G.R. No. 129760 December 29, 1998RICARDO CHENG,petitioner,vs.RAMON B. GENATO and ERNESTO R. DA JOSE & SOCORRO DA JOSE,respondents.MARTINEZ,J.:This petition for review oncertiorariseeks to annul and set aside the Decision of the Court of Appeals (CA)1dated July 7, 1997 in CA-G.R. No. CV No. 44706 entitled "Ricardo Cheng, plaintiff-appellee vs. Ramon B. Genato, defendant-appellant, Ernesto R. Da Jose & Socorro B. Da Jose, Intervenors-Appellants" which reversed the ruling of the Regional Trial Court, Branch 96 of Quezon City dated January 18, 1994. The dispositive portion of the CA Decision reads:WHEREFORE, based on the foregoing, appealed decision is hereby REVERSED and SET ASIDE and judgment is rendered ordering;1. The dismissal of the complaint;2. The cancellation of the annotations of the defendant-appellant's Affidavit to Annul Contract to Sell and plaintiff-appellee's Notice of Adverse Claim in the subject TCT's, namely, TCT No. T-76.196 (M) and TCT No. T-76.197 (M);3. Payment by the intervenors-appellants of the remaining balance of the purchase price pursuant to their agreement with the defendant-appellant to suspend encashment of the three post-dated checks issued since 1989.4. Ordering the execution by the defendant-appellant Genato of the Deed of Absolute Sale over the subject two lots covered by TCT No. T-76.196 (M) and TCT No. T-76.197 (M) in favor of intervenors-appellants Spouses Da Jose;5. The return by defendant-appellant Genato of the P50,000.00 paid to him by the plaintiff-appellee Cheng, and6. Payment by plaintiff-appellee Cheng of moral damages to herein intervenors-appellants Da Jose of P100,000.00, exemplary damages of P50,000.00, attorney's fees of P50,000.00, and costs of suit; and to defendant-appellant, of P100,000.00 in exemplary damages, P50,000.00 in attorney's fees. The amounts payable to the defendant-appellant may be compensated by plaintiff appellee with the amount ordered under the immediately foregoing paragraph which defendant-appellant has to pay the plaintiff-appellee.SO ORDERED.2The antecedents of the case are as follows:Respondent Ramon B. Genato (Genato) is the owner of two parcels of land located at Paradise Farms, San Jose del Monte, Bulacan covered by TCT No. T-76.196 (M)3and TCT No. T-76.197 (M)4with an aggregate area of 35,821square meters, more or less.On September 6, 1989, respondent Genato entered into an agreement with respondent-spouses Ernesto R. Da Jose and Socorro B. Da Jose (Da Jose spouses) over the above-mentioned two parcels of land. The agreement culminated in the execution of a contract to sell for which the purchase price was P80.00 per square meter. The contract was in a public instrument and was duly annotated at the back of the two certificates of title on the same day. Clauses 1and 3 thereof provide:1. That the purchase price shall be EIGHTY (P80.00) PESOS, Philippine Currency per square meter, of which the amount of FIFTY THOUSAND (P50,000.00) PESOS shall be paid by the VENDEE to the VENDOR as partial down payment at the time of execution of this Contract to Sell.xxx xxx xxx3. That the VENDEE, Thirty (30) DAYS after the execution of this contract, and only after having satisfactorily verified and confirmed the truth and authenticity of documents, and that no restrictions, limitations, and developments imposed on and/or affecting the property subject of this contract shall be detrimental to his interest, the VENDEE shall pay to the VENDOR, NINE HUNDRED FIFTY THOUSAND (P950,00.00) PESOS. Philippine Currency, representing the full payment of the agreed Down Payment, after which complete possession of the property shall be given to the VENDEE to enable him to prepare the premises and any development therein.On October 4, 1989, the Da Jose spouses, not having finished verifying the titles mentioned in clause 3 as aforequoted, asked for and was granted by respondent Genato an extension of another 30 days or until November 5, 1989. However, according to Genato, the extension was granted on condition that a new set of documents is made seven (7) days from October 4, 1989.6This was denied by the Da Jose spouses.Pending the effectivity of the aforesaid extension period, and without due notice to the Da Jose spouses, Genato executed an Affidavit to Annul the Contract to Sell,7on October 13, 1989. Moreover, no annotation of the said affidavit at the back of his titles was made right away. The affidavit contained,inter alia, the following paragraphs;xxx xxx xxxThat it was agreed between the parties that the agreed downpayment of P950,000.00 shall be paid thirty (30) days after the execution of the Contract, that is on or before October 6, 1989;The supposed VENDEES failed to pay the said full downpayment even up to this writing, a breach of contract;That this affidavit is being executed to Annul the aforesaid Contract to Sell for the vendee having committed a breach of contract for not having complied with the obligation as provided in the Contract to Sell;8On October 24, 1989, herein petitioner Ricardo Cheng (Cheng) went to Genato's residence and expressed interest in buying the subject properties. On that occasion, Genato showed to Ricardo Cheng copies of his transfer certificates of title and the annotations at the back thereof of his contract to sell with the Da Jose spouses. Genato also showed him the aforementioned Affidavit to Annul the Contract to Sell which has not been annotated at the back of the titles.Despite these, Cheng went ahead and issued a check for P50,000.00 upon the assurance by Genato that the previous contract with the Da Jose spouses will be annulled for which Genato issued a handwritten receipt (Exh. "D"), written in this wise:10/24/89Received from Ricardo Chengthe Sum of Fifty Thousand Only (P50.000-)as partial for T-76196 (M)T-76197 (M) area 35.821 Sq.m.Paradise Farm, Gaya-Gaya, San Jose Del MonteP70/m2 Bulacanplus C. G. T. etc.Check # 470393 (SGD.) Ramon B. Genato10/24/899On October 25, 1989, Genato deposited Cheng's check. On the same day, Cheng called up Genato reminding him to register the affidavit to annul the contract to sell.10The following day, or on October 26, 1989, acting on Cheng's request, Genato caused the registration of the Affidavit to Annul the Contract to Sell in the Registry of Deeds, Meycauayan, Bulacan as primary entry No. 262702.11While the Da Jose spouses were at the Office of the Registry of Deeds of Meycauayan, Bulacan on October 27, 1989, they met Genato by coincidence. It was only then that the Da Jose spouses discovered about the affidavit to annul their contract. The latter were shocked at the disclosure and protested against the rescission of their contract. After being reminded that he (Genato) had given them (Da Jose spouses) an additional 30-day period to finish their verification of his titles, that the period was still in effect, and that they were willing and able to pay the balance of the agreed down payment, later on in the day, Genato decided to continue the Contract he had with them. The agreement to continue with their contract was formalized in a conforme letter dated October 27, 1989.Thereafter, Ramon Genato advised Ricardo Cheng of his decision to continue his contract with the Da Jose spouses and the return of Cheng's P50,000.00 check. Consequently, on October 30, 1989, Cheng's lawyer sent a letter12to Genato demanding compliance with their agreement to sell the property to him stating that the contract to sell between him and Genato was already perfected and threatening legal action.On November 2, 1989, Genato sent a letter13to Cheng (Exh. "6") enclosing a BPI Cashier's Check for P50,000.00 and expressed regret for his inability to "consummate his transaction" with him. After having received the letter of Genato on November 4, 1989, Cheng, however, returned the said check to the former via RCPI telegram14dated November 6, 1989, reiterating that "our contract to sell your property had already been perfected."Meanwhile, also on November 2, 1989, Cheng executed an affidavit of adverse claim15and had it annotated on the subject TCT's.On the same day, consistent with the decision of Genato and the Da Jose spouses to continue with their Contract to Sell of September 6, 1989, the Da Jose spouses paid Genato the complete down payment of P950,000.00 and delivered to him three (3) postdated checks (all dated May 6, 1990, the stipulated due date) in the total amount of P1,865,680.00 to cover full payment of the balance of the agreed purchase price. However, due to the filing of the pendency of this case, the three (3) postdated checks have not been encashed.On December 8, 1989, Cheng instituted a complaint16for specific performance to compel Genato to execute a deed of sale to him of the subject properties plus damages and prayer for preliminary attachment. In his complaint, Cheng averred that the P50,000.00 check he gave was a partial payment to the total agreed purchase price of the subject properties and considered as an earnest money for which Genato acceded. Thus, their contract was already perfected.In Answer17thereto, Genato alleged that the agreement was only a simple receipt of an option-bid deposit, and never stated that it was a partial payment, nor is it an earnest money and that it was subject to condition that the prior contract with the Da Jose spouses be first cancelled.The Da Jose spouses, in their Answer in Intervention,18asserted that they have a superior right to the property as first buyers. They alleged that the unilateral cancellation of the Contract to Sell was without effect and void. They also cited Cheng's bad faith as a buyer being duly informed by Genato of the existing annotated Contract to Sell on the titles.After trial on the merits, the lower court ruled that the receipt issued by Genato to Cheng unerringly meant a sale and not just a priority or an option to buy. It cannot be true that the transaction was subjected to some condition or reservation, like the priority in favor of the Da Jose spouses as first buyer because, if it were otherwise, the receipt would have provided such material condition or reservation, especially as it was Genato himself who had made the receipt in his own hand. It also opined that there was a valid rescission of the Contract to Sell by virtue of the Affidavit to Annul the Contract to Sell. Time was of the essence in the execution of the agreement between Genato and Cheng, under this circumstance demand, extrajudicial or judicial, is not necessary. It falls under the exception to the rule provided in Article 116919of the Civil Code. The right of Genato to unilaterally rescind the contract is said to be under Article 119120of the Civil Code. Additionally, after reference was made to the substance of the agreement between Genato and the Da Jose spouses, the lower court also concluded that Cheng should be preferred over the intervenors-Da Jose spouses in the purchase of the subject properties. Thus, on January 18, 1994 the trial court rendered its decision the decretal portion of which reads:WHEREFORE, judgment is hereby rendered:1. Declaring the contract to sell dated September 6, 1989 executed between defendant Ramon Genato, as vendor, and intervenors Spouses Ernesto and Socorro Da Jose, as vendees, resolved and rescinded in accordance with Art. 1191, Civil Code, by virtue of defendant's affidavit to annul contract to sell dated October 13, 1989 and as the consequence of intervenors' failure to execute within seven (7) days from October 4, 1989 another contract to sell pursuant to their mutual agreement with defendant;2. Ordering defendant to return to the intervenors the sum of P1,000,000.00, plus interest at the legal rate from November 2, 1989 until full payment;3. Directing defendant to return to the intervenors the three (3) postdated checks immediately upon finality of this judgment;4. Commanding defendant to execute with and in favor of the plaintiff Ricardo Cheng, as vendee, a deed of conveyance and sale of the real properties described and covered in Transfer Certificates of Title No. T-76-196 (M) and T-76.197 (M) of the Registry of Deeds of Bulacan, Meycauayan Branch, at the rate of P70.000/square meter, less the amount of P50,000.00 alreaddy paid to defendant, which is considered as part of the purchase price, with the plaintiff being liable for payment of the capital gains taxes and other expenses of the transfer pursuant to the agreement to sell dated October 24, 1989; and5 Ordering defendant to pay the plaintiff and the intervenors as follows:a/ P50,000.00, as nominal damages, to plaintiff;b/ P50,000.00, as nominal damages, to intervenors;c/ P20,000.00, as and for attorney's fees, to plaintiff;d/ P20,000.00, as and for attorney's fees, to intervenors; ande/ Cost of the suit.xxx xxx xxxNot satisfied with the aforesaid decision, herein respondents Ramon Genato and Da Jose spouses appealed to the courta quowhich reversed such judgment and ruled that the prior contract to sell in favor of the Da Jose spouses was not validly rescinded; that the subsequent contract to sell between Genato and Cheng, embodied in the handwritten receipt, was without force and effect due to the failure to rescind the prior contract; and that Cheng should pay damages to the respondents herein being found to be in bad faith.Hence this petition.21This petition for review, assails the Court of Appeals' Decision on the following grounds: (1) that the Da Jose spouses' Contract to Sell has been validly rescinded or resolved; (2) that Ricardo Cheng's own contract with Genato was not just a contract to sell but one of conditional contract of sale which gave him better rights, thus precluding the application of the rule on double sales under Article 1544, Civil Code; and (3) that, in any case, it was error to hold him liable for damages.The petition must be denied for failure to show that the Court of Appeals committed a reversible error which would warrant a contrary ruling.No reversible error can be ascribed to the ruling of the Court of Appeals that there was no valid and effective rescission or resolution of the Da Jose spouses Contract to Sell, contrary to petitioner's contentions and the trial court's erroneous ruling.In a Contract to Sell, the payment of the purchase price is a positive suspensive condition, the failure of which is not a breach, casual or serious, but a situation that prevents the obligation of the vendor to convey title from acquiring an obligatory force.22It is one where the happening of the event gives rise to an obligation. Thus, for its non-fulfillment there will be no contract to speak of, the obligor having failed to perform the suspensive condition which enforces a juridical relation. In fact with this circumstance, there can be no rescission of an obligation that is still non-existent, the suspensive condition not having occurred as yet.23Emphasis should be made that the breach contemplated in Article 1191 of the New Civil Code is the obligor's failure to comply with an obligation already extant, not a failure of a condition to render binding that obligation.24Obviously, the foregoing jurisprudence cannot be made to apply to the situation in the instant case because no default can be ascribed to the Da Jose spouses since the 30-day extension period has not yet expired. The Da Jose spouses' contention that no further condition was agreed when they were granted the 30-days extension period from October 7, 1989 in connection with clause 3 of their contract to sell dated September 6, 1989 should be upheld for the following reason, to wit;firstly, If this were not true, Genato could not have been persuaded to continue his contract with them and later on agree to accept the full settlement of the purchase price knowing fully well that he himself imposed suchsine qua noncondition in order for the extension to be valid;secondly, Genato could have immediately annotated his affidavit to annul the contract to sell on his title when it was executed on October 13, 1989 and not only on October 26, 1989 after Cheng reminded him of the annotation;thirdly, Genato could have sent at least a notice of such fact, there being no stipulation authorizing him for automatic rescission, so as to finally clear the encumbrance on his titles and make it available to other would be buyers. It likewise settles the holding of the trial court that Genato "needed money urgently."Even assumingin gratia argumentithat the Da Jose spouses defaulted, as claimed by Genato, in their Contract to Sell, the execution by Genato of the affidavit to annul the contract is not even called for. For with or without the aforesaid affidavit their non-payment to complete the full downpayment of the purchase priceipso factoavoids their contract to sell, it being subjected to a suspensive condition. When a contract is subject to a suspensive condition, its birth or effectivity can take place only if and when the event which constitutes the condition happens or is fulfilled.25If the suspensive condition does not take place, the parties would stand as if the conditional obligation had neverexisted.26Nevertheless, this being so Genato is not relieved from the giving of a notice, verbal or written, to the Da Jose spouses for his decision to rescind their contract. In many cases,27even though we upheld the validity of a stipulation in a contract to sell authorizing automatic rescission for a violation of its terms and conditions, at least a written notice must be sent to the defaulter informing him of the same. The act of a party in treating a contract as cancelled should be made known to the other.28For such act is always provisional. It is always subject to scrutiny and review by the courts in case the alleged defaulter brings the matter to the proper courts. InUniversity of the Philippines vs. De Los Angeles,29this Court stressed and we quote:In other words, the party who deems the contract violated may consider it resolved or rescinded, and act accordingly, without previous court action, but it proceeds at its own risk. For it is only the final judgment of the corresponding court that will conclusively and finally settle whether the action taken was or was not correct in law. But the law definitely does not require that the contracting party who believes itself injured must first file suit and wait for a judgment before taking extrajudicial steps to protect its interest. Otherwise, the party injured by the other's breach will have to passively sit and watch its damages accumulate during the pendency of the suit until the final judgment of rescission is rendered when the law itself requires that he should exercise due diligence to minimize its own damages (Civil Code, Article 2203).This rule validates, both in equity and justice, contracts such as the one at bat, in order to avoid and prevent the defaulting party from assuming the offer as still in effect due to the obligee's tolerance for such non-fulfillment. Resultantly, litigations of this sort shall be prevented and the relations among would-be parties may be preserved. Thus, Ricardo Cheng's contention that the Contract to Sell between Genato and the Da Jose spouses was rescinded or resolved due to Genato's unilateral rescission finds no support in this case.Anent the issue on the nature of the agreement between Cheng and Genato, the records of this case are replete with admissions30that Cheng believed it to be one of a Contract to Sell and not one of Conditional Contract of Sale which he, in a transparent turn-around, now pleads in this Petition. This ambivalent stance of Cheng is even noted by the appellate court, thus:At the outset, this Court notes that plaintiff-appellee was inconsistent in characterizing the contract he allegedly entered into. In his complaint.31Cheng alleged that the P50,000.00 down payment was earnest money. And next, his testimony32was offered to prove that the transaction between him and Genato on October 24, 1989 was actually a perfected contract to sell.33Settled is the rule that an issue which was not raised during the trial in the court below cannot be raised for the first time on appeal.34Issues of fact and arguments not adequately brought to the attention of the trial court need not be and ordinarily will not be considered by a reviewing court as they cannot be raised for the first time on appeal.35In fact, both courts below correctly held that the receipt which was the result of their agreement, is a contract to sell. This was, in fact Cheng's contention in his pleadings before said courts. This patent twist only operates against Cheng's posture which is indicative of the weakness of his claim.But even if we are to assume that the receipt, Exh. "D," is to be treated as a conditional contract of sale, it did not acquire any obligatory force since it was subject to suspensive condition that the earlier contract to sell between Genato and the Da Jose spouses should first be cancelled or rescinded a condition never met, as Genato, to his credit, upon realizing his error, redeemed himself by respecting and maintaining his earlier contract with the Da Jose spouses. In fact, a careful reading of the receipt, Exh. "D," alone would not even show that a conditional contract of sale has been entered by Genato and Cheng. When the requisites of a valid contract of sale are lacking in said receipt, therefore the "sale" is neither valid or enfoceable.36To support his now new theory that the transaction was a conditional contract of sale, petitioner invokes the case ofCoronel vs. Court of Appeals37as the law that should govern their Petition. We do not agree. Apparently, the factual milieu in Coronel is not on all fours with those in the case at bar.In Coronel, this Court found that the petitioners therein clearly intended to transfer title to the buyer which petitioner themselves admitted in their pleading. The agreement of the parties therein was definitively outlined in the "Receipt of Down Payment" both as to property, the purchase price, the delivery of the seller of the property and the manner of the transfer of title subject to the specific condition that upon the transfer in their names of the subject property the Coronels will execute the deed of absolute sale.Whereas, in the instant case, even by a careful perusal of the receipt, Exh. "D," alone such kind of circumstances cannot be ascertained without however resorting to the exceptions of the Rule on Parol Evidence.To our mind, the trial court and the appellate court correctly held that the agreement between Genato and Cheng is a contract to sell, which was, in fact, petitioner connection in his pleadings before the said courts. Consequently, both to mind, which read:Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.Should there be no inscription, the ownership shall pertain to the person who in good faith was first in possession; and in the absence thereof, to the person who presents he oldest title, provided there is good faith.However, a meticulous reading of the aforequoted provision shows that said law is not apropos to the instant case. This provision connotes that the following circumstances must concur:(a) The two (or more) sales transactions in issue must pertain to exactly the same subject matter, and must be valid sales transactions.(b) The two (or more) buyers at odds over the rightful ownership of the subject matter must each represent conflicting interests; and(c) The two (or more) buyers at odds over the rightful ownership of the subject matter must each have bought from the very same seller.These situations obviously are lacking in a contract to sell for neither a transfer of ownership nor a sales transaction has been consummated. The contract to be binding upon the obligee or the vendor depends upon the fulfillment or non-fulfillment of an event.Notwithstanding this contrary finding with the appellate court, we are of the view that the governing principle of Article 1544, Civil Code, should apply in this situation. Jurisprudence38teaches us that the governing principle is PRIMUS TEMPORE, PORTIOR JURE (first in time, stronger in right). For not only was the contract between herein respondents first in time; it was also registered long before petitioner's intrusion as a second buyer. This principle only applies when the special rules provided in the aforcited article of the Civil Code do not apply or fit the specific circumstances mandated under said law or by jurisprudence interpreting the article.The rule exacted by Article 1544 of the Civil Code for the second buyer to be able to displace the first buyer are:(1) that the second buyer must show that he acted in good faith (i.e. in ignorance of the first sale and of the first buyer's rights) from the time of acquisition until title is transferred to him by registration or failing registration, by delivery of possession;39(2) the second buyer must show continuing good faith and innocence or lack of knowledge of the first sale until his contract ripens into full ownership through prior registration as provided by law.40Thus, in the case at bar, the knowledge gained by the Da Jose spouses, as first buyers, of the new agreement between Cheng and Genato will not defeat their rights as first buyers except where Cheng, as second buyer, registers or annotates his transaction or agreement on the title of the subject properties in good faith ahead of the Da Jose spouses. Moreover, although the Da Jose spouses, as first buyers, knew of the second transaction it will not bar them from availing of their rights granted by law, among them, to register first their agreement as against the second buyer.In contrast, knowledge gained by Cheng of the first transaction between the Da Jose spouses and Genato defeats his rights even if he is first to register the second transaction, since such knowledge taints his prior registration with bad faith."Registration", as defined by Soler and Castillo, means any entry made in the books of the registry, including both registration in its ordinary and strict sense, and cancellation, annotation, and even marginal notes.41In its strict acceptation, it is the entry made in the registry which records solemnly and permanently the right of ownership and other real rights.42We have ruled43before that when a Deed of Sale is inscribed in the registry of property on the original document itself, what was done with respect to said entries or annotations and marginal notes amounted to a registration of the sale. In this light, we see no reason why we should not give priority in right the annotation made by the Da Jose spouses with respect to their Contract to Sell dated September 6, 1989.Moreover, registration alone in such cases without good faith is not sufficient. Good faith must concur with registration for such prior right to be enforceable. In the instant case, the annotation made by the Da Jose spouses on the titles of Genato of their "Contract To Sell" more than satisfies this requirement. Whereas in the case of Genato's agreement with Cheng such is unavailing. For even before the receipt, Exh. "D," was issued to Cheng information of such pre-existing agreement has been brought to his knowledge which did not deter him from pursuing his agreement with Genato. We give credence to the factual finding of the appellate court that "Cheng himself admitted that it was he who sought Genato in order to inquire about the property and offered to buy the same.44And since Cheng was fully aware, or could have been if he had chosen to inquire, of the rights of the Da Jose spouses under the Contract to Sell duly annotated on the transfer certificates of titles of Genato, it now becomes unnecessary to further elaborate in detail the fact that he is indeed in bad faith in entering into such agreement. As we have held inLeung Yee vs. F.L. Strong Machinery Co.:45One who purchases real estate with knowledge of a defect . . . of title in his vendor cannot claim that he has acquired title thereto in good faith as against . . . . an interest therein; and the same rule must be applied to one who has knowledge of facts which should have put him upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendor. A purchaser cannot close his eyes to facts which should put a reasonable man upon his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor. 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 vendor's 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. Good faith, or lack of it, is in its last analysis a question of intention; but in ascertaining the intention by which one is actuated on a given occasion, we are necessarily controlled by the evidence as to the conduct and outward acts by which alone the inward motive may with safety, be determined. So it is that "the honesty of intention," "the honest lawful intent," which constitutes good faith implies a "freedom from knowledge and circumstances which ought to put a person on inquiry," and so it is that proof of such knowledge overcomes the presumption of good faith in which the courts always indulge in the absence of the proof to the contrary. "Good faith, or the want of it, is not a visible, tangible fact that can be seen or touched, but rather a state or condition of mind which can only be judge of by actual or fancied tokens or signs." (Wilder vs. Gilman, 55 Vt. 504, 505; Cf. Cardenas vs. Miller, 108 Cal., 250; Breaux-Renoudet, Cypress Lumber Co. vs. Shadel, 52 La. Ann., 2094-2098; Pinkerton Bros. Co. vs. Bromely, 119 Mich., 8, 10, 17.) (Emphasis ours)Damages were awarded by the appellate court on the basis of its finding that petitioner "was in bad faith when he filed the suit for specific performance knowing fully well that his agreement with Genato did not push through.46Such bad faith, coupled with his wrongful interference with the contractual relations between Genato and the Da Jose spouses, which culminated in his filing of the present suit and thereby creating what the counsel for the respondents describes as "a prolonged and economically unhealthy gridlock47on both the land itself and the respondents' rights provides ample basis for the damages awarded. Based on these overwhelming evidence of bad faith on the part of herein petitioner Ricardo Cheng, we find that the award of damages made by the appellate court is in order.WHEREFORE, premises considered, the instant petition for review is DENIED and the assailed decision is hereby AFFIRMEDEN TOTO.SO ORDERED.Belosillo, Puno and Mendoza, JJ., concur.

G.R. No. 133168 March 28, 2006REPUBLIC OF THE PHILIPPINES,Petitioner,1vs.BENJAMIN GUERRERO,Respondent.D E C I S I O NGARCIA,J.:Assailed and sought to be set aside in this petition for review under Rule 45 of the Rules of Court is the decision2dated February 12, 1998 of the Court of Appeals (CA) in CA-G.R. CV No. 50298 affirming an earlier decision of the Regional Trial Court (RTC) of Quezon City in Civil Case No. 89-3899, entitled "Petition for Amendment of Plan and Technical Description of Original Certificate of Title No. 0-28 in the name of Benjamin Guerrero, Registry of Deeds of Quezon City."The assailed decision of the CA recites the facts as follows:Sometime in December 1964, respondent Benjamin Guerrero filed with the Bureau of Lands (now Lands Management Bureau) a Miscellaneous Sales Application No. V-83191 covering a parcel of land situated at Pugad Lawin, Quezon City, consisting of 256 square meters. Upon favorable report and recommendation of the District Land Officer, Guerreros application was approved per Order of Award (Exhibit "B"), with the boundaries of the land awarded specified as follows: N-Lot No. 10-C, Psd-37801; S-Culiat Creek; E-Road; and W-Public Land. A sketch of the land awarded is contained at the back of the Order of Award.Subsequently, Miscellaneous Sales Patent No. 8991 dated August 16, 1982 was issued in favor of respondent. Pursuant thereto the corresponding Original Certificate of Title No. 0-28 was issued on August 27, 1982.On July 29, 1983, one Angelina Bustamante filed a protest with the Bureau of Lands claiming that respondent obtained the sales patent through fraud, false statement of facts and/or omission of material facts considering that 174 square meters awarded to respondent covered the land where her house is situated and where she has been residing since 1961.A formal investigation was conducted by the Bureau of Lands, after which the Director of Lands issued an order dismissing the protest of Angelina Z. Bustamante. The dismissal of the protest was affirmed by the then Minister of Natural Resources and by the Office of the President in a Decision dated July 22, 1985.Bustamante filed a motion for reconsideration of the Decision dated July 22, 1985. Acting on the motion for reconsideration, the President, , ordered that the case be remanded to the DENR [Department of Environment and Natural Resources] for the latters office to conduct an ocular investigation and resurvey of the disputed area. The said directive is contained in the Order dated October 30, 1987(Exhibit "J").Pursuant to the order of the Office of the President, an ocular investigation and relocation survey was conducted by the DENR. A report (Exhibit "K") was thereafter submitted with a finding that 83 square meters of the titled property of Guerrero consisting of 174 square meters is under ACTUAL PHYSICAL POSSESSION of Marcelo Bustamante (husband of Angelina Bustamante) with only 91 square meters under the physical possession of Guerrero. It was also found out that OCT No. 0-28 is supposed to be traversed by a road 3 meters wide, as even the Order of Award in favor of Guerrero, shows by the boundaries of the land indicated therein, viz: bounded on the N-Lot No. 10-C, Psd-37801, S-Culiat Creek, E-Road and W-Public Land.On January 10, 1989, the Office of the President, upon receipt of the [DENR] Ocular Investigation and Relocation Survey Report (Exhibit "K") , issued an order directing the DENR to implement the Report for the proper correction of the technical description of the land covered by OCT No. 0-28 issued to respondent.Pursuant to the directive of the Office of the President, the Director of Lands [on behalf of the Republic of the Philippines] instituted the instant action [Petition for Amendment of Plan and Technical Description of OCT No. 0-28 in the name of Benjamin Guerrero] on November 7, 1989.On April 6, 1990, the [respondent] Benjamin Guerrero filed a motion to dismiss the petition , alleging among other things, that the RTC of Quezon City was without jurisdiction over the Director of Lands petition and that the said petition was defective in form and substance, inasmuch as it failed to name [Guerrero] who holds a certificate of title (OCT No. 0-28) over the properties subject of the petition, as respondent in the action, and that the title sought to be amended was irrevocable and can no longer be questioned.In its order dated July 8, 1992, the lower court denied the said motion to dismiss for lack of merit. Trial of the petition followed with the Director of Lands, on one hand, and [Guerrero], on the other, presenting their respective evidence and witnesses.3[Words in bracket added.]On July 13, 1995, the RTC, on the postulate that petitioner Republic failed to prove its allegation that respondent obtained the sales patent and the certificate of title through fraud and misrepresentation, rendered judgment finding for the latter. The trial court likewise ruled that the original certificate of title (OCT No. 0-28) in the name of respondent acquired the characteristics of indefeasibility after the expiration of one (1) year from the entry of the decree of registration.Consequently, petitioner interposed an appeal to the CA, which, in a decision dated February 12, 1998, affirmed that of the trial court, rationalizing as follows:It is a settled rule that a certificate of title issued pursuant to any grant or patent involving public lands is as conclusive and indefeasible as any other certificate of title issued upon private lands in ordinary or cadastral registration proceedings. The effect of registration of a homestead or any other similar patent and the issuance of a certificate of title to the patentee is to vest in him an incontestable title to the land, in the same manner as if ownership had been determined by final decree of the court, and the title so issued is absolutely conclusive and indisputable.In the same way, therefore, that a decree of registration may be reviewed or reopened within one year after the entry thereof, upon a charge of actual fraud, a patent awarded in accordance with the Public Land Law may be reviewed within one year from the date of the order for the issuance of the patent also on the ground of actual fraud.x x xx x xx x xxxx there is no showing that at the time the [respondent] applied for his miscellaneous sales patent, there were third persons who had been in occupation of the land applied for. While subsequent survey documents, prepared as a consequence of the protest filed by the Bustamentes, report the possession of the Bustamantes of a portion of the land, and the erection of their house thereon, these reports do not indicate if such structures were existing at the time the application of the [respondent] was filed in 1964.There is no support, therefore, to the submission that the [respondent] was guilty of actual fraud in the acquisition of his miscellaneous sales patent, and subsequently, OCT No. 0-28.4(Words in bracket added)Petitioner then moved for a reconsideration of the above decision but the same was denied by the appellate court in its resolution of March 23, 1998.5Hence, this recourse, petitioner Republic contending that the appellate court erred in holding -I. That a certificate of title issued pursuant to any grant or patent involving public lands is conclusive and indefeasible despite the fact that respondents title was procured through fraud and misrepresentation.II. That there is no basis for the submission that respondent was guilty of actual fraud in the acquisition of his miscellaneous sales patent despite the final ruling of the Office of the President from which ruling respondent did not appeal.III. That the Director of Lands cannot raise the issue of possession of a third person of the land, or a portion thereof, after the award and issuance of the patent to the applicant despite the obvious fact that the protest was filed within one year from the issuance of patent.6Petitioner argues in esse that respondent procured his sales patent and certificate of title through fraud and misrepresentation. To support its basic posture, petitioner points to the verification survey conducted by Engr. Ernesto Erive of the DENR, which, to petitioner, argues for the proposition that respondents entitlement to a public land award should have been limited to a 91-square meter area instead of the 174 square meters eventually granted.On the other hand, respondent contends that his OCT No. 0-28 which he secured pursuant to a sales patent is conclusive and indefeasible under the Torrens system of registration. As such, his title can no longer be altered, impugned or cancelled.At the outset, it must be pointed out that the essential issue raised in this Petition the presence of fraud is factual. As a general rule, this Court does not review factual matters, as only questions of law may be raised in a petition for review on certiorari filed with this Court. And as the Court has consistently held, factual findings of trial courts, when adopted and confirmed by the CA, are final and conclusive on this Court,7save when the judgment of the appellate court is based on a misapprehension of facts or factual inferences manifestly incorrect or when that court overlooked certain relevant facts which, if properly considered, would justify a different conclusion.8Obviously, petitioner is invoking these exceptions toward having the Court review the factual determinations of the CA.The basic issue in this case turns on whether or not petitioner has proven by clear and convincing evidence that respondent procured Miscellaneous Sales Patent (MSP) No. 8991 and OCT No. 0-28 through fraud and misrepresentation.It bears to stress that the property in question, while once part of the lands of the public domain and disposed of via a miscellaneous sales arrangement, is now covered by a Torrens certificate. Grants of public land were brought under the operation of the Torrens system by Act No. 496, or the Land Registration Act of 1903. Under the Torrens system of registration, the government is required to issue an official certificate of title to attest to the fact that the person named is the owner of the property described therein, subject to such liens and encumbrances as thereon noted or what the law warrants or reserves.9As it were, the Torrens system aims to obviate possible conflicts of title by giving the public the right to rely upon the face of the Torrens certificate and to dispense, as a rule, with the necessity of inquiring further; on the part of the registered owner, the system gives him complete peace of mind that he would be secured in his ownership as long as he has not voluntarily disposed of any right over the covered land.10Section 122 of Act No. 496 provides:SEC. 122. Whenever public lands belonging to the Government of the [Republic of the Philippines] are alienated, granted, or conveyed to persons or to public or private corporations, the same shall be brought forthwith under the operation of this Act and shall become registered lands. It shall be the duty of the official issuing the instrument of alienation, grant, or conveyance in behalf of the Government to cause such instrument before its delivery to the grantee, to be filed with the register of deeds for the province where the land lies and to be there registered like other deeds and conveyances, whereupon a certificate shall be entered as in other cases of registered land, and an owners duplicate certificate issued to the grantee. The deed, grant, or instrument of conveyance from the Government shall not take effect as a conveyance or bind the land, but shall operate only as a contract between the Government and the grantee and as evidence of authority to the clerk or register of deeds to make registration. The act of registration shall be the operative act to convey and affect the land, and in all cases under this Act registration shall be made in the office of the register of deeds for the province where the land lies. xxx. (Words in bracket added)Upon its registration, the land falls under the operation of Act No. 496 and becomes registered land. Time and again, we have said that a Torrens certificate is evidence of an indefeasible title to property in favor of the person whose name appears thereon.11However, Section 38 of Act No. 496 recognizes the right of a person deprived of land to institute an action to reopen or revise a decree of registration obtained by actual fraud. Section 38 of Act No. 496 says so:SEC. 38. xxx. Every decree of registration shall bind the land, and quiet title thereto, subject only to the exceptions stated in the following section. It shall be conclusive upon and against all persons, including the [Republic of the Philippines] and all the branches thereof, . Such decree shall not be opened by reason of the absence, minority, or other disability of any person affected thereby, nor by any proceeding in any court for reversing judgments or decrees, subject, however, to the right of any person deprived of the land or of any estate or interest therein by decree of registration obtained by actual fraud, to file in the proper Court of First Instance [now Regional Trial Court] a petition for review of the decree of registration within one year after entry of the decree provided no innocent purchaser for value has acquired an interest. Upon the expiration of said term of one year, every decree or certificate of title issued in accordance with this section shall be incontrovertible. xxx. (Emphasis and words in bracket supplied)Fraud is of two kinds: actual or constructive. Actual or positive fraud proceeds from an intentional deception practiced by means of the misrepresentation or concealment of a material fact. Constructive fraud is construed as a fraud because of its detrimental effect upon public interests and public or private confidence, even though the act is not done with an actual design to commit positive fraud or injury upon other persons.12Fraud may also be either extrinsic or intrinsic. Fraud is regarded as intrinsic where the fraudulent acts pertain to an issue involved in the original action, or where the acts constituting the fraud were or could have been litigated therein. The fraud is extrinsic if it is employed to deprive parties of their day in court and thus prevent them from asserting their right to the property registered in the name of the applicant.13The distinctions assume significance because only actual and extrinsic fraud had been accepted and is contemplated by the law as a ground to review or reopen a decree of registration. Thus, relief is granted to a party deprived of his interest in land where the fraud consists in a deliberate misrepresentation that the lots are not contested when in fact they are; or in willfully misrepresenting that there are no other claims; or in deliberately failing to notify the party entitled to notice; or in inducing him not to oppose an application; or in misrepresenting about the identity of the lot to the true owner by the applicant causing the former to withdraw his application. In all these examples, the overriding consideration is that the fraudulent scheme of the prevailing litigant prevented a party from having his day in court or from presenting his case. The fraud, therefore, is one that affects and goes into the jurisdiction of the court.14We have repeatedly held that relief on the ground of fraud will not be granted where the alleged fraud goes into the merits of the case, is intrinsic and not collateral, and has been controverted and decided. Thus, we have underscored the denial of relief where it appears that the fraud consisted in the presentation at the trial of a supposed forged document, or a false and perjured testimony, or in basing the judgment on a fraudulent compromise agreement, or in the alleged fraudulent acts or omissions of the counsel which prevented the petitioner from properly presenting the case.15Petitioner fails to convince the Court that the facts relied upon by it to justify a review of the decree constitute actual and extrinsic fraud. It has not adduced adequate evidence that would show that respondent employed actual and extrinsic fraud in procuring the patent and the corresponding certificate of title. Petitioner miserably failed to prove that it was prevented from asserting its right over the lot in question and from properly presenting its case by reason of such fraud. In fact, other than its peremptory statement in its petition filed before the trial court that "the patentee, Benjamin Guerrero, obtained the above indicated sales patent through fraud, false statement of facts and/or omission of material facts,"16petitioner did not specifically allege how fraud was perpetrated by respondent in procuring the sales patent and the certificate of title. Nor was any evidence proffered to substantiate the allegation. Fraud cannot be presumed, and the failure of petitioner to prove it defeats it own cause.Well-settled is the rule that the party alleging fraud or mistake in a transaction bears the burden of proof.17The circumstances evidencing fraud are as varied as the people who perpetrate it in each case. It may assume different shapes and forms; it may be committed in as many different ways.18Thus, the law requires that fraud be established, not just by preponderance of evidence, but by clear and convincing evidence.19Petitioner relies heavily on the verification survey report20which stated that respondent Guerrero was entitled to only 91 square meters of the subject lot instead of 174 square meters which was awarded to him. There is, however, no proof that the area eventually awarded to respondent was intentionally and fraudulently increased. It was never proven that respondent was a party to any fraud that led to the award of a bigger area of 174 square meters instead of 91 square meters. Petitioner even failed to give sufficient proof of any error which may have been committed by its agents who had surveyed the subject property nor had petitioner offered a sensible explanation as to the reason for such discrepancy. Thus, the presumption of regularity in the performance of official functions must be respected.This Court agrees with the RTC that the issuance of the sales patent over the subject lot was made in accordance with the procedure laid down by Commonwealth Act No. 141, as amended, otherwise known as the Public Land Act.21Under Section 91 thereof, an investigation should be conducted for the purpose of ascertaining the veracity of the material facts set out in the application.22The law also requires sufficient notice to the municipality and barrio where the land is located in order to give adverse claimants the opportunity to present their claims.23In the instant case, records reveal that on December 22, 1964, a day after respondent filed his miscellaneous sales application, an actual investigation and site verification of the parcel of land was conducted by Land Investigator Alfonso Tumbocon who reported that the land was free from claims and conflicts.24Likewise, the notice of sale of the lot in question was posted at the District Land Office in San Miguel, Manila, at the Quezon City Hall, and at Pugad Lawin, Quezon City for 30 consecutive days from February 17, 1965 to March 17, 1965 which was the date scheduled for the sale of the lot. The said notice was worded as follows:If there is any adverse claim to the land, such claim must be filed at the Bureau of Lands, Manila on or before the date of the sale; otherwise such claim shall forever be barred.25Further, the "Order of Award"26dated May 20, 1971, as well as the "Issuance of Patent"27dated June 28, 1982 were both duly signed by the Director of Lands. The "Order of Award" even declared that Guerrero has in good faith established his residence on the land in question. On the other hand, the "Issuance of Patent" stated that the land consisting of 174 square meters is free from any adverse claim and that Guerrero has fully paid the purchase price of the lot. Having complied with all the requirements of the law preliminary to the issuance of the patent, respondent was thus issued MSP No. 8991 dated August 16, 1982. Thereafter, the corresponding OCT No. 0-28 was issued on August 27, 1982 in the name of respondent Guerrero.At any rate, by legal presumption, public officers are deemed to have regularly performed their official duties. Thus, the proceedings for land registration that led to the issuance of MSP No. 8991 and OCT No. 0-28 in respondents name are presumptively regular and proper. To overturn this legal presumption will not only endanger judicial stability, but also violate the underlying principle of the Torrens system. Indeed, to do so would reduce the vaunted legal indefeasibility of Torrens titles to meaningless verbiage.28Besides, this presumption of regularity has not been overcome by the evidence presented by petitioner. We, therefore, cannot sustain petitioners contention that fraud tainted the sales patent granted to respondent Guerrero, as well as the certificate of title issued in consequence thereof.Granting that Guerrero committed extrinsic and actual fraud, petitioner failed to avail itself of the remedy within the prescribed period. Under Section 38 of Act No. 496, a petition for reopening and review of the decree of registration must be filed within one year from the date of entry of said decree.In the case of public land grants or patents, the one-year period commences from the issuance of the patent by the government.29In the instant case, the sales patent was issued to respondent on August 16, 1982, while petitioner instituted an action to amend respondents certificate of title on November 7, 1989 or after the lapse of more than seven (7) years from the issuance of the patent. Clearly, petitioner failed to timely avail of the remedy to contest Guerreros title.Petitioner argues that the right of the State for the reversion of unlawfully acquired property is not barred by prescription. Thus, it can still recover the land granted to respondent.True, prescription, basically, does not run against the State and the latter may still bring an action, even after the lapse of one year, for the reversion to the public domain of lands which have been fraudulently granted to private individuals.30However, this remedy of reversion can only be availed of in cases of fraudulent or unlawful inclusion of the land in patents or certificates of title. In the present case, petitioner cannot successfully invoke this defense for, as discussed earlier, it was never proven that respondents patent and title were obtained through actual fraud or other illegal means.Lest it be overlooked, a piece of land covered by a registered patent and the corresponding certificate of title ceases to be part of the public domain. As such, it is considered a private property over which the Director of Lands has neither control nor jurisdiction.31Petitioner likewise insists that respondents title had yet to attain the status of indefeasibility. As argued, Angelina Bustamante was able to timely file a protest on July 29, 1983, which was well within the one-year prescriptive period.We do not agree.While Angelina Bustamante indeed protested the award of a sales patent in favor of respondent, the protest was, however, filed with the Bureau of Lands instead of with the regional trial court as mandated by the aforequoted provision of Section 38 of Act No. 496. Said provision expressly states that a petition for review of a decree of registration shall be filed in the "proper Court of First Instance" (now Regional Trial Court). The law did not say that such petition may be filed with an administrative agency like the Bureau of Lands. To be sure, what the law contemplates in allowing a review of the decree of registration is a full-blown trial before a regular court where each party could be afforded full opportunity to present his/its case and where each of them must establish his case by preponderance of evidence and not by mere substantial evidence, the usual quantum of proof required in administrative proceedings. The concept of "preponderance of evidence" refers to evidence which is of greater weight, or more convincing, than that which is offered in opposition to it; at bottom, it means probability of truth.32On the other hand, substantial evidence refers to such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds equally reasonable might conceivably opine otherwise.33As the review of a decree of registration constitutes an attack on the very integrity of land titles and the Torrens system, a full-blown trial on the merits before a regular court is necessary for the purpose of achieving a more in-depth and thorough determination of all issues involved.Hence, contrary to petitioners assertion, the protest filed by Bustamante with the Bureau of Lands cannot be considered in the context of a petition to review the decree of registration issued to respondent. It was only on November 7, 1989 that such petition was filed by the Director of Lands with the RTC and obviously, it was way beyond the one-year period prescribed by law.It is worth stressing that the Torrens system was adopted in this country because it was believed to be the most effective measure to guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and recognized. If a person purchases a piece of land on the assurance that the sellers title thereto is valid, he should not run the risk of being told later that his acquisition was ineffectual after all. This would not only be unfair to him. What is worse is that if this were permitted, public confidence in the system would be eroded and land transactions would have to be attended by complicated and not necessarily conclusive investigations and proof of ownership. The further consequence would be that land conflicts could be even more abrasive, if not even violent. The government, recognizing the worthy purposes of the Torrens system, should be the first to accept the validity of titles issued thereunder once the conditions laid down by the law are satisfied.34Instead of stabilizing the Torrens system, petitioner, in filing a suit for the amendment of OCT No. 0-28, derogates the very integrity of the system as it gives the impression to Torrens title holders, like herein respondent, that their titles can be questioned by the same authority who had approved their titles. In that case, no Torrens title holder shall be at peace with the ownership and possession of his land, for land registration officers can question his title any time they make a finding unfavorable to said title holder. This is all the more frustrating for respondent Guerrero considering that he had bought the subject lot from the government itself, the very same party who is now impugning his title.While the Torrens system is not a mode of acquiring titles to lands but merely a system of registration of titles to lands,35justice and equity demand that the titleholder should not be made to bear the unfavorable effect of the mistake or negligence of the States agents, in the absence of proof of his complicity in a fraud or of manifest damage to third persons. The real purpose of the Torrens system is to quiet title to land and put a stop forever to any question as to the legality of the title, except claims that were noted in the certificate at the time of the registration or that may arise subsequent thereto.36Otherwise, the integrity of the Torrens system shall forever be sullied by the ineptitude and inefficiency of land registration officials, who are ordinarily presumed to have regularly performed their duties.37Respondents certificate of title, having been registered under the Torrens system, was thus vested with the garment of indefeasibility.WHEREFORE, the instant petition is hereby DENIED and the assailed decision is AFFIRMED.SO ORDERED.CANCIO C. GARCIAAssociate JusticeWE CONCUR:REYNATO S. PUNOAssociate JusticeChairpersonANGELINA SANDOVAL-GUTIERREZAssociate JusticeRENATO C. CORONAAsscociate Justice

ADOLFO S. AZCUNAAssociate JusticeA T T E S T A T I O NI attest that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.REYNATO S. PUNOAssociate JusticeChairperson, Second DivisionC E R T I F I C A T I O NPursuant to Article VIII, Section 13 of the Constitution, and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.ARTEMIO V. PANGANIBANChief Justice

G.R. No. 81163 September 26, 1988EDUARDO S. BARANDA and ALFONSO HITALIA,petitioners,vs.HONORABLE JUDGE TITO GUSTILO, ACTING REGISTER OF DEEDS AVITO SACLAUSO, HONORABLE COURT OF APPEALS, and ATTY. HECTOR P. TEODOSIO,respondents.Eduardo S. Baranda for petitioners.Rico & Associates for private respondents.GUTIERREZ, JR.,J.:Eduardo S. Baranda and Alfonso Hitalia were the petitioners in G.R. No. 64432 and the private respondents in G.R. No. 62042. The subject matter of these two (2) cases and the instant case is the same a parcel of land designated as Lot No. 4517 of the Cadastral Survey of Sta. Barbara, Iloilo covered by Original Certificate of Title No. 6406.The present petition arose from the same facts and events which triggered the filing of the earlier petitions. These facts and events are cited in our resolution dated December 29, 1983 in G.R. No. 64432, as follows:. . . This case has its origins in a petition for reconstitution of title filed with the Court of First Instance of Iloilo involving a parcel of land known as Lot No. 4517 of the Sta. Barbara Cadastre covered by Original Certificate of Title No. 6406 in the name of Romana Hitalia. Eventually, Original Certificate of Title No. 6406 was cancelled and Transfer Certificate of Title No. 106098 was issued in the names of Alfonso Hitalia and Eduardo S. Baranda The Court issued a writ of possession which Gregorio Perez, Maria P. Gotera and Susana Silao refused to honor on the ground that they also have TCT No. 25772 over the same Lot No. 4517. The Court, after considering the private respondents' opposition and finding TCT No. 25772 fraudulently acquired, ordered that the writ of possession be carried out. A motion for reconsideration having been denied, a writ of demolition was issued on March 29, 1982. Perez and Gotera filed a petition for certiorari and prohibition with the Court of Appeals. On August 6, 1982, the Court of Appeals denied the petition. Perez and Gotera filed the petition for review on certiorari denominated as G.R. No. 62042 before the Supreme Court. As earlier stated the petition was denied in a resolution dated January 7,1983. The motion for reconsideration was denied in another resolution dated March 25, 1983, which also stated that the denial is final. This decision in G.R. No. 62042, in accordance with the entry of judgment, became final on March 25, 1983. The petitioners in the instant case G.R. No. 64432--contend that the writs of possession and demolition issued in the respondent court should now be implemented; that Civil Case No. 00827 before the Intermediate Appellate Court was filed only to delay the implementation of the writ; that counsel for the respondent should be held in contempt of court for engaging in a concerted but futile effort to delay the execution of the writs of possession and demolition and that petitioners are entitled to damages because of prejudice caused by the filing of this petition before the Intermediate Appellate Court. On September 26, 1983, this Court issued a Temporary Restraining Order ' to maintain the status quo, both in the Intermediate Appellate Court and in the Regional Trial Court of Iloilo. Considering that (l)there is merit in the instant petition for indeed the issues discussed in G.R. No. 64432 as raised in Civil Case No. 00827 before the respondent court have already been passed upon in G.R. No. 62042; and (2) the Temporary Restraining Order issued by the Intermediate Appellate Court was only intended not to render the petition moot and academic pending the Court's consideration of the issues, the Court RESOLVED to DIRECT the respondent Intermediate Appellate Court not to take cognizance of issues already resolved by this Court and accordingly DISMISS the petition in Civil Case No. 00827. Immediate implementation of the writs of possession and demolition is likewise ordered. (pp. 107-108, Rollo G.R. No. 64432)On May 9, 1984, the Court issued a resolution denying with finality a motion for reconsideration of the December 29, 1983 resolution in G.R. No. 64432. On this same date, another resolution was issued, this time in G.R. No. 62042, referring to the Regional Trial Court of Iloilo the ex-parte motion of the private respondents (Baranda and Hitalia) for execution of the judgment in the resolutions dated January 7, 1983 and March 9, 1983. In the meantime, the then Intermediate Appellate Court issued a resolution dated February 10, 1984, dismissing Civil Case No. 00827 which covered the same subject matter as the Resolutions above cited pursuant to our Resolution dated December 29, 1983. The resolution dated December 29, 1983 in G.R. No. 64432 became final on May 20, 1984.Upon motions of the petitioners, the Regional Trial Court of Iloilo, Branch 23 presided by Judge Tito G. Gustilo issued the following order:Submitted are the following motions filed by movants Eduardo S. Baranda and Alfonso Hitalia through counsel dated August 28, 1984:(a) Reiterating Motion for Execution of Judgment of Resolutions dated January 7, 1983 and March 9, 1983 Promulgated by Honorable Supreme Court (First Division) in G.R. No. 62042;(b) Motion for Execution of Judgment of Resolution dated December 29, 1983 Promulgated by Honorable Supreme Court (First Division) in G.R. No. 64432;(c) The Duties of the Register of Deeds are purely ministerial under Act 496, therefore she must register all orders, judgment, resolutions of this Court and that of Honorable Supreme Court.Finding the said motions meritorious and there being no opposition thereto, the same is hereby GRANTED.WHEREFORE, Transfer Certificate of Title No. T-25772 is hereby declared null and void and Transfer Certificate of Title No. T-106098 is hereby declared valid and subsisting title concerning the ownership of Eduardo S. Baranda and Alfonso Hitalia, all of Sta. Barbara Cadastre.The Acting Register of Deeds of Iloilo is further ordered to register the Subdivision Agreement of Eduardo S. Baranda and Alfonso Hitalia as prayed for." (p. 466, Rollo--G.R. No. 64432)The above order was set aside on October 8, 1984 upon a motion for reconsideration and manifestation filed by the Acting Registrar of Deeds of Iloilo, Atty. Helen P. Sornito, on the ground that there was a pending case before this Court, an Action for Mandamus, Prohibition, Injunction under G.R. No. 67661 filed by Atty. Eduardo Baranda, against the former which remained unresolved.In view of this development, the petitioners filed in G.R. No. 62042 and G.R. No. 64432 ex-parte motions for issuance of an order directing the Regional Trial Court and Acting Register of Deeds to execute and implement the judgments of this Court. They prayed that an order be issued:1. Ordering both the Regional Trial Court of Iloilo Branch XXIII, under Hon. Judge Tito G. Gustilo and the acting Register of Deeds Helen P. Sornito to register the Order dated September 5, 1984 of the lower court;2. To cancel No.T-25772. Likewise to cancel No.T-106098 and once cancelled to issue new certificates of title to each of Eduardo S. Baranda and Alfonso Hitalia;Plus other relief and remedies equitable under the premises. (p. 473, 64432 Rollo)Acting on these motions, we issued on September 17,1986 a Resolution in G.R. No. 62042 and G.R. No. 64432 granting the motions as prayed for. Acting on another motion of the same nature filed by the petitioners, we issued another Resolution dated October 8, 1986 referring the same to the Court Administrator for implementation by the judge below.In compliance with our resolutions, the Regional Trial Court of Iloilo, Branch 23 presided by Judge Tito G. Gustilo issued two (2) orders dated November 6,1986 and January 6,1987 respectively, to wit:O R D E RThis is an Ex-parte Motion and Manifestation submitted by the movants through counsel on October 20, 1986; the Manifestation of Atty. Helen Sornito, Register of Deeds of the City of Iloilo, and formerly acting register of deeds for the Province of Iloilo dated October 23, 1986 and the Manifestation of Atty. Avito S. Saclauso, Acting Register of Deeds, Province of Iloilo dated November 5, 1986.Considering that the motion of movants Atty. Eduardo S. Baranda and Alfonso Hitalia dated August 12, 1986 seeking the full implementation of the writ of possession was granted by the Honorable Supreme Court, Second Division per its Resolution dated September 17,1986, the present motion is hereby GRANTED.WHEREFORE, the Acting Register of Deeds, Province of Iloilo, is hereby ordered to register the Order of this Court dated September 5, 1984 as prayed for.xxx xxx xxxO R D E RThis is a Manifestation and Urgent Petition for the Surrender of Transfer Certificate of Title No. T-25772 submitted by the petitioners Atty. Eduardo S. Baranda and Alfonso Hitalia on December 2, 1986, in compliance with the order of this Court dated November 25, 1 986, a Motion for Extension of Time to File Opposition filed by Maria Provido Gotera through counsel on December 4, 1986 which was granted by the Court pursuant to its order dated December 15, 1986. Considering that no Opposition was filed within the thirty (30) days period granted by the Court finding the petition tenable, the same is hereby GRANTED.WHEREFORE, Maria Provido Gotera is hereby ordered to surrender Transfer Certificate of Title No. T-25772 to this Court within ten (10) days from the date of this order, after which period, Transfer Certificate of Title No. T-25772 is hereby declared annulled and the Register of Deeds of Iloilo is ordered to issue a new Certificate of Title in lieu thereof in the name of petitioners Atty. Eduardo S. Baranda and Alfonso Hitalia, which certificate shall contain a memorandum of the annulment of the outstanding duplicate. (pp. 286-287, Rollo 64432)On February 9, 1987, Atty. Hector Teodosio, the counsel of Gregorio Perez, private respondent in G.R. No. 64432 and petitioner in G.R. No. 62042, filed a motion for explanation in relation to the resolution dated September 17, 1986 and manifestation asking for clarification on the following points:a. As to the prayer of Atty. Eduardo Baranda for the cancellation of TCT T-25772, should the same be referred to the Court of Appeals (as mentioned in the Resolution of November 27, 1985) or is it already deemed granted by implication (by virtue of the Resolution dated September 17, 1986)?b. Does the Resolution dated September 17, 1986 include not only the implementation of the writ of possession but also the cancellation of TCT T-25772 and the subdivision of Lot 4517? (p. 536, Rollo 4432)Acting on this motion and the other motions filed by the parties, we issued a resolution dated May 25, 1987 noting all these motions and stating therein:xxx xxx xxxSince entry of judgment in G.R. No. 62042 was made on January 7, 1983 and in G.R. No. 64432 on May 30, 1984, and all that remains is the implementation of our resolutions, this COURT RESOLVED to refer the matters concerning the execution of the decisions to the Regional Trial Court of Iloilo City for appropriate action and to apply disciplinary sanctions upon whoever attempts to trifle with the implementation of the resolutions of this Court. No further motions in these cases will be entertained by this Court. (p. 615, Rollo-64432)In the meantime, in compliance with the Regional Trial Court's orders dated November 6, 1986 and January 6, 1987, Acting Register of Deeds AvitoSaclauso annotated the order declaring Transfer Certificate of Title No. T-25772 as null and void, cancelled the same and issued new certificates of titles numbers T-111560, T-111561 and T-111562 in the name of petitioners Eduardo S. Baranda and Alfonso Hitalia in lieu of Transfer Certificate of TItle No. T-106098.However, a notice oflis pendens"on account of or by reason of a separate case (Civil Case No. 15871) still pending in the Court of Appeals" was carried out and annotated in the new certificates of titles issued to the petitioners. This was upheld by the trial court after setting aside its earlier order dated February 12, 1987 ordering the cancellation oflis pendens.This prompted the petitioners to file another motion in G.R, No. 62042 and G.R. No. 64432 to order the trial court to reinstate its order dated February 12, 1987 directing the Acting Register of Deeds to cancel the notice oflis pendensin the new certificates of titles.In a resolution dated August 17, 1987, we resolved to refer the said motion to the Regional Trial Court of Iloilo City, Branch 23 for appropriate action.Since respondent Judge Tito Gustilo of the Regional Trial Court of Iloilo, Branch 23 denied the petitioners' motion to reinstate the February 12, 1987 order in another order dated September 17, 1987, the petitioners filed this petition for certiorari, prohibition and mandamus with preliminary injunction to compel the respondent judge to reinstate his order dated February l2, 1987 directing the Acting Register of Deeds to cancel the notice oflis pendensannotated in the new certificates of titles issued in the name of the petitioners.The records show that after the Acting Register of Deeds annotated a notice of ispendenson the new certificates of titles issued in the name of the petitioners, the petitioners filed in the reconstitution case an urgent ex-parte motion to immediately cancel notice of lis pendens annotated thereon.In his order dated February 12, 1987, respondent Judge Gustilo granted the motion and directed the Acting Register of Deeds of Iloilo to cancel the lis pendens found on Transfer Certificate of Title Nos. T-106098; T-111560; T-111561 and T-111562.Respondent Acting Register of Deeds Avito Saclauso filed a motion for reconsideration of the February 12, 1987 order stating therein:That the undersigned hereby asks for a reconsideration of the said order based on the second paragraph of Section 77 of P.D. 1529, to wit:"At any time after final judgment in favor of the defendant or other disposition of the action such as to terminate finally all rights of the plaintiff in and to the land and/or buildings involved, in any case in which a memorandum or notice ofLis Pendenshas been registered as provided in the preceding section, the notice ofLis Pendensshall be deemed cancelled upon the registration of a certificate of the clerk of court in which the action or proceeding was pending stating the manner of disposal thereof."That thelis pendensunder Entry No. 427183 was annotated on T-106098, T-111560, T-111561 and T-111562 by virtue of a case docketed as Civil Case No. 15871, now pending with the Intermediate Court of Appeals, entitled, "Calixta Provido, Ricardo Provido, Sr., Maria Provido and Perfecto Provido, Plaintiffs, versus Eduardo Baranda and Alfonso Hitalia, Respondents."That under the above-quoted provisions of P.D. 152, the cancellation of subject Notice of Lis Pendens can only be made or deemed cancelled upon the registration of the certificate of the Clerk of Court in which the action or proceeding was pending, stating the manner of disposal thereof.Considering that Civil Case No. 1587, upon which the Notice of Lis Pendens was based is still pending with the Intermediate Court of Appeals, only the Intermediate Court of Appeals and not this Honorable Court in a mere cadastral proceedings can order the cancellation of the Notice of Lis Pendens. (pp. 68-69, Rollo)Adopting these arguments and on the ground that some if not all of the plaintiffs in Civil Case No. 15871 were not privies to the case affected by the Supreme Court resolutions, respondent Judge Tito Gustilo set aside his February 12, 1987 order and granted the Acting Register of Deeds' motion for reconsideration.The issue hinges on whether or not the pendency of the appeal in Civil Case No. 15871 with the Court of Appeals prevents the court from cancelling the notice oflis pendensin the certificates of titles of the petitioners which were earlier declared valid and subsisting by this Court in G.R. No. 62042 and G.R. No. 64432. A corollary issue is on the nature of the duty of a Register of Deeds to annotate or annul a notice oflis pendensin a torrens certificate of title.Civil Case No. 15871 was a complaint to seek recovery of Lot No. 4517 of Sta. Barbara Cadastre Iloilo, (the same subject matter of G.R. No 62042 and G.R. No. 64432) from petitioners Baranda and Hitalia filed by Calixta Provido, Ricardo Provido, Maxima Provido and Perfecta Provido before the Regional Trial Court of Iloilo, Branch 23. At the instance of Atty. Hector P. Teodosio, the Provides' counsel, a notice of is pendens was annotated on petitioners' Certificate of Title No. T-106098 covering Lot No. 4517, Sta. Barbara Cadastre.Acting on a motion to dismiss filed by the petitioners, the court issued an order dated October 24, 1984 dismissing Civil Case No. 15871.The order was then appealed to the Court of Appeals. This appeal is the reason why respondent Judge Gustilo recalled the February 12, 1987 order directing the Acting Register of Deeds to cancel the notice of lis pendens annotated on the certificates of titles of the petitioners.This petition is impressed with merit.Maria Provido Gotera was one of the petitioners in G.R. No. 62042. Although Calixta Provido, Ricardo Provido, Maxima Provido and Perfecta Provido, the plaintiffs in Civil Case No. 15871 were not impleaded as parties, it is very clear in the petition that Maria Provido was acting on behalf of the Providos who allegedly are her co-owners in Lot No. 4517, Sta. Barbara Cadastre as shown by Transfer Certificate of Title No. T-25772 issued in her name and the names of the plaintiffs in Civil Case No. 15871, among others. (Annex "E" G.R. No. 62042, p. 51, Rollo) In fact, one of the issues raised by petitioners Maria Provido Gotera and Gregoria Perez in G.R. No. 62042 was as follows:xxx xxx xxx2. Whether or not, in the same reconstitution proceedings, respondent Judge Midpantao L. Adil had the authority to declare as null and void the transfer certificate of title in the name of petitionerMaria Provido Gotera and her other co-owners. (p. 3, Rollo; Emphasis supplied)It thus appears that the plaintiffs in Civil Case No. 15871 were privies to G.R. No. 62042 contrary to the trial court's findings that they were not.G.R. No. 62042 affirmed the order of the then Court of First Instance of Iloilo in the reconstitution proceedings declaring TCT No. 25772 in the name of Providos over Lot No. 4517, Sta. Barbara Cadastre null and void for being fraudulently obtained and declaring TCT No. 106098 over the same parcel Lot No. 4517, Sta. Barbara Cadastre in the name of petitioners Eduardo Baranda and Alfonso Hitalia valid and subsisting.The decision in G.R. No. 62042 became final and executory on March 25,1983 long before Civil Case No. 15871 was filed.Under these circumstances, it is crystal clear that the Providos, private respondents herein, in filing Civil Case No. 15871 were trying to delay the full implementation of the final decisions in G.R. No. 62042 as well as G.R. No. 64432 wherein this Court ordered immediate implementation of the writs of possession and demolition in the reconstitution proceedings involving Lot No. 4517, Sta. Barbara Cadastre.The purpose of a notice oflis pendensis defined in the following manner:Lis pendenshas been conceived to protect the real rights of the party causing the registration thereof With the lis pendens duly recorded, he could rest secure that he would not lose the property or any part of it. For, notice of lis pendens serves as a warning to a prospective purchaser or incumbrancer that the particular property is in litigation; and that he should keep his hands off the same, unless of course he intends to gamble on the results of the litigation. (Section 24, Rule 14, RuIes of Court; Jamora v. Duran, et al., 69 Phil. 3, 11; I Martin, Rules of Court, p. 415, footnote 3, citing cases.) (Natanov. Esteban, 18 SCRA 481, 485-486)The private respondents are not entitled to this protection. The facts obtaining in this case necessitate the application of the rule enunciated in the cases of Victoriano v. Rovila (55 Phil. 1000),Municipal Council of Paranaque v. Court of First Instance of Rizal(70 Phil., 363) and Sarmiento v. Ortiz (10 SCRA 158), to the effect that:We have once held that while ordinarily a notice of pendency which has been filed in a proper case, cannot be cancelled while the action is pending and undetermined, the proper court has the discretionary power to cancel it under peculiar circumstances, as for instance, where the evidence so far presented by the plaintiff does not bear out the main allegations of his complaint, and where the continuances of the trial, for which the plaintiff is responsible, are unnecessarily delaying the determination of the case to the prejudice of the defendant. (Victoriano v. Rovira,supra; The Municipal Council of Paranaque v. Court of First Instance of Rizal,supra)The facts of this case in relation to the earlier cases brought all the way to the Supreme Court illustrate how the private respondents tried to block but unsuccessfuly the already final decisions in G.R. No. 62042 and G.R. No. 64432.Parenthetically, respondent Judge Tito Gustilo abused his discretion in sustaining the respondent Acting Register of Deeds' stand that, the notice oflis pendensin the certificates of titles of the petitioners over Lot No. 4571, Barbara Cadastre cannot be cancelled on the ground of pendency of Civil Case No. 15871 with the Court of Appeals. In upholding the position of the Acting Register of Deeds based on Section 77 of Presidential Decree No. 1529, he conveniently forgot the first paragraph thereof which provides:Cancellation of lis pendens. Before final judgment, a notice oflis pendensmay be cancelled upon Order of the Court after proper showing that the notice is for the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be registered. It may also be cancelled by the Register of Deeds upon verified petition of the party who caused the registration thereof.This Court cannot understand how respondent Judge Gustilo could have been misled by the respondent Acting Register of Deeds on this matter when in fact he was the same Judge who issued the order dismissing Civil Case No. 15871 prompting the private respondents to appeal said order dated October 10, 1984 to the Court of Appeals. The records of the main case are still with the court below but based on the order, it can be safely assumed that the various pleadings filed by the parties subsequent to the motion to dismiss filed by the petitioners (the defendants therein) touched on the issue of the validity of TCT No. 25772 in the name of the Providos over Lot Number 4571, Sta. Barbara Cadastre in the light of the final decisions in G.R. No. 62042 and G.R. No. 64432.The next question to be determined is on the nature of the duty of the Register of Deeds to annotate and/or cancel the notice oflis pendensin a torrens certificate of title.Section 10, Presidential Decree No. 1529 states that "It shall be the duty of the Register of Deeds to immediately register an instrument presented for registration dealing with real or personal property which complies with all the requisites for registration. ... . If the instrument is not registrable, he shall forthwith deny registration thereof and inform the presentor of such denial in writing, stating the ground or reasons therefore, and advising him of his right to appeal byconsultain accordance with Section 117 of this Decree."Section 117 provides that "When the Register of Deeds is in doubt with regard to the proper step to be taken or memoranda 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 action taken by the Register of Deeds with reference to any such instrument, the question shall be submitted to the Commission of Land Registration by the Register of Deeds, or by the party in interest thru the Register of Deeds. ... ."The elementary rule in statutory construction is that when the words and phrases of the statute are clear and unequivocal, their meaning must be determined from the language employed and the statute must be taken to mean exactly what it says. (Aparri v. Court of Appeals, 127 SCRA 231; Insular Bank of Asia and America Employees' Union [IBAAEU] v. Inciong, 132 SCRA 663) The statute concerning the function of the Register of Deeds to register instruments in a torrens certificate of title is clear and leaves no room for construction. According to Webster's Third International Dictionary of the English Language the wordshallmeans "ought to, must, ...obligation used to express a command or exhortation, used in laws, regulations or directives to express what is mandatory." Hence, the function of a Register of Deeds with reference to the registration of deeds encumbrances, instruments and the like is ministerial in nature. The respondent Acting Register of Deeds did not have any legal standing to file a motion for reconsideration of the respondent Judge's Order directing him to cancel the notice oflis pendensannotated in the certificates of titles of the petitioners over the subject parcel of land. In case of doubt as to the proper step to be taken in pursuance of any deed ... orother instrumentpresented to him, he should have asked the opinion of the Commissioner of Land Registration now, the Administrator of the National Land Title and Deeds Registration Administration in accordance with Section 117 of Presidential Decree No. 1529.In the ultimate analysis, however, the responsibility for the delays in the full implementation of this Court's already final resolutions in G.R. No. 62042 and G.R. No. 64432 which includes the cancellation of the notice oflis pendensannotated in the certificates of titles of the petitioners over Lot No. 4517 of the Sta. Barbara Cadastre falls on the respondent Judge. He should never have allowed himself to become part of dilatory tactics, giving as excuse the wrong impression that Civil Case No. 15871 filed by the private respondents involves another set of parties claiming Lot No. 4517 under their own Torrens Certificate of Title.WHEREFORE, the instant petition is GRANTED. The February 12, 1987 order of the Regional Trial Court of Iloilo, Branch 23 is REINSTATED. All subsequent orders issued by the trial court which annulled the February 12, 1987 order are SET ASIDE. Costs against the private respondents.SO ORDERED.Fernan, C.J., Feliciano, Bidin and Cortes, JJ., concur.

G.R. No. L-22486 March 20, 1968TEODORO ALMIROL,petitioner-appellant,vs.THE REGISTER OF DEEDS OF AGUSAN,respondent-appellee.Tranquilino O. Calo, Jr. for petitioner-appellant.Office of the Solicitor General for respondent-appellee.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, 1962:1. 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; but3. 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 spouse 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. In view of such refusal, Almirol went to the Court of First Instance of Agusan on a petition formandamus(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 attorney's fees and expenses of litigation. It is Almirol's 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 "mandamusdoes 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 whethermandamu