EN BANC

[G.R. No. 135385.  December 6, 2000]

ISAGANI CRUZ and CESAR EUROPA, petitioners, vs. SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES, SECRETARY OF BUDGET AND MANAGEMENT and CHAIRMAN and COMMISSIONERS OF THE NATIONAL COMMISSION ON INDIGENOUS PEOPLES, respondents.

HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAYANI ASCARRAGA, EDTAMI MANSAYANGAN, BASILIO WANDAG, EVELYN DUNUAN, YAOM TUGAS, ALFREMO CARPIANO, LIBERATO A. GABIN, MATERNIDAD M. COLAS, NARCISA M. DALUPINES, BAI KIRAM-CONNIE SATURNO, BAE MLOMO-BEATRIZ T. ABASALA, DATU BALITUNGTUNG-ANTONIO D. LUMANDONG, DATU MANTUMUKAW TEOFISTO SABASALES, DATU EDUAARDO BANDA, DATU JOEL UNAD, DATU RAMON BAYAAN, TIMUAY JOSE ANOY, TIMUAY MACARIO D. SALACAO, TIMUAY EDWIN B. ENDING, DATU SAHAMPONG MALANAW VI, DATU BEN PENDAO CABIGON, BAI NANAPNAY-LIZA SAWAY, BAY INAY DAYA-MELINDA S. REYMUNDO, BAI TINANGHAGA HELINITA T. PANGAN, DATU MAKAPUKAW ADOLINO L. SAWAY, DATU MAUDAYAW-CRISPEN SAWAY, VICKY MAKAY, LOURDES D. AMOS, GILBERT P. HOGGANG, TERESA GASPAR, MANUEL S. ONALAN, MIA GRACE L. GIRON, ROSEMARIE G. PE, BENITO CARINO, JOSEPH JUDE CARANTES, LYNETTE CARANTES-VIVAL, LANGLEY SEGUNDO, SATUR S. BUGNAY, CARLING DOMULOT, ANDRES MENDIOGRIN, LEOPOLDO ABUGAN, VIRGILIO CAYETANO, CONCHITA G. DESCAGA, LEVY ESTEVES, ODETTE G. ESTEVEZ, RODOLFO C. AGUILAR, MAURO VALONES, PEPE H. ATONG, OFELIA T. DAVI, PERFECTO B. GUINOSAO, WALTER N. TIMOL, MANUEL T. SELEN, OSCAR DALUNHAY, RICO O. SULATAN, RAFFY MALINDA, ALFREDO ABILLANOS, JESSIE ANDILAB, MIRLANDO H. MANGKULINTAS, SAMIE SATURNO, ROMEO A. LINDAHAY, ROEL S. MANSANG-CAGAN, PAQUITO S. LIESES, FILIPE G. SAWAY, HERMINIA S. SAWAY, JULIUS S. SAWAY, LEONARDA SAWAY, JIMMY UGYUB, SALVADOR TIONGSON, VENANCIO APANG, MADION MALID, SUKIM MALID, NENENG MALID, MANGKATADONG AUGUSTO DIANO, JOSEPHINE M. ALBESO, MORENO MALID, MARIO MANGCAL, FELAY DIAMILING, SALOME P. SARZA, FELIPE P. BAGON, SAMMY SALNUNGAN, ANTONIO D. EMBA, NORMA MAPANSAGONOS, ROMEO SALIGA, SR., JERSON P. GERADA, RENATO T. BAGON, JR., SARING MASALONG, SOLEDAD M. GERARDA, ELIZABETH L. MENDI, MORANTE S. TIWAN, DANILO M. MALUDAO, MINORS MARICEL MALID, represented by her father CORNELIO MALID, MARCELINO M. LADRA, represented by her father MONICO D. LADRA, JENNYLYN MALID, represented by her father TONY MALID, ARIEL M. EVANGELISTA, represented by her mother LINAY BALBUENA, EDWARD M. EMUY, SR., SUSAN BOLANIO, OND, PULA BATO B’LAAN TRIBAL FARMER’S ASSOCIATION, INTER-PEOPLE’S EXCHANGE, INC. and GREEN FORUM-WESTERN VISAYAS, intervenors.

COMMISSION ON HUMAN RIGHTS, intervenor.

IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION FOR THE CONSERVATION OF NATURAL RESOURCES, INC.,intervenor.

R E S O L U T I O N

PER CURIAM:

Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and mandamus as citizens and taxpayers, assailing the constitutionality of certain provisions of Republic Act No. 8371 (R.A. 8371), otherwise known as the Indigenous Peoples

Rights Act of 1997 (IPRA), and its Implementing Rules and Regulations (Implementing Rules).

In its resolution of September 29, 1998, the Court required respondents to comment.[1] In compliance, respondents Chairperson and Commissioners of the National Commission on Indigenous Peoples (NCIP), the government agency created under the IPRA to implement its provisions, filed on October 13, 1998 their Comment to the Petition, in which they defend the constitutionality of the IPRA and pray that the petition be dismissed for lack of merit.

On October 19, 1998, respondents Secretary of the Department of Environment and Natural Resources (DENR) and Secretary of the Department of Budget and Management (DBM) filed through the Solicitor General a consolidated Comment.  The Solicitor General is of the view that the IPRA is partly unconstitutional on the ground that it grants ownership over natural resources to indigenous peoples and prays that the petition be granted in part.

On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one of the authors of the IPRA, Mr. Ponciano Bennagen, a member of the 1986 Constitutional Commission, and the leaders and members of 112 groups of indigenous peoples (Flavier, et. al), filed their Motion for Leave to Intervene.  They join the NCIP in defending the constitutionality of IPRA and praying for the dismissal of the petition.

On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a Motion to Intervene and/or to Appear as Amicus Curiae.  The CHR asserts that IPRA is an expression of the principle of parens patriae and that the State has the responsibility to protect and guarantee the rights of those who are at a serious disadvantage like indigenous peoples.  For this reason it prays that the petition be dismissed.

On March 23, 1999, another group, composed of the Ikalahan Indigenous People and the Haribon Foundation for the Conservation of Natural Resources, Inc. (Haribon, et al.), filed a motion to Intervene with attached Comment-in-Intervention.  They agree with the NCIP and Flavier, et al. that IPRA is consistent with the Constitution and pray that the petition for prohibition and mandamus be dismissed.

The motions for intervention of the aforesaid groups and organizations were granted.

Oral arguments were heard on April 13, 1999.  Thereafter, the parties and intervenors filed their respective memoranda in which they reiterate the arguments adduced in their earlier pleadings and during the hearing.

Petitioners assail the constitutionality of the following provisions of the IPRA and its Implementing Rules on the ground that they amount to an unlawful deprivation of the State’s ownership over lands of the public domain as well as minerals and other natural resources therein, in violation of the regalian doctrine embodied in Section 2, Article XII of the Constitution:

“(1) Section 3(a) which defines the extent and coverage of ancestral domains, and Section 3(b) which, in turn, defines ancestral lands;

“(2) Section 5, in relation to section 3(a), which provides that ancestral domains including inalienable public lands, bodies of water, mineral and other resources found within ancestral domains are private but community property of the indigenous peoples;

“(3) Section 6 in relation to section 3(a) and 3(b) which defines the composition of ancestral domains and ancestral lands;

“(4) Section 7 which recognizes and enumerates the rights of the indigenous peoples over the ancestral domains;

(5) Section 8 which recognizes and enumerates the rights of the indigenous peoples over the ancestral lands;

“(6) Section 57 which provides for priority rights of the indigenous peoples in the harvesting, extraction, development or exploration of minerals and other natural resources within the areas claimed to be their ancestral domains, and the right to enter into agreements with nonindigenous peoples for the development and utilization of natural resources therein for a period not exceeding 25 years, renewable for not more than 25 years; and

“(7) Section 58 which gives the indigenous peoples the responsibility to maintain, develop, protect and conserve the ancestral domains and portions thereof which are found to be necessary for critical watersheds, mangroves, wildlife sanctuaries, wilderness, protected areas, forest cover or reforestation.”[2]

Petitioners also content that, by providing for an all-encompassing definition of “ancestral domains” and “ancestral lands” which might even include private lands found within said areas, Sections 3(a) and 3(b) violate the rights of private landowners. [3]

In addition, petitioners question the provisions of the IPRA defining the powers and jurisdiction of the NCIP and making customary law applicable to the settlement of disputes involving ancestral domains and ancestral lands on the ground that these provisions violate the due process clause of the Constitution.[4]

These provisions are:

“(1) sections 51 to 53 and 59 which detail the process of delineation and recognition of ancestral domains and which vest on the NCIP the sole authority to delineate ancestral domains and ancestral lands;

“(2) Section 52[i] which provides that upon certification by the NCIP that a particular area is an ancestral domain and upon notification to the following officials, namely, the Secretary of Environment and Natural Resources, Secretary of Interior and Local Governments, Secretary of Justice and Commissioner of the National Development Corporation, the jurisdiction of said officials over said area terminates;

“(3) Section 63 which provides the customary law, traditions and practices of indigenous peoples shall be applied first with respect to property rights, claims of ownership, hereditary succession and settlement of land disputes, and that any doubt or ambiguity in the interpretation thereof shall be resolved in favor of the indigenous peoples;

“(4) Section 65 which states that customary laws and practices shall be used to resolve disputes involving indigenous peoples; and

“(5) Section 66 which vests on the NCIP the jurisdiction over all claims and disputes involving rights of the indigenous peoples.”[5]

Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP Administrative Order No. 1, series of 1998, which provides that “the administrative relationship of the NCIP to the Office of the President is characterized as a lateral but autonomous relationship for purposes of policy and program coordination.”  They contend that said Rule infringes upon the President’s power of control over executive departments under Section 17, Article VII of the Constitution.[6]

Petitioners pray for the following:

“(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66 and other related provisions of R.A. 8371 are unconstitutional and invalid;

“(2) The issuance of a writ of prohibition directing the Chairperson and Commissioners of the NCIP to cease and desist from implementing the assailed provisions of R.A. 8371 and its Implementing Rules;

“(3) The issuance of a writ of prohibition directing the Secretary of the Department of Environment and Natural Resources to cease and desist from implementing Department of Environment and Natural Resources Circular No. 2, series of 1998;

“(4) The issuance of a writ of prohibition directing the Secretary of Budget and Management to cease and desist from disbursing public funds for the implementation of the assailed provisions of R.A. 8371; and

“(5) The issuance of a writ of mandamus commanding the Secretary of Environment and Natural Resources to comply with his duty of carrying out the State’s constitutional mandate to control and supervise the exploration, development, utilization and conservation of Philippine natural resources.”[7]

After due deliberation on the petition, the members of the Court voted as follows:

Seven (7) voted to dismiss the petition.  Justice Kapunan filed an opinion, which the Chief Justice and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity of the challenged provisions of R.A. 8371.  Justice Puno also filed a separate opinion sustaining all challenged provisions of the law with the exception of Section 1, Part II, Rule III of NCIP Administrative Order No. 1, series of 1998, the Rules and Regulations Implementing the IPRA, and Section 57 of the IPRA which he contends should be interpreted as dealing with the large-scale exploitation of natural resources and should be read in conjunction with Section 2, Article XII of the 1987 Constitution.  On the other hand, Justice Mendoza voted to dismiss the petition solely on the ground that it does not raise a justiciable controversy and petitioners do not have standing to question the constitutionality of R.A. 8371.

Seven (7) other members of the Court voted to grant the petition.  Justice Panganiban filed a separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related provisions of R.A. 8371 are unconstitutional.  He reserves judgment on the constitutionality of Sections 58, 59, 65, and 66 of the law, which he believes must await the filing of specific cases by those whose rights may have been violated by the IPRA.  Justice Vitug also filed a separate opinion expressing the view that Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional.  Justices Melo, Pardo,

Buena, Gonzaga-Reyes, and De Leon join in the separate opinions of Justices Panganiban and Vitug.

As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case was redeliberated upon.  However, after redeliberation, the voting remained the same.  Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the petition is DISMISSED.

Attached hereto and made integral parts thereof are the separate opinions of Justices Puno, Vitug, Kapunan, Mendoza, and Panganiban.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Melo, Quisumbing, Pardo, Buena, Gonzaga-Reyes, Ynares-Santiago, and De Leon, Jr., JJ., concur.

Puno, Vitug, Kapunan, Mendoza and Panganiban JJ., see separate opinion

Republic of the PhilippinesSupreme Court

Manila 

                                                 EN BANC 

 THE SECRETARY OF THE                             G.R. No. 167707DEPARTMENT OF ENVIRONMENTAND NATURAL RESOURCES, THEREGIONAL EXECUTIVE                       Present:DIRECTOR, DENR-REGION VI,REGIONAL TECHNICAL                           PUNO, C.J.,DIRECTOR FOR LANDS,                          QUISUMBING,LANDS MANAGEMENT BUREAU,           YNARES-SANTIAGO,       REGION VI PROVINCIAL                         CARPIO,ENVIRONMENT AND NATURAL                   AUSTRIA-MARTINEZ,RESOURCES OFFICER OF KALIBO,      CORONA,*

AKLAN, REGISTER OF DEEDS,               CARPIO MORALES,DIRECTOR OF LAND                                      AZCUNA,REGISTRATION AUTHORITY,                TINGA,DEPARTMENT OF TOURISM                  CHICO-NAZARIO,SECRETARY, DIRECTOR OF                  VELASCO, JR.,PHILIPPINE TOURISM                              NACHURA,**

AUTHORITY,                                               REYES,                                      Petitioners,                LEONARDO-DE CASTRO, and                                                                       BRION, JJ.                                                                  

        -   versus   -                                      

MAYOR JOSE S. YAP, LIBERTADTALAPIAN, MILA Y. SUMNDAD, andANICETO YAP, in their behalf and         Promulgated:in behalf of all those similarly situated,

Respondents.            October 8, 2008 x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x DR. ORLANDO SACAY and                              G.R. No. 173775WILFREDO GELITO, joined byTHE LANDOWNERS OFBORACAY SIMILARLYSITUATED NAMED IN A LIST,ANNEX “A” OF THIS PETITION,                                      Petitioners,  

        -   versus   -                                                                                                THE SECRETARY OF THEDEPARTMENT OF ENVIRONMENTAND NATURAL RESOURCES, THEREGIONAL TECHNICALDIRECTOR FOR LANDS, LANDSMANAGEMENT BUREAU,REGION VI, PROVINCIALENVIRONMENT AND NATURALRESOURCES OFFICER, KALIBO,AKLAN,

Respondents. 

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x 

D E C I S I O N  REYES, R.T., J.:  

AT stake in these consolidated cases is the right of the present occupants of Boracay Island to secure titles over their occupied lands. 

There are two consolidated petitions.  The first is G.R. No. 167707, a petition for review on certiorari of the Decision[1] of the Court of Appeals (CA) affirming that[2] of the Regional Trial Court (RTC) in Kalibo, Aklan, which granted the petition for declaratory relief filed by respondents-claimants Mayor Jose Yap, et al. and ordered the survey of Boracay for titling purposes.  The second is G.R. No. 173775, a petition for prohibition, mandamus, and nullification of Proclamation No. 1064[3] issued by President Gloria Macapagal-Arroyo classifying Boracay into reserved forest and agricultural land. 

The Antecedents 

G.R. No. 167707 

Boracay Island in the Municipality of Malay, Aklan, with its powdery white sand beaches and warm crystalline waters, is reputedly a premier Philippine tourist destination.  The island is also home to 12,003 inhabitants[4] who live in the bone-shaped island’s three barangays.[5]

 On April 14, 1976, the Department of Environment and Natural

Resources  (DENR) approved  the  National Reservation  Survey of BoracayIsland,[6] which identified several lots as being occupied or claimed by named persons.[7]

 On November 10, 1978, then President Ferdinand Marcos issued

Proclamation No. 1801[8] declaring Boracay Island, among other islands, caves and peninsulas in the Philippines, as tourist zones and marine reserves under the administration of the Philippine Tourism Authority (PTA).  President Marcos later approved the issuance of PTA Circular 3-82[9] dated September 3, 1982, to implement Proclamation No. 1801. 

Claiming that Proclamation No. 1801 and PTA Circular No 3-82 precluded them from filing an application for judicial confirmation of imperfect title or survey of land for titling purposes, respondents-claimants 

Mayor  Jose  S.  Yap, Jr.,  Libertad Talapian, Mila Y. Sumndad, and Aniceto Yap filed a petition for declaratory relief with the RTC in Kalibo, Aklan. 

In their petition, respondents-claimants alleged that Proclamation No. 1801 and PTA Circular No. 3-82 raised doubts on their right to secure titles over their occupied lands.  They declared that they themselves, or through their predecessors-in-interest, had been in open, continuous, exclusive, and notorious possession and occupation in Boracay since June 12, 1945, or earlier since time immemorial.  They declared their lands for tax purposes and paid realty taxes on them.[10]

 Respondents-claimants posited that Proclamation No. 1801 and its

implementing Circular did not place Boracay beyond the commerce of man.  Since theIsland was classified as a tourist zone, it was susceptible of private ownership.  Under Section 48(b) of Commonwealth Act (CA) No. 141, otherwise known as the Public Land Act, they had the right to have the lots registered in their names through judicial confirmation of imperfect titles. 

The Republic, through the Office of the Solicitor General (OSG), opposed the petition for declaratory relief.  The OSG countered that Boracay Island was an unclassified land of the public domain.  It formed part of the mass of lands classified as “public forest,” which was not available for disposition pursuant to Section 3(a) of Presidential Decree (PD) No. 705 or the Revised Forestry Code,[11] as amended. 

The OSG maintained that respondents-claimants’ reliance on PD No. 1801 and PTA Circular No. 3-82 was misplaced.  Their right to judicial confirmation of title was governed by CA No. 141 and PD No. 705.  Since Boracay Island had not been classified as alienable and disposable, whatever possession they had cannot ripen into ownership. 

During pre-trial, respondents-claimants and the OSG stipulated on the following facts:  (1) respondents-claimants were presently in possession of parcels of land in Boracay Island; (2) these parcels of land were planted with coconut trees and other natural growing trees; (3) the coconut trees had heights of more or less

twenty (20) meters and were planted more or less fifty (50) years ago; and  (4) respondents-claimants declared the land they were occupying for tax purposes.[12]

 The parties also agreed that the principal issue for resolution was purely

legal: whether Proclamation No. 1801 posed any legal hindrance or impediment to the titling of the lands in Boracay.  They decided to forego with the trial and to submit the case for resolution upon submission of their respective memoranda.[13]

 The RTC took judicial notice[14] that certain parcels of land

in Boracay Island, more particularly Lots 1 and 30, Plan PSU-5344, were covered by Original Certificate of Title No. 19502 (RO 2222) in the name of the Heirs of Ciriaco S. Tirol.  These lots were involved in Civil Case Nos. 5222 and 5262 filed before theRTC  of  Kalibo,  Aklan.[15]  The  titles  were  issued  onAugust 7, 1933.[16]

 RTC and CA Dispositions

 On July 14, 1999, the RTC rendered a decision in favor of respondents-

claimants, with a fallo reading: 

WHEREFORE, in view of the foregoing, the Court declares that Proclamation No. 1801 and PTA Circular No. 3-82 pose no legal obstacle to the petitioners and those similarly situated to acquire title to their lands in Boracay, in accordance with the applicable laws and in the manner prescribed therein; and to have their lands surveyed and approved by respondent Regional Technical Director of Lands as the approved survey does not in itself constitute a title to the land.

 SO ORDERED.[17]

 The RTC upheld respondents-claimants’ right to have their occupied lands

titled in their name.  It ruled that neither Proclamation No. 1801 nor PTA Circular No. 3-82 mentioned that lands in Boracay were inalienable or could not be the subject of disposition.[18]  The Circular itself recognized private ownership of lands.[19]  The trial court cited Sections 87[20] and 53[21] of the Public Land Act as basis for acknowledging private ownership of lands in Boracay and that only those forested areas in public lands were declared as part of the forest reserve.[22]

 The OSG moved for reconsideration but its motion was denied.[23]  The

Republic then appealed to the CA. 

On December 9, 2004, the appellate court affirmed in toto the RTC decision, disposing as follows: 

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DENYING the appeal filed in this case and AFFIRMING the decision of the lower court.[24]

  

The CA held that respondents-claimants could not be prejudiced by a declaration that the lands they occupied since time immemorial were part of a forest reserve. 

Again, the OSG sought reconsideration but it was similarly denied.[25]  Hence, the present petition under Rule 45. 

G.R. No. 173775           On May 22, 2006, during the pendency of G.R. No. 167707, President Gloria Macapagal-Arroyo issued Proclamation No. 1064[26] classifying Boracay Island into four hundred (400) hectares of reserved forest land (protection purposes) and six hundred twenty-eight and 96/100 (628.96) hectares of agricultural land (alienable and disposable).  The Proclamation likewise provided for a fifteen-meter buffer zone on each side of the centerline of roads and trails, reserved for right-of-way and which shall form part of the area reserved for forest land protection purposes. 

On August 10, 2006, petitioners-claimants Dr. Orlando Sacay,[27] Wilfredo Gelito,[28] and other landowners[29] in Boracay filed with this Court an original petition for prohibition, mandamus, and nullification of Proclamation No. 1064.[30]  They allege  that the Proclamation infringed on their “prior vested rights” over portions of Boracay.  They have been in continued possession of their respective lots in Boracay since time immemorial.  They have also invested billions of pesos

in developing their lands and building internationally renowned first class resorts on their lots.[31]

  

Petitioners-claimants contended that there is no need for a proclamation reclassifying Boracay into agricultural land.  Being classified as neither mineral nor timber land, the island is deemed agricultural pursuant to the Philippine Bill of 1902 and Act No. 926,  known as the first Public Land Act.[32]  Thus, their possession in the concept of owner for the required period entitled them to judicial confirmation of imperfect title. 

Opposing the petition, the OSG argued that petitioners-claimants do not have a vested right over their occupied portions in the island.  Boracay is an unclassified public forest land pursuant to Section 3(a) of PD No. 705.  Being public forest, the claimed portions of the island are inalienable and cannot be the subject of judicial confirmation of imperfect title.  It is only the executive department, not the courts, which has authority to reclassify lands of the public domain into alienable and disposable lands.  There is a need for a positive government act in order to release the lots for disposition. 

On November 21, 2006, this Court ordered the consolidation of the two petitions as they principally involve the same issues on the land classification ofBoracay Island.[33]

 Issues

 G.R. No. 167707

 The OSG raises the lone issue of whether Proclamation No. 1801

and PTA Circular No. 3-82 pose any legal obstacle for respondents, and all those similarly situated, to acquire title to their occupied lands in Boracay Island.[34]

   

G.R. No. 173775 

Petitioners-claimants hoist five (5) issues, namely: 

I.AT THE TIME OF THE ESTABLISHED POSSESSION OF PETITIONERS IN CONCEPT OF OWNER OVER THEIR RESPECTIVE AREAS IN BORACAY, SINCE TIME IMMEMORIAL OR AT THE LATEST SINCE 30 YRS. PRIOR TO THE FILING OF THE PETITION FOR DECLARATORY RELIEF ON NOV. 19, 1997, WERE THE AREAS OCCUPIED BY THEM PUBLIC AGRICULTURAL LANDS AS DEFINED BY   LAWS   THEN  ON JUDICIAL CONFIRMATION OF IMPERFECT TITLES OR PUBLIC FOREST AS DEFINED BY   SEC. 3a, PD 705 ? 

II.HAVE PETITIONERS OCCUPANTS ACQUIRED PRIOR VESTED RIGHT OF PRIVATE OWNERSHIP OVER THEIR OCCUPIED PORTIONS OF BORACAY LAND, DESPITE THE FACT THAT THEY HAVE NOT APPLIED YET FOR JUDICIAL CONFIRMATION OF IMPERFECT TITLE? 

III.IS THE EXECUTIVE DECLARATION OF THEIR AREAS AS ALIENABLE   AND   DISPOSABLE  UNDER SEC 6, CA 141 [AN] INDISPENSABLE PRE-REQUISITE FOR PETITIONERS TO OBTAIN TITLE UNDER THE TORRENS SYSTEM? 

IV.IS THE ISSUANCE OF PROCLAMATION 1064 ON   MAY   22, 2006, VIOLATIVE OF THE PRIOR VESTED RIGHTS TO PRIVATE OWNERSHIP OF PETITIONERSOVER THEIR LANDS IN BORACAY, PROTECTED BY THE DUE PROCESS CLAUSE OF THE CONSTITUTION OR IS PROCLAMATION 1064 CONTRARY TO SEC. 8, CA 141, OR SEC. 4(a) OF RA 6657. 

V.CAN RESPONDENTS BE COMPELLED BY MANDAMUS TO ALLOW THE SURVEY   AND   TO APPROVE THE SURVEY PLANS FOR PURPOSES OF THE APPLICATION FOR TITLING OF THE LANDS OF PETITIONERS IN BORACAY?[35]  (Underscoring supplied)

 

In capsule, the main issue is whether private claimants (respondents-claimants in G.R. No. 167707 and petitioners-claimants in G.R. No. 173775) have a right to secure titles over their occupied portions in Boracay.  The twin petitions pertain to their right, if any, to judicial confirmation of imperfect title under CA No. 141, as amended. They do not involve their right to secure title under other pertinent laws. 

Our Ruling 

Regalian Doctrine and power of the executiveto reclassify lands of the public domain

 Private claimants rely on three (3) laws and executive acts in their bid for

judicial confirmation of imperfect title, namely: (a) Philippine Bill of 1902 [36] in relation to Act No. 926, later amended and/or superseded by Act No. 2874 and CA No. 141;[37]  (b) Proclamation No. 1801[38] issued by then President Marcos; and (c) Proclamation No. 1064[39] issued by President Gloria Macapagal-Arroyo.  We shall proceed to determine their rights to apply for judicial confirmation of imperfect title under these laws and executive acts. 

But first, a peek at the Regalian principle and the power of the executive to reclassify lands of the public domain. 

The 1935 Constitution classified lands of the public domain into agricultural, forest or timber.[40]  Meanwhile, the 1973 Constitution provided the following divisions: agricultural, industrial or commercial, residential, resettlement, mineral, timber or forest and grazing lands, and such other classes as may be provided by law,[41] giving the government great leeway for classification.[42] Then the 1987 Constitution reverted to the 1935 Constitution classification with one addition: national parks.[43]  Of these, only agricultural lands may be alienated.[44]  Prior to Proclamation No. 1064 of May 22, 2006, Boracay Island had never been expressly and administratively classified under any of these grand divisions.  Boracay was an unclassified land of the public domain. 

The Regalian Doctrine dictates that all lands of the public domain belong to the State, that the State is the source of any asserted right to ownership of land and charged with the conservation of such patrimony.[45]  The doctrine has been consistently adopted under the 1935, 1973, and 1987 Constitutions.[46]

 All lands not otherwise appearing to be clearly within private ownership are

presumed to belong to the State.[47]  Thus, all lands that have not been acquired from the government, either by purchase or by grant, belong to the State as part of the inalienable public domain.[48]  Necessarily, it is up to the State to determine if lands of the public domain will be disposed  of for private ownership. The government, as the agent of the state, is possessed of the plenary power as the persona in law to determine who shall be the favored recipients of public lands, as well as under what terms they may be granted such privilege, not excluding the placing of obstacles in the way of their exercise of what otherwise would be ordinary acts of ownership.[49]

 Our present land law traces its roots to the Regalian Doctrine.  Upon the

Spanish conquest of the Philippines, ownership of all lands, territories and possessions in the Philippines passed to the Spanish Crown.[50]  The Regalian doctrine was first introduced in the Philippines through the Laws of the Indies and the Royal Cedulas, which laid the foundation that “all lands that were not acquired from the Government, either by purchase or by grant, belong to the public domain.”[51]

 The Laws of the Indies was followed by the Ley Hipotecaria or

the Mortgage Law of 1893.  The Spanish Mortgage Law provided for the systematic registration of titles and deeds as well as possessory claims.[52]

 The Royal Decree of 1894 or  the Maura Law[53] partly amended the Spanish

Mortgage Law and the Laws of the Indies.  It established possessory information as the method of legalizing possession of vacant Crown land, under certain conditions which were set forth in said decree.[54]  Under Section 393 of the Maura Law, an informacion posesoria or possessory information title,[55] when duly inscribed in the Registry of Property, is converted into a title of ownership only after the lapse of twenty (20) years of uninterrupted possession which must be actual, public, and adverse,[56] from the date of its inscription.[57]However, possessory information title

had to be perfected one year after the promulgation of the Maura Law, or until April 17, 1895.  Otherwise, the lands would revert to the State.[58]

 In sum, private ownership of land under the Spanish regime could only be

founded  on royal concessions which took various forms, namely:   (1) titulo realor royal grant; (2) concesion especial or special grant;          (3) composicion con el estado or adjustment title; (4) titulo de compra or title by purchase; and (5)informacion posesoria or possessory information title.[59]

 The first law governing the disposition of public lands in

the Philippines under American rule was embodied in the Philippine Bill of 1902.[60]  By this law, lands of the public domain in the Philippine Islands were classified into three (3) grand divisions, to wit: agricultural, mineral, and timber or forest lands.[61]  The act provided for, among others, the disposal of mineral lands by means of absolute grant (freehold system) and by lease (leasehold system). [62]  It also provided the definition by exclusion of “agricultural public lands.”[63]  Interpreting the meaning of “agricultural lands” under the Philippine Bill of 1902, the Court declared inMapa v. Insular Government:[64]

  

x x x  In other words, that the phrase “agricultural land” as used in Act No. 926 means those public lands acquired from Spain which are not timber or mineral lands.  x x x[65] (Emphasis Ours)

 On February 1, 1903, the Philippine Legislature passed Act No. 496,

otherwise known as the Land Registration Act.  The act established a system of registration by which recorded title becomes absolute, indefeasible, and imprescriptible.  This is known as the Torrens system.[66]

 Concurrently, on October 7, 1903, the Philippine Commission passed Act

No. 926, which was the first Public Land Act.  The Act introduced the homestead system and made provisions for judicial and administrative confirmation of imperfect titles and for the sale or lease of public lands.  It permitted corporations regardless of the nationality of persons owning the controlling stock to lease or purchase lands of the public domain.[67]  Under the Act, open, continuous, exclusive, and notorious possession and occupation of agricultural lands for the

next ten (10) years preceding July 26, 1904 was sufficient for judicial confirmation of imperfect title.[68]

 On November 29, 1919, Act No. 926 was superseded by Act No. 2874,

otherwise known as the second Public Land Act. This new, more comprehensive law limited the exploitation of agricultural lands to Filipinos and Americans and citizens of other countries which gave Filipinos the same privileges.  For judicial confirmation of title, possession and occupation en concepto dueño since time immemorial, or since July 26, 1894, was required.[69]

 After the passage of the 1935 Constitution, CA No. 141 amended Act No.

2874 on December 1, 1936.  To this day, CA No. 141, as amended, remainsas the existing general law governing the classification and disposition of lands of the public domain other than timber and mineral lands,[70] and privately owned lands which reverted to the State.[71]

 Section 48(b) of CA No. 141 retained the requirement under Act No. 2874

of possession and occupation of lands of the public domain since time immemorial or since July 26, 1894.  However, this provision was superseded by Republic Act (RA) No. 1942,[72] which provided for a simple thirty-year prescriptive period for judicial confirmation of imperfect title.  The provision was last amended by PD No. 1073,[73] which now provides for possession and occupation of the land applied for since June 12, 1945, or earlier.[74]

 The issuance of PD No. 892[75] on February 16, 1976 discontinued the use of

Spanish titles as evidence in land registration proceedings.[76]  Under the decree, all holders of Spanish titles or grants should apply for registration of their lands under Act No. 496 within six (6) months from the effectivity of the decree on February 16, 1976.  Thereafter, the recording of all unregistered lands[77] shall be governed by Section 194 of the Revised Administrative Code, as amended by Act No. 3344. 

On June 11, 1978, Act No. 496 was amended and updated by PD No. 1529, known as the Property Registration Decree.  It was enacted to codify the various laws relative to registration of property.[78]  It governs registration of lands under the Torrens system as well as unregistered lands, including chattel mortgages.[79]

 

A positive act declaring land as alienable and disposable is required.  In keeping with the presumption of State ownership, the Court has time and again emphasized that there must be a positive act of the government, such as an official proclamation,[80] declassifying inalienable public land into disposable land for agricultural or other purposes.[81]  In fact, Section 8 of CA No. 141 limits alienable or disposable lands only to those lands which have been “officially delimited and classified.”[82]

 The burden of proof in overcoming the presumption of State ownership of

the lands of the public domain is on the person applying for registration (or claiming ownership), who must prove that the land subject of the application is alienable or disposable.[83]  To overcome this presumption, incontrovertible evidence must be established that the land subject of the application (or claim) is alienable or disposable.[84]  There must still be a positive act declaring land of the public domain as alienable and disposable.  To prove that the land subject of an application for registration is alienable, the applicant must establish the existence of a positive act of the government such as a presidential proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute.[85]  The applicant may also secure a certification from the government that the land claimed to have been possessed for the required number of years is alienable and disposable.[86]

 In the case at bar, no such proclamation, executive order, administrative

action, report, statute, or certification was presented to the Court.  The records are bereft of evidence showing that, prior to 2006, the portions of Boracay occupied by private claimants were subject of a government proclamation that the land is alienable and disposable.  Absent such well-nigh incontrovertible evidence, the Court cannot accept the submission that lands occupied by private claimants were already open to disposition before 2006.  Matters of land classification or reclassification cannot be assumed.  They call for proof.[87]

 Ankron and De Aldecoa did not make the whole of Boracay Island, or

portions of it, agricultural lands. Private claimants posit that Boracay was already an agricultural land pursuant to the old cases Ankron v. Government of the Philippine Islands (1919)[88] and De Aldecoa v. The Insular Government (1909).[89]  These cases were decided under the provisions of the Philippine Bill of 1902

and Act No. 926.  There is a statement in these old cases that “in the absence of evidence to the contrary, that in each case the lands are agricultural lands until the contrary is shown.”[90]

 Private claimants’ reliance on Ankron and De Aldecoa is misplaced.  These

cases did not have the effect of converting the whole of Boracay Island or portions of it into agricultural lands.  It should be stressed that the Philippine Bill of 1902 and Act No. 926 merely provided the manner through which land registration courts would classify lands of the public domain.  Whether the land would be classified as timber, mineral, or agricultural depended on proof presented in each case. 

Ankron and De Aldecoa were decided at a time when the President of the Philippines had no power to classify lands of the public domain into mineral, timber, and agricultural.  At that time, the courts were free to make corresponding classifications in justiciable cases, or were vested with implicit power to do so, depending upon the preponderance of the evidence.[91]  This was the Court’s ruling in Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols Vda. De Palanca v. Republic,[92] in which it stated, through Justice Adolfo Azcuna, viz.:

 x x x  Petitioners furthermore insist that a particular land need not

be formally released by an act of the Executive before it can be deemed open to private ownership, citing the cases of Ramos v. Director of Lands and Ankron v. Government of the Philippine Islands.

 x x x x

 Petitioner’s reliance upon Ramos v. Director of Lands and Ankron

v. Government is misplaced. These cases were decided under the Philippine Bill of 1902 and the first Public Land Act No. 926 enacted by the Philippine Commission on October 7, 1926, under which there was no legal provision vesting in the Chief Executive or President of the Philippines the power to classify lands of the public domain into mineral, timber and agricultural so that the courts then were free to make corresponding classifications in justiciable cases, or were vested with implicit power to do so, depending upon the preponderance of the evidence.[93]

 

To aid the courts in resolving land registration cases under Act No. 926, it was then necessary to devise a presumption on land classification.  Thus evolved the dictum in Ankron that “the courts have a right to presume, in the absence of evidence to the contrary, that in each case the lands are agricultural lands until the contrary is shown.”[94]

   

But We cannot unduly expand the presumption in Ankron and De Aldecoa to an argument that all lands of the public domain had been automatically reclassified as disposable and alienable agricultural lands.  By no stretch of imagination did the presumption convert all lands of the public domain into agricultural lands. 

If We accept the position of private claimants, the Philippine Bill of 1902 and Act No. 926 would have automatically made all lands in the Philippines, except those already classified as timber or mineral land, alienable and disposable lands.  That would take  these lands out of State ownership and worse, would be utterly inconsistent with and totally repugnant to the long-entrenched Regalian doctrine. 

The presumption in Ankron and De Aldecoa attaches only to land registration cases brought under the provisions of Act No. 926, or more specifically those cases dealing with judicial and administrative confirmation of imperfect titles.  The presumption applies to an applicant for judicial or administrative conformation of imperfect title under Act No. 926.  It certainly cannot apply to landowners, such as private claimants or their predecessors-in-interest, who failed to avail themselves of the benefits of Act No. 926.  As to them, their land remained unclassified and, by virtue of the Regalian doctrine, continued to be owned by the State. 

In any case, the assumption in Ankron and De Aldecoa was not absolute.  Land classification was, in the end, dependent on proof.  If there was proof that the land was better suited for non-agricultural uses, the courts could  adjudge it as a mineral or timber land despite the presumption.  In Ankron, this Court stated: 

In the case of Jocson vs. Director of Forestry (supra), the Attorney-General admitted in effect that whether the particular land in question belongs to one class or another is a question of fact.  The mere fact that a tract of land has trees upon it or has mineral within it is not of itself sufficient to declare that one is forestry land and the other, mineral land.  There must be some proof of the extent and present or future value of the forestry and of the minerals.  While, as we have just said,  many definitions have been given for “agriculture,” “forestry,” and “mineral” lands, and that in each case it is a question of fact, we think it is safe to say that in order to be forestry or mineral land the proof must show that it is more valuable for the forestry or the mineral which it contains than it is for agricultural purposes. (Sec. 7, Act No. 1148.)  It is not sufficient to show that there exists some trees upon the land or that it bears some mineral. Land may be classified as forestry or mineral today, and, by reason of the exhaustion of the timber or mineral, be classified as agricultural land tomorrow.  And vice-versa, by reason of the rapid growth of timber or the discovery of valuable minerals, lands classified as agricultural today may be differently classified tomorrow.  Each case must be decided upon the proof in that particular case, having regard for its present or future value for one or the other purposes.  We believe, however, considering the fact that it is a matter of public knowledge that a majority of the lands in the Philippine Islands are agricultural lands that the courts have a right to presume, in the absence of evidence to the contrary, that in each case the lands are agricultural lands until the contrary is shown.  Whatever the land involved in a particular land registration case is forestry or mineral land must, therefore, be a matter of proof.  Its superior value for one purpose or the other is a question of fact to be settled by the proof in each particular case.  The fact that the land is a manglar [mangrove swamp] is not sufficient for the courts to decide whether it is agricultural, forestry, or mineral land.  It may perchance belong to one or the other of said classes of land.  The Government, in the first instance, under the provisions of Act No. 1148, may, by reservation, decide for itself what portions of public land shall be considered forestry land, unless private interests have intervened before such reservation is made.  In the latter case, whether the land is agricultural, forestry, or mineral, is a question of proof. Until private interests have intervened, the Government, by virtue of the terms of said Act (No. 1148), may decide for itself what portions of the “public domain” shall be set aside and reserved as forestry or mineral land. (Ramos vs. Director of

Lands, 39 Phil. 175; Jocson vs. Director of Forestry, supra)[95] (Emphasis ours)

 Since 1919, courts were no longer free to determine the classification of

lands from the facts of each case, except those that have already became private lands.[96]  Act No. 2874, promulgated in 1919 and reproduced in Section 6 of CA No. 141, gave the Executive Department, through the President, the exclusiveprerogative to classify or reclassify public lands into alienable or disposable, mineral or forest.96-a  Since then, courts no longer had the authority, whether express or implied, to determine the classification of lands of the public domain.[97]

 Here, private claimants, unlike the Heirs of Ciriaco Tirol who were issued

their title in 1933,[98] did not present a justiciable case for determination by the land registration court of the property’s land classification.  Simply put, there was no opportunity for the courts then to resolve if the land the Boracay occupants are now claiming were agricultural lands.  When Act No. 926 was supplanted by Act No. 2874 in 1919, without an application for judicial confirmation having been filed by private claimants or their predecessors-in-interest, the courts were no longer authorized to determine  the property’s land classification.  Hence, private claimants cannot bank on Act No. 926. 

We note that the RTC decision[99] in G.R. No. 167707 mentioned Krivenko v. Register of Deeds of Manila,[100] which was decided in 1947 when CA No. 141, vesting the Executive with the sole power to classify lands of  the public domain was already in effect.  Krivenko cited the old cases Mapa v. Insular Government,[101] De Aldecoa v. The Insular Government,[102] and Ankron v. Government of the Philippine Islands.[103]

 Krivenko, however, is not controlling here because it involved a totally

different issue. The pertinent issue in Krivenko was whether residential lots were included in the general classification of agricultural lands; and if so, whether an alien could acquire a residential lot.  This Court ruled that as an alien, Krivenko was prohibited by the 1935 Constitution[104] from acquiring agricultural land, which included residential lots.  Here, the issue is whether unclassified lands of the public domain are automatically deemed agricultural.

  

Notably, the definition of “agricultural public lands” mentioned in Krivenko relied on the old cases decided prior to the enactment of Act No. 2874, includingAnkron and De Aldecoa.[105]  As We have already stated, those cases cannot apply here, since they were decided when the Executive did not have the authority to classify lands as agricultural, timber, or mineral. 

Private claimants’ continued possession under Act No. 926 does not create a presumption that the land is alienable.  Private claimants also contend that their continued possession of portions of Boracay Island for the requisite period of ten (10) years under Act No. 926[106] ipso facto converted the island into private ownership.  Hence, they may apply for a title in their name. 

A similar argument was squarely rejected by the Court in Collado v. Court of Appeals.[107]  Collado, citing the separate opinion of now Chief Justice Reynato S. Puno in Cruz v. Secretary of Environment and Natural Resources,107-a ruled: 

“Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the Philippine Bill of 1902. The law governed the disposition of lands of the public domain. It prescribed rules and regulations for the homesteading, selling and leasing of portions of the public domain of the Philippine Islands, and prescribed the terms and conditions to enable persons to perfect their titles to public lands in the Islands. It also provided for the “issuance of patents to certain native settlers upon public lands,” for the establishment of town sites and sale of lots therein, for the completion of imperfect titles, and for the cancellation or confirmation of Spanish concessions and grants in the Islands.” In short, the Public Land Act operated on the assumption that title to public lands in the Philippine Islands remained in the government; and that the government’s title to public land sprung from the Treaty of Paris and other subsequent treaties between Spain and the United States. The term “public land” referred to all lands of the public domain whose title still remained in the government and are thrown open to private

appropriation and settlement, and excluded the patrimonial property of the government and the friar lands.”

 

Thus, it is plain error for petitioners to argue that under the Philippine Bill of 1902 and Public Land Act No. 926, mere possession by private individuals of lands creates the legal presumption that the lands are alienable and disposable.[108] (Emphasis Ours)

 Except for lands already covered by existing titles, Boracay was an

unclassified land of the public domain prior to Proclamation No. 1064.  Such unclassified lands are considered public forest under PD No. 705.  The DENR[109] and the National Mapping and Resource Information Authority[110] certify that Boracay Island is an unclassified land of the public domain. 

PD No. 705 issued by President Marcos categorized all unclassified lands of  the public domain as public forest.  Section 3(a) of PD No. 705 defines a public forest as “a mass of lands of the public domain which has not been the subject of the present system of classification for the determination of which lands are needed for forest purpose and which are not.”  Applying PD No. 705, all unclassified lands, including those in Boracay Island, are ipso facto considered public forests.  PD No. 705, however, respects titles already existing prior to its effectivity. 

The Court notes that the classification of Boracay as a forest land under PD No. 705 may seem to be out of touch with the present realities in the island. Boracay, no doubt, has been partly stripped of its forest cover to pave the way for commercial developments.  As a premier tourist destination for local and foreign tourists, Boracay appears more of a commercial island resort, rather than a forest land. 

Nevertheless, that the occupants of Boracay have built multi-million peso beach resorts on the island;[111] that the island has already been stripped of its forest cover; or that the implementation of Proclamation No. 1064 will destroy the island’s tourism industry, do not negate its character as public forest. 

Forests, in the context of both the Public Land Act and the Constitution[112] classifying lands of the public domain into “agricultural, forest or timber, mineral lands, and national parks,” do not necessarily refer to large tracts of wooded land or expanses covered by dense growths of trees and underbrushes.[113]  The discussion in Heirs of Amunategui v. Director of Forestry[114] is particularly instructive: 

A forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers may have stripped it of its forest cover.  Parcels of land classified as forest land may actually be covered with grass or planted to crops by kaingin cultivators or other farmers.  “Forest lands” do not have to be on mountains or in out of the way places.  Swampy areas covered by mangrove trees, nipa palms, and other trees growing in brackish or sea water may also be classified as forest land.  The classification is descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like.  Unless and until the land classified as “forest” is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply.[115] (Emphasis supplied)

           There is a big difference between “forest” as defined in a dictionary and “forest or timber land” as a classification of lands of the public domain as appearing in our statutes.  One is descriptive of what appears on the land while the other is a legal status, a classification for legal purposes. [116]  At any rate, the Court is tasked to determine the legal status of Boracay Island, and not look into its physical layout.  Hence, even if its forest cover has been replaced by beach resorts, restaurants and other commercial establishments, it has not been automatically converted from public forest to alienable agricultural land. 

Private claimants cannot rely on Proclamation No. 1801 as basis for judicial confirmation of imperfect title.  The proclamation did not convert Boracay into an agricultural land.  However, private claimants argue that Proclamation No. 1801 issued by then President Marcos in 1978 entitles them to judicial confirmation of imperfect title.  The Proclamation classified Boracay,

among other islands, as a tourist zone.  Private claimants assert that, as a tourist spot, the island is susceptible of private ownership. 

Proclamation No. 1801 or PTA Circular No. 3-82 did not convert the whole of Boracay into an agricultural land.  There is nothing in the law or the Circular which made Boracay Island an agricultural land.  The reference in Circular No. 3-82 to “private lands”[117] and “areas declared as alienable and disposable”[118]does not by itself classify the entire island as agricultural.  Notably, Circular No. 3-82 makes reference not only to private lands and areas but also to public forested lands.  Rule VIII, Section 3 provides: 

No trees in forested private lands may be cut without prior authority from the PTA.  All forested areas in public lands are declared forest reserves.  (Emphasis supplied)

 Clearly, the reference in the Circular to both private and public lands merely

recognizes that the island can be classified by the Executive department pursuant to its powers under CA No. 141.  In fact, Section 5 of the Circular recognizes the then Bureau of Forest Development’s authority to declare areas in the island as alienable and disposable when it provides: 

Subsistence farming, in areas declared as alienable and disposable by the Bureau of Forest Development.

 Therefore, Proclamation No. 1801 cannot be deemed the positive act needed

to classify Boracay Island as alienable and disposable land.  If President Marcos intended to classify the island as alienable and disposable or forest, or both, he would have identified the specific limits of each, as President Arroyo did in Proclamation No. 1064.  This was not done in Proclamation No. 1801. 

The Whereas clauses of Proclamation No. 1801 also explain the rationale behind the declaration of Boracay Island, together with other islands, caves and peninsulas in the Philippines, as a tourist zone and marine reserve to be administered by the PTA – to ensure the concentrated efforts of the public and private sectors in the development of the areas’ tourism potential with due regard for ecological balance in the marine environment.  Simply put, the proclamation is

aimed at administering the islands for tourism and ecological purposes.  It does not address the areas’ alienability.[119]

 More importantly, Proclamation No. 1801 covers not only Boracay Island,

but sixty-four (64) other islands, coves, and peninsulas in the Philippines, such as Fortune and Verde Islands in Batangas, Port Galera in Oriental Mindoro, Panglao and Balicasag Islands in Bohol, Coron Island, Puerto Princesa and surrounding areas in Palawan, Camiguin Island in Cagayan de Oro, and Misamis Oriental, to name a few.  If the designation of Boracay Island as tourist zone makes it alienable and disposable by virtue of Proclamation No. 1801, all the other areas mentioned would likewise be declared wide open for private disposition.  That could not have been, and is clearly beyond, the intent of the proclamation. 

It was Proclamation No. 1064 of 2006 which positively declared part of Boracay as alienable and opened the same to private ownership.  Sections 6 and 7 of CA No. 141[120] provide that it is only the President, upon the recommendation of the proper department head, who has the authority to classify the lands of the public domain into alienable or disposable, timber and mineral lands.[121]

 In issuing Proclamation No. 1064, President Gloria Macapagal-Arroyo

merely exercised the authority granted to her to classify lands of the public domain, presumably subject to existing vested rights.  Classification of public lands is the exclusive prerogative of the Executive Department, through the Office of the President.  Courts have no authority to do so.[122]  Absent such classification, the land remains unclassified until released and rendered open to disposition.[123]

 Proclamation No. 1064 classifies Boracay into 400 hectares of reserved

forest land and 628.96 hectares of agricultural land. The Proclamation likewise provides for a 15-meter buffer zone on each side of the center line of roads and trails, which are reserved for right of way and which shall form part of the area reserved for forest land protection purposes.

Contrary to  private claimants’ argument, there was nothing invalid or irregular, much less unconstitutional, about the classification of Boracay Island made by the President through Proclamation No. 1064.  It was within her authority to make such classification, subject to existing vested rights. 

Proclamation No. 1064 does not violate the Comprehensive Agrarian Reform Law.  Private claimants further assert that Proclamation No. 1064 violates the provision of the Comprehensive Agrarian Reform Law (CARL) or RA No. 6657 barring conversion of public forests into agricultural lands.  They claim that since Boracay is a public forest under PD No. 705, President Arroyo can no longer convert it into an agricultural land without running afoul of Section 4(a) of RA No. 6657, thus: 

SEC. 4. Scope. – The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture.

 More specifically, the following lands are covered by the

Comprehensive Agrarian Reform Program: (a)   All alienable and disposable lands of the public

domain devoted to or suitable for agriculture. No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act until Congress, taking into account ecological, developmental and equity considerations, shall have determined by law, the specific limits of the public domain.

 That Boracay Island was classified as a public forest under PD No. 705 did

not bar the Executive from later converting it into agricultural land.  BoracayIsland still remained an unclassified land of the public domain despite PD No. 705. 

In Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols v. Republic,[124] the Court stated that unclassified lands are public forests.  

While it is true that the land classification map does not categorically state that the islands are public forests, the fact that they were unclassified lands leads to the same result.  In the absence

of the classification as mineral or timber land, the land remains unclassified land until released and rendered open to disposition.[125]  (Emphasis supplied)

 Moreover, the prohibition under the CARL applies only to a

“reclassification” of land.  If the land had never been previously classified, as in the case of Boracay, there can be no prohibited reclassification under the agrarian law.  We agree with the opinion of the Department of Justice[126] on this point: 

Indeed, the key word to the correct application of the prohibition in Section 4(a) is the word “reclassification.” Where there has been no previous classification of public forest [referring, we repeat, to the mass of the public domain which has not been the subject of the present system of classification for purposes of determining which are needed for forest purposes and which are not] into permanent forest or forest reserves or some other forest uses under the Revised Forestry Code, there can be no “reclassification of forest lands” to speak of within the meaning of Section 4(a).

 Thus, obviously, the prohibition in Section 4(a) of the CARL

against the reclassification of forest lands to agricultural lands without a prior law delimiting the limits of the public domain, does not, and cannot, apply to those lands of the public domain, denominated as “public forest” under the Revised Forestry Code, which have not been previously determined, or classified, as needed for forest purposes in accordance with the provisions of the Revised Forestry Code.[127]

 Private claimants are not entitled to apply for judicial confirmation of

imperfect title under CA No. 141.  Neither do they have vested rights over the occupied lands under the said law.  There are two requisites for judicial confirmation of imperfect or incomplete title under CA No. 141, namely: (1) open, continuous, exclusive, and notorious possession and occupation of the subject land by himself or through his predecessors-in-interest under a bona fide claim of ownership since time immemorial or from June 12, 1945; and (2) the classification of the land as alienable and disposable land of the public domain.[128]

 As discussed, the Philippine Bill of 1902, Act No. 926, and Proclamation

No. 1801 did not convert portions of Boracay Island into an agricultural land.  The

island remained an unclassified land of the public domain and, applying the Regalian doctrine, is considered State property. 

Private claimants’ bid for judicial confirmation of imperfect title, relying on the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801, must fail because of the absence of the second element of alienable and disposable land.  Their entitlement to a government grant under our present Public Land Act presupposes that the land possessed and applied for is already alienable and disposable.  This is clear from the wording of the law itself.[129]  Where the land is not alienable and disposable, possession of the land, no matter how long, cannot confer ownership or possessory rights.[130]

 Neither may private claimants apply for judicial confirmation of imperfect

title under Proclamation No. 1064, with respect to those lands which were classified as agricultural lands.  Private claimants failed to prove the first element of open, continuous, exclusive, and notorious possession of their lands in Boracay since June 12, 1945. 

We cannot sustain the CA and RTC conclusion in the petition for declaratory relief that private claimants complied with the requisite period of possession. 

The tax declarations in the name of private claimants are insufficient to prove the first element of possession.  We note that the earliest of the tax declarations in the name of private claimants were issued in 1993.  Being of recent dates,  the tax declarations are not sufficient to convince this Court  that the period of possession and occupation commenced on June 12, 1945. 

Private claimants insist that they have a vested right in Boracay, having been in possession of the island for a long time.  They have invested millions of pesos in developing the island into a tourist spot.  They say their continued possession and investments give them a vested right which cannot be unilaterally rescinded by Proclamation No. 1064. 

The continued possession and considerable investment of private claimants do not automatically give them a vested right in Boracay.  Nor do these give them

a right to apply for a title to the land they are presently occupying.  This Court is constitutionally bound to decide cases based on the evidence presented and the laws applicable.  As the law and jurisprudence stand, private claimants are ineligible to apply for a judicial confirmation of title over their occupied portions in Boracay even with their continued possession and considerable investment in the island. 

One Last Note 

The Court is aware that millions of pesos have been invested for the development of Boracay Island, making it a by-word in the local and international tourism industry.  The Court also notes that for a number of years, thousands of people have called the island their home.  While the Court commiserates with private claimants’ plight, We are bound to apply the law strictly and judiciously.  This is the law and it should prevail.  Ito ang batas at ito ang dapat umiral. 

All is not lost, however, for private claimants.  While they may not be eligible to  apply for judicial confirmation of imperfect title under Section 48(b) of CA No. 141, as amended, this does not denote their automatic ouster from the residential, commercial, and other areas they possess now classified as agricultural. Neither will this mean the loss of their substantial investments on their occupied alienable lands.  Lack of title does not necessarily mean lack of right to possess. 

For one thing, those with lawful possession may claim good faith as builders of improvements.  They can take steps to preserve or protect their possession. For another, they may look into other modes of applying for original registration of title, such as by homestead[131] or sales patent,[132] subject to the conditions imposed by law. 

More realistically, Congress may enact a law to entitle private claimants to acquire title to their occupied lots or to exempt them from certain requirements under the present land laws.  There is one such bill[133] now pending in the House of Representatives.  Whether that bill or a similar bill will become a law is for Congress to decide.

 In issuing Proclamation No. 1064, the government has taken the step

necessary to open up the island to private ownership.  This gesture may not be sufficient to appease some sectors which view the classification of the island partially into a forest reserve as absurd.  That the island is no longer overrun by trees, however, does not becloud the vision to protect its remaining forest cover and to strike a healthy balance between progress and ecology.  Ecological conservation is as important as economic progress. 

To be sure, forest lands are fundamental to our nation’s survival.  Their promotion and protection are not just fancy rhetoric for politicians and activists. These are needs  that become more urgent as destruction of our environment gets prevalent and difficult to control.  As aptly observed by Justice Conrado Sanchez in 1968 in Director of Forestry v. Munoz:[134]

 The view this Court takes of the cases at bar is but in adherence to

public policy that should be followed with respect to forest lands.  Many have written much, and many more have spoken, and quite often, about the pressing need for forest preservation, conservation, protection, development and reforestation.  Not without justification.  For, forests constitute a vital segment of any country's natural resources.  It is of common knowledge by now that absence of the necessary green cover on our lands produces a number of adverse or ill effects of serious proportions.  Without the trees, watersheds dry up; rivers and lakes which they supply are emptied of their contents. The fish disappear. Denuded areas become dust bowls. As waterfalls cease to function, so will hydroelectric plants. With the rains, the fertile topsoil is washed away; geological erosion results. With erosion come the dreaded floods that wreak havoc and destruction to property – crops, livestock, houses, and highways – not to mention precious human lives.  Indeed, the foregoing observations should be written down in a lumberman’s decalogue.[135]

 WHEREFORE, judgment is rendered as follows:

 1. The petition for certiorari in G.R. No. 167707 is GRANTED and the

Court of Appeals Decision in CA-G.R. CV No. 71118 REVERSED AND SET ASIDE.

 2. The petition for certiorari in G.R. No. 173775 is DISMISSED for lack of

merit.             SO ORDERED. 

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 134209             January 24, 2006

REPUBLIC OF THE PHILIPPINES, Petitioner, vs.CELESTINA NAGUIAT, Respondent.

D E C I S I O N

GARCIA, J.:

Before the Court is this petition for review under Rule 45 of the Rules of Court seeking the reversal of the Decision1 dated May 29, 1998 of the Court of Appeals (CA) in CA-G.R. CV No. 37001 which affirmed an earlier decision2 of the Regional Trial Court at Iba, Zambales, Branch 69 in Land Registration Case No. N-25-1.

The decision under review recites the factual backdrop, as follows:

This is an application for registration of title to four (4) parcels of land located in Panan, Botolan, Zambales, more particularly described in the amended application filed by Celestina Naguiat on 29 December 1989 with the Regional Trial Court of Zambales, Branch 69. Applicant [herein respondent] alleges, inter alia, that she is the owner of the said parcels of land having acquired them by purchase from the LID Corporation which likewise acquired the same from Demetria Calderon, Josefina Moraga and Fausto Monje and their predecessors-in-interest who have been in possession thereof for more than thirty (30) years; and that to the best of her knowledge, said lots suffer no mortgage or encumbrance of whatever kind nor is there any person having any interest, legal or equitable, or in possession thereof.

On 29 June 1990, the Republic of the Philippines [herein petitioner]. . . filed an opposition to the application on the ground that neither the applicant nor her predecessors-in interest have been in open, continuous, exclusive and notorious possession and occupation of the lands in question since 12 June 1945 or prior thereto; that the muniments of title and tax payment receipts of applicant do not constitute competent and sufficient evidence of a bona-fide acquisition of the lands applied for or of his open, continuous, exclusive and notorious possession and occupation thereof in the concept of (an) owner; that the applicant’s claim of ownership in fee simple on the basis of Spanish title or grant can no longer be availed of . . .; and that the parcels of land applied for are part of the public domain belonging to the Republic of the Philippines not subject to private appropriation.

On 15 October 1990, the lower court issued an order of general default as against the whole world, with the exception of the Office of the Solicitor General, and proceeded with the hearing of this registration case.

After she had presented and formally offered her evidence . . . applicant rested her case. The Solicitor General, thru the Provincial Prosecutor, interposed no objection to the admission of the exhibits. Later . . . the Provincial Prosecutor manifest (sic) that the Government had no evidence to adduce. 3

In a decision4 dated September 30, 1991, the trial court rendered judgment for herein respondent Celestina Naguiat, adjudicating unto her the parcels of land in question and decreeing the registration thereof in her name, thus:

WHEREFORE, premises considered, this Court hereby adjudicates the parcels of land situated in Panan, Botolan, Zambales, appearing on Plan AP-03-003447 containing an area of 3,131 square meters, appearing on Plan AP-03-003446 containing an area of 15,322 containing an area of 15,387 square meters to herein applicant Celestina T. Naguiat, of legal age, Filipino citizen, married to Rommel Naguiat and a resident of Angeles City, Pampanga together with all the improvements existing thereon and orders and decrees registration in her name in accordance with Act No. 496, Commonwealth Act No. 14, [should be 141] as amended, and Presidential Decree No. 1529. This adjudication, however, is subject to the various easements/reservations provided for under pertinent laws, presidential decrees and/or presidential letters of instructions which should be annotated/ projected on the title to be issued. And once this decision becomes final, let the corresponding decree of registration be immediately issued. (Words in bracket added)

With its motion for reconsideration having been denied by the trial court, petitioner Republic went on appeal to the CA in CA-G.R. CV No. 37001.

As stated at the outset hereof, the CA, in the herein assailed decision of May 29, 1998, affirmed that of the trial court, to wit:

WHEREFORE, premises considered, the decision appealed from is hereby AFFIRMED.

SO ORDERED.

Hence, the Republic’s present recourse on its basic submission that the CA’s decision "is not in accordance with law, jurisprudence and the evidence, since respondent has not established with the required evidence her title in fee simple or imperfect title in respect of the subject lots which would warrant their registration under … (P.D. 1529 or Public Land Act (C.A.) 141." In particular, petitioner Republic faults the appellate court on its finding respecting the length of respondent’s occupation of the property subject of her application for registration and for not considering the fact that she has not established that the lands in question have been declassified from forest or timber zone to alienable and disposable property.

Public forest lands or forest reserves, unless declassified and released by positive act of the Government so that they may form part of the disposable agricultural lands of the public domain, are not capable of private appropriation.5 As to these assets, the rules on confirmation of imperfect title do not apply.6 Given this postulate, the principal issue to be addressed turns on the question of whether or not the areas in question have ceased to have the status of forest or other inalienable lands of the public domain.

Forests, in the context of both the Public Land Act7 and the Constitution8 classifying lands of the public domain into "agricultural, forest or timber, mineral lands and national parks," do not necessarily refer to a large tract of wooded land or an expanse covered by dense growth of trees and underbrush. As we stated in Heirs of Amunategui 9-

A forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers have stripped it of its forest cover. Parcels of land classified as forest land may actually be covered with grass or planted to crops by kaingin cultivators or other farmers. "Forest lands" do not have to be on mountains or in out of the way places. xxx. The classification is

merely descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like. xxx

Under Section 2, Article XII of the Constitution,10 which embodies the Regalian doctrine, all lands of the public domain belong to the State – the source of any asserted right to ownership of land.11 All lands not appearing to be clearly of private dominion presumptively belong to the State.12 Accordingly, public lands not shown to have been reclassified or released as alienable agricultural land or alienated to a private person by the State remain part of the inalienable public domain.13 Under Section 6 of the Public Land Act, the prerogative of classifying or reclassifying lands of the public domain, i.e., from forest or mineral to agricultural and vice versa, belongs to the Executive Branch of the government and not the court.14 Needless to stress, the onus to overturn, by incontrovertible evidence, the presumption that the land subject of an application for registration is alienable or disposable rests with the applicant.15

In the present case, the CA assumed that the lands in question are already alienable and disposable. Wrote the appellate court:

The theory of [petitioner] that the properties in question are lands of the public domain cannot be sustained as it is directly against the above doctrine. Said doctrine is a reaffirmation of the principle established in the earlier cases . . . that open, exclusive and undisputed possession of alienable public land for period prescribed by law creates the legal fiction whereby the land, upon completion of the requisite period, ipso jure and without the need of judicial or other sanction, ceases to be public land and becomes private property …. (Word in bracket and underscoring added.)

The principal reason for the appellate court’s disposition, finding a registerable title for respondent, is her and her predecessor-in-interest’s open, continuous and exclusive occupation of the subject property for more than 30 years. Prescinding from its above assumption and finding, the appellate court went on to conclude, citing Director of Lands vs. Intermediate Appellate Court (IAC)16 and Herico vs. DAR,17 among other cases, that, upon the completion of the requisite period of possession, the lands in question cease to be public land and become private property.

Director of Lands, Herico and the other cases cited by the CA are not, however, winning cards for the respondent, for the simple reason that, in said cases, the disposable and alienable nature of the land sought to be registered was established, or, at least, not put in issue. And there lies the difference.

Here, respondent never presented the required certification from the proper government agency or official proclamation reclassifying the land applied for as alienable and disposable. Matters of land classification or reclassification cannot be assumed. It calls for proof.18 Aside from tax receipts, respondent submitted in evidence the survey map and technical descriptions of the lands, which, needless to state, provided no information respecting the classification of the property. As the Court has held, however, these documents are not sufficient to overcome the presumption that the land sought to be registered forms part of the public domain.19

It cannot be overemphasized that unwarranted appropriation of public lands has been a notorious practice resorted to in land registration cases.20 For this reason, the Court has made it a point to stress, when appropriate, that declassification of forest and mineral lands, as the case may be, and their conversion into alienable and disposable lands need an express and positive act from the government.21

The foregoing considered, the issue of whether or not respondent and her predecessor-in-interest have been in open, exclusive and continuous possession of the parcels of land in question is now of

little moment. For, unclassified land, as here, cannot be acquired by adverse occupation or possession; occupation thereof in the concept of owner, however long, cannot ripen into private ownership and be registered as title.22

WHEREFORE, the instant petition is GRANTED and the assailed decision dated May 29, 1998 of the Court of Appeals in CA-G.R. CV No. 37001 is REVERSED and SET ASIDE. Accordingly, respondent’s application for original registration of title in Land Registration Case No. N-25-1 of the Regional Trial Court at Iba, Zambales, Branch 69, is DENIED.

No costs.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 5246           September 16, 1910

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

Ramon Salinas, for appellants. Aniceto G. Reyes, for appellee.

TRENT, J.:

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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?

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.

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."

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.

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.

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.

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).

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.

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."

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.

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.

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.)

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.)

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

First. It has substituted security for insecurity.

Second. It has reduced the costs of conveyances from pounds to shillings, and the time occupied from months to days.

Third. It has exchanged brevity and clearness for obscurity and verbiage.

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

Fifth. It affords protection against fraud.

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.)

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 registrationtakes 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.)

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 ½ cents for each dealing. In Queensland the risk of error was only 1 ½ 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.

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.)

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

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.)

Looked at either from the point of view of history or of the necessary requirements of justice, a proceedingin 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.

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.

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.

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.

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

FIRST DIVISION

[G.R. No. 121468.  January 27, 1998]

ARSENIO DELOS REYES, FELICIDAD DELOS REYES, BENJAMIN DELOS REYES, SALVADOR DELOS REYES, SOLEDAD DELOS REYES and PEDRO PARINAO, TRINIDAD DELOS REYES and PEDRO GENERAL, CARLOS DE-LOS REYES, JR., ROBERTO DELOS REYES, RODOLFO DELOS REYES, RICARDO DELOS REYES, ZENAIDA DELOS REYES, VERONICA DELOS REYES, MERCEDES DELOS REYES, FELIPE CANTILLON, GREGORIA CANTILLON, LUCENA CANTILLON, VIRGILIO CANTILLON and MERCEDES CANTILLON, petitioners, vs. COURT OF APPEALS, ZENAIDA CAIÑA and RODOLFO CAIÑA, respondents.

D E C I S I O N

BELLOSILLO, J.:

Can an action for reconveyance of real property covered by the Torrens system filed after more than thirty (30) years prosper against the holder for value?

On 28 July 1987 the Regional Trial Court of Valenzuela, Metro Manila, dismissed Civil Case No. 717-V-78 for recovery of possession of real property with damages filed by Arsenio delos Reyes, Felicidad, Benjamin, Salvador, Soledad (with spouse Pedro Parinao), Trinidad (with spouse Pedro General), Carlos Jr., Roberto, Rodolfo, Ricardo, Zenaida, Veronica and Mercedes, all surnamed Delos Reyes, and Felipe, Gregoria, Lucena, Virgilio and Mercedes, all surnamed Cantillon, against the spouses Rodolfo Caiña and Zenaida Caiña.[1]

On 23 January l995 the Court of Appeals affirmed the order of dismissal of the lower court.[2]

Pursuing their recourse with us, petitioners seek the nullification of the decision of respondent Court of Appeals which affirmed the order of the trial court dismissing the complaint of petitioners herein by imputing to the Court of Appeals the following errors:  (1) in reckoning the 30-year prescriptive period of real actions as provided under Art. 1141 of the Civil Code from the date of issuance of the questioned TCT or annotation of the transaction in 1943 and not from 17 September 1962 when petitioners' mother, original owner of subject property, died or 17 July 1963 when TCT No. 42753 was issued to Rodolfo Caiña and Zenaida Caiña and consequently holding petitioners guilty of laches;  and, (2) in not applying Arts. 1409, 1410, and 1422 of the Civil Code.[3]

Subject of the controversy is a parcel of land measuring 13,405 square meters originally owned by the spouses Genaro and Evarista delos Reyes.  On 7 July 1942 Evarista delos Reyes sold to spouses Catalina Mercado and Eulalio Pena 10,000 square meters of the property described as Lot No. 1210 of the subdivision plan of the Malinta Friar Lands Estate situated at Torres Bugallon, Valenzuela, Metro Manila.  On 4 June 1943 the vendees were able to secure Transfer Certificate of Title No. 26184 covering not only the 10,000 square meters of land bought by them but also the remaining  3,405 square meters left unsold.  In turn, the Pena spouses sold the whole property to Isaias de Guzman and Emiliana de Onon who later conveyed the same whole area to Elpidio Concepcion, Liwayway Serrano, Norberto Concepcion and Marta de Guzman.  Eventually, the land was acquired by private respondents herein, Rodolfo Caiña and Zenaida Caiña, on 9 July 1963 through a "Deed of Exchange."  Eight (8) days later, or on l7 July l963, Transfer Certificate of Title No. 42753 was issued in the name of the Caiña spouses who since then exercised full ownership and possession over the property.

On 3 October l978 petitioners, all heirs of Evarista delos Reyes, filed an action against respondents for reconveyance of 3,405 square meters of the property covered by TCT No. 42753 claiming that this portion was invalidly included by the Pena spouses in the titling of their 10,000 square meters they had bought from Evarista delos Reyes.  However, the case was dismissed by the trial court on the ground of laches.  As already adverted to, the order of dismissal was affirmed by the Court of Appeals.

We likewise dismiss the petition.  Petitioners argue that their cause of action still subsists because it accrued either on 17 September 1962 when Evarista delos Reyes died, or on 17 July l963 when TCT No. 42753 was issued to Rodolfo Caiña and his sister Zenaida Caiña.  This is incorrect.  A cause of action being an act or omission of one party in violation of the right of another arises at the moment such right is violated.  In the instant case, petitioners' cause of action accrued on 4 June l943 when the Pena spouses caused the registration in their name of the entire l3,405 square meters instead of only 10,000 square meters they actually bought from Evarista delos Reyes.  For it was on this date that the right of ownership of Evarista over the remaining 3,405 square meters was transgressed and from that very moment sprung the right of the owner, and hence all her successors in interest, to file a suit for reconveyance of the property wrongfully taken from them.

But, such right is not imprescriptible.  Generally, the law draws a time corridor within which to propel a suit for recovery of property.  Section 44, par. (b), of RA No. 296 otherwise known as the Judiciary Act of 1948 provides that reinvindicatory actions may be brought by the owner within thirty (30) years after he has been deprived of his property. Under Art. 1141 of the Civil Code, real actions over immovables prescribe after thirty (30) years.  Thus, even if we apply the 30-year prescriptive period in accordance with the above legal provisions, petitioners' right to recover has already been effectively foreclosed by the lapse of time having been initiated only after thirty-six (36) years from the accrual of their cause of action.

Be that as it may, we hold that even these laws may not apply to the case before us in the light of PD No. 1529, the Property Registration Decree amending and codifying

the laws relative to registration of property and updating Act No. 496, the Land Registration Act.

When respondents Rodolfo Caiña and Zenaida Caiña as fourth transferees in ownership dealt with the land in question, they were not required to go beyond what appeared in the transfer certificate of title in the name of their transferor.  For all intents and purposes, they were innocent purchasers for value having acquired the property in due course and in good faith under a clean title, i.e., there were no annotations of encumbrances or notices of lis pendens at the back thereof.  They had no reason to doubt the validity of the title to the property.  Therefore it would be the height of injustice, if not inequity, if a valid transaction transferring the subject property to them be set aside just to accommodate parties who heedlessly slept on their rights for more than a third of a century.  This is not conducive but anathema to good order.

Finally, petitioners' reliance on Arts. 1409, 1410 and 1422 of the Civil Code on the imprescriptibility of void and inexistent contracts is misplaced.  While the action to declare a contract null and void does not prescribe, this principle is alien and malapropos to the matter before us.  Moreover, the action for reconveyance has now become stale, being barred as it were, by laches.  It cannot be disputed that for thirty-six (36) years petitioners and their predecessors in interest, Evarista delos Reyes most especially, never raised a restraining arm to the inclusion of the remaining 3,405 square meters of the land in the titling of the 10,000 square meters bought by the Pena spouses.  The property passed through four (4) owners successively in a span of more than twenty (20) years before it went into the hands of private respondents.  Surely, the rights of innocent purchasers of real property such as the Caiñas cannot be swamped and drowned by the remonstrations of the inert and petulant who took no care in seasonably asserting their rights of ownership over the land allegedly wrested from them through fraudulent means.  In Avecilla v. Yatco[4] we ruled that the only remedy of an owner who was fraudulently deprived of his land, which was subsequently sold to an innocent purchaser for value, is to file an action for damages against the person who perpetrated the fraud within four (4) years after the discovery of the deception.  Unfortunately in this case we may never know why Evarista delos Reyes chose not to go after the Pena spouses to recover what could be rightfully hers, the reason having apparently been long interred with her.

WHEREFORE, finding no reversible error in the decision of the Court of Appeals sustaining the Regional Trial Court of Valenzuela, Metro Manila, which ordered the dismissal of the complaint of herein petitioners, the instant petition is DENIED.  Costs against petitioners.

SO ORDERED.

Davide, Jr., (Chairman), Vitug, and Kapunan, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-630            November 15, 1947

ALEXANDER A. KRIVENKO, petitioner-appellant, vs.THE REGISTER OF DEEDS, CITY OF MANILA, respondent and appellee.

Gibbs, Gibbs, Chuidian and Quasha of petitioner-appellant.First Assistant Solicitor General Reyes and Solicitor Carreon for respondent-appellee.Marcelino Lontok appeared as amicus curies.

MORAN, C.J.:

Alenxander A. Kriventor alien, bought a residential lot from the Magdalena Estate, Inc., in December of 1941, the registration of which was interrupted by the war. In May, 1945, he sought to accomplish said registration but was denied by the register of deeds of Manila on the ground that, being an alien, he cannot acquire land in this jurisdiction. Krivenko then brought the case to the fourth branch of the Court of First Instance of Manila by means of a consulta, and that court rendered judgment sustaining the refusal of the register of deeds, from which Krivenko appealed to this Court.

There is no dispute as to these facts. The real point in issue is whether or not an alien under our Constitution may acquire residential land.

It is said that the decision of the case on the merits is unnecessary, there being a motion to withdraw the appeal which should have been granted outright, and reference is made to the ruling laid down by this Court in another case to the effect that a court should not pass upon a constitutional question if its judgment may be made to rest upon other grounds. There is, we believe, a confusion of ideas in this reasoning. It cannot be denied that the constitutional question is unavoidable if we choose to decide this case upon the merits. Our judgment cannot to be made to rest upon other grounds if we have to render any judgment at all. And we cannot avoid our judgment simply because we have to avoid a constitutional question. We cannot, for instance, grant the motion withdrawing the appeal only because we wish to evade the constitutional; issue. Whether the motion should be, or should not be, granted, is a question involving different considerations now to be stated.

According to Rule 52, section 4, of the Rules of Court, it is discretionary upon this Court to grant a withdrawal of appeal after the briefs have been presented. At the time the motion for withdrawal was filed in this case, not only had the briefs been prensented, but the case had already been voted and the majority decision was being prepared. The motion for withdrawal stated no reason whatsoever, and the Solicitor General was agreeable to it. While the motion was pending in this Court, came the new circular of the Department of Justice, instructing all register of deeds to accept for registration all transfers of residential lots to aliens. The herein respondent-appellee was naturally one of the registers of deeds to obey the new circular, as against his own stand in this case which had been maintained by the trial court and firmly defended in this Court by the Solicitor General. If we grant the withdrawal, the the result would be that petitioner-appellant Alexander A. Krivenko wins his case, not by a decision of this Court, but by the decision or circular of the Department of Justice, issued while this case was pending before this Court. Whether or not this is the reason why appellant seeks the withdrawal of his appeal and why the Solicitor General readily agrees to that withdrawal, is now

immaterial. What is material and indeed very important, is whether or not we should allow interference with the regular and complete exercise by this Court of its constitutional functions, and whether or not after having held long deliberations and after having reached a clear and positive conviction as to what the constitutional mandate is, we may still allow our conviction to be silenced, and the constitutional mandate to be ignored or misconceived, with all the harmful consequences that might be brought upon the national patromony. For it is but natural that the new circular be taken full advantage of by many, with the circumstance that perhaps the constitutional question may never come up again before this court, because both vendors and vendees will have no interest but to uphold the validity of their transactions, and very unlikely will the register of deeds venture to disobey the orders of their superior. Thus, the possibility for this court to voice its conviction in a future case may be remote, with the result that our indifference of today might signify a permanent offense to the Constitution.

All thse circumstances were thoroughly considered and weighted by this Court for a number of days and the legal result of the last vote was a denial of the motion withdrawing the appeal. We are thus confronted, at this stage of the proceedings, with our duty, the constitutional question becomes unavoidable. We shall then proceed to decide that question.

Article XIII, section 1, of the Constitutional is as follows:

Article XIII. — Conservation and utilization of natural resources.

SECTION 1. All agricultural, timber, and mineral lands of the public domain, water, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, and other natural resources of the Philippines belong to the State, and their disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, subject to any existing right, grant, lease, or concession at the time of the inaguration of the Government established uunder this Constitution. Natural resources, with the exception of public agricultural land, shall not be alienated, and no licence, concession, or lease for the exploitation, development, or utilization of any of the natural resources shall be granted for a period exceeding twenty-five years, renewable for another twenty-five years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water "power" in which cases beneficial use may be the measure and the limit of the grant.

The scope of this constitutional provision, according to its heading and its language, embraces all lands of any kind of the public domain, its purpose being to establish a permanent and fundamental policy for the conservation and utilization of all natural resources of the Nation. When, therefore, this provision, with reference to lands of the public domain, makes mention of only agricultural, timber and mineral lands, it means that all lands of the public domain are classified into said three groups, namely, agricultural, timber and mineral. And this classification finds corroboration in the circumstance that at the time of the adoption of the Constitution, that was the basic classification existing in the public laws and judicial decisions in the Philippines, and the term "public agricultural lands" under said classification had then acquired a technical meaning that was well-known to the members of the Constitutional Convention who were mostly members of the legal profession.

As early as 1908, in the case of Mapa vs. Insular Government (10 Phil., 175, 182), this Court said that the phrase "agricultural public lands" as defined in the Act of Congress of July 1, 1902, which phrase is also to be found in several sections of the Public Land Act (No. 926), means "those public lands acquired from Spain which are neither mineral for timber lands." This definition has been followed in long line of decisions of this Court. (SeeMontano vs. Insular Government, 12 Phil., 593;

Ibañez de Aldecoa vs. Insular Government, 13 Phil., 159; Ramosvs. Director of Lands, 39 Phil., 175; Jocson vs. Director of Forestry, 39 Phil., 560; Ankron vs. Government of the Philippines, 40 Phil., 10.) And with respect to residential lands, it has been held that since they are neither mineral nor timber lands, of necessity they must be classified as agricultural. In Ibañez de Aldecoa vs. Insular Government (13 Phil., 159, 163), this Court said:

Hence, any parcel of land or building lot is susceptible of cultivation, and may be converted into a field, and planted with all kinds of vegetation; for this reason, where land is not mining or forestal in its nature, it must necessarily be included within the classification of agricultural land, not because it is actually used for the purposes of agriculture, but because it was originally agricultural and may again become so under other circumstances; besides, the Act of Congress contains only three classification, and makes no special provision with respect to building lots or urban lands that have ceased to be agricultural land.

In other words, the Court ruled that in determining whether a parcel of land is agricultural, the test is not only whether it is actually agricultural, but also its susceptibility to cultivation for agricultural purposes. But whatever the test might be, the fact remains that at the time the Constitution was adopted, lands of the public domain were classified in our laws and jurisprudence into agricultural, mineral, and timber, and that the term "public agricultural lands" was construed as referring to those lands that were not timber or mineral, and as including residential lands. It may safely be presumed, therefore, that what the members of the Constitutional Convention had in mind when they drafted the Constitution was this well-known classification and its technical meaning then prevailing.

Certain expressions which appear in Constitutions, . . . are obviously technical; and where such words have been in use prior to the adoption of a Constitution, it is presumed that its framers and the people who ratified it have used such expressions in accordance with their technical meaning. (11 Am. Jur., sec. 66, p. 683.) Also Calder vs. Bull, 3 Dall. [U.S.], 386; 1 Law. ed., 648; Bronson vs. Syverson, 88 Wash., 264; 152 P., 1039.)

It is a fundamental rule that, in construing constitutions, terms employed therein shall be given the meaning which had been put upon them, and which they possessed, at the time of the framing and adoption of the instrument. If a word has acquired a fixed, technical meaning in legal and constitutional history, it will be presumed to have been employed in that sense in a written Constitution. (McKinney vs. Barker, 180 Ky., 526; 203 S.W., 303; L.R.A., 1918 E, 581.)

Where words have been long used in a technical sense and have been judicially construed to have a certain meaning, and have been adopted by the legislature as having a certain meaning prior to a particular statute in which they are used, the rule of construction requires that the words used in such statute should be construed according to the sense in which they have been so previously used, although the sense may vary from strict literal meaning of the words. (II Sutherland, Statutory Construction, p. 758.)

Therefore, the phrase "public agricultural lands" appearing in section 1 of Article XIII of the Constitution must be construed as including residential lands, and this is in conformity with a legislative interpretation given after the adoption of the Constitution. Well known is the rule that "where the Legislature has revised a statute after a Constitution has been adopted, such a revision is to be regarded as a legislative construction that the statute so revised conforms to the Constitution." (59 C.J., 1102.) Soon after the Constitution was adopted, the National Assembly revised the Public Land Law and passed Commonwealth Act No. 141, and sections 58, 59 and 60 thereof permit the sale of residential lots to Filipino citizens or to associations or corporations

controlled by such citizens, which is equivalent to a solemn declaration that residential lots are considered as agricultural lands, for, under the Constitution, only agricultural lands may be alienated.

It is true that in section 9 of said Commonwealth Act No. 141, "alienable or disposable public lands" which are the same "public agriculture lands" under the Constitution, are classified into agricultural, residential, commercial, industrial and for other puposes. This simply means that the term "public agricultural lands" has both a broad and a particular meaning. Under its broad or general meaning, as used in the Constitution, it embraces all lands that are neither timber nor mineral. This broad meaning is particularized in section 9 of Commonwealth Act No. 141 which classifies "public agricultural lands" for purposes of alienation or disposition, into lands that are stricly agricultural or actually devoted to cultivation for agricultural puposes; lands that are residential; commercial; industrial; or lands for other purposes. The fact that these lands are made alienable or disposable under Commonwealth Act No. 141, in favor of Filipino citizens, is a conclusive indication of their character as public agricultural lands under said statute and under the Constitution.

It must be observed, in this connection that prior to the Constitution, under section 24 of Public Land Act No. 2874, aliens could acquire public agricultural lands used for industrial or residential puposes, but after the Constitution and under section 23 of Commonwealth Act No. 141, the right of aliens to acquire such kind of lands is completely stricken out, undoubtedly in pursuance of the constitutional limitation. And, again, prior to the Constitution, under section 57 of Public Land Act No. 2874, land of the public domain suitable for residence or industrial purposes could be sold or leased to aliens, but after the Constitution and under section 60 of Commonwealth Act No. 141, such land may only be leased, but not sold, to aliens, and the lease granted shall only be valid while the land is used for the purposes referred to. The exclusion of sale in the new Act is undoubtedly in pursuance of the constitutional limitation, and this again is another legislative construction that the term "public agricultural land" includes land for residence purposes.

Such legislative interpretation is also in harmony with the interpretation given by the Executive Department of the Government. Way back in 1939, Secretary of Justice Jose Abad Santos, in answer to a query as to "whether or not the phrase 'public agricultural lands' in section 1 of Article XII (now XIII) of the Constitution may be interpreted to include residential, commercial, and industrial lands for purposes of their disposition," rendered the following short, sharp and crystal-clear opinion:

Section 1, Article XII (now XIII) of the Constitution classifies lands of the public domain in the Philippines into agricultural, timber and mineral. This is the basic classification adopted since the enactment of the Act of Congress of July 1, 1902, known as the Philippine Bill. At the time of the adoption of the Constitution of the Philippines, the term 'agricultural public lands' and, therefore, acquired a technical meaning in our public laws. The Supreme Court of the Philippines in the leading case of Mapa vs. Insular Government, 10 Phil., 175, held that the phrase 'agricultural public lands' means those public lands acquired from Spain which are neither timber nor mineral lands. This definition has been followed by our Supreme Court in many subsequent case. . . .

Residential commercial, or industrial lots forming part of the public domain must have to be included in one or more of these classes. Clearly, they are neither timber nor mineral, of necessity, therefore, they must be classified as agricultural.

Viewed from another angle, it has been held that in determining whether lands are agricultural or not, the character of the land is the test (Odell vs. Durant, 62 N.W., 524; Lorch vs. Missoula Brick and Tile Co., 123 p.25). In other words, it is the susceptibility of the land to cultivation for agricultural purposes by ordinary farming methods which determines whether it is agricultural or not (State vs. Stewart, 190 p. 129).

Furthermore, as said by the Director of Lands, no reason is seen why a piece of land, which may be sold to a person if he is to devote it to agricultural, cannot be sold to him if he intends to use it as a site for his home.

This opinion is important not alone because it comes from a Secratary of Justice who later became the Chief Justice of this Court, but also because it was rendered by a member of the cabinet of the late President Quezon who actively participated in the drafting of the constitutional provision under consideration. (2 Aruego, Framing of the Philippine Constitution, p. 598.) And the opinion of the Quezon administration was reiterated by the Secretary of Justice under the Osmeña administration, and it was firmly maintained in this Court by the Solicitor General of both administrations.

It is thus clear that the three great departments of the Government — judicial, legislative and executive — have always maintained that lands of the public domain are classified into agricultural, mineral and timber, and that agricultural lands include residential lots.

Under section 1 of Article XIII of the Constitution, "natural resources, with the exception of public agricultural land, shall not be aliented," and with respect to public agricultural lands, their alienation is limited to Filipino citizens. But this constitutional purpose conserving agricultural resources in the hands of Filipino citizens may easily be defeated by the Filipino citizens themselves who may alienate their agricultural lands in favor of aliens. It is partly to prevent this result that section 5 is included in Article XIII, and it reads as follows:

Sec. 5. Save in cases of hereditary succession, no private agricultural land will be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines.

This constitutional provision closes the only remaining avenue through which agricultural resources may leak into aliens' hands. It would certainly be futile to prohibit the alienation of public agricultural lands to aliens if, after all, they may be freely so alienated upon their becoming private agricultural lands in the hands of Filipino citizens. Undoubtedly, as above indicated, section 5 is intended to insure the policy of nationalization contained in section 1. Both sections must, therefore, be read together for they have the same purpose and the same subject matter. It must be noticed that the persons against whom the prohibition is directed in section 5 are the very same persons who under section 1 are disqualified "to acquire or hold lands of the public domain in the Philippines." And the subject matter of both sections is the same, namely, the non-transferability of "agricultural land" to aliens. Since "agricultural land" under section 1 includes residential lots, the same technical meaning should be attached to "agricultural land under section 5. It is a rule of statutory construction that "a word or phrase repeated in a statute will bear the same meaning throughout the statute, unless a different intention appears." (II Sutherland, Statutory Construction, p. 758.) The only difference between "agricultural land" under section 5, is that the former is public and the latter private. But such difference refers to ownership and not to the class of land. The lands are the same in both sections, and, for the conservation of the national patrimony, what is important is the nature or class of the property regardless of whether it is owned by the State or by its citizens.

Reference is made to an opinion rendered on September 19, 1941, by the Hon. Teofilo Sison, then Secretary of Justice, to the effect that residential lands of the public domain may be considered as agricultural lands, whereas residential lands of private ownership cannot be so considered. No reason whatsoever is given in the opinion for such a distinction, and no valid reason can be adduced for such a discriminatory view, particularly having in mind that the purpose of the constitutional provision is the conservation of the national patrimony, and private residential lands are as much an integral part of the national patrimony as the residential lands of the public domain. Specially is this so where, as indicated above, the prohibition as to the alienable of public residential lots would

become superflous if the same prohibition is not equally applied to private residential lots. Indeed, the prohibition as to private residential lands will eventually become more important, for time will come when, in view of the constant disposition of public lands in favor of private individuals, almost all, if not all, the residential lands of the public domain shall have become private residential lands.

It is maintained that in the first draft of section 5, the words "no land of private ownership" were used and later changed into "no agricultural land of private ownership," and lastly into "no private agricultural land" and from these changes it is argued that the word "agricultural" introduced in the second and final drafts was intended to limit the meaning of the word "land" to land actually used for agricultural purposes. The implication is not accurate. The wording of the first draft was amended for no other purpose than to clarify concepts and avoid uncertainties. The words "no land" of the first draft, unqualified by the word "agricultural," may be mistaken to include timber and mineral lands, and since under section 1, this kind of lands can never be private, the prohibition to transfer the same would be superfluous. Upon the other hand, section 5 had to be drafted in harmony with section 1 to which it is supplementary, as above indicated. Inasmuch as under section 1, timber and mineral lands can never be private, and the only lands that may become private are agricultural lands, the words "no land of private ownership" of the first draft can have no other meaning than "private agricultural land." And thus the change in the final draft is merely one of words in order to make its subject matter more specific with a view to avoiding the possible confusion of ideas that could have arisen from the first draft.

If the term "private agricultural lands" is to be construed as not including residential lots or lands not strictly agricultural, the result would be that "aliens may freely acquire and possess not only residential lots and houses for themselves but entire subdivisions, and whole towns and cities," and that "they may validly buy and hold in their names lands of any area for building homes, factories, industrial plants, fisheries, hatcheries, schools, health and vacation resorts, markets, golf courses, playgrounds, airfields, and a host of other uses and purposes that are not, in appellant's words, strictly agricultural." (Solicitor General's Brief, p. 6.) That this is obnoxious to the conservative spirit of the Constitution is beyond question.

One of the fundamental principles underlying the provision of Article XIII of the Constitution and which was embodied in the report of the Committee on Nationalization and Preservation of Lands and other Natural Resources of the Constitutional Convention, is "that lands, minerals, forests, and other natural resources constitute the exclusive heritage of the Filipino nation. They should, therefore, be preserved for those under the sovereign authority of that nation and for their posterity." (2 Aruego, Framing of the Filipino Constitution, p. 595.) Delegate Ledesma, Chairman of the Committee on Agricultural Development of the Constitutional Convention, in a speech delivered in connection with the national policy on agricultural lands, said: "The exclusion of aliens from the privilege of acquiring public agricultural lands and of owning real estate is a necessary part of the Public Land Laws of the Philippines to keep pace with the idea of preserving the Philippines for the Filipinos." (Emphasis ours.) And, of the same tenor was the speech of Delegate Montilla who said: "With the complete nationalization of our lands and natural resources it is to be understood that our God-given birthright should be one hundred per cent in Filipino hands . . .. Lands and natural resources are immovables and as such can be compared to the vital organs of a person's body, the lack of possession of which may cause instant death or the shortening of life. If we do not completely antionalize these two of our most important belongings, I am afraid that the time will come when we shall be sorry for the time we were born. Our independence will be just a mockery, for what kind of independence are we going to have if a part of our country is not in our hands but in those of foreigners?" (Emphasis ours.) Professor Aruego says that since the opening days of the Constitutional Convention one of its fixed and dominating objectives was the conservation and nationalization of the natural resources of the country. (2 Aruego, Framing of the Philippine Constitution, p 592.) This is ratified by the members of the Constitutional Convention who are now members of this Court, namely, Mr. Justice Perfecto, Mr. Justice Briones, and Mr. Justice

Hontiveros. And, indeed, if under Article XIV, section 8, of the Constitution, an alien may not even operate a small jitney for hire, it is certainly not hard to understand that neither is he allowed to own a pieace of land.

This constitutional intent is made more patent and is strongly implemented by an act of the National Assembly passed soon after the Constitution was approved. We are referring again to Commonwealth Act No. 141. Prior to the Constitution, there were in the Public Land Act No. 2874 sections 120 and 121 which granted aliens the right to acquire private only by way of reciprocity. Said section reads as follows:

SEC. 120. No land originally acquired in any manner under the provisions of this Act, nor any permanent improvement on such land, shall be encumbered, alienated, or transferred, except to persons, corporations, associations, or partnerships who may acquire lands of the public domain under this Act; to corporations organized in the Philippine Islands authorized therefor by their charters, and, upon express authorization by the Philippine Legislature, to citizens of countries the laws of which grant to citizens of the Philippine Islands the same right to acquire, hold, lease, encumber, dispose of, or alienate land, or permanent improvements thereon, or any interest therein, as to their own citizens, only in the manner and to the extent specified in such laws, and while the same are in force but not thereafter.

SEC. 121. No land originally acquired in any manner under the provisions of the former Public Land Act or of any other Act, ordinance, royal order, royal decree, or any other provision of law formerly in force in the Philippine Islands with regard to public lands, terrenos baldios y realengos, or lands of any other denomination that were actually or presumptively of the public domain or by royal grant or in any other form, nor any permanent improvement on such land, shall be encumbered, alienated, or conveyed, except to persons, corporations, or associations who may acquire land of the public domain under this Act; to corporate bodies organized in the Philippine Islands whose charters may authorize them to do so, and, upon express authorization by the Philippine Legislature, to citizens of the countries the laws of which grant to citizens of the Philippine Islands the same right to acquire, hold, lease, encumber, dispose of, or alienate land or pemanent improvements thereon or any interest therein, as to their own citizens, and only in the manner and to the extent specified in such laws, and while the same are in force, but not thereafter:Provided, however, That this prohibition shall not be applicable to the conveyance or acquisition by reason of hereditary succession duly acknowledged and legalized by competent courts, nor to lands and improvements acquired or held for industrial or residence purposes, while used for such purposes:Provided, further, That in the event of the ownership of the lands and improvements mentioned in this section and in the last preceding section being transferred by judicial decree to persons,corporations or associations not legally capacitated to acquire the same under the provisions of this Act, such persons, corporations, or associations shall be obliged to alienate said lands or improvements to others so capacitated within the precise period of five years, under the penalty of such property reverting to the Government in the contrary case." (Public Land Act, No. 2874.)

It is to be observed that the pharase "no land" used in these section refers to all private lands, whether strictly agricultural, residential or otherwise, there being practically no private land which had not been acquired by any of the means provided in said two sections. Therefore, the prohibition contained in these two provisions was, in effect, that no private land could be transferred to aliens except "upon express authorization by the Philippine Legislature, to citizens of Philippine Islands the same right to acquire, hold, lease, encumber, dispose of, or alienate land." In other words, aliens were granted the right to acquire private land merely by way of reciprocity. Then came the

Constitution and Commonwealth Act No. 141 was passed, sections 122 and 123 of which read as follows:

SEC. 122. No land originally acquired in any manner under the provisions of this Act, nor any permanent improvement on such land, shall be encumbered, alienated, or transferred, except to persons, corporations, associations, or partnerships who may acquire lands of the public domain under this Act or to corporations organized in the Philippines authorized thereof by their charters.

SEC. 123. No land originally acquired in any manner under the provisions of any previous Act, ordinance, royal order, royal decree, or any other provision of law formerly in force in the Philippines with regard to public lands terrenos baldios y realengos, or lands of any other denomination that were actually or presumptively of the public domain, or by royal grant or in any other form, nor any permanent improvement on such land, shall be encumbered, alienated, or conveyed, except to persons, corporations or associations who may acquire land of the public domain under this Act or to corporate bodies organized in the Philippines whose charters authorize them to do so: Provided, however, That this prohibition shall not be applicable to the conveyance or acquisition by reason of hereditary succession duly acknowledged and legalized by competent courts: Provided, further, That in the event of the ownership of the lands and improvements mentioned in this section and in the last preceding section being transferred by judicial decree to persons, corporations or associations not legally capacitated to acquire the same under the provisions of this Act, such persons, corporations, or associations shall be obliged to alienate said lands or improvements to others so capacitated within the precise period of five years; otherwise, such property shall revert to the Government.

These two sections are almost literally the same as sections 120 and 121 of Act No. 2874, the only difference being that in the new provisions, the right to reciprocity granted to aliens is completely stricken out. This, undoubtedly, is to conform to the absolute policy contained in section 5 of Article XIII of the Constitution which, in prohibiting the alienation of private agricultural lands to aliens, grants them no right of reciprocity. This legislative construction carries exceptional weight, for prominent members of the National Assembly who approved the new Act had been members of the Constitutional Convention.

It is said that the lot question does not come within the purview of sections 122 and 123 of Commonwealth Act No. 141, there being no proof that the same had been acquired by one of the means provided in said provisions. We are not, however, diciding the instant case under the provisions of the Public Land Act, which have to refer to land that had been formerly of the public domain, otherwise their constitutionality may be doubtful. We are deciding the instant case under section 5 of Article XIII of the Constitution which is more comprehensive and more absolute in the sense that it prohibits the transfer to alien of any private agricultural land including residential land whatever its origin might have been.

And, finally, on June 14, 1947, the Congress approved Republic Act No. 133 which allows mortgage of "private real property" of any kind in favor of aliens but with a qualification consisting of expressly prohibiting aliens to bid or take part in any sale of such real property as a consequence of the mortgage. This prohibition makes no distinction between private lands that are strictly agricultural and private lands that are residental or commercial. The prohibition embraces the sale of private lands of any kind in favor of aliens, which is again a clear implementation and a legislative interpretation of the constitutional prohibition. Had the Congress been of opinion that private residential lands may be sold to aliens under the Constitution, no legislative measure would have been found necessary to authorize mortgage which would have been deemed also permissible

under the Constitution. But clearly it was the opinion of the Congress that such sale is forbidden by the Constitution and it was such opinion that prompted the legislative measure intended to clarify that mortgage is not within the constitutional prohibition.

It is well to note at this juncture that in the present case we have no choice. We are construing the Constitution as it is and not as we may desire it to be. Perhaps the effect of our construction is to preclude aliens, admitted freely into the Philippines from owning sites where they may build their homes. But if this is the solemn mandate of the Constitution, we will not attempt to compromise it even in the name of amity or equity. We are satisfied, however, that aliens are not completely excluded by the Constitution from the use of lands for residential purposes. Since their residence in the Philippines is temporary, they may be granted temporary rights such as a lease contract which is not forbidden by the Constitution. Should they desire to remain here forever and share our fortunes and misfortunes, Filipino citizenship is not impossible to acquire.

For all the foregoing, we hold that under the Constitution aliens may not acquire private or public agricultural lands, including residential lands, and, accordingly, judgment is affirmed, without costs.

Feria, Pablo, Perfecto, Hilado, and Briones, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

 

G.R. No. L-36507 June 14, 1974

ANTONIO PIÑERO, JR., EMMA BERNAD (assisted by her husband Norberto Bernad) and FORTUNATO PIÑERO, petitioners-appellees, vs.THE DIRECTOR OF LANDS, SEGUNDO M. REYES, in his capacity as the Provincial Land Officer of Zamboanga del Norte, MARIANO D. PALERMO, in his capacity as Deputy Public Lands Inspector, NICANOR ALASAAS, EUSEBIO CAMANSI and TOMAS SUMALPONG, respondents. THE DIRECTOR OF LANDS, SEGUNDO M. REYES, in his capacity as the Provincial Land Officer of Zamboanga del Norte and MARIANO D. PALERMO, in his capacity as Deputy Public Lands Inspector, respondents-appellants.

Porferio E. Mah for petitioners-appellees.

Officer of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Pacifico P. de Castro and Solicitor Francisco J. Bautista for respondents-appellants.

 

BARREDO, J.:p

Appeal by the Solicitor General from the decision of the Court of First Instance of Zamboanga del Norte in its Civil Case No. 1128, granting the writ of prohibition prayed for by appellees against the appellant Director of Lands, the Provincial Land Officer of the same province and other subordinate officials who, by order of said director, had initiated an investigation of alleged fraud claimed to have led to the issuance of the Free Patents and corresponding Certificates of Title to the said appellees.

This appeal was certified to Us by the Court of Appeals on February 20, 1973, the decision of the trial court being based exclusively on a stipulation of facts as follows:

1. That Antonio Piñero, Jr., and Emma Piñero Bernad are residents of Dipolog, Zamboanga del Norte; while Fortunate Piñero is presently a resident of Negros Oriental;

2. That the identities of Lots Nos. 5790, 5792 and 2532, all of Pls- 100, situated at Napuyan, Dapitan, Zamboanga del Norte, are submitted (sic); .

3. That Lot No. 5790, Pls - 100 is covered by Free Patent No. V-63411 issued January 30, 1957 in favor of Antonio Piñero, Jr., and Lot No. 5792 Pls - 100 is

covered by Free Patent No. V-63420 issued on January 30, 1957 in favor of Emma Piñero Bernad, and that Lot 2532 is applied for by Fortunato Piñero under Homestead Application No. V-66441 approved as of January 2, 1953, but up to the present no Patent has as yet been issued; .

4. That Lot 2532 was formerly part of PSU - 111118, a private survey executed by Surveyor Calixto Sudiacal in 1939 for Fortunato Piñero and that by subsequent survey executed by the ECA, Psu-111118 was subdivided into smaller lots, one of which is now Lot 2532; .

5. That pursuant to Free Patent No. V-63411, Original Certificate of Title No. D-5349 was issued by the Register of Deeds of Zamboanga del Norte in favor of Antonio Piñero, Jr., on October 17, 1957; .

6. That pursuant to Free Patent No. V-63420, Original Certificate of Title No. P-5312 was issued by Register of Deeds of Zamboanga del Norte, in favor of Emma Piñero on October 17, 1957; .

7. That on August 8, 1958, the Director of Lands issued an order directing the investigation of the protest of Eusebio Camansi, against the patented application of Antonio Piñero Jr., a copy of said order being found on page 14 of the expediente; and that on March 24, 1959 the Director of Lands thru the Chief Legal Division directed the Provincial Land Officer at Dipolog, to investigate the protest of Nicanor Alasaas against the patented application of Emma Piñero Bernad, a copy of said order is also being on page 15 of the expediente;

8. That as regards Lot 5790 Pls - 100 the protest of Eusebio Camansi has been given due course against the claim of Antonio Piñero Jr., which protest has been investigated and terminated, Antonio Piñero Jr., being represented by his counsel Atty. Jesus Sarmiento;

9. That Nicanor Alasaas filed his protest dated February 27, 1958 and subscribed on March 11, 1958, before Notary Public, G.R. Dalmacio, Jr., a copy is hereto attached as Exhibit A; and that the protest of Nicanor Alasaas has been investigated by Atty. Mariano D. Palermo, investigator of the Bureau of Lands, Dipolog, Zamboanga del Norte on August 30, 1959;

10. That with respect to Lot 5792 the same has already been investigated and regarding Lot 5790 the investigation has already been terminated but no decision has as yet been issued;

11. That with respect to the claim of Tomas Sumalpong against the application of Fortunato Piñero an investigation was conducted on August 21, 1959 but neither Fortunato Piñero nor counsel appeared; that when the said case was rescheduled for October 30, 1959, Atty. Jaime T. Hamoy counsel for Fortunato Piñero filed a motion for postponement on the ground that said counsel had a Criminal Case to attend to in the Justice of the Peace Court of Manukan, Zamboanga del Norte, after which the hearing was rescheduled for December 28, 1959; that in said hearing counsel for Fortunato Piñero for the first time attacked the authority of the investigation on the alleged ground that under the Revised Administrative Code only the Director of Lands and Chief of Section of said Office can order investigation of land conflicts; that up to the present no resolution of that issue has as yet been made; and that no

written motion bearing on the same ground interposed before the investigator was ever raised before the Director of Lands;

12. That pursuant to a letter of Atty. Candido Pa. Sumalpong as counsel for Tomas Sumalpong under date of July 28, 1959, protesting against the above-mentioned homestead application of Fortunato Piñero which letter was addressed to the Director of Lands thru the Provincial Land Officer at Dipolog, Zamboanga del Norte, the said Provincial Land Officer in the first indorsement dated July 22, 1959 addressed to Deputy Public Lands Inspector, Mariano D. Palermo, directed the investigation of the case until the said case is terminated for disposition under the provision of Land Administrative Order No. 13-3 that the said first indorsement was the sole authority for the investigation of the claim of said Tomas Sumalpong against the homestead application of Fortunato Piñero that as above stated the investigation of the claim of Tomas Sumalpong was not terminated because counsel for Fortunato Piñero attacked the authority for the said investigation;

13. That in connection with the separate petition of the respondents, Nicanor Alasaas, Eusebio Camansi and Tomas Sumalpong against the application of the petitioners the same respondents were required by the Chief of the Legal Division of the Bureau of Lands in a letter dated September 4, 1959 to file a sworn protest and pay the protest fee within a period of thirty days from the receipt of the said letter, otherwise the respondents claim will be dismissed and disregarded without further notice; that a copy of said letter is hereto attached as an integral part of this stipulation of facts as Exhibit "B"; that there is no showing that respondents complied with the said letter nor is there any showing that the claim of the respondents are already dismissed (that is as of this date); that on December 18, 1959 the petitioners, thru counsel, filed a motion to dismiss the alleged protest but up to the present no resolution on has ever been made; that as shown by this letter of September 4, 1959 which was addressed to Antonio Mabulay, Annex "B" respondents Tomas Sumalpong, Nicanor Alasaas and Eusebio Camansi were not given copy of this letter, and that the motion of counsel for the "Dismiss the Protest" (sic) does not show that respondents Tomas Sumalpong, Eusebio Camansi and Nicanor Alasaas were ever furnished a copy of said motion;

14. That the Director of Lands was actually served with summons on January 20, 1960 as shown by the return of the City Sheriff of Manila, which return appears on page 25 of the record of this case;

15. That for all matters not covered by this stipulation of facts parties agree to ask for a date for the reception of evidence.

We hold the appeal to be meritorious. In the light of the facts disclosed in the foregoing stipulation, We reiterateCebedo vs. Director of Lands, G.R. No. L-12777, May 22, 1961, 2 SCRA 25, wherein We held that it is not only the right but the duty of the Director of Lands to conduct the investigation of any alleged fraud in securing a free patent and the corresponding title to a public land and to file the corresponding court action for the reversion of the same to the State, if the facts disclosed in the course of such investigation should so warrant. Consequently, prohibition cannot be issued to enjoin such an investigation despite the existence of a Torrens title.

Indeed, it is to be clarified that Section 91 of the Public Land Act leaves no other alternative to the Director of Lands. The provision reads thus:

SEC. 91. The statements made in the application shall be considered as essential conditions and parts of any concession, title, or permit issued on the basis of such application, and any false statement therein or omission of facts altering, changing, or modifying the consideration of the facts set forth in such statements, and any subsequent modification, alteration, or change of the material facts set forth in the application shall ipso facto produce the cancellation of the concession, title, or permit granted. It shall be the duty of the Director of Lands, from time to time and whenever he may deem it advisable, to make the necessary investigations for the purpose of ascertaining whether the material facts set out in the application are true, or whether they continue to exist and are maintained and preserved in good faith, and for the purpose of such investigation, the Director of Lands is hereby empowered to issue subpoenas and subpoenas duces tecum and, if necessary, to obtain compulsory process from the courts. In every investigation made in accordance with this section, the existence of bad faith, fraud, concealment, or fraudulent and illegal modification of essential facts shall be presumed if the grantee or possessor of the land shall refuse or fail to obey a subpoenas or subpoenas duces tecum lawfully issued by the Director of Lands or his authorized delegates or agents, or shall refuse or fail to give direct and specific answers to pertinent questions, and on the basis of such presumption, an order of cancellation may issue without further proceedings.

Underlying this section and providing its justification is the Regalian doctrine embodied in Section 1 of Article XIII of the Constitution of 1935, in force during the material dates of the events herein involved, declaring that "all agricultural, timber, and mineral lands of the public domain . . and other natural resources of the Philippines belong to the State...." And under Krivenko vs. Register of Deeds, 79 Phil. 461, "the scope of this constitutional provision, according to its heading and its language, embraces all lands of any kind of the public domain, its purpose being to establish a permanent and fundamental policy for the conservation and utilization of all natural resources of the Nation." Accordingly, the right to acquire disposable lands from the State through any of the means provided for in the Public Land Act, Commonwealth Act 141, must necessarily be subject to the reservation expressly made in above quoted Section 91 to the effect that "the statements made in the application shall be considered as essential conditions and parts of any ... title ... issued on the basis of such application" and that "any false statement therein or omission of facts altering, changing or modifying the consideration of the facts set forth in such statements, and any subsequent modification, alteration or change of the material facts set forth in the application shall ipso facto 1 produce the cancellation of the concession, title or permit granted."

It is true that under Section 122 of the Land Registration Act, a Torrens title issued on the basis of a free patent or a homestead patent is as indefeasible as one judicially secured. And in repeated previous decisions of this Court that indefeasibility has been emphasized by Our holding that not even the Government can file an action for annulment, but at the same time, it has been made clear that an action for reversion may be instituted by the Solicitor General, in the name of the Republic of the Philippines. 2 It is to the public interest that one who succeeds in fraudulently acquiring title to a public land should not be allowed to benefit therefrom, and the State should, therefore, have an ever existing authority, thru its duly authorized officers, to inquire into the circumstances surrounding the issuance of any such title, to the end that the Republic, thru the Solicitor General or any other officer who may be authorized by law, may file the corresponding action for the reversion of the land involved to the public domain, subject thereafter to disposal to other qualified persons in accordance with law. In other words, the indefeasibility of a title over land previously public is not a bar to an investigation by the Director of Lands as to how such title has been acquired, if the purpose of such investigation is to determine whether or not fraud had been committed in securing such title in order that the appropriate action for reversion may be filed by the Government.

Nothing said above, however, should be understood as holding that the Court has found that the titles of appellees have been in fact fraudulently secured. That matter may be resolved only after the Director of Lands shall have finished his investigation.

IN VIEW OF THE FOREGOING, the decision of the trial court is reversed and the writ of prohibition sought by appellees is denied. Costs against appellees.

Makalintal, C.J., Zaldivar, Castro, Fernando, Teehankee, Makasiar, Antonio, Esguerra, Fernandez, Muñoz Palma and Aquino, JJ., concur.

 

                                        SECOND DIVISION 

 WILFREDO T. VAGILIDAD                   G.R. No. 161136    and LOLITA A. VAGILIDAD,                                                                 Petitioners,                                                                                                        Present:                                                                                                               

PUNO, J., Chairperson,- versus -                                            SANDOVAL -GUTIERREZ,

CORONA,AZCUNA, andGARCIA, JJ.

                                                         GABINO VAGILIDAD, JR.                     Promulgated:and DOROTHY VAGILIDAD,

Respondents.                  November 16, 2006x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

 D E C I S I O N

  

PUNO, J.:

          This is a Petition for Review on Certiorari of the Decision [1] and Resolution[2] of the Court of Appeals in CA-G.R. No. CV-68318 dated March 19, 2003and November 13, 2003, respectively, reversing and setting aside the decision of the Regional Trial Court of Antique, Sixth Judicial Region, Branch II, in Civil Case No. 2825 dated January 26, 1999.                

          The facts are stated in the assailed Decision[3] of the appellate court, viz.:

A parcel of land, Lot No. 1253, situated in Atabay, San Jose, Antique, measuring 4,280 square meters, was owned by Zoilo [Labiao] (hereafter ZOILO) as per Original Certificate of Title No. RO-2301 issued on March 3, 1931. Sometime in 1931, ZOILO died. Subsequently, on May 12, 1986, Loreto Labiao (hereafter LORETO), son of ZOILO, sold to Gabino Vagilidad Jr. (hereafter GABINO JR.) a portion of Lot No. 1253 (hereafter Lot 1253-B), measuring 1,604 square meters as evidenced by the Deed of Absolute Sale executed by LORETO.

 In view of the death of ZOILO, his children,

LORETO, Efren Labiao (hereafter EFREN) and Priscilla Espanueva (hereafter PRISCILLA) executed an Extrajudicial x x xSettlement of Estate dated January 20, 1987, adjudicating the entire Lot No. 1253, covering 4,280 square meters, to LORETO. On January 29, 1987, Transfer Certificate of Title (TCT) No. T-16693 was issued in favor of LORETO, EFREN and PRISCILLA, but on even date, TCT No. T-16693 was cancelled and TCT No. T-16694, covering the said property, was issued in the name of LORETO alone.

 On July 31, 1987, GABINO JR., as petitioner, filed a Petition for the

Surrender of TCT No. T-16694, covering Lot No. 1253, with the Regional Trial Court of San Jose City, Sixth Judicial Region, against LORETO, docketed as Cadastral Case No. 87-731-A. The plaintiff alleged that, being the owner of x x x Lot No. 1253-B, under TCT No. T-16694, by virtue of the sale that took place on May 12, 1986, he is entitled to ask for the surrender of the owner’s copy of TCT No. T-16694 to the Register of Deeds of Antique in order to effect the transfer of title to the name of the petitioner. However, as per motion of both counsels[,] since the parties seemed to have already reached an amicable settlement without the knowledge of their counsels, the trial court issued  an Order dated March 21, 1994 sending the case to the archives.

 On September 21, 1988, [GABINO JR.] paid real estate taxes on the land

he bought from LORETO as per Tax Declaration No. 1038 where the property was specified as Lot No. 1253-B. GABINO JR. thereafter sold the same lot to Wilfredo Vagilidad (hereafter WILFREDO) as per Deed of Absolute Sale  dated December 7, 1989. On even date, Deed of Absolute Sale of a Portion of Land involving the opt-described property was also executed by LORETO in favor of WILFREDO. The aforementioned deeds, which were both executed on December 7, 1989 [and] notarized by Atty. Warloo Cardenal[,] [appear] to have been given the same entry number in his notarial books as both contained the designation “Document No. 236, Page No. 49, Book No. XI, Series of 1989[.”]

 Corollarily, on February 14, 1990, the sale of Lot No. 1253-B to

WILFREDO was registered with the Registry of Deeds of the Province of Antique under Entry No. 180425. Consequently, TCT No. T-18023, cancelling TCT No. 16694, was issued in favor of WILFREDO pursuant to the Deed of Absolute Sale dated December 7, 1989.

 On October 24, 1991, spouses WILFREDO and LOLITA obtained a loan

from the Philippine National Bank (PNB for brevity) in the amount of P150,000.00 and mortgaged Lot No. 1253-B as collateral of the said loan and the transaction was inscribed at the back of TCT No. 18023 as Entry No. 186876. Subsequently, the xxx real estate mortgage was cancelled under Entry No. 191053 as per inscription dated November 17, 1992 in xxx TCT No. 18023.

 Subsequently, WILFREDO obtained another loan from Development

Bank of the Philippines (DBP for brevity) in the amount of P200,000.00 and mortgaged Lot No. 1253-B as collateral of the xxx loan and the transaction was inscribed at the back of TCT No. 18023 as Entry No. 196268. The said loan was paid and, consequently, the mortgage was cancelled as Entry No. 202500.

             On September 29, 1995, spouses GABINO and Ma. Dorothy Vagilidad (hereafter DOROTHY), as plaintiffs, filed a Complaint for Annulment of Document, Reconveyance and Damages, with the Regional Trial Court of Antique, Sixth Judicial Region, Branch 11, against spouses WILFREDO and Lolita Vagilidad (hereafter LOLITA), docketed as Civil Case No. 2825. The plaintiffs claimed that they are the lawful owners of Lot No. 1253-B which was sold to him by LORETO in 1986. They alleged that [GABINO JR.] is a nephew of defendant WILFREDO. They likewise raised that when GABINO SR. died, defendant WILFREDO requested GABINO JR. to transfer the ownership of Lot No. 1253-B in defendantWILFREDO’s name for loaning purposes with the agreement that the land will be returned when the plaintiffs need the same. They added that, pursuant to the mentioned agreement, plaintiff GABINO JR., without the knowledge and consent of his spouse, DOROTHY, executed the Deed of Sale dated December 7, 1989 in favor of defendant WILFREDO receiving nothing as payment therefor. They pointed out that after defendant WILFREDO was able to mortgage the property, plaintiffs demanded the return of the property but the defendants refused to return the same. The plaintiffs claimed that the same document is null and void for want of consideration and the same does not bind the non-consenting spouse. They likewise prayed that the defendant be ordered to pay the plaintiffs not less than P100,000.00 as actual and moral damages, P10,000.00 as attorney’s fees and P5,000.00 as litigation expenses.

 For their part, the defendants, on January 15, 1996, filed their Answer,

denying the material allegations of the plaintiffs. Defendants claimed that they are the lawful owners of Lot No. 1253-B. They alleged that LORETO, with conformity of his wife, sold to them Lot No. 1253 on December 7, 1989 for P5,000.00 and the transaction was registered with the Register of Deeds of the Province of Antique under Entry No. 180425. They added that, subsequently, TCT No. T-18023, covering Lot No. 1253-B, was issued in favor of the defendants. Hence, they claimed that the plaintiffs be directed to pay the defendants P200,000.00 as moral damages, P50,000.00 as exemplary damages, P20,000.00 as attorney’s fees and P30,000.00 for litigation expenses.[4]

           The trial court ruled in favor of petitioners WILFREDO and LOLITA and held that LORETO did not validly convey Lot No. 1253-B to GABINO, JR. onMay 12, 1986 since at that time, the heirs of ZOILO had not partitioned Lot No. 1253.[5] It ruled that LORETO could only sell at that time his aliquot share in the inheritance. He could not have sold a divided part thereof designated by metes and bounds. Thus, it held that LORETO remained the owner of the subject lot when he sold it to WILFREDO on December 7, 1989. It further found that there was no proof that WILFREDO knew of the sale that took place between LORETO and GABINO, JR. on May 12, 1986. The dispositive portion of the decision states:

            WHEREFORE, in view of the foregoing pronouncements and a preponderance of evidence, judgment is hereby rendered:             1.         FINDING the defendants WILFREDO VAGILIDAD and LOLITA VAGILIDAD to have duly acquired ownership of Lot No. 1253-B containing an area of 1,604 square meters, more or less, situated in San Jose, Antique;             2.         SUSTAINING the validity of Transfer Certificate of Title No. T-18023 covering the subject Lot No. 1253-B and issued in the name of the defendant WILFREDO VAGILIDAD, married to the defendant LOLITA VAGILIDAD;             3.         DISMISSING the complaint of the plaintiffs GABINO VAGILIDAD, JR. and MA. DOROTHY VAGILIDAD, as well as the counterclaims of the defendants WILFREDO VAGILIDAD and LOLITA VAGILIDAD and of the defendants LORETO LABIAO and FRANCISCA LABIAO; and             4.         PRONOUNCING no cost.[6]

           

           GABINO, JR. and DOROTHY filed an appeal with the Court of Appeals. The appellate court reversed and set aside the decision of the court a quo, viz.:

            WHEREFORE, premises considered, the Decision dated January 26, 1999 of the Regional Trial Court of Antique, Sixth Judicial Region, Branch 11, in Civil Case No. 2825, is hereby REVERSED and SET ASIDE and a new one is entered: (1) declaring the Deed of Absolute Sale [of Portion of Land] dated December 7, 1989 executed by appellee LORETO in favor of appellee WILFREDO null and void; (2) ordering the defendants-appellees WILFREDO and LOLITA to reconvey Lot No. 1253-B to plaintiffs-appellants GABINO, JR. and DOROTHY; and (3) 

ordering the defendants-appellees to pay the plaintiffs-appellants P100,000.00 as moral damages, P10,000.00 as attorney’s fees and P5,000.00 as litigation expenses.[7]

 

The appellate court ruled that the sale made by LORETO in favor of GABINO, JR. on May 12, 1986 is valid. The rights of LORETO to succession are transmitted from the moment of ZOILO’s death in 1931. Thus, when LORETO sold the 1,604-square meter portion of Lot No. 1253 to GABINO JR., he already had the right as co-owner to his share to Lot No. 1253, even if at that time the property had not yet been partitioned. Consequently, the sale made by LORETO in favor of WILFREDO on December 7, 1989 is void because LORETO and FRANCISCA were no longer the owners of Lot No. 1253-B as of that time. The appellate court also held WILFREDO and LOLITA liable for moral damages for falsifying the fictitious deeds of sale on December 7, 1989.             

           WILFREDO and LOLITA moved for reconsideration but the motion was denied in the questioned Resolution dated November 13, 2003. Hence, this petition for review on certiorari raising the following errors:

 I 

THE HONORABLE COURT OF APPEALS ERRED IN NOT APPLYING ARTICLE 1349 AND ARTICLE 1460 OF THE NEW CIVIL CODE IN THE CASE AT BAR. 

II THE HONORABLE COURT OF APPEALS ERRED IN NOT APPLYING THE PROVISION OF ARTICLE 1544 OF THE NEW CIVIL CODE AND THE DOCTRINE OF DOUBLE SALE THAT THE BUYER WHO IS IN POSSESSION OF THE TORRENS TITLE AND HAD THE DEED OF SALE REGISTERED MUST PREVAIL. 

III THE HONORABLE COURT OF APPEALS ERRED IN NOT APPLYING ARTICLE 1391 OF THE NEW CIVIL CODE AND THE DOCTRINE THAT IN CASE OF FRAUD, ACTION FOR RECONVEYANCE MUST BE BROUGHT WITHIN FOUR (4) YEARS FROM THE DISCOVERY OF THE FRAUD.

IV 

THE HONORABLE COURT OF APPEALS ERRED IN AWARDING PRIVATE RESPONDENT MORAL DAMAGES, ATTORNEY’S FEES AND LITIGATION EXPENSES.[8]       

 

          We deny the petition.

I

          First, petitioners contend that the Deed of Absolute Sale between LORETO and GABINO, JR. does not have a determinate object. They anchor their claim on the following discrepancies: (1) the object of the Deed of Absolute Sale between LORETO and GABINO, JR. is Lot No. 1253 with an area of 1,604 square meters; (2) the object of the Deed of Absolute Sale of Portion of Land between LORETO and WILFREDO is a portion of Lot No. 1253, known as Lot No. 1253-B, also with an area of 1,604 square meters;[9] (3) the Deed of Absolute Sale between LORETO and GABINO, JR. shows that its object, Lot No. 1253, isnot registered under the Land Registration Act nor under the Spanish Mortgage Law; and (4) the property subject of this action, Lot No. 1253-B, was taken from Lot No. 1253 containing an area of 4,280 square meters previously registered in the name of ZOILO under Original Certificate of Title (OCT) No. RO-2301. [10]With these discrepancies, petitioners contend that either the Deed of Absolute Sale between LORETO and GABINO, JR. does not have a determinate object or that Lot No. 1253-B, the subject parcel, is not the object thereof. Hence, absent a determinate object, the contract is void. They rely on Articles 1349 and 1460 of the Civil Code, viz.:

            Art. 1349.        The object of every contract must be determinate, as to its kind. The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract, provided it is possible to determine the same, without the need of a new contract between the parties.                               Art. 1460.        A thing is determinate when it is particularly designated or physically segregated from all others of the same class.                       The requisite that a thing be determinate is satisfied if at the time the contract is entered into, the thing is capable of being made determinate without the necessity of a new or further agreement between the parties.                                   

          Petitioners err. The evidence on record shows that Lot No. 1253-B, the subject parcel, and the lot described as Lot No. 1253 in the Deed of Absolute Sale

of May 12, 1986 between LORETO and GABINO, JR., are the same. In the Deed of Absolute Sale, Lot No. 1253 is described, viz.: 

            A parcel of land (Lot No. 1253 of the Cadastral Survey of San Jose), with the improvements thereon. Bounded on the North [by] 1254 and 1255; on the South by road; on the East by 1253 and road on the West by 1240-Angel Salazar; containing an area of 1,604 square meters more or less declared under Tax Declaration No. 4159.[11]     

           In the Deed of Absolute Sale of Portion of Land of December 7, 1989 between LORETO and WILFREDO, the subject parcel is described, viz.: 

            A parcel of land (Lot No. 1253. Ap-06-00271) of the Cadastral Survey of San Jose, LRC Cad. Rec. No. 936), situated at Atabay, San Jose, Antique. Bounded on the N. and E. along lines 1-2-3 by lot 1255; San Jose Cadastre; on the S. along line 3-4 by Road; on the W. along line 4-5 by Lot 1240; San Jose Cadastre; and on the N. along line 5-1 by Lot 1254, San Jose Cadastre containing an area of [Four] Thousand Two Hundred Eighty (4,280) square meters, more or less.

             of which a portion of land subject of this sale is hereinbelow (sic) particularly described as follows, to wit:

               A portion of Lot No. 1253-B of the Cadastral Survey of San Jose, situated at Atabay, San Jose, Antique. Bounded on the North by Lot No. 1254; South by Road; West by Lot 1253-A; and on the East by Lot No. 1253-C; containing an area of 1,604 square meters, more or less.[12]      

            The description of Lot No. 1253, the object of the Deed of Absolute Sale, as “not registered under Act No. 196[,] otherwise known as the Land Registration Act, nor under the Spanish Mortgage Law”[13] is a stray description of the subject parcel. It is uncorroborated by any evidence in the records. This descriptionsolely appears on the Deed of Absolute Sale and the discrepancy was not explained by LORETO who signed the Deed of Absolute Sale as vendor. LORETO does not, in fact, deny the existence of the Deed of Absolute Sale. He merely counters that the Deed of Absolute Sale was purportedly a mortgage. However,LORETO’s claim that it was one of mortgage is clearly negated by a Certification[14] issued by the Bureau of Internal Revenue dated May 12, 1986. It certified that LORETO was not required to pay the capital gains tax on the transfer

of Lot No. 1253 to GABINO, JR. because the property was classified as an ordinary asset.    

           To be sure, petitioners could have easily shown that LORETO owned properties other than Lot No. 1253 to bolster their claim that the object of the Deed of Absolute Sale was different from Lot No. 1253-B which is the object described in the Deed of Absolute Sale of Portion of Land. They did not proffer any evidence.

           The trial court itself comprehensively traced the origin of Lot No. 1253-B. It clearly demonstrated that the subject parcel was originally part of the registered lot of ZOILO. It also showed how the subject parcel was eventually bounded by Lot No. 1253-A on the West and by Lot No. 1253-C on the East, as the lot would be later described in the Deed of Absolute Sale of Portion of Land.

           The trial court found that ZOILO previously owned Lot No. 1253 under OCT No. RO-2301 issued on March 3, 1931. On November 14, 1986, Entry No. 167922 was inscribed in the certificate of title, per Order dated March 30, 1978 of Judge Noli Ma. Cortes of the then Court of First Instance of Antique, stating that it was a reconstituted certificate of title.[15] Lot No. 1253 was subdivided by virtue of a subdivision plan dated June 19, 1987. On January 20, 1987, an Extrajudicial Settlement of Estate executed by LORETO, EFREN and PRISCILLA was entered as Entry No. 170722. The OCT of ZOILO was cancelled by TCT No. T-16693 in the names of LORETO, EFREN and PRISCILLA on January 29, 1987. TCT No. T-16693 was cancelled on the same day by TCT No. T-16694 in the name of LORETO alone. The TCT was partially cancelled by the issuance of TCTs covering Lot Nos. 1253-A, 1253-C and 1253-D. The TCT of Lot No. 1253-B was issued in the name of WILFREDO married to LOLITA on February 15, 1990. WILFREDO’s TCT No. T-18023 appears to be a transfer fromLORETO’s TCT No. T-16694.                

         

II

          Next, petitioners contend that the appellate court should have upheld the title of WILFREDO under Article 1544 of the Civil Code and the doctrine of double sale where the buyer who is in possession of the Torrens Title must prevail.[16] First, petitioners’ title was issued pursuant to the purported Deed of Absolute Sale of Portion of Land dated December 7, 1989. Second, WILFREDO did not see any encumbrance at the back of the title of the subject lot when he purchased it

from LORETO on December 7, 1989. Thus, since he is not bound to go beyond the certificate of title, he has acquired the subject property in due course and in good faith.       

 

          We disagree. Article 1544 of the Civil Code states, viz.:             Art.      1544.   If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.             Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith recorded it in the Registry of Property.             Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.                   

  

Petitioners’ reliance on Article 1544 is misplaced. While title to the property was issued in WILFREDO’s name on February 15, 1990, the following circumstances show that he registered the subject parcel with evident bad faith.

First, the Deed of Absolute Sale of Portion of Land dated December 7, 1989 between LORETO and WILFREDO is tainted with blatant irregularities. It is a fact that the Deed of Absolute Sale of Portion of Land and the Deed of Absolute Sale between GABINO, JR. and WILFREDO are of even date. Both Deeds had the same object – Lot No. 1253-B. Both deeds were notarized by Atty. Warloo Cardenal and bear the same entry in his notarial register: Document No. 236, Page No. 49, Book No. XI, Series of 1989.

Second, the testimony of a disinterested witness, Febe Mabuhay, established the irregularity. Mabuhay used to work as secretary for Atty. Cardenal and co-signed as witness in both Deeds. She stated that Atty. Cardenal instructed her to prepare the two documents in the last week of November 1989. She was present when GABINO, JR. signed the Deed of Absolute Sale. She testified that after GABINO, JR. left, LORETO and his wife FRANCISCA arrived and signed the Deed of Absolute Sale of Portion of Land.[17] The Decision of the court a quo further states, viz.:

            [Mabuhay testified that when she prepared the two documents, she] noticed the similarity of Lot No. 1253 as technically described in both documents but she did not call the attention of Atty. Warlo[o] Cardenal. [She likewise stated

that Atty. Cardenal] specifically instructed her to assign the same document number to the two documents notarized onDecember 7, 1989.[18]

         

          Third, the testimony of Atty. Ernesto Estoya, then Clerk of Court of the Regional Trial Court of Antique, supports the claim that there was bad faith in the execution of the Deed of Absolute Sale of Portion of Land. Atty. Estoya brought the notarial record of Atty. Cardenal for the year 1989 pursuant to a subpoena. He stated that he had not brought both Deeds as required in the subpoena because “Doc. No. 236; Page No. 49; Book No. XI; Series of 1989” as entered in the notarial register of Atty. Cardenal could not be found in the files. He further explained that the last document on page 48 of the notarial register of Atty. Cardenal is Document No. 235, while the first document on page 49 is Document No. 239, leaving three unexplained gaps for document numbers 236, 237 and 238. Atty. Estoya stated that he was not the one who received the 1989 notarial register of Atty. Cardenal when the latter surrendered it since he assumed office only in 1994.[19]     

           Fourth, we give credence to the testimony of GABINO, JR. that LORETO and WILFREDO had employed the scheme to deprive him and his wife of their lawful title to the subject property. The facts speak for themselves. WILFREDO knew that he could not use the Deed of Absolute Sale executed in his favor by GABINO, JR. because the latter had no title to transfer. Without a title, WILFREDO could not use the subject property as collateral for a bank loan. Hence, LORETO, who had refused to surrender the title to GABINO, JR. and in whose name the land remained registered, had to execute the Deed of Absolute Sale of Portion of Land in favor of WILFREDO. Hence, it was convenient for WILFREDO to deny the existence of the Deed of Absolute Sale of December 7, 1989between him and GABINO, JR. But the evidence on record shows that after he was able to register the subject property in his name on February 15, 1990, WILFREDO used the title as collateral in the loans that he contracted with the Philippine National Bank on October 24, 1991 and the Development Bank of thePhilippines on December 1, 1993. This supports the claim of GABINO, JR. that WILFREDO needed the lot for loaning purposes.         

With these corroborating circumstances and the following irrefragable documents on record, the evidence preponderates in favor of GABINO, JR. One, he acquired Lot No.1253-B from LORETO on May 12, 1986[20] by virtue of the Deed of Absolute Sale. Two, the Bureau of Internal Revenue issued a Certification, also on May 12, 1986, for the exemption from the payment of capital gains tax

when LORETO sold to him the subject parcel. Three, GABINO, JR. paid the real estate tax on the subject parcel in 1987. Four, he filed a Petition for the Surrender of LORETO’s title on July 31, 1987 so he could transfer the title of the property in his name.           

           Petitioners likewise err in their argument that the contract of sale between LORETO and GABINO, JR. is void on the ground that at the time of the sale onMay 12, 1986, LORETO had a right to dispose only an aliquot part of the yet undivided property of ZOILO. The subject parcel, being an inherited property, is subject to the rules of co-ownership under the Civil Code.

           Co-ownership is the right of common dominion which two or more persons have in a spiritual part of a thing, not materially or physically divided. [21] Before the partition of the property held in common, no individual or co-owner can claim title to any definite portion thereof. All that the co-owner has is an ideal or abstract quota or proportionate share in the entire property.[22]     

 

          LORETO sold the subject property to GABINO, JR. on May 12, 1986 as a co-owner. LORETO had a right, even before the partition of the property onJanuary 19, 1987,[23] to transfer in whole or in part his undivided interest in the lot even without the consent of his co-heirs. This right is absolute in accordance with the well-settled doctrine that a co-owner has full ownership of his pro-indiviso share and has the right to alienate, assign or mortgage it, and substitute another person for its enjoyment.[24] Thus, what GABINO, JR. obtained by virtue of the sale on May 12, 1986 were the same rights as the vendor LORETO had as co-owner, in an ideal share equivalent to the consideration given under their transaction.[25]   

           LORETO sold some 1,604 square meters of Lot No. 1253 to GABINO, JR. Consequently, when LORETO purportedly sold to WILFREDO on December 7, 1989 the same portion of the lot, he was no longer the owner of Lot No. 1253-B. Based on the principle that “no one can give what he does not have,”[26]LORETO could not have validly sold to WILFREDO on December 7, 1989 what he no longer had. As correctly pointed out by the appellate court, the sale made by LORETO in favor of WILFREDO is void as LORETO did not have the right to transfer the ownership of the subject property at the time of sale.

      

III

          Petitioners contend that since the subdivision plan of Lot No. 1253 was only approved on January 19, 1987, the appellate court can not presume

that the aliquot part of LORETO was the parcel designated as Lot 1253-B.[27]

          Petitioners err. The mere fact that LORETO sold a definite portion of the co-owned lot by metes and bounds before partition does not, per se, render the sale a nullity. We held in Lopez v. Vda. De Cuaycong[28] that the fact that an agreement purported to sell a concrete portion of a co-owned property does not render the sale void, for it is well-established that the binding force of a contract must be recognized as far as it is legally possible to do so.[29]    

           In the case at bar, the contract of sale between LORETO and GABINO, JR. on May 12, 1986 could be legally recognized. At the time of sale, LORETO had an aliquot share of one-third of the 4,280-square meter property or some 1,426[30] square meters but sold some 1,604 square meters to GABINO, JR. We have ruled that if a co-owner sells more than his aliquot share in the property, the sale will affect only his share but not those of the other co-owners who did not

consent to the sale.[31] Be that as it may, the co-heirs of LORETO waived all their rights and interests over Lot No. 1253 in favor of LORETO in an Extrajudicial Settlement of Estate dated January 20, 1987. They declared that they have previously received their respective shares from the other estate of their parents ZOILO and PURIFICACION.[32] The rights of GABINO, JR. as owner over Lot No. 1253-B are thus preserved. These rights were not effectively transferred by LORETO to WILFREDO in the Deed of Absolute Sale of Portion of Land. Nor were these rights alienated from GABINO, JR. upon the issuance of the title to the subject property in the name of WILFREDO. Registration of property is not a means of acquiring ownership.[33] Its alleged incontrovertibility cannot be successfully invoked by WILFREDO because certificates of title cannot be used to protect a usurper from the true owner or be used as a shield for the commission of fraud.[34]     

IV

          On the issue of prescription, petitioners contend that the appellate court failed to apply the rule that an action for reconveyance based on fraud prescribes after the lapse of four years.[35] They cite Article 1391[36] of the Civil Code and the case of Gerona v. De Guzman.[37]

           We disagree. This Court explained in Salvatierra v. Court of Appeals,[38] viz.:

            An action for reconveyance based on an implied or constructive trust must perforce prescribe in ten years and not otherwise. A long line of decisions of this Court, and of very recent vintage at that, illustrates this rule. Undoubtedly, it is now well-settled that an action for reconveyance based on an implied or constructive trust prescribes in ten years from the issuance of the Torrens title over the property. The only discordant note, it seems, is Balbin v. Medalla, which states that the prescriptive period for a reconveyance action is four years. However, this variance can be explained by the erroneous reliance on Gerona v. de Guzman. But in Gerona, the fraud was discovered on June 25, 1948, hence Section 43(3) of Act No. 190 was applied, the New Civil Code not coming into effect until August 30, 1950 xxx. It must be stressed, at this juncture, that Article 1144 and Article 1456 are new provisions. They have no counterparts in the old Civil Code or in the old Code of Civil Procedure, the latter being then resorted to as legal basis of the four-year prescriptive period for an action for reconveyance of title of real property acquired under false pretenses.[39]

             [Thus,] under the present Civil Code, xxx just as an implied or constructive trust is an offspring of xxx Art. 1456, xxx so is the corresponding obligation to reconvey the property and the title thereto in favor of the true owner. In this context, and vis-á-vis prescription, Article 1144 of the Civil Code is applicable[, viz.:]                 Art. 1144.        The following actions must be brought within ten years from the time the right of action accrues:

           

1)         Upon a written contract;            2)         Upon an obligation created by law;            3)         Upon a judgment.[40] (emphases supplied)                  

 

Thus, in the case at bar, although the TCT of WILFREDO became indefeasible after the lapse of one year from the date of registration, the attendance of fraud in its issuance created an implied trust in favor of GABINO, JR. under Article 1456[41] of the Civil Code. Being an implied trust, the action for reconveyance of the subject property therefore prescribes within a period of ten years from February 15, 1990. Thus, when respondents filed the instant case with the court a quoon September 26, 1995, it was well within the prescriptive period.

V

          On the issue of damages, petitioners contend that the grant is erroneous and the alleged connivance between Atty. Cardenal and WILFREDO lacks basis.

           We disagree. The evidence on record is clear that petitioners committed bad faith in the execution of the purported Deed of Absolute Sale of Portion of Land dated December 7, 1989 between LORETO and WILFREDO. As stated by the appellate court, viz.:

            xxxx From the series of events, it can be reasonably inferred that appellees WILFREDO, LORETO and Atty. Cardenal connived in attempting to deprive appellants of Lot No. 1253-B, hence, the appellants’ entitlement to moral damages. Further, it is a well-settled rule that attorney’s fees are allowed to be awarded if the claimant is compelled to litigate with third persons or to incur expenses to protect his interest by reason of an unjustified act or omission of the party for whom it is sought. xxxx To protect themselves, the appellants engaged the services of counsel and incurred expenses in the course of litigation. Hence, we deem it equitable to award attorney’s fees to the appellant xxx.[42]

          IN VIEW WHEREOF, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. No. CV-68318 dated March 19, 2003 and November 13, 2003, respectively, are AFFIRMED in toto. Costs against petitioners.

 

SO ORDERED.

 THIRD DIVISION

  

HEIRS OF JULIAN TIRO,                                 Petitioners,    

-  versus  -    PHILIPPINE ESTATES CORPORATION,                         Respondents.

  G.R. No. 170528 Present: YNARES-SANTIAGO, J.,       Chairperson,AUSTRIA-MARTINEZ,CHICO-NAZARIO,NACHURA, andREYES, JJ. Promulgated: August 26, 2008

x - - - - - - - - - - - - - - - - - - - - - - - - - - - -  - - - - - - - - - - - - - - - - - - - - - x                                                  D E C I S I O N  CHICO-NAZARIO, J.:            This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision[1] dated 1 July 2005, rendered by the Court of Appeals in CA-G.R. CV No. 78582, which affirmed the Decision[2] dated 16 April 2002 of the Regional Trial Court (RTC), Branch 54, Lapu-Lapu City, in Civil Case No. 4824-L dismissing petitioners’ complaint and declaring the respondent as the owner of the disputed property.

 Petitioners Guillerma Tiro, Dominga Tiro Nunez and Maximo Tiro filed

before the RTC a Complaint for Quieting of Title against respondent Philippine Estates Corporation, a corporation duly organized and existing under the laws of the Philippines. The complaint was docketed as Civil Case No. 4824-L. Petitioners alleged that they are the children of the late Julian Tiro and the authorized representatives of the Heirs of the late Pedro Tiro.  Both decedents were

purportedly, during their lifetime, the lawful absolute and registered owners of the disputed land as evidenced by Original Certificate of Title (OCT) No. RO-1121.[3]  The disputed property is herein described as follows:

 A parcel of land (Lot 2914 of the Cadastral Survey of Opon,

L.R.C. Record No. 1003) situated in the Barrio of Marigondon, Municipality of Opon, Province of Cebu, Island ofMactan x x x; containing an area of EIGHT THOUSAND ONE HUNDRED TWENTY (8,120) SQUARE METERS.[4]

  

Petitioners averred that they and their predecessors-in-interest had been in actual possession of the disputed land since time immemorial until they were prevented from entering the same by persons claiming to be the new owners sometime in 1995.  After examining the records found in the Office of the Register of Deeds of Lapu-Lapu City, they discovered that OCT No. RO-1121 had already been cancelled as early as 1969 and that the subject property, after several other transfers, was presently registered in the name of respondent under Transfer Certificate of Title (TCT) No. 35672.[5] 

 The records in the Office of the Register of Deeds showed each transfer

involving the disputed land.  Petitioners learned that OCT No. RO-1121, registered in the names of Julian and Pedro Tiro, was cancelled on 10 September 1969.  In its place, TCT No. 2848 was issued in favor of Spouses Julio Baba and OlimpiaMesa.  The registration of the disputed property in favor of the Spouses Baba was supported by two documents: (1) an Extrajudicial Declaration of Heir and Confirmation of Sale[6] dated 20 August 1969, executed by Maxima Ochea (Ochea), claiming to be the only surviving heir of Julian and Pedro Tiro, wherein she confirmed and ratified an alleged sale of the subject land made before World War II by Julian and Pedro Tiro in favor of Spouses Bibiano Amores and IsabelDigno; and (2) another document entitled “Deed of Confirmation,[7]” also dated 20 August 1969, executed by the Spouses Amores, wherein they verified that they subsequently transferred the disputed property to the Spouses Baba sometime in 1947.

 

On 20 June 1979, TCT No. 2848 was cancelled to give way to the issuance of TCT No. 9415 in the name of Spouses Ronaldo Velayo and Leonor Manuel, after the Spouses Baba sold the disputed property to them. [8]   Subsequently, the same property was sold by the Spouses Velayo to Pacific Rehouse Corporation, as a consequence of which TCT No. 9415 was cancelled and TCT No. 30186 was issued in the name of the latter on 16 February 1995.[9]  Finally, on 25 October 1996, following the sale of the disputed land to respondent, TCT No. 30186 was cancelled and TCT No. 35672 was issued in its name.[10]

 Petitioners averred that Ochea, who executed the document “Extrajudicial

Declaration of Heir and Confirmation of Sale,” which resulted in the cancellation of OCT No. RO-1121 in the name of Julian and Pedro Tiro, was not in any way related to Julian and Pedro Tiro.  It was the petitioners’ contention that since Ocheawas not an heir of the original registered owners, she had no right to cause the transfer of the disputed property and, thus, her transfer and all subsequent transfers of said property, including that made to respondent, were invalid.[11]  Instead of presenting documents to evidence their relationship to the decedents Julian and Pedro Tiro, petitioners offered the testimonies of petitioners Maximo Tiro[12] and his son-in-law Joveniano Diasana.[13]  Finally, the petitioners prayed that all the transactions emanating from the “Extrajudicial Declaration of Heirs and Confirmation of Sale,” executed by Maxima Ochea, be declared void, including the transfer made in favor of the respondent; that the title which was issued in the name of respondent be cancelled; and that the property be restored and registered in the name of the petitioners.[14]

 In its Answer dated 10 February 1998, respondent claimed that its

predecessor-in-interest Pacific Rehouse Corporation acquired the subject land from the Spouses Velayo, the registered owners of the property who were also in possession of the same at the time of the sale.  There was nothing in the title or any circumstances during the sale that would indicate any defect in the Spouses Velayo’s title to the property.  Respondent pointed out that 27 years had elapsed since the cancellation of OCT No. RO-1121 before petitioners asserted their rights over the disputed land.  Moreover, petitioners’ predecessors-in-interest Julian and Pedro Tiro did not question the cancellation of their title to the property during their lifetimes.  Hence, respondent argued that petitioners’ action for quieting of title was barred by laches and prescription.[15]

 To support its allegations, respondent presented TCT No. 2914 in the name

of the Spouses Velayo as proof that they were the registered owners of the disputed property at the time they sold it to Pacific Rehouse Corporation.[16]  Additionally, respondent presented a Decision[17] dated 28 June 1994 in Civil Case No. R-1202, entitled Spouses Velayo v. Spouses Tiro, rendered by the Municipal Trial Court (MTC) of Lapu-Lapu City to further prove that the Spouses Velayowere also in possession of the disputed property at the time of its sale to Pacific Rehouse Corporation.   Civil Case No. R-1202 was a case for Forcible Entry with Writ of Preliminary Mandatory Injunction, and in its Decision dated 28 June 1994, the MTC declared the Spouses Velayo the rightful possessors of the subject property and ordered petitioner Maximo Tiro and his co-defendant spouse to vacate the portion of the property which they forcibly entered on 7 May 1994. Respondent likewise presented the Deed of Sale[18] dated 4 October 1994 executed by the Spouses Velayo in favor of Pacific Rehouse Corporation; the Deed of Transfer[19] dated 23 October 1996 executed by Pacific Rehouse Corporation in favor of respondent; and various tax declarations issued in the names of the Spouses Baba, Spouses Velayo, Pacific Rehouse Corporation, and respondent during the years that each of them claimed ownership over the disputed property.[20]

 On 16 April 2002, the RTC issued a Decision[21] in Civil Case No. 4824-L

dismissing petitioners’ Complaint.  The trial court noted that petitioners’ claims of filiation to Julian and Pedro Tiro were not supported by documents.  The testimonies of petitioners’ witnesses were also inconsistent as to the location of the disputed land, as well as the number of Pedro Tiro’s children.  The RTC stressed that even assuming that petitioners were heirs of the late Julian and Pedro Tiro, and Maxima Ochea was in no way related to them, petitioners’ claims had already prescribed, considering that the Complaint was filed more than ten years since the registration of the disputed property in the name of the Spouses Baba in 1969. Petitioners’ allegation that they were in continuous possession of the subject property until 1995 was also belied by the Decision dated 28 June 1994 of the MTC in Civil Case No. R-1202, ordering petitioners to vacate the disputed property, which they forcibly entered, and to restore possession to the Spouses Velayo.  Lastly, the RTC ruled that respondent was an innocent purchaser for value who relied on the correctness of the certificate of title in the name of the vendor.

 Petitioners filed a Notice of Appeal on 2 May 2002 questioning the 16 April

2002 Decision of the RTC.  The petitioners filed with the Court of Appeals an appeal docketed as CA-G.R. CV No. 78582, questioning the decision rendered by the trial court.

 However, instead of filing an Appellants’ Brief as required by the Court of

Appeals, petitioners filed before the Court of Appeals in CA-G.R. CV No. 78582a Motion to Grant New Trial Pursuant to Section 1, Rule 53, [22] on 8 January 2004.  They attached as annexes to their motion the following documents to prove that Julian Tiro was their father: (1) Certificates of Baptism of Pastor Tiro and Dominga Tiro;[23] (2) marriage contract of Dominga Tiro;[24] (3) Certificate of Marriage of Guillerma Tiro;[25] (4) Certification of Marriage of Pastor Tiro;[26] and (5) Certificate of Baptism of Victoria Tiro.[27]  In a Resolution[28] dated 5 August 2004, the appellate court denied the motion.

 In its Decision dated 1 July 2005, the Court of Appeals likewise denied the

petitioners’ appeal in CA-G.R. CV No. 78582 and affirmed the RTC Decision dated 16 April 2002 in Civil Case No. 4824-L.  The appellate court found that petitioners failed to prove that they were the heirs of Julian and Pedro Tiro.  It also took into account the fact that during their lifetime, Julian and Pedro Tiro never questioned the transactions which affected their land.  The Court of Appeals gave significant weight to the respondent’s statements that it had acquired the subject property from the registered owners, supported by the registered titles that were presented in court.  Thus, the Court of Appeals held that even assuming that the first few transfers turned out to be fraudulent, the transfer to respondent, a purchaser in good faith, may be the root of a valid title.[29]

 Petitioners filed a Motion for Reconsideration dated 25 July 2005,[30] which

the Court of Appeals denied in a Resolution dated 28 October 2005.[31]

 Hence, the present Petition, in which petitioners make the following

assignment of errors: 

I           

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT THE ACT OF THE REGISTER (sic) OF DEEDS OF REGISTERING A CLEARLY VOID AND UNREGISTRABLE DOCUMENT CONFERS NO VALID TITLE ON THE PRESENTOR AND HIS SUCCESSORS-IN-INTEREST.

 II 

THE COURT OF APPEALS GRAVELY ERRED IN NOT APPLYING THE  DOCTRINE IN SPOUSES SANTIAGO, ET AL. VS. COURT OF APPEALS, ET AL., G.R. [NO.] 103959, AUGUST 21, 1997 WHEREBY IT IS HELD [THAT] “THE TORRENS SYSTEM DOES NOT CREATE OR VEST TITLE.  IT ONLY CONFIRMS AND RECORDS TITLE ALREADY EXISTING AND VESTED.  IT DOES NOT PROTECT A USURPER FROM THE TRUE OWNER NOR CAN IT BE A SHIELD IN THE COMMISSION OF FRAUD.  WHERE ONE DOES NOT HAVE ANY RIGHTFUL CLAIM OVER A REAL PROPERTY, THE TORRENS SYSTEM OF REGISTRATION CONFIRM[S] OR RECORD[S] NOTHING.[32]

  This Petition lacks merit. Petitioners’ main contention is, since Ochea was not even related to either

Julian or Pedro Tiro, the “Declaration of Heir and Confirmation of Sale” which she executed could not have resulted in the cancellation of OCT No. RO-1121 in the names of Julian and Pedro Tiro.  They further argue that since the initial transfer of the disputed land was fraudulent, therefore, all the subsequent transfers, including that made to respondent, were all invalid. 

 Petitioners’ arguments are unfounded. Insofar as a person who has fraudulently obtained property is concerned, the

consequently fraudulent registration of the property in the name of such person would not be sufficient to vest in him or her title to the property. Certificates of title merely confirm or record title already existing and vested.  The indefeasibility of the torrens title should not be used as a means to perpetrate fraud against the rightful owner of real property.  Good faith must concur with registration because,

otherwise, registration would be an exercise in futility.[33]  However, where good faith is established, as in the case of an innocent purchaser for value, a forged document may become the root of a valid title. [34]

 A person is considered in law as an innocent purchaser for value when he

buys the property of another, without notice that some other person has a right or an interest in such property, and pays a full price for the same at the time of such purchase, or before he has notice of the claims or interest of some other person in the property.  A person dealing with registered land may safely rely on the correctness of the certificate of title of the vendor/transferor, and the law will in no way oblige him to go behind the certificate to determine the condition of the property.  The courts cannot disregard the rights of innocent third persons, for that would impair or erode public confidence in the torrens system of land registration.  Thus, a title procured by fraud or misrepresentation can still be the source of a completely legal and valid title if the same is in the hands of an innocent purchaser for value.[35]

 In the present case, respondent was clearly an innocent purchaser for

value.  It purchased the disputed property from Pacific Rehouse Corporation, along with other parcels of land for a valuable consideration, i.e., shares of common stock of respondent with a value of P148,100,400.00.  Pacific Rehouse Corporation, in turn, purchased the property from Spouses Velayo, also for valuable consideration in the amount of P1,461,600.00.  The certificates of title of Pacific RehouseCorporation and the Spouses Velayo were clean and appeared valid on their face, and there was nothing therein which should have put the respondent on its guard of some defect in the previous registered owners’ title to the disputed property.  In addition to their certificate of title, the Spouses Velayo even presented to PacificRehouse Corporation a copy of the MTC Decision dated 28 June 1994 in Civil Case No. R-1202 ordering petitioners to vacate the disputed property, which they forcibly entered, and to restore possession thereof to the Spouses Velayo.  The said Decision supported the Spouses Velayo’s claim of title to the disputed property. 

In Spouses Chu, Sr. v. Benelda Estate Development Corporation,[36] this Court pronounced that it is crucial that a complaint for annulment of title must

allege that the purchaser was aware of the defect in the title, so that the cause of action against him or her will be sufficient.  Failure to do so, as in the case at bar, is fatal for the reason that the court cannot render a valid judgment against the purchaser who is presumed to be in good faith in acquiring said property.  Failure to prove, much less impute, bad faith to said purchaser who has acquired a title in his or her favor would make it impossible for the court to render a valid judgment thereon, due to the indefeasibility and conclusiveness of his or her title.

 In this case, petitioners directed all allegations of bad faith solely

at Ochea.  The property in question had already been the subject of five succeeding transfers to persons who were not accused of having purchased the same in bad faith.  Petitioners’ attempt, therefore, to have respondent’s certificate of title to the disputed property annulled, must fail. 

In Veloso v. Court of Appeals,[37] this Court enunciated that a title issued to an innocent purchaser and for value cannot be revoked on the basis that the deed of sale was falsified, if he had no knowledge of the fraud committed.  The Court also provided the person prejudiced with the following recourse:

 Even granting for the sake of argument, that the petitioner’s

signature was falsified and consequently, the power of attorney and the deed of sale were null and void, such fact would not revoke the title subsequently issued in favor of private respondent Aglaloma.  In Tenio-Obsequio v. Court of Appeals, it was held, viz:  

“The right of an innocent purchaser for value must be respected and protected, even if the seller obtained his title through fraud.  The remedy of the person prejudiced is to bring an action for damages against those who caused or employed the fraud, and if the latter are insolvent, an action against the Treasurer of the Philippines may be filed for recovery of damages against the Assurance Fund.”  (Emphasis supplied.)    

  

          Petitioners cite Sps. Santiago v. Court of Appeals.[38]  In Santiago, the plaintiff and the defendants were the parties to the void contract of sale of the disputed property.  The contract was considered simulated for lack of consideration and given the fact that defendants failed to take possession of the subject property.  For this reason, the Court did not hesitate to cancel the certificates of

title in the defendants’ names, since they were found not to be the rightful owners of the property.  More importantly, the defendants were not innocent purchasers for value, since they were privy to the nullity of the contract of sale covering the property.  Santiago is clearly inapplicable to the present case.  Respondent herein who paid adequate consideration for the disputed land, took possession of the same, and is already the fifth transferee following the allegedly fraudulent initial transfer of the land, cannot be placed in the same position as a vendor who was a party to a simulated sale of a real property. 

IN VIEW OF THE FOREGOING, the instant Petition is DENIED.  The assailed Decision of the Court of Appeals in CA-G.R. CV No. 78582, promulgated on 1 July 2005, is AFFIRMED.  Costs against petitioners.

 SO ORDERED.   

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 159310               February 24, 2009

CAMILO F. BORROMEO, Petitioner, vs.ANTONIETTA O. DESCALLAR, Respondent.

D E C I S I O N

PUNO, C.J.:

What are the rights of an alien (and his successor-in-interest) who acquired real properties in the country as against his former Filipina girlfriend in whose sole name the properties were registered under the Torrens system?

The facts are as follows:

Wilhelm Jambrich, an Austrian, arrived in the Philippines in 1983 after he was assigned by his employer, Simmering-Graz Panker A.G., an Austrian company, to work at a project in Mindoro. In 1984, he transferred to Cebu and worked at the Naga II Project of the National Power Corporation. There, he met respondent Antonietta Opalla-Descallar, a separated mother of two boys who was working as a waitress at St. Moritz Hotel. Jambrich befriended respondent and asked her to tutor him in English. In dire need of additional income to support her children, respondent agreed. The tutorials were held in Antonietta’s residence at a squatters’ area in Gorordo Avenue.

Jambrich and respondent fell in love and decided to live together in a rented house in Hernan Cortes, Mandaue City. Later, they transferred to their own house and lots at Agro-Macro Subdivision, Cabancalan, Mandaue City. In the Contracts to Sell dated November 18, 19851 and March 10, 19862 covering the properties, Jambrich and respondent were referred to as the buyers. A Deed of Absolute Sale dated November 16, 19873 was likewise issued in their favor. However, when the Deed of Absolute Sale was presented for registration before the Register of Deeds, registration was refused on the ground that Jambrich was an alien and could not acquire alienable lands of the public domain. Consequently, Jambrich’s name was erased from the document. But it could be noted that his signature remained on the left hand margin of page 1, beside respondent’s signature as buyer on page 3, and at the bottom of page 4 which is the last page. Transfer Certificate of Title (TCT) Nos. 24790, 24791 and 24792 over the properties were issued in respondent’s name alone.

Jambrich also formally adopted respondent’s two sons in Sp. Proc. No. 39-MAN,4 and per Decision of the Regional Trial Court of Mandaue City dated May 5, 1988.5

However, the idyll lasted only until April 1991. By then, respondent found a new boyfriend while Jambrich began to live with another woman in Danao City. Jambrich supported respondent’s sons for only two months after the break up.

Jambrich met petitioner Camilo F. Borromeo sometime in 1986. Petitioner was engaged in the real estate business. He also built and repaired speedboats as a hobby. In 1989, Jambrich purchased an

engine and some accessories for his boat from petitioner, for which he became indebted to the latter for about P150,000.00. To pay for his debt, he sold his rights and interests in the Agro-Macro properties to petitioner for P250,000, as evidenced by a "Deed of Absolute Sale/Assignment."6 On July 26, 1991, when petitioner sought to register the deed of assignment, he discovered that titles to the three lots have been transferred in the name of respondent, and that the subject property has already been mortgaged.

On August 2, 1991, petitioner filed a complaint against respondent for recovery of real property before the Regional Trial Court of Mandaue City. Petitioner alleged that the Contracts to Sell dated November 18, 1985 and March 10, 1986 and the Deed of Absolute Sale dated November 16, 1987 over the properties which identified both Jambrich and respondent as buyers do not reflect the true agreement of the parties since respondent did not pay a single centavo of the purchase price and was not in fact a buyer; that it was Jambrich alone who paid for the properties using his exclusive funds; that Jambrich was the real and absolute owner of the properties; and, that petitioner acquired absolute ownership by virtue of the Deed of Absolute Sale/Assignment dated July 11, 1991 which Jambrich executed in his favor.

In her Answer, respondent belied the allegation that she did not pay a single centavo of the purchase price. On the contrary, she claimed that she "solely and exclusively used her own personal funds to defray and pay for the purchase price of the subject lots in question," and that Jambrich, being an alien, was prohibited to acquire or own real property in the Philippines.

At the trial, respondent presented evidence showing her alleged financial capacity to buy the disputed property with money from a supposed copra business. Petitioner, in turn, presented Jambrich as his witness and documentary evidence showing the substantial salaries which Jambrich received while still employed by the Austrian company, Simmering-Graz Panker A.G.

In its decision, the court a quo found—

Evidence on hand clearly show that at the time of the purchase and acquisition of [the] properties under litigation that Wilhelm Jambrich was still working and earning much. This fact of Jambrich earning much is not only supported by documentary evidence but also by the admission made by the defendant Antoniet[t]a Opalla. So that, Jambrich’s financial capacity to acquire and purchase the properties . . . is not disputed.7

x x x

On the other hand, evidence . . . clearly show that before defendant met Jambrich sometime in the latter part of 1984, she was only working as a waitress at the St. Moritz Hotel with an income of P1,000.00 a month and was . . . renting and living only in . . . [a] room at . . . [a] squatter area at Gorordo Ave., Cebu City; that Jambrich took pity of her and the situation of her children that he offered her a better life which she readily accepted. In fact, this miserable financial situation of hers and her two children . . . are all stated and reflected in the Child Study Report dated April 20, 1983 (Exhs. "G" and "G-1") which facts she supplied to the Social Worker who prepared the same when she was personally interviewed by her in connection with the adoption of her two children by Wilhelm Jambrich. So that, if such facts were not true because these are now denied by her . . . and if it was also true that during this time she was already earning as much as P8,000.00 to P9,000.00 as profit per month from her copra business, it would be highly unbelievable and impossible for her to be living only in such a miserable condition since it is the observation of this Court that she is not only an extravagant but also an expensive person and not thrifty as she wanted to impress this Court in order to have a big saving as clearly shown by her actuation when she was already cohabiting and

living with Jambrich that according to her . . . the allowance given . . . by him in the amount of $500.00 a month is not enough to maintain the education and maintenance of her children.8

This being the case, it is highly improbable and impossible that she could acquire the properties under litigation or could contribute any amount for their acquisition which according to her is worth more than P700,000.00 when while she was working as [a] waitress at St. Moritz Hotel earning P1,000.00 a month as salary and tips of more or less P2,000.00 she could not even provide [for] the daily needs of her family so much so that it is safe to conclude that she was really in financial distress when she met and accepted the offer of Jambrich to come and live with him because that was a big financial opportunity for her and her children who were already abandoned by her husband.9

x x x

The only probable and possible reason why her name appeared and was included in [the contracts to sell dated November 18, 1985 and March 10, 1986 and finally, the deed of absolute sale dated November 16, 1987] as buyer is because as observed by the Court, she being a scheming and exploitive woman, she has taken advantage of the goodness of Jambrich who at that time was still bewitched by her beauty, sweetness, and good attitude shown by her to him since he could still very well provide for everything she needs, he being earning (sic) much yet at that time. In fact, as observed by this Court, the acquisition of these properties under litigation was at the time when their relationship was still going smoothly and harmoniously.10 [Emphasis supplied.]

The dispositive portion of the Decision states:

WHEREFORE, . . . Decision is hereby rendered in favor of the plaintiff and against the defendant Antoniet[t]a Opalla by:

1) Declaring plaintiff as the owner in fee simple over the residential house of strong materials and three parcels of land designated as Lot Nos. 1, 3 and 5 which are covered by TCT Nos. 24790, 24791 and 24792 issued by the Register of Deeds of Mandaue City;

2) Declaring as null and void TCT Nos. 24790, 24791 and 24792 issued in the name of defendant Antoniet[t]a Descallar by the Register of Deeds of Mandaue City;

3) Ordering the Register of Deeds of Mandaue City to cancel TCT Nos. 24790, 24791 and 24792 in the name of defendant Antoniet[t]a Descallar and to issue new ones in the name of plaintiff Camilo F. Borromeo;

4) Declaring the contracts now marked as Exhibits "I," "K" and "L" as avoided insofar as they appear to convey rights and interests over the properties in question to the defendant Antoniet[t]a Descallar;

5) Ordering the defendant to pay plaintiff attorney’s fees in the amount of P25,000.00 and litigation expenses in the amount of P10,000.00; and,

6) To pay the costs.11

Respondent appealed to the Court of Appeals. In a Decision dated April 10, 2002,12 the appellate court reversed the decision of the trial court. In ruling for the respondent, the Court of Appeals held:

We disagree with the lower court’s conclusion. The circumstances involved in the case cited by the lower court and similar cases decided on by the Supreme Court which upheld the validity of the title of the subsequent Filipino purchasers are absent in the case at bar. It should be noted that in said cases, the title to the subject property has been issued in the name of the alien transferee (Godinez et al., vs. Fong Pak Luen et al., 120 SCRA 223 citing Krivenko vs. Register of Deeds of Manila, 79 Phils. 461; United Church Board for World Ministries vs. Sebastian, 159 SCRA 446, citing the case of Sarsosa Vda. De Barsobia vs. Cuenco, 113 SCRA 547; Tejido vs. Zamacoma, 138 SCRA 78). In the case at bar, the title of the subject property is not in the name of Jambrich but in the name of defendant-appellant. Thus, Jambrich could not have transferred a property he has no title thereto.13

Petitioner’s motion for reconsideration was denied.

Hence, this petition for review.

Petitioner assigns the following errors:

I. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN DISREGARDING RESPONDENT’S JUDICIAL ADMISSION AND OTHER OVERWHELMING EVIDENCE ESTABLISHING JAMBRICH’S PARTICIPATION, INTEREST AND OWNERSHIP OF THE PROPERTIES IN QUESTION AS FOUND BY THE HONORABLE TRIAL COURT.

II. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT JAMBRICH HAS NO TITLE TO THE PROPERTIES IN QUESTION AND MAY NOT THEREFORE TRANSFER AND ASSIGN ANY RIGHTS AND INTERESTS IN FAVOR OF PETITIONER.

III. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE WELL-REASONED DECISION OF THE TRIAL COURT AND IN IMPOSING DOUBLE COSTS AGAINST HEREIN PETITIONER (THEN, PLAINTIFF-APPELLEE).14

First, who purchased the subject properties?

The evidence clearly shows, as pointed out by the trial court, who between respondent and Jambrich possesses the financial capacity to acquire the properties in dispute. At the time of the acquisition of the properties in 1985 to 1986, Jambrich was gainfully employed at Simmering-Graz Panker A.G., an Austrian company. He was earning an estimated monthly salary of P50,000.00. Then, Jambrich was assigned to Syria for almost one year where his monthly salary was approximately P90,000.00.

On the other hand, respondent was employed as a waitress from 1984 to 1985 with a monthly salary of not more than P1,000.00. In 1986, when the parcels of land were acquired, she was unemployed, as admitted by her during the pre-trial conference. Her allegations of income from a copra business were unsubstantiated. The supposed copra business was actually the business of her mother and their family, with ten siblings. She has no license to sell copra, and had not filed any income tax return. All the motorized bancas of her mother were lost to fire, and the last one left standing was already scrap. Further, the Child Study Report15 submitted by the Department of Social Welfare and Development (DSWD) in the adoption proceedings of respondent’s two sons by Jambrich disclosed that:

Antonietta tried all types of job to support the children until she was accepted as a waitress at St. Moritz Restaurant in 1984. At first she had no problem with money because most of the customers of St. Moritz are (sic) foreigners and they gave good tips but towards the end of 1984 there were no more foreigners coming because of the situation in the Philippines at that time. Her financial problem

started then. She was even renting a small room in a squatters area in Gorordo Ave., Cebu City. It was during her time of great financial distress that she met Wilhelm Jambrich who later offered her a decent place for herself and her children.16

The DSWD Home Study Report17 further disclosed that:

[Jambrich] was then at the Restaurant of St. Moritz when he saw Antonietta Descallar, one of the waitresses of the said Restaurants. He made friends with the girl and asked her to tutor him in [the] English language. Antonietta accepted the offer because she was in need of additional income to support [her] 2 young children who were abandoned by their father. Their session was agreed to be scheduled every afternoon at the residence of Antonietta in the squatters area in Gorordo Avenue, Cebu City. The Austrian was observing the situation of the family particularly the children who were malnourished. After a few months sessions, Mr. Jambrich offered to transfer the family into a decent place. He told Antonietta that the place is not good for the children. Antonietta who was miserable and financially distressed at that time accepted the offer for the sake of the children.18

Further, the following additional pieces of evidence point to Jambrich as the source of fund used to purchase the three parcels of land, and to construct the house thereon:

(1) Respondent Descallar herself affirmed under oath, during her re-direct examination and during the proceedings for the adoption of her minor children, that Jambrich was the owner of the properties in question, but that his name was deleted in the Deed of Absolute Sale because of legal constraints. Nonetheless, his signature remained in the deed of sale, where he signed as buyer.

(2) The money used to pay the subject parcels of land in installments was in postdated checks issued by Jambrich. Respondent has never opened any account with any bank. Receipts of the installment payments were also in the name of Jambrich and respondent.

(3) In 1986-1987, respondent lived in Syria with Jambrich and her two children for ten months, where she was completely under the support of Jambrich.

(4) Jambrich executed a Last Will and Testament, where he, as owner, bequeathed the subject properties to respondent.

Thus, Jambrich has all authority to transfer all his rights, interests and participation over the subject properties to petitioner by virtue of the Deed of Assignment he executed on July 11, 1991.

Well-settled is the rule that this Court is not a trier of facts. The findings of fact of the trial court are accorded great weight and respect, if not finality by this Court, subject to a number of exceptions. In the instant case, we find no reason to disturb the factual findings of the trial court. Even the appellate court did not controvert the factual findings of the trial court. They differed only in their conclusions of law.

Further, the fact that the disputed properties were acquired during the couple’s cohabitation also does not help respondent. The rule that co-ownership applies to a man and a woman living exclusively with each other as husband and wife without the benefit of marriage, but are otherwise capacitated to marry each other, does not apply.19 In the instant case, respondent was still legally married to another when she and Jambrich lived together. In such an adulterous relationship, no co-ownership exists between the parties. It is necessary for each of the partners to prove his or her

actual contribution to the acquisition of property in order to be able to lay claim to any portion of it. Presumptions of co-ownership and equal contribution do not apply.20

Second, we dispose of the issue of registration of the properties in the name of respondent alone. Having found that the true buyer of the disputed house and lots was the Austrian Wilhelm Jambrich, what now is the effect of registration of the properties in the name of respondent?

It is settled that registration is not a mode of acquiring ownership.21 It is only a means of confirming the fact of its existence with notice to the world at large.22 Certificates of title are not a source of right. The mere possession of a title does not make one the true owner of the property. Thus, the mere fact that respondent has the titles of the disputed properties in her name does not necessarily, conclusively and absolutely make her the owner. The rule on indefeasibility of title likewise does not apply to respondent. A certificate of title implies that the title is quiet,23and that it is perfect, absolute and indefeasible.24 However, there are well-defined exceptions to this rule, as when the transferee is not a holder in good faith and did not acquire the subject properties for a valuable consideration.25 This is the situation in the instant case. Respondent did not contribute a single centavo in the acquisition of the properties. She had no income of her own at that time, nor did she have any savings. She and her two sons were then fully supported by Jambrich.

Respondent argued that aliens are prohibited from acquiring private land. This is embodied in Section 7, Article XII of the 1987 Constitution,26 which is basically a reproduction of Section 5, Article XIII of the 1935 Constitution,27and Section 14, Article XIV of the 1973 Constitution.28 The capacity to acquire private land is dependent on the capacity "to acquire or hold lands of the public domain." Private land may be transferred only to individuals or entities "qualified to acquire or hold lands of the public domain." Only Filipino citizens or corporations at least 60% of the capital of which is owned by Filipinos are qualified to acquire or hold lands of the public domain. Thus, as the rule now stands, the fundamental law explicitly prohibits non-Filipinos from acquiring or holding title to private lands, except only by way of legal succession or if the acquisition was made by a former natural-born citizen.29

Therefore, in the instant case, the transfer of land from Agro-Macro Development Corporation to Jambrich, who is an Austrian, would have been declared invalid if challenged, had not Jambrich conveyed the properties to petitioner who is a Filipino citizen. In United Church Board for World Ministries v. Sebastian,30 the Court reiterated the consistent ruling in a number of cases31 that if land is invalidly transferred to an alien who subsequently becomes a Filipino citizen or transfers it to a Filipino, the flaw in the original transaction is considered cured and the title of the transferee is rendered valid. Applying United Church Board for World Ministries, the trial court ruled in favor of petitioner, viz.:

[W]hile the acquisition and the purchase of (sic) Wilhelm Jambrich of the properties under litigation [were] void ab initio since [they were] contrary to the Constitution of the Philippines, he being a foreigner, yet, the acquisition of these properties by plaintiff who is a Filipino citizen from him, has cured the flaw in the original transaction and the title of the transferee is valid.

The trial court upheld the sale by Jambrich in favor of petitioner and ordered the cancellation of the TCTs in the name of respondent. It declared petitioner as owner in fee simple of the residential house of strong materials and three parcels of land designated as Lot Nos. 1, 3 and 5, and ordered the Register of Deeds of Mandaue City to issue new certificates of title in his name. The trial court likewise ordered respondent to pay petitioner P25,000 as attorney’s fees and P10,000 as litigation expenses, as well as the costs of suit.

We affirm the Regional Trial Court.

The rationale behind the Court’s ruling in United Church Board for World Ministries, as reiterated in subsequent cases,32 is this – since the ban on aliens is intended to preserve the nation’s land for future generations of Filipinos, that aim is achieved by making lawful the acquisition of real estate by aliens who became Filipino citizens by naturalization or those transfers made by aliens to Filipino citizens. As the property in dispute is already in the hands of a qualified person, a Filipino citizen, there would be no more public policy to be protected. The objective of the constitutional provision to keep our lands in Filipino hands has been achieved.

IN VIEW WHEREOF, the petition is GRANTED. The Decision of the Court of Appeals in C.A. G.R. CV No. 42929 dated April 10, 2002 and its Resolution dated July 8, 2003 are REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Mandaue City in Civil Case No. MAN-1148 is REINSTATED.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-8539 December 24, 1914

MARIA DEL CONSUELO FELISA ROXAS Y CHUIDIAN, petitioner-appellee, vs.RAFAEL ENRIQUEZ, ET AL., objectors-appellants.

Southworth and Faison for appellants.

D. R. Williams for appellee.

 

JOHNSON, J.:

It appears from the record that on the 12th day of January, 1906, the said petitioner, Maria del Consuelo Felisa Roxas y Chuidian, presented a petition in the Court of Land Registration for the purpose of having registered, under the Torrens system, four parcels of land, known as Parcel A, Parcel B, Parcel C, and Parcel D, all of which were located in the city of Manila. The only one of said parcels to which attention need be given in the present appeal is Parcel A.

From an examination of said petition we find that parcel A was described generally and technically.

I. General description. — It is a parcel of land with the buildings erected thereon, located in the district of Binondo of this city between Nos. 84, 90, 92, 94, and 96 Calle Escolta and the northern bank of the Pasig River; bounded on the north by Calle Escolta for 31.08 meters, on the south by the Pasig River for 25.19 meters, on the east by the estate of Pedro P. Roxas for 66.48 meters, and on the west by the estate of the heirs of Antonio Enriquez for 62.10 meters; with an area of 1,817.03 square meters as set forth in the attached plan.

II. Technical description. — The undersigned on the 26th of the present month proceeded to survey and fix the boundaries for preparing the topographical plan of a lot occupied by buildings of strong materials one and two stories high belonging to Maria del Consuelo Roxas y Chuidian, located in the district of Binondo of this city between Nos. 84, 90, 92, 94, and 96 Calle Escolta and the northern bank of the Pasig River. The point marked on the plan with the letter "X," located at the vertex of the angle formed by the northeastern side of Calle Escolta and the corner of the Pasaje de Perez was selected as the basic point, whence S. 49º 40' W., 27.75 meters is located Point A, chosen as the point of beginning for the topographical operations, the result whereof is as follows: 1awphil.net

—————————————————————————————————— | Points or | Directions in | Distances | Boundaries || stations. | degrees. | in meters. | |——————————————————————————————————

| A to B | S. 44º 30' W | 31.08 | Calle Escolta. || B to C | S. 46º 15' E | 16.15 | Heirs of Antonio || C to D | S. 42º 00' E | 32.75 | } Enriquez. || D to E | S. 40º 50' E | 13.20 | || E to F | N. 49º 45' E | 14.25 | } Pasig River. || F to G | N. 52º 00' E | 10.94 | || G to H | N. 37º 10' W | 24.90 | || H to I | N. 35º 45' W | 6.56 | || I to J | N. 50º 30' E | 1.92 | } Pedro P. Roxas. || J to K | N. 35º 00' W | 7.60 | || K to A | N. 42º 05' W | 25.50 | |——————————————————————————————————

 

The lot described has an area of 1,817.03 square meters; all the points specified are marked on the attached plan, the bearings are magnetic, and its boundaries are: on the north, Calle Escolta; on the south, the Pasig River; on the east, the estate of Pedro P. Roxas; and on the west, the estate of the heirs of Antonio Enriquez.

The plan to which reference is made in the above technical description and which accompanied the petition is as follows and is marked "Exhibit A."

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By comparing the above technical description with the plan presented (Exhibit A), it will be noted that the line A-B in the technical description runs S. 44º, 30' W., and that the distance between A and B was 31.08 meters, while in the plan line A-B runs S. 46º, 30' W., a distance of 31.08 meters. Attention is called to this difference between the technical description and the plan at this time, but its importance to the questions presented will be discussed below.

Attached to said petition was a number of documents presented as exhibits, showing the chain of title of the petitioner.

We find that said petition contains a statement of the names of the adjoining owners of the land in question. The petition gives the names of said persons, as follows:

The names, surnames, and post-office addresses of the owners of the parcels of land conterminous with this estate are, according to my information:

The heirs of Antonio Enriquez, whose representatives are the attorneys Hartigan, Marple, Solignac & Gutierrez, 7 Anda, Intramuros, Manila, Pedro P. Roxas, 154 Malacañang, San Miguel.

Upon the presentation of said petition, the plan, and the documents showing the chain of title of the petitioner, the matter was referred to the examiner of titles of the Court of Land Registration, who made a very careful examination of the title of the petitioner to the land in question, and on the 5th day of March, 1906, presented a very carefully prepared report, in which he sets out in detail the title of the petitioner to said Parcel A, as well as the other parcels, the recommends the registration of said Parcel A, as well as the others, in the name of the petitioner.

Upon the issue thus presented we find that the Honorable Simplicio del Rosario, judge, on the 23d day of March, 1906, in accordance with the provisions of section 31 of Act No. 496, issued the following notice:

UNITED STATES OF AMERICA,PHILIPPINE ISLANDS. [Registration of title. Court of Land Registration.Case No. 1895.]

To the Attorney-General of the Philippine Islands; the Municipal Board of the city of Manila; A. Sing, Nos. 84-88; A. Burke, No. 90; Messrs. Macke and Chandler and F. M. Sousa, these two No. 90 interior; Ramon Genato, No. 142; Tomas Serreno, No. 92; Rosendo Comas, No. 94; Cheng Tao Sang, No. 96; Luciano Cordoba, No. 28; Messrs. Salgado, Gordillo and Martinez, No. 32; Messrs. Greilsammer Bros., No. 36; and Messrs. Williams & Chandler, No. 34, upstairs; these on Calle Escolta; Antonio Vy Chuico, No. 226, and Lim Tinco, No. 200, these two on Calle Rosario; Ang Seng Queng, Calle Nueva No. 149; and Candido Lim, Calle Jaboneros No. 113; all these of the district of Binondo; Messrs. Hartigan, Rohde & Gutierrez, attorneys of the heirs of Antonio Enriquez, Calle Santo Tomas, corner of Calle Cabildo, district of Intramuros; Carmen Ayala de Roxas, No. 154; and Maximo Cortes and Dolores Ochoa, these two No. 330, the three on Calle Malacañang, district of San Miguel; Francisco Saez, Plaza de Goiti No. 14, Alfonso Tiaoqui, Calle Lacoste No. 122, and Gervasio Rosario Ventura, Calle Dulumbayan No. 111, these three of the district of Santa Cruz; and Enrique Somes, Calle Alix No. 140, district of Sampaloc; all of the city of Manila, P. I., and to all whom it may concern:

Whereas an application has been presented to said court by Maria del Consuelo Felisa Roxas y Chuidian, through her attorney in fact Antonio Bonifas, Calle Padre Herrera No. 59, district of Tondo, city of Manila, P. I., to register and confirm her title in the following described land: Four parcels of land with the improvements of strong materials thereon, situated in the district of Binondo, Manila, P. I., more particularly bounded and described as follows:

Parcel A. — Situated on the Escolta Nos. 84-96, beginning at a pt. marked "A" on plan, being S. 49º 40' W., 27.75 m. from the W. end of the chaflan at the S. intersection of the Escolta and Pasaje de Perez; thence S. 46º 30' W., 31.08 m. along the SE. line of the Escolta, to pt. "B"; S. 46º 15' E., 16.15 m. to pt. "C"; S. 42º E., 32.75 m. to pt. "D"; S. 40º 50' E., 13.20 m. to pt. "E"; N. 49º 45' E., 14.25 m. to pt. "F"; N. 52º E., 10.94 m. to pt. "G"; N. 36º 20' W., 14.20 m. to pt. "H"; N. 38º 40' W., 17.16 m. to pt. "I"; N. 52º 35' E., 2.27 m. to pt. "J"; N. 38º 50' W., 4.12 m. to pt. "K"; N. 53º 30' E., 0.30 m. to pt. "L"; N. 40º 05' W., 14 m. to pt. "M"; N. 44º W., 15.35 m. to pt. "E" to "G" follow the NW. bank of the Pasig River.

Bounded on the NE. by property of Carmen Ayala de Roxas; SE. by the Pasig River; SW. by property of the heirs of Antonio Enriquez and NW. by the Escolta.

Date of survey, December 26, 1905.

You are hereby cited to appear at the Court of Land Registration to be held at the City Hall, Calzada de las Aguadas, city of Manila, P. I., on the 25th day of April, A. D. nineteen hundred and six, at 8 o'clock in the forenoon, to show cause, if any you have, why the prayer of said application shall not be granted; and unless you appear at such court at the time and place aforesaid your default will be recorded and the said application will be taken as

confessed, and you will be forever barred from contesting said application or any decree entered thereon.

Witness the Hon. S. del Rosario, judge of said court, this 23d day of March in the year nineteen hundred and six.

Attest: A. K. JONES, Clerk of said Court.

In accordance with said order of publication, the clerk of the Court of Land Registration, on the 28th day of March, 1906, sent a copy of said order to each of the persons mentioned therein, by registered mail. The record shows that each of said persons received a copy of said notice, including the representative of the heirs of Antonio Enriquez (Hartigan, Rohde & Gutierrez). The record further shows, by the certificate of James J. Peterson, sheriff of the city of Manila, that said notice was posted upon the land in question. The record further shows that said notice had been published in two daily newspapers of the city of Manila. The Manila Times and La Democracia.

On the 17th day of April, 1906, A. K. Jones, clerk of the Court of Land Registration, made the following certificate relating to the notice and to the publication of the notices required by section 31 of Act No. 496.

UNITED STATES OF AMERICA, PHILIPPINE ISLANDS. COURT OF LAND REGISTRATION.

Case No. 1895.

Maria del Consuelo Felisa Roxas y Chuidian, Applicant.

I, A. K. Jones, clerk of the Court of Land Registration of the Philippine Islands, certify that, in compliance with the order issued by said court, a notice referring to the application for registry No. 1895, presented by Antonio Bonifas, as representative of Maria del Consuelo Felisa Roxas y Chuidian, was published once only in the daily newspapers of this city, The Manila Times on March 28, 1906, and La Democracia on the 31st of the same month and year, in English and Spanish respectively, and notice was served upon the Attorney-General of the Philippine Islands; the Municipal Board of the city of Manila; A. Sing; A. Burke; Macke & Chandler; F. M. Sousa; Ramon Genato; Tomas Serrano; Rosendo Comas; Cheng Tao Sang; Luciano Cordoba; Salgado, Gordillo & Martinez; Greilsammer Hermanos; Williams & Chandler; Antonio Vy Chuico; Lim Tinco; Ang Seng Queng; Candido Lim; Hartigan, Rohde & Gutierrez; Carmen Ayala de Roxas; Maximo Cortes and Dolores Ochoa, Francisco Saez; Alfonso Tiaoqui; Gervasia Rosario Ventura; and Enrique Somes, a copy of said notice in Spanish having been sent to each one on March 28, 1906, by registered mail. And for the purposes of the necessary procedure, I issue the present in Manila on the 17th day of April, 1906.

A. K. JONES, Clerk of the Court.

On the 19th day of April, 1906, the record shows that Modesto Reyes, attorney for the city of Manila (p. 131, record) presented a written statement to the court calling its attention to the fact that there existed an "error of closure" in the plan of said Parcel A, and asked the court to correct the error.

The said attorney also called the attention of the other plans of the other parcels of land, included in the original petition. Our attention has not been called to any order made by the lower court, relating to said request of the attorney of the city of Manila.

In accordance with said notice to all of the interested parties, the hearing on the said petition was brought on for trial on the 25th day of April, 1906, at 9 o'clock a. m., at the place mentioned in said notice. At the hearing the petitioner was represented. No one appeared to represent the "heirs of Antonio Enriquez."

On said date (April 25, 1906, at 9 o'clock a. m.) the cause relating to said Parcel A was brought on for trial. Mr. Antonio Bonifas appeared for the petitioner and My. Modesto Reyes, attorney for the city of Manila, appeared for the city of Manila. Mr. Reyes called the attention of the court again to the fact that there existed certain errors in the measurement of some of the sides of the plan presented by the petitioner. In view of said fact (the existence of errors) the court ordered that said errors be corrected. So far as the record shows no correction whatever was made in the plan of said Parcel A.

On the 21st day of July, 1906, the cause having been brought on for hearing, the honorable Simplicio del Rosario, judge, distated the following order or judgment in default against all persons:

UNITED STATES OF AMERICA, PHILIPPINE ISLANDS. COURT OF LAND REGISTRATION.

No. 1895.

Application of Maria del Consuelo Felisa Roxas y Chuidian for registration of the real estate described herein,

vs.

The Attorney-General of the Philippine Islands; the Municipal Board of the city of Manila; A. Sing; A. Burke: Macke & Chandler; F. M. Sousa; Ramon Geneto; Tomas Serrano; Rosendo Comas; Cheng Tao Sang; Luciano Cordoba; Salgado, Gordillo & Martinez; Greilsammer Hermanos; Williams & Chandler; Antonio Vy Chuico; Lim Tinco; And Seng Queng; Candido Lim; Hartigan, Rohde & Gutierrez; Carmen Ayala de Roxas; Maximo Cortes and Dolores Ochoa; Francisco Saez; Alfonso Tiaoqui; Gervasia Rosario Ventura; and Enrique Somes; and whomsoever it may concern, defendants.

The present case having been duly tried, and

Whereas, the clerk of this court caused to be published once only a notice in due from referring to the application mentioned, in two newspapers of general circulation, one printed in the English language and another in the Spanish language, to wit, The Manila Times of this city, and La Democracia of the same city; and 119 days have elapsed since publication of said notice was effected;

Whereas, said clerk caused to be sent by registered mail, within seven days after the publication of the said notice, a copy thereof in the Spanish language to each one of the persons named in the application or who appeared to be concerned therein;

Whereas, the sheriff of Manila posted in a conspicuous place on each of the parcels of land included in the application a certified copy of the notice in Spanish, and also in a conspicuous place in the principal municipal building of the city of Manila, before the fourteen days preceding that set for the termination of the period fixed;

Whereas, all of the persons cited as defendants have failed to appear to impugn the application, within the period fixed by the law;

This court orders a declaration of default against all the defendants and other persons who may be concerned in opposing the application, which is granted.

Given by the Honorable S. del Rosario, judge of the said Court of Land Registration, in Manila, this 21st day of July, 1906.

Attest: A. K. JONES, Clerk of the Court.

Later the Honorable Simplicio del Rosario dictated the following order, decreeing that said parcel of land, A, be registered as the absolute property of Maria del Consuelo Felisa Roxas Y Chuidian. Said decree was as follows:

Having tried case No. 1895, this court decrees that Maria del Consuelo Felisa Roxas y Chuidian, of Manila, Philippine Islands, applicant, spinster, is the absolute owner of the real property, which is adjudicated to her, located in the city of Manila, the description whereof is hereinafter set forth:

A parcel of land, situated at Nos. 84 to 96 Calle Escolta, district of Binondo; bounded on the NE. by the property of Carmen Ayala de Roxas; on the SE. by the Pasig River; on the SW. by the property of the heirs of Antonio Enriquez; and on the NW. by Calle Escolta.

Beginning at a point marked A on the plan, which point is 27.75 m. S., 49º 40' W. from the extreme W. of the angle situated at the intersection S. of Calle Escolta and Passage de Perez; and from said point A., S., 46º 30' W., 31.08 m. to point B; thence S., 46º 15' E., 16.15 m. to point C; thence S., 42º E., 32.75 m. to point D; thence S., 40º 50' E., 13.20 m. to point E.; thence N., 49º 45' E., 14.25 m. to point F; thence N., 52º E., 10.94 m. to point G; thence N., 36º 20' W., 14.20 m. to point H; thence N., 38º 40' W., 17.16 m. to point I; thence N., 52º 35' E., 2.27 m. to point J; thence N., 38º 50' W., 4.12 m. to point K; thence N., 53º 30' E., 0.30 m. to point L; thence N., 40º 05' W., 14 m. to point M; thence N., 44º W., 15.35 m. to point of beginning; having an area of 1,817.03 square meters.

All the points named are marked on the plan; the bearings are magnetic; date of survey, December 26, 1905.

Wherefore this court orders that the said real property be registered in accordance with the provisions of the Land Registration Act in the name of the aforesaid Maria del Consuelo Felisa Roxas y Chuidian, subject however to any of the encumbrances set forth in section 39 of said Act that may be in force and effect.

Given by the Honorable S. del Rosario, judge of the said Court of Land Registration, in Manila, this twenty-first day of July, nineteen hundred and six, at eight o'clock and ten minutes ante meridian.

Attest:[SEAL.] (Sgd.) A. K. Jones, Clerk of the Court.

A copy of this decree was sent to the register of deeds of Manila, September 25, 1906.

On the 21st day of July, 1906, the court issued the certificate of title known as No. 742, and delivered to the petitioner the owner's duplicate, and the property became registered under the Torrens system, in the name of the petitioner.

After the registration of said Parcel A in the name of the petitioner, on the 21st day of July, 1906, nothing further seems to have been done in the Court of Land Registration until on or about the 19th day of December, 1911, nearly five years and a half after said land had been registered, when we find that the assistant attorney of the city of Manila filed the following petition:

UNITED STATES OF AMERICA, PHILIPPINE ISLANDS. COURT OF LAND REGISTRATION.

Case No. 1895.

Roxas y Cuyugan, applicant.

MOTION.

The city of Manila, through its undersigned attorney, comes now into the court and respectfully represents;

I. That the plan of the property with which the present case deals is affected by an error of closure greater than 1/1500;

II. That the city of Manila is interested in the correction of said error as it has to expropriate a portion of said land for use as a public street;

Therefore, the petitioner prays the court to order a new survey of said property described in the plan filed in this case.

Manila, P. I., December 18, 1911.

It is not clear whether said petition refers to the incorrections in the plan of Parcel A or to the incorrections in the plans of the other parcels of land (B, C, and D), which were included in the petition of the petitioner.

On the 23d date of December, 1911, the honorable Charles H. Smith, judge of the Court of Land Registration, referred the petition of the city of Manila to the chief surveyor of the court. On the 27th day of December, 1911, the said surveyor reported to the court that there existed "errors of closure in said plans."

On the 5th day of January, 1912, the judge of the Court of Land Registration ordered the chief surveyor to prepare new plans, in accordance with section 4 of Act No. 1875, and directed that notice be given to the adjoining owners.

On the 28th day of February, 1912, the original petitioner, Maria del Consuelo Felisa Roxas y Chuidian, presented a petition for the correction of the certificate issued to her on the 21st day of July, 1906, so as to include the buildings upon the lands included in her petition. Said petition was as follows:

UNITED STATES OF AMERICA, PHILIPPINE ISLANDS. COURT OF LAND REGISTRATION:

Case No. 1895.

Maria del Consuelo Felisa Roxas y Chuidian, applicant.

Comes now the applicant into the Honorable Court of Land Registration and represents:

1. That on January 10, 1906, Don Antonio Bonifas, in the name and representation of the applicant, sought the legalization of property title to four estates, among them the following:

(a) A parcel of land with the buildings erected thereon, located at Nos. 84 to 96 Calle Escolta, district of Binondo.

(b) Another parcel of land with the buildings erected thereon located at Nos. 28 to 36 Calle Escolta, district of Binondo.

(c) Another parcel of land with the buildings erected thereon, located at No. 149 Calle Nueva, corner of Callejon Carvajal, district of Binondo.

2. That the other estate mentioned in the said application refers to a parcel of land, with the buildings erected thereon, located at Nos. 222 to 230 Calle Rosario, district of Binondo, which buildings were totally destroyed by the fire that occurred on the 2d of November of the year just past, and it cannot therefore be included in the purpose of the present application.

3. That in the said application it is stated that the land of the estate designated by the letter (a) was assessed at 65,072 dollars and 50 cents United States currency, and the buildings at 18,500 dollars United States currency; that the land of the estate designated by the letter (b) was assessed at 55,020 dollars and 50 cents, United States currency, and the buildings at 15,000 dollars, United States currency; and the land of the estate designated by the letter (c) was assessed at 5,658 dollars Unites States currency, and the buildings at 5,000 dollars United States currency.

4. That both in the property titles to the said estates and in the plans and technical descriptions thereof which accompany said application and are annexed to the above-entitled case, it appears that on the parcels of land which form part of the estates under consideration there are erected buildings, consisting of two houses of strong materials, one behind the other, in the estate designated by the letter (a); a house of stone and masonry in that designated by the letter (b); and another house of stone and masonry in that designated by the letter (c).

5. That in the record of the register of deeds, in the registration entries referring to the said estates, it appears that they consist of the parcels of land and the buildings stated.

6. That in the notice to the Attorney-General, the Municipal Board, the tenants, and owners conterminous with the estates referred to therein, the buildings erected on them are likewise mentioned.

7. That by decree of June 21, 1906, adjudication and registration of the estates were ordered in applicant's favor in the terms set forth in the application; but in the certificate of the decree or resolution under consideration, issued by the clerk of the court, the description of the parcel of land corresponding to each estate was given, but the respective building on each was omitted, and in this form were issued the certificates of title, Nos. 472, 764, and 743, which accompany this application.

8. That on January 12, September 21, October 9 and 22, 1906, the legal representative of the applicant guaranteed by deposit, as assurance fund, the rights of issuance of title and one-tenth of 1 per cent of the assessed valuation, the sum of P943.70 Philippine currency, the receipts and vouchers wherefore do not accompany this application because the applicant destroyed them in the belief that there was no need to exhibit them, but averring that the amounts paid for those purposes are credited in the accounting division of the Court of Land Registration and the office of the register of deeds, as has been ascertained by a person delegated therefor by the applicant.

9. That when applicant attempted to alienate one of the estates mentioned she observed the omission in the corresponding certificate of title of the building existing thereon, the same as in the certificates of title corresponding to the other two estates; and as it is to be supposed that said omission is due solely to a simple clerical error, which nevertheless greatly affects the applicant's right, she appeals to your honorable court with the request that you order the correction of said omission, especially as there at present exist on the said parcels of land, without modification or alteration, the same buildings that existed when legalization of title thereto was applied for and which appear in the titles of acquisition annexed to the above-entitled case, reference whereto has been made in the third paragraph.

10. That for greater assurance and for the purpose of proving that the said estates consist not only in the parcel of land or lot but also in the building erected on each, the applicant attaches hereto the assessment or property-tax receipts for each of the said estates, wherein are stated the two points mentioned.

11. That in view of what has been set forth and explained, the applicant prays the honorable court to decree, after the necessary legal proceedings, correction of the omission referred to by ordering the free issuance of a new certificate of title to each of the said estates, wherein record be made of the building erected on each, consisting of those enumerated in the third paragraph of this application.

Manila, February 28, 1912.

MARIA DEL CONSUELO FELISA ROXAS Y CHUIDIAN.

On the 9th of April, 1912, the Masonic Temple Association of Manila sent a communication to Honorable Charles H. Smith, judge of the Court of Land Registration, accompanied by a contract, showing that on the 20th day of March, 1912, Maria del Consuelo Felisa Roxas y Chuidian had sold all her rights, title, and interest in said Parcel A, including the buildings thereon, to the said Masonic Temple Association of Manila. Said Masonic Temple Association of Manila requested the judge of the Land Court to attach said contract to the record in the case and issue a new certificate to it.

On the 19th day of April, 1912, a new plan of said Parcel A, prepared by Mr. B. W. Hay, surveyor of the Bureau of Lands, was presented, in accordance with the order of the court of the 23d of December, 1911. Said new plan was made for the purpose of correcting the errors in closure in the original plan presented by the petitioner on the 10th day of January, 1906. Said new plan is as follows (see page 48):

After the presentation of said new or corrected plan, the motions:

(a) That of the city of Manila to have corrected the error of closure in the original plan;

(b) That of Maria del Consuelo Felisa Roxas y Chuidian, to have included in her certificate of title the buildings located upon the lands registered in accordance with her original petition; and

(c) That of the Masonic Temple Association of Manila, to have a certificate issued to it in accordance with its contract of purchase of said lands from Maria del Consuelo

 

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Felisa Roxas y Chuidian — after notice had been given to all the interested parties, were set down for hearing. For one reason or another, the hearings on said motion were transferred from one date to another from the 22d of April, 1912, until the 24th of August, 1912. During said various hearings, in addition to the appointment of a commission to view the premises, certain proof was taken upon the question of the correctness of the original plan presented by the petitioner, in January, 1906. During said hearings the heirs of Don Antonio Enriquez appeared and apparently made some objection to the granting of said motions. They presented no written statement in which their specific objections appear. The nearest approach to a definite and specific statement of their objections appears in the argument of their counsel at the close of said several hearings, in which it appears that their objections to the correction of the original plan and certificate and the issuance of a new certificate to the Masonic Temple Association of Manila was based upon the ground that they claimed easements or servitudes in the land in the question.

After hearing all of the parties, the Honorable Charles H. Smith, judge of the Court of Land Registration, and his associates, the Honorable James A. Ostrand and the Honorable Norberto Romualdez, auxiliary judges of said court, sitting in banc, on the 24th day of August, 1912, by a unanimous decision, granted the motions of the city of Manila, of Maria del Consuelo Felisa Roxas y Chuidian, and of the Masonic Temple Association of Manila.

On the 10th day of September, 1912, the attorneys for the objectors presented a motion for new trial, basing it upon the ground that the conclusions of the lower court were manifestly contrary to the proof. After a due consideration of said motion for a new trial and after hearing the respective parties, the Court of Land Registration, sitting in banc, composed of Charles H. Smith, James A. Ostrand, and Norberto Romualdez, denied said motion, and the case was appealed to this court. In this court the respondents presented the following assignments of error:

1. That the court below erred in holding that the proceedings of the Court of Land Registration were valid in entering judgment in favor of the plaintiff and appellee, confirming the title to lot 4, which is in controversy in this suit.

2. That the judgment of the lower court is contrary to law.

3. That the judgment of the court below is against the manifest weight of the evidence.

After a careful examination of the argument of the appellants in support of each of said assignments of error, we are of the opinion that they may be discussed together.

In the argument of the appellants in support of their assignments of error, there is but little argument against the decision of the court rendered on the 24th of August, 1912. Practically the whole argument of the appellants is based upon the ground that the original certificate (No. 742, issued July 21, 1906) is absolutely void, for the reason that "the appellants had no notice of the pendency of the original action to confirm the title of said property." Appellants now admit that a notice of the pendency of the original action was sent to attorneys Hartigan, Rohde & (Marple?) Gutierrez. Appellants now allege that it affirmatively appears that neither this firm nor any of its members represented the defendants and appellants in that action. The record shows, as we have pointed out above, that the original petition showed that Hartigan, Rohde & Gutierrez were the representatives of the heirs of Don Antonio Enriquez, and that notice was duly sent to them. We have searched the record now in vain to find the slightest denial of the fact that they were the representatives of said heirs, even though one of said attorneys represented them, or at least some of them, in the present proceedings. So far as the record shows there is not even a suggestion found in the various hearings and proceedings taken and had under the above motions, that said attorneys were not the representation of the heirs of Don Antonio Enriquez at the time of the original proceedings. Neither does the record show any attempt on their part to deny the fact that they received the notices given in the original action. The appellants assert in their argument that "personal notice was absolutely necessary in order to justify the court below in rendering a decree in favor of the plaintiff and appellee, in the first instance" (the original proceeding). The appellants, by that argument, attempt to show, not that the judgment of the 24th of August, 1912, was invalid, but that the original certificate (No. 742) was void, because they had not been served with personal notice. This brings us to the question whether or not personal notice to all of the persons interested in an action for the registration of real property under the Torrens system, is an absolute prerequisite to the validity of said registration. It will be remembered that we noted above that personal notice of the pendency of the original petition had been given and that a publication of the same had been made in accordance with the provisions of sections 31 and 32 of Act No. 496. After the expiration of the period during which notice must be given, the original cause was set down for hearing. The record also shows that the clerk of the Land Court made a certificate showing that that notice had been issued and published in accordance with the law. Section 32 provides, in part, that said "certificate of the clerk that he had served the notice as directed by the court, by publishing or mailing, shall be filed in the case before the return day, and shall be conclusive proof of such service."

On the day set for the hearing of said original petition, no one appeared to oppose the granting of the prayer which it contained. Section 35 of Act No. 496 provides: "If no person appears and answer within the time allowed, the court may at once, upon motion of the applicant, no reason to the contrary appearing, order a general default to be recorded and the application ( petition) be taken for confessed. By the description in the notice. "To all whom it may concern," all the world are made parties defendant and shall be concluded by the default and order. The court shall not be bound by the report of the examiner of titles, but may require other and further proof."

The provisions of section 35 seem to be directly contrary to the contention of the appellants. It seems to directly contradict the requirements of personal notice as an absolute prerequisite to the granting of a valid title under the Torrens system.

The same idea is further confirmed by the provisions of section 38 of said Act No. 496. Said section 38 provides that: "Every decree of registration shall bind the land and quite the 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 citations, or included in the general description 'To all whom it may concern.'"

There is a further and very strong intimation in the law that personal notice is not absolutely a prerequisite to the validity of title under the Torrens system. Section 32 (Act No. 496) provides that: "The court shall, so far as it deems it possible, require proof of actual notice to all the adjoining owners and to all persons who appear to have an interest in or claim to the land included in the application." It will be noted also that the petitioner in registration cases is not by law required to give any notice to any person. The law requires the clerk of the court to give the notices. (Sections 31 and 32 of Act No. 496.) It is true that "the court may also cause other or further notice of the application to be given in such a manner and to such persons as it may deem proper." Thus it is seen that the applicant is by express provision of law relieved from any obligation whatsoever to give motive to any person of the pendency of his application to have his land registered under the Torrens system. That being true, upon what theory may the applicant be subjected to harassment or delay or additional expense, because some person claims that he did not receive actual personal notice? Section 101 and 102 (Act No. 496) seem to contain a remedy for persons who have suffered damages for the failure on the part of court officials to comply with the law. (Noble State Bank vs. Haskell, 219 U. S., 104.) His remedy is not to have the registration and certificate annulled, unless he comes within the provisions of section 38, and even then he is without a remedy against the applicant unless he can show, within a period of one year after the decree of registration and the granting of the certificate, at he has been "deprived of land or any estate or interest therein," by fraud, and not even then, if an "innocent purchaser for the value has acquired and interest." In the present case five years and a half had transpired and negotiations for the sale of the land to an innocent purchaser had been terminated. There is not intimation that the petitioner is guilty of fraud, in the slightes degree.

While the Torrens Land Law is a law of modern times, is has been adopted in many States and its provisions have been attacked at almost every point. The requirements relating to notices has been a fruitful source of litigation. The constitutionality of the law has been attacked many times, because of the provision of said law relating to notices. This is not the first time that the question has been presented to this court. The same question was presented to this court in the case of Grey Alba vs. De la Cruz (17 Phil. Rep., 49). In that case the registered title was attacked upon the ground that fraud existed, simply because personal notice had not been given. The existence of fraud was predicated upon the failure of actual personal notice. In passing upon that question, this court, speaking through Mr. Justice Trent, said (quoting from the syllabus):

In original proceedings for the registration of land under Act No. 496, the appellee herein was made a party- defendant by publication, but was not personally served with notice: Held, That the decree of the Court of Land Registration is conclusive against his as well as all the world.

The proceedings for the registration of land, under Act No. 496, are in rem and not in personam. A proceeding in rem, dealing with a tangible res, may be instituted and carried to judgment without personal service upon the claimants within the state or notice by name to those outside of it. Jurisdiction is secured by the power of the court over the res. Such a proceeding would be impossible were this not so, for it would hardly 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, 175 Mass., 71.)

In the present case there is not the slightest intimation that the original applicant (Maria del Consuelo Felisa Roxas y Chuidan) was guilty of fraud. The record shows that she named all the persons who might have an interest in the registration of her land, in her petition. The applicant is not charged even with negligence. The record shows that she did all the law required her to do.

In discussing the Torrens Land Law we must keep in mind that its primary purpose is the registration of the title which the applicant or petitioner has and to relieve his land of unknown liens or claims, just or unjust, against it. The Torrens system of land registration is a system for the registration of title to land only, and not a system established for the acquisition of land. It is not intended that lands may be acquired by said system of registration. It is intended only that the title, which the petitioner has, shall be registered and thereby cleared of all liens and burdens of whatsoever character, except those which shall be noted in the order of registration and in the certificate issued.

If there exists known and just claims against the title of the applicant, he gains nothing in effect by his registration, except in the simplicity of subsequent transfer of his title. The registration either relieves the land of all known as well as unknown claims, absolutely, or it compels the claimants to come into court and to make there a record, so that thereafter there may be no uncertainly concerning either the character or the extent of such claims.

The requirement that personal notice shall be a prerequisite to the validity of registration would absolutely prohibit the foreclosure of unknown claims, for the reason that personal notice could never be given to "unknown claimants." The great difficulty in land titles arises from the existence of possible unknown claimants. Known claimants can be dealt with. They furnish no valid impediment, in fact, to the transfer of titles.

Courts have held that in actions in rem personal notice to owners of a res is not necessary to give the courts jurisdiction to deal with and to dispose of the res. (Grey Alba vs. De la Cruz, 17 Phil. Rep., 49; Tyler vs. Judges, 175 Mass., 71; American Land Company vs. Zeis, 219 U.S., 47.) This rule was first established in admiralty proceedings. It was established out of the very necessities of the case. The owner of a ship, for instance, lived in London. His ship was found in the most distant ports of the earth. Its operation necessarily required supplies, such as men, coal, and food. The very nature of its business necessitated the making of contracts. The continuance of its voyage depended upon its capacity to make contracts and to get credit. It might also, perchance, cause damage to other craft, in like conditions. To be able to secure all such necessities, to satisfy all possible obligations, to continue its voyage and its business on the high seas, merchants and courts came to regard the "ship" as a person, with whom or with which they were dealing, and not its real owner. Consequently there came into existence this action in rem. For the purpose of carrying into effect the broader purposes of the Torrens land law, it has been universally considered that the action should be considered as one in rem. Mr. Justice Holmes, then of the Supreme Court of the State of Massachusetts, and now a member of the Supreme Court of the United State, in the case of Tyler vs. Judges (175 Mass., 71), in discussing this question, said:

Looked at either from the point of view of history or of the necessary requirements of justice, a proceedingin 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 (of the State of Massachusetts or the United States). 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 dot 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. (Pennoyer vs. Neff, 95 U.S., 714, 727; The Mary, 9 Cranch 126, 144.)

There are many classes of cases where men may be deprived of their property and of their rights, without personal notice of the proceedings in which that may occur. For instance, in attachment cases, notice or service upon the defendant may be had by publication. (Pennoyer vs. Neff, 95 U.S., 714, 727.) So also in divorce proceedings, as well as the rights of claimants against estates of deceased persons, personal notice is not a prerequisite. Notice by publication may be had. Also unknown claimants or owners may be brought into court without personal notice in an action for the condemnation of private property for public use. There exists a multitude of cases in which personal service is not necessary and service by publication is sufficient.

The law, even before the Torrens Law, provided means by which title to land might be quited "by notice by publication to all persons." (Hamilton vs. Brown, 101 U.S., 256, 274; Huling vs. Kaw Valley, etc., Co., 130 U.S., 559, 564; Parker vs. Overman, 18 Howard (N.Y.) 137; American Land Company vs. Zeiss, 219 U.S., 47; Arndt vs.Griggs, 134 U.S., 316; Perkins vs. Wakeman, 86 Cal., 580.)

Even before the Torrens Law was adopted, the states had the power and right to provide a procedure for the adjudication of title to real estate. The state had control over real property within its limits. The conditions of ownership of real estate in a state, whether the owner be a stranger or a citizen, are subject to its rules, concerning the holding, transfer, liability to obligations, private or public, and the models of establishing title thereto; and for the purpose of determining these question, it (the state) may provide any reasonable rules or procedure. (Clark vs. Smith, 13 Peters, 195; Barker vs. Harvey, 181 U.S., 481; Mitchell vs. Furman, 180 U.S., 402; Botiller vs. Domingues, 130 U.S., 238; Moore vs. Steinbach, 127 U.S., 70; Arndt vs. Griggs, 134 U.S., 316; American Land Company vs. Zeiss, 219 U.S., 47.)

The state possesses not only the power to determine how title to real estate may be acquired and proved, but it is also within its legislative competency to establish the method of procedure. (American Land Co. vs. Zeiss, 219 U.S., 47; Bertrand vs. Taylor, 87 Ill., 235; Title, Document, etc., Company vs. Kerrigan, 150 Cal., 208, 305; Perkinsvs. Wakeham, 86 Cal., 580.)

The estate, as sovereign over the lands situated within it, may provide for the adjudication of title in a proceedingin rem, or in the nature of a proceeding in rem, which shall be binding upon all persons known and unknown. (State vs. McGlynn, 20 Cal., 233; 81 Am. Dec., 118; Perkins vs. Wakeham, 86 Cal., 580; 21 Am.t. Rep., 67; McLaughlin vs. McCrory, 55 Ark., 442; 29 Am. St. Rep., 56; People's National Bank vs. Cleveland, 117 Ga., 908; People vs. Simon, 176 Ill., 165; 68 Am. St. Rep., 175; Quarl vs. Abbett, 102 Ind., 233; 52 Am. Rep., 662; Ruppin vs.McLaughlin, 122 Iowa, 343; Young vs. Upshur, 42 La. An., 362; 21 Am. St. Rep., 381; Tyler vs. Judges, 175 Mass., 71; 51 L.R.A., 571; 57 L.R.A., 297; Rohrer vs. Ader, 124 Mo., 24; Sandiford vs. Town of Hempstead, 90 N.Y. Supp., 76, 79, 97; Arndt vs. Griggs, 134 U.S., 316.)

If the state can provide for substituted service for the purpose of quieting title to real estate against an unknown resident, it may provide a reasonable method for securing substituted services against residents. The power of the state to provide methods of quieting title should not be limited to known persons. In order to make such a law valuable and effective to its fullest extent, it is necessary that it be made to operate on all interest and persons known or unknown.

Mr. Justice Holmes, in the case of Tyler vs. Judges (175 Mass., 71) in discussing this question, said: "If it (the procedure) does not satisfy the Constitution, a judicial proceeding to clear titles against all the world hardly is possible, for the very meaning of such a proceeding is to get rid of unknown as well as known claims — indeed certainly against the unknown may be said to be its chief end — and unknown claims cannot be dealt with by personal service upon the claimant."

Mr. Chief Justice White of the Supreme Court of the United States, in the case of the American Land Company vs.Zeiss (219 U. S., 47) said: "To argue that the provisions of the statute are repugnant to the due process clause (of the Constitution) because a case may be conceived where rights in and to property would be adversely affected without notice being actually conveyed by the proceedings is in effect to deny the power of the state to deal with the subject. The criterion is not the possibility of conceivable injury, but the just and reasonable character of the requirements, having reference to the subject with which the statute deals."

The court of appeals of the State of New York, in the case of In re Empire City Bank (18 N.Y., 199, 215) in speaking of the right of the state to prescribe in suitable cases for substituted service, said: "Various prudential regulations are made with respect to these remedies by it may possibly happen, notwithstanding all these precautions, that a citizen who owes nothing, and has done none of the acts mentioned in the statutes, may be deprived of his estate without any actual knowledge of the process by which it has been taken from him. If we hold, as we must, in order to sustain this legislation, that the Constitution does not positively require personal notice in order to constitute a legal proceedings due process of law, it then belongs to the legislature to determine in the particular instance whether the case calls for this kind of exceptional legislation, and what manner of constructive notice shall be sufficient to reasonably apprise the party proceeded against of the Legal steps which are taken against him. (American Land Company vs. Zeiss, 219 U.S., 47; Title, Document, etc., Company vs. Kerrigan, 150 Cal., 289.)"

The only case cited by the appellants in support of their argument, is the case of the American Land Company vs.Zeiss (219 U.S., 47). In view of the facts and the decisions of the different courts which are cited in that case, it is difficult to understand how it is authority in support of the contention of the appellants here. The facts in that case are as follows:

Zeiss, on the 22d of August, 1906, commenced an action in the superior court of the country San Francisco, alleging in substance that on the 18th and 19th days of April, 1906, a material part of the public records contained in the office of the county recorder of the city and county of San Francisco was destroyed by fire; that on the 18th day of April, 1906, and at the time of the filing of the complaint, he was the owner and in the actual and peaceable possession of the parcels of land in controversy: that his estate, title, interest in and to said parcels of land, and each of them, was that of owner in fee simple, absolute, free from all encumbrances, liens, defect, claims or demands of any kind or nature whatsoever. Under these facts the plaintiff, Zeiss, prayed that the be adjudged to be the owner of and entitled to the possession of said parcels of land, and each of them, was that of owner in fee simple, absolute, free from all encumbrance, liens, defects, claims or demands of any kind or nature whatsoever. Under these facts the plaintiff, Zeiss, prated that he be adjudged to be the owner of and entitled to the possession of said described parcels of land in fee simple, and that no one else had any estate, rights, title, interest or claim in or to the same, or any part thereof, either legal or equitable, present or future, vested or contingent.

Upon the presentation of the petition by Zeisss, a summons was issued and notice of the pendency of the action was published in certain newspaper, as was required by law. Notice was also posted upon the property, as required by the statute. No one having appeared and opposed the granting of the petition of the complaint, or claimed any interest in or lien upon the property described in the complaint, a default was ordered against all persons, and on the 19th days of December, 1906, a decree was entered in favor of Zeiss, adjudging that he was the owner in fee simple, absolute, and entitled to the possession of the land described in the complaint and that no other person had any right title, interest, or estate in and to the same, or any part thereof, either legal or equitable, present or future, vested or contingent.

Nothing else seems to have transpired after said decree was issued in favor of Zeiss, until the 26th day of May, 1908, or one year and five months after the entry of the decree of the superior court, in the city and county of San Francisco. On that date (the 26th of May, 1908) an action was brought in the United States Circuit Court for the Northern District of California, in which the plaintiffs claimed title to the parcels of land, as owners in fee simple, absolute, which had theretofore been decreed to Zeiss. The plaintiff alleged that the decree issued by the superior court of the city and county of San Francisco was void and of no force and effect and was made and maintained without due process of law, and that said superior court, in said action and proceedings never had any jurisdiction over the persons holding the title during such proceedings, and that said court did not have or obtain jurisdiction to divest the right, title, interest or estate of plaintiff . The complaint alleged that "Zeiss had no right whatever in said parcels of land, other than his rights of possession and occupation." The bill further alleged that the plaintiffs had been at all times citizens and residents of California, not seeking to evade, but ready to accept service of summons and easily reached for that purpose; that, notwithstanding that fact, no service was made upon them nor did they in any way receive notice of the pendency of the action (Zeiss vs. All persons claiming any interest in or lien upon the real property herein described); nor did they gain any knowledge of existence of the decree until more than a year after its entry. To the complaint the defendant, Zeiss, demurred.

Upon the issue thus presented, the Circuit Court of Appeals for the Ninth District certified the question involved to the Supreme Court of the United States. The Supreme Court of the United States, after a careful analysis of the facts and of the law, in a very lengthy and instructive opinion (219 U. S., 47), decided each of the question submitted by the Circuit Court of Appeals against the contention of the plaintiff and returned the cause to the court below.

The original action by Zeiss was brought to quiet the title to two parcels of land for the purpose of registrating his title to the same under an act of the legislature of the State of California, entitled "An act to provide for the establishment and quieting of title to real property in case of loss or destruction of public records." Said law is known as the McEnerney Law. It was intended by said act to provide a method whereby owners in possession of real estate, where records had been destroyed to such an extent as to make it impossible to trace a record title, might secure a degree in the court which would furnish public, authenticated evidence of title. The special occasion for the law was the fact that practically all of the public records of title in several counties in the State of California had recently theretofore been destroyed as the result of an earthquake and fire. Said law provided that whenever the public records in the office of the county recorded had been, or shall hereafter be lost or destroyed, in whole or in any material part, by flood, fire, or earthquake, any person who claims an estate of inheritance or have title in, and who had by himself or his tenants, or other persons holding under him, in actual and peaceable possession any real property in said county, may bring and maintain an action in rem, against all the world, in the superior court for the county in which said real property is situate, to establish his title, and to determine all adverse claims thereto.

The law further provides that an action shall be commenced by the filing of a verified complaint, in which he shall name the defendants as "all persons claiming any interest in or lien upon the real property herein described, or any part thereof." He was required to give in his complaint a particular description of the property. The law provided that upon the filing of the complaint, a summons or notice was required to be issued, containing the names of the court and the country in which the action was brought, the name of the plaintiff, and a particular description of the property involved, which notice was directed to "all persons claiming any interest in or lien upon the real property herein described, or any part thereof," as defendants.

The law further provided that said summons or notice should be published in a newspaper of general circulation in the county where the action was brought, at least once a week for a period of two months.

The law further provided that personal notice should be given to any person claiming an interest in the property or a lien thereon adverse to the plaintiff.

The said law further provided that upon the publication and posting of the summons and its service upon and mailing to the person, if any, upon whom it is herein directed to be specially served, the court shall have full and complete jurisdiction over the plaintiff and said property and of the person and every one claiming any estate, right, title, or interest in or to or lien upon said property, or any part thereof, and shall be deemed to have obtained the possession and control of said property, for the purpose of the action, and shall have full and complete jurisdiction to render judgment therein, which is provided for in the law.

In the case of the American Land Company vs. Zeiss, cited and relied upon by the appellants, the validity of said law was attacked and the legality of the title granted to Zeiss was impugned for the reason that the law was unconstitutional and void, and because the plaintiff had not received actual notice of the application to Zeiss to have his title quieted, under said law. The Supreme Court of the United States (219 U.S., 47) held, as has been above indicated, that the law was constitutional and that a compliance with the requirements of the notice provided for in said law was sufficient to give the court jurisdiction over the res and to enter a valid decree. There seems to be but little in the decision in the case of the American Land Company vs. Zeiss to support the contention of the appellants.

Considering that the Legislature of the Philippine Islands had full power to adopt the procedure provided for in Act No. 496, for the registration of the title of lands; and

Considering that the court in the original action followed strictly the procedure adopted by said law; and

Considering that there is no claim of fraud, actual or constructive, upon the part of any of the parties connected with said action, we are forced to the conclusion that the appellants here are not now entitled to have that judgment or decree of registration and certificate amended or set aside.

There remains another question, however, which the appellants have not discussed and which we deem of importance. It is the question of the right of the Land Court to correct an error of closure in a plan or of a statement contained in a certificate. A plan is prepared and is presented with the petition for the registration of a parcel of land. No opponents appear. No opposition is presented to the registration. All the steps in the procedure required by law have been taken. The land is registered. It is then discovered for the first time that by reason of a wrong direction given to one of the lines in the plan, said plan will not close — that if a wall were built upon the lines of the plan, one of the four corners of the wall would not meter. We believe that an error of the character may be corrected by the court, provided that such correction does not include land not included in the original petition. Upon the question whether the amended plan (p.252, record) included more or different lands than were included in the original petition, we find the following statements made by one of the judges who ordered said plan amended. The statements is:

At this stage of the proceedings and on his particular point nothing further is incumbent upon the court than to determine the property as it was adjudicated in this case.

Therein no new portion was either added or subtracted, and this court finds that such should be the holding on this particular point.

We have a further statement made by one of the judges, the Honorable Charles H. Smith, relating to the same question, in an answer presented by him to a petition for a writ of prohibition, presented by

some the appellants herein, to the Supreme Court. That petition for a writ of prohibition involved practically the same question presented by the appellants here now. Upon the question whether or not additional lands had been included in the new plan (p.252, record), Judge Smith, in answering for himself and his associates (Ostrand and Romualdez) said:

Respondents deny that a new dividing line between the premises in question (premises of the plaintiff and appellant) was determined and established by an order of the court issued at the conclusion of said proceedings, but, on the contrary, respondents charge the truth to be that the dividing line between said properties was not changed but simply approved and so indicated upon the record title. For instance, the line between said properties beginning on the south side of the Escolta is exactly at the same point indicated in the original description and approved by the court; in other words, the premises in question of the said Maria del Consuelo Felisa Roxas y Chuidian have not been enlarged; the boundary lines thereof have not been changed; the real descriptions of the properties have been left undisturbed; the adjoining land owned by the petitioners is undiminished, except possibly as to alleged easements claimed to have been created by the projection of some of the roots of the petitioners' building over the aforesaid registered property of the said Roxas. That matter is settled clearly by the provisions of the last paragraph of section 39 of Act No. 496."

We called attention above to the fact that the petitioner alleged that the line A-B of her property ran S., 44º 30' W., a distance of 31.08 meters, while the plan accompanying said petition (see Exhibit A, page 35, ante) made said line to run S., 46º 30' W., a distance of 31.08 meters An examination of the certificate issued to the petitioner (see page 39, ante) also states that the line A-B runs S., 46 30' W., for a distance of 31.08 meters. The record contains no application why the original plan (see Exhibit A, page 35, ante) did not conform to the description of the land given in the petition. That error, in our judgment, seems to have constituted the real difficulty with the closure of the plan. Under said conditions we are of the opinion that the Land Court is entirely justified in ordering the plan corrected for the purposes above indicated.

There is still another question involved in the case, which the appellants have not discussed, and that is the right of Maria del Consuelo Felisa Roxas y Chuidian to have her original certificate of registration corrected, for the purpose of showing that she was the owner of the buildings located upon the parcel of land in question. It will be remembered that in her petition presented January 12, 1906, she alleged that she was the owner of the parcel of land in question, together with the buildings thereon. No opposition was presented. No objection was made to the registration of the land as described in her petition. The record shows no reason why the buildings should have been omitted in the certificate of registration. The omission must have been an errors. on the part of the clerk. We find that Act No. 496 contains an express provision for the correction of such errors. Section 112 provides that the registered owner may, at any time, apply by petition to have corrected any "error, omission, or mistake made in entering a certificate, or any memorandum thereon, or on any duplicate certificate." We think the petition presented by Miss Roxas for the correction of such original certificate was entirely within her right under the law. It might be claimed, and we believe that the proposition is sustained by law, that the registration of a parcel of land, unless the record contains something to the contrary, necessarily includes the buildings and edifices located thereon, even though they are not mentioned. Without relying upon that proposition of law, however, and in view of the petition of the plaintiff, it is hereby ordered that the original certificate be amended so as to include not only the land described in the original petition, but the buildings located thereon as well.

With reference to the petition of the Masonic Temple Association of Manila, the record contains no sufficient reasons for not granting the same.

Therefore, and in view of all of the foregoing, we are of the opinion that the judgment of the court below should be and it is hereby affirmed, with costs.

Arellano, C.J., Torres, Carson, Trent, and Araullo, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

 

G.R. No. 114299 September 24, 1999

TRADERS ROYAL BANK, petitioner, vs.HON. COURT OF APPEALS, PATRIA, RUBY ANN, MARGARITA, ROSARIO, CYNTHIA, LINDA JOY, all surnamed CAPAY and RAMON A. GONZALES, respondents.

G.R. No. 118862 September 24, 1999

PATRIA, RUBY ANN, MARGARITA, ROSARIO, CYNTHIA, LINDA JOY, all surnamed CAPAY, and RAMON A. GONZALES, petitioners, vs.SPS. HONORATO D. SANTOS and MARIA CRISTINA S. SANTOS, SPS. CECILIO L. PE and JOSEFINA L. PE, FLORA LARON WESCOMBE, SPS. TELESFORO P. ALFELOR II and LIZA R. ALFELOR, SPS. DEAN RODERICK FERNANDO and LAARNI MAGDAMO FERNANDO, REMEDIOS OCA, DEVELOPMENT BANK OF THE PHILIPPINES and TRADERS ROYAL BANK, respondents.

 

KAPUNAN, J.:

The present controversy has its roots in a mortgage executed by the spouses Maximo and Patria Capay in favor of Traders Royal Bank (TRB) pursuant to a loan extended by the latter to the former. The mortgage covered several properties, including a parcel of land, the subject of the presentdispute. 1 The loan became due on January 8, 1964 and the same having remained unpaid, TRB instituted extra-judicial foreclosure proceedings upon the mortgaged property. 1âwphi1.nêt

To prevent the property's sale by public auction, the Capays, on September 22, 1966, filed a petition for prohibition with preliminary injunction (Civil Case No. Q-10453) before the Court of First Instance (CFI) of Rizal, alleging that the mortgage was void since they did not receive the proceeds of the loan. The trial court initially granted the Capays' prayer for preliminary injunction.

On March 17, 1967, the Capays caused to be filed in the Register of Deeds of Baguio City a notice of lis pendensover the disputed property. Said notice was entered in the Day Book, as well as in the Capays' certificate of title.

Subsequently, the injunction issued by the trial court was lifted thus allowing the foreclosure sale to proceed. Foreclosure proceedings were initiated and on October 17, 1968, the property was sold to TRB which was the highest bidder at the auction sale. A sheriff certificate of sale was issued in its name on the same day. On February 25, 1970, the property was consolidated in the name of TRB, the sole bidder in the sale. TCT No. T-6595 in the name of the Capay spouses was then cancelled

and a new one, TCT No. T-16272, 2 was entered in the bank's name. The notice of lis pendens, however, was not carried over in the certificate of title issued in the name TRB.

Thereafter, the Capays filed with the CFI a supplemental complaint praying for the recovery of the property with damages and attorney's fees. Trial in Civil Case No. Q-10453 proceeded and, on October 3, 1977, the CFI rendered its decision declaring the mortgage void for want of consideration. The CFI ordered, among other things, the cancellation of TCT No. T-16272 in the name of TRB and the issuance of new certificates of title in the name of the Capay spouses.

TRB appealed to the Court of Appeals. While the case was pending in the Court of Appeals, TRB on March 17, 1982 sold the land to Emelita Santiago in whose name a new certificate of title, TCT No. 33774, 3 was issued, also, without any notice of lis pendens annotated thereon. Santiago in turn divided the land into six (6) lots and sold these to Marcial Alcantara, Armando Cruz and Artemio Sanchez, who became co-owners thereof. 4 Alcantara and his co-owners developed the property and thereafter sold the six (6) lots to seperate buyers who issued seperate titles, again, bearing no notice of lis pendens. 5

On July 30, 1982, the Court of Appeals rendered its decision modifying the decision of the trial court as to the award of damages but affirming the same in all other respects.

For having been filed out of time and for lack of merit, the petition for certiorari filed by TRB before this Court 6was denied in a Resolution dated September 12, 1983. TRB's motion for reconsideration was similarly denied in a Resolution dated October 12, 1983. The Court's September 12, 1983 Resolution having become final and executory on November 9, 1983, the trial court issued a writ of execution directing the Register of Deeds of Baguio City to cancel TCT No. 16272 in the name of TRB, and to issue a new one in the name of the Capay spouses.

Said writ, however, could not be implemented because of the successive subsequent transfers of the subdivided property to buyers who obtained separate titles thereto. Thus, a complaint for recovery of possession ownership dated 8 June 1985 was filed before the Quezon City Regional Trial Court against TRB and the subsequent transferees of the property, the respondents in G.R. No. 118862 (hereinafter, "the non-bank respondents"). Plaintiffs in said case were Patria Capay, her children by Maximo 7 who succeeded him upon his death on August 25, 1976, and Ramon Gonzales, counsel of the spouses in Civil Case No. Q-10453 who become co-owner of the property to the extent of 35% thereof as his attorney's fees (collectively, "the Capays"). On March 27, 1991, the trial court rendered its decision, the dispositive portion of which states:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs against the defendants and ordering the Register of Deeds for Baguio to cancel TCT No. T-36177, Books 198, Page 177 in the names of defendants Spouses Honorato D. Santos and Maria Cristina Santos; to cancel TCT No. 36707, Book 201, Page 107 in the names of defendant Spouses Cecilio Pe and Josefina L. Pe; to cancel TCT No. T-36051, Book 198, Page 51 in the name of Flora Laron Wescombe, married to Kevin Lind Wescombe (now deceased); to cancel TCT No. 36147, Book 198, page 147 in the names of Spouses Telesforo P. Alfelor II and Liza R. Alfelor; to cancel TCT No. T-36730, Book 201, Page 130 in the names of Spouses Dean Roderick Fernando and Laarni Magdamo Fernando; to cancel TCT No. 37437, Book 205, Page 37 in the name of Remedios Oca, and issue new ones free from all liens and encumbrances, together with all the improvements therein in the names of plaintiffs sharing pro indiviso as follows: 35% to Ramon A. Gonzales, married to Lilia Y. Gonzales, of legal age, with postal address at

23 Sunrise Hill, New Manila, Quezon City 37.92% to Patria B. Capay, of legal age, widow, Filipino; 5.41% each to Ruby Ann Capay, of legal age, Filipino married to Pokka Vainio, Finnish citizen; Chona Margarita Capay, of legal age, Filipino, married to Waldo Flores; Rosario Capay of legal age, Filipino, married to Jose Cuaycong, Jr.; Cynthia Capay, of legal age, Filipino, married to Raul Flores; Linda Joy Capay, of legal age, Filipino, married to Pedro Duran, all with postal address at 37 Sampaguita St., Capitolville Subd., Bacolod City, ordering said defendants to vacate the premises in question and restoring plaintiffs thereto and for defendant Traders Royal Bank to pay each of the plaintiffs moral damages in the amount of P100,000.00, P40,000.00 in exemplary damages and P40,000.00 as attorney's fees, all with legal interest from the filing of the complaint, with costs against defendants.

SO ORDERED. 8

TRB and the non-bank respondents appealed to the Court of Appeals. In a Decision promulgated on February 24, 1994 in CA-G.R. CV No. 33920, the appellate court affirmed the decision of the trial court in toto. 9 It ruled that the non-bank respondents cannot be considered as purchasers for value and in good faith, having purchased the property subsequent to the action in Civil Case No. Q-10453 and that while the notice of lis pendens was not carried over to TRB's certificate of title, as well as to the subsequent transferees' titles, it was entered in the Day Book which is sufficient to constitute registration and notice to all persons of such adverse claim, citing the cases of Villasor vs. Camon, 10 Levin vs. Bass 11 and Director of Lands vs. Reyes. 12

As regard TRB, the Court of Appeals said that the bank was in bad faith when it sold the property knowing that it was under the litigation and without informing the buyer of that fact.

On April 26, 1994, TRB filed with this Court a petition for review to set aside the CA decision, docketed herein as G.R. No. 114299, invoking the following grounds:

I.

THE RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR OF LAW IN PROMULGATING THE DISPUTED DECISION AND THEREBY DECIDED A QUESTION OF SUBSTANCE WHOLLY CONTRARY TO SETTLED JURISPRUDENCE AND TOTALLY NOT IN ACCORD WITH APPLICABLE DECISION OF THIS HONORABLE SUPREME COURT.

II.

THE RESPONDENT HONORABLE COURT OF APPEALS HAS COMMITTED SO GRAVE AND SERIOUS ERRORS OF LAW IN SANCTIONING A DEPARTURE FROM THE USUAL AND ACCEPTED COURSE OF JUDICIAL PROCEEDING AS TO CALL FOR THE EXERCISE OF THE POWER OF BY THIS HONORABLE SUPREME COURT.

a) The public respondent has plainly and manifestly acted whimsically, arbitrarily, capriciously, with grave abuse of discretion, in excess of jurisdiction tantamount to lack of jurisdiction.

xxx xxx xxx

b) The public respondent erred in not finding that it was not the fault of petitioner when the notice of lis pendens was not carried over to its new title.

xxx xxx xxx

c) The public respondent erred in not finding that PD No. 1271 had legally caused the invalidation of the Capay's property and the subsequent validation of TRB's title over the same property was effective even as against the Capays. 13

Meanwhile, the non-bank respondents moved for a reconsideration of the Court of Appeals' decision. Convinced of the movants' arguments, the Court of Appeals in a Resolution promulgated on August 10, 1994 granted the motion for reconsideration and dismissed the complaint as against them. The dispositive portion of the resolution states:

ACCORDINGLY, in view of the foregoing disquisitions and finding merit in the motion for reconsideration, the same is hereby GRANTED. Consequently, the decision of this Court, promulgated on February 24, 1994, is hereby RECONSIDERED. The complaint filed against defendants-appellants with the court a quo is hereby ordered DISMISSED, and the certificate of titles originally issued to them in their individual names are hereby ordered restored and duly respected. We make no pronouncement as to costs.

SO ORDERED. 14

The Capays thus filed with this Court a petition for review, docketed as G.R. No. 118862 to set aside the resolution of the Court of Appeals raising the following errors:

I

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW HOLDING THATTUAZON VS. REYES, 48 PHIL. 814 AND RIVERA VS. MORAN, 48 PHIL. 836 ARE NOT APPLICABLE HEREOF, WHILE PINO VS. COURT OF APPEALS, 198 SCRA 436, IS APPLICABLE.

II

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW HOLDING THATATUN VS. MUNOZ, 97 PHIL. 762 AND LAROZA VS. GUIA, 134 SCRA 34, ARE NOT APPLICABLE.

III

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW HOLDING THATLEVIN VS. BASS, 91 PHIL. 419 VILLASOR VS. CAMON, 89 PHIL. 404 AND DIRECTOR OF LANDS VS. REYES, 68 SCRA 73, ARE NOT APPLICABLE HEREOF.

IV

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW HOLDING THAT PETITIONERS ARE GUILTY OF LACHES.

V

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW HOLDING THAT THERE IS NO DISTINCTION IN THE REGISTRATION OF VOLUNTARY INSTRUMENTS VIS-A-VISINVOLUNTARY INSTRUMENTS.

VI

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW HOLDING THAT RESPONDENTS WHO ARE LAWYERS, RESPONSIBLE CITIZENS AND WELL-RESPECTED RESIDENTS IN THE COMMUNITY, ARE EXEMPTED FROM THE EFFECTS OF THE CONSTRUCTIVE NOTICE ARISING FROM REGISTRATION.

VII

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF WITH REGARDS TO TRADERS ROYAL BANK, AFTER THE LATTER HAS PERFECTED ITS APPEAL TO THE SUPREME COURT.

VIII

THE COURT OF APPEALS PALPABLY ERRED IN NOT RULING ON THE COUNTER-ASSIGNMENT OF ERROR THAT:

B) THE LOWER COURT ERRED IN NOT HOLDING THAT DEFENDANTS ARE BOUND BY THE DECISION IN CIVIL CASE NO. Q-10453.

Subsequently, G.R. No. 118862 was consolidated with G.R No. 114299, pursuant to this Court's Resolution dated July 3, 1996. 15

The consolidated cases primarily involve two issues: (1) who, as between the Capays and the non-bank respondents, has a better right to the disputed property, and (2) whether or not TRB is liable to the Capays for damages.

On the first issue, we rule for the non-bank respondents.

I

First, when TRB purchased the property at the foreclosure sale, the notice of lis pendens that the Capays caused to be annotated on their certificate of title was not carried to the new one issued to TRB. Neither did the certificate of title of Emelita Santiago, who purchased the property from TRB, contain any such notice. When Santiago caused the property to be divided, six (6) new certificates of title were issued, none of which contained any notice of lis pendens. Santiago then sold the lots to Marcial Alcantara and his co-owners who next sold each of these to the non-bank respondents. The non-bank respondents, therefore, could not have been aware that the property in question was the subject of litigation when they acquired their respective portions of said property. There was nothing in the certificates of title or respective predecessors-in-interest that could have aroused their suspicion. The non-bank respondents had a right to rely on what appeared on the face of the title of their respective predecessors-in-interest, and were not bound to go beyond the same. To hold otherwise would defeat one of the principal objects of the Torrens system of land registration, that is, to facilitate transactions involving lands.

The main purpose of the Torrens system is to avoid possible conflicts of title to real estate and to facilitate transactions relative thereto by giving the public the right to rely upon the face of a Torrens certificate of title and to dispense with the need of inquiring further, except when the party concerned has actual knowledge of facts and circumstances that should impel a reasonably cautious man to make such further inquiry. Where innocent third persons, relying on the correctness of the certificate of title thus issued, acquire rights over the property, the court cannot disregard such rights and order the total cancellation of the certificate. The effect of such an outright cancellation would be to impair public confidence in the certificate of title, for everyone dealing with property registered under the Torrens system would have to inquire in every instance as to whether the title has been regularly or irregularly issued by the court. Every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and the law will in no way oblige him to go beyond the certificate to determine the condition of the property.

The Torrens system was adopted in this country because it was believed to be the most effective measure to guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and recognized. If a person purchases a piece of land on the assurance that the seller's title thereto is valid, he should not run the risk of being told later that his acquisition was ineffectual after all. This would not only be unfair to him. What is worse is that if this were permitted, public confidence in the system would be eroded and land transactions would have to be attended by complicated and not necessarily conclusive investigations and proof of ownership. The further consequence would be that land conflicts could be even more numerous and complex than they are now and possibly also more abrasive, if not even violent. The Government, recognizing the worthy purposes of the Torrens system, should be the first to accept the validity of titles issued thereunder once the conditions laid down by the law are satisfied. 16

Second, the foregoing rule notwithstanding, the non-bank respondents nevertheless physically inspected the properties and inquired from the register of Deeds to ascertain the absence of any defect in the title of the property they were purchasing — an exercise of diligence above that required by law.

Thus, respondent Aida Fernando Meeks, who bought Lot 5 for her son Dean, testified:

Q How did you come to live in Baguio City, particulary in Kim. 2.5 San Luis, Baguio City?

A In one of my visits to my sister who has been residing here for twelve (12) years now, I got interested in buying a property here.

Q How did you come to know of this property at Asin Road where you now reside?

A My sister, Ruth Ann Valdez, sir.

Q When this particular property was bought by you, when was that?

A I do not remember the exact date, but it was in 1984, sir.

Q At the time when you went to see the place where you now reside, how did it look?

A This particular property that I bought was then a small one (1) room structure, it is a two (2)-storey one (1) bedroom structure.

Q What kind of structure with regards to material?

A It is a semi-concrete structure, sir.

Q And aside from this two (2)-storey one (1)-room structure, how did the surrounding area look like at the time you visited?

A There were stone walls from the road and there were stone walls in front of the property and beside the property.

Q At the time you went to see the property with your agent, rather your sister Ruth Ann Valdez did you come to know the owner?

A We did because at the time we went there, Mr. Alcantara was there supervising the workers.

Q And who?

A Amado Cruz sir.

Q After you saw this property, what else did you do?

A My first concern then was am I buying a property with a clean title.

Q In regards to this concern of yours, did you find an answer to this concern of yours?

A At first; I asked Mr. Alcantara and I was answered by him.

Q What was his answer?

A That it was a property with a clean title, that he has shown me the mother title and it is a clean title.

Q Aside from being informed that it is a property with a clean title, did you do anything to answer your question?

A Yes, sit.

Q What did you do?

A Well, the first step I did was to go to the Land Registration Office.

Q Are you referring to the City Hall of Baguio?

A Yes, the City Hall of Baguio.

Q And what did you do in the Registry of Deeds?

A We looked for the title, the original title, sir.

Q When you say we, who was your companion?

A Mr. Alcantara and my present husband, sir.

Q The three (3) of you?

A Yes, sir.

Q What title did you see there?

A We saw the title that was made up in favor of Amado Cruz, sir.

Q And what was the result of your looking up for this title in the name of Amado Cruz?

A We had to be reassured that it was a genuine one, so we asked Atty. Diomampo who heads the office. We showed him a copy of that title and we were also reassured by him that anything that was signed by him was as good as it is.

Q Did this Atty. Diomampo reassure you that the title was good?

A He did.

Q After your conversation with the Register of Deeds, what did you do?

A The second step we did was to confer with our lawyer, a friend from RCBC Binondo, Manila this is Atty. Nelson Waje.

Q What is your purpose in going to this lawyer?

A We wanted an assurance that we were getting a valid title just in case we think of buying the property.

Q What was the result of your conference with this lawyer?

A He was absolutely certain that was a valid title.

Q Mrs. Meeks, after looking at the place, going to the Register of Deeds, looking at the title and seeing your lawyer friend, what decision did you finally make regarding the property?

A We wanted more reassurances, so we proceeded to Banaue, as advised by that same lawyer, there is another office of the Bureau of Lands. I cannot recall the office but it has something to do with registration of the old.

Q What is your purpose in going to this Office in Banaue?

A I wanted more reassuances that I was getting a valid title.

Q What was the result of your visit to the Banaue Office?

A We found the title of this property and there was reassurance that it was a clean title and we saw the mother title under the Hilario family.

Q Mrs. Meeks, when you say Banaue, what particular place is this Banaue?

A It is in Banaue Street in Quezon City, sir.

Q And when you saw the title to this property and the mother title, what was the result of your investigation, the investigation that you made?

A We were reassured that we were purchasing a valid title, we had a genuine title.

Q When you were able to determine that you had a valid, authentic or genuine title, what did you do?

A That is when I finally thought of purchasing the property. 17

Telesforo Alfelor II, the purchaser of Lot 4, narrated going through a similar routine:

Q How did you come to know of this place as Asin Road where you are presently residing?

A It was actually through Mrs. Flory Recto who is presently the Branch Manager of CocoBank. She informed my wife that there is a property for sale at Asin Road, and she was the one who introduced to us Mr. Alcantara, sir.

Q When you were informed by Mrs. Recto and when you met with Mr. Alcantara, did you see the property that was being offered for sale?

A Yes, sir.

Q When did you specifically see the property, if you can recall?

A I would say it is around the third quarter of 1983, sir.

Q When you went to see the place, could you please describe what you saw at that time?

A When we went there the area is still being developed by Mr. Alcantara. As a matter of fact the road leading to the property is still not passable considering that during that time it was rainy season and it was muddy, we fell on our way going to the property and walked to have an ocular inspection and physical check on the area, sir.

xxx xxx xxx

Q What was the improvement, if any, that was in that parcel which you are going to purchase?

A During that time, the riprap of the property is already there, the one-half of the riprap sir.

Q Do you know who was making this improvement at the time that you went there?

A I would understand that it was Marcial Alcantara, sir.

Q After you saw the place riprap and you were in the course of deciding to purchase this property, what else did you do?

A First, I have to consider that the property is clean.

Q How did you go about determining whether the title of the property is clean?

A Considering that Marcial Alcantara is a real estate broker, I went to his office and checked the documents he has regarding the property.

Q And what was the result of your checking as to whether the title of the property is clean?

A He showed me the copy of the title and it was clean, sir.

Q Aside from going to Mr. Alcantara to check up the title of the property, what else did you do?

A Well, the next thing is I requested his wife to accompany me to the Bureau of Lands or rather the Registry of Deeds, sir.

Q What registry of Deeds are you referring to?

A The Registry of Deeds of Baguio City, sir.

Q And were you able to see the Register of Deeds regarding what you would like to know?

A Yes, and we were given a certification regarding this particular area that it was clean, sir.

Q What Certification are you referring to?

A It is a Certification duly signed by the employee of the Registry of Deeds Adelina Tabangin, sir.

Q Do you have a copy of that Certification?

A Yes, I have, sir. 18

The testimonies of Honorato Santos 19 and Josefina Pe 20 were to the same effect.

The non-bank respondent predecessor-in-interest, Marcial Alcantara, was less thorough:

Q And will you give a brief description of what you do?

A I normally acquire land, quite big tract of land and subdivide it into smaller lots and sold it to some interested parties.

Q Specifically, Mr. Alcantara will you please inform the Court in what place in Baguio have you acquired and subdivided and sold lots?

A Dominican Hill, Leonila Hill, Cristal Cave and Asin Road, sir.

Q You mentioned Asin Road, what particular place in Asin Road are you referring?

A That property I bought from Emelita Santiago, sir.

Q When you say you bought it from Emelita Santiago, how did you come to know that Emelita Santiago is disposing of the property?

A Because of the father, he is the one who offered me the property, sir, Armando Gabriel.

Q Is he also a resident of Baguio?

A He is from Buyagan, La Trinidad sir,

Q How did you come to know of this Armando Gabriel wanting to sell a property in Asin?

A He approached me in the house, sir. He has acquired a title from the Traders Royal Bank.

Q Can you inform the Honorable Court when you had this conversation with Armando Gabriel on the sale of the property at Asin Road?

A Later part of March, 1983, sir.

Q Now, when this Armando Gabriel informed you that he wants his property to be sold, what did you do?

A I went to the place with the agent, sir.

Q When you say you went to the place with the agent, what place?

A Kilometer 2, Asin Road sir.

Q And when you went there to see the place, did you actually go there to see the place?

A By walking, I parked my car a kilometer away, sir.

Q Is it my understanding that when you went to see the property there were no roads?

A None, sir.

xxx xxx xxx

Q Mr. Alcantara, when you went to see this place at Asin Road last week of March, 1983, will you please briefly describe how this place looked like at that time?

A The place was mountainous, grassy, there were cogon trees, some of the roads were eroding already, so we cannot possibly enter the property, sir.

Q At the time you entered the place, was there any visible sign of claim by anyone?

A None, sir.

Q In terms of fence in the area?

A There is no such, sir.

xxx xxx xxx

Q Aside from looking or going to the property, what else did you do to this property prior to your purchase?

A I investigated it with the Register of Deeds, sir.

Q What is your purpose in investigating it with the Register of Deeds?

A To see if the paper in clean and there are no encumbrances, sir.

Q To whom did you talk?

A To Atty. Ernesto Diomampo, sir.

Q And when you went to the Registry of Deeds to investigate and check, did you have occasion to talk with Atty. Diomampo?

A Yes, sir.

Q And what was the result of your talk with Atty. Diomampo?

A The papers are clean except to the annotation at the back with the road right of way, sir.

Q After making this investigation with the Register of Deeds and talking with Atty. Diomampo, what else transpired?

A We bought the property, sir.

Q After purchasing the property from Emelita Santiago, could you please tell the Honorable Court what you did with that deed of sale?

A We registered it with the Register of Deeds for the Certificate of Title because at that time when we bought the property, Emelita Santiago had it subdivided into six (6) lots, sir.

Q Is it our understanding that prior to your purchase the property was subdivided into six (6) parcels?

A Yes, sir.

Q Could you please inform the Honorable Court if you have any buyers in the subdivision of this property prior to your purchase?

A Yes, I have.

Q This subdivision of this property, to what office was it brought for action?

A Bureau of Lands, San Fernando, La Union, sir.

Q Now, Mr. Alcantara, at the time that you had this property subdivided by the owner, could you please inform the Court if there was any claim by any other party opposing the subdivision or claiming the property?

A None, sir.

Q When the Deed of Sale was executed and you said that you presented it to the Register of Deeds and after the subdivision already, what action did the Register of Deeds have regarding the matter?

A They approved it and registered it already in six (6) titles, sir.

Q In whose names?

A One (1) title under my name, Amado Cruz and Dr. Sanchez, sir.

Q Initially, Mr. Alcantara, you said that you are the sole purchaser of this entire area of One Thousand Five Hundred Ninety One (1,591) Square Meters. Now, you are informing this Honorable Court that one Amado Cruz and one Dr. Sanchez were also issued two (2) titles. Could you explain how these titles came into their possession?

A Actually, two (2) are our co-owners, sir.

Q So, is it our understanding that the Deed of Sale from Emelita Santiago is in favor of these two (2) Atty. Cruz and Dr. Sanchez?

A Yes, sir. 21

Third, between two innocent persons, the one who made it possible for the wrong to be done should be the one to bear the resulting loss. 22 The Capays filed the notice of lis pendens way back on March 17, 1967 but the same was not TRB's title. The Capays and their counsel Atty. Ramon A. Gonzales knew in 1968 of the extra-judicial foreclosure sale of the property to TRB and the consolidation of title in the bank's name following the lapse of the one-year period of redemption. But in the next fifteen (15) years or so, they did not bother to find out the status of their title or whether the liens noted on the original certificate of title were still existing considering that the property had already been foreclosed. In the meantime, the subject property had undergone a series of transfers to buyers in good and for value. It was not until after the land was subdivided and developed with the buyers building their houses on the other lots when the Capays suddenly appeared and questioned

the occupants' titles. At the very least, the Capays are guilty of laches. Laches has been defined as the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could nor should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting presumption that the party entitled to it either has abandoned it or declined to assert it. 23

Verily, the principle on prescription of actions is designed to cover situations such as the case at bar, where there have been a series of transfers to innocent purchasers for value. To set aside these transactions only to accommodate a party who has slept on his rights is anathema to good order.

Independently of the principle of prescription of actions working against petitioners, the doctrine of laches may further be counted against them, which latter tenet finds application even to imprescriptibleactions. . . . 24

In De La Calzada-Cierras vs. Court of Appeals, 25 we held:

While it is true that under the law it is the act of registration of the deed of conveyance that serves as the operative act to convey the land registered under the Torrens System (Davao Grains, Inc. vs. Intermediate Appellate Court, 171 SCRA 612), the petitioners cannot invoke said dictum because their action to recover Lot 4362 is barred by the equitable doctrine of laches.

The act of registering the conveyance to Rosendo was constructive notice to the whole world of the fact of such conveyance (Heirs of Maria Marasigan vs. Intermediate Appellate Court, 152 SCRA 253).

But the petitioners' complaint to recover the title and possession of Lot 4362 was filed only on July 21, 1981, twelve (12) years after the registration of the sale to Rosendo. The petitioners failed and neglected for an unreasonably long time to assert their right, if any, to the property in Rosendo's possession.

Being guilty of laches, the Capays cannot invoke the ruling in Villasor vs. Camon Levin Bass and Director of Lands vs. Reyes 26 to the effect that entry of the notice of lis pendens in the day book (primary entry book) is sufficient to constitute registration and such entry is notice to all persons of such adverse claim. Certainly, it is most iniquitous for the Capays who, after sleeping on their rights for fifteen years to assert ownership over the property that has undergone several transfers made in good faith and for value and already subdivided into several lots with improvements introduced thereon by their owners.

In the same vein, the cases cited by the Capays in their first two (2) assignment of errors, do not help them any, as the transferees in said cases were not innocent purchasers for value and in good faith. In Tuazon vs. Reyes andSiochi, 27 where the land involved therein was sold by Petronilo David to Vicente Tuazon, it was with a deed containing the recital that the land was in dispute between the vendor and Roberto Siochi. Tuazon, who was merely subrogated to the rights of the vendor was aware of the dispute and, furthermore, David did not warrant the title to the same. In Rivera vs. Moran, 28 Rivera acquired interest in the land before the final decree was entered in the cadastral proceedings. Rivera, the transferee, was aware of the pending litigation and, consequently, could not have been considered a purchaser in good faith. Similarly, in Atun, et al. vs. Nuñez, et al.29 and Laroza vs. Guia, 30 the buyers of the property at the time of their acquisition knew of the existence of the notice of lis pendens. In

contrast to the cited cases, the non-bank respondents in the case at bar acquired their respective portions of the land with clean title from their predecessors-in-interest.

II

We come now to TRB's liability towards the Capays.

The Bank unconvincingly tries to wash its hands off the present controversy, and attempts to shift the blame on the Capays, thus:

xxx xxx xxx

23. The petitioner Bank, during all the time that it was holding the title for over fourteen (14) years that there was no legal impediment for it to sell said property, Central Bank regulations require that real properties of banks should not he held for more than five (5) years:

24. The fault of the Register of Deeds in not carrying over the Notice of Lis Pendens to the new title of the petitioner Bank should not be absorbed by the latter considering that in all good faith, it was not aware of the existence of said annotation during all the time that said title was in its possession for almost fourteen (14) years before the property was sold to Emelita G. Santiago. . . . 31

TRB concludes that "(t)he inaction and negligence of private respondents allowing ownership to pass for almost 15 years constitute prescription of action and/or laches." 32

Sec. 25 of the General Banking Act, 33 provides that no bank "shall hold the possession of any real estate under mortgage or trust, deed, or the title and possession of any real estate purchased to secure any debt due to it, for a longer period than five years." TRB, however, admits hoding on to the foreclosed property for twelve (12) years after consolidating title in its name. The bank is, therefore, estopped from involving banking laws and regulations to justify its belated disposition of the property. It cannot be allowed to hide behind the law which it itself violated.

TRB cannot feign ignorance of the existence of the lis pendens because when the property was foreclosed by it, the notice of lis pendens was annotated on the title. But when TCT No. T-6595 in the name of the Capay spouses was cancelled after the foreclosure, TCT No. T-16272 which was issued in place thereof in the name of TRB did not carry over the notice of lis pendens.

We do not find the Capays guilty of "inaction and negligence" as against TRB. It may be recalled that upon the commencement of foreclosure proceedings by TRB, the Capays filed an action for prohibition on September 22, 1966 against the TRB before the CFI to stop the foreclosure sale. Failing in that attempt, the Capays filed a supplemental complaint for the recovery of the property. The case reached this Court. Prescription or laches could not have worked against the Capays because they had persistently pursued their suit against TRB to recover their property.

On the other hand, it is difficult to believe TRB's assertion that after holding on to the property for more than ten (10) years, it suddenly realized that it was acting in violation of the General Bank Act. What is apparent is that TRB took advantage of the absence of the notice of lis pendens at the back of their certificate of title and sold the property to an unwary purchaser. This notwithstanding the adverse decision of the trial court and the pendency of its appeal. TRB, whose timing indeed smacks of bad faith, thus transferred caused the property without the lis pendens annotated on its title to put

it beyond the Capays' reach. Clearly, the bank acted in a manner contrary to morals, good customs and public policy and should be held liable for damages. 34

Considering however, that the mortgage in favor of TRB had been declared null and void for want of consideration and, consequently, the foreclosure proceedings did not have a valid effect, the Capays would ordinarily be entitled to the recovery of their property. Nevertheless, this remedy is not now available to the Capays inasmuch as title to said property has passed into the hands of third parties who acquired the same in good faith and for value. Such being the case, TRB is duty bound to pay the Capays the fair market value of the property at the time it was sold to Emelita Santiago, the transferee of TRB.

WHEREFORE, the Decision of the Court of Appeals dated Frebruary 24, 1994 in CA-G.R. CV No. 33920, as modified by its Resolution dated August 10, 1994 is hereby AFFIRMED. In addition, Traders Royal Bank is ordered to pay the Capays the fair market value of the property at the time it was sold to Emelita Santiago.

This Decision is without prejudice to whatever criminal, civil or administrative action against the Register of Deeds and or his assistants that may be taken by the party or parties prejudiced by the failure of the former to carry over the notice of lis pendens to the certificate of title in the name of TRB.1âwphi1.nêt

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-48321             August 31, 1946

OH CHO, applicant-appellee, vs.THE DIRECTOR OF LANDS, oppositor-appellant.

Office of the Solicitor General Roman Ozaeta and Assistant Solicitor General Rafael Amparo for appellant.Vicente Constantino for appellee.Ferrier, Gomez and Sotelo and J. T. Chuidian as amici curiae.

PADILLA, J.:

This is an appeal from a judgment decreeing the registration of a residential lot located in the municipality of Guinayangan, Province of Tayabas in the name of the applicant.

The opposition of the Director of Lands is based on the applicant's lack of title to the lot, and on his disqualification, as alien, from acquiring lands of the public domain.

The applicant, who is an alien, and his predecessors in interest have been in open, continuous, exclusive and notorious possession of the lot from 1880 to filing of the application for registration on January 17, 1940.

The Solicitor General reiterates the second objection of the opponent and adds that the lower court, committed an error in not declaring null and void the sale of the lot to the applicant.

The applicant invokes the Land Registration Act (Act No. 496), or should it not be applicable to the case, then he would apply for the benefits of the Public Land Act (C.A. No. 141).

The applicant failed to show that he has title to the lot that may be confirmed under the Land Registration Act. He failed to show that he or any of his predecessors in interest had acquired the lot from the Government, either by purchase or by grant, under the laws, orders and decrease promulgated by the Spanish Government in the Philippines, or by possessory information under the Mortgaged Law (section 19, Act 496). All lands that were not acquired from the Government, either by purchase or by grant below to the public domain. An exception to the rule would be any land that should have been in the possession of an occupant and of his predecessors in interest since time immemorial, for such possession would justify the presumption that the land had never been part of the public domain or that it had been a private property even before the Spanish conquest. (Cariño vs. InsularGovernment, 212 U.S., 449; 53 Law. Ed., 594.) The applicant does not come under the exception, for the earliest possession of the lot by his first predecessors in interest begun in 1880.

As the applicant failed to show title to the lot, the next question is whether he is entitled to decree or registration of the lot, because he is alien disqualified from acquiring lands of the public domain (sections 48, 49, C.A. No. 141).

As the applicant failed to show the title to the lot, and has invoked the provisions of the Public Land Act, it seems unnecessary to make pronouncement in this case on the nature or classifications of the sought to be registered.

It may be argued that under the provisions of the Public Land Act the applicant immediate predecessor in interest would have been entitled to a decree of registration of the lot had they applied for its registration; and that he having purchased or acquired it, the right of his immediate predecessor in interest to a decree of registration must be deemed also to have been acquired by him. The benefits provided in the Public Land Act for applicant's immediate predecessors in interest should comply with the condition precedent for the grant of such benefits. The condition precedent is to apply for the registration of the land of which they had been in possession at least since July 26, 1894. This the applicant's immediate predecessors in interest failed to do. They did not have any vested right in the lot amounting to the title which was transmissible to the applicant. The only right, if it may thus be called, is their possession of the lot which, tacked to that of their predecessors in interest, may be availed of by a qualified person to apply for its registration but not by a person as the applicant who is disqualified.

It is urged that the sale of the lot to the applicant should have been declared null and void. In a suit between vendor and vendee for the annulment of the sale, such pronouncement would be necessary, if the court were of the opinion that it is void. It is not necessary in this case where the vendors do not even object to the application filed by the vendee.

Accordingly, judgment is reversed and the application for registration dismissed, without costs.

Moran, C.J., Feria, Pablo, Hilado and Bengzon, JJ., concur.

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

DECISION

October 2, 1915

G.R. No. L-8936

CONSUELO LEGARDA, with her husband MAURO PRIETO, plaintiffs-appellants,

vs.

N.M. SALEEBY, defendant-appellee.

Singson, Ledesma and Lim for appellants.

D.R. Williams for appellee.

JOHNSON, J.:

From the record the following facts appear:

First. That the plaintiffs and the defendant occupy, as owners, adjoining lots in the district of Ermita in

the city of Manila.

Second. That there exists and has existed a number of years a stone wall between the said lots. Said

wall is located on the lot of the plaintiffs.

Third. That the plaintiffs, on the 2d day of March, 1906, presented a petition in the Court of Land

Registration for the registration of their lot. After a consideration of said petition the court, on the 25th

day of October, 1906, decreed that the title of the plaintiffs should be registered and issued to them

the original certificate provided for under the Torrens system. Said registration and certificate included

the wall.

Fourth. Later the predecessor of the defendant presented a petition in the Court of Land Registration

for the registration of the lot now occupied by him. On the 25th day of March, 1912, the court decreed

the registration of said title and issued the original certificate provided for under the torrens system.

The description of the lot given in the petition of the defendant also included said wall.

Fifth. Several months later (the 13th day of December, 1912) the plaintiffs discovered that the wall

which had been included in the certificate granted to them had also been included in the certificate

granted to the defendant. They immediately presented a petition in the Court of Land Registration for

an adjustment and correction of the error committed by including said wall in the registered title of

each of said parties. The lower court however, without notice to the defendant, denied said petition

upon the theory that, during the pendency of the petition for the registration of the defendant’s land,

they failed to make any objection to the registration of said lot, including the wall, in the name of the

defendant.

Sixth. That the land occupied by t he wall is registered in the name of each of the owners of the

adjoining lots. The wall is not a joint wall.

Under these facts, who is the owner of the wall and the land occupied by it?

The decision of the lower court is based upon the theory that the action for the registration of the lot of

the defendant was a judicial proceeding and that the judgment or decree was binding upon all parties

who did not appear and oppose it. In other words, by reason of the fact that the plaintiffs had not

opposed the registration of that part of the lot on which the wall was situate they had lost it, even

though it had been theretofore registered in their name. Granting that theory to be correct one, and

granting even that the wall and the land occupied by it, in fact, belonged to the defendant and his

predecessors, then the same theory should be applied to the defendant himself. Applying that theory

to him, he had already lost whatever right he had therein, by permitting the plaintiffs to have the same

registered in their name, more than six years before. Having thus lost hid right, may he be permitted

to regain it by simply including it in a petition for registration? The plaintiffs having secured the

registration of their lot, including the wall, were they obliged to constantly be on the alert and to watch

all the proceedings in the land court to see that some one else was not having all, or a portion of the

same, registered? If that question is to be answered in the affirmative, then the whole scheme and

purpose of the Torrens system of land registration must fail. The real purpose of that system is to quiet

title to land; to put a stop forever to any question of the legality of the title, except claims which were

noted at the time of registration, in the certificate, or which may arise subsequent thereto. That being

the purpose of the law, it would seem that once a title is registered the owner may rest secure, without

the necessity of waiting in the portals of the court, or sitting in the “mirador de su casa,” to avoid the

possibility of losing his land. Of course, it can not be denied that the proceeding for the registration of

land under the Torrens system is judicial (Escueta vs. Director of Lands, 16 Phil. Rep., 482). It is

clothed with all the forms of an action and the result is final and binding upon all the world. It is an

action in rem. (Escueta vs. Director of Lands (supra); Grey Alba vs. De la Cruz, 17 Phil. Rep., 49 Roxas

vs. Enriquez, 29 Phil. Rep., 31; Tyler vs. Judges, 175 Mass., 51 American Land Co. vs. Zeiss, 219 U.S.,

47.)

While the proceeding is judicial, it involves more in its consequences than does an ordinary action. All

the world are parties, including the government. After the registration is complete and final and there

exists no fraud, there are no innocent third parties who may claim an interest. The rights of all the

world are foreclosed by the decree of registration. The government itself assumes the burden of giving

notice to all parties. To permit persons who are parties in the registration proceeding (and they are all

the world) to again litigate the same questions, and to again cast doubt upon the validity of the

registered title, would destroy the very purpose and intent of the law. The registration, under the

torrens system, does not give the owner any better title than he had. If he does not already have a

perfect title, he can not have it registered. Fee simple titles only may be registered. The certificate of

registration accumulates in open document a precise and correct statement of the exact status of the

fee held by its owner. The certificate, in the absence of fraud, is the evidence of title and shows exactly

the real interest of its owner. The title once registered, with very few exceptions, should not thereafter

be impugned, altered, changed, modified, enlarged, or diminished, except in some direct proceeding

permitted by law. Otherwise all security in registered titles would be lost. A registered title can not be

altered, modified, enlarged, or diminished in a collateral proceeding and not even by a direct

proceeding, after the lapse of the period prescribed by law.

For the difficulty involved in the present case the Act (No. 496) providing for the registration of titles

under the torrens system affords us no remedy. There is no provision in said Act giving the parties

relief under conditions like the present. There is nothing in the Act which indicates who should be the

owner of land which has been registered in the name of two different persons.

The rule, we think, is well settled that the decree ordering the registration of a particular parcel of land

is a bar to future litigation over the same between the same parties. In view of the fact that all the

world are parties, it must follow that future litigation over the title is forever barred; there can be no

persons who are not parties to the action. This, we think, is the rule, except as to rights which are

noted in the certificate or which arise subsequently, and with certain other exceptions which need not

be dismissed at present. A title once registered can not be defeated, even by an adverse, open, and

notorious possession. Registered title under the Torrens system can not be defeated by prescription

(section 46, Act No. 496). The title, once registered, is notice to the world. All persons must take

notice. No one can plead ignorance of the registration.

The question, who is the owner of land registered in the name of two different persons, has been

presented to the courts in other jurisdictions. In some jurisdictions, where the “torrens” system has

been adopted, the difficulty has been settled by express statutory provision. In others it has been

settled by the courts. Hogg, in his excellent discussion of the “Australian Torrens System,” at page

823, says: “The general rule is that in the case of two certificates of title, purporting to include the

same land, the earlier in date prevails, whether the land comprised in the latter certificate be wholly,

or only in part, comprised in the earlier certificate. (Oelkers vs. Merry, 2 Q.S.C.R., 193; Miller vs. Davy,

7 N.Z.R., 155; Lloyd vs. Myfield, 7 A.L.T. (V.) 48; Stevens vs. Williams, 12 V.L. R., 152; Register of

Titles, vs. Esperance Land Co., 1 W.A.R., 118.)” Hogg adds however that, “if it can be very clearly

ascertained by the ordinary rules of construction relating to written documents, that the inclusion of

the land in the certificate of title of prior date is a mistake, the mistake may be rectified by holding the

latter of the two certificates of title to be conclusive.” (See Hogg on the “Australian torrens System,”

supra, and cases cited. See also the excellent work of Niblack in his “Analysis of the Torrens System,”

page 99.) Niblack, in discussing the general question, said: “Where two certificates purport to include

the same land the earlier in date prevails. … In successive registrations, where more than one

certificate is issued in respect of a particular estate or interest in land, the person claiming under the

prior certificates is entitled to the estate or interest; and that person is deemed to hold under the prior

certificate who is the holder of, or whose claim is derived directly or indirectly from the person who

was the holder of the earliest certificate issued in respect thereof. While the acts in this country do not

expressly cover the case of the issue of two certificates for the same land, they provide that a

registered owner shall hold the title, and the effect of this undoubtedly is that where two certificates

purport to include the same registered land, the holder of the earlier one continues to hold the title”

(p. 237).

Section 38 of Act No. 496, provides that; “It (the decree of registration) 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 proceeding 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 after entry of the decree (of registration), provided no innocent purchaser

for value has acquired an interest.

It will be noted, from said section, that the “decree of registration” shall not be opened, for any reason,

in any court, except for fraud, and not even for fraud, after the lapse of one year. If then the decree of

registration can not be opened for any reason, except for fraud, in a direct proceeding for that

purpose, may such decree be opened or set aside in a collateral proceeding by including a portion of

the land in a subsequent certificate or decree of registration? We do not believe the law contemplated

that a person could be deprived of his registered title in that way.

We have in this jurisdiction a general statutory provision which governs the right of the ownership of

land when the same is registered in the ordinary registry in the name of two persons. Article 1473 of

the Civil Code provides, among other things, that when one piece of real property had been sold to two

different persons it shall belong to the person acquiring it, who first inscribes it in the registry. This

rule, of course, presupposes that each of the vendees or purchasers has acquired title to the land. The

real ownership in such a case depends upon priority of registration. While we do not now decide that

the general provisions of the Civil Code are applicable to the Land Registration Act, even though we

see no objection thereto, yet we think, in the absence of other express provisions, they should have a

persuasive influence in adopting a rule for governing the effect of a double registration under said Act.

Adopting the rule which we believe to be more in consonance with the purposes and the real intent of

the torrens system, we are of the opinion and so decree that in case land has been registered under

the Land Registration Act in the name of two different persons, the earlier in date shall prevail.

In reaching the above conclusion, we have not overlooked the forceful argument of the appellee. He

says, among other things; “When Prieto et al. were served with notice of the application of Teus (the

predecessor of the defendant) they became defendants in a proceeding wherein he, Teus, was seeking

to foreclose their right, and that of orders, to the parcel of land described in his application. Through

their failure to appear and contest his right thereto, and the subsequent entry of a default judgment

against them, they became irrevocably bound by the decree adjudicating such land to Teus. They had

their day in court and can not set up their own omission as ground for impugning the validity of a

judgment duly entered by a court of competent jurisdiction. To decide otherwise would be to hold that

lands with torrens titles are above the law and beyond the jurisdiction of the courts”.

As was said above, the primary and fundamental purpose of the torrens system is to quiet title. If the

holder of a certificate cannot rest secure in this registered title then the purpose of the law is defeated.

If those dealing with registered land cannot rely upon the certificate, then nothing has been gained by

the registration and the expense incurred thereby has been in vain. If the holder may lose a strip of his

registered land by the method adopted in the present case, he may lose it all. Suppose within the six

years which elapsed after the plaintiff had secured their title, they had mortgaged or sold their right,

what would be the position or right of the mortgagee or vendee? That mistakes are bound to occur

cannot be denied, and sometimes the damage done thereby is irreparable. It is the duty of the courts

to adjust the rights of the parties under such circumstances so as to minimize such damages, taking

into consideration all of the conditions and the diligence of the respective parties to avoid them. In the

present case, the appellee was the first negligent (granting that he was the real owner, and if he was

not the real owner he can not complain) in not opposing the registration in the name of the appellants.

He was a party-defendant in an action for the registration of the lot in question, in the name of the

appellants, in 1906. “Through his failure to appear and to oppose such registration, and the

subsequent entry of a default judgment against him, he became irrevocably bound by the decree

adjudicating such land to the appellants. He had his day in court and should not be permitted to set up

his own omissions as the ground for impugning the validity of a judgment duly entered by a court of

competent jurisdiction.” Granting that he was the owner of the land upon which the wall is located, his

failure to oppose the registration of the same in the name of the appellants, in the absence of fraud,

forever closes his mouth against impugning the validity of that judgment. There is no more reason why

the doctrine invoked by the appellee should be applied to the appellants than to him.

We have decided, in case of double registration under the Land Registration Act, that the owner of the

earliest certificate is the owner of the land. That is the rule between original parties. May this rule be

applied to successive vendees of the owners of such certificates? Suppose that one or the other of the

parties, before the error is discovered, transfers his original certificate to an “innocent purchaser.” The

general rule is that the vendee of land has no greater right, title, or interest than his vendor; that he

acquires the right which his vendor had, only. Under that rule the vendee of the earlier certificate

would be the owner as against the vendee of the owner of the later certificate.

We find statutory provisions which, upon first reading, seem to cast some doubt upon the rule that the

vendee acquires the interest of the vendor only. Sections 38, 55, and 112 of Act No. 496 indicate that

the vendee may acquire rights and be protected against defenses which the vendor would not. Said

sections speak of available rights in favor of third parties which are cut off by virtue of the sale of the

land to an “innocent purchaser.” That is to say, persons who had had a right or interest in land

wrongfully included in an original certificate would be unable to enforce such rights against an

“innocent purchaser,” by virtue of the provisions of said sections. In the present case Teus had his

land, including the wall, registered in his name. He subsequently sold the same to the appellee. Is the

appellee an “innocent purchaser,” as that phrase is used in said sections? May those who have been

deprived of their land by reason of a mistake in the original certificate in favor of Teus be deprived of

their right to the same, by virtue of the sale by him to the appellee? Suppose the appellants had sold

their lot, including the wall, to an “innocent purchaser,” would such purchaser be included in the

phrase “innocent purchaser,” as the same is used in said sections? Under these examples there would

be two innocent purchasers of the same land, is said sections are to be applied .Which of the two

innocent purchasers, if they are both to be regarded as innocent purchasers, should be protected

under the provisions of said sections? These questions indicate the difficulty with which we are met in

giving meaning and effect to the phrase “innocent purchaser,” in said sections.

May the purchaser of land which has been included in a “second original certificate” ever be regarded

as an “innocent purchaser,” as against the rights or interest of the owner of the first original

certificate, his heirs, assigns, or vendee? The first original certificate is recorded in the public registry.

It is never issued until it is recorded. The record notice to all the world. All persons are charged with

the knowledge of what it contains. All persons dealing with the land so recorded, or any portion of it,

must be charged with notice of whatever it contains. The purchaser is charged with notice of every

fact shown by the record and is presumed to know every fact which the record discloses .This rule is so

well established that it is scarcely necessary to cite authorities in its support (Northwestern National

Bank vs. Freeman, 171 U.S., 620, 629; Delvin on Real Estate, sections 710, 710 [a]).

When a conveyance has been properly recorded such record is constructive notice of its contents and

all interests, legal and equitable, included therein. (Grandin vs. Anderson, 15 Ohio State, 286, 289;

Orvis vs. Newell, 17 Conn., 97; Buchanan vs. Intentional Bank, 78 Ill., 500; Youngs vs. Wilson, 27 N.Y.,

351; McCabe vs. Grey, 20 Cal., 509; Montefiore vs. Browne, 7 House of Lords Cases, 341.)

Under the rule of notice, it is presumed that the purchaser has examined every instrument of record

affecting the title. Such presumption is irrebutable. He is charged with notice of every fact shown by

the record and is presumed to know every fact which an examination of the record would have

disclosed. This presumption cannot be overcome by proof of innocence or good faith. Otherwise the

very purpose and object of the law requiring a record would be destroyed. Such presumption cannot

be defeated by proof of want of knowledge of what the record contains any more than one may be

permitted to show that he was ignorant of the provisions of the law. The rule that all persons must take

notice of the facts which the public record contains is a rule of law. The rule must be absolute. Any

variation would lead to endless confusion and useless litigation.

While there is no statutory provision in force here requiring that original deeds of conveyance of real

property be recorded, yet there is a rule requiring mortgages to be recorded. (Arts. 1875 and 606 of

the Civil Code.) The record of a mortgage is indispensable to its validity. (Art .1875.) In the face of that

statute would the courts allow a mortgage to be valid which had not been recorded, upon the plea of

ignorance of the statutory provision, when third parties were interested? May a purchaser of land,

subsequent to the recorded mortgage, plead ignorance of its existence, and by reason of such

ignorance have the land released from such lien? Could a purchaser of land, after the recorded

mortgage, be relieved from the mortgage lien by the plea that he was a bona fide purchaser? May

there be a bona fide purchaser of said land, bona fide in the sense that he had no knowledge of the

existence of the mortgage? We believe the rule that all persons must take notice of what the public

record contains in just as obligatory upon all persons as the rule that all men must know the law; that

no one can plead ignorance of the law. The fact that all men know the law is contrary to the

presumption. The conduct of men, at times, shows clearly that they do not know the law. The rule,

however, is mandatory and obligatory, notwithstanding. It would be just as logical to allow the defense

of ignorance of the existence and contents of a public record.

In view, therefore, of the foregoing rules of law, may the purchaser of land from the owner of the

second original certificate be an “innocent purchaser,” when a part or all of such land had theretofore

been registered in the name of another, not the vendor? We are of the opinion that said sections 38,

55, and 112 should not be applied to such purchasers. We do not believe that the phrase “innocent

purchaser should be applied to such a purchaser. He cannot be regarded as an “innocent purchaser”

because of the facts contained in the record of the first original certificate. The rule should not be

applied to the purchaser of a parcel of land the vendor of which is not the owner of the original

certificate, or his successors. He, in nonsense, can be an “innocent purchaser” of the portion of the

land included in another earlier original certificate. The rule of notice of what the record contains

precludes the idea of innocence. By reason of the prior registry there cannot be an innocent purchaser

of land included in a prior original certificate and in a name other than that of the vendor, or his

successors. In order to minimize the difficulties we think this is the safe rule to establish. We believe

the phrase “innocent purchaser,” used in said sections, should be limited only to cases where

unregistered land has been wrongfully included in a certificate under the torrens system. When land is

once brought under the torrens system, the record of the original certificate and all subsequent

transfers thereof is notice to all the world. That being the rule, could Teus even regarded as the holder

in good fifth of that part of the land included in his certificate of the appellants? We think not. Suppose,

for example, that Teus had never had his lot registered under the torrens system. Suppose he had sold

his lot to the appellee and had included in his deed of transfer the very strip of land now in question.

Could his vendee be regarded as an “innocent purchaser” of said strip? Would his vendee be an

“innocent purchaser” of said strip? Certainly not. The record of the original certificate of the appellants

precludes the possibility. Has the appellee gained any right by reason of the registration of the strip of

land in the name of his vendor? Applying the rule of notice resulting from the record of the title of the

appellants, the question must be answered in the negative. We are of the opinion that these rules are

more in harmony with the purpose of Act No. 496 than the rule contended for by the appellee. We

believe that the purchaser from the owner of the later certificate, and his successors, should be

required to resort to his vendor for damages, in case of a mistake like the present, rather than to

molest the holder of the first certificate who has been guilty of no negligence. The holder of the first

original certificate and his successors should be permitted to rest secure in their title, against one who

had acquired rights in conflict therewith and who had full and complete knowledge of their rights. The

purchaser of land included in the second original certificate, by reason of the facts contained in the

public record and the knowledge with which he is charged and by reason of his negligence, should

suffer the loss, if any, resulting from such purchase, rather than he who has obtained the first

certificate and who was innocent of any act of negligence.

The foregoing decision does not solve, nor pretend to solve, all the difficulties resulting from double

registration under the torrens system and the subsequent transfer of the land. Neither do we now

attempt to decide the effect of the former registration in the ordinary registry upon the registration

under the torrens system. We are inclined to the view, without deciding it, that the record under the

torrens system, supersede all other registries. If that view is correct then it will be sufficient, in dealing

with land registered and recorded alone. Once land is registered and recorded under the torrens

system, that record alone can be examined for the purpose of ascertaining the real status of the title

to the land.

It would be seen to a just and equitable rule, when two persons have acquired equal rights in the same

thing, to hold that the one who acquired it first and who has complied with all the requirements of the

law should be protected.

In view of our conclusions, above stated, the judgment of the lower court should be and is hereby

revoked. The record is hereby returned to the court now having and exercising the jurisdiction

heretofore exercised by the land court, with direction to make such orders and decrees in the premises

as may correct the error heretofore made in including the land in the second original certificate issued

in favor of the predecessor of the appellee, as well as in all other duplicate certificates issued.

Without any findings as to costs, it is so ordered.

Arellano, C.J., Torrens, and Araullo, JJ., concur.

THIRD DIVISION 

 DINAH C. CASTILLO,                    Petitioner,

 

 

 

- versus-

 

 

 

ANTONIO M. ESCUTIN, AQUILINA A. MISTAS,MARIETTA L. LINATOC, AND THE HONORABLE COURT OF APPEALS,

                    Respondents.

  G.R. No. 171056

 

Present:

 YNARES-SANTIAGO, J.       Chairperson,MARTINEZ,

CHICO-NAZARIO,

NACHURA, and

PERALTA, JJ.

 

 

 

Promulgated:

 

March 13, 2009

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D E C I S I O N 

 

CHICO-NAZARIO, J.:

 

 

Before this Court is a Petition for Review on Certiorari [1] under Rule 45 of the Rules of Court filed by petitioner Dinah C. Castillo seeking the reversal and setting aside of the Decision,[2] dated 18 October 2005, of the Court of Appeals in CA-G.R. SP No. 90533, as well as the Resolution,[3] dated 11 January 2006 of the same court denying reconsideration of its afore-mentioned Decision.  The Court of Appeals, in its assailed Decision, affirmed the Joint Resolution[4] dated 28 April 2004   and   Joint   Order[5] dated   20   June   2005   of   the   Office   of   the   Deputy Ombudsman for Luzon in OMB-L-A-03-0573-F and OMB-L-C-03-0728-F, dismissing petitioner   Dinah  C.   Castillo’s   complaint   for   grave   misconduct  and  violation  of Section 3(e) of Republic Act No. 3019, the Anti-Graft and Corrupt Practices Act, as amended,   against   respondent   public   officers   Antonio   M.   Escutin   (Escutin), Aquilina A. Mistas (Mistas) and Marietta L. Linatoc (Linatoc), together with private individuals Lauro S. Leviste II (Leviste) and Benedicto L. Orense (Orense).

 Petitioner is a judgment creditor of a certain Raquel K. Moratilla (Raquel), 

married   to   Roel   Buenaventura.  In   the   course   of   her   search   for   properties   to satisfy the judgment in her favor, petitioner discovered that Raquel, her mother Urbana Kalaw (Urbana), and sister Perla K. Moratilla (Perla), co-owned Lot 13713, a   parcel   of   land   consisting   of   15,000   square   meters,   situated   at   Brgy. Bugtongnapulo, Lipa City, Batangas, and covered by Tax Declaration No. 00449. 

 Petitioner set about verifying the ownership of Lot 13713.  She was able to 

secure an Order[6] dated 4 March 1999 issued by Secretary Horacio R. Morales, Jr. of the Department of Agrarian Reform (DAR) approving the application of Summit Point Golf & Country Club, Inc. for conversion of several agricultural landholdings, including   Lot   13713   owned   by   “Perla   K.   Mortilla,   et   al.”   and   covered   by   Tax Declaration No. 00449, to residential, commercial, and recreational uses.  She was also   able   to   get   from   the   Office   of   the   City   Assessor,   Lipa   City,   a 

Certification[7] stating that Lot 13713,  covered by Tax Declaration No. 00554-A, was in the name of co-owners Raquel,  Urbana, and Perla; and a certified true copy of Tax Declaration No. 00554-A itself.[8]  Lastly, the Register of Deeds of Lipa City  issued a Certification[9] attesting that Lot 13713 in the name of co-owners Raquel,  Urbana,  and Perla,  was  not  covered  by  a  certificate  of  title,  whether judicial or patent, or subject to the issuance of a Certificate of Land Ownership Award or patent under the Comprehensive Agrarian Reform Program.

 Only thereafter did petitioner proceed to levy on execution Lot 13713, and 

the public auction sale of the same was scheduled on 14 May 2002.  Sometime in May   2002,   before   the   scheduled   public   auction   sale,   petitioner   learned that Lot 13713 was  inside the Summit Point Golf and Country Club Subdivision owned   by   Summit   Point   Realty   and   Development   Corporation   (Summit Realty).  She immediately went to the Makati City office of Summit Realty to meet with its Vice President, Orense.  However, she claimed that Orense did not show her any document to prove ownership of Lot 13713 by Summit Realty, and even threatened her that the owners of Summit Realty,  the Leviste family,  was too powerful and influential for petitioner to tangle with.

 The public  auction sale pushed through on 14 May 2002,  and petitioner 

bought Raquel’s 1/3 pro-indiviso share in Lot 13713. On 4 June 2002, petitioner had the following documents, on her acquisition 

of  Raquel’s  1/3 pro-indiviso share   in  Lot  13713,   recorded  in   the  Primary  Entry Book and Registration Book of the Register of Deeds of Lipa City in accordance with Act No. 3344[10]: (a) Notice of Levy;[11] (b) Certificate of Sale;[12] (c) Affidavit of Publication;[13] and (d) Writ of Execution.[14]

 

Subsequently, petitioner was issued by the City Assessor of Lipa City Tax Declaration No. 00942-A,[15] indicating that she owned 5,000 square meters of Lot 13713, while Urbana and Perla owned the other 10,000 square meters. 

 When petitioner attempted to pay real estate taxes for her 5,000-square-

meter share in Lot 13713, she was shocked to find out that, without giving her notice, her Tax Declaration No. 00942-A was cancelled.  Lot 13713 was said to be encompassed in and overlapping with the 105,648 square meter parcel of land known as Lot 1-B, covered by Transfer Certificate of Title (TCT) No. 129642[16] and Tax   Declaration   No.   00949-A,[17] both   in   the   name   of   Francisco   Catigbac (Catigbac).  The reverse side of TCT No. 129642 bore three entries, reflecting the supposed sale of Lot 1-B to Summit Realty, to wit:

 ENTRY   NO.  184894:  SPECIAL  POWER   OF  ATTORNEY:   In   favor  of   LEONARDO  YAGIN:  For  purposes  more  particularly stipulated in the contract ratified before Atty. Ernesto M. Vergara of Lipa City as per Doc. No. 639; Page No. 29; Book No. LXXVI; Series of 1976.Date of instrument – 2-6-1976Date of inscription – 6-26-2002 at 11:20 a.m. ENTRY NO. 185833: SALE IN FAVOR OF SUMMIT POINT REALTY & DEVELOPMENT CORP: –ENTRY NO. 185834: BIR CLEARANCE: – Of the parcel of land described in this cert. of title is hereby sold and cancelled TCT No. 134609(SN-6672938) Vol. 671-A, having been issued by virtue of the aforesaid instrument ratified before Perfecto L. Dimayuga, Notary Public for Makati City as per Doc. No. 148; Page 31, Book No. LXVII, Series of 2002.Date of instrument: July 22, 2002Date of inscription: July 25, 2002 at 2:30 P.M.[18]

  

On 25 July 2002, at 2:30 p.m., TCT No. 129642 in the name of Catigbac was cancelled and TCT No. T-134609 in the name of Summit Realty was issued in its place.

 The   foregoing   incidents   prompted   petitioner   to   file   a   Complaint 

Affidavit[19] before   the   Office   of   the   Deputy   Ombudsman   for Luzon charging several public officers and private individuals as follows:

 

32.       I respectfully charge that on or about the months of June 2002   and   July   2002   and   onwards   in   Lipa   City, Atty. Antonio M.

[Escutin], the Register of Deeds of Lipa City[;] Aquilina A. Mistas, the Local Assessment Operations Officer III of the City Assessor’s Office of Lipa City[;] Marietta Linatoc, Records Clerk, Office of the City Assessor of Lipa City, who are public officers and acting in concert and conspiring with Lauro S. Leviste II and Benedicto L. Orense,   Executive   Vice-President and Vice-President, respectively[,] of Summit Point Realty and Development   Corporation   x   x   x   while   in   the   discharge   of   their administrative functions did then and there unlawfully, through evident bad   faith,   gross   inexcusable   negligence   and   with   manifest   partiality towards   Summit   caused   me   injury   in   the   sum   of P20,000,000.00   by cancelling my TD #00942-A in the Office of the City Assessor of Lipa City and   instead   issuing   in   the   name   of   Francisco   Catigbac   TC   #00949-A when   aforesaid   personalities   well   knew   that   TCT   No.   129642   was already   cancelled   and   therefore   not   legally   entitled   to   a   new   tax declaration   thereby   manifestly   favoring   Summit   Point   Realty   and Development  Corporation  who now  appears   to  be   the   successor-in-interest   of   Francisco   Catigbac,   all   to   my   damage   and   prejudice.[20] (Emphasis ours.)

 

Petitioner’s  Complaint  Affidavit  gave   rise   to  simultaneous  administrative and   preliminary   (criminal)   investigations,   docketed   as OMB-L-A-03-0573-F   and OMB-L-C-03-0728-F, respectively.

 

Petitioner   pointed   out   several   irregularities   in   the   circumstances surrounding the alleged sale of Lot 1-B to Summit Realty and in the documents evidencing the same. 

 

The supposed Deed of Absolute Sale in favor of Summit Realty executed on 22 July 2002 by Leonardo Yagin (Yagin), as Catigbac’s attorney-in-fact, appeared to  be  a  “one-way   street.”  It  did  not  express   the  desire  of   Summit  Realty,  as vendee, to purchase Lot 1-B or indicate its consent and conformity to the terms of 

the Deed.  No representative of Summit Realty signed the left margin of each and every   page   of   said   Deed.  It   also   did   not   appear   from   the   Deed   that   a representative of Summit Realty presented himself before the Notary Public who notarized the said document.  The Tax Identification Numbers of Yagin, as vendor, and Summit Realty, as vendee, were not stated in the Deed. 

 

Petitioner also averred that, being a corporation, Summit Realty could only act through its Board of Directors.  However, when the Deed of Absolute Sale of Lot  1-B was presented for  recording before the Register  of  Deeds,   it  was not accompanied by a Secretary’s  Certificate attesting to the existence of a Board Resolution which authorized said purchase by Summit Realty.  There was no entry regarding such a Secretary’s Certificate and/or Board Resolution, whether on TCT No. 129642 or TCT No. T-134609.  A Secretary’s Certificate eventually surfaced, but it was executed only on 30 July 2002, five days after TCT No. T-134609 in the name of Summit Realty was already issued.  

 

The   Deed   of   Absolute   Sale   was   presented   before   and   recorded   by   the Register of Deeds of Lipa City on 25 July 2002 at 2:30 p.m., at exactly the same date   and   time   TCT   No.   T-134609   was   issued   to   Summit   Realty.  Petitioner theorizes that for this to happen, TCT No. T-134609 was already prepared and ready even before the presentation for recording of the Deed of Absolute Sale before the Register of Deeds.

 

Moreover, Catigbac had long been dead and buried.  The agency Catigbac supposedly executed in favor of Yagin was extinguished by Catigbac’s death. Thus, petitioner argued, Yagin no longer had authority to execute on 22 July 2002 the Deed of Absolute Sale of Lot 1-B in favor of Summit Realty, making the said Deed null and void ab initio. 

 

Petitioner asserted that Summit Realty was well-aware of Catigbac’s death, having acknowledged the same in LRC Case No. 00-0376, the Petition for Issuance 

of New Owner’s Duplicate of TCT No. 181 In Lieu of Lost One, filed by Summit Realty   before   the   Regional   Trial   Court   (RTC)   of Lipa City.  During   theex parte presentation  of  evidence   in   the   latter  part  of  2000,  Orense   testified on behalf of Summit Realty that Catigbac’s property used to form part of a bigger parcel   of   land, Lot 1 of   Plan   Psu-12014,   measuring 132,975 square meters, covered by TCT No. 181 in the name of Catigbac; after Catigbac’s death, Lot 1 was informally  subdivided  into  several  parts  among his  heirs  and/or  successors-in-interest, some of whom again transferred their shares to other persons; Summit Realty   separately   bought   subdivided   parts   of   Lot   181   from   their   respective owners, with a consolidated area of 105,648 square meters, and identified as Lot 1-Bafter survey; despite the subdivision and transfer of ownership of Lot 1, TCT No. 181 covering the same was never cancelled; and the owner’s duplicate of TCT No.  181 was  lost  and the  fact  of  such  loss  was annotated at   the back of   the original  copy of  TCT No.  181 with   the  Registry  of  Deeds.  Subsequently,   in  an Order[21] dated 3 January 2001, the RTC granted the Petition in LRC Case No. 00-0376 and directed the issuance of a new owner’s duplicate of TCT No. 181 in the name of Catigbac, under the same terms and condition as in its original form.

 

Petitioner further cast doubt on the acts undertaken by Summit Realty in connection with Catigbac’s property,  purportedly without  legal  personality and capacity.  The Special Power of Attorney dated 6 February 1976 granted Yagin the right to sue on behalf of Catigbac, yet it was Summit Realty which instituted LRC Case No. 00-0376, and Yagin had no participation at all in said case.  Likewise, it was   not   Yagin,   but Orense,   who,   through   a   letter[22] dated 27   June   2001, requested the cancellation of TCT No. 181 covering Lot 1 and the issuance of a new certificate of title for Lot 1-B.  Hence, it was Orense’s request which resulted in the issuance of TCT No. 129642 in the name of Catigbac, later cancelled and replaced by TCT No. T-134609 in the name of Summit Realty.           

 

Lastly,   petitioner   questioned   why,   despite   the   cancellation   of   TCT   No. 129642 in the name of Catigbac and the issuance in its place of TCT No. T-134609 in the name of Summit Realty, it was the former cancelled title which was used as 

basis for canceling petitioner’s Tax Declaration No. 00942-A.  Tax Declaration No. 00949-A was thus still issued in the name of Catigbac, instead of Summit Realty.  

    

Piecing everything together, petitioner recounted in her Complaint Affidavit the alleged scheme perpetrated against her and the involvement therein of each of the conspirators:

 

28.       Summit Point Realty and Development Corporation went into   action   right   after   I   paid Orense a   visit   sometime   May 2002.  Summit resurrected   from   the   grave.   (sic)   Francisco   Catigbac whom they knew to be long dead to face possible litigation.  This is the height of malice and bad faith on the part of Summit through its Lauro Leviste II, the Executive Vice President and Benedicto Orense, the Vice President.  I had only in my favor a tax declaration to show my interest and   ownership   over   the   5,   000   sq.m.   of   the   subject   parcel   of land. Evidently,  Leviste  and Orense came to the desperate conclusion that   they   needed   a   TCT   which   is   a   far   better   title   than   any   tax declaration.

 

Both then methodically commenced their evil and illegal scheme by   causing   on June   26,   2002 at 11:20   a.m. the   inscription   with   the Register of Deeds of Lipa City of a purported Special Power of Attorney in favor of Leonardo Yagin (Annex “I”).  Next, the Deed of Absolute Sale (Annex “J”) was made the following month in order to make it appear that   Yaginunilaterally sold   to   Summit   the   subject   parcel   of   land purportedly   belonging   to   Francisco   Catigbac.  Since   the   latter   was already dead and realizing that the agency was already extinguished, Annex “J” was not signed or executed by Leviste or Orense.  This fact however did not deter the two from securing a BIR clearance on July 25, 2002.  Also, on this same day, July 25, 2002, Annex “J” was presented to Atty.   [Escutin]  at 2:30  p.m. simultaneously,  at  exactly   the   same time 

of 2:30 p.m. TCT No. T-134609 in Summit’s name was issued by Atty. [Escutin]   WITHOUT   benefit   of   the   submission   of   the   necessary documentation such as the Board Resolution, DAR Clearance, Revenue Tax   Receipts   for   documentary   stamps,   real   property   tax   clearance, proof   of   payment   of   transfer   tax,   tax   declaration,   articles   of incorporation,   SEC   certification,   license   to   sell   and/or   certificate   of registration   by   HLURB,   etc. Without   the   total   and   lightning   speed cooperation of Atty. [Escutin] to close his eyes to the total absence of said vital documents, the desperately needed TCT to erase my interest and ownership would not have come into existence.  Atty. [Escutin] had indeed acted in concert and in conspiracy with Leviste and Orense in producing Annex “H” and Annex “K”.

 

29.       Thereafter,   Leviste   and Orense utilized   the already cancelled TCT No. 129642 in the name of Francisco Catigbac to be the basis   in  seeking the cancellation of TD #00942A  in my name (Annex “F”).  The Tax Mapping Division of the Office of City Assessor of Lipa City opined that my 5,000 sq.m. was (sic) part and parcel of the 105,648   sq.m.   covered   by   TCT   No.   129642.  A   photocopy   of   the Certification from said division is hereto marked and attached as Annex “P”, hereof.  Aquilina Mistas, the Local Assessment Operations Officer III of the Office of the City Assessor of Lipa City then conveniently caused the   disappearance   of   my   Notice   of   Levy   and   other   supporting documents which she had personally received from me on March 13, 2002.  For her part of the conspiracy likewise, Marietta Linatoc, Records Clerk, forthwith cancelled by TD#00942-A and in lieu thereof she issued TD #00949-A in the name of Francisco Catigbac.  I dare say so because Mistas   and   Linatoc   were   presented   a cancelled TCT   as   basis   for obliterating my 5,000 sq.m.  The fact of cancellation is clearly stated on the   posterior   side   of   TCT   No.   129642.  Both   can   read.  But   the   two nevertheless proceeded with dispatch in canceling my TD, though they had ample time and opportunity to reject the request of Summit who is not even the registered owner appearing on TCT No. 129642.  Francisco 

Catigbac could not have been in front of Mistas and Linatoc because he was already six feet below the ground.  Mistas and Linatoc could have demanded   presentation   of   the   document   authorizing Summit in requesting   for   the   cancellation   of   my   TD.  Also,   they   could   have demanded   from Summit any   document   transferring   my   interest   and ownership   in   favor   of   a   third   party.  Or,   at   least,   they   could   have annotated  in Tax Declaration No. 00949-A the fact  that  I  bought my 5,000 sq.m.   from a public  auction sale  duly  conducted by  the court sheriff.  Alternatively, Linatoc and Mistas should have advisedSummit to the   effect   that   since   they   already   appear   to   be   the   owners   of   the subject parcel of land, the new tax declaration should bear their name instead.  Mistas and Linatoc indeed conspired with Summit in the illegal and unwarranted cancellation of my TD and in covering up the behind-the-scenes   activities   of Summit by   making   it   appear   that   it   was Francisco Catigbac who caused the cancellation.  Even Leonardo Yagin, the   alleged   attorney-in-fact   did   not   appear   before   Mistas   and Linatoc.  Yagin could not have appeared because he is rumored to be long   dead.  The   aforementioned   acts   of   the   two   benefitted (sic) Summit through their manifest partiality, evident bad faith and/or gross   inexcusable   negligence.  Perhaps,   there   is   some   truth   to   the rumor that Yagin is dead because he does not even have a TIN in the questioned Deed of Absolute Sale.  If  indeed Yagin is already dead or inexistent[,] the allged payment of the purchase price of P5,282,400.00 on July   25,   2002 is   a   mere   product   of   the   fertile   imagination of Orense and   Leviste.  To   dispute   this   assertion[,]   the   live   body   of Leonardo Yagin must be presented by Orense and Leviste.[23]  

 

 

After   filing   her   Affidavit   Complaint,   petitioner   attempted   to   have   the Sheriff’s   Deed   of   Final   Sale/Conveyance   of   her   5,000   square   meter pro-indiviso share   in   Lot   13713   registered   with   the   Register   of   Deeds   of   Lipa 

City.  She also sought the annotation of her Affidavit of Adverse Claim on the said 5,000 square meters on TCT No. T-134609 of Summit Realty.  

Escutin,   the  Register  of  Deeds  of  Lipa  City,   relying  on  the  finding  of Examiner Juanita H. Sta. Ana (Sta. Ana), refused to have the Sheriff’s Deed of Final Sale/Conveyance registered, since:

             The   Sheriff’s   Deed   of   Final   Sale/Conveyance   is   a   Mode   of   Transfers   (sic) ownership in favor of the Plaintiff, [Dinah] C. Castillo, (sic) However[,] it happen (sic) that the presented Tax Declaration [No.] 00942-A is already transfer (sic) in the name of the said [Dinah] C. Castillo, therefore[,] the registration of Sheriff (sic) Final Sale is no longer necessary.[24]

  

Escutin   likewise   denied   petitioner’s   request   to   have   her   Affidavit   of Adverse Claim annotated on TCT No. T-134609 on the following grounds:

 1.         The   claimants   (sic)   rights   or   interest   is   not   adverse   to   the   registered 

owner.  The   registered   owner   is   Summit   Point   Realty   and  Development   Corporation under Transfer Certificate of Title No. T-134609 of the Registry of Deeds for Lipa City.

 2.         The   records   of   the   Registry   reveals   that   the   source   of   the   rights   or 

interest of the adverse claimant is by virtue of a Levy on Execution by the Regional Trial Court Fourth Judicial Region, Branch 30, San Pablo City, in Civil Case No. SP-4489 (1996), [Dinah] C. Castillo vs. Raquel Buenaventura.  The registered owner, Summit Point Realty and   Development   Corporation   nor   its   predecessor-in-interest   are   not   the   judgment debtor or a party in the said case.  Simply stated, there is no privity of contract between them   (Consulta   No.   1044   and   1119).  If   ever,   her   adverse   claim   is   against   Raquel Buenaventura, the judgment debtor who holds no title over the property.[25]

  

Escutin   did   mention,   however,   that   petitioner   may   elevate en consulta to the Land Registration Authority (LRA) the denial of her request for registration of the Sheriff’s Deed of Final Sale/Conveyance and annotation of her adverse claim on TCT No. T-134609.  This petitioner did on 3 July 2003. 

 

While   her Consulta was   pending   before   the   LRA,   petitioner   filed   a Supplemental   Complaint   Affidavit[26] and   a   Second   Supplemental   Complaint Affidavit[27] with the Office of the Deputy Ombudsman for Luzon, bringing to its attention   the   aforementioned   developments.  In   her   Second   Supplemental Complaint   Affidavit,   petitioner   prayed   that   Sta.   Ana   be   included   as   a   co-respondent in OMB-L-A-03-0573-F and OMB-L-C-03-0728-F, averring that the latter’s actuation deprived petitioner of a factual basis for securing a new title in   her   favor   over   her   5,000   square   meter pro-indiviso share   in   Lot   13713, because   the   public   auction   sale   of   the   said   property   to   her   could   never become final without the registration of the Sheriff’s Deed.

 The   persons   charged   in   OMB-L-A-03-0573-F   and   OMB-L-C-03-0728-F 

filed their respective Counter-Affidavits. 

 

Respondent  Escutin  clarified   in  his  Counter  Affidavit   that  TCT  No.  T-134609 reflected the same date and time of entry of the Deed of Absolute Sale between Yagin (as Catigbac’s attorney-in-fact) and Summit Realty, i.e., 25 July 2002 at 2:30 p.m., in accordance with Section 56[28] of Presidential Decree No. 1529, otherwise known as the Property Registration Decree.  He emphasized that   his   duty   as   Register   of   Deeds   to   register   the   Deed   of   Absolute   Sale presented before him was purely ministerial.  If the document was legal and in due form, and there was nothing mutilated or irregular on its face, the Register of   Deeds   had  no   authority   to   inquire   into   its   intrinsic   validity   based  upon proofs aliunde.  It was not true that he allowed the registration of the Deed of Absolute   Sale   notwithstanding   the   absence   of   the   required   documents supporting the application for  registration thereof.  On the contrary,  all   the required documents such as the DAR Clearance, Bureau of Internal Revenue (BIR)  Certificate  Authorizing  Registration   (CAR),  Real  Property  Tax,  Transfer Tax, Secretary’s Certificate and Articles of Incorporation of Summit Realty were submitted.  While   it   was   true   that   the   Secretary’s   Certificate   did   not 

accompany the Deed of Absolute Sale upon the presentation of the latter for registration, Section 117 of the Property Registration Decree gives the party seeking registration five days to comply with the rest of the requirements; and only if the party should still fail to submit the same would it result in the denial of   the   registration.  The   License   to   Sell   and   the   Housing   and   Land   Use Regulatory   Board   Registration   of   Summit   Realty   are   only   required   when   a subdivision project   is  presented for   registration.  The use of  TINs  in  certain documents is a BIR requirement.  The BIR itself did not require from Yagin as vendor his TIN in the Deed of Absolute Sale, and issued the CAR even in the absence thereof.  The Register  of  Deeds,   therefore,  was only  bound by the CAR.  As to the Certification earlier issued by the Register of Deeds of Lipa City attesting that Lot 13713 in the name of co-owners Raquel, Urbana, and Perla, was not covered by any certificate of title, Escutin explained that the Register of Deeds was not technically equipped to determine whether a cadastral lot number was within a titled property or not.  Lastly, Escutin denied conspiring or participating in the cancellation of petitioner’s Tax Declaration No. 00942-A for,   as   Register   of   Deeds,   he   was   not   concerned   with   the   issuance   (or cancellation) of tax declarations.   

 Respondent Mistas, the Assistant City Assessor for Administration of the 

Office of the City Assessor, Lipa City, disputed petitioner’s allegations that she personally  received from petitioner copies  of   the Notice of  Levy and other supporting   documents,   and   that   she   caused   the   disappearance thereof.  Although she admitted that said documents were shown to her by petitioner,  she referred petitioner to the Receiving Clerk,  Lynie Reyes,  who accordingly   received   the   same.   Mistas   maintained   that   she   was   not   the custodian of records of the Office and she should not be held responsible for the missing documents.  She opined that petitioner’s documents could have been   among   those   misplaced   or   destroyed   when   the   Office   of   the   City Assessor was flooded with water leaking from the toilet of the Office of the 

City Mayor.  As Assistant City Assessor for Administration, Mistas identified her main   function   to   be   the   control   and   management   of   all   phases   of administrative matters and support.  She had no hand in the cancellation of petitioner’s Tax Declaration No. 00942-A, and the issuance of Catigbac’s Tax Declaration No. 00949-A for such function pertained to another division over which she did not exercise authority.  Thus, it was also not within her function or authority to demand the presentation of certain documents to support the cancellation   of   petitioner’s   Tax   Declaration   No.   00942-A   or   to   cause   the annotation of petitioner’s interest on Catigbac’s Tax Declaration No. 00949-A.

 Respondent Linatoc averred that as Local Assessment Operation Officer 

II of the Office of the City Assessor, Lipa City, she was in charge of safekeeping and updating the North District Records.  With respect to the transfer of a tax declaration from one name to another, her duty was limited only to the act of preparing the new tax declaration and assigning it a number,  in  lieu of the cancelled   tax   declaration.  It   was   a   purely   ministerial   duty.  She   had   no authority   to   demand   the   presentation   of   any   document   or   question   the validity  of   the  transfer.  Neither  was   it  within  her   jurisdiction to determine whether petitioner’s interest should have been annotated on Catigbac’s Tax Declaration No. 00949-A.  Examining the documents presented in support of the transfer of the tax declaration to another’s name was a function belonging to other divisions of the Office of the City Assessors.  The flow of work, the same as in any other ordinary transaction, mandated her to cancel petitioner’s Tax   Declaration   No.   00942-A,   and   to   prepare   and   release   Catigbac’s   Tax Declaration No. 00949-A after the transfer had been reviewed and approved by other divisions of the Office.  It was also not true that TCT No. 129642 in the name of Catigbac was already cancelled when  it  was presented before the Office of the City Assessors; the photocopy of said certificate of title with the Office bore no mark of cancellation.            

 

Leviste and Orense, the private individuals charged with the respondent public   officers,   admitted   that   they   were   corporate   officers   of   Summit Realty.  They related that Summit Realty bought a parcel  of  land measuring 105,648 square meters, later identified as Lot 1-B, previously included in TCT No. 181, then specifically covered by TCT No. 129642, both in the name of Catigbac.  As a result of such purchase, ownership of Lot 1-B was transferred from Catigbac to Summit Realty.  Summit Realty had every reason to believe in good faith that said property was indeed owned by Catigbac on the basis of the  latter’s  certificate  of  title  over   the same.  Catigbac’s   right  as   registered owner of Lot 1-B under TCT No. 181/No. 129642, was superior to petitioner’s, which   was   based   on   a   mere   tax   declaration.  Leviste   and Orense rebutted petitioner’s   assertion   that   the   Deed   of   Absolute   Sale   between   Yagin,   as Catigbac’s attorney-in-fact,  and Summit Realty was a “one-way street.”  The Deed   was   actually   signed   on   the   left   margin   by   both   Yagin   and   the representative of Summit Realty.  The inadvertent failure of the representative of Summit Realty  to sign the  last  page of the Deed and of both parties to indicate their TINs therein did not invalidate the sale, especially since the Deed was signed by witnesses attesting to its due execution.  Questions as regards the scope of Catigbac’s Special Power of Attorney in favor of Yagin and the effectivity of the same after Catigbac’s death can only be raised in an action directly   attacking   the   title   of   Summit   Realty   over   Lot   1-B,   and   not   in   an administrative case and/or preliminary investigation before the Ombudsman, which   constituted   a   collateral   attack   against   said   title.  Leviste and Orense further explained that since the owner’s duplicate of TCT No. 181 was   lost   and   was   judicially   ordered   replaced   only   on 3   January   2001, entries/inscriptions   were   necessarily   made   thereon   after   said   date.  As to Orense’s   failure   to   show   petitioner   any   document   proving   ownership of Lot 1-B by Summit Realty when the latter paid him a visit, it was not due to the lack of such documents, but because of petitioner’s failure to establish her right   to   peruse   the   same.  Orense also   denied   ever   threatening   petitioner 

during   their   meeting.  Finally,   according   to   Leviste   and Orense,   petitioner’s allegations   were   based   on   mere   conjectures   and   unsupported   by evidence.  That particular acts were done or not done by certain public officials was already beyond the control of Leviste and Orense, and just because they benefited   from   these   acts   did   not   mean   that   they   had   a   hand   in   the commission or omission of said public officials.     

 After more exchange of pleadings, OMB-L-A-03-0573-F and OMB-L-C-03-

0728-F were finally submitted for resolution. In  a   Joint  Resolution[29] dated 28 April  2004,   the Office of   the Deputy 

Ombudsman for Luzon gave more credence to respondent Escutin’s defenses, as opposed to petitioner’s charges against him:

 Going to the charges against respondent Escutin, he convincingly explained that 

he   allowed   the   registration   of   the   allegedly   defective   Deed   of   Sale   because   he,   as Register  of  Deeds,  has  no power   to  look   into   the  intrinsic  validity   [of]   the contract presented   to   him   for   registration,   owing   to   the   ministerial   character   of   his function.  Moreover,  as   sufficiently  explained by   said   respondent,  all   the  documents required for the registration of the Deed of Sale were submitted by the applicant.

 We likewise find said respondent’s explanation satisfactory that Section 56 of 

P.D. 1529 mandates that the TCT bear the date of registration of the instrument on which the said TCT’s issuance was based.  It is for this reason that TCT 134609 bears the same date and time as the registration of the Deed of Absolute Sale, which deed served as basis for its issuance.

 As to his denial to register [herein petitioner’s] Affidavit of Adverse Claim and 

Sheriff’s Certificate of Final Sale, through the issuance by the Registry of Deeds Examiner Juanita H. Sta. Ana, of the 29 June 2003 Order denying registration thereof, such matter had been raised by herein [petitioner] in a letter-consulta to the Administrator of the Land Registration Authority (LRA) on 03 July 2003.  As the criminal and administrative charges respecting this issue is premised, in part, on a matter still pending with the LRA, we find it premature to make a finding on the same.

 It   is   for  the same reason that we deny the motion contained in the Second 

Supplemental Complaint Affidavit praying for the inclusion, as additional respondent, of 

Juanita H. Sta. Ana, who is impleaded solely on the basis of having signed, by authority of Escutin, the 29 July 2003 Order of denial of [petitioner’s] application for registration.

 Finally,   respondent   Escutin   was   able   to   successfully   demonstrate,   through 

Consulta 2103 dated 25 July 1994, wherein the denial of registration by the Examiner of the Registry of Deeds of Quezon City was upheld by the LRA Administrator, that the (sic) it  was  practice   in  the  different  Registries   that  Examiners  are given authority  by  the Register to sign letters of denial.[30]

  

The Office of the Deputy Ombudsman for Luzon declared in the same Joint   Resolution   that   there   was   no   basis   to   hold   respondents   Mistas   and Linatoc administratively or criminally liable:

 In   this   respect,   this   Office   notes   that   while   [herein   petitioner]   alleges   that 

Aquilina Mistas caused the disappearance of the Notice of Levy and other supporting documents   received   from  [petitioner]   on   13   March  2003   when  she   applied   for   the issuance of a Tax Declaration in her favor, she did not present her receiving copy thereof showing that  it  was Mistas who received said documents from her.  Neither did she show that Mistas is the employee responsible for record safekeeping.

 Next,   we   find,   as   convincingly   answered,   the   allegation   that   respondent 

Marietta   Linatoc   cancelled   Tax   Declaration   No.   00942-A   and   issued   Tax   Declaration 00949-Q (sic) on the basis of a cancelled Transfer Certificate of Title upon the behest of Summit [Realty], which was not the registered owner of the property.

 Respondent  Linatoc,  meeting squarely  [petitioner’s]  allegation, admits  having 

physically cancelled Tax Declaration No. 00942-A and having prepared a new declaration covering the same property in Catigbac’s [name], as mandated by the flow of work in the City Assessor’s Office.  However,  she denies having the authority or discretion to evaluate the correctness and sufficiency of the documents supporting the application for the issuance of the Tax Declaration, arguing that her official function is limited to the physical preparation of a new tax declaration, the assignment of a new tax declaration number and the cancellation of the old tax declaration, after the application had passed the other divisions of the City Assessor’s Office.

 Verily, [petitioner] failed to establish that respondent Mistas and Linatoc, are 

the ones officially designated to receive applications for  issuance of Tax Declaration, evaluate the sufficiency of the documents supporting such applications, and on the basis of the foregoing recommend or order the cancellation of an existing Tax Declaration and 

direct the annotation of any fact affecting the property and direct the issuance of a new tax declaration covering the same property.

 In   fact,   there   is   even   a   discrepancy   as   to   the   official   designation   of   said 

respondents.  While [petitioner] impleads Mistas, in her capacity as Local Assessment Officer, and Linatoc, in her capacity as Records Clerk, Mistas, in her counter-affidavit, alleges  a  different  designation,   i.e.,  Assistant  City  Assessor   for  Administration,  while Linatoc claims to be the Local Assessment Operation Officer  II  of the City Assessor’s Office.

 With the scope of work of said respondents not having been neatly defined by 

[petitioner], this Office cannot make a definitive determination of their liability for Grave Misconduct and violation of Section 3(e) of R.A. No. 3019, which charges both relate to the performance or discharge of Mistas’ and Linatoc’s official duties.[31]

  

Neither  did   the  Office  of   the  Deputy  Ombudsman   for Luzon find  any probable cause to criminally charge private individuals Leviste and Orense for the following reasons:

 Anent private respondents, with the alleged conspiracy to unlawfully cause the 

transfer of the title of [herein petitioner’s] property to Summit sufficiently explained by respondent Register of Deeds, such allegation against private respondents loses a legal leg to stand on.

 Inasmuch as [petitioner] was not able to sufficiently outline the official functions 

of   respondents   Mistas   and   Linatoc   to   pin   down   their   specific   accountabilities,   the imputation   that   private   respondent   (sic)   conspired   with   said   public   respondents respecting the cancellation of Tax Declaration No. 00942-A is likewise stripped of any factual and legal bases.[32]

 As   to   whether   petitioner   was   indeed   unlawfully   deprived   of   her   5,000 

square meter property, which issue comprised the very premise of OMB-L-A-03-0573-F and OMB-L-C-03-0728-F, the Office of the Deputy Ombudsman for Luzon ruled that such matter was not within its jurisdiction and should be raised in a civil action before the courts of justice.

 In the end, the Office of the Ombudsman decreed:

 WHEREFORE premises considered, it is respectfully recommended that : (1) the 

administrative   case   against   public   respondents   ANTONIO   M.   ESCUTIN,   AQUILINA   A. MISTAS and MARIETA L. LINATOC be DISMISSED, for lack of substantial evidence; and (2) the criminal case against the same respondents including private respondent LAURO S. LEVISTE II and BENEDICTO L. ORENSE, be DISMISSED, for lack of probable cause.[33]

  

In   a   Joint   Order[34] dated 20   June   2005,   the   Office   of   the   Deputy Ombudsman for Luzon denied petitioner’s Motion for Reconsideration. 

 

The Office of the Deputy Ombudsman for Luzon,  in  its  Joint  Order,  took notice  of   the  Resolution  dated 17  December  2002 of   the  LRA  in  Consulta  No. 3483, which involved circumstances similar to those in petitioner’s case.  The LRA distinguished between two systems of land registration: one is the Torrenssystem for registered lands under the Property Registration Decree, and the other is the system of registration for unregistered land under Act No. 3344 (now Section 113 of   the Property  Registration Decree).  These systems are  separate  and distinct from each other.  For documents involving registered lands, the same should be recorded under the Property Registration Decree.  The registration, therefore, of an   instrument   under   the   wrong   system   produces   no   legal   effect.  Since   it appeared   that   in   Consulta   No.   3483,   the   registration   of   the Kasulatan ng Sanglaan,   the  Certificate  of  Sale  and  the Affidavit  of  Consolidation was  made under Act No. 3344, it did not produce any legal effect on the disputed property, because   the   said   property   was   already   titled   when   the   aforementioned documents were executed and presented for registration, and their registration should have been made under the Property Registration Decree. 

 

Furthermore, the Office of the Deputy Ombudsman for Luzon, in the same Joint   Order,   took   into   account   petitioner’s   withdrawal   of   her   appeal en consultabefore the LRA of the denial by the Register of Deeds of her request for registration   of   the   Sheriff’s   Deed   of   Final   Sale/Conveyance   and   Affidavit   of Adverse   Claim,   which   prompted   the   LRA   Administrator   to   declare the consulta moot  and academic.  For  want  of  a  categorical  declaration on the 

registerability of petitioner’s documents from the LRA, the competent authority to rule on the said matter, there could be no basis for a finding that respondent public   officers   could   be   held   administratively   or   criminally   liable   for   the   acts imputed to them. 

 Petitioner sought recourse from the Court of Appeals by filing a Petition 

for Review under Rule 43 of the Rules of Court challenging the 28 April 2004 Joint  Resolution and 20 June 2005 Joint  Order  of   the Office of   the Deputy Ombudsman for Luzon.[35]  The appeal was docketed as CA-G.R. SP No. 90533.

 The Court of Appeals promulgated its Decision[36] on 18 October 2005, 

also   finding   no   reason   to   administratively   or   criminally   charge respondents. Essentially, the appellate court adjudged that petitioner can not impute corrupt motives to respondents’ acts:

 Without evidence showing that respondents received any gift, money or other pay-off or that they were induced by offers of such, the Court cannot impute any taint of direct corruption   in   the   questioned   acts  of   respondents.  Thus,   any   indication   of   intent   to violate   the   laws   or   of   flagrant   disregard   of   established   rule   may   be   negated   by respondents’   honest   belief   that   their   acts   were   sanctioned   under   the   provisions   of existing   law   and   regulations.  Such   is   the   situation   in   the   case   at   bar.  Respondent Register of Deeds acted in the honest belief that the agency recognized by the court in LRC Case No. 00-0376 between the registered owner Francisco Catigbac and Leonardo Yagin   subsisted  with   respect   to   the   conveyance   or   sale   of   Lot   1   to  Summit  as   the vendee, and that the Special Power of Attorney and Deed of Absolute Sale presented as evidence during said proceedings are valid and binding.  Hence, respondent Escutin was justified   in   believing   that   there   is   no   legal   infirmity   or   defect   in   registering   the documents and proceeding with the transfer of title of Lot 1 in the name of the new ownerSummit.  On   the   other   hand,   respondent   Linatoc   could   not   be   held administratively liable for effecting the cancellation in the course of ordinary flow of work in the City Assessor’s Office after the documents have undergone the necessary evaluation and verification by her superiors.[37]

  

The Court of Appeals referred to the consistent policy of the Supreme Court not to interfere with the exercise by the Ombudsman of his investigatory 

power.  If   the   Ombudsman,   using   professional   judgment,   finds   the   case dismissible,  the Court shall  respect such findings,  unless clothed with grave abuse of discretion.  The appellate court pronounced that there was no grave abuse   of   discretion   on   the   part   of   the   Office   of   the   Deputy   Ombudsman for Luzon in dismissing petitioner’s Complaint Affidavit against respondents.

 Hence, the dispositive portion of the Decision of the Court of Appeals 

reads: 

WHEREFORE, premises considered, the present petition is hereby DISMISSED for lack   of   merit.  The   challenged   Joint   Resolution   dated April   28,   2004 and   Joint   Order datedJune   20,   2005 in   OMB-L-A-03-0573-F   and   OMB-L-C-03-0728-F   are   hereby AFFIRMED.[38]

  

In  its  Resolution dated 11 January 2006, the Court of Appeals  denied petitioner’s   Motion   for   Reconsideration   for   failing   to   present   new   matter which the appellate court had not already considered in its earlier Decision.

 Petitioner   now   comes   before   this   Court   via   the   instant   Petition   for 

Review on Certiorari, with the following assignment of errors: I. 

THE   HONORABLE   COURT   OF   APPEALS   PATENTLY   ERRED   IN   AFFIRMING   THE CANCELLATION   OF   THE   TAX   DECLARATION   00942   OF   PETITIONER   IN   VIOLATION   OF SECTION 109 OF PRESIDENTIAL DECREE 1529, OTHERWISE KNOWN AS THE PROPERTY REGISTRATION ACT (sic); 

II. 

THE HONORABLE COURT OF APPEALS PATENTLY ERRED IN RULING THAT RESPONDENTS COULD NOT BE HELD ADMINISTRATIVELY LIABLE FOR UNDULY FAVORING SUMMIT TO THE DAMAGE AND PREJUDICE OF PETITIONER.[39]

  

The Petition at bar is without merit. 

As   to   the  first   issue,  petitioner   invokes  Section 109  of   the  Property, Registration Decree which provides:

 SEC. 109.  Notice and replacement of lost duplicate certificate.  – In case of loss 

or theft of an owner’s duplicate certificate of title, due notice under oath shall be sent by the owner or by someone in his behalf to the Register of Deeds of the province or city   where   the   land   lies   as   soon   as   the   loss   or   theft   is   discovered.  If   a   duplicate certificate is lost or destroyed, or cannot be produced by a person applying for the entry of  a  new certificate   to  him or   for   the   registration of  any  new  instrument,  a   sworn statement of the fact of such loss or destruction may be filed by the registered owner or other person in interest and registered.

 Upon the petition of the registered owner or other person in interest, the court 

may, after notice and due hearing, direct the issuance of a new duplicate certificate, which shall  contain a memorandum of  the fact  that   it   is   issued  in  place of   the  lost duplicate certificate, but shall in all respects be entitled to like faith and credit as the original  duplicate,  and  shall   thereafter  be   regarded  as   such   for  all  purposes  of   this decree. 

  

Petitioner argues that the RTC, in LRC Case No. 00-0376, only ordered the  issuance of a new owner’s duplicate of  TCT No. 181  in  lieu of the  lost one. However, respondents did not only issue a new owner’s duplicate of TCT No.   181,   but   also   cancelled   petitioner’s   Tax   Declaration   No.   00942-A   and issued   in   its   place   Tax   Declaration   No.   00949-A   in   the   name   of Catigbac.  Respondents did not even annotate petitioner’s existing right over 5,000 square meters of Lot 1-B or notify petitioner of the cancellation of her Tax   Declaration   No.   00942-A.  Petitioner   maintains   that   a   new   owner’s duplicate of title is not a mode of acquiring ownership, nor is  it a mode of losing one.  Under Section 109 of the Property Registration Decree, the new duplicate of title was issued only to replace the old; it cannot cancel existing titles. 

 

Petitioner’s position on this issue rests on extremely tenuous arguments and befuddled reasoning. 

 Before anything else, the Court must clarify that a title is different from 

a certificate of title.  Title is generally defined as the lawful cause or ground of possessing that which is ours.  It is that which is the foundation of ownership of property, real or personal.[40]  Title, therefore, may be defined briefly as that which   constitutes   a   just   cause   of   exclusive   possession,   or   which   is   the foundation of ownership of property.[41]  Certificate of title, on the other hand, is a mere evidence of ownership; it is not the title to the land itself.[42]  Under the Torrens system, a certificate of title may be an Original Certificate of Title, which   constitutes   a   true   copy   of   the   decree   of   registration;   or   a   Transfer Certificate of Title, issued subsequent to the original registration.

 Summit Realty acquired its title to Lot 1-B, not from the issuance of the 

new owner’s duplicate of TCT No. 181, but from its purchase of the same from Yagin,   the   attorney-in-fact   of   Catigbac,   the   registered   owner   of   the   said property.  Summit   Realty   merely   sought   the   issuance   of   a   new   owner’s duplicate of TCT No. 181 in the name of Catigbac so that it could accordingly register thereon the sale in its favor of a substantial portion of Lot 1 covered by said certificate, later identified as Lot 1-B.  Catigbac’s title to Lot 1-B passed on by sale to Summit Realty, giving the latter the right to seek the separation of the said portion from the rest of Lot 1 and the issuance of a certificate of title specifically covering the same.  This resulted in the issuance of TCT No. 129642  in   the  name of  Catigbac,  covering Lot 1-B,  which  was  subsequently cancelled and replaced by TCT No. T-134609 in the name of Summit Realty.

 Petitioner’s reliance on Section 109 of the Property Registration Decree 

is totally misplaced.  It provides for the requirements for the issuance of a lost 

duplicate   certificate   of   title.  It   cannot,   in   any   way,   be   related   to   the cancellation of petitioner’s tax declaration.

 The   cancellation   of   petitioner’s   Tax   Declaration   No.   00942-A   was   not 

because of the issuance of a new owner’s duplicate of TCT No. 181, but of the fact that Lot 1-B, which encompassed the 5,000 square meters petitioner lays claim to, was already covered by TCT No. 181 (and subsequently by TCT No. 129642) in the name of  Catigbac.  A  certificate  of  title   issued   is  an  absolute  and  indefeasible evidence   of   ownership   of   the   property   in   favor   of   the   person   whose   name appears therein. It is binding and conclusive upon the whole world.[43]  All persons must   take   notice,   and   no   one   can   plead   ignorance   of   the   registration.[44] Therefore,   upon   presentation   of   TCT   No.   129642,   the   Office   of   the   City Assessor must recognize the ownership of Lot 1-B by Catigbac and  issue  in his name a tax declaration for the said property.  And since Lot 1-B is already covered by   a   tax   declaration   in   the   name   of   Catigbac,   accordingly,   any   other   tax declaration  for   the same property  or  portion thereof   in   the name of  another person, not supported by any certificate of title, such that of petitioner, must be cancelled; otherwise, the City Assessor would be twice collecting a realty tax from different persons on one and the same property.       

 As   between   Catigbac’s   title,   covered   by   a   certificate   of   title,   and 

petitioner’s title, evidenced only by a tax declaration, the former is evidently far superior and is, in the absence of any other certificate of title to the same property,   conclusive   and   indefeasible   as   to   Catigbac’s   ownership   of Lot 1-B.  Catigbac’s  certificate  of  title   is  binding  upon  the  whole  world,   including respondent public  officers and even petitioner herself.  Time and again,  the Court has ruled that tax declarations and corresponding tax receipts cannot be used to prove title to or ownership of a real property inasmuch as they are not conclusive evidence of the same.[45] Petitioner acquired her title to the 5,000 square meter property from Raquel, her judgment debtor who, it is important to note, likewise only had a tax declaration to evidence her title.  In addition, the Court of Appeals aptly observed that, “[c]uriously, as to how and when 

petitioner’s   alleged   predecessor-in-interest,   Raquel   K.   Moratilla   and   her supposed co-owners acquired portions of Lot 1 described as Lot 13713 stated in TD No. 00449, petitioner had so far remained utterly silent.”[46]

 Petitioner’s allegations of defects or irregularities in the sale of Lot 1-B 

to   Summit   Realty   by   Yagin,   as   Catigbac’s   attorney-in-fact,   are   beyond   the jurisdiction of the Office of the Deputy Ombudsman for Luzon to consider.  It must be remembered that Summit Realty had already acquired a certificate of title, TCT No. T-134609, in its name over Lot 1-B, which constitutes conclusive and  indefeasible  evidence  of   its  ownership  of   the  said  property  and,   thus, cannot   be   collaterally   attacked   in   the   administrative   and   preliminary investigations conducted by the Office of the Ombudsman for Luzon.  Section 48 of the Property Registration Decree categorically provides that a certificate of title shall not be subject to collateral attack.  It cannot be altered, modified, or cancelled except  in a direct proceeding in accordance with  law.  For this same reason, the Court has no jurisdiction to grant petitioner’s prayer in the instant   Petition   for   the   cancellation   of   TCT   No.   T-134609   in   the   name   of Summit Realty.      

 

Which now brings the Court to the second issue raised by petitioner on the administrative liability of respondents. 

 Before   the   Court   proceeds   to   tackle   this   issue,   it   establishes   that 

petitioner’s Complaint Affidavit before the Office of the Ombudsman for Luzon gave rise to two charges: (1) OMB-L-A-03-0573-F involved the administrative charge for Gross Misconduct against respondent public officers; and (2) OMB-L-C-03-0728-F concerned the criminal charge for violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act[47] against respondent public officers and   private   individuals   Leviste   and   Orense.  The   Office   of   the   Deputy Ombudsman   for Luzon,   affirmed   by   the   Court   of   Appeals,   dismissed   both 

charges.  In   the   Petition  at  bar,  petitioner  only  assails   the   dismissal   of   the administrative   charge   for   grave   misconduct   against   respondent   public officers.  Since petitioner did not raise as an issue herein the dismissal by the Office of the Deputy Ombudsman for Luzon, affirmed by the Court of Appeals, of   the   criminal   charge   against   respondent   public   officers   for   violation   of Section 3(e) of the Anti-Graft and Corrupt Practices Act, the same became final and executory.[48] 

 In Domingo v. Quimson,[49] the   Court   adopted   the   well-written   report 

and recommendation of its Clerk of Court on the administrative matter then pending and involving the charge of gross or serious misconduct:

 "Under Section 36,  par.   (b)   [1]  of  PD No. 807,  otherwise known as the Civil 

Service Decree of the Philippines, 'misconduct' is a ground for disciplinary action. And under MC No. 8, S. 1970, issued by the Civil Service Commission on July 28, 1970, which sets the 'Guidelines in the Application of Penalties in Administrative Cases and other Matters Relative Thereto,' the administrative offense of 'grave misconduct' carries with it the maximum penalty of dismissal from the service (Sec. IV-C[3], MC No. 8, S. 1970). But the term 'misconduct' as an administrative offense has a well defined meaning. It was defined in Amosco vs. Judge Magno,  Adm. Mat. No. 439-MJ, Res. September 30, 1976, as referring 'to a transgression of some established and definite rule of action, more particularly, unlawful behavior or gross negligence by the public officer.'  It   is a misconduct 'such as affects the performance of his duties as an officer and not such only as effects his character as a private individual.' In the recent case of Oao vs. Pabato, etc., Adm. Mat. No. 782-MJ, Res. July 29, 1977, the Court defined 'serious misconduct'  as follows:

 ‘Hence,   even   assuming   that   the   dismissal   of   the   case   is 

erroneous, this would be merely an error of judgment and not serious misconduct. The term `serious misconduct’ is a transgression of some established   and   definite   rule   of   action   more   particularly,   unlawful behavior of gross negligence by the magistrate.  It   implies a wrongful intention and not a mere error of judgment. For serious misconduct to exist,   there  must  be   reliable  evidence  showing   that   the   judicial  acts complained of were corrupt or inspired by intention to violate the law, or   were   a   persistent   disregard   of   well-known   legal   rules.   We   have previously ruled that negligence and ignorance on the part of a judge 

are   inexcusable   if   they   imply   a   manifest   injustice   which   cannot   be explained by a reasonable interpretation. This is not so in the case at bar.’” (Italics supplied.)

  

To   reiterate,   for   grave   misconduct   to   exist,   there   must   be   reliable evidence showing that the acts complained of were corrupt or inspired by an intention to violate the law, or were a persistent disregard of well-known legal rules.  Both the Office of the Deputy Ombudsman for Luzon and the Court of Appeals   found   that   there   was   no   sufficient   evidence   to   substantiate petitioner’s charge of grave misconduct against respondents.  For this Court to reverse the rulings of the Office of the Deputy Ombudsman for Luzon and the Court of Appeals,  it  must necessarily review the evidence presented by the parties and decide on a question of fact. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact.[50] 

 Factual issues are not cognizable by this Court in a Petition for Review 

under Rule 45 of the Rules of Court.  In order to resolve this issue, the Court would   necessarily   have   to   look   into   the   probative   value   of   the   evidence presented  in   the proceedings  below.   It   is  not   the  function of   the Court   to reexamine or reevaluate the evidence all over again.  This Court is not a trier of facts, its jurisdiction in these cases being limited to reviewing only errors of law  that  may  have  been  committed  by   the   lower   courts  or  administrative bodies   performing   quasi-judicial   functions.  It   should   be   emphasized   that findings made by an administrative body, which has acquired expertise, are accorded not  only  respect  but  even finality  by the Court.   In  administrative proceedings, the quantum of evidence required is only substantial.[51]

 Absent a clear showing of grave abuse of discretion, the Court shall not 

disturb   findings   of   fact.   The   Court   cannot   weigh   once   more   the   evidence submitted,  not  only  before   the  Ombudsman,  but  also  before   the  Court  of Appeals.  Under Section 27 of Republic Act No. 6770, findings of fact by the 

Ombudsman   are   conclusive,   as   long   as   they   are   supported   by   substantial evidence.[52]  Substantial evidence is the amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.[53] 

 The Court  finds no reason to disturb the finding of  the Office of  the 

Deputy Ombudsman for Luzon and the Court of Appeals that respondents did not commit gross misconduct.  Evident from the 28 April 2004 Joint Resolution of   the   former   and   the 18   October   2005 Decision   of   the   latter   is   that   they arrived at such findings only after a meticulous consideration of the evidence submitted by the parties. 

 Respondents were able to clearly describe their official functions and to 

convincingly explain that they had only acted in accordance therewith in their dealings  with  petitioner   and/or  her   documents.  Respondents  also  enjoy   in their favor the presumption of regularity in the performance of their official duty.  The   burden   of   proving   otherwise   by   substantial   evidence   falls   on petitioner, who failed to discharge the same. 

 From the very beginning, petitioner was unable to identify correctly the 

positions  held  by   respondents  Mistas  and Linatoc  at   the  Office of   the City Assessor. How then could she even assert that a particular action was within or without   their   jurisdiction to perform?  While   it  may be true that  petitioner should have at least been notified that her Tax Declaration No. 00942-A was being   cancelled,   she   was   not   able   to   establish   that   such   would   be   the responsibility of respondents Mistas or Linatoc.  Moreover, petitioner did not present   statutory,   regulatory,   or   procedural   basis   for   her   insistence   that respondents should have done or not done a particular act.  A perfect example was her assertion that respondents Mistas and Linatoc should have annotated her   interest   on   Tax   Declaration   No.   00949-A   in   the   name   of Catigbac.  However,   she   failed   to   cite   any   law   or   rule   which   authorizes   or 

recognizes the annotation of an adverse interest on a tax declaration.  Finally, absent any reliable evidence, petitioner’s charge that respondents conspired with one another and with corporate officers of Summit Realty is nothing more than speculation, surmise, or conjecture.  Just because the acts of respondents were consistently favorable to Summit Realty does not mean that there was a concerted   effort   to   cause   petitioner   prejudice.  Respondents’   actions   were only   consistent   with   the   recognition   of   the   title   of   Catigbac   over Lot 1-B, transferred  by   sale   to  Summit  Realty,   registered  under   the Torrens system, and accordingly evidenced by certificates of title.          

WHEREFORE,  premises  considered,   the   instant  Petition  for  Review  is 

hereby DENIED.  The Decision dated 18 October 2005 and Resolution dated 11 January   2006 of   the   Court   of   Appeals   in   CA-G.R.   SP   No.   90533   are hereby AFFIRMED in toto.  Costs against the petitioner Dinah C. Castillo.

 SO ORDERED.

EN BANC

[G.R. No. 103727.  December 18, 1996]

INTESTATE ESTATE OF THE LATE DON MARIANO SAN PEDRO Y ESTEBAN, represented by its HEIR-JUDICIAL ADMINISTRATOR, ENGRACIO F. SAN PEDRO, petitioner-appellant, vs. COURT OF APPEALS (Second Division), AURELIO OCAMPO, DOMINADOR D. BUHAIN, TERESA C. DELA CRUZ, respondents-appellees.

[G.R. No. 106496.  December 18, 1996]

ENGRACIO SAN PEDRO, CANDIDO GENER, ROSA PANTALEON, VICENTE PANTALEON, ELEUTERIO PANTALEON, TRINIDAD SAN PEDRO, RODRIGO SAN PEDRO, RICARDO NICOLAS, FELISA NICOLAS, and LEONA SAN PEDRO, petitioners, vs. THE HONORABLE COURT OF APPEALS, (Sixteenth Division) and REPUBLIC OF THE PHILIPPINES, respondents.

D E C I S I O N

HERMOSISIMA, JR., J.:

The most fantastic land claim in the history of the Philippines is the subject of controversy in these two consolidated cases.  The heirs of the late Mariano San Pedro y Esteban laid claim and have been laying claim to the ownership of, against third persons and the Government itself, a total land area of approximately 173,000 hectares or “214,047 quiniones,”[1] on the basis of a Spanish title, entitled “Titulo de Propriedad Numero 4136” dated April 25, 1894.  The claim, according to the San Pedro heirs, appears to cover lands in the provinces of Nueva Ecija, Bulacan, Rizal, Laguna and Quezon; and such Metro Manila cities as Quezon City, Caloocan City, Pasay City, City of Pasig and City of Manila, thus affecting in general lands extending from Malolos, Bulacan to the City Hall of Quezon City and the land area between Dingalan Bay in the north and Tayabas Bay in the south.[2]

Considering the vastness of the land claim, innumerable disputes cropped up and land swindles and rackets proliferated resulting in tedious litigation in various trial courts, in the appellate court and in the Supreme Court, [3] in connection therewith.

We have had the impression that our decisions in Director of Forestry, et al. v. Muñoz, 23 SCRA 1183 [1968]; Antonio, et al. v. Barroga, et al., 23 SCRA 357 [1968];Carabot, et al. v. Court of Appeals, et al., 145 SCRA 368 [1986]; Republic v. Intermediate Appellate Court, et al., 186 SCRA 88 [1990]; Widows and Orphans Association, Inc. (WIDORA) v. Court of Appeals, et al., 212 SCRA 360 [1992]; NAPOCOR v. Court of Appeals, et al., 144 SCRA 318 [1986]; Republic v. Court of Appeals, et al., 135 SCRA 156 [1985]; and Director of Lands v. Tesalona, 236 SCRA 336 [1994][4] terminated the controversy as to ownership of lands covered by Spanish Land Titles, for it is the rule that, once this Court, as the highest Tribunal of the land, has spoken, there the matter must rest:

“It is withal of the essence of the judicial function that at some point, litigation must end.  Hence, after the procedures and processes for lawsuits have been undergone, and the modes of review set by law have been exhausted, or terminated, no further ventilation of the same subject matter is allowed.  To be sure, there may be, on the part of the losing parties, continuing disagreement with the verdict, and the conclusions therein embodied.  This is of no moment, indeed, is to be expected; but, it is not their will, but the Court’s, which must prevail; and, to repeat, public policy demands that at some definite time, the issues must be laid to rest and the court’s dispositions thereon accorded absolute finality.”[5] [Cited cases omitted]

It is, therefore, to the best interest of the people and the Government that we render judgment herein writing finis to these controversies by laying to rest the issue of validity of the basis of the estate’s claim of ownership over this vast expanse of real property.

The following facts are pertinent in the resolution of these long drawn-out cases:

G.R. NO. 103727

G.R No. 103727, an appeal by certiorari, arose out of a complaint[6] for recovery of possession and/or damages with a prayer for a writ of preliminary injunction.  This was dismissed by the Regional Trial Court, National Capital Judicial Region, Branch 104, Quezon City in its decision[7] dated July 7, 1989, the dispositive portion[8] of which reads:

“WHEREFORE, judgment is hereby rendered, dismissing the complaint against the defendants Aurelio Ocampo, Dominador Buhain and Teresa dela Cruz and ordering plaintiff to pay each of the herein defendants, the sum of FIVE THOUSAND PESOS (P5,000.00) as and for attorney’s fees, and to pay the costs of suit.”

The said complaint for recovery of possession of real property and/or reconveyance with damages and with a prayer for preliminary injunction was filed on August 15, 1988 by Engracio San Pedro as heir-judicial administrator of the “Intestate Estate of Don Mariano San Pedro y Esteban” against Jose G. De Ocampo, Aurelio Ocampo, MARECO, Inc., Rey Antonio Noguera, Teresa C. dela Cruz, Gaudencio R. Soliven, Diomedes Millan, Carmen Rayasco, Dominador D. Buhain, Mario D. Buhain, Jose D. Buhain, Arestedes S. Cauntay, Manuel Chung and Victoria Chung Tiu (El Mavic Investment & Development Corporation), Capitol Hills Realty Corporation and Jose F. Castro.  The complaint was docketed as Civil Case No. Q-88-447 in Branch 104, Regional Trial Court of Quezon City.

In the complaint, it was alleged, among others: (1) that Engracio San Pedro discovered that the aforenamed defendants were able to secure from the Registry of Deeds of Quezon City titles to portions of the subject estate, particularly Transfer Certificates of Title Nos. 1386, 8982, 951975-951977, 313624, 279067, 1412, 353054, 372592, 149120, 86404, 17874-17875, all emanating from Original Certificate of Title No. 614 [9] and Transfer Certificates of Title Nos. 255544 and 264124, both derivatives of Original Certificate of Title No. 333; (2) that the aforesaid defendants were able to acquire exclusive ownership and possession of certain portions of the subject estate in their names through deceit, fraud, bad faith and misrepresentation; (3) that Original Certificates of Title Nos. 614 and 333 had been cancelled by and through a final and executory decision dated March 21, 1988 in relation to letter recommendations by the Bureau of Lands, Bureau of Forest Development and the Office of the Solicitor General and also in relation to Central Bank Circulars dated April 7, 1971, April 23, 1971, September 12, 1972 and June 10, 1980; and (4) that the issue of the existence, validity and genuineness of Titulo Propriedad No. 4136 dated April 25, 1894 which covers the subject estate had been resolved in favor of the petitioner estate in a decision dated April 25, 1978 by the defunct Court of First Instance, Branch 1 of Baliwag, Bulacan pertaining to a case docketed as Special Proceeding No. 312-B.[10]

Summons were served on only five of the aforementioned defendants, namely, Aurelio Ocampo, MARECO, Inc., Teresita G. dela Cruz, Dominador Buhain and Manuel Chung and Victoria Chung Tiu.[11]

On February 7, 1989, the lower court ordered the dismissal of the complaint against Mareco, Inc. for improper service of summons and against Manuel Chung and Victoria Chung Tiu for lack of cause of action considering that the registered owner of the parcel of land covered by TCT No. 86404 is El Mavic Investment and Development Co., Inc., not Manuel Chung and Victoria Chung Tiu.[12]

Trial on the merits proceeded against the private respondents Ocampo, Buhain and Dela Cruz.

On July 7, 1989, the lower court rendered judgment dismissing the complaint based on the following grounds: (a) Ocampo, Buhain and Dela Cruz are already the registered owners of the parcels of land covered by Torrens titles which cannot be defeated by the alleged Spanish title, Titulo Propriedad No. 4136, covering the subject estate; and (b) the decision of the Court of First Instance of Bulacan entitled “In the Matter of the Intestate Estate of the late Don Mariano San Pedro y Esteban” specifically stated in its dispositive portion that all lands which have already been legally and validly titled under the Torrens system by private persons shall be excluded from the coverage of Titulo Propriedad No. 4136.[13]

The motion for reconsideration thereof was denied,[14] and so, the petitioner estate interposed an appeal with the Court of Appeals.  On January 20, 1992, the appeal was dismissed[15] for being unmeritorious and the lower court’s decision was affirmed with costs against the petitioner estate.  The appellate court ratiocinated:

(1)    neither the Titulo Propriedad No. 4136 nor a genuine copy thereof was presented in the proceeding below;

(2)    the illegible copy of the Titulo presented in court was not registered under the Torrens System hence, it cannot be used as evidence of land ownership;

(3)   the CFI decision invoked by petitioner estate in its favor expressly excluded from the Titulo titled lands of private individuals;

(4)    the Titulo is inferior to that of the registered titles of Ocampo, Buhain and Dela Cruz as correctly ruled by the lower court;

(5)   there is no evidence showing that OCT No. 614 from which titles of Ocampo, Buhain and Dela Cruz originated was already cancelled, hence, the lower court did not err in not declaring the same as null and void.[16]

Not having obtained a favorable judgment on appeal, the petitioner estate, on March 16, 1992, filed the present petition[17] docketed as G. R. No. 103727.

G.R. NO. 106496

G.R No. 106496, a petition for review on certiorari, began as a petition[18] for letters of administration over the intestate estate of the late Mariano San Pedro y Esteban which eventually resulted to an Order[19] dated November 17, 1978 declaring inter alia, Titulo de Propriedad No. 4136 as null and void and of no legal force and effect.

The dispositive portion[20] of the said Order reads:

“WHEREFORE, this Court so orders that:

1)      The Decision dated April 25, 1978 is reconsidered and set aside.

2)      Titulo de Propriedad No. 4136 is declared null and void and of no legal force and effect and that therefore no rights could be derived therefrom.

3)      All orders approving the sales, conveyances, donations or any other transactions involving the lands covered by Titulo de Propriedad No. 4136 are declared invalidated, void and of no force and effect.

4)      All lands covered by Titulo de Propriedad No. 4136 are excluded from the inventory of the estate of the late Mariano San Pedro y Esteban.

5)      The heirs, agents, privies or anyone acting for and in behalf of the estate of the late Mariano San Pedro y Esteban are enjoined from representing or exercising any acts of possession or ownership or from disposing in any manner portions of all the lands covered by Titulo de Propriedad No. 4136 and to immediately vacate the same.

6)      Engracio San Pedro and Justino Benito as co-administrators submit in Court within twenty days their final accounting and inventory of all real and personal properties of the estate which had come into their possession or knowledge under oath.

7)      This case is hereby re-opened, to allow movants-intervenors to continue with the presentation of their evidence in order to rest their case.

The consideration and approval of the administrator’s final accounting and inventory of the presentation of movants-intervenors’ evidence as well as the consideration of all other incidents are hereby set on December 22, 1978 at 8:30 a. m.”

The aforementioned petition for letters of administration over the intestate estate of the late Mariano San Pedro y Esteban was filed on December 29, 1971 with the defunct Court of First Instance of Bulacan, Fifth Judicial District, Branch IV, Baliuag, Bulacan.  The petition docketed as Sp. Proc. No. 312-B was initiated by Engracio San Pedro and Justino Z. Benito who sought to be appointed as administrator and co-administrator, respectively.

On February 29, 1972, after the jurisdictional facts were established, evidence for the petitioners was received by the lower court without any opposition.[21]

On March 2, 1972, then Presiding Judge Juan F. Echiverri issued an Order appointing Engracio San Pedro as Administrator of the subject estate.[22]

On March 11, 1972, the Court issued letters of administration in favor of Engracio San Pedro upon posting of a bond in the sum of Ten Thousand Pesos (P10,000.00).[23]

On February 7, 1974, Administrator Engracio San Pedro was ordered to furnish copies of the letters of administration and other pertinent orders approving certain dispositions of the properties of the estate to the following entities:

(a)     The Commanding GeneralPhilippine ConstabularyCamp Crame, Quezon City

(b)     The Solicitor GeneralManila

(c)     The Government Corporate CounselA. Mabini St., Manila

(d)     The City Mayors of Quezon City & Caloocan

(e)     The Governors of Rizal, Quezon and Bulacan

(f)      The City Treasurers of Quezon City andCaloocan

(g)     The Provincial Treasurers of Quezon, Bulacanand Rizal

(h)     The PHHC, Diliman, Quezon City

(i)      The PAHRRA Quezon Boulevard, Quezon City

(j)      The Municipal Treasurers of the variousmunicipalities in which properties of the estate are

located; and

(k)     Office of Civil Relations, Camp Crame, QuezonCity and Camp Aguinaldo, Quezon City.[24]

The above Order was issued so as to protect the general public from any confusion brought about by various persons who had been misrepresenting themselves as having been legally authorized to act for the subject estate and to sell its properties by virtue thereof.

On August 30, 1976, a Motion for Intervention and an Opposition to the Petition was filed by the Republic of the Philippines alleging, inter alia:

“4.    That under Presidential Decree No. 892, dated February 16, 1976, Spanish titles like the TITULO is absolutely inadmissible and ineffective as proof of ownership in court proceedings, except where the holder thereof applies for land registration under Act 496, which is not true in the proceedings at bar;

“5.    That no less than the Supreme Court had declared TITULO DE PROPIEDAD NO. 4136 as invalid;

“6.    That, moreover, the late Don Mariano San Pedro y Esteban and/or his supposed heirs have lost whatever rights of ownership they might have had to the so-called Estate on the ground of inaction, laches and/or prescription;

“7.    That, accordingly, there is no estate or property to be administered for purposes of inventory, settlement or distribution in accordance with law, and all the inventories so far submitted, insofar as they embraced lands within the TITULO, are deemed ineffective and cannot be legally considered; and

“8.    That the Republic of the Philippines has a legal interest in the land subject matter of the petition considering that, except such portions thereof had been (sic) already the subject of valid adjudication or disposition in accordance with law, the same belong in State ownership.”[25]

On February 15, 1977, the Republic filed a Motion to Suspend Proceedings.[26]

On February 16, 1977, the Republic’s Opposition to the Petition for Letters of Administration was dismissed by means of the following Order issued by Judge Benigno Puno:

“WHEREFORE, for lack of jurisdiction to determine the legal issues raised, the Court hereby DISMISSES the ‘Opposition’ dated August 30, 1976, filed by the Office of the Solicitor General; likewise, for lack of merit, the Motion to Suspend Proceedings dated February 15, 1977, filed by the Office of the Solicitor General is DENIED.

The administrator Engracio San Pedro and the co-administrator Justino Z. Benito are ordered to furnish the office of the Solicitor General all copies of inventories already filed in Court within ten (10) days from notice hereof.”[27]

On March 9, 1977, a motion for reconsideration was filed by the Republic.[28]

On April 25, 1978, the lower court then presided over by Judge Agustin C. Bagasao, rendered a 52-page decision, the dispositive portion of which reads:

“WHEREFORE, judgment is hereby rendered:

(a)     Declaring the existence, genuineness and authenticity of Titulo de Propriedad No. 4136 of the Registry of Deeds of Bulacan, issued on April 29, 1984, in the name of the deceased Don Mariano San Pedro y Esteban, covering a total area of approximately 214,047 quiniones or 173,000 hectares, situated in the Provinces of Bulacan, Rizal, Quezon, Quezon City and Caloocan City;

(b)     Declaring Engracio San Pedro, Candido Gener, Santiago Gener, Rosa Pantaleon, Vicente Pantaleon, Eleuterio Pantaleon, Trinidad San Pedro, Rodrigo San Pedro, Ricardo Nicolas, and Teresa Nicolas, as the true and lawful heirs of the deceased Don Mariano San Pedro y Esteban and entitled to inherit the intestate estate left by the said deceased, consisting of the above-mentioned tract of private land covered and described by said above-mentioned Titulo de Propriedad No. 4136 of the Registry of Deeds of Bulacan, excluding therefrom: (a) all lands which have already been legally and validly titled under the Torrens System, by private persons, or the Republic of the Philippines, or any of its instrumentalities or agencies; (b) all lands declared by the government as reservations for public use and purposes; (c) all lands belonging to the public domain; and, (d) all portions thereof which had been sold, quitclaimed and/or previously excluded by the Administrator and duly approved by a final order of the Court, except those which may hereafter be set aside, after due consideration on a case to case basis, of various motions to set aside the said Court order which approved the said sales, quitclaims, and/or exclusions;

(c)     The designation of Atty. Justino Z. Benito as co-administrator, is hereby revoked to take effect immediately, to obviate any confusion in the administration of the Estate, and to fix the responsibilities of administration to the co-heir Administrator, Engracio San Pedro, whose appointment as such is hereby confirmed. The said co-administrator Justino Z. Benito is hereby ordered to render his final accounting of his co-administration of the Estate, within thirty (30) days from receipt of copy hereof;

(d)     The Co-Heir-Administrator, Engracio San Pedro is hereby ordered to amass, collate, consolidate and take possession of all the net estate of the deceased Don Marino San Pedro y Esteban, as well as all other sets and credits lawfully belonging to the estate and/or to take appropriate legal action to recover the same in the proper Courts of Justice, government offices or any appropriate forum; and to pay all taxes or charges due from the estate to the Government, and all indebtedness of the estate, and thereafter, to submit a project of partition of the estate among the lawful heirs as herein recognized and declared.

It is, however, strongly recommended to His Excellency, President Ferdinand E. Marcos that, to avoid the concentration of too much land to a few persons and in line with the projected urban land reform program of the government, corollary to the agricultural land reform program of the New Society, the above intestate estate of the late Don Mariano San Pedro y Esteban should be expropriated or purchased by negotiated sale by the government to be used in its human settlements and low cost housing projects.

No Costs.

SO ORDERED.”[29]

On May 17, 1978, the Republic moved for a reconsideration of the above decision:[30]

On June 5, 1978, administrator Engracio San Pedro filed a Manifestation and Petition for the Inhibition of the then newly appointed Presiding Judge Oscar Fernandez. On July 12,1978, after the Republic filed its Reply to the Petition for Inhibition, Judge Fernandez denied the said petition.[31]

After hearings were conducted on the Republic’s Motion for Reconsideration, Judge Fernandez issued the aforestated Order[32] dated November 17, 1978 which, in essence, set aside Judge Bagasao’s decision dated April 25, 1978 by declaring Titulo de Propriedad No. 4136 as null and void and of no legal force and effect, thus, excluding all lands covered by

Titulo de Propriedad No. 4136 from the inventory of the estate of the late Mariano San Pedro y Esteban.

The petitioners-heirs of the late Mariano San Pedro y Esteban appealed to the Court of Appeals and alleged that the lower court did not act with impartiality when it granted the Republic’s motion for reconsideration which was merely pro forma, thereby overturning a prior declaration by the same court of the existence, genuineness and authenticity of Titulo de Propriedad No. 4136 in the name of the deceased Mariano San Pedro.[33]

On March 11, 1992, the Court of Appeals dismissed the appeal of the petitioners-heirs.[34] In affirming the assailed Order dated November 17, 1978, the appellate court focused its discussion solely on the issue of whether or not the lower court erred in declaring Titulo de Propriedad No. 4136 null and void.  The appellate court ruled that the petitioners-heirs failed to controvert the Republic’s claim that Titulo de Propriedad No. 4136 is invalid on the following bases; (a) non-production of the original of the subject title; (b) inadmissibility of the photostat copies of the said title; and (c) non-registration of the subject Spanish title under Act No. 496 (Land Registration Act) as required by Presidential Decree No. 892 (Discontinuance of the Spanish Mortgage System of Registration and of the Use of Spanish Titles as Evidence in Land Registration Proceedings).

The petitioners-heirs moved for a reconsideration of the Court of Appeals’ decision by invoking certain cases wherein the validity of Titulo de Propriedad No. 4136 had been allegedly recognized.  The Court of Appeals refused to be swayed and denied the motion for reconsideration for lack of merit.[35]

Hence, the herein petition,[36] docketed as G. R. No. 106496, was filed on September 18, 1992.

After the parties filed their respective pleadings in G.R. Nos. 103727 and 106496, this Court resolved to consolidate both cases on September 15, 1994.[37]

While these cases were pending before us, several parties filed separate motions for intervention which we denied on different occasions for lack of merit.

In G.R. No. 103727, the grounds relied upon for the grant of the petition are as follows:

“I. That petitioner-appellant as plaintiff in Civil Case No. Q-88-447, RTC, Branch 104 was denied due process of law due to gross negligence of lawyer, which respondent court grossly failed to take cognizance of.

II.  That the respondent court committed grave abuse of discretion tantamount to lack of jurisdiction in not remanding the case for trial and in affirming the lower court’s null and void judgment.”[38]

In G.R. No. 106496, the petitioners-heirs present the following assignment of errors, to wit:

“First. Respondent Court of Appeals affirmed the appealed order which resolved a question of title or ownership over which the lower court as an intestate court has no jurisdiction and over the vigorous and repeated objections of the petitioners.[39]

Second.  Respondent Court of Appeals erred in upholding the order of Judge Fernandez setting aside the order and decision of Judge Puno and Bagasao; Judge Fernandez thereby acted as an appellate court reviewing, revising, amending or setting aside the order and decision of Judges of equal rank.[40]

Third.  Respondent Court of Appeals has no jurisdiction to uphold the order of Judge Fernandez who without jurisdiction, set aside the order of Judge Puno and the decision of Judge Bagasao, both of which were already final.[41]

Fourth. Respondent Court of Appeals was unmindful of the fact that Judge Fernandez was appointed by President Marcos to reverse Judge Bagasao, regardless of the evidence, thereby unmindful that petitioners were denied the cold neutrality of an impartial tribunal.[42]

Fifth.  Respondent Court of Appeals erred in not considering the evidence presented before Judges Echiverri, Puno and Bagasao and merely adopted the order of Judge Fernandez who never received a single piece of evidence, notwithstanding the 1906 Guido title over Hacienda Angono in Binangonan, Rizal, the boundary owner stated therein being Don Mariano San Pedro y Esteban, and the November 1991 en banc decision of the Supreme Court upholding the Guido title.”[43]

Of paramount importance over and above the central issue of the probative value of the petitioners’ Spanish title in these cases is the propriety of the lower court’s resolution of the question of ownership of the subject San Pedro estate in the special proceedings case.  Thus, before we address ourselves to the issue of whether or not petitioners’ Titulo de Propriedad No. 4136 is null and void and of no legal force and effect, it is best that we first determine whether or not the lower court, acting as a probate court, in the petition for letters of administration, committed grave abuse of discretion amounting to lack of jurisdiction in settling the issue of ownership of the San Pedro estate covered by Titulo Propriedad No. 4136.

Petitioners-heirs, in G.R. No. 106496, on the one hand, contend that the lower court, then CFI, Bulacan, Branch IV, had no jurisdiction as an “intestate court”,[44] to resolve the question of title or ownership raised by the public respondent Republic of the Philippines, through the Office of the Solicitor General in the intestate proceedings of the estate of Mariano San Pedro y Esteban.[45]

The public respondent, on the other hand, invoking its sovereign capacity as parens patriae, argues that petitioners’ contention is misplaced considering that when the Republic questioned the existence of the estate of Mariano San Pedro y Esteban, the lower court became duty-bound to rule on the genuineness and validity of Titulo de Propriedad 4136 which purportedly covers the said estate, otherwise, the lower court in the intestate proceedings would be mistakenly dealing with properties that are proven to be part of the State’s patrimony or improperly included as belonging to the estate of the deceased.[46]

A probate court’s jurisdiction is not limited to the determination of who the heirs are and what shares are due them as regards the estate of a deceased person.  Neither is it confined to the issue of the validity of wills.  We held in the case of Mañingat v. Castillo,[47] that “the main function of a probate court is to settle and liquidate the estates of deceased persons either summarily or through the process of administration.”  Thus, its function necessarily includes the examination of the properties, rights and credits of the deceased so as to rule on whether or not the inventory of the estate properly included them for purposes of distribution of the net assets of the estate of the deceased to the lawful heirs.

In the case of  Trinidad v. Court of Appeals,[48] we stated, thus:

“x x x questions of title to any property apparently still belonging to estate of the deceased maybe passed upon in the Probate Court, with the consent of all the parties,  without prejudice to third persons x x x”

Parenthetically, questions of title pertaining to the determination prima facie of whether certain properties ought to be included or excluded from the inventory and accounting of the estate subject of a petition for letters of administration, as in the intestate proceedings of the estate of the late Mariano San Pedro y Esteban, maybe resolved by the probate court.  In this light, we echo our pronouncement in the case of Garcia v. Garcia[49]that:

“x x x The court which acquired jurisdiction over the properties of a deceased person through the filing of the corresponding proceedings, has supervision and control over the said properties, and under the said power, it is its

inherent duty to see that the inventory submitted by the administrator appointed by it contains all the properties, rights and credits which the law requires the administrator to set out in his inventory.  In compliance with this duty, the court has also inherent power to determine what properties, rights and credits of the deceased should be included in or excluded from the inventory.  Should an heir or person interested in the properties of a deceased person duly call the court’s attention to the fact that certain properties, rights or credits have been left out in the inventory, it is likewise the court’s duty to hear the observations, with power to determine if such observations should be attended to or not and if the properties referred to therein belong prima facie to the intestate, but no such determination is final and ultimate in nature as to the ownership of the said properties.”[50] [Underscoring Supplied]

In view of these disquisitions of this Court, we hold that the lower court did not commit any reversible error when it issued the Order dated November 17, 1978 which set aside Judge Bagasao’s decision dated April 25, 1978 and declared Titulo de Propriedad No. 4136 as null and void, consequently excluding all lands covered by the said title from the inventory of the estate of the late Mariano San Pedro y Esteban.

A corollary issue sought to be ventilated by the petitioners-heirs as regards the assailed Order of November 17, 1978 is the impropriety of Judge Fernandez’ act of granting the motion for reconsideration filed by the public respondent Republic since, Judge Fernandez did not personally hear the intestate case.  Petitioners thus dubbed him as a “reviewing judge.”  By setting aside the Decision dated April 25, 1978 of his predecessors in CFI, Branch IV, Baliuag, Bulacan, namely, Judge Benigno Puno and Judge Agustin C. Bagasao, respectively, Judge Fernandez, acting as a “reviewing judge,” proceeded without authority and/or jurisdiction.[51]

There is no question that, barring any serious doubts as to whether the decision arrived at is fair and just, a newly appointed judge who did not try the case can decide the same as long as the record and the evidence are all available to him and that the same were taken into consideration and thoroughly studied.  The “reviewing judge” argument of the petitioners-heirs has no leg to stand on considering that “the fact that the judge who penned the decision did not hear a certain case in its entirety is not a compelling reason to jettison his findings and conclusion inasmuch as the full record was available to him for his perusal.”[52] In the case at bar, it is evident that the 41-page Order dated November 17, 1978 of Judge Fernandez bespeaks of a knowledgeable and analytical discussion of the rationale for reconsidering and setting aside Judge Bagasao’s Decision dated April 25, 1978.

Considering the definiteness of our holding in regard to the correctness of Judge Fernandez’ disposition of the case, i.e., the issuance by the lower court of the assailed Order of November 17, 1978, we now focus on the core issue of whether or not the lower court in G.R. No. 106496 committed reversible error in excluding from the inventory of the estate of the deceased Mariano San Pedro y Esteban all lands covered by Titulo de Propriedad No. 4136 primarily on the ground that the said title is null and void and of no legal force and effect.  Juxtaposed with this is the issue of whether or not the appellate court, in both cases, G.R. Nos. 103727 and 106496, erred in not recognizing Titulo de Propriedad No. 4136 as evidence to prove ownership by the late Mariano San Pedro of the lands covered thereby.

It is settled that by virtue of Presidential Decree No. 892 which took effect on February 16, 1976, the system of registration under the Spanish Mortgage Law was abolished and all holders of Spanish titles or grants should cause their lands covered thereby to be registered under the Land Registration Act[53] within six (6) months from the date of effectivity of the said Decree or until August 16, 1976.[54] Otherwise, non-compliance therewith will result in a re-classification of their lands.[55] Spanish titles can no longer be countenanced as indubitable evidence of land ownership.[56]

Section 1 of the said Decree provides:

“SECTION 1. The system of registration under the Spanish Mortgage Law is discontinued, and all lands recorded under said system which are not yet covered by Torrens title shall be considered as unregistered lands.

All holders of Spanish titles or grants should apply for registration of their lands under Act No. 496, otherwise known as the Land Registration Act, within six (6) months from the effectivity of this decree.  Thereafter, Spanish titles cannot be used as evidence of land ownership in any registration proceedings under the Torrens system.

Hereafter, all instruments affecting lands originally registered under the Spanish Mortgage Law may be recorded under Section 194 of the Revised Administrative Code, as amended by Act. 3344.”

The Whereas clauses of the aforesaid Decree specify the underlying policies for its passage, to wit:

“WHEREAS, fraudulent sales, transfers, and other forms of conveyances of large tracts of public and private lands to unsuspecting and unwary buyers appear to have been perpetrated by unscrupulous persons claiming ownership under Spanish titles or grants of dubious origin;

WHEREAS, these fraudulent transactions have often resulted in conflicting claims and litigations between legitimate title holders, bona fide occupants or applicants of public lands, on the one hand, and the holders of, or person claiming rights under the said Spanish titles or grants, on the other, thus creating confusion and instability in property ownership and threatening the peace and order conditions in the areas affected;

WHEREAS, statistics in the Land Registration Commission show that recording in the system of registration under the Spanish Mortgage Law is practically nil and that this system has become obsolete;

WHEREAS, Spanish titles to lands which have not yet been brought under the operation of the Torrens system, being subject to prescription, are now ineffective to prove ownership unless accompanied by proof of actual possession;

WHEREAS, there is an imperative need to discontinue the system of registration under the Spanish Mortgage Law and the use of Spanish titles as evidence in registration proceedings under the Torrens system”;

In the case of Director of Lands v. Heirs of Isabel Tesalona, et al., [57] we took cognizance of this Decree and thus held that caution and care must be exercised in the acceptance and admission of Spanish titles taking into account the numerous fake titles that have been discovered after their supposed reconstitution subsequent to World War II.

In both cases, petitioners-heirs did not adduce evidence to show that Titulo de Propriedad 4136 was brought under the operation of P.D. 892 despite their allegation that they did so on August 13, 1976. [58] Time and again we have held that  a mere allegation is not evidence and the party who alleges a fact has the burden of proving it.[59] Proof of compliance with P.D. 892 should be the Certificate of Title covering the land registered.

In the petition for letters of administration, it was a glaring error on the part of Judge Bagasao who rendered the reconsidered Decision dated April 25, 1978 to have declared the existence, genuineness and authenticity of Titulo de Propriedad No. 4136 in the name of the deceased Mariano San Pedro y Esteban despite the effectivity of P.D. No. 892. Judge Fernandez, in setting aside Judge Bagasao's decision, emphasized that Titulo de Propriedad No. 4136, under P.D. 892, is inadmissible and ineffective as evidence of private ownership in the special proceedings case.  He made the following observations as regards the Titulo, to wit:

"The Solicitor General, articulating on the dire consequences of recognizing the nebulous titulo as an evidence of ownership underscored the fact that

during the pendency of this case, smart speculators and wise alecks had inveigled innocent parties into buying portions of the so-called estate with considerations running into millions of pesos.

Some, under the guise of being benign heroes even feigned donations to charitable and religious organizations, including veterans' organizations as smoke screen to the gargantuan fraud they have committed and to hood wink further other gullible and unsuspecting victims.”[60]

In the same light, it does not escape this Court’s onomatopoeic observation that the then heir-judicial administrator Engracio San Pedro who filed the complaint for recovery of possession and/or reconveyance with damages in G.R. No. 103727 on August 15, 1988 invoked Judge Bagasao’s Decision of April 25, 1978 in support of the Titulo’s validity notwithstanding the fact that, by then, the said Decision had already been set aside by Judge Fernandez’ Order of November 17, 1978.  We are in accord with the appellate courts’ holding in G.R. No. 103727 insofar as it concludes that since the Titulo was not registered under Act No. 496, otherwise known as the Land Registration Act, said Titulo is inferior to the registered titles of the private respondents Ocampo, Buhain and Dela Cruz.

This Court can only surmise that the reason for the non-registration of the Titulo under the Torrens system is the lack of the necessary documents to be presented in order to comply with the provisions of P.D. 892.  We do not discount the possibility that the Spanish title in question is not genuine, especially since its genuineness and due execution have not been proven.  In both cases, the petitioners-heirs were not able to present the original of Titulo de Propriedad No. 4136 nor a genuine copy thereof.  In the special proceedings case, the petitioners-heirs failed to produce the Titulo despite a subpoena duces tecum (Exh. “Q-RP”) to produce it as requested by the Republic from the then administrators of the subject intestate estate, Engracio San Pedro and Justino Benito, and the other interested parties.  As an alternative to prove their claim of the subject intestate estate, the petitioners referred to a document known as “hypoteca” (the Spanish term is `hipoteca’) allegedly appended to the Titulo.  However, the said hypoteca was neither properly identified nor presented as evidence.  Likewise, in the action for recovery of possession and/or reconveyance with damages, the petitioners-heirs did not submit the Titulo as part of their evidence.  Instead, only an alleged illegible copy of the Titulo was presented.  (Exhs. “C-9” to “C-19”).

The Best Evidence Rule as provided under Rule 130, section 2 of the Rules of Court is stated in unequivocal terms. Subparagraphs (a) and (b) of the said Rule read:

“SEC. 2. - Original writing must be produced; exceptions. - There can be no evidence of a writing the contents of which is the subject of inquiry, other than the original writing itself, except in the following cases:

(a)     When the original has been lost, destroyed, or cannot be produced in court;

(b)     When the original is in the possession of the party against whom the evidence is offered, and the latter fails to produce it after reasonable notice;"

x x x                                       x x x                                x x x

Sections 4 and 5 of the same Rule further read:

“SEC. 4.  Secondary evidence when original is lost or destroyed. --- When the original writing has been lost or destroyed, or cannot be produced in court, upon proof of its execution and loss or destruction or unavailability, its contents may be proved by a copy, or by a recital of its contents in some authentic document, or by the recollection of witnesses.”

SEC. 5. Secondary evidence when original is in adverse party’s custody. --- If the writing be in the custody of the adverse party, he must have reasonable notice to produce it.  If after such notice and after satisfactory proof of its existence, he fails to produce the writing, the contents thereof may be proved as in the case of its loss.  But the notice to produce it is not necessary where the writing is itself a notice, or where it has been wrongfully obtained or withheld by the adverse party.”

Thus, the court shall not receive any evidence that is merely substitutionary in its nature, such as photocopies, as long as the original evidence can be had.  In the absence of a clear showing that the original writing has been lost or destroyed or cannot be produced in court, the photocopy submitted, in lieu thereof, must be disregarded, being unworthy of any probative value and being an inadmissible piece of evidence.[61]

Hence, we conclude that petitioners-heirs failed to establish by competent proof the existence and due execution of the Titulo.  Their explanation as to why the original copy of the Titulo could not be produced was not satisfactory.  The alleged contents thereof which should have resolved the issue as to the exact extent of the subject intestate estate of the late Mariano San Pedro were not distinctly proved.  In the case of Ong Hing Po v. Court of Appeals,[62] we pointed out that:

“Secondary evidence is admissible when the original documents were actually lost or destroyed.  But prior to the introduction of such secondary evidence, the proponent must establish the former existence of the document.

The correct order of proof is as follows: existence; execution; loss; contents.  This order may be changed if necessary in the discretion of the court.[63]

In upholding the genuineness and authenticity of Titulo de Propriedad No. 4136, Judge Bagasao, in his decision, relied on: (1) the testimony of the NBI expert, Mr. Segundo Tabayoyong, pertaining to a report dated January 28, 1963 denominated as “Questioned Documents Report No. 230-163”; (2) a photostat copy of the original of the Titulo duly certified by the then Clerk of Court of the defunct Court of First Instance of Manila; and (3) the hipoteca registered in the Register of Deeds of Bulacan on December 4, 1894.

Judge Fernandez, in his November 1978 Order which set aside Judge Bagasao’s April 1978 decision correctly clarified that the NBI report aforementioned was limited to the genuineness of the two signatures of Alejandro Garcia and Mariano Lopez Delgado appearing on the last page of the Titulo, not the Titulo itself.  When asked by the counsel of the petitioners-heirs to admit the existence and due execution of the Titulo, the handling Solicitor testified:

x x x   x x x                           x x x

ATTY. BRINGAS:

With the testimony of this witness, I would like to call the distinguished counsel for the government whether he admits that there is actually a titulo propriedad 4136.

COURT:

Would you comment on that Solicitor Agcaoili?

ATTY. AGCAOILI:

We are precisely impugning the Titulo and I think the question of counsel is already answered by witness.  The parties have not yet established the due existence of the titulo.

ATTY. BRINGAS:

We are constrained to ask this matter in order to be candid about the question.  The witness is a witness for the government, so with the testimony of this witness for the government to the effect that there is actually in existence Titulo Propiedad 4136; we are asking the question candidly to the government counsel whether he is prepared to state that there is really in existence such Titulo Propiedad 4136.

ATTY. AGCAOILI:

We are now stating before this Court that there was such a document examined by the NBI insofar as the signatures of Alejandro Garcia and Manuel Lopez Delgado are concerned and they are found to be authentic.”[64]

The following significant findings of Judge Fernandez further lend credence to our pronouncement that the Titulo is of dubious validity:

“x x x the NBI in its Questioned Document Report No. 448-977 dated September 2, 1977 (Exhibit `O-RP’) concluded that the document contained material alterations as follows:

a)      On line 15 of ‘p. 1, Title’ and on line 5 of ‘p. 2, Title,’ the word ‘Pinagcamaligan’ was written after ‘Pulo;’

b)           On line 16, ‘p. 1, Title,’ ‘un’ was converted to ‘mil;’

c)           On Line 18, ‘p. 1, Title,’ ‘mil’ was written at the end of ‘tres’ in ‘tres mil;’

d)           On line 19 of ‘p. 1, Title,’ a semblance of ‘mil’ was written after ‘setentay tres;’

e)           On line 6, ‘p. 2, Title,’ ‘un’ was formed to a semblance of ‘uni;’ and

f)            On line 8, ‘p. 2, Title,’ ‘un’ was formed to ‘mil.’

The plain and evident purpose was definitely to enlarge the area of the Titulo.  According to Mr. Tabayoyong of the NBI, there are still “pieces of black ashes around the rings of the portions which are indications of burnings.” The burnings were made on the very portions where there were previous erasures, alterations and intercalations. Understandably, the burnings were done to erase traces of the criminal act.”[65]

In the case of National Power Corporation v. Court of Appeals, et al.[66] Justice Ameurfina Melencio-Herrera, in reinstating the trial court’s judgment therein, sustained the finding that:

“x x x The photostatic copy (in lieu of the lost original) of the Spanish title in the name of Mariano San Pedro shows obvious alterations and intercalations in an attempt to vastly increase the area and change the location of the land described in the original title x x x.”

Anent the inadmissibility as evidence of the photostat copy of the Titulo, we sustain the lower court’s analysis, as affirmed by the appellate court, viz:

“To begin with, the original of Titulo de Propiedad No. 4136 was never presented in Court.  Upon request of the Government, a subpoena duces tecum (Exhibit “Q-RP’”) was issued to the two administrators, Engracio San Pedro and Justino Benito as well as to other interested parties to produce the

original of Titulo de Propriedad No. 4136.  But no one produced the Titulo. What the parties did was to pass the buck to one another.

Without any plausible explanation at all on as to why the original could not be produced, the Court cannot take cognizance of any secondary evidence.

It was explained that the Titulo after changing hands, finally fell into the hands of a certain Moon Park of Korea but who later disappeared and that his present whereabouts could not be known.

Strangely enough, despite the significance of the titulo, no serious efforts on the part of the claimants-heirs were exerted to retrieve this document of vital importance despite the Court order to produce it in order to determine its authenticity.

It would not be enough to simply say that Moon Park’s whereabouts are unknown or that there are not enough funds to locate him.  The only logical conclusion would be that the original would be adverse if produced.”[67]

As regards the hipoteca which allegedly defines the metes and bounds of the subject intestate estate, the petitioners-heirs have not established the conditions required by law for their admissibility as secondary evidence to prove that there exists a document designated as Titulo de Propriedad No. 4136.  Hence, the same acquires no probative value.[68]

At this juncture, our decision dated June 28, 1968 in Director of Forestry, et al. v. Hon. Emmanuel M. Muñoz, as Judge of the Court of First Instance of Bulacan, Branch I, et al.[69] is enlightening.  In said case, private respondent, Pinaycamaligan Indo-Agro Development Corporation, Inc. (PIADECO), claimed to be the owner of some 72,000 hectares of land located in the municipalities of Angat, Norzagaray and San Jose del Monte, province of Bulacan, and in Antipolo and Montalban, province of Rizal.  To prove its ownership Piadeco relied on Titulo de Propriedad No. 4136 dated April 28, 1894.  Scholarly opining that the Titulo is of doubtful validity, [70] Justice Conrado V. Sanchez, speaking for the Court, stated that:

“But an important moiety here is the deeply disturbing intertwine of two undisputed facts.  First. The Title embraces land `located in the Provinces of Bulacan, Rizal, Quezon, and Quezon City.’Second. The title was signed only by the provincial officials of Bulacan, and inscribed only in the Land Registry of Bulacan. Why? The situation, indeed, cries desperately for a plausible answer.

To be underscored at this point is the well-embedded principle that private ownership of land must be proved not only through the genuineness of title

but also with a clear identity of the land claimed.  (Oligan v. Mejia, 17 Phil. 494, 496; Villa Abrille v. Banuelos, 20 Phil. 1, 8, citing Sison v. Ramos, 13 Phil. 54 and Belen v. Belen, 13 Phil. 202; Licad v. Bacani, 51 Phil 51, 54-56; Lasam v. Director, 65 Phil. 367, 371.  This Court ruled in a case involving a Spanish title acquired by purchase that the land must be concretely measured per hectare or per quinon, not in mass (cuerpos ciertos), (Valdez v. Director, 62 Phil. 362, 373, 375).  The fact that the Royal Decree of August 31, 1888 used 30 hectares as a basis for classifying lands strongly suggests that the land applied for must be measured per hectare.

Here, no definite area seems to have been mentioned in the title.  In Piadeco’s ‘Rejoinder to Opposition’ dated April 28, 1964 filed in Civil Case 3035-M, it specified that area covered by itsTitulo de Propiedad as 74,000 hectares (Rollo in L-24796, p. 36).  In its ‘Opposition’ of May 13, 1964 in the same case, it described the land as containing 72,000 hectares (Id., p. 48). Which is which? This but accentuates the nebulous identity of Piadeco’s land.  Piadeco’s ownership thereof then equally suffers from vagueness, fatal at least in these proceedings.

Piadeco asserts that Don Mariano San Pedro y Esteban, the original owner appearing on the title, acquired his rights over the property by prescription under Articles 4 and 5 of the Royal Decree of June 25, 1880, (Rollo of L-24796, p. 184) the basic decree that authorized adjustment of lands.  By this decree, applications for adjustment -- showing the location, boundaries andarea of land applied for -- were to be filed with the Direccion General de Administracion Civil, which then ordered the classification and survey of the land with the assistance of the interested party or his legal representative (Ponce, op. cit., p. 22).

The Royal Decree of June 5, 1880 also fixed the period for filing applications for adjustment at one year from the date of publication of the decree in the Gaceta de Manila on September 10, 1880, extended for another year by the Royal Order of July 15, 1881 (Ibid.).  If Don Mariano sought adjustment within the time prescribed, as he should have, then, seriously to be considered here are the Royal Orders of November 25, 1880 and of October 26, 1881, which limited adjustment to 1,000 hectares of arid lands, 500 hectares of land with trees and 100 hectares of irrigable lands (See: Government v. Avila, 46 Phil. 146, 154; Bayot v. Director of Lands, 98 Phil. 935, 941.  Article 15 of the Royal Decree of January 26, 1889 limited the area that may be acquired by purchase to 2,500 hectares, with allowable error up to 5%.  Ponce, op. cit., p. 19).  And, at the risk of repetition, it should be stated again that Piadeco’s Titulo is held out to embrace 72,000 or 74,000 hectares of land.

But if more were needed, we have the Maura Law (Royal Decree of February 13, 1894), published in the Gaceta de Manila on April 17, 1894 (Ibid., p. 26; Ventura, op. cit., p. 28).  That decree required a second petition for adjustment within six months from publication, for those who had not yet secured their titles at the time of the publication of the law (Ibid.).  Said law also abolished the provincial boards for the adjustment of lands established by Royal Decree of December 26, 1884, and confirmed by Royal Decree of August 31, 1888, which boards were directed to deliver to their successors, the provincial boards established by Decree on Municipal Organization issued on May 19, 1893, all records and documents which they may hold in their possession (Ramirez v. Director of Land, supra, at p. 124).

Doubt on Piadeco’s title here supervenes when we come to consider that title was either dated April 29 or April 25, 1894, twelve or eight days after the publication of the Maura Law.

Let us now take a look, as near as the record allows, at how Piadeco exactly acquired its rights under the Titulo.  The original owner appearing thereon was Don Mariano San Pedro y Esteban.  From Piadeco’s explanation -- not its evidence (Rollo of L-24796, pp. 179-188) we cull the following:  On December 3, 1894, Don Mariano mortgaged the land under pacto de retro, redeemable within 10 years, for P8,000.00 to one Don Ignacio Conrado.  This transaction was said to have been registered or inscribed on December 4, 1894.  Don Mariano Ignacio died, his daughter, Maria Socorro Conrado, his only heir, adjudicated the land to herself.  At about the same time, Piadeco was organized.  Its certificate of registration was issued by the Securities and Exchange Commission on June 27, 1932.  Later, Maria Socorro, heir of Don Ignacio, became a shareholder of Piadeco when she conveyed the land to Piadeco’s treasurer and an incorporator, Trinidad B. Estrada, in consideration of a certain amount of Piadeco shares.  Thereafter, Trinidad B. Estrada assigned the land to Piadeco. Then came to the scene a certain Fabian Castillo, appearing as sole heir of Don Mariano, the original owner of the land.  Castillo also executed an affidavit of adjudication to himself over the same land, and then sold the same to Piadeco.  Consideration therefor was paid partially by Piadeco, pending the registration of the land under Act 496.

The question may well be asked:  Why was full payment of the consideration to Fabian Castillo made to depend on the registration of the land under the Torrens system, if Piadeco was sure of the validity of Titulo de Propiedad 4136? This, and other factors herein pointed out, cast great clouds of doubt that hang most conspicuously over Piadeco’s title.”

Moreover, in the case of Widows & Orphans Association, Inc. v. Court of Appeals,[71] we categorically enunciated that the alleged Spanish title, Titulo de Propriedad No. 4136, had become bereft of any probative value as evidence of land ownership by virtue of P.D. 892 as contained in our Resolution dated February 6, 1985 in a related case entitled Benito and WIDORA v. Ortigas docketed as G.R. No. 69343.  On March 29, 1985, an entry of final judgment was made respecting G.R. No. 69343.

Under the doctrine of conclusiveness of judgment, the prior declarations by this Court relating to the issue of the validity of Titulo de Propriedad No. 4136 preclude us from adjudicating otherwise.  In the Muñoz case, we had cast doubt on the Titulo’s validity.  In the WIDORA case, the Titulo’s nullification was definitive.  In both cases, the Republic and the estate of Mariano San Pedro y Esteban were on opposite ends before this bench.  In the case en banc of Calalang v. Register of Deeds of Quezon City,[72] the Court explained the concept of conclusiveness of judgment, viz:

“x x x conclusiveness of judgment - states that a fact or question which was in issue in a former suit and was there judicially passed upon and determined by a court of competent jurisdiction, is conclusively settled by the judgment therein as far as the parties to that action and persons in privity with them are concerned and cannot be again litigated in any future action between such parties or their privies, in the same court or any other court of concurrent jurisdiction on either the same or different cause of action, while the judgment remains unreversed by proper authority. It has been held that in order that a judgment in one action can be conclusive as to a particular matter in another action between the same parties or their privies, it is essential that the issue be identical.  If a particular point or question is in issue in the second action, and the judgment will depend on the determination of that particular point or question, a former judgment between the same parties or their privies will be final and conclusive in the second if that same point or question was in issue and adjudicated in the first suit (Nabus v. Court of Appeals, 193 SCRA 732 [1991]).  Identity of cause of action is not required by merely identity of issues.”

The issue, whether Titulo de Propriedad No. 4136 is valid or not, must now be laid to rest.  The Titulo cannot be relied upon by the petitioners-heirs or their privies as evidence of ownership.  In the petition for letters of administration the inventory submitted before the probate court consisted solely of lands covered by the Titulo.  Hence, there can be no “net estate” to speak of after the Titulo’s exclusion from the intestate proceedings of the estate of the late Mariano San Pedro.

In G.R. No. 103727, the Titulo cannot be superior to the Torrens Titles of private respondents Buhain, Ocampo and Dela Cruz, namely TCT No. 372592 (Exh. “2”, Buhain), TCT No. 8982 (Exh. “2”- De Ocampo) and TCT No. 269707 (Exh. “2” - Dela Cruz).[73] Under the Torrens system of registration, the titles of private respondents became indefeasible and incontrovertible one year from its final decree.[74] More importantly, TCT Nos. 372592, 8982, 269707, having been issued under the Torrens system, enjoy the conclusive presumption of validity.[75] As a last hurrah to champion their claim to the vast estate covered by the subject Spanish title, the petitioners-heirs imputed fraud and bad faith which they failed to prove on the part of the private respondents as regards their Torrens titles and accused their own counsel of gross negligence for having failed to call the proper witnesses from the Bureau of Forestry to substantiate the petitioners-heirs’ claim that OCT No. 614 from which private respondents were derived is null and void.  It is an elementary legal principle that the negligence of counsel binds the client. [76] The records show that the petitioners-heirs were not at all prejudiced by the non-presentation of evidence to prove that OCT No. 614 is a nullity considering that their ownership itself of the lands being claimed was not duly proved.  In the case of Villa Rhecar Bus v. Dela Cruz, et al.,[77] we held:

“It is unfortunate that the lawyer of the petitioner neglected his responsibilities to his client.  This negligence ultimately resulted in a judgment adverse to the client.  Be that as it may, such mistake binds the client, the herein petitioner.  As a general rule, a client is bound by the mistakes of his counsel.  (Que v. Court of Appeals, 101 SCRA 13 [1980] Only when the application of the general rule would result in serious injustice should an exception thereto be called for.  Under the circumstances obtaining in this case, no undue prejudice against the petitioner has been satisfactorily demonstrated.  At most, there is only an unsupported claim that the petitioner had been prejudiced by the negligence of its counsel, without an explanation to that effect.”

Sans preponderance of evidence in support of the contention that the petitioners-heirs were denied due process on account of the negligence of their counsel, the writ ofcertiorari is unavailing.

It bears repeating that the heirs or successors-in-interest of Mariano San Pedro y Esteban are not without recourse. Presidential Decree No. 892, quoted hereinabove, grants all holders of Spanish Titles the right to apply for registration of their lands under Act No. 496, otherwise known as the Land Registration Act, within six (6) months from the effectivity of the Decree.  Thereafter, however, any Spanish Title, if utilized as evidence of

possession, cannot be used as evidence of ownership in any land registration proceedings under the Torrens system.

All instruments affecting lands originally registered under the Spanish Mortgage Law may be recorded under Section 194 of the Revised Administrative Code, as amended by Act 3344.

In view hereof, this is as good a time as any, to remind the Solicitor General to be more vigilant in handling land registration cases and intestate proceedings involving portions of the subject estate.  It is not too late in the day for the Office of the Solicitor General to contest the Torrens titles of those who have acquired ownership of such portions of land that rightfully belong to the State.

In fine, the release of the matured Land Bank Capital Bonds issued in favor of Mariano San Pedro y Esteban on August 13, 1968 sought by one Catalino San Pedro, alleged heir, legal holder and owner of Titulo de Propriedad No. 4136 is a matter not ripe for adjudication in these cases.  Firstly, Catalino San Pedro is not a party in any of the two cases before us for review, hence, this Court in a Resolution dated May 10, 1993,[78] denied Catalino’s motion for leave to reopen and/or new trial.  And, secondly, the aforementioned bonds were not included in the inventory of the subject estate submitted by then administrators, Engracio San Pedro and Justino Benito before the probate court.

WHEREFORE, in view of all the foregoing, the petitions in G.R. Nos. 103727 and 106496 are hereby DISMISSED for lack of merit.

Consequently, in G.R. No. 103727, the decision of the Court of Appeals dated January 20, 1992 is hereby AFFIRMED.

In G.R. No. 106496, judgment is hereby rendered as follows :

(1)            Titulo de Propriedad No. 4136 is declared null and void and, therefore, no rights could be derived therefrom;

(2)            All lands covered by Titulo de Propriedad No. 4136 are excluded from the inventory of the estate of the late Mariano San Pedro y Esteban;

(3)            The petition for letters of administration, docketed as Special Proceedings No. 312-B, should be, as it is, hereby closed and terminated.

(4)            The heirs, agents, privies and/or anyone acting for and in behalf of the estate of the late Mariano San Pedro y Esteban are hereby disallowed to exercise any act of possession or ownership or to otherwise, dispose of in any manner the whole or any portion of the estate covered by Titulo de

Propriedad No. 4136; and they are hereby ordered to immediately vacate the same, if they or any of them are in possession thereof.

This judgment is IMMEDIATELY EXECUTORY.

SO ORDERED.