G.R. No. L-23480 September 11, 1979 J.M. TUASON & CO., INC., petitioner, vs. HON.

COURT OF APPEALS, and GUILLERMO REOSA, respondents. Araneta, Mendoza & Papa for petitioner. Zosinto Rivar for respondents.

CONCEPCION JR., J.: Petition for certiorari to review the decision of the Court of Appeals, Fifth Division 1 in CA-G. R. No. 29135-R, entitled "J. M. Tuason & Co., Inc., plaintiff-appellee vs. Guillermo Reosa defendant-appellant, " which reversed the decision and dismissed the case rendered by the Court of First Instance of Rizal, Branch V, Quezon City (then Judge Nicasio 2 Yatco) in that case for ejectment (Civil Case No. Q-3318), with the following dispositive portion: WHEREFORE, judgment is hereby rendered in this case in favor of the plaintiff and against the defendant, ordering the latter or any person claiming under him to remove their construction on the property mentioned in the complaint and described in the plan Exhibit B and to surrender possession thereof to plaintiff; to pay the sum of Pl2. 00 a month, by way of rentals from February 6, 1967, until possession of the property is restored to plaintiff, and for him to pay the costs. SO ORDERED. It is not disputed that this case originated as an action for recovery of possession (ejectment) instituted by the plaintiff (petitioner) corporation against the private respondent Guillermo Renosa that in the trial court, respondent Reosa admitted that petitioner corporation is the owner of the disputed parcel of land covered by T.C.T. No. 1267 of the Register of Deeds of Quezon City on which respondent constructed his residence on February 6, 1967; that the portion occupied by the defendant consisted of 100 square meters; and that the reasonable rental value of the portion of land occupied by respondent is P12 a month. Respondent's defense to the action for ejectment was that he bought the disputed portion of land from a certain Capt. Faustino C. Cruz, for the sum of P3,600.00; 3 that said Faustino C. Cruz acquired the said portion from 3,000 square meters of land acquired by virtue of a compromise agreement in Civil Case Nos. Q-135, Q-139, Q-177 and Q-186 of 4 the Court of First Instance of Rizal, Quezon City Branch; and that all in all Faustino C. Cruz sold to respondent 360 square meters of the 3,000 square meters allegedly allocated to the former in the compromise agreement. The trial court ruled in favor of the petitioner in the ejectment case (Civil Case No. Q-3318) on the grounds that petitioner is the registered owner of the questioned land (Exh. A); that as owner, petitioner is entitled to possession as an attribute of ownership; that respondent's claim of the right to possess the disputed land based on purchase of the same from Capt. Faustino C. Cruz who is the supposed owner of the land by virtue of a compromise agreement is without any legal basis, for Capt. Cruz was not a party in interest in the said compromise agreement; that even admitting that said compromise agreement created a beneficial right in favor of Capt. Cruz because of the agreement that herein petitioner shall reserve lands (12,000 square meters) for persons including Capt. Cruz, said beneficial rights were subject to suspensive conditions (payment to the petitioner of P250,000 and delivery to the petitioner of lots marked "refund" as well as approved by the National Housing Commission and the Bureau of Lands of the Subdivision plan covering the entire property involved in the compromise agreement); and said suspensive conditions were never fulfilled because the "Deudors," the other party to the compromise agreement failed to fulfill said conditions. Respondent Court of Appeals in reversing the trial court's decision based its stand on its firm belief that the compromise agreement (Exhibit 1) between the petitioner and the "Deudors" created a valid right in favor of Capt. Cruz to possess the property in question; that this valid right of possession was transmitted to private respondent 5 Reosa when Cruz sold a portion of that land (360 square meters for P3,600), in 1956, to Reosa; that there is no evidence that the Deudors have not complied with the conditions to be fulfilled under the compromise agreement; that

there is no evidence that the compromise agreement was rescinded or annulled; and that Capt. Cruz' right to possess the disputed land being valid and enforceable he could validly assign the same to respondent Reosa. To Our mind, the principal issue to be resolved in tills case is whethe private respondent Reosas predecessorinterest in the disputed property namely, Capt. Cruz, acquired a valid right to own and possess said land a right that he could have legally trans private respondent Rewhich wasosa to entitle the latter to a better right to possession against the admitted registered owner of the land. An examination of the Deed of Sale (EXH "2") which is the source and sold to respondent Ree case ofosas claim of his right to possess the disputed land, readily shows that the vendor Capt. Cruz claimed to be "the true and sole owner" of the parcels of land, a portion of Deudor, et al. vs. "Deudors" asosa "by virtue of the amicable settlement of th even respondent Ree to thatJ.M. Tuason, et al., Civil Case No. Q-135 of the Court of First Instance, Quezon City." It is, therefore, very clear that even Capt. Faustino C. Cruz based his alleged true and sole ownership of the disputed land on the compromise agreement. A close scrutiny of Exhibit "1" immediately reveals in paragraph 8 (c ) of the same, that the value of the lands reserved for the residences of Gov. Alejo Santos, Atty. Pastor L. de Guzman and Capt. Faustino C. Cruz (12,000 square meters) which is P250,000 shall be deducted from the amount that may be due the "Deudors." It is further provided that the certificates of title to the same lands reserved for the above-mentioned persons shall be issued after delivery to the petitioner of the lots marked "refund" shall have been effected and the subdivision plan approved by the National housing Commission and the Bureau of Lands. The compromise agreement did not provide for an outright transfer of title to the beneficiaries (including the 3,000 square meters allotted to Capt. Cruz), but subjected said transfer to suspensive conditions, namely, deduction of P250,000 from the amount that may be due the "Deudors;" after delivery to the petitioner of the lots marked "refund" shall have been affected; and after the subdivision plan is approved by the National Planning Commission and the Bureau of Lands. The compromise agreement was entered into on April 10, 1953, and Capt. Cruz sold the disputed property to private respondent on April 14, 1956. What strikes Us as unexplainable is why notwithstanding his claim of sole ownership of the disputed land as vendor in 1956, he did not possess any registered title to the same, if it were true that he acquired title to the same land as the beneficiary by virtue of the compromise agreement of 1953. Capt. Cruz, not being a registered owner of the disputed land at the time, could not have assigned a better right to private respondent Renosa It is obvious that respondent Renosa never claimed ownership of the disputed land, and that he admitted petitioner's ownership over the same. It is difficult to assail petitioner's argument that the respondent Court of Appeals erred in stating that the original owner of the land in question were the "Deudors" as even respondent Reosa never alleged that in his answer nor presented evidence to that effect. Respondent Reosa continuously admitted that petitioner is the registered owner of the disputed land. The Torrens Title of petitioner TCT No. 1267 [37686-Rizal] of the Registry of Deeds of Quezon City) cannot be assailed, the more so when private respondent admits petitioner's ownership of the disputed land, and did not or cannot show any title to the same either in his name or that of his predecessor-in-interest Capt. Cruz. Petitioner called Our attention to the decision of the Court of Appeals in J.M. Tuason & Co., Inc., et al. vs. Ponciano Hernandez and J.M. Tuason & Co., Inc. vs. Rubillo San Diego, CA- G.R. Nos. 26696-R and 26697-R, promulgated January 31, 1963, wherein said Appellate Court repudiated the claims in this case of private respondent Reosa thus: It is true that under EXH 1, plaintiff agreed to reserve for the residence of said captain (Captain Cruz) 3,000 square meters of land consistent with the subdivision plan that may be finally approved but the fact remains that the location of this 3,000 square meters lot is indefinite, still to be designated and reserved in the future, and other than the uncorroborated testimony of Faustino Cruz, which is, however, contradicted by the testimony of plaintiff's surveyor there is practically no evidence showing that said plaintiff had designated and actually reserved for Cruz the 3,000 square meters lot mentioned in the compromise agreement. No subdivision plan that has been finally approved and attesting to the testimony of Faustino Cruz was adduced in evidence. On the other hand, the obligation of the plaintiff to reserve 3,000 square meters of land for Capt. Cruz arises only after the delivery to the owners of the lots marked refund in Annex C shall have been effected and the subdivision plan approved by the National Planning Commission and the Bureau of Lands (Exh. 1, Item C, p. 6). However, it has not been shown that this condition precedent has been complied with. On the contrary, we have reasonable ground to believe that the Deudors failed to perform their part of the agreement, so much so that in the above cited case of Deudors, et al. vs. J.M. Tuason & Co., Inc., the Supreme Court rescinded the compromise agreement and released herein plaintiff from its obligation arising therefrom. (emphasis omitted)

This decision was affirmed by the Supreme Court when it dismissed the petition for certiorari to review the same. (G.R. Nos. L-21094 and 21047, Resolution dated April 22, 1963). We are inclined to adhere to the aforementioned view, taking into consideration the fundamental principle in law applicable to the circumstances of this case that mere possession of whatever length cannot defeat the imprescriptible title to the holder of registered Torrens Title to real property, and that registered real property under 6 the Torrens system cannot be acquired by acquisitive prescription. The petitioner who is theregistered owner of the disputed land has a right to possess and recover the same, as against private respondent Reosa who merely claims a right to possess from his predecessor-in-interest Capt. Cruz who likewise never acquired any right to possess the disputed property. Both Capt. Cruz and respondent Reosa cannot be considered exactly as possessors in good faith because both of them knew at the time they entered into possession that petitioner was the registered owner of the disputed land. Capt. Cruz cannot be considered a possessor in good faith because as beneficiary of the compromise agreement he should be in a position to know that there were suspensive conditions attached to his possible acquisition of the disputed property and that if the conditions were not fulfilled, his right as beneficiary would never arise. Aside from the compromise agreement as the only basis of Capt. Cruz' alleged right to the property in question, he and respondent Reosa were never able to prove transfer to ownership of the same from petitioner to Capt. Cruz, thus strengthening the obvious fact that the suspensive conditions imposed in the compromise agreement were never fulfilled and hence petitioner never transferred title to the reserved properties in favor of the beneficiaries therein. As registered owner of the land and in the absence of any equal or better right on the part of respondent Reosa to possess the disputed land, petitioner is entitled to possession and initiated the correct action when it brought Civil Case No. Q-3318 to recover possession of the same. WHEREFORE, the decision of the respondent Court of Appeals in CA-G.R. No. 29135-R is hereby reversed and set aside and the decision of the Quezon City Court of First Instance in Civil Case No. Q-3318, revived and affirmed, with costs against private respondent Guillermo Reosa. SO ORDERED.

G.R. No. L-24864 May 30, 1996 FORTUNATO HALILI, doing business under the name and style Halili Transit [substituted by Emilia De Vera Vda. de Halili], petitioner, vs. COURT OF INDUSTRIAL RELATIONS, and HALILI BUS DRIVERS and CONDUCTORS UNION (PTGWO),respondents. G.R. No. L-24864 May 30, 1996 EMILIA DE VERA VDA. DE HALILI, petitioner, vs. COURT OF INDUSTRIAL RELATIONS, and HALILI BUS DRIVERS and CONDUCTORS UNION (PTGWO),respondents. G.R. No. L-24864 May 30, 1996 EMILLA DE VERA VDA. DE HALILI, petitioner, vs. HALILI BUS DRIVERS AND CONDUCTORS UNION PTGWO, and COURT OF INDUSTRIAL RELATIONS,respondents. G.R. No. L-24864 May 30, 1996 FELICIDAD M. TOLENTINO, as Administratrix of the ESTATE of FORTUNATO F. HALILI, petitioner, vs. COURT OF INDUSTRIAL RELATIONS and HALILI BUS DRIVERS & CONDUCTORS UNION (PTGWO),respondents. RESOLUTION

HERMOSISIMA, JR, J.:p The herein petition was filed by the Halili Bus Drivers and Conductors Union (PTGWO), under the caption of the original case/cases, 1 as it may in fact be considered an incident thereto. The above-captioned cases were claims for unpaid overtime pay of 897 union members against Fortunate Halili, then doing business under the name and style. Halili Transit which were initially commenced as a complaint 2 with the defunct Court of Industrial Relations on August 20, 1958. After Fortunato Halili's demise, said cases were settled amicably. The Union and the Administratrix of Fortunato F. Halili's estate reached an Agreement on December 23, 1974, the pertinent portions of which read: xxx xxx xxx WHEREAS, in the face of this strong urging on the part of the Supreme Court Justices upon the parties to put an immediate end to this care by amicable settlement, the parties repeatedly came to conference, conscientiously explored all avenues of settlement, and finally arrived at the tentative agreement (tentative because of the condition that the same be sanctioned by the court in the estate case) whereby the Administratrix would transfer to the employees title to that tract of land, covered by TCT No. 36389, containing an area of approximately 33,952 square meters, situated in the Barrio of San Bartolome, Municipality of Caloocan, Province of Rizal, and pay in addition the cash amount of P25,000.00 in full and final satisfaction of all the claims and causes of action of all of the employees against the estate of Fortunato F. Halili, subject of CIR Case No. 1099- V.

xxx xxx xxx NOW, THEREFORE, for and in consideration of the foregoing and of the covenants, stipulations and undertakings hereinafter contained, the parties have agreed as follows: 1. The UNION, its officers and members-claimants relative to CIR Case No. 1099-V; shall withdraw and dismiss with prejudice Case No. 1099-V filed by the UNION in behalf of its members-claimants before the Court of Industrial Relations and all its incidents thereto. 2. The ESTATE shall deliver or cause to be delivered, to the UNION the following: (a) Deed of Transfer of a parcel of land situated in Barrio San Bartolome, Caloocan City, containing an area of THIRTY-THREE THOUSAND NINE HUNDRED FIFTY-TWO (33,952) Square Meters, more or less, and covered by Transfer Certificate of Title No. 35389 of the Registry of Deeds of Rizal, to be made, upon authority and approval granted by the Court of First Instance of Rizal, Branch IV, at Quezon City, in Proc. No. Q-10852 in the name of the Halili Bus Drivers & Conductors Union (PTGWO), free from any and all liens, encumbrances, and any and all claims whatsoever. (b) Negotiable Check for TWENTY-FIVE THOUSAND (P25,000.00) PESOS in the name of Domingo D. Cabading, President of the UNION. 3. The transfer of the above-described parcel of land and receipt of the amount of P25,000.00 constitute the full and final satisfaction of the claims and award in said CIR Case No. 1099-V, as well as any and all attorney's liens in said case, for and in consideration of which the UNION members-claimants in CIR Case No. 1099-V by these presents now and forever release and quit claim Halili Enterprises, Halili Transit, Fortunato F. Halili, his estate, heirs and successors by reason of CIR Case No. 1099-V, it being their intention that they be absolutely, completely and finally absolved and released from any and all liability in said case, including attorney's liens, the transfer of the property and payment of the amount hereinabove stated constituting for all intents and purposes a full, final and complete settlement and satisfaction of the award in CIR Case No. 1099-V and all incidents thereto. 4. The UNION and its undersigned officers hereby warrant that the UNION is a duly registered labor organization and that in a special meeting called for the purpose they were duly authorized on December 22, 1974, by all the membersclaimants in CIR Case No. 1099-V to sign this Memorandum of Agreement with Release and Quitclaim which was unanimously approved and ratified by said members-claimants as evidenced by a Resolution dated December 22, 1974, a copy of which is attached hereto and made a part hereof as Annex "B," and hereby jointly and severally hold the estate and heirs of Fortunato F. Halili free and harmless from, and undertake to indemnify them for any and all liability for any claims by members of the UNION, their heirs, assigns and agents relating to CIR Case No. 1099-V or attorney's liens in connection therewith (69 SCRA 509510). 3 On January 6, 1975, pursuant to the abovementioned Agreement, the Administratrix of the Estate of Fortunato F. Halili executed a Deed of Conveyance of Real Property, transferring the aforementioned parcel of land to the Halili Bus and Conductors Union (PTGWO) in trust for the individual members of the Union claimants. The parcel of land covered by the said Deed of Conveyance was registered without encumbrance in the name of the 4 said Union on February 14, 1975 under Transfer Certificate of Title. No. 205755.

On August 9, 1982, the said Union, through its legal counsel, Atty. Benjamin C. Pineda, filed an urgent motion with the then Ministry of Labor and Employment (MOLE) requesting that authority be granted to sell and dispose of the property. On September 23, 1982, the MOLE acting through Labor Arbiter Raymundo R. Valenzuela, granted the Union's motion to sell the subject property. Thereafter, Atty. Benjamin C. Pineda filed a motion with the Supreme Court on December 1, 1982, requesting authority to sell the property. This Court, however, merely noted the motion in a Resolution dated December 8, 1982. Relying on the earlier authority given him by the Ministry of Labor, Atty. Pineda subsequently filed another urgent motion with the MOLE, this time praying that the Union be authorized to sell the lot to the respondent herein Manila Memorial Park Cemetery, Inc. (MMPCI, for brevity). In an Order, dated February 9, 1983, Labor Arbiter Valenzuela, for the MOLE, likewise granted the motion to sell the subject property to MMPCI. The sale of the property held in trust by the seller-Union to the buyer-MMPCI was finally consummated on June 7, 1983. On the basis of the Order of Arbiter Valenzuela and the Deed of Sale between the Union and MMPCI, Transfer Certificate of Title No. 205755 in the name of the Union was canceled and said property was registered in the name of respondent MMPCI, under Transfer Certificate of Title No. 301151 by the Register of Deeds of Quezon City on June 14, 1983. Significantly, however, the Orders, dated September 23, 1982 and February 9, 1983, issued by Labor Arbiter Valenzuela which granted the two motions of the Union's former counsel, Atty. Benjamin C. Pineda, for an authority to sell the real property awarded to the Union, were set aside by this Court in a Resolution, dated October 18, 1983, to wit: [A]nd considering that, as affirmed by the Solicitor General, the challenged orders of Arbiter Raymundo R Valenzuela dated September 23, 1982 and February 9, 1983, were issued without due process of law, the COURT RESOLVED (1) to set aside as null and void said orders of September 23, 1982 and February 9, 1983 of Arbiter Raymundo R. Valenzuela . . . 5 On the basis of this Resolution nullifying the above orders of the Labor Arbiter, the Union filed a complaint with the National Labor Relations Commission (NLRC) seeking to compel the buyer, private respondent Manila Memorial Park Cemetery, Inc., to reconvey the Union's property bought by MMPCI from Atty. Pineda upon the ground that the latter sold it without proper authority from the Supreme Court. The Chief of the Legal and Enforcement Division of the NLRC, tasked to act on the complaint, refused to take cognizance of the case for lack of jurisdiction, viz: The instant complaint does not fall under the jurisdictional ambit of this Commission (NLRC) or any labor forum. It is our considered view that the cause of action raised herein is a proper subject of the regular courts. Hence, the Union filed this Petition/Motion with Prayer for Clarification, through which it seeks, among others, the recovery of subject real property comprising of 33,952 square meters sold to respondent MMPCI, to wit: 3. That the Petition/Motion with Prayer for Clarification in this subject complaint claim for recovery of the Union Real Property in trust as provided in the provisions in the Union General Resolution dated January 21, 1986, was a valid and verified cause of action of the union-members/co-owners of the said union real property in trust to be recovered and take possession due to the ground that the sale of said union real property was sold by persons without authority to sell from the owners of said property or acquired authority to sell from the Supreme Court or Court of jurisdiction being that this union real properly in trust was sold in a means of purely illegal sale. 7

The petition has no merit. I Article 217 of the Labor Code, as amended by Section 9 of Republic Act 6715 delineates the scope of jurisdiction of the National Labor Relations Commission and the Labor Arbiters, to wit: Art. 217. Jurisdiction of Labor Arbiters and the Commission (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: 1. Unfair labor practice cases; 2. Termination disputes; 3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment; 4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; 5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and 6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. (b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. (c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements. The subject matter of the instant petition, which is the reconveyance of the disputed real property to the Union by the respondent MMPCI does not fall under any of the issues cognizable by the NLRC as enumerated in Article 217 of the Labor Code. Hence, the public respondent NLRC committed no error in dismissing the complaint brought before them by the petitioner Union for the simple reason that said Tribunal has no jurisdiction to entertain the same. II The fact that the subject real property was registered under the Torrens System of registration in the name of respondent MMPCI under Transfer Certificate of Title No. 301151 by the Register of Deeds of Quezon City on June 14, 1983, makes the instant petition all the more dismissible, considering that the best proof of ownership of a piece of land is the Certificate of Title. 8 Section 48 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree provides:

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 canceled except in a direct proceeding in accordance with law. A certificate of title accumulates in one document a precise and correct statement of the exact status of the fee held by its owner. The certificate, in the absence of fraud, is the evidence of title and shows exactly the real interest of its owner. The title once registered, with very few exceptions, should not thereafter be impugned, altered, changed, modified, enlarged, or diminished, except in some direct proceeding permitted by law. Otherwise, all security in registered titles would be lost. 9 In the present petition, the Union seeks from respondent MMPCI the recovery of the subject property. It is evident that the objective of such claim is to nullify the title of private respondent to the property in question, which thereby challenges the judgment pursuant to which the title was decreed. This is apparently a collateral attack which is not permitted under the principle of indefeasibility of a Torrens Title. It is well settled that a Torrens Title cannot be collaterally attacked. 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. Hence, whether or not petitioners have the right to claim ownership of the land in question is beyond the province of the instant proceeding. 10 III Furthermore, all portions of said land, now known as Holy Cross Memorial Park, have already been sold out to individual lot buyers, who are innocent purchasers for value, and contain the interred remains of the lot owners and/or their relatives. Where innocent third persons, relying on the correctness of the Certificate of Title thus issued, acquire rights over the property, the Court cannot disregard such rights and order the total cancellation of the certificate. The effect of such an outright cancellation would be to impair public confidence in the Certificate of Title, for everyone dealing with property registered under the Torrens System would have to inquire in every instance as to whether the title has been regularly or irregularly issued by the Court. And this is contrary to the evident purpose of the law. Every person dealing with registered land may safely rely on the correctness of the Certificate of Title issued therefor and 11 the law will in no way oblige him to go behind the certificate to determine the condition of the property. IV As adverted to earlier, ownership of the lot in question had already been vested in the Union upon sale to it by the Heirs of Halili. Considering this, the Union had every right to dispose of the property. After the termination of the above-entitled cases, judgment therefor having become final and executory, even as of 1982, neither the NLRC nor this Court will have any authority to look into the validity of the disposal by the Union of the property so acquired by the Union in the proceedings. Under the circumstances, therefore, it is to be assumed that the sale by the Union, as virtual owner of the property, to the respondent MMPCI would not need any authority to sell from the NLRC or from this Court and we hereby write finis to these cases in order to avoid multiplicity of suits and considering that these cases were instituted as early as 1958. WHEREFORE, the instant petition is DISMISSED for lack of merit. SO ORDERED.

G.R. No. L-101177 March 28, 1994 GUILLERMO JAVIER, petitioner, vs. COURT OF APPEALS (15th DIVISION), DEMETRIO CARINGAL, SPOUSES DIONISIO CAAY AND NAZARIA CARINGAL, respondents. Valerio & De Guzman Law Offices for petitioner. Arsenio R. Reyes for private respondents.

BELLOSILLO, J.:. PETITIONER GUILLERMO JAVIER seeks reversal of the decision of the Court of Appeals 1 in CA-G.R. CV No. 13112 dated 26 March 1991 setting aside the decision of the Regional Trial Court of Balayan, Batangas dated 7 July 1986 which declared petitioner the rightful owner of the disputed land. On 2 April 1985, petitioner filed an action for reconveyance and recovery of possession with damages against respondents Demetrio Caringal and spouses Dionisio Caay and Nazaria Caringal involving a parcel of land situated at Barangay No. IV, Poblacion, Balayan, Batangas, with an area of 973 square meters. The evidence for the petitioner shows that the property was the subject of a prior Miscellaneous Sales Application No. 14-2-305 filed by petitioner with the Bureau of Lands on 2 April 1973. Petitioner claims that he has been in peaceful and adverse possession of the property since 1971 and this possession was confirmed by the Bureau of Lands Investigator Felix O. Laude, Sr., when the latter recommend that the miscellaneous sales application of petitioner be given due course. On 14 August 1974, petitioner sold the land covered by his sales application to Santiago de Guzman by virtue of a deed of absolute sale. During this time, respondents Dionisio Caay and Cesaria Caringal constructed a house on the disputed lot with permission and upon tolerance of Santiago de Guzman. Respondent Dionisio Caay was then the driver of Santiago de Guzman. On 31 August 1981, petitioner repurchased the property from Santiago de Guzman with knowledge that the house of respondents Dionisio Caay and Cesaria Caringal was existing on the property but did not immediately eject them as respondent Caay was a good friend of petitioner. Petitioner later discovered that in 1982, respondent Demetrio Caringal, father of respondent Cesaria Caringal, was awarded by the Bureau of Lands a free patent over the property in question and was issued Original Certificate of Title No. P-462 in his name. On the other hand, evidence for private respondents shows that on 1 July 1981 respondent Demetrio Caringal filed a free patent application covering the disputed property; that his possession started in 1981 when it was sold to him by Gavino Tesorero who appeared to be the only surviving heir of Gregoria Pineda, the original applicant for free patent. Gregoria Pineda had been in possession of the property since 1942 and had applied in 1951 for a revocable permit with the Bureau of Lands in Tanduay, Manila. During the lifetime of Gregoria, respondent Caringal had introduced improvements on the property including the house presently occupied by respondents Dionisio Caay and Cesaria Caringal. After Gregoria died in November 1976, her surviving heir, Gavino Tesorero, sold the disputed property to respondent Caringal in 1981 for a consideration of P5,000.00 as evidenced by an affidavit executed by Tesorero. After proper inspection and investigation by the Bureau of Lands, the free patent application of respondent Caringal was given due course. In 1982, the land was awarded by the Bureau of Lands to respondent Demetrio Caringal under Free Patent Application No. 18220 and registered under Original Certificate of Title No. P-462 in his name. On 7 July 1986, the trial court rendered its decision declaring petitioner the legal owner of the disputed property. It also ordered the Register of Deeds of Batangas to cancel the name and personal circumstances of respondent Caringal as the registered owner in OCT No. T-462 and to substitute, in lieu thereof, the name and personal circumstances of petitioner. The court further directed the Register of Deeds to issue to petitioner an owner's duplicate certificate of OCT No. T-462 upon payment by the latter of the fees required by law. The court also ordered

respondents Demetrio Caringal, spouses Dionisio Caay and Cesaria Caringal to pay petitioner jointly and severally litigation expenses in the amount of P2,000.00 and attorney's fees in the amount of P3,000.00. In granting the complaint, the trial court found circumstances showing that fraud attended the issuance of the free patent thus making it null and void, to wit: (a) The existence of a prior miscellaneous sales application of petitioner should have barred the acceptance and processing of the free patent application of respondent Demetrio Caringal; (b) The said free patent was issued on 21 August 1982 to Caringal without the technical description of the property having been first issued; and, (c) The survey plan of Gregoria Pineda, original applicant for free patent and predecessor-in-interest of respondent Caringal, was spurious as it was approved only after her death. Respondent Demetrio Caringal appealed to the Court of Appeals which on 26 March 1991 overturned the decision of the trial court and ordered the dismissal of the complaint of petitioner. In finding for respondent Caringal, the appellate court cited the following reasons for its decision: (a) While petitioner had filed a prior sales application of the property in 1973, no action on the application was taken by the Bureau of Lands even after respondent Caringal filed a free patent application in 1981; the mere filing of the miscellaneous sales application does not mean that petitioner Guillermo Javier had acquired any vested right or title over the disputed property, the application being evidence only of a claim over the land; (b) Petitioner had not established continuous, adverse and open possession of the land because he sold his rights over the same to Santiago de Guzman in 1974 and reacquired the same from the latter in 1981. There was also no evidence that petitioner occupied and possessed the land under claim of ownership after he reacquired the same. On the other hand, unrebutted evidence for private respondents shows their continuous possession and that of their predecessor in-interest since 1951 until 1981 when respondent Demetrio Caringal filed an application for free patent; and, (c) No survey plan was ever submitted by petitioner for the lot in question. Thus, it is doubtful whether the lot claimed by petitioner, which contains 1,000 square meters, is the same property awarded to respondent Caringal by virtue of the free patent which covers a 973-square meter lot. Hence, this petition alleging that respondent Court of Appeals gravely erred (a) in ruling that an action for reconveyance of title must be commenced within one (1) year from the issuance of the original certificate of title; (b) in misapprehending the facts and disregarding the findings of fact of the trial court that fraud attended the issuance of Original Certificate of Title No. P-462 in the name of respondent Caringal; and, (c) in declaring petitioner as not having established continuous, adverse and open possession contrary to the testimonial and documentary evidence of petitioner on record. We cannot sustain petitioner. The basic rule is that after the lapse of one (1) year, a decree of registration is no longer open to review or attack although its issuance is attended with actual fraud. This does not mean however that the aggrieved party is without a remedy at law. If the property has not yet passed to an innocent purchaser for value, 2 an action for reconveyance is still available. The decree becomes incontrovertible and can no longer be reviewed after one (1) year from the date of the decree so that the only remedy of the landowner whose property has been wrongfully or erroneously registered in another's name is to bring an ordinary action in court for reconveyance, which is an action in personam and is always available as long as the property has not passed to an innocent third party for value. If the property has passed into the hands of an innocent purchaser for value, the remedy is an action for damages. In this case, the disputed property is still registered in the name of respondent Demetrio Caringal, so that petitioner was correct in availing himself of the procedural remedy of reconveyance. However, despite the availability to petitioner of the remedy of reconveyance, this Court finds no merit in petitioner's claim that he has legal title over the property in question that will justify its return to him. Petitioner failed to show sufficient proof of ownership over the land covered by Original Certificate of Title No. P-462. In civil cases, the burden of proof is on the plaintiff to establish his case by a preponderance of evidence. If he claims a right granted or created by law, he must prove his claim by competent evidence. He must rely on the strength of his own evidence and not upon the weakness of that of his opponent. 3 In the case at bar, petitioner as plaintiff in the trial court tried to prove his ownership over the property registered in the name of respondent Caringal by a miscellaneous sales application he filed with the Bureau of Lands and by his continuous possession thereof since 1971 when he applied for a sales patent. The records show that the property subject of petitioner's Miscellaneous Sales Application contained an area of 1,000 square meters and is particularly bounded as follows: on the North, by Gregoria Pineda; on the East, by a river; on the South, by Balayan Bay; and, on the West, by Severino Labrador, situated in the Barrio of Boulevard, Balayan, Batangas. 4 On the other hand, the land subject of the controversy which was awarded to respondent Demetrio Caringal by virtue of free patent and registered in his name under Original Certificate of Title No. P-462 contained an

area of 973 square meters and is bounded on the Northeast, by Paula Tesorero; on the Southeast, by Guillermo Javier; on the Southwest, by Francisco Espineli; and, on the Northwest, by Gregoria Pineda. 5 However, in his complaint for reconveyance which he filed with the trial court, petitioner described the parcel of land he sought to recover as A parcel of land situated at Boulevard, Balayan, Batangas. Bounded on the North by the property of Gregoria Pineda; on the East by River; on the South by Salvage Zone; and on the West by the property of Reneirio Ramos, containing an area of ONE THOUSAND (1,000) SQUARE METERS, 6 more or less. The evidence for petitioner, which the court upheld, showed the petitioner had been in possession of the parcel of land described in his complaint since 1970 and had introduced improvements thereon; that petitioner paid realty taxes as early as 1974; that District Land Officer Constante Q. Asuncion testified that he conducted an ocular inspection of the land subject of the miscellaneous sales application and found petitioner to be in possession thereof 7 and had constructed four (4) houses of light materials thereon. On the other hand, the evidence for respondent Demetrio Caringal as found by the Court of Appeals showed that as early as 1942 Gregoria Pineda had occupied the disputed lot covered by OCT No. P-462, and upon her death in 1976, her brother and only heir, Gavino Tesorero, succeeded to her rights over the lot; then in 1981, respondent Caringal bought the rights over the lot from Gavino Tesorero and later filed an application for free patent; on 7 August 1981, District Land Officer Constante Q. Asuncion issued a certification to the Director of Lands that respondent Caringal and his predecessors-in-interest had been in open, continuous and exclusive possession thereof and had introduced improvements thereon consisting of fruit-bearing coconut trees and banana plants; respondent Caringal had paid realty taxes thereon for the years 1983 to 1985; and, respondent Caringal has free patent over the property and was issued OCT No. P-462. Culled from the evidence on record, there is serious doubt on the precise identity of the parcel of land petitioner seeks to recover. The description and boundaries of the land allegedly possessed by petitioner and which was the subject of his application for sales patent differ from the parcel of land he described in his complaint for reconveyance. What petitioner seeks to recover in his complaint is the parcel of land covered by OCT No. P-462 which he claims to have been fraudulently registered in the name of Caringal. But, interestingly, the description and boundaries of the lot covered by OCT No. P-462 are totally different from the description in petitioner's complaint for recovery of ownership before the trial court against respondent Caringal in whose name OCT No. P-462 is registered. In order to maintain an action to recover ownership of real property, the person who claims that he has a better right to it must prove not only his ownership of the same but he must also satisfactorily prove the identity thereof. 8 In this case, failing to fix the identity of the property he claims, petitioner's action for reconveyance must fail. But, assuming in gratia argumenti that the property which petitioner seeks to be reconveyed to him is the same as that covered by OCT No. P-462 in the name of respondent Caringal, petitioner has not proved his ownership of the same. The filing of the miscellaneous sales application did not vest title upon petitioner over the property as there was no showing that his application was approved by the Bureau of Lands or that a sales patent over the property was granted to him prior to the issuance of free patent and OCT No. P-462 in favor of respondent Caringal. Under the Public Land Act, even the approval of a sales application merely authorizes the applicant to take possession of the land so that he can comply with the requirements prescribed by law before a final patent can be issued in his favor. Meanwhile, the Government still remains the owner thereof, as in fact the application can still be cancelled and the land awarded to another applicant, if it be shown that the legal requirements have not been complied with. Hence, when the Bureau of Lands did not take action on the sales application of petitioner but instead issued the Free Patent and title to another applicant, herein respondent Caringal, it was only then that the Government was divested of its ownership and the land was segregated from the mass of public domain, converting it into private property. 9 Moreover, the record shows, which petitioner admits, that after the filing on 7 April 1973 of the miscellaneous sales application with the Bureau of Lands, he sold the property in 1974 to Santiago de Guzman. The records fail to disclose that the sale was approved by the Bureau of Lands. Subsequently, Santiago de Guzman resold the property to petitioner. The sale of the property by petitioner to de Guzman pending the approval of the former's sales application without the approval of the Bureau of Lands violated Sec. 29 of C.A. No. 141 provides:

After title has been granted, the purchaser may not, within a period of ten years from such cultivation or grant, convey or encumber or dispose said lands or rights thereon to any person, corporation or association, without prejudice to any right or interest of the government in the land: Provided, That any sale or encumbrance made in violation of the provisions of this section, shall be null and void and shall produce the effect of annulling the acquisition and reverting the property and all rights thereto to the State, and all payments on the purchase price theretofore made to the Government shall be forfeited. Clearly, this provision contemplates a sale and encumbrance that a purchaser may desire to make during the pendency of his application and before his compliance with the requirements of the law. 10 Since the application is still pending consideration and the rights of the applicant have not yet been determined, he cannot make any transfer that may affect the land, without the approval of the government. Thus, the law allows an applicant "after the cultivation of the land has begun" to convey or encumber his rights to any person "provided such conveyance or encumbrance does not affect any right or interest of the Government on the land." And to safeguard such right or interest, previous approval of the Secretary of Environment and Natural Resources is required. Such approval becomes unnecessary 11 after the right of the purchaser is already deemed vested, the issuance of the patent being a mere ceremony. In this case, the sale of the property covered by a pending application for a sales patent without the required approval of the government produced the effect of annulling the sales application as if none had been filed. Thus, the Bureau of Lands could consider and approve subsequent applications for the acquisition of the property filed by other persons with the necessary qualifications. In granting the free patent applied for by respondent Caringal which led to the issuance of OCT No. P-462 in his favor, the Bureau of Lands acted regularly within its authority. WHEREFORE, the petition is DENIED and the decision of the Court of Appeals dated 26 March 1991 is AFFIRMED. SO ORDERED.

G.R. No. 133168

March 28, 2006

1

REPUBLIC OF THE PHILIPPINES, Petitioner, vs. BENJAMIN GUERRERO, Respondent.

DECISION GARCIA, J.: Assailed and sought to be set aside in this petition for review under Rule 45 of the Rules of Court is the decision2dated February 12, 1998 of the Court of Appeals (CA) in CA-G.R. CV No. 50298 affirming an earlier decision of the Regional Trial Court (RTC) of Quezon City in Civil Case No. 89-3899, entitled "Petition for Amendment of Plan and Technical Description of Original Certificate of Title No. 0-28 in the name of Benjamin Guerrero, Registry of Deeds of Quezon City." The assailed decision of the CA recites the facts as follows: Sometime in December 1964, respondent Benjamin Guerrero filed with the Bureau of Lands (now Lands Management Bureau) a Miscellaneous Sales Application No. V-83191 covering a parcel of land situated at Pugad Lawin, Quezon City, consisting of 256 square meters. Upon favorable report and recommendation of the District Land Officer, Guerreros application was approved per Order of Award (Exhibit "B"), with the boundaries of the land awarded specified as follows: N-Lot No. 10-C, Psd-37801; S-Culiat Creek; E-Road; and W-Public Land. A sketch of the land awarded is contained at the back of the Order of Award. Subsequently, Miscellaneous Sales Patent No. 8991 dated August 16, 1982 was issued in favor of respondent. Pursuant thereto the corresponding Original Certificate of Title No. 0-28 was issued on August 27, 1982. On July 29, 1983, one Angelina Bustamante filed a protest with the Bureau of Lands claiming that respondent obtained the sales patent through fraud, false statement of facts and/or omission of material facts considering that 174 square meters awarded to respondent covered the land where her house is situated and where she has been residing since 1961. A formal investigation was conducted by the Bureau of Lands, after which the Director of Lands issued an order dismissing the protest of Angelina Z. Bustamante. The dismissal of the protest was affirmed by the then Minister of Natural Resources and by the Office of the President in a Decision dated July 22, 1985. Bustamante filed a motion for reconsideration of the Decision dated July 22, 1985. Acting on the motion for reconsideration, the President, , ordered that the case be remanded to the DENR [Department of Environment and Natural Resources] for the latters office to conduct an ocular investigation and resurvey of the disputed area. The said directive is contained in the Order dated October 30, 1987(Exhibit "J"). Pursuant to the order of the Office of the President, an ocular investigation and relocation survey was conducted by the DENR. A report (Exhibit "K") was thereafter submitted with a finding that 83 square meters of the titled property of Guerrero consisting of 174 square meters is under ACTUAL PHYSICAL POSSESSION of Marcelo Bustamante (husband of Angelina Bustamante) with only 91 square meters under the physical possession of Guerrero. It was also found out that OCT No. 0-28 is supposed to be traversed by a road 3 meters wide, as even the Order of Award in favor of Guerrero, shows by the boundaries of the land indicated therein, viz: bounded on the N-Lot No. 10-C, Psd37801, S-Culiat Creek, E-Road and W-Public Land. On January 10, 1989, the Office of the President, upon receipt of the [DENR] Ocular Investigation and Relocation Survey Report (Exhibit "K") , issued an order directing the DENR to implement the Report for the proper correction of the technical description of the land covered by OCT No. 0-28 issued to respondent. Pursuant to the directive of the Office of the President, the Director of Lands [on behalf of the Republic of the Philippines] instituted the instant action [Petition for Amendment of Plan and Technical Description of OCT No. 0-28 in the name of Benjamin Guerrero] on November 7, 1989.

On April 6, 1990, the [respondent] Benjamin Guerrero filed a motion to dismiss the petition , alleging among other things, that the RTC of Quezon City was without jurisdiction over the Director of Lands petition and that the said petition was defective in form and substance, inasmuch as it failed to name [Guerrero] who holds a certificate of title (OCT No. 0-28) over the properties subject of the petition, as respondent in the action, and that the title sought to be amended was irrevocable and can no longer be questioned. In its order dated July 8, 1992, the lower court denied the said motion to dismiss for lack of merit. Trial of the petition followed with the Director of Lands, on one hand, and [Guerrero], on the other, presenting their respective evidence and witnesses.3 [Words in bracket added.] On July 13, 1995, the RTC, on the postulate that petitioner Republic failed to prove its allegation that respondent obtained the sales patent and the certificate of title through fraud and misrepresentation, rendered judgment finding for the latter. The trial court likewise ruled that the original certificate of title (OCT No. 0-28) in the name of respondent acquired the characteristics of indefeasibility after the expiration of one (1) year from the entry of the decree of registration. Consequently, petitioner interposed an appeal to the CA, which, in a decision dated February 12, 1998, affirmed that of the trial court, rationalizing as follows: It is a settled rule that a certificate of title issued pursuant to any grant or patent involving public lands is as conclusive and indefeasible as any other certificate of title issued upon private lands in ordinary or cadastral registration proceedings. The effect of registration of a homestead or any other similar patent and the issuance of a certificate of title to the patentee is to vest in him an incontestable title to the land, in the same manner as if ownership had been determined by final decree of the court, and the title so issued is absolutely conclusive and indisputable. In the same way, therefore, that a decree of registration may be reviewed or reopened within one year after the entry thereof, upon a charge of actual fraud, a patent awarded in accordance with the Public Land Law may be reviewed within one year from the date of the order for the issuance of the patent also on the ground of actual fraud. xxx xxx xxx

xxx there is no showing that at the time the [respondent] applied for his miscellaneous sales patent, there were third persons who had been in occupation of the land applied for. While subsequent survey documents, prepared as a consequence of the protest filed by the Bustamentes, report the possession of the Bustamantes of a portion of the land, and the erection of their house thereon, these reports do not indicate if such structures were existing at the time the application of the [respondent] was filed in 1964. There is no support, therefore, to the submission that the [respondent] was guilty of actual fraud in the acquisition of his miscellaneous sales patent, and subsequently, OCT No. 0-28.4 (Words in bracket added) Petitioner then moved for a reconsideration of the above decision but the same was denied by the appellate court in 5 its resolution of March 23, 1998. Hence, this recourse, petitioner Republic contending that the appellate court erred in holding I. That a certificate of title issued pursuant to any grant or patent involving public lands is conclusive and indefeasible despite the fact that respondents title was procured through fraud and misrepresentation. II. That there is no basis for the submission that respondent was guilty of actual fraud in the acquisition of his miscellaneous sales patent despite the final ruling of the Office of the President from which ruling respondent did not appeal. III. That the Director of Lands cannot raise the issue of possession of a third person of the land, or a portion thereof, after the award and issuance of the patent to the applicant despite the obvious fact that the protest was filed within one year from the issuance of patent.6

Petitioner argues in esse that respondent procured his sales patent and certificate of title through fraud and misrepresentation. To support its basic posture, petitioner points to the verification survey conducted by Engr. Ernesto Erive of the DENR, which, to petitioner, argues for the proposition that respondents entitlement to a public land award should have been limited to a 91-square meter area instead of the 174 square meters eventually granted. On the other hand, respondent contends that his OCT No. 0-28 which he secured pursuant to a sales patent is conclusive and indefeasible under the Torrens system of registration. As such, his title can no longer be altered, impugned or cancelled. At the outset, it must be pointed out that the essential issue raised in this Petition the presence of fraud is factual. As a general rule, this Court does not review factual matters, as only questions of law may be raised in a petition for review on certiorari filed with this Court. And as the Court has consistently held, factual findings of trial courts, when adopted and confirmed by the CA, are final and conclusive on this Court,7 save when the judgment of the appellate court is based on a misapprehension of facts or factual inferences manifestly incorrect or when that 8 court overlooked certain relevant facts which, if properly considered, would justify a different conclusion. Obviously, petitioner is invoking these exceptions toward having the Court review the factual determinations of the CA. The basic issue in this case turns on whether or not petitioner has proven by clear and convincing evidence that respondent procured Miscellaneous Sales Patent (MSP) No. 8991 and OCT No. 0-28 through fraud and misrepresentation. It bears to stress that the property in question, while once part of the lands of the public domain and disposed of via a miscellaneous sales arrangement, is now covered by a Torrens certificate. Grants of public land were brought under the operation of the Torrens system by Act No. 496, or the Land Registration Act of 1903. Under the Torrens system of registration, the government is required to issue an official certificate of title to attest to the fact that the person named is the owner of the property described therein, subject to such liens and encumbrances as thereon noted or what the law warrants or reserves.9 As it were, the Torrens system aims to obviate possible conflicts of title by giving the public the right to rely upon the face of the Torrens certificate and to dispense, as a rule, with the necessity of inquiring further; on the part of the registered owner, the system gives him complete peace of mind that he would be secured in his ownership as long as he has not voluntarily disposed of any right over the covered land.10 Section 122 of Act No. 496 provides: SEC. 122. Whenever public lands belonging to the Government of the [Republic of the Philippines] are alienated, granted, or conveyed to persons or to public or private corporations, the same shall be brought forthwith under the operation of this Act and shall become registered lands. It shall be the duty of the official issuing the instrument of alienation, grant, or conveyance in behalf of the Government to cause such instrument before its delivery to the grantee, to be filed with the register of deeds for the province where the land lies and to be there registered like other deeds and conveyances, whereupon a certificate shall be entered as in other cases of registered land, and an owners duplicate certificate issued to the grantee. The deed, grant, or instrument of conveyance from the Government shall not take effect as a conveyance or bind the land, but shall operate only as a contract between the Government and the grantee and as evidence of authority to the clerk or register of deeds to make registration. The act of registration shall be the operative act to convey and affect the land, and in all cases under this Act registration shall be made in the office of the register of deeds for the province where the land lies. xxx. (Words in bracket added) Upon its registration, the land falls under the operation of Act No. 496 and becomes registered land. Time and again, we have said that a Torrens certificate is evidence of an indefeasible title to property in favor of the person whose name appears thereon.11 However, Section 38 of Act No. 496 recognizes the right of a person deprived of land to institute an action to reopen or revise a decree of registration obtained by actual fraud. Section 38 of Act No. 496 says so: SEC. 38. xxx. Every decree of registration shall bind the land, and quiet title thereto, subject only to the exceptions stated in the following section. It shall be conclusive upon and against all persons, including the [Republic of the Philippines] and all the branches thereof, . Such decree shall not be opened by reason of the absence, minority, or other disability of any person affected thereby, nor by any proceeding in any court for reversing judgments or decrees, subject, however, to the right of any person deprived of the land or of any estate or interest therein by decree of registration obtained by actual fraud, to file in the proper Court of First Instance [now Regional Trial Court] a petition for review of the decree of registration within one year after entry of the decree provided no innocent purchaser for

value has acquired an interest. Upon the expiration of said term of one year, every decree or certificate of title issued in accordance with this section shall be incontrovertible. xxx. (Emphasis and words in bracket supplied) Fraud is of two kinds: actual or constructive. Actual or positive fraud proceeds from an intentional deception practiced by means of the misrepresentation or concealment of a material fact. Constructive fraud is construed as a fraud because of its detrimental effect upon public interests and public or private confidence, even though the act is not 12 done with an actual design to commit positive fraud or injury upon other persons. Fraud may also be either extrinsic or intrinsic. Fraud is regarded as intrinsic where the fraudulent acts pertain to an issue involved in the original action, or where the acts constituting the fraud were or could have been litigated therein. The fraud is extrinsic if it is employed to deprive parties of their day in court and thus prevent them from asserting their right to the property registered in the name of the applicant.13 The distinctions assume significance because only actual and extrinsic fraud had been accepted and is contemplated by the law as a ground to review or reopen a decree of registration. Thus, relief is granted to a party deprived of his interest in land where the fraud consists in a deliberate misrepresentation that the lots are not contested when in fact they are; or in willfully misrepresenting that there are no other claims; or in deliberately failing to notify the party entitled to notice; or in inducing him not to oppose an application; or in misrepresenting about the identity of the lot to the true owner by the applicant causing the former to withdraw his application. In all these examples, the overriding consideration is that the fraudulent scheme of the prevailing litigant prevented a party from having his day in court or from presenting his case. The fraud, therefore, is one that affects and goes into the jurisdiction of the court.14 We have repeatedly held that relief on the ground of fraud will not be granted where the alleged fraud goes into the merits of the case, is intrinsic and not collateral, and has been controverted and decided. Thus, we have underscored the denial of relief where it appears that the fraud consisted in the presentation at the trial of a supposed forged document, or a false and perjured testimony, or in basing the judgment on a fraudulent compromise agreement, or in the alleged fraudulent acts or omissions of the counsel which prevented the petitioner from properly presenting the case.15 Petitioner fails to convince the Court that the facts relied upon by it to justify a review of the decree constitute actual and extrinsic fraud. It has not adduced adequate evidence that would show that respondent employed actual and extrinsic fraud in procuring the patent and the corresponding certificate of title. Petitioner miserably failed to prove that it was prevented from asserting its right over the lot in question and from properly presenting its case by reason of such fraud. In fact, other than its peremptory statement in its petition filed before the trial court that "the patentee, Benjamin Guerrero, obtained the above indicated sales patent through fraud, false statement of facts and/or omission of material facts,"16 petitioner did not specifically allege how fraud was perpetrated by respondent in procuring the sales patent and the certificate of title. Nor was any evidence proffered to substantiate the allegation. Fraud cannot be presumed, and the failure of petitioner to prove it defeats it own cause. Well-settled is the rule that the party alleging fraud or mistake in a transaction bears the burden of proof. The circumstances evidencing fraud are as varied as the people who perpetrate it in each case. It may assume different shapes and forms; it may be committed in as many different ways.18 Thus, the law requires that fraud be established, 19 not just by preponderance of evidence, but by clear and convincing evidence. Petitioner relies heavily on the verification survey report which stated that respondent Guerrero was entitled to only 91 square meters of the subject lot instead of 174 square meters which was awarded to him. There is, however, no proof that the area eventually awarded to respondent was intentionally and fraudulently increased. It was never proven that respondent was a party to any fraud that led to the award of a bigger area of 174 square meters instead of 91 square meters. Petitioner even failed to give sufficient proof of any error which may have been committed by its agents who had surveyed the subject property nor had petitioner offered a sensible explanation as to the reason for such discrepancy. Thus, the presumption of regularity in the performance of official functions must be respected. This Court agrees with the RTC that the issuance of the sales patent over the subject lot was made in accordance with the procedure laid down by Commonwealth Act No. 141, as amended, otherwise known as the Public Land Act.21 Under Section 91 thereof, an investigation should be conducted for the purpose of ascertaining the veracity of 22 the material facts set out in the application. The law also requires sufficient notice to the municipality and barrio where the land is located in order to give adverse claimants the opportunity to present their claims.23
20 17

In the instant case, records reveal that on December 22, 1964, a day after respondent filed his miscellaneous sales application, an actual investigation and site verification of the parcel of land was conducted by Land Investigator 24 Alfonso Tumbocon who reported that the land was free from claims and conflicts. Likewise, the notice of sale of the lot in question was posted at the District Land Office in San Miguel, Manila, at the Quezon City Hall, and at Pugad Lawin, Quezon City for 30 consecutive days from February 17, 1965 to March 17, 1965 which was the date scheduled for the sale of the lot. The said notice was worded as follows: If there is any adverse claim to the land, such claim must be filed at the Bureau of Lands, Manila on or before the date of the sale; otherwise such claim shall forever be barred.25 Further, the "Order of Award" dated May 20, 1971, as well as the "Issuance of Patent" dated June 28, 1982 were both duly signed by the Director of Lands. The "Order of Award" even declared that Guerrero has in good faith established his residence on the land in question. On the other hand, the "Issuance of Patent" stated that the land consisting of 174 square meters is free from any adverse claim and that Guerrero has fully paid the purchase price of the lot. Having complied with all the requirements of the law preliminary to the issuance of the patent, respondent was thus issued MSP No. 8991 dated August 16, 1982. Thereafter, the corresponding OCT No. 0-28 was issued on August 27, 1982 in the name of respondent Guerrero. At any rate, by legal presumption, public officers are deemed to have regularly performed their official duties. Thus, the proceedings for land registration that led to the issuance of MSP No. 8991 and OCT No. 0-28 in respondents name are presumptively regular and proper. To overturn this legal presumption will not only endanger judicial stability, but also violate the underlying principle of the Torrens system. Indeed, to do so would reduce the vaunted legal indefeasibility of Torrens titles to meaningless verbiage.28 Besides, this presumption of regularity has not been overcome by the evidence presented by petitioner. We, therefore, cannot sustain petitioners contention that fraud tainted the sales patent granted to respondent Guerrero, as well as the certificate of title issued in consequence thereof. Granting that Guerrero committed extrinsic and actual fraud, petitioner failed to avail itself of the remedy within the prescribed period. Under Section 38 of Act No. 496, a petition for reopening and review of the decree of registration must be filed within one year from the date of entry of said decree. In the case of public land grants or patents, the one-year period commences from the issuance of the patent by the government.29 In the instant case, the sales patent was issued to respondent on August 16, 1982, while petitioner instituted an action to amend respondents certificate of title on November 7, 1989 or after the lapse of more than seven (7) years from the issuance of the patent. Clearly, petitioner failed to timely avail of the remedy to contest Guerreros title. Petitioner argues that the right of the State for the reversion of unlawfully acquired property is not barred by prescription. Thus, it can still recover the land granted to respondent. True, prescription, basically, does not run against the State and the latter may still bring an action, even after the lapse of one year, for the reversion to the public domain of lands which have been fraudulently granted to private 30 individuals. However, this remedy of reversion can only be availed of in cases of fraudulent or unlawful inclusion of the land in patents or certificates of title. In the present case, petitioner cannot successfully invoke this defense for, as discussed earlier, it was never proven that respondents patent and title were obtained through actual fraud or other illegal means. Lest it be overlooked, a piece of land covered by a registered patent and the corresponding certificate of title ceases to be part of the public domain. As such, it is considered a private property over which the Director of Lands has 31 neither control nor jurisdiction. Petitioner likewise insists that respondents title had yet to attain the status of indefeasibility. As argued, Angelina Bustamante was able to timely file a protest on July 29, 1983, which was well within the one-year prescriptive period. We do not agree.
26 27

While Angelina Bustamante indeed protested the award of a sales patent in favor of respondent, the protest was, however, filed with the Bureau of Lands instead of with the regional trial court as mandated by the aforequoted provision of Section 38 of Act No. 496. Said provision expressly states that a petition for review of a decree of registration shall be filed in the "proper Court of First Instance" (now Regional Trial Court). The law did not say that such petition may be filed with an administrative agency like the Bureau of Lands. To be sure, what the law contemplates in allowing a review of the decree of registration is a full-blown trial before a regular court where each party could be afforded full opportunity to present his/its case and where each of them must establish his case by preponderance of evidence and not by mere substantial evidence, the usual quantum of proof required in administrative proceedings. The concept of "preponderance of evidence" refers to evidence which is of greater weight, or more convincing, than that which is offered in opposition to it; at bottom, it means probability of truth.32On the other hand, substantial evidence refers to such relevant evidence as a reasonable mind might accept as adequate to 33 support a conclusion, even if other minds equally reasonable might conceivably opine otherwise. As the review of a decree of registration constitutes an attack on the very integrity of land titles and the Torrens system, a full-blown trial on the merits before a regular court is necessary for the purpose of achieving a more indepth and thorough determination of all issues involved. Hence, contrary to petitioners assertion, the protest filed by Bustamante with the Bureau of Lands cannot be considered in the context of a petition to review the decree of registration issued to respondent. It was only on November 7, 1989 that such petition was filed by the Director of Lands with the RTC and obviously, it was way beyond the one-year period prescribed by law. It is worth stressing that the Torrens system was adopted in this country because it was believed to be the most effective measure to guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and recognized. If a person purchases a piece of land on the assurance that the sellers title thereto is valid, he should not run the risk of being told later that his acquisition was ineffectual after all. This would not only be unfair to him. What is worse is that if this were permitted, public confidence in the system would be eroded and land transactions would have to be attended by complicated and not necessarily conclusive investigations and proof of ownership. The further consequence would be that land conflicts could be even more abrasive, if not even violent. The government, recognizing the worthy purposes of the Torrens system, should be the first to accept the validity of titles issued thereunder once the conditions laid down by the law are satisfied.34 Instead of stabilizing the Torrens system, petitioner, in filing a suit for the amendment of OCT No. 0-28, derogates the very integrity of the system as it gives the impression to Torrens title holders, like herein respondent, that their titles can be questioned by the same authority who had approved their titles. In that case, no Torrens title holder shall be at peace with the ownership and possession of his land, for land registration officers can question his title any time they make a finding unfavorable to said title holder. This is all the more frustrating for respondent Guerrero considering that he had bought the subject lot from the government itself, the very same party who is now impugning his title. While the Torrens system is not a mode of acquiring titles to lands but merely a system of registration of titles to lands,35 justice and equity demand that the titleholder should not be made to bear the unfavorable effect of the mistake or negligence of the States agents, in the absence of proof of his complicity in a fraud or of manifest damage to third persons. The real purpose of the Torrens system is to quiet title to land and put a stop forever to any question as to the legality of the title, except claims that were noted in the certificate at the time of the registration or that may arise subsequent thereto.36 Otherwise, the integrity of the Torrens system shall forever be sullied by the ineptitude 37 and inefficiency of land registration officials, who are ordinarily presumed to have regularly performed their duties. Respondents certificate of title, having been registered under the Torrens system, was thus vested with the garment of indefeasibility. WHEREFORE, the instant petition is hereby DENIED and the assailed decision is AFFIRMED. SO ORDERED.