Ltd Digest Req

________________________________________________________________________ 1. HEIRS OF PEDRO LOPEZ vs. DE CASTRO 324 SCRA 591-618, February 3, 2000 FACTS: In this case, two applications for registration of the same parcel of land were filed in different branches of the Court of First Instance. The certificates of title were issued in the name of respondent de Castro, while the other, for the heirs of Pedro Lopez was still pending. On July 25, 1956, Pedro Lopez et al. filed an application for the registration of a 69-hectare parcel of land in Tagaytay City with the CFI of Cavite. On June 24, 1957, Assistant Fiscal Legaspi, representing the Municipality of Silang Cavite, submitted an opposition on behalf of the municipality. The opposition was amended alleging that the subject lot had been its patrimonial property since 1930 or earlier. In their answer, the applicants claimed that a part of the whole tract of land they sought to register was their inheritance. The municipality filed a motion to dismiss. On February 7, 1969, the lower court issued an order denying the motion to dismiss for lack of merit on the ground that the oppositor municipality had no personality to intervene considering that Lot 1 was outside of its territorial limits. The municipality filed a motion for reconsideration of the said order. The court denied it in its July 23, 1970 order. The applicants filed a motion praying that the clerk of court be commissioned to receive evidence for them it appearing that the order of July 23, 1970 had become final and executor “by virtue of which the municipality of Silang no longer had any personality. The court granted said motion and directed clerk of court to submit a report. In his report, dated April 15, 1971, clerk of court Rolando Diaz stated that since time immemorial, the Delos Reyes’ owned and possessed parcel of land in question. On November 3, 1870, they sold it to Dimaranan. On September 15, 1892, the property was passed to Pedro Lopez de Leon, Sr. And Maxima Trinidad until their death when their children took over ownership and possession thereof. Upon their death, their respective heirs succeeded over the property and on February 25, 1971, they partitioned it.

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_____________________________________________________________________________ _ On April 19, 1971, the court rendered a decision approving the report of the clerk of court and ordering the decree of title be issued in favor of the applicants (Lopez’). In the course of examining decree of registration in favor of Commission discovered that lot respondent Honesto de Castro, et

the records for the purpose of issuing the Pedro Lopez, et al., the Land Registration 1 had been decreed in favor of private al.

Further investigation revealed that sometime in 1967, Honesto de castro et al. sought the registration of the same parcel of land in question and succeeded in declaring it in their names. On August 19, 1981, the CFI of Cavite issued an order declaring the court had lost jurisdiction, without however dismissing the case. Seven (7) years later, on June 28, 1988, the heirs of Pedro Lopez filed a complaint “for execution of judgement and cancellation of land titles of the defendants and their successors-in-interest” before the RTC of Cavite.

ISSUE: Whether or not the titles issued to the defendants be cancelled? HELD: No. In land registration proceedings, all interested parties are obliged to take care of their interest and to zealously pursue their objective of registration on account of the rule that whoever first acquires title to a piece of land shall prevail. Where more than one certificate of title is issued over the land, the person holding a prior certificate is entitled to the land, as against a person who relies on a subsequent certificate. This rule refers to the date of the certificate of title, not the date of filing. Petitioners failed to exercise the due diligence required of them as applicants for land registration. In the year 1981, the CFI of Cavite issued an order regarding the case-stating that it had lost jurisdiction regarding the case. With this, petitioners were presumed to have been notified of the land

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registration proceedings filed by private respondent. They let seven years to pass from such discovery before they acted to revive what already was a _____________________________________________________________________________ _ dormant judgment. In short, they were guilty of laches-negligence/failure to do that which is ought to be done. Sec. 32. Review of decree of registration (Presidential Decree 1529) The decree of registration shall not be reopened by reason of absence, minority or other disability, subject, however, to the right of any person...deprived of land, to file in the proper Court of CFI a petition for reopening and review not later than ONE YEAR. Upon the expiration of said period of one year, the decree of registration and the certificate of title issued shall become incontrovertible. Hence, the heirs of Pedro Lopez lost their property in favor of Honesto de Castro.

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_____________________________________________________________________________ _ 2. THE DIRECTOR OF LAND vs. COURT OF APPEALS 276 SCRA 276 FACTS: On December 8, 1986, respondent Teodoro Abistado filed a petition for original registration of title over a parcel of land. During the pendency of the petition, applicant died, he was substituted by his heirs, which was represented by their aunt Josefa Abestado. The Land Registration Court dismissed the petition for want of jurisdiction. In dismissing the petition, the trial court reasoned that applicants failed to comply with the provisions of Section 23 (1) of PD 1529 requiring the applicants to publish the notice of Initial Hearing in a newspaper of general circulation in the Philippines. It was only published in the official gazette. Consequently, the court has not acquired jurisdiction over the instant application with want of compliance with the mandatory provision requiring publication of the notice of initial hearing in a newspaper of general circulation. ISSUE: Whether or not newspaper publication is mandatory in a land registration case? HELD: Yes. Under the provision of section 23 of PD 1529, the public shall be given notice of initial hearing of the application of land registration by means of publication, mailing and posting. Upon receipt of the order of court setting time for initial hearing, the Commissioner of Land Registration shall cause a notice of initial hearing to be published once in the official gazette and once in a newspaper of general circulation in the Philippines. Publication in a newspaper of general circulation is mandatory, the reason is due process and the reality that the official gazette is not widely read and circulated as newspapers and is oftentimes delayed in its circulation, such that the notices published therein may not reach the interested party/ies on time, if at all. In sum, the all-encompassing in run nature of land registration cases, the consequences of default orders issued against the whole world and the objective and disseminating the notice in as wide a manner as possible demand a mandatory construction of the requirements for publication, mailing and posting. Page 4

Wherefore, the petition is granted and the application of private respondent for land registration is dismissed. _____________________________________________________________________________ _ 3. CACHO vs. COURT OF APPEALS 269 SCRA 159, March 3, 1997 FACTS: On 10 December 1912, the application of Doña Demetria Cacho for the registration of two parcels of land was decided. On 29 June 1978, petitioner Teofilo Cacho, son and sole heir of Demetria, field a petition for reconstitution of two original certificates of title under RA 26. On 29 June 1993, the lower court decreed the reconstitution and reissuance of Decrees Nos. 10364 and 18969, noting that the LRC Registry Book of Ordinary Registration Cases showed that Decree No. 10364 was issued o9 May 1913 and Decree No. 18969 was issued on 07 July 1915. The Court of Appeals reversed the RTC decision. ISSUE: Did the Court of Appeals commit reversible error in its decision? HELD: Yes. A land registration proceeding is binding upon and conclusive against all persons including the government and its branches. A decree of registration that has become final shall be deemed conclusive upon all matters that might be litigated or decided in the land registration proceeding. The lower court and the court of appeals correctly found that decrees of registration had in fact been issued in the case at bench. To allow the final decrees to be once again be subject to the conditions set forth in the 1914 case of Cacho vs U.S. would be tantamount to setting aside the decree which cannot be reopened after the lapse of one year from the enrty thereof. Such action would definitely run counter to the very purpose of the Torrens System. Page 5

Requiring the submission of new plan as a condition for the re-issuance of the decree would render the finality attained by the Cacho vs U.S. case nugatory, thus, violating the fundamental rule regarding res judicata.

_____________________________________________________________________________ _ In land registration proceedings, the ownership of a parcel of land is sought to be established. After the ownership has been proved and confirmed by judicial declaration, no further proceeding to enforce said ownership is necessary, except when the losing party had been in possession of land and the winning party desires to oust him therefrom. The issuance of a decree is a ministerial duty both of the judge and of the land registration commission. A final decision in land registration cases can neither be rendered inefficacious by the statute of limitation nor by laches.

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_____________________________________________________________________________ _ 4. DIRECTOR OF LANDS vs. COURT OF APPEALS 308 SCRA 317, June 17, 1999 FACTS: Lot 10704 was a parcel of land partly local and corn land situated at Cagmanaba, Oas, Albay. Originally, the land was owned by Eliseo Rivera who began possessing and occupying the same in the concept of owner openly, continuously, adversely, and exclusively since 1926. He planted corn and coconut seedlings which later bore fruit. Sometime in 1928, the spouses Ignacio Almazar and Gregoria Rivera purchased the land from him. The land now was declared in the name of Gregorio Rivera under Tax Declaration No. 18333. They continued planting corn. On 22 May 1971, private respondents/claimant herein purchased the land from Rivera. For taxation purposes, the land was declared in the name of claimant’s wife, Estrella Nota. They constructed a house as their abode and continued to plant corn and coconut as means of livelihood and for family consumption. The land was surveyed in the name of herein claimant per certification of CENRO. Likewise, all taxes have been paid up to the current year. Finding that the claimant has satisfactorily possessed and occupied the land in the concept of owner openly, continuously, adversely and exclusively since 1926, the court ordered the registration and confirmation in the name of Spouses Monico Rivero and Estrella Nota. The Director of Lands appealed to the CA alleging the claimant’s possession of the lot since 1926 is not sufficiently supported by the evidence and that no evidence that Gregoria Rivera declared the same in her name for tax purposes during her alleged occupancy.

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The CA affirmed the judgment of the lower court. ISSUE: Whether or not Spouses Monico Rivero and EStrella Nota have a registrable title to the lot in question?

_____________________________________________________________________________ _ HELD: Yes. Section 48 (b) of the Public Land Act provides: “Those who by themselves or through their predecessors-in-interests have been in open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain, under a bonafide claim of acquisition or ownership, for at least 30 years immediately preceding the application for confirmation of the title except when prevented by war or force majeure. They shall be conclusively essential to the government grant and shall be entitled to a certificate of title under the provisions of this chapter.”

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_____________________________________________________________________________ _ 5.REPUBLIC vs. DOLDOL 295 SCRA 359, September 10, 1998

FACTS: Sometime in 1959, respondent Nicanor Doldol occupied a portion of land in Opol, Misamis Oriental. On 1963, he filed an application for saltwork purposes for the said area but the Director of Forestry rejected the same. Sometime in 1965, the Provincial Board of Misamis Oriental passed a resolution reserving a certain lot as a school site. This lot unfortunately included the lot of Doldol. Sometime in 1970, the Opol High School filed a complaint for accion possessoria with the RTC, the court ruled on school’s power. On appeal, the CA reversed the decision of teh court ruling that Doldol was entitledto the portion he occupied, he having possessed the same for 32 years (1959-1991). ISSUE: Whether or not Doldol has the better right to possess the land in dispute?

HELD:

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No. The Public Land Act requires that the applicant must prove (a) that the land is alienable public land and (b) that his open, continuous, exclusive and notorious possession and occupation of the same must either be since time immemorial or for the period prescribed in the Public Land Act. When the conditions set by law are complied with the possessor of the land, by operation of law, acquires a right to grant, a government grant, without the necessity of title/certificate of tile being issued. The evidence presented shows that the land in dispute is alienable and disposable in accordance with the District Forester’s Certification. Doldol thus meets the first requirement.

_____________________________________________________________________________ _ Consequently, Doldol could not have acquired an imperfect title to the disputed land since his occupation of the same started only in 1955, much later than June 12, 1945. Not having complied with the conditions set forth by law, Doldol cannot be said to have acquired a right to the land or a right to assert a right superior to the school given that then Pres. Aquino had reserved the lot for Opol National School. “The privilege occupying public lands with a view of pre-empting confers no contractual or vested right in the land occupied and the authority of the President to withdraw such lands for sale or acquisition by the public, or to reserve them for public use, prior to divesting by the government of title thereof stands eventhough this may defeat the imperfect right of settler. Lands covered by reservation are not subject to entry, and no lawful settlement on them can be acquired” (Solicitor General) In sum, Opol National Schoolhas the better right of possession over the land in dispute.

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_____________________________________________________________________________ _ ________________________________________________________________________ 6.PALOMO vs. COURT OF APPEALS 266 SCRA 392, January 21, 1997 FACTS: On 13 June 1913, then Governor General of the Philippine Islands issued EO NO. 40, which reserved for provincial park purposes parcels of land situated in Naga,Tiwi, Albay. Subsequently, the then Court of First Instance in Albay, ordered the registration of 15 parcels of land covered by EO No. 40 in the name of Diego Palomo on 1916-1917. Palomo donated these parcels of land to his heirs, herein petitioners, Ignacio and Carmen Palomo, two years before his death in 1937. Claiming that the aforesaid OCT were lost during the Japanese occupation, Ignacio Palomo filed a petition for reconstruction. In 1953, the RD issued TCT to said lot. In 1954, President Magsaysay issued Proclamation No. 47, converting the area embraced by EO No. 40 into “Tiwi Hot Spring National Park”, under the control, management, protection and administration of Commissions of Parks and Wildlife, now a Division of the Bureau of Forest Development. The area was never released as alienable and disposable portion of public domain and, therefore, is neither susceptible of disposition under Public Land Law nor registrable under Land Registration Act.

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The Palomos, however, continued in possession of the property, paid real taxes thereon and introduced improvements by planting rice, bananas, pandan and coconuts. They also mortgaged the parcels of land to guarantee a loan from BPI. In 1974, petitioners filed a civil case for injunction with damages against employees of the Bureau of Forest Development who entered the land and cut down the bamboos thereat. In 1974, October, the RP filed a Civil case for Annulment and Cancellation of CoT involving 15 parcels of land registered in the name of petitioners. The court dismissed the complaint of the petitioner. On the other hand, the court rule din favor of the RP.

_____________________________________________________________________________ _ The petitioners appealed to the CA which affirmed the findings of the lower court. ISSUE: Whether or not petitioner certificate of titles are valid? HELD: No. Under the Spanish Crown, private ownership of land could only be acquired through royal concessions, which were documented in various forms, such as: 1. Royal Grant 2. Special Grant 3. Title by Purchase 4. Possessory Information Title obtained under the Spanish Mortgage Law or under the Royal Decree of January 26, 1889. Unfortunately, no proof was presented that petitioner’s predecessorsin-interest derived the title from an old Spanish grant. Petitioners placed much reliance on the decisions of the Court of First Instance which were not signed by the judge but were merely certified copies of notification to Diego Palomo bearing the signature of the Clerk of Court.

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As testified by the District Forester, records in the Bureau of Forestry show that the subject lands were never declared as alienable and disposable and subject to private alienation prior to 1913 up to the present. As part of the reservation for provincial park purposes, they form part of the forest zone. Under the law, forest land cannot be owned by private persons, it is not registrable and possession thereof no matter how lengthy cannot convert it into private ownership. Tax declarations are also not conclusive proof of ownership in land registration cases. Public land may not be the subject of registration.

_____________________________________________________________________________ _ 7.JAMES BRACEWELL vs. COURT OF APPEALS & REPUBLIC OF THE PHILIPPINES 323 SCRA 193, January 25, 2002 FACTS: Sometime in 1908, Maria Cailles, married to James Bracewell, Sr. acquired parcels of land involving 9,657 sq. m. located at Las Pinas, Metro Manila. In 1961, Maria Cailles sold the said parcels of land to her son, petitioner. In 1963, petitioner filed an action for confirmation of imperfect title under Sec. 48 of Commonwealth Act No. 141. The Director of Lands opposed petitioner’s application on the ground that neither he nor his predecessors-in-interest posses sufficient title to the subject land nor had they been in open, continuous, exclusive and notorious possession and occupation of the same for at least 30 years prior to the application, and that the subject land was part of public domain. The C.F.I. ruled in favor of petitioner upholding the right of M. Cailles. In 1985, the Solicitor General re-submitted his opposition. The lower court issued an order granting the application of petitioner. The Solicitor General appealed to respondent Court in 1992 which reversed and set aside the lower court’s order. It also denied petitioner’s Motion for Reconsideration. Page 13

ISSUES: 1. Whether or not petitioner has vested rights over the parcels of land? 2. Whether or not Sec. 48 of Court of Appeals No. 141 could be invoked in this particular case? HELD: No. Sec. 48 of C.A 141 was amended by PD 1073 in January 1977, which now reads (b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, since June 12, 1945, or earlier, immediately preceding the filing of the application for confirmation of title, except when prevented by wars or force majeure. Petitioner failed to show that the parcels of land subject of his application are alienable or disposable. It was conclusively shown by the government that the same were only classified as alienable on March 27, 1972. Even the petitioner and his predecessors occupied the same since 1908, he still cannot claim title thereto by virtue of possession since the subject parcels of _____________________________________________________________________________ _ land were not yet alienable land at that time nor capable of private appropriation. There can be no imperfect title to be confirmed over lands not yet classified or disposable or alienable. In the absence of such classification, the land remains public land until released therefrom and open to disposition. Petition DENIED for lack of merit.

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____________________________________________________________________________ 8.THE DIRECTOR, LANDS MANAGEMENT BUREAU vs. COURT OF APPEALS & AQUILINO CARINO 324 SCRA 757, February 7, 2002 FACTS: On May 15, 1975, private respondent A. Carino filed for the registration of some 43,614 sq. m. lot located at Cabuyao, Laguna. According to respondent, the subject land was originally owned by his mother Teresa Lauchengco who died in 1911, and later administered by him in behalf of his five sisters and brothers after the death of their father in 1934. Private respondent’s statements were confirmed by the report of the Land Investigator of the Bureau of Lands. It further stated that the land was agricultural in nature and improvements thereon were sugarcane, bamboo clumps, etc.; That the land subject for registration was outside any civil or military reservation, etc. and that the same land was free from claim and conflict; That Carino had been in open, continuous and exclusive possession of the land who acquired the same thru inheritance from his deceased mother. ISSUE: Whether or not the decision of Court of Appeals which affirmed the RTC’s decision ordering the registration of Lot No. 6 in the name of Respondent Carino was valid? HELD: No. The petition for land registration at bar is under the Land Registration Act which requires that he who alleges in his petition or application, ownership in fee simple, must present muniments of title since the Spanish times, such as Titulo Real, or royal grant, a Concession Especial or special grant, a Composicion Con Al Estado or adjustment title, or a titulo de compra, or title through purchase; informacion possessoria or adjustment title, which would become a titulo gratuito or a gratuitous title.

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_____________________________________________________________________________ _ 9.TURQUESA vs. VALERA 322 SCRA 573 FACTS: More than half a century ago, private respondent applied for the registration of two parcels of land locate d in Abra. Rosario Valera, private respondent, presented documents showing that when she was still single, she bought lot 1 from Cristeta Trangued and heirs of Juan Valera Rufino who were allegedly in possession thereof since the Spanish in the concept of owners and who declared it in their name for taxation purposes. From 1929, she continued possession of said land in concept of owner and continued to pay tax thereon in her name. The Director of Lands, together with petitioners and other persons opposed the application of private respondent. In the course of the hearing, the oppositors (except the director of lands) averred that their lands were included in lot 1 which private respondent sought to register in her name. Oppositors moved for an ocular inspection in order to determine the correct boundary limits of the lands they respectively claim, but the same was denied. On 23 April 1956, the trial court ruled that applicant has a registrable title. Oppositors appealed. On 15 March 1966, the CA set aside the appealed decision and remanded it to the lower court. In accordance with the CA directive, three (3) commissioners were appointed by the Trial Court to conduct ocular inspection. The observations and findings were the following: (1) the claims of petitioners as shown in the sketch plan are not shown in the original survey. (2) the claims of other petitioners appeared in the original survey although three of these claims bear different identifying names. (3) the “Calle para Collago” maintained by the oppositors to be the extent or boundary of the property of the applicant on the south side is existing and still is the existing boundary on the south and on the southeast side as shown in the sketch plan.

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However, the court just reiterated its former decision ordering the registration of the lot in the name of applicant Rosario Valera. ISSUE: _____________________________________________________________________________ _ Does Rosario Valera have a rightful claim over the lot in question? HELD: No. She doesn’t have a rightful claim over the land. The burden of proof in land registration cases is incumbent on the applicant who must show that he is the real and absolute owner in fee simple of the land applied for. On him also rests the burden to overcome the presumption that land sought to be registered forms part of the public domain. Even if petitioner/s (Partolan) was excluded by the order of general default and (Baltar) did not appeal from the trial court’s decision of April 23, 1956. The applicant must still prove and establish that she has registrable rights over the land, which must be grounded on incontrovertible evidence and based on positive and absolute proof. The declaration of the applicant that the land applied for has been in the possession of herpredecessor-ininterest for a certain period, does not constitute the “WELL-NIGH INCONTROVERTIBLE” and “CONCLUSIVE” evidence required in land registration. If an applicant does not have any rightful claim over real property, the Torrens System of registration can confirm or record nothing. It must be borne in mind that what defines a piece of land is not the size or area mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating its limits. The Damasens were declared to have a rightful claim over the specific portions of Lot.

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_____________________________________________________________________________ _ 10.FELIPE SEVILLE, et. al. vs. NATIONAL DEVELOPMENT COMPANY, et. al./ CALIXTRA YAP 351 SCRA 112, February 2, 2001 FACTS: On June 14, 1980, Calixtra Yap sold to LSBDA (Leyte Sub-Basin Development Authority) a lot consisting of 464,920 square meters located at Sto. Rosario, Isabel, Leyte. On June 1, 1982, LSBDA filed a Miscellaneous Sales Application with the Bureau of Lands covering said lot. Thereafter, an original Certificate of Title (OCT) was issued in the name of LSBDA. In 1989, LSBDA assigned all rights over the property to the National Development Company (NDC), and as a result, a new TCT was issued. The property was leased to Philippine Associated Smelting & Refining Corporation, Philphos & LEPANTO. In 1988, the estate of Joaquin Ortega, represented by their administrator Felipe Seville, filed a complaint for recovery of real property, rentals, & damages against the respondents. After trial, the Court declared, among others, the following: 1. The Deed of Sale by Calixtra Yap in favor of LSBDA is NULL & VOID ab initio; 2. The intestate estate of Joaquin Ortega is declared owner in fee simple of the 735,333 sq. m. & NDC is ordered to segregate same area & convey the same to the estate of J. Ortega.; 3. The Register of Deeds is ordered to issue 8 new titles; 4. xxxx 5. xxxx 6. xxxx 7. xxxx 8. xxxx A motion for reconsideration was filed with the Court of Appeals where the latter REVERSED & SET ASIDE the RTC’s judgment. Page 18

Hence, this petition. In their Memorandum, petitioners submitted the following issues for the reconsideration of the Court: 1. Whether or not the sale of Calixtra Yap of the estate of the late Joaquin Ortega in favor of LSBDA was NULL & VOID; _____________________________________________________________________________ _ 2. Whether or not the issuance of a Miscellaneous Patent & an Original Certificate of Title in favor of LSBDA was valid; 3. Whether or not petitioners are guilty of laches; 4. Whether or not petitioners are entitled to the remedy of reconveyance & the damages awarded by the Trial Court. HELD: The petition has no merit. There was no showing that the land had been classified as alienable before the title was issued to LSBDA, hence, petitioners could not have become owners thereof through prescription. Petitioners’ challenge to LSBDA cannot be granted, because it is based on a wrong premise and amounts to a collateral attack, which is not allowed by law. “Certificate not subject to collateral attack – A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law.” It has been held that a certificate of title, once registered, should not thereafter be impugned, altered, modified, enlarged or diminished, except in a direct proceeding permitted by law. Otherwise, the reliance on registered titles would be lost. LSBDA’s title was based on Miscellaneous Sales Patent issued by the Director of the Bureau of Lands. LSBDA acquired the property in a public auction conducted by the Bureau of Lands. Therefore, the same was valid. Moreover, the title became indefeasible & incontrovertible after the lapse of one year from the time of its registration and issuance. Sec. 32 of PD 1529 provides that “upon expiration of said period of 1 year, the decree of registration and the certificate of title shall become incontrovertible.”

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Petitioners also claim that the disputed property should be reconveyed to them. This cannot be allowed. The proper remedy is an action for reversion, which may be instituted only, pursuant to Sec. 101 of the Public Land Act, which states that, “All actions for the reversion to the Government of lands of the public domain or improvements thereon shall be instituted by the Solicitor General or the officer acting in his stead, in the proper courts, in the name of the Republic of the Philippines.”

________________________________________________________________________ 11.SERNA vs. COURT OF APPEALS 308 SCRA 527, June 18, 1999 FACTS: Dionisio Fontanilla was the original owner & possessor of a parcel of land with an area of 12,508 sq. m. located at Lucap, Alaminos, Pangasinan. In 1938, Fontanilla sold the land to his daughter Rosa Fontanilla who then started paying the real estate property tax thereon. On August 21, 1955, Rosa sold the land to her nephew, herein Respondent Santiago Fontanilla, thru a notarized Deed of Absolute Sale. The instrument was not registered. Respondent spouses Fontanilla constructed their house on the lot in question. On December 16, 1957, Rosa’s heirs, Estanislao Pajaro and his two children, Fructoso & Paciencia, executed another Deed of Absolute Sale over the same land in favor of Respondent Fontanilla. In 1978, respondent spouses Fontanilla went to the United States (U.S.) and stayed there until 1981. While in the U.S., Petitioners Enriqueto & Amparo Serna (Ampara is a grandchild of Dionisio Fontanilla), applied for the land registration of the same land in Pangasinan. In 1979, the registration was approved and the Register of Deeds issued Original Certificate of Title No. 139 to petitioners. Such title was transcribed in the registration book of the Register of Deeds of Pangasinan. On May 7, 1981, Respondent spouses Fontanilla filed with the Court of First Instance (CFI) an action for reconveyance.

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After trial, the CFI ruled in favor of Respondent spouses Santiago Fontanilla & Rafaela Rasing declaring them absolute and legal owners of the land in question; ordering the defendants to transfer & recover OCT No. 139 to spouses Santiago Fontanilla & Rafaela Rasing. Both parties appealed to the Court of Appeals (CA). On August 22, 1995, the CA AFFFIRMED the decision of the RTC. Petitioners filed a Motion for Reconsideration, but said motion was denied on February 26, 1996. ISSUES: _____________________________________________________________________________ _ 1. Whether or not the appealed decision was supported by evidence? 2. Whether or not the decision was in accordance with law & jurisprudence? HELD: 1. YES. The appealed decision was supported by evidence. Respondent spouses Fontanilla & R. Rasing proved that they were enjoying open, continuous and adverse possession of the property for more than 60 years from 1921. xxxx Though mere tax declaration does not prove ownership of the property of the declarant, tax declarations & receipts can be strong evidence of ownership of land when accompanied by possession for a period sufficient for prescription. 2. YES. The decision was in accordance with law and jurisprudence. At the time material hereto, registration of untitled land was pursuant to Act No. 496, as amended. Later, PD 1529, the Property Registration Decree, amended & codified laws relative to registration of property. “Adjudication of land in a registration (or cadastral) case does not become final & incontrovertible until the expiration of one year after the entry of the final decree. After the lapse of said period, the decree becomes incontrovertible & no longer subject to reopening or review.” “An action based on implied or constructive trust prescribes in 10 years. This means that petitioners should have enforced the trust within 10 Page 21

years from the time of its creation or upon the alleged fraudulent registration of the property. Discovery of the fraud must be deemed to have taken place from the issuance of the certificate of title “because registration of real property is considered a constructive notice to all persons and it shall be counted from the time of such registering, filing or entering.” Respondent spouses Fontanillas’ action for reconveyance was timely as it was filed within 10 years from the issuance of the Torrens Title over the property.

________________________________________________________________________ 12. REPUBLIC OF THE PHILIPPINES vs. COURT OF APPEALS & ROMEO DIVINAFLOR 349 SCRA 451 FACTS: Lot 107391, with an area of 10,775 square meters, is a parcel of riceland located at Maramba, Oas, Albay. Originally, the land was owned by Marcial Listana who was in possession & occupation of the same in the concept of an owner, openly, continuously & exclusively in 1939. On May 21, 1973, Romeo Divinaflor acquired ownership of the land by means of an Absolute Deed of Sale. He had it declared in his name thru a tax declaration. Finding that the claimant, together with his predecessor-in-interest, has “satisfactorily possessed & occupied this land in the concept of an owner, openly, continuously, adversely, notoriously, & exclusively since 1939, very much earlier to June 12, 1945,” the Court ordered the registration & confirmation of lot 10739 in the name of Spouses Romeo Divinaflor & Nenita Radan. The Director of Lands appealed to the Court of Appeals (CA) alleging that the finding of the Trial Court was not sufficiently supported by evidence. The Director contended that the earliest tax declaration presented by claimant took effect only in 1980 & the certificate of real estate tax payment was dated 1990.

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The CA affirmed the judgment appealed from, ruling that, “To our mind, it is not necessary, in cases of this nature, to present tax declarations & tax receipts of the land in question. All that the law mandates is proof of “open, continuous, peaceful & adverse possession” which appellee has convincingly established xxxxx.” Thereafter, a Motion for Reconsideration of the above-mentioned decision was likewise denied. ISSUE: Whether or not Respondent Divinaflor has acquired registrable title over the subject property? HELD: YES. Respondent Divinaflor acquired a registrable title over the subject property. PD 1073, Sec. 48, provides that, “Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive, notorious _____________________________________________________________________________ _ possession & occupation of agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, since June 12, 1945, or earlier, immediately preceing the filing of the application for confirmation of title, except when prevented by wars or force majeure. Those shall be conclusively presumed to have performed all the conditions essential to a Government grant & shall be entitled to a Certificate of Title under the provisions of this Chapter.”

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_____________________________________________________________________________ _ 13. DEVELOPMENT BANK OF THE PHILIPPINES (DBP) vs. COURT OF APPEALS 331 SCRA 267, April 28, 2000 FACTS: The land in dispute, 19.4 has., was owned by Ulpiano Mumar since 1917. He sold it to respondent Cajes in 1950 for which tax declarations were issued in 1950, 1961, and 1974. In 1969, unknown to Cajes, Jose Alvarez obtained registration of a parcel of land with an area of 1,512,468 sq. m. in his name, on June 16, 1969, which included the 19.4 has. Occupied by Cajes. In 1972, Alvarez sold the land to Sps. Beduya who, like Alvarez, were never in possession of the property. Sps. Beduya then obtained a loan from petitioner DBP (Development Bank of the Philippines) for P 526,000.00 and mortgaged the land. In 1978, another mortgage over the land was executed by SAAD Investment Corp. represented by G. Beduya and Sps. Beduya in favour of DBP for P 1.43 million. In 1985, mortgage on the property was foreclosed. In the foreclosure sale, DBP was the highest bidder. It appears that respondent Cajes had also applied for a loan from DBP in 1978, offering his 19.4 has. as security for the loan which was approved. However, after the release of the loan, DBP found out that the land mortgaged by Cajes was included in the land mortgaged by the Sps. Beduya. Petitioner DBP cancelled the loan & demanded payment from Cajes. Sometime in April of 1986, more than a year after the foreclosure sale, a re-appraisal of the property covered by TCT No. 10101 was conducted by petitioner’s representatives. It was then discovered that private respondent Cajes was occupying a portion of said land. Private respondent Cajes was informed that petitioner had become the owner of the land he was occupying, & he was asked to vacate the property. As private respondent refused to do so, petitioner filed a complaint for recovery of possession with damages against him, invoking that it was an innocent purchaser for value. The Regional Trial Court-Tagbilaran City rendered a decision declaring

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petitioner DBP the lawful owner of the entire land on the ground that the decree of registration was binding upon the land. _____________________________________________________________________________ _ The Court of Appeals reversed the RTC decision. Hence, this petition. ISSUES: 1. Whether or not petitioner bank is a mortgagee in good faith? 2. Whether or not petitioner bank can can be considered an innocent purchaser for value? HELD : No. At the time of the constitution of the mortgagee, the mortgageebank failed to conduct an ocular inspection. While an innocent mortgagee is not expected to conduct an exhaustive investigation on the history of the mortgagor’s title, in the case of banking institutions, a mortgagee must exercise due diligence before entering into said contract. Judicial notice is taken of the standard practice for banks, before approving a loan, to send representatives to the premises of the land offered as collateral & to investigate who are the legal owners thereof. Banks, having been impressed with public interest, are expected to exercise more care & prudence than private individuals in their dealings, even those involving registered lands. Petitioner was already aware that a person other than the registered owner was in actual possession of the land when it bought the same at the foreclosure sale. “A person who deliberately ignores a significant fact which would create a suspicion in an otherwise reasonable man is not an innocent purchaser for value.” It is a well-settled rule that a purchaser cannot close his eyes to facts which should put a reasonable man upon his guard, & then claim that he acted in goof faith under the belief that there was no defect in the title of the vendor.” Judgment AFFIRMED in toto.

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_____________________________________________________________________________ _ 14. VDA. DE VILLANUEVA vs. COURT OF APPEALS 351 SCRA 12, February 1, 2001 FACTS: On December 20, 1962, the land registration court, in a final decision, awarded the disputed lots, measuring 98,800 sq. m. to Spouses Antonio & Rosario Angeles. They sold the lots to Victorino Santiago in 1967 who converted some parcels into fishponds. In 1977, Santiago sold the lots to Anacleto Santiago, husband of respondent Lina Santiago. At the time of the last sale, no decree of registration had yet been issued for the said lots despite the final judgment in the land registration case. On February 28, 1978, Victorino Santiago filed an action for forcible entry against Carlos Villanueva & his wife, petitioner Estrelita Villanueva, which was dismissed since Victorino had already sold the property to Spouses Santiago. On December 12, 1978, the decrees of registration covering the subject lots were issued & OCTs were transcribed in the name of Antonio Angeles on December 27, 1978. On February 22, 1979, Antonio Angeles, as original owner & vendor, executed a Deed of Confirmation Sale, Waiver & Quitclaim over the lots in favour of Anacleto Santiago, the vendee, for which TCTs were subsequenty issued in the name of Anacleto Santiago. The lots were declared for taxation purposes. On February 26, 1979, the Santiagos sued the Villanuevas for forcible entry. On February 14, 1980, a criminal case was also filed against the Villanuevas for violation of the Anti-Squatting Law. In the meantime, Carlos Villanueva & Anacleto Santiago both died. Hence, the present case was brought by Anacleto’s heirs against the heirs of Carlos.

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In their complaint dated July 30, 1991, Lina Vda. De Santiago & her children maintained that as successors-in-interest of Anacleto, they were unlawfully deprived of the possession, use & enjoyment of the fishponds for the last 12 years by Carlos & now, by the latter’s widow, Estrelita Vda. De Villanueva, and their children.

_____________________________________________________________________________ _ The Santiagos asked the court the Viilanuevas to vacate the lots and restore to them possession & ownership of the lots registered in their precedessor’s name. In a decision dated December 18, 1992, the Trial Court dismissed the complaint for lack of cause of action and res judicata. The CA reversed the RTC decision. Hence, this petition. ISSUE: Whether or not respondent’s certificate of title constitutes valid and indefeasible proof of ownership. HELD : Yes. The high court ruled that respondent’s titles constituted indefeasible proof of ownership which entitles them to possession of the properties. In land cases, the certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein. A title once registered under the Torrens system cannot be defeated by adverse, open and notorious possession; neither can it be defeated by prescription. It is a notice to the whole world and as such, all persons are bound by it and no one can plead ignorance of the registration. Petition DENIED, judgment AFFIRMED with modifications.

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________________________________________________________________________ 15. CERVANTES vs. COURT OF APPEALS 354 SCRA 47 FACTS: On July 8, 1985, Guillermo Francisco, et.al, filed an amended complaint alleging that they were the heirs of the late Antonio G. Francisco who was the registered owner of a parcel of land containing an area of 3,768 located at Bugallon, Pangasinan. Said heirs discovered that Antonio Cervantes & spouses Armando Abad were illegally occupying & had declared in their names certain portions of said property. Despite demands to vacate the subject property, petitioners refused to do so. Hence, an action for recovery of land was filed by Guillermo Francisco. In his answer, Antonio Cervantes denied the allegations in the complaint & in defense, claimed legal possession over one of the parcels of land in question alleging that he and his siblings inherited the land from their late father Tranquilino Cervantes who purchased the same in 1947 from Juan Abad (deceased), who in turn earlier purchased the property from Guillermo Francisco’s predecessors-in-interest. Cervantes prayed for the dismissal of the complaint. On the other hand, spouses Armando Abad alleged that their possession was lawful and in concept of an owner for more than 70 years dating back before 1920. According to them, the land was purchased by their parent, the late Juan Abad, and Marcelino Nievera from Estefania Ignacio Vda. De F. Totanez, who purchased the same from Antonio Fernandez, who in turn purchased the property from Vicente Espino, whose possession & ownership of the property was public, exclusive, notorious, open & continuous long before the alleged registration of the subject property in the name of Antonio Francisco, under Act No. 496, the latter being known as a mere trustee or overseer.

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On October 28, 1987, the Trial Court rendered judgment in favor of Guillermo Francisco declaring that they were the owners of the parcels of land. The defendants were ordered to vacate immediately the parcel of land and pay actual damages. On August 25, 1994, the Court of Appeals affirmed the decision of the Trial Court in toto. Petitioner’s Motion for Reconsideration was denied by the Court of Appeals in a Resolution dated February 13, 1995. _____________________________________________________________________________ _ ISSUE: Whether or not Petitioners Cervantes & Abad have a right to the parcels of land they were occupying? HELD: No. Petitioners have no right over the land. It is a fundamental principle in land registration that the certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein, in this case, Antonio Francisco. A title once registered under the Torrens System cannot be defeated even by adverse, open & notorious possession, neither can it be defeated by prescription. Petitioners cannot prove their ownership of the subject parcels of land through tax declarations & corresponding tax receipts inasmuch as they are not conclusive evidence of ownership. Petition DENIED.

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________________________________________________________________________ 16. Sps. ZARAGOZA vs. COURT OF APPEALS 341 SCRA 309 FACTS: Flavio Zaragoza Cano was the registered owner of certain parcels of land situated at the Province of Iloilo. He had four children: Gloria, Zacariaz, Florentino and Alberta, all surnamed Zaragoza. He died intestate & was survived by his four children. On December 28, 1981, private respondent Alberta Zaragoza-Morgan filed a complaint against Spouses Florentino & Erlinda, herein petitioners, for delivery of her inheritance share, consisting of Lots 943 & 871, & for payment of damages. She Claimed that she was a natural-born Filipino citizen & the youngest child of Flavio. She further alleged that her father, in his lifetime, partitioned the aforecited properties among his 4 children. The shares of her brothers & sisters were given to them in advance by way of deed of sale but without consideration, while her share was not conveyed by way of deed of sale because she became an American citizen & was prohibited to acquire land in the Philippines except by hereditary succession. Petitioners Florentino & Erlinda, in their answer, admitted their affinity with private respondent & the allegations on the properties of their father. They, however, denied knowledge of an alleged distribution by way of deeds of sale to them by their father. They said that lot 871 was still registered in the name of their father, while lot 943 was sold by him to them for valuable considerations. They denied knowledge of the alleged intention of their father to convey said lots to Alberta & that there was partitioning of the estate of their father during his lifetime.

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On October 7, 1986, the Regional Trial Court of Ilo-ilo promulgated its decision, adjudicating lot 871 in then name of Flavio Zaragoza Camo to Plaintiff Alberta Zaragoza-Morgan ISSUE: Whether or not that question regarding the validity of the Certificate of Title issued in the name of petitioner is allowed in this petition. HELD:

_____________________________________________________________________________ _ No. The petition is a collateral attack. It is not allowed by Section 48 of the PD 1529, otherwise known as the Property Registration Decree which provides: Sec. 48. Certificate not subject to collateral attack-A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law. In the case of Halili, the court held that a certificate of title accumulates in one document a precise and correct statement of the exact status of the fee eld by its owner. The certificate, in the absence of fraud, is the evidence of title and shows exactly the real interest of the owners. The title, once registered, with very few exceptions, should not thereafter be impugned, altered, changed, modified, enlarged or diminished, except in direct proceeding permitted by law. Otherwise, all security in registered titles would be lost.

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_______________________________________________________________________ 17. TAN vs. PHILIPPINE BANKING CORPORATION 353 SCRA 292 FACTS: On 29 December 1925, petitioner bought from respondent Helen Aguinaldo a parcel of land at Valley Golf Subdivision Antipolo, Rizal. The lot was then registered in the name of respondent Aguinaldo. No claims, liens or encumbrances appeared on the said title. After payment of the agreed purchase price, the title was cancelled and a new one in the name of petitioner was issued. On 29 February 1996, two months after he bought the property, petitioner was served a copy of the petition for certiorari filed by respondent bank. Said petition stated that said petitioner was being sued as a nominal party as the new registered owner of the said parcel of land. It was only then that petitioner learned that the lot he bought from respondent was subject between her and respondent bank. It appeared that respondent Aguinaldo and her husband obtained loans from respondent bank. To secure payment of this obligation, they executed a real estate mortgage over three parcels of land in favor of the respondent bank-PBC. Upon maturity of these loans, respondent bank sent demand letter to respondent Aguinaldo. Despite said demands, the loans remained unpaid. Respondent bank then initiated extrajudicial foreclosure proceeding on the Page 32

real estate mortgage. In the public sale, the mortgage properties were sold to respondent bank as the highest bidder. On 15 February 1990, before the expiration of the redemption period of one year, respondent Aguinaldo filed a complaint for the nullification of the aforesaid foreclosure proceeding. On 15 April 1995, the trial court rendered its decision against the respondent. The respondent bank filed a motion for reconsideration of the said decision had become final and executor. Upon presentation of the court’s decision and certification, the register of deeds cancelled respondent bank’s title and issued a new title in the name of respondent Aguinaldo. She subsequently sold the lot to petitioner.

_____________________________________________________________________________ _ Respondent bank filed a motion for reconsideration of the decision of the trial court but the same was denied. It then brought the case to the CA by way of certiorari and thereafter moved for partial reconsideration praying for the reinstatement of the Transfer Certificates of Title. In its decision the CA reinstate said titles in the name of the respondent PBC. ISSUE: Whether or not the petitioner’s title over the said parcel of land is valid? HELD: Yes. The petitioner’s title is valid. It must be noted that petitioner’s title was irregularly issued after the lot covered by the same was sold to him by respondent Aguinaldo. Petitioner relied on the seller’s title, which was then free from any claims, liens or encumbrances appearing thereon. As such, petitioner’s title can only be challenged in a direct attack/proceeding. It is well settled that a certificate of title cannot be subject to collateral attack and can be altered, modified or cancelled only in direct proceeding in accordance with law. Having obtained a valid title over

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the subject lot, petitioner is entitled t protection against indirect attacks against his title. If a person purchases a piece of land on the assurance that the seller’s title thereto is valid, he should not run the risk of being told later that his acquisition is ineffectual after all. This would not only be unfair to him. If these were permitted, public confidence in the system would be eroded and land transactions would have to be attended by complicated and not necessarily conclusive investigations and proof of ownership. The further consequence would be the land conflicts could be even more numerous and complex than they are now possibly also more abrasive, if not even violent. The Government, recognizing the worthy purposes of the Torrens System, should be the first to accept the validity of the titles issued thereunder once the conditions laid down by the law is satisfied.

_____________________________________________________________________________ _ 18. OMANDAM vs. COURT OF APPEALS 349 SCRA 483, January 18, 1991 FACTS: On January 29, 1974, the Bureau of Lands in Pagadian City issued in favor of Camilo Lasola a Homestead Patent covering one parcel of land. Sometime in 1978, the RD issued an OCT in his name. On April 28, 1983, the same lot was bought by (respondent) Blas Trabasas from Dolores Sayson, who claimed that she was the owner of such land. Sometime in 1984, Trabasas discovered that petitioners Omandam and Itom had occupied the land. In 1987, Omandam protested Lasola’s homestead patent before the Bureau and prayed for the cancellation of the OCT. In the same year, Trabasas repurchased the same land from Lasola. In 1989, Trabasas acquired a new certificate of title. Page 34

On April 16, 1990, Spouses Trabasas filed a complaint against Omandan for recovery of possession and/or ownership of the subject land with the RTC. The RTC issued its decision (1993) declaring that neither respondents (Trabasas) nor their predecessors-in-interest were ever in possession of the land. “Trabasas has no equitable right to the possession of the land under litigation.” Trabasas appealed to the CA. The CA reversed RTC decision. It ordered (petitioners) Omandam and Itom to vacate the land and surrender it to the respondents (Trabasases) =) ISSUE: Whether or not the courts have jurisdiction to inquire into the validity of decree or registration issued by the Director of Lands? HELD: No. Courts have no jurisdiction to inquire into the validity of decree or registration issued by the Director of Lands. _____________________________________________________________________________ _ Commonwealth Act no 141 (Public Land Act) gives in its sections 3 and 4 to the Director of Lands primarily and to the Secretary of Agriculture and Natural Resources (now the Secretary of DENR) ultimately the authority to dispose and manage public lands. The courts have no jurisdiction to inquire into the validity of the decree of registration issued by the Director of Lands. Only the DENR secretary can review, on appeal, such decree. It will be recalled that the Bureau of Lands approved Lasola’s homestead application on May 21, 1968. Nineteen years after, in 1987, Omandam filed the protest with the Bureau of Lands. Thereafter, Trabasas instituted the present action in the Regional Trial Court for recovery of possession and/or ownership. The trial court held that petitioners were entitled to a declaration of equitable possession over the area in question. THE TRIAL COURT THEN ORDERED THE CANCELLATION OF RESPONDENTS’ TITLE AND THE ISSUANCE OF A NEW ONE. IN EFFECT, THE COURT’S ORDER REVERSED THE AWARD MADE BY THE DIRECTOR OF LANDS IN FAVOR OF LASOLA. THIS REVERSAL WAS IN ERROR, FOR THE PROPER ADMINISTRATIVE AGENCY, THE DENR UNDER CA 141, HAD PRIOR JURISDICTION OVER THE Page 35

PATENT ON THE SUBJECT MATTER, WHICH IS THE CONTESTED HOMESTEAD AREA.

________________________________________________________________________ 19. DIRECTOR OF LANDS vs. COURT OF APPEALS 171 SCRA 71, 1966 FACTS: The land in question was situated in Obando, Bulacan. It adjoined the Kailogan River and private respondent Valeriano had converted it into a fishpond. In their application in 1976, private respondents claimed that they were the co-owners in fee simple of the land partly through inheritance and partly by purchase and that; it was not within any forest or military reservation. The Republic of the Phil., represented by the Dir of the Bureau of Forest Development, opposed the application on the principal ground that the land applied for was WITHIN THE UNCLASSIFIED REGION of Obando, Bulacan and that such area was denominated as FOREST LANDS-did not form part of the disposable and alienable portion of the public domain. Page 36

The Trial Court ordered registration of the subject land in favor of the Valerianos. This was affirmed by the CA which said in part that “since the subject property is entirely devoted to fishpond purposes, it cannot be categorized as part of forest lands.” ISSUE: Whether or not the courts can reclassify the subject public land. HELD: No. Courts cannot reclassify... it’s beyond their competence and jurisdiction. The classification of public lands is an exclusive prerogative of the Executive Department of the Government (Bureau of Forest Development) and not of the Courts. In the absence of such classification, the land remains as unclassified land until it is released therefrom and rendered open to disposition. Since the subject property is still unclassified, whatever possession applicants (Valeriano) may have had, and, however long, cannot ripen into private ownership. The conversion of the subject property into a fishpond by Applicants does not automatically render the property as alienable and disposable. The recommendation of the District Forester for release of subject property from unclassified region is not the ultimate word on the matter.

________________________________________________________________________ 20.DIRECTOR OF LANDS vs. ABANILLA 124 SCRA 358, 1983 FACTS: Plaintiff-appellee (Director of Lands) in his complaint, alleged that defendant-appellant (Maria Abanilla) had, through fraudulent means, secured a Free Patent and an Original Certificate of Title over a public land situated in Roxas, Isabela. Said free patent application included portions of land occupied by Esteban Esquivel & Wilson Nueasa who bought the land from Dominador Cullanan who also bought the same from defendant-appellant Abanilla. Defendant-appellant Abanilla in her answer alleged that her application for a free patent over a parcel of public land & the subsequent issuance of an Page 37

Original Certificate of Title, were lawful, since the occupancy of Esquivel was merely tolerated by her and was never adverse and Wilson Nuesa’s occupancy never affected her right over the portion he claims because the sale made by her to Dominador Cullanan was void ab initio. The Trial Court entered judgment declaring the Free Patent and the corresponding Original Certificate of Title null and void, ordering the Director of Lands to cancel the said patent and issue another patent in favor of Abanilla, excluding the respective portions of land possessed by Esquivel & Nuesa, and ordering Abanilla to surrender to the Register of Deeds of Isabela the Original Certificate of Title, who was thereby ordered to cancel the same. Defendant-appellant claimed that the lower court erred in ordering the cancellation of both free Patent & Original Certificate of Title issued in her name and in not dismissing the action considering that a period of six years and six months had already elapsed from February 1953 when the patent was issued to August 11, 1959 when the present action was instituted in the trial court. ISSUE: Whether or not the patent and original certificate of title issued by virtue of the said patent can still be cancelled despite the lapse of six (6) years and six (6) months.\ HELD: Yes. The patent can still be cancelled. _____________________________________________________________________________ _ Section 91 of Commonwealth Act No. 141, as amended, expressly provides that any false statement in the application, which is an essential condition of the patent or title “shall ipso facto produce the cancellation of the concession, title, or permit granted.” The Doctrine of Indefeasibility of Torrens Title does not apply to free patent secured through fraud since said grant is null and void and of no effect whatsoever. The lapse of one (1) year period within which a decree of title may be reopened for fraud would not prevent the cancellation thereof, for to hold that a title had been secured through fraud or in violation of the law, would be the height of absurdity. Registration should not be a shielf of fraud in securing title. Page 38

The State is not bound by the period of prescription stated in Sec. 38, Act 496, any may still file action for cancellation of certificate of title even after six years from its issuance.

________________________________________________________________________ 21.PADRE vs. COURT OF APPEALS 214 SCRA 446, 1992 FACTS: Plaintiffs Agripino Padre, et. al, sought to quiet title on two (2) parcels of land situated at Taleb, Bantay, Ilocos Sure, thru two (2) civil cases they filed before the lower court where the latter made its findings of facts and conclusion, to wit: 1. Civil Case No. 2954 – The land was originally owned by Jose Padre who gave it to Fausta Padre without a Deed of Transfer. Fausta Padre declared the land for taxation purpose in her name. On Page 39

December 2, 1966, she sold a portion of the land to Avelina Paranada, married to Vicente Viernes. The late Jose Padre had been in possession of the subject land up to the time it was given to Fausta. Fausta was also in possession of the property until the years 1973-1975 when Juliana Pacleb Parel cut down trees on the land. Hence, the case was filed. 2. Civil Case No. 2964 – The land was originally owned by Calixto Paa who gave the same to Sabas Paa without a deed of transfer. Calixto declared the land for taxation purposes in his name. He paid realty taxes to evidence his possession. The complaint was filed because Juliana Pacleb Parel cut down some trees on the portion of the land in question. On the other hand, defendant Juliana Pacleb Parel, et. al. contended that the parcel of land was formerly owned by the late Silvestre Paa who sold it to Blas Pacleb without a deed of transfer. Some of the adjoining lots were the properties of Bartola Pero, the deceased grandmother of Juliana Parel, one of the defendants and a portion of it was the land of Roman Pacleb, the predecessors-in-interest of defendant Juliana Pacleb Parel. The defendants in both Civil Cases were in actual possession of the land in dispute. Being in actual possession under claim of ownership, it was presumed that defendants were the owners. After carefully considering the evidence adduced by the parties, the Court found that the plaintiffs-Padre, et.al., had not established their cause of preponderance of evidence. The Court found defendants-Parel, et.al., to have been in possession under claim of ownership, continuously, and uninterruptedly and long before that, the land was in the possession of their grandfather, grandmother & father under similar circumstances. The Court however denied the claims of defendants for damages, attorney’s fees & _____________________________________________________________________________ _ expenses of litigation. The plaintiff had the right to litigate & it was not sound public policy to punish a party by making him pay damages, attorney’s fees and expenses of litigation for having exercised their right erroneously xxx. In this appeal, the appellants raised several errors of the lower court.

ISSUES:

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1. WON the Director of Lands possesses the competence of the regular courts over possessory actions? 2. WON the Regional Trial Court has the power to ascertain who has prior possession of public lands? HELD: 1. YES. The Director of Lands possesses the competence of the regular courts over possessory actions. Jurisdiction: The authority given to the Lands Department over the disposition of public lands does not exclude the courts from their jurisdiction over possessory action, the public character of the land notwithstanding. 2. YES. The Regional Trial Court has the power to ascertain who has prior possession of public lands. The jurisdiction of courts in possessory actions involving public lands is limited to the determination of who has the actual physical possession or occupation of the land in question or the better right of possession. Petition DISMISSED.

________________________________________________________________________ 22. HEIRS OF GREGORIO TENGCO vs. HEIRS OF JOSE ALIWALAS 168 SCRA 198, 1988 FACTS: The instant case stemmed from an action to quiet title instituted by the late Victorio Vda. De Aliwalas against the Heirs of Gregorio Tengco, the Director of Lands & the Register of Deeds of Pampanga.

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Lot No. 3563 of the Arayat Cadastre was originally a part of the public domain & it was so declared on October 12, 1933. Thereafter, Dr. Jose Aliwalas applied with the Bureau of Lands for the issuance of a homestead patent covering this lot. On December 11, 1936, the Director of Lands granted the application and issued in favor of Jose Aliwalas Homestead Patent No. 38588. This patent was duly registered in the Register of Deeds of Pampanga on April 8, 1937. On the same day, OCT No. 159 was issued in the name of Jose Aliwalas. From then on, Dr. Aliwalas paid the corresponding realty taxes thereon having declared the land for taxation purposes in his name. In 1962, Jose Aliwalas died and the administration and management of the land was assumed by Jose Aliwalas Jr., son of Dr. Aliwalas. When the property was partitioned among Dr. Aliwalas’ surviving heirs, the lot was allotted in favor of the plaintiff Victoria Vda. De Aliwalas. Thereafter, an OCT was issued in her name on November 14, 1966. On the other hand, defendant Ponciano Tengco in representation of the defendants Heirs of Gregorio Tengco filed an application with the Bureau of Lands, thru its District Land Office in Pampanga. He alleged that this parcel of land had been occupied and cultivated originally & continuously thereafter by Gregorio Tengco. After being given due course, this application was approved by the Director of Lands who issued a Free Patent covering the lot. The defendant-Heirs of Gregorio Tengco also adduced evidence showing that their late grandfather Gregorio Tengco had occupied the land exclusively years before he died in 1934, his children succeeded him in its possession & enjoying the fruits from different trees planted thereon. On rebuttal, Plaintiff Aliwalas adduced evidence showing that the prewar records of the Bureau of Lands pertaining to public land applications were burned during the war as certified by the Bureau of Lands. This was the reason why no more record pertaining the Homestead Patent issued in favor of Jose Aliwalas in 1936 which gave rise to the issuance of an OCT. On the basis of the evidence, the Trial Court rendered judgment declaring the plaintiff Aliwalas as the true owner of the property, ordering the Register of Deeds of Pampanga to cancel the TCTS in the name of Cipriano Tengco, et. al.; ordering the defendants-Heirs of Gregorio Tengco to vacate the land in question xxxxxxx. Dissatisfied with the trial court’s judgment, the Heirs of Tengco interposed an appeal to the Court of Appeals which affirmed the trial court’s findings. Petitioners moved for reconsideration but same was denied. Hence, this petition.

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ISSUE: 1. WON an original certificate of title issued on the strength of a homestead patent becomes indefeasible and incontrovertible upon the expiration of one (1) year from the date of promulgation of the order. 2.WON private respondents are guilty of laches or prescription.

HELD: 1. Yes. An original certificate of title issued on the strength of a homestead patent becomes indefeasible and incontrovertible upon the expiration of one (1) year from the date of promulgation of the order. It is a well-settled rule that an original certificate of title issued on the strength of a homestead patent partakes of the nature of a certificate of title issued in a judicial proceeding, as long as the land disposed of is really part of the disposable land of the public domain, and becomes indefeasible & incontrovertible upon the expiration of one (1) year from the date of the promulgation of the order of the Director of Lands for the issuance of the patent. A homestead patent, once registered under the Land Registration Act becomes as indefeasible as a Torrens Title. 2. No. They are not guilty of laches or prescription. Title acquired through a homestead patent registered under the Land Registration Act is imprescriptible. Thus, prescription cannot operate against the registered owner. Petition DENIED.

________________________________________________________________________ 23. REPUBLIC OF THE PHILIPPINES, etc. vs. THE HEIRS OF C. CARLE, et. al. 105 Phil. 1227, 1959 FACTS: Ciriaco Carle filed a Homestead Application over a parcel of land located in Pola, Oriental Mindoro. Applicant Carle having died in 1942. The Page 43

Homestead Patent corresponding to said application was issued to his heirs, said patent was duly transmitted to and recorded by the Register of Deeds of said province and a corresponding Certificate of Title was issued in favor of the said heirs. Seven years later, passing upon the opposition of certain Meynardo Ilagan, the Director of Lands declared the said patent inoperative in so far as it covers a certain porition designated and adjudged in favor of the oppositor who is a holder of another homestead application for the reason that the inclusion of the aforementioned area in the patent was erroneous. The Director of Lands filed a petition with the Court of First Instance of Mindoro praying that the Homestead Application be declared null and void and the respondent, heirs of Ciriaco Carle, be ordered to surrender the patent and the certificate of title. Respondent moved to dismiss the petition, claiming that as more than one year from the issuance of the Certificate of Title had already elapsed, petitioners’ cause of action was already barred by prescription. The Court dismissed the petition on the ground that said action was filed beyond the period of limitation provided for by law. The Director of Lands thereupon instituted the instant appeal. ISSUE: Whether or not a Certificate of Title issued pursuant to a Homestead Patent becomes irrevocable after one year? HELD: Yes. Where a land was granted by the government to a private individual as a homestead under the provisions of Act No. 926 and the corresponding patent was registered and the certificate of title issued to the grantee, said land is considered registered within th meaning of the Land Registration Act. The _____________________________________________________________________________ _ title to the land thus granted and registered may no longer be the subject of any inquiry, decision, or judgment in a cadastral proceeding.

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A Certificate of Title issued pursuant to a Homestead Patent partakes of the nature of a certificate issued a consequence of a judicial proceeding, as long as the land disposed of is really a part of the disposable land of the public domain and becomes indefeasible and incontrovertible upon the expiration of one year from the date of issuance.

_____________________________________________________________________________ _ 24. INGARAN, et. al. vs. RAMELO, et.al. Page 45

107 Phil 498, 1960 FACTS: In 1936, Prudencio Bumanglag, plaintiff’s predecessor-in-interest, filed a homestead application for a tract of land in Echague, Isabela which was given due course by the Director of Lands. Bumanglag and his family entered the land and cultivated a “greater portion” thereof; that having worked the land for sometime, he intended to submit final proof of his right to a patent but the war broke out. After Bumanglag’s death, his heirs’ herein plaintiff, continued possession of the land applied for and Plaintiff Inocencia Ingaran filed a new homestead application for the same tract of land. In 1946, defendant Ramelo entered the land through force and deceit, Plaintiff Ingaran complained to the Local District Land Officer who wrote a letter to said Ramelo advising him to desist from his occupation of the land because Homestead Application of Bumanglag was still subsisting, but Ramelo refused to vacate. On 1947, the Director of Lands rendered a decision rejecting Bumanglag’s homestead application and gave due course to defendantRamelo’s application for the same land. The Director of Lands issued a Homestead Patent and from which an Original Certificate of Title was issued in the name of Federico Ramelo. The plaintiffs subsequently appealed to the Secretary of Agriculture and Natural Resources was of no avail because a patent had already been issued to Ramelo. Plaintiffs alleged that they had acquired a vested right over the land in litigation and that Ramelo’s title and patent were secured through fraud, deceit, misrepresentation and by mistake, collusion, with grave abuse of discretion of the land officials. ISSUES: 1. Whether or not Plaintiff acquired vested right over the land in question; 2. Whether or not a Certificate of Title issue pursuant to a Homestead Patent becomes irrevocable after one year. HELD: No. Plaintiff did not acquire vested right over the land in question. _____________________________________________________________________________ _ Page 46

An applicant may be said to have acquired a vested right over the homestead only when his application has been perfected by the presentation of the final proof and its approval by the Director of Lands. In the present case, plaintiffs merely alleged in their complaint that an “intention to make final proof was submitted to the proper authorities.” No such final proof appears to have actually been presented to show compliance with the requirements of the law as warrant the issuance of a patent. Yes, a Certificate of Title issued pursuant to a Homestead Patent becomes irrevocable after one year. A certificate of title issued pursuant to a Homestead Patent partakes of the nature of a certificate issued as a consequence of a judicial proceeding and becomes indefeasible & incontrovertible upon the expiration of one year from the date of issuance.

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25. LOPEZ vs. PADILLA G.R. No. 27559, May 18, 1972, 45 SCRA 44 FACTS: The late Juan Padilla, the predecessor-in-interest of defendants Emilio Padilla & Alberto Padilla, was the applicant of a public land under Homestead Application with the Bureau of Lands from which the heirs of said Juan Padilla were issued Original Certificate of Title which was transcribed in the Register Book of the Province of Cebu. Sometime in 1958, the plaintiffs began reclaiming the area covered by the waters across the shores of Mabaling Cebu City and as soon as the same became tenantable, they constructed their dwelliungs and consequently filed with the Bureau of Lands applications for lease on the areas reclaimed and occupied by them. Some also filed with the Bureau of Lands miscellaneous sales application. Juan Padilla and his heirs Defendant Padillas succeeded in obtaining the approval of the Director of Lands of their Homestead Application without excluding therefrom the foreshore and marshy lands as well as the areas reclaimed and occupied by the plaintiffs and covered by plaintiff’s applications. The plaintiffs alleged that defendant Padillas pretended to the Bureau of Lands-Manila that their Homestead Application entirely covered an area of land which alone they occupied and cultivated, the truth of the matter being more than half of the area applied by them for homestead was foreshore, marshy and covered by sea and a portion of which was reclaimed and occupied by plaintiffs long before the issuance of the patent & title in defendant’s favor. They also alleged that subsequent to the issuance of patent and title through fraud, deceit and misrepresentation, defendant sold the land to defendant Edgar Woolbright in violation of Sec. 118 of Commonwealth Act No. 141, as amended by Commonwealth Act No. 456. Defendant Padillas wrote the plaintiffs demanding the latter to vacate the premises reclaimed and occupied by the said plaintiffs because said defendants would bulldoze, level and fill up the same in order to construct improvements. Plaintiffs prayed for the cancellation of title and issuance of a Writ of Preliminary Injunction enjoining the defendants from entering into the lands reclaimed and occupied by the plaintiffs and from destroying, bulldozing, leveling or filling up of the aforesaid areas.

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_____________________________________________________________________________ _ ISSUES: 1. Whether or not defendant’s title is susceptible to collateral attack. 2. Whether or not Plaintiffs are the proper parties to bring the action. HELD: 1. No. The Torrens Title issued to defendants in pursuance of the homestead patent is no longer susceptible of collateral attack through the present action filed by the plaintiff who, as mere applicants of revocable lease, permits or miscellaneous applications of what is now concededly title property of private ownership, have no personality or legal interest in the first place to institute the action, nor to question the sale of homestead allegedly within five-year prohibitory period of Section 118 of the Public Land Act. 2. No. Plaintiffs are not the proper parties to bring the action. Section 101 of the Public Land Act vests on the Solicitor General or the officer acting in his stead, the authority to institute the action on behalf of the Republic for cancellation of defendants’ title and for the reversion of the homestead to the government.

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________________________________________________________________________ 26. PAMINTUAN vs. SAN AGUSTIN (Judge) 43 Phil 558, 1982 FACTS: This is a petition for certiorari, requiring the respondent judge to certify to the Supreme Court the record in land registration case number 11732 and the record of Cadastral Case No. 132, as pertains to 625. The record shows that in Land Registration Case No. 11732 & under the date April 19, 1917, the aforesaid lot number 625 was decreed in favor of FLORENTINO PAMINTUAN by the Court of First Instance of Pampanga and that Certificate of Title No. 540 was thereupon issued to him in 1918. In the meantime, Cadastral Case No. 132 was instituted. This case embraced the district in which the lot in question was situated and the lot was given its cadastral number in the proceedings were pending under Act No. 496. Pamintuan inadvertently failed to claim the lot at the trial of the cadastral case and the Court of First Instance awarded it to the respondents (Nicomedes, Maria, Mercedes, Arosa & Eusebia ESPINOSA) and ordered the cancellation of certificate of title number 540. ISSUE: Whether or not courts have jurisdiction to decree again a registration of a land already decreed in an earlier land registration case. HELD: No. In a cadastral case, the Court has no jurisdiction to decree again the registration of a land already decreed in an earlier land registration case and a second decree for the same land is null and void. The jurisdiction of the court in cadastral cases over land already registered is limited to the necessary correction of technical errors in the description of the lands. Cadastral proceedings are authorized and regulated by Act No. 2259xxxxIts subject is “settlement and adjudication of land titles.” Sec. 11 of it states “xxxx the settlement and adjudication of land title under the Cadastral Act is exactly that provided for in the Land Registration Act No. 496.” Page 50

Petition GRANTED. ________________________________________________________________________ 27. EL HOGAR FILIPINO vs. OLVIGA 60 Phil 17, 1934 FACTS: The Plaintiff is a mutual building and loan association who brought this action to recover from the defendants the title to and possession of a land described in TCT Nos. 5261 & 5617, both of which were issued by the Register of Deeds for the Province of Tayabas, where the land was located. The case was submitted by the parties based on a stipulation of facts; the parties agreed on the following facts: -

That the land in question formerly had OCT 477 (by virtue of a homestead patent) and registered in the registry of deeds of Tayabas in 1921 in favor of TIMOTEO OLVIGA & RAFAEL IGLESIA.

-

The certificate of title 447 was cancelled by Transfer Certificate of Title No. 2505 issued in 1928 in favor of GENARO TABIEN.

-

That in 1928, the land was mortgaged by Tabien to EL HOGAR, said mortgage was registered in the registry of deeds of Tayabas and was noted in the TCT No. 2505.

-

That pursuant to the mortgage contract the land in question was extra-judicially sold at public auction & adjudicated to plaintiff.

-

That in 1931, the court declared EL HOGAR as the absolute owner and ordered the cancellation of TCT 2505 and the issuance in the name of said El Hogar another certificate-TCT No. 5261 of the registry of deeds of Tayabas.

- That in 1929, the same land now known as Lot 3912 and covered by OCT 30174 was sold by TIMOTEO OLVIGA to defendant Spouses Bonifacio and Irenia Olviga.

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-

That in 1931, a new transfer certificate of title no. 5617 was issued in favor of the defendants.

The court held that the titles (TCT 2205) obtained by Tabien and the plaintiff should not prevail over those subsequently obtained by the defendants on the ground that the former were issued in a cadastral _____________________________________________________________________________ _ proceeding, and the latter in accordance with Section 22 of Act No. 496 (Land Registration Act). The plaintiff avers that the court erred in not declaring it as owner of the land in question. ISSUE: Should Tabien’s title and that of plaintiff prevail over that of the defendant spouse, on the ground that the former title was issued in a cadastral proceeding? HELD: Yes. Because the proceedings under the Land Registration Law and under the provisions of Chapter VI of the Public Land Law are the same in that both are against the whole world, both take the nature of judicial proceedings and for both the decree of registration issued is conclusive and final. (Aquino vs. Director of Lands) “Where a land was granted by the government to a private individual as homesteader under the provisions of Act No. 926 and the corresponding patent was registered and issued to the grantee, said land is considered REGISTERED within the meaning of the Land Registration Act No. 496.” (Manalo vs. Lukban & Liwanag) “Title to land thus granted and registered may no longer be subject of an inquiry xxx “ Since the title of Tabien and the plaintiff were issued in accordance with the provisions of Act No. 496, the same shall have all the characteristics of IRREVOCABLE TORRENS TITLE, and since the title of Tabien is prior to that issued for the defendant spouses Bonifacio Perez & Irinea Olviga.

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_____________________________________________________________________________ _ 28. DURAN vs. OLIVIA 113 Phil 144, 1961 FACTS: On December 3, 1952, Jose O. Duran & Teresa Diaz Vda. De Guzman filed an application for the registration in their names of 16 lots with the Court of First Instance of Camarines Sur. On April 20, 1954, the case was heard initially and on May 5, 1954, the oppositors filed their opposition to the application. On August 27, 1958, the oppositors (Bernabe Olivia, et. al.) filed a motion to dismiss the application on the ground that the court has no jurisdiction to decree registration of the lots respectively claimed by Jose Duran, et. al. as said lots were already registered in their names attaching therewith the original certificates of title. The applicants filed their objection to the motion, alleging that the reasons for the motion to dismiss did not appear in the application but were mere assertions of the parties & that the Trial Court had jurisdiction to consider the application even though the lots were already covered by certificates of title. The lower court dismissed and rendered successively the 2 orders of dismissal appealed from. ISSUE: May a certificate of title based on public land patent once registered becomes indefeasible as a Torrenst Title? HELD:

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Yes. Once registered under Act No. 496, a certificate of title becomes indefeasible as a Torrens Title. Sec. 122 of of Act 496 provides that, “xxxx After due registration and issue of the certificate and owner’s duplicate, such land shall be registered land for all purposes under this Act.”

_____________________________________________________________________________ _ 29.PAJOMAYO vs. MANIPON G.R. 33676, JUNE 1971, 39 SCRA 676 FACTS: Sometime in 1963, the Pajomayos filed with the Court of First Instance of Urdaneta Pangasinan a complaint, alleging that: 1.

They were the co-owners pro-indiviso of the parcel of land described in the complaint which was covered by OCT No. 1089 in the name of DIEGO PAJOMAYO, issued by the Register of Deeds of Pangasinan;

2.

They had acquired the land as an inheritance from their late father Diego Pajomayo;

3.

They and their predecessors-in-interest had been in an actual, peaceful & uninterrupted possession of the said property in the concept of owners for a period of more than 70 years until the early part of the year 1956, when the defendants dispossessed them of said property. The plaintiffs prayed that they be declared the lawful owners pro-indiviso (undivided) of the land in question, and that the defendants be ordered to vacate the land.

In their answer, the defendants, after denying some of the complaint, alleged that: 1. They were the exclusive owners of a parcel of land covered by OCT No. 14034 issued by the Register of Deeds of Pangasinan;

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2. The said land having been adjudicated to them in the cadastral proceedings of the Malsique Cadastre, and that apparently the plaintiffs were claiming the same parcel of land; 3. They had acquired the land in their answer by their inheritance from their deceased father Pioquinto Manipon and; 4.They and their predecessors-in-interest had been in actual, peaceful and adverse possession of said land for more than 70 years.

_____________________________________________________________________________ _ When the case was called for trial on July 6, 1964, the counsels for the parties submitted to the court a stipulation of facts xxxx “that the parties agree that the land in question is covered by Two Certificates of Title, one in the name of Diego Pajomayo under Original Certificate of Title No. 1089 issued under Free Patent, and Original Certificate of Title No. 14034 in the name of Rodrigo Manipon, issued in Cadastral Case No. 91 of Malasique Cadastre. Based on these stipulations of facts, the C.F.I of Pangasinan rendered a decision in favor of the plaintiffs. It ordered the defendants (Manipon) to vacate the land in question & deliver possession thereof to the former who were entitled thereto as heirs of Diego Pajomayo who were declared the legal and lawful owner of the said property. The Register of Deeds of Pangasinan was ordered to cancel OCT No. 14034. The defendants appealed the decision of the lower court and assigned the following error: The lower court erred in declaring OCT No. 14034 of herein appellants null and void. ISSUE: Which of the two original certificates of title should prevail? The OCT 1089 held by plaintiffs-appellees or OCT 14034 held by defendantsappellants? HELD: The appeal has no merit and the OCT No. 1089 of the plaintiffs should be upheld. Page 55

The undisputed facts are that the plaintiffs based their claim of title to the land in question on OCT No. 1089 issued to their father, Diego Pajomayo in 1931 by virtue of a free patent that was granted to him. The law requires that a homestead patent must be registered in the office of the register of deeds of the province where the land lies. Sec. 122 of the Land Registration Act provides that it shall be the duty of the official using the instrument of alienation, grant, or conveyance in behalf of the government to cause such instrument before its delivery to grantee, to be filed with the Register of Deeds for the province where the land liesxxxx Thus, it has been ruled by this court that once a homestead patent granted in accordance with the Public Land Act is registered pursuant to Sec. 122 of Act 496 (Land Registration Act), the certificate of title issued in virtue of said patent has the force and effect of a Torrens Title under the Land Registration Act. _____________________________________________________________________________ _ It is a settled rule in this jurisdiction that where two certificates of title are issued to different persons covering the same land in whole or in part, the earlier date must prevail as between the original parties. It appearing that OCT No. 14034 was issued in 1957, while OCT 1089 was issued in 1931, under the law and the authorities, the latter certificate of title-that of the plaintiffs’ should prevail, and the former should be cancelled. Necessarily, when one of the two titles is held to be superior over the other, one should be declared null and void and should be ordered cancelled.

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________________________________________________________________________ 30. ERNESTO DAVIT, et. al. vs. CRISTITO MALAY, et. al. 318 SCRA 711, November 19, 1999 FACTS: The spouses Andres Adona & Leoncia Abad, husband and wife for a good number of years, were blessed with five children, among them was Carmen Adona. Carmen married Filomeno Malay; three children were begotten by the marriage, namely Cristitito, Nora and Dionisio (among the herein private respondents). Following the death of Leoncia Abad in 1923, Andres Adona cohabited with Maria Espiritu, a widow, without the benefit of marriage. Andres & Maria sired two children-Esperanze, represented herein by her heirs, all surnamed David, and Vicente Adona. Maria Espiritu likewise had a child by her previous marriage, Fulgencio Lemque, now herein represented also by his own heirs. During his lifetime, Andres Adona applied for a homestead patent over a parcel of agricultural land located at Dirita, Iba, Zambales, containing an area of 22.5776 hectares. After Andres Adona died, Maria Espiritu, predecessor-in-interest of herein petitioners, succeeded in obtaining Original Certificate of Title No. 398 over the land in her name. After Maria Espiritu had died in 1945, the children, as well as descendants, of Andres Adona by his marriage with Leoncia Abad, continued to be in peaceful and quiet possession of subject land. ISSUE:

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Whether or not the defendant-buyers were in good faith and for value. HELD: No. It is unbelievable that the defendant-buyers would not have noticed the plaintiffs who were in possession of the land when the defendant buyers inspected the same. Had they made further investigations, they would have discovered that plaintiffs were in possession of the land under a claim of ownership. The rule is settled that a buyer of a real property which is in the possession of persons other than the seller must be wary and should investigate the rights of those in possession. Otherwise, without such inquiry, the buyer can hardly be regarded as a buyer in good faith. The buyer who has failed to know or discover that the land sold to him is in the adverse possession of another buyer in bad faith. The decision of the Court of Appeals is AFFIRMED. ________________________________________________________________________ 31. BERNARDO P. ABESAMIS vs. COURT OF APPEALS 361 SCRA 711, November 19, 1999 FACTS: On August 30, 1991, petitioner Jerome Solco filed with the Regional Trial Corut, Quezon City, an action for damages totaling to P 11,621,913.00 moral and exemplary damages, attorney’s fees and costs, with preliminary attachment against respondents DAE Sugar Milling Corp., Azucar Management & Development Corp., Eduardo L. Lopingco, Teody Lopingco and Rosita Lopingco, claiming that the sugar quedans he had purchased out to be worthless. On September 12, 1991, petitioner Solco amended the complaint increasing his demand for actual damages to P 28,520,320.70. Respondents contended that the quedans were owned by the corporation’s controlling stockholder, respondent Eduardo Lopingco, and were merely borrowed by petitioner for use as a collateral for a loan he had intended to obtain from lending institutions. The parties submitted the “Compromise Agreement” to the Trial Court. On May 27, 1992, the trial court rendered a judgment approving the compromise agreement in accordance with its terms and conditions and enjoined the parties to comply therewith. All other claims and counterclaims of the parties were considered waived. ISSUE: Page 58

Whether or not respondents DASUMICO and AZUCAR were bound by the compromise agreement entered into by petitioner and respondent Eduardo R. Lopingco even without express resolution of the Board of Dirctors authorizing him to enter into such compromise. HELD: No. The Court finds the Memorandum of Agreement dated November 25, 1993, executed by petitioner Jerome Solco and respondent DAE Sugar Milling Co., Inc. (DAE) void in that Solco and Dae Sugar have nothing to ratify because the levy and sale on execution of TCT No. 115609 have been nullified by both the Court of Appeals and the Regional Trial Court. Thus, the levy and sale to be implemented or validated are now non-existent. WHEREFORE, the Court DENIES the Joint Motion (RE: Settlement Agreement of the Parties) and declares the Memorandum of Agreement, attached thereto as contrary to law, and thus, VOID. ________________________________________________________________________ 32. JESUS P. LIAO vs. COURT OF APPEALS 323 SCRA 430, January 27, 2000 FACTS: On March 5, 1986, Estrella Mapa filed with the Regional Trial Court, Quezon City, Branch 99 a petition for reconstitution of documents and issuance of certificates of title over certain parcels of land covered by OCT 614, Decree No. 6667, GLRO Rec. No. 5975. Estrella Maps claimed that on Jun 16, 1913, the Director of Lands issued certificates of sales to Vicente Salgado over the parcels of land covered by OCT 614, Decree No. 6667, GLRO Rec. No. 5975 in accordance with Act No. 1120, otherwise known as the Friar Lands Act. The sale involves four (4) parcels of land (Lot Nos. 755, 777, 778 and 783) located at Brgy. Payatas, Quezon City. Lot No. 755 has an area of 3,691 hectares, Lot No. 777 has 25.0155 hectares, Lot No. 778 has 24.5091 hectares, and Lot No. 783 has 25.0363 hectares. The four lots formed part of the Piedad Estate. ISSUE: Whether or not the Court of Appeals erred in upholding the annulment of the order of the Trial Court in LRC Case No. 3369 (86) authorizing issuance of titles on the basis of sales certificates and technical descriptions as reconstituted by the Land Registration Commission. Page 59

HELD: No. The court ruled the petitioner not owner of the land. Petitioner Liao claims that his predecessor in interest acquired the property through sale certificate Nos. 780, 781, 783, issued by the Director of Lands is 1913. It is shown, however, that the sale certificates were signed by the Director of Lands and approved by the Secretary of the Interior. These sales were void. This is because the sales were not approved by the Secretary of Agriculture and Natural Resources. In Solid State Multi-Products Corp. vs. Court of Appeals, the Court also said that approval by the Secretary of Agriculture and Commerce is indispensable for the validity of the sale of friar lands. In the absence of such approval, the sales were void. In view of the invalidity of the sales, there can be no valid titles issued on the basis of such sales. Petition DISMISSED. ________________________________________________________________________ 33. AGASEN vs. COURT OF APPEALS 325 SCRA 504, February 15, 2000 FACTS: On April 7, 1980, private respondent Petra Bilog, assisted by her husband Felipe Bilog, filed a complaint for Recovery of Possession and Ownership with the Regional Trial Court of Agoo, La Union, involving an Eight Thousand Four Hundred Seventy Four (8,474) square meter parcel of land registered in her name under Transfer Certificate of Title No. T-16109 of the Registry of Deeds of La Union. She alleged that sometime in 1964 or 1965, petitioners took possession and assumed ownership of the said property, appropriating the fruits therefrom. She alleged that despite demands on them to vacate the land, petitioners refused to do so and even filed a case for Annulment of TCT and/or Reconveyance with Damages before the same court, which case was, however, dismissed on February 12, 1980. Thus, in her complaint, private respondent prayed that she be declared the true and absolute owner of the subject land and petitioners be ordered to turn over possession thereof to her. On November 19, 1984, the Regional Trial Court of Agoo, La Union, Branch 3, rendered judgment in favor of petitioners, dismissing the complaint and declaring Transfer Certificate of Title No. 16109 in the name of private respondent null and void. On appeal, the Court of Appeals reversed the decision of the lower court and private respondent was declared the true and absolute owner of

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the subject land. Accordingly, petitioners were ordered to turn over the subject land to private respondent. With the denial of petitioners’ Motion for Reconsideration on May 20, 1994, [5] the instant Petition was filed, anchored upon the following grounds: (1) The decision (annex a) erred in declaring the deed of partition with sale (exh. 1) and the deed of absolute sale (exh. 2) not authentic and valid; (2) The decision erred in holding that defendants failed to substantiate their claim of ownership and in giving more credence to plaintiff’s testimonial evidence and tax declaration no. 21460 (exh. B) and certification of tax payments (exh. C); (3) The decision erred in finding/holding that the non-registration of the deed of partition with sale and the deed of absolute sale with the register of deeds made the purchases thereunder "dented" and did not automatically vest title or ownership over the subject property to the buyers; (4) The decision erred in holding that the daily notebook (exh. 3) containing the memorandum of installment sale by leonora calonge to defendant-appellee fortunata agasen (exh. 3-a to 3-c) over the parcel of land described in exh. 2 was not a valid or credible document of transfer; (5) The decision gravely erred in holding that tct no. 16109 (exh. A) cannot be collaterally attacked on the ground that it is barred by the rule on _____________________________________________________________________________ _ indefeasibility of a torrens title after the lapse of one year from the decree of registration. Issue: ISSUE: Whether or not the two (2) documents, relied upon by petitioners as basis for their claim of ownership, are valid. HELD: To begin with, it is not denied that the two subject documents are notarized documents and, as such, are considered public documents which enjoy the presumption of validity as to authenticity and due execution. [8] One of the documents, the Deed of Absolute Sale, was identified by Assistant Provincial Fiscal Maximo Quero, the administering officer who had notarized it. The legal presumption of validity of petitioners’ duly notarized public documents has not been overcome by preponderant evidence by private respondent, upon whom the burden of proof rests, having alleged the contrary. [9] Page 61

The subject documents were also attached by petitioners to their Answer where they were alleged as part of the counterclaim. As such, private respondent should have specifically denied under oath their genuineness and due execution. [10] After all, a counterclaim is considered a complaint, only this time, it is the original defendant who becomes the plaintiff. It stands on the same footing and is to be tested by the same rules as if it were an independent action. [11] Having failed to specifically deny under oath the genuineness and due execution of the said documents, private respondent is deemed to have admitted the same. The following circumstances all indicate the genuineness and due execution of the subject documents: (1) The subject documents were duly notarized public documents; (2) The documents enjoy the legal presumption of validity; (3) Their genuineness and due execution were not specifically denied under oath by private respondent; (4) Private respondent’s signature thereon were found genuine by the lower court upon a comparison of her signature thereon with that in her own documentary evidence; (5) The actual identification and positive testimony of petitioner; and (6) The testimony of the lawyer who had notarized one of the subject documents. Private respondent’s bare denial of the same cannot, by any measure, overcome the above-mentioned evidence and legal presumptions in petitioners’ favor. The memorandum of sale appearing in Exhibit "3" is sufficient to prove the sale between petitioner Fortunata Calonge Agasen and her late sister, the _____________________________________________________________________________ _ previous vendee of the land subject of the Deed of Absolute Sale from private respondent. After all, contracts are obligatory in whatever form they may have been entered into provided all essential requisites are present. [14] The provision of Article 1358 on the necessity of a public document is only for convenience, not for validity or enforceability. It is not a requirement for the validity of a contract of sale of a parcel of land that this be embodied in a public instrument. [15] Petitioners have adequately explained why they have not pursued their action for annulment of title against private respondent, which the Court of Appeals viewed as having "further darkened the cloud of suspicion which hovered over the questioned documents." Private respondent herself admits that petitioners were the first to assert their right, by filing an action for annulment of title and/or for reconveyance with damages against private respondent [18] which complaint was, however, dismissed without prejudice. [19] On the other hand, the complaint of private respondent was filed two months after the dismissal of their complaint, prompting them to merely interpose their cause of action as a compulsory counterclaim in the lower court.

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Finally, the Court of Appeals is likewise in error in holding that private respondent’s title was "vested with the garment of indefeasibility." The rule on indefeasibility of torrens title --- i.e., that torrens title can be attacked only for fraud, within one year after the date of the issuance of the decree of registration --- applies only to original titles and not to subsequent registration. An action for annulment of title and/or reconveyance which was previously filed by petitioners and interposed in their counterclaim is an action open to them to attack private respondent’s fraudulently acquired title. Neither may the compulsory counterclaim of petitioners challenging the title of private respondent be brushed aside as merely a collateral attack which would bar a ruling on the validity of the said title.

_____________________________________________________________________________ _ 34. REPUBLIC OF THE PHILIPPINES vs. ENRIQUE P. DE GUZMAN 326 SCRA 267, February 23, 2000 FACTS: After a public bidding held on March 18, 1950, the Board of Liquidators awarded 5249 Ts-217 a 450-square meter land situated in Dadiangas, General Santos City, to Eusebio Diones of Takurong, Bubon, Cotabato. On March 11, 1955, Eusebio Diones transferred his rights over the lot to Enrique P. De Guzman (de Guzman, for brevity) for P 700.00 as evidenced by an Agreement of Transfer of Right. On November 12, 1956, the Board of Liquidators cancelled the award previously given to Eusebio Diones. From the time he purchased the lot, de Guzman did not occupy it. In 1963, Lucena Ong Ante, another claimant of Lot 5249 Ts-217, authorized Carmen Ty to occupy the land. Ong Ante paid the corresponding real estate Page 63

taxes from 1963 until 1980. Carmen Ty remained the occupant of the land until this time. De Guzman filed with the Board of Liquidators, Miscellaneous Sales Application No. 00222-E, and submitted supporting documents. In 1973, de Guzman sold the lot to his married daughter and her husband, Carolina R. De Guzman and Rio Rivera for P 5,000.00. The covering deed of sale could not be located and Rio Rivera admitted that his father-in-law Enrique P. De Guzman was not in occupation of the lot in question. On September 4, 1973, the Register of Deeds of General Santos City issued Transfer Certificate of Title No. T-7203 to spouses Rio Rivera and Carolina R. De Guzman. On March 21, 1974, Lucena Ong-Ante’s adverse claim was annotated on the title of the lot. ISSUES: 1. Whether or not Enrique P. De Guzman validly obtained the sales patent and the original certificate of title. 3. Whether or not the validity of the patent and the original certificate of title can still be assailed after the lapse of one year from the issuance of the disputed title. 4. Whether or not the spouses Rivera were innocent purchasers for value. HELD: 1. No. The court ruled negatively. There is no question that de Guzman was not in possession of the property. Hence, de Guzman _____________________________________________________________________________ _ misrepresented facts in his application for sales patent. Even the Court of Appeals 2. sustained the factual finding of the trial court on this point. However, the Court of Appeals held that an action for cancellation of patent or title could not be maintained after the lapse of one year from the date of issuance thereof. As heretofore stated, the ruling is erroneous. 2. Yes. The court ruled that the State can assail a patent fraudulently issued by the Director of Lands. Where public land acquired by an applicant through fraud and misrepresentation, the State may institute reversion proceedings even after the lapse of one year. The

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indefeasibility of a title does not attach to titles secured by fraud and misrepresentation. 3. No. We agree with the trial court that spouses Rivera are not innocent purchasers for value. Spouses Rivera is related by consanguinity and affinity to Enrique P. De Guzman knew that de Guzman was not in possession of the land. In fact, Rio Rivera testified that his father in law was not in possession of the lot in question. Carmen Ty was in possession of the land since 1963 and paid the real estate taxes thereon. We do not agree with the Court of Appeals that the presumption of a buyer in good faith must prevail. The burden of proving the status of a purchaser in good faith and for value lies upon him who asserts that status. In discharging the burden, it is not enough to invoke the ordinary presumption of good faith. The rule is settled that a buyer of real property which is in the possession of persons other than the seller must be wary and should investigate the rights of those in possession. Otherwise, without such inquiry, the buyer can hardly be regarded as buyer in good faith. WHEREFORE, we GRANT the petition and REVERSE the decision of the Court of Appeals.

________________________________________________________________________ 35. HEIRS OF MANUEL ROXAS vs. COURT OF APPEALS 220 SCRA 309 FACTS: Private respondent Maguesun Management and Development Corporation (Maguesun Corp.) filed an Application for Registration of two parcels of unregistered land located in Brgy. Sungay, Tagaytay City (Lot Nos. 7231 & 7239, Cad-355, Tagaytay Cadastre) with an area of 3,641 and 10,674 square meters, respectively. The original registration case was docketed as Case No. TG-373 before the Regional Trial Court of Cavite, Branch 18, Page 65

presided over by Judge Julieto Tabiolo. In support of its application for registration, Maguesun Corp. presented a Deed of Absolute Sale dated June 10, 1990, executed by Zenaida Meliza as vendor and indicating the purchase price to be P 170,000. Zenaida Melliza in turn, bought the property from the original petitioner herein, Trinidad de Leon Vda. De Roxas for P 200,000.00 two and a half months earlier, as evidenced by a Deed of Sale dated March 26, 1990 and an Affidavit of Self-Adjudication dated March 24, 1990. Notices of the initial hearing were sent by the Land Registration Authority (the National Land Titles & Deeds Registration Authority or NALTDRA) to Hilario Luna, Jose Gil and Leon Luna on the basis of Maguesun Corporation’s application for registration. Since Trinidad de Leon Vda. De Roxas was not named as an adjoining owner, occupant or adverse claimant, she was not sent a notice of the proceedings. Publication was made in the Official Gazette & the Record Newsweekly. After an Order of General Default was issued, the trial court proceeded to hear the land registration case. Fraud is of two kinds: actual or constructive. Actual or positive fraud proceeds from an intentional deception practiced by means of the misrepresentation or concealment of a material fact. Constructive fraud is construed as a fraud of its detrimental effect upon public interests and public or private confidence; even though the act is not done or committed with an actual design to commit positive fraud or injury upon other persons. ISSUE: Whether or nor respondent Maguesun Corporation committed actual fraud in obtaining the decree of registration? HELD: Yes. Maguesun Corporation intentionally omitted their name, or that the Roxas family, as having a claim to or as an occupant of the subject property. Although there is no proof of respondent Maguesun Corporation’s direct _____________________________________________________________________________ _ participation in the execution and preparation of the forged instruments, there are sufficient indicia which proves that Maguesun Corporation is not the “innocent purchaser for value” who merits the protection of the law. Magueson Corp. is thus not entitled to the registration decree which the trial court granted in its decision. Palpably, petitioner has not been interrupted in her more than thirty years of open, uninterrupted, exclusive and notorious possession in the concept of an owner over the subject lots by the irregular transaction to Zenaida Melliza. She therefore retains title proper in the Page 66

concept of an owner over the subject lots by the irregular transaction to Zenaida Melliza. She therefore retains title proper and sufficient for original registration over the two parcels of land in question pursuant to Section 14 of Property Registration Decree No. 1529. Petition GRANTED.

________________________________________________________________________ 36. VICENTE G. DIVINA vs. COURT OF APPEALS 352 SCRA 527, February 22, 2001 FACTS: Lot no. 1893 located at Gubat, Sorsogon, was originally owned by Antonio Berosa, July 22, 1960. He sold it to Teotimo Berosa. The portion was particularly described as: “A parcel of land unirrigated, situated at San Page 67

Ignacio, Gubat, Sorsogon, Philippines, with an area of TWENTY THOUSAND (20,000) square meters and bounded on the north by Lot # 1464-Fausto Ayson and Lot # 1888-Gloria Fajardo: on the east, by Lot # 1446-Silverio Garcia: on the south, by Lot # 1891-Antonio Escobedo and on the west, by Lot # 1880-Federico Faronas and Lot # 1890-Eugenia Espedido. Cadastral concrete posts were the visible signs of boundary. It had no permanent improvement thereon, designated as Lot 1893 of Antonio Berosa, declared under Tax No. 13038, valued at Php 760.00 for the current year in the name of Antonio Berosa.” Gamos acquired from the heirs of Felix Arimado, a boundary owner of Lot 1893, a 20,687 sq. m. parcel of land identified as Lot 1466, also in Gubat. It adjoins Lot 1893. On March 28, 1961, Gamos had these two parcels of land under Tax Declaration No. 13237 and declared it had a total area of 4.0867 hectares. Tax Declaration No. 13237 was cancelled by Tax Declaration No. 9032 in Gamo’s name. ISSUE: Whether or not the decision of the Court of Appeals was valid. HELD: No. Section 15 of P.D. 1529 is explicit in requiring that in the application for registration of land titles, the application shall also state the full names and addresses of all occupants of the land and those of the adjoining owners if known, and if not known, it shall state the extent of the search made to find them, the court emphasized that a mere statement of the lack of knowledge of the names of the occupants and adjoining owners is not sufficient, but the search that had been made to find them is necessary. Petitioner acquired the bigger portion of Lot 1893 long after the initial survey of Barrio San Ignacio. Teotimo Berosa sold Lot 1893 to Jose P. Gamos which in turn sold it to respondent in 1970. Clearly, going by the records, petitioner’s name would not be found on the said survey plan approved by the _____________________________________________________________________________ _ Bureau of Lands in 1961, years before his purchase of the portion of Lot 1893. Petitioner’s claim was clearly meritorious. Petition GRANTED. Page 68

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________________________________________________________________________ 37. CRISANTO L. FRANCISCO vs. COURT OF APPEALS 95 SCRA 22, 1980 FACTS: On October 2, 1991, respondent Regiono G. Relova filed a petition with the trial court for the registration of two parcels of land described as Lot Nos. 1834 & 1832, Cad-688-D of the Cainta-Taytay Cadastre, situated in Brgy. San Juan, Taytay, Rizal. He alleged that he had been in open, continuous, exclusive and notorious possession of the said parcels of land since 1958 and, therefore, had acquired the same by prescription. The Republic of the Philippines, through the Office of the Solicitor General, registered its written opposition to the petition. At the initial hearing of the petition on February 28, 1992, nobody appeared to oppose the petition. After respondent Relova presented evidence to establish the jurisdictional facts, the trial court ordered that a general default be entered against the whole world except the Republic of the Philippines. The trial court designated a hearing commissioner to receive evidence ex-parte in support of the petition. During the course of the proceedings, the Land Registration Authority (LRA) submitted its report stating that discrepancies were found after plotting the plans pertaining to the land applied for. Thus, the LRA recommended that the appropriate government agencies be ordered to submit their reports to determine whether the land or any portion thereof are covered by land patents were within the forest zone. ISSUE: Weather or not there was fraud committed by the applicant in this case. HELD: No. There was no fraud committed. It should be noted that the report of the LRA that was submitted to the court states that “there are some corrections in the technical descriptions of the property but the area of the property has remained the same as applied for. That is why this court, in its order dated October 28, 1993, granted the motion of counsel for the applicant to approve the technical corrections for the reason that the correction without need for the re-publication amendment does not appear to be substantial.” It should be noted also that the order of the Land Page 70

Registration Authority recommended the corrected technical description of Lot 1832 Cad-688-D Cainta-Taytay Cadastre _____________________________________________________________________________ _ be approved and the applicant be ordered to publish in the official gazette the corrected technical description of Lot 1834 Cad-688 Cainta-Taytay Cadastre. An order issued approving the said technical description to be utilized in the issuance of the corresponding decree of registration. So it is clear that with respect to Lot 1832, which is the subject opposition in this case, the LRA merely stated that the corrected technical description of Lot 1832. Petition GRANTED

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_______________________________________________________________________ 38. ESQUIVAS vs. COURT OF APPEALS 272 SCRA 803 FACTS: A 6,270 square-meter parcel of land in the poblacion of Gubat, Sorsogon was the subject of this action for reconveyance and damages. Julia Galpo de Domalaon was the owner of a piece of land with an area of 1,260 sq. m. and the two-storey house standing thereon. In 1950, she extrajudicially constituted this property into a family home. Alicia DomalaonEsquivias, Elena G. Domalaon & Jose G. Domalaon, among other children, were named beneficiaries. A Deed of Absolute Sale was executed by Julia Galpo de Domalaon in favor of her son-in-law, Atty. Salvador Esquivias, husband of Alicia Domalaon. The subject matter of the deed was the property constituting the family home. ISSUE: Who has a better right over the subject property, the Esquiviases or the Domalaons? HELD: While the certificates of title in the names of Jose G. Domalaon and Elena G. Domalaon were indefeasible, unassailable and binding against the whole world, they do not create or vest title. They merely confirm or record title already existing and vested. They cannot use the same to protect a usurper from the true owner, nor can they be used as a shield for the commission of fraud; neither do they permit one to enrich himself at the expense of others. WHEREFORE, the decision of the respondent Court reversing that of the RTC is REVERSED and SET ASIDE.

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________________________________________________________________________ 39. VDA. DE CABRERA vs. COURT OF APPEALS 267 SCRA 339 FACTS: On January 16, 1950, a Deed of Sale was executed by Daniel Teokemian and Albertana Teokemian in favor of Andres Orais over a parcel of unregistered land situated at Abejod, Davao Oriental with an area of 7.3720 hectares. The property was owned in common by Daniel and Albertana and their sister Felicidad Teokemian, having inherited the same from their late father, Domingo Teokemian. However, the Deed of Sale was not signed by Felicidad, although her name was printed therein as one of the vendors. On January 26, 1950, the parcel of land was surveyed in the name of Virgilia Orais, daughter of vendee Andres Orais, and denominated as Lot No. 2239, Cateel Cadastre. As surveyed, the property had an area of 11.1000 hectares. Virgilia Orais was issued a free patent therefor. An Original Certificate of Title was issued in her name. ISSUE: Whether or not the respondent Court erred in holding laches in this case. HELD: No. The argument that laches does not apply because what was sold to the Cabreras was a definite portion of the community property, and, therefore, void, is likewise untenable. Art. 493 of the Civil Code provides that “Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and even he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.” Petition GRANTED.

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________________________________________________________________________ 40. IGNACIO GONZALES vs. COURT OF APPEALS 358 SCRA 598, June 18, 2001 FACTS: Spouses Ignacio Gonzales and Marina Gonzales were the registered owners of two parcels of agricultural land situated at Barrio Fortaleza, Cabanatuan City, covered by Transfer Certificate of Title No. 2742 and denominated as Lot 551-C and Lot 552-A. Lot 551-C contains an area of 46.97 hectares while Lot 552-A contains an area of 37.5735 hectares. Herein petitioners were the successors-in-interest or the children and grandchildren of said Gonzales spouses. On the other hand, private respondents were the farmers and tenants of said spouses who had been cultivating the parcels of land even before World War II either personally or through their predecessors-in-interest. The donation had been duly accepted by the donees who were already of legal age on the date of the donation and by the legal guardians of the donees who were still minors at that time, and the donor having known of said acceptance, the donation had therefore been perfected in accordance with law, and the donees had acquired a valid title to the portion donated on the date the instrument was executed. ISSUE: Whether or not the property subject of the deed of donation which was not registered when P.D. No. 27 took effect should be excluded from the Operation Land Transfer. HELD: No. The land subject of the donation is covered by Operation Land Transfer. The findings of fact made by the Court of Appeals are conclusive and binding on the Supreme Court even if contrary to these of the trial court or the administrative agency, so long as such findings are supported by the records or based on substantial evidence (Tabaco vs. Court of Appeals, 239 SCRA 485, 1994). While the foregoing doctrine is not absolute, petitioners have not sufficiently proved that the findings complained of are totally devoid of support in the records, or that they are so glaringly erroneous as to constitute serious abuse of discretion. Agrarian laws have never really been effectively implemented. Certain individuals have continued to prey on the disadvantage, and as a result, the Page 74

farmers who are intended to be protected and uplifted by the said laws find themselves back in their previous plight or even in a more distressing situation. This Court ought to be an instrument in achieving a dignified _____________________________________________________________________________ _ existence for these farmers free from pernicious restraints and practices, and there is no better time to do it than now. Petition DENIED.

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________________________________________________________________________ 41. OLIZON vs. COURT OF APPEALS 236 SCRA 145 FACTS: The factual alpha of the present dispute was sometime in 1967 when the spouses Armando and Iluminada Olizon obtained a loan from respondent Prudential Bank in the amount of P25, 000.00 and, as security therefor, they executed in favor of respondent bank a real estate mortgage over a parcel of land consisting of 1,000 square meters located at Barrio Calaanan, Kalookan City and registered in their names under Transfer Certificate of Title No. 24604 of the Registry of Deeds of Kalookan City. Unfortunately, that transaction spawned the succeeding events hereunder chronologically narrated, eventuating in this appeal wherein we are now expected to pen the judicial omega. It appears from the records that the Olizon spouses failed to pay their aforestated obligation upon its maturity, so private respondent extra judicially foreclosed the real estate mortgage. At a public auction thereafter held on March 11, 1975, the subject property was sold to respondent bank as the highest bidder, pursuant to which it was issued a certificate of sale as of the same date. On March 12, 1974, the said certificate of sale was duly annotated at the back of petitioner's Transfer Certificate of Title No. 24604. On June 5, 1978, again due to the failure of petitioner spouses to redeem the foreclosed property within the period of redemption, title to the property was consolidated in favor of respondent bank. On January 14, 1986, respondent bank filed with the Regional Trial Court of Kalookan City a petition to reconstitute Transfer Certificate of Title No. 24604, which was lost in the Office of the Registry of Deeds of Kalookan City, the said proceeding being docketed as Case No. C-2746. On June 11, 1986, the Regional Trial Court of Kalookan City ordered the reconstitution prayed for. As a consequence, Transfer of Certificate of Title No. 24604 in the name of the Olizon spouses was cancelled and, in lieu thereof, Transfer Certificate of Title No. 149858 was issued on June 5, 1987 in the name of respondent bank. On November 27, 1989, respondent bank this time filed with the Regional Trial Court of Kalookan City, a petition for the issuance of a writ of possession against petitioner spouses, docketed as LRC Case No. C-3094, and which petition was granted by the trial court on February 8, 1990.

4

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_____________________________________________________________________________ _ On March 8, 1990, a petition, by way of opposition, was filed by petitioner spouses wherein they sought the cancellation of the writ of possession, the nullification of the certificate of sale dated March 11, 1974, and/or the nullification of the foreclosure proceedings. In support thereof, they alleged lack of notice of the auction sale and lack of posting of the notice of sale as required by Section 3 of Act No. 3135, as amended. After trial, the court a quo issued an order dated July 16, 1990. Private respondent appealed the said decision to the Court of Appeals which rendered its questioned decision in CA—G.R. CV No. 29482, dated September 9, 1992. ISSUES: Whether or not the lack of personal notice to the mortgagors, herein petitioners, is a ground to set aside the foreclosure sale and the failure of the mortgagee bank to comply with the posting requirement under Section 3 of Act No. 3135, as amended, be considered a sufficient ground for annulling the sale. HELD: No. It is now a well-settled rule that personal notice to the mortgagor in extrajudicial foreclosure proceedings is not necessary. 10 Section 3 of Act No. 3135 governing extrajudicial foreclosure of real estate mortgages, as amended by Act No. 4118, requires only the posting of the notice of sale in three public places and the publication of that notice in a newspaper of general circulation. Hence, the lack of personal notices to the mortgagors, herein petitioners, is not a ground to set aside the foreclosure sale. Neither can the supposed failure of respondent bank to comply with the posting requirement as provided under the aforesaid Section 3, under the factual ambiance nor circumstances which obtained in this case be considered a sufficient ground for annulling the aforementioned sale. We are not unaware of the rulings in some cases that, under normal situations, the statutory provisions governing publication of notice of extrajudicial foreclosure sales must be strictly complied with and that failure to publish the notice of auction sale as required by the statute constitutes a jurisdictional defect which invalidates the sale. However, the unusual nature

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of the attendant facts and the peculiarity of the confluent circumstances involved in this case require that we rule otherwise.

_____________________________________________________________________________ _ The rule is that statutory provisions governing publication of notice of mortgage foreclosure sales must be strictly complied with, and that even slight deviation therefrom will invalidate the notice and render the sale at least voidable. Furthermore, notice of sale was duly published in accordance with law and furnished the Olizons. The evidence presented during the trial of the case show that the then Clerk of Court, Emma Ona, sent a printed letter dated February 18, 1974 informing the Olizons that appellant bank had filed an application to foreclosure their real estate mortgage and the public auction of the mortgaged parcel of land was sent on March 11, 1974, together with a copy of the Notice of Sale. The document is more than ten (10) years old and the absence of a registry receipt in the case folder of the foreclosure records of the Sheriff of the City of Caloocan, does not indicate that the Olizons did not receive a copy of the aforesaid notice of sale, it being presumed that the sheriff performed her duties and that foreclosure proceedings are regular. In the case at bar, petitioners are already considered estopped through laches from questioning the regularity of the sale as well as the ownership of the land in question. It is evident from the records that the petition to annul the foreclosure sale was filed by herein petitioners only after 16 long years from the date of sale and only after a transfer certificate of title over the subject property had long been issued to respondent bank. Herein petitioners failed to advance any justification for their prolonged inaction. It would be inequitable to allow petitioners, after the lapse of an almost interminable period of time, to defeat an otherwise indefeasible title by the simple and dubious expedient of invoking a purported irregularity in the foreclosure proceedings. Finally, the negligence or omission to assert a right within a reasonable time warrants not only a presumption that the party entitled to assert it either had abandoned it or declined to assert it, but also casts doubt on the validity of the claim of ownership. Such neglect to assert a right taken in conjunction with the lapse of time, more or less great, and other circumstances causing prejudice to the adverse party, operates as a bar in a court of equity. In the present case, at no time after the debt became due and demandable and the mortgage property had been foreclosed, or even Page 78

thereafter, did petitioners offer to pay their mortgage obligation to redeem their property. Petitioners' collective acts are, therefore, indicative of their acquiescence to and acknowledgment of the validity of the foreclosure proceedings and the sale, as well as a recognition of respondent bank's just and legal title over the property acquired thereby. WHEREFORE, the instant petition is DENIED for lack of merit and the assailed judgment of respondent ________________________________________________________________________ 42. SALES vs. COURT OF APPEALS 211 SCRA 858 FACTS: In this petition for review on certiorari, petitioners seek to annul and set aside the decision of the Court of Appeals affirming that of the then Court of First Instance of Tarlac, Branch III which upheld the validity of the deed of sale of a parcel of land executed by petitioner Severo Sales in favor of respondent Leonilo Gonzales Severo Sales owned an unregistered parcel of land in Bugallon, Pangasinan. Covered by Tax Declaration No. 5861, the property had an area of 5,733 square meters more or less. On July 4, 1955, Sales mortgaged said property, together with two other parcels of land, to Faustina P. Agpoon and Jose Agpoon to secure the payment of a loan in the amount of P2, 240.00 payable on or about July 4, 1956. 2 On August 19, 1981, the CFI of Cavite issued an order declaring the court had lost jurisdiction, without however dismissing the case. On October 30, 1957, Tax Declaration No. 5861 was canceled and in lieu hereof, Tax Declaration No. 13647 was issued to Sales but the area of the property was stated therein as 5,229 square meters more or less. More than a year later, or on December 24, 1958, Sales, with the consent of his wife, Margarita Ferrer, donated nine hundred (900) square meters of the same property in favor of their daughter, petitioner Esperanza Sales Bermudez. The duly notarized deed of donation was presented to the Assessor's Office on the day of its execution. Hence, Tax Declaration No. 13647 was replaced by two tax declarations: Tax Declaration No. 13875 in the name of Esperanza Sales Bermudez for the 900-square-meter lot donated to her and Page 79

Tax Declaration No. 13874 in the name of Sales covering the remaining portion or 4,339 square meters. As a consequence of a case filed by Faustina P. Agpoon against Sales in the Court of First Instance of Pangasinan, sometime in January 1959, the mortgaged property of Sales was set for foreclosure. To prevent such foreclosure, Sales requested his friend, Ernesto Gonzales, to pay his total indebtedness of P2, 700 to the Agpoon spouses.

_____________________________________________________________________________ _ Ernesto Gonzales acceded to the request and asked Sales and his wife to sign a document transferring the mortgage to him. According to the Sales spouses, they were not given a copy of said document. 8 Around a month later, Sales had the land covered by Tax Declaration No. 5861 surveyed by a private surveyor. On February 3, 1959, a document entitled "Deed of Sale" between Severo Sales and Leonilo Gonzales was registered with the Register of Deeds of Pangasinan. In October 1968, Sales received a photostat copy of the deed of sale appearing to have been signed by him and his wife on January 29, 1959 before ex-officio Notary Public Arturo Malazo in San Manuel, Tarlac. The document stated that the Sales spouses had sold the land described under Tax Declaration No. 5861 in consideration of the amount of P4, 000 to Leonilo Gonzales, son of Ernesto Gonzales. In the Intestate Estate Proceedings of Ernesto Gonzales, (SP 42692) in the then Court of First Instance of Manila, the land in question was claimed by respondent Leonilo Gonzales. Subsequently, upon submission of the Deed of Sale between Severo Sales and Leonilo Gonzales, the questioned land was excluded there from. Said parcel of land was declared by Leonilo Gonzales under Tax Declaration No. 12483. On November 7, 1968, Leonilo Gonzales filed an action for illegal detainer against Sales before the Municipal Court of Bugallon. Before the case could be tried, Sales and his daughter, Esperanza Sales Bermudez filed in the Court of First Instance of Tarlac, Branch III a complaint for annulment of the deed of sale between Sales and Gonzales on the ground of fraud. Consequently, the municipal court suspended the illegal detainer proceedings before it pending the outcome of the annulment case.

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On October 27, 1969, the Court of First Instance 14 rendered a decision finding that the allegation of fraud was not supported by convincing evidence. Their motion for reconsideration having been denied, Sales and his daughter elevated the case to the Court of Appeals contending that the lower court erred in upholding the validity of the deed of sale and in not considering the unschooled Sales as an illiterate executor thereof. ISSUE:

_____________________________________________________________________________ _ Whether or not the earlier deed of donation should "prevail" over the deed of sale or be "recognized". HELD: The deed of donation explicitly provides that the land involved "has not been registered neither under Act 496 nor under the Spanish Mortgage Law. The parties hereto have agreed to register this document under Act 3344." Such agreement had to be expressly stipulated in the deed of donation because under Act 3344, the Register of Deeds is not authorized to effect any registration unless the parties have expressly agreed to register their transaction thereunder. A perusal of the records shows, however, that the deed of donation was not registered at all. Besides, at the hearing, petitioners failed to show any evidence proving registration. Petitioners' counsel even failed to secure a certification from the Register of Deeds of Pangasinan of its due registration as directed by the trial judge. Hence, while the deed of donation is valid between the donor and the donee thereby effectively transmitting the rights to said property from Sales to his daughter, such deed, however, did not bind Leonilo Gonzales, a third party to the donation. This is because non-registration of a deed of donation under Sec. 1 of Act No. 3344 does not bind other parties ignorant of a previous transaction, notwithstanding the provision therein which petitioners invoke that "any registration made under this section shall be understood to be without prejudice to a third party with a better right" Petitioner Esperanza Sales Bermudez may not be a considered a third party being the daughter of the vendor himself and the "better right" possessed by a third party refers to other titles which a party might have acquired independently of the unregistered deed such as title by prescription. Page 81

The court take note of the fact that while the Deed of Donation was not registered, the Deed of Sale was registered as evidenced by the notation made by Cipriano Abenojar, Register of Deeds of Lingayen, Pangasinan 35 and the official receipt issued by the Registry of Deeds. Finally, the court cannot be convinced that it is useless to register deeds or instruments affecting unregistered lands because the books of registration provided under Section 194 of the Revised Administrative Code as Amended by Act 3344 continue to remain in force even to this day. In fact, under Section 3 of Presidential Decree No. 1529, instruments dealing with unregistered lands can still be registered. WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. Costs against the petitioners. ________________________________________________________________________ 43. PEOPLE vs. PACIFICADOR 354 SCRA 310, March 13, 2001 FACTS: On October 27, 1988, herein respondent, Arturo Pacificador y Fullon, and his erstwhile co-accused, Jose T. Marcelo, were charged before the Sandiganbayan with the crime of violation of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act. December 6, 1975 to January 6, 1976, in Metro Manila, Philippines, and within the jurisdiction of this Honorable Court, said accused, Arturo Pacificador, then Chairman of the Board of the National Shipyard and Steel Corporation, a government-owned corporation, and therefore, a public officer, and Jose T. Marcelo, Jr., then President of the Philippine Smelters Corporation, a private corporation, conspiring and confederating with one another and with other individuals, did then and there, wilfully, unlawfully and knowingly, and with evident bad faith promote, facilitate, effect and cause the sale, transfer and conveyance by the National Shipyard and Steel Corporation of its ownership and all its titles, rights and interests over parcels of land in Jose Panganiban, Camarines Norte where the Jose Panganiban Smelting Plant is located including all the reclaimed and foreshore areas of about 50 hectares to the Philippine Smelters Corporation by virtue of a contract, the terms and conditions of which are manifestly and grossly disadvantageous to the Government as the consideration thereof is only P85,144.50 while the fair market value thereof at that time was P862,150.00, thereby giving the Philippine Smelters Corporation unwarranted benefits, advantages and profits and causing undue injury, damage and prejudice to the government in the amount of P777,005.50. Page 82

After his arraignment, the respondent filed a Motion to Dismiss the Information in Criminal Case No. 13044 on July 15, 1998. On August 21, 1998 the petitioner filed an Opposition to the Motion to Dismiss. On November 10, 1998, the Sandiganbayan issued a Resolution denying the Motion to Dismiss the Information. The information in this case, dated October 19, 1988, was filed with the Sandiganbayan on October 27, 1988 on which date the existing jurisprudence on matters of prescription of the offense was the ruling enunciated in Francisco v. Court of Appeals (May 30, 1983, 122 SCRA 538) to the effect that the filing of _____________________________________________________________________________ _ the complaint with the fiscals office also interrupts the period of prescription of the offense. The offense charged was allegedly committed from December 16, 1975 to January 6, 1976. The second ground submitted by the accused-movant is precipitate at this stage of the proceedings, as it involves a matter of defense. On December 7, 1998, respondent Pacificador moved for the reconsideration of the Resolution of the Sandiganbayan denying his Motion to Dismiss On February 3, 1999, the Sandiganbayan reconsidered its Resolution of November 10, 1998 and dismissed the Information in Criminal Case No. 139405 against the respondent on the ground of prescription. In this case, as the offense involved is the violation of R.A. 3019, a special law, it follows that in computing the prescriptive period of the offense, it is not the provision contained in the Revised Penal Code that should govern but that of Act No. 3326. The offense imputed on accused was allegedly committed from December 6, 1975 to January 6, 1976. The offense prescribed on January 3, 1986, or ten years from January 6, 1976.

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The Urgent Motion for Reconsideration of petitioner was denied by the Sandiganbayan on July 23, 1999. ISSUES: Whether or not the government officials involved in the transaction connived and conspired with respondent and the Information in Criminal Case No. 139405 against the respondent on the ground of prescription is dismissible. HELD: No. It has been settled that Section 2 of Act No. 3326 governs the computation of prescription of offenses defined and penalized by special laws. In the case of People v. Sandiganbayan, [11] this Court ruled that Section 2 of Act No. 3326 was correctly applied by the anti-graft court in determining the reckoning period for prescription in a case involving the crime of violation of Republic Act No. 3019, as amended. In the fairly recent case of Presidential Ad _____________________________________________________________________________ _ Hoc Fact-Finding Committee on Behest Loans v. Desierto categorically ruled that:

,

they

Since the law alleged to have been violated, i.e., paragraphs (e) and (g) of Section 3, R.A. No. 3019, as amended, is a special law, the applicable rule in the computation of the prescriptive period is Section 2 of Act No. 3326, as amended, which provides: Sec. 2. Prescription should begin to run from the day of the commission of the violation of the law, and if the same be not known at the time, from the discovery thereof and institution of judicial proceedings for its investigation and punishment The prescription shall be interrupted when the proceedings are instituted against the guilty person and shall begin to run again if the proceedings are dismissed for reasons not constituting double jeopardy. This simply means that if the commission of the crime is known, the prescriptive period shall commence to run on the day it was committed. It bears emphasis, as held in a number of cases that in the interpretation of the law on prescription of crimes, that which is more favorable to the accused is to be adopted. [16] The said legal principle takes Page 84

into account the nature of the law on prescription of crimes which is an act of amnesty and liberality on the part of the state in favor of the offender In the case at bar, the petitioner contends that respondent concealed his criminal acts that effectively prevented discovery thereof. The records of this case do not specifically show how the respondent allegedly employed acts that could prevent the discovery of any illegality in the transaction other than the bare assertion of the petitioner. There is also no allegation that the government officials involved in the transactions connived or conspired with respondent Pacificador. The said government officials were not even charged in the instant Information. On the other hand, it was never disputed by the petitioner that the subject Deed of Sale was duly registered with the Registry of Deeds of the Province of Camarines Norte and that the corresponding Transfer Certificate of Title No. 13060 was subsequently issued to the vendee, Philippine Smelters Corporation. In view of the foregoing, the Court does not find it necessary to discuss the other points raised by the respondent in his Comment as additional grounds for the denial of the instant petition. WHEREFORE, the instant petition is hereby DENIED for lack of merit.

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[ [44. CHU Sr. vs. Benelda Estate Development Corporation 353 SCRA 424, March 1, 2001 FACTS: The petitioners’ spouses Manuel Chu, Sr. and Catalina Chu were the registered owners of five (5) parcels of land situated in Barrio Saguin, San Fernando, Pampanga. They executed a deed of sale on Sept. 30, 1986 with assumption of mortgage in favor of Trinidad N. Cunanan. It was made to appear in the deed of sale that the total consideration had been fully paid to enable Cunanan to have the parcels of land registered in her name so that she could mortgage the same to secure a loan and thereupon pay from the proceeds of the loan. Their agreement, however, was that the ownership of the properties shall remain with the petitioners until full payment of the balance of the total purchase price. Cunanan failed to pay the balance of the total purchase price to the petitioners. Without the knowledge of the petitioners, Cunanan sold the three (3) parcels of land to Cool Town Realty and Development Corporation, and the two (2) other parcels of land to the spouses Amado and Gloria Carlos. The spouses Carlos, in turn, sold these two (2) properties to the respondent Benelda Estate Development Corporation. Petitioners commenced civil case before the Regional Trial Court of Pampanga against Trinidad N. Cunanan, Cool Town Realty and Development Corporation and the Register of Deeds of Pampanga. The petitioners amended their complaint to include respondent Benelda Estate Development Corporation as a defendant. The respondent filed its answer with a motion to dismiss on the ground that the amended complaint states no cause of action against respondent. It alleged that respondent corporation, through its officers, acted in good faith in buying the properties inasmuch as it exerted all efforts to verify the authenticity of the titles and that no defect was found. court

After the petitioner filed an opposition to the motion to dismiss, the trial rendered a decision denying the motion to dismiss.

The respondent filed a petition for certiorari under Rule 65 of the Rules of Court before the Court of Appeals alleging that the trial court committed grave abuse of discretion in denying its motion to dismiss the amended complaint. The Court of Appeals reversed the order of the trial court and dismissed the case as

against the respondent on the ground of lack of cause of action and for failure of the petitioners to include the spouses Carlos as indispensable parties in the complaint. ISSUES: a) Whether the spouses Amado E. Carlos and Gloria A. Carlos (sellers of the subject titled parcels of land to respondent) are real and indispensable parties in the case at bar. b) Whether or not the respondent corporation is an innocent purchaser for value. HELD: A cause of action is defined as an act or omission by which a party violates a right of another. The test of the sufficiency of the facts found in a petition as constituting a cause of action is whether or not, admitting the facts alleged the court can render a valid judgment upon the same in accordance with the prayer thereof. In land title cases, the court held that a person dealing with registered land may safely rely on the correctness of the certificate of title issued and the law will in no way oblige him to go behind the certificate to determine the condition of the property. A person is considered in law as an innocent purchaser for value who is defined as one who buys the property of another, without notice that some other person has a right or interest in such property and pays a full price for the same, at the time of such purchase or before he has notice of the claims or interest of some other person in the property. In this connection, Section 53 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, provides that: The production of the owners duplicate certificate, whenever any voluntary instrument is presented for registration, shall be conclusive authority from the registered owner to the Register of Deeds to enter a new certificate or to make a memorandum of registration in accordance with such instrument, and the new certificate or memorandum shall be binding upon the registered owner and upon all persons claiming under him, in favor of every purchaser for value and in good faith. Thus, a title procured through fraud and misrepresentation can still be the source of a completely legal and valid title if the same is in the hands of an innocent purchaser for value. In a case for annulment of title, therefore, the complaint must allege that the purchaser was aware of the defect in the title so that the cause of action against him will be sufficient. Failure to do so, as in the case at bar, is fatal for the reason that the court cannot render a valid judgment against the purchaser who is presumed to be in good faith in acquiring the said property. Failure to prove,

much less impute, bad faith on said purchaser who has acquired a title in his favor would make it impossible for the court to render a valid judgment thereon due to the indefeasibility and conclusiveness of his title. What is important is that when respondent bought the subject properties, it was not aware of any defect in the covering certificates of title thereto at the time of such purchase. There is no allegation to the contrary in the amended complaint. Therefore, the title of respondent, being that of an innocent purchaser for value, remains valid. By allowing the cancellation of their certificates of title and the issuance of new ones in lieu thereof in the name of Trinidad N. Cunanan despite alleged nonpayment of the full purchase price for their subject two (2) parcels of land, the petitioners took the risk of losing their titles on the said properties inasmuch as the subject deed of sale with assumption of mortgage constitutes their consent and announcement to the whole world that Cunanan was indeed the legal owner of the properties by virtue of the said deed which is a public document. The appellate court therefore was correct in entertaining the petition for the reason that the trial court committed a grave abuse of discretion when it refused to dismiss the case against the respondent, despite the obvious insufficiency of the amended complaint against the corporation respondent. To implead the respondent in the case at bar, absent an allegation of bad faith on its part, is to undermine a well-settled rule protecting innocent purchasers for value and the indefeasibility and conclusiveness of certificates of title issued under the Torrens System. The petition is DENIED for lack of cause of action.

45. AFP Mutual Benefit Association Inc. vs. CA 327 SCRA -203, March 3, 2000 FACTS: Prior to September 7, 1976, Investco, Inc. was the owner of six (6) parcels of raw land, located in Quezon City and Marikina (Metro Manila, now a City), registered under titles in the names of its predecessors-in-interests, Angela PerezStaley and Antonio Perez, Jr. On September 7, 1976, Investco, Inc. agreed to sell the six (6) parcels of land to Solid Homes for P10, 211,075.00, payable in installments from July 22,

1977 to January 22, 1983. Among other terms, the parties agreed that Solid Homes would pay the amount of P100, 000.00 as down payment upon execution of the contract; that Solid Homes would pay P1, 942,215.00 as additional down payment on July 22, 1977, October 22, 1977, and January 22, 1978; and that Solid Homes would pay the balance of P8, 188.860.00 in ten (10) semi-annual installments for a period of five (5) years, with interest at twelve (12%) percent per annum. The first installment was due on July 22, 1978. However, after paying the amount of P2,042,215.00 corresponding to the down payment, and the amount of P4,084,430.00 representing the first four (4) semi-annual installments and a portion of the fifth installment, Solid Homes made no further payment to Investco, Inc. after February 19, 1981. The post dated checks issued by Solid homes to Investco, Inc. intended for the remaining installments were dishonored, leaving a balance of P4, 300,282.91 due under the contract in Investco, Inc.’s favor. On March 13, 1981, Investco, Inc. and its predecessors-in-interests Angela Perez-Staley and Antonio Perez, Jr. filed with the Court of First Instance of Rizal, Pasig, Branch 26 an action for specific performance and damages against Solid Homes, Inc. In the complaint, Investco, Inc. and co-plaintiffs sought to collect from Solid Homes, Inc. the sum of P4, 800,282.91 representing the balance on the purchase price due under the contract, reimbursement of P350,000.00 representing Investco, Inc.’s contribution to the expenses for eviction of squatters and the further sum of P99,559.00 for science and transfer taxes, and actual and moral damages, including attorney’s fees. On April 20, 1981, Solid Homes filed with the trial court an answer to Investco, Inc.’s complaint alleging that the purchase price under the contract was "not yet due" and that the former, in fact, exceeded the installment payments due thereon. Solid Homes prayed for dismissal of Investco, Inc.’s complaint, and interposed a counterclaim for the refund of its excess payments, moral damages in the sum of P500,000.00, and attorney’s fees of P20,000.00 "or in the sum equivalent to 10% of whatever amount is awarded in favor of defendant."

On September 20, 1984, Solid Homes filed with the Register of Deeds of Marikina a notice of lis pendens with reference to Civil Case No. 40615 requesting that the same be annotated on the titles in Investco, Inc.’s name. On the same date, the notice of lis pendens was recorded as Entry No. 117191 of the primary Entry Book, Volume 14 of the Office of the Register of Deeds of Marikina, Metro Manila. However, the notice of lis pendens was not actually annotated on the titles in the name of Investco, Inc.

On February 14, 1985, the trial court rendered judgment in favor of Investco, Inc. ordering solid Homes to pay plaintiffs P4,800,282.91, representing the balance of the purchase price due under the contract, with interest thereon from February 23, 1981 until paid; P99,559.00 representing science and transfer taxes advanced by Investco to Solid Homes and P250,000.00 as attorney’s fees and expenses of litigation. On May 27, 1985, the trial court ordered the original record transmitted to the appellate court in view of Solid Homes’ filing of a notice of appeal. In the meantime, on April 23, 1984, Investco, Inc. offered to sell the property to AFP Mutual Benefit Association, Inc. for P27,079,767.00, subsequently reduced to P24,000,000.00, payable in installments. Investco, Inc. furnished AFP MBAI with certified true copies of the titles covering the Marikina property. In June, 1984, AFP MBAI verified the titles with the Register of Deeds of Marikina, Metro Manila and found that copies of the titles that Investco, Inc. gave were genuine and faithful reproductions of the original titles on file with the Register of Deeds. AFP MBAI noted that there were no liens or encumbrances annotated on the titles. Moreover, AFP MBAI, through its Real Estate Committee, made an ocular inspection of the property sometime in June and July, 1984 "to determine the nature of the property and its (metes) and bounds." During the inspection, AFP MBAI found that the Investco, Inc. property was underdeveloped raw land "which is mostly cogonal, (with) few trees and shrubs and bounded on one side by the Marikina River."AFP MBAI confirmed the presence of squatter shanties numbering about twenty (20) to thirty (30). Except for a foot path used by the squatters, there was no development on the property. After determining that the Investco property was suitable for the housing project of the Armed Forces of the Philippines and that the titles covering the same were "clean" and "genuine," AFP MBAI agreed to purchase the same from Investco, Inc. for the price of P24,000,000.00, payable in installments for a period of one (1) year. On October 10, 1984, Investco, Inc. executed a "Deed of Absolute Sale" conveying the property to AFP MBAI for the price of P24,000,000.00, payable in installments until October 10, 1985. Among other terms, Investco, Inc. warranted to AFP MBAI that "it has good and valid title over the properties subject of (the) sale and (that it ) shall hold (AFP MBAI) free from any adverse claim of whatever nature and from liens an encumbrances of third parties." In November, 1984, AFP MBAI again verified the records of the Register of Deeds of Marikina, Metro Manila and confirmed "(t)he absence of any lis pendens,

adverse claims or any liens or encumbrance (on) the originals of the title(s) x x x." AFP MBAI also inquired from the Malacañang Legal Office, the Land Registration Commission, and the Metropolitan Trial Court of Marikina if there were cases and other problems concerning the property, but found no case involving either Investco, Inc. or the property pending with said court and offices. AFP MBAI also obtained a certification from the Clerk of the Metropolitan Trial Court of Marikina that Investco, Inc. "has no pending case before (that) court." In April, 1985, AFP MBAI completed its payments of the purchase price. On April 26, 1985, the Register of Deeds of Marikina issued Transfer Certificates of Title Nos. N-104941, N-104942, N-104943, N-104944, N-104945 and N-104946 in the name of AFP MBAI. The titles issued were "clean" and contained no annotation of any lien, encumbrance, or adverse claim by a third party. On November 28, 1985, Solid Homes commenced action before the Regional Trial Court, Marikina, against the Register of Deeds, AFP MBAI and Investco, Inc. for "annotation of lis pendens and damages" with temporary restraining order and preliminary injunction. In its verified complaint, Solid Homes prayed that (a) the Register of Deeds be ordered to annotate on the titles registered in the name of Investco, Inc. the notice of lis pendens dated September 19, 1984 in relation to civil Case No. 40615, and to carry over the same to the titles in the name of AFP MBAI; (b) alternatively, to declare AFP MBAI as a buyer in bad faith, bound by the judgment to be rendered in Civil Case No. 40615; and (c) AFP MBAI and Investco, Inc. be ordered to pay Solid Homes jointly and severally, unspecified amount of actual, moral and exemplary damages, as well as attorney’ fees of P100,000.00 plus "ten (10%) percent of the total amount to be awarded to plaintiff." Solid Homes also prayed for an order to enjoin provisionally the Register of Deeds from registering any deed affecting the titles in derogation of solid Homes’ rights under the contract executed between itself and Investco, Inc. In due time, AFP MBAI and Investco, Inc. filed with the trial court an answer to the complaint. After pre-trial and trial, on April 25, 1990, the trial court rendered decision. Aggrieved thereby, AFP MBAI appealed the decision to the Court of Appeals. November 29, 1992, the Court of Appeals rendered decision. On December 24, 1991, AFP MBAI filed with the Court of Appeals a motion for reconsideration of the decision, which Solid Homes opposed.

On March 17, 1991, the Court of Appeals denied the motion. ISSUES: Whether or not Solid Homes is entitled to the annotation of its notice of lis pendens on the titles of Investco, Inc. and AFP Mutual Benefit Association, Inc., in relation to Civil Case No. 40615 of the Regional Trial Court, Pasig and thereby be bound by the final judgment therein. HELD: No. Basically, Solid Homes’ complaint was one for "annotation of lis pendens and other matters with prayer for restraining order and writ of preliminary injunction" against Investco, Inc. AFP MBAI and the Register of Deeds of Marikina, to cause the annotation of lis pendens in the titles of Investco, Inc. and AFP MBAI. Actually, therefore, the suit is to compel the Register of Deeds of Marikina to annotate the notice of lis pendens on the titles of AFP MBAI with a claim for damages against Investco, Inc. and AFP MBAI for depriving Solid Homes of its rights to the property as provided under the contract to buy and sell. In its verified complaint, Solid Homes alleged that "the act of defendant Register of Deeds in not causing the annotation of the lis pendens on the titles then registered in the name of defendant Investco, Inc. and in issuing titles in the name of defendant AFP Mutual Benefit Association, Inc., without carrying over the proper annotation of lis pendens are contrary to law". Obviously, the Register of Deed’s obligation to annotate the notice of lis pendens is one that arises from law. Hence, the action is actually one for mandamus to compel the performance of a clear legal duty. There is no such action as one for "annotation of lis pendens," as Solid Homes sought in its complaint. "Lis pendens is a Latin term which literally means a pending suit or a pending litigation while a notice of lis pendens is an announcement to the whole world that a particular real property is in litigation, serving as a warning that one who acquires an interest over the said property does so at his own risk, or that he gambles on the result of the litigation over the said property. It is but a signal to the intending buyer or mortgagee to take care or beware and to investigate the prospect or non-prospect of the litigation succeeding before he forks down his money." Consequently, the doctrine of lis pendens is inapplicable to this case. The Register of Deeds of Marikina correctly denied the annotation of the notice of lis pendens on the titles of Investco, Inc. and the AFP MBAI.

Under Presidential Decree No. 1529, known as the "Property Registration Decree of 1978", the Register of Deeds may deny registration of the notice of lis pendens, which denial may be appealed by the applicant en consulta (Section 10, paragraph 2) to the Commissioner of Land Registration. The rule that "all persons dealing with property covered by Torrens Certificate of title are not required to go beyond what appears on the face of the title" applies herein with full vigor. In the absence of anything to excite suspicion, the buyer is not obligated to look beyond the certificate to investigate the titles of the seller appearing on the face of the certificate. "Good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of proof." Here, Solid Homes alleged that Investco, Inc. and AFP MBAI "confederated with each other in entering into the aforementioned sale in order to deprive herein plaintiff (Solid Homes) of its rights over subject properties under the Contract to Sell and to Buy..." However, Solid Homes adduced no evidence to prove such allegation of bad faith. The conclusion is inevitable that contrary to the holding of the Court of Appeals, AFP MBAI was a purchaser in good faith and for value, and, consequently, acquired valid and indefeasible titles to the Investco, Inc. property. Resultantly, we find the appeal via certiorari of solid Homes without merit. Its objective was to compel AFP MBAI to execute a deed of transfer of the titles to parcels of land originally covered by the agreement to buy and sell between Solid Homes, Inc. and Investco, Inc. and for Solid Homes to pay AFP MBAI, in substitution of Investco, Inc. the amount of P4,800,282.91 with interest thereon at one per cent per month from March 22, 1982, until paid. Thus, if Solid Homes would succeed in its scheme in the case, it would unjustly enrich itself enormously, acquiring subject property now worth billions for the measly sum of P4,800,282.91 with interest at one per cent a month from March 22, 1982, which it was unable to pay Investco, Inc. in the first place. Solid Homes’ claim is predicated on the assumption that AFP MBAI is a transferee pendente lite of Investco, Inc. of the subject parcels of land and bound by the result of the suit. Such claim is not factually or legally correct. In the absence of a valid notice of lis pendens annotated in the titles, AFP MBAI is a buyer in good faith and for value, and thus, acquired clean and valid titles to the property in question. WHEREFORE, the Court: (1) In G. R. No. 104769, GRANTS the petition, and SETS ASIDE the Court of Appeals’ decision in CA-G.R. CV No. 27398 and, in lieu thereof, renders judgment: (a) Dismissing the complaint in Civil Case No. 52999 of the Regional Trial Court, Pasig Branch 165;

(b) Ordering the Register of Deeds of Marikina to cancel the notice of lis pendens annotated on Transfer Certificates of Title Nos. N-104941, N-104942, N104943, N-104944, N-104945 and N-104946 of the Register of Deeds for Marikina, Metro Manila; (c) Ordering respondent Solid Homes, Inc. to pay AFPMBAI P300,000.00 as attorney’s fees and expenses of litigation; and costs. (2) In G.R. No. 135016, DENIES the petition, for lack of merit.

46. Sps. JAYME and EVELYN UY vs. Court of Appeals and Sps. NICANOR and ESTER DE GUZMAN, G.R. No. 109197, June 21, 2001 Facts: The spouses DE GUZMAN were the registered owners of certain parcels of land, evidenced by certificates of title. The spouses erected a residential house therein worth around Php10Million, while the value of the lots was around Php4k to Php5k per square meter. Later, due to financial constraints, the said spouses obtained a loan from Mario Siochi, secured by a mortgage over the said properties. However, the spouses were required to sign a document dubbed as “Deed of Sale”. Later, unknown to the said spouses, Mario Siochi was able to transfer the registration of the said parcels of land in his name, using the “Deed of Sale”. Accordingly, new transfer certificates of title over the said lots were issued in the name of Mario Siochi. In turn, Mario Siochi sold the said lots to the spouses UY, both engaged in buy-and-sell of real estates, in the measly amount of Php2.7Million. For this, the spouses UY were able to obtain new transfer certificates of title over the said parcels of land in their name. In turn, the spouses UY leased the said properties to Roberto Salapandan. However, since the spouses DE GUZMAN remained in possession of the said properties, Roberto Salapandan was not able to occupy it. Roberto Salapandan then filed an ejectment case against the spouses DE GUZMAN. It was at this juncture when the spouses DE GUZMAN learned, for the first time, that the said parcels of land are already registered in the name of the Sps. UY. The spouses DE GUZMAN filed a case for quieting of title against the spouses UY, Mario Siochi and Roberto Salapandan. On the part of the spouses UY, they argued that they are innocent purchasers for value, thus, the properties should remain registered in their name.

Issue: Whether or not the spouses UY are innocent purchasers for value. Held: The spouses UY are NOT innocent purchasers for value. Firstly, it was proved that the transaction between Mario Siochi and the spouses DE GUZMAN was an equitable mortgage, and not sale. Thus, Mario Siochi cannot sell the subject properties to the spouses UY. The fact that the spouses UY merely relied in the certificates of title over the subject lots registered in the name of Mario Siochi is not material. For while it is true that a person dealing with registered lands need not go beyond the certificate of title, it is likewise a wellsettled rule that a purchaser or mortgagee cannot close his eyes to facts which should put a reasonable man on his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor or mortgagor. His mere refusal to face up to the fact that such defect exists, or his willful closing of his eyes to the possibility of the existence of a defect in the vendor’s or mortgagor’s title, will not make him an innocent purchaser for value, if it afterwards develops that the title was in fact defective, and it appears that he had such notice of the defect as would have led to its discovery had he acted with the measure of precaution which may be required of a prudent man in a like situation. In this case, IF the spouses UY only conducted the required diligence, they should have discovered the defect in the title of Mario Siochi over the subject parcels of land. The fact that the properties remained in the possession of the spouses DE GUZMAN and the cheap purchase price (Php2.7Million) they have paid to Mario Siochi should have incited their awareness to conduct further inquiry, especially so that they are businessmen dealing with real estates for which a higher degree of diligence is required of them by law.

47. ARTEMIO BALTAZAR and AURORA GALVEZ vs. Court of Appeals and GOOD EARTH ENTERPRISES, INC., 78728, December 8, 1988 Facts: GOOD EARTH ENTERPRISES, INC. is the registered owner of a certain parcel of land as evidenced by a certificate of title. Later, ARTEMIO BALTAZAR filed an action for recovery of ownership of the said lot against GOOD EARTH. However, the summons for GOOD EARTH to appear and answer the complaint was returned ‘UNSERVED’ by the sheriff alleging that the address of such corporation is ‘UNKNOWN’. The sheriff, however, did not attempt to serve the summons to the corporation through its officers. Forthwith, in accordance with the rules of court, substituted service was resorted to, thus, the summons was published. Thereafter, an Order of Default was issued for failure of GOOD EARTH to answer the complaint. After presentation of complainant’s evidence, a Judgment of Default was issued in favor of ARTEMIO BALTAZAR and against GOOD EARTH, for which, the latter’s certificate of title was cancelled. Such decision has become final and executory. Accordingly, ARTEMIO BALTAZAR was able to obtain a new certificate of title over the said parcel of land. Thereafter, ARTEMIO BALTAZAR subdivided the lot, and sold a portion thereof to AURORA GALVEZ. Accordingly, AURORA GALVEZ was able to obtain a certificate of title to such portion of the lot sold to her by ARTEMIO BALTAZAR. When GOOD EARTH discovered the cancellation of its certificate of title, it filed a case for annulment of judgment against ARTEMIO BALTAZAR and AURORA GALVEZ. AURORA GALVEZ argued that she is an innocent purchaser for value, thus, such portion sold to her should remain in her ownership. Issue: Whether or not AURORA GALVEZ is an innocent purchaser for value. Resolution: AURORA GALVEZ is NOT an innocent purchaser for value. Firstly, the court where the complaint of ARTEMIO BALTAZAR was filed DID NOT acquire jurisdiction over the person of the corporation for improper service of summons. The sheriff DID NOT conduct the proper service thereof as required by the rules (i.e. service upon the President, secretary, cashier, etc…). Neither did the publication cure the defect, since summons by publication is done only in cases where: 1) the

defendant or his address is UNKNOWN; 2) service upon defendants who are residing abroad; and 3) service upon residents temporarily out of the country. GOOD EARTH’s address is NOT UNKNOWN (The address of GOOD EARTH is correct, yet, the sheriff DID NOT inquire at the given address whether GOOD EARTH has office therein); GOOD EARTH is NOT residing abroad; GOOD EARTH is NOT temporarily out of the country. Thus, summons by publication should have NOT been resorted to. As regards the claim of AURORA GALVEZ, she has NOT proved her status as a purchaser in good faith and for value of the land. The burden of proving the status of a purchaser in good faith and for value lies upon him who asserts that status. In discharging that burden, it is not enough to invoke the ordinary presumption of good faith, i.e., that everyone is presumed to act in good faith. The good faith that is here essential is integral with the very status which must be proved. Also, whatever rights AURORA GALVEZ might have had cannot be superior to the rights of GOOD EARTH which was, at all relevant times, the lawful registered owner of the subject parcel of land, and which had not been negligent in any manner and indeed had not performed any act which gave rise to or any occasion for any claim of right by third persons. Assuming, for the sake of argument, that AURORA GALVEZ had successfully proven that she was a purchaser in good faith and for value. Even so, as between two persons, both of whom are in good faith and both innocent of any negligence, the law must protect and prefer the lawful holder of registered title over the transferee of a vendor bereft of any transmissible rights. Under the foregoing principle derived from the above case law, AURORA GALVEZ has no rights as against GOOD EARTH. Her recourse is against ARTEMIO BALTAZAR.

48. BENIGNA SECUYA, et. al. vs. GERARDA M. VDA. DE SELMA, 136021, February 22, 2000 Facts: GERARDA M. VDA. DE SELMA is the registered owner of Lot 5679-C-120 consisting of 9,302 square meters as evidenced by TCT No. T-35678, having bought the same sometime in February 1975 from Cesaria Caballero as evidenced by a notarized Deed of Sale and have been in possession of the same since then. Cesaria Caballero was the widow of Silvestre Aro, registered owner of the mother lot, Lot. No. 5679 with an area of 12,750 square meters of the Talisay-Minglanilla Friar Lands Estate, as shown by Transfer Certificate of Title No. 4752. Upon Silvestre Aro’s demise, his heirs executed an "Extrajudicial Partition and Deed of Absolute Sale" wherein one-half plus one-fifth of Lot No. 5679 was adjudicated to the widow, Cesaria Caballero, from whom GERARDA M. VDA. DE SELMA derives her title. Issue: Whether or not GERARDA M. VDA. DE SELMA is a purchaser in good faith and for value. Resolution: GERARDA M. VDA. DE SELMA is a purchaser in good faith and for value. Indeed, a party who has actual knowledge of facts and circumstances that would move a reasonably cautious man to make an inquiry will not be protected by the Torrens system. However, in this case, granting arguendo that GERARDA knew that BENIGNA SECUYA, et. al., through Superales and his family, were actually occupying the disputed lot, it must be stressed that the vendor, Cesaria Caballero, assured GERARDA that BENIGNA SECUYA, et. al. were just tenants on the said lot. GERARDA cannot be faulted for believing this representation, considering that BENIGNA SECUYA, et. al's claim was not noted in the certificate of the title covering Lot No. 5679. Moreover, the lot, including the disputed portion, had been the subject of several sales transactions. The title thereto had been transferred several times, without any protestation or complaint from BENIGNA SECUYA, et. al. In any case, GERARDA's title is amply supported by clear evidence, while BENIGNA SECUYA, et. al’s claim is barren of proof.

49. AZNAR BROTHERS vs. Court of Appeals, 128102, March 7, 2000

Facts: The Heirs of Crisanta Maloloy-on are the registered owners of a parcel of land identified as Lot No. 4399 and covered by OCT RO-2856. However, the original copy of this certificate of title is NOT in the possession of the Registry of Deeds as it was allegedly lost during the world war. Later, AZNAR BROTHERS acquired ownership of Lot No. 4399 by virtue of the Extrajudicial Partition of Real Estate with Deed of Absolute Sale executed by the Heirs of Crisanta Maloloy-on on March 3, 1964. However, this Deed has not been annotated on OCT RO-2856, obviously, because this certificate of title is NOT in the possession of the Register of Deeds. Later, however, said certificate of title was reconstituted on August 25, 1988. Issue: Whether or not the Deed of Extra-Judicial Partition is valid as to transfer ownership of the subject property to the AZNAR BROTHERS notwithstanding non-registration thereof in OCT RO-2856. Resolution: The Deed is valid notwithstanding lack of registration thereof. It must be borne in mind that the act of registering a document is never necessary to give the conveyance legal effect as between the parties and the vendor’s heirs. As between the parties to a sale, registration is not indispensable to make it valid and effective. The peculiar force of a title is exhibited only when the purchaser has sold to innocent third parties the land described in the conveyance. The purpose of registration is merely to notify and protect the interests of strangers to a given transaction, who may be ignorant thereof, and the non-registration of the deed evidencing said transaction does not relieve the parties thereto of their obligations thereunder. Here, no right of innocent third persons or subsequent transferees of the subject lot is involved; thus, the conveyance executed in favor of AZNAR by private respondents and their predecessors is valid and binding upon them, and is equally binding and effective against their heirs. The principle that registration is the operative act that gives validity to the transfer or creates a lien upon the land "refers to cases involving conflicting rights over registered property and those of innocent transferees who relied on the clean title of the properties." This principle has no bearing on the present case, as no subsequent transfer of the subject lot to other persons has been made either by private respondents or their predecessors-in-interest. 50. Spouses ALEXANDER AND ADELAIDA CRUZ vs. ELEUTERIO LEIS, et. al., 125233, March 9, 2000 Facts:

GERTRUDES acquired a parcel of land for which TCT No. 43100 was issued in the name of "Gertrudes Isidro," who was referred therein as a "widow." Later, GERTRUDES obtained a loan from spouses ALEXANDER and ADELAIDA CRUZ, secured by a mortgage over the property covered by TCT No. 43100. GERTRUDES, however, failed to pay the loan. Unable to pay her outstanding obligation after the debt became due and payable, GERTRUDES executed two contracts in favor of ALEXANDER CRUZ. The first is denominated as "Kasunduan," which the parties concede is a pacto de retro sale, granting Gertrudes one year within which to repurchase the property. The second is a "Kasunduan ng Tuwirang Bilihan," a Deed of Absolute Sale covering the same property for the price of P39,083.00, the same amount stipulated in the "Kasunduan." For failure of GERTRUDES to repurchase the property, ownership thereof was consolidated in the name of ALEXANDER CRUZ in whose name TCT No. 130584 was issued, canceling TCT No. 43100 in the name of GERTRUDES ISIDRO. Later, when GERTRUDES died, her heirs assail the validity of the transfer of title from GERTRUDES to ALEXANDER, claiming that the subject property covered by the then TCT No. 43100 is a conjugal property, thus, GERTRUDES cannot transfer the entirety of the lot to ALEXANDER. Issue: Whether or not ALEXANDER acquired the entirety of the subject lot. Resolution: ALEXANDER acquired the entirety of the subject lot. It must be noted that the property was registered as TCT No. 43100 solely in the name of "Gertrudes Isidro, widow." Where a parcel of land, forming part of the undistributed properties of the dissolved conjugal partnership of gains, is sold by a widow to a purchaser who merely relied on the face of the certificate of title thereto, issued solely in the name of the widow, the purchaser acquires a valid title to the land even as against the heirs of the deceased spouse. The rationale for this rule is that "a person dealing with registered land is not required to go behind the register to determine the condition of the property. He is only charged with notice of the burdens on the property which are noted on the face of the register or the certificate of title. To require him to do more is to defeat one of the primary objects of the Torrens system. 51. REPUBLIC OF THE PHILIPPINES vs. THE COURT OF APPEALS AND CEFERINO PAREDES, 112115, March 9, 2001 Facts: A parcel of land was reserved by the then Bureau of Lands as a School Site for the San Francisco Townsite Reservation in Agusan Del Sur. Notwithstanding the reservation, CEFERINO PAREDES applied for free patent over the said parcel of land, wherein he did NOT divulge in the application that the subject property is a

‘reserved’ land, despite knowledge of such. Intriguingly, CEFERINO PAREDES was able to obtain a free patent thereto from the DENR. Accordingly, upon the registration of the patent, a certificate of title (OCT- P-8379) was issued in favor of CEFERINO PAREDES. Later, the Sangguniang Bayan of San Francisco, Agusan Del Sur, assails the validity of title of CEFERINO PAREDES over the subject property. Issue: Whether or not CEFERINO PAREDES has a valid title over the subject parcel of land. Resolution: CEFERINO PAREDES has NO valid title over the subject property. CEFERINO PAREDES, in not divulging that the subject land is a ‘reserved’ land, is guilty of misrepresentation, fraud and deceit. The deliberately false application and suppression of the known fact that the subject land was reserved for a school site misled the Bureau of Lands to waive opposition to CEFERINO’s application and effectively deprived the Republic of its day in court. Neither can CEFERINO successfully invoke the doctrine of estoppel against the government. While it is true that CEFERINO obtained title to the subject land without government opposition, the government is not now estopped from questioning the validity of his certificate of title. It is, after all, hornbook law that the principle of estoppel does not operate against the Government for the act of its agents.

52. HEIRS OF EULALIO RAGUA, et. al. versus THE COURT OF APPEALS, 89366-67, JANUARY 31, 2000 Facts: This case involves a prime lot consisting of 4,399,322 square meters, known as the Diliman Estate, situated in Quezon City. On this, 439 hectares of prime land now stand the following: the Quezon City Hall, Philippine Science High School, Quezon Memorial Circle, Visayas Avenue, Ninoy Aquino Parks and Wildlife, portions of UP Village and East Triangle, the entire Project 6 and Vasha Village, Veterans Memorial Hospital and golf course, Department of Agriculture, Department of Environment and Natural Resources, Sugar Regulatory Administration, Philippine Tobacco Administration, Land Registration Authority, Philcoa Building, Bureau of Telecommunications, Agricultural Training Institute

building, Pagasa Village, San Francisco School, Quezon City Hospital, portions of Project 7, Mindanao Avenue subdivision, part of Bago Bantay resettlement project, SM City North EDSA, part of Phil-Am Life Homes compound and four-fifths of North Triangle. This large estate was the subject of a petition for judicial reconstitution originally filed by Eulalio Ragua in 1964. However, this petition failed to comply with the jurisdictional requirements of publication and posting of notices provided under Republic Act No. 26, Sections 12 and 13. Notwithstanding this failure, the trial court granted the petition. Issue: Whether or not the trial court acquired jurisdiction over the petition. Resolution: The failure to comply with the requirements of publication and posting of notices prescribed in Republic Act No. 26, Sections 12 and 13 is fatal to the jurisdiction of the court. Hence, non-compliance with the jurisdictional requirements renders its decision approving the reconstitution and all proceedings therein utterly null and void.

53. JOSE MANUEL STILIANOPULOS VS. THE CITY OF LEGASPI, 133913, October 12, 1999 Facts: The City of Legaspi filed a Petition for the judicial reconstitution of its titles to twenty parcels of land, including Lot 1 (Psd 3261), the certificates of which had allegedly been lost or destroyed during World War II. The trial court granted the petition and ordered the Register of Deeds to reconstitute the Original Certificates of Title over these lots, including OCT No. 665 (for Lot 1), in favor of the applicant, notwithstanding failure to comply with publication and notice requirements, and the existence of the certificate of title over Lot 1 registered in favor of STILIANOPULOS. Issue: Whether or not the trial court acquired jurisdiction over the petition.

Resolution: It appears that the trial court had NO jurisdiction. First, under Section 13 of RA 26, the sending of notice to the occupant of the land covered by the title sought to be reconstituted is mandatory and jurisdictional. If no notice of the date of hearing of a reconstitution case is served on the possessor or anyone else having interest in the property involved, the order of reconstitution is null and void. Second, reconstitution of title is simply the reissuance of a new duplicate certificate of title allegedly lost or destroyed in its original form and condition. Thus, it arises from the loss or destruction of the owner’s copy of the certificate. In the case at bar, the title to Lot 1 was not lost or destroyed. It remained in the possession of the petitioner’s father and was eventually passed on to him. If a certificate of title has not been lost but is in fact in the possession of another person, then the reconstituted title is void and the court that rendered the Decision had no jurisdiction. However, laches has set in against STILIANOPULOS. More than 20 years have lapse from the time the trial court rendered the decision in the reconstitution case without any protest from STILIANOPULOS.

54. EVANGELINE L. PUZON VS. STA. LUCIA REALTY AND DEVELOPMENT, INC., G.R. No. 139518, March 06, 2001 Facts: A fire in the office of the Register of Deeds of Quezon City destroyed, among others, the original copies of Transfer Certificate of Title (TCT) Nos. 240131 and 213611 registered in the name of EVANGELINE PUZON. Accordingly, EVANGELIN filed a Petition for the judicial reconstitution of the two destroyed titles. The sources of the reconstitution were the owner’s duplicate certificates of title. Without sending notices to the adjoining owners of the subject properties, the trial court granted the petition and ordered the Register of Deeds to issue the reconstituted certificates of title. Issue: Whether or not the trial court has jurisdiction over the petition. Resolution:

The source of the Petition for the reconstitution of title was EVANGELINE's duplicate copies of the two TCTs mentioned in Section 3(a). Clearly, the Petition is governed, not by Sections 12 and 13, but by Section 10 of RA 26. Nothing in this provision requires that notices be sent to owners of adjoining lots. Verily, that requirement is found in Section 13, which does not apply to petitions based on an existing owner's duplicate TCT. Put differently, Sections 9 and 10 of RA 26 require that 30 days before the date of hearing, (1) a notice be published in two successive issues of the Official Gazette at the expense of the petitioner, and (2) such notice be posted at the main entrances of the provincial building and of the municipal hall where the property is located. The notice shall state the following: (1) the number of the certificate of title, (2) the name of the registered owner, (3) the names of the interested parties appearing in the reconstituted certificate of title, (4) the location of the property, and (5) the date on which all persons having an interest in the property, must appear and file such claims as they may have. For petitions based on sources enumerated in Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e) and 3(f), Section 13 adds another requirement: that the notice be mailed to occupants, owners of adjoining lots, and all other persons who may have an interest in the property. To repeat, mailing the notice is not required for a petition based on Sections 2(a), 2(b), 3(a), 3(b) and 4(a), as in the present case. 55. JOSELITO VILLEGAS AND DOMINGA VILLEGAS VS. COURT OF APPEALS AND FORTUNE TOBACCO CORPORATION, G.R. No. 129977, February 01, 2001 Facts: A parcel of land was acquired by the FORTUNE TOBACCO for which it was issued a certificate of title (TCT No. T-68737). Later, the Office of the Register of Deeds was burned together with all the certificates of title therein, including the original copy of TCT No. T-68737. Accordingly, FORTUNE TOBACCO filed a petition for judicial reconstitution. No NOTICES, however, were posted as required by RA 26. Notwithstanding this, the trial court granted the petition and ordered the reconstitution of TCT No. T-68737. Issue: Whether or not the trial court acquired jurisdiction over the petition. Resolution: Although the order of reconstitution reveals that there was publication of the notice of the petition for reconstitution in the Official Gazette as required by law, there was, however, no mention of compliance with the requirement of posting of the notice of the petition in the provincial or municipal building of the city or

municipality where the subject property is located. While proof of publication of the notice of the petition was submitted by Fortune, there was no proof of posting of the notice, presumably because no such posting was accomplished. The lack of compliance with these requirements for the judicial reconstitution of certificates of title deprived the court of jurisdiction over the petition. The jurisdiction of the Regional Trial Court to hear and decide a petition for reconstitution of title is conferred by R.A. 26. The Act prescribes a special procedure that must be followed in order that the court may act on the petition and grant the remedy sought. The specific requirements and procedure are as laid down in Sections 9 and 10 of R.A. 26. The proceedings therein being in rem, the court acquires jurisdiction to hear and decide the petition for the reconstitution of the owner's title upon compliance with the required posting of notices and publication in the Official Gazette. These requirements and procedure are mandatory and must strictly be complied with, otherwise, the proceedings are utterly void, which is why the petitioner is required to submit proof of the publication and posting of the notice. Non-compliance with the jurisdictional requirement of posting of the notice renders the order of reconstitution null and void. Consequently, the reconstituted title of Fortune is likewise void. Fortune cannot now invoke the prior title rule, as it in effect has no valid title to speak of. 56. DORDAS vs. COURT OF APPEALS 270 SCRA 329 FACTS: Petition for review of the decision on appeal rendered by respondent Court of Appeals in an action for reconveyance filed by private respondents Francisco and Diosdado Borres against petitioner, Federico Dordas, now deceased and substituted herein by his heirs. The object of the action for reconveyance is a parcel of land situated in the Poblacion, Municipality of Maayon, Province of Capiz, containing an area of 6,097 square meters. Aforesaid parcel of land was originally owned by one Rafael Dizon. On February 8, 1927, Dizon sold the lot to one Francisco Contreras. Contreras, in turn, sold the lot to private respondents Diosdado and Federico Borres on December 27, 1957. Respondents have had actual possession of the lot since 1957 up to the present. Since 1957 also, after declaring the lot for taxation purposes, respondents have been paying the realty taxes on the lot. In 1961, the heirs of Rafael Dizon and petitioner Federico Dordas filed a petition for judicial reconstitution of the title of the lot. The court ordered the reconstitution of the title upon the ground that the title was lost or destroyed during the last world war. This, notwithstanding the fact that the only documents

submitted by petitioner was a tracing cloth and blueprint plan which are not among the documents recognized by Republic Act No. 26 that warrant judicial reconstitution of title. Furthermore, petitioner Dordas failed to serve notice of the reconstitution proceedings on private respondents who were the actual occupants of the subject lot. This is clearly violative of the notice requirement mandated by R.A. No. 26. Private respondents filed an action for reconveyance against petitioner in the Court of First Instance (now the Regional Trial Court), Branch 15, Roxas City. The trial court ruled that since private respondents filed the case on March 27, 1962, prescription has set in and on this ground, the trial court dismissed the action. This present action for reconveyance was filed on March 27, 1962, or more than twenty (20) years from February 9, 1931 is surely barred by the statutes of limitation. Private respondents appealed to the respondent Court of Appeals. The respondent court reversed the trial court and declared null and void the reconstituted title obtained by petitioner. In the same petition, Federico Dordas claimed that the lot has actually been in this possession and that all improvements thereon belong to him with no one having any adverse interests whatsoever. This fact is re-echoed in the order granting the reconstitution saying that Dordas is the sole occupant of the lot. Notably, these allegations were overpowered and belied by the unrebutted testimonies of plaintiff's witnesses and Exhs. C, D, E, F & G, which are the pictures of the houses of Filomeno, Celoria, Remedios Tinsay, Rosalina Banilla, the Liberal Party Headquarters and Diosdado Borres all standing within the lot, all establishing [that] the appellants are, in fact, in possession of the lot. ISSUE: Whether or not petitioner has the better right to reconstitute the title of lot in question HELD: No. Art. 1139 of the New Civil Code provides that actions prescribe by mere lapse of time fixed by law. In the case of Talle v. CA, 208 SCRA 266, it was ruled that actions for reconveyance based on fraud or on implied or constructive trusts prescribe in ten (10) years. But it is unsafe to assume that plaintiff's cause of action in this case accrued on February 9, 1931 or after the expiration of the four (4) year repurchase period in the Deed of Sale between Rafael Dizon and Francisco Contreras The pacto de retro period is a personal prerogative of Rafael Dizon to exercise and is not applicable to herein plaintiff's who acquired the lot

from Rafael Dizon's vendee (Francisco Contreras) only in December 27, 1957. In other words, the computation as to when herein plaintiff's cause of action accrued should not be counted from February 9, 1931. Nonetheless, what seems to be the crucial point in this case is the Reconstituted Title No. RT-2063 (Exh.. B) issued in the name of the heirs of Rafael Dizon. In the Amended Complaint, appellants question the validity of this title as having been issued out of an illegal reconstitution proceedings thus making said title null and void. Conversely, appellees maintain that the reconstitution of RT2063 was done all in accordance with the procedure laid down by law. Republic Act No. 26, is "THE ACT PROVIDING FOR A SPECIAL PROCEDURE FOR THE RECONSTITUTION OF TORRENS TITLE WHICH WERE LOST OR DESTROYED." As the title of the law suggests, it covers reconstitution of previously issued but lost or destroyed title over any parcel of land. In other words it presupposes that the lot had already been brought under the provisions of the Torrens System or Act 496. In obtaining a new title in lieu of the lost or destroyed one, the same Republic Act. No. 26 laid down procedures which must strictly be followed because it could be the source of anomalous titles or unscrupulously availed of as an easy substitute for original registration of title proceedings. As the law mandates using the phrase "in the following order", the enumerated items become the only sources whereby a title may be reconstituted. When none of these itemized sources was submitted by Dordas in the reconstitution proceedings and instead relied heavily on tracing cloth and blueprint plan of Lot 1474 and its technical description which are not among those mentioned under Section 3 of Republic Act No. 26 the reconstitution suffers fatally. The two (2) pieces of documents plan and technical description, are mere additional requirements of the law in case reconstitution is to be made from sources in Section 2F or 3F of the act, that is, any other document, which in the judgment of the court is sufficient and proper basis for reconstituting the lost or destroyed certificate of title (Sec. 12. RA 26). But, in themselves, such plan and technical description of the lot are not recognized sources for reconstitution of title under Section 3 of Republic Act No. 26. The rationale underlying this rule concerns the nature of the conferment in the trial court of the authority to undertake reconstitution proceedings. In all cases where the authority to proceed is conferred by a statute and the manner of obtaining jurisdiction is mandatory, the same must be strictly complied with, or the proceedings will be utterly void.. The foregoing principle applies in the instant case not only because of the non-compliance by petitioners with the documentary prerequisites in judicial reconstitution of title but also because petitioners failed to satisfy the publication requirement under R.A. No. 26. Private respondents who are in actual possession of the properties were not properly notified.

Notice of hearing of the petition for reconstitution of title must be served on the actual possessors of the property. Notice thereof by publication is insufficient. Jurisprudence is to the effect settled that in petitions for reconstitution of titles, actual owners and possessors of the land involved must be duly served with actual and personal notice of the petition. In view of all the foregoing, the SC uphold the ruling of respondent Court of Appeals as regards the fact that private respondents have a better right to the ownership of the real property in question, respondent Court of Appeals having correctly nullified and set aside petitioners' reconstituted TCT No. RT-2063. WHEREFORE, the instant petition is HEREBY DENIED for utter lack of merit. Costs against petitioners.

57. Talusan vs. Tayag 356 SCRA 263, April 4, 2001 FACTS: Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the November 20, 1997 Decision[1] of the Court of Appeals (CA) in CAGR CV No. 41586. On June 28, 1988, [herein petitioners] filed a complaint wherein they alleged, inter alia, that: They bought the subject property covered by Condominium Certificate of Title No. 651, from its former owner, Elias Imperial, as evidenced by a Deed of Absolute Sale: On October 15, 1985, ‘[herein Respondent] Juan D. Hernandez, x x x sued x x x in his capacity as City Treasurer of Baguio City, wrote a letter to the former owner Elias Imperial informing him that the above described property would be sold at public auction on December 9, 1985, x x x to satisfy the delinquent real estate taxes, penalties and cost of sale, and demanded payment of the sum of P4,039.80, representing total taxes due and penalties thereon; Elias Imperial and his entire family emigrated to Australia in 1974.’ Elias Imperial never authorized ‘a certain Dante Origan x x x to receive any letter or mail matter for and on his behalf;’ [Respondent] Hernandez sold the above-described property to [Respondent] Tayag for P4,400.00 ‘without any notice to the former owner thereof, [or] to [petitioners], and without compliance with the provisions of PD No. 464, as evidenced by the Certificate of Sale;’ A final bill of sale was later issued ‘in favor of the [Respondent] Hermenegildo Tayag.’ The assessed value alone of the said property is P37,310.00 and the fair market value of the same is more than P300,000.00 and both [respondents] knew these; The bid price of P4,400 ‘is so unconscionably low and shocking to the conscience,’ thus, the sale ‘for the alleged unpaid taxes in the sum of P4,039.79, including penalties’ is ‘null and void ab initio;’ [Petitioners] have been in actual possession of the Unit in question, since they bought the same from its former owners, and their possession is open, public, continuous, adverse and in the concept of owners, while [Respondent] Hermegildo Tayag has never been in possession of the said property;’

[Petitioners] through intermediaries offered ‘to pay to the [respondents] the sum of P4,400 plus all interests and expenses which [they] might have incurred x x x but said offer was rejected without any just [or] lawful cause.’ There is a need to issue a writ of preliminary injunction to ‘preserve the status quo.’ They asked for: moral damages of not less than P50,000.00; exemplary damages of not less than P20,000.00; attorney’s fee of P30,000.00, plus appearance fee of P2,000.00 for every appearance; and litigation expenses of not less than P5,000.00 to prosecute the case. On July 14, 1988, [Respondent] Hermenegildo Tayag filed his [A]nswer with [C]ounterclaim (pages 28-32 of the Record), wherein he substantially denied the allegations in the complaint and, at the same time, raised the following affirmative defenses, among others: (T)he ownership of the Condominium unit registered under Condominium Certificate of Title No. 651, Baguio City, has been consolidated in his name by virtue of the decision of the Regional Trial Court of Baguio, Branch 6, on September 16, 1987 x x x . The said decision has [become] final and executory as evidenced by the Certificate of Finality issued on October 8, 1987;’ [Petitioners have] no cause of action against him, he being a ‘buyer in good faith in a regular and lawful public bidding in which any person is qualified to participate.’ The lower court has no jurisdiction over [petitioners’] claim ‘because the [petitioners] pray for the annulment of the Certificate of the Sale and the Final Bill of Sale, which was affirmed by virtue of the decision of the Regional Trial Court of Baguio, Branch 6, on September 16, 1987 x x x. The said decision has [become] final and executory as evidenced by the Certificate of Finality issued on October 8, 1987;’ The public auction sale complied with ‘the requirements of Presidential Decree No. 464’ – hence, the same is ‘lawful and valid:’ [Respondent] Tayag is not bound by the alleged [D]eed of [S]ale in favor of the [petitioners] by Elias [I]mperial, because it was not registered and recorded with the Registry of Deeds of Baguio City.’ [Respondent] Tayag then prayed for the award in his favor, of: moral damages of at least P50,000.00; exemplary damages; attorney’s fees in the sum of P10,000.00; and, expenses of litigation. [Respondent] Hernandez likewise filed an [A]nswer on July 18. 1988, wherein he denied the material averments in the complaint and stated that ‘no irregularity or illegality was committed in the conduct of the proceedings with respect to the delinquent real property of Elias Imperial and the actuations of the

defendant herein were all within the limits of his authority and in accordance with the provisions of the law pertaining to delinquent real property, particularly, P.D. 464 otherwise known as the Real Property Tax Code and therefore, no damages may be imputed against him.’ He also claimed, by way of affirmative defenses, that: The complaint states no cause of action against the [respondent] herein: ‘[Petitioners] have not complied with x x x Section 83 of P.D. No. 464 x x x thus, the case cannot prosper;’ ‘Granting that a Deed of Sale was actually issued in favor of the plaintiffs [because of] the fact that it is unregistered, the same does not bind third persons including defendant herein.’” In their Complaint, petitioners alleged that on December 7, 1981, they had acquired the condominium from Elias Imperial, the original registered owner, for P100,000. The sale was purportedly evidenced by a Deed of Sale which, however, had not and thenceforth never been registered with the Register of Deeds. Petitioners also averred that on December 9, 1985, Baguio City Treasurer Juan Hernandez sold the property at a public auction due to nonpayment of delinquent real estate taxes thereon. The property was sold to Respondent Herminigildo Tayag for P4,400 which represented the unpaid taxes. Thus, petitioners filed a Complaint seeking the annulment of the auction sale. They cited irregularities in the proceedings and noncompliance with statutory requirements. Dismissing the Complaint, Branch 7 of the RTC of Baguio City cited the December 16, 1987 judgment of Branch 6 of the same court in LRC Adm. Case No.207-R. This earlier Branch 6 Decision had consolidated ownership of the condominium unit in favor of Respondent Tayag. The Branch 7 Decision also cited the May 31, 1988 Order of Branch 5 of the same court which had granted a Petition for the Cancellation of Condominium Certificate of Title No. 651 in the name of Elias Imperial and directed the Register of Deeds to issue a new Certificate of Title in the name of Respondent Tayag. According to the trial court, the Decision in LRC Adm. Case No. 207-R had already upheld the legality of the questioned auction sale. Hence, to rule again on the same issue would amount to passing upon a judgment made by a coequal court, contrary to the principle of “conclusiveness of judgment.” ISSUE:

Whether or not the RTC Decision in LRC Adm. Case No. 207-R is a bar to proceeding and whether the auction sale of subject condominium unit should be annulled. HELD: No. Presidential Decree (PD) 1529, however, intended to avoid a multiplicity of suits and to promote the expeditious termination of cases. In more recent cases, therefore, the Court declared that this Decree had eliminated the distinction between general jurisdictions vested in the regional trial court and the latter’s limited jurisdiction when acting merely as a land registration court. Land registration courts, as such, can now hear and decide even controversial and contentious cases, as well as those involving substantial issues. It is equally important to consider that a land registration court’s decision ordering the confirmation and the registration of title, being the result of a proceeding in rem, binds the whole world. Thus, the trial court’s ruling consolidating the ownership and the title of the property in the name of herein respondent is valid and binding not only on petitioners, but also on everyone else who may have any claim thereon. Yes. For purposes of real property taxation, the registered owner of a property is deemed the taxpayer and, hence, the only one entitled to a notice of tax delinquency and the resultant proceedings relative to an auction sale. Petitioners, who allegedly acquired the property through an unregistered deed of sale, are not entitled to such notice, because they are not the registered owners. Moral lessons: real property buyers must register their purchases as soon as possible and, equally important, they must pay their taxes on time. As correctly pointed out by respondents, equitable considerations will not find application, if the statutes or rules of procedure explicitly provide for the requisites and standards by which the matters at bench can be resolved. While it may be assumed that both petitioners and Respondent Tayag are innocent purchasers of the subject property, it is a well-settled principle that between two purchasers, the one who has registered the sale in one’s favor has a preferred right over the other whose title has not been registered, even if the latter is in actual possession of the subject property. Likewise, we cannot help but point out the fact that petitioners brought this misfortune upon themselves. They neither registered the Deed of Sale after its execution nor moved for the consolidation of ownership of title to the property in their name. Worse, they failed to pay the real property taxes due. Although they had been in possession of the property since 1981, they did not take the necessary steps to protect and legitimize their interest. Indeed, petitioners’ suit is now barred by laches. The law helps the vigilant, but not those who sleep on their rights, for time is a means of obliterating actions.

Verily, time runs against the slothful and the contemners of their own rights. WHEREFORE, the Petition is hereby DENIED and the assailed Decision and Resolution AFFIRMED. Costs against petitioners.

58. LIM vs. VERA CRUZ 356 SCRA 386, April 4, 2001 FACTS: A complaint for quieting of title, annulment and damages was filed by petitioner against private respondents [5] before the Regional Trial Court, Branch 84, Malolos, Bulacan, docketed as Civil Case No. 195-M-94, alleging that he has been in possession since 1960 of a 200 square meter portion of Lot 4204 situated in Barrio Tikay, Malolos, Bulacan covered by TCT No. 191498 of the Registry of Deeds of Bulacan in the names of Turandut, Traviata, Marcelita, Pacita, Marlene, Mathews, Victoria and Rosary, all surnamed Aldaba. That on January 11, 1983, Rosary Aldaba sold to him said 200 square meter portion, which is included in the formers one-eight share in Lot 4204, consisting of

1,732 square meters; That a complaint for ejectment was filed against him in 1993 by private respondent Henry Lim, who claims to be the owner of the property occupied by him, being a portion of the parcel of land covered by TCT No. T-16375 registered in his name; That judgment was rendered against him in the ejectment case, which he elevated to the appellate court, and that upon investigation, he discovered that TCT No. T-16375 in the name of private respondents was obtained in bad faith, by fraud and/or clever machination. Petitioner caused the annotation of a notice of lis pendens at the back of TCT T-16375. On July 22, 1998, respondent judge issued an order cancelling the notice of lis pendens annotated at the back of TCT No. T-16375 upon the posting by private respondents of an indemnity bond in the amount of P2,000,000.00. Petitioners’ motion for reconsideration was denied in an order dated October 7, 1998. Petitioners contend that the cancellation of the notice of lis pendens by the trial court is justified because respondent had it registered for the sole purpose of molesting them and that it is not necessary to protect his rights. ISSUE: Whether or not the Court of Appeals erred in holding that the trial court committed grave abuse of discretion in cancelling the notice of lis pendens.

HELD: No. Sec. 14 Notice of lis pendens In an action affecting the title or the right of possession of real property, the plaintiff and the defendant, when affirmative relief is claimed in his answer, may record in the office of the registry of deeds of the province in which the property is situated a notice of the pendency of the action. Said notice shall contain the names of the parties and the object of the action or defense, and a description of the property in that province affected thereby. Only from the time of filing of such notice for record shall a purchaser, or encumbrancer of the property affected thereby, be deemed to have constructive notice of the pendency of the action, and only of its pendency against the parties designated by their real names.

The notice of lis pendens hereinabove mentioned may be cancelled only upon order of the court, after proper showing that the notice is for the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be recorded. Sec. 77. Cancellation of lis pendens before final judgment, a notice of lis pendens may be cancelled upon order of the court, after proper showing that the notice is for the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be registered. It may also be cancelled by the Register of Deeds upon verified petition of the party who caused registration thereof. Based on this principle as well as the express provisions of Sec. 14, Rule 13 of the 1997 Rules of Civil Procedure, as amended, only the particular property subject of litigation is covered by the notice of lis pendens. In justifying the cancellation of the notice of lis pendens, the trial court held that respondents unregistered deed of sale can not be accorded more weight than petitioners certificate of title. For purposes of annotating a notice of lis pendens, there is nothing in the rules which requires the party seeking annotation to show that the land belongs to him. In fact, there is no requirement that the party applying for the annotation of the notice must prove his right or interest over the property sought to be annotated. Hence, even on the basis of an unregistered deed of sale, a notice of lis pendens may be annotated on the title. And such annotation can not be considered as a collateral attack against the certificate of title. This is based on the principle that the registration of a notice of lis pendens does not produce a legal effect similar to a lien. It does not create a right or lien. It only means that a person purchases or contracts on the property in dispute subject to the result of the pending litigation. The Court observed that the trial judge was convinced that the cancellation of the lis pendens is not in order. Otherwise, he should not have required petitioners to post a bond of P2,000,000.00 The doctrine of lis pendens is founded upon reasons of public policy and necessity, the purpose of which is to keep the properties in litigation within the power of the court until the litigation is terminated and to prevent the defeat of the judgment or decree by subsequent alienation. This purpose would be rendered meaningless if petitioners are allowed to file a bond, regardless of the amount, in substitution of said notice. The Court held that the law does not authorize a judge to cancel a notice of lis pendens pending litigation upon the mere filing of sufficient bond by the party on whose title said notice is annotated.

Petitioners likewise insist that since respondent lost in the ejectment suit they filed against him, it follows that he also lost whatever right he has in the 200 square meter portion and that, therefore, he has no more right to be protected by the notice of lis pendens. It bears emphasis that respondent caused the registration of the notice of lis pendens in Civil Case No. 195-M-94 for quieting of title to his, 200 square meter lot, not in the ejectment case. Consequently, the notice of lis pendens annotated on TCT No. T-16375 must stay. Indeed, there is nothing in the records indicating that the notice of lis pendens is for the purpose of molesting herein petitioners or that it is not necessary to protect the rights of respondent. WHEREFORE , the petition is DENIED. The assailed Decision of the Court of Appeals is AFFIRMED. Costs against petitioners.

59. PO LAM vs. COURT OF APPEALS 316 SCRA 721, October 13, 1999 FACTS: On November 12, 1981, Lim filed in the same Civil Case No. 2953 a motion to annotate the said Resolution of the Court of Appeals of March 11, 1989 in G.R. No. 44770-R on the certificate of title of the spouses Po Lam. He likewise moved for the issuance of a writ of execution to enforce the said Resolution and for the execution in his favor of a deed of conveyance of the lots litigated upon. However, the said motions were all denied by the trial court in its Order dated February 4, 1982. On September 19, 1985, Lim again filed with the trial court in Civil Case 2953, a motion to include spouses Roy Po Lam and Josefa Ong Po Lam as party defendants in the case, as well as a motion to execute the March 11, 1981 Resolution of the Court of Appeals in AC G.R. No. 44770-R. On October 16, 1985, both motions were denied by the trial court and on appeal, in CA G. R. No. 08533-CV, the Court of Appeals upheld the Order of Denial. On October 29, 1990, Felix Lim assigned all his rights to and interest in subject properties to Jose Lee, (a lessee of a commercial building standing on Lot

No. 1557), who since then, has substituted Felix Lim as party plaintiff, now the private respondent. June 1970, after the herein petitioners bought subject lots from LACHO, the former leased the commercial building on Lot 1557 to the herein private respondent, Jose Lee. On December 19, 1993, the Metropolitan Trial Court of Legaspi City handed down its decision in the said unlawful detainer case, declaring the herein petitioners as the lawful owners of Lot 1557. On February 18, 1988, in G. R. No. 84145-55 (Lim vs. Court of Appeals),this Court ruled on Felix Lims appeal from CA-G.R. No. 12316-SP (unlawful detainer case) and from CA G. R. No. 08533-CV (which affirmed the October 16, 1985 Order of the trial court in Civil Case no. 2953). On January 14, 1992, the Regional Trial Court of Legaspi City decided Civil Case No 6767 affirmed the decisions rendered in AC-G. R. No. 44770-R promulgated on March 11, 1981. ISSUE: Whether or not the petitioners then be treated purchasers in good faith of Lot 1557 covered by TCT No. 2580 considering that the notice of lis pendens thereon had been already cancelled at the time of the sale. HELD: Yes. It is a firmly settled jurisprudence that a purchaser cannot close his eyes to facts which should put a reasonable man on guard and claim that he acted in good faith in the belief that there was no defect in the title of the vendor. His mere refusal to believe that such a defect exist, or his willful closing of his eyes to the possibility of the existence of a defect in his vendors title, will not make him innocent purchaser for value, if it develops afterwards that the title was in fact defective, and it appears that he had notice of such defect as would have led to its discovery had he acted with that measure of precaution which may reasonably be required of a prudent man in a like situation. In the case under consideration, there exist circumstances which should have placed the herein petitioners on guard. As aptly stressed upon by the respondent court, while it is true that when the petitioners purchased Lot 1557, the notice of lis pendens affecting said lot had been cancelled, it could not be denied that such inscription appears on the Transfer Certificate of Title of the said lot together with the cancellation of the notice of lis pendens.

This fact coupled with the non-cancellation of the notice of lis pendens on Transfer Certificate of Title No. 2581 covering Lot 1558, should have sufficiently alerted the petitioners vis-a-vis a possible defect in the title of LACHO, especially so that Lots 1557 and 1558 were simultaneously sold to the petitioners in a single deed of sale executed on May 28, 1969. Then too, considering that Lots 1557 and 1558 are prime commercial lots at the heart of the commercial district of Legaspi City, it is unbelievable that the petitioners who were assisted in purchasing the lots by Atty. Rodolfo Madrid (who during his time was a well-known lawyer of competence in the Province of Albay) would have released the purchase price of 700,000.00 without inquiring into the status of the subject lots. Verily, spouses Roy Po Lam and Josefa Ong Po Lam willfully closed their eyes to the possibility of a defect in the vendors (LACHO) title. The petitioners, very much aware of the pending litigation affecting the lots under controversy, gambled on the outcome of the litigation. Consequently, they cannot now be permitted to evade the outcome of the risk they assumed. Premises studiedly considered, the Court is of the ineluctable conclusion, and so holds, that the petitioners, Roy Po Lam and Josefa Ong Po Lam, are transferees pendente lite and therefore, not purchasers in good faith and are thus bound by the Resolution dated March 11, 1981 of the Court of Appeals in AC-G.R. No. 44770-R. WHEREFORE, the Petition is DENIED and the decision of the Court of Appeals in CA-G.R. CV No. 37452 AFFIRMED in toto. No pronouncement as to costs.