Digest Revised

Heirs of ESTELITA BURGOS-LIPAT, namely: ALAN B. LIPAT and ALFREDO B. LIPAT, JR., Petitioners, vs. Heirs of EUGENIO D. TRINIDAD, namely: ASUNCION R. TRINIDAD, VICTOR R. TRINIDAD, IMACULADA T. ALFONSO, CELESTINA T. NAGUIAT, FERNANDO R. TRINIDAD, MICHAEL R. TRINIDAD and JOSEFINA T. NAGUIAT, Respondents. G.R. No. 185644 March 2, 2010 CORONA, J.: Facts Estelita and Alfredo Lipat obtained a loan from Pacific Banking Corporation, secured by a real estate mortgage. Due to petitioners’ failure to pay their loans, the PBC foreclosed the subject property with Eugenio D. Trinidad as the highest bidder. He was issued a certificate of sale which was registered on April 12, 1989. The petitioners filed a complaint for annulment of mortgage, extra-judicial foreclosure and certificate of sale. The RTC dismissed the complaint but granted petitioners five months and 17 days from the finality of the decision to exercise their right of redemption, a decision which was subsequently affirmed by the Supreme Court. Meanwhile, petitioners assigned their rights over the contested property to Partas Transporation Co., Inc. (PTCI). Within the given period left for redemption, PTCI exercised the right of redemption. However, the heirs of Trinidad refused to claim the redemption money and surrender the certificate of title. Issue WON the right to redemption should have been exercised within one year from the date of registration of the certificate of sale. Ruling The one-year redemption period is the rule that generally applies to foreclosure of mortgage by a bank. The period of redemption is not tolled by the filing of a complaint or petition for annulment of the mortgage and the foreclosure sale conducted pursuant to the said mortgage. However, in Lipat, the Supreme Court upheld the RTC decision giving petitioners five months and 17 days from the finality of the trial court’s decision to redeem their foreclosed property. Lipat, already final and executory, has therefore become the law of the case between the parties, even though the said period was beyond one year from the date of registration of the sale. The CA had no power to reverse the Court’s final and executory judgment. -0THE PARENTS-TEACHERS ASSOCIATION (PTA) OF ST. MATHEW CHRISTIAN ACADEMY, GREGORIO INALVEZ, JR., ROWENA LAYUG, MALOU MALVAR, MARILOU BARAQUIO, GARY SINLAO, LUZVIMINDA OCAMPO,MARIFE FERNANDEZ, FERNANDO VICTORIO, ERNESTO AGANON and RIZALINO MANGLICMOT, represented by their Attorney-in-Fact, GREGORIO INALVEZ, JR., Petitioners,

vs. THE METROPOLITAN BANK and TRUST CO., Respondent. G.R. No. 176518

March 2, 2010

DEL CASTILLO, J.: Facts Denivin and Josefina Ilagan were granted a loan by the Metropolitan Bank and Trust Co. secured by a Real Estate Mortgage over parcels of land. Upon default, an extrajudicial foreclosure was conducted with Metropolitan Bank being the highest bidder and for which a Certificate of Sale was issued. During the period of redemption, a Writ of Possession was approved in favor of the Bank. On June 30, 2005, the St. Mathew Christian Academy of Tarlac, Inc., owned by the mortgagors and therefore included in one of the foreclosed lands, filed a Petition for Injunction with Prayer for Restraining Order. Issue WON St. Mathew Christian Academy of Tarlac, Inc. is really a third person which cannot be bound by the writ of possession issued by the Court. Ruling Petitioners are not "Third Parties" against whom the writ of possession cannot be issued and implemented. As a rule, it is ministerial upon the court to issue a writ of possession after the foreclosure sale and during the period of redemption. Section 7 of Act No. 3135 explicitly authorizes the purchaser in a foreclosure sale to apply for a writ of possession. It is settled that the issuance of a writ of possession is a ministerial duty of the court. The purchaser of the foreclosed property, upon ex parte application and the posting of the required bond, has the right to acquire possession of the foreclosed property during the 12-month redemption period. Since petitioners’ possession of the subject school premises stemmed from their employment or enrollment contracts with the school, their right to possess the subject school premises cannot be adverse to that of the school and of its owners. As such, the petitioners cannot be deemed "third parties". The proper remedy for the petitioners is a separate, distinct and independent suit, provided for under Act No. 3135. -0CARMEN DEL PRADO, Petitioner, vs. SPOUSES ANTONIO L. CABALLERO and LEONARDA CABALLERO, Respondents. G.R. No. 148225 NACHURA, J.: Facts

March 3, 2010

Several parcels of land, including Cadastral Lot No. 11909, were adjudicated in favor of Spouses Antonio and Leonarda Caballero in 1985; hence, the court ordered for the issuance of the decree of registration and the corresponding titles of the lots in favor of the Caballeros. On June 11, 1990, Spouses Caballero sold to Carmen del Prado, Cadastral Lot No. 11909 on the basis of the tax declaration covering the property. On March 20, 1991, petitioner filed in the same cadastral proceedings a "Petition for Registration of Document Under PD 1529" in order that a certificate of title be issued in her name, covering the whole Lot No. 11909, which is in excess of the allotted area to be sold. In the petition, she alleged that the tenor of the instrument of sale indicated that the sale was for a lump sum, in which case, the vendor was bound to deliver all that was included within said boundaries even when it exceeded the area specified in the contract. Issue WON the petitioner’s recourse, by filing the petition for registration in the same cadastral case, was proper. Ruling Petitioner’s recourse, by filing the petition for registration in the same cadastral case, was improper. It is a fundamental principle in land registration that a certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein. Such indefeasibility commences after one year from the date of entry of the decree of registration. Inasmuch as the petition for registration of document did not interrupt the running of the period to file the appropriate petition for review and considering that the prescribed one-year period had long since expired, the decree of registration, as well as the certificate of title issued in favor of respondents, had become incontrovertible. In addition, what really defines a piece of ground is not the area, calculated with more or less certainty, mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating its limits. However, numerical data are not the sole gauge of unreasonableness of the excess or deficiency in area. In the instant case, the parties agreed on the purchase price of P40,000.00 for a predetermined area of 4,000 sq m, with the specified boundaries. Clearly, the discrepancy of 10,475 sq m cannot be considered a slight difference in quantity. It is not a reasonable excess or deficiency that should be deemed included in the deed of sale. -0SPOUSES NORMAN K. CERTEZA, JR. and MA. ROSANILA V. CERTEZA, AND AMADA P. VILLAMAYOR and HERMINIO VILLAMAYOR, JR., Petitioners, vs. PHILIPPINE SAVINGS BANK, Respondent. G.R. No. 190078 DEL CASTILLO, J.:

March 5, 2010

Facts Petitioners obtained a loan from Philippine Savings Bank. Due to petitioners’ failure to pay their obligation, an Extrajudicial Foreclosure of the Real Estate Mortgage was instituted. During the auction sale, PS Bank emerged as the sole and highest bidder. A corresponding Certificate of Sale was then issued in its favor and was later registered. A Writ of Possession was then subsequently granted. On January 20, 2005, petitioners filed an Omnibus Motion for Leave to Intervene and to Stay Issuance or Implementation of Writ of Possession. They further sought the nullification of the extrajudicial foreclosure sale for allegedly having been conducted in contravention of the procedural requirements prescribed in A.M. No. 99-10-05-0 (Re: Procedure in Extrajudicial Foreclosure of Real Estate Mortgages). Issue WON the auction sale conducted by virtue of the extrajudicial foreclosure of the mortgage should be declared null and void for failure to comply with the twobidder rule. Ruling The law governing cases of extrajudicial foreclosure of mortgage is Act No. 3135. It is impractical and burdensome to require the two-bidder rule considering that not all auction sales are commercially attractive to prospective bidders. The two-bidder rule is provided under P.D. No. 1594 with respect to contracts for government infrastructure projects because of the public interest involved. In extrajudicial foreclosure of mortgages however, the private interest is predominant. Therefore, the requirement that there must be at least two bidders is not as exigent as in the case of contracts for government infrastructure projects. Circular No. 72002 Section 5(a) further states that: Sec. 5. Conduct of the extra-judicial foreclosure sale –

a. The bidding shall be made through sealed bids which must be submitted to the Sheriff who shall conduct the sale between the hours of 9 a.m. and 4 p.m. of the date of the auction (Act 3135, Sec. 4). xxx

The use of the word "bids" (in plural form) does not make it a mandatory requirement to have more than one bidder for an auction sale to be valid. Therefore, the extra-judicial foreclosure sale conducted in this case is regular and valid. Consequently, the subsequent issuance of the writ of possession is likewise regular and valid. -0SULTAN YAHYA "JERRY" M. TOMAWIS, Petitioner, vs. HON. RASAD G. BALINDONG, AMNA A. PUMBAYA, JALILAH A. MANGOMPIA, and RAMLA A. MUSOR,Respondents. G.R. No. 182434

March 5, 2010

VELASCO, JR., J.: Facts Amna A. Pumbaya, Jalilah A. Mangompia, and Ramla A. Musor are the daughters of the late Acraman Radia. On February 21, 1997, private respondents filed with the Shari’a Court District (SDC) an action for quieting of title of a parcel of land, docketed as Civil Case No. 102-97, located in Marawi City, against Sultan Jerry Tomawis and Mangoda Radia. The respondents alleged that: (1) They were the absolute owners of the lot subject of the complaint, being the legal heirs of Acraman Radia, who had always been in peaceful, continuous, and adverse possession of the property; (2) Tomawis assumed ownership of the said property on the claim that he bought the same from Mangoda Radia, who, in turn, claimed that he inherited it from his late father; (3) in 1996, they "were informed that their land [was] leveled and the small houses [built] thereon with their permission were removed" upon the orders of Tomawis; and (4) they had been unlawfully deprived of their possession of the land, and Tomawis’ actions had cast a cloud of doubt on their title. Issue WON the SDC can validly take cognizance of Civil Case No. 102-97. Ruling The allegations, as well as the relief sought by private respondents, the elimination of the "cloud of doubts on the title of ownership" on the subject land, are within the SDC’s jurisdiction to grant. SDC had, by virtue of PD 1083, original jurisdiction, concurrently with the RTCs and MTCs, over all personal and real actions outside the purview of Art. 143(1)(d) of PD 1083, in which the parties involved were Muslims, except those for ejectment. PD 1083 is a special law that only applies to Shari’a courts. Jurisdiction over the subject matter of a case is determined from the allegations of the complaint and the character of the relief sought. In the instant case, private respondents’ petition in Civil Case No. 102-97 sufficiently alleged the concurrent original jurisdiction of the SDC. On the other hand, BP 129 was enacted to reorganize only existing civil courts and is a law of general application to the judiciary. While the Court recognizes the concurrent jurisdiction of the SDCs and the RTCs with respect to cases involving only Muslims, the SDC has exclusive original jurisdiction over all actions arising from contracts customary to Muslims to the exclusion of the RTCs, as the exception under PD 1083, while both courts have concurrent original jurisdiction over all other personal actions. Said jurisdictional conferment, found in Art. 143 of PD 1083, is applicable solely when both parties are Muslims and shall not be construed to operate to the prejudice of a non-Muslim, who may be the opposing party against a Muslim. -0PIO DELOS REYES (Deceased), represented by heirs FIDEL DELOS REYES, MAURO DELOS REYES and IRENE BONGCO (Deceased), represented by surviving spouse RODOLFO BONGCO, Petitioners, vs. HONORABLE WALDO Q. FLORES, in his capacity as Senior Deputy Executive

Secretary, Office of the President, HONORABLE RENE C. VILLA, in his capacity as Secretary of the Department of Land Reform (formerly Department of Agrarian Reform), THE PROVINCIAL AGRARIAN REFORM OFFICER (PARO) OF DINALUPIHAN BATAAN, THE MUNICIPAL AGRARIAN REFORM OFFICER (MARO) OF HERMOSA AND ORANI, BATAAN, and FORTUNATO QUIAMBAO, Respondents. G.R. No. 168726

March 5, 2010

CARPIO, J.: Facts Pio delos Reyes applied for exclusion from the coverage of operation land transfer, under P.D. No. 27 and LOI No. 474, some parcels of land, which was later recommended by the Provincial Agrarian Reform Officer for approval. Specifically, the recommendation included retention of not more than seven hectares of his tenanted land planted to rice and corn, exclusion of his children’s properties from the coverage of operation land transfer, cancellation of certificates of land transfer covering the properties of his children issued in favor of farmer beneficiaries, and cancellation of certificates of land transfer covering his retention area. Fortunato Quiambao, however, appealed to the DAR Secretary claiming that Pio resorted to fraud in not stating the totality of his landholdings, which was in excess of 7 hectares. He further alleged that during the pendency of the petition for exclusion or retention, Pio converted portions of their landholdings into residential lands. The DAR Secretary found that Pio and his children owned lands used for residential, commercial, industrial, or other urban purposes from which they derived adequate income to support themselves and their families; hence, he concluded that the subject landholdings fell under the government’s operation land transfer program. Pio and his children moved for reconsideration, which the DAR Secretary dismissed. The Office of the President likewise dismissed the petitioners’ motion upon appeal. Issue WON the petition for certiorari and mandamus filed by petitioners is proper. Ruling The thrust of the rule on exhaustion of administrative remedies is that courts must allow administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence. Petitioners should have first filed a motion for reconsideration of the 30 September 2004 order of the Office of the President. The parties are presumed to know the hornbook rule that judgments become final and executory only upon the lapse of the reglementary period to appeal or to file a motion for reconsideration without any appeal or motion for reconsideration having been made.

As this case involves the application of P.D. No. 27 and LOI No. 474, the DAR Secretary, owing to his agrarian expertise, is in a better position to make a final determination whether petitioners’ landholdings may be subject of exclusion from operation land transfer or retention. -0ATTY. RESTITUTO G. CUDIAMAT, ERLINDA P. CUDIAMAT and CORAZON D. CUDIAMAT, Petitioners, vs. BATANGAS SAVINGS AND LOAN BANK, INC., and THE REGISTER OF DEEDS, NASUGBU, BATANGAS,Respondents. G.R. No. 182403

March 9, 2010

CARPIO MORALES, J.: Facts Atty. Restituto Cudiamat and his brother Perfecto were the registered coowners of a 320 square meter parcel of land in Balayan, Batangas, which was registered in Nasugbu, Batangas. Restituto, who resided in Ozamiz City with his wife, entrusted the custody of the title to who Perfecto. In 1979, Perfecto, without the knowledge and consent of Restituto, obtained a loan from Batangas Savings and Loan Bank, Inc with the said property as a security. On June 19, 1991 the bank foreclosed the property. In 1998, as Perfecto’s widow Corazon was being evicted from the property, she and spouses Restituto and Erlinda filed on August 9, 1999 before the RTC of Balayan a complaint "for quieting of title with damages" against the bank and the Register of Deeds of Nasugbu, assailing the mortgage as being null and void as they did not authorize the encumbrance of the property. Issue WON the RTC of Balayan had no jurisdiction over the petitioners’ complaint. Ruling Estoppel bars the bank from raising the issue of lack of jurisdiction of the Balayan RTC. The Balayan RTC had jurisdiction over the complaint for quieting of title. The present case is an exception to the rule that lack of jurisdiction on the subject matter can be raised at any time and is not lost by estoppel by laches. To compel petitioners to re-file and relitigate their claims before the Nasugbu RTC when the parties had already been given the opportunity to present their respective evidence in a full-blown trial before the Balayan RTC which had, in fact, decided petitioners’ complaint (for about two years) would be an exercise in futility and would unjustly burden petitioners. The Court, in Valenzuela v. Court of Appeals, held that as a general rule, if there is a judicial liquidation of an insolvent bank, all claims against the bank should

be filed in the liquidation proceeding. The Court in Valenzuela, however, after considering the circumstances attendant to the case, held that the general rule should not be applied if to order the aggrieved party to refile or relitigate its case before the litigation court would be "an exercise in futility." In the present case, the Court finds that analogous considerations exist to warrant the application of Valenzuela. Petitioner Restituto was 78 years old at the time the petition was filed in this Court, and his co-petitioner-wife Erlinda died during the pendency of the case. And, except for co-petitioner Corazon, Restituto is a resident of Ozamis City. To compel him to appear and relitigate the case in the liquidation court-Nasugbu RTC when the issues to be raised before it are the same as those already exhaustively passed upon and decided by the Balayan RTC would be superfluous. -0TEOFISTO OÑO, PRECY O. NAMBATAC, VICTORIA O. MANUGAS and POLOR O. CONSOLACION, Petitioners, vs. VICENTE N. LIM, Respondent. G.R. No. 154270

March 9, 2010

BERSAMIN, J.: Facts Vicente Lim filed a petition for the reconstitution of the owner’s duplicate copy of OCT No. RO-9969-(O-20449), alleging that said OCT had been lost during World War II by his mother, Luisa and that the lot covered by said OCT had been sold to Luisa by Spouses Oño. This, however, was opposed by Zosimo Oño and Teofisto Oño contending that they had the certificate of title in their possession as the successors-in-interest of Spouses Oño. They further claimed that Spouses Oño never sold Lot No. 943 to Luisa. Lim, on the other hand, converted the petition for reconstitution into a complaint for quieting of title, averring additionally that he and his predecessor-in-interest had been in actual possession of the property since 1937, cultivating and developing it, enjoying its fruits, and paying the taxes corresponding to it. He prayed that the Oños be ordered to surrender the reconstituted owner’s duplicate copy of OCT No. RO-9969-(O-20449), and that said OCT be cancelled and a new certificate of title be issued in the name of Luisa in lieu of said OCT. Issue 1. Whether or not the validity of the OCT could be collaterally attacked through an ordinary civil action to quiet title; 2. Whether or not the ownership over registered land could be lost by prescription, laches, or adverse possession. Ruling

The action was neither a direct nor a collateral attack on OCT No. RO-9969(O-20449), for Lim was asserting only that the existing title registered in the name of the petitioners’ predecessors had become inoperative due to the conveyance in favor of Lim’s mother, and resultantly should be cancelled. The action only sought the removal of a cloud from Lim’s title, and the confirmation of Lim’s ownership over the disputed property as the successor-in-interest of Luisa. Prescription was not relevant to the determination of the dispute herein, considering that Lim did not base his right of ownership on an adverse possession over a certain period. He insisted herein, instead, that title to the land had been voluntarily transferred by the registered owners themselves to Luisa, his predecessor-in-interest. Lim showed that his mother had derived a just title to the property by virtue of sale and that in view of the delivery of the property, coupled with Luisa’s actual occupation of it, all that remained to be done was the issuance of a new transfer certificate of title in her name. -0DEPARTMENT OF AGRARIAN REFORM, represented by SECRETARY HERNANI A. BRAGANZA, Petitioner, vs. PABLO BERENGUER, BELINDA BERENGUER, CARLO BERENGUER, ROSARIO BERENGUER-LANDERS, and REMEDIOS BERENGUER-LINTAG, Respondents. G.R. No. 154094

March 9, 2010

BERSAMIN, J.: Facts The respondents were the registered owners of several residential and industrial lands located in Barangay Bibincahan, Sorsogon, Sorsogon. They filed in the office of DAR Regional their application for exclusion of their landholdings from CARP coverage. The respondents claimed that the lands were originally devoted to pasture and livestock raising, and later being already classified as residential and industrial lands; that as early as 1981, the Housing and Land Use Regulatory Board had classified their landholdings as residential and industrial lands. The DAR Secretary, however, cancelled their titles and issued certificates of land ownership awards, covering their landholdings, to the members of the Baribag Agrarian Reform Beneficiaries Development Cooperative. Issue WON the DAR Secretary had jurisdiction over the respondents’ landholdings, which were outside the coverage of the CARL. Ruling

The DAR Administrative Order No. 9, s. 1993 required that properties should be considered excluded from the coverage of the CARL only if it was established that there existed the minimum ratio of one head of cattle to one hectare of land, and one head of cattle to 1.7815 hectares of infrastructure. Having found only 15 cattle within the 58 hectares land during the semestral survey did not automatically mean that the landholdings were not devoted to the raising of livestock. Several reasons including pestilence, cattle rustling, or sale of the cattle may explain the insufficiency. Also, in Luz Farms v. Secretary of the Department of Agrarian Reform: xxx it was never the intention of the framers of the Constitution to include livestock and poultry industry in the coverage of the constitutionally-mandated agrarian reform program of the Government. More importantly, the DAR failed to establish that the landholdings were agricultural. Resolution No. 5 by the Sangguniang Bayan of Sorsogon, Sorsogon, showed that the limits of the poblacion area of the municipality included Barangay Bibincahan, where the respondents’ landholdings were situated. Thereby, the respondents’ landholdings were presumed to be industrial and residential lands. In Hilario v. Intermediate Appellate Court, the Court said:” A lot inside the poblacion should be presumed residential, or commercial, or non-agricultural unless there is a clearly preponderant evidence to show that it is agricultural.” There is no dispute that as early as 1981, the respondents’ landholdings have been part of the poblacion of Sorsogon, Sorsogon. In fact, the excerpt from the Comprehensive Development Plan of Sorsogon, Sorsogon showed that Barangay Bibincahan was within the Central Business District of the municipality. -0FIDELA R. ANGELES, Petitioner, vs. The SECRETARY OF JUSTICE, THE ADMINISTRATOR, LAND REGISTRATION AUTHORITY, THE REGISTER OF DEEDS OF QUEZON CITY, and SENATOR TEOFISTO T. GUINGONA, JR., Respondents. G.R. No. 142549

March 9, 2010

LEONARDO-DE CASTRO, J.: The property involved in this case is covered by OCT No. 994, which encompasses 1,342 hectares of the Maysilo Estate. On May 3, 1965, petitioner and some individuals, claiming to be the heirs of a certain Maria de la Concepcion Vidal, and alleging that they are entitled to inherit her proportional share in the parcels of land located in Quezon City and in the municipalities of Caloocan and Malabon, Province of Rizal, commenced a special civil action for partition and accounting of the property otherwise known as Maysilo Estate covered by OCT No. 994, allegedly registered on April 19, 1917 with the Registry of Deeds of Caloocan City. The court granted the partition and accounting prayed for by plaintiffs. However, the Registers of Deeds of Caloocan City and Quezon City refused to comply with the RTC Order based on the indorsements issued by the DOJ and the

LRA for it was found that there is only one OCT No. 994 which was issued by the Rizal Register of Deeds on 3 May 1917 (and not on 19 April 1919) pursuant to Decree No. 36455 in Land Registration Case No. 4429. Issue WON the LRA may refuse to issue the decree of registration, even though ordered by the court. Ruling In Laburada v. Land Registration Authority: That the LRA hesitates in issuing a decree of registration is understandable. Rather than a sign of negligence or nonfeasance in the performance of its duty, the LRA's reaction is reasonable, even imperative. Considering the probable duplication of titles over the same parcel of land, such issuance may contravene the policy and the purpose, and thereby destroy the integrity, of the Torrens system of registration. The issuance by the LRA officials of a decree of registration is not a purely ministerial duty in cases where they find that such would result to the double titling of the same parcel of land. The Register of Deeds cannot be compelled by mandamus to comply with the RTC Order since there were existing transfer certificates of title covering the subject parcels of land and there was reason to question the rights of those requesting for the issuance of the TCTs. There was sufficient basis for public respondents to refuse to comply with the RTC Order, given the finding that OCT No. 994 dated April 19, 1917, on which petitioner and her coplaintiffs in the civil case clearly anchored their rights, did not exist. The same was reiterated in the 2007 and 2009 Manotok case. -0SPOUSES FERNANDO TORRES and IRMA TORRES, Petitioners, vs. AMPARO MEDINA and the EX-OFFICIO SHERIFF of the RTC of Quezon City, Respondents. G.R. No. 166730

March 10, 2010

PERALTA, J.: Facts On July 28, 1994, Amparo Medina applied for the extrajudicial foreclosure of mortgage of the property of spouses Fernando and Irma Torres which was covered by TCT RT-61056 (354973) and which is subject of a Deed of Mortgage dated December 20, 1993. On June 30, 1997, the Sheriff sold at public auction the subject property to Medina being the highest bidder thereof. A Certificate of Sale was thereafter issued. On September 21, 1999, the Spouses Torres filed a Complaint for

the declaration of nullity of the extrajudicial foreclosure of mortgage conducted by the Ex-Officio Sheriff. Issue WON res judicata lies in the complaint. Ruling Res judicata bars the filing of Civil Case No. Q-99-38781. As borne from the records of the case, the Spouses Torres first instituted Civil Case No. Q-94-18962, which, among others, prayed for the nullity of the real estate mortgage. The validity of the real estate mortgage can no longer be attacked, more so because the decision in Civil Case No. Q-94-18962 has become final and Entry of Judgment has already been entered in the books. As succinctly put in FELS Energy, Inc. v. Province of Batangas, res judicata, as a ground for dismissal, is based on two grounds, namely: 1.public policy and necessity, which makes it to the interest of the State that there should be an end to litigation --- republicae ut sit litium; and (2) the hardship on the individual of being vexed twice for the same cause --- nemo debet bis vexari et eadem causa. A conflicting doctrine would subject the public peace and quiet to the will and dereliction of individuals and prefer the regalement of the litigious disposition on the part of suitors to the preservation of the public tranquility and happiness. Moreso, the Spouses Torres only filed their complaint in Civil Case No. Q-9938781 after more than two years had already lapsed from the time the ex-officio sheriff sold the property in question at public auction. The foreclosure proceeding was an action in rem, and therefore, the Spouses Torres cannot feign knowledge thereof. More importantly, Spouses Torres were not completely left without any remedy as they still had the right of redemption, which expired one year from and after the date of the registration of the Certificate of Sale. In the absence of evidence to the contrary, this Court must assume that no attempt to redeem the property was undertaken by the Spouses Torres and that they simply allowed their right and remedy to lapse by their inaction. -0G.R. No. 183612 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES, Petitioner, vs. GOLDEN HORIZON REALTY CORPORATION, Respondent. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 184260

NATIONAL DEVELOPMENT COMPANY, Petitioner, vs. GOLDEN HORIZON REALTY CORPORATION, Respondent. March 15, 2010 VILLARAMA, JR., J.: The National Development Corporation (NDC) entered into a Contract of Lease with Golden Horizon Realty Corporation (GHRC). GHRC as lessee was granted the "option to purchase the area leased, the price to be negotiated and determined at the time the option to purchase is exercised." However, the GHRC’s right of first refusal under the lease contract was violated by the sale of the property to PUP without NDC having first offered to sell the same to GHRC despite the latter’s request for the renewal of the lease and/or to purchase the leased premises prior to the expiration of the second lease contract. Issue WON the reconveyance of the leased portion of petitioner NDC’s property is proper. Ruling Not even the avowed public welfare or the constitutional priority accorded to education, invoked by petitioner PUP in the Firestone case, would serve as license to destroy the sanctity of binding obligations. While education may be prioritized for legislative and budgetary purposes, it is doubtful if such importance can be used to confiscate private property such as the right of first refusal granted to a lessee of petitioner NDC. Clearly, no reversible error was committed in sustaining respondent’s contractual right of first refusal and ordering the reconveyance of the leased portion of petitioner NDC’s property in its favor. When a lease contract contains a right of first refusal, the lessor has the legal duty to the lessee not to sell the leased property to anyone at any price until after the lessor has made an offer to sell the property to the lessee and the lessee has failed to accept it. Only after the lessee has failed to exercise his right of first priority could the lessor sell the property to other buyers under the same terms and conditions offered to the lessee, or under terms and conditions more favorable to the lessor. -0TITAN CONSTRUCTION CORPORATION, Petitioner, vs. MANUEL A. DAVID, SR. and MARTHA S. DAVID, Respondents. G.R. No. 169548

March 15, 2010

DEL CASTILLO, J.: Facts The spouses Manuel A. David, Sr. and Martha S. David acquired a 602 square meter lot which was registered in the name of "MARTHA S. DAVID, of legal age, Filipino, married to Manuel A. David" and covered by TCT No. 156043. In 1976, the spouses separated de facto. Martha, however, sold the property to Titan Construction Corporation where a TCT was issued in favor of Titan. Thus Manuel filed a Complaint for Annulment of Contract and Recovenyance against Titan alleging that the sale executed by Martha in favor of Titan was without his knowledge and consent, and therefore void. He prayed that the property be reconveyed to the spouses, and that a new title be issued in their names. Issue WON there is sufficient ground to reconvey the property to spouses David. Ruling In the absence of Manuel’s consent, the Deed of Sale is void. Since the property was undoubtedly part of the conjugal partnership, the sale to Titan required the consent of both spouses. Article 124 of the Family Code requires that any disposition or encumbrance of conjugal property must have the written consent of the other spouse; otherwise, such disposition is void. In consonance with the Court’s ruling in Spouses Castro v. Miat, Manuel was not required to prove that the property was acquired with funds of the partnership. Rather, the presumption applies even when the manner in which the property was acquired does not appear. Here, the Titan failed to overturn the presumption that the property, purchased during the spouses’ marriage, was part of the conjugal partnership. -0LYDIA L. ROA, Petitioner, vs. HEIRS OF SANTIAGO EBORA: JOSEFA EBORA PACARDO, PACITA EBORA PACARDO, BARTOLOME EBORA, RAYMUNDA EBORA, BERNARDINO DEJULO EBORA, MERCEDES EBORA PABUSLAN, ALEJANDRO EBORA, SABINA EBORA GALASINO and POLICARPIO EBORA, WILSON GAW (CHIN CHIONG), SAMUEL SONNIE LIM, ALFONSO GOKING, ELEAZAR ED. ESPINO, D'ORO LAND REALTY AND DEVELOPMENT CORPORATION, NATIONAL HOUSING AUTHORITY, CONSTANCIO S. MANZANO, PRESCO C. KWONG and ORO CAM ENTERPRISES, INC., Respondents. G.R. No. 161137 CORONA, J.:

March 15, 2010

Facts

During the pendency of the case against Chacon Enterprises, the heirs of Ebora sold the entire lot covered by OCT No. P-47, which was mistakenly included by Chacon Enterprises in its application for original registration, to their co-heir Josefa Ebora Pacardo and her husband Rosalio. On the same day, spouses Pacardo assigned the property to Digno Roa, married to Lydia Roa. The corresponding deeds of absolute sale and assignment were inscribed on OCT No. P-47. Thereafter, TCT No. T-24488, which was annotated in OCT P-47, was issued in the name of Digno Roa. Subsequently, the heirs of Ebora, including Josefa recognized the conveyance of Lot 18026-A to Josefa and eventually to Digno Roa. On September 29, 1983, the case was resolved against Chacon Enterprises and in favor of the heirs of Ebora. By reason of this decision, TCT No. T-48097 was issued in the name of the heirs of Ebora. Without Roa’s knowledge and consent, the heirs of Ebora again adjudicated Lot 18026-A among themselves which was inscribed in TCT No. T-48097. Other forms of encumbrances were likewise inscribed in the same TCT and the lots were thereafter sold to various respondents which resulted in the issuance of the following new TCTs in the names of the respective vendees. Therefore, Roa filed a petition for annulment and cancellation of TCT No. 48097 and its derivative titles against respondents but the RTC declared respondents as innocent purchasers for value whose titles to their respective lots should be respected, and ordered the cancellation of petitioner’s title, TCT No. T24488. Issue WON the transferees of the heirs of Ebora acquired better right of ownership than that of the transferors. Ruling Respondents are innocent purchasers for value. Nonetheless, without undermining the reason behind this doctrine (of protecting innocent purchasers for value), the petitioner is entitled to the property following Sanchez v. Quinio. As in Sanchez, petitioner’s title was validly issued and had been undisturbed for 10 years before the title of the Ebora heirs was issued. Petitioner never relinquished her title to respondents or to anybody else. She therefore possessed a superior right over those of respondents, notwithstanding the fact that respondents were innocent purchasers for value. Moreover, the heirs of Ebora sold and conveyed their rights to and interests in Lot 18026-A to the spouses Pacardo who assigned the property to the husband of petitioner as early as June 3, 1977. From then on, the heirs of Ebora lost all their rights and interest over the property. Indeed, the heirs of Ebora even confirmed the sale to Josefa and the assignment and waiver of rights in favor of petitioner’s husband in an instrument dated January 31, 1983. Thus, the heirs of Ebora had nothing to adjudicate among themselves. Neither did they have anything to transfer to the vendees or successors-in-interest.

As such, the transferees of the heirs of Ebora acquired no better right than that of the transferors. The spring cannot rise higher than its source. -0HONORIO BERNARDO, Petitioner, vs. HEIRS OF EUSEBIO VILLEGAS, Respondents. G.R. No. 183357

March 15, 2010

PEREZ, J.: A complaint for accion publiciana was filed by the Heirs of Eusebio Villegas against Honorio Bernardo, Romeo Gaza and Monina Francisco. Respondents had earlier filed an ejectment case against the three which case was dismissed. The trial court held that the suit, being an accion publiciana, falls within its jurisdiction. The trial court noted that petitioner failed to present any title or tax declaration to prove ownership or possessory right. On appeal, the Court of Appeals affirmed the ruling of the trial court. In his appeal, petitioner questioned the jurisdiction of the trial court over the subject matter and argued that in their complaint, the respondents failed to state the assessed value of the property in dispute. The appellate court ruled that petitioner is estopped from raising the issue of jurisdiction because he failed to file a motion to dismiss on such ground and, instead, actively participated in the proceedings before the trial court. Issue Whether or not estoppel bars petitioner from raising the issue of lack of jurisdiction. Ruling Under the law as modified, jurisdiction is determined by the assessed value of the property. A reading of the complaint shows that respondents failed to state the assessed value of the disputed land. Although appellant indeed raised the issue of jurisdiction in his answer, he had not filed a motion to dismiss on this ground nor reiterated the matter thereafter but actively participated in the proceedings. Indeed, appellant is now estopped to question the trial court’s jurisdiction over the subject matter and nature of the case having actively pursued throughout the trial, by filing various pleadings and presenting all relevant documentary and testimonial evidence. Estoppel sets in when a party participates in all stages of a case before challenging the jurisdiction of the lower court. The MTC dismissed the ejectment case upon its ruling that the case is for accion publiciana. It did not assert jurisdiction over the case even if it could have

done so based on the assessed value of the property subject of the accion publiciana. And there was no showing, indeed, not even an allegation, that the MTC was not aware of its jurisdictional authority over an accion publiciana involving property in the amount stated in the law. Moreover, petitioner did not bring up the issue of jurisdictional amount that would have led the MTC to proceed with the trial of the case. Petitioner obviously considered the dismissal to be in his favor. When, as a result of such dismissal, respondents brought the case as accion publiciana before the RTC, petitioner never brought up the issue of jurisdictional amount. What petitioner mentioned in his Answer before the RTC was the generally phrased allegation that "the Honorable Court has no jurisdiction over the subject matter and the nature of the action in the above-entitled case." This general assertion, which lacks any basis, is not sufficient. Clearly, petitioner failed to point out the omission of the assessed value in the complaint. -0G.R. No. 169900 MARIO SIOCHI, Petitioner, vs. ALFREDO GOZON, WINIFRED GOZON, GIL TABIJE, INTER-DIMENSIONAL REALTY, INC., and ELVIRA GOZON, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 169977 INTER-DIMENSIONAL REALTY, INC., Petitioner, vs. MARIO SIOCHI, ELVIRA GOZON, ALFREDO GOZON, and WINIFRED GOZON, Respondents. March 18, 2010 CARPIO, J.: A parcel of land covered by TCT No. 5357 was registered in the name of "Alfredo Gozon, married to Elvira Gozon." On 23 December 1991, Elvira filed a petition for legal separation against her husband Alfredo. After a month, Elvira filed a notice of lis pendens, which was then annotated on TCT No. 5357. While the legal separation case was still pending, Alfredo and Mario Siochi entered into an Agreement to Buy and Sell, which was annotated on TCT 5357, involving the property. Mario then took possession of the property. After granting the decree of legal separation, Alfredo executed a Deed of Donation over the property in favor of their daughter, Winifred Gozon. The Register of Deeds of Malabon, cancelled TCT No. 5357 and issued TCT No. M-10508 in the name of Winifred, without annotating the Agreement and the notice of lis pendens on TCT No. M-10508. On 26 October 1994, Alfredo, by virtue of a Special Power of

Attorney executed in his favor by Winifred, sold the property to Inter-Dimensional Realty, Inc. Subsequently, the Register of Deeds of Malabon cancelled TCT No. M10508 and issued TCT No. M-10976 to IDRI. Mario then filed a complaint for Specific Performance and Damages, Annulment of Donation and Sale, with Preliminary Mandatory and Prohibitory Injunction and/or Temporary Restraining Order. Issue WON Mario has a better right over the subject land. Ruling This case involves the conjugal property of Alfredo and Elvira. In this case, Alfredo was the sole administrator of the property because Elvira, with whom Alfredo was separated in fact, was unable to participate in the administration of the conjugal property. However, as sole administrator of the property, Alfredo still cannot sell the property without the written consent of Elvira or the authority of the court. Without such consent or authority, the sale is void. Thus, the Agreement is entirely void for it was entered without the written consent of Elvira. With regard to IDRI, IDRI is not a buyer in good faith. IDRI had actual knowledge of facts and circumstances which should impel a reasonably cautious person to make further inquiries about the vendor’s title to the property. Besides, had IDRI been more prudent before buying the property, it would have discovered that Alfredo’s donation of the property to Winifred was without the consent of Elvira. Under Article 125 of the Family Code, a conjugal property cannot be donated by one spouse without the consent of the other spouse. Clearly, IDRI was not a buyer in good faith. Under Section 77 of Presidential Decree No. 1529, the notice of lis pendens may be cancelled (a) upon order of the court, or (b) by the Register of Deeds upon verified petition of the party who caused the registration of the lis pendens. In this case, the lis pendens was cancelled by the Register of Deeds upon the request of Alfredo. There was no court order for the cancellation of the lis pendens. Neither did Elvira, the party who caused the registration of the lis pendens, file a verified petition for its cancellation. -0SPOUSES MELCHOR and SATURNINA ALDE, Petitioners, vs. RONALD B. BERNAL, OLYMPIA B. BERNAL, JUANITO B. BERNAL, and MYRNA D. BERNAL, Respondents. G.R. No. 169336 CARPIO, J.: Facts

March 18, 2010

In 1957, Adriano Bernal, father of Ronald, Olympia, Juanito and Myrna had in his possession a property which was later surveyed and designated as Cadastral Lot No. 1123, Cad 1119-D, Case 8 in 1992. In 1994, Adriano secured a loan from Melchor and Saturnina Alde and turned over physical possession, occupation and cultivation of 3 hectares of the property to Spouses Alde. Then Adriano had later sold the property to Spouses Aldo. On 18 October 1994, OCT No. AO-7236 was issued in the names of the Bernals. OCT No. AO-7236 originated from CLOA No. 00073938 issued by the Department of Agrarian Reform pursuant to Republic Act No. 6657. Then, in April 2002, respondents demanded from petitioners P50,000 as additional consideration for the property. Respondents also informed petitioners, for the first time, of the existence of OCT No. AO-7236. Petitioners rejected respondents’ request since they already bought the entire property in 1994 and requested that respondents should turn-over to them OCT No. AO-7236. Issue WON the respondents can claim ownership over the disputed portions of the property. Ruling The respondents claim ownership of the property based on OCT No. AO-7236. However, a certificate of title is not equivalent to title. In Lee Tek Sheng v. Court of Appeals: By title, the law refers to ownership which is represented by that document [the Original Certificate of Title or the Transfer Certificate of Title]. Petitioner apparently confuses certificate with title. Placing a parcel of land under the mantle of the Torrens system does not mean that ownership thereof can no longer be disputed. Ownership is different from a certificate of title. The TCT is only the best proof of ownership of a piece of land. Besides, the certificate cannot always be considered as conclusive evidence of ownership. Mere issuance of the certificate of title in the name of any person does not foreclose the possibility that the real 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 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. Title as a concept of ownership should not be confused with the certificate of title as evidence of such ownership although both are interchangeable. In this case, respondents cannot claim ownership over the disputed portions of the property absent any showing of how they acquired title over the same. Accordingly, the property must be reconveyed in favor of petitioners. An action for reconveyance is a legal and equitable remedy granted to the rightful owner of land which has been wrongfully or erroneously registered in the name of another for the purpose of compelling the latter to transfer or reconvey the land to him. However, since petitioners did not make a direct attack on the validity of OCT No. AO-7236 and had not asked for the cancellation of the original certificate of title

as required by Section 48 of Presidential Decree No. 1529, this Court cannot cancel OCT No. AO-7236 and order the issuance of a new certificate of title in the name of petitioners. Any direct attack on the validity of a Torrens certificate of title must be instituted with the proper Regional Trial Court. This case originated in the Municipal Circuit Trial Court. Even if the Court will consider petitioners’ counter-claim as a petition for the cancellation of OCT No. AO-7236 and, thus, a direct attack on the certificate of title, the MCTC still does not have jurisdiction over the cancellation of a Torrens title.