Page |1

HEIRS OF LEOPOLDO VENCILAO, SR., represented by their

Administrator
ELPIDIO
VENCILAO, petitioner, vs.
COURT
OF
APPEALS, SPOUSES SABAS and RUPERTA GEPALAGO, and
DOMICIANO GEPALAGO, respondents.
DECISION
BELLOSILLO, J.:
Between two (2) sets of claimants of real property - those claiming
ownership by acquisitive prescription, and those asserting ownership on the
basis of a deed of sale recorded in the certificate of title of the vendor as
mortgagee and highest bidder in a foreclosure sale - who has a better right?
On 12 February 1990 the heirs of Leopoldo Vencilao Sr., represented by
their Administrator Elpidio Vencilao, filed with the Regional Trial Court of
Bohol a complaint for quieting of title, recovery of possession and/or
ownership, accounting and damages with prayer for the issuance of writs of
preliminary prohibitory and mandatory injunction against the spouses Sabas
and Ruperta Gepalago.[1] The complaint was subsequently amended to
include an action for reconveyance and cancellation of title and to implead
defendant Domiciano Gepalago.[2]
The heirs of Leopoldo Vencilao Sr. alleged that they were the absolute
owners of a parcel of land situated in Cambansag, San Isidro, Bohol, with an
area of 3,625 square meters having inherited the same from their father,
Leopoldo Vencilao Sr., who during his lifetime was in peaceful, open,
notorious and uninterrupted possession and enjoyment of the property in
the concept of owner, declared the property for taxation purposes under Tax
Declaration No. 37C6-344 and religiously paid the real estate taxes. He
likewise had the property consistently declared as his own in other
documents, e.g., those relevant to the 1987 Comprehensive Agrarian
Reform Program (CARP). After his death, his heirs continued to possess and
enjoy the property.
The Gepalago spouses, on the other hand, denied all the material
allegations in the complaint and claimed that they were the registered
owners of a 5,970-square meter property located in Candungao Calapo, San
Isidro, Bohol, and covered by TCT No. 16042, previously a portion of a
1,401,570 square-meter land originally owned by a certain Pedro
Luspo. The entire parcel of land was mortgaged by Pedro Luspo to the
Philippine
National
Bank
(PNB)
as
security for a
loan. Since Luspo failed to pay the obligation upon maturity the
mortgage was foreclosed. Thereafter PNB, the highest bidder in the
foreclosure sale, conveyed the whole property to fifty-six (56) vendees

Page |2

among whom were the spouses Sabas and Ruperta Gepalago who acquired
the 5,970 square-meter portion thereof. Since then, they had been the
owner and possessor of the land until they donated the same in 1988 to
their son Domiciano Gepalago.
The trial court appointed a commissioner to survey the litigated property
and determine the areas claimed by both parties. The commissioner
reported that the area claimed by the Vencilaos was included in the titled
property of the Gepalagos. On the basis of the commissioners report and
the other pieces of evidence presented by the parties, the trial court found
the following: (a) The property claimed by the Gepalagos consisted of 5,970
square meters, while that of the Vencilaos covered an area of 22,401.58
square meters as indicated in the survey plan submitted by Engr. Jesus H.
Sarmiento, the court appointed commissioner; (b) Insofar as the survey plan
and report submitted by Engr. Sarmiento were concerned, these indubitably
established the fact that the Vencilaos owned the excess area of 16,431.58
square meters which was clearly outside the area claimed by the Gepalagos;
(c) The lot in question had been titled to defendant Sabas Gepalago and
subsequently titled to his son, defendant Domiciano Gepalago, under
Transfer Certificate of Title No. 18621 by virtue of a deed of donation
executed on 25 October 1988 by Sabas Gepalago in favor of Domiciano
Gepalago; and, (d) As stated in the commissioners report, "If the titled lot
of Domiciano Gepalago is plotted in accordance with the technical description
appearing in the title, it will be relocated to more than 219 kilometers
eastward away from its supposed actual location. This amounts to its nonexistence."[3]
The trial court then ruled in favor of the Vencilaos holding that they had
been in possession, cultivation and enjoyment of the litigated property for
more than thirty (30) years and that the improvements therein were
introduced by them long before any title was ever issued to the
Gepalagos. The lower court added that there was ample evidence showing
that the Gepalagos knew when they bought the property from PNB that the
land had long been possessed and enjoyed in the concept of owners by the
Vencilaos. Thus, while under ordinary circumstances a certificate of title is
indefeasible, it is not so when a person with prior knowledge of the
ownership and possession of the land by another obtains title to it.
The Gepalagos appealed the decision of the trial court. After due
consideration, the Court of Appeals reversed the trial court and declared the
Gepalagos owners of the disputed property Evidently, defendant-appellants spouses Gepalago were purchasers in good
faith and for value. They acquired their share in the property from the
Philippine National Bank (PNB) which was the registered owner. Even

Page |3

assuming they had knowledge of the plaintiff-appellees' possession of the

said property at the time of the purchase, it was PNB which was the
registered owner of the property. The title was transferred to the bank after
the foreclosure sale of the property mortgaged by the previous registered
owner, Pedro Luspo. Thus where the certificate of title is in the name of the
vendor when the land is sold, the vendee for value has the right to rely on
what appears on the certificate of title. The rule that all persons dealing
with property covered by Torrens Certificate of Title are not required to go
beyond what appears on the face of the title is well-settled.
Granting that plaintiff-appellees were possessors of the property for a long
time, they never raised objections to the transactions affecting the
land. There was no action made or any protest recorded with the Register of
Deeds.
Defendant-appellants claim of ownership was evidenced by certificates of
title issued in their names. A Torrens Certificate of Title is the best evidence
of ownership of a registered land. As against the allegations of plaintiffappellees,
defendant-appellants
are
the
ones
entitled
to
the
property. Defendant-appellants ownership of the property was evidenced
by a certificate of title while plaintiff-appellees relied merely on tax
declaration. Torrens title is generally a conclusive evidence of the ownership
of the land referred to therein. Defendant-appellants acquired the land in a
foreclosure sale and there was no evidence to show that plaintiff-appellees
were defrauded when the property was mortgaged and then sold x x x x [4]
The motion for reconsideration by the
denied[5] they filed the instant petition for review.

Vencilaos

having

been

In awarding the disputed land to petitioners, the trial court erroneously

found that petitioners had been in possession and enjoyment of the property
for more than thirty (30) years. It should be noted that the land in dispute
is a registered land placed under the operation of the Torrens system way
back in 1959, or more than thirty (30) years before petitioners instituted the
present action in the court a quo, and for which Original Certificate of Title
No. 400 was issued.[6] The rule is well-settled that prescription does not run
against registered land. Thus, under Sec. 47 of PD 1529, otherwise known
as the Property Registration Decree, it is specifically provided that "no title
to registered land in derogation of that of the registered owner shall be
acquired by prescription or adverse possession." A title, once registered,
cannot be defeated even by adverse, open and notorious possession. The
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.[7]All persons
must take notice and no one can plead ignorance of the registration.[8]

Page |4

Neither can the tax declarations and tax receipts presented by petitioners
as evidence of ownership prevail over respondents certificate of title which,
to reiterate, is an incontrovertible proof of ownership. It should be stressed
that tax declarations and receipts do not by themselves conclusively prove
title to the land.[9] They only constitute positive and strong indication that
the taxpayer concerned has made a claim either to the title or to the
possession of the property for which taxes have been paid.[10] Stated
differently, tax declarations and tax receipts are only prima facie evidence of
ownership or possession.
But assuming ex gratia argumenti that petitioners had indeed acquired
the land they were claiming by prescription, there likewise exists a serious
doubt on the precise identity of the disputed property. What petitioners
claimed in their complaint was a parcel of land located in Cambansag, San
Isidro, Bohol, with an area of 3,625 square meters.[11] This clearly differs
from the piece of land registered in the name of the Gepalagos, which is Lot
No. A-73 of the Subdivision Plan (LRC) Psd-60558, LRC Rec. No. H-4251,
and located in Candungao Calapo, San Isidro, Bohol, with an area of 5,970
square meters.[12] Even the commissioners report failed to clarify the
difference in the area and location of the property claimed. In order that an
action to recover ownership of real property may prosper, the person who
claims that he has a better right to it must prove not only his
ownership of the same but also satisfactorily prove the identity thereof.[13]
As a general rule, where the certificate of title is in the name of the
vendor when the land is sold, the vendee for value has the right to rely on
what appears on the face of the title.[14] He is under no obligation to look
beyond the certificate and investigate the title of the vendor appearing on
the face of the certificate. By way of exception, the vendee is required to
make the necessary inquiries if there is anything in the certificate of title
which indicates any cloud or vice in the ownership of the
property.[15] Otherwise, his mere refusal to believe that such defect exists,
or his willful closing of his eyes to the possibility of the existence of a defect
in his vendors title, will not make him an innocent purchaser for value if it
afterwards develops that the title was in fact defective, and it appears that
he had such notice of the defect as would have led to its discovery had he
acted with that measure of precaution which may reasonably be required of
a prudent man in a like situation.[16]
Petitioners maintain that it is the exception, not the general rule, which
should be applied in this case. They argue that respondents had knowledge
of prior possession and enjoyment by petitioners when they purchased the
property. Thus, they were not innocent purchasers for value and could not
invoke the indefeasibility of their title.

Page |5

We do not agree. The exception contemplates a situation wherein there

exists a flaw in the title of the vendor and the vendee has knowledge or at
least ought to have known of such flaw at the time he acquired the property,
in which case, he is not considered as an innocent purchaser for value. In
the instant case, we discern nothing from the records showing that the title
of PNB, the vendor, was flawed. Petitioners not only failed to substantiate
their claim of acquisitive prescription as basis of ownership but they also
failed to allege, and much less adduce, any evidence that there was a defect
in the title of PNB. In the absence of such evidence, the presumption leans
towards the validity of the vendors title.
Therefore, inasmuch as there was no flaw in the title of PNB, private
respondents rightly believed that they could and did acquire likewise a
flawless title. Indeed, as a result of the deed of conveyance between PNB
and private respondents, there was transmission of ownership and the latter
stepped into the shoes of the former hence entitled to all the defenses
available to PNB, including those arising from the acquisition of the property
in good faith and for value.
Finally, another consideration that militates heavily against the present
petition is the unusual silence of petitioners while the ownership of the
disputed land transferred from one person to another. There were at least
three (3) transactions on record involving the property: first, the contract of
mortgage between Luspo and PNB whereby the property was used as
security for the loan contracted by Luspo; second, the foreclosure of
mortgage upon the failure of Luspo to pay the loan and the subsequent sale
of the property at public auction; and, third, the sale of the property to
fifty-six (56) vendees, among whom were the Gepalago spouses. Each of
these transactions was registered and a corresponding transfer certificate
issued in favor of the new owner. Yet in all these, petitioners never
instituted any action contesting the same nor registered any objection
thereto; instead, they remained silent. Thus, they are now estopped from
denying the title of the present owner. Having failed to assert their rights, if
any, over the property warrants the presumption that they have either
abandoned them or declined to assert them. Or, it could likewise be
inferred therefrom that petitioners themselves were not convinced in the
validity of their claim.
WHEREFORE, the petition is DENIED. The Decision of the Court of
Appeals of 31 July 1995 as well as its Resolution of 14 December 1995
denying reconsideration is AFFIRMED. Costs against petitioners.
SO ORDERED.
Davide, Jr., (Chairman), Vitug, Panganiban, and Quisumbing, JJ., concur.

Page |6

[G.R. No. L-22486. March 20, 1968.]

TEODORO ALMIROL, Petitioner-Appellant, v. THE REGISTER OF
DEEDS OF AGUSAN,Respondent-Appellee.
SYLLABUS
1. LAND REGISTRATION; REGISTER OF DEEDS; NO POWER TO DETERMINE
VALIDITY OF DOCUMENT. The Register of Deeds may not validly refuse to
register a deed of sale presented to him for registration. Whether a
document is valid or not, is not for the Register of Deeds to determine; this
function belongs properly to a court of competent jurisdiction. Indeed, a
register of deeds is entirely precluded by Section 4 of Republic Act 1151
from exercising his personal judgment and discretion when confronted with
the problem of whether to register a deed or instrument on the ground that
it is invalid. For under the said section, when he is in doubt as to the proper
step to be taken with respect to any deed or other instrument presented to
him for registration, all that he is supposed to do is to submit and certify the
question to the Commissioner of Land Registration who shall, after notice
and hearing, enter an order prescribing the step to be taken on the doubtful
question.
2. ID.; ID.; ID.; REFUSAL TO REGISTER; EXHAUSTION OF ADMINISTRATIVE
REMEDIES. Mandamus does not lie to compel the register of deeds to
register the deed of sale in question, because pursuant to the provisions of
Section 4 of Republic Act 1151, where any party in interest does not agree
with the register of deeds, the question shall be submitted to the
Commissioner of Land Registration, whose decision on the matter shall be
binding upon all register of deeds. Hence, this administrative remedy must
be resorted to, before there can be recourse to the courts.
DECISION
CASTRO, J.:
On June 28, 1961 Teodoro Almirol purchased from Arcenio Abalo a parcel of
land situated in the municipality of Esperanza, province of Agusan, and
covered by original certificate of title P-1237 in the name of "Arcenio Abalo,
married to Nicolasa M. Abalo." Sometime in May, 1962 Almirol went to the
office of the Register of Deeds of Agusan in Butuan City to register the deed
of sale and to secure in his name a transfer certificate of title. Registration
was refused by the Register of Deeds upon the following grounds, inter alia,
stated
in
his
letter
of
May
21,
1962:

Page |7

"1. That Original Certificate of Title No. P-1237 is registered in the name of
Arcenio Abalo, married to Nicolasa M. Abalo, and by legal presumption, is
considered
conjugal
property;
"2. That in the sale of a conjugal property acquired after the effectivity of
the New Civil Code it is necessary that both spouses sign the document; but
"3. Since, as in this case, the wife has already died when the sale was made,
the surviving husband can not dispose of the whole property without
violating the existing law (LRC Consulta No. 46 dated June 10, 1958).
"To effect the registration of the aforesaid deed of absolute Sale, it is
necessary that the property be first liquidated and transferred in the name
of the surviving spouses and the heirs of the deceased wife by means of
extrajudicial settlement or partition and that the consent of such other heir
or heirs must be procured by means of another document ratifying this sale
executed
by
their
father."
virtua1aw
library
In view of such refusal, Almirol went to the Court of First Instance of Agusan
on a petition for mandamus (sp. civ. case 151), to compel the Register of
Deeds to register the deed of sale and to issue to him the corresponding
transfer certificate of title, and to recover P5,000 in moral damages and
P1,000 attorneys fees and expenses of litigation. It is Almirols assertion
that it is but a ministerial duty of the respondent to perform the acts
required of him, and that he (Almirol) has no other plain, speedy and
adequate
remedy
in
the
ordinary
course
of
law.
In his answer with counterclaim for P10,000 damages, the respondent
reiterated the grounds stated in his letter of May 21, 1962, averred that the
petitioner has "other legal, plain, speedy and adequate remedy at law by
appealing the decision of the respondent to the Honorable Commissioner of
Land Registration," and prayed for dismissal of the petition.
In its resolution of October 16, 1963 the lower court, declaring that
"mandamus does not lie . . . because the adequate remedy is that provided
by Section 4 of Rep. Act 1151," dismissed the petition, with costs against the
petitioner.
Hence

the

present

appeal

by

Almirol.

The only question of law tendered for resolution is whether mandamus will
lie to compel the respondent to register the deed of sale in question.
Although the reasons relied upon by the respondent evince a sincere desire

Page |8

on his part to maintain inviolate the law on succession and transmission of

rights over real properties, these do not constitute legal grounds for his
refusal to register the deed. Whether a document is valid or not, is not for
the register of deeds to determine; this function belongs properly to a court
of
competent
jurisdiction.
1
"Whether the document is invalid, frivolous or intended to harass, is not the
duty of Register of Deeds to decide, but a court of competent jurisdiction."
(Gabriel v. Register of Deeds of Rizal, Et Al., L- 17956, Sept. 30, 1963).
". . . the supposed invalidity of the contracts of lease is no valid objection to
their registration, because invalidity is no proof of their non-existence or a
valid excuse for denying their registration. The law on registration does not
require that only valid instruments shall be registered. How can parties
affected thereby be supposed to know their invalidity before they become
aware, actually or constructively, of their existence or of their provisions? If
the purpose of registration is merely to give notice, then questions regarding
the effect or invalidity of instruments are expected to be decided after, not
before, registration. It must follow as a necessary consequence that
registration must first be allowed, and validity or effect litigated afterwards."
(Gurbax Singh Pablo & Co. v. Reyes and Tantoco, 92 Phil. 182-183).
Indeed, a register of deeds is entirely precluded by section 4 of Republic Act
1151 from exercising his personal judgment and discretion when confronted
with the problem of whether to register a deed or instrument on the ground
that it is invalid. For under the said section, when he is in doubt as to the
proper step to be taken with respect to any deed or other instrument
presented to him for registration, all that he is supposed to do is to submit
and certify the question to the Commissioner of Land Registration who shall,
after notice and hearing, enter an order prescribing the step to be taken on
the doubtful question. Section 4 of R.A. 1151 reads as follows:
"Reference of doubtful matters to Commissioner of Land Registration.
When the Register of Deeds is in doubt with regard to the proper step to be
taken or memorandum to be made in pursuance of any deed, mortgage, or
other instrument presented to him for registration, or where any party in
interest does not agree with the Register of Deeds with reference to any
such matter, the question shall be submitted to the Commissioner of Land
Registration either upon the certification of the Register of Deeds, stating
the question upon which he is in doubt, or upon the suggestion in writing by
the party in interest; and thereupon the Commissioner, after consideration
of the matter shown by the records certified to him, and in case of registered
lands, after notice to the parties and hearing, shall enter an order
prescribing the step to be taken or memorandum to be made. His decision in

Page |9

such cases shall be conclusive and binding upon all Registers of Deeds:
Provided, further, That when a party in interest disagrees with the ruling or
resolution of the Commissioner and the issue involves a question of law, said
decision may be appealed to the Supreme Court within thirty days from and
after
receipt
of
the
notice
thereof."
virtua1aw
library
The foregoing notwithstanding, the court a quo correctly dismissed the
petition for mandamus. Section 4 abovequoted provides that "where any
party in interest does not agree with the Register of Deeds .. the question
shall be submitted to the Commissioner of Land Registration," who
thereafter shall "enter an order prescribing the step to be taken or
memorandum to be made," which shall be "conclusive and binding upon all
Registers of Deeds." This administrative remedy must be resorted to by the
petitioner
before
he
can
have
recourse
to
the
courts.
ACCORDINGLY, the Resolution of the lower court of October 16, 1963 is
affirmed, at petitioners cost.
Gallardo vs. Intermediate Appellate Court,
G.R. No. L-67742, 155 SCRA 248 , October 29, 1987
PARAS, J.:
This is a petition for review on certiorari seeking to set aside or reverse the
decision * of the Intermediate Appellate Court (now Court of Appeals)
promulgated on May 22, 1984 in AC-G.R. CV No. 69946 entitled Meliton
Gallardo and Teresa Villanueva v. Marta Villanueva vda. de Agana, et al.
(Rollo, p. 37) affirming the decision ** of the Court of First Instance of
Laguna 8th Judicial District, Branch II, Sta. Cruz, Laguna (now Regional Trial
Court, Sta. Cruz, Laguna) dated January 20, 1982, which dismissed the
complaint for Quieting of Title in Civil Case No. SC-1492 and declared
the plaintiff's (petitioner's herein) Re-constituted Transfer Certificate of Title
RT-6293 (No. 23350) as null and void (Record on Appeal, pp. 215-216).
The dispositive portion of the questioned decision reads as follows:
WHEREFORE, the appealed judgment is in full accord with the evidence and
the law and is hereby therefore affirmed in all its part. Costs against plaintiff
-appellants
SO ORDERED.
The subject matter of this controversy involves a parcel of land situated in
Cavinti, Laguna consisting of 81,300 square meters, more or less, initially
covered by an original Certificate of Title No. 2262, issued on April 2, 1924

P a g e | 10

owned and registered in the name of the late Pedro Villanueva (former
Justice of the Peace of the Municipal Court, Cavinti, Laguna), pursuant to
Decree No. 150562 issued in L.R.C. Cadastral Record No. 136, Cad. Case No.
1 (Record on Appeal; Answer, p. 28).
Petitioners were nephew and niece of the late Pedro Villanueva and first
cousin of the private respondent Marta Villanueva vda. de Agana, the latter
being the daughter of Pedro Villanueva.
On August 10, 1937, petitioner claimed that the aforestated land was sold to
them in a private document, an unnotarized deed of sale written in Tagalog
(Annex "B" of the complaint) that was allegedly signed by the late Pedro
Villanueva conveying and transfering the property in question in favor of the
petitioners (Record on Appeal, Exhibit "B", pp. 9-10) which deed is
reproduced as follows.
Ako, Pedro Villanueva, 66 taong gulang, balo at nananahanan sa municipio
ng Cavinti, lalawigang Laguna at Kapuluang Pilipinas, alang-alang sa
halagang LIMANG DAANG PISO (P500.00) salaping filipino, na sa akin
ibinayad ng mag-asawa ni Meliton Gallardo at Teresa Villanueva, tagarito rin
sa nasabing municipio, lalawigang at kapulwan sa hinaharap ng kasulatan ay
sinasaysay ko na aking inilillwat at pinagbili ng biling patuluyan sa nasabing
mag-asawa Meliton Gallardo at Teresa Villanueva, sampo na sa kanilay
mangagmamana at hahalili, ang aking isang palagay na lupa na nabubuo sa
limang luang na tubigan, punlang kalahating kabang palay at saka dalatan o
katihan na may isang kabang palay na hasik, tumatayo sa nayon ng
Kanlurang Talaongan, sakop nitong municipio ng Cavinti at napapaloob sa
mga hangganang sumusunod:
HILAGAAN, Braulio Villanueva at Modesto Ribera
SILANGAN, Braulio Villanueva.
TIMUGAN, Braulio Villanueva, Ilog Kaliraya at Jacinto Toque
KANLURAN, Jacinto Toque.
Ang pagaaring ito ay tunay kong pananarili sapagkat aking nabili sa
magkakapatid na Aniano Gallardo, Zacarias Gallardo at Perfecto Gallardo at
natatala sa Registro ng Amillarmiento dito sa Cavinti sa ilalim ng Blg. 22888,
at walang ano mang ipinagkakautang ni pinanagutan kaya at magagamit na
nitong aking pinagbilhan ang kanilang matuwid na maipamana at mailiwa sa
iba. Gayon ding sinasaysay ko na akoy umaakong mananagutan dito sa
aking pinagbilhan, tungkol sa pagaaring ito na ang katibay ay aking
ipagsasanggalang laban sa kanino mang maghahabol.

P a g e | 11

Dapat tantoin, gayon man, na ang pagaaring ito ay registrado na sa Registro

de la Propiedad nitong lalawigang Laguna, subalit at sa isang kamalian ng
pagkakasukat tungkol sa lawak at laki, ay hindi pa natutubos ang kanyang
titulo, kaya at kung maisaayos na ang nasabing titulo ay saka na ipatatala
sa pangalan nitong aking pinagbilhan upang lalong malagay sa katahimikan
itong aking pinagbilhan.
At sa katunayan ay nilagdaan ko ang kasulatang ito dito sa municipio ng
Cavinti, Laguna, ngayong ika sampung araw ng Agosto taong isanglibo
siyam na daan at tatlompu at pito (1937).
(LGD) PEDRO VILLANUEVA
Nagfirma sa hinaharap ni
(LGD) BALTAZAR VILLANUEVA
JUAN VILLANUEVA
Subsequently, the Original Certificate of Title was cancelled on the basis of
the private document of sale (Exhibit "B") and a new certificate of title was
issued in the name of the petitioners covered by Transfer Certificate of Title
No. RT- 6293 (No. 23350) on January 4, 1944, particularly describing the
land as follows:
A parcel of land (Lot No. 401 of the Cadastral Survey of Cavinti) with the
improvements thereon, situated in the municipality of Cavinti, Bounded on
the N and NE., by Lot No. 403; on the SE by Lot No. 393 and the Caliraya
River; and on the SW by Lot No. 515. Area Eighty One Thousand and
Three Hundred (81,300) Square Meters, more or less. (Record on Appeal,
Annex "A," pp. 7 and 9).
During the Second World War, the records as well as the Office of the
Register of Deeds of Laguna, where the original of their new transfer
certificate of title was kept, were completely burned. Accordingly, by virtue
of an Affidavit of Reconstitution dated December 2, 1958 (Record on Appeal,
Annex "DD," pp. 41-42) and upon presentation of the Owner's Duplicate
Certificate of Title, the title was administratively reconstituted and the
Register of Deeds of Laguna issued Transfer Certificate of Title No. RT-6293
(No. 23350) in the name of the petitioners (Record on Appeal, Annex "B",
pp. 7).
On November 17, 1976, defendant Marta Villanueva together with Pedro
Villanueva, Jr., and Restituto R. Villanueva executed and filed an Affidavit of
Adverse Claim with the Office of the Register of Deeds of Laguna (Record on
Appeal, Annex "C", pp. 10-13). However, on December 6, 1976 a joint

P a g e | 12

affidavit was filed by Pedro G. Villanueva, Jr. and Restituto Villanueva

withdrawing their adverse claim on the said parcel of land, with the Office of
the Register of Deeds of Laguna (Record on Appeal, Annex " D, " pp. 13-14).
When petitioners learned of this Affidavit of Adverse Claim, attempt was
made to settle said controversy amicably. Several demands made by herein
petitioners upon private respondents Marta Vda. de Agana to withdraw her
adverse claim, failed.
On December 9, 1976, said private respondent executed a Deed of
Conveyance and Release of Claim (Record on Appeal and Annex "AA", p. 35)
wherein the parties agreed, among other things, to the following:
That in consideration of the said transfer and conveyance over a 1,000
square meter portion mentioned in the next preceding paragraph, the
VENDEE (Marta V. Agana) does hereby withdraw the adverse claim
mentioned above; (Rollo, p. 119).
However, when private respondent Marta Villanueva vda. de Agana refused
to sign an Affidavit of Quit-claim (Exhibit "9; " Record on appeal, p. 195),
petitioners instituted court suit against the private respondent and her
husband, Dr. Marcelo S. Agana, Sr. by filing a complaint for Quieting of Title
and Damages with the Court of First Instance of Laguna on February 3,
1977, demanding that their title over the questioned land be fortified by a
declaration of ownership in their favor and avoiding the af/recited Deed of
Conveyance and Release of Claim (Record on Appeal, pp. 1-7). Accordingly,
private respondents in their answer countered that the Deed of Sale in
Tagalog and petitioners' title over the land be declared void ab initio, among
other demands (Record on Appeal, pp. 16-35).
On January 20, 1982, the Court of First Instance of Laguna rendered its
decision declaring the deed of sale of August 10, 1937, as well as the
reconstituted transfer certificate of title of petitioners, void ab initio Record
on Appeal, pp. 208-216).
The dispositive portion of said decision (Record on Appeal, pp. 215-216)
reads as follows:
WHEREFORE, judgment is hereby rendered in favor of the defendants and
against the plaintiffs, as follows:
a. declaring as null and void the private document dated August 10, 1937
written in Tagalog (Exhibit B);

P a g e | 13

b. declaring as null and void plaintiffs' reconstituted Transfer Certificate of

Title RT-6293 (No. 23350) (Exhibit F) and ordering the Register of Deeds of
Laguna to issue a new reconstituted or to reinstate Original Certificate of
Title No. 2262 issued on April 2, 1924 in the name of Pedro Villanueva within
thirty (30) days from the finality of this decision;
c. declaring the heirs of Pedro Villanueva as the owners of the property in
litigation and ordering the plaintiffs and her agents and those acting for in
their behalf to vacate the land in question and surrender the possession of
the same to the heirs of the late Pedro Villanueva thru Marta V. Agana;
d. declaring all buildings; plantings and improvements introduced by the
plaintiffs forfeited in favor of' the defendants:
e. ordering plaintiffs, jointly and severally, to pay the defendants the sum of
P10,000.00 as moral and exemplary damages;
f. ordering plaintiffs, jointly and severally, to pay defendants the sum of
P5,000.00 as and for attorney's fees: and
g. ordering plaintiffs, jointly and severally, to pay defendants the sum of
P5,000.00 as litigation expenses; and costs of suit.
SO ORDERED.
Thus, petitioners filed notice of appeal on February 10, 1982, followed by an
appeal made to the Intermediate Appellate Court. However, the
Intermediate Appellate Court, on May 22, 1984, affirmed in toto the decision
of the trial court.
Hence, this petition.
On August 30, 1984, the Court in its Resolution without giving due course to
the petition required the respondents to comment on the said petition (Rollo,
p. 50). However, the counsel for private respondents failed to file comment
on the petition for review on certiorari within the period which expired on
September 17, 1984. Thus, in the Resolution of January 7, 1985 the Court,
required counsel for petitioners to show cause why disciplinary action should
not be taken against him (Rollo, p. 51).
On February 23, 1985 respondents filed their comment (Rollo, p. 57).
Considering respondents' comment as answer the petition was given due
course and the parties were required to submit their respective memoranda
(Rollo, p. 104).

P a g e | 14

Private respondents and petitioners filed their respective memoranda on May

18, 1985 (Rollo, p. 117) and on June 7, 1985 (Rollo, p. 143) respectively.
On July 1, 1985, the Court resolved to consider the case submitted for
deliberation (Rollo, p. 168).
Petitioners, however filed a Supplemental Memorandum, with leave of court
on May 18, 1987 (Rollo, p. 169) which was noted by the court in its
resolution dated June 19, 1987 (Rollo, p. 188).
In its petition petitioners raised the following assignment of errors, to wit:
I
THE TRIAL COURT ERRED IN HOLDING THAT EXHIBIT B DOES NOT
TRANSFER OWNERSHIP, THE SAME BEING NULL AND VOID.
II
THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANTS-APPELLANTS
ARE NOT GUILTY OF LACHES.
III
THE TRIAL COURT ERRED IN HOLDING THAT PLAINTIFF- APPELLANTS
CANNOT ACQUIRE OWNERSHIP OF SUBJECT LAND BY PRESCRIPTION UPON
THE PRINCIPLE THAT NO TITLE TO REGISTERED LAND IN DEROGATION OF
THAT OF THE REGISTERED OWNER SHALL BE ACQUIRED BY PRESCRIPTION.
IV
THE TRIAL COURT ERRED IN NOT HOLDING THAT STATUTE OF LIMITATION
HAS SET INTO THIS CASE; AND,
V
THE TRIAL COURT ERRED IN DECLARING TRANSFER CERTIFlCATE OF TITLE
NO. RT-6293 AS NULL AND VOID.
The pivotal issue in this case is whether or not there was a valid
reconstitution of Transfer Certificate of Title No. RT-6293 (No. 23350) issued
in the names of petitioners.
It is admitted that the land in question is formerly covered by Original
Certificate of Title No. 2262, issued in the name of Pedro Villanueva and that
the cancellation of said OCT No. 2262 and the issuance of the reconstituted
Transfer Certificate of Title No. RT-6293 (No. 23350) are based either on the
Affidavit for Reconstitution of Teresa Villanueva and not of Pedro Villanueva,
or the unnotarized deed of sale of August 10, 1937 (Annex "B" for plaintiffs),

P a g e | 15

held void by the lower court and by the Court of Appeals. As a consequence
TCT No. RT-6293 (No. 23350) was likewise held void ab initio. (Record on
Appeal, p. 20).
As to the validity of the Affidavit for Reconstitution, affiant Teresa Villanueva
testified on December 19, 1980, that she did not know anything about the
reconstitution of their title as it was their children who took charge of the
same and that she never participated in the said reconstitution. In fact she
never appeared before the Notary Public and this testimony was
corroborated by the testimony of Eleuterio Rebenque, entry clerk in the
Office of the Register of Deeds who never made any categorical affirmation
that said Teresa Villanueva appeared at said office. (Rollo, p. 43).
Consequently, the crux of the matter now centers on whether or not the
unnotarized deed of sale purportedly executed on August 10, 1937 by the
primitive owner Pedro Villanueva, in favor of petitioners, can be considered
as a valid instrument for effecting the alienation by way of sale of a parcel of
land registerd under the Torrens System. Corollary thereto, it becomes
necessary to examine other matters surrounding the execution of the
alleged document of sale (Exhibit B).
Petitioners claim that the sale although not in a public document, is
nevertheless valid and binding citing this Court's rulings in the cases
of Cauto v. Cortes, 8 Phil. 459, 460; Guerrero v. Miguel, 10 Phil. 52, 53;
Bucton v. Gabar 55 SCRA 499 wherein this Court ruled that even a verbal
contract of sale of real estate produces legal effects between the parties.
The contention is unmeritorious.
As the respondent court aptly stated in its decision:
True, as argued by appellants, a private conveyance of registered property is
valid as between the parties. However, the only right the vendee of
registered property in a private document is to compel through court
processes the vendor to execute a deed of conveyance sufficient in law for
purposes of registration. Plaintiffs-appellants' reliance on Article 1356 of the
Civil Code is unfortunate. The general rule enunciated in said Art. 1356 is
that contracts are obligatory, in whatever form they may have been entered,
provided all the essential requisites for their validity are present. The next
sentence provides the exception, requiring a contract to be in some form
when the law so requires for validity or enforceability. Said law is Section
127 of Act 496 which requires, among other things, that the conveyance be
executed "before the judge of a court of record or clerk of a court of record
or a notary public or a justice of the peace, who shall certify such
acknowledgment substantially in form next hereinafter stated."

P a g e | 16

Such law was violated in this case. The action of the Register of Deeds of
Laguna in allowing the registration of the private deed of sale was
unauthorized and did not lend a bit of validity to the defective private
document of sale.
With reference to the special law, Section 127 of the Land Registration Act,
Act 496 (now Sec. 112 of P.D. No. 1529) provides:
Sec. 127. Deeds of Conveyance, ... affecting lands, whether registered under
this act or unregistered shall be sufficient in law when made substantially in
accordance with the following forms, and shall be as effective to convey,
encumber, ... or bind the lands as though made in accordance with the more
prolix forms heretofore in use: Provided, That every such instrument shall be
signed by the person or persons executing the same, in the presence of two
witnesses, who shall sign the instrument as witnesses to the execution
thereof, and shall be acknowledged to be his or their free act and deed by
the person or persons executing the same, before the judge of a court of
record or clerk of a court of record, or a notary public, or a justice of the
peace, who shall certify to such acknowledgement substantially in the form
next hereinafter stated. (Emphasis supplied).
It is therefore evident that Exhibit " E " in the case at bar is definitely not
registerable under the Land Registration Act.
Likewise noteworthy is the case of Pornellosa and Angels v. Land Tenure
Administration and Guzman, 110 Phil. 986, where the Court ruled:
The deed of sale (Exhibit A), allegedly executed by Vicente San Jose in favor
of Pornellosa is a mere private document and does not conclusively establish
their right to the parcel of land. WhiIe it is valid and binding upon the parties
with respect to the sale of the house erected thereon, yet it is not sufficient
to convey title or any right to the residential lot in litigation. Acts and
contracts which have for their object the creation, transmission, modification
or extinguishment of real rights over immovable property must appear in a
public document.
Upon consideration of the facts and circumstances surrounding the execution
of the assailed document, the trial court found that said private document
(Exhibit "B") was null and void and that it was signed by somebody else not
Pedro Villanueva. Such findings of fact besides being based on the records,
were sustained by the Court of Appeals.

P a g e | 17

The contention that ownership over registered property may be acquired by

prescription or adverse possession is absolutely without merit. No title to
registered land in derogation of that of the registered owner shall be
acquired by prescription or adverse possession. Prescription is unavailing not
only against the registered owner but also against his hereditary successors
(Umbay vs. Alecha, 135 SCRA 427 [1985]). The right to recover possession
of registered land is imprescriptible because possession is a mere
consequence of ownership (Umbay vs. Alecha, supra, citing Atun v. Nuuz
97 Phil. 762; Manlapas and Tolentino v. Llorente, 48 Phil. 298, 308: J.M.
Tuazon & Co., Inc. v. Aguirre, 117 Phil. 110, 113-114) where land has been
registered under the Torrens System (Alarcon v. Bidin, 120 SCRA 390;
Umbay v. Alecha, supra) because the efficacy and integrity of the Torrens
System must be protected (Director of Lands v. CA, 120 SCRA 370). As
prescription is rightly regarded as a statute of repose whose objective is to
suppress fraudulent and stale claims from springing up at great distances of
time and suprising the parties or their representatives when the facts have
become obscure from the lapse of time or the defective memory or death or
removal of witnesses ( Senoan v. Sorongon, 136 SCRA 407 [1985]).
In the matter of laches, the Court aptly stated in the case of Marcelo Sotto
v. Pilar Teves, et al., 86 SCRA 155 [1978] that "in determining whether a
delay in seeking to enforce a right constitutes laches, the existence of a
confidential relationship between the parties is an important circumstance
for consideration. A delay under such circumstance is not as strictly regarded
as where the parties are strangers to each other. The doctrine of laches is
not strictly applied between near relatives, and the fact that the parties are
connected by ties of blood or marriage tends to excuse an otherwise
unreasonable delay."
In the case of Esso Standard Eastern, Inc. v. Alfonso Lim, 123 SCRA 464,
480 [1983]), the Court ruled that laches cannot be asserted by a mere
possessor without claim of title, legal or equitable because for laches to
exist, there should be a showing of delay in asserting the complainant's
right. The complainant should have knowledge or notice of the defendant's
conduct and an opportunity to institute a suit. Delay is not counted from the
date the lot was sold to the buyer but from the time of entry of the
defendant or from the time the complainant came to know of the occupancy
for that is the only time it could possibly have demanded that he get out of
the premises or could have instituted a suit. In the case at bar, it will be
noted that what transpired was an administrative reconstitution,
essentially ex-parte and without notice, thereby lending credence to the
claim that private respondent Marta Agana was unaware of such
reconstitution and possession until she discovered the same in the Office of
the Register of Deeds in 1976. As such it cannot be claimed that she slept on

P a g e | 18

her right as from that time on, it is undeniable that she filed her adverse
claim on the said lot.
After a careful perusal of the case, there appears to be no cogent reason to
disturb the findings of fact of the Court of Appeals which affirmed the
findings of the trial court.
PREMISES CONSIDERED, the petition is DENIED and the assailed decision of
the Intermediate Appellate Court is AFFIRMED.
SO ORDERED.

Heirs of Domingo vs Ramas

DECISION
LEONARDO-DE CASTRO, J.:
This is a Petition for Certiorari assailing the Decision[1] of the Court of
Appeals dated August 16, 2002 and the subsequent Resolution denying
reconsideration dated January 16, 2003 in CA-G.R. SP No. 68501.
Petitioners claim that they are the heirs of Domingo Valientes who,
before his death, was the owner of a parcel of land in Gabay, Margosatubig,
Zamboanga del Sur then covered by Original Certificate of Title (OCT) No. P18,208 of the Register of Deeds of Zamboanga del Sur. In 1939, Domingo
Valientes mortgaged the subject property to secure his loan to the spouses
Leon Belen and Brigida Sescon (spouses Belen). In the 1950s, the Valientes
family purportedly attempted, but failed, to retrieve the subject property
from the spouses Belen. Through an allegedly forged document captioned
VENTA DEFINITIVA purporting to be a deed of sale of the subject property
between Domingo Valientes and the spouses Belen, the latter
obtained Transfer Certificate of Title (TCT) No. T-5,427 in their
name. On February 28, 1970, Maria Valientes Bucoy and Vicente Valientes,
legitimate children of the late Domingo Valientes, had their Affidavit of
Adverse Claim[2] duly entered in the Memorandum of Encumbrances at the
back of TCT No. T-5,427. Upon the death of the spouses Belen, their
surviving heirs Brigida Sescon Belen and Maria Lina Belen executed an extra-

P a g e | 19

judicial settlement with partition and sale in favor of private respondent

Vilma Valencia-Minor, the present possessor of the subject property.
On June 20, 1979, herein private respondent Minor filed with the then
Court of First Instance of Pagadian City a PETITION FOR CANCELLATION OF
MEMORANDUM OF ENCUMBRANCE APPEARING IN TCT NO. T-5,427 OF THE
REGISTRY OF DEEDS OF ZAMBOANGA DEL SUR, which was docketed as SPL
Case No. 1861.[3] On July 31, 2000, the Regional Trial Court (RTC) granted
Minors prayer to allow the Register of Deeds to have the title to the subject
property transferred to her name.
In the meantime, on August 20, 1998, petitioners filed a Complaint
before the RTC of San Miguel, Zamboanga del Sur for the CANCELLATION
OF TRANSFER CERTIFICATE OF TITLE NO. T-5,427, RECONVEYANCE, WITH
ACCOUNTING, RECEIVERSHIP AND APPLICATION FOR A WRIT OF
PRELIMINARY PROHIBITORY INJUNCTION PLUS DAMAGES. The Complaint
was docketed as Civil Case No. 98-021.[4]
Private respondent Minor filed an Omnibus Motion to Dismiss Civil Case
No.
98-021
on
the
grounds
of
forum
shopping
and litis
pendentia. On August 3, 2000, the RTC issued an order in open court ruling
that forum shopping does not apply. On September 22, 2000, private
respondent Minor filed a Motion for Reconsideration[5] of the August 3, 2000
Order. On May 7, 2001, the RTC issued an Order granting the Motion for
Reconsideration by dismissing Civil Case No. 98-021 on the ground of forum
shopping.[6] Petitioners filed a Motion for Reconsideration[7] on May 30, 2001,
but the same was denied by the RTC in its Order[8] dated September 18,
2001.
On November 12, 2001, petitioners filed with the Court of Appeals a
Petition for Certiorari[9]assailing the RTC Orders dated May 7, 2001 and
September 18, 2001. Petitioners raised the sole issue of whether the trial
court was correct in finding that Civil Case No. 98-021 constitutes forum
shopping, litis pendentia or res judicata with SPL Case No. 186. The Petition
was docketed as CA-G.R. SP No. 68501.

P a g e | 20

The Court of Appeals rendered its assailed Decision on said petition

on August 16, 2002. Despite agreeing with petitioners that there was no
forum shopping, litis pendentia or res judicata in the filing of Civil Case No.
98-021, the Court of Appeals, asserting that it has the discretion to review
matters not otherwise assigned as errors on appeal if it finds that their
consideration is necessary at arriving at a complete and just resolution of the
case,[10] held that Civil Case No. 98-021 cannot prosper on the grounds of
prescription and laches.
Hence, this Petition for Certiorari, wherein petitioners raised the
following grounds for assailing the Court of Appeals Decision:
I
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF
JURISDICTION WHEN IT APPLIED PRESCRIPTION IN THE
PRESENT PETITION, AFTER ALL, WHEN SHE DID NOT APPEAL
THE DECISION OF THE HONORABLE REGIONAL TRIAL COURT
DISMISSING THE COMPLAINT ON THE SOLE GROUND OF RES
JUDICATA, PRIVATE RESPONDENT IS DEEMED TO HAVE
ALREADY WAIVED THE DEFENSE OF PRESCRIPTION.
II
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF
JURISDICTION IN DISMISSING THE COMPLAINT ON THE
GROUND OF PRESCRIPTION, THE PRESENT ACTION, ALTHOUGH
CAPTIONED FOR CANCELLATION OF TRANSFER CERTIFICATE OF
TITLE NO. T-5,427, RECONVEYANCE AND ETC., SUBSTANTIALLY,
IS FOR QUIETING OF TITLE, HENCE, PRESCRIPTION WILL NOT
LIE.
III
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF
JURISDICTION IN APPLYING THE CASES OF TENIO-OBSEQUIO
VERSUS COURT OF APPEALS, 330 SCRA 88, AND DECLARO VS.
COURT OF APPEALS, 346 SCRA 57 WHEN FACTS OBTAINING IN

P a g e | 21

SAID CASES ARE NOT ATTENDANT IN THE PRESENT CASE FOR

CANCELLATION OF TRANSFER CERTIFICATE OF TITLE NO. T5,427 ON THE GROUND OF FORGERY OR BY REASON OF
FORGED DOCUMENT CAPTIONED VENTA DEFINITIVA.
IV
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF
JURISDICTION WHEN IT [RENEGED] FROM ITS SOLEMN DUTY
TO RENDER SUBSTANTIAL JUSTICE DUE THE PARTIES RATHER
THAN THE SANCTIFICATION OF TECHNICAL RULES OR EQUITY
ON PRESCRIPTION.[11]
Authority of the Court of Appeals to
Dismiss the Complaint on the Grounds of
Prescription
and
Laches
Despite
Respondents Failure to Appeal the
Dismissal Order
Petitioners recount that private respondent Minor interposed
prescription as one of her grounds for the dismissal of the case in her Answer
with Affirmative Defenses. When private respondent Minors Motion to
Dismiss was denied by the RTC in open court, she filed a Motion for
Reconsideration dwelling on forum shopping, litis pendentia and/or res
judicata.[12] The trial court proceeded to dismiss the case on the ground of
forum shopping.[13] Petitioners now claim before us that private respondent
Minors failure to appeal the RTCs dismissal of the complaint on the sole
ground of forum shopping constituted a waiver of the defense of
prescription. Petitioners further argue that the consideration by the Court of
Appeals of grounds not assigned as errors in the Appellees Brief runs
contrary to the precepts of fair play, good taste and estoppel.[14]
We rule in favor of private respondent Minor on this issue.
Firstly, it stretches the bounds of credulity for petitioners to argue that
a defendant in a case should appeal the dismissal order she prayed for just
because other grounds for dismissal were not considered by the court.

P a g e | 22

Secondly, and more importantly, Section 1, Rule 9 of the Rules of

Court provides:
Section 1. Defenses and objections not pleaded.
Defenses and objections not pleaded either in a motion to
dismiss or in the answer are deemed waived. However, when it
appears from the pleadings or the evidence on record that the
court has no jurisdiction over the subject matter, that there is
another action pending between the same parties for the same
cause, or that the action is barred by a prior judgment or by
statute of limitations, the court shall dismiss the claim.
The second sentence of this provision does not only supply exceptions
to the rule that defenses not pleaded either in a motion to dismiss or in the
answer are deemed waived, it also allows courts to dismiss cases motu
proprio on any of the enumerated grounds (1) lack of jurisdiction over the
subject matter; (2)litis pendentia; (3) res judicata; and (4) prescription
provided that the ground for dismissal is apparent from the pleadings or the
evidence on record.
We therefore rule that private respondent Minor cannot be deemed to
have waived the defense of prescription, and that the Court of Appeals may
consider
the
same motu
proprio. Furthermore,
as
regards
the
pronouncement by the Court of Appeals that Civil Case No. 98-021 is
likewise heavily infirmed with laches, we rule that the Court of Appeals is not
in error when it considered the same motu proprio. While not included in the
above enumeration under Section 1, Rule 9 of the Rules of Court, we have
ruled in previous cases that laches need not be specifically pleaded and may
be considered by the court on its own initiative in determining the rights of
the parties.[15]
Having thus determined the authority of the Court of Appeals to
dismiss the Complaint on the grounds of prescription and laches despite
private respondent Minors failure to appeal the dismissal Order, We shall
now proceed to determine whether or not prescription or laches has already
set in to bar the filing of Civil Case No. 98-021.

P a g e | 23

Imprescriptibility of Quieting of Title

After the Court of Appeals ruled in favor of petitioners on the issue of
whether Civil Case No. 98-021 is already barred by forum
shopping, res judicata or litis pendentia, the appellate court, nevertheless,
affirmed the dismissal order, but on the grounds of prescription and laches:
Be that as it may, this Court is imbued with sufficient
discretion to review matters, not otherwise assigned as errors on
appeal, if it finds that their consideration is necessary in arriving
at a complete and just resolution of the case (Heirs of Ramon
Durano, Sr. vs. Uy, 344 SCRA 238).
The case cannot prosper because an action for
reconveyance is a legal remedy granted to a landowner whose
property has been wrongfully or erroneously registered in
anothers name, which must be filed within ten years from the
issuance of the title since such issuance operates as a
constructive notice (Declaro vs. Court of Appeals, 346 SCRA
57). Where a party has neglected to assert his rights over a
property in question for an unreasonably long period, he is
estopped from questioning the validity of another persons title
to the property (Ibid.) Long inaction and passivity in asserting
ones rights over a disputed property precludes him from
recovering said property (Po Lam vs. Court vs. Court of Appeals,
347 SCRA 86).
In conclusion, petitioners cause of action has already
prescribed and now heavily infirmed with laches.[16]
Petitioners claim that although the complaint was captioned for
CANCELLATION OF TRANSFER CERTIFICATE OF TITLE NO. T-5,427,
RECONVEYANCE, WITH ACCOUNTING, RECEIVERSHIP, AND APPLICATION
FOR A WRIT OF PRELIMINARY PROHIBITORY INJUNCTION PLUS DAMAGES,
the complaint is substantially in the nature of an action to quiet title which
allegedly does not prescribe. Petitioners also allege that the cases cited by
the Court of Appeals in ruling that prescription has set in, particularly that
of Declaro v. Court of Appeals,[17]which in turn cites Tenio-Obsequio v. Court

P a g e | 24

of Appeals,[18] are inapplicable to the case at bar since neither fraud nor
forgery was attendant in said cases.
As regards petitioners claim that the complaint in Civil Case No. 98021 is really one of quieting of title which does not prescribe, it appears that
petitioners are referring to the doctrine laid down in the often-cited case
of Heirs of Jose Olviga v. Court of Appeals,[19] wherein we held:
With regard to the issue of prescription, this Court has
ruled a number of times before that an action for reconveyance
of a parcel of land based on implied or constructive trust
prescribes in ten years, the point of reference being the date of
registration of the deed or the date of the issuance of the
certificate of title over the property (Vda. de Portugal vs. IAC,
159 SCRA 178). But this rule applies only when the plaintiff is
not in possession of the property, since if a person claiming to be
the owner thereof is in actual possession of the property, the
right to seek reconveyance, which in effect seeks to quiet title to
the property, does not prescribe.[20]
The cause of action of petitioners in Civil Case No. 98-021, wherein
they claim that private respondent Minors predecessor-in-interest acquired
the subject property by forgery, can indeed be considered as that of
enforcing an implied trust. In particular, Article 1456 of the Civil Code
provides:
Art. 1456. If property is acquired through mistake or
fraud, the person obtaining it is, by force of law, considered a
trustee of an implied trust for the benefit of the person from
whom the property comes.
However, the Court made a clear distinction in Olviga: when the plaintiff in
such action is not in possession of the subject property, the action prescribes
in ten years from the date of registration of the deed or the date of the
issuance of the certificate of title over the property. When the plaintiff is in
possession of the subject property, the action, being in effect that of quieting
of title to the property, does not prescribe. In the case at bar, petitioners
(who are the plaintiffs in Civil Case No. 98-021) are not in possession of the
subject property. Civil Case No. 98-021, if it were to be considered as that

P a g e | 25

of enforcing an implied trust, should have therefore been filed within ten
years from the issuance of TCT No. T-5,427 on December 22, 1969. Civil
Case No. 98-021 was, however, filed on August 20, 1998, which was way
beyond the prescriptive period.
As an alternative argument, petitioners claim that the prescriptive
period for filing their complaint is thirty years, pursuant to Article 1141 of the
Civil Code, in connection with Articles 1134 and 1137 thereof, which
respectively provide:
Art. 1141. Real actions over immovables prescribe after
thirty years.
This provision is without prejudice to what is established
for the acquisition of ownership and other real rights by
prescription.
Art. 1134. Ownership and other real rights over immovable
property are acquired by ordinary prescription through
possession of ten years.
Art. 1137. Ownership and other real rights over
immovables also prescribe through uninterrupted adverse
possession thereof for thirty years, without need of title or of
good faith.

The theory of petitioners is that the Motion to Dismiss hypothetically

admits the allegations of the complaint, including the allegations thereon
that the spouses Belen were successful in fraudulently acquiring TCT No. T5,427 in their favor by means of the forged VENTA DEFINITIVA. Thus, for
purposes of ruling on a Motion to Dismiss, it is hypothetically admitted that
private respondent Minors predecessors-in-interest are in bad faith. The
applicable prescriptive period, therefore, is that provided in Article 1141 in
relation to Article 1137 of the Civil Code, which is thirty years. Civil Case No.
98-021 was filed on August 20, 1998, 28 years and eight months from the
issuance of TCT No. T-5,427 on December 22, 1969.

P a g e | 26

Articles 1141, 1134 and 1137 of the Civil Code, however, are general
rules on prescription which should give way to the special statute on
registered lands, Presidential Decree No. 1529, otherwise known as the
Property Registration Decree. Under the Torrens System as enshrined in
P.D. No. 1529, the decree of registration and the certificate of title issued
become incontrovertible upon the expiration of one year from the date of
entry of the decree of registration, without prejudice to an action for
damages against the applicant or any person responsible for the fraud.[21]
As previously discussed, however, we have allowed actions for
reconveyance based on implied trusts even beyond such one-year period, for
such actions respect the decree of registration as incontrovertible. We
explained this in Walstrom v. Mapa, Jr.[22]:
We have ruled before in Amerol vs. Bagumbaran that
notwithstanding the irrevocability of the Torrens title already
issued in the name of another person, he can still be compelled
under the law to reconvey the subject property to the rightful
owner. The property registered is deemed to be held in trust for
the real owner by the person in whose name it is registered.
After all, the Torrens system was not designed to shield and
protect one who had committed fraud or misrepresentation and
thus holds title in bad faith.
In an action for reconveyance, the decree of registration is
respected as incontrovertible. What is sought instead is the
transfer of the property, in this case the title thereof, which has
been wrongfully or erroneously registered in another person's
name, to its rightful and legal owner, or to one with a better
right. This is what reconveyance is all about.
Yet, the right to seek reconveyance based on an implied or
constructive trust is not absolute nor is it imprescriptible. An
action for reconveyance based on an implied or constructive
trust must perforce prescribe in ten years from the issuance of
the Torrens title over the property.[23]
As discussed above, Civil Case No. 98-021 was filed more than 28
years from the issuance of TCT No. T-5,427. This period is unreasonably
long for a party seeking to enforce its right to file the appropriate case. Thus,

P a g e | 27

petitioners claim that they had not slept on their rights is patently
unconvincing.
As a final note, it should be pointed out that in choosing to file a
Petition for Certiorari before this Court, petitioners are required to prove
nothing less than grave abuse of discretion on the part of the Court of
Appeals. We have consistently held that certiorari will not be issued to cure
errors in proceedings or correct erroneous conclusions of law or fact. As long
as a court acts within its jurisdiction, any alleged errors committed in the
exercise of its jurisdiction will amount to nothing more than errors of
judgment which are reviewable by timely appeal and not by a special civil
action of certiorari.[24] In the case at bar, petitioners proved neither grave
abuse of discretion, nor even a simple error of judgment on the part of the
Court of Appeals. The present petition should, therefore, fail.
WHEREFORE, the present Petition for Certiorari is DISMISSED. The
Decision of the Court of Appeals dated August 16, 2002 and the Resolution
dated January 16, 2003 in CA-G.R. SP No. 68501 are AFFIRMED.

[G.R. No. 123509. March 14, 2000]

LUCIO ROBLES, EMETERIA ROBLES, ALUDIA ROBLES and
EMILIO ROBLES, petitioners,vs. COURT OF APPEALS, Spouses
VIRGILIO SANTOS and BABY RUTH CRUZ, RURAL BANK OF
CARDONA, Inc., HILARIO ROBLES, ALBERTO PALAD JR. in his
capacity as Director of Lands, and JOSE MAULEON in his
capacity as District Land Officer of the Bureau Of
Lands, respondents.
DECISION
PANGANIBAN, J.:
To be entitled to the remedy of quieting of title, petitioners must show that
they have title to the real property at issue, and that some deed or
proceeding beclouds its validity or efficacy. Buyers of unregistered real
property, especially banks, must exert due diligence in ascertaining the titles
of mortgagors and sellers, lest some innocent parties be prejudiced. Failure

P a g e | 28

to observe such diligence may amount

nullity of the mortgage, as well as of
auction sale. Unless the co-ownership
cannot, by prescription, acquire title
owners. Mesm

to bad faith and may result in the

the subsequent foreclosure and/or
is clearly repudiated, a co-owner
to the shares of the other co-

The Case
Before us is a Petition for Review under Rule 45, assailing the June 15, 1995
Decision and the January 15, 1996 Resolution of the Court of Appeals [1] (CA)
in CA-GR CV No. 34213.[2] In its Decision, the CA ruled:[3]
"WHEREFORE, the trial courts June 17, 1991 decision is
REVERSED and SET ASIDE, and in lieu thereof a new one is
hereby entered ordering the dismissal of the plaintiffsappellees['] second amended complaint."
Earlier, the trial court had disposed as follows: Spped jo
"WHEREFORE, premises
rendered as follows:

considered,

judgment

is

hereby

1. Declaring free patent Title No. IV-1-010021 issued by

the Bureau of Lands as null and void;
2. Ordering the defendant spouses Vergel Santos and Ruth
Santos to deliver the property subject of this case to the
plaintiff; and
3. Declaring the heirs of Silvino Robles as the absolute
owner of the land in controversy."
The January 15, 1996 CA Resolution denied petitioners' Motion for
Reconsideration.
The Facts
The present Petition is rooted in a case for quieting of title before the
Regional Trial Court of Morong, Rizal, filed on March 14, 1988,[4] by
Petitioners Lucio Robles, Emeteria Robles, Aludia Robles and Emilio Robles.
The facts were narrated by the trial court in this wise:
"There seems to be no dispute that Leon Robles primitively
owned the land situated in Kay Taga, Lagundi, Morong, Rizal

P a g e | 29

with an area of 9,985 square meters. He occupied the same

openly and adversely. He also declared the same in his name for
taxation purposes as early as 1916 covered by Tax Declaration
No. 17865 (Exh. "I") and paid the corresponding taxes thereon
(Exh. "B"). When Leon Robles died, his son Silvino Robles
inherited the land, who took possession of the land, declared it
in his name for taxation purposes and paid the taxes
thereon. Rtc-spped
"Upon the death of Silvino Robles in 1942, his widow Maria de la
Cruz and his children inherited the property. They took adverse
possession of said property and paid taxes thereon. The task of
cultivat[ing] the land was assigned to plaintiff Lucio Robles who
planted trees and other crops. He also built a nipa hut on the
land. The plaintiffs entrusted the payment of the land taxes to
their co-heir and half-brother, Hilario Robles.
"In 1962, for unknown reasons, the tax declaration of the parcel
of land in the name of Silvino Robles was canceled and
transferred to one Exequiel Ballena (Exh. "19"), father of Andrea
Robles who is the wife of defendant Hilario Robles. Thereafter,
Exequiel Ballena secured a loan from the Antipolo Rural Bank,
using the tax declaration as security. Somehow, the tax
declaration was transferred [to] the name of Antipolo Rural Bank
(Exh. "17") and later on, was transferred [to] the name of
defendant Hilario Robles and his wife (Exh. "16"). Calrky
"In 1996, Andrea Robles secured a loan from the Cardona Rural
Bank, Inc., using the tax declaration as security. Andrea Robles
testified without contradiction that somebody else, not her
husband Hilario Robles, signed the loan papers because Hilario
Robles was working in Marinduque at that time as a carpenter.
"For failure to pay the mortgage debt, foreclosure proceedings
were had and defendant Rural Bank emerged as the highest
bidder during the auction sale in October 1968.
"The spouses Hilario Robles failed to redeem the property and so
the tax declaration was transferred in the name of defendant
Rural Bank. On September 25, 1987, defendant Rural Bank sold
the same to the Spouses Vergel Santos and Ruth Santos. Jo
spped

P a g e | 30

"In September 1987, plaintiff discovered the mortgage and

attempted to redeem the property, but was unsuccessful. On
May 10,1988, defendant spouses Santos took possession of the
property in question and was able to secure Free Patent No. IV1-010021 in their names."[5]
On the other hand, the Court of Appeals summarized the facts of the case as
follows:
"The instant action for quieting of title concerns the parcel of
land bounded and more particularly described as follows: Sdaad-sc
"A parcel of land located at Kay Taga, Lagundi, Morong,
Rizal. Bounded [i]n the north by the property of Venancio
Ablay y Simeon Ablay; [i]n the east by the property of
Veronica Tulak y Dionisio Ablay; [i]n the south by the
property of Simeon Ablay y Dionisio Ablay; and [i]n the
west by the property of Dionisio Ablay y Simeon Ablay,
with an area of 9,985 square meters, more or less,
assessed in the year 1935 at P60.00 under Tax Declaration
No. 23219.
"As the heirs of Silvino Robles who, likewise inherited the abovedescribed parcel from Leon Robles, the siblings Lucio, Emeteria,
Aludia and Emilio, all surnamed Robles, commenced the instant
suit with the filing of their March 14, 1988 complaint against
Spouses Virgilio and Ruth Santos, as well as the Rural Bank of
Cardona, Inc. Contending that they had been in possession of
the land since 1942, the plaintiff alleged, among other matters,
that it was only in September of 1987 that they came to know of
the foreclosure of the real estate mortgage constituted thereon
by the half-brother, Hilario Robles, in favor of defendant Rural
Bank; and that they likewise learned upon further inquiry, that
the latter had already sold the self-same parcel in favor of the
Santos spouses (pp. 1-3, orig. rec.). Twice amended to implead
Hilario Robles (pp. 76-80, orig. rec) and, upon subsequent
discovery of the issuance of Free Patent No. IV-I-010021 in favor
of the defendant spouses, the Director of Lands and the District
Land Officer of the Bureau of Lands as parties-defendants (pp.
117-121, orig. rec). The plaintiffs complaint sought the following
reliefs on the theory that the encumbrance of their half-brother,
constituted on the land, as well as all proceedings taken
subsequent thereto, were null and void, to wit:

P a g e | 31

"Wherefore, it is respectfully prayed that (a) a preliminary

mandatory injunction be issued forthwith restoring
plaintiffs to their possession of said parcel of land; (b) an
order be issued annulling said Free Patent No. IV-I-010021
in the name of defendants spouses Vergel Santos and Ruth
C. Santos, the deed of sale aforementioned and any tax
declaration which have been issued in the name of
defendants; and (c) ordering defendants jointly and
severally, to pay plaintiffs the sum of P10,000.00 as
attorneys fees.
"Plaintiffs pray for other relief as [may be] just and
equitable under the premises." (pp. 120-121, orig. rec.)
xxxxxxxxx
"With the termination of the pre-trial stage upon the partieslitigants agreement (p. 203, orig. rec.) the trial court proceeded
to try the case on the merits. It thereafter rendered the
challenged June 17, 1991 decision upon the following findings
and conclusions:
"The real estate mortgage allegedly executed by Hilario
Robles is not valid because his signature in the mortgage
deed was forged. This fact, which remains unrebutted, was
admitted by Andrea Robles.
"Inasmuch as the real estate mortgage executed allegedly
by Hilario Robles in favor of the defendant Cardona Rural
Bank, Inc. was not valid, it stands to reason that the
foreclosure proceedings therein were likewise not valid.
Therefore, the defendant bank did not acquire any right
arising out of the foreclosure proceedings. Consequently,
defendant bank could not have transferred any right to the
spouses Santos.
"The fact that the land was covered by a free patent will
not help the defendant Santos any.
"There can be no question that the subject [property was
held] in the concept of owner by Leon Robles since 1916.
Likewise, his successor-in-interest, Silvino Robles, his wife
Maria de la Cruz and the plaintiffs occupied the property
openly, continuously and exclusively until they were

P a g e | 32

ousted from their possession in 1988 by the spouses

Vergel and Ruth Santos.
"Under the circumstances, therefore, and considering that
"open, exclusive and undisputed possession of alienable
public lands for the period prescribed by law (30 years),
creates the legal fiction whereby the land, upon completion
of the requisite period, ipso jure and without the need of
judicial or other action, ceases to be public land and
becomes private property. Possession of public land x x x
which is [of] the character and duration prescribed by the
statute is the equivalent of an express grant from the
State, considering the dictum of the statute itself[:]; "The
possessor x x x shall be conclusively presumed to have
performed all the conditions essential to a government
grant and shall be entitled to a certificate of title x x x." No
proof
is
admissible
to
overcome
a
conclusive
presumption[,] and confirmation proceedings would be a
little more than a formality, at the most limited to
ascertaining whether the possession claimed is of the
required character and length of time. Registration
thereunder would not confer title, but simply recognize a
title already vested. (Cruz v. IAC, G.R. No. 75042,
November 29, 1988) The land in question has become
private land.
"Consequently, the issuance of [a] free patent title to the
Spouses Vergel Santos and Ruth C. Santos is not valid
because at the time the property subject of this case was
already private land, the Bureau of Lands having no
jurisdiction to dispose of the same." (pp. 257-259, orig.
rec.)"
"Dissatisfied with the foregoing decision, the Santos spouses and
the defendant Rural Bank jointly filed their July 6, 1991 Notice of
Appeal (p.260, orig. rec.) x x x."[6]
Ruling of the Court of Appeals
In reversing the trial court, the Court of Appeals held that petitioners no
longer had any title to the subject property at the time they instituted the
Complaint for quieting of title. The CA ratiocinated as follows: Mis spped

P a g e | 33

"As correctly urged by the appellants, the plaintiff-appellees no

longer had any title to the property at the time of the institution
of the instant complaint. (pp. 25-27, rec.) The latters claim of
continuous possession notwithstanding (pp. 3-5, TSN, July 5,
1990; p. 12, TSN, July 12, 1990), the aforesaid loss of title is
amply evidenced by the subsequent declaration of the subject
realty for taxation purposes not only in the name of Exequiel
Ballena (Exhibits "1" and "2", pp. 23-24, orig. rec.) but also in
the name of the Rural Bank of Antipolo (Exhibit 17, vol. II, orig.
rec.). On the theory that tax declarations can be evincive of the
transfer of a parcel of land or a portion thereof (Gacos v. Court
of Appeals, 212 SCRA 214), the court a quo clearly erred in
simply brushing aside the apparent transfers [which] the land in
litigation had undergone. Whether legal or equitable, it cannot,
under the circumstances, be gainsaid that the plaintiff-appellees
no longer had any title to speak of when Exequiel Ballena
executed the November 7, 1966 Deed of Absolute Sale
transferring the land in favor of the spouses Hilario and Andrea
Robles (Exhibit "3", p. 25, orig. rec.)
"Even on the theory that the plaintiffs-appellees and their halfbrother, Hilario Robles, are co-owners of the land left behind by
their common father, Silvino Robles, such title would still be
effectively discounted by what could well serve as the latters
acts of repudiation of the co-ownership, i.e., his possession (p.
22, TSN, November 15, 1990) and declaration thereof for
taxation purposes in his own name (Exhibit "4", p. 26, orig.
rec.). In view of the plaintiffs-appellees inaction for more than
twenty (20) years from the time the subject realty was
transferred in favor of Hilario Robles, the appellants correctly
maintain that prescription had already set in. While it may be
readily conceded that an action to quiet title to property in the
possession of the plaintiff is imprescriptible (Almanza vs.
Arguelles, 156 SCRA 718; Coronel vs. Intermediate Appellate
Court, 155 SCRA 270; Caragay-Layno vs. Court of Appeals, 133
SCRA 718; Charon Enterprises vs. Court of Appeals, 124 SCRA
784; Faja vs. Court of Appeals, 75 SCRA 441; Burton vs. Gabar,
55 SCRA 4999), it equally bears emphasis that a co-owner or,
for that matter, the said co-owner[']s successors-in-interest who
occupy the community property other than as co-owner[s] can
claim prescription as against the other co-owners (De Guzman
vs. Austria, 148 SCRA 75; Ramos vs. Ramos, 45 Phil. 362; Africa
vs. Africa, 42 Phil. 902; Bargayo vs. Camumot, 40 Phil. 857; De
Castro vs. Echarri, 20 Phil. 23). If only in this latter sense, the

P a g e | 34

appellants correctly argue that the plaintiffs-appellees have lost

their cause of action by prescription.
"Over and above the foregoing considerations, the court a quo
gravely erred in invalidating the real estate mortgage constituted
on the land solely on the basis of Andrea Robles testimony that
her husbands signature thereon was forged (p. 257, orig. rec.),
xxx xxx xxx
"In according to the foregoing testimony x x x credibility which,
while admittedly unrebutted, was altogether uncorroborated, the
trial court lost sight of the fact that the assailed deed of real
estate mortgage (Exhibit "5", Vol. II, orig. rec.) is a public
document,
the
acknowledgment
of
which
is
aprima
facie evidence of its due execution (Chua vs. Court of Appeals,
206 SCRA 339). As such, it retains the presumption of validity in
the absence of a full, clear and convincing evidence to overcome
such presumption (Agdeppa vs. Ibe, 220 SCRA 584). Maniks
"The foregoing principles take even more greater [sic] when it is,
moreover, borne in mind that Hilario Robles made the following
admissions in his March 8, 1989 answer, viz:
"3. The complaint filed against herein answering defendant
has no legal basis considering that as the lawful owner of
the subject real property, defendant Hilario Robles has the
right to mortgage the said real property and could dispose
the same in whatever manner he wishe[s] to do." (p. 96,
orig. rec.)
"Appropriately underscored by the appellants, the foregoing
admission is binding against Hilario [Robles]. Judicial admissions,
verbal or written, made by the parties in the pleadings or in the
course of the trial or other proceedings in the same case are
conclusive, no evidence being required to prove the same. They
cannot be contradicted unless shown to have been made through
[a] palpable mistake or [unless] no such admission was actually
made (Philippine American General Insurance, Inc. vs. Sweet
Lines, Inc., 212 SCRA 194).
"It does not help the plaintiffs-appellees cause any that, aside
from complying with the requirements for the foreclosure of the
subject real estate mortgage (Exhibits "6", "7", "8" and "10",

P a g e | 35

Volume II[)], the appellant Rural Bank had not only relented to
the mortgagors request to postpone the (Exhibit "g", Vol. II,
orig. rec.) but had likewise granted the latters request for an
extension of the redemption period therefor (Exhibits "11" and
"12", pp. 35-36, orig. rec.). Without going into minute detail in
discussing the Santos spouses rights as purchasers for value
and in good faith (Exhibit "21", Vol. II, orig. rec.), the mortgagor
and the plaintiffs-appellees cannot now be heard to challenge
the validity of the sale of the land after admittedly failing to
redeem the same within the extension the appellant Rural Bank
granted (pp. 10-11, TSN, November 15, 1990).
"Being dependent on the supposed invalidity of the constitution
and foreclosure of the subject real estate mortgage, the
plaintiffs-appellees attack upon x x x Free Patent No. IV-I must
necessarily fail. The trial court, therefore, misread, and ignored
the evidence o[n] record, to come up with erroneous
conclusion." Manikx
Contending that such ruling was contrary to law and jurisprudence,
Petitioners Lucio, Emeteria, Aludia and Emilio -- all surnamed Robles -- filed
this Petition for Review.[7]
The Assigned Error
Petitioners ascribe the following error to the respondent court:
"Respondent Court of Appeals grievously erred in ruling that with
the transfers of the tax declaration over the parcel of land in
question from Silvino Robles to Exequiel Ballena, then to the
Rural Bank of Antipolo, then to Respondent Hilario Robles, then
to Respondent Rural Bank of Cardona Inc., and then finally to
Respondent Spouses Santos, petitioners, who by themselves and
their predecessors in interest have been in open, actual and
adverse possession of said parcel of land since 1916 up to their
forced removal therefrom in 1988, have lost their title to said
property by prescription to their half-brother, Respondent Hilario
Robles, and then finally, to Respondent Spouses Santos."[8]
For a better understanding of the case, the above issue will be broken down
into three points: first, the nature of the remedy of quieting of title; second,
the validity of the real estate mortgage; and third, the efficacy of the free
patent granted to the Santos spouses. Spped

P a g e | 36

First Issue: Quieting of Title

Article 476 of the Civil Code provides:
"Whenever there is cloud on title to real property or any interest
therein, by reason of any instrument, record, claim,
encumbrance or proceeding which is apparently valid or effective
but is in truth and in fact invalid, ineffective, voidable or
unenforceable, and may be prejudicial to said title, an action
may be brought to remove such cloud or to quiet title.
"An action may also be brought to prevent a cloud from being
cast upon title to real property or any interest therein."
Based on the above definition, an action to quiet title is a common-law
remedy for the removal of any cloud or doubt or uncertainty on the title to
real property.[9] It is essential for the plaintiff or complainant to have a legal
or an equitable title to or interest in the real property which is the subject
matter of the action.[10] Also, the deed, claim, encumbrance or proceeding
that is being alleged as a cloud on plaintiffs title must be shown to be in fact
invalid or inoperative despite its prima facie appearance of validity or legal
efficacy.[11]
That there is an instrument or a document which, on its face, is valid and
efficacious is clear in the present case. Petitioners allege that their title as
owners and possessors of the disputed property is clouded by the tax
declaration and, subsequently, the free patent thereto granted to Spouses
Vergel and Ruth Santos. The more important question to be resolved,
however, is whether the petitioners have the appropriate title that will entitle
them to avail themselves of the remedy of quieting of title. Nexold
Petitioners anchor their claim to the disputed property on their continued
and open occupation and possession as owners thereof. They allege that
they inherited it from their father, Silvino, who in turn had inherited it from
his father, Leon. They maintain that after their fathers death, they agreed
among themselves that Petitioner Lucio Robles would be tending and
cultivating it for everyone, and that their half-brother Hilario would be
paying the land taxes.
Petitioners insist that they were not aware that from 1962 until 1987, the
subject property had been declared in the names of Exequiel Ballena, the
Rural Bank of Antipolo, Hilario Robles, the Rural Bank of Cardona, Inc., and
finally, Spouses Vergel and Ruth Santos. Maintaining that as co-owners of
the subject property, they did not agree to the real estate mortgage

P a g e | 37

constituted on it, petitioners insist that their shares therein should not have
been prejudiced by Hilarios actions. Miso
On the other hand, Private Respondents Vergel and Ruth Santos trace their
claim to the subject property to Exequiel Ballena, who had purportedly sold
it to Hilario and Andrea Robles. According to private respondents, the Robles
spouses then mortgaged it to the Rural Bank of Cardona, Inc. -- not as coowners but as absolute owners -- in order to secure an agricultural loan
worth P2,000. Upon their failure to pay their indebtedness, the mortgage
was foreclosed and the property sold to the bank as the highest bidder.
Thereafter, private respondents purchased the property from the
bank. Sppedjo
Undisputed is the fact that the land had previously been occupied by Leon
and later by Silvino Robles, petitioners predecessors-in-interest, as
evidenced by the different tax declarations issued in their names. Also
undisputed is the fact that the petitioners continued occupying and
possessing the land from the death of Silvino in 1942 until they were
allegedly ousted therefrom in 1988. In 1962, the subject property was
declared in the name of Exequiel for taxation purposes. On September 30,
1965, it was again declared in the same name; on October 28, 1965, in the
name of the Rural Bank of Antipolo; on November 7, 1966, in the name of
Hilario and Andrea; and thereafter, in the name of the Rural Bank of
Cardona and, finally, in the name of the Santos spouses.
Ostensibly, the Court of Appeals failed to consider irregularities in the
transactions involving the disputed property. First, while it was declared in
the name of Exequiel in 1962, there was no instrument or deed of
conveyance evidencing its transfer from the heirs of Silvino to him. This fact
is important, considering that the petitioners are alleging continued
possession of the property. Second, Exequiel was the father-in-law of
Hilario, to whom petitioners had entrusted the payment of the land
taxes. Third, considering that the subject property had been mortgaged by
Exequiel to the Rural Bank of Antipolo, and that it was foreclosed and in fact
declared in the banks name in 1965, why was he able to sell it to Spouses
Hilario
and
Andrea
in
1966? Lastly,
inasmuch
as
it
was
an unregistered parcel of land, the Rural Bank of Cardona, Inc., did not
observe due diligence in determining Hilarios title thereto. Jospped
The failure to show the indubitable title of Exequiel to the property in
question is vital to the resolution of the present Petition. It was from him
that Hilario had allegedly derived his title thereto as owner, an allegation
which thereby enabled him to mortgage it to the Rural Bank of Cardona. The
occupation and the possession thereof by the petitioners and their

P a g e | 38

predecessors-in-interest until 1962 was not disputed, and Exequiels

acquisition of the said property by prescription was not alleged. Thus, the
deed of conveyance purportedly evidencing the transfer of ownership and
possession from the heirs of Silvino to Exequiel should have been presented
as the best proofof that transfer. No such document was presented,
however. Scmis
Therefore, there is merit to the contention of the petitioners that Hilario
mortgaged the disputed property to the Rural Bank of Cardona in his
capacity as a mere co-owner thereof. Clearly, the said transaction did not
divest them of title to the property at the time of the institution of the
Complaint for quieting of title.
Contrary to the disquisition of the Court of Appeals, Hilario effected no clear
and evident repudiation of the co-ownership. It is a fundamental principle
that a co-owner cannot acquire by prescription the share of the other coowners, absent any clear repudiation of the co-ownership. In order that the
title may prescribe in favor of a co-owner, the following requisites must
concur: (1) the co-owner has performed unequivocal acts of repudiation
amounting to an ouster of the other co-owners; (2) such positive acts of
repudiation have been made known to the other co-owners; and (3) the
evidence thereof is clear and convincing.[12]
In the present case, Hilario did not have possession of the subject property;
neither did he exclude the petitioners from the use and the enjoyment
thereof, as they had indisputably shared in its fruits.[13] Likewise, his act of
entering into a mortgage contract with the bank cannot be construed to be a
repudiation of the co-ownership. As absolute owner of his undivided interest
in the land, he had the right to alienate his share, as he in fact
did.[14]Neither should his payment of land taxes in his name, as agreed upon
by the co-owners, be construed as a repudiation of the co-ownership. The
assertion that the declaration of ownership was tantamount to repudiation
was belied by the continued occupation and possession of the disputed
property by the petitioners as owners.Mis sc
Second Issue: Validity of the Real Estate Mortgage
In a real estate mortgage contract, it is essential that the mortgagor be the
absolute owner of the property to be mortgaged; otherwise, the mortgage is
void.[15] In the present case, it is apparent that Hilario Robles was not the
absolute owner of the entire subject property; and that the Rural Bank of
Cardona, Inc., in not fully ascertaining his title thereto, failed to observe due
diligence and, as such, was a mortgagee in bad faith.

P a g e | 39

First, the bank was utterly remiss in its duty to establish who the true
owners and possessors of the subject property were. It acted with
precipitate haste in approving the Robles spouses loan application, as well
as the real estate mortgage covering the disputed parcel of land.[16] Had it
been more circumspect and assiduous, it would have discovered that the
said property was in fact being occupied by the petitioners, who were
tending and cultivating it.
Second, the bank should not have relied solely on the Deed of Sale
purportedly showing that the ownership of the disputed property had been
transferred from Exequiel Ballena to the Robles spouses, or that it had
subsequently been declared in the name of Hilario. Because it was dealing
with unregistered land, and the circumstances surrounding the transaction
between Hilario and his father-in-law Exequiel were suspicious, the bank
should have exerted more effort to fully determine the title of the Robleses.
Rural Bank of Compostela v. Court of Appeals [17] invalidated a real estate
mortgage after a finding that the bank had not been in good faith. The Court
explained: "The rule that persons dealing with registered lands can rely
solely on the certificate of title does not apply to banks." In Tomas v. Tomas,
the Court held: Sc-slx
"x x x. Banks, indeed, should exercise more care and prudence
in dealing even with registered lands, than private individuals,
for their business is one affected with public interest, keeping in
trust money belonging to their depositors, which they should
guard against loss by not committing any act of negligence
which amounts to lack of good faith by which they would be
denied the protective mantle of land registration statute, Act
496, extended only to purchasers for value and in good faith, as
well as to mortgagees of the same character and description. x x
x."[18]
Lastly, the Court likewise finds it unusual that, notwithstanding the banks
insistence that it had become the owner of the subject property and had
paid the land taxes thereon, the petitioners continued occupying it and
harvesting the fruits therefrom.[19]
Considering that Hilario can be deemed to have mortgaged the disputed
property not as absolute owner but only as a co-owner, he can be adjudged
to have disposed to the Rural Bank of Cardona, Inc., only his undivided
share therein. The said bank, being the immediate predecessor of the Santos
spouses, was a mortgagee in bad faith. Thus, justice and equity mandate
the entitlement of the Santos spouses, who merely stepped into the shoes of

P a g e | 40

the bank, only to what legally pertains to the latter -- Hilarios share in the
disputed property. Missc
Third Issue: Efficacy of Free Patent Grant
Petitioners repeatedly insist that the disputed property belongs to them
by private ownership and, as such, it could not have been awarded to the
Santos spouses by free patent. They allege that they possessed it in the
concept of owners -- openly, peacefully, publicly and continuously as early
as 1916 until they were forcibly ousted therefrom in 1988. They likewise
contend that they cultivated it and harvested its fruits. Lucio Robles
testified:
"xxx xxx xxx
Q By the way, why do you know this parcel of land?
A Because before my father died, he showed me all the
documents.
Q Before the death of your father, who was the owner of this
parcel of land?
A My father, sir. Spped
Q How did your father acquire this parcel of land?
A My father knew that it [was] by inheritance, sir.
Q From whom?
A From his father, Leon Robles, sir.
Q And do you know also [from] whom Leon Robles acquired this
land?
A It was inherited from his father, sir.
Q What is the nature of this parcel of land?
A Its an agricultural land, sir,
Q Now, at the time of the death of your father, this land was
planted with what crops?

P a g e | 41

A Mango trees, santol trees, and I was the one who planted
those trees, sir.
Q When did you plant those trees?
A Before the death of my father, sir. M-issdaa
Q Now, after the death of your father, who cultivated this parcel
of land?
A I took charge of the land after the death of my father, sir.
Q Up to when?
A Up to the present, sir, after this case was already filed."[20]
The preceding claim is an assertion that the subject property is private land.
The petitioners do not concede, and the records do not show, that it was
ever an alienable land of the public domain. They allege private ownership
thereof, as evidenced by their testimonies and the tax declarations issued in
the names of their predecessors-in-interest. It must be noted that while
their claim was not corroborated by other witnesses, it was not controverted
by the other parties, either. Kycalr
Carlos Dolores insisted that the Rural Bank of Cardona, Inc., of which he was
the manager, had acquired and possessed the subject property. He did not,
however, give any reason why the petitioners had continued occupying it,
even as he admitted on the stand that he had visited it twice.[21]
In the light of their open, continuous, exclusive and notorious possession
and occupation of the land, petitioners are "deemed to have acquired, by
operation of law, a right to a grant, a government grant, without the
necessity of a certificate of title being issued."[22] The land was "segregated
from the public domain." Accordingly, the director of lands had no authority
to issue a free patent thereto in favor of another person. Verily,
jurisprudence holds that a free patent covering private land is null and
void.[23]
Worth quoting is the disquisition of the Court in Agne v. Director of
Lands,[24] in which it held that a riparian owner presently in possession had a
better right over an abandoned river bed than had a registered owner by
virtue of a free patent.

P a g e | 42

"Under the provisions of Act 2874 pursuant to which the title of

private respondents predecessor-in-interest was issued, the
President of the Philippines, or his alter ego, the Director of
Lands, has no authority to grant a free patent for land that has
ceased to be a public land and has passed to private ownership
and a title so issued is null and void. The nullity arises, not from
fraud or deceit, but from the fact that the land is not under the
jurisdiction of the Bureau of Lands. The jurisdiction of the
Director of Lands is limited only to public lands and does not
cover lands publicly owned. The purpose of the Legislature in
adopting the former Public Land Act, Act No. 2874, was and is to
limit its application to lands of the public domain, and lands held
in private ownership are not included therein and are not
affected in any manner whatsoever thereby. Land held in
freehold or fee title, or of private ownership, constitutes no part
of the public domain, and cannot possibly come within the
purview of said act 2874, inasmuch as the subject of such
freehold or private land is not embraced in any manner in the
title of the Act and the same is excluded from the provisions of
the text thereof. Kyle
"We reiterate that private ownership of land is not affected by
the issuance of the free patent over the same land because the
Public Land Act applies only to lands of the public domain. Only
public land may be disposed of by the Director of Lands. Since as
early as 1920, the land in dispute was already under the private
ownership of herein petitioners and no longer a part of the lands
of the public domain, the same could not have been the subject
matter of a free patent. The patentee and his successors-ininterest acquired no right or title to said land. Necessarily, Free
Patent No. 23263 issued to Herminigildo Agpoon is null and void
and the subsequent titles issued pursuant thereto cannot
become final and indefeasible. Hence we ruled in Director of
Lands v. Sicsican, et al. that if at the time the free patents were
issued in 1953 the land covered therein were already private
property of another and, therefore, not part of the disposable
land of the public domain, then applicants patentees acquired no
right or title to the land.
"Now, a certificate of title fraudulently secured is null and
void ab initio if the fraud consisted in misrepresenting that the
land is part of the public domain, although it is not. As earlier
stated, the nullity arises, not from the fraud or deceit, but from
the fact that the land is not under the jurisdiction of the Bureau

P a g e | 43

of Lands. Being null and void, the free patent granted and the
subsequent titles produce no legal effect whatsoever. Quod
nullum est, nullum producit effectum.
"A free patent which purports to convey land to which the
government did not have any title at the time of its issuance
does not vest any title in the patentee as against the true owner.
The Court has previously held that the Land Registration Act and
the Cadastral Act do not give anybody who resorts to the
provisions thereof a better title than what he really and lawfully
has. Exsm
xxx xxx xxx
"We have, therefore, to arrive at the unavoidable conclusion that
the title of herein petitioners over the land in dispute is superior
to the title of the registered owner which is a total nullity. The
long and continued possession of petitioners under a valid claim
of title cannot be defeated by the claim of a registered owner
whose title is defective from the beginning."
The Santos spouses argue that petitioners do not have the requisite
personality to question the free patent granted them, inasmuch as "it is a
well-settled rule that actions to nullify free patents should be filed by the
Office of the Solicitor General at the behest of the Director of Lands."[25]
Private respondents reliance on this doctrine is misplaced. Indeed, the Court
held in Peltan Development, Inc. v. Court of Appeals[26] that only the
solicitor general could file an action for the cancellation of a free patent.
Ruling that the private respondents, who were applicants for a free patent,
were not the proper parties in an action to cancel the transfer certificates
covering the parcel of land that was the subject of their application, the
Court ratiocinated thus: Sl-xm-is
"The Court also holds that private respondents are not the
proper parties to initiate the present suit. The complaint, praying
as it did for the cancellation of the transfer certificates of title of
petitioners on the ground that they were derived from a
"spurious" OCT No. 4216, assailed in effect the validity of said
title. While private respondents did not pray for the reversion of
the land to the government, we agree with the petitioners that
the prayer in the complaint will have the same result of reverting
the land to the government under the Regalian Doctrine. Gabila

P a g e | 44

v. Barinaga[27] ruled that only the government is entitled to this

relief. x x x."
Because the cancellation of the free patent as prayed for by the private
respondents in Peltan would revert the property in question to the public
domain, the ultimate beneficiary would be the government, which can be
represented by the solicitor general only. Therefore, the real party-ininterest is the government, not the private respondents.
This ruling does not, however, apply to the present case. While the private
respondents in Peltan recognized that the disputed property was part of the
public domain when they applied for free patent,[28] herein petitioners
asserted and proved private ownership over the disputed parcel of land by
virtue of their open, continued and exclusive possession thereof since
1916. Msesm
Neither does the present case call for the reversion of the disputed property
to the State. By asking for the nullification of the free patent granted to the
Santos spouses, the petitioners are claiming the property which, they
contend, rightfully belongs to them.
Indeed, the same issue was resolved by this Court in Heirs of Marciano
Nagano v. Court of Appeals.[29] In that case, the trial court dismissed a
Complaint seeking the declaration of nullity of an Original Certificate of Title
issued pursuant to a free patent, reasoning that the action should have been
instituted by the solicitor general. In reversing the trial court, the Supreme
Court held: Sl-xsc
"It is settled that a Free Patent issued over private land is null
and void, and produces no legal effect whatsoever. Quod nullum
est, nullum producit effectum. Moreover, private respondents
claim of open, peaceful, continuous and adverse possession of
the 2,250 square meter portion since 1920, and its illegal
inclusion in the Free Patent of petitioners and in their original
certificate of title, gave private respondents a cause of action for
quieting of title which is imprescriptible." Scmis
In any event, the Office of the Solicitor General was afforded an opportunity
to express its position in these proceedings. But it manifested that it would
not file a memorandum, because "this case involves purely private
interests."[30]
The foregoing considered, we sustain the contention of petitioners that the
free patent granted to the Santos spouses is void. It is apparent that they

P a g e | 45

are claiming ownership of the disputed property on the basis of their

possession thereof in the concept of owners -- openly, peacefully, publicly,
continuously and adversely since 1916. Because they and their
predecessors-in-interest have occupied, possessed and cultivated it
as owners for more than thirty years,[31] only one conclusion can be drawn -it has become private land and is therefore beyond the authority of the
director of lands. Misspped
Epilogue
We recognize that both the petitioners and the Santos spouses fell victim to
the dubious transaction between Spouses Hilario and Andrea Robles and the
Rural Bank of Cardona, Inc. However, justice and equity mandate that we
declare Petitioners Lucio, Emerita, Aludia and Emilio Robles to have the
requisite title essential to their suit for quieting of title. Considering the
circumstances peculiar to this complicated problem, the Court finds this
conclusion the logical and just solution. Sc
The claim that petitioners were guilty of laches in not asserting their rights
as owners of the property should be viewed in the light of the fact that they
thought their brother was paying the requisite taxes for them, and more
important, the fact that they continued cultivating it and harvesting and
gaining from its fruits.
From another viewpoint, it can even be said that it was the Rural Bank of
Cardona, Inc., which was guilty of laches because, granting that it had
acquired the subject property legally, it failed to enforce its rights as owner.
It was oblivious to the petitioners continued occupation, cultivation and
possession thereof. Considering that they had possessed the property
in good faith for more than ten years, it can even be argued that they thus
regained it by acquisitive prescription. In any case, laches is a remedy in
equity, and considering the circumstances in this case, the petitioners
cannot be held guilty of it. Jurismis
In sum, the real estate mortgage contract covering the disputed property
a contract executed between Spouses Hilario and Andrea on the one hand
and the Rural Bank of Cardona, Inc., on the other -- is hereby declared
null and void insofar as it prejudiced the shares of Petitioners Lucio, Emerita,
Aludia and Emilio Robles; it is valid as to Hilario Robles share
therein. Consequently, the sale of the subject property to the Santos
spouses is valid insofar as it pertained to his share only. Likewise declared
null and void is Free Patent No. IV-1-010021 issued by the Bureau of Lands
covering the subject property. Jjjuris

P a g e | 46

WHEREFORE, the Petition is hereby GRANTED. The assailed Decision

is REVERSED and SET ASIDE. Except as modified by the last paragraph of
this Decision, the trial courts Decision is REINSTATED. No costs.
[G.R. No. 154415. July 28, 2005]

GASPAR CALACALA, BALTAZAR CALACALA, MELCHOR

CALACALA, SOLOMON CALACALA, FELICIDAD CALACALA,
PETRONILA CALACALA and SALOME CALACALA, petitioners,
vs. REPUBLIC OF THE PHILIPPINES, represented by the
Solicitor
General,
and
SHERIFF
JUAN
C.
MARQUEZ, respondents.
DECISION
GARCIA, J.:

In this appeal by way of a petition for review on certiorari under

Rule 45 of the Rules of Court, petitioners urge us to annul and set
aside the resolution dated 31 October 2001 and the order dated 2
July 2002 of the Regional Trial Court at Rosales, Pangasinan which
respectively dismissed petitioners complaint in Civil Case No. 1239R and denied their motion for reconsideration.
The material facts are not at all disputed:
The spouses Camilo Calacala and Conchita Calacala,
predecessors-in-interest of the herein petitioners, are the registered
owners of a parcel of land situated at Barangay Balincanaway,
Rosales, Pangasinan and covered by Transfer Certificate of Title No.
T-21204 of the Registry of Deeds of Pangasinan.
To secure the provisional release of an accused in a criminal case
then pending before the then Court of First Instance (CFI) of
Pangasinan, the spouses offered their aforementioned parcel of land
as a property bond in said case. For failure of the accused to appear
at his scheduled arraignment on 4 November 1981, the CFI ordered
the bond forfeited in favor of the government, and, following the
bondmans failure to produce in court the body of the accused,
rendered
judgment
against
the
bond
in
the
amount
of P3,500.00.
Thereafter,
the
court
issued
a
Writ
of
Execution directing the provincial sheriff to effect a levy on the
subject parcel of land and to sell the same at a public auction to
[1]

P a g e | 47

satisfy the amount of the bond. In compliance with the writ, the
deputy provincial sheriff issued on 26 July 1982 a Notice of
Levy addressed to the Register of Deeds of Pangasinan who, on 19
August 1982, caused the annotation thereof on TCT No. T-21204 as
Entry No. 83188.
[2]

Not long thereafter, a public auction of the subject parcel of land

was held on 24 September 1982, at which respondent Republic
submitted its bid for P3,500, which is the amount of the judgment
on the bond. Hence, on that same day, a Sheriffs Certificate of
Sale was issued in favor of the Republic as the winning bidder.
[3]

On 5 October 1982, the same Certificate of Sale was registered

and annotated on TCT No. T-21204 as Entry No. 83793, thereby
giving the spouses Calacala a period of one (1) year therefrom
within which to redeem their property. Unfortunately, they never
did up to the time of their respective deaths on 13 January 1988
and 8 January 1994.
Claiming ownership of the same land as legal heirs of the
deceased spouses, petitioners filed with the Regional Trial Court at
Rosales, Pangasinan a complaint for Quieting of Title and
Cancellation of Encumbrance on TCT No. T-21204 against
respondents Republic and Sheriff Juan C. Marquez. In their
complaint, docketed as Civil Case No. 1239-R and raffled to Branch
53 of the court, petitioners prayed, inter alia,for the cancellation of
Entries No. 83188 and 83793 on TCT No. T-21204 or the declaration
of said entries as null and void.
[4]

To the complaint, respondent Republic interposed a Motion to

Dismiss grounded on the (1) complaints failure to state a cause of
action and (2) prescription of petitioners right to redeem.
[5]

In their Opposition, petitioners contend that when respondent

Republic moved to dismiss the complaint for failure to state a cause
of action, it thereby hypothetically admitted all the allegations
therein, specifically the averment that despite the lapse of nineteen
(19) years, respondent did not secure the necessary Certificate of
Final Sale and Writ of Possession and failed to execute an Affidavit
of Consolidation of Ownership. Petitioners thus submit that the
Republics rights over the land in question had either prescribed,
been abandoned or waived. They add that by filing a motion to
[6]

P a g e | 48

dismiss, respondent Republic likewise admitted the allegation in the

same complaint that petitioners and their predecessors-in-interest
have been in continuous possession of the subject land and paying
the realty taxes thereon.
In the herein assailed resolution dated 31 October 2001, the
trial court granted the Republics motion to dismiss and accordingly
dismissed petitioners complaint. Petitioners moved for a
reconsideration but their motion was denied by the same court in its
equally challenged order of 2 July 2002.
[7]

[8]

Hence, petitioners present recourse, it being their contentions

that I.

THE INSTANT COMPLAINT FOR QUIETING OF TITLE AND

CANCELLATION OF ENCUMBRANCE ON TCT NO. T-21204, FILED
BEFORE THE TRIAL COURT, RGIONAL [sic] TRIAL COURT, BRANCH
53, ROSALES, PANGASINAN WAS THE PROPER REMEDY.
II.

THE COMPLAINT STATES SUFFICIENT CAUSE OF ACTION.

III.

THE CASE FOR QUIETING OF TITLE HAS NOT PRESCRIBED.

IV.

AND THE RESPONDENT REPUBLIC OF THE PHILIPPINES HAS NOT

PERFECTED ITS TITLE TO THE LAND IN QUESTION.
In the main, it is petitioners submission that their complaint a
quo sufficiently states a cause of action because they are still the
owners of the subject parcel of land despite their failure to redeem
it within the 1-year redemption period. They premise their
argument on the Republics failure to secure the Certificate of Final
Sale, execute an Affidavit of Consolidation of Ownership and obtain
a writ of possession over the same property within ten (10) years
from the registration of the Certificate of Sale on 5 October
1982. Prescinding therefrom, they thus argue that the Republics

P a g e | 49

right over the property in question has already prescribed or has

been abandoned and waived, citing, in support thereof, Article 1142
of the Civil Code. In short, it is petitioners thesis that respondent
Republic failed to perfect its title.
On the other hand, it is respondents posture that its rights and
title as owner of the same property are already perfected by the
mere failure of petitioners and/or their predecessors-in-interest to
redeem
the
same
within
one
(1)
year
from
the
registration/annotation of the Sheriffs Certificate of Sale on TCT No.
T-21204, in accordance with Section 33, Rule 39 of the 1997 Rules
of Civil Procedure.
As we see it, the only question which commends itself for our
resolution is whether the trial courts dismissal of petitioners
complaint for Quieting of Title was proper. It thus behooves us to
determine if, in the first place, petitioners have a cause of action in
their complaint.
We rule for respondent Republic.
To begin with, it bears emphasis that an action for quieting of
title is essentially a common law remedy grounded on equity. As
we held in Baricuatro, Jr. vs. CA:
[9]

Regarding the nature of the action filed before the trial court,
quieting of title is a common law remedy for the removal of any
cloud upon or doubt or uncertainty with respect to title to real
property. Originating in equity jurisprudence, its purpose is to
secure x x x an adjudication that a claim of title to or an interest in
property, adverse to that of the complainant, is invalid, so that the
complainant and those claiming under him may be forever
afterward free from any danger of hostile claim. In an action for
quieting of title, the competent court is tasked to determine the
respective rights of the complainant and other claimants, x x x not
only to place things in their proper place, to make the one who has
no rights to said immovable respect and not disturb the other, but
also for the benefit of both, so that he who has the right would see
every cloud of doubt overthe property dissipated, and he could
afterwards without fear introduce the improvements he may desire,

P a g e | 50

to use, and even to abuse the property as he deems best xxx

(Italics supplied).
Under Article 476 of the New Civil Code, the remedy may be
availed of only when, by reason of any instrument, record, claim,
encumbrance or proceeding, which appears valid but is, in fact,
invalid, ineffective, voidable or unenforceable, a cloud is thereby
casts on the complainants title to real property or any interest
therein. The codal provision reads:
Article 476. Whenever there is a cloud on title to real property or
any interest therein, by reason of any instrument, record, claim,
encumbrance or proceeding which is apparently valid or effective
but is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may
be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast
upon title to real property or any interest therein.
In turn, Article 477 of the same Code identifies the party who
may bring an action to quiet title, thus:
Article 477. The plaintiff must have legal or equitable title to, or
interest in the real property which is the subject-matter of the
action. He need not be in possession of said property.
It can thus be seen that for an action for quieting of title to
prosper, the plaintiff must first have a legal, or, at least, an
equitable title on the real property subject of the action and that the
alleged cloud on his title must be shown to be in fact invalid. So it
is that in Robles, et al. vs. CA, we ruled:
[10]

It is essential for the plaintiff or complainant to have a legal title or

an equitable title to or interest in the real property which is the
subject matter of the action. Also, the deed, claim, encumbrance or
proceeding that is being alleged as a cloud on plaintiffs title must
be shown to be in fact invalid or inoperative despite its prima facie
appearance of validity or legal efficacy.

P a g e | 51

Verily, for an action to quiet title to prosper, two (2)

indispensable requisites must concur, namely: (1) the plaintiff or
complainant has a legal or an equitable title to or interest in the real
property subject of the action; and (2) the deed, claim,
encumbrance or proceeding claimed to be casting cloud on his title
must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy.
Unfortunately, the foregoing requisites are wanting in this case.
To start with, petitioners base their claim of legal title not on the
strength of any independent writing in their favor but simply and
solely on respondent Republics failure to secure the Certificate of
Final Sale, execute an Affidavit of Consolidation of Ownership and
obtain a writ of possession over the property in dispute within ten
(10) years from the registration of the Certificate of Sale.
Petitioners reliance on the foregoing shortcomings or inactions
of respondent Republic cannot stand.
For one, it bears stressing that petitioners predecessors-ininterest lost whatever right they had over land in question from the
very moment they failed to redeem it during the 1-year period of
redemption. Certainly, the Republics failure to execute the acts
referred to by the petitioners within ten (10) years from the
registration of the Certificate of Sale cannot, in any way, operate to
restore whatever rights petitioners predecessors-in-interest had
over the same. For sure, petitioners have yet to cite any provision
of law or rule of jurisprudence, and we are not aware of any, to the
effect that the failure of a buyer in a foreclosure sale to secure a
Certificate of Final Sale, execute an Affidavit of Consolidation of
Ownership and obtain a writ of possession over the property thus
acquired, within ten (10) years from the registration of the
Certificate of Sale will operate to bring ownership back to him
whose property has been previously foreclosed and sold. As
correctly observed by the trial court, the Republics failure to do
anything within ten (10) years or more following the registration of
the Sheriffs Certificate of Sale cannot give rise to a presumption
that it has thereby waived or abandoned its right of ownership or
that it has prescribed, for prescription does not lie against the

P a g e | 52

government, nor could it be bound or estopped by the negligence

or mistakes of its officials and employees.
Quite the contrary, Section 33, Rule 39 of the 1997 Rules of
Civil Procedure explicitly provides that [u]pon the expiration of the
right of redemption, the purchaser or redemptioner shall be
substituted to and acquire all the rights, title, interest and claim of
the judgment obligor to the property as of the time of the levy.
[11]

Concededly, the 1997 Rules of Civil Procedure was yet inexistent

when the facts of this case transpired. Even then, the application
thereof to this case is justified by our pronouncement in Lascano vs.
Universal Steel Smelting Co., Inc., et al., to wit:
[12]

Procedural laws are construed to be applicable to actions pending

and undetermined at the time of their passage, and are deemed
retroactive in that sense and to that extent. As a general rule, the
retroactive application of procedural laws cannot be considered
violative of any personal rights because no vested right may attach
to nor arise therefrom.
Moreover, with the rule that the expiration of the 1-year
redemption period forecloses the obligors right to redeem and that
the sale thereby becomes absolute, the issuance thereafter of a final
deed of sale is at best a mere formality and mere confirmation of
the title that is already vested in the purchaser. As this Court has
said inManuel vs. Philippine National Bank, et al.:
[13]

Note must be taken of the fact that under the Rules of Court the
expiration of that one-year period forecloses the owners right to
redeem, thus making the sheriffs sale absolute. The issuance
thereafter of a final deed of sale becomes a mere formality, an act
merely confirmatory of the title that is already in the purchaser and
constituting official evidence of that fact. (Emphasis supplied)
With the reality that petitioners are not holders of any legal title
over the property subject of this case and are bereft of any
equitable claim thereon, the very first requisite of an action to quiet
title, i.e., that the plaintiff or complainant has a legal or an
equitable title to or interest in the real property subject matter of
the action, is miserably wanting in this case.

P a g e | 53

For another, and worse, petitioners never put in issue, as in fact

they admit in their pleadings, the validity of the Sheriffs Certificate
of Sale duly registered on 5 October 1982. On this score, the
second requisite of an action to quiet title, namely, that the deed,
claim, encumbrance or proceeding alleged to cast cloud on a
plaintiff's title is in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy, is likewise absent
herein.
WHEREFORE, the instant petition is DENIED and the assailed
resolution and order of the trial court AFFIRMED.

Portic vs Cristobal
DECISION
PANGANIBAN, J.:
An agreement in which ownership is reserved in the vendor and is not to
pass to the vendee until full payment of the purchase price is known as a
contract to sell. The absence of full payment suspends the vendors
obligation to convey title. This principle holds true between the parties,
even if the sale has already been registered. Registration does not vest, but
merely serves as evidence of, title to a particular property. Our land
registration laws do not give title holders any better ownership than what
they actually had prior to registration.
The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court,
challenging theJanuary 29, 2002 Decision[2] and the November 18,
2002 Resolution[3] of the Court of Appeals (CA) in CA-GR CV No. 66393. The
assailed Decision disposed as follows:
WHEREFORE, foregoing considered, the appealed decision is hereby
REVERSED and SET ASIDE. A new one is hereby entered ORDERING
defendant-appellant to pay the unpaid balance of P55,000.00 plus legal
interest of 6% per annum counted from the filing of this case. The
ownership of defendant-appellant over the subject property is hereby
confirmed.
No pronouncement as to costs.[4]

P a g e | 54

In the challenged Resolution,[5] the CA denied petitioners Motion for Partial

Reconsideration.
The Facts
The facts were summarized by the appellate court as follows:
Spouses Clodualdo Alcantara and Candelaria Edrosalam were the original
registered owners of a parcel of land with three-door apartment, located at
No. 9, 1st Street BBB, Marulas, Valenzuela City. Transfer Certificate of Title
No. T-71316 was issued in the names of spouses Clodualdo Alcantara and
Candelaria Edrosalam.
On October 2, 1968, spouses Clodualdo Alcantara and Candelaria
Edrosalam sold the subject property in favor of [petitioners] with the
condition that the latter shall assume the mortgage executed over the
subject property by spouses Clodualdo Alcantara and Candelaria Edrosalam
in favor of the Social Security System.
[Petitioners] defaulted in the payment of the monthly amortizations due on
the mortgage. The Social Security System foreclosed the mortgage and sold
the subject property at public auction with the Social Security System as the
highest bidder.
On May 22, 1984, before the expiration of the redemption period,
[petitioners] sold the subject property in favor of [respondent] in
consideration of P200,025.89. Among others, the parties agreed that
[respondent] shall pay the sum of P45,025.89 as down payment and the
balance of P155,000.00 shall be paid on or before May 22, 1985. The
parties further agreed that in case [respondent] should fail to comply with
the conditions, the sale shall be considered void and [petitioners] shall
reimburse [respondent] of whatever amount already paid.
On the same date, [petitioners] and [respondent] executed a Deed of Sale
with Assumption of Mortgage whereby [petitioners] sold the subject
property in favor of [respondent] in consideration of P80,000.00, P45,000.00
thereof shall be paid to the Social Security System.
On July 30, 1984, spouses Clodualdo Alcantara and Candelaria Edrosalam,
the original owners of the subject property, sold the subject property in
favor of [respondent] forP50,000.00.

P a g e | 55

On the same date, [respondent] executed a Deed of Mortgage whereby

[respondent] constituted a mortgage over the subject property to secure
a P150,000.00 indebtedness in favor of [petitioners].
[Respondent] paid the indebtedness due over the subject property to the
Social Security System.
On August 6, 1984, Transfer Certificate of Title No. T-71316 in the names
of spouses Clodualdo Alcantara and Candelaria Edrosalam was cancelled and
in lieu thereof Transfer Certificate of Title No. T-113299 was issued in the
name of [respondent].
On May 20, 1996, [petitioners] demanded from [respondent] the alleged
unpaid balance of P55,000.00. [Respondent] refused to pay.
On June 6, 1996, [petitioners] filed this instant civil case against
[respondent] to remove the cloud created by the issuance of TCT No. T113299 in favor of [respondent]. [Petitioners] claimed that they sold the
subject property to [respondent] on the condition that [respondent] shall
pay the balance on or before May 22, 1985; that in case of failure to pay,
the sale shall be considered void and [petitioners] shall reimburse
[respondent] of the amounts already paid; that [respondent] failed to fully
pay the purchase price within the period; that on account of this failure, the
sale of the subject property by [petitioners] to [respondent] is void; that in
spite of this failure, [respondent] required [petitioners] to sign a lease
contract over the apartment which [petitioners] occupy; that [respondent]
should be required to reconvey back the title to the subject property to
[petitioners].
[Respondent] on her part claimed that her title over the subject property is
already indefeasible; that the true agreement of the parties is that embodied
in the Deed of Absolute Sale with Assumption of Mortgage; that
[respondent] had fully paid the purchase price; that [respondent] is the true
owner of the subject property; that [petitioners] claim is already barred by
laches.[6] After
trial,
the
Regional
Trial
Court
(RTC)
of Valenzuela City rendered this judgment in favor of petitioners:
WHEREFORE, premises considered, this Court hereby adjudicates on
this case as follows:
1.)
The Court hereby orders the quieting of title or removal of cloud over
the [petitioners] parcel of land and three (3) door apartment now covered
by Transfer Certificate of Title No. T-113299 of the Registry of Deeds

P a g e | 56

for Caloocan City and Tax Declaration Nos. C-018-00235 & C-031-012077
respectively, of Valenzuela City;
2.)
The Court hereby orders the [respondent] to reconvey in favor of the
[petitioners] the parcel of land and three (3) door apartment now covered
by Transfer Certificate of Title No. T-113299 of the Registry of Deeds of
Caloocan City after reimbursement by the [petitioners] of the amount
actually paid by the [respondent] in the total amount of P145,025.89;
3.)

The Court hereby DENIES damages as claimed by both parties.[7]

Ruling of the Court of Appeals

The Court of Appeals opined that the first Memorandum of Agreement (MOA)
embodied the real agreement between the parties, and that the subsequent
Deeds were executed merely to secure their respective rights over the
property.[8] The MOA stated that Cristobal had not fully paid the purchase
price. Although this statement might have given rise to a cause of action to
annul the Deed of Sale, prescription already set in because the case had
been filed beyond the ten-year reglementary period,[9] as observed by the
CA. Nonetheless, in conformity with the principle of unjust enrichment, the
appellate court ordered respondent to pay petitioners the remaining balance
of the purchase price.[10]
In their Motion for Partial Reconsideration, petitioners contended that their
action was not one for the enforcement of a written contract, but one for the
quieting of title -- an action that was imprescriptible as long as they
remained in possession of the premises.[11] The CA held, however, that the
agreement between the parties was valid, and that respondents title to the
property was amply supported by the evidence.[12] Therefore, their action
for the quieting of title would not prosper, because they failed to show the
invalidity of the cloud on their title.
Hence, this Petition.[13]
The Issue
In its Memorandum, petitioners raise the following issues for our
consideration:
(1) Whether or not the [petitioners] cause of action is for quieting of title.
(2) Whether or not the [petitioners] cause of action has prescribed.[14]

P a g e | 57

The main issue revolves around the characterization of the parties

agreement and the viability of petitioners cause of action.
This Courts Ruling
The Petition has merit.
Main Issue:
Nature of the Action: Quieting of Title or
Enforcement of a Written Contract
Petitioners argue that the action they filed in the RTC was for the quieting of
title. Respondents demand that they desist from entering into new lease
agreements with the tenants of the property allegedly attests to the fact of
their possession of the subject premises.[15] Further, they point to the
existence of Civil Case No. 7446, an action for unlawful detainer that
respondent filed against them,[16] as further proof of that fact. Being in
continuous possession of the property, they argue that their action for the
quieting of title has not prescribed.[17]
On the other hand, respondent joins the appellate court in characterizing the
action petitioners filed in the RTC as one for the enforcement of the
MOA. Being based on a written instrument, such action has already
prescribed, respondent claims.[18] She adds that petitioners could not have
been in continuous possession of the subject property because, under a duly
notarized lease agreement, they have been paying her a monthly rental fee
of P500, which was later increased to P800.
Two questions need to be answered to resolve the present case; namely, (1)
whether Cristobals title to the property is valid; and (2) whether the Portics
are in possession of the premises, a fact that would render the action for
quieting of title imprescriptible.
Validity of Title
The CA held that the action for the quieting of title could not prosper,
because Cristobals title to the property was amply supported by evidence.
Article 476 of the Civil Code provides as follows:
Whenever there is a cloud on title to real property or any interest therein,
by reason of any instrument, record, claim, encumbrance or proceeding
which is apparently valid or effective but is in truth and in fact invalid,

P a g e | 58

ineffective, voidable, or unenforceable, and may be prejudicial to said title,

an action may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title
to real property or any interest therein.
Suits to quiet title are characterized as proceedings quasi in
rem.[19] Technically, they are neither in rem nor in personam. In an
action quasi in rem, an individual is named as defendant.[20] However,
unlike suits in rem, a quasi in rem judgment is conclusive only between the
parties.[21]
Generally, the registered owner of a property is the proper party to bring an
action to quiet title. However, it has been held that this remedy may also be
availed of by a person other than the registered owner because, in the
Article reproduced above, title does not necessarily refer to the original or
transfer certificate of title.[22] Thus, lack of an actual certificate of title to a
property does not necessarily bar an action to quiet title. As will be shown
later, petitioners have not turned over and have thus retained their title to
the property.
On the other hand, the claim of respondent cannot be sustained. The
transfer of ownership of the premises in her favor was subject to the
suspensive condition stipulated by the parties in paragraph 3 of the MOA,
which states as follows:
3. That while the balance of P155,000.00 has not yet been fully paid the
FIRST PARTY OWNERS shall retain the ownership of the above described
parcel of land together with its improvements but the SECOND PARTY BUYER
shall have the right to collect the monthly rentals due on the first door (13A) of the said apartment;[23]
The above-cited provision characterizes the agreement between the parties
as a contract to sell, not a contract of sale. Ownership is retained by the
vendors, the Portics; it will not be passed to the vendee, the Cristobals, until
the full payment of the purchase price. Such payment is a positive
suspensive condition, and failure to comply with it is not a breach of
obligation; it is merely an event that prevents the effectivity of the
obligation of the vendor to convey the title.[24] In short, until the full price is
paid, the vendor retains ownership.
The mere issuance of the Certificate of Title in favor of Cristobal did not vest
ownership in her. Neither did it validate the alleged absolute purchase of the
lot. Time and time again, this Court has stressed that registration does not

P a g e | 59

vest, but merely serves as evidence of, title. Our land registration laws do not
give the holders any better title than that which they actually have prior to
registration. [25]
Under Article 1544 of the Civil Code, mere registration is not enough to
acquire a new title. Good faith must concur.[26] Clearly, respondent has not
yet fully paid the purchase price. Hence, as long as it remains unpaid, she
cannot feign good faith. She is also precluded from asserting ownership
against petitioners. The appellate courts finding that she had a valid title to
the property must, therefore, be set aside.
Continuous Possession
The issue of whether the Portics have been in actual, continuous possession
of the premises is necessarily a question of fact. Well-entrenched is the rule
that findings of fact of the Court of Appeals, when supported by substantial
evidence, are final and conclusive and may not be reviewed on
appeal.[27] This Court finds no cogent reason to disturb the CAs findings
sustaining those of the trial court, which held that petitioners had been in
continuous possession of the premises. For this reason, the action to quiet
title has not prescribed.
WHEREFORE, the Petition is GRANTED. The challenged Decision and
Resolution of the Court of Appeals are REVERSED and SET ASIDE. The
Decision of the RTC of Valenzuela City in Civil Case No. 4935-V-96,
dated September 23, 1999, is hereby REINSTATED. No pronouncement as
to costs.
[G.R. No. 144773. May 16, 2005]
AZNAR BROTHERS REALTY COMPANY, petitioner, vs. LAURENCIO
AYING, IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS
OF EMILIANO AYING, PAULINO AYING, IN HIS OWN BEHALF AND IN
BEHALF OF THE OTHER HEIRS OF SIMEON AYING, AND WENCESLAO
SUMALINOG, IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER
HEIRS OF ROBERTA AYING, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
This resolves the petition for review on certiorari seeking the modification
of the Decision[1] of the Court of Appeals (CA) dated March 7, 2000 which
affirmed with modification the Decision of the Regional Trial Court (RTC) of
Lapu-Lapu City, Branch 27 in Civil Case No. 2930-L; and the Resolution

P a g e | 60

dated August 2, 2000 denying petitioners motion for reconsideration of the

aforementioned decision.
The antecedent facts are as follows:
The disputed property is Lot No. 4399 with an area of 34,325 square
meters located at Dapdap, Lapu-Lapu City. Crisanta Maloloy-on petitioned
for the issuance of a cadastral decree in her favor over said parcel of
land. After her death in 1930, the Cadastral Court issued a Decision
directing the issuance of a decree in the name of Crisanta Maloloy-ons eight
children, namely: Juan, Celedonio, Emiliano, Francisco, Simeon, Bernabe,
Roberta and Fausta, all surnamed Aying. The certificate of title was,
however, lost during the war.
Subsequently, all the heirs of the Aying siblings executed an ExtraJudicial Partition of Real Estate with Deed of Absolute Sale dated March 3,
1964, conveying the subject parcel of land to herein petitioner Aznar
Brothers Realty Company. Said deed was registered with the Register of
Deeds of Lapu-Lapu City on March 6, 1964 under Act No. 3344 (the law
governing registration for unregistered land), and since then, petitioner had
been religiously paying real property taxes on said property.
In 1988, herein petitioner filed a Petition for Reconstitution of the
Original Title as the original title over the subject property had been lost
during the war. On April 12, 1988, the court granted said petition, thereby
directing the Register of Deeds of Lapu-Lapu City to issue a reconstituted
title in the name of the abovementioned Aying siblings. Thus, Original
Certificate of Title (OCT) No. RO-2856 was issued.
In 1991, petitioner, claiming to be the rightful owner of the subject
property, sent out notices to vacate, addressed to persons occupying the
property. Unheeded, petitioner then filed a complaint for ejectment against
the occupants before the Metropolitan Trial Court (MTC), Lapu-Lapu City.
On February 1, 1994, the MTC ordered the occupants to vacate the
property. The case eventually reached this Court, docketed as G.R. No.
128102, entitled Aznar Brothers Realty Company vs. Court of Appeals, Luis
Aying, Demetrio Sida, Felomino Augusto, Federico Abing, and Romeo
Augusto.[2] On March 7, 2000, a Decision was promulgated in favor of herein
petitioner, declaring it as the rightful possessor of the parcel of land in
question.
Meanwhile, herein respondents, along with other persons claiming to be
descendants of the eight Aying siblings, all in all numbering around 220
persons, had filed a complaint for cancellation of the Extra-Judicial Partition
with Absolute Sale, recovery of ownership, injunction and damages with the
RTC of Lapu-Lapu City. The complaint was dismissed twice without

P a g e | 61

prejudice. Said complaint was re-filed on August 19, 1993, docketed as Civil
Case No. 2930-L.
In their amended complaint, herein respondents (plaintiffs before the
RTC) alleged that: they are co-owners of subject property, being
descendants of the registered owners thereof under OCT No. RO-2856; they
had been in actual, peaceful, physical, open, adverse, continuous and
uninterrupted possession in concept of owner of subject parcel of land since
time immemorial; their possession was disturbed only in the last quarter of
1991 when some of them received notices to vacate from petitioner and
several weeks thereafter, earthmoving equipment entered the disputed land,
bulldozing the same and destroying plants, trees and concrete monuments
(mohon); respondents discovered that such activities were being
undertaken by petitioner together with Sta. Lucia Realty and Development,
Inc.; petitioner claimed to be the owner of subject property by virtue of an
extra-judicial partition of real estate with deed of absolute sale executed in
petitioners favor by the alleged heirs of Crisanta Maloloy-on; the
aforementioned extra-judicial partition of real estate with deed of absolute
sale is a fraud and is null and void ab initio because not all the co-owners of
subject property affixed their signature on said document and some of the
co-owners who supposedly signed said document had been dead at the time
of the execution thereof; petitioner entered subject land in bad faith,
knowing fully well that it did not have any right to the land and used force,
threat and intimidation against respondents; and they suffered moral
damages.[3]
Petitioner (defendant before the RTC) filed its Answer, denying that
respondents are the lawful owners of subject parcel of land by virtue of their
being descendants or heirs of the registered owners of subject
property. Instead, petitioner alleged that it had been in actual possession of
subject land as owner thereof by virtue of the extra-judicial partition of real
property and deed of absolute sale executed in its favor; that in fact, it had
been paying taxes thereon religiously; that it tolerated about 6 persons to
live on said land but said persons were eventually ejected by court
order. Petitioner then raised the affirmative defenses of failure to state
cause of action and prescription, as it took respondents 27 years, 10 months
and 27 days to file the action to recover subject property, when an action to
recover property based on an implied trust should be instituted within 4
years from discovery of the fraud.[4]
In the Pre-Trial Order dated January 30, 1995 of the RTC, the issues
were narrowed down to the following:
1.
Whether or not the plaintiffs [herein respondents] are the heirs of
the registered owners of Lot No. 4399.

P a g e | 62

2.

Whether or not plaintiffs are the owners of Lot No. 4399.

3.
Whether or not the defendant Aznar [herein petitioner] is
estopped to make any claim on Lot No. 4399.
4.

Whether or not the defendant Aznar is a builder in bad faith.

5.
Whether or not the defendants are liable for damages and
attorneys fees in favor of the plaintiffs.
6.
Whether or not the Extra-Judicial Partition of Real Estate with
Deed of Absolute Sale is valid and had, in effect, validly conveyed to
defendant Aznar Lot No. 4399.
7.

Whether or not the plaintiffs action has prescribed.[5]

After trial, the RTC rendered a Decision dated July 4, 1997, ruling that
respondents evidence failed to prove that the extra-judicial partition with
deed of absolute sale was a totally simulated or fictitious contract and
concluded that said document is valid, thus, effectively conveying to
petitioner the property in question. It further held that respondents action
had prescribed in that the action is considered as one for reconveyance
based on implied or constructive trust, it prescribed in 10 years from the
registration of the deed on March 6, 1964; and if the action is considered as
one for annulment of contract on the ground of fraud, it should have been
filed within 4 years from discovery of the fraud. The trial court also ruled
that respondents failed to present any admissible proof of filiation, hence,
they were not able to prove that they are indeed heirs of the eight Aying
siblings who appear as the registered owners under OCT No. RO-2856.
The dispositive portion of the RTC Decision reads as follows:
WHEREFORE, judgment is hereby rendered dismissing the amended
complaint on the ground of prescription, and declaring the Extra-Judicial
Partition of Real Estate with Deed of Absolute Sale dated March 3, 1964 as
valid and binding, adjudging that Lot 4399 with an area of 34,325 square
meters located at Dapdap, Mactan, Lapu-Lapu City had been validly
conveyed to and in favor of Aznar Brothers Realty Company, and directing
the Register of Deeds of Lapu-Lapu City to register the above-mentioned
deed in accordance with law and to cancel Original Certificate of Title No.
RO-2856, and to issue a transfer certificate of title in the name of Aznar
Brothers Realty Company upon payment of the necessary registration fees
pursuant thereto.

P a g e | 63

The Writ of Preliminary Injunction issued in this case is hereby ordered

dissolved.
The Motion for Contempt filed by the plaintiffs against defendants is
dismissed for want of factual and legal basis.
Costs against the plaintiffs.
SO ORDERED.[6]
Herein respondents appealed the foregoing decision to the CA and on
March 7, 2000, said court promulgated its Decision, the dispositive portion of
which is reproduced hereunder:
THE FOREGOING CONSIDERED, the contested Decision while AFFIRMED is
hereby MODIFIED. The heirs of Emiliano Aying, Simeon Aying and Roberta
Aying are hereby declared as the lawful owners of the contested property
but equivalent only to 3/8.
SO ORDERED.
In modifying the RTC judgment, the CA ratiocinated that an action for
recovery of possession of registered land never prescribes in view of the
provision of Section 44, Act No. 496 (now Sec. 47, PD 1520), to the effect
that no title to registered land in derogation to that of a registered owner
shall be acquired by prescription. The CA further ruled that even if the
action is deemed to be based on implied trust, prescription did not begin to
run since there is no evidence that positive acts of repudiation were made
known to the heirs who did not participate in the execution of the ExtraJudicial Partition of Real Estate with Deed of Absolute Sale. Thus, striking
down the RTCs ruling that the respondents complaint is dismissible on the
ground of prescription, the CA held instead that herein respondents action
had not prescribed but upheld the validity of the Extra-Judicial Partition of
Real Estate with Deed of Absolute Sale, except as to the shares of the heirs
of Emiliano, Simeon and Roberta, who did not participate in the execution of
said document.
Herein petitioners motion for reconsideration of the CA decision was
denied per Resolution dated August 2, 2000.
Hence, the present petition for review on certiorari assailing the CA
decision on the following grounds:
I

P a g e | 64

THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT AN

HEIR OF THE ORIGINAL REGISTERED OWNER MAY LOSE HIS RIGHT TO
RECOVER A TITLED PROPERTY BY REASON OF LACHES;
II
THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT THE
ACT OF REGISTRATION OF THE DEED OF PARTITION WITH SALE MAY BE
CONSIDERED AN UNEQUIVOCAL REPUDIATION OF THE TRUST GIVING RISE
TO PRESCRIPTION;
III
THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE PROVISIONS OF
ARTICLE 1104 OF THE CIVIL CODE TO THE EFFECT THAT IN THE ABSENCE
OF BAD FAITH OR FRAUD, THE PARTITION WITH PRETERITION OF ANY
COMPULSORY HEIR SHALL NOT BE RESCINDED.[7]
In their Comment, respondents argue that this case is an action to
declare as null and void the Extra-Judicial Partition of Real Estate with Deed
of Absolute Sale, hence, under Article 1410 of the Civil Code, an action for
declaration of an inexistent contract does not prescribe. Respondents
further posit that the principle of laches should be applied against petitioner
and not against them, as they (respondents) had been in actual possession
of the subject property, while petitioner merely brought action to eject them
more than 29 years after the alleged execution of the Extra-Judicial Partition
of Real Estate with Deed of Absolute Sale. They also refuted petitioners
arguments regarding the application of the principles of implied and
constructive trusts in this case.
At the outset, it should be stressed that not all the plaintiffs who filed the
amended complaint before the trial court had been impleaded as
respondents in the present petition. The only parties impleaded are the
heirs of Emiliano, Simeon and Roberta Aying, whom the CA adjudged as
owners of a 3/8 portion of the land in dispute for not having participated in
the execution of the Extra-Judicial Partition of Real Estate with Deed of
Absolute Sale.
It is significant to note that herein petitioner does not question the CA
conclusion that respondents are heirs of the aforementioned three Aying
siblings. Hence, the trial court and appellate courts findings that the ExtraJudicial Partition of Real Estate with Deed of Absolute Sale was not forged
nor simulated and that the heirs of Emiliano, Simeon and Roberta Aying did
not participate in the execution thereof, are now beyond cavil.

P a g e | 65

The issues raised by petitioner for the Courts resolution are (1) whether
or not respondents cause of action is imprescriptible; and (2) if their right to
bring action is indeed imprescriptible, may the principle of laches apply.
Respondents alleged in their amended complaint that not all the coowners of the land in question signed or executed the document conveying
ownership thereof to petitioner and made the conclusion that said document
is null and void. We agree with the ruling of the RTC and the CA that the
Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is valid and
binding only as to the heirs who participated in the execution thereof, hence,
the heirs of Emiliano, Simeon and Roberta Aying, who undisputedly did not
participate therein, cannot be bound by said document.
However, the facts on record show that petitioner acquired the entire
parcel of land with the mistaken belief that all the heirs have executed the
subject document. Thus, the trial court is correct that the provision of law
applicable to this case is Article 1456 of the Civil Code which states:
ART. 1456. If property is acquired through mistake or fraud, the person
obtaining it is, by force of law, considered a trustee of an implied trust for
the benefit of the person from whom the property comes.
In Vda. De Esconde vs. Court of Appeals,[8] the Court expounded thus:
Construing this provision of the Civil Code, in Philippine National Bank v.
Court of Appeals, the Court stated:
A deeper analysis of Article 1456 reveals that it is not a trust in the technical
sense for in a typical trust, confidence is reposed in one person who is
named a trustee for the benefit of another who is called the cestui que trust,
respecting property which is held by the trustee for the benefit of the cestui
que trust. A constructive trust, unlike an express trust, does not emanate
from, or generate a fiduciary relation. While in an express trust, a
beneficiary and a trustee are linked by confidential or fiduciary relations, in a
constructive trust, there is neither a promise nor any fiduciary relation to
speak of and the so-called trustee neither accepts any trust nor intends
holding the property for the beneficiary.[9]
The concept of constructive trusts was further elucidated in the same
case, as follows:
. . . implied trusts are those which, without being expressed, are deducible
from the nature of the transaction as matters of intent or which are
superinduced on the transaction by operation of law as matters of equity,
independently of the particular intention of the parties. In turn, implied

P a g e | 66

trusts are either resulting or constructive

differentiated from each other as follows:

trusts.

These

two

are

Resulting trusts are based on the equitable doctrine that valuable

consideration and not legal title determines the equitable title or interest and
are presumed always to have been contemplated by the parties. They arise
from the nature of circumstances of the consideration involved in a
transaction whereby one person thereby becomes invested with legal title
but is obligated in equity to hold his legal title for the benefit of another. On
the other hand, constructive trusts are created by the construction of equity
in order to satisfy the demands of justice and prevent unjust
enrichment. They arise contrary to intention against one who, by fraud,
duress or abuse of confidence, obtains or holds the legal right to property
which he ought not, in equity and good conscience, to hold.[10] (Emphasis
supplied)
Based on such concept of constructive trusts, the Court ruled in said case
that:
The rule that a trustee cannot acquire by prescription ownership over
property entrusted to him until and unless he repudiates the trust, applies to
express trusts and resulting implied trusts. However, in constructive implied
trusts, prescription may supervene even if the trustee does not repudiate
the relationship. Necessarily, repudiation of said trust is not a condition
precedent to the running of the prescriptive period.[11]
The next question is, what is the applicable prescriptive period?
In Amerol vs. Bagumbaran,[12] the Court expounded on the prescriptive
period within which to bring an action for reconveyance of property based on
implied or constructive trust, to wit:
. . . under the present Civil Code, we find that just as an implied or
constructive trust is an offspring of the law (Art. 1456, Civil Code), so is the
corresponding obligation to reconvey the property and the title thereto in
favor of the true owner. In this context, and vis--vis prescription, Article
1144 of the Civil Code is applicable.
Article 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.

P a g e | 67

xxx

xxx

xxx

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.[13]
It has also been ruled that the ten-year prescriptive period begins to run
from the date of registration of the deed or the date of the issuance of the
certificate of title over the property, but if the person claiming to be the
owner thereof is in actual possession of the property, the right to seek
reconveyance, which in effect seeks to quiet title to the property, does not
prescribe.[14]
In the present case, respondents Wenceslao Sumalinog, an heir of
Roberta Aying; Laurencio Aying, an heir of Emiliano Aying; and Paulino
Aying, an heir of Simeon Aying, all testified that they had never occupied or
been in possession of the land in dispute.[15] Hence, the prescriptive period
of ten years would apply to herein respondents.
The question then arises as to the date from which the ten-year period
should be reckoned, considering that the Extra-Judicial Partition of Real
Estate with Deed of Absolute Sale was registered under Act No. 3344 and
not under Act No. 496 (Land Registration Act), despite the fact the land in
dispute was already titled under Act No. 496 in the names of the Aying
siblings at the time the subject document was executed.
In Spouses Abrigo vs. De Vera,[16] it was held that registration of
instruments must be done in the proper registry, in order to affect and bind
the land and, thus, operate as constructive notice to the world.[17] Therein,
the Court ruled:
x x x If the land is registered under the Land Registration Act (and has
therefore a Torrens Title), and it is sold but the subsequent sale is registered
not under the Land Registration Act but under Act 3344, as amended, such
sale is not considered REGISTERED x x x .[18]
In this case, since the Extra-Judicial Partition of Real Estate with Deed of
Absolute Sale was registered under Act No. 3344 and not under Act No. 496,
said document is deemed not registered. Accordingly, the ten-year
prescriptive period cannot be reckoned from March 6, 1964, the date of
registration of the subject document under Act No. 3344. The prescriptive
period only began to run from the time respondents had actual notice of the
Extra-Judicial Partition of Real Estate with Deed of Absolute Sale.

P a g e | 68

The only evidence on record as to when such prescriptive period

commenced as to each of the respondents are Wenceslao Sumalinogs (heir
of Roberta Aying) testimony that about three years after 1964, they already
learned of the existence of the Extra-Judicial Partition of Real Estate with
Deed of Absolute Sale;[19] and Laurencio Ayings (heir of Emiliano Aying)
admission that he found out about the sale of the land in dispute a long time
ago and can only estimate that it must be after martial law.[20] Paulino Aying
(heir of Simeon Aying) gave no testimony whatsoever as to when the
children of Simeon Aying actually learned of the existence of the document
of sale. On the other hand, petitioner did not present any other evidence to
prove the date when respondents were notified of the execution of the
subject document.
In view of the lack of unambiguous evidence of when the heirs of
Emiliano Aying and Simeon Aying discovered the existence of the document
of sale, it must be determined which party had the burden of proof to
establish such fact.
The test for determining where the burden of proof lies is to ask which
party to an action or suit will fail if he offers no evidence competent to show
the facts averred as the basis for the relief he seeks to obtain.[21] Moreover,
one alleging a fact that is denied has the burden of proving it and unless the
party asserting the affirmative of an issue sustains the burden of proof of
that issue by a preponderance of the evidence, his cause will not
succeed.[22] Thus, the defendant bears the burden of proof as to all
affirmative defenses which he sets up in answer to the plaintiffs claim or
cause of action; he being the party who asserts the truth of the matter he
has alleged, the burden is upon him to establish the facts on which that
matter is predicated and if he fails to do so, the plaintiff is entitled to a
verdict or decision in his favor.[23]
In the case at bar, it was petitioner, as the defendant before the RTC,
which set up in its Answer the affirmative defense of prescription. It was,
therefore, incumbent upon petitioner to prove the date from which the
prescriptive period began to run. Evidence as to the date when the ten-year
prescriptive period began exists only as to the heirs of Roberta Aying, as
Wenceslao Sumalinog admitted that they learned of the existence of the
document of sale in the year 1967. As to the heirs of Emiliano Aying and
Simeon Aying, there is no clear evidence of the date when they discovered
the document conveying the subject land to petitioner. Petitioner miserably
failed to adduce proof of when the heirs of Emiliano Aying and Simeon Aying
were notified of the subject document. Hence, with regard to said heirs, the
Court may consider the admission in the amended complaint that they
learned of the conveyance of the disputed land only in 1991 when petitioner

P a g e | 69

sent notices to vacate to the occupants of the subject land, as the date from
which the ten-year prescriptive period should be reckoned.
Respondents filed their Amended Complaint on December 6,
1993.[24] Thus, with regard to respondent heirs of Roberta Aying who had
knowledge of the conveyance as far back as 1967, their cause of action is
already barred by prescription when said amended complaint was filed as
they only had until 1977 within which to bring action. As to the respondent
heirs of Emiliano and Simeon Aying, they were able to initiate their action for
reconveyance of property based on implied or constructive trust well within
the ten-year prescriptive period reckoned from 1991 when they were sent by
petitioner a notice to vacate the subject property.
Evidently, laches cannot be applied against respondent heirs of Emiliano
and Simeon Aying, as they took action to protect their interest well within
the period accorded them by law.
With regard to petitioners argument that the provision of Article 1104 of
the Civil Code, stating that a partition made with preterition of any of the
compulsory heirs shall not be rescinded, should be applied, suffice it to say
that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is
not being rescinded. In fact, its validity had been upheld but only as to the
parties who participated in the execution of the same. As discussed above,
what was conveyed to petitioner was ownership over the shares of the heirs
who executed the subject document. Thus, the law, particularly, Article
1456 of the Civil Code, imposed the obligation upon petitioner to act as a
trustee for the benefit of respondent heirs of Emiliano and Simeon Aying
who, having brought their action within the prescriptive period, are now
entitled to the reconveyance of their share in the land in dispute.
IN VIEW OF THE FOREGOING, the petition is PARTIALLY GRANTED and
the Decision of the Court of Appeals dated March 7, 2000 is MODIFIED, as
follows: The amended complaint of the heirs of Roberta Aying is DISMISSED
on the ground of prescription. However, the heirs of Emiliano Aying and
Simeon Aying, having instituted the action for reconveyance within the
prescriptive period, are hereby DECLARED as the LAWFUL OWNERS of a 2/8
portion of the parcel of land covered by Original Certificate of Title No. RO2856.
SO ORDERED.