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Republic of the PhilippinesSUPREME COURTManilaFIRST DIVISIONG.R. No. 97282 August 16, 1991ATTY. PLARIDEL M. MINGOA,petitioner,vs.LAND REGISTRATION ADMINISTRATOR,respondent.Plaridel M. Mingoa for and in his own behalf.GANCAYCO,J.:pThe facts of this case are simple. A deed of donation of several parcels of land was executed by petitioner in favor of his children on July 15, 1987. The deed was forwarded to the Register of Deeds of Romblon for registration by registered mail on September 9, 1988. It was entered in the primary entry book of the Register of Deeds on September 20, 1988 under Entry No. 181. Said Register of Deeds suspended registration of the donation until the petitioner has secured the proper clearances from the Department of Agrarian Reform on the ground that under Section 6 of Republic Act 6657, any disposition of private agricultural lands made prior to June 15, 1988, when the Act took effect, must be registered within three (3) months from said date or on before September 13, 1988 to be valid.The matter was elevated by petitioneren consultawith the Administrator of the Land Registration Authority LTA. On November 27,1990 the LTA Administrator issued a resolution sustaining the stand of the Register of Deeds that unless the proper clearances from the Department of Agrarian Reform are secured, the deed of donation may not be registered.Hence this petition for certiorari whereby petitioner contends that Section 1, Rule 13 of the Rules of Court should apply in a suppletory manner in that the date of the mailing should be considered the date of filing of the document in the office of the Register of Deeds.The petition is impressed with merit.Section 6 of Republic Act No. 6657 provides, among others:SEC. 6.Retention Limits.Except as otherwise provided in its Act, no person may own or retain, directly or indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-size farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age, and (2) that he is actually tilling the land or directly managing the farm: Provided, That landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder: Provided, further, That original homestead grantees or their direct compulsory heirs who still own the original homestead at the time of the approval of its Act shall retain the same areas as long as they continue to cultivate said homestead.The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner; Provided, however, That in case the area selected for retention by the landowner is tenanted, the tenant shall have the option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with similar or comparable features. In case the tenant chooses to remain in the retained area, he shall be considered a leaseholder and shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a beneficiary in another agricultural land, he loses his right as a leaseholder to the land retained by the landowner. The tenant must exercise this option with a period of one (1) year from the time the landowner manifests his choice of the area for retention.In all cases the security of tenure of the farmers or farm workers on the land prior to the approval of this Act shall be respected.Upon the effectivity of this Act, any sale, disposition, lease, management contract or transfer of possession of private lands executed by the original landowner in violation of this Act shall be null and void; Provided, however, That those executed prior to this Act shall be valid only when registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act. Thereafter, all Registers of Deeds shall inform the Department of Agrarian Reform (DAR) within thirty (30) daysof any transaction involving agricultural lands in excess of five (5) hectares. (Emphasis supplied)The said law was approved by the President of the Philippines on June 10, 1988. Section 78 thereof provides that it "shall take effect immediately after publication in at least two (2) national newspapers of general circulation." It appears the law took effect on June 15, 1988.Section 56 of Presidential Decree No. 1529 also provides:SEC. 56. Primary Entry Book; fees; certified copies.Each Register of Deeds shall keep a primary entry book in which, upon payment of the entry fee, he shall enter, in the order of their reception, all instruments including copies of writs and processes filed with him relating to registered land. He shall, as a preliminary process in registration, note in such book the date, hour

and minute of reception of all instruments, in the order in which they were received. They shall be regarded as registered from the time so noted, and the memorandum of each instrument, when made on the certificate of title to which it refers, shall bear the same date: Provided, that the national government as well as the provincial and city governments shall be exempt from the payment of such fees in advance in order to be entitled to entry and registration.Every deed or other instrument, whether voluntary or involuntary, so filed with the Register of Deeds shall be numbered and indexed and endorsed with a reference to the proper certificate of title. All records and papers relative to registered land in the office of the Register of Deeds shall be open to the public in the same manner as court records, subject to such reasonable relations as the Register of Deeds, No. 97282 under the direction of the Commissioner of Land Registration, may prescribe.All deeds and voluntary instruments shall be presented with their respective copies and shall be attend and sealed by the Register of Deeds, endorsed with the file number, and copies may be delivered to the person presenting them.Certified copies of all instruments filed and registered may also be obtained from the Register of Deeds upon payment of the prescribed fees.The foregoing provision requires the Register of Deeds, upon payment of the entry fees, to enter in the primary book of entry, in the order of reception, all instruments including copies of writs and processes filed with him relative to registered land; the date, hour and minute shall be noted in said book which shall be regarded as the date of registration of the instrument; and the memorandum of each instrument on the certificate of title shall bear the same date.Section 34 of Presidential Decree No. 1529 likewise provides:SEC. 34. Rules of procedure.The Rules of Court shall, insofar as not inconsistent with the provisions of this Decree, be applicable to land registration and cadastral cases by analogy or in a suppletory character and whenever practicable and convenient.Consequently, Section 1, Rule 13 of the Rules of Court is applicable to this case in a suppletory character as it provides:SEC. 1. Filing with the court, defined.The filing of pleadings, appearances, motions, notices, orders and other papers with the court as required by these rules shall be made by filing them personally with the clerk of the court or by sending them by registered mail. In the first case, the clerk shall endorse on the pleading the date and hour of filing. In the second case, the date of the mailing of motions, pleadings, or any other papers or payments or deposits as shown by the post office stamp on the envelope or the registry receipt, shall be considered as the date of their filing, payment, or deposit in court. The envelope shall be attached to the record of the case.The foregoing rule clearly provides that the date of mailing of the motion, pleading, or any other papers, which may include instruments as the deed of donation, is considered the date of filing as shown by the post office stamp on the envelope or registry receipt.The Court therefore finds and so holds that the date of mailing of an instrument to the Register of Deeds for purposes of registration should be considered the date of filing and receipt thereof by the Register of Deeds. It is this date that should be entered in the primary entry book of the Register of Deeds which shall be regarded as the date of its registration.Since in this case, the deed of donation was admittedly sent by registered mail to the Register of Deeds on September 9, 1988, said date is in effect the date of filing, receipt and registration of the instrument, although the instrument was actually received by said office only on September 20, 1988.WHEREFORE, the petition is given due course and is hereby GRANTED. The questioned resolution of the public respondent Administrator of the Land Registration Authority dated November 27,1990 is hereby SET ASIDE and it is hereby directed that the registration of deed of donation subject of this petition be effected by the Register of Deeds of Romblon.SO ORDERED.Narvasa (Chairman), Cruz, Grio-Aquino and Medialdea, JJ., concur.

SOURCE: http://www.lawphil.net/judjuris/juri1991/aug1991/gr_97282_1991.html

Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-14676 January 31, 1963CANDIDA VILLALUZ, ET AL.,plaintiffs-appellants,vs.JUAN NEME and FELICISIMA VILLAFRANCA,defendants-appellees.Jose L. Lapak for plaintiffs-appellants.Rosario B. Zono-Sunga for defendants-appellees.PAREDES,J.:This case was elevated to this Court "on purely questions of law." The record discloses that Maria Rocabo died intestate on February 17, 1937, leaving a parcel of land granted her under Homestead Patent No. 185321, issued on May 20, 1930, and covered by Original Certificate of Title No. 217 (Exh. A), of the Register of Deeds of Camarines

Norte. She left three (3) daughters, named Sinforosa, Patricia and Maria, surnamed Villaluz and grandchildren, Candida, Emilia, Clemencia, Roberto and Isidra Villaluz, legitimate children of her deceased son Pedro Villaluz; Isabelo and Teodoro Napoles, legitimate sons of a deceased daughter; Severina Villaluz and Sinforosa and Leonor Napoles, legitimate daughters of another deceased daughter, Gregoria Villaluz.After the approval of her application, but before granting of the patent, on March 6, 1926, Maria Rocabo donated the southern portion of the land to Maria, and the northern portion to Patricia, in two notarial deeds donation (Exhibits 1 and 7), giving them the right to present their deeds of donations to the Bureau of Lands. The said donees accepted the donations and took actual possession of their respective portions, but only Maria Villaluz remained on the entire land because Patricia left. Maria cultivated and improved the land from 1927 to 1938, inclusive. Maria and Patricia, however, forgot and cared not to present the deeds of donation to the Bureau of Lands. On March 27, 1930, the patent was granted and O.C.T. No. 217 was issued in the name of Maria Rocabo. Realizing that the deeds of donation were not in accordance with the formalities required by law, and because Sinforosa Villaluz, who had the custody of the title would not surrender it to the donees, unless given a share, upon the advise of a Notary Public, Carlos de Jesus, Maria, Patricia and Sinforosa, on September 1, 1939, executed a deed of extrajudicial partition (Exh. 2) among themselves, to the exclusion and without the knowledge and consent of their nephews and nieces, the herein plaintiffs-appellants, and in virtue thereof, O.C.T. No. 217 was cancelled and Transfer Certificate of Title No. 269 was issued in their names (Exh. 5) after having made representations that they were the only heirs of their mother, Maria Rocabo. On September 2, 1939, the 3 sisters declared the land for taxation purposes (Exh. 4). On September 11, 1939, they sold the land to Ramona Pajarillo, wife of Adriano Mago and Angela Pajarillo, wife of defendant Juan Neme (Exh. 3). Ramona and Angela declared land for taxation purposes in their names (Exh. 6). On August 3, 1953, the heirs of Adriano and Ramona sold the undivided interest of the latter to Juan Neme (Exh. 8), who, on August 8, 1953, sold the southern half portion of the property in favor of defendant Felicisima Villafranca (Exh. 13). Thereafter, the plaintiffs-appellants came to know that the land which was in the administration of their aunts, Sinforosa, Patricia and Maria, was already in the possession of the defendants. After attempts of amicable settlement had failed, the plaintiffs on June 3, 1954, filed a complaint for partition of said land and recovery of their respective shares on the property and accounting of the fruits thereof.It also appears that the deeds of sale of the land in question executed in favor of the defendants, had not been registered in favor of the defendants and had not been recorded in accordance with Public Land Act No. 141 and the Land Registration Law, Act No. 496; that the vendees failed to have their deed of sale (Exh. 3), annotated on said T.C.T. No. 269, or have the title thereof transferred in their names.Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of facts.1wph1.tAfter due trial, the lower court rendered judgment, dismissing the complaint, with costs against the plaintiffs, and declaring the defendants the owners of the land described in the complaint and in the T.C.T. No. 269. Plaintiffs in their appeal, claim that the lower court erred: (1) In not finding that the extrajudicial partition (Exh. 2), only affected the partition of Sinforosa, Patricia and Maria, surnamed Villaluz, on the land in question and not the participation of the plaintiffs-appellants, as compulsory heirs of Maria Rocabo; (2) In finding that plaintiffs-appellants are already barred from claiming their participation thereon; and (3) In finding that defendants-appellees are owners, with right of possession, of the said land.The contention of the plaintiffs-appellants is meritorious. The decision found to be an incontrovertible fact that the land in question should be divided among the heirs of the decedent Sinforosa, Patricia and Maria Villaluz and her grandchildren. Thus, the trial Court said:... The settlement of the estate of Maria Rocabo was summarily effected by the extrajudicial partition executed September 1, 1939, by the three surviving children to the exclusion of the plaintiffs who were entitled to inherit by representation. By virtue of the extrajudicial partition, Exhibit 1, the Original Certificate of Title No. 217 in the name of Maria Rocabo was cancelled and Transfer Certificate of Title No. 269 was issued in lieu thereof in favor of Sinforosa Villaluz, Patricia Villaluz and Maria Villaluz on September 6, 1939, to the prejudice of the plaintiffs. . . .Furthermore, Maria having left no testament or last will, her heirs succeeded to the possession and ownership of the land in question from the time of her death (Art. 440, Old Civil Code, Art. 533, New Civil Code; Lubrico v. Arbado, 12 Phil. 391). The deed of extrajudicial partition (Exh. 2), was fraudulent and vicious, the same having been executed among the 3 sisters, without including their co-heirs, who had no knowledge of and consent to the same. The partition, therefore, did not and could not prejudice the interest and participation of the herein plaintiffs-appellants, and the sale of the land to the defendants did not and could not also prejudice and effect plaintiffs-appellants' interest and participation thereon. The cancellation of O.C.T. No. 217 and the issuance of T.C.T. No. 269, did not likewise prejudice the interest and the participation of the plaintiffs-appellants. The three sisters could not have sold what did not belong to them.Nemo dat quod non habet.The trial court held that under Sec. 4, Rule 73 of the Rules, the plaintiffs' cause of action had already prescribed. This section, however, refers only to the settlement and distribution of the estate of the deceased by the heirs who make such partition among themselves in good faith, believing that they are the only heirs with the right succeed. In the case at bar, however, the surviving sisters could not have ignored that they had co-heirs, the children of the 3 brothers who predeceased their mother. Considering that Maria Rocabo died during the regime of the Spanish Civil Code, the distribution of her properties should be governed by said Code, wherein it is provided that between co-heirs, the act to demand the partition of the inheritance does not prescribe. (Art 1965 [Old Civ. Code]; Baysa, et al. v. Baysa, 53 Off. Gaz., 7282). Verily the 3 living sisters were possessing the property as administratrices or trustees for and in behalf of the other co-heirs, plaintiffs-appellants herein, who have the right to vindicate their inheritance, regardless of the lapse of time (Sevilla v. De los Angeles, L-7745; 51 Off. Gaz., 5590, and case cited therein).

Moreover, the acquisition of the land in question is governed by the Public Land Act No. 141 and the Land Registration Law Act No. 496. And considering that the deed of sale had not been registered in accordance with the said laws, the same did not constitute a conveyance which would bind or affect the land, because the registration of a voluntary sale of land is the operative act that transmits or transfers title (Tuason v. Raymundo, 28 Phil.635).Defendants-appellees further argue that the extrajudicial partition should not be taken independently of the deeds of donation as in fact, according to them, the crux of the case lies mainly in the two deeds of donation, which enabled the donees to possess the land and cut any and all rights of the plaintiffs-appellants to claim participation therein. In other words, it is pretended that after the alleged donations, the land in question was no longer a part of the intestate estate of Maria Rocabo, and the plaintiffs-appellants could no longer participate thereon. But the deeds of donation, according to the trial court, were defective and inoperative, because they were not executed in accordance with law. The trial court itself began to count the period of prescription "after the execution of the extrajudicial partition and the issuance of Transfer Certificate of Title No. 269". The donees themselves know that the donations were defective and inoperative, otherwise they would not have subsequently decided to execute the deed of extrajudicial partition, which also goes to show that the rights of the three sisters and the vendees, stemmed from the said extrajudicial partition. The defendants-appellees, finally argue that, this notwithstanding, the subsequent registration of the land in the names of the two donees and Sinforosa Villaluz pursuant to the extrajudicial partition on September 1, 1939, and the subsequent sale thereof by the registered owners to the defendants-appellees, on September 11, 1939, followed by the actual, adverse and continuous possession by the vendees and successors for more than 10 years, before the present complaint was filed, had barred the right of appellants to recover title of the property and claim participation therein. Having held that the three sisters were mere trustees of the property for the benefit of the appellants, and it appearing that they had not repudiated the trust, defendants-appellees' pretension in this respect is without merit. The finding in the appealed decision that "there is no evidence that the said defendants are not innocent purchasers and for value" (good faith), is of no moment in the case at bar. As heretofore adverted to, there was no effective sale at all, which would affect the rights of the plaintiffs-appellants. Moreover, the lack of good faith on the part of the defendants-appellees can reasonably be inferred from thier conduct in not presenting for registration the supposed deed of sale in their favor; in failing to annotate the sale on the T.C.T. of the alleged donees, and in not asking that a transfer certificate of title be issued in their (vendees') names. It may also be reasonably concluded that if they did not present the deed of sale for registration, it was because they knew that their vendors were not the sole and only heirs so as to entitle them to the ownership of the land in question.IN VIEW HEREOF, the decision appealed from is hereby set aside, and the case is remanded to the court of origin, for further and appropriate proceedings..Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Dizon and Regala, JJ., concur.Bengzon, C.J., took no part.Makalintal, J., reserves his vote.

SOURCE: http://www.lawphil.net/judjuris/juri1963/jan1963/gr_l-14676_1963.html

FIRST DIVISIONG.R. No. L-40105 November 11, 1985NESTOR L. CENTENO, BONIFACIO GUTIERREZ, ARTEMIO GUTIERREZ, GREGORIO FERNANDEZ, ZENAIDA DE LA CRUZ, FRANCISCO GOMEZ, RICARDO ADRAO, AMPARO RAYOS and OFELIA SANTOS,Petitioners, vs.COURT OF APPEALS, RUFINA C. VICTORIA and DANIEL O. VICTORIA,Respondents.Fortunato Gupit, Jr. & Associates for petitioners.chanrobles virtual law libraryRoldan, Sandoval & Malate Law Office for respondents.PATAJO,J.:This is a petition for review on certiorari of the decision of the Court of Appeals promulgated on December 4, 1974, reversing the decision of the Court of First Instance of Rizal, based on the following Stipulation of Facts:STIPULATION OF FACTS AND STATEMENT OF ISSUESchanrobles virtual law libraryCOME NOW the plaintiffs and the defendant thru their undersigned counsels, and to this Honorable Court respectfully submit the following Stipulation of Facts and Statement of the Issues:chanrobles virtual law library1. The personal circumstances of the plaintiffs and the defendants are admitted.chanroblesvirtualawlibrarychanrobles virtual law library2. In June 1969, the spouses Pedro M. Cruz and Rosanna Villar offered to purchase from the defendants- spouses and the latter agreed to sell to the former, a parcel of unregistered land situated in Hagonoy, Taguig, Rizal, covered and evidenced by Tax Declaration No. 5685. In making the offer to purchase, the spouses Pedro M. Cruz and Rosanna Villar disclosed to the defendants their intention to subdivide the said property into residential lots to be sold later on as much.chanroblesvirtualawlibrarychanrobles virtual law library3. On July 10, 1969, defendants executed a Contract to Sell in favor of the spouses Pedro M. Cruz and Rosanna Villar the above-described parcel of land covered by Tax Declaration No. 5685. Xerox copy of said Contract to Sell is hereto attached as ANNEX 'A'.chanroblesvirtualawlibrarychanrobles virtual law library4. The spouses Pedro M, Cruz and Rosanna Villar in fact caused to be subdivided the said property subject of the Contract to Sell into residential lots to be offered for sale to individual purchasers.chanroblesvirtualawlibrarychanrobles virtual law library

5. The said Pedro M. Cruz entered into separate 'Contracts of Sale' involving thirty-one (31) residential lots with various persons, among them whom are the plaintiffs. The separate 'Contracts of Sale' entered into by the said Pedro M. Cruz with the plaintiffs are hereto attached and marked as follows:Nestor Centeno-Annex 'B'

BonifacioGutierrez-Annex 'B-1'

Artemio Gutierrez-Annex 'B-2'

GregorioFernandez-Annex 'B-3'

Zenaida de la Cruz-Annex 'B-4'

Francisco Gomez-Annex 'B-5'

Ricardo Adrao-Annex 'B-6'

Ricardo Adrao-Annex 'B-7'

Amparo Rayos-Annex 'B-8'

Ofelia Santos-Annex 'B-9'

6. In Annexes 'B-2', 'B-3', 'B-4' 'B-5', 'B-6', 'B-7', 'B-8','B-9', the said Pedro M. Cruz represented himself 'as attorney-in-fact of the owner of a parcel of land situated in Hagonoy, Taguig, Rizal, which is more particularly described in Tax Declaration No. 5685' when in truth and in fact he has never been appointed as Attorney-in-Fact by either or both of the defendants.chanroblesvirtualawlibrarychanrobles virtual law library7. On March 11, 1970, defendants executed 'Deed of Sale with First Mortgage' in favor of the land subject matter of the Contract to Sell (ANNEX 'A') and ownership of said property passed from defendants to the Cruz spouses, subject to the said first mortgage, Xerox copy of said Deed of Sale with First Mortgage hereto attached as ANNEX 'C'.chanroblesvirtualawlibrarychanrobles virtual law library8. The spouses Pedro M. Cruz and Rosanna Villar thereafter applied for the registration of the subject land with the Court of First Instance of Rizal and after due hearing on August 14, 1970, a Decision was rendered in Land Registration Case No. N-129-M (N-66) L.R.C. Rec. No. N-38492, granting their application for registration and once final, Original Certificate of Title No. 8626 was issued in the name of the Cruz spouses, In said Original Certificate of Title No. 8626, it is expressly stated that the parcel of land so registered is subject 'to a first mortgage in favor of Rufina Cruz Victoria in the amount of P72,000.00 Philippine Currency, payable in four (4) equal installments of P18,000.00 each on July 31, 1970, December 31, 1970, May 31, 1971 and October 31, 1971, respectively'. Xerox copy of the said Original Certificate of Title No. 8626 is hereto attached as Annex 'D'.chanroblesvirtualawlibrarychanrobles virtual law library9. In view of the failure of Pedro M. Cruz and Rosanna Villar to comply with the terms and conditions of the mortgage on the land covered in and evidenced by Original Certificate of Title No. 8626, defendants caused the extrajudicial foreclosure of the mortgage on January 9, 1971 the Provincial Sheriff of Rizal gave written notice of the Sheriff's sale at public auction of said property set for February 15, 1971. Xerox copy of the Notice of Sheriff's Sale hereto attached as ANNEX 'E'.chanroblesvirtualawlibrarychanrobles virtual law library10. On February 9, 1971 after the 'Notice of the Sheriff's Sale' (ANNEX 'E') was published and before the sale at public auction, Pedro M. Cruz filed a petition with the Court of First Instance of Rizal for the approval of subdivision plan (LRC) Psd-132057 of the property covered by Original Certificate of Title No. 8626 and for the cancellation of said title for each of the resulting lots in the approved subdivision plan.chanroblesvirtualawlibrarychanrobles virtual law library11. On February 15, 1971, the extrajudicial foreclosure sale of Original Certificate of Title No. 8626 was hold and the defendants-spouses, being the highest bidders, were awarded the property and the corresponding Certificate of Sale was executed in their favor by the Provincial Sheriff of Rizal Copy of said Certificate of Sale is attached hereto as ANNEX 'F'.chanroblesvirtualawlibrarychanrobles virtual law library12. The 'Contract of Sale' between the said Pedro M. Cruz and the plaintiffs (ANNEXES 'B', 'B-l', to 'B-9', inclusive) were not registered with the Registry of Deeds for the Province of Rizal, nor annotated in Original Certificate of Title No. 8626 issued in the name of the spouses Pedro M. Cruz and Rosalina Villar, nor annotated in the new and individual Transfer Certificate of Title issued also in the name of the Cruz spouses for each (A the lots of the abovementioned plan.chanroblesvirtualawlibrarychanrobles virtual law library13. On April 17, 1971, defendants spouses on one hand and Pedro M. Cruz and Rosalina Villar on the other, entered into an 'Interim Agreement Pending Expiration of Redemption Period' consisting of four (4) pages and entered in the Notarial Register of Notary Public for Rizal, Gil M. Madarang, as Document No. 208, Page No. 43, Book No. 1, series of 1971. Xerox copy of which Agreement is hereto attached and marked as ANNEX 'G', Annex A therein being marked as ANNEX 'G-l'.chanroblesvirtualawlibrarychanrobles virtual law library14. On April 19, 197 1, defendants thru their attorney-in-fact, Atty. Alfonso C. Roldan, wrote the Register of Deeds of Rizal expressing their conformity and lack of objection to the approval of the subdivision plan and the issuance of separate titles, subject to the conditions therein specified. Xerox copy of said letter is hereto attached as ANNEX 'H'.chanroblesvirtualawlibrarychanrobles virtual law library

15. On the basis of the Order of the Court of First Instance of Rizal dated February 27, 1971 in Land Recskadon Case No. N-129-M approving the subdivision plan and directing the issuance of new and separate titles for the resulting lots, Original Certificate of Title No. 8626 was cancelled and individual titles were issued by the Register of Deeds of Rizal Copy of the said Order of the CFI of Rizal is hereto attached as ANNEX 'I'.chanroblesvirtualawlibrarychanrobles virtual law libraryEach of the new and separate Transfer Certificates of Title issued in the name of the Cruz spouses for the subdivision Lots uniformly contained the following encumbrances or annotations.chanroblesvirtualawlibrarychanrobles virtual law library(a) A First Mortgage in favor of Rufina Cruz Victoria in the amount of P72,000.00, Philippine Currency, payable in four equal installments of P18,000.00 each on July 31, 1970, December 31, 1970, May 31, 1971 and October 31, 1971 respectively. (Fr. OCT No. 8626/A-79).chanroblesvirtualawlibrarychanrobles virtual law library(b) Entry No. 39329/0-8626-CERTIFICATE OF SALE in favor of RUFINA CRUZ VICTORIA Vendee; covering the property described herein for the sum of P78,082.88 in accordance with the Certificate of Sale issued by the Provincial Sheriff of Rizal.Date of the instrument-Feb. 15, 197 1.chanroblesvirtualawlibrarychanrobles virtual law libraryDate of the inscription-Feb. 16. 1971 at 11:40 a.m.(c) Entry No. 47353/PA-11343. SPECIAL POWER OF ATTORNEY executed by RUFINA CRUZ VICTORIA, in favor of ALFONSO C. ROLDAN, an attorney-in-fact, among other powers to act for and in behalf in connection with the obligations of the herein registered owners, and to enter into and execute any agreement or contract with the said owners involving the property herein described. (Doc. No. 126, Page 27, Bk. I., S. of 1971 of Not. Pub. for Rizal, Gil. M. Madarang)chanrobles virtual law libraryDate of the instrument-March 18, 197 1.chanroblesvirtualawlibrarychanrobles virtual law libraryDate of the inscription-April 21, 1971 at 11.59 a.m.chanroblesvirtualawlibrarychanrobles virtual law library(d) Entry No. 47354/T-No. 322-281-INTERIM AGREEMENT PENDING EXPIRATION OF REDEMPTION PERIOD duly executed by the herein registered owners and ALFONSO C. ROLDAN, as attorney-in-fact, covering the property herein described subject to the terms and conditions set forth in Doc. No. 208, Page No. 43, Bk. I., S. of 1971 of Not. Pub. for Rizal, Gil M. Madarang)chanrobles virtual law libraryDate of the instrument-April 17, 1971.chanroblesvirtualawlibrarychanrobles virtual law libraryDate of inscription-April 21, 1971 at 12:00 a.m.chanroblesvirtualawlibrarychanrobles virtual law library16. The spouses Pedro M. Cruz and Rosalina Villar failed to redeem the subject property within the reglementary and redemptive period of one year or on February 15, 1972 and defendants-spouses cause ownership of said realty to be consolidated with them thereafter obtaining the issuance to them of new Transfer Certificates of Title with them appearing as the registered owners, free from any liens and encumbrances.chanroblesvirtualawlibrarychanrobles virtual law library17. The ten (10) residential lots involved in the 'Contracts of Sale' (ANNEXES 'B', 'B-l' to 'B-9', inclusive) are presently registered in the name of defendants, free from any liens and encumbrances, as evidenced by the Transfer Certificates of Title, xerox copies of which are hereto attached as ANNEXES, as follows:T.C.T. NO.LOT & BLOCK NO.

355816Lot 4, Block IIANNEX 'J'

355809Lot 9, Block IANNEX 'J-l'

355810Lot 10, Block IANNEX 'J-2'

355829Lot 18, Block IIANNEX 'J-3'

355811Lot 11, Block IANNEX 'J-4'

355802Lot 2, Block IANNEX 'J-5'

355812Lot 1, Block IIANNEX 'J-6'

355814Lot 3, Block IIANNEX 'J-7'

355801Lot 1. Block IANNEX 'J-8'

355830Lot 19, Block IIANNEX 'J-9'

chanrobles virtual law library17. On April 11, 1972 and May 29, 1972, defendants thru their attorney-in-fact, Alfonso C. Roldan, gave individual written notices to all persons in whose favor the said Pedro M. Cruz had executed contracts to sell for lots in St. Michael subdivision II, Hagonoy, Taguig, Rizal, including herein plaintiffs, granting the said persons the option or privilege to purchase the lots involved under the terms and conditions as therein stated. Copy of said letters of April 11, 1972 and May 29, 1972 are hereto attached as ANNEXES 'K' and 'L', respectively.chanroblesvirtualawlibrarychanrobles virtual law library

18. The defendants came to know from said Pedro M. Cruz himself of the 'Contracts of Sale' executed by the latter in favor of various persons, including the plaintiffs only after the Certificate of Sale executed by the Provincial Sheriff of Rizal(ANNEX 'F') was issued.chanroblesvirtualawlibrarychanrobles virtual law library19. The present Complaint was filed on June 28, 1972 and summons was served upon the defendants on July 14.1972.chanroblesvirtualawlibrarychanrobles virtual law library20. Plaintiffs have not made any demand. oral or written, upon the defendants, prior to the filing of their Complaint-chanrobles virtual law library21. Lot 4, Block 11, involved in the 'Contract of Sale' (ANNEX 'B') executed by Pedro M, Cruz in favor of plaintiff Nestor Centeno, was the subject of an earlier 'Contract of Sale' executed by said Pedro M. Cruz in favor of Conrado P. Uy on May 26. 1969. xerox copy of which is hereto attached as 'ANNEX M'.chanroblesvirtualawlibrarychanrobles virtual law librarySubsequently, said Conrado P. Uy, for consideration paid to him by plaintiff Nestor Centeno, assigned and transferred rights and interests on said Lot 4, Block 11 to the said plaintiff, with the conformity of Pedro M, Cruz. Thus Pedro M. Cruz executed the Contract of Sale (ANNEX 'B') in favor of plaintiff Nestor Centeno.chanroblesvirtualawlibrarychanrobles virtual law library22. From February 1972 up to the present, plaintiffs have not paid the installments specified under the 'Contract of Sale (ANNEXES 'B-1 ' to 'B-9', inclusive) either to the spouses Pedro M, Cruz and Rosalina Villar, or to the defendants. Plaintiffs have not made any tender of payment of the said installments as they fell due to the spouses Pedro M. Cruz and Rosalina Villar or to the defendants after consolidation of ownership of the foreclosed property in favor of the defendants. Neither have the plaintiffs made consignation of the said installments as they fell due with the court of proper jurisdiction, also after consolidation of ownership of said property in favor of the defendants. ....(Sgd.) ALFONSO C. ROLDANCounsel for DefendantsRm. 701 Madrigal BuildingAyala Avenue, Makati, Rizal(Sgd.) PROSPERO CRESCINI Counsel for PlaintiffsRm. 511 Madrigal BuildingEscolta, Manila (pp. 124-137, A)On the basis of the aforequoted stipulation of facts, the lower court rendered judgment on April 11, 1973, the dispositive portion of which reads:WHEREFORE, in view of all the foregoing, the Court hereby renders judgment directing defendants to respect, recognize and abide by the terms and conditions of the contracts of sale, Annexes B, B-1 to B-9; for plaintiffs to continue the payments of the installment due thereunder; for defendants to credit plaintiffs for all the installment payments heretofore made by them on their respective lots; and for defendants to pay plaintiffs the sum of P2,000.00 byway of attorney's fees. The rest of the prayer for damages is denied for lack of sufficient basis.On appeal, the Court of Appeals reversed said judgment and dismissed plaintiffs' complaint. In reversing the lower court, the Court of Appeals held that the disclosure by the spouses Cruz to the Victorias of their intention to subdivide the property into residential lots was merely simple talk on preliminaries attendant to a contract of sale, and its non-compliance does not affect the rights and obligations embodied in their contract; that the statement made by Cruz spouses that they were the attorney in fact of Victorias was not at all binding upon Victoria, as it was expressly stated in paragraph 6 of the Stipulation of Facts that the Cruz spouses were never been appointed as such; that when the spouses Cruz and the Victorias formally executed a deed of sale with mortgage on March 1 1,1970, the contracts of sale in favor of the lot buyers were not mentioned in the said deed considering that the contracts of sale were made prior to the execution of the said deed, hence, the lot buyers could not compel the Victorias to recognize their contracts with the spouses Cruz; that there is no stipulation and evidence that the lot buyers upon the execution of the con-tracts in their favor took possession, openly and publicly of the property in question so as to give notice to the Victorias of their prior rights; that the separate titles issued on each lot were all in the name of Cruz with the mortgage in favor of the Victorias annotated, but no notation was made as to the interests of the lot buyers; that there is no evidence on record to show that the Victorias were in estoppel; that there is no stipulation that any of the money paid by the lot buyers to the spouses Cruz had been illegally appropriated by the Victorias and that the spouses Victoria were clearly mortgagees with real right to foreclose the same when their mortgage credit was not paid on time.chanroblesvirtualawlibrarychanrobles virtual law libraryHence, the instant petition for review on certiorari, petitioner assigned to this Court for resolution five (5) errors, to wit:Ichanrobles virtual law libraryTHE COURT OF APPEALS ERRED IN NOT HOLDING THAT FROM THE COMBINATION OF THE UNDISPUTED CIRCUMSTANCES IN THIS CASE, THE VICTORIAS KNEW OF THE SALE BY PEDRO M. CRUZ OF THE SUBDIVIDED LOTS TO THE PETITIONERS.chanroblesvirtualawlibrarychanrobles virtual law libraryIIchanrobles virtual law libraryTHE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE VICTORIAS MERELY STEPPED INTO THE SHOES OF THE CRUZ SPOUSES.chanroblesvirtualawlibrarychanrobles virtual law libraryIIIchanrobles virtual law libraryTHE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE EXTRAJUDICIAL FORECLOSURE OF THE MORTGAGE HERE INVOLVED IS A TOTAL NULLITY BECAUSE THE DEED OF MORTGAGE DID NOT CONTAIN A SPECIAL POWER OF ATTORNEY IN FAVOR OF THE MORTGAGEES TO SELL THE

PROPERTY AT PUBLIC AUCTION.chanroblesvirtualawlibrarychanrobles virtual law libraryIVchanrobles virtual law libraryTHE COURT OF APPEALS ERRED IN HOLDING THAT THE VICTORIAS WERE NOT UNJUSTLY ENRICHED AT THE EXPENSE OF THE PETITIONERS.chanroblesvirtualawlibrarychanrobles virtual law libraryVchanrobles virtual law libraryTHE COURT OF APPEALS ERRED IN NOT MOTU PROPRIO HOLDING THAT IT HAD NO JURISDICTION OVER THE PRESENT APPEAL AND IN NOT ELEVATING THE APPEAL TO THIS HONORABLE COURT FOR DETERMINATION.chanroblesvirtualawlibrarychanrobles virtual law libraryWe find no merit in the present appeal. The property in question was originally owned by the Victories. On July 10,1969, they executed in favor of the spouses Pedro M. Cruz and Rosalina Villar a contract to sell said property, which at that time was still unregistered and was covered by Tax Declaration No. 5685, Under said agreement, it was stipulated that while possession of the property shag be considered delivered to the buyers Pedro M. Cruz and Rosalina Villar, the ownership thereof shall remain with the Victorias until the downpayment of P70,000.00 shag have been paid, in which event the necessary deed of transfer of ownership of the property will be executed together with a first mortgage on the property in favor of the Victorias to secure payment of the balance of the purchase price. On March 11, 1970, said deed of transfer with first mortgage on the property was executed between the Victorias and Pedro M. Cruz and Rosalina Villar. Thereafter the Cruzes registered the property and were issued Original Certificate of Title No. 8626 with the mortgage constituted on the property in favor of the Victorias annotated thereon.Because the Cruzes failed to pay the balance of the purchase price of the property the Victorias foreclosed extrajudicially the mortgage in their favor and at the auction sale they were the highest bidder. Before the expiration of the period of redemption with the consent of the Victorias the property was subdivided into several lots and individual titles were issued covering said lots in the name of Pedro M. Cruz. Each of new certificate of transfer for the lots to which the property was subdivided was issued in the name of Pedro M. Cruz with the mortgage and sheriffs certificate of sale in favor of the Victorias duly annotated thereon.chanroblesvirtualawlibrarychanrobles virtual law libraryWhen the property was sold at public auction in view of the default of the Cruzes to pay their mortgage indebtedness there was no annotation of any sale executed by the Cruzes in favor of the petitioners which would have placed on notice the bidders including the Victories at said public auction sale. Well settled is 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. When there is nothing on the certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser is not required to explore further than what the torrens title upon its face indicates in quest for any hidden defect or inchoate right that may subsequently defeat his right thereto. (William Andersonvs.Garcia, 64 Phil., 506;Fullevs.Legare, 7 SCRA 351).chanroblesvirtualawlibrarychanrobles virtual law libraryAs a matter of fact, there is no evidence nor any statement in the Stipulation of Facts to show that petitioners had actually taken possession of portions of the property in question sold to them which would have at least called the attention of the Victorias that the Cruzes had sold said portions to petitioners. The contracts of sale in favor of some petitioners executed in 1959 stated that Pedro M. Cruz was merely the attorney-in-fact of the owner of the property. (Annexes A-2, Contract of Sale in favor of Artemio Gutierrez; Annex A-3, Contract of Sale in favor of Gregorio Hernandez, A-4, Contract of Sale in favor of Zenaida de la Cruz; A-5, Contract of Sale in favor of Francisco Gomez: A-6. Contract of Sale in favor of Ricardo Adrao: A-7, Contract of Sale in favor of Amparo Rayos; A-8, Contract of Sale in favor of Ofelia Santos), At the time Pedro M. Cruz executed said deeds of sale, he was not yet the owner of the property. Said, buyers should have known that the owners of the property were the Victorias as the deeds of sale in their favor described the property as property described in Tax Declaration No. 8685 of the municipality of Taguig, Rizal. Had they investigated in whose name Tax Declaration No. 5685 was issued, they would have found out that it was in the name of the Victorias.chanroblesvirtualawlibrarychanrobles virtual law libraryAfter Pedro M. Cruz had obtained a certificate of title over the property in his name said title was subject to the mortgage in favor of the Victorias. Any sale executed by the Cruzes in favor of the petitioners would then be subject to the rights of the mortgages of said property. Even if the petitioners had registered the deed in their favor, which they did not, their rights under said deed of sale can not prevail over the rights of the mortgagee which have been annotated on said property from the beginning, that is to say when original certificate of title 8626 was issued in February 1971.chanroblesvirtualawlibrarychanrobles virtual law libraryMoreover, the petitioners can not bind the Victorias under the deeds of sale executed in their favor by Cruz allegedly as an attorney-in-fact of the Victorias because it is not true that Pedro M. Cruz was the attorney-in-fact of the Victorias. According to paragraph 6 of the Stipulation of Facts, Pedro M. Cruz had never been appointed as their attorney-in-fact by the Victorias. Neither can they compel the Victories to recognize the deeds of sale in their favor the ground of estoppel in allowing Pedro M. Cruz to sell the properties in question to petitioners. According to paragraph 18 of the Stipulation of Facts Victorias came to know of the sales made by Pedro M. Cruz in favor of petitioners only after property was sold to the them the foreclosure sale.18. The defendants came to know from said Pedro M. Cruz himself of the "Contract of Sale" executed by the latter in favor of various persons, including the plaintiffs only after the Certificate of Sale executed by the Provincial Sheriff of Rizal (Annex 'F') was issued:Pan 2 of the Stipulation of Facts wherein it is stated that when the Victorias agreed to sell the property to the Cruzes in 1969 the latter informed the former that their intention was to subdivide the property for resale is cited by petitioners as proof that the Victorias had knowledge of the sales of the lots to which the property had been subdivided. That is not necessarily so. Moreover, even granting that the Cruzes had told the Victorias of their plan to

subdivide the property they were buying, that did not impose any legal obligation upon the Victorias to be bound by any sales made by Cruz before they become the owner of the property. Neither did that imply that subdivision of the property and subsequent sale of the lots to which it be subdivided would in any way bar them from asserting their legal rights to sail property as the owners thereof before they are fully paid the purchase price or their rights under any mortgage executed in their favor to secure the balance of the payment of the purchase price of the property.chanroblesvirtualawlibrarychanrobles virtual law libraryAs the Victories were not parties to the contracts of sale in favor of petitioners, the same having been executed by Pedro M. Cruz and petitioners and according to the Stipulation of Facts Pedro M. Cruz had never been appointed attorney-in-fact of the Victories, there is no privity of contract between petitioners and the Victorias. Petitioners have no cause of action against the Victories since there is no evidence whatsoever to show that petitioners by acts or omissions of the Victorias had been induced to buy lots to which the property had been subdivided by the Cruzes. Neither is there any evidence that the Victorias had received any of the money paid by said petitioners to the Cruzes for the lots bought by them. Petitioners recourse must be against the Cruzes.chanroblesvirtualawlibrarychanrobles virtual law libraryIn view of the foregoing, the present petition is DISMISSED for lack of merit and the decision of the Court of Appeals AFFIRMED with costs against petitioners.chanroblesvirtualawlibrarychanrobles virtual law librarySO ORDERED.Teehankee (Chairman), Melencio-Herrera, Gutierrez, Jr., and De la Fuente, JJ., concur.chanroblesvirtualawlibrarychanrobles virtual law libraryPlana, J., took no part.chanroblesvirtualawlibrarychanrobles virtual law libraryRelova, J., is on leave.

SOURCE: http://www.chanrobles.com/scdecisions/jurisprudence1985/nov1985/gr_l40105_1985.php

Republic of the PhilippinesSUPREME COURTManilaFIRST DIVISIONG.R. No. L-48322 April 8, 1987FELIPE DAVID and ANTONIA G. DAVID,petitioners,vs.EULOGIO BANDIN (substituted by his legal heirs, namely: JUANA SILVERIO, JOSE, GABRIEL, ANICETA, VIRGINIA and FELIX, all surnamed Bandin); GREGORIO BANDIN, RAYMUNDA BANDIN, VALENTIN BRIONES, SOFIO BRIONES and AGAPITA RAMOS.respondents.No. L-49712 April 8, 1987MAGNO DE LA CRUZ,petitioner,vs.HONORABLE COURT OF APPEALS; EULOGIO BANDIN (substituted by his legal heirs, namely: JUANA, SILVERIO, JOSE, GABRIEL, ANICETA, VIRGINIA and FELIX, all surnamed Bandin); GREGORIO BANDIN, RAYMUNDA BANDIN, SOFIO BRIONES and AGAPITA RAMOS;respondents.No. L-49716 April 8, 1987JUANITA MARTIN VDA. DE LUCENA MAXIMINA MARTIN VDA. DE COSME, VICTORIA MARTIN VDA. DE OMANBAC, NEMESIO A. MARTIN, LEONORA DE LA CRUZ and AQUILINA DE LA CRUZ, petitioners,vs.EULOGIO BANDIN (substituted by his legal heirs, namely: JUANA, SILVERIO, JOSE, GABRIEL, ANICETA, VIRGINIA and FELIX, all surnamed Bandin);, VALENTIN BRIONES, AGAPITA RAMOS and COURT OF APPEALS, respondents.No. L-49687 April 8,1987JOSE RAMIREZ and HEIRS OF AMBROCIA P. VDA. DE SOTERO RAMIREZ, petitioners,vs.COURT OF APPEALS and EULOGIO BANDIN (substituted by his legal heirs, namely: JUANA, SILVERIO, JOSE, GABRIEL, ANICETA, VIRGINIA and FELIX, all surnamed BANDIN); GREGORIO BANDIN, RAYMUNDA BANDIN, VALENTIN BRIONES, SOFIO BRIONES and AGAPITA RAMOS, respondents.Benito P. Fable for petitioners in G.R. No. L-48322.Pedro R. de la Cruz for petitioner in G.R. No. L-49712.David R. Advincula for petitioners in G.R. No. L-49716.Antonio S. Reyes for petitioners in G. R. No. L-49687.Enrique C Villanueva for respondents.YAP,J.:These petitions, which were consolidated by resolution of this Court dated February 20, 1980, stemmed from a complaint filed by the herein respondents with the Court of First Instance of Rizal Branch VII, Pasay City, on June 14, 1963, for the recovery and partition of property. The complaint was amended twice to reflect

additional pertinent and material facts, such as transfers, partitions, subdivisions and registration of portions of the properties involved, and to bring in other indispensable parties to the case.On April 12, 1975, a decision was rendered by the trial court, in favor of the plaintiffs, declaring, however, that certain properties could no longer be reconveyed to plaintiffs since they had been transferred to purchasers who bought them in good faith for value. Not satisfied with the decision, both plaintiffs and defendants appealed to the Court of Appeals. The plaintiffs' appeal was docketed as CA-G.R. No. 58647-R, while that of defendants as CA-G.R. No. 60511-R. . Both appeals were consolidated, and a decision was rendered by the Court of Appeals on May 19, 1978, which modified the decision of the trial court in that it nullified the transfers made to the defendants who were declared by the trial court as purchasers in good faith.From the decision of the Court of Appeals, an appeal was taken by the parties adversely affected thereby to this Court. Except for petitioners in G.R. No. L-49716 who seek restoration of the status quo ante, all other petitioners pray that the decision of the trial court be reinstated.The facts antecedent of this petition, as may be gathered from the decision, are as follows:During their lifetime, the spouses Juan Ramos, who died on March 5, 1919, and Fortunate Calibo, who died before 1919, were the owners of two parcels of land situated in Las Pinas, Rizal: 1) A parcel of land situated in Barrio Talon, with an area of 39,887 square meters, under Tax Declaration No. 9614 (Talon property for short); and 2) A parcel of land situated in Barrio Laong, with an area of 15,993 square meters, under Tax Declaration No. 4005, although the actual area when surveyed was 22,285 square meters (Laong property for short).Both spouses died intestate, leaving as heirs two legitimate children, Candida and Victorians Ramos, and grand-daughter, Agapita Ramos, daughter of their deceased sora Anastacio. Upon the death of the said spouses, their daughter, Candida Ramos, assumed administration of the properties until her death on February 16, 1955. Victorians Ramos died on December 12,1931.Both Candida and Victoriana Ramos died intestate. Candida Ramos was survived by the following heirs: 1) Victoria Martin-Omanbac, 2) Antonio Martin, 3) Juanita Martin Vda. de Lucena, 4) Maximina Martin Vda. de Cosme, 5) Raymundo Martin, 6) Aquilina de la Cruz, and 7) Leonora de la Cruz. Victoriana's heirs are her children from her two marriages, namely: 1) Eulogio Bandin, 2) Gregorio Bandin, 3) Raymunda Bandin, 4) Valentin Briones, and 5) Sofio Briones.The record shows that sometime in 1943, Candida Ramos prevailed upon her niece, Agapita Ramos, and her nephew, Eulogio Bandin, to sell a portion of the Talon property to the spouses Rufino 0. Miranda and Natividad Guinto. This portion was divided into three lots:Parcel 1, containing an area of 24,363 square meters, declared under Tax Declaration No. 2996 (1948). The spouses Rufino Miranda and Natividad Guinto subsequently sold the said lot to Narciso Velasquez and Albino Miranda. These two later sold the same property to Velasquez Realty Company, Inc., which registered the property and obtained OCT No. 1756 (later cancelled and replaced by TCT No. 165335);Parcel 2, containing an area of 752 square meters, declared under Tax Declaration No. 3358 (1949); andParcel 3, containing an area of 516 square meters under Tax Declaration No. 3359 (1949). Parcels 2 and 3 were subsequently sold by Rufino Miranda and Natividad Guinto to Jose Ramirez and Sotero Ramirez (survived by Ambrocia Vda. de Martin), respectively, who registered these properties and obtained OCT Nos. 2027 and 2029 in their respective names.The remaining portion of the Talon property was extrajudicially partitioned on September 17, 1955 among the heirs of Candida Ramos, namely: Juanita Martin, Victoria Martin, Maximina M. Vda. de Cosme, Antonio Martin and Raymundo Martin. In 1959, this property was subdivided (Subdivision Plan PSU-173299) into seven lots and adjudicated as follows:1) To the heirs of Raymundo Martin, namely, Juan, Antonio, Rodrigo, Norma, Bernards, Rufina and Nieves, all surnamed Martin, and Trinidad Bunag Vda. de Martin Lot 1, containing an area of 774 square meters, declared under Tax Declaration No. 5588 (1960). This lot was subsequently sold to Consolacion de la Cruz who was able to register the property in her name under OCT No. 4731 (later cancelled and replaced by TCT Nos. 227470 and 227471).2) To Juanita Martin Lot 2, containing an area of 774 square meters, declared under Tax Declaration No. 4831, and subsequently titled in her name under OCT No. 10002, issued on December 18, 1973.3) To Leonora de la Cruz, granddaughter of Candida Ramos by her son Meliton de la Cruz by her first husband Lot 3, containing an area of 346 square meters, declared under Tax Declaration No. 5526 (1960) and subsequently registered under OCT No. 6102, issued on January 29, 1967.4) To Antonio Martin Lot 4, containing an area of 774 square meters, declared under Tax Declaration No. 4833. The property was subsequently sold by the heirs of Antonio Martin to Nemesio Martin.5) To Victoria Martin Lot 5, containing an area of 773 square meters, declared under Tax Declaration No. 5590. This lot was later registered by Victoria, to whom OCT No. 3706 was issued on August 22, 1963. She subsequently sold a portion of 300 square meters to Magno de la Cruz on September 25,1963, to whom was issued TCT No. 116450.6) To Maximina Martin Lot 6, containing an area of 773 square meters, under Tax Declaration No. 5591 (1960). Maximina was able to register the land and was issued OCT No. 3707 on August 22, 1963. She later sold a portion of 300 square meters to Magno de la Cruz, to whom was issued TCT No. 116450.7) To Aquiline de la Cruz Lot 7, with an area of 428 square meters, declared under Tax Declaration No. 5592 (1960). Aquilina is the granddaughter of Candida Ramos by her son Meliton de la Cruz by her first marriage. Aquilina registered the land in her name in 1967 and was issued OCT No. 6103.

The Laong property was sold by Candida Ramos and her children on December 19, 1943 to Hermogenes Lucena, husband of Juanita Martin, one of the daughters of Candida. On September 23, 1959, Juanita (then widowed) sold the property to the spouses Gregorio and Mary Venturanza for P43,236.00 of which P10,000 was paid as down payment, the balance to be paid upon the vendor obtaining Torrens title to the land. On January 21, 1965, the Venturanzas, in a deed of sale also signed by Juanita Martin, conveyed a portion of the property with an area of 15,000 square meters to the spouses Felipe and Antonia David, in liquidation of the latter's investment in the joint real estate venture which they had entered into with the Venturanzas in April 1959. Juanita Martin Vda. de Lucena was able to register the property in her name and was issued OCT No. 8916 on July 1, 1971. The portion sold to the spouses Felipe and Antonia David is presently covered by TCT No. 372092.From the foregoing facts as established by the evidence, the trial court held that the Talon and Laong properties formed part of the estate of the spouses Juan Ramos and Fortunate Calibo, which after their death devolved by right of succession upon their heirs, namely, Candida Ramos, Victorians Ramos and Agapita Ramos, each of whom was entitled to one-third (1/3) pro-indiviso share of the properties. The estate of the deceased spouses was never judicially or extra-judicialy settled among their heirs, who, therefore, remained pro-indiviso co-owners of the said properties, and upon the death of Victorians and Candida, their respective shares in turn passed to their heirs. Accordingly, the trial court declared the plaintiffs, Agapita Ramos, and the heirs of Victorians Ramos, entitled to two- thirds (2/3) pro-indiviso share of the Talon and Laong properties, and ordered the defendants heirs of Candida Ramos to reconvey to plaintiffs their shares in those properties. However, such reconveyance was no longer possible with respect to the portions which, in the meantime, had been sold and disposed of to third parties who were purchasers in good faith and for value.The following parties were held to be purchasers in good faith. 1) defendants Rufino Miranda, Narciso Velasquez, Albina Miranda and Velasquez Realty Co., with respect to 24,636 square meters (Parcel 1) of the Talon property sold by Candida Ramos, Eulogio Bandin and Agapita Ramos in 1943; 2) defendants Jose Ramirez and Ambrocia Vda. de Ramirez (widow of Sotero Ramirez), with respect to 752 square meters (Parcel 2) and 516 square meters (Parcel 3), respectively, of the Talon property, 3) defendant Consolacion de la Cruz, with respect to 774 square meters (Lot 1 of Subdivision Plan PSU-173299); 4) defendant Nemesio Martin, with respect to 774 square meters (Lot 2 of Subdivision Plan); 5) defendant Magno de la Cruz, with respect to 300 square meters sold by Victoria Martin and 300 square meters sold by Maximina Martin (portions of Lots 5 and 6 of Subdivision Plan); 6) defendant spouses Felipe and Antonia David, with respect to 15,000 square meters of the Laong property. Since the foregoing properties could not be reconveyed to the plaintiffs, the defendants heirs who sold them were ordered to pay the plaintiffs two-thirds (2/3) of the present value of such properties.As stated heretofore, the trial court's decision was upheld by the respondent Court of Appeals, except with respect to the finding that third parties who bought portions of the properties from the defendants heirs were purchasers in good faith This finding was reversed by the respondent appellate court. In fine, the appellate court: a) nullified the sale of the Laong property by Candida Ramos Vda. de Martin and her children in 1943 in favor of Hermogenes Lucena, the husband of Juanita Martin, one of the daughters of Candida, as wen as an subsequent sales, transfers and conveyances of said property, insofar as they affected the two-thirds (2/3) pro-indiviso share of Agapita Ramos and the heirs of Victorians Ramos; b) nullified the sale of portions of the Talon property by Candida Ramos, Eulogio Bandin and Agapita Ramos in 1943 in favor of the spouses Rufino Miranda and Natividad Guinto, and all the subsequent transfers of said properties, insofar as the four-fifteenth (4/15) share of Gregorio Bandin, Raymundo Bandin, Sofio Briones and Valentin Briones were affected; and c) invali dated the deed of extrajudicial partition among the heirs of Candida Ramos over the remaining portion of the Talon property in 1955 and the subdivision thereof into individual lots among said heirs, as well as all subsequent transfers and conveyances of some of said lots, or portions thereof, to third parties, insofar as they affected the two-third (2/3) pro- indiviso share pertaining to Agapita Ramos and the heirs of Victorians Ramos.From the above decision of the Court of Appeals, the petitioners have come to us on separate petitions for review by certiorari.G.R. No. L-49716.:The petitioners are the heirs of Candida Ramos, led by Juanita Martin Vda. de Lucena and joined in by her brothers and sisters who are the children of Candida by her first and second marriages. Primarily, petitioners alleged that the Court of Appeals erred in not declaring that private respondents' claim if any, is barred by prescription; and in annulling and ordering the cancellation of Original Certificate of Title No. 8916 issued in the name of Juanita Martin pursuant to a decision by the land registration court, affirmed by the Court of Appeals in CA G.R. No. 35191-R, which had already become final and executory.Petitioners claim in their brief, apparently referring to the Laong property only, that Juanita Martin, widow of Hermogenes Lucena and daughter of Candida Ramos, had been in possession of the property since 1943 to the exclusion of private respondents. The trial court, however, found that Candida Ramos, until her death on February 15, 1955, administered the Laong property, and that plaintiffs- appellants were given their shares of the fruits thereof, though irregular and at times little, depending on the amount of the harvest. Under Article 494 of the new Civil Code (Article 400 of the old Civil Code), prescription generally does not run in favor of a co-heir or co-owner as long as, he expressly or impliedly recognizes the co-ownership. While an implied or constructive trust prescribes in ten years, the rule does not apply where a fiduciary relation exists and the trustee recognizes the trust.1In the case at bar, there is no showing that the rights of the plaintiffs as co-owners were repudiated by

Candida Ramos in her lifetime; in fact, the evidence as found by the trial court show the contrary.The courta quodid not sustain the defense of laches and prescription put up by the defendants (herein petitioners) since it was not shown that the plaintiffs were guilty of negligence or slept on their rights. They sent a letter of demand to the heirs of Candida Ramos on April 23, 1963, and filed their complaint against them on June 14, 1963, or within a period of approximately eight (8) years from Candida's death.In sustaining the findings of the trial court, the Court of Appeals did not commit any reversible error.Petitioners further invoke the doctrine of res judicata in that the decree of registration of the property in the name of Juanita Martin as owner by the land registration court was affirmed by the Court of Appeals in its decision dated July 16, 1969 in CA G.R. No. 35191-R, which had already become final and executory. Both the respondent Court of Appeals and the trial court correctly rejected the petitioners' contention. There can be no res judicata since private respondents were not parties to the above case. Neither can it be claimed that the decree of registration vested ownership in Juanita Martin. The appellate court, citing jurisprudence established by this Court, held that the purpose of the Land Registration Act is not to create or vest title, but to confirm and register title already vested and existing in the applicant for a title.2G.R. No. L-48322.:The petitioners spouses Felipe David and Antonia G. David purchased portions of the Laong property, consisting of 15,000 square meters, on February 21, 1965 from the spouses Gregorio and Mary Venturanza, who, in turn, purchased the property from Juanita Martin Vda. de Lucena, on September 23, 1959. At the time both purchases took place, the property in question was still an unregistered land. The land was registered in the name of Juanita Martin only on July 1, 1971, to whom was issued OCT No. 8916.Petitioners contend that the Court of Appellee erred in holding that they are buyers in bad faith, in ordering the cancellation of OCT No. 8916 and all subsequent transfer certificates of title derived therefrom, and in ordering petitioners - to reconvey to respondents their two-third (2/3) pro-indiviso share of the land and to segregate therefrom 10,000 square meters for reconveyance to respondents.In assailing the decision of the appellate court, petitioners invoke the doctrine of incontrovertibility of the decree of registration after one year from issuance, and the doctrine of conclusiveness and indivisibility of titles issued under the Torrens system. Petitioners might have stood on solid ground in invoking the above doctrines if they had purchased the property from the registered owner after the issuance of the decree of registration and the corresponding certificate of title in his name.3As the record shows, petitioners bought the property when it was still unregistered land. The defense of having purchased the property in good faith may be availed of only where registered land is involved and the buyer had relied in good faith on the clear title of the registered owner. One who purchases an unregistered land does so at his peril His claim of having bought the land in good faith, i.e. without notice that some other person has a right to, or interest in, the property, would not protect him if it turns out that the seller does not actually own the property. This is what happened in the case at bar.G.R.No. L-49867:In this petition, petitioners Jose Ramirez and the heirs of Ambrocia P. Vda. de Ramirez (widow of Sotero Ramirez), assail the decision of the respondent Court of Appeals declaring them purchasers in bad faith and ordering them to reconvey to the plaintiffs Gregorio Bandin, Raymunda Bandin&A Valentin Briones and Soto Briones, four-fifteenth (4/15) share pro-indiviso of the properties they purchased from the spouses Rufino Miranda and Natividad Guinto. The land in question, containing an area of 516 square meters, more or less, was purchased by Jose Ramirez on June 4, 1949. Sotero Ramirez purchased his land, with an area of 752 square meters on July 9, 1948 and May 10, 1949. These parcels of land purchased by the Ramirezes were part of the portion of the Talon property bought by the spouses Rufino and Natividad Miranda from Candida Ramos, Eulogio Bandin and Agapita Ramos in 1943.The appellate court held that Jose Ramirez and his father Sotero Ramirez were not purchasers in good faith, not having made diligent investigation of the true ownership of the properties they bought, but relied merely on the tax declaration shown to them by the seller, Rufino Miranda. We have no reason to disturb the foregoing findings of the respondent appellate court. Besides, as mentioned earlier, the issue of good faith or bad faith of the buyer is relevant only where the subject of the sale is registered land and the purchaser is buying the same from the registered owner, whose title to the land is clean. In such case, the purchaser who relies on the clean title of the registered owner is protected if he is a purchaser in good faith for value. However, this is not the situation before us in the instant case, What petitioners bought were unregistered lands.Petitioners contend that the respondents are barred by estoppel and laches from recovering the property in question We have already dealt with this issue above. We find the contention without merit.Petitioners suggest that the portion ordered to be taken from the properties of Jose and Sotero Ramirez should be taken instead from the shares which pertain to and are held by the heirs of Candida Ramos. We do not find the suggestion meritorious. The respondents are entitled to their pro- indiviso share of the property unlawfully sold by Candida Ramos, Agapita Ramos and Eulogio Bandin to the Miranda spouses from whom the petitioners bought the parcels of land in question. Hence, it would not be proper for the court to respondents' right to recover their pro-indiviso share of the property only from the remaining portion still in the possession of the heirs of Candida Ramos.G.R. No. L-49712:The case of Magno de la Cruz stands on different footing from the other petitions. The property purchased by him from Victoria Martin and Maximina Martin were registered lands, covered by Torrens title. Being a purchaser in good faith for value, Magno de la Cruz is protected by the law. In the absence of a showing that

he had actual notice of the defect in the title of the vendors or that he is a buyer in bad faith the deed of sale in his favor and the corresponding certificate of title issued in his name can not be nullified and cancelled. Hence, it was error for the respondent court to invalidate the sale made by Victoria and Maximina Martin in favor of Magno de la Cruz to the extent that it prejudiced the two-third (2/3) pro-indiviso share of respondents in the property and to order petitioner to reconvey said share to respondents. The petition of Magno de la Cruz is meritorious, and the decision appealed from should be modified accordingly.WHEREFORE, in view of all the foregoing, judgment is hereby rendered:1. Dismissing the petitions in G.R. Nos. L-48322, L-49716 and L-49687;2. Granting the petition in G.R. No. L-49712, declaring valid the deeds of sale executed by Victoria Martin (Exh. 8-Magno de la Cruz) and Maximina Martin (Exh. 4-Magno de la Cruz) in favor of petitioner Magno de la Cruz, as well as Transfer Certificate of Title No. 116450 issued in the latter's name, ordering Victoria Martin and Maximina Martin to pay the respondents two-third (2/3) of the present value of the property sold by them to Magno de la Cruz, and modifying the appealed decision accordingly; and3. Affirming the appealed decision, except as modified above.No pronouncement as to costs.SO ORDERED.Narvasa, Melencio-Herrera, Cruz, Feliciano and Sarmiento, JJ., concur.Gancayco, J., took no part.SOURCE: http://www.lawphil.net/judjuris/juri1987/apr1987/gr_l_48322_1987.html

Republic of the PhilippinesSUPREME COURTManilaSECOND DIVISIONG.R. No. L-79787 June 29, 1989APOLONIO EGAO AND BEATRIZ EGAO,petitioners,vs.THE HONORABLE COURT OF APPEALS (NINTH DIVISION), SEVERO DIGNOS AND SEVERO BONTILAO,respondents.Eliud J. Pailagao for petitioners.Guerrero A. Adaza for private respondents.PADILLA,J.:This is a land dispute which culminated in the filing by private respondents Severo Dignos and Severo Bontilao of a verified complaint for Quieting of Title and/or Recovery of Possession and Ownership before the RTC of Manolo Fortich, Bukidnon,*against petitioners Apolonio and Beatriz Egao.Private respondents' complaint alleged that they are the legitimate owners and possessors of two (2) parcels of land situated at Lonocan, Manolo Fortich, Bukidnon, per deed of absolute sale dated 21 December 1979 which, among others, recited thus:WHEREAS, the abovementioned Parcels of land Lot No. 662 is covered by Original Certificate of Title No. P-3559 Free Patent No. 298112 registered in the name of APOLONIO EGAO married to Beatriz Menosa and Lot No. 661 is covered by Original Certificate of Title No. P-3558 Free Patent No. 303249 registered in the name of RAULITA CONEJOS married to Pedro Conejos, all transcribed in the Registration Book in the Register of Deeds for the Province of Bukidnon;WHEREAS, Lot No. 662 has been transferred in ownership from BEATRIZ MENOSA EGAO, married to Apolonio Egao in favor of ROBERTO N. MARFORI per Deed of Absolute Sale executed before Tommy C. Pacana, Notary Public of Cagayan de Oro City entered in his Notarial Registry under Doc. No. 75; Page No. 15; Book V Series of 1965; and Lot No. 661 likewise has been transferred in ownership from RAULITA R. CONEJOS in favor of ROBERTO N. MARFORI per Deed of Absolute Sale executed before Tommy C. Pacana, Notary Public of Cagayan de Oro City, dated June 3, 1965, entered in his Notarial Registry under Doc. No. 20; Page 4; Book V; Series of 1965.WHEREAS, the VENDEES herein is [sic] aware of the fact that the Certificate of Title over the abovementioned parcels of land have not yet been transferred in favor of ROBERTO N. MARFORI except for the tax declarations but that the VENDOR herein is in actual, physical, continuous, uninterrupted, and adverse possession of the above described parcels of land free from all liens and encumbrances whatsoever;1Allegedly, upon purchase of Lot No. 662 from Roberto Marfori, improvements were introduced and taxes paid by private respondents. Sometime in June 1983, herein petitioners allegedly occupied illegally portions of the land.2Petitioners' answer to the complaint asserted that Apolonio Egao is the registered owner of the parcel of land known as Lot No. 662, Pls 854 with an area of 3,451 sq. meters evidenced by OCT No. P-3559 issued by the Register of Deeds of Bukidnon pursuant to Free Patent No. 298112 dated 12 August 1965; that he (Apolonio Egao) and his family have been in actual, physical, adverse, open and continuous possession thereof even before the issuance to him of the free patent; that the land has never been sold by reason of the prohibition against alienation under Commonwealth Act No. 141 (Public Land Law); and that the instant case was the fourth in a series filed against the Egaos and is part of respondents' scheme to grab said parcel of land from the petitioners.

Judge Felicidario M. Batoy ruled in favor of the Egaos, herein petitioners (defendants in the courta quo), ordering respondent Severo Bontilao (plaintiff in the court a quo) to immediately deliver to the Egaos the owner's duplicate copy of Original Certificate of Title No. P-3559. Said trial judge held:In the instant case, granting arguendo, that defendants executed the 2 documents in favor of Marfori (Exhs. A & B) after the filing of the application for free patent but before the issuance of the latter, without the approval of the Director of Lands, upon issuance of Free Patent No. 29811 2 on August 12, 1965, the said deeds of sale (Exhs. A & B) wereipso factocancelled or superseded by said free patent. Moreover, it appears from the evidence that defendants never vacated or abandoned their possession of Lot No. 662 as they have continuously lived on said lot since 1950, a fact admitted by the plaintiffs themselves. And as long as Original Certificate of Title No. P-3559 remains in the name of defendant Apolonio Egao, married to Beatriz Menoza Egao, this is the ultimate and best evidence of title granted by the government which must be honored and respected by the courts. In a nutshell, the plaintiffs miserably failed to present or show any title to Lot No. 662, PLS-854 which should be quieted or freed from any cloud of doubt as prayed for in their complaint and they further failed to show that they are entitled to the ownership and possession to Lot No. 662, PLS-854.3Private respondents went to the Court of Appeals in CA-G.R. No. 09539. Setting aside the RTC decision, the appellate court**held, in part, thus-That the land is titled in the name of defendant Apolonio Egao is not in question. The main point in issue is whether defendants could validly sell the land to Marfori who in turn transferred ownership thereof to the plaintiff.4Marfori and Egao were both held by the Court of Appeals inpari delictofor violating the five (5) year restriction under Sec. 118, Commonwealth Act No. 141 as amended by Act No. 496 against encumbrance or alienation of lands acquired under a free patent or homestead; hence, they cannot, according to the appellate court, seek affirmative relief, but respondents on the other hand were declared innocent purchasers for value who obtained the owner's duplicate copy of the OCT (still in the name of the Egaos) from Marfori who transferred to them (respondents) physical possession of the property. Finally, the Court of Appeals held:WHEREFORE, the decision appealed from is hereby SET ASIDE and a new one is rendered:1. Declaring the plaintiffs as the absolute owners of the land known as Lot No. 662, Pls-854 of the Land Registry of Bukidnon;2. Ordering the Register of Deeds of Bukidnon to effect the cancellation of Original Certificate of Title No. P-3559 in the name of Apolonio Egao and in lieu thereof, another one be issued in the names of plaintiffs, after payment of the proper fees;3. Ordering the defendants to surrender peaceful possession of the land to plaintiffs and to desist from further disturbing the possession over the land of plaintiffs;4. Ordering the defendants to pay the costs.SO ORDERED.5Petitioners turn to this Court for relief, assailing the appellate court for allegedly committing grave abuse of discretion amounting to lack of jurisdiction in holding that:a. Petitioners sold Lot 662 to Roberto Marfori;b. It was only in 1983 when Petitioners wrested possession over the land from private respondents;c. Petitioners never denied the sales made in favor of Marfori, in their answer;d. Private Respondents are "innocent purchasers for value.6and/or for allegedly deciding questions of substance not in accordance with law and/or applicable decisions of this Court.Without giving due course to the petition, the Court required respondents to comment.7After comment, the Court resolved to require petitioners to file a reply, which they did. Respondents filed a rejoinder. Considering the allegations, issues and arguments adduced, the Court resolved to give due course to the petition. Upon submission by the parties of their respective memorandum, the petition was submitted for decision.8Validity of the Deeds of Sale executed between Marfori (as purchaser) and the petitioners (as sellers) is the main issue to be resolved, in determining respondents' right over the disputed land, the respondents being the transferees of Marfori.It is undisputed that Free Patent No. 298112 was issued to petitioner Apolonio Egao over Lot No. 662 on 12 August, 1965. Sec. 118 of Commonwealth Act No. 141, as amended, prohibits the alienation or encumbrance, within a period of five (5) years from the date of issuance of the patent, of lands acquired under free patent or homestead. Assuming,arguendo, the authenticity of the Deeds of Sale executed by the Egaos in favor of Marfori over portions of Lot No. 662 (the land in question), dated 7 May 1964, 14 January and 6 October 1965, it clearly appears that all deeds were executed within the prohibited period of five (5) years. As correctly found by the appellate court-Section 124 of the Public Land Act provided [sic] that any acquisition, conveyance, abenation, transfer or other contract made or executed inviolation of any of the provisions of Sections 118,121,120,122 and 123 of this Act shall be unlawful, null and void from its execution and shall produce the effect of annulling and cancelling the grant, title, patent or permit originally issued, recognized or confirmed, actually or prescriptively, and cause the reversion of the property and its improvements to the state.9

Petitioners deny the authenticity and due execution of the notarized deeds of sale in favor of Marfori, asserting continued ownership over the land by virtue of a Torrens Certificate of Title issued in their name. While the Court is not satisfied with respondents' explanation of their failure to present the notaries public (who were residents of a neighboring province) to affirm their participation in the preparation of the Deeds, the Court also finds as insufficient the mere denials by petitioners as to due execution and authenticity of said Deeds of Sale. A notarial document is evidence of the facts in clear unequivocal mariner therein expressed. It has in its favor the presumption of regularity To contradict all these there must be evidence that is clear, convincing and more than merely preponderant.10The question of authenticity being one of fact, the Court will not disturb the conclusions of the Court of Appeals on the matter.Original Certificate of Title No. P-3559 over the land in dispute was issued on 1 March 1966, a few monthsafterthe execution by the Egaos of the last Deed of Sale in favor of Marfori.11The OCT is registered in the name of the Egaos, herein petitioners.A Torrens title, once registered, cannot be defeated, even by adverse open and notorious possession. A registered title under the Torrens system cannot be defeated by prescription. The title, once registered, is notice to the world. All persons must take notice. No one can plead ignorance of the registration.12Contrary to the appellate court's conclusion, respondents are not innocent purchasers for value.13An "innocent purchaser for value" is deemed, under the Torrens system, to include an innocent lessee, mortgagee or other encumbrancer for value.14Where a purchaser neglects to make the necessary inquiries and closes his eyes to facts which should put a reasonable man on his guard as to the possibility of the existence of a defect in his vendor's title, and relying on the belief that there was no defect in the title of the vendor, purchases the property without making any further investigation, he cannot claim that he is a purchaser in good faith for value.15Furthermore, a private individual may not bring an action for reversion or any action which would have the effect of cancelling a free patent and the corresponding certificate of title issued on the basis thereof, with the result that the land covered thereby will again form part of the public domain, as only the Solicitor General or the officer acting in his stead may do so.16The rule ofpari delicto non oritur actio(where two persons are equally at fault neither party may be entitled to relief under the law), admits of exceptions and does not apply to an inexistent contract, such as, a sale voidab initiounder the Public Land Act, when its enforcement or application runs counter to the public policy of preserving the grantee's right to the land under the homestead law.17Sec. 51, par. 2 of the Property Registration Decree (PD 1529), formerly Sec. 50 of the Land Registration Act (Act No. 496) expressly provides that the registration of the Deed is the operative act that binds or affects the land insofar as third persons are concerned. The law requires a higher degree of prudence from one who buys from a person who is not the registered owner, when the land object of the transaction is registered land. While one who buys from the registered owner need not look behind the certificate of title, one who buys from another who isnotthe registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for him to determine if there are any flaws in the title of the transferor, or in his capacity to transfer the land. Failing to exercise caution of any kind whatsoever is tantamount to bad faith.18Deeds of sale of patented lands, perfected within the prohibited five (5) year period are null and void (Sec. 124, Public Land Act). No title passed from the Egaos to Marfori which could be validly transferred to herein respondents Bontilao and Dignos.Nemo dat quod non habet(nobody can dispose of that which does not belong to him).19While the government has not taken steps to assert its title, by reversion, to a homestead sold in violation of the Public Land Act, the vendor or his heirs is better entitled to the possession of the said, the vendee being in no better situation than any intruder.20Accordingly, respondents who are not innocent purchasers for value have no standing to question petitioners' right to the land and to file an action for quieting of title.WHEREFORE, the appealed decision of the Court of Appeals in CA G.R. CV No. 09539 is REVERSED and SET ASIDE. Meanwhile, petitioners as registered owners are entitled to remain in physical possession of the disputed property. Respondents are ordered to deliver the owner's duplicate copy of the OCT (No. P-3559) to petitioners, without prejudice to an action for reversion of the land, which may be instituted by the Solicitor General for the State.Let a copy of this decision be furnished the Solicitor General.SO ORDERED.Melencio-Herrera, (Chairperson), Sarmiento and Regalado, JJ., concur.Paras, J., took no part.

SOURCE: http://www.lawphil.net/judjuris/juri1989/jun1989/gr_l79787_1989.html

Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-18861 June 30, 1964DEVELOPMENT BANK OF THE PHILIPPINES,plaintiff-appellant,vs.LAZARO MANGAWANG, ET AL.,defendants-appellees.Jesus A. Avancea for plaintiff-appellant.Pablo Q. Ilaya for defendants-appellees.BAUTISTA ANGELO,J.:This is an appeal from a decision of the Court Of First instance of Bataan declaring the Mangawang brothers owners of Lot No. 1633 of the Balanga cadastre.It appears that Gavino Amposta applied with the Director of Lands for the issuance of a homestead patent over a parcel of land situated at Balanga, Bataan. Pending action on his application, cadastral proceedings were instituted by the government in said municipality wherein Amposta filed an answer praying for the adjudication of the same land in his favor which was designated therein as Lot No. 1633. On March 8, 1920, the cadastral court rendered decision awarding the land to Amposta. Since no advice on this matter was given either to the Bureau of Lands or to the Governor General, the latter, on November 2, 1920, issued in favor of Amposta Homestead Patent No. 2388 covering the same land, and on November 29, 1920, Original Certificate of Title No. 100 was issued to him by the Governor-General.On December 20, 1922, the cadastral court issued a decree of registration of the land in favor of Amposta pursuant to the decision rendered in the cadastral case, and or, July 5, 1924, Original Certificate of Title No. 2668 was issued to him covering the same property.On November 24, 1941, Amposta sold the land to Santos Camacho surrendering to him Original Certificate of Title No. 100, and because of this transfer said title was cancelled and transfer Certificate of Title No. 5506 was issued in the name of Camacho. On November 18, 1946, Santos-Camacho sold the land to Bonifacio Camacho as a result of which Transfer Certificate of Title No. 248 was issued to the latter. On April 28, 1948, Bonifacio Camacho mortgaged the land to the Rehabilitation Finance Corporation (now Development Bank of the Philippines), and having failed to pay the loan as agreed upon the land was sold at public auction to said bank as the highest bidder. The period of redemption having elapsed without Camacho being able to redeem the property, a final deed of sale was executed in favor of the bank, and Transfer Certificate of Title No. 6961 was issued in its name on June 29, 1957.Meanwhile, or on June 11, 1947, Gavino Amposta again sold the same property to Lazaro and Arsenio Mangawang for the sum of P2,000.00, the vendees executing a mortgage on the land to secure the payment of the balance. On March 17, 1948, the vendees paid the balance of the purchase price, and an absolute deed of sale was executed in their favor. In connection with this transaction, Amposta surrendered to the vendees the title that was issued to him in the cadastral case, which was later substituted by Transfer Certificate of Title No. 1098 issued in the name of the vendees.1wph1.tAs a consequence of their purchase of the land, the Mangawang brothers took possession thereof, and upon learning of this transfer, the Development Bank of the Philippines, which as already stated became the owner of the property, commenced the present action against them in the Court of First Instance of Bataan to recover its possession and damages. In this case, the parties submitted a stipulation of facts, and on the strength thereof, the courta quorendered decision awarding the land to the Mangawang brothers. Seasonably, the bank appealed to this Court.Appellees contend that their right over the property in litigation should be restored because the certificate of title they are holding is derived from that issued pursuant to a decision rendered by a cadastral court, while the title being held by appellant was merely based on the title issued in an administrative proceeding, upon the theory that a judicial title is deemed preferred to one issued administratively. They further contend that since the decision which gave rise to their title was rendered on March 8, 1920, which became final thirty days thereafter, their right over the land must be deemed vested on said date, whereas the title of appellant is merely a deprivation of the one issued to Amposta on November 29, 1920, or seven months after the decision rendered in the cadastral case.There is no doubt that if the two original certificates of title were issued on different occasions to two different persons the contention of appellees would be correct it being in line with the several decisions rendered by this Court.1But