SECOND DIVISION

[G.R. No. 197923. June 22, 2015.]

RUBY RUTH S. SERRANO MAHILUM , petitioner, vs. SPOUSES

EDILBERTO ILANO and LOURDES ILANO , respondents.

DECISION

DEL CASTILLO , J : p

Assailed in this Petition for Review on Certiorari 1 are the following dispositions
of the Court of Appeals: 1) February 2, 2011 Decision 2 in CA-G.R. SP No. 113782 which
granted herein respondents' Petition for Certiorari and Prohibition and thus nulli ed and
set aside the January 5, 2010 3 and February 24, 2010 4 Orders of the Regional Trial
Court of Las Piñas City, Branch 255 in Civil Case No. LP-07-0109; and 2) July 28, 2011
Resolution 5 denying the herein petitioner's motion for reconsideration. HTcADC

Factual Antecedents
Petitioner Ruby Ruth S. Serrano Mahilum is the registered owner of a parcel of
land covered by Transfer Certi cate of Title No. 85533 6 (TCT 85533) of the Registry of
Deeds of Las Piñas City.
In September 2003, she entrusted the original owner's duplicate copy of TCT
85533 to Teresa Perez (Perez) — a purported real estate broker — who claimed that
she can assist petitioner in obtaining a loan, with TCT 85533 serving as collateral. After
several months, petitioner demanded the return of the title, but Perez failed to produce
the same; after much prodding, Perez admitted that the title was lost. Thus, in June
2004, petitioner executed an A davit of Loss and caused the same to be annotated
upon the original registry copy of TCT 85533 as Entry No. 1668-24 7 on October 7,
2004.
In June 2006, petitioner received a letter from the Registry of Deeds of Las Piñas
City informing her that the owner's duplicate copy of TCT 85533 was not lost, but that it
was presented to the registry by respondents, spouses Edilberto and Lourdes Ilano,
who claimed that the property covered by the title was sold to them. In this connection,
respondents — instead of registering the supposed sale in their favor — executed an
A davit of Non-Loss, which was entered on TCT 85533 on June 28, 2006 as Entry No.
1875-27. 8
Petitioner confronted respondents, who showed her a notarized Agreement 9
with right of repurchase dated December 4, 2003 and an unnotarized and undated Deed
of Absolute Sale, 10 on which documents petitioner's purported signatures were
a xed. These documents indicate that petitioner sold the property covered by TCT
85533 to respondents for P250,000.00 with right to repurchase the same within a
period of 90 days. Petitioner told respondents that she did not execute these
documents, and that her purported signatures therein were in fact falsi ed and forged.
She demanded the return of TCT 85533, but respondents refused to surrender the title
to her. They claimed that the property was sold to them by Perez and "a companion."
All this time, title to the property remained in petitioner's name, as respondents
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 have not registered the unnotarized and undated Deed of Absolute Sale.
Civil Case No. LP-07-0109
On June 20, 2007, petitioner and her husband Richard instituted against
respondents and Perez Civil Case No. LP-07-0109 with the Regional Trial Court of Las
Piñas City. Her Complaint 11 for "annulment of agreement and deed of absolute sale,
speci c performance, with damages," which contained the foregoing statement of
facts, likewise contained the following allegations and prayer:
18. That by reason of the actuations of the defendants in facilitating the
execution of the aforesaid falsi ed documents, and adamant refusal to return
to plaintiffs the duplicate original owner's copy of their title, which were all done
with evident bad faith, the plaintiffs suffered and continue to suffer sleepless
nights, wounded feelings, besmirched reputation, serious anxiety and other
similar feelings, which, when quanti ed, can reasonably be compensated with
the sum of Fifty Thousand (P50,000.00) Pesos, as moral damages;
xxx xxx xxx
PRAYER
WHEREFORE, it is most respectfully prayed of this Honorable Court, that
after due notice and hearing, judgment be rendered in favor of the plaintiffs and
against the defendants, as follows:
1. Ordering the annulment of the documents denominated as Agreement
(Deed of Sale with Right to Repurchase), dated December 4, 2003, and Deed of
Absolute Sale and declaring the same as null and void;
2. Ordering defendants Ilano to surrender and return to plaintiffs the
duplicate original owner's copy of TCT No. 85533;
3. Ordering the defendants, jointly and severally, to pay the plaintiffs the
sum of Fifty Thousand Pesos (P50,000.00) as moral damages;
[4.] Ordering the defendants, jointly and severally, to pay the plaintiffs the
sum of Twenty Thousand Pesos (P20,000.00) as attorney's fees, and the
additional amount of Two Thousand Pesos (P2,000.00) for every court hearing;
and aScITE

[5.] Ordering the defendants to pay the costs of this suit.

Other reliefs deemed just and equitable are also prayed for. 12
Respondents' Amended Answer with Compulsory Counterclaim 13 alleged and
admitted, among others, that petitioner was the owner of the lot covered by TCT
85533; that said title was entrusted to Perez; that petitioner executed an a davit of
loss which was annotated on TCT 85533; that they caused the annotation of an
a davit of non-loss on TCT 85533, as Entry No. 1875-27; that petitioner confronted
them; that they showed petitioner the Agreement and unnotarized Deed of Absolute
Sale; that they are in possession of the owner's copy of TCT 85533; that sometime in
October 2003, Perez — accompanied by one Corazon Tingson (Tingson) "and a female
person who introduced herself as Ruby Ruth Serrano" — offered to sell to them the
property covered by TCT 85533; that "in support of the identity of the said Ruby Ruth
Serrano, the original owner's copies of the title (TCT No. T-85533), Declaration of Real
Property, Tax Clearance, Barangay Clearance, Community Tax Certi cate with picture of
Ruby Ruth Serrano attached therein" were presented to respondent Edilberto Ilano
(Edilberto); that upon being satis ed as to the "identity of the person who introduced
herself as Ruby Ruth Serrano," Edilberto instructed his secretary to verify the
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 authenticity of the title with the Register of Deeds of Las Piñas City and conduct an
ocular inspection of the property; that "the person who introduced herself as Ruby Ruth
Serrano" obtained a cash advance of P50,000.00; that after veri cation con rmed that
the property is indeed owned by and registered in the name of Ruby Ruth Serrano,
Edilberto — "believing in good faith that the person [with] whom he is dealing . . . is
indeed the real Ruby Ruth Serrano" — entered into the sale transaction; that on the same
day, or October 30, 2004, petitioner received the full consideration of P250,000.00 and
signed the Agreement and Deed of Absolute Sale; that petitioner's a davit of loss led
with the Registry of Deeds is false as TCT 85533 was never lost but was entrusted to
Perez who, together with Tingson "and another person herein named as 'Jane Doe'
whose identity is yet to be established who introduced herself as Ruby Ruth Serrano,"
came to respondents' o ce to obtain a loan because petitioner was in dire need of
money as she admitted in her complaint; that TCT 85533 was negotiated and/or sold
by petitioner "or by her duly authorized person, otherwise no one can present/deliver
the original owner's duplicate copy of the said title . . . and the original copies of the
documents . . . ;" that "for failure of the registered owner, Ruby Ruth Serrano, to exercise
her right of repurchase within the agreed period, ownership of the subject property now
lawfully belongs to" respondents; that the complaint failed to allege that respondents
were purchasers in bad faith or at least with notice of the defect in the title, which leads
to the conclusion that the complaint states no cause of action; and that respondents
led a perjury case against petitioner with the O ce of the City Prosecutor of
Parañaque.
Respondents thus prayed for the dismissal of the complaint, and by way of
counterclaim, sought indemnity for moral damages in the amount of P300,000.00;
P100,000.00 as nominal damages; P200,000.00 as exemplary damages; P100,000.00
for attorney's fees; and costs of suit.
Pre-trial and presentation of petitioner's evidence ensued. Thereafter, petitioner
rested her case.
Respondents led a Demurrer to Evidence, 14 arguing that the complaint failed to
state a cause of action in that petitioner failed to allege that respondents were
purchasers in bad faith or with notice of a defect in the title; that in the absence of such
an allegation, the presumption that respondents are purchasers in good faith prevails.
Petitioner led a Comment/Opposition, 15 contending essentially that her complaint
contained an allegation that respondents were purchasers in bad faith, which is found in
paragraphs 13 to 15 of the complaint; and that the issues raised in the demurrer may
only be resolved after trial on the merits.
Ruling of the Regional Trial Court
In a January 5, 2010 Order, 16 the trial court denied respondents' demurrer. It
held that the question of whether respondents are purchasers in bad faith can only be
resolved after the parties present their respective evidence. Thus, it stated: HEITAD

The Court, after taking into account all the foregoing, does not nd merit
in the above demurrer. For one, the Court already held in its Order dated 11 April
2008 that "during the pre-trial held last 11 February 2008 one of the issues
submitted for resolution by the Court is whether or not [sic] defendants Sps.
Ilano are buyers in good faith and for value of the property subject hereof". This
being so, the same can only be resolved upon presentation of evidence by the
parties herein regarding their respective positions." Thus, the instant case
cannot just be dismissed simply because the defendants said so based on their
own evaluation of the evidence presented by the plaintiff.
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 If only to stress, as far as the Court is concerned the assertions of the
defendants are merely conclusions they arrived at on their own that [run]
counter to the position of the plaintiffs. As such, the defendants will have to
present their own evidence to substantiate their claims.
More importantly, the Court cannot just disregard the evidence and
testimonies of the witnesses presented by the plaintiffs. Further, in order to
ferret out the truth and determine the veracity of the assertions being made by
the parties herein, it is best that the "other side" be heard. It is only in allowing
the defendants to present their evidence that this can be achieved so that the
herein case against them can be resolved judiciously.
In the end, it is for the Court to evaluate the evidence to be presented by
the parties herein. The conclusions being forwarded by the parties will have to
be reckoned with what have been presented and not on their respective self-
serving assertions.
Indeed, a demurrer to evidence is anchored on the claim that "upon the
facts and the law the plaintiff has shown no right to relief" (Sec. 1, Rule 33,
Rules of Court). With respect to the herein case, there is no clear showing that
plaintiffs Sps. Mahilum have no right to the reliefs being sought by them. On the
contrary, and if not opposed by contravening evidence by the defendants, their
causes of action may end up being supported by evidence that may merit
rulings in their favor.
WHEREFORE, premises considered, the "Demurrer to Evidence" dated 11
November 2009 led by defendants Sps. Edilberto and Lourdes Ilano is DENIED
for lack of merit.
SO ORDERED. 17
Respondents led a Motion for Reconsideration, 18 but the trial court denied the
same in a February 24, 2010 Order. 19
Ruling of the Court of Appeals
Respondents went up to the Court of Appeals (CA) via an original Petition for
Certiorari. 20 Docketed as CA-G.R. SP No. 113782, the petition essentially insisted that
since petitioner's complaint failed to include an allegation that respondents were
purchasers in bad faith, then her complaint for annulment of sale failed to state a cause
of action, which entitles them to a dismissal on demurrer; and that in denying their
demurrer, the trial court disregarded existing jurisprudence to the effect that where a
complaint does not contain all the facts constituting the plaintiff's cause of action, it is
subject to a motion to dismiss. In addition to seeking the reversal of the trial court's
January 5, 2010 and February 24, 2010 Orders, respondents prayed for injunctive relief
as well.
On July 15, 2010, the CA issued a Resolution 21 denying respondents' application
for a temporary restraining order.
Petitioner filed her Comment to the Petition.
On February 2, 2011, the CA issued the assailed Decision, which contained the
following decretal portion:
WHEREFORE, the above premises considered, the instant petition is
GRANTED. The Orders of public respondent Regional Trial Court of Las Piñas
City, Branch 255 dated 5 January 2010 and 24 February 2010, respectively, are
NULLIFIED and SET ASIDE. Private respondents' complaint for Annulment of
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 Agreement and Deed of Absolute Sale, Speci c Performance with Damages is
DISMISSED for lack of cause of action. ATICcS

SO ORDERED. 22
The CA held that —
A careful reading of private respondents' 23 complaint before public
respondent would show that private respondents indeed failed to allege that
petitioners 24 were in bad faith or at least aware of the misrepresentation of the
vendor of the subject property at the time they purchased the same. . . .
xxx xxx xxx
. . . . Thus, absent an allegation in the subject complaint that petitioners
were in bad faith or with notice of the vendor's misrepresentation at the time of
sale or prior thereto, they are presumed to be innocent purchasers for value of
the subject property.
Under the law, a title procured through fraud and misrepresentation can
still be the source of a completely legal and valid title if the same is in the hands
of an innocent purchaser for value and in good faith. Again, how can public
respondent render a valid judgment when, based on the allegations in the
complaint, petitioners are presumed to have bought the subject lot in good
faith? Stated differently, private respondents have no cause of action against
petitioners.
In their comment or opposition to petitioners' demurrer to evidence,
private respondents argued that it is not accurate that they failed to allege bad
faith because paragraphs 13, 14, and 15 of their complaint indicated the evident
bad faith of petitioners. However, a review of said averments would only prove
that petitioners became aware of the alleged fraud or misrepresentation after
the execution of the assailed agreement and deed of sale when private
respondents confronted the former, and not before or during the execution of
the same. The Supreme Court held:
"A person is considered in law as an innocent purchaser for
value when he buys the property of another, without notice that
some other person has a right or an interest in such property, and
pays a full price for the same at the time of such purchase, or
before he has notice of the claims or interest of some
other person in the property . A person dealing with registered
land may safely rely on the correctness of the certi cate of title of
the vendor/transferor, and the law will in no way oblige him to go
behind the certi cate to determine the condition of the property."
25

When the complaint alleges that private respondents did not sell the
subject property to petitioners but does not allege that the latter were purchasers
in bad faith or with notice of the defect in the title of their vendors, there is a
failure to state a cause of action. 26 By reason of this failure, petitioners are
presumed to be innocent purchasers for value and in good faith, entitled to
protection under the law. TIADCc

" I n Spouses Chu, Sr. v. Benelda Es tate Development

Corporation, this Court pronounced that it is crucial that a
complaint for annulment of title must allege that the purchaser
was aware of the defect in the title, so that the cause of action
against him or her will be su cient. Failure to do so, as in the
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 case at bar, is fatal for the reason that the court cannot
render a valid judgment against the purchaser who is
presumed to be in good faith in acquiring said property." 27
It was further held that a title issued to an innocent purchaser and for
value cannot be revoked on the basis that the deed of sale was falsi ed, if he or
she had no knowledge of the fraud committed. 28 Here, there is clearly no
imputation that petitioners had knowledge of the fraud committed during the
execution of the assailed agreement and deed of sale. Furthermore, in the
formal offer of the testimony of private respondent Ruby Ruth, proving bad faith
was not even among the purposes for which her testimony was offered.
Accordingly, the testimony itself did not show bad faith on the part of
petitioners.
It is signi cant to note that in the subject complaint, formal offer of
evidence, and oral testimony, only two things were established: (1) private
respondents did not sell the subject property to petitioners and (2) Teresa Perez
breached the trust given to her by private respondents. These facts cannot
constitute a cause of action or relief against petitioners because, absent an
allegation of bad faith in the complaint, they are presumed to be innocent
purchasers for value during the execution of the agreement and deed of sale.
There is the established rule that if the defendant permits evidence to be
introduced, without objection, which supplies the necessary allegations of a
defective complaint, this evidence has the effect of curing the defects of such
complaint, and a demurrer thereafter is inadmissible on the ground that the
complaint does not state facts su cient to constitute a cause of action. This
rule, however, cannot be applied in the instant case. Granting that petitioners did
not object to the presentation of evidence of private respondents, the latter still
failed to cure the defect in their complaint since no evidence of bad faith on the
part of petitioners was presented before the court. Proofs of bad faith were all
directed against Teresa Perez and her companion who introduced herself as
Ruby Ruth Serrano.
Although this Court relied on the transcript of stenographic notes quoted
by petitioners, as complete records of the case are still with public respondent,
private respondents did not question in their Comment on the petition, the
truthfulness of the statements quoted therein. Hence, private respondents are
deemed to have admitted the veracity of said transcript. Without an imputation
[or] a showing that petitioners were in bad faith or aware of the fraud
perpetrated by Teresa Perez and her companion, no action can be maintained
against them. AIDSTE

In view of the foregoing, public respondent RTC committed grave abuse

of discretion amounting to lack or excess of jurisdiction when it denied the
Demurrer to Evidence notwithstanding the complete absence of a cause of
action against petitioners. Public respondent RTC contravened and disregarded
the settled and prevailing jurisprudence on the matter. 29
Petitioner led her Motion for Reconsideration, 30 which the CA denied in its
assailed July 28, 2011 Resolution. Hence, the present Petition.
Issues
Petitioner raises the following issues:
I
ON QUESTION OF LAW, WHETHER . . . FAILURE TO ALLEGE BAD FAITH IN THE
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 COMPLAINT IS A FATAL DEFECT CONSIDERING THAT THE SUBJECT
DOCUMENTS (AGREEMENT/DEED OF ABSOLUTE SALE WITH RIGHT TO
REPURCHASE, AND UNNOTARIZED DEED OF SALE) WERE MERELY
SIMULATED, FICTITIOUS AND FORGERY [sic], AND HENCE, NULL AND VOID
FROM THE BEGINNING.
II
ON QUESTION OF LAW, WHETHER . . . THE PETITIONER WAS DEPRIVED OF
HER PROPERTY WHEN THE COURT OF APPEALS GRANTED THE DEMURRER
TO EVIDENCE ON THE GROUND THAT THERE WAS NO CAUSE OF ACTION
WHEN ONE OF THE ISSUED [sic] AGREED UPON BY THE PARTIES DURING THE
PRE-TRIAL BEFORE THE RTC WAS WHETHER . . . PRIVATE RESPONDENTS
WERE PURCHASERS IN GOOD FAITH.
III
WHETHER . . . PETITIONER/S WERE PREVENTED FROM CONFRONTING THE
PRIVATE RESPONDENTS AND THEIR WITNESSES TO DETERMINE WHETHER . .
. THEY REALLY DEALT WITH PETITIONER AND TO DETERMINE WHO WAS THE
IMPOSTOR WHO SIGNED THE SUBJECT AGREEMENT AND DEED OF
ABSOLUTE SALE AND HENCE, ALLOW THE RTC COURT TO DETERMINE
WHETHER THE SUBJECT AGREEMENT AND DEED OF ABSOLUTE SALE WERE
SIMULATED, FICTITIOUS AND NULL AND VOID AND IF PRIVATE
RESPONDENTS WERE REALLY PURCHASERS FOR VALUE IN GOOD FAITH
THAT WILL AFFECT THE OUTCOME OF THE INSTANT CASE. 31
Petitioner's Arguments
In praying that the assailed CA dispositions be set aside and that in effect the
January 5, 2010 and February 24, 2010 Orders of the trial court denying respondents'
demurrer to evidence be reinstated, petitioner insists in her Petition and Reply 32 that
during the pre-trial conference, one of the issues agreed upon by the parties to be
resolved was whether respondents were buyers in good faith, which was re ected in
the trial court's January 5, 2010 Order; 33 that since the issue of good or bad faith has
been agreed upon by the parties as one of the matters to be tackled during trial, then
the failure to allege bad faith in the complaint is deemed cured, and the defense is
deemed waived by the respondents with their assent given during pre-trial; and that the
agreement and deed of absolute sale, being forgeries, are null and void and without
force and effect. AaCTcI

Petitioner adds that although a complaint which does not contain all the facts
constituting the plaintiff's cause of action is subject to a motion to dismiss, the defect
is cured if the defendant permits the introduction of evidence which supplies or
remedies such defect; 34 thus, respondents' assent to the framing of the issues during
pre-trial and their failure to object to the presentation of evidence on the issue of good
or bad faith cured her defective complaint.
Finally, petitioner contends that the grant of respondents' demurrer amounts to a
deprivation of property without due process of law, as she was prevented from
defending her ownership over the same by duly confronting the respondents and their
witnesses and proving that the agreement and deed of absolute sale were mere
forgeries.
Respondents' Arguments
Respondents, on the other hand, argue in their Comment 35 that the CA was
correct in declaring that petitioner's complaint in Civil Case No. LP-07-0109 failed to
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 state a cause of action owing to her failure to allege that the property in question was
purchased in bad faith. They add that petitioner failed to present evidence during trial to
the effect that they bought the subject property in bad faith; that the scope of her
evidence covered only her claim that she did not execute the subject agreement and
deed of absolute sale, and that these documents are ctitious and forged — she did not
present evidence to show that they were buyers in bad faith. Thus, they maintain that
for failing to allege and prove bad faith on their part, the CA was correct in ordering the
dismissal of Civil Case No. LP-07-0109.
Our Ruling
The Court grants the Petition.
In granting demurrer, the CA failed to consider that title to the property remained
in petitioner's name; TCT 85533 was never cancelled and no new title was issued in
respondents' name. As a matter of fact, what they did when petitioner annotated her
a davit of loss upon TCT 85533 was to cause the annotation of an "a davit of non-
loss" afterward.
Since a new title was never issued in respondents' favor and, instead, title
remained in petitioner's name, the former never came within the coverage and
protection of the Torrens system, where the issue of good or bad faith becomes
relevant. Since respondents never acquired a new certi cate of title in their name, the
issue of their good or bad faith which is central in an annulment of title case is of no
consequence; petitioner's case is for annulment of the Agreement and Deed of
Absolute Sale , and not one to annul title since the certi cate of title is still in her name.
The jurisprudential bases for the CA's pronouncement that there is a failure to state a
cause of action if there is no allegation in the complaint that respondents were
purchasers in bad faith — Castillo v. Heirs of Vicente Madrigal 36 and Heirs of Julian
Tiro v. Philippine Estates Corporation 37 — involved complaints for annulment of new
titles issued to the buyers; they cannot apply to petitioner's case where title remains in
her name.
Petitioner's case is to annul the agreement and deed of sale based on the
allegation that they are forgeries, and that respondents were parties to the fraud; since
no new title was issued in respondents' favor, there is no new title to annul. Indeed, if
the agreement and deed of sale are forgeries, then they are a nullity and convey no title
38 The underlying principle is that no one can give what one does not have. Nemo dat
quod non habet. EcTCAD

In Sps. Solivel v. Judge Francisco, we held that:

. . . in order that the holder of a certi cate for value
issued by virtue of the registration of a voluntary
instrument may be considered a holder in good faith for
value, the instrument registered should not be forged.
When the instrument presented is forged, even if
accompanied by the owner's duplicate certi cate of title,
the registered owner does not thereby lose his title, and
neither does the assignee in the forged deed acquire any
right or title to the property .
. . . The innocent purchaser for value protected by
law is one who purchases a titled land by virtue of a deed
executed by the registered owner himself, not by a forged
deed, as the law expressly states . . . .
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 I n Instrade, Inc. v. Court of Appeals , we reiterated the said ruling
maintaining that "[A]s early as Joaquin v. Madrid , . . . , we said that in order that
the holder of a certi cate for value issued by virtue of the registration of a
voluntary instrument may be considered a holder in good faith and for value, the
instrument registered should not be forged." Indubitably, therefore, the
questioned Deed of Absolute Sale did not convey any title to herein petitioners.
Consequently, they cannot take refuge in the protection accorded by the Torrens
system on titled lands.
Thus, we hold that with the presentation of the forged deed, even if
accompanied by the owner's duplicate certi cate of title, the registered owner
did not thereby lose his title, and neither does the assignee in the forged deed
acquire any right or title to the said property. . . . 39 (Emphasis supplied)
In this case, it is petitioner who must be protected under the Torrens system —
as the registered owner of the subject property. "A certi cate of title serves as
evidence of an indefeasible and incontrovertible title to the property in favor of the
person whose name appears therein. The real purpose of the Torrens system of land
registration is to quiet title to land and put a stop forever to any question as to the
legality of the title." 40
In Tenio-Obsequio v. Court of Appeals , we explained the purpose of the
Torrens system and its legal implications to third persons dealing with
registered land, as follows:
The main purpose of the Torrens system is to avoid
possible con icts of title to real estate and to facilitate
transactions relative thereto by giving the public the right to rely
upon the face of a Torrens certi cate of title and to dispense with
the need of inquiring further, except when the party concerned has
actual knowledge of facts and circumstances that should impel a
reasonably cautious man to make such further inquiry. Where
innocent third persons, relying on the correctness of the certi cate
of title thus issued, acquire rights over the property, the court
cannot disregard such rights and order the total
cancellation of the certi cate. The effect of such an
outright cancellation would be to impair public con dence
in the certi cate of title, for everyone dealing with
property registered under the Torrens system would have
to inquire in every instance as to whether the title has
been regularly or irregularly issued by the court . Every
person dealing with registered land may safely rely on the
correctness of the certi cate of title issued therefor and the law
will in no way oblige him to go beyond the certi cate to determine
the condition of the property.HSAcaE

The Torrens system was adopted in this country because it

was believed to be the most effective measure to guarantee the
integrity of land titles and to protect their indefeasibility once the
claim of ownership is established and recognized. If a person
purchases a piece of land on the assurance that the seller's title
thereto is valid, he should not run the risk of being told later that
his acquisition was ineffectual after all. This would not only be
unfair to him. What is worse is that if this were permitted, public
con dence in the system would be eroded and land transactions
would have to be attended by complicated and not necessarily
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 conclusive investigations and proof of ownership. The further
consequence would be that land con icts could be even more
numerous and complex than they are now and possibly also more
abrasive, if not even violent. The Government, recognizing the
worthy purposes of the Torrens system, should be the rst to
accept the validity of titles issued thereunder once the conditions
laid down by the law are satisfied.
The Torrens system was intended to guarantee the integrity and
conclusiveness of the certi cate of registration, but the system cannot be used
for the perpetration of fraud against the real owner of the registered land. The
system merely con rms ownership and does not create it. It cannot be used
to divest lawful owners of their title for the purpose of transferring it
to another one who has not acquired it by any of the modes allowed
or recognized by law . Thus, the Torrens system cannot be used to protect a
usurper from the true owner or to shield the commission of fraud or to enrich
oneself at the expense of another. 41 (Emphasis and underscoring supplied)
A cursory examination of the record will show that petitioner's action does not
appear to be groundless. There are circumstances which lead one to believe that
respondents are not exactly innocent of the charge. Their failure to register the
unnotarized and undated deed of absolute sale is at the very least unusual; it is contrary
to experience. It is uncharacteristic of a conscientious buyer of real estate not to cause
the immediate registration of his deed of sale as well as the issuance of a new
certi cate of title in his name. Having supposedly paid a considerable amount
(P250,000.00) for the property, respondents certainly would have protected
themselves by immediately registering the sale and obtaining a new title in their name;
but they did not. Even after petitioner caused the annotation of her a davit of loss,
respondents did not register their supposed sale, but merely annotated an "a davit of
non-loss." This, together with the fact that the deed of absolute sale is undated and
unnotarized, places their claim that they are purchasers in good faith seriously in doubt.
The ruling in Rufloe v. Burgos 42 comes to mind:
We cannot ascribe good faith to those who have not shown any
diligence in protecting their rights . Respondents had knowledge of facts
that should have led them to inquire and investigate in order to acquaint
themselves with possible defects in the title of the seller of the property.
However, they failed to do so. Thus, Leonarda, as well as the Burgos siblings,
cannot take cover under the protection the law accords to purchasers in good
faith and for value. They cannot claim valid title to the property.
Moreover, the defense of indefeasibility of a Torrens title does not extend
to a transferee who takes it with notice of a aw in the title of his transferor. To
be effective, the inscription in the registry must have been made in good faith. A
holder in bad faith of a certi cate of title is not entitled to the protection of the
law, for the law cannot be used as a shield for fraud. HESIcT

We quote with approval the following ndings of

the trial court showing that the sale between the Burgos
siblings and Leonarda is simulated:
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 the sale in his favor. Not
only because registration is the operative act that effects
property covered by the Torrens System, but also because
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 registration and issuance of new title to the transferee,
enable this transferee to assume domiciliary and
possessory rights over the property. These bene ts 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 behavioral pattern of a true
buyer and the empirical knowledge of man to assume that a
buyer who invested on the property he bought would be
uninvolved and not endeavor to register the property he
bought . The nonchalance of Leonarda amply demonstrates the
pretended sale to her, and the evident scheme of her brother Amado
who invested on the property he bought. 43 (Emphasis supplied)
Most telling is respondents' Amended Answer with Compulsory Counterclaim,
which tends to admit and indicate that when the December 4, 2003 Agreement with
right of repurchase and unnotarized and undated Deed of Absolute Sale were executed,
an individual — who falsely represented herself to be petitioner — appeared and signed
these documents. Thus, respondents alleged in their amended answer that sometime in
October 2003, Perez — accompanied by one Corazon Tingson (Tingson) "and a
female person who introduced herself as Ruby Ruth Serrano" — offered to sell
to them the property covered by TCT 85533; that "in support of the identity of the
said Ruby Ruth Serrano , the original owner's copies of the title (TCT No. T-85533),
Declaration of Real Property, Tax Clearance, Barangay Clearance, Community Tax
Certi cate with picture of Ruby Ruth Serrano attached therein" were presented to
respondent Edilberto Ilano (Edilberto); that upon being satis ed as to the "identity of
the person who introduced herself as Ruby Ruth Serrano, " Edilberto instructed
his secretary to verify the authenticity of the title from the Register of Deeds of Las
Piñas City and conduct an ocular inspection of the property; that "the person who
introduced herself as Ruby Ruth Serrano" obtained a cash advance of P50,000.00;
that after veri cation con rmed that the property is indeed owned by and registered in
the name of Ruby Ruth Serrano, Edilberto — "believing in good faith that the person
[with] whom he is dealing . . . is indeed the real Ruby Ruth Serrano" — entered
into the sale transaction; that petitioner's a davit of loss led with the Registry of
Deeds is false as TCT 85533 was never lost but was entrusted to Perez who, together
with Tingson " and another person herein named as 'Jane Doe' whose identity is
yet to be established who introduced herself as Ruby Ruth Serrano ," came to
respondents' o ce to obtain a loan because petitioner was in dire need of money as
she admitted in her complaint. caITAC

Even at the level of the CA, respondents admitted, in their petition for certiorari,
that they bought the property not from petitioner, but from their "co-defendants who
had a defective title" — presumably Perez and the impostor. The pertinent portion of
their petition reads:
Bad faith cannot be presumed. It must be established by clear evidence.
And it appearing that the subject complaint is for recovery and possession of a
parcel of land, and that defendants bought it from their co-defendants
who had a defective title , but does not allege in the complaint that the
purchasers were buyers in bad faith or with notice of the defect in the title of
their vendors. . . . 44 (Emphasis Supplied)
The above allegations in respondents' pleadings are certainly revealing. They
already knew petitioner's identity and how she looked, having met her even before the
ling of the complaint — when petitioner confronted them and they showed her the
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 agreement and deed of sale. Thus, they should not have referred to the supposed seller
as "another person herein named as 'Jane Doe' whose identity is yet to be established
who introduced herself as Ruby Ruth Serrano" or "the person who introduced herself as
Ruby Ruth Serrano" if indeed it was petitioner herself who appeared and signed the
agreement and deed of sale in question. They should have categorically alleged that
they bought the property from petitioner herself if indeed this was so. Their ambiguous
allegations constitute a negative pregnant, which is in effect an admission.
Evidently, this particular denial had the earmark of what is called in the
law on pleadings as a negative pregnant, that is, a denial pregnant with the
admission of the substantial facts in the pleading responded to which are not
squarely denied. It was in effect an admission of the averments it was directed
at. Stated otherwise, a negative pregnant is a form of negative expression which
carries with it an affirmation or at least an implication of some kind favorable to
the adverse party. It is a denial pregnant with an admission of the substantial
facts alleged in the pleading. Where a fact is alleged with qualifying or
modifying language and the words of the allegation as so quali ed or modi ed
are literally denied, it has been held that the qualifying circumstances alone are
denied while the fact itself is admitted. 45
"If an allegation is not speci cally denied or the denial is a negative
pregnant, the allegation is deemed admitted." "Where a fact is alleged with some
qualifying or modifying language, and the denial is conjunctive, a 'negative
pregnant' exists, and only the quali cation or modi cation is denied, while the
fact itself is admitted." "A denial in the form of a negative pregnant is an
ambiguous pleading, since it cannot be ascertained whether it is the fact or only
the quali cation that is intended to be denied." "Profession of ignorance
about a fact which is patently and necessarily within the pleader's
knowledge, or means of knowing as ineffectual, is no denial at all." 46
(Emphasis supplied)
Finally, petitioner's complaint in Civil Case No. LP-07-0109 clearly states that in
the execution of the agreement and deed of absolute sale, respondents and Perez
acted in bad faith and connived in the forgery. Speci cally, paragraph 18 of her
complaint states, as follows:
18. That by reason of the actuation of the defendants in facilitating the
execution of the aforesaid falsi ed documents, and adamant refusal to return
to plaintiffs the duplicate original owner's copy of their title, which were all done
with evident bad faith, the plaintiffs suffered and continue to suffer sleepless
nights, wounded feelings, besmirched reputation, serious anxiety and other
similar feelings, which, when quanti ed, can reasonably be compensated with
the sum of Fifty Thousand (P50,000.00) Pesos, as moral damages; 47
Thus, the CA's pronouncement — that nowhere in the complaint is it alleged that
respondents were purchasers in bad faith — is patently erroneous. The primary ground
for reversing the trial court's denial of respondents' demurrer is therefore completely
unfounded. Besides, the action itself, which is grounded on forgery, necessarily
presupposes the existence of bad faith.
With the foregoing pronouncement, the Court nds no need to tackle the other
issues raised by petitioner. They are rendered moot and irrelevant by the view taken and
manner in which the case was resolved.
WHEREFORE , the Petition is GRANTED . The assailed February 2, 2011 Decision
and July 28, 2011 Resolution of the Court of Appeals in CA-G.R. SP No. 113782 are
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 REVERSED and SET ASIDE . The case is remanded to the Regional Trial Court of Las
Piñas City, Branch 255 in Civil Case No. LP-07-0109 for proper disposition.
SO ORDERED .

Carpio, Perez, * Mendoza and Jardeleza, ** JJ., concur.

Footnotes

* Per Special Order No. 2067 dated June 22, 2015.

** Per Special Order No. 2056 dated June 10, 2015.

1. Rollo, pp. 8-29.

2. Id. at 30-43; penned by Associate Justice Mariflor P. Punzalan Castillo and concurred in by
Associate Justices Josefina Guevara-Salonga and Franchito N. Diamante.
3. Id. at 110-112; penned by Judge Raul Bautista Villanueva.

4. Id. at 129-131.

5. Id. at 44-46.
6. Id. at 60-61.

7. Id. at 61.
8. Id.

9. Id. at 62-63.

10. Id. at 64-65.

11. Id. at 66-71.

12. Id. at 68-69.

13. Id. at 85-94.

14. Id. at 95-103.

15. Id. at 104-106.

16. Id. at 110-112.

17. Id. at 111-112.

18. Id. at 113-120.

19. Id. at 129-131.

20. Id. at 132-151.

21. Id. at 152-153.

22. Id. at 42.

23. Herein petitioner and her husband.

24. Herein respondents.
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 25. Citing Spouses Chu, Sr. v. Benelda Estate Development Corporation, 405 Phil. 936 (2001).

26. Citing Castillo v. Heirs of Vicente Madrigal, G.R. No. 62650, June 27, 1991, 198 SCRA 556.
27. Citing Heirs of Julian Tiro v. Philippine Estates Corporation, 585 Phil. 306 (2008).

28. Id.
29. Rollo, pp. 37-42.

30. Id. at 47-55.

31. Id. at 19-20.

32. Id. at 196-199.

33. See note 15.

34. Citing Pascua v. Court of Appeals, 262 Phil. 278 (1990).

35. Rollo pp. 186-191.

36. Supra note 24.

37. Supra note 25.

38. Fudot v. Cattleya Land, Inc., 559 Phil. 756, 766-767 (2007); Salomon v. Intermediate
Appellate Court, 263 Phil. 1068, 1078-1081 (1990).
39. Spouses Bernales v. Heirs of Julian Sambaan, 624 Phil. 88, 104-105 (2010).

40. Peralta v. Heirs of Abalon, G.R. No. 183448, June 30, 2014, citing Pioneer Insurance &
Surety Corporation v. Heirs of Vicente Coronado, 612 Phil. 573 (2009). Italics
supplied.
41. Id.

42. 597 Phil. 261 (2009).

43. Id. at 272-273.

44. Rollo, p. 144.

45. Republic of the Philippines v. Sandiganbayan, 453 Phil. 1059, 1107 (2003).
46. Venzon v. Rural Bank of Buenavista (Agusan del Norte), Inc., G.R. No. 178031, August 28,
2013, 704 SCRA 138, 147-148.

47. Rollo, pp. 68-69.

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