Certificate of Title

Case No. 3
Tan vs. Bantegui, GR No. 154027, 24 October 2005

Facts:
The lot subject to the controversy is
registered in the name of Gorgonia Bantegui under
TCT No. 47163 said TCT was later reconstituted
under [TCT] No. 28458. Bantegui paid RPT (Real
Property Tax) until 1977 before she left for the
United States. She thereafter failed to pay the RPT
from 1978-1983. As a result, the City Treasurers
Office of Q.C. sold her property at a public auction.
The Capistranos was able to acquire the property
and was issued a Certificate of Sale of Delinquent
Property. The period of redemption prescribes
without Bantegui asserting her right. TCT NO.
361851 was issued in the name of Spouses
Capistrano.
Thereafter, series of transfer of said property
took place;
1. From the Capistranos to Pereyra;
2. Pereyra mortgage the land to the Rural
Bank of Imus, Cavite,
3. Pereyra sold said property to Spouses
Tan who paid Rural Bank of Imus for the
release of mortgage they likewise paid
for the delinquency of the Pereyras to
RPT.
Like the other predecessors the Tans did not take
possession of said property but they, informed the
Caedos of their ownership over the property and
demanded that the Caedos vacate the property,
subsequently filed an action for ejectment against
the Caedos.
Bantegui, on her part, applied for
administrative reconstitution of her title, as it was
lost in a fire. Reconstituted Title No. 28458 was
subsequently issued in her name. She likewise paid
the realty taxes on the subject property for the years
1987 to 1989. The [c]ity [t]reasurer of Quezon City,
however, refused to accept her payment for the year
1990.
In an amended complaint, Bantegui thru her
sister Guadalupe Bautista impleads the spouses
Capistrano and the Quezon City Treasurers Office
for Annulment of Sale, Reconveyance, Injunction
with damages.
The lower court rules in favor of the
respondent Bantegui.
When the case is appealed, the appellate
court affirmed the decision of the lower court and
declares that the petitioners were not purchasers in
good faith and had no better right to the subject
property than that of any of their predecessors-in-
interest for following reasons; First, the auction sale
was tainted with irregularities: no notices of
delinquency and of sale were sent to the
owner. Second, the owner continued to pay realty
taxes on the property, even after the date of the
sale. She would not have done so had she been
aware that it had already been auctioned off. Third,
the selling price was grossly inadequate and, when
viewed together with the other facts and
circumstances, would render the sale itself
void. Fourth, the purchasers failed to take
possession of the property, pay the real taxes, and
inform the lessees of the purchase. As a result, the
latter continued to pay rent to the owner.
Hence the petition.
ISSUE/S: Whether or not Bantegui has the better
right to the land in dispute.

RULING:
YES, Respondent Bantegui remained in
continuous possession of the owners duplicate copy
of the Certificate of Title. She was even allowed to
undertake an administrative reconstitution of her
file copy after its destruction by fire.
A certificate of title under the Torrens
system serves as evidence of an indefeasible title to
the property in favor of the person whose name
appears on it.
It is basic that registration does not vest title,
which is a mere evidence of title to a property.
The incontrovertible nature of a certificate of
title applies only when the issue involved is the
validity of the original and not of the
transfer. Subsequent titles issued to the prejudice of
the rightful owner will produce no legal effects
whatsoever. Quod nullum est, nullum producit
effectum. That which is a nullity produces no effect.
Disposition: the Petition is hereby DENIED, and the
assailed Decision and Resolution are AFFIRMED.

Case No. 5
De Pedro vs Romasan Development Corporation
FACTS: Spouses de pedro were the registered
owner of the land located at Rizal with 50k square
meters covered by the OCT No. T-691 issued by the
RD of Marikina on march 26,1992 and the spouses
continuously paying the real estate taxes of the said
property. Jan.1997, the respondents putting up
barbed-wire fence on the adjacent property. In the
course of construction, the farm house of the
petitioners was destroyed and the bamboos and
other trees were cut. The complaint alleged that the
farm house and the bamboos and other trees built
and planted therein were owned by the
respondents. The respondents also prevented and
refused to allow the petitioners to enter in the said
property. They also threatened that they will clear
the area by the use of a bulldozer. The complaint
also alleged that petitioners incurred damages
resulting from the wrongful acts of the respondents.
Respondents filed an answer alleging that they
owned the subject land evidenced by TCT NO.
236044. By fencing the property, respondents said
that it is an act of exercising their right of
ownership. The respondents maintained that
petitioners failed in establishing the metes and
bounds of the said property. The trial court issued
an order granting the joint motion to have a
relocation survey. It was found out that OCT
overlaps TCT of parcel H-162341 of the defendant
but finds the land is not the actual area being
claimed by the petitioner but another parcel namely
H-164008.
The overlapping of titles was brought about by the
double issuance of title for H-162341 but the
descriptions of OCT describing a land different from
the actual occupation of the plaintiff was a result of
the defective survey.
ISSUE: WON as claimed by the petitioners, the
subject property is a portion of the property covered
by OCT or as claimed by the respondents whether
the subject property is a portion of the property
covered by the TCT.
HELD: The resolution of the issue will involve the
alteration, correction or modification either of OCT
under the name of petitioners or TCT under the
name of respondents. If the subject property is
found to be a portion of the property covered by
OCT but is included in the technical description of
property covered by TCT, the latter would have to
be corrected. If the subject property is found to be a
portion of the property covered by TCT but is
included in the property covered by OCT, then the
latter title must be rectified. But it may be made only
via an action or direct proceeding.
It has been held that section 48: a certificate of title,
once registered, should not thereafter be impugned,
altered, changed, modified, enlarged or diminished
except in a direct proceeding permitted by law. Both
actions made by petitioners and respondents are not
a direct attack but constitutes a collateral attack.
Certificate of title are indefeasible, unassailable and
binding against the whole world including the
government, they do not create or vest title. They
merely confirm or record title already existing and
vested. They cannot be used to protect the usurper
from the true owner. Certificate is not conclusive
evidence of title.

CASE No. 6
REALTY SALES ENTERPRISE, INC. vs.
INTERMEDIATE APPELLATE COURT
154 SCRA 328, G.R. No. L-67451
28 September 1987


Facts

1) TCT No. 20408 issued on May 29, 1975 in the
name of Realty Sales Enterprise, Inc., which was
derived from OCT No. 1609, issued on May 21, 1958,
pursuant to Decree No. N-63394 in LRC Cases Nos.
657, 758 and 976, GLRO Record Nos. N-29882, N-
33721 and N-43516, respectively.

2) TCT No. 303961 issued on October 13, 1970 in the
name of Morris G. Carpo, which was derived from
OCT No. 8629, issued on October 13, 1970 pursuant
to decree No. N-131349 in LRC Case No. N-11-M
(N-6217), GLRO Record No. N-32166.

3) TCTs Nos. 333982 and 333985, issued on July 27,
1971 in the name of Quezon City Development and
Financing Corporation, derived from OCT No. 8931
which was issued on July 27, 1971 pursuant to LRC
Case No. P-206 GLRO Record No. N-31777.

Morris Carpo filed a complaint with the Court of
First Instance, presided over by Judge Rizalina
Bonifacio Vera (Vera Court), for "declaration of
nullity of Decree No. N-63394 and TCT No. 20408."
Named defendants were Realty Sales Enterprise,
Inc., Macondray Farms, Inc. and the Commissioner
of Land Registration. Carpo withdrew his complaint
as against the last named defendant, and the answer
filed on behalf of said government official was
ordered stricken off the record. The complaint
alleged that TCT No. 20408 as well as OCT No. 1609
from which it was derived, is a nullity as the CFI,
then presided over by Judge Andres Reyes (Reyes
Court) which issued the order directing the issuance
of a decree of registration, was not sitting as a land
registration court, but as a court of ordinary
jurisdiction. It was further alleged that the original
records of LRC Case No. 657, GLRO Record No.
29882 which was the basis for the issuance of said
order, were lost and/or destroyed during World
War II and were still pending reconstitution; hence,
the Reyes Court had no authority to order the
issuance of a certificate of title.

Realty and Macondray alleged in their answer that
the Reyes Court was acting as a court of land
registration and in issuing the order of May 21, 1958,
was actually performing a purely ministerial duty
for the registration court and which on August 19,
1935 had rendered a decision adjudicating the two
(2) lots in question to Estanislao Mayuga,
predecessor-in-interest of Realty and Macondray,
which decision was upheld by the Court of Appeals.
It was alleged that it is the title of Carpo which is
null and void, having been issued over a parcel of
land previously registered under the Torrens
System in favor of another.

Realty and Macondray filed a third-party complaint
against the Quezon City Development and
Financing Corporation (QCDFC) and the
Commissioner of Land Registration alleging that
TCTs Nos. 333982 and 333985 in the name of
QCDFC also covered the same parcels of land
subject of the dispute between Carpo and the two
corporations, Realty and Macondray and thus they
prayed that the same be declared null and void.

In its answer to the third-party complaint, QCDFC
asserted the validity of its own title alleging that it is
the title in the name of Realty which is null and
void. QCDFC also filed a fourth-party complaint
against Carmelino Alvendia, Esperanza Alvendia,
Felicisimo Alvendia, Josefina Alvendia, Jacinto G.
Miranda, Rosa G. Miranda, Isabel G. Miranda, and
Feliciano G. Miranda, alleging that it bought said
parcels of land from them. It prayed that in the
event of an unfavorable judgment against it, fourth-
party defendants be ordered to reimburse the
purchase price which the corporation paid to them.
However, QCDFC failed to prosecute its case, and
the fourth-party complaint was dismissed for lack of
interest.

The Vera Court rendered judgment, sustaining the
title of Morris G. Carpo to the two (2) lots in
question and declaring the titles of Realty Sales
Enterprise, Inc. and QCDFC null and void.

Realty filed a Petition for certiorari with this Court
questioning the decision of the lower court. It also
asked that it be allowed to appear directly to this
Court as it was raising only questions of law. After
respondents filed their comments to said petition,
this Court passed a resolution referring the case to
the Court of Appeals "in aid of its appellate
jurisdiction for proper determination on the merits
of the appeal."

The Court of Appeals set aside the decision of the
trial court and rendered a new one upholding the
validity of the title in the name of Realty Sales
Enterprise, Inc. and declaring null and void the titles
in the name of Carpo and QCDFC.

Carpo filed a motion for reconsideration with the
appellate court. In the meantime, the Court of
Appeals was reorganized into the Intermediate
Appellate Court (IAC). As a consequence, there was
a re-raffling of cases and the case was assigned to
the Second Special Cases Division which, however,
returned the records of the case for another re-
raffling to the Civil Cases Divisions as it deemed
itself without authority to act on a civil case in view
of the allocation of cases to the different divisions of
the IAC under Section 8 of BP 129. The case was
then assigned to the Third Civil Cases Division,
composed of Justices de la Fuente, Coquia, Zosa and
Bartolome.

The IAC promulgated its Resolution granting
Carpo's motion for reconsideration, reversing and
setting aside the decision of the Court of Appeals,
and affirming the decision of the trial court.

Hence, this petition.


Issue

Whether or not Morris G. Carpo is a purchaser in
good faith and for value when there is absolutely no
evidence, whether written or testimonial, that was
presented by Carpo, or by anyone else that he was,
in fact, a purchaser for value and in good faith a
material matter which was neither alleged nor
referred to in the complaint and in all the pleadings,
nor covered by any of the exhibits presented by all
of the parties herein and solely on the bases of
which the case at bar was submitted by the parties
for consideration and decision.


Held/Ruling

Where two or more certificates cover the same
land, the earlier in date prevails

Whether or not Carpo is an innocent purchaser for
value was never raised as an issue in the trial court.
A perusal of the records of the case reveals that no
factual basis exists to support such a conclusion.
Even Carpo himself cites no factual proof of his
being an innocent purchaser for value. He merely
relies on the presumption of good faith under
Article 527 of the Civil Code.

It is settled that one is considered an innocent
purchaser for value only if, relying on the certificate
of title, he bought the property from the registered
owner, "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 claim or
interest of some other persons in the property." He
is not required to explore farther than what the
Torrens title upon its face indicates.

Carpo bought the disputed property from the
Baltazars, the original registered owners, by virtue
of a deed executed before Iluminada Figueroa,
Notary Public of Manila dated October 9, 1970.
However, it was only later, on October 13, 1970, that
the decree of registration in favor of the Baltazars
was transcribed in the Registration Book and that an
Original Certificate of Title was issued. It was on the
same day, October 13, 1970, that the deed
evidencing the sale between the Baltazars and
Carpo was inscribed in the Registry of Property, and
the Original Certificate of Title was cancelled as
Transfer Certificate of Title No. 303961 in the name
of Carpo was issued.

Thus, at the time of sale there was as yet no Torrens
title which Carpo could have relied upon so that he
may qualify as an innocent purchaser for value. Not
being a purchaser for value and in good faith, he is
in no better position than his predecessors-in-
interest.

The Baltazars, predecessors-in-interest of Carpo are
heirs of Florentino Baltazar, an oppositor in the
original application filed by Estanislao Mayuga in
1927. As stated earlier, the CFI-Rizal confirmed the
title of Estanislao. As such successors of Florentino,
they could not pretend ignorance of the land
registration proceedings over the disputed parcels
of land earlier initiated by Eduardo Guico,
Florentino Baltazar and Estanislao Mayuga, as when
as the decisions rendered therein.

Moreover, it is not disputed that the title in the
name of Dominador Mayuga, from whom Realty
derived its title, was issued in 1958, or twelve years
before the issuance of the title in the name of the
Baltazars in 1970.

In this jurisdiction, it is settled that "(t)he general
rule is that in the case of two certificates of title,
purporting to include the same land, the earlier in
date prevails . . . . In successive registrations, where
more than one certificate is issued in respect of a
particular estate or interest in land, the person
claiming under the prior certificate is entitled to the
estate or interest; and that person is deemed to hold
under the prior certificate who is the holder of, or
whose claim is derived directly or indirectly from
the person who was the holder of the earliest
certificate issued in respect thereof . . . ."

TCT No. 20408 (issued in the name of Realty Sales
Enterprise, Inc.) derived from OCT 1609, is therefore
superior to TCT No. 303961 (issued in the name of
Morris G. Carpo) derived from OCT 8629.

QCDFC derived its title from Carmelino Alvendia
et. al., the original registered owners. Original
Certificate of Title No. 8931 in the name of Spouses
Carmelino Alvendia, et. al. was issued on July 27,
1971, or thirteen (13) years after the issuance of
Mayuga's title in 1958.

Since Realty is claiming under TCT No. 1609 which
was issued earlier than OCT No. 8931 from which
QCDFC's title was derived, Realty's title must
prevail over that of QCDFC.

Case No. 8
G.R. No. L-43972 July 24, 1990
PHILIPPINE NATIONAL BANK vs. HON.
COURT OF APPEALS (Fifth Division) & CHU
KIM KIT represented by CHU TONG U
FACTS:
On September 6, 1968, Chu Kim Kit, represented by
his uncle, Chu Tong U,filed in the Court of First
Instance of Leyte against Felisa Boyano an action for
cancellation of the latter's Certificate of Title No. T-
1439. The complaint alleged that Chu Kim Kit, a
Chinese national and son of defendant Boyano, is
the absolute owner of a commercial lot and building
on Rizal Avenue, Tacloban City, registered in his
name under TCT No. T-1412 of the Registry of
Deeds of Tacloban City; that in 1945, Chu Kim Kit
went to mainland China; that he was prevented
from returning to the Philippines when the
Communists took over mainland China; that
through letters, he requested Chu Tong U to take
care of his aforementioned property; that although
defendant Boyano was aware that her son was still
alive, she executed an affidavit on May 21, 1963,
alleging that he had died and adjudicating to
herself, as his sole heir, the above-described
property; that by means of said affidavit of
adjudication, she was able to obtain Transfer
Certificate of Title No. T-1439 in her name; that she
thereafter mortgaged the property to the Philippine
National Bank, Tacloban Branch, to secure a loan of
P25,000; and that she is about to dispose of the
property.
On October 11, 1968, the defendant filed her answer,
admitting that Chu Kim Kit was still alive but she
alleged that she signed the affidavit of adjudication
without having read its contents, the same being
written in English which she does not understand.
As affirmative defense, she alleged that plaintiff
Chu Tong U is not the real party in interest, being
only an uncle of Chu Kim Kit and co-heir to his
estate.
Lucy Perez and the Philippine National Bank, as
mortgagees, were allowed by the trial court to
intervene in the action.
ISSUE:
Whether or not the cancellation of TCT No. T-1412 is
authorized and legal.
RULING:
The records show that Chu Kim Kit entrusted his
Transfer Certificate of Title No. T-1412 to his
mother, Felisa Boyano, before he left for mainland
China and allowed his mother to administer the
property, and to enjoy its fruits in his absence. Those
acts of his enabled Felisa Boyano to cause the
cancellation of TCT No. T-1412 and to obtain TCT
No. T-1439 in her name. That Felisa Boyano was
administering his property may also have created
the impression in the mind of third persons that she
was the owner of the property and could dispose of
it. It is plain to see that by his own acts of confidence
in Felisa Boyano, the private respondent was partly
to blame for the commission of the fraud against
himself by his mother. As between him and the
petitioner which was totally innocent and free from
negligence or wrongdoing in the transaction, the
latter is entitled to the protection of the law.
There is no question that the petitioner PNB is a
mortgagee in good faith and for value. At the time
the mortgage was constituted on the property on
October 30, 1963, it was covered by TCT No. T-1439
in the name of Felisa Boyano.The title carried no
annotation, defect or flaw that would have aroused
suspicion as to its authenticity. "The certificate of
title was in the name of the mortgagor when the
land was mortgaged to the PNB. Such being the
case, petitioner PNB had the night to rely on what
appeared on the certificate of title, and in the
absence of anything to excite suspicion, it was under
no obligation to look beyond the certificate and
investigate the title of the mortgagor appearing on
the face of the certificate."
The real estate mortgages in favor of the Philippine
National Bank and Lucy Perez are declared valid,
legal and enforceable, without prejudice to the right
of the property owner, Chu Kim Kit to exercise the
mortgagor's right of redemption and to claim
reimbursement with damages from the mortgagor,
Felisa Boyano.



Case No. 9
Republic v Mendoza
Facts :
The Pangasinan Primary School has been using a
land situated in lipa city since 1957 for its school.
But some portions of that property were registered
in the name of the respondents under TCT. the
Register of Deeds partially cancelled TCT T-11410
and issued new titles for Lots 1 and 3 in favor of
Dimayuga and Ronquillo, respectively. Lot 2
remained in the name of the Mendozas but no new
title was issued in the name of the City Government
of Lipa for Lot 4. Meantime, PPS remained in
possession of the property.
The Republic claimed that, while no title was issued
in the name of the City Government of Lipa,
the Mendozas had relinquished to it their right over
the school lot as evidenced by the consolidation and
subdivision plan. Further, the property had long
been tax-declared in the name of the City
Government and PPS built significant, permanent
improvements on the same. These improvements
had also been tax-declared.
The Mendozas claim, on the other hand, that
although PPS sought permission from them to use
the property as a school site, they never
relinquished their right to it. They allowed PPS to
occupy the property since they had no need for it at
that time. Thus, it has remained registered in their
name under the original title, TCT T-11410, which
had only been partially cancelled.
On November 6, 1998 the Mendozas wrote PPS,
demanding that it vacate the disputed property.
When PPS declined to do so, on January 12, 1999 the
Mendozas filed a complaint with the Municipal
Trial Court in Cities (MTCC) of Lipa City, against
PPS for unlawful detainer with application for
temporary restraining order and writ of preliminary
injunction.
The MTCC rendered a decision, dismissing the
complaint on ground of the Republics immunity
from suit. The Mendozas appealed to the Regional
Trial Court (RTC) of Lipa City which ruled that the
Republics consent was not necessary since the
action before the MTCC was not against it.
The RTC remanded the case back to the MTCC,
which then dismissed the case for insufficiency of
evidence. Then mendozas appealed again to the
RTC.
the CA affirmed the RTC decision. Upholding the
Torrens system, it emphasized the indefeasibility of
the Mendozas registered title and the
imprescriptible nature of their right to eject any
person occupying the property. The CA held that,
this being the case, the Republics possession of the
property through PPS should be deemed merely a
tolerated one that could not ripen into ownership.

The CA also rejected the Republics claim of
ownership since it presented no documentary
evidence to prove the transfer of the property in
favor of the government. Moreover, even assuming
that the Mendozas relinquished their right to the
property in 1957 in the governments favor, the
latter never took steps to have the title to the
property issued in its name or have its right as
owner annotated on the Mendozas title. The CA
held that, by its omissions, the Republic may be held
in estoppel to claim that the Mendozas were barred
by laches from bringing its action.
Issue:
Whether or not the CA erred in holding that
the Mendozas were entitled to evict the Republic
from the subject property that it had used for a
public school.
Ruling:
A decree of registration is conclusive upon all
persons, including the Government of the Republic
and all its branches, whether or not mentioned by
name in the application for registration or its notice.
Indeed, title to the land, once registered, is
imprescriptible. No one may acquire it from the
registered owner by adverse, open, and notorious
possession. Thus, to a registered owner under the
Torrens system, the right to recover possession of
the registered property is equally imprescriptible
since possession is a mere consequence of
ownership.
Here, the existence and genuineness of
the Mendozas title over the property has not been
disputed. While the consolidation and subdivision
plan of Lots 1923 and 1925 shows that a 1,149 square
meter lot had been designated to the City
Government, the Republic itself admits that no new
title was issued to it or to any of its subdivisions for
the portion that PPS had been occupying since 1957.
The CA erred, however, in ordering the eviction of
PPS from the property that it had held as
government school site for more than 50 years. The
evidence on record shows that the Mendozas
intended to cede the property to the City
Government of Lipa permanently. In fact, they
allowed the city to declare the property in its name
for tax purposes. And when they sought in 1962 to
have the bigger lot subdivided into four, the
Mendozas earmarked Lot 4, containing 1,149 square
meters, for the City Government of Lipa. Under the
circumstances, it may be assumed that the
Mendozas agreed to transfer ownership of the land
to the government, whether to the City Government
of Lipa or to the Republic, way back but never got
around to do so and the Republic itself altogether
forgot about it. Consequently, the Republic should
be deemed entitled to possession pending the
Mendozas formal transfer of ownership to it upon
payment of just compensation.

[G.R. No. 108547. February 3, 1997]

CABRERA VS CA

FACTS:
In 1950, a parcel of unregistered land which was
owned in common by Daniel, Albertana
andFelicidad Teokemian, having inherited the same
from their late father, Domingo Teokemian, was
soldto Andres Orais wherein Felicidad was not able
to sign in the Deed of Sale.In 1957, Virgilia Orais,
daughter of the vendee issued Free Patent and
Original Certificate of Title over the said property.In
1972, the one-third share of Felicidad Teokemian in
her possession was sold to espouses Elanoand
Felicidad Cabrera who immediately took possession
of it.In 1988, Virgilia Orais filed a civil case for
quieting of title against Felicidad Teokemian and
FelicidadCabrera.On April 27, 1989, the lower court
rendered judgment in favor of defendants against
the plaintiff, rulingthat the latter can no longer
recover the portion of land occupied by the former
due to laches.The Court of Appeals reversed such
findings upon appeal
on the justification that the defendants
action for reconveyance based on an implied trust
had already been barred by prescription and thatthe
action of the plaintiffs is not barred by laches
because what was sold to the Cabreras was adefinite
portion of the community property.

ISSUE:

Whether or not the action of the plaintiffs is barred
by laches.

HELD: YES.
The argument that laches does not apply because
what was sold to the Cabreras was a definiteportion
of the community property, and, therefore, void, is
untenable.Under Article 493 of the Civil Code:
Each co-owner shall have the full ownership of his
part and of the fruits and benefits pertainingthereto,
and even he may therefore alienate, assign or
mortgage it, and even substitute another person
inits enjoyment, except when personal rights are
involved. But the effect of the alienation or the
mortgage,with respect to the co-owners, shall be
limited to the portion which may be allotted to him
in the divisionupon the termination of the co-
ownership.

Undisputed is the fact that since the sale of the two-
third portion of the subject property to theplaintiff,
the latter had allowed Felicidad Teokemian to
occupy that one-third portion allotted toher. There
has, therefore, been a partial partition, where the
transferees of an undivided portion of the land
allowed a co-owner of the property to occupy a
definite portion thereof and has not disturbedthe
same, for a period too long to be ignored--the
possessor is in a better condition or right.

SARMIENTO VS. CA, GR NO. 152627, 16
SEPTEMBER 2005

Facts:
On 1972, the subject land was mortgaged by the
Sarmiento spouses to Carlos Moran Sison as a
security loan obtained by the Sarmiento spouses
from Mr. Sison. Upon failure of the Sarmiento
spouses to pay the loan, Mr. Sison initiated the
extra-judicial foreclosure sale of the mortgaged
property, the said property was foreclosed through
the Office of the Sheriff of Rizal, which accordingly,
issued a certificate of sale in favor of Mr. Sison, and
which Mr. Sison caused to be annotated on the title
of Sarmiento spouses. Mr. Puzon purchased the
same property in an auction sale and he was issued
a certificate of sale and caused it to be registered in
the Registry of Deeds of Marikina. No redemption
having been made by the Sarmiento spouses, a final
bill of sale was issued in his (Mr. Puzon) favor.
Thereafter, Mr. Puzon filed a petition for
consolidation of ownership and issuance of new title
over the subject property before the Regional Trial
Court of Pasig. Mr. Puzon sold the property in
question to herein plaintiff-appellee. By virtue of
such sale, a transfer certificate of title over the
subject property was issued in favor of the plaintiff-
appellee. Records show that Mr. Puzon assured the
plaintiff-appellee that he (Jose Puzon) will take care
of the squatters in the subject property by filing an
ejectment case against them. However, Mr. Puzon
failed to comply with his promise. Plaintiff-appellee
filed a complaint for recovery of possession with
damages against the Sarmiento spouses and Pedro
Ogsiner, the Sarmiento spouses caretaker of the
subject property who refused to vacate the premises.
In its complaint, plaintiff-appellee alleged that the
Sarmiento spouses lost all the rights over the
property in question when a certificate of sale was
executed in favor of Mr. Sison for their failure to pay
the mortgage loan. Sarmiento spouses filed a motion
for leave to file a third-party complaint against Mr.
Sison

Issue:
WON the third-party complaint of the Sarmiento
spouse amounted to collateral attack. Or Whether or
not the Transfer Certificate of Title No. N-119631
can be collaterally attacked in an action for recovery
of possession.

Held:
A collateral attack is made when, in another action
to obtain a different relief, an attack on the judgment
is made as an incident in said action. This is proper
only when the judgment on its face is null and void,
as where it is patent that the court, which rendered
said judgment has no jurisdiction. On the other
hand, a direct attack against a judgment is made
through an action or proceeding the main object of
which is to annul, set aside, or enjoin the
enforcement of such judgment, if not carried into
effect, or if the property has been disposed of, the
aggrieved party may sue for recovery.
In the present case, to rule for the nullity of the
auction sale in favor of Mr. Puzon will result in
ruling for the nullity of the order of RTC, granting
the petition for consolidation of ownership over the
subject property filed by Mr. Puzon. It will also
result in the nullity of title issued in the name of Mr.
Puzon. Hence, the end objective in raising the
aforementioned arguments is to nullify the title in
the name of the plaintiff-appellee. In fact, a reading
of the answer of the Sarmiento spouses and the
Heirs of Mr. Sison reveals that they are asking the
court to nullify all documents and proceedings
which led to the issuance of title in favor of the
plaintiff-appellee. This is obviously a collateral
attack which is not allowed under the principle of
indefeasibility of torrens title. The issue of validity
of plaintiff-appellees title can only be raised in an
action expressly instituted for that purpose.
A certificate of title shall not be subject to collateral
attack. It cannot be altered, modified, or canceled
except in a direct proceeding in accordance with
law. Case law on the matter shows that the said
doctrine applies not only with respect to the original
certificate of title but also to transfer certificate of
title. Hence, whether or not the plaintiff-appellee
has a right to claim ownership over the subject
property is beyond the province of the present
action. It does not matter whether the plaintiff-
appellees title is questionable because this is only a
suit for recovery of possession. It should be raised in
a proper action for annulment of questioned
documents and proceedings, considering that it will
not be procedurally unsound for the affected parties
to seek for such remedy. In an action to recover
possession of real property, attacking a transfer
certificate of title covering the subject property is an
improper procedure. The rule is well-settled that a
torrens title as a rule, is irrevocable and indefeasible,
and the duty of the court is to see to it that this title
is maintained and respected unless challenged in a
direct proceeding.
An action is deemed an attack on a title when the
object of the action or proceeding is to nullify the
title, and thus challenge the judgment pursuant to
which the title was decreed.
7
The attack is direct
when the object of the action is to annul or set aside
such judgment, or enjoin its enforcement.
8
On the
other hand, the attack is indirect or collateral when,
in an action to obtain a different relief, an attack on
the judgment is nevertheless made as an incident
thereof.
9

The rule on third-party complaints is found in
Section 22, Rule 6 of the 1997 Rules of Court, which
reads: Sec. 22. Third, (fourth, etc.)party complaint. A
third (fourth, etc.)-party complaint is a claim that a
defending party may, with leave of court, file
against a person not a party to the action, called the
third-party defendant, for contribution, indemnity,
subrogation or any other relief, in respect of his
opponents claim.
Prescinding from the foregoing, the appellate court
grievously erred in failing to appreciate the legal
ramifications of the third-party complaint vis--
vis the original complaint for recovery of possession
of property. The third-party complaint for
cancellation of TCT being in the nature of an
original complaint for cancellation of TCT, it
therefore constitutes a direct attack of such TCT.
The situation at bar can be likened to a case for
recovery of possession wherein the defendant files a
counterclaim against the plaintiff attacking the
validity of the latters title. Like a third-party
complaint, a counterclaim is considered an original
complaint, as such, the attack on the title in a case
originally for recovery of possession cannot be
considered as a collateral attack.
There being a direct attack on the TCT which was
unfortunately ignored by the appellate court, it
behooves this Court to deal with and to dispose of
the said issue more so because all the facts and
evidence necessary for a complete determination of
the controversy are already before us.
CASE: SALANDANAN vs. MENDEZ

FACTS: Respondents alleged that they are the
owners of the subject property as evidenced by TCT
No. 246767 of the Registry of Deeds of Manila and
that they became the owners thereof by virtue of a
deed of donation. Respondents also alleged that
Spouses Fernandez and their families were
occupying the subject property for free through the
generosity of respondent Isabels father; that a letter
of demand to vacate the subject property was sent to
Spouses Fernandez but they refused to vacate the
same.
On the other hand, Spouses Fernandez contend that
Spouses Salandanan are the registered owners of the
property and that respondents were able to transfer
the property to their name through fraud and that
the said deed of donation was simulated and
fictitious.
Respondents filed a complaint for ejectment
agaianst Spouses Fernandez. On the other hand,
petitioner Salandanan filed motion for clarification
and intervention.
ISSUE: Whether or not there is collateral attack on
the certificate of title.
HELD: Actions for ejectment are designed
to summarily restore physical possession to one
who has been illegally deprived of such possession.
It is primarily a quieting process intended to
provide an expeditious manner for protecting
possession or right to possession without
involvement of the title. Petitioners intervention in
the ejectment case would not result in a complete
adjudication of her rights. The issue raised by
petitioner is mainly that of ownership, claiming that
the property in dispute was registered and titled in
the name of respondents through the use of fraud.
Such issue cannot even be properly threshed out in
an action for ejectment.
Hence, a just and complete determination of
petitioner's rights could actually be had in the action
for annulment, revocation and reconveyance of title
that she had previously filed, not in the instant
action for ejectment.
In Malison, the Court emphasized that when
property is registered under the Torrens system,
the registered owner's title to the property is
presumed legal and cannot be collaterally
attacked, especially in a mere action for unlawful
detainer. In this particular action where petitioner's
alleged ownership cannot be established, coupled
with the presumption that respondents' title to the
property is legal, then the lower courts are correct in
ruling that respondents are the ones entitled to
possession of the subject premises.

Leyson vs Bontuyan
GR No. 156357
Feb 18, 2005

Facts:
Calixto Gabud was the owner of a parcel of
land located in Brgy. Adlawon, Mabolo City. The
said property was divided into two parcels of land
because of a construction of a provincial road. He
later on executed a Deed of Absolute Sale in favor of
spouses Protacio Tabal and Vivencia Bontuyan, the
spouses then sold the two lots to Lourdes V. Leyson
as evidenced by a Deed of Absolute Sale.

Despite the knowledge of Gregorio
Bontuyan that said property has been sold to his
son-in-law and daughter, spouses Noval, he filed an
application with the Bureau of Lands over Lot no
17,150 alleging that the property was public land
and was neither claimed nor occupied by any
person and that he first entered upon and began
cultivating the same in his favor. Thus, he has
obtained a Free Patent on the said lot and another
parcel of land, lot no 13,272, was also registered
under his name.

Meanwhile, Gregorio again executed a Deed
of Absolute Sale over the two lots in favor of
Naciansino Bontuyan. He then executed a Real
Estate Mortgage over lot no 17,150 in favor of
Development Bank of the Philippines (DBP) as a
security for a loan. Shortly thereafter, Naciansino
and spouse has left the Philippines and resided in
the US.

When the spouses arrived in the Philippines
to redeem their property from DBP, they later on
discovered that it was tenanted by Engr. Leyson, on
of the late Lourdes Leysons children.

Issue:
Whether or not Gregorio Bontuyan acted in
bad faith when he applied for free patent for the
same parcels of land.

Ruling:
Yes, record show that at the time when
Gregorio applied for free patent, he was living with
his daughter, Vivencia. Thus, Gregorio must have
known that at the time when he applied, the subject
lots were already sold by his daughter.
Furthermore, records also show that he sold twice
the lot no 17,150 to plaintiff appellants. The first was
in 1976 and the other was in 1980. Plaintiff-
appellants offered no reasonable explanation why
Gregorio have to sell it twice. These are badges of
bad faith which affect the validity of the title of
Gregorio over the subject lots.

Considering that Lourdes Leyson was in
actual possession of the property, the respondents
cannot claim that they were in good faith when
Gregorio allegedly sold the property to them.
JUAN C. CARVAJAL, petitioner, vs. COURT OF
APPEALS and SOLID HOMES, INC., respondents.
FACTS:
The facts found by public respondent are as
follows:
[5]

Petitioner is the applicant in a land registration
case filed with Branch 71, Regional Trial Court of
the Fourth Judicial Region stationed in Antipolo,
Rizal Copies of the application were ordered by
respondent Court to be furnished (to) the National
Land Titles and Deeds Registration Administration
(NLTDRA) which on March 18, 1987 submitted a
report recommending that applicant be ordered to
amend his petition by including the names and
complete postal addresses of the adjoining owners
and correcting the discrepancy regarding the
boundary lot number the petition was accordingly
amended.
After the NLTDRA was notified the case was set for
hearing on December 7, 1987, the Acting Chief,
Docket Division of the NLRDRA submitted another
report recommending that petitioner be ordered to
refer to the Bureau of Lands for corrections of the
discrepancy existing in the directional bearing and
area of the said lots. The technical descriptions as
corrected by the Bureau of Lands was submitted
and the application was initially set for hearing on
April 26, 1988.
On June 1, 1988, an order of general default was
issued by respondent Court. Exempted from the
order was one Annie Jimenez who filed an
opposition to the application. On June 22, 1988,
private respondent Solid Homes, Inc. filed its
opposition stating that a land registered in its name
under the Torrens System and covered by then TCT
No. N-7873 is almost identical to the property
subject of the application by petitioner. The
opposition was not admitted considering that no
motion to set aside the order of general default was
filed by private respondent.
On June 28, 1988, private respondent filed a motion
to lift the order of general default and to admit its
opposition on the ground that its right would be
adversely affected by the application. In the same
order dated July 1, 1988, respondent Court set aside
the order of general default in so far as private
respondent was concerned and admitted private
respondents opposition.
On January 10, 1989, petitioner filed a motion
praying that the opposition of private respondent be
dismissed for the reason that the order issued by
respondent court directing the NLRTDA [sic] to
make a plotting of the land in question on the basis
of the title submitted by the Registry of Deeds of
Marikina Branch Manila released the private
respondent from the duty and obligation of
presenting evidence to prove that the land applied
for is private and that there is apparent lack of
interest on the part of private respondent to pursue
its claim on account of its non-appearance despite
the lapse of more than six months or to introduce
evidence that will show that the land in question is
covered by the alleged torrens certificate of title.
During the hearings petitioner presented his
evidence on the question as to whether or not he
had a registrable right over the land in question.
Pursuant to the court order dated July 1, 1988
directing the NLTDRA to make the plotting of the
relative position of the property, the Land
Registration Authority submitted a report dated
December 22, 1986 [should be 1988] recommending
that, after due hearing, the application for
registration of petitioner be dismissed. The
application was thus dismissed. Petitioner filed his
motion to reconsider. The motion for
reconsideration was denied in an order dated March
4, 1989.
On May 2, 1989 petitioner filed a second motion to
reconsider the dismissal of his petition.
After the Land Registration Authority submitted a
report showing that there was indeed an
overlapping of the four (4) parcels of land applied
for by petitioner and the properties of Solid Homes
under TCT 7873 and considering that the properties
applied for are [sic] within the titled property and
could not be the subject of an application for
registration, the second motion to reconsider the
dismissal of the application for registration was
denied.
The Court of Appeals affirmed the dismissal of the
application for registration
ISSUE:
1. Whether or not an actual ground verification
survey is required to establish the identity of the
two parcels of land.
HELD:
At the outset, we stress that there was nothing
irregular in the order given by the trial court to the
Land Registration Authority and the Survey
Division of the DENR to submit reports on the
location of the land covered by petitioners
application and private respondents certificate of
title. The authority of the land registration court to
require the filing of additional papers to aid it in its
determination of the propriety of the application
was based on Section 21 of PD 1529:
SEC. 21. Requirement of additional facts and
papers; ocular inspection. -- The court may require
facts to be stated in the application in addition to
those prescribed by this Decree not inconsistent
therewith and may require the filing of any
additional papers. It may also conduct an ocular
inspection, if necessary.
Based on the reports submitted, the land registration
court correctly dismissed the application for original
land registration. An application for registration of
an already titled land constitutes a collateral attack
on the existing title
Contrary to petitioners contention, the approval by
the assistant chief of the Bureau of Lands Survey
Division of the survey conducted on the land
applied for by petitioner did not prove that the said
land was not covered by any title. It merely showed
that such land has been surveyed and its boundaries
have been determined.
Petitioner also argues that the plotting made by
NLTDRA was anomalous because Survey Plan
FP-1540, on which private respondents title was
based, could not be located. This argument lacks
merit. The law does not require resorting to a
survey plan to prove the true boundaries of a land
covered by a valid certificate of title; the title itself
is the conclusive proof of the realtys metes and
bounds. Section 47 of the Land Registration Act,
or Act No. 496, provides that (t)he original
certificates in the registration book, any copy
thereof duly certified under the signature of the
clerk, or of the register of deeds of the province or
city where the land is situated, and the seal of the
court, and also the owners duplicate certificate,
shall be received as evidence in all the courts of
the Philippine Islands and shall be conclusive
as to all matters contained therein except so far as
otherwise provided in this Act. It has been held
that a certificate of title is conclusive evidence
with respect to the ownership of the land
described therein and other matters which can be
litigated and decided in land registration
proceedings.
a survey is not necessary. A certificate of title is
conclusive evidence not only of ownership of the
land referred but also its location.