Property Cases Batch 6

8/13/2019 Property Cases Batch 6

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SECOND DIVISION

SPOUSES EDESITO and G.R. No. 141964

CONSORCIA RAGASA,

Petitioners, Present:

PUNO, J., Chairperson,*

SANDOVAL-GUTIERREZ,**

- v e r s u s - CORONA,

AZCUNA and

GARCIA, JJ.

SPOUSES GERARDO and

RODRIGA ROA and

the EX-OFFICIO SHERIFF

OF QUEZON CITY,

Respondents. Promulgated:


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June 30, 2006

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

D E C I S I O N

CORONA, J.:

Edesito and Consorcia Ragasa filed a complaint1[1] against

private respondents Gerardo and Rodriga Roa and the public

respondent ex-officio sheriff of Quezon City founded on the

following allegations:

On May 10, 1989, plaintiffs [petitioners here] entered into a contract withOakland Development Resources Corporation for the purchase ininstallments of a piece of property, with improvements, located at No. 06,Garnet St., Prater Village II, Diliman, Q.C. covered by TCT No. 27946 ofthe Registry of Deeds for Quezon City and more particularly described in aphotocopy of TCT No. 27946 [];

Immediately thereafter, plaintiffs took possession of the property coveredby TCT No. 27946 of the Registry of Deeds for Quezon City and residedthereat together with their relatives who continued to occupy the samewhenever the plaintiffs would leave for Italy where they both worked.Hence, from May of 1989 up to the present date, plaintiffs were incontinuous and notorious possession of the property covered by TCT No.27946 of the Registry of Deeds for Quezon City to the exclusion of othersand in the concept of an owner;


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In March of 1992, plaintiffs were able to fully pay for the agreed purchaseprice of the property covered by TCT No. 27946 of the Registry of Deedsfor Quezon City and accordingly, a Deed of Absolute Sale dated March 12,1992 was executed by and between Oakland Development Resources

Corporation [] and the original owners copy of TCT No. 27946 of theRegistry of Deeds for Quezon City accordingly turned over to them;

However, despite the execution of the Deed of Absolute Sale, OaklandDevelopment Resources Corporation failed to cause the transfer of title toplaintiffs. On the part of plaintiffs, all the while they thought that the Deedof Absolute Sale and possession of the original of the owners copy of TCTNo. 27946 of Registry of Deeds for Quezon City was more than sufficient toprotect their rights and interests over the property;

Sometime March of 1999, during one of the trips of plaintiff Consorcia

Ragasa to the Philippines from Italy, upon learning that OaklandDevelopment Resources Corporation was no longer functional as acorporate entity, she decided to cause the transfer of registration of TCTNo. 27946 of Registry of Deeds for Quezon City herself since the vendorthereof was apparently in no position to undertake the same;

She was thus surprised to learn from the Registry of Deeds for Quezon Citythat on April 14, 1995, the property in question was sold by defendant Ex-Officio Sheriff of Quezon City [a respondent here] to defendants Sps. Roa[respondents here] as the highest bidder for the price and consideration ofP511,000.00 as shown in the Sheriffs Final Deed of Sale [].

xxx xxx xxx

The levy on attachment and the execution sale undertaken by the Ex-Officio Sheriffs Office of Quezon City is clearly illegal there being no noticegiven by said individual to the occupants of the property in question.

Furthermore, a casual perusal of the Sheriffs Deed of Sale will reveal thatthe execution price of P511,000.00 is grossly inadequate to pay for realproperties listed therein with fair market values conservatively estimated atP3,000,000.00


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The case was raffled to Branch 2202[2] of the Quezon City

Regional Trial Court (RTC) and was docketed as Civil Case No. Q-

99-37908.

Instead of filing an answer, private respondents moved for the

dismissal of the complaint on the grounds of prescription and

laches. In an order3[3] dated February 3, 2000, the RTC granted

the motion. Characterizing the suit as an action upon an injury to

the rights of the plaintiff which, according to Article 1146 of the

Civil Code,4[4] must be filed within four years, the RTC held that

petitioners action was barred by prescription for having been filed

more than four years after the registration of the execution sale.


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Seeking a reversal of the trial courts order dismissing their

complaint, petitioners proceeded forthwith to this Court with the

present petition for review on certiorari5[5] raising only a pure

question of law.6[6]

We grant the petition.

The trial courts order of dismissal was predicated on the

theory that the suit petitioners commenced was an action upon an

injury to their rights contemplated in Article 1146 of the Civil

Code. That premise was erroneous. A reading of the allegations in

petitioners complaint reveals that the action was essentially one for

quieting of title to real property under Article 476 of the Civil Code

which states:


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Whenever there is a cloud on title to real property or any interest therein,by reason of any instrument, record, claim, encumbrance or proceedingwhich is apparently valid or effective but is in truth and in fact invalid,ineffective, voidable, or unenforceable, and may be prejudicial to said title,an action may be brought to remove such cloud or to quiet the title.

An action may also be brought to prevent a cloud being cast upon title toreal property or any interest therein.

To make out an action to quiet title under the foregoing

provision, the initiatory pleading has only to set forth allegations

showing that (1) the plaintiff has title to real property or any

interest therein7[7]and (2) the defendant claims an interest therein

adverse to the plaintiffs arising from an instrument, record, claim,

encumbrance, or proceeding which is apparently valid or effective

but is in truth and in fact invalid, ineffective, voidable, or

unenforceable.8[8] Thus, the averments in petitioners complaint

that (1) they acquired ownership of a piece of land by tradition or

delivery as a consequence of sale and (2) private respondents

subsequently purchased the same piece of land at an allegedly void


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execution sale were sufficient to make out an action to quiet title

under Article 476.

This being the case, Article 1146 (which refers to actions

upon an injury to the rights of the plaintiff and upon a quasi-

delict)9[9]did not apply. Rather, considering petitioners allegation

in their complaint that from May of 1989 up to the present date,

plaintiffs [had been] in continuous and notorious possession of the

propertyto the exclusion of others and in the concept of

owner[s]10[10] an assertion private respondents never bothered

to dispute our ruling in Sapto v. Fabiana11[11]should apply:

[I]t is an established rule of American jurisprudence (made applicable inthis jurisdiction by Art. 480 of the New Civil Code)12[12] that actions toquiet title to property in the possession of the plaintiff are imprescriptible.


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The prevailing rule is that the right of a plaintiff to have histitle to land quieted, as against one who is asserting someadverse claim or lien thereon, is not barred while the plaintiffor his grantors remain in actual possession of the land,

claiming to be owners thereof, the reason for this rule beingthat while the owner in fee continues liable to an action,proceeding, or suit upon the adverse claim, he has acontinuing right to the aid of a court of equity to ascertainand determine the nature of such claim and its effect on histitle, or to assert any superior equity in his favor. He maywait until his possession is disturbed or his title is attackedbefore taking steps to vindicate his right. But the rule that thestatute of limitations is not available as a defense to anaction to remove a cloud from title can only be invoked by acomplain[ant] when he is in possession. One who claims

property which is in the possession of another must, itseems, invoke his remedy within the statutory period.(citations omitted)13[13]

Accordingly, petitioners action was not subject to prescription.

WHEREFORE, the petition is GRANTED. The February 3,

2000 order of the Regional Trial Court, Branch 220, Quezon City

dismissing petitioners complaint is hereby REVERSED and SET

ASIDE. Let this case be REMANDEDto the court a quofor further

proceedings.


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SO ORDERED.

FIRST DIVISION

TEOFISTO OO, PRECY O.NAMBATAC, VICTORIA O.MANUGAS and POLOR O.

CONSOLACION,Petitioners,

- versus-

VICENTE N. LIM,

Respondent.

G.R. No. 154270

Present:

PUNO,C.J., Chairperson,

CARPIO MORALES,

LEONARDO-DE CASTRO,

BERSAMIN, and

VILLARAMA, JR.,JJ.

Promulgated:

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

D E C I S I O N


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BERSAMIN, J.:

The subject of controversy is Lot No. 943 of the Balamban Cadastre in CebuCity, 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 decisiondated July

30, 1996,14[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), Lims deceased mother and predecessor-in-interest.

On appeal (CA-GR CV No. 57823), the Court of Appeals (CA) affirmed the

RTC on January 28, 2002.15[2] It later denied the petitioners motion for

reconsiderationthrough the resolution dated June 17, 2002.16[3]

Hence, this appeal viapetition for review on certiorari.


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Antecedents

On October 23, 1992, Lim filed in the RTC in Cebu City a petition for the

reconstitution of the owners duplicate copy of OCT No. RO-9969-(O-20449),

alleging that said OCT had been lost during World War II by his mother,

Luisa;17[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 Oo and Estefania

Apas (Spouses Oo), the lots registered owners; and that although the deed

evidencing the sale had been lost without being registered, Antonio Oo (Antonio),the only legitimate heir of Spouses Oo, had executed on April 23, 1961 in favor

of Luisa a notarized document denominated as confirmation of sale,18[5] which

was duly filed in the Provincial Assessors Office of Cebu.

Zosimo Oo and petitioner Teofisto Oo (Oos) opposed Lims petition,

contending that they had the certificate of title in their possession as the

successors-in-interest of Spouses Oo.


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On account of the Oos opposition, and upon order of the RTC, Lim

converted the petition for reconstitution into a complaint for quieting of title,19[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

Oos be ordered to surrender the reconstituted owners 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,20[7] the Oos claimed that their predecessors-in-interest,

Spouses Oo, 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,21[8] viz:


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WHEREFORE, premises considered, judgment is hereby rendered quietingplaintiff'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 Oo 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 theoriginal 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.22[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 Oos, except on

two occasions in 1993 when the Oos 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 salewas 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


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acknowledge the instrument as true than to the testimony of the expert witness who

attested that Antonios signature was a forgery.

CA Ruling

On appeal, the Oos maintained that the confirmation of salewas spurious;

that the property, being a titled one, could not be acquired by the Lims through

prescription; that their (the Oos) 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.

The CA affirmed the RTC, however, and found that Spouses Oo 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


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of Luisa, considering that the owners duplicate was still intact in the possession of

the Oos.

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 theConfirmation of Sale of Lot No. 943, Balamban Cadastre, Cebu,

executed on April 23, 1961 by Antonio Oo in favor of Luisa Narvios-

Lim, and issue a new transfer certificate of title to and in the name of thelatter upon cancellation of the outstanding original and owner's duplicate

certificate of title.

(2) In the event defendants-appellants neglect or refuse to present theowner'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 recordand in the new transfer certificate of title to be issued to Luisa Narvios-

Lim.

(3) Defendants-appellants shall pay the costs.

SO ORDERED.23[10]


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The CA denied the Oos motion for reconsideration24[11] on June 17,

2002.25[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;


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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 Oo

in favor of Luisa and whether or not said deed was lost duringWorld 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 salewas genuine.

Ruling of the Court

The petition has no merit.

A.Action for cancellation of titleis 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:


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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.26[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.27[14]

Quieting of title is a common law remedy for the removal of any cloud,

doubt, or uncertainty affecting title to real property.28[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


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remove such cloud or to quiet the title.29[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.30[17]

Lims complaintpertinently alleged:

18. If indeed, the genuine original of the Owner's Duplicate of theReconstituted Original Certificate of Title No. RO-9699 (O-20449) for Lot 943,

Balamban Cadastre xxx is in Defendant's (Oos) possession, then VNL submits

the following PROPOSITIONS:xxx

18.2. Therefore, the Original of Owners Duplicate Certificate (which

Respondents [Defendants Oos] 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 saidLot 943, in this action, in accordance with Section 107, P.D. 1529, Property

Registration Decree xxxxxx

[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;31[18]


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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 Lims 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 Lims title, and the confirmation of Lims 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.32[19] However, prescription was not relevant to the

determination of the dispute herein, considering that Lim did not base his right of


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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;33[20] and that in view of the delivery of the property, coupled

with Luisas 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 Lims 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 Antonios signature on the

confirmation of salewas a forgery.

Clearly, the petitioners hereby seek a review of the evaluation and

appreciation of the evidence presented by the parties.


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The Court cannot anymore review the evaluation and appreciation of the

evidence, because the Court is not a trier of facts.34[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,35[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


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the petitioners expert witness. The concurrence of their conclusion on the

genuineness of Antonios signature now binds the Court.36[23]

In civil cases, the party having the burden of proof must establish his case by

a preponderance of evidence.Preponderance of evidenceis the weight, credit, and

value of the aggregate evidence on either side, and is usually considered to be

synonymous with the termgreater weight of the evidenceor greater weight of the

credible evidence. Preponderance of evidence is a phrase that means, in the last

analysis, probability of the truth.37[24] It is evidence that is more convincing tothe 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


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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.38[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.

Republic of the Philippines

SUPREME COURTManila

THIRD DIVISION

G.R. No. 70191 October 29, 1987

RODOLFO L. CORONEL, petitioner,vs.HONORABLE INTERMEDIATE APPELLATE COURT and ELIAS MERLAN, BRIGIDOMERLAN, JOSE MERLAN, TEODORICO NOSTRATIS, SEVERO JECIEL SANTIAGOFERNAN and FORTUNATO OCAMPO, respondents.

GUTIERREZ, JR., J .:


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This is a petition to review the decision of the then Intermediate Appellate Court, nowthe Court of Appeals, which affirmed the decision and order of the then Court of FirstInstance of Cavite in Civil Case No. 651. The dispositive portion of the trial court'sdecision reads:

WHEREFORE, in the interest of moral justice, judgment is hereby rendered in favor of allthe defendants and intervenor; hereby DISMISSING the complaint; however, the Courthereby orders instead the immediate partition of the land, subject-matter on this case,without prejudice to the plaintiff, and in accordance with the express but undividedapportionments corresponding to the original co-ownership, and pursuant to TransferCertificate of Title No. T-1444 (EXHIBIT 4-b) of the Registry of Deeds for the Province ofCavite, as entered on May 19, 1960;

Hereby declaring null and void, Transfer Certificate of Title No, T-75543 of the sameregistry.

Without pronouncements as to costs. (At p. 71, Record on Appeal)

The dispositive portion of the questioned order of the trial court reads.

WHEREFORE, under our present alternatives, as prayed for by defendants andIntervenor, through Lawyer Eleuterio A. Beltran, in their present incident recorded onJanuary 10, 1980; the Decision subject matter hereof is amended in the followingsignificance:

Plaintiff Rodolfo Coronel is further ordered to submit a complete Inventory andAccounting of all the harvests of palay produced from the parcel of land (Lot 1950-A)subject matter of the present litigation, and to deliver the corresponding shares to thedefendants and intervenors correlated with all the harvests of palay done by the plaintiffs;considering the unrebutted finality of the testimony of defendant Brigido Merian incongruence with his supplication for the Inventory and Accounting of all the palay

gathered by plaintiff Radolfo Coronel who is likewise ordered, finally, to pay IawyerEleuterio Beltran as counsel for defendants and intervenors, Four Thousand (P400000)Pesos for his professional services.

Naic, Cavite, February 13, 1980. (pp. 88-89, Record on Appeal).

Petitioner Rodolfo Coronel filed a complaint for recovery of possession of a parcel ofland registered under his name (Transfer Certificate of Title No. T-75543 in the Registryof Deeds for the Province of Cavite) and more particularly described as follows:

A parcel of land (lot 1950-A of the subdivision plan (LRC) Psd-104544 being a portion ofLot 1950, Naic, Estate, LRC Rec. No. 8340), situated in the Municipality of Naic, Province

of Cavite, Island of Luzon. Bounded on the NE., pts. 12 to 14 by Irrigation Ditch; on theSE and SW pts. 14 to 15 and 15 to 1 by Lot 1950-D of the subdivision plan; on the SWpts. 1 to 2 by lot 2304, and pts. 2 to 11 by Lot 1951, both of Naic, Estate; and on the NWpts. 11 to 12 by Road. ... ; containing an area of TWELVE THOUSAND ONE HUNDREDEIGHTY NINE (12,189) SQUARE METERS, more or less. ... (p. 10, Record on Appeal)


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The complaint docketed as Civil Case No. 651 was filed against the private respondentsElias Merlan, Brigido Merlan, Jose Merlan, Teodorico Nostrates, Severo Jeciel SantiagoFernan and Fortunato Ocampo before the then Court of First Instance of Cavite.

Coronel alleged in his complaint that at the time he purchased the subject parcel of

land, the defendants (private respondents herein) were already occupying a portionthereof as "tenants at will" and that despite demands to vacate the premises, thedefendants failed and refused to move out from the land.

In their Answer with Counterclaim and With Third-Party Complaint, the defendantsdenied that Coronel was the owner of the whole parcel of land and alleged that the lotsoccupied by them form part of a 1/3 undivided share of brothers Brigido Merlan andJose Merlan which they inherited from their deceased father Gabriel Merlan, one of thethree heirs of Bernabela Lontoc, the original owner of Lot No. 1950-A of the Naic Estate;that the Merlan brothers together with their two brothers and a sister never sold theirundivided 1/3 share of the lot to anybody; that it was actually their other co-heirs who

sold their undivided portions and that the plaintiff's claim of ownership of the wholeparcel of land, if ever it has basis, is fraudulent, void, and without effect; that theMerlans have always been in open and peaceful possession of their undivided share ofthe lot throughout the years from the first sale by their co-heirs of Lot No. 1950-A in1950; and that the other defendants were legitimate tenants. They prayed that theplaintiff respect their rights over 1/3 (4,063 square meters) of Lot No. 1950-A of the NaicEstate,

In their Third-Party Complaint, the defendants charged that the third-party defendants,owners of the remaining portion of Lot No. 1950-A, defrauded them when they sold theentire parcel.

Third-Party Defendants Marcelo Novelo, Paz Anuat Daniel Anuat and Rosario Cailaothe defendants' co-owners of Lot No. 1950-A denied that they had something to do withthe fraudulent acts or illegal machinations which deprived the defendants of their sharein the subject parcel of land, and that what they sold was only their 2/3 undivided sharesin said parcel. They also filed a cross-claim against their co-defendant Mariano Manalowhom they charged might have connived with others Including the plaintiff to deprivethe defendants and their co-heirs of their share in the subject parcel of land.

As stated earlier, the lower court ruled in favor of the defendants and on appeal, thelower court's decision was affirmed with the following modification by the thenIntermediate Appellate Court, to wit:

WHEREFORE, PREMISES CONSIDERED, there being no reversible error in the maindecision appealed from dated December 7, 1979, and the Order of the Court datedFebruary 13, 1980, the same are hereby AFFIRMED with the modification that after theword "intervenor" in the main decision, the following shall be inserted:

l) Declaring them as the absolute owners of the remaining 1 1/3 of the 2/8 portionpertaining to the late Bernabela Lontoc, nameIy, Lot 1950-A of the Naic Estate pursuantto Art. 845 of the New Civil Code. (At p. 29.)


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The petitioner states that the appellate court erred as follows:

I

THAT THE HONORABLE INTERMEDIATE APPELLATE COURT HAS ERRED IN NOTCONSIDERING THAT THE CLAIM OF PRIVATE RESPONDENTS TO THE LAND IN

QUESTION HAS BEEN BARRED BY THE STATUTE OF LIMITATION OR BYESTOPPEL BY LACHES.

II

THAT THE HONORABLE INTERMEDIATE APPELLATE COURT HAS ERRED IN NOTCONSIDERING PETITIONER AS A PURCHASER IN GOOD FAITH AND FORVALUABLE CONSIDERATION OF THE LAND IN QUESTION.

III

THAT THE HONORABLE INTERMEDIATE APPELLATE COURT HAS ERRED IN

DECLARING AS NULL AND VOID TRANSFER CERTIFICATE OF TITLE NO. T-75543OF THE REGISTRY OF DEEDS OF CAVITE WHICH IS ALREADY PACEL IN THENAME OF PETITIONER. (at pp.1-2 Brief for the Petitioners)

The records show that the 12,189 square meter lot was part of a 48,755 square meterlot covered by Transfer Certificate of Title No. 3116 (RT-5010) of the Naic Estatelocated at Muzon, Naic, Cavite in the names of the spouses Valentin Gutierrez andEligia Mangahas with a calculated portion of 2/8; spouses Jose Perea and CelestiaNaces with a calculated portion of 3/8; Josefa Nazareno with a calculated portion of 1/8and Bernabela Lontoc with a calculated portion of 2/8. In dispute in the instant case isthe 2/8 share of Bernabela Lontoc which is equivalent to 12,189 square meters.

When Lontoc died in 1945, she was survived by three sets of heirs: 1) BernardinoMerlan, a grandson by her son Enrique Merlan who died in 1918; 2) Jose Merlan andBrigido Merlan, defendants in the case below and private respondents herein, GracianoMerlan, Agapito Merlan and Corazon Merlan, children of her son Gabriel who died in1937; and 3) Daniel Anuat and Paz Anuat children of her daughter Francisca Merlan.

In 1950, Bernardino Merlan, Daniel Anuat and Paz Anuat sold their 2/3 undividedportion of the lot to spouses Ignacio Manalo and Marcela Nobelo.

In 1960, Transfer Certificate of Title No. (T-3116) RT-5010 was cancelled by TransferCertificate of Title No. T-1444 but carried the same afore-specified registered co-owners

with an annotation carried from the former Transfer Certificate of Title, to wit:

"Entry No. 4953-SALE in favor of IGNACIO MANALO, married to Marcela Nobelo covering the rights, interest and participation of Bernardino Merlan, married to RosarioCailao DANIEL ANUAT married to Dionisia Loyola, and PAZ ANUAT widow, on the shareof BERNABELA LONTOC, consisting of twenty 20 gantas of seedling, on the landdescribed in this Certificate of for the sum of THREE THOUSAND PESOS (P3,000.00)by virtue of the deed of sale, executed before the Notary Public for the City of Cavite Mr.


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Primo D. Anuat (Doc. No. 652; page No. 77; Book No. VII Series of 1950) on file in thisRegistry.

Date of Instrument March 11, 1950.

Date of Inscription March 13, 1950 at 2:35 p.m. (At pp. 23, Court of Appeals Decision;

pp. 18-19, Rollo)

In 1968, Lot No. 1950 of the Naic Estate was subdivided according to a Sketch Plan(Exh. A). The sketch plan was approved by the Commission on Land Registration on

August 15, 1969. Bernabela Lontoc's 2/8 portion of Lot No. 1950 became Lot No. 1950-A with an area of 12,189 square meters.

Sometime in 1970, Ignacio Manalo sold his interest in Lot 1950-A to Mariano Manalo.The pertinent portions of the deed of sale executed by spouses Ignacio Manalo andMarcela Nobelo in favor of spouses Mariano Manalo and Jorga Manalo states:

Ang pagkamayari namin ng bahaging binabanggit sa itaas nito ay natatalikod ng titulobig. T-3116 na gaya ng sumusunod:

(Entry No. 4953-SALE In favor of IGNACIO MANALO married to MARCELA NOVELOcovering the rights, interests and participations of BERNADINO MERLAN married toROSARIO CAILAO DANIEL ANUAT 'married to DIONISIA LOYOLA, and PAZ ANUATwidow, on the share of BERNABELA LONTOC, consisting of twenty (20) gantas ofseedling, on the land described in this certificate of title of the sum of THREETHOUSAND PESOS (P3,000.00), by virtue of the deed of sale executed before theNotary Public for the City and Prov. of Cavite Mr. Primo D. Anuat (Doc. No. 652; PageNo. 77; Book No. VII, Series of 1950) on file in this Registry. Date of instrument-March13, 1950-at 2:35 p.m. (sgd) ESCOLASTICO CUEVAS, Register of Deeds.

Na alang-alang sa halagang ISANG LIBONG P1.000.00 PISO salaping (blurred), na saamin ay ibinayad ni G. MARIANO MANALO kasal kay JORGA MANALO may sapat nagulang, Filipino at ang tirahan at pahatirang sulat ay (blurred) Cavite, ay aming ipinagbiling tuluyan (Venta Real y Absoluta) ang nabanggit na DALAWANG PUNG (20) salop nabinhi, bahagi ng Lote blg. 1950 (blurred) tiyak sa lote na unahan nito sa naturang G.Mariano Manalo, sa kanyang tagamana o kahaliti sa matuwid magpakailan man. Dito'ysinasaysay rin namin ang nasabing lupang tubigan ay walang sinasagutangpagkakautang kanino mang tao. (pp. 25-26, Rollo)

The deed of sale was registered in the Registry of Deeds in Cavite. Thereafter, TransferCertificate of Title No. T-1444 was cancelled and Transfer Certificate of Title No. T-41175 was issued for Lot No. 1950-A of the Naic Estate in the name of Mariano Manalo

married to Jorga Lagos of Naic, Cavite. The certificate of title issued in the name ofspouses Mariano Manalo and Jorga Lagos covered the whole Lot No. 1950-A withoutany mention of the 1/3 share of the private respondents in the parcel of land which wasnot sold to them.

Relying on the transfer certificate of title of the spouses Mariano Manalo and JorgaLagos and the Sketch Plan (Exhibit "A"), petitioner Rodolfo Coronel then bought Lot No.1950-A of the Naic Estate from the former for the consideration of P27,000.00 as per


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Doc. No. 341; Page No. 70; Book No. V Series of 1974 in the Notarial Register ofNotary Public Nonilo A. Quitangon of the City of Manila. The deed of sale wasregistered on December 19, 1974 causing the cancellation of Transfer Certificate ofTitle No. T-41175 and the issuance of Transfer Certificate of Title No. T-75543 in thename of petitioner Rodolfo Coronel.

Considering these facts, it is evident that the private respondents never sold their 1/3share over Lot No. 1950-A of the Naic Estate; that what their co-owners sold to IgnacioManalo was their 2/3 share of the same lot; and that Ignacio Manalo sold only the 2/3share to third-party defendant Mariano Manalo, the predecessor-in-interest of petitionerRodolfo Coronel. Consequently, there was a mistake when Transfer Certificate of TitleNo. 41175 was issued to Mariano Manalo covering the whole area of Lot No. 1950-A.Unfortunately, Mariano Manalo who was included as third-party defendant as well asthe subject of a cross- claim filed by the other third-party defendants, and who couldhave shed light on this controversy was at the time residing abroad and was not servedwith the third-party complaint.

Moreover, private respondents Brigido Merlan and Jose Merlan were in open, peacefuland adverse possession of their 1/3 share over the lot even after 1950 when the firstsale of the lot took place. The first time they knew about Coronel's claim over the wholelot was when they were served a copy of his complaint in 1975.

Under these circumstances, the first assignment of error is not well taken.

The petitioner contends that the claim of the private respondents over their 1/3undivided portion of Lot No. 1950-A 25 years after the registration of the deed of sale infavor of Ignacio Manalo in 1950 and more than five (5) years after the registration of the

deed of sale in favor of Mariano Manalo is barred by prescription or laches. According tohim, there was undue delay on the part of the private respondents to claim their 1/3portion of Lot No. 1950-A of the Naic Estate and that the action for annulment shouldhave been brought within four (4) years (Art. 1391, New Civil Code) counted from thedate of the registration of the instrument.

The counterclaim of the private respondents which was in effect a reconveyance tothem of their 1/3 undivided share over lot No. 1950-A has not prescribed. As lawfulpossessors and owners of the lot in question their cause of action falls within the settled

jurisprudence that an action to quiet title to property-in one's possession isimprescriptible, Their undisturbed possession over a period of more than 25 years gavethem a continuing right to seek the aid of a court of equity to determine the nature of theadverse claim of a third party and the effect of his own title. If at all, the privaterespondents' right, to quiet title, to seek reconveyance and to annul Transfer Certificateof Title No. T-75543 accrued only in 1975 when they were made aware of a claimadverse to their own. It was only at that time that, the statutory period of prescriptionmay be said to have commenced to run against them. (Sapto, et al. v. Fabiana, 103Phil. 683, Faja v. Court of Appeals, 75 SCRA 441; Caragay-Layno v. Court of Appeals,133 SCRA 718).


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In the same manner, there is no bar based on laches to assert their right over 1/3 of thedisputed property. "Laches has been defined as the failure or neglect, for anunreasonable and unexplained length of time, to do that which by exercising duediligence could or should have been done earlier; it is negligence or omission to asserta right within a reasonable time, warranting a presumption that the party entitled to

assert it either has abandoned it or declined to assert it." (Tejido v. Zamacoma, 138SCRA 78 citing Tijam et al. v. Sibong-hanoy et al., 23 SCRA 29, Sotto v Teves, S6SCRA 154) The facts of the case show that the private respondents have always beenin peaceful possession of the 1/3 portion of the subject lot, exercising ownership theretofor more than 25 years disrupted only in 1975 when the petitioner tried to remove themby virtue of his torrens title covering the entire Lot 1950-A of the Naic Estate. It was onlyat this point that private respondents knew about the supposed sale of their 1/3 portionof Lot 1950-A of the Naic Estate and they immediately resisted.

The petitioner, however, insists that he is a purchaser in good faith. Thus, he arguesthat Transfer Certificate of Title No. T-41175 in the name of his successor-in-interest

Mariano Manalo was very clear to the effect that there is no lien or encumbrance statedtherein which could have been seen by his parents who represented him in the sale ashe was then in the United States and by the lawyer contracted by him to execute orprepare the corresponding deed of sale.

This notwithstanding, we cannot close our eyes to the fact that neither the privaterespondents nor their co-owners of the subject parcel of land sold the former's share ofthe lot. Furthermore, even Ignacio Manalo to whom the third-party defendants sold theirshare resold only the 2/3 shares to Mariano Manalo, the successor-in-interest of thepetitioner. Whether or not there was fraud or just a mistake or oversight of an employeeof the Register of Deeds of Cavite is not clear from the records. The point is that the 1/3

undivided portion of the private respondents over Lot No. 1950-A was mistakenlyincluded in the transfer certificate of title of Mariano Manalo.

We apply equitable considerations:

Nor does the mere fact that respondent-appellee Marcelo Coral could show a certificateof Torrens Title in his favor conclude the matter, the question of fraud having beenseasonably raised and the remedy of reconveyance sought. Only recently, in PhilippineCommercial and Industrial Bank v. Villalva (L-28194, November 24, 1972, 48 SCRA 31)this Court had occasion to state: There is, however, a countervailing doctrine, certainlynot of lesser weight, that mitigates the harshness of the iron-clad application of theprinciple attaching full faith and credit to a Torrens certificate.It is inspired by the highestconcept of what is fair and what is equitable . It would be a sad day for the law if it were to

be oblivious to the demands justice The acceptance accorded the Torrens system ofregistration would certainly be impaired if it could be utilized to perpetrate fraud andchicanery. If it were thus, then no stigma would attach to a claim based solely on anarrow and literal reading of a statutory prescription, devoid of any shadow of moral right.That is not the juridical norm as recognized by this Court. Deceit is not to becountenanced; duplicity is not to be rewarded. Witness the favor with which jurisprudencehas looked on the action for reconveyance as well as the recognition of the constructivetrust. There is thus the stress of rectitude. (Ibid,p. 39). (Monticenes v. Court of Appeals,53 SC RA 14, 21; Emphasis supplied).


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Moreover, we ruled in an earlier case that:

xxx xxx xxx

... The simple possession of a certificate of title, under the Torrens System, does notnecessarily make the possessor a true owner of all the property described therein. If a

person obtains a title, under the Torrens system, which includes by mistake or oversightland which cannot be registered under the Torrens systems, he does not, by virtue ofsaid certificate alone, become the owner of the lands illegally included. (Ledesma v.Municipality of Iloilo, 49 Phil. 769, 773, citing Legarda and Prieto v. Saleeby, 31 Phil.,590; see also Caragay-Layno v. Court of Appeals, supra).

We find no reversible error on the part of the lower courts in recognizing the ownershipof the private respondents over 1/3 of Lot No. 1950-A of the Naic Estate. The petitioneris bound to recognize the lien in favor of the private respondents which was mistakenlyexcluded and therefore not inscribed in the torrens title of the land of his predecessors-in-interest.

WHEREFORE, the instant petition is hereby DISMISSED. The questioned decision isAFFIRMED but with a modification to the effect that the statement "Hereby declaringnull and void, Transfer Certificate of Title No. T-75543 of the same registry" is deleted.Instead, the Registrar of Deeds of Cavite is ordered to segregate the 1/3 portion of LotNo. 1950-A of the Naic Estate (4,063 square meters) from the entire portion embracedin Transfer Certificate of Title No. T-75543 and issue a new certificate of title in favor ofthe heirs of Gabriel Merlan over the disputed one-third portion and another newcertificate of title over the remaining two-thirds portion of the land in favor of petitionerRodolfo Coronel after cancelling Transfer Certificate of Title No. T-75543. Thequestioned order is also AFFIRMED. No costs.

Republic of the PhilippinesSUPREME COURTManila

THIRD DIVISION

G.R. No. 128573 January 13, 2003

NAAWAN COMMUNITY RURAL BANK INC., petitioner,vs.

THE COURT OF APPEALS and SPOUSES ALFREDO AND ANNABELLE LUMO,respondents.

CORONA, J.:

Under the established principles of land registration, a person dealing with registered land may

generally rely on the correctness of a certificate of title and the law will in no way oblige him to

go beyond it to determine the legal status of the property.


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Before us is a Petition for Review on Certiorari challenging the February 7, 1997 Decision1of

the Court of Appeals in CA-G.R. CV No. 55149, which in turn affirmed the decision2 of the

Regional Trial Court of Misamis Oriental, Branch 18 as follows:

"WHEREFORE, the plaintiffs-spouses are adjudged the absolute owners and possessors

of the properties in question (Lot 18583, under TCT No. T-50134, and all improvementsthereon) and quieting title thereto as against any and all adverse claims of the defendant.

Further, the sheriff's certificate of sale, Exhibit 4; 4-A; Sheriff's deed of final conveyance,

Exhibit 5, 5-A; Tax Declarations No. 71211, Exhibit 7, and any and all instrument,record, claim, encumbrance or proceeding in favor of the defendant, as against the

plaintiffs, and their predecessor-in-interest, which may be extant in the office of the

Register of Deeds of Province of Misamis Oriental, and of Cagayan de Oro City, and in

the City Assessor's Office of Cagayan de Oro City, are declared as invalid and ineffectiveas against the plaintiffs' title.

"The counterclaim is dismissed for lack of merit.

"SO ORDERED."3

The facts of the case, as culled from the records, are as follows:

On April 30, 1988, a certain Guillermo Comayas offered to sell to private respondent-spouses

Alfredo and Annabelle Lumo, a house and lot measuring 340 square meters located at Pinikitan,

Camaman-an, Cagayan de Oro City.

Wanting to buy said house and lot, private respondents made inquiries at the Office of the

Register of Deeds of Cagayan de Oro City where the property is located and the Bureau of Lands

on the legal status of the vendor's title. They found out that the property was mortgaged forP8,000 to a certain Mrs. Galupo and that the owner's copy of the Certificate of Title to said

property was in her possession.

Private respondents directed Guillermo Comayas to redeem the property from Galupo at their

expense, giving the amount of P10,000 to Comayas for that purpose.

On May 30, 1988, a release of the adverse claim of Galupo was annotated on TCT No. T-41499

which covered the subject property.

In the meantime, on May 17, 1988, even before the release of Galupo's adverse claim, private

respondents and Guillermo Comayas, executed a deed of absolute sale. The subject property wasallegedly sold for P125,000 but the deed of sale reflected the amount of only P30,000 which was

the amount private respondents were ready to pay at the time of the execution of said deed, the

balance payable by installment.

On June 9, 1988, the deed of absolute sale was registered and inscribed on TCT No. T-41499

and, on even date, TCT No. T-50134 was issued in favor of private respondents.


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After obtaining their TCT, private respondents requested the issuance of a new tax declaration

certificate in their names. However, they were surprised to learn from the City Assessor's Office

that the property was also declared for tax purposes in the name of petitioner NaawanCommunity Rural Bank Inc. Records in the City Assessor's Office revealed that, for the lot

covered by TCT No. T-50134, Alfredo Lumo's T/D # 83324 bore the note: "This lot is also

declared in the name of Naawan Community Rural Bank Inc. under T/D # 71210".

Apparently, on February 7, 1983, Guillermo Comayas obtained a P15,000 loan from petitioner

Bank using the subject property as security. At the time said contract of mortgage was enteredinto, the subject property was then an unregistered parcel of residential land, tax-declared in the

name of a certain Sergio A. Balibay while the residential one-storey house was tax-declared in

the name of Comayas.

Balibay executed a special power of attorney authorizing Comayas to borrow money and use the

subject lot as security. But the Deed of Real Estate Mortgage and the Special Power of Attorney

were recorded in the registration book of the Province of Misamis Oriental, not in the registration

book of Cagayan de Oro City. It appears that, when the registration was made, there was onlyone Register of Deeds for the entire province of Misamis Oriental, including Cagayan de Oro

City. It was only in 1985 when the Office of the Register of Deeds for Cagayan de Oro City wasestablished separately from the Office of the Register of Deeds for the Province of Misamis

Oriental.

For failure of Comayas to pay, the real estate mortgage was foreclosed and the subject property

sold at a public auction to the mortgagee Naawan Community Rural Bank as the highest bidder

in the amount of P16,031.35. Thereafter, the sheriff's certificate of sale was issued and registered

under Act 3344 in the Register of Deeds of the Province of Misamis Oriental.

On April 17, 1984, the subject property was registered in original proceedings under the LandRegistration Act. Title was entered in the registration book of the Register of Deeds of Cagayande Oro City as Original Certificate of Title No. 0-820, pursuant to Decree No. N-189413.

On July 23, 1984, Transfer Certificate of Title No. T-41499 in the name of Guillermo P.

Comayas was entered in the Register of Deeds of Cagayan de Oro City.

Meanwhile, on September 5, 1986, the period for redemption of the foreclosed subject property

lapsed and the MTCC Deputy Sheriff of Cagayan de Oro City issued and delivered to petitioner

bank the sheriff's deed of final conveyance. This time, the deed was registered under Act 3344

and recorded in the registration book of the Register of Deeds of Cagayan de Oro City.

By virtue of said deed, petitioner Bank obtained a tax declaration for the subject house and lot.

Thereafter, petitioner Bank instituted an action for ejectment against Comayas before the MTCC

which decided in its favor. On appeal, the Regional Trial Court affirmed the decision of theMTCC in a decision dated April 13, 1988.


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On January 27, 1989, the Regional Trial Court issued an order for the issuance of a writ of

execution of its judgment. The MTCC, being the court of origin, promptly issued said writ.

However, when the writ was served, the property was no longer occupied by Comayas but herein

private respondents, the spouses Lumo who had, as earlier mentioned, bought it from Comayas

on May 17, 1988.

Alarmed by the prospect of being ejected from their home, private respondents filed an action for

quieting of title which was docketed as Civil Case No. 89-138. After trial, the Regional TrialCourt rendered a decision declaring private respondents as purchasers for value and in good

faith, and consequently declaring them as the absolute owners and possessors of the subject

house and lot. Petitioner appealed to the Court of Appeals which in turn affirmed the trial court'sdecision.

Hence, this petition.

Petitioner raises the following issues:

I. WHETHER OR NOT THE SHERIFF'S DEED OF FINAL CONVEYANCE WAS

DULY EXECUTED AND REGISTERED IN THE REGISTER OF DEEDS OF

CAGAYAN DE ORO CITY ON DECEMBER 2, 1986;

II. WHETHER OR NOT REGISTRATION OF SHERIFF'S DEED OF FINALCONVEYANCE IN THE PROPER REGISTRY OF DEEDS COULD BE EFFECTIVE

AS AGAINST SPOUSES LUMO.

Both parties cite Article 1544 of the Civil Code which governs the double sale of immovable

property.

Article 1544 provides:

". . . . Should it be immovable property, the ownership shall belong to the personacquiring it who in good faith first recorded it in the Registry of Property."

Petitioner bank contends that the earlier registration of the sheriff's deed of final conveyance inthe day book under Act 3344 should prevail over the later registration of private respondents'

deed of absolute sale under Act 496,4as amended by the Property Registration Decree, PD 1529.

This contention has no leg to stand on. It has been held that, where a person claims to havesuperior proprietary rights over another on the ground that he derived his title from a sheriff's

sale registered in the Registry of Property, Article 1473 (now Article 1544) of the Civil Codewill apply only if said execution sale of real estate is registered under Act 496.

5

Unfortunately, the subject property was still untitled when it was already acquired by petitionerbank by virtue of a final deed of conveyance. On the other hand, when private respondents

purchased the same property, it was covered by the Torrens System.


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Petitioner also relies on the case of Bautista vs. Fule6where the Court ruled that the registration

of an instrument involving unregistered land in the Registry of Deeds creates constructive notice

and binds third person who may subsequently deal with the same property.

However, a close scrutiny of the records reveals that, at the time of the execution and delivery of

the sheriff's deed of final conveyance on September 5, 1986, the disputed property was alreadycovered by the Land Registration Act and Original Certificate of Title No. 0-820 pursuant to

Decree No. N189413 was likewise already entered in the registration book of the Register of

Deeds of Cagayan De Oro City as of April 17, 1984.

Thus, from April 17, 1984, the subject property was already under the operation of the Torrens

System. Under the said system, registration is the operative act that gives validity to the transferor creates a lien upon the land.

Moreover, the issuance of a certificate of title had the effect of relieving the land of all claimsexcept those noted thereon. Accordingly, private respondents, in dealing with the subject

registered land, were not required by law to go beyond the register to determine the legalcondition of the property. They were only charged with notice of such burdens on the property as

were noted on the register or the certificate of title. To have required them to do more wouldhave been to defeat the primary object of the Torrens System which is to make the Torrens Title

indefeasible and valid against the whole world.

Private respondents posit that, even assuming that the sheriff's deed of final conveyance in favor

of petitioner bank was duly recorded in the day book of the Register of Deeds under Act 3344,

ownership of the subject real property would still be theirs as purchasers in good faith becausethey registered the sale first under the Property Registration Decree.

The rights created by the above-stated statute of course do not and cannot accrue under aninscription in bad faith. Mere registration of title in case of double sale is not enough; good faith

must concur with the registration.7

Petitioner contends that the due and proper registration of the sheriff's deed of final conveyance

on December 2, 1986 amounted to constructive notice to private respondents. Thus, when private

respondents bought the subject property on May 17, 1988, they were deemed to have purchasedthe said property with the knowledge that it was already registered in the name of petitioner

bank.

Thus, the only issue left to be resolved is whether or not private respondents could be considered

as buyers in good faith.

The "priority in time" principle being invoked by petitioner bank is misplaced because its

registration referred to land not within the Torrens System but under Act 3344. On the other

hand, when private respondents bought the subject property, the same was already registeredunder the Torrens System. It is a well-known rule in this jurisdiction that persons dealing with

registered land have the legal right to rely on the face of the Torrens Certificate of Title and to


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dispense with the need to inquire further, except when the party concerned has actual knowledge

of facts and circumstances that would impel a reasonably cautious man to make such inquiry.8

Did private respondents exercise the required diligence in ascertaining the legal condition of the

title to the subject property so as to be considered as innocent purchasers for value and in good

faith?

We answer in the affirmative.

Before private respondents bought the subject property from Guillermo Comayas, inquiries were

made with the Registry of Deeds and the Bureau of Lands regarding the status of the vendor'stitle. No liens or encumbrances were found to have been annotated on the certificate of title.

Neither were private respondents aware of any adverse claim or lien on the property other than

the adverse claim of a certain Geneva Galupo to whom Guillermo Comayas had mortgaged the

subject property. But, as already mentioned, the claim of Galupo was eventually settled and theadverse claim previously annotated on the title cancelled. Thus, having made the necessary

inquiries, private respondents did not have to go beyond the certificate of title. Otherwise, theefficacy and conclusiveness of the Torrens Certificate of Title would be rendered futile and

nugatory.

Considering therefore that private respondents exercised the diligence required by law inascertaining the legal status of the Torrens title of Guillermo Comayas over the subject propertyand found no flaws therein, they should be considered as innocent purchasers for value and in

good faith.

Accordingly, the appealed judgment of the appellate court upholding private respondents Alfredo

and Annabelle Lumo as the true and rightful owners of the disputed property is affirmed.

WHEREFORE, petition is hereby DENIED.

SO ORDERED.


SUPREME COURTManila

SECOND DIVISION

G.R. No. 141993 March 17, 2006

NARCISA AVILA, assisted by her husband Bernardo Avila, Spouses JANUARIO N.ADLAWAN and NANETTE A. ADLAWAN, NATIVIDAD MACAPAZ, assisted by herhusband EMILIO MACAPAZ, FRANCISCA N. ADLAWAN and LEON NEMEO,Petitioners,vs.

Spouses BENJAMIN BARABAT and JOVITA BARABAT,Respondents.


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D E C I S I O N

CORONA, J.:

This petition for review on certiorari under Rule 45 of the Rules of Court assails the July 30,

1999 decision

1

and January 19, 2000 resolution of the Court of Appeals in CA-G.R. CV No.50899.

The subject of this controversy is a portion of a 433-square meter parcel of land located in

Poblacion, Toledo City, Cebu. The entire property is designated as cadastral lot no. 348

registered in the name of Anunciacion Bahena vda. deNemeo. Upon her death, ownership ofthe lot was transferred by operation of law to her five children, petitioners Narcisa Avila,

Natividad Macapaz, Francisca Adlawan, Leon Nemeo and Jose Bahena. These heirs built their

respective houses on the lot.

In 1964, respondent Benjamin Barabat leased a portion of the house owned by Avila. His co-

respondent, Jovita Barabat, moved in with him in 1969 when they got married.

Avila subsequently relocated to Cagayan de Oro City. She came back to Toledo City in July

1979 to sell her house and share in the lot to her siblings but no one showed interest in it. She

then offered it to respondents who agreed to buy it. Their agreement was evidenced by a privatedocument dated July 17, 1979 which read:

ALANG SA KASAYURAN SA TANAN:

Nga ako, NARCISA AVILA, nagpuyo sa siyudad sa Cagayan de Oro, 52 aos ang panu-igon,

minyo ug may mga anak magatimaan ning maong kasulatan nga akong guibaligya sa kantidad

nga walo ka libo ka pesos (P8,000.00) ang bahin nga balay ug yuta nga sinunod ko sa akong mgaginikanan ngadto sa magtiayon nga Benjamin ug Jovita Barabat, mga lumulupyo sa siyudad sa

Toledo.

Nga ang maong lote ug balay ana-a mahimutang sa Poblacion, Toledo City kansang mga utlanan

mao kining musunod:

Atubangan ---------- N. Rafols Street

Dapit sa Tuo ---------- yuta ug mga panimalay sa Magsuong Natividad Macapaz, Francisca

Adlawan, Jose Bahena ug Leoning Nemeno

Dapit sa wala ---------- kanal sa tubig

Dapit sa luyo ---------- lote nga kumon sa magsuong Nemeno

Tiniman-an:

(Sgd.)

Narcisa Avila2
http://www.lawphil.net/judjuris/juri2006/mar2006/gr_141993_2006.html#fnt1http://www.lawphil.net/judjuris/juri2006/mar2006/gr_141993_2006.html#fnt1http://www.lawphil.net/judjuris/juri2006/mar2006/gr_141993_2006.html#fnt2http://www.lawphil.net/judjuris/juri2006/mar2006/gr_141993_2006.html#fnt2http://www.lawphil.net/judjuris/juri2006/mar2006/gr_141993_2006.html#fnt2http://www.lawphil.net/judjuris/juri2006/mar2006/gr_141993_2006.html#fnt1


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Respondents stopped paying rentals to Avila and took possession of the property as owners.

They also assumed the payment of realty taxes on it.

Sometime in early 1982, respondents were confronted by petitioner Januario Adlawan who

informed them that they had until March 1982 only to stay in Avilas place because he was

buying the property. Respondents replied that the property had already been sold to them byAvila. They showed Adlawan the July 17, 1979 document executed by Avila.

On January 6, 1983, respondents received a letter from Atty. Joselito Alo informing them thatAvila had sold her house and share in lot no. 348 to his clients, the spouses Januario and Nanette

Adlawan. Considering the sale to the spouses Adlawan as prejudicial to their title and peaceful

possession of the property, they demanded that Avila execute a public document evidencing thesale of the property to them but Avila refused.

Respondents filed a complaint for quieting of title with the Regional Trial Court (RTC) ofToledo City, Branch 29.

3 Docketed as Civil Case No. T-53, the complaint was subsequently

amended to include annulment of the deed of sale to the spouses Adlawan, specific performance,partition and damages as additional causes of action. Respondents anchored their claim over the

property to the July 17, 1979 private document which they presented as Exhibit "A."

Avila denied having offered to sell her property to respondents. She claimed that respondentsgave her an P8,000 loan conditioned on her signing a document constituting her house and sharein lot no. 348 as security for its payment. She alleged that she innocently affixed her signature on

Exhibit "A" which was prepared by respondents and which they now claim as a private deed of

sale transferring ownership to them.

The trial court rendered its May 9, 1995 decision in favor of respondents. It declared Exhibit "A"

as a valid and lawful deed of sale. It nullified the subsequent deed of sale between Avila and thespouses Adlawan. Avila was ordered to execute a formal and notarized deed of sale in favor of

respondents. It also held petitioners liable for moral damages and attorneys fees.

Aggrieved, petitioners filed an appeal with the Court of Appeals. In its July 30, 1999 decision,

the appellate court affirmed the decision of the RTC in toto. Petitioners sought a reconsideration

but it was denied. Hence, this petition.

Petitioners claim that the appellate court erred in ruling that the transaction between respondents

and Avila was an absolute sale, not an equitable mortgage. They assert that the facts of the casefell within the ambit of Article 1602 in relation to Article 1604 of the Civil Code on equitable

mortgage because they religiously paid the realty tax on the property and there was gross

inadequacy of consideration. In this connection, Articles 1602 and 1604 provide:

Art. 1602. The contract shall be presumed to be an equitable mortgage, in any of the following

cases:

(1) When the price of a sale with right to repurchase is unusually inadequate;
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(2) When the vendor remains in possession as lessee or otherwise;

(3) When upon or after the expiration of the right to repurchase another instrumentextending the period of redemption or granting a new period is executed;

(4) When the purchaser retains for himself a part of the purchase price;

(5) When the vendor binds himself to pay the taxes of the thing sold;

(6) In any other case where it may be fairly inferred that the real intention of the parties is

that the transaction shall secure the payment of a debt or the performance of any otherobligation.

In any of the foregoing cases, any money, fruits, or other benefit to be received by the vendee asrent or otherwise shall be considered as interest which shall be subject to the usury laws.

x x x x x x x x x

Art. 1604. The provisions of Article 1602 shall also apply to a contract purporting to be anabsolute sale.

They also claim that the court erred in denying them the right to redeem the property and inruling that there was implied partition by the acts of the parties.

We rule in favor of respondents.

For Articles 1602 and 1604 to apply, two requisites must concur: (1) the parties entered into a

contract denominated as a contract of sale and (2) their intention was to secure an existing debtby way of mortgage.4Here, both the trial and appellate courts found that Exhibit "A" evidenced a

contract of sale. They also agreed that the circumstances of the case show that Avila intended her

agreement with respondents to be a sale. Both courts were unanimous in finding that thesubsequent acts of Avila revealed her intention to absolutely convey the disputed property. It was

only after the perfection of the contract, when her siblings began protesting the sale, that she

wanted to change the agreement.

Furthermore, contrary to petitioners claim, the trial court found that it was respondents who took

over the payment of real property taxes after the execution of Exhibit "A." There is no reason to

depart from these factual findings because, as a rule, factual findings of the trial court, when

adopted and confirmed by the Court of Appeals, are binding and conclusive on the Court andgenerally will not be reviewed on appeal to us.5There is no reason for us to deviate from this

rule.

Petitioners claim of gross inadequacy of selling price has no basis. They failed to introduce

evidence of the correct price at the time the land was sold to respondents in 1979. How can wetherefore conclude that the price was grossly inadequate? In the absence of evidence as to the fair
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market value of a parcel of land at the time of its sale, we cannot reasonably conclude that the

price at which it was sold was inadequate.6

Petitioners rely on Article 1623 in relation to Article 1620 of the Civil Code to justify th eir right

of redemption. This is incorrect.

These provisions state:

Art. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all

the other co-owners or any of them, are sold to a third person. If the price of the alienation is

grossly excessive, the redemptioner shall pay only a reasonable one.

Should two or more co-owners desire to exercise the right of redemption, they may only do so in

proportion to the share they may respectively have in the thing owned in common.

x x x x x x x x x

Art. 1623. The right of legal pre-emption or redemption shall not be exercised except within

thirty days from the notice in writing by the prospective vendor, or by the vendor, as the case

may be. The deed of sale shall not be recorded in the Registry of Property, unless accompaniedby an affidavit of the vendor that he has given written notice thereof to all possible

redemptioners.

The right of redemption of co-owners excludes that of adjoining owners.

Petitioners right to redeem would have existed only had there been co-ownership amongpetitioners-siblings. But there was none. For this right to be exercised, co-ownership must exist

at the time the conveyance is made by a co-owner and the redemption is demanded by the otherco-owner or co-owner(s).7 However, by their own admission, petitioners were no longer co-

owners when the property was sold to respondents in 1979. The co-ownership had already been

extinguished by partition.

The regime of co-ownership exists when the ownership of an undivided thing or right belongs to

different persons.8 By the nature of co-ownership, a co-owner cannot point to any specific

portion of the property owned in common as his own because his share in it remains intangibleand ideal.

9

Every act intended to put an end to indivision among co-heirs is deemed to be a partition .10

Here,

the particular portions pertaining to petitioners had been ascertained and they in fact already tookpossession of their respective parts. The following statement of petitioners in their amended

answer11

as one of their special and affirmative defenses was revealing:

F-8. That all defendants [i.e., petitioners] in this case who are co-owners of lot 348 have their

own respective buildings constructed on the said lot in which case it can be safely assumed thatthat their respective shares in the lot have been physically segregated although there is noformal partition of the land among themselves.

12(emphasis supplied)
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Being an express judicial admission, it was conclusive on petitioners unless it was made through

palpable mistake or that no such admission was in fact made.13

Petitioners proved neither and

were therefore bound by it.

The purpose of partition is to separate, divide and assign a thing held in common among those to

whom it belongs.

14

By their own admission, petitioners already segregated and took possessionof their respective shares in the lot. Their respective shares were therefore physically determined,

clearly identifiable and no longer ideal. Thus, the co-ownership had been legally dissolved. With

that, petitioners right to redeem any part of the property from any of their former co-owners wasalready extinguished. As legal redemption is intended to minimize co-ownership,

15 once a

property is subdivided and distributed among the co-owners, the community ceases to exist and

there is no more reason to sustain any right of legal redemption.16

Under the law, subject to certain conditions, owners of adjoining urban land have the pre-

emptive right to a lot before it is sold to third parties, or the redemptive right if it has already

been sold. In particular, Article 1622 of the Civil Code provides:

Art. 1622. Whenever a piece of urban land is so small and so situated in that a major portion

thereof cannot be used for any practical purpose within a reasonable time, having been boughtmerely for speculation, is about to be re-sold, the owner of any adjoining land has a right of pre-

emption at a reasonable price.

If the re-sale has been perfected, the owner of the adjoining land shall have a right of

redemption, also at a reasonable price.

When two or more owners of adjoining lands wish to exercise the rights of pre-emption or

redemption, the owner whose intended use of the land in question appears best justified shall be

preferred.

However, this provision does not apply here. Aside from the fact that petitioners never raised itas an issue, the conditions provided for its application were not met. While the property may be

considered as urban land, it was not shown or even alleged that its area and location would

render a major portion of no practical use within a reasonable time. Neither was there any

allegation to the effect that the disputed property was bought merely for speculation.

WHEREFORE, the petition is hereby DENIED. The July 30, 1999 decision and January 19,2000 resolution of the Court of Appeals in CA-G.R. CV No. 50899 are AFFIRMED.

Costs against petitioners.

SO ORDERED.

TAN V. CA
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172 SCRA 660

FACTS:

Tan owned a parcel of land. During his lifetime, he obtained a loan secured by a REM over theland. Upon his death, he was survived by his wife and children. The loan was unpaid and thus,

the REM was foreclosed. Wife and kids sought the annulment of the REM. An amicable

settlement was then entered into between the bank and the family. The redemption would be

extended into 1 year more. Anne redeemed from bank but the latter issued the title back to theco-heirs.

HELD:

Co-ownership expired when the heirs allowed the one-year redemption period to expire without

redeeming their parents property and permitted the issuance of the new title and consolidation ofownership. There was no co-ownership anymore when Annie redeemed the property. It was in

all accounts, to be considered as a sale.


SUPREME COURTManila

FIRST DIVISION

G.R. No. L-46345 January 30, 1990

RESTITUTO CENIZA and JESUS CENIZA, petitioners,vs.THE HON. COURT OF APPEALS, MAGNO DABON, VICENTA DABON, TERESITADABON, EUGENIA DABON, and TOMAS DABON, respondents.

Vicente P. Valera and Pedro Rosito & Jesus F. Balicanta for petitioners.

Victorino U. Montecillo for respondents.

GRINO-AQUINO, J .:

This is a petition for review of the order dated October 29, 1976, of the Court of Appealsin CA-G.R. No. 48546 entitled, "Restituto Ceniza, et al. vs. Magno Dabon, et al.,"


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dismissing the petitioners' complaint for reconveyance of their shares in co-ownershipproperty and reversing the decision of the trial court in their favor.

On June 14, 1967, the petitioners filed against private respondents, an action in theCourt of First Instance of Cebu for recovery of their title to Lots Nos. 627-B and 627-C

(being portions of Lot No. 627 with an area of approximately 5,306 square meters)situated in Casuntingan, Mandaue, Cebu (now Mandaue City), which originally formedpart of "Hacienda de Mandaue" of the Seminario de San Carlos de Cebu. The Propertyis covered by reconstituted Original Certificate of Title No. RO-10996 issued onFebruary 8, 1939 (formerly Decree No. 694438 issued on February 27, 1934) in thename of "Vicente Dabon married to Marcela [or Marcelina] Ceniza." (pp. 7 and 19,Record on Appeal).

Petitioners are the descendants of Manuel Ceniza while the private respondents are thedescendants of his sister, Sofia Ceniza. Sofia Ceniza was childless but she had anadopted daughter named Flaviana Ceniza, who begot a daughter named Marced

Ceniza and who in turn had a daughter named Marcelina (or Marcela) Ceniza whomarried Vicente Dabon. Private respondents are the children of this marriage and theyare the great-great-grandchildren of Sofia Ceniza.

On the other hand, Manuel Ceniza had an only son, Pablo, who had two sons, Santiagoand Jose Ceniza. Petitioners Restituto and Jesus Ceniza and a certain NemesiaCeniza-Albina are their children and the great-grandchildren of Manuel Ceniza.

The records disclose that when Hacienda de Mandaue was subdivided for resale to theoccupants in 1929, Jose Ceniza and Vicente Dabon, who were residing in the hacienda,

jointly purchased Lot 627 on installment basis and they agreed, for convenience, to

have the land registered in the name of Dabon. Since then, Jose Ceniza, VicenteDabon, and their heirs have possessed their respective portions of the land, declaredthe same for taxation, paid real estate taxes on their respective shares, and made theirrespective installment payments to the Seminario de San Carlos de Cebu.

After Dabon died in 1954, his seven (7) children, named Magno, Jacinta, Tomas,Flaviana, Soledad, Teresita and Eugenia, succeeded to his possession of a portion ofthe land.

On November 4, 1961, a private land surveyor, Espiritu Bunagan, on the request ofJacinta Dabon and Restituto Ceniza who jointly defrayed the cost, divided Lot 627 into

three parts, namely:

(1) Lot No. 627-A with 3,538 square meters for Marcela Ceniza;

(2) Lot No. 627-B with 884 square meters for Restituto Ceniza; and


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(3) Lot No. 627-C with 834 square meters for Nemesia Ceniza-Albina, wholater bequeathed her share to her brother, Jesus Ceniza. (p. 19, Recordon Appeal).

The present controversy arose because the private respondents refused to convey Lots

Nos. 627-B and 627-C to the petitioners. They claimed that their predecessor-in-interest, Vicente Dabon, was the sole and exclusive owner of Lot 627, by purchase fromthe Seminario de San Carlos de Cebu. In their answer to the petitioners' complaint forreconveyance in June 1967, they alleged that the petitioners' right of action had alreadyprescribed.

Petitioners replied that Vicente Dabon held the land in trust for them, as co-owners,hence, their action for reconveyance was imprescriptible.

On August 31, 1970, the trial court rendered judgment for the petitioners. Finding thatthere existed a co-ownership among the parties, it ordered the private respondents to

execute deeds of conveyance of Lots Nos. 627-B and 627-C in favor of the plaintiffs,Restituto and Jesus Ceniza, respectively (p. 35, Record on Appeal).

On appeal by the defendants (now private respondents) the Court of Appeals onOctober 29, 1976, reversed that decision of the trial court. It ruled that the petitioners'right of action had prescribed after the lapse of 20 years from the date of registration ofthe land on February 8, 1939 in Vicente Dabon's name (p. 32, Rollo).

The petitioners have appealed to this Court by a petition for review under Rule 45 of theRules of Court.

The legal issue presented by the petition is whether the registration of the title of theland in the name of one of the co-owner, constituted a repudiation of the co-ownershipfor purposes of acquisitive prescription.

We find merit in the petition for review.

The trial court correctly ruled that since a trust r

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