CARMEN DEL PRADO, petitioner, vs. SPOUSES ANTONIO L. CABALLERO and LEONARDA CABALLERO, respondents. DECISION NACHURA, J p: This is a petition for review on certiorari of the decision 1 of the Court of Appeals (CA) dated September 26, 2000 and its resolution denying the motion for reconsideration thereof. The facts are as follows: In a judgment rendered on February 1, 1985 in Cadastral Case No. N-6 (LRC Rec. No. N-611), Judge Juan Y. Reyes of the Regional Trial Court (RTC) of Cebu City, Branch 14, adjudicated in favor of Spouses Antonio L. Caballero and Leonarda B. Caballero several parcels of land situated in Guba, Cebu City, one of which was Cadastral Lot No. 11909, the subject of this controversy. 2 On May 21, 1987, Antonio Caballero moved for the issuance of the final decree of registration for their lots.3 Consequently, on May 25, 1987, the same court, through then Presiding Judge Renato C. Dacudao, ordered the National Land Titles and Deeds Registration Administration to issue the decree of registration and the corresponding titles of the lots in favor of the Caballeros. 4 On June 11, 1990, respondents sold to petitioner, Carmen del Prado, Lot No. 11909 on the basis of the tax declaration covering the property. The pertinent portion of the deed of sale reads as follows: That we, Spouses ANTONIO L. CABALLERO and LEONARDA B. CABALLERO, Filipinos, both of legal age and residents of Talamban, Cebu City, Philippines, for and in consideration of the sum of FORTY THOUSAND PESOS (P40,000.00), Philippine Currency, paid by CARMEN DEL PRADO, Filipino, of legal age, single and a resident of Sikatuna St., Cebu City, Philippines, the receipt of which is full is hereby acknowledged, do by these presents SELL, CEDE, TRANSFER, ASSIGN & CONVEY unto the said CARMEN DEL PRADO, her heirs, assigns and/or successors-in-interest, one (1) unregistered parcel of land, situated at Guba, Cebu City, Philippines, and more particularly described and bounded, as follows: DTIaHE "A parcel of land known as Cad. Lot No. 11909, bounded as follows: North : Lot 11903 East : Lot 11908 West : Lot 11910 South : Lot 11858 & 11912 containing an area of 4,000 square meters, more or less, covered by Tax Dec. No. 00787 of the Cebu City Assessor's Office, Cebu City." of which parcel of land we are the absolute and lawful owners. Original Certificate of Title (OCT) No. 1305, covering Lot No. 11909, was issued only on November 15, 1990, and entered in the "Registration Book" of the City of Cebu on December 19, 1990. 5 Therein, the technical description of Lot No. 11909 states that said lot measures about 14,457 square meters, more or less. 6 On March 20, 1991, petitioner filed in the same cadastral proceedings a "Petition for Registration of Document Under Presidential Decree (P.D.) 1529" 7 in order that a certificate of title be issued in her name, covering the whole Lot No. 11909. In the petition, petitioner alleged that the tenor of the instrument of sale indicated that the sale was for a lump sum or cuerpo cierto, in which case, the vendor was bound to deliver all that was included within said boundaries even when it exceeded the area specified in the contract. Respondents opposed, on the main ground that only 4,000 sq m of Lot No. 11909 was sold to petitioner. They claimed that the sale was not for a cuerpo cierto. They moved for the outright dismissal of the petition on grounds of prescription and lack of jurisdiction. After trial on the merits, the court found that petitioner had established a clear and positive right to Lot No. 11909. The intended sale between the parties was for a lump sum, since there was no evidence presented that the property was sold for a price per unit. It was apparent that the subject matter of the sale was the parcel of land, known as Cadastral Lot No. 11909, and not only a portion thereof. 8 Thus, on August 2, 1993, the court a quo rendered its decision with the following dispositive portion: WHEREFORE, premises considered, the petition is hereby granted and judgment is hereby rendered in favor of herein petitioner. The Register of Deeds of the City of Cebu is hereby ordered and directed to effect the registration in his office of the Deed of Absolute Sale between Spouses Antonio Caballero and Leonarda Caballero and Petitioner, Carmen del Prado dated June 11, 1990 covering Lot No. 11909 after payment of all fees prescribed by law. Additionally, the Register of Deeds of the City of Cebu is hereby ordered to cancel Original Certificate No. 1305 in the name of Antonio Caballero and Leonarda Caballero and the Transfer Certificate of Title be issued in the name of Petitioner Carmen del Prado covering the entire parcel of land known as Cadastral Lot No. 11909.9 An appeal was duly filed. On September 26, 2000, the CA promulgated the assailed decision, reversing and setting aside the decision of the RTC. EcDSHT The CA no longer touched on the character of the sale, because it found that petitioner availed herself of an improper remedy. The "petition for registration of document" is not one of the remedies provided under P.D. No. 1529, after the original registration has been effected. Thus, the CA ruled that the lower court committed an error when it assumed jurisdiction over the petition, which prayed for a remedy not sanctioned under the Property Registration Decree. Accordingly, the CA disposed, as follows: IN VIEW OF ALL THE FOREGOING, the appealed decision is REVERSED and SET ASIDE and a new one entered dismissing the petition for lack of jurisdiction. No pronouncement as to costs. 10 Aggrieved, petitioner filed the instant petition, raising the following issues: I.WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRAVE ERROR IN MAKING FINDINGS OF FACT CONTRARY TO THAT OF THE TRIAL COURT[;] II.WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRAVE ERROR IN FAILING TO RULE THAT THE SALE OF THE LOT IS FOR A LUMP SUM OR CUERPO CIERTO[;] III.WHETHER OR NOT THE COURT A QUO HAS JURISDICTION OVER THE PETITION FOR REGISTRATION OF THE DEED OF ABSOLUTE SALE DATED 11 JUNE 1990 EXECUTED BETWEEN HEREIN PETITIONER AND RESPONDENTS[.] 11 The core issue in this case is whether or not the sale of the land was for a lump sum or not. Petitioner asserts that the plain language of the Deed of Sale shows that it is a sale of a real estate for a lump sum, governed under Article 1542 of the Civil Code. 12In the contract, it was stated that the land contains an area of 4,000 sq m more or less, bounded on the North by Lot No. 11903, on the East by Lot No. 11908, on the South by Lot Nos. 11858 & 11912, and on the West by Lot No. 11910. When the OCT was issued, the area of Lot No. 11909 was declared to be 14,475 sq m, with an excess of 10,475 sq m. In accordance with Article 1542, respondents are, therefore, duty-bound to deliver the whole area within the boundaries stated, without any corresponding increase in the price. Thus, petitioner concludes that she is entitled to have the certificate of title, covering the whole Lot No. 11909, which was originally issued in the names of respondents, transferred to her name. We do not agree. ETHIDa In Esguerra v. Trinidad, 13 the Court had occasion to discuss the matter of sales involving real estates. The Court's pronouncement is quite instructive: In sales involving real estate, the parties may choose between two types of pricing agreement: a unit price contract wherein the purchase price is determined by way of reference to a stated rate per unit area (e.g., P1,000 per square meter), or a lump sum contract which states a full purchase price for an immovable the area of which may be declared based on the estimate or where both the area and boundaries are stated (e.g., P1 million for 1,000 square meters, etc.). In Rudolf Lietz, Inc. v. Court of Appeals (478 SCRA 451), the Court discussed the distinction: ". . . In a unit price contract, the statement of area of immovable is not conclusive and the price may be reduced or increased depending on the area actually delivered. If the vendor delivers less than the area agreed upon, the vendee may oblige the vendor to deliver all that may be stated in the contract or demand for the proportionate reduction of the purchase price if delivery is not possible. If the vendor delivers more than the area stated in the contract, the vendee has the option to accept only the amount agreed upon or to accept the whole area, provided he pays for the additional area at the contract rate. xxx xxx xxx In the case where the area of an immovable is stated in the contract based on an estimate, the actual area delivered may not measure up exactly with the area stated in the contract. According to Article 1542 of the Civil Code, in the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or number, there shall be no increase or decrease of the price, although there be a greater or less areas or number than that stated in the contract. . . . xxx xxx xxx Where both the area and the boundaries of the immovable are declared, the area covered within the boundaries of the immovable prevailsover the stated area. In cases of conflict between areas and boundaries, it is the latter which should prevail. What really defines a piece of groundis not the area, calculated with more or less certainty, mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating its limits. In a contract of sale of land in a mass, it is well established that the specific boundaries stated in the contract must control over any statement with respect to the area contained within its boundaries. It is not of vital consequence that a deed or contract of sale of land should disclose the area with mathematical accuracy. It is sufficient if its extent is objectively indicated with sufficient precision to enable one to identify it. An error as to the superficial area is immaterial. Thus, the obligation of the vendor is to deliver everything within the boundaries, inasmuch as it is the entirety thereof that distinguishes the determinate object. 14 The Court, however, clarified that the rule laid down in Article 1542 is not hard and fast and admits of an exception. It held: A caveat is in order, however. The use of "more or less" or similar words in designating quantity covers only a reasonable excess or deficiency. A vendee of land sold in gross or with the description "more or less" with reference to its area does not thereby ipso facto take all risk of quantity in the land. HaIATC Numerical data are not of course the sole gauge of unreasonableness of the excess or deficiency in area. Courts must consider a host of other factors. In one case (see Roble v. Arbasa, 414 Phil. 343 [2001]), the Court found substantial discrepancy in area due to contemporaneous circumstances. Citing change in the physical nature of the property, it was therein established that the excess area at the southern portion was a product of reclamation, which explained why the land's technical description in the deed of sale indicated the seashore as its southern boundary, hence, the inclusion of the reclaimed area was declared unreasonable. 15 In the instant case, the deed of sale is not one of a unit price contract. The parties agreed on the purchase price of P40,000.00 for a predetermined area of 4,000 sq m, more or less, bounded on the North by Lot No. 11903, on the East by Lot No. 11908, on the South by Lot Nos. 11858 & 11912, and on the West by Lot No. 11910. In a contract of sale of land in a mass, the specific boundaries stated in the contract must control over any other statement, with respect to the area contained within its boundaries. 16 Black's Law Dictionary 17 defines the phrase "more or less" to mean: About; substantially; or approximately; implying that both parties assume the risk of any ordinary discrepancy. The words are intended to cover slight or unimportant inaccuracies in quantity, Carter v. Finch, 186 Ark. 954, 57 S.W.2d 408; and are ordinarily to be interpreted as taking care of unsubstantial differences or differences of small importance compared to the whole number of items transferred. Clearly, the discrepancy of 10,475 sq m cannot be considered a slight difference in quantity. The difference in the area is obviously sizeable and too substantial to be overlooked. It is not a reasonable excess or deficiency that should be deemed included in the deed of sale. We take exception to the avowed rule that this Court is not a trier of facts. After an assiduous scrutiny of the records, we lend credence to respondents' claim that they intended to sell only 4,000 sq m of the whole Lot No. 11909, contrary to the findings of the lower court. The records reveal that when the parties made an ocular inspection, petitioner specifically pointed to that portion of the lot, which she preferred to purchase, since there were mango trees planted and a deep well thereon. After the sale, respondents delivered and segregated the area of 4,000 sq m in favor of petitioner by fencing off the area of 10,475 sq m belonging to them. 18 Contracts are the law between the contracting parties. Sale, by its very nature, is a consensual contract, because it is perfected by mere consent. The essential elements of a contract of sale are the following: (a) consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price; (b) determinate subject matter; and (c) price certain in money or its equivalent. All these elements are present in the instant case. 19 More importantly, we find no reversible error in the decision of the CA. Petitioner's recourse, by filing the petition for registration in the same cadastral case, was improper. It is a fundamental principle in land registration that a certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein. Such indefeasibility commences after one year from the date of entry of the decree of registration. 20 Inasmuch as the petition for registration of document did not interrupt the running of the period to file the appropriate petition for review and considering that the prescribed one-year period had long since expired, the decree of registration, as well as the certificate of title issued in favor of respondents, had become incontrovertible. 21 cHDaEI WHEREFORE, the petition is DENIED. SO ORDERED. ECOND DIVISION [G.R. No. 171531. January 30, 2009.] GUARANTEED HOMES, INC., petitioner, vs. HEIRS OF MARIA P. VALDEZ, (EMILIA V. YUMUL and VICTORIA V. MOLINO), HEIRS OF SEVERINA P. TUGADE (ILUMINADA and LEONORA P. TUGADE, HEIRS OF ETANG P. GATMIN (LUDIVINA G. DELA CRUZ (by and through ALFONSO G. DELA CRUZ), HILARIA G. COBERO and ALFREDO G. COBERO) and SIONY G. TEPOL (by and through ELENA T. RIVAS and ELESIO TEPOL, JR.), AS HEIRS OF DECEDENT PABLO PASCUA, respondents. D E C I S I O N TINGA, J p: This is a petition for review 1 under Rule 45 of the Rules of Court of the Court of Appeals' Decision dated 22 March 2005 2 and Resolution dated 9 February 2006 3 in CA-G.R. CV No. 67462. The Court of Appeals reversed the 12 November 1999 Order of the Regional Trial Court (RTC) of Olongapo City, Branch 73 4 which granted the motion to dismiss filed by Guaranteed Homes, Inc. (petitioner). The appellate court denied petitioner's motion for reconsideration. The factual antecedents are as follows: Respondents, who are the descendants of Pablo Pascua (Pablo), filed a complaint seeking reconveyance of a parcel of land with an area of 23.7229 hectares situated in Cabitaugan, Subic, Zambales and covered by Original Certificate of Title (OCT) No. 404 in the name of Pablo. 5 In the alternative, the respondents prayed that damages be awarded in their favor. 6 OCT No. 404 7 was attached as one of the annexes of respondents' complaint. It contained several annotations in the memorandum of encumbrances which showed that the property had already been sold by Pablo during his lifetime to Alejandria Marquinez and Restituto Morales. Respondents also attached copies of the following documents as integral parts of their complaint: Transfer Certificate of Title (TCT) No. T-8241, 8 TCT No. T-8242, 9 TCT No. T-10863, 10 the Extrajudicial Settlement of a Sole Heir and Confirmation of Sales 11 executed by Cipriano Pascua, Sr. (Cipriano), and the Deed of Sale with Mortgage 12 between spouses Albino Rodolfo and Fabia Rodolfo (spouses Rodolfo) and petitioner. HICSaD In their complaint, 13 respondents alleged that Pablo died intestate sometime in June 1945 and was survived by his four children, one of whom was the deceased Cipriano. 14 On 13 February 1967, Cipriano executed a document denominated as "Extrajudicial Settlement of a Sole Heir and Confirmation of Sales", 15 wherein he declared himself as the only heir of Pablo and confirmed the sales made by the decedent during his lifetime, including the alleged sale of the disputed property to spouses Rodolfo. Respondents likewise averred that on the following day 14 February 1967, TCT No. T-8241 16 was issued in the name of Cipriano "without OCT No. 404 having been cancelled." 17 However, TCT No. T-8241 was not signed by the Register of Deeds. On the same day, TCT No. T-8242 was issued in the name of the spouses Rodolfo and TCT No. T-8241 was thereby cancelled. 18 Subsequently, on 31 October 1969, the spouses Rodolfo sold the disputed property to petitioner by virtue of a Deed of Sale with Mortgage. Consequently, on 5 November 1969, TCT No. T-8242 was cancelled and TCT No. T-10863 19 was issued in the name of petitioner. 20 It was further averred in the complaint that Jorge Pascua, Sr., son of Cipriano, filed on 24 January 1997 a petition before the RTC of Olongapo City, Branch 75, for the issuance of a new owner's duplicate of OCT No. 404, docketed as Other Case No. 04-0-97. 21 The RTC denied the petition. 22 The trial court held that petitioner was already the owner of the land, noting that the failure to annotate the subsequent transfer of the property to it at the back of OCT No. 404 did not affect its title to the property. Petitioner filed a motion to dismiss 23 the complaint on the grounds that the action is barred by the Statute of Limitations, more than 28 years having elapsed from the issuance of TCT No. T- 10863 up to the filing of the complaint, and that the complaint states no cause of action as it is an innocent purchaser for value, it having relied on the clean title of the spouses Rodolfo. Impleaded as defendants, the heirs of Cipriano filed an answer to the complaint in which they denied knowledge of the existence of the extrajudicial settlement allegedly executed by Cipriano and averred that the latter, during his lifetime, did not execute any document transferring ownership of the property. 24 TcCEDS The Register of Deeds and the National Treasurer filed, through the Office of the Solicitor General, an answer averring that the six (6)- year period fixed in Section 102 of Presidential Decree (P.D.) No. 1529 for the filing of an action against the Assurance Fund had long prescribed since the transfer of ownership over the property was registered through the issuance of TCT No. T-10863 in favor of petitioner as early as 1969. They also claimed that respondents have no cause of action against the Assurance Fund since they were not actually deprived of ownership over the property, as they could have recovered the property had it not been for their inaction for over 28 years. 25 The RTC granted petitioner's motion to dismiss. 26 Noting that respondents had never claimed nor established that they have been in possession of the property and that they did not present any evidence to show that petitioner has not been in possession of the property either, the RTC applied the doctrine that an action to quiet title prescribes where the plaintiff is not in possession of the property. The trial court found that the complaint per its allegations presented a case of implied or constructive trust on the part of Cipriano who had inaccurately claimed to be the sole heir of Pablo in the deed of extrajudicial settlement of estate which led to the issuance of TCT No. T-8241 in his favor. As the prescriptive period for reconveyance of a fraudulently registered real property is ten (10) years reckoned from the date of the issuance of the title, the trial court held that the action for reconveyance had already prescribed with the lapse of more than 28 years from the issuance of TCT No. T-10863 on 5 November 1969 as of the filing of the complaint on 21 November 1997. The RTC added that it is an enshrined rule that even a registered owner of property may be barred from recovering possession of property by virtue of laches. The RTC further held that petitioner had the right to rely on TCT No. T-8242 in the name of spouses Rodolfo. Petitioner is not obliged to go beyond the title considering that there were no circumstances surrounding the sale sufficient to put it into inquiry. IcESaA Concerning the Assurance Fund, the RTC held that the claim against it had long prescribed since Section 102 of P.D. No. 1529 provides for a six-year period within which a plaintiff may file an action against the fund and in this case the period should be counted from the time of the issuance of the challenged TCT No. T-10863 on 5 November 1969 and thus expired in 1975. Undaunted, respondents appealed to the Court of Appeals. 27 The Court of Appeals reversed the RTC's order. 28 In ordering the reinstatement of the complaint, the appellate court ruled that the averments in respondents' complaint before the RTC make out a case for quieting of title which has not prescribed. Respondents did not have to prove possession over the property since petitioner as the movant in a motion to dismiss hypothetically admitted the truth of the allegations in the complaint. The appellate court found that possession over the property was sufficiently alleged in the complaint which stated that "neither petitioner nor the Rodolfo spouses ever had possession of the disputed property" as "a number of the Pascua heirs either had been (still are) in actual, continuous and adverse possession thereof or had been enjoying (still are enjoying) the use thereof." 29 By the same token, laches had not set in, the Court of Appeals added. The appellate court further held that the ruling of the RTC that petitioner is an innocent purchaser for value is contrary to the allegations in respondents' complaint. Hence, the present petition for review. The sole issue before this Court revolves around the propriety of the RTC's granting of the motion to dismiss and conversely the tenability of the Court of Appeals' reversal of the RTC's ruling. The petition is meritorious. It is well-settled that to sustain a dismissal on the ground that the complaint states no cause of action, the insufficiency of the cause of action must appear on the face of the complaint, and the test of the sufficiency of the facts alleged in the complaint to constitute a cause of action is whether or not, admitting the facts alleged, the court could render a valid judgment upon the same in accordance with the prayer of the complaint. For the purpose, the motion to dismiss must hypothetically admit the truth of the facts alleged in the complaint. 30 The admission, however, is limited only to all material and relevant facts which are well pleaded in the complaint. 31 The factual allegations in respondents' complaint should be considered in tandem with the statements and inscriptions on the documents attached to it as annexes or integral parts. In a number of cases, the Court held that in addition to the complaint, other pleadings submitted by the parties should be considered in deciding whether or not the complaint should be dismissed for lack of cause of action. 32 Likewise, other facts not alleged in the complaint may be considered where the motion to dismiss was heard with the submission of evidence, or if documentary evidence admitted by stipulation discloses facts sufficient to defeat the claim. 33 For while the court must accept as true all well pleaded facts in the complaint, the motion does not admit allegations of which the court will take judicial notice are not true, nor does the rule apply to legally impossible facts, nor to facts inadmissible in evidence, nor to facts which appear by record or document included in the pleadings to be unfounded. 34
In the case at bar, the trial court conducted a hearing on the motion to dismiss. At the hearing, the parties presented documentary evidence. Among the documents marked and offered in evidence are the annexes of the complaint. 35 HCITcA Based on the standards set by this Court in relation to the factual allegations and documentary annexes of the complaint as well as the exhibits offered at the hearing of the motion to dismiss, the inescapable conclusion is that respondents' complaint does not state a cause of action against petitioner. Firstly, the complaint does not allege any defect with TCT No. T-8242 in the name of the spouses Rodolfo, who were petitioner's predecessors-in- interest, or any circumstance from which it could reasonably be inferred that petitioner had any actual knowledge of facts that would impel it to make further inquiry into the title of the spouses Rodolfo. 36 It is basic that a person dealing with registered property need not go beyond, but only has to rely on, the title of his predecessor-in-interest. Since "the act of registration is the operative act to convey or affect the land insofar as third persons are concerned", it follows that where there is nothing in the certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser is not required to explore farther than what the Torrens title upon its face indicates in quest for any hidden defect or inchoate right that may subsequently defeat his right thereto. If the rule were otherwise, the efficacy and conclusiveness of the certificate of title which the Torrens system seeks to insure would entirely be futile and nugatory. The public shall then be denied of its foremost motivation for respecting and observing the Torrens system of registration. In the end, the business community stands to be inconvenienced and prejudiced immeasurably. 37 Contrary to the assertion of respondents, OCT No. 404 was expressly cancelled by TCT No. T-8241. The alleged non-signature by the Register of Deeds Soliman Achacoso, does not affect the validity of TCT No. T-8241 since he signed TCT No. T-8242 and issued both titles on the same day. There is a presumption of regularity in the performance of official duty. The presumption is further bolstered by the fact that TCT No. T-8241 was certified to be on file with the Registry of Deeds and registered in the name of Cipriano. It is enough that petitioner had examined the latest certificate of title which in this case was issued in the name of the immediate transferor, the spouses Rodolfo. The purchaser is not bound by the original certificate but only by the certificate of title of the person from whom he had purchased the property. 38 Secondly, while the Extrajudicial Settlement of a Sole Heir and Confirmation of Sales executed by Cipriano alone despite the existence of the other heirs of Pablo, is not binding on such other heirs, nevertheless, it has operative effect under Section 44 of the Property Registration Decree, which provides that: ESaITA SEC. 44.Statutory Liens Affecting Title. Every registered owner receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered land taking a certificate of title for value and in good faith, shall hold the same free from all encumbrances except those noted on said certificate and any of the following encumbrances which may be subsisting, namely: xxx xxx xxx Even assuming arguendo that the extrajudicial settlement was a forgery, the Court still has to uphold the title of petitioner. The case law is that although generally a forged or fraudulent deed is a nullity and conveys no title, there are instances when such a fraudulent document may become the root of a valid title. 39 And one such instance is where the certificate of title was already transferred from the name of the true owner to the forger, and while it remained that way, the land was subsequently sold to an innocent purchaser. For then, the vendee had the right to rely upon what appeared in the certificate. 40 The Court cannot give credence to respondents' claims that the Extrajudicial Settlement of a Sole Heir and Confirmation of Sales was not registered and that OCT No. 404 was not cancelled by the Register of Deeds. The Register of Deeds of Zambales certified that the extrajudicial settlement was recorded on 14 February 1967, per Entry No. 18590. This is in compliance with Section 56 of Act No. 496, 41 the applicable law at the time of registration, which provides that: EHIcaT Sec. 56.Each register of deeds shall keep an entry book in which he shall enter in the order of their reception all deeds and other voluntary instruments, and all copies of writs and other process filed with him relating to registered land. He shall note in such book the year, month, day, hour, and minute of reception of all instruments, in the order in which they are received. They shall be regarded as registered from the time so noted, and the memorandum of each instrument when made on the certificate of title to which it refers shall bear the same date. [Emphasis supplied] Registration in the public registry is notice to the whole world. Every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land shall be, if registered, filed or entered in the Office of the Register of Deeds of the province or city where the land to which it relates lies, constructive notice to all persons from the time of such registering, filing or entering. 42 Thirdly, respondents cannot make out a case for quieting of title since OCT No. 404 had already been cancelled. Respondents have no title to anchor their complaint on. 43 Title to real property refers to that upon which ownership is based. It is the evidence of the right of the owner or the extent of his interest, by which means he can maintain control and, as a rule, assert right to exclusive possession and enjoyment of the property. 44 cIHSTC Moreover, there is nothing in the complaint which specified that the respondents were in possession of the property. They merely alleged that the occupants or possessors are "others not defendant Spouses Rodolfo" 45 who could be anybody, and that the property is in actual possession of "a number of the Pascua heirs" 46who could either be the respondents or the heirs of Cipriano. The admission of the truth of material and relevant facts well pleaded does not extend to render a demurrer an admission of inferences or conclusions drawn therefrom, even if alleged in the pleading; nor mere inferences or conclusions from facts not stated; nor conclusions of law; nor matters of evidence; nor surplusage and irrelevant matters. 47 The other heirs of Pablo should have filed an action for reconveyance based on implied or constructive trust within ten (10) years from the date of registration of the deed or the date of the issuance of the certificate of title over the property. 48 The legal relationship between Cipriano and the other heirs of Pablo is governed by Article 1456 of the Civil Code which provides that if a property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. From the above discussion, there is no question that petitioner is an innocent purchaser for value; hence, no cause of action for cancellation of title will lie against it.49 The RTC was correct in granting petitioner's motion to dismiss. IcADSE Lastly, respondents' claim against the Assurance Fund also cannot prosper. Section 101 of P.D. No. 1529 clearly provides that the Assurance Fund shall not be liable for any loss, damage or deprivation of any right or interest in land which may have been caused by a breach of trust, whether express, implied or constructive. Even assuming arguendo that they are entitled to claim against the Assurance Fund, the respondents' claim has already prescribed since any action for compensation against the Assurance Fund must be brought within a period of six (6) years from the time the right to bring such action first occurred, which in this case was in 1967. WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G.R. CV No. 67462 is REVERSED and SET ASIDE. The 12 November 1999 Order of the Regional Trial Court of Olongapo City, Branch 73 in Civil Case No. 432-097 is REINSTATED. SO ORDERED.
FIRST DIVISION [G.R. No. 154270. March 9, 2010.] TEOFISTO OO, PRECY O. NAMBATAC, VICTORIA O. MANUGAS and POLOR O. CONSOLACION, petitioners, vs. VICENTE N. LIM,respondent. DECISION BERSAMIN, J p: The subject of controversy is Lot No. 943 of the Balamban Cadastre in Cebu City, covered by Original Certificate of Title (OCT) No. RO-9969-(O-20449), over which the contending parties in this action for quieting of title, initiated by respondent Vicente N. Lim (Lim) in the Regional Trial Court (RTC) in Cebu City, assert exclusive ownership, to the exclusion of the other. In its decision dated July 30, 1996, 1 the RTC favored Lim, and ordered the cancellation of OCT No. RO-9969-(O-20449) and the issuance of a new certificate of title in the name of Luisa Narvios-Lim (Luisa), Lim's deceased mother and predecessor-in-interest. On appeal (CA-GR CV No. 57823), the Court of Appeals (CA) affirmed the RTC on January 28, 2002. 2 It later denied the petitioners' motion for reconsiderationthrough the resolution dated June 17, 2002. 3 Hence, this appeal via petition for review on certiorari. Antecedents On October 23, 1992, Lim filed in the RTC in Cebu City a petition for the reconstitution of the owner's duplicate copy of OCT No. RO- 9969-(O-20449), alleging that said OCT had been lost during World War II by his mother, Luisa; 4 that Lot No. 943 of the Balamban Cadastre in Cebu City covered by said OCT had been sold in 1937 to Luisa by Spouses Diego Oo and Estefania Apas (Spouses Oo), the lot's registered owners; and that although the deed evidencing the sale had been lost without being registered, Antonio Oo (Antonio), the only legitimate heir of Spouses Oo, had executed on April 23, 1961 in favor of Luisa a notarized document denominated as confirmation of sale, 5 which was duly filed in the Provincial Assessor's Office of Cebu. Zosimo Oo and petitioner Teofisto Oo (Oos) opposed Lim's petition, contending that they had the certificate of title in their possession as the successors-in-interest of Spouses Oo. On account of the Oos' opposition, and upon order of the RTC, Lim converted the petition for reconstitution into a complaint for quieting of title, 6 averring additionally that he and his predecessor-in-interest had been in actual possession of the property since 1937, cultivating and developing it, enjoying its fruits, and paying the taxes corresponding to it. He prayed, inter alia, that the Oos be ordered to surrender the reconstituted owner's duplicate copy of OCT No. RO-9969-(O-20449), and that said OCT be cancelled and a new certificate of title be issued in the name of Luisa in lieu of said OCT. In their answer, 7 the Oos claimed that their predecessors-in- interest, Spouses Oo, never sold Lot No. 943 to Luisa; and that the confirmation of sale purportedly executed by Antonio was fabricated, his signature thereon not being authentic. RTC Ruling On July 30, 1996, after trial, the RTC rendered its decision, 8 viz.: WHEREFORE, premises considered, judgment is hereby rendered quieting plaintiff's title to Lot No. 943 of the Balamban (Cebu) Cadastre, and directing the Register of Deeds of Cebu (1)To register the aforestated April 23, 1961 Confirmation of Sale of Lot No. 943 of the Balamban, Cebu Cadastre by Antonio Oo in favor of Luisa Narvios- Lim; (2)To cancel the original certificate of title covering the said Lot No. 943 of the Balamban, Cebu Cadastre; and, (3)To issue in the name of Luisa Narvios-Lim, a new duplicate certificate of title No. RO-9969 (O-20449) of the Register of Deeds of Cebu, which shall contain a memorandum of the fact that it is issued in place of the lost duplicate certificate of title, and shall in all respects be entitled to like faith and credit as the original certificate, and shall be regarded as such for all purposes of this decree, pursuant to the last paragraph of Section 109, Presidential Decree No. 1529. AcSIDE Without special pronouncement as to costs. SO ORDERED. 9 The RTC found that the Lims had been in peaceful possession of the land since 1937; that their possession had never been disturbed by the Oos, except on two occasions in 1993 when the Oos seized the harvested copra from the Lims' caretaker; that the Lims had since declared the lot in their name for taxation purposes, and had paid the taxes corresponding to the lot; that the signature of Antonio on the confirmation of sale was genuine, thereby giving more weight to the testimony of the notary public who had notarized the document and affirmatively testified that Antonio and Luisa had both appeared before him to acknowledge the instrument as true than to the testimony of the expert witness who attested that Antonio's signature was a forgery. CA Ruling On appeal, the Oos maintained that the confirmation of sale was spurious; that the property, being a titled one, could not be acquired by the Lims through prescription; that their (the Oos) action to claim the property could not be barred by laches; and that the action instituted by the Lims constituted a collateral attack against their registered title. The CA affirmed the RTC, however, and found that Spouses Oo had sold Lot No. 943 to Luisa; and that such sale had been confirmed by their son Antonio. The CA ruled that the action for quieting of title was not a collateral, but a direct attack on the title; and that the Lims' undisturbed possession had given them a continuing right to seek the aid of the courts to determine the nature of the adverse claim of a third party and its effect on their own title. Nonetheless, the CA corrected the RTC, by ordering that the Office of the Register of Deeds of Cebu City issue a new duplicate certificate of title in the name of Luisa, considering that the owner's duplicate was still intact in the possession of the Oos. The decree of the CA decision was as follows: WHEREFORE, the appeal is DISMISSED for lack of merit. However, the dispositive portion of the decision appealed from is CORRECTED as follows: (1)Within five (5) days from finality of the decision, defendants-appellants are directed to present the owner's duplicate copy of OCT No. RO-9969 (O-20449) to the Register of Deeds who shall thereupon register the "Confirmation of Sale" of Lot No. 943, Balamban Cadastre, Cebu, executed on April 23, 1961 by Antonio Oo in favor of Luisa Narvios-Lim, and issue a new transfer certificate of title to and in the name of the latter upon cancellation of the outstanding original and owner's duplicate certificate of title. (2)In the event defendants-appellants neglect or refuse to present the owner's copy of the title to the Register of Deeds as herein directed, the said title, by force of this decision, shall be deemed annulled, and the Register of Deeds shall make a memorandum of such fact in the record and in the new transfer certificate of title to be issued to Luisa Narvios-Lim. (3)Defendants-appellants shall pay the costs. SO ORDERED. 10 The CA denied the Oos' motion for reconsideration 11 on June 17, 2002. 12 Hence, this appeal. IDCHTE Issues The petitioners raise the following issues: 1.Whether or not the validity of the OCT could be collaterally attacked through an ordinary civil action to quiet title; 2.Whether or not the ownership over registered land could be lost by prescription, laches, or adverse possession; 3.Whether or not there was a deed of sale executed by Spouses Oo in favor of Luisa and whether or not said deed was lost during World War II; 4.Whether or not the confirmation of sale executed by Antonio in favor of Luisa existed; and 5.Whether or not the signature purportedly of Antonio in that confirmation of sale was genuine. Ruling of the Court The petition has no merit. A. Action for cancellation of title is not an attack on the title The petitioners contend that this action for quieting of title should be disallowed because it constituted a collateral attack on OCT No. RO-9969- (O-20449), citing Section 48 of Presidential Decree No. 1529, viz.: Section 48.Certificate not subject to collateral attack. A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law. The petitioners' contention is not well taken. An action or proceeding is deemed an attack on a title when its objective is to nullify the title, thereby challenging the judgment pursuant to which the title was decreed. 13 The attack is direct when the objective is to annul or set aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment is nevertheless made as an incident thereof. 14 Quieting of title is a common law remedy for the removal of any cloud, doubt, or uncertainty affecting title to real property. 15 Whenever there is a cloud on title to real property or any interest in real property by reason of any instrument, record, claim, encumbrance, or proceeding that is apparently valid or effective, but is, in truth and in fact, invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title. 16 In such action, the competent court is tasked to determine the respective rights of the complainant and the other claimants, not only to place things in their proper places, and to make the claimant, who has no rights to said immovable, respect and not disturb the one so entitled, but also for the benefit of both, so that whoever has the right will see every cloud of doubt over the property dissipated, and he can thereafter fearlessly introduce the improvements he may desire, as well as use, and even abuse the property as he deems fit. 17 Lim's complaint pertinently alleged: 18.If indeed, the genuine original of the Owner's Duplicate of the Reconstituted Original Certificate of Title No. RO-9699 (O-20449) for Lot 943, Balamban Cadastre . . . is in Defendant's (Oo's) possession, then VNL submits the following PROPOSITIONS: xxx xxx xxx 18.2.Therefore, the Original of Owner's Duplicate Certificate (which Respondents [Defendants Oos] claim in their Opposition is in their possession) must be surrendered to VNL upon order of this Court, after the Court shall have determined VNL's mother's acquisition of the attributes of ownership over said Lot 943, in this action, in accordance with Section 107, P.D. 1529, Property Registration Decree . . . xxx xxx xxx [t]hat OCT 20449 be cancelled and new title for Lot 943 be issued directly in favor of LUISA NARVIOS, to complete her title to said Lot; 18 The averments readily show that the action was neither a direct nor a collateral attack on OCT No. RO-9969-(O-20449), for Lim was asserting only that the existing title registered in the name of the petitioners' predecessors had become inoperative due to the conveyance in favor of Lim's mother, and resultantly should be cancelled. Lim did not thereby assail the validity of OCT No. RO-9969-(O-20449), or challenge the judgment by which the title of the lot involved had been decreed. In other words, the action sought the removal of a cloud from Lim's title, and the confirmation of Lim's ownership over the disputed property as the successor-in- interest of Luisa. B. Prescription was not relevant The petitioners assert that the lot, being titled in the name of their predecessors-in-interest, could not be acquired by prescription or adverse possession. The assertion is unwarranted. Prescription, in general, is a mode of acquiring or losing ownership and other real rights through the lapse of time in the manner and under the conditions laid down by law. 19 However, prescription was not relevant to the determination of the dispute herein, considering that Lim did not base his right of ownership on an adverse possession over a certain period. He insisted herein, instead, that title to the land had been voluntarily transferred by the registered owners themselves to Luisa, his predecessor-in-interest. Lim showed that his mother had derived a just title to the property by virtue of sale; that from the time Luisa had acquired the property in 1937, she had taken over its possession in the concept of an owner, and had performed her obligation by paying real property taxes on the property, as evidenced by tax declarations issued in her name; 20 and that in view of the delivery of the property, coupled with Luisa's actual occupation of it, all that remained to be done was the issuance of a new transfer certificate of title in her name. cdrep C. Forgery, being a question of fact, could not be dealt with now The petitioners submit that Lim's evidence did not preponderantly show that the ownership of the lot had been transferred to Luisa; and that both the trial and the appellate courts disregarded their showing that Antonio's signature on the confirmation of sale was a forgery. Clearly, the petitioners hereby seek a review of the evaluation and appreciation of the evidence presented by the parties. The Court cannot anymore review the evaluation and appreciation of the evidence, because the Court is not a trier of facts. 21 Although this rule admits of certain exceptions, viz.: (1) when the conclusion is a finding grounded entirely on speculation, surmises, or conjecture; (2) when the inference made is manifestly mistaken; (3) where there is a grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making its findings, went beyond the issues of the case, and the findings are contrary to the admissions of both appellant and appellee; (7) when the findings of the Court of Appeals are contrary to those of the trial court; (8) when the findings of fact are conclusions without specific evidence on which they are based; (9) when the facts set forth in the petition as well in the petitioners' main and reply briefs are not disputed by the respondents; and, (10) when the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and are contradicted by the evidence on record, 22 it does not appear now that any of the exceptions is present herein. We thus apply the rule without hesitation, and reject the appeal for that reason. It is emphasized, too, that the CA upheld the conclusion arrived at by the RTC that the signature of Antonio had not been simulated or forged. The CA ruled that the testimony of the notary public who had notarized the confirmation of sale to the effect that Antonio and Luisa had appeared before him prevailed over that of the petitioners' expert witness. The concurrence of their conclusion on the genuineness of Antonio's signature now binds the Court. 23 In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence. Preponderance of evidence is the weight, credit, and value of the aggregate evidence on either side, and is usually considered to be synonymous with the term greater weight of the evidence or greater weight of the credible evidence. Preponderance of evidence is a phrase that means, in the last analysis, probability of the truth. 24 It is evidence that is more convincing to the court as worthy of belief than that which is offered in opposition thereto. Lim successfully discharged his burden of proof as the plaintiff. He established by preponderant evidence that he had a superior right and title to the property. In contrast, the petitioners did not present any proof of their better title other than their copy of the reconstituted certificate of title. Such proof was not enough, because the registration of a piece of land under the Torrens system did not create or vest title, such registration not being a mode of acquiring ownership. The petitioners need to be reminded that a certificate of title is merely an evidence of ownership or title over the particular property described therein. Its issuance in favor of a particular person does not foreclose the possibility that the real property may be co- owned with persons not named in the certificate, or that it may be held in trust for another person by the registered owner. 25 WHEREFORE, the petition for review on certiorari is denied, and the decision dated January 28, 2002 is affirmed. The petitioners are ordered to pay the costs of suit. SO ORDERED. cCaEDA
EN BANC [G.R. Nos. L-21703-04. August 31, 1966.] MATEO H. REYES and JUAN H. REYES, petitioners- appellants, vs. MATEO RAVAL REYES, respondent- appellee. Harold M. Hernando for petitioners-appellants. Rafael Ruiz for respondent-appellee. D E C I S I O N REYES, J.B.L., J p: Direct appeal on pure question of law from an order of the Court of First Instance of Ilocos Norte, in its Cadastral Cases Nos. 31, L.R.C. Rec. No. 1188, and 42 L. R. C. Rec. No. 1194, denying petitioners' motion to compel respondent to surrender their owners' duplicates of Original Certificates of Title Nos. 22161 and 8066, as well as from a subsequent order of the same court, refusing, upon petitioners' motion, to reconsider the first order of denial. The undisputed facts are: three brothers, Mateo H., Juan H., and Francisco H., all surnamed Reyes, are the registered owners of several parcels of land, to wit: Lots Nos. 15891, 15896, 15902 and 15912, of the Laoag (Ilocos Norte) Cadastre, embraced in and covered by Original Certificate of Title No. 22161 and also Lots Nos. 20481 and 20484, of the same cadastral survey, embraced in and covered by Original Certificate of Title No. 8066, both of the Registry of Deeds of Ilocos Norte. These titles were issued pursuant to a decree of registration, dated 31 May 1940. On 17 July 1962, petitioners Mateo H. Reyes and Juan H. Reyes filed in the above stated cadastral cases, a motion for issuance of writs of possession over all the lots covered by both Certificates of Title above referred to. Respondent Mateo Raval Reyes opposed the motion, admitting that he is only in possession of the lots covered by Original Certificate of Title No. 22161, but denying that he possesses the lots covered by Original Certificate of Title No. 8066; however, he claimed that he has been in, and is entitled to, the possession thereof (i.e., Lots Nos. 20481 and 20484), having acquired by way of absolute sale (not recorded) from petitioners' brother, Francisco H. Reyes, the latter's undivided one-third (1/3) share, interest and participation of these disputed lots. After due hearing on this incident, the court a quo issued, on 20 December 1962, the writ of possession with respect to Lot Nos. 15891 and 15896, which writ was, upon petitioners' motion for reconsideration, amended, on 7 January 1963, to include all the other lots covered by both titles. Respondent did not appeal from this order amending the writ of possession. Subsequently, petitioners in the above stated cadastral cases, as plaintiffs, commenced, on 15 January 1963, before the same court of first instance, an ordinary civil action seeking to recover the products of the disputed lots, or their value, and moral damages against respondent Mateo Raval Reyes, as defendant. This case was docketed as its Civil Case No. 3659. Defendant therein (now respondent M. Raval Reyes) answered the complaint and pleaded a counterclaim for partition of all the disputed lots, alleging the same ground he had heretofore raised in his answer and/or opposition to the motion for issuance of writ of possession, i.e., he is their (plaintiffs') co-owner, he having bought from plaintiffs' brother, Francisco H. Reyes, the latter's undivided one- third (1/3) share, interest and participation to these disputed lots. Pending trial on this ordinary civil case (No. 3659), petitioners presented, on 25 February 1963, in the cadastral cases aforementioned, a motion to compel respondent Mateo Raval Reyes to surrender and deliver to them the owners' duplicates of Original Certificates of Title Nos. 22161 and 8066. Respondent opposed this motion. The court a quo denied petitioners' motion, on the ground that the parcels of land covered by both titles are subjects of litigation in Civil Case No. 3659 and the same has not yet been decided on the merits by it. Petitioners subjected the foregoing order to a motion for reconsideration, but without success; hence, the present appeal. Petitioners-appellants dispute the above ruling of the trial court, contending that, since the subject matter of Civil Case No. 3659 are not the lots covered by the titles in question but their products or value, and moral damages, these lots are not in litigation in this ordinary civil case, and that since respondent had already raised the issue of ownership and possession of these lots in his opposition to the (petitioners') motion for issuance of writ of possession and, despite this opposition, the courta quo granted the writ, without any appeal being taken, respondent is barred and estopped from raising the same issue in the ordinary civil case, under the principle of res judicata. On the other hand, respondent-appellee maintain that, having pleaded a counterclaim for partition of the lots in question in said Civil Case No. 3659, the trial court correctly held that these lots are subjects of litigation in this ordinary civil case. He also maintains that petitioners not having impleaded their brother, Francisco H. Reyes, or his heirs as parties in their motion for issuance of writ of execution, and because these heirs have not intervened in this particular incident, the writ of possession issued by the trial court is, at most, valid only with respect to their (petitioners') undivided two-third (2/3) share and participation in these disputed lots; hence, he concludes that he is not barred and estopped from raising the issue of ownership and possession of the undivided one-third (1/3) share and participation of petitioners' brother, Francisco H. Reyes, which share respondent allegedly bought from the latter. In their reply brief, petitioners-appellants refute the latter argument of respondent-appellee by showing that they previously obtained special authority from the heirs of their deceased brother to represent them in the proceedings had in the court below. The sole issue to be resolved in the instant appeal is: who between petitioners-appellants or respondent-appellee has a better right to the possession or custody of the disputed owners' duplicates of certificates of title. While we agree with the court a quo that the disputed lots are subjects in litigation in 'Civil Case No. 3659, it appearing that respondent, as defendant therein, had presented a counterclaim for partition of the lots covered by the titles, we see no valid and plausible reason to justify, on this ground, the withholding from the registered owners, such as the petitioners-appellants herein, the custody and possession of the owners' duplicates of certificates of title. In a decided case, this Court has already held that: the owner of the land in whose favor and in whose name said land is registered and inscribed in the certificate of title has a more preferential right to the possession of the owner's duplicate than one whose name does not appear in the certificate and has yet to establish his right to the possession thereof. Thus this Court said: "Como acertadamente dijo el Jusgado, lo unico que se suscita es si Ana Umbao de Carpio tiene derecho a la posesion del duplicado para al dueo del Certificado de Titulo Original No. 698, con preferencia a la opositora- apelante. A nuestro juicio, la solucion es clara a includible. Hallandose admitido que el decreto final que se dicto en el expediente catastral en 28 de mayo de 1936, en relacion con el lote No. 778, fue a favor de Ana Umbao y que el duplicado para el dueo del Certificado de Titulo Original No. 698 se expidito por el Registrado de Titulos a favor de la misma, es obvio que quien tiene derecho a poseer el certificado de titulo es ella y no la apelante (art. 41 de la Ley No. 496, tal como ha sido reformado) "Alega la apelante que ella tiene tanto derecho como is apelada a poseer el titulo porque el terreno a que se refiere es de la prepiedad de laa tres hermanas. La pretencion no es meritoria. Segun el articulo 41 de la Ley No. 496, conforme ha sido enmendado, el duplicado para el dueo debe expedirse por el Registrador a numbre de la personala cuyo favor se ha decretado el terreno y dispone, adems que dicho duplicado debe entregarsele al dueno inscrito. Si la apelante cree que tiene derecho a participar en el lote No. 778, como coheredera, debe ejercitar una accion independiente, encaminada a obtener su participacion." (El Director de Terrenos contra Abacahin, 72 Phil. 326) It being undisputed that respondent had already availed of an independent civil action to recover his alleged co-owner's share in the disputed lots by filing a counterclaim for partition in said Civil Case No. 3659, his rights appear to be amply protected, and considering that he may also avail of, to better protect his rights thereto, the provision on notice of lis pendens under Section 24, Rule 14, of the Revised Rules of Court, for the purpose of recording the fact that the lots covered by the titles in question are litigated in said Civil Case No. 3659, we again see no justifiable reason for respondent to retain the custody of the owners' duplicates of certificates of title. In view of the above consideration, we deem it unnecessary to pass on the merits of the second contention of petitioners-appellants. WHEREFORE, the orders appealed from should be, as they are hereby, reversed and in accordance with this opinion, respondent Mateo Raval Reyes is hereby ordered to deliver to petitioners the owners' duplicate of Original Certificates of Title No. 22161 and 8066. With costs against respondent appellee, Mateo Raval Reyes.
EN BANC [G.R. No. L-7644. November 27, 1956.] HENRY LITAM, ETC., ET AL., plaintiffs-appellants, vs. REMEDIOS R. ESPIRITU, as guardian of the incompetent MARCOSA RIVERA, and ARMINIO RIVERA, defendants-appellees. [G.R. No. L-7645. November 27, 1956] IN THE MATTER OF THE INTESTATE OF THE DECEASED RAFAEL LITAM. GREGORIO DY TAM, petitioner-appellant, vs. REMEDIOS R. ESPIRITU, in her capacity as judicial guardian of the incompetent MARCOSA RIVERA, counter- petitioner, ARMINIO RIVERA,administrator-appellee. Sycip, Quisumbing & Salazar for appellants. De Los Santos & De los Santos and E. L. Gonzales for appellees. SYLLABUS 1.PATERNITY AND FILIATION; FAILURE TO ESTABLISH STATUS OF LEGITIMATE CHILDREN BARS CLAIM TO SHARE IN THE ESTATE. Appellants claims that they are the children of the decedent by a marriage celebrated in China in 1911 with S.K.; that during the subsistence of the marriage, the decedent had contracted in 1922 another marriage with M.R.; that as heirs, they are entitled to the decedent's one-half share in the properties acquired during the second marriage. Held: The various official and public documents executed by the decedent himself convincingly shows that he had not contracted marriage with any person other than M.R., and that he had no child. Thus in marriage certificate it was clearly stated that he was single when he married M.R. in 1922; in the sworn application for alien certificate of registration dated July 7, 1950, he declared under oath that no child; and in several other documents executed by him and presented in evidence he had consistently referred to M. R. alone his wife; he had never mentioned S. K. as his wife, or their alleged children. On the other hand, appellants did not present in evidence the marriage certificate of the decedent and their mother, which is the best evidence of the alleged marriage; or gave any explanation for the non- presentation thereof or of its loss neither have they presented any competent secondary evidence of the supposed marriage. The finding, therefore, of the lower court that the appellants are not heirs of the decedent is correct. 2.HUSBAND AND WIFE; PROPERTIES ACQUIRED DURING MARRIAGE PRESUMED CONJUGAL; PRESUMPTION, HOW OVERCOME. The evidence shows that the properties in questions were brought by the wife with her separate and exclusive money, although during her marriage with the decedents; that the spouse had adopted a system of separation of properties; that the wife had been administering said properties, to the exclusion of her husband; and that said properties were registered in her name. Thus, the disputable presumption of law that properties acquired during marriage are conjugal properties has been overcome. 3.EVIDENCE; DECLARATION AND ADMISSION AGAINST OWN INTEREST; PERSON BOUND THEREBY. The decedent had acknowledged the fact that he had obtained from his wife sums of money which belongs exclusively to the latter and had not been paid to her up to the present. He also acknowledged that he had not given any money to his wife and that they have actually adopted a system of separation of property, each of them not having any interest or participation whatsoever in the property of the other. These declarations and admission of fact made by the decedent against his interest are binding upon him, his heirs and successors in interests and third persons as well. 4.DAMAGES; WHEN PLAINTIFF MAY NOT BE SENTENCED TO PAY. The complaint in question contains nothing derogatory to the good name or reputation of the defendants-appellees. On the contrary, it may be surmised from said pleading that the defendant spouse had no knowledge of the alleged previous marriage of the decedent. Moreover, there was no showing that the plaintiffs acted in bad faith. Hence, the latter should not be sentenced to pay damages. 5.SUCCESSION; DECLARATION OF HEIRSHIP; NOT PROPER IN CIVIL CASE. The declaration of heirship is improper in a civil case it being within the exclusive competence of the court in a Special proceedings. D E C I S I O N CONCEPCION, J p: This is an appeal from a decision of the Court of First Instance of Rizal in the above entitled case, which were jointly tried. On May 21, 1952, Gregorio Dy Tam instituted Special Proceeding No. 1537 of said court, entitled "In the matter of the Intestate Estate of the Deceased Rafael Litam". The petition therein filed, dated April 24, 1952, states that petitioner is the son of Rafael Litam, who died in Manila on January 10, 1951; that the deceased was survived by: Li Hong Hap40 years Li Ho37 years Gregorio Dy Tam33 years Henry Litam alias Dy Bun Pho29 years Beatriz Lee Tam alias Lee Giak Ian27 years Elisa Lee Tam alias Lee Giok Bee25 years William Litam alias Li Bun Hua23 years Luis Litam alias Li Bun Lin22 years that the foregoing children of the decedent "by a marriage celebrated in China in 1911 with Sia Khin, now deceased"; that "after the death of Rafael Litam, petitioner and his co-heirs came to know" that the decedent had, during the subsistence of said marriage with Sia Khin, "contracted in 1922 in the Philippines . . . another marriage with Marcosa Rivera, Filipino citizen"; that "the decedent left as his property among others, his one-half (1/2) share valued at P65,000 in the purported conjugal properties between him and Marcosa Rivera, which . . . partnership consisted of the following real property acquired during the marriage between him and Marcosa Rivera, to wit: (1)"Three (3) parcels of land covered by Transfer Certificate of Title No. 1228 of the Registry of Deeds of the province of Pampanga: (2)"One (1) parcel of land covered by Transfer Certificate of Title No. 26011 of the Registry of Deeds of the province of Bulacan." and that the decedent had left neither a will nor debt. Petitioner prayed, therefore, that, after appropriate proceedings, letters of administration be issued to Marcosa Rivera, "the surviving spouse of the decedent". Soon thereafter, Marcosa Rivera filed a counter- petition: (1) substantially denying the alleged marriage of the decedent to Sia Khin, as well as the alleged filiation of the persons named in the petition; (2) asserting that the properties described herein are her paraphernal properties, and that the decedent had left unpaid debts, and certain properties in Bulan and Casiguran, Sorsogon, and in Virac, Catanduanes, apart from shares of stock in a private corporation known by the name of Litam Co., Inc.; and (3) praying that her nephew, Arminio Rivera, be appointed administrator of the intestate estate of the deceased. In due course, the court granted this petition and letters of administration were issued to Arminio Rivera, who assumed his duties as such, and, later, submitted an inventory of the alleged estate of Rafael Litam. Inasmuch as said inventory did not include the properties mentioned in the petition, dated April 24, 1952, of Gregorio Dy Tam, the latter filed, on November 29, 1952, a motion for the removal of Rivera as administrator of the aforementioned estate. This led to a number of incidents hinging on the question whether said properties belong in common to the decedent and Marcosa Rivera or to the latter exclusively. Meanwhile, Remedios R. Espiritu was appointed, in Special Proceeding No. 1709 of the Court of First Instance of Rizal, guardian of Marcosa Rivera, who had been declared incompetent. Thereafter, or on April 20, 1953, Gregorio Dy Tam and his alleged brothers and sisters aforementioned, filed the complaint in Civil Case No. 2071 of the same court, against Remedios R. Espiritu, as guardian of Marcosa Rivera, and Arminio Rivera. In said complaint, plaintiffs therein reproduced substantially the allegations made in the aforementioned petition of Gregorio Dy Tam dated April 24. 1952, except that the properties acquired "during the existence of marriage" between Rafael Litam and Marcosa Rivera "and/or with their joint efforts during the time that they lived as husband and wife" were said to be more than those specified in said petition, namely: "(1)3 parcels of land situated in the Municipality of Macabebe, Province of Pampanga, covered by Transfer Certificate of Title No. 1228 of the Registry of Deeds for the Province of Pampanga, issued on July 29, 1947; "(2)2 Parcels of land, together with all buildings and improvements thereon except those expressly noted in the title as belonging to other persons, situated in the Municipality of Navotas, Province of Rizal, covered by Transfer Certificate of Title No. 35836 of the Registry of Deeds for the Province of Rizal, issued on October 4, 1938; "(3)1 parcel of land situated in the Municipality of Malabon, Province of Rizal, covered by Transfer Certificate of Title No. 23248 of the Registry of Deeds for the Province of Rizal, issued on June 12, 1933; "(4)1 parcel of land situated in Barrio of Kay- Badia, Municipality of Obando, Province of Bulacan, covered by Transfer Certificate of Title No. 21809 of the Registry of Deeds for the Province of Bulacan, issued on May 25, 1939; "(5)1 parcel of land (plan psu-93067, swo- 16049) situated in Barrio of Quibadia, Municipality of Obando, Province of Bulacan, covered by Transfer Certificate of Title No. 26011 of the Registry of Deeds for the Province of Bulacan, issued on April 9, 1943; "Other properties are located in Bataan province. "All properties total an assessed value of approximately P150,000.00." In said complaint, plaintiffs prayed that the judgment be rendered: "(1)declaring the aforesaid properties as belonging to the conjugal partnership or tenancy in common which existed between the deceased Rafael Litam and the incompetent Marcosa Rivera; "(2)ordering the defendants to deliver the aforesaid properties to the administration of the estate of the deceased Rafael Litam (Rule 75, section 2, Rules of Court); "(3)ordering the said defendants further to render an accounting of the fruits they collected from the aforesaid properties and to deliver the same to the administration of the estate of the deceased Rafael Litam;
"(4)ordering the said defendants to pay the administration of the estate of the deceased Rafael Litam damages in double the value of the fruits mentioned in the preceding paragraph which they embezzled; and "(5)ordering the defendants to pay the costs. "The plaintiffs further pray for such other remedy as the Court may deem just and equitable in the premises." In her answer to the complaint, Marcosa Rivera reiterated, in effect, the allegations in her counter-petition, dated July 12, 1952, in Special Proceeding No. 1537, and set up some affirmative and special defenses, as well as a counter-claim for attorney's fees and damages in the aggregate sum of P110,000.00. Owning to the identity of the issue raised in said Civil Case No. 2071 and in the aforementioned incidents in Special Proceeding No. 1537, both were jointly heard. Later on, the court rendered a decision. "(1)Dismissing Civil Case No. 2071, with costs against the plaintiffs; "(2)Sentencing the plaintiff in Civil Case No. 2071, under the defendants' counterclaim, to pay jointly and severally each of the defendants the sum of P5,000.00 as actual damages and P25,000.00 as moral damages; "(3)Declaring that the properties in question, namely: the fishponds, consisting of three parcels, situated in Macabebe, Pampanga, with Transfer certificate of Title No. 1228 of the land records of Pampanga, one-half undivided portion of the fishponds, consisting of two parcels, situated in Navotas, Rizal, covered by Transfer Certificate of Title No. 35836, the parcel of land with the improvements thereon situated in Malabon, Rizal, covered by Transfer Certificate of Title No. 23248, both of the land records of Rizal, and the fishponds, consisting of two parcels, situated in Obando, Bulacan, covered by Transfer Certificates of Title Nos. 21809 and 26011, both of the land records of Bulacan, are the exclusive, separate and paraphernal properties of Marcosa Rivera; and "(4)Declaring that the plaintiffs in Civil Case No. 2071 (who are the same persons alleged to be children of Rafael Litam in the petition, dated April 24, 1952, filed by the petitioner in Sp. Proc. No. 1537) are not the children of the deceased Rafael Litam, and that his only heir is his surviving wife, Marcosa Rivera." The two (2) Cases are now before us on appeal taken by the petitioner in Special Proceeding No. 1537 and the plaintiffs in Civil Case No. 2071. The issues for determination are: (1) Are appellants the legitimate children of Rafael Litam? (2) Is Marcosa Rivera the exclusive owner of the properties in question, or do the same constitute a common property of her and the decedent? The first issue hinges on whether Rafael Litam and Sia Khin were married in 1911, and whether Rafael Litam is the father of appellants herein. In this connection, the lower court had the following to say: ". . . the evidence weikhs very heavily in favor of the theory of the defendants in Civil Case No. 2071 to the effect that the said deceased Rafael Litam was not married to Sia Khin and that plaintiffs, are not the children of the said decedent. The plaintiffs in Civil Case No. 2071 and the petitioner in Sp. Proc. No. 1537 have utterly failed to prove their alleged status as children of Rafael Litam by a marriage with Sia Khin. "It appears from the evidence presented by the defendants in civil Case No. 2071 and the administrator and the counter-petitioner in Sp. Proc. No. 1537 that there was no such marriage between the deceased Rafael Litam and Sia Khin and that the plaintiffs named in Civil Case No. 2071 are not children of said deceased. The various official and public documents executed by Rafael Litam himself convincingly show that he had not contracted any marriage with any person other than Marcosa Rivera, and that he had no child. In the marriage certificate, (Exhibit 55) it was clearly stated that he was single when he married Marcosa Rivera on June 10, 1922. In the sworn application for alien certificate of registration dated July 7, 1950 (Exhibit 1), Rafael Litam unequivocably declared under oath that he had no child. In the several other documents executed by him and presented in evidence, (Exhibits 19, 21, 22, 23, 46 and 46-A) Rafael Litam had consistently referred to Marcosa Rivera alone as his wife; he had never mentioned of Sia Khin as his wife, or of his alleged children. The witnesses presented by the defendants in Civil Case No. 2071 and the administrator and counter petitioner in Sp. Proc. No. 1537 positively testified to the effect that they know that Rafael Litam did not have any child, nor was he married with Sia Khin. An impartial and disinterested witness, Felipe Cruz, likewise testified that he has known Rafael Litam even before his marriage with Marcosa Rivera and that said Rafael Litam did not have any child. "On the other hand, the plaintiffs in Civil Case No. 2071 and the petitioner in Sp. Proc. No. 1537 presented in support of their theory the testimony of their lone witness, Luis Litam, and certain documentary evidence. It is noteworthy that the said plaintiffs and said petitioner did not present in evidence the marriage certificate of Rafael Litam and Sia Khin, which in the opinion of the Court, is the competent and best evidence of the alleged marriage between them. No explanation has been given for the non-presentation of said marriage certificate, nor has there been any showing of its loss. Neither have said plaintiffs and said petitioner presented any competent secondary evidence of the supposed marriage. "The testimony of the lone witness, Luis Litam, cannot be given any credence and value at all. His testimony is mostly hearsay, as according to him, he was merely informed by Rafael Litam of the latter's supposed marriage with Sia Khin. His testimony is uncorroborated. The court noticed that the said witness was only 22 years old when he testified, and it appears in the petition filed by the petitioner in Sp. Proc. No. 1537 that said witness is the youngest of all the alleged eight children of Rafael Litam. The Court is at a loss to understand why one or some of the older alleged children of Rafael Litam were not presented as witnesses in view of the unreliable testimony of Luis Litam, and considering that older persons are better qualified to testify on the matters sought to be proved which allegedly happened a long time ago. "The birth certificate presented by the plaintiff in Civil Case No. 2071 and petitioner in Sp. Proc. No. 1537 cannot be given even little consideration, because the name of the father of the children appearing therein is not Rafael Litam, but different persons. It is very significant to note that the names of the father of the persons appearing in said birth certificates are Dy Tham, Li Tam, Lee Tham, Rafael Dy Tam, and that said persons were born in different places, some in Amoy, China, another Fukien, China, and the other in Limtao, China. It also appears in said birth certificates that the children's mothers named therein are different, some being Sia Khim, others Sia Quien, the other Sia Khun, and still another Sia Kian. These documents do not establish the identity of the deceased Rafael Litam and the persons named therein as father. Besides, it does not appear in the said certificates of birth that Rafael Litam had in any manner intervened in the preparation and filing thereof. "The other documentary evidence presented by the said plaintiffs and petitioner are entirely immaterial and highly insufficient to prove the alleged marriage between the deceased Rafael Litam and Sia Khin and the alleged statue of the plaintiffs as children of said decedent. "It is, therefore, the finding of this Court that the plaintiffs named in Civil Case No. 2071 are not heirs of the said decedent, his only heir being his surviving wife, Marcosa Rivera." (Emphasis ours.) The findings of fact thus made in the decision appealed from are borne out by the records and the conclusion drawn from said facts is, to our mind, substantially correct. Appellants' evidence on this point consists of the testimony of appellant Li Bun Lin, who said that he is, also known as Luis Litam; that his co-appellants are his brothers and sisters; that their parents are the decedent and Sia Khin, who were married in China in 1911; and that Sia Khin died in Manila during the Japanese occupation. He likewise, identified several pictures, marked Exhibits I to S, which were claimed to be family portraits, but the lower court rejected their admission in evidence. Although we agree with herein appellants that this was an error, it is clear to us that said pictures and the testimony of Luis Litam, as well as the other evidence adverted to in the above-quoted portion of the decision appealed from, are far from sufficient to outweigh, or even offset, the evidence in favor of the appellees. It should be noted that the decedent had admittedly married Marcosa Rivera in 1922. In the very petition of appellant Gregorio Dy Tam, in Special Proceeding No. 1537, dated April 24, 1952, he alleged that Marcosa Rivera is "the surviving spouse of the decedent". In their complaint in Civil Case No. 2071, appellants specifically admitted and averred "the existence of the marriage between said Rafael Litam and Marcosa Rivera" which would have been void ab initio, and, hence, inexistent legally, if appellants' pretense were true or they believed it to be so and that they had "lived as husband and wife". Again, although Gregorio Dy Tam, asserted, in his aforementioned petition, that he and his co-heirs "came to know" about the marriage of the decedent and Marcosa Rivera "after the death of Rafael Litam", the very testimony of Li Bun Lin, as witness for the appellants, show, beyond doubt, that said appellants knew, during the lifetime of Rafael Litam that he and Marcosa Rivera were living in Malabon, Rizal, openly and publicly, as husband and wife, and regarded her as his lawful wife. Indeed, in the course of his testimony, said Li Bun Lin alluded to her as his "mother". In other words, aside from the circumstance that the wedding and marital life of Marcosa Rivera and Rafael Litam is undisputed, it is, also, an established fact that they had the general reputation of being legally married and were so regarded by the community and by appellants herein, during the lifetime of Rafael Litam.
Upon the other hand, appellants maintain, in effect, that Rafael Litam was guilty of the crime of bigamy; that he had, likewise, willfully and maliciously falsified public and official documents; and that, although appellants and Sia Khin were living in Manila and Marcosa Rivera whom appellants knew resided only a few kilometers away, in Malabon, Rizal where Rafael Litam returned daily, after attending to his business in Manila, the decedent had succeeded, for about thirty (30) years, in keeping each party in complete ignorance of the nature of his alleged relations with the other. Apart from the highly improbable nature of the last part of appellants' pretense, it is obvious that the same can not be sustained unless the evidence in support thereof is of the strongest possible kind, not only because it entails the commission by Rafael Litam of grave criminal offenses which are derogatory to his honor, but, also, because death has sealed his lips, thus depriving him of the most effective means of defense. The proof for appellants herein does not satisfy such requirement. As regards the title to the properties in dispute, the evidence thereon was analyzed by the lower court in the following language: "It has been established by the evidence that the properties in question were bought by Marcosa Rivera with her separate and exclusive money. The fishponds situated in Obando, Bulacan, covered by Transfer Certificate of Title Nos. 21809 and 26011, the one-half (1/2) undivided portion of the fishponds situated in Navotas, Rizal with Transfer Certificate of Title No. 35836, and the property situated in Hulong- Duhat, Malabon, Rizal, with Transfer Certificate of Title No. 23248 were all purchased by Marcosa Rivera with the money she earned and accumulated while she was still single; while the fishponds situated in Macabebe, Pampanga with Transfer Certificate of Title No. 1228 were purchased by her with the money she inherited from her late sister, Rafaela Rivera and with the money she received from the proceeds of the sale of the pieces of jewelry she inherited from her father Eduardo Rivera and her sister Rafaela Rivera. The properties in question, having been bought by Marcosa Rivera, although during her marriage with Rafael Litam, with her exclusive and separate money, said properties are undeniably her paraphernal properties. (Art. 1396, Spanish Civil Code, which is the same as Art. 148 of the Civil Code of the Phil.) "Great importance should be given to the documentary evidence, vis: Exhibits 21, 22, 23, 19, 46 and 46-A, presented by the defendants, in Civil Case No. 2071 and the administrator and counter- petitioner in Sp. Proc. No. 1537, which prove beyond peradventure of any doubt that the properties in question are the paraphernal properties of Marcosa Rivera. In Exhibit 21, Rafael Litam unequivocably declared under his oath that the money paid by Marcosa Rivera for the fishponds in Obando, Bulacan was her exclusive and separate money which was earned by her while she was still single. In Exhibits 22 and 23, both dated June 16, 1947, same Rafael Litam, also under oath, acknowledge the fact that the sums of P13,000.00 and P10,000.00 loaned by Marcosa Rivera to the spouses Catalino Pascual and Juliana Pascual, and to Juliana Pascual, respectively, are the separate and exclusive money of Marcosa Rivera, in which money Rafael Litam had no interest whatsoever. In Exhibit 19, same Rafael Litam acknowledged the fact that he had obtained, before the outbreak of the second world war, from Marcosa Rivera the sum of P135,000.00 which belongs exclusively to the latter, and that after the liberation, or more specifically, on January 4, 1946, he stole from Marcosa Rivera the further sum of P62,000.00, also belonging exclusively to the latter, which amounts, totalling P197,000.00, exclusive of interests, have not, according to the evidence, been paid to her up to the present. In Exhibits 46 and 46-A, it was acknowledged by Rafael Litam that he had not given any money to his wife, Marcosa Rivera, and that they have actually adopted a system of separation of property, each of them not having any interest or participation whatsoever in the property of the other. These declarations and admission of fact made by Rafael Litam against his interest are binding upon him, his heirs and successors in interests and third persons as well. (Secs. 7 & 29, Rule 123, Rules of Court). "The finding of this Court that the properties in question are paraphernal properties of Marcosa Rivera, having been bought by her with her separate and exclusive money, is further strengthened by the fact that, as it is clearly disclosed by the evidence when Marcosa Rivera married Rafael Litam in 1922, she was already rich, she having already earned and saved money as 'consignataria' while she was still single. It also appears that she was born of a rich family, her father, Eduardo Rivera, being the owner of fishponds, commercial and residential lands and buildings, (Exhibits 5 to 18, inclusive), with an assessed value of around P150,000.00 (Exhibits 25 and 42, inclusive), now worth approximately a million pesos, and most of which properties as may be seen from the certificates of title were acquired by him way back in the years 1916 and 1919. When Eduardo Rivera died on February 5, 1942, his cash and jewelry were inherited by his eldest daughter, Rafaela Rivera, and when the latter died single on July 2, 1943, Marcosa Rivera inherited her cash amounting to P150,000.00, Philippine currency, and and her pieces of jewelry. It is with this amount and with the proceeds of the sale of some of said pieces of jewelry that Marcosa Rivera purchased the fishponds in question, situated in Macabebe, Pampanga. "On the other hand, it appears from the evidence that when Rafael Litam was on June 10, 1922, married to Marcosa Rivera, he was poor. He had to borrow from Marcosa Rivera, the sum of P135,000.00 belonging exclusively to her before the outbreak of the war, and to steal from her further sum of P62,000.00 after the liberation (Exhibit 10). The said amounts totalling P197,000.00, exclusive of the stipulated interests, according to the evidence, have not been paid to Marcosa Rivera up to the present. Rafael Litam did not contribute any amount of money or labor to the properties in question, as he and Marcosa Rivera maintained an absolute separation of property (Exhibits 46 and 46-A). Besides, during his lifetime he used to go his office in Manila everyday. "Another circumstance which clearly proves that the properties in question belong exclusively to Marcosa Rivera is the established fact that before she became incompetent sometime in the early part of the year, 1953, she had been administering said properties, to the exclusion of Rafael Litam. In fact, as may be seen from the very documentary evidence (Exhibit 'EE', same as Nxh. 50) presented by the plaintiffs in Civil Case No. 2071 themselves and petitioner in Sp. Proc. No. 1537, she alone leased the properties in question, situated in Macabebe, Pampanga, and the corresponding lease contract, dated July 13, 1948 was signed by her as lessor and by Rafael Suarez, Jr. as lessees. Furthermore, the properties in question have been declared in the name of Marcosa Rivera alone, and she alone pays the real estate taxes due thereon. (Exhibits 43, 44 & 45.) "Further strong proofs that the properties in question are the paraphernal properties of Marcosa Rivera, are the very Torrens Titles covering said properties. All the said properties are registered in the name of 'Marcosa Rivera, married to Rafael Litam.' This circumstance indicates that the properties in question belong to the registered owner, Marcosa Rivera, as her paraphernal properties, for if they were conjugal, the titles covering the same should have been issued in the names of Rafael Litam and Marcosa Rivera. The words 'married to Rafael Litam' written after the name of Marcosa Rivera, in each of the above mentioned titles are merely descriptive of the civil status of Marcosa Rivera, the registered owner of the properties covered by said titles. "On the other hand, the evidence presented by the plaintiffs in Civil Case No. 2071 and petitioner in Sp. Proc. No. 1537 in support of their contention that the properties in question are conjugal is, in the mind of the Court, very weak, unreliable, and mostly incompetent, and cannot overcome the clear, convincing and almost conclusive proofs presented by the opposite party. Scant or no consideration at all could be given by the Court to the immaterial, incompetent and unbelievable testimonies of the witnesses presented by the said plaintiffs and petitioners. The disputable presumption of law that the properties acquired during the marriage are conjugal properties, upon which legal presumption said plaintiffs and petitioner mainly rely has been decisively overcome by the overwhelming preponderance of evidence adduced in these cases that the properties in question are the paraphernal properties of Marcosa Rivera." (Emphasis ours.) Appellants' counsel assail the decision appealed from upon the ground that the lower court had been partial to the appellees and had not accorded to the appellants a fair and just hearing. As above pointed out, His Honor the trial Judge could have been, and should have been, more liberal in the reception of evidence. Appellants' witnesses (Li Bun Lin, Dominador Gadi, Benigno Musni and Rafael B. Suarez) should have been allowed to testify on the alleged title of Rafael Litam to certain properties and on his alleged reasons for the language used in the public and official documents relied upon by the appellees. However, it is apparent to us that said evidence cannot affect the decision in these cases. The evidenciary value of the testimony of said witnesses would have depended mainly upon their individual appraisal of certain facts, upon their respectiveinferences therefrom and their biases or view points, and upon a number of other factors affecting their credibility. At best, said testimony could not possibly prevail over the repeated admissions made by the decedent against his own interest in Exhibits 19, 21, 22, 23, 46 and 46-A (adverted to in the abovequoted portion of the decision appealed from), which admissions are corroborated by the fact that the deceased father of Marcosa Rivera was well to do; that aside from her share in his estate, she had, likewise, inherited from a sister who died single and without issue; that the lands in dispute were registered, and some were, also, leased, in her name, instead of hers and that of the decedent; and that the latter lived in her house in Malabon, Rizal.
Appellants contend that the transactions covered by said Exhibits 19, 21 to 23 and 46 and 46-A, as well as by the other deeds referred to in the decision appealed from, were caused to be made in the name of Marcosa Rivera, to the exclusion of her husband, in order to evade the constitutional provision disqualifying foreigners from the acquisition of private agricultural lands, except by succession. Apart from being based, solely, upon a surmise, without any evidentiary support, this pretense is refuted by the fact that said residential property in Hulong-Duhat, Malabon, Rizal, was acquired on April 12, 1933, or prior to the adoption of our Constitution (see Exhibits Z and AA). Her transactions subsequently thereto, merely followed, therefore, the pattern of her activities before the drafting of said fundamental law. This notwithstanding, we do not believe that appellants should be sentenced to pay damages. The petition of Gregorio Dy Tam in Special Proceeding No. 1537 and the complaint in Civil Case No. 2071 contain nothing derogatory to the good name or reputation of the herein appellees. On the contrary, it may be surmised from said pleadings that Marcosa Rivera had no knowledge of the alleged previous marriage of the decedent to Sia Khin. Moreover, the records do not show that appellants have acted in bad faith. Likewise, we are of the opinion that the lower court should not have declared, in the decision appealed from, that Marcosa Rivera is the only heir of the decedent, for such declaration is improper in Civil Case No. 2071, it being within the exclusive competence of the court in Special Proceeding No. 1537, in which it is not as yet, in issue, and, will not be, ordinarily, in issue until the presentation of the project of partition. Wherefore, with the elimination of the award for damages in favor of the herein appellees, and of said declaration of heirship, the decision appealed from is hereby affirmed in all other respects, with costs against the appellants. It is so ordered.
FIRST DIVISION [G.R. No. L-57757. August 31, 1987.] PHILIPPINE NATIONAL BANK, petitioner, vs. THE HONORABLE COURT OF APPEALS, PRAGMACIO VITUG AND MAXIMO VITUG, respondents. SYLLABUS 1. LAND TITLES AND DEEDS; TORRENS TITLE; A PERSON DEALING WITH REGISTERED LAND HAS A RIGHT TO RELY UPON THE FACE OF THE TITLE. The well-known rule in this jurisdiction is that a person dealing with a registered land has a right to rely upon the face of the torrens certificate of title and to dispense with the need of inquiring further, except when the party concerned has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry. A torrens title concludes all controversy over ownership of the land covered by a final degree of registration. Once the title is registered the owner may rest assured without the necessity of stepping into the portals of the court or sitting in the mirador de su casa to avoid the possibility of losing his land. 2.CIVIL LAW; PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE; CONJUGAL PARTNERSHIP OF GAINS; PRESUMPTION OF CONJUGALITY WILL NOT PREVAIL WHEN THE TITLE IS IN THE NAME OF ONLY ONE SPOUSE AND RIGHTS OF INNOCENT THIRD PARTIES ARE INVOLVED. The presumption of conjugality in Article 160 of the Civil Code applies to property acquired during the lifetime of the husband and wife. In this case, it appears on the face of the title that the properties were acquired by Donata Montemayor when she was already a widow. When the property is registered in the name of a spouse only and there is no showing as to when the property was acquired by said spouse, this is an indication that the property belongs exclusively to said spouse. And this presumption under Article 160 of the Civil Code cannot prevail when the title is in the name of only one spouse and the rights of innocent third parties are involved. 3.ID.; CONTRACTS; MORTGAGE; MORTGAGEE IN GOOD FAITH. The PNB had a reason to rely on what appears on the certificates of title of the properties mortgaged. For all legal purposes, the PNB is a mortgagee in good faith for at the time the mortgages covering said properties were constituted the PNB was not aware to any flaw of the title of the mortgagor. 4.REMEDIAL LAW; CIVIL PROCEDURE; ACTION FOR RECOVERY OF PROPERTY AND PARTITION, ACTION IN PERSONAM. Although actions for recovery of real property and for partition are real actions, however, they are actions in personam that bind only the particular individuals who are parties thereto. The PNB not being a party in said cases is not bound by the said decisions. Nor does it appear that the PNB was aware of the said decisions when it extended the above described mortgage loans. Indeed, if the PNB knew of the conjugal nature of said properties it would not have approved the mortgage applications covering said properties of Donata Montemayor without requiring the consent of all the other heirs or co-owners thereof. Moreover, when said properties were sold at public auction, the PNB was a purchaser for value in good faith so its right thereto is beyond question. 5.CIVIL LAW; LACHES; FAILURE TO ASSERT RIGHTS WITHIN 17 YEARS BARS ACTION. Pragmacio and Maximo Vitug are now estopped from questioning the title of Donata Montemayor to the said properties. They never raised the conjugal nature of the property nor took issue as to the ownership of their mother, Donata Montemayor, over the same. Indeed private respondents were among the defendants in said two cases wherein in their answers to the complaint they asserted that the properties in question are paraphernal properties belonging exclusively to Donata Montemayor and are not conjugal in nature. Thus they leased the properties from their mother Donata Montemayor for many years knowing her to be the owner. They were in possession of the property for a long time and they knew that the same were mortgaged by their mother to the PNB and thereafter were sold at public auction, but they did not do anything. It is only after 17 years that they remembered to assert their rights. Certainly, the are guilty of laches. D E C I S I O N GANCAYCO, J p: Does the presumption of conjugality of properties acquired by the spouses during coverture provided for in Article 160 of the Civil Code apply to property covered by a Torrens certificate of title in the name of the widow? This is the issue posed in this petition to review on certiorari of the decision of the Court of Appeals in CA-G.R. No. 60903 which is an action for reconveyance and damages. * On November 28, 1952, Donata Montemayor, through her son, Salvador M. Vitug, mortgaged to the Philippine National Bank (PNB) several parcels of land covered by Transfer Certificate of Title (TCT) No. 2289 Pampanga to guarantee the loan granted by the PNB to Salvador Jaramilla and Pedro Bacani in the amount of P40,900.00 which was duly registered in the Office of the Register of Deeds of Pampanga. 1 On December 1, 1963, Donata Montemayor also mortgaged in favor of PNB certain properties covered by TCT Nos. 2887 and 2888 Pampanga to guarantee the payment of the loan account of her son Salvador Vitug in the amount of P35,200.00, which mortgage was duly registered in the Register of Deeds of Pampanga. 2 The above-mentioned Transfer Certificates of Titles covering said properties were all in the name of Donata Montemayor, of legal age, Filipino, widow and a resident of Lubao, Pampanga at the time they were mortgaged to PNB 3 and were free from all liens and encumbrances. 4 Salvador Vitug failed to pay his account so the bank foreclosed the mortgaged properties covered by TCT Nos. 2887 and 2888. They were sold at public auction on May 20, 1968 in which the PNB was the highest bidder. The titles thereto were thereafter consolidated in the name of PNB. cdrep Likewise, Salvador Jaramilla and Pedro Bacani failed to settle their accounts with the PNB so the latter foreclosed the properties covered by TCT No. 2889 which were sold at public auction and likewise PNB was the buyer thereof. On August 30, 1968, a certificate of sale was issued by the Register of Deeds covering said properties in favor of the PNB. When the title of the PNB was consolidated a new title was issued in its name. 5 On September 2, 1969, the PNB sold the properties covered by TCT Nos. 2887 and 2888 Pampanga to Jesus M. Vitug, Anunciacion V. de Guzman, Prudencia V. Fajardo, Salvador Vitug and Aurora V. Gutierrez in those names the corresponding titles were issued. 6 During the lifetime of Clodualdo Vitug he married two times. His first wife was Gervacia Flores with whom he had 3 children, namely, Victor, Lucina and Julio all surnamed Vitug. Victor now dead is survived by his 6 children: Leonardo, Juan, Candido, Francisco and Donaciano, all surnamed Vitug. Juan Vitug is also dead and is survived by his only daughter Florencia Vitug. The second wife of Clodualdo Vitug was Donata Montemayor with whom he had 8 children, namely, Pragmacio, Maximo, Jesus, Salvador, Prudencio and Anunciacion, all surnamed Vitug, the late Enrique Vitug represented by his wife Natalia Laquian, and the late Francisco Vitug who is survived by 11 children, namely, Antonio, Francisco, Aurora, Pedro, Honorio, Corazon, Anselmo, Benigno, Eligio, Jesus and Luz. Clodualdo Vitug died intestate on May 20, 1929 so his estate was settled and distributed in Special Proceeding No. 422 in the Court of First Instance of Pampanga wherein Donata Montemayor was the Administratrix. 7 Meanwhile, on May 12, 1958, Donata Montemayor executed a contract of lease of Lot No. 24, which is covered by TCT No. 2887-R in favor of her children Pragmacio and Maximo both surnamed Vitug. This lease was extended on August 31, 1963. By virtue of a general power of attorney executed by Donata Montemayor on Sept. 19, 1966 in favor of Pragmacio Vitug, the latter executed a contract of lease on Sept. 19, 1967 of the said lot in favor of Maximo Vitug. 8 On March 21, 1970 Pragmacio Vitug and Maximo Vitug filed an action for partition and reconveyance with damages in the Court of First Instance of Pampanga against Marcelo Mendiola, special administrator of the intestate estate of Donata Montemayor who died earlier, Jesus Vitug, Sr., Salvador, Natalia, Prudencia, Anunciacion, all surnamed Vitug, Antonio, Francisco, Aurora, Pedro, Honorio, Corazon, Anselmo, Benigno, Eligio, Jesus and Luz, all surnamed Fajardo and the PNB. The subject of the action is 30 parcels of land which they claim to be the conjugal property of the spouses Donata Montemayor and Clodualdo Vitug of which they claim a share of 2/11 of 1/2 thereof. They assailed the mortgage to the PNB and the public auction of the properties as null and void. They invoked the case of Vitug vs. Montemayor, L-5297 decided by this Court on Oct. 20, 1953 which is an action for partition and liquidation of the said 30 parcels of land wherein the properties were found to be conjugal in nature. In a decision of Sept. 15, 1975, the lower court dismissed the complaint with costs against the plaintiffs and ordered them to pay attorney's fees of P5,000.00 to the defendant's counsel. Plaintiffs then interposed an appeal to the Court of Appeals, wherein in due course a decision was rendered on May 20, 1981, the dispositive part of which reads as follows: prcd "WHEREFORE, in the light of the foregoing, the decision appealed from is hereby reversed and set aside, and another one entered in accordance with the tenor of the prayer of appellant's complaint with the modification that the sale at public auction of the 22 parcels be considered valid with respect to the 1/2 thereof. No costs." Hence the herein petition for certiorari filed by the PNB raising the following assignments of error: "I THE RESPONDENT COURT OF APPEALS ERRED IN APPLYING TO THE CASE AT BAR THE RULING OF THIS HONORABLE SUPREME COURT IN FLORENCIA VITUG VS. DONATA MONTEMAYOR, ET AL., 91 PHIL. 286 (1953) BECAUSE:
A.BETWEEN A PROVISION OF A SPECIAL LAW AND THE JUDICIAL INTERPRETATION AND/OR APPLICATION OF A PROVISION OF A GENERAL LAW, THE FORMER PREVAILS. B.THE DOCTRINE OF STARE DECISIS IS NOT A MECHANICAL FORMULA OF ADHERENCE. C.PNB WAS NOT A PARTY, AND HAD NO KNOWLEDGE OF THE ABOVECITED CASE. D.SIMILARLY, PRAGMACIO VITUG AND MAXIMO VITUG WERE NOT PARTIES IN SAID CASE. II THE RESPONDENT COURT OF APPEALS ERRED IN NOT RECOGNIZING THE CONCLUSIVENESS OF THE CERTIFICATE OF TITLE, AS PROVIDED IN ACT 496, AS AMENDED (THE LAND REGISTRATION). III THE RESPONDENT COURT OF APPEALS ERRED IN IGNORING THE CONCLUSIVENESS OF OWNERSHIP OF DONATA MONTEMAYOR OVER THE PROPERTIES WHICH WERE REGISTERED EXCLUSIVELY IN HER NAME WHEN PRIVATE RESPONDENTS (PRAGMACIO VITUG AND MAXIMO VITUG), AS LESSEES, ENTERED INTO A CONTRACT OF LEASE WITH DONATA MONTEMAYOR AS THE OWNER-LESSOR. IV THE RESPONDENT COURT OF APPEALS ERRED IN CONCLUDING THAT PNB WAS A MORTGAGEE IN BAD FAITH." The petition is impressed with merit. When the subject properties were mortgaged to the PNB they were registered in the name of Donata Montemayor, widow. Relying on the torrens certificate of title covering said properties the mortgage loan applications of Donata were granted by the PNB and the mortgages were duly constituted and registered in the office of the Register of Deeds. In processing the loan applications of Donata Montemayor, the PNB had the right to rely on what appears in the certificates of title and no more. On its face the properties are owned by Donata Montemayor, a widow. The PNB had no reason to doubt nor question the status of said registered owner and her ownership thereof. Indeed, there are no liens and encumbrances covering the same. LibLex The well-known rule in this jurisdiction is that a person dealing with a registered land has a right to rely upon the face of the torrens certificate of title and to dispense with the need of inquiring further, except when the party concerned has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry. 9 A torrens title concludes all controversy over ownership of the land covered by a final degree of registration. 10 Once the title is registered the owner may rest assured without the necessity of stepping into the portals of the court or sitting in the mirador de su casa to avoid the possibility of losing his land. 11 Article 160 of the Civil Code provides as follows: "Art. 160.All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife." The presumption applies to property acquired during the lifetime of the husband and wife. In this case, it appears on the face of the title that the properties were acquired by Donata Montemayor when she was already a widow. When the property is registered in the name of a spouse only and there is no showing as to when the property was acquired by said spouse, this is an indication that the property belongs exclusively to said spouse. 12 And this presumption under Article 160 of the Civil Code cannot prevail when the title is in the name of only one spouse and the rights of innocent third parties are involved. 13 The PNB had a reason to rely on what appears on the certificates of title of the properties mortgaged. For all legal purposes, the PNB is a mortgagee in good faith for at the time the mortgages covering said properties were constituted the PNB was not aware to any flaw of the title of the mortgagor. 14 True it is that in the earlier cases decided by this Court, namely Vitug vs. Montemayor decided on May 15, 1952, which is an action for recovery of possession of a share in said parcels of land, 15 and in the subsequent action for partition between the same parties decided on Oct. 20, 1953, 16 this court found the 30 parcels of land in question to be conjugal in nature and awarded the corresponding share to the property of Florencia Vitug, an heir of the late Clodualdo Vitug from the first marriage. In said cases this Court affirmed the decision of the lower court. In the dispositive part of the decision of the trial court it made the observation that "but from the conduct of Clodualdo Vitug and Donata Montemayor during the existence of their marital life, the inference is clear that Clodualdo had the unequivocal intention of transmitting the full ownership of the 30 parcels of land to his wife Donata Montemayor, thus considering the 1/2 of the funds of the conjugal property so advanced for the purchase of said parcels of land as reimbursible to the estate of Clodualdo Vitug on his death." 17 That must be the reason why the property was registered in the name of Donata Montemayor as widow after the death of Clodualdo Vitug. 18 At any rate, although actions for recovery of real property and for partition are real actions, however, they are actions in personam that bind only the particular individuals who are parties thereto. 19 The PNB not being a party in said cases is not bound by the said decisions. Nor does it appear that the PNB was aware of the said decisions when it extended the above described mortgage loans. Indeed, if the PNB knew of the conjugal nature of said properties it would not have approved the mortgage applications covering said properties of Donata Montemayor without requiring the consent of all the other heirs or co-owners thereof. Moreover, when said properties were sold at public auction, the PNB was a purchaser for value in good faith so its right thereto is beyond question. 20 Pragmacio and Maximo Vitug are now estopped from questioning the title of Donata Montemayor to the said properties. They never raised the conjugal nature of the property nor took issue as to the ownership of their mother, Donata Montemayor, over the same. Indeed private respondents were among the defendants in said two cases wherein in their answers to the complaint they asserted that the properties in question are paraphernal properties belonging exclusively to Donata Montemayor and are not conjugal in nature. 21 Thus they leased the properties from their mother Donata Montemayor for many years knowing her to be the owner. They were in possession of the property for a long time and they knew that the same were mortgaged by their mother to the PNB and thereafter were sold at public auction, but they did not do anything. 22 It is only after 17 years that they remembered to assert their rights. Certainly, the are guilty of laches. 23 Moreover, as correctly held by the lower court. Pragmacio and Maximo Vitug as occupants and lessees of the property in question cannot now dispute the ownership of their mother over the same who was their lessor. 24 WHEREFORE, the subject decision of the respondent Court of Appeals is hereby REVERSED and set aside and another decision is hereby rendered DISMISSING the complaint and ordering private respondents to pay attorney's fees and expenses of litigation to petitioner PNB in the amount of P20,000.00 and the costs of the suit. SO ORDERED.