SECOND DIVISION registration, covering a parcel of

land identified as Lot 9039 of

[G.R. No. 186961 : February 20, Cagayan Cadastre, situated in El
2012] Salvador, Misamis Oriental and
with an area of 9,794 square
REPUBLIC OF THE meters. The respondent purchased
PHILIPPINES, PETITIONER, the portion of the subject property
VS. EAST SILVERLANE REALTY consisting of 4,708 square meters
DEVELOPMENT (Area A) from Francisca Oco
CORPORATION, RESPONDENT. pursuant to a Deed of Absolute
Sale dated November 27, 1990 and
DECISION the remaining portion consisting of
5,086 square meters (Area B) from
REYES, J.: Rosario U. Tan Lim, Nemesia Tan
and Mariano U. Tan pursuant to a
This Court is urged to review and Deed of Partial Partition with Deed
set aside the July 31, 2008 of Absolute Sale dated April 11,
Decision[1] and February 20, 2009 1991. It was claimed that the
Resolution[2] of the Court of respondents predecessors-in-
Appeals (CA) in CA-G.R. CV No. interest had been in open,
00143. In its July 31, 2008 notorious, continuous and
Decision, the CA affirmed the exclusive possession of the subject
August 27, 2004 Decision of the property since June 12, 1945.
Regional Trial Court (RTC), Branch
40 of Cagayan De Oro City. The After hearing the same on the
dispositive portion thereof merits, the RTC issued on August
states:cralaw 27, 2004 a Decision, granting the
respondents petition for
WHEREFORE, premises foregoing, registration of the land in
the instant appeal is question, thus:
hereby DISMISSED for lack of
merit. The assailed Decision dated ACCORDINGLY, finding the
August 27, 2004 is application meritorious, and
hereby AFFIRMED in toto. pursuant to applicable law and
jurisprudence on the matter,
SO ORDERED.[3] particularly the provisions of P.D.
1529, judgment is hereby rendered
granting the instant application.
In its February 20, 2009
The Land Registration Authority is
Resolution, the CA denied the
hereby ordered to issue a decree
petitioners August 29, 2008
in the name of the applicant East
Motion for Reconsideration.[4]
Silverlane Realty Development
The Factual Antecedents Corporation covering the parcel of
land, Lot 9039, Cad 237, having an
The respondent filed with the RTC area of 9,794 square meters
an application for land covered by the two (2) tax
declarations subject of this
petition. Based on the decree, the
Register of Deeds for the Province
of Misamis Oriental is hereby
directed to issue an original
certificate of title in the name of
the applicant covering the land
subject matter of this application.[5]
On appeal by the petitioner, the CA
affirmed the RTCs August 27,
2004 Decision. In its July 31, 2008
Decision,[6] the CA found no merit
in the petitioners appeal, holding
that:
It is a settled rule that an
application for land registration
must conform to three requisites:
(1) the land is alienable public
land; (2) the applicants open,
continuous, exclusive and
notorious possession and
occupation thereof must be since
June 12, 1945, or earlier; and (3) it
is a bona fide claim of ownership.
In the case at bench, petitioner-
appellee has met all the
requirements. Anent the first
requirement, both the report and
certification issued by the
Department of Environment and
Natural Resources (DENR) shows
that the subject land was within
the alienable and disposable zone
classified under BF Project [N]o. 8
Blk. I, L.C. Map [N]o. 585 and was
released and certified as such on
December 31, 1925.
Indubitably, both the DENR
certification and report constitute
a positive government act, an
administrative action, validly
classifying the land in question. It
is a settled rule that the
classification or re-classification of
public lands into alienable or
disposable, mineral or forest land
is now a prerogative of the
Executive Department of the
government. Accordingly, the
certification enjoys a presumption
of regularity in the absence of
contradictory evidence. As it is,
the said certification remains
uncontested and even oppositor-
appellant Republic itself did not
present any evidence to refute the
contents of the said certification.
Thus, the alienable and disposable
character of the subject land
certified as such as early as
December 31, 1925 has been
clearly established by the evidence
of the petitioner-appellee.
Anent the second and third
requirements, the applicant is
required to prove his open,
continuous, exclusive and
notorious possession and
occupation of the subject land
under a bona fide claim of
ownership either since time
immemorial or since June 12,
1945.
x x x x
In the case at bench, ESRDC
tacked its possession and
occupation over the subject land to
that of its predecessors-in-interest.
Copies of the tax declarations and
real property historical ownership
pertaining thereto were presented
in court. A perusal of the records
shows that in 1948, a portion of
the subject land was declared
under the name of Agapito
Claudel. Subsequently, in 1957
until 1991 the same was declared
under the name of Francisca Oco.
Thereafter, the same was declared
under the name of ESRDC. A
certification was likewise issued by
the Provincial Assessor of Misamis
Oriental that previous tax
declarations pertaining to the said
portion under the name of Agapita
Claudel could no longer be located
as the files were deemed lost or
destroyed before World War II.
On the other hand, the remaining
portion of the said land was
previously declared in 1948 under
the name of Jacinto Tan Lay Cho.
Subsequently, in 1969 until 1990,
the same was declared under the
name of Jacinto Tan. Thereafter,
the same was declared under the
name of ESRDC. A certification
was likewise issued by the
Provincial Assessor that the files of
previous tax declarations under
the name of Jacinto Tan Lay Cho
were deemed lost or destroyed
again before World War II.
In 1991 or upon ESRDCs
acquisition of the subject property,
the latter took possession thereto.
Albeit it has presently leased the
said land to Asia Brewery, Inc.,
where the latter built its brewery
plant, nonetheless, ESRDC has its
branch office located at the plant
compound of Asia Brewery, Inc.
Corollarily, oppositor-appellants
contentions that the court a quo
erred in considering the tax
declarations as evidence of
ESRDCs possession of the subject
land as the latters predecessors-
in-interest declared the same
sporadically, is untenable.
It is a settled rule that albeit tax
declarations and realty tax
payment of property are not
conclusive evidence of ownership,
nevertheless, they are
good indicia of the possession in
the concept of owner for no one in
his right mind would be paying
taxes for a property that is not in
his actual or at least constructive
possession. They constitute at
least proof that the holder has a
claim of title over the property.
The voluntary declaration of a
piece of property for taxation
purposes manifests not only ones
sincere and honest desire to obtain
title to the property and announces
his adverse claim against the State
and all other interested parties,
but also the intention to contribute
needed revenues to the
Government. Such an act
strengthens ones bona fide claim
of acquisition of ownership.
Finally, it bears stressing that the
pieces of evidence submitted by
petitioner-appellee are
incontrovertible. Not one, not even
oppositor-appellant Republic,
presented any countervailing
evidence to contradict the claims
of the petitioners that they are in
possession of the subject property
and their possession of the same is
open, continuous and exclusive in
the concept of an owner for over
30 years.
Verily, from 1948 when the subject
land was declared for taxation
purposes until ESRDC filed an
application for land registration in
1995, ESRDC have been in
possession over the subject land in
the concept of an owner tacking its
possession to that its
predecessors-in-interest for forty
seven (47) years already. Thus,
ESRDC was able to prove
sufficiently that it has been in
possession of the subject property
for more than 30 years, which
possession is characterized as
open, continuous, exclusive, and
notorious in the concept of an
owner.[7] (citations omitted)
The petitioner assails the
foregoing, alleging that the
respondent failed to prove that its
predecessors-in-interest possessed
the subject property in the manner
and for the length of time required
under Section 48 (b) of
Commonwealth Act No. 141,
otherwise known as the Public
Land Act (PLA), and Section 14 of
Presidential Decree No. 1529,
otherwise known as the Property
Registration Decree (P.D. No.
1529). According to the petitioner,
the respondent did not present a
credible and competent witness to
testify on the specific acts of
ownership performed by its
predecessors-in-interest on the
subject property. The respondents
sole witness, Vicente Oco, can
hardly be considered a credible
and competent witness as he is the
respondents liaison officer and he
is not related in any way to the
respondents predecessors-in-
interest. That coconut trees were
planted on the subject property
only shows casual or occasional
cultivation and does not qualify as
possession under a claim of
ownership.
Issue
This Court is confronted with the
sole issue of whether the
respondent has proven itself
entitled to the benefits of the PLA
and P.D. No. 1529 on confirmation
of imperfect or incomplete titles.
Our Ruling
This Court resolves to GRANT the
petition.
Preliminarily, with respect to the
infirmity suffered by this petition
from the standpoint of Rule 45,
this Court agrees with the
respondent that the issue of
whether the respondent had
presented sufficient proof of the
required possession under a bona
fide claim of ownership raises a
question of fact, considering that it
invites an evaluation of the
evidentiary record.[8] However,
that a petition for review should be
confined to questions of law and
that this Court is not a trier of
facts and bound by the factual
findings of the CA are not without
exceptions. Among these
exceptions, which obtain in this
case, are: (a) when the judgment
of the CA is based on a
misapprehension of facts or (b)
when its findings are not sustained
by the evidence on record.
This Courts review of the records
of this case reveals that the
evidence submitted by the
respondent fell short of proving
that it has acquired an imperfect
title over the subject property
under Section 48 (b) of the PLA.
The respondent cannot register
the subject property in its name on
the basis of either Section 14 (1)
or Section 14 (2) of P.D. No. 1529.
It was not established by the
required quantum of evidence that
the respondent and its
predecessors-in-interest had been
in open, continuous, exclusive and
notorious possession of the subject
property for the prescribed
statutory period.
The PLA governs the classification
and disposition of lands of the
public domain. Under Section 11
thereof, one of the modes of
disposing public lands suitable for
agricultural purposes is by
confirmation of imperfect or
incomplete titles.[9] On the other
hand, Section 48 provides the
grant to the qualified possessor of
an alienable and disposable public
land. Thus:
SEC. 48. The following-described
citizens of the Philippines,
occupying lands of the public
domain or claiming to own any
such lands or an interest therein,
but whose titles have not been
perfected or completed, may apply
to the Court of First Instance of
the province where the land is
located for confirmation of their
claims and the issuance of a
certificate of title therefor, under
the Land Registration Act, to wit:
(a) Those who prior to the transfer
of sovereignty from Spain to the
United States have applied for the
purchase, composition or other
form of grant of lands of the public
domain under the laws and royal
decrees then in force and have
instituted and prosecuted the
proceedings in connection
therewith, but have with or
without default upon their part, or
for any other cause, not received
title therefor, if such applicants or
grantees and their heirs have
occupied and cultivated said lands
continuously since the filing of
their applications.
(b) Those who by themselves or
through their predecessors in
interest have been in open,
continuous, exclusive, and
notorious possession and
occupation of agricultural lands of
the public domain, under a bona
fide claim of acquisition or
ownership, for at least thirty years
immediately preceding the filing of
the application for confirmation of
title except when prevented by war
or force majeure. These shall be
conclusively presumed to have
performed all the conditions
essential to a Government grant
and shall be entitled to a
certificate of title under the
provisions of this chapter.
(c) Members of the national
cultural minorities who by
themselves or through their
predecessors-in-interest have been
in open, continuous, exclusive and
notorious possession and
occupation of lands of the public
domain suitable to agriculture,
whether disposable or not, under a
bona fide claim of ownership for at
least 30 years shall be entitled to
the rights granted in sub-section
(b) hereof.
Presidential Decree No. 1073 (P.D.
No. 1073), which was issued on
January 25, 1977, deleted
subsection (a) and amended
subsection (b) as follows:
SECTION 4. The provisions of
Section 48 (b) and Section 48 (c),
Chapter VIII of the Public Land Act
are hereby amended in the sense
that these provisions shall apply
only to alienable and disposable
lands of the public domain which
have been in open, continuous,
exclusive and notorious possession
and occupation by the applicant
thru himself or thru his
predecessor-in-interest under a
bona fide claim of ownership since
June 12, 1945.
Notably, the first PLA, or Act No.
926, required a possession and
occupation for a period of ten (10)
years prior to the effectivity of Act
No. 2096 on July 26, 1904 or on
July 26, 1894. This was adopted in
the PLA until it was amended by
Republic Act No. 1942 on June 22,
1957, which provided for a period
of thirty (30) years. It was only
with the enactment of P.D. No.
1073 on January 25, 1977 that it
was required that possession and
occupation should commence on
June 12, 1945.
P.D. No. 1529, which was enacted
on June 11, 1978, codified all the
laws relative to the registration of
property. Section 14 thereof
partially provides:
Section 14. Who may apply. The
following persons may file in the
proper Court of First Instance an
application for registration of title
to land, whether personally or
through their duly authorized
representatives:
(1) Those who by themselves or
through their predecessors-in-
interest have been in open,
continuous, exclusive and
notorious possession and
occupation of alienable and
disposable lands of the public
domain under a bona fide claim of
ownership since June 12, 1945, or
earlier.
(2) Those who have acquired
ownership of private lands by
prescription under the provision of
existing laws.
(3) Those who have acquired
ownership of private lands or
abandoned river beds by right of
accession or accretion under the
existing laws.
(4) Those who have acquired
ownership of land in any other
manner provided for by law.
Section 14 (1) and Section 14 (2)
are clearly different. Section 14 (1)
covers alienable and disposable
land while Section 14 (2) covers
private property. As this Court
categorically stated inHeirs of
Malabanan v. Republic of the
Philippines,[10] the distinction
between the two provisions lies
with the inapplicability of
prescription to alienable and
disposable lands. Specifically:
At the same time, Section 14 (2)
puts into operation the entire
regime of prescription under the
Civil Code, a fact which does not
hold true with respect to Section
14 (1).[11]
Property is either part of the
public domain or privately owned.
[12]
Under Article 420 of the Civil
Code, the following properties are
of public dominion:
(a) Those intended for public use,
such as roads, canals, rivers,
torrents, ports and bridges
constructed by the State, banks,
shores, roadsteads and others of
similar character;
(b) Those which belong to the
State, without being for public use,
and are intended for some public
service or for the development of
the national wealth.
All other properties of the State,
which is not of the character
mentioned in Article 420 is
patrimonial property,[13] hence,
susceptible to acquisitive
prescription.[14]
In Heirs of Malabanan, this Court
ruled that possession and
occupation of an alienable and
disposable public land for the
periods provided under the Civil
Code do not automatically convert
said property into private property
or release it from the public
domain. There must be an express
declaration that the property is no
longer intended for public service
or development of national wealth.
Without such express declaration,
the property, even if classified as
alienable or disposable, remains
property of the State, and thus,
may not be acquired by
prescription.
Nonetheless, Article 422 of the
Civil Code states that [p]roperty
of public dominion, when no longer
intended for public use or for
public service, shall form part of
the patrimonial property of the
State. It is this provision that
controls how public dominion
property may be converted into
patrimonial property susceptible to
acquisition by prescription. After
all, Article 420 (2) makes clear
that those property which belong
to the State, without being for
public use, and are intended for
some public service or for the
development of the national
wealth are public dominion
property. For as long as the
property belongs to the State,
although already classified as
alienable or disposable, it
remains property of the public
dominion if when it is
intended for some public
service or for the development
of the national wealth.
(emphasis supplied)
Accordingly, there must be an
express declaration by the
State that the public dominion
property is no longer intended
for public service or the
development of the national
wealth or that the property has a) Tax Declaration in the name of
been converted into Agapita Claudel for the year 1948;
patrimonial. Without such
express declaration, the b) Tax Declarations in the name of
property, even if classified as Francisca Oco for the years 1957,
alienable or disposable, 1963, 1969, 1973, 1974, 1980,
remains property of the public 1987, 1989 and 1991;
dominion, pursuant to Article
420(2), and thus incapable of c) Tax Declarations in the
acquisition by prescription. It respondents name for the years
is only when such alienable and 1991, 1992 and 1994;
disposable lands are expressly
declared by the State to be no d) Tax Declarations in the name of
longer intended for public Jacinto Tan Lay Cho for the years
service or for the development 1948 and 1952;
of the national wealth that the
period of acquisitive e) Tax Declarations in the name of
prescription can begin to run. Jacinto Tan for the years 1969,
Such declaration shall be in the 1973, 1974, 1980, 1989 and 1990;
form of a law duly enacted by and
Congress or a Presidential
Proclamation in cases where f) Tax Declarations in the
the President is duly authorized respondents name for the years
by law.[15] 1991, 1992 and 1994.

In other words, for one to invoke Pursuant to Agapita Claudels

the provisions of Section 14 (2) 1948 Tax Declaration, there were
and set up acquisitive prescription nineteen (19) coconut and ten (10)
against the State, it is primordial banana trees planted on Area A.
that the status of the property as The coconut trees were supposedly
patrimonial be first established. four years old, hence, the
Furthermore, the period of reasonable presumption that she
possession preceding the had been in possession even
classification of the property as before June 12, 1945.[16]
patrimonial cannot be considered
in determining the completion of The respondent also offered the
the prescriptive period. following testimony of Vicente
Oco:
To prove that its predecessors-in-
interest were in possession of the Q Mr. Witness, If you know
subject property on or prior to about what period your
June 12, 1945 or had completed predecessor has started to possess
the prescriptive period of thirty this land subject matter of this
(30) years, the respondent application?
submitted the following tax
declarations: A Per my personal knowledge, it
was before the second world war
but the Municipality of El Salvador
was created on June 15, 1948 by
virtue of RA 268 and its started to
officially function only on August 2,
1948[.]
Q From whom did you acquire
this information?
A From the seller and the
adjoining lot owners.[17]
To prove that its predecessors-in-
interest exercised acts of dominion
over the subject property, the
respondent claimed that per
Francisca Ocos Tax Declarations,
the following improvements were
introduced in Area A: nineteen
(19) coconut and ten (10) banana
trees in Area A in 1957 and 1963;
thirty-three (33) coconut trees in
1969 and 1973; thirty-three (33)
coconut trees, one (1) mango tree
and three (3) seguidillas vines in
1974; thirty-three (33) coconut
trees in 1980; eighty-seven (87)
coconut trees in 1987; and fifteen
(15) coconut trees in 1989. Per
Jacinto Tans Tax Declarations,
there were fifty-seven (57) coconut
trees in Area B in 1973, 1974,
1980, 1989 and 1990.[18]
A reading of the CAs July 31, 2008
Decision shows that it affirmed the
grant of the respondents
application given its supposed
compliance with Section 14 (2) of
P.D. No. 1529. It ruled that based
on the evidence submitted, the
respondent is not qualified to
register the subject property in its
name under Section 14 (1) as the
possession and occupation of its
predecessors-in-interest
commenced after June 12, 1945.
Nonetheless, as the CA ruled, the
respondent acquired title to the
subject property by prescription as
its predecessors-in-interest had
possessed the subject property for
more than thirty (30) years.
Citing Buenaventura v. Republic of
the Philippines,[19] the CA held that
even if possession commenced
after June 12, 1945, registration is
still possible under Section 14 (2)
and possession in the concept of
an owner effectively converts an
alienable and disposable public
land into private property.
This Court, however, disagrees on
the conclusion arrived at by the
CA. On the premise that the
application for registration, which
was filed in 1995, is based on
Section 14 (2), it was not proven
that the respondent and its
predecessors-in-interest had been
in possession of the subject
property in the manner prescribed
by law and for the period
necessary before acquisitive
prescription may apply.
While the subject land was
supposedly declared alienable and
disposable on December 31, 1925
per the April 18, 1997 Certification
and July 1, 1997 Report of the
Community Environment and
Natural Resources Office
(CENRO),[20] the Department of
Agrarian Reform (DAR) converted
the same from agricultural to
industrial only on October 16,
1990.[21] Also, it was only in 2000
that the Municipality of El
Salvador passed a Zoning
Ordinance, including the subject
property in the industrial zone.
[22]
Therefore, it was only in 1990
that the subject property had been
declared patrimonial and it is only
then that the prescriptive period
began to run. The respondent
cannot benefit from the alleged
possession of its predecessors-in-
interest because prior to the
withdrawal of the subject property
from the public domain, it may not
be acquired by prescription.
On the premise that the
application of the respondent is
predicated on Section 14 (1), the
same would likewise not prosper.
As shown by the tax declarations
of the respondents predecessors-
in-interest, the earliest that the
respondent can trace back the
possession of its predecessors-in-
interest is in 1948. That there
were four-year old coconut trees in
Area A as stated in Agapita
Claudels 1948 Tax Declaration
cannot be considered a well-nigh
controvertible evidence that she
was in possession prior to June 12,
1945 without any evidence that
she planted and cultivated them.
In the case of Jacinto Tan Lay Cho,
the earliest tax declaration in his
name is dated 1948 and there is no
evidence that he occupied and
possessed Area B on or prior to
June 12, 1945. Furthermore, the
testimony of the respondents lone
witness that the respondents
predecessors-in-interest were
already in possession of the
subject property as of June 12,
1945 lacks probative value for
being hearsay.
It is explicit under Section 14 (1)
that the possession and occupation
required to acquire an imperfect
title over an alienable and
disposable public land must be
open, continuous, exclusive and
notorious in character.
In Republic of the Philippines v.
Alconaba,[23] this Court explained
that the intent behind the use of
possession in conjunction with
occupation is to emphasize the
need for actual and not just
constructive or fictional
possession.
The law speaks of possession and
occupation. Since these words are
separated by the conjunction and,
the clear intention of the law is not
to make one synonymous with the
other. Possession is broader than
occupation because it includes
constructive possession. When,
therefore, the law adds the
word occupation, it seeks to
delimit the all encompassing effect
of constructive possession. Taken
together with the words open,
continuous, exclusive and
notorious, the
word occupation serves to
highlight the fact that for an
applicant to qualify, his possession
must not be a mere fiction. Actual
possession of a land consists in the
manifestation of acts of dominion
over it of such a nature as a party
would naturally exercise over his
own property.[24] (citations omitted)
On the other hand, Section 14 (2)
is silent as to the required nature
of possession and occupation, thus,
requiring a reference to the
relevant provisions of the Civil Declarations covering Area A and
Code on prescription. And under the eleven (11) Tax Declarations
Article 1118 thereof, possession covering Area B for a claimed
for purposes of prescription must possession of more than forty-six
be in the concept of an owner, (46) years (1948-1994) do not
public, peaceful and qualify as competent evidence of
uninterrupted. In Heirs of actual possession and occupation.
Marcelina Arzadon-Crisologo v. As this Court ruled in Wee v.
Raon,[25] this Court expounded on Republic of the Philippines:[27]
the nature of possession required
for purposes of prescription: It bears stressing that petitioner
presented only five tax
It is concerned with lapse of time declarations (for the years 1957,
in the manner and under 1961, 1967, 1980 and 1985) for a
conditions laid down by law, claimed possession and occupation
namely, that the possession should of more than 45 years (1945-
be in the concept of an owner, 1993). This type of intermittent
public, peaceful, uninterrupted and sporadic assertion of
and adverse. Possession is open alleged ownership does not
when it is patent, visible, apparent, prove open, continuous,
notorious and not clandestine. It is exclusive and notorious
continuous when uninterrupted, possession and occupation. In
unbroken and not intermittent or any event, in the absence of other
occasional; exclusive when the competent evidence, tax
adverse possessor can show declarations do not conclusively
exclusive dominion over the land establish either possession or
and an appropriation of it to his declarants right to registration of
own use and benefit; and notorious title.[28] (emphasis supplied and
when it is so conspicuous that it is citation omitted)
generally known and talked of by
the public or the people in the The phrase adverse, continuous,
neighborhood. The party who open, public, and in concept of
asserts ownership by adverse owner, by which the respondent
possession must prove the describes its possession and that
presence of the essential elements of its predecessors-in-interest is a
of acquisitive prescription. conclusion of law. The burden of
[26]
(citations omitted) proof is on the respondent to prove
by clear, positive and convincing
This Court is not satisfied with the evidence that the alleged
evidence presented by the possession of its predecessors-in-
respondent to prove compliance interest was of the nature and
with the possession required either duration required by law.[29] It is
under Section 14 (1) or Section 14 therefore inconsequential if the
(2). petitioner failed to present
evidence that would controvert the
First, the twelve (12) Tax allegations of the respondent. A
person who seeks the registration
of title to a piece of land on the
basis of possession by himself and
his predecessors-in-interest must
prove his claim by clear and
convincing evidence, i.e., he must
prove his title and should not rely
on the absence or weakness of the
evidence of the oppositors.[30]
The respondents claim of
ownership will not prosper on the
basis of the tax declarations alone.
InCequea v. Bolante,[31] this Court
ruled that it is only when these tax
declarations are coupled with
proof of actual possession of the
property that they may become the
basis of a claim of ownership.[32] In
the absence of actual public and
adverse possession, the
declaration of the land for tax
purposes does not prove
ownership. [33]
Second, that the nineteen (19)
coconut trees supposedly found on
Area A were four years old at the
time Agapita Claudel filed a Tax
Declaration in 1948 will not suffice
as evidence that her possession
commenced prior to June 12, 1945,
in the absence of evidence that she
planted and cultivated them.
Alternatively, assuming that
Agapita Claudel planted and
maintained these trees, such can
only be considered casual
cultivation considering the size of
Area A. On the other hand, that
Jacinto Tan Lay Cho possessed
Area B in the concept of an owner
on or prior to June 12, 1945 cannot
be assumed from his 1948 Tax
Declaration.
Third, that plants were on the
subject property without any
evidence that it was the
respondents predecessors-in-
interest who planted them and that
actual cultivation or harvesting
was made does not constitute
well-nigh incontrovertible
evidence of actual possession and
occupation. As this Court ruled
in Wee:
We are, therefore, constrained to
conclude that the mere existence
of an unspecified number of coffee
plants, sans any evidence as to
who planted them, when they were
planted, whether cultivation or
harvesting was made or what
other acts of occupation and
ownership were undertaken, is not
sufficient to demonstrate
petitioners right to the
registration of title in her favor.[34]
Fourth, Vicente Ocos testimony
deserves scant consideration and
will not supplement the inherent
inadequacy of the tax declarations.
Apart from being self-serving, it is
undoubtedly hearsay. Vicente Oco
lacks personal knowledge as to
when the predecessors-in-interest
of the respondent started to
occupy the subject property and
admitted that his testimony was
based on what he allegedly
gathered from the respondents
predecessors-in-interest and the
owners of adjoining lot. Moreover,
Vicente Oco did not testify as to
what specific acts of dominion or
ownership were performed by the
respondents predecessors-in-
interest and if indeed they did. He
merely made a general claim that
they came into possession before
World War II, which is a mere
conclusion of law and not factual
proof of possession, and therefore
unavailing and cannot suffice.
[35]
Evidence of this nature should
have been received with suspicion,
if not dismissed as tenuous and
unreliable.
Finally, that the respondents
application was filed after only
four years from the time the
subject property may be
considered patrimonial by reason
of the DARs October 26, 1990
Order shows lack of possession
whether for ordinary or
extraordinary prescriptive period.
The principle enunciated inHeirs
of Malabanan cited above was
reiterated and applied in Republic
of the Philippines v. Rizalvo:[36]
On this basis, respondent would
have been eligible for application
for registration because his claim
of ownership and possession over
the subject property even exceeds
thirty (30) years. However, it is
jurisprudentially clear that the
thirty (30)-year period of
prescription for purposes of
acquiring ownership and
registration of public land under
Section 14 (2) of P.D. No. 1529
only begins from the moment the
State expressly declares that the
public dominion property is no
longer intended for public service
or the development of the national
wealth or that the property has
been converted into patrimonial.
[37]
cralaw
WHEREFORE, premises
considered, the instant petition
is GRANTED. The July 31, 2008
Decision and February 20, 2009
Resolution of the Court of Appeals
in CA-G.R. CV No. 00143
are REVERSED andSET
ASIDE and the respondents
application for registration of title
over Lot 9039 of Cagayan Cadastre
is hereby DENIED for lack of
merit.
SO ORDERED.
Carpio, (Chairperson),
Villarama,
Jr.,* Perez, and Sereno,
FIRST DIVISION
G.R. No. 161380, April 21, 2014
AZNAR BROTHERS REALTY
COMPANY, Petitioner, v. SPOUSE
S JOSE AND MAGDALENA
YBAEZ,Respondents.
DECISION
BERSAMIN, J.:
The ownership of a sizable parcel
of land is the subject of this
dispute between the buyer of its
recognized owner and the buyer of
the successors-in-interest of the
recognized owner. The land has
since been registered under the
Torrens system in the name of the
latter buyer who had meanwhile
obtained a free patent on the
premise that the land belonged to
the public domain.chanrobleslaw
The Case
Aznar Brothers Realty Company
(Aznar Brothers) is on appeal to
review and undo the adverse
decision promulgated on October
10, 2002,1 whereby the Court of
Appeals (CA) affirmed the
judgment rendered on March 8,
1996 by the Regional Trial Court
(RTC), Branch 10, in Cebu
City2insofar as the RTC: (a)
dismissed for lack of merit Aznar
Brothers complaint for the
declaration of the nullity of the
extrajudicial declaration of heirs
with extrajudicial settlement of
estate and deed of absolute sale,
and (b) declared Lot No. 18563 as
legally owned by defendants
Spouses Jose and Magdalena
Ybaez (Spouses Ybaez), but
modified the decision of the RTC
by deleting the awards of moral
and exemplary damages,
attorneys fees, litigation expenses
and costs of suit.chanrobleslaw
Antecedents
On March 21, 1964, Casimiro
Ybaez (Casimiro), with the
marital consent of Maria Daclan,
executed aDeed of Absolute Sale in
favor of Aznar Brothers conveying
for P2,500.00 the 17,575-square-
meter unregistered agricultural
land planted with 17 coconut trees
situated in Banika-Bulacao, Pardo,
Cebu City, and covered by Tax
Declaration No. IV-00128.3 The
Deed of Absolute Sale described
the property as bounded on the
North by Aznar Brothers; on the
East by Angel Sabellano; on the
South by Bernardo Sabellano; and
on the West by Agaton Bacalso.
The parties agreed to register the
sale under Act No.
3344. chanrobleslaw
4
On February 17, 1967, Saturnino
Tanuco sold to Aznar Brothers for
P2,528.00 the 15,760-square-
meter parcel of corn and cogon
land planted with 17 coconut trees
situated in Candawawan, Pardo,
Cebu City, bounded on the North
by Alfonso Pacaa; on the East by
Tecla Cabales; on the South by
Angel Abellana; and on the West
by Castor Sabellano. Tax
Declaration No. IV-004787 was
issued for the property. The parties
agreed to register the parcel of
land under Act No.
3344.5chanrobleslaw
In his affidavit of confirmation
executed on April 11, 1967, Angel
Abellana declared that during the
lifetime of his daughter, Rosa, he
had given to her husband, Tanuco,
a parcel of land known as Lot No.
18563 with an area of 15,760
square meters located in Pardo,
Cebu City; that the land was
bounded on the North by Alfonso
Pacaa; on the East by Tecla
Cabales; on the South by Lot No.
5316 of Angel Abellana; and on the
West by Castor Sabellano; that the
property assessed at P300.00 was
declared under Tax Declaration
No. IV-004787; and that on
February 17, 1967 Tanuco had sold
the parcel of land to Aznar
Brothers for
P4,728.00.6chanrobleslaw
On July 3, 1968, Casimiro died
intestate leaving as heirs his wife
Maria, and their children, namely,
Fabian and Adriano, both
surnamed Ybaez, and Carmen
Ybaez-Tagimacruz, Fe Ybaez-
Alison, and Dulcisima Ybaez-
Tagimacruz. On August 29, 1977,
the heirs of Casimiro executed a
document entitled Extrajudicial
Declaration of Heirs with
an Extrajudicial Settlement of
Estate of Deceased Person and
Deed of Absolute Sale, whereby
they divided and adjudicated
among themselves Lot No. 18563
with an area of 16,050 square
meters situated in Banika,
Bulacao, Pardo Cebu City. By the
same document, they sold the
entire lot for P1,000.00 to their co-
heir, Adriano D. Ybaez
(Adriano).7chanrobleslaw
On June 21, 1978, Adriano sold Lot
No. 18563 to Jose R. Ybaez for
P60,000.00. Lot No. 18563 is
described in their deed of sale as
containing an area of 16,050
square meters, and was bounded
on the North by the lot of Eusebia
Bacalso; on the East by a lot of
Aznar Brothers; on the South by a
lot of Angel Abellana; and on the
West by a lot of Teofila C.
Leona.8chanrobleslaw
On January 15, 1979, Jose R.
Ybaez filed Free Patent
Application No. (VII-I) 18980 in
respect of the land he had bought
from Adriano.9 In due course, on
July 20, 1979, Original Certificate
of Title (OCT) No. 2150 was issued
to Jose R. Ybaez. The 16,050-
square-meter land is particularly
described in OCT No. 2150 as
situated in the Barrio of Bulacao-
Pardo, City of Cebu x x x. Bounded
on the NorthEast, along lines 1-2-3
by Lot No. 1811, on the SouthEast,
along lines 3-4 by Lot No. 5316; on
the SouthWest, along lines 4-5-6-7-
8-9-10-11 by Lot No. 18565; on the
NorthWest, along line 11-12 by Lot
No. 18566; along line 12-1 by Lot
No. 18114, all of Cebu City.10
On May 26, 1989, Aznar Brothers
filed in the RTC a complaint
against Jose R. Ybaez claiming
absolute ownership of Lot No.
18563 by virtue of the Deed of
Absolute Sale dated March 21,
1964 executed in its favor by
Casimiro (Civil Case No. CEB-
7887). Alleging that the free
patent issued in favor of Jose R.
Ybaez covered the same property
already adjudicated as private
property, Aznar Brothers sought
judgment to compel Jose R. Ybaez
to surrender all the documents
pertaining to the free patent for
cancellation, and to order him to
pay attorneys fees of P5,000.00
and litigation expenses of
P3,000.00. chanrobleslaw
11
Jose R. Ybaez moved to dismiss
the complaint of Aznar Brothers on
the ground of lack of cause of
action, lack of jurisdiction over the
nature of the action, and estoppel
by laches.12 After Aznar Brothers
opposed,13 the RTC denied the
motion to dismiss.14 Thereafter,
Jose R. Ybaez filed his answer to
the complaint.
In his answer, Jose R. Ybaez
reiterated the grounds of his
motion to dismiss (i.e., lack of
cause of action, lack of jurisdiction
over the nature of the action, and
the bar by estoppel by laches); and
prayed that Aznar Brothers be
ordered to pay moral damages of
P100,000.00; exemplary damages
in an amount to be determined by
the court; attorneys fees of
P20,000.00; and litigation
expenses of P5,000.00, plus costs
of suit.15chanrobleslaw
In its reply, Aznar Brothers averred
that Jose R. Ybaez did not present
records or certification as to the
ownership of the land at the time
of the application for free patent
xxx to prove that the land xxx is
not a private land.16chanrobleslaw
In the course of the case, Aznar
Brothers amended its complaint to
allege the sale executed on
February 17, 1967 by Tanuco and
confirmed by Angel Abellana on
April 11, 1967.17chanrobleslaw
In his amended answer, Jose R.
Ybaez contended that Aznar
Brothers had offered to buy the
property from him, requesting him
to update and prepare all the
documents relevant to the sale, but
Aznar Brothers later opted to
claim the property as its own when
the sale could not be
finalized. chanrobleslaw
18
Aznar Brothers amended its
complaint a second time to
implead Jose R. Ybaezs wife
Magdalena Marcos-Ybaez as
defendant, averring that both
defendants held no legal right nor
just title to apply for free patent
over the lot in question, for the
land was no longer a public
disposable agricultural land but a
private residential land that it
already owned; that the issuance
of OCT No. 2150 was erroneous
and without factual and legal
bases; that it learned about the
registration of the land in the
name of Jose R. Ybaez only when
his agent offered to sell the land to
it; that it refused the offer because
it was already the owner of the
land; and that consequently OCT
No. 2150 should be cancelled, and
Jose R. Ybaez should be ousted
from the land.19chanrobleslaw
Aznar Brothers sought a
restraining order or a writ of
preliminary injunction to prevent
the Spouses Ybaez from disposing
of the land. It further sought the
declaration as null and void ab
initio the Extrajudicial Declaration
of Heirs with Extrajudicial
Settlement of Estate of Deceased
Person and Deed of Absolute
Sale dated August 29, 1977, and of
the Deed of Absolute Sale dated
June 21, 1978; the cancellation of
OCT No. 2150; an order directing
the Register of Deeds to issue
another title in its name; the
ouster of the Spouses Ybaez from
the property; the permanent
injunction to prevent Spouses
Ybaez from interfering with or
disturbing its possession and
ownership of Lot No. 18563; and
judgment ordering the Spouses
Ybaez to pay moral damages of
P50,000.00, attorneys fees of
P30,000.00, and litigation
expenses of P20,000.00.
The Ybaez Spouses opposed the
admission of the second amended
complaint, claiming that the cause
of action would thereby be
changed from accion
publiciana to accion
reivindicatoria; that while
Magdalena Marcos-Ybaez was
thereby being impleaded, the heirs
named in the Extrajudicial
Declaration of Heirs with
Extrajudicial Settlement of Estate
of Deceased Person and Deed of
Absolute Sale, specifically Adriano,
were not being impleaded; and
that the declaration of nullity of
OCT No. 2150 was a prohibited
collateral attack on their title to
the property.20chanrobleslaw
The RTC admitted the second
amended complaint, emphasizing
that the original cause of action
ofaccion publiciana would not be
changed because the second
amended complaint would
incorporate additional but related
causes of action, a change
permitted only during the pre-trial
stage.21chanrobleslaw
The Ybaez Spouses then amended
their answer by reiterating the
allegations in their previous
answers, and, in addition, pleaded
that they had religiously paid the
taxes on the land; that the claim of
ownership of Aznar Brothers had
been based only on tax
declarations; that their application
for free patent had been granted
more than ten years prior to the
filing of the complaint by Aznar
Brothers, who were all too aware
of the land registration case; that
Aznar Brothers did not question
their title within one year from its
issuance; that a decree of
registration being binding on the
whole world, the filing of the
complaint ten years after the title
had been issued left the complaint
without any cause of action; that
the action for recovery of
possession constituted a collateral
attack on their title to the
property; and that adverse,
notorious and continuous
possession of the property under a
claim of ownership was ineffective
against a Torrens title. They
sought the dismissal of the second
amended complaint for lack of
cause of action, lack of
jurisdiction, estoppel by laches,
and lack of proper parties; and
prayed for moral damages of
P100,000.00; exemplary damages
in such amount as the court would
award in the exercise of discretion;
attorneys fees of P20,000.00; and
litigation expenses of P5,000.00
plus costs of suit.22chanrobleslaw
Judgment of the RTC
On March 8, 1996,23 the RTC
rendered judgment after trial,
declaring that the identity of the
land sold to Aznar Brothers by
Casimiro and the land sold by the
heirs of Casimiro to Jose R. Ybaez
was not an issue anymore
because it was not raised as an
issue during the pre-trial
conference; that the issue
remaining for resolution
concerned which of the conflicting
claims of ownership that of Aznar
Brothers based on Tax Declaration
No. GR-07-049-00694 or that of
the Spouses Ybaez based on OCT
No. 2150 should prevail; that the Issues
Spouses Ybaez with their OCT
No. 2150 should prevail, rendering Only Aznar Brothers has come to
Aznar Brothers complaint the Court for review, raising the
dismissible for lack of merit; that following issues for consideration
Lot No. 18563 was legally owned and resolution, to
by the defendants; and Aznar wit:chanRoblesvirtualLawlibrary
Brothers was liable to pay the
Spouses Ybaez moral damages of 1. THE CONCLUSION OF
P100,000.00, exemplary damages THE HONORABLE
of P50,000.00, attorneys fees of COURT OF APPEALS
P20,000.00, and litigation THAT PETITIONER IS
expenses of P5,000.00, plus costs BARRED BY
of suit.chanrobleslaw ESTOPPEL BY
LACHES, IS NOT IN
Decision of the CA ACCORD WITH LAW
AND/OR WITH
Aznar Brothers appealed to the APPLICABLE
CA, assailing the judgment of the DECISIONS OF THE
RTC for not sustaining the sale by SUPREME COURT
Casimiro in its favor of Lot No. THEREBY
18563 despite the sale being COMMITTING A
registered under Act No. 3344, as REVERSIBLE ERROR
amended; and for awarding moral OF LAW WHICH IS
damages, exemplary damages, GRAVELY
attorneys fees and litigation PREJUDICIAL TO THE
expenses to the Spouses Ybaez. RIGHT OF THE
PETITIONER OVER
As earlier mentioned, the CA THE SUBJECT LOT
promulgated its adverse decision NO. 18563. SAID
on October 10, 2002,24 decreeing CONCLUSION IS NOT
thusly:chanRoblesvirtualLawlibrar SUPPORTED BY
y FACTS ON RECORDS
(sic).
WHEREFORE, premises
considered, the 2. THE COURT OF
Court AFFIRMS the appealed APPEALS GRAVELY
judgment butDELETES the award ERRED IN
of attorneys fees, litigation AFFIRMING THE
expenses, costs of the suit, moral DECISION OF THE
and exemplary damages. REGIONAL TRIAL
COURT DECLARING
SO ORDERED. SUBJECT LOT AS
LEGALLY OWNED BY
The CA denied the motion for THE RESPONDENTS
reconsideration of Aznar Brothers. DESPITE OF ITS OWN
 FINDING THAT: Brothers,26 that the property in
RESPONDENTS WERE litis was not the same as Lot No.
BUYERS IN BAD 18563, but they would not be
FAITH AND THAT accorded any relief upon those
THEIR SELLERS reasons,27 even if the Court should
WERE NOT OWNERS find Aznar Brothers appeal
OF THE PROPERTY IN unmeritorious or utterly
QUESTION AND frivolous. chanrobleslaw
28

THEREFORE, THERE
WAS NOTHING THAT Regardless, the holding by both
THEY COULD HAVE lower courts was proper and
SOLD TO THE correct. The non-inclusion in the
RESPONDENTS.25 pre-trial order barred the identity
of the property in litis as an issue,
for it is basic that any factual issue
Ruling of the Court not included in the pre-trial order
will not be heard and considered
The appeal is at the trial,29 much less, on appeal.
meritorious.chanrobleslaw The parties had the obligation to
disclose during the pre-trial all the
1. issues they intended to raise
Identity of the lot in litis is no during the trial, except those
longer a proper issue herein involving privileged or impeaching
matters, for the rule is that the
The CA and the RTC both held that definition of issues during the pre-
the identity of the property in trial conference will bar the
litis was no longer an issue to be consideration of others, whether
considered and determined during trial or on appeal. The basis
because the parties did not raise it of the exclusion is that the parties
at the pre-trial. The Spouses are concluded by the delimitation
Ybaez insist herein, however, that of the issues in the pre-trial order
the RTC and the CA should have because they themselves agreed to
made such a finding nonetheless in it.30chanrobleslaw
view of the materiality of whether
the land claimed by Aznar The waiver of the identity of the
Brothers was different from Lot property in litis as an issue did not
No. 18563, the land subject of violate the right of any of the
their OCT No. 2150. parties herein due to the Rules of
Court having forewarned them in
We clarify that although the Section 7, Rule 18 of the Rules of
Spouses Ybaezs non-appeal Court that should the action
barred them from assigning errors proceed to trial, the pre-trial order
for purposes of this review, they would
are not prevented from now explicitly define and limit the
insisting, if only to uphold the issues to be tried, and its contents
judgment of the CA against Aznar would control the subsequent
course of the action, unless
modified before trial to prevent
manifest injustice.
In reality, the parties could still
have reversed the waiver had they
so wanted. Towards that end, they
had three opportunities after the
issuance of the pre-trial order to
submit the identity of the
property in litis as an issue for trial
and decision. The first was for
either of them to seek the
modification of the pre-trial order
prior to the trial in order to
prevent manifest injustice,31 but
neither did so. The second was for
either of them to have the trial
court consider the identity of the
propertyin litis as an issue proper
for the trial, but such party must
give a special reason to justify the
trial court in doing so. This would
have been authorized under
Section 5, Rule 30 of the Rules of
Court.32Again, neither of them
seized such opportunity. And the
third was for the Spouses Ybaez
to adduce evidence on Lot No.
18563 being different from the
land claimed by Aznar Brothers.
Had they done so, Aznar Brothers
could have either allowed such
evidence without objection, or
objected to such evidence on the
ground of its not being relevant to
any issue raised in the pleadings
or in the pre-trial order. The RTC
could then have proceeded as it
deemed fit, including allowing
such evidence. This procedure
would have been authorized by
Section 5, Rule 10 of the Rules of
Court,
viz:chanRoblesvirtualLawlibrary
Section 5. Amendment to conform
to or authorize presentation of
evidence. When issues not
raised by the pleadings are tried
with the express or implied
consent of the parties, they shall
be treated in all respects as if they
had been raised in the pleadings.
Such amendment of the pleadings
as may be necessary to cause them
to conform to the evidence and to
raise these issues may be made
upon motion of any party at any
time, even after judgment; but
failure to amend does not affect
the result of the trial of these
issues. If evidence is objected to at
the trial on the ground that it is
not within the issues made by the
pleadings, the court may allow the
pleadings to be amended and shall
do so with liberality if the
presentation of the merits of the
action and the ends of substantial
justice will be subserved thereby.
The court may grant a continuance
to enable the amendment to be
made. (5a)
Moreover, for the Spouses Ybaez
to call upon the Court now to
analyze or weigh evidence all over
again upon such a factual matter
would be impermissible
considering that the Court is not a
trier of facts.33chanrobleslaw
There are exceptional instances in
which the Court has held itself
competent to make its own
appreciation of the facts, and not
be concluded by the findings of
fact of the trial and appellate
courts, namely: (1) when the
factual findings of the CA and
those of the trial court were
contradictory; (2) when the
findings are grounded entirely on
speculation, surmises, or
conjectures; (3) when the
inference made by the CA from its
findings of fact was manifestly
mistaken, absurd, or impossible;
(4) when there is grave abuse of
discretion in the appreciation of
facts; (5) when the CA, in making
its findings, went beyond the
issues of the case, and such
findings were contrary to the
admissions of both appellant and
appellee; (6) when the judgment of
the CA was premised on a
misapprehension of facts; (7) when
the CA failed to notice certain
relevant facts that, if properly
considered, would justify a plaintiff when they bought the
different conclusion; (8) when the
findings of facts were themselves
conflicting; (9) when the findings
of fact were conclusions without
citation of the specific evidence on
which they were based; and (10)
when the findings of fact of the CA
were premised on the absence of
evidence but such findings were
contradicted by the evidence on
record. 34 None of the
aforementioned exceptions obtains
in this case.
Accordingly, the Court, just as the
lower courts have been bound,
shall proceed upon the assumption
that the property in litis and Lot
No. 18563 were one and the same
realty.
2.
CA correctly concluded that
Aznar Brothers
owned Lot No. 18563; and that
the Spouses Ybaez
were not buyers in good faith
In its assailed judgment, the CA
concluded that the RTC erred in
holding in favor of the Spouses
Ybaez, observing as
follows:chanRoblesvirtualLawlibra
ry
The trial court however erred
when it
held:chanroblesvirtuallawlibrary
Nevertheless, from the totality of
the evidence adduced by the
parties, there is no preponderant
evidence that the defendants had
prior knowledge of the previous
sale of subject property to the
same from Adriano D. Ybaez on
June 21, 1978. And there is neither
any showing that defendant had
prior knowledge of such sale when
they applied for and was issued
Original Certificate of Title No.
2150 on August 14, 1979. Thus,
defendants can very well be
considered as purchasers to the
protection of the provisions of P.D.
1529. While plaintiff has shown to
have acquired or was issued tax
declaration No. GR-07-049-00694
and had paid taxes on the property,
said tax declaration and realty tax
payments are not conclusive
evidence of ownership (Ferrer-
Lopez vs. Court of Appeals, 150
SCRA 393). It cannot prevail over
Original Certificate of Title No.
2150 in the name of the
defendants, as a torrens title
concludes all controversies over
ownership of land covered by a
final decree of registration (PNB
vs. Court of Appeals, 153 SCRA
435).
The Deed of Absolute Sale (Exhibit
F) in favor of plaintiff-appellant
Aznar was registered under Act
3344, as amended on March 23,
1964 with the Register of Deeds of
Cebu City. The registration of said
deed gave constructive notice to
the whole world including
defendant-appellees of the
existence of said deed of
conveyance. (Gerona v. Guzman,
11 SCRA 153) Defendant-
appellees cannot, therefore, claim
to be buyers in good faith of the
land in question. Resultantly, they
merely stepped into the shoes of
their sellers vis a vis said land.
Since their sellers were not
owners of the property in question,
there was nothing that they could
have sold to defendant-appellees.35
We sustain the CAs conclusion
that the Spouses Ybaez were
guilty of bad faith, and that they
acquired Lot No. 18563 from
sellers who were not the owners.
Accordingly, we resolve the second
error raised herein in favor of
Aznar Brothers.
The records and evidence fully
substantiated the CAs conclusion.
The Spouses Ybaez acquired Lot
No. 18563 through the deed of
sale executed on June 21, 1978 by
Adriano in favor of Jose R. Ybaez.
Together with his siblings Fabian
Ybaez, Carmen Ybaez-
Tagimacruz, Fe Ybaez-Alison, and
Dulcisima Ybaez-Tagimacruz,
Adriano had supposedly inherited
Lot No. 18563 from Casimiro, their
father, who had died intestate on
July 3, 1968. Holding themselves
as the heirs and successors-in-
interest of Casimiro, they had then
executed on August 29, 1977 the
Extrajudicial Declaration of Heirs
with an Extrajudicial Settlement of
Estate of Deceased Person and
Deed of Absolute Sale, whereby
they divided and adjudicated Lot
No. 18563 among themselves, and
then sold the entire lot to Adriano.
But, as the CA correctly found, the
Spouses Ybaez held no right to
Lot No. 18563 because Adriano,
their seller, and his siblings were
not the owners of Lot No. 18563.
Indeed, Casimiro had absolutely
conveyed his interest in Lot No.
18563 to Aznar Brothers under
the Deed of Absolute Sale of
March 21, 1964 with the marital
consent of Maria Daclan,
Casimiros surviving spouse and
the mother of Adriano and his
siblings. Considering that such
conveyance was effective and
binding on Adriano and his
siblings, there was no valid
transmission of Lot No. 18563
upon Casimiros death to any of
said heirs, and they could not
legally adjudicate Lot No. 18563
unto themselves, and validly
transfer it to Adriano. The
conveyance by Adriano to Jose R.
Ybaez on June 21, 1978 was
absolutely void and ineffectual.
There is also no question that the
Spouses Ybaez were aware of the
conveyance of Lot No. 18563 by
Casimiro to Aznar Brothers
considering that the Deed of
Absolute Sale of March 21, 1964
between Casimiro and Aznar
Brothers was registered in the
book of registry of unregistered
land on the same day pursuant to
their agreement. Such registration
constituted a constructive notice of
the conveyance on the part of the
Spouses Ybaez pursuant to
Section 194 of the Revised
Administrative Code of 1917, as
amended by Act No. 3344, which
provided as
follows:chanRoblesvirtualLawlibra
ry
Section 194. Recording of
instruments or deeds relating
to real estate not registered
under Act Numbered Four
hundred and ninety-six or
under the Spanish Mortgage
Law. No instrument or deed
establishing, transmitting,
acknowledging, modifying or
extinguishing rights with respect
to real estate not registered under
the provisions of Act Numbered
Four hundred and ninety-six,
entitled The Land Registration
Act, and its amendments, or
under the Spanish Mortgage
Law,shall be valid, except as
between the parties thereto,
until such instrument or deed
has been registered, in the
manner hereinafter prescribed,
in the office of the register of
deeds for the province or city
where the real estate lies.
It shall be the duty of the register
of deeds for each province or city
to keep a day book and a register
book of unregistered real estate, in
accordance with a form to be
prepared by the Chief of the
General Land Registration Office,
with the approval of the Secretary
of Justice. The day book shall
contain the names of the parties,
the nature of the instrument or
deed for which registration is
requested, the hour and minute,
date and month of the year when
the instrument was received. The
register book shall contain, among
other particulars, the names, age,
civil status, and the residences of
the parties interested in the act or
contract registered and in case of
marriage, the name of the wife, or
husband, as the case may be, the
character of the contract and its
conditions, the nature of each
piece of land and its improvements
only, and not any other kind of real
estate or properties, its situation,
boundaries, area in square meters,
whether or not the boundaries of
the property are visible on the land
by means of monuments or
otherwise, and in the affirmative
case, in what they consist; the
permanent improvements existing
on the property; the page number
of the assessment of each property
in the year when the entry is
made, and the assessed value of
the property for that year; the
notary or the officer who
acknowledged, issued, or certified
the instrument or deed; the name
of the person or persons who,
according to the instrument, are in
present possession of each
property; a note that the land has
not been registered under Act
Numbered Four hundred and
ninety-six nor under the Spanish
Mortgage Law; that the parties
have agreed to register said
instrument under the provisions of
this Act, and that the original
instrument has been filed in the
office of the register of deeds,
indicating the file number, and that
the duplicate has been delivered to
the person concerned; the exact
year, month, day, hour, and minute
when the original of the
instrument was received for
registration, as stated in the day
book. It shall also be the duty of
the register of deeds to keep an
index-book of persons and an
index-book of estates, respectively,
in accordance with a form to be
also prepared by the Chief of the
General Land Registration Office,
with the approval of the Secretary
of Justice.
Upon presentation of any
instrument or deed relating to real
estate not registered under Act
Numbered Four hundred and
ninety-six and its amendments or
under the Spanish Mortgage Law,
which shall be accompanied by as
many duplicates as there are
parties interested, it shall be the
duty of the register of deeds to
ascertain whether said instrument
has all the requirements for proper
registration. If the instrument is
sufficient and there is no
legitimate objection thereto, or in
case of there having been one, if
the same has been dismissed by
final judgment of the courts, and if
there does not appear in the
register any valid previous entry
that may be affected wholly or in
part by the registration of the
instrument or deed presented, and
if the case does not come under
the prohibition of section fourteen
hundred and fifty-two of Act
Numbered Twenty-seven hundred
and eleven, the register of deeds
shall register the instrument in the
proper book. In case the
instrument or deed presented has
defects preventing its registration,
said register of deeds shall refuse
to register it until the defects have
been removed, stating in writing
his reasons for refusing to record
said instrument as requested. Any
registration made under this
section shall be understood to
be without prejudice to a third-
party with a better right.
The register of deeds shall be
entitled to collect in advance as
fees for the services to be
rendered by him in accordance
with this Act, the same fees
established for similar services
relating to instruments or deeds in
connection with real estate in
section one hundred fourteen of
Act Numbered Four hundred
ninety-six entitled The Land
Registration Act, as amended by
Act Numbered Two thousand eight
hundred and sixty-six. (Emphasis
in the original; bold italics
supplied.)
Although a deed or instrument
affecting unregistered lands would
be valid only between the parties
thereto, third parties would also be
affected by the registered deed or
instrument on the theory of
constructive notice once it was
further registered in accordance
with Section 194, i.e., the deed or
instrument was written or
inscribed in the day book and the
register book for unregistered
lands in the Office of the Register
of Deeds for the province or city
where the realty was located. As
ruled inGutierrez v. Mendoza-
Plaza:36chanrobleslaw
The non-registration of the
aforesaid deed does not also affect
the validity thereof. Registration is
not a requirement for validity of
the contract as between the
parties, for the effect of
registration serves chiefly to bind
third persons. The principal
purpose of registration is
merely to notify other persons
not parties to a contract that a
transaction involving the
property has been entered into.
The conveyance of unregistered
land shall not be valid against any
person unless registered, except
(1) the grantor, (2) his heirs and
devisees, and (3) third persons
having actual notice or knowledge
thereof. As held by the Court of
Appeals, petitioners are the heirs
of Ignacio, the grantor of the
subject property. Thus, they are
bound by the provisions of the
deed of donation inter vivos.
The effect on third parties of the
constructive notice by virtue of the
registration of the deed or
instrument was aptly illustrated
in Bautista v. Fule,37 where the
Court pronounced that the
subsequent buyer of unregistered
land sold at an execution sale,
which the purchaser at the public
auction registered under Act No.
3344 seven days after that sale,
was deemed to have constructive
notice of the sale, and, therefore,
could not be entitled to the rights
of a purchaser in good faith. The
Court emphasized that as to lands
not registered under either
the Spanish Mortgage Law or
theLand Registration Act, the
registration under Act No. 3344
should produce its effects against
third persons if the law was to
have utility at all.38chanrobleslaw
It is worth mentioning that Act No.
3344 (approved on December 8,
1926) was the governing law at the
time of the execution of the deed
of absolute sale of March 21, 1964
between Casimiro and Aznar
Brothers, and the deed of absolute
sale of February 17, 1967 between
Tanuco and Aznar Brothers. Both
deeds were registered pursuant to
Section 194; while, on the other
hand, the sale between Adriano
and Jose R. Ybaez on June 21,
1978 was covered by the P.D. No.
1529, also known as theProperty
Registration Decree (whose
effectivity was upon its approval
on June 11, 1978).39chanrobleslaw
Section 3 of P.D. No. 1529, albeit
expressly discontinuing the system
of registration under theSpanish
Mortgage Law, has considered
lands recorded under that system
as unregistered land that could
still be recorded under Section 113
of P.D. No. 1529 until the land
shall have been brought under the
operation of the Torrens system;
and has provided that [t]he books
of registration for unregistered
lands provided under Section 194
of the Revised Administrative
Code, as amended by Act No.
3344, shall continue to remain in
force; provided, that all
instruments dealing with
unregistered lands shall
henceforth be registered under
Section 113 of this Decree. It is
clear, therefore, that even with the
effectivity of P.D. No. 1529, all
unregistered lands may still be
registered pursuant to Section 113
of P.D. No. 1529, which essentially
replicates Section 194, as
amended by Act No. 3344, to the
effect that a deed or instrument
conveying real
estate notregistered under the
Torrens system should affect only
40
the parties thereto unless the deed
or instrument was registered in
accordance with the same
section. chanrobleslaw
41
The only exception to the rule on
constructive notice by registration
of the deed or instrument affecting
unregistered realty exists in favor
of a third party with a better
right. This exception is provided
in Section 194, as amended by Act
No. 3344, to the effect that the
registration shall be understood
to be without prejudice to a third
party with a better right; and in
paragraph (b) of Section 113 of
P.D. No. 1529, to the effect that
any recording made under this
section shall be without prejudice
to a third party with a better
right. As to who is a third party
with better right under these
provisions is suitably explained
in Hanopol v. Pilapil,42 a case
where the sale of unregistered
land was registered under Act No.
3344 but the land was sold twice,
as
follows:chanRoblesvirtualLawlibra
ry
It thus appears that the better
right referred to in Act No. 3344
is much more than the mere prior
deed of sale in favor of the first
vendee. In the Lichauco case just
mentioned, it was the
prescriptive right that had
supervened. Or, as also suggested
in that case, other facts and
circumstances exist which, in
addition to his deed of sale, the
first vendee can be said to have
better right than the second
purchaser.43 (Bold emphasis
supplied.)
The Court also observes in Sales v.
Court of Appeals,44 a case
involving parties to a deed of
donation who had agreed to
register the instrument under Act
No. 3344 but failed to do so, that
the better right of a third party
relates to other titles which a
party might have acquired
independently of the unregistered
deed such as title by
prescription.45 But the exception
does not obviously apply to the
Spouses Ybaez because they
acquired their right from Adriano
who did not hold any legal or
equitable interest in Lot No. 18563
that he could validly transfer to the
Spouses Ybaez.chanrobleslaw
3.
Estoppel by laches did not bar
Aznar Brothers right over Lot
No. 18563
Unexpectedly, the CA disregarded
its aforecited correct conclusion on
Aznar Brothers ownership of Lot
No. 18563, and instead ruled that
estoppel by laches had already
barred Aznar Brothers dominical
claim over Lot No. 18563. It
ratiocinated
thusly:chanRoblesvirtualLawlibrar
y 18563. It insists that its action to
But then, there were pre-existing
and supervening circumstances
which effectively quashed the
dominical claim of plaintiff-
appellant over the subject land.
Plaintiff-appellant was never in
possession of the land which it
bought. Even after buying the land
from Casimiro Ybaez, plaintiff-
appellant did not take possession
of it. On the other hand, the heirs
of Casimiro Ybaez took
possession of said land upon the
latters death. Said heirs sold their
shares on said land to one of their
co-heirs, Adriano Ybaez, who in
turn, sold the whole land to
defendant appellees, the spouses
Jose and Magdalena Ybaez. The
latter continued possessing said
land, tax declared it, paid realty
taxes thereon and finally secured a
free patent and title over it. Up to
the present, defendant-appellees
are in possession of the land as
owners thereof.
There is absolutely no doubt that
in law, plaintiff-appellant had lost
its dominical and possessory claim
over the land for its inaction from
1964 when it bought the land up to
1989 when it filed the Complaint in
the trial court or a long period of
25 years. This is called estoppel
by laches.46
Aznar Brothers now assails this
adverse ruling under its first
assigned error by pointing out that
the CA erred in relying on estoppel
by laches, a rule of equity, to bar
its dominical claim over Lot No.
declare the nullity of
the Extrajudicial Declaration of
Heirs with Extrajudicial
Settlement of Estate of Deceased
Person and Deed of Absolute
Sale dated August 29, 1977, and
the Deed of Absolute Sale of June
21, 1978 was imprescriptible
under Article 1410 of theCivil
Code; and that on the assumption
that accion publiciana would
prescribe in ten years, its filing of
the original complaint on May 26,
1989 was done within the 10-year
period counted from August 14,
1979, the date of the issuance of
OCT No. 2150 in the name of Jose
R. Ybaez.
The Spouses Ybaez counter that
the CA was correct because Aznar
Brothers did not assert possession
and ownership over the land for 25
years; that it brought its complaint
only in 1989 after they had
undergone the proceedings in
rem for the issuance of OCT No.
2150; that it did not challenge
their application for the free
patent or the proceedings for the
issuance of OCT No. 2150; that it
did not also oppose the conduct of
the survey of the land relevant to
the application for the free patent
despite the notice of the survey
given by the surveying engineer to
the adjoining lot owners; that
during the hearing of the case,
Jose R. Ybaez testified that only et sui juris contemptores (For time
three hectares of the land is a means of dissipating
originally owned by Casimiro had obligations and actions, because
been sold to it, the rest having time runs against the slothful and
been retained by Casimiro that careless of their own
became the subject of the rights). Truly, the law serves
49

extrajudicial settlement by his those who are vigilant and diligent,

heirs, who had then sold that not those who sleep when the law
retained portion to Jose R. Ybaez; requires them to
that the tax declarations presented act. chanrobleslaw
50

by it described property distinct

from that covered by OCT No. For laches to bar a claim, four
2150, although it claimed that the elements must be shown, namely:
same property had been sold to it (1) conduct on the part of the
twice by Casimiro and Tanuco; and defendant, or one under whom he
that on at least three occasions, it claims, giving rise to a situation of
had attempted to buy the lot from which a complaint is made and for
them but the negotiations did not which the complainant seeks a
push through. remedy; (2) delay in asserting the
complainants right, the
We hold and declare that the CAs complainant having had
ruling in favor of the Spouses knowledge or notice of defendants
Ybaez was devoid of legal and conduct and having been afforded
factual support, and should be an opportunity to institute a suit;
rightfully reversed. (3) lack of knowledge or notice on
the part of the defendant that the
Laches is the failure or neglect for complainant would assert the right
an unreasonable and unexplained on which he bases his suit; and (4)
length of time to do that which by injury or prejudice to the
exerting due diligence a party defendant in the event that the
could and should have done relief is accorded to the
earlier.47 A suit that is barred on complainant, or the suit is not held
the ground of laches is also called to be barred.51chanrobleslaw
a stale demand. Laches is based on
grounds of public policy that The CA incorrectly barred the
requires, for the peace of society, claim of Aznar Brothers to Lot No.
the discouragement of stale claims 18563 because of laches. For one,
and, unlike the statute of Aznar Brothers immediately
limitations, is not a mere question registered the purchase in
of time but is principally a accordance with Act No. 3344, the
question of the inequity or law then governing the
unfairness of permitting a right or registration of unregistered land.
claim to be enforced or Its action in that regard ensured
asserted. Tempus enim modus
48
the protection of the law as to its
tollendi obligationes et actiones, ownership of the land, and evinced
quia tempus currit contra desides that it did not abandon its
ownership. Verily, its maintaining
Lot No. 18563 as an unregistered
land from then on should not
prejudice its rights; otherwise, its
registration pursuant to law would
be set at naught. Secondly, the
supposed acts of possession of Lot
No. 18563 exercised by the
Spouses Ybaez from the time of
their purchase from Adriano,
including causing it to be surveyed
for purposes of the application for
free patent, did not prejudice
Aznar Brothers interest because
the registration under Act No.
3344 had given constructive notice
to the Spouses Ybaez of its prior
acquisition of the land. Thereby,
the Spouses Ybaez became bound
by the sale from Casimiro to Aznar
Brothers, and rendered them
incapable of acquiring the land in
good faith from Adriano.
Consequently, Jose R. Ybaezs
intervening application for the free
patent, the grant of the free patent
and the issuance of OCT No. 2150
thereafter did not supplant the
superior rights and interest of
Aznar Brothers in Lot No. 18563.
And, lastly, the Spouses Ybaez
would not suffer any prejudice
should Aznar Brothers prevail
herein, for Adriano, their
predecessor-in-interest, did not
transmit to them any kind or
degree of right or interest in Lot
No. 18563.
4.
Lot No. 18563, not being land
of the
public domain, was not subject
to the free patent
issued to the Spouses Ybaez
The Spouses Ybaezs position
rests on their having been issued
the free patent and OCT No. 2150.
The records do not support the
position of the Spouses Ybaez.
Although Jose R. Ybaez declared
in paragraph 4 of his application
for the free patent that Lot No.
18563 was public land, and was
not then claimed or occupied by
any other person;52 and further
declared under oath in the
affidavit submitted to support his
application for the free patent that
he recognize(d) Lot No. 18563
as public land, his declarations
did not establish that Lot No.
18563 was land of the public
domain. Nor did the Spouses
Ybaez show that Jose R. Ybaez
had acted in good faith in applying
for the free patent pursuant to
Commonwealth Act No. 141 (The
Public Land Act), as amended.
Instead, they were fully aware of
the nature and character of the
land as private. In the Deed of
Absolute Saledated June 21, 1978,
Adriano stated that he had been
the absolute owner in fee simple
free from all liens and
encumbrances whatsoever of Lot
No. 18563; and that he (Adriano)
had held the perfect right to
convey the same (as) the
purchaser of the same as per
Extrajudicial Declaration of Heirs
with extrajudicial settlement of
estate of deceased person and
deed of absolute sale.53 In view of
the privity between Adriano and
the Spouses Ybaez as to the land,
the formers statements concluded
the latter.54chanrobleslaw

In contrast, Aznar Brothers
acquired Lot No. 18563 as the
private land of Casimiro. In
their Deed of Absolute Sale of
March 21, 1964, Casimiro
expressly warranted that the land
was his own exclusive
property.55 With the ownership of
Aznar Brothers being thus
established, the free patent issued
to Jose R. Ybaez by the
Government was invalid for the
reason that the Government had
no authority to dispose of land
already in private ownership.56 The
invalidity of the free patent
necessarily left OCT No. 2150 a
patent nullity. As ruled in Heirs of
Simplicio Santiago v. Heirs of
Mariano E.
Santiago: chanrobleslaw
57
The settled rule is that a free
patent issued over a private land is
null and void, and produces no
legal effects whatsoever. Private
ownership of land as when
there is a prima facie proof of
ownership like a duly
registered possessory
information or a clear showing
of open, continuous, exclusive,
and notorious possession, by
present or previous occupants
is not affected by the issuance
of a free patent over the same
land, because the Public Land
Law applies only to lands of the
public domain. The Director of
Lands has no authority to grant
free patent to lands that have
ceased to be public in character
and have passed to private
ownership. Consequently, a
certificate of title issued
pursuant to a homestead patent
partakes of the nature of a
certificate issued in a judicial
proceeding only if the land
covered by it is really a part of
the disposable land of the
public domain. (Bold emphasis
supplied)
To the same effect was Agne v.
Director of Lands,58 where the
Court declared that if land covered
by free patent was already the
private property of another and,
therefore, not part of the
disposable land of the public
domain, the patentee did not
acquire any right or title to the
land.
The principle of indefeasibility of
the Torrens title does not protect
OCT No. 2150 because the free
patent on which the issuance of
the title was based was null and
void. A direct attack as well as a
collateral attack are proper, for, as
the Court declared in De Guzman
v. Agbagala:59chanrobleslaw
x x x. An action to declare the
nullity of a void title does not
prescribe and is susceptible to
direct, as well as to collateral,
attack. OCT No. P-30187 was
registered on the basis of a free
patent which the RTC ruled was
issued by the Director of Lands
without authority. The petitioners
falsely claimed that the land was
public land when in fact it was not
as it was private land previously
owned by Carmen who inherited it
from her parents. x x x.
 the Province of Cebu in the name
Nonetheless, it appears that Aznar of respondent Jose R. Ybaez,
Brothers actually mounted a direct married to Magdalena Marcos;
attack on the title of the Spouses and ORDERS respondents to pay
Ybaez. In the original complaint, the costs of suit.
Aznar Brothers sought judgment
ordering them to [s]urrender all SO ORDERED.cralawlawlibrary
the documents pertaining to the
Free Patent for cancellation. Such
relief was predicated on the
allegation that the land in question
was already adjudicated as THIRD DIVISION
private property of the plaintiff
through the Deed of Absolute G.R. No. 171286, June 02, 2014
Sale of March 21, 1964. Aznar
Brothers reiterated the relief in DOLORES
the amended complaint. In its CAMPOS, Petitioner, v. DOMINA
second amended complaint, it DOR ORTEGA, SR.1 AND JAMES
expressly prayed for the SILOS, Respondents.
cancellation and annulment of
OCT No. 2150. By such pleadings, DECISION
it directly attacked OCT No. 2150,
because their object was to nullify PERALTA, J.:
the title, and thus challenge the
judgment or proceeding pursuant This petition for review
to which the title was on certiorari under Rule 45 of the
decreed.60chanrobleslaw 1997 Revised Rules on Civil
Procedure (Rules) seeks the
WHEREFORE, the reversal of the August 12, 2005
Court REVERSES and SETS Decision2 and January 17, 2006
ASIDE the decision promulgated Resolution3 of the Court of Appeals
on October 10, 2002 by the Court (CA) in CA-G.R. CV No. 76994,
of Appeals partially affirming the which set aside the November 12,
judgment rendered on March 8, 2002 Decision4 of the
1996 by the Regional Trial Court, Mandaluyong City Regional Trial
Branch 10, in Cebu Court, Branch 213 (RTC) and, in
City; DECLARES petitioner AZNA effect, dismissed petitioners
R BROTHERS REALTY complaint for specific performance
COMPANYthe sole and exclusive and damages.
owner of the unregistered parcel
of land known and described as On August 17, 1999, petitioner
Lot No. Dolores Campos, through her
18563; CANCELS and NULLIFIE attorney-in-fact, Salvador
S Free Patent No. VII-1118514 and Pagunsan (Pagunsan), filed a case
Original Certificate of Title No. for specific performance with
2150 of the Registry of Deeds of damages against respondents
Dominador Ortega, Sr. (Ortega, a verbal understanding with
Sr.) and James Silos (Silos). The Clarita Boloy, daughter-in-law of
Petition stated, among others, the former, to allow plaintiff to
that:ChanRoblesVirtualawlibrary introduce improvements and
renovations on the structure, in
2. Plaintiff, and her husband which she incurred expenses
[Ernesto Campos], along with their amounting to about P10,000.00. It
family, occupied the entire second was further agreed that said
level as well as the front portion of amount shall be accordingly
the ground level of a residential applied to their monthly rentals. x
structure located at No. 2085 F. x x. The foregoing agreement,
Blumentritt Street, Mandaluyong however, was never followed and
City. The lot on which the said plaintiff was made to continue
structure is standing is owned by paying the monthly obligations
the government, while the because of the assurance of Clarita
structure itself is owned by Boloy that the expenses incurred
[Dominga Boloy] from whom by plaintiff will just be reimbursed
plaintiff leased the same beginning in full, but even this latter
in 1966; agreement never materialized;
2.1 Plaintiff had, in fact, paid the
real estate taxes in behalf of 6. In 1987, Walter Boloy stepped
Dominga Boloy in 1987, including into the situation and thru counsel
the arrearages that accumulated demanded from the plaintiff and
from 1979 in view of the apparent family the immediate vacation of
abandonment by Dominga Boloy the subject premises. An ejectment
on these obligations x x x; suit was eventually filed against
3. In 1977, under and pursuant to plaintiff but [it] was later
the Zonal Improvement Program dismissed by the Metropolitan
[ZIP] of the then Metro Manila Trial Court (Branch 59,
Commission,6 in coordination with Mandaluyong City) in its February
the Local Government of 12, 1986 decision x x x;
Mandaluyong, a census of the Hulo
estate, where plaintiffs dwelling is 7. After receiving the said
located, was conducted wherein decision, and after having verified
plaintiff was among those her husbands status as abona
censused and qualified as a bona fide [occupant], plaintiff forthwith
fide occupant x x x; authorized [her] nephew Salvador
Pagunsan to follow up with the
4. As a consequence of having NHA the matter concerning the
qualified, plaintiff was assigned an award of lot to them in line with
identifying house tag number 77- the [ZIP], more particularly after
00070-08 on August 20, 1977 x x learning that all bona fide
x; occupants may be allowed to buy
the structure if the owner has
5. In 1979, after the death of the already died;
owner Dominga Boloy, plaintiff had
8. In the course of [the follow up],
Salvador Pagunsan was informed 12. But it was learned by plaintiff,
by one Antonio Fernando thru a however (sic), that on the same
letter of July 20, 1987, that if date, February 4, 1988, the
Ernesto Campos, who was duly property [was already] awarded to
censused as a bona fide occupant, James Silos and Dominador
may be able to buy the property Ortega, [Sr.], and that
from Mr. Walter Boloy, Ernesto on November 23, 1987, just four
Campos may be awarded the lot on days after the initial
which the structure is located; meeting scheduled by the [AAC] of
the NHA (on November 19, 1987,
9. On November 19, 1987, paragraph 9, supra) a Deed of
plaintiffs attorney-in-fact, Absolute Sale [was] executed by
Salvador Pagunsan attended the and between Clarita Boloy (in
meeting scheduled by the representation of Helen Telos
Arbitration and Awards Committee Boloy Williams) and Dominador
[AAC] held at the Budget Office of Ortega, [Sr..] over Lot 17, Block
the Mandaluyong Municipal Hall x 7 x x x. This despite the fact that
x x but[,] except for Atty. Eddie during the said initial
Fernandez, who represented the meeting, plaintiff was given one
Local Government of month to exercise the option of
Mandaluyong, no other buying the property;
representative from the NHA
came. In said meeting, Atty. 13. In paragraph 5 of the
Fernandez gave plaintiff one aforementioned deed, the xxx
month, or until December 19, [V]endor warrants her legal and
1987, to buy the property absolute ownership of the
denominated as Lot 17, Block 7, aforesaid semi-apartment
Phase III, of the Hulo estate; house ..., which is highly
disputable considering that no due
10. Plaintiff did not accede to the transfer whatsoever was made by
offer since the lot occupied by the structure owner Dominga
them and where they were duly Boloy who was still single at the
censused as occupants is Lot 18, time of her death and who died
Block 7, whereas the one offered without issue. Moreover, in the
to be sold is Lot 17, which pertains earlier ejectment suit filed by
to a different owner; Walter Boloy (paragraph 6, supra),
his relation [to] Dominga Boloy
11. Another meeting was set on was never proven[;] hence, his
December 17, 1987, this time at claim of any authority, and that of
the Administrators Office of the her daughter Helen Telos Boloy
Mandaluyong Municipal Hall x x x. Williams, to deal with the property
Again, nobody attended from the in any manner is completely
NHA. On February 4, 1988, yet baseless and a sham;
another meeting was set, and the
same result happened; 14. On February 19, 1988, a
similar, or almost identical, Deed
of Absolute Sale x x x was
executed by and between the same
parties in the instrument executed
on November 23, 1987, only that
this time, in [comparison] with the
first deed of sale, it is very
noticeable that the name of
plaintiff Dolores Campos which
was mentioned in paragraph 3 of
the first deed as one of the renters
and as a home-lot applicant
wasomitted in this second deed;
15. Plaintiff, thru her
representative, inquired with the
NHA and questioned the award of
the lot to defendants who are
disqualified for not having been
duly censused either as renters or
sharers, and also the matter
regarding the alteration the lot
number actually being occupied by
plaintiff. But the NHA could not
offer a satisfactory explanation to
the seemingly irregular process. A
certain Ms. Myrna Cuarin of the
Legal Department refused to show
the book containing the list of the
qualified occupants and their
respective true house tag number;
16. Plaintiff only came to know
later that a Transfer Certificate of
Title [was already] issued to
Dominador Ortega, [Sr.] and James
Silos over the lot despite the
appeal made by plaintiff with the
NHA, much to her damage and
prejudice;
17. Defendants Dominador Ortega,
Sr. and James Silos are disqualified
to become lot owners since they
were not duly censused as renters
or sharers, pursuant to the ZIP
Guideline Circular No. 1 dated
[September 16, 1977] of the NHA
x x x. Moreover, only those who
have been actually residing in the
ZIP Project area before August 15,
1975shall be considered to qualify
as beneficiaries, but herein
defendants have commenced their
residence only after the said
date[;] hence, they are not
qualified beneficiaries, but just the
same the lot was awarded by the
NHA to them;
18. The promptitude of the award
by the NHA to herein defendants
was maneuvered (sic) by the latter
in circumvention of the real right
that has already accrued to
plaintiff as a bona fide applicant
who has duly qualified as a
beneficiary. In fact, she had been
given the right to purchase the
structure only to find out that it
had been already transferred to
another in complete disregard of
herein plaintiffs right (see
paragraph 12, supra);
19. As a result of the bypassing of
plaintiffs right[,] she was
dislocated, [has] suffered sleepless
nights, mental anguish, wounded
feelings, and undue
embarrassment, among others, the
assessment of which in pecuniary
terms is left to the sound
discretion of this Honorable Court.
WHEREFORE, in view of the
foregoing premises, it is most
respectfully prayed of this
Honorable Court that after due
hearing a judgment be rendered
declaring the acquisition by
defendants of Lot 18, Block 7 of
the Hulo Estate void for being in
fraud of herein plaintiff; directing
the defendants to surrender their
title to the [NHA]; and directing
the [NHA] to recognize plaintiffs
right to purchase the structure and
giving her reasonable opportunity
to exercise said right.7
Respondents countered that the
complaint stated no cause of
action, and that, if any, such cause
of action is already barred by prior
judgment. They noted petitioners
admission in the Verification that
an action for recovery of
possession was commenced
against her by respondents before
the Pasig City RTC, Branch 153,
involving the same property; that it
was resolved in respondents favor
on October 12, 1992; and that
such decision was affirmed by the
CA on May 30, 1996 and became
final and executory on September
14, 1996. Respondents also
contended that the case was
prematurely filed since there was
no prior recourse to the barangay
conciliation as required by Section
412 of the Revised Katarungang
Pambarangay Law. Lastly,
respondents argued that they are
registered owners of the land in
question as well as the house built
thereon by virtue of Transfer
Certificate of Title (TCT) No.
13342 and tax declarations, and
that the Torrens title cannot be
altered, modified or cancelled
except through a direct
proceeding.
Trial ensued. Presented as
witnesses for the plaintiff were
petitioner herself, Pagunsan, and
Dolores Abad Juan, who claimed to
be a bookkeeper of the NHA and a
member of its census team in
1977.8 Only Ortega, Sr. testified
for and in behalf of the defendants.
On November 12, 2002, the RTC
ruled in favor of petitioner. The
dispositive portion of the Decision
reads:ChanRoblesVirtualawlibrary
WHEREFORE, accordingly the
acquisition of [DOMINADOR] V.
ORTEGA and JAMES SILOS of Lot
18 Block 7 of the Hulo estate is
hereby declared VOID for being
violative of the right of the
plaintiff. Herein defendants are
hereby ordered to surrender their
title to the National Housing
Authority (NHA). Finally, the
[NHA] is hereby ordered to
recognize plaintiffs right to
purchase the structure and give
her reasonable time within which
to exercise said right.
No pronouncement as to cost.
SO ORDERED.9
For lack of clear and convincing
proof, the RTC rejected the
allegation that respondents are
guilty of committing fraud and,
consequently, denied petitioners
claim for damages. Despite this, it
held that the principle of res
judicata is inapplicable and that
petitioner has a vested right over
the subject property. The trial
court
opined:ChanRoblesVirtualawlibrar
y
x x x The case being referred to by
defendants is for the recovery of
possession filed in Pasig City
Court, which judgment was
confirmed by the Honorable Court
of Appeals. In that case, the
appellate [court] ruled that the
defendants in this case [have]
better rights over the said
property, it being titled under their
names. Therefore, the cause of
action in the previous case
involves the right of possession
over the disputed property. In the
instant case, the cause of action is
the violation of the plaintiffs right
to exercise their right to buy the
property in dispute within the
period given by the Arbitration and
Awards Committee of the National
Housing Authority in
[coordination] with the Local
Government of Mandaluyong City.
Thus, this court was never swayed
by the [defendants] argument that
res judicata is present. There is no
identity of the cause of action
between the Pasig case and the
instant case.
Under the Zonal Improvement
Program Guideline Circular No. 1
dated September 16, 1977 of the
National Housing [Authority],
plaintiff is a qualified beneficiary
of NHAs Zonal Improvement
Program[,] she being in the
premises since 1966 as lessee of a
residential structure. According to
the aforementioned circular, only
occupants who have been actually
residing in the ZIP project area
either as sharer or renter before
August 15, 1975 are qualified
beneficiaries under this NHA
program. The plaintiff was given
until December 19, 1987 within
which to buy the property located
at Lot 17, Block 7[,] Phase III of
the Hulo estate but did not
exercise her right because the
property involved is different from
what she had been occupying since
1966 until they left. Before any
clarification was made on this
matter and before plaintiff could
exercise [her] right to purchase,
[she] learned that the property, Lot
18, Block 7, Phase III of Hulo
estate was already sold to herein
defendants in violation of her
right. The court is convinced that
plaintiff has acquired a vested
right over the subject property.
Such right is protected by law and
a violation of said right will give
rise to a valid cause of action.10
Upon appeal by respondents, the
CA reversed the trial courts
decision. In ruling that petitioner
has no vested right over the
subject parcel of land and the
residential structure standing
thereon, the appellate court
pronounced:ChanRoblesVirtualawl
ibrary
To our mind, [respondents]
correctly underscore the fact that,
even from the testimonial evidence
proffered by [petitioner], there is
no gainsaying [of] their lease of
the first floor of the residential
structure owned by Dominga
Boloy. Although the
commencement of their contract
with the latter had, admittedly, not
been exactly established, the
record ineluctably shows that both
[respondents] had attended the
meetings conducted by the NHA
Arbitration Committee for the
purpose of awarding the lots
covered by the ZIP. Even more
significantly, [respondent] [Ortega,
Sr.] was also included in the
NHAs 1977 survey of the Hulo
Estate and was, in fact, issued a
separate identifying house tag
alongside [petitioners] husband.
In contrast, [petitioners] lease of
the second floor since 1966 clearly
qualified her as a beneficiary
under the ZIP Guideline Circular
No. 1 which employs the term to
refer to those who permanently
reside in the project site either as
owners of residential structures or
renters/sharers thereof before
August 15, 1975 up to the time
that the area has been adopted as
a slum-upgrading site. Unlike
[respondents] who immediately
availed of the opportunity they
were afforded to purchase their
own residential lot, however, it
appears that [petitioner] demurred
when the NHA offered her the
chance of buying Lot 17, Block 7 of
the Hulo Estate until December 19,
1987. On this score alone, we find
that [petitioner] cannot be
presently heard to complain that
she had been unjustifiably
deprived of her right as a qualified
beneficiary under the aforesaid
program.
[Petitioner] had, of course,
impressed upon the trial court that
the reason for her refusal was the
fact that, as occupant of the
residential structure on Lot 18,
Block 7, she had been offered the
wrong lot by the NHA. It bears
emphasizing, however, that ZIP
Guideline Circular No. 1 does not
give renters or sharers a
preferential right to purchase a
particular lot within the ZIP
project site. While actual owners of
structures are thereunder given
priority to stay in the project site,
house renters or [sharers] like
[petitioner] are only entitled to
accommodation in a relocation
site, if one is available, or allowed
to continue within the project area,
together with the owner of the
structures they are renting. In
this particular regard, even
[petitioner] conceded that she
could have acquired the subject lot
had she purchased the residential
structure owned by Dominga Boloy
or, at least, her allotted 1/3 portion
thereof.
Viewed in the foregoing light, it
would appear that [respondents]
further acquisition of the subject
residential structure from the
successors-in-interest of Dominga
Boloy should have likewise
militated against [petitioners]
cause. Indeed, the record shows
that [respondent] [Ortega, Sr.]
initially purchased 1/3 of said
residential structure in the
November 23, 1987 Deed of
Absolute Sale[,] which, in
recognition of their co-occupancy,
also gave both [respondent] Silos
and [petitioner] the option to buy
their respective 1/3 portion
thereof. After the conclusion of the
meetings called by the NHA
Arbitration Committee and upon
[petitioners] failure to exercise
said option, the entire structure
was, finally, sold in favor of both
[respondents] thru the Deed of WHETHER OR NOT THE
Sale dated February 19, 1988.11 HONORABLE COURT OF
APPEALS ERRED IN REVERSING
The CA also gave credit to THE DECISION OF THE
respondents for causing the titling REGIONAL TRIAL COURT,
of the subject lot in their names, PARTICULARLY, IN FAILING TO
declaring it for taxation purposes, RECOGNIZE THAT PETITIONER
and paying the realty taxes due HAS ALREADY ACQUIRED A
thereon. While petitioners tax VESTED AND COGNIZABLE
declarations are considered as RIGHT RESPECTING THE
good indicia of possession in the PROPERTY.
concept of the owner, the appellate
court ruled that respondents WHETHER OR NOT THE
certificate of title is indefeasible HONORABLE COURT OF
and cannot be subject of a APPEALS ERRED IN UPHOLDING
collateral attack like petitioners THE PRESUMPTION OF
present complaint for specific REGULARITY OF OFFICIAL ACTS
performance and damages. Even if RESPECTING THE PROCESS OF
a transfer of title that is replete AWARD OF THE PROPERTY MADE
with badges of fraud and TO THE RESPONDENTS, AND
irregularities renders nugatory RULE OUT THE ATTENDANT
and inoperative the existing IRREGULARITIES AS
doctrines on land registration and INSUFFICIENT TO OVERCOME
land titles, the CA opined that THE SAID PRESUMPTION.12
petitioner lost sight of the fact that
the trial court discounted the The Court is unimpressed.
existence of fraud which she
imputed against respondents Like in petitioners case, one of the
acquisition of the subject parcel issues raised in Magkalas v.
and the fact that she did not National Housing Authority13 was
appeal such finding. In the end, for whether the demolition or
petitioners failure to present clear relocation of Caridad Magkalas
and convincing evidence to the structure would violate her vested
contrary, the appellate court rights over the subject property
upheld the presumption of under the social justice provisions
regularity of official acts and of the 1987 Constitution on the
resolved not to disturb the NHAs ground that she had been in its
award in favor of respondents. possession for forty (40) years.
Resolving that a censused owner
Petitioner moved for with assigned NHA tag number
reconsideration, but it was denied. acquired no vested right over the
Now before Us, the following subject property, We
issues for resolution were held:ChanRoblesVirtualawlibrary
raised:ChanRoblesVirtualawlibrary
Neither can it be successfully
argued that petitioner had already
acquired a vested right over the
subject property when the NHA
recognized her as the censused
owner by assigning to her a tag
number (TAG No. 77-0063). We
quote with approval the trial
court's pertinent findings on the
matter:
Plaintiff's structure was one of
those found existing during the
census/survey of the area, and her
structure was assigned TAG No.
77-0063. While it is true that NHA
recognizes plaintiff as the
censused owner of the structure
built on the lot, the issuance of the
tag number is not a guarantee for
lot allocation. Plaintiff had
petitioned the NHA for the award
to her of the lot she is occupying.
However, the census, tagging, and
plaintiff's petition, did not vest
upon her a legal title to the lot she
was occupying, but a mere
expectancy that the lot will be
awarded to her. The expectancy
did not ripen into a legal title when
the NHA, through Ms. Ines
Gonzales, sent a letter dated
March 8, 1994 informing her that
her petition for the award of the
lot was denied. Moreover, the
NHA, after the conduct of studies
and consultation with residents,
had designated Area 1, where the
lot petitioned by plaintiff is
located, as an Area Center.
A vested right is one that is
absolute, complete and
unconditional and no obstacle
exists to its exercise. It is
immediate and perfect in itself and
not dependent upon any
contingency. To be vested, a right
must have become a title legal or
equitable to the present or future
enjoyment of property.
Contrary to petitioner's position,
the issuance of a tag number in
her favor did not grant her
irrefutable rights to the subject
property. The "tagging of
structures" in the Bagong Barrio
area was conducted merely to
determine the qualified
beneficiaries and bona
fide residents within the area. It
did not necessarily signify an
assurance that the tagged
structure would be awarded to its
occupant as there were locational
and physical considerations that
must be taken into account, as in
fact, the area where petitioner's
property was located had been
classified as Area Center (open
space). The assignment of a tag
number was a mere expectant or
contingent right and could not
have ripened into a vested right in
favor of petitioner. Her possession
and occupancy of the said property
could not be characterized as fixed
and absolute. As such, petitioner
cannot claim that she was
deprived of her vested right when
the NHA ordered her relocation to
another area.14
Neither does petitioner have a
cognizable right respecting the
lot in question. Notably, she readily
admitted not exercising their
option to buy Boloys property
despite the knowledge that one of
the requirements before an
entitlement to an award of the
government-owned lot is that they
must own the subject
house.15cralawred owned a housing structure in Lot
17 aside from the one they were
Petitioner argues that what leasing in Lot 18.
prompted her refusal to purchase
was not a matter of whimsical Petitioner next alleges that the
preference, not really insisting on entire process was pock-marked
any preferential right, but on with irregularities too nagging to
imminent apprehension that the be ignored, and collectively
house that was being sold by Boloy outweighed the presumption of
is situated at Lot 17 while they regularity; that the meetings only
were occupying Lot 18; that the proved to be farcical, even
particular lot number is different embarrassing; and that the
from what she is applying; and repetitive absence of the persons
that said lot is actually occupied by necessary for those meetings could
another person who too may have not have been trifling or
already qualified as a ZIP insignificant since, as what later
beneficiary, resulting in conflict of proved to have transpired, the
award. She contends that she execution of a deed of conveyance
could not be compelled to for the property was already
suddenly become particularly taking place while petitioner was
interested in a lot that is still unsuspectingly relying on the
completely different from the one prospects of the scheduled
where the house structure she meetings. Particularly, she
occupies is situated and that the maintains that the brazen
structure owner in Lot 17 may not irregularity took place just four
be willing to sell the same. days after the initial meeting on
November 19, 1987 with the
The argument is untenable. execution of the Deed of Absolute
Petitioner is certainly confused. Sale on November 23, 1987 in
There should be no doubt that the favor of respondents who
object of the sale is a determinate surreptitiously and effectively pre-
thing, a semi-apartment house empted the option given her to
owned by Boloy and not the purchase the residential structure,
specific lot on which it was built. easing her out from the race, so to
Thus, it is totally immaterial if the speak. These fail to convince.
land on which the structure stood
was indicated as Lot 17 or Lot 18. The presence or absence of fraud
It should not have been a source of is a factual issue.16 As a general
needless concern on the part of rule, only questions of law may be
petitioner mainly because the lots raised in a petition for review
in the Hulo estate were at the time on certiorari filed with this Court
owned by the government prior to and factual findings of the trial
the actual award to qualified courts, when adopted and
beneficiaries. Likewise, petitioner confirmed by the CA, are final and
has not shown that Boloy, or conclusive on this Court, except
another specific person, actually when the CA judgment is based on
a misapprehension of facts or the
factual inferences are manifestly
incorrect or when that court
overlooked certain relevant facts
which, if properly considered,
would justify a different
conclusion.17cralawred
In this case, petitioner, as the
party alleging fraud in the
transaction and the one who bears
the burden of proof,18 miserably
failed to demonstrate that
respondents committed fraud or
that they connived with
government officials and
employees to cause undue damage
or prejudice to petitioner.
Petitioner did not present even a
single evidence to support the
view that the repetitive absences
of the persons necessary for the
meetings before the Arbitration
and Awards Committee were
intentional or done with malicious
intent. Also, as the CA found,
records would show that
respondent Ortega, Sr. initially
purchased 1/3 of the residential
structure on November 23, 1987,
per Deed of Absolute Sale, which,
recognizing his co-occupancy with
others, also gave respondent Silos
and petitioner the similar option to
buy their respective 1/3 portion.
Petitioner did not exercise the
option given. Hence, upon such
failure, the entire structure was
eventually sold to both
respondents through the Deed of
Sale dated February 19, 1988.
We agree with the CA that the case
for specific performance with
damages instituted by petitioner
effectively attacks the validity of
respondents' Torrens title over the
subject lot. It is evident that,
ultimately, the objective of such
claim is to nullify the title of
respondents to the property in
question, which, in turn,
challenges the judgment pursuant
to which the title was decreed.
This is a collateral attack that is
not permitted under the principle
of indefeasibility of Torrens title.
Section 48 of Presidential Decree
No. 1529, otherwise known as the
Property Registration Decree,
unequivocally
states:ChanRoblesVirtualawlibrary
SEC. 48. Certificate not subject to
collateral attack. - A certificate of
title shall not be subject to
collateral attack. It cannot be
altered, modified, or cancelled
except in a direct proceeding in
accordance with law.
A collateral attack transpires
when, in another action to obtain a
different relief and as an incident
to the present action, an attack is
made against the judgment
granting the title while a direct
attack (against a judgment
granting the title) is an action
whose main objective is to annul,
set aside, or enjoin the
enforcement of such judgment if
not yet implemented, or to seek
recovery if the property titled
under the judgment had been
disposed of.19 The issue on the
validity of title, i.e., whether or not
it was fraudulently issued, can only
be raised in an action expressly
instituted for that
purpose.20cralawred
The appropriate legal remedy that
petitioner should have availed is
an action for reconveyance. Proof
of actual fraud is not required as it
may be filed even when no fraud
intervened such as when there is
mistake in including the land for
registration.
Under the principle of constructive
trust, registration of property by
one person in his name, whether
by mistake or fraud, the real
owner being another person,
impresses upon the title so
acquired the character of a
constructive trust for the real
owner, which would justify an
action for reconveyance. In the
action for reconveyance, the
decree of registration is respected
as incontrovertible but what is
sought instead is the transfer of
the property wrongfully or
erroneously registered in another's
name to its rightful owner or to
one with a better right. If the
registration of the land is
fraudulent, the person in whose
name the land is registered holds
it as a mere trustee, and the real
owner is entitled to file an action
for reconveyance of the
property. cralawred
21
An action for reconveyance
resulting from fraud prescribes
four years from the discovery of
the fraud, which is deemed to have
taken place upon the issuance of
the certificate of title over the
property, and if based on an
implied or a constructive trust it
prescribes ten (10) years from the
alleged fraudulent registration or
date of issuance of the certificate
of title over the
property. However, an action for
22
reconveyance based on implied or
constructive trust is
imprescriptible if the plaintiff or
the person enforcing the trust is in
possession of the property.23 In
effect, the action for reconveyance
is an action to quiet title to the
property, which does not
prescribe.24 We said in Yared v.
Tiongco:25cralawred
The Court agrees with the CAs
disquisition that an action for
reconveyance can indeed be
barred by prescription. In a long
line of cases decided by this Court,
we ruled that an action for
reconveyance based on implied or
constructive trust must perforce
prescribe in ten (10) years from
the issuance of the Torrens title
over the property.
However, there is an exception to
this rule. In the case of Heirs of
Pomposa Saludares v. Court of
Appeals, the Court, reiterating the
ruling in Millena v. Court of
Appeals, held that there is but one
instance when prescription cannot
be invoked in an action for
reconveyance, that is, when the
plaintiff is in possession of the land
to be reconveyed. In Heirs of
Pomposa Saludares, this Court
explained that the Court, in a
series of cases, has permitted the
filing of an action for reconveyance
despite the lapse of more than ten
(10) years from the issuance of
title to the land and declared that
said action, when based on fraud,
is imprescriptible as long as the
land has not passed to an innocent
buyer for value. But in all those
cases, the common factual
backdrop was that the registered
owners were never in possession
of the disputed property. The
exception was based on the theory
that registration proceedings could
not be used as a shield for fraud or
for enriching a person at the
expense of another.
In Alfredo v. Borras, the Court
ruled that prescription does not
run against the plaintiff in actual
possession of the disputed land
because such plaintiff has a right
to wait until his possession is
disturbed or his title is questioned
before initiating an action to
vindicate his right. His
undisturbed possession gives him
the continuing right to seek the aid
of a court of equity to determine
the nature of the adverse claim of
a third party and its effect on his
title. The Court held that where
the plaintiff in an action for
reconveyance remains in
possession of the subject land, the
action for reconveyance becomes
in effect an action to quiet title to
property, which is not subject to
prescription.
The Court reiterated such rule in
the case of Vda. de Cabrera v.
Court of Appeals, wherein we
ruled that the imprescriptibility of
an action for reconveyance based
on implied or constructive trust
applies only when the plaintiff or
the person enforcing the trust is
not in possession of the property.
In effect, the action for
reconveyance is an action to quiet
the property title, which does not
prescribe.
Similarly, in the case of David v.
Malay, the Court held that there
was no doubt about the fact that
an action for reconveyance based
on an implied trust ordinarily
prescribes in ten (10) years. This
rule assumes, however, that there
is an actual need to initiate that
action, for when the right of the
true and real owner is recognized,
expressly or implicitly such as
when he remains undisturbed in
his possession, the statute of
limitation would yet be irrelevant.
An action for reconveyance, if
nonetheless brought, would be in
the nature of a suit for quieting of
title, or its equivalent, an action
that is imprescriptible. In that
case, the Court reiterated the
ruling in Faja v. Court of
Appealswhich we quote:
x x x There is settled jurisprudence
that one who is in actual
possession of a piece of land
claiming to be owner thereof may
wait until his possession is
disturbed or his title is attacked
before taking steps to vindicate his
right, the reason for the rule
being, that his undisturbed
possession gives him a continuing
right to seek the aid of a court of
equity to ascertain and determine
the nature of the adverse claim of
a third party and its effect on his
own title, which right can be
claimed only by one who is in
possession. No better situation can
be conceived at the moment for Us
to apply this rule on equity than
that of herein petitioners whose
mother, Felipa Faja, was in
possession of the litigated property
for no less than 30 years and was Court, Branch 213, are
suddenly confronted with a claim hereby AFFIRMED.
that the land she had been
occupying and cultivating all these SO ORDERED.
years, was titled in the name of a
third person. We hold that in such Velasco, Jr., (Chairperson), Del
a situation the right to quiet title Castillo,* Villarama,
to the property, to seek its Jr.,** and Leonen, JJ., concur.
reconveyance and annul any
certificate of title covering it,
accrued only from the time the one THIRD DIVISION
in possession was made aware of a
claim adverse to his own, and it is G.R. No. 205065, June 04, 2014
only then that the statutory period
of prescription commences to run VERGEL PAULINO AND
against such possessor.26 CIREMIA
PAULINO, Petitioner, v. COURT
In this case, petitioner, taking into OF APPEALS AND REPUBLIC
account Article 1155 of the Civil OF THE PHILIPPINES,
Code27 and jurisprudence28 on the REPRESENTED BY THE
matter, should be guided by the ADMINISTRATOR OF THE
following facts in enforcing her LAND REGISTRATION
legal remedy/ies, if still any: (1) AUTHORITY, Respondents.
her judicial admission that they no
longer possess the subject lot, G.R. NO. 207533
claiming that they stayed therein
from 1966 until 1997 when they SPOUSES DR. VERGEL L.
were ejected by the sheriff of Pasig PAULINO & DR. CIREMIA G.
RTC;29 (2) TCT No. 13342 was PAULINO, Petitioners, v. REPUB
issued on December 9, 1997; and LIC OF THE PHILIPPINES,
(3) the instant case for specific REPRESENTED BY THE
performance with damages was ADMINISTRATOR OF THE
filed on August 17, 1999. LAND REGISTRATION
AUTHORITY, Respondent.
WHEREFORE, premises
considered, the Petition DECISION
is DENIED. The August 12, 2005
Decision and January 17, 2006 MENDOZA, J.:
Resolution of the Court of Appeals
in CA-G.R. CV No. 76994, which These consolidated petitions assail
dismissed petitioners complaint 1] the September 24, 2012
for specific performance and Resolution1 of the Court of
damages docketed as Civil Case Appeals(CA) ordering the issuance
No. MC99-826 before the of a writ of preliminary injunction
Mandaluyong City Regional Trial restraining the execution of the
July 20, 2010 Decision2 of the
Regional Trial Court, Branch 83,
Quezon City, (RTC), Judge Ralph
Lee presiding, which ordered the
reconstitution of a supposedly lost
title; and 2] its March 5, 2013
Decision3 annulling the said RTC
decision.
Specifically, G.R. No. 205065 is a
petition for certiorari under Rule
65 of the Rules of Court seeking to
annul the September 24, 2012 and
December 20, 2012 Resolutions
issued by the respondent CA,
granting the public respondents
prayer for the issuance of a writ of
preliminary injunction enjoining
the RTC from enforcing and
implementing its July 20, 2010
decision, which ordered the Land
Registration Authority (LRA) to
reconstitute the petitioners
certificate of title, Transfer of
Certificate Title (TCT) No. 301617
of the Registry of Deeds of Quezon
City (QCRD).
On the other hand, G.R. No.
207533 is a petition for review
on certiorari under Rule 45 of the
Rules of Court seeking to reverse
and set aside the March 5, 2013
Decision and June 6, 2013
Resolution of the CA, which
granted the petition for annulment
and setting aside of the July 20,
2010 RTC Decision, which ordered
the LRA to reconstitute
petitioners certificate of title.
The Facts:
On December 14, 2007, the late
Celso Fernandez purchased, in a
public auction conducted by the
Quezon City government, a real
property owned and registered in
the name of Lolita G. Javier(Javier),
married to Pedro Javier, as
evidenced by a certificate of sale of
delinquent property. The subject
property appeared to be covered
by an owners duplicate of TCT No.
301617 of the QCRD.
After his death, the surviving heirs
of Celso Fernandez executed an
Extra-Judicial Settlement of Estate
with Absolute Sale covering the
subject property, selling it in favor
of the petitioners, spouses Vergel
L. Paulino and Ciremia Paulino
(Spouses Paulino), for a
consideration of P1,805,000.00.
On June 11, 1988, a fire broke out
in the Quezon City Hall which
burned a portion thereof which
included the office of the QCRD.
Consequently, on March 9, 2010,
Spouses Paulino filed a petition for
reconstitution of the original copy
of TCT No. 301617 with the RTC,
alleging that its original copy was
among those titles that were razed
during the fire. Upon receipt, the
RTC directed the publication and
posting of the scheduled hearing of
case. After the jurisdictional facts
were established, a hearing officer
was designated to receive the
evidence ex parte.
On June 20, 2010, the RTC
directed the LRA to submit a
report within five (5) days from
notice.Without awaiting the LRA
Report, the RTC rendered the
assailed July 20, 2010 Decision,
granting the petition for
reconstitution and ordering the
Registrar of Deeds of the QCRD to
reconstitute the original copy of
TCT No. 301617. The dispositive
portion of the decision
reads:ChanRoblesVirtualawlibrary
WHEREFORE, the Register of
Deeds for Quezon City is hereby
directed to reconstitute in the files
of his office the original copy of
Transfer Certificate Title No.
301617 in exactly the same terms
and conditions on the basis of
Owners Duplicate Certificate of
said Transfer Certificate of Title
No. 301617 and other available
supporting documents submitted
to your office and once
accomplished, the said Register of
Deeds is further ordered to issue
new owners duplicate copy of the
said Certificate of Title after
payment of the prescribed fees.
SO ORDERED.4
On August 16, 2010, the RTC
issued the Certificate of
Finality,5 there being no motion for
reconsideration or appeal filed by
any of the interested parties.
Meanwhile, on August 17, 2010,
the RTC received the LRA
Report,6 stating that TCT No.
301617was registered in the
name of a certain Emma B.
Florendo (Florendo) and that it
was previously the subject of an
application for administrative
reconstitution. It was
also discovered that the original
copy of the title on file in the
Registry of Deeds was among
those saved titles from the
fire that gutted the office of QCRD
on June 11, 1988. In addition,
when the technical description of
the subject property was plotted, it
was identical with Lot 939, Piedad
Estate covered by TCT No. RT-
55869 (42532), in the name of
Magnolia W. Antonino (Antonino).
On December 3, 2010, Spouses
Paulino filed with the QCRD an
application for registration of the
judicial reconstitution of TCT No.
301617 based on the RTC decision.
The Registrar of Deeds, Atty.
Elbert T. Quilala (Atty. Quilala),
and other officials of the QCRD
refused to reconstitute the original
copy of the TCT. Hence, Spouses
Paulino filed a petition for indirect
contempt. Subsequently, the RTC
found Atty. Quilala guilty of
indirect contempt in its
Decision, dated
7
December 2,
2011.
On July 13, 2012, respondent
Republic of the Philippines,
represented by the Administrator
of the LRA, filed its Petition for
Annulment of Judgment with
Urgent Prayer for Issuance of
Temporary Restraining Order
and/or Writ of Preliminary
Injunction8 assailing 1] the July 20,
2010 RTC decision granting the
petition for reconstitution of the
original title; and 2] the December
2, 2011 RTC decision, finding the
officials of the QCRD guilty of
indirect contempt for failing to
reconstitute TCT No. 301617.
On September 24, 2012, the CA
issued the assailed resolution,
granting the prayer for the
issuance of a writ of preliminary assailed December 20, 2012
injunction. The decretal portion Resolution.
reads:ChanRoblesVirtualawlibrary
On January 17, 2013, Spouses
WHEREFORE, let a Writ of Paulino filed the special civil action
Preliminary for certiorari under Rule 65,
Injunction ISSUE enjoining public docketed as G.R. No. 205065,
respondent Regional Trial Court, seeking to annul the CA
Branch 83, Quezon City, or any resolutions, which granted the
person acting under its authority, preliminary injunction, citing the
from enforcing and implementing commission of a grave abuse of
the Decisions dated July 20, 2010 discretion.
and December 2, 2011. The filing
of a bond is not required pursuant On March 5, 2013, the CA
to Section 22, Rule 141 of the promulgated its decision on the
Rules of Court. merits of the petition for
annulment of judgment, granting
SO ORDERED. 9
LRAs petition, thereby annulling
and setting aside the RTC
Taking into account that the case decisions, dated July 20, 2010 and
was still in its completion stage December 2, 2011.
and it appearing that the The fallo reads:ChanRoblesVirtual
immediate execution and awlibrary
satisfaction of the assailed
Decisions, dated July 20, 2010 and WHEREFORE, premises
December 2, 2011, would probably considered, the instant Petition for
result in manifest injustice and Annulment of Judgment is
irreparable injury against hereby GRANTED. The assailed
petitioner Republic of the Decisions dated July 20, 2010 and
Philippines (now respondent LRA), December 2, 2011 of the Regional
the CA found merit in its prayer for Trial Court, Branch 83, Quezon
the issuance of a writ of City are ANNULLED and SET
preliminary injunction. It explained ASIDE. Accordingly, the Petition
that it was in the best interest of for Reconstitution of Original Copy
all the parties to maintain of TCT No. 301617 and the
thestatus quo until it had resolved Petition for Indirect Contempt filed
the merits of the issues raised in by private respondent spouses
the petition, adding that to deny Vergel Paulino and Ciremia G.
the prayer would render Paulino are DISMISSED.
ineffective any judgment that may
be rendered in the SO ORDERED. 11

case. cralawred
10

The CA ruled that the RTC lacked

Spouses Paulino filed a motion for jurisdiction to order the
reconsideration of the said reconstitution of the original copy
resolution, but it was denied in the of TCT No. 301617, there being no
lost or destroyed title. In fact, on
the basis of the LRA Report and
other evidence on record, the
subject lot specified on TCT No.
301617 had the same technical
description and was identical to
Lot 939, Piedad Estate covered by
TCT No. RT-55869 (45532) in the
name of Antonino, which title was
already cancelled by TCT Nos.
296725 to 296728 in the name of
Magnolia Antonino. Morever, TCT
No. 301617 existed but it was
registered in the name of a
different owner, Florendo, and
pertained to a different real
property located in Quirino
District, Quezon City, registered in
the year 1907. The records further
reveal that TCT No. 301617 was
previously the subject of another
petition for reconstitution filed by
one Lolita Javier which was also
dismissed by the RTC, Branch 77,
Quezon City.12cralawred
Spouses Paulino filed a motion for
reconsideration, but it was denied
by the CA in its June 6, 2013
Resolution. Consequently, they
filed a petition for review
on certiorari with this Court under
Rule 45, docketed as G.R. No.
207533.
Eventually, the Court issued a
resolution ordering the
consolidation of G.R. No. 207533
with G.R. No. 205065, as both
cases essentially involve the same
set of facts, parties and issues.
Issues and Arguments:
G.R. No. 205065
Whether the Court of Appeals
committed an error of law and
grave abuse of discretion
amounting to lack or excess of
jurisdiction.13
G.R. No. 207533
Whether the Court of Appeals
committed grave error of law in
not dismissing the petition for
annulment of judgment
notwithstanding the fact that
the respondent failed to resort
to the ordinary remedies of new
trial, appeal, petition for relief
or other appropriate remedies
despite opportunity to do so.
Whether the Court of Appeals
committed grave error of law
when it disregarded the rule on
evidence in giving credence to
the Report that was lately
submitted by the Land
Registration Authority and
obviously executed for the
interest of other persons and to
protect a fake and spurious
title.
Whether the Court of Appeals
committed grave error of law in
ruling that reconstitution of
TCT No. 301617 would
constitute collateral attack on
the fake and spurious TCT No.
RT-55869 (42532) in the name
of Magnolia Antonino.
Whether the Court of Appeals
committed grave error of law in
ruling that TCT NO. 301617 in
the name of Lolita Javier
cannot be reconstituted
because TCT No. 301617
existed in the name of Emma
Florendo and pertained to a
different property.
The Court of Appeals
committed graver error of law
when it annulled the July 20,
2010 Decision of the Regional
Trial Court based on factual
issues despite the fact that the
Regional Trial Court of Quezon
City has jurisdiction over the
reconstitution and that it was
proven that TCT No. 301617
existed and the same was lost.14
Considering that the annulment
case in the CA was already decided
and the petitions were
consolidated, the Court will just
treat the cases as one case as they
essentially involve the same issues.
From the foregoing, it appears that
the ruling of the Court hinges on
the resolution of these two key
issues: first, whether CA properly
availed of Rule 47 of the 1997
Rules of Civil Procedure to assail
the final RTC decision; and second,
whether the RTC lacked
jurisdiction over the petition for
reconstitution.
Procedural Issue: Propriety of
Petition
for Annulment of Judgment
Spouses Paulino argue that under
Rule 47 of the 1997 Rules of Civil
Procedure, it is crystal clear that
annulment of judgments may only
be availed of when the ordinary
remedies of new trial, appeal,
petition for relief, or other
appropriate remedies are no
longer available through no fault
of the petitioner. They insist on the
dismissal of the petition for
annulment on the ground that the
LRA is already in estoppel and not
entitled to the relief prayed for
because the July 20, 2010 and
December 2, 2011 RTC decisions
became final and executory
through their fault as they failed to
resort to other remedies despite
opportunities to do so.
In support thereof, Spouses
Paulino cite Republic vs.
Castro, where the Court ruled
15
that annulment of judgment is
never resorted to as a substitute
for a partys own neglect in not
promptly availing of the ordinary
or other appropriate remedies.
In Republic vs. TAFPA Inc.,16 it was
held that, whether through
inadvertence or negligence of its
deputized counsel or the OSG
itself, the decision had already
become final and executory and
could not be annulled. To conclude
otherwise would run counter to the
basic principles of fair play.
Besides, there would be no end to
litigations if the parties, who
unsuccessfully availed themselves
of any of the appropriate remedies
or lost them through their fault or
inadvertence, could have
unfavorable decisions annulled by
simply bringing an action for
annulment of judgment.
The Court finds the petitions
devoid of merit.
Under Section 2 of Rule 47, the
only grounds for annulment of
judgment are extrinsic fraud and
lack of jurisdiction. Lack of
jurisdiction as a ground for
annulment of judgment refers to
either lack of jurisdiction over the
person of the defending party or
over the subject matter of the
claim. In case of absence, or lack,
of jurisdiction, a court should not
take cognizance of the case.
In these cases, the petition for
annulment was based on lack of
jurisdiction over the subject
matter. The rule is that where
there is want of jurisdiction over a
subject matter, the judgment is
rendered null and void. A void
judgment is in legal effect no
judgment, by which no rights are
divested, from which no right can
be obtained, which neither binds
nor bars any one, and under which
all acts performed and all claims
flowing out are void. It is not a
decision in contemplation of law
and, hence, it can never become
executory. It also follows that such
a void judgment cannot constitute
a bar to another case by reason
of res judicata.17cralawred
Accordingly, the Court agrees with
the CA that LRA was not estopped
from assailing the July 20, 2011
RTC Decision because it never
attained finality for being null and
void, having been rendered by a
court without jurisdiction over the
reconstitution proceedings.
As early as the case of Strait
Times, Inc. v. CA,18 the Court has
held that when the owners
duplicate certificate of title has not
been lost, but is, in fact, in the
possession of another person, then
the reconstituted certificate is
void, because the court that
rendered the decision had no
jurisdiction. Reconstitution can be
validly made only in case of loss of
the original certificate.19 This rule
was reiterated in the cases
of Villamayor v. Arante,20Rexlon
Realty Group, Inc. v. Court of
Appeals,21Eastworld Motor
Industries Corporation v. Skunac
Corporation,22Rodriguez v.
Lim,23Villanueva v.
Viloria, and Camitan v. Fidelity
24
Investment Corporation.25 Thus,
with evidence that the original
copy of the TCT was not lost
during the conflagration that hit
the Quezon City Hall and that the
owners duplicate copy of the title
was actually in the possession of
another, the RTC decision was null
and void for lack of jurisdiction.
For the aforecited reason, the
Court agrees that the public
respondent correctly availed of the
remedy of petition for annulment
of judgment under Rule 47 without
need of exhausting other ordinary
remedies of new trial, appeal,
petition for relief, or other
appropriate remedies because the
RTC judgment was null and void.
Indeed, where a petition for
annulment of a judgment or a final
order of the RTC filed under Rule
47 of the Rules of Court is
grounded on lack of jurisdiction
over the person of the respondent
or over the nature or subject of the
action, the petitioner need not
allege in the petition that the
ordinary remedy of new trial or
reconsideration of the final order
or judgment or appeal therefrom is
no longer available through no
fault of his own, precisely because
the judgment rendered or the final
order issued by the RTC without
jurisdiction is null and void and
may be assailed any time either
collaterally or in a direct action or
by resisting such judgment or final
order in any action or proceeding
whenever it is invoked, unless
barred by laches.26cralawred
Substantive Issue: Jurisdiction of
RTC
in the Reconstitution Proceedings
The governing law for judicial
reconstitution of title is R.A. No.
26. Sec. 15 thereof provides when
an order for reconstitution should
issue, as
follows:ChanRoblesVirtualawlibrar
y sufficient and proper to warrant
Section 15. If the court, after
hearing, finds that the documents
presented, as supported by parole
evidence or otherwise, are
sufficient and proper to warrant
the reconstitution of the lost or
destroyed certificate of title,
and that petitioner is the
registered owner of the
property or has an interest
therein, that the said certificate
of title was in force at the time
it was lost or destroyed, and
that the description, area and
boundaries of the property are
substantially the same as those
contained in the lost or
destroyed certificate of title, an
order of reconstitution shall be
issued. The clerk of court shall
forward to the register of deeds a
certified copy of said order and all
the documents which, pursuant to
said order, are to be sued as the
basis of the reconstitution. If the
court finds that there is no
sufficient evidence or basis to
justify the reconstitution, the
petition shall be dismissed, but
such dismissal shall not preclude
the right of the party or parties
entitled thereto to file an
application for confirmation of his
or their title under the provisions
of the Land Registration Act.
(Emphasis and underscoring
supplied)
From the foregoing, the following
must be present for an order for
reconstitution to issue: (a) that the
certificate of title had been lost or
destroyed; (b) that the documents
presented by petitioner are
the reconstitution of the lost or
destroyed certificate of title; (c)
that the petitioner is the registered
owner of the property or had an
interest therein; (d) that the
certificate of title was in force at
the time it was lost and destroyed;
and (e) that the description, area
and boundaries of the property are
substantially the same as those
contained in the lost or destroyed
certificate of title.27cralawred
In reconstitution proceedings, the
Court has repeatedly ruled that
before jurisdiction over the case
can be validly acquired, it is a
condition sine quo non that the
certificate of title has not been
issued to another person. If a
certificate of title has not been lost
but is in fact in the possession of
another person, the reconstituted
title is void and the court
rendering the decision has not
acquired jurisdiction over the
petition for issuance of new title.
The courts simply have no
jurisdiction over petitions by
(such) third parties for
reconstitution of allegedly lost or
destroyed titles over lands that are
already covered by duly issued
subsisting titles in the names of
their duly registered owners. The
existence of a prior title ipso
facto nullifies the reconstitution
proceedings. The proper recourse
is to assail directly in a proceeding
before the regional trial court the
validity of the Torrens title already
issued to the other
person. cralawred
28
In the case at bench, the CA found
that the RTC lacked jurisdiction to
order the reconstitution of the
original copy of TCT No. 301617,
there being no lost or destroyed
title over the subject real property,
the respondent having duly
proved that TCT No. 301617 was
in the name of a different owner,
Florendo, and the technical
description appearing on that TCT
No. 301617 was similar to the
technical description appearing in
Lot 939, Piedad Estate covered by
TCT No. RT-55869 (42532) in the
name of Antonino. In fact, TCT No.
RT-55869 (42532) was already
cancelled by TCT Nos. 296725 to
296728 also in the name of
Antonino.
Pertinent portions of the LRA
Report, which the RTC did not wait
for,
read:ChanRoblesVirtualawlibrary
x x x
2.1 When the technical description
of Lot No. 804-New-B, Psd-2341,
appearing on the reproduction of
Transfer Certificate of Title No.
301617, was plotted on the
Municipal Index Map No. 5708, it
appears that the aforesaid lot is
identical to Lot 939, Piedad Estate
covered by TCT No. RT-55869
(42532) in the name of Magnolia
W. Antonino, which title is already
totally cancelled and issuing in lieu
thereof TCT Nos. 296725 to
296728 inclusive all in the name of
Magnolia Antonino, covering Lots
939-A to 939-D of subdivision plan
Psd-00-065898.
xxx
2.3. TCT No. 301617 was
previously the subject of a petition
for judicial reconstitution under
LRC Case No. Q-3796 (90) in
Regional Trail Court, Branch 77,
wherein this Authority rendered a
Report dated August 20, 1991. The
said petition was dismissed on
September 23, 1997 by then
Presiding Judge Normandie B.
Pizarro, on the grounds that the
submitted basis for reconstitution
are fabricated and that an earlier
title was issued covering the same
property.
2.4 The real TCT No. 301617
covers Lot 17, Blk. 83 of the
subdivision plan Psd-57970,
containing an area of 182.80
square meters, in the name of
Emma B. Florendo. The same was
applied for administrative
reconstitution but it was found
that the original copy of title on
file in the Registry of Deeds, is
among the saved titles from the
fire that gutted the registry on
June 11, 1988, reproduction of
which is hereto attached.
The Court, thus, finds no
reversible error in the findings of
the CA. It is clear from the records
that the subject TCT No. 301617 is
in the name of a different owner,
Florendo, and the technical
description appearing therein
pertains to a parcel of land
covered by TCT No. RT-55869
(42532) in the name of one
Antonino.
It must be remembered that the
reconstitution of a certificate of
title denotes restoration in the
original form and condition of a
lost or destroyed instrument
attesting the title of a person to a
piece of land. The purpose of the
reconstitution of title is to have,
after observing the procedures
prescribed by law, the title
reproduced in exactly the same
way it has been when the loss or
destruction
occurred.29 Reconstitution
apparently presupposes the
existence of an original certificate
of title which was lost or
destroyed. If there was no loss or
destruction like in the case at
bench, there is actually nothing to
reconstitute. The same rule applies
if in fact there is an earlier valid
certificate of title in the name and
in the possession of another
person and said title is existing.
Accordingly, the RTC never
acquired jurisdiction over the
same, and its judgment rendered
thereafter is null and void, which
may be attacked anytime.
With respect to the contention of
Spouses Paulino that the LRA
Report is inadmissible because it
was not presented and identified in
open court and admitted in
evidence, suffice it is to say that
they are estopped from
questioning it. The admissibility of
the LRA report was not challenged
during the proceedings of the
petition for annulment in the CA.
Its admissibility was only
questioned in these petitions. They
are deemed to have waived their
right to question its genuineness
and authenticity.
Further, records show that the CA
gave credence to the LRA Report,
which was submitted in
compliance to its resolution, dated
July 26, 2012. The LRA Report is a
certified photocopy from the
records duly signed by the Branch
Clerk of Court. Accordingly, the
LRA report is deemed to form part
of the records which may be used
in resolving the present
controversy. It need not be
emphasized that the RTC hastily
acted on the petition for
reconstitution because it did not
wait for the LRA Report. If there
was no haste, the LRA Report
would have shown that the RTC
had no jurisdiction over the case
because there was already an
existing title.
In addition, Spouses Paulino also
raised the irregularity in the
issuance of TCT No. RT-558969
(42532), arguing that
reconstitution would not constitute
a collateral attack on a title that
was irregularly and illegally issued
in the first place. They argued that
it was an error on the part of the
CA to deny their right to have their
title reconstituted based on the
fake title of Antonino. They assert
that the rule, that a title issued
under the Torrens System is
presumed valid and, hence, is the
best proof of ownership of a piece
of land, does not apply where the
certificate itself is faulty as to its
purported origin.
The Court, however, finds the
argument of Spouses Paulino
specious and misplaced. It is a well
settled rule that a certificate of
title, once registered, cannot be
impugned, altered, changed,
modified, enlarged or diminished
except in a direct proceeding
permitted by law.30 The validity of
the certificate of title can be
threshed out only in a direct
proceeding filed for the purpose.
A Torrens title cannot be attacked
collaterally.
year after the date of the issuance
of the decree of registration. Such
attack must be direct, and not by a
collateral proceeding. The title
represented by the certificate
cannot be changed, altered,
a modified, enlarged, or diminished
in a collateral
proceeding.31cralawred
Indeed, the reconstitution
proceeding constituted a collateral
attack on the Torrens title of
Antonino. The proper recourse of
the Spouses Paulino to contest the
validity of the certificate of title is
not through the subject petition for
reconstitution, but in a proper
proceeding instituted for such
purpose. Even if their arguments
of fraud surrounding the issuance
of the title of Antonino is correct,
such allegation must be raised in a
proper proceeding which is
expressly instituted for that
purpose.
Needless to state, the CA did not
commit any grave abuse of
discretion in issuing the writ of
preliminary injunction questioned
in G.R. No. 205065.
WHEREFORE, the petitions in
both cases are DENIED.
SO ORDERED.

It is also a well-known doctrine

that the issue as to whether the FIRST DIVISION
title was procured by falsification
or fraud as advanced by Spouses G.R. No. 194066, June 04, 2014
Paulino can only be raised in an
action expressly instituted for the REPUBLIC OF THE
purpose. A Torrens title can be PHILIPPINES, Petitioner, v. FRA
attacked only for fraud, within one
NKLIN M.
MILLADO, Respondent.
DECISION
VILLARAMA, JR., J.:
Before the Court is a petition for
review under Rule 45 which seeks
to reverse and set aside the
Decision1 dated October 13, 2010
of the Court of Appeals (CA) in CA-
G.R. CV No. 93056. The CA
affirmed the Decision2 dated
January 14, 2009 of the Regional
Trial Court (RTC) of Iba, Zambales,
Branch 71 granting the petition for
reconstitution in L.R.A. Case No.
RTC-237-I.
On February 7, 2007, Franklin M.
Millado (respondent) filed a persons who may have any interest
petition3 for reconstitution of
Original Certificate of Title (OCT)
No. 2108 issued in favor of the
following, in undivided equal
shares: Isabel Bautista, single;
Sixto Bautista, married to Elena
Ela; and Apolonia Bautista, single.
Respondent alleged that he and his
wife are the vendees of the
property covered by the said title,
by virtue of a Deed of Extra-
Judicial Settlement of Estate with
Sale4 executed by the heirs of
spouses Sixto and Elena Bautista
on December 29, 2006. He further
averred that the owners duplicate
of OCT No. 2108 was in his
possession while he was securing
clearances for the transfer of title
in their names but he either left or
misplaced the same.
Respondent claimed that despite
efforts he exerted to locate the
owners duplicate of OCT No.
2108, he was unable to find it.
Upon verification with the Registry
of Deeds, the original copy of OCT
No. 2108 was likewise not found in
the files of said office, as per the
certification5 issued by the
Register of Deeds for the Province
of Zambales stating that said title
was declared missing as per
Inventory dated Dec. 17, 1981 and
that despite d[i]ligent effort to
locate it, the same could not be
found.
On March 13, 2007, the trial court
ordered respondent to submit the
names and addresses of the
occupants or persons in possession
of the property, the owners of the
adjoining properties and all
in the property. In compliance,
respondent submitted only the
names and addresses of the
owners/actual occupants of the
adjoining lots. Thereupon, the trial
court issued an Order setting the
hearing of the petition on
September 11, 2007. cralawred
6
Considering that the National
Printing Office could no longer
accommodate the publication of
the notice for the scheduled
hearing date7, the trial court
issued an Amended Order8 on
August 28, 2007 setting a new
hearing date for the petition,
December 13, 2007, and directing
that (a) the notice/order be
published twice in the successive
issues of the Official Gazette,
posted in the premises of the
subject property, the main
entrance of the Provincial Capitol
and at the entrance of the
municipal building of San Narciso,
Zambales; (b) copies of the
notice/order together with the
petition be sent to the Office of the
Solicitor General (Makati City), the
Provincial Prosecutor (Iba,
Zambales), the Register of Deeds
for the Province of Zambales, the
Land Registration Authority
(National Land Titles and Deeds,
LRA), Atty. Jose T. Pacis
(Palanginan, Iba, Zambales), Engr.
Franklin M. Millado and the
adjoining lot owners, namely;
Remedios Fernandez and Pascual
Fernandez (San Vicente, San
Narciso, Zambales), Letecia
Mariano (San Juan, San Narciso,
Zambales) and Harris Fogata
(Candelaria, San Narciso,
Zambales); (c) the LRA thru its
Records Section submit its report
within 30 days from receipt of the
order/notice, pursuant to Sections
10 and 12 of LRC Circular No. 35;
and (d) the Register of Deeds to
submit her verification in
accordance with the aforesaid
rule, within 30 days from receipt of
notice/order.
At the hearing, Jovito Calimlim, Jr.,
Records Officer of the Registry of
Deeds of Zambales, testified that
based on the inventory files of
titles in their office, OCT No. 2108
was declared missing as of
December 17, 1981, with no
pending transaction, per
verification from the Primary Entry
Book. Upon being notified that the
owners duplicate copy of said title
was likewise lost, they advised
respondent to file a petition for
reconstitution with the court. No
opposition to the petition was filed
by their office and the LRA. As to
the basis of the existence of OCT
No. 2108, he said that their office
relied on the decree of registration
issued by the LRA. However, he is
not aware of the circumstances of
the loss of said title in their
office.9cralawred
Respondent also took the witness
stand and confirmed the loss of the
owners duplicate copy of OCT No.
2108 sometime in February or
March 2007 while he was securing
clearances from the Bureau of
Internal Revenue for the payment
of capital gains tax. He said that
at that time he had a bunch of
documents in an envelope but he
forgot about it. He went back to
the said office looking for the
envelope but there were many
people going in and out of said
office. He secured a certification
from the Register of Deeds on the
lost or missing original OCT No.
2108 in their files, and also a
certification from the LRA
regarding the issuance of the
decree of registration.10cralawred
After the formal offer of
documentary evidence showing
compliance with publication and
posting of notice requirements,
and receipt of the Report from the
LRA, the case was submitted for
decision. The LRA Report stated
that: (1) based on the Record
Book of Cadastral Lots on file at
the Cadastral Decree Section, it
appears that Decree No. 295110
was issued for Lot No. 4616, San
Narciso Cadastre on October 8,
1927 in Cadastral Case No. 9,
GLRO Cad. Rec. No. 371, and as reconstitution despite non-
per copy of said decree on file at compliance with all the
the Vault Section, Docket Division, jurisdictional requisites. It pointed
the decree was issued in favor of out that respondent failed to notify
Isabel, Sixto and Apolonia, all all the interested parties,
surnamed Bautista, in undivided particularly the heirs of the
equal shares; (2) the technical registered owners.13cralawred
description of the property does
not appear to overlap previously By Decision dated October 13,
plotted/decreed properties in the 2010, the CA dismissed
area; and (3) an authenticated petitioners appeal and affirmed
copy of Decree No. 295110 which the trial courts ruling. It held that
can be secured from the LRA may the respondent had satisfactorily
be used as a source of complied with the statutory notice
reconstitution pursuant to Section requirements so that the adjoining
2(d) of Republic Act No. 26 (R.A. owners and any other persons who
26).11cralawred may have an interest in the
property may be duly notified of
On January 14, 2009, the trial the proceedings and given the
court rendered its decision opportunity to oppose the petition.
granting the petition for
reconstitution, as Petitioner is now before this Court
follows:ChanRoblesVirtualawlibrar assailing the CA in not ruling that
y respondent failed to comply
withall the jurisdictional requisites
WHEREFORE, the Register of for reconstitution of title.
Deeds of Zambales is directed to
reconstitute Original Certificate of The appeal is meritorious.
Title No. 2108.
The nature of judicial
Let copies of this decision be reconstitution proceedings is the
furnished the Register of Deeds of restoration of an instrument which
Zambales, the Land Registration is supposed to have been lost or
Authority, Quezon City, the destroyed in its original form and
Solicitor General, Makati City, the condition.14 The purpose of the
Provincial Prosecutor, Iba, reconstitution of title or any
Zambales, Atty. Jose T. Pacis and document is to have the same
the petitioner. reproduced, after proper
proceedings in the same form they
SO ORDERED.12 were when the loss or destruction
occurred.15cralawred
The Republic of the Philippines
(petitioner) thru the Solicitor R.A. 26 provides for the special
General, appealed to the CA, procedure and requirements for
arguing that the trial court gravely the reconstitution of Torrens
erred in granting the petition for certificates of title.
Section 2 of R.A. 26, which
governs reconstitution
of original certificates of title,
provides:ChanRoblesVirtualawlibr
ary
SEC. 2. Original certificates of
title shall be reconstituted from
such of the sources hereunder
enumerated as may be available, in
the following order:
(a) The owners duplicate of the
certificate of title;
(b) The co-owners, mortgagees,
or lessees duplicate of the
certificate of title;
(c) A certified copy of the
certificate of title, previously
issued by the register of deeds or
by a legal custodian thereof;
(d) An authenticated copy of the
decree of registration or patent, as
the case may be, pursuant to
which the original certificate of
title was issued;
(e) A document, on file in the
registry of deeds, by which the
property, the description of which
is given in said document, is
mortgaged, leased or encumbered,
or an authenticated copy of said
document showing that its original
had been registered; and
(f) Any other document which, in
the judgment of the court, is
sufficient and proper basis for
reconstituting the lost or
destroyed certificate of title.
In order for the court to acquire
jurisdiction over the petition for
reconstitution, the following
provisions must be observed, to
wit:ChanRoblesVirtualawlibrary
SEC. 12. Petitions for
reconstitution from sources
enumerated in Sections 2(c), 2(d),
2(e), 2(f), 3(c), 3(d), 3(e), and/or
3(f) of this Act, shall be filed with
the proper Court of First Instance,
by the registered owner, his
assigns, or any person having an
interest in the property. The
petition shall state or contain,
among other things, the following:
(a) that the owners duplicate of
the certificate of title had been lost
or destroyed; (b) that no co-
owners, mortgagees or lessees
duplicate had been issued, or, if
any had been issued, the same had
been lost or destroyed; (c) the
location, area and boundaries of
the property; (d) the nature and
description of the buildings or
improvements, if any, which do not
belong to the owner of the land,
and the names and addresses of
the owners of such buildings or
improvements; (e) the names and
addresses of the occupants or
persons in possession of the
property, of the owners of the
adjoining properties and of all
persons who may have any
interest in the property; (f) a
detailed description of the
encumbrances, if any, affecting the
property; and (g) a statement that
no deeds or other instruments
affecting the property have been
presented for registration, or, if
there be any, the registration
thereof has not been
accomplished, as yet. All the
documents, or authenticated
copies thereof, to be introduced in
evidence in support of the petition
for reconstitution shall be attached
thereto and filed with the
same: Provided, That in case the
reconstitution is to be made
exclusively from sources
enumerated in Section 2(f) or 3(f)
of this Act, the petition shall be
further accompanied with a plan
and technical description of the
property duly approved by the
Chief of the General Land
Registration Office, [now
Commission of Land Registration]
or with a certified copy of the
description taken from a prior
certificate of title covering the
same property.
SEC. 13. The court shall cause a
notice of the petition, filed under
the preceding section, to be
published, at the expense of the
petitioner, twice in successive
issues of the Official Gazette, and
to be posted on the main entrance
of the provincial building and of
the municipal building of the
municipality or city in which the
land is situated, at least thirty days
prior to the date of hearing. The
court shall likewise cause a
copy of the notice to be sent, by
registered mail or otherwise, at
the expense of the petitioner, to
every person named therein whose
address is known, at least thirty
days prior to the date of
hearing. Said notice shall state,
among other things, the number of
the lost or destroyed Certificate of
Title, if known, the name of the
registered owner,the names
of the occupants or persons in
possession of the property, the
owners of the adjoining properties
and all other interested parties,
the location, area and boundaries
of the property, and the date on
which all persons having any
interest therein must appear and
file their claim or objections to the
petition. The petitioner shall, at
the hearing, submit proof of the
publication, posting and service of
the notice as directed by the
court.16 (Emphasis supplied.)
In this case, the source of
reconstitution is an authenticated
copy of Decree No. 295110 under
Section 2(d), which as certified by
the LRA, was issued on October 8,
1927 in favor of Isabel, Sixto and
Apolonia, all surnamed Bautista,
covering Lot 4616, San Narciso
Cadastre in Cad. Case No. 9,
GLRO Cad. Record No. 371. The
said co-owners pro indiviso are
supposedly the registered owners
named in OCT No. 2108. The
Deed of Extra-Judicial Settlement
of Estate with Sale stated that
Apolonia and Isabel died single
and without any children and only
the alleged heirs of spouses Sixto
and Elena Bautista executed the
said document conveying the
7,594-square meter lot to
respondent. These supposed
vendors claiming to be heirs of one
of the registered owners were not
notified of the judicial
reconstitution proceedings.
The registered owners appearing
in the title sought to be
reconstituted, or in this case, their
surviving heirs, are certainly
interested parties who should be
notified of reconstitution
proceeding under Section 12 in
relation to Section 13 of R.A. 26.
Indeed, for petitions based on
sources enumerated in Sections
2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e)
and 3(f), Section 13 adds another
requirement aside from
publication and posting of notice of
hearing: that the notice be mailed
to occupants, owners of adjoining
lots, and all other persons who
may have an interest in the
property.17 Notwithstanding the
sale supposedly effected by
vendors claiming to be heirs of the
registered owners, they remain as
interested parties entitled to
notice of judicial reconstitution
proceedings.
It is settled that the actual notice
requirement in Section 13 in
relation to Section 12 of R.A. 26 is
mandatory and jurisdictional.18 In
the early case of Manila Railroad
Company v. Hon. Moya, et al., 19this
Court categorically
declared:ChanRoblesVirtualawlibr
ary
It is clear from section 13 of
Republic Act No. 26 that notice by
publication is not sufficient under
the circumstances. Notice must
be actually sent or delivered to
parties affected by the petition
for reconstitution. The order of
reconstitution, therefore,
having been issued without
compliance with the said
requirement, has never become
final as it was null and void. The
Manila Railroad cannot then
complain that the motion to set
aside was filed beyond the
reglementary period. (Emphasis
and underscoring supplied.)
Where the authority to proceed is
conferred by a statute and the
manner of obtaining jurisdiction is
mandatory, the same must be
strictly complied with, or the
proceedings will be void. As such,
the court upon which the petition
for reconstitution of title is filed is
duty-bound to examine thoroughly
the petition for reconstitution of
title and review the record and the
legal provisions laying down the
germane jurisdictional
requirements.20 Thus, we have
held that notwithstanding
compliance with the notice
publication, the requirement of
actual notice to the occupants and
the owners of the adjoining
property under Sections 12 and 13
of R.A. 26 is itself mandatory to
vest jurisdiction upon the court in
a petition for reconstitution of title
and essential in order to allow said
court to take the case on its
merits. The non-observance of the
requirement invalidates the whole
reconstitution proceedings in the
trial court.21cralawred
For non-compliance with the actual
notice requirement to all other
persons who may have interest in
the property, in this case the
registered owners and/or their
heirs, in accordance with Section
13 in relation to Section 12 of RA
26, the trial court did not acquire
jurisdiction over L.R.A. Case No.
RTC-237-I. The proceedings
therein were therefore a nullity
and the January 14, 2009 Decision
was void.

WHEREFORE, the petition for

review on certiorari is GRANTED.
The Decision dated October 13,
2010 of the Court of Appeals in
CA-G.R. CV No. 93056 is
hereby SET ASIDE. We ENTER a
new judgment declaring the
reconstitution proceedings in
L.R.A. Case No. RTC-237-I, as well
as the January 14, 2009 Decision
of the Regional Trial Court of Iba,
Zambales, Branch 71 granting the
petition for
reconstitution, NULL and VOID.

Let a copy of this Decision be

served on the Register of Deeds
for the Province of Zambales.

No pronouncement as to costs.

SO ORDERED.

Sereno, C.J., (Chairperson),

Leonardo-De Castro,
Bersamin, and Reyes, JJ., concur.