Manotok Realty, Inc. and Manotok Estate Corporation, petitioners, vs. CLT Realty Development Corporation,

SANDOVAL-GUTIERREZ, J.:

Before us for resolution are three petitions for review on certiorari:[1]

1.       G.R. No. 123346

The petition in this case was filed by Manotok Realty, Inc. and Manotok Estate Corporation against CLT Realty Development Corporation assailing the Decision[2] dated September 28, 1995 and Resolution dated January 8, 1996 of the Court of Appeals in CA-G.R. CV No. 45255;

2.       G.R. No. 134385

The petition was filed by Araneta Institute of Agriculture, Inc. against Jose B. Dimson (now deceased), represented by his surviving spouse and children, and the Registry of Deeds of Malabon, challenging the Joint Decision[3] dated May 30, 1997 and Resolution dated July 16, 1998 of the Court of Appeals in CA-G.R. CV No. 41883 and CA-G.R. SP No. 34819; and

3.       G.R. No. 148767

The petition here was filed by Sto. Niño Kapitbahayan Association, Inc. against CLT Realty Development Corporation questioning the Decision[4] of the Court of Appeals dated March 23, 2001 in CA-G.R. CV No. 52549.

On March 6, 2002, these petitions were consolidated[5] as the issue involved is the validity of the parties’ titles over portions of land known as theMaysilo Estate located at Caloocan City and Malabon, Metro Manila, covered by Original Certificate of Title (OCT) No. 994 of the Registry of Deeds of Caloocan City.   It is this same OCT No. 994 from which the titles of the parties were purportedly derived.  

We shall state the antecedents of these cases separately considering their peculiar circumstances.

            1.   G.R. No. 123346

(Manotok Realty, Inc. and Manotok Estate Corporation, petitioners, vs. CLT Realty Development Corporation, respondents)

On August 10, 1992, CLT Realty Development Corporation (CLT Realty) filed with the Regional Trial Court, Branch 129, Caloocan City a complaint for annulment of Transfer Certificates of Title (TCT), recovery of possession, and damages against Manotok Realty, Inc. and Manotok Estate Corporation   (Manotok Corporations) and the Registry of Deeds of Caloocan City, docketed as Civil Case No.  C-15539.  

The complaint alleges inter alia that CLT Realty (plaintiff) is the registered owner of Lot 26 of the Maysilo Estate located in Caloocan City, covered byTCT No. T-177013 of the Registry of Deeds of said city; that this TCT was originally derived from  OCT No. 994; that on December 10, 1988, CLT Realty acquired Lot 26 from its former registered owner, Estelita I. Hipolito, by virtue of a Deed of Sale with Real Estate Mortgage; that she, in turn, purchased the same lot from Jose B. Dimson; that Manotok Corporations (defendants) illegally took possession of 20 parcels of land (covered by 20 separate titles[6]) within said Lot 26 owned by CLT Realty; that based on the technical descriptions of Manotok Corporations’ titles, their property overlap or embrace Lot 26 of CLT Realty; and that the titles of Manotok Corporations constitute a cloud of doubt over the title of CLT Realty.   The latter thus prays that the 20 titles of Manotok Corporations be cancelled for being void; and that Manotok Corporations be ordered to vacate the disputed portions of Lot 26 and turn over possession thereof to CLT Realty, and to pay damages.

In their answer with counterclaim, Manotok Corporations denied the material allegations of the complaint, alleging that Jose B. Dimson’s title (TCT No. R-15166) was irregularly issued, hence void; and that consequently, the titles of Estelita Hipolito (TCT No. R-17994) and CLT Realty (TCT No. 177013) derived therefrom are likewise void.   By way of affirmative defense, Manotok Corporations assert ownership of the parcel of land being claimed by CLT Realty, alleging that they acquired the same from the awardees or vendees of the National Housing Authority.

During the pre-trial conference, the trial court, upon agreement of the parties, approved the creation of a commission composed of three commissioners tasked to resolve the conflict in their respective titles.   On July 2, 1993, the trial court issued an Order[7] defining the issues to    be resolved by the commissioners, thus: 

          “1.  Whether or not the property covered by the Transfer Certificates of Title of defendants (Manotok Realty, Inc. and Manotok Estate Corporation) pertain to or involved Lot No. 26 of the Maysilo Estate presently titled in the name of the plaintiff (CLT Realty Development Corporation); and

            “2.   Whether or not the property covered by the title of the plaintiff and the property covered by the titles of the defendants overlap.”[8]

 

The commissioners chosen were Engr. Avelino L. San Buenaventura (nominated by CLT Realty), Engr. Teodoro I. Victorino (nominated by Manotok Corporations), and Engr. Ernesto S. Erive (chosen by the two commissioners and the parties).   Significantly, Engr. Ernesto Erive is the Chief of the Surveys Division, Land Management Bureau, Department of Environment and Natural Resources (DENR), Quezon City.[9]   On July 2, 1993, the three took their oaths of office in open court.

On October 8, 1993, Ernesto Erive and Avelino San Buenaventura submitted an exhaustive Joint Final Report[10] (Majority Report) with the following conclusion:

“h.   Based on the foregoing, it is the conclusion of the undersigned Commissioners that defendants’ (Manotok Realty, Inc. and Manotok Estate Corporation) titles overlap portions of plaintiff’s (CLT Realty Development Corporation) title, which overlapping is due to the irregular and questionable issuance of TCT Nos. 4211 (also of TCT No. 4210), 5261, 35486, 1368 to 1374.   The inherent technical defects on TCT No. 4211 (from where defendants derive their titles) and TCT No. 4210 which were exhaustively elucidated above, point to the fact that there was no approved subdivision of Lot 26 which served as legal basis for the regular issuance of TCT Nos. 4210 and 4211.   Thus, as between plaintiff’s title, which was derived from regularly issued titles, and defendants’ titles, which were derived from irregularly issued titles, plaintiff’s title which pertains to the entire Lot 26 of the Maysilo Estate should prevail over defendants’ titles.”   

 

On the other hand, Teodoro Victoriano submitted his Individual Final Report [11] (Minority Report) dated October 23, 1993 with the following findings:

“f. That viewed in the light of the foregoing considerations, there is no question that the different parcels of land which are covered by defendants’ transfer certificates of title in question are parts of Lot 26 of then Maysilo Estate;

“g.  That on the basis of the technical descriptions appearing on the certificates of titles of the defendants, it is ascertained that the parcels of

land covered therein overlap portions of the parcel of land which is covered by the plaintiff’s certificate of title.”

 

The trial court then scheduled the hearing of the two Reports.   CLT Realty filed its objections to the Minority Report.   For its part, Manotok Corporations submitted their comment/objections to the Majority Report.  

On February 8, 1994, the trial court issued an Order directing the parties to file their respective memoranda “to enable this court to adopt wholly or partially the memorandum for either as the judgment herein, x x x.”[12]

On April 6, 1994, Manotok Corporations submitted their Memorandum praying that the trial court approve the Minority Report and render judgment in their favor.

CLT Realty likewise filed its Memorandum on April 15, 1994 praying that “the Majority Report be approved in toto, and that judgment be rendered pursuant thereto.”

In its Order of April 22, 1994, the trial court considered the case submitted for decision.[13]

On May 10, 1994, the trial court rendered its Decision, the dispositive portion of which reads:

“WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff (CLT Realty) and against defendants (Manotok Corporations) as follows:

“1. Ordering the annulment and cancellation of defendants’ Transfer Certificates of Title Nos. 4210 and 4211 of the Registry of Deeds of Caloocan City which encroach on plaintiff’s 201,288 square meters of Lot No. 26 of the Maysilo Estate, Caloocan City;

“2.  Ordering defendants to vacate said 201,288 square meters of Lot No. 26 registered in the name of plaintiff;

“3.  Ordering defendants jointly and severally to pay plaintiff the sum of P201,288.00 annually from March 15, 1989, as reasonable compensation for defendants’ occupancy and use of the 201,288 square meters involved in this case until the area is vacated;

“4.  Ordering defendants jointly and severally to pay plaintiff’s counsel (Villaraza & Cruz Law Office) the sum of P50,000.00 as attorney’s fees; and

“5.  Ordering defendants jointly and severally to pay the costs of suit. 

“Defendants’ Counterclaim is dismissed for lack of merit.

“SO ORDERED.”

The findings of fact and conclusions contained in the Majority Report, which the trial court adopted in its Decision, are quoted as follows:

“7.   That the following facts were established by  the undersigned Commissioners:

“a.   Records show that Maysilo Estate was surveyed under Plan No. Psu-2345 on September 8 to 27, October 4 to 21 and November 17 to 18, 1991;

“b.  That on the basis of the Decision rendered on December 3, 1912 by Hon. Norberto Romualdez in Land Registration Case No. 4429 pursuant to which the Decree No. 36455 was issued and the approved plan Psu-2345, the Maysilo Estate was registered under Republic Act No. 496 and Original Certificate of Title No. 994, OCT-994, was issued by the Registry of Deeds of Rizal, covering 34 parcels of land, Lots 1 to 6, 7-A, 8 to 15, 17 to 22, 23-A, 24, 25-A, 25-D and 26 to 33, all of Psu-2345.

“c.   The original copy of OCT-994 in its original form although dilapidated is on file at the Registry of Deeds of Caloocan City;

“d.   That according to the documents submitted by the plaintiff, TCT-177013 in the name of plaintiff CLT Realty Development Corporationspecifically describes the parcel of land covered by its title as ‘Lot 26, Maysilo Estate.’         TCT-177013 was a transfer from TCT-R-17994 registered in the name of Estelita Hipolito which in turn is a transfer from TCT-R-15166registered in the name of Jose B. Dimson which also is a transfer from OCT-994.  TCT-R-17994 and TCT-R-15166 also specifically describe the parcel of land covered by the titles as ‘Lot 26, Maysilo Estate’;

“e.  That defendant Manotok Realty Inc.’s properties are covered by TCT Nos. 7528, 7762, 8012, 9866, C-17272, 21107, 21485, 26405, 26406, 26407, 33904, 34255, C-35267, 41956, 53268, 55896, T-1214528, 163902 and 165119, while defendant Manotok Estate Corporation’s property is covered by TCT No. T-232568, all of the Registry of Deeds of Caloocan City.

“f.   That on the basis of the technical descriptions on the titles of defendants, the parcels of land covered therein overlap portions of the parcel of land covered by plaintiff’s title;

“g.  That according to the documents of defendants, Lot 26 was apparently subdivided which led to the issuance of Transfer Certificates of Title Nos. 4210 and 4211 which were registered on September 9, 1918 in the names of Messrs. Alejandro Ruiz and Mariano Leuterio.  All of defendants’ titles are derived from TCT No. 4211.

“h.   The original copy of OCT-994 does not contain the pages where Lot 26 and some other lots are supposedly inscribed;

“i.   TCT No. 4211 was later cancelled by TCT No. 5261 in the name of Francisco J. Gonzales which was later cancelled by TCT No. 35486 in the names of Jose Leon Gonzales, Consuelo Susana Gonzales, Juana Francisca Gonzales, Maria Clara Gonzales, Francisco Felipe Gonzales and Concepcion Maria Gonzales;

“j.   Upon examination of the original copy of OCT-994, it can be seen that the technical descriptions of the lots and the certificate itself are entirely written in the English language.  On the other hand, it was noticed that the technical descriptions on TCT Nos. 4211 (as well as TCT No. 4210) 5261 and 35486 are inscribed in the Spanish language in these certificates;

“k.   The dates of the original survey of the mother title OCT-994 (September 8-27, October 4-21 and November 17-18, 1911) are not indicated on TCT Nos. 4211 (also on TCT No. 4210), 5261 and 35486.  Rather, an entirely different date, December 22, 1917, is indicated at the end of the Spanish technical descriptions on TCT No. 4211 (also on TCT No. 4210), 5261 and 35486;

“l.   The parcel of land covered by the successive titles TCT Nos. 4211, 5261 and 35486 is not identified by a lot number.  There is no reference or mention of Lot 26 of the Maysilo Estate in the technical description of said titles.

“m.   That there is no subdivision survey plan number indicated on TCT No. 4211 (also on TCT No. 4210), 5261 and 35486 covering the purported subdivision of Lot 26.   Upon verification with the Bureau of Lands or in the Land Registration Authority, which are the official depositories of all approved survey plans, no survey plan covering said subdivision could be found;

“n.   The three (3) separate lots covered by TCT Nos. 4210 and 4211 which allegedly were the result of the subdivision of Lot 26 were not

designated or identified as Lot 26-A, Lot 26-B and Lot 26-C to conform with existing practice;

“o.   That it appears that the parcel of land covered by the successive titles TCT No. 4211, then 5261 and lastly 35486 was again subdivided under Plan Psu-21154.    The alleged subdivision plan Psd-21154 had seven (7) resultant lots which are issued individuals certificates, TCT Nos. 1368 thru 1374, six of which are in the names of each of the six children of Francisco J. Gonzales;

“p.  Plan Psd-21154 appears to have been prepared on September 15, 21, 29 and October 5-6, 1946 according to the technical descriptions appearing on TCT Nos. 1368 thru 1374;

“q.  TCT Nos. 1368 thru 1374 are written in the English language and the technical descriptions of the lots covered therein indicate the original survey of the mother title as ‘September 8-27, October 4-21 and November 17-18, 1911’ which dates are not found in the mother title TCT No. 35486 or the antecedent titles TCT No. 5261 and 4211;

“r.   It appears that these seven (7) properties covered by TCT Nos. 1368 thru 1374 were later expropriated by the Republic of the Philippines through the People’s Homesite and Housing Corporation (now the National Housing Authority) after which they were consolidated and subdivided into 77 lots under (LRC) Pcs-1828 for resale to tenants.  Manotok Realty, Inc. appears to be one of the original vendees of said lots having acquired Lot 11-B covered by TCT No. 34255.   It appears that some of the tenants later sold their lots to various vendees some of whom are the defendants, Manotok Realty, Inc. and Manotok Estate Corporation;

“s. That Psd-21154, the plan which allegedly subdivided the lot covered by TCT No. 35486 (formerly covered by TCT No. 4211, then TCT No. 5261), could not be traced at the official depository of plans which is the Bureau of Lands.   According to the EDPS Listings of the Records Management Division of the Lands Management Bureau (formerly the Bureau of Lands), there is no record of the alleged plan Psd-21154.   Accordingly, said EDPS listings indicate those survey plans which were salvaged after the fire that gutted the Philippines from the Japanese forces.   It appears, however, from TCT Nos. 1368 thru 1374 that psd-21154 was done after the war on September 15, 21, 29 and October 5-6, 1946;

“t.  Upon examination of the technical descriptions inscribed on TCT Nos. 1368 thru 1374, it was noticed that the tie lines deviated from the mother lot’s tie point which is Bureau of Lands Location Monument No. 1, Caloocan City.   Instead different location monuments of adjoining Piedad Estate were used.  The tie point used

in TCT No. 1368 is B.M. 10, Piedad Estate while TCT Nos. 1369 and 1370 used B.M. No. 9, Piedad Estate; and TCT Nos. 1371, 1372, 1373 and 1374 used B.M. No. 7, Piedad Estate.  The changing of the tie points resulted in the shifting of the position of the seven (7) lots do not fall exactly inside the boundary of the mother lot.   The same is true when the lots described on the titles of the defendants are plotted on the basis of their technical descriptions inscribed on said titles.

“8.  In the light of the foregoing facts, the undersigned Commissioners have come to the following conclusions:

“a. There are inherent technical infirmities or defects on the face of TCT Nos. 4211 (also on TCT No. 4210), 5261 and 35486.   The fact that the technical descriptions in TCT Nos. 4211, 5261 and 35486 are written in Spanish while those on the alleged mother title, OCT-994, were already in English is abnormal and contrary to the usual practice in the issuance of titles.   If OCT-994 is the mother title of TCT Nos. 4211, 5261 and 35486, then said titles should also be written in English because OCT-994 is already in English.   It is possible that an ascendant title be written in Spanish and the descendant title in English, the language now officially used, but the reverse is highly improbable and irregular.

“b.  Also, the fact that the original survey dates of OCT-994 (September 8-27, October 4-21 and November 17-18, 1911) are not indicated on the technical descriptions on TCT Nos. 4211, 5261 and 35486 but an entirely different date, December 22, 1917, is instead indicated likewise leads to the conclusion that TCT Nos. 4211, 5261 and 35486 could not have been derived from OCT-994.   It is the established procedure to always indicate in the certificate of title, whether original or transfer certificates, the date of the original survey of the mother title together with the succeeding date of subdivision or consolidation.  Thus, the absence of the original survey dates of OCT-994 on TCT Nos. 4211, 5261 and 35486 is the original survey date of the mother title, then OCT-994 is not the mother title of TCT Nos. 4211, 5261 and 35486 not only because the original survey dates are different but because the date of original survey is always earlier than the date of the issuance of the original title.   OCT-994 was issued on May 3, 1917 and this is much ahead of the date of survey indicated on TCT Nos. 4210 and 4211 which is December 22, 1917;

“c.   Granting that the date December 22, 1917 is the date of a subdivision survey leading to the issuance of TCT Nos. 4210 and 4211, there are, however, no indications on the face of the titles themselves

which show that a verified and approved subdivision of Lot 26 took place.   In subdividing a lot, the resulting parcels are always designated by the lot number of the subdivided lot followed by letters of the alphabet starting from the letter ‘A’ to designate the first resultant lot, etc., for example, if Lot 26 is subdivided into three (3) lots, these lots will be referred to as Lot 26-A, Lot 26-N and Lot 26-C followed by a survey number such as ‘Psd-_____’ or ‘(LRC) Psd-_____’.   However, the lots on TCT Nos. 4210 and 4211 do not contain such descriptions.   In fact, the parcels of land covered by TCT Nos. 4210 and 4211 are not even described by lot number and this is again technically irregular and defective because the designation of lots by Lot Number was already a practice at that time as exemplified by the technical descriptions of some sub-lots covered by OCT-994, i.e., 23-A, 25-A, 25-D, etc.;

“d.  That TCT Nos. 4210 and 4211 which allegedly was the result of a subdivision of Lot 26 should not have been issued without a subdivision plan approved by the Director of Lands or the Chief of the General Land Registration Office.  Republic Act No. 496 which took effect on November 6, 1902, particularly Section 58 thereof, provided that the Registry of Deeds shall not enter the transfer certificate to the grantee until a plan of such land showing all the portions or lots into which it has been subdivided, and the technical description of each portion or lot, have been verified and approved by the Director of Lands…’ and as corroborated by Section 44, Paragraph 2, and that the plan has been approved by the Chief of the General Land Registration Office, or by the Director of Lands as provided in Section fifty-eight of this Act, the Registry of Deeds may issue new certificates of title for any lot in accordance with said subdivision plan’;

“e.  The absence of a lot number and survey plan number in the technical description inscribed on TCT Nos. 4210 and 4211 and the absence of a subdivision survey plan for Lot 26 at the records of the Bureau of Lands or the Land Registration Authority leads to the conclusion that there was no verified and approved subdivision survey plan of Lot 26 which is a compulsory requirement needed in the issuance of said titles;

“f.   Similarly, the absence of plan Psd-21154 from the files of the Bureau of Lands, the official depository of survey plans, is another indication that the titles covered by TCT Nos. 1368 thru 1374 which were derived from TCT No. 4211 are again doubtful and questionable;

“g.  Moreover, the changing of the tie points in the technical descriptions on TCT Nos. 1368 thru 1374 from that of the mother lot’s tie point which is BLLM No. 1, Caloocan City to different location monuments of adjoining Piedad Estate which resulted in the shifting of the position of the seven (7)

lots in relation to the mother lot defeats the very purpose of tie points and tie lines since the accepted practice is to adopt the mother lot’s tie point in order to fix the location of the parcels of land being surveyed on the earth’s surface.”[14]

 

Manotok Corporations then interposed an appeal to the Court of Appeals.  For its part, CLT Realty filed a motion to amend/correct the dispositive portion of the above Decision alleging that “TCT Nos. 4210 and 4211” mentioned therein are mistakenly referred to as the titles of Manotok Corporations; and that to conform to the body of the Decision, the correct numbers of the titles ordered to be cancelled should be indicated.   In its Order dated May 30, 1994, the trial court granted the motion, thus:

“WHEREFORE, premises considered, the Motion to Amend/Correct Judgment dated May 23, 1994 filed by counsel for plaintiff is granted.  Accordingly, the first paragraph of the dispositive portion of the Decision of this Court dated May 10, 1994 is amended as follows: 

          x x x 

“1.        Ordering the annulment and cancellation of Transfer Certificates of Title Nos. 7528, 7762, 8012, 9866, C-17272, 21107, 21485, 26405, 26406, 26407, 33904, 34255, C-35267, 41956, 53268, 55897, T-121428, 163902 and 165119 in the name of defendant Manotok Realty, Inc. and Transfer Certificate of Title No. T-232568 in the name of defendant Manotok Estate Corporation of the Registry of Deeds of Caloocan City which encroach on plaintiff’s 201,288 square meters of Lot No. 26 of the Maysilo Estate, Caloocan City.                                     x x x. “SO ORDERED.”

 

The Court of Appeals, in its Decision dated September 28, 1995 in CA-G.R. CV No. 45255, affirmed the Decision of the trial court, except as to the award of damages which was ordered deleted, thus:

“WHEREFORE, in view of the foregoing, judgment is hereby rendered AFFIRMING the Decision dated May 10, 1994, as corrected by the Order dated May 30, 1994, rendered by the trial court, with the modification that the award of damages in favor of plaintiff-appellee is hereby DELETED.

“No costs.

“SO ORDERED.”

  Manotok Corporations’ motion for reconsideration was denied by the Appellate Court in its Resolution dated January 8, 1996. Hence, the present petition of Manotok Corporations.    They allege in essence that the Court of Appeals erred: 

“1.  In upholding the trial court’s Decision which decided the case on the basis of the Commissioners’ Report; and  “2.   In giving imprimatur to the trial court’s Decision even though the latter overlooked relevant facts recited in the Minority Report of Commissioner Victorino and in        the comment of petitioners on the Majority Report of Commissioners San Buenaventura and Erive, detailing the legal and factual basis which positively support the validity of petitioners’ title and ownership of the disputed parcels of land.”  

2.        G.R. No. 134385 (Araneta Institute of Agriculture, Inc., petitioner, vs. Heirs of Jose B. Dimson, represented by his compulsory heirs: his surviving spouse, Roqueta R. Dimson and their children, Norma and Celso Tirado, Alson and Virginia Dimson, Linda and Carlos Lagman, Lerma and Rene Policar, and Esperanza R. Dimson; and Registry of Deeds of Malabon, respondents)

 Records show that on December 18, 1979, Jose B. Dimson filed with the then Court of First Instance of Rizal, Branch 33, Caloocan City a complaint for recovery of possession and damages against Araneta Institute of Agriculture, Inc. (Araneta Institute), docketed as Civil Case No. C-8050.   Dimson alleged in his amended complaint that he is the absolute owner of a parcel of land located at Barrio Potrero, Malabon, Metro Manila with an area of 50 hectares of the Maysilo Estate, covered by TCT No.  R-15169 of the Registry of Deeds of Caloocan City; that he discovered that his land has been illegally occupied by Araneta Institute; that the latter has no legal and valid title to the land; and that Araneta Institute refused to vacate the land and remove its improvements thereon despite his repeated demands.

In its answer, Araneta Institute admitted occupying the disputed land by constructing some buildings thereon and subdividing portions thereof, claiming that it  is the absolute owner

of the land by virtue of TCT No. 737[15] and TCT No. 13574.[16]   It further alleged that Dimson’s title of the subject land is void, hence, his complaint has no cause of action.

On May 28, 1993, the trial court rendered a Decision[17] in favor of  Dimson, thus:

“WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in favor of the plaintiff Jose B. Dimson and against defendant Araneta Institute of Agriculture, ordering –

“1)   defendant Araneta Institute of Agriculture and all those claiming rights and authority under the said defendant Araneta, to vacate the parcel of land covered by plaintiff Dimson’s title TCT No. R-15169 of the Registry of Deeds of Metro Manila, District III, Caloocan City, with a land area of 500,000 square meters, more or less; to remove all the improvements thereon; and to return full possession thereof to the said plaintiff Dimson.

“2)   defendant Araneta Institute of Agriculture to pay plaintiff Dimson the amount of P20,000.00 as and for attorney’s fees; and

“3)   defendant Araneta Institute of Agriculture to pay costs.

“Defendant Araneta’s counterclaim is hereby dismissed for lack of merit.

“All other counterclaim against plaintiff Dimson are, likewise, hereby dismissed for lack of merit.

“All claims of all the intervenors claiming rights against the title of plaintiff Dimson TCT R-15169 are hereby dismissed for lack of merit.

“This is without prejudice on the part of the intervenors Heirs of Pascual David, Florentina David and Crisanta Santos to file the proper case against the proper party/parties in the proper forum, if they so desire.

“The claim of Virgilio L. Enriquez as co-plaintiff in the instant case is dismissed for lack of merit.

“SO ORDERED.”[18]

 Araneta Institute interposed an appeal to the Court of Appeals, docketed as CA-G.R. CV No. 41883.

          On May 30, 1997, the Court of Appeals rendered the assailed Decision affirming the Decision of the trial court in favor of Dimson.

“WHEREFORE, premises considered, in CA-G.R. CV No. 41883 (Civil Case No. C-8050 of the Regional Trial Court, Branch 122, Caloocan City), with MODIFICATION deleting the award for attorney’s fees, the decision appealed from is AFFIRMED, with costs against defendant-appellant.   CA-G.R. SP No. 34819 is DENIED DUE COURSE and DISMISSED for lack of merit.

“SO ORDERED.”

  In its Decision, the Appellate Court ruled that the title of Araneta Institute to the disputed land is a nullity, holding that:

“We now proceed to CA-G.R. CV No. 41883.

“In its first assignment of error, defendant-appellant (Araneta Institute of Agriculture, Inc.) contends that the trial court erred in giving more weight to plaintiff’s transfer certificate of title over the land in question notwithstanding the highly dubious circumstances in which it was procured.

“This validity of plaintiff-appellee’s (Jose B. Dimson) title is actually the meat of the controversy.

“It was in the pursuit of this objective to nullify plaintiff-appellee’s title that CA-G.R. SP No. 34819 was belatedly filed on August 10, 1994, long after plaintiff-appellee’s TCT No. R-15169 was issued on June 8, 1978.

“Unfortunately for defendant-appellant, in the light of applicable law and jurisprudence, plaintiff-appellee’s title must be sustained.

“Plaintiff-appellee’s TCT No. R-15169 covers Lot 25- A-2 with an area of 500,000 square meters.  This was derived from OCT No. 994 registered on April 19, 1917.  TCT No. R-15169 was obtained by plaintiff-appellee Jose B. Dimson simultaneously with other titles, viz: TCT Nos. 15166, 15167, and 15168 by virtue of the Decision dated October 13, 1977 and Order dated October 18, 1977, in Special Proceedings No. C-732.   The Order dated October 18, 1977 directed the Registry of Deeds of Caloocan City to issue in the name of Jose B. Dimson separate transfer certificate of titles for the lot covered by plan (LRC) SWO-5268 and for the lots covered by the plans, Exhibits H, I and J.

“Upon the other hand, defendant-appellant Araneta Institute of Agriculture’s TCT No. 13574 was derived from TCT No. 26539, while TCT No. 7784 (now

TCT No. 21343) was derived from TCT No. 26538.   TCT No. 26538 and TCT No. 26539 were both issued in the name of Jose Rato.   TCT No. 26538 and TCT No. 26539 both show Decree No. 4429 and Record No. 4429.

“Decree No. 4429 was issued by the Court of First Instance of Isabela.   On the other hand, Record No. 4429 was issued for ordinary Land Registration Case on           March 31, 1911 in CLR No. 5898, Laguna (Exhs. 8, 8-A Rivera).  The trial court ruled defendant-appellant Araneta Institute of Agriculture’s TCT No. 13574 spurious because this title refers to a property in the Province of Isabela (RTC Decision, p. 19).

“Another point, Araneta’s TCT No. 13574 (Exh. 6) and 21343 are both derived from OCT No. 994 registered on May 3, 1917, which was declared null and void by the Supreme Court in Metropolitan Waterworks and Sewerage System vs. Court of Appeals , 215 SCRA 783 (1992 ).  The Supreme Court ruled: ‘Where two certificates of title purport to include the same land, the earlier in date prevails x x x.   Since the land in question has already been registered under OCT No. 994 dated April 19, 1917, the subsequent registration of the same land on May 3, 1919 is null and void.’

“In sum, the foregoing discussions unmistakably show two independent reasons why the title of defendant-appellant Araneta Institute of Agriculture is a nullity, to wit: the factual finding that the property in Isabela, and the decision of the Supreme Court in the MWSS case.”[19]

 

           Araneta Institute then filed the present petition, ascribing to the Court of Appeals a long list of factual errors which may be stated substantially as follows:

In CA-G.R. CV No. 41883

The Honorable Court of Appeals erred in not holding that the evidence presented by petitioner Araneta Institute clearly establish the fact that it has the better right of possession over the subject property than respondent Jose B. Dimson.

A.)                      There is only one Original Certificate of Title                       No. 994 covering the Maysilo Estate issued on May 3, 1917 pursuant to the Decree No. 36455 issued by the Court of Land Registration on April 17, 1917.

B.)                      Certifications of responsible government officials tasked to preserve the integrity of the Torrens System

categorically confirm and certify that there is only one OCT 994 issued on May 3, 1917.

C.)                     The Government in the exercise of its governmental function of preserving the integrity of the torrens system initiated a fact-finding inquiry to determine the circumstances surrounding the issuance of OCT No. 994 and its derivative titles.

D.)                     The Government fact-finding committee correctly found and concluded that there is only one OCT No. 994 issued on May 3, 1917.

E.)                      The Senate Committee on Justice and Human Rights and the Senate Committee on Urban Planning, Housing and Resettlement conducted an Investigation and concluded that there is only one OCT 994 that was issued on May 3, 1917.

F.)                      The certifications issued by the government officials, notably from the Land Registration Authority, the Department of Justice Committee Report and the Senate Committees’ Joint Report are all newly-discovered evidence that would warrant the holding of a new trial.”[20]

  

3.        G.R. No. 148767(Sto. Nino Kapitbahayan Association, Inc., petitioner, vs. CLT Realty Development Corporation, respondent)

         

CLT Realty is the registered owner of a parcel of land known as Lot 26 of the Maysilo Estate in Caloocan City, covered by TCT No. T-177013.[21]   It acquired the property on December 10, 1998 from the former registered owner Estelita I. Hipolito under TCT No. R-17994, who in turn, acquired it from Jose B. Dimson.

          On the other hand, Sto. Niño Kapitbahayan Association, Inc. (Sto. Niño Association), petitioner, is the registered owner of two parcels of land likewise located in Caloocan City, covered by TCT Nos. T-158373 and T-158374. By virtue of these titles, Sto. Niño Association occupied and claimed ownership over a portion of  Lot 26.

Thus, on July 9, 1992, CLT Realty filed with the Regional Trial Court, Branch 121, Caloocan City a complaint for annulment of titles[22] and recovery of possession with damages against Sto. Niño Association, docketed as Civil Case No.           C-15491.   In its

complaint, CLT Realty alleged that based on the technical descriptions on the titles of Sto. Niño Association, an overlapping exists between their respective titles; and that the titles of Sto. Niño Association are void as they are derived from TCT No. 4211, [23] a forged and fictitious title.

          In its answer, Sto. Niño Association denied the material allegations of the complaint and asserted that its members have been in possession of the disputed lots prior to 1987.    The area had been identified by the government as slum and blighted. 

At the pre-trial conference, the parties entered into a stipulation of facts, thus:

“(1)      Both parties admit that the defendant (Sto. Niño Association) is presently occupying the property covered by TCT Nos. 158373 and 158374 located at Barrio Baesa, Caloocan City; and

 (2)               Both parties admit that the plaintiff (CLT) is also the registered owner of the same properties being occupied by the defendant and covered by TCT No. 177013 of the Registry of Deeds of Caloocan City.”

  Resolving the issue of whose title to the disputed land is valid, the trial court, on September 28, 1995, rendered a Decision in favor of Sto. Niño Association and ordered the cancellation of TCT No. T-177013 in the name of CLT Realty.

          However, upon motion for reconsideration by CLT Realty, the trial court, in its Amended Decision dated February 12, 1996, granted the motion, rendered judgment in favor of CLT Realty, and ordered the cancellation of TCT Nos. T-158373 and              T-158374, both in the name of Sto. Niño Association, thus:

“WHEREFORE, premises considered, the Motion for Reconsideration is hereby GRANTED and judgment is accordingly rendered in favor of the plaintiff CLT REALTY DEVELOPMENT CORPORATION and against the defendant STO. NIÑO KAPITBAHAYAN ASSOCIATION, INC., ordering the cancellation of TCT Nos. T-158373 and   T-158374, both in the name of the defendant.   The defendants’ counterclaim is hereby dismissed for utter lack of merit.             “SO ORDERED.”[24]

   

The Amended Decision is anchored on the trial court’s finding that, based on the evidence, there was fraud in the issuance of TCT No. 4211 from which Sto. Niño Association’s titles were derived.   The irregularities which attended such issuance were discussed lengthily by the court a quo as follows: 

 

“The court finds the motion meritorious.

“The conflict stems from the fact that the plaintiff’s and defendants’ titles overlap each other, hence, a determination of the respective origins of such titles is of utmost importance.

“TCT No. T-177013 in the name of the plaintiff was derived from R-17994 T-89 in the name of Estelita Hipolito which title can trace its origin from OCT 994. The  boundaries of OCT 994 known as Lot No. 26 of the Maysilo Estate are the same as that of the plaintiff’s titles.

“On the other hand, TCT Nos. T-158373 and                       T-158374, both in the name of the defendants, are the latest in a series of titles which descend from TCT No. 4211.  A trace of the history of TCT No. 4211 reveals that it was succeeded by TCT No. 5261 which was in turn succeeded by TCT No. 35486.  TCT No. 35486 was allegedly subdivided into seven lots covered by TCT Nos. 1368 to 1374.  One or two of these subdivided lots were the predecessors of the defendants’ titles.

“It behooves this court to address the issue of whether or not TCT No. 4211 from which the defendants’ titles were originally derived can validly trace its origin from OCT 994.

“There is pervasive evidence that TCT No. 4211 could not have been a true derivative of OCT No. 994.

“Firstly, the survey dates indicated in OCT No. 994 are September 8-27, October 8-21 and November 17-18, all in the year 1911.   On the other hand, these dates of original survey are conspicuously missing in TCT No. 4211 contrary to established procedure that the original survey dates of the mother title should be indicated in succeeding titles.   Instead, an examination of TCT No. 4211 reveals a different date on its face.   This date, December 22, 1971, could not be an original survey date because it differs from those indicated in the mother title.   Of equal importance is the fact that the date of original survey always comes earlier than the date of the issuance of the mother title.   Since OCT No. 994 was issued on April 19, 1917, it is highly irregular that the original survey was made only several months later or only on December 22, 1917.

“Neither is the Court inclined to consider this date as the date a subdivision survey was made.   The regular procedure is to identify the subdivided lots by their respective survey or lot numbers, on the contrary, no such lot number is found in TCT No. 4211, pointing to the inevitable conclusion that OCT No. 994 was never validly subdivided into smaller lots, of which one of them is covered by TCT No. 4211.

“Secondly, the assertion that TCT Nos. 1368 to 1374 which preceded the defendants’ titles were issued pursuant to subdivision plan PSD 21154 is not supported by the evidence.  The Land Management Bureau which handles survey plans has no records of the said PSD 21154.   The Registry of Deeds of Rizal has a copy of the plan but the court finds such possession questionable since the Land Registration Authority which supervises the Registry of Deeds does not have a copy of the same.   The court therefore believes that the issuance of TCT Nos. 1368 to 1374 is attended by a serious irregularity which cannot be ignored as it affects the very validity of the alleged subdivisions of the land covered by TCT No. 35486.

“Thirdly, the language of the technical descriptions of the land covered by OCT No. 994 is already in English, while its alleged derivative titles TCT Nos. 4211, 5261 and 35486 are still in Spanish.   This is in direct violation of the practice that the language used in the mother title is adopted by all its derivative titles.   The reversion to Spanish in the derivative titles is highly intriguing and casts a cloud of doubt to the genuineness of such titles.

“Fourthly, the tie points used in the mother lot were not adopted by the alleged derivative titles particularly TCT Nos. 1368 to 1374, the immediate predecessors of the defendants’ titles.   The pivotal role of tie points cannot be brushed aside as a change thereof could result to the shifting of positions of the derivative lots in relation to the mother lot.   Consequently, overlapping could take place as in fact it did when the defendants’ titles overlapped that of CLT at the northwestern portion of the latter’s property.

“Fifthly, the results of laboratory analysis conducted by a Forensic Chemist of the NBI revealed that TCT Nos. 4210 and 4211 were estimated to be fifty (50) years old as of March 1993 when the examination was conducted.   Hence, the documents could have been prepared only in 1940 and not in 1918 as appearing on the face of TCT No. 4211.

“Based on the foregoing patent irregularities, the court finds the attendance of fraud in the issuance of TCT No. 4211 and all its derivative titles which preceded the defendants’ titles.   Evidently,

TCT No. 4211 cannot be validly traced from OCT No. 994.   Being void ab initio, it did not give rise to any transmissible rights with respect to the land purportedly invalid, and resultantly, the defendants, being the holders of the latest derivatives, cannot assert any right of ownership over the lands in question.  ‘The void ab initio land titles issued cannot ripen into private ownership.’  (Republic vs. Intermediate Appellate Court, 209 SCRA 90)

x x x

“The court’s findings are consistent with a ruling of the Court of Appeals in CA-GR No. 45255 entitled ‘CLT Realty Development Corp. vs. Manotok Realty, Inc., et al.’ promulgated on September 28, 1995, affirming the decision of the mother branch of this court ordering   the cancellation of TCT Nos. 4210 and 4211 which encroached on a specific area of Lot No. 26 of the Maysilo Estate, Caloocan City.   This court is also aware that on January 8, 1996, the Court of Appeals denied the Motion for Reconsideration of the defendants in the aforementioned case for lack of merit.”[25] (underscoring supplied)

          The above Amended Decision was affirmed by the Court of Appeals in its Decision dated May 23, 2001 in CA-G.R. CV No. 52549, thus:

 “WHEREFORE, finding no reversible error in the appealed Decision, We AFFIRM the same. Without pronouncement as to costs.             “SO ORDERED.”[26]

   

          Hence, the present petition based on the following          assigned errors: “1.        THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING IN TOTO THE AMENDED DECISION OF THE COURT A QUO. “2.        THE JUDGMENT OF THE HONORABLE COURT OF APPEALS IS PREMISED ON THE MISAPPREHENSION OF FACTS OF THE COURT A QUO. “3.        ASSUMING ARGUENDO, WITHOUT NECESSARILY ADMITTING THAT THE ARGUMENTS OF APPELLANT ARE UNAVAILING, THERE ARE SUPERVENING FACTS AND EVENTS, SHOULD THIS HONORABLE COURT CONSIDER THE SAME, THAT WOULD WARRANT THE REVERSAL OF THE

CHALLENGED DECISION AND WILL IMPEL A DIFFERENT CONCLUSION.”[27]

                    In sum, the three instant petitions assail the validity of: (1) TCT No. R-15169 of the Registry of Deeds of Caloocan City in the name of Jose B. Dimson, covering Lot 25-A-2 of the Maysilo Estate;[28] and (2) TCT No. T-177013 of the same Registry of Deeds in the name of CLT Development Corporation, covering Lot 26, also of the Maysilo Estate.[29]

          In the meantime, petitioners Manotok filed with this Court two separate Manifestations stating that a (1) Report of the Fact-Finding Committee dated August 28, 1997 composed of the Department of Justice (DOJ), Land Registration Authority and the Office of the Solicitor General, and (2) Senate Committee Report No. 1031 dated May 25, 1998 were issued by the DOJ and the Senate.   Both reports conclude that there is only one OCT No. 994 issued, transcribed and registered on May 3, 1917.

          The respondents in these cases vehemently opposed the said Manifestations alleging, among others, that the same are “nothing but a crude attempt to circumvent and ignore time-honored judicial procedures and sabotage the orderly administration of justice by using alleged findings in the alleged reports prepared by the DOJ and the Senate Committee that were never presented before the trial courts to obtain a reversal of the questioned Decisions.   At the very least, said procedure is highly irregular, improper and contrary to the dictates of due process.”[30]

Summary of the Contentions of the Parties  

I.                                                                                                                         G.R. No. 123346

Petitioners Manotok Corporations mainly contend that the Court of Appeals erred in affirming the lower court’s Decision which was rendered without conducting trial for the reception of evidence.  It merely relied on the technical report of the commissioners appointed by the court based on the parties’ nomination.   They (petitioners) were thus denied due process as they were not able to present evidence in a full-blown trial.

          Respondent CLT Realty, on the other hand, maintains that the factual findings of the commissioners are supported by evidence.   The contending parties were accorded due process because they submitted their respective evidence to the commissioners in the course of the proceedings.   The same evidence became the basis of their Majority

and Minority Reports.   The two Reports were later heard and passed upon by the trial court.

          Respondent CLT Realty adds that the Decision of the trial court, upheld by the Court of Appeals, complies with the requirement of Section 14, Article VIII of the Constitution since it clearly and distinctly expresses the facts and the law upon which it is based.  

                                      II.      G.R. 134385           Petitioner Araneta Institute basically submits that the case of MWSS vs. CA[31] cited in the Decision dated May 30, 1997 of the Court of Appeals is inapplicable to the present case.   In that case, it upheld TCT No. 15167 of Dimson derived from OCT 994 issued and registered earlier, or on April 19, 1917.   Whereas, the MWSS’ title was derived from OCT 994 issued and registered later, or on May 3, 1917.    The Appellate Court erred when it relied on MWSS vs. CA.[32]

On the other hand, respondents heirs of Dimson counter that the validity of Dimson’s title, TCT No. 15167, has been upheld by this Court in MWSS case. 

III.     G.R. No. 148767

 

           Like petitioner Araneta Institute in G.R. No. 134385 and petitioners Manotok Corporations in G.R. No. 123346, petitioner Sto. Niño Association contends that there are supervening facts and events that transpired after the trial court rendered its Amended Decision that if considered will result in a different conclusion.   These are the two Reports of the DOJ and Senate Fact-Finding Committees that there is only one OCT No. 994 issued on May 3, 1917.   Thus, with a new trial, and with the presentation of these Reports as evidence, it could be shown that the titles of Jose Dimson and CLT Realty are void.

 

Ruling of the Court            The present petitions must fail.

At the outset, it bears stressing that under Rule 45 of the 1997 Rules of Civil Procedure, as amended, our jurisdiction over cases brought to us from the Court of Appeals is

limited to reviewing and correcting errors of lawcommitted by said court.   The Supreme Court is not a trier of facts.   Thus, it is not our function to review factual issues and examine, evaluate or weigh the probative value of the evidence presented by the parties.[33]   We are not bound to analyze and weigh all over again the evidence already considered in the proceedings below.[34]

Here, the paramount question being raised in the three petitions is whetherTCT No. 15169 issued in the name of Jose B. Dimson and TCT No. 177013issued in the name of CLT are valid.   Undoubtedly, such issue is a purequestion of fact – a matter beyond our power to determine.   Where, as here, the findings of fact of the trial courts are affirmed by the Court of Appeals, the same are accorded the highest degree of respect and, generally, will not be disturbed on appeal.   Such findings are binding and conclusive on this Court.[35]

Be that as it may, to reinforce our conclusion, we shall still proceed to discuss why the present petitions have no merit.

As regards G.R. No. 123346 (Manotok Corporations vs. CLT Realty,involving Lot 26), the trial court acted properly when it adopted the Majority Report of the commissioners as part and parcel of its Decision.   That is allowed in Section 11, Rule 32 of the Revised Rules of Court (now the 1997 Rules of Civil Procedure, as amended), quoted below: 

“SEC. 11.       Hearing upon report. – Upon the expiration of the period of ten (10) days referred to in the preceding section, the report shall be set for hearing, after which the court shall render judgment by adopting, modifying, or rejecting the report in whole or in part or it may receive further evidence or may recommit it with instructions.” (underscoring supplied)

            The case of overlapping of titles necessitates the assistance of experts in the field of geodetic engineering.   The very reason why commissioners were appointed by the trial court, upon agreement of the parties, was precisely to make an evaluation and analysis of the titles in conflict with each other.  Given their background, expertise and experience, these commissioners are in a better position to determine which of the titles is valid.   Thus, the trial court may rely on their findings and conclusions. 

          It bears stressing that the parties opted to submit the case               for decision on the bases, among others, of their respective objections/comments on the commissioners’ reports.    

Thus, petitioners Manotok Corporations, under the doctrine of estoppel, cannot now be permitted to assail the Decision of the trial court – which turned out to be adverse to them – and insist that it should have conducted further reception of evidence before rendering its judgment on the case.  

We note further that while petitioners assail the trial court’s Decision as being premature, however, they also assert that the said court should have adopted the Minority Report which is favorable to them.   Certainly, we cannot countenance their act of adopting inconsistent postures as this is a mockery of justice.

We noted in the beginning of this Decision that the issue in all these three (3) cases involves the validity of the parties’ overlapping titles.   The titles of the respondents in these cases were derived from OCT No. 994 of the Registry of Deeds of Caloocan City registered on April 19, 1917.   The validity of such mother title has already been upheld by this Court in G.R. No. 103558, MWSS vs. Court of Appeals, et al. dated November 17, 1992[36] earlier cited in the assailed Decisions.   Significantly, the ruling in MWSS  was reiterated in G.R. No. 96259, Heirs of Luis J. Gonzaga vs. Court of Appeals dated September 3, 1996.[37]   

          We cannot delve anymore into the correctness of the Decision of this Court inMWSS.   The said Decision, confirming the validity of OCT No. 994 issued on April 19, 1917 from which the titles of the respondents in the cases at bar were derived, has long become final and executory.   Nothing is more settled in law than that once a judgment attains finality it becomes immutable and unalterable.   It may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land.[38]   

The doctrine of finality of judgment is grounded on fundamental considerations of public policy and sound practice, and that, at the risk of occasional errors, the judgments or orders of courts must become final at some definite time fixed by law; otherwise, there would be no end to litigations, thus setting to naught the main role of courts of justice which is to assist in the enforcement of the rule of law and the maintenance of peace and order by settling justiciable controversies with finality.[39]

Just as the losing party has the right to file an appeal within the prescribed period, the winning party likewise has the correlative right to enjoy the finality of the resolution of his case.   We held that "a final judgment vests in the prevailing party a right recognized and protected by law under the due process clause of the Constitution. . . .   A final judgment is ‘a vested interest which it is right and equitable that the government should recognize and protect, and of which the individual could not be deprived arbitrarily without injustice.’"[40]   In the present

cases, the winning parties, respondents herein, must not be deprived of the fruits of a final verdict. 

Finally, we cannot consider the alleged newly-discovered evidence consisting of the DOJ and Senate Fact-Finding Committee Reports invoked by petitioners herein.   Certainly, such committee reports cannot override the Decisions of the trial courts and the Court of Appeals upholding the validity of respondents’ titles in these cases.   The said Decisions were rendered after the opposing parties have been accorded due process.   It bears stressing that the courts have the constitutional duty to adjudicate legal disputes properly brought before them.   The DOJ and Senate, or any other agencies of the Government for that matter, have clearly distinguishable roles from that of the Judiciary.   Just as overlapping of titles of lands is abhorred, so is the overlapping of findings of facts among the different branches and agencies of the Government.   This we unmistakably stressed in Agan, Jr., et al. vs. Philippine International Air Terminals Co., Inc., et al,[41]   thus:

          “Finally, the respondent Congressmen assert that at least two (2) committee reports by the House of Representatives found the PIATCO contracts valid and contend that this Court, by taking cognizance of the cases at bar, reviewed an action of a co-equal body.  They insist that the Court must respect the findings of the said committees of the House of Representatives.  With due respect, we cannot subscribe to their submission. There is a fundamental difference between a case in court and an investigation of a congressional committee.  The purpose of a judicial proceeding is to settle the dispute in controversy by adjudicating the legal rights and obligations of the parties to the case.   On the other hand, a congressional investigation is conducted in aid of legislation (Arnault vs. Nazareno, G.R. No. L-3820, July 18, 1950).  Its aim is to assist and recommend to the legislature a possible action that the body may take with regard to a particular issue, specifically as to whether or not to enact a new law or amend an existing one.   Consequently, this Court cannot treat the findings in a congressional committee report as binding because the facts elicited in congressional hearings are not subject to the rigors of the Rules of Court on admissibility of evidence.  The Court in assuming jurisdiction over the petitions at bar simply performed its constitutional duty as the arbiter of legal disputes properly brought before it, especially in this instance when public interest requires nothing less.”  (Underscoring supplied)       

WHEREFORE, the instant petitions are DENIED and the assailed Decisions and Resolutions of the Court of Appeals are hereby AFFIRMED intoto.   Costs against petitioners.

          SO ORDERED.

G.R. No. 148225               March 3, 2010

CARMEN DEL PRADO, Petitioner, vs.SPOUSES ANTONIO L. CABALLERO and LEONARDA CABALLERO, Respondents.

D E C I S I O N

NACHURA, J.:

This is a petition for review on certiorari of the decision1 of the Court of Appeals (CA) dated September 26, 2000 and its resolution denying the motion for reconsideration thereof.

The facts are as follows:

In a judgment rendered on February 1, 1985 in Cadastral Case No. N-6 (LRC Rec. No. N-611), Judge Juan Y. Reyes of the Regional Trial Court (RTC) of Cebu City, Branch 14, adjudicated in favor of Spouses Antonio L. Caballero and Leonarda B. Caballero several parcels of land situated in Guba, Cebu City, one of which was Cadastral Lot No. 11909, the subject of this controversy.2 On May 21, 1987, Antonio Caballero moved for the issuance of the final decree of registration for their lots.3 Consequently, on May 25, 1987, the same court, through then Presiding Judge Renato C. Dacudao, ordered the National Land Titles and Deeds Registration Administration to issue the decree of registration and the corresponding titles of the lots in favor of the Caballeros.4

On June 11, 1990, respondents sold to petitioner, Carmen del Prado, Lot No. 11909 on the basis of the tax declaration covering the property. The pertinent portion of the deed of sale reads as follows:

That we, Spouses ANTONIO L. CABALLERO and LEONARDA B. CABALLERO, Filipinos, both of legal age and residents of Talamban, Cebu City, Philippines, for and in consideration of the sum of FORTY THOUSAND PESOS (P40,000.00), Philippine Currency, paid by CARMEN DEL PRADO, Filipino, of legal age, single and a resident of Sikatuna St., Cebu City, Philippines, the receipt of which is full is hereby acknowledged, do by these presents SELL, CEDE, TRANSFER, ASSIGN & CONVEY unto the said CARMEN DEL PRADO, her heirs, assigns and/or successors-in-interest, one (1) unregistered parcel of land, situated at Guba, Cebu City, Philippines, and more particularly described and bounded, as follows:

"A parcel of land known as Cad. Lot No. 11909, bounded as follows:

North : Lot 11903

East : Lot 11908

West : Lot 11910

South : Lot 11858 & 11912

containing an area of 4,000 square meters, more or less, covered by Tax Dec. No. 00787 of the Cebu City Assessor’s Office, Cebu City." of which parcel of land we are the absolute and lawful owners.

Original Certificate of Title (OCT) No. 1305, covering Lot No. 11909, was issued only on November 15, 1990, and entered in the "Registration Book" of the City of Cebu on December 19, 1990.5 Therein, the technical description of Lot No. 11909 states that said lot measures about 14,457 square meters, more or less.6

On March 20, 1991, petitioner filed in the same cadastral proceedings a "Petition for Registration of Document Under Presidential Decree (P.D.) 1529"7 in order that a certificate of title be issued in her name, covering the whole Lot No. 11909. In the petition, petitioner alleged that the tenor of the instrument of sale indicated that the sale was for a lump sum or cuerpo cierto, in which case, the vendor was bound to deliver all that was included within said boundaries even when it exceeded the area specified in the contract. Respondents opposed, on the main ground that only 4,000 sq m of Lot No. 11909 was sold to petitioner. They claimed that the sale was not for a cuerpo cierto. They moved for the outright dismissal of the petition on grounds of prescription and lack of jurisdiction.

After trial on the merits, the court found that petitioner had established a clear and positive right to Lot No. 11909. The intended sale between the parties was for a lump sum, since there was no evidence presented that the property was sold for a price per unit. It was apparent that the subject matter of the sale was the parcel of land, known as Cadastral Lot No. 11909, and not only a portion thereof.8

Thus, on August 2, 1993, the court a quo rendered its decision with the following dispositive portion:

WHEREFORE, premises considered, the petition is hereby granted and judgment is hereby rendered in favor of herein petitioner. The Register of Deeds of the City of Cebu is hereby ordered and directed to effect the registration in his office of the Deed of Absolute Sale between Spouses Antonio Caballero and Leonarda Caballero and Petitioner, Carmen del Prado dated June 11, 1990 covering Lot No. 11909 after payment of all fees prescribed by law. Additionally, the Register of Deeds of the City of Cebu is hereby ordered to cancel Original Certificate No. 1305 in the name of Antonio Caballero and Leonarda Caballero and the Transfer Certificate of Title be issued in the name of Petitioner Carmen del Prado covering the entire parcel of land known as Cadastral Lot No. 11909.9

An appeal was duly filed. On September 26, 2000, the CA promulgated the assailed decision, reversing and setting aside the decision of the RTC.

The CA no longer touched on the character of the sale, because it found that petitioner availed herself of an improper remedy. The "petition for registration of document" is not one of the remedies provided under P.D. No. 1529, after the original registration has been effected. Thus, the CA ruled that the lower court committed an error when it assumed jurisdiction over the petition, which prayed for a remedy not sanctioned under the Property Registration Decree. Accordingly, the CA disposed, as follows:

IN VIEW OF ALL THE FOREGOING, the appealed decision is REVERSED and SET ASIDE and a new one entered dismissing the petition for lack of jurisdiction. No pronouncement as to costs.10

Aggrieved, petitioner filed the instant petition, raising the following issues:

I. WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRAVE ERROR IN MAKING FINDINGS OF FACT CONTRARY TO THAT OF THE TRIAL COURT[;]

II. WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRAVE ERROR IN FAILING TO RULE THAT THE SALE OF THE LOT IS FOR A LUMP SUM OR CUERPO CIERTO[;]

III. WHETHER OR NOT THE COURT A QUO HAS JURISDICTION OVER THE PETITION FOR REGISTRATION OF THE DEED OF ABSOLUTE SALE DATED 11 JUNE 1990 EXECUTED BETWEEN HEREIN PETITIONER AND RESPONDENTS[.]11

The core issue in this case is whether or not the sale of the land was for a lump sum or not.

Petitioner asserts that the plain language of the Deed of Sale shows that it is a sale of a real estate for a lump sum, governed under Article 1542 of the Civil Code.12 In the contract, it was stated that the land contains an area of 4,000 sq m more or less, bounded on the North by Lot No. 11903, on the East by Lot No. 11908, on the South by Lot Nos. 11858 & 11912, and on the West by Lot No. 11910. When the OCT was issued, the area of Lot No. 11909 was declared to be 14,475 sq m, with an excess of 10,475 sq m. In accordance with Article 1542, respondents are, therefore, duty-bound to deliver the whole area within the boundaries stated, without any corresponding increase in the price. Thus, petitioner concludes that she is entitled to have the certificate of title, covering the whole Lot No. 11909, which was originally issued in the names of respondents, transferred to her name.

We do not agree.

In Esguerra v. Trinidad,13 the Court had occasion to discuss the matter of sales involving real estates. The Court’s pronouncement is quite instructive:

In sales involving real estate, the parties may choose between two types of pricing agreement: a unit price contract wherein the purchase price is determined by way of reference to a stated rate per unit area (e.g., P1,000 per square meter), or a lump sum contract which states a full purchase price for an immovable the area of which may be declared based on the estimate or where both the area and boundaries are stated (e.g., P1 million for 1,000 square meters, etc.). In Rudolf Lietz, Inc. v. Court of Appeals (478 SCRA 451), the Court discussed the distinction:

"…In a unit price contract, the statement of area of immovable is not conclusive and the price may be reduced or increased depending on the area actually delivered. If the vendor delivers less than the area agreed upon, the vendee may oblige the vendor to deliver all that may be stated in the contract or demand for the proportionate reduction of the purchase price if delivery is not possible. If the vendor delivers more than the area stated in the contract, the vendee has the option to accept only the amount agreed upon or to accept the whole area, provided he pays for the additional area at the contract rate.

x x x x

In the case where the area of an immovable is stated in the contract based on an estimate, the actual area delivered may not measure up exactly with the area stated in the contract. According to Article 1542 of the Civil Code, in the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or number, there shall be no increase or decrease of the price, although there be a greater or less areas or number than that stated in the contract. . . .

x x x x

Where both the area and the boundaries of the immovable are declared, the area covered within the boundaries of the immovable prevails over the stated area. In cases of conflict between areas and boundaries, it is the latter which should prevail. What really defines a piece of ground is not the area, calculated with more or less certainty, mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating its limits. In a contract of sale of land in a mass, it is well established that the specific boundaries stated in the contract must control over any statement with respect to the area contained within its boundaries. It is not of vital consequence that a deed or contract of sale of land should disclose the area with mathematical accuracy. It is sufficient if its extent is objectively indicated with sufficient precision to enable one to identify it. An error as to the superficial area is immaterial. Thus, the obligation of the vendor is to deliver everything within the boundaries, inasmuch as it is the entirety thereof that distinguishes the determinate object.14

The Court, however, clarified that the rule laid down in Article 1542 is not hard and fast and admits of an exception. It held:

A caveat is in order, however. The use of "more or less" or similar words in designating quantity covers only a reasonable excess or deficiency. A vendee of land sold in gross or

with the description "more or less" with reference to its area does not thereby ipso facto take all risk of quantity in the land..

Numerical data are not of course the sole gauge of unreasonableness of the excess or deficiency in area. Courts must consider a host of other factors. In one case (see Roble v. Arbasa, 414 Phil. 343 [2001]), the Court found substantial discrepancy in area due to contemporaneous circumstances. Citing change in the physical nature of the property, it was therein established that the excess area at the southern portion was a product of reclamation, which explained why the land’s technical description in the deed of sale indicated the seashore as its southern boundary, hence, the inclusion of the reclaimed area was declared unreasonable.15

In the instant case, the deed of sale is not one of a unit price contract. The parties agreed on the purchase price of P40,000.00 for a predetermined area of 4,000 sq m, more or less, bounded on the North by Lot No. 11903, on the East by Lot No. 11908, on the South by Lot Nos. 11858 & 11912, and on the West by Lot No. 11910. In a contract of sale of land in a mass, the specific boundaries stated in the contract must control over any other statement, with respect to the area contained within its boundaries.161avvphi1

Black’s Law Dictionary17 defines the phrase "more or less" to mean:

About; substantially; or approximately; implying that both parties assume the risk of any ordinary discrepancy. The words are intended to cover slight or unimportant inaccuracies in quantity, Carter v. Finch, 186 Ark. 954, 57 S.W.2d 408; and are ordinarily to be interpreted as taking care of unsubstantial differences or differences of small importance compared to the whole number of items transferred.

Clearly, the discrepancy of 10,475 sq m cannot be considered a slight difference in quantity. The difference in the area is obviously sizeable and too substantial to be overlooked. It is not a reasonable excess or deficiency that should be deemed included in the deed of sale.

We take exception to the avowed rule that this Court is not a trier of facts. After an assiduous scrutiny of the records, we lend credence to respondents’ claim that they intended to sell only 4,000 sq m of the whole Lot No. 11909, contrary to the findings of the lower court. The records reveal that when the parties made an ocular inspection, petitioner specifically pointed to that portion of the lot, which she preferred to purchase, since there were mango trees planted and a deep well thereon. After the sale, respondents delivered and segregated the area of 4,000 sq m in favor of petitioner by fencing off the area of 10,475 sq m belonging to them.18

Contracts are the law between the contracting parties. Sale, by its very nature, is a consensual contract, because it is perfected by mere consent. The essential elements of a contract of sale are the following: (a) consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price; (b) determinate subject matter; and (c)

price certain in money or its equivalent. All these elements are present in the instant case.19

More importantly, we find no reversible error in the decision of the CA. Petitioner’s recourse, by filing the petition for registration in the same cadastral case, was improper. It is a fundamental principle in land registration that a certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein. Such indefeasibility commences after one year from the date of entry of the decree of registration.20 Inasmuch as the petition for registration of document did not interrupt the running of the period to file the appropriate petition for review and considering that the prescribed one-year period had long since expired, the decree of registration, as well as the certificate of title issued in favor of respondents, had become incontrovertible.21

WHEREFORE, the petition is DENIED.

SO ORDERED.

ANTONIO EDUARDO B. NACHURAAssociate Justice

SECOND DIVISION

G.R. No. 169890             March 12, 2007

FELICIANO ESGUERRA, CANUTO ESGUERRA, JUSTA ESGUERRA, ANGEL ESGUERRA, FIDELA ESGUERRA, CLARA ESGUERRA, and PEDRO ESGUERRA, Petitioners, vs.VIRGINIA TRINIDAD, PRIMITIVA TRINIDAD, and THE REGISTER OF DEEDS OF MEYCAUAYAN, BULACAN, Respondents.

D E C I S I O N

CARPIO MORALES, J.:

Involved in the present controversy are two parcels of land located in Camalig, Meycauayan, Bulacan.

Felipe Esguerra and Praxedes de Vera (Esguerra spouses) were the owners of several parcels of land in Camalig, Meycauayan, Bulacan – among them a 35,284-square meter parcel of land covered by Tax Declaration No. 10374, half of which (17,642 square meters) they sold to their grandchildren, herein petitioners Feliciano, Canuto, Justa, Angel, Fidela, Clara and Pedro, all surnamed Esguerra; and a 23,989-square meter

parcel of land covered by Tax Declaration No. 12080, 23,489 square meters of which they also sold to petitioners, and the remaining 500 square meters they sold to their other grandchildren, the brothers Eulalio and Julian Trinidad (Trinidad brothers).

Also sold to the Trinidad brothers were a 7,048-square meter parcel of land covered by Tax Declaration No. 9059, a 4,618-square meter parcel of land covered by Tax Declaration No. 12081, and a 768-square meter parcel of land covered by Tax Declaration No. 13989.

The Esguerra spouses executed the necessary Deed of Sale in favor of petitioners on August 11, 1937,1 and that in favor of the Trinidad brothers on August 17, 1937.2 Both documents were executed before notary public Maximo Abaño.

Eulalio Trinidad later sold his share of the land to his daughters-respondents herein, via a notarized Kasulatan ng Bilihang Tuluyan ng Lupa3 dated October 13, 1965. A portion of the land consisting of 1,693 square meters was later assigned Lot No. 3593 during a cadastral survey conducted in the late 1960s.

On respondents’ application for registration of title, the then Court of First Instance (CFI) of Bulacan, by Decision4 of February 20, 1967, awarded Lot No. 3593 in their favor in Land Registration Case No. N-323-V. Pursuant to the Decision, the Land Registration Commission (LRC, now the Land Registration Authority [LRA]) issued Decree No. N-114039 by virtue of which the Register of Deeds of Bulacan issued OCT No. 0-36315 in the name of respondents.

Meanwhile, under a notarized Bilihan ng Lupa6 dated November 10, 1958, petitioners sold to respondents’ parents Eulalio Trinidad and Damiana Rodeadilla (Trinidad spouses) a portion of about 5,000 square meters of the 23,489-square meter of land which they previously acquired from the Esguerra spouses.7

During the same cadastral survey conducted in the late 1960s, it was discovered that the about 5,000-square meter portion of petitioners’ parcel of land sold to the Trinidad spouses which was assigned Lot No. 3591 actually measured 6,268 square meters.

In a subsequent application for registration of title over Lot No. 3591, docketed as Land Registration Case No. N-335-V, the CFI, by Decision8 of August 21, 1972, awarded Lot No. 3591 in favor of Eulalio Trinidad. Pursuant to the Decision, the LRC issued Decree No. N-149491 by virtue of which the Register of Deeds of Bulacan issued OCT No. 0-64989 in the name of Trinidad.

Upon the death of the Trinidad spouses, Lot No. 3591 covered by OCT No. 0-6498 was transmitted to respondents by succession.

Petitioners, alleging that upon verification with the LRA they discovered the issuance of the above-stated two OCTs, filed on August 29, 1994 before the Regional Trial Court

(RTC) of Malolos, Bulacan two separate complaints for their nullification on the ground that they were procured through fraud or misrepresentation.

In the first complaint, docketed as Civil Case No. 737-M-94, petitioners sought the cancellation of OCT No. 0-3631.

In the other complaint, docketed as Civil Case No. 738-M-94, petitioners sought the cancellation of OCT No. 0-6498.

Both cases were consolidated and tried before Branch 79 of the RTC which, after trial, dismissed the cases by Joint Decision10 of May 15, 1997.

Their appeal with the Court of Appeals having been dismissed by Decision of February 28, 2005, a reconsideration of which was, by Resolution of October 3, 2005,11 denied, petitioners filed the instant petition.

Petitioners fault the appellate court

1. . . . in misappreciating the fact that the act of the respondent Eulalio Trinidad in acquiring the property from Felipe Esguerra constituted fraud.

2. . . . in the [i]nterpretation and application of the provisions of Article 1542 of the New Civil Code.

3. . . . in ruling that there is prescription, res judicata, and violation of the non-[forum] shopping.12

In their Comment, respondents assailed the petition as lacking verification and certification against forum shopping and failing to attach to it an affidavit of service and material portions of the record in support thereof. Petitioners counter that the procedural deficiencies have been mooted by the filing of a Compliance.

A check of the rollo shows that attached to the petition are an Affidavit of Service dated November 21, 2005 and the appellate court’s Decision of February 28, 2005 and Resolution of October 3, 2005; and that on January 16, 2006 or almost three months following the last day to file the petition, petitioners submitted, not at their own instance,13 a Verification and Sworn Certification on Non-Forum Shopping signed by petitioner Pedro Esguerra who cited honest and excusable mistake behind the omission to submit the same.

This Court has strictly enforced the requirement of verification and certification, obedience to which and to other procedural rules is needed if fair results are to be expected therefrom.14 While exceptional cases have been considered to correct patent injustice concomitant to a liberal application of the rules of procedure, there should be an effort on the part of the party invoking liberality to advance a reasonable or

meritorious explanation for his failure to comply with the rules.15 In petitioners’ case, no such explanation has been advanced.

With regard to petitioners’ failure to attach material portions of the record in support of the petition, this requirement is not a mere technicality but an essential requisite for the determination of prima facie basis for giving due course to the petition.16 As a rule, a petition which lacks copies of essential pleadings and portions of the case record may be dismissed. Much discretion is left to the reviewing court, however, to determine the necessity for such copies as the exact nature of the pleadings and portions of the case record which must accompany a petition is not specified.17

At all events, technicality aside, the petition must be denied.

It is settled that fraud is a question of fact and the circumstances constituting the same must be alleged and proved in the court below.18

In the present cases, as did the trial court, the appellate court found no fraud in respondents’ acquisition and registration of the land, viz:

. . . Appellant Pedro Esguerra even testified that he does not know how appellees were able to secure a title over the lot in question and that they never sold Lot No. 3593 to Virginia Trinidad since it is part of the whole lot of 23,489 square meters. The said testimony is a mere conclusion on the part of appellants. On the other hand, the evidence shows that appellees acquired title over the subject property by virtue of a deed of sale executed by their father Eulalio Trinidad in their favor.

x x x x

[T]hey failed to establish that appellees’ acquisition of the certificate of title is fraudulent. In fact, in their two complaints, appellants acknowledged that appellees observed and took the initial procedural steps in the registration of the land, thus ruling out fraud in the acquisition of the certificate of title. . . .19

Factual findings of the trial court, when affirmed by the Court of Appeals, are final, conclusive and binding on this Court,20 which is not a trier of facts,21 hence, bereft of function under Rule 45 to examine and weigh the probative value of the evidence presented,22 its jurisdiction being limited only to the review and revision of errors of law.23Albeit there are exceptions24 to this rule, the cases at bar do not fall thereunder, there being no showing that the trial and appellate courts overlooked matters which, if considered, would alter their outcome.

Under the Torrens System, an OCT enjoys a presumption of validity, which correlatively carries a strong presumption that the provisions of the law governing the registration of land which led to its issuance have been duly followed.25 Fraud being a serious charge, it must be supported by clear and convincing proof.26 Petitioners failed to discharge the burden of proof, however.

On the questioned interpretation and application by the appellate court of Article 1542 of the Civil Code reading:

In the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or number, there shall be no increase or decrease of the price, although there be a greater or less areas or number than that stated in the contract.

The same rule shall be applied when two or more immovables are sold for a single price; but if, besides mentioning the boundaries, which is indispensable in every conveyance of real estate, its area or number should be designated in the contract, the vendor shall be bound to deliver all that is included within said boundaries, even when it exceeds the area or number specified in the contract; and, should he not be able to do so, he shall suffer a reduction in the price, in proportion to what is lacking in the area or number, unless the contract is rescinded because the vendee does not accede to the failure to deliver what has been stipulated. (Emphasis and underscoring supplied),

while petitioners admittedly sold Lot No. 3591 to the Trinidad spouses, they contend that what they sold were only 5,000 square meters and not 6,268 square meters, and thus claim the excess of 1,268 square meters.

In sales involving real estate, the parties may choose between two types of pricing agreement: a unit price contract wherein the purchase price is determined by way of reference to a stated rate per unit area (e.g., P1,000 per square meter), or a lump sum contract which states a full purchase price for an immovable the area of which may be declared based on an estimate or where both the area and boundaries are stated (e.g., P1 million for 1,000 square meters, etc.). In Rudolf Lietz, Inc. v. Court of Appeals,27 the Court discussed the distinction:

. . . In a unit price contract, the statement of area of immovable is not conclusive and the price may be reduced or increased depending on the area actually delivered. If the vendor delivers less than the area agreed upon, the vendee may oblige the vendor to deliver all that may be stated in the contract or demand for the proportionate reduction of the purchase price if delivery is not possible. If the vendor delivers more than the area stated in the contract, the vendee has the option to accept only the amount agreed upon or to accept the whole area, provided he pays for the additional area at the contract rate.

x x x x

In the case where the area of the immovable is stated in the contract based on an estimate, the actual area delivered may not measure up exactly with the area stated in the contract. According to Article 1542 of the Civil Code, in the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or number, there shall be no increase or decrease of the price, although there be a greater or less areas or number than that stated in the contract. . . .

x x x x

Where both the area and the boundaries of the immovable are declared, the area covered within the boundaries of the immovable prevails over the stated area. In cases of conflict between areas and boundaries, it is the latter which should prevail. What really defines a piece of ground is not the area, calculated with more or less certainty, mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating its limits. In a contract of sale of land in a mass, it is well established that the specific boundaries stated in the contract must control over any statement with respect to the area contained within its boundaries. It is not of vital consequence that a deed or contract of sale of land should disclose the area with mathematical accuracy. It is sufficient if its extent is objectively indicated with sufficient precision to enable one to identify it. An error as to the superficial area is immaterial. Thus, the obligation of the vendor is to deliver everything within the boundaries, inasmuch as it is the entirety thereof that distinguishes the determinate object.28 (Emphasis and underscoring supplied)

The courts below correctly characterized the sale of Lot No. 3591 as one involving a lump sum contract. The Bilihan ng Lupa shows that the parties agreed on the purchase price ofP1,000.00 on a predetermined, albeit unsurveyed, area of 5,000 square meters and not on a particular rate per unit area. As noted by the Court of Appeals, the identity of the realty was sufficiently described as riceland:

It is clear from the afore-quoted Bilihan ng Lupa that what appellants sold to Eulalio was the "bahaging palayan." Though measured as 5,000 square meters, more or less, such measurement is only an approximation, and not an exact measurement. Moreover, we take note of the fact that the said deed of sale mentioned the boundaries covering the whole area of 33,489 square meters, including the "bahaging palayan." Had appellants intended to sell only a portion of the "bahaging palayan," they could have stated the specific area in the deed of sale and not the entire "bahaging palayan" . . . .29

In fine, under Article 1542, what is controlling is the entire land included within the boundaries, regardless of whether the real area should be greater or smaller than that recited in the deed. This is particularly true since the area of the land in OCT No. 0-6498 was described in the deed as "humigit kumulang," that is, more or less.30

A caveat is in order, however. The use of "more or less" or similar words in designating quantity covers only a reasonable excess or deficiency. A vendee of land sold in gross or with the description "more or less" with reference to its area does not thereby ipso factotake all risk of quantity in the land.31

Numerical data are not of course the sole gauge of unreasonableness of the excess or deficiency in area. Courts must consider a host of other factors. In one case,32 the Court found substantial discrepancy in area due to contemporaneous circumstances. Citing change in the physical nature of the property, it was therein established that the excess area at the southern portion was a product of reclamation, which explained why the land’s technical description in the deed of sale indicated the seashore as its southern boundary, hence, the inclusion of the reclaimed area was declared unreasonable.

In OCT No. 0-6498, the increase by a fourth of a fraction of the area indicated in the deed of sale cannot be considered as an unreasonable excess. Most importantly, the circumstances attendant to the inclusion of the excess area bare nothing atypical or significant to hint at unreasonableness. It must be noted that the land was not yet technically surveyed at the time of the sale. As vendors who themselves executed theBilihan ng Lupa, petitioners may rightly be presumed to have acquired a good estimate of the value and area of the bahaging palayan.

As for the last assigned error, the appellate court, in finding that the complaints were time-barred, noted that when the complaints were filed in 1994, more than 27 years had elapsed from the issuance of OCT No. 0-3631 and more than 20 years from the issuance of OCT No. 0-6498. The prescriptive period of one (1) year had thus set in.1awphi1.nét

Petitioners’ reliance on Agne v. Director of Lands33 is misplaced since the cancellation of title was predicated not on the ground of fraud but on want of jurisdiction. Even assuming that petitioners’ actions are in the nature of a suit for quieting of title, which is imprescriptible, the actions still necessarily fail since petitioners failed to establish the existence of fraud.

A word on Republic Act No. 716034 which was raised by petitioners in their petition. It expressly requires the parties to undergo a conciliation process under the Katarungang Pambarangay, as a precondition to filing a complaint in court,35 non-compliance with this condition precedent does not prevent a court of competent jurisdiction from exercising its power of adjudication over a case unless the defendants object thereto. The objection should be seasonably made before the court first taking cognizance of the complaint, and must be raised in the Answer or in such other pleading allowed under the Rules of Court.36

While petitioners admittedly failed to comply with the requirement of barangay conciliation, they assert that respondents waived such objection when they failed to raise it in their Answer. Contrary to petitioners’ claim, however, the records reveal that respondents raised their objection in their Amended Answers37 filed in both cases.

IN FINE, it is a fundamental principle in land registration that a certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein. Such indefeasibility commences after the lapse or expiration of one year from the date of entry of the decree of registration when all persons are considered to have a constructive notice of the title to the property. After the lapse of one year, therefore, title to the property can no longer be contested. This system was so effected in order to quiet title to land.38

WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals are AFFIRMED.

Costs against petitioners.

SO ORDERED.

CONCHITA CARPIO MORALESAssociate Justice

WE CONCUR:

GREGORIO ARANETA UNIVERSITY FOUNDATION,

Petitioner,                 - versus -  THE REGIONAL TRIAL COURTOF KALOOKAN CITY, BRANCH 120, REGISTER OF DEEDS OFKALOOKAN CITY, NATIONAL HOUSING AUTHORITY, HEIRS OF GREGORIO BAJAMONDE AND SATURNINA MENDOZA, AND THE REMINGTON REALTY DEVELOPMENT, INC.,                                                                            Respondents.   

  G.R. No. 139672 Present: PUNO, CJ., Chairperson,CARPIO,CORONA,LEONARDO-DE CASTRO, andBRION,* JJ.     Promulgated:  March 4, 2009

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

 D E C I S I O N

  LEONARDO-DE CASTRO, J.: 

           In this petition for review under Rule 45 of the Rules of Court, herein petitioner Gregorio Araneta University Foundation (GAUF) assails and seeks to set aside the Decision[1] dated March 31, 1999 of the Court of Appeals (CA) in CA-G.R. SP No. 23872 and its Resolution[2] of August 16, 1999, denying petitioner's motion for reconsideration.           The assailed decision upheld the Joint Order[3] dated August 29, 1986 and the Order[4] dated December 23, 1988 of the Regional Trial Court (RTC)

of Caloocan City, Branch 120, in Civil Case No. C-760 which, among others, directed the cancellation of GAUF’s Transfer Certificate of Title (TCT) No. C-24153 and the issuance in lieu thereof of new titles in the name of the respondent Heirs of Gregorio Bajamonde over Lots 54 and 75 of the Gonzales Estate.           The factual antecedents as found by the CA are quoted hereunder: 

            By virtue of a decision rendered on March 29, 1950 by the then Court of First Instance of Rizal in Civil Case No. 131 and affirmed by the Supreme Court on May 14, 1954, in G.R. No. L-4918, the Gonzales or Maysilo estate in Malabon, Rizal, with an area of  871,982 square meters and covered by TCT No. 35487, was expropriated by the Republic of the Philippines, with the understanding that the Government would resell the property to its occupants.             In view of the failure of the Government and its instrumentality, then Rural Progress Administration and later the People’s Homesite and Housing Corporation (PHHC), to implement the decision in Civil Case No. 131, the occupants and tenants of the estate filed on October 20, 1960, a complaint in Civil Case No. 6376 (now Civil Case No. C-760) with the then Court of First Instance of Rizal (Pasig Branch) to compel PHHC to sell to the tenants their respective occupied portions of the Gonzales estate.             On April 29, 1961, the then Araneta Institute of Agriculture, now Gregorio Araneta University Foundation (GAUF) sought to intervene in Civil Case No. 6376 (Civil Case No. C-760) on the ground that 52 tenants of the property and Araneta Institute of Agriculture entered into an agreement or “Kasunduan” whereby the former conveyed to the latter their priority rights to purchase portion of the estate with an area of 507,376 square meters.             On the basis of this “Kasunduan,” a compromise agreement dated November 28, 1961 was submitted in Civil Case No. 6376 (Civil Case No. C-760) which was duly approved by the court.  Included in this compromise agreement are Lots 75 and 54 awarded to Gregorio Bajamonde.                         xxx                   xxx                   xxx                    Incidentally, it appears that on the basis of the “Kasunduan” and the forged compromise, Araneta University was able to register in its name with the Register of Deeds of Caloocan City Transfer Certificate of Title No. C-24153 for Lots 75 and 54 which as adverted to above, had been awarded to Gregorio Bajamonde.             However, in Civil Cases Nos. 17347 and 17364, both of the then Court of First Instance of Rizal, the compromise agreement entered into by and between Araneta University and the tenants on November 28, 1961 was

declared null and void for being a forgery, and the partial decision rendered in accordance therewith was likewise declared null and void and of no force and effect.             On appeal to the Court of Appeals in CA-G.R. No. 45330-R the appellate court sustained the nullity of the “Kasunduan” and the compromise agreement in accordance thereto. xxx.             Thus, on motion by the heirs of Gregorio Bajamonde, the lower court in Civil Case No. C-760 issued the order dated August 29, 1986: 

(1)        Declaring that any transfer or conveyance of Lots 75 and 54 or any purpose thereof from Gregorio Bajamonde to Araneta Institute of Agriculture or Gregorio Araneta University Foundation, or their assignee or successors-in-interest as rescinded, and to restore said lots 75 and 54 to the real owners, Gregorio Bajamonde and/or heirs;

(2)        Ordering the Register of Deeds of Caloocan City to cancel TCT No. C-24153 issued in the name of Gregorio Araneta University Foundation and to issue a new Transfer Certificate of Title over lots 75 and 54 in the name of Gregorio Bajamonde or heirs;

(3)         Ordering the Clerk of Court to issue writ of possession in favor of Gregorio Bajamonde or heirs.

 And then on May 27, 1988 the lower court issued the order for issuance

of a writ of execution for the enforcement of the joint order dated August 29, 1986, with a restraining order against Nonong Ridad, Graciano Napbua, Sergio Yeban, Gavino Miguel, Angel Cabrera and nine other persons, and their agents or representatives from squatting, occupying, staying and taking possession of Lots 75 and 54, or any portions thereof, including all the improvements and structures existing thereon. 

GAUF Personnel Homeowners Association, Inc., et al. assailed the said order via a petition for certiorari, injunction and restraining order in this Court, docketed as CA-G.R. SP No. 14839, which was however dismissed for lack of merit in a decision promulgated by this Court on June 29, 1989.  A petition for review filed with the Supreme Court, docketed as G.R. No. 89969 was likewise denied with finality on February 19, 1990. 

Meanwhile, on December 23, 1988, respondent Judge Arturo Romero issued in Civil Case No. 6376 (now Civil Case No. C-760) an order for the execution of the aforesaid joint order dated August 29, 1986. 

Eventually, (in compliance with the joint order dated December 23, 1988), TCT No. C-24153 for Lots 75 and 54 in the name of AranetaUniversity was cancelled and TCT No. 174672 for lot 75 and TCT No. 174671 for lot 54 were issued by the Register of Deeds of Caloocan City on December 27, 1988 to the rightful owner thereof, Gregorio Bajamonde.   

 On June 29, 1989, the heirs of Bajamonde sold a portion of lot 54 consisting of

7,685 square meters to the herein other respondent, Remington Realty Development, Inc.[5]

           On January 14, 1991, GAUF filed with the CA a petition for annulment[6] of the aforementioned Joint Order dated August 29, 1986 and the Order dated December 23, 1988.  In its petition, docketed as CA-G.R. SP No. 23872, GAUF essentially alleged that the twin orders in question were issued by the trial court without jurisdiction as the same constituted a collateral attack on its certificate of title (TCT No. C-24153) in violation of Section 48 of Presidential Decree No. 1529 (P.D. 1529),[7] otherwise known as the Property Registration Decree.

          In the herein challenged decision dated March 31, 1999, the appellate court denied the petition for annulment.  In explanation of the denial, the CA ruled as follows:

           It may not be remiss to state that by virtue of the “Kasunduan” which was submitted in Civil Case No. 6376 (now Civil Case No. C-760), GAUF was able to register in its name with the Register of Deeds of Caloocan City TCT No. C-24153 for Lots 75 and 54 which had been awarded to Gregorio Bajamonde.  However, in Civil Cases Nos. 17347 and 17364, the said “Kasunduan” or compromise agreement was declared null and void for being a forgery.  Such ruling was appealed to the Court of Appeals, CA-G.R. No. 45330-R which affirmed the decision rendered in Civil Cases Nos. 17347 and 17634.  Correspondingly, xxx, the finality of the orders impugned in the present petition cannot be therefore disturbed without impugning likewise the finality of the orders rendered in Civil Cases Nos. 17347 and 17364 rendered by the then Court of First Instance of Rizal and affirmed likewise by this Court in CA-G.R. No. 45330-R in a decision promulgated on February 7, 1973.             It clearly appears that the basis of respondent judge in issuing the questioned order is the declared nullity of the “Kasunduan.”  It was in Civil Case No. 6376 (now Civil Case No. C-760) where the nullified “Kasunduan” was submitted by the petitioner and the private respondents herein; it was in the same case where, by virtue of the said “Kasunduan,”petitioner GAUF was able to register in its name with the Register of Deeds of Caloocan City TCT No. C-24153 for Lots 54 and 75 which had been awarded to Gregorio Bajamonde.  Accordingly, it is also in the same case and court where the cancellation should be sought as a result of the nullity of the “Kasunduan.”

 

          With its motion for reconsideration having been denied by the CA in its resolution of August 16, 1999, petitioner GAUF is now before this Court via the instant recourse submitting for our consideration the following arguments:         

            1.         THE JOINT ORDER OF AUGUST 29, 1986 AND THE DECEMBER 23, 1988 ORDER OF THE RESPONDENT REGIONAL TRIAL COURT ARE NULL AND VOID AB INITIO FOR LACK OF JURISDICTION BECAUSE IT (SIC) AMENDED THE ALREADY FINAL AND EXECUTORY ORDER OF JULY 19, 1978 DISMISSING AND GRANTING THE WITHDRAWAL OF THE COMPLAINT IN CIVIL CASE NO. C-474 OF THE THEN CFI OF RIZAL FILED BY THE DECEASED GREGORIO BAJAMONDE;             2.         THE RESPONDENT REGIONAL TRIAL COURT HAS NO JURISDICTION TO CANCEL PETITIONER GAUF'S TCT NO. C-24153 IN THE HEARING OF THE OMNIBUS MOTION DATED MAY 12, 1986 AND MANIFESTATION AND MOTION DATED JULY 1, 1986 OF THE HEIRS OF GREGORIO BAJAMONDE. THE SAID PROCEEDINGS CONSTITUTE A COLLATERAL ATTACKON PETITIONER'S TCT NO. C-24153 WHICH IS PROHIBITED BY SECTION 48 OF P.D. NO. 1529, OTHERWISE KNOWN AS THEPROPERTY REGISTRATION DECREE;              3.         “A VOID JUDGMENT MAY BE ASSAILED OR IMPUGNED AT ANY TIME” [ZAIDE, JR. VS. COURT OF APPEALS, 184 SCRA 531];             4.         THE RULING OF THE COURT OF APPEALS THAT THE ISSUES RAISED IN THE PETITION TO ANNUL JUDGMENT ARE ALLEGEDLY BARRED BY THE RULE OF RES JUDICATA IS CONTRARY TO LAW.  THE SUPPOSED RULINGS IN CIVIL CASE NOS. 17347 AND 17364, AS WELL AS THE RULING IN CA-G.R. NO. 45330-R DO NOT BAR THE PETITION TO ANNUL JUDGMENT.[8]

           Fundamentally, petitioner’s arguments center on the question of whether or not the trial court has jurisdiction to issue the Joint Order dated August 29, 1986 and December 23, 1988 Order, which directed the cancellation of the petitioner's title over Lots 54 and 75 of the former Gonzales /Maysilo Estate and ordered the issuance of new titles over the same lots in the name of the Heirs of Gregorio Bajamonde.           It is the petitioner’s thesis that the orders in question directing the cancellation of its TCT No. 24153 constituted a collateral attack on its title, a course of action prohibited by Section 48 of P. D. No. 1529 because said orders were issued in connection with Civil Case No. C-760, a suit for specific performance and damages and not a direct proceeding for the cancellation of its title.  On this premise, petitioner argues that the trial court is bereft of jurisdiction to issue the disputed orders.                   We find the present petition unmeritorious.

           An action or proceeding is deemed an attack on a title when the object of the action is to nullify the title, and thus challenge the judgment pursuant to which the title was decreed.  The attack is direct when the object of the action is to annul or set aside such judgment, or enjoin its enforcement.  On the other hand, it is indirect or collateral when, in an action or proceeding to obtain a different relief, an attack on the judgment is nevertheless made as an incident thereof.[9]

           Here, while it may be true that Civil Case No. C-760 was originally an action for specific performance and damages, nonetheless the case cannot constitute a collateral attack on the petitioner's title which, to begin with, was irregularly and illegally issued.  It bears stressing that the source of GAUF's title was the Compromise Agreement purportedly executed by Gregorio Bajamonde, et al. on November 28, 1961.  This Compromise Agreement was approved by the trial court in Civil Case No. C-760 in its Partial Decision dated December 23, 1961.  As petitioner’s own evidence shows, the subject property was conveyed to it in compliance with and in satisfaction of the said Partial Decision in Civil Case No. C-760 and the writ of execution issued in connection therewith.[10]  The same Compromise Agreement and Partial Decision, however, were declared null and void in Civil Cases Nos. 17347 and 17364 and likewise effectively invalidated in CA-G.R. No. 45330-R.[11]  The rule that a title issued under the Torrens System is presumed valid and, hence, is the best proof of ownership does not apply where the very certificate itself is faulty as to its purported origin, [12] as in the present case.              With the reality that the presumption of authenticity and regularity enjoyed by the petitioner’s title has been overcome and overturned by the aforementioned decisions nullifying the aforesaid Compromise Agreement from whence the petitioner's title sprung, that title can never be indefeasible as its issuance was replete with badges of fraud and irregularities that rendered the same nugatory.  Well-settled is the rule that the indefeasibility of a title does not attach to titles secured by fraud and misrepresentation.[13] In view of these circumstances, it was as if no title at all was ever issued in this case to the petitioner and therefore this is hardly the occasion to talk of collateral attack against a title.                         We agree with the CA that the trial court in Civil Case No. C-760 had jurisdiction to annul petitioner’s title.  It must be emphasized that, notwithstanding the original denomination of the said action as one for specific performance and damages, it was petitioner GAUF no less which sought to intervene in Civil Case No. C-760 and claimed that it has rights or interests in the subject matter being litigated therein.  GAUF voluntarily submitted in Civil Case No. C-760 the purported “Kasunduan” which, in turn, became the basis of the Compromise Agreement and the Partial Decision dated December 23, 1961.  It is undeniable that petitioner’s TCT No. C-24153 was issued in enforcement or execution of a partial decision in Civil Case No. C-760.  As it were, the validity of petitioner’s title was an issue litigated in Civil Case No. C-760 on account of the presentation therein of the Compromise Agreement which, to stress, was the springboard of petitioner’s title.  Hence, when that same Compromise

Agreement and the Partial Decision in connection therewith were eventually nullified, the trial court acted very much within its jurisdiction in ordering the cancellation of petitioner's title in the same Civil Case No. C-760.           Lest it be forgotten, it was likewise petitioner itself and/or its privies or assignees which instituted numerous petitions relative to the validity/enforceability of the Compromise Agreement and the Partial Decision and the validity of petitioner’s certificate of title.  In fact, in one of those petitions, the appellate court ordered the trial court to hear and pass upon all unresolved incidents in Civil Case No. C-760, including motions assailing the Compromise Agreement and the Partial Decision upon which petitioner’s title was based.[14]  Clearly then, when the trial court granted respondent heirs’ Omnibus Motion and Motion to Vest Title in its assailed Joint Order of August 29, 1986 and Order dated December 23, 1988, respectively, that court was unquestionably exercising its jurisdiction to hear and resolve those incidents pursuant to the appellate court’s directive.           With the above, petitioner’s challenge with respect to the jurisdictional competence of the trial court to order the cancellation of its certificate of title in Civil Case No. C-760 must simply collapse.  Quite the contrary, the trial court having acquired jurisdiction not only over the subject matter of the case but also over the parties thereto, it was unnecessary to institute a separate action to nullify petitioner’s title.  Having voluntarily submitted itself to the jurisdiction of the trial court through the process of intervention, it is rather too late in the day for the petitioner to now turn its back and disclaim that jurisdiction, more so where, as here, an adverse judgment has already been rendered against it.  Case law teaches that if the court has jurisdiction over the subject matter and the person of the parties, its ruling upon all questions involved are mere errors of judgment reviewable by appeal.[15]  Any error in the judgment of the trial court should have been raised by petitioner through appeal by way of a petition for review with the CA.  Having failed to file such an appeal, petitioner cannot anymore question the final and executory order, in a petition for annulment with the CA, as petitioner did in this case.           Interestingly, in its present petition for review, GAUF concede the various decisions which have declared the Compromise Agreement and the Partial Decision void but argues that the annulment of the Compromise Agreement will not affect the validity of petitioner’s TCT No. C-24153 on the ground that GAUF’s title was allegedly not issued by virtue of the Compromise Agreement but rather the purported withdrawal by Gregorio Bajamonde of his complaint in Civil Case No. C-474 which was an action for annulment of the Compromise Agreement dated November 28, 1961.  We cannot agree with petitioner’s opinion on this point.  The fact still remains that the ultimate source of petitioner’s right to Lots 54 and 75 is the voided Compromise Agreement.           In any event, the purported withdrawal of Civil Case No. C-474 and the authenticity of the amicable settlement attached to the present petition are factual issues improperly and belatedly raised in this appeal.  It is elementary that in a petition for review under Rule 45 only legal, not factual, issues may be raised before this Court

unless exceptional circumstances exist to warrant a review of the facts. [16]  A perusal of the GAUF’s petition filed with the CA would also show that the alleged valid amicable settlement of Civil Case No. C-474 was not raised therein as a ground for the annulment of the Joint Order dated August 29, 1986 and December 23, 1988 Order.  Petitioner is, therefore, precluded from raising this argument for the first time on appeal.  All in all, we find no reason to disturb the trial court’s finding that: 

Even on the assumptions that the void “Compromise Agreement” dated November 28, 1961 and the subsequent Amicable Settlement dated July 13, 1978 between the intervenor and Gregorio Bajamonde or heirs were both valid, the tenants, particularly Gregorio Bajamonde or heirs, have all the rights (sic) to regard as rescinded the said two (2) agreements by reason of the consistent refusals or failures of the intervenor to fully comply with or to abide with its obligations or commitments to the affected tenants.

 xxx   xxx   xxx

 On the part of the Intervenor, it cannot insist on the enforcement of the

terms and conditions of the Amicable Settlement dated July 13, 1978 against the tenant Gregorio Bajamonde or heir over Lots 75 and 54 of the Gonzales Estate because it was not judicially approved by this Court nor by other competent courts and that it was also regarded as rescinded by the heirs of Gregorio Bajamonde.[17]

 

          In light of the foregoing, this Court is inclined to believe that the instant petition was a last-ditch effort on the part of petitioner GAUF to secure a reversal of the final and executory orders of the trial court in Civil Case No. C-760.  However, and as correctly pointed out by the CA in the decision under review, Rule 47 of the Revised Rules of Civil Procedure[18] permits annulment of judgment only on two (2) grounds, to wit: (a) that the judgment sought to be annulled is void for want of jurisdiction or lack of due process of law; or (b) that it has been obtained by fraud, neither of which obtain herein.

 

          In closing, let it be mentioned that a writ of execution for the enforcement of the assailed August 29, 1986 Joint Order had already been issued by the trial court in its Order of May 27, 1988, which Order was upheld by the CA in CA-G.R. SP No. 14839[19] and ultimately by this Court no less in G.R. No. 89969.[20]  Petitioner, its privies, assignees and/or successors in interest are bound by these final and executory decisions and orders.  For this Court now to annul the Joint Order is for it to vacate its Resolution in G.R. No. 89969.  The policy of judicial stability, not to mention the confusion such course of action would entail in the speedy administration of justice simply dictates the rejection of petitioner’s legal maneuverings to avoid the consequences of adverse decisions and orders that have long become final and executory.            

          IN VIEW WHEREOF, the instant petition is DENIED and the assailed decision dated March 31, 1999 of the Court of Appeals and its resolution dated August 16, 1999 in CA-G.R. SP No. 23872 are hereby AFFIRMED.                         Costs against the petitioner.           SO ORDERED. 

AYALA LAND, INC., petitioner, vs. SPOUSES MORRIS CARPO and SOCORRO CARPO, respondents.

D E C I S I O N

MENDOZA, J.:

This is a petition for review of the resolution[1] of the Court of Appeals, dated May 14, 1999, dismissing petitioner’s appeal from the summary judgment of the Regional Trial Court, Branch 255, Las Piñas City in Civil Case No. 96-0082 for its failure to pay the full amount of docket fees as well as the appellate court’s resolution, dated September 15, 1999, denying petitioner’s motion for reconsideration.

The facts are undisputed.

On March 10, 1995, herein respondent spouses Morris and Socorro Carpo brought an action in the Makati Regional Trial Court against Ayala Land Corporation and Property Ventures Corporation for quieting of title.  In their complaint, respondents claimed to be the true and lawful owners of a 171,309-square meter parcel of land in Las Piñas registered under Transfer Certificate of Title No. 296463 in their names.  They sought the annulment of the following titles in the defendants’ name: TCT Nos. T-125945, T-4366, T-4367, T-4368, and all other titles derived therefrom.  Respondents later amended their complaint by changing the name of Ayala Land Corporation to that of Ayala Land, Inc. (ALI).

The case was subsequently transferred to the Regional Trial Court of Las Piñas where it was re-docketed as Civil Case No. 96-0082 and assigned to Branch 255.

On December 17, 1996, ALI moved for summary judgment.  As its motion was denied, ALI filed a petition for certiorari with the Court of Appeals which, on September 25, 1997, rendered a decision ordering the trial court to render summary judgment.   ALI took exception to the resolution of the Court of Appeals and asked that summary judgment be rendered by it but the appellate court denied ALI’s motion.

ALI filed a petition for review[2] with this Court assailing the Court of Appeals’ refusal to render summary judgment. Respondents also filed a petition for review [3]with this Court assailing the Court of Appeals’ ruling that summary judgment was proper.  Both petitions were dismissed by this Court.

Accordingly, on December 22, 1998, the trial court rendered summary judgment finding respondents’ title superior to that of ALI because the latter was based merely on

a survey plan which was not approved by the Director of the Bureau of Lands.  The dispositive portion of its decision reads:[4]

WHEREFORE, in the light of the foregoing and the prevailing jurisprudence on the matter, judgment is hereby rendered:

(a) Declaring TCT No. 296463 in the name of the plaintiffs Spouses Morris G. Carpo and Socorro R. Carpio as valid and legal, and superior to that of defendant Ayala’s TCT No. T-5333;

(b) Declaring TCT No. T-5333, TCT No. 125945, TCT No. T-6055, TCT No. 4266, TCT No. 4367 and TCT No. 4368 and their derivatives as null and void;

(c) Ordering the defendant Ayala Land, Inc. to pay the sum of P100,000.00 as attorney’s fees;

(d) To pay the costs.

SO ORDERED.

On January 5, 1999, ALI filed with the trial court a notice of appeal.  On the same date, it paid P415.00 for docket and other lawful fees as assessed by the cash clerk of the trial court.[5]

On May 14, 1999, the Court of Appeals issued the first of its assailed resolutions dismissing ALI’s appeal on the ground that it failed to pay the full amount of the required docket fee.  It appears that per its computation, the amount paid by ALI was P5.00 short of the correct amount.

After paying P5.00 on June 7, 1999, ALI moved for reconsideration on June 8, 1999.  But on September 15, 1999, the Court of Appeals denied ALI’s motion.

ALI, therefore, filed the instant petition for review on October 13, 1999.

On November 17, 1999, this Court denied ALI’s petition for review.  The resolution denying the petition for review stated:[6]

Petitioner contends that the dismissal of its appeal by the Court of Appeals is too harsh a sanction for the P5.00 deficiency in the payment of the required legal fees.  The contention has no merit.  It is settled that the perfection of an appeal within the reglementary period is not only mandatory but also jurisdictional.  Failure to comply with the requirement for the timely payment of full appeal fees renders the decision final since appeal is only a statutory privilege and, therefore, it should be exercised in the manner provided by law.  As correctly ruled by the Court of Appeals, §1 of Rule 50, in relation to §4 of Rule 41, of the 1997 Rules of Civil Procedure authorizes the dismissal of the appeal for failure to pay the full amount of the required docket and other lawful fees.

Moreover, even on the merits, the instant petition should be denied for failure to clearly show that the appeal from the decision of the trial court is meritorious.  There is no showing that the trial court erred in nullifying petitioner’s certificate of title over the subject parcel of land.  In Republic Cement Corp. v. Court of Appeals, 198 SCRA 734 (1991), it was held that any title emanating from a survey plan, which is not approved by the Director of the Bureau of Lands, is irregular and void.  In the instant case, the trial court found that petitioner had admitted in its answer to the complaint that its title and that of the respondents both originated from Decree No. 131141, issued on October 15, 1969, in the name of Apolonio Sabater.  Petitioner, however, failed to show that its certificate of title is based on a survey plan duly approved by the Director of Bureau of Lands.  The trial court also found that while respondents’ title indicated that the survey of the subject parcel (of) land in their favor was made on January 4-6, 1927, petitioner’s title showed July 28, 1930 as the date of survey.  The trial court, therefore, rightly concluded that respondents’ predecessor-in-interest had claimed ownership over the subject property earlier than petitioner’s predecessor-in-interest.

. . . .

On December 13, 1999, ALI moved for a reconsideration arguing that (1) in similar cases where the error in computing the amount of docketing fees was committed by officers of the courts, such as the clerk of court, this Court allowed appeals on the principle that every citizen has the right to rely on the presumption of regularity in the performance by public officers of their duties; and (2) the only issue in this case is whether the Court of Appeals correctly dismissed its appeal on the ground that it failed to pay the required docket fees and not also the merits of the trial court’s summary judgment in Civil Case No. 96-0082.

On January 19, 2000, this Court granted ALI’s motion for reconsideration and reinstated its petition for review.

The sole issue in the present case is whether or not the Court of Appeals erred in dismissing ALI’s appeal for failure to pay the correct amount of docket and other lawful fees.

In their Comment, respondents contend that payment of the full amount of the docket and other legal fees within the prescriptive period of appeal is mandatory and jurisdictional under Rule 41, §4 of the 1997 Rules of Civil Procedure.[7] They contend that it is improbable for ALI’s counsel not to be familiar with the computation of the appellate court’s  docket and other fees because it is a big law firm with a large clientele.  It is thus patent error to blame the clerk of the trial court for ALI’s failure to pay the full amount of the docket fees.[8] They, therefore, pray that the instant petition for review be denied.  On the other hand, ALI prays that

 the 14 May 1999 and 15 September 1999 Resolutions of the Court of Appeals in CA-G.R. CV No. 61784, dismissing the appeal of petitioner from the 22 December 1998 Summary Judgment of the Regional Trial Court of Las Piñas in Civil Case No. 96-0082 [95-292] be set aside and such appeal be ordered reinstated for further proceedings.”

The petition is meritorious.

To be sure, the remedy of appeal is a purely statutory right and one who seeks to avail thereof must comply with the statute or rule.[9] For this reason, payment of the full amount of the appellate court docket and other lawful fees within the reglementary period is mandatory and jurisdictional.[10] However, as we have ruled in Aranas v. Endona,[11] the strict application of the jurisdictional nature of the above rule on payment of appellate docket fees may be mitigated under exceptional circumstances to better serve the interest of justice.  As early as 1946, in the case of Segovia v. Barrios,[12] we ruled that where an appellant in good faith paid less than the correct amount for the docket fee because that was the amount he was required to pay by the clerk of court, and he promptly paid the balance, it is error to dismiss his appeal because ¾

every citizen has the right to assume and trust that a public officer charged by law with certain duties knows his duties and performs them in accordance with law.  To penalize such citizen for relying upon said officer in all good faith is repugnant to justice.[13]

The ruling in Segovia was applied by this Court in subsequent cases[14] where an appellant’s right to appeal was threatened by the mistake of public officers in computing the correct amount of docket fee.  Respondents draw attention to Rule 41, §4 of the 1997 Rules of Civil Procedure which provides that the appellate court docket and other lawful fees must be paid in full to the clerk of the court which rendered the judgment or final order appealed from within the period for taking the appeal.  They argue that this Rule has overruled the decision in Segovia.[15]

This contention is untenable.  Rule 41, §4 must be read in relation to Rule 50, §1(c) which provides that:

An appeal may be dismissed    by the Court of Appeals, on its own motion or on that of the appellee, on the following grounds:

. . . .

(c)  Failure of the appellant to pay the docket and other lawful fees as provided in Section 4 of Rule 41.

. . . .

With the exception of §1(b), which refers to the failure to file notice of appeal or the record on appeal within the period prescribed by these Rules, the grounds enumerated in Rule 50, §1 are merely directory and not mandatory.[16] This is plain from the use of the permissive “may” in the text of the statute.  Despite the jurisdictional nature of the rule on payment of docket fee, therefore, the appellate court still has the discretion to relax the rule in meritorious cases.  The ruling in Segovia is still good law which the appellate court, in the exercise of its discretion, must apply in circumstances such as that in the present case where an appellant was, from the start, ready and willing to pay the correct

amount of docket fee, but was unable to do so due to the error of an officer of the court in computing the correct amount.  To hold otherwise would be unjust and unwarranted. 

WHEREFORE, the decision appealed from is REVERSED and the case is REMANDED to the Court of Appeals for further proceedings.

SO ORDERED.

Bellosillo, J., (Chairman), Quisumbing, Buena, and De Leon, Jr., JJ., concur.

G.R. No. 154270               March 9, 2010

TEOFISTO OÑO, PRECY O. NAMBATAC, VICTORIA O. MANUGAS and POLOR O. CONSOLACION, Petitioners,vs.VICENTE N. LIM, Respondent.

D E C I S I O N

BERSAMIN, J.:

The subject of controversy is Lot No. 943 of the Balamban Cadastre in Cebu City, covered by Original Certificate of Title (OCT) No. RO-9969-(O-20449), over which the contending parties in this action for quieting of title, initiated by respondent Vicente N. Lim (Lim) in the Regional Trial Court (RTC) in Cebu City, assert exclusive ownership, to the exclusion of the other. In its decision dated July 30, 1996,1 the RTC favored Lim, and ordered the cancellation of OCT No. RO-9969-(O-20449) and the issuance of a new certificate of title in the name of Luisa Narvios-Lim (Luisa), Lim’s deceased mother and predecessor-in-interest.

On appeal (CA-GR CV No. 57823), the Court of Appeals (CA) affirmed the RTC on January 28, 2002.2 It later denied the petitioners’ motion for reconsideration through the resolution dated June 17, 2002.3

Hence, this appeal via petition for review on certiorari.

Antecedents

On October 23, 1992, Lim filed in the RTC in Cebu City a petition for the reconstitution of the owner’s duplicate copy of OCT No. RO-9969-(O-20449), alleging that said OCT had been lost during World War II by his mother, Luisa;4 that Lot No. 943 of the Balamban Cadastre in Cebu City covered by said OCT had been sold in 1937 to Luisa by Spouses Diego Oño and Estefania Apas (Spouses Oño), the lot’s registered owners; and that although the deed evidencing the sale had been lost without being registered, Antonio Oño (Antonio), the only legitimate heir of Spouses Oño, had executed on April 23, 1961 in favor of Luisa a notarized document denominated asconfirmation of sale,5 which was duly filed in the Provincial Assessor’s Office of Cebu.

Zosimo Oño and petitioner Teofisto Oño (Oños) opposed Lim’s petition, contending that they had the certificate of title in their possession as the successors-in-interest of Spouses Oño.

On account of the Oños’ opposition, and upon order of the RTC, Lim converted the petition for reconstitution into a complaint for quieting of title,6 averring additionally that he and his predecessor-in-interest had been in actual possession of the property since 1937, cultivating and developing it, enjoying its fruits, and paying the taxes corresponding to it. He prayed, inter alia, that the Oños be ordered to surrender the reconstituted owner’s duplicate copy of OCT No. RO-9969-(O-20449), and that said OCT be cancelled and a new certificate of title be issued in the name of Luisa in lieu of said OCT.

In their answer,7 the Oños claimed that their predecessors-in-interest, Spouses Oño, never sold Lot No. 943 to Luisa; and that the confirmation of sale purportedly executed by Antonio was fabricated, his signature thereon not being authentic.

RTC Ruling

On July 30, 1996, after trial, the RTC rendered its decision,8 viz:

WHEREFORE, premises considered, judgment is hereby rendered quieting plaintiff's title to Lot No. 943 of the Balamban (Cebu) Cadastre, and directing the Register of Deeds of Cebu —

(1) To register the aforestated April 23, 1961 Confirmation of Sale of Lot No. 943 of the Balamban, Cebu Cadastre by Antonio Oño in favor of Luisa Narvios-Lim;

(2) To cancel the original certificate of title covering the said Lot No. 943 of the Balamban, Cebu Cadastre; and,

(3) To issue in the name of Luisa Narvios-Lim, a new duplicate certificate of title No. RO-9969 (O-20449) of the Register of Deeds of Cebu, which shall contain a memorandum of the fact that it is issued in place of the lost duplicate certificate of title, and shall in all respects be entitled to like faith and credit as the original

certificate, and shall be regarded as such for all purposes of this decree, pursuant to the last paragraph of Section 109, Presidential Decree No. 1529.

Without special pronouncement as to costs.

SO ORDERED.9

The RTC found that the Lims had been in peaceful possession of the land since 1937; that their possession had never been disturbed by the Oños, except on two occasions in 1993 when the Oños seized the harvested copra from the Lims’ caretaker; that the Lims had since declared the lot in their name for taxation purposes, and had paid the taxes corresponding to the lot; that the signature of Antonio on the confirmation of sale was genuine, thereby giving more weight to the testimony of the notary public who had notarized the document and affirmatively testified that Antonio and Luisa had both appeared before him to acknowledge the instrument as true than to the testimony of the expert witness who attested that Antonio’s signature was a forgery.

CA Ruling

On appeal, the Oños maintained that the confirmation of sale was spurious; that the property, being a titled one, could not be acquired by the Lims through prescription; that their (the Oños) action to claim the property could not be barred by laches; and that the action instituted by the Lims constituted a collateral attack against their registered title.1avvphi1

The CA affirmed the RTC, however, and found that Spouses Oño had sold Lot No. 943 to Luisa; and that such sale had been confirmed by their son Antonio. The CA ruled that the action for quieting of title was not a collateral, but a direct attack on the title; and that the Lims’ undisturbed possession had given them a continuing right to seek the aid of the courts to determine the nature of the adverse claim of a third party and its effect on their own title.

Nonetheless, the CA corrected the RTC, by ordering that the Office of the Register of Deeds of Cebu City issue a new duplicate certificate of title in the name of Luisa, considering that the owner’s duplicate was still intact in the possession of the Oños.

The decree of the CA decision was as follows:

WHEREFORE, the appeal is DISMISSED for lack of merit. However, the dispositive portion of the decision appealed from is CORRECTED as follows:

(1) Within five (5) days from finality of the decision, defendants-appellants are directed to present the owner's duplicate copy of OCT No. RO-9969 (O-20449) to the Register of Deeds who shall thereupon register the "Confirmation of Sale" of Lot No. 943, Balamban Cadastre, Cebu, executed on April 23, 1961 by Antonio Oño in favor of Luisa Narvios-Lim, and issue a new transfer certificate of title to and in

the name of the latter upon cancellation of the outstanding original and owner's duplicate certificate of title.

(2) In the event defendants-appellants neglect or refuse to present the owner's copy of the title to the Register of Deeds as herein directed, the said title, by force of this decision, shall be deemed annulled, and the Register of Deeds shall make a memorandum of such fact in the record and in the new transfer certificate of title to be issued to Luisa Narvios-Lim.

(3) Defendants-appellants shall pay the costs.

SO ORDERED.10

The CA denied the Oños’ motion for reconsideration11 on June 17, 2002.12

Hence, this appeal.

Issues

The petitioners raise the following issues:

1. Whether or not the validity of the OCT could be collaterally attacked through an ordinary civil action to quiet title;

2. Whether or not the ownership over registered land could be lost by prescription, laches, or adverse possession;

3. Whether or not there was a deed of sale executed by Spouses Oño in favor of Luisa and whether or not said deed was lost during World War II;

4. Whether or not the confirmation of sale executed by Antonio in favor of Luisa existed; and

5. Whether or not the signature purportedly of Antonio in that confirmation of sale was genuine.

Ruling of the Court

The petition has no merit.

A.

Action for cancellation of title is not an attack on the title

The petitioners contend that this action for quieting of title should be disallowed because it constituted a collateral attack on OCT No. RO-9969-(O-20449), citing Section 48 of Presidential Decree No. 1529, viz:

Section 48. Certificate not subject to collateral attack.– A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law.

The petitioners’ contention is not well taken.

An action or proceeding is deemed an attack on a title when its objective is to nullify the title, thereby challenging the judgment pursuant to which the title was decreed.13 The attack is direct when the objective is to annul or set aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment is nevertheless made as an incident thereof.14

Quieting of title is a common law remedy for the removal of any cloud, doubt, or uncertainty affecting title to real property.15 Whenever there is a cloud on title to real property or any interest in real property by reason of any instrument, record, claim, encumbrance, or proceeding that is apparently valid or effective, but is, in truth and in fact, invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title.16 In such action, the competent court is tasked to determine the respective rights of the complainant and the other claimants, not only to place things in their proper places, and to make the claimant, who has no rights to said immovable, respect and not disturb the one so entitled, but also for the benefit of both, so that whoever has the right will see every cloud of doubt over the property dissipated, and he can thereafter fearlessly introduce the improvements he may desire, as well as use, and even abuse the property as he deems fit.17

Lim’s complaint pertinently alleged:

18. If indeed, the genuine original of the Owner's Duplicate of the Reconstituted Original Certificate of Title No. RO-9699 (O-20449) for Lot 943, Balamban Cadastre xxx is in Defendant's (Oño’s) possession, then VNL submits the following PROPOSITIONS:

xxx

18.2. Therefore, the Original of Owner’s Duplicate Certificate (which Respondents [Defendants Oños] claim in their Opposition is in their possession) must be surrendered to VNL upon order of this Court, after the Court shall have determined VNL's mother's acquisition of the attributes of ownership over said Lot 943, in this action, in accordance with Section 107, P.D. 1529, Property Registration Decree xxx

xxx

[t]hat OCT 20449 be cancelled and new title for Lot 943 be issued directly in favor of LUISA NARVIOS, to complete her title to said Lot;18

The averments readily show that the action was neither a direct nor a collateral attack on OCT No. RO-9969-(O-20449), for Lim was asserting only that the existing title registered in the name of the petitioners’ predecessors had become inoperative due to the conveyance in favor of Lim’s mother, and resultantly should be cancelled. Lim did not thereby assail the validity of OCT No. RO-9969-(O-20449), or challenge the judgment by which the title of the lot involved had been decreed. In other words, the action sought the removal of a cloud from Lim’s title, and the confirmation of Lim’s ownership over the disputed property as the successor-in-interest of Luisa.

B.

Prescription was not relevant

The petitioners assert that the lot, being titled in the name of their predecessors-in-interest, could not be acquired by prescription or adverse possession.

The assertion is unwarranted.

Prescription, in general, is a mode of acquiring or losing ownership and other real rights through the lapse of time in the manner and under the conditions laid down by law.19 However, prescription was not relevant to the determination of the dispute herein, considering that Lim did not base his right of ownership on an adverse possession over a certain period. He insisted herein, instead, that title to the land had been voluntarily transferred by the registered owners themselves to Luisa, his predecessor-in-interest.

Lim showed that his mother had derived a just title to the property by virtue of sale; that from the time Luisa had acquired the property in 1937, she had taken over its possession in the concept of an owner, and had performed her obligation by paying real property taxes on the property, as evidenced by tax declarations issued in her name;20 and that in view of the delivery of the property, coupled with Luisa’s actual occupation of it, all that remained to be done was the issuance of a new transfer certificate of title in her name.

C.

Forgery, being a question of fact, could not be dealt with now

The petitioners submit that Lim’s evidence did not preponderantly show that the ownership of the lot had been transferred to Luisa; and that both the trial and the appellate courts disregarded their showing that Antonio’s signature on the confirmation of sale was a forgery.

Clearly, the petitioners hereby seek a review of the evaluation and appreciation of the evidence presented by the parties.

The Court cannot anymore review the evaluation and appreciation of the evidence, because the Court is not a trier of facts.21 Although this rule admits of certain exceptions, viz: (1) when the conclusion is a finding grounded entirely on speculation, surmises, or conjecture; (2) when the inference made is manifestly mistaken; (3) where there is a grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making its findings, went beyond the issues of the case, and the findings are contrary to the admissions of both appellant and appellee; (7) when the findings of the Court of Appeals are contrary to those of the trial court; (8) when the findings of fact are conclusions without specific evidence on which they are based; (9) when the facts set forth in the petition as well in the petitioners’ main and reply briefs are not disputed by the respondents; and, (10) when the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and are contradicted by the evidence on record,22 it does not appear now that any of the exceptions is present herein. We thus apply the rule without hesitation, and reject the appeal for that reason.

It is emphasized, too, that the CA upheld the conclusion arrived at by the RTC that the signature of Antonio had not been simulated or forged. The CA ruled that the testimony of the notary public who had notarized the confirmation of sale to the effect that Antonio and Luisa had appeared before him prevailed over that of the petitioners’ expert witness. The concurrence of their conclusion on the genuineness of Antonio’s signature now binds the Court.23

In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence. Preponderance of evidence is the weight, credit, and value of the aggregate evidence on either side, and is usually considered to be synonymous with the term greater weight of the evidence or greater weight of the credible evidence. Preponderance of evidence is a phrase that means, in the last analysis, probability of the truth.24 It is evidence that is more convincing to the court as worthy of belief than that which is offered in opposition thereto.

Lim successfully discharged his burden of proof as the plaintiff. He established by preponderant evidence that he had a superior right and title to the property. In contrast, the petitioners did not present any proof of their better title other than their copy of the reconstituted certificate of title. Such proof was not enough, because the registration of a piece of land under the Torrens system did not create or vest title, such registration not being a mode of acquiring ownership. The petitioners need to be reminded that a certificate of title is merely an evidence of ownership or title over the particular property described therein. Its issuance in favor of a particular person does not foreclose the possibility that the real property may be co-owned with persons not named in the certificate, or that it may be held in trust for another person by the registered owner.25

WHEREFORE, the petition for review on certiorari is denied, and the decision dated January 28, 2002 is affirmed.

The petitioners are ordered to pay the costs of suit.

SO ORDERED.

LUCAS P. BERSAMINAssociate Justice

WE CONCUR:

G.R. No. 171531               January 30, 2009

GUARANTEED HOMES, INC., Petitioner, vs.HEIRS OF MARIA P. VALDEZ, (EMILIA V. YUMUL and VICTORIA V. MOLINO), HEIRS OF SEVERINA P. TUGADE (ILUMINADA and LEONORA P. TUGADE, HEIRS OF ETANG P. GATMIN (LUDIVINA G. DELA CRUZ (by and through ALFONSO G. DELA CRUZ), HILARIA G. COBERO and ALFREDO G. COBERO) and SIONY G. TEPOL (by and through ELENA T. RIVAS and ELESIO TEPOL, JR.), AS HEIRS OF DECEDENT PABLO PASCUA, Respondents.

D E C I S I O N

Tinga, J.:

This is a petition for review1 under Rule 45 of the Rules of Court of the Court of Appeals’ Decision dated 22 March 20052 and Resolution dated 9 February 20063 in CA-G.R. CV No. 67462. The Court of Appeals reversed the 12 November 1999 Order of the Regional Trial Court (RTC) of Olongapo City, Branch 734 which granted the motion to dismiss filed by Guaranteed Homes, Inc. (petitioner). The appellate court denied petitioner’s motion for reconsideration.

The factual antecedents are as follows:

Respondents, who are the descendants of Pablo Pascua (Pablo), filed a complaint seeking reconveyance of a parcel of land with an area of 23.7229 hectares situated in Cabitaugan, Subic, Zambales and covered by Original Certificate of Title (OCT) No. 404 in the name of Pablo.5 In the alternative, the respondents prayed that damages be awarded in their favor.6

OCT No. 4047 was attached as one of the annexes of respondents’ complaint. It contained several annotations in the memorandum of encumbrances which showed that the property had already been sold by Pablo during his lifetime to Alejandria Marquinez and Restituto Morales. Respondents also attached copies of the following documents as integral parts of their complaint: Transfer Certificate of Title (TCT) No. T-8241,8 TCT No. T-8242,9TCT No. T-10863,10 the Extrajudicial Settlement of a Sole Heir and Confirmation of Sales11 executed by Cipriano Pascua, Sr. (Cipriano), and the Deed of Sale with Mortgage12 between spouses Albino Rodolfo and Fabia Rodolfo (spouses Rodolfo) and petitioner.

In their complaint,13 respondents alleged that Pablo died intestate sometime in June 1945 and was survived by his four children, one of whom was the deceased Cipriano.14 On 13 February 1967, Cipriano executed a document denominated as "Extrajudicial Settlement of a Sole Heir and Confirmation of Sales,"15 wherein he declared himself as the only heir of Pablo and confirmed the sales made by the decedent during his lifetime, including the alleged sale of the disputed property to spouses Rodolfo.

Respondents likewise averred that on the following day 14 February 1967, TCT No. T-824116 was issued in the name of Cipriano "without OCT No. 404 having been cancelled."17 However, TCT No. T-8241 was not signed by the Register of Deeds. On the same day, TCT No. T-8242 was issued in the name of the spouses Rodolfo and TCT No. T-8241 was thereby cancelled.18 Subsequently, on 31 October 1969, the spouses Rodolfo sold the disputed property to petitioner by virtue of a Deed of Sale with Mortgage. Consequently, on 5 November 1969, TCT No. T-8242 was cancelled and TCT No. T-1086319 was issued in the name of petitioner.20

It was further averred in the complaint that Jorge Pascua, Sr., son of Cipriano, filed on 24 January 1997 a petition before the RTC of Olongapo City, Branch 75, for the issuance of a new owner’s duplicate of OCT No. 404, docketed as Other Case No. 04-0-97.21 The RTC denied the petition.22 The trial court held that petitioner was already the owner of the land, noting that the failure to annotate the subsequent transfer of the property to it at the back of OCT No. 404 did not affect its title to the property.

Petitioner filed a motion to dismiss23 the complaint on the grounds that the action is barred by the Statute of Limitations, more than 28 years having elapsed from the issuance of TCT No. T-10863 up to the filing of the complaint, and that the complaint states no cause of action as it is an innocent purchaser for value, it having relied on the clean title of the spouses Rodolfo.

Impleaded as defendants, the heirs of Cipriano filed an answer to the complaint in which they denied knowledge of the existence of the extrajudicial settlement allegedly executed by Cipriano and averred that the latter, during his lifetime, did not execute any document transferring ownership of the property.24

The Register of Deeds and the National Treasurer filed, through the Office of the Solicitor General, an answer averring that the six (6)-year period fixed in Section 102 of Presidential Decree (P.D.) No. 1529 for the filing of an action against the Assurance Fund had long prescribed since the transfer of ownership over the property was registered through the issuance of TCT No. T-10863 in favor of petitioner as early as 1969. They also claimed that respondents have no cause of action against the Assurance Fund since they were not actually deprived of ownership over the property, as they could have recovered the property had it not been for their inaction for over 28 years.25

The RTC granted petitioner’s motion to dismiss.26 Noting that respondents had never claimed nor established that they have been in possession of the property and that they did not present any evidence to show that petitioner has not been in possession of the

property either, the RTC applied the doctrine that an action to quiet title prescribes where the plaintiff is not in possession of the property.

The trial court found that the complaint per its allegations presented a case of implied or constructive trust on the part of Cipriano who had inaccurately claimed to be the sole heir of Pablo in the deed of extrajudicial settlement of estate which led to the issuance of TCT No. T- 8241 in his favor. As the prescriptive period for reconveyance of a fraudulently registered real property is ten (10) years reckoned from the date of the issuance of the title, the trial court held that the action for reconveyance had already prescribed with the lapse of more than 28 years from the issuance of TCT No. T-10863 on 5 November 1969 as of the filing of the complaint on 21 November 1997.

The RTC added that it is an enshrined rule that even a registered owner of property may be barred from recovering possession of property by virtue of laches.

The RTC further held that petitioner had the right to rely on TCT No. T- 8242 in the name of spouses Rodolfo. Petitioner is not obliged to go beyond the title considering that there were no circumstances surrounding the sale sufficient to put it into inquiry.

Concerning the Assurance Fund, the RTC held that the claim against it had long prescribed since Section 102 of P.D. No. 1529 provides for a six-year period within which a plaintiff may file an action against the fund and in this case the period should be counted from the time of the issuance of the challenged TCT No. T-10863 on 5 November 1969 and thus expired in 1975.

Undaunted, respondents appealed to the Court of Appeals.27

The Court of Appeals reversed the RTC’s order.28 In ordering the reinstatement of the complaint, the appellate court ruled that the averments in respondents’ complaint before the RTC make out a case for quieting of title which has not prescribed. Respondents did not have to prove possession over the property since petitioner as the movant in a motion to dismiss hypothetically admitted the truth of the allegations in the complaint. The appellate court found that possession over the property was sufficiently alleged in the complaint which stated that "neither petitioner nor the Rodolfo spouses ever had possession of the disputed property" as "a number of the Pascua heirs either had been (still are) in actual, continuous and adverse possession thereof or had been enjoying (still are enjoying) the use thereof."29 By the same token, laches had not set in, the Court of Appeals added.

The appellate court further held that the ruling of the RTC that petitioner is an innocent purchaser for value is contrary to the allegations in respondents’ complaint.

Hence, the present petition for review.

The sole issue before this Court revolves around the propriety of the RTC’s granting of the motion to dismiss and conversely the tenability of the Court of Appeals’ reversal of the RTC’s ruling.

The petition is meritorious.

It is well-settled that to sustain a dismissal on the ground that the complaint states no cause of action, the insufficiency of the cause of action must appear on the face of the complaint, and the test of the sufficiency of the facts alleged in the complaint to constitute a cause of action is whether or not, admitting the facts alleged, the court could render a valid judgment upon the same in accordance with the prayer of the complaint. For the purpose, the motion to dismiss must hypothetically admit the truth of the facts alleged in the complaint.30 The admission, however, is limited only to all material and relevant facts which are well pleaded in the complaint.31

The factual allegations in respondents’ complaint should be considered in tandem with the statements and inscriptions on the documents attached to it as annexes or integral parts. In a number of cases, the Court held that in addition to the complaint, other pleadings submitted by the parties should be considered in deciding whether or not the complaint should be dismissed for lack of cause of action.32 Likewise, other facts not alleged in the complaint may be considered where the motion to dismiss was heard with the submission of evidence, or if documentary evidence admitted by stipulation discloses facts sufficient to defeat the claim.33 For while the court must accept as true all well pleaded facts in the complaint, the motion does not admit allegations of which the court will take judicial notice are not true, nor does the rule apply to legally impossible facts, nor to facts inadmissible in evidence, nor to facts which appear by record or document included in the pleadings to be unfounded.34

In the case at bar, the trial court conducted a hearing on the motion to dismiss. At the hearing, the parties presented documentary evidence. Among the documents marked and offered in evidence are the annexes of the complaint.35

Based on the standards set by this Court in relation to the factual allegations and documentary annexes of the complaint as well as the exhibits offered at the hearing of the motion to dismiss, the inescapable conclusion is that respondents’ complaint does not state a cause of action against petitioner.

Firstly, the complaint does not allege any defect with TCT No. T-8242 in the name of the spouses Rodolfo, who were petitioner’s predecessors-in-interest, or any circumstance from which it could reasonably be inferred that petitioner had any actual knowledge of facts that would impel it to make further inquiry into the title of the spouses Rodolfo.36 It is basic that a person dealing with registered property need not go beyond, but only has to rely on, the title of his predecessor-in-interest. Since "the act of registration is the operative act to convey or affect the land insofar as third persons are concerned," it follows that where there is nothing in the certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser is not

required to explore farther than what the Torrens title upon its face indicates in quest for any hidden defect or inchoate right that may subsequently defeat his right thereto. If the rule were otherwise, the efficacy and conclusiveness of the certificate of title which the Torrens system seeks to insure would entirely be futile and nugatory. The public shall then be denied of its foremost motivation for respecting and observing the Torrens system of registration. In the end, the business community stands to be inconvenienced and prejudiced immeasurably.37

Contrary to the assertion of respondents, OCT No. 404 was expressly cancelled by TCT No. T-8241. The alleged non-signature by the Register of Deeds Soliman Achacoso, , does not affect the validity of TCT No. T-8241 since he signed TCT No. T- 8242 and issued both titles on the same day. There is a presumption of regularity in the performance of official duty. The presumption is further bolstered by the fact that TCT No. T-8241 was certified to be on file with the Registry of Deeds and registered in the name of Cipriano. It is enough that petitioner had examined the latest certificate of title which in this case was issued in the name of the immediate transferor, the spouses Rodolfo. The purchaser is not bound by the original certificate but only by the certificate of title of the person from whom he had purchased the property.38

Secondly, while the Extrajudicial Settlement of a Sole Heir and Confirmation of Sales executed by Cipriano alone despite the existence of the other heirs of Pablo, is not binding on such other heirs, nevertheless, it has operative effect under Section 44 of the Property Registration Decree, which provides that:

SEC. 44. Statutory Liens Affecting Title. — Every registered owner receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered land taking a certificate of title for value and in good faith, shall hold the same free from all encumbrances except those noted on said certificate and any of the following encumbrances which may be subsisting, namely:

x x x x

Even assuming arguendo that the extrajudicial settlement was a forgery, the Court still has to uphold the title of petitioner. The case law is that although generally a forged or fraudulent deed is a nullity and conveys no title, there are instances when such a fraudulent document may become the root of a valid title.39 And one such instance is where the certificate of title was already transferred from the name of the true owner to the forger, and while it remained that way, the land was subsequently sold to an innocent purchaser. For then, the vendee had the right to rely upon what appeared in the certificate.40

The Court cannot give credence to respondents’ claims that the Extrajudicial Settlement of a Sole Heir and Confirmation of Sales was not registered and that OCT No. 404 was not cancelled by the Register of Deeds. The Register of Deeds of Zambales certified that the extrajudicial settlement was recorded on 14 February 1967, per Entry No. 18590.

This is in compliance with Section 56 of Act No. 496,41 the applicable law at the time of registration, which provides that:

Sec. 56. Each register of deeds shall keep an entry book in which he shall enter in the order of their reception all deeds and other voluntary instruments, and all copies of writs and other process filed with him relating to registered land. He shall note in such book the year, month, day, hour, and minute of reception of all instruments, in the order in which they are received. They shall be regarded as registered from the time so noted, and the memorandum of each instrument when made on the certificate of title to which it refers shall bear the same date. [Emphasis supplied]

Registration in the public registry is notice to the whole world. Every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land shall be, if registered, filed or entered in the Office of the Register of Deeds of the province or city where the land to which it relates lies, be constructive notice to all persons from the time of such registering, filing or entering.42

Thirdly, respondents cannot make out a case for quieting of title since OCT No. 404 had already been cancelled. Respondents have no title to anchor their complaint on.43 Title to real property refers to that upon which ownership is based. It is the evidence of the right of the owner or the extent of his interest, by which means he can maintain control and, as a rule, assert right to exclusive possession and enjoyment of the property.44

Moreover, there is nothing in the complaint which specified that the respondents were in possession of the property. They merely alleged that the occupants or possessors are "others not defendant Spouses Rodolfo"45who could be anybody, and that the property is in actual possession of "a number of the Pascua heirs"46 who could either be the respondents or the heirs of Cipriano. The admission of the truth of material and relevant facts well pleaded does not extend to render a demurrer an admission of inferences or conclusions drawn therefrom, even if alleged in the pleading; nor mere inferences or conclusions from

facts not stated; nor conclusions of law; nor matters of evidence; nor

surplusage and irrelevant matters.47

The other heirs of Pablo should have filed an action for reconveyance based on implied or constructive trust within ten (10) years from the date of registration of the deed or the date of the issuance of the certificate of title over the property.48 The legal relationship between Cipriano and the other heirs of Pablo is governed by Article 1456 of the Civil Code which provides that if a property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.

From the above discussion, there is no question that petitioner is an innocent purchaser for value; hence, no cause of action for cancellation of title will lie against it.49 The RTC was correct in granting petitioner’s motion to dismiss.

Lastly, respondents’ claim against the Assurance Fund also cannot prosper. Section 101 of P.D. No. 1529 clearly provides that the Assurance Fund shall not be liable for any loss, damage or deprivation of any right or interest in land which may have been caused by a breach of trust, whether express, implied or constructive. Even assumingarguendo that they are entitled to claim against the Assurance Fund, the respondents’ claim has already prescribed since any action for compensation against the Assurance Fund must be brought within a period of six (6) years from the time the right to bring such action first occurred, which in this case was in 1967.

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G.R. CV No. 67462 isREVERSED and SET ASIDE. The 12 November 1999 Order of the Regional Trial Court of Olongapo City, Branch 73 in Civil Case No. 432-097 is REINSTATED.

SO ORDERED.

DANTE O. TINGAAssociate Justice

G.R. No. 149121               April 20, 2010

NATIONAL HOUSING AUTHORITY, Petitioner, vs.AUGUSTO BASA, JR., LUZ BASA and EDUARDO S. BASA, Respondents.

D E C I S I O N

LEONARDO-DE CASTRO, J.:

This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the Amended Decision1 of the Court of Appeals dated November 27, 2000 and its Resolution dated July 19, 2001 denying the motion for reconsideration of the National Housing Authority (NHA).

On April 19, 1983, spouses Augusto and Luz Basa loaned from NHA the amount of P556,827.10 secured by a real estate mortgage over their properties covered by Transfer Certificates of Title (TCTs) Nos. 287008 and 285413, located at No. 30 San Antonio St., San Francisco del Monte, Quezon City.2 Spouses Basa did not pay the loan despite repeated demands. To collect its credit, the NHA, on August 9, 1990, filed a verified petition for extrajudicial foreclosure of mortgage before the Sheriff’s Office in Quezon City, pursuant to Act No. 3135, as amended.3

After notice and publication, the properties were sold at public auction where NHA emerged as the highest bidder.4On April 16, 1991, the sheriff’s certificate of sale was registered and annotated only on the owner’s duplicate copies of the titles in the hands of the respondents, since the titles in the custody of the Register of Deeds were among those burned down when a fire gutted the City Hall of Quezon City on June 11, 1988.5

On April 16, 1992, the redemption period expired,6 without respondents having redeemed the properties. Shortly thereafter, on April 24, 1992, NHA executed an Affidavit of Consolidation of Ownership7 over the foreclosed properties, and the same was inscribed by the Register of Deeds on the certificates of title in the hand of NHA under Entry No. 6572/T-287008-PR-29207.8

On June 18, 1992, NHA filed a petition for the issuance of a Writ of Possession. The said petition was granted by the Regional Trial Court (RTC) in an Order9 dated August 4, 1992.

A Writ of Possession10 was issued on March 9, 1993 by the RTC, ordering spouses Augusto and Luz Basa to vacate the subject lots. The writ, however, remained unserved. This compelled NHA to move for the issuance of an alias writ of possession on April 28, 1993.

Before the RTC could resolve the motion for the issuance of an alias writ of possession, respondents spouses Basa and Eduardo Basa, on June 2, 1993, filed a Motion for Leave to Intervene and Petition in Intervention (with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction).11 Respondents anchored said petition for intervention on Section 812 of Act No. 3135, as amended, which gives the debtor/mortgagor the remedy to petition that the sale be set aside and the writ of possession be cancelled. In the said petition for intervention, respondents averred that the extrajudicial foreclosure of the subject properties was a nullity since notices were not posted and published, written notices of foreclosure were not given to them, and notices of sale were not tendered to the occupants of the sold properties, thereby denying them the opportunity to ventilate their rights.13 Respondents likewise insisted that even assuming arguendo that the foreclosure sale were valid, they were still entitled to redeem the same since the one-year redemption period from the registration of the sheriff’s certificate of foreclosure sale had not yet prescribed.14 Citing Bernardez v. Reyes15 and Bass v. De la Rama,16respondents theorized that the instrument is deemed registered only upon actual inscription on the certificate of title in the custody of the civil registrar.17 Since the sheriff’s certificate was only inscribed on the owner’s duplicate certificate of title, and not on the certificate of title in the possession of the Register of Deeds, then there was no effective registration and the one-year redemption period had not even begun to run. Thus, respondents asked the RTC, among others, to declare the foreclosure sale null and void, to allow the respondents to redeem the mortgaged properties in the amount of P21,160.00, and to cancel the Writ of Possession dated March 9, 1993.

NHA opposed respondents’ petition for intervention.18 It countered that the extrajudicial foreclosure sale was conducted validly and made in accordance with Act No. 3135 as evidenced by the publication of the Notice of Sheriff’s Sale in the Manila Times in its issues dated July 14, 21 and 28, 1990.19 NHA also said that respondents had been furnished with a copy of the Notice of Sheriff’s Sale as shown at the bottom portion of said notice.20 NHA maintained that respondents’ right of redemption had long expired on April 15, 1992 since the certificate of sale was inscribed on their TCT Nos. 285413 and 287008 a year earlier, or on April 16, 1991. It pointed out that the RTC, via its Order dated August 4, 1992, had already ruled that respondents’ right of redemption was already gone without them exercising said right. Since said order had already attained finality, the ruling therein could no longer be disturbed.

On January 2, 1995, the RTC issued the first assailed Order21 with the following directives: 1) granting the issuance of the alias writ of possession which allowed NHA to take possession of the subject properties; 2) admitting the Petition in Intervention and "treating the same as the petition to set aside sale mentioned in [Sec. 8] of Act No. 3155"; and 3) granting the issuance of a Writ of Preliminary Injunction in favor of respondents that ordered NHA to refrain from selling or disposing of the contested properties. The pertinent portion of the order reads:

After examining the record and following precedents x x x this Court hereby orders:

1. The issuance of an alias writ of possession;

2. Admission of the "Petition in Intervention," treating the same as the "petition" to set aside sale, etc., mentioned in [Sec. 8] of Act No. 3155;

3. The issuance of a writ of preliminary injunction, after a BOND in the amount of P20,000.00 had been duly filed by intervenors, ordering movant National Housing Authority, its agents and/or any other person acting under its command, to desist and refrain from selling or in any manner from disposing of the subject properties covered by TCT Nos. 287008 and 285413 and located at No. 30, San Antonio Street, San Francisco del Monte, Quezon City, pending the termination of this proceeding and/or unless a contrary order is issued by this Court;

4. Setting the hearing of the petition in intervention (to set aside) on March 17, 1995, at 8:30 a.m.22

NHA filed a motion for reconsideration23 assailing the RTC’s Order insofar as it admitted respondents’ motion for intervention and issued a writ of preliminary injunction. NHA argued that respondents should have assailed the foreclosure sale during the hearing in the petition for the issuance of a Writ of Possession, and not during the hearing in the petition for the issuance of an alias writ of possession since the "petition" referred to in Section 8 of Act No. 3135 pertains to the original petition for the issuance of the Writ of Possession and not the Motion for the Issuance of an Alias Writ of Possession. NHA stressed that another reason why the petition for intervention should be denied was the

finality of the Order dated August 4, 1992 declaring respondents’ right of redemption barred by prescription. Lastly, NHA asserted that the writ of possession was issued as a matter of course upon filing of the proper motion and thereby, the court was bereft of discretion.

In the second assailed Order24 dated September 4, 1995, the RTC denied NHA’s motion for reconsideration reasoning that the admission of the intervention was sanctioned by Section 8 of Act No. 3135. As to the grant of preliminary injunction, the RTC made the justification that if the NHA was not restrained, the judgment which may be favorable to respondents would be ineffectual. The order partly provides:

The motion is without merit. The admission of the intervention is sanctioned by Sec. 8 of Act No. 3135. And, because, otherwise or if no preliminary injunction is issued, the movant NHA may, before final judgment, do or continue the doing of the act with the intervenor asks the court to restrain, and thus make ineffectual the final judgment rendered afterwards which may grant the relief sought by the intervenor.

ACCORDINGLY, the motion for reconsideration is DENIED. 25

Undaunted, NHA filed on November 24, 1995, a special civil action for certiorari and prohibition before the Court of Appeals.

The Court of Appeals rendered a Decision26 dated February 24, 2000, in favor of the NHA. It declared null and void the assailed orders of the RTC dated January 2, 1995 and September 4, 1995, to the extent that the said orders admitted the petition in intervention and granted the issuance of the preliminary injunction; but it upheld the grant of the alias writ of possession, thus:

WHEREFORE, the petition is GRANTED, and the assailed order of January 2, 1995 is declared NULL AND VOID except for the portion directing the issuance of an alias writ of possession. Likewise declared NULL AND VOID is the second assailed order of September 4, 1995 denying the petitioner’s motion for reconsideration. Let an alias writ of possession be issued and executed/implemented by the public respondent without further delay.27

The Court of Appeals defended its affirmation of the RTC’s grant of the alias writ of possession in NHA’s favor by saying that it was a necessary consequence after the earlier writ was left unserved to the party. It further explained that NHA was entitled to the writ of possession as a matter of course after the lapse of the redemption period.

As to the RTC’s admission of respondents’ petition for intervention, the appellate court opined that it was improperly and erroneously made. The Court of Appeals believed that the only recourse available to a mortgagor, in this case the respondents, in a foreclosure sale is to question the validity of the sale through a petition to set aside the sale and to cancel the writ of possession, a summary procedure provided for under Section 112 of the Land Registration Act. It also observed that the grant of the preliminary injunction by

the RTC was uncalled for as it would effectively defeat the right of NHA to possession, the latter having been entitled by virtue of the grant of the alias writ of possession.

Respondents filed a motion for reconsideration.28 They alleged that since they raised the issue that their right of redemption had not prescribed, said fact should have changed the whole scenario such that the issuance of a writ of possession ceased to be summary in nature and was no longer ministerial. Respondents then concluded that their right to redeem the properties against NHA’s right to the writ of possession must be threshed out in a hearing of the case on its merits.

With regard to the RTC Order dated August 4, 1992 granting the writ of possession which, according to the NHA, became final and executory, respondents argued that said order did not constitute res judicata so as to bar the filing of the petition for intervention since the said order was not a judgment on the merits that could attain finality.

Also, respondents would like the Court of Appeals to treat the petition for intervention not only as an opposition to the issuance of the alias writ of possession, but also as a proper remedy under Section 8 of Act No. 3135, as amended, in view of the various issues raised.

On November 27, 2000, the Court of Appeals, in its Amended Decision, reconsidered its earlier stance. It declared that the period of redemption had not expired as the certificate of sale had not been registered or annotated in the original copies of the titles supposedly kept with the Register of Deeds since said titles were earlier razed by fire. Taking its cue from Bass v. De la Rama where the Court purportedly made a ruling that entry of a document, such as sale of real property, in the entry book is insufficient to treat such document as registered, unless the same had been annotated on the certificate of title; the Court of Appeals went on to say that the entry of the certificate of sale in the owner’s duplicate of the titles could not have been sufficient to register the same since anyone who would wish to check with the Register of Deeds would not see any annotation. Thus, entry made on the owner’s duplicate of the titles cannot be considered notice that would bind the whole world. Having been deprived of their right of redemption, the Court of Appeals deemed it proper to allow respondents to intervene.1avvphi1 The dispositive part of the amended decision decrees:

WHEREFORE, the motion for reconsideration is GRANTED. Our decision dated February 24, 2000, is RECONSIDERED and SET ASIDE and the petition DISMISSED.29

Unfazed, NHA filed a motion for reconsideration, which the Court of Appeals denied in its July 19, 2001 Resolution, to wit:

ACCORDINGLY, the Motion for Reconsideration dated February 24, 2000 is DENIED for lack of merit.30

Hence, the instant petition.

In its memorandum, NHA tendered the following issues:

1. WHETHER OR NOT THE ANNOTATION OF THE SHERIFF’S CERTIFICATE OF SALE IN THE PRIMARY ENTRY BOOK OF THE REGISTER OF DEEDS AND ON THE OWNER’S DUPLICATE TITLE IS SUFFICIENT COMPLIANCE WITH THE REQUIREMENT OF LAW ON REGISTRATION.

2. WHETHER OR NOT THE CASE OF BASS VS. DE LA RAMA HAS BEEN SUPERSEDED.31

Respondents, on the other hand, offered the following as issues:

I

WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT THE LOWER COURT DID NOT ACT WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN ADMITTING THE RESPONDENTS’ INTERVENTION AND GRANTING THE EQUITABLE WRIT OF INJUNCTION THEREBY DISMISSING THE PETITION FOR CERTIORARI AND PROHIBITION.

II

WHETHER OR NOT THE INSTANT PETITION COMPLIES WITH THE REQUIREMENTS OF RULE 45 OF THE RULES OF COURT.32

On the procedural aspect, respondents question NHA’s alleged failure to include in its petition copies of material portions of the record such as pleadings filed in the RTC and the Court of Appeals as required under Section 4, Rule 45 of the Rules of Court. Respondents also pointed out the purported defective verification of NHA in view of the fact that it merely stated that the one verifying had read the allegations of the petition and that the same were true and correct to the best of his knowledge. According to respondents, such declarations were not in accordance with the rules which require that a verified pleading must state that the affiant had read the pleading and that the allegations therein were true and correct based on his personal knowledge and not only to the "best" of his knowledge.

As to the merits, NHA stresses that the annotation and entry in the owner’s duplicate certificate of titles of the sheriff’s certificate of sale are sufficient compliance with the requirement of law on registration. To support this, NHA refers to Land Registration Administration Circular No. 3 dated December 6, 1988, entitled "Entry and Provisional Registration of Instruments Pending Reconstitution of Title" which allegedly authorized all Registers of Deeds to accept for entry and provisional registration instruments affecting lost or destroyed certificates of title pending reconstitution of the original. The legality and validity of the disputed registration on its duplicate copies of the sheriff’s certificate of sale, NHA insists, are backed by this Court’s ruling in Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija,33 where purportedly, this

Court made a favorable interpretation of Section 56 of Presidential Decree No. 1529. NHA says that the inscription of the sheriff’s certificate of sale only to the owner’s duplicate copies, but not to those in the custody of the register of deeds is justified as the latter were burned down. Thus, it could not be blamed for the non-registration of the sale in the original copies.

NHA faults the Court of Appeals’ reliance on Bass v. De la Rama since the ruling therein stating that entry and annotation of a sale instrument on the owner’s duplicate copy only as insufficient registration, was already abandoned in Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija, where it was allegedly ruled that the primary entry alone of the transaction produces the effect of registration so long as the registrant has complied with all that is required of him for purposes of entry and annotation.

In contrast, respondents submit that annotation of the sheriff’s certificate of sale on the owner’s copy is inadequate to propel the running of the redemption period. They firmly believe that for the sale instrument to be considered as registered, the inscription must be made on the reconstituted titles.

Respondents disagree with NHA’s opinion that Bass v. De la Rama was superceded by Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija. They are of the persuasion that the ruling in DBP pertains exclusively to the unique factual milieu and the issues attendant therein, but not to the instant case where Basspurportedly applies. Respondents also assail NHA’s citation of Sta. Ignacia Rural Bank, Inc. v. Court of Appeals.34According to them, said case finds no application to the instant controversy because the issue involved in the former was whether the redemption period should be reckoned from the date of the auction sale or the registration of the certificate of sale, which ostensibly is not the bone of contention in this case.

Ascribing NHA’s inaction to have the burned titles reconstituted, respondents assert that such neglect should not be used as a justification for the non-inscription in the original titles of the certificate of sale. Additionally, respondents insist that the question of whether the redemption period should be reckoned from the inscription on the owner’s duplicate copies is a factual and legal issue that is appropriately adjudicated in a hearing on the merits of their petition in intervention, and not in the instant special civil action for certiorari and prohibition which is limited in scope, namely, whether the RTC committed grave abuse of discretion amounting to lack of jurisdiction in admitting their petition in intervention.

Respondents reiterate that the issuance of the writ of possession prayed for by NHA before the RTC is no longer ministerial since it raised the issue of whether their period of redemption has already expired. They cite Barican v. Intermediate Appellate Court35 as the authority to this argument.

We dwell first with the procedural issues before the main controversy. Respondents contend that the instant petition is dismissible on the ground that NHA failed to attach pleadings filed in the RTC and the Court of Appeals as required under Section 4, Rule 45 of the Rules of Court which partly provides:

SEC. 4. Contents of petition. — The petition shall be filed in eighteen (18) copies, with the original copy intended for the court being indicated as such by the petitioner, and shall x x x (d) be accompanied by a clearly legible duplicate original, or a certified true copy of the judgment or final order or resolution certified by the clerk of court of the court a quo and the requisite number of plain copies thereof, and such material portions of the record as would support the petition; x x x.

In its petition, NHA attached the February 24, 2000 Decision, the November 27, 2000 Amended Decision, and the July 19, 2001 Resolution all of the Court of Appeals; copies of the transfer certificates of title of the disputed properties; and the June 13, 1994 Order of the Quezon City RTC ordering the reconstitution of the said titles. This Court finds that NHA substantially complied with the requirements under Section 4 of Rule 45. The same conclusion was arrived at by this Court in Development Bank of the Philippines v. Family Foods Manufacturing Co., Ltd.36 when it was faced with the same procedural objection, thus:

As held by this Court in Air Philippines Corporation v. Zamora:

[E]ven if a document is relevant and pertinent to the petition, it need not be appended if it is shown that the contents thereof can also [be] found in another document already attached to the petition. Thus, if the material allegations in a position paper are summarized in a questioned judgment, it will suffice that only a certified true copy of the judgment is attached.

Third, a petition lacking an essential pleading or part of the case record may still be given due course or reinstated (if earlier dismissed) upon showing that petitioner later submitted the documents required, or that it will serve the higher interest of justice that the case be decided on the merits.

Nevertheless, even if the pleadings and other supporting documents were not attached to the petition, the dismissal is unwarranted because the CA records containing the promissory notes and the real estate and chattel mortgages were elevated to this Court. Without a doubt, we have sufficient basis to actually and completely dispose of the case.

We must stress that cases should be determined on the merits, after all parties have been given full opportunity to ventilate their causes and defenses, rather than on technicalities or procedural imperfections. In that way, the ends of justice would be served better. Rules of procedure are mere tools designed to expedite the decision or resolution of cases and other matters pending in court. A strict and rigid application of rules, resulting in technicalities that tend to frustrate rather than promote substantial justice, must be avoided. In fact, Section 6 of Rule 1 states that the Rules shall be liberally construed in

order to promote their objective of ensuring the just, speedy and inexpensive disposition of every action and proceeding.

Contrary to respondents’ assertion, NHA’s verification conforms to the rule. Section 4, Rule 7 of the Rules of Court states:

SEC. 4. Verification. – Except when otherwise specifically required by law or rule, pleadings need not be under oath, verified or accompanied by affidavit.

A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his personal knowledge or based on authentic records.

A pleading required to be verified which contains a verification based on "information and belief," or upon "knowledge, information and belief," or lacks a proper verification, shall be treated as an unsigned pleading.

The reason for requiring verification in the petition is to secure an assurance that the allegations of a pleading are true and correct; are not speculative or merely imagined; and have been made in good faith.37 To achieve this purpose, the verification of a pleading is made through an affidavit or sworn statement confirming that the affiant has read the pleading whose allegations are true and correct of the affiant's personal knowledge or based on authentic records.38

The General Manager of NHA verified the petition as follows:

3. I have read the allegations contained therein and that the same are true and correct to the best of my own personal knowledge.39

A reading of the above verification reveals nothing objectionable about it. The affiant confirmed that he had read the allegations in the petition which were true and correct based on his personal knowledge. The addition of the words "to the best" before the phrase "of my personal knowledge" did not violate the requirement under Section 4 of Rule 7, it being sufficient that the affiant declared that the allegations in the petition are true and correct based on his personal knowledge.

Now, as to the merits of the case. The main issue before us is whether the annotation of the sheriff’s certificate of sale on the owner’s duplicate certificate of titles is sufficient registration considering that the inscription on the original certificates could not be made as the same got burned.

Jurisprudence is replete with analogous cases. Of foremost importance is Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija40 where the Court listed cases where the transaction or instrument was annotated not on the original certificate but somewhere else. In that case, DBP, following the extrajudicial foreclosure sale where it emerged as the highest bidder, registered with the Register of Deeds the

sheriff’s certificate of sale in its favor. After it had paid the required fees, said transaction was entered in the primary entry book. However, the annotation of the said transaction to the originals of the certificates of title could not be done because the same titles were missing from the files of the Registry. This prompted DBP to commence reconstitution proceedings of the lost titles. Four years had passed before the missing certificates of title were reconstituted. When DBP sought the inscription of the four-year old sale transaction on the reconstituted titles, the Acting Register of Deeds, being in doubt of the proper action to take, referred the matter to the Commissioner of the Land Registration Authority by consulta, the latter resolved against the annotation of the sale transaction and opined that said entry was "ineffective due to the impossibility of accomplishing registration at the time the document was entered because of the non-availability of the certificate (sic) of title involved."41 In other words, annotation on the primary book was deemed insufficient registration. The Court disagreed with this posture. Considering that DBP had paid all the fees and complied with all the requirements for purposes of both primary entry and annotation of the certificate of sale, the Court declared that mere entry in the primary book was considered sufficient registration since "[DBP] cannot be blamed that annotation could not be made contemporaneously with the entry because the originals of the subject certificates of title were missing and could not be found, since it had nothing to do with their safekeeping. If anyone was responsible for failure of annotation, it was the Register of Deeds who was chargeable with the keeping and custody of those documents."42 To buttress its conclusion, the Court reviewed the relevant jurisprudence starting from 1934.1avvph!1 The Court noted that before the Second World War, particularly in Government of the Philippine Islands v. Aballe,43 the prevailing doctrine was an inscription in the book of entry even without the notation on the certificate of title was considered as satisfactory and produced all the effects which the law gave to its registration. During the war, however, the Court observed that there was apparent departure from said ruling since in Bass v. De la Rama, the holding was that entry of an instrument in the primary entry book does not confer any legal effect without a memorandum thereof inscribed on the certificate of title.44 DBP noted that Bass v. De la Rama, however, survived only for a little while since "later cases appear to have applied the Aballe ruling that entry in the day book, even without the corresponding annotation on the certificate of title, is equivalent to, or produces the effect of, registration to voluntary transactions, provided the requisite fees are paid and the owner’s duplicates of the certificates of title affected are presented."45

These later cases are Levin v. Bass46 and Potenciano v. Dineros,47 both of which involve the issue of whether entry in the day book of a deed of sale, payment of the fees, and presentation of the owner’s duplicate certificate of title constitute a complete act of registration.48

Simply, respondents’ resort to Bass v. De la Rama is futile as the same was abandoned by the later cases, i.e.,Bass, Potenciano and DBP.

In the recent case of Autocorp Group v. Court of Appeals,49 the respondent was awarded the foreclosed parcels of land. A sheriff’s certificate of sale was thereafter issued in its favor. Thereafter, petitioners in that case filed a complaint before the RTC with a prayer

for the issuance of an ex parte TRO aimed at preventing the Register of Deeds from registering the said certificate of sale in the name of the respondent and from taking possession of the subject properties.50 Before the RTC could issue a TRO, respondent presented the sheriff’s certificate of sale to the Register of Deeds who entered the same certificate in the primary book, even if the registration fee was paid only the following day. Four days after, the RTC issued a TRO directing the Register of Deeds to refrain from registering the said sheriff’s certificate of sale. A preliminary injunction was thereafter issued as the TRO was about to expire. The preliminary injunction was questioned by therein respondent. One of the main issues raised there was whether the entry of the certificate of sale in the primary book was equivalent to registration such that the TRO and the preliminary injunction issues would not lie anymore as the act sought to be restrained had become an accomplished act. The Court held that the TRO and the preliminary injunction had already become moot and academic by the earlier entry of the certificate of sale in the primary entry book which was tantamount to registration, thus:

In fine, petitioner’s prayer for the issuance of a writ of injunction, to prevent the register of deeds from registering the subject certificate of sale, had been rendered moot and academic by the valid entry of the instrument in the primary entry book. Such entry is equivalent to registration. Injunction would not lie anymore, as the act sought to be enjoined had already become a fait accompli or an accomplished act.51

Indeed, the prevailing rule is that there is effective registration once the registrant has fulfilled all that is needed of him for purposes of entry and annotation, so that what is left to be accomplished lies solely on the register of deeds. The Court thus once held:

Current doctrine thus seems to be that entry alone produces the effect of registration, whether the transaction entered is a voluntary or an involuntary one, so long as the registrant has complied with all that is required of him for purposes of entry and annotation, and nothing more remains to be done but a duty incumbent solely on the register of deeds.52

In the case under consideration, NHA presented the sheriff’s certificate of sale to the Register of Deeds and the same was entered as Entry No. 2873 and said entry was further annotated in the owner’s transfer certificate of title.53 A year later and after the mortgagors did not redeem the said properties, respondents filed with the Register of Deeds an Affidavit of Consolidation of Ownership54after which the same instrument was presumably entered into in the day book as the same was annotated in the owner’s duplicate copy.55 Just like in DBP, Levin, Potenciano and Autocorp, NHA followed the procedure in order to have its sheriff’s certificate of sale annotated in the transfer certificates of title. There would be, therefore, no reason not to apply the ruling in said cases to this one. It was not NHA’s fault that the certificate of sale was not annotated on the transfer certificates of title which were supposed to be in the custody of the Registrar, since the same were burned. Neither could NHA be blamed for the fact that there were no reconstituted titles available during the time of inscription as it had taken

the necessary steps in having the same reconstituted as early as July 15, 1988.56 NHA did everything within its power to assert its right.

While it may be true that, in DBP, the Court ruled that "in the particular situation here obtaining, annotation of the disputed entry on the reconstituted originals of the certificates of title to which it refers is entirely proper and justified," this does not mean, as respondents insist, that the ruling therein applies exclusively to the factual milieu and the issue obtaining in said case, and not to similar cases. There is nothing in the subject declaration that categorically states its pro hac vice character. For in truth, what the said statement really conveys is that the current doctrine that entry in the primary book produces the effect of registration can be applied in the situation obtaining in that case since the registrant therein complied with all that was required of it, hence, it was fairly reasonable that its acts be given the effect of registration, just as the Court did in the past cases. In fact the Court there continued with this pronouncement:

To hold said entry ineffective, as does the appealed resolution, amounts to declaring that it did not, and does not, protect the registrant (DBP) from claims arising, or transactions made, thereafter which are adverse to or in derogation of the rights created or conveyed by the transaction thus entered. That, surely, is a result that is neither just nor can, by any reasonable interpretation of Section 56 of Presidential Decree No. 1529 be asserted as warranted by its terms.57

What is more, in Autocorp Group v. Court of Appeals,58 the pertinent DBP ruling was applied, thereby demonstrating that the said ruling in DBP may be applied to other cases with similar factual and legal issues, viz:

Petitioners contend that the aforecited case of DBP is not apropos to the case at bar. Allegedly, in DBP, the bank not only paid the registration fees but also presented the owner’s duplicate certificate of title. We find no merit in petitioner’s posture x x x.

x x x x

Like in DBP v. Acting Register of Deeds of Nueva Ecija, the instrument involved in the case at bar, is a sheriff’s certificate of sale, We hold now, as we held therein, that the registrant is under no necessity to present the owner’s duplicates of the certificates of title affected, for purposes of primary entry, as the transaction sought to be recorded is an involuntary transaction.

x x x x

x x x Such entry is equivalent to registration. Injunction would not lie anymore, as the act sought to be enjoined had already become a fait accompli or an accomplished act.59

Moreover, respondents’ stand on the non-applicability of the DBP case to other cases, absent any statement thereof to such effect, contravenes the principle of stare decisis

which urges that courts are to apply principles declared in prior decisions that are substantially similar to a pending case.60

Since entry of the certificate of sale was validly registered, the redemption period accruing to respondents commenced therefrom, since the one-year period of redemption is reckoned from the date of registration of the certificate of sale.61 It must be noted that on April 16, 1991, the sheriff’s certificate of sale was registered and annotated only on the owner’s duplicate copies of the titles and on April 16, 1992, the redemption period expired, without respondents having redeemed the properties. In fact, on April 24, 1992, NHA executed an Affidavit of Consolidation of Ownership. Clearly, respondents have lost their opportunity to redeem the properties in question.

As regards respondents’ allegation on the defect in the publication and notice requirements of the extrajudicial foreclosure sale, the same is unavailing. The rule is that it is the mortgagor who alleges absence of a requisite who has the burden of establishing such fact.62 This is so because foreclosure proceedings have in their favor the presumption of regularity and the burden of evidence to rebut the same is on the party who questions it.63 Here, except for their bare allegations, respondents failed to present any evidence to support them. In addition, NHA stated in its Comment to Motion for Leave of Court to Intervene that it had complied with the publication of the Notice of Sheriff’s Sale in the Manila Times in the latter’s issues dated July 14, 21 and 28, 1990.64 It also claimed that an Affidavit of Publication of said newspaper was attached as Annex "B" in the said comment.65 NHA also said that respondents had been furnished with a copy of the Notice of Sheriff’s Sale as shown at the bottom portion of said notice.66 From all these, it would tend to show that respondents’ aspersion of non-compliance with the requirements of foreclosure sale is a futile attempt to salvage its statutory right to redeem their foreclosed properties, which right had long been lost by inaction.

Considering that the foreclosure sale and its subsequent registration with the Register of Deeds were done validly, there is no reason for the non-issuance of the writ of possession. A writ of possession is an order directing the sheriff to place a person in possession of a real or personal property, such as when a property is extrajudicially foreclosed.67 Section 7 of Act No. 3135 provides for the rule in the issuance of the writ of possession involving extrajudicial foreclosure sales of real estate mortgage, to wit:

Sec. 7. In any sale made under the provisions of this Act, the purchaser may petition the [Regional Trial Court] of the province or place where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and filed in the form of an ex parte motion in the registration or cadastral proceedings if the property is registered, or in special proceedings in the case of property registered under the Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a

mortgage duly registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four Hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately.

This provision of law authorizes the purchaser in a foreclosure sale to apply for a writ of possession during the redemption period by filing an ex parte motion under oath for that purpose in the corresponding registration or cadastral proceeding in the case of property with Torrens title.68 Upon the filing of such motion and the approval of the corresponding bond, the law also in express terms directs the court to issue the order for a writ of possession.69

The time-honored precept is that after the consolidation of titles in the buyer’s name, for failure of the mortgagor to redeem, the writ of possession becomes a matter of right.70 Its issuance to a purchaser in an extrajudicial foreclosure is merely a ministerial function.71 The writ of possession issues as a matter of course upon the filing of the proper motion and the approval of the corresponding bond. The judge issuing the writ following these express provisions of law neither exercises his official discretion nor judgment.72 As such, the court granting the writ cannot be charged with having acted without jurisdiction or with grave abuse of discretion.73 To accentuate the writ’s ministerial character, the Court disallowed injunction to prohibit its issuance despite a pending action for annulment of mortgage or the foreclosure itself.74

Believing that the instant case does not come within the penumbra of the foregoing rule, respondents resort to the ruling in Barican v. Intermediate Appellate Court.75 Unfortunately for them, the instant case does not even come close to the cited case. There, the Court deemed it inequitable to issue a writ of possession in favor of the purchaser in the auction sale considering that the property involved was already in the possession of a third person by virtue of a deed of sale with assumption of mortgage even before the purchaser could register the sheriff’s certificate of sale. Also, the auction buyer therein unreasonably deferred to exercise its right to acquire possession over the property. These circumstances are not present in the instant case.

Moreover, in Fernandez v. Espinoza,76 the Court refused to apply the ruling in Barican v. Intermediate Appellate Court77 and Cometa v. Intermediate Appellate Court,78 two cases which are exemptions to the stated rule, reasoning that:

In Cometa, which actually involved execution of judgment for the prevailing party in a damages suit, the subject properties were sold at the public auction at an unusually lower price, while in Barican, the mortgagee bank took five years from the time of foreclosure before filing the petition for the issuance of writ of possession. We have considered these equitable and peculiar circumstances in Cometa and Barican to justify the relaxation of the otherwise absolute rule. None of these exceptional circumstances,

however, attended herein so as to place the instant case in the same stature as that of Cometa and Barican. Instead, the ruling in Vaca v. Court of Appeals is on all fours with the present petition. In Vaca, there is no dispute that the property was not redeemed within one year from the registration of the extrajudicial foreclosure sale; thus, the mortgagee bank acquired an absolute right, as purchaser, to the issuance of the writ of possession. Similarly, UOB, as the purchaser at the auction sale in the instant case, is entitled as a matter of right, to the issuance of the writ of possession.

Just as in Fernandez, this Court does not see any compelling reason to veer away from the established rule.

In fine, this Court finds that the Court of Appeals committed reversible error in ruling that the annotation of NHA’s sheriff’s certificate of sale on the duplicate certificates of title was not effective registration and in holding that respondents’ redemption period had not expired.

WHEREFORE, premises considered, the instant petition is hereby GRANTED. The Amended Decision of the Court of Appeals dated November 27, 2000 is SET ASIDE.

SO ORDERED.

 NATIONAL HOUSING AUTHORITY,                         Petitioner,   

-  versus  -   AUGUSTO BASA, JR., LUZ BASA and EDUARDO S. BASA,                       Respondents.

  G.R. No. 149121 Present: PUNO, C.J.,     Chairperson,     CARPIO,*

LEONARDO-DE CASTRO,BERSAMIN, andVILLARAMA, JR., JJ. Promulgated: April 20, 2010

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

D E C I S I O N  LEONARDO-DE CASTRO, J.:  

This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the Amended Decision[1] of the Court of Appeals dated November 27, 2000 and its Resolution dated July 19, 2001 denying the motion for reconsideration of the National Housing Authority (NHA).           On April 19, 1983, spouses Augusto and Luz Basa loaned from NHA the amount of P556,827.10 secured by a real estate mortgage over their properties covered by Transfer Certificates of Title (TCTs) Nos. 287008 and 285413, located at No. 30 San Antonio St., San Francisco del Monte, Quezon City.[2]  Spouses Basa did not pay the loan despite repeated demands.  To collect its credit, the NHA, on August 9, 1990, filed a verified petition for extrajudicial foreclosure of mortgage before the Sheriff’s Office inQuezon City, pursuant to Act No. 3135, as amended.[3]

           After notice and publication, the properties were sold at public auction where NHA emerged as the highest bidder.[4]  OnApril 16, 1991, the sheriff’s certificate of sale was registered and annotated only on the owner’s duplicate copies of the titles in the hands of the respondents, since the titles in the custody of the Register of Deeds were among those burned down when a fire gutted the City Hall of Quezon City on June 11, 1988.[5]

           On April 16, 1992, the redemption period expired,[6] without respondents having redeemed the properties.  Shortly thereafter, on April 24, 1992, NHA executed an Affidavit of Consolidation of Ownership[7] over the foreclosed properties, and the same was inscribed by the Register of Deeds on the certificates of title in the hand of NHA under Entry No. 6572/T-287008-PR-29207.[8]

           On June 18, 1992, NHA filed a petition for the issuance of a Writ of Possession.  The said petition was granted by the Regional Trial Court (RTC) in an Order[9] dated August 4, 1992.           A Writ of Possession[10] was issued on March 9, 1993 by the RTC, ordering spouses Augusto and Luz Basa to vacate the subject lots.  The writ, however, remained unserved.  This compelled NHA to move for the issuance of an alias writ of possession on April 28, 1993.            Before the RTC could resolve the motion for the issuance of an alias writ of possession, respondents spouses Basa and Eduardo Basa, on June 2, 1993, filed a Motion for Leave to Intervene and Petition in Intervention (with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction).[11]  Respondents anchored said petition for intervention on Section 8[12] of Act No. 3135, as amended, which gives the debtor/mortgagor the remedy to petition that the sale be set aside and the writ of possession be cancelled.  In the said petition for intervention, respondents averred that the extrajudicial foreclosure of the subject properties was a nullity since notices were not posted and published, written notices of foreclosure were not given to them, and notices of sale were not tendered to the occupants of the sold properties, thereby denying them the opportunity to ventilate their rights.[13]  Respondents likewise insisted that even

assuming arguendo that the foreclosure sale were valid, they were still entitled to redeem the same since the one-year redemption period from the registration of the sheriff’s certificate of foreclosure sale had not yet prescribed.[14]  Citing Bernardez v. Reyes[15] and Bass v. De la Rama,[16] respondents theorized that the instrument is deemed registered only upon actual inscription on the certificate of title in the custody of the civil registrar.[17]  Since the sheriff’s certificate was only inscribed on the owner’s duplicate certificate of title, and not on the certificate of title in the possession of the Register of Deeds, then there was no effective registration and the one-year redemption period had not even begun to run.  Thus, respondents asked the RTC, among others, to declare the foreclosure sale null and void, to allow the respondents to redeem the mortgaged properties in the amount of P21,160.00, and to cancel the Writ of Possession dated March 9, 1993.           NHA opposed respondents’ petition for intervention.[18]  It countered that the extrajudicial foreclosure sale was conducted validly and made in accordance with Act No. 3135 as evidenced by the publication of the Notice of Sheriff’s Sale in the Manila Times in its issues dated July 14, 21 and 28, 1990.[19] NHA also said that respondents had been furnished with a copy of the Notice of Sheriff’s Sale as shown at the bottom portion of said notice.[20] NHA maintained that respondents’ right of redemption had long expired on April 15, 1992 since the certificate of sale was inscribed on their TCT Nos. 285413 and 287008 a year earlier, or on April 16, 1991.  It pointed out that the RTC, via its Order dated August 4, 1992, had already ruled that respondents’ right of redemption was already gone without them exercising said right.  Since said order had already attained finality, the ruling therein could no longer be disturbed.           On January 2, 1995, the RTC issued the first assailed Order[21] with the following directives: 1) granting the issuance of thealias writ of possession which allowed NHA to take possession of the subject properties; 2) admitting the Petition in Intervention and “treating the same as the petition to set aside sale mentioned in [Sec. 8] of Act No. 3155”; and 3) granting the issuance of a Writ of Preliminary Injunction in favor of respondents that ordered NHA to refrain from selling or disposing of the contested properties. The pertinent portion of the order reads: 

          After examining the record and following precedents x x x this Court hereby orders: 

1. The issuance of an alias writ of possession; 

2. Admission of the “Petition in Intervention,” treating the same as the “petition” to set aside sale, etc., mentioned in [Sec. 8] of Act No. 3155; 

3. The issuance of a writ of preliminary injunction, after a BOND in the amount of P20,000.00 had been duly filed by intervenors, ordering movant National Housing Authority, its agents and/or any other person acting under its command, to desist and refrain from selling or in any manner from disposing of the subject properties covered by TCT Nos. 287008 and 285413

and located at No. 30, San Antonio Street, San Francisco del Monte, Quezon City, pending the termination of this proceeding and/or unless a contrary order is issued by this Court; 

4. Setting the hearing of the petition in intervention (to set aside) on March 17, 1995, at 8:30 a.m.[22]

  

          NHA filed a motion for reconsideration[23] assailing the RTC’s Order insofar as it admitted respondents’ motion for intervention and issued a writ of preliminary injunction.  NHA argued that respondents should have assailed the foreclosure sale during the hearing in the petition for the issuance of a Writ of Possession, and not during the hearing in the petition for the issuance of an alias writ of possession since the “petition” referred to in Section 8 of Act No. 3135 pertains to the original petition for the issuance of the Writ of Possession and not the Motion for the Issuance of an Alias Writ of Possession. NHA stressed that another reason why the petition for intervention should be denied was the finality of the Order dated August 4, 1992 declaring respondents’ right of redemption barred by prescription. Lastly, NHA asserted that the writ of possession was issued as a matter of course upon filing of the proper motion and thereby, the court was bereft of discretion.                   In the second assailed Order[24] dated September 4, 1995, the RTC denied NHA’s motion for reconsideration reasoning that the admission of the intervention was sanctioned by Section 8 of Act No. 3135.  As to the grant of preliminary injunction, the RTC made the justification that if the NHA was not restrained, the judgment which may be favorable to respondents would be ineffectual. The order partly provides: 

          The motion is without merit. The admission of the intervention is sanctioned by Sec. 8 of Act No. 3135. And, because, otherwise or if no preliminary injunction is issued, the movant NHA may, before final judgment, do or continue the doing of the act with the intervenor asks the court to restrain, and thus make ineffectual the final judgment rendered afterwards which may grant the relief sought by the intervenor.             ACCORDINGLY, the motion for reconsideration is DENIED. [25]

  

          Undaunted, NHA filed on November 24, 1995, a special civil action for certiorari and prohibition before the Court of Appeals.           The Court of Appeals rendered a Decision[26] dated February 24, 2000, in favor of the NHA.  It declared null and void the assailed orders of the RTC dated January 2, 1995 and September 4, 1995, to the extent that the said orders admitted the petition in intervention and granted the issuance of the preliminary injunction; but it upheld the grant of the alias writ of possession, thus: 

WHEREFORE, the petition is GRANTED, and the assailed order of January 2, 1995 is declared NULL AND VOID except for the portion directing the issuance of an alias writ of possession. Likewise declared NULL AND VOID is the second assailed order of September 4, 1995denying the petitioner’s motion for reconsideration. Let an alias writ of possession be issued and executed/implemented by the public respondent without further delay.[27]

  

          The Court of Appeals defended its affirmation of the RTC’s grant of the alias writ of possession in NHA’s favor by saying that it was a necessary consequence after the earlier writ was left unserved to the party.  It further explained that NHA was entitled to the writ of possession as a matter of course after the lapse of the redemption period.           As to the RTC’s admission of respondents’ petition for intervention, the appellate court opined that it was improperly and erroneously made.  The Court of Appeals believed that the only recourse available to a mortgagor, in this case the respondents, in a foreclosure sale is to question the validity of the sale through a petition to set aside the sale and to cancel the writ of possession, a summary procedure provided for under Section 112 of the Land Registration Act.  It also observed that the grant of the preliminary injunction by the RTC was uncalled for as it would effectively defeat the right of NHA to possession, the latter having been entitled by virtue of the grant of the alias writ of possession.                   Respondents filed a motion for reconsideration.[28]  They alleged that since they raised the issue that their right of redemption had not prescribed, said fact should have changed the whole scenario such that the issuance of a writ of possession ceased to be summary in nature and was no longer ministerial.  Respondents then concluded that their right to redeem the properties against NHA’s right to the writ of possession must be threshed out in a hearing of the case on its merits.           With regard to the RTC Order dated August 4, 1992 granting the writ of possession which, according to the NHA, became final and executory, respondents argued that said order did not constitute res judicata so as to bar the filing of the petition for intervention since the said order was not a judgment on the merits that could attain finality.           Also, respondents would like the Court of Appeals to treat the petition for intervention not only as an opposition to the issuance of the alias writ of possession, but also as a proper remedy under Section 8 of Act No. 3135, as amended, in view of the various issues raised.            On November 27, 2000, the Court of Appeals, in its Amended Decision, reconsidered its earlier stance.  It declared that the period of redemption had not expired as the certificate of sale had not been registered or annotated in the original copies of the titles supposedly kept with the Register of Deeds since said titles were earlier razed by fire.  Taking its cue from Bass v. De la Ramawhere the Court purportedly made a

ruling that entry of a document, such as sale of real property, in the entry book is insufficient to treat such document as registered, unless the same had been annotated on the certificate of title; the Court of Appeals went on to say that the entry of the certificate of sale in the owner’s duplicate of the titles could not have been sufficient to register the same since anyone who would wish to check with the Register of Deeds would not see any annotation.  Thus, entry made on the owner’s duplicate of the titles cannot be considered notice that would bind the whole world. Having been deprived of their right of redemption, the Court of Appeals deemed it proper to allow respondents to intervene.  The dispositive part of the amended decision decrees: 

WHEREFORE, the motion for reconsideration is GRANTED. Our  decision dated February 24, 2000, is RECONSIDERED and SET ASIDE and the petition  DISMISSED.[29]

  

          Unfazed, NHA filed a motion for reconsideration, which the Court of Appeals denied in its July 19, 2001 Resolution, to wit: 

          ACCORDINGLY, the Motion for Reconsideration dated February 24, 2000 is DENIED for lack of merit.[30]

  Hence, the instant petition.

 In its memorandum, NHA tendered the following issues: 1.       WHETHER OR NOT THE ANNOTATION OF THE SHERIFF’S

CERTIFICATE OF SALE IN THE PRIMARY ENTRY BOOK OF THE REGISTER OF DEEDS AND ON THE OWNER’S DUPLICATE TITLE IS SUFFICIENT COMPLIANCE WITH THE REQUIREMENT OF LAW ON REGISTRATION.

 2.         WHETHER OR NOT THE CASE OF BASS VS. DE LA RAMA HAS

BEEN SUPERSEDED.[31]

  

Respondents, on the other hand, offered the following as issues: 

I 

WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT THE LOWER COURT DID NOT ACT WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN ADMITTING THE RESPONDENTS’ INTERVENTION AND GRANTING THE EQUITABLE WRIT OF INJUNCTION THEREBY DISMISSING THE PETITION FOR CERTIORARI AND PROHIBITION.

 II 

WHETHER  OR NOT THE INSTANT PETITION COMPLIES WITH THE REQUIREMENTS OF RULE 45 OF THE RULES OF COURT.[32]

  

          On the procedural aspect, respondents question NHA’s alleged failure to include in its petition copies of material portions of the record such as pleadings filed in the RTC and the Court of Appeals as required under Section 4, Rule 45 of the Rules of Court. Respondents also pointed out the purported defective verification of NHA in view of the fact that it merely stated that the one verifying had read the allegations of the petition and that the same were true and correct to the best of his knowledge.  According to respondents, such declarations were not in accordance with the rules which require that a verified pleading must state that the affiant had read the pleading and that the allegations therein were true and correct based on his personal knowledge and not only to the “best” of his knowledge.           

As to the merits, NHA stresses that the annotation and entry in the owner’s duplicate certificate of titles of the sheriff’s certificate of sale are sufficient compliance with the requirement of law on registration.  To support this, NHA refers to Land Registration Administration Circular No. 3 dated December 6, 1988, entitled “Entry and Provisional Registration of Instruments Pending Reconstitution of Title” which allegedly authorized all Registers of Deeds to accept for entry and provisional registration instruments affecting lost or destroyed certificates of title pending reconstitution of the original.  The legality and validity of the disputed registration on its duplicate copies of the sheriff’s certificate of sale, NHA insists, are backed by this Court’s ruling inDevelopment Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija,[33] where purportedly, this Court made a favorable interpretation of Section 56 of Presidential Decree No. 1529.  NHA says that the inscription of the sheriff’s certificate of sale only to the owner’s duplicate copies, but not to those in the custody of the register of deeds is justified as the latter were burned down.  Thus, it could not be blamed for the non-registration of the sale in the original copies.

           NHA faults the Court of Appeals’ reliance on Bass v. De la Rama since the ruling therein stating that entry and annotation of a sale instrument on the owner’s duplicate copy only as insufficient registration, was already abandoned in Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija, where it was allegedly ruled that the primary entry alone of the transaction produces the effect of registration so long as the registrant has complied with all that is required of him for purposes of entry and annotation.                   In contrast, respondents submit that annotation of the sheriff’s certificate of sale on the owner’s copy is inadequate to propel the running of the redemption period.  They firmly believe that for the sale instrument to be considered as registered, the inscription must be made on the reconstituted titles.

           Respondents disagree with NHA’s opinion that Bass v. De la Rama was superceded by Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija.  They are of the persuasion that the ruling in DBP pertains exclusively to the unique factual milieu and the issues attendant therein, but not to the instant case where Bass purportedly applies.  Respondents also assail NHA’s citation of Sta. Ignacia Rural Bank, Inc. v. Court of Appeals.[34]  According to them, said case finds no application to the instant controversy because the issue involved in the former was whether the redemption period should be reckoned from the date of the auction sale or the registration of the certificate of sale, which ostensibly is not the bone of contention in this case.           Ascribing NHA’s inaction to have the burned titles reconstituted, respondents assert that such neglect should not be used as a justification for the non-inscription in the original titles of the certificate of sale.  Additionally, respondents insist that the question of whether the redemption period should be reckoned from the inscription on the owner’s duplicate copies is a factual and legal issue that is appropriately adjudicated in a hearing on the merits of their petition in intervention, and not in the instant special civil action forcertiorari and prohibition which is limited in scope, namely, whether the RTC committed grave abuse of discretion amounting to lack of jurisdiction in admitting their petition in intervention.           Respondents reiterate that the issuance of the writ of possession prayed for by NHA before the RTC is no longer ministerial since it raised the issue of whether their period of redemption has already expired.  They cite Barican v. Intermediate Appellate Court[35] as the authority to this argument.                   We dwell first with the procedural issues before the main controversy. Respondents contend that the instant petition is dismissible on the ground that NHA failed to attach pleadings filed in the RTC and the Court of Appeals as required under Section 4, Rule 45 of the Rules of Court which partly provides: 

SEC. 4. Contents of petition. — The petition shall be filed in eighteen (18) copies, with the original copy intended for the court being indicated as such by the petitioner, and shall x x x (d) be accompanied by a clearly legible duplicate original, or a certified true copy of the judgment or final order or resolution certified by the clerk of court of the court a quo and the requisite number of plain copies thereof, and such material portions of the record as would support the petition; x x x.

  

In its petition, NHA attached the February 24, 2000 Decision, the November 27, 2000 Amended Decision, and the July 19, 2001 Resolution all of the Court of Appeals; copies of the transfer certificates of title of the disputed properties; and the June 13, 1994 Order of the Quezon City RTC ordering the reconstitution of the said titles.  This Court finds that NHA substantially complied with the requirements under Section 4 of

Rule 45.  The same conclusion was arrived at by this Court in Development Bank of the Philippines v. Family Foods Manufacturing Co., Ltd.[36] when it was faced with the same procedural objection, thus:

 As held by this Court in Air Philippines Corporation v. Zamora: 

[E]ven if a document is relevant and pertinent to the petition, it need not be appended if it is shown that the contents thereof can also [be] found in another document already attached to the petition. Thus, if the material allegations in a position paper are summarized in a questioned judgment, it will suffice that only a certified true copy of the judgment is attached.   

 Third, a petition lacking an essential pleading or part of the

case record may still be given due course or reinstated (if earlier dismissed) upon showing that petitioner later submitted the documents required, or that it will serve the higher interest of justice that the case be decided on the merits. Nevertheless, even if the pleadings and other supporting documents

were not attached to the petition, the dismissal is unwarranted because the CA records containing the promissory notes and the real estate and chattel mortgages were elevated to this Court. Without a doubt, we have sufficient basis to actually and completely dispose of the case.

 We must stress that cases should be determined on the merits, after all

parties have been given full opportunity to ventilate their causes and defenses, rather than on technicalities or procedural imperfections. In that way, the ends of justice would be served better. Rules of procedure are mere tools designed to expedite the decision or resolution of cases and other matters pending in court. A strict and rigid application of rules, resulting in technicalities that tend to frustrate rather than promote substantial justice, must be avoided. In fact, Section 6 of Rule 1 states that the Rules shall be liberally construed in order to promote their objective of ensuring the just, speedy and inexpensive disposition of every action and proceeding.

  

          Contrary to respondents’ assertion, NHA’s verification conforms to the rule. Section 4, Rule 7 of the Rules of Court states: 

SEC. 4. Verification. – Except when otherwise specifically required by law or rule, pleadings need not be under oath, verified or accompanied  by affidavit.

 

            A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his personal knowledge or based on authentic records.              A pleading required to be verified which contains a verification based on “information and belief,” or upon “knowledge, information and belief,” or lacks a proper verification, shall be treated as an unsigned pleading.  The reason for requiring verification in the petition is to secure an assurance that

the allegations of a pleading are true and correct; are not speculative or merely imagined; and have been made in good faith.[37]  To achieve this purpose, the verification of a pleading is made through an affidavit or sworn statement confirming that the affiant has read the pleading whose allegations are true and correct of the affiant's personal knowledge or based on authentic records.[38]

 The General Manager of NHA verified the petition as follows: 

3. I have read the allegations contained therein and that the same are true and correct to the best of my own personal knowledge.[39]

  

          A reading of the above verification reveals nothing objectionable about it.  The affiant confirmed that he had read the allegations in the petition which were true and correct based on his personal knowledge.  The addition of the words “to the best” before the phrase “of my personal knowledge” did not violate the requirement under Section 4 of Rule 7, it being sufficient that the affiant declared that the allegations in the petition are true and correct based on his personal knowledge. 

Now, as to the merits of the case.  The main issue before us is whether the annotation of the sheriff’s certificate of sale on the owner’s duplicate certificate of titles is sufficient registration considering that the inscription on the original certificates could not be made as the same got burned.           Jurisprudence is replete with analogous cases.  Of foremost importance is Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija[40] where the Court listed cases where the transaction or instrument was annotated not on the original certificate but somewhere else.  In that case, DBP, following the extrajudicial foreclosure sale where it emerged as the highest bidder, registered with the Register of Deeds the sheriff’s certificate of sale in its favor.  After it had paid the required fees, said transaction was entered in the primary entry book.  However, the annotation of the said transaction to the originals of the certificates of title could not be done because the same titles were missing from the files of the Registry.  This prompted DBP to commence reconstitution proceedings of the lost titles.  Four years had passed before the missing certificates of title were reconstituted.  When DBP sought the inscription of the four-year old sale transaction on the reconstituted titles, the Acting

Register of Deeds, being in doubt of the proper action to take, referred the matter to the Commissioner of the Land Registration Authority by consulta, the latter resolved against the annotation of the sale transaction and opined that said entry was “ineffective due to the impossibility of accomplishing registration at the time the document was entered because of the non-availability of the certificate (sic) of title involved.”[41]  In other words, annotation on the primary book was deemed insufficient registration. The Court disagreed with this posture.  Considering that DBP had paid all the fees and complied with all the requirements for purposes of both primary entry and annotation of the certificate of sale, the Court declared that mere entry in the primary book was considered sufficient registration since “[DBP] cannot be blamed that annotation could not be made contemporaneously with the entry because the originals of the subject certificates of title were missing and could not be found, since it had nothing to do with their safekeeping.  If anyone was responsible for failure of annotation, it was the Register of Deeds who was chargeable with the keeping and custody of those documents.”[42]  To buttress its conclusion, the Court reviewed the relevant jurisprudence starting from 1934.  The Court noted that before the Second World War, particularly in Government of the Philippine Islands v. Aballe,[43] the prevailing doctrine was an inscription in the book of entry even without the notation on the certificate of title was considered as satisfactory and produced all the effects which the law gave to its registration.  During the war, however, the Court observed that there was apparent departure from said ruling since in Bass v. De la Rama, the holding was that entry of an instrument in the primary entry book does not confer any legal effect without a memorandum thereof inscribed on the certificate of title.[44]  DBP noted that Bass v. De la Rama, however, survived only for a little while since “later cases appear to have applied the Aballe ruling that entry in the day book, even without the corresponding annotation on the certificate of title, is equivalent to, or produces the effect of, registration to voluntary transactions, provided the requisite fees are paid and the owner’s duplicates of the certificates of title affected are presented.”[45]

                   These later cases are Levin v. Bass[46] and Potenciano v. Dineros,[47] both of which involve the issue of whether entry in the day book of a deed of sale, payment of the fees, and presentation of the owner’s duplicate certificate of title constitute a complete act of registration.[48]

           Simply, respondents’ resort to Bass v. De la Rama is futile as the same was abandoned by the later cases, i.e., Bass,Potenciano and DBP.           In the recent case of Autocorp Group v. Court of Appeals,[49] the respondent was awarded the foreclosed parcels of land.  A sheriff’s certificate of sale was thereafter issued in its favor.  Thereafter, petitioners in that case filed a complaint before the RTC with a prayer for the issuance of an ex parte TRO aimed at preventing the Register of Deeds from registering the said certificate of sale in the name of the respondent and from taking possession of the subject properties.[50]  Before the RTC could issue a TRO, respondent presented the sheriff’s certificate of sale to the Register of Deeds who entered the same certificate in the primary book, even if the registration fee was paid only the following day.  Four days after, the RTC issued a TRO directing the Register of

Deeds to refrain from registering the said sheriff’s certificate of sale.  A preliminary injunction was thereafter issued as the TRO was about to expire.  The preliminary injunction was questioned by therein respondent. One of the main issues raised there was whether the entry of the certificate of sale in the primary book was equivalent to registration such that the TRO and the preliminary injunction issues would not lie anymore as the act sought to be restrained had become an accomplished act.  The Court held that the TRO and the preliminary injunction had already become moot and academic by the earlier entry of the certificate of sale in the primary entry book which was tantamount to registration, thus: 

In fine, petitioner’s prayer for the issuance of a writ of injunction, to prevent the register of deeds from registering the subject certificate of sale, had been rendered moot and academic by the valid entry of the instrument in the primary entry book. Such entry is equivalent to registration. Injunction would not lie anymore, as the act sought to be enjoined had already become a fait accompli or an accomplished act.[51]

  

          Indeed, the prevailing rule is that there is effective registration once the registrant has fulfilled all that is needed of him for purposes of entry and annotation, so that what is left to be accomplished lies solely on the register of deeds.  The Court thus once held: 

          Current doctrine thus seems to be that entry alone produces the effect of registration, whether the transaction entered is a voluntary or an involuntary one, so long as the registrant has complied with all that is required of him for purposes of entry and annotation, and nothing more remains to be done but a duty incumbent solely on the register of deeds.[52]

  

          In the case under consideration, NHA presented the sheriff’s certificate of sale to the Register of Deeds and the same was entered as Entry No. 2873 and said entry was further annotated in the owner’s transfer certificate of title.[53]  A year later and after the mortgagors did not redeem the said properties, respondents filed with the Register of Deeds an Affidavit of Consolidation of Ownership[54]after which the same instrument was presumably entered into in the day book as the same was annotated in the owner’s duplicate copy.[55]  Just like in DBP, Levin, Potenciano and Autocorp, NHA followed the procedure in order to have its sheriff’s certificate of sale annotated in the transfer certificates of title.  There would be, therefore, no reason not to apply the ruling in said cases to this one.  It was not NHA’s fault that the certificate of sale was not annotated on the transfer certificates of title which were supposed to be in the custody of the Registrar, since the same were burned.  Neither could NHA be blamed for the fact that there were no reconstituted titles available during the time of inscription as it had taken the necessary steps in having the same reconstituted as early as July 15, 1988.[56]  NHA did everything within its power to assert its right. 

          While it may be true that, in DBP, the Court ruled that “in the particular situation here obtaining, annotation of the disputed entry on the reconstituted originals of the certificates of title to which it refers is entirely proper and justified,” this does not mean, as respondents insist, that the ruling therein applies exclusively to the factual milieu and the issue obtaining in said case, and not to similar cases.  There is nothing in the subject declaration that categorically states its pro hac vice character.  For in truth, what the said statement really conveys is that the current doctrine that entry in the primary book produces the effect of registration can be applied in the situation obtaining in that case since the registrant therein complied with all that was required of it, hence, it was fairly reasonable that its acts be given the effect of registration, just as the Court did in the past cases. In fact the Court there continued with this pronouncement: 

To hold said entry ineffective, as does the appealed resolution, amounts to declaring that it did not, and does not, protect the registrant (DBP) from claims arising, or transactions made, thereafter which are adverse to or in derogation of the rights created or conveyed by the transaction thus entered.  That, surely, is a result that is neither just nor can, by any reasonable interpretation of Section 56 of Presidential Decree No. 1529 be asserted as warranted by its terms.[57]

  

          What is more, in Autocorp Group v. Court of Appeals,[58] the pertinent DBP ruling was applied, thereby demonstrating that the said ruling in DBP may be applied to other cases with similar factual and legal issues, viz: 

          Petitioners contend that the aforecited case of DBP is not apropos to the case at bar. Allegedly, in DBP, the bank not only paid the registration fees but also presented the owner’s duplicate certificate of title. We find no merit in petitioner’s posture x x x. 

x x x x 

            Like in DBP v. Acting Register of Deeds of Nueva Ecija, the instrument involved in the case at bar, is a sheriff’s certificate of sale, We hold now, as we held therein, that the registrant is under no necessity to present the owner’s duplicates of the certificates of title affected, for purposes of primary entry, as the transaction sought to be recorded is an involuntary transaction. 

x x x x x x x Such entry is equivalent to registration. Injunction would not lie

anymore, as the act sought to be enjoined had already become a fait accompli or an accomplished act.[59]

  

          Moreover, respondents’ stand on the non-applicability of the DBP case to other cases, absent any statement thereof to such effect, contravenes the principle of stare decisis which urges that courts are to apply principles declared in prior decisions that are substantially similar to a pending case.[60]

           Since entry of the certificate of sale was validly registered, the redemption period accruing to respondents commenced therefrom, since the one-year period of redemption is reckoned from the date of registration of the certificate of sale. [61]  It must be noted that on April 16, 1991, the sheriff’s certificate of sale was registered and annotated only on the owner’s duplicate copies of the titles and on April 16, 1992, the redemption period expired, without respondents having redeemed the properties.  In fact, on April 24, 1992, NHA executed an Affidavit of Consolidation of Ownership.  Clearly, respondents have lost their opportunity to redeem the properties in question.           As regards respondents’ allegation on the defect in the publication and notice requirements of the extrajudicial foreclosure sale, the same is unavailing.  The rule is that it is the mortgagor who alleges absence of a requisite who has the burden of establishing such fact.[62]  This is so because foreclosure proceedings have in their favor the presumption of regularity and the burden of evidence to rebut the same is on the party who questions it.[63] Here, except for their bare allegations, respondents failed to present any evidence to support them.  In addition, NHA stated in its Comment to Motion for Leave of Court to Intervene that it had complied with the publication of the Notice of Sheriff’s Sale in the Manila Times in the latter’s issues dated July 14, 21 and 28, 1990.[64]  It also claimed that an Affidavit of Publication of said newspaper was attached as Annex “B” in the said comment.[65] NHA also said that respondents had been furnished with a copy of the Notice of Sheriff’s Sale as shown at the bottom portion of said notice.[66]  From all these, it would tend to show that respondents’ aspersion of non-compliance with the requirements of foreclosure sale is a futile attempt to salvage its statutory right to redeem their foreclosed properties, which right had long been lost by inaction.           Considering that the foreclosure sale and its subsequent registration with the Register of Deeds were done validly, there is no reason for the non-issuance of the writ of possession.  A writ of possession is an order directing the sheriff to place a person in possession of a real or personal property, such as when a property is extrajudicially foreclosed.[67]  Section 7 of Act No. 3135 provides for the rule in the issuance of the writ of possession involving extrajudicial foreclosure sales of real estate mortgage, to wit:  

Sec. 7.  In any sale made under the provisions of this Act, the purchaser may petition the [Regional Trial Court] of the province or place where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act.  Such petition shall be made under oath and filed in the form of an ex parte motion in the registration or cadastral proceedings if the property is

registered, or in special proceedings in the case of property registered under the Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four Hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately.

  

This provision of law authorizes the purchaser in a foreclosure sale to apply for a writ of possession during the redemption period by filing an ex parte motion under oath for that purpose in the corresponding registration or cadastral proceeding in the case of property with Torrens title.[68]  Upon the filing of such motion and the approval of the corresponding bond, the law also in express terms directs the court to issue the order for a writ of possession.[69]

           The time-honored precept is that after the consolidation of titles in the buyer’s name, for failure of the mortgagor to redeem, the writ of possession becomes a matter of right.[70]  Its issuance to a purchaser in an extrajudicial foreclosure is merely a ministerial function.[71]  The writ of possession issues as a matter of course upon the filing of the proper motion and the approval of the corresponding bond.  The judge issuing the writ following these express provisions of law neither exercises his official discretion nor judgment.[72]  As such, the court granting the writ cannot be charged with having acted without jurisdiction or with grave abuse of discretion.[73]  To accentuate the writ’s ministerial character, the Court disallowed injunction to prohibit its issuance despite a pending action for annulment of mortgage or the foreclosure itself.[74]

           Believing that the instant case does not come within the penumbra of the foregoing rule, respondents resort to the ruling inBarican v. Intermediate Appellate Court.[75]  Unfortunately for them, the instant case does not even come close to the cited case. There, the Court deemed it inequitable to issue a writ of possession in favor of the purchaser in the auction sale considering that the property involved was already in the possession of a third person by virtue of a deed of sale with assumption of mortgage even before the purchaser could register the sheriff’s certificate of sale.  Also, the auction buyer therein unreasonably deferred to exercise its right to acquire possession over the property.  These circumstances are not present in the instant case.

 Moreover, in Fernandez v. Espinoza,[76] the Court refused to apply the ruling

in Barican v. Intermediate Appellate Court[77] and Cometa v. Intermediate Appellate Court,[78] two cases which are exemptions to the stated rule, reasoning that: 

In Cometa, which actually involved execution of judgment for the prevailing party in a damages suit, the subject properties were sold at the public auction at an unusually lower price, while in Barican, the mortgagee bank took five years from the time of foreclosure before filing the petition for the issuance of writ of possession. We have considered these equitable and peculiar circumstances in Cometa and Barican to justify the relaxation of the otherwise absolute rule. None of these exceptional circumstances, however, attended herein so as to place the instant case in the same stature as that of Cometa and Barican. Instead, the ruling in Vaca v. Court of Appeals is on all fours with the present petition. In Vaca, there is no dispute that the property was not redeemed within one year from the registration of the extrajudicial foreclosure sale; thus, the mortgagee bank acquired an absolute right, as purchaser, to the issuance of the writ of possession. Similarly, UOB, as the purchaser at the auction sale in the instant case, is entitled as a matter of right, to the issuance of the writ of possession.

  

Just as in Fernandez, this Court does not see any compelling reason to veer away from the established rule.

 In fine, this Court finds that the Court of Appeals committed reversible error in

ruling that the annotation of NHA’s sheriff’s certificate of sale on the duplicate certificates of title was not effective registration and in holding that respondents’ redemption period had not expired.

 WHEREFORE, premises considered, the instant petition is

hereby GRANTED.  The Amended Decision of the Court of Appeals dated November 27, 2000 is SET ASIDE.

 SO ORDERED.

THIRD DIVISION

G.R. No. 185063               July 23, 2009

SPS. LITA DE LEON and FELIX RIO TARROSA, Petitioners, vs.ANITA B. DE LEON, DANILO B. DE LEON, and VILMA B. DE LEON, Respondents.

D E C I S I O N

VELASCO, JR., J.:

The Case

Before us is a Petition for Review on Certiorari under Rule 45 assailing and seeking to set aside the Decision1 and Resolution2 dated August 27, 2008 and October 20, 2008, respectively, of the Court of Appeals (CA) in CA-G.R. CV No. 88571. The CA affirmed with modification the October 4, 2006 Decision3 in Civil Case No. Q04-51595 of the Regional Trial Court (RTC), Branch 22 in Quezon City.

The Facts

On July 20, 1965, Bonifacio O. De Leon, then single, and the People’s Homesite and Housing Corporation (PHHC) entered into a Conditional Contract to Sell for the purchase on installment of a 191.30 square-meter lot situated in Fairview, Quezon City. Subsequently, on April 24, 1968, Bonifacio married Anita de Leon in a civil rite officiated by the Municipal Mayor of Zaragosa, Nueva Ecija. To this union were born Danilo and Vilma.

Following the full payment of the cost price for the lot thus purchased, PHHC executed, on June 22, 1970, a Final Deed of Sale in favor of Bonifacio. Accordingly, Transfer Certificate of Title (TCT) No. 173677 was issued on February 24, 1972 in the name of Bonifacio, "single."

Subsequently, Bonifacio, for PhP 19,000, sold the subject lot to her sister, Lita, and husband Felix Rio Tarrosa (Tarrosas), petitioners herein. The conveying Deed of Sale dated January 12, 1974 (Deed of Sale) did not bear the written consent and signature of Anita.

Thereafter, or on May 23, 1977, Bonifacio and Anita renewed their vows in a church wedding at St. John the Baptist Parish in San Juan, Manila.

On February 29, 1996, Bonifacio died.

Three months later, the Tarrosas registered the Deed of Sale and had TCT No. 173677 canceled. They secured the issuance in their names of TCT No. N-173911 from the Quezon City Register of Deeds.

Getting wind of the cancellation of their father’s title and the issuance of TCT No. N-173911, Danilo and Vilma filed on May 19, 2003 a Notice of Adverse Claim before the Register of Deeds of Quezon City to protect their rights over the subject property. Very much later, Anita, Danilo, and Vilma filed a reconveyance suit before the RTC in Quezon City. In their complaint, Anita and her children alleged, among other things, that fraud attended the execution of the Deed of Sale and that subsequent acts of Bonifacio would show that he was still the owner of the parcel of land. In support of their case, they presented, inter alia, the following documents:

a. A Real Estate Mortgage execution by Bonifacio in favor of spouses Cesar Diankinay and Filomena Almero on July 22, 1977.

b. A Civil Complaint filed by Bonifacio against spouses Cesar Diankinay and Filomena Almero on November 27, 1979 for nullification of the Real Estate Mortgage.

c. The Decision issued by the Court of First Instance of Rizal, Quezon City, promulgated on July 30, 1982, nullifying the Real Estate Mortgage.4

The Tarrosas, in their Answer with Compulsory Counterclaim, averred that the lot Bonifacio sold to them was his exclusive property inasmuch as he was still single when he acquired it from PHHC. As further alleged, they were not aware of the supposed marriage between Bonifacio and Anita at the time of the execution of the Deed of Sale.

After several scheduled hearings, both parties, assisted by their respective counsels, submitted a Joint Stipulation of Facts with Motion, to wit:

1. The parties have agreed to admit the following facts:

a. Bonifacio O. De Leon, while still single x x x, purchased from the [PHHC] through a Conditional Contract to Sell on July 20, 1965 a parcel of land with an area of 191.30 square meters situated in Fairview, Quezon City for P841.72;

b. On April 24, 1968, Bonifacio O. De Leon married plaintiff Anita B. De Leon before the Municipal Mayor of Zaragosa, Nueva Ecija. Both parties stipulate that said marriage is valid and binding under the laws of the Philippines;

c. On June 22, 1970, Bonifacio O. De Leon paid [PHHC] the total amount of P1,023.74 x x x. The right of ownership over the subject parcel of land was transferred to the late Bonifacio O. De Leon on June 22, 1970, upon the full payment of the total [price] of P1,023.74 and upon execution of the Final Deed of Sale;

d. After full payment, Bonifacio O. De Leon was issued [TCT] No. 173677 on February 24, 1972;

e. On January 12, 1974, Bonifacio O. De Leon executed a Deed of Sale in favor of defendants-spouses Felix Rio Tarrosa and Lita O. De Leon disposing the parcel of land under TCT No. 173677 for valuable consideration amount of P19,000.00 and subscribed before Atty. Salvador R. Aguinaldo who was commissioned to [notarize] documents on said date. The parties stipulate that the Deed of Sale is valid and genuine. However, plaintiff Anita De Leon was not a signatory to the Deed of Sale executed on January 12, 1974;

f. That plaintiff Anita B. De Leon and the late Bonifacio O. De Leon were married in church rites on May 23, 1977 x x x;

g. The late Bonifacio O. De Leon died on February 29, 1996 at the UST Hospital, España, Manila;

h. The said "Deed of Sale" executed on January 12, 1974 was registered on May 8, 1996 before the Office of the Register of Deeds of Quezon City and [TCT] No. N-173911 was issued to Lita O. De Leon and Felix Rio Tarrosa.5

The Ruling of the Trial Court

On October 4, 2006, the RTC, on the finding that the lot in question was the conjugal property of Bonifacio and Anita, rendered judgment in favor of Anita and her children. The dispositive portion of the decision reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiffs and against defendants in the following manner:

(1) Declaring the Deed of Sale dated January 12, 1974 executed by the late Bonifacio O. De Leon in favor of defendants-spouses Lita De Leon and Felix Rio Tarrosa void ab initio;

(2) Directing the Register of Deed of Quezon City to cancel Transfer Certificate of Title No. N-173911 in the name of "Lita O. De Leon, married to Felix Rio Tarrosa" and restore Transfer Certificate of Title No. 173667 in the name of "Bonifacio O. De Leon";

(3) Ordering the defendants-spouses to pay plaintiffs the following sums:

(a) P25,000.00 as moral damages;

(b) P20,000.00 as exemplary damages;

(c) P50,000.00 as attorney’s fees plus appearance fee of P2,500.00 per court appearance;

(d) Costs of this suit.

SO ORDERED.

Aggrieved, the Tarrosas appealed to the CA. As they would submit, the RTC erred:

(1) in finding for the plaintiffs-appellees by declaring that the land subject matter of the case is conjugal property;

(2) in not declaring the land as the exclusive property of Bonifacio O. De Leon when sold to defendant-appellants;

(3) in ruling that defendant-appellants did not adduce any proof that the property was acquired solely by the efforts of Bonifacio O. De Leon;

(4) in declaring that one-half of the conjugal assets does not vest to Bonifacio O. De Leon because of the absence of liquidation;

(5) in cancelling TCT No. N-173911 and restored TCT No. [173677] in the name of Bonifacio O. De Leon;

(6) in awarding moral and exemplary damages and attorney’s fees to the plaintiffs-appellees.6

The Ruling of the Appellate Court

On August 27, 2008, the CA rendered a decision affirmatory of that of the RTC, save for the award of damages, attorney’s fees, and costs of suit which the appellate court ordered deleted. The fallo of the CA decision reads:

WHEREFORE, in view of the foregoing, the assailed decision dated October 4, 2006, of the Regional Trial Court, Branch 22, Quezon City in Civil Case No. Q-04-51595 is hereby AFFIRMED with MODIFICATION, in that the award of moral and exemplary damages as well as attorney’s fees, appearance fee and costs of suit are hereby DELETED.

SO ORDERED.

Just like the RTC, the CA held that the Tarrosas failed to overthrow the legal presumption that the parcel of land in dispute was conjugal. The appellate court held further that the cases they cited were inapplicable.

As to the deletion of the grant of moral and exemplary damages, the CA, in gist, held that no evidence was adduced to justify the award. Based on the same reason, it also deleted the award of attorney’s fees and costs of suit.

The Tarrosas moved but was denied reconsideration by the CA in its equally assailed resolution of October 20, 2008.

Hence, they filed this petition.

The Issues

I

Whether the [CA] gravely erred in concluding that the land purchased on installment by Bonifacio O. De Leon before marriage although some installments were paid during the marriage is conjugal and not his exclusive property.

II

Whether the [CA] gravely erred in ruling that the Lorenzo, et al. vs. Nicolas, et al., and Alvarez vs. Espiritu cases do not apply in the case at bar because in the latter the land involved is not a friar land unlike in the former.

III

Whether the [CA] gravely erred in affirming the decision of the trial court a quo which ruled that petitioners did not adduce any proof that the land was acquired solely by the efforts of Bonifacio O. De Leon.

IV

Whether the court of appeals gravely erred in affirming the decision of the trial court which ruled that one-half (1/2) of the conjugal assets do not vest to Bonifacio O. De Leon because of the absence of liquidation.

Our Ruling

The petition lacks merit.

The Subject Property is theConjugal Property of Bonifacio and Anita

The first three issues thus raised can be summed up to the question of whether or not the subject property is conjugal.

Petitioners assert that, since Bonifacio purchased the lot from PHHC on installment before he married Anita, the land was Bonifacio’s exclusive property and not conjugal, even though some installments were paid and the title was issued to Bonifacio during the marriage. In support of their position, petitioners cite Lorenzo v. Nicolas7 and Alvarez v. Espiritu.8

We disagree.

Article 160 of the 1950 Civil Code, the governing provision in effect at the time Bonifacio and Anita contracted marriage, provides that all property of the marriage is presumed to belong to the conjugal partnership unless it is proved that it pertains exclusively to the husband or the wife. For the presumption to arise, it is not, as Tan v. Court of Appeals9 teaches, even necessary to prove that the property was acquired with funds of the partnership. Only proof of acquisition during the marriage is needed to raise the presumption that the property is conjugal. In fact, even when the manner in which the properties were acquired does not appear, the presumption will still apply, and the properties will still be considered conjugal.10

In the case at bar, ownership over what was once a PHHC lot and covered by the PHHC-Bonifacio Conditional Contract to Sell was only transferred during the marriage of Bonifacio and Anita. It is well settled that a conditional sale is akin, if not equivalent, to a contract to sell. In both types of contract, the efficacy or obligatory force of the vendor’s obligation to transfer title is subordinated to the happening of a future and uncertain event, usually the full payment of the purchase price, so that if the suspensive condition does not take place, the parties would stand as if the conditional obligation had never existed.11 In other words, in a contract to sell ownership is retained by the seller and is not passed to the buyer until full payment of the price, unlike in a contract of sale where title passes upon delivery of the thing sold.12

Such is the situation obtaining in the instant case. The conditional contract to sell executed by and between Bonifacio and PHHC on July 20, 1965 provided that ownership over and title to the property will vest on Bonifacio only upon execution of the final deed of sale which, in turn, will be effected upon payment of the full purchase price, to wit:

14. Titles to the property subject of this contract remains with the CORPORATION and shall pass to, and be transferred in the name of the APPLICANT only upon the execution of the final Deed of Sale provided for in the next succeeding paragraph.

15. Upon the full payment by the APPLICANT of the price of the lot above referred to together with all the interest due thereon, taxes and other charges, and upon his faithful compliance with all the conditions of this contract the CORPORATION agrees to execute in favor of the APPLICANT a final deed of sale of the aforesaid land, and the APPLICANT agrees to accept said deed, as full performance by the CORPORATION of its covenants and undertakings hereunder.13 x x x

Evidently, title to the property in question only passed to Bonifacio after he had fully paid the purchase price on June 22, 1970. This full payment, to stress, was made more than two (2) years after his marriage to Anita on April 24, 1968. In net effect, the property was acquired during the existence of the marriage; as such, ownership to the property is, by law, presumed to belong to the conjugal partnership.

Such presumption is rebuttable only with strong, clear, categorical, and convincing evidence.14 There must be clear evidence of the exclusive ownership of one of the spouses,15 and the burden of proof rests upon the party asserting it.16

Petitioners’ argument that the disputed lot was Bonifacio’s exclusive property, since it was registered solely in his name, is untenable. The mere registration of a property in the name of one spouse does not destroy its conjugal nature.17 What is material is the time when the property was acquired.

Thus, the question of whether petitioners were able to adduce proof to overthrow the presumption is a factual issue best addressed by the trial court. As a matter of long and sound practice, factual determinations of the trial courts,18 especially when confirmed by the appellate court, are accorded great weight by the Court and, as rule, will not be

disturbed on appeal, except for the most compelling reasons.19 Petitioners have not, as they really cannot, rebut the presumptive conjugal nature of the lot in question. In this regard, the Court notes and quotes with approval the following excerpts from the trial court’s disposition:

The defendants, however, did not adduce any proof that the property in question was acquired solely by the efforts of [Bonifacio]. The established jurisprudence on the matter leads this Court to the conclusion that the property involved in this dispute is indeed the conjugal property of the deceased [Bonifacio] De Leon.

In fact, defendant even admitted that [Bonifacio] brought into his marriage with plaintiff Anita the said land, albeit in the concept of a possessor only as it was not yet registered in his name. The property was registered only in 1972 during the existence of the marriage. However, the absence of evidence on the source of funding has called for the application of the presumption under Article 160 in favor of the plaintiffs.20

The cases petitioners cited are without governing applicability to this case simply because they involved a law specifically enacted to govern the disposition of and ownership of friar lands. In Lorenzo, the Court held that the pervading legislative intent of Act No. 1120 is "to sell the friar lands acquired by the Government to actual settlers and occupants of the same."21 The Court went on further to say in Alvarez that "under the Friar Lands Act of 1120, the equitable and beneficial title to the land passes to the purchaser the moment the first installment is paid and a certificate of sale is issued."22 Plainly, the said cases are not applicable here considering that the disputed property is not friar land.1awph!1

There can be no quibbling that Anita’s conformity to the sale of the disputed lot to petitioners was never obtained or at least not formally expressed in the conveying deed. The parties admitted as much in their Joint Stipulation of Facts with Motion earlier reproduced. Not lost on the Court of course is the fact that petitioners went to the process of registering the deed after Bonifacio’s death in 1996, some 22 years after its execution. In the interim, petitioners could have had work—but did not—towards securing Anita’s marital consent to the sale.

It cannot be over-emphasized that the 1950 Civil Code is very explicit on the consequence of the husband alienating or encumbering any real property of the conjugal partnership without the wife’s consent.23 To a specific point, the sale of a conjugal piece of land by the husband, as administrator, must, as a rule, be with the wife’s consent. Else, the sale is not valid. So it is that in several cases we ruled that the sale by the husband of property belonging to the conjugal partnership without the consent of the wife is void ab initio, absent any showing that the latter is incapacitated, under civil interdiction, or like causes. The nullity, as we have explained, proceeds from the fact that sale is in contravention of the mandatory requirements of Art. 166 of the Code.24 Since Art. 166 of the Code requires the consent of the wife before the husband may alienate or encumber any real property of the conjugal partnership, it follows that the acts or

transactions executed against this mandatory provision are void except when the law itself authorized their validity.25

Accordingly, the Deed of Sale executed on January 12, 1974 between Bonifacio and the Tarrosas covering the PHHC lot is void.

Interest in the Conjugal Partnership IsMerely Inchoate until Liquidation

As a final consideration, the Court agrees with the CA that the sale of one-half of the conjugal property without liquidation of the partnership is void. Prior to the liquidation of the conjugal partnership, the interest of each spouse in the conjugal assets is inchoate, a mere expectancy, which constitutes neither a legal nor an equitable estate, and does not ripen into a title until it appears that there are assets in the community as a result of the liquidation and settlement.26 The interest of each spouse is limited to the net remainder or "remanente liquido" (haber ganancial) resulting from the liquidation of the affairs of the partnership after its dissolution.27 Thus, the right of the husband or wife to one-half of the conjugal assets does not vest until the dissolution and liquidation of the conjugal partnership, or after dissolution of the marriage, when it is finally determined that, after settlement of conjugal obligations, there are net assets left which can be divided between the spouses or their respective heirs.28

Therefore, even on the supposition that Bonifacio only sold his portion of the conjugal partnership, the sale is still theoretically void, for, as previously stated, the right of the husband or the wife to one-half of the conjugal assets does not vest until the liquidation of the conjugal partnership.

Nevertheless, this Court is mindful of the fact that the Tarrosas paid a valuable consideration in the amount of PhP 19,000 for the property in question. Thus, as a matter of fairness and equity, the share of Bonifacio after the liquidation of the partnership should be liable to reimburse the amount paid by the Tarrosas. It is a well-settled principle that no person should unjustly enrich himself at the expense of another.29

WHEREFORE, the petition is DENIED. The CA Decision in CA-G.R. CV No. 88571 is AFFIRMED. Costs against petitioners.

SO ORDERED.

PRESBITERO J. VELASCO, JR.Associate Justice

THIRD DIVISION

[G.R. No. 105760.  July 7, 1997]

PHILIPPINE NATIONAL BANK, petitioner, vs. COURT OF APPEALS, HON. JUDGE OF THE REGIONAL TRIAL COURT OF GAPAN, NUEVA ECIJA, BR. 34, and NILDEFONSO MONTANO, respondents.

D E C I S I O N

FRANCISCO, J.:

This is a Petition for Review on Certiorari of the Resolution of the Court of Appeals (CA) dated June 3, 1992, in the case docketed as C.A.-G.R. SP No. 23573, entitled Philippine National Bank vs. Hon. Judge of the Regional Trial Court of Gapan, Nueva Ecija, Branch 34, et. al.  In said Resolution, the CA granted private respondent Nildefonso Montano’s Motion for Reconsideration of its Decision dated September 13, 1991, thereby affirming the Order of the Regional Trial Court of Gapan, Nueva Ecija, Branch 34, dissolving the Writ of Possession issued in favor of petitioner Philippine National Bank (PNB).

The facts, as culled from the parties’ pleadings, are as follows:

In 1978, spouses Crisanto de la Cruz and Pepita Montano mortgaged two parcels of land to petitioner PNB for a loan of Twenty-four Thousand Pesos (P24,000.00).  Said parcels of land were covered by Transfer Certificate of Title No. NT-117562, and more particularly described as:

1.  Lot 614-F, Psd 36331 of the Cabiao Cadastre, containing an area of 3,869 square meters, and

2.  Lot 614-H, Psd 36331 of Cabiao Cadastre, containing an area of 4,078 square meters.

On October 12, 1984, petitioner PNB extrajudicially foreclosed the mortgage and was the only bidder at the public auction sale.  Thus, on the same day, a Certificate of Sale over said lots was issued in favor of PNB; this fact was subsequently annotated on TCT No. NT-117562 on November 28, 1984.

On September 24, 1986, petitioner PNB filed before the Regional Trial Court of Gapan, Nueva Ecija, Branch 34, a Petition for the Issuance of a Writ of Possession, alleging therein that by virtue of a foreclosure sale wherein it purchased the subject properties and due to the mortgagors’ (spouses Crisanto de la Cruz and Pepita Montano) failure to redeem the property within a period of one year, it had become the absolute owner of the same and is entitled to a Writ of Possession.  Said petition was granted by the RTC and the writ prayed for was issued on November 20, 1986.

Before implementation of the writ, herein private respondent Montano filed a Motion for the Dissolution of the Writ of Possession on December 9, 1986, alleging that (1) he was instituted as tenant on the subject property even before 1972 by the former owners of the land; (2) the two lots are the subject matters of CAR Case No. 2387 before the Regional Trial Court of Gapan, Nueva Ecija, Branch 36, which he instituted on January 18, 1983 against spouses Crisanto de la Cruz and Pepita Montano; (3) after the foreclosure of the subject land, his (Montano’s) counsel wrote PNB of the pending case

between the mortgagors and private respondent as tenant on the land; (4) the issuance of said Writ in PNB’s favor would work grave injustice to him and violate his rights under P.D. 27, P.D. 36, P.D. 583, and other laws and legal issuances on land reform; (5) he was issued a certification by the Cabiao-San Isidro Agrarian Reform Team No. 03-04-028 that he is an agricultural lessee in the subject landholding and another certification that he is an active member of the Samahang Nayon; and (6) in line with the ruling in “Clapano vs. Gapultos” (132 SCRA 429) that possession of property is given to a purchaser in Extra-Judicial foreclosure unless a third-party is actually holding the property adversely to the judgment debtor, he is to be considered a “third person”.

After hearing, the RTC granted private respondent Montano’s motion to dissolve the writ of possession in an Order dated August 28, 1990. Petitioner PNB appealed said Order to this Court, but pursuant to a Resolution dated November 7, 1990, the case was referred to the CA.

On September 13, 1991, the CA rendered judgment in favor of petitioner PNB.  However, said court reversed itself when, upon motion by private respondent Montano, it issued a Resolution dated June 3, 1993, reconsidering its Decision and affirming the RTC’s Order of August 28, 1990 dissolving the Writ of Possession.  Hence, this petition for Review on Certiorari, wherein petitioner PNB alleges that the decision of the CA is not in accordance with law and jurisprudence, contending that:

“I.

THE COURT OF APPEALS ERRED IN HOLDING THAT PNB’S RIGHT TO A WRIT OF POSSESSION TO THE LOTS IS PREMATURE BECAUSE PNB AS BUYER ON FORECLOSURE SALE HAS NOT YET CONSOLIDATED ITS TITLE TO THE LOTS WHICH COULD HAVE VESTED UPON IT ABSOLUTE OWNERSHIP AND POSSESSION.  WITHOUT REDEMPTION BY THE MORTGAGORS, ALMOST EIGHT (8) YEARS ALREADY LAPSED FROM REGISTRATION OF THE CERTIFICATE OF SALE ON NOVEMBER 12, 1984 TO THE CHALLENGED JUNE 12, 1992 COURT OF APPEALS RESOLUTION.  CONSOLIDATION OF TITLE IS NOT A CONDITION PRECEDENT TO PNB’S RIGHT TO THE WRIT AS OWNER UNDER ART. 428 AND 429 OF THE CIVIL CODE, REPUBLIC ACT NO. 3135, AS AMENDED, AND P.D. NO. 385.  IT IS THE MINISTERIAL DUTY OF THE COURT TO PUT PNB IN POSSESSION OF THE LOTS DURING AND AFTER THE REDEMPTION PERIOD.

II.

THE COURT OF APPEALS ERRED IN HOLDING THAT THE SUPERVENING JULY 23, 1991 DECISION IN THE AGRARIAN SUIT (IN RTC GAPAN, BR. 36, CIVIL CASE NO. 2387, FILED BY MONTANO AGAINST CRISANTO DE LA CRUZ AND PEPITA MONTANO ONLY) ADVERSELY AFFECTED PNB, AS PROCEEDINGS IN FILE NO. 0058 (IN RTC GAPAN, BRANCH 34), THE PRECURSOR OF THIS APPEALED CASE, ON INTERVENTION BY MONTANO ON DECEMBER 15, 1986, BECAME ADVERSARIAL, AS ON SAID DATE PNB CANNOT ANYMORE IGNORE MONTANO’S ACTUAL POSSESSION OF THE LOTS, AND AS ACTUAL KNOWLEDGE BY PNB OF MONTANO’S POSSESSION

DECLARED LEGITIMATE AND RIGHTFUL BY SAID DECISION, IS EQUIVALENT TO REGISTRATION.  HAVING RELIED ON TCT NO NT-117562 IN GOOD FAITH AND FOR VALUE, PNB’S RIGHT TO THE LOTS IS INCONTESTABLE.  MONTANO’S TENANCY CLAIM WHICH DOES NOT APPEAR ON THE TITLE, IS NOT OTHERWISE KNOWN TO PNB ON ITS OCULAR INSPECTION IN 1978, AND IS BARRED BY LACHES, NEGLIGENCE AND ESTOPPEL.  DESPITE KNOWLEDGE THAT THE LOTS WERE MORTGAGED AND SOLD TO PNB, MONTANO CONVENIENTLY FAILED TO IMPLEAD THE BANK IN THE AGRARIAN SUIT; PNB IS NOT BOUND BY THE DECISION IN SAID SUIT; AND IF IN FACT HE WERE A LEGITIMATE TENANT, HIS RIGHTS CAN BE AMPLY VENTILATED IN A PROPER PROCEEDING.  MONTANO’S STAY ON THE LOT BEING ILLEGAL, HE IS HARDLY ‘THE THIRD PERSON HOLDING THE PROPERTY ADVERSE TO THE MORTGAGOR’.

III.

THE COURT OF APPEALS ERRED IN DEPRIVING PNB OF ITS RIGHT AS OWNER TO TAKE POSSESSION OF THE LOTS AND, VIRTUALLY, TO SELL THE SAME CONTRARY TO THE CONSTITUTIONAL GUARANTEE OF RIGHT TO PROPERTY (ART. III, SEC. 1, 1987 CONSTITUTION).  THE SOCIAL JUSTICE PROVISION OF THE 1987 CONSTITUTION CITED BY THE COURT OF APPEALS IS NOT APPLICABLE.”

Private respondent Montano, on the other hand, argued in his Comment that even the jurisprudence cited by petitioner PNB states that the writ of possession will issue only after confirmation of title (F. David Enterprises v. Insular Bank, 191 SCRA 516; GSIS vs. Court of Appeals, 145 SCRA 341) or during the redemption period provided a proper motion has been filed, a bond approved, and there is no third person involved (Banco Filipino Savings and Mortgage Bank vs. IAC, 142 SCRA 46; PNB vs. Midpantao Adil, 118 SCRA 110).  He likewise acknowledged petitioner PNB as the owner of the subject land, but asserted that he (Montano) remains to be its lawful possessor as tenant of the landholding who has been given security of tenure by existing laws.

Later, in its Reply to private respondent Montano’s Comment, petitioner PNB manifested that it has consolidated its title over the land and a new Transfer Certificate of Title has been issued in its name.  Hence, the defect of prematurity has been cured, and there exists no obstacle to the issuance of a Writ of Possession in its favor.

We find the petition devoid of merit.

Granting that petitioner PNB’s title over the subject property has been consolidated or confirmed in its favor, it is still not entitled to a writ of possession, as the same may be issued in extrajudicial foreclosure of real estate mortgage only if the debtor is in possession and no third person had intervened.[1] Such requisite is evidently lacking in the case at bar, as it has been established that private respondent Montano has been in possession and finally adjudged as the tenant on the landholding in question.

It is also the erroneous belief of petitioner PNB that the decision in the agrarian case is being enforced against it, and so contends that as it was not impleaded as party in the agrarian suit, the judgment therein cannot affect petitioner PNB.  The CA merely stated

that "the rendition of the decision in the CAR case is a supervening event which proves that Nildefonso Montano is indeed a tenant of the landholding.”  No pronouncement was made whatsoever as to whether CAR decision is binding on petitioner PNB, but merely considered said CAR decision as evidence in support of private respondent Montano’s allegation that he is a tenant on the landholding in question.

Moreover, even if petitioner PNB had not been impleaded as party defendant in the agrarian suit, Sec. 49 (b), Rule 39 of the Rules of Court provides that the judgment, with respect to the matter directly adjudged therein, is conclusive between the parties and their successors in interest by title subsequent to the commencement of the action.  The mortgage was extrajudicially foreclosed only on October 12, 1984, the Certificate of Sale in favor of petitioner issued on the same day, and registered on November 28, 1984, while the agrarian case was instituted on January 18, 1983, prior to the levy; hence, petitioner took title to the subject property subsequent to the commencement of the action.  The judgment in the agrarian suit, therefore, is conclusive upon petitioner PNB.

Petitioner PNB further insists that as absolute owner of the properties, under Art. 428 and 429 of the New Civil Code, it has the right to possess and dispose of the same.  These very provisions cited, however, show that the exercise of the rights of ownership are subject to limitations that may be imposed by law.  In the instant case, the Tenancy Act and P.D. 27 have imposed limitations on petitioner PNB’s exercise of the rights of ownership.  This has been discussed at length in this Court’s Decision in the case of “Tanpingco vs. IAC,”[2] where we held that:

“Under Art. 428 of the Civil Code, the owner has the right to dispose of a thing without other limitations than those established by law.  As an incident of ownership, therefore, there is nothing to prevent a landowner form donating his naked title to the land.  However, the new owner must respect the rights of the tenant.  Sec. 7 of R.A. No. 3844, as amended (Code of Agrarian Reforms of the Philippines) gives the agricultural lessee the right to work on the landholding once the leasehold relationship is established.

x x x          x x x     x x x

“[S]ecurity of tenure is a legal concession to agricultural lessees which they value as life itself and deprivation of their landholdings is tantamount to deprivation of their only means of livelihood.  Also, under Sec. 10 of the same Act, the law explicitly provides that the leasehold relation is not extinguished by the alienation or transfer of legal possession of the landholding.”  (Underscoring ours)

This doctrine has been reiterated in “Endaya vs. Court of Appeals”,[3] where this Court further held that the agricultural lessee’s rights are enforceable against the transferee or the landowner’s successor-in-interest.  Therefore, as the adjudged legitimate tenant on the land in question, private respondent Montano may enforce his right of possession against petitioner PNB, whose contention that private respondent Montano is illegally occupying the property lacks basis in fact and in law.

Petitioner PNB may not, by way of defense, argue that its right over the land is superior to private respondent Montano’s claim on the subject properties since the agricultural lease was not annotated on the Transfer Certificate of Title and, therefore, it dealt with the properties in good faith.  Even if the fact of tenancy had not been reflected on the title, petitioner PNB admitted that before they consented to the mortgage, an ocular inspection was conducted on the landholding on the occasion of which, petitioner PNB’s Credit Investigator already found private respondent Montano staying on the land and even interviewed the latter.  In answer to the questions propounded by said Investigator, private respondent Montano allegedly said that he had been allowed to stay on the property in question because he was ejected from the adjacent parcel of land which he used to till.  The land being an agricultural one, and considering the ocular inspection conducted sometime in 1978 when P.D. 27 had been in effect for some time, petitioner PNB’s suspicion that the land was tenanted should have been aroused by the existence of a farmer on the land other than the mortgagors themselves.  It cannot be denied, therefore, that petitioner PNB had been put on notice by its actual knowledge of another person possessing the land, no matter what the given reason may have been for private respondent Montano’s occupancy of the properties in question.

Furthermore, as purchaser at a public auction, petitioner PNB was only substituted to and acquired the right, title, interest and claim of the judgment debtor or mortgagor to the property as of the time of the levy.[4] In this case, the only remaining right of the mortgagors (spouses Crisanto de la Cruz and Pepita Montano) at the time of levy is the right to be paid a reasonable price for the land they owned as mandated by P.D. 27.  That is the only right which petitioner PNB acquired as the new absolute owner of the land.

From the foregoing, it is evident that petitioner PNB is not entitled to a Writ of Possession, as possession of the land in question has been granted by law to private respondent Montano as tenant of subject landholding.

WHEREFORE, premises considered, judgment is hereby rendered DENYING the petition.  Costs against petitioner.

SO ORDERED.

Narvasa, C.J., (Chairman), Melo, and Panganiban, JJ., concur.Davide, Jr., J., did not take part in the deliberation; was on sick leave.