Civil Law Digest-Agency

8/3/2019 Civil Law Digest-Agency

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Table of contents:pageAgency . . . . . . . . . . . . . . . 01 - 04Partnership . . . . . . . . . . . . 04 - 04Land Titles . . . . . . . . . . . . . 04 - 26Torts & Damages . . . . . . . . . 26 - 39Oblicon . . . . . . . . . . . . . . . 39 - 72Sales . . . . . . . . . . . . . . . . 72 - 96Sectrans . . . . . . . . . . . . . . 96 - 110Property . . . . . . . . . . . . . . 110 -132Succession . . . . . . . . . . . . . 133 -139Persons . . . . . . . . . . . . . . 139 -156* digests are arranged from the most recent to later cases

AGENCY

2000

Agency; Distinguished from Sale

VICTORIAS MILLING CO. v. CAG.R. No. 117356. , June 19, 2000.It is clear from Article 1868 that the basis of agency is representation. On the part of the principal,there must be an actual intention to appoint or an intention naturally inferable from his words oractions; and on the part of the agent, there must be an intention to accept the appointment andact on it, and in the absence of such intent, there is generally no agency.One factor which most clearly distinguishes agency from other legal concepts is control; oneperson the agent agrees to act under the control or direction of another the principal.Indeed, the very word "agency" has come to connote control by the principal. The control factor,more than any other, has caused the courts to put contracts between principal and agent in aseparate category.This Court has ruled that where the relation of agency is dependent upon the acts of the parties,the law makes no presumption of agency, and it is always a fact to be proved, with the burden of

proof resting upon the persons alleging the agency, to show not only the fact of its existence, butalso its nature and extent.The question of whether a contract is one of sale or agency depends on the intention of theparties as gathered from the whole scope and effect of the language employed. Ultimately, whatis decisive is the intention of the parties. That no agency was meant to be established by the CSCand STM is clearly shown by CSC's communication to petitioner that SLDR No. 1214M had been"sold and endorsed" to it. The use of the words "sold and endorsed" means that STM and CSCintended a contract of sale, and not an agency.proceeding from the theory that the transactions entered into between petitioner and STM arebut serial parts of one account, petitioner insists that its debt has been offset by its claim forSTM's unpaid purchases, pursuant to Article 1279 of the Civil Code. However, the trial courtfound, and the Court of Appeals concurred, that the purchase of sugar covered by SLDR No.1214M was a separate and independent transaction; it was not a serial part of a single

transaction or of one account contrary to petitioner's insistence. Evidence on record shows,without being rebutted, that petitioner had been paid for the sugar purchased under SLDR No.1214M. Petitioner clearly had the obligation to deliver said commodity to STM or its assignee.Since said sugar had been fully paid for, petitioner and CSC, as assignee of STM, were notmutually creditors and debtors of each other. No reversible error could thereby be imputed torespondent appellate court when it refused to apply Article 1279 of the Civil Code to the presentcase.Petitioner contends that the sale of sugar under SLDR No. 1214M is a conditional sale or acontract to sell, with title to the sugar still remaining with the vendorterms and conditions clearlyshow that petitioner transferred title to the sugar to the buyer or his assignee upon payment of the


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purchase price. Said terms clearly establish a contract of sale, not a contract to sell. Petitioner isnow estopped from alleging the contrary.

1996

Contract of Agency; Validity & EnforceabilityLIM v. CAFEBRUARY 1996The contention is far from meritorious. The receipt which petitioner signed establishes a contractof agency to sell on commission basis.There are some provisions of the law which require certain formalities for particular contracts:1) When the form is required for the validity of the contract2) When it is required to make the contract effective as against third parties (Arts. 1357 &1358, Civil Code)3) When form is required for the purpose of proving the existence of the contract (Statute ofFrauds).A contract to sell on commission basis does not belong to any of these three categories, hence, itis valid and enforceable in whatever form it may be entered into.

Civil Law/Agency & Land Titles/GPA to sell land & innocent purchaser for value

FRANCISCO A. VELOSO v. COURT, AGLALOMA ESCARIO & REG. OF DEEDS, MLA.G.R. No. 102737, Aug. 21, 1996Petitioner contends that the power of attorney (GPA) was a forgery and presented checks, hismarriage certificate, etc. to compare his genuine signature with that in the GPA. He also allegedthat the same was not duly notarized for as testified by Atty. Tubig himself, he did not sign thereonnor was it ever recorded in his notarial register.The GPA was valid and regular on its face. It was notarized and such such, carries theevidentiary weight with respect to due execution. While it is true that it was denominated as aGPA, a perusal thereof revealed that it stated an authority to sell. Thus, there was no need for aseparate SPA as the document expressly authorized the agent to sell the subject property. TheSPA can be included in the GPA when it is specified therein the act or transaction for which thespecial power is required.We found, however, that the basis presented by petitioner was inadequate to sustain his

contention. Mere variance of the signatures is not conclusive proof of forgery. Forgery cannot bepresumed. (Tenio-Obsequio v. CA, G.R. No. 107967, 1 Mar. 1994) Petitioner failed to prove hisallegation and simply relied on the apprent difference of the signatures. His denial had notestablished that the signature of the GPA was not his.We agree with the lower court that private respondent was an innocent purchaser for value.Respondent relied on the GPA presented by petitioners wife. Being the wife of the owner andhaving with her the title to the property, there was no reason for private respondent not to believein her authority. Moreover, the GPA was notarized and carried with it the presumption of its dueexecution. Thus, having had no inkling on any irregularity and having no participation thereof,private respondent was a buyer in good faith. (Bautista v. CA, G.R. No. 106042, 28 Feb. 1994)Documents acknowledged before a notary have the evidentiary weight with respect to their dueexecution. The questioned GPA and deed of sale, were notarized and therefore, presumed to bevalid and duly executed. Atty. Tubig denied having notarized the said documents and alleged that

his signature had also been falsified. He presented samples of his signature to prove hiscontention. Forgery should be proved by clear nad convincing evidence and whoever alleges ithas the burden of proving the saem. Just like petitioner, witness Atty. Tubig merely pointed outthat his signature was different from that in the GPA and deed of sale. There had never been anaccurate examination of the signature, even that of petitioner. To determine forgery, it was held inCesar v. Sandiganbayan (G.R. Nos. 54719-50, 17 Jan. 1985): The process of identification mustinclude the determination of the extent, kind and significance of this resemblance as well as ofvariation. It becomes necessary to determine whether the variation is due to the operation of adifferent personality, or is only the exepected and inevitable variation found in the genuine writingof the same writer. It is also necessary to decide whether the resemblance is the result of a more


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or less skillful imitation, or is the habitual and characteristic resemblance which naturally appeatsin a genuine writing. When these 2 questions are correctly answered the whole problem ofidentification is solved.Even granting that petitioners signature was falsified, and the GPA and deed of sale void, suchwould not revoke title subsequently issued in favor of private respondent, an innocent purchaserfor value.Finally, the trial court did not err in applying equitable estoppel, i.e., where one or two innocentsmust suffer a loss, he who by his conduct made the loss possible must bear it. From theevidence, petitioner must bear the loss as while he declared that he had sole access to the TCT,his wife was able to get it, hence petitioner did not observe due diligence.

Civil Law/AgencyCOSMIC LUMBER v. CA & ISIDRO PEREZG.R.No. 114311, NOVEMBER 1996Petitioner argues that the trial courts decision is void because the compromise agreement uponwhich it was based is void. Attorney-in-fact Paz G. Villamil-Estrada did not possess the authorityto sell nor was she armed with a Board Resolution authorizing the sale of its property. She wasmerely empowered to enter into a compromise agreement in the recovery suit she wasauthorized to file against the squatters on the lot, such authority being expresly confined to theejectment of third persons or squatters xxx

We agree with petitioner. The authority granted to Estrada under the SPA was explicit andexclusionary: for her to sue to eject all persons found on the lots so that petitioner could takematerial possession thereof, and for this purpose, to appear at pre-trial and enter into acompromise agreement, but only insofar as this was protective of petitioners rights. Nowherewas Estrada granted, expressly or impliedly, the power to sell the lot or portion thereof. Neithercan conferment of the power to sell be validly inferred from the specific authority to enter into acompromise agreement becuase of the explicit limitation fixed by the grantor that thecompromise entered into shall only be to protect petitioners rights. In the context of the grant ofpowers to Estrada, alienation by sale cannot be deemed protective of petitioners rights, more sowhen the land was being sold for P80/sq. m., very much less than its assessed value ofP250.00/sq. m.When the sale of a piece of land or any interest thereon is through an agent, the authority of thelatter shall be in writing; otherwise, the sale shall be void. For the principal to confer the right

upon an agent to sell real estate, a POA must so express the powers of the agent in clear andunmistakable language. Where there is any reasonable doubt, no such construction shall begiven the document. (citations omitted)By selling to respondent Perez a portion of petitioners land through a compromise agreement,Estrada acted without authority. The sale ipso jure is void. So is the compromise agreement.This being the case, the judgment based thereon is void as well.It may be argued that petitioner knew of the compromise agreement since the principal ischargeable with and bound by the knowledge of or notice to his agent received while the agentwas acting as such. But the general rule is intended to protect those who exercise good faith andnot as a shield for unfair dealing. Hence, there is a well-established exception to the general ruleas where the conduct and dealings of the agent are such as to raise a clear presumption that hewill not communicate to the principal the facts in controversy. (Mutual Life v. Hilton Green, 241 US613) The logical reason for this exception is that where the agent is committing fraud, it would be

contrary to common sense to expect that he would communicate this to the principal. Verily,when an agent is engaged in the perpetration of fraud upon his principal, he is not really acting forthe principal but is acting for himself, entirely outside the scope of his agency. (Aetna Casualty v.Local Bldg., 19P2d 612, 616) Indeed, the basic tenets of agency rest on the highestconsiderations of justice, equity and fair play, and an agent will not be permitted to pervert hisauthority to his own advantage, and his act in secret hostility to the interests of his principaltranscends the power afforded him. (citation omitted)

1995


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Civil Law/Agency/Sales/Contract to sellTOYOTA SHAW v. CA244 SCRA 320 (1995 May)A person dealing with an agent is put upon inquiry and must discover upon his peril the authorityof the agentDefiniteness of price is essential element in formation of a binding contract of sale.PARTNERSHIP

1999

Partnership; Creation Of; RequisitesAFISCO INSURANCE CORP., ET AL. VS CAJan. 25, 1999(1) Partnership; creation of; requisites Art. 1767 of the CC recognizes the creation of a

contract of partnership when 2 or more persons bind themselves to contribute money, property,or industry to a common fund, with the intention of dividing the profits among themselves. Itsrequisites are: (1)mutual contribution to a common stock, and (2) a joint interest in the profits. Inother words, a partnership is formed when persons contract to devote to a common purposeeither money, property, or labor with the intention of dividing the profits between themselves.Meanwhile, an association implies associates who enter into a joint enterprise x x x for the

transaction of business.(2) Insurance pool; circumstances indicating partnership. In the case before us, the cedingcompanies entered into a Pool Agreement or an association that would handle all the insurancebusinesses covered under their quota-share reinsurance treaty and surplus reinsurance treaty inMunich. The following unmistakably indicates a partnership, or an association covered bySection 24 of the NIRC

1998

Partnership, its Three Final StagesIRMA IDOS v. CA, ET AL.September 1998

Petitioner is charged for violation of BP 22, for issuing a check to complainant, Eddie

Alarilla, as payment for his share of assets of their partnership, which was in the process ofliquidation, which check however bounced.There are three final stages of a partnership: (1) dissolution; (2) winding-up; and (3)

termination. Dissolution is the change in the relation of the partners caused by any partnerceasing to be associated in the carrying on of the business. It is that point of time that thepartners cease to carry on the business together. Winding up is the process of settling thebusiness affairs after dissolution. Termination is the point in time after all the partnership affairshave been wound up.

Art. 1829 of the NCC states that On dissolution, a partnership is not terminated, butcontinues until the winding up of partnership affairs is completed.

The best evidence of the existence of the partnership, which was not yet terminated(though in the winding up stage) were the unsold goods and uncollected receivables, which werepresented to the trial court. Since the partnership has not been terminated, the petitioner and

complainant remained as co-partners. The check was thus issued by the petitioner tocomplainant as would a partner to another, and not as payment from a debtor to a creditor.

LAND TITLES

2001

Land titles; certificate or registrationLORETA BRAVO CERVANTES, et al vs. HON. COURT OF APPEALS, et al,


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G.R. No. 118982, February 19, 2001It is a fundamental principle in land registration that the certificate of title serves as evidence of anindefeasible and incontrovertible title to the property in favor of the person whose name appearstherein, in this case the private respondents' father, Antonio Francisco. A title once registeredunder the Torrens System cannot be defeated even by adverse, open and notorious possession;neither can it be defeated by prescription. Petitioners cannot prove their ownership of the subjectparcels of land through tax declarations and corresponding tax receipts inasmuch as they are notconclusive evidence of ownership.

Land Titles; Public landsFELIPE SEVILLE in his capacity as judicial administrator of the estate of JOAQUIN ORTEGAand/or FELIPE SEVILLE, EMILIA ESTRADA, et al vs. NATIONAL DEVELOPMENT COMPANY, etal,G.R. No. 129401, February 2, 2001Unless a public land is shown to have been reclassified as alienable or actually alienated by theState to a private person, that piece of land remains part of the public domain. Hence, occupationthereof, however long, cannot ripen into ownership.Under the Regalian doctrine, all lands of the public domain belong to the State, which is thesource of any asserted right to ownership of land. All lands not otherwise appearing to be clearlywithin private ownership are presumed to belong to the State. In Menguito v. Republic, 9 the

Court held that "[u]nless public land is shown to have been reclassified or alienated to a privateperson by the State, it remains part of the inalienable public domain. Indeed, 'occupation thereofin the concept of owner, no matter how long, cannot ripen into ownership and be registered as atitle.' To overcome such presumption, incontrovertible evidence must be shown by the applicant.Absent such evidence, the land sought to be registered remains inalienable."A person in open, continuous, exclusive and notorious possession of a public land for more thanthirty years acquires an imperfect title thereto. That title may be the subject of judicialconfirmation, pursuant to Section 48 of the Public Land Act. However, Section 4 of PresidentialDecree (PD) No. 1073, 10 paragraph "b" of the aforecited provision applies only to alienable anddisposable lands of the public domain.Clearly, the burden of proof that the land has been classified as alienable is on the claimant. Inthe present case, petitioners failed to discharge this burden. Hence, their possession of thedisputed property, however long, cannot ripen into ownership.

To begin with, the power to classify a land as alienable belongs to the State, not to privateentities. Hence, the pronouncements of Yap or LSBDA cannot effect the reclassification of theproperty.Semantics aside, petitioners are effectively seeking the modification of LSBDA's OCT, whichallegedly encompassed even a parcel of land allegedly belonging to them. Hence, the presentsuit, purportedly filed for the "recovery of real property and damages," is tantamount to acollateral attack not sanctioned by law. Section 48 of PD 1529, the Property Registration DecreeMoreover, the title became indefeasible and incontrovertible after the lapse of one year from thetime of its registration and issuance. 23 Section 32 of PD 1529 provides that "[u]pon theexpiration of said period of one year, the decree of registration and the certificate of title shallbecome incontrovertible. Any person aggrieved by such decree of registration in any case maypursue his remedy by action for damages against the applicant or other persons responsible forthe fraud."

Petitioners also claim that the disputed property should be reconveyed to them. This cannot beallowed. Considering that the land was public before the Miscellaneous Sales Patent was issuedto LSBDA, petitioners have no standing to ask for the reconveyance of the property to them. Theproper remedy is an action for reversion, which may be instituted only by the Office of theSolicitor General, pursuant to Section 101 of the Public Land ActIn the light of our earlier disquisition, the theory has no leg to stand on. Absent any showing thatthe land has been classified as alienable, their possession thereof, no matter how lengthy, cannotripen into ownership. In other words, they have not become owners of the disputed property.Moreover, LSBDA's title was derived from a Miscellaneous Sales Patent, not from Yap. Finally,petitioners cannot, by a collateral attack, challenge a certificate of title that has already become


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indefeasible and incontrovertible. If petitioners believe that they have been defrauded by Yap,they should seek redress, not in these proceedings, but in a proper action in accordance with law.

2000

Land Titles: Adverse ClaimDiaz Duarte v. OngMay 2000

This is a land dispute between Diaz & the spouses Ong. Diaz inherited the land from his parents.In 1979 Diaz sold the land to Corregidor. Corregidor later on sold back the land by virtue of adeed of repurchase to Diaz. Corregidor however refused to surrender the TC to Diaz hence, sheexecuted an adverse claim to the lot. The Ong's claim to be buyers in good faith. Ong contendthat the notice of adverse claim was already cancelled when they bought the property. Diazdisputes the legality of the cancellation & maintains that the Registrar of Deeds should not haveautomatically cancelled the notice of adverse claim simply because the 30 day period has lapsed.

RULINGS: (1) A notice of adverse claim remains valid even after the lapse of the 30-dayperiod. - The good faith of appellant-spouses rests heavily on whether the notice of adverse claim

on Lot 1208 was validly cancelled by the Registrar of Deeds. The issue is no longer of firstimpression. In the 1996 case of Sajonas v. Court of Appeals (258 SCRA 79), we explained that anotice of adverse claim remain valid even after the lapse of the 30-day period provided by Section70 of P.D. No. 1529 or the Property Registration Decree.

We explained in Sajonas that for as long as there is yet no petition for its cancellation, thenotice of adverse claim remains subsisting. Thus:

"At first blush, the provision in question would seem to restrict the effectivity of the adverseclaim to thirty days. But the above provision cannot and should not be treated separately, butshould be read in relation to the sentence following, which reads:

"After the lapse of said period, the anotation of the adverse claim may be cancelled upon filingof a verified petition therefor by the party in interest."

"If the rationale of the law was for the adverse claim to ipso facto lose force and effect after thelapse of thirty days, then it would have been necessary to include the foregoing caveat to clarify

and complete the rule. For then, no adverse claim need be cancelled. If it has beenautomatically terminated by mere lapse of time, the law would not have required the party ininterest to do a useless act."

In a petition for cancellation of adverse claim, a hearing must first be conducted.The hearing will afford the parties an opportunity to prove the propriety or impropriety of theadverse claim. Petitioner was unlawfully denied this opportunity when the Registrar of Deedsautomatically cancelled the adverse claim. Needless to state, the cancellation of her adverseclaim is ineffective.

Land Titles; ConveyanceCORPUZ v. SPS. GROSPEG.R. No. 135297, June 8, 2000.The sale, transfer or conveyance of land reform rights are, as a rule, void in order to prevent a

circumvention of agrarian reform laws. However, in the present case, the voluntary surrender orwaiver of these rights in favor of the Samahang Nayon is valid because such action is deemedlegally permissible conveyance in favor of the government. After the surrender or waiver of saidland reform rights, the Department of Agrarian Reform, which took control of the property, validlyawarded it to private respondents.We have already ruled that the sale or transfer of rights over a property covered by a Certificateof Land Transfer is void except when the alienation is made in favor of the government or throughhereditary succession. This ruling is intended to prevent a reversion to the old feudal system inwhich the landowners reacquired vast tracts of land, thus negating the government's program offreeing the tenant from the bondage of the soil.


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As such [the farmer-beneficiary] gained the rights to possess, cultivate and enjoy the landholdingfor himself. Those rights over that particular property were granted by the government to him andto no other. To insure his continued possession and enjoyment of the property, he could not,under the law, make any valid form of transfer except to the government or by hereditarysuccession, to his successors.Despite the above prohibition, however, there are reports that many farmer-beneficiaries of PD 27have transferred the ownership, rights, and/or possession of their farms/homelots to otherpersons or have surrendered the same to their former landowners. All these transactions orsurrenders are violative of PD 27 and therefore, null and void.Abandonment requires (a) a clear and absolute intention to renounce a right or claim or to deserta right or property; and (b) an external act by which that intention is expressed or carried intoeffect. The intention to abandon implies a departure, with the avowed intent of never returning,resuming or claiming the right and the interest that have been abandoned.Surrender of possession did not amount to an abandonment because there was an obligation onthe part of private respondents to return possession upon full payment of the loan.PD 27 provides that title to land acquired pursuant to the land reform program shall not betransferable except through hereditary succession or to the government, in accordance with theprovisions of existing laws and regulations. Section 8 of RA 3844 also provides that "[t]heagricultural leasehold relation...shall be extinguished by: ...(2)[v]oluntary surrender of thelandholding by the agricultural lessee, . . . ."

Voluntary surrender, as a mode of extinguishment of tenancy relations, does not require courtapproval as long as it is convincingly and sufficiently proved by competent evidence. Petitioner'svoluntary surrender to the Samahang Nayon qualifies as a surrender or transfer to thegovernment because such action forms part of the mechanism for the disposition and thereallocation of farmholdings of tenant-farmers who refuse to become beneficiaries of PD 27. what was prohibited was the perpetration of the tenancy or leasehold relationship between thelandlord and the farmer beneficiary.

Land Titles; Property; OwnershipCARMELINO M. SANTIAGO, MONTSERRAT M. SANTIAGO, NILDA M. IBOLEON, BELINDAMANAHAN AND JOSEFINA M. CAPINPIN, petitioners, vs. THE COURT OF APPEALS ANDMETROPOLITAN WATERWORKS AND SEWERAGE SYSTEMG.R. No. 109111, June 28, 2000

Documents proving ownership such as transfer and original certificates of title are the legs onwhich petitioners case stands. Premised on the relevance of these documents, the trial courtruled in favor of petitioners. However, the proverbial legs of evidence are broken. While the titlespresented by petitioners show ownership, such ownership is not of the land claimed, but over theadjoining parcels of land. The technical descriptions in the titles presented by petitioners betraythem as adjacent and adjoining owners of the land claimed by MWSS for registration.

A torrens certificate of title covers only the land described therein together withimprovements existing thereon, if any, nothing more. The titles presented by petitioners coveringas they do land adjacent to that claimed in MWSS application for registration, do not support theirclaim, but even defeat it.Further, we agree with the Court of Appeals that if petitioners predecessors-in-interest beingmembers of the bar and learned in the law merely allowed and tolerated MWD or NAWASAs useof the land, they would have reduced the agreement into writing for use in the registration of their

property which at that time was still unregistered.We hold that if petitioners predecessors were truly the owners of the subject parcels of land, theywould have taken steps to have the land properly titled long ago. The land was possessed byMWSS long before World War II. That was over sixty (60) years ago! Petitioners "slept on therights" they claim to possess. Relief is denied to a claimant whose right has become "stale" byreason of negligence or inattention for a long period of time.MWSS presented tax declarations to buttress its ownership of the land. True, tax declarations donot prove ownership. However, tax declarations can be strong evidence of ownership whenaccompanied by possession for a period sufficient for prescription. Since MWSS possessed theland in the concept of owner for more than thirty (30) years preceding the application, MWSS


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acquired ownership by prescription. By placing the pipelines under the land, there was materialoccupation of the land by MWSS, subjecting the land to its will and control. [Under Article 531 ofthe Civil Code, "Possession is acquired by the material occupation of a thing or the exercise of aright, or by the fact that it is subject to the action of our will, or by proper acts and legal formalitiesestablished for acquiring such right."] Petitioners cannot argue that MWSS possession was not"open". The existence of the pipes was indicated above the ground by "pilapils".Even assuming arguendo that the pipes were "hidden" from sight, petitioner cannot claimignorance of the existence of the pipes. The possession must be public in order to be the basisfor prescription. If the owner proves that the possession is clandestine, it will not affect hispossession. Petitioners also cannot claim that MWSS abandoned its possession. There is noshowing that by discontinuing the use of the pipes, MWSS voluntarily renounced its claim overthe land. Petitioners did not prove that the spes recuperendi was gone and the animus revertendiwas given up.

Land Titles; Property; Lis pendensZAIDA RUBY S. ALBERTO vs. COURT OF APPEALS, EPIFANIO J. ALANO, CECILIA P. ALANO,YOLANDA P. ALANO, and NATALIA REALTY, INC.June 30, 2000The notice of lis pendens is an announcement to the whole world that a particular real property isin litigation, and serves as a warning that one who acquires an interest over said property does so

at his own risk, or that he gambles on the result of the litigation over said property. In ViewmasterConstruction Corporation v. Reynaldo Y. Maulit and Edgardo Castro, this Court did not confine theavailability of lis pendens only to cases involving the title to or possession of real property when itheld that:"According to Section 24, Rule 14 of the Rules of Court and Section 76 of Presidential DecreeNo. 1529, a notice of lis pendens is proper in the following cases, viz.:a)....An action to recover possession of real estate;b)....An action to quiet title thereto;c)....An action to remove clouds thereon;d)....An action for partition; ande)....Any other proceedings of any kind in Court directly affecting the title to the land or the use oroccupation thereof or the buildings thereon."

Land TitlesREPUBLIC OF THE PHILIPPINES vs. CAG.R. No. 130174, July 14, 2000An applicant seeking to establish ownership over land must conclusively show that he is theowner thereof in fee simple, for the standing presumption is that all lands belong to the publicdomain of the State, unless acquired from the Government either by purchase or by grant, exceptlands possessed by an occupant and his predecessors since time immemorial, for suchpossession would justify the presumption that the land had never been part of the public domainor that it had been private property even before the Spanish conquest.The land in question is admittedly public. The applicant has no title at all. Its claim of acquisitionof ownership is solely based on possession. In fact, the parcels of land applied for were declaredpublic land by decision of the Cadastral Court. Such being the case, the application for voluntaryregistration under P. D. No. 1529 [Formerly Act No. 496.] is barred by the prior judgment of the

Cadastral Court. The land having been subjected to compulsory registration under the CadastralAct and declared public land can no longer be the subject of registration by voluntary applicationunder Presidential Decree No. 1529. The second application is barred by res-judicata. Aspreviously held, "[W]here the applicant possesses no title or ownership over the parcel of land, hecannot acquire one under the Torrens System of registration."Nonetheless, applicant anchors its application for registration of title on the provisions of P. D. No.1529 or in the alternative Com. Act No. 141, Section 48 (b), as amended by Rep. Act No. 1942,which allows "those who by themselves or through their predecessors in interest have been inopen, continuous, exclusive and notorious possession and occupation of agricultural lands of thepublic domain, under a bona fide claim of acquisition of ownership, for at least thirty years


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immediately preceding the filing of the application" to apply for judicial confirmation andregistration of title.However, the evidence is inconclusive that applicant and its predecessors in interest had been inopen, continuous, exclusive and notorious possession of the land in question, en concepto dedueo, or a bona fide claim of acquisition of ownership for at least thirty (30) years immediatelypreceding the filing of the application, or since June 12, 1945, or since time immemorial.The applicant failed to prove the fact of possession by itself and its predecessors in interest for atleast thirty (30) years before the filing of the application. Applicant failed to prove specific actsshowing the nature of its possession and that of its predecessors in interest. The applicant mustpresent specific acts of ownership to substantiate the claim and cannot just offer generalstatements which are mere conclusions of law than factual evidence of possession." "Actualpossession of land consists in the manifestation of acts of dominion over it of such a nature as aparty would naturally exercise over his own property."The bare assertion of witnesses that the applicant of land had been in the open, adverse andcontinuous possession of the property for over thirty (30) years is hardly "the well-nighincontrovertible" evidence required in cases of this nature. In other words, facts constitutingpossession must be duly established by competent evidence. Consequently, the lower courtgravely erred in granting the application.

Land Titles; Reconstitution of Title

REPUBLIC OF THE PHILIPPINES, vs. PILAR ESTIPULARG.R. No. 136588, July 20, 2000Petition for reconstitution of title. Republic Act No. 26 lays down the special requirements andprocedure that must be followed before jurisdiction may be acquired over a petition forreconstitution of title. In Section 13 of said Act, these requirements and procedure are provided asfollows:"SECTION 13. The Court shall cause a notice of the petition, filed under the preceding section,to be published, at the expense of the petitioner, twice in successive issues of the OfficialGazette, and to be posted on the main entrance of the provincial building and of the municipalbuilding of the municipality or city in which the land is situated, at least thirty days prior to the dateof hearing. The court shall likewise cause a copy of the notice to be sent, by registered mail orotherwise, at the expense of the petitioner, to every person named therein whose address isknown, at least thirty days prior to the date of the hearing. Said notice shall state, among other

things, the number of the lost or destroyed certificate of title if known, the name of the registeredowner, the name of the occupants or persons in possession of the property, the owner of theadjoining properties, the location, area and boundaries of the property, and the date on which allpersons having any interest therein must appear and file their claim or objection to the petition.The petitioner shall, at the hearing, submit proof of publication, posting and service of the noticeas directed by the court."These requirements are mandatory and compliance with them is jurisdictional. In Republic v.Court of Appeals, the Court held:"Reconstitution of a certificate of title, in the context of Republic Act No. 26, denotes therestoration in the original form and condition of a lost or destroyed instrument attesting [to] thetitle of a person to a piece of land. The purpose of the reconstitution is to have, after observingthe procedures prescribed by law, the title reproduced in exactly the same way it has been whenthe loss or destruction occurred. Among the conditions explicitly required by the law is publication

of the petition twice in successive issues of the Official Gazette, and its posting at the mainentrance of the provincial building and of the municipal building of the municipality or city in whichthe land is situated, at least thirty days prior to the date of hearing. This directive is mandatory;indeed, its compliance has been held to be jurisdictional. . ."

Thus, before the trial court can acquire jurisdiction to hear and decide a reconstitution case,compliance with the following requisites is imperative:"1. [That] the notice of the petition be published, at the expense of the petitioner, twice insuccessive issues of the Official Gazette, and posted on the main entrance of the provincial


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building and of the municipal building of the municipality or city in which the land is situated, atleast thirty days prior to the date of hearing;"2. [That] the notice state among other things, the number of the lost or destroyed certificatesof title if known, the name of the registered owner, the name of the occupants or persons inpossession of the property, the owner of the adjoining properties and all other interested parties,the location, area and boundaries of the property, and the date on which all persons having anyinterest therein must appear and file their claim of objection to the petition;"3. [That] a copy of the notice also be sent, by registered mail or otherwise, at the expense ofthe petitioner, to every person named therein (i.e. the occupants or persons in possession of theproperty, the owner of the adjoining properties and all other interested parties) whose address isknown at least thirty days prior to the date of the hearing; and"4. [That] at the hearing, petitioner submit proof of publication, posting and service of thenotice as directed by the court."

Land TitlesFRANCISCO DE GUZMAN, et al. vs. THE NATIONAL TREASURER OF THE REPUBLIC OFTHE PHILIPPINES, et al.G.R. No. 143281, August 3, 2000Recovery from Assurance Fund under the Property Registration Decree. Section 95 ofPresidential Decree No. 1529, otherwise known as the Property Registration Decree, provides:

SEC. 95. Action for compensation from funds. A person who, without negligence on hispart, sustains loss or damage, or is deprived of land or any estate or interest therein inconsequence of the bringing of the land under the operation of the Torrens system or arising afteroriginal registration of land, through fraud or in consequence of any error, omission, mistake ormisdescription in any certificate of title or in any entry or memorandum in the registration book,and who by the provisions of this Decree is barred or otherwise precluded under the provision ofany law from bringing an action for the recovery of such land or the estate or interest therein, maybring an action in any court of competent jurisdiction for the recovery of damage to be paid out ofthe Assurance Fund.It may be discerned from the foregoing provisions that the persons who may recover from theAssurance Fund are:1) Any person who sustains loss or damage under the following conditions:a) that there was no negligence on his part; and

b) that the loss or damage sustained was through any omission, mistake or malfeasance ofthe court personnel, or the Registrar of Deeds, his deputy, or other employees of the Registry inthe performance of their respective duties under the provisions of the Land Registration Act, now,the Property Registration Decree; or2) Any person who has been deprived of any land or interest therein under the followingconditions:a) that there was no negligence on his part;b) that he was deprived as a consequence of the bringing of his land or interest thereinunder the provisions of the Property Registration Decree; or by the registration by any otherperson as owner of such land; or by mistake, omission or misdescription in any certificate ofowner's duplicate, or in any entry or memorandum in the register or other official book or by anycancellation; andc) that he is barred or in any way precluded from bringing an action for the recovery of such

land or interest therein, or claim upon the same.The Assurance Fund is intended to relieve innocent persons from the harshness of the doctrinethat a certificate is conclusive evidence of an indefeasible title to land. Petitioners did not sufferany prejudice because of the operation of this doctrine. On the contrary, petitioners sought toavail of the benefits of the Torrens System by registering the property in their name. Unfortunatelyfor petitioners, the original owners were able to judicially recover the property from them. Thatpetitioners eventually lost the property to the original owners, however, does not entitle them tocompensation under the Assurance Fund. While we commiserate with petitioners, who appear tobe victims of unscrupulous scoundrels, we cannot sanction compensation that is not within thelaw's contemplation. As we said in Treasurer of the Philippines vs. Court of Appeals, the


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Government is not an insurer of the unwary citizen's property against the chicanery of scoundrels.Petitioners' recourse is not against the Assurance Fund, as the Court of Appeals pointed out, butagainst the rogues who duped them.

Land titles; Property; Buyers in Good FaithNATIONAL IRRIGATION ADMINISTRATION vs. COURT OF APPEALS and DICK MANGLAPUSG. R. No. 114348, September 20, 2000LAND TITLES: We agree with NIA that the Transfer Certificate of Title and the Original Certificateof Title covering the subject parcel of land contained a reservation granting the government aright of way over the land covered therein.The transfer certificate of title, on which both the trial court and Court of Appeals relied, containssuch a reservation. It states that title to the land shall be:...subject to the provisions of said Land Registration Act and the Public Land Act, as well asthose of Mining Laws, if the land is mineral, and subject, further to such conditions contained inthe original title as may be subsisting (underscoring ours).Under the Original Certificate of Title, there was a reservation and condition that the land issubject to to all conditions and public easements and servitudes recognized and prescribed bylaw especially those mentioned in Sections 109, 110, 111, 112, 113 and 114, Commonwealth ActNo. 141, as amended. This reservation, unlike the other imposed on the grant, was not limited byany time period and thus is a subsisting condition.

Section 112, Commonwealth Act No. 141, provides that lands granted by patent,shall further be subject to a right of way not exceeding twenty meters in width for publichighways, railroads, irrigation ditches, aqueducts, telegraphs and telephone lines, and similarworks as the Government or any public or quasi-public service or enterprises, including mining orforest concessionaires may reasonably require for carrying on their business, with damages forthe improvements only (underscoring ours).The canal NIA constructed was only eleven (11) meters in width. This is well within the limitprovided by law. Manglapus has therefore no cause to complain.Article 619 of the Civil Code provides that, Easements are established either by law or by the willof the owners. The former are called legal and the latter voluntary easements. In the presentcase, we find and declare that a legal easement of a right-of-way exists in favor of thegovernment. The land was originally public land, and awarded to respondent Manglapus by freepatent. The ruling would be otherwise if the land were originally private property, in which case,

just compensation must be paid for the taking of a part thereof for public use as an easement of aright of way.Neither can Manglapus argue that he was a transferee or buyer in good faith. Under the Torrenssystem, for one to be a buyer in good faith and for value, the vendee must see the transfercertificate of title and rely upon the same.Here, the annotation on the transfer certificate of titleimposed on Manglapus the duty to refer to the conditions annotated on the back of the originalcertificate of title. This, he did not do. The law cannot protect him. Manglapus is a transfereewith notice of the liens annotated in the title.One who deals with property registered under the Torrens system is charged with notice ofburdens and claims that are annotated on the title

Land Titles; RegistrationAMELITA DOLFO vs. THE REGISTER OF DEEDS, et al,

G.R. No. 133465, September 25, 2000Petitioners reliance on her title is infirm. While she presented numerous documents to prove itsauthenticity, however, they have been disputed by Benjamin Flestado, Chief of the Inspection andInvestigation Division of the Land Registration Authority (LRA), in his Report showing that herT.C.T. No. T-320601 was issued without legal basis and that no document was on file with thePrimary Entry Book of the Registry of Deeds of Trece Martires City to support the issuancethereof. This Report concludes that petitioners T.C.T. No. T-320601 is spurious. Such finding isreinforced by the NBI Report dated June 20, 1996 showing that the signature of Register ofDeeds Antonia Cabuco appearing on petitioners title is a forgery. Consequently, Atty. Artemio


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Cana, Acting Register of Deeds of Cavite, filed a complaint with the Regional Trial Court, Branch89 at Bacoor for annulment of petitioners title.The rule that a title issued under the Torrens System is presumed valid and, hence, is the bestproof of ownership of a piece of land does not apply where the certificate itself is faulty as to itspurported origin.Thus, petitioner cannot invoke the indefeasibility of her certificate of title. It bears emphasis thatthe Torrens system does not create or vest title but only confirms and records one alreadyexisting and vested. Thus, while it may be true, as petitioner argues, that a land registration courthas no jurisdiction over parcels of land already covered by a certificate of title, it is equally truethat this rule applies only where there exists no serious controversy as to the authenticity of thecertificate.

Land Titles; Certificate of titleSPOUSES FLORENTINO ZARAGOZA and ERLINDA ENRIQUEZ-ZARAGOZA vs. THEHONORABLE COURT OF APPEALS, ALBERTA ZARAGOZA MORGAN,G.R. No. 106401, September 29, 2000Sec. 48. Certificate not subject to collateral attack. - A certificate of title shall not be subject tocollateral attack. It can not be altered, modified, or cancelled except in a direct proceeding inaccordance with law.We have reiterated this rule in the case of Halili vs. Court of Industrial Relations, citing the earlier

cases of Constantino vs. Espiritu and Co vs. Court of Appeals. In Halili, we held that a certificateof title accumulates in one document a precise and correct statement of the exact status of thefee held by its owner. The certificate, in the absence of fraud, is the evidence of title and showsexactly the real interest of its owner. The title once registered, with very few exceptions, shouldnot thereafter be impugned, altered, changed, modified, enlarged or diminished, except in somedirect proceeding permitted by law. Otherwise, all security in registered titles would be lost. InConstantino, the Court decided that the certificate, in the absence of fraud, is the evidence of titleand shows exactly the real interest of its owner. The title once registered, with very fewexceptions, should not thereafter be impugned, altered, changed, modified, enlarged ordiminished, except in some direct proceeding permitted by law. Otherwise all security inregistered titles would be lost. And in Co, we stated that a Torrens title cannot be collaterallyattacked. The issue on the validity of title, i.e., whether or not it was fraudulently issued, can onlybe raised in an action expressly instituted for that purpose.

1999

Forest Lands Not Subject to Private Ownership unless DeclassifiedITUTRALDE V FALCASANTOSJan. 20, 1999

The Court of Appeals correctly held that the evidence is unrebutted that the subject landis within the Forest Reserve Area and hence, not capable of private appropriation andoccupation. In Republic c Register of Deeds of QC (244 SCRA 537), we held that Forest land,like mineral or timber lands which are public lands, are not subject to private ownership under theConstitution, become private properties. In the absence of such classification, the land remainsunclassified public land until released therefrom and rendered open to disposition. Before anyland may be declassified form the forest group and converted into alienable or disposable land for

agricultural or other purposes, there must be a positive act from the government. Even rules onthe confirmation of imperfect titles do not apply unless and until the land classified as forest landis released in an official proclamation to that effect so that it may form part of the disposableagricultural lands of the public domain

Government Immunity from Laches and Estoppel for Acts of its OfficialsRecovery of Ownership of Subidivision Lands Soldin Good Faith by Private Developer to InnocentPurchaser for ValueRP v CA, et al.Jan. 21, 1999


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(1) The State can be put in estoppel by the mistakes or errors of its officials or agents.- Estoppelsagainst the public are not favored; they must be invoked only in rare and unusual circumstancesas they could operate to defeat the effective operation of a policy adopted to protect the public.However, the government may not be allowed to deal dishonorably or capriciously with itscitizens. In the case at bar, for nearly 20 years, petitioner failed to correct and recover the allegedincrease in the lands area of St. Jude. Its prolonged inaction strongly militates against its cause,as its is tantamount to laches, which means the failure or neglect, for an unreasonable andunexplained length of time, to do that which by exercising due diligence could or should havebeen done earlier; it is negligence or omission to assert a right within a reasonable time,warranting a presumption that the party entitled to assert it either abandoned it or declined toassert it.(2) Buyers of the subdivision lots that were allegedly enlarged relied in good faith on the cleancertificate of SJEI. Because subdivision let buyers were in good faith and did not notice any flawin SJEIs certificates of title, it is only fair and reasonable to apply the equitable principle ofestoppel by laches against the government to avosi an injustice to the innocent purchaser forvalue.

Public Lands: Only the State Can Institute Reversion ProceedingsURQUIAGA V CAJan. 22, 1999

Even assuming that private respondents acquired title to Let No. 6532-B through fraudand misrepresentation, it is only the State which may institute reversion proceedings under Sec.101 of the Public Land Act considering the finding that the subject lot was public land at the timeof the sales applications. This law provides:

Sec. 101. All actions for reversion to the Govt of land of the public domain orimprovements thereon shall be instituted by the SolGen or the officer acting in its stead, in theproper courts, in the name of the RP.

In other words, petitioners have no standing at all to question the validity of respondentstitle.

Land Registration: Effect of Withdrawal of Application for Land RegistrationDIR. OF LANDS VS. CA, ET AL.,Feb. 23, 1999

(1) Section 37 of the Land Registration Act (Act 246) mandates that the w/drawal of theapplication for land registration should not mean that the conflicting interests of the partiesceased to exist and therefore the land registration proceedings must be pursued to its conclusion.

The law states that an oppositor who claims ownership over the property covered by theapplication, or part thereof, may now claim in his answer that the land be registered in his namein the same proceeding.(2) The w/drawal of application for registration of land does not obliterate the conflicting claimsover the sale parcel of land. IF the Dir. Of Lands registers an adverse claim, the lower court isbound to determine the conflicting interest ofthe claimant and the applicant and incase neithersucceeds through evidence of proper title for registration, the court may dismiss the case. Anopposition presented by the Dir. Of Lands is for all intents and purposes, a conflicting interest asagainst that of the applicant or of the private oppositors, asserting a claim over the landregistered. Consequently, the w/drawal by either the applicant or any of the private oppositors

doesnt ipso fact obliterate the conflicting interests in the case. Neither is the case terminatedbecause under the law, as amended, the trial court is required to resolve the claims of theremaining parties, the withdrawal of the application by the applicant and/or some privateoppositors notwithstanding.

Civil Law/ land TitlesDELFIN VOLUNTAD et al. v. SPS. MAGTANGGOL & CORAZON DIZON, et al.August 1999

The general rule is that a person dealing with a registered land has a right to rely on theTorrens Certificate of Title without the need of inquiring further. But this rule cannot apply when


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the party has actual knowledge of facts and circumstances that would impel a reasonablycautious man to make such inquiry or when the purchaser has knowledge of a defect or lack oftitle in his vendor or of sufficient facts to induce a reasonably prudent man to inquire into thestatus of the title of the property in litigation. In the case at bar, respondent spouses who knew ofthe defect in title cannot be deemed buyers in good faith as against the true owner of the land orinterest thereon. In the case therefore, there is no need for petitioners to file a separate action toenforce their right to repurchase the property as against the new registered owners.

1998

Registered Land, Sale of; Buyers in good faith defined; Two Transfer Certificates of Title on sameland, RuleSPS. SONYA & ISMAEL MATHAY, JR v. CA, ET AL.September 1998

In the three cases merged in this one petition, petitioners, Sps. Mathay, claim title to threelots, which have been also bought and thereafter occupied by three different parties. The SCdismissed the petition.

A purchaser in good faith is one who buys property of another, without notice that someother person has a right to, or interest in, such property and pays a full and fair price for the sameat the time of purchase, or before he has notice of the claims or interest of some other person in

the property. As a rule, he who asserts the status of a purchaser in good faith and for value, hasthe burden of proving such assertion. Petitioners cant invoke good faith because at the time theproperty was sold to them, the private respondents were occupying and cultivating the property.Though as a rule, a person dealing with registered land need not go beyond the certificate of title,where there are circumstances which would put the party on guard, as is the case at bar, it isexpected from the purchaser to inquire first into the status and nature of the possession of theoccupants. Failure to do so would bar him from invoking the rights of a purchaser in good faith.

As stated in the case of Baltazar v. CA, between two persons both of whom are in goodfaith and both innocent of any negligence, the law must protect and prefer the lawful holder ofregistered title over the transferee of a vendor bereft of any transmissible rights. In the instantcase, petitioners have no rights against private respondents. Their recourse is against theirvendors.

Where two transfer certificates of title have been issued on different dates, to two

different persons, for the same parcel of land, even if both are presumed to be titleholders in goodfaith, it does not necessarily follow that he who holds the earlier title should prevail. The betterapproach, assuming a regularity in the issuance of the two titles, is to trace the originalcertificates from which the disputed certificates of title were derived. Should there be only onecommon original certificate, the transfer certificate issued on an earlier date along the line mustprevail, absent any anomaly or irregularity tainting the process of registration.

Land registration; Amendment and Alteration of Certificate of TitleERNESTO DAWSON, ET AL. v. REGISTER OF DEEDS OF Quezon City ET AL.September 1998

The case revolves around the issue of whether Sec. 108 of PD 1529 (Land RegistrationAct) applies in the instant case where a contract to sell is involved. The first buyer, Louis Dawson,died without having finished paying the whole amount, which obligation was assumed by

petitioners, his heirs. The RTC and CA refused the cancellation of the certificate in the name ofLouis Dawson and issuance of a new title in the name of petitioners.The SC allowed the application of Sec 108 of PD 1529 contending that this is a case of a

contract to sell and not a contract of sale. In the case of Salazar v. CA, in a contract of sale, thetitle to the property passes to the vendee upon the delivery of the thing sold; in a contact to sell,ownership is by agreement, reserved in the vendor and is not to pass to the vendee until fullpayment of the purchase price. Thus, since Louis Dawson was unable to pay the whole price,which was completely paid by petitioners, the property did not become part of the estate of LouisDawson. Partition is therefore not the proper remedy to determine the ownership of the lot whose


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title had not been vested in Louis Dawson during his lifetime as his death caused the loss of hisjuridical personality, which is the fitness to be the subject of legal relations.

1997

Civil Law/Land TitlesHEIRS OF FELICIDAD CANQUE, et al. v. CA, et al.July 1997

The mortgagor of titled real estate acquired under the Public Land Act but foreclosed by arural bank, may redeem said property within 2 years from registration of the sheriff's certificate ofsale; and if said mortgagor fails to expire such right, he or his heirs may still repurchase the landwithin 5 years from the expiration of the two-year redemption period.

Civil Law/Land TitlesTHE DIRECTOR OF LANDS v. CA, TEODORA ABISTADO, et al.July 1997

Is newspaper publication of the notice of initial hearing in an original land registrationcase mandatory or directory? Mandatory.

Admittedly, P.D. No. 1529, 23 provides that publication in the OG suffices to conferjurisdiction upon the land registration court. However, the question boils down to whether, absent

any publication in a NOGC, the land registration court can validly confirm and register the title ofprivate respondents. We hold in the negative.

The law used the term shall in prescribing the work to be done by the Commissioner ofLand Registration upon the latters receipt of the court order setting the time for initial hearing.The word denotes an imperative and thus indicates the mandatory character of a statute. P.D. No.1529, 23 requires notice of the initial hearing by means of publication, mailing and posting, all ofwhich must be complied with. If the intent of the law were otherwise, said section would not havestressed in detail the requirements of mailing of notices to all persons named in the petition.Indeed, if mailing of notices is essential, then by parity of reasoning, publication in a NOGC islikewise imperative since the law included such requirement in its detailed provision.

Further, a land proceedings is in rem, hence must be validated essentially throughpublication.

It may be asked why publication in a NOGC is mandatory when the law already requires

notice by publication in the OG, mailing and posting. The reason is due process and the realitythat the OG is not as widely read and circulated and is oftentimes delayed in its circulation.

Civil Law/Land Titles/ReconstitutionORTIGAS & CO. v. JUDGE TIRSO VELASCO & DOLORES MOLINAAugust 1997

R.A. No. 26, 13, lays down the requisites for acquisition by the court of jurisdiction overa proceeding for reconstitution of title:1) Publication, at petitioner's expense, of notice of the petition for reconstitution twice insuccessive issues of the OG, and posting thereof on the main entrance of the provincial buildingand of the municipal building of the municipality or city in which the land is situated, at least 30days prior to the date of hearing;2) Specific statement in the notice of the nubmer of the lost or destroyed certificates of title if

known, the name of the registered owner, the name of the occupants or persons in possession ofthe property, the owner of the adjoining properties and all other interested parties, the location,area and boundaries of the property, and the date on which all persons having any interesttherein must appear and file their claim or objection to the petition;3) Sending, by registered mail or otherwise, at the expense of petitioner, of a copy of thenotice to every person named therein (i.e., the occupants or persons in possession of theproperty, the owner of the adjoining properties and all other interested parties) whose address isknown, at least 30 days prior to the date of the hearing; and4) Submission by petitioner at the hearing of proof of the publication, posting and service ofnotice as directed by the court.


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Civil Law/Land TitlesJUAN C. CARVAJAL v. CA & SOLID HOMESG.R. No. 98328 October 1997

Is there denial of due process if an applicant for land registration is unable to testify?May a land registration court, after it is convinced that the property subject of an application forregistration under the Torrens system is already governed by an existing certificate, dismiss suchapplication and thus ignore petitioners insistence on submitting further evidence of his allegedtitle? What constitutes sufficient evidence to show identity of the land applied for with the landalready titled in favor of private respondent?

The petition has no merit.First Issue: Identity of the Property Applied For.The 2 reports prepared by the LRA and DENR Survey Division clearly showed that there

was an overlapping between the 2 properties. Because the futility of petitioners application wasapparent, the trial court deemed it unnecessary to hear further evidence. We agree.

There was nothing irregular in the trial courts order to the LRA and DENR to submitreports on the location of the land covered by petitioners application and private respondentscertificate of title. The authority of the land registration court to require the filing of additionalpapers to aid it in its determination of the propriety of the application is based on P.D. No. 1529,21, from which, it is also clear that ocular inspection of the property was merely discretionary,

not mandatory. Likewise, the land registration court was not obliged to order the survey of thecontested lot, especially when another government agency had already submitted a report findingthat the contested lot was identical with that described in private respondents certificate of titleand recommending dismissal of the application for registration.

Further, the order of the land court for the LRA and DENR to submit reports was inaccordance with the purposes of the LRA (Zuiga v. CA, 95 SCRA 740, 747 [1980])

Civil Law/Land Titles/ReconveyanceVICTORIA LEGARDA v. CA, NEW CATHAY HOUSE, INC

October 1997The parties entered into a lease agreement over a QC property owned by petitioner (123West Avenue). For some reason, petitioner refused to sign the contract, although New CathayHouse (NCH) made a deposit and a downpayment of rentals. Thus, NCH sued before the RTCfor specific performance with preliminary injunction and damages.

We do not have to belabor the fact that all the successors-in-interest of Cabrera to the lotwere transferees for value and in good faith, having relied as they did on the clean titles of theirpredecessors. The successive owners were each armed with indefeasible titles whichbrought them within the aegis of the Torrens system. It is settled that one who deals withregistered property under the Torrens system need not go beyond the same, but only has torely on the title; he is charged with notice only of such burdens and claims as are annotated onthe title. (Sandoval v. CA, 260 SCRA 283 [1996]) Here, no notice of lis pendens was everannotated on any of the titles. And even if there were such a notice, it would not have created a

lien over the property as the main office of a lien is to warn prospective buyers that the propertythey intend to purchase is the subject of a pending litigation. Therefore, since the property isalready in the hands of Luminlun, an innocent purchaser for value, it can no longer be returned toCabrera, much less to NCH.

Another thing to consider is that Cabrera was impleaded as a respondent only on 12August 1991, after promulgation of the Gancayco decision. The dispositive portion itself orderedNCH, not Cabrera, to reconvey the property to Legarda. Cabrera was never a party to this case.Neither did he act as NCH's representative. As held in NPC v. NLRC (G.R. No.s 90933-61, 29May 1997), jurisdiction over a party is acquired by voluntary appearance or by coercive process[summons]. In other words, until Cabrera was impleaded as party respondent and ordered to file


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a comment on 12 August 1991 resolution, the Court never obtained jurisdiction over him, and tocommand NCH to reconvey a property which used to be Cabrera's would be inappropriate as aviolation of due process.

Assuming that reconveyance is possible, that NCH and Cabrera are one the same andthat Cabrera's payment redounded to the benefit of NCH, reconveyance, under the facts andevidence here, would still not address the issues raised herein.

The application of the sale price to Legarda's judgment debt constituted a payment whichextinguished her liability to NCH as the party in whose favor the obligation to pay damages wasestablished. (Art. 1240, NCC) It was a payment in the sense that NCH had to resort to a court-supervised auction sale in order to execute the judgment. With fulfillment of the judgmentdebtor's obligation, nothing else was required to be done.

Under the Gancayco ruling, the order of reconveyance was premised on the allegedgross negligence of Coronel.

The fact that Cabrera is an NCH officer does not make him a purchaser in bad faith. Hisact in representing the company was never questioned nor disputed by Legarda. And while it istrue that he won in the bidding, it is likewise true that said bidding was conducted by the book.There is no call to be alarmed in case an official of the company emerges as the winning biddersince in some cases, the judgment creditor himself personally participates in the bidding.Legarda, as judgment debtor, cannot claim she was illegally deprived of her property becausesuch deprivation was done in accordance with the rules on execution of judgments. Whether the

money used to pay for said property came from the judgment creditor or its representative is notrelevant. What is important is that it was purchased for value. Cabrera parted with real money atthe auction. Had there been no real purchase and payment below, the subject property wouldnever have been awarded to Cabrera and registered in his name, and the judgment debt wouldnever have been satisfied. Thus, to require either NCH or Cabrera to reconvey the propertywould be an unlawful intrusion into the lawful exercise of the latter's proprietary right over the landin question, an act which would constitute an actual denial of property without due process.

It may be true that the lot could have fetched a higher price, but there is not hint of anyirregularity as regards Cabrera's bid price. Further, despite this low selling price, Legarda stillfailed to redeem her property within the 1-year redemption period. She could not feign ignoranceof the auction sale on account of her counsel's failure to inform her, as the auction sale compliedwith requirements of notice and publication under the Rules. In absence of any clear andconvincing proof that such requisites were not followed, the presumption of regularity stands.

While Legarda maintains she was in the U.S. during the redemption period, she admitted that sheleft only 16 days after the auction sale; moreover, her mother represented her during the latter'sabsence.

Neither NCH nor Cabrera should be made to suffer the gross negligence of Coronel. IfLegarda may be said to be innocent because she was ignorant of her counsel's negligence, withmore reason are NCH and Cabrera innocent. As between 2 parties who may lose out tonegligence or incompetence of counsel of one, the party who was responsible for making ithappen should suffer the consequences. This reflects a basic common law maxim. Here it wasLegarda who misjudged and hired the services of a lawyer who practically abandoned her caseand who continued to retain him even after his proven apathy and negligence.The Gancayco decision makes much of the fact that Legarda is now consigned to penury" and,therefore, the Court "must come to the aid of the distraught client." It must be remembered,however, that this Court renders decision not on the basis of emotions, but on its sound judgment,

applying the relevant law. Much as we may pity Legarda, we cannot play the role of a "knight inshining armor"

Civil Law/Land TitlesDANIEL C. VILLANUEVA v. CA, LAND REGISTRATION AUTHORITY, OO KIAN TIOKNovember 1997

In Magdalena Homeowners v. CA (184 SCRA 325, 329-30 [1990]), this Court enumeratedthe cases where a notice of lis pendens is proper:

1) action to recover possession of real estate2) action to quiet title


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3) action to remove clouds4) action for partition5) any other proceeding of any kind in court directly affecting the title to the land or

the use or occupation thereof or the buildings thereon.Elements to annotate a notice of lis pendens: (1) property must be of such character as

to be subject to the rule; (2) court must have jurisdiction both over the person and the res; and (3)property or res involved must be sufficiently described in the pleadings.

Only the first requisite is at issue here.Although it is not necessary for the applicant to prove his ownership or interest over the

property sought to be affected by lis pendens, the applicant must, in the complaint or answer filedin the case, assert a claim of possession or title over the subject property in order to give duecourse to his application. As settled, lis pendens may be annotated only where there is an actionor proceeding in court which affects the title to, or possession of, real property.

A notice of lis pendens does not create a nonexistent right or lien. It serves merely as awarning to a person who contracts on the subject property that he does so at his peril and subjectto the result of the pending litigation. The registration of the notice of lis pendens is done withoutleave of court. The Rule merely requires an affirmative relief to be claimed in the answer toenable a defendant to apply for the annotation of the notice. There is no requirement that anapplicant-defendant must prove his right or interest over the property sought to be annotatedupon.

To require that an applicant must prove his ownership or his interest over the propertysought to be affected with the notice of lis pendens will unduly restrict the scope of the rule. Insuch case, a party questioning the ownership of the registered owner will litigate his or her casewithout an assurance that the property will be protected from unwanted alienation orencumbrance during the pendency of the action, thereby defeating the very purpose and rationaleof the registration.

Civil Law/Land Titles/Innocent Purchaser for ValueGLORIA R. CRUZ v. CA, ROMY V. SUZARA & MANUEL R. VIZCONDENovember 1997Petitioner owned a lot in QC. In 1977, she lived-in with Romy Suzara without benefit of marriage.In 1982, solely out of love and affection, she executed a deed of sale in Romys favor without

monetary consideration. Romy registered the document in his favor and used the property ascollateral for a bank loan. Romy failed to pay off the loan, thus the mortgage was foreclosed.Petitioner paid the bank to restructure the loan, resulting in the extension of the redemptionperiod to 2 years. But without petitioners knowledge, Romy redeemed the property andthereafter avoided petitioner. Thus petitioner filed an affidavit of adverse claim with the RD of QC,asserting that the sale to Ronmy was void for lack of consideration and for being contrary to lawand public policy. Petitioner then sued before the RTC for quieting of title, declaration of nullity ofdocuments, etc.

The RTC ruled that the sale between petitioner and Romy was valid, with love, affectionand accomodation being the consideration for the sale; further, that Vizconde was an innocentpurchaser for value. The CA affirmed.

We cannot sustain petitioner. Although under Art. 1490, a husband and wife cannot sellproperty to one another as a rule which, for policy considerations requires that the prohibition

apply to common-law relationships (Calimlim v. Fortun, 129 SCRA 675 [1984]), petitioner can nolonger seek reconveyance of the property as it has already been acquired by Vizconde in goodfaith and for value.

Both lower courts found that on 22 December 1989, when Romy executed the deed ofsale in favor of Vizconde, Romy was the registered owner and nothing was annotated in thecertificate to indicate a flaw in Romys title. It was only on 22 January 1990 that petitioner filedher adverse claim with the RD.

This is without prejudice to any appropriate remedy petitioner may take against Romy.

Civil Law/Land Titles; Lease


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REPUBLIC, represented by the Dir. of Lands v. CA, JOSEFINA L. MORATO, et al.November 1997

Will the lease and/or mortgage of a portion of a realty acquired through free patentconstitute sufficient ground for the nullification of the grant? Should such property revert to theState once it is invaded by the sea and thus becomes foreshore land?

First. Under the Public Land Act (C.A. No. 141), 118, 121, 122 and 124, anyencumbrance of a parcel of land acquired under a free patent or homestead within 5 years fromsuch grant is prohibited = cancellation of grant and reversion of land to public domain.Encumbrance has been defined as anything that impairs the use or transfer of property; anythingwhich constitutes a burden on the title; a burden or charge upon property; a claim or lien uponproperty.

The lease and mortgage constitute encumbrances as the grantee (Morato) cannot fullyuse or enjoy the land during the duration of the lease. In a contract of lease which is consensual,bilateral, onerous and commutative, the owner temporarily grants the use of his or her property toanother who undertakes to pay rent therefor. During the term of the lease, the grantee cannotenjoy the beneficial use of the land leased, this the Public Land Act prohibits.

As regards the mortgage, it clearly constitues an encumbrance prohibited by the law asforeclosure of such mortgage would necessarily result in the auction of the property.

Second. Re: foreshore land reverting to the public domain.Petitioner correctly contends that Morato cannot own foreshore land, although

respondents contend that it is unfair if Morato will be deprived of the whole property just becausea portion thereof was immersed in water for reasons not of her own doing.

Here, the free patent application was made in 1972. However, the land has sincebecome foreshore land. Thus, it can no longer be subject of a free patent, with Govt. v. Cabagis(53 Phil. 112, 115-16 [1929]) explaining the rationale for this proscription, i.e., where an ownerhas to all intents and purposes abandoned the land and permitted it to be totally destroyed so asto become part of the seashore, the land passes on to the public domain but the owner thusdispossessed does not retain any right to the natural products resulting from their new nature; itis a de facto case of eminent domain and not subject to indemnity.

When the sea moved towards the estate and the tide invaded it, the invaded propertybecame foreshore land and passed to the realm of the public domain.

Civil Law/Land Titles

HEIRS OF MARCIANO NAGAO v. CA, et al.November 1997It is settled that a MTD hypothetically admits the truth of the facts alleged therein. In their

complaint, private respondents specifically alleged that they were owners of a portion of the lot forhaving possessed it in the concept of an owner, openly, peacefully, etc., since 1920. This claim isan assertion that the lot was private land, or that even assuming it was part of the public domain,private respondents ahd already acquired imperfect title thereto under C.A. No. 141, 48, underwhich, a lot is segregated from the public domain as the beneficiary is conclusively presumed tohave performed all the conditions essential to a Government grant.

Thus, merely on the basis of the allegations of the complaint, the lot in question wasapparently beyond the jurisdiction of the Director of Lands and could not be the subject of a FreePatent. Hence, dismissal of private respondents' complaint was premature and trial on the meritsshould have been conducted to thresh out evidentiary matters.

It would been entirely different if the action were clearly for reversion, in which case, itwould have to be instituted by the Sol-Gen, pursuant to 101, C.A. No. 141.In light of the above, and at this time, prescription is unavailing against private

respondents' action. A free patent issued over private land is void. Further, private respondents'claim of open, public, etc., possession since 1029 and its illegal inclusion in petitioners' freepatent gave private respondents a cause of action for quieting of title, which is imprescriptible.Thus private respondents' complaint may thus likewise be considered an action for quieting oftitle.


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1996

Land Titles; Adverse ClaimGARBIN v. CAFebruary 1996Does the registration of an adverse claim prevail over the title which was registered subsequentto the adverse claim? HELD: No. Under Act No. 496, 110, the purpose of an adverse claim isto protect the interest of a person over a piece of real property where the registration of suchinterest or right is not otherwise provided for by the Land Registration Act, and serve as noticeand warning to third parties dealing with said property that someone is claiming an interest on thesame or a better right than the registered owner.In case at bench, what was registered was merely the adverse claim, and not the Deed of Sale.Therefore, there is still need to resolve the former's validity in separate proceedings, as there isan absence of registration of the actual conveyance of the portion of land therein claimed byprivate respondents.

Land Titles; ReconstitutionNEW DURAWOOD v. CAFebruary 1996R.A. No. 26, 13 applies only in cases of reconstitution of lost or destroyed original certificates on

file with the Register of Deeds, while P.D. No. 1529, 109 governs petitions for issuance of newowner's duplicate certificates of title which are lost or stolen or destroyed. (The former isexpressly provided for in P.D. No. 1529, 110.)In Demetriou v. CA (238 SCRA 158, 162 [1994]), we ruled that if a certificate of title has not beenlost but is in fact in the possession of another person, the reconstituted title is void and the courtrendering the decision has not acquired jurisdiction. Consequently, the decision may be attackedat any time. In case at bench, the owner's duplicate certificates of title were not "lost ordestroyed," hence, there was no necessity for the petition filed in the trial court for the "Issuanceof New Owner's Duplicate Certificates of Title x x x." In fact, the said court never acquired

jurisdiction to order the issuance of new certificates. Hence, the newly issued duplicates arethemselves void.It is obvious that this lapse happened because of failure to follow the procedure in P.D. No. 1529:1) No notice of loss or theft sent to the Register of Deeds.

2) 107 provides that in case of the refusal or failure of the holder to surrender the owner'sduplicate certificate of title, the remedy is a petition in court to compel surrender thereof to theRegister of Deeds, and not a petition for reconstitution.

Land Titles; MortgageSTATE INVESTMENT HOUSE v. CAMarch 1996Petitioner's registered mortgage over the property is inferior to that of respondents-spouses'unregistered right. The unrecorded sale between respondents-spouses and Solid is preferred forthe reason that if the original owner (Solid) had parted with his ownership of the thing sold thenhe no longer had ownership and free disposal of that thing so as to be able to mortgage it again.Registration of the mortgage is of no moment since it is understood to be without prejudice to thebetter right of third parties. (citations omitted)

Petitioner asserts that a purchaser or mortgagee of land covered under the Torrens System is notrequired to do more than rely upon the certificate of title. HELD: As a general rule, where there isnothing in the certificate of title to indicate any cloud or vice in the ownership of the property, orany encumbrance thereon, the purchaser is not required to explore further than what the TorrensTitle upon its face indicates in quest for any hidden defect or inchoate right that may subsequentlydefeat his right thereto. This rule, however, admits of an exception as where the purchaser ormortgagee, has knowledge of a defect or lack of title in his vendor xxx In this case, petitioner waswell aware it was dealing with Solid, a business entity engaged in the business of sellingsubdivision lots. In Sunshine v. IAC (203 SCRA 210), the Court, noting petitioner therein to be a


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financing corporation, deviated from the general rule that a purchaser or mortgagee of a land isnot required to look further than what appears on the face of the Torrens Title.

REPUBLIC v. CAMarch 1996Once a patent is registered under Act No. 496 (now P.D. No. 1529) and the correspondingcertificate of title is issued, the land ceases to be part of the public domain and becomes privateproperty over which the Director of Lands will no longer have either control or jurisdiction. (Dir. ofLands v. De Luna, 110 Phil. 28 [1960]) The Torrens Title issued on the basis of a free orhomestead patent becomes as indefeasible as one which was judicially secured upon theexpiration of one year from date of issuance of patent. However, even after the lapse of one year,the State may still bring an action under 101 of the Public Land Act for the reversion to the publicdomain of lands which have been fraudulently granted to private individuals. This has been theconsistent ruling of this Court. (citations omitted)

REPUBLIC v. CA & HEIRS OF RIBAYAJuly 1996The CA erred in holding that the Republic was barred, as the OCT was conclusive against allpersons. One year after its transcription which is the date of its effectivity said certificate of titlebecame incontrovertible. First, the one-year period provided for in Section 38 of Act No. 496

merely refers to a petition for review and is reckoned from the entry of decree. In the secondplace, there are other remedies available to an aggrieved party after the said one-year period,e.g., reconveyance, covered by Section 55 of Act No. 496 which, inter alia, provides that "in allcases of registration procured by fraud, the owner may pursue all his legal and equitableremedies against the parties to such fraud, without prejudice, however, to the rights of anyinnocent holder for value of a certificate of title." Likewise, an action for damages is sanctioned incases where the property has been transferred to an innocent purchaser for value, which may befiled within four years from discovery of the fraud. Recourse may also be had against theAssurance Fund.Finally, prescription never lies against the State for the reversion of property which is part of thepublic forest or of a forest reservation which was registered in favor of any party. Then too, publicland registered under the Land Registration Act may be recovered by the State at any time."Public land fraudulently included in patents or certificates of title may be reverted to the state in

accordance with Section 101 of the Public Land Act.

Civil Law/Land TitlesREPUBLIC v. CA & HEIRS OF DEMOCRITO O. PLAZAJuly 1996Petitioner argues that the burden rests on applicant to show by convincing evidence that he hasregistrable title over the property, which he failed to do. Further, aside from mere taxdeclarations, all of recent vintage, private respondent has not established actual possession ofthe property in the manner required by law (14, P.D. 1529) and jurisprudence.Although tax declarations not conclusive, good indicia of possession in concept of owner. Theyconstitute at least proof that the holder has a claim of title over the property. Such an actstrengthens one's bona fide claim of acquisition of ownership.Registration does not vest title. It is merely evidence of such title.

Civil Law/Land Titles/Public Land Act (C.A. No. 141)CLARA ATONG VDA. DE PANALIGAN, et al. v. CA, RTC S. COTOBATO, GAUDENCIOSUPERIORIDAD & SOCORRO BARRIOSJuly 1996The case involves the simple issue of redemption as provided for in 119, C.A. No.141.Petitioners contend that the CA ruling goes against State Investment House v. CA (215SCRA 734 [1992]), that in exercising the r ight of redemption, tender of payment of the repurchaseprice is necessary. Petitioners point out that during the hearings before the trial court, privaterespondents could not readily deposit the repurchase price. Petition has no merit.


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State Investment is not applicable because it did not involve land granted under a homestead orfree patent, but an ordinary parcel of land which was mortgaged and foreclosed. Redemptionwas thus being exercised under civil law provisions and not under 119, C.A. No. 141, whichapplies here.

Tender of payment of the repurchase price is not among the requisites of the law and istherefore unnecessary. In PNB v. CA (179 SCRA 619 [1989]), with reference to 2 parcels of landacquired under a free patent for which redemption within 5 years was conceded by petitioner, theCourt held that it was not even necessary for the preservation of the right of redemption to makean offer to redeem or tender of payment of purchase price within 5 years. The filing of an actionto redeem within that period is equivalent to a formal offer to redeem. There is not even a needfor consignation of the redemption price.

HEIRS OF LUIS GONZAGA, et al. v. CA & SPS. JOSE LEELINSeptember 1996Civil Law/Land Titles: [After declaring that MWSS v. CA, 215 SCRA 783 (1992) is four-square re:overlapping titles], [t]he present controversy hinges on the question as to who, betweenpetitioners and private respondents, have legal and valid title to the two lots.. In MWSS, weruled: Although petitioner's title was issued in 1940 [earlier than private respondents'] it will benoted that petitioner's title was based on the cadastral survey of Kaloocan City, Cadastral CaseNo. 34, while private respondents' title was derived from OCT No. 994 issued on April 19, 1917.

In Pamintuan v. San Agustin, this Court ruled that in a cadastral case the court has no jurisdictionin an earlier land registration case and a second decree for the same land is null and void.Where two certificates of title purport to include the same land, the earlier in date prevails. xxx Insuccessive registrations, where more than one certificate is issued in respect of a particularestate in land, the person claiming under the prior certificate is entitled to the estate xxx Lastly, acertificate is not conclusive evidence of title if it is shown that the same land had already beenregistered and an e