On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a Motion

to Intervene and/or to Appear as Amicus Curiae. The CHR asserts that IPRA is an
expression of the principle of parens patriae and that the State has the responsibility
to protect and guarantee the rights of those who are at a serious disadvantage like
indigenous peoples. For this reason it prays that the petition be dismissed.

On March 23, 1999, another group, composed of the Ikalahan Indigenous People and
EN BANC the Haribon Foundation for the Conservation of Natural Resources, Inc. (Haribon, et
al.), filed a motion to Intervene with attached Comment-in-Intervention. They agree
G.R. No. 135385               December 6, 2000 with the NCIP and Flavier, et al. that IPRA is consistent with the Constitution and pray
that the petition for prohibition and mandamus be dismissed.
ISAGANI CRUZ and CESAR EUROPA, petitioners,
vs. The motions for intervention of the aforesaid groups and organizations were granted.
SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES, SECRETARY
OF BUDGET AND MANAGEMENT and CHAIRMAN and COMMISSIONERS OF Oral arguments were heard on April 13, 1999. Thereafter, the parties and intervenors
THE NATIONAL COMMISSION ON INDIGENOUS PEOPLES, respondents. filed their respective memoranda in which they reiterate the arguments adduced in
their earlier pleadings and during the hearing.

RESOLUTION Petitioners assail the constitutionality of the following provisions of the IPRA and its
Implementing Rules on the ground that they amount to an unlawful deprivation of the
State’s ownership over lands of the public domain as well as minerals and other
PER CURIAM:
natural resources therein, in violation of the regalian doctrine embodied in Section 2,
Article XII of the Constitution:
Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and
mandamus as citizens and taxpayers, assailing the constitutionality of certain
"(1) Section 3(a) which defines the extent and coverage of ancestral domains, and
provisions of Republic Act No. 8371 (R.A. 8371), otherwise known as the Indigenous
Section 3(b) which, in turn, defines ancestral lands;
Peoples Rights Act of 1997 (IPRA), and its Implementing Rules and Regulations
(Implementing Rules).
"(2) Section 5, in relation to section 3(a), which provides that ancestral domains
including inalienable public lands, bodies of water, mineral and other resources found
In its resolution of September 29, 1998, the Court required respondents to
within ancestral domains are private but community property of the indigenous
comment.1 In compliance, respondents Chairperson and Commissioners of the
peoples;
National Commission on Indigenous Peoples (NCIP), the government agency created
under the IPRA to implement its provisions, filed on October 13, 1998 their Comment
to the Petition, in which they defend the constitutionality of the IPRA and pray that the "(3) Section 6 in relation to section 3(a) and 3(b) which defines the composition of
petition be dismissed for lack of merit. ancestral domains and ancestral lands;

On October 19, 1998, respondents Secretary of the Department of Environment and "(4) Section 7 which recognizes and enumerates the rights of the indigenous peoples
Natural Resources (DENR) and Secretary of the Department of Budget and over the ancestral domains;
Management (DBM) filed through the Solicitor General a consolidated Comment. The
Solicitor General is of the view that the IPRA is partly unconstitutional on the ground (5) Section 8 which recognizes and enumerates the rights of the indigenous peoples
that it grants ownership over natural resources to indigenous peoples and prays that over the ancestral lands;
the petition be granted in part.
"(6) Section 57 which provides for priority rights of the indigenous peoples in the
On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one harvesting, extraction, development or exploration of minerals and other natural
of the authors of the IPRA, Mr. Ponciano Bennagen, a member of the 1986 resources within the areas claimed to be their ancestral domains, and the right to
Constitutional Commission, and the leaders and members of 112 groups of enter into agreements with nonindigenous peoples for the development and utilization
indigenous peoples (Flavier, et. al), filed their Motion for Leave to Intervene. They join of natural resources therein for a period not exceeding 25 years, renewable for not
the NCIP in defending the constitutionality of IPRA and praying for the dismissal of more than 25 years; and
the petition.
"(7) Section 58 which gives the indigenous peoples the responsibility to maintain, "(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66
develop, protect and conserve the ancestral domains and portions thereof which are and other related provisions of R.A. 8371 are unconstitutional and invalid;
found to be necessary for critical watersheds, mangroves, wildlife sanctuaries,
wilderness, protected areas, forest cover or reforestation."2 "(2) The issuance of a writ of prohibition directing the Chairperson and
Commissioners of the NCIP to cease and desist from implementing the
Petitioners also content that, by providing for an all-encompassing definition of assailed provisions of R.A. 8371 and its Implementing Rules;
"ancestral domains" and "ancestral lands" which might even include private lands
found within said areas, Sections 3(a) and 3(b) violate the rights of private "(3) The issuance of a writ of prohibition directing the Secretary of the
landowners.3 Department of Environment and Natural Resources to cease and desist from
implementing Department of Environment and Natural Resources Circular
In addition, petitioners question the provisions of the IPRA defining the powers and No. 2, series of 1998;
jurisdiction of the NCIP and making customary law applicable to the settlement of
disputes involving ancestral domains and ancestral lands on the ground that these "(4) The issuance of a writ of prohibition directing the Secretary of Budget
provisions violate the due process clause of the Constitution.4 and Management to cease and desist from disbursing public funds for the
implementation of the assailed provisions of R.A. 8371; and
These provisions are:
"(5) The issuance of a writ of mandamus commanding the Secretary of
"(1) sections 51 to 53 and 59 which detail the process of delineation and Environment and Natural Resources to comply with his duty of carrying out
recognition of ancestral domains and which vest on the NCIP the sole the State’s constitutional mandate to control and supervise the exploration,
authority to delineate ancestral domains and ancestral lands; development, utilization and conservation of Philippine natural resources."7

"(2) Section 52[i] which provides that upon certification by the NCIP that a After due deliberation on the petition, the members of the Court voted as follows:
particular area is an ancestral domain and upon notification to the following
officials, namely, the Secretary of Environment and Natural Resources, Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the
Secretary of Interior and Local Governments, Secretary of Justice and Chief Justice and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the
Commissioner of the National Development Corporation, the jurisdiction of validity of the challenged provisions of R.A. 8371. Justice Puno also filed a separate
said officials over said area terminates; opinion sustaining all challenged provisions of the law with the exception of Section 1,
Part II, Rule III of NCIP Administrative Order No. 1, series of 1998, the Rules and
"(3) Section 63 which provides the customary law, traditions and practices of Regulations Implementing the IPRA, and Section 57 of the IPRA which he contends
indigenous peoples shall be applied first with respect to property rights, should be interpreted as dealing with the large-scale exploitation of natural resources
claims of ownership, hereditary succession and settlement of land disputes, and should be read in conjunction with Section 2, Article XII of the 1987 Constitution.
and that any doubt or ambiguity in the interpretation thereof shall be On the other hand, Justice Mendoza voted to dismiss the petition solely on the
resolved in favor of the indigenous peoples; ground that it does not raise a justiciable controversy and petitioners do not have
standing to question the constitutionality of R.A. 8371.
"(4) Section 65 which states that customary laws and practices shall be used
to resolve disputes involving indigenous peoples; and Seven (7) other members of the Court voted to grant the petition. Justice Panganiban
filed a separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8,
"(5) Section 66 which vests on the NCIP the jurisdiction over all claims and and related provisions of R.A. 8371 are unconstitutional. He reserves judgment on the
disputes involving rights of the indigenous peoples."5 constitutionality of Sections 58, 59, 65, and 66 of the law, which he believes must
await the filing of specific cases by those whose rights may have been violated by the
IPRA. Justice Vitug also filed a separate opinion expressing the view that Sections
Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP 3(a), 7, and 57 of R.A. 8371 are unconstitutional. Justices Melo, Pardo, Buena,
Administrative Order No. 1, series of 1998, which provides that "the administrative Gonzaga-Reyes, and De Leon join in the separate opinions of Justices Panganiban
relationship of the NCIP to the Office of the President is characterized as a lateral but and Vitug.
autonomous relationship for purposes of policy and program coordination." They
contend that said Rule infringes upon the President’s power of control over executive
departments under Section 17, Article VII of the Constitution.6 As the votes were equally divided (7 to 7) and the necessary majority was not
obtained, the case was redeliberated upon. However, after redeliberation, the voting
remained the same. Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil
Petitioners pray for the following: Procedure, the petition is DISMISSED.
Attached hereto and made integral parts thereof are the separate opinions of Justices
Puno, Vitug, Kapunan, Mendoza, and Panganiban.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Melo, Quisumbing, Pardo, Buena, Gonzaga-Reyes,

Ynares-Santiago, and De Leon, Jr., JJ., concur.
Puno, Vitug, Kapunan, Mendoza and Panganiban JJ., see separate opinion
 On April 6, 1978, petitioner demanded payment of rentals from William Michael for
the use of the land occupied by Michael Slipways, Inc.. On August 4, 1981,
petitioner filed an opposition to Michael’s miscellaneous sales application covering
the land on the ground that he was the registered owner thereof.

William Michael in turn protested the issuance by the Bureau of Lands of a free
SECOND DIVISION
patent to petitioner. He claimed that he had been in actual possession of the land
since 1963 and that he had introduced substantial improvements thereon.
[G.R. No. 119682. January 21, 1999.]
On February 16, 1989, upon the recommendation of the Land Management Bureau
FRANCISCO BAGUIO, Petitioner, v. REPUBLIC OF THE PHILIPPINES,
of the Department of Environment and Natural Resources, the government,
RICARDO T. MICHAEL, in his capacity as Heir-Successor of WILLIAM
represented by the Director of Lands, filed a petition for cancellation of title and/or
MICHAEL, SR., and as President of MICHAEL SLIPWAYS, INC., and COURT
reversion of land against petitioner Baguio and the Register of Deeds of Cebu. The
OF APPEALS, Respondents.
case was filed in the Regional Trial Court of Mandaue City which granted private
respondent Ricardo Michael leave to intervene as heir and successor-in-interest of
DECISION
William Michael and as president of Michael Slipways, Inc.

On July 20, 1992, the trial court rendered a decision canceling the free patent and
MENDOZA, J.: the certificate of title of petitioner Baguio, ordering the reversion of the land to the
public domain, and declaring private respondent Michael the true and lawful
occupant of the land. The trial court ruled that the false statements made by
This is a petition for review of the decision of the Court of Appeals 1 affirming the petitioner Baguio in his application for free patent had the effect of ipso facto
decision of the Regional Trial Court, Branch 28, of Mandaue City, nullifying Free canceling the free patent and the title of petitioner.
Patent No. 7757 and Original Certificate of Title No. 0-15457 issued in the name of
petitioner Francisco Baguio. Petitioner appealed to the Court of Appeals which, on February 28, 1995, affirmed
the decision of the trial court. Hence, this petition for review.
chanrobles law library

The patent and certificate of title cover a parcel of land, consisting of 5,870 sq. m.,
in Catarman, Liloan, Cebu. Known as Lot 1426, Case 2, Pls. 823, the land was Petitioner contends that —
declared by the government public land in 1963.
1. The public respondent erred in not declaring that respondent Republic of the
The evidence shows that, on August 2, 1963, private respondent Ricardo Michael’s Philippines action was already barred by prescription.
predecessor-in-interest, William Michael, filed with the Bureau of Lands an
application for foreshore lease of the land. The application was recommended for 2. Granting arguendo that respondent’s action was not barred by prescription,
approval by the land investigator who also recommended that the applicant be nonetheless, the Regional Trial Court, erred in finding that petitioner "acted in bad
granted a provisional permit to occupy the land for one year from October 4, 1963 faith and procured the issuance of the Free Patent (VII-I)-7757 and the Original
to October 3, 1964. Certificate of Title No. 0-15457 through fraud and misrepresentation." cralaw virtua1aw library

On October 8, 1963, by virtue of a permit granted to him by the Bureau of Lands, 3. Granting arguendo that respondent Republic’s action should prosper,
William Michael made some reclamation on the land, built a fence around the nonetheless, the Regional Trial Court erred in" (d)eclaring intervenor (private
premises, and constructed a bridge over a portion which was under water. Upon the respondent herein) as the true and lawful possessor and occupant of the land
expiration of the permit on October 4, 1964, the Highways District Engineer subject of the intervention."cralaw virtua1aw library

recommended to the Director of Lands that the land be leased to Michael. On the
other hand, the land investigator recommended granting Michael the authority to 4. The Regional Trial Court erred in finding that the land in question is a foreshore
survey the foreshore land in view of the completion of the reclamation made by him land.
on the premises. On February 25, 1968, Michael filed a miscellaneous sales
application covering the reclaimed foreshore land. We find these contentions to be without merit.

On November 9, 1976, petitioner Baguio applied to the Bureau of Lands for a free First. It is true that, once a patent is registered and the corresponding certificate of
patent covering the same land. In his application, petitioner stated that the land title is issued, the land covered by them ceases to be part of the public domain and
was agricultural land and not claimed or occupied by any other person and that he becomes private property, and the Torrens Title issued pursuant to the patent
had been in actual and continuous possession and cultivation of the same. On the becomes indefeasible upon the expiration of one year from the date of issuance of
basis of these representations, a free patent was issued to him and, on January 10, such patent. 2 However, as held in Director of Lands v. De Luna, 3 even after the
1978, Original Certificate of Title No. 0-15457 was issued in his name by the lapse of one year, the State may still bring an action under §101 4 of
Register of Deeds of Cebu. Commonwealth Act No. 141 for the reversion to the public domain of land which has
been fraudulently granted to private individuals. 5 Such action is not barred by
prescription, and this is settled law. 6 and parts of any concession, title, or permit issued on the basis of such application,
and any false statement therein or omission of facts altering, changing or modifying
Indeed, the indefeasibility of a certificate of title cannot be invoked by one who the consideration of the facts set forth in such statements, and any subsequent
procured the title by means of fraud. 7 Public policy demands that one who obtains modification, alteration, or change of the material facts set forth in the application
title to public land through fraud should not be allowed to benefit therefrom. 8 shall ipso facto produce the cancellation of the concession, title or permit granted. It
shall be the duty of the Director of Lands, from time to time and whenever he may
Second. Petitioner contends that the trial court erred in finding that he was guilty of deem it advisable, to make the necessary investigations for the purpose of
fraud in procuring the issuance of the free patent and the corresponding certificate ascertaining whether the material facts set out in the application are true, or
of title. He insists that what he stated in his application for free patent (that the whether they continue to exist and are maintained and preserved in good faith, and
subject land is agricultural land not claimed or occupied by persons other than for the purpose of such investigation, the Director of Lands is hereby empowered to
himself and that he had been in actual and continuous possession and cultivation of issue subpoenas and subpoenas duces tecum and, if necessary, to obtain
the same) were all true. He also assails the finding of the trial court that the subject compulsory process from the courts. In every investigation made in accordance with
land is foreshore land. this section, the existence of bad faith, fraud, concealment, or fraudulent and illegal
modification of essential facts shall be presumed if the grantee or possessor of the
Petitioner puts in issue the findings of fact of the trial court. But the only errors land shall refuse or fail to obey a subpoena or subpoena duces tecum lawfully issued
which are reviewable by this Court in a petition for review on certiorari of a decision by the Director of Land or his authorized delegates or agents, or shall refuse or fail
of the Court of Appeals are those allegedly committed by the latter court and not to give direct and specific answers to pertinent questions, and on the basis of such
those of the trial court. Petitioner’s assignment of errors is thus misplaced, and for presumption, an order of cancellation may issue without further proceedings.
this reason, the petition should be dismissed. Furthermore, only questions of law
may be raised in a petition for review on certiorari. In the absence of any showing As already stated, the indefeasibility of a title does not attach to titles secured by
of lack of basis for the conclusions made by the Court of Appeals, this Court will not fraud and misrepresentation. The registration of a patent under the Torrens System
disturb the factual findings of the appellate court. 9 In this case, petitioner has not merely confirms the registrant’s title. It does not vest title where there is none
shown that the decision of the Court of Appeals is not supported by substantial because registration under this system is not a mode of acquiring ownership. 10
evidence so as to justify this Court in departing from the general rule which regards
the findings of the appellate court as final.
chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph Third. Petitioner assails the trial court’s finding, as affirmed by the appellate court,
that private respondent Michael is the true and lawful possessor of the subject land.
At any rate, we have decided to consider the issues raised insofar as they are He argues that private respondent, being a mere heir and successor-in-interest of
pertinent to the appellate court’s decision in order to put them to rest once and for William Michael and not the person who filed the foreshore lease and the
all. miscellaneous sales applications, has no right to the land in dispute.

In his free patent application, petitioner declared under oath that the land in Suffice it to state that it was clearly proven that William Michael had already been in
question was an agricultural land not claimed or occupied by any other person; that possession of the land under a provisional permit to occupy the same in 1963.
he had continuously possessed and occupied it; and that he had introduced Petitioner applied for a free patent only in 1976, thirteen (13) years later. In
improvements thereon. These declarations constitute fraud and misrepresentation. addition, William Michael had filed a sales application covering the land in 1968, i.e.,
The government has proven that, contrary to these allegations, as early as eight (8) years before petitioner filed his free patent application. The trial court and
September 2, 1963, i.e., thirteen (13) years before the alleged entry of petitioner the Court of Appeals, therefore, correctly held William Michael and private
on the land, private respondent’s predecessor-in-interest, William Michael, had respondent Ricardo Michael to be the true and rightful possessors of the land in
already filed a foreshore lease application over the same; that on February 25, question. The fact that private respondent Michael is merely the successor of the
1968, William Michael filed a miscellaneous sales application over the land; that original foreshore lease and sales applicant, William Michael, does not make him any
since 1963 up to the present, private respondent has been continuously in less entitled to the possession of the land. Sec. 105 of the Public Land Act provides
possession of the land on which he has been operating a drydocking service under that, in case of his death, the original applicant shall be succeeded in his rights and
the style of Michael Slipways, Inc.; and that private respondent Ricardo Michael had obligations by his legal heirs with respect to the land applied for or leased. 11
made improvements thereon consisting of the reclamation of a portion of the land,
the construction of the fence thereon, and the construction of a bridge over a WHEREFORE, the decision of the Court of Appeals is AFFIRMED.
portion under water. In addition, it has been duly established that the land in
question is foreshore land, not agricultural. The fact that the land is being used by SO ORDERED. chanrobles law library

private respondent Ricardo Michael in his drydocking operations is evidence that the
land is foreshore land. Moreover, there would have been no need to reclaim a
portion of the land if it had not been under seawater.

Petitioner is guilty of making false statements in his application for a free patent
thus justifying the annulment of his title. Sec. 91 of C.A. No. 141 (Public Land Act)
provides:chanrob1es virtual 1aw library

The statements made in the application shall be considered as essential conditions

 SUPREME COURT OF THE PHILIPPINES The spouses Rodriguez allegedly caused the cancellation of TCT No. T-2857 despite
the fact that the owner’s duplicate copy thereof was in the possession of Pablo
Goyma Lim, Jr. On February 10, 1975, TCT No. T-128605 was issued in the name of
FIRST DIVISION Frisco5 Gudani, estranged husband of Dominga Goyma. This title was cancelled by
TCT No. T-128606 issued in the name of Eduardo Victa also on February 10, 1975.
The latter certificate of title, in turn, was cancelled by TCT No. T-128607 issued in the
G.R. No. 135817             November 30, 2006 name of the spouses Rodriguez also on February 10, 1975.

REYNALDO RODRIGUEZ and NANCY A. RODRIGUEZ, Petitioners, Since May 1975, the spouses Rodriguez allegedly tried to enter and occupy the
vs. subject lots by force and intimidation. Pablo Goyma Lim, Jr. thus prayed in his
CONCORDIA ONG LIM, EURESTES LIM AND ELMER LIM, Respondents. complaint that the spouses Rodriguez be permanently enjoined from entering and
occupying the subject lots; TCT No. 128607 be declared null and void and TCT No. T-
DECISION 2857 in the name of Dominga Goyma be reinstated; and the spouses Rodriguez be
ordered to pay Pablo Goyma Lim, Jr. damages, attorney’s fees and the costs of suit.
CALLEJO, SR., J.:
In their Answer, the spouses Rodriguez denied the material allegations in the
complaint. They alleged that Dominga Goyma was not the mother of Pablo Goyma
Before the Court is a petition for review on certiorari filed by the spouses Reynaldo
Lim, Jr. They averred that the subject lots were the conjugal property of Frisco Gudani
and Nancy Rodriguez seeking the reversal of the Decision1 dated July 18, 1995 of the
and his wife Dominga Goyma. When the latter died, Frisco Gudani was her sole
Court of Appeals in CA-G.R. CV No. 27440. The assailed decision affirmed that of the
surviving heir.
Regional Trial Court (RTC) of Lucena City, Branch 58, declaring, inter alia, Transfer
Certificate Title (TCT) No. T-128607 in the names of petitioners Reynaldo and Nancy
Rodriguez null and void and directing them to vacate the lots subject of litigation. According to the spouses Rodriguez, Frisco Gudani and Dominga Goyma, as
Likewise sought to be reversed is the appellate court’s Resolution dated October 5, husband and wife, jointly exercised acts of ownership and possession over the
1998 denying petitioners’ motion for reconsideration. subject lots. When Dominga Goyma passed away, Frisco Gudani executed an
instrument of extra-judicial settlement of the estate of the deceased. By virtue of the
said document, Dominga Goyma’s share in the subject lots was adjudicated in favor
As culled from the respective decisions of the RTC of Lucena City, Branch 58 (court a
of Frisco Gudani as her sole surviving heir. The extra-judicial settlement allegedly
quo) and the appellate court, the factual and procedural antecedents are as follows:
complied with the requirements of publication under the Rules of Court.

Pablo Goyma Lim, Jr. filed with the court a quo a complaint for cancellation of
Thereafter, Frisco Gudani allegedly sold the subject lots to Eduardo Victa who, in
certificate of title and injunction against the spouses Rodriguez. In his complaint,
turn, sold the same to the spouses Rodriguez. The latter claimed that they were
Pablo Goyma Lim, Jr. alleged that his mother, Dominga Goyma,2 was the owner of
purchasers in good faith and for value. Further, they denied that they had tried to
two parcels of land (subject lots). The first parcel,3 containing an area of 28,051
enter the subject lots by means of force and intimidation. On the contrary, the
square meters, more or less, is situated in the Sitio of Tulay-Buhangin, Barrio Ilayang
spouses Rodriguez claimed that they have been in possession of the subject lots by
Palo, Municipality of Pagbilao, Province of Quezon. The second parcel,4 containing an
themselves and their predecessors-in-interest.
area of 260,590 sq m, more or less, is situated in the Sitio of Tulay-Buhangin, Barrio
of Laguimanoc, Municipality of Atimonan (now Padre Burgos), Province of Quezon.
The subject lots were registered in the name of Dominga Goyma on February 6, 1948 At the pre-trial, the parties stipulated on the following facts:
under TCT No. T-2857.
1. that plaintiff Pablo Goyma [Lim], Jr., the plaintiff in this case, is the same
Dominga Goyma died on July 19, 1971 and was survived by her only son, Pablo person mentioned in the birth certificate as Pablo Go Yma, xerox copy of
Goyma Lim, Jr., a spurious son acknowledged and recognized by her. which was submitted during the previous preliminary hearing, marked as
Exhibit "A";
The complaint also alleged that during her lifetime, Dominga Goyma exclusively
possessed the subject lots and upon her death, Pablo Goyma Lim, Jr. succeeded to 2. that Pablito Goyma Lim mentioned in the Individual Income Tax Returns
all her rights of ownership and possession. However, the spouses Rodriguez, despite of the deceased Dominga Goyma, xerox copies of which were submitted
their knowledge that Pablo Goyma Lim, Jr., was now the owner and possessor of the during the previous preliminary hearing and marked as Exhibits "B", "C" and
subject lots, allegedly unlawfully and fraudulently made it appear that they had "D" and in the Statement of Assets and Liabilities of the deceased Dominga
purchased the subject lots from persons who were not the owners thereof. Goyma marked as Exhibit "E", refers to the plaintiff Pablo Goyma Lim, Jr.;
 3. that according to plaintiff Pablo Goyma Lim, Jr., he is an illegitimate child Also admitted in evidence by the court a quo was the deposition of Frisco Gudani
other than natural of the deceased Dominga Goyma; taken on October 22, 1977. The court a quo summarized the contents of his
deposition as follows:
4. that the deceased Dominga Goyma died on July 19, 1971 and that at the
time of her death, she was then the registered owner of the two parcels of x x x From the deposition, it appears that Prisco M. Gudani, a 77 year-old laborer
land mentioned in paragraph 2 of the complaint covered by Transfer resident of Barrio Binahaan, Pagbilao, Quezon, was married to Dominga Goyma on
Certificate of Title No. T-2857; that under the aforesaid Transfer Certificate March 22, 1922. They lived together for eleven (11) months and they were separated
of Title, said lands are registered in the name of Dominga Goyma, wife of when Prisco Gudani left the conjugal dwelling one night without the knowledge of
Frisco Gudani; Dominga Goyma, never returning to the conjugal dwelling since then. He knows that
Dominga Goyma is now dead. He knows too that Pablo Goyma Lim is the son of the
5. that at the time of the death of Dominga Goyma, plaintiff Pablo Goyma late Dominga Goyma. His statement in his Affidavit, dated June 25, 1976 (Exhibit "C-
Lim, Jr., was then more than thirty-five (35) years of age; Deposition") that Pablo Goyma Lim, Jr. is not the son of Dominga Goyma is not
correct. He said that it was Atty. Alejandro B. Aguilan who prepared said affidavit and
told him to sign it otherwise what property he will receive will be forfeited in favor of
6. that previous to the instant case, there has been no judicial inquiry as to the government. He does not know anything about the two parcels of land subject of
the maternity or filiation of plaintiff Pablo Goyma Lim, Jr. this case. On the affidavit, dated March 15, 1973 (Exhibit "D-Deposition") adjudicating
unto himself the property stated therein, including the two parcels of land subject of
x x x x6 this case, he explained that said affidavit was prepared by Atty. Alejandro B. Aguilan,
who must have known about the properties left by Dominga Goyma and made him
Efforts of the parties to enter into an amicable settlement of the case fell through. understand that he is inheriting the three (3) parcels of land left by Dominga Goyma,
Consequently, trial on the merits ensued. In the meantime, in the course of the trial, the truth being that he had never set foot on these properties and he does not know
Pablo Goyma Lim, Jr. died on September 8, 1988. He was duly substituted by his anything about these properties. When he arrived, the prepared affidavit was read to
surviving spouse, Concordia Ong Lim, and children Eurestes and Elmer Lim. him and he was told to sign. Atty. Aguilan explained to him that if he will not sign the
document, the properties will go to the government and, because he did not want
these properties to go to the government, he signed the affidavit in order to get the
During trial, both parties adduced their respective evidence. Among those presented properties. Had it been explained to him that these properties will not be forfeited in
to support the allegations of Pablo Goyma Lim, Jr. were the following: Deed of favor of the government, he will not sign the affidavit. The first time Atty. Aguilan told
Absolute Sale dated December 13, 1945 (Exhibit "I") covering four parcels of land, him about the properties of Dominga Goyma was about two years after her death.
including the subject lots, purchased by Dominga Goyma from Marciano and Marina Atty. Aguilan went to him in his residence in Pagbilao, Quezon and told him that if he
Rodriguez; Marital Consent dated March 19, 1932 (Exhibit "K") executed by Frisco will not agree to get the property of Dominga Goyma, those properties will go to the
Gudani and Dominga Goyma; TCT No. T-2857 (Exhibit "A") covering the subject lots government. Atty. Aguilan told him that because he had not contributed anything in
issued in the name of Dominga Goyma; Pablo Goyma Lim, Jr.’s Certificate of Birth the acquisition of said properties, his share is one-fourth. On March 15, 1973, Atty.
(Exhibit "B") indicating that his mother was Dominga Goyma; Statement of Assets, Aguilan made him sign a prepared petition for the issuance of a second owner’s
Income and Liabilities for 1958 (Exhibit "C") of Dominga Goyma indicating Pablo duplicate copy of Transfer Certificate of Title No. T-2857 (Exhibit "E-Deposition"). On
Goyma Lim, Jr. as her son; Income Tax Returns for calendar years 1953 up to 1955 the same date, he was also made to sign an "Affidavit of Loss" prepared by Atty.
(Exhibit "D" to "F") of Dominga Goyma, where she invariably claimed personal Aguilan (Exhibit "E-1, Deposition"). He had not at any time been in possession of the
exemption as head of the family and stated therein that she was "separated" from her owner’s copy of Transfer Certificate of Title No. T-2857. He signed both the foregoing
husband and claimed an exemption for her son Pablo Goyma Lim, Jr.; and Real documents on the explanation of Atty. Aguilan that he will use them in order to look
Property Tax Receipts from 1955, 1957 up to 1975 (Exhibits "H," "H-1" up to "H-22") for the title. He does not know Eduardo Victa and had never met him personally.
covering the subject property paid by Pablito Goyma Lim, Jr. When shown the "DEED OF CONDITIONAL SALE OF REAL PROPERTY," dated
September 10, 1974 (Exhibit "F-Deposition"), he admitted he sold the property. Said
For their part, the spouses Rodriguez presented the following documentary evidence: document was prepared by Atty. Aguilan who told him that the ₱20,000.00 constitute
Deed of Absolute Sale dated February 3, 1975 (Exhibit "I") covering the subject lots his one-fourth share of the properties of Dominga Goyma, but Atty. Aguilan told him to
showing that the spouses Rodriguez acquired them from Eduardo Victa; TCT No. T- receive only ₱10,000.00 because the ₱10,000.00 will be used to cover the expenses
128607 (Exhibit "II") covering the subject lots issued in the name of the spouses of litigation. Of the ₱10,000.00 left, ₱5,000.00 was given to him and the other
Rodriguez on February 10, 1975; TCT No. T-128606 (Exhibit "V") covering the ₱5,000.00 was taken by Atty. Aguilan, as they are share and share alike in the
subject lots issued in the name of Eduardo Victa on February 10, 1975; TCT No. T- ₱10,000.00. He explained that when he signed the deed of sale, he was made to
128605 (Exhibit "IV") covering the subject lots issued in the name of Frisco Gudani on understand that he was selling only the one-fourth share of the property that he owns
February 10, 1975; and TCT No. T-2857 (Exhibit "III") covering the subject lots in the and the price for the one-fourth share is ₱20,000.00. On the document entitled
name of Dominga Goyma. "DEED OF ABSOLUTE SALE OF REAL PROPERTY," dated January 17, 1975
(Exhibit "G-Deposition") he claims not to have received the ₱60,000.00. Atty. Aguilan,
who prepared the document, told him to sign it and he (Atty. Aguilan) will deliver the To buy or sell, hire, lease or mortgage, lands or buildings, and other forms of real
money later. Atty. Aguilan did not mention the ₱60,000.00, but only ₱20,000.00. It property, upon such terms and conditions, and under such covenants as my wife may
was only Atty. Aguilan who was present when he signed the document. He met deem proper;
defendant Reynaldo Rodriguez once when he went to the office of Atty. Magadia and
Atty. Uy at the Bañas Building, Rizal Avenue, Manila, in the company of Atty. Aguilan. To purchase and sell, hire or pledge, goods, wares, merchandise, chattels, choses in
He was invited to a restaurant and told by Reynaldo Rodriguez that he purchased the action, and other forms of personal property that are or may come into her
properties for a very low price and he would give Gudani an additional amount of possession as owner or otherwise;
₱1,500.00 upon the termination of the case that may be filed by Pablo Goyma Lim,
that is why he was holding the ₱10,000.00 to be spent for the expected litigation.
After eating, Reynaldo Rodriguez gave him ₱50.00 for him to buy betel leaves. He To borrow or lend moneys, with or without security, upon such terms and conditions
said that Atty. Alejandro B. Aguilan is a lawyer in Pagbilao, Quezon, who persuaded as she may approve; and to transact any and all business, operations and affairs with
him to agree to recover his share from the properties of Domingo Goyma. x x x7 any institution as may be deemed proper and convenient by her;

Based on the evidence presented by both parties, the court a quo rendered judgment To make, sign, execute and deliver contracts, documents, agreements, deeds and
in favor of Pablo Goyma Lim, Jr. and against the spouses Rodriguez. In support of its other writings of whatsoever nature, kind and description, with any and all persons,
conclusions, the court a quo made the following factual findings: concerns, and entities, upon terms and conditions acceptable to her;

Dominga Goyma married Frisco Gudani on March 22, 1922. However, after living To prosecute and defend any and all suits, actions and other proceedings in the
together for only eleven (11) months, Frisco Gudani left the conjugal abode and never courts, tribunals, departments and offices of the Government of the Philippine Islands,
returned. They never had any children. On March 19, 1932, Frisco Gudani and and to terminate compromise, settle and adjust the same.
Dominga Goyma executed a public instrument denominated as "MARITAL
CONSENT,"8 the contents of which are quoted below in full: I do hereby renounce any and all rights, title, interest and participation, rights of
actions, if any I have, in connection with the properties, real or personal, that my wife
MARITAL CONSENT might have acquired by purchase, exchange, or otherwise, from any person from the
time we were separated, in 1924, and to all that she may acquire in the future.
KNOW ALL MEN BY THESE PRESENTS:
In consideration of all that is provided above in this marital consent, and in
consideration of the renunciation made by my husband, I, Dominga Go Imco Ima,
That I, Prisco Gudani, Filipino, of legal age, married and a resident of Pagbilao, hereby agree also to renounce any and all rights, title, interest and participation, and
Tayabas, declares: also any right of action, that I may have in connection with any property, real or
personal, acquired or which may be acquired by my husband since we were
That I am the husband of Dominga Go Imco Ima, Filipina, of legal age, and also a separated in 1924, and that any debts or obligations incurred or which may be
resident of Pagbilao, Tayabas, for whom I make this marital consent. incurred by me since we were separated in 1924, and in the future pursuant to this
marital consent, are my sole debts and obligations in which my husband can have no
That since the year 1924, for certain reasons which are delicate to state or mention responsibility.
herein, my wife and I have been living separately.
IN WITNESS WHEREOF, we together have hereunto signed our names below as
It was agreed by and between us from the time we separated that each could then signs of our conformity with the things mentioned above, at Pagbilao, Tayabas, P.I.,
live the life of a single person as if we did not take each other as husband and wife, on this 19th day of March, 1932.
and that each could then make his or her own living without the intervention and
responsibility of the other. (SGD) PRISCO M. GUDANI
PRISCO GUDANI
Under this state of life that we have, living separately, and upon request that I grant Husband
her a marital consent, by these presents I do hereby give and grant unto my wife,
Dominga Go Imco Ima, full power and authority and consent to do and perform any (SGD) DOMINGA GO YMCO YMA
and every act and thing whatsoever requisite, necessary or proper to be done in DOMINGA GO IMCO IMA
whatever she may undertake to do in which under the law in force and in these Island Wife
my presence and personal intervention is necessary, as fully to all intents and
purposes as I might or could do if present and intervening in person, and specially the SIGNED IN THE PRESENCE OF:
following acts:
(SGD) SEVERINO F. MARTINEZ The owner’s duplicate copy of TCT No. T-2857 was in Dominga Goyma’s custody and
during her lifetime, she took possession of the subject lots and instituted therein as
(SGD) Illegible tenants Dominador Torres, Loreto Estopace and Simeon Estopace. Before she
UNITED STATES OF AMERICA passed away on July 19, 1971, Dominga Goyma gave TCT No. T-2857 to her son,
Pablo Goyma Lim, Jr., who immediately took possession of the subject lots.
PHILIPPINE ISLANDS
Two (2) years after Dominga Goyma’s death, Atty. Alejandro D. Aguilan went to see
Frisco Gudani in Pagbilao, Quezon, and informed the latter about the properties,
Municipality of Pagbilao) including the subject lots, left by the deceased. Atty. Aguilan falsely made Frisco
Province of Tayabas ) S.S. Gudani to believe that if he would not acquire the properties for himself, the same
would be forfeited in favor of the government. Frisco Gudani was then persuaded by
Before me, a Notary Public in and for the Province of Tayabas, Philippine Islands, Atty. Aguilan to affix his signature on the following documents: (a) an Affidavit dated
personally appeared Prisco Gudani, exhibiting to me his cedula personal No. G- March 15, 1973 adjudicating to himself the properties mentioned therein, including the
4219255 issued at Pagbilao, Tayabas, and dated December 15, 1931 AND Dominga subject lots; (b) a Petition dated March 15, 1973 filed with the Court of First Instance
Go Ymco Ima, without a personal cedula by reason of her sex, personally known to of Quezon for the issuance of a second owner’s duplicate copy of TCT No. T-2857;
me and known to me to be the same persons who executed the foregoing instrument, (c) an Affidavit of Loss dated March 15, 1973 for the loss of the owner’s duplicate
and they acknowledge to me that they executed the same freely and voluntarily for copy of TCT No. T-2857; and (d) an Affidavit dated June 27, 1976 stating that Pablo
the uses and purposes therein stated. Goyma Lim, Jr. was not the son of Dominga Goyma.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal at After the subject lots were adjudicated in favor of Frisco Gudani and the second
Pagbilao, Tayabas, on this 19th day of March 1932. owner’s duplicate copy of TCT No. T-2857 was obtained, Atty. Aguilan likewise made
the former sign the Deed of Conditional Sale of Property dated September 10, 1974
(SGD) MARIANO P. DULDULAO covering the subject lots in favor of Eduardo Victa. The two parties to the instrument
never met each other and it was only Atty. Aguilan who was present when Frisco
Gudani signed the same. The notary public before whom they supposedly
NOTARY PUBLIC acknowledged the same was not present.

My Commission will expire on For the said purported sale, Frisco Gudani received ₱5,000.00 only because,
December 31, 1933 according to Atty. Aguilan, he did not contribute anything to the acquisition of the
Doc. No. 15 subject lots. Thereafter, Frisco Gudani was made to sign by Atty. Aguilan a Deed of
Book No. 11 Absolute Sale dated January 17, 1975 transferring the subject lots to Eduardo Victa.
Page No. 5
Series of 1932.
For a time, the subject lots continued to be covered by TCT No. T-2857 in the name
of Dominga Goyma. On February 3, 1975, as evidenced by the Deed of Absolute
After Frisco Gudani had left the conjugal abode, Dominga Goyma and Pablo Lim Sale (Exhibit "I"), Eduardo Victa sold the subject lots to the spouses Rodriguez. Aside
cohabited with each other as common law husband and wife. They had a son, Pablo from the said instrument, the following documents were given to the spouses
Goyma Lim, Jr. who was born on March 28, 1935. Rodriguez: (a) the second duplicate owner’s copy of TCT No. T-2857; (b) Affidavit
dated March 15, 1973 of Frisco Gudani adjudicating to himself the properties of
On December 13, 1945, as evidenced by a Deed of Absolute Sale (Exhibit "I"), Dominga Goyma, including the subject lots; and (c) Deed of Absolute Sale of Real
Dominga Goyma purchased from the spouses Marciano and Marina Rodriguez four Property dated January 17, 1975 executed by Frisco Gudani in favor of Eduardo
(4) parcels of land, including the subject lots. As a result of the said sale, the Victa.
certificate of title (TCT No. 11473) covering the said lots were canceled and, in lieu,
thereof TCT No. T-2857 was issued in favor of Dominga Goyma, "wife of Frisco All these documents were presented by a certain Atty. Magadia to the Register of
Gudani," by the Register of Deeds of the Province of Quezon. Deeds of the Province of Quezon on February 10, 1975. On the basis of these
documents, TCT No. T-2857 was canceled and, in lieu thereof, TCT No. T-128605
The subject lots were purchased by Dominga Goyma from her personal funds when was issued in the name of Frisco Gudani on February 10, 1975. Thereafter, TCT No.
she and Frisco Gudani were already separated and after they had executed the T-128605 was cancelled and, in lieu thereof, TCT No. T-128606 was issued by the
instrument denominated as Marital Consent dated March 19, 1932. He did not same Register of Deeds in the name of Eduardo Victa also on February 10, 1975.
contribute anything in the purchase of the subject lots nor did he know about their Finally, TCT No. T-128606 was canceled and, in lieu thereof, TCT No. T-128607 was
existence.
issued by the same Register of Deeds in the name of the spouses Rodriguez also on b) Declaring Transfer Certificate of Title No. T-128607 in the name of
February 10, 1975. defendants as null and void and ordering the reinstatement of Transfer
Certificate of Title No. T-2857 in the name of "DOMINGA GOYMA, of age,
Based on its factual findings, the court a quo concluded that the evidence showed the wife of Frisco Gudani," plaintiffs’ predecessor-in-interest;
that the transactions involving the subject lots, particularly the transfers thereof from
the deceased Dominga Goyma to Frisco Gudani and from him to Eduardo Victa were c) Ordering the defendants to immediately vacate the premises of the
fraudulent and made through the machinations of Atty. Aguilan. The latter, according properties subject of this litigation;
to the court a quo, "took advantage of his legal training in making Frisco Gudani, a
simple- minded laborer, an unsuspecting and naïve tool in a grand scheme to d) Ordering the defendants to pay to the plaintiffs the amount of ₱24,000.00
dispossess plaintiff Pablo Goyma Lim, Jr. of the property rightfully his by inheritance as attorney’s fees; and
from his mother, the deceased Dominga Goyma."9
e) Ordering the defendants to pay the costs.
Given the fraudulent character of the transactions, the court a quo held that the
spouses Rodriguez could not avail of the protective mantle of the law protecting
purchasers for value in good faith. The spouses Rodriguez were declared to be SO ORDERED.12
purchasers in bad faith because they had prior knowledge of the claim of Pablo
Goyma Lim, Jr. over the subject lots and even anticipated his filing of the case against Aggrieved, the spouses Rodriguez filed an appeal with the Court of Appeals which
them. rendered the assailed Decision dated July 18, 1995 affirming in toto the decision of
the court a quo. The appellate court substantially affirmed the factual findings and
The court a quo also stated that even granting arguendo that fraud attendant to the conclusion of the court a quo. It stressed that Pablo Goyma Lim, Jr. was the son of
transactions were not sufficient to vitiate consent as to nullify the transactions, still the the decedent Dominga Goyma as evidenced by a voluntary acknowledgment made in
transactions entered into by Frisco Gudani relative to the subject lots were void for his record of birth (Exhibit "C") and in the other documentary evidence presented
want of authority to sell them. during trial. His right to succession was transmitted when Dominga Goyma passed
away on July 19, 1971 following Article 77713 of the Civil Code. On the other hand,
Frisco Gudani could not dispose of the subject lots before partition of the estate of
The court a quo explained that since Dominga Goyma died on July 19, 1971 without a Dominga Goyma and without authority given by Pablo Goyma Lim, Jr.
will, legal or intestate succession takes place following paragraph (1) of Article
96010 of the Civil Code. Under the law on intestacy, particularly Article 99811 thereof,
the widower or widow who survives with illegitimate children shall be entitled to one- On the matter of whether the spouses Rodriguez purchased the subject lots in good
half of the inheritance and the illegitimate children to the other half. faith and for value, the appellate court ruled in the negative, as record was replete
with evidence disproving their claim of good faith. Rejecting the argument proffered
by the spouses Rodriguez, the appellate court held that Frisco Gudani and Eduardo
However, in Frisco Gudani’s case, he did not contribute any amount in the purchase Victa were not indispensable parties because they were not in possession of the
of the subject lots. Moreover, these were acquired by Dominga Goyma after her de subject lots and their interests therein were inferior and irrelevant to, and could not
facto separation from Frisco Gudani. The estate left by the deceased, including the affect, the right of Pablo Goyma Lim, Jr. to a designated portion of the subject lots by
subject lots, should have first been partitioned in an appropriate estate proceeding to inheritance from his mother Dominga Goyma.
determine those entitled thereto. Without the said proceeding or prior thereto, Frisco
Gudani could not lay valid claim, if he had any, over the subject lots as sole heir and
he could not have been the owner thereof who could legally transfer ownership by The decretal portion of the appellate court’s decision reads:
means of sale.
PREMISES CONSIDERED, the decision appealed from is hereby AFFIRMED.
The decretal portion of the Decision dated May 17, 1990 of the court a quo reads:
SO ORDERED.14
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
substituted plaintiffs, CONCORDIA ONG LIM, EURESTES LIM and ELMER LIM and The spouses Rodriguez filed a motion for reconsideration which the appellate court
against the defendants, the spouses REYNALDO RODRIGUEZ and NANCY A. denied in the assailed Resolution dated October 5, 1998.
RODRIGUEZ, as follows:
Forthwith, the spouses Rodriguez (petitioners) filed the present petition for review on
a) Declaring as null and void all transactions relative to the properties in certiorari and in support thereof allege the following:
question submitted to the Register of Deeds for the Province of Quezon on
February 10, 1975;
 I open and continuous possession of the status of a legitimate child; or (2) any other
means allowed by the Rules of Court and special laws. The due recognition of an
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT illegitimate child in a record of birth, a will, a statement before a court of record, or in,
RESPONDENTS’ PREDECESSOR-IN-INTEREST, PABLO GO IMA LIM, WAS A CO- any authentic writing is, in itself, a consummated act of acknowledgment of the child,
OWNER OF THE SUBJECT PROPERTIES AND ENTITLED TO ONE-HALF OF THE and no further action is required. In fact, any authentic writing is treated not just a
SUBJECT PARCELS OF LAND DESPITE THE FACT THAT SAID PABLO GO IMA ground for compulsory recognition; it is in itself a voluntary recognition that does not
LIM WAS NOT RECOGNIZED BY HER [SIC] PARENTS AS AN ILLEGITIMATE require a separate action for judicial approval.17
CHILD AND THE ALLEGED DOCUMENTS PROVING HIS VOLUNTARY
ACKNOWLEDGMENT DO NOT SUFFICE TO PROVE HIS FILIATION TO HIS Various documentary evidence were proffered by Pablo Goyma Lim, Jr. to prove that
PARENTS. he was the illegitimate and acknowledged son of Dominga Goyma. Among them were
his certificate of birth (Exhibit "B") indicating that his mother was Dominga Goyma;
II statement of assets, income and liabilities for 1958 (Exhibit "C") of Dominga Goyma
indicating him as her son and; income tax returns for calendar years 1953 up to 1955
(Exhibits "D" to "F")) of Dominga Goyma where she invariably claimed personal
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT exemption as head of the family and stated therein that she was "separated" from her
THE VENDEE OF THE SUBJECT PROPERTIES, PRISCO GUDANI, COULD NOT husband and claimed an exemption for her son, Pablo Goyma Lim, Jr. These pieces
VALIDLY DISPOSE OF THE SUBJECT PROPERTIES BEFORE PARTITION AND of documentary evidence, whose authenticity were not refuted by petitioners, were
WITHOUT THE LEGAL AUTHORITY GIVEN BY THE ILLEGITIMATE CHILD, PABLO properly considered by the court a quo and the appellate court to establish that Pablo
GO IMA LIM. Goyma Lim, Jr. was acknowledged by Dominga Goyma to be her illegitimate son.

III The court a quo, as affirmed by the appellate court, likewise correctly nullified TCT
No. T-128607 in the name of petitioners. In fact, all the transactions relative to TCT
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT HOLDING No. T-2857, i.e., affidavit of Frisco Gudani adjudicating to himself the subject lots and
THAT PETITIONERS WERE PURCHASERS OF THE SUBJECT PROPERTIES IN their purported sale by him to Eduardo Victa and by the latter to petitioners, were
GOOD FAITH AND FOR VALUE. declared null and void by the court a quo on the ground that, as established by
evidence, these were all made through the fraudulent machinations of Atty. Aguilan.
IV
It should be recalled that Atty. Aguilan made Frisco Gudani affix his signature on,
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT among other documents, a Petition dated March 15, 1973 filed with the Court of First
THE VENDEES OF THE SUBJECT PROPERTIES, PRISCO GUDANI AND Instance of the Province of Quezon for the issuance of a second owner’s duplicate
EDUARDO VICTA, NOT BEING INDISPENSABLE PARTIES, THEY WERE copy of TCT No. T-2857 and an Affidavit of Loss dated March 15, 1973 for the loss of
PROPERLY NOT IMPLEADED AS DEFENDANTS IN THE COMPLAINT. 15 the owner’s duplicate copy of TCT No. T-2857. Obviously, these documents
contained falsehoods because TCT No. T-2857 was never lost and, in fact, had been
in the possession of Dominga Goyma during her lifetime and, when she passed away
The petition is bereft of merit. on July 19, 1971, in the possession of Pablo Goyma Lim, Jr.

Petitioners assail the filiation of Pablo Goyma Lim, Jr. stating that he was not duly It has been consistently ruled that "when the owner’s duplicate certificate of title has
acknowledged or recognized by either of his parents. This contention is erroneous. It not been lost, but is in fact in the possession of another person, then the reconstituted
is axiomatic that factual findings of the trial court, especially when affirmed by the certificate is void, because the court that rendered the decision had no jurisdiction.
appellate court, are conclusive and binding on the Court.16 In this case, the court a Reconstitution can validly be made only in case of loss of the original certificate."18 In
quo and the appellate court are in agreement that, based on the evidence presented, such a case, "the decision authorizing the issuance of a new owner’s duplicate
Pablo Goyma Lim, Jr. was the illegitimate and acknowledged son of Dominga Goyma. certificate of title may be attacked any time."19

The Court has laid down the manner of establishing the filiation of children, whether Applying this rule, it is apparent that the second owner’s duplicate copy of TCT No. T-
legitimate or illegitimate, as follows: 2857 issued upon the petition of Frisco Gudani was void. Further, the certificates of
title (TCT No. T-128605 in the name of Frisco Gudani, TCT No. T-128606 in the name
The filiation of illegitimate children, like legitimate children, is established by (1) the of Eduardo Victa and TCT No. T-128607 in the names of petitioners) that were
record of birth appearing in the civil register or a final judgment; or (2) an admission of subsequently issued covering the subject lots may be nullified because they all
legitimate filiation in a public document or a private handwritten instrument and signed emanated from a void document, i.e., the second owner’s duplicate copy of TCT No.
by the parent concerned. In the absence thereof, filiation shall be proved by (1) the T-2857 that was procured by Frisco Gudani, or more particularly by Atty. Aguilan, in
behalf of Frisco Gudani, through fraud. Transfer certificates of title may be annulled if An indispensable party is one whose interest will be affected by the court’s action in
issued based on void documents.20 the litigation, and without whom no final determination of the case can be had. The
party’s interest in the subject matter of the suit and in the relief sought are so
Petitioners cannot raise the defense of indefeasibility of a Torrens title with respect to inextricably intertwined with the other parties’ that his legal presence as a party to the
TCT No. T-168607 because "the principle of indefeasibility of a Torrens title does not proceeding is an absolute necessity. In his absence there cannot be a resolution of
apply where fraud attended the issuance of the title. The Torrens title does not furnish the dispute of the parties before the court which is effective, complete, or equitable.
a shield for fraud."21 They cannot deny any knowledge of the fraud that attended the
transactions involving the subject lots, including their acquisition thereof. Stated Conversely, a party is not indispensable to the suit if his interest in the controversy or
differently, petitioners cannot claim that they were purchasers in good faith and for subject matter is distinct and divisible from the interest of the other parties and will not
value because the transactions involving the subject lots were so replete with badges necessarily be prejudiced by a judgment which does complete justice to the parties in
of fraud and irregularities that should have put them on guard about the defects in the court. He is not indispensable if his presence would merely permit complete relief
respective titles of Frisco Gudani and Eduardo Victa. between him and those already parties to the action or will simply avoid multiple
litigation.24
To recall, TCT No. T-2857 was cancelled and, in lieu thereof, TCT No. T-128605 was
issued in the name of Frisco Gudani, on February 10, 1975. The latter was thereafter A final determination could be had in the complaint for cancellation of TCT No. T-
cancelled by TCT No. T-128606 issued in the name of Eduardo Victa also on 128607 and injunction even without Eduardo Victa and Frisco Gudani. Only the
February 10, 1975. The latter certificate of title, in turn, was cancelled by TCT No. T- petitioners are indispensable parties therein and their insistence that Eduardo Victa
128607 issued in the name of the spouses Rodriguez also on February 10, 1975. and Frisco Gudani should likewise be impleaded deserves scant consideration.
These highly irregular transfers of ownership, i.e., cancellation and/or issuance of
certificates of title, involving the subject lots all transpiring on the same date Having established that petitioners’ TCT No. T-128607 emanated from a void
eloquently betray the fraud that attended the transactions, including petitioners’ document, i.e. the second owner’s duplicate copy of TCT No. T-2857 procured by
acquisition thereof. It is certainly unlikely that petitioners had no knowledge of these Frisco Gudani and/or Atty. Aguilan through fraud and when Dominga’s owner’s
fraudulent transactions. duplicate certificate of title had not been lost, and that petitioners were not purchasers
in good faith and for value, the Court concludes that the nullification of petitioners’
Petitioners’ claim of being purchasers in good faith and for value was debunked by TCT No. T-128607 is warranted under the circumstances. The appellate court
the court a quo, thus: therefore committed no reversible error in affirming the decision of the court a quo
which, among others, declared as null and void TCT No. T-128607 in the name of
Defendant spouses, under the premises, cannot avail of the protective mantle of law petitioners and, instead, reinstated TCT No. T-2857 in the name of Dominga Goyma,
protecting a purchaser for value and in good faith, as they are not purchasers for mother of Pablo Goyma Lim, Jr. (now substituted by his spouse and children)
value and neither have they acted in good faith. Defendants cannot successfully put respondents Concordia Ong Lim, Eurestes and Elmer Lim.
up a picture of innocence as to the fraud that characterized the transactions relative
to their ultimate acquisition of the properties subject of this litigation. Defendant The Court finds it unnecessary, at this point, to determine the successional rights, if
Reynaldo Rodriguez was well aware that on his acquisition of the properties, Pablo any, of Frisco Gudani to the properties left by Dominga Goyma. Such matter is better
Goyma Lim, Jr. will file suit against him that is why he retained ₱10,000.00 of the threshed out in the proper special proceedings for the settlement of the intestate
purchase price, which amount is intended to be used in the expected litigation. In fact, estate of Dominga Goyma. As held by this Court, matters which involve settlement
defendant Reynaldo Rodriguez admitted to Frisco Gudani that he purchased the and distribution of the estate of the decedent fall within the exclusive province of the
properties at a very low price because of which he promised to give Frisco Gudani an probate court in the exercise of its limited jurisdiction.25
additional amount of ₱1,500.00 upon the termination of the case.22
WHEREFORE, the petition is DENIED. The Decision dated July 18, 1995 and
On this point, the appellate court succinctly stated that "as to the contention that Resolution dated October 5, 1998 of the Court of Appeals in CA-G.R. CV No. 27440
appellants (referring to petitioners) purchased the properties in good faith and for are AFFIRMED in toto.
value, the record is replete with evidence negating such contention and the issue had
been thoroughly discussed in the appealed decision which would render any further
SO ORDERED.
discussion a superfluity."23

Contrary to the petitioners’ contention, Eduardo Victa and Frisco Gudani are not
indispensable parties.  The complaint filed by Pablo Goyma Lim, Jr. was for the
1âwphi1

cancellation of TCT No. T-128607 in the name of petitioners and to enjoin them from
entering the subject lots. The following discussion on who is or is not an
indispensable party is apropos:
 Republic of the Philippines docketed as Civil Case No. M-7690.5 They also filed a notice of adverse claim on
SUPREME COURT November 5, 1979.
Manila
On December 4, 1984, during the pendency of Civil Case No. M-7690, Delos Reyes
FIRST DIVISION sold the subject property to respondent siblings Anita, Angelina, Angelito and Amy
(Burgos siblings). A new title, TCT No. 135860, was then issued in their names.
G.R. No. 143573               January 30, 2009
On December 12, 1985, the Burgos siblings, in turn, sold the same property to their
ADORACION ROSALES RUFLOE, ALFREDO RUFLOE and RODRIGO aunt, Leonarda Burgos. However, the sale in favor of Leonarda was not registered.
RUFLOE, Petitioners, Thus, no title was issued in her name. The subject property remained in the name of
vs. the Burgos siblings who also continued paying the real estate taxes thereon.
LEONARDA BURGOS, ANITA BURGOS, ANGELITO BURGOS, AMY BURGOS,
ELVIRA DELOS REYES and JULIAN C. TUBIG, Respondents. On February 6, 1989, the RTC of Pasay City, Branch 108,6 rendered its decision in
Civil Case No. M-7690 declaring that the Deed of Sale in favor of Delos Reyes was
DECISION falsified as the signatures of the spouses Rufloe had been forged. The trial court ruled
that Delos Reyes did not acquire ownership over the subject property. Said decision
had become final and executory.
LEONARDO-DE CASTRO, J.:
Such was the state of things when, on February 8, 1990, in the RTC of Muntinlupa,
Under consideration is this petition for review under Rule 45 of the Rules of Court the Rufloes filed their complaint for Declaration of Nullity of Contract and Cancellation
seeking the reversal and setting aside of the Decision1 dated January 17, 2000 of the of Transfer Certificate of Titles against respondents Leonarda and the Burgos
Court of Appeals (CA) in CA-G.R. CV. No. 49939, and its Resolution2 dated June 9, siblings, and Delos Reyes. In their complaint, docketed as Civil Case No. 90-359, the
2000, denying petitioners’ motion for reconsideration. Rufloes basically alleged that inasmuch as the Deed of Sale in favor of Delos Reyes
was falsified, no valid title was ever conveyed to the Burgos siblings.7 The Burgos
The assailed decision reversed and set aside the February 10, 1995 decision3 of the siblings executed a simulated deed of sale in favor of Leonarda knowing fully well that
Regional Trial Court (RTC) at Muntinlupa, Metro Manila, Branch 276,4 in its Civil Case their title was a nullity.
No. 90-359, an action for Declaration of Nullity of Contract and Cancellation of
Transfer Certificate of Titles and Damages, commenced by the petitioners against In their common "Answer," respondents maintained that they bought the property in
herein respondents. good faith after they were shown a genuine copy of the title of the disputed property
by Delos Reyes. They also insisted that they were innocent purchasers in good faith
The factual antecedents are as follows: and for value.8

Petitioner Adoracion Rufloe is the wife of Angel Rufloe, now deceased, while co- On February 10, 1995, the trial court rendered a decision declaring that Leonarda and
petitioners Alfredo and Rodrigo are their children. During the marriage of Adoracion the Burgos siblings were not innocent purchasers for value and did not have a better
and Angel, they acquired a 371-square meter parcel of land located at Barangay right to the property in question than the true and legal owners, the Rufloes. The trial
Bagbagan, Muntinlupa, and covered by Transfer Certificate of Title (TCT) No. 406851 court also held that the subsequent conveyance of the disputed property to Leonarda
which is the subject of the present controversy. by the Burgos siblings was simulated to make it appear that Leonarda was a buyer in
good faith. The trial court then directed the Register of Deeds of Makati, Rizal to
Sometime in 1978, respondent Elvira Delos Reyes forged the signatures of Adoracion reinstate the title of the spouses Rufloe, and to cancel all other titles subsequent to
and Angel in a Deed of Sale dated September 8, 1978 to make it appear that the the said title particularly TCT No. S-74933 issued to Delos Reyes and TCT No.
disputed property was sold to her by the spouses Rufloe. On the basis of the said 135860 issued to the Burgos siblings.9
deed of sale, Delos Reyes succeeded in obtaining a title in her name, TCT No. S-
74933. Respondents interposed an appeal to the CA, whereat the appellate recourse was
docketed as CA-G.R. CV. No. 49939.
Thus, in November 1979, the Rufloes filed a complaint for damages against Delos
Reyes with the RTC of Pasay City alleging that the Deed of Sale was falsified as the As stated at the threshold hereof, the CA, in its decision dated January 17, 2000,
signatures appearing thereon were forged because Angel Rufloe died in 1974, which reversed and set aside that of the trial court, declaring in the process that
was four (4) years before the alleged sale in favor of Delos Reyes. The complaint was respondents were purchasers in good faith and for value. In so ruling, the CA
explained:
Measured by this yardstick, defendants-appellants [herein respondents] are OR OTHER HANDICAP, THE COURT MUST BE VIGILANT FOR HIS
purchasers in good faith and for value. Amado Burgos bought the subject property PROTECTION."11
(for his children Anita, Angelina, Angelito and Amy) free from any lien or
encumbrance or any notice of adverse claim annotated thereto. He was presented In a gist, the issues to be resolved are (1) whether the sale of the subject property by
with a clean title already in the name of the seller. If a person purchases a piece of Delos Reyes to the Burgos siblings and the subsequent sale by the siblings to
land on the assurance that the seller’s title thereto is valid, he should not run the risk Leonarda were valid and binding; and (2) whether respondents were innocent
of being told later that his acquisition was ineffectual after all. If we were to void a sale purchasers in good faith and for value despite the forged deed of sale of their
of property covered by a clean and unencumbered torrens title, public confidence in transferor Delos Reyes.
the Torrens System would be eroded and transactions would have to be attended by
complicated and inconclusive investigations and uncertain proof of ownership. The
consequences would be that land conflicts could proliferate and become more The issues necessitate an inquiry into the facts. While, as a rule, factual issues are
abrasive, if not violent. (Words in bracket ours).10 not within the province of this Court, nonetheless, in light of the conflicting factual
findings of the two (2) courts below, an examination of the facts obtaining in this case
is in order.
Their motion for reconsideration having been denied by the CA in its equally
challenged resolution of June 9, 2000, petitioners are now with us via the present
recourse, faulting the CA as follows: The Rufloes aver that inasmuch as the Deed of Sale purportedly executed by them in
favor of Delos Reyes was a forgery, she could not pass any valid right or title to the
Burgos siblings and Leonarda. The Rufloes also contend that since the Burgos
A. THE HONORABLE COURT OF APPEALS DECIDED THIS CASE IN A WAY NOT siblings and Leonarda acquired the subject property with notice that another person
IN ACCORD WITH THE APPLICABLE DECISIONS OF THE HONORABLE has a right to or interest in such property, they cannot be considered innocent
SUPREME COURT. purchasers in good faith and for value.

B. THERE ARE SPECIAL AND IMPORTANT REASONS THAT REQUIRE A For their part, the Burgos siblings and Leonarda insist that their title is valid and
REVIEW OF THE CA DECISION. binding. They maintain that under the Torrens System, a person dealing with
registered land may safely rely on the correctness on the certificate of title without the
C. THE HONORABLE CA ACTED WITH GRAVE ABUSE OF DISCRETION need of further inquiry. For this reason, the Court cannot disregard the right of an
AMOUNTING TO LACK OF JURISDICTION WHEN IT COUNTERMANDED THE innocent third person who relies on the correctness of the certificate of title even if the
FINDINGS OF THE REGIONAL TRIAL COURT EVEN ON POINTS AND sale is void.
QUESTIONS OF CREDIBILITY.
We find merit in the petition.
D. THE CA JUDGMENT THAT REVERSED THE RTC DECISION IS NOT
SUPPORTED BY THE EVIDENCE ON RECORD AND IS CONTRARY TO The issue concerning the validity of the deed of sale between the Rufloes and Delos
ESTABLISHED PRECEDENTS LAID DOWN BY THE HONORABLE SUPREME Reyes had already been resolved with finality in Civil Case No. M-7690 by the RTC of
COURT. Pasay City which declared that the signatures of the alleged vendors, Angel and
Adoracion Rufloe, had been forged.12 It is undisputed that the forged deed of sale was
E. THE CA ERRED IN LAW IN PRACTICALLY HOLDING THAT A DEAD MAN null and void and conveyed no title. It is a well-settled principle that no one can give
ANGEL RUFLOE (ANGEL NEVER SIGNED) VALIDLY DISPOSED OF HIS what one does not have, nemo dat quod non habet. One can sell only what one owns
PROPERTY (A HOUSE AND LOT COVERED BY A TCT THROUGH A FALSIFIED or is authorized to sell, and the buyer can acquire no more right than what the seller
DEED OF SALE) AFTER HIS DEATH FOUR (4) YEARS BEFORE THE EXECUTION can transfer legally.13 Due to the forged deed of sale, Delos Reyes acquired no right
OF THE DEED. over the subject property which she could convey to the Burgos siblings. All the
transactions subsequent to the falsified sale between the spouses Rufloe and Delos
F. THE CA ERRED IN LAW IN HOLDING ANITA, ANGELINA, AMY AND ANGELITO Reyes are likewise void, including the sale made by the Burgos siblings to their aunt,
BURGOS AND THEIR SUCCESOR-IN-INTEREST (THEIR AUNT) LEONARDA Leonarda.
BURGOS ARE BUYERS IN GOOD FAITH.
We now determine whether respondents Burgos siblings and Leonarda Burgos were
G. THE CA IGNORED THE PLAIN PROVISIONS OF THE CIVIL CODE THAT "IN purchasers in good faith. It has been consistently ruled that a forged deed can legally
ALL CONTRACTUAL, PROPERTY OR OTHER RELATIONS, WHEN ONE OF THE be the root of a valid title when an innocent purchaser for value intervenes.14
PARTIES IS AT A DISADVANTAGE ON ACCOUNT OF HIS MORAL
DEPENDENCE, IGNORANCE, INDIGENCE, MENTAL WEAKNESS, TENDER AGE An innocent purchaser for value is one who buys the property of another without
notice that some other person has a right to or interest in it, and who pays a full and
fair price at the time of the purchase or before receiving any notice of another the presence of occupants/tenants on the property offered for sale, it is expected that
person’s claim.15 The burden of proving the status of a purchaser in good faith and for the purchaser would inquire first into the nature of possession of the occupants, i.e.,
value lies upon one who asserts that status. This onus probandi cannot be whether or not the occupants possess the land in the concept of an owner. Settled is
discharged by mere invocation of the ordinary presumption of good faith.16 the rule that a buyer of real property that is in the possession of a person other than
the seller must be wary and should investigate the rights of those in possession.
As a general rule, every person dealing with registered land, as in this case, may Otherwise, without such inquiry, the buyer can hardly be regarded as a buyer in good
safely rely on the correctness of the certificate of title issued therefor and will in no faith.21
way oblige him to go beyond the certificate to determine the condition of the property.
However, this rule admits of an unchallenged exception: In the same vein, Leonarda cannot be categorized as a purchaser in good faith. Since
it was the Rufloes who continued to have actual possession of the property, Leonarda
… a person dealing with registered land has a right to rely on the Torrens certificate should have investigated the nature of their possession.
of title and to dispense with the need of inquiring further except when the party has
actual knowledge of facts and circumstances that would impel a reasonably cautious We cannot ascribe good faith to those who have not shown any diligence in
man to make such inquiry or when the purchaser has knowledge of a defect or the protecting their rights. Respondents had knowledge of facts that should have led
lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to them to inquire and investigate in order to acquaint themselves with possible defects
inquire into the status of the title of the property in litigation. The presence of anything in the title of the seller of the property.  However, they failed to do so. Thus,
1avvphi1.zw+

which excites or arouses suspicion should then prompt the vendee to look beyond the Leonarda, as well as the Burgos siblings, cannot take cover under the protection the
certificate and investigate the title of the vendor appearing on the face of said law accords to purchasers in good faith and for value. They cannot claim valid title to
certificate. One who falls within the exception can neither be denominated an the property.
innocent purchaser for value nor a purchaser in good faith and, hence, does not merit
the protection of the law.17 Moreover, the defense of indefeasibility of a Torrens title does not extend to a
transferee who takes it with notice of a flaw in the title of his transferor. To be
The circumstances surrounding this case point to the absolute lack of good faith on effective, the inscription in the registry must have been made in good faith. A holder in
the part of respondents. The evidence shows that the Rufloes caused a notice of bad faith of a certificate of title is not entitled to the protection of the law, for the law
adverse claim to be annotated on the title of Delos Reyes as early as November 5, cannot be used as a shield for fraud.22
1979.18 The annotation of an adverse claim is a measure designed to protect the
interest of a person over a piece of real property, and serves as a notice and warning We quote with approval the following findings of the trial court showing that the sale
to third parties dealing with said property that someone is claiming an interest on the between the Burgos siblings and Leonarda is simulated:
same or may have a better right than the registered owner thereof. Despite the notice
of adverse claim, the Burgos siblings still purchased the property in question.
1. The sale was not registered, a circumstance which is inconceivable in a
legitimate transfer. A true vendee would not brook any delay in registering
Too, at the time the Burgos siblings bought the subject property on December 4, the sale in his favor. Not only because registration is the operative act that
1984, Civil Case No. M-7690,19 an action for damages, and Criminal Case No. 10914- effects property covered by the Torrens System, but also because
P,20 for estafa, filed by the Rufloes against Delos Reyes, were both pending before the registration and issuance of new title to the transferee, enable this transferee
RTC of Pasay City. This circumstance should have alerted the Burgos siblings as to to assume domiciliary and possessory rights over the property. These
the validity of Delos Reyes’ title and her authority and legal right to sell the property. benefits of ownership shall be denied him if the titles of the property shall
remain in the name of vendor. Therefore, it is inconceivable as contrary to
Equally significant is the fact that Delos Reyes was not in possession of the subject behavioral pattern of a true buyer and the empirical knowledge of man to
property when she sold the same to the Burgos siblings. It was Amado Burgos who assume that a buyer who invested on the property he bought would be
bought the property for his children, the Burgos siblings. Amado was not personally uninvolved and not endeavor to register the property he bought. The
acquainted with Delos Reyes prior to the sale because he bought the property nonchalance of Leonarda amply demonstrates the pretended sale to her,
through a real estate broker, a certain Jose Anias, and not from Delos Reyes herself. and the evident scheme of her brother Amado who invested on the property
There was no showing that Amado or any of the Burgos siblings exerted any effort to he bought.
personally verify with the Register of Deeds if Delos Reyes’ certificate of title was
clean and authentic. They merely relied on the title as shown to them by the real 2. Despite the sale of property to Leonarda, the sellers continued paying
estate broker. An ordinarily prudent man would have inquired into the authenticity of taxes on the property from the time they acquired it from Elvira in 1984 up to
the certificate of title, the property’s location and its owners. Although it is a the present or a period of ten years. The tax payment receipts remained in
recognized principle that a person dealing with registered land need not go beyond its the name of Anita and her siblings, (Exhibits "16" to "16-H"). On the other
certificate of title, it is also a firmly established rule that where circumstances exist hand, Leonarda does not even pretend to have paid any tax on the land she
which would put a purchaser on guard and prompt him to investigate further, such as allegedly bought in 1985. Even the Tax Declaration issued in 1988, three
 years after the sale to her (Leonarda) is still in the name of her nieces and Patently, the Burgos siblings were not innocent purchasers for value and the
nephew. These circumstances can only account for the fact that her nieces simulated sale to Leonarda did not remove the defect in their title.
and nephew remained the owners of the land and continued paying taxes
thereon. Accordingly, we sustain the trial court’s award of ₱20,000.00 as moral damages,
₱50,000.00 as exemplary damages, and P50,000.00 as attorney’s fees.24
3. Leonarda never exercised the attributes of ownership. Far from it, she
vested the exercise of domiciliary and possessory rights in her brother However, the actual damages in the amount of ₱134,200.00 should be deleted. In
Amado the father of Anita, Angelina, Angelito and Amy, by constituting him view of this Court’s ruling that the property rightfully belongs to petitioners and must
with full power including the ejectment of plaintiffs, to defend and to enter a be restored to them, there is no more basis for the award of said actual damages to
compromise of any case he may file. She allowed the children of Amado to the Rufloes.
remain as the registered owners of the property without pressing for its
transfer to her.
WHEREFORE, the petition for review is hereby GRANTED. The assailed decision
and resolution of the Court of Appeals in CA-G.R. CV. No. 49939 are REVERSED
4. And, this simulated sale is the handiwork of Amado who apparently acted and SET ASIDE. Accordingly, the decision of the trial court is hereby REVIVED,
advisedly to make it appear that his sister Leonarda as the second except the award of actual damages which must be deleted.
transferee of the property is an innocent purchaser for value. Since he or his
children could not plausibly assume the stance of a buyer in good faith from
the forger Elvira Delos Reyes, knowing of Elvira’s defective title, Amado SO ORDERED.
hoped that the entry of his sister Leonarda, might conjure the image and
who might pass off as an innocent purchaser, specially considering that the
notice of adverse claim of the Plaintiffs which was annotated in Elvira’s title
was not, strangely enough, NOT carried over in the title of his children, who
were made to appear as the sellers to their Aunt Leonarda. It was a neat
chicanery of Amado to bring the property out of the reach of Plaintiffs thru a
series of transfers involving a third party, to make her appear as an innocent
purchaser for value. His sister could be manipulated to evict or oust the real
owners from their own property thru a documentary manipulation.
Unfortunately, his scheme has not passed unnoticed by a discerning and
impartial evaluator, like this court. The Municipal Court of Muntinlupa in Civil
Case No. 17446 has even established that Amado’s children Anita and
others are buyers in bad faith who knew of the defective title of their
transferor Elvira Delos Reyes, the forger, as aforestated.

These circumstances taken altogether would show that the sale, which occurred
between Leonarda and the Burgos siblings, was simply a scheme designed to
cleanse the title passed on to them by the forger Delos Reyes. Respondents had to
resort to this strategy because they were fully aware that their title, having originated
from the forged deed of sale of Delos Reyes, was not a clean and valid title. The trial
court explained, thus:

And, this simulated sale is the handiwork of Amado who apparently acted advisedly to
make it appear that his sister Leonarda as the second transferee of the property is an
innocent purchaser for value. Since he or his children could not plausibly assume the
stamp of a buyer in good faith from the forger Elvira Delos Reyes, knowing Elvira’s
defective title, Amado had hoped that the entry of his sister Leonarda, might conjure
the image and might pass off as an innocent purchaser. xxx. It was a neat chicanery
of Amado to bring the property out of the reach of plaintiffs [herein petitioners] thru a
series of transfers involving a third party, to make her appear as an innocent
purchaser for value. Unfortunately, his scheme has not passed unnoticed by a
discerning and impartial evaluator, like this Court.23 (Words in bracket ours)
 Republic of the Philippines The RTC and the CA have the same findings of fact, but differ in their legal
SUPREME COURT conclusions. There being no factual issues raised in the Petitions, we adopt the
Manila findings of fact of the CA in CA-G.R. No. 85542, as follows:

FIRST DIVISION The subject parcel of land, described as Lot 1679 of the Cadastral Survey of Legaspi,
consisting of 8,571 square meters, was originally covered by Original Certificate of
G.R. No. 183448               June 30, 2014 Title (OCT) No. (O) 16 and registered in the name of Bernardina Abalon (Abalon). It
appears that a Deed of Absolute Sale was executed over the subject property in favor
of Restituto M. Rellama (Rellama) on June 10, 1975. By virtue of such conveyance
SPOUSES DOMINADOR PERALTA AND OFELIA PERALTA, Petitioners, OCT No. (O) 16 was cancelled and in lieu thereof Transfer Certificate of Title (TCT)
vs. No. 42108 was issued in the name of Rellama. The subject property was then
HEIRS OF BERNARDINA ABALON, represented by MANSUETO subdivided into three (3) portions: Lot 1679-A, Lot 1679-B, Lot 1679-C. Lot 1679-A
ABALON, Respondents. was sold to Spouses Dominador P. Peralta, Jr. and Ofelia M. Peralta (Spouses
Peralta) for which reason TCT No. 42254 was issued in their names. Lot 1679-B, on
x-----------------------x the other hand, was first sold to Eduardo Lotivio (Lotivio) who thereafter transferred
his ownership thereto to Marissa Andal, Arnel Andal, and Leonil Andal (the Andals)
G.R. No. 183464 through a Deed of Absolute Sale dated October 9, 1995. On even date, TCT No.
42482 was issued in the name of the Andals. The Andals likewise acquired Lot 1679-
C as evidenced by the issuance of TCT No. 42821 in their favor on December 27,
HEIRS OF BERNARDINA ABALON, represented by MANSUETO 1995.
ABALON, Petitioners,
vs.
MARISSA ANDAL, LEONIL AND AL, ARNEL AND AL, SPOUSES DOMINDOR Claiming that the Deed of Absolute Sale executed by Abalon in favor of Rellama was
PERALTA AND OFELIA PERALTA, and HEIRS of RESTITUTO RELLAMA, a forged document, and claiming further that they acquired the subject property by
represented by his children ALEX, IMMANUEL, JULIUS and SYLVIA, all succession, they being the nephew and niece of Abalon who died without issue,
surnamed RELLAMA. plaintiff-appellees Mansueta Abalon and Amelia Abalon filed the case below against
Rellama, Spouses Peralta, and the Andals, the herein defendants-appellants and the
Bank of the Philippines [sic] Islands which was later dropped as a party defendant.
DECISION
It was alleged in their Complaint and subsequent Amended Complaint, under five
SERENO, CJ: separate causes of action, that Rellama was able to cause the cancellation of OCT
No. (O) 16, and in lieu thereof the issuance of TCT No. 42108 in his own name from
Before us are the consolidated Petitions for Review on Certiorari under Rule 45 of the which the defendants-appellants derived their own titles, upon presentation of a xerox
Rules of Court assailing the 30 May 2007 Decision  of the Court of Appeals (CA)
1 copy of the alleged forged deed of absolute sale and the order granting the issuance
Seventeenth Division in CA-G.R. CV No. 85542. The CA had reversed the 14 April of a second owner’s duplicate copy of OCT No. (O) 16 in his favor in Miscellaneous
2005 Decision  of the Regional Trial Court (RTC), Fifth Judicial Region of Legaspi
2 Cadastral Case No. 10648, which he had filed on the pretext that Lot 1679 covered
City, Branch 5, in Civil Case No. 9243. by OCT No. (O) 16 was sold to him and that the owner’s duplicate copy of the said
title got lost in 1976 after the same was delivered to him. They averred that the
owner’s duplicate copy of Oct NO. (O) 16 had always been with Abalon and that upon
The civil case before the RTC of Legaspi City involved a parcel of land registered
her death, it was delivered to them. Likewise, they alleged that Abalon had always
under the name of Bernardina Abalon and fraudulently transferred to Restituto
been in possession of the subject property through her tenant Pedro Bellen who was
Rellama and who, in turn, subdivided the subject property and sold it separately to the
thereafter succeeded by his wife, Ruperta Bellen, and then his son, Godofredo
other parties to this case – Spouses Dominador and Ofelia Peralta; and Marissa,
Bellen. On the other hand, they said that Rellama had never set foot on the land he
Leonil and Arnel, all surnamed Andal. Thereafter, Spouses Peralta and the Andals
was claiming. They further alleged that after the ownership over the subject property
individually registered the respective portions of the land they had bought under their
was transferred to them upon the death of Abalon, they took possession thereof and
names. The heirs of Bernardina were claiming back the land, alleging that since it was
retained Godofredo as their own tenant. However, they averred that in 1995 the
sold under fraudulent circumstances, no valid title passed to the buyers. On the other
defendants-appellants were able to wrest possession of the subject property from
hand, the buyers, who were now title holders of the subject parcel of land, averred
Godofredo Bellen. They alleged that the defendants-appellants are not buyers in
that they were buyers in good faith and sought the protection accorded to them under
good faith as they were aware that the subject land was in the possession of the
the law.
plaintiffs-appellees at the time they made the purchase. They thus claim that the titles
issued to the defendants-appellants are null and void.
THE FACTS
In his answer, Rellama alleged that the deed of absolute sale executed by Abalon is SO ORDERED.
genuine and that the duplicate copy of OCT No. (O) 16 had been delivered to him
upon the execution of the said deed of transfer. Spouses Peralta and the Andals filed their separate Notices of Appeal and thereafter,
upon approval, filed their respective Defendants-Appellants’ Briefs. The Heirs of
As for Spouses Peralta and the Andals, who filed their separate answers to the Rellama, on the other hand, opted not to challenge the ruling of the lower court. 3

complaint, they mainly alleged that they are buyers in good faith and for value.
The Andals and Spouses Peralta – appellants in CA-G.R. CV No. 85542 – raised
During the trial, Rellama passed away. He was substituted by his heirs. several issues, which the CA summarized as follows:

After the plaintiffs-appellees rested their case, instead of presenting their own 1. Whether the Deed of Absolute Sale executed by Abalon in favor of
evidence, the defendants-appellants and the Heirs of Restituto Rellama, on different Rellama was spurious
occasions, filed a demurrer to evidence.
2. Whether the Andals and Spouses Peralta were buyers in good faith and
On April 14, 2005, the court a quo rendered judgment in favor of the plaintiffs- for value
appellees and ordered the restoration of OCT No. (O) 16 in the name of Abalon and
the cancellation of the titles issued to the defendants-appellants. The fact that only a 3. Who among the parties were entitled to their claims for damages. 4

xerox copy of the purported deed of sale between Rellama and Abalon was
presented before the Register of Deeds for registration and the absence of such
xerox copy on the official files of the said Office made the court a quo conclude that THE RULING OF THE COURT OF APPEALS
the said document was a mere forgery. On the other hand, the court a quo noted that
the duplicate copy of OCT No. (O) 16 in the hands of the plaintiffs-appellees bears On 30 May 2007, the Seventeenth Division of the Court of Appeals promulgated its
[sic] the perforated serial number B 221377, which it held is a convincing proof of its assailed judgment setting aside the RTC Decision. The CA ruled that the
authenticity and genuineness. It thus stated that "Miscellaneous Cadastral Case No. circumstances surrounding the sale of the subject property showed badges of fraud
10648 is a (mere) strategem [sic] fraudulently concocted ... for the issuance of a or forgery against Rellama. It found that Abalon had not parted with her ownership
fabricated (second) owner’s duplicate certificate of Oct No. (O) 16" since the owner’s over the subject property despite the claim of Rellama that they both executed a
duplicate copy of OCT No. (O) 16 has not been lost at all. It said that any subsequent Deed of Absolute Sale. As proof, the CA pointed out the existence of a notarized
registration procured by the presentation of such forged instrument is null and void. contract of leasehold executed by Abalon with Ruperta Bellen on 11 June 1976. The
The dispositive portion of the court a quo’s decision reads: WHEREFORE, [p]remises genuineness and due execution of the said leasehold agreement was uncontroverted
[c]onsidered, judgment is rendered as follows, to wit: by the parties. On this basis, the appellate court concluded that Abalon could not
have leased the subject parcel of land to Bellen if the former had parted with her
1. Ordering the restoration of Original Certificate of Title No. (O) 16 ownership thereof. 5

embracing Lot 1679 in the name of Bernardina Abalon into the official files of
the Registry of Deeds of Legaspi City – a copy of the owner’s duplicate The CA also found no evidence to show that Rellama exercised dominion over the
certificate embodying the technical description of Lot 1679 forming official subject property, because he had not introduced improvements on the property,
part of the record as Exhibit "D" – as well as ordering the cancellation of any despite claiming to have acquired it in 1975.  Further, the CA noted that he did not
6

and all transfer certificates of title succeeding Original Certificate of title No. cause the annotation of the Deed of Sale, which he had executed with Abalon, on
(O) 16 – including Transfer Certificates (sic) of Title Nos. 42108, 42254, OCT No. (O) 16. It observed that when the original copy of OCT No. (O) 16 was
42255, 42256, 42821 [,] and 42482; allegedly lost in 1976, while Rellama was on his way to Legaspi City to register the
title to his name, it took him almost 20 years to take steps to judicially reconstitute a
2. Ordering the defendants Marissa Andal, Leonil Andal, Arnel Andal[,] and copy thereof. To the appellate court, these circumstances cast doubt on the veracity
the spouses Dominador and Ofelia Peralta to vacate Lot 1679 and to of Rellama’s claim of ownership over such a significant property, which was almost a
peacefully surrender such lot to the plaintiffs; hectare.7

3. Ordering the defendants to pay the plaintiffs the amount of ₱50,000.00 as The CA also ruled that the heirs of Bernardina Abalon had the legal standing to
litigation expenses; and question the sale transaction between Rellama and their predecessor-in-interest. It
concluded that the heirs of Abalon had acquired the subject property by ordinary
acquisitive prescription and thus had every right to attack every document that
4. Ordering the defendants to pay the costs of suit. intended to divest them of ownership thereof,  which in this case was the Deed of
8

Sale that Bernardina executed in favor of Rellama. Lastly, the appellate court
The counterclaims by [sic] the defendants are all dismissed. considered the Spouses Peralta as buyers in bad faith for relying on a mere
photocopy of TCT No. 42108 when they bought the property from Rellama.  On the 9
c) The heirs of Abalon failed to prove that they had inherited the subject
other hand, it accorded the Andals the presumption of good faith, finding no evidence property.
that would rebut this presumption. 10

d) Spouses Peralta are buyers in good faith and, thus title to their portion of
The dispositive portion of the assailed CA Decision in CA-G.R. CV No. 85542 is as the subject property must be upheld 15

follows:
As for the heirs of Abalon, their Petition, docketed as G.R. No. 183464, raises the
WHEREFORE, the assailed decision is SET ASIDE and a new judgment is rendered following issues:
as follows:
a) The Andals cannot be considered as buyers in good faith by simply
1. Transfer Certificate of Title No. 42482 and Transfer Certificate of Title No. applying the ordinary presumption in the absence of evidence showing the
42821, both in the names of Andals, are held legal and valid. contrary.

2. Transfer Certificate of Title No. 42254 registered in the names of Spouses b) The CA erred in applying in favor of the Andals, the doctrine that a forged
Peralta is cancelled for being null and void. Hence, they are ordered to instrument may become the root of a valid title in the hands of an innocent
vacate the land covered thereby and to surrender possession thereof in purchaser for value, because Abalon never parted with her possession of the
favor of the plaintiffs-appellees. valid and uncancelled title over the subject property

SO ORDERED. 11
c) The CA erred in declaring the validity of the title issued in the names of
the Andals, because Rellama was bereft of any transmissible right over the
The heirs of Abalon filed a Motion for Reconsideration of the 30 May 2007 Decision, portion of the property he had sold to them. 16

insofar as the CA declared the Andals to be buyers in good faith of the subject
property and, thus, that the land title issued in their favor was valid. Spouses Peralta, THE COURT’S RULING
for their part, filed a Motion for Partial Reconsideration of the said CA Decision
pertaining to the portion that declared them as buyers in bad faith which accordingly We deny the Petitions and affirm the ruling of the CA.
nullified the title issued to them.
The main issue to be resolved in this case is whether a forged instrument may
On 10 June 2008, the CA denied the Motions for Partial Reconsideration of the become the root of a valid title in the hands of an innocent purchaser for value, even if
movants for lack of merit. 12
the true owner thereof has been in possession of the genuine title, which is valid and
has not been cancelled.
On 11 August 2008, Spouses Peralta filed with this Court a Petition for Review under
Rule 45 of the Rules of Court assailing the 30 May 2007 Decision in CA-G.R. CV No. It is well-settled that "a certificate of title serves as evidence of an indefeasible and
85542.  On the same day, the heirs of Bernardina Abalon, represented by Mansueto
13
incontrovertible title to the property in favor of the person whose name appears
Abalon, filed a similar Petition questioning the portion of the mentioned CA Decision therein. The real purpose of the Torrens system of land registration is to quiet title to
declaring the validity of the title issued to the Andals, who were adjudged by the land and put a stop forever to any question as to the legality of the title."17

appellate court as buyers in good faith.  THE ISSUES

14

In Tenio-Obsequio v. Court of Appeals,  we explained the purpose of the Torrens

18

The Petition filed by Spouses Peralta, docketed as G.R. No. 183448, lists the system and its legal implications to third persons dealing with registered land, as
following issues: follows:

a) The case for annulment should have been dismissed because the The main purpose of the Torrens system is to avoid possible conflicts of title to real
purported Deed of Sale executed by Abalon and Rellama was not introduced estate and to facilitate transactions relative thereto by giving the public the right to rely
in evidence and thus, forgery was not proven. upon the face of a Torrens certificate of title and to dispense with the need of inquiring
further, except when the party concerned has actual knowledge of facts and
b) The heirs of Abalon are notforced heirs of Bernardina Abalon; hence, they circumstances that should impel a reasonably cautious man to make such further
do not have the legal personality to file the action to annul the subject Deed inquiry. Where innocent third persons, relying on the correctness of the certificate of
of Sale. 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 excites or arouses suspicion should then prompt the vendee to look beyond the
everyone dealing with property registered under the Torrens system would have to certificate and investigate the title of the vendor appearing on the face of said
inquire in every instance as to whether the title has been regularly or irregularly certificate. One who falls within the exception can neither be denominated an
issued by the court. Every person dealing with registered land may safely rely on the innocent purchaser for value nor a purchaser in good faith; and hence does not merit
correctness of the certificate of title issued therefor and the law will in no way oblige the protection of the law.22

him to go beyond the certificate to determine the condition of the property.

Thus, the determination whether one is a buyer in good faith or can be considered an
The Torrens system was adopted in this country because it was believed to be the innocent purchaser for value becomes imperative. Section 55 of the Land
most effective measure to guarantee the integrity of land titles and to protect their Registration Act provides protection to an innocent purchaser for value  by allowing
23

indefeasibility once the claim of ownership is established and recognized. If a person him to retain the parcel of land bought and his title is considered valid. Otherwise, the
purchases a piece of land on the assurance that the seller's title thereto is valid, he title would be cancelled and the original owner of the parcel of land is allowed to
should not run the risk of being told later that his acquisition was ineffectual after all. repossess it.
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 Jurisprudence has defined an innocent purchaser for value as one who buys the
be attended by complicated and not necessarily conclusive investigations and proof property of another without notice that some other person has a right to or interest
of ownership. The further consequence would be that land conflicts could be even therein and who then pays a full and fair price for it at the time of the purchase or
more numerous and complex than they are now and possibly also more abrasive, if before receiving a notice of the claim or interest of some other persons in the
not even violent. The Government, recognizing the worthy purposes of the Torrens property. Buyers in good faith buy a property with the belief that the person from
system, should be the first to accept the validity of titles issued thereunder once the whom they receive the thing is the owner who can convey title to the property. Such
conditions laid down by the law are satisfied. buyers do not close their eyes to facts that should put a reasonable person on guard
and still claim that they are acting in good faith.24

The Torrens system was intended to guarantee the integrity and conclusiveness of
the certificate of registration, but the system cannot be used for the perpetration of The assailed Decision of the CA held that the Andals were buyers in good faith, while
fraud against the real owner of the registered land. The system merely confirms Spouses Peralta were not. Despite its determination that fraud marred the sale
ownership and does not create it. It cannot be used to divest lawful owners of their between Bernardina Abalon and Rellama, a fraudulent or forged document of sale
title for the purpose of transferring it to another one who has not acquired it by any of may still give rise to a valid title. The appellate court reasoned that if the certificate of
the modes allowed or recognized by law. Thus, the Torrens system cannot be used to title had already been transferred from the name of the true owner to that which was
protect a usurper from the true owner or to shield the commission of fraud or to enrich indicated by the forger and remained as such, the land is considered to have been
oneself at the expense of another. 19
subsequently sold to an innocent purchaser, whose title is thus considered valid.  The 25

CA concluded that this was the case for the Andals.

It is well-established in our laws and jurisprudence that a person who is dealing with a
registered parcel of land need not go beyond the face of the title. A person is only The appellate court cited Fule v. Legare  as basis for its ruling. In the said case, the
26

charged with notice of the burdens and claims that are annotated on the title.  This
20
Court made an exception to the general rule that a forged or fraudulent deed is a
rule, however, admits of exceptions, which we explained in Clemente v. Razo: 21
nullity and conveys no title. A fraudulent document may then become the root of a
valid title, as it held in Fule:
Any buyer or mortgagee of realty covered by a Torrens certificate of title, in the
absence of any suspicion, is not obligated to look beyond the certificate to investigate Although the deed of sale in favor of John W. Legare was fraudulent, the fact remains
the titles of the seller appearing on the face of the certificate. And, he is charged with that he was able to secure a registered title to the house and lot. It was this title which
notice only of such burdens and claims as are annotated on the title. he subsequently conveyed to the herein petitioners. We have indeed ruled that a
forged or fraudulent deed is a nullity and conveys no title (Director of Lands vs.
We do acknowledge that the rule thus enunciated is not cast in stone. For, indeed, Addison, 49 Phil., 19). However, we have also laid down the doctrine that there are
there are exceptions thereto. Thus, in Sandoval vs. CA, we made clear the following: instances when such a fraudulent document may become the root of a valid title. One
such instance is where the certificate of title was already transferred from the name of
The aforesaid principle admits of an unchallenged exception: that a person dealing the true owner to the forger, and while it remained that way, the land was
with registered land has a right to rely on the Torrens certificate of title and to subsequently sold to an innocent purchaser. For then, the vendee had the right to rely
dispense with the need of inquiring further except when the party has actual upon what appeared in the certificate (Inquimboy vs. Cruz, G.R. No. L-13953, July 28,
knowledge of facts and circumstances that would impel a reasonably cautious man to 1960).
make such inquiry or when the purchaser has knowledge ofa defect or the lack of title
in his vendor or of sufficient facts to induce a reasonably prudent man to inquire into We have been constrained to adopt the conclusion here set forth because under the
the status of the title of the property in litigation. The presence of anything which Torrens system, "registration is the operative act that gives validity to the transfer or
creates a lien upon the land (Secs. 50 and 51, Land Registration Act). Consequently, by the mortgage. Inevitably, it pronounced that the foreclosure sale, where Mota was
where there was nothing in the certificate of title to indicate any cloud or vice in the the highest bidder, also bound Torres and concluded that the certificate of title issued
ownership of the property, or any encumbrance thereon, the purchaser is not required in the name of Mota prevails over that of Torres'. As correctly pointed out by Torres,
to explore farther than what the Torrens title upon its face indicates in quest for any however, his properties were sold on execution, and not on foreclosure sale, and
hidden defect or inchoate right that may subsequently defeat his right thereto. If the hence, the purchaser thereof was bound by his notice of adverse claim and lis
rule were otherwise, the efficacy and conclusiveness of the certificate of title which pendens annotated at the back of Fernandez' TCT. Moreover, even if We grant Mota
the Torrens system seeks to insure would entirely be futile and nugatory. (Reynes vs. the status of an innocent mortgagee, the doctrine relied upon by the appellate court
Barrera, 68 Phil., 656; De Lara and De Guzman vs. Ayroso, 50 O.G. No 10, 4838). that a forged instrument may become the root of a valid title, cannot be applied where
The public shall then be denied of its foremost motivation for respecting and the owner still holds a valid and existing certificate of title covering the same interest
observing the Land Registration Act. In the end, the business community stands to be in a realty. The doctrine would apply rather when, as in the cases for example of De la
inconvenienced and prejudiced immeasurably. Cruz v. Fabie, 35 Phil. 144 [1916], Fule v. De Legare, No. L-17951, February 28,
1963, 7 SCRA 351, and Republic v. Umali, G.R. No. 80687, April 10, 1989, the forger
Furthermore, when the Register of Deeds issued a certificate of title in the name of thru insidious means obtains the owner’s duplicate certificate of title, converts it in his
John W. Legare, and thereafter registered the same, John W. Legare, insofar as third name, and subsequently sells or otherwise encumbers it to an innocent holder for
parties were concerned, acquired valid title to the house and lot here disputed. When, value, for in such a case the new certificate is binding upon the owner (Sec.55, Act
therefore, he transferred this title to the herein petitioners, third persons, the entire 496; Sec. 53, P.D. No. 1529). But if the owner holds a valid and existing certificate of
transaction fell within the purview of Article 1434 of the Civil Code. The registration in title, his would be indefeasible as against the whole world, and not that of the
John W. Legare's name effectively operated to convey the properties to him. innocent holder's. "Prior tempore potior jure" as We have said in Register of Deeds v.
Philippine National Bank, No. L-17641, January 30, 1965, 13 SCRA 46, citing
Legarda v. Saleeby, 31 Phil.590, Roman Catholic Bishop v. Philippine Railway, 49
After executing the Deed of Sale with Bernardina Abalon under fraudulent Phil. 546, Reyes v. Borbon, 50 Phil. 791.  (Emphasis and underscoring supplied)
29

circumstances, Rellama succeeded in obtaining a title in his name and selling a

portion of the property to the Andals, who had no knowledge of the fraudulent
circumstances involving the transfer from Abalon to Rellama. In fact, the Decisions of We do not agree with the contention of the Abalons that the ruling in Torresis
the RTC and the CA show no factual findings or proof that would rebut the controlling in this case. They quoted a portion in the said case that is clearly an obiter.
presumption in favor of the Andals as buyers in good faith. Thus, the CA correctly In Torres, it was shown that Mariano had annotated an adverse claim on the title
considered them as buyers in good faith and upheld their title. procured by Fernandez prior to the execution sale, in which Mota was the highest
bidder. This Court declared her as a mortgagee in bad faith because, at the back of
Fernandez’s title, Torres made an annotation of the adverse claim and the notice of
The Abalons counter this ruling and allege that the CA erred in relying on Fuleto lis pendens. The annotation of the adverse claim was made while the forged
justify its assailed Decision. They argue that Torres v. Court of Appeals  is the
27
document was still in the name of the forger, who in this case is Fernandez. That
applicable ruling, because the facts therein are on all fours with the instant case. 28
situation does not obtain in the instant case.

In Torres, the subject property was covered by TCT No. 53628 registered in the name The records of the RTC and the CA have a finding that when Rellama sold the
of Mariano Torres. His brother-in-law Francisco Fernandez, misrepresenting that the properties to the Andals, it was still in his name; and there was no annotation that
copy of the title had been lost, succeeded in obtaining a court Order for the issuance would blight his clean title. To the Andals, there was no doubt that Rellama was the
of another copy of TCT No. 53628. He then forged a simulated deed of sale owner of the property being sold to them, and that he had transmissible rights of
purportedly showing that Torres had sold the property to him and caused the ownership over the said property. Thus, they had every right to rely on the face of his
cancellation of TCT No. 53628, as well as the issuance of TCT No. 86018 in his title alone.
name. Soon, Fernandez mortgaged the property to Mota. Upon learning of the fraud
committed by Fernandez, Torres caused the annotation of an adverse claim on the
former’s copy and succeeded in having Fernandez’s title declared null and void. The established rule is that a forged deed is generally null and cannot convey title,
Meanwhile, Mota was able to foreclose on Fernandez’s real estate mortgage, as well the exception thereto, pursuant to Section 55 of the Land Registration Act, denotes
as to cause the cancellation of TCT No. 86018 and the issuance of a new one– TCT the registration of titles from the forger to the innocent purchaser for value. Thus, the
No. 105953 – in her name. The issue to be resolved in Torres was whether Mota can qualifying point here is that there must be a complete chain of registered titles.  This
30

be considered an innocent mortgagee for value, and whether her title can be deemed means that all the transfers starting from the original rightful owner to the innocent
valid. Ruling in the negative, the Court explained: holder for value – and that includes the transfer to the forger – must be duly
registered, and the title must be properly issued to the transferee. Contrary to what
the Abalons would like to impress on us, Fuleand Torresdo not present clashing
There is nothing on the records which shows that Torres performed any act or views. In Fule, the original owner relinquished physical possession of her title and
omission which could have jeopardized his peaceful dominion over his realties. The thus enabled the perpetrator to commit the fraud, which resulted in the cancellation of
decision under review, however, in considering Mota an innocent mortgagee her title and the issuance of a new one. The forged instrument eventually became the
protected under Section 65 of the Land Registration Law, held that Torres was bound root of a valid title in the hands of an innocent purchaser for value. The new title
under the name of the forger was registered and relied upon by the innocent falsehood of facts or when there is a need to calibrate the whole evidence considering
purchaser for value. Hence, it was clear that there was a complete chain of registered mainly the credibility of the witnesses, the existence and relevancy of specific
titles. surrounding circumstances, as well as their relation to each other and to the whole,
and the probability of the situation."  It is further pointed out that "the determination of
33

On the other hand in Torres, the original owner retained possession of the title, but whether one is a buyer in good faith is a factual issue, which generally is outside the
through fraud, his brother-in-law secured a court order for the issuance of a copy province of this Court to determine in a petition for review."34

thereof. While the title was in the name of the forger, the original owner annotated the
adverse claim on the forged instrument. Thus, before the new title in the name of the Whether or not Spouses Peralta are buyers in good faith, is without a doubt, a factual
forger could be transferred to a third person, a lien had already been annotated on its issue. Although this rule admits of exceptions,  none of these applies to their case.
35

back. The chain of registered titles was broken and sullied by the original owner’s There is no conflict between the factual findings and legal conclusions of the RTC and
annotation of the adverse claim. By this act, the mortgagee was shown to be in bad those of the CA, both of which found them to be buyers in bad faith. The fact that they
faith. did not participate in the proceedings before the lower court does not help their case
either.
In the instant case, there is no evidence that the chain of registered titles was broken
in the case of the Andals. Neither were they proven to have knowledge of anything On the issue of the legal standing of the Abalons to file this case, we find that the CA
that would make them suspicious of the nature of Rellama’s ownership over the correctly upheld their standing as heirs of the deceased Bernardina Abalon. The
subject parcel of land. Hence, we sustain the CA’s ruling that the Andals were buyers appellate court ruled that during her lifetime, Bernardina Abalon had promised her
in good faith. Consequently, the validity of their title to the parcel of the land bought heirs - siblings Mansueto and Amelia - that she would give them the subject property.
from Rellama must be upheld. A duplicate copy of OCT No. (0) 16 was delivered to them upon her death. Thus, the
CA concluded that the two siblings acquired the subject property by ordinary
As for Spouses Peralta, we sustain the ruling of the CA that they are indeed buyers in prescription. Further, it deduced that the mode of transmission of the property from
bad faith. The appellate court made a factual finding that in purchasing the subject Bernardina to her nephew and niece was a form of donation mortis causa, though
property, they merely relied on the photocopy of the title provided by Rellama. The CA without the benefit of a will.  Despite this omission, it still held that Mansueto and
36

concluded that a mere photocopy of the title should have made Spouses Peralta Amelia acquired the subject property through ordinary acquisitive prescription
suspicious that there was some flaw in the title of Rellama, because he was not in because, since the death of their aunt Bernardina, they had been in possession of the
possession of the original copy. This factual finding was supported by evidence. property for more than 10 years that ripened into full ownership. 37

The CA pointed out Spouses Peralta’s Answer to the Complaint of the Abalons in Under Article 975  of the Civil Code, siblings Mansueto and Amelia Abalon are the
38

Case No. 9243 in the RTC of Legaspi City, Branch 5. In their Answer, they specifically legal heirs of Bernardina, the latter having had no issue during her marriage. As such,
alleged as follows: they succeeded to her estate when she passed away. While we agree with the CA
that the donation mortis causa was invalid in the absence of a will, it erred in
concluding that the heirs acquired the subject property through ordinary acquisitive
2- These defendants [Spouses Peralta] acquired lot No. 1679-A by purchase prescription. The subject parcel of land is a titled property; thus, acquisitive
in good faith and for value from Restituto Rellama under Doc. No. 11212, prescription is not applicable.  Upon the death of Bernardina, Mansueto and Amelia,
39

page No. 26, Book No. 60, Series of 1996 of Notary Public Atty. Otilio being her legal heirs, acquired the subject property by virtue of succession, and not
Bongon, Legaspi City on March 2, 1995 copy of which is attached as and by ordinary acquisitive prescription.
made part of this answer as Exhibit "1;"
WHEREFORE, the petitions in G.R. Nos. 183448 and 183464 are DENIED for lack of
3- That these defendants were handed over by Rellama xerox [sic] copy of merit. The Decision in CA-G.R. CV No. 85542 is hereby AFFIRMED.
the Transfer Certificate of Title No. 42103 issued by the Register of Deed of
Legaspi City on the 2nd day of August 1995 copy attached and made
integral part as Exhibit "1-A" and also Original Certificate of Title No. (O) 16 SO ORDERED.
as Exhibit "1-B"31

We have no reason to disturb this factual finding of the CA because it is supported by

the evidence on record. Spouses Peralta filed a Petition for Review on Certiorari
under Rule 45, which allows only questions of law to be raised. It is a settled rule that
questions of fact are not reviewable in this kind of appeal. Under Rule 45, Section 1,
"petitions for review on certiorari shall raise only questions of law which must be
distinctly set forth."  A question of fact arises when there is "as to the truth or
32
G.R. No. 219500, August 09, 2017 - MAMERTO DY, Petitioner, v. MARIA LOURDES ROSELL that TCT No. T-134753 covering the subject land was issued in Lourdes' name. 5 Mamerto
ALDEA, Respondent. insisted that he never executed any deed of sale in favor of Lourdes and that the signature
appearing on the purported deed of sale was not his authentic signature. 6

For her part, Lourdes countered that in 2004, a certain Mila Labang (Mila)  was introduced to
her by her aunt Luz Aldea (Luz). Mila told her that several parcels of land in Minglanilla,
including the subject land, were purportedly for sale. 7

After she visited the lots in Minglanilla, Lourdes signified her intention to buy the subject
land. Mila informed Lourdes that the subject land was mortgaged to a certain Atty. Lim and
SECOND DIVISION further told her that she should pay the loan secured by the mortgage. Thereafter, Mila
introduced her to Fatima Nadela (Fatima),  who allegedly knew the owner of the subject land
G.R. No. 219500, August 09, 2017 and promised Lourdes that she would prepare the deed of sale. 8

MAMERTO DY, Petitioner, v. MARIA LOURDES ROSELL ALDEA, Respondent. On June 20, 2004, Lourdes met with the person impersonating Mamerto (the impostor)  at a
hotel in Cebu City. She gave the impostor P1,010,700.00 as payment for the 3,369 square
meter-portion of the subject land. Thereafter, they signed the Deed of Sale 9 in the presence
DECISION
of Mila, Fatima and Zenon Aldea (Zenon),  Lourdes' uncle. Afterwards, Lourdes, Fatima and
the impostor went to the office of Atty. Lim to pay the mortgage loan. 10
MENDOZA, J.:
A few weeks thereafter, the impostor called Lourdes and insisted that she should buy the
This is a petition for review on certiorari  seeking to reverse and set aside the January 30, entire land for it would be difficult and expensive to subdivide the same. Lourdes agreed and
2015 Decision1 and July 1, 2015 Resolution 2 of the Court of Appeals (CA) in CA-G.R. CV No. paid an additional P673,800.00. Lourdes and the impostor signed a second deed of sale. For
03974, which nullified the November 18, 2009 Decision 3 of the Regional Trial Court, Branch the 6,738 square meter-property, Lourdes paid an aggregate sum of P1,684,500.00. 11
23, Cebu City (RTC) in Civil Case No. CEB-31689.
After weeks of waiting, Lourdes was informed by Fatima that the impostor was dead and he
The Antecedents had not given any money to process the transfer of the subject land. Lourdes went to the
Office of the Provincial Assessor to process the payment of capital gains tax and the transfer
Petitioner Mamerto Dy (Mamerto) is the owner of Lot 5158 located in Vito, Minglanilla, of title in her name. Eventually, the Register of Deeds issued TCT No. T-134753 under her
Cebu, with an area of 6,738 square meters, and covered by Transfer Certificate of name.12 Consequently, Mamerto filed a complaint for declaration of nullity of deed of sale
Title (TCT) No. T-24849. and TCT No. T-134753, and recovery of real property with injunction and damages.

In June 2005, Mamerto agreed to sell the subject land to his brothers Nelson Dy (Nelson) and The RTC Ruling
Sancho Dy, Jr. (Sancho). He asked them to secure copies of the tax declarations covering the
subject land from the Municipal Assessor's Office. Nelson found out that the subject land had In its November 18, 2009 Decision, the RTC ruled that Mamerto had a better right over the
gone through a series of anomalous transactions. The owner's duplicate copy of TCT No.T- subject land and was the rightful and lawful owner thereof. It found that Mamerto's owner's
24849 was declared lost. As a result, a new owner's duplicate copy of the same TCT was duplicate copy was never lost, and so ruled that the reconstituted title issued in favor of the
issued and the subject land was subsequently mortgaged. impostor was null and void. Hence, the RTC nullified Lourdes' title as it was based on a void
reconstituted title. It further opined that the contract of sale between Lourdes and the
On August 17, 2005, Mamerto, through his lawyer, sent a letter to the Register of Deeds of impostor was null and void because the latter did not have the right to transfer ownership of
Cebu informing the said office that his owner's duplicate copy of TCT No. T-24849 was never the subject land at the time it was delivered to Lourdes.
lost and that he never mortgaged his property to anyone. 4
The trial court held that Lourdes could not be considered a buyer in good faith because she
When Mamerto discovered that the subject land was being fenced upon the instruction of should have been suspicious of the transaction which occurred at a hotel room and without
respondent Maria Lourdes Rosell Aldea (Lourdes),  he immediately filed a complaint against any lawyer present. It noted that Lourdes gave her money to the seller even if the owner's
the latter before the barangay office of Minglanilla. Lourdes, however, failed to attend the copy of the certificate of title was not handed to her; and that she decided to buy the
hearing. A certificate to file action was subsequently issued. remaining portion of the subject land when the price was reduced to P200.00 per square
meter for the flimsy reason that it would be hard for the seller to subdivide the subject land.
On September 16, 2005, Atty. Manolo D. Rubi, Deputy Register of Deeds, informed Nelson
Unconvinced, Lourdes elevated an appeal to the CA. the purchase price was inexpensive.

The CA Ruling In her Comment,13 dated December 18, 2015, Lourdes contends that she is an innocent
purchaser for value; that while it may be true that an impostor had fraudulently acquired a
In its assailed January 30, 2015 Decision, the CA reversed and set aside the RTC ruling. It void reconstituted title over the subject land, such circumstance did not necessarily
declared that Lourdes was an innocent purchaser for value. The appellate court ruled that a invalidate her own title; that a valid transfer could issue from a void reconstituted title if an
person dealing with registered land is only charged with notice of the burdens on the innocent purchaser for value intervenes; and that where innocent third persons rely on the
property which are noted on the face of the register or the certificate of title. It observed correctness of the certificate of title issued and acquire rights over the property, courts
that the only annotation at the back of the title was that it was mortgaged to Audie C. cannot disregard such right and order the total cancellation of the certificate of title for that
Uy (Uy). would impair public confidence in the certificate of title.

The CA added that Lourdes exercised ordinary prudence because during the signing of the
deed of sale, she asked for an identification card and she was given a senior citizen's I.D., In his Reply,14 dated April 8, 2016, Mamerto insists that Lourdes' argument that a spurious
showing that the person she was dealing with was "Mamerto Dy." It stated that while it deed can become the root of a valid title when an innocent purchaser for value comes into
turned out that the I.D. exhibited by the seller was fake and that the person claiming to be the picture is not applicable where the real owner still holds a valid and existing certificate of
the owner of the land was a fraud, Lourdes could not be blamed for believing that she was title; and that Lourdes has met the impostor, thus, she should have inquired further into the
dealing with the real owner of the land. The appellate court held that the confirmation of details of why the title was reconstituted.
Fatima; Engracia Mondrel and Rena Canio, the overseers of the subject land; and Uy, the
named mortgagee lead Lourdes to believe that she was dealing with the rightful owner. The Court's Ruling

Aggrieved, Mamerto moved for reconsideration, but his motion was denied by the CA in its
July 1, 2015 Resolution. The petition is meritorious.

Hence, this petition. When the Owner's Duplicate

Certificate of Title has not been
ISSUES lost, the reconstituted
certificate is void
(1)
WHETHER THE RECONSTITUTED TITLE, FROM WHICH TCT NO. T-134753 IN THE NAME OF The governing law for judicial reconstitution of title is Republic Act (R.A.)  No. 26, Section 15
LOURDES WAS DERIVED, IS VALID. of which provides when reconstitution of a title should be allowed:

(2) Section 15. If the court, after hearing, finds that the documents presented, as supported by
WHETHER LOURDES IS AN INNOCENT PURCHASER FOR VALUE WHO IS ENTITLED TO THE parole evidence or otherwise, are sufficient and proper to warrant the reconstitution of
APPLICATION OF THE MIRROR DOCTRINE. 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
(3) substantially the same as those contained in the lost or destroyed certificate of title, an
WHETHER MAMERTO HAS BETTER RIGHT OVER THE SUBJECT LAND. 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 used as the basis of the reconstitution. If the court finds that there is no sufficient
Mamerto argues that the fact that the title was reconstituted should have urged Lourdes to
evidence or basis to justify the reconstitution, the petition shall be dismissed, but such
conduct further investigation on the identity of the vendor; that even though Fatima, Uy and
dismissal shall not preclude the right of the party or parties entitled thereto to file an
the purported overseers assured Lourdes that the person she was dealing with was the real
application for confirmation of his or their title under the provisions of the Land Registration
owner of the subject land, she should have taken into consideration that these persons might
Act. [Emphases supplied]
have been lying and that a possible syndicated sale might have been planned; that the
impostor did not accompany her when she visited the subject land; that she should have
asked for other documents to establish the identity of the seller; and that the market value of From the foregoing, it appears that the following requisites must be complied with for an
the subject land ranges from P800.00 to P1,000.00, thus, Lourdes should have wondered why order for reconstitution to be issued: (a) that the certificate of title had been lost or
destroyed; (b) that the documents presented by petitioner are sufficient and proper to duplicate copy of TCT No. T-24829 was lost in order to secure a new copy which was
warrant reconstitution of the lost or destroyed certificate of title; (c) that the petitioner is the consequently used to deceive Lourdes into purchasing the subject land. Hence, the fact of
registered owner of the property or had an interest therein; (d) that the certificate of title loss or destruction of the owner's duplicate certificate of title, which is the primordial
was in force at the time it was lost and destroyed; and (e) that the description, area and element in the validity of reconstitution proceedings, is clearly missing. Accordingly, the RTC
boundaries of the property are substantially the same as those contained in the lost or never acquired jurisdiction over the reconstitution proceedings initiated by the impostor, and
destroyed certificate of title. Verily, the reconstitution of a certificate of title denotes its judgment rendered thereafter is null and void. This alone is sufficient to declare the
restoration in the original form and condition of a lost or destroyed instrument attesting the reconstituted title null and void.
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 Only an innocent purchaser for
has been when the loss or destruction occurred. 15 value may invoke the mirror
doctrine

Indubitably, the fact of loss or destruction of the owner's duplicate certificate of title is The real purpose of the Torrens system of registration is to quiet title to land and to put a
crucial in clothing the RTC with jurisdiction over the judicial reconstitution proceedings. stop to any question of legality of the title except claims which have been recorded in the
In Spouses Paulino v. CA,16 the Court reiterated the rule that when the owner's duplicate certificate of title at the time of registration or which may arise subsequent thereto. 18 As a
certificate of title was not actually lost or destroyed, but is in fact in the possession of consequence, the mirror doctrine provides that every person dealing with registered land
another person, the reconstituted title is void because the court that rendered the order of may safely rely on the correctness of the certificate of title issued therefor and is in no way
reconstitution had no jurisdiction over the subject matter of the case, viz.: obliged to go beyond the certificate to determine the condition of the property. 19

As early as the case of Strait Times, Inc. v. CA,  the Court has held that when the owner's Every registered owner and every subsequent purchaser for value in good faith holds the title
duplicate certificate of title has not been lost, but is, in fact, in the possession of another to the property free from all encumbrances except those noted in the certificate. 20 As such, a
person, then the reconstituted certificate is void, because the court that rendered the defective title, or one the procurement of which is tainted with fraud and misrepresentation
decision had no jurisdiction. Reconstitution can be validly made only in case of loss of the — may be the source of a completely legal and valid title, provided that the buyer is an
original certificate. This rule was reiterated in the cases of Villamayor v. Arante, Rexlon Realty innocent third person who, in good faith, relied on the correctness of the certificate of title,
Group, Inc. v. [CA], Eastworld Motor Industries Corporation v. Skunac Corporation, Rodriguez or an innocent purchaser for value.21
v. Lim, Villanueva v. Viloria,  and Camitan v. Fidelity Investment Corporation.  Thus, with
evidence that the original copy of the TCT was not lost during the conflagration that hit the Thus, in order to resolve whether Lourdes holds an indefeasible title to the subject land, it
Quezon City Hall and that the owner's duplicate copy of the title was actually in the becomes necessary to determine whether she is an innocent purchaser for value.
possession of another, the RTC decision was null and void for lack of jurisdiction.

xxx xxx xxx Lourdes cannot be considered a

purchaser in good faith

In reconstitution proceedings, the Court has repeatedly ruled that before jurisdiction over In Nobleza v. Nuega,22 the Court defined an innocent purchaser for value, to wit:
the case can be validly acquired, it is a condition sine qua 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 An innocent purchaser for value is one who buys the property of another, without notice that
in the possession of another person, the reconstituted title is void and the court rendering some other person has a right or interest in the property, for which a full and fair price is paid
the decision has not acquired jurisdiction over the petition for issuance of new title. The by the buyer at the time of the purchase or before receipt of any notice of claims or interest
courts simply have no jurisdiction over petitions by (such) third parties for reconstitution of of some other person in the property. It is the party who claims to be an innocent purchaser
allegedly lost or destroyed titles over lands that are already covered by duly issued subsisting for value who has the burden of proving such assertion, and it is not enough to invoke the
titles in the names of their duly registered owners. The existence of a prior title ipso ordinary presumption of good faith. To successfully invoke and be considered as a buyer in
facto  nullifies the reconstitution proceedings. The proper recourse is to assail directly in a good faith, the presumption is that first and foremost, the "buyer in good faith" must have
proceeding before the regional trial court the validity of the Torrens title already issued to shown prudence and due diligence in the exercise of his/her rights. It presupposes that the
the other person.17 [Emphases supplied and citations omitted] buyer did everything that an ordinary person would do for the protection and defense of
his/her rights and interests against prejudicial or injurious concerns when placed in such a
In this case, Mamerto asserted that he never lost his owner's duplicate copy of TCT No. T- situation. The prudence required of a buyer in good faith is not that of a person with
24829 and that he had always been in possession thereof. Moreover, it is beyond doubt that training in law, but rather that of an average man who 'weighs facts and circumstances
another person impersonated Mamerto and represented before the court that the owner's without resorting to the calibration of our technical rules of evidence of which his
knowledge is nil.' A buyer in good faith does his homework and verifies that the particulars
are in order — such as the title, the parties, the mode of transfer and the provisions in the registration in Lourdes' name
deed/contract of sale, to name a few. To be more specific, such prudence can be shown by
making an ocular inspection of the property, checking the title/ownership with the proper While it is true that under Section 32 of Presidential Decree No. 1529 the decree of
Register of Deeds alongside the payment of taxes therefor, or inquiring into the minutiae registration becomes incontrovertible after a year, it does not altogether deprive an
such as the parameters or lot area, the type of ownership, and the capacity of the seller to aggrieved party of a remedy in law. The acceptability of the Torrens System would be
dispose of the property, which capacity necessarily includes an inquiry into the civil status of impaired, if it is utilized to perpetuate fraud against the real owners. 31
the seller to ensure that if married, marital consent is secured when necessary. In fine, for a
purchaser of a property in the possession of another to be in good faith, he must exercise Furthermore, ownership is not the same as a certificate of title. Registering a piece of land
due diligence, conduct an investigation, and weigh the surrounding facts and circumstances under the Torrens System does not create or vest title, because registration is not a mode of
like what any prudent man in a similar situation would do. 23 [Emphases supplied and citations acquiring ownership.32 A certificate of title is merely an evidence of ownership or title over
omitted] the particular property described therein.33 The indefeasibility of the Torrens title should not
be used as a means to perpetrate fraud against the rightful owner of real property. Good
In the case at bench, Lourdes was deficient in her vigilance as buyer of the subject land. faith must concur with registration, otherwise, registration would be an exercise in futility. A
Torrens title does not furnish a shield for fraud, notwithstanding the long-standing rule that
During cross-examination, Lourdes admitted that she did not conduct a thorough registration is a constructive notice of title binding upon the whole world. The legal principle
investigation and that she merely instructed her uncle to check with the Register of Deeds is that if the registration of the land is fraudulent, the person in whose name the land is
whether the subject land is free from any encumbrance. 24 Further, it must be noted that registered holds it as a mere trustee.34
Lourdes met the seller only during the signing of the two deeds of sale. 25 Yet, she did not call
into question why the seller refused to see her during the negotiation. For sure, an ordinary Hence, the fact that Lourdes was able to secure a title in her name neither operates to vest
prudent buyer of real property who would be relinquishing a significant amount of money ownership upon her of the subject land nor cures the void sale. Accordingly, the Court deems
would want to meet the seller of the property and would exhaust all means to ensure that it proper to restore Mamerto's rights of dominion over Lot 5158.
the seller is the real owner thereof.
WHEREFORE, the January 30, 2015 Decision and July 1, 2015 Resolution of the Court of
Indeed, Lourdes conducted an ocular inspection of the subject land. When she asked Appeals in CA-G.R. CV No. 03974 are REVERSED and SET ASIDE. The November 18, 2009
Engracia Mondrel, the overseer, if she knows the owner, Engracia affirmed that the property Decision of the Regional Trial Court, Branch 23, Cebu City in Civil Case No. CEB-31689 is
is owned by a person named "Mamerto Dy." Noteworthy, however, is Lourdes' admission hereby REINSTATED.
that the seller was not present when she talked to Engracia such that there was no way for
the latter to ascertain whether she and Lourdes were talking about the same Mamerto Dy. 26 SO ORDERED.

Another circumstance indicating that Lourdes was not an innocent purchaser for value was
the gross undervaluation of the property in the deeds of sale at the measly price of 19
Locsin v. Hizon,  G.R. No. 204369, September 17, 2014, 735 SCRA
P1,684,500.00 when the true market value was at least P5,390,400.00 for the entire
property. Moreover, Lourdes initially decided to buy only half of the subject land or 3,369 547, 557.
square meters. When the impostor, however, insisted that she should buy the remaining half
21
just because it would be difficult to divide the subject land, Lourdes readily acceded without Locsin v. Hizon,  supra note 19, at 556.
questioning why the seller was willing to sell at P200.00 per square meter. 27

Certainly, it was not enough for Lourdes to show that the property was unfenced and vacant;
otherwise, it would be too easy for any registered owner to lose his property, including its
possession, through illegal occupation. 28 It was also imprudent for her to simply rely on the
face of the imposter's TCT considering that she was aware that the said TCT was derived from
a duplicate owner's copy reissued by virtue of the alleged loss of the original duplicate
owner's copy.29 That circumstance should have already alerted her to the need to inquire
beyond the face of the impostor's TCT.30

In sum, the Court rules that Lourdes is not an innocent purchaser for value.

Mamerto may recover the

subject land notwithstanding its
 Republic of the Philippines 3. On April 2, 1968, the lower court issued an order setting the petition for hearing on
SUPREME COURT June 14, 1968. The notice of hearing was published in the Official Gazette. Copies
Manila thereof were posted in three conspicuous places in Caloocan City and were furnished
the supposed adjoining owners (53-54, Consolidated Record on Appeal). The
SECOND DIVISION registers of deeds of Caloocan City and Rizal were not served with copies of the
petition and notice of hearing.
G.R. Nos. L-46626-27 December 27, 1979
4. State Prosecutor Enrique A. Cube, as supposed counsel for the Government, did
not oppose the petition. Laborada presented her evidence before the deputy clerk of
REPUBLIC OF THE PHILIPPINES, petitioner-appellant, court. Judge Serafin Salvador in his "decision" dated July 6, 1968 granted the petition.
vs.
COURT OF APPEALS, A & A TORRIJOS ENGINEERING CORPORATION,
FRANCISCA S. BOMBASI, HERCULINO M. DEO, FRUCTUOSA LABORADA and He found that Lot No. 915 was covered by a transfer certificate of title which was not
REGISTER OF DEEDS OF CALOOCAN CITY, respondents-appellees. available and which was issued to Maria Bueza who sold the lot to Laborada. The
transfer certificate of title covering the lot was allegedly destroyed during the war. The
plan and technical description for the lot were approved by the Commissioner of Land
Office of the Solicitor General for petitioner. Registration who recommended favorable action on the petition (pp. 53-56,
Consolidated Record on Appeal).
Gonzalo D. David for respondents.
5. The lower court directed the register of deeds of Caloocan City to reconstitute the
title for Lot No. 915 in the name of Laborada. The order of reconstitution was not
appealed. It became final and executory.
AQUlNO, J.:
6. Acting on the court's directive, the register of deeds issued to Laborada on August
These two cases are about the cancellation and annulment of reconstituted Torrens 14, 1968 Transfer Certificate of Title No. (N.A.) 3-(R) Lot No. 915 was later subdivided
titles whose originals are existing and whose reconstitution was, therefore, uncalled into seven lots, Lots Nos. 915-A to 915-G. The Acting Commissioner of Land
for. Registration approved the subdivision plan. The register of deeds cancelled TCT No.
(N.A.) 3-(R) and issued on October 15, 1968 seven titles to Laborada, namely, TCT
Nos. 30257 to 30263 (pp. 56-59, 61-83, Consolidated Record on Appeal).
1. Lots Nos. 915 and 918 of the Tala Estate, with areas of more than twenty-five and
twenty-four hectares, respectively, located at Novaliches, Caloocan, now Quezon
City, are registered in the name of the Commonwealth of the Philippines, as shown in 7. In another and later case, Civil Case No. C-763 of the lower court, one Francisco
Transfer Certificates of Title Nos. 34594 and 34596 of the Registry of Deeds of Rizal S. Bombast, single, residing at 2021 San Marcelino Street, Malate, Manila filed in the
both dated April 30, 1938. lower court a petition dated November 16, 1967 for the reconstitution of the title of
another lot, the aforementioned Lot No. 918.

The originals of those titles are on file in the registry of deeds in Pasig, Rizal. They
were not destroyed during the war. Even the originals of the preceding cancelled titles She could not specify the number of the title. She alleged that the title was "N.A" or
for those two lots, namely, Transfer Certificates of Title Nos. 15832 and 15834 in the not available. She claimed to be the owner of the lot and that the title covering it was
name of the Philippine Trust Company, are intact in the registry of deeds. destroyed during the war. Like the first petition, the second petition was sworn to on
the same date, November 16, 1967, before Manila notary Domingo P. Aquino. Why it
was not filed simultaneously with Laborada's petition was not explained. (17-21,
2. The reconstitution proceeding started when Fructuosa Laborada, a widow residing Consolidated Record on Appeal.)
at 1665 Interior 12 Dart Street, Paco, Manila, filed in the Court of First Instance of
Rizal at Caloocan City a petition dated November, 1967 for the reconstitution of the
title covering the above-mentioned Lot No. 915. She alleged that she was the owner 8. The lower court set the second petition for hearing on January 31, 1969. As in
of the lot and that the title covering it, the number of which she could not specify, was Laborada's petition, the notice of hearing for Bombast's petition was published in the
"N.A." or not available (Civil Case No. C-677). The petition was sworn to on Official Gazette. It was posted in three conspicuous places in Caloocan City and
November 16, 1967 before Manila notary Domingo P. Aquino (48-52, Consolidated copies thereof were sent to the supposed adjoining owners (22, Consolidated Record
Record on Appeal). on Appeal). But no copies of the petition and notice of hearing were served upon the
registers of deeds of Caloocan City and Rizal, the officials who would be interested in
the reconstitution of the supposed lost title and who could certify whether the original
of the title was really missing.
9. Bombast's petition was assigned also to Judge Salvador. It was not opposed by the Judge Salvador further held that the titles, whose reconstitution he had ordered
government lawyers, Enrique A. Cube and Conrado de Leon, Judge Salvador in his allegedly in conformity with law, could not be attacked collaterally and, therefore, "the
order of April 3, 1969 granted the petition. reconstituted titles and their derivatives have the same validity, force and effect as the
originals before the reconstitution" (pp. 160-161, Consolidated Record on Appeal).
The court found from the evidence that the allegedly missing or "not available" title The State appealed.
was issued to Regino Gollez who sold the land to petitioner Bombast. The owner's
duplicate of Gollez's title was supposedly destroyed during the war. Taxes were paid 15. The Court of Appeals, in affirming the lower court's judgment, held that the orders
for that land by Gollez and Bombast. The technical description of the land the plan of reconstitution dated July 6, 1968 and April 3, 1969 could no longer be set aside on
were approved by the Commissioner of Land Registration who submitted a report May 26, 1970, when the petitions for annulment and cancellation of the reconstituted
recommending the reconstitution of the title (pp. 22-25, Consolidated Record on titles were filed, and that if there were irregularities in the reconstitution, then, as
Appeal). between two innocent parties, the State, as the party that made possible the
reconstitution, should suffer the loss. The Court of Appeals cited section 101 of Act
10. The lower court ordered the register of deeds to reconstitute the missing title of 496 to support its view that a registered owner may lose his land "by the registration
Lot No. 918 in the name of Bombast. Acting on that directive, the register of deeds of any other person as owner of such land".
issued to Bombast Transfer Certificate of Title No. N.A. 4(R) dated August 27,
1969(pp. 24-27, Consolidated Record on Appeal). The State appealed to this Court. We hold that the appeal is justified. The Appellate
Court and the trial court grievously erred in sustaining the validity of the reconstituted
11. On March 25, 1969 or five months before the issuance of the reconstituted title, titles which, although issued with judicial sanction, are no better than spurious and
Francisca Bombast, now Identified as single (not widow) and a resident of forged titles.
1665 Interior 12 Dart Street Paco, Manila, which was the same address used by
Fructuosa Laborada (Bombast used first the address 2021 San Marcelino Street) sold In all candor, it should be stated that the reconstitution proceedings, Civil Cases Nos.
Lot No. 918 to Herculano M. Deo allegedly for P249,880. Transfer Certificate of Title C-677 and C-763, were simply devices employed by petitioners Laborada and
No. 34146R was issued to Deo. Bombast for landgrabbing or for the usurpation and illegal appropriation of fifty
hectares of State-owned urban land with considerable value.
On October 28, 1969, Deo sold the lot to A & A Torrijos Engineering Corporation
allegedly for P250,000. Transfer Certificate of Title No. 34147-R was issued to the The crucial and decisive fact, to which no importance was attached by the lower court
corporation (pp. 10-11, 29-34, Consolidated Record on Appeal). and the Fifth Division of the Court of Appeals (Reyes, L.B., Domondon and Ericta,
JJ.), is that two valid and existing Torrens titles in the name of the Commonwealth of
12. On May 25 and 26, 1970, the State filed two petitions for the cancellation and the Philippines were needlessly reconstituted in the names of Laborada and Bombast
annulment of the reconstituted titles and the titles issued subsequent thereto (Civil on the false or perjurious assumption that the two titles were destroyed during the
Cases Nos. 1784 and 1785). Judge Salvador, who had ordered the reconstitution of war.
the titles and to whom the two cases for cancellation were assigned, issued on June
5, 1970 restraining orders enjoining the register of deeds, city engineer and That kind of reconstitution was a brazen and monstrous fraud foisted on the courts of
Commissioner of Land Registration from accepting or recording any transaction justice. It was a stultification of the judicial process. One and the same judge (1)
regarding Lots Nos. 915 and 918. allowed the reconstitution and then (2) decided the two subsequent cases for the
cancellation and annulment of the wrongfully reconstituted titles.
13. The respondents in the two cases, through a common lawyer, filed separate
answers containing mere denials. The Commissioner of Land Registration filed pro The existence of the two titles of the Government for Lots Nos. 915 and 918 ipso
forma answers wherein he interposed no objection to the issuance of the preliminary facto nullified the reconstitution proceedings and signified that the evidence in the
injunction sought by the State. After a joint trial of the two cases, respondents said proceedings as to the alleged ownership of Laborada and Bombast cannot be
corporation and Laborada filed amended answers wherein they pleaded the defense given any credence. The two proceedings were sham and deceitful and were filed in
that they were purchasers in good faith and for value. bad faith. Such humbuggery or imposture cannot be countenanced and cannot be the
source of legitimate rights and benefits.
14. On June 22, 1972, Judge Salvador (who did not bother to inhibit himself)
rendered a decision in the two cases holding that the State's evidence was insufficient Republic Act No. 26 provides for a special procedure for the reconstitution of Torrens
to establish its ownership and possession of Lots Nos. 915 and 918 and that certificates of title that are missing and not fictitious titles or titles which are existing. It
Laborada and A & A Torrijos Engineering Corporation were purchasers in good faith is a patent absurdity to reconstitute existing certificates of title that are on file and
and for value and, consequently, their titles are not cancellable and annullable. available in the registry of deeds. The reconstitution proceedings in Civil Cases Nos.
C-677 and C- 763 are void because they are contrary to Republic Act No. 26 and
beyond the purview of that law since the titles reconstituted are actually subsisting in
the registry of deeds and do not require reconstitution at all. As a rule, acts executed
against the provisions of mandatory laws are void (Art. 5, Civil Code).

To sustain the validity of the reconstituted titles in these cases would be to allow
Republic Act No. 26 to be utilized as an instrument for landgrabbing (See Republic vs.
Court of Appeals, Ocampo and Anglo, L-31303-04, May 31, 1978, 83 SCRA 453,
480, per J. G.S. Santos) or to sanction fraudulent machinations for depriving a
registered owner of his land, to undermine the stability and security of Torrens titles
and to impair the Torrens system of registration. The theory of A & A Torrijos
Engineering Corporation that it was a purchaser in good faith and for value is
indefensible because the title of the lot which it purchased unmistakably shows that
such title was reconstituted. That circumstance should have alerted its officers to
make the necessary investigation in the registry of deeds of Caloocan City and Rizal
where they could have found that Lot 918 is owned by the State.

WHEREFORE, the decisions of the Court of Appeals and the trial court are reversed
and set aside. The reconstitution proceedings in Civil Cases Nos. C-677 and C-763
are declared void and are set aside. The reconstituted titles, Transfer Certificates of
Title Nos. N.A. 3-(R) and N.A. 4-(R) and Transfer Certificates of Title Nos. 34146-R,
34147-R and 30257 to 30263 and the survey plans and subdivision plan connected
therewith are likewise declared void. The register of deeds is directed to cancel the
said titles.

The Republic of the Philippines, as the successor of the Commonwealth of the

Philippines, is hereby declared the registered owner of Lots 915 and 918 of the Tala
Estate, as shown in Transfer Certificates of Title Nos. 34594 and 34596 of the registry
of deeds of Rizal. Costs against the private respondents-appellees.

SO ORDERED.

Concepcion, Jr. and Santos, JJ., concur.

Antonio, J., took no part.

 
 sea god Poseidon and the Earth goddess Gaea renewed his strength in combat with
Heracles by continually touching the earth. When his opponent discovered the
source of his strength, the former lifted the latter up from earth and crushed him to
death. 1

In the case at bar, it appears that an impostor succeeded in selling property lawfully
titled in another’s name by misrepresenting himself as the latter.
SECOND DIVISION
The petition before us involves two issues: whether or not petitioner Juan Sandoval
[G.R. No. 106657. August 1, 1996.] is a purchaser in good faith and whether or not the Justice who penned the assailed
decision in the Court of Appeals should have inhibited himself from taking part in
JUAN C. SANDOVAL, now deceased, represented by his surviving spouse, the case.
ADELAIDA M. SANDOVAL, Petitioner, v. HON. COURT OF APPEALS and
LORENZO L. TAN, JR., Respondent. The property subject of the present controversy is a parcel of land on which a five-
door apartment building stands. It is covered by Transfer Certificate of Title (TCT)
No. 196518 in the name of "Lorenzo L. Tan, Jr. married to Carolina Mangampo" and
located at No. 88 Halcon Street, Quezon City.

DECISION Sometime in October 1984, private respondent Lorenzo L. Tan, Jr. was notified of
the need to present his owner’s copy of the TCT to the Registry of Deeds, Quezon
City in connection with an adverse claim. Upon reaching the Office of the Register of
ROMERO, J.: Deeds, he explained that he was still looking for his copy of the TCT. 2 In November
1984, he discovered that the adverse claim of one Godofredo Valmeo had been
annotated on his title in the Registry of Deeds. A Lorenzo L. Tan, Jr., obviously an
impostor, had mortgaged the property to Valmeo on October 9, 1984 to secure a
Another dispute over land ownership rivets the attention of this Court even as it still
P70,000.00 obligation.
grapples with similar issues involving fantastically vast tracts of land considered
prime real estate in Metro Manila.
On December 6, 1984, the real Lorenzo L. Tan, Jr. herein private respondent, filed a
complaint for cancellation of the annotation of mortgage and damages against
That unscrupulous elements have been sparing neither energy nor resources to
Bienvenido Almeda and Godofredo Valmeo before the Regional Trial Court of Quezon
divert coveted properties from their actual owners through craft and cabal with land
City, Branch 96. 3
officials concerned has not been lost on this Court and has, in fact, made its task
doubly difficult and complicated.
Sometime in April 1985, private respondent met petitioner Juan C. Sandoval who
claimed to be the new owner at the site of the property. He informed the latter of
In recognition of these developments that have placed under a cloud the integrity of
the case against Bienvenido Almeda and Godofredo Valmeo. Upon further
the once unassailable Torrens Title, spawned the proliferation of fake land titles and
investigation, petitioner discovered that as early as September 13, 1984, someone
encouraged the mushrooming of land grabbers and squatters on legitimately-titled
purporting to be Lorenzo L. Tan, Jr. sold the property to Bienvenido Almeda in a
lands, Chief Justice Andres R. Narvasa issued on July 15, this year, Administrative
Deed of Sale of Registered Land with Pacto de Retro.
Circular No. 7-96 addressed to all judges of all court levels and their Clerks of Court
enjoining the strict observance of Land Registration Authority (LRA) circulars on
Said person representing himself as Lorenzo L. Tan, Jr., with the marital consent of
reconstitution and land registration cases.
the alleged Carolina Mangampo Tan, also executed a Waiver in favor of Bienvenido
Almeda on January 11, 1985. Consequently, TCT No. 196518 in the name of
As an agrarian country with a substantial percentage of its population engaged in
Lorenzo L. Tan, Jr. was canceled and a new one, TCT No. 326781, was issued in the
agriculture and allied occupations, the Philippines is understandably concerned over
name of Bienvenido Almeda.
the fate of large and small landholders. Since pre-Spanish times, land has been
recognized as the source of economic and political power. At the time the Spaniards
On March 29, 1985, Bienvenido Almeda sold the subject property to petitioner Juan
took over the sovereignty of the Philippines, it rewarded its loyal subjects with
C. Sandoval for P230,000.00. TCT No. 326781 was canceled and TCT No. 329487
grants of large encomiendas whose metes and bounds were only circumscribed by
was issued in favor of Juan C. Sandoval on April 18, 1985.
the endurance of a horse running from sunup to sundown. Conversely, some of
those who did not show loyalty to the Church and the Crown were persecuted and
Private respondent’s original complaint was accordingly amended in August 1985 to
divested of their lands, most notable example being the family of the national hero,
implead petitioner Juan C. Sandoval and to add the following as causes of action:
Dr. Jose Rizal.
the nullification of the deed of sale with pacto de retro, the waiver and the
cancellation of TCT Nos. 326781 and 329487 in the Quezon City Registry of Deeds.
In a mystical sense, the Filipinos draw strength and power from the soil. Not only in
Private respondent alleged that petitioner had prior knowledge of legal flaws which
this attitude peculiar to the Philippines but in Greek mythology, Antaeus, son of the
tainted Bienvenido Almeda’s title.
 petitioner’s suspicion as to impel him to conduct further inquiry into his vendor’s
It was only on January 16, 1986 that private respondent caused the annotation of a title.
notice of lis pendens on TCT No. 329487. 4
Hence, this petition for review where Juan C. Sandoval prays for the reversal of the
Petitioner, as defendant below, countered that he was a purchaser in good faith and Court of Appeals decision. Two issues are presented for resolution. First, petitioner
for valuable consideration. He bought the property through real estate brokers contends that he was denied due process when the ponente of the decision in the
whom he contacted after seeing the property advertised in the March 3, 1985 issue Court of Appeals, Justice Luis Victor, did not inhibit himself from the case inasmuch
of the Manila Bulletin. After guarantees were given by the brokers and his lawyer’s as he was, for a time, the presiding judge in the court a quo trying the case.
go-signal to purchase the property, petitioner negotiated with Bienvenido Almeda. Second, petitioner maintains that he is an innocent purchaser for value who should
The price, reduced to P230,000, was paid in two installments. As earlier noted, not be held accountable for the fraud committed against private respondent Tan, Jr.
Bienvenido Almeda executed a Deed of Sale in favor of petitioner and a new TCT
was issued in the latter’s name. As regards the first issue on the inhibition of Justice Luis Victor, we examine the
objective norms set forth by the Court.
The trial court ruled in favor of private respondent Tan, Jr. The dispositive portion of
the lower court’s decision dated February 22, 1991 reads: jgc:chanrobles.com.ph Rule 137 of the Revised Rules of Court, Section 1 reads: jgc:chanrobles.com.ph

"WHEREFORE, judgment is hereby rendered: chanrob1es virtual 1aw library "SECTION 1. Disqualification of judges. — No judge or judicial officer shall sit in any
case in which he, or his wife or child, is pecuniarily interested as heir, legatee,
1. Declaring plaintiffs Lorenzo L. Tan, Jr. and Carolina Mangampo Tan as the creditor or otherwise, or in which he is related to either party within the sixth
absolute and exclusive owners of the property known as and situated at No. 88 degree of consanguinity or affinity, or to counsel within the fourth degree, computed
Halcon Street, Quezon City, Metro Manila, originally registered in their names under according to the rules of the civil law, or in which he has been executor,
TCT No. 196518 of the Register of Deeds of Quezon City, together with its administrator, guardian, trustee or counsel, or in which he has presided in any
improvements; inferior court when his ruling or decision is the subject of review, without the written
consent of all parties in interest, signed by them and entered upon the record.
2. Declaring as null and void and of no legal effect the deed of real estate mortgage
(Exh. A) dated October 9, 1984 in favor of defendant Godofredo Valmeo; the deed A judge may, in the exercise of his sound discretion, disqualify himself from sitting
of sale of registered land with pacto de retro (Exh. B) dated September 13, 1984 in in a case, for just or valid reasons other than those mentioned above." (Emphasis
favor of Bienvenido Almeda; and the waiver (Exh. C) dated January 11, 1985 in supplied.)
favor of Bienvenido Almeda;
The Code of Judicial Conduct, which was promulgated on September 5, 1989 and
3. Commanding defendant Juan C. Sandoval to reconvey to the plaintiffs the made effective October 20, 1989, spells out in Rule 3.12 the disqualifications of a
property described under TCT 329487 of the Register of Deeds of Quezon City and judge:jgc:chanrobles.com.ph

the improvements thereon within fifteen (15) days from finality of this decision;
"Rule 3.12. — A judge should take no part in a proceeding where the judge’s
4. Directing defendant Bienvenido Almeda to pay to defendant Juan C. Sandoval the impartiality might reasonably be questioned. These cases include, among others,
amount of P230,000.00 plus interest of twelve percent (12%) per annum from the proceedings where: chanrob1es virtual 1aw library

filing of the Crossclaim until full payment; and

(a) the judge has personal knowledge of disputed evidentiary facts concerning the
5. Ordering the defendants to pay to the plaintiffs the sum of P50,000.00 as proceeding;
nominal damages, P15,000.00 as and for attorney’s fees; and the costs of suit.
(b) the judge served as executor, administrator, guardian, trustee or lawyer in the
SO ORDERED." 5 case or matters in controversy, or a former associate of the judge served as counsel
during their association, or the judge or lawyer was a material witness therein;
Only Juan C. Sandoval, herein petitioner, appealed the aforequoted adverse
decision. Respondent Court of Appeals reduced appellant’s sixteen assignment of (c) the judge’s ruling in a lower court is the subject of review;
errors to two basic issues: the validity of the Deed of Real Estate Mortgage executed
on October 9, 1984 in favor of Godofredo Valmeo and the Deed of Sale of (d) the judge is related by consanguinity or affinity to a party litigant within the
Registered Land with Pacto de Retro dated September 13, 1984 in favor of sixth degree or to counsel within the fourth degree;
Bienvenido Almeda and whether or not Juan C. Sandoval is a purchaser in good
faith. (e) the judge knows that the judge’s spouse or child has a financial interest, as heir,
legatee, creditor, fiduciary or otherwise, in the subject matter in controversy or in a
The Court of Appeals, in its decision rendered on May 26, 1992, 6 affirmed the trial party to the proceeding, or any other interest that could be substantially affected by
court’s findings modifying only the award for damages and attorney’s fees. 7 the outcome of the proceeding.
Respondent court confirmed the invalidity of the aforementioned documents and
held that the circumstances outlined by the trial court should have so aroused In every instance the judge shall indicate the legal reason for inhibition." cralaw virtua1aw library
 deed of sale from the fake Lorenzo L. Tan, Jr. to Bienvenido Almeda is a forged
The Canons of Judicial Ethics 8 provides us with more general guidelines: jgc:chanrobles.com.ph instrument which, being a nullity, conveys no title 12 still a forged deed can be the
basis of a valid title. The Court has held that a fraudulent or forged document of
"3. Avoidance of appearance of impropriety sale may give rise to a valid title if the certificate of title has already been
transferred from the name of the true owner to the name indicated by the forger
A judge’s official conduct should be free from the appearance of impropriety, and his and while it remained as such, the land was subsequently sold to an innocent
personal behavior, not only upon the bench and in the performance of judicial purchaser. 13 Unquestionably, the vendee had the right to rely upon the certificate
duties, but also in his every day life, should be beyond reproach. of title. 14

x       x       x It is settled doctrine that one who deals with property registered under the Torrens
system need not go beyond the same, but only has to rely on the title. 15 He is
charged with notice only of such burdens and claims as are annotated on the title.
31. A summary of judicial obligations 16

A judge’s conduct should be above reproach and in the discharge of his judicial The aforesaid principle admits of an unchallenged exception: that a person dealing
duties he should be conscientious, studious, thorough, courteous, patient, punctual, with registered land has a right to rely on the Torrens certificate of title and to
just, impartial, fearless of public clamour, and regardless of private influence should dispense with the need of inquiring further except when the party has actual
administer justice according to law and should deal with the patronage of the knowledge of facts and circumstances that would impel a reasonably cautious man
position as a public trust; and he should not allow outside matters or his private to make such inquiry 17 or when the purchaser has knowledge of a defect or the
interests to interfere with the prompt and proper performance of his office." cralaw virtua1aw library
lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to
inquire into the status of the title of the property in litigation. 18 The presence of
From the foregoing legal principles, we find no basis for Justice Victor to inhibit anything which excites or arouses suspicion should then prompt to vendee to look
himself from deciding the case. To be sure, as trial court judge, he presided partly beyond the certificate and investigate the title of the vendor appearing on the face
over the case below, heard part of plaintiff’s evidence and ruled on motions. 9 The of said certificate. 19 One who falls within the exception can neither be
decision itself, however, was penned by another judge, the Honorable Lucas denominated an innocent purchaser for value nor a purchaser in good faith; and
Bersamin, who took over as presiding judge when then Judge Luis Victor was hence does not merit the protection of the law.
promoted. Upon elevation to the Court of Appeals, the case was assigned to Justice
Victor as ponente. Section 44 of Presidential Decree No. 1529, 20 in support of the aforementioned
principles, provide: jgc:chanrobles.com.ph

The principle that approximates the situation obtaining herein is the disqualification
of a judge from deciding a case where his "ruling in a lower court is the subject of "SECTION 44. Statutory liens affecting title. — Every registered owner receiving a
review" or "in which he has presided in any inferior court when his ruling or decision certificate of title in pursuance of a decree of registration, and every subsequent
is the subject of review." Granted that Justice Victor presided partly over the case in purchaser of registered land taking a certificate of title for value and in good faith,
the court a quo, his was not the pen that finally rendered the decision therein. shall hold the same free from all encumbrances except those noted on said
Hence, he cannot be said to have been placed in a position where he had to review certificate and any of the following encumbrances which may be subsisting,
his own decision as judge in the trial court. Accordingly, he was not legally bound to namely: chanrob1es virtual 1aw library

inhibit himself from the case.

First. Liens, claims or rights arising or existing under the laws and Constitution of
Nevertheless, Justice Victor should have been more prudent and circumspect and the Philippines which are not by law required to appear of record in the Registry of
declined to take on the case, owing to his earlier involvement in the case. The Court Deeds in order to be valid against subsequent purchasers or encumbrances of
has held that a judge should not handle a case in which he might be perceived, record.
rightly or wrongly, to be susceptible to bias and partiality, 10 which axiom is
intended to preserve and promote public confidence in the integrity and respect for Second. Unpaid real estate taxes levied and assessed within two years immediately
the judiciary. 11 While he is not legally required to decline from taking part in the preceding the acquisition of any right over the land by an innocent purchaser for
case, it is our considered view that his active participation in the case below value, without prejudice to the right of the government to collect taxes payable
constitutes a "just or valid reason," under Section 1 of Rule 137 for him to before that period from the delinquent taxpayer alone.
voluntarily inhibit himself from the case.
Third. Any public highway or private way established or recognized by law, or any
The second and more substantial question in the instant petition is whether or not government irrigation canal or lateral thereof, if the certificate of title does not state
Juan Sandoval, herein petitioner, is a purchaser in good faith or an innocent that the boundaries of such highway or irrigation canal or lateral thereof have been
purchaser for value. determined.

A finding that petitioner is a purchaser in good faith will inevitably be followed by a Fourth. Any disposition of the property or limitation on the use thereof by virtue of,
declaration that, as such, he is the rightful owner of the property in question. For or pursuant to, Presidential Decree No. 27 or any other law or regulations on
even granting, as held by both the trial and respondent appellate courts, that the agrarian reform." cralaw virtua1aw library
A purchaser in good faith is one who buys property of another, without notice that Fourthly, Sandoval could have unavoidably noticed the several but varying
some other person has a right to, or interest in, such property and pays a full and addresses of Almeda which were suspicious, to say the least. It was expected of him
fair price for the same, at the time of such purchase, or before he has notice of the to have thereby been alerted to the questionability of Almeda’s title on the property.
claim or interest of some other persons in the property. 21 He buys the property As such, he is now to be deeded to have had actual notice of the defects in Almeda’s
with the belief that the person from whom he receives the thing was the owner and title, which is antithetical to his pretended good faith.
could convey title to the property. 22 A purchaser cannot close his eyes to facts
which should put a reasonable man on his guard and still claim he acted in good And, lastly, the certification appearing on the deed of sale (Exh. D) that the
faith. 23 property was not tenanted was plainly untrue. The making of the untruthful
certification, the contrary to which was something well-known to Almeda and
The Court, after an exhaustive examination and review of the evidence of record, Sandoval, betrayed an awareness of their part of flaws in the transaction. As parties
affirms the trial and appellate courts’ findings that the petitioner is not a purchaser interested in the transaction, they should not have permitted such falsehood to taint
in good faith. the instrument.

Respondent Court of Appeals rejected petitioner’s claim of being a purchaser in The conclusion has become inexorable that Sandoval had actual knowledge of
good faith and adopted the trial court’s explanation to the effect that: jgc:chanrobles.com.ph plaintiff’s ownership of the property in question. Sandoval, however, must be paid
back by Almeda the sum of P230,000.00." 24
"Even if Sandoval acquired the property after it was advertised for sale in the
Bulletin issue of March 3, 1985, the Court strongly doubts his claim of good faith. It has been well-settled that absent any circumstance requiring the overturning of
There are circumstances extant in the records of the case which belie Sandoval’s the factual conclusions made by the trial court, particularly if affirmed by the Court
defense. In the first place, it was testified to by Viterbo Cahilig of the Office of the of Appeals, this Court necessarily upholds said findings of fact. None of the
Register of Deeds of Quezon City (tsn, Jan. 15, 1987) that there were two copies of exceptions to the affirmation of factual findings, as previously noted in Chua Tiong
TCT No. 196518 in the Register of Deeds, only one of which could be genuine. This Tay v. Honorable Court of Appeals, 25 is present in the case at bar. Moreover, a
apparently came about following the loss of the owner’s copy of said TCT from its study of the case records reveals that the factual conclusions of the court a quo are
usual place of safekeeping by plaintiff Tan when a forged copy was made. One copy firmly grounded on the evidence presented during the trial.
was used to inveigle Valmeo while the other was used by the mysterious Almeda.
The two copies of the TCT soon found their way to the Registry of Deeds. By the On balance, the Court is of the view that petitioner is not a purchaser in good faith
time that the sale to Sandoval was being negotiated, therefore, the two copies of since he should have been aware of his vendor’s fraudulent or forged title.
TCT No. 196518 were already in the files of the Register of Deeds. Since Sandoval’s Accordingly, he is ordered to reconvey subject property with its improvements to
lawyer apparently made a verification at the Register of Deeds, it was inevitable for private respondent who was deprived of his property through subterfuge and
him to come across the two copies. Sandoval was thus aware in fact of the without any fault on this part. Whatever damage and injury has resulted will have to
irregularity attending TCT No. 196518 and its derivative certificates. be borne by petitioner and his co-defendants below, Bienvenido Almeda and
Godofredo Valmeo.
Secondly, the Court finds to be unconvincing and improbable Sandoval’s testimony
that he actually met with Almeda at the latter’s residence in Mandaluyong, Metro WHEREFORE, the instant petition for review is hereby DENIED. The decision of the
Manila prior to the execution of the deed of sale, in light of the fact that such deed Court of Appeals in "Lorenzo L. Tan, Jr. v. Bienvenido Almeda," (CA G.R. CV No.
of sale, Exhibit D, contained the erroneous address of Almeda, i.e., 776 S. Street, 33265) is AFFIRMED.
Mandaluyong, Metro Manila (Exh. D-1 and D-1-A). The explanation of the error, that
such detail had been merely phoned in, is unacceptable. Having just come from SO ORDERED.
Almeda’s alleged residence to talk about a transaction as important and memorable
as the purchase of realty for substantial consideration, it was not likely that Regalado, Puno, Mendoza and Torres, Jr., JJ., concur.
Sandoval could have been mistaken about the street where his vendor allegedly
resided.

Thirdly, equivocations were obviously committed by Sandoval in his testimony,

which, taken together, tended to render improbable Sandoval’s claim of good faith.
Testifying on August 7, 1987, Sandoval claimed to have met Almeda to talk about
the price (tsn, pp. 6-7); yet, in his cross-examination by plaintiff on September 11,
1987, Sandoval admitted that he had never really met Almeda in person (p. 4); a
few minutes later on, on redirect examination, Sandoval clarified that he had also
met Almeda in the property (Sept. 11, 1987, p. 13), only to vary this testimony on
re-cross examination by stating that he did see Almeda in the apartment but was
not able to talk to him (ibid, p. 15). The lack of consistency in Sandoval’s
enumeration and recollection of his alleged meetings with Almeda warrants disbelief
in and inspires doubt of Sandoval’s claim.
 The plaintiff alleged that, being the owner of x x x Lot No. 1253-B, under TCT No. T-
16694, by virtue of the sale that took place on May 12, 1986, he is entitled to ask for
the surrender of the owner’s copy of TCT No. T-16694 to the Register of Deeds of
Antique in order to effect the transfer of title to the name of the petitioner. However, as
per motion of both counsels[,] since the parties seemed to have already reached an
amicable settlement without the knowledge of their counsels, the trial court issued an
Order dated March 21, 1994 sending the case to the archives.

On September 21, 1988, [GABINO JR.] paid real estate taxes on the land he bought
from LORETO as per Tax Declaration No. 1038 where the property was specified as
SECOND DIVISION
Lot No. 1253-B. GABINO JR. thereafter sold the same lot to Wilfredo Vagilidad
(hereafter WILFREDO) as per Deed of Absolute Sale dated December 7, 1989. On
G.R. No. 161136             November 16, 2006 even date, Deed of Absolute Sale of a Portion of Land involving the opt-described
property was also executed by LORETO in favor of WILFREDO. The aforementioned
WILFREDO T. VAGILIDAD and LOLITA A. VAGILIDAD, Petitioners, deeds, which were both executed on December 7, 1989 [and] notarized by Atty.
vs. Warloo Cardenal[,] [appear] to have been given the same entry number in his notarial
GABINO VAGILIDAD, Jr. and DOROTHY VAGILIDAD, Respondents. books as both contained the designation "Document No. 236, Page No. 49, Book No.
XI, Series of 1989[."]
DECISION
Corollarily, on February 14, 1990, the sale of Lot No. 1253-B to WILFREDO was
registered with the Registry of Deeds of the Province of Antique under Entry No.
PUNO, J.:
180425. Consequently, TCT No. T-18023, cancelling TCT No. 16694, was issued in
favor of WILFREDO pursuant to the Deed of Absolute Sale dated December 7, 1989.
This is a Petition for Review on Certiorari of the Decision1 and Resolution2 of the
Court of Appeals in CA-G.R. No. CV-68318 dated March 19, 2003 and November 13,
On October 24, 1991, spouses WILFREDO and LOLITA obtained a loan from the
2003, respectively, reversing and setting aside the decision of the Regional Trial
Philippine National Bank (PNB for brevity) in the amount of ₱150,000.00 and
Court of Antique, Sixth Judicial Region, Branch II, in Civil Case No. 2825 dated
mortgaged Lot No. 1253-B as collateral of the said loan and the transaction was
January 26, 1999.
inscribed at the back of TCT No. 18023 as Entry No. 186876. Subsequently, the xxx
real estate mortgage was cancelled under Entry No. 191053 as per inscription dated
The facts are stated in the assailed Decision3 of the appellate court, viz.: November 17, 1992 in xxx TCT No. 18023.

A parcel of land, Lot No. 1253, situated in Atabay, San Jose, Antique, measuring Subsequently, WILFREDO obtained another loan from Development Bank of the
4,280 square meters, was owned by Zoilo [Labiao] (hereafter ZOILO) as per Original Philippines (DBP for brevity) in the amount of ₱200,000.00 and mortgaged Lot No.
Certificate of Title No. RO-2301 issued on March 3, 1931. Sometime in 1931, ZOILO 1253-B as collateral of the xxx loan and the transaction was inscribed at the back of
died. Subsequently, on May 12, 1986, Loreto Labiao (hereafter LORETO), son of TCT No. 18023 as Entry No. 196268. The said loan was paid and, consequently, the
ZOILO, sold to Gabino Vagilidad Jr. (hereafter GABINO JR.) a portion of Lot No. 1253 mortgage was cancelled as Entry No. 202500.
(hereafter Lot 1253-B), measuring 1,604 square meters as evidenced by the Deed of
Absolute Sale executed by LORETO.
On September 29, 1995, spouses GABINO and Ma. Dorothy Vagilidad (hereafter
DOROTHY), as plaintiffs, filed a Complaint for Annulment of Document,
In view of the death of ZOILO, his children, LORETO, Efren Labiao (hereafter Reconveyance and Damages, with the Regional Trial Court of Antique, Sixth Judicial
EFREN) and Priscilla Espanueva (hereafter PRISCILLA) executed an Extrajudicial x x Region, Branch 11, against spouses WILFREDO and Lolita Vagilidad (hereafter
x Settlement of Estate dated January 20, 1987, adjudicating the entire Lot No. 1253, LOLITA), docketed as Civil Case No. 2825. The plaintiffs claimed that they are the
covering 4,280 square meters, to LORETO. On January 29, 1987, Transfer Certificate lawful owners of Lot No. 1253-B which was sold to him by LORETO in 1986. They
of Title (TCT) No. T-16693 was issued in favor of LORETO, EFREN and PRISCILLA, alleged that [GABINO JR.] is a nephew of defendant WILFREDO. They likewise
but on even date, TCT No. T-16693 was cancelled and TCT No. T-16694, covering raised that when GABINO SR. died, defendant WILFREDO requested GABINO JR. to
the said property, was issued in the name of LORETO alone. transfer the ownership of Lot No. 1253-B in defendant WILFREDO’s name for loaning
purposes with the agreement that the land will be returned when the plaintiffs need
On July 31, 1987, GABINO JR., as petitioner, filed a Petition for the Surrender of TCT the same. They added that, pursuant to the mentioned agreement, plaintiff GABINO
No. T-16694, covering Lot No. 1253, with the Regional Trial Court of San Jose City, JR., without the knowledge and consent of his spouse, DOROTHY, executed the
Sixth Judicial Region, against LORETO, docketed as Cadastral Case No. 87-731-A. Deed of Sale dated December 7, 1989 in favor of defendant WILFREDO receiving
nothing as payment therefor. They pointed out that after defendant WILFREDO was GABINO, JR. and DOROTHY filed an appeal with the Court of Appeals. The appellate
able to mortgage the property, plaintiffs demanded the return of the property but the court reversed and set aside the decision of the court a quo, viz.:
defendants refused to return the same. The plaintiffs claimed that the same document
is null and void for want of consideration and the same does not bind the non- WHEREFORE, premises considered, the Decision dated January 26, 1999 of the
consenting spouse. They likewise prayed that the defendant be ordered to pay the Regional Trial Court of Antique, Sixth Judicial Region, Branch 11, in Civil Case No.
plaintiffs not less than ₱100,000.00 as actual and moral damages, ₱10,000.00 as 2825, is hereby REVERSED and SET ASIDE and a new one is entered: (1) declaring
attorney’s fees and ₱5,000.00 as litigation expenses. the Deed of Absolute Sale [of Portion of Land] dated December 7, 1989 executed by
appellee LORETO in favor of appellee WILFREDO null and void; (2) ordering the
For their part, the defendants, on January 15, 1996, filed their Answer, denying the defendants-appellees WILFREDO and LOLITA to reconvey Lot No. 1253-B to
material allegations of the plaintiffs. Defendants claimed that they are the lawful plaintiffs-appellants GABINO, JR. and DOROTHY; and (3) ordering the defendants-
owners of Lot No. 1253-B. They alleged that LORETO, with conformity of his wife, appellees to pay the plaintiffs-appellants ₱100,000.00 as moral damages, ₱10,000.00
sold to them Lot No. 1253 on December 7, 1989 for ₱5,000.00 and the transaction as attorney’s fees and ₱5,000.00 as litigation expenses.7
was registered with the Register of Deeds of the Province of Antique under Entry No.
180425. They added that, subsequently, TCT No. T-18023, covering Lot No. 1253-B, The appellate court ruled that the sale made by LORETO in favor of GABINO, JR. on
was issued in favor of the defendants. Hence, they claimed that the plaintiffs be May 12, 1986 is valid. The rights of LORETO to succession are transmitted from the
directed to pay the defendants ₱200,000.00 as moral damages, ₱50,000.00 as moment of ZOILO’s death in 1931. Thus, when LORETO sold the 1,604-square meter
exemplary damages, ₱20,000.00 as attorney’s fees and ₱30,000.00 for litigation portion of Lot No. 1253 to GABINO JR., he already had the right as co-owner to his
expenses.4 share to Lot No. 1253, even if at that time the property had not yet been partitioned.
Consequently, the sale made by LORETO in favor of WILFREDO on December 7,
The trial court ruled in favor of petitioners WILFREDO and LOLITA and held that 1989 is void because LORETO and FRANCISCA were no longer the owners of Lot
LORETO did not validly convey Lot No. 1253-B to GABINO, JR. on May 12, 1986 No. 1253-B as of that time. The appellate court also held WILFREDO and LOLITA
since at that time, the heirs of ZOILO had not partitioned Lot No. 1253.5 It ruled that liable for moral damages for falsifying the fictitious deeds of sale on December 7,
LORETO could only sell at that time his aliquot share in the inheritance. He could not 1989.
have sold a divided part thereof designated by metes and bounds. Thus, it held that
LORETO remained the owner of the subject lot when he sold it to WILFREDO on WILFREDO and LOLITA moved for reconsideration but the motion was denied in the
December 7, 1989. It further found that there was no proof that WILFREDO knew of questioned Resolution dated November 13, 2003. Hence, this petition for review on
the sale that took place between LORETO and GABINO, JR. on May 12, 1986. The certiorari raising the following errors:
dispositive portion of the decision states:
I
WHEREFORE, in view of the foregoing pronouncements and a preponderance of
evidence, judgment is hereby rendered:
THE HONORABLE COURT OF APPEALS ERRED IN NOT APPLYING
ARTICLE 1349 AND ARTICLE 1460 OF THE NEW CIVIL CODE IN THE
1. FINDING the defendants WILFREDO VAGILIDAD and LOLITA CASE AT BAR.
VAGILIDAD to have duly acquired ownership of Lot No. 1253-B containing
an area of 1,604 square meters, more or less, situated in San Jose, Antique;
II
2. SUSTAINING the validity of Transfer Certificate of Title No. T-18023
covering the subject Lot No. 1253-B and issued in the name of the THE HONORABLE COURT OF APPEALS ERRED IN NOT APPLYING THE
defendant WILFREDO VAGILIDAD, married to the defendant LOLITA PROVISION OF ARTICLE 1544 OF THE NEW CIVIL CODE AND THE
VAGILIDAD; DOCTRINE OF DOUBLE SALE THAT THE BUYER WHO IS IN
POSSESSION OF THE TORRENS TITLE AND HAD THE DEED OF SALE
REGISTERED MUST PREVAIL.
3. DISMISSING the complaint of the plaintiffs GABINO VAGILIDAD, JR. and
MA. DOROTHY VAGILIDAD, as well as the counterclaims of the defendants
WILFREDO VAGILIDAD and LOLITA VAGILIDAD and of the defendants III
LORETO LABIAO and FRANCISCA LABIAO; and
THE HONORABLE COURT OF APPEALS ERRED IN NOT APPLYING
4. PRONOUNCING no cost.6 ARTICLE 1391 OF THE NEW CIVIL CODE AND THE DOCTRINE THAT IN
CASE OF FRAUD, ACTION FOR RECONVEYANCE MUST BE BROUGHT
WITHIN FOUR (4) YEARS FROM THE DISCOVERY OF THE FRAUD.
 IV In the Deed of Absolute Sale of Portion of Land of December 7, 1989 between
LORETO and WILFREDO, the subject parcel is described, viz.:
THE HONORABLE COURT OF APPEALS ERRED IN AWARDING
PRIVATE RESPONDENT MORAL DAMAGES, ATTORNEY’S FEES AND A parcel of land (Lot No. 1253. Ap-06-00271) of the Cadastral Survey of San Jose,
LITIGATION EXPENSES.8 LRC Cad. Rec. No. 936), situated at Atabay, San Jose, Antique. Bounded on the N.
and E. along lines 1-2-3 by lot 1255; San Jose Cadastre; on the S. along line 3-4 by
We deny the petition. Road; on the W. along line 4-5 by Lot 1240; San Jose Cadastre; and on the N. along
line 5-1 by Lot 1254, San Jose Cadastre containing an area of [Four] Thousand Two
Hundred Eighty (4,280) square meters, more or less.
I
of which a portion of land subject of this sale is hereinbelow (sic) particularly
First, petitioners contend that the Deed of Absolute Sale between LORETO and described as follows, to wit:
GABINO, JR. does not have a determinate object. They anchor their claim on the
following discrepancies: (1) the object of the Deed of Absolute Sale between
LORETO and GABINO, JR. is Lot No. 1253 with an area of 1,604 square meters; (2) A portion of Lot No. 1253-B of the Cadastral Survey of San Jose, situated at Atabay,
the object of the Deed of Absolute Sale of Portion of Land between LORETO and San Jose, Antique. Bounded on the North by Lot No. 1254; South by Road; West by
WILFREDO is a portion of Lot No. 1253, known as Lot No. 1253-B, also with an Lot 1253-A; and on the East by Lot No. 1253-C; containing an area of 1,604 square
area of 1,604 square meters;9 (3) the Deed of Absolute Sale between LORETO and meters, more or less.12
GABINO, JR. shows that its object, Lot No. 1253, is not registered under the Land
Registration Act nor under the Spanish Mortgage Law; and (4) the property subject of The description of Lot No. 1253, the object of the Deed of Absolute Sale, as "not
this action, Lot No. 1253-B, was taken from Lot No. 1253 containing an area of 4,280 registered under Act No. 196[,] otherwise known as the Land Registration Act, nor
square meters previously registered in the name of ZOILO under Original Certificate under the Spanish Mortgage Law"13 is a stray description of the subject parcel. It is
of Title (OCT) No. RO-2301.10 With these discrepancies, petitioners contend that uncorroborated by any evidence in the records. This description solely appears on
either the Deed of Absolute Sale between LORETO and GABINO, JR. does not have the Deed of Absolute Sale and the discrepancy was not explained by LORETO who
a determinate object or that Lot No. 1253-B, the subject parcel, is not the object signed the Deed of Absolute Sale as vendor. LORETO does not, in fact, deny the
thereof. Hence, absent a determinate object, the contract is void. They rely on Articles existence of the Deed of Absolute Sale. He merely counters that the Deed of Absolute
1349 and 1460 of the Civil Code, viz.: Sale was purportedly a mortgage. However, LORETO’s claim that it was one of
mortgage is clearly negated by a Certification14 issued by the Bureau of Internal
Art. 1349. The object of every contract must be determinate, as to its kind. The fact Revenue dated May 12, 1986. It certified that LORETO was not required to pay the
that the quantity is not determinate shall not be an obstacle to the existence of the capital gains tax on the transfer of Lot No. 1253 to GABINO, JR. because the property
contract, provided it is possible to determine the same, without the need of a new was classified as an ordinary asset.
contract between the parties.
To be sure, petitioners could have easily shown that LORETO owned properties other
Art. 1460. A thing is determinate when it is particularly designated or physically than Lot No. 1253 to bolster their claim that the object of the Deed of Absolute Sale
segregated from all others of the same class. was different from Lot No. 1253-B which is the object described in the Deed of
Absolute Sale of Portion of Land. They did not proffer any evidence.
The requisite that a thing be determinate is satisfied if at the time the contract is
entered into, the thing is capable of being made determinate without the necessity of The trial court itself comprehensively traced the origin of Lot No. 1253-B. It clearly
a new or further agreement between the parties. demonstrated that the subject parcel was originally part of the registered lot of ZOILO.
It also showed how the subject parcel was eventually bounded by Lot No. 1253-A on
the West and by Lot No. 1253-C on the East, as the lot would be later described in
Petitioners err. The evidence on record shows that Lot No. 1253-B, the subject parcel, the Deed of Absolute Sale of Portion of Land.
and the lot described as Lot No. 1253 in the Deed of Absolute Sale of May 12, 1986
between LORETO and GABINO, JR., are the same. In the Deed of Absolute Sale, Lot
No. 1253 is described, viz.: The trial court found that ZOILO previously owned Lot No. 1253 under OCT No. RO-
2301 issued on March 3, 1931. On November 14, 1986, Entry No. 167922 was
inscribed in the certificate of title, per Order dated March 30, 1978 of Judge Noli Ma.
A parcel of land (Lot No. 1253 of the Cadastral Survey of San Jose), with the Cortes of the then Court of First Instance of Antique, stating that it was a reconstituted
improvements thereon. Bounded on the North [by] 1254 and 1255; on the South by certificate of title.15 Lot No. 1253 was subdivided by virtue of a subdivision plan dated
road; on the East by 1253 and road on the West by 1240-Angel Salazar; containing June 19, 1987. On January 20, 1987, an Extrajudicial Settlement of Estate executed
an area of 1,604 square meters more or less declared under Tax Declaration No. by LORETO, EFREN and PRISCILLA was entered as Entry No. 170722. The OCT of
4159.11
ZOILO was cancelled by TCT No. T-16693 in the names of LORETO, EFREN and JR. signed the Deed of Absolute Sale. She testified that after GABINO, JR. left,
PRISCILLA on January 29, 1987. TCT No. T-16693 was cancelled on the same day LORETO and his wife FRANCISCA arrived and signed the Deed of Absolute Sale of
by TCT No. T-16694 in the name of LORETO alone. The TCT was partially cancelled Portion of Land.17 The Decision of the court a quo further states, viz.:
by the issuance of TCTs covering Lot Nos. 1253-A, 1253-C and 1253-D. The TCT of
Lot No. 1253-B was issued in the name of WILFREDO married to LOLITA on [Mabuhay testified that when she prepared the two documents, she] noticed the
February 15, 1990. WILFREDO’s TCT No. T-18023 appears to be a transfer from similarity of Lot No. 1253 as technically described in both documents but she did not
LORETO’s TCT No. T-16694. call the attention of Atty. Warlo[o] Cardenal. [She likewise stated that Atty. Cardenal]
specifically instructed her to assign the same document number to the two documents
II notarized on December 7, 1989.18

Next, petitioners contend that the appellate court should have upheld the title of Third, the testimony of Atty. Ernesto Estoya, then Clerk of Court of the Regional Trial
WILFREDO under Article 1544 of the Civil Code and the doctrine of double sale Court of Antique, supports the claim that there was bad faith in the execution of the
where the buyer who is in possession of the Torrens Title must prevail.16 First, Deed of Absolute Sale of Portion of Land. Atty. Estoya brought the notarial record of
petitioners’ title was issued pursuant to the purported Deed of Absolute Sale of Atty. Cardenal for the year 1989 pursuant to a subpoena. He stated that he had not
Portion of Land dated December 7, 1989. Second, WILFREDO did not see any brought both Deeds as required in the subpoena because "Doc. No. 236; Page No.
encumbrance at the back of the title of the subject lot when he purchased it from 49; Book No. XI; Series of 1989" as entered in the notarial register of Atty. Cardenal
LORETO on December 7, 1989. Thus, since he is not bound to go beyond the could not be found in the files. He further explained that the last document on page 48
certificate of title, he has acquired the subject property in due course and in good of the notarial register of Atty. Cardenal is Document No. 235, while the first
faith. document on page 49 is Document No. 239, leaving three unexplained gaps for
document numbers 236, 237 and 238. Atty. Estoya stated that he was not the one
We disagree. Article 1544 of the Civil Code states, viz.: who received the 1989 notarial register of Atty. Cardenal when the latter surrendered
it since he assumed office only in 1994.19
Art. 1544. If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have first taken possession Fourth, we give credence to the testimony of GABINO, JR. that LORETO and
thereof in good faith, if it should be movable property. WILFREDO had employed the scheme to deprive him and his wife of their lawful title
to the subject property. The facts speak for themselves. WILFREDO knew that he
could not use the Deed of Absolute Sale executed in his favor by GABINO, JR.
Should it be immovable property, the ownership shall belong to the person acquiring it because the latter had no title to transfer. Without a title, WILFREDO could not use
who in good faith recorded it in the Registry of Property. the subject property as collateral for a bank loan. Hence, LORETO, who had refused
to surrender the title to GABINO, JR. and in whose name the land remained
Should there be no inscription, the ownership shall pertain to the person who in good registered, had to execute the Deed of Absolute Sale of Portion of Land in favor of
faith was first in the possession; and, in the absence thereof, to the person who WILFREDO. Hence, it was convenient for WILFREDO to deny the existence of the
presents the oldest title, provided there is good faith. Deed of Absolute Sale of December 7, 1989 between him and GABINO, JR. But the
evidence on record shows that after he was able to register the subject property in his
Petitioners’ reliance on Article 1544 is misplaced. While title to the property was name on February 15, 1990, WILFREDO used the title as collateral in the loans that
issued in WILFREDO’s name on February 15, 1990, the following circumstances he contracted with the Philippine National Bank on October 24, 1991 and the
show that he registered the subject parcel with evident bad faith. Development Bank of the Philippines on December 1, 1993. This supports the claim
of GABINO, JR. that WILFREDO needed the lot for loaning purposes.

First, the Deed of Absolute Sale of Portion of Land dated December 7, 1989 between
LORETO and WILFREDO is tainted with blatant irregularities. It is a fact that the With these corroborating circumstances and the following irrefragable documents on
Deed of Absolute Sale of Portion of Land and the Deed of Absolute Sale between record, the evidence preponderates in favor of GABINO, JR. One, he acquired Lot
GABINO, JR. and WILFREDO are of even date. Both Deeds had the same object – No.1253-B from LORETO on May 12, 198620 by virtue of the Deed of Absolute Sale.
Lot No. 1253-B. Both deeds were notarized by Atty. Warloo Cardenal and bear the Two, the Bureau of Internal Revenue issued a Certification, also on May 12, 1986, for
same entry in his notarial register: Document No. 236, Page No. 49, Book No. XI, the exemption from the payment of capital gains tax when LORETO sold to him the
Series of 1989. subject parcel. Three, GABINO, JR. paid the real estate tax on the subject parcel in
1987. Four, he filed a Petition for the Surrender of LORETO’s title on July 31, 1987 so
he could transfer the title of the property in his name.
Second, the testimony of a disinterested witness, Febe Mabuhay, established the
irregularity. Mabuhay used to work as secretary for Atty. Cardenal and co-signed as
witness in both Deeds. She stated that Atty. Cardenal instructed her to prepare the Petitioners likewise err in their argument that the contract of sale between LORETO
two documents in the last week of November 1989. She was present when GABINO, and GABINO, JR. is void on the ground that at the time of the sale on May 12, 1986,
LORETO had a right to dispose only an aliquot part of the yet undivided property of as it may, the co-heirs of LORETO waived all their rights and interests over Lot No.
ZOILO. The subject parcel, being an inherited property, is subject to the rules of co- 1253 in favor of LORETO in an Extrajudicial Settlement of Estate dated January 20,
ownership under the Civil Code. 1987. They declared that they have previously received their respective shares from
the other estate of their parents ZOILO and PURIFICACION.32 The rights of GABINO,
Co-ownership is the right of common dominion which two or more persons have in a JR. as owner over Lot No. 1253-B are thus preserved. These rights were not
spiritual part of a thing, not materially or physically divided.21 Before the partition of the effectively transferred by LORETO to WILFREDO in the Deed of Absolute Sale of
property held in common, no individual or co-owner can claim title to any definite Portion of Land. Nor were these rights alienated from GABINO, JR. upon the
portion thereof. All that the co-owner has is an ideal or abstract quota or proportionate issuance of the title to the subject property in the name of WILFREDO. Registration of
share in the entire property.22 property is not a means of acquiring ownership.33 Its alleged incontrovertibility cannot
be successfully invoked by WILFREDO because certificates of title cannot be used to
protect a usurper from the true owner or be used as a shield for the commission of
LORETO sold the subject property to GABINO, JR. on May 12, 1986 as a co-owner. fraud.34
LORETO had a right, even before the partition of the property on January 19,
1987,23 to transfer in whole or in part his undivided interest in the lot even without the
consent of his co-heirs. This right is absolute in accordance with the well-settled IV
doctrine that a co-owner has full ownership of his pro-indiviso share and has the right
to alienate, assign or mortgage it, and substitute another person for its On the issue of prescription, petitioners contend that the appellate court failed to
enjoyment.24 Thus, what GABINO, JR. obtained by virtue of the sale on May 12, 1986 apply the rule that an action for reconveyance based on fraud prescribes after the
were the same rights as the vendor LORETO had as co-owner, in an ideal share lapse of four years.35 They cite Article 139136 of the Civil Code and the case
equivalent to the consideration given under their transaction.25 of Gerona v. De Guzman.37

LORETO sold some 1,604 square meters of Lot No. 1253 to GABINO, JR. We disagree. This Court explained in Salvatierra v. Court of Appeals,38 viz.:
Consequently, when LORETO purportedly sold to WILFREDO on December 7, 1989
the same portion of the lot, he was no longer the owner of Lot No. 1253-B. Based on An action for reconveyance based on an implied or constructive trust must perforce
the principle that "no one can give what he does not have,"26 LORETO could not have prescribe in ten years and not otherwise. A long line of decisions of this Court, and of
validly sold to WILFREDO on December 7, 1989 what he no longer had. As correctly very recent vintage at that, illustrates this rule. Undoubtedly, it is now well-settled that
pointed out by the appellate court, the sale made by LORETO in favor of WILFREDO an action for reconveyance based on an implied or constructive trust prescribes in ten
is void as LORETO did not have the right to transfer the ownership of the subject years from the issuance of the Torrens title over the property. The only discordant
property at the time of sale. note, it seems, is Balbin v. Medalla, which states that the prescriptive period for
a reconveyance action is four years. However, this variance can be explained
III by the erroneous reliance on Gerona v. de Guzman. But in Gerona, the fraud
was discovered on June 25, 1948, hence Section 43(3) of Act No. 190 was
Petitioners contend that since the subdivision plan of Lot No. 1253 was only approved applied, the New Civil Code not coming into effect until August 30, 1950 xxx. It
on January 19, 1987, the appellate court can not presume must be stressed, at this juncture, that Article 1144 and Article 1456 are new
provisions. They have no counterparts in the old Civil Code or in the old Code
of Civil Procedure, the latter being then resorted to as legal basis of the four-
that the aliquot part of LORETO was the parcel designated as Lot 1253-B.27 year prescriptive period for an action for reconveyance of title of real property
acquired under false pretenses.39
Petitioners err. The mere fact that LORETO sold a definite portion of the co-owned lot
by metes and bounds before partition does not, per se, render the sale a nullity. We [Thus,] under the present Civil Code, xxx just as an implied or constructive trust is an
held in Lopez v. Vda. De Cuaycong28 that the fact that an agreement purported to offspring of xxx Art. 1456, xxx so is the corresponding obligation to reconvey the
sell a concrete portion of a co-owned property does not render the sale void, for it is property and the title thereto in favor of the true owner. In this context, and vis-á-vis
well-established that the binding force of a contract must be recognized as far as it is prescription, Article 1144 of the Civil Code is applicable[, viz.:]
legally possible to do so.29
Art. 1144. The following actions must be brought within ten years from the time the
In the case at bar, the contract of sale between LORETO and GABINO, JR. on May right of action accrues:
12, 1986 could be legally recognized.1âwphi1 At the time of sale, LORETO had an
aliquot share of one-third of the 4,280-square meter property or some 1,42630 square
meters but sold some 1,604 square meters to GABINO, JR. We have ruled that if a 1) Upon a written contract;
co-owner sells more than his aliquot share in the property, the sale will affect only his
share but not those of the other co-owners who did not consent to the sale.31 Be that 2) Upon an obligation created by law;
 3) Upon a judgment.40 (emphases supplied)

Thus, in the case at bar, although the TCT of WILFREDO became indefeasible after
the lapse of one year from the date of registration, the attendance of fraud in its
issuance created an implied trust in favor of GABINO, JR. under Article 145641 of the
Civil Code. Being an implied trust, the action for reconveyance of the subject property
therefore prescribes within a period of ten years from February 15, 1990. Thus, when
respondents filed the instant case with the court a quo on September 26, 1995, it was
well within the prescriptive period.

On the issue of damages, petitioners contend that the grant is erroneous and the
alleged connivance between Atty. Cardenal and WILFREDO lacks basis.

We disagree. The evidence on record is clear that petitioners committed bad faith in
the execution of the purported Deed of Absolute Sale of Portion of Land dated
December 7, 1989 between LORETO and WILFREDO. As stated by the appellate
court, viz.:

xxxx From the series of events, it can be reasonably inferred that appellees
WILFREDO, LORETO and Atty. Cardenal connived in attempting to deprive
appellants of Lot No. 1253-B, hence, the appellants’ entitlement to moral damages.
Further, it is a well-settled rule that attorney’s fees are allowed to be awarded if the
claimant is compelled to litigate with third persons or to incur expenses to protect his
interest by reason of an unjustified act or omission of the party for whom it is sought.
xxxx To protect themselves, the appellants engaged the services of counsel and
incurred expenses in the course of litigation. Hence, we deem it equitable to award
attorney’s fees to the appellant xxx.42

IN VIEW WHEREOF, the petition is DENIED. The assailed Decision and Resolution
of the Court of Appeals in CA-G.R. No. CV-68318 dated March 19, 2003 and
November 13, 2003, respectively, are AFFIRMED in toto. Costs against petitioners.

SO ORDERED.
 Republic of the Philippines 6 7
Torbela,  Dolores Torbela Tablada, Leonora Torbela Agustin,  and Severina
SUPREME COURT Torbela Ildefonso (Torbela siblings).
Manila
The petitioner in G.R. No. 140553 is Lena Duque-Rosario (Duque-Rosario), who
FIRST DIVISION was married to, but now legally separated from, Dr. Andres T. Rosario (Dr.
Rosario). Dr. Rosario is the son of Eufrosina Torbela Rosario and the nephew of
G.R. No. 140528               December 7, 2011 the other Torbela siblings.

MARIA TORBELA, represented by her heirs, namely: EULOGIO TOSINO, The controversy began with a parcel of land, with an area of 374 square meters,
husband and children: CLARO, MAXIMINO, CORNELIO, OLIVIA and located in Urdaneta City, Pangasinan (Lot No. 356-A). It was originally part of a
CALIXTA, all surnamed TOSINO, APOLONIA TOSINO VDA. DE RAMIREZ larger parcel of land, known as Lot No. 356 of the Cadastral Survey of Urdaneta,
and JULITA TOSINO DEAN; PEDRO TORBELA, represented by his heirs, measuring 749 square meters, and covered by Original Certificate of Title (OCT)
namely: JOSE and DIONISIO, both surnamed TORBELA; EUFROSINA 8
No. 16676,  in the name of Valeriano Semilla (Valeriano), married to Potenciana
TORBELA ROSARIO, represented by her heirs, namely: ESTEBAN T. Acosta. Under unexplained circumstances, Valeriano gave Lot No. 356-A to his
ROSARIO, MANUEL T. ROSARIO, ROMULO T. ROSARIO and ANDREA sister Marta Semilla, married to Eugenio Torbela (spouses Torbela). Upon the
ROSARIO-HADUCA; LEONILA TORBELA TAMIN; FERNANDO TORBELA, deaths of the spouses Torbela, Lot No. 356-A was adjudicated in equal shares
represented by his heirs, namely: SERGIO T. TORBELA, EUTROPIA T. among their children, the Torbela siblings, by virtue of a Deed of Extrajudicial
VELASCO, PILAR T. ZULUETA, CANDIDO T. TORBELA, FLORENTINA T. 9
Partition  dated December 3, 1962.
TORBELA and PANTALEON T. TORBELA; DOLORES TORBELA TABLADA;
LEONORA TORBELA AGUSTIN, represented by her heirs, namely:
PATRICIO, SEGUNDO, CONSUELO and FELIX, all surnamed AGUSTIN; and On December 12, 1964, the Torbela siblings executed a Deed of Absolute
10
SEVERINA TORBELA ILDEFONSO, Petitioners, Quitclaim  over Lot No. 356-A in favor of Dr. Rosario. According to the said
vs. Deed, the Torbela siblings "for and in consideration of the sum of NINE PESOS
SPOUSES ANDRES T. ROSARIO and LENA DUQUE-ROSARIO and BANCO (₱9.00) x x x transfer[red] and convey[ed] x x x unto the said Andres T. Rosario,
FILIPINO SAVINGS AND MORTGAGE BANK, Respondents. that undivided portion of THREE HUNDRED SEVENTY-FOUR square meters of
that parcel of land embraced in Original Certificate of Title No. 16676 of the land
11
x - - - - - - - - - - - - - - - - - - - - - - -x records of Pangasinan x x x."  Four days later, on December 16, 1964, OCT No.
16676 in Valeriano’s name was partially cancelled as to Lot No. 356-A and TCT
12
G.R. No. 140553 No. 52751  was issued in Dr. Rosario’s name covering the said property.

LENA DUQUE-ROSARIO, Petitioner, 13
Another Deed of Absolute Quitclaim  was subsequently executed on December
vs. 28, 1964, this time by Dr. Rosario, acknowledging that he only borrowed Lot No.
BANCO FILIPINO SAVINGS AND MORTGAGE BANK, Respondent. 356-A from the Torbela siblings and was already returning the same to the latter
for ₱1.00. The Deed stated:
DECISION
That for and in consideration of the sum of one peso (₱1.00), Philippine Currency
LEONARDO-DE CASTRO, J.: and the fact that I only borrowed the above described parcel of land from MARIA
TORBELA, married to Eulogio Tosino, EUFROSINA TORBELA, married to Pedro
Presently before the Court are two consolidated Petitions for Review on Certiorari Rosario, PEDRO TORBELA, married to Petra Pagador, LEONILA TORBELA,
1 married to Fortunato Tamen, FERNANDO TORBELA, married to Victoriana
under Rule 45 of the Rules of Court, both assailing the Decision  dated June 29,
2 Tablada, DOLORES TORBELA, widow, LEONORA TORBELA, married to Matias
1999 and Resolution  dated October 22, 1999 of the Court of Appeals in CA-G.R. Agustin and SEVERINA TORBELA, married to Jorge Ildefonso, x x x by these
CV No. 39770. presents do hereby cede, transfer and convey by way of this ABSOLUTE
QUITCLAIM unto the said Maria, Eufrosina, Pedro, Leonila, Fernando, Dolores,
3
The petitioners in G.R. No. 140528 are siblings Maria Torbela,  Pedro Leonora and Severina, all surnamed Torbela the parcel of land described
14
4 5
Torbela,  Eufrosina Torbela Rosario,  Leonila Torbela Tamin, Fernando above.  (Emphasis ours.)
The aforequoted Deed was notarized, but was not immediately annotated on The construction of a four-storey building on Lot No. 356-A was eventually
TCT No. 52751. completed. The building was initially used as a hospital, but was later converted
to a commercial building. Part of the building was leased to PT&T; and the rest to
Following the issuance of TCT No. 52751, Dr. Rosario obtained a loan from the Mrs. Andrea Rosario-Haduca, Dr. Rosario’s sister, who operated the Rose Inn
Development Bank of the Philippines (DBP) on February 21, 1965 in the sum of Hotel and Restaurant.
₱70,200.00, secured by a mortgage constituted on Lot No. 356-A. The mortgage
was annotated on TCT No. 52751 on September 21, 1965 as Entry No. Dr. Rosario was able to fully pay his loan from DBP. Under Entry No. 520197 on
15 20
243537.  Dr. Rosario used the proceeds of the loan for the construction of TCT No. 52751  dated March 6, 1981, the mortgage appearing under Entry No.
improvements on Lot No. 356-A. 243537 was cancelled per the Cancellation and Discharge of Mortgage executed
by DBP in favor of Dr. Rosario and ratified before a notary public on July 11,
On May 16, 1967, Cornelio T. Tosino (Cornelio) executed an Affidavit of Adverse 1980.
16
Claim,  on behalf of the Torbela siblings. Cornelio deposed in said Affidavit:
In the meantime, Dr. Rosario acquired another loan from the Philippine National
Bank (PNB) sometime in 1979-1981. Records do not reveal though the original
3. That ANDRES T. ROSARIO later quitclaimed his rights in favor of the
amount of the loan from PNB, but the loan agreement was amended on March 5,
former owners by virtue of a Deed of Absolute Quitclaim which he
1981 and the loan amount was increased to ₱450,000.00. The loan was secured
executed before Notary Public Banaga, and entered in his Notarial
by mortgages constituted on the following properties: (1) Lot No. 356-A, covered
Registry as Dec. No. 43; Page No. 9; Book No. I; Series of 1964;
by TCT No. 52751 in Dr. Rosario’s name; (2) Lot No. 4489, with an area of 1,862
square meters, located in Dagupan City, Pangasinan, covered by TCT No.
4. That it is the desire of the parties, my aforestated kins, to register 24832; and (3) Lot No. 5-F-8-C-2-B-2-A, with an area of 1,001 square meters,
ownership over the above-described property or to perfect their title over located in Nancayasan, Urdaneta, Pangasinan, covered by TCT No.
the same but their Deed could not be registered because the registered 21
104189.  The amended loan agreement and mortgage on Lot No. 356-A was
owner now, ANDRES T. ROSARIO mortgaged the property with the 22
DEVELOPMENT BANK OF THE PHILIPPINES, on September 21, 1965, annotated on TCT No. 52751 on March 6, 1981 as Entry No. 520099.
and for which reason, the Title is still impounded and held by the said
bank; 23
Five days later, on March 11, 1981, another annotation, Entry No. 520469,  was
made on TCT No. 52751, canceling the adverse claim on Lot No. 356-A under
5. That pending payment of the obligation with the DEVELOPMENT Entry Nos. 274471-274472, on the basis of the Cancellation and Discharge of
BANK OF THE PHILIPPINES or redemption of the Title from said bank, Mortgage executed by Dr. Rosario on March 5, 1981. Entry No. 520469
I, CORNELIO T. TOSINO, in behalf of my mother MARIA TORBELA- consisted of both stamped and handwritten portions, and exactly reads:
TOSINO, and my Aunts EUFROSINA TORBELA, LEONILA TORBELA-
TAMEN, DOLORES TORBELA, LEONORA TORBELA-AGUSTIN, Entry No. 520469. Cancellation of Adverse Claim executed by Andres Rosario in
SEVERINA TORBELA-ILDEFONSO, and my Uncles PEDRO TORBELA favor of same. The incumbrance/mortgage appearing under Entry No. 274471-
and FERNANDO, also surnamed TORBELA, I request the Register of 72 is now cancelled as per Cancellation and Discharge of Mortgage Ratified
Deeds of Pangasinan to annotate their adverse claim at the back of before Notary Public Mauro G. Meris on March 5, 1981: Doc. No. 215; Page
Transfer Certificate of Title No. 52751, based on the annexed document, No. 44; Book No. 1; Series Of 1981.
Deed of Absolute Quitclaim by ANDRES T. ROSARIO, dated December
28, 1964, marked as Annex "A" and made a part of this Affidavit, and it is
Lingayen, Pangasinan, 3-11, 19981
also requested that the DEVELOPMENT BANK OF THE PHILIPPINES
17
be informed accordingly.
[Signed: Pedro dela Cruz]
24
Register of Deeds 
The very next day, on May 17, 1967, the Torbela siblings had Cornelio’s Affidavit
of Adverse Claim dated May 16, 1967 and Dr. Rosario’s Deed of Absolute
Quitclaim dated December 28, 1964 annotated on TCT No. 52751 as Entry Nos. On December 8, 1981, Dr. Rosario and his wife, Duque-Rosario (spouses
18 19
274471  and 274472,  respectively. Rosario), acquired a third loan in the amount of ₱1,200,000.00 from Banco
Filipino Savings and Mortgage Bank (Banco Filipino). To secure said loan, the
spouses Rosario again constituted mortgages on Lot No. 356-A, Lot No. 4489,
and Lot No. 5-F-8-C-2-B-2-A. The mortgage on Lot No. 356-A was annotated on
 25 The spouses Rosario instituted before the RTC on March 4, 1988 a case for
TCT No. 52751 as Entry No. 533283  on December 18, 1981. Since the
construction of a two-storey commercial building on Lot No. 5-F-8-C-2-B-2-A was annulment of extrajudicial foreclosure and damages, with prayer for a writ of
still incomplete, the loan value thereof as collateral was deducted from the preliminary injunction and temporary restraining order, against Banco Filipino, the
approved loan amount. Thus, the spouses Rosario could only avail of the Provincial Ex Officio Sheriff and his Deputy, and the Register of Deeds of
maximum loan amount of ₱830,064.00 from Banco Filipino. Pangasinan. The case was docketed as Civil Case No. U-4667. Another notice of
lis pendens was annotated on TCT No. 52751 on March 10, 1988 as Entry No.
627059, viz:
Because Banco Filipino paid the balance of Dr. Rosario’s loan from PNB, the
mortgage on Lot No. 356-A in favor of PNB was cancelled per Entry No.
26 Entry No. 627059 – Lis Pendens – Dr. Andres T. Rosario and Lena Duque
533478  on TCT No. 52751 dated December 23, 1981.
Rosario, Plaintiff versus Banco Filipino, et. al. Civil Case No. U-4667 or
Annulment of ExtraJudicial Foreclosure of Real Estate Mortgage – The parcel of
On February 13, 1986, the Torbela siblings filed before the Regional Trial Court land described in this title is subject to Notice of Lis Pendens subscribed and
(RTC) of Urdaneta, Pangasinan, a Complaint for recovery of ownership and sworn to before Notary Public Mauro G. Meris, as Doc. No. 21; Page No. 5; Book
possession of Lot No. 356-A, plus damages, against the spouses Rosario, which 111; S-1988. March 7, 1988-1988 March 10, 1:00 p.m.
was docketed as Civil Case No. U-4359. On the same day, Entry Nos. 593493
and 593494 were made on TCT No. 52751 that read as follows:
(SGD.) RUFINO M. MORENO, SR.
32
Register of Deeds
Entry No. 593494 – Complaint – Civil Case No. U-4359 (For: Recovery of
Ownership and Possession and Damages. (Sup. Paper).
The Torbela siblings intervened in Civil Case No. U-4667. Eventually, on October
33
Entry No. 593493 – Notice of Lis Pendens – The parcel of land described in this 17, 1990, the RTC issued an Order  dismissing without prejudice Civil Case No.
title is subject to Lis Pendens executed by Liliosa B. Rosario, CLAO, Trial U-4667 due to the spouses Rosario’s failure to prosecute.
Attorney dated February 13, 1986. Filed to TCT No. 52751
Meanwhile, the Torbela siblings tried to redeem Lot No. 356-A from Banco
February 13, 1986-1986 February 13 – 3:30 p.m. Filipino, but their efforts were unsuccessful. Upon the expiration of the one-year
34
redemption period in April 1988, the Certificate of Final Sale  and Affidavit of
35
(SGD.) PACIFICO M. BRAGANZA Consolidation  covering all three foreclosed properties were executed on May
Register of Deeds
27 24, 1988 and May 25, 1988, respectively.

The spouses Rosario afterwards failed to pay their loan from Banco Filipino. As On June 7, 1988, new certificates of title were issued in the name of Banco
of April 2, 1987, the spouses Rosario’s outstanding principal obligation and Filipino, particularly, TCT No. 165812 for Lot No. 5-F-8-C-2-B-2-A and TCT No.
36
penalty charges amounted to ₱743,296.82 and ₱151,524.00, respectively.
28 165813 for Lot No. 356-A .

Banco Filipino extrajudicially foreclosed the mortgages on Lot No. 356-A, Lot No. The Torbela siblings thereafter filed before the RTC on August 29, 1988 a
37
4489, and Lot No. 5-F-8-C-2-B-2-A. During the public auction on April 2, 1987, Complaint  for annulment of the Certificate of Final Sale dated May 24, 1988,
Banco Filipino was the lone bidder for the three foreclosed properties for the judicial cancelation of TCT No. 165813, and damages, against Banco Filipino,
29
price of ₱1,372,387.04. The Certificate of Sale  dated April 2, 1987, in favor of the Ex Officio Provincial Sheriff, and the Register of Deeds of Pangasinan, which
Banco Filipino, was annotated on TCT No. 52751 on April 14, 1987 as Entry No. was docketed as Civil Case No. U-4733.
30
610623.
On June 19, 1991, Banco Filipino filed before the RTC of Urdaneta City a Petition
for the issuance of a writ of possession. In said Petition, docketed as Pet. Case
On December 9, 1987, the Torbela siblings filed before the RTC their Amended No. U-822, Banco Filipino prayed that a writ of possession be issued in its favor
31
Complaint,  impleading Banco Filipino as additional defendant in Civil Case No. over Lot No. 5-F-8-C-2-B-2-A and Lot No. 356-A, plus the improvements thereon,
U-4359 and praying that the spouses Rosario be ordered to redeem Lot No. 356- and the spouses Rosario and other persons presently in possession of said
A from Banco Filipino. properties be directed to abide by said writ.
The RTC jointly heard Civil Case Nos. U-4359 and U-4733 and Pet. Case No. U- Banco Filipino is entitled to a Writ of Possession over Lot-5-F-8-C-2-[B]-2-A of
38 the subdivision plan (LRC) Psd-122471, covered by Transfer Certificate of Title
822. The Decision  on these three cases was promulgated on January 15, 1992,
41
the dispositive portion of which reads: 104189 of the Registry of Deeds of Pangasinan[.]

WHEREFORE, judgment is rendered: The Torbela siblings and Dr. Rosario appealed the foregoing RTC judgment
before the Court of Appeals. Their appeal was docketed as CA-G.R. CV No.
1. Declaring the real estate mortgage over Lot 356-A covered by TCT 39770.
52751 executed by Spouses Andres Rosario in favor of Banco Filipino,
legal and valid; 42
In its Decision  dated June 29, 1999, the Court of Appeals decreed:

2. Declaring the sheriff’s sale dated April 2, 1987 over Lot 356-A covered WHEREFORE, foregoing considered, the appealed decision is hereby
by TCT 52751 and subsequent final Deed of Sale dated May 14, 1988 AFFIRMED with modification. Items No. 6 and 7 of the appealed decision are
over Lot 356-A covered by TCT No. 52751 legal and valid; DELETED. Item No. 8 is modified requiring [Dr. Rosario] to pay [the Torbela
siblings] actual damages, in the amount of ₱1,200,000.00 with 6% per annum
3. Declaring Banco Filipino the owner of Lot 356-A covered by TCT No. interest from finality of this decision until fully paid. [Dr. Rosario] is further
52751 (now TCT 165813); ORDERED to pay [the Torbela siblings] the amount of ₱300,000.00 as moral
damages; ₱200,000.00 as exemplary damages and ₱100,000.00 as attorney’s
4. Banco Filipino is entitled to a Writ of Possession over Lot 356-A fees.
together with the improvements thereon (Rose Inn Building). The Branch
Clerk of Court is hereby ordered to issue a writ of possession in favor of 43
Costs against [Dr. Rosario].
Banco Filipino;
44
The Court of Appeals, in a Resolution  dated October 22, 1999, denied the
5. [The Torbela siblings] are hereby ordered to render accounting to
separate Motions for Reconsideration of the Torbela siblings and Dr. Rosario.
Banco Filipino the rental they received from tenants of Rose Inn Building
from May 14, 1988;
The Torbela siblings come before this Court via the Petition for Review in G.R.
No. 140528, with the following assignment of errors:
6. [The Torbela siblings] are hereby ordered to pay Banco Filipino the
sum of ₱20,000.00 as attorney’s fees;
First Issue and Assignment of Error:
7. Banco Filipino is hereby ordered to give [the Torbela siblings] the right
of first refusal over Lot 356-A. The Register of Deeds is hereby ordered THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT
to annotate the right of [the Torbela siblings] at the back of TCT No. FINDING THAT THE REGISTRATION OF THE DEED OF ABSOLUTE
165813 after payment of the required fees; QUITCLAIM EXECUTED BY [DR. ANDRES T. ROSARIO] IN FAVOR
OF THE [TORBELA SIBLINGS] DATED DECEMBER 28, 1964 AND
THE REGISTRATION OF THE NOTICE OF ADVERSE CLAIM
8. Dr. Rosario and Lena Rosario are hereby ordered to reimburse [the
EXECUTED BY THE [TORBELA SIBLINGS], SERVE AS THE
Torbela siblings] the market value of Lot 356-A as of December, 1964
OPERATIVE ACT TO CONVEY OR AFFECT THE LAND AND
minus payments made by the former;
IMPROVEMENTS THEREOF IN SO FAR AS THIRD PERSONS ARE
CONCERNED.
9. Dismissing the complaint of [the Torbela siblings] against Banco
Filipino, Pedro Habon and Rufino Moreno in Civil Case No. U-4733; and
39 Second Issue and Assignment of Error:
against Banco Filipino in Civil Case No. U-4359.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
40
The RTC released an Amended Decision  dated January 29, 1992, adding the FINDING THAT THE SUBJECT PROPERTY COVERED BY T.C.T. NO.
following paragraph to the dispositive: 52751 IS CLEAN AND FREE, DESPITE OF THE ANNOTATION OF
ENCUMBRANCES OF THE NOTICE OF ADVERSE CLAIM AND THE
 DEED OF ABSOLUTE QUITCLAIM APPEARING AT THE BACK other reliefs, the respondent Banco Filipino to reconvey back Lot No. 356-A,
THEREOF AS ENTRY NOS. 274471 AND 274472, RESPECTIVELY. covered by T.C.T. No. 52751, in favor of the [Torbela siblings] who are the actual
owners of the same.
Third Issue and Assignment of Error:
The [Torbela siblings] likewise pray for such other reliefs and further remedies as
46
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN may be deemed just and equitable under the premises.
FINDING THAT THE NOTICE OF ADVERSE CLAIM OF THE
[TORBELA SIBLINGS] UNDER ENTRY NO. 274471 WAS VALIDLY Duque-Rosario, now legally separated from Dr. Rosario, avers in her Petition for
CANCELLED BY THE REGISTER OF DEEDS, IN THE ABSENCE OF A Review in G.R. No. 140553 that Lot No. 4489 and Lot No. 5-F-8-C-2-B-2-A were
PETITION DULY FILED IN COURT FOR ITS CANCELLATION. registered in her name, and she was unlawfully deprived of ownership of said
properties because of the following errors of the Court of Appeals:
Fourth Issue and Assignment of Error:
A
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT RESPONDENT BANCO FILIPINO SAVINGS AND THE HON. COURT OF APPEALS PATENTLY ERRED IN NOT
MORTGAGE BANK IS A MORTGAGEE IN GOOD FAITH. FINDING THAT THE PERIOD TO REDEEM THE PROPERTY HAS
NOT COMMENCED, HENCE, THE CERTIFICATE OF SALE, THE
Fifth Issue and Assignment of Error: CONSOLIDATION OF OWNERSHIP BY [BANCO FILIPINO], ARE
NULL AND VOID.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT
FINDING THAT THE FILING OF A CIVIL CASE NO. U-4359 ON B
DECEMBER 9, 1987, IMPLEADING RESPONDENT BANCO FILIPINO
AS ADDITIONAL PARTY DEFENDANT, TOLL OR SUSPEND THE THE COURT OF APPEALS PATENTLY ERRED IN REFUSING TO
RUNNING OF THE ONE YEAR PERIOD OF REDEMPTION. RULE THAT THE FILING OF THE COMPLAINT BEFORE THE COURT
A QUO BY THE [TORBELA SIBLINGS] HAD ALREADY BEEN
Sixth Issue and Assignment of Error: 47
PRESCRIBED.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT Duque-Rosario prays that the appealed decision of the Court of Appeals be
FINDING THAT THE OWNERSHIP OVER THE SUBJECT PROPERTY reversed and set aside, and that Lot No. 4489 and Lot No. 5-F-8-C-2-B-2-A be
WAS PREMATURELY CONSOLIDATED IN FAVOR OF RESPONDENT freed from all obligations and encumbrances and returned to her.
BANCO FILIPINO SAVINGS AND MORTGAGE BANK.
Review of findings of fact by the RTC and the Court of Appeals warranted.
Seventh Issue and Assignment of Error:
A disquisition of the issues raised and/or errors assigned in the Petitions at bar
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN unavoidably requires a re-evaluation of the facts and evidence presented by the
FINDING THAT THE SUBJECT PROPERTY IS AT LEAST WORTH parties in the court a quo.
45
₱1,200,000.00.
48
In Republic v. Heirs of Julia Ramos,  the Court summed up the rules governing
The Torbela siblings ask of this Court: the power of review of the Court:

WHEREFORE, in the light of the foregoing considerations, the [Torbela siblings] Ordinarily, this Court will not review, much less reverse, the factual findings of the
most respectfully pray that the questioned DECISION promulgated on June 29, Court of Appeals, especially where such findings coincide with those of the trial
1999 (Annex "A", Petition) and the RESOLUTION dated October 22, 1999 court.http://sc.judiciary.gov.ph/jurisprudence/2010/february2010/169481.htm -
(Annex "B", Petition) be REVERSED and SET ASIDE, and/or further MODIFIED _ftn The findings of facts of the Court of Appeals are, as a general rule,
in favor of the [Torbela siblings], and another DECISION issue ordering, among conclusive and binding upon this Court, since this Court is not a trier of facts and
does not routinely undertake the re-examination of the evidence presented by the 3. Offenses punishable by imprisonment exceeding 30 days, or a fine
contending parties during the trial of the case. exceeding ₱200.00;

The above rule, however, is subject to a number of exceptions, such as (1) when 4. Offenses where there is no private offended party;
the inference made is manifestly mistaken, absurd or impossible; (2) when there
is grave abuse of discretion; (3) when the finding is grounded entirely on 5. Such other classes of disputes which the Prime Minister may in the
speculations, surmises, or conjectures; (4) when the judgment of the Court of interest of justice determine upon recommendation of the Minister of
Appeals is based on misapprehension of facts; (5) when the findings of fact are Justice and the Minister of Local Government.
conflicting; (6) when the Court of Appeals, in making its findings, went beyond the
issues of the case and the same is contrary to the admissions of both parties; (7)
when the findings of the Court of Appeals are contrary to those of the trial court; Section 3. Venue. Disputes between or among persons actually residing in the
(8) when the findings of fact are conclusions without citation of specific evidence same barangay shall be brought for amicable settlement before the Lupon of said
on which they are based; (9) when the Court of Appeals manifestly overlooked barangay. Those involving actual residents of different barangays within the
certain relevant facts not disputed by the parties and which, if properly same city or municipality shall be brought in the barangay where the respondent
considered, would justify a different conclusion; and (10) when the findings of fact or any of the respondents actually resides, at the election of the complainant.
of the Court of Appeals are premised on the absence of evidence and are However, all disputes which involved real property or any interest therein shall be
49 brought in the barangay where the real property or any part thereof is situated.
contradicted by the evidence on record.
The Lupon shall have no authority over disputes:
As the succeeding discussion will bear out, the first, fourth, and ninth exceptions
are extant in these case.
1. involving parties who actually reside in barangays of different cities or
municipalities, except where such barangays adjoin each other; and
Barangay conciliation was not a pre-requisite to the institution of Civil Case No.
U-4359.
2. involving real property located in different municipalities.
Dr. Rosario contends that Civil Case No. U-4359, the Complaint of the Torbela
siblings for recovery of ownership and possession of Lot No. 356-A, plus xxxx
damages, should have been dismissed by the RTC because of the failure of the
Torbela siblings to comply with the prior requirement of submitting the dispute to Section 6. Conciliation, pre-condition to filing of complaint. – No complaint,
barangay conciliation. petition, action or proceeding involving any matter within the authority of the
Lupon as provided in Section 2 hereof shall be filed or instituted in court or any
The Torbela siblings instituted Civil Case No. U-4359 on February 13, 1986, other government office for adjudication unless there has been a confrontation of
when Presidential Decree No. 1508, Establishing a System of Amicably Settling the parties before the Lupon Chairman or the Pangkat and no conciliation or
50 settlement has been reached as certified by the Lupon Secretary or the Pangkat
Disputes at the Barangay Level, was still in effect.  Pertinent provisions of said Secretary, attested by the Lupon or Pangkat Chairman, or unless the settlement
issuance read: has been repudiated. x x x. (Emphases supplied.)

Section 2. Subject matters for amicable settlement. The Lupon of each barangay The Court gave the following elucidation on the jurisdiction of the Lupong
shall have authority to bring together the parties actually residing in the same city 51
Tagapayapa in Tavora v. Hon. Veloso  :
or municipality for amicable settlement of all disputes except:

1. Where one party is the government, or any subdivision or The foregoing provisions are quite clear. Section 2 specifies the conditions under
instrumentality thereof; which the Lupon of a barangay "shall have authority" to bring together the
disputants for amicable settlement of their dispute: The parties must be "actually
residing in the same city or municipality." At the same time, Section 3 — while
2. Where one party is a public officer or employee, and the dispute reiterating that the disputants must be "actually residing in the same barangay" or
relates to the performance of his official functions; in "different barangays" within the same city or municipality — unequivocably
declares that the Lupon shall have "no authority" over disputes "involving parties
who actually reside in barangays of different cities or municipalities," except There was an express trust between the Torbela siblings and Dr. Rosario.
where such barangays adjoin each other.
There is no dispute that the Torbela sibling inherited the title to Lot No. 356-A
Thus, by express statutory inclusion and exclusion, the Lupon shall have no from their parents, the Torbela spouses, who, in turn, acquired the same from the
jurisdiction over disputes where the parties are not actual residents of the same first registered owner of Lot No. 356-A, Valeriano.
city or municipality, except where the barangays in which they actually reside
adjoin each other. Indeed, the Torbela siblings executed a Deed of Absolute Quitclaim on
December 12, 1964 in which they transferred and conveyed Lot No. 356-A to Dr.
It is true that immediately after specifying the barangay whose Lupon shall take Rosario for the consideration of ₱9.00. However, the Torbela siblings explained
cognizance of a given dispute, Sec. 3 of PD 1508 adds: that they only executed the Deed as an accommodation so that Dr. Rosario could
have Lot No. 356-A registered in his name and use said property to secure a loan
"However, all disputes which involve real property or any interest therein shall be from DBP, the proceeds of which would be used for building a hospital on Lot No.
brought in the barangay where the real property or any part thereof is situated." 356-A – a claim supported by testimonial and documentary evidence, and borne
out by the sequence of events immediately following the execution by the Torbela
siblings of said Deed. On December 16, 1964, TCT No. 52751, covering Lot No.
Actually, however, this added sentence is just an ordinary proviso and should 356-A, was already issued in Dr. Rosario’s name. On December 28, 1964, Dr.
operate as such. Rosario executed his own Deed of Absolute Quitclaim, in which he expressly
acknowledged that he "only borrowed" Lot No. 356-A and was transferring and
The operation of a proviso, as a rule, should be limited to its normal function, conveying the same back to the Torbela siblings for the consideration of ₱1.00.
which is to restrict or vary the operation of the principal clause, rather than On February 21, 1965, Dr. Rosario’s loan in the amount of ₱70,200.00, secured
expand its scope, in the absence of a clear indication to the contrary. by a mortgage on Lot No. 356-A, was approved by DBP. Soon thereafter,
construction of a hospital building started on Lot No. 356-A.
"The natural and appropriate office of a proviso is . . . to except something from
the enacting clause; to limit, restrict, or qualify the statute in whole or in part; or to Among the notable evidence presented by the Torbela siblings is the testimony of
exclude from the scope of the statute that which otherwise would be within its Atty. Lorenza Alcantara (Atty. Alcantara), who had no apparent personal interest
terms." (73 Am Jur 2d 467.) in the present case. Atty. Alcantara, when she was still a boarder at the house of
Eufrosina Torbela Rosario (Dr. Rosario’s mother), was consulted by the Torbela
Therefore, the quoted proviso should simply be deemed to restrict or vary the siblings as regards the extrajudicial partition of Lot No. 356-A. She also
rule on venue prescribed in the principal clauses of the first paragraph of Section witnessed the execution of the two Deeds of Absolute Quitclaim by the Torbela
3, thus: Although venue is generally determined by the residence of the parties, siblings and Dr. Rosario.
disputes involving real property shall be brought in the barangay where the real
property or any part thereof is situated, notwithstanding that the parties reside In contrast, Dr. Rosario presented TCT No. 52751, issued in his name, to prove
52 53
elsewhere within the same city/municipality.  (Emphases supplied.) his purported title to Lot No. 356-A. In Lee Tek Sheng v. Court of Appeals,  the
Court made a clear distinction between title and the certificate of title:
The original parties in Civil Case No. U-4359 (the Torbela siblings and the
spouses Rosario) do not reside in the same barangay, or in different barangays The certificate referred to is that document issued by the Register of Deeds
within the same city or municipality, or in different barangays of different cities or known as the Transfer Certificate of Title (TCT). By title, the law refers to
municipalities but are adjoining each other. Some of them reside outside ownership which is represented by that document. Petitioner apparently confuses
Pangasinan and even outside of the country altogether. The Torbela siblings certificate with title. Placing a parcel of land under the mantle of the Torrens
reside separately in Barangay Macalong, Urdaneta, Pangasinan; Barangay system does not mean that ownership thereof can no longer be disputed.
Consolacion, Urdaneta, Pangasinan; Pangil, Laguna; Chicago, United States of Ownership is different from a certificate of title. The TCT is only the best proof of
America; and Canada. The spouses Rosario are residents of Calle Garcia, ownership of a piece of land. Besides, the certificate cannot always be
Poblacion, Urdaneta, Pangasinan. Resultantly, the Lupon had no jurisdiction over considered as conclusive evidence of ownership. Mere issuance of the certificate
the dispute and barangay conciliation was not a pre-condition for the filing of Civil of title in the name of any person does not foreclose the possibility that the real
Case No. U-4359. property may be under co-ownership with persons not named in the certificate or
that the registrant may only be a trustee or that other parties may have acquired
The Court now looks into the merits of Civil Case No. U-4359. interest subsequent to the issuance of the certificate of title. To repeat,
registration is not the equivalent of title, but is only the best evidence thereof. It can also be said that Dr. Rosario is estopped from claiming or asserting
Title as a concept of ownership should not be confused with the certificate of title ownership over Lot No. 356-A based on his Deed of Absolute Quitclaim dated
as evidence of such ownership although both are interchangeably used. x x December 28, 1964. Dr. Rosario's admission in the said Deed that he merely
54 borrowed Lot No. 356-A is deemed conclusive upon him. Under Article 1431 of
x.  (Emphases supplied.)
the Civil Code, "[t]hrough estoppel an admission or representation is rendered
conclusive upon the person making it, and cannot be denied or disproved as
Registration does not vest title; it is merely the evidence of such title. Land 60
registration laws do not give the holder any better title than what he actually against the person relying thereon."  That admission cannot now be denied by
55 Dr. Rosario as against the Torbela siblings, the latter having relied upon his
has.  Consequently, Dr. Rosario must still prove herein his acquisition of title to
representation.
Lot No. 356-A, apart from his submission of TCT No. 52751 in his name.
Considering the foregoing, the Court agrees with the RTC and the Court of
Dr. Rosario testified that he obtained Lot No. 356-A after paying the Torbela
Appeals that Dr. Rosario only holds Lot No. 356-A in trust for the Torbela
siblings ₱25,000.00, pursuant to a verbal agreement with the latter. The Court
siblings.
though observes that Dr. Rosario’s testimony on the execution and existence of
the verbal agreement with the Torbela siblings lacks significant details (such as
the names of the parties present, dates, places, etc.) and is not corroborated by Trust is the right to the beneficial enjoyment of property, the legal title to which is
independent evidence. vested in another. It is a fiduciary relationship that obliges the trustee to deal with
the property for the benefit of the beneficiary. Trust relations between parties may
either be express or implied. An express trust is created by the intention of the
In addition, Dr. Rosario acknowledged the execution of the two Deeds of
trustor or of the parties, while an implied trust comes into being by operation of
Absolute Quitclaim dated December 12, 1964 and December 28, 1964, even 61
affirming his own signature on the latter Deed. The Parol Evidence Rule provides law.
that when the terms of the agreement have been reduced into writing, it is
considered as containing all the terms agreed upon and there can be, between Express trusts are created by direct and positive acts of the parties, by some
the parties and their successors in interest, no evidence of such terms other than writing or deed, or will, or by words either expressly or impliedly evincing an
56 intention to create a trust. Under Article 1444 of the Civil Code, "[n]o particular
the contents of the written agreement.  Dr. Rosario may not modify, explain, or
add to the terms in the two written Deeds of Absolute Quitclaim since he did not words are required for the creation of an express trust, it being sufficient that a
62
put in issue in his pleadings (1) an intrinsic ambiguity, mistake, or imperfection in trust is clearly intended."  It is possible to create a trust without using the word
the Deeds; (2) failure of the Deeds to express the true intent and the agreement "trust" or "trustee." Conversely, the mere fact that these words are used does not
of the parties thereto; (3) the validity of the Deeds; or (4) the existence of other necessarily indicate an intention to create a trust. The question in each case is
terms agreed to by the Torbela siblings and Dr. Rosario after the execution of the whether the trustor manifested an intention to create the kind of relationship
57 which to lawyers is known as trust. It is immaterial whether or not he knows that
Deeds.
the relationship which he intends to create is called a trust, and whether or not he
63
Even if the Court considers Dr. Rosario’s testimony on his alleged verbal knows the precise characteristics of the relationship which is called a trust.
agreement with the Torbela siblings, the Court finds the same unsatisfactory. Dr.
Rosario averred that the two Deeds were executed only because he was 64
In Tamayo v. Callejo,  the Court recognized that a trust may have a constructive
"planning to secure loan from the Development Bank of the Philippines and or implied nature in the beginning, but the registered owner’s subsequent
58
Philippine National Bank and the bank needed absolute quitclaim[.]"  While Dr. express acknowledgement in a public document of a previous sale of the
Rosario’s explanation makes sense for the first Deed of Absolute Quitclaim dated property to another party, had the effect of imparting to the aforementioned trust
December 12, 1964 executed by the Torbela siblings (which transferred Lot No. the nature of an express trust. The same situation exists in this case. When Dr.
356-A to Dr. Rosario for ₱9.00.00), the same could not be said for the second Rosario was able to register Lot No. 356-A in his name under TCT No. 52751 on
Deed of Absolute Quitclaim dated December 28, 1964 executed by Dr. Rosario. December 16, 1964, an implied trust was initially established between him and
In fact, Dr. Rosario’s Deed of Absolute Quitclaim (in which he admitted that he the Torbela siblings under Article 1451 of the Civil Code, which provides:
only borrowed Lot No. 356-A and was transferring the same to the Torbela
siblings for ₱1.00.00) would actually work against the approval of Dr. Rosario’s ART. 1451. When land passes by succession to any person and he causes the
loan by the banks. Since Dr. Rosario’s Deed of Absolute Quitclaim dated legal title to be put in the name of another, a trust is established by implication of
December 28, 1964 is a declaration against his self-interest, it must be taken as law for the benefit of the true owner.
59
favoring the truthfulness of the contents of said Deed.
Dr. Rosario’s execution of the Deed of Absolute Quitclaim on December 28, and makes such repudiation known to the beneficiary or cestui que trust. For this
1964, containing his express admission that he only borrowed Lot No. 356-A reason, the old Code of Civil Procedure (Act 190) declared that the rules on
from the Torbela siblings, eventually transformed the nature of the trust to an adverse possession do not apply to "continuing and subsisting" (i.e.,
express one. The express trust continued despite Dr. Rosario stating in his Deed unrepudiated) trusts. In an express trust, the delay of the beneficiary is directly
of Absolute Quitclaim that he was already returning Lot No. 356-A to the Torbela attributable to the trustee who undertakes to hold the property for the former, or
siblings as Lot No. 356-A remained registered in Dr. Rosario’s name under TCT who is linked to the beneficiary by confidential or fiduciary relations. The trustee's
No. 52751 and Dr. Rosario kept possession of said property, together with the possession is, therefore, not adverse to the beneficiary, until and unless the latter
improvements thereon. 68
is made aware that the trust has been repudiated.

The right of the Torbela siblings to recover Lot No. 356-A has not yet prescribed. Dr. Rosario argues that he is deemed to have repudiated the trust on December
16, 1964, when he registered Lot No. 356-A in his name under TCT No. 52751,
The Court extensively discussed the prescriptive period for express trusts in the so when on February 13, 1986, the Torbela siblings instituted before the RTC
65
Heirs of Maximo Labanon v. Heirs of Constancio Labanon,  to wit: Civil Case No. U-4359, for the recovery of ownership and possession of Lot No.
356-A from the spouses Rosario, over 21 years had passed. Civil Case No. U-
4359 was already barred by prescription, as well as laches.
On the issue of prescription, we had the opportunity to rule in Bueno v. Reyes
that unrepudiated written express trusts are imprescriptible:
69
The Court already rejected a similar argument in Ringor v. Ringor  for the
"While there are some decisions which hold that an action upon a trust is following reasons:
imprescriptible, without distinguishing between express and implied trusts, the
better rule, as laid down by this Court in other decisions, is that prescription does A trustee who obtains a Torrens title over a property held in trust for him by
supervene where the trust is merely an implied one. The reason has been another cannot repudiate the trust by relying on the registration. A Torrens
expressed by Justice J.B.L. Reyes in J.M. Tuason and Co., Inc. vs. Magdangal, 4 Certificate of Title in Jose’s name did not vest ownership of the land upon him.
SCRA 84, 88, as follows: The Torrens system does not create or vest title. It only confirms and records title
already existing and vested. It does not protect a usurper from the true owner.
Under Section 40 of the old Code of Civil Procedure, all actions for recovery of The Torrens system was not intended to foment betrayal in the performance of a
real property prescribed in 10 years, excepting only actions based on continuing trust. It does not permit one to enrich himself at the expense of another. Where
or subsisting trusts that were considered by section 38 as imprescriptible. As held one does not have a rightful claim to the property, the Torrens system of
in the case of Diaz v. Gorricho, L-11229, March 29, 1958, however, the registration can confirm or record nothing. Petitioners cannot rely on the
continuing or subsisting trusts contemplated in section 38 of the Code of Civil registration of the lands in Jose’s name nor in the name of the Heirs of Jose M.
Procedure referred only to express unrepudiated trusts, and did not include Ringor, Inc., for the wrong result they seek. For Jose could not repudiate a trust
constructive trusts (that are imposed by law) where no fiduciary relation exists by relying on a Torrens title he held in trust for his co-heirs. The beneficiaries are
and the trustee does not recognize the trust at all." entitled to enforce the trust, notwithstanding the irrevocability of the Torrens title.
70
The intended trust must be sustained.  (Emphasis supplied.)
This principle was amplified in Escay v. Court of Appeals this way: "Express
trusts prescribe 10 years from the repudiation of the trust (Manuel Diaz, et al. vs. In the more recent case of Heirs of Tranquilino Labiste v. Heirs of Jose
Carmen Gorricho et al., 54 O.G. p. 8429, Sec. 40, Code of Civil Procedure)." 71
Labiste,  the Court refused to apply prescription and laches and reiterated that:

In the more recent case of Secuya v. De Selma, we again ruled that the [P]rescription and laches will run only from the time the express trust is
prescriptive period for the enforcement of an express trust of ten (10) years starts repudiated. The Court has held that for acquisitive prescription to bar the action
66
upon the repudiation of the trust by the trustee. of the beneficiary against the trustee in an express trust for the recovery of the
property held in trust it must be shown that: (a) the trustee has performed
To apply the 10-year prescriptive period, which would bar a beneficiary’s action unequivocal acts of repudiation amounting to an ouster of the cestui que trust; (b)
to recover in an express trust, the repudiation of the trust must be proven by clear such positive acts of repudiation have been made known to the cestui que trust,
67 and (c) the evidence thereon is clear and conclusive. Respondents cannot rely
and convincing evidence and made known to the beneficiary.  The express trust
on the fact that the Torrens title was issued in the name of Epifanio and the other
disables the trustee from acquiring for his own benefit the property committed to heirs of Jose. It has been held that a trustee who obtains a Torrens title over
his management or custody, at least while he does not openly repudiate the trust, property held in trust by him for another cannot repudiate the trust by relying on
the registration. The rule requires a clear repudiation of the trust duly 74
520099 is constructive notice to the whole world  that Lot No. 356-A was
communicated to the beneficiary. The only act that can be construed as mortgaged by Dr. Rosario to PNB as security for a loan, the amount of which was
repudiation was when respondents filed the petition for reconstitution in October increased to ₱450,000.00. Hence, Dr. Rosario is deemed to have effectively
1993. And since petitioners filed their complaint in January 1995, their cause of repudiated the express trust between him and the Torbela siblings on March 6,
72
action has not yet prescribed, laches cannot be attributed to them.  (Emphasis 1981, on which day, the prescriptive period for the enforcement of the express
supplied.) trust by the Torbela siblings began to run.

It is clear that under the foregoing jurisprudence, the registration of Lot No. 356-A From March 6, 1981, when the amended loan and mortgage agreement was
by Dr. Rosario in his name under TCT No. 52751 on December 16, 1964 is not registered on TCT No. 52751, to February 13, 1986, when the Torbela siblings
the repudiation that would have caused the 10-year prescriptive period for the instituted before the RTC Civil Case No. U-4359 against the spouses Rosario,
enforcement of an express trust to run. only about five years had passed. The Torbela siblings were able to institute Civil
Case No. U-4359 well before the lapse of the 10-year prescriptive period for the
The Court of Appeals held that Dr. Rosario repudiated the express trust when he enforcement of their express trust with Dr. Rosario.
acquired another loan from PNB and constituted a second mortgage on Lot No.
356-A sometime in 1979, which, unlike the first mortgage to DBP in 1965, was Civil Case No. U-4359 is likewise not barred by laches. Laches means the failure
without the knowledge and/or consent of the Torbela siblings. or neglect, for an unreasonable and unexplained length of time, to do that which
by exercising due diligence could or should have been done earlier. It is
The Court only concurs in part with the Court of Appeals on this matter. negligence or omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has abandoned it or declined
to assert it. As the Court explained in the preceding paragraphs, the Torbela
For repudiation of an express trust to be effective, the unequivocal act of siblings instituted Civil Case No. U-4359 five years after Dr. Rosario’s repudiation
repudiation had to be made known to the Torbela siblings as the cestuis que trust of the express trust, still within the 10-year prescriptive period for enforcement of
and must be proven by clear and conclusive evidence. A scrutiny of TCT No. such trusts. This does not constitute an unreasonable delay in asserting one's
52751 reveals the following inscription: right. A delay within the prescriptive period is sanctioned by law and is not
considered to be a delay that would bar relief. Laches apply only in the absence
Entry No. 520099 of a statutory prescriptive period.
75

Amendment of the mortgage in favor of PNB inscribed under Entry No. 490658 in Banco Filipino is not a mortgagee and buyer in good faith.
the sense that the consideration thereof has been increased to PHILIPPINE
PESOS Four Hundred Fifty Thousand Pesos only (₱450,000.00) and to secure
any and all negotiations with PNB, whether contracted before, during or after the Having determined that the Torbela siblings are the true owners and Dr. Rosario
date of this instrument, acknowledged before Notary Public of Pangasinan Alejo merely the trustee of Lot No. 356-A, the Court is next faced with the issue of
M. Dato as Doc. No. 198, Page No. 41, Book No. 11, Series of 1985. whether or not the Torbela siblings may still recover Lot No. 356-A considering
that Dr. Rosario had already mortgaged Lot No. 356-A to Banco Filipino, and
upon Dr. Rosario’s default on his loan obligations, Banco Filipino foreclosed the
Date of Instrument March 5, 1981 mortgage, acquired Lot No. 356-A as the highest bidder at the foreclosure sale,
and consolidated title in its name under TCT No. 165813. The resolution of this
73
Date of Inscription March 6, 1981 issue depends on the answer to the question of whether or not Banco Filipino
was a mortgagee in good faith.
Although according to Entry No. 520099, the original loan and mortgage
agreement of Lot No. 356-A between Dr. Rosario and PNB was previously Under Article 2085 of the Civil Code, one of the essential requisites of the
inscribed as Entry No. 490658, Entry No. 490658 does not actually appear on contract of mortgage is that the mortgagor should be the absolute owner of the
TCT No. 52751 and, thus, it cannot be used as the reckoning date for the start of property to be mortgaged; otherwise, the mortgage is considered null and void.
the prescriptive period. However, an exception to this rule is the doctrine of "mortgagee in good faith."
Under this doctrine, even if the mortgagor is not the owner of the mortgaged
The Torbela siblings can only be charged with knowledge of the mortgage of Lot property, the mortgage contract and any foreclosure sale arising therefrom are
No. 356-A to PNB on March 6, 1981 when the amended loan and mortgage given effect by reason of public policy. This principle is based on the rule that all
agreement was registered on TCT No. 52751 as Entry No. 520099. Entry No. persons dealing with property covered by a Torrens Certificate of Title, as buyers
or mortgagees, are not required to go beyond what appears on the face of the SEC. 110. Whoever claims any part or interest in registered land adverse to the
title. This is the same rule that underlies the principle of "innocent purchasers for registered owner, arising subsequent to the date of the original registration, may,
value." The prevailing jurisprudence is that a mortgagee has a right to rely in if no other provision is made in this Act for registering the same, make a
good faith on the certificate of title of the mortgagor to the property given as statement in writing setting forth fully his alleged right or interest, and how or
security and in the absence of any sign that might arouse suspicion, has no under whom acquired, and a reference to the volume and page of the certificate
obligation to undertake further investigation. Hence, even if the mortgagor is not of title of the registered owner, and a description of the land in which the right or
the rightful owner of, or does not have a valid title to, the mortgaged property, the interest is claimed.
76
mortgagee in good faith is, nonetheless, entitled to protection.
The statement shall be signed and sworn to, and shall state the adverse
On one hand, the Torbela siblings aver that Banco Filipino is not a mortgagee in claimant’s residence, and designate a place at which all notices may be served
good faith because as early as May 17, 1967, they had already annotated upon him. This statement shall be entitled to registration as an adverse claim,
Cornelio’s Adverse Claim dated May 16, 1967 and Dr. Rosario’s Deed of and the court, upon a petition of any party in interest, shall grant a speedy
Absolute Quitclaim dated December 28, 1964 on TCT No. 52751 as Entry Nos. hearing upon the question of the validity of such adverse claim and shall enter
274471-274472, respectively. such decree therein as justice and equity may require. If the claim is adjudged to
be invalid, the registration shall be cancelled. If in any case the court after notice
and hearing shall find that a claim thus registered was frivolous or vexatious, it
On the other hand, Banco Filipino asseverates that it is a mortgagee in good faith
may tax the adverse claimant double or treble costs in its discretion.
because per Section 70 of Presidential Decree No. 1529, otherwise known as the
Property Registration Decree, the notice of adverse claim, registered on May 17,
1967 by the Torbela siblings under Entry Nos. 274471-274472 on TCT No. Construing the aforequoted provision, the Court stressed in Ty Sin Tei v. Lee Dy
78
52751, already lapsed after 30 days or on June 16, 1967. Additionally, there was Piao  that "[t]he validity or efficaciousness of the [adverse] claim x x x may only
an express cancellation of Entry Nos. 274471-274472 by Entry No. 520469 dated be determined by the Court upon petition by an interested party, in which event,
March 11, 1981. So when Banco Filipino approved Dr. Rosario’s loan for the Court shall order the immediate hearing thereof and make the proper
₱1,200,000.00 and constituted a mortgage on Lot No. 356-A (together with two adjudication as justice and equity may warrant. And it is ONLY when such claim
other properties) on December 8, 1981, the only other encumbrance on TCT No. is found unmeritorious that the registration thereof may be cancelled." The Court
52751 was Entry No. 520099 dated March 6, 1981, i.e., the amended loan and likewise pointed out in the same case that while a notice of lis pendens may be
mortgage agreement between Dr. Rosario and PNB (which was eventually cancelled in a number of ways, "the same is not true in a registered adverse
cancelled after it was paid off with part of the proceeds from Dr. Rosario’s loan claim, for it may be cancelled only in one instance, i.e., after the claim is
from Banco Filipino). Hence, Banco Filipino was not aware that the Torbela adjudged invalid or unmeritorious by the Court x x x;" and "if any of the
siblings’ adverse claim on Lot No. 356-A still subsisted. registrations should be considered unnecessary or superfluous, it would be the
notice of lis pendens and not the annotation of the adverse claim which is more
The Court finds that Banco Filipino is not a mortgagee in good faith. Entry Nos. permanent and cannot be cancelled without adequate hearing and proper
274471-274472 were not validly cancelled, and the improper cancellation should disposition of the claim."
have been apparent to Banco Filipino and aroused suspicion in said bank of
some defect in Dr. Rosario’s title. With the enactment of the Property Registration Decree on June 11, 1978,
Section 70 thereof now applies to adverse claims:
The purpose of annotating the adverse claim on the title of the disputed land is to
apprise third persons that there is a controversy over the ownership of the land SEC. 70. Adverse claim. – Whoever claims any part or interest in registered land
and to preserve and protect the right of the adverse claimant during the adverse to the registered owner, arising subsequent to the date of the original
pendency of the controversy. It is a notice to third persons that any transaction registrations, may, if no other provision is made in this Decree for registering the
77 same, make a statement in writing setting forth fully his alleged right, or interest,
regarding the disputed land is subject to the outcome of the dispute.
and how or under whom acquired, a reference to the number of the certificate of
title of the registered owner, the name of the registered owner, and a description
Adverse claims were previously governed by Section 110 of Act No. 496,
of the land in which the right or interest is claimed.
otherwise known as the Land Registration Act, quoted in full below:
The statement shall be signed and sworn to, and shall state the adverse
ADVERSE CLAIM
claimant’s residence, and a place at which all notices may be served upon him.
This statement shall be entitled to registration as an adverse claim on the
certificate of title. The adverse claim shall be effective for a period of thirty days lapse of time, the law would not have required the party in interest to do a
from the date of registration. After the lapse of said period, the annotation of useless act.
adverse claim may be cancelled upon filing of a verified petition therefor by the
party in interest: Provided, however, that after cancellation, no second adverse A statute's clauses and phrases must not be taken separately, but in its relation
claim based on the same ground shall be registered by the same claimant. to the statute's totality. Each statute must, in fact, be construed as to harmonize it
with the pre-existing body of laws. Unless clearly repugnant, provisions of
Before the lapse of thirty days aforesaid, any party in interest may file a petition in statutes must be reconciled. The printed pages of the published Act, its history,
the Court of First Instance where the land is situated for the cancellation of the origin, and its purposes may be examined by the courts in their construction. x x
adverse claim, and the court shall grant a speedy hearing upon the question of x.
the validity of such adverse claim, and shall render judgment as may be just and
equitable. If the adverse claim is adjudged to be invalid, the registration thereof xxxx
shall be ordered cancelled. If, in any case, the court, after notice and hearing,
shall find that the adverse claim thus registered was frivolous, it may fine the
claimant in an amount not less than one thousand pesos nor more than five Construing the provision as a whole would reconcile the apparent inconsistency
thousand pesos, in its discretion. Before the lapse of thirty days, the claimant between the portions of the law such that the provision on cancellation of adverse
may withdraw his adverse claim by filing with the Register of Deeds a sworn claim by verified petition would serve to qualify the provision on the effectivity
petition to that effect. (Emphases supplied.) period. The law, taken together, simply means that the cancellation of the
adverse claim is still necessary to render it ineffective, otherwise, the inscription
will remain annotated and shall continue as a lien upon the property. For if the
79
In Sajonas v. Court of Appeals,  the Court squarely interpreted Section 70 of the adverse claim has already ceased to be effective upon the lapse of said period,
Property Registration Decree, particularly, the new 30-day period not previously its cancellation is no longer necessary and the process of cancellation would be a
found in Section 110 of the Land Registration Act, thus: useless ceremony.

In construing the law aforesaid, care should be taken that every part thereof be It should be noted that the law employs the phrase "may be cancelled," which
given effect and a construction that could render a provision inoperative should obviously indicates, as inherent in its decision making power, that the court may
be avoided, and inconsistent provisions should be reconciled whenever possible or may not order the cancellation of an adverse claim, notwithstanding such
as parts of a harmonious whole. For taken in solitude, a word or phrase might provision limiting the effectivity of an adverse claim for thirty days from the date of
easily convey a meaning quite different from the one actually intended and registration. The court cannot be bound by such period as it would be
evident when a word or phrase is considered with those with which it is inconsistent with the very authority vested in it. A fortiori, the limitation on the
associated. In ascertaining the period of effectivity of an inscription of adverse period of effectivity is immaterial in determining the validity or invalidity of an
claim, we must read the law in its entirety. Sentence three, paragraph two of adverse claim which is the principal issue to be decided in the court hearing. It
Section 70 of P.D. 1529 provides: will therefore depend upon the evidence at a proper hearing for the court to
determine whether it will order the cancellation of the adverse claim or not.
"The adverse claim shall be effective for a period of thirty days from the date of
registration." To interpret the effectivity period of the adverse claim as absolute and without
qualification limited to thirty days defeats the very purpose for which the statute
At first blush, the provision in question would seem to restrict the effectivity of the provides for the remedy of an inscription of adverse claim, as the annotation of
adverse claim to thirty days. But the above provision cannot and should not be an adverse claim is a measure designed to protect the interest of a person over a
treated separately, but should be read in relation to the sentence following, which piece of real property where the registration of such interest or right is not
reads: otherwise provided for by the Land Registration Act or Act 496 (now P.D. 1529 or
the Property Registration Decree), and serves as a warning to third parties
dealing with said property that someone is claiming an interest or the same or a
"After the lapse of said period, the annotation of adverse claim may be cancelled
better right than the registered owner thereof.
upon filing of a verified petition therefor by the party in interest."
The reason why the law provides for a hearing where the validity of the adverse
If the rationale of the law was for the adverse claim to ipso facto lose force and
claim is to be threshed out is to afford the adverse claimant an opportunity to be
effect after the lapse of thirty days, then it would not have been necessary to
heard, providing a venue where the propriety of his claimed interest can be
include the foregoing caveat to clarify and complete the rule. For then, no
established or revoked, all for the purpose of determining at last the existence of
adverse claim need be cancelled. If it has been automatically terminated by mere
any encumbrance on the title arising from such adverse claim. This is in line with mortgagee for value, if it afterwards develops that the title was in fact defective,
the provision immediately following: and it appears that he had such notice of the defects as would have led to its
discovery had he acted with the measure of precaution which may be required of
81
"Provided, however, that after cancellation, no second adverse claim shall be a prudent man in a like situation.
registered by the same claimant."
While the defective cancellation of Entry Nos. 274471-274472 by Entry No.
Should the adverse claimant fail to sustain his interest in the property, the 520469 might not be evident to a private individual, the same should have been
adverse claimant will be precluded from registering a second adverse claim apparent to Banco Filipino. Banco Filipino is not an ordinary mortgagee, but is a
based on the same ground. mortgagee-bank, whose business is impressed with public interest. In fact, in one
82
case,   the Court explicitly declared that the rule that persons dealing with
It was held that "validity or efficaciousness of the claim may only be determined registered lands can rely solely on the certificate of title does not apply to banks.
by the Court upon petition by an interested party, in which event, the Court shall 83
In another case,  the Court adjudged that unlike private individuals, a bank is
order the immediate hearing thereof and make the proper adjudication as justice expected to exercise greater care and prudence in its dealings, including those
and equity may warrant. And it is only when such claim is found unmeritorious involving registered lands. A banking institution is expected to exercise due
that the registration of the adverse claim may be cancelled, thereby protecting diligence before entering into a mortgage contract. The ascertainment of the
the interest of the adverse claimant and giving notice and warning to third status or condition of a property offered to it as security for a loan must be a
80
parties."  (Emphases supplied.) standard and indispensable part of its operations.

Whether under Section 110 of the Land Registration Act or Section 70 of the Banco Filipino cannot be deemed a mortgagee in good faith, much less a
Property Registration Decree, notice of adverse claim can only be cancelled after purchaser in good faith at the foreclosure sale of Lot No. 356-A. Hence, the right
a party in interest files a petition for cancellation before the RTC wherein the of the Torbela siblings over Lot No. 356-A is superior over that of Banco Filipino;
property is located, and the RTC conducts a hearing and determines the said and as the true owners of Lot No. 356-A, the Torbela siblings are entitled to a
claim to be invalid or unmeritorious. reconveyance of said property even from Banco Filipino.

No petition for cancellation has been filed and no hearing has been conducted Nonetheless, the failure of Banco Filipino to comply with the due diligence
herein to determine the validity or merit of the adverse claim of the Torbela requirement was not the result of a dishonest purpose, some moral obliquity, or
siblings. Entry No. 520469 cancelled the adverse claim of the Torbela siblings, breach of a known duty for some interest or ill will that partakes of fraud that
annotated as Entry Nos. 274471-774472, upon the presentation by Dr. Rosario of 84
would justify damages.
a mere Cancellation and Discharge of Mortgage.
Given the reconveyance of Lot No. 356-A to the Torbela siblings, there is no
Regardless of whether or not the Register of Deeds should have inscribed Entry more need to address issues concerning redemption, annulment of the
No. 520469 on TCT No. 52751, Banco Filipino could not invoke said inscription in foreclosure sale and certificate of sale (subject matter of Civil Case No. U-4733),
support of its claim of good faith. There were several things amiss in Entry No. or issuance of a writ of possession in favor of Banco Filipino (subject matter of
520469 which should have already aroused suspicions in Banco Filipino, and Pet. Case No. U-822) insofar as Lot No. 356-A is concerned. Such would only be
compelled the bank to look beyond TCT No. 52751 and inquire into Dr. Rosario’s superfluous. Banco Filipino, however, is not left without any recourse should the
title. First, Entry No. 520469 does not mention any court order as basis for the foreclosure and sale of the two other mortgaged properties be insufficient to
cancellation of the adverse claim. Second, the adverse claim was not a mortgage cover Dr. Rosario’s loan, for the bank may still bring a proper suit against Dr.
which could be cancelled with Dr. Rosario’s Cancellation and Discharge of Rosario to collect the unpaid balance.
Mortgage. And third, the adverse claim was against Dr. Rosario, yet it was
cancelled based on a document also executed by Dr. Rosario.
The rules on accession shall govern the improvements on Lot No. 356-A and the
rents thereof.
It is a well-settled rule that a purchaser or mortgagee cannot close his eyes to
facts which should put a reasonable man upon his guard, and then claim that he
The accessory follows the principal. The right of accession is recognized under
acted in good faith under the belief that there was no defect in the title of the
Article 440 of the Civil Code which states that "[t]he ownership of property gives
vendor or mortgagor. His mere refusal to believe that such defect exists, or his
the right by accession to everything which is produced thereby, or which is
willful closing of his eyes to the possibility of the existence of a defect in the
incorporated or attached thereto, either naturally or artificially."
vendor's or mortgagor's title, will not make him an innocent purchaser or
There is no question that Dr. Rosario is the builder of the improvements on Lot having the option of refunding the amount of the expenses or of paying the
No. 356-A. The Torbela siblings themselves alleged that they allowed Dr. Rosario increase in value which the thing may have acquired by reason thereof.
to register Lot No. 356-A in his name so he could obtain a loan from DBP, using
said parcel of land as security; and with the proceeds of the loan, Dr. Rosario had ART. 548. Expenses for pure luxury or mere pleasure shall not be refunded to
a building constructed on Lot No. 356-A, initially used as a hospital, and then the possessor in good faith; but he may remove the ornaments with which he has
later for other commercial purposes. Dr. Rosario supervised the construction of embellished the principal thing if it suffers no injury thereby, and if his successor
the building, which began in 1965; fully liquidated the loan from DBP; and in the possession does not prefer to refund the amount expended.
maintained and administered the building, as well as collected the rental income
therefrom, until the Torbela siblings instituted Civil Case No. U-4359 before the
RTC on February 13, 1986. Whatever is built, planted, or sown on the land of another, and the improvements
or repairs made thereon, belong to the owner of the land. Where, however, the
planter, builder, or sower has acted in good faith, a conflict of rights arises
When it comes to the improvements on Lot No. 356-A, both the Torbela siblings between the owners and it becomes necessary to protect the owner of the
(as landowners) and Dr. Rosario (as builder) are deemed in bad faith. The improvements without causing injustice to the owner of the land. In view of the
Torbela siblings were aware of the construction of a building by Dr. Rosario on impracticability of creating what Manresa calls a state of "forced co-ownership,"
Lot No. 356-A, while Dr. Rosario proceeded with the said construction despite his the law has provided a just and equitable solution by giving the owner of the land
knowledge that Lot No. 356-A belonged to the Torbela siblings. This is the case the option to acquire the improvements after payment of the proper indemnity or
contemplated under Article 453 of the Civil Code, which reads: to oblige the builder or planter to pay for the land and the sower to pay the proper
rent. It is the owner of the land who is allowed to exercise the option because his
ART. 453. If there was bad faith, not only on the part of the person who built, right is older and because, by the principle of accession, he is entitled to the
planted or sowed on the land of another, but also on the part of the owner of such 85
ownership of the accessory thing.
land, the rights of one and the other shall be the same as though both had acted
in good faith.
The landowner has to make a choice between appropriating the building by
paying the proper indemnity or obliging the builder to pay the price of the land.
It is understood that there is bad faith on the part of the landowner whenever the But even as the option lies with the landowner, the grant to him, nevertheless, is
act was done with his knowledge and without opposition on his part. (Emphasis preclusive. He must choose one. He cannot, for instance, compel the owner of
supplied.) the building to remove the building from the land without first exercising either
option. It is only if the owner chooses to sell his land, and the builder or planter
When both the landowner and the builder are in good faith, the following rules fails to purchase it where its value is not more than the value of the
govern: improvements, that the owner may remove the improvements from the land. The
owner is entitled to such remotion only when, after having chosen to sell his land,
86
ART. 448. The owner of the land on which anything has been built, sown or the other party fails to pay for the same.
planted in good faith, shall have the right to appropriate as his own the works,
sowing or planting, after payment of the indemnity provided for in articles 546 and This case then must be remanded to the RTC for the determination of matters
548, or to oblige the one who built or planted to pay the price of the land, and the necessary for the proper application of Article 448, in relation to Article 546, of
one who sowed, the proper rent. However, the builder or planter cannot be the Civil Code. Such matters include the option that the Torbela siblings will
obliged to buy the land if its value is considerably more than that of the building choose; the amount of indemnity that they will pay if they decide to appropriate
or trees. In such case, he shall pay reasonable rent, if the owner of the land does the improvements on Lot No. 356-A; the value of Lot No. 356-A if they prefer to
not choose to appropriate the building or trees after proper indemnity. The parties sell it to Dr. Rosario; or the reasonable rent if they opt to sell Lot No. 356-A to Dr.
shall agree upon the terms of the lease and in case of disagreement, the court Rosario but the value of the land is considerably more than the improvements.
shall fix the terms thereof. The determination made by the Court of Appeals in its Decision dated June 29,
1999 that the current value of Lot No. 356-A is ₱1,200,000.00 is not supported by
ART. 546. Necessary expenses shall be refunded to every possessor; but only any evidence on record.
the possessor in good faith may retain the thing until he has been reimbursed
therefor. Should the Torbela siblings choose to appropriate the improvements on Lot No.
87
356-A, the following ruling of the Court in Pecson v. Court of Appeals  is
Useful expenses shall be refunded only to the possessor in good faith with the relevant in the determination of the amount of indemnity under Article 546 of the
same right of retention, the person who has defeated him in the possession Civil Code:
Article 546 does not specifically state how the value of the useful improvements The Court of Appeals ordered Dr. Rosario to pay the Torbela siblings
should be determined. The respondent court and the private respondents ₱300,000.00 as moral damages; ₱200,000.00 as exemplary damages; and
espouse the belief that the cost of construction of the apartment building in 1965, ₱100,000.00 as attorney’s fees.
and not its current market value, is sufficient reimbursement for necessary and
useful improvements made by the petitioner. This position is, however, not in Indeed, Dr. Rosario’s deceit and bad faith is evident when, being fully aware that
consonance with previous rulings of this Court in similar cases. In Javier vs. he only held Lot No. 356-A in trust for the Torbela siblings, he mortgaged said
Concepcion, Jr., this Court pegged the value of the useful improvements property to PNB and Banco Filipino absent the consent of the Torbela siblings,
consisting of various fruits, bamboos, a house and camarin made of strong and caused the irregular cancellation of the Torbela siblings’ adverse claim on
material based on the market value of the said improvements. In Sarmiento vs. TCT No. 52751. Irrefragably, Dr. Rosario’s betrayal had caused the Torbela
Agana, despite the finding that the useful improvement, a residential house, was siblings (which included Dr. Rosario’s own mother, Eufrosina Torbela Rosario)
built in 1967 at a cost of between eight thousand pesos (₱8,000.00) to ten mental anguish, serious anxiety, and wounded feelings. Resultantly, the award of
thousand pesos (₱10,000.00), the landowner was ordered to reimburse the moral damages is justified, but the amount thereof is reduced to ₱200,000.00.
builder in the amount of forty thousand pesos (₱40,000.00), the value of the
house at the time of the trial. In the same way, the landowner was required to pay
the "present value" of the house, a useful improvement, in the case of De In addition to the moral damages, exemplary damages may also be imposed
Guzman vs. De la Fuente, cited by the petitioner. given that Dr. Rosario’s wrongful acts were accompanied by bad faith. However,
judicial discretion granted to the courts in the assessment of damages must
always be exercised with balanced restraint and measured objectivity. The
The objective of Article 546 of the Civil Code is to administer justice between the circumstances of the case call for a reduction of the award of exemplary
parties involved. In this regard, this Court had long ago stated in Rivera vs. damages to ₱100,000.00.
Roman Catholic Archbishop of Manila that the said provision was formulated in
trying to adjust the rights of the owner and possessor in good faith of a piece of
land, to administer complete justice to both of them in such a way as neither one As regards attorney's fees, they may be awarded when the defendant's act or
nor the other may enrich himself of that which does not belong to him. Guided by omission has compelled the plaintiff to litigate with third persons or to incur
this precept, it is therefore the current market value of the improvements which expenses to protect his interest. Because of Dr. Rosario’s acts, the Torbela
should be made the basis of reimbursement. A contrary ruling would unjustly siblings were constrained to institute several cases against Dr. Rosario and his
enrich the private respondents who would otherwise be allowed to acquire a spouse, Duque-Rosario, as well as Banco Filipino, which had lasted for more
highly valued income-yielding four-unit apartment building for a measly amount. than 25 years. Consequently, the Torbela siblings are entitled to an award of
Consequently, the parties should therefore be allowed to adduce evidence on the attorney's fees and the amount of ₱100,000.00 may be considered rational, fair,
present market value of the apartment building upon which the trial court should and reasonable.
base its finding as to the amount of reimbursement to be paid by the
88
landowner.  (Emphases supplied.) Banco Filipino is entitled to a writ of possession for Lot No. 5-F-8-C-2-B-2-A.

Still following the rules of accession, civil fruits, such as rents, belong to the The Court emphasizes that Pet. Case No. U-822, instituted by Banco Filipino for
89 the issuance of a writ of possession before the RTC of Urdaneta, included only
owner of the building.  Thus, Dr. Rosario has a right to the rents of the Lot No. 5-F-8-C-2-B-2-A and Lot No. 356-A (Lot No. 4489, the third property
improvements on Lot No. 356-A and is under no obligation to render an mortgaged to secure Dr. Rosario’s loan from Banco Filipino, is located in
accounting of the same to anyone. In fact, it is the Torbela siblings who are Dagupan City, Pangasinan, and the petition for issuance of a writ of possession
required to account for the rents they had collected from the lessees of the for the same should be separately filed with the RTC of Dagupan City). Since the
commercial building and turn over any balance to Dr. Rosario. Dr. Rosario’s right Court has already granted herein the reconveyance of Lot No. 356-A from Banco
to the rents of the improvements on Lot No. 356-A shall continue until the Torbela Filipino to the Torbela siblings, the writ of possession now pertains only to Lot
siblings have chosen their option under Article 448 of the Civil Code. And in case No. 5-F-8-C-2-B-2-A.
the Torbela siblings decide to appropriate the improvements, Dr. Rosario shall
have the right to retain said improvements, as well as the rents thereof, until the
90 To recall, the Court of Appeals affirmed the issuance by the RTC of a writ of
indemnity for the same has been paid. possession in favor of Banco Filipino. Dr. Rosario no longer appealed from said
judgment of the appellate court. Already legally separated from Dr. Rosario,
Dr. Rosario is liable for damages to the Torbela siblings. Duque-Rosario alone challenges the writ of possession before this Court through
her Petition in G.R. No. 140553.
Duque-Rosario alleges in her Petition that Lot No. 5-F-8-C-2-B-2-A had been judicial action, which in every case, must be filed within the one-year period of
registered in her name under TCT No. 104189. Yet, without a copy of TCT No. redemption. The filing of the court action to enforce redemption, being equivalent
104189 on record, the Court cannot give much credence to Duque-Rosario’s to a formal offer to redeem, would have the effect of preserving his redemptive
claim of sole ownership of Lot No. 5-F-8-C-2-B-2-A. Also, the question of whether 95
rights and "freezing" the expiration of the one-year period.  But no such action
Lot No. 5-F-8-C-2-B-2-A was the paraphernal property of Duque-Rosario or the was instituted by the Torbela siblings or either of the spouses Rosario.
conjugal property of the spouses Rosario would not alter the outcome of Duque-
Rosario’s Petition.
Duque-Rosario also cannot bar the issuance of the writ of possession over Lot
No. 5-F-8-C-2-B-2-A in favor of Banco Filipino by invoking the pendency of Civil
The following facts are undisputed: Banco Filipino extrajudicially foreclosed the Case No. U-4359, the Torbela siblings’ action for recovery of ownership and
mortgage constituted on Lot No. 5-F-8-C-2-B-2-A and the two other properties possession and damages, which supposedly tolled the period for redemption of
after Dr. Rosario defaulted on the payment of his loan; Banco Filipino was the the foreclosed properties. Without belaboring the issue of Civil Case No. U-4359
highest bidder for all three properties at the foreclosure sale on April 2, 1987; the suspending the redemption period, the Court simply points out to Duque-Rosario
Certificate of Sale dated April 2, 1987 was registered in April 1987; and based on that Civil Case No. U-4359 involved Lot No. 356-A only, and the legal
the Certificate of Final Sale dated May 24, 1988 and Affidavit of Consolidation consequences of the institution, pendency, and resolution of Civil Case No. U-
dated May 25, 1988, the Register of Deeds cancelled TCT No. 104189 and 4359 apply to Lot No. 356-A alone.
issued TCT No. 165812 in the name of Banco Filipino for Lot No. 5-F-8-C-2-B-2-
A on June 7, 1988.
Equally unpersuasive is Duque-Rosario’s argument that the writ of possession
over Lot No. 5-F-8-C-2-B-2-A should not be issued given the defects in the
The Court has consistently ruled that the one-year redemption period should be conduct of the foreclosure sale (i.e., lack of personal notice to Duque-Rosario)
counted not from the date of foreclosure sale, but from the time the certificate of and consolidation of title (i.e., failure to provide Duque-Rosario with copies of the
91
sale is registered with the Registry of Deeds.  No copy of TCT No. 104189 can Certificate of Final Sale).
be found in the records of this case, but the fact of annotation of the Certificate of
Sale thereon was admitted by the parties, only differing on the date it was made: The right of the purchaser to the possession of the foreclosed property becomes
April 14, 1987 according to Banco Filipino and April 15, 1987 as maintained by absolute upon the expiration of the redemption period. The basis of this right to
Duque-Rosario. Even if the Court concedes that the Certificate of Sale was possession is the purchaser's ownership of the property. After the consolidation
annotated on TCT No. 104189 on the later date, April 15, 1987, the one-year of title in the buyer's name for failure of the mortgagor to redeem, the writ of
92
redemption period already expired on April 14, 1988.  The Certificate of Final possession becomes a matter of right and its issuance to a purchaser in an
Sale and Affidavit of Consolidation were executed more than a month thereafter, extrajudicial foreclosure is merely a ministerial function.
96
1avvphi1

on May 24, 1988 and May 25, 1988, respectively, and were clearly not
premature.
The judge with whom an application for a writ of possession is filed need not look
into the validity of the mortgage or the manner of its foreclosure. Any question
It is true that the rule on redemption is liberally construed in favor of the original regarding the validity of the mortgage or its foreclosure cannot be a legal ground
owner of the property. The policy of the law is to aid rather than to defeat him in for the refusal to issue a writ of possession. Regardless of whether or not there is
93
the exercise of his right of redemption.  However, the liberal interpretation of the a pending suit for the annulment of the mortgage or the foreclosure itself, the
rule on redemption is inapplicable herein as neither Duque-Rosario nor Dr. purchaser is entitled to a writ of possession, without prejudice, of course, to the
Rosario had made any attempt to redeem Lot No. 5-F-8-C-2-B-2-A. Duque- eventual outcome of the pending annulment case. The issuance of a writ of
Rosario could only rely on the efforts of the Torbela siblings at redemption, which possession in favor of the purchaser in a foreclosure sale is a ministerial act and
were unsuccessful. While the Torbela siblings made several offers to redeem Lot does not entail the exercise of discretion.
97
No. 356-A, as well as the two other properties mortgaged by Dr. Rosario, they did
not make any valid tender of the redemption price to effect a valid redemption.
The general rule in redemption is that it is not sufficient that a person offering to WHEREFORE, in view of the foregoing, the Petition of the Torbela siblings in
redeem manifests his desire to do so. The statement of intention must be G.R. No. 140528 is GRANTED, while the Petition of Lena Duque-Rosario in G.R.
accompanied by an actual and simultaneous tender of payment. The redemption No. 140553 is DENIED for lack of merit. The Decision dated June 29, 1999 of the
price should either be fully offered in legal tender or else validly consigned in Court of Appeals in CA-G.R. CV No. 39770, which affirmed with modification the
court. Only by such means can the auction winner be assured that the offer to Amended Decision dated January 29, 1992 of the RTC in Civil Case Nos. U-4359
94 and U-4733 and Pet. Case No. U-822, is AFFIRMED WITH MODIFICATIONS, to
redeem is being made in good faith.  In case of disagreement over the now read as follows:
redemption price, the redemptioner may preserve his right of redemption through
 (1) Banco Filipino is ORDERED to reconvey Lot No. 356-A to the
Torbela siblings;

(2) The Register of Deeds of Pangasinan is ORDERED to cancel TCT

No. 165813 in the name of Banco Filipino and to issue a new certificate
of title in the name of the Torbela siblings for Lot No. 356-A;

(3) The case is REMANDED to the RTC for further proceedings to

determine the facts essential to the proper application of Articles 448
and 546 of the Civil Code, particularly: (a) the present fair market value
of Lot No. 356-A; (b) the present fair market value of the improvements
thereon; (c) the option of the Torbela siblings to appropriate the
improvements on Lot No. 356-A or require Dr. Rosario to purchase Lot
No. 356-A; and (d) in the event that the Torbela siblings choose to
require Dr. Rosario to purchase Lot No. 356-A but the value thereof is
considerably more than the improvements, then the reasonable rent of
Lot No. 356-A to be paid by Dr. Rosario to the Torbela siblings;

(4) The Torbela siblings are DIRECTED to submit an accounting of the

rents of the improvements on Lot No. 356-A which they had received
and to turn over any balance thereof to Dr. Rosario;

(5) Dr. Rosario is ORDERED to pay the Torbela siblings ₱200,000.00 as

moral damages, ₱100,000.00 as exemplary damages, and ₱100,000.00
as attorney’s fees; and

(6) Banco Filipino is entitled to a writ of possession over Lot-5-F-8-C-2-

B-2-A, covered by TCT No. 165812. The RTC Branch Clerk of Court is
ORDERED to issue a writ of possession for the said property in favor of
Banco Filipino.

SO ORDERED.
 SCRA 193, 204-205). In addition, considerations of speedy justice and
avoidance of multiplicity of suits impel Us to hold and rule that under the
facts of the case at bar, the trial court, acting as a land registration court,
may adjudicate the land sought to be registered to either or both of the
applicant and oppositor, in whole or in part, based on evidence submitted
SECOND DIVISION to the court showing that the party has proper title for registration.
(Section 37, Act 496.)
[G.R. No. L-46439. April 24, 1984.]
3. ID.; ID.; ISSUE OF WHETHER COURT OF FIRST INSTANCE SHOULD
ANDREA M. MOSCOSO, Petitioner, v. COURT OF APPEALS and RESOLVE PARTICULAR MATTER IN THE EXERCISE OF ITS GENERAL OR ITS
MAXIMINA L. MORON, Respondents. LIMITED JURISDICTION AS A LAND REGISTRATION COURT IS A
PROCEDURAL QUESTION; CASE AT BAR. — In any event, as the Supreme
Jesus B. Velasco for Petitioner. Court said in Nicanor T. Santos v. Rosa Ganayo, L-31854, Sept. 9, 1972,
116 SCRA 431, "Whether a particular matter should be resolved by the
Custodio P. Cañete for Private Respondent. Court of First Instance in the exercise of its general jurisdiction or of its
limited jurisdiction as a special court (Probate, Land Registration, etc.) is in
reality not a jurisdictional question. It is in essence a procedural question
SYLLABUS involving a mode of practice which may be waived." In meeting the issue
raised by the oppositor as to her status as an acknowledged natural child
as a result of her voluntary recognition appearing in Exhibit "2", the
1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF THE APPELLATE oppositor (now the petitioner herein) had waived the procedural question
COURT SUPPORTED BY SUBSTANTIAL EVIDENCE MAY NOT BE REVIEWED and she may not be allowed to raise the same in the present petition.
ON APPEAL BY CERTIORARI; CASE AT BAR. — It is the well-established
rule that findings of fact of the Court of Appeals may not be reviewed by 4. CIVIL LAW; LAND REGISTRATION; PROCEEDINGS ARE IN REM;
the Supreme Court in an appeal by certiorari where such findings are ably PERSONAL NOTICE TO ALL CLAIMANTS NOT NECESSARY. — The
supported by substantial evidence on record, the same being binding, final proceedings for the registration of title to land under the Torrens system is
and conclusive (Spouses Dalida v. CA, 117 SCRA 480). Hence, the finding an action in rem, not in personam, hence, personal notice to all claimants
of the appellate court that the power of attorney, was not materially of the res is not necessary to give the court jurisdiction to deal with and
altered before the same was presented to the court below; that it is "more dispose of the res, and neither may lack of such personal notice vitiate or
likely that a mistake was committed in the preparation thereof; that the invalidate the decree or title issued in a registration proceeding, for the
person who typed the document had to make a slight erasure and State, as sovereign over the land situated within it, may provide for the
correction in typing correctly the word "daughter" and that the power of adjudication of title in a proceeding in rem or in the nature of a proceeding
attorney, as corrected, was then given to Pascual Monge and Maximina L. in rem, which shall be binding upon all persons, known or unknown.
Moron for their signature. As such, the correction cannot be considered a
deliberate alteration or falsification as depicted by appellant", is a finding 5. ID.; FAMILY RELATIONS; PATERNITY AND FILIATION; RECOGNITION OF
of fact which cannot be disturbed. We agree with the court that said power NATURAL CHILDREN; RETROACTIVE APPLICATION OF ARTICLE 278 OF
of attorney is an authentic writing wherein the father, Pascual Monge, THE CIVIL CODE; CASE AT BAR. — We have affirmed the ruling of the
voluntarily recognized Maximina L. Moron as his daughter, and since appellate court that Exhibit "2" which is the power of attorney is an
Pascual Monge had the legal capacity to contract marriage at the time of authentic writing wherein the father, Pascual Monge, voluntarily
the conception, Maximina is a natural child, entitled to share in the recognized Maximina L. Moron as his daughter, applying the provisions of
inheritance of the property in question. Article 278, New Civil Code, which provides that recognition shall be made
in the record of birth, a will, a statement before a court of record, or in any
2. ID.; JURISDICTION OF COURTS; COURT OF FIRST INSTANCE SITTING authentic writing. We apply Article 278, New Civil Code retroactively to the
AS LAND REGISTRATION COURT, CAN PASS UPON ISSUE OF FILIATION. case of Maximina L. Moron although she was born before the effectivity of
— Petitioner’s contention that the Court of First Instance, acting as a land the New Civil Code in view of the provisions of Article 2260 of the New
registration court, has no jurisdiction to pass upon the issue whether the Civil Code, which states that the voluntary recognition of a natural child
oppositor is the acknowledged natural child of Pascual Monge, is shall take place according to this Code, even if the child was born before
untenable. We have a number of cases that answer petitioner’s position the effectivity of this body of laws.
(citing the ruling in Florentino v. Encarnacion, L-27697, Sept. 30, 1977, 79
6. ID.; ID.; ID.; ID.; REASON. — The reason for giving retroactive effect said lot was assessed in her name under Tax Declaration No. 28260 dated
to Article 2260 is indicated in the Report of the Code Commission, page May 24, 1964 (Exhibit "H") and that the taxes are fully paid up to the
169, thus: "The liberalized mode of recognition is in harmony with the aim current year; that to the best of her knowledge and belief, there is no
of the proposed code to do justice to illegitimate children. Hence, its incumbrance or any kind whatsoever affecting said land nor any other
retroactive effect." (See Civil Code Annotated by Padilla, Vol. VII, 1975 person having interest therein, legal or equitable, in possession,
Ed., p. 709). remainder, reversion or expectancy; and that the land is now being rented
by lessees of the applicant, namely, Angel Encenares, Olanda Bribe,
AQUINO, J., concurring:chanrob1es virtual 1aw library Timoteo Noblejas, Felisa Adre, Celestina Solana, Baltazar Collado, all of
Palo, Leyte.
1. CIVIL LAW; PERSONS AND FAMILY RELATIONS; FILIATION;
RECOGNITION OF NATURAL CHILDREN; POWER OF ATTORNEY, AN After due publication of the Notice of Initial Hearing of the petition in the
AUTHENTIC WRITING TO EFFECT RECOGNITION. — Only Maxima Lanuncia Official Gazette, Vol. 62, Nos. 46 and 47, issues dated November 14 and
Moron can be considered Pascual’s acknowledged natural child because of 21, 1966 (Exhibit "C"), only the Highway District Engineer of Leyte as
the power of attorney which he had executed in 1945 in her favor. it is a public oppositors, and Concordia Lanuncia, Flaviano L. Marchadesch, Jr.,
"documento publico" within the meaning of Article 131 of the old Code. and herein private respondent Maximina L. Moron as private oppositors
Pascual M. Monge’s estate is governed by Articles 840 and 942 of the old appeared for the initial hearing before the trial court.
Civil Code under which each acknowledged natural child is entitled to one-
half portion pertaining to each of the legitimate children who have not The trial court summarily dismissed the opposition of the Highway District
received any betterment. Engineer who merely sought to secure a reservation for a road right-of-
way in favor of the national government in view of petitioner’s willingness
to annotate the same on the certificate of title which might issue. The
opposition of the private parties thus remained.
DECISION
The written opposition substantially allege that they, including one Mrs.
Apolonia L. Marchadesch who died in 1963 and survived by her only issue,
GUERRERO, J.: oppositor Flaviano L. Marchadesch, are the illegitimate children of the late
Zenona Lanuncia and the recognized natural children of the late Pascual
Monge who died in 1950 and father of applicant Andrea M. Moscoso; that
the late Zenona Lanuncia, from the age of three, became a protegee of the
Petition for review on certiorari of the decision of the defunct Court of late spouses, Saturnino Monge and Isidra Vigera Monge, legitimate parents
Appeals 1 (now the Intermediate Appellate Court) in C.A.-G.R. No. 52187- of Pascual Monge and Juan Monge, now deceased; that Isidra Vigera
B entitled "Application for Land Registration Under Act No. 496 — Andrea Monge was the original owner of the parcel of land applied for; that Isidra
M. Moscoso, applicant-appellant versus Maximina L. Moron, Et Al., Monge, long before she died on April 15, 1915, and after Pascual Monge
oppositors-appellees" which affirmed the judgment of the Court of First legally got married to the mother of the applicant and brother and sisters,
Instance of Tacloban City in Land Registration Case No. N-134. and in order to provide a home and subsistence to the oppositors, their
sister and mother, all of which are girls, effected a verbal partition of her
Sometime on March 22, 1966, petitioner applied for land registration of a lands with her sons, Pascual, Juan and with the herein oppositor, who were
1,147 square meters residential lot situated in the poblacion of the already at their teens, which, by virtue of said partition, the land herein
municipality of Palo, province of Leyte, bounded and described in Survey applied for registration passed to the hands of the oppositors for their
Plan Psu-54699 of the then General Land Registration Office as verified home; that the oppositors have no knowledge that this parcel of land
and approved under date June 16, 1927. Her application substantially forms part of the inheritance of the applicant and of a partial partition
stated that petitioner is the owner in fee simple of the land and among the applicant and her brother and sisters; that the oppositors have,
improvements thereon as her acquisition by inheritance from her father, if not legal, an equitable title to the land as judged from the circumstances
the late Pascual Monge y Vigera who died on June 9, 1950, and that the surrounding the oppositors’ case; they deny the allegation that applicant
same parcel of land is her share in a partial partition of estate she and her and her predecessors in interest have been in continuous, public, actual
brothers and sisters executed on May 22, 1964 at Palo, Leyte (Exhibit and adverse possession of the land from time immemorial, the truth being
"K"); that she and her predecessors in interest have been in continuous, that the oppositors exercised exclusive dominion over the land and are in
public, actual and adverse possession of the land applied for since time actual and continuous possession over it from time immemorial to the
immemorial until the present; that at the last assessment for taxation, present and that should the verbal partition effected before the death of
Isidra Vigera Monge in 1915 being insufficient to pass title to the Moron, wherein he stated that Maximina is his daughter and appointed her
oppositor, then by virtue of acquisitive prescription caused by the open, as his Attorney-in-Fact to transact with the United States Armed Forces in
continuous, uninterrupted, peaceful and adverse possession in favor of the Philippines in his behalf for the collection of rentals and other war
oppositors, they are entitled to the land invoking the benefits of Chapter damage claims due and payable to him. The court ruled that the power of
VIII of Commonwealth Act No. 141. 2 attorney was an authentic writing wherein Maximina Lanuncia was
voluntarily recognized as the daughter of Pascual Monge. As found by the
Upon the termination of the hearing on the merits, the Hon. Jesus N. trial court thus,
Borromeo, then Presiding Judge of the CFI, Tacloban City, rendered his
decision dated December 22, 1971, directing that the title over the land "Precisely, it would appear that, in his power of attorney executed on
should not be registered exclusively in the name of the applicant since "it February 11, 1945 in favor of Maximina L. Moron, Exhibit "2", Pascual
has been overwhelmingly established by them (the private oppositors) that Monge stated that Maximina is his daughter. The contention of petitioner
they and their sister Apolonia, who died in 1963, are the children of that said power of attorney was fraudulently altered in order to insert
Zenona Lanuncia and Pascual Monge resulting from the relations between therein the words `my daughter . . .’ does not seem to be well-taken
the two prior to the marriage of the latter with Guadalupe Oliver, mother because, from an examination of the document, the Court does not notice
of herein petitioner and her brothers, Elpidio, Salvador, Remedios, concrete indications of alteration having been made in order to suit the
Ruperto, and Abelardo (deceased), all surnamed Monge." 3 Hence, the ends of the herein oppositors.
judgment decreed:jgc:chanrobles.com.ph
"Thus, the Court is of the view that the late Pascual Monge, who had no
"IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered ordering impediment to marry Zenona Lanuncia when Maximina was conceived
the registration of title over the parcel of land situated in the poblacion of (Art. 119, Old Civil Code; Art. 269, New Civil Code) had voluntarily
the municipality of Palo, Province of Leyte, as described in the Plan Psu- recognized Maximina Lanuncia Moron as his child when in his power of
54699, Exhibit "E", and the technical description Exhibit "F", in the name attorney executed on February 11, 1945, he mentioned her as his
of the co-ownership of: (1) Andrea M. Moscoso, Filipino citizen, of legal daughter . . .’ 5
age, married to Salvador Moscoso, with postal address at Bugasong,
Antique for three-fourth (3/4) share; (2) Concordia Lanuncia, Filipino Petitioner assailed the Court’s decision in his motion for reconsideration,
citizen, of legal age, single, and a resident of Palo, Leyte, for one-twelfth contending that the disposition of the estate should be governed by the
(1/12) share; (3) Maximina L. Moron, Filipino citizen, of legal age, married, Old Civil Code (Spanish Civil Code of 1889) since he died on June 9, 1950
and a resident of Palo, Leyte, for (1/12) share; and, (4) Flaviano L. while the New Civil Code took effect only on August, 1950; that assuming
Marchadesch, Jr., son of the late Apolonia L. Marchadesch, for one-twelfth that the New Civil Code applies in the case at bar, the power of attorney
(1/12) share, subject to a reservation of a road right-of-way in favor of the (Exhibit "2") is not an authentic document to support voluntary recognition
Government of the Republic of the Philippines. because the words "my daughter" reveals a clear sign of erasure and is a
product of falsification as presented in the rebuttal testimony of her
After this judgment shall have become final, let the corresponding decree brother Elpidio Monge and that said document is not even a public
of registration be issued. document because it was merely acknowledged by the Municipal Mayor of
Palo, Leyte who had no authority to authenticate writings as public
SO ORDERED." 4 documents which could be done only by a notary public.

The trial court ruled that the verbal donation made by Isidra Vigera Vda. Acting upon the aforesaid motion for reconsideration, the Court modified
de Monge in favor of Zenona Lanuncia and the latter’s daughters by its decision in the Order dated May 25, 1972 with the following dispositive
Pascual Monge because they are of weaker sex, was ineffectual to transmit portion:jgc:chanrobles.com.ph
title of ownership over the land in question and that their adverse claim of
ownership even under extraordinary prescription of over thirty years could "IN VIEW OF THE FOREGOING, the judgment of December 22, 1971 is
not favor them because such claim is disputable due to their failure to hereby amended in the sense that the Court hereby orders the registration
declare the property for tax purposes in their name after the death of of title over the parcel of land situated in the poblacion of the municipality
Isidra Monge. of Palo, Province of Leyte, as described in the Plan Psu-54699, Exhibit "E",
and the technical description Exhibit "F" in the name of the co-ownership
The trial court, however, gave significant weight to the carbon copy of a of (1) Andrea M. Moscoso, Filipino citizen, of legal age, married to Salvador
power of attorney executed and signed by the late Pascual Monge on Moscoso, with postal address at Bugasong, Antique, for 13/14 share; and
February 11, 1945 (Exhibit "2", "2-A" to "2-C) in favor of Maximina L. (2) Maximina L. Moron for 1/14 share, subject to the reservation of a road
right-of-way in favor of the government of the Philippines. are guided and must comply with the well-established rule that findings of
fact of the Court of Appeals may not be reviewed by the Supreme Court in
After this judgment shall have become final, let the corresponding decree an appeal by certiorari where such findings are ably supported by
of registration be issued. substantial evidence on record, the same being binding, final and
conclusive. 6
SO ORDERED."cralaw virtua1aw library
Hence, the finding of the appellate court that the power of attorney,
Not satisfied with the amended judgment, petitioner elevated the case to Exhibit "2", was not materially altered before the same was presented to
the defunct Court of Appeals which affirmed the judgment of the lower the court below; that it is "more likely that a mistake was committed in
court. Hence, the instant petition before Us. the preparation thereof; that the person who typed the document had to
make a slight erasure and correction in typing correctly the word
Petitioner assigns practically the same errors allegedly committed by the "daughter" and that the power of attorney, as corrected, was then given to
trial court which were presented before the respondent Court of Appeals, Pascual Monge and Maximina L. Moron for their signature. As such, the
to wit:chanrob1es virtual 1aw library correction cannot be considered a deliberate alteration or falsification as
depicted by appellant", is a finding of fact which cannot be disturbed. We
I The lower court erred in holding that Pascual Monge voluntarily agree with the court that said power of attorney is an authentic writing
recognized Maximina Lanuncia Moron as his natural child by virtue of the wherein the father, Pascual Monge, voluntarily recognized Maximina L.
power of attorney (Exhibit "2") executed by him in favor of the latter. Moron as his daughter, and since Pascual Monge had the legal capacity to
contract marriage at the time of the conception, Maximina is a natural
II. The lower court erred in holding that said power of attorney (Exhibit child, entitled to share in the inheritance of the property in question.
"2") is not materially altered when in fact it was erased to suit the ends of
the oppositors. It may be so as argued by the petitioner that where the findings of the
Court of Appeals are contrary to those of the trial court, a minute scrutiny
III. The lower court erred in appreciating said power of attorney (Exhibit by the Supreme Court is in order and resort to the duly proven evidence
"2") as a public document. becomes necessary, citing Gonzales v. CA, G.R. No. 37453, May 25, 1979,
90 SCRA 183 and cases cited therein. We have in fact noted that the trial
IV. The lower court erred in making judicial pronouncements that court found no alteration in the power of attorney, Exhibit "2", when it
Maximina Lanuncia Moron as the acknowledged natural child of Pascual ruled that "from an examination of the document, the court does not
Monge conferring upon her legal right to inherit from the whole estate of notice concrete indication of alteration having been made therein in order
the late Pascual Monge who died on June 9, 1950 when her claim over the to suit the ends of the herein oppositor." (Decision, pp. 21-22, Record on
land subject of this land registration proceeding is that it was given to their Appeal), whereas respondent appellate court held that" (w)e find it more
mother Zenona Lanuncia by Isidra Vigera and for their long continuous likely that a mistake was committed in the preparation of the power of
possession acquired the same by acquisitive prescription. attorney that the person who typed the document had to make a slight
erasure and correction in typing correctly the word "daughter" and that the
V. The lower court erred in making judicial pronouncement of recognition power of attorney, as corrected was then given to Pascual Monge and
without a formal complaint, hearing on the merit and neither has Maximina Maximina L. Moron for their signature. As such, correction cannot be
Lanuncia Moron the status of a continuous possession of a natural child. considered a deliberate falsification, as depicted by appellant." (CA
Decision, p. 8)
VI. The lower court erred in ordering the registration of the land applied
for registration in favor of the applicant, Andrea M. Moscoso, only 13/14 We have indeed scrutinized minutely the documentary evidence in
share and to oppositor Maximina Lanuncia Moron 1/14 share in co- question, Exhibit "2", as We have ordered the elevation of the original
ownership. records before Us. We affirm the holding of the appellate court that "What
clearly appears to be the case, upon clear examination, is that there is no
The principal or decisive issue to be resolved herein is whether or not erasure of the portion whereon "my" was typed. If, really, such 14-letter
oppositor-appellee Maximina L. Moron had been acknowledged by her word was erased and in lieu thereof the word "daughter" was typed or
illegitimate father, Pascual Monge (now deceased) in view of which, as superimposed, the erasure would be very noticeable and visible as the
held by the trial court and affirmed by the respondent appellate court, word "daughter", which is shorter by six letters, cannot fully cover the
being an acknowledged natural daughter, she would be entitled to 1/14 space occupied by "administratrix." This could be easily seen by the naked
share in the land in question as her inheritance. In resolving this issue, We eye when the document, as in the instant case, was executed more than
25 years ago and has turned yellow with age. But this is not the case."
There is no inconsistency between the two findings of the trial and In addition, considerations of speedy justice and avoidance of multiplicity
appellate courts. Both support the authenticity of the document in ruling of suits impel Us to hold and rule that under the facts of the case at bar,
that there was no deliberate falsification, which We uphold. the trial court, acting as a land registration court, may adjudicate the land
sought to be registered to either or both of the applicant and oppositor, in
Petitioner’s contention that the Court of First Instance, acting as a land whole or in part, based on evidence submitted to the court showing that
registration court, has no jurisdiction to pass upon the issue whether the the party has proper title for registration. (Section 37, Act 496.)
oppositor is the acknowledged natural child of Pascual Monge, is
untenable. We have a number of cases that answer petitioner’s position. In any event, as the Supreme Court said in Nicanor T. Santos v. Rosa
Thus, in the case of Florentino v. Encarnacion, G.R. No. L-27697, Sept. 30, Ganayo, L-31854, Sept. 9, 1972, 116 SCRA 431, "Whether a particular
1977, 79 SCRA 193, 204-205, We ruled:jgc:chanrobles.com.ph matter should be resolved by the Court of First Instance in the exercise of
its general jurisdiction or of its limited jurisdiction as a special court
"Petitioner-appellants’ third assignment of error is not well-taken. Firstly, (Probate, Land Registration, etc.) is in reality not a jurisdictional question.
the otherwise rigid rule that the jurisdiction of the Land Registration Court, It is in essence a procedural question involving a mode of practice which
being special and limited in character and proceedings thereon summary in may be waived." In meeting the issue raised by the oppositor as to her
nature, does not extend to cases involving issues properly litigable in other status as an acknowledged natural child as a result of her voluntary
independent suits or ordinary civil actions, has time and again been recognition appearing in Exhibit "2", the oppositor (now the petitioner
relaxed in special and exceptional circumstances. (See Government of P.I. herein) had waived the procedural question and she may not be allowed to
v. Serafica, 61 Phil. 93 (1934); Caoibes v. Sison, 102 Phil. 19 (1957); raise the same in the present petition.chanroblesvirtualawlibrary
Luna v. Santos, 102 Phil. 588 (1957); Cruz v. Tan, 93 Phil. 348 (1953);
Gurbax Singh Pabla and Co. v. Reyes, 92 Phil. 117 (1952)). From these The proceedings for the registration of title to land under the Torrens
cases, it may be gleaned and gathered that the peculiarity of the system is an action in rem, not in personam, hence, personal notice to all
exceptions is based not alone on the fact that the Land Registration Courts claimants of the res is not necessary to give the court jurisdiction to deal
are likewise the same Courts of First Instance, but also the following with and dispose of the res, and neither may lack of such personal notice
premises: (1) Mutual consent of the parties or their acquiescence in vitiate or invalidate the decree or title issued in a registration proceeding,
submitting the aforesaid issues for the determination by the court in the for the State, as sovereign over the land situated within it, may provide for
registration proceedings; (2) Full opportunity given to the parties in the the adjudication of title in a proceeding in rem or in the nature of a
presentation of their respective sides of the issues and of the evidence in proceeding in rem, which shall be binding upon all persons, known or
support thereto; (3) Consideration by the court that the evidence already unknown. (City of Manila v. Lack Et. Al., 19 Phil. 324, 337; Roxas v.
of record is sufficient and adequate for rendering a decision upon these Enriquez, 29 Phil. 31; Director of Lands v. Roman Catholic Archbishop of
issues. (Aglipay v. De Los Reyes, L-12776, March 23, 1960) . . ."cralaw Manila, 41 Phil. 120; Aguilar v. Caogdan, 105 Phil. 661).
virtua1aw library
Under the above doctrine, petitioner’s assailment that `(t)he judicial
Upon a scrutiny of the proceedings in the trial court, We find that pronouncement (referring to the holding that the oppositor Maximina L.
petitioner filed a Motion for New Trial and/or Reconsideration wherein she Moron is the acknowledged natural child of Pascual Monge) which will
assailed the ruling of the trial court that based upon Exhibit "2", the power become conclusive and far-reaching and in effect binds the other heirs of
of attorney, the oppositor was an acknowledged natural child of the late Pascual Monge consisting of the brothers and sisters as well as the
Pascual Monge and entitled to a portion of the land subject of the land nephews and nieces of the petitioner who are not parties in this
registration proceedings. She claimed that the document was not authentic proceedings," is untenable.
and not a public document. In effect, petitioner acquiesced in submitting
the issue as to the status of the oppositor as an acknowledged natural Earlier, We have affirmed the ruling of the appellate court that Exhibit "2"
child entitled to successional rights and had the full opportunity to dispute which is the power of attorney is an authentic writing wherein the father,
the authenticity of the document in question as in fact, applicant’s brother, Pascual Monge, voluntarily recognized Maximina L. Moron as his daughter,
Elpidio Monge, gave rebuttal testimony to support petitioner’s theory that applying the provisions of Article 278, New Civil Code, which provides that
the document was a product of a falsification, which the trial court did not recognition shall be made in the record of birth, a will, a statement before
believe. Moreover, the court considered and deemed the evidence already a court of record, or in any authentic writing. We apply Article 278, New
of record sufficient and adequate for rendering a decision upon the issue Civil Code retroactively to the case of Maximina L. Moron although she was
thus raised. In doing so, We find no abuse of discretion committed by the born before the effectivity of the New Civil Code in view of the provisions
trial court. of Article 2260 of the New Civil Code, which states:jgc:chanrobles.com.ph
 share in view of the court’s realization that no documentary evidence was
"Art. 2260. The voluntary recognition of a natural child shall take place presented to prove that the other oppositors, Concordia Lanuncia and
according to this Code, even if the child was born before the effectivity of Apolonia Lanuncia (deceased) and mother of oppositor Flaviano
this body of laws."cralaw virtua1aw library Marchadesch, Jr. were acknowledged by Pascual Monge. In the interest of
justice, We must modify the above sharing in order to give the legal share
The reason for giving retroactive effect to Article 2260 is indicated in the of the oppositor as an acknowledged natural child.
Report of the Code Commission, page 169, thus: "The liberalized mode of
recognition is in harmony with the aim of the proposed code to do justice Since there are six (6) legitimate children including the petitioner Andrea
to illegitimate children. Hence, its retroactive effect." (See Civil Code M. Moscoso who had previously acquired the shares of her five (5) co-
Annotated by Padilla, Vol. VII, 1975 Ed., p. 709) heirs, and one (1) acknowledged natural child, the oppositor Maximina L.
Moron, herein private respondent who is entitled to one-half (1/2) the
In Caridad Cruz Vda. de Sy-Quia v. Court of Appeals and Jose Pedro share of each of the legitimate children (Article 840, Spanish Civil Code;
Reynaldo Sy-Quia, G.R. No. 62283, Nov. 25, 1983, the Supreme Court Article 895, New Civil Code), the proper sharing should be 12/13 to Andrea
squarely held:jgc:chanrobles.com.ph M. Moscoso and 1/13 to Maximina L. Moron.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
". . . Article 2260 of (the Civil Code of the Philippines) provides that `the
voluntary recognition of a natural child shall take place according to this WHEREFORE, IN VIEW OF THE FOREGOING, the decision appealed from is
Code, even if the child was born before the effectivity of this body of laws’ hereby MODIFIED in the sense that the adjudication of the land subject of
or before August 30, 1950. Hence, Article 278 may be given retroactive the land registration proceedings shall be in the co-ownership of
effect (p. 169, Report of the Code Commission, 7 Padilla, Civil Code, 1975 petitioner-applicant Andrea M. Moscoso for 12/13 share and to oppositor
Ed., p. 709)."cralaw virtua1aw library private respondent Maximina L. Moron for 1/13 share. In all other aspects,
the decision appealed from is hereby AFFIRMED. Costs against petitioner.
Under the Spanish Civil Code of 1889, an acknowledged natural child is
entitled to . . . "3. To receive the hereditary portion determined by this SO ORDERED.
Code." (Article 134). This hereditary portion is fixed under Article 840
which states:jgc:chanrobles.com.ph

"Art. 840. When the testator leaves legitimate children or descendants,

and also natural children, legally acknowledged, each of the latter shall be
entitled to one-half of the portion pertaining to each of the legitimate
children who have not received any betterment, provided that it may be
included within the freely disposable portion, from which it must be taken,
after the burial and funeral expenses have been paid."cralaw virtua1aw
library

The same share which is one-half of the legitime of each of the legitimate
children or descendants is given to each of the acknowledged natural
children under Article 895 of the New Civil Code, which
reads:jgc:chanrobles.com.ph

"Art. 895. The legitime of each of the acknowledged natural children and
each of the natural children by legal fiction shall consist of one-half of the
legitime of each of the legitimate children or descendants."cralaw
virtua1aw library

The final adjudication made by the trial court in its Order dated May 25,
1975 (affirmed by the Court of Appeals) directed the registration of the
land in question in the name of the co-ownership of petitioner Andrea M.
Moscoso for 13/14 share and Maximina L. Moron, the oppositor, for 1/14
 Republic of the Philippines Fourth – A piece of residential land located in the barrio of Cabalitian but we did not
SUPREME COURT measure it, the area is bounded on the north by Gabriel Bernardino; on the east by
Manila Fortunato Doronio; on the south by Geminiano Mendoza and on the west by a road to
Villasis. Constructed on said land is a house of light materials – also a part of the
THIRD DIVISION dowry. Value …200.00.6

G.R. No. 169454               December 27, 2007 It appears that the property described in the deed of donation is the one covered by
OCT No. 352. However, there is a significant discrepancy with respect to the identity
of the owner of adjacent property at the eastern side. Based on OCT No. 352, the
THE HEIRS OF MARCELINO DORONIO, NAMELY: REGINA AND FLORA, BOTH adjacent owners are Zacarias Najorda and Alejandro Najorda, whereas based on the
SURNAMED DORONIO, Petitioners, deed of donation, the owner of the adjacent property is Fortunato Doronio.
vs. Furthermore, said deed of donation remained a private document as it was never
HEIRS OF FORTUNATO DORONIO, NAMELY: TRINIDAD ROSALINA DORONIO- notarized.7
BALMES, MODING DORONIO, FLORENTINA DORONIO, AND ANICETA
ALCANTARA-MANALO, Respondents.
Both parties have been occupying the subject land for several decades8 although they
have different theories regarding its present ownership. According to petitioners, they
DECISION are now the owners of the entire property in view of the private deed of donation
propter nuptias in favor of their predecessors, Marcelino Doronio and Veronica Pico.
REYES, R.T., J.:
Respondents, on the other hand, claim that only half of the property was actually
For Our review on certiorari is the Decision1 of the Court of Appeals (CA) reversing incorporated in the said deed of donation because it stated that Fortunato Doronio,
that2 of the Regional Trial Court (RTC), Branch 45, Anonas, Urdaneta City, instead of Zacarias Najorda and Alejandro Najorda, is the owner of the adjacent
Pangasinan, in an action for reconveyance and damages. The CA declared property at the eastern side. Respondents posit that the donors respected and
respondents as rightful owners of one-half of the subject property and directed segregated the possession of Fortunato Doronio of the eastern half of the land. They
petitioners to execute a registerable document conveying the same to respondents. are the ones who have been possessing said land occupied by their predecessor,
Fortunato Doronio.
The Facts
Eager to obtain the entire property, the heirs of Marcelino Doronio and Veronica Pico
Spouses Simeon Doronio and Cornelia Gante, now both deceased, were the filed, on January 11, 1993, before the RTC in Urdaneta, Pangasinan a petition "For
registered owners of a parcel of land located at Barangay Cabalitaan, Asingan, the Registration of a Private Deed of Donation"9 docketed as Petition Case No. U-
Pangasinan covered by Original Certificate of Title (OCT) No. 352.3 The courts below 920. No respondents were named in the said petition10 although notices of hearing
described it as follows: were posted on the bulletin boards of Barangay Cabalitaan, Municipalities of Asingan
and Lingayen.11

Un terreno (Lote 1018), situada en el municipio de Asingan, Linda por el NE; con
propriedad de Gabriel Bernardino; con el SE con propriedad de Zacarias Najorda y During the hearings, no one interposed an objection to the petition.12 After the RTC
Alejandro Najorda; por el SO con propriedad de Geminiano Mendoza y por el NO con ordered a general default,13 the petition was eventually granted on September 22,
el camino para Villasis; midiendo una extension superficial mil ciento cincuenta y dos 1993. This led to the registration of the deed of donation, cancellation of OCT No. 352
metros cuadrados.4 and issuance of a new Transfer Certificate of Title (TCT) No. 44481 in the names of
Marcelino Doronio and Veronica Pico.14 Thus, the entire property was titled in the
names of petitioners’ predecessors.
The spouses had children but the records fail to disclose their number. It is clear,
however, that Marcelino Doronio and Fortunato Doronio, now both deceased, were
among them and that the parties in this case are their heirs. Petitioners are the heirs On April 28, 1994, the heirs of Fortunato Doronio filed a pleading before the RTC in
of Marcelino Doronio, while respondents are the heirs of Fortunato Doronio. the form of a petition in the same Petition Case No. U-920. The petition was for the
reconsideration of the decision of the RTC that ordered the registration of the subject
deed of donation. It was prayed in the petition that an order be issued declaring null
On April 24, 1919, a private deed of donation propter nuptias5 was executed by and void the registration of the private deed of donation and that TCT No. 44481 be
spouses Simeon Doronio and Cornelia Gante in favor of Marcelino Doronio and the cancelled. However, the petition was dismissed on May 13, 1994 on the ground that
latter’s wife, Veronica Pico. One of the properties subject of said deed of donation is the decision in Petition Case No. U-920 had already become final as it was not
the one that it described as follows: appealed.
Determined to remain in their possessed property, respondent heirs of Fortunato WHEREFORE, the assailed Decision dated June 28, 2002 is REVERSED and SET
Doronio (as plaintiffs) filed an action for reconveyance and damages with prayer for ASIDE. Declaring the appellants as rightful owners of one-half of the property now
preliminary injunction15 against petitioner heirs of Marcelino Doronio (as defendants) covered by TCT No. 44481, the appellees are hereby directed to execute a
before the RTC, Branch 45, Anonas, Urdaneta City, Pangasinan. Respondents registerable document conveying the same to appellants.
contended, among others, that the subject land is different from what was donated as
the descriptions of the property under OCT No. 352 and under the private deed of SO ORDERED.23
donation were different. They posited that spouses Simeon Doronio and Cornelia
Gante intended to donate only one-half of the property.
The appellate court determined that "(t)he intention to donate half of the disputed
property to appellees’ predecessors can be gleaned from the disparity of technical
During the pre-trial conference, the parties stipulated, among others, that the property descriptions appearing in the title (OCT No. 352) of spouses Simeon Doronio and
was originally covered by OCT No. 352 which was cancelled by TCT No. 44481. They Cornelia Gante and in the deed of donation propter nuptias executed on April 24,
also agreed that the issues are: (1) whether or not there was a variation in the 1919 in favor of appellees’ predecessors."24
description of the property subject of the private deed of donation and OCT No. 352;
(2) whether or not respondents had acquired one-half of the property covered by OCT
No. 352 by acquisitive prescription; (3) whether or not the transfer of the whole The CA based its conclusion on the disparity of the following technical descriptions of
property covered by OCT No. 352 on the basis of the registration of the private deed the property under OCT No. 352 and the deed of donation, to wit:
of donation notwithstanding the discrepancy in the description is valid; (4) whether or
not respondents are entitled to damages; and (5) whether or not TCT No. 44481 is The court below described the property covered by OCT No. 352 as follows:
valid.16
"Un terreno (Lote 1018), situada en el municipio de Asingan, Linda por el NE; con
RTC Decision propriedad de Gabriel Bernardino; con el SE con propriedad de Zacarias Najorda y
Alejandro Najorda; por el SO con propriedad de Geminiano Mendoza y por el NO con
After due proceedings, the RTC ruled in favor of petitioner heirs of Marcelino Doronio el camino para Villasis; midiendo una extension superficial mil ciento cincuenta y dos
(defendants). It concluded that the parties admitted the identity of the land which they metros cuadrados."
all occupy;17 that a title once registered under the torrens system cannot be defeated
by adverse, open and notorious possession or by prescription;18 that the deed of On the other hand, the property donated to appellees’ predecessors was described in
donation in consideration of the marriage of the parents of petitioners is valid, hence, the deed of donation as:
it led to the eventual issuance of TCT No. 44481 in the names of said parents;19 and
that respondent heirs of Fortunato Doronio (plaintiffs) are not entitled to damages as "Fourth – A piece of residential land located in the barrio of Cabalitian but we did not
they are not the rightful owners of the portion of the property they are claiming.20 measure it, the area is bounded on the north by Gabriel Bernardino; on the east by
Fortunato Doronio; on the south by Geminiano Mendoza and on the west by a road to
The RTC disposed of the case, thus: Villasis. Constructed on said land is a house of light materials – also a part of the
dowry. Value …200.00."25 (Emphasis ours)
WHEREFORE, premises considered, the Court hereby renders judgment
DISMISSING the herein Complaint filed by plaintiffs against defendants.21 Taking note "that the boundaries of the lot donated to Marcelino Doronio and
Veronica Pico differ from the boundaries of the land owned by spouses Simeon
Disagreeing with the judgment of the RTC, respondents appealed to the CA. They Doronio and Cornelia Gante," the CA concluded that spouses Simeon Doronio and
argued that the trial court erred in not finding that respondents’ predecessor-in- Cornelia Gante donated only half of the property covered by OCT No. 352.26
interest acquired one-half of the property covered by OCT No. 352 by tradition and/or
intestate succession; that the deed of donation dated April 26, 1919 was null and Regarding the allegation of petitioners that OCT No. 352 is inadmissible in evidence,
void; that assuming that the deed of donation was valid, only one-half of the property the CA pointed out that, "while the OCT is written in the Spanish language, this
was actually donated to Marcelino Doronio and Veronica Pico; and that respondents document already forms part of the records of this case for failure of appellees to
acquired ownership of the other half portion of the property by acquisitive interpose a timely objection when it was offered as evidence in the proceedings a
prescription.22 quo. It is a well-settled rule that any objection to the admissibility of such evidence not
raised will be considered waived and said evidence will have to form part of the
CA Disposition records of the case as competent and admitted evidence."27

In a Decision dated January 26, 2005, the CA reversed the RTC decision with the
following disposition:
The CA likewise ruled that the donation of the entire property in favor of petitioners’ The argument is untenable. The requirement that documents written in an unofficial
predecessors is invalid on the ground that it impairs the legitime of respondents’ language must be accompanied with a translation in English or Filipino as a
predecessor, Fortunato Doronio. On this aspect, the CA reasoned out: prerequisite for its admission in evidence must be insisted upon by the parties at the
trial to enable the court, where a translation has been impugned as incorrect, to
Moreover, We find the donation of the entire property in favor of appellees’ decide the issue.31 Where such document, not so accompanied with a translation in
predecessors invalid as it impairs the legitime of appellants’ predecessor. Article 961 English or Filipino, is offered in evidence and not objected to, either by the parties or
of the Civil Code is explicit. "In default of testamentary heirs, the law vests the the court, it must be presumed that the language in which the document is written is
inheritance, x x x, in the legitimate x x x relatives of the deceased, x x x." As Spouses understood by all, and the document is admissible in evidence.32
Simeon Doronio and Cornelia Gante died intestate, their property shall pass to their
lawful heirs, namely: Fortunato and Marcelino Doronio. Donating the entire property Moreover, Section 36, Rule 132 of the Revised Rules of Evidence provides:
to Marcelino Doronio and Veronica Pico and excluding another heir, Fortunato,
tantamounts to divesting the latter of his rightful share in his parents’ inheritance. SECTION 36. Objection. – Objection to evidence offered orally must be made
Besides, a person’s prerogative to make donations is subject to certain limitations, immediately after the offer is made.
one of which is that he cannot give by donation more than what he can give by will
(Article 752, Civil Code). If he does, so much of what is donated as exceeds what he
can give by will is deemed inofficious and the donation is reducible to the extent of Objection to a question propounded in the course of the oral examination of a witness
such excess.28 shall be made as soon as the grounds therefor shall become reasonably apparent.

Petitioners were not pleased with the decision of the CA. Hence, this petition under An offer of evidence in writing shall be objected to within three (3) days after notice of
Rule 45. the offer unless a different period is allowed by the court.

Issues In any case, the grounds for the objections must be specified. (Emphasis ours)

Petitioners now contend that the CA erred in: Since petitioners did not object to the offer of said documentary evidence on time, it is
now too late in the day for them to question its admissibility. The rule is that evidence
not objected may be deemed admitted and may be validly considered by the court in
1. DECLARING ADMISSIBILITY OF THE ORIGINAL CERTIFICATE OF arriving at its judgment.33 This is true even if by its nature, the evidence is
TITLE NO. 352 DESPITE OF LACK OF TRANSLATION THEREOF. inadmissible and would have surely been rejected if it had been challenged at the
proper time.34
2. (RULING THAT) ONLY HALF OF THE DISPUTED PROPERTY WAS
DONATED TO THE PREDECESSORS-IN-INTEREST OF THE HEREIN As a matter of fact, instead of objecting, petitioners admitted the contents of Exhibit
APPELLANTS. "A," that is, OCT No. 352 in their comment35 on respondents’ formal offer of
documentary evidence. In the said comment, petitioners alleged, among others, that
3. (ITS) DECLARATION THAT THE DONATION PROPTER NUPTIAS IS "Exhibits A, B, C, D, E, F and G, are admitted but not for the purpose they are offered
INNOFICIOUS, IS PREMATURE, AND THUS IT IS ILLEGAL AND because these exhibits being public and official documents are the best evidence of
UNPROCEDURAL.29 that they contain and not for what a party would like it to prove."36 Said evidence was
admitted by the RTC.37 Once admitted without objection, even though not admissible
Our Ruling under an objection, We are not inclined now to reject it.38 Consequently, the evidence
that was not objected to became property of the case, and all parties to the case are
considered amenable to any favorable or unfavorable effects resulting from the said
OCT No. 352 in Spanish Although Not evidence.39
Translated into English or Filipino Is
Admissible For Lack of Timely Objection
Issues on Impairment of Legitime
Should Be Threshed Out in a Special
Petitioners fault the CA for admitting OCT No. 352 in evidence on the ground that it is Proceeding, Not in Civil Action for
written in Spanish language. They posit that "(d)ocumentary evidence in an unofficial Reconveyance and Damages
language shall not be admitted as evidence, unless accompanied with a translation
into English or Filipino."30
On the other hand, petitioners are correct in alleging that the issue regarding the
impairment of legitime of Fortunato Doronio must be resolved in an action for the
settlement of estates of spouses Simeon Doronio and Cornelia Gante. It may not be
passed upon in an action for reconveyance and damages. A probate court, in the Applying these principles, an action for reconveyance and annulment of title with
exercise of its limited jurisdiction, is the best forum to ventilate and adjudge the issue damages is a civil action, whereas matters relating to settlement of the estate of a
of impairment of legitime as well as other related matters involving the settlement of deceased person such as advancement of property made by the decedent, partake of
estate.40 the nature of a special proceeding, which concomitantly requires the application of
specific rules as provided for in the Rules of Court.
An action for reconveyance with damages is a civil action, whereas matters relating to
settlement of the estate of a deceased person such as advancement of property Clearly, matters which involve settlement and distribution of the estate of the
made by the decedent, partake of the nature of a special proceeding. Special decedent fall within the exclusive province of the probate court in the exercise of its
proceedings require the application of specific rules as provided for in the Rules of limited jurisdiction.
Court.41
Thus, under Section 2, Rule 90 of the Rules of Court, questions as to advancement
As explained by the Court in Natcher v. Court of Appeals:42 made or alleged to have been made by the deceased to any heir may be heard and
determined by the court having jurisdiction of the estate proceedings, and the final
Section 3, Rule 1 of the 1997 Rules of Civil Procedure defines civil action and special order of the court thereon shall be binding on the person raising the questions and on
proceedings, in this wise: the heir.

x x x a) A civil action is one by which a party sues another for the enforcement or While it may be true that the Rules used the word "may," it is nevertheless clear that
protection of a right, or the prevention or redress of a wrong. the same provision contemplates a probate court when it speaks of the "court having
jurisdiction of the estate proceedings."
A civil action may either be ordinary or special. Both are governed by the rules for
ordinary civil actions, subject to specific rules prescribed for a special civil action. Corollarily, the Regional Trial Court in the instant case, acting in its general
jurisdiction, is devoid of authority to render an adjudication and resolve the issue of
advancement of the real property in favor of herein petitioner Natcher, inasmuch as
xxxx Civil Case No. 71075 for reconveyance and annulment of title with damages is not, to
our mind, the proper vehicle to thresh out said question. Moreover, under the present
c) A special proceeding is a remedy by which a party seeks to establish a status, a circumstances, the RTC of Manila, Branch 55, was not properly constituted as a
right or a particular fact. probate court so as to validly pass upon the question of advancement made by the
decedent Graciano Del Rosario to his wife, herein petitioner Natcher.
As could be gleaned from the foregoing, there lies a marked distinction between an
action and a special proceeding. An action is a formal demand of one’s right in a court We likewise find merit in petitioners’ contention that before any conclusion about the
of justice in the manner prescribed by the court or by the law. It is the method of legal share due to a compulsory heir may be reached, it is necessary that certain
applying legal remedies according to definite established rules. The term "special steps be taken first.43 The net estate of the decedent must be ascertained, by
proceeding" may be defined as an application or proceeding to establish the status or deducting all payable obligations and charges from the value of the property owned
right of a party, or a particular fact. Usually, in special proceedings, no formal by the deceased at the time of his death; then, all donations subject to collation would
pleadings are required unless the statute expressly so provides. In special be added to it. With the partible estate thus determined, the legitime of the
proceedings, the remedy is granted generally upon an application or motion. compulsory heir or heirs can be established; and only then can it be ascertained
whether or not a donation had prejudiced the legitimes.44
Citing American Jurisprudence, a noted authority in Remedial Law expounds further:
Declaration of Validity of Donation
It may accordingly be stated generally that actions include those proceedings which Can Be Challenged by an Interested
are instituted and prosecuted according to the ordinary rules and provisions relating Party Not Impleaded in Petition for
to actions at law or suits in equity, and that special proceedings include those Quieting of Title or Declaratory Relief
proceedings which are not ordinary in this sense, but is instituted and prosecuted or Where There is No Res Judicata.
according to some special mode as in the case of proceedings commenced without Moreover, This Court Can Consider
summons and prosecuted without regular pleadings, which are characteristics of a Factual Matter or Unassigned Error
ordinary actions x x x. A special proceeding must therefore be in the nature of a in the Interest of Substantial Justice.
distinct and independent proceeding for particular relief, such as may be instituted
independently of a pending action, by petition or motion upon notice. Nevertheless, petitioners cannot preclude the determination of validity of the deed of
donation on the ground that (1) it has been impliedly admitted by respondents; (2) it
has already been determined with finality by the RTC in Petition Case No. U-920; or as otherwise provided in these rules, prejudice the rights of persons not parties to the
(3) the only issue in an action for reconveyance is who has a better right over the action. (Emphasis ours)
land.45
However, respondents were not made parties in the said Petition Case No. U-
The validity of the private deed of donation propter nuptias in favor of petitioners’ 920.1âwphi1 Worse, instead of issuing summons to interested parties, the RTC
predecessors was one of the issues in this case before the lower courts. The pre-trial merely allowed the posting of notices on the bulletin boards of Barangay Cabalitaan,
order46 of the RTC stated that one of the issues before it is "(w)hether or not the Municipalities of Asingan and Lingayen, Pangasinan. As pointed out by the CA, citing
transfer of the whole property covered by OCT No. 352 on the basis of the private the ruling of the RTC:
deed of donation notwithstanding the discrepancy in the description is valid." Before
the CA, one of the errors assigned by respondents is that "THE TRIAL COURT x x x In the said case or Petition No. U-920, notices were posted on the bulletin
ERRED IN NOT FINDING THAT THE PRIVATE DEED OF DONATION DATED boards of barangay Cabalitaan, Municipalities of Asingan and Lingayen, Pangasinan,
APRIL 26, 1919 WAS NULL AND VOID."47 so that there was a notice to the whole world and during the initial hearing and/or
hearings, no one interposed objection thereto.54
The issue of the validity of donation is likewise brought to Us by petitioners as they
stated in their Memorandum48 that one of the issues to be resolved is regarding the Suits to quiet title are not technically suits in rem, nor are they, strictly speaking, in
alleged fact that "THE HONORABLE COURT OF APPEALS ERRED IN FINDING personam, but being against the person in respect of the res, these proceedings are
THE DONATION INVALID." We are thus poised to inspect the deed of donation and characterized as quasi in rem.55 The judgment in such proceedings is conclusive only
to determine its validity. between the parties.56 Thus, respondents are not bound by the decision in Petition
Case No. U-920 as they were not made parties in the said case.
We cannot agree with petitioners’ contention that respondents may no longer
question the validity of the deed of donation on the ground that they already impliedly The rules on quieting of title57 expressly provide that any declaration in a suit to quiet
admitted it. Under the provisions of the Civil Code, a void contract is inexistent from title shall not prejudice persons who are not parties to the action.
the beginning. The right to set up the defense of its illegality cannot be waived.49 The
right to set up the nullity of a void or non-existent contract is not limited to the parties
as in the case of annullable or voidable contracts; it is extended to third persons who That respondents filed a subsequent pleading58 in the same Petition Case No. U-920
are directly affected by the contract.50 after the decision there had become final did not change the fact that said decision
became final without their being impleaded in the case. Said subsequent pleading
was dismissed on the ground of finality of the decision.59
Consequently, although respondents are not parties in the deed of donation, they can
set up its nullity because they are directly affected by the same.51 The subject of the
deed being the land they are occupying, its enforcement will definitely affect them. Thus, the RTC totally failed to give respondents their day in court. As a result, they
cannot be bound by its orders. Generally accepted is the principle that no man shall
be affected by any proceeding to which he is a stranger, and strangers to a case are
Petitioners cannot also use the finality of the RTC decision in Petition Case No. U- not bound by judgment rendered by the court.60
92052 as a shield against the verification of the validity of the deed of donation.
According to petitioners, the said final decision is one for quieting of title.53 In other
words, it is a case for declaratory relief under Rule 64 (now Rule 63) of the Rules of Moreover, for the principle of res judicata to apply, the following must be present: (1)
Court, which provides: a decision on the merits; (2) by a court of competent jurisdiction; (3) the decision is
final; and (4) the two actions involve identical parties, subject matter and causes of
action.61 The fourth element is not present in this case. The parties are not identical
SECTION 1. Who may file petition. – Any person interested under a deed, will, because respondents were not impleaded in Petition Case No. U-920. While the
contract or other written instrument, or whose rights are affected by a statute, subject matter may be the same property covered by OCT No. 352, the causes of
executive order or regulation, or ordinance, may, before breach or violation thereof, action are different. Petition Case No. U-920 is an action for declaratory relief while
bring an action to determine any question of construction or validity arising under the the case below is for recovery of property.
instrument or statute and for a declaration of his rights or duties thereunder.
We are not persuaded by petitioners’ posture that the only issue in this action for
An action for the reformation of an instrument, to quiet title to real property or remove reconveyance is who has a better right over the land; and that the validity of the deed
clouds therefrom, or to consolidate ownership under Article 1607 of the Civil Code, of donation is beside the point.62 It is precisely the validity and enforceability of the
may be brought under this rule. deed of donation that is the determining factor in resolving the issue of who has a
better right over the property. Moreover, notwithstanding procedural lapses as to the
SECTION 2. Parties. – All persons shall be made parties who have or claim any appropriateness of the remedies prayed for in the petition filed before Us, this Court
interest which would be affected by the declaration; and no declaration shall, except can brush aside the technicalities in the interest of justice. In some instances, this
Court even suspended its own rules and excepted a case from their operation Logically, then, the cancellation of OCT No. 352 and the issuance of a new TCT No.
whenever the higher interests of justice so demanded.63 44481 in favor of petitioners’ predecessors have no legal basis. The title to the
subject property should, therefore, be restored to its original owners under OCT No.
Moreover, although respondents did not directly raise the issue of validity of the deed 352.
of donation at the commencement of the case before the trial court, it was
stipulated64 by the parties during the pre-trial conference. In any event, this Court has Direct reconveyance to any of the parties is not possible as it has not yet been
authority to inquire into any question necessary in arriving at a just decision of a case determined in a proper proceeding who among the heirs of spouses Simeon Doronio
before it.65 Though not specifically questioned by the parties, additional issues may and Cornelia Gante is entitled to it. It is still unproven whether or not the parties are
also be included, if deemed important for substantial justice to be rendered.66 the only ones entitled to the properties of spouses Simeon Doronio and Cornelia
Gante. As earlier intimated, there are still things to be done before the legal share of
Furthermore, this Court has held that although a factual issue is not squarely raised all the heirs can be properly adjudicated.75
below, still in the interest of substantial justice, this Court is not prevented from
considering a pivotal factual matter. The Supreme Court is clothed with ample Titled Property Cannot Be Acquired
authority to review palpable errors not assigned as such if it finds that their By Another By Adverse Possession
consideration is necessary in arriving at a just decision.67 or Extinctive Prescription

A rudimentary doctrine on appealed cases is that this Court is clothed with ample Likewise, the claim of respondents that they became owners of the property by
authority to review matters, even if they are not assigned as errors on appeal, if it acquisitive prescription has no merit. Truth to tell, respondents cannot successfully
finds that their consideration is necessary at arriving at a just decision of the invoke the argument of extinctive prescription. They cannot be deemed the owners by
case.68 Also, an unassigned error closely related to an error properly assigned or acquisitive prescription of the portion of the property they have been possessing. The
upon which the determination of the question raised by the error properly assigned is reason is that the property was covered by OCT No. 352. A title once registered
dependent, will be considered by the appellate court notwithstanding the failure to under the torrens system cannot be defeated even by adverse, open and notorious
assign it as an error.69 possession; neither can it be defeated by prescription.76 It is notice to the whole world
and as such all persons are bound by it and no one can plead ignorance of the
Donation Propter Nuptias of Real registration.77
Property Made in a Private Instrument
Before the New Civil Code Took Effect The torrens system is intended to guarantee the integrity and conclusiveness of the
on August 30, 1950 is Void certificate of registration, but it cannot be used for the perpetration of fraud against
the real owner of the registered land.78 The system merely confirms ownership and
We now focus on the crux of the petition, which is the validity of the deed of does not create it. Certainly, it cannot be used to divest the lawful owner of his title for
donation.1avvphi1 It is settled that only laws existing at the time of the execution of a the purpose of transferring it to another who has not acquired it by any of the modes
contract are applicable to it and not the later statutes, unless the latter are specifically allowed or recognized by law. It cannot be used to protect a usurper from the true
intended to have retroactive effect.70 Accordingly, the Old Civil Code applies in this owner, nor can it be used as a shield for the commission of fraud; neither does it
case as the donation propter nuptias was executed in 1919, while the New Civil Code permit one to enrich himself at the expense of another.79 Where such an illegal
took effect only on August 30, 1950. transfer is made, as in the case at bar, the law presumes that no registration has
been made and so retains title in the real owner of the land.80
Under the Old Civil Code, donations propter nuptias must be made in a public
instrument in which the property donated must be specifically described.71 Article Although We confirm here the invalidity of the deed of donation and of its resulting
1328 of the Old Civil Code provides that gifts propter nuptias are governed by the TCT No. 44481, the controversy between the parties is yet to be fully settled. The
rules established in Title 2 of Book 3 of the same Code. Article 633 of that title issues as to who truly are the present owners of the property and what is the extent of
provides that the gift of real property, in order to be valid, must appear in a public their ownership remain unresolved. The same may be properly threshed out in the
document.72 It is settled that a donation of real estate propter nuptias is void unless settlement of the estates of the registered owners of the property, namely: spouses
made by public instrument.73 Simeon Doronio and Cornelia Gante.

In the instant case, the donation propter nuptias did not become valid. Neither did it WHEREFORE, the appealed Decision is REVERSED AND SET ASIDE. A new one is
create any right because it was not made in a public instrument.74 Hence, it conveyed entered:
no title to the land in question to petitioners’ predecessors.
(1) Declaring the private deed of donation propter nuptias in favor of
petitioners’ predecessors NULL AND VOID; and
 (2) Ordering the Register of Deeds of Pangasinan to:

(a) CANCEL Transfer Certificate of Title No. 44481 in the names of

Marcelino Doronio and Veronica Pico; and

(b) RESTORE Original Certificate of Title No. 352 in the names of

its original owners, spouses Simeon Doronio and Cornelia Gante.

SO ORDERED.