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FUDOT v CATTLEYA LAND

For resolution is a petition that seeks to nullify the Decision [1] and Resolution[2] of the Court of
Appeals dated 28 April 2005 and 11 January 2006, respectively, in C.A.G.R. CV No. 73025 which
declared respondent as having a better right over a parcel of land located in Doljo, Panglao, Bohol.
FACTS: On 1992, Cattleya Land (Respondent) intended to buy the parcels of land owned by
Spouses Tecson. However, only 6 out of 9 lots were annotated since 3 of those are subject to
attachment.
On 1995, Fudot (Petitioner) presented for registration before the Register of Deeds the owners
copy of the title of the subject property, together with the deed of sale purportedly executed by
the Tecsons in favor of petitioner on 19 December 1986. Respondent opposed the petitioners
application but the ROD had already registered the Deed of Sale in favor of Fudot.
Respondent filed its Complaint[6] for Quieting Of Title &/Or Recovery Of Ownership, Cancellation Of
Title With Damages before the Regional Trial Court of Tagbilaran City.[7]
Asuncion filed a
complaint-in-intervention, claiming that she never signed any deed of sale covering any part of their
conjugal property in favor of petitioner and that her husband had an amorous relationship with the
petitioner.

On 31 October 2001, the trial court rendered its decision: [11] (i) quieting the title or ownership
of the subject land in favor of respondent; (ii) declaring the deed of sale between petitioner and
spouses Tecson invalid; (iii) ordering the registration of the subject land in favor of respondent; (iv)
dismissing respondents claim for damages against the Register of Deeds for insufficiency of
evidence; (v) dismissing Asuncions claim for damages against petitioner for lack of factual basis;
and (vi) dismissing petitioners counterclaim for lack of the required preponderance of evidence.[12]
According to the trial court, respondent had recorded in good faith the deed of sale in its
favor ahead of petitioner. Moreover, based on Asuncions convincing and unrebutted testimony, the
trial court concluded that the purported signature of Asuncion in the deed of sale in favor of
petitioner was forged, thereby rendering the sale void.
ISSUE: IN SUBSEQUENT REGISTRATION OF REGISTERED LANDS, AS BY SALE, WHICH
LAW SHALL GOVERN, ARTICLE 1544 OF CIVIL CODE OR P.D. 1529 OR TORRENS SYSTEM?
HELD: In the first place, there is no double sale to speak of. Art. 1544 of the Civil Code, [24] which
provides the rule on double sale, applies only to a situation where the same property is validly sold
to different vendees. In this case, there is only one sale to advert to, that between the spouses
Tecson and respondent.
The act of registration does not validate petitioners otherwise void contract. Registration is a mere
ministerial act by which a deed, contract, or instrument is sought to be inscribed in the records of

the Office of the Register of Deeds and annotated at the back of the certificate of title covering the
land subject of the deed, contract, or instrument.While it operates as a notice of the deed, contract,
or instrument to others, it does not add to its validity nor converts an invalid instrument into a valid
one as between the parties,[32] nor amounts to a declaration by the state that the instrument is a
valid and subsisting interest in the land.[33] The registration of petitioners void deed is not an
impediment to a declaration by the courts of its invalidity.
Justice Jose Vitug, who explained that the registration contemplated under Art. 1544 has been
held to refer to registration under P.D. No. 1529, thus:
The registration contemplated under Art. 1544 has been held to refer
to registration under Act 496 Land Registration Act (now PD 1529) which
considers the act of registration as the operative act that binds the land
(see Mediante v. Rosabal, 1 O.G. [12] 900, Garcia v. Rosabal, 73 Phil 694). On
lands covered by the Torrens System, the purchaser acquires such rights and
interest as they appear in the certificate of title, unaffected by any prior lien or
encumbrance not noted therein. The purchaser is not required to explore farther
than what the Torrens title, upon its face, indicates. The only exception is where
the purchaser has actual knowledge of a flaw or defect in the title of the seller or
of such liens or encumbrances which, as to him, is equivalent to registration

FERNANDEZ VS. TARUN


G.R. No. 143868
November 14, 2002
FACTS: a fishpond was originally covered by a OCT, co-owned by the Fernandez siblings. 2 of
the 5 siblings, Antonio and Demetria, sold their respective shares to the spouses Tarun, both
registered and annotated on the OTC.
Later, the co-owners of the subject fishpond and another fishpond executed a Deed of ExtraJudicial Partition of 2 parcels of registered land with exchange of shares. Among the parties to
the deed are the Fernandez siblings. It was stipulated in the deed that the parties recognize and
respect the sale in favor of Spouses Tarun stated above.

By virtue of the Deed of Extra-Judicial Partition, Angel Fernandez exchanged his share on the
2nd fishpond to the shares of his co-owners in the remaining portion of the first fishpond, making
Angel and the Spouses Tarun co-owners of the first fishpond. By virtue of said deed, a TCT was
issued in the name of Angel and spouses Tarun. However, it was Angel and later on his heirs
who remained in possession of the entire fishpond.
When Angel was still alive, Spouses Tarun sought the partition of the property and their share of
its income. Angel refused to heed their demand. After the death of Angel, Spouses Tarun wrote

his heirs (petitioners herein) of their desire for partition but this was rejected by the latter. Hence
the suit for partition and damages

RTC ruled in favor of petitioners. CA reversed the decision. Hence this petition.

HELD: Petitioners aver that the sale to respondents is void, because it did not comply with the
requirements of the Civil Code. According to them, they were not notified of the sale, but
learned about it only when they received the summons for the partition case. They claim their
right to redeem the property under the following provisions of the Civil Code:
Article 1620. A co-owner of a thing may exercise the right of redemption in case the
shares of all the other co-owners or of any of them, are sold to a third person. If the price
of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one
.
In this case, it is quite clear that respondents are petitioners co-owners. The sale of the
contested property to Spouses Tarun had long been consummated before petitioners
succeeded their predecessor, Angel Fernandez. By the time petitioners entered into the coownership, respondents were no longer third persons, but had already become co-owners of
the whole property. A third person, within the meaning of Article 1620, is anyone who is not a
co-owner.
JOVEN V. CA
The petitioner was the registered owner of three parcels of land which she mortgaged in favor of
the Development Bank of the Philippines. Upon the extrajudicial foreclosure of the mortgage
due to her failure to pay her loan, the properties were sold at public auction to DBP as the
biggest bidder. A certificate of sale was issued and annotated on the certificate of title on
November 17, 1982.
After the expiration of the redemption period, no redemption having been made by the
petitioner, DBP sold the subject properties to Roberto Paguia, one of the herein private
respondents, through a deed of sale executed on December 17, 1985. On January 30, 1986,
Paguia took possession of the properties through his representative, Fernando Lasala, the other
private respondent.
Earlier, the petitioner had filed on December 3, 1985, an action before the Regional Trial Court
of Lucena City (raffled later to Branch 55) for the annulment of the mortgage and its foreclosure.
Named as defendants were DBP and the private respondents. Later, when her application for
preliminary injunction and restraining order was denied, she lodged with the Municipal Circuit
Trial Court of Lucban-Sampaloc complaint against the private respondents for forcible entry with
a prayer for writ of mandatory injunction. This was docketed as Civil Case No. 155.

n a decision dated May 14, 1986, the case was dismissed for lack of jurisdiction. But on May 29,
1986, the petitioner filed a motion for reconsideration, which was granted. In a resolution dated
July 11, 1986, 1 the private respondents were ordered to: 1) immediately restore and deliver
possession of the subject properties to the petitioner; 2) render to the petitioner an accounting of
all the fruits and products gathered from said property from the time they took possession
thereof until they vacate the same; and 3) reimburse the petitioner the total cost of such
accounting.
This resolution was reversed on appeal by the Regional Trial Court of Lucena City, Branch
59, 2 which held that the court a quo had no jurisdiction over the ejectment case because of the
issue of ownership raised therein and that, assuming such jurisdiction, the decision had already
become final and executory when the resolution dated July 11, 1986, was rendered. The
petitioner elevated the case to the respondent Court of Appeals, which sustained the assailed
decision in toto. 3
She is now before us in this petition for review on certiorari, contending that the Municipal
Circuit Trial Court had jurisdiction over the ejectment case and that the private respondents
were guilty of forcible entry on the subject premises for occupying the same without judicial
authorization.
The petition has merit:
It is true that before the petitioner instituted the action for forcible entry in the Municipal Circuit
Trial Court of Lucban-Sampaloc, the case for annulment of the mortgage and foreclosure sale,
which necessarily involves recovery of ownership, was already being litigated in the Regional
Trial Court of Lucena City. Even so, the municipal court could, pending final adjudication of that
case, exercise its jurisdiction to determine the right of possession (only) over the subject
properties in the ejectment case.

There is no question that under Section 1, par. A (1), of the said Rule, the Metropolitan Trial
Courts, Municipal Trial Courts and Municipal Circuit Trial Courts have jurisdiction over cases of
forcible entry and unlawful detainer except where the question of ownership is involved or where
the damages or unpaid rentals sought to be recovered by the plaintiff exceed P20,000.00 at the
time of the filing of the complaint. *
However, it is incorrect to say that the question of ownership was involved in the ejectment case
filed by the petitioner simply because she alleged in her complaint that she was the original
owner of the subject properties. That the petitioner instituted a separate action for the
annulment of the mortgage is not a valid reason either for defeating the summary remedy of
ejectment. On the contrary, it only bolsters the conclusion that the ejectment case did not
involve the question of title as this was the subject of the annulment case before the Regional
Trial Court of Lucena City. The Rule on Summary Procedure was clearly applicable because the
ejectment case involved only the restoration of possession of the subject land and not its
ownership.

The private respondents also contend that the Municipal Circuit Trial Court had no jurisdiction
over the complaint for forcible entry because; a) under Section 19 par. (2) of BP 129, as
amended, the Regional Trial Court has exclusive original jurisdiction over all civil actions which
involve the title to, or possession of, real property or any interest therein; and b) under Section
1, par. A (1) of the Rule on Summary Procedure, cases of forcible entry and detainer involving
the question of ownership are expressly excluded from the summary jurisdiction of the municipal
court.
Curiously, however, they also insist that an action for forcible entry and unlawful detainer shall
be governed by the Rule on Summary Procedure pursuant to Section 36 of BP 129 and that the
petitioner is now estopped from assailing the applicability of that Rule.
There is no question that under Section 1, par. A (1), of the said Rule, the Metropolitan Trial
Courts, Municipal Trial Courts and Municipal Circuit Trial Courts have jurisdiction over cases of
forcible entry and unlawful detainer except where the question of ownership is involved or where
the damages or unpaid rentals sought to be recovered by the plaintiff exceed P20,000.00 at the
time of the filing of the complaint. *
However, it is incorrect to say that the question of ownership was involved in the ejectment case
filed by the petitioner simply because she alleged in her complaint that she was the original
owner of the subject properties. That the petitioner instituted a separate action for the
annulment of the mortgage is not a valid reason either for defeating the summary remedy of
ejectment. On the contrary, it only bolsters the conclusion that the ejectment case did not
involve the question of title as this was the subject of the annulment case before the Regional
Trial Court of Lucena City. The Rule on Summary Procedure was clearly applicable because the
ejectment case involved only the restoration of possession of the subject land and not its
ownership.
The respondent court also sustained the ruling of the Regional Trial Court that the motion for
reconsideration filed by the petitioner with the Municipal Circuit Trial Court did not stop the
running of the reglementary period to appeal because such motion was a prohibited pleading
under Section 15 (c) ** of the Rule on Summary Procedure. Its conclusion was that the
Municipal Circuit Trial Court had already lost jurisdiction to issue the resolution dated July 11,
1986, because the decision sought to be reconsidered had then become already final and
executory.
We do not agree. The Municipal Circuit Trial Court did not err in holding that the motion for
reconsideration was not covered by the prohibition under Section 15 (c). The motion prohibited
by this section is that which seeks reconsideration of the judgment rendered by the court after
trial on the merits of the case. 5 The decision dismissing the petitioner's ejectment case for lack
of jurisdiction was not an adjudication on the merits. Review thereof could therefore be sought
by the petitioner through her motion for reconsideration and this motion, which was not pro
forma, had the effect of suspending the running of the period to appeal.
Now, on the issue of possession:
Section 7 of Act No. 3135, as amended by Act No. 4118, provides that in case of extrajudicial
foreclosure of mortgage, the court *** may issue as a matter of course a writ of possession in

favor of the purchaser even during the redemption period, provided that a proper motion has
been filed, a bond is approved, and no third person is involved.
Section 6 of the Act provides that where an extrajudicial sale is made, "redemption shall be
governed by the provisions of sections four hundred and sixty-four to four hundred and sixty-six,
inclusive, of the Code of Civil Procedure, in so far as these are not inconsistent with the
provisions of this Act."
Sections 464-466 of the Code of Civil Procedure were superseded by Sections 25-27 and
Section 31 of Rule 39 of the Rules of Court, which in turn were replaced by Sections 29 to 31
and Section 35 of Rule 39 of the Revised Rules of Court.
Section 35 provides that "if no redemption be made within twelve (12) months after the sale, the
purchaser, or his assignee, is entitled to a conveyance and the possession of property, . . . The
possession of the property shall be given to the purchaser or last redemptioner by the same
officer unless a third party is actually holding the property adversely to the judgment debtor."
To give effect to his right of possession, the purchaser must invoke the aid of the courts and ask
for a writ of possession. He cannot simply take the law into his own hands and enter the
property without judicial authorization. 6 We have consistently held that he need not bring a
separate and independent suit for this purpose. 7Nevertheless, it is essential that he ask for and
be granted a writ of possession in order that he may be legally installed in the property he has
bought.
Section 63 (b) of P.D. 1529, otherwise known as the Property Registration Decree, requires that
in case of non-redemption, the purchaser at a foreclosure sale shall file with the Register of
Deeds either a final deed of sale executed by the person authorized by virtue of the power of
attorney embodied in the deed of mortgage or his sworn statement attesting to the fact of nonredemption. The Register of Deeds shall thereupon issue a new certificate in favor of the
purchaser after the owner's duplicate certificate shall have been previously delivered and
canceled.
In F. David Enterprises vs. Insular Bank of Asia and America, 8 this Court held:
It is settled that the buyer in a foreclosure sale becomes the absolute owner of
the property purchased if it is not redeemed during the period of one year after
the registration of the sale. As such, he is entitled to the possession of the said
property and can demand it at any time following the consolidation ownership in
his name and the issuance to him of a new transfer certificate of title. The buyer
can in fact demand possession of the land even during the redemption period
except that he has to post a bond in accordance with Section 7 of Act No. 3135
as amended. No such bond is required after the redemption period if the property
is not redeemed. Possession of the land then becomes an absolute right of the
purchaser as confirmed owner. Upon proper application and proof of title, the
issuance of the writ of possession becomes a ministerial duty of the
court. (Emphasis supplied).

In the case at bar, there is no showing that after the lapse of the redemption period without the
petitioner having redeemed the lands, DBP executed an affidavit of consolidation of ownership
of the subject properties. Neither has it filed with the Register of deeds a final deed of sale or a
sworn statement attesting to the fact of non-redemption. The circumstance that the properties
are still in the name of the petitioner shows that DBP has also not yet obtained a new certificate
of title in its name. And neither does it appear that DBP, on the basis of its purchase of the lands
at the foreclosure sale, ever secured a writ of possession to authorize its entry into the said
lands.
Not having done any of these, DBP had as yet not acquired any perfected right of possession
that it could transfer to the private respondents. And as the petitioner continued in actual
possession of the subject premises, she could undoubtedly maintain an action for forcible entry
against the private respondents when, not being armed with a court order or a writ of
possession, they simply entered and took possession of the subject lands.
The only issue in an action for forcible entry is the physical or material possession of real
property, that is, possession de facto and not possession de jure. The philosophy underlying this
remedy is that irrespective of the actual condition of the title to the property, the party in
peaceable quiet possession shall not be turned out by strong hand, violence or terror. In
affording this remedy of restitution, the statute seeks to prevent breaches of the peace and
criminal disorder which might ensue from the withdrawal of the remedy. Another purpose is to
discourage those persons who, believing themselves entitled to the possession of the property,
resort to force rather than to some appropriate action in the courts to assert their claims. 9
Under Section 1, Rule 70, of the Rules of Court, there is forcible entry when one in physical
possession of a land or building is deprived of that possession by another through force,
intimidation, threat, strategy or stealth. The words "by force, intimidation, threat, strategy or
stealth" include every situation or condition under which one person can wrongfully enter upon
real property and exclude another, who has had prior possession thereof. To constitute the use
of "force" as contemplated in the above-mentioned provision, the trespasser does not have to
institute a state of war. Nor is it even necessary that he use violence against the person of the
party in possession. The act of going on the property and excluding the lawful possessor
therefrom necessarily implies the exertion of force over the property, and this is all that is
necessary. 10
It is noted that the petitioner instituted the action for annulment of mortgage on December 3,
1985, while the deed of sale in favor of the private respondent was executed on December 17,
1985. Paguia cannot say that when he took possession of the subject land on January 30, 1986,
he was acting in good faith. Neither can be claim that he had no knowledge of the pendency of
that litigation because he was in fact one of the defendants in that case. In any event, the fact
that the titles were still in the name of the petitioner should have warned him of the need to
ascertain the status of the properties before he took possession of them.
The private respondents also assert that the institution of the ejectment case resulted in the
splitting of a single cause of action into two, one for the recovery of ownership and possession
and the other for recovery of possession de facto.
In Drilon vs. Gaurana, 11 this Court held:

It is true that a party may not institute more than one suit for a single cause of
action (Rule 2, Sec. 3, Revised Rules of Court) and if two or more complaints are
brought for different parts of a single cause of action, the filing of the first may be
pleaded in abatement of the other (Rule 2, Sec. 4 Revised Rules of Court).
However, a forcible entry or unlawful detainer action has an entirely different
subject from that of an action for reconveyance of title. What is involved in a
forcible entry case is merely the issue of material possession or possession de
facto; whereas in an action for reconveyance, ownership is the issue. So much
so that the pendency of an action for reconveyance of title over the same
property does not divest the city or municipal court of its jurisdiction to try the
forcible entry or unlawful detainer case, nor will it preclude or bar execution of
judgment in the ejectment case where the only issue involved is material
possession or possession de facto (De la Cruz v. Court of Appeals, 133 SCRA
520 [1984]).
While there may be identity of parties and subject matter in the two actions, the issues involved
and the reliefs prayed for are not the same. In the annulment suit, the issue is the validity of the
mortgage and the subsequent foreclosure sale whereas the issue in the ejectment case is
whether, assuming the mortgage and foreclosure sale to be valid, the private respondents have
the right to take possession of the property. In the former case, the relief prayed for is recovery
of ownership of the subject land while in the latter it is restoration of possession thereof to the
petitioner. Hence, the municipal court had jurisdiction to try the ejectment case while the
annulment suit was being litigated in the regional trial court.
The contention that the petitioner was forum-shopping must also be rejected. As an injunction
cannot be a substitute for the other suits for recovery of possession, 12 such as an action for
forcible entry or unlawful detainer andaccion publiciana, denial of the injunction did not bar the
petitioner from availing herself of the more appropriate remedy, to wit, the action for forcible
entry. 13
In sum, the respondent court erred when it affirmed the decision of the Regional Trial Court
declaring that the Municipal Circuit Trial Court had no jurisdiction over the ejectment case filed
by the petitioner. We find that it had.
ACCORDINGLY, the petition is GRANTED and the resolution of the Municipal Circuit Trial Court
of Lucban, Sampaloc dated July 11, 1986, in Civil Case No. 155 is REINSTATED. Costs against
the private respondents.
SO ORDERED.

DBP V. CA- Good Faith and Redemption


A mistake upon a doubtful or difficult question of law may be the basis of good faith.

FACTS:
Spouses Piedas are registered owners of a parcel of land in Capiz, which they mortgaged to
DBP to secure the loan (P20,000) they obtained from the latter. Piedas eventually defaulted,
prompting DBP to extra-judicially foreclose and take possession of such property. The Ministry
of Justice, then, opined through its Opinion No. 92 (78) that lands covered by P.D. No. 27, to
which the subject property was included, may not be the object of foreclosure proceedings. The
Piedas, then, sought to redeem such property (with P10,000 as downpayment) but was denied
as the land was allegedly tenanted. They then sought the cancellation of the title and specific
performance, stating that DBP acted in bad faith when it took possession of the property
andcaused the consolidation of its title in spite of the fact that the 5-year redemption period
expressly stated in the Sheriffs Certificate of Sale had not yet lapsed and that their offer to
redeem was within the redemption period.

ISSUE:
Whether or not DBP acted in bad faith when it took possession of the property

RULING: NO.
DBPs act of consolidating its title and taking possession of the property after the expiration of
the redemption period was in accordance with Sec. 6 of Act No. 3135, which states that if no
redemption of a foreclosed property is made within one year, the purchaser (DBP) is entitled as
a matter of right to consolidate and to possess the property. In addition to this, it was in
consonance with Sec. 4 of the mortgage contract between DBP and the Piedas where they
agreed the appointment of DBP as receiver to take charge and to hold possession of the
mortgaged property in case of foreclosure. In fact, without DBPs act of consolidating its title, the
Piedas would not be able to assert their right to repurchase the property within 5 years, which
would begin to run after the expiration of the one-year period. Thus, its acts cannot be tainted
with bad faith nor did it impair Piedas right to repurchase.

It may also be argued that P.D. No. 27 was already in effect when DBP foreclosed the property.
However, the legal propriety of the foreclosure of the land was questioned only after Opinion No.
92 (78) was issued, which happened almost 2 months after DBP consolidated its title to the
property. By law and jurisprudence, a mistake upon a doubtful or difficult question of law may
properly be the basis of good faith.

Art. 526 of NCC states that a possessor in good faith is one who is not aware that there exists
in his title or mode of acquisition any flaw, which invalidates it. Moreover, Art. 527 of NCC

provides good faith is always presumed, and upon him who alleges bad faith on the part of the
possessor rests the burden of proof. Thus, it is incumbent on the Piedas to prove that DBP
was aware of the flaw in its title (nullity of the foreclosure), but this they failed to do.

VELASCO vs. CUSI, JR. and THE CITY OF DAVAO


G.R. No. L-33507
July 20, 1981
FACTS: Petitioner filed in the CFI of Davao an action against Davao City to quiet title to her Lot
77-B-2, a portion of which she claims to having been occupied illegally as part of Bolton Street,
Davao City.
On a motion to dismiss filed by the defendant, on the ground that the complaint states no cause
of action, the Court, presided over by respondent Judge Cusi Jr., dismissed the case. The
allegations in the complaint that the Bolton Street encroached on the lot of the plaintiff and that
the defendant had continuously occupied the portion so encroached upon do not, contrary to
the conclusion of the plaintiff found in the complaint, cast . . a cloud of doubt on the title of the
plaintiff over said portion which would justify this action.
Hence, this petition for certiorari seeking a review of the Order of dismissal

ISSUE: WON Boston st. is an easement and a legal encumbrance on petitioners lot.
HELD: WHEREFORE, no reversible error having been found in the Order complained of, the
same is hereby AFFIRMED, and the instant petition, dismissed

YES

Section 39 of Act 496:

Every person receiving a certificate of title in pursuance of a decree or registration, and every
subsequent purchasers of registered land who takes a certificate of title for value in good faith
shall hold the same free of all encumbrances, except those noted on said certificate, and any of
the following encumbrances which may be subsisting namely:
xxx xxx xxx

Third. Any public highway, way, private way, or any government irrigation
XX

It appears on the face of the complaint that Bolton Street has been where it is from time
immemorial. Bolton Street constituted an easement of public highway on subject Lot No. 77,
from which petitioners lot was taken, when the said bigger lot was original registered. It
remained as such legal encumbrance, as effectively as if it had been duly noted , or
notwithstanding the lack of an annotation, on the certificate of title, by virtue of the clear and
express provision of Section 39 of Act 496, it being admitted that at the time of the registration of
Lot 77, the public highway was already in existence or subsisting

NOTES:
Bolton Street cannot be a discontinuous easement as she claims it to be, which may not be
acquired by prescription. Nonetheless, whether the mode of acquisition of the easement that
Bolton Street is, would be only by virtue of title, as petitioner contends, this is not material or of
any consequence. The action is to quiet title and damages; but the complaint does not allege
any cloud or doubt on the title

SUMIPAT V. BANGA

This is a Petition for Review on Certiorari[1] of the Decision[2] of the Court of Appeals which
reversed and set aside the decision[3] of the Regional Trial Court (RTC) and partially annulled
the Deed of Absolute Transfer and/or Quitclaim (the deed) subject of this case.
We quote the appellate courts findings of fact:
The spouses Placida Tabo-tabo and Lauro Sumipat, who contracted marriage on July 20, 1939,
acquired three parcels of land two of which were covered by Original Certificate of Title No. P17842 and Transfer Certificate of Title No. T-15826.
The couple was childless.
Lauro Sumipat, however, sired five illegitimate children out of an extra-marital affair with Pedra
Dacola, namely: herein defendants-appellees Lydia, Laurito, Alicia, Alejandro and Lirafe, all
surnamed Sumipat.

On January 5, 1983, Lauro Sumipat executed a document denominated DEED OF ABSOLUTE


TRANSFER AND/OR QUIT-CLAIM OVER REAL PROPERTIES (the assailed document) in
favor of defendants-appellees covering the three parcels of land (the properties). On the
document appears the signature of his wife Placida which indicates that she gave her marital
consent thereto.
It appears that on January 5, 1983 when the assailed document was executed, Lauro Sumipat
was already very sick and bedridden; that upon defendant-appellee Lydias request, their
neighbor Benjamin Rivera lifted the body of Lauro Sumipat whereupon Lydia guided his (Lauro
Sumipats) hand in affixing his signature on the assailed document which she had brought; that
Lydia thereafter left but later returned on the same day and requested Lauros unlettered wife
Placida to sign on the assailed document, as she did in haste, even without the latter getting a
responsive answer to her query on what it was all about.
After Lauro Sumipats death on January 30, 1984, his wife Placida, hereinafter referred to as
plaintiff-appellant, and defendants-appellees jointly administered the properties 50% of the
produce of which went to plaintiff-appellant.
As plaintiff-appellants share in the produce of the properties dwindled until she no longer
received any and learning that the titles to the properties in question were already
transferred/made in favor of the defendants-appellees, she filed a complaint for declaration of
nullity of titles, contracts, partition, recovery of ownership now the subject of the present appeal.
Defendant-appellee Lydia disclaims participation in the execution of the assailed document, she
claiming to have acquired knowledge of its existence only on January 10, 1983 or five days after
its execution when Lauro Sumipat gave the same to her.
Branch 6 of the Regional Trial Court of Dipolog City decided the case in favor of defendantsappellees, it holding that by virtue of the assailed document the due execution of which was not
contested by plaintiff-appellant, the properties were absolutely transferred to defendantsappellees.[4]
The trial court found that the subject properties are conjugal having been acquired during
the marriage of Lauro Sumipat and Placida Tabotabo (Placida). However, because Placida
failed to question the genuineness and due execution of the deed and even admitted having
affixed her signature thereon, the trial court declared that the entirety of the subject properties,
and not just Lauro Sumipats conjugal share, were validly transferred to the defendants, the
petitioners herein.[5]
On appeal,[6] the appellate court held that since Placida was unlettered, [7] the appellees, the
petitioners herein, as the parties interested in enforcing the deed, have the burden of proving
that the terms thereof were fully explained to her.[8] This they failed to do.
Under the Civil Code, a contract where consent is given through mistake, violence,
intimidation, undue influence or fraud is voidable. [9] In order that mistake may invalidate consent,
it should refer to the substance of the thing which is the object of the contract, or to those
conditions which have principally moved one or both parties to enter into the contract.[10]

The appellate court found that Placida did not understand the full import of the deed
because the terms thereof were not explained to her either by the petitioners or by the notary
public before whom the deed was acknowledged. According to the appellate court, Judge
Pacifico Garcia (Judge Garcia), before whom the deed was acknowledged, did not identify
Placida as having appeared before him on January 5, 1983 to acknowledge the deed.
The jurat indicates that it was only Lauro Sumipat who appeared before Judge Garcia and to
whom he explained the contents of the deed. Further, the appellate court noted that Judge
Garcia himself was under the impression that the deed conveyed the exclusive properties of
Lauro Sumipat. Hence, he could not have explained to Placida that the deed actually
transferred the conjugal properties of Lauro Sumipat and Placida.[11]
The Court of Appeals, therefore, annulled the deed insofar as it covers Placidas conjugal
share in the subject properties because the latters consent thereto was vitiated by mistake
when she affixed her signature on the document.
The petitioners filed a Motion for Reconsideration on the grounds of estoppel, absence of
fraud and prescription. The appellate court denied the Motion for Reconsideration in
itsResolution[12] dated October 16, 2002 ruling that the grounds relied upon have been
addressed in its Decision dated April 11, 2002. Anent the ground of prescription, the appellate
court held that since the properties were acquired through fraud or mistake, the petitioners are
considered trustees of an implied trust for the benefit of Placida. Citing jurisprudence, [13] the
Court of Appeals ruled that actions based on implied or constructive trust prescribe 10 years
from the issuance of a Torrens Title over the property. Since two (2) of the subject properties
were issued Transfer Certificates of Title (TCT) Numbered T-40037 [14] and T-40038[15] under the
petitioners names on August 18, 1987, the Complaint for declaration of nullity of titles, partition,
recovery of ownership and possession, reconveyance, accounting and damages, which was
filed on March 3, 1993, was filed well within the prescriptive period.
The petitioners are now before this Court principally claiming that Placida freely consented
to the execution of the deed and that they did not commit fraudulent acts in connection with its
execution. They also reiterate their argument that the Court of Appeals should have dismissed
the case on the ground of prescription. It is their contention that the present action being one to
annul a contract on the ground of fraud, it should have been filed within four (4) years from the
discovery of fraud or registration of the instrument with the Registry of Deeds.
The respondents filed their Comment[16] dated February 7, 2003, essentially echoing the
findings of the Court of Appeals on the matter of Placidas consent. According to them, Placida
was deceived and misled into affixing her signature on the deed. They further claim that Placida
did not actually appear before the notary public to acknowledge the instrument.
In their Reply[17] dated April 29, 2003, the petitioners insist that Placida was not illiterate and
that Lauro Sumipat validly transferred the titles over the properties in question to them. They
also argue that if Placida did not understand the import of the deed, she could have questioned
Lauro Sumipat about it since the deed was executed a year before the latter died.
The trial court and the Court of Appeals are in agreement that the subject properties are
conjugal, having been acquired during the marriage of Lauro Sumipat and Placida. They came
out, however, with disparate denouements. While the trial court upheld the validity of the deed

as an instrument of transfer of all the litigated parcels of land in their entirety on the ground that
Placida failed to question its authenticity and due execution, the appellate court struck the deed
down insofar as the conjugal share of Placida is concerned based on its finding that her consent
was vitiated by mistake.
At bottom, the crux of the controversy is whether the questioned deed by its terms or under
the surrounding circumstances has validly transferred title to the disputed properties to the
petitioners.
A perusal of the deed reveals that it is actually a gratuitous disposition of property a
donation although Lauro Sumipat imposed upon the petitioners the condition that he and his
wife, Placida, shall be entitled to one-half (1/2) of all the fruits or produce of the parcels of land
for their subsistence and support. The preliminary clauses of the deed read:
That conscious of my advanced age and failing health, I feel that I am not capable anymore of
attending to and maintaining and keeping in continuous cultivation my above described
properties;
That my children are all desirous of taking over the task of maintaining my properties and have
demonstrated since childhood the needed industry and hard work as they have in fact
established possession over my real properties and introduced more improvements over my
lands, the fruit of which through their concerted efforts and labors, I myself and my family have
enjoyed;
That it would be to the best interest of my above mentioned children that the ownership over my
above described properties be transferred in their names, thereby encouraging them more in
developing the lands to its fullest productivity.[18]
The deed covers three (3) parcels of land. [19] Being a donation of immovable property, the
requirements for validity set forth in Article 749 of the Civil Code should have been followed,viz:
Art. 749. In order that the donation of the immovable may be valid, it must be made in a public
document, specifying therein the property donated and the value of the charges which the
donee must satisfy.
The acceptance may be made in the same deed of donation or in a separate public document,
but it shall not take effect unless it is done during the lifetime of the donor.
If the acceptance is made in a separate instrument, the donor shall be notified thereof in an
authentic form, and this step shall be noted in both instruments.
Title to immovable property does not pass from the donor to the donee by virtue of a deed
of donation until and unless it has been accepted in a public instrument and the donor duly
notified thereof. The acceptance may be made in the very same instrument of donation. If the
acceptance does not appear in the same document, it must be made in another. Where the
deed of donation fails to show the acceptance, or where the formal notice of the acceptance,
made in a separate instrument, is either not given to the donor or else not noted in the deed of
donation and in the separate acceptance, the donation is null and void.[20]

In this case, the donees acceptance of the donation is not manifested either in the deed
itself or in a separate document. Hence, the deed as an instrument of donation is patently void.
We also note the absence of any proof of filing of the necessary return, payment of donors
taxes on the transfer, or exemption from payment thereof. Under the National Internal Revenue
Code of 1977, the tax code in force at the time of the execution of the deed, an individual who
makes any transfer by gift shall make a return and file the same within 30 days after the date
the gift is made with the Revenue District Officer, Collection Agent or duly authorized Treasurer
of the municipality in which the donor was domiciled at the time of the transfer.[21]The filing of the
return and payment of donors taxes are mandatory. In fact, the registrar of deeds is mandated
not to register in the registry of property any document transferring real property by way of
gifts inter vivos unless a certification that the taxes fixed and actually due on the transfer had
been paid or that the transaction is tax exempt from the Commissioner of Internal Revenue, in
either case, is presented.[22]
Neither can we give effect to the deed as a sale, barter or any other onerous conveyance,
in the absence of valid cause or consideration and consent competently and validly given.
[23]
While it is true that the appellate court found Placidas consent to have been vitiated by
mistake, her testimony on the matter actually makes out a case of total absence of consent, not
merely vitiation thereof. She testified in this regard, thus:

Parenthetically, as Placidas Complaint is entitled Declaration of Nullity of Titles; Contracts;


Partition, Recovery of Ownership and Possession; Reconveyance; Accounting and Damages
with Prayer for Preliminary Injunction and Receivership, the validity of the deed was directly
assailed, but its absolute nullity was not specifically raised as an issue. Nevertheless, both the
RTC and the appellate court took the cue from Placidas theory that the deed is merely voidable
as regards her conjugal share of the properties. However, since the real issue is whether the
questioned deed has validly transferred ownership of the litigated properties, it is appropriate for
the Court to inquire into the form of the deed and the existence of valid consent thereto to
ascertain the validity or nullity of the deed.
From the substantive and procedural standpoints, the objectives to write finis to a
protracted litigation and avoid multiplicity of suits are worth pursuing at all times. Conformably,
we have ruled in a number of cases that an appellate court is accorded broad discretionary
power to consider even errors not assigned. We have applied this tenet, albeit as a matter of
exception, in the following instances: (1) grounds not assigned as errors but affecting jurisdiction
over the subject matter; (2) matters not assigned as errors on appeal but are evidently plain or
clerical errors within contemplation of law; (3) matters not assigned as errors on appeal but
consideration of which is necessary in arriving at a just decision and complete resolution of the
case or to serve the interests of justice or to avoid dispensing piecemeal justice; (4) matters not
specifically assigned as errors on appeal but raised in the trial court and are matters of record
having some bearing on the issue submitted which the parties failed to raise or which the lower
court ignored; (5) matters not assigned as errors on appeal but closely related to an error

assigned; and (6) matters not assigned as errors on appeal but upon which the determination of
a question properly assigned is dependent.[27]
In the instant case, the validity of the deed was directly assailed although both parties are of
the view that it is not an absolute nullity. The correct characterization of the deed is, therefore,
determinative of the present controversy. Elsewise framed, the issue of validity or nullity is
interwoven with the positions adopted by the parties and the rulings made by the courts below.
Hence, we shall be resolute in striking down the deed especially as it appears on its face to be a
patent nullity.
Having said this, we shall now proceed to the issue of prescription. Being an absolute
nullity, both as a donation and as a sale, the deed is subject to attack at any time, in accordance
with the rule in Article 1410 of the Civil Code that an action to declare the inexistence of a void
contract does not prescribe.
We are thus unimpressed by the petitioners contention that the appellate court should have
dismissed Placidas appeal on the ground of prescription. Passage of time cannot cure the fatal
flaw in an inexistent and void contract. [28] The defect of inexistence of a contract is permanent
and incurable; hence, it cannot be cured either by ratification or by prescription. [29]
Turning now to the effects of the absolute nullity of the deed, it is well-settled that when
there is a showing of illegality, the property registered is deemed to be simply held in trust for
the real owner by the person in whose name it is registered, and the former then has the right to
sue for the reconveyance of the property. The action for the purpose is also imprescriptible. As
long as the land wrongfully registered under the Torrens system is still in the name of the person
who caused such registration, an action in personam will lie to compel him to reconvey the
property to the real owner.[30]
One final note. After this Decision shall have become final and executory, the parties may
either extrajudicially divide the estates of Lauro Sumipat and Placida Tabotabo pursuant to Rule
74 of the Rules of Court or judicially settle the estates pursuant to Rules 78, et seq., in
accordance with this Decision and the law.
WHEREFORE, the instant Petition for Review on Certiorari is DENIED. The Decision of the
Regional Trial Court dated September 29, 1997 and the Decision of the Court of Appeals dated
April 11, 2002, as well as its Resolution dated October 16, 2002, are VACATED. In lieu thereof,
judgment is hereby rendered in favor of the respondents, to wit: (i) DECLARING theDeed of
Absolute Transfer and/or Quitclaim dated January 5, 1983 NULL AND VOID; and (ii)
ORDERING the CANCELLATION of Transfer Certificates of Title Numbered T-40037 and T40038 (Zamboanga del Norte) and the tax declaration covering the unregistered parcel of land,
all issued in the names of the petitioners Lydia, Laurito, Alicia, Alejandro and Lirafe, all
surnamed Sumipat, and the REINSTATEMENT of Original Certificate of Title No. P-17842
(Zamboanga del Norte) Transfer Certificate Title No. T-15826 (Zamboanga del Norte) and the
tax declaration covering the unregistered parcel of land, all in the name of Lauro Sumipat . . .
married to Placida Tabotabo.