EN BANC

G.R. No. L-20611               May 8, 1969

AURELIO BALBIN and FRANCISCO BALBIN Petitioners, vs. REGISTER OF DEEDS OF ILOCOS SUR, Respondent.

MAKALINTAL, J.: chanrobles virtual law library

          Appeal from the resolution of the Commissioner of Land Registration in LRC Consulta No. 366.chanroblesvirtualawlibrary chanrobles virtual law library

          On November 15, 1961 petitioners presented to the register of deeds of Ilocos Sur a duplicate copy of the registered owner's certificate of title (OCT No. 548) and an instrument entitled "Deed of Donation inter-vivos," with the request that the same be annotated on the title. Under the terms of the instrument sought to be annotated one Cornelio Balbin, registered owner of the parcel of land described in OCT No. 548, appears to have donated inter-vivos an undivided two-thirds ( / ) portion thereof in favor of petitioners. The entire area of the land is 11.2225 ��hectares.chanroblesvirtualawlibrary chanrobles virtual law library

          The register of deeds denied the requested annotation for being "legally defective or otherwise not sufficient in law." It appears that previously annotated in the memorandum of encumbrances on the certificate are three separate sales of undivided portions of the land earlier executed by Cornelio Balbin in favor of three different buyers. The pertinent entries read:

Entry No. 5658.           Sales.

          Sale for the sum of P400.00 executed by the registered owner, conveying an undivided portion of an area of 3,710 square meters only in favor of Florentino Gabayan, this Original Certificate of Title No. 548 is hereby cancelled with respect to said area of 3,710 square meters and in lieu thereof, the name of the vendee ... is hereby substituted to succeed to all rights, participation in interest of the vendor. ...

Date of Instrument:           January 25, 1955, ...

x x x           x x x           x x x

Entry No. 5659.           Sale of portion.

          Sale for the sum of P100.00 executed by the registered owner, conveying an undivided portion of an area of 16,713 square meters in favor of Roberto Bravo, this Original Certificate of Title No. 548 is hereby cancelled with respect to said undivided portion ... and in lieu thereof the name of the vendee ... is hereby substituted to succeed to all rights, participation and interest of the vendor ...

Date of Instrument:           June 9, 1953. ...

Entry No. 5660.           Sale of portion.chanroblesvirtualawlibrary chanrobles virtual law library

          Sale for the sum of P400.00 executed by the registered owner, conveying an undivided portion of an area of 15,000 square meters in favor of Juana Gabayan, this Certificate of Title No. 548 is hereby cancelled with respect to said undivided portion ... and in lieu thereof the name of the vendee ... is hereby substituted to succeed to all rights, participation and interest of the vendor ...

Date of Instrument:           February 12, 1952. ...

          The final part of the annotations referring to the abovementioned sales contains an additional memorandum stating that "three co-owner's duplicate certificates of title No. 548 have been issued (by the register of deeds of Ilocos Sur) in the name of Florentino Gabayan, Roberto Bravo and Juana Gabayan upon verbal request of Mr. Andres Cabeldo, Notary Public of Caoayan, I. Sur, for and in the name of the vendees, this 5th day of January, 1956 at Vigan, I. Sur." Mainly because these three other co-owner's copies of the certificate of title No. 548 had not been presented by petitioners, the Register of Deeds refused to make the requested annotation.chanroblesvirtualawlibrary chanrobles virtual law library

          Unsatisfied, petitioners referred the matter to the Commissioner of Land Registration, who subsequently upheld the action of the Register of Deeds in a resolution dated April 10, 1962. With respect to the principal point in controversy, the Commissioner observed:

          (1) It appears that the donor is now merely a co-owner of the property described in the Original Certificate of Title No. 548, having previously sold undivided portions thereof on three different occasions in favor of three different buyers. Consequently, aside from the owner's duplicate issued to Cornelio Balbin, there are now three co-owner's duplicates which are presumably in the possession of the three buyers. Accordingly, in addition to the owner's duplicate of Original Certificate of Title No. 548, the three co-owner's duplicates must likewise be surrendered. The claim of counsel for the donees that the issuance of the three co-owner's duplicates was unauthorized is beside the point. Unless and until a court of competent jurisdiction rules to the contrary, these titles are presumed to have been lawfully issued.

          Without presenting those three (3) other duplicates of the title, petitioners would want to compel annotation of the deed of donation upon the copy in their possession, citing section 55 of Act 496, which provides that "the production of the owner's duplicate certificate of title whenever any voluntary instrument is presented for registration shall be conclusive authority from the registered owner to the register of deeds to make a memorandum of registration in accordance with such instrument." Under this provision, according to petitioners, the presentation of the other copies of the title is not required, first, because it speaks of "registered owner" and not one whose claim to or interest in the property is merely annotated on the title, such as the three vendees-co-owners in this case; and secondly, because the issuance of the duplicate copies in their favor was illegal or unauthorized.chanroblesvirtualawlibrary chanrobles virtual law library

          We find no merit in petitioners' contention. Section 55, supra, obviously assumes that there is only one duplicate copy of the title in question, namely, that of the registered owner himself, such that its production whenever a voluntary instrument is presented constitutes sufficient authority from him for the register of deeds to make the corresponding memorandum of registration. In the case at bar, the three other copies of the title were in existence, presumably issued under section 43 * of Act 496. As correctly observed by the Land Registration Commissioner, petitioners' claim that the issuance of those copies was unauthorized or illegal is beside the point, its legality being presumed until otherwise declared by a court of competent

jurisdiction. There being several copies of the same title in existence, it is easy to see how their integrity may be adversely affected if an encumbrance, or an outright conveyance, is annotated on one copy and not on the others. The law itself refers to every copy authorized to be issued as a duplicate of the original, which means that both must contain identical entries of the transactions, particularly voluntary ones, affecting the land covered by the title. If this were not so, if different copies were permitted to carry differing annotations, the whole system of Torrens registration would cease to be reliable.chanroblesvirtualawlibrary chanrobles virtual law library

          One other ground relied upon by the Land Registration Commissioner in upholding the action taken by the Register of Deeds of Ilocos Sur is that since the property subject of the donation is presumed conjugal, that is, property of the marriage of the donor, Cornelio Balbin, and his deceased wife, Nemesia Mina, "there should first be a liquidation of the partnership before the surviving spouse may make such a conveyance." This legal conclusion may appear too general and sweeping in its implications, for without a previous settlement of the partnership a surviving spouse may dispose of his aliquot share or interest therein - subject of course to the result of future liquidation. Nevertheless, it is not to be denied that, if the conjugal character of the property is assumed, the deed of donation executed by the husband, Cornelio Balbin, bears on its face an infirmity which justified the denial of its registration, namely, the fact that the two-thirds portion of said property which he donated was more than his one-half share, not to say more than what remained of such share after he had sold portions of the same land to three other parties.chanroblesvirtualawlibrary chanrobles virtual law library

          It appears that there is a case pending in the Court of First Instance of Ilocos Sur (CC No. 2221), wherein the civil status of the donor Cornelio Balbin and the character of the land in question are in issue, as well as the validity of the different conveyances executed by him. The matter of registration of the deed of donation may well await the outcome of that case, and in the meantime the rights of the interested parties could be protected by filing the proper notices of lis pendens.chanroblesvirtualawlibrary chanrobles virtual law library

          IN VIEW OF THE FOREGOING, the decisions of the Register of Deeds of Ilocos Sur and that of the Commissioner of Land Registration are affirmed. No pronouncement as to costs.

EN BANC

G.R. No. 5246 September 16, 1910

MANUELA GREY ALBA, ET AL., petitioners-appellants, vs. ANACLETO R. DE LA CRUZ, objector-appellee.

TRENT, J.: chanrobles virtual law library

These petitioners, Manuela, Jose, Juan, and Francisco, surnamed Grey y Alba, are the only heirs of Doña Segunda Alba Clemente and Honorato Grey, deceased. Remedios Grey y Alba, a sister of the petitioners, was married on the 21st day of March, 1903, to Vicente Reyes and died on the 13th of July, 1905, without leaving any heirs except her husband. The four petitioners, as coowners, sought to have registered the following-described property:

A parcel of land situated in the barrio of Talampas, municipality of Baliuag, Province of Bulacan, upon which are situated three houses and one camarin of light material, having a superficial area of 52 hectares, 51 ares, and 22 centares; bounded on the north by the highway (calzada) of

Talampas and the lands of Rita Ruiz Mateo; on the east by the lands of the said Rita Ruiz Mateo, Hermenegildo Prado, Policarpo de Jesus, and a stream called Sapang Buslut; on the south by the same stream and the lands of the capellania; and on the west by the stream called Sapang Buslut, and the lands of Vicente de la Cruz, Jose Camacho and Domingo Ruiz Mateo.

This parcel of agricultural land is used for the raising of rice and sugar cane and is assessed at $1,000 United States currency. The petition, which was filed on the 18th of December, 1906, was accompanied by a plan and technical description of the above-described parcel of land.chanroblesvirtualawlibrary chanrobles virtual law library

After hearing the proofs presented, the court entered, on the 12th of February, 1908, a decree in accordance with the provisions of paragraph 6 of section 54 of Act No. 926, directing that the land described in the petitioner be registered in the names of the four petitioners, as coowners, subject to the usufructuary right of Vicente Reyes, widower of Remedios Grey.chanroblesvirtualawlibrary chanrobles virtual law library

On the 16th of June, 1908, Anacleto Ratilla de la Cruz filed a motion in the Court of Land Registration asking for a revision of the case, including the decision, upon the ground that he is the absolute owner of the two parcels of land which are described in said motion, and which, according to his allegations, are included in the lands decreed to the petitioners. He alleged that the decree of February 12, 1908, was obtained maliciously and fraudulently by the petitioners, thereby depriving him of said two parcels of land. He further alleged that he was the absolute owner of the two parcels of land, having inherited them from his father, Baldomero R. de la Cruz, who had a state grant for the same. He therefore asked, under the provisions of section 38 of the Land Registration Act (No. 496), a revision of the case, and that the said decree be modified so as to exclude the two parcels of land described in said motion. The Land Court upon this motion reopened the case, and after hearing the additional evidence presented by both parties, rendered, on the 23rd of November, 1908, its decision modifying the former decree by excluding from the same the two parcels of land claimed by Anacleto Ratilla de la Cruz. From this decision and judgment the petitioners appealed and now insist, first, that the trial court erred in reopening the case and modifying its decree dated the 12th of February, 1908, for the reason that said decree was not obtained by means of fraud; and, second, that the court erred in holding that the two parcels of land described in the appellee's motion are not their property.chanroblesvirtualawlibrary chanrobles virtual law library

It was agreed by counsel that the two small parcels now in dispute forma part of the land described in the petition and were included in the decree of February 12, 1908, and that the petitioners are the owners of the remainder of the land described in the said decree.chanroblesvirtualawlibrary chanrobles virtual law library

The petitioners inherited this land from their parents, who acquired the same, including the two small parcels in question, by purchase, as is evidenced by a public document dated the 26th of November, 1864, duly executed before Francisco Iriarte, alcalde mayor and judge of the Court of First Instance of the Province of Bulacan.chanroblesvirtualawlibrary chanrobles virtual law library

Baldomero R. de la Cruz, father of the appellee, obtained in march, 1895, a state grant for several parcels of land, including the two parcels in question. This grant was duly inscribed in the old register of property in Bulacan on the 6th of April of the same year.chanroblesvirtualawlibrary chanrobles virtual law library

It is admitted that at the time the appellants presented their petition in this case the appellee was occupying the two parcels of land now in question. It is also admitted that the name of the appellee does not appear in the said petition as an occupant of the said two parcels. The petitioners insist that the appellee was occupying these parcels as their tenant and for this reason they did not include his name in their petition, as an occupant, while the appellee contends that he was occupying the said parcels as the absolute owner under the estate grant by inheritance.chanroblesvirtualawlibrary chanrobles virtual law library

The court below held that the failure on the part of the petitioners to include the name of the appellee in their petition, as an occupant of these two parcels of land, was a violation of section 21 of Act No. 496, and that this constituted fraud within the meaning of section 38 of said Land Registration Act. The trial court further held that the grant from the estate should prevail over the public document of purchase of 1864.chanroblesvirtualawlibrary chanrobles virtual law library

The mother of the petitioners died on November 15, 1881; their father died prior to that time. Manuela, the oldest of the petitioners, was about six years of age when their mother died. So these children were minors when the father of the appellee obtained the estate grant.chanroblesvirtualawlibrary chanrobles virtual law library

On the 13th of June, 1882, Jose Grey, uncle and representative of the petitioners, who were then minors, rented the land owned by the petitioners' deceased parents to one Irineo Jose for a period of three years. On the 23d of March, 1895, the said Jose Grey, as the representative of the petitioners, rented the same land for a period of six years to Baldomero R. de la Cruz, father of the appellee. This rental contract was duly executed in writing. This land was cultivated during these six years by Baldomero R. de la Cruz and his children, one of whom is the appellee. On the 14th of December, 1905, Jose Grey, for himself and the other petitioners, rented the same land to Estanislao R. de la Cruz for a period of two years. Estanislao de la Cruz on entering into this rental contract with Jose Grey did so for himself and his brothers, one of whom is the appellee. While the appellee admits that his father and brother entered into these rental contracts and did, in fact, cultivate the petitioners' land, nevertheless he insists that the two small parcels in question were not included in these contracts. In the rental contract between the uncle of the petitioners and he father of the appellee the land is not described. In the rental contract between Jose Grey, one of the petitioners, and Estanislao R. de la Cruz, brother of the appellee, the two small parcels of land in question are included, according to the description given therein. This was found to be true by the court below, but the said court held that as this contract was made by Estanislao R. de la Cruz it was not binding upon Anacleto R. de la Cruz, the appellee.chanroblesvirtualawlibrary chanrobles virtual law library

The two small parcels of land in question were purchased by the parents of the petitioners in 1864, as is evidenced by the public document of purchase and sale of that year. The same two parcels of land are included in the state grant issued in favor of Baldomero Ratilla de la Cruz in 1895. This grant was obtained after the death of the petitioners' parents and while they were minors. So it is clear that the petitioners honestly believed that the appellee was occupying the said parcels as their lessee at the time they presented their application for registration. They did not act in bad faith, nor with any fraudulent intent, when they omitted to include in their application the name of the appellee as one of the occupants of the land. They believed that it was not necessary nor required that they include in their application the names of their tenants. Under these circumstances, did the court below commit an error in reopening this case in June, 1908, after its decree had been entered in February of the same year?chanrobles virtual law library

The application for the registration is to be in writing, signed and sworn to by the applicant, or by some person duly authorized in his behalf. It is to contain an accurate description of the land. It shall contain the name in full and the address of the applicant, and also the names and addresses of all occupants of land and of all adjoining owners, if known; and, if not known, it shall state what search has been made to find them. In the form of notice given by statute, which shall be sworn to, the applicant is required to state and set forth clearly all mortgages or encumbrances affecting said land, if any, the rights and interests, legal or equitable, in the possession, remainder, reversion, or expectancy of all persons, with their names in full, together with their place of residence and post office addresses. Upon receipt of the application the clerk shall cause notice of the filling to be published twice in the Official Gazette. This published notice shall be directed to all persons appearing to have an interest in the land sought to be registered and to the adjoining owners, and also "to all whom it may concern." In addition to the notice in the Official Gazette the Land Court shall, within seven days after said publication, cause a copy of the notice, in Spanish, to be mailed by the clerk to every person named in the application whose address is known; to cause a duly attested copy of the notice, in Spanish, to be posted in a conspicuous place on every parcel of land included in the application, and in a conspicuous place on the chief municipal building of the town in which the land is situated. The court may also cause other or further notice of the application to be given in such manner and to such persons as it may deem proper. The certificate of the clerk that he has served the notice as directed by the court by publication or mailing shall be conclusive proof of such service. Within the time allowed in the notices, if no person appears and answers, the court may at once, upon motion of the applicant, no reason to the contrary appearing, order a general default. By the description in the published notice "to all whom it may concern," and by express provisions of law "all the word are made parties defendant and shall be concluded by the default an order." If the court, after hearing, finds that the applicant has title, as stated in his application, a decree or registration shall be entered.

Every decree of registration shall bind the land and quiet title thereto, subject only to the exceptions stated in the following section. It shall be conclusive upon and against all persons, including the Insular Government, and all the branches thereof, whether mentioned by name in the application, notice, or citation, or included in the general description "to all whom it may concern." Such decree shall not be opened by reason of the absence, infancy, or other disability of any person affected thereby, nor by any proceedings in any court for reversing judgments or decrees; subject, however, to the right of any person deprived of land or of any estate or interest therein by decree of registration obtained by fraud to file in the Court of Land Registration a petition for review within one year. . . . (Sec. 38 of Act No. 496.)

The appellee is not included in any of the exceptions named in section 38 referred to above.chanroblesvirtualawlibrary chanrobles virtual law library

It will be seen that the applicant is required to mention not only the outstanding interest which he admits but also all claims of interest, though denied by him. By express provision of law the world are made parties defendant by the description in the notice "to all whom it may concern."chanrobles virtual law library

Although the appellee, occupying the two small parcels of land in question under the circumstances as we have set forth, was not served with notice, he was made a party defendant by publication; and the entering of a decree on the 12th of February, 1908, must be held to be conclusive against all persons, including the appellee, whether his (appellee's) name is mentioned in the application, notice, or citation.chanroblesvirtualawlibrary chanrobles virtual law library

The said decree of February 12, 1908, should not have been opened on account of the absence, infancy, or other disability of any person affected thereby, and could have been opened only on the ground that the said decree had been obtained by fraud. That decree was not obtained by fraud on the part of the applicants, inasmuch as they honestly believed that the appellee was occupying these two small parcels of land as their tenant. One of the petitioner went upon the premises with the surveyor when the original plan was made.chanroblesvirtualawlibrary chanrobles virtual law library

Proof of constructive fraud is not sufficient to authorize the Court of Land Registration to reopen a case and modify its decree. Specific, intentional acts to deceive and deprive anther of his right, or in some manner injure him, must be alleged and proved; that is, there must be actual or positive fraud as distinguished from constructive fraud.chanroblesvirtualawlibrary chanrobles virtual law library

The question as to the meaning of the word "fraud" in the Australian statutes has been frequently raised. Two distinctions have been noted by the Australian courts; the first is the distinction between the meaning of the word "fraud" in the sections relating to the conclusive effect of certificates of title, and its meaning in the sections relating to the protection of bona fide purchasers from registered proprietors. The second is the distinction between "legal," "equitable," or "constructive" fraud, and "actual" or "moral" fraud. In none of the groups of the sections of the Australian statutes relating to the conclusive effect of certificates of title, and in which fraud is referred to, is there any express indication of the meaning of "fraud," with the sole exception of that of the South Australian group. (Hogg on Australian Torrens System, p. 834.)

With regard to decisions on the sections relating to the conclusive effect of certificates of title, it has been held in some cases that the "fraud" there mentioned means actual or moral fraud, not merely constructive or legal fraud. In other cases "fraud" has been said to include constructive, legal, and every kind of fraud. In other cases, against, knowledge of other persons' right, and the deliberate acquisition of registered title in the face of such knowledge, has been held to be "fraud" which rendered voidable the certificates of title so obtained; and voluntary ignorance is, for this purpose, the same as knowledge. But in none of these three classes of cases was there absent the element of intention to deprive another of just rights, which constitutes the essential characteristics of actual - as distinguished from legal-fraud. (Id., p. 835, and cases cited in notes Nos. 85, 86, 87, 88, and 89 at bottom of pages 835 and 836.)

By "fraud" is meant actual fraud-dishonesty of some sort. (Judgment of Privy Council in Assets Co. vs. Mere Roihi, and Assets Co. vs. Panapa Waihopi, decided in March, 1905, cited by Hogg in his Supplementary Addendum to his work on Australian Torrens System, supra.) The same meaning should be given to the word "fraud" used in section 38 of our statutes (Act No. 496).chanroblesvirtualawlibrary chanrobles virtual law library

The question as to whether any particular transaction shows fraud, within the meaning of the word as used in our statutes, will in each case be a question of fact. We will not attempt to say what acts would constitutes this kind of fraud in other cases. This must be determined from the fact an circumstances in each particular case. The only question we are called upon to determine, and have determined, is whether or not, under the facts and circumstances in this case, the petitioners did obtain the decree of February 12, 1908, by means of fraud.chanroblesvirtualawlibrary chanrobles virtual law library

It might be urged that the appellee has been deprived of his property without due process of law, in violation of section 5 of the Act of Congress of July 1, 1902, known as the Philippine Bill," which provides "that no law shall be enacted in the said Islands which shall deprive any person of life, liberty, or property without due process of law."chanrobles virtual law library

The Land Registration Act requires that all occupants be named in the petition and given notice by registered mail. This did not do the appellee any good, as he was not notified; but he was made a party defendant, as we have said, by means of the publication "to all whom it may concern." If this section of the Act is to be upheld this must be declared to be due process of law.chanroblesvirtualawlibrary chanrobles virtual law library

Before examining the validity of this part of the Act it might be well to note the history and purpose of what is known as the "Torrens Land Registration System." This system was introduced in South Australia by Sir Robert Torrens in 1857 and was there worked out in its practicable form.chanroblesvirtualawlibrary chanrobles virtual law library

The main principle of registration is to make registered titles indefeasible. As we have said, upon the presentation in the Court of Land Registration of an application for the registration of the title to lands, under this system, the theory of the law is that all occupants, adjoining owners, adverse claimants, and other interested persons are notified of the proceedings, and have have a right to appear in opposition to such application. In other words, the proceeding is against the whole word. This system was evidently considered by the Legislature to be a public project when it passed Act No. 496. The interest of the community at large was considered to be preferred to that of private individuals.

At the close of this nineteenth century, all civilized nations are coming to registration of title to land, because immovable property is becoming more and more a matter of commercial dealing, and there can be no trade without security. (Dumas's Lectures, p. 23.)chanrobles virtual law library

The registered proprietor will no longer have reasons to fear that he may evicted because his vendor had, unknown to him, already sold the and to a third person. . . The registered proprietor may feel himself protected against any defect in his vendor's title. (Id., p. 21.)chanrobles virtual law library

The following summary of benefits of the system of registration of titles, made by Sir Robert Torrens, has been fully justified in its use:chanrobles virtual law library

First. It has substituted security for insecurity.chanroblesvirtualawlibrary chanrobles virtual law library

Second. It has reduced the costs of conveyances from pounds to shillings, and the time occupied from months to days.chanroblesvirtualawlibrary chanrobles virtual law library

Third. It has exchanged brevity and clearness for obscurity and verbiage.chanroblesvirtualawlibrary chanrobles virtual law library

Fourth. It has so simplified ordinary dealings that he who has mastered the "three R's" can transact his own conveyancing.chanroblesvirtualawlibrary chanrobles virtual law library

Fifth. It affords protection against fraud.chanroblesvirtualawlibrary chanrobles virtual law library

Sixth. It has restored to their just value many estates held under good holding titles, but depreciated in consequence of some blur or technical defect, and has barred the reoccurrence of any similar faults. (Sheldon on Land Registration, pp. 75, 76.)chanrobles virtual law library

The boldest effort to grapple with the problem of simplification of title to land was made by Mr. (afterwards Sir Robert) Torrens, a layman, in South Australia in 1857. . . . In the Torrens system title by registration takes the place of "title by deeds" of the system under the "general" law. A sale of land, for example, is effected by a registered transfer, upon which a certificate of title is issued. The certificate is guaranteed by statute, and, with certain exceptions, constitutes indefeasible title to the land mentioned therein. Under the old system the same sale would be effected by a conveyance, depending for its validity, apart from intrinsic flaws, on the correctness of a long series of prior deeds, wills, etc. . . . The object of the Torrens system, them, is to do away with the delay, uncertainty, and expense of the old conveyancing system. (Duffy & Eagleson on The Transfer of Land Act, 1890, pp. 2, 3, 5, 7.)chanrobles virtual law library

By "Torrens" system generally are meant those systems of registration of transactions with interest in land whose declared object . . . is, under governmental authority, to establish and certify to the ownership of an absolute and indefeasible title to realty, and to simplify its transfer. (Hogg on Australian Torrens system, supra, pp. 1, 2.)

Compensation for errors from assurance funds is provided in all countries in which the Torrens system has been enacted. Cases of error no doubt will always occur. The percentage of errors, as compared with the number of registered dealings in Australia, is very small. In New South Wales there were, in 1889, 209, 894 registered dealings, the average risk of error being only 2 cents �for each dealing. In Queensland the risk of error was only 1 cents, the number of registered �dealings being 233,309. In Tasmania and in Western Australia not a cent was paid for compensation for errors during the whole time of operation, (Dumas's Lectures, supra, p. 96.) This system has been adopted in various countries of the civilized world, including some of the States of the American Union, and practical experience has demonstrated that it has been successful as a public project.chanroblesvirtualawlibrary chanrobles virtual law library

The validity of some of the provisions of the statutes adopting the Torrens system has been the subject of judicial decision in the courts of the United States. (People vs. Chase, 165 Ill., 527; State vs. Guilbert, 56 Ohio St., 575; People vs. Simon, 176 Ill., 165; Tyler vs. Judges, 175 Mass., 71.)chanrobles virtual law library

Act No. 496 of the Philippine Commission, known as the "Land Registration Act," was copied substantially from the Massachussetts law of 1898.chanroblesvirtualawlibrary chanrobles virtual law library

The Illinois and Massachusetts statutes were upheld by the supreme courts of those States.

It is not enough to show a procedure to be unconstitutional to say that we never heard of it before. (Tyler vs. Judges, supra; Hurtado vs. California, 110 U. S., 516.)chanrobles virtual la

Cadastral

w library

Looked at either from the point of view of history or of the necessary requirements of justice, a proceeding in rem dealing with a tangible res may be instituted and carried to judgment without personal service upon claimants within the State or notice by name to those outside of it, and not encounter any provision of either constitution. Jurisdiction is secured by the power of the court over the res. As we have said, such a proceeding would be impossible, were this not so, for it hardly would do to make a distinction between the constitutional rights of claimants who were known and those who were not known to the plaintiff, when the proceeding is to bar all. (Tyler vs. Judges, supra.)

This same doctrine is annunciated in Pennoyer vs. Neff (95 U. S., 714); The Mary (9 Cranch, 126); Mankin vs. Chandler (2 Brock., 125); Brown vs. Levee Commission (50 Miss., 468); 2 Freeman, Judgments, 4th ed., secs. 606, 611.

If the technical object of the suit is to establish a claim against some particular person, with a judgment which generally, in theory at least, binds his body, or to bar some individual claim or objection, so that only certain persons are entitled to be heard in defense, the action is in personam, although it may concern the right to or possession of a tangible thing. If, on the other hand, the object is to bar indifferently all who might be minded to make an objection of any sort against the right sought to be established, and if anyone in the world has a right to be heard on the strenght of alleging facts which, if true, show an inconsistent interest, the proceeding is in rem. (Tyler vs. Judges, supra.)

In the case of Hamilton vs. Brown (161 U. S., 256) a judgment of escheat was held conclusive upon persons notified by advertisement to all persons interested. In this jurisdiction, by the provisions of the Code of Civil Procedure, Act No. 190, a decree allowing or disallowing a will binds everybody, although the only notice of the proceedings given is by general notice to all persons interested.chanroblesvirtualawlibrary chanrobles virtual law library

The supreme court Massachusetts, in the case of Tyler vs. Judges (supra), did not rest its judgment as to the conclusive effect of the decree upon the ground that the State has absolute power to determine the persons to whom a man's property shall go at his death, but upon the characteristics of a proceeding in rem. So we conclude that the proceedings had in the case at bar, under all the facts and circumstances, especially the absolute lack on the part of the petitioners of any dishonest intent to deprive the appellee of any right, or in any way injure him, constitute due process of law.chanroblesvirtualawlibrary chanrobles virtual law library

As to whether or not the appellee can succesfully maintain an action under the provisions of sections 101 and 102 of the Land Registration Act (secs. 2365, 2366, Compilation) we do not decide.chanroblesvirtualawlibrary chanrobles virtual law library

For these reasons we are of the opinion, and so hold, that the judgment appealed from should be, and the same is hereby reversed and judgment entered in favor of the petitioners in conformity with the decree of the lower court of February 12, 1908, without special ruling as to costs. It is so ordered.chanroblesvirtualawlibrary chanrobles virtual law library

Arellano, C.J., Torres, Johnson and Moreland, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-67742 October 29, 1987

MELITON GALLARDO and TERESA VILLANUEVA, Petitioners, vs. HONORABLE INTERMEDIATE APPELLATE COURT, MARTA VILLANUEVA VDA. DE AGANA,

VISITACION AGANA KIPPING, PEDRO V. AGANA, MARCELO V. AGANA, JR., TERESITA AGANA SANTOS and JESUS V. AGANA, Respondents.chanrobles virtual law

library

 

PARAS, J.: chanrobles virtual law library

This is a petition for review on certiorari seeking to set aside or reverse the decision * of the Intermediate Appellate Court (now Court of Appeals) promulgated on May 22, 1984 in AC-G.R. CV No. 69946 entitled Meliton Gallardo and Teresa Villanueva v. Marta Villanueva vda. de Agana, et al. (Rollo, p. 37) affirming the decision ** of the Court of First Instance of Laguna 8th Judicial District, Branch II, Sta. Cruz, Laguna (now Regional Trial Court, Sta. Cruz, Laguna) dated January 20, 1982, which dismissed the complaint for Quieting of Title in Civil Case No. SC-1492 and declared the plaintiff's (petitioner's herein) Re-constituted Transfer Certificate of Title RT-6293 (No. 23350) as null and void (Record on Appeal, pp. 215-216).chanroblesvirtualawlibrary chanrobles virtual law library

The dispositive portion of the questioned decision reads as follows:

WHEREFORE, the appealed judgment is in full accord with the evidence and the law and is hereby therefore affirmed in all its part. Costs against plaintiff -appellants chanrobles virtual law library

SO ORDERED.

The subject matter of this controversy involves a parcel of land situated in Cavinti, Laguna consisting of 81,300 square meters, more or less, initially covered by an original Certificate of Title No. 2262, issued on April 2, 1924 owned and registered in the name of the late Pedro Villanueva (former Justice of the Peace of the Municipal Court, Cavinti, Laguna), pursuant to Decree No. 150562 issued in L.R.C. Cadastral Record No. 136, Cad. Case No. 1 (Record on Appeal; Answer, p. 28).chanroblesvirtualawlibrary chanrobles virtual law library

Petitioners were nephew and niece of the late Pedro Villanueva and first cousin of the private respondent Marta Villanueva vda. de Agana, the latter being the daughter of Pedro Villanueva.chanroblesvirtualawlibrary chanrobles virtual law library

On August 10, 1937, petitioner claimed that the aforestated land was sold to them in a private document, an unnotarized deed of sale written in Tagalog (Annex "B" of the complaint) that was

allegedly signed by the late Pedro Villanueva conveying and transfering the property in question in favor of the petitioners (Record on Appeal, Exhibit "B", pp. 9-10) which deed is reproduced as follows.

Ako, Pedro Villanueva, 66 taong gulang, balo at nananahanan sa municipio ng Cavinti, lalawigang Laguna at Kapuluang Pilipinas, alang-alang sa halagang LIMANG DAANG PISO (P500.00) salaping filipino, na sa akin ibinayad ng mag-asawa ni Meliton Gallardo at Teresa Villanueva, tagarito rin sa nasabing municipio, lalawigang at kapulwan sa hinaharap ng kasulatan ay sinasaysay ko na aking inilillwat at pinagbili ng biling patuluyan sa nasabing mag-asawa Meliton Gallardo at Teresa Villanueva, sampo na sa kanilay mangagmamana at hahalili, ang aking isang palagay na lupa na nabubuo sa limang luang na tubigan, punlang kalahating kabang palay at saka dalatan o katihan na may isang kabang palay na hasik, tumatayo sa nayon ng Kanlurang Talaongan, sakop nitong municipio ng Cavinti at napapaloob sa mga hangganang sumusunod: chanrobles virtual law library

HILAGAAN, Braulio Villanueva at Modesto Ribera chanrobles virtual law library

SILANGAN, Braulio Villanueva.chanroblesvirtualawlibrary chanrobles virtual law library

TIMUGAN, Braulio Villanueva, Ilog Kaliraya at Jacinto Toque chanrobles virtual law library

KANLURAN, Jacinto Toque.chanroblesvirtualawlibrary chanrobles virtual law library

Ang pagaaring ito ay tunay kong pananarili sapagkat aking nabili sa magkakapatid na Aniano Gallardo, Zacarias Gallardo at Perfecto Gallardo at natatala sa Registro ng Amillarmiento dito sa Cavinti sa ilalim ng Blg. 22888, at walang ano mang ipinagkakautang ni pinanagutan kaya at magagamit na nitong aking pinagbilhan ang kanilang matuwid na maipamana at mailiwa sa iba. Gayon ding sinasaysay ko na akoy umaakong mananagutan dito sa aking pinagbilhan, tungkol sa pagaaring ito na ang katibay ay aking ipagsasanggalang laban sa kanino mang maghahabol.chanroblesvirtualawlibrary chanrobles virtual law library

Dapat tantoin, gayon man, na ang pagaaring ito ay registrado na sa Registro de la Propiedad nitong lalawigang Laguna, subalit at sa isang kamalian ng pagkakasukat tungkol sa lawak at laki, ay hindi pa natutubos ang kanyang titulo, kaya at kung maisaayos na ang nasabing titulo ay saka na ipatatala sa pangalan nitong aking pinagbilhan upang lalong malagay sa katahimikan itong aking pinagbilhan.chanroblesvirtualawlibrary chanrobles virtual law library

At sa katunayan ay nilagdaan ko ang kasulatang ito dito sa municipio ng Cavinti, Laguna, ngayong ika sampung araw ng Agosto taong isanglibo siyam na daan at tatlompu at pito (1937).chanroblesvirtualawlibrary chanrobles virtual law library

(LGD) PEDRO VILLANUEVA chanrobles virtual law library

Nagfirma sa hinaharap ni chanrobles virtual law library

(LGD) BALTAZAR VILLANUEVA chanrobles virtual law library

JUAN VILLANUEVA

Subsequently, the Original Certificate of Title was cancelled on the basis of the private document of sale (Exhibit "B") and a new certificate of title was issued in the name of the petitioners covered by Transfer Certificate of Title No. RT- 6293 (No. 23350) on January 4, 1944, particularly describing the land as follows:

A parcel of land (Lot No. 401 of the Cadastral Survey of Cavinti) with the improvements thereon, situated in the municipality of Cavinti, Bounded on the N and NE., by Lot No. 403; on the SE by Lot No. 393 and the Caliraya River; and on the SW by Lot No. 515. Area - Eighty One Thousand and Three Hundred (81,300) Square Meters, more or less. (Record on Appeal, Annex "A," pp. 7 and 9).

During the Second World War, the records as well as the Office of the Register of Deeds of Laguna, where the original of their new transfer certificate of title was kept, were completely burned. Accordingly, by virtue of an Affidavit of Reconstitution dated December 2, 1958 (Record on Appeal, Annex "DD," pp. 41-42) and upon presentation of the Owner's Duplicate Certificate of Title, the title was administratively reconstituted and the Register of Deeds of Laguna issued Transfer Certificate of Title No. RT-6293 (No. 23350) in the name of the petitioners (Record on Appeal, Annex "B", pp. 7).chanroblesvirtualawlibrary chanrobles virtual law library

On November 17, 1976, defendant Marta Villanueva together with Pedro Villanueva, Jr., and Restituto R. Villanueva executed and filed an Affidavit of Adverse Claim with the Office of the Register of Deeds of Laguna (Record on Appeal, Annex "C", pp. 10-13). However, on December 6, 1976 a joint affidavit was filed by Pedro G. Villanueva, Jr. and Restituto Villanueva withdrawing their adverse claim on the said parcel of land, with the Office of the Register of Deeds of Laguna (Record on Appeal, Annex " D, " pp. 13-14).chanroblesvirtualawlibrary chanrobles virtual law library

When petitioners learned of this Affidavit of Adverse Claim, attempt was made to settle said controversy amicably. Several demands made by herein petitioners upon private respondents Marta Vda. de Agana to withdraw her adverse claim, failed.chanroblesvirtualawlibrary chanrobles virtual law library

On December 9, 1976, said private respondent executed a Deed of Conveyance and Release of Claim (Record on Appeal and Annex "AA", p. 35) wherein the parties agreed, among other things, to the following:

That in consideration of the said transfer and conveyance over a 1,000 square meter portion mentioned in the next preceding paragraph, the VENDEE (Marta V. Agana) does hereby withdraw the adverse claim mentioned above; (Rollo, p. 119).

However, when private respondent Marta Villanueva vda. de Agana refused to sign an Affidavit of Quit-claim (Exhibit "9; " Record on appeal, p. 195), petitioners instituted court suit against the private respondent and her husband, Dr. Marcelo S. Agana, Sr. by filing a complaint for Quieting of Title and Damages with the Court of First Instance of Laguna on February 3, 1977, demanding that their title over the questioned land be fortified by a declaration of ownership in their favor and avoiding the af/recited Deed of Conveyance and Release of Claim (Record on Appeal, pp. 1-7). Accordingly, private respondents in their answer countered that the Deed of Sale in Tagalog and petitioners' title over the land be declared void ab initio, among other demands (Record on Appeal, pp. 16-35).chanroblesvirtualawlibrary chanrobles virtual law library

On January 20, 1982, the Court of First Instance of Laguna rendered its decision declaring the deed of sale of August 10, 1937, as well as the reconstituted transfer certificate of title of petitioners, void ab initio Record on Appeal, pp. 208-216).chanroblesvirtualawlibrary chanrobles virtual law library

The dispositive portion of said decision (Record on Appeal, pp. 215-216) reads as follows:

WHEREFORE, judgment is hereby rendered in favor of the defendants and against the plaintiffs, as follows:

a. declaring as null and void the private document dated August 10, 1937 written in Tagalog (Exhibit B); chanrobles virtual law library

b. declaring as null and void plaintiffs' reconstituted Transfer Certificate of Title RT-6293 (No. 23350) (Exhibit F) and ordering the Register of Deeds of Laguna to issue a new reconstituted or to reinstate Original Certificate of Title No. 2262 issued on April 2, 1924 in the name of Pedro Villanueva within thirty (30) days from the finality of this decision; chanrobles virtual law library

c. declaring the heirs of Pedro Villanueva as the owners of the property in litigation and ordering the plaintiffs and her agents and those acting for in their behalf to vacate the land in question and surrender the possession of the same to the heirs of the late Pedro Villanueva thru Marta V. Agana; chanrobles virtual law library

d. declaring all buildings; plantings and improvements introduced by the plaintiffs forfeited in favor of' the defendants: chanrobles virtual law library

e. ordering plaintiffs, jointly and severally, to pay the defendants the sum of P10,000.00 as moral and exemplary damages; chanrobles virtual law library

f. ordering plaintiffs, jointly and severally, to pay defendants the sum of P5,000.00 as and for attorney's fees: and chanrobles virtual law library

g. ordering plaintiffs, jointly and severally, to pay defendants the sum of P5,000.00 as litigation expenses; and costs of suit.chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED.

Thus, petitioners filed notice of appeal on February 10, 1982, followed by an appeal made to the Intermediate Appellate Court. However, the Intermediate Appellate Court, on May 22, 1984, affirmed in toto the decision of the trial court.chanroblesvirtualawlibrary chanrobles virtual law library

Hence, this petition.chanroblesvirtualawlibrary chanrobles virtual law library

On August 30, 1984, the Court in its Resolution without giving due course to the petition required the respondents to comment on the said petition (Rollo, p. 50). However, the counsel for private respondents failed to file comment on the petition for review on certiorari within the period which expired on September 17, 1984. Thus, in the Resolution of January 7, 1985 the Court, required

counsel for petitioners to show cause why disciplinary action should not be taken against him (Rollo, p. 51).chanroblesvirtualawlibrary chanrobles virtual law library

On February 23, 1985 respondents filed their comment (Rollo, p. 57). Considering respondents' comment as answer the petition was given due course and the parties were required to submit their respective memoranda (Rollo, p. 104).chanroblesvirtualawlibrary chanrobles virtual law library

Private respondents and petitioners filed their respective memoranda on May 18, 1985 (Rollo, p. 117) and on June 7, 1985 (Rollo, p. 143) respectively. On July 1, 1985, the Court resolved to consider the case submitted for deliberation (Rollo, p. 168).chanroblesvirtualawlibrary chanrobles virtual law library

Petitioners, however filed a Supplemental Memorandum, with leave of court on May 18, 1987 (Rollo, p. 169) which was noted by the court in its resolution dated June 19, 1987 (Rollo, p. 188).chanroblesvirtualawlibrary chanrobles virtual law library

In its petition petitioners raised the following assignment of errors, to wit: chanrobles virtual law library

I chanrobles virtual law library

THE TRIAL COURT ERRED IN HOLDING THAT EXHIBIT B DOES NOT TRANSFER OWNERSHIP, THE SAME BEING NULL AND VOID.chanroblesvirtualawlibrary chanrobles virtual law library

II chanrobles virtual law library

THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANTS-APPELLANTS ARE NOT GUILTY OF LACHES.chanroblesvirtualawlibrary chanrobles virtual law library

III chanrobles virtual law library

THE TRIAL COURT ERRED IN HOLDING THAT PLAINTIFF- APPELLANTS CANNOT ACQUIRE OWNERSHIP OF SUBJECT LAND BY PRESCRIPTION UPON THE PRINCIPLE THAT NO TITLE TO REGISTERED LAND IN DEROGATION OF THAT OF THE REGISTERED OWNER SHALL BE ACQUIRED BY PRESCRIPTION.chanroblesvirtualawlibrary chanrobles virtual law library

IV chanrobles virtual law library

THE TRIAL COURT ERRED IN NOT HOLDING THAT STATUTE OF LIMITATION HAS SET INTO THIS CASE; AND, chanrobles virtual law library

V chanrobles virtual law library

THE TRIAL COURT ERRED IN DECLARING TRANSFER CERTIFlCATE OF TITLE NO. RT-6293 AS NULL AND VOID.chanroblesvirtualawlibrary chanrobles virtual law library

The pivotal issue in this case is whether or not there was a valid reconstitution of Transfer Certificate of Title No. RT-6293 (No. 23350) issued in the names of petitioners.chanroblesvirtualawlibrary chanrobles virtual law library

It is admitted that the land in question is formerly covered by Original Certificate of Title No. 2262, issued in the name of Pedro Villanueva and that the cancellation of said OCT No. 2262 and the issuance of the reconstituted Transfer Certificate of Title No. RT-6293 (No. 23350) are based either on the Affidavit for Reconstitution of Teresa Villanueva and not of Pedro Villanueva, or the unnotarized deed of sale of August 10, 1937 (Annex "B" for plaintiffs), held void by the lower court and by the Court of Appeals. As a consequence TCT No. RT-6293 (No. 23350) was likewise held void ab initio. (Record on Appeal, p. 20).chanroblesvirtualawlibrary chanrobles virtual law library

As to the validity of the Affidavit for Reconstitution, affiant Teresa Villanueva testified on December 19, 1980, that she did not know anything about the reconstitution of their title as it was their children who took charge of the same and that she never participated in the said reconstitution. In fact she never appeared before the Notary Public and this testimony was corroborated by the testimony of Eleuterio Rebenque, entry clerk in the Office of the Register of Deeds who never made any categorical affirmation that said Teresa Villanueva appeared at said office. (Rollo, p. 43).chanroblesvirtualawlibrary chanrobles virtual law library

Consequently, the crux of the matter now centers on whether or not the unnotarized deed of sale purportedly executed on August 10, 1937 by the primitive owner Pedro Villanueva, in favor of petitioners, can be considered as a valid instrument for effecting the alienation by way of sale of a parcel of land registerd under the Torrens System. Corollary thereto, it becomes necessary to examine other matters surrounding the execution of the alleged document of sale (Exhibit B).chanroblesvirtualawlibrary chanrobles virtual law library

Petitioners claim that the sale although not in a public document, is nevertheless valid and binding citing this Court's rulings in the cases of Cauto v. Cortes, 8 Phil. 459, 460; Guerrero v. Miguel, 10 Phil. 52, 53; Bucton v. Gabar 55 SCRA 499 wherein this Court ruled that even a verbal contract of sale of real estate produces legal effects between the parties.chanroblesvirtualawlibrary chanrobles virtual law library

The contention is unmeritorious.chanroblesvirtualawlibrary chanrobles virtual law library

As the respondent court aptly stated in its decision:

True, as argued by appellants, a private conveyance of registered property is valid as between the parties. However, the only right the vendee of registered property in a private document is to compel through court processes the vendor to execute a deed of conveyance sufficient in law for purposes of registration. Plaintiffs-appellants' reliance on Article 1356 of the Civil Code is unfortunate. The general rule enunciated in said Art. 1356 is that contracts are obligatory, in whatever form they may have been entered, provided all the essential requisites for their validity are present. The next sentence provides the exception, requiring a contract to be in some form when the law so requires for validity or enforceability. Said law is Section 127 of Act 496 which requires, among other things, that the conveyance be executed "before the judge of a court of record or clerk of a court of record or a notary public or a justice of the peace, who shall certify such acknowledgment substantially in form next hereinafter stated." chanrobles virtual law library

Such law was violated in this case. The action of the Register of Deeds of Laguna in allowing the registration of the private deed of sale was unauthorized and did not lend a bit of validity to the defective private document of sale.

With reference to the special law, Section 127 of the Land Registration Act, Act 496 (now Sec. 112 of P.D. No. 1529) provides:

Sec. 127. Deeds of Conveyance, ... affecting lands, whether registered under this act or unregistered shall be sufficient in law when made substantially in accordance with the following forms, and shall be as effective to convey, encumber, ... or bind the lands as though made in accordance with the more prolix forms heretofore in use: Provided, That every such instrument shall be signed by the person or persons executing the same, in the presence of two witnesses, who shall sign the instrument as witnesses to the execution thereof, and shall be acknowledged to be his or their free act and deed by the person or persons executing the same, before the judge of a court of record or clerk of a court of record, or a notary public, or a justice of the peace, who shall certify to such acknowledgement substantially in the form next hereinafter stated. (Emphasis supplied).

It is therefore evident that Exhibit " E " in the case at bar is definitely not registerable under the Land Registration Act.chanroblesvirtualawlibrary chanrobles virtual law library

Likewise noteworthy is the case of Pornellosa and Angels v. Land Tenure Administration and Guzman, 110 Phil. 986, where the Court ruled:

The deed of sale (Exhibit A), allegedly executed by Vicente San Jose in favor of Pornellosa is a mere private document and does not conclusively establish their right to the parcel of land. WhiIe it is valid and binding upon the parties with respect to the sale of the house erected thereon, yet it is not sufficient to convey title or any right to the residential lot in litigation. Acts and contracts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property must appear in a public document.

Upon consideration of the facts and circumstances surrounding the execution of the assailed document, the trial court found that said private document (Exhibit "B") was null and void and that it was signed by somebody else not Pedro Villanueva. Such findings of fact besides being based on the records, were sustained by the Court of Appeals.chanroblesvirtualawlibrary chanrobles virtual law library

The contention that ownership over registered property may be acquired by prescription or adverse possession is absolutely without merit. No title to registered land in derogation of that of the registered owner shall be acquired by prescription or adverse possession. Prescription is unavailing not only against the registered owner but also against his hereditary successors (Umbay vs. Alecha, 135 SCRA 427 [1985]). The right to recover possession of registered land is imprescriptible because possession is a mere consequence of ownership (Umbay vs. Alecha, supra, citing Atun v. Nuñuz 97 Phil. 762; Manlapas and Tolentino v. Llorente, 48 Phil. 298, 308: J.M. Tuazon & Co., Inc. v. Aguirre, 117 Phil. 110, 113-114) where land has been registered under the Torrens System (Alarcon v. Bidin, 120 SCRA 390; Umbay v. Alecha, supra) because the efficacy and integrity of the Torrens System must be protected (Director of Lands v. CA, 120 SCRA 370). As prescription is rightly regarded as a statute of repose whose objective is to suppress fraudulent and stale claims from springing up at great distances of time and suprising the parties or their representatives when the facts have become obscure from the lapse of time or the

defective memory or death or removal of witnesses ( Senoan v. Sorongon, 136 SCRA 407 [1985]).chanroblesvirtualawlibrary chanrobles virtual law library

In the matter of laches, the Court aptly stated in the case of Marcelo Sotto v. Pilar Teves, et al., 86 SCRA 155 [1978] that "in determining whether a delay in seeking to enforce a right constitutes laches, the existence of a confidential relationship between the parties is an important circumstance for consideration. A delay under such circumstance is not as strictly regarded as where the parties are strangers to each other. The doctrine of laches is not strictly applied between near relatives, and the fact that the parties are connected by ties of blood or marriage tends to excuse an otherwise unreasonable delay." chanrobles virtual law library

In the case of Esso Standard Eastern, Inc. v. Alfonso Lim, 123 SCRA 464, 480 [1983]), the Court ruled that laches cannot be asserted by a mere possessor without claim of title, legal or equitable because for laches to exist, there should be a showing of delay in asserting the complainant's right. The complainant should have knowledge or notice of the defendant's conduct and an opportunity to institute a suit. Delay is not counted from the date the lot was sold to the buyer but from the time of entry of the defendant or from the time the complainant came to know of the occupancy for that is the only time it could possibly have demanded that he get out of the premises or could have instituted a suit. In the case at bar, it will be noted that what transpired was an administrative reconstitution, essentially ex-parte and without notice, thereby lending credence to the claim that private respondent Marta Agana was unaware of such reconstitution and possession until she discovered the same in the Office of the Register of Deeds in 1976. As such it cannot be claimed that she slept on her right as from that time on, it is undeniable that she filed her adverse claim on the said lot.chanroblesvirtualawlibrary chanrobles virtual law library

After a careful perusal of the case, there appears to be no cogent reason to disturb the findings of fact of the Court of Appeals which affirmed the findings of the trial court.chanroblesvirtualawlibrary chanrobles virtual law library

PREMISES CONSIDERED, the petition is DENIED and the assailed decision of the Intermediate Appellate Court is AFFIRMED.chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED.

Teehankee, C.J., Narvasa, Cruz and Gancayco, JJ., concur.

 

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. L-40145 July 29, 1992

SEVERO SALES, ESPERANZA SALES BERMUDEZ, Petitioners, vs. COURT OF APPEALS and LEONILO GONZALES, Respondents.chanrobles virtual law library

 

ROMERO, J.: chanrobles virtual law library

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.chanroblesvirtualawlibrary chanrobles virtual law library

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. 1On 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. 2On 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. 3 chanrobles virtual law library

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. 4The 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 5in the name of Esperanza Sales Bermudez for the 900-square-meter lot donated to her and Tax Declaration No. 13874 6in the name of Sales covering the remaining portion or 4,339 square meters.chanroblesvirtualawlibrary chanrobles virtual law library

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. 7Ernesto 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. 9 chanrobles virtual law library

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. 10 chanrobles virtual law library

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.chanroblesvirtualawlibrary chanrobles virtual law library

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 therefrom. 11Said parcel of land was declared by Leonilo Gonzales under Tax Declaration No. 12483. 12 chanrobles virtual law library

On November 7, 1968, Leonilo Gonzales filed an action for illegal detainer against Sales before the Municipal Court of Bugallon. 13Before 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.chanroblesvirtualawlibrary chanrobles virtual law library

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. Its dispositive portion reads:

WHEREFORE, judgment is hereby rendered in favor of the defendant, and against the plaintiffs by: chanrobles virtual law library

1. Ordering the dismissal of the complaint; chanrobles virtual law library

2. Declaring that the defendant is the lawful owner of the land described in Exhibits "2" and "2-A" (same as Exh. "H") and is, therefore, entitled to the possession thereof; chanrobles virtual law library

3. Ordering the plaintiffs, jointly and severally, to pay the defendant the sum of P2,000.00 by way of attorney's fees; and chanrobles virtual law library

4. Ordering the plaintiffs, jointly and severally, to pay the costs.

SO ORDERED.chanroblesvirtualawlibrary chanrobles virtual law library

The lower court noted that while plaintiffs counsel claimed that Sales and his wife were illiterates, their signatures on each page of the two-page deed of sale revealed "striking features" of intelligence. The court added:

Defendant's defense hinges on the fact that the Deed of Sale is valid, it having been properly executed and notarized, and is therefore a public document, and carries weigh as provided for in Section 31, Rule 132 of the Rules of Court. Defendant likewise proved that the money paid by his father, Ernesto Gonzales was his. Arturo V. Malazo, the Notary Public ex-officio and Justice of the Peace, before whom the Deed of Sale was executed, testified personally in Court and confirmed the genuineness and validity of the Deed of sale, together with the signatures appearing therein, particularly those of the vendors Severo Sales and Margarita Ferrer, and the witnesses thereto. The bare and naked assertions of the plaintiff Severo Sales and his wife, could not offset the presumption of regularity as to the execution of the Deed of Sale, especially so, that the ratifying officer was, and still is, a municipal judge. The contention of plaintiff Severo Sales that he was made to sign the document hurriedly by the deceased Ernesto Gonzales does not deserve credence, considering that he has affixed (sic) or signed the said Deed of Sale no less than three (3) times, together with his wife and the other witnesses. Considering the interest of the plaintiff Severo Sales and his wife in this case, it could not overthrow the testimony of the Notary Public ex-oficio Arturo V. Malazo. 15 chanrobles virtual law library

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. On December 19, 1974, the Court of Appeals 16 affirmed the decision of the lower court but added that the

petitioners shall pay, jointly and severally, the amount of P1,000 as attorney's fees. Hence, the instant petition.chanroblesvirtualawlibrary chanrobles virtual law library

Petitioners primarily invoke Art. 1332 of the Civil Code which provides that when one of the parties to a contract is unable to read, "or if the contract is in a language not understood by him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully, explained to the former." Petitioners contend that respondent Gonzales failed to prove that the contents of the deed of sale were ever explained to Sales, an illiterate. They also argue that granting that the deed of sale was valid, the courts below failed to take into consideration the fact that the deed of donation was executed ahead of the deed of sale and must not, therefore, be disregarded considering that with reference to unregistered lands, an earlier instrument prevails over a later one.chanroblesvirtualawlibrary chanrobles virtual law library

With regard to the issue of whether or not there was compliance with the provision of Art. 1332 of the Civil Code, before said article may be invoked, it must be convincingly established that the disadvantaged party is unable to read or that the contract involved in written in a language not understood by him. 17It is the party invoking the benefits of Art. 1332 or Sales, who has the burden of proving that he really is unable to read or that English, the language in which the deed of sale was written, is incomprehensible to him. Only after sufficient proof of such facts may the burden or proving that the terms of the contract had been explained to the disadvantaged party be shifted to the party enforcing the contract, who, in this instance, is Leonilo Gonzales.chanroblesvirtualawlibrary chanrobles virtual law library

The records of this case, however, show that although Sales did not go to school and knew only how to sign his name, 18he and his wife had previously entered into contracts written in English: first, when Sales mortgaged his property to Faustina P. Agpoon and second, when he donated a portion of the property involved to his daughter, petitioner Esperanza Sales Bermudez. 19The court below also noted the fact that the signatures of the Sales spouses in the deed of sale showed the "striking features of the signatures of intelligent" individuals. Coupled with this is the fact that in court, the Sales spouses themselves admitted that the signatures on the deed of sale "looked like" their signatures. 20 chanrobles virtual law library

But more revealing is the fact that the deed of sale itself, specifically the notarial acknowledgment thereof, contains a statement that its executors were known to the notary public to be the persons who executed the instrument; that they were "informed by me (notary public) of the contents thereof" and that they acknowledged to the notary public that the instrument was freely and voluntarily executed. 21When he testified at the hearing, notary public Arturo Malazo stated, "I know Mr. Severo Sales and he appeared before me when I notarized that document." Later, he added that "the document speaks for itself and the witnesses were there and those were the persons present" (sic). 22Thus, the stark denial of the petitioners, specially Sales, that he executed the deed of sale pales in the face of Malazo's testimony because the testimony of the notary public enjoys greater credence than that of an ordinary witness. 23 chanrobles virtual law library

The extrinsic validity of the deed of sale is not affected by the fact that while the property subject thereof is located in Bugallon, Pangasinan where the vendors also resided, the document was executed in San Miguel, Tarlac. What is important under the Notarial Law is that the notary public concerned has authority to acknowledge the document executed within his territorial jurisdiction. 24A notarial acknowledgment attaches full faith and credit to the document concerned. 25It also vests upon the document the presumption of regularity unless it is impugned

by strong, complete and conclusive proof. 26Such kind of proof has not been presented by the petitioners.chanroblesvirtualawlibrary chanrobles virtual law library

While it seems improbable that Severo Sales sold the property described in Tax Declaration 5861 when in fact this had been subsequently cancelled already by Tax Declaration 13875 in the name of Esperanza Sales Bermudez and by Tax Declaration No. 13874 in Severo Sales' name, one c

an hardly ascribe bad faith to respondent, for unlike a title registered under the Torrens System, a tax declaration does not constitute constructive notice to the whole world. The issue of good faith or bad faith of a buyer is relevant only where the subject of the sale is a registered land but not where the property is an unregistered land. 27 chanrobles virtual law library

On the issue of whether or not the earlier deed of donation should "prevail" over the deed of sale or be "recognized", petitioner invokes Nisce v. Milo 28and Estate of Mota v. Concepcion 29which purportedly ruled that "with reference to unregistered lands, an earlier instrument, be it a sale ormortgage, prevails over a later one, and the registration of any one of them is immaterial." 30 chanrobles virtual law library

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." 31Such agreement had to be expressly stipulated in the deed of donation 32because 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.chanroblesvirtualawlibrary chanrobles virtual law library

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 33 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. 34 chanrobles virtual law library

We 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 35and the official receipt issued by the Registry of Deeds. 36 chanrobles virtual law library

Finally, we 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. 37 chanrobles virtual law library

WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. Costs against the petitioners.chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED.

Gutierrez, Jr., Feliciano, Bidin and Davide, Jr., JJ., concur.