*

G.R. No. 201193. June 10, 2019.

V, petitioner, vs. LUPA REALTY HOLDING CORPORATION,
respondent.

Remedial Law; Civil Procedure; Appeals; Petition for Review on

Certiorari; A Rule 45 review is warranted when there is finding by the
Supreme Court (SC) that the court a quo has decided a question of
substance in a way probably not in accord with law or with the applicable
decisions of the SC.—Rule 45 of the Rules of Court on Appeal by Certiorari
to the Supreme Court mandates that: the petition shall raise only questions
of law; this mode of review is not a matter of right, but of sound judicial
discretion; and it will be granted only when there are special and important
reasons therefor. A Rule 45 review is warranted when there is finding by the
Court that the court a quo has decided a question of substance in a way
probably not in accord with law or with the applicable decisions of the
Court. While only questions of law may be raised in a Rule 45 certiorari
petition, there are admitted exceptions, which includes the instance when
there is conflict in the findings of fact of the trial court and the CA. The
instant case falls under this exception.
Notarized Documents; Public Documents; Under Rule 132, Section
19(b), documents acknowledged before a notary public except last wills and
testaments are public documents.—In People v. Sendaydiego, 81 SCRA 120
(1978), the Court stated the rule that if a person had in his possession a
falsified document and he made use of it (uttered it), taking advantage of it
and profiting therefrom, the presumption is that he is the material author of
the falsification. Pursuant to Re: Fake Decision Allegedly in G.R. No.
75242, 451 SCRA 357 (2005), the simulation of a public or official
document, done in a manner as to easily lead to error as to its authenticity,
constitutes the crime of falsification. Under Rule 132, Section 19(b),
documents acknowledged before a notary public except last wills and
testaments are public documents. Further, it is presumed that “evidence
willfully suppressed would be adverse if produced.”

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* SECOND DIVISION.

263
 Civil Law; Contracts; Simulated Contracts; Article 1409(2) of the Civil
Code provides that contracts “which are absolutely simulated or fictitious”
are inexistent and void from the beginning. It is also provided in Article
1346 that “[a]n absolutely simulated or fictitious contract is void.”—
Article 1409(2) of the Civil Code provides that contracts “which are
absolutely simulated or fictitious” are inexistent and void from the
beginning. It is also provided in Article 1346 that “[a]n absolutely simulated
or fictitious contract is void.” Justice Eduardo P. Caguioa discusses the
concept and requisites of simulation in the following manner: x x x
Simulation is the declaration of a fictitious intent manifested deliberately
and in accordance with the agreement of the parties in order to produce for
the purpose of deceiving others the appearance of a transaction which does
not exist or which is different from their true agreement. Simulation
involves a defect in the declaration of the will. x x x Simulation requires the
following: (1) A deliberate declaration contrary to the will of the parties; (2)
Agreement of the parties to the apparently valid act; and (3) The purpose is
to deceive or to hide from third persons although it is not necessary that the
purpose be illicit or for purposes of fraud. The above three requisites must
concur in order that simulation may exist.
Same; Land Registration; While the Supreme Court (SC) has held that
registration is a mere ministerial act by which a deed, contract or
instrument is sought to be inscribed in the records of the Office of the
Register of Deeds and annotated at the back of the certificate of title
covering the land subject of the deed, contract or instrument and is not a
declaration by the state that such an instrument is a valid and subsisting
interest in land; it is merely a declaration that the record of the title appears
to be burdened with such instrument, according to the priority set forth in
the certificate, and that no valid objection can be interposed to the
registration of a document by the Register of Deeds who finds nothing
defective or irregular on its face upon an examination thereof.—While the
Court has held that registration is a mere ministerial act by which a deed,
contract or instrument is sought to be inscribed in the records of the Office
of the Register of Deeds and annotated at the back of the certificate of title
covering the land subject of the deed, contract or instrument and is not a
declaration by the state that such an instrument is a valid and subsisting
interest in land; it is merely a declaration that the record of the title appears
to be burdened with

264

such instrument, according to the priority set forth in the certificate,

and that no valid objection can be interposed to the registration of a
document by the Register of Deeds who finds nothing defective or irregular
on its face upon an examination thereof, the fact of the matter is that the
1997 DAS is not regular on its face because, as duly noted above, it
pertained to the land covered by OCT No. P-26619 with Homestead Patent
No. 119163. Presented with the 1997 DAS that has reference to an OCT
different from that of Tranquilino’s title and to a Homestead Patent instead
of a Free Patent, the Register of Deeds concerned should not have allowed
its registration because of the obvious or patent irregularity appearing on the
face of the 1997 DAS.
Remedial Law; Evidence; Judicial Admissions; Judicial admission
does not require proof according to Section 4, Rule 129 of the Rules of
Court.—The admission by Nonito’s counsel during the pretrial proceedings
before the RTC that there was no sale between Tranquilino and Nonito
qualifies as a judicial admission because the statement is a deliberate, clear,
unequivocal statement of a party’s attorney during judicial proceedings in
open court about a concrete or essential fact within that party’s peculiar
knowledge. Since such statement is a judicial admission, it does not require
proof according to Section 4, Rule 129 of the Rules of Court, which
provides: SEC. 4. Judicial admissions.—An admission, verbal or written,
made by a party in the course of the proceedings in the same case, does not
require proof. The admission may be contradicted only by showing that it
was made through palpable mistake or that no such admission was made.
Moreover, there was no palpable mistake on the part of Nonito’s counsel in
making the admission because in the offer of Nonito’s testimony on
December 2, 2008, he stated that “the land was the property in suit was
never sold to him [Nonito] by his brother Tranquilino Agbayani.” That is not
all. The admission by Nonito himself, on cross-examination by
Tranquilino’s counsel, that Tranquilino was in the United States at the time
of the purported transaction supports the statement of the counsel of Nonito
that there was no sale between Tranquilino and Nonito. Since there is
judicial admission that there was no sale of the subject land between
Tranquilino and Nonito, affirmed anew during oral testimony by Nonito
himself, then there is no question that the 1992 DAS is void. The three
requisites of a simulated contract are existent. There is a deliberate
declaration that Tranquilino sold the subject land to

265

Nonito, which is contrary to their will because there was no sale

between them. The agreement appears on its face to be a valid act. The
purpose is to deceive third persons into believing that there was such a sale
between them.
Civil Law; Land Titles and Deeds; Certificate of Title; Collateral
Attack; In deference to the conclusiveness and indefeasibility of Torrens
titles, a certificate of title shall not be subject to collateral attack pursuant
to Section 48 of Presidential Decree (PD) No. 1529.—In deference to the
conclusiveness and indefeasibility of Torrens titles, a certificate of title shall
not be subject to collateral attack pursuant to Section 48 of PD 1529. As to
what constitutes a direct attack on a Torrens title, the Court observed in
Firaza, Sr. v. Spouses Ugay, 695 SCRA 26 (2013): The attack is considered
direct when the object of an action is to annul or set aside such proceeding,
or enjoin its enforcement. Conversely, an attack is indirect or collateral
when, in an action to obtain a different relief an attack on the proceeding is
nevertheless made as an incident thereof. Such action to attack a
certificate of title may be an original action or a counterclaim, in which
a certificate of title is assailed as void. x x x Here, there is a direct attack
on Lupa Realty’s TCT.

PETITION for review on certiorari of the decision and resolution of

the Court of Appeals.
The facts are stated in the resolution of the Court.

Martinez-Tria Law Offices for petitioner.

Law Firm of Diaz, Del Rosario & Associates for respondent.

RESOLUTION

CAGUIOA, J.:
1
Before the Court is a Petition for Review on Certiorari (Petition)
under Rule 45 of the Rules of Court assailing the Deci-

_______________

1 Rollo, pp. 9-34, excluding Annexes.

266

2 3
sion dated September 14, 2011 (CA’s Decision) and the Resolution
4
dated March 9, 2012 (CA’s Resolution) of the Court of Appeals
(CA) in C.A.-G.R. CV No. 93912. The CA’s Decision reversed and
5
set aside the Decision dated June 15, 2009 rendered by the Regional
Trial Court, Branch 7, Aparri, Cagayan (RTC) in Civil Case No. 07-
532. The CA’s Decision also dismissed the complaint of petitioner
Tranquilino Agbayani (Tranquilino) as well as the third-party
complaint of respondent Lupa Realty Holding Corporation (Lupa
Realty), fourth-party complaint of Moriel Urdas (Moriel) and the
counterclaims. The CA’s Resolution denied the motion for
reconsideration filed by Tranquilino.

The Facts and Antecedent Proceedings

The CA’s Decision narrates the factual antecedents as follows:

The property subject of the instant case is a 91,899-square-meter

parcel of land, situated in Barrio Sinungan, Sta. Ana, Cagayan,
originally registered under OCT No. P-46041 in the name of x x x
Tranquilino Agbayani (Tranquilino), pursuant to Free Patent No.
587747 on 7 June 1979.
On 11 October 1999, Tranquilino, who was by then already
residing in America, filed a Complaint for Reivindicacion,
Cancellation of Title and Document with Damages against Lupa
Realty Holding Corporation (Lupa Realty), through his brother,
 Kennedy Agbayani, and his nephew, Vernold Malapira (Vernold).
We note that Vernold is also written as “Bernold” in other parts of

_______________

2 Id., at pp. 36-52. Penned by Associate Justice Ricardo R. Rosario, with Associate
Justices Hakim S. Abdulwahid and Danton Q. Bueser, concurring.
3 Id., at pp. 55-56.
4 Ninth Division and Former Ninth Division, respectively.
5 Rollo, pp. 86-95. Penned by Judge Oscar T. Zaldivar.

267

the record, and is admitted to be the same “Bernard” referred to in

the Complaint and in the Special Power of Attorney as having been
authorized by Tranquilino to file the instant case.
The Complaint alleged that sometime in April 1999, [Vernold]
went to the Office of the Municipal Treasurer of Sta. Ana, Cagayan to
pay the real estate taxes on the subject property, but was told that
Lupa Realty was already the new owner thereof and that the tax
declaration had already been transferred to its name. Tranquilino
further alleged that upon verifying with the Registry of Deeds for
Cagayan, [Vernold] discovered that the subject property was already
registered in the name of Lupa Realty under TCT No. T-109129
pursuant to a Deed of Absolute Sale purportedly executed by
Tranquilino on 29 October 1997 in favor of Lupa Realty, in
consideration of the sum of P425,500.00.
In his complaint, Tranquilino denied having executed said Deed
of Absolute Sale, insisting that his signature thereon must be a
forgery because he was in America on 29 October 1997. Accordingly,
[he] prayed for the cancellation of Lupa Realty’s TCT No. T-109129
and the reinstatement of OCT No. P-46041 in his name, plus
damages.
In its Answer, Lupa Realty countered that contrary to the
allegation of Tranquilino that he never sold the subject property, he
sold the same to his brother, Nonito Agbayani (Nonito), as shown by
a notarized Deed of Absolute Sale executed on 21 January 1992. In
turn, Nonito sold the subject property to Moriel Urdas (Moriel) in a
notarized Deed of Absolute Sale, dated 30 May 1997. According to
Lupa Realty, it acquired the subject property not from Tranquilino
but from Moriel by way of a notarized Deed of Absolute Sale, dated
29 October 1997.
Lupa Realty further insisted that it was an innocent purchaser for
value and in good faith. Lupa Realty explained that it was Moriel and
his mother who registered the sale in the Registry of Deeds, as shown
by the Affidavit executed by Moriel’s mother. According to Lupa
Realty, it had no idea that Moriel and his mother had
 268

used a falsified deed of sale with Tranquilino’s forged signature in

registering the sale. Thus, Lupa Realty filed a third-party complaint
against Moriel to enforce the latter’s warranty of a valid title and
peaceful possession against the claims of third persons.
In his Answer to the Third-Party Complaint, Moriel denied having
caused the registration of the sale to Lupa Realty, and denied having
prepared the falsified deed of sale that was used in transferring the
title to Lupa Realty. Moriel insisted that contrary to Lupa Realty’s
assertions, it was actually the latter’s personnel who registered the
sale.
Moriel laid the blame squarely on Tranquilino for having
entrusted his original certificate of title to his brother Nonito, thereby
making it possible for the latter to fraudulently transfer the property
to an innocent third person like Moriel. Thus, Moriel filed a Fourth-
Party Complaint against Nonito, praying that if it turns out that
Tranquilino really did not sell the subject property to Nonito, the
latter should be made liable for whatever liability may be adjudged
against [Moriel].
In his Answer (to the Fourth-Party Complaint), Nonito admitted to
having signed the Deed of Absolute Sale in favor of Moriel, but
qualified that the execution of the same was “attended by undue
pressure considering that at that time, [Nonito] was of confused state
of mind brought about by the numerous unfortunate events that beset
his family.” According to Nonito, it was Moriel who prepared the
Deed of Absolute Sale, which [Nonito] mistakenly believed to be
merely one of mortgage to secure a loan that he had obtained from
Moriel. Accordingly, Nonito prayed that the fourth-party complaint
against him be dismissed and that the Deed of Absolute Sale in favor
of Moriel be nullified.
Curiously, during trial, despite Tranquilino’s insistence that his
signature on the deed of sale in favor of Lupa Realty was forged, he
did not present a handwriting expert to prove the alleged forgery.
Neither did Tranquilino present any evidence controverting Lupa
Realty’s allegations that he had sold the property to his brother

269

Nonito, who, in turn, transferred the property to Moriel, and the

latter eventually transferred the same to Lupa Realty.
Instead, Tranquilino presented only his nephew, Vernold, and his
tenants, Felino Rizaldo (Felino) and Florante Ruiz (Florante).
[Vernold] testified on the matters contained in the Complaint, i.e.,
about how he discovered that the land is now registered in the name
of Lupa Realty. While Felino and Florante both testified that they
were instituted as tenants in the property by the family of Tranquilino
since 1992 and no one has ever disturbed them in their possession
thereof.
On the other hand, Lupa Realty presented its former employee,
Demetria Balisi [(Demetria)], who testified that she was one of the
two witnesses to the deed of sale between Lupa Realty and Moriel.
Demetria further testified that because the OCT was in the name
of Tranquilino and not Moriel, Lupa Realty had asked for proof of
Moriel’s ownership thereof, and the latter submitted to them the deed
of sale between Tranquilino and Nonito, and the deed of sale between
Nonito and Moriel. We note that Tranquilino’s counsel admitted in
open court the existence of the deed of sale between Tranquilino and
Nonito.
Demetria acknowledged that none of the deeds of conveyances
between Tranquilino and Nonito; between Nonito and Moriel; and
between Moriel and Lupa Realty — was used in registering the
transfer of the subject property to Lupa Realty. According to
Demetria, it was Moriel’s mother who processed the registration, and
this was further confirmed by Moriel’s mother in an affidavit stating
that they “were able to secure at (their) own ways and means a new
Title of the subject property in favor of [Lupa Realty].”
To prove that Nonito really sold the subject property to him,
Moriel presented Onorio Rumbaoa [(Onorio)], who testified that he
was the agent of the sale between Nonito and Moriel. Onorio testified
that both Nonito and Moriel are his townmates and he arranged for
the two to

270

meet when Nonito wanted to sell the subject property. According to

Onorio, when he remarked to Nonito that the OCT was not in his
name, Nonito showed him the deed of sale executed by Tranquilino
to prove that he (Nonito) already own[ed] the subject property.
Onorio testified that after Moriel agreed to purchase the property, the
three of them (Nonito, Moriel and Onorio) went to the notary public
where they signed the deed of sale, with Onorio as witness. Moriel
corroborated the testimony of Onorio with regard to the details of the
sale to him of the subject property by Nonito.
Finally, Nonito testified that he only borrowed money from
Moriel and denied having sold the subject property to him. According
to Nonito, he gave Moriel a collateral for the purported loan but it
was not the subject property. When asked on cross-examination what
the collateral was, Nonito could not say. When asked how Moriel
came into possession of the OCT in Tranquilino’s name, Nonito also
could not say.
After due proceedings, the trial court rendered a decision with the
following disposition:
 “WHEREFORE, premises considered, the Court declares
and Orders that:

1. OCT (sic) No. P-109129 in the name of Lupa

Realty is null and void, hence, the Register of Deeds,
Tuguegarao, Cagayan is ordered to immediately cancel
the same;
2. TCT (sic) No. T-46041 in the name of the
plaintiff is reinstated and the property subject of the
same is reconveyed to the plaintiff;
3. Defendant shall pay plaintiff attorney’s fees in
the amount of P30,000.00;
4. Third-Party Defendant Moriel Urdas shall pay
Defendant/ Third-Party Plaintiff Lupa Realty the
amount of

271

P551,394 plus legal interest from the time the Third-

Party complaint was filed until full satisfaction of this
judgment;
5. Fourth-Party Defendant Nonito Agbayani pays
Third-Party Defendant/Fourth-Party Plaintiff Moriel
Urdas the amount of P286,698.32 plus legal interest
from the time the Fourth-Party complaint was filed up
to full satisfaction of this judgment;
6. For the same reason that the Court allows the
plaintiff to collect attorney’s fees from the Defendant,
the 3rd-party defendant is likewise adjudged to pay the
Third-Party plaintiff reasonable attorney’s fees in the
amount of P30,000.00. Likewise 4th-party plaintiff is
entitled to collect from the 4th-party defendant the
amount of P30,000.00 by way of attorney’s fees.

The other damages sought in the 3rd-party and 4th-party

complaints as well as the parties’ respective counterclaims are
denied for lack of merit.
SO ORDERED.”
6
Hence, [the] appeal by [Lupa Realty to the CA.]

Ruling of the CA

The CA in its Decision dated September 14, 2011 granted the

appeal. The CA held that the conclusions reached by the RTC are not
in accord with law and the evidence on record; therefore, the
7
reversal of the trial court’s decision is warranted.
_______________

6 Id., at pp. 37-44.

7 Id., at p. 46.

272

The CA ruled that Tranquilino failed to discharge his burden to

present clear and convincing evidence to overthrow the presumption
of regularity in the execution on January 21, 1992 of the Deed of
Absolute Sale (1992 DAS) in favor of his brother Nonito and to
8
prove his allegation of forgery regarding his signature. According to
the CA, Tranquilino’s insistence that he could not have signed the
9
1992 DAS because he was in America at that time was
10
insufficient. Further, the CA stated that the fact that there is a Deed
of Absolute Sale (1997 DAS) purportedly executed by Tranquilino
on October 29, 1997 in favor of Lupa Realty, which Moriel and his
mother used in registering the sale to Lupa Realty, is not sufficient in
itself to invalidate Transfer Certificate of Title (TCT) No. T-109129
11
in the name of Lupa Realty.
In fine, the CA ruled in favor of the dismissal of Tranquilino’s
complaint based on the lack of evidence regarding his forgery
allegation and its postulation that his action for declaration of nullity
of the 1997 DAS is not the direct proceeding required by law to
attack a Torrens certificate of title since it cannot be collaterally
12
attacked.
The dispositive portion of the CA’s Decision states:

WHEREFORE, the Decision, dated 15 June 2009, of the

Regional Trial Court, Branch 7, Aparri, Cagayan, in Civil Case No.
07-532 is REVERSED and SET ASIDE. Tranquilino Agbayani’s
complaint, as well as Lupa Realty’s third-party complaint, Moriel
Urdas’ fourth-party complaint, and all parties’ counterclaims, are
DISMISSED.

_______________

8 Id., at p. 48.
9 The RTC’s Decision states that as testified upon by Vernold, his uncle
Tranquilino left for California, U.S.A. in April 1989. Id., at p. 89.
10 Id., at pp. 48-49.
11 Id., at p. 50.
12 Id., at pp. 50-51.

273

13
 13
SO ORDERED.

Tranquilino filed a motion for reconsideration, which was denied

14
by the CA in its Resolution dated March 9, 2012.
Hence, the instant Rule 45 Petition. Lupa Realty filed its
15 16
Comment dated October 8, 2012. Tranquilino filed a Reply dated
June 28, 2013.

The Issues

The Petition raises the following issues:

1. whether the CA erred in reversing the RTC’s Decision that
declared the nullity of TCT No. T-109129 in the name of Lupa
Realty;
2. whether the CA erred in reversing the RTC’s Decision on the
ground that the RTC erred in ordering the cancellation of the TCT
under Lupa Realty’s name because the action filed by Tranquilino
constitutes a collateral attack on a Torrens title; and
3. whether the CA erred in recognizing and protecting Lupa
Realty’s right as an innocent purchaser for value (IPV).

The Court’s Ruling

The Petition is meritorious.

Rule 45 of the Rules of Court on Appeal by Certiorari to the
Supreme Court mandates that: the petition shall raise only questions
17
of law; this mode of review is not a matter of right, but of sound
judicial discretion; and it will be granted only

_______________

13 Id., at p. 51.
14 Id., at pp. 55-56.
15 Id., at pp. 108-137.
16 Id., at pp. 144-149.
17 Rules of Court, Rule 45, Sec. 1.

274

18
when there are special and important reasons therefor. A Rule 45
review is warranted when there is finding by the Court that the court
a quo has decided a question of substance in a way probably not in
19
accord with law or with the applicable decisions of the Court.
While only questions of law may be raised in a Rule 45 certiorari
petition, there are admitted exceptions, which includes the instance
when there is conflict in the findings of fact of the trial court and the
CA. The instant case falls under this exception.
 The RTC found that the 1992 DAS between Tranquilino and
Nonito was established by preponderance of evidence to be a
20
falsified document; the 1997 DAS between Tranquilino and Lupa
21
Realty was also falsified; and Lupa Realty was not an IPV.22 On the
other hand, the CA ruled that the 1992 DAS was valid because
Tranquilino was unable to prove that his signature therein was
forged.23 The CA did not, however, rule squarely on whether the
24 25
1997 DAS was falsified and whether Lupa Realty was an IPV.
Given the conflict in the findings of the RTC and the CA, a
review of the facts is justified.

_______________

18 Rules of Court, Rule 45, Sec. 6.

19 Rules of Court, Rule 45, Sec. 6(a).
20 Rollo, pp. 92-93.
21 Id., at p. 93.
22 Id.
23 Id., at p. 48.
24 The CA merely stated: “The fact that there is a Deed of Sale between
Tranquilino and Lupa Realty that Moriel and his mother used in registering the sale is
not sufficient in itself to invalidate TCT No. T-109129 in the name of Lupa Realty.”
Id., at p. 50.
25 The CA merely stated: “Lupa Realty presented sufficient proof of its lawful
acquisition of the subject property” and “Tranquilino’s action for declaration of
nullity of said Deed of Sale is not the direct proceeding required by law to attack a
Torrens certificate of title.” Id.

275

Tranquilino posits that both the 1992 DAS in favor of Nonito and
the 1997 DAS in favor of Lupa Realty, which Tranquilino
purportedly executed, are spurious and false.
26
As to the 1997 DAS (Exh. “F”), which is purportedly a
unilateral sale in favor of Lupa Realty and signed only by
Tranquilino, he reproduces the following portion of the RTC’s
Decision in support of his argument regarding its falsity:

“What really boggles the mind of the court is the existence of the
Deed of Sale (Exh. “F”) dated Oct. 29, 1997 allegedly executed
between Tranquilino Agbayani and LUpa Relaty (sic) and which was
registered and instrumental for the cancellation of OCT No. P-4601
[sic] and the issuance of TCT No. T-109129. Worst, a careful study of
said deed of sale and the Deed of Sale executed by and between
Moriel Urdas and Lupa Realty would reveal that the two deeds,
although allegedly executed and notarized on different dates, have
the same Doc. No., Book No., Page No., and series. The defendant
[Lupa Realty] cannot feign ignorance and innocence on the existence
of the Deed of Sale (Exh. “F”). It is a corporation whose business is,
 as apparent in its business name, mainly concerns real estate, thus, it
is incredible that it would entirely leave the transfer of the title into
the hands of Moriel Urdas and his mother. It is expected that it would
exert due diligence in its transactions, it being in the realty business.
Defendant having uttered a Deed of Sale (Exh. “F”), which plaintiff
has established by preponderance of evidence to have been falsified
and which Defendant impliedly admitted in its Answer and Third-
Party Complaint as indeed falsified when it claimed that its title was
derived from the Deed of Sale executed in its favor by Third-Party
Defendant Moriel Urdas, Defendant cannot [n]ow claim it was an
innocent purchaser for value.
The operative act in the cancellation of TCT [sic] No. 4604 [sic]
and the issuance of the TCT No. 109129 in

_______________

26 Records, pp. 239-240.

276

favor of the defendant was the presentation with the Register of

Deeds of falsified Deed of Sale allegedly executed by Tranquilino
27
Agbayani in favor of Lupa Realty.”

The CA justified the validity of the sale to Lupa Realty and its
TCT in this wise:

On the other hand, Lupa Realty presented sufficient proof of its

lawful acquisition of the subject property. The deeds of sale between
Tranquilino and Nonito; between Nonito and Moriel; and between
Moriel and Lupa Realty show the legal tie that bind the parties and
legally conveyed the subject property to Lupa Realty.
The fact that there is a Deed of Sale between Tranquilino and
Lupa Realty that Moriel and his mother used in registering the sale is
not sufficient in itself to invalidate TCT No. T-109129 in the name of
28
Lupa Realty.

The “DEED ABSOLUTE SALE” (DAS Moriel-Lupa Realty;

29
Exh. 2 Lupa”) by and between Moriel and Lupa Realty with “29
day of Oct 1997’’ as date of execution, which bears both the
signatures of “Roberto P. Alingog” with “CTC No. 7968352, Issued
at Cauayan, Isa[bela], Issued on 01/22/97” and “Moriel C. Urdas”
(but the acknowledgment does not reflect Moriel’s name but the
name of “Luzviminda Urdas” (Moriel’s spouse) without the specifics
of her CTC information) bears the following notarial information:
30
“Doc. No. 47; Page No. 10, Book No. 11; Series of 1997.”
On the other hand, the “DEED ABSOLUTE SALE” (1997 DAS;
31
Exh. “F”) also bears “29 day of Oct 1997” as date of execution; the
name of “Roberto P. Alingog” with “CTC No. 7968352, Issued at
Cauayan, Isa[bela], Issued on 01/22/97” in

_______________

27 Rollo, pp. 25-26, 92-93.

28 Id., at p. 50.
29 Records, pp. 331-332.
30 Id., at p. 332.
31 Id., at pp. 239-240.

277

the acknowledgment portion, together with Tranquilino Agbayani

and the specifics of his CTC, but Roberto P. Alingog is not a
signatory thereto; and the following notarial information: “Doc. No.
32
47; Page No. 10, Book No. 11; Series of 1997.”
The Court notes that the 1997 DAS contains this recital: “Their
right thereto being duly registered in accordance with the Land
Registration Act and evidenced by Original Certificate of Title No.
33
P-26619 with Homestead Patent No. 119163.” It must be noted
that Tranquilino’s title is Original Certificate of Title (OCT) No. P-
34
46041 with Free Patent No. 587747.
In both documents, the Notary Public’s name is illegible.
However, the following entries below the signature of the Notary
Public are almost identical:

The Court agrees with the RTC that it is indeed mind boggling
how two distinct documents which were supposedly notarized on the
same date by one Notary Public have identical notarial details, i.e.,
document number, page number, book number and year series.
Indeed, one of them must be fake or false.

_______________

32 Id., at p. 239.
33 Rollo, p. 152. Emphasis supplied.
34 Id., at p. 57.
35 Id., at p. 151. Entries below appear to be computer generated.
36 Id., at p. 153. Entries in bold appear to be handwritten.

278
 Based on all the facts narrated, it is the 1997 DAS which is sham
or spurious. As noted above, these are: (1) the similarity of its
notarial details with those of the DAS Moriel-Lupa Realty; (2) the
recital that it pertained to the land covered by “Original Certificate
of Title No. P-26619 with Homestead Patent No. 119163” and not to
Tranquilino’s OCT No. P-46041 with Free Patent No. 587747; (3)
the inclusion of Lupa Realty, represented by its President, Roberto P.
Alingog, as a party and the CTC details of Roberto P. Alingog, but
who is not made a signatory thereto; (4) the identity of its date of
execution with that of the DAS Moriel-Lupa Realty; and (5) the
identity of the notary public’s details in both 1997 DAS and the
DAS Moriel-Lupa Realty.
In addition, the Court does not lose sight of the fact that there is
uncontested evidence that Tranquilino could not have signed the
37
1997 DAS because he had left for California, U.S.A. in April 1989.
It is likewise significant to note the fact that Lupa Realty did not
even have the 1997 DAS marked and offered as its evidence is a
very strong indication of its falsity. In the Formal Offer of
Documentary Exhibits of Lupa Realty, the 1997 DAS was not
38
marked and offered as one of its exhibits. If the 1997 DAS was
truly executed by Tranquilino and is genuine, why did not Lupa
Realty have it marked and offered as its documentary exhibit? The
answer is obvious: because Lupa Realty wanted to distance itself
therefrom because it might be accused as being complicit with
Moriel and/or his mother in falsifying the 1997 DAS.
39
In People v. Sendaydiego, the Court stated the rule that if a
person had in his possession a falsified document and he made use
of it (uttered it), taking advantage of it and profiting therefrom, the
presumption is that he is the material

_______________

37 This was noted in the RTC’s Decision. Id., at p. 89.

38 Records, pp. 326-344.
39171 Phil. 114; 81 SCRA 120 (1978).

279

40
author of the falsification. Pursuant to Re: Fake Decision Allegedly
41
in G.R. No. 75242, the simulation of a public or official document,
done in a manner as to easily lead to error as to its authenticity,
42
constitutes the crime of falsification. Under Rule 132, Section
19(b), documents acknowledged before a notary public except last
wills and testaments are public documents. Further, it is presumed
43
that “evidence willfully suppressed would be adverse if produced.”
Article 1409(2) of the Civil Code provides that contracts “which
are absolutely simulated or fictitious” are inexistent and void from
the beginning. It is also provided in Article 1346 that “[a]n
absolutely simulated or fictitious contract is void.”
Justice Eduardo P. Caguioa discusses the concept and requisites
of simulation in the following manner:

x x x Simulation is the declaration of a fictitious intent manifested

deliberately and in accordance with the agreement of the parties in
order to produce for the purpose of deceiving others the appearance
of a transaction which does not exist or which is different from their
44
true agreement. Simulation involves a defect in the declaration of
the will. x x x Simulation requires the following: (1) A deliberate
declaration contrary to the will of the parties; (2) Agreement of the
parties to the apparently valid act; and (3) The purpose is to deceive
or to hide from third persons although it is not necessary that the
purpose be illicit or for purposes of fraud. The above

_______________

40 Id., at p. 134; p. 141.

41 491 Phil. 539; 451 SCRA 357 (2005).
42 Id., at p. 567; p. 386.
43 Rules of Court, Rule 131, Sec. 3(e).
44 Caguioa, Eduardo P., Comments and Cases on Civil Law, Civil Code of the
Philippines, Vol. IV, p. 549, 1983 Rev. Second ed., citing 1 Castan, Part II, p. 504, 8th
ed.

280

three requisites must concur in order that simulation may exist.

45
xxx

The three requisites are present in the 1997 DAS. There is a

deliberate declaration that Tranquilino sold the subject land to Lupa
Realty, which is contrary to their will. The agreement appears on its
face to be a valid act. The purpose is to deceive third persons into
believing that there was such a sale between Tranquilino and Lupa
Realty. The purpose, in this case, is evidently tainted with fraud.
Since the 1997 DAS is void, its registration is likewise void
pursuant to Section 53 of Presidential Decree No. (PD) 1529 (the
Property Registration Decree), which provides that “any subsequent
registration procured by the presentation of a forged duplicate
certificate of title, or a forged deed or other instrument, shall be null
and void.” The registration of the 1997 DAS being null and void, it
follows that TCT T-109129 in the name of Lupa Realty is also null
and void. Being null and void, it should be cancelled.
Moreover, the Court is perplexed why the Registry of Deeds for
the Province of Cagayan allowed the registration of the 1997 DAS.
While the Court has held that registration is a mere ministerial
act by which a deed, contract or instrument is sought to be inscribed
in the records of the Office of the Register of Deeds and annotated at
the back of the certificate of title covering the land subject of the
deed, contract or instrument and is not a declaration by the state that
such an instrument is a valid and subsisting interest in land; it is
merely a declaration that the record of the title appears to be
burdened with such instrument, according to the priority set forth in
46
the certificate, and that no valid objection can be interposed to

_______________

45 Id., citing Ferrara.

46 Agricultural Credit Cooperative Association of Hinigaran v. Yusay, 107 Phil.
791, 793-794 (1960).

281

the registration of a document by the Register of Deeds who finds

nothing defective or irregular on its face upon an examination
47
thereof, the fact of the matter is that the 1997 DAS is not regular
on its face because, as duly noted above, it pertained to the land
covered by OCT No. P-26619 with Homestead Patent No. 119163.
Presented with the 1997 DAS that has reference to an OCT different
from that of Tranquilino’s title and to a Homestead Patent instead of
a Free Patent, the Register of Deeds concerned should not have
allowed its registration because of the obvious or patent irregularity
appearing on the face of the 1997 DAS.
From the foregoing, the CA erred when it ruled that the TCT of
Lupa Realty is valid.
With the declaration by the Court that the 1997 DAS is sham or
spurious and the TCT in the name of Lupa Realty is null and void,
does it follow that the sale of the subject land to Lupa Realty is also
null and void? In other words, can Lupa Realty be nonetheless
declared as the lawful owner of the subject land despite the finding
that the TCT issued in his favor is void?
The resolution of this issue hinges on the validity of the 1992
DAS. If the 1992 DAS between Tranquilino and Nonito is valid,
then Nonito could have validly sold the subject land to Moriel and
Moriel could have thereafter validly sold it to Lupa Realty. The
invalidity of Lupa Realty’s TCT does not necessarily render invalid
its right of ownership over the subject land if the sales preceding the
sale to it by Moriel are valid.
As to the 1992 DAS, Tranquilino argues that the unqualified
admission made during the pretrial proceedings in the RTC by
Nonito, through his counsel on record, Atty. Frederick Aquino, that
there was no such sale between Tranquilino and

_______________
 47 Noblejas, Antonio H. and Noblejas, Edilberto H., Registration of Land Titles
and Deeds, p. 349 (2007 Rev. ed.); see also Peña, Narciso, Registration of Land Titles
and Deeds, p. 166 (1980 Rev. ed.).

282

Nonito is a judicial admission that it is spurious, which dispenses

with the need to present proof of the matter of fact already
48
admitted. The Pre-Trial Order dated April 22, 2003 states: “Atty.
Aquino denied that Tranquilino Agbayani executed a Deed of
Absolute Sale in favor of Nonito Agbayani. According to Atty.
49
Aquino there was no such sale.”
Regarding admissions by counsel of a party during the
preliminary conference, Camitan v. Fidelity Investment
50
Corporation is instructive:

x x x Unfortunately for petitioners, their counsel admitted the

genuineness of the owner’s duplicate copy of the TCT presented by
Fidelity during the preliminary conference at the CA. The following
exchange is revealing:

J. MARTIN:

Counsel for the private respondent, will you go over the

owner’s copy and manifest to the court whether that is a
genuine owner’s copy?

ATTY. MENDOZA:

Yes, Your Honor.

J. MARTIN:

Alright. Make it of record that after examining the

owner’s copy of TCT NO. (T-12110) T-4342, counsel for
the private respondent admitted that the same appears to
be a genuine owner’s copy of the transfer certificate of
title. x x x

xxxx

_______________

48 See Rollo, p. 23.

49 Records, p. 167.
50 574 Phil. 672; 551 SCRA 540 (2008).
 283

The foregoing transcript of the preliminary conference

indubitably shows that counsel for petitioners made a judicial
admission and failed to refute that admission during the said
proceedings despite the opportunity to do so. A judicial admission is
an admission, verbal or written, made by a party in the course of the
proceedings in the same case, which dispenses with the need for
proof with respect to the matter or fact admitted. It may be
contradicted only by a showing that it was made through palpable
51
mistake or that no such admission was made.

On the other hand, American jurisprudence sets the following

parameters on judicial admissions:

A judicial admission is a formal statement, either by party or his

or her attorney, in course of judicial proceeding which removes an
admitted fact from field of controversy. It is a voluntary concession
of fact by a party or a party’s attorney during judicial proceedings.
Judicial admissions are used as a substitute for legal evidence at
trial. Admissions made in the course of judicial proceedings or
judicial admissions waive or dispense with, the production of
evidence, and the actual proof of facts by conceding for the purpose
of litigation that the proposition of the fact alleged by the opponent is
true. x x x
A judicial admission is a deliberate, clear, unequivocal statement
of a party about a concrete fact within that party’s peculiar
knowledge, not a matter of law. x x x In order to constitute a judicial
admission, the statement must be one of fact, not opinion. To be a
judicial admission, a statement must be contrary to an essential fact
or defense asserted by the person giving the testimony; it must be
deliberate, clear and unequivocal x x x.

_______________

51 Id., at pp. 680-682; pp. 547-549, citing Rules of Court, Rule 129, Sec. 4.

284

Judicial admissions are evidence against the party who made

them, and are considered conclusive and binding as to the party
making the judicial admission. A judicial admission bars the
admitting party from disputing it. x x x
A judicial admission of fact may carry with it an admission of
other facts necessarily implied from it.
xxxx
 Judicial admissions may occur at any point during the litigation
52
process. An admission in open court is a judicial admission. x x x

The admission by Nonito’s counsel during the pretrial

proceedings before the RTC that there was no sale between
Tranquilino and Nonito qualifies as a judicial admission because the
statement is a deliberate, clear, unequivocal statement of a party’s
attorney during judicial proceedings in open court about a concrete
or essential fact within that party’s peculiar knowledge. Since such
statement is a judicial admission, it does not require proof according
to Section 4, Rule 129 of the Rules of Court, which provides:

SEC. 4. Judicial admissions.—An admission, verbal or written,

made by a party in the course of the proceedings in the same case,
does not require proof. The admission may be contradicted only by
showing that it was made through palpable mistake or that no such
admission was made.

Moreover, there was no palpable mistake on the part of Nonito’s

counsel in making the admission because in the offer of Nonito’s
testimony on December 2, 2008, he stated that “the land was the
property in suit was never sold to him [Nonito] by his brother
53
Tranquilino Agbayani.” That is not

_______________

52 29A Am. Jur. 2d, Evidence §§ 770-771, pp. 136-138. Citations omitted.
53 TSN, December 2, 2008, p. 3.

285

all. The admission by Nonito himself, on cross-examination by

Tranquilino’s counsel, that Tranquilino was in the United States at
54
the time of the purported transaction supports the statement of the
counsel of Nonito that there was no sale between Tranquilino and
Nonito.
Since there is judicial admission that there was no sale of the
subject land between Tranquilino and Nonito, affirmed anew during
oral testimony by Nonito himself, then there is no question that the
1992 DAS is void. The three requisites of a simulated contract are
existent. There is a deliberate declaration that Tranquilino sold the
subject land to Nonito, which is contrary to their will because there
was no sale between them. The agreement appears on its face to be a
valid act. The purpose is to deceive third persons into believing that
there was such a sale between them.
Consequently, the CA committed egregious error when it made
the finding that the 1992 DAS is valid. Given that Tranquilino did
not sell the subject land to Nonito, it could not have been sold by
Nonito to Moriel and Moriel could not, in turn, have sold it to Lupa
Realty.
Lupa Realty’s argument that Tranquilino’s action for declaration
of nullity of the 1997 DAS is not the direct proceeding required by
law to attack a Torrens certificate of title since it cannot be
collaterally attacked, upheld by the CA, is untenable.
In deference to the conclusiveness and indefeasibility of Torrens
titles, a certificate of title shall not be subject to collateral attack
pursuant to Section 48 of PD 1529.
As to what constitutes a direct attack on a Torrens title, the Court
55
observed in Firaza, Sr. v. Spouses Ugay:

_______________

54 Id., at p. 8.
55 708 Phil. 24; 695 SCRA 26 (2013).

286

The attack is considered direct when the object of an action is to

annul or set aside such proceeding, or enjoin its enforcement.
Conversely, an attack is indirect or collateral when, in an action to
obtain a different relief an attack on the proceeding is nevertheless
made as an incident thereof. Such action to attack a certificate of
title may be an original action or a counterclaim, in which a
56
certificate of title is assailed as void. x x x

Here, there is a direct attack on Lupa Realty’s TCT.

Firstly, the Complaint filed by Tranquilino before the RTC is
captioned: “For: Reivindicacion, Cancellation of Title and Document
57
with Damages.”
Secondly, the Complaint alleged:

7. That the “Deed Absolute Sale” [or 1997 DAS] (Annex “B”) is
a falsified document and the signature purporting to be that of the
plaintiff in said document is a forgery for the reason that he never
sold the land in suit to anybody; that he never signed said document;
that he never received P425,500.00 from the defendant; that he never
appeared before Notary Public Agustin Ladera in Cauayan, Isabela
on October 29, 1997 because on that date he was in the United States
of America.
8. That as a consequence, the ‘‘Deed Absolute Sale” (Annex
“B”) should be declared null and void and that Transfer Certificate of
Title No. T-109129 (in the name of the defendant) should also be
declared null and void, and cancelled and that Original Certificate of
Title No. P-46041 in the name of the plaintiff should be revived and
58
reinstated.
_______________

56 Id., at p. 29; p. 32. Citations omitted.

57 Rollo, p. 63.
58 Id., at pp. 64-65.

287

Thirdly, the Complaint prayed that judgment be rendered for

Tranquilino declaring, among others, the nullity and ordering the
cancellation of TCT No. T-109129 (in the name of Lupa Realty) and
ordering the revival and reinstatement of OCT No. P-46041 in the
59
name of Tranquilino.
The foregoing clearly show that the Complaint purposefully
sought the cancellation of Lupa Realty’s TCT, which is a direct
attack thereon.
With the pronouncement that there could not have been a valid
sale of the subject land to Lupa Realty, the latter cannot qualify as an
IPV. Also, the Court totally agrees with the RTC that:

x x x [Lupa Realty] is a corporation whose business is, as

apparent in its business name, mainly concern[ed with] real estate,
thus, it is incredible that it would entirely leave the transfer of the
title into the hands of Moriel x x x and his mother. It is expected that
it would exert due diligence in its transactions, it being in the realty
60
business. x x x

Evidently, in allowing the falsified 1997 DAS to cause the

cancellation of Tranquilino’s OCT and the issuance of a TCT in its
name, Lupa Realty acted in bad faith.
WHEREFORE, the Petition is hereby GRANTED. The
Decision dated September 14, 2011 and the Resolution dated March
9, 2012 of the Court of Appeals in C.A.-G.R. CV No. 93912 are
REVERSED and SET ASIDE. The Decision dated June 15, 2009
rendered by the Regional Trial Court, Branch 7, Aparri, Cagayan in
Civil Case No. 07-532 is REINSTATED with modifications: with
respect to No. 1: “OCT No. P-109129 in the name of Lupa Realty. . .
” should instead read “TCT No. T-109129 in the name of Lupa
Realty. . . ” and No.

_______________

59 Id., at p. 65.
60 Id., at p. 92.

288
 2: “TCT No. T-46041 in the name of the plaintiff. . . ” should instead
read “OCT No. P-46041 in the name of the plaintiff.”
SO ORDERED.

Carpio (Chairperson), Perlas-Bernabe and Lazaro-Javier, JJ.,

concur.
J. Reyes, Jr., J., On Leave.

Petition granted, judgment and resolution reversed and set aside.

That of Regional Trial Court of Aparri, Cagayan, Br. 7 reinstated
with modifications.

Notes.—The admission having been made in a stipulation of

facts at pretrial by the parties, it must be treated as a judicial
admission. Under Section 4, of Rule 129 of the Rules of Court, a
judicial admission requires no proof. (Eastern Shipping Lines, Inc.
vs. BPI/MS Insurance Corp., 745 SCRA 98 [2015])
The basic characteristic of a simulated contract is that it is not
really desired or intended to produce legal effects or does not in any
way alter the juridical situation of the parties. (Quintos vs.
Development Bank of the Philippines, 766 SCRA 553 [2015])

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