Egao v CA, 174 SCRA 484 G.R. No.

79787, 29 June 1989 Facts: The respondents filed a motion for quieting the title and recovery of possession and ownership against the petitioners. Apparently, they claim they are the owners of the parcel of land by virtue of the deed of sale they entered into with Roberto Marfori to whom the petitioners allegedly sold their land to. The Egaos acquired their land title by virtue of a free patent and transferred their ownership in favor of Marfori by virtue of a deed of sale. However, the Certificate of Title was not transferred in Marforis favor. Upon purchase of the land from Marfori, the respondents introduced improvements thereon and paid taxes for the property. However, the petitioners illegally occupied portions of the land. Petitioner answers that they are the true owner of the land by virtue of the Certificate of Title issued by the Register of Deeds pursuant to their Free Patent. The lower court ruled in favor of Egao. Upon appeal, the CA reversed the decision of the lower court on grounds that the main issue should be whether Egao can validly sell the land to Marfori who subsequently transferred the ownership to the respondents. The CA holds both Egao and Marfori to be in pari delicto for violating the 5-year restriction provided by Commonwealth 141 against encumbrance and alienation of public lands acquired thrufree patent or homestead patent. They cannot therefore obtain affirmative relief. It also declares the respondents as innocent purchasers for value who the obtained the duplicate of the OCT still in the name of the Egaos from Marfori and ownership was transferred to them by physical possession of the property. It thus promulgated judgment holding the respondents the absolute owners of the land in dispute, to cancel the OCT of the petitioner and its transfer thereof to the respondents and to surrender peaceful possession of the land to the respondents. Issue: Whether or not the petitioners validly transferred their ownership to Marfori to resolve the rights of the respondents over the land in dispute? Ruling: The SC holds that based on the adduced evidence, the Egaos sold the lot to Marfori within the 5-year restriction period provided by law on Free Patent based on the Deed of Sale entered into by the parties. Although the petitioners denied the validity of the Deed of Sale the court held that it was notarized and a notarial documenthas in its favor the presumption of regularity. When the land was sold to the respondents, they know that the OCT is still registered under the name of the petitioners. Thus, they are not considered to be innocent purchaser as contrary to the ruling of the CA. Where a purchaser neglects to make the necessary inquiries and closes his eyes to facts which should put a reasonable man on his guard as to the possibility of the existence of a defect in his vendor's title, and relying on the belief that there was no defect in the title of the vendor, purchases the property without making any further investigation, he cannot claim that he is a purchaser in good faith for value. A private individual cannot bring an action for reversion or any action which would have an effect of canceling a free patent and the certificate of title issued on the basis thereof since the land covered will form part again of the public domain. Sec. 124 of the Public Land Act provides that deeds of sale of patented lands, perfected within the prohibited five (5) year period are null and void thus the Egaos have no title to pass to Marfori and nobody can dispose that which does not belong to him. The respondents are not innocent purchasers for value with no standing to question the rights of the petitioners over the land and to file an action to quiet the title. The petitioners remained to be the registered owners and entitled to remain in physicalpossession of the disputed property. Respondents are ordered to deliver the OCT to the petitioners without prejudice to an action for reversion of the land to be instituted by the Solicitor General for the State.

TEOFILO CACHO, petitioner-appellant, vs. COURT OF APPEALS, REPUBLIC OF THE PHILIPPINES, NATIONAL STEEL CORPORATION and THE CITY OF ILIGAN, respondents-appellees.
Land Registration as a Proceeding In Rem Facts: Doa Cacho applied for a registration of two parcels of land in Lanao Province and is situated within the limits of a military conservation. The two petitions were jointly tried and the court promulgated a decision for the issuance of two decrees subject to certain conditions of submitting the deed of sale for the first lot and the new plan for the second lot. The sole heir of Doa Cacho, Teofilo Cacho files a motion for the reconstitution of the two original certificates of title. His petition was opposed by the respondents Republic of the Philippines, National Steel Corporation (NSC), and the City of Iligan. The lower court dismissed the petition for the reason that the proper remedy would be to file a motion for reconstitution of the decrees after appreciating that two decrees were already issued which although subject to certain conditions are indisputably final. The petitioners motion to amend their petition was denied by the court but upon appeal, the SC remanded the case back to the lower court to hear their petition for the re-issuance of the decrees. The lower court upheld the decrees previously issued to Doa Cacho and order the Register of Deeds to re-issue said decrees. On appeal to the CA by the respondents, they assail the decision on grounds that the petition suffers from jurisdictional infirmities, with no compliance to the conditions over the decrees and there is no real party of interest involved to prosecute the case. The CA sustained the validity of the decrees while brushing aside the issue on jurisdictional infirmities but nevertheless reversed the lower court decision on the re-issuance of the decrees on the grounds that the final decision was reserved pending compliance to the conditions imposed by the court, hence this petition before the SC. Issue: Whether or not the decree of registration may be validly upheld for re-issuance in favor to the petitioner? Ruling: The SC held that a land registration proceeding is in rem thus the decree of registration is binding and conclusive against all persons and government irrespective of whether they were personally notified of theapplication for registration because the publication requirement is construed to be a notice to the whole world. The final decree of registration is deemed to be conclusive to all matters that can be litigated in a land registration proceeding. Both the lower court and CA found no doubt as to the finality of the decision for the decree after 1 year of its entry to the register of deeds according to the Torrens System. To sustain the CA requirement for compliance of the conditions to the decree would constitute derogation to the doctrine of res judicata and such would cause assault on the integrity and indefeasible character of the Torrens System. The issuance of the decree is merely the ministerial act on the Land Registration Commission upon the final judicial judgment of the court. A land registration proceeding is an in rem proceeding in that any final judgment promulgated upon by the court binds the whole world. The SC sets aside the decision of the CA and reinstated the decision of the lower court.

Flordeliza L. Valisno v Judge Andres B. Plan, GR No. L-55152 August 19, 1986 Facts: Petitioners purchased 2 parcels of land from the family of Blancos and subsequently declared ownership over the land for taxation purposes and took possession thereof by assigning a caretaker over the property who built his house thereon. Respondent Cayaba claims to be the owner of the property by virtue of a deed of sale executed in his and Bienvenido Noriegas favor from the heirs of Verano and ousted the caretaker from the property and constructed an apartment thereon. Petitioners filed an action for recovery of possession of the land. The court decided in favor of the petitioner but on appeal, the CA reversed the decision and dismissed thecomplaint of the petitioner on grounds that the description of the property in the complaint is different from the subdivision plan provided by the respondents with their respective area and boundaries appearing to be completely different. The court did not find any compliance to the requirement of the law that the property in dispute must be clearly identified. Under the Civil Code, Articles 433 and 541, the actual possessor of the property has the presumption of a just title and he need not be compelled to show or prove why he possesses the same. It was clear that the respondent is the current possessor of the property having constructed the apartment on the property in dispute. Contrasting the evidence of the respondent and petitioner, the court choose the respondents evidence as they were able to provide a vicinity plan that shows the land position in relation to the adjoining properties with known boundaries and landmarks. Petitioner merely presented a sketch prepared by Dr. Blanco constituting as mere guess works. Subsequently, the respondents filed a petition for registration of the property before the CFI which was opposed by the petitioner. Respondent moved for the dismissal of the opposition that the same is barred by a prior judgment of the court. The CFI dismissed the opposition on ground of res judicata thus this appeal before the SC. With the petition given due course by the SC, it orders both parties to submit their briefs. Only the petitioner submitted their own brief within the given period thus the SC considered the case submitted for decision with the brief of the respondent. The petitioner filed a motion to amend the application to include Bienvenido Noriega as a co-applicant to the petition.

a co-owner is to defend in court the interests of the co-ownership. Although the first action was captioned for the recovery of possession, possession is sought based on ownership, thus the action was one in the nature of accion reinvidicatoria. The second action is for registration of title where the registration is sought based on ones ownership over the property. The difference between the two is that the plaintiff seeks to exclude other persons from ownership over the property in the first action while it seeks to exclude the whole world in the second action. The cause of action however remains the same. The employment of two different actions does not allow one to escape against the principle of res judicata where one and the same cause of action cannot be litigated twice. Although the first action was litigated before a competent court of general jurisdiction and the other over a registration court is of no significance since that both courts should be of equal jurisdiction is not a requisite for res judicata to apply. For convenience, the SC should decide whether to dismiss the applicationfor registration or the opposition thereto. Because the conflicting claims of both parties have been settled and decided by the court previously, it upheld the finality of its decision and dismissed the petition.

Issue: Whether or not to grant the motion to dismiss filed by the petitioner? Ruling: The SC held that the Land Registration Act does not provide for pleading similar to a motion to dismiss but the Rules of Court allows its application in land registration proceeding as only suppletory when it is practicable and convenient. Therefore, the court may sustain a motion to dismiss in land registration proceeding as the case at bar. Noted by the court in the ordinary civil case, the counterclaim can be taken as a complaint where the defendant becomes the plaintiff. The original plaintiff thus becomes defendant in the counterclaim and he may choose to answer the counterclaim or be declared in default or file a motion to dismiss the same. The respondent clearly opted for the last choice. The SC held that res judicata operates in the case at bar with its requisites present in the case: [a] the former judgment must be final, [b] it must have been' rendered by a court having jurisdiction of the subject matter and of the parties, [c] it must be a judgment on the merits and [d] there must be between the first and second actions identity of parties, of subject matter and of cause of action. The inclusion of private respondent Cayaba's co-owner, Bienvenido Noriega, Sr., in the application for registration does not result in a difference in parties between the two cases. One right of

Jose Stillanopulos v City of Legaspi, GR No. 113913, October 12, 1999 Facts: The City of Legaspi filed a petition for judicial reconstitution of its titles to 20 parcels of land which certificates of title allegedly been lost during the World War II. The OCT was ordered by the court to be reconstituted in favor of the City of Legaspi. On 1970, the City filed a complaint for quieting of title on Lot 1 against the petitioners father and other parties. When the petitioners father died, his title was cancelled and transferred to the petitioner. The court upheld the title of the petitioner was declared the lawful owner of Lot 1. On appeal, the CA reversed the decision in favor of City of Legaspi. Its appeal before the SC was denied on grounds that the issues raised were questions of facts that the court could not entertain. Petitioner now filed an action for the cancellation of the OCT of the City of Legaspi which was denied by the trial court on ground of res judicata which the CA affirms. The petitioner now files an action for annulment of said OCT based on 3 grounds: (1) extrinsic fraud in the procurement by the City of Legaspi of its title; (2) its OCT that was judicially reconstituted does not exist; and (3) the court reconstituting the title lacks jurisdiction. It also contends that his father who was the registered and possessor of said lot was omitted by the City of Legaspi in its petition for reconstitution of title. He also asserted that his predecessor-in-interest owned lots 1 and 2 and donated lot 2 to the City of Legaspi, the deed of donation of which shows that the respondent acknowledge his predecessor-in-interest as the absolute owner of said donated lot. CA ruling: The CA ruled that the prescriptive period for extrinsic fraud of 4 years already lapsed and held that the petitioner is guilty of latches for filing the annulment case. Petitioner is further barred by res judicata between the earlier case of quieting of title and his petition for annulment there being identical parties, issues, and cause of action. He is also guilty of latches for not bringing the issue on lack of jurisdiction of the court. Issues: Whether or not the prescriptive period for external fraud already lapsed? Whether or not res judicata bars the petitioner for his cause of action? Whether or not he may assail the courts jurisdiction over the case? Ruling: On extrinsic fraud The SC held that the respondents failed to state in its petition for reconstitution of title that lot 1 was occupied by the petitioners predecessor-in-interest and failed to notify him of the proceeding. Therefore, the deliberate failure to notify him constitutes fraud. Unfortunately, the action already prescribed. Granting that the respondent failed to notify the petitioner of their application for the reconstitution of their title, it filed an action for quieting of title against the petitioners father in 1970 praying that it be declared as the owner of the property. Thus, as early as 1970, they were already aware of the action of the respondents. They failed to bring action within the 4-year prescription period. The petitioner was wrong to contend that the prescription begins to run only after the discovery of the fraud in 1988 when counsel of petitioner received the report from the Land Registration Commission because On jurisdiction issue

The petitioner was right to contend that the court did not acquire jurisdiction over the case due to lack of notice to the petitioners predecessor-in-interest because sending of notice to the occupant of the property subject to a land proceeding is mandatory and jurisdictional. Thus, with failure to send the notice to the other party renders the order of reconstitution null and void. It was wrong for the court to entertain the applicationfor reconstitution for in such action, the title has been destroyed or lost and a new duplicate of certificate of title will only be re-issued. The title of the property however was in the possession of the petitioners predecessor-in-interest thus the reconstituted title was deemed void. Unfortunately again, the action was brought to assail the courts jurisdiction 20 years after thereby giving rise to the respondents defense on latches against the petitioners. The petitioners contention that the equitable doctrine of latches applied against him renders fraud and injustice to him is untenable since the SC held he had a fair chance to bring the action in the case of quieting of title to prove his ownership over the disputed lot. On res judicata The SC held that the principle of Res Judicata sets in at the case at bar. Its elements include the following: (1) a judgment has becomes final; (2) such judgment was rendered on the merits; (3) the court that rendered it had jurisdiction over the subject matter and the parties; and (4) there was identity of parties, subject matter and causes of action between the previous and the subsequent action. The action for annulment appears to be a second cycle of reviewing a subject matter that has been finally decided by the court previously. The petitioner was held by the court to have proven possession only over the lot during the reconstitution proceeding. Even if the reconstitution proceeding was annulled, the ownership of the property in favor of the respondent has already been settled in the quieting of title proceeding. He is bound to abide to the decision of the previous case for he allowed the trial court to proceed in determining ownership of the land and to nullify his title.

Republic of the Philippines v Alexander Lao, GR No. 150413, July 1, 2003 Facts: Lao filed before the RTC of Tagaytay City application for registration of a parcel of land. She allegedly acquired the land by purchase from the siblings Raymundo Noguera and Ma. Victoria Valenzuela who inherited it from Generosa Medina. The latter, in turn, inherited the land from her father, Jose Medina, who acquired the same from Edilberto Perido by transfer. She prayed that the land be registered in her name under Commonwealth Act 141 (Public Land Act) based on her and her predecessor-in-interests open, public, actual, continuous, exclusive, notorious and adverse possession and occupancy under bona fide claim of ownership for more than thirty (30) years. She presented witnesses and evidence constituting of deed of sale, survey plan, the technical description of property and tax declarations in her and her predecessors names. The court approved the application. The petitioner represented by the Solicitor General appealed the decision before the CA which re-affirmed the lower court decision, hence this petition for review before the SC. The petitioner contends that there is no sufficient evidence to warrant the issuance of the title to the respondent as she fails to comply with the required periods and acts of possession mandated by law and her failure to prove that the land is alienable and disposable land of the public domain. Issue: Whether or not the respondent sufficiently provided evidence that she meets the qualifications required by law on the manner of possession (continuous, adverse, notorious, etc..) and the period of time (30 years) necessary to have a bonafide claim of ownership under C.A. 141? Whether or not respondent was able to show that the land subject of her application was disposable and alienable land of the public domain? Ruling: The court held that Commonwealth Act 141 requires that before one can register his title over a parcel of land, the applicant must show that he, by himself or through his predecessors-in-interest, has been in open, continuous, exclusive and notorious possession and occupation of the subject land under a bona fide claim of ownership since June 12, 1945 or earlier; in adverse possession over the land for at least 30 years and the land subject of the application is alienable and disposable land of the public domain. Petitioner was right to contend that the respondent did not prove by incontrovertible evidence that she possessed the property in the manner and time required by law. She did not provide the exact period when her predecessors-in-interest started occupying the property. No extrajudicial settlement of the property from its previous owners was shown and she did not show any relationship between the parties where she obtained her deed of sale. She further did not present any certification from appropriate government agency to show that the property is re-classified as disposable and alienable land of the public domain. It is incumbent for an applicant of a land registration to provide these incontrovertible evidences to support her claim for her application. In the absence of these evidences, her application shall fail. Hence the petition was granted and her application was denied.

Biblia Toledo-Banaga and Jovita Tan v CA, GR nO, 127941, January 28, 1989 (302 SCRA 331) Facts: Petitioner Banaga filed an action for redemption of her property which was earlier foreclosed and later sold in a public auction to the respondent. The trial court declared petitioner to have lost her right for redemption and ordered that certificate of title be issued to the respondent which the petitioner caused an annotation of notice of lis pendens to the title. On appeal, the CA reversed the decision and allowed the petitioner to redeem her property within a certain period. Banaga tried to redeem the property by depositing to the trial court the amount of redemption that was financed by her co-petitioner Tan. Respondent opposed in that she made the redemption beyond the period ordered by the court. The lower court however upheld the redemption and ordered the Register of Deeds to cancel the respondents title and issue a new title in favor of the petitioner. In a petition for certiorari before the CA by the respondent, another notice of lis pendens was annotated to the title. CA issued a temporary restraining order to enjoin the execution of the court order. Meanwhile, Banaga sold the property to Tan in the absolute deed of sale that mentions the title of the property still in the name of the respondent which was not yet cancelled. Despite the lis pendens on the title, Tan subdivided the lot into a subdivision plan which she made not in her own name but that of the respondent. Tan then asked the Register of Deeds to issue a new title in her name. New titles were issued in Tans name but carried the annotation of the two notices of lis pendens. Upon learning the new title of Tan the respondent impleaded her in his petition. The CA later sets aside the trial courts decision and declared the respondent as the absolute owner of the property for failure of the petitioner to redeem the property within the period ordered by the court. The decision was final and executory and ordered the Register of Deeds to reinstate the title in the name of the respondent. The Register of Deeds refused alleging that Tans certificate must be surrendered first. The respondent cited the register of deeds in contempt but the court denied contending that the remedy should be consultation with the Land Registration Commissioner and in its other order denied the motion of respondent for writ of possession holding that the remedy would be to a separate action to declare Tans title as void. In its motion for certiorari and mandamus to the CA, the court set aside the two assailed orders of the trial court and declared the title of Tan as null and void and ordered the Register of Deeds to reinstate the title in the name of the respondent. Petitioners now argued that Tan is a buyer in good faith and raised the issue on ownership of the lot. Issue: Whether or not petitioner Tan is a buyer in good faith?

Ruling: The court held that Tan is not a buyer in good faith because when the property was sold to her she was aware of the interest of the respondent over the property. She even furnished the amount used by Banaga to redeem the property. When she bought the property from Banaga she knows that at that time the property was not registered to the sellers name. The deed of sale mentioned the title which was named to the respondent. Moreover the title still carries 2 notices of lis pendens. Tan therefore cannot feign ignorance on the status of the property when she bought it. Because Tan was also impleaded as a party to the litigation, she is bound by the decision promulgated to the subject of such litigation. It is a settled rule that the party dealing with a registered land need not go beyond the Certificate of Title to determine the true owner thereof so as to guard or protect her interest. She has only to look and rely on the entries in the Certificate of Title. By looking at the title Tan would know that the certificate is in the name of respondent. Being a buyer in bad faith, Tan does not acquire any better right over the property. The adjudication of the ownership in favor to the respondent includes the delivery of the possession by the defeated party to the respondent.

Edilberto Cruz v Bancom Finance Corp. GR No. 147788, March 19, 2002 Facts: The petitioners are the registered owners of an agricultural land. Candelaria Sanchez introduced the petitioner to Norma Sulit who offered to buy the petitioners lot. The asking price for the property is P7000,000 but Norma only has P25,000 which the petitioner accepted as an earnest money with agreement that the title will be transferred in the name of Norma after she pays the remaining balance. Norma failed to pay the balance but negotiated to transfer the title in her name which the petitioner refused. However, through Candelaria Sanchez the title was transferred to Norma upon the execution of a deed of sale made by the petitioner in favor of Sanchez who obtained a bank loan using the petitioners land as collateral. She then executed on the same day another deed of sale in favor of Norma. Both deed of sales reflect the amount of only P150,000.00. Using the deed of sale Norma was able to register the property in her name. Norma obtained a loan from Bancom while mortgaging the land title. Meanwhile, a special agreement was entered into by petitioner and Norma. When Norma failed to pay the remaining balance stipulated in their special agreement, the petitioner filed a complaint for the reconveyance of the land. Bancom claimed priority as mortgagee in good faith. Norma defaulted payment with the bank and the property was foreclosed and auctioned with Bancom as the highest bidder. Trial Court decision: The trial court held that the contract of sale between petitioner and Candelaria was absolutely simulated thereby producing no legal effect. Bancom was not a mortgagee in good faith cannot claim priority rights over the property. Court of Appeals: Reversed the RTC decision holding the deed of sale as valid and binding and not simulated. The mortgage contract between Norma and Bancom is likewise valid and Bancom has a priority rights over the property. It also ruled that the petitioner intended to be bound by the sale and mortgage since they did not seek to annul the same but instead executed a special agreement to enforce payment of the remaining balance. Issues: Whether or not the sale and mortgage are valid? Whether or not the respondent is an innocent mortgagee in good faith? Ruling: As a general rule, if the terms of the contract are clear and unambiguous its stipulations shall control but when its words contravene with the intention of the parties, the intention shall prevail over the words of the contract. Simulation of contract takes place when the parties do not want the express words of the contract to have its legal effect. It may be absolute or relative. When parties do not intend to be bound at all it is absolute simulated contract and considered void. When the parties conceal their true agreement, it is a relative simulated contract and binds the parties when it does not prejudice third persons and is not contrary to law, morals, good custom, public order, and public policy. It was shown that although a deed of absolute sale was executed in the amount of P150,000 no consideration was involved as no exchange of money took place between them. Norma and Candelaria also did not assert their right to ownership over the property. It was clear that the deed of sale was simulated in order to facilitate the bank loan to be secured by Candelaria using the property as collateral. The fact that Norma obtained registration of the property in her name does not entitle her to ownership since the simulated deed of sale produced no legal effect. A simulated contract is not a recognized mode of transferring ownership. With the contention of Bancom that it is a mortgagee in good faith, the court ruled otherwise pointing out that it is a mortgagee-bank thus is expected to exercise greater care and prudence when dealing with registered lands. Failure to observe due diligence was shown with judicial notice that the bank did not conduct an ocular inspection on the property and did not send a representative to investigate the ownership of the land, these being a standard procedure before approving loans. It is also aware of the adverse claim because of the notice of lis pendens annotated to the title. Because it was established that the two deeds of sale were simulated thus null and void, it does not convey any right that may ripen into a valid title. The mortgage was also null and void because Norma was not the owner of the property.

The property cannot be validly foreclosed by the respondent. The court declares the petitioner to remain as the valid owner of the property. Domingo Lao v Estrella Villones- Lao et al. GR NO. 126777, April 29, 1999 (306 SCRA 387) Facts: Domingo Lao and Estrella Lao, during their marriage, acquired a real property worth 1.5M including improvements. The property was mortgaged with Metrobank at the time they separated. After full payment of the mortgage, Estrella was able to obtain her own copy of the property title. The property was leased by Domingo to Filmart and learned that the title to the property was already cancelled and a new one was issued in the name of Villena spouses when the Villena came to visit the property and informed the tenants that they are the new property owners. Estrella was at that time in dire need of money and the Malanas spouses approached her and introduced themselves as agents of Carlos Villena who is willing to grant her a loan. Carlos Villenas required Estrella to obtain a Special Power of Attorney from Domingo and his son Ernesto who are also named in the title as owners of the property. Estrella admitted it would be difficult to obtain the SPA because she and her husband are not on good and speaking terms. The Malana spouses however assured her that they could help her obtain the SPA. 3 days after they returned to Villena with the SPA and was able to secure the loan. Upon failure of Estrella to pay, Carlos Villena effected an extrajudicial foreclosure of the property and a new certificate of title was issued in favor of the Villena spouses. Domingo filed a complaint for the annulment of the SPA, mortgage and extrajudicial foreclosure, cancellation of the TCT and reconveyance of title. The lower court ruled in favor of Domingo and ordered spouses Villena and Malanas together with Estrella to jointly and severally pay for damages and litigation costs to Domingo while Villena can recover the indebtedness of Estrella through an ordinary suit. In its modified judgment the court further ordered the Villenas to vacate the premises and a new Cert. of title to be issued to Domingo and Estrella Lao with 20% share to Ernesto Lao. On appeal, the CA reversed the decision declaring the mortgage and foreclosure sale valid and ordered the transfer of the title to the Villena spouses. It held that the respondents are mortgagees in good faith and not privy to the forgery of the SPA and the petitioner was negligent to entrust the title to Estrella. Issue: Whether or not the Villena spouses are mortgagees in good faith? Ruling: The court ruled that it was established that the Malana spouses are the agent brokers of Villena and not of Estrella. The court believes that the Malanas and Villena are business partners in credit financing. They were the ones who approached Estrella and offered the loan to be financed by Villena. Estrella informed Carlos Villena about the difficulty of securing the signature of Domingo yet they pursue the offer of loan with the Malanas helping to secure the SPA. Estrella was just asked to sign a black SPA with her signature affixed on the portion stating with my marital consent. She did not read and understand the document. They took advantage of her dire need for money at that time. The participation of the Malanas extends beyond as mere witness to the mortgage while Villena was aware of the situation. Estrella as a co-owner is entitled to obtain her own copy of the title of the property thus she cant be denied to secure her own title. The court has reason to believe that Villena feign his innocence on the flawed character of the SPA contending that as a legitimate businessman he should exercise due diligence to consider the fact dealing with a conjugal property of an estranged wife. The NBI also confirmed that the signatures of Domingo and Ernesto are forged. Therefore the mortgage contract is deemed to be invalid and likewise the foreclosure is also invalid. A holder in bad faith of a certificate of title is not entitled to the protection of the law, for the law can not be used as a shield for fraud. The court revived and affirmed the lower court decision.

Pacifico Garing v Heirs of Marco Silva, et. al. GR No. 150173, September 5, 2007 (532 SCRA 294) Facts: Pacifico Garing and his wife filed before the RTC complaint for reconveyance of property alleging that they are the lawful possessor of the Lot C of a subdivision plan bounded southeast by the Mangop River. Over the years accretion caused by the Mangop River led to the formation of land between the river and Lot C. He alleges that he and his predecessors-in-interest have been in possession of this land formation and cultivated the same. Marcos Silva informed him that the two lots are within the boundaries of his property and was later ordered to stop gathering coconuts from the said lots. They assail the Original Cert. of Title issued to Marcos Silva to have unlawfully included in its Lot No. 4891-B the two parcels of land they allegedly possess. The heirs of Silva answered that they are the lawful owner of the said lots and that the petitioner forcibly with threat took possession of the said lots. Pending the case for reconveyance of property, Jose Acosta, another respondent filed a motion for intervention. He alleges to have purchased the two lots from the heirs of Silva as shown by extrajudicial partition and simultaneous sale and contends that the petitioners were present when they have the lot surveyed. They did not raise any objection thereto. He further raise that the original registration for Lot No. 4891-B was on Aug. 5, 1969 and the petitioner filed its complaint only on March 14, 1984 thus the action has already prescribed. The lower court dismissed the complaint for lack of merit declaring the respondents as the lawful owner of the lot in dispute. On appeal, the CA affirmed the lower court decision holding that the petitioners claim that the formation of the lot was due to accretion is without any supporting evidence. In the absence of concrete proof, it is proper for the court to rule that the said lot is included in the title of respondent covering Lot No. 4891-B. Jose Acosta has the right to rely solely on what appears on the certificate of title of Silva as the vendor of the property except when he is required to make the necessary inquiry in case of any cloud in the ownership of the property. Under the Torrens Law, the Original Certificate of Title and that of the owners duplicate certificate copy can be received as evidence in all Philippine courts and shall be conclusive on all matters contained therein and principally with regards to the identity of the property owner. And if there are pre-existing claims and liens which existed prior to the issuance of the Certificate of Title, they are cut off if not noted thereon and the certificate so issued binds the whole world. Issue: Whether or not the petitioners are the lawful owner of the land in dispute. Ruling: It was held that the Supreme Court is not a trier of facts and only questions of law may be raised before it. It however held that the findings of facts by the Court of Appeals are binding and conclusive. Ernesto David et al v Cristito Malay GR No. 132644, November 19, 1999 (318 SCRA 711) Facts: Andres Adona, married to Leoncia Abad, applied for a homestead patent over a parcel of agricultural land. When Leoncia died, he cohabited with Ma. Espiritu without the benefit of marriage. When Andres died Ma. Espiritu succeeded in obtaining title over the land in her name. After Maria Espiritu died, her children as well as descendants of Andres Adona by his marriage with Leoncia Abad, continued to be in peaceful and quiet possession of the subject

land. The petitioners executed a deed of extrajudicial settlement with sale over the property to Mrs. Ungson. Respondents protested contending they are the true owners of the land. The sale was however rescinded because Mrs. Ungson failed to pay in full the amount agreed upon. Subsequently, the petitioners executed another deed of Extrajudicial Settlement with Sale, dividing equally among themselves the land and sold their respective shares to their co-petitioner Ubago et al. where an Original Cert. of Title was issued in their favor on Nov. 27, 1992. Respondents filed a complaint for annulment of sale with restraining order, injunction and damages against the petitioners contending that the Original Cert. of Title was obtained by Ma. Espiritu by false representation as the widow of Andres Adona. Lower court ruling: dismissed the complaint for lack of cause of action and on ground of prescription. The action, being an annulment of sale based on fraudulent titling of the property constitutes a cause of action of a collateral attack on the Torrens Title. Even if the action was treated as one of conveyance, the suit will still fail because the action for reconveyance could be brought within 10 years from the date of issuance of certificate of title and the action has already prescribed. Court of Appeals ruling: set aside dismissal of lower court and ordered the cancellation of Transfer Certificate of Title in the name of the Ubagos and reconveyance of the property of the estate of Andres Adona. There was evidence that Ma. Espiritu concealed the existence of Adonas first marriage to Leoncia from her executed affidavit filed with the Director of Lands. The attending fraud created an implied or constructive trust in favor of the plaintiffs and notwithstanding the irrevocability of the Torrens Title issued in favor of Ma. Espiritu they can still be compelled to reconvey the title of the property to the real owners. The Torrens system was not designed to shield and protect one who had committed fraud or misrepresentation and thus holds title in bad faith. Issue: Whether or not the certificate of title of the Ubagos may be collaterally attacked and the property can be reconveyed to the respondents? Ruling; The issuance of a certificate of title of disposable public land and certificate of title issued under a judicial registration proceeding is deemed indefeasible. Under the Land Registration Act, a Torrens title becomes indefeasible after 1 year from the date of the decree of registration. The decree becomes incontrovertible and binding on all persons whether notified or not being an in rem proceeding. The OCT of Ma. Espiritu was issued in December 1933 and becomes indefeasible a year after the decree. However, the attendance of fraud created an implied trust in favor of the respondents that gave them the right of action to seek the remedy of reconveyance of a property wrongfully obtained if the property has not yet been passed to an innocent purchaser for value. If the property has been passed into the hands of an innocent purchaser for value, the remedy would be an action for damages. The Court of Appeals did not err to treat the action for annulment of sale with damages as one for reconveyance. If the person who claims to be the owner of the property is in actual possession thereof, the right to reconvey does not prescribe. An action for reconveyance based on implied trust prescribes in 10 years. However, the person who is in actual possession of a piece of land under claim of ownership may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right. His undisturbed possession gives him continued right to seek the aid of court to ascertain the nature of the adverse claim of a third party on his title. The prescription of 10 years on reconveyance based on implied trust is applied only to persons who are not in actual possession of the property.

The Ubagos are not buyer in good faith. An innocent purchaser for value is one who buys property of another without knowledge that other persons may have right or interest to the property and pays a full consideration of the same before he has notice of the claim or interest of others to the property. He buys the property with the belief that the person from whom he receives the thing was the owner and could convey title to the property. It is true that a person dealing with a registered land has the right to rely on the face of a Torrens title and may dispense with the need to make further inquiry. An exception would be when the party has actual knowledge of facts and circumstances attending to the title that would impel a reasonably prudent man to make an inquiry or he has some knowledge as to the defect on the title or lack of right of the vendor. The court finds out that in the Register of Deeds their Transfer of Certificate of Title has entry that provides that their ownership over the land is subject to prospective claims by any possible heirs and creditors who might have been deprived of their lawful participation in the estate. Rule 74, section 4 of the Rules of Court provides for 2 years after the settlement and distribution of an estate for any person or heirs who may have been unlawfully deprived of their participation in the distribution of an estate to bring action to compel the settlement of the estate in the courts in the manner provided for the purpose of satisfying such lawful participation. The Extrajudicial Settlement of Estate with Sale was executed on December 15, 1990 while the plaintiffs complaint for Reconveyance was filed on December 7, 1992. Hence, the two-year period has not yet elapsed. Bernardino Ramos and Rosalia Oli v CA GR No. 1110227, February 3, 1999 (302 SCRA 589) Facts: Pedro Tolentino who claims ownership over Lots 572 and 579 separately sold each lot to the petitioners, Bernardino Ramos. The petitioners instituted an action for reconveyance with damages against the respondents, Rodolfo Bautista and Felisa Lopez who allegedly wrongfully registered the said lots in their name. The respondents acquired their title from Lucia Bautista to whom a Certificate of title covering both lots is issued by the Register of Deeds. As Lucias heir, Rodolfo is able to acquire title to the lots through a Transfer of Certificate of Title. Petitioners contend that they are in open, public, continuous, and adverse possession of said lots for not less than 50 years personally and through their predecessors-in-interest and that Lucia neither claimed ownership thereto nor took possession of the same. They assail the Certificate of Title in the name of the respondents as null and void and that they have acquired the lots by acquisitive prescription. Respondents claims absolute ownership over the said lots pointing out that based from the cadastral survey, Pedro Tolentino was able to acquire only a different lot that is adjacent to Lot 572 which is the portion occupied by the petitioners by tolerance of the original registrant Lucia Bautista. In the affirmative defense respondents maintained that the action for reconveyance brought by the petitioners is tantamount to a collateral attack to the decrees of registration while asserting the indefeasible of the Torrens Title. The lower court ruled to dismiss the petition citing the cadastral proceeding in 1940 where Bernardino Ramos did not answer to the proceeding despite his claim of possession over the lots and only Lucia filed an answer and appeared to be the lawful claimant in the proceedings thus was issued an Original Certificate of Title to the lots in dispute. The trial court presumed that everyone is notified of the cadastral proceeding, it being in rem in nature. The petitioner has 1 year from the issuance of the decree to file for the reopening of the proceeding on ground of fraud but he did not do so. Latches against him have set in for filing the action for reconveyance 36 years after. The court of appeals upheld the decision of the lower court hence this petition before the SC.

Issue: Whether or not the registered title of the respondents can be attacked by the petitioners? Ruling: Petitioners anchor their claim for ownership over the parcels of land by virtue of the deed of sale executed between them and Pedro Tolentino. However, they failed to present evidence according to the forms required by law. The deed of sale was apparently lost by a fire from their counsels office and in lieu thereof they presented a certification from a notary public who was their other lawyer attesting to the authenticity of the certified true copy of the deed of sale. The certification however does not meet the requirement of law provided in section 20 of Rule 132 where before a private document be received as authentic it must be proved by anyone who witness the execution of the document or there is genuineness on the signature of the maker presented in evidence. They failed to present any witness to the execution of said document and they could not demonstrate the genuineness of the signature from the document as it does not bear any signature of the maker. Furthermore, even if there is authenticity to the document, the basic civil law principle of relativity of contract operates and it cannot bind third party like Lucia. Failure to register the contract of sale to the said lot, the sale was merely binding between the petitioner and the vendor. Petitioners presented evidence of mortgage of the property but those did not conform to the form required by law. The instrument did not sufficiently describe the property of the mortgage therefore it would be difficult for the court to assume that the property mortgage was the same as the subject of dispute. Their claim of possession of not less than 50 years on the property can be construed as a bare claim and it is upon the petitioner to have the burden of proving their claim of possession to the lot which they failed to prove in court. Their claim of fraud was not substantiated. Under the law, an action for reconveyance on ground of fraud prescribed in 4 years which is counted from the issuance of the registration of title to Lucia Bautista because the registration served as a constructive notice to the whole world. On one hand, an action based on implied or constructive trust prescribes in ten (10) years. This means that petitioners should have enforced the trust within ten (10) years from the time of its creation or upon the alleged fraudulent registration of the property. But the petitioners failed to avail of any of the aforementioned remedies within the prescribed periods. Private respondents have in their favor the law that protects holders of title under the Torrens System of land registration. Petition was denied. Francisco Baguio v RP, GR No. 119682, January 21, 1999 (301 SCRA 450) Facts: William Michael filed with the Bureau of Lands an application for foreshore lease of a public land. The application was recommended for approval by the land investigator who also recommended that the applicant be granted a provisional permit to occupy the land for one year. By virtue of the permit, Michael made reclamation of the land introducing improvements therein. Upon the expiration of the permit the Highways District Engineer recommended to the Director of Lands that the land be leased to Michael. On the other hand, the land investigator recommended granting Michael the authority to survey the foreshore land in view of the completion of the reclamation made by him on the premises. On February 25, 1968, Michael filed a miscellaneous sales application covering the reclaimed foreshore land. On the other hand, petitioner Baguio applied to the Bureau of Lands for a free patent over the same land stating that the land was agricultural and he has been in actual and continuous possession of the same. A free patent was issued in Baguios favor by the Register of Deeds of Cebu. The petitioner now demands rental payment from Michael for using the land occupied by Michael Slipways, Inc. and

filed an opposition to Michaels miscellaneous sales application on the said land. In turn, Michael filed a protest on the issuance of the free patent to Baguio by the Bureau of Lands since he is the actual possessor of the land since 1963 and introduced substantial improvement thereon. Upon recommendation of the Land Management Bureau of the Department of Environment and Natural Resources, the government filed a petition for the cancellation of the patent and reversion of land to the public domain. Ricardo Michael was allowed to intervene as heir and successor-in-interest of William Michael. The trial court cancelled the free patent of Baguio and ordered the reversion of the land to public domain. It ruled that the false statement that Baguio made in his application for free patent had the effects of ipso facto canceling the free patent granted to him. On appeal, petitioner assails the court decision of cancelling his patent since the action has already prescribed and that it erred in ruling that he acted in bad faith and procured the registration of his free patent through fraud and misrepresentation. Issue: Whether or not the free patent of the petitioner may be cancelled? Ruling: The Supreme Court that while a Torrens Title becomes indefeasible within 1 year after its registration the State may still bring action for reversion of a parcel of land to the public domain covered by a Torrens title obtained through fraud because such action is not barred by prescription as provided by Commonwealth 141. Public policy demands that one who obtains title from a public land through fraud should not be allowed to benefit from it. The declaration of the petitioner in his application for patent under oath that the land is an agricultural land not claimed or occupied by another person, that he is in actual and continuous possession of the land constitute fraud and misrepresentation. Records show 13 years before the alleged occupation of the petitioner to the land, Michael already filed a foreshore lease application over the same and since then it was Michael who was in actual possession of said land by operating a dry docking service and made some improvements thereon. It was also established that the land in dispute is a foreshore land and not agricultural. The false statement made by petitioner in his application justifies the immediate cancellation of his title. The indefeasibility principle of Torrens System does not apply on titles secured by fraud and misrepresentation. The registration of a patent under the Torrens System merely confirms the registrants title. It does not vest title where there is none because registration under this system is not a mode of acquiring ownership. Michael has been in possession of the land by virtue of provisional permit granted to him to occupy the same 13 years before the petitioner filed his application for a free patent and Michael filed a sales application over the land 8 years prior to the petitioners application. Thus, it was correct for the court to rule that William Michael and his successor-in-interest Ricardo Michael as the true and rightful possessor of the land. Sec. 105 of the Public Land Act provides that in case of death of the original applicant he can be succeeded in his rights and obligations by his legal heirs with respect to the land applied for or leased therefore Ricardo Michael is entitled to the possession of the land as contrary to what the petitioner asserts.