, or welfare for the benefit of the poor and the basis of the ordinance.
the landless, upon payment of just compensation, pursuant
to the provisions of the Constitution and pertinent laws: Even if the lots are eventually transferred to the City, it
Provided, however, That the power of eminent domain may is non sequitur for petitioners to claim that they are
not be exercised unless a valid and definite offer has been automatically entitled to be beneficiaries thereof. For
previously made to the owner, and such offer was not certain requirements must be met and complied with before
accepted: Provided, further, That the local government unit they can be considered to be beneficiaries.
may immediately take possession of the property upon the
filing of the expropriation proceedings and upon making a
deposit with the proper court of at least fifteen percent In another vein, petitioners posit that respondents failed to
(15%) of the fair market value of the property based on the prove that their possession is by mere tolerance. This too
current tax declaration of the property to be expropriated: fails. Apropos is the ruling in Calubayan v. Pascual:14
Provided, finally, That the amount to be paid for the
expropriated property shall be determined by the proper In allowing several years to pass without requiring the
court, based on the fair market value of the property. occupant to vacate the premises nor filing an action to eject
him, plaintiffs have acquiesced to defendant’s possession
Lintag v. National Power Corporation11 clearly outlines the and use of the premises. It has been held that a person who
stages of expropriation, viz: occupies the land of another at the latter’s tolerance or
permission, without any contract between them,
is necessarily bound by an implied promise that he will
Expropriation of lands consists of two stages: vacate upon demand, failing which a summary action for
ejectment is the proper remedy against them. The status of
The first is concerned with the determination of the the defendant is analogous to that of a lessee or tenant
authority of the plaintiff to exercise the power of eminent whose term of lease has expired but whose occupancy
domain and the propriety of its exercise in the context of continued by tolerance of the owner. In such a case, the
the facts involved in the suit. It ends with an order, if not of unlawful deprivation or withholding of possession is to be
dismissal of the action, "of condemnation declaring that the counted from the date of the demand to vacate. (emphasis
plaintiff has a lawful right to take the property sought to be and underscoring supplied)
condemned, for the public use or purpose described in the
complaint, upon the payment of just compensation to be Respondents bought the lots from Pilipinas Development
determined as of the date of the filing of the complaint x x Corporation in 1983. They stepped into the shoes of the
x. seller with respect to its relationship with petitioners. Even
if early on respondents made no demand or filed no action
The second phase of the eminent domain action is against petitioners to eject them from the lots, they thereby
concerned with the determination by the court of "the just merely maintained the status quo – allowed petitioners’
compensation for the property sought to be taken." This is possession by tolerance.
done by the court with the assistance of not more than three
(3) commissioners x x x .lavvphi1 WHEREFORE, the petition for review is DENIED

It is only upon the completion of these two stages that

expropriation is said to have been completed. The process
is not complete until payment of just compensation.
Accordingly, the issuance of the writ of possession in this
case does not write finis to the expropriation
proceedings. To effectuate the transfer of ownership, it is
necessary for the NPC to pay the property owners the final
just compensation.12 (emphasis and underscoring supplied)

In the present case, the mere issuance of a writ of

possession in the expropriation proceedings did not transfer
ownership of the lots in favor of the City. Such issuance
was only the first stage in expropriation. There is even no
evidence that judicial deposit had been made in favor of
BIBLIA TOLEDO-BANAGA and JOVITA Meanwhile, on January 7, 1993, petitioner Banaga sold the
TAN, petitioners,  subject property to petitioner Tan with the deed of absolute
vs. sale mentioning private respondent's certificate of title
COURT OF APPEALS and CANDELARIO which was not yet cancelled. Notwithstanding the notice
DAMALERIO, respondents. of lis pendens, petitioner Tan subdivided the property in
question under a subdivision plan, which she made not in
her name but in the name of private respondent. There
being no preliminary injunction issue and with the
expiration of the TRO, petitioner Tan asked the Register of
Deeds to issue new titles in her name. On March 24, 1993,
MARTINEZ, J.: such titles were issued in petitioner Tan's name but it still
carried the annotations of the two notices of lis pendens.
Upon learning of the new title of petitioner Tan, private
The Court of Appeals (CA), in a decision penned by then respondent impleaded the former in his petition in CA-G.R.
justice Richard Francisco, 1 categorically declared private No. 29869.
respondent as the absolute owner of the land subject of this
case. That decision was affirmed by this Court, became
final and executory and was remanded to the lower court On October 28, 1993, the CA set aside the August 7, 1992
for execution. But the Register of Deeds frustrated private and January 4, 1993 orders of the trial court and declared
respondent's judicially determined right as it refused to private respondent absolute owner of the subject property
issue Certificates of Title in his name on the ground that the the CA disposed of the petition as follows:
matter should be referred "en consulta" to the Register of
Deeds before petitioner's title can be canceled and a new WHEREFORE, in view of the
one issued in the name of the winning party — herein foregoing considerations, the instant
private respondent. So, for the third time, this simple petition is hereby GRANTED. The
redemption case which commenced in the 1980's is again order issued by public respondent judge
before this Court. dated August 7, 1992 and January 4,
1993 are hereby order SET ASIDE and
Here is a summary of the facts, over which there is no a new one is hereby entered declaring
dispute: petitioner as the absolute owner of the
parcels of land subject of redemption
for failure of private respondent to
In an action for redemption filed by petitioner Banaga, the exercise the right of redemption within
trial court declared that she had lost her right to redeem her the thirty (30) days period previously
property earlier foreclosed and which was subsequently granted her by this court. 7
sold at public auction to private respondent 2Certificates of
Title covering the said property were issued to private
respondent over which petitioner Banaga annotated on That decision became final and executory after petitioner
March 3, 1983 a notice of lis pendens. 3 On appeal by Banaga's petition for review was dismissed by this Court
petitioner Banaga, the CA reversed the decision of the trial for lack of merit.8 Upon motion of private respondent, the
court and allowed the former to redeem the property within trial court issued a writ of execution on December 27, 1994
a certain period.4 Private respondent's petition to this Court ordering the Register of Deeds to reinstate the Certificates
was dismissed5 and the decision became final. of Title in the name of the movant — herein private
respondent. In its order which petitioners did not contest,
the court a quo said that:
On June 11, 1992 petitioner Banaga tried to redeem the
property by depositing with the trial court the amount of
redemption which was financed by her co-petitioner Tan. Although there is no specific
Private respondent opposed the redemption arguing that it pronouncement in the decision of the
was made beyond the time given to her by the court in the Court of Appeals that reverts the titles
earlier case However, the lower court issued an order on to the land subjects of redemption to
August 7, 1992 upholding the redemption and ordered the the defendant, the fact that it declared
Register of Deeds to cancel private respondent's the petioner (Damalerio) as the
Certificates of Title and issue new titles in the name of absolute owner of the lands entitles him
petitioner Banaga6 When his motion for reconsideration to writ of execution issuing from this
was denied by the trial court in an order dated January 4, court directing the Register of Deeds to
1993, private respondent filed a petition for certiorari with reinstate his titles to his name. As it is
the CA which was docketed as CA-G.R. No. 29869. On implied from the decision declaring
January 11, 1993, private respondent caused the annotation him the absolute owner of the land be
of said petition as another notice of lis pendens on the reverted to him (See Uy v. Capulong,
Certificates of Title. Three days later, the CA issued a 221, SCRA 87).
temporary restraining order to enjoin the execution of the
August 7, 1992 and January 4, 1993 orders.
 Let therefore a writ of execution issue Upon denial by the CA of their motion for reconsideration,
in this case to enforce the decision of petitioners filed the instant petition
the Court of Appeals. In this for certiorari and mandamus. The Court, however, is
connection, the Register of Deeds of puzzled why petitioners, in their petition, would seek to set
the Registry of Deeds for General aside the two orders (January 4, 1995 and March 29, 1996)
Santos City is hereby ordered to of "respondent judge" who was not named in their
reinstate the title of Candelario B. petition.13 Assuming this be a mere lapsus since they also
Damalerio — Transfer Certificates of confusingly refer to Banaga and Tan as "private
Title No. T-19570 and T-19571, both respondent" and to Damalerio as "petitioner",14 the petition
of the Registry of Deeds from General is still utterly without merit. It is petitioners' stand (1) that
Santos City.9 petitioner Tan is a buyer in god faith and (2) that the
remedy of private respondent to secure the titles in his
But the Register of Deeds refused to comply with the writ name is by consulta to the Land Registration Commissioner
of execution alleging that the Certificates of Title issued to and not through contempt.
petitioner Tan must first be surrendered. Accordingly,
private respondent moved to cite the Register of Deeds in The Court is not convinced of the arguments proffered by
contempt of court which was denied, as the trial court ruled petitioners.
on January 11, 1995 that the former's remedy is
by consulta to the Commissioner of Land Registration.10 In By arguing that petitioner Tan was a buyer in good faith,
another order (dated March 29, 1996) the trial court petitioners in effect raise once more the issue of ownership
likewise denied private respondent's motion for the of the subject property. But such issue had already been
issuance of a writ of possession ruling that the latter's clearly and categorically ruled upon by the CA and
remedy is a separate action to declare petitioner Tan's affirmed by this Court, wherein private respondent was
Certificates of Title void. Aggrieved, private respondent adjudged the rightful and absolute owner thereof. The
again elevated the case to the CA via a petition decision in that case bars a further repeated consideration
for certiorari and mandamus  11 assailing the above- of the very same issue that has already been settled with
mentioned two orders of the court a quo naming as finality. To once again re-open that issue through a
respondents the trial court judge, the Register of Deeds and different avenue would defeat the existence of our courts as
the petitioners. On November 7, 1996, the CA rendered a final arbiters of legal controversies. Having attained
decision granting the petition and, among others, set aside finality, the decision is beyond review or modification even
the assailed orders of the trial court. The dispositive portion by this Court.15
of the CA decision reads:
Under the principle of res judicata, the Court and the
WHEREFORE, in view of all the parties, are bound by such final decision, otherwise, there
foregoing considerations, the petition is will be no end to litigation. It is to the interest of the public
GRANTED. Judgment is hereby that there should be an end to litigation by the parties over a
rendered: subject fully and fairly adjudicated, and an individual
should not be vexed twice for the same cause. 16 All the
1. setting aside the orders of the elements of res judicata are present in this case, which are:
respondent judge dated January 11,
1995 and March 29, 1996; a. the former judgment must be final;
2. declaring the title issued to Biblia b. the court which rendered judgment had
Toledo-Banaga, Jovita Tan and to those jurisdiction over the parties and the
other subsequent transferee or subject matter;
transferees, if any, as null and void; c. it must be a judgment on the merits;
3. ordering the Register of Deeds of
General Santos City to issue a new d. and there must be between the first and
certificates of title to Candelario second actions identity of parties,
Damalerio over the parcels of land in subject matter, and cause of action.17
question;
4. ordering the respondent court to issue The judgment in the redemption suit had long become final
writ of execution for the enforcement and executory; there is no question that the court had
of this decision and of the decision in jurisdiction over the parties and the subject matter; it
CA-G.R. SP No. 29868 (sic), as well as involves an adjudication on the merits of the case as the
writ of possession for the delivery to court discussed and passed upon petitioner Banaga's right
petitioner Damalerio of the Physical of redemption which she did not timely exercise and as a
possession of the parcels of land consequence, lost her claim of ownership of the lot. Both
subject matter of this case. petitioners and private respondent are parties to the earlier
cases, disputing the same parcel of land with both opposing
SO ORDERED. 12 parties claiming ownership thereof. Certainly, res
judicata had set in. Besides, once judgment had become
final and executory, it can no longer distributed no matter enforcement of a final and executory decision, they should
how erroneous it may be. In any case, no such error was have secured the issuance of a writ of preliminary
attributed to in this case. injunction,25 but which they did not avail knowing that
there exists no legal or even equitable justifications to
Contrary to petitioners' argument, private respondent's support it.
remedy is not a direct or independent civil action for
cancellation of petitioner Tan's titles. The facts, At any rate, the time petitioner Banaga sold the property to
circumstances, evidence and arguments invoked in this petitioner Tan, the latter was well aware or the interest of
derailed final and executory decision are the very same private respondent over the lot. Petitioner Tan furnished the
matters that will be established assuming such independent amount used by petitioner Banaga for the attempted
suit is legally warranted. It does not matter whether the redemption. One who redeems in vain a property of another
former case was a redemption suit and the new one will be acquires notice that there could be a controversy. It is for
for cancellation of title because the test of identity of causes the same reason that petitioner Tan was included as party to
of action is not in its form but whether the same evidence the case filed in court. Worse, at the time of the sale,
would support and establish the former and present causes petitioner Tan was buying property not registered in the
of action. 18 seller's name. This clear from the deed of absolute sale
which even mentioned that the Certificates of Title is still
Petitioners other contention that the execution of the final in the name of private respondent. It is settled that a party
and executory decision — which is to issue titles in the dealing with a registered land need not go beyond the
name of private respondent — cannot be compelled Certificate of Title to determine the true owner thereof so
by mandamus because of the "formality" that the registered as to guard or protect her interest. She has only to look and
owner first surrenders her duplicate Certificates of Title for rely on the entries in the Certificate of Title. By looking at
cancellation per Section 80 of Presidential Decree the title, however, petitioner Tan cannot feigned ignorance
152919cited by the Register of Deeds,20 bears no merit. In that the property is registered in private respondent's name
effect, they argue that the winning party must wait and not in the name of the person selling to her. Such fact
execution until the losing party has complied with the alone should have at least prompted, if not impelled her to
formality of surrender of the duplicate title. Such investigate deeper into the title of her seller — petitioner
preposterous contention borders on the absurd and has no Banaga, more so when such effort would not have entailed
place in our legal system. Precisely, the Supreme Court had additional hardship, and would have been quite easy, as the
already affirmed the CA's judgment that Certificates of titles still carried the two notices of lis pendens.
Title be issued in private respondent's name. To file another
action just to compel the registered owner, herein petitioner By virtue of such notices, petitioner Tan is bound by the
Tan, to surrender her titles constitute violation of, if not outcome of the litigation subject of the lis pendens. As a
disrespect to, the orders of the highest tribunal. Otherwise, transferee pendente lite, she stands exactly in. the shoes of
if execution cannot be had just because the losing party will the transferor and must respect any judgment or decree
not surrender her titles, the entire proceeding in the courts, which may be rendered for or against the transferor. Her
not to say the efforts, expenses and time of the parties, interest is subject to the incident or results of the pending
would be rendered nugatory. It is revolting to conscience to suit, and her Certificates of Title will, in that respect, afford
allow petitioners to further avert the satisfaction of their her no special protection.26
obligation because of sheer literal adherence to
technicality,21 or formality of surrender of the duplicate To repeat, at the time of the sale, the person from whom
titles. The surrender of the duplicate is implied from the petitioner Tan bought the property is neither the registered
executory decision since petitioners themselves were owner nor was the former authorized by the latter to sell the
parties thereto. Besides, as part of the execution process, it same. She knew she was not dealing with the registered
is a ministerial function of the Register of Deeds to comply owner or a representative of the latter. One who buys
with the decision of the court to issue a title and register a property with full knowledge of the flaws and defects in the
property in the name of a certain person, especially when title of his vendor is enough proof of his bad faith27 and
the decision had attained finality, as in this case. cannot claim that he acquired title in good faith as against
the owner or of an interest therein.28 When she nonetheless
In addition, the enforcement of final and executory proceeded to buy the lot, petitioner Tan gambled on the
judgment is likewise a ministerial function of the result of litigation.29 She is bound by the outcome of her
courts22 and does not call for the exercise of discretion. indifference with no one to blame except herself if she
Being a ministerial duty, a writ of mandamus lies to compel looses her claim as against one who has a superior right or
its performance.23 Moreover, it is axiomatic that where a interest over the property. These are the undeniable and
decision on the merits is rendered and the same has become unconverted facts found by the CA, which petitioners even
final and executory, as in this case, the action on procedural quote and cite in their petition. As aptly concluded by the
matters or issues becomes moot and academic. 24Thus, the CA that petitioner Tan is indeed a buyer in bad faith on
so-called consulta to the Commissioner of Land which the Court agrees:
Registration, which is not applicable herein, was only a
naive and belated effort resorted to by petitioners in order Notwithstanding her constructive and
to delay execution. If petitioners desire to stop the actual knowledge that Damalerio was
 claiming the land, that the land was in in bad faith does not exempt the latter
his name, and it was involved in from complying with the decision
pending litigation. Jovita Tan bought it adverse to his predecessor in interest,
from Banaga on January 7, 1993. The nor preclude him from being reached
deed of sale recites that the parcels of by writ of execution;
land so I were covered by Transfer
Certificates of Title No. (formerly) [T- 2. Private respondent Tan was a party
12488] T-530) and TCT No. (formerly respondent in CA-G.R. SP No. 29869,
[T-12488] T-530) (sic) "and TCT No. she having been impleaded in a
(formerly P-1294) (Annex "F", supplemental petition, which this Court
Petition). Apart from the fact that gave due course and required the
Banaga was without any TCT, as above respondents to file their answer. The
stated, TCT No. T-12488 was fact that she did not file any pleading,
petitioner's title (Annex "C", Petition). nor intervene therein did not excuse her
Herein private respondent Tan was from being bound by the decision,
buying a land not registered in her otherwise all that a party respondent
seller's (Banaga's) name, but in that was to fold his arm to prevent him from
petitioner Damalerio who had been being bound by a decision in a case.
claiming it as his own. She admitted Her securing titles over the land during
this fact when she had the land the pendency of said case did not
subdivided on February 2, 1993 not in protect her from the effects of said
her name but in the name of Candelario decision. The validity of tile of a
Damalerio (Annex "Q", Reply). purchaser of registered land depends on
Evidently, she was a purchaser in bad whether he had knowledge, actual or
faith because she had full knowledge of constructive, of defects in the title of
the flaws and defects of title of her his vendor. If he has such knowledge,
seller, Banaga . . . . he is a purchaser in bad faith and
acquires the land subject to such
The notice of lis pendens registered on defects (. . . indicates that citations of
March 3, 1993 involving the land in authorities omitted) The title secured
question and private respondent Tan's by a purchaser in bad faith is a nullity
actual knowledge of the then pending and gave the latter no right whatsoever
Civil Case No. 2556, where the as against the owner (. . .).
question as to whether the redemption
of the land which she financed was 3. Private, respondent Tan's titles and
raised, rendered her a purchaser in bad those of her predecessor, Banaga arose
faith and made the decision therein from the void orders of August 7, 1992
binding upon her.30 and January 4, 1993. Since a void order
could not give rise to valid rights, said
Being a buyer in bad faith, petitioner Tan cannot acquire a titles were also necessarily null and
better rights than her predecessor in interest,31 for she void (. . .).
merely stepped into the shoes of the latter. Such finding of
bad faith is final and may not be re-opened for the law 4. Private respondents and respondent
cannot allow the parties to trifle with the courts.32 Judge executed the questioned orders
of August 7, 1993 and January 4, 1993,
With respect to the issue of possession, such right is a pending review of said orders in CA-
necessary incident of ownership.33 The adjudication or G.R. SP No. 29869. The nullification of
ownership to private respondent includes the delivery of said orders by this out imposed upon
possession since the defeated parties in this case has not the private respondents the obligation
shown by what right to retain possession of the land to return the property to Damalerio and
independently of their claim of ownership which was upon respondent Judge, upon motion
rejected.34Otherwise, it would be unjust if petitioners who for execution, to order the cancellation
has no valid right over the property will retain the of private respondents titles and the
same.35 Thus, the CA correctly disagreed with the trial issuance of new titles to him.
court's order denying private respondent's motion for writ
of possession for the following reasons cited in its decision: 5. This Court in its decision in CA-G.R.
SP. No. 29869 declared petitioner
1. The order violates the doctrine laid Damalerio absolute owner of the
down in Javier vs. Court of Appeals, property in question. Private
224 SCRA 704, which ruled that the respondents were parties litigants in
issuance of title in favor of a purchaser said case, who did not claim possession
 of the land separately from their claim
of ownership thereof. Such being the
case, the delivery of possession is
considered included in this Court's
decision declaring Damalerio absolute
owner of the property
(. . .), which can be enforced by writ of
possession (. . .). In denying petitioner's
motion for writ of possession, the trial
court violated said doctrines, and

6. Lastly, the effect of respondent

Judge's order of March 29, 1996 is to
re-open the decision in CA-G.R. SP
No. 29689 for re-litigation and
alteration in a separate action. For
while this Court already declared that
Banaga's redemption of the land
financed by private respondent Tan was
invalid, and as a consequence declared
Damalerio absolute owner of the
property, which was binding against
private respondent Tan, as she was a
respondent therein and a
purchaser pendente lite and in bad
faith, the order of the respondent Court
holding that another civil action be
filed to annul private respondent Tan's
titles would be to re-litigate such issues
and modify or alter this Court's final
decision.

The respondent Court has no authority

to do so.36

WHEREFORE, premises considered, the petition is hereby

DENIED and the assailed decision of the Court of Appeals
is AFFIRMED in toto with costs against petitioners. No
further proceeding will be entertained in this
case.1âwphi1.nêt

SO ORDERED
BERNARDO VALDEVIESO, petitioner, Appeals10and Santos v. Bayhon,11 it held that the levy of the
vs.  property by virtue of attachment is lawful only when the
CANDELARIO DAMALERIO AND AUREA C. levied property indubitably belongs to the defendant.
DAMALERIO, respondents. Applying the rulings in the cited cases, it opined that
although defendant Lorenzo Uy remained the registered
DECISION owner of the property attached, yet the fact was that he was
no longer the owner thereof as it was already sold earlier to
petitioner, hence, the writ of attachment was
CHICO-NAZARIO, J.: unlawful.1awphi1.nét

Before this Court is a Petition for Review under Rule 45 of Respondents sought reconsideration thereof which was
the Rules of Court, seeking to set aside the 25 September denied by the trial court in a resolution dated 03 January
1997 Decision and the 10 February 1998 Resolution of the 1997.12
Court of Appeals in CA-G.R. SP No. 43082 entitled,
"Candelario Damalerio and Aurea Damalerio v.
Honorable Antonio S. Alano, et al."1 From the unfavorable resolution of the trial court in the
third-party claim, respondents appealed to the Court of
Appeals. The appellate court reversed the resolution and by
There is no dispute as to the following facts: judgment promulgated on 25 September 1997, it declared
that an attachment or levy of execution, though posterior to
On 05 December 1995, Bernardo Valdevieso (petitioner) the sale, but if registered before the sale is registered, takes
bought from spouses Lorenzo and Elenita Uy a parcel of precedence over the sale.13 The writ of attachment in favor
land consisting of 10,000 square meters, more or less, of the respondents, being recorded ahead of the sale to
located at Bo. Tambler, General Santos City, and covered petitioner, will therefore take precedence.
by Transfer Certificate of Title (TCT) No. T-30586.2
Petitioner moved for reconsideration but this was denied by
The deed of sale was not registered, nor was the title of the the Court of Appeals in its Resolution of 10 February
land transferred to petitioner.3 1998.14

On 07 December 1995, the said property was immediately Hence, this Petition for Review on Certiorari.
declared by petitioner for taxation purposes as Tax
Declaration No. l6205 with the City Assessor’s Office.4 The sole issue in this case is whether or not a registered
writ of attachment on the land is a superior lien over that of
It came to pass that on 19 April 1996, spouses Candelario an earlier unregistered deed of sale.
and Aurea Damalerio (respondents) filed with the Regional
Trial Court (RTC) of General Santos City, a complaint for Petitioner maintains that he has a superior right over the
a sum of money against spouses Lorenzo and Elenita Uy questioned property because when the same was attached
docketed as Civil Case No. 5748 with application for the on 23 April 1996, this property was no longer owned by
issuance of a Writ of Preliminary Attachment.5 spouses Uy against whom attachment was issued as it was
already sold to petitioner on 05 December 1995. The
On 23 April 1996, the trial court issued a Writ of ownership thereof was already transferred to petitioner
Preliminary Attachment by virtue of which the property, pursuant to Article 147715 in relation to Article 149816 of the
then still in the name of Lorenzo Uy but which had already Civil Code.
been sold to petitioner, was levied. The levy was duly
recorded in the Register of Deeds of General Santos City Dismissing the allegation that he slept on his rights by not
and annotated upon TCT No. T-30586.6 immediately registering at least an adverse claim based on
his deed of sale, petitioner avers that he promptly worked
On 06 June 1996, TCT No. T-30586 in the name of out for the transfer of registration in his name. The slight
Lorenzo Uy was cancelled and, in lieu thereof, TCT No. T- delay in the registration, he claims was not due to his fault
74439 was issued in the name of petitioner.7 This new TCT but attributable to the process involved in the registration of
carried with it the attachment in favor of respondents. property such as the issuance of the Department of
Agrarian Reform clearance which was effected only after
On 14 August 1996, petitioner filed a third-party claim in compliance with several requirements.1awphi1.nét
Civil Case No. 5748 to discharge or annul the attachment
levied on the property covered by TCT No. T-74439 on the Considering the peculiar facts and circumstances obtaining
ground that the said property belongs to him and no longer in this case, petitioner submits it would be in accord with
to Lorenzo and Elenita Uy.8 justice and equity to declare him as having a superior right
to the disputed property than the respondents.
In a resolution dated 21 October 1996, the trial court ruled
for the petitioner.9 Citing Manliguez v. Court of
Respondents maintain the contrary view. They aver that from the spouses Uy to him. Insofar as third persons are
registration of a deed of sale is the operative act which concerned, what validly transfers or conveys a person’s
binds the land and creates a lien thereon. Before the interest in real property is the registration of the deed. Thus,
registration of the deed, the property is not bound insofar as when petitioner bought the property on 05 December 1995,
third persons are concerned. Since the writ of attachment in it was, at that point, no more than a private transaction
favor of respondents was registered earlier than the deed of between him and the spouses Uy. It needed to be registered
sale to petitioner, respondents were of the belief that their before it could bind third parties, including respondents.
registered writ of attachment on the subject property enjoys When the registration finally took place on 06 June 1996, it
preference and priority over petitioner’s earlier unregistered was already too late because, by then, the levy in favor of
deed of sale over the same property. They also contend that respondents, pursuant to the preliminary attachment
Articles 1477 and 1498 of the Civil Code as cited by ordered by the General Santos City RTC, had already been
petitioner are not applicable to the case because said annotated on the title.
provisions apply only as between the parties to the deed of
sale. These provisions do not apply to, nor bind, third The settled rule is that levy on attachment, duly registered,
parties, like respondents, because what affects or binds takes preference over a prior unregistered sale.17 This result
third parties is the registration of the instrument in the is a necessary consequence of the fact that the property
Register of Deeds. Furthermore, respondents argue that involved was duly covered by the Torrens system which
petitioner cannot invoke equity in his favor unless the works under the fundamental principle that registration is
following conditions are met: (a) the absence of specific the operative act which gives validity to the transfer or
provision of a law on the matter; and (b) if the person who creates a lien upon the land.18
invokes it is not guilty of delay. Both conditions have not
been met, however, since there is a law on the subject
matter, i.e., Section 51 of Presidential Decree No. 1529, The preference created by the levy on attachment is not
and that petitioner allegedly slept on his rights by not diminished even by the subsequent registration of the prior
immediately registering an adverse claim based on his deed sale. This is so because an attachment is a proceeding in
of sale. rem.19 It is against the particular property, enforceable
against the whole world. The attaching creditor acquires a
specific lien on the attached property which nothing can
We agree with the respondents. subsequently destroy except the very dissolution of the
attachment or levy itself.20 Such a proceeding, in effect,
The law applicable to the facts of this case is Section 51 of means that the property attached is an indebted thing and a
P.D. No. 1529. Said Section provides: virtual condemnation of it to pay the owner’s debt.21 The
lien continues until the debt is paid, or sale is had under
Sec. 51. Conveyance and other dealings by registered execution issued on the judgment, or until the judgment is
owner. - An owner of registered land may convey, satisfied, or the attachment discharged or vacated in some
mortgage, lease, charge, or otherwise deal with the same in manner provided by law.
accordance with existing laws. He may use such forms of
deeds, mortgages, leases or other voluntary instruments as Thus, in the registry, the attachment in favor of respondents
are sufficient in law. But no deed, mortgage, lease, or other appeared in the nature of a real lien when petitioner had his
voluntary instrument, except a will purporting to convey or purchase recorded. The effect of the notation of said lien
affect registered land, shall take effect as a conveyance or was to subject and subordinate the right of petitioner, as
bind the land, but shall operate only as a contract between purchaser, to the lien. Petitioner acquired ownership of the
the parties and as evidence of authority to the Register of land only from the date of the recording of his title in the
Deeds to make registration. register, and the right of ownership which he inscribed was
not absolute but a limited right, subject to a prior registered
The act of registration shall be the operative act to convey lien of respondents, a right which is preferred and superior
or affect the land insofar as third persons are concerned, to that of petitioner.22
and in all cases under this Decree, the registration shall be
made in the office of the Register of Deeds for the province Anent petitioner’s reliance on the rulings laid down
or city where the land lies. in Manliguez v. Court of Appeals and Santos v. Bayhon, we
find the same to be misplaced. These cases did not deal at
It is to be noted that though the subject land was deeded to all with the dilemma at hand, i.e. the question of whether or
petitioner as early as 05 December 1995, it was not until 06 not a registered writ of attachment on land is superior to
June 1996 that the conveyance was registered, and, during that of an earlier unregistered deed of sale. In Santos, what
that interregnum, the land was subjected to a levy on was involved were machinery and pieces of equipment
attachment. It should also be observed that, at the time of which were executed upon pursuant to the favorable ruling
the attachment of the property on 23 April 1996, the of the National Labor Relations Commission. A third party
spouses Uy were still the registered owners of said claimed that the machinery were already sold to her, but it
property. Under the cited law, the execution of the deed of does not appear in the facts of the case if such sale was ever
sale in favor of petitioner was not enough as a succeeding registered.l^vvphi1.net Manliguez is similar to Santos,
step had to be taken, which was the registration of the sale except that the former involved buildings and
improvements on a piece of land. To stress, in both cited
cases, the registration of the sale, if any, of the subject
properties was never in issue.1awphi1.nét

As to petitioner’s invocation of equity, we cannot, at this

instance, yield to such principle in the presence of a law
clearly applicable to the case. We reiterate that this Court,
while aware of its equity jurisdiction, is first and foremost,
a court of law.23 While equity might tilt on the side of one
party, the same cannot be enforced so as to overrule
positive provisions of law in favor of the other.24 Equity
cannot supplant or contravene the law.25 The rule must
stand no matter how harsh it may seem. Dura lex sed lex.

WHEREFORE, the appealed Decision of the Court of

Appeals in CA-G.R. SP No. 43082 dated 25 September
1997, and its Resolution dated 10 February 1998, are
hereby AFFIRMED. No costs.

SO ORDERED
ARLYN* PINEDA, Petitioner,  motion to set aside Pineda’s Affidavit of Title and Third
vs. Party Claim, which on 3 November 1999, the Quezon City
JULIE C. ARCALAS, Respondent. RTC granted, to wit:

DECISION [Arcalas] showed that her levies on the properties were

duly registered while the alleged Deed of Absolute Sale
CHICO-NAZARIO, J.: between the defendant Victoria L. Tolentino and Analyn G.
Pineda was not. The levies being superior to the sale
claimed by Ms. Pineda, the court rules to quash and set
This is a Special Civil Action for Certiorari under Rule 65 aside her Affidavit of Title and Third Party Claim.
of the Rules of Court, assailing the Resolution1 dated 25
January 2005, rendered by the Court of Appeals in C.A.
G.R. CV No. 82872, dismissing the appeal filed by ACCORDINGLY, the motion is granted. The Affidavit of
petitioner Arlyn Pineda (Pineda) for failure to file her Title and Third-Party Claim is set aside to allow
appellant’s brief. Under the assailed Resolution, the completion of execution proceedings.8
Order2promulgated by Branch 27 of the Regional Trial
Court of Santa Cruz, Laguna (Laguna RTC), on 2 February On 2 February 2000, after the finality9 of the Order of the
2004, granting the petition of respondent Julie Arcalas Quezon City RTC quashing Pineda’s third-party claim,
(Arcalas) for the cancellation of the Affidavit of Adverse Pineda filed with the Office of the Register of Deeds of
Claim annotated at the back of Transfer Certificate of Title Laguna another Affidavit of Third Party Claim and caused
(TCT) No. T-52319 under Entry No. 324094, became final. the inscription of a notice of adverse claim at the back of
TCT No. T-52319 under Entry No. 324094. 10
The subject property consists of three parcels of land,
which are described as Lot No. 3762-D with an area of On 3 February 2000, Arcalas and Leonardo Byron P. Perez,
42,958 square meters, Lot No. 3762-E with an area of Jr. purchased Lot No. 3762 at an auction sale conducted by
4,436 square meters, and Lot No. 3762-F with an area of the Deputy Sheriff of Quezon City. The sale was evidenced
2,606 square meters, the total area of which consists of by a Sheriff’s Certificate of Sale issued on the same day
50,000 square meters. These three lots are portions of Lot and registered as Entry No. 324225 at the back of TCT No.
No. 3762, registered in the name of Spouses Mauro Lateo T-52319.11
and Encarnacion Evangelista (spouses Lateo) under TCT
No. T-52319, with a total area of 74,708 square meters, Arcalas then filed an action for the cancellation of the entry
located at Barrios Duhat and Labuin, Santa Cruz, Laguna. of Pineda’s adverse claim before the Laguna RTC. The
A certain Victoria Tolentino bought the said property from Laguna RTC ordered the cancellation of the Notice of
the Spouses Lateo. Sometime later, Civil Case No. Q-96- Adverse Claim annotated as Entry No. 324094 at the back
27884, for Sum of Money, was instituted by Arcalas of TCT No. 52319 on the ground of res judicata:
against Victoria Tolentino. This case stemmed from an
indebtedness evidenced by a promissory note and four post-
dated checks later dishonored, which Victoria Tolentino The court order emanating from Branch 91 of the Regional
owed Arcalas.3 Trial Court of Quezon City having become final and
executory and no relief therefrom having been filed by
[Pineda], the said order granting the [Arcalas’s] "Motion to
On 9 September 1997, Branch 93 of the Quezon City RTC, Set Aside Affidavit of Title and 3rd Party Claim" should be
rendered judgment in favor of Arcalas and against Victoria given due course and the corresponding annotation at the
Tolentino.4 back of TCT No. T-52319 as Entry No. 324094 dated
February 2, 2000 should be expunged accordingly.12
On 15 December 1997, Pineda bought the subject property
from Victoria L. Tolentino.5 Pineda alleged that upon Pineda appealed the Order of the Laguna RTC before the
payment of the purchase price, she took possession of the Court of Appeals under Rule 44 of the Rules of Court. In a
subject property by allowing a tenant, Rodrigo Bautista to Resolution dated 25 January 2005,13 the appellate court
cultivate the same. However, Pineda failed to register the dismissed the appeal and considered it abandoned when
subject property under her name.6 Pineda failed to file her appellant’s brief.

To execute the judgment, the Quezon City RTC levied Pineda filed a Motion for Reconsideration, wherein it was
upon the subject property and the Notice of Levy on Alias plainly stated that Pineda’s counsel overlooked the period
Writ of Execution dated 12 January 1999 was annotated as within which he should file the appellant’s brief.14 The said
Entry No. 315074, in relation to Entry No. 319362, at the motion was denied in a Resolution dated 26 May 2005.
back of TCT No. T-52319.7 Pineda filed a Second Motion for Reconsideration, which
was denied on 7 October 2005.15 No appellant’s brief was
Asserting ownership of the subject property, Pineda filed attached to either motion for reconsideration.
with the Deputy Sheriff of the Quezon City RTC an
Affidavit of Title and Third Party Claim. Arcalas filed a Hence, the present Petition raising the following issues:16
 I. Section 1. Grounds for dismissal of appeal. - An appeal
may be dismissed by the Court of Appeals, on its own
WHETHER THE LEVY ON ALIAS WRIT OF motion or on that of the appellee, on the following grounds:
EXECUTION ISSUED BY THE REGIONAL
TRIAL COURT OF QUEZON CITY IN CIVIL xxxx
CASE NO. Q-96-27884 MAY EXEMPT THE
PORTION BOUGHT BY [PINEDA] FROM (e) Failure of the appellant to serve and file the required
VICTORIA TOLENTINO; [and] number of copies of his brief or memorandum within the
time provided by these Rules;
II.
This Court provided the rationale for requiring an
WHETHER THE POSSESSION OF [PINEDA] appellant’s brief in Enriquez v. Court of Appeals17 :
OF THE 5 HECTARES PORTION OF LOT
3762 IS ALREADY EQUIVALENT TO A [T]he appellant’s brief is mandatory for the assignment of
TITLE DESPITE THE ABSENCE OF errors is vital to the decision of the appeal on the merits.
REGISTRATION. This is because on appeal only errors specifically assigned
and properly argued in the brief or memorandum will be
This petition must be dismissed. considered, except those affecting jurisdiction over the
subject matter as well as plain and clerical errors.
The Court of Appeals properly dismissed the case for Otherwise stated, an appellate court has no power to
Pineda’s failure to file an appellant’s brief. This is in resolve an unassigned error, which does not affect the
accordance with Section 7 of Rule 44 of the Rules of Court, court’s jurisdiction over the subject matter, save for a plain
which imposes upon the appellant the duty to file an or clerical error.
appellant’s brief in ordinary appealed cases before the
Court of Appeals, thus: Thus, in Casim v. Flordeliza,18 this Court affirmed the
dismissal of an appeal, even when the filing of an
Section 7. Appellant’s brief.—It shall be the duty of the appellant’s brief was merely attended by delay and fell
appellant to file with the court, within forty-five (45) days short of some of the requirements of the Rules of Court.
from receipt of the notice of the clerk that all the evidence, The Court, in Gonzales v. Gonzales,19 reiterated that it is
oral and documentary, are attached to the record, seven (7) obligatory on the part of the appellant to submit or file a
copies of his legibly typewritten, mimeographed or printed memorandum of appeal, and that failing such duty, the
brief, with proof of service of two (2) copies thereof upon Rules of Court unmistakably command the dismissal of the
the appellee. appeal.

In special cases appealed to the Court of Appeals, such as In this case, Pineda did not even provide a proper
certiorari, prohibition, mandamus, quo warranto and habeas justification for her failure to file her appellant’s brief. It
corpus cases, a memorandum of appeal must be filed in was merely alleged in her Motion for Reconsideration that
place of an appellant’s brief as provided in Section 10 of her counsel overlooked the period within which to file the
Rule 44 of the Rules of Court appellant’s brief. Although Pineda filed no less than two
motions for reconsideration, Pineda had not, at any time,
made any attempt to file her appellant’s brief. Nor did she
Section 10. Time of filing memoranda in special cases.—In supply any convincing argument to establish her right to
certiorari, prohibition, mandamus, quo warranto and habeas the subject property for which she seeks vindication.
corpus cases, the parties shall file, in lieu of briefs, their
respective memoranda within a non-extendible period of
thirty (30) days from receipt of the notice issued by the Thus, this Court cannot reverse or fault the appellate court
clerk that all the evidence, oral and documentary, is already for duly acting in faithful compliance with the rules of
attached to the record. procedure and established jurisprudence that it has been
mandated to observe, nor turn a blind eye and tolerate the
transgressions of these rules and doctrines.20 An appealing
The failure of the appellant to file his memorandum within party must strictly comply with the requisites laid down in
the period therefor may be a ground for dismissal of the the Rules of Court since the right to appeal is a purely
appeal. statutory right.21

Non-filing of an appellant’s brief or a memorandum of Even when this Court recognized the importance of
appeal is one of the explicitly recognized grounds of deciding cases on the merits to better serve the ends of
dismissal of the appeal in Section 1 of Rule 50 of the Rules justice, it has stressed that the liberality in the application
of Court: of rules of procedure may not be invoked if it will result in
the wanton disregard of the rules or cause needless delay in
the administration of justice.22 The Court eyes with disfavor
the unjustified delay in the termination of cases; once a are sufficient in law. But no deed, mortgage, lease, or other
judgment has become final, the winning party must not be voluntary instrument, except a will purporting to convey or
deprived of the fruits of the verdict, through a mere affect registered land shall take effect as a conveyance or
subterfuge. The time spent by the judiciary, more so of this bind the land, but shall operate only as a contract between
Court, in taking cognizance and resolving cases is not the parties and as evidence of authority to the Register of
limitless and cannot be wasted on cases devoid of any right Deeds to make registration.
calling for vindication and are merely reprehensible efforts
to evade the operation of a decision that is final and The act of registration shall be the operative act to convey
executory.23 or affect the land insofar as third persons are concerned,
and in all cases under this Decree, the registration shall be
In the present case, there is a clear intent on the part of made in the office of the Register of Deeds for the province
Pineda to delay the termination of the case, thereby or the city where the land lies. (Emphasis provided.)
depriving Arcalas of the fruits of a just verdict. The Quezon
City RTC already quashed Pineda’s third party claim over Section 52. Constructive notice upon registration.—Every
the subject property, yet she filed another adverse claim conveyance, mortgage, lease, lien, attachment, order,
before the Office of the Register of Deeds of Laguna based judgment, instrument or entry affecting registered land
on the same allegations and arguments previously settled shall, if registered, filed or entered in the office of the
by the Quezon City RTC. Arcalas, thus, had to file another Register of Deeds for the province or city where the land to
case to cause the cancellation of Pineda’s notice of adverse which it relates lies, be constructive notice to all persons
claim on TCT No. T-52319 before the Laguna RTC. After from the time of such registering, filing or entering.
the Laguna RTC gave due course to Arcalas’s petition, (Emphasis provided.)
Pineda filed a dilatory appeal before the Court of Appeals,
where she merely let the period for the filing of the
appellant’s brief lapse without exerting any effort to file It is clear from these provisions that before a purchaser of
one. The two motions for reconsideration and even the land causes the registration of the transfer of the subject
petition before this Court fail to present new issues. They property in her favor, third persons, such as Arcalas, cannot
raised the very same issues which had been consistently be bound thereby. Insofar as third persons are concerned,
resolved by both the Quezon City RTC and the Laguna what validly transfers or conveys a person’s interest in real
RTC in favor of Arcalas, upholding the superiority of her property is the registration of the deed. As the deed of sale
lien over that of Pineda’s unregistered sale. Considering all was unrecorded, it operates merely as a contract between
these circumstances, there is no basis for the lenient the parties, namely Victoria Tolentino as seller and Pineda
application of procedural rules in this case; otherwise, it as buyer, which may be enforceable against Victoria
would result in a manifest injustice and the abuse of court Tolentino through a separate and independent action. On
processes. the other hand, Arcalas’s lien was registered and annotated
at the back of the title of the subject property and
accordingly amounted to a constructive notice thereof to all
As a rule, the negligence or mistake of counsel binds the persons, whether or not party to the original case filed
client.24 The only exception to this rule is when the before the Quezon City RTC.
counsel’s negligence is so gross that a party is deprived of
due process and, thus, loses life, honor or property on mere
technicalities.25 The exception cannot apply to the present The doctrine is well settled that a levy on execution duly
case, where Pineda is merely repeating arguments that were registered takes preference over a prior unregistered
already heard and decided upon by courts of proper sale.26 A registered lien is entitled to preferential
jurisdiction, and the absolute lack of merit of the petition is consideration.27 In Valdevieso v. Damalerio,28 the Court
at once obvious.1âwphi1 held that a registered writ of attachment was a superior lien
over that on an unregistered deed of sale and explained the
reason therefor:
Pineda avers that she is not a party to Civil Case No. Q-96-
27884, heard before the Quezon City RTC, and that the
levy on the alias writ of execution issued in Civil Case No. This is so because an attachment is a proceeding in rem. It
Q-96-27884 cannot affect her purchase of subject property. is against the particular property, enforceable against the
Such position runs contrary to law and jurisprudence. whole world. The attaching creditor acquires a specific lien
on the attached property which nothing can subsequently
destroy except the very dissolution of the attachment or
Sections 51 and 52 of Presidential Decree No. 1529, levy itself. Such a proceeding, in effect, means that the
otherwise known as the Property Registration Decree, property attached is an indebted thing and a virtual
provide that: condemnation of it to pay the owner’s debt. The lien
continues until the debt is paid, or sale is had under
Section 51. Conveyance and other dealings by registered execution issued on the judgment, or until the judgment is
owner.—An owner of registered land may convey, satisfied, or the attachment discharged or vacated in some
mortgage, lease, charge or otherwise deal with the same in manner provided by law.
accordance with existing laws. He may use such forms of
deeds, mortgages, leases or other voluntary instruments as
Thus, in the registry, the attachment in favor of respondent
appeared in the nature of a real lien when petitioner had his
purchase recorded. The effect of the notation of said lien
was to subject and subordinate the right of petitioner, as
purchaser, to the lien. Petitioner acquired ownership of the
land only from the date of the recording of his title in the
register, and the right of ownership which he inscribed was
not absolute but a limited right, subject to a prior registered
lien of respondent, a right which is preferred and superior
to that of petitioner.

Pineda also contends that her possession of the subject

property cures the defect caused by her failure to register
the subject property in her name. This contention is
inaccurate as well as inapplicable.

True, that notwithstanding the preference given to a

registered lien, this Court has made an exception in a case
where a party has actual knowledge of the claimant’s
actual, open, and notorious possession of the disputed
property at the time the levy or attachment was registered.
In such situations, the actual notice and knowledge of a
prior unregistered interest, not the mere possession of the
disputed property, was held to be equivalent to
registration.29

Lamentably, in this case, Pineda did not even allege, much

less prove, that Arcalas had actual knowledge of her claim
of ownership and possession of the property at the time the
levy was registered. The records fail to show that Arcalas
knew of Pineda’s claim of ownership and possession prior
to Pineda’s filing of her third party claim before the
Quezon City RTC. Hence, the mere possession of the
subject property by Pineda, absent any proof that Arcalas
had knowledge of her possession and adverse claim of
ownership of the subject property, cannot be considered as
equivalent to registration.

IN VIEW OF THE FOREGOING, the instant Petition is

DISMISSED and the assailed Decision of the Court of
Appeals in C.A. G.R. CV No. 82872, promulgated on 25
January 2005, is AFFIRMED. The Order of Branch 27 of
the Regional Trial Court of Sta. Cruz, Laguna, directing the
Register of Deeds of Laguna to cancel the Notice of
Adverse Claim inscribed at the back of TCT No. T-52319
as Entry No. 324094 is SUSTAINED. No costs.

SO ORDERED
J. CASIM CONSTRUCTION SUPPLIES, Date of inscription - Aug. 5, 1981 - 2:55 p.m.
INC., Petitioner, 
vs. (Sgd) VICTORIANO S. TORRES, Actg. Reg. of
REGISTRAR OF DEEDS OF LAS PIÑAS, Respondent. Deeds
INTESTATE ESTATE OF BRUNEO F.
CASIM, (Purported) Intervenor.
Entry No. 82-4676/T-49936 - CANCELLATION OF
ADVERSE CLAIM inscribed hereon under Entry No. 81-
DECISION 8334/T-30459 in accordance with Doc. No. 247; Page 50;
Book No. CXLI; s. of 1982 of Not. Pub. of Pasay City,
PERALTA, J.: M.M., Julian G. Tubig, dated April 21, 1982.

This is a petition for review under Rule 45 of the Rules of Date of inscription - April 21, 1982 - 8:40 a.m.
Court, taken directly on a pure question of law from the
April 14, 2005 Resolution1 and June 24, 2005 Order2 issued (Sgd) VICTORIANO S. TORRES, Actg. Reg. of
by the Regional Trial Court (RTC) of Las Piñas City, Deeds
Branch 253 in Civil Case No. LP-04-00713  one for
cancellation of notice of lis pendens. The assailed
Resolution dismissed for lack of jurisdiction the petition Entry No. 82-4678/T-49936 - AFFIDAVIT - In accordance
filed by J. Casim Construction Supplies Inc. for with the affidavit duly executed by the herein registered
cancellation of notice of lis pendens annotated on its owners, this title is hereby cancelled and in lieu thereof
certificate of title, whereas the assailed Order denied TCT No. 49936/T-228 has been issued in accordance with
reconsideration. Doc. No. 249; Page No. 80; Book No. CXLI; s. of 1982 of
Not. Pub. of Pasay City, M.M., Julian G. Tubig, dated April
21, 1982.
The facts follow.
Date of inscription - April 21, 1982 - 8:44 a.m.
Petitioner, represented herein by Rogelio C. Casim, is a
duly organized domestic corporation4 in whose name
Transfer Certificate of Title (TCT) No. 49936,5 covering a (Sgd) VICTORIANO S. TORRES, Actg. Reg. of
10,715-square meter land was registered. Sometime in Deeds
1982, petitioner acquired the covered property by virtue of
a Deed of Absolute Sale6 and as a result the mother title, Entry No. 81-12423/T-30459 - NOTICE OF LIS
TCT No. 30459 was cancelled and TCT No. 49936 was PENDENS: By virtue of the notice of Lis Pendens
issued in its stead.7 presented and filed by CESAR P. MANALAYSAY,
counsel for the plaintiff, notice is hereby given that a
On March 22, 2004, petitioner filed with the RTC of Las petition for review has been commenced and now pending
Piñas City, Branch 253 an original petition for the in the Court of First Instance of Rizal, Branch XXIX,
cancellation of the notice of lis pendens, as well as of all Pasay, M.M, in Civil Case No. LP-9438-P, BRUNEO F.
the other entries of involuntary encumbrances annotated on CASIM, Plaintiff, vs. SPS. JESUS A. CASIM &
the original copy of TCT No. 49936. Invoking the inherent MARGARITA CHAVEZ and Sps. Urbano Nobleza and
power of the trial court to grant relief according to the Cristita J. Nobleza, and Filomena C. Antonio, Defendants,
petition, petitioner prayed that the notice of lis pendens as involving the property described herein.
well as all the other annotations on the said title be
cancelled. Petitioner claimed that its owner's duplicate copy Date of the instrument - Sept. 17, 1981
of the TCT was clean at the time of its delivery and that it
was surprised to learn later on that the original copy of its Date of the inscription - Sept. 18, 1981 - 3:55
TCT, on file with the Register of Deeds, contained several p.m.
entries which all signified that the covered property had
been subjected to various claims. The subject notice of lis
pendens is one of such entries.8 The notations appearing on (Sgd) VICTORIANO S. TORRES, Actg. Reg. of
the title's memorandum of encumbrances are as follows: Deeds9

Entry No. 81-8334/T-30459 - ADVERSE CLAIM - In an To justify the cancellation, petitioner alleged that the notice
affidavit duly subscribed and sworn to, BRUNO F. CASIM of lis pendens, in particular, was a forgery judging from the
claims, among other things, that he has the right and inconsistencies in the inscriber's signature as well as from
interest over the property described herein in accordance the fact that the notice was entered non-chronologically,
with Doc. No. 336; Page No. 69; Book No. 1; s. of 1981 of that is, the date thereof is much earlier than that of the
Not. Pub. of Makati, M.M., Romarie G. Villonco, dated preceding entry. In this regard, it noted the lack of any
August 4, 1981. transaction record on file with the Register of Deeds that
would support the notice of lis pendens annotation.10
Petitioner also stated that while Section 59 of Presidential Now, raising the purely legal question of whether the RTC
Decree (P.D.) No. 1529 requires the carry-over of of Las Piñas City, Branch 253 has jurisdiction in an
subsisting encumbrances in the new issuances of TCTs, original action to cancel the notice of lis pendens annotated
petitioner's duplicate copy of the title did not contain any on the subject title as an incident in a previous case,
such carry-over, which means that it was an innocent petitioner, in this present petition, ascribes error to the trial
purchaser for value, especially since it was never a party to court in dismissing its petition for cancellation. An action
the civil case referred to in the notice of lis pendens. Lastly, for cancellation of notice of lis pendens, petitioner believes,
it alludes to the indefeasibility of its title despite the fact is not always ancillary to an existing main action because a
that the mother title, TCT No. 30459, might have suffered trial court has the inherent power to cause such
from certain defects and constraints.11 cancellation, especially in this case that petitioner was
never a party to the litigation to which the notice of lis
The Intestate Estate of Bruneo F. Casim, representing pendens relates.20 Petitioner further posits that the trial
Bruneo F. Casim, intervened in the instant case and filed a court has committed an error in declining to rule on the
Comment/Opposition12 in which it maintained that the RTC allegation of forgery, especially since there is no
of Las Piñas did not have jurisdiction over the present transaction record on file with the Register of Deeds
action, because the matter of canceling a notice of lis relative to said entries. It likewise points out that granting
pendens lies within the jurisdiction of the court before the notice of lis pendens has been properly annotated on the
which the main action referred to in the notice is pending. title, the fact that its owner's duplicate title is clean suggests
In this regard, it emphasized that the case referred to in the that it was never a party to the civil case referred to in the
said notice had already attained finality as the Supreme notice.21 Finally, petitioner posits that TCT No. 49936 is
Court had issued an entry of judgment therein and that the indefeasible and holds it free from any liens and
RTC of Makati City had ordered execution in that case.13 It encumbrances which its mother title, TCT No. 30459,
cited the lack of legal basis for the petition in that nothing might have suffered.22
in the allegations hints at any of the legal grounds for the
cancellation of notice of lis pendens.14 And, as opposed to The Intestate Estate of Bruneo F. Casim (intervenor), in its
petitioner's claim that there was no carry-over of Comment on the present petition, reiterates that the court a
encumbrances made in TCT No. 49936 from the mother quo does not have jurisdiction to order the cancellation of
title TCT No. 30459, the latter would show that it also had the subject notice of lis pendens because it is only the court
the same inscriptions as those found in TCT No. 49936 exercising jurisdiction over the property which may order
only that they were entered in the original copy on file with the same  that is, the court having jurisdiction over the
the Register of Deeds. Also, as per Certification15 issued by main action in relation to which the registration of the
the Register of Deeds, petitioner's claim of lack of notice has been sought. Also, it notes that even on the
transaction record could not stand, because the said assumption that the trial court had such jurisdiction, the
certification stated merely that the corresponding petition for cancellation still has no legal basis as petitioner
transaction record could no longer be retrieved and might, failed to establish the grounds therefor. Also, the subject
therefore, be considered as either lost or destroyed. notice of lis pendens was validly carried over to TCT No.
49936 from the mother title, TCT No. 30459.
On April 14, 2005, the trial court, ruling that it did not have
jurisdiction over the action, resolved to dismiss the petition In its Reply,23 petitioner, in a semantic slur, dealt primarily
and declared that the action must have been filed before the with the supposed inconsistencies in intervenor's
same court and in the same action in relation to which the arguments. Yet the core of its contention is that the non-
annotation of the notice of lis pendens had been sought. chronological annotation of the notice stands to be the best
Anent the allegation that the entries in the TCT were evidence of forgery. From this, it advances the notion that
forged, the trial court pointed out that not only did forgery of the notice of lis pendens suffices as a ground for
petitioner resort to the wrong forum to determine the the cancellation thereof which may be availed of in an
existence of forgery, but also that forgery could not be independent action by the aggrieved party.
presumed merely from the alleged non-chronological
entries in the TCT but instead must be positively proved. In The petition is utterly unmeritorious.
this connection, the trial court noted petitioner's failure to
name exactly who had committed the forgery, as well as
the lack of evidence on which the allegation could be Lis pendens  which literally means pending suit  refers
based.16The petition was disposed of as follows: to the jurisdiction, power or control which a court acquires
over the property involved in a suit, pending the
continuance of the action, and until final
IN VIEW OF THE FOREGOING, the instant petition is judgment.24 Founded upon public policy and necessity, lis
hereby DISMISSED. pendens is intended to keep the properties in litigation
within the power of the court until the litigation is
SO ORDERED.17 terminated, and to prevent the defeat of the judgment or
decree by subsequent alienation.25 Its notice is an
Petitioner moved for reconsideration,18 but it was denied in announcement to the whole world that a particular property
the trial court's June 24, 2005 Order.19 is in litigation and serves as a warning that one who
acquires an interest over said property does so at his own
risk, or that he gambles on the result of the litigation over existence of the action and are deemed to take the property
said property.26 subject to the outcome of the litigation.34 It is also in this
sense that the power possessed by a trial court to cancel the
A notice of lis pendens, once duly registered, may be notice of lis pendens is said to be inherent as the same is
cancelled by the trial court before which the action merely ancillary to the main action.351avvphi1
involving the property is pending. This power is said to be
inherent in the trial court and is exercised only under Thus, in Vda. de Kilayko v. Judge Tengco,36 Heirs of Maria
express provisions of law.27 Accordingly, Section 14, Rule Marasigan v. Intermediate Appellate Court37 and Tanchoco
13 of the 1997 Rules of Civil Procedure authorizes the trial v. Aquino,38 it was held that the precautionary notice of lis
court to cancel a notice of lis pendens where it is properly pendens may be ordered cancelled at any time by the court
shown that the purpose of its annotation is for molesting the having jurisdiction over the main action inasmuch as the
adverse party, or that it is not necessary to protect the rights same is merely an incident to the said action. The
of the party who caused it to be annotated. Be that as it pronouncement in Heirs of Eugenio Lopez, Sr. v. Enriquez,
may, the power to cancel a notice of lis pendens is citing Magdalena Homeowners Association, Inc. v. Court
exercised only under exceptional circumstances, such as: of Appeals,39 is equally instructive 
where such circumstances are imputable to the party who
caused the annotation; where the litigation was unduly The notice of lis pendens x x x is ordinarily recorded
prolonged to the prejudice of the other party because of without the intervention of the court where the action is
several continuances procured by petitioner; where the case pending. The notice is but an incident in an action, an
which is the basis for the lis pendens notation was extrajudicial one, to be sure. It does not affect the merits
dismissed for non prosequitur on the part of the plaintiff; or thereof. It is intended merely to constructively advise, or
where judgment was rendered against the party who caused warn, all people who deal with the property that they so
such a notation. In such instances, said notice is deal with it at their own risk, and whatever rights they may
deemed ipso facto cancelled.28 acquire in the property in any voluntary transaction are
subject to the results of the action, and may well be inferior
In theorizing that the RTC of Las Piñas City, Branch 253 and subordinate to those which may be finally determined
has the inherent power to cancel the notice of lis pendens and laid down therein. The cancellation of such a
that was incidentally registered in relation to Civil Case No. precautionary notice is therefore also a mere incident in the
2137, a case which had been decided by the RTC of Makati action, and may be ordered by the Court having jurisdiction
City, Branch 62 and affirmed by the Supreme Court on of it at any given time. x x x40
appeal, petitioner advocates that the cancellation of such a
notice is not always ancillary to a main action. Clearly, the action for cancellation of the notice of lis
pendens in this case must have been filed not before the
The argument fails. court a quo via an original action but rather, before the
RTC of Makati City, Branch 62 as an incident of the
From the available records, it appears that the subject annulment case in relation to which its registration was
notice of lis pendens had been recorded at the instance of sought. Thus, it is the latter court that has jurisdiction over
Bruneo F. Casim (Bruneo) in relation to Civil Case No. the main case referred to in the notice and it is that same
213729  one for annulment of sale and recovery of real court which exercises power and control over the real
property  which he filed before the RTC of Makati City, property subject of the notice.
Branch 62 against the spouses Jesus and Margarita Casim,
predecessors-in-interest and stockholders of petitioner But even so, the petition could no longer be expected to
corporation. That case involved the property subject of the pursue before the proper forum inasmuch as the decision
present case, then covered by TCT No. 30459. At the close rendered in the annulment case has already attained finality
of the trial on the merits therein, the RTC of Makati before both the Court of Appeals and the Supreme Court on
rendered a decision adverse to Bruneo and dismissed the the appellate level, unless of course there exists substantial
complaint for lack of merit.30 Aggrieved, Bruneo lodged an and genuine claims against the parties relative to the main
appeal with the Court of Appeals, docketed as CA-G.R. CV case subject of the notice of lis pendens.41 There is none in
No. 54204, which reversed and set aside the trial court's this case. It is thus well to note that the precautionary notice
decision.31 Expectedly, the spouses Jesus and Margarita that has been registered relative to the annulment case then
Casim elevated the case to the Supreme Court, docketed as pending before the RTC of Makati City, Branch 62 has
G.R. No. 151957, but their appeal was dismissed for being served its purpose. With the finality of the decision therein
filed out of time.32 on appeal, the notice has already been rendered functus
officio. The rights of the parties, as well as of their
A necessary incident of registering a notice of lis pendens successors-in-interest, petitioner included, in relation to the
is that the property covered thereby is effectively placed, subject property, are hence to be decided according the said
until the litigation attains finality, under the power and final decision.
control of the court having jurisdiction over the case to
which the notice relates.33 In this sense, parties dealing with To be sure, petitioner is not altogether precluded from
the given property are charged with the knowledge of the pursuing a specific remedy, only that the suitable course of
action legally available is not judicial but rather
administrative. Section 77 of P.D. No. 1529 provides the
appropriate measure to have a notice of lis pendens
cancelled out from the title, that is by presenting to the
Register of Deeds, after finality of the judgment rendered in
the main action, a certificate executed by the clerk of court
before which the main action was pending to the effect that
the case has already been finally decided by the court,
stating the manner of the disposal thereof. Section 77
materially 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 the
registration thereof.

At any time after final judgment in favor of the defendant,

or other disposition of the action such as to terminate
finally all rights of the plaintiff in and to the land and/or
buildings involved, in any case in which a memorandum or
notice of lis pendens has been registered as provided in the
preceding section, the notice of lis pendens shall be deemed
cancelled upon the registration of a certificate of the clerk
of court in which the action or proceeding was pending
stating the manner of disposal thereof. 42

Lastly, petitioner tends to make an issue out of the fact that

while the original TCT on file with the Register of Deeds
does contain the annotations and notice referred to in this
petition, its owner's duplicate copy of the title nevertheless
does not reflect the same non-chronological inscriptions.
From this, petitioner submits its puerile argument that the
said annotations appearing on the original copy of the TCT
are all a forgery, and goes on to assert the indefeasibility of
its Torrens title as well as its supposed status as an innocent
purchaser for value in good faith. Yet we decline to rule on
these assumptions principally because they raise matters
that call for factual determination which certainly are
beyond the competence of the Court to dispose of in this
petition.

All told, we find that the RTC of Las Piñas City, Branch
253 has committed no reversible error in issuing the
assailed Resolution and Order dismissing for lack of
jurisdiction the petition for cancellation of notice of lis
pendens filed by petitioner, and in denying reconsideration.

WHEREFORE, the petition is DENIED. The April 14,

2005 Resolution and the June 24, 2005 Order issued by the
Regional Trial Court of Las Piñas City, Branch 253, in
Civil Case No. LP-04-0071, are hereby AFFIRMED.

SO ORDERED
HOMEOWNERS SAVINGS AND LOAN Aggrieved, Delgado elevated the case to the CA where it
BANK, Petitioner-Appellant,  was docketed as CA-G.R. CV No. 49317. The CA affirmed
vs. the trial court decision. On 16 October 2000, the CA
ASUNCION P. FELONIA and LYDIA C. DE decision became final and executory.7
GUZMAN, represented by MARIBEL
FRIAS, Respondents-Appellees. Inspite of the pendency of the Reformation case in which
MARIE MICHELLE P. DELGADO, REGISTER OF she was the defendant, Delgado filed a "Petition for
DEEDS OF LAS PINAS CITY and RHANDOLFO B. Consolidation of Ownership of Property Sold with an
AMANSEC, in his capacity as Clerk of Court Ex- Option to Repurchase and Issuance of a New Certificate of
Officio Sheriff, Office of the Clerk of Court, Las Piñas Title" (Consolidation case) in the RTC of Las Piñas, on 20
City,Respondents-Defendants. June 1994.8 After an ex-parte hearing, the RTC ordered the
issuance of a new title under Delgado’s name, thus:
DECISION
WHEREFORE, judgment is rendered-
PEREZ, J.:
1. Declaring [DELGADO] as absolute owner of
Assailed in this Petition for Review on Certiorari is the the subject parcel of land covered by Transfer
Decision1 and Resolution2 of the Court of Appeals (CA), in Certificate of Title No. T-402 of the Register of
CA-G.R. CV No. 87540, which affirmed with Deeds of Las Piñas, Metro Manila;
modifications, the Decision3 of the Regional Trial Court
(RTC), reinstating the title of respondents Asuncion 2. Ordering the Register of Deeds of Las Piñas,
Felonia (Felonia) and Lydia de Guzman (De Guzman) and Metro Manila to cancel Transfer Certificate of
cancelling the title of Marie Michelle Delgado (Delgado). Title No. T-402 and issue in lieu thereof a new
certificate of title and owner’s duplicate copy
The facts as culled from the records are as follows: thereof in the name of [DELGADO].9

Felonia and De Guzman were the registered owners of a By virtue of the RTC decision, Delgado transferred the title
parcel of land consisting of 532 square meters with a five- to her name. Hence, TCT No. T-402, registered in the
bedroom house, covered by Transfer of Certificate of Title names of Felonia and De Guzman, was canceled and TCT
(TCT) No. T-402 issued by the register of deeds of Las No. 44848 in the name of Delgado, was issued.
Piñas City.
Aggrieved, Felonia and De Guzman elevated the case to the
Sometime in June 1990, Felonia and De Guzman CA through a Petition for Annulment of Judgment.10
mortgaged the property to Delgado to secure the loan in the
amount of ₱1,655,000.00. However, instead of a real estate Meanwhile, on 2 June 1995, Delgado mortgaged the
mortgage, the parties executed a Deed of Absolute Sale subject property to Homeowners Savings and Loan Bank
with an Option to Repurchase.4 (HSLB) using her newly registered title. Three (3) days
later, or on 5 June 1995, HSLB caused the annotation of the
On 20 December 1991, Felonia and De Guzman filed an mortgage.
action for Reformation of Contract (Reformation case),
docketed as Civil Case No. 91-59654, before the RTC of On 14 September 1995, Felonia and De Guzman caused the
Manila. On the findings that it is "very apparent that the annotation of a Notice of Lis Pendens on Delgado’s title,
transaction had between the parties is one of a mortgage TCT No. 44848. The Notice states:
and not a deed of sale with right to repurchase,"5 the RTC,
on 21 March 1995 rendered a judgment favorable to
Felonia and De Guzman. Thus: Entry No. 8219/T-44848 – NOTICE OF LIS PENDENS –
filed by Atty. Humberto A. Jambora, Counsel for the
Plaintiff, that a case been commenced in the RTC, Branch
WHEREFORE, judgment is hereby rendered directing the 38, Manila, entitled ASUNCION P. FELONIA and LYDIA
[Felonia and De Guzman] and the [Delgado] to execute a DE GUZMAN thru VERONICA P. BELMONTE, as Atty-
deed of mortgage over the property in question taking into in-fact (Plaintiffs) v.s. MARIE MICHELLE DELGADO
account the payments made and the imposition of the legal defendant in Civil Case No. 91-59654 for Reformation of
interests on the principal loan. Instrument.

On the other hand, the counterclaim is hereby dismissed for Copy on file in this Registry.
lack of merit.
Date of Instrument – Sept. 11, 1995
No pronouncements as to attorney’s fees and damages in
both instances as the parties must bear their respective
expenses incident to this suit.6 Date of Inscription – Sept. 14, 1995 at 9:55 a.m.11
On 20 November1997, HSLB foreclosed the subject be regarded as such for all intents and purposes
property and later consolidated ownership in its favor, under the law;
causing the issuance of a new title in its name, TCT No.
64668. 2. Declaring the Mortgage Sheriff’s Sale and the
Certificate of Sale issued in favor of HSLB null
On 27 October 2000, the CA annulled and set aside the and void, without prejudice to whatever rights the
decision of the RTC, Las Piñas City in the Consolidation said Bank may have against [Delgado];
case. The decision of the CA, declaring Felonia and De
Guzman as the absolute owners of the subject property and 3. Ordering [Delgado] to pay [Felonia and De
ordering the cancellation of Delgado’s title, became final Guzman] the amount of PH₱500,000.00 for
and executory on 1 December 2000.12 Thus: compensatory damages;

WHEREFORE, the petition is GRANTED and the subject 4. Ordering [Delgado] to pay [Felonia and De
judgment of the court a quo is ANNULLED and SET Guzman] the amount of PH₱500,000.00 for
ASIDE.13 exemplary damages;

On 29 April 2003, Felonia and De Guzman, represented by 5. Ordering [Delgado] to pay [Felonia and De
Maribel Frias (Frias), claiming to be the absolute owners of Guzman] the amount of PH₱500,000.00 for
the subject property, instituted the instant complaint against moral damages;
Delgado, HSLB, Register of Deeds of Las Piñas City and
Rhandolfo B. Amansec before the RTC of Las Piñas City
for Nullity of Mortgage and Foreclosure Sale, Annulment 6. Ordering [Delgado] to pay 20% of the total
of Titles of Delgado and HSLB, and finally, Reconveyance obligations as and by way of attorney’s fees;
of Possession and Ownership of the subject property in
their favor. 7. Ordering [Delgado] to pay cost of suit.14

As defendant, HSLB asserted that Felonia and De Guzman On appeal, the CA affirmed with modifications the trial
are barred from laches as they had slept on their rights to court decision. The dispositive portion of the appealed
timely annotate, by way of Notice of Lis Pendens, the Decision reads:
pendency of the Reformation case. HSLB also claimed that
it should not be bound by the decisions of the CA in the WHEREFORE, in the light of the foregoing, the decision
Reformation and Consolidation cases because it was not a appealed from is AFFIRMED with the MODIFICATIONS
party therein. that the awards of actual damages and attorney’s fees are
DELETED, moral and exemplary damages are REDUCED
Finally, HSLB asserted that it was a mortgagee in good to ₱50,000.00 each, and Delgado is ordered to pay the
faith because the mortgage between Delgado and HSLB appellees ₱25,000.00 as nominal damages.15
was annotated on the title on 5 June 1995, whereas the
Notice of Lis Pendens was annotated only on 14 September Hence, this petition.
1995.

Notably, HSLB does not question the affirmance by the CA

After trial, the RTC ruled in favor of Felonia and De of the trial court’s ruling that TCT No. 44848, the
Guzman as the absolute owners of the subject property. The certificate of title of its mortgagor-vendor, and TCT No.
dispositive portion of the RTC decision reads: 64668, the certificate of title that was secured by virtue of
the Sheriff’s sale in its favor, should be cancelled "as null
WHEREFORE, premises considered, the Court hereby and void" and that TCT No. T-402 in the name of Felonia
finds for the [Felonia and De Guzman] with references to and De Guzman should be reinstated.
the decision of the Court of Appeals in CA-G.R. CV No.
49317 and CA-G.R. SP No. 43711 as THESE TWO Recognizing the validity of TCT No. T-402 restored in the
DECISIONS CANNOT BE IGNORED and against name of Felonia and De Guzman, petitioners pray that the
[Delgado] and [HSLB], Register of Deeds of Las Piñas decision of the CA be modified "to the effect that the
City ordering the (sic) as follows: mortgage lien in favor of petitioner HSLB annotated as
entry No. 4708-12 on TCT No. 44848 be [ordered] carried
1. The Register of Deeds of Las Piñas City to over on TCT No. T-402 after it is reinstated in the name of
cancel Transfer Certificate of Title Nos. 44848 [Felonia and De Guzman]."16
and T-64668 as null and void and reinstating
Transfer Certificate of Title No. T-402 which Proceeding from the ruling of the CA that it is a mortgagee
shall contain a memorandum of the fact and shall in good faith, HSLB argues that a denial of its prayer would
in all respect be entitled to like faith and credit as run counter to jurisprudence giving protection to a
the original certificate of title and shall, thereafter mortgagee in good faith by reason of public policy.
We cannot grant the prayer of petitioner. The priorly When a prospective buyer is faced with facts and
registered mortgage lien of HSLB is now worthless. circumstances as to arouse his suspicion, he must take
precautionary steps to qualify as a purchaser in good faith.
Arguably, HSLB was initially a mortgagee in good faith. In In Spouses Mathay v. CA,20 we determined the duty of a
Bank of Commerce v. San Pablo, Jr.,17 the doctrine of prospective buyer:
mortgagee in good faith was explained:
Although it is a recognized principle that a person dealing
There is, however, a situation where, despite the fact that on a registered land need not go beyond its certificate of
the mortgagor is not the owner of the mortgaged property, title, it is also a firmly settled rule that where there are
his title being fraudulent, the mortgage contract and any circumstances which would put a party on guard and
foreclosure sale arising there from are given effect by prompt him to investigate or inspect the property being sold
reason of public policy. This is the doctrine of "the to him, such as the presence of occupants/tenants thereon, it
mortgagee in good faith" based on the rule that all persons is of course, expected from the purchaser of a valued piece
dealing with property covered by the Torrens Certificates of land to inquire first into the status or nature of
of Title, as buyers or mortgagees, are not required to go possession of the occupants, i.e., whether or not the
beyond what appears on the face of the title. The public occupants possess the land en concepto de dueño, in the
interest in upholding indefeasibility of a certificate of title, concept of the owner. As is the common practice in the real
as evidence of lawful ownership of the land or of any estate industry, an ocular inspection of the premises
encumbrance thereon, protects a buyer or mortgagee who, involved is a safeguard a cautious and prudent purchaser
in good faith, relied upon what appears on the face of the usually takes. Should he find out that the land he intends to
certificate of title. buy is occupied by anybody else other than the seller who,
as in this case, is not in actual possession, it would then be
incumbent upon the purchaser to verify the extent of the
When the property was mortgaged to HSLB, the registered occupant’s possessory rights. The failure of a prospective
owner of the subject property was Delgado who had in her buyer to take such precautionary steps would mean
name TCT No. 44848. Thus, HSLB cannot be faulted in negligence on his part and would thereby preclude him
relying on the face of Delgado’s title. The records indicate from claiming or invoking the rights of a purchaser in good
that Delgado was at the time of the mortgage in possession faith.
of the subject property and Delgado’s title did not contain
any annotation that would arouse HSLB’s suspicion.
HSLB, as a mortgagee, had a right to rely in good faith on In the case at bar, HSLB utterly failed to take the necessary
Delgado’s title, and in the absence of any sign that might precautions.1âwphi1 At the time the subject property was
arouse suspicion, HSLB had no obligation to undertake mortgaged, there was yet no annotated Notice of Lis
further investigation. As held by this Court in Cebu Pendens. However, at the time HSLB purchased the subject
International Finance Corp. v. property, the Notice of Lis Pendens was already annotated
on the title.21
CA:18
Lis pendens is a Latin term which literally means, "a
pending suit or a pending litigation" while a notice of lis
The prevailing jurisprudence is that a mortgagee has a right pendens is an announcement to the whole world that a real
to rely in good faith on the certificate of title of the property is in litigation, serving as a warning that anyone
mortgagor of the property given as security and in the who acquires an interest over the property does so at his/her
absence of any sign that might arouse suspicion, has no own risk, or that he/she gambles on the result of the
obligation to undertake further investigation. Hence, even if litigation over the property.22 It is a warning to prospective
the mortgagor is not the rightful owner of, or does not have buyers to take precautions and investigate the pending
a valid title to, the mortgaged property, the mortgagee or litigation.
transferee in good faith is nonetheless entitled to protection.
The purpose of a notice of lis pendens is to protect the
However, the rights of the parties to the present case are rights of the registrant while the case is pending resolution
defined not by the determination of whether or not HSLB is or decision. With the notice of lis pendens duly recorded
a mortgagee in good faith, but of whether or not HSLB is a and remaining uncancelled, the registrant could rest secure
purchaser in good faith. And, HSLB is not such a that he/she will not lose the property or any part thereof
purchaser. during litigation.

A purchaser in good faith is defined as one who buys a The doctrine of lis pendens is founded upon reason of
property without notice that some other person has a right public policy and necessity, the purpose of which is to keep
to, or interest in, the property and pays full and fair price at the subject matter of the litigation within the Court’s
the time of purchase or before he has notice of the claim or jurisdiction until the judgment or the decree have been
interest of other persons in the property.19 entered; otherwise, by successive alienations pending the
litigation, its judgment or decree shall be rendered abortive
and impossible of execution.23
Indeed, at the time HSLB bought the subject property, Succinctly, for a valid mortgage to exist, ownership of the
HSLB had actual knowledge of the annotated Notice of Lis property is an essential requisite.27
Pendens. Instead of heeding the same, HSLB continued
with the purchase knowing the legal repercussions a notice Reyes v. De Leon28 cited the case of Philippine National
of lis pendens entails. HSLB took upon itself the risk that Bank v. Rocha29 where it was pronounced that "a mortgage
the Notice of Lis Pendens leads to.1âwphi1 As correctly of real property executed by one who is not an owner
found by the CA, "the notice of lis pendens was annotated thereof at the time of the execution of the mortgage is
on 14 September 1995, whereas the foreclosure sale, where without legal existence." Such that, according to DBP v.
the appellant was declared as the highest bidder, took place Prudential Bank,30 there being no valid mortgage, there
sometime in 1997. There is no doubt that at the time could also be no valid foreclosure or valid auction sale.
appellant purchased the subject property, it was aware of
the pending litigation concerning the same property and
thus, the title issued in its favor was subject to the outcome We go back to Bank of Commerce v. San Pablo, Jr.31 where
of said litigation."24 the doctrine of mortgagee in good faith, upon which
petitioner relies, was clarified as "based on the rule that all
persons dealing with property covered by the Torrens
This ruling is in accord with Rehabilitation Finance Corp. Certificate of Title, as buyers or mortgagees, are not
v. Morales,25 which underscored the significance of a lis required to go beyond what appears on the face of the title.
pendens, then defined in Sec. 24, Rule 7 now Sec. 14 of In turn, the rule is based on "x x x public interest in
Rule 13 in relation to a mortgage priorly annotated on the upholding the indefeasibility of a certificate of title, as
title covering the property. Thus: evidence of lawful ownership of the land or of any
encumbrance thereon."32
The notice of lis pendens in question was annotated on the
back of the certificate of title as a necessary incident of the Insofar as the HSLB is concerned, there is no longer any
civil action to recover the ownership of the property public interest in upholding the indefeasibility of the
affected by it. The mortgage executed in favor of petitioner certificate of title of its mortgagor, Delgado. Such title has
corporation was annotated on the same title prior to the been nullified in a decision that had become final and
annotation of the notice of lis pendens; but when petitioner executory. Its own title, derived from the foreclosure of
bought the property as the highest bidder at the auction sale Delgado's mortgage in its favor, has likewise been nullified
made as an aftermath of the foreclosure of the mortgage, in the very same decision that restored the certificate of title
the title already bore the notice of lis pendens. Held: While in respondents' name. There is absolutely no reason that
the notice of lis pendens cannot affect petitioner’s right as can support the prayer of HSLB to have its mortgage lien
mortgagee, because the same was annotated subsequent to carried over and into the restored certificate of title of
the mortgage, yet the said notice affects its right as respondents.
purchaser because notice of lis pendens simply means that
a certain property is involved in a litigation and serves as a
notice to the whole world that one who buys the same does WHEREFORE, the Petition is DENIED. The Decision of
so at his own risk.26 the Court of Appeals in CA-G.R. CV No. 87540 is
AFFIRMED.
The subject of the lis pendens on the title of HSLB’s
vendor, Delgado, is the "Reformation case" filed against SO ORDERED
Delgado by the herein respondents. The case was decided
with finality by the CA in favor of herein respondents. The
contract of sale in favor of Delgado was ordered reformed
into a contract of mortgage. By final decision of the CA,
HSLB’s vendor, Delgado, is not the property owner but
only a mortgagee. As it turned out, Delgado could not have
constituted a valid mortgage on the property. That the
mortgagor be the absolute owner of the thing mortgaged is
an essential requisite of a contract of mortgage. Article
2085 (2) of the Civil Code specifically says so:

Art. 2085. The following requisites are essential to the

contracts of pledge and mortgage:

xxxx

(2) That the pledgor or mortagagor be the absolute owner

of the thing pledged or mortgaged.
ATLANTIC ERECTORS, INC., petitioner,  "On November 21, 1997, [petitioner] filed a
vs. complaint for sum of money with damages (Civil
HERBAL COVE REALTY Case No. 97-2707) with the Regional Trial Court
CORPORATION, respondent. of Makati entitled 'Atlantic Erectors,
Incorporated vs. Herbal Cove Realty Corp. and
PANGANIBAN, J.: 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]
The pendency of a simple collection suit arising from the AEI asked for the following reliefs:
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 'AFTER DUE NOTICE AND
property where construction has been done. HEARING, to order x x x defendant to:

Statement of the Case 1. Pay plaintiff the sum of

P4,854,229.94 for the unpaid
construction services already rendered;
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) 2. To x x x pay plaintiff the sum of
in CA-GR SP No. 56432. The dispositive portion of the P1,595,551.00 for the construction
Decision is reproduced as follows: materials, equipment and tools of
plaintiff held by defendant;
"WHEREFORE, the petition is granted and the
assailed November 4, 1998 and October 22, 1999 3. To x x x pay plaintiff the sum of
orders annulled and set aside. The July 30, 1998 P2,250,000.00 for the [loss] x x x of
order of respondent judge is reinstated granting expected income from the construction
the cancellation of the notices of lis pendens project;
subject of this petition."3
4. [T]o x x x pay plaintiff the sum of
4
In its July 21, 2001 Resolution,  the CA denied petitioner's P800,000.00 for the cost of income by
Motion for Reconsideration. way of rental from the equipment of
plaintiff held by defendants;
The Facts
5. To x x x pay plaintiff the sum of
P5,000,000.00 for moral damages;
The factual antecedents of the case are summarized by the
CA in this wise:
6. To x x x pay plaintiff the sum of
P5,000,000.00 for exemplary damages;
"On June 20, 1996, [respondent] and [petitioner]
entered into a Construction Contract whereby the
former agreed to construct four (4) units of 7. To x x x pay plaintiff the sum
[townhouses] designated as 16-A, 16-B, 17-A equivalent of 25% of the total money
and 17-B and one (1) single detached unit for an claim plus P200,000.00 acceptance fee
original contract price of P15,726,745.19 which and P2,500.00 per court appearance;
was late[r] adjusted to P16,726,745.19 as a result
of additional works. The contract period is 180 8. To x x x pay the cost of suit.'
days commencing [on] July 7, 1996 and to
terminate on January 7, 1997. [Petitioner] "On the same day of November 21, 1997,
claimed that the said period was not followed due [petitioner] filed a notice of lis pendens for
to reasons attributable to [respondent], namely: annotation of the pendency of Civil Case No. 97-
suspension orders, additional works, force 707 on titles TCTs nos. T-30228, 30229, 30230,
majeure, and unjustifiable acts of omission or 30231 and 30232. When the lots covered by said
delay on the part of said [respondent]. titles were subsequently subdivided into 50 lots,
[Respondent], however, denied such claim and the notices of lis pendens were carried over to the
instead pointed to [petitioner] as having exceeded titles of the subdivided lots, i.e., Transfer
the 180 day contract period aggravated by Certificate of Title Nos. T-36179 to T-36226 and
defective workmanship and utilization of T-36245 to T-36246 of the Register of Deeds of
materials which are not in compliance with Tagaytay City.
specifications.

x x x           x x x           x x x
"On January 30, 1998, [respondent] and x x x appeal (3rd par., Sec. 10, Rule 41).
Ernest L. Escaler, filed a Motion to Dismiss Even as it declared itself without
[petitioner's] Complaint for lack of jurisdiction jurisdiction, this Court still has power
and for failure to state a cause of action. They to act on incidents in this case, such as
claimed [that] the Makati RTC has no jurisdiction acting on motions for reconsideration,
over the subject matter of the case because the for correction, for lifting of lis pendens,
parties' Construction Contract contained a clause or approving appeals, etc.
requiring them to submit their dispute to
arbitration. 'As correctly argued by defendant
Herbal Cove, a notice of lis
x x x           x x x           x x x pendens serves only as a precautionary
measure or warning to prospective
"On March 17, 1998, [RTC Judge Ranada] buyers of a property that there is a
dismissed the Complaint as against [respondent] pending litigation involving the same.
for [petitioner's] failure to comply with a
condition precedent to the filing of a court action 'The Court notes that when it issued the
which is the prior resort to arbitration and as Order of 30 July 1998 lifting the notice
against x x x Escaler for failure of the Complaint of lis pendens, there was as yet no
to state a cause of action x x x. appeal filed by plaintiff. Subsequently,
on 10 September 1998, after a notice of
"[Petitioner] filed a Motion for Reconsideration appeal was filed by plaintiff on 4
of the March 17, 1998 dismissal order. September 1998, the Branch Clerk of
[Respondent] filed its Opposition thereto. Court was ordered by the Court to
elevate the entire records of the above-
entitled case to the Court of Appeals. It
"On April 24, 1998, [respondent] filed a Motion therefore results that the above-entitled
to Cancel Notice of Lis Pendens. It argued that case is still pending. After a careful
the notices of lis pendens are without basis consideration of all matters relevant to
because [petitioner's] action is a purely personal the lis pendens, the Court believes that
action to collect a sum of money and recover justice will be better served by setting
damages and x x x does not directly affect title to, aside the Order of 30 July 1998.'
use or possession of real property.
"On November 27, 1998, [respondent] filed a
"In his July 30, 1998 Order, [Judge Ranada] Motion for Reconsideration of the November 4,
granted [respondent's] Motion to Cancel Notice 1998 Order arguing that allowing the notice of lis
of Lis Pendens x x x: pendens to remain annotated on the titles would
defeat, not serve, the ends of justice and that
"[Petitioner] filed a Motion for Reconsideration equitable considerations cannot be resorted to
of the aforesaid July 30, 1998 Order to which when there is an applicable provision of law.
[respondent] filed an Opposition.
x x x           x x x           x x x
"In a November 4, 1998 Order, [Judge Ranada,]
while finding no merit in the grounds raised by "On October 22, 1999, [Judge Ranada] issued an
[petitioner] in its Motion for Reconsideration, order denying [respondent's] Motion for
reversed his July 30, 1998 Order and reinstated Reconsideration of the November 4, 1998 Order
the notices of lis pendens, as follows: for lack of sufficient merit."5

'1. The Court finds no merit in Thereafter, Respondent Herbal Cove filed with the CA a
plaintiff's contention that in dismissing Petition for Certiorari.
the above-entitled case for lack of
jurisdiction, and at the same time
granting defendant Herbal Cove's Ruling of the Court of Appeals
motion to cancel notice of lis pendens,
the Court [took] an inconsistent Setting aside the Orders of the RTC dated November 4,
posture. The Rules provide that prior to 1998 and October 22, 1999, the CA reinstated the former's
the transmittal of the original record on July 30, 1998 Order6 granting Herbal Cove's Motion to
appeal, the court may issue orders for Cancel the Notice of Lis Pendens. According to the
the protection and preservation of the appellate court, the re-annotation of those notices was
rights of the parties which do not improper for want of any legal basis. It specifically cited
involve any matter litigated by the Section 76 of Presidential Decree No. 1529 (the Property
Registration Decree). The decree provides that the "II. Whether or not the trial court[,] after having
registration of such notices is allowed only when court declared itself without jurisdiction to try the
proceedings directly affect the title to, or the use or the case[,] may still decide on [the] substantial issue
occupation of, the land or any building thereon. of the case."8

The CA opined that the Complaint filed by petitioner in This Court's Ruling
Civil Case No. 97-2707 was intended purely to collect a
sum of money and to recover damages. The appellate court The Petition has no merit.
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 First Issue:
absent any claim on the title to the buildings or on the
possession thereof, the notices of lis pendens had no leg to Proper Basis for a Notice of Lis Pendens
stand on.
Petitioner avers that its money claim on the cost of labor
Likewise, the CA held that Judge Ranada should have and materials for the townhouses it constructed on the
maintained the notice cancellations, which he had directed respondent's land is a proper lien that justifies the
in his July 30, 1998 Order. Those notices were no longer annotation of a notice of lis pendens on the land titles.
necessary to protect the rights of petitioner, inasmuch as it According to petitioner, the money claim constitutes a lien
could have procured protective relief from the Construction that can be enforced to secure payment for the said
Industry Arbitral Commission (CIAC), where provisional obligations. It argues that, to preserve the alleged
remedies were available. The CA also mentioned improvement it had made on the subject land, such
petitioner's admission that there was already a pending case annotation on the property titles of respondent is necessary.
before the CIAC, which in fact rendered a decision on
March 11, 1999. On the other hand, Respondent Herbal Cove argues that the
annotation is bereft of any factual or legal basis, because
The appellate court further explained that the re-annotation petitioner's Complaint9 does not directly affect the title to
of the Notice of Lis Pendens was no longer warranted after the property, or the use or the possession thereof. It also
the court a quo had ruled that the latter had no jurisdiction claims that petitioner's Complaint did not assert ownership
over the case. The former held that the rationale behind the of the property or any right to possess it. Moreover,
principle of lis pendens -- to keep the subject matter of the respondent attacks as baseless the annotation of the Notice
litigation within the power of the court until the entry of of Lis Pendens through the enforcement of a contractor's
final judgment -- was no longer applicable. The reason for lien under Article 2242 of the Civil Code. It points out that
such inapplicability was that the Makati RTC already the said provision applies only to cases in which there are
declared that it had no jurisdiction or power over the several creditors carrying on a legal action against an
subject matter of the case. insolvent debtor.

Finally, the CA opined that petitioner's Complaint had not As a general rule, the only instances in which a notice of lis
alleged or claimed, as basis for the continued annotation of pendens may be availed of are as follows: (a) an action to
the Notice of Lis Pendens, the lien of contractors and recover possession of real estate; (b) an action for partition;
laborers under Article 2242 of the New Civil Code. and (c) any other court proceedings that directly affect the
Moreover, petitioner had not even referred to any lien of title to the land or the building thereon or the use or the
whatever nature. Verily, the CA ruled that the failure to occupation thereof.10 Additionally, this Court has held that
allege and claim the contractor's lien did not warrant the resorting to lis pendens is not necessarily confined to cases
continued annotation on the property titles of Respondent that involve title to or possession of real property. This
Herbal Cove. annotation also applies to suits seeking to establish a right
to, or an equitable estate or interest in, a specific real
Hence, this Petition.7 property; or to enforce a lien, a charge or an encumbrance
against it.11
The Issues
Apparently, petitioner proceeds on the premise that its
money claim involves the enforcement of a lien. Since the
Petitioner raises the following issues for our consideration: money claim is for the nonpayment of materials and labor
used in the construction of townhouses, the lien referred to
"I. Whether or not money claims representing would have to be that provided under Article 2242 of the
cost of materials [for] and labor [on] the houses Civil Code. This provision describes a contractor's lien over
constructed on a property [are] a proper lien for an immovable property as follows:
annotation of lis pendens on the property title[.]
"Art. 2242. With reference to specific immovable
property and real rights of the debtor, the
 following claims, mortgages and liens shall be "However, Article 2242 finds application when
preferred, and shall constitute an encumbrance there is a concurrence of credits, i.e., when the
on the immovable or real right: same specific property of the debtor is subjected
to the claims of several creditors and the value of
x x x           x x x           x x x 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
"(3) Claims of laborers, masons, mechanics and will be a need to determine which of the creditors
other workmen, as well as of architects, engineers will be paid ahead of the others. Fundamental
and contractors, engaged in the construction, tenets of due process will dictate that this
reconstruction or repair of buildings, canals or statutory lien should then only be enforced in the
other works, upon said buildings, canals or other context of some kind of a proceeding where the
works; claims of all the preferred creditors may be
bindingly adjudicated, such as insolvency
"(4) Claims of furnishers of materials used in the proceedings."14 (Emphasis supplied)
construction, reconstruction, or repair of
buildings, canals or other works, upon said Clearly then, neither Article 2242 of the Civil Code nor the
buildings, canals or other works[.]" (Emphasis enforcement of the lien thereunder is applicable here,
supplied) because petitioner's Complaint failed to satisfy the
foregoing requirements. Nowhere does it show that
However, a careful examination of petitioner's Complaint, respondent's property was subject to the claims of other
as well as the reliefs it seeks, reveals that no such lien or creditors or was insufficient to pay for all concurring debts.
interest over the property was ever alleged. The Complaint Moreover, the Complaint did not pertain to insolvency
merely asked for the payment of construction services and proceedings or to any other action in which the
materials plus damages, without mentioning -- much less adjudication of claims of preferred creditors could be
asserting -- a lien or an encumbrance over the property. ascertained.
Verily, it was a purely personal action and a simple
collection case. It did not contain any material averment of Another factor negates the argument of petitioner that its
any enforceable right, interest or lien in connection with the money claim involves the enforcement of a lien or the
subject property. assertion of title to or possession of the subject property:
the fact that it filed its action with the RTC of Makati,
As it is, petitioner's money claim cannot be characterized as which is undisputedly bereft of any jurisdiction over
an action that involves the enforcement of a lien or an respondent's property in Tagaytay City. Certainly, actions
encumbrance, one that would thus warrant the annotation affecting title to or possession of real property or the
of the Notice of Lis Pendens. Indeed, the nature of an assertion of any interest therein should be commenced and
action is determined by the allegations of the complaint.12 tried in the proper court that has jurisdiction over the area,
where the real property involved or a portion thereof is
Even assuming that petitioner had sufficiently alleged such situated.15 If petitioner really intended to assert its claim or
lien or encumbrance in its Complaint, the annotation of the enforce its supposed lien, interest or right over respondent's
Notice of Lis Pendens would still be unjustified, because a subject properties, it would have instituted the proper
complaint for collection and damages is not the proper proceedings or filed a real action with the RTC of Tagaytay
mode for the enforcement of a contractor's lien. City, which clearly had jurisdiction over those properties.16

In J.L. Bernardo Construction v. Court of Appeals,13 the Narciso Peña, a leading authority on the subject of land
Court explained the concept of a contractor's lien under titles and registration, gives an explicit exposition on the
Article 2242 of the Civil Code and the proper mode for its inapplicability of the doctrine of lis pendens to certain
enforcement as follows: actions and proceedings that specifically include money
claims. He explains in this wise:

"Articles 2241 and 2242 of the Civil Code

enumerates certain credits which enjoy "By express provision of law, the doctrine of lis
preference with respect to specific personal or pendens does not apply to attachments, levies of
real property of the debtor. Specifically, the execution, or to proceedings for the probate of
contractor's lien claimed by the petitioners is wills, or for administration of the estate of
granted under the third paragraph of Article deceased persons in the Court of First Instance.
2242 which provides that the claims of Also, it is held generally that the doctrine of lis
contractors engaged in the construction, pendens has no application to a proceeding in
reconstruction or repair of buildings or other which the only object sought is the recovery of a
works shall be preferred with respect to the money judgment, though the title or right of
specific building or other immovable property possession to property be incidentally affected. It
constructed. 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 "In appeals by notice of appeal, the court loses
enforcement of a lien, or an adjudication between jurisdiction over the case upon the perfection of
conflicting claims of title, possession, or the right the appeals filed in due time and the expiration
of possession to specific property, or requiring its of the time to appeal of the other parties."
transfer or sale"17 (Emphasis supplied) (Emphasis supplied)

Peña adds that even if a party initially avails itself of a On the basis of the foregoing rule, the trial court lost
notice of lis pendens upon the filing of a case in court, such jurisdiction over the case only on August 31, 1998, when
notice is rendered nugatory if the case turns out to be a petitioner filed its Notice of Appeal.20 Thus, any order
purely personal action. We quote him as follows: issued by the RTC prior to that date should be considered
valid, because the court still had jurisdiction over the case.
"It may be possible also that the case when Accordingly, it still had the authority or jurisdiction to issue
commenced may justify a resort to lis pendens, the July 30, 1998 Order canceling the Notice of Lis
but during the progress thereof, it develops to be Pendens. On the other hand, the November 4, 1998 Order
purely a personal action for damages or that set aside the July 30, 1998 Order and reinstated that
otherwise. In such event, the notice of lis pendens Notice should be considered without force and effect,
has become functus officio."18 (Emphasis because it was issued by the trial court after it had already
supplied) lost jurisdiction.

Thus, when a complaint or an action is determined by the In any case, even if we were to adopt petitioner's theory
courts to be in personam, the rationale for or purpose of the that both the July 30, 1998 and the November 4, 1998
notice of lis pendens ceases to exist. To be sure, this Court Orders were void for having been issued without
has expressly and categorically declared that the annotation jurisdiction, the annotation is still improper for lack of
of a notice of lis pendens on titles to properties is not factual and legal bases.
proper in cases wherein the proceedings instituted are
actions in personam.19 As discussed previously, erroneously misplaced is the
reliance of petitioner on the premise that its money claim is
Second Issue: an action for the enforcement of a contractor's lien. Verily,
the annotation of the Notice of Lis Pendens on the subject
property titles should not have been made in the first place.
Jurisdiction of the Trial Court The Complaint filed before the Makati RTC -- for the
collection of a sum of money and for damages -- did not
Petitioner argues that the RTC had no jurisdiction to issue provide sufficient legal basis for such annotation.
the Order canceling the Notice of Lis Pendens as well as
the Order reinstating it. Supposedly, since both Orders were Finally, petitioner vehemently insists that the trial court had
issued by the trial court without jurisdiction, the annotation no jurisdiction to cancel the Notice. Yet, the former filed
made by the Register of Deeds of Tagaytay City must before the CA an appeal, docketed as CA-GR CV No.
remain in force. 65647,21 questioning the RTC's dismissal of the Complaint
for lack of jurisdiction. Moreover, it must be remembered
Petitioner avers that the trial court finally declared that the that it was petitioner which had initially invoked the
latter had no jurisdiction over the case on July 27, 1998, in jurisdiction of the trial court when the former sought a
an Order denying the former's Motion for Reconsideration judgment for the recovery of money and damages against
of the March 17, 1998 Order dismissing the Complaint. respondent. Yet again, it was also petitioner which assailed
Petitioner insists that the subsequent July 30, 1998 Order that same jurisdiction for issuing an order unfavorable to
cancelling the subject Notice of Lis Pendens is void, the former's cause. Indeed, parties cannot invoke the
because it was issued by a court that had no more jurisdiction of a court to secure affirmative relief, then
jurisdiction over the case. repudiate or question that same jurisdiction after obtaining
or failing to obtain such relief.22
Rule 41 of the 1997 Rules on Civil Procedure, which
governs appeals from regional trial courts, expressly WHEREFORE, the Petition is hereby DENIED and the
provides that RTCs lose jurisdiction over a case when an assailed Decision AFFIRMED. Costs against petitioner.
appeal is filed. The rule reads thus:
SO ORDERED
"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.

x x x           x x x           x x x
 more of the said companies shall be deemed the
VIEWMASTER CONSTRUCTION winner.
CORPORATION, petitioner, 
vs. Defendant Allen Roxas, one of the stockholders
HON. REYNALDO Y. MAULIT in his official capacity of State Investment Trust, Inc. applied for a loan
as administrator of the Land Registration Authority; with First Metro Investment, Inc. (First Metro for
and EDGARDO CASTRO, acting register of deeds of brevity) in the amount of P36,500,000.00 in order
Las Piñas, Metro Manila, respondents. to participate in the bidding.

PANGANIBAN, J.: First Metro granted Alien Roxas' loan application

without collateral provided, however, that he
A notice of lis pendens may be registered when an action or procure a guarantor/surety/solidary co-debtor to
a proceeding directly affects the title to the land or the secure the payment of the said loan.
buildings thereon; or the possession, the use or the
occupation thereof. Hence, the registration of such notice Petitioner Viewmaster agreed to act as guarantor
should be allowed if the litigation involves the enforcement for the aforementioned loan in consideration for
of an agreement for the co-development of a parcel of land. its participation in a Joint Venture Project to co-
develop the real estate assets of State Investment
Statement of the Case Trust, Inc.

Before us is a Petition for Review on Certiorari 1 assailing After a series of negotiations, petitioner

the February 27, 1998 Decision 2 of the Court of Appeals Viewmaster and defendant Allen Roxas agreed
(CA) 3 in CA-GR SP No. 39649 and its November 12, 1998 that should the latter prevail and win in the
Resolution 4 denying reconsideration. The assailed bidding, he shall sell to petitioner fifty percent
Decision affirmed the Resolution 5 of the Land Registration (50%) of the total eventual acquisitions of shares
Authority (LRA) in Consulta No. 2381, which ruled as of and stock in the State Investment Trust, Inc., at
follows: a purchase price equivalent to the successful bid
price per share plus an additional ten percent
PREMISES CONSIDERED, this Authority is of (10%) per share.
the considered view and so holds that the Notice
of Lis Pendens subject of this consulta is not As a result of the loans granted by First Metro in
registrable. 6 consideration of and upon the guaranty of
petitioner Viewmaster, defendant Allen Roxas,
The Facts eventually gained control and ownership of State
Investment Trust, Inc.
The undisputed facts were summarized by the Court of
Appeals as follows: However, notwithstanding the lapse of two (2)
years since defendant Allen Roxas became the
controlling stockholder of State Investment Trust,
The subject property is known as the Las Piñas Inc., he failed to take the necessary action to
property registered in the name of Peltan implement the Joint Venture Project with
Development Inc. (now State Properties petitioner Viewmaster to co-develop the subject
Corporation) covered by Transfer Certificate of properties.1âwphi1.nêt
Title No. (S-17882) 12473-A situated in Barrio
Tindig na Manga, Las Piñas, Rizal.
Thus, petitioner's counsel wrote defendant Allen
Roxas, reiterating petitioner's demand to comply
The Chiong/Roxas family collectively owns and with the agreement to co-develop the Las Piñas
controls State Investment Trust, Inc. (formerly Property and to set in operation all the necessary
State Investment House, Inc.) and is the major steps towards the realization of the said project.
shareholder of the following corporations,
namely: State Land Investment Corporation,
Philippine Development and Industrial On September 8, 1995, petitioner Viewmaster
Corporation and Stronghold Realty Development. filed a Complaint for Specific Performance,
Enforcement of Implied Trust and Damages
against State Investment Trust, Inc. Northeast
Sometime in 1995, the said family decided to Land Development, Inc., State Properties
give control and ownership over the said Corporation (formerly Peltan Development, Inc.)
corporations to only one member of the family, and defendant Allen Roxas, in his capacity as
through the process of bidding among the family Vice-Chairman of State Investment Trust, Inc.,
members/stockholders of the said companies. It and Chairman of Northeast Land Development,
was agreed that the bidder who acquires 51% or
 Inc., State Properties Corporation, which was Whether or not the petitioner failed to adequately
docketed as Civil Case No. 65277. describe the subject property in its complaint and
in the notice of lis pendens.
On September 11, 1995, petitioner Viewmaster
filed a Notice of Lis Pendens with the Register of II
Deeds of Quezon City and Las Piñas for the
annotation of a Notice of Lis Pendens on Transfer Whether or not the Las Piñas property is directly
Certificate of Title No. (S-17992) 12473-A, involved in Civil Case No. 65277. 9
registered in the name of Peltan Development,
Inc. (now State Properties Corporation).
The Court's Ruling
In a letter dated September 15, 1995, the
respondent Register of Deeds of Las Piñas denied The Petition is meritorious.
the request for annotation of the Notice of Lis
Pendens on the following grounds: First Issue:
Description of Property
1. the request for annotation and the
complaint [do] not contain an adequate Petitioner contends that the absence of the property's
description of the subject property; technical description in either the notice of lis pendens or
the Complaint is not a sufficient ground for rejecting its
2. petitioner's action only has an application, because a copy of TCT No. (S-17992) 12473-
incidental effect on the property in A specifically describing the property was attached to and
question. made an integral part of both documents.

On September 20, 1995, petitioner filed an appeal On the other hand, respondents argue that petitioner failed
to the respondent Land Registration Authority, to provide an accurate description of the Las Piñas
which was docketed as Consulta No. 2381. property, which was merely referred to as a "parcel of
land."
On December 14, 1995, the Respondent Land
Registration Authority issued the assailed The notice of lis pendens described the property as follows:
Resolution holding that petitioner's "Notice
of Lis Pendens" was not registrable. 7 A parcel of land situated in the Barrio of Tindig
na Manga, Municipality of Las Piñas, Province of
Ruling of the Court of Appeals Rizal . . . containing an area of Seven Hundred
Eighty Six Thousand One Hundred Sixty Seven
(786,167) square meters, more or less.
In affirming the ruling of the LRA, the Court of Appeals
held that petitioner failed to adequately describe the subject
property in the Complaint and in the application for the By itself, the above does not adequately describe the
registration of a notice of lis pendens. The CA noted that subject property, pursuant to Section 14 of Rule 13 of the
while Transfer Certificate of Title No. (S-17992) 12473-A Rules of Court and Section 76 of Presidential Decree (PD)
indicated six parcels of land, petitioner's application No. 1529. It does not distinguish the said property from
mentioned only one parcel. other properties similarly located in the Barrio of Tindig na
Manga, Municipality of Las Piñas, Province of Rizal.
Indeed, by the above description alone, it would be
Moreover, the CA also ruled that a notice of lis impossible to identify the property.
pendens may be registered only when an action directly
affects the title to or possession of the real property. In the
present case, the proceedings instituted by petitioner In the paragraph directly preceding the description quoted
affected the title or possession incidentally only, not above, however, petitioner specifically stated that the
directly. property referred to in the notice of lis pendens was the
same parcel of land covered by TCT No. (S-17992) 12473-
A:
Hence, this Petition. 8
Please be notified that on 08 September 1995, the
Issues [p]laintiff in the above-entitled case filed an
action against the above-named [d]efendants for
Petitioner submits for the consideration of the Court the specific performance, enforcement of an implied
following issues: trust and damages, now pending in the Regional
Trial Court of Pasig, Branch 166, which action
I involves a parcel of land covered by Transfer
 Certificate Title (TCT) No. (S-17992) 12473-A, Sec. 76. Notice of lis pendens. — No action to
registered in the name of Peltan Development recover possession of real estate, or to quiet title
Incorporated which changed its corporate name thereto, or to remove clouds upon the title
to State Properties Corporation, one of the thereof, or for partition, or other proceedings of
[d]efendants in the aforesaid case. The said parcel any kind in court directly affecting the title to
of land is more particularly described as follows: land or the use or occupation thereof or the
buildings thereon, and no judgment, and no
A parcel of land situated in the Barrio proceeding to vacate or reverse any judgment,
of Tindig na Manga, Municipality of shall have any effect upon registered land as
Las Piñas, Province of Rizal . . . against persons other than the parties thereto,
containing an area of Seven Hundred unless a memorandum or notice stating the
Eighty Six Thousand One Hundred institution of such action or proceeding and the
Sixty Seven (786,167) square meters, court wherein the same is pending, as well as the
more or less. date of the institution thereof, together with a
reference to the number of the certificate of title,
and an adequate description of the land affected
Request is therefore made [for] your good office and the registered owner thereof, shall have been
to record this notice of pendency of the filed and registered.
aforementioned action in TCT No. (S-17892)
12473-A for all legal purposes. 10
In Magdalena Homeowners Association, Inc. v. Court of
Appeals, 12 the Court did not confine the availability of lis
As earlier noted, a copy of the TCT was attached to and pendens to cases involving the title to or possession of real
made an integral part of both documents. Consequently, the property. Thus, it held:
notice of lis pendens submitted for registration, taken as a
whole, leaves no doubt as to the identity of the property,
the technical description of which appears on the attached According to Section 24, Rule 14 13 of the Rules
TCT. We stress that the main purpose of the requirement of Court and Section 76 of Presidential Decree
that the notice should contain a technical description of the No. 1529, a notice of lis pendens is proper in the
property is to ensure that the same can be distinguished and following cases, viz.:
readily identified. In this case, we agree with petitioner that
there was substantial compliance with this requirement. a) An action to recover possession of
real estate;
Second Issue:
Property Directly Involved b) An action to quiet title thereto;

In upholding the LRA, the Court of Appeals held that "the c) An action to remove clouds thereon;
doctrine of lis pendens has no application to a proceeding
in which the only object sought is the recovery of [a] d) An action for partition; and
money judgment, though the title [to] or right or possession
[of] a property may be incidentally affected. It is thus
essential that the property be directly affected where the e) Any other proceedings of any kind in
relief sought in the action or suit includes the recovery of Court directly affecting the title to the
possession, or the enforcement [thereof], or an adjudication land or the use or occupation thereof or
between the conflicting claims of title, possession or right the buildings thereon.
of possession to specific property, or requiring its transfer
or sale." 11 In Villanueva v. Court of Appeals, 14 this Court further
declared that the rule of lis pendens applied to suits brought
On the other hand, petitioner contends that the civil case "to establish an equitable estate, interest, or right in specific
subject of the notice of lis pendens directly involved the real property or to enforce any lien, charge, or
land in question, because it prayed for the enforcement of a encumbrance against it . . . ." Thus, this Court observed that
prior agreement between herein petitioner and Defendant the said notice pertained to the following:
Allen Roxas to co-develop the latter's property.
. . . all suits or actions which directly affect real
We agree with the petitioner. A notice of lis pendens, property and not only those which involve the
which literally means "pending suit," may involve actions question of title, but also those which are brought
that deal not only with the title or possession of a property, to establish an equitable estate, interest, or right,
but even with the use or occupation thereof. Thus, Section in specific real property or to enforce any lien,
76 of PD 1529 reads: charge, or encumbrance against it, there being in
some cases a lis pendens, although at the
commencement of the suit there is no present
vested interest, claim, or lien in or on the
 property which it seeks to charge. It has also been land was merely incidental to the sale of shares of
held to apply in the core of a proceeding to defendant company.
declare an absolute deed of mortgage, or to
redeem from a foreclosure sale, or to establish a The Complaint shows that the loan obtained by Allen
trust, or to suits for the settlement and adjustment Roxas (one of the defendants in the civil case) from First
of partnership interests. Metro was guaranteed by petitioner for two distinct
considerations: (a) to enable it to purchase 50 percent of the
In the present case, petitioner's Complaint docketed as Civil stocks that the said defendant may acquire in State
Case No. 65277 clearly warrants the registration of a notice Investment and (b) to co-develop with the defendants the
of lis pendens. The Complaint prayed for the following Quezon City and the Las Piñas properties of the
reliefs: corporation. In other words, the co-development of the said
properties is a separate undertaking that did not arise from
1. Render judgment ordering the Defendant Allen petitioner's acquisition of the defendant's shares in the
Roxas to sell fifty percent (50%) of his corporation. To repeat, the co-development is not merely
shareholdings in Defendant State Investment to auxiliary or incidental to the purchase of the shares; it is
Plaintiff at the price equivalent to the successful a distinct consideration for Viewmaster's guaranty. 16
bid price per share plus an additional ten percent
(10%) per share and directing Defendants to co- Hence, by virtue of the alleged agreement with Allen
develop with the Plaintiff the subject real Roxas, petitioner has a direct — not merely incidental —
properties; interest in the Las Piñas property. Contrary to respondents'
contention, 17 the action involves not only the collection of
2. Render judgment ordering the Defendant Allen a money judgment, but also the enforcement of petitioner's
Roxas to: right to co-develop and use the property.

a. Pay the Plaintiff the amount of at The Court must stress that the purpose of lis pendens is (1)
least Twenty Million Pesos to protect the rights of the party causing the registration
(P20,000,000.00) and/or such other thereof 18 and (2) to advise third persons who purchase or
amounts as may be proven during the contract on the subject property that they do so at their peril
course of the trial, by way of actual and subject to the result of the pending litigation. 19 One
damages; who deals with property subject of a notice of lis
pendens cannot acquire better rights than those of his
predecessors-in-interest. 20 In Tanchoco v. Aquino, 21 the
b. Pay the Plaintiff the amount of at Court held:
least One Million Pesos
(P1,000,000.00), by way of moral
damages; . . . . The doctrine of lis pendens is founded upon
reason of public policy and necessity, the purpose
of which is to keep the subject matter of the
c. Pay the Plaintiff the amount of at litigation within the power of the court until the
least One Million Pesos judgment or decree shall have been entered;
(P1000,000.00), by way of exemplary otherwise, by successive alienations pending the
damages; litigation, its judgment or decree shall be
rendered abortive and impossible of execution.
d. Pay the Plaintiff the amount of Two Purchasers pendente lite of the property subject
Hundred Fifty Thousand Pesos of the litigation after the notice of lis pendens is
(P250,000.00) by way of attorney's inscribed in the Office of the Register of Deeds
fees; and are bound by the judgment against their
predecessors. . . .
e. Pay expenses of litigation and costs
of suit. 15 Without a notice of lis pendens, a third party who acquires
the property after relying only on the Certificate of Title
Undeniably, the prayer that Defendant Allen Roxas be would be deemed a purchaser in good faith. Against such
ordered to sell 50 percent of his shareholdings in State third party, the supposed rights of petitioner cannot be
Investment does not directly involve title to the property enforced, because the former is not bound by the property
and is therefore not a proper subject of a notice of lis owner's undertakings not annotated in the TCT. 22
pendens. Neither do the various amounts of damages
prayed for justify such annotation. Likewise, there exists the possibility that the res of the civil
case would leave the control of the court and render
We disagree, however, with the Court of Appeals and the ineffectual a judgment therein. Indeed, according to
respondents that the prayer for the co-development of the petitioner, it was not even informed when Allen Roxas
exchanged the Quezon City property for shares of stock in
Northeast Land Development, Inc. 23 Hence, it maintains
that there is a clear risk that the same thing would be done
with the Las Piñas property.

In this light, the CA ruling left unprotected petitioner's

claim of co-development over the Las Piñas property.
Hence, until the conflicting rights and interests are threshed
out in the civil case pending before the RTC, it will be in
the best interest of the parties and the public at large that a
notice of the suit be given to the whole world.

The Court is not here saying that petitioner is entitled to the

reliefs prayed for in its Complaint pending in the RTC.
Verily, there is no requirement that the right to or the
interest in the property subject of a lis pendens be proven
by the applicant. The Rule merely requires that an
affirmative relief be claimed. 24 A notation of lis
pendens neither affects the merits of a case nor creates a
right or a lien. 25 It merely protects the applicant's rights,
which will be determined during the trial.

WHEREFORE, the Petition is hereby GRANTED and the

assailed Decision of the Court of Appeals REVERSED and
SET ASIDE. The Las Piñas Register of Deeds is directed to
cause the annotation of lis pendens in TCT No. (S-17992)
12473-A. No costs.1âwphi1.nêt

SO ORDERED
RUBEN C. REYES, Petitioner,  Bulacan, particularly the manufacture and storage of
vs. chemicals thereat, including the construction of buildings
TANG SOAT ING (JOANNA TANG) and ANDO G. intended for purposes prohibited by the title to the property;
SY, Respondents. (b) making permanent the injunctions issued by this Court’s
orders of May 3, 1982 and December 7, 1983; (c) ordering
DECISION [respondents] to pay [MFR] actual damages in the amount
of Six hundred Thirty-Nine Thousand Six hundred Fifty
(₱639,650.00) Pesos, with legal rate of Twelve (12%)
PEREZ, J.: percent interest from the filing of the complaint on January
15, 1982, until the same is fully paid; (d) ordering
Challenged in this petition for review on certiorari under [respondents] to pay [MFR] exemplary damages in the
Rule 45 of the Rules of Court is the Decision1 of the Court amount One Hundred Thousand (₱100,000.00) Pesos by
of Appeals in CA-G.R. SP No. 96913 annulling and setting way of example of correction for the public good; (e)
aside the Orders2 of the Regional Trial Court (RTC), ordering [respondents] to pay MFR attorney’s fees in the
Branch 7, Malolos, Bulacan which denied respondents amount of One Hundred Thousand (₱100,000.00) Pesos
Tang Soat Ing’s (Joanna Tang’s) and Ando Sy’s Opposition and to pay the costs of suit.3
(To MFR Farm, Inc.’s Motion dated 25 April 2006) and
Motion (To declare void the sale of the property covered by On appeal by respondents docketed as CA G.R. CV No.
TCT No. 198753) dated May 23, 2006. 37808, the Court of Appeals affirmed with modification the
ruling of the RTC: the Court of Appeals reduced the rate of
The controversy arose from a complaint for Enforcement of interest to six percent (6%) and deleted the award of
Easement and Damages with Prayer for Preliminary exemplary damages and attorney’s fees.4
Injunction and Restraining Order filed by MFR Farms, Inc.
(MFR) against respondents docketed as Civil Case No. MFR and respondents filed separate appeals by
1245-M. MFR complained of respondents’ commercial and certiorari5 to this Court questioning the appellate court’s
industrial use of their property covered by Transfer ruling. Unfortunately for the parties, we dismissed both
Certificate of Title (TCT) No. T-198753, and sought the appeals for "late payment of legal fees and late filing of the
enforcement of the encumbrance contained in their title. petition."6 By December 1, 1997, the decision of the Court
MFR likewise asked for the payment of damages suffered of Appeals in CA G.R. CV No. 37808 became final and
by its pig farm resulting from respondents’ illegal use of executory, and was recorded in the Book of Entries of
their property. Judgment.7

After trial, the RTC granted MFR’s complaint and On September 28, 1998, upon motion of MFR, the RTC
specifically held that: issued a Writ of Execution.8 Pursuant thereto, the Branch
Clerk of Court commanded the Sheriff of RTC, Branch 7,
x x x [Respondents] have defied the clear undertaking Malolos, Bulacan, Mr. Leovino Legaspi (Sheriff Legaspi),
stated in the title to the subject property to limit the use to execute the Decision dated September 12, 1991 as
thereof to purposes not commercial or industrial in modified by the Court of Appeals.9 Sheriff Legaspi was
character. x x x [U]sing the land as a chemical processing likewise ordered to accomplish a return of the proceedings
site and as a storage facility for chemicals is devoting it to taken thereon in accordance with Section 14, Rule 39 of the
industrial purposes, which is not allowed under the Rules of Court.
subsisting encumbrance on the property.
On January 4, 1999, Sheriff Legaspi submitted a Sheriff’s
x x x [R]elief is owing to [MFR], but the grant thereof is Report manifesting:
rendered all the more imperative in light of the manifestly
injurious effects which the business of [respondents] is That on October 2, 1998[,] the undersigned was in receipt
causing to the neighboring estate, if not to the entire of the Writ of Execution issued by Hon. Danilo A.
locality. x x x By more than mere preponderance of Manalastas for service thereof;
evidence has it been established that the gaseous by-
products of the chemical manufacturing process are
outright pollutants which cause direct and manifest harm to That on October 9, 1998[,] the undersigned served copy of
humans and animals alike, not to mention other living the Writ of Execution and copy of the Notice dated October
things. 9, 1998 to [respondent] Tang Soat Ing giving him five (5)
days to comply [with] his obligations under the Writ of
Execution, thru Rodolfo Mendez, caretaker of the
xxxx [respondents], at Tungkong Mangga, San Jose del Monte,
Bulacan. The undersigned inquired from the said caretaker
WHEREFORE, judgment is hereby rendered: (a) ordering about the personal properties of Tang Soat Ing but he was
[respondents] to desist from the further conduct of told that Tang Soat Ing has no more properties and the
industrial or commercial activities on the parcel of land factory located in the compound is being leased to other
covered by TCT No. T-198753 of the Registry of Deeds of people;
That on December 10, 1998[,] the undersigned went back Province to cancel TCT No. T-198753 in the name of
to Tang Soat Ing at Tungkong Mangga, Sa Jose del Monte, respondents, and issue a new certificate of title in the name
Bulacan but said person was not there and also Rodolfo of MFR.
Mendez was not around because he was in Manila;
On September 28, 2004, the RTC denied the Motion
That on December 28, 1998[,] the undersigned went back holding that a mere motion is not sufficient for the
to Tungkong Mangga, San Jose del Monte, Bulacan and cancellation of a certificate of title. The RTC ruled that
talked to the caretaker[,] Rodolfo Mendez[,] and asked him under Section 10718 of Presidential Decree No. 1529, the
what happened to the papers he gave to [respondent] Tang Property Registration Decree, a petition and a hearing are
Soat Ing. The caretaker said that [respondent Tang Soat required for the issuance of a new certificate of title.
Ing] called his lawyer and informed [the latter] about the
papers he received. The caretaker also told the undersigned On December 1, 2004, MFR filed a Petition19 in the same
that he [did] not know what the lawyer said.10 case, under the same docket number, Civil Case No. 1245-
M, before the same execution court. In this new petition,
A few days thereafter, on January 7, 1999, Sheriff Legaspi MFR impleaded the Register of Deeds as additional
presented the Writ of Execution and the Notice of Levy on defendant and prayed for the same reliefs as those prayed
Execution of Real Property11 covering TCT No. T-198753 for in their previous motion with an additional prayer for
to the Register of Deeds of Bulacan Province. the issuance of an order directing respondents to
immediately surrender the Owner’s Duplicate Copy of TCT
On February 4, 1999, the Notice of Levy was inscribed on No. T-198753.
TCT No. T-198753.12
On three separate occasions, December 9, 2004 and
On May 7, 1999, Sheriff Legaspi issued a Notice of Sale on February 8 and 17, 2005, respondents, through their
Execution of Real Property13 which he likewise posted on counsel of record, Atty. T. J. Sumawang (Atty.
the following places: Sumawang), received a copy of the Petition.20

(a) The Bulletin Board of Municipal Hall of San Respondents failed to file an Answer or any responsive
Jose del Monte, Bulacan; pleading to MFR’s Petition. Consequently, MFR moved to
declare respondents in default. The Motion to Declare
Respondents in Default was served on Atty. Sumawang on
(b) The Bulletin Board of the Church of San Jose June 11, 2005.
del Monte, Bulacan;
The RTC granted MFR’s Motion to Declare Respondents
(c) The Bulletin Board of the Chapel of Gaya- in Default: thereafter, MFR presented evidence ex-parte.
gaya, San Jose del Monte, Bulacan;
During presentation of evidence ex-parte, MFR filed a
(d) The Bulletin Board of the main entrance of Motion for Substitution of Party Petitioner attaching thereto
the Provincial Capitol Building of Malolos, a Deed of Transfer of Interest declaring petitioner Ruben C.
Bulacan; and Reyes’ (Reyes) acquisition of MFR’s rights over the
subject property. On January 2, 2006, the RTC issued an
(e) The Posting Board of the Office of the Ex- Order granting this latest motion: MFR was substituted by
Officio Sheriff located at the back of the Reyes as party-petitioner.
Bulwagan ng Katarungan Building, Malolos,
Bulacan.14 In an Order dated January 10, 2006, the RTC granted the
Petition, thus:
On June 12, 19 & 26, 1999, the Notice of Sale on
Execution of Real Property was published in The Times WHEREFORE, finding merit in the instant petition, the
Newsweekly.15 same is hereby granted. Accordingly, defendant/private
respondent Tang Soat Ing (Joanna Tang) is hereby directed
On July 19, 1999, at the public auction of the subject to surrender to the Court her duplicate owner’s copy of
property covered by TCT No. T-198753, MFR was TCT No. T-198753 within thirty (30) days from receipt of
declared as the highest bidder. On even date, Sheriff this Order. In [the event said] defendant/private respondent
Legaspi issued a Certificate of Sale16 which was registered fails to surrender such owner’s duplicate copy as directed
with the Register of Deeds of Bulacan Province. hereinabove, the Register of Deeds of Bulacan is hereby
directed to cancel TCT No. T-198753 and issue in lieu
After more than five (5) years, on September 17, 2004, thereof a new owner’s duplicate certificate of title in the
with respondents failing to exercise their right of name of Ruben C. Reyes, who has substituted [MFR] by
redemption, MFR filed a Motion17 asking the RTC to issue virtue of a Deed of Transfer of Interest and pursuant to the
an order directing the Register of Deeds of Bulacan order of this court dated January 02, 2006.21
Copies of the Order were separately served on Atty. 1999 in favor of [petitioner Reyes, substituting MFR]
Sumawang, Atty. Anacleto Diaz (Reyes’ counsel) and the covering the parcel of land embraced in Transfer Certificate
Register of Deeds of Bulacan Province on January 20 and of Title No. T-198753 is likewise declared null and void.27
February 2, 2006, respectively.22 However, service thereof
to respondents’ counsel was returned and rendered Aggrieved, Reyes filed a Motion for Reconsideration which
impossible. Apparently, Atty. Sumawang had already died resulted in another exchange of pleadings between the
in December 2005.23 parties. On December 9, 2008, the Court of Appeals denied
the motion.
On April 27, 2006, Reyes filed another Motion praying that
the Register of Deeds of Bulacan Province be directed to Hence, this impasse with the following issues for our
cancel TCT No. T-198753 in the name of respondents and resolution:
to issue a new one in his (Reyes’) name.
1. Whether the execution sale of the subject
On May 19, 2006, new counsel for respondents entered its property covered by TCT No. T-198753 is void;
appearance. Forthwith, on May 23, 2006, respondents,
through their new counsel, filed the previously adverted to
Opposition and Motion,24 opposing Reyes’ April 27, 2006 2. Proceeding from the validity of the execution
Motion and moving to declare void the sale of the subject sale and the consolidation of Reyes’ ownership
property. over the subject property, whether Section 107 of
Presidential Decree No. 1529 contemplates the
filing of a separate cadastral case before the RTC
After an exchange of pleadings from the parties, the RTC acting as a land registration court.
issued the Order denying respondents’ Opposition and
Motion for lack of merit. The RTC ruled that, "Section 107
of PD 1529 does not categorically state that the petition x x The petition is partially impressed with merit.
x should be in the form of a separate, distinct and original
action to be filed in another court, as otherwise it will In declaring void the execution sale, the appellate court
create a situation in which the final judgment of a court, noted that petitioner did not strictly comply with the
and its enforcement, may be subject to a review of, or even requirements of Section 15, Rule 39 of the Rules of Court.
reversal by another court of co-equal jurisdiction."25 As The Court of Appeals relied on our holding in Villaceran v.
regards the motion to declare void the execution sale of the Beltejar,28 an administrative case finding therein respondent
subject property covered by TCT No. T-198753, the RTC Sheriff guilty of simple neglect of duty for failure to strictly
noted that "there was substantial compliance with the comply with the rules on execution sale. The Court of
requirements of [Section 15, Rule 39 of the Rules of Court Appeals ruled that the deficiencies in the notice of
evidenced] in the Sheriff’s Report dated January 4, 1999, as execution sale were substantial and of such nature as to
well as the publication and posting requirements, extant in prevent the court from applying the presumption of
the records of this case."26 In conclusion, the RTC ruled regularity in the performance of official functions by
that respondents are estopped from questioning the Sheriff Legaspi at the time of the execution sale. On this
proceedings, after keeping silent thereon for a long time, score, the Court of Appeals pointed out that it was
despite notice thereof. incumbent upon Reyes’ part to prove that the requirements
of the law on execution sale have been fully complied with.
Respondents filed a Motion for Reconsideration which the
RTC denied in its Order dated October 20, 2006. We disagree.

Gaining no reprieve from the RTC, respondents filed a Contrary to the Court of Appeal’s holding, the burden of
petition for certiorari before the Court of Appeals seeking evidence to prove lack of compliance with Section 15, Rule
to: (1) nullify the trial court’s twin Orders dated July 17, 39 of the Rules of Court rests on the party claiming lack
2006 and October 20, 2006, respectively; and (2) declare thereof i.e., respondents.
void the execution proceedings relating to the sale of the
subject property and the cancellation of TCT No. T- In Venzon v. Spouses Juan,29 we declared that the judgment
198753. debtor, as herein respondents, alleging lack of compliance
with the posting and publication requirements of the
In yet another turn of events, the appellate court annulled auction sale in accordance with the rules, is behooved to
and set aside the July 17, 2006 and October 20, 2006 prove such allegation. We held, thus:
Orders of the RTC:
x x x. Whoever asserts a right dependent for its existence
WHEREFORE, the Petition is GRANTED and the Orders upon a negative, must establish the truth of the negative by
issued on July 17 and October 20, 2006 are ANNULLED a preponderance of the evidence. This must be the rule, or
and SET ASIDE. The public auction sale of the property it must follow that rights, of which a negative forms an
held on July 19, 1999 is declared invald and the Certificate essential element, may be enforced without proof. Thus,
of Sale issued by Sheriff Leovino G. Legaspi on July 19, whenever the [party’s] right depends upon the truth of a
negative, upon him is cast the onus probandi, except in that respondents had constructive, if not actual, notice of
cases where the matter is peculiarly within the knowledge the execution proceedings from the issuance of the Writ of
of the adverse party. Execution, the levy on the subject property,32 its subjection
to execution sale, up to and until the proceedings in the
It was error, therefore, for the trial court to hold that: RTC relating to the issuance of a new certificate of title
over the subject property. Certainly, respondents are
precluded from feigning ignorance of MFR (substituted by
Defendants did not present evidence to rebut the "no Reyes) staking a claim thereon.
notice" allegation of the plaintiff. Although in the
defendant spouses’ pre-trial brief, there is that general
allegation that the auction sale was made in accordance There was substantial compliance with Section 15, Rule 39
with law, however, there is no showing in the record that of the Rules of Court: the documents in support thereof,
the requirements with respect to publication/posting of i.e., the Certificate of Posting issued by Sheriff Legaspi and
notices were complied with by the defendants. the Affidavit of Publication executed by the publisher of
The Times Newsweekly, appear to be in order.33 In this
case, the purpose of giving notice through posting and
Deliberating on the absence of notice, the fact that the publication under Section 15(c) of the same rule—to let the
plaintiff did not come to know that Lot 12 was being public know of the sale to the end that the best price or a
subjected to an auction sale proves two things: one, that no better bid may be made possible to minimize prejudice to
notice was posted in the place where the property is located the judgment debtor—was realized.
[and, two, that] there was no auction sale that took place on
March 30, 1992. . . .
Another thing militates against respondents’ claim of lack
of knowledge of the encumbrance on their property—the
Further, the defendants, particularly defendant sheriff, who separate registrations of: (1) the Notice of Levy on TCT
is the most competent person to testify that a written notice No. T-198753; (2) the Certificate of Sale.
of sale was made and posted in accordance with law, was
not presented to the witness stand. Neither was a document
presented like Sheriff’s Certificate of Posting to attest to In this jurisdiction, we adhere to the doctrine that
the fact that a written notice of sale was posted before the registration in a public registry works as constructive notice
property was allegedly sold at public auction. In fact, the to the whole world.34 Section 51 of Act No. 496, as
record is silent as (to) where the auction sale was amended by Section 52 of Presidential Decree No. 1529,
conducted. provides:

By ruling in the foregoing manner, the trial court SECTION 52. Constructive notice upon registration.—
incorrectly shifted the plaintiff’s burden of proof to the Every conveyance, mortgage, lease, lien, attachment, order,
defendants. It is true that the fact of posting and publication judgment, instrument or entry affecting registered land
of the notices is a matter "peculiarly within the knowledge" shall, if registered, filed or entered in the Office of the
of the Deputy Sheriff. However, the trial court did not Register of Deeds for the province or city where the land to
acquire jurisdiction over him, as he was not served with which it relates lies, be constructive notice to all persons
summons. At the time of the filing of the complaint, he was from the time of such registering, filing, or entering.
"no longer connected" with the Caloocan RTC, Branch
126, which issued the writ of execution. Hence, he could And, quite undeniably, respondents had constructive notice
not testify in his own behalf. that their property is subject of execution proceedings
arising from their judgment debt and in danger of forfeiture
x x x [T]he duty imposed by Section [18] (c) is reposed to their judgment creditor.
upon the sheriff, who is charged with the enforcement of
the writ. Respondent spouses had a right to presume that he Respondents consistently flouted the judgment in Civil
had regularly performed his duty. It was not incumbent Case No. 1245-M, as amended by the Decision of the Court
upon them to present him as a witness for, in the absence of of Appeals in CA G.R. CV No. 37808, which became final
the sheriff, the burden to prove lack of posting and and executory on December 1, 1997, by their utter failure
publication remained with petitioner.30 (Emphasis supplied) to respond to the processes of the RTC in the execution
proceedings despite their receipt of notice at each stage
Respondents made no attempt to meet this burden of thereof. At the very least, respondents’ attack on the
evidence, simply maintaining lack of notice of the entire validity of the execution proceedings, culminating in the
proceedings (execution and issuance of a new title over the execution sale of the subject property, is barred by laches.
subject property) before the trial court.
Laches is the failure or neglect, for an unreasonable and
We cannot subscribe to respondents’ belated posturing. The unexplained length of time, to do that which by exercising
disputable presumption that official duty has been regularly due diligence could or should have been done earlier; it is
performed was not overcome by respondents.31 The negligence or omission to assert a right within a reasonable
documents on record lead us to the inevitable conclusion time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert devised by the losing party.39 We completely agree with the
it.35 Laches thus operates as a bar in equity.36 RTC’s disquisition, thus:

We hearken to the time-honored rule anchored on public Finally, after [MFR] had filed the petition in question
policy: pursuant to and in compliance with the order of this court
dated September 28, 2004, to which no answer or any
[R]elief will be denied to a litigant whose claim or demand responsive pleading was filed by respondents or thru their
has become "stale," or who has acquiesced for an lawyer, as the latter was certainly notified of the
unreasonable length of time, or who has not been vigilant proceedings in said petition, respondents cannot now assail
or who has slept on his rights either by negligence, folly or said proceedings after keeping silent thereon for a long
inattention. In other words, public policy requires, for time, and if indeed there was neglect on the part of their
peace of society, the discouragement of claims grown stale lawyer in informing them of or in taking part in said
for non-assertion; thus laches is an impediment to the proceedings, such negligence of their counsel binds them as
assertion or enforcement of a right which has become, client. There is likewise an evident lack of prudence and
under the circumstances, inequitable or unfair to due diligence on the part of the respondents by their failure
permit.37 (Emphasis supplied) to inform this court of the withdrawal of their former
counsel for a long period of time, and they cannot now, by
feigning ignorance of the proceedings had in the petition in
The records bear out that as of October 9, 1998, and on two question, assail the same thru a new counsel. In other
occasions thereafter, December 10 & 28, 1998, Sheriff words, respondents cannot be allowed to keep silent on or
Legaspi served a copy of the Writ of Execution on refuse to participate in proceedings that they know were
respondents, and followed up thereon. With no action taking place in connection with a final judgment rendered
forthcoming from respondents, who are ostensibly evading against them and then suddenly, after said proceedings
payment of their judgment debt, the Sheriff correctly levied were long terminated, come to court to question the same
on the subject property. For more than five (5) years from through a new counsel. The respondents are clearly in
the execution sale thereof, with respondents not exercising estoppel. Also, the court finds no practical purpose and
their right of redemption, up to the filing of a Motion, and benefit in sustaining the theory posited by respondents
subsequently, a Petition for the issuance of a new certificate which, aside from the reasons advanced earlier, will have
of title over the property in Reyes’ name, respondents made no other effect than to further unduly delay the execution of
no effort to settle their judgment debt, much less, to a judgment that had long acquired finality.40
ascertain the status of the execution proceedings against
them and the levy on, and consequent sale of, their
property. Truly significant is the fact that eight (8) years xxxx
had lapsed, from the time respondents received a copy of
the Writ of Execution in October 1998 until they, through Respondents are clearly estopped from assailing the
their new counsel, filed the Opposition and Motion in May proceedings in question by their failure or refusal to
2006, before respondents were prodded into action. participate therein despite their or their counsel’s
knowledge thereof, and it would be unjust for the plaintiff
We find obvious respondents’ brazen ploy to forestall and to allow respondents to put in issue the validity of said
thwart the execution of a final and executory judgment proceedings at this late stage, thru another counsel, as they
against them. The death of their counsel, Atty. Sumawang, are bound by the action or inaction of their former
and their engagement of a new one, does not minimize the counsel.41
hard fact that respondents had notice of, not only the
execution proceedings, but also, the proceedings on the The Court of Appeal’s reliance on Villaceran v.
issuance of a new title over the subject property. Yet, Beltejar42 is misplaced. Villaceran is an administrative case
respondents did not act on any of these notices which were finding the Sheriff guilty of simple neglect of duty for
duly received by Atty. Sumawang. Respondents’ Motion to failure to strictly comply with the rules on execution sale.
nullify the execution proceedings, from the levy on the We held therein that there was no substantial compliance
subject property and sale thereof, is an afterthought, a last- by the Sheriff with Section 15(c), Rule 39 of the Rules of
ditch effort to evade payment of their judgment debt. Their Court. Our declaration that "[n]o reason exists not to apply
claim of ignorance of the execution proceedings flies in the the principle in the extrajudicial foreclosure sales of real
face of the documents on record. This bare-faced claim property (statutory requirements of posting and publication
cannot trump the disputable presumption that a person must be strictly complied with since non-compliance could
takes ordinary care of his concerns.38 Consequently, constitute a jurisdictional defect that would invalidate the
respondents are estopped and barred from assailing the sale) to execution sales of real property under Rule 39 of
execution proceedings before the RTC. the Rules of Court"43 is an obiter which should not be
definitive of the facts obtaining herein.
Time and again, we have held that once a judgment
becomes final and executory, the prevailing party should The facts of this case demonstrate respondents’ stubborn
not be denied the fruits of his victory by some subterfuge refusal to comply with the judgment against them by
claiming lack of notice of the execution proceedings. We
reiterate that this claim is belied by the evidence on record certificate cannot be delivered, the court may order the
and cannot invalidate the enforcement and execution of a annulment of the same as well as the issuance of a new
final and executory judgment of this Court. On the whole, certificate of title in lieu thereof. Such new certificate and
respondents’ silence and inaction for eight (8) years from all duplicates thereof shall contain a memorandum of the
the time the subject property was validly levied upon by the annulment of the outstanding duplicate.
RTC, bars them from claiming invalidity of the execution
proceedings. That a succeeding registration of property in another’s
name, after its original registration, contemplates a separate
Notwithstanding the validity of the execution sale and original action is reinforced by our ruling in Padilla v.
Reyes’ consolidation of ownership over the subject Philippine Producers’ Cooperative Marketing Association,
property upon the lapse of the redemption period, we hold Inc.47 Answering the question: "In implementing the
that Section 107 of Presidential Decree No. 1529 involuntary transfer of title of real property levied and sold
contemplates the filing of a separate and original action on execution, is it enough for the executing party to file a
before the RTC, acting as a land registration motion with the court which rendered judgment, or does he
court.1avvphi1 need to file a separate action with the Regional Trial
Court," we unequivocally declared, thus:
Reyes argues that to require him to "file his petition in
another court would unduly divest the RTC of its Petitioner is correct in assailing as improper respondent’s
jurisdiction to enforce its final and executory decision." filing of a mere motion for the cancellation of the old TCTs
Reyes invokes our ruling in Natalia Realty, Inc. v. Court of and the issuance of new ones as a result of petitioner’s
Appeals44 where we declared that "jurisdiction of the court refusal to surrender his owner’s duplicate TCTs.
to execute its judgment continues even after the judgment
has become final for the purpose of enforcement of Indeed, this called for a separate cadastral action initiated
judgment."45 via petition.

Reyes’ reasoning is off tangent. Natalia is inapplicable Section 107 of PD 1529, formerly Section 111 of Act 496,
because the execution proceedings in this case have been provides:
completed and was terminated upon the execution sale of
the subject property. Reyes already consolidated ownership
over the subject property; as owner, he has a right to have xxxx
the same registered in his name. This transfer of title to the
subject property in Reyes’ name is no longer part of the Respondent alleges that it resorted to filing the contested
execution proceedings: the fact of levy and sale constitutes motion because it could not obtain new certificates of title,
execution, not so is the action for the issuance of a new considering that petitioner refused to surrender his owner’s
title.46 duplicate TCTs. This contention is incorrect. The proper
course of action was to file a petition in court, rather than
Indeed, the subsequent filing of a separate and original merely move, for the issuance of new titles. This was the
action for the titling of the subject property in Reyes’ name, procedure followed in Blancaflor by Sarmiento Trading
no longer involves the execution of the judgment in Civil which was in more or less the same situation as the
Case No. 1245-M. respondent in this case:

Section 107 of the Property Registration Decree falls under Petitioners reliance on prescription and laches is unavailing
PETITIONS AND ACTIONS AFTER ORIGINAL in this instance. It was proper for Sarmiento Trading
REGISTRATION, Chapter X thereof. The provision reads: Corporation to file a petition with the Court of First
Instance of Iloilo, acting as a cadastral court, for the
cancellation of TCT No. 14749 in the name of Gaudencio
SECTION 107. Surrender of withhold duplicate Blancaflor and the issuance of another in its name. This is a
certificates. – Where it is necessary to issue a new procedure provided for under Section 78 of Act No. 496
certificate of title pursuant to any involuntary instrument and Section 75 of PD No. 1529. . . .
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 Section 78 of Act 496 reads:
surrender the owner's duplicate certificate of title, the party
in interest may file a petition in court to compel surrender Sec. 78. Upon the expiration of the time, if any allowed by
of the same to the Register of Deeds. The court, after law for redemption after registered land has been sold on
hearing, may order the registered owner or any person any execution, or taken or sold for the enforcement of any
withholding the duplicate certificate to surrender the same, lien of any description, the person claiming under the
and direct the entry of a new certificate or memorandum execution or under any deed or other instrument made in
upon such surrender. If the person withholding the the course of the proceedings to levy such execution or
duplicate certificate is not amenable to the process of the enforce any lien, may petition the court for the entry of a
court, or if not any reason the outstanding owner's duplicate new certificate to him, and the application may be
granted: Provided, however, That every new certificate MFR Farms, Inc. (substituted by petitioner Ruben
entered under this section shall contain a memorandum of C. Reyes) covering the parcel of land embraced
the nature of the proceeding on which it is based: Provided, in Transfer Certificate of Title No. T-198753 is
further, That at any time prior to the entry of a new likewise declared VALID; and
certificate the registered owner may pursue all his lawful
remedies to impeach or annul proceedings under execution 3. The Petition49 dated October 29, 2004 filed by
or to enforce liens of any description. MFR Farms, Inc. (substituted by Ruben C.
Reyes) is DISMISSED without prejudice to re-
Section 75 of PD 1529 provides: filing as a separate original action pursuant to
Section 107 of Presidential Decree No. 1529.
Sec. 75. Application for new certificate upon expiration of
redemption period. ─ Upon the expiration of the time, if SO ORDERED
any, allowed by law for redemption after the registered land
has been sold on execution, or taken or sold for the
enforcement of a lien of any description, except a mortgage
lien, the purchaser at such sale or anyone claiming under
him may petition the court for the entry of a new certificate
to him.

Before the entry of a new certificate of title, the registered

owner may pursue all legal and equitable remedies to
impeach or annul such proceedings.

It is clear that PD 1529 provides the solution to

respondent’s quandary.1avvphi1 The reasons behind the
law make a lot of sense; it provides due process to a
registered landowner (in this case the petitioner) and
prevents the fraudulent or mistaken conveyance of land, the
value of which may exceed the judgment obligation. x x x.

While we certainly will not condone any attempt by

petitioner to frustrate the ends of justice − the only way to
describe his refusal to surrender his owner’s duplicates of
the certificates of title despite the final and executory
judgment against him − respondent, on the other hand,
cannot simply disregard proper procedure for the issuance
to it of new certificates of title. There was a law on the
matter and respondent should have followed it.

In any event, respondent can still file the proper petition

with the cadastral court for the issuance of new titles in its
name.48 (Emphasis supplied).

Plainly, Reyes must institute a separate cadastral action

initiated via petition.

WHEREFORE, the petition is PARTLY GRANTED. The

Decision of the Court of Appeals in CA G.R. SP No. 96913
annulling and setting aside the Orders dated July 17, 2006
and October 20, 2006 issued by the Regional Trial Court,
Branch 7, Malolos, Bulacan in Civil Case No. 1245-M is
MODIFIED:

1. The public auction sale of the subject property

covered by TCT No. T-198753 on July 19, 1999
is declared VALID;

2. The Certificate of Sale issued by Sheriff

Leovino Legaspi on July 19, 1999 in favor of
ESTANISLAO PADILLA, JR., Petitioner,  When petitioner failed to exercise his right of redemption
vs. within the 12-month period allowed by law, the court, on
PHILIPPINE PRODUCERS’ COOPERATIVE motion of respondent, ordered on February 5, 1992 the
MARKETING ASSOCIATION, INC., Respondent. issuance of a writ of possession for the sheriff to cause the
delivery of the physical possession of the properties in
DECISION favor of respondent.13

CORONA, J.: On May 17, 1995, respondent filed a motion to direct the

Register of Deeds to issue new titles over the properties in
its name, alleging that the Register of Deeds (RD) of Bago
In implementing the involuntary transfer of title of real City would not issue new titles (in respondent’s name)
property levied and sold on execution, is it enough for the unless the owner’s copies were first surrendered to him.
executing party to file a motion with the court which Respondent countered that such surrender was impossible
rendered judgment, or does he need to file a separate action because this was an involuntary sale and the owner’s copies
with the Regional Trial Court? were with petitioner.14

This is a petition for review on certiorari1 from a decision On July 3, 1995, the trial court issued an order granting the
motion. In a subsequent order dated August 8, 1995, it
of the Court of Appeals in CA-G.R. CV No. 53085,2 and its denied petitioner’s motion for reconsideration. Petitioner
resolution denying reconsideration,3 both of which affirmed appealed. Four years later, the Court of Appeals rendered
the orders of the Regional Trial Court of Bacolod City, the assailed decision affirming the order of the trial court.
Branch 51.4
Petitioner contends that respondent’s motion for the RD to
The undisputed facts of the case follow.5 cancel the existing certificates of title and issue new ones in
its name was in fact a real action and that the motion was
Petitioner and his wife are the registered owners of the procedurally infirm because respondent did not furnish him
following real properties: Lot Nos. 2904-A (covered by a copy.15 He also claims that under Section 6 of Rule 39 of
TCT No. T-36090), 2312-C-5 (covered by TCT No. T- the 1997 Rules of Civil Procedure, the execution of the
3849), and 2654 (covered by TCT No. T-8053), all situated judgment was barred by prescription, given that the motion
in Bago City. was filed more than 5 years after the writ of execution was
issued on March 23, 1990.16 He also argues that respondent
failed to follow the correct procedure for the cancellation of
Respondent is a marketing cooperative which had a money a certificate of title and the issuance of a new one, which is
claim against petitioner. contained in Section 107 of PD 1529.17

On April 24, 1987, respondent filed a civil case against In its comment,18 respondent claims that the motion dated
petitioner for collection of a sum of money in the Regional May 15, 1995 to direct the RD to issue new certificates of
Trial Court of Bacolod City.6 Despite receipt of summons title was but a continuation of the series of events that
on May 18, 1987, petitioner (then defendant) opted not to began with the decision in its favor on November 28, 1989,
file an answer.7 On March 3, 1988, respondent (then and from there, the auction of the properties and the
plaintiff) moved to have petitioner-defendant declared in issuance of a certificate of sale in 1990.
default, which the trial court granted on April 15,
1988.8 Respondent presented its evidence on October 9,
1989.9On November 28, 1989, the trial court rendered a The two principal issues for consideration are:
decision in respondent’s favor.10 Petitioner was furnished a
copy of this decision by mail on November 29, 1989 but, (1) whether or not respondent’s right to have new titles
because of his failure to claim it, the copy was returned.11 issued in its name is now barred by prescription and

On May 31, 1990, the Court issued a writ of execution. On (2) whether or not the motion in question is the proper
June 4, 1990, the three lots (Lot 2904-A, Lot 2312-C-5 and remedy for cancelling petitioner’s certificates of title and
Lot 2654), all of the Bago Cadastre and registered in new ones issued in its name.
petitioner’s name, were levied by virtue of that writ. On
July 4, 1990, sheriff Renato T. Arimas auctioned off the On the first issue, we rule that the respondent’s right to
lots to satisfy the judgment, with respondent as the only petition the court for the issuance of new certificates of title
bidder. On July 10, 1990, ex-officio provincial sheriff and has not yet prescribed.
clerk of court Antonio Arbis executed a certificate of sale
in favor of respondent. On August 13, 1990, the certificate
of sale was recorded in the Register of Deeds.12 In Heirs of Blancaflor vs. Court of Appeals,19 Sarmiento
Trading Corporation, predecessor-in-interest of the private
respondent Greater Manila Equipment Marketing
Corporation, secured a writ of execution in 1968 by virtue
of which it levied real property belonging to petitioners’ of Civil Procedure is misplaced. The fact of levy and sale
predecessor-in-interest, Blancaflor. When the property was constitutes execution, and not the action for the issuance of
auctioned, Sarmiento Trading bid successfully and, in a new title. Here, because the levy and sale of the
1970, after the lapse of the one-year redemption period, properties took place in June and July of 1990,
consolidated its ownership over the lot. respectively, or less than a year after the decision became
final and executory, the respondent clearly exercised its
Sarmiento Trading then filed a petition with the Court of rights in timely fashion.
First Instance to order the cancellation of Blancaflor’s title
and the issuance of a new one in its name. In 1972, In addition, petitioner himself admits his failure to redeem
Sarmiento Trading sold the lot to private respondent which, the properties within the one-year period by adopting the
at the time, went by the name Sarmiento Distributors facts stated in the Court of Appeals’ decision.21 There is
Corporation. thus no doubt he had been divested of his ownership of the
contested lots.
In 1988, the Deputy Register of Deeds of Iloilo wrote to
Blancaflor requesting him to surrender his owner’s Respondent’s position hinges on petitioner’s failure to
duplicate copy of the TCT. Blancaflor did not comply and redeem the properties 12 months after the certificate of sale
the RD refused to issue a new title. On May 25, 1989, was recorded in the Register of Deeds on August 13, 1990.
private respondent filed a petition in the Regional Trial There is no uncertainty about respondent’s having become
Court praying that the petitioners be ordered to surrender the new lawful owner of the lots in question by virtue of the
the owner’s duplicate copy of the title. The petitioners levy and the execution sale.
refused, claiming that respondent’s cause of action had
already prescribed. Ruling otherwise, we stated: On the other hand, the issue of whether to acquire new
titles by mere motion or through a separate petition is an
It is settled that execution is enforced by the fact of levy entirely different matter.
and sale. The result of such execution sale—with
Sarmiento Trading Corporation as the highest bidder—was Petitioner is correct in assailing as improper respondent’s
that title to Lot No. 22 of TCT No. 14749 vested filing of a mere motion for the cancellation of the old TCTs
immediately in the purchaser subject only to the judgment and the issuance of new ones as a result of petitioner’s
debtor’s right to repurchase. Therefore, upon Sarmiento refusal to surrender his owner’s duplicate TCTs.
Trading Corporation’s purchase of Lot No. 22 covered
by TCT No. 14749 at the auction sale, private
respondent’s successor-in-interest had acquired a right Indeed, this called for a separate cadastral action initiated
over said title. via petition.

The right acquired by the purchaser at an execution sale is Section 107 of PD 1529,22 formerly Section 111 of Act
inchoate and does not become absolute until after the 496,23 provides:
expiration of the redemption period without the right of
redemption having been exercised. But inchoate though it Sec. 107. Surrender of withheld duplicate certificates.—
be, it is like any other right, entitled to protection and must Where it is necessary to issue a new certificate of title
be respected until extinguished by redemption. Gaudencio pursuant to any involuntary instrument which divests the
Blancaflor was not able to redeem his property after the title of the registered owner against his consent or where a
expiration of the redemption period, which was 12 voluntary instrument cannot be registered by reason of the
months after the entry or annotation of the certificate of refusal or failure of the holder to surrender the owner’s
sale made on the back of TCT No. 14749. Consequently, duplicate certificate of title, the party in interest may file a
he had been divested of all his rights to the petition in court to compel the surrender of the same to the
property. (underscoring ours) Register of Deeds. The court, after hearing, may order the
registered owner or any person withholding the duplicate
In this case, the rule being invoked by petitioner20 states: 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
SEC. 6. Execution by motion or by independent action.—A to the process of the court, or if for any reason the
final and executory judgment or order may be executed on outstanding owner’s duplicate certificate cannot be
motion within five (5) years from the date of its entry. After delivered, the court may order the annulment of the same as
the lapse of such time, and before it is barred by the statute well as the issuance of a new certificate of title in lieu
of limitations, a judgment may be enforced by action. The thereof. Such new certificate and all duplicates thereof shall
revived judgment may also be enforced by motion within contain a memorandum of the annulment of the outstanding
five (5) years from the date of its entry and thereafter by duplicate.
action before it is barred by the statute of limitations.
Respondent alleges that it resorted to filing the contested
As should be evident from Blancaflor, petitioner Padilla’s motion because it could not obtain new certificates of title,
reliance on Section 6 of Rule 39 of the 1997 Revised Rules
considering that petitioner refused to surrender his owner’s While we certainly will not condone any attempt by
duplicate TCTs. This contention is incorrect. The proper petitioner to frustrate the ends of justice― the only way to
course of action was to file a petition in court, rather than describe his refusal to surrender his owner’s duplicates of
merely move, for the issuance of new titles. This was the the certificates of title despite the final and executory
procedure followed in Blancaflor by Sarmiento Trading judgment against him ― respondent, on the other hand,
which was in more or less the same situation as the cannot simply disregard proper procedure for the issuance
respondent in this case:24 to it of new certificates of title. There was a law on the
matter and respondent should have followed it.
Petitioners’ reliance on prescription and laches is
unavailing in this instance. It was proper for Sarmiento In any event, respondent can still file the proper petition
Trading Corporation to file a petition with the Court of with the cadastral court for the issuance of new titles in its
First Instance of Iloilo, acting as a cadastral court, for name.
the cancellation of TCT No. 14749 in the name of
Gaudencio Blancaflor and the issuance of another in its WHEREFORE, the instant petition is hereby GRANTED.
name. This is a procedure provided for under Section 78 of The decision of the Court of Appeals in CA-G.R. CV No.
Act No. 496 and Section 75 of PD No. 1529… 53085 is hereby REVERSED. The order of the Regional
Trial Court of Bacolod City ordering the Register of Deeds
Section 78 of Act 496 reads: of Bago City to issue new certificates of title in favor of
respondent is ANULLED.
Sec. 78. Upon the expiration of the time, if any allowed by
law for redemption after registered land has been sold on SO ORDERED
any execution, or taken or sold for the enforcement of any
lien of any description, the person claiming under the
execution or under any deed or other instrument made in
the course of the proceedings to levy such execution or
enforce any lien, may petition the court for the entry of a
new certificate to him, and the application may be
granted: Provided, however, That every new certificate
entered under this section shall contain a memorandum of
the nature of the proceeding on which it is based: Provided,
further, That at any time prior to the entry of a new
certificate the registered owner may pursue all his lawful
remedies to impeach or annul proceedings under execution
or to enforce liens of any description.

Section 75 of PD 1529 provides:

Sec. 75. Application for new certificate upon expiration of

redemption period.—Upon the expiration of the time, if
any, allowed by law for redemption after the registered land
has been sold on execution, or taken or sold for the
enforcement of a lien of any description, except a mortgage
lien, the purchaser at such sale or anyone claiming under
him may petition the court for the entry of a new certificate
to him.

Before the entry of a new certificate of title, the registered

owner may pursue all legal and equitable remedies to
impeach or annul such proceedings.

It is clear that PD 1529 provides the solution to

respondent’s quandary. The reasons behind the law make a
lot of sense; it provides due process to a registered
landowner (in this case the petitioner) and prevents the
fraudulent or mistaken conveyance of land, the value of
which may exceed the judgment obligation. Petitioner
contends that only his interest in the subject lots, and not
that of his wife who was not a party to the suit, should have
been subjected to execution, and he should have had the
opportunity to prove as much.
FILINVEST DEVELOPMENT Sometime in August of 1989, Filinvest Development
CORPORATION, Petitioner,  Corporation (Filinvest) applied for the transfer in its name
vs. of the titles over Lots 2, 4, and 5 but the Las Piñas Register
GOLDEN HAVEN MEMORIAL PARK, of Deeds declined its application. Upon inquiry, Filinvest
INC., Respondent. learned that Lot 8, a lot belonging to some other heir or
heirs and covered by the same mother title, had been sold to
x - - - - - - - - - - - - - - - - - - - - - - -x Household Development Corporation (HDC), a sister
company of GHM, and HDC held the owner’s duplicate
copy of that title. Filinvest immediately filed against HDC
G.R. No. 188265 a petition for the surrender and cancellation of the co-
owners’ duplicate copy of TCT 67462 RT-1. Filinvest
GOLDEN HAVEN MEMORIAL PARK, alleged that it bought Lots 1, 2, 6, and 12 of the property
INC. Petitioner,  from their respective owners as evidenced by three deeds of
vs. absolute sale in its favor dated September 10, November
FILINVEST DEVELOPMENT 18, and December 29, 1989 and that Filinvest was entitled
CORPORATION, Respondent. to the registrations of such sales.

DECISION On January 14, 1991 GHM filed against the sellers and
Filinvest a complaint for the annulment of the deeds of sale
ABAD, J.: issued in the latter’s favor before the Regional Trial Court
(RTC) of Las Piñas City in Civil Case 91-098. On March
16, 2006 the RTC rendered a decision after trial, declaring
These cases are about which of two real estate developers, the contracts to sell executed by some of the heirs in
both buyers of the same lands, acted in good faith and has a GHM’s favor valid and enforceable and the sale in favor of
better title to the same. Filinvest null and void. Only Filinvest appealed among the
defendants.
The Facts and the Case
On November 25, 2008 the Court of Appeals (CA)
Petronila Yap (Yap), Victoriano and Policarpio Vivar (the affirmed the RTC decision with respect to the validity of
Vivars), Benjamin Cruz (Cruz), Juan Aquino (Aquino), the contract to sell Lot 6 in GHM’s favor. But the CA
Gideon Corpuz (Corpuz), and Francisco Sobremesana declared the contracts to sell Lots 1, 2, and 12 in GHM’s
(Sobremesana), and some other relatives inherited a parcel favor void and the sale of the same lots in favor of Filinvest
of land in Las Piñas City covered by Transfer Certificate of valid.
Title (TCT) 67462 RT-1. Subsequently, the heirs had the
land divided into 13 lots and, in a judicial partition, the Both parties filed their petitions for review before this
court distributed four of the lots as follows: a) Lots 1 and Court, Filinvest in G.R. 187824, and GHM in G.R. 188265.
12 to Aquino; b) Lot 2 to Corpuz and Sobremesana; and (c)
Lot 6 to Yap, Cruz, and the Vivars. The other lots were
distributed to the other heirs. The Issue Presented

On March 6, 1989 Yap, acting for herself and for Cruz and The issue presented in these cases is whether or not the
the Vivars, executed an agreement to sell Lot 6 in favor of contracts to sell that the sellers executed in GHM’s favor
Golden Haven Memorial Park, Inc. (GHM), payable in covering the same lots sold to Filinvest are valid and
three installments. On July 31, 1989 another heir, Aquino, enforceable.
acting for himself and for Corpuz and Sobremesana, also
executed an agreement to sell Lots 1, 2, and 12 in favor of The Court’s Ruling
GHM, payable in the same manner. In both instances,
GHM paid the first installment upon execution of the To prove good faith, the rule is that the buyer of registered
contract. land needs only show that he relied on the title that covers
the property. But this is true only when, at the time of the
On August 4, 1989 GHM caused to be annotated a Notice sale, the buyer was unaware of any adverse claim to the
of Adverse Claim on TCT 67462 RT-1. On September 20, property.1 Otherwise, the law requires the buyer to exercise
1989 the sellers of the four lots wrote GHM that they were a higher degree of diligence before proceeding with his
still working on the titling of the lots in their names and purchase. He must examine not only the certificate of title,
wanted to know if GHM was still interested in proceeding but also the seller’s right and capacity to transfer any
with their agreements. GHM replied in the affirmative on interest in the property.2 In such a situation, the buyer must
September 21, 1989 and said that it was just waiting for the show that he exercised reasonable precaution by inquiring
sellers’ titles so it can pay the second installments. beyond the four corners of the title.3 Failing in these, he
may be deemed a buyer in bad faith.4
Here, Filinvest was on notice that GHM had caused to be has knowledge of facts which should have put him upon
annotated on TCT 67462 RT-1, the mother title, as early as such inquiry and investigation cannot claim that he has
August 4, 1989 a notice of adverse claim covering Lot 6. acquired title to the property in good faith as against the
This notwithstanding, Filinvest still proceeded to buy Lots true owner of the land or of an interest in it.8
1, 2, 6, and 12 on September 10, November 18, and
December 29, 1989. The Court upholds the validity of the contracts between
GHM and its sellers. As the trial court aptly observed,
Filinvest of course contends that, although the title carried a GHM entered into valid contracts with its sellers but the
notice of adverse claim, that notice was only with respect to latter simply and knowingly refused without just cause to
seller Yap’s interest in Lot 6 and it did not affect Lots 1, 2, honor their obligations. The sellers apparently had a sudden
12, and the remaining interests in Lot 6. The Court change of heart when they found out that Filinvest was
disagrees. willing to pay more.

The annotation of an adverse claim is intended to protect As to the award of exemplary damages, the Court sustains
the claimant’s interest in the property.1avvphi1 The notice the CA ruling. This species of damages is allowed only in
is a warning to third parties dealing with the property that addition to moral damages such that exemplary damages
someone claims an interest in it or asserts a better right than cannot be awarded unless the claimant first establishes a
the registered owner.5 Such notice constitutes, by operation clear right to moral damages.9 Here, since GHM failed to
of law, notice to the whole world.6 Here, although the prove that it is entitled to moral damages, the RTC’s award
notice of adverse claim pertained to only one lot and of exemplary damages had no basis. But the grant of
Filinvest wanted to acquire interest in some other lots under attorney’s fees is proper. As the RTC noted, this case has
the same title, the notice served as warning to it that one of been pending since 1991, or for 19 years now. GHM was
the owners was engaged in double selling. forced to litigate and incur expenses in order to protect its
rights and interests.
What is more, upon inquiry with the Register of Deeds of
Las Piñas, Filinvest also learned that the heirs of Andres WHEREFORE, the Court GRANTS the petition in G.R.
Aldana sold Lot 8 to HDC and turned over the co-owner’s 188265 and DISMISSES the petition in G.R. 187824. The
duplicate copy of TCT 67462 RT-1 to that company which Court likewise REVERSES and SETS ASIDE the decision
had since then kept the title. Filinvest (referred to below as of the Court of Appeals dated November 25, 2008 in CA-
FDC) admits this fact in its petition,7 thus: G.R. CV 89448, and REINSTATES the decision of the
Regional Trial Court in Civil Case 91-098 dated March 16,
Sometime in August 1989, FDC applied with the Register 2006 with the MODIFICATION that the award of
of Deeds of Las Piñas for the transfer and registration of exemplary damages is DELETED.
Lots 2, 4, and 5 in its name and surrendered the co-owners
duplicate copy of TCT No. (67462) RT-1 given to it by the SO ORDERED
Vivar family, but the Register of Deeds of Las Piñas City
refused to do the transfer of title in the name of FDC and
instead demanded from FDC to surrender as well the other
co-owner's duplicate copy of TCT No. (67462) RT-1 which
was issued to the heirs of Andres Aldana. Upon further
inquiry, FDC came to know that the heirs of Andres Aldana
sold Lot 8 and delivered their co-owner's duplicate copy of
TCT No. (67462) RT-1 to Household Development
Corporation, a sister company of respondent GHMPI. FDC
made representations to Household Development
Corporation for the surrender of said co-owner's duplicate
copy of TCT No. (67462) RT-1 to the Register of Deeds of
Las Piñas City, but Household Development Corporation
refused to do so.

Filinvest’s knowledge that GHM, a competitor, had bought

Lot 6 in which Filinvest was interested, that GHM had
annotated an adverse claim to that Lot 6, and that GHM had
physical possession of the title, should have put Filinvest
on its toes regarding the prospects it faced if it bought the
other lots covered by the title in question. Filinvest should
have investigated the true status of Lots 1, 2, 6, and 12 by
asking GHM the size and shape of its interest in the lands
covered by the same title, especially since both companies
were engaged in the business of developing lands. One who
 Respondents Barrameda moved into the property on June 2,
SPOUSES FRANCISCO and BERNARDINA 1992.
RODRIGUEZ, petitioners, 
vs. On July 13, 1992, a notice of levy with attachment on real
HON. COURT OF APPEALS, SPOUSES property by virtue of a writ of execution was annotated at
CHRISTOPHER and MA. ANGELICA the back of the certificate of title of the property in
BARRAMEDA, and SPOUSES ANTONIO and question. The writ of execution was issued by Judge
MARIDEL CALINGO, respondents. Salvador Abad Santos, Regional Trial Court of Makati,
Branch 65 in connection with Civil Case No. 88-2159
DECISION involving a claim by herein petitioners, Spouses Francisco
and Bernardina Rodriguez, against respondents Calingo.
PUNO, J.: Judge Abad Santos issued the writ in favor of petitioners
Rodriguez.6
This is a petition for review of the decision of the Court of
Appeals dated September 7, 1999 in CA-G.R. CV No. On July 21, 1992, petitioners’ counsel, Atty. Nelson A.
48772 and its resolution dated March 31, 2000. The Court Loyola, sent a letter to respondents Barrameda inquiring
of Appeals reversed the decision of the Regional Trial about the basis of their occupation of the property in
Court of Makati in Civil Case No. 92-3524. question.

The facts show that herein respondent Spouses Antonio and On August 21, 1992, respondents Barrameda remitted to
Maridel Calingo (respondents Calingo) were the registered respondents Calingo the amount of P364,992.07 to
owners of a house and lot located at No. 7903 Redwood complete the payment of the agreed purchase price.
Street, Marcelo Green Village, Parañaque, Metro Manila. Respondents Calingo acknowledged receipt of said amount
The property was mortgaged to the Development Bank of and waived all their rights to the property in favor of the
the Philippines, which mortgage was later absorbed by the Barrameda spouses. They also guaranteed that the property
Home Mutual Development Fund (HMDF) or Pag-ibig. was clear and free from any liens and encumbrances,
except the real estate mortgage assumed by respondents
Barrameda.7
On April 27, 1992, respondents Calingo and respondent
Spouses Christopher and Ma. Angelica Barrameda
(respondents Barrameda) entered into a contract of sale On October 7, 1992, respondents Barrameda executed a
with assumption of mortgage where the former sold to the joint affidavit stating that they are the owners of the
latter the property in question and the latter assumed to pay property in question by virtue of a deed of sale with
the outstanding loan balance to the Development Bank of assumption of mortgage; that they registered an affidavit of
the Philippines.1 Respondents Barrameda issued two checks adverse claim with the Register of Deeds of Parañaque; that
in the amounts of P150,000.00 and P528,539.76, for which the Sheriff of the Regional Trial Court, Branch 65, Makati,
respondents Calingo issued a receipt dated April 24, 1992.2 Sheriff Manuel C. Dolor, levied said property despite their
adverse claim; and that they have acquired the property
long before the levy was made, and therefore, said levy was
In a letter dated April 23, 1992, respondent Antonio S. illegal. They served a copy of the affidavit on petitioners’
Calingo informed HMDF/Pag-ibig about the sale of the counsel, Atty. Loyola, who made a reply thereto on
property with assumption of mortgage. Said letter, October 15, 1992.
however, together with an affidavit by respondents
Calingo, was served upon HMDF/Pag-ibig on October 2,
1992.3 In his letter to Christopher Barrameda dated October 15,
1992, Atty. Loyola pointed out that the alleged deed of sale
with assumption of mortgage was not registered with the
On May 29, 1992, respondents Barrameda filed with the Register of Deeds and that the records of the HMDF show
Register of Deeds of Parañaque an affidavit of adverse that the property is owned by the Calingo spouses. He
claim on the property. The adverse claim was inscribed at urged the Barrameda spouses to confer with the petitioners
the back of the certificate of title as Entry No. 3439.4 to amicably settle the controversy.8

On June 1, 1992, respondent Ma. Angelica Paez-Barrameda On November 9, 1992, respondents Barrameda found a
wrote HMDF, Mortgage and Loans Division informing the Notice of Sheriff’s Sale posted on their front gate,
office that they have purchased the subject property from announcing the auction sale of their house and lot on
the Calingo spouses and that they filed a notice of adverse December 3, 1992 at 10:00 in the morning.9
claim with the Register of Deeds of Parañaque. They also
sought assistance from said office as regards the procedure
for the full settlement of the loan arrearages and the transfer On November 20, 1992, pursuant to Rule 39, Section 17 of
of the property in their names.5 the Revised Rules of Court, respondents Barrameda served
a Notice of Third Party Claim upon Sheriff Manuel C.
Dolor, accompanied by their affidavit of title.
On December 2, 1992, respondents Barrameda filed with property should prevail over the levy on execution issued
the Regional Trial Court of Makati a petition for quieting of by another court in satisfaction of a judgment against
title with prayer for preliminary injunction. The petition respondents Calingo.
prayed, among others, that the execution sale of the
property be enjoined, the notice of levy and attachment We hold that it cannot.
inscribed on the certificate of title be cancelled, and that
respondents Barrameda be declared the lawful and sole
owners of the property in question.10 Respondents Barrameda anchor their claim on the property
on the deed of sale with assumption of mortgage executed
by them and respondents Calingo on April 27, 1992. The
The trial court ruled in favor of herein petitioners and Property Registration Decree13 requires that such document
dismissed respondents Barrameda’s petition for quieting of be registered with the Register of Deeds in order to be
title. It ruled that the annotation of respondents binding on third persons. The law provides:
Barrameda’s adverse claim at the back of the certificate of
title was insufficient to establish their claim over the
property. It said that respondents Barrameda, as buyers of Sec. 51. Conveyance and other dealings by
the property, should have registered the title in their names. registered owner. An owner of registered land
Furthermore, respondents Barrameda’s adverse claim had may convey, mortgage, lease, charge or
lost its efficacy after the lapse of thirty days in accordance otherwise deal with the same in accordance with
with the provisions of the Land Registration Act. The trial existing laws. He may use such forms of deeds,
court also found that there was collusion between mortgages, leases or other voluntary instruments
respondents Barrameda and respondents Calingo to transfer as are sufficient in law. But no deed, mortgage,
the property to defraud third parties who may have a claim lease, or other voluntary instrument, except a
against the Calingos.11 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
The Court of Appeals, however, reversed the decision of between the parties and as evidence of
the trial court. Citing the ruling in Sajonas v. Court of authority to the Register of Deeds to make
Appeals,12 the appellate court held that respondents registration.
Barrameda’s adverse claim inscribed on the certificate of
title was still effective at the time the property was levied
on execution. It said: The act of registration shall be the operative act
to convey or affect the land insofar as third
persons are concerned, and in all cases under this
Therefore, the disputed inscription of adverse Decree, the registration shall be made in the
claim on TCT No. 83612/57286 was still in effect office of the Register of Deeds for the province
on July 13, 1992 when the Rodriguezes caused or city where the land lies. (emphasis supplied)
the annotation of the notice of levy on execution
thereto. Consequently, they are charged with
knowledge that the property sought to be levied It is admitted in this case that the deed of sale with
upon on execution was encumbered by an interest assumption of mortgage was not registered, but instead,
the same as or better than that of the registered respondents Barrameda filed an affidavit of adverse claim
owner thereof. Such notice of levy cannot prevail with the Register of Deeds. The question now is whether
over the existing adverse claim inscribed on the the adverse claim is sufficient to bind third parties such as
certificate of title in favor of the Barramedas. xxx herein petitioners.

The court held, therefore, that the notice of levy could not In L.P. Leviste and Company, Inc. v. Noblejas,14 we
prevail over respondents Barrameda’s adverse claim. explained when an inscription of an adverse claim is
sufficient to affect third parties, thus:
Petitioners moved for a reconsideration of the appellate
court’s ruling, but the motion was denied. The basis of respondent Villanueva’s adverse
claim was an agreement to sell executed in her
favor by Garcia Realty. An agreement to sell is a
Hence, this petition. Petitioners essentially argue that the voluntary instrument as it is a wilful act of the
remedy of a petition for quieting of title was not available registered owner. As such voluntary instrument,
to respondents Barrameda as they did not have a valid title Section 50 of Act No. 496 [now Presidential
to the property in question; that the affidavit of adverse Decree No. 1529] expressly provides that the act
claim inscribed by respondents Barrameda at the back of of registration shall be the operative act to convey
the certificate of title was not sufficient to establish their and affect the land. And Section 55 of the same
claim to the property; and there was collusion between Act requires the presentation of the owner’s
respondents Barrameda and respondents Calingo. duplicate certificate of title for the registration of
any deed or voluntary instrument. As the
The principal issue that needs to be resolved in this case is agreement to sell involves an interest less than an
whether respondents Barrameda’s adverse claim on the estate in fee simple, the same should have been
 registered by filing it with the Register of Deeds January 28, 1992, before the sale of the property on April
who, in turn, makes a brief memorandum thereof 27, 1992. We also find it unsettling that respondents
upon the original and owner’s duplicate Barrameda, without any reservation or inquiry, readily
certificate of title. The reason for requiring the remitted to respondents Calingo the full payment for the
production of the owner’s duplicate certificate in property on August 21, 1992 despite knowledge of the levy
the registration of a voluntary instrument is that, on execution over the property in July of the same year.
being a wilful act of the registered owner, it is to Any prudent buyer of real property, before parting with his
be presumed that he is interested in registering money, is expected to first ensure that the title to the
the instrument and would willingly surrender, property he is about to purchase is clear and free from any
present or produce his duplicate certificate of title liabilities and that the sellers have the proper authority to
to the Register of Deeds in order to accomplish deal on the property.
such registration. However, where the owner
refuses to surrender the duplicate certificate Again, we stress that the annotation of an adverse claim is a
for the annotation of the voluntary measure designed to protect the interest of a person over a
instrument, the grantee may file with the piece of property where the registration of such interest
Register of Deeds a statement setting forth his or right is not otherwise provided for by the law on
adverse claim, as provided for in Section 110 registration of real property. Section 70 of Presidential
of Act No. 496. In such a case, the annotation of Decree No. 1529 is clear:
the instrument upon the entry book is sufficient to
affect the real estate to which it relates, although
Section 72 of Act No. 496 imposes upon the Sec. 70. Adverse claim. Whoever claims any part
Register of Deeds the duty to require the or interest in registered land adverse to the
production by the [r]egistered owner of his registered owner, arising subsequent to the date
duplicate certificate for the inscription of the of the original registration, may, if no other
adverse claim. The annotation of an adverse provision is made in this Decree for registering
claim is a measure designed to protect the the same, make a statement in writing setting
interest of a person over a piece of real forth his alleged right or interest, and how or
property where the registration of such under whom acquired, a reference to the number
interest or right is not otherwise provided for of the certificate of title of the registered owner,
by the Land Registration Act, and serves as a the name of the registered owner, and a
notice and warning to third parties dealing description of the land in which the right or
with said property that someone is claiming an interest is claimed. xxx
interest on the same or a better right than the
registered owner thereof. (emphases supplied) The deed of sale with assumption of mortgage executed by
respondents Calingo and Barrameda is a registrable
In the case at bar, the reason given for the non-registration instrument. In order to bind third parties, it must be
of the deed of sale with assumption of mortgage was that registered with the Office of the Register of Deeds. It was
the owner’s duplicate copy of the certificate of title was in not shown in this case that there was justifiable reason why
the possession of HMDF. It was not shown, however, that the deed could not be registered. Hence, the remedy of
either respondents Barrameda or respondents Calingo adverse claim cannot substitute for registration.
exerted any effort to retrieve the owner’s duplicate copy
from the HMDF for the purpose of registering the deed of IN VIEW WHEREOF, the petition is GRANTED. The
sale with assumption of mortgage. In fact, the parties did assailed decision and resolution of the Court of Appeals
not even seek to obtain the consent of, much less inform, are SET ASIDE and the decision of the Regional Trial
the HMDF of the sale of the property. This, despite the Court, Makati in Civil Case No. 92-3524
provision in the contract of mortgage prohibiting the is REINSTATED. No cost.
mortgagor (respondents Calingo) from selling or disposing
the property without the written consent of the SO ORDERED
mortgagee.15 Respondents Calingo, as party to the contract
of mortgage, are charged with the knowledge of such
provision and are bound to comply therewith. Apparently,
there was haste in disposing the property that respondents
Calingo informed HMDF of the sale only on October 2,
1992 when they served a copy of their letter to said office
regarding the transfer of the property to respondents
Barrameda. There was no reason for the parties’ failure to
seek the approval of the HMDF to the sale as it appears
from the letter of respondent Angelica Paez-Barrameda to
HMDF that they were ready to pay in full the balance of the
loan plus interest. What is more suspect is that the
judgment against respondents Calingo ordering them to pay
the petitioners the sum of P1,159,355.90 was rendered on
ALFREDO SAJONAS and CONCHITA absolute sale was registered almost a
SAJONAS, petitioners,  year after, or on August 28, 1985.
vs.
THE COURT OF APPEALS, DOMINGO A. Meanwhile, it appears that Domingo
PILARES, SHERIFF ROBERTO GARCIA OF Pilares (defendant-appellant) filed Civil
QUEZON CITY and REGISTER OF DEEDS OF Case No. Q-28850 for collection of
MARIKINA, respondents. sum of money against Ernesto
Uychocde. On June 25, 1980, a
  Compromise Agreement was entered
into by the parties in the said case
TORRES, JR., J.:p under which Ernesto Uychocde
acknowledged his monetary obligation
to Domingo Pilares amounting to
A word or group of words conveys intentions. When used P27,800 and agreed to pay the same in.
truncatedly, its meaning disappears and breeds conflict. two years from June 25, 1980. When
Thus, it is written -- "By thy words shalt thou be justified, Uychocde failed to comply with his
and by thy words shalt thou be condemned." (Matthew, undertaking in the compromise
12:37) agreement, defendant-appellant Pilares
move d for the issuance of a writ of
Construing the new words of a statute separately is execution to enforce the decision based
the raison d'etre of this appeal. on the compromise agreement, which
the court granted in its order dated
Essentially, the case before us is for cancellation of the August 3, 1982. Accordingly, a writ of
inscription of a Notice of Levy on Execution from a execution was issued on August 12,
certificate of Title covering a parcel of real property. The 1982 by the CFI of Quezon City where
inscription was caused to be made by the private the civil case was pending. Pursuant to
respondent on Transfer Certificate of Title No. N-79073 of the order of execution dated August 3,
the Register of Deeds of Marikina, issued in the name of 1982, a notice of levy on execution was
the spouses Ernesto B. Uychocde and Lucita Jarin, and was issued on February 12, 1985, On
later carried over to and annotated on Transfer Certificate February 12, 1985, defendant sheriff
of Title No. N-109417 of the same registry, issued in the Roberto Garcia of Quezon City
name of the spouses Alfredo Sajonas and Conchita H. presented said notice of levy on
Sajonas, who purchased the parcel of land from the execution before the Register of Deeds
Uychocdes, and are now the petitioners in this case. of Marikina and the same was
annotated at the back of TCT No.
79073 as Entry No. 123283.
The facts are not disputed, and are hereby reproduced as
follows:
When the deed of absolute sale dated
September 4, 1984 was registered on
On September 22, 1983, the spouses August 28, 1985, TCT No. N-79073
Ernesto Uychocde and Lucita Jarin was cancelled and in lieu thereof, TCT
agreed to sell a parcel of residential No. N-109417 was issued in the name
land located in Antipolo, Rizal to the of the Sajonas couple. The notice of
spouses Alfredo Sajonas and Conchita levy on execution annotated by
R. Sajonas on installment basis as defendant sheriff was carried over to
evidenced by a Contract to Sell dated the new title. On October 21, 1985, the
September 22, 1983. The property was Sajonas couple filed a Third Party
registered in the names of the Claim with the sheriff of Quezon city,
Uychocde spouses under TCT No. N- hence the auction sale of the subject
79073 of the Register of Deeds of property did not push through as
Marikina, Rizal. On August 27, 1984, scheduled.
the Sajonas couple caused the
annotation of an adverse claim based
on the said Contract to Sell on the title On January 10, 1986, the Sajonas
of the subject property, which was spouses demanded the cancellation of
inscribed as Entry No. 116017. Upon the notice of levy on execution upon
full payment of the purchase price, the defendant-appellant Pilares, through a
Uychocdes executed a Deed of Sale letter to their lawyer, Atty. Melchor
involving the property in question in Flores. Despite said demand,
favor of the Sajonas couple on defendant-appellant Pilares refused to
September 4, 1984. The deed of cause the cancellation of said
annotation. In view thereof, plaintiffs-
 appellees filed this complaint dated name of spouses Ernesto Uychocde on
January 11, 1986 on February 5, 1986.1 August 27, 1984, the same ceases to
have any legal force and effect (30)
The Sajonases filed their complaint2 in the Regional Trial days thereafter pursuant to Section 70
Court of Rizal, Branch 71, against Domingo Pilares, the of P.D. 1529;
judgment creditor of the Uychocdes. The relevant portion
of the complaint alleges: 12 The Notice of Levy annotated at the
back of TCT No. 79073 being effected
7. That at the time the notice of levy pursuant to the Writ of Execution dated
was annotated by the defendant, the August 31, 1982, duly issued by the
Uychocde spouses, debtors of the CFI (now RTC) of Quezon proceeding
defendant, have already transferred, from a decision rendered in Civil Case
conveyed and assigned all their title, No. 28859 in favor of herein defendant
rights and interests to the plaintiffs and against Ernesto Uychocde, is
there was no more title, rights or undoubtedly proper and appropriate
interests therein which the defendant because the property is registered in the
could levy upon; name of the judgment debtor and is not
among those exempted from execution;
8. That the annotation of the levy on
execution which was carried over to the 13. Assuming without admitting that
title of said plaintiffs is illegal and the property subject matter of this case
invalid and was made in utter bad faith, was in fact sold by the registered owner
in view of the existence of the Adverse in favor of the herein plaintiffs, the sale
Claim annotated by the plaintiffs on the is the null and void (sic) and without
corresponding title of the Uychocde any legal force and effect because it
spouses; was done in fraud of a judgment
creditor, the defendant Pilares.5
9. That a demand was made by the
plaintiffs upon the defendant Domingo Pilares likewise sought moral and exemplary damages in a
A. Pilares, to cause the cancellation of counterclaim against the Sajonas spouses. The parties
the said notice of levy but the latter, appeared at pre-trial proceedings on January 21,
without justifiable reason and with the 1987,6 after which, trial on the merits ensued.
sole purpose of harassing and
embarrassing the plaintiffs ignored and The trial court rendered its decision on February 15,
refused plaintiffs' demand; 1989.7 It found in favor of the Sajonas couple, and ordered
the cancellation of the Notice of Levy from Transfer
10. That in view of the neglect, failure Certificate of Title No. N-109417.
and refusal of the defendant to cause
the cancellation of the notice of levy on The court a quo stated, thus:
execution, the plaintiffs were
compelled to litigate and engage the After going over the evidence
services of the undersigned counsel, to presented by the parties, the court finds
protect their rights and interests, for that although the title of the subject
which they agreed to pay attorney's matter of the Notice of Levy on
fees in the amount of P10,000 and Execution was still in the name of the
appearance fees of P500 per day in Spouses Uychocde when the same was
court.3 annotated on the said title, an earlier
Affidavit of Adverse of claim was
Pilares filed his answer with compulsory counterclaim4 on annotated on the same title by the
March 8, 1986, raising special and affirmative defenses, the plaintiffs who earlier bought said
relevant portions of which are as follows: property from the Uychocdes.

10. Plaintiff has no cause of action It is a well settled rule in this

against herein defendants; jurisdiction (Guidote vs. Maravilla, 48
Phil. 442) that actual notice of an
11. Assuming without however adverse claim is equivalent to
admitting that they filed an adverse registration and the subsequent
claim against the property covered by registration of the Notice of Levy could
TCT No. 79073 registered under the not have any legal effect in any respect
on account of prior inscription of the
 adverse claim annotated on the title of The Sajonas couple are now before us, on a Petition for
the Uychocdes. Review on Certiorari, 11 praying inter alia to set aside the
Court of Appeals' decision, and to reinstate that of the
xxx xxx xxx Regional Trial Court

On the issue of whether or not plaintiffs Private respondent filed his Comment 12 on March 5, 1992,
are buyers in good faith of the property after which, the parties were ordered to file their respective
of the spouses Uychocde even Memoranda. Private respondent complied thereto on April
notwithstanding the claim of the 27, 1994 13, while petitioners were able to submit their
defendant that said sale executed by the Memorandum on September 29, 1992. 14
spouses was made in fraud of creditors,
the Court finds that the evidence in this Petitioner assigns the following as errors of the appellate
instance is bare of any indication that court, to wit:
said plaintiffs as purchasers had notice
beforehand of the claim of the I
defendant over said property or that the
same is involved in a litigation between
said spouses and the defendant. Good THE LOWER COURT ERRED IN
faith is the opposite of fraud and bad HOLDING THAT THE RULE ON
faith, and the existence of any bad faith THE 30-DAY PERIOD FOR
must be established by competent ADVERSE CLAIM UNDER
proof.8 (Cai vs. Henson, 51 Phil 606) SECTION 70 OF P.D. NO. 1529 IS
ABSOLUTE INASMUCH AS IT
FAILED TO READ OR CONSTRUE
xxx xxx xxx THE PROVISION IN ITS ENTIRETY
AND TO RECONCILE THE
In view of the foregoing, the Court APPARENT INCONSISTENCY
renders judgment in favor of the WITHIN THE PROVISION IN
plaintiffs and against the defendant ORDER TO GIVE EFFECT TO IT AS
Pilares, as follows: A WHOLE.

1. Ordering the cancellation of the II

Notice of Levy on Execution annotated
on Transfer Certificate of Title No. N- THE LOWER COURT ERRED IN
109417. INTERPRETING SECTION 70 OF
P.D. NO. 1529 IN SUCH WISE ON
2. Ordering said defendant to pay the THE GROUND THAT IT VIOLATES
amount of P5,000 as attorney's fees. PETITIONERS' SUBSTANTIAL
RIGHT TO DUE PROCESS.
3. Dismissing the Counterclaim
interposed by said defendant. Primarily, we are being asked to ascertain who among the
parties in suit has a better right over the property in
Said defendant is likewise ordered to question. The petitioners derive their claim from the right
pay the costs. 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
Dissatisfied, Pilares appealed to the Court of Appeals", adverse claim 15 annotated on TCT No. N-79073 as early as
assigning errors on the part of the lower court. The August 27, 1984. Private respondent on the other hand,
appellate court reversed the lower court's decision, and claims the right to levy on the property, and have it sold on
upheld the annotation of the levy on execution on the execution to satisfy his judgment credit, arising from Civil
certificate of title, thus: Case No. Q-28850 16 against the Uychocdes, from whose
title, petitioners derived their own.
WHEREFORE, the decision of the
lower court dated February 15, 1989 is Concededly, annotation of an adverse claim is a measure
reversed and set aside and this designed to protect the interest of a person over a piece of
complaint is dismissed. real property where the registration of such interest or right
not otherwise provided for by the Land Registration Act or
Costs against the plaintiffs-appellees. 10 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 when the defendant sheriff annotated
thereof. Such notice is registered by filing a sworn the notice of levy on execution on
statement with the Register of Deeds of the province where February 12, 1985, said adverse claim
the property is located, setting forth the basis of the claimed was already ineffective. It cannot be
right together with other dates pertinent thereto. 17 said that actual or prior knowledge of
the existence of the adverse claim on
The registration of an adverse claim is expressly recognized the Uychocdes' title is equivalent to
under Section 70 of P.D. No. 1529. * registration inasmuch as the adverse
claim was already ineffective when the
notice of levy on execution was
Noting the changes made in the terminology of the annotated. Thus, the act of defendant
provisions of the law, private respondent interpreted this to sheriff in annotating the notice of levy
mean that a Notice of Adverse Claim remains effective on execution was proper and justified.
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 The appellate court relied on the rule of statutory
claim was annotated on August 27, 1984, hence, it will be construction that Section 70 is specific and unambiguous
effective only up to September 26, 1984, after which it will and hence, needs no interpretation nor
no longer have any binding force and effect pursuant to construction. 19 Perforce, the appellate court stated, the
Section 70 of P.D. No. 1529. Thus, the sale in favor of the provision was clear enough to warrant immediate
petitioners by the Uychocdes was made in order to defraud enforcement, and no interpretation was needed to give it
their creditor (Pilares), as the same was executed force and effect. A fortiori, an adverse claim shall be
subsequent to their having defaulted in the payment of their effective only for a period of thirty (30) days from the date
obligation based on a compromise of its registration, after which it shall be without force and
agreement. 18 effect. Continuing, the court further stated;

The respondent appellate court upheld private respondents' . . . clearly, the issue now has been
theory when it ruled: reduced to one of preference -- which
should be preferred between the notice
of levy on execution and the deed of
The above staled conclusion of the absolute sate. The Deed of Absolute
lower court is based on the premise that Sale was executed on September 4,
the adverse claim filed by plaintiffs- 1984, but was registered only on
appellees is still effective despite the August 28, 1985, while the notice of
lapse of 30 days from the date of levy on execution was annotated six (6)
registration. However, under the months prior to the registration of the
provisions of Section 70 of P.D. 1529, sale on February 12, 1985.
an adverse claim shall be effective only
for a period of 30 days from the date of
its registration. The provision of this In the case of Landig
Decree is clear and specific. vs. U.S. Commercial Co., 89 Phil. 638
Commere it was held that where a sale
is recorded later than an attachment,
xxx xxx xxx although the former is of an earlier
date, the sale must give way to the
It should be noted that the adverse attachment on the ground that the act of
claim provision in Section 110 of the registration is the operative act to affect
Land Registration Act (Act 496) does the land. A similar ruling was restated
not provide for a period of effectivity in Campillo vs. Court of Appeals (129
of the annotation of an adverse claim. SCRA 513).
P.D. No. 1529, however, now
specifically provides for only 30 days. xxx xxx xxx
If the intention of the law was for the
adverse claim to remain effective until
cancelled by petition of the interested The reason for these rulings may be
party, then the aforecited provision in found in Section 51 of P.D. 1529,
P.D. No. 1529 stating the period of otherwise known as the Property
effectivity would not have been Registration Decree, which provides as
inserted in the law. follows:

Since the adverse claim was annotated Sec. 1. Conveyance

On August 27, 1984, it was effective and other dealings
only until September 26, 1984. Hence, by the registered
 owner. -- An owner property registered under the system, or any interest therein
of registered land only take effect as a conveyance to bind the land upon its
may convey, registration, and that a purchaser is not required to explore
mortgage, lease, further than what the Torrens title, upon its face, indicates
charge, otherwise in quest for any hidden defect or inchoate right that may
deal with the same subsequently defeat his right thereto, nonetheless, this rule
in accordance with is not absolute. Thus, one who buys from the registered
existing laws. He owner need not have to look behind the certificate of title,
may use such forms he is, nevertheless, bound by the liens and encumbrances
of deeds, annotated thereon. One who buys without checking the
mortgages, leases vendor's title takes all the risks and losses consequent to
or other voluntary such failure.22
instruments as are
sufficient in In PNB vs. Court of Appeals, we held that "the subsequent
law. But no deed, sale of the property to the De Castro spouses cannot prevail
mortgage, lease or over the adverse claim of Perez, which was inscribed on the
other voluntary bank' s certificate of title on October 6, 1958. That should
instrument, except have put said spouses on notice, and they can claim no
a will purporting to better legal right over and above that of Perez. The TCT
convey or affect issued in the spouses' names on July, 1959 also carried the
registered land said annotation of adverse claim. Consequently, they are
shall take effect as not entitled to any interest on the price they paid for the
a conveyance or property. 23
bind the land, but
shall operate only
as a contract Then again, in Gardner vs. Court of Appeals, we said that
between the parties "the statement of respondent court in its resolution of
and as evidence of reversal that 'until the validity of an adverse claim is
authority to the determined judicially, it cannot be considered a flaw in the
Register Deeds to vendor's title' contradicts the very object of adverse claims.
make of As stated earlier, the annotation of an adverse claim is a
registration. 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
The act of registration shall be the claiming an interest on the same or has a better right than
operative act to convey or affect the the registered owner thereof. A subsequent sale cannot
land in so far as third persons are prevail over the adverse claim which was previously
concerned and in all cases under the annotated in the certificate of title over the property. 24
Decree, the registration shall be made
in the office of the Register of Deeds
for the province or city where the land The question may be posed, was the adverse claim
lies. (Emphasis supplied by the lower inscribed in the Transfer Certificate of Title No. N-109417
court.) 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
Under the Torrens system, registration is the operative act lapsed since it was annotated?
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 This is a decisive factor in the resolution of this
condition of the property. He is only charged with notice of instant case.
the burdens on the property which are noted on the face of
the register or certificate of title. 20 If the adverse claim was still in effect, then respondents are
charged with knowledge of pre-existing interest over the
Although we have relied on the foregoing rule, in many subject property, and thus, petitioners are entitled to the
cases coming before us, the same, however, does not fit in cancellation of the notice of levy attached to the certificate
the case at bar. While it is the act of registration which is of title.
the operative act which conveys or affects the land insofar
as third persons are concerned, it is likewise true, that the For a definitive answer to this query, we refer to the law
subsequent sale of property covered by a Certificate of itself. Section 110 of Act 496 or the Land Registration Act
Title cannot prevail over an adverse claim, duly sworn to reads:
and annotated on the certificate of title previous to the
sale. 21 While it is true that under the provisions of the Sec. 110. Whoever claims any part or
Property Registration Decree, deeds of conveyance of interest in registered lands adverse to
 the registered owner, arising days from the date of registration.
subsequent to the date of the original After the lapse of said period, the
registration, may, if no other provision annotation of adverse claim may be
is made in this Act for registering the cancelled upon filing of a verified
same, make a statement in writing petition therefor by the party in-
setting forth fully his alleged right or interest: Provided, however, that after
interest, and how or under whom cancellation, no second adverse claim
acquired, and a reference to the volume based on the same ground shall be
and page of the certificate of title of the registered by the same claimant.
registered owner, and a description of
the land in which the right or interest is Before the lapse of thirty days
claimed. aforesaid, any party in interest may file
a petition in the Court of First Instance
The statement shall be signed and where the land is situated for the
sworn to, and shall state the adverse cancellation the adverse claim, and the
claimant's residence, and designate a court shall grant a speedy hearing upon
place at which all notices may be the question of the validity of such
served upon him. The statement shall adverse claim, and shall render
be entitled to registration as an adverse judgment as may be just and equitable.
claim, and the court, upon a petition of If the adverse claim is adjudged to be
any party in interest, shall grant a invalid, the registration thereof shall be
speedy hearing upon the question of the ordered cancelled. If, in any case, the
validity of such adverse claim and shall court, after notice and hearing shall
enter such decree therein as justice and find that the adverse claim thus
equity may require. If the claim is registered was frivolous, it may fine the
adjudged to be invalid, the registration claimant in an amount not less than one
shall be cancelled. If in any case, the thousand pesos, nor more than five
court after notice and hearing shall find thousand pesos, in its discretion. Before
that a claim thus registered was the lapse of thirty days, the claimant
frivolous or vexatious, it may tax the may withdraw his adverse claim by
adverse claimant double or treble the filing with the Register of Deeds a
costs in its discretion." sworn petition to that effect. (Emphasis
ours).
The validity of the above-mentioned rules on adverse
claims has to be reexamined in the light of the changes In construing the law aforesaid, care should be taken that
introduced by P.D. 1529, which provides: every part thereof be given effect and a construction that
could render a provision inoperative should be avoided, and
Sec . 70 Adverse Claim -- Whoever inconsistent provisions should be reconciled whenever
claims any part or interest in registered possible as parts of a harmonious whole. 25 For taken in
land adverse to the registered owner, solitude, a word or phrase might easily convey a meaning
arising subsequent to the date of the quite different from the one actually intended and evident
original registration, may, if no other when a word or phrase is considered with those with which
provision is made in this decree for it is associated." 26 In ascertaining the period of effectivity
registering the same, make a statement of an inscription of adverse claim, we must read the law in
in writing setting forth fully his alleged its entirety. Sentence three, paragraph two of Section 70 of
right or interest, and how or under P.D. 1529 provides:
whom acquired, a reference to the
number of certificate of title of the The adverse claim shall be effective for
registered owner, the name of the a period of thirty days from the date of
registered owner, and a description of registration."
the land in which the right or interest is
claimed. At first blush, the provision in question would seem to
restrict the effectivity of the adverse claim to thirty days.
The statement shall be signed and But the above provision cannot and should not be treated
sworn to, and shall state the adverse separately, but should be read in relation to the sentence
claimant's residence, and a place at following, which reads:
which all notices may be served upon
him. This statement shall be entitled to After the lapse of said period, the
registration as an adverse claim on the annotation of adverse claim may be
certificate of title. The adverse claim
shall be effective for a period of thirty
 cancelled upon filing of a verified the very authority vested in it. A fortiori, the limitation on
petition therefor by the party in interest. the period of effectivity is immaterial in determining the
validity or invalidity of an adverse claim which is the
If the rationale of the law was for the adverse claim to ipso principal issue to be decided in the court hearing. It will
facto lose force and effect after the lapse of thirty days, therefore depend upon the evidence at a proper hearing for
then it would not have been necessary to include the the court to determine whether it will order the cancellation
foregoing caveat to clarify and complete the rule. For then, of the adverse claim or not. 30
no adverse claim need be cancelled. If it has been
automatically terminated by mere lapse of time, the law To interpret the effectivity period of the adverse claim as
would not have required the party in interest to do a useless absolute and without qualification limited to thirty days
act. defeats the very purpose for which the statute provides for
the remedy of an inscription of adverse claim, as the
A statute's clauses and phrases must not be taken annotation of an adverse claim is a measure designed to
separately, but in its relation to the statute's totality. Each protect the interest of a person over a piece of real property
statute must, in fact, be construed as to harmonize it with where the registration of such interest or right is not
the pre-existing body of laws. Unless clearly repugnant, otherwise provided for by the Land Registration Act or Act
provisions of statutes must be reconciled. The printed pages 496 (now P.D. 1529 or the Property Registration Decree),
of the published Act, its history, origin, and its purposes and serves as a warning to third parties dealing with said
may be examined by the courts in their construction. 27 An property that someone is claiming an interest or the same or
eminent authority on the subject matter states the rule a better right than the registered owner thereof. 31
candidly:
The reason why the law provides for a hearing where the
A statute is passed as a whole and not validity of the adverse claim is to be threshed out is to
in parts sections, and is animated by afford the adverse claimant an opportunity to be heard,
one general purpose and intent. providing a venue where the propriety of his claimed
Consequently, each part or section interest can be established or revoked, all for the purpose of
should be construed in connection with determining at last the existence of any encumbrance on the
every other part section so as to title arising from such adverse claim. This is in line with
produce a harmonious whole. It is not the provision immediately following:
proper to confine its intention to the
one section construed. It is always an Provided, however, that after
unsafe way of construing a statute or cancellation, no second adverse claim
contract to divide it by a process of shall be registered by the same
etymological dissection, into separate claimant.
words, and then apply to each, thus
separated from the context, some Should the adverse claimant fail to sustain his interest in
particular meaning to be attached to the property, the adverse claimant will be precluded from
any word or phrase usually to be registering a second adverse claim based on the same
ascertained from the as context. 28 ground.

Construing the provision as a whole would reconcile the It was held that "validity or efficaciousness of the claim
apparent inconsistency between the portions of the law may only be determined by the Court upon petition by an
such that the provision on cancellation of adverse claim by interested party, in which event, the Court shall. order the
verified petition would serve to qualify the provision on the immediate hearing thereof and make the proper
effectivity period. The law, taken together, simply means adjudication a justice and equity may warrant. And it is
that the cancellation of the adverse claim is still necessary only when such claim is found unmeritorious that the
to render it ineffective, otherwise, the inscription will registration of the adverse claim may be cancelled, thereby
remain annotated and shall continue as a lien upon the protecting the interest of the adverse claimant and giving
property. For if the adverse claim has already ceased to be notice and warning to third parties". 32
effective upon the lapse of said period, its cancellation is no
longer necessary and the process of cancellation would be a
useless ceremony. 29 In sum, the disputed inscription of an adverse claim on the
Transfer Certificate of Title No. N-79073 was still in effect
on February 12, 1985 when Quezon City Sheriff Roberto
It should be noted that the law employs the phrase "may be Garcia annotated the notice of levy on execution thereto.
cancelled", which obviously indicates, as inherent in its Consequently, he is charged with knowledge that the
decision making power, that the court may or not order the property sought to be levied upon the execution was
cancellation of an adverse claim, nothwitstanding such encumbered by an interest the same as or better than that of
provision limiting the effectivity of an adverse claim for the registered owner thereof. Such notice of levy cannot
thirty days from the date of registration. The court cannot prevail over the existing adverse claim inscribed on the
be bound by such period as it would be inconsistent with certificate of title in favor of the petitioners. This can be
deduced from the pertinent provision of the Rules of Court, A Yes, sir.
to wit:
Q That was shown
Sec. 16. Effect of levy on execution as to you the very first
to third persons -- The levy on time that this lot
execution shall create a lien in favor of was offered to you
the judgment creditor over the right, for sale?
title and interest of the judgment debtor
in such property at the time of the A Yes.
levy, subject to liens or encumbrances
then existing. (Emphasis supplied)
Q After you were
shown a copy of
To hold otherwise would be to deprive petitioners of their the title and after
property, who waited a long time to complete payments on you were informed
their property, convinced that their interest was amply that they are
protected by the inscribed adverse claim. desirous in selling
the same, did you
As lucidly observed by the trial court in the challenged and your husband
decision: decide to buy the
same?
True, the foregoing section provides
that an adverse claim shall be effective A No, we did not
for a period of thirty days from the date decide right after
of registration. Does this mean seeing the title. Of
however, that the plaintiffs thereby lost course, we visited. .
their right over the property in .
question? Stated in another, did the
lapse of the thirty day period Q No, you just
automatically nullify the contract to sell answer my
between the plaintiffs and the question. You did
Uychocdes thereby depriving the not immediately
former of their vested right over the decide?
property?
A Yes.
It is respectfully submitted that it did
not. 33
Q When did you
finally decide to
As to whether or not the petitioners are buyers in good faith buy the same?
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- A After seeing the
appellees were not aware of the pending case filed by site and after
Pilares against Uychocde at the time of the sale of the verifying from the
property by the latter in their favor. This was clearly Register of Deeds
elicited from the testimony of Conchita Sajonas, wife of in Marikina that it
plaintiff, during cross-examination on April 21, 1988". 34 is free from
encumbrances, that
was the time we
ATTY. REYES. decided.

Q Madam Witness, Q How soon after

when Engr. you were offered
Uychocde and his this lot did you
wife offered to you verify the exact
and your husband location and the
the property subject genuineness of the
matter of this case, title, as soon after
they showed you this was offered to
the owner's transfer you?
certificate, is it not?
 A I think it' s 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 an unconscientious
advantage of another, 3 7 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
respondent, 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 an
encumbrances except those set forth on the Certificate of
Title and those expressly mentioned in the ACT as having
been reserved 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 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
ENRIQUETA M. LOCSIN, Petitioner,  3. On October 1, 1999, Bernardo, claiming to be
vs. the owner of the property, filed a Motion for
BERNARDO HIZON, CARLOS HIZON, SPS. JOSE Issuance of Writ of Execution for the
MANUEL & LOURDES GUEVARA, Respondents. enforcement of the court-approved compromise
agreement in Civil Case No. 38-6633;
DECISION
4. The property was already occupied and was, in
VELASCO, JR., J.: fact, up for sale.

Nature of the Case On May 9, 2002, Locsin, through counsel, sent Carlos a
letter requesting the return of the property since her
signature in the purported deed of sale in favor of Bolos
Before Us is a Petition for Review on Certiorari under Rule was a forgery. In a letter-reply dated May 20, 2002, Carlos
45 assailing the Decision1 and Resolution of the Court of denied Locsin’s request, claiming that he was unaware of
Appeals (CA), dated June 6, 2012 and October 30, 2012, any defect or flaw in Bolos’ title and he is, thus, an
respectively, in CA-G.R. CV No. 96659 entitled Enriqueta innocent purchaser for value and good faith. On June 13,
M Locsin v. Marylou Bolos, et al. In reversing the ruling of 2002,4 Bernardo met with Locsin’s counsel and discussed
the trial court, the CA held that respondents are innocent the possibility of a compromise. He ended the meeting with
purchasers in good faith and for value of the subject a promise to come up with a win-win situation for his son
property. and Locsin, a promise which turned out to be deceitful, for,
on July 15, 2002, Locsin learned that Carlos had already
The Facts sold the property for PhP 1.5 million to his sister and her
husband, herein respondents Lourdes and Jose Manuel
Petitioner Enriqueta M. Locsin (Locsin) was the registered Guevara (spouses Guevara), respectively, who, as early as
owner of a 760-sq.m. lot covered by Transfer Certificate of May 24, 2002, had a new certificate of title, TCT No. N-
Title (TCT) No. 235094, located at 49 Don Vicente St., 237083, issued in their names. The spouses Guevara then
Don Antonio Heights Subdivision, Brgy. Holy Spirit, immediately mortgaged the said property to secure a PhP
Capitol, Quezon City. In 1992, she filed an ejectment case, 2.5 million loan/credit facility with Damar Credit
Civil Case No. 38-6633,2 against one Billy Aceron Corporation (DCC).
(Aceron) before the Metropolitan Trial Court, Branch 3 8 in
Quezon City (MTC) to recover possession over the land in It was against the foregoing backdrop of events that Locsin
issue. Eventually, the two entered into a compromise filed an action for reconveyance, annulment ofTCT No. N-
agreement, which the MTC approved on August 6, 1993.3 237083, the cancellation of the mortgage lien annotated
thereon, and damages, against Bolos, Bernardo, Carlos, the
Locsin later went to the United States without knowing Sps. Guevara, DCC, and the Register of Deeds, Quezon
whether Aceron has complied with his part of the bargain City, docketed as Civil Case No. Q-02-47925, which was
under the compromise agreement. In spite of her absence, tried by the Regional Trial Court, Branch 77 in Quezon
however, she continued to pay the real property taxes on City (RTC). The charges against DCC, however,
the subject lot. weredropped on joint motion ofthe parties. This is in view
of the cancellation of the mortgage for failure of the
spouses Guevara to avail of the loan/credit facility DCC
In 1994, after discovering thather copy of TCT No. 235094 extended in their favor.5
was missing, Locsin filed a petition for administrative
reconstruction in order to secure a new one, TCT No. RT-
97467. Sometime in early 2002, she then requested her Ruling of the Trial Court
counsel to check the status of the subject lot. It was then
that they discovered the following: On November 19, 2010, the RTC rendered a
Decision6 dismissing the complaint and finding for
1. One Marylou Bolos (Bolos) had TCT No. RT- respondents,as defendants thereat, holding that: (a) there is
97467 cancelled on February 11, 1999, and then insufficient evidence to showthat Locsin’s signature in the
secured a new one, TCT No. N-200074, in her Deed of Absolute Sale between her and Bolos is a forgery;
favor by registering a Deed of Absolute Sale (b) the questioned deed is a public document, having been
dated November 3, 1979 allegedly executed by notarized; thus, it has, in its favor, the presumption of
Locsin with the Registry of Deeds; regularity; (c) Locsin cannot simply rely on the apparent
difference of the signatures in the deed and in the
documents presented by her to prove her allegation of
2. Bolos later sold the subject lot to Bernardo forgery; (d) the transfers of title from Bolos to Carlos and
Hizon (Bernardo) for PhP 1.5 million, but it was from Carlos to the spouses Guevara are valid and regular;
titled under Carlos Hizon’s (Carlos’) name on (e) Bernardo, Carlos, and the spouses Guevara are all
August 12, 1999. Carlos is Bernardo’s son; buyers in good faith. Aggrieved, petitioner appealed the
case to the CA.
 Ruling of the Court of Appeals Aceron’s possession cannot be the basis for an allegation of
bad faith, for the property was purchased on an "asis
The CA, in its assailed Decision, ruled that it was erroneous where-is" basis. The Issue
for the RTC to hold that Locsin failed to prove that her
signature was forged. In its appreciation of the evidence, Considering that the finding of the CAthat Locsin’s
the CA found that, indeed, Locsin’s signature in the Deed signature in the Deed of Absolute Sale in favor of Bolos
of Absolute Sale in favor of Bolos differs from her was indeed bogus commands itself for concurrence, the
signatures in the other documents offered as evidence. resolution of the present petition lies on this singular
issue––whether or not respondents are innocent purchasers
The CA, however, affirmed the RTC’s finding that herein for value.12
respondents are innocent purchasers for value. Citing
Casimiro Development Corp. v. Renato L. Mateo,7 the The Court’s Ruling
appellate court held that respondents, having dealt with
property registered under the Torrens System, need not go The petition is meritorious.
beyond the certificate of title, but only has to rely on the
said certificate. Moreover, as the CA added, any notice of
defect or flaw in the title of the vendor should encompass Procedural issue
facts and circumstances that would impel a reasonably
prudent man to inquire into the status of the title of the As a general rule, only questions of law may be raised in a
property in order to amount to bad faith. petition for review on certiorari.13 This Court is not a trier
offacts; and in the exercise of the power of review, we do
Accordingly, the CA ruled that Locsin can no longer not normally undertake the re-examination of the evidence
recover the subject lot.8 Hence, the insant petition. presented by the contending parties during the trial of the
case.14 This rule, however, admits of exceptions.For one,
the findings of fact of the CA will not bind the parties in
Arguments cases where the inference made on the evidence is
mistaken, as here.15
Petitioner Locsin insists that Bernardo was well aware, at
the time he purchased the subject property, of a possible That being said, we now proceed to the core of the
defect in Bolos’ title since he knew that another person, controversy.
Aceron, was then occupying the lot in issue.9 As a matter of
fact, Bernardo even moved for the execution of the
compromise agreement between Locsin and Aceron inCivil Precautionary measures for buyers of real property
Case No. 38-6633 in order to enforce to oust Aceron of his
possession over the property.10 An innocent purchaser for value is one who buys the
property of another without notice that some other person
Thus, petitioner maintains that Bernardo, knowing as he did has a right to or interest in it, and who pays a full and fair
the incidents involving the subject property,should have price atthe time of the purchase or before receiving any
acted as a reasonably diligent buyer in verifying the notice of another person’s claim.16 As such, a defective
authenticity of Bolos’title instead of closing his eyes to the title–– or one the procurement of which is tainted with
possibility of a defecttherein. Essentially, petitioner argues fraud and misrepresentation––may be the source of a
that Bernardo’s stubborn refusal to make an inquiry beyond completely legal and valid title, provided that the buyer is
the face of Bolos’ title is indicative of his lack of prudence an innocent third person who, in good faith, relied on the
in protecting himself from possible defects or flaws therein, correctness of the certificate of title, or an innocent
and consequently bars him from interposing the protection purchaser for value.17
accorded toan innocent purchaser for value.
Complementing this is the mirror doctrine which echoes the
As regards Carlos and the Sps. Guevara’s admissions and doctrinal rule that every person dealing with registered land
testimonies, petitioner points out that when these are placed may safely rely on the correctness of the certificate of title
side-by-side with the concurrent circumstances in the case, issued therefor and is in no way obliged to go beyond the
it is readily revealed that the transfer from the former to the certificate to determine the condition of the property.18 The
latter was only simulated and intended to keep the property recognized exceptions to this rule are stated as follows:
out of petitioner’s reach.
[A] person dealing with registeredland has a right to rely on
For their part, respondents maintain that they had the right the Torrens certificate of title and to dispense with the need
to rely solely upon the face of Bolos’ clean title, of inquiring further except when the party has actual
considering that it was free from any lien or encumbrance. knowledge of facts and circumstances that would impel a
They are not even required, so they claim, to check on the reasonably cautious man to make such inquiry or when the
validity of the sale from which they derived their purchaser has knowledge of a defect or the lack of title in
title.11 Too, respondents claim that their knowledge of his vendor or of sufficient facts to induce a reasonably
prudent man to inquire into the status of the title of the
property in litigation. The presence of anything which Q: Are you privy with the negotiations between your father,
excites or arouses suspicion should then prompt the vendee Mr. Bernardo Hizon, and your co-defendant, Marylou
to look beyond the certificate and investigate the title of the Bolos, the alleged seller?
vendor appearing on the face of said certificate. One who
falls within the exception can neither be denominated an A: No, Ma’am.
innocent purchaser for value nor a purchaser in good faith
and, hence, does not merit the protection of the
law.19 (emphasis added) Q: Do you remember having signed a Deed of Absolute
Sale, dated August 12, 1999?
Thus, in Domingo Realty, Inc. v. CA,20 we emphasized the
need for prospective parties to a contract involving titled A: Yes, Ma’am.
lands to exercise the diligence of a reasonably prudent
person in ensuring the legality of the title, and the accuracy Q: And, at that time that you have signed the Deed, was
of the metes and bounds of the lot embraced therein, by Marylou Bolos present?
undertaking precautionary measures, such as:
A: No, Ma’am.
1. Verifying the origin, history, authenticity, and
validity of the title with the Office of the Register Q: Who negotiated and arranged for the sale of the property
of Deeds and the Land Registration Authority; between Marylou Bolos and you? A: It was my father.
(emphasis ours)
2. Engaging the services of a competent and
reliable geodetic engineer to verify the Consistent with the rule that the principal is chargeable and
boundary,metes, and bounds of the lot subject of bound by the knowledge of, or notice to, his agent received
said title based on the technical description in the in that capacity,22 any information available and known to
said title and the approved survey plan in the Bernardo is deemed similarly available and known to
Land Management Bureau; Carlos, including the following:

3. Conducting an actual ocular inspection of the 1. Bernardo knew that Bolos, from whom he
lot; purchased the subject property, never acquired
possession over the lot. As a matter of fact, in his
4. Inquiring from the owners and possessors of March 11, 2009 direct testimony,23 Bernardo
adjoining lots with respect to the true and legal admitted having knowledge of Aceron’s lot
ownership of the lot in question; possession as well as the compromise agreement
between petitioner and Aceron.
5. Putting up of signs that said lot is being
purchased, leased, or encumbered; and 2. Bolos’ purported Deed of Sale was executed
on November 3, 1979 but the ejectment case
6. Undertaking such other measures to make the commenced by Locsin against Aceron was in
general public aware that said lot will be subject 1992, or thirteen (13)years after the property was
to alienation, lease, or encumbrance by the supposedly transferred to Bolos.
parties.
3. The August 6, 1993 Judgment,24 issued by the
In the case at bar, Bolos’ certificate of title was concededly MTC on the compromise agreement between
free from liens and encumbrances on its face. However, the Locsin and Aceron, clearly stated therein that
failure of Carlos and the spouses Guevara to exercise the "[o]n August 2, 1993,the parties [Aceron and
necessary level ofcaution in light of the factual milieu Locsin] submitted to [the MTC] for approval a
surrounding the sequence of transfers from Bolos to Compromise Agreement dated July 28, 1993." It
respondents bars the application of the mirror doctrine and further indicated that "[Aceron] acknowledges
inspires the Court’s concurrence withpetitioner’s [Locsin’s] right of possessionto [the subject
proposition. property], being the registered owner thereof."

Carlos is not an innocent purchaser for value Having knowledge of the foregoing facts, Bernardo and
Carlos, to our mind, should have been impelled to
investigate the reason behind the arrangement. They should
Foremost, the Court is of the view that Bernardo negotiated have been pressed to inquire into the status of the title of
with Bolos for the property as Carlos’ agent. This is the property in litigation in order to protect Carlos’ interest.
bolstered by the fact that he was the one who arranged for It should have struck them as odd that it was Locsin, not
the saleand eventual registration of the property in Carlos’ Bolos, who sought the recovery of possession by
favor. Carlos testified during the May 27, 2009 hearing:21 commencing an ejectment case against Aceron, and even
entered into a compromiseagreement with the latter years May 20, 2002:Carlos’ counsel replied to Locsin’s May 9,
afterthe purported sale in Bolos’ favor. Instead, Bernardo 2002 letter, claiming that Carlos was unaware of any defect
and Carlos took inconsistent positions when they argued for or flaw in Bolos’ title, making him an innocent purchaserof
the validity of the transfer of the property in favor of Bolos, the subject property.
but in the same breath prayed for the enforcement of the
compromise agreement entered into by Locsin. May 24, 2002: The Sps. Guevara allegedly purchased the
property from Carlos.
At this point it is well to emphasize that entering into a
compromise agreement is an act of strict dominion.25 If When Bernardo met with Locsin’scounsel on June 13,
Bolos already acquired ownership of the property as early 2002, and personally made a commitment to comeup with a
as 1979, it should have been her who entered into a win-win situation for his son and Locsin, he knew fully
compromise agreement with Aceron in 1993, not her well, too,that the property had already been purportedly
predecessor-in-interest, Locsin, who, theoretically, had transferred to his daughter and son-in-law, the spouses
already divested herself of ownership thereof. Guevara, for he, no less, facilitated the same. This, to us,
isglaring evidence of bad faith and an apparent intention to
The spouses Guevara are not innocent purchasers for value mislead Locsin into believing that she could no longer
recover the subject property.
As regards the transfer of the property from Carlos to the
spouses Guevara, We find the existence of the sale highly Also, the fact that Lourdes Guevara and Carlos are siblings,
suspicious. For one, there is a dearth of evidence to support and that Carlos’ agent in his dealings concerning the
the respondent spouses’ position that the sale was a bona property is his own father, renders incredible the argument
fide transaction. Evenif we repeatedly sift through the thatLourdes had no knowledge whatsoever of Locsin’s
evidence on record, still we cannot findany document, claim of ownership atthe time of the purported sale.
contract, or deed evidencing the sale in favor of the spouses
Guevara. The same goes for the purported payment of the Indeed, the fact that the spouses Guevara never intended to
purchase price of the property in the amount of PhP 1.5 be the owner in good faith and for value of the lot is further
million in favor of Carlos. As a matter of fact, the only made manifest by their lack of interest in protecting
documentary evidence that they presented were as follows: themselvesin the case. It does not even appear in their
testimonies that they, at the very least, intended to
1. Deed of Sale between Locsin and Bolos; vigilantly protect their claim over the property and prevent
Locsin take it away from them. What they did was to
2. TCT No. 200074 issued in Bolos’ name; simply appoint Bernardo as their attorney-in-fact to handle
the situation and never bothered acquainting themselves
with the developments in the case.28 To be sure, respondent
3. TCT No. N-205332 in Carlos’ name; Jose Manuel Guevara was not even presented asa witness
in the case.
4. TCT No. N-237083 in the nameof the Sps.
Guevara. There is also strong reason to believethat even the
mortgage in favor of DCC was a mere ploy tomake it
To bridge the gap in their documentary evidence, appear that the Sps. Guevara exercised acts of dominion
respondents proffer their own testimonies explaining the over the subject property. This is so considering the
circumstances surrounding the alleged sale.26 However, proximity between the property’s registration in their
basic is the rule that bare and self-serving allegations, names and its being subjected to the mortgage. Most telling
unsubstantiated by evidence, are not equivalent to proof is that the credit line secured by the mortgage was never
under the Rules.27 As such, we cannot give credence to used by the spouses, resulting in the mortgage’s
their representations that the sale between them actually cancellation and the exclusion of DCC as a party in Civil
transpired. Case No. Q-02-47925.1âwphi1

Furthermore, and noticeably enough,the transfer from These circumstances, taken altogether, strongly indicate
Carlos to the spouses Guevara was effected only fifteen(15) that Carlos and the spouses Guevara failed to exercise the
days after Locsin demanded the surrender of the property necessary level of caution expected of a bona fide buyer
fromCarlos. Reviewing the timeline: and even performed acts that are highly suspect.
Consequently, this Court could not give respondents the
May 9, 2002: Locsin’s counsel sent a letter to Carlos, protection accorded to innocent purchasers in good faith
requesting that he return the property to Locsin since the and for value.
latter’s signature in the purported deed of sale between her
and Bolos was a forgery. Locsin is entitled to nominal damages
We now delve into petitioner’s prayer for exemplary WHEREFORE, in light of the foregoing, the Petition is
damages, attorney’s fees, and costs of suit. Here, the Court hereby GRANTED. The assailed Decision of the Court of
notes that petitioner failed to specifically pray that moral Appeals dated June 6, 2012 in CA-G.R. CV No. 96659
damages be awarded. Additionally, she never invoked any affirming the Decision of the Regional Trial Court, Branch
of the grounds that would have warranted the award of 77, Quezon City, in Civil Case No. Q-02-47925; as well as
moral damages. As can be gleaned from the records, its Resolution dated October 30, 2012, denying
lacking from her testimony is any claim that she suffered reconsideration thereof, are hereby REVERSED and SET
any form of physical suffering, mental anguish, fright, ASIDE. TCT No. N-200074 in the name of Marylou Bolos,
serious anxiety, besmirched reputation, wounded feelings, and the titles descending therefrom, namely, TCT Nos. N-
moral shock, social humiliation, or any other similar 205332 and N-237083 in the name of Carlos Hizon, and the
circumstance.29 Thus, we are constrained to refrain from Spouses Jose Manuel & Lourdes Guevara, respectively, are
awarding moral damages in favor of petitioner. hereby declared NULL and VOID. Respondents and all
other persons acting under their authority are hereby
In the same vein, exemplary damages cannot be awarded in DIRECTED to surrender possession of the subject property
favor of petitioner. Well-settled that this species of in favor of petitioner. Respondents Bernardo Hizon, Carlos
damages is allowed only in addition to moral damages such Hizon, and the spouses Jose Manuel and Lourdes Guevara
that no exemplary damages can be awarded unless the shall jointly and severally pay petitioner PhP 75,000 as
claimant first establishes his clear right to moral nominal damages, PhP 75,000 as attorney's fees, and costs
damages.30 Consequently, despite our finding that of suit.
respondents acted in a fraudulent manner, petitioner’s claim
for exemplary damages is unavailing at this point. The Register of Deeds of Quezon City is hereby
ORDERED to (1) cancel TCT No. N-237083; (2) reinstate
Nevertheless, we find an award for nominal damages to be TCT No. RT-97467; and (3) reissue TCT No. RT-97467 in
in order. Under prevailing jurisprudence, nominal damages favor of petitioner, without requiring from petitioner
are "recoverable where a legal right is technically violated payment for any and all expenses in performing the three
and must be vindicated against an invasion that has acts.
produced no actual present loss of any kind or where there
has been a breach of contract and no substantial injury or SO ORDERED
actual damages whatsoever have been or can be
shown."31 As expounded in Almeda v. Cariño,32 a violation
of the plaintiff’s right, even if only technical, is sufficient to
support an award of nominal damages. So long as there is a
showing of a violation of the right of the plaintiff, as herein
petitioner, an award of nominal damages is proper.33

In the case at bar, this Court recognizes that petitioner was

unduly deprived of her ownership rights overthe property,
and was compelled to litigate for its recovery, for almost
ten (10) years. Clearly, this could have entitled her to actual
or compensatory damages had she quantified and proved,
during trial, the amounts which could have accrued in her
favor, including commercial fruits such as reasonable rent
covering the pendency of the case. Nonetheless,
petitioner’s failure to prove actual or compensatory
damages does not erase the fact that her property rights
were unlawfully invaded by respondents, entitling her to
nominal damages.

As to the amount to be awarded, it bears stressing that the

same is addressed to the sound discretion ofthe court,
taking into account the relevant
circumstances.34 Considering the length of time petitioner
was deprived of her property and the bad faith attending
respondents’ actuations in the extant case, we find the
amount of seventy-five thousand pesos (PhP 75,000) as
sufficient nominal damages. Moreover, respondents should
be held jointly and severally liable for the said amount,
attorney’s fees in the amount of an additional seventy-
fivethousand pesos (PhP 75,000), and the costs of the suit.
DOMINGO REALTY, INC. and AYALA STEEL On December 3, 1987, Mariano Yu representing Domingo
MANUFACTURING CO., INC., Petitioners,  Realty, Luis Recato Dy6, and Antonio M. Acero, all
vs. assisted by counsels, executed a Compromise Agreement,
COURT OF APPEALS and ANTONIO M. which contained the following stipulations, to wit:
ACERO, Respondents.
1. That defendants admit and recognize the
DECISION ownership of the plaintiff over the property
subject of this case, covered by TCT No. S-
VELASCO, JR., J.: 107639 (75600), S-107643 (67007), and S-
107640 (67006) with a total area of 26,705
square meters;
Good judgment comes from experience, and often
experience comes from bad judgment.
2. That defendant Luis Recato Dy admits and
recognizes that his title covered by TCT No.
–– Rita Mae Brown 108027 has been proven not to be genuine and
that the area indicated therein is inside the
The Case property of the plaintiff;

This Petition for Review on Certiorari, under Rule 45 of the 3. That defendant Acero admits that the property
Revised Rules of Court, seeks the reversal of the October he is presently occupying by way of lease is
31, 1995 Decision1 of the Court of Appeals (CA) in CA- encroaching on a portion of the property of the
G.R. SP No. 33407, entitled Antonio M. Acero v. Hon. plaintiff and assume[s] and undertakes to vacate,
Sofronio G. Sayo, et al., which annulled the December 7, remove and clear any and all structures erected
1987 Decision based on a Compromise Agreement among inside the property of the plaintiff by himself and
petitioner Domingo Realty, Inc. (Domingo Realty), other third parties, duly authorized and/or who
respondent Antonio M. Acero, and defendant Luis Recato have an existing agreement with defendant
Dy in Civil Case No. 9581-P before the Pasay City Acero, and shall deliver said portion of the
Regional Trial Court (RTC), Branch CXI; and the August property of the plaintiff free and clear of any
28, 1996 Resolution2 of the CA which denied petitioners’ unauthorized structures, shanties, occupants,
Motion for Reconsideration of its October 31, 1995 squatters or lessees within a period of sixty (60)
Decision. days from date of signing of this compromise
agreement. Should defendant Acero fail in his
The Facts obligation to vacate, remove and clear the
structures erected inside the property of the
plaintiff within the period of 60 days afore-
On November 19, 1981, petitioner Domingo Realty filed its mentioned, plaintiff shall be entitled to a writ of
November 15, 1981 Complaint3 with the Pasay City RTC execution for the immediate demolition or
against Antonio M. Acero, who conducted business under removal of said structure to fully implement this
the firm name A.M. Acero Trading,4 David Victorio, John agreement; and ejectment of all squatters and
Doe, and Peter Doe, for recovery of possession of three (3) occupants and lessees, including the dependents
parcels of land located in Cupang, Muntinlupa, Metro to fully implement this agreement;
Manila, covered by (1) Transfer Certificate of Title (TCT)
No. (75600) S-107639-Land Records of Rizal; (2) TCT No.
(67006) S-107640-Land Records of Rizal; and (3) TCT No. 4. That plaintiff admits and recognizes that
(67007) S-107643-Land Records of Rizal (the "subject defendant Luis Recato Dy bought and occupied
properties"). The said lots have an aggregate area of 26,705 the property in good faith and for value whereas
square meters, more or less, on a portion of which Acero defendant Acero leased the portion of said
had constructed a factory building for the manufacture of property likewise in good faith and for value
hollow blocks, as alleged by Domingo Realty. hereby waives absolutely and unconditionally all
claims including attorney’s fees against both
defendants in all cases pending in any court
On January 4, 1982, defendants Acero and Victorio filed whether by virtue of any judgment or under the
their December 21, 1981 Answer5 to the Complaint in Civil present complaint and undertake to withdraw
Case No. 9581-P. Acero alleged that he merely leased the and/or move to dismiss the same under the spirit
land from his co-defendant David Victorio, who, in turn, of this agreement;
claimed to own the property on which the hollow blocks
factory of Acero stood. In the Answer, Victorio assailed the
validity of the TCTs of Domingo Realty, alleging that the 5. That defendants likewise waive all claims for
said TCTs emanated from spurious deeds of sale, and damages including attorney’s fees against the
claimed that he and his predecessors-in-interest had been in plaintiff;
possession of the property for more than 70 years.
 6. That plaintiff acknowledges the benefit done In its December 28, 1990 Order,16 the trial court directed
by defendant Luis Recato Dy on the property by Acero to conduct his own re-survey of the lots based on the
incurring expenses in protecting and preserving technical description appearing in the TCTs of Domingo
the property by way of construction of perimeter Realty and to have the re-survey plans approved by the
fence and maintaining a caretaker therein and Bureau of Lands. The Order resulted from Acero’s
plaintiff has agreed to pay Luis Recato Dy the contention that he occupied only 2,000 square meters of
amount of P100,000.00 upon approval of this petitioners’ property.
agreement by this Honorable Court.7
Acero employed the services of Engr. Eligio L. Cruz who
Acting on the Compromise Agreement, the Pasay City came up with Verification Survey Plan No. Vs-13-000185.
RTC rendered the December 7, 1987 Decision which However, when the said Verification Survey Plan was
adopted the aforequoted six (6) stipulations and approved presented to the Bureau of Lands for approval, it was
the Compromise Agreement. rejected because Engr. Cruz failed to comply with the
requirements of the Bureau.17
To implement the said Decision, Domingo Realty filed its
January 21, 1988 Motion8 asking the trial court for On April 8, 1991, petitioners filed a Manifestation with
permission to conduct a re-survey of the subject properties, Motion praying for the denial of respondent’s Motion to
which was granted in the January 22, 1988 Order.9 Nullify the Compromise Agreement and for the approval of
Verification Survey Plan No. Vs-13-000135 prepared by
On February 2, 1988, respondent Acero filed his January Engr. Lara of the Bureau of Lands. The Pasay City RTC
29, 1988 Motion to Nullify the Compromise issued the December 6, 1991 Order18 denying respondent
Agreement,10claiming that the January 22, 1988 Order Acero’s Motion to Nullify the Compromise Agreement. As
authorizing the survey plan of petitioner Domingo Realty a consequence, petitioners filed a Motion for Execution on
as the basis of a resurvey would violate the Compromise December 10, 1991.19
Agreement since the whole area he occupied would be
adjudged as owned by the realty firm. On January 6, 1992, respondent filed an undated
Manifestation20 claiming, among others, that it was on
On March 18, 1988, Acero filed a Motion to record that the Compromise Agreement was only as to a
Resurvey,11 whereby it was alleged that the parties agreed portion of the land being occupied by respondent, which is
to have the disputed lots re-surveyed by the Bureau of about 2,000 square meters, more or less. He reiterated the
Lands. Thus, the trial court issued the March 21, 1988 same contentions in his December 21, 1991
Order12 directing the Director of Lands to conduct a re- Manifestation.21
survey of the subject properties.
On January 13, 1992, respondent filed a Motion to Modify
In his June 9, 1989 Report, Elpidio T. De Lara, Chief of the Order Dated 6 December ‘91,22 claiming that the said Order
Technical Services Division of the Lands Management modified the Compromise Agreement considering that it
Section of the National Capital Region - Department of allegedly involved only 1,357 square meters and not the
Environment and Natural Resources, submitted to the trial entire lot;23 and if not amended, the Order would deviate
court Verification Survey Plan No. Vs-13-000135. In the from the principle that "no man shall enrich himself at the
said Verification Survey Plan, petitioners’ TCTs covered expense of the other."
the entire land occupied by the respondent’s hollow block
factory.13 In its January 15, 1992 Order,24 the trial court approved the
issuance of a Writ of Execution to enforce the December 7,
On April 10, 1990, petitioner Ayala Steel Manufacturing 1987 Decision. On February 3, 1992, respondent Acero
Co., Inc. (Ayala Steel) filed its March 30, 1990 Motion for subsequently filed a Motion for Reconsideration25 of the
Substitution alleging that it had purchased the subject lots, January 15, 1992 Order arguing that the Order was
attaching to the motion TCT Nos. 152528, 152529, and premature and that Verification Survey Plan No. Vs-13-
152530 all in its name, as proof of purchase.14 000135 violated the Compromise Agreement.

The said motion was opposed by Acero claiming that "this On January 18, 1992, the Pasay City Hall was gutted by
case has already been terminated in accordance with the fire, destroying the records of the lower court, including
compromise agreement of the parties, hence, substitution those of this case. Thus, after reconstituting the records, the
will no longer be necessary and justified under the trial court issued the October 6, 1992 Order,26reiterating its
circumstances."15 The motion was not resolved which January 15, 1992 Order and ordering the issuance of a Writ
explains why both transferor Domingo Realty and of Execution.
transferee Ayala Steel are co-petitioners in the instant
petition. On October 23, 1992, respondent filed a Manifestation and
Compliance,27 alleging that Verification Survey Plan No.
Vs-13-000185 had been approved by the Regional Director
of the DENR; thus, he moved for the annulment of the
October 6, 1992 Order granting the Writ of Execution in In discarding the December 7, 1987 Decision based on the
favor of petitioners. Compromise Agreement, the appellate court ratiocinated
that David Victorio, the alleged lessor of Acero, was not a
Given the conflicting Verification Survey Plans of the party to the Compromise Agreement; thus, there would
parties, the trial court issued the October 11, 1993 always remain the probability that he might eventually
Order28requiring the Bureau of Lands Director to determine resurface and assail the Compromise Agreement, giving
which of the two survey plans was correct. rise to another suit. Moreover, the CA found the
Compromise Agreement vague, not having stipulated a
mutually agreed upon surveyor, "who would survey the
Subsequently, Regional Technical Director Eriberto V. properties using as a basis, survey plans acceptable to both,
Almazan of the Land Registration Authority issued the and to thereafter submit a report to the court."36
November 24, 1993 Order29 cancelling Verification Survey
Plan No. Vs-13-000185, submitted by Engineer Eligio
Cruz, who was hired by respondent Acero, and declared Likewise, the CA sustained Acero’s belief that he would
Verification Survey Plan No. Vs-13-000135, submitted by only have to vacate a portion of the property he was
Engineer Lara of the Bureau of Lands, as the correct Plan. presently occupying, which was tantamount to a mistake
that served as basis for the nullification of the Compromise
Agreement entered into.
Thereafter, petitioners filed their January 12, 1994 Ex-parte
Manifestation with Motion,30 praying for the
implementation of the Writ of Execution against the On January 17, 1996, petitioners filed a Motion for
disputed lands, which was granted in the January 12, 1994 Reconsideration37 of the adverse Decision, which was
Order.31 consequently rejected in the CA’s August 28, 1996
Resolution.
Respondent’s Motion for Reconsideration32 of the January
12, 1994 Order was denied in the February 1, 1994 Thus, the instant petition is in our hands.
Order33 of the Pasay City RTC.
The Issues
Aggrieved, respondent Acero filed before the CA his
February 23, 1994 Petition for Certiorari and Mandamus The issues as stated in the petition are as follows:
with Urgent Prayer for Issuance of a Temporary
Restraining Order,34 under Rule 65 of the Rules of Court, 1. The respondent Court of Appeals erred in
against petitioners and Judge Sofronio G. Sayo as presiding nullifying and setting aside judgment on
judge of the lower court. In the petition, respondent sought Compromise Agreement and the Compromise
to nullify and set aside the RTC Orders dated December 6, Agreement itself as well as the subsequent orders
1991, January 15, 1992, October 6, 1992, January 12, 1994, of the court a quo though there is no motion to set
and February 1, 1994, all of which pertain to the execution aside the judgment on the Compromise
of the December 7, 1987 Decision on the Compromise Agreement before the court a quo on the ground
Agreement. Significantly, respondent did not seek the of fraud, mistake or duress;
annulment of said judgment but merely reiterated the issue
that under the Compromise Agreement, he would only be
vacating a portion of the property he was occupying. 2. The respondent Court of Appeals erred in
nullifying and setting aside the judgment on
Compromise Agreement and the Compromise
The Ruling of the Court of Appeals Agreement itself as well as the subsequent Orders
of the Court of quo [sic] though in the Petition for
On October 31, 1995, the CA promulgated the assailed Certiorari and Mandamus before respondent
Decision, the fallo of which reads: Court of Appeals, private respondent argued that
judgment on Compromise Agreement is final,
IN VIEW OF THE FOREGOING, the petition for executory, immutable and unalterable;
certiorari is GRANTED and the Orders of respondent court
dated December 6, 1991, January 15, 1992, October 6, 3. The respondent Court of Appeals erred in
1992, and January 12, 1994, and February 1, 1994 are SET nullifying and setting aside Judgment on
ASIDE. In the interest of justice, and consistent with the Compromise Agreement and the Compromise
views expressed by this Court, the Compromise Judgment Agreement itself as well as the subsequent Orders
dated December 7, 1987 of respondent court is likewise of the Court a quo based on fraud or mistake
SET ASIDE. Respondent Court is likewise directed to though said issues were not raised before the
proceed with the hearing of Civil Case No. 9581-P on the Court a quo, and no evidence was introduced to
merits and determine, once and for all, the respective substantiate fraud or mistake before the court a
proprietary rights of the litigants thereto. quo;

SO ORDERED.35
 4. The respondent Court of Appeals erred when it contract on any of the said grounds for annulment of
ruled that the non-inclusion of one of the parties contract within 15 days from notice of judgment. Under
in this case, and the vagueness of the Rule 37, said party can either file a motion for new trial or
Compromise Agreement are grounds to nullify reconsideration. A party can file a motion for new trial
and set aside the Compromise Agreement; and based on fraud, accident or mistake, excusable negligence,
or newly discovered evidence.
5. The respondent Court of Appeals erred when it
entertained the Petition for Certiorari and On the other hand, a party may decide to seek the recall or
Mandamus though it was filed beyond reasonable modification of the judgment by means of a motion for
time if not barred by laches.38 reconsideration on the ground that "the decision or final
order is contrary to law" if the consent was procured
Restated, the issues are: through fraud, mistake, or duress. Thus, the motion for a
new trial or motion for reconsideration is the readily
available remedy for a party to challenge a judgment if the
I. 15-day period from receipt of judgment for taking an
appeal has not yet expired. This motion is the most plain,
WHETHER THE PETITION BEFORE THE COURT OF speedy, and adequate remedy in law to assail a judgment
APPEALS WAS FILED OUT OF TIME OR BARRED based on a compromise agreement which, even if it is
BY LACHES; immediately executory, can still be annulled for vices of
consent or forgery.39
II.
Prior to the effectivity of the 1997 Rules of Civil Procedure
WHETHER THE NON-INCLUSION OF DAVID on July 1, 1997, an order denying a motion for new trial or
VICTORIO WOULD NULLIFY THE COMPROMISE reconsideration was not appealable since the judgment in
AGREEMENT; the case is not yet final. The remedy is to appeal from the
challenged decision and the denial of the motion for
reconsideration or new trial is assigned as an error in the
III. appeal.40 Under the present [1997] Rules of Civil
Procedure, the same rule was maintained that the order
WHETHER THE JUDGMENT ON COMPROMISE denying said motion is still unappealable and the rule is still
AGREEMENT SHOULD BE SET ASIDE ON THE to appeal from the judgment and not from the order
GROUND OF VAGUENESS; AND rejecting the motion for reconsideration/new trial.

IV. If the 15-day period for taking an appeal has lapsed, then
the aggrieved party can avail of Rule 38 by filing a petition
for relief from judgment which should be done within 60
WHETHER THE JUDGMENT ON COMPROMISE
days after the petitioner learns of the judgment, but not
AGREEMENT SHOULD BE SET ASIDE ON THE
more than six (6) months after such judgment or final order
GROUND OF MISTAKE.
was entered. Prior to the effectivity of the 1997 Rules of
Civil Procedure in 1997, if the court denies the petition
The Court’s Ruling under Rule 38, the remedy is to appeal from the order of
denial and not from the judgment since said decision has
The petition is meritorious. already become final and already unappealable.41However,
in the appeal from said order, the appellant may likewise
assail the judgment. Under the 1997 Rules of Civil
The preliminary issue involves the query of what proper
Procedure, the aggrieved party can no longer appeal from
remedy is available to a party who believes that his consent
the order denying the petition since this is proscribed under
in a compromise agreement was vitiated by mistake upon
Section 1 of Rule 41. The remedy of the party is to file a
which a judgment was rendered by a court of law.
special civil action for certiorari under Rule 65 from the
order rejecting the petition for relief from judgment.
There is no question that a contract where the consent is
given through mistake, violence, intimidation, undue
The records of the case reveal the following:
influence, or fraud is voidable under Article 1330 of the
Civil Code. If the contract assumes the form of a
Compromise Agreement between the parties in a civil case, 1. December 3, 1987 – the parties signed the
then a judgment rendered on the basis of such covenant is Compromise Agreement;
final, unappealable, and immediately executory. If one of
the parties claims that his consent was obtained through 2. December 7, 1987 – a decision/judgment was
fraud, mistake, or duress, he must file a motion with the rendered based on the December 3, 1987
trial court that approved the compromise agreement to Compromise Agreement;
reconsider the judgment and nullify or set aside said
 3. February 2, 1988 – Acero filed a Motion to What respondent Acero should have done was to file a
Nullify the Compromise Agreement; petition for relief from judgment when he became aware
that he lost his right of appeal on December 26, 1991. Even
4. December 6, 1991 – the trial court denied with this approach, defendant Acero was also remiss.
Acero’s Motion to Nullify the Compromise
Agreement; In sum, the petition for certiorari instituted by respondent
Acero with the CA is a wrong remedy; a simple appeal to
5. December 11, 1991 – defendant Acero the CA would have sufficed. Since the certiorari action is
received the December 6, 1991 Order which an improper legal action, the petition should have been
denied said motion;42 rejected outright by the CA.

6. December 26, 1991 – the 15-day period to Assuming arguendo that a petition for certiorari with the
appeal to the CA expired by the failure of CA is the appropriate remedy, still, said petition was filed
defendant Acero to file an appeal with said out of time.
appellate court;
The petition before the CA was filed prior to the effectivity
7. January 15, 1992 – the trial court issued the of the 1997 Rules of Court when there was still no
Order which granted petitioners’ motion for the prescribed period within which to file said petition, unlike
issuance of a Writ of Execution; in the present Section 4 of Rule 65 wherein a Petition for
Certiorari and Mandamus must be filed within 60 days
from notice of the judgment, final order, or resolution
8. October 6, 1992 – the trial court reiterated its appealed from, or of the denial of the petitioners’ motion
January 15, 1992 Order directing the issuance of for new trial or reconsideration after notice of judgment.
a Writ of Execution after the records of the case
were lost in a fire that gutted the Pasay City Hall;
Section 4, Rule 65 previously read:
9. January 12, 1994 – the trial court issued the
Order which directed the implementation of the Section 4. Where petition filed.—The petition may be filed
Writ of Execution prayed for by petitioners; in the Supreme Court, or, if it relates to the acts or
omissions of an inferior court, or of a corporation, board or
officer or person, in a Court of First Instance having
10. February 1, 1994 – the trial court issued the jurisdiction thereof. It may also be filed in the Court of
Order which denied respondent’s Motion for Appeals if it is in aid of its appellate jurisdiction.
Reconsideration of its January 12, 1994 Order;
and
Petitions for certiorari under Rules 43, 44 and 45 shall be
filed with the Supreme Court.
11. April 4, 1994 – Acero filed with the CA a
petition for certiorari in CA-G.R. SP No. 33407
entitled Antonio M. Acero v. Domingo Realty, Before the 1997 Rules of Civil Procedure became effective
Inc., et al. on July 1, 1997, the yardstick to determine the timeliness of
a petition for certiorari under Rule 65 was the
reasonableness of the time that had elapsed from receipt of
In his undated Manifestation, respondent Acero admitted notice of the assailed order/s of the trial court up to the
having received a copy of the December 7, 1987 Decision filing of the appeal with the CA.44 In a number of cases, the
on December 11, 1987. However, it was only on February Court ruled that reasonable time can be pegged at three (3)
2, 1988 when he filed a Motion to Nullify the Compromise months.45
Agreement which was discarded for lack of merit by the
trial court on December 6, 1991. If the Motion to Nullify
the Compromise Agreement is treated as a motion for In the present case, the Order denying the Motion to
reconsideration and/or for new trial, then Acero should Nullify the Compromise Agreement was issued on
have filed an appeal from the December 7, 1987 Decision December 6, 1991. The petition for certiorari was filed on
and assigned as error the December 6, 1991 Order denying April 4, 1994. The period of two (2) years and four (4)
said motion pursuant to the rules existing prior to the 1997 months cannot be considered fair and reasonable. With
Rules of Civil Procedure. He failed to file such appeal but respect to the January 15, 1992 Order granting the writ of
instead filed a petition for certiorari under Rule 65 with the execution and the October 6, 1992 Order directing the
CA on April 4, 1994. This is prejudicial to respondent issuance of the writ, it is evident that the petition before the
Acero as the special civil action of certiorari is not the CA was filed more than three (3) months after the receipt
proper remedy. If the aggrieved party does not interpose a by respondent Acero of said orders and the filing of the
timely appeal from the adverse decision, a special civil petition is likewise unreasonably delayed.
action for certiorari is not available as a substitute for a lost
appeal.43 On the second issue, petitioners assail the ruling of the
appellate court that David Victorio who is claimed to be the
lessor of Acero, and who is impleaded as a defendant in plaintiff which defendant Acero admitted to be correct.
Civil Case No. 9581-P, was not made a party to the Thus, the object of the Compromise Agreement is
Compromise Agreement and hence, he may later "assail the considered determinate and specific.
compromise agreement as not binding upon him, thereby
giving rise to another suit."46 Moreover, "vagueness" is defined in Black’s Law
Dictionary as: "indefinite, uncertain; not susceptible of
We find merit in petitioners’ position. being understood."

The CA was unable to cite a law or jurisprudence that A perusal of the entire Compromise Agreement will negate
supports the annulment of a compromise agreement if one any contention that there is vagueness in its provisions. It
of the parties in a case is not included in the settlement. The must be remembered that in the interpretation of contracts,
only legal effect of the non-inclusion of a party in a an instrument must be construed so as to give effect to all
compromise agreement is that said party cannot be bound the provisions of these contracts.49 Thus, the Compromise
by the terms of the agreement. The Compromise Agreement must be considered as a whole.
Agreement shall however be "valid and binding as to the
parties who signed thereto."47 The alleged vagueness revolves around the term "portion"
in paragraph three (3) of the Compromise
The issue of ownership between petitioners and David Agreement,50taken together with paragraph one (1) which
Victorio can be threshed out by the trial court in Civil Case we quote:
No. 9581-P. The proper thing to do is to remand the case
for continuation of the proceedings between petitioners and 1. That defendants admit and recognize the ownership of
defendant David Victorio but not to annul the partial the plaintiff over the property subject of this case, covered
judgment between petitioners and respondent Acero which by TCT No. S-107639 (75600), S-107643 (67007), and S-
has been pending execution for 20 years. 107640 (67006) with a total area of 26,705 square meters;

With regard to the third issue, petitioners assail the ruling xxxx
of the CA that the Compromise Agreement is vague as
there is still a need to determine the exact metes and
bounds of the encroachment on the petitioners’ lot. 3. That defendant Acero admits that the property he is
presently occupying by way of lease is encroaching on a
portion of the property of the plaintiff and assume and
The object of a contract, in order to be considered as undertakes to vacate, remove and clear any and all
"certain," need not specify such object with absolute structures erected inside the property of the plaintiff by
certainty. It is enough that the object is determinable in himself and other third parties, duly authorized and/or who
order for it to be considered as "certain." Article 1349 of have an existing agreement with defendant Acero, and shall
the Civil Code provides: deliver said portion of the property of the plaintiff free and
clear of any unauthorized structures, shanties, occupants,
Article 1349. The object of every contract must be squatters or lessees within a period of sixty (60) days from
determinate as to its kind. The fact that the quantity is not date of signing of this compromise agreement. Should
determinate shall not be an obstacle to the existence of the defendant Acero fail in his obligation to vacate, remove and
contract, provided it is possible to determine the same, clear the structures erected inside the property of the
without the need of a new contract between the parties. plaintiff within the period of 60 days afore-mentioned,
plaintiff shall be entitled to a writ of execution for the
In the instant case, the title over the subject property immediate demolition or removal of said structure to fully
contains a technical description that provides the metes and implement this agreement; and ejectment of all squatters
bounds of the property of petitioners. Such technical and occupants and lessees, including the dependents to
description is the final determinant of the extent of the fully implement this agreement. (Emphasis supplied.)
property of petitioners. Thus, the area of petitioners’
property is determinable based on the technical descriptions Respondent harps on their contention that the term
contained in the TCTs. "portion" in paragraph 3 of the Compromise Agreement
refers to the property which they are occupying.
Notably, the determination made by the Bureau of Lands— Respondent’s interpretation of paragraph 3 of the
that Verification Survey Plan No. Vs-13-000135 is the Compromise Agreement is mistaken as it is anchored on
correct Plan—is controlling and shall prevail over his belief that the encroachment on the property of
Verification Survey Plan No. Vs-13-000185 submitted by petitioners is only a portion and not the entire lot he is
Acero. Findings of fact by administrative agencies, having occupying. This is apparent from his Supplement to his
acquired expertise in their field of specialization, must be Petition for Certiorari and Mandamus where he explained:
given great weight by this Court.48 Even if the exact area of
encroachment is not specified in the agreement, it can still Petitioner [Acero] entered into this agreement because of
be determined from the technical description of the title of his well-founded belief and conviction that a portion of the
property he is occupying encroaches only a portion of the documents, is subject to the provisions of Article 1330 of
property of private respondent. In fine, only a portion of the this Code.
property petitioner is occupying (not all of it) encroaches
on a portion of the property of private respondent.51 Article 1330. A contract where the consent is given through
mistake, violence, intimidation, undue influence, or fraud is
This contention is incorrect. The agreement is clear that voidable (emphasis supplied).
respondent Acero admitted that "the property he is
presently occupying by way of lease is encroaching on "Mistake" has been defined as a "misunderstanding of the
a portion of the property of the plaintiff." Thus, whether it meaning or implication of something" or "a wrong action
is only a portion or the entire lot Acero is leasing that will or statement proceeding from a faulty judgment x x x."52
be affected by the agreement is of no importance. What
controls is the encroachment on the lot of petitioner
Domingo Realty regardless of whether the entire lot or only Article 1333 of the Civil Code of the Philippines however
a portion occupied by Acero will be covered by the states that "there is no mistake if the party alleging it knew
encroachment. the doubt, contingency or risk affecting the object of the
contract."
While it may be the honest belief of respondent Acero that
only a portion of the lot he is occupying encroaches on the Under this provision of law, it is presumed that the parties
26,705-square meter lot of petitioner Domingo Realty and to a contract know and understand the import of their
later, Ayala Steel, the Court finds that the true and real agreement. Thus, civil law expert Arturo M. Tolentino
agreement between the parties is that any encroachment by opined that:
respondent Acero on the lot of petitioners will be
surrendered to the latter. This is apparent from the To invalidate consent, the error must be excusable. It must
undertaking in paragraph 3 that defendant Acero be real error, and not one that could have been avoided by
"undertakes to vacate, remove and clear any and all the party alleging it. The error must arise from facts
structures erected inside the property of the plaintiff." This unknown to him. He cannot allege an error which refers to
prestation results from the admission against the interest of a fact known to him, or which he should have known by
respondent Acero that he "admits and recognizes the ordinary diligent examination of the facts. An error so
ownership of the plaintiff (Domingo Realty)" over the patent and obvious that nobody could have made it, or one
subject lot. The controlling word therefore is which could have been avoided by ordinary prudence,
"encroachment"—whether it involves a portion of or the cannot be invoked by the one who made it in order to annul
entire lot claimed by defendant David Victorio. To his contract. A mistake that is caused by manifest
reiterate, the word "portion" refers to petitioners’ lot and negligence cannot invalidate a juridical act.53 (Emphasis
not that of Acero’s. Contrary to the disposition of the CA, supplied.)
we rule that the terms of the Compromise Agreement are
clear and leave no doubt upon the intent of the parties that Prior to the execution of the Compromise Agreement,
respondent Acero will vacate, remove, and clear any and all respondent Acero was already aware of the technical
structures erected inside petitioners’ property, the description of the titled lots of petitioner Domingo Realty
ownership of which is not denied by him. The literal and more so, of the boundaries and area of the lot he leased
meaning of the stipulations in the Compromise Agreement from David Victorio. Before consenting to the agreement,
will control under Article 1370 of the Civil Code. Thus, the he could have simply hired a geodetic engineer to conduct a
alleged vagueness in the object of the agreement cannot be verification survey and determine the actual encroachment
made an excuse for its nullification. of the area he was leasing on the titled lot of petitioner
Domingo Realty. Had he undertaken such a precautionary
Finally, with regard to the fourth issue, petitioners question measure, he would have known that the entire area he was
the finding of the CA that the compromise judgment can be occupying intruded into the titled lot of petitioners and
set aside on the ground of mistake under Article 2038 of possibly, he would not have signed the agreement.
the Civil Code, because respondent Acero gave his consent
to the Compromise Agreement in good faith that he would In this factual milieu, respondent Acero could have easily
only vacate a portion of his lot in favor of petitioner averted the alleged mistake in the contract; but through
Domingo Realty. palpable neglect, he failed to undertake the measures
expected of a person of ordinary prudence. Without doubt,
We rule otherwise. this kind of mistake cannot be resorted to by respondent
Acero as a ground to nullify an otherwise clear, legal, and
Articles 2038 and 1330 of the Civil Code allow a party to a valid agreement, even though the document may become
contract, on the ground of mistake, to nullify a compromise adverse and even ruinous to his business.
agreement, viz:
Moreover, respondent failed to state in the Compromise
Article 2038. A compromise in which there is mistake, Agreement that he intended to vacate only a portion of the
fraud, violence, intimidation, undue influence, or falsity of property he was leasing. Such provision being beneficial to
respondent, he, in the exercise of the proper diligence boundary, metes, and bounds of the lot subject of said title
required, should have made sure that such matter was based on the technical description in the said title and the
specified in the Compromise Agreement. Respondent approved survey plan in the Land Management Bureau; (3)
Acero’s failure to have the said stipulation incorporated in conduct an actual ocular inspection of the lot; (4) inquire
the Compromise Agreement is negligence on his part and from the owners and possessors of adjoining lots with
insufficient to abrogate said agreement. respect to the true and legal ownership of the lot in
question; (5) put up signs that said lot is being purchased,
In Torres v. Court of Appeals,54 which was also cited in LL leased, or encumbered; and (6) undertake such other
and Company Development and Agro-Industrial measures to make the general public aware that said lot will
Corporation v. Huang Chao Chun,55 it was held that: be subject to alienation, lease, or encumbrance by the
parties. Respondent Acero, for all his woes, may have a
legal recourse against lessor David Victorio who inveigled
Under Article 1315 of the Civil Code, contracts bind the him to lease the lot which turned out to be owned by
parties not only to what has been expressly stipulated, but another.
also to all necessary consequences thereof, as follows:
WHEREFORE, the petition is hereby GRANTED and the
ART. 1315. Contracts are perfected by mere consent, and assailed Decision and Resolution of the CA are
from that moment the parties are bound not only to the REVERSED. The questioned Orders of the Pasay City
fulfillment of what has been expressly stipulated but also to RTC dated December 6, 1991, January 15, 1992, October
all the consequences which, according to their nature, may 6, 1992, January 12, 1994, and February 1, 1994, including
be in keeping with good faith, usage and law. the Decision dated December 7, 1987, are AFFIRMED.
The case is remanded to the Pasay RTC, Branch III for
It is undisputed that petitioners are educated and are thus further proceedings with respect to petitioner Domingo
presumed to have understood the terms of the contract they Realty’s November 15, 1981 Complaint57 against one of the
voluntarily signed. If it was not in consonance with their defendants, David Victorio. No costs.
expectations, they should have objected to it and insisted on
the provisions they wanted. SO ORDERED

Courts are not authorized to extricate parties from the

necessary consequences of their acts, and the fact that the
contractual stipulations may turn out to be financially
disadvantageous will not relieve parties thereto of their
obligations. They cannot now disavow the relationship
formed from such agreement due to their supposed
misunderstanding of its terms.

The mere fact that the Compromise Agreement favors one

party does not render it invalid. We ruled in Amarante v.
Court of Appeals that:

Compromises are generally to be favored and cannot be set

aside if the parties acted in good faith and made reciprocal
concessions to each other in order to terminate a case. This
holds true even if all the gains appear to be on one side and
all the sacrifices on the other (emphasis supplied).56

One final note. While the Court can commiserate with

respondent Acero in his sad plight, nonetheless we have no
power to make or alter contracts in order to save him from
the adverse stipulations in the Compromise Agreement.
Hopefully this case will serve as a precaution to
prospective parties to a contract involving titled lands for
them to exercise the diligence of a reasonably prudent
person by undertaking measures to ensure the legality of
the title and the accurate metes and bounds of the lot
embraced in the title. It is advisable that such parties (1)
verify the origin, history, authenticity, and validity of the
title with the Office of the Register of Deeds and the Land
Registration Authority; (2) engage the services of a
competent and reliable geodetic engineer to verify the
JOSEPH L. SY, NELSON GOLPEO and JOHN 2. The supposed 1980 sale from him to Scott was
TAN, Petitioners,  for ₱150,000.00; but despite the lapse of more
vs. than 10 years thereafter, the alleged 1990 sale
NICOLAS CAPISTRANO, JR., substituted by from Scott to Jamilar was also for ₱150,000.00.
JOSEFA B. CAPISTRANO, REMEDIOS TERESITA
B. CAPISTRANO and MARIO GREGORIO B. 3. Both deeds were presented for registration
CAPISTRANO; NENITA F. SCOTT; SPS. JUANITO simultaneously on June 24, 1992.
JAMILAR and JOSEFINA JAMILAR; SPS.
MARIANO GILTURA and ADELA
GILTURA, Respondents. 4. Although the deed in favor of Scott states that
it was executed on March 9, 1980, the annotation
thereof at the back of TCT No. 76496 states that
RESOLUTION the date of the instrument is March 9, 1990.

NACHURA, J.: 5. Even if there was no direct sale from

Capistrano to Jamilar, the transfer of title was
This is a petition for review on certiorari under Rule 45 of made directly to the latter. No TCT was issued in
the Rules of Court of the Decision of the Court of Appeals favor of Scott.
(CA) dated July 23, 2002 in CA-G.R. CV No. 53314.
6. The issuance of TCT No. 249959 in favor of
The case originated from an action for reconveyance of a Jamilar was with the help of Joseph Sy, who
large tract of land in Caloocan City before the Regional provided for (sic) money for the payment of the
Trial Court (RTC), Branch 129, Caloocan City, entitled capital gains tax, documentary stamps, transfer
Nicolas Capistrano, Jr. v. Nenita F. Scott, Spouses Juanito fees and other expenses of registration of the
and Josefina Jamilar, Joseph L. Sy, Nelson Golpeo and deeds of sale.
John Tan, and the Register of Deeds, Caloocan City. Said
case was docketed as Civil Case No. C-15791. 7. On July 8, 1992, an Affidavit of Adverse
Claim was annotated at the back of Jamilar’s
The antecedents are as follows: TCT No. 249959 at the instance of Sy, Golpeo,
and Tan under a Contract to Sell in their favor by
Sometime in 1980, Nenita Scott (Scott) approached the Jamilar spouses. Said contract was executed
respondent Nicolas Capistrano, Jr. (Capistrano) and offered sometime in May, 1992 when the title to the
her services to help him sell his 13,785 square meters of property was still in the name of Capistrano.
land covered by Transfer Certificate of Title (TCT) No.
76496 of the Register of Deeds of Caloocan City. 8. Around July 28, 1992, upon request of the
Capistrano gave her a temporary authority to sell which Jamilar spouses, TCT No. 249959 was cancelled
expired without any sale transaction being made. To his and three (3) new certificates of title (TCT Nos.
shock, he discovered later that TCT No. 76496, which was 251524, 251525, and 251526) all in the name of
in his name, had already been cancelled on June 24, 1992 Jamilar on the basis of an alleged subdivision
and a new one, TCT No. 249959, issued over the same plan (No. Psd-13-011917) without Capistrano’s
property on the same date to Josefina A. Jamilar. TCT No. knowledge and consent as registered owner. The
249959 likewise had already been cancelled and replaced notice of adverse claim of Sy, Golpeo, and Tan
by three (3) TCTs (Nos. 251524, 251525, and 251526), all was carried over to the three new titles.
in the names of the Jamilar spouses. TCT Nos. 251524 and
251526 had also been cancelled and replaced by TCT Nos. 9. Around August 18, 1992, Sy, Golpeo, and Tan
262286 and 262287 issued to Nelson Golpeo and John B. filed Civil Case No. C-15551 against the Jamilars
Tan, respectively. and another couple, the Giltura spouses, for
alleged violations of the Contract to Sell. They
Upon further inquiries, Capistrano also discovered the caused a notice of lis pendens to be annotated on
following: the three (3) TCTs in Jamilar’s name. Said civil
case, however, was not prosecuted.
1. The cancellation of his TCT No. 76496 and the
issuance of TCT No. 249959 to Jamilar were 10. On January 26, 1993, a Deed of Absolute
based upon two (2) deeds of sale, i.e., a "Deed of Sale was executed by the Jamilars and the
Absolute Sale" purportedly executed by him in Gilturas, in favor of Golpeo and Tan. Thus, TCT
favor of Scott on March 9, 1980 and a "Deed of Nos. 251524 and 251526 were cancelled and
Absolute Sale" allegedly executed by Scott in TCT Nos. 262286 and 262287 were issued to
favor of Jamilar on May 17, 1990. Golpeo and Tan, respectively. TCT No. 251525
remained in the name of Jamilar.1
Thus, the action for reconveyance filed by Capistrano, Later, Sy, Golpeo, and Tan filed a third-party complaint
alleging that his and his wife’s signatures on the purported against the Giltura spouses who were the Jamilars’ alleged
deed of absolute sale in favor of Scott were forgeries; that co-vendors of the subject property.
the owner’s duplicate copy of TCT No. 76496 in his name
had always been in his possession; and that Scott, the Thereafter, trial on the merits ensued.
Jamilar spouses, Golpeo, and Tan were not innocent
purchasers for value because they all participated in
defrauding him of his property. Capistrano claimed Subsequently, the trial court decided in favor of Capistrano.
₱1,000,000.00 from all defendants as moral damages, In its Decision dated May 7, 1996, adopting the theory of
₱100,000.00 as exemplary damages; and ₱100,000.00 as Capistrano as presented in his memorandum, the trial court
attorney’s fees. rendered judgment as follows:

In their Answer with Counterclaim, the Jamilar spouses 1. Declaring plaintiff herein as the absolute
denied the allegations in the complaint and claimed that owner of the parcel of land located at the Tala
Capistrano had no cause of action against them, as there Estate, Bagumbong, Caloocan City and covered
was no privity of transaction between them; the issuance of by TCT No. 76496;
TCT No. 249959 in their names was proper, valid, and
legal; and that Capistrano was in estoppel. By way of 2. Ordering defendant Register of Deeds to cause
counterclaim, they sought ₱50,000.00 as actual damages, the cancellation of TCT No. 251525 registered in
₱50,000.00 as moral damages, ₱50,000.00 as exemplary the name of defendant Josefina Jamilar;
damages, and ₱50,000.00 as attorney’s fees.
3. Ordering defendant Register of Deeds to cause
In their Answer, Sy, Golpeo, and Tan denied the allegations the cancellation of TCT Nos. 262286 and 262287
in the complaint and alleged that Capistrano had no cause registered in the names of defendants Nelson
of action against them; that at the time they bought the Golpeo and John B. Tan;
property from the Jamilars and the Gilturas as unregistered
owners, there was nothing in the certificates of title that 4. Ordering defendant Register of Deeds to cause
would indicate any vice in its ownership; that a buyer in the issuance to plaintiff of three (3) new TCTs, in
good faith of a registered realty need not look beyond the replacement of the aforesaid TCTs Nos. 251525,
Torrens title to search for any defect; and that they were 262286 and 262287;
innocent purchasers of the land for value. As counterclaim,
they sought ₱500,000.00 as moral damages and ₱50,000.00
as attorney’s fees. 5. Ordering all the private defendants in the
above-captioned case to pay plaintiff, jointly and
severally, the reduced amount of ₱400,000.00 as
In her Answer with Cross-claim, Scott denied the moral damages;
allegations in the complaint and alleged that she had no
knowledge or any actual participation in the execution of
the deeds of sale in her favor and the Jamilars’; that she 6. Ordering all the private defendants in the
only knew of the purported conveyances when she received above-captioned case to pay to plaintiff, jointly
a copy of the complaint; that her signatures appearing in and severally, the reduced sum of ₱50,000.00 as
both deeds of sale were forgeries; that when her authority exemplary damages;
to sell the land expired, she had no other dealings with it;
that she never received any amount of money as alleged 7. Ordering all the private defendants in the
consideration for the property; and that, even if she were above-captioned case to pay plaintiff’s counsel,
the owner, she would never have sold it at so low a price. jointly and severally, the reduced amount of
₱70,000.00 as attorney’s fees, plus costs of suit;
By way of Cross-claim against Sy, Golpeo, Tan, and the
Jamilars, Scott alleged that when she was looking for a 8. Ordering the dismissal of defendants Sy,
buyer of the property, the Jamilars helped her locate the Golpeo and Tan’s Cross-Claim against defendant
property, and they became conversant with the details of spouses Jamilar;
the ownership and other particulars thereof; that only the
other defendants were responsible for the seeming criminal
9. Ordering the dismissal of defendants Sy,
conspiracy in defrauding Capistrano; that in the event she
Golpeo and Tan’s Third-Party Complaint against
would be held liable to him, her other co-defendants should
defendant spouses Giltura; and
be ordered to reimburse her of whatever amount she may
be made to pay Capistrano; that she was entitled to
₱50,000.00 as moral damages and ₱50,000.00 as attorney’s 10. Ordering the dismissal of the Counterclaims
fees from her co-defendants due to their fraudulent against plaintiff.
conduct.
SO ORDERED.2
On appeal, the CA, in its Decision dated July 23, 2002, (f) Whether or not both deeds of sale were
affirmed the Decision of the trial court with the authentic.3
modification that the Jamilar spouses were ordered to
return to Sy, Golpeo, and Tan the amount of ₱1,679,260.00 In addition, the heirs of Capistrano pointed out that
representing their full payment for the property, with legal petitioners entered into negotiations over the property, not
interest thereon from the date of the filing of the complaint with the registered owner thereof, but only with those
until full payment. claiming ownership thereof based on questionable deeds of
sale.
Hence, this petition, with petitioners insisting that they
were innocent purchasers for value of the parcels of land The petition should be denied. The arguments proffered by
covered by TCT Nos. 262286 and 262287. They claim that petitioners all pertain to factual issues which have already
when they negotiated with the Jamilars for the purchase of been passed upon by both the trial court and the CA.
the property, although the title thereto was still in the name
of Capistrano, the documents shown to them – the court
order directing the issuance of a new owner’s duplicate Findings of facts of the CA are final and conclusive and
copy of TCT No. 76496, the new owner’s duplicate copy cannot be reviewed on appeal, as long as they are based on
thereof, the tax declaration, the deed of absolute sale substantial evidence. While, admittedly, there are
between Capistrano and Scott, the deed of absolute sale exceptions to this rule such as: (a) when the conclusion is a
between Scott and Jamilar, and the real estate tax receipts – finding grounded entirely on speculations, surmises or
there was nothing that aroused their suspicion so as to conjectures; (b) when the inference made is manifestly
compel them to look beyond the Torrens title. They mistaken, absurd or impossible; (c) when there is grave
asseverated that there was nothing wrong in financing the abuse of discretion; (d) when the judgment is based on a
cancellation of Capistrano’s title and the issuance of titles misapprehension of facts; (e) when the findings of facts are
to the Jamilars because the money they spent therefor was conflicting; (f) when the CA, in making its findings, went
considered part of the purchase price they paid for their beyond the issues of the case and the same were contrary to
property. the admissions of both the appellant and appellee.4Not one
of these exceptional circumstances is present in this case.
In their Comment, the heirs of Capistrano, who were
substituted after the latter’s death, reiterated the factual First. The CA was correct in upholding the finding of the
circumstances which should have alerted the petitioners to trial court that the purported sale of the property from
conduct further investigation, thus – Capistrano to Scott was a forgery, and resort to a
handwriting expert was not even necessary as the specimen
signature submitted by Capistrano during trial showed
(a) Why the "Deed of Absolute Sale" supposedly marked variance from that found in the deed of absolute
executed by Capistrano had remained sale. The technical procedure utilized by handwriting
unregistered for so long, i.e., from March 9, 1980 experts, while usually helpful in the examination of forged
up to June 1992, when they were negotiating with documents, is not mandatory or indispensable to the
the Jamilars and the Gilturas for their purchase of examination or comparison of handwritings.5
the subject property;
By the same token, we agree with the CA when it held that
(b) Whether or not the owner’s copy of the deed of sale between Scott and the Jamilars was also
Capistrano’s certificate of title had really been forged, as it noted the stark differences between the
lost; signatures of Scott in the deed of sale and those in her
handwritten letters to Capistrano.
(c) Whether Capistrano really sold his property to
Scott and whether Scott actually sold it to the Second. In finding that the Jamilar spouses were not
Jamilars, which matters were easily ascertainable innocent purchasers for value of the subject property, the
as both Capistrano and Scott were still alive and CA properly held that they should have known that the
their names appear on so many documents; signatures of Scott and Capistrano were forgeries due to the
patent variance of the signatures in the two deeds of sale
(d) Why the consideration for both the March 9, shown to them by Scott, when Scott presented to them the
1980 sale and the May 17, 1990 sale was the deeds of sale, one allegedly executed by Capistrano in her
same (₱150,000.00), despite the lapse of more favor covering his property; and the other allegedly
than 10 years; executed by Scott in favor of Capistrano over her property,
the ₱40,000.00 consideration for which ostensibly
(e) Why the price was so low (₱10.88 per square constituted her initial and partial payment for the sale of
meter, both in 1980 and in 1990) when the Capistrano’s property to her.
petitioners were willing to pay and actually paid
₱150.00 per square meter in May 1992; and The CA also correctly found the Gilturas not innocent
purchasers for value, because they failed to check the
veracity of the allegation of Jamilar that he acquired the CA as to warrant a discretionary judicial review by this
property from Capistrano. Court.

In ruling that Sy was not an innocent purchaser for value, WHEREFORE, the petition is DENIED DUE COURSE for
we share the observation of the appellate court that Sy failure to establish reversible error on the part of the Court
knew that the title to the property was still in the name of of Appeals. Costs against petitioners.
Capistrano, but failed to verify the claim of the Jamilar
spouses regarding the transfer of ownership of the property SO ORDERED
by asking for the copies of the deeds of absolute sale
between Capistrano and Scott, and between Scott and
Jamilar. Sy should have likewise inquired why the Gilturas
had to affix their conformity to the contract to sell by
asking for a copy of the deed of sale between the Jamilars
and the Gilturas. Had Sy done so, he would have learned
that the Jamilars claimed that they purchased the property
from Capistrano and not from Scott.

We also note, as found by both the trial court and the CA,
Tan’s testimony that he, Golpeo and Sy are brothers, he and
Golpeo having been adopted by Sy’s father. Tan also
testified that he and Golpeo were privy to the transaction
between Sy and the Jamilars and the Gilturas, as shown by
their collective act of filing a complaint for specific
performance to enforce the contract to sell.1avvphi1

Also noteworthy – and something that would have

ordinarily aroused suspicion – is the fact that even before
the supposed execution of the deed of sale by Scott in favor
of the Jamilars, the latter had already caused the
subdivision of the property into nine (9) lots, with the title
to the property still in the name of Capistrano.

Notable likewise is that the owner’s duplicate copy of TCT

No. 76496 in the name of Capistrano had always been in
his possession since he gave Scott only a photocopy thereof
pursuant to the latter’s authority to look for a buyer of the
property. On the other hand, the Jamilars were able to
acquire a new owner’s duplicate copy thereof by filing an
affidavit of loss and a petition for the issuance of another
owner’s duplicate copy of TCT No. 76496. The minimum
requirement of a good faith buyer is that the vendee of the
real property should at least see the owner’s duplicate copy
of the title.6 A person who deals with registered land
through someone who is not the registered owner is
expected to look beyond the certificate of title and examine
all the factual circumstances thereof in order to determine if
the vendor has the capacity to transfer any interest in the
land. He has the duty to ascertain the identity of the person
with whom he is dealing and the latter’s legal authority to
convey.7

Finally, there is the questionable cancellation of the

certificate of title of Capistrano which resulted in the
immediate issuance of a certificate of title in favor of the
Jamilar spouses despite the claim that Capistrano sold his
property to Scott and it was Scott who sold the same to the
Jamilars.

In light of the foregoing disquisitions, based on the

evidence on record, we find no error in the findings of the