Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No.

183811 May 30, 2011

ROSALIA N. ESPINO, Petitioner, vs. SPOUSES SHARON SAMPANI BULUT and CELEBI BULUT, Respondents. DECISION CARPIO, J.: The Case This is a petition for review1 of the 14 April 2008 Decision2 and 8 July 2008 Order3 of the Regional Trial Court of Trece Martires City, Branch 23 (trial court). In its 14 April 2008 Decision, the trial court set aside its 4 September 2006 Decision and dismissed petitioner Rosalia N. Espinos (Espino) petition for issuance of new owners copies of Transfer Certificates of Title (TCT) Nos. T-72654, T-72655, T-72656, T-72657, T-72658, T72659, T-72660, T-72661, T-72662, T-72663, and T-72664. In its 8 July 2008 Order, the trial court denied Espinos motion for reconsideration. The Facts Spouses Rosalia and Alfredo C. Espino (spouses Espino) are the registered owners of eleven adjacent lots situated in Tanza, Cavite and covered by TCT Nos. T-72654 to T-72664. Sometime in January 2006, Espino lost the owners duplicate copies of the eleven TCTs. On 23 March 2006, Espino reported the loss to the Register of Deeds of Trece Martires City. Espino also filed a petition for issuance of new owners copies of the eleven TCTs before the trial court docketed as LRC Case No. 6832-462. On 4 September 2006, the trial court granted Espinos petition. On 27 October 2006, new copies of the eleven TCTs were issued to Espino under Section 1094 of the Land Registration Act. On 4 January 2007, respondent spouses Sharon Sampani Bulut and Celebi Bulut (respondents) filed with the trial court a petition for relief from judgment.5 Respondents claimed that they had actual possession of the owners copies of the eleven TCTs which had been declared lost and cancelled by the trial court. Respondents explained that on 12 April 2003, spouses Espino sold a parcel of land covered by TCT No. T-279982 to a certain Beauregard E. Lim (Lim).6 Thereafter, Lim allegedly subdivided the property into eleven lots but the title remained in the name of spouses Espino because Lim lacked the funds to transfer the titles in his name. On 21 March 2006, Lim sold the eleven lots to respondents 7 and gave them the eleven owners copies of the TCTs.8 When respondents tried to register the properties in their name, they discovered the trial courts 4 September 2006 Decision and this prompted them to file the petition for relief from judgment. On 9 January 2007, the trial court issued an ex-parte temporary restraining order. 9 Subsequently, on 30 January 2007, the trial court granted respondents prayer for the issuance of a writ of preliminary injunction. 10 On 23 March 2007, the trial court issued the writ of preliminary injunction which provides: NOW THEREFORE, you are hereby RESTRAINED or PROHIBITED from accepting/registering any document executed by respondent Rosalia N. Espino and any person authorized by her that will in any way encumber or cause the transfer of the property covered by the following certificates of title, to wit: 1. Transfer Certificate of Title No. T-72654; 2. Transfer Certificate of Title No. T-72655; 3. Transfer Certificate of Title No. T-72656; 4. Transfer Certificate of Title No. T-72657; 5. Transfer Certificate of Title No. T-72658;

6. Transfer Certificate of Title No. T-72659; 7. Transfer Certificate of Title No. T-72660; 8. Transfer Certificate of Title No. T-72661; 9. Transfer Certificate of Title No. T-72662; 10. Transfer Certificate of Title No. T-72663; and 11. Transfer Certificate of Title No. T-72664. Until and after the injunction is ordered revoked and/or will be made permanent. 11 On 14 April 2008, the trial court granted respondents petition for relief from judgment and declared the writ of preliminary injunction permanent. The trial courts 14 April 2008 Decision provides: WHEREFORE, the Decision dated September 4, 2006 is set aside and the petition for the issuance of new owners copies of Transfer Certificates of Title Nos. T-72654, T-72655, T-72656, T-72657, T-72658, T-72659, T-72660, T-72661, T-72662, T-72663 and T-72664 is DISMISSED. The owners copies of the above listed transfer certificates of title issued by the respondent Registry of Deeds for the City of Trece Martires by virtue of the Final Decision dated September 4, 2006 is declared null and void. Respondent Rosalia Espino is likewise directed to pay petitioners Sps. Sharon and Celebi Bulut moral damages in the amount of Two Hundred Thousand (Php 200,000.00) Pesos; exemplary damages in the amount of One Hundred Thousand (Php 100,000.00) Pesos; and attorneys fees in the amount of Sixty Thousand (Php 60,000.00) Pesos. SO ORDERED.12 The Ruling of the Trial Court The trial court declared that Espino did not have possession of the eleven owners copies of the TCTs because respondents had been in possession of the eleven titles from the time respondents bought the properties from Lim in 2006. The trial court said that "when the original owners copy of the title is in fact not lost but is in the possession of a new owner, being the alleged buyer," the trial court did not acquire jurisdiction over Espinos petition for issuance of new owners copies of the eleven titles. The trial court also awarded respondents moral and exemplary damages and attorneys fees after it declared that Espino had the intent to defraud respondents when she executed the affidavit of loss and filed the petition. The Issues Espino raises the following issues: 1. Whether the trial court erred in recognizing and defending the alleged ownership rights of respondents as possessors of the eleven TCTs as against Espino, the registered owner of the properties; and 2. Whether the trial court erred in awarding damages to respondents. The Ruling of the Court The petition is partly meritorious. According to Espino, the trial court decided on the issue of ownership of the properties when it permanently enjoined the Register of Deeds from accepting or registering any kind of conveyance that may be executed by Espino to any person except as to respondents. Espino adds that the trial court recognized the status of respondents as the "buyer" and "new owners" of the properties. Espino also denies that she deceived the trial court and defrauded respondents as there was no privity of contract between Espino and respondents. Espino maintains that she had no knowledge of the unregistered sales of the properties to Lim and the respondents. Espino adds that there was no fraud, bad faith or malice when she applied for the new owners copies of the eleven TCTs.

Contrary to Espinos allegation, the trial courts 4 September 2006 Decision and the 23 March 2007 Writ of Preliminary Injunction did not declare that respondents are the "new owners" of the properties. While the trial court did restrain the Register of Deeds from accepting or registering any document executed by Espino and any person authorized by her that will in any way encumber or cause the transfer of the properties, the trial court did not adjudge respondents as the owners of the properties. Moreover, the trial court does not have jurisdiction to declare respondents as the "new owners" of the properties because this is not an issue in a petition for relief from judgment. In Strait Times, Inc. v. Court of Appeals ,13 we stated: It is judicially settled that a trial court does not acquire jurisdiction over a petition for the issuance of a new owners duplicate certificate of title, if the original is in fact not lost but is in the possession of an alleged buyer. Corollarily, such reconstituted certificate is itself void once the existence of the original is unquestionably demonstrated.Nonetheless, the nullity of the reconstituted certificate does not by itself settle the issue of ownership or title over the property; much less does it vest such title upon the holder of the original certificate. The issue of ownership must be litigated in appropriate proceedings. It cannot be determined in an action for the issuance of a new owners duplicate certificate of title or in proceedings to annul such newly issued duplicate.14 (Emphasis supplied) In this case, respondents possession of the eleven TCTs is not necessarily equivalent to ownership of the lands covered by the TCTs. The certificate of title, by itself, does not vest ownership; it is merely an evidence of title over a particular property.15 Again, the issue of ownership of the eleven properties must be litigated in the appropriate proceedings. We, however, delete the award of moral and exemplary damages and attorneys fees for lack of factual and legal basis. There is nothing in the records that supports an award of moral damages. The trial court only said: The intention of respondent Rosalia Espino was to defraud the buyer of the land as in fact by her act of executing such affidavit of loss (Exhibit "E") she almost deceived this Court.16 In order that moral damages may be awarded, there must be pleading and proof of moral suffering, mental anguish, fright and the like.17 While respondents alleged sleepless nights and mental anguish in their petition for relief, they failed to prove them during the trial. Mere allegations do not suffice. They must be substantiated. Furthermore, the trial court made no reference to any testimony of the respondents on their alleged physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury as would entitle them to moral damages. lawphi1 Likewise, since respondents failed to satisfactorily establish their claim for moral damages, respondents are also not entitled to exemplary damages. Article 2234 of the Civil Code provides: ART. 2234. While the amount of the exemplary damages need not be proved, the plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded. x x x x As to the award of attorneys fees, Article 2208 of the Civil Code provides: ART. 2208. In the absence of stipulation, attorneys fees and expenses of litigation, other than judicial costs, cannot be recovered, except: 1. When exemplary damages are awarded; 2. When the defendants act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest; 3. In criminal cases of malicious prosecution against the plaintiff; 4. In case of a clearly unfounded civil action or proceeding against the plaintiff; 5. Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs plainly valid, just and demandable claim; 6. In actions for legal support; 7. In actions for the recovery of wages of household helpers, laborers and skilled workers;

8. In actions for indemnity under workmens compensation and employers liability laws; 9. In a separate civil action to recover civil liability arising from a crime; 10. When at least double judicial costs are awarded; 11. In any other case where the court deems it just and equitable that attorneys fees and expenses of litigation should be recovered. In all cases, the attorneys fees and expenses of litigation must be reasonable. An award of attorneys fees is an exception and there must be some compelling legal reason to bring the case within the exception and justify the award. 18 In this case, none of the exceptions applies. Moreover, we already deleted the trial courts award of exemplary damages which might have served as its basis for awarding attorneys fees. WHEREFORE, we AFFIRM with MODIFICATION the 14 April 2008 Decision and 8 July 2008 Order of the Regional Trial Court of Trece Martires City, Branch 23. We DELETE the award of moral and exemplary damages and attorneys fees. SO ORDERED. ANTONIO T. CARPIO Associate Justice

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 111732 February 20, 1996

NEW DURAWOOD CO., INC. petitioner, vs. COURT OF APPEALS, HON. FELIX S. CABALLES, as Judge, RTC of Antipolo, Rizal, Branch 71, WILSON M. GAW, ORLANDO S. BONGAT , DURAWOOD CONSTRUCTION AND LUMBER SUPPLY CO., INC., respondents. DECISION PANGANIBAN, J.: The main issue here is: does a court have jurisdiction to issue a new owner's duplicate of a Torrens certificate of title if it is shown that the existing owner's copy has not, in fact and in truth, been lost or destroyed? The Court resolved this issue in the negative in this petition for review under Rule 45 of the Rules of Court, of the Decision1of the Court of Appeals 2 promulgated on May 31, 1993 and the subsequent Resolution denying the motion for reconsideration. The said Rulings dismissed the petition in CA-G.R. SP No. 25434 and in effect affirmed the "order"3 of the Regional Trial Court, Branch LXXI, Antipolo, Rizal 4 dated April 16, 1991 in LRC Case No. 91-924, the dispositive portion of which reads: WHEREFORE, premises considered, judgment is hereby rendered: (a) Declaring the owner's duplicate copy of Transfer Certificates of Title Nos. 140486, 15645 and 140485 which were lost, null and void and of no further force and effect and in lieu thereof, (b) Hereby orders and directs that new copy of the said titles be issued to the petitioner giving them the same faith and credit and carrying over the same terms and conditions appearing on the originals thereof, upon payment of the required fees. SO ORDERED. By Resolution of the First Division dated November 15, 1995, this case along with several others was transferred to THIRD DIVISION. After due consultation and deliberation, the Court assigned the undersigned ponente to write this Decision. The Facts On February 14, 1990, a "Petition for Judicial Reconstitution of the Lost Owner's Duplicate Certificates of TCT Nos. 140486; 156454 and 140485" 5 was filed in the Regional Trial Court, Branch LXXI, Antipolo, Rizal by petitioner-corporation, "represented by its Branch Manager, Wilson M. Gaw. . ." Attached to said petition was an "Affidavit of Loss" dated December 31, 1990 6 of respondent Orlando S. Bongat, one of the stockholders of petitioner-corporation. Finding the petition "to be sufficient in form and in substance," respondent Judge set the case for hearing on March 18, 1991. On April 16, 1991, respondent Judge issued the questioned order. Sometime in May, 1991, petitioner discovered that the original TCT Nos. N-140485, N-140486 and 156454 on file with the Register of Deeds of Rizal had been cancelled and, in lieu thereof, TCT Nos. 200100, 200101 and 200102 had been issued in the name of respondent Durawood Construction and Lumber Supply, Inc. Surprised by this cancellation, petitioner - after investigation - found out about the reconstitution proceeding in the respondent trial court. So, on July 17, 1991, petitioner filed7 suit in the Court of Appeals docketed as CA-G.R. 25434 praying for the annulment of the assailed order in LRC Case No. 91-924 penned by respondent Judge. It also prayed for the cancellation of the new certificates (TCT Nos. 200100, 200101 and 200102). On May 31, 1993, the respondent Court of Appeals rendered the assailed Decision and on August 30, 1993, the Resolution denying the motion for reconsideration. Hence, the present recourse to the Supreme Court. The Issues

Petitioner brought up the following ground as basis for its petition: The Court of Appeals gravely abused its authority in not declaring the order of respondent Judge Caballes in LRC Case No. 91-924 null and void for want of jurisdiction and in not declaring that the reconstitution of the owner's duplicate transfer certificates of title Nos. N-140486, N-140485 and 156454 was obtained through fraud. Petitioner argues that a reconstitution proceeding is one in rem and thus jurisdiction can be acquired only through publication and notice sent pursuant to Section 13, Republic Act No. 26. It also alleges that fraud is manifest (1) from the insufficient allegations of the petition filed before the trial court, as it (the petition) does not mention the names of adjoining land owners and interested persons, as well as (2) from the affidavit of loss attached to the petition. In their Comment, private respondents aver that in 1990, these three lots were sold by petitioner to Durawood Construction and Lumber Supply, Inc. but the sale in their favor could not be registered because "the certificates of title. . . were lost." They also allege that the applicable law is Section 109 of R.A. No. 496, as amended by P.D. 1529, and not Sec. 13 of R.A. No. 26, and that fraud, in order to serve as basis for the annulment of a judgment "must be extrinsic or collateral in character", which is not the case in the action before the court a quo. They also fault "(t)he deliberate failure of Dy Quim Pong (petitioner's board chairman) and his family, who constitute the majority of the stockholders and directors of (herein petitioner-corporation), to disclose the whereabouts (of) there (sic) son, the President and General Manager Francis Dytiongsee . . . " who allegedly executed the deed of sale of the lots and who allegedly claimed that the owner's copies of the TCTs were lost. In its Reply, petitioner contends that "the very procedure provided under Sec. 109, PD 1529, which they (private respondents) insist is the applicable provision of law in the matter, was not strictly followed . . ." It also argues that the owner's duplicate copies of the TCTs were all along in the custody of Dy Quim Pong, whom private respondents should have sued to compel him to surrender the same in order that the alleged deed or sale in favor of private respondent could be registered. Finally, petitioner claims that respondent Wilson Gaw had no authority to institute the petition for reconstitution in the trial court because "(t)he Court of Appeals itself, in its questioned resolution stated that said board resolution (authorizing Gaw) was passed without the required quorum." From the foregoing, the issues may be summed up as follows: (1) Which law governs the issuance of new owner's duplicate certificates of title in lieu of lost ones? (2) Did the respondent trial court have jurisdiction to order the issuance of the new owner's duplicate certificates? (3) Was the reconstitution of the said owner's duplicate certificates of title obtained through fraud? The First Issue: Law Governing Issuance of Lost Owner's Duplicate Titles To resolve this issue, it is necessary to reexamine the following provisions referred to by the parties: (1) Section 13, Republic Act No. 26:8 Sec. 13. The court shall cause a notice of the petition, filed under the preceding section, to be published, at the expense of the petitioner, twice in successive issues of the Official Gazette, and to be posted on the main entrance of the provincial building and of the municipal building of the municipality or city in which the land is situated, at least thirty days prior to the date of hearing. The court shall likewise cause a copy of the notice to be sent, by registered mail or otherwise, at the expense of the petitioner, to every person named therein whose address is known, at least thirty days prior to the date of hearing. Said notice shall state, among other things, the number of the lost or destroyed certificate of title, if known, the name of the registered owner, the names of the occupants or persons in possession of the property, the owners of the adjoining properties and all other interested parties, the location, area and boundaries of the property, and the date on which all persons having any interest therein must appear and file their claim or objections to the petition. The petitioner shall, at the hearing, submit proof of the publication, posting and service of the notice as directed by the court," (2) Section 109 P.D. 1529 (amending R.A. 496):

Sec. 109. Notice and replacement of lost duplicate certificate . In case of loss or theft of an owner's duplicate certificate of title, due notice under oath shall be sent by the owner or by someone in his behalf to the Register of Deeds of the province or city where the land lies as soon as the loss or theft is discovered. If a duplicate certificate is lost or destroyed, or cannot be produced by a person applying for the entry of a new certificate to him or for the registration of any instrument, a sworn statement of the fact of such loss or destruction may be filed by the registered owner or other person in interest and registered. Upon the petition of the registered owner or other person in interest, the court may, after notice and due hearing, direct the issuance of a new duplicate certificate, which shall contain a memorandum of the fact that it is issued in place of the lost duplicate certificate, but shall in all respects be entitled to like faith and credit as the original duplicate, and shall thereafter be regarded as such for all purposes of this decree. A reading of both provisions clearly shows that Section 109 of P.D. 1529 is the law applicable in petitions for issuance of new owner's duplicate certificates of title which are lost or stolen or destroyed. On the other hand, R.A. 26 applies only in cases of reconstitution of last or destroyed original certificates on file with the Register of Deeds. This is expressly provided for under Section 110 of P.D. 1529 as follows: Sec. 110. Reconstitution of lost or destroyed original of Torrens title . - Original copies of certificates of title lost or destroyed in the offices of Registers of Deeds as well as liens and encumbrances affecting the lands covered by such titles shall be reconstituted judicially in accordance with the procedure prescribed in Republic Act No . 26 insofar as not inconsistent with this Decree. The procedure relative to administrative reconstitution of lost or destroyed certificate prescribed in said Act may be availed of only in case of substantial loss or destruction of land titles due to fire, flood or other force majure as determined by the Administrator of the Land Registration Authority: Provided, That the number of certificates of titles lost or damaged should be at least ten percent (10%) of the total number in the possession of the Office of the Register of Deeds: Provided, further, That in no case shall the number of certificates of titles lost or damaged be less that five hundred (500). Notice of all hearings of the petition for judicial reconstitution shall be furnished the Register of Deeds of the place where the land is situated and to the Administrator of the Land Registration Authority. No order or judgment ordering the reconstitution of a certificate of title shall become final until the lapse of fifteen (15) days from receipt by the Register of Deeds and by the Administrator of the Land Registration Authority of a notice of such order or judgment without any appeal having been filed by any such officials." (As amended by R.A. 6732, emphasis supplied) The Second Issue: Jurisdiction In Demetriou vs. Court of Appeals, et al.9 this Court ruled: In Serra Serra v. Court of Appeals (195 SCRA 482 [1991]), on facts analogous to those involved in this case, this Court already held that if a certificate of title has not been lost but is in fact in the possession of another person, the reconstituted title is void and the court rendering the decision has not acquired jurisdiction. Consequently the decision may be attacked any time. In the instant case, the owner's duplicate certificates of title were in the possession of Dy Quim Pong, the petitioner's chairman of the board and whose family controls the petitioner-corporation. Since said certificates were not in fact "lost or destroyed", there was no necessity for the petition filed in the trial court for the "issuance of New Owner's Duplicate Certificates of Title: . . ." In fact, the said court never acquired jurisdiction to order the issuance of new certificates. Hence, the newly issued duplicates are themselves null and void. It is obvious that this lapse happened because private respondents and respondent judge failed to follow the procedure set forth in P.D. No. 1529 which, as already stated, governs the issuance of new owner's duplicate certificates of title. Section 109 of said law provides, inter alia, that "due notice under oath" of the loss or theft of the owner's duplicate "shall be sent by the owner as by someone in his behalf to the Register of Deeds . . ." (emphasis supplied). In this case, while an affidavit or loss was attached to the petition in the lower court, no such notice was sent to the Register of Deeds. Private respondents tried to convince the Court that by their failure to locate Francis Dytiongsee, they had no other recourse but to file a petition for reconstitution. Sec. 107 of P.D. 1529, however, states that the remedy, in case of the refusal or failure of the holder - in this case, the petitioner - to surrender the owner's duplicate certificate of title, is a "petition in court to compel surrender of the same to the Register of Deeds", and not a petition for reconstitution.

The Third Issue: Fraud The respondent Court of Appeals, in its own words, "confine(d) its discussion" 10 in the assailed Decision only to the ground of fraud. It ruled that the Rte's decision could be annulled only where extrinsic or collateral fraud is shown - that is, when the fraudulent acts prevented a party "from exhibiting fully his side of the case . . .". Hence, petitioner could not claim extrinsic fraud inasmuch as it was duly represented by Gaw in the reconstitution proceeding. The appellate court explained that while there may not have been a quorum during the board meeting of petitioner-corporation on May 10, 1984 when a resolution authorizing Gaw to sue on its behalf was allegedly passed, this did "not mean however, that New Durawood Co., Inc. cannot be bound by Gaw's action'' because "no howl of protest, complaint or denial came from (said corporation)", and that said corporation in fact had taken advantage of the benefits therefrom. Hence, petitioner is estopped from questioning Gawls acts. The appellate Court was of the belief that petitioner-corporation ratified Gaw's "authority" by acquiescence to his acts. The respondent Court thus concluded that petitioner-corporation's "claim of being a victim of extrinsic fraud is baseless." We are appalled by this rather novel interpretation of corporate law. It is clear that, there having been no quorum present during the meeting in question, the board of directors could not have validly given Gaw any express authority to file the petition. Upon the other hand, the doctrine of "apparent authority" cannot apply as to Gaw because, being a mere branch manager, he could not be looked upon as a corporate officer clothed with the implied or "apparent" power to file suit for and in behalf of a corporation 11. Neither will estoppel prevent the corporation from questioning Gaw's acts. Precisely, these acts were hidden from the company and its top officers. How then can estoppel attach? 12 Suffice it to say then, that by his surreptitious filing of the petition for reconstitution without authority - express or implied - of his employer, Gaw enabled respondent corporation to acquire the certificates of title in a manner contrary to law. In petitions for issuance of new owner's duplicate copies of Torrens titles, it is essential - as provided under Sec. 109 of P.D. 1529 as amended (supra) - that the trial court take steps to assure itself that the petitioner is the "registered owner or other person in interest". Otherwise, new owner's duplicate certificates might be issued in favor of impostors who could fraudulently dispose, hypothecate or otherwise deal in and with real estate in mockery of the Torrens system of titling properties. Be that as it may, in the case before us, whether Gaw was authorized to file the suit or not is of little significance in finally resolving this case. Jurisdiction is and remains the main issue. Since we already concluded earlier that the trial court did not have jurisdiction, necessarily its judgment must fall. WHEREFORE, the petition is GRANTED; the assailed decision SET ASIDE and REVERSED; the proceedings in LRC Case No. 91-924 ANNULLED; and the order issued therein dated April 15, 1991 as well as the reconstituted Transfer Certificates of Title issued pursuant thereto, namely, TCT Nos. 200100, 200101 and 200102 in the name of private respondent declared NULL and VOID. Costs against private respondents. SO ORDERED. Narvasa, C.J., Davide, Jr. Melo and Francisco and Francisco, JJ., concur.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 129471 April 28, 2000

DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS and CARLOS CAJES, respondents.

MENDOZA, J.: This is a petition for certiorari seeking to reverse the decision1 and resolution2 of the Court of Appeals dated August 30, 1996 and April 23, 1997, respectively, declaring private respondent Carlos Cajes the owner of 19.4 hectares of land embraced in TCT No. 10101 and ordering the segregation and reconveyance of said portion to him. The antecedent facts are as follows: The land in dispute, consisting of 19.4 hectares located in San Miguel, Province of Bohol, was originally owned by Ulpiano Mumar, whose ownership since 1917 was evidenced by Tax Declaration No. 3840. 3 In 1950,4 Mumar sold the land to private respondent who was issued Tax Declaration No. R-1475 that same year.5 The tax declaration was later superseded by Tax Declaration Nos. R-799 issued in 1961 6 and D-2247 issued in 1974.7 Private respondent occupied and cultivated the said land, 8 planting cassava and camote in certain portions of the land.9 In 1969, unknown to private respondent, Jose Alvarez succeeded in obtaining the registration of a parcel of land with an area of 1,512,468.00 square meters, 10 in his name for which he was issued OCT No. 546 on June 16, 1969. 11 The parcel of land included the 19.4 hectares occupied by private respondent. Alvarez never occupied nor introduced improvements on said land. 12 In 1972, Alvarez sold the land to the spouses Gaudencio and Rosario Beduya to whom TCT No. 10101 was issued. 13 That same year, the spouses Beduya obtained a loan from petitioner Development Bank of the Philippines for P526,000.00 and, as security, mortgaged the land covered by TCT No. 10101 to the bank. 14 In 1978, the SAAD Investment Corp., and the SAAD Agro-Industries, Inc., represented by Gaudencio Beduya, and the spouses Beduya personally executed another mortgage over the land in favor of petitioner to secure a loan of P1,430,000.00. 15 The spouses Beduya later failed to pay their loans, as a result of which, the mortgage on the property was foreclosed. 16 In the resulting foreclosure sale held on January 31, 1985, petitioner was the highest bidder. 17 As the spouses Beduya failed to redeem the property, petitioner consolidated its ownership. 18 It appears that private respondent had also applied for a loan from petitioner in 1978, offering his 19.4 hectare property under Tax Declaration No. D-2247 as security for the loan. As part of the processing of the application, a representative of petitioner, Patton R. Olano, inspected the land and appraised its value. Private respondent's loan application was later approved by petitioner. 19 However after releasing the amount of the loan to private respondent, petitioner found that the land mortgaged by private respondent was included in the land covered by TCT No. 10101 in the name of the spouses Beduya. Petitioner, therefore, cancelled the loan and demanded immediate payment of the amount. 20 Private respondent paid the loan to petitioner for which the former was issued a Cancellation of Mortgage, dated March 18, 1981, releasing the property in question from encumbrance. 21 Sometime in April of 1986, more than a year after the foreclosure sale, a re-appraisal of the property covered by TCT No. 10101 was conducted by petitioner's representatives. It was then discovered that private respondent was occupying a portion of said land. Private respondent was informed that petitioner had become the owner of the land he was occupying, and he was asked to vacate the property. As private respondent refused to do so, 22petitioner filed a complaint for recovery of possession with damages against him. The case was assigned to Branch 1 of the Regional Trial Court, Tagbilaran City, 23 which after trial, rendered a decision, dated August 22, 1989, declaring petitioner the lawful owner of the entire land covered by TCT No. 10101 on the ground that the decree of registration was binding upon the land. 24 The dispositive portion of the decision reads:

WHEREFORE, foregoing considered, the court renders judgment: 1 Declaring plaintiff bank Development Bank of the Philippines the true and legal owner of the land in question covered by TCT No. 10101 farm of Gaudencio Beduya; 2 Dismissing defendant's counterclaim; 3 Ordering defendant to vacate from the land in question; the portion of which he claims to belong to him for without basis in fact and law; 4 Ordering defendant, his agents or any person representing him or those who may claim substantial rights on the land to vacate therefrom, cease and desist from disturbing, molesting and interfering plaintiff's possession of the land in question, and from committing any such act as would tend to mitigate, deny or deprive plaintiff of its ownership and possession over said land. SO ORDERED. On appeal, the Court of Appeals reversed and gave judgment for private respondent, declaring him the owner of the 19.4 hectares of land erroneously included in TCT No. 10101. The dispositive portion of the appellate court's decision reads: WHEREFORE, the appealed decision is hereby REVERSED AND SET ASIDE. A new decision is hereby rendered: 1. Dismissing the complaint. 2. Declaring the disputed 19.4000 hectares of land embraced in TCT 10101 as exclusively belonging to defendant-appellant, ordering its segregation from plaintiff-appellee's title and its reconveyance to appellant. No pronouncement as to costs. SO ORDERED. 25 Petitioner moved for a reconsideration but its motion was denied in a resolution dated April 23, 1997. this petition. Petitioner contends that: I. THE DECISION OF THE RESPONDENT COURT IS NOT IN ACCORD WITH THE APPLICABLE PROVISIONS OF LAW (Sections 38 and 46 of ACT 496) AND THE APPLICABLE DECISIONS OF THE SUPREME COURT, PARTICULARLY IN THE CASE OF BENIN VS. TUASON, 57 SCRA 531. II. THE RESPONDENT COURT OVERLOOKED THE ISSUES ABOUT THE DBP BEING AN INNOCENT MORTGAGEE FOR VALUE OF THE LAND IN QUESTION AND OF HAVING PURCHASED LATER THE SAME DURING A PUBLIC AUCTION SALE. III. THE RESPONDENT COURT'S RULING DECLARING DBP IN ESTOPPEL IS ILLOGICAL. 27 First. Petitioner invokes the ruling of this Court in Benin v. Tuason 28 in support of its claim that its predecessorin-interest, Jose Alvarez, became the owner of the land by virtue of the decree of registration issued in his name. In Benin, three sets of plaintiffs filed separate complaints against Mariano Severo Tuason and J.M. Tuason & Co., Inc., praying for the cancellation of OCT No. 735 covering two parcels of land called the Sta. Mesa Estate, or Parcel 1, with an area of 8,798,617.00 square meters, and the Diliman Estate, or Parcel 2, with an area of 15,961,246.00 square meters. They asked that they be declared the owners and lawful possessors of said lands. Benin is distinguished from this case. In the first place, Benin involved vast tracts of lands which had already been subdivided and bought by innocent purchasers for value and in good faith at the time the claimants obtained registration. Secondly, when the claimants' ancestors occupied the lands in question and declared them for tax purposes in 1944, the lands were already covered by the tax declarations in the name of J. M. Tuason & Co., Inc. In 1914, OCT No. 735 was issued in the name of Tuason so that, from that time on, no possession could defeat the title of the registered owners of the land. Thirdly, the validity of OCT No. 735 had already been recognized by this Court in several cases 29 and, as a result thereof, the transfer certificates of title acquired by
26

Hence

10

the innocent purchasers for value were also declared valid. It was held that neither could the claimants file an action to annul these titles for not only had these actions prescribed, but the fact was that the claimants were also barred from doing so by laches, having filed the complaint only in 1955, or 41 years after the issuance of OCT No. 735 to J.M. Tuason & Co., Inc. Thus, it was not solely the decree of registration which was considered in resolving the Benin case. What was considered decisive was the valid title or right of ownership of J. M. Tuason & Co., Inc. and that of the other innocent purchasers for value and in good faith compared to the failure of the claimants to show their right to own or possess the questioned properties. 1wphi1.nt Petitioner maintains that the possession by private respondent and his predecessor-in-interest of the 19.4 hectares of land for more than 30 years cannot overcome the decree of registration issued in favor of its predecessor-in-interest Jose Alvarez. Petitioner quotes the following statement in the Benin case: It follows also that the allegation of prescriptive title in favor of plaintiffs does not suffice to establish a cause of action. If such prescription was completed before the registration of the land in favor of the Tuasons, the resulting prescriptive title was cut off and extinguished by the decree of registration. If, on the contrary, the prescription was either begun or completed after the decree of registration, it conferred no title because, by express provision of law, prescription can not operate against the registered owner (Act 496). 30 Petitioner would thus insist that, by virtue of the decree of registration, Jose Alvarez and those claiming title from him (i.e., the spouses Beduya) acquired ownership of the 19.4 hectares of land, despite the fact that they neither possessed nor occupied these lands. This view is mistaken. A consideration of the cases shows that a decree of registration cut off or extinguished a right acquired by a person when such right refers to a lien or encumbrance on the land not to the right of ownership thereof which was not annotated on the certificate of title issued thereon. Thus, Act No. 496 provides: Sec. 39. Every person receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered land who takes a certificate of title for value in good faith shall hold the same free of all encumbrances except those noted on said certificate, and any of the following encumbrances which may be subsisting, namely: First. Liens, claims, or rights arising or existing under the laws of Constitution of the United States or of the Philippine Islands which the statutes of the Philippine Islands cannot require to appear of record in the Registry. Second. Taxes within two years after the same became due and payable. Third. Any public highway, way, private way established by law, or any Government irrigation canal or lateral thereof, where the certificate of title does not state that the boundaries of such highway, way, or irrigation canal or lateral thereof, have been determined. But if there are easements or other rights appurtenant to a parcel of registered land which for any reason have failed to be registered, such easements or rights shall remain so appurtenant notwithstanding such failure, and shall be held to pass with the land until cut off or extinguished by the registration of the servient estate, or in any other manner. Hence, in Cid v. Javier, 31 it was held: . . . Consequently, even conceding arguendo that such an easement has been acquired, it had been cut off and extinguished by the registration of the servient estate under the Torrens system without the easement being annotated on the corresponding certificate of title, pursuant to Section 39 of the Land Registration Act. This principle was reiterated in Purugganan v. Paredes 32 which also involved an easement of light and view that was not annotated on the certificate of title of the servient estate. But to make this principle applicable to a situation wherein title acquired by a person through acquisitive prescription would be considered cut off and extinguished by a decree of registration would run counter to established jurisprudence before and after the ruling in Benin. Indeed, registration has never been a mode of acquiring ownership over immovable property. As early as 1911, in the case of City of Manila v. Lack, 33 the Court already ruled on the purpose of registration of lands, viz.:

11

The Court of Land Registration was created for a single purpose. The Act is entitled "An Act to provide for the adjudication and registration of titles to lands in the Philippine Islands." The sole purpose of the Legislature in its creation was to bring the land titles of the Philippine Islands under one comprehensive and harmonious system, the cardinal features of which are indefeasibility of title and the intervention of the State as a prerequisite to the creation and transfer of titles and interest, with the resultant increase in the use of land as a business asset by reason of the greater certainty and security of title. It does not create a title nor vest one. It simply confirms a title already created and already vested, rendering it forever indefeasible. . . Again, in the case of Angeles v. Samia 34 where land was erroneously registered in favor of persons who neither possessed nor occupied the same, to the prejudice of the actual occupant, the Court held: . . . The purpose of the Land Registration Act, as this court has had occasion to so state more than once, is not to create or vest title, but to confirm and register title already created and already vested, and of course, said original certificate of title No. 8995 could not have vested in the defendant more title than what was rightfully due her and her coowners. It appearing that said certificate granted her much more than she expected, naturally to the prejudice of another, it is but just that the error, which gave rise to said anomaly, be corrected (City of Manila vs. Lack, 19 Phil., 324). The defendant and her coowners knew or, at least, came to know that it was through error that the original certificate of title in question was issued by the court which heard cadastral case No. 11 of Bacolor, not only in or prior to March, 1933, but from the time said certificate was issued in their favor, that is, from December 15, 1921. This is evidenced by the fact that, ever since, they remained passive without even attempting to make the least showing of ownership over the land in question until after the lapse of more than eleven years. The Land Registration Act as well as the Cadastral Act protects only the holders of a title in good faith and does not permit its provisions to be used as a shield for the commission of fraud, or that one should enrich himself at the expense of another (Gustilo vs. Maravilla, 48 Phil., 442; Angelo vs. Director of Lands, 49 Phil., 838). The above-stated Acts do not give anybody, who resorts to the provisions thereof, a better title than he really and lawfully has. If he happened to obtain it by mistake or to secure, to the prejudice of his neighbor, more land than he really owns, with or without bad faith on his part, the certificate of title, which may have been issued to him under the circumstances, may and should be cancelled or corrected (Legarda and Prieto vs. Saleeby, 31 Phil., 590). This is permitted by section 112 of Act No. 496, which is applicable to the Cadastral Act because it is so provided expressly by the provisions of section 11 of the latter Act. It cannot be otherwise because, as stated in the case of Domingo vs. Santos, Ongsiako, Lim y Cia. (55 Phil., 361), errors in the plans of lands sought to be registered in the registry and reproduced in the certificate of title issued later, do not annul the decree of registration on the ground that it is not the plan but the land itself which is registered in the registry. In other words, if the plan of an applicant for registration or claimant in a cadastral case alleges that the land referred to in said plan is 100 or 1,000 hectares, and the land which he really owns and desires to register in the registry is only 80 ares, he cannot claim to be the owner of the existing difference if afterwards he is issued a certificate of title granting him said area of 100 or 1,000 hectares. 35 The principle laid down in this 1938 case remains the prevailing doctrine, its latest application being in the case ofReyes v. Court of Appeals 36 wherein we ruled that the fact that a party was able to secure a title in his favor did not operate to vest ownership upon her of the property. In the present case, private respondent has been in actual, open, peaceful and continuous possession of the property since 1950. This fact was corroborated by the testimony of Eleuterio Cambangay who personally knew that Ulpiano Mumar transferred the land covered by Tax Declaration No. 3840 37 in favor of private respondent in 1950. 38 Private respondent's claim based on actual occupation of the land is bolstered by Tax Declaration Nos. R-1475, R-799 and D-2247 39 which were issued in his name in 1950, 1961 and 1974, respectively. Together with his actual possession of the land, these tax declarations constitute strong evidence of ownership of the land occupied by him. As we said in the case of Republic vs. Court of Appeals: 40 Although tax declarations or realty tax payments of property are not conclusive evidence of ownership, nevertheless, they are good indicia of possession in the concept of owner for no one in his right mind would be paying taxes for a property that is not in his actual or at least constructive possession. They constitute at least proof that the holder has a claim of title over the property. The voluntary declaration of a piece of property for taxation purposes manifests not only one's sincere and honest desire to obtain title to the property and announces his adverse claim against the State and all other interested parties, but also the intention to contribute needed revenues to the Government. Such an act strengthens one's bona fide claim of acquisition of ownership. More importantly, it was established that private respondent, having been in possession of the land since 1950, was the owner of the property when it was registered by Jose Alvarez in 1969, his possession tacked to that of his predecessor-in-interest, Ulpiano Mumar, which dates back to 1917. 41 Clearly, more than 30 years had elapsed before a decree of registration was issued in favor of Jose Alvarez. This uninterrupted adverse possession of the land for more than 30 years could only ripen into ownership of the land through acquisitive

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prescription which is a mode of acquiring ownership and other real rights over immovable property. Prescription requires public, peaceful, uninterrupted and adverse possession of the property in the concept of an owner for ten (10) years, in case the possession is in good faith and with a just title. Such prescription is called ordinary prescription, as distinguished from extraordinary prescription which requires possession for 30 years in case possession is without just title or is not in good faith. 42 In contrast to private respondent, it has been shown that neither Jose Alvarez nor the spouses Beduya were at any time in possession of the property in question. In fact, despite knowledge by Gaudencio Beduya that private respondent occupied this 19.4 hectares included in the area covered by TCT No. 10101, 43 he never instituted any action to eject or recover possession from the latter. Hence, it can be concluded that neither Jose Alvarez nor the spouses Beduya ever exercised any right of ownership over the land. The fact of registration in their favor never vested in them the ownership of the land in dispute. "If a person obtains a title under the Torrens system, which includes by mistake or oversight land which can no longer be registered under the system, he does not, by virtue of the said certificate alone, become the owner of the lands illegally included." 44 Considering the circumstances pertaining in this case, therefore, we hold that ownership of the 19.4 hectares of land presently occupied by private respondent was already vested in him and that its inclusion in OCT No. 546 and, subsequently, in TCT No. 10101, was erroneous. Accordingly, the land in question must be reconveyed in favor of private respondent, the true and actual owner thereof, reconveyance being clearly the proper remedy in this case. The true owner may bring an action to have the ownership or title to the land judicially settled and the Court in the exercise of its equity jurisdiction, without ordering the cancellation of the Torrens title issued upon the patent, may direct the defendants, the registered owner to reconvey the parcel of land to the plaintiff who has been found to be the true owner thereof." (Vital vs. Amore, 90 Phil. 955) "The reconveyance is just and proper in order to terminate the intolerable anomaly that the patentees should have a torrens title for the land which they and their predecessors never possessed which has been possessed by Novo in the concept of owner." (Bustarga v. Novo, 129 SCRA 125). 45 Second. Generally, an action for reconveyance based on an implied or constructive trust, such as the instant case, prescribes in 10 years from the date of issuance of decree of registration. 46 However, this rule does not apply when the plaintiff is in actual possession of the land. Thus, it has been held: . . . [A]n action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years, the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title over the property, but this rule applies only when the plaintiff or the person enforcing the trust is not in possession of the property, since if a person claiming to be the owner thereof is in actual possession of the property, as the defendants are in the instant case, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. The reason for this is that one who is in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in possession. 47 Having been the sole occupant of the land in question, private respondent may seek reconveyance of his property despite the lapse of more than 10 years. Nor is there any obstacle to the determination of the validity of TCT No. 10101. It is true that the indefeasibility of torrens titles cannot be collaterally attacked. In the instant case, the original complaint is for recovery of possession filed by petitioner against private respondent, not an original action filed by the latter to question the validity of TCT No. 10101 on which petitioner bases its right. To rule on the issue of validity in a case for recovery of possession is tantamount to a collateral attack. However, it should not be overlooked that private respondent filed a counterclaim against petitioner, claiming ownership over the land and seeking damages. Hence, we could rule on the question of the validity of TCT No. 10101 for the counterclaim can be considered a direct attack on the same. "A counterclaim is considered a complaint, only this time, it is the original defendant who becomes the plaintiff. . . . It stands on the same footing and is to be tested by the same rules as if it were an independent action." 48 In an analogous case, 49 we ruled on the validity of a certificate of title despite the fact that the original action instituted before the lower court was a case for recovery of possession. The Court reasoned that since all the facts of the case are before it, to direct the party to institute cancellation proceedings would be needlessly circuitous and would unnecessarily delay the termination of the controversy which has already dragged on for 20 years. Third. Petitioner nonetheless contends that an action for reconveyance does not lie against it, because it is an innocent purchaser for value in the foreclosure sale held in 1985.

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This contention has no merit. Sec. 38 of Act No. 496, the Land Registration Act, provides: If the court after hearing finds that the applicant or adverse claimant has title as stated in his application or adverse claim and proper for registration, a decree of confirmation and registration shall be entered. Every decree of registration shall bind the land, and quiet title thereto, subject only to the exceptions stated in the following section. It shall be conclusive upon and against all persons, including the Insular Government and all the branches thereof, whether mentioned by name in the application, notice, or citation, or included in the general description "To all whom it may concern." Such decree shall not be opened by reason of the absence, infancy, or other disability of any person affected thereby, nor by any proceeding in any court for reversing judgments or decrees; subject, however, to the right of any person deprived of land or of any estate or interest therein by decree of registration obtained by fraud to file in the competent Court of First Instance a petition for review within one year after entry of the decree, provided no innocent purchaser for value has acquired an interest. Upon the expiration of said term of one year, every decree or certificate of title issued in accordance with this section shall be incontrovertible. If there is any such purchaser, the decree of registration shall not be opened, but shall remain in full force and effect forever, subject only to the right of appeal hereinbefore provided: Provided, however, That no decree or certificate of title issued to persons not parties to the appeal shall be cancelled or annulled. But any person aggrieved by such decree in any case may pursue his remedy by action for damages against the applicant or any other person for fraud in procuring the decree. Whenever the phrase "innocent purchaser for value" or an equivalent phrase occurs in this Act, it shall be deemed to include an innocent lessee, mortgagee, or other encumbrancer for value. (As amended by Sec. 3, Act 3621; and Sec. 1, Act No. 3630.) Succinctly put, 38 provides that a certificate of title is conclusive and binding upon the whole world. Consequently, a buyer need not look behind the certificate of title in order to determine who is the actual owner of the land. However, this is subject to the right of a person deprived of land through fraud to bring an action for reconveyance, provided that it does not prejudice the rights of an innocent purchaser for value and in good faith. "It is a condition sine qua non for an action for reconveyance to prosper that the property should not have passed to the hands of an innocent purchaser for value." 50 The same rule applies to mortgagees, like petitioner. Thus, we held: Where the certificate of title is in the name of the mortgagor when the land is mortgaged, the innocent mortgagee for value has the right to rely on what appears on the certificate of title. In the absence of anything to excite suspicion, said mortgagee is under no obligation to look beyond the certificate and investigate the title of the mortgagor appearing on the face of said certificate. Although Article 2085 of the Civil Code provides that absolute ownership of the mortgaged property by the mortgagor is essential, the subsequent declaration of a title as null and void is not a ground for nullifying the mortgage right of a mortgagee in good faith.51 The evidence before us, however, indicates that petitioner is not a mortgagee in good faith. To be sure, an innocent mortgagee is not expected to conduct an exhaustive investigation on the history of the mortgagor's title. Nonetheless, especially in the case of a banking institution, a mortgagee must exercise due diligence before entering into said contract. Judicial notice is taken of the standard practice for banks, before approving a loan, to send representatives to the premises of the land offered as collateral and to investigate who are the real owners thereof. Banks, their business being impressed with public interest, are expected to exercise more care and prudence than private individuals in their dealings, even those involving registered lands. 52 In this case, petitioner's representative, Patton R. Olano, admitted that he came to know of the property for the first time in 1979 when he inspected it to determine whether the portion occupied by private respondent and mortgaged by the latter to petitioner was included in TCT No. 10101. This means that when the land was mortgaged by the spouses Beduya in 1972, no investigation had been made by petitioner. It is clear, therefore, that petitioner failed to exercise due care and diligence in establishing the condition of the land as regards its actual owners and possessors before it entered into the mortgage contract in 1972 with the Beduyas. Had it done so, it would not have failed to discover that private respondent was occupying the disputed portion of 19.4 hectares. For this reason, petitioner cannot be considered an innocent purchaser for value when it bought the land covered by TCT No. 10101 in 1985 at the foreclosure sale. Indeed, two circumstances negate petitioner's claim that it was an innocent purchaser for value when it bought the land in question, including the portion occupied by private respondent: (1) petitioner was already informed by Gaudencio Beduya that private respondent occupied a portion of the property covered by TCT No. 10101; and (2) petitioner's representative conducted an investigation of the property in 1979 to ascertain whether the land mortgaged by private respondent was included in TCT No. 10101. In other words, petitioner was already aware that a person other than the registered owner was in actual possession of the land when it bought the same at the foreclosure sale. A person who deliberately ignores a significant fact which would create suspicion in an otherwise reasonable man is not an innocent purchaser for value. "It is a well-settled rule that a purchaser cannot close his eyes to facts which should put a reasonable man upon his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor." 53

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Petitioner deliberately disregarded both the fact that private respondent already occupied the property and that he was claiming ownership over the same. It cannot feign ignorance of private respondent's claim to the land since the latter mortgaged the same land to petitioner as security for the loan he contracted in 1978 on the strength of the tax declarations issued under his name. Instead of inquiring into private respondent's occupation over the land, petitioner simply proceeded with the foreclosure sale, pretending that no doubts surround the ownership of the land covered by TCT No. 10101. Considering these circumstances, petitioner cannot be deemed an innocent mortgagee/purchaser for value. As we ruled: The failure of appellees to take the ordinary precautions which a prudent man would have taken under the circumstances, specially in buying a piece of land in the actual, visible and public possession of another person, other than the vendor, constitutes gross negligence amounting to bad faith. In this connection, it has been held that where, as in this case, the land sold is in the possession of a person other than the vendor, the purchaser is required to go beyond the certificates of title and ma[k]e inquiries concerning the rights of the actual possessor. (Citations omitted.) xxx xxx xxx

One who purchases real property which is in the actual possession of another should, at least, make some inquiry concerning the right of those in possession. The actual possession by other than the vendor should, at least put the purchaser upon inquiry. He can scarcely, in the absence of such inquiry, be regarded as abona fide purchaser as against such possessors. 54 Fourth. From the foregoing, we find that the resolution of the issue of estoppel will not affect the outcome of this case. Petitioner claims that the fact that it approved a loan in favor of private respondent and executed a mortgage contract covering the 19.4 hectares covered by tax declarations issued under private respondent's name does not mean that it is estopped from questioning the latter's title. Petitioner accuses private respondent of having made misrepresentations which led it to believe in his valid title and ownership. The claim has no basis. Private respondent made no misrepresentation with regard to the land occupied by him as he is actually the real owner thereof. Moreover, when private respondent entered into a mortgage contract with petitioner, his claim of ownership was supported not only by the tax declarations but also by a certification of the Clerk of Court of the Court of First Instance of Bohol that no civil, land registration or cadastral case has been filed or instituted before the court affecting the validity of Tax Declaration No. D-2247 covering the land located in Bugang, San Miguel, Bohol and declared in the name of Carlos Cajes. 55 These documents were relied upon by private respondent in support of his claim of ownership. We cannot consider the submission of these documents as misrepresentations by private respondent as to the actual ownership of the land. Rather, private respondent believed in good faith and with good reason that he was the owner of the 19.4 hectares occupied by him. As to the question of estoppel, we do not find petitioner to be estopped from questioning private respondent's title.1wphi1 "Estoppel in pais arises when one, by his acts, representations or admission, or by his own silence when he ought to speak out, intentionally or through culpable negligence, induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts." 56 In the case at bar, upon learning that the land occupied by private respondent was also covered by TCT No. 10101, petitioner immediately demanded full payment of the loan and thereafter cancelled the mortgage contract, a fact that is admitted by private respondent himself. 57 Indeed, nothing in record indicates that petitioner impliedly acquiesced to the validity of private respondent's title when it found out that the latter was occupying a portion of the land covered by TCT No. 10101.1wphi1.nt However, for reasons aforestated, we uphold private respondent's ownership of 19.4 hectares occupied by him. As a necessary consequence thereof, such portion of land included in TCT No. 10101 must be segregated and reconveyed in his favor. WHEREFORE, the decision of the Court of Appeals is AFFIRMED in toto. SO ORDERED.

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Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 139518 March 6, 2001

EVANGELINE L. PUZON, petitioner, vs. STA. LUCIA REALTY AND DEVELOPMENT, INC., respondent. PANGANIBAN, J.: Are notices to owners of adjoining lots and actual occupants of the subject property mandatory and jurisdictional in petitions for judicial reconstitution of destroyed original certificates of title, when the source for such reconstitution is the extant owner's duplicate transfer certificate of title? More specifically, is the failure to send those notices fatal to a trial court's final and executory decision granting the reconstitution? In other words, may the decision be annulled on the ground of lack of jurisdiction? The short answer to all of these questions is "No." The Case Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the April 30, 1999 Decision1 of the Court of Appeals (CA), as well as its July 21, 1999 Resolution 2 denying petitioner's Motion for Reconsideration. The dispositive part of the Decision reads: "WHEREFORE, the petition is granted. The decision dated February 11, 1994 in LRC Case No. Q-6436 (93) of RTC, Br. 80, Quezon City is hereby ANNULLED and SET ASIDE. TCT Nos. RT-78673 (240131) and RT78672 (213611) reconstituted in the name of private respondent Evangeline L. Puzon are declared cancelled and null and void for being in violation [of] Republic Act No. 26, Supreme Court Administrative Circular No. 7-96 and Land Registration Authority circulars. SO ORDERED." The Facts On June 11, 1988, a fire in the office of the Register of Deeds of Quezon City destroyed, among others, the original copies of petitioner's Transfer Certificate of Title (TCT) Nos. 240131 and 213611 issued by the Register of Deeds of Quezon City, covering two lots with areas of 109,038 and 66,836 square meters respectively, both located in the District of Capitol, Quezon City. In October 1993, petitioner filed before the Regional Trial Court (RTC) of Quezon City, Branch 80, a Petition for the judicial reconstitution of the two destroyed titles. The Petition, docketed as LRC Rec. No. Q-6436 (93), was based on the owner's duplicate copies of the TCTs, which were in petitioner's possession. The October 26, 1993 RTC Order, which served as the notice for the hearing of the Petition for reconstitution, was published in two (2) successive issues of the Official Gazette. Thirty days before the date of hearing, the Order was also posted at the entrance of the Quezon City Hall Building and on the bulletin board of the trial court. Together with a copy of the Petition, it was served on the Office of the Solicitor General, the Register of Deeds for Quezon City, the Land Registration Authority (LRA), the Land Management Bureau, and the Office of the City Prosecutor for Quezon City. During the trial which commenced on January 17, 1994, no opposition was registered. A representative from the Office of the Solicitor General, however, appeared and cross-examined petitioner, who was the sole witness. After trial, the RTC rendered its Decision dated February 11, 1994. The court disposed as follows: "WHEREFORE, the Court hereby GRANTS the petition. Accordingly, the Register of Deeds of Quezon City is ordered to reconstitute the original copies of TCT Nos. 213611 and 240131 from and on the basis of the owner's duplicate copies thereof in possession of petitioner Evangeline L. Puzon, after payment of the prescribed legal fees."3 Accordingly, the Register of Deeds of Quezon City issued to herein petitioner TCT Nos. RT-78673 (240131) and RT-78672 (213611). These TCTs were for the lots covered by the destroyed certificates, whose numbers are indicated in the parentheses.

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After discovering in 1996 that Sta. Lucia Realty and Development, Inc., herein respondent, was occupying a portion of the land covered by TCT No. RT-78673 (240131), petitioner filed against it and Garsons Co. Inc. a Complaint for Accion Reinvindicatoria with Damages and Prayer for the Issuance of Temporary Restraining Order/Writ of Injunction. On March 25, 1998, while the accion reinvindicatoria was still pending before the RTC of Quezon City (Branch 104), respondent filed before the CA a Petition for Annulment of Judgment, seeking to annul and set aside the earlier Decision of the RTC of Quezon City (Branch 80) in the reconstitution case. Ruling of the Court of Appeals Annulling the Decision of the RTC (Branch 80), the CA held that petitioner had failed to comply with the requirements of Section 13, Republic Act No. 26. Citing Republic v. Marasigan,4 it ruled that notices to adjoining owners and actual occupants of the land were mandatory and jurisdictional in an action for the judicial reconstitution of a certificate of title. It also opined that the RTC Decision had been rendered without requiring a clearance from the LRA. Finally, it referred to earlier findings of the land registration commissioner that petitioner's TCT No. RT-78672 (213611) was fake. Hence, this Petition.5 The Issues Petitioner raises the following issues for the consideration of this Court: "1. The Honorable Court of Appeals grossly erred in applying the provisions of Section 13 of R.A. No. 26, which is applicable only in relation to Section 12 of R.A. No. 26. Notices to adjoining owners and actual occupants of the land are not mandatory and jurisdictional in reconstitution of titles based on the owner's duplicate copy. "2. The Court of Appeals grossly erred in holding that 'clearance from the land registration authority' is a jurisdictional requirement. "3. The Court of Appeals grossly erred in holding that petitioner's TCT No. RT-87672 (213611) covering lot 119 is fake and spurious."6 The Court's Ruling The Petition is meritorious. First Issue: Notice Requirement Respondent and the CA contend that notices to owners of adjoining lots are mandatory in the judicial reconstitution of a title. They cite as authority Section 13 of Republic Act No. 26, 7 which we reproduce hereunder: "SEC. 13. The Court shall cause a notice of the petition, filed under the preceding section, to be published at the expense of the petitioner, twice in successive issues of the Official Gazette, and to be posted on the main entrance of the provincial building and of the municipal building of the municipality or city in which the land is situated, at least thirty days prior to the date of hearing. The court shall likewise cause a copy of the notice to be sent, by registered mail or otherwise, at the expense of the petitioner, to every person named therein whose address is known, at least thirty days prior to the date of hearing. Said notice shall state, among other things, the number of the lost or destroyed certificate of title, if known, the name of the registered owner, the names of the occupants or persons in possession of the property, the owners of the adjoining properties and all other interested parties, the location, area and boundaries of the property, and the date on which all persons having any interest therein must appear and file their claim or objections to the petition. The petitioner shall, at the hearing, submit proof of the publication, posting and service of the notice as directed by the court." The clear language of the law militates against the interpretation of respondent and the appellate court. The first sentence of Section 13 provides that the requirements therein pertain only to petitions for reconstitution filed under "the preceding section," Section 12, which in turn governs those petitions based on specified sources. We quote Section 12 below: "SEC. 12. Petition for reconstitution from sources enumerated in Section 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e), and/or 3(f) of this Act, shall be filed with the proper Court of First Instance, by the registered

17

owner, his assigns, or any person having an interest in the property. The petition shall state or contain, among other things, the following: (a) that the owner's duplicate of the certificate of title had been lost or destroyed; (b) that no co-owner's, mortgagee's or lessee's duplicate had been issued, or, if any had been issued, the same had been lost or destroyed; (c) the location area and boundaries of the property; (d) the nature and description of the buildings or improvements, if any, which do not belong to the owner of the land, and the names and addresses of the owners of such buildings or improvements; (e) the name and addresses of the occupants or persons in possession of the property, of the owners of the adjoining properties and of all persons who may have interest in the property; and (g) a statement that no deeds or other instruments affecting the property have been presented for registration, or, if there be any, the registration thereof has not been accomplished, as yet. All the documents, or authenticated copies thereof, to be introduced in evidence in support to the petition for reconstitution shall be attached thereto and filed with the same: Provided, That in case the reconstitution is to be made exclusively from sources enumerated in Section 2(f) or 3(f) of this Act, the petition shall be further accompanied with a plan and technical description of the property duly approved by the Commissioner of Land Registration, or with a certified copy of the description taken from a prior certificate of title covering the same property." In other words, the requirements under Sections 12 and 13 do not apply to all petitions for judicial reconstitution, but only to those based on any of the sources specified in Section 12; that is, "sources enumerated in Section 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e), and/or 3(f) of this Act." Sections 2 and 3 of RA 26 provide as follows: "SEC. 2. Original certificates of title shall be reconstituted from such of the sources hereunder enumerated as may be available, in the following order: (a) The owner's duplicate of the certificate of title; (b) The co-owner's, mortgagee's, or lessee's duplicate of the certificate of title; (c) A certified copy of the certificate of title, previously issued by the register of deeds or by a legal custodian thereof; (d) An authenticated copy of the decree of registration or patent, as the case may be, pursuant to which the original certificate of title was issued; (e) A document, on file in the registry of deeds, by which the property, the description of which is given in said document, is mortgaged, leased or encumbered, or an authenticated copy of said document showing that its original had been registered; and (f) Any other document which, in the judgment of the court, is sufficient and proper basis for reconstituting the lost or destroyed certificate of title. "SEC. 3. Transfer certificates of title shall be reconstituted from such of the sources hereunder enumerated as may be available, in the following order: (a) The owner's duplicate of the certificate of title; (b) The co-owner's, mortgagee's or lessee's duplicate of the certificate of title; (c) A certified copy of the certificate of title, previously issued by the register of deeds or by a legal custodian thereof; (d) The deed of transfer or other document on file in the registry of deeds, containing the description of the property, or an authenticated copy thereof, showing that its original had been registered, and pursuant to which the lost or destroyed transfer certificate of title was issued; (e) A document, on file in the registry of deeds, by which the property the description of which is given in said documents, is mortgaged, leased or encumbered, or an authenticated copy of said document showing that its original had been registered; and (f) Any other documents which, in the judgment of the court, is sufficient and proper basis for reconstituting the lost or destroyed certificate of title." (italics supplied)

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In the present case, the source of the Petition for the reconstitution of title was petitioner's duplicate copies of the two TCTs mentioned in Section 3(a). Clearly, the Petition is governed, not by Sections 12 and 13, but by Section 10 of RA 26. We quote said Section 10 in full: "SEC. 10. Nothing hereinabove provided shall prevent any registered owner or person in interest from filing the petition mentioned in Section Five of this Act directly with the proper Court of First Instance, based on sources enumerated in Section 2(a), 2(b), 3(a), 3(b), and/or 4(a) of this Act : Provided, however, That the Court shall cause a notice of the petition, before hearing and granting the same, to be published in the manner stated in Section Nine 8 hereof: And provided, further, That certificates of title reconstituted pursuant to this section shall not be subject to the encumbrance referred to in Section Seven of this Act." Nothing in this provision requires that notices be sent to owners of adjoining lots. Verily, that requirement is found in Section 13, which does not apply to petitions based on an existing owner's duplicate TCT. Put differently, Sections 9 and 10 of RA 26 require that 30 days before the date of hearing, (1) a notice be published in two successive issues of the Official Gazette at the expense of the petitioner, and (2) such notice be posted at the main entrances of the provincial building and of the municipal hall where the property is located. The notice shall state the following: (1) the number of the certificate of title, (2) the name of the registered owner, (3) the names of the interested parties appearing in the reconstituted certificate of title, (4) the location of the property, and (5) the date on which all persons having an interest in the property, must appear and file such claims as they may have. For petitions based on sources enumerated in Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e) and 3(f), Section 13 adds another requirement: that the notice be mailed to occupants, owners of adjoining lots, and all other persons who may have an interest in the property. To repeat, mailing the notice is not required for a petition based on Sections 2(a), 2(b), 3(a), 3(b) and 4(a), as in the present case. In this light, the cases cited by respondent -- particularly Republic v. Marasigan,9 Manila Railroad Co. vs. Moya10and Director of Lands v. Court of Appeals 11-- are not applicable, because they all involve judicial reconstitution under Sections 12 and 13 of RA 26. There is no question that in such actions, notices to adjoining owners and to the actual occupants of the land are mandatory and jurisdictional. But in petitions for reconstitution falling under Sections 9 and 10 of RA 26 where, as in the present case, the source is the owner's duplicate copy, notices to adjoining owners and to actual occupants of the land are not required. When the law is clear, the mandate of the courts is simply to apply it, not to interpret or to speculate on it. In sum, RA 26 separates petitions for reconstitution of lost or destroyed certificates of title into two main groups with two different requirements and procedures. Sources enumerated in Sections 2(a), 2(b), 3(a), 3(b), and 4(a) of RA 26 are lumped under one group (Group A); and sources enumerated in Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e), and 3(f) are placed together under another group (Group B). For Group A, the requirements for judicial reconstitution are set forth in Section 10 in relation to Section 9 of RA 26; while for Group B, the requirements are in Sections 12 and 13 of the same law. In the present case, the source of the reconstitution of petitioner's TCT is the extant owner's copy, which falls under Section 3(a). It follows that the applicable provision of law is Section 10 in relation to Section 9 of RA 26, not Sections 12 and 13. When the reconstitution is based on an extant owner's duplicate TCT, the main concern is the authenticity and genuineness of the Certificate, which could best be determined or contested by the government agencies or offices concerned, principally the Office of the Solicitor General. The adjoining owners or actual occupants of the property covered by the TCT are hardly in a position to determine the genuineness of the Certificate. Giving them notice and inviting them to participate in the reconstitution proceeding is not only illogical, but constitutes a useless effort to clog the dockets of courts. Let it also be remembered that the TCT holder in this case had no fault at all in the destruction of the original Certificate in the office of the Register of Deeds. Hence, she should not be burdened with meaningless formalities in the prosecution of her property rights, including the reconstitution of her original TCT. Moreover, the interests of creditors, whose liens may have been registered in the original Certificate on file with the Register of Deeds but not annotated in the owner's copy, are addressed by the publication requirement. However, even in this instance, the notification of adjoining owners is hardly necessary. Finally, the parties must not lose sight of the nature of judicial reconstitution proceedings, which denote a "restoration of the instrument which is supposed to have been lost or destroyed in its original form and condition. The purpose of the reconstitution of title or any document is to have the same reproduced, after proper proceedings in the same form they were when the loss or destruction occurred." 12 We emphasize that these actions do "not pass upon the ownership of the land covered by the lost or destroyed title. Possession of a

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lost certificate of title is not necessarily equivalent to ownership of the land covered by it. The certificate of title, by itself, does not vest ownership; it is merely an evidence of title over a particular property." 13 Second Issue: Pertinent Circulars Petitioner also contends that the Court of Appeals erred in holding that an LRC clearance is a jurisdictional requirement. We agree. None of the circulars mentioned in Supreme Court Administrative Circular No. 7-96 ("Circular 7-96") requires any clearance from the Land Registration Authority for the judicial reconstitution of certificates of title under Section 10 of RA 26. NALTDRA Circular No. 91 ("Circular 91"), which is mentioned in Circular 7-96 and has the word "clearance" in its heading, deals with the subject of original land registration cases, not reconstitution of titles. Thus, Circular 91 is not applicable to this case. Even LRC Circular No. 35, which is also mentioned in Circular 7-96, does not require any clearance. Rather, it requires the Chief of the Clerks of Court Division to make a report, and likewise the Register of Deeds to write a report of his or her findings after verifying the status of the title, which is the subject of the reconstitution. Both reports are to be submitted to the reconstitution court on or before the date of the initial hearing. 14 It is not mandatory, however, for the reconstitution court to wait for such reports indefinitely. If none is forthcoming on or before the date of the initial hearing, it may validly issue an order or judgment granting reconstitution. This is implied from the provisions of Section 16 of the same Circular, which states: "16. Should an order or judgment granting reconstitution be issued by the Court without awaiting the report and the recommendations of this Commission as well as the verification of the Register of Deeds concerned, or while the examination, verification and preparation of the report and recommendation are still pending in the said Offices due to the failure of the Clerk of Court or the petitioner to comply with all the necessary requirements as called for herein, and it appears that there is a valid ground to oppose the reconstitution, a motion to set aside the order/judgment granting reconstitution or to stay the period of finality of said order/judgment shall be filed by the Land Registration Commissioner and/or the Register of Deeds thru the Solicitor General or the provincial or city fiscal concerned." In the present case, therefore, neither was the Petition for reconstitution affected nor was the RTC divested of its jurisdiction by the fact that the trial court rendered the judgment ordering the reconstitution of a lost or destroyed certificate of title without awaiting the report and recommendations of the land registration commissioner and the register of deeds of Quezon City. Also, LRC Circular No. 35 requires that notices of hearings be given to the register of deeds of the place where the property is located, the land registration commissioner and the provincial or city fiscal. 15 But nowhere does it require that such notices be sent also to owners of adjoining properties and actual occupants of the land. Thus, in the present case, the fact that none were sent to the owners of adjoining lots or to the alleged actual occupants of the subject property did not negate the jurisdiction of the RTC. Third Issue: The Character of Petitioner's TCT Lastly, petitioner questions the finding of the Court of Appeals that her TCT No. RT-87672 (213611) is fake. Again, we find merit in her submission. We stress that the Petition filed by respondent before the CA was for the annulment of judgment on the ground of lack of jurisdiction. Such recourse is limited to the grounds provided by law, and cannot be used to reopen the entire controversy. 16 The CA was not being called upon to determine the character of petitioner's TCT. Evidently, its ruling with respect thereto was merely an obiter dictum that did not, and indeed could not, rule on such matter. It had no authority to do so. Verily, the only issue before the CA was the jurisdiction of the RTC, not the correctness of the latter's Decision which had become final and unappealable. In debunking the genuineness of petitioner's TCT, it was going beyond the ambit of the case before it: the alleged lack of jurisdiction of the RTC to render the questioned judgment. WHEREFORE, the Petition is GRANTED, and the assailed Decision of the Court of Appeals is hereby REVERSED and SET ASIDE. No costs. SO ORDERED. Melo, Vitug, Gonzaga-Reyes, and Sandoval-Gutierrez, JJ., concur.

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Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 136588 July 20, 2000 THE PHILIPPINES, petitioner,

REPUBLIC OF vs. PILAR ESTIPULAR, respondent. DECISION PANGANIBAN, J.:

Republic Act No. 26 requires that a petition for reconstitution of a lost or destroyed certificate of title must be published in the Official Gazette and posted at the main entrance of the provincial and the municipal buildings of the place where the property is situated. This requirement is mandatory; strict compliance therewith is jurisdictional. Without such publication and posting at the main entrances of both the municipal and the provincial edifices, the trial court Decision granting the reconstitution is void. The Case This is the principle used by this Court in granting the Petition for Review before us, assailing the December 9, 1998 Decision1 of the Court of Appeals2 (CA) in CA-GR CV No. 53846. The dispositive portion of the challenged Decision reads as follows: "WHEREFORE, premises considered, the appealed judgment is hereby AFFIRMED in toto."3 The decretal part of the Decision4 of the Regional Trial Court affirmed by the CA is worded thus: "WHEREFORE, the Court finds the petition to be well-taken and supported by evidence. Hence, the petition is hereby GRANTED. The destroyed/burned original copy of Certificate of Title No. 154 is declared cancelled and the Register of Deeds of La Union is hereby directed to reconstitute in lieu thereof, the Original Certificate of Title No. 154, in favor of Fermin Estipular, which shall bear the annotation that the same is being issued in place of the destroyed/burned original copy in exactly the same terms and conditions using as basis the corresponding Owners Duplicate Certificate of Title previously issued by the Registry of Deeds of La Union but shall in all respects be entitled to like faith and credit as the destroyed/burned original copy filed with the Registry Office, and shall thereafter be regarded as such for all purposes of the Property Registration Decree." 5 The Facts This case is rooted in a Petition for Reconstitution of Title filed by Pilar Estipular before the Regional Trial Court of La Union. The factual and the procedural antecedents of the case are summarized in the assailed CA Decision as follows: "In her Petition for Reconstitution of Title, the petitioner, Pilar Estipular, declared that she [was] the only surviving legal heir of the late Fermin Estipular, who died intestate in Caba, La Union. During his lifetime, Fermin was issued Certificate of Title No. 154 duly registered in his own name by the Register of Deeds of La Union covering a parcel of land located at Barrio Liquicia, Caba, La Union, with an area of 6.1253 hectares. The said Certificate of Title was either destroyed or burned as a result of the burning of the Register of Deeds of La Union during the last World War. Further, it was alleged that the aforesaid parcel of land was declared for taxation purposes by Fermin and his heirs; that said estate is not mortgaged to any financial institution; nor is there any document pending registration affecting the said land. As the land was already declared and distributed to ten persons who have succeeded him, the petitioner prayed that the said Certificate of Title be reconstituted in accordance with law. "On June 15, 1994, the court a quo ordered that a Notice of Hearing be published for two successive issues of the Official Gazette and be posted at the main entrance of the Municipal Building of Caba, La Union at least thirty (30) days from the initial hearing set for September 8, 1994 ( Records, p. 8). A Certificate of Posting was submitted by Branch Sheriff Romeo Obiena proving that copies of the Petition and Notice of Hearing were posted at the main entrance of Municipal Building of Caba, La Union ( Records, p. 9). However, the National Printing Office advised the lower court to reschedule its original date of hearing as it could not meet the schedule of publication (Records,p. 11). On August 12, 1994, another Notice of Hearing was issued by the trial

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court, resetting the initial hearing to December 7, 1994. (Records, p. 13). In view thereof, a second Certificate of Posting was issued by Branch Sheriff concerning the administrative case ( Records, p.16). In the same manner, the National Printing Office issued a Certificate of Publication showing that the said petition for reconstitution was published in the Official Gazette for two successive weeks on October 17 and 24, 1994. "On November 2, 1994, the Office of the Solicitor General entered its appearance as counsel for the respondent Republic and deputized the Provincial Prosecutor of La Union to appear [o]n its behalf in connection with the subject case (Records, p.20). "The initial hearing materialized on December 7, 1994. The petitioner and the public prosecutor appeared [i]n such hearing. The case was called to invite private oppositors to come forthwith, but nobody registered his/her opposition. Due to the absence of the counsel for the petitioner, the latter was allowed to establish jurisdictional facts at the next hearing date, January 24, 1995. On the latter date, the petitioner presented the jurisdictional facts with the corresponding documentary requirements prescribed by law, to wit: "Exhibit "A".... - Petition dated June 9, 1994; Exhibit "A-1".... - Verification of petition; Exhibit "B".... - Certified True Copy of Certificate of Title No. 154; Exhibit "C".... - Survey Plan for the Titles; Exhibit "D".... - Technical Description; Exhibit "E".... - Certification of the Provincial Assessor; Exhibit "F".... - Notice of Hearing; Exhibit "G".... - Certificate of Publication issued by the National Printing Office; Exhibit "H".... - Certificate of Posting; Exhibit "I".... - Notice of Appearance of the Solicitor General." "When the Exhibits were offered in evidence, the Public Prosecutor never interposed any objection, hence, all the exhibits were admitted. Petitioner Pilar Estipulars testimony was offered to prove that she caused the reconstitution of Certificate of Title No. 154 of the Register of Deeds of La Union. "Two (2) other witnesses, Davidson Estipular and Juvenal Estacio, testified for the petitioner. The grandson of the petitioner, Davidson Estipular, stated that the land covered by the title in question (owners duplicate) [was] existing and that the original title was burned in the Register of Deeds of La Union. Mr. Juvenal Estacio, the representative of the Register of Deeds of La Union, testified that all the pre-war records in the said office were either burned, destroyed or stolen during the last World War. "After the presentation of evidence, the lower court rendered the questioned decision." The CA Ruling Although the Notice of Hearing had not been posted at the main entrance of the provincial building, the CA held that there was substantial compliance with the requirements of the law. It ruled: "It is a settled rule that proceedings for judicial reconstitution of certificates of title are proceedings in rem. Thus, NOTICE OF HEARING BY PROPER PUBLICATION IS SUFFICIENT TO CLOTHE THE COURT WITH JURISDICTION (Calalang vs. Register of Deeds of Quezon City , 231 SCRA 88, emphasis ours). The purpose of such publication is to apprise the whole world that such a petition has been filed and that whoever is minded to oppose it for good cause may do so within thirty (30) days before the date set by the court for hearing the petition. It is the publication of such notice that brings in the whole world as a party in the case and vests the court with jurisdiction to hear and decide it ( Republic vs. Court of Appeals, 218 SCRA 773). Since there was a valid publication of the Notice of Hearing in the Official Gazette, then it is sufficient to vest jurisdiction upon the court to hear and determine the petition."6 xxx xxx xxx

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"Viewed in proper perspective, the failure of the petitioner to post the Notice of Hearing at the main entrance of the provincial capitol building does not detract from the fact that there was a substantial compliance with the provisions of the law. It must be noted that the Branch Sheriff issued two (2) Certificates of Posting ( Records, pp. 9 and 16) at the main entrance of the municipal building where the land [lay]. Coupled with the successive publications in the Official Gazette, it was more than enough to serve the purpose of notifying all the parties concerned that a petition ha[d] been filed and that whoever ha[d] an interest therein to oppose it for good cause should come to court and prove his claim. As it [was], no private parties opposed the petition. No other claimant x x x came forward. On the other hand, the government was ably represented by the Public Prosecutor so the appellant Republic was not in any manner deprived of the opportunity to protect its rights or interests over the land subject of the petition."7 Hence, this recourse by the Republic.8 The Issue Petitioner submits this lone issue for the resolution of this Court: "The sole issue for resolution is whether or not supposed substantial compliance with the requirements of Republic Act No. 26 is sufficient to confer jurisdiction on the trial court over the case." 9 The Courts Ruling The Petition is meritorious. Main Issue: Requirements for Reconstitution of Title Are Mandatory and Jurisdictional Jurisdiction over the subject matter or nature of the action is conferred only by the Constitution or by law. It cannot be (1) granted by the agreement of the parties; (2) acquired, waived, enlarged or diminished by any act or omission of the parties; or (3) conferred by the acquiescence of the courts. 10 Republic Act No. 2611 lays down the special requirements and procedure that must be followed before jurisdiction may be acquired over a petition for reconstitution of title. In Section 13 of said Act, these requirements and procedure are provided as follows: "Sec. 13. The Court shall cause a notice of the petition, filed under the preceding section, to be published, at the expense of the petitioner, twice in successive issues of the Official Gazette, and to be posted on the main entrance of the provincial building and of the municipal building of the municipality or city in which the land is situated, at least thirty days prior to the date of hearing. The court shall likewise cause a copy of the notice to be sent, by registered mail or otherwise, at the expense of the petitioner, to every person named therein whose address is known, at least thirty days prior to the date of the hearing. Said notice shall state, among other things, the number of the lost or destroyed certificate of title if known, the name of the registered owner, the name of the occupants or persons in possession of the property, the owner of the adjoining properties, the location, area and boundaries of the property, and the date on which all persons having any interest therein must appear and file their claim or objection to the petition. The petitioner shall, at the hearing, submit proof of publication, posting and service of the notice as directed by the court." These requirements are mandatory and compliance with them is jurisdictional. In Republic v. Court of Appeals,12the Court held: "Reconstitution of a certificate of title, in the context of Republic Act No. 26, denotes the restoration in the original form and condition of a lost or destroyed instrument attesting [to] the title of a person to a piece of land. The purpose of the reconstitution is to have, after observing the procedures prescribed by law, the title reproduced in exactly the same way it has been when the loss or destruction occurred. Among the conditions explicitly required by the law is publication of the petition twice in successive issues of the Official Gazette, and its posting at the main entrance of the provincial building and of the municipal building of the municipality or city in which the land is situated, at least thirty days prior to the date of hearing. This directive is mandatory; indeed, its compliance has been held to be jurisdictional. x x x" Thus, before the trial court can acquire jurisdiction to hear and decide a reconstitution case, compliance with the following requisites is imperative: "1. [That] the notice of the petition be published, at the expense of the petitioner, twice in successive issues of the Official Gazette, and posted on the main entrance of the provincial building and of the municipal building of the municipality or city in which the land is situated, at least thirty days prior to the date of hearing;

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"2. [That] the notice state among other things, the number of the lost or destroyed certificates of title if known, the name of the registered owner, the name of the occupants or persons in possession of the property, the owner of the adjoining properties and all other interested parties, the location, area and boundaries of the property, and the date on which all persons having any interest therein must appear and file their claim of objection to the petition; "3. [That] a copy of the notice also be sent, by registered mail or otherwise, at the expense of the petitioner, to every person named therein (i.e. the occupants or persons in possession of the property, the owner of the adjoining properties and all other interested parties) whose address is known at least thirty days prior to the date of the hearing; and "4. [That] at the hearing, petitioner submit proof of publication, posting and service of the notice as directed by the court."13 In the present case, it is undisputed that the Notice of Hearing of respondents Petition for Reconstitution was not posted at the main entrance of the provincial building. Clearly, the trial court did not acquire jurisdiction over the case. But the appellate court, citing Calalang v. Register of Deeds ,14 opined that the publication of the Notice of Hearing in the Official Gazette was "sufficient to vest jurisdiction upon the court to hear and determine the Petition."15 We disagree. The Court in Calalang did not rule on whether the posting requirement was mandatory. It merely held that the absence of personal notice to a person purporting to have a legitimate claim on the property was not a sufficient ground to invalidate the proceedings.16 It must be emphasized that under the law, the publication of a notice of hearing in the Official Gazette is not enough. The posting of said notice at the main entrances of both the municipal and the provincial building is another equally vital requisite. The purposes of the stringent and mandatory character of the legal requirements ofpublication, posting and mailing are to safeguard against spurious and unfounded land ownership claims, to apprise all interested parties of the existence of such action, and to give them enough time to intervene in the proceeding.17 The publication of the Notice of Hearing in the Official Gazette does not justify the respondents failure to comply with the legal requirement of posting the Notice at the main entrance of both the municipal and the provincial buildings. The principle of substantial compliance cannot be applied to the present case, as the trial courts acquisition of jurisdiction over the Petition hinged on a strict compliance with the requirements of the law. True, the root of this failure may be traced to the June 15, 1994 Order of the trial court, which failed to include a directive that the Notice of Hearing be posted at the main entrance of the provincial building. However, this oversight cannot excuse noncompliance with the requirements of RA No. 26. Under the circumstances, it is clear that the trial court did not acquire jurisdiction over the case because of its own lapse, which respondent failed to cure. WHEREFORE, the Petition is hereby GRANTED. The assailed Decision of the Court of Appeals is REVERSEDand SET ASIDE. No costs. SO ORDERED.

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Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 114732 August 1, 2000

ESTRELLA TIONGCO YARED (now deceased) substituted by one of her heirs, CARMEN MATILDE M. TIONGCO petitioner, vs. HON. RICARDO M. ILARDE, Presiding Judge, Regional Trial Court of Iloilo, Br. 26, JOSE B. TIONGCO and ANTONIO G. DORONILA, JR., respondents. DECISION DE LEON, JR., J.: Before us is a petition for certiorari under Rule 65 assailing the Order dated March 17, 1994 1 of the Regional Trial Court of Iloilo City, Branch 26, which reinstated an earlier order cancelling the notice of lis pendens annotated on the back of Transfer Certificates of Title Nos. T-92383 and T-5050, of the Registry of Deeds of Iloilo City covering Lots 3244 and 3246, respectively, located in Iloilo City. The relevant facts are summarized as follows: On October 17, 1990, petitioner Estrella Tiongco Yared filed an amended complaint2 before the Regional Trial Court, 6th Judicial Region, Branch XXVI, against private respondents Jose B. Tiongco and Antonio Doronila, Jr. Docketed as Civil Case No. 19408, the action was one for "annulment of affidavit of adjudication, sales, transfer certificates of title, reconveyance and damages." In brief, the amended complaint alleged that respondent Tiongco, on the basis of an affidavit of adjudication dated April 17, 1974 alleging that he is the sole surviving heir of the previous owner, Maria Luis de Tiongco, succeeded in having the subject properties registered in his name, to the prejudice of the other surviving heir of the previous owner, petitioner among them. Petitioner and respondent Tiongco's father were siblings, and both were among several heirs of Maria Luis de Tiongco. The aforesaid affidavit of adjudication was registered with the Office of the Register of Deeds of Iloilo City on May 10, 1974. Petitioner prayed that the properties be reconveyed to the original registered owners, subject to partition among the lawful heirs, and that respondent Tiongco be ordered to pay damages and costs. To protect her interest in the properties during the pendency of the case, petitioner caused to be annotated on Transfer Certificate of Title Nos. T-52547, T-4666 and T-52546, 3 which covered Lot Nos. 3244, 3246 and 1404,respectively. TCT Nos. T-92383 and T-5050 were derived or transferred from TCT Nos. T-52547 and T4666 respectively and registered in the name of Tiongco. After respondent Jose B. Tiongco filed his answer, trial ensued during which, on three separate occasions, he filed motions seeking the cancellation of the notices of lis pendens.4 All these motions were denied.5 On December 14, 1993, the respondent judge issued a Decision6 dismissing petitioner's complaint and private respondent's counterclaim. The trial court found that petitioner's cause of action had already prescribed. Petitioner filed a notice of appeal7 on December 17, 1993. As before, respondent Tiongco filed a motion for cancellation of the notices of lis pendens8 dated December 21, 1993; this was denied in an Order dated January 10, 1994.9 He filed a "Second Motion for Reconsideration" 10 which was also denied in an Order dated January 26, 1994.11 Displaying remarkable tenacity, respondent Tiongco filed a "Third Motion for Reconsideration."12 This time, however, his arguments proved persuasive. In an Order13 dated February 14, 1994, the respondent judge ruled to wit: In the light of the ruling laid down in Magdalena Homeowners Association Inc. vs. Court of Appeals, 184 SCRA 325; 330 (1990), cited in Vda. De Kilayko vs. Tengco, 207 SCRA 600; 614-615 (1992), that "the continuance or removal of a notice of lis pendens is not contingent on the existence of a final judgment in the action and ordinarily has no effect on the merits thereof" so that the notices of lis pendens in the case at bar may, on proper grounds, be cancelled notwithstanding the non-finality of the judgment of this Court brought about by plaintiff's appeal and considering the finding of this Court that plaintiff's action had already prescribed, which finding is based on the admitted fact that the questioned deed of adjudication was registered way back of May 10, 1974 so that the possibility of this finding being reversed is quite remote if not totally nil and, considering

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further, the circumstances obtaining in this case, among which are: (1) that the criminal complaint for perjury filed by plaintiff against defendant Jose B. Tiongco based on the same deed of adjudication had already been dismissed with finality also on the ground of prescription; (2) that the occupants of the property who were alleged as formerly paying rentals to herein plaintiff, Estrella Tiongco Yared, had already recognized defendant's ownership and had long stopped paying rentals to plaintiff without the latter intervening, much less, contesting the decision in Civil Case No. 15421 where defendant Jose B. Tiongco was declared with finality as the true and lawful owner of Lots Nos. 3244 and 3246; and (3) that, if at all, the present claim of plaintiff covers but a very small portion of subject lots consisting only a total of about 64 square meters hence, it would be unfair to the defendant who has torrens title covering the parcels of lands solely in his name to have the same subjected to the harsh effect of such a encumbrance; the Court, in view of all the foregoing considerations and upon further review of the records, hereby reconsiders its stand on the subject matter of lis pendens and so holds that the continued annotation of subject notices of lis pendens is intended to molest the defendant, Jose B. Tiongco, and is not necessary to protect the rights of plaintiff as such rights, if any, are now foreclosed by prescription. This time, it was petitioner's turn to seek reconsideration. 14 On March 4, 1994, the public respondent issued an Order15 reversing himself on the ground that (1) it had already lost jurisdiction over the case due to the expiration of the last day to appeal of both parties, (2) the notice of appeal has been approved, and (3) the records had been ordered elevated to the Court of Appeals. Private respondent Tiongco filed another motion for reconsideration 16 against the Order dated March 4, 1994. On March 17, 1994, the respondent judge issued the order, subject of this petition, which is quoted hereunder: Considering that under Section 9, Rule 41 of the Rules of Court, although appeal had already been perfected, the Court, prior to the transmittal of the records to the appellate court, may issue orders for the protection and preservation of the rights of the parties which do not involve any matter litigated by the appeal and considering that in the case at bar, lis pendens is not a matter litigated in the appeal and the records have not as yet been transmitted to the appellate court so that this Court still has jurisdiction to issue the Order of February 14, 1994 cancelling the notices of lis pendens annotated on TCT No. T-92383 covering Lot 3244 and on TCT No. T-5050 covering lot 3246 and considering further, that the said Order does not direct cancellation of lis pendens annotated on TCT No. T-89483 covering Lot no. 1404 which contains a total area of 1,587 square meters where the area of 64 square meters claimed by plaintiff can very well be taken; as prayed for by the defendant Jose B. Tiongco, the Order of March 4, 1994 is hereby reconsidered and set aside and the Order of February 14, 1994 is hereby reconsidered and set aside and the Order of February 14, 1994 cancelling the notices of lis pendens on TCT No. T-92383 covering lot 3244 and on TCT No. T-5050 covering lot 3246 is hereby reinstated. On April 5, 1994, the Register of Deeds cancelled the annotation of notices of lis pendens.17 Feeling that a motion for reconsideration would be fruitless, petitioner filed the instant special civil action for certiorari, alleging that: THE HONORABLE RESPONDENT JUDGE ACTED CAPRICIOUSLY, WHIMSICALLY AND WITH GRAVE ABUSE OF DISCRETION IN ORDERING THE CANCELLATION OF THE NOTICES OF LIS PENDENS ANNOTATED AT THE BACK OF THE CERTIFICATES OF TITLE THAT ARE THE SUBJECT OF THE CIVIL CASE NO. 19408, AS THESE ARE AMONG THE DOCUMENTS THAT ARE SOUGHT TO BE DECLARED NULL AND VOID BY THE HEREIN PETITIONER. The doctrine of lis pendens is founded upon reasons of public policy and necessity, the purpose of which is to make known to the whole world that properties in litigation are still within the power of the court until the litigation is terminated and to prevent the defeat of the judgment or decree by subsequent alienation. 18 The notice of lispendens is an announcement to the whole world that a particular real property is in litigation, and serves as a warning that one who acquires an interest over said property does so at his own risk, or that he gambles on the result of the litigation over said property.19 Rule 13, Section 14 of the 1997 Rules of Civil Procedure 20 and Section 76 of Presidential Decree No. 1529,21otherwise known as the Property Registration Decree provide the statutory bases for notice of lis pendens. From these provisions, it is clear that such a notice is proper only in: a) An action to recover possession of real estate; b) An action to quiet title thereto; c) An action to remove clouds thereon; d) An action for partition; and

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e) Any other proceedings of any kind in Court directly affecting title to the land or the use or occupation thereof or the building thereon.22 Thus, all petitioner has to do is to assert a claim of possession or title over the subject property to put the property under the coverage of the rule.23 It is not necessary for her to prove ownership or interest over the property sought to be affected by lis pendens. Whether as a matter, of procedure 24 or substance,25 the rule is that a notice of lis pendens may be cancelled only on two (2) grounds, namely (1) if the annotation was for the purpose of molesting the title of the adverse party, or (2) when the annotation is not necessary to protect the title of the party who caused it to be recorded. 26 The petition should be dismissed, there being a clear violation of the doctrine of judicial hierarchy that we have taken pains to emphasize in past jurisprudence. Thus, we ruled in Vergara v. Suelto27 that: [t]he Supreme Court is a court of last resort, and must so remain if its is to satisfactorily perform the functions assigned to it by fundamental charter and immemorial tradition. It cannot and should not be burdened with the task of dealing with causes in the first instance. Its original jurisdiction to issue the so-called extraordinary writs should be exercised only where absolutely necessary or where serious and important reasons exist therefor. Hence, that jurisdiction should generally be exercised relative to actions or proceedings before the Court of Appeals, or before constitutional or other tribunals, bodies or agencies whose acts for some reason or another, are not controllable by the Court of Appeals. Where the issuance of an extraordinary writ is also within the competence of the Court of Appeals or a Regional Trial Court, it is in either of these courts that the specific action for the writ's procurement must be presented. This is and should continue to be the policy in this regard, a policy that courts and lawyers must strictly observe. We reaffirmed this policy in People v. Cuaresma,28 thus: xxx A last word. This Court's original jurisdiction to issue writ of certiorari (as well as prohibition, mandamus, quo warranto, habeas corpus and injunction) is not exclusive. It is shared by this Court with Regional Trial Courts (formerly Courts of First Instance), which may issue the writ, enforceable in any part of their respective regions. It is also shared by this Court, and by the Regional Trial Court, with the Court of Appeals (formerly Intermediate Appellate Court), although prior to the effectivity of Batas Pambansa Bilang 129 on August 14, 1981, the latter's competence to issue the extraordinary writs was restricted to those "in aid of its appellate jurisdiction." This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and should also serve as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Court's original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is established policy. It is a policy that is necessary to prevent inordinate demands upon the Court's time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Court's docket. Indeed, the removal of the restriction on the jurisdiction of the Court of Appeals in this regard, supra-resulting from the deletion of the qualifying phrase, "in aid of its appellate jurisdiction"-was evidently intended precisely to relieve this Court pro tanto of the burden of dealing with applications for the extraordinary writs which, but for the expansion of the Appellate Court's corresponding jurisdiction, would have had to be filed with it. The Court feels the need to reaffirm that policy at this time, and to enjoin strict adherence thereto in the light of what it perceives to be a growing tendency on the part of litigants and lawyers to have their applications for the so-called extraordinary writs, and sometimes even their appeals, passed upon and adjudicated directly and, immediately by the highest tribunal of the land. The proceeding at bar is a case in point. The application for the writ of certiorari sought against a City Court was brought directly to this Court although there is no discernible special and important reason for not presenting it to the Regional Trial Court. The Court therefore closes this decision with the declaration, for the information and guidance of all concerned, that it will not only continue to enforce the policy, but will require a more strict observance thereof. (emphasis supplied) Notwithstanding these pronouncements, parties persisted in disregarding the judicial hierarchy. As we noted inSantiago v. Vasquez,29

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One final observation. We discern in the proceedings in this case a propensity on the part of petitioner, and, for that matter, the same may be said of a number of litigants who initiate recourses before us, to disregard the hierarchy of courts in our judicial system by seeking relief directly from this Court despite the fact that the same is available in the lower courts in the exercise of their original or concurrent jurisdiction, or is even mandated by law to be sought therein. This practice must be stopped, not only because of the imposition upon the precious time of this Court but also because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case which often has to be remanded or referred to the lower court as the proper forum under the rules of procedure, or as better equipped to resolve the issues since this Court is not a trier of facts. We, therefore, reiterate the judicial policy that this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts or where exceptional and compelling circumstance justify availment of a remedy within and calling for the exercise of our primary jurisdiction. This policy found further application in People v. Court of Appeals,30 Aleria v. Velez, 31 and Tano v. Socrates.32Only the presence of exceptional and compelling reasons justified a disregard of the rule. 33 Petitioner has failed to advance a satisfactory explanation as to her failure to comply with or non-observance of the principle of judicial hierarchy. There is no reason why the instant petition could not have been brought before the Court of Appeals, considering all the more that the appeal of the main case was already before it. InMagdalena, Homeowners Association, Inc. v. Court of Appeals34 we ruled, to wit: The notice of lis pendens-i.e., that real property is involved in an action-is ordinarily recorded without the intervention of the court where the action is pending. The notice is but an incident in an action, an extrajudicial one, to be sure. It does not affect the merits thereof. It is intended merely to constructively advise, or warn, all people who deal with the property that they so deal with it at their own risk, and whatever rights they may acquire in the property in any voluntary transaction are subject to the results of the action, and may well be inferior and subordinate to those which may be finally determined and laid down therein. The cancellation of such a precautionary notice is therefore also a mere incident in the action, and may be ordered by the Court having jurisdiction of it at any given time. And its continuance or removal-like the continuance or removal or removal of a preliminary attachment of injunction-is not contingent on the existence of a final judgment in the action, and ordinarily has no effect on the merits thereof. 1wphi1 In the case at bar, the case had properly come within the appellate jurisdiction of the Court of Appeals in virtue of the perfection of the plaintiff's appeal. It therefore had power to deal with and resolve any incident in connection with the action subject of the appeal, even before final judgment. The rule that no questions may be raised for the first time on appeal have reference only to those affecting the merits of the action, and not to mere incidents thereof, e.g., cancellation of notices of lis pendens, or, to repeat, the grant or dissolution of provisional remedies. [emphasis supplied] Had petitioner brought the instant petition before the Court of Appeals, the same could, and would, have been consolidated with the appeal, thereby bringing under the competence of the said court all matters relative to the action, including the incidents thereof. Prescinding from the foregoing discussion, the disposition of the instant case will be incomplete without a reference to the improper and unethical language employed by respondent Jose B. Tiongco, who is also counsel for private respondents, in his pleadings and motions filed both before us and the court a quo. It is his belief that counsel for petitioner, Atty. Marciana Deguma, "a rambunctious wrestler-type female of 52 who does not wear a dress which is not red, and who stampedes into the courtroom like a mad fury and who speaks slang English to conceal her faulty grammar,"35 is impelled by less than less than noble reasons in serving as counsel for petitioner. Her ulterior motive? "[T]o please and tenderize and sweeten towards her own self the readily available Carmelo M. Tiongco,"36 a retired police major described by respondent Tiongco as Atty. Deguma's "nio bonito,"37 an unmarried mestizo with curly hair who lives with plaintiff for being houseless" 38 who rents a place on the subject property sought to be recovered by petitioner. Atty. Deguma, apparently are unmarried maiden of a certain age, is variously described by respondent Tiongco as "a love-crazed female Apache [who] is now ready to skin defendant alive for not being a bastard," 39 and a "horned spinster and man-hungry virago and female bull of an Amazon who would stop at nothing to molest, harrass (sic) and injure defendant - if only to please and attract police-major Carmelo Tiongco Junior - the deeply desired object of her unreciprocated affections - who happens not to miss every chance to laugh at her behind her back." 40 He claims that Atty. Deguma, a lawyer with the Public Attorney's Office, is engaged in a game of one-upmanship with a fellow employee, in that "she happens to be ambitious enough to secretly (that what she thought) plot to put one over her office-mate who simply netted a corporal (if not a private) by aiming at no lest than an IMDC major hoping to catch him by sheer brass and audacity." 41 In so doing, Atty. Deguma is using the PAO as a "marriage bureau for her own benefit.42 Respondent Tiongco predicts that nothing good will come out of opposing counsel's scheme since, quoting Voltaire, "outside of virtue, ther's (sic) no happiness."431wphi1 Respondent Tiongco has achieved a remarkable feat of character assassination. His verbal darts, albeit entertaining in a fleeting way, are cast with little regard for truth. However, he does nothing more than to obscure the issues, and his reliance on the fool's gold of gossip betrays only a shocking absence of discernment.

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To this end, it will be wise to give him an object lesson in the elementary rules of courtesy by which we expect members of the bar to comport themselves. These provisions of the Code of Professional Responsibility are pertinent: CANON 8-A LAWYER SHALL CONDUCT HIMSELF WITH COURTESY, FAIRNESS AND CANDOR TOWARD HIS PROFESSIONAL COLLEAGUES, AND SHALL AVOID HARASSING TACTICS AGAINST OPPOSING COUNSEL. Rule 8.01-A lawyer shall not, in his professional dealings, use languages which is abusive, offensive or otherwise improper. xxx xxx xxx

Rule 11.03-A lawyer shall abstain from scandalous, offensive or menacing language before the courts. In Romero v. Valle,44 we stated that a lawyer's actuations, "[a]lthough allowed some latitude of remarks or comment in the furtherance of the cause he upholds, his arguments, both written or oral, should be gracious to both court and opposing counsel and be of such words as may be properly addressed by one gentleman to another." Otherwise, his use of intemperate language invites the disciplinary authority of the court. 45 We are aghast at the facility with which respondent Atty. Jose B. Tiongco concocts accusations against the opposing party and her counsel, although it is of public record that in Tiongco v. Deguma, et a1.,46 we dismissed as totally unfounded his charge of fraudulent conspiracy and public scandal against petitioner, Major Tiongco, Atty. Deguma and even the latter's superior at the Public Attorney's Office, Atty. Napoleon G. Pagtanac. His lexicon of insults, though entertaining, do not find a ready audience in us, and he should be, as he is hereby, warned accordingly:Homines qui gestant, quiqui auscultant crimina, si meo arbitratu liceat, omnis pendeat, gestores linguis, auditores auribus.47 WHEREFORE, the petition fir certiorari is hereby DISMISSED, without pronouncement as to costs. SO ORDERED. Mendoza, Quisumbing, and Buena, JJ., concur. Bellosillo, J., (Chairman), on leave.

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Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 128412 March 15, 2002

REXLON REALTY GROUP, INC., petitioner, vs. THE HONORABLE COURT OF APPEALS, HON. ARTURO T. DE GUIA, RTC JUDGE (Cavite City), BRANCH 16, ALEX L. DAVID, THE REGISTER OF DEEDS FOR THE PROVINCE OF CAVITE AND PARAMOUNT DEVELOPMENT CORPORATION OF THE PHILIPPINES, respondents. DE LEON, JR., J.: Before us is a petition for review of the Decision 1 dated November 19, 1996 and Resolution2 dated February 7, 1997 of the Court of Appeals dismissing the petition for annulment of the Decision 3 dated March 1, 1994 of the Regional Trial Court (RTC) of Cavite, Branch 16, which granted the petition of respondent Alex L. David in L.R.C. Rec. No. 8843 for the issuance of new owners duplicate copies of Transfer Certificates of Title Nos. T72537 and T-72538 of the Registry of Deeds of the Province of Cavite. The facts are as follows: Respondent Alex L. David is the registered owner of two (2) parcels of land located in Molino, Bacoor, Cavite covered by Transfer Certificates of Title (TCT) Nos. T-72537 and T-72538, with areas of 7,801 and 42,253 square meters, respectively. On August 17, 1989, petitioner Rexlon Realty Group, Inc. (Rexlon, for brevity) entered into an agreement with respondent David for the purchase of the said two (2) parcels of land as evidenced by a document denominated as "Absolute Deed of Sale". On February 18, 1994, David filed with the Regional Trial Court of Cavite City, Branch 16, a petition for the issuance of owners duplicate copies of TCT Nos. T-72537 and T-72538 to replace the owners duplicate copies which were allegedly lost. David alleged that he entrusted his owners duplicate copies of the said TCTs to a friend and member of his staff for the purpose of showing them to a prospective developer who was interested in developing the subject parcels of land for commercial and/or industrial use; that the said owners duplicate copies of said titles were misplaced and could not be found despite diligent efforts to locate the same; and that said owners duplicate copies have not been delivered to any person or entity to secure payment or performance of any obligation. Consequently, a notice of hearing was issued by the RTC ordering its branch Deputy Sheriff to post copies of the same at the Provincial Capitol Building, the public market, and the Barangay Hall of the locality where the properties are located. The said Deputy Sheriff then issued his Certificate of Posting stating that he has duly posted the Notice of Hearing at the said three (3) public places. The initial hearing proceeded ex-parte inasmuch as nobody appeared to oppose the same. On March 1, 1994, the RTC granted the said petition in a decision, the dispositive portion of which reads: WHEREFORE, the instant petition is hereby granted and the Register of Deeds for the Province of Cavite is accordingly directed, upon payment of the corresponding fees, to issue another duplicate copies of TCT Nos. T-72537 and T-72538 to petitioner Alex L. David, in lieu of the two (2) lost titles, which are hereby declared null and void and of no further force and effect. The new duplicate titles shall contain all subsisting encumbrances, if any.4 Petitioner Rexlon then filed with the Court of Appeals a petition for annulment of the said Decision of the trial court on the ground that respondent David allegedly employed fraud and deception in securing the replacement owners duplicate copies of the subject TCTs; that there was absence of due process; and, that the decision of the trial court was tainted with grave abuse of discretion amounting to lack of jurisdiction. The petition was later amended, with leave of court, to include as respondent Paramount Development Corporation of the Philippines (Paramount, for brevity) upon discovering that respondent David had executed on September 20, 1994, a deed of sale of the subject parcels of land in favor of Paramount. As a result of that sale, new certificates of title designated as TCT Nos. T-525664 and T-525665 were issued in the name of respondent Paramount in lieu of TCT Nos. T-72537 and T-72538 in the name of Alex L. David. On November 19, 1996, public respondent Court of Appeals rendered a decision dismissing the petition of petitioner Rexlon, the dispositive portion of which reads:

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WHEREFORE, in view of the foregoing, the petition is hereby DISMISSED for lack of merit. SO ORDERED.5 In ruling in favor of respondents David and Paramount, the appellate court held as insignificant the contention of petitioner Rexlon that David had misled the trial court in alleging that his owners duplicate copies of the said TCT Nos. T-72537 and T-72538 were lost. Petitioner claims that it had acquired the titles of ownership over the said properties from respondent David pursuant to a perfected contract of sale between them. Refuting this allegation, the appellate court held that: Said contention is not impressed with merit. It must be remembered that the decision sought to be annulled concerns the issuance of owners duplicate copies of TCT Nos. T-75237 and T-75238 of the Register of Deeds of the Province of Cavite. It did not in any manner dwell on the issue of whether or not the alleged deed of sale in favor of petitioner executed by private respondent has any force and effect. Hence, this Court may not determine the rights of any of the parties in this case to the said properties. Any adjudication of rights over the properties in question may only be done by the proper court where the appropriate action may be filed but definitely, not in the present case. Furthermore, private respondent Alex David appeared to be the registered owner of TCT Nos. T-75237 and T-75238 when said petition was filed. Consequently, pursuant to Section 109 of Presidential Decree No. 1529, he has the personality to file the same.6 In regard to petitioners argument that the jurisdictional requirements set forth in Section 13 of Republic Act No. 26 have not been complied with, the appellate court ruled that: As private respondent points out, petitioner failed miserably to discern that Republic Act No. 26 has no application to the proceedings commenced below. Said law applies to reconstitution of lost or destroyed transfer certificates of title, which is not what private respondent sought below. Reconstitution presupposes the loss or destruction of the original copies of the certificate of title on file with the Register of Deeds (Cf. Section 110, Presidential Decree No. 1529). In such a case, the procedure prescribed under Republic Act No. 26 would have to be observed. On the other hand, David merely sought the issuance of another owners duplicate copy of his certificates of title under the provisions of Section 109 of Presidential Decree No. 1529, since he claimed that only his duplicate copy was lost and could not be found, and not the original with Register of Deeds. Said provision prescribes a different set of procedure xxx.1wphi1.nt xxx xxx xxx

The aforesaid provision entails a minimum requirement of notice and hearing. In the present case, it appears on record that a notice of hearing (p. 101, Rollo) has been issued by the court. The Certificate of Posting (p. 102, Rollo) shows that the Deputy Sheriff posted the said notice of hearing in three public places where the properties are located. It appearing that the same were observed, this Court finds that the proceedings below were valid and legal. No fraudulent misrepresentation can be imputed against private respondent in seeking the petition for the issuance of an owners duplicate of the subject certificate of title. Besides, a judgment can be annulled only on two (2) grounds: (a) that the judgment is void for want of jurisdiction or for lack of due process of law; or (b) that it has been obtained by fraud ( Santos v. Court of Appeals, 224 SCRA 673). For fraud to serve as a basis for the annulment of a judgment, it must be extrinsic or collateral in character, otherwise, there would be no end to litigations (Santos v. Court of Appeals, 224 SCRA 673). Unfortunately, these grounds do not obtain in the instant case. 7 Hence, this petition based on the following assignment of errors: I RESPONDENT COURT MANIFESTLY ERRED IN GRANTING DAVIDS PETITION FOR ISSUANCE OF NEW OWNERS DUPLICATE CERTIFICATES OF TITLE TO THE PROPERTIES IN HIS NAME. II THE ISSUANCE OF NEW OWNERS DUPLICATE CERTIFICATES OF TITLE TO DAVID WAS DONE WITHOUT ACCORDING DUE PROCESS TO, AND BY PERPETRATING A FRAUD UPON, PETITIONER REXLON.8

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The petitioner alleges that the Court of Appeals erred in failing to annul the decision of the trial court on the ground of fraud and lack of jurisdiction. Fraud, according to the petitioner, attended the proceedings and eventual issuance of the new owners duplicate copies of the subject certificates of title; and that respondent David misled the trial court in alleging in his petition before the RTC that his owners duplicate of TCT Nos. T52537 and T-52538 were lost when in fact he had delivered the said owners duplicate of those certificates of title to the petitioner pursuant to a contract of sale executed between them. The petitioner likewise alleges that it was denied due process in view of certain procedural lapses that attended the proceedings in the trial court. First, it was not served with a specific notice of the hearing of the petition; that it is entitled to said specific notice for the reason that the procedure in Section 23 of Presidential Decree No. 1529 is basically similar to the procedure followed in Section 13 of Republic Act No. 26. Second, the procedure followed in posting the general notice was fatally flawed because of the failure to comply with the three (3) week publication requirement. These procedural infirmities, according to the petitioner, affected the jurisdiction of the trial court in the sense that it deprived the petitioner of its statutory right to oppose the petition and to present evidence in support of its opposition. In response to the aforementioned allegations of the petitioner, respondents David and Paramount reiterate the findings of the appellate court that the petitioner is not entitled to a specific notice inasmuch as the said notice is not required by Section 23 of P.D. No 1529 upon which respondent Davids petition before the trial court is based. They also repeat the appellate courts ruling that the issue of the ownership over the parcels of land and of the validity of the sale is irrelevant in a petition for the issuance of a new owners duplicate certificate of title. The respondents also threw back the charge of fraud to petitioner Rexlon for the latters possession of the owners duplicate copies of the said certificates of title without the knowledge of respondent David. We rule in favor of the petitioner. Pursuant to Section 2 of Rule 47 of the 1997 Revised Rules of Civil Procedure, the grounds to annul a judgment of a lower court are extrinsic fraud and lack of jurisdiction. We find that the issuance of new owners duplicate certificates of title by the trial court in favor of respondent David is indeed tainted with extrinsic fraud. Respondent David in his petition before the RTC alleged that: xxx xxx xxx

3. That the Owners Duplicate of the aforementioned Transfer Certificate of Title No. T-75237 and No. T-75238 were lost when petitioner entrusted said Owners Duplicate of said titles to a trusted friend and member of his staff for the purpose of showing said certificates of title to a prospective developer who was interested in developing said parcels of land for commercial and/or industrial use. However, while the abovementioned Owners Duplicate of said titles were in the custody and possession of the prospective developer, the same were misplaced and could not be found despite diligent efforts to locate said titles; 4. That said Owners Duplicate of Transfer Certificate of Title No. T-75237 and No. T-75238 have not been delivered to any person or entity to secure the payment or performance of any obligation whatsoever or used for any illegal or fraudulent transaction.9 xxx xxx xxx

However, the document denominated as "Absolute Deed of Sale" where the signature of respondent David as seller has not been controverted, states that the latter has fully received payment for the said sale and has bound himself to cede and deliver to petitioner Rexlon, as vendee, his rights, interest, participation and title over the said parcels of land covered by TCT Nos. T-75237 and T-75238. For emphasis, the said pertinent provision of the said Absolute Deed of Sale is quoted hereunder, to wit: NOW, THEREFORE, for and in consideration of the foregoing premises and the mutual covenants of the parties herein contained and of the sum of PESOS: FIVE HUNDRED THOUSAND ONLY (P500,000.00), Philippine currency, receipt of which is hereby confessed and acknowledged to the total and full satisfaction of the VENDOR, the VENDOR hereby unconditionally and absolutely SELLS, TRANSFERS, CONVEYS, CEDES and DELIVERS unto the VENDEE, its successors and assigns all his rights, interest, participation and title, free from all claims, liens and encumbrance whatsoever. 10 The claim of respondents David and Paramount that the sale is void for lack of consideration after the petitioner allegedly failed to pay the down payment cannot prevail over the uncontroverted contractual provision in the notarized Deed of Absolute Sale regarding the full payment of the consideration of Five Hundred Thousand (P500,000.00) Pesos made by Paramount, as vendee, to respondent David, as vendor, who explicitly acknowledged receipt thereof on the face of that document. Respondent David was therefore well aware that

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there was no truth in his allegation in his petition for issuance of new owners duplicate copies of said certificates of title on the false and fraudulent ground that his owners duplicate copies of TCT Nos. T-52537 and T-52538 were lost and that they were not delivered to any person to secure the performance of any obligation. The Court is presented in the case at bar with the issue of whether such misrepresentation or fraud of respondent David can be characterized as extrinsic fraud so as to merit the annulment of the trial courts decision granting respondent Davids petition for the issuance of new owners duplicate certificates of title of TCT Nos. T-52537 and T-52538. Extrinsic fraud contemplates a situation where a litigant commits acts outside of the trial of the case, "the effect of which prevents a party from having a trial, a real contest, or from presenting all of his case to the court, or where it operates upon matters pertaining, not to the judgment itself, but to the manner in which it was procured so that there is not a fair submission of the controversy." 11 The overriding consideration is that the fraudulent scheme of the prevailing litigant prevented a party from having his day in court. Hence, the Court has held that extrinsic fraud is present in cases where a party (1) is deprived of his interest in land, because of a deliberate misrepresentation that the lots are not contested when in fact they are; (2) applies for and obtains adjudication and registration in the name of a co-owner of land which he knows has not been allotted to him in the partition; (3) intentionally conceals facts and connives with the land inspector, so that the latter would include in the survey plan the bed of a navigable stream; (4) deliberately makes a false statement that there are no other claims; (5) induces another not to oppose an application; (6) deliberately fails to notify the party entitled to notice; or (7) misrepresents the identity of the lot to the true owner, causing the latter to withdraw his opposition. Fraud, in these cases, goes into and affects the jurisdiction of the court; thus, a decision rendered on the basis of such fraud becomes subject to annulment.12 In the case of Strait Times, Inc. v. Court of Appeals,13 where this Court was faced with the same facts and issue, therein respondent Pealosa filed a petition for the issuance of a new owners duplicate certificate of title. He alleged therein that his copy was lost and was not pledged or otherwise delivered to any person or entity to guarantee any obligation or for any purpose. When the trial court issued a new owners duplicate title, therein petitioner Strait Times, Inc. filed a petition to annul judgment based on extrinsic fraud and lack of jurisdiction. Straight Times, Inc. claimed that Pealosa misrepresented before the trial court that the said owners duplicate copy of the title was lost when in fact it was in the possession of the former pursuant to a contract of sale between Pealosa and a certain Conrado Callera. Callera later sold the lot represented by the alleged lost title to therein petitioner Straight Times, Inc. We ruled therein, as we now rule in the case at bar, that extrinsic fraud did not attend the proceedings before the trial court for the reason that: xxx It is well-settled that the use of forged instruments or perjured testimonies during trial is not an extrinsic fraud, because such evidence does not preclude the participation of any party in the proceedings. While a perjured testimony may prevent a fair and just determination of a case, it does not bar the adverse party from rebutting or opposing the use of such evidence. Furthermore, it should be stressed that extrinsic fraud pertains to an act committed outside of the trial. The alleged fraud in this case was perpetrated during the trial. Besides, the failure of petitioner to present its case was caused by its own inaction. It was not impleaded as a party to the case before the trial court because it failed to effect the timely registration of its Deed of Sale. Had it done so, it would have been able to oppose the issuance of the new duplicate title, rebut Espinosas testimony, and prove that it already bought the land in issue. 14 However, in consonance with the Straight Times case, respondent Davids act of misrepresentation, though not constituting extrinsic fraud, is still an evidence of absence of jurisdiction. In the Straight Times case and inDemetriou v. Court of Appeals,15 also on facts analogous to those involved in this case, we held that if an owners duplicate copy of a certificate of title has not been lost but is in fact in the possession of another person, the reconstituted title is void and the court rendering the decision has not acquired jurisdiction. Consequently, the decision may be attacked any time. 16 In the case at bar, the authenticity and genuineness of the owners duplicate of TCT Nos. T-52537 and T-52538 in the possession of petitioner Rexlon and the Absolute Deed of Sale in its favor have not been disputed. As there is no proof to support actual loss of the said owners duplicate copies of said certificates of title, the trial court did not acquire jurisdiction and the new titles issued in replacement thereof are void.1wphi1.nt On whether this Court can rule on the validity or nullity of the titles issued in the name of respondent Paramount in the light of the facts of this case, we rule in the affirmative. Firstly, it must be remembered that, in the amended petition of Rexlon for annulment of judgment, respondent Paramount was impleaded for the reason that the prayer therein sought the nullification of the new titles issued

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in the name of respondent Paramount. Inasmuch as a petition for annulment of judgment is classified as an original action that can be filed before the Court of Appeals,17 the said court can admit, by way of an amendment to the petition, new causes of action intimately related to the resolution of the original petition. Hence, respondent Paramount became a necessary party in the petitioners original cause of action seeking a declaration of the existence and validity of the owners duplicate copy of the subject certificate of title in the possession of the latter, and an indispensable party in the action for the declaration of nullity of the titles in the name of respondent Paramount. Indeed, there can be no complete relief that can be accorded as to those already parties, or for a complete determination or settlement of the claim subject of the action, 18 if we do not touch upon the necessary consequence of the nullity of the new duplicate copy of the subject certificate of title. The Rules of Court compels the inclusion of necessary parties when jurisdiction over the person of the said necessary party can be obtained. Non-inclusion of a necessary party when there is an opportunity to include him would mean waiver of the claim against such party.19 Secondly, respondent Paramount has duly consented to put in issue the validity of its titles by invoking in this appeal the reasons espoused by the appellate court and respondent David for the dismissal of the petition to annul the decision of the trial court. In its Memorandum and respondent Davids comment that it adopted, respondent Paramount has not made any jurisdictional objection as regards its inclusion in the appeal to the petition for annulment of judgment, and even participated in the discussion of the merits of the case. Based on the principle of estoppel, respondent Paramount is barred from raising any objection over the power of this Court to nullify its titles. Thirdly, in order for a just, speedy and inexpensive disposition of the case, we must decide on the effect of void duplicate copies of a certificate of title that served as a basis for the sale of the property it represents and the eventual issuance of titles in the name of respondent Paramount. To require another proceeding only for the purpose of annulling the said new titles when the same could be decided in this very petition would promote judicial bureaucracy, a practice abhorred by our legal system. As we have ruled in Gayos v. Gayos20, it is a cherished rule of procedure that a court should always strive to settle the entire controversy in a single proceeding leaving no root or branch to bear the seeds of future litigation. In this case at bar, we simply annulled the decision of the RTC, acting as a land registration court in L.R.C. Record No. 8843, to issue new owners duplicate copies of TCT Nos. T-52537 and T-52538, for lack of jurisdiction. The dispute between petitioner Rexlon and respondent David regarding ownership over the parcels of land will have to be threshed out or determined in a more appropriate proceeding. In a petition for the issuance of a new owners duplicate copy of a certificate of title in lieu of one allegedly lost, the RTC, acting only as a land registration court, has no jurisdiction to pass upon the question of actual ownership of the land covered by the lost owners duplicate copy of the certificate of title. Possession of a lost owners duplicate copy of a certificate of title is not necessarily equivalent to ownership of the land covered by it. The certificate of title, by itself, does not vest ownership; it is merely an evidence of title over a particular property.21 WHEREFORE, the petition for review is hereby GRANTED, and the assailed Decision of the Court of Appeals dismissing the Petition for Annulment of Judgment is REVERSED and SET ASIDE. The Decision dated March 1, 1994 of the Regional Trial Court of Cavite, Branch 16, in LRC Rec. No. 8843, is ANNULLED; and the new owners duplicate copies of TCT Nos. T-72537 and T-72538 in the name of Alex L. David issued by virtue of the said Decision of the Regional Trial Court as well as the replacement thereof, namely, TCT Nos. T-525664 and T-525665 in the name of Paramount Development Corporation of the Philippines, are hereby declared VOID. No pronouncement as to costs. SO ORDERED.

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Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 154409 June 21, 2004

Spouses NOEL and JULIE ABRIGO, petitioners, vs. ROMANA DE VERA, respondent. DECISION PANGANIBAN, J.: Between two buyers of the same immovable property registered under the Torrens system, the law gives ownership priority to (1) the first registrant in good faith; (2) then, the first possessor in good faith; and (3) finally, the buyer who in good faith presents the oldest title. This provision, however, does not apply if the property is not registered under the Torrens system. The Case Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to set aside the March 21, 2002 Amended Decision2 and the July 22, 2002 Resolution 3 of the Court of Appeals (CA) in CA-GR CV No. 62391. The Amended Decision disposed as follows: "WHEREFORE, the dispositive part of the original D E C I S I O N of this case, promulgated on November 19, 2001, is SET ASIDE and another one is entered AFFIRMING in part and REVERSING in part the judgment appealed from, as follows: "1. Declaring [Respondent] Romana de Vera the rightful owner and with better right to possess the property in question, being an innocent purchaser for value therefor; "2. Declaring Gloria Villafania [liable] to pay the following to [Respondent] Romana de Vera and to [Petitioner-]Spouses [Noel and Julie] Abrigo, to wit: As to [Respondent] Romana de Vera: 1. P300,000.00 plus 6% per annum as actual damages; 2. P50,000.00 as moral damages; 3. P50,000.00 as exemplary damages; 4. P30,000.00 as attorneys fees; and 5. Cost of suit. As to [Petitioner-]Spouses [Noel and Julie] Abrigo: 1. P50,000.00 as moral damages; 2. P50,000.00 as exemplary damages; 3. P30,000.00 as attorneys fees; 4. Cost of suit."4 The assailed Resolution denied reconsideration. The Facts

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Quoting the trial court, the CA narrated the facts as follows: "As culled from the records, the following are the pertinent antecedents amply summarized by the trial court: On May 27, 1993, Gloria Villafania sold a house and lot located at Banaoang, Mangaldan, Pangasinan and covered by Tax Declaration No. 1406 to Rosenda Tigno-Salazar and Rosita Cave-Go. The said sale became a subject of a suit for annulment of documents between the vendor and the vendees. On December 7, 1993, the Regional Trial Court, Branch 40 of Dagupan City rendered judgment approving the Compromise Agreement submitted by the parties. In the said Decision, Gloria Villafania was given one year from the date of the Compromise Agreement to buy back the house and lot, and failure to do so would mean that the previous sale in favor of Rosenda Tigno-Salazar and Rosita Cave-Go shall remain valid and binding and the plaintiff shall voluntarily vacate the premises without need of any demand. Gloria Villafania failed to buy back the house and lot, so the [vendees] declared the lot in their name. Unknown, however to Rosenda Tigno-Salazar and Rosita Cave-Go, Gloria Villafania obtained a free patent over the parcel of land involved [on March 15, 1988 as evidenced by OCT No. P-30522]. The said free patent was later on cancelled by TCT No. 212598 on April 11, 1996. On October 16, 1997, Rosenda Tigno-Salazar and Rosita Cave-Go, sold the house and lot to the herein [Petitioner-Spouses Noel and Julie Abrigo]. On October 23, 1997, Gloria Villafania sold the same house and lot to Romana de Vera x x x. Romana de Vera registered the sale and as a consequence, TCT No. 22515 was issued in her name. On November 12, 1997, Romana de Vera filed an action for Forcible Entry and Damages against [Spouses Noel and Julie Abrigo] before the Municipal Trial Court of Mangaldan, Pangasinan docketed as Civil Case No. 1452. On February 25, 1998, the parties therein submitted a Motion for Dismissal in view of their agreement in the instant case that neither of them can physically take possession of the property in question until the instant case is terminated. Hence the ejectment case was dismissed.5 "Thus, on November 21, 1997, [petitioners] filed the instant case [with the Regional Trial Court of Dagupan City] for the annulment of documents, injunction, preliminary injunction, restraining order and damages [against respondent and Gloria Villafania]. "After the trial on the merits, the lower court rendered the assailed Decision dated January 4, 1999, awarding the properties to [petitioners] as well as damages. Moreover, x x x Gloria Villafania was ordered to pay [petitioners and private respondent] damages and attorneys fees. "Not contented with the assailed Decision, both parties [appealed to the CA]."6 Ruling of the Court of Appeals In its original Decision promulgated on November 19, 2001, the CA held that a void title could not give rise to a valid one and hence dismissed the appeal of Private Respondent Romana de Vera. 7 Since Gloria Villafania had already transferred ownership to Rosenda Tigno-Salazar and Rosita Cave-Go, the subsequent sale to De Vera was deemed void. The CA also dismissed the appeal of Petitioner-Spouses Abrigo and found no sufficient basis to award them moral and exemplary damages and attorneys fees. On reconsideration, the CA issued its March 21, 2002 Amended Decision, finding Respondent De Vera to be a purchaser in good faith and for value. The appellate court ruled that she had relied in good faith on the Torrens title of her vendor and must thus be protected. 8 Hence, this Petition.9 Issues Petitioners raise for our consideration the issues below: "1. Whether or not the deed of sale executed by Gloria Villafania in favor of [R]espondent Romana de Vera is valid.

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"2. Whether or not the [R]espondent Romana de Vera is a purchaser for value in good faith. "3. Who between the petitioners and respondent has a better title over the property in question."10 In the main, the issues boil down to who between petitioner-spouses and respondent has a better right to the property. The Courts Ruling The Petition is bereft of merit. Main Issue: Better Right over the Property Petitioners contend that Gloria Villafania could not have transferred the property to Respondent De Vera because it no longer belonged to her. 11 They further claim that the sale could not be validated, since respondent was not a purchaser in good faith and for value.12 Law on Double Sale The present case involves what in legal contemplation was a double sale. On May 27, 1993, Gloria Villafania first sold the disputed property to Rosenda Tigno-Salazar and Rosita Cave-Go, from whom petitioners, in turn, derived their right. Subsequently, on October 23, 1997, a second sale was executed by Villafania with Respondent Romana de Vera. Article 1544 of the Civil Code states the law on double sale thus: "Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. "Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. "Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith." Otherwise stated, the law provides that a double sale of immovables transfers ownership to (1) the first registrant in good faith; (2) then, the first possessor in good faith; and (3) finally, the buyer who in good faith presents the oldest title.13 There is no ambiguity in the application of this law with respect to lands registered under the Torrens system. This principle is in full accord with Section 51 of PD 1529 14 which provides that no deed, mortgage, lease or other voluntary instrument -- except a will -- purporting to convey or affect registered land shall take effect as a conveyance or bind the land until its registration. 15 Thus, if the sale is not registered, it is binding only between the seller and the buyer but it does not affect innocent third persons.16 In the instant case, both Petitioners Abrigo and respondent registered the sale of the property. Since neither petitioners nor their predecessors (Tigno-Salazar and Cave-Go) knew that the property was covered by the Torrens system, they registered their respective sales under Act 3344. 17 For her part, respondent registered the transaction under the Torrens system18 because, during the sale, Villafania had presented the transfer certificate of title (TCT) covering the property.19 Respondent De Vera contends that her registration under the Torrens system should prevail over that of petitioners who recorded theirs under Act 3344. De Vera relies on the following insight of Justice Edgardo L. Paras: "x x x If the land is registered under the Land Registration Act (and has therefore a Torrens Title), and it is sold but the subsequent sale is registered not under the Land Registration Act but under Act 3344, as amended, such sale is not considered REGISTERED, as the term is used under Art. 1544 x x x."20

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We agree with respondent. It is undisputed that Villafania had been issued a free patent registered as Original Certificate of Title (OCT) No. P-30522.21 The OCT was later cancelled by Transfer Certificate of Title (TCT) No. 212598, also in Villafanias name.22 As a consequence of the sale, TCT No. 212598 was subsequently cancelled and TCT No. 22515 thereafter issued to respondent. Soriano v. Heirs of Magali23 held that registration must be done in the proper registry in order to bind the land. Since the property in dispute in the present case was already registered under the Torrens system, petitioners registration of the sale under Act 3344 was not effective for purposes of Article 1544 of the Civil Code. More recently, in Naawan Community Rural Bank v. Court of Appeals ,24 the Court upheld the right of a party who had registered the sale of land under the Property Registration Decree, as opposed to another who had registered a deed of final conveyance under Act 3344. In that case, the "priority in time" principle was not applied, because the land was already covered by the Torrens system at the time the conveyance was registered under Act 3344. For the same reason, inasmuch as the registration of the sale to Respondent De Vera under the Torrens system was done in good faith, this sale must be upheld over the sale registered under Act 3344 to Petitioner-Spouses Abrigo. Radiowealth Finance Co. v. Palileo 25 explained the difference in the rules of registration under Act 3344 and those under the Torrens system in this wise: "Under Act No. 3344, registration of instruments affecting unregistered lands is without prejudice to a third party with a better right. The aforequoted phrase has been held by this Court to mean that the mere registration of a sale in ones favor does not give him any right over the land if the vendor was not anymore the owner of the land having previously sold the same to somebody else even if the earlier sale was unrecorded. "The case of Carumba vs. Court of Appeals26 is a case in point. It was held therein that Article 1544 of the Civil Code has no application to land not registered under Act No. 496. Like in the case at bar, Carumba dealt with a double sale of the same unregistered land. The first sale was made by the original owners and was unrecorded while the second was an execution sale that resulted from a complaint for a sum of money filed against the said original owners. Applying [Section 33], Rule 39 of the Revised Rules of Court,27 this Court held that Article 1544 of the Civil Code cannot be invoked to benefit the purchaser at the execution sale though the latter was a buyer in good faith and even if this second sale was registered. It was explained that this is because the purchaser of unregistered land at a sheriffs execution sale only steps into the shoes of the judgment debtor, and merely acquires the latters interest in the property sold as of the time the property was levied upon. "Applying this principle, x x x the execution sale of unregistered land in favor of petitioner is of no effect because the land no longer belonged to the judgment debtor as of the time of the said execution sale."28 Petitioners cannot validly argue that they were fraudulently misled into believing that the property was unregistered. A Torrens title, once registered, serves as a notice to the whole world. 29 All persons must take notice, and no one can plead ignorance of the registration.30 Good-Faith Requirement We have consistently held that Article 1544 requires the second buyer to acquire the immovable in good faith andto register it in good faith.31 Mere registration of title is not enough; good faith must concur with the registration.32We explained the rationale in Uraca v. Court of Appeals,33 which we quote: "Under the foregoing, the prior registration of the disputed property by the second buyer does not by itself confer ownership or a better right over the property. Article 1544 requires that such registration must be coupled with good faith. Jurisprudence teaches us that (t)he governing principle is primus tempore, potior jure (first in time, stronger in right). Knowledge gained by the first buyer of the second sale cannot defeat the first buyers rights except where the second buyer registers in good faith the second sale ahead of the first, as provided by the Civil Code. Such knowledge of the first buyer does not bar her from availing of her rights under the law, among them, to register first her purchase as against the second buyer. But inconverso, knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register the second sale, since such knowledge taints his prior registration with bad faith. This is the price exacted by Article 1544 of the Civil Code for the second buyer being able to displace the first buyer; that before the second buyer can obtain priority over the first, he must show that he acted in good faith throughout (i.e. in ignorance of the first sale and of the first buyers rights) ---- from the time of acquisition until the title is transferred to him by registration, or failing registration, by delivery of possession."34 (Italics supplied)

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Equally important, under Section 44 of PD 1529, every registered owner receiving a certificate of title pursuant to a decree of registration, and every subsequent purchaser of registered land taking such certificate for value and in good faith shall hold the same free from all encumbrances, except those noted and enumerated in the certificate.35 Thus, a person dealing with registered land is not required to go behind the registry to determine the condition of the property, since such condition is noted on the face of the register or certificate of title.36 Following this principle, this Court has consistently held as regards registered land that a purchaser in good faith acquires a good title as against all the transferees thereof whose rights are not recorded in the Registry of Deeds at the time of the sale.37 Citing Santiago v. Court of Appeals,38 petitioners contend that their prior registration under Act 3344 is constructive notice to respondent and negates her good faith at the time she registered the sale. Santiagoaffirmed the following commentary of Justice Jose C. Vitug: "The governing principle is prius tempore, potior jure (first in time, stronger in right). Knowledge by the first buyer of the second sale cannot defeat the first buyer's rights except when the second buyer first registers in good faith the second sale ( Olivares vs. Gonzales, 159 SCRA 33). Conversely, knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register, since such knowledge taints his registration with bad faith (see also Astorga vs. Court of Appeals , G.R. No 58530, 26 December 1984) In Cruz vs. Cabana (G.R. No. 56232, 22 June 1984; 129 SCRA 656), it was held that it is essential, to merit the protection of Art. 1544, second paragraph, that the second realty buyer must act in good faith in registering his deed of sale (citing Carbonell vs. Court of Appeals, 69 SCRA 99, Crisostomo vs. CA, G.R. 95843, 02 September 1992). xxx xxx xxx

"Registration of the second buyer under Act 3344, providing for the registration of all instruments on land neither covered by the Spanish Mortgage Law nor the Torrens System (Act 496), cannot improve his standing since Act 3344 itself expresses that registration thereunder would not prejudice prior rights in good faith (see Carumba vs. Court of Appeals, 31 SCRA 558). Registration, however, by the first buyer under Act 3344 can have the effect of constructive notice to the second buyer that can defeat his right as such buyer in good faith (see Arts. 708-709, Civil Code; see also Revilla vs. Galindez, 107 Phil. 480; Taguba vs. Peralta, 132 SCRA 700). Art. 1544 has been held to be inapplicable to execution sales of unregistered land, since the purchaser merely steps into the shoes of the debtor and acquires the latter's interest as of the time the property is sold ( Carumba vs. Court of Appeals, 31 SCRA 558; see also Fabian vs. Smith, Bell & Co. , 8 Phil. 496) or when there is only one sale (Remalante vs. Tibe, 158 SCRA 138)."39 (Emphasis supplied) Santiago was subsequently applied in Bayoca v. Nogales,40 which held: "Verily, there is absence of prior registration in good faith by petitioners of the second sale in their favor. As stated in the Santiago case, registration by the first buyer under Act No. 3344 can have the effect of constructive notice to the second buyer that can defeat his right as such buyer. On account of the undisputed fact of registration under Act No. 3344 by [the first buyers], necessarily, there is absent good faith in the registration of the sale by the [second buyers] for which they had been issued certificates of title in their names. x x x."41 Santiago and Bayoca are not in point. In Santiago, the first buyers registered the sale under the Torrens system, as can be inferred from the issuance of the TCT in their names. 42 There was no registration under Act 3344. InBayoca, when the first buyer registered the sale under Act 3344, the property was still unregistered land.43 Such registration was therefore considered effectual. Furthermore, Revilla and Taguba, which are cited in Santiago, are not on all fours with the present case. In Revilla, the first buyer did not register the sale.44 In Taguba, registration was not an issue.45 As can be gathered from the foregoing, constructive notice to the second buyer through registration under Act 3344 does not apply if the property is registered under the Torrens system, as in this case. We quote below the additional commentary of Justice Vitug, which was omitted in Santiago. This omission was evidently the reason why petitioner misunderstood the context of the citation therein: "The registration contemplated under Art. 1544 has been held to refer to registration under Act 496 Land Registration Act (now PD 1529) which considers the act of registration as the operative act that binds the land (see Mediante vs. Rosabal, 1 O.G. [12] 900, Garcia vs. Rosabal, 73 Phil 694). On lands covered by the Torrens System, the purchaser acquires such rights and interest as they appear in the certificate of title, unaffected by any prior lien or encumbrance not noted therein. The purchaser is not required to explore farther than what the Torrens title, upon its face, indicates. The only exception is

39

where the purchaser has actual knowledge of a flaw or defect in the title of the seller or of such liens or encumbrances which, as to him, is equivalent to registration (see Sec. 39, Act 496; Bernales vs. IAC, G.R. 75336, 18 October 1988;Hernandez vs. Sales, 69 Phil 744; Tajonera vs. Court of Appeals, L26677, 27 March 1981),"46 Respondent in Good Faith The Court of Appeals examined the facts to determine whether respondent was an innocent purchaser for value.47 After its factual findings revealed that Respondent De Vera was in good faith, it explained thus: "x x x. Gloria Villafania, [Respondent] De Veras vendor, appears to be the registered owner. The subject land was, and still is, registered in the name of Gloria Villafania. There is nothing in her certificate of title and in the circumstances of the transaction or sale which warrant [Respondent] De Vera in supposing that she need[ed] to look beyond the title. She had no notice of the earlier sale of the land to [petitioners]. She ascertained and verified that her vendor was the sole owner and in possession of the subject property by examining her vendors title in the Registry of Deeds and actually going to the premises. There is no evidence in the record showing that when she bought the land on October 23, 1997, she knew or had the slightest notice that the same was under litigation in Civil Case No. D-10638 of the Regional Trial Court of Dagupan City, Branch 40, between Gloria Villafania and [Petitioners] Abrigo. She was not even a party to said case. In sum, she testified clearly and positively, without any contrary evidence presented by the [petitioners], that she did not know anything about the earlier sale and claim of the spouses Abrigo, until after she had bought the same, and only then when she bought the same, and only then when she brought an ejectment case with the x x x Municipal Court of Mangaldan, known as Civil Case No. 1452. To the [Respondent] De Vera, the only legal truth upon which she had to rely was that the land is registered in the name of Gloria Villafania, her vendor, and that her title under the law, is absolute and indefeasible. x x x."48 We find no reason to disturb these findings, which petitioners have not rebutted. Spouses Abrigo base their position only on the general averment that respondent should have been more vigilant prior to consummating the sale. They argue that had she inspected the property, she would have found petitioners to be in possession.49 This argument is contradicted, however, by the spouses own admission that the parents and the sister of Villafania were still the actual occupants in October 1997, when Respondent De Vera purchased the property.50The family members may reasonably be assumed to be Villafanias agents, who had not been shown to have notified respondent of the first sale when she conducted an ocular inspection. Thus, good faith on respondents part stands. WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioners. SO ORDERED.

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Republic of the Philippines SUPREME COURT Manila SPECIAL FIRST DIVISION G.R. No. 166645 January 23, 2007

VICENTE D. HERCE, JR., Petitioner, vs. MUNICIPALITY OF CABUYAO, LAGUNA and JOSE B. CARPENA, Respondents. RESOLUTION YNARES-SANTIAGO, J.: For resolution is the Motion for Reconsideration filed by petitioner Vicente D. Herce, Jr. of the Decision dated November 11, 2005, the dispositive portion of which states: WHEREFORE, the petition is DENIED. The validity of Decree No. 4244 issued on March 3, 1991 in favor of respondent Municipality of Cabuy[a]o, Laguna is AFFIRMED, whereas Decree No. N-216115 and Original Certificate of Title No. 0-2099, issued in the name of petitioner Herce, are declared NULL and VOID. SO ORDERED. In denying the petition, we held that: [I]t is clear that Decree No. 4244 issued in favor of the respondent municipality in 1911 has become indefeasible; as such, petitioner is now barred from claiming the subject land. Although the municipalitys claim of ownership is based on the entry in the Ordinary Decree Book, LRC (CLR) Rec. No. 6763, showing that Decree No. 4244 was issued on March 3, 1911 and that Lot I Plan II-2719 was one of the six parcels of land previously applied for registration by the Municipality of Cabuyao in LRC (GLRO) Record No. 6763, being a public document, the Ordinary Decree Book is prima facie proof of the entries appearing therein. x x x xxxx In the absence of evidence to the contrary, the Ordinary Decree Book, LRC (CLR) Rec. No. 6763, showing that Decree No. 4244 was issued on March 3, 1911, is presumed to have been regularly issued by the accountable public officers who enjoy the legal presumption of regularity in the performance of their functions. Thus, the proceedings that led to the issuance of Decree No. 4244 in favor of the Municipality of Cabuyao cannot be overturned without any countervailing proof to the contrary. x x x xxxx Accordingly, the decree of registration issued by the LRA on January 28, 1997 in favor of petitioner, followed by the issuance of OCT No. O-2099, pertaining to the same parcel of land covered by Decree No. 4244, has no legal basis and should be nullified. In his Motion for Reconsideration, petitioner principally claimed that the entries in the Ordinary Decree Book of the Land Registration Authority (LRA) did not categorically state that the property covered by Decree No. N216115 and OCT No. O-2099 was included in Decree No. 4244. As such, the title issued in his favor could not be declared void, because it had not been shown by competent proof that the lot covered thereby was included in Decree No. 4244. Petitioner thus prayed that: (a) The parcel of land identified as Lot Plan II-2719-A and Cadastral Lot No. 3484 be declared as not included in Decree No. 4244 issued in favor of the Municipality of Cabuyao; (b) The Municipality of Cabuyao be declared as having been barred by laches from recovering the title and ownership over the subject property; (c) Jose B. Carpena should be declared as having been barred by laches from asserting ownership over the subject property; and (d) Decree No. N-216115 and OCT No. 0-2099 issued in favor of petitioner should be declared as valid. In the alternative, petitioner prayed that the assailed Decision be partially reconsidered by remanding the case to the trial court for the determination of whether the property subject of litigation was included in Decree No. 4244 issued in favor of the Municipality of Cabuyao. If found to be included, then OCT No. 0-2099 and Decree No. N-216115 issued in favor of petitioner should be declared as void.

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In its Opposition/Comment to petitioners Motion for Reconsideration, respondents maintained that Lot 1, Plan II-2719-A, the property subject of litigation, was included in Decree No. 4244 issued in the name of the Municipality of Cabuyao, as shown by the following pieces of evidence, to wit: (a) Survey Plan conducted by the Bureau of Lands with notation at the bottom portion indicating that Decree No. 4244 was issued in favor of the Municipality of Cabuyao on March 3, 1911 over the Lot 1, Plan II-2719-A; (b) Certification issued by Mr. Teodoro Bonifacio, then Administrator of the Land Registration Authority, stating that Plan SWO-25706 (II-2719-A) was presented as evidence in the "Carpena case;" (c) Entries in the Ordinary Decree Book of the LRA; (d) LRA Report dated December 2, 1980 narrating the history of the subject property; and (e) Survey Plan over Lot 3484. The motion is partially granted. The inherent power of a court to amend and control its processes and orders includes the right to reverse itself if only to make its findings and conclusions conformable to law and justice. Every court has the power and the corresponding duty to review, amend or reverse its findings and conclusions whenever its attention is seasonably called to any error or defect that it may have committed. We have given the assailed Decision as well as the parties respective evidence and arguments a hard second look. It appearing that we have overlooked certain crucial points and arguments and calling to mind the Courts duty to rectify its mistakes when warranted by the facts and the law at hand, we are constrained to partially grant petitioners motion for reconsideration. After a careful and more circumspect re-evaluation of the evidence before us, we are convinced that the case should be remanded to the trial court. It must be recalled that on August 21, 1998, the trial court issued an Order, the dispositive portion of which states: In view of the foregoing rule, and considering the Report dated December 2, 1980, of the Acting Commissioner of Land Registration x x x that Decree No. 4244 was issued on x x x March 3, 1911 in LRC (GLRO), Record No. 6763, in favor of the Municipality of Cabuyao for apparently the same parcel of land applied for herein, this Court resolves to open the decree of registration issued herein. The Decision of this Court dated May 29, 1957, in Land Registration Case No. N-438, LRC Record No. 10514, insofar as Lot 1, Plan II-2719 only is concerned, and the Order of this Court dated May 3, 1996 are both set aside. Set this case for presentation of evidence for claimant Vicente Herce, Jr. on September 28, 1998 at 8:30 a.m. SO ORDERED.1 From the foregoing Order, it is clear that petitioner must still present evidence to prove his claim over the subject property. Petitioners motion for reconsideration of the Order was denied; hence, he filed a petition for certiorari before the Court of Appeals where the sole issue for resolution was whether the trial court gravely abused its discretion in granting respondent municipalitys motion to reopen the decree of registration. Finding that the latter met all the requirements to reopen the decree of registration, the Court of Appeals denied the petition. At the same time, it ruled that: It should be recalled that the basis of the issuance of the Decree in favor of the petitioner in the case at bar is the May 30, 1980 Decision of Branch I of the Court of First Instance of Laguna in Cad. Case No. N-B-1-LRC Cad No. N-651 instituted by the Republic of the Philippines denying the latters petition for registration which is in turn based on the opposition filed by the petitioner alleging therein that he is the rightful owner of the property having acquired the same from Jose Carpena. Noticeable from the said May 30, 1980 decision however is that the existence of Decree No. 4244 issued on March 3, 1911 was never mentioned. Neither was it mentioned in the petitioners motion to modify decision dated June 26, 1995. In fact, when asked to comment on the petitioners motion to modify decision, the LRA interposed no objection thereto, but with the caveat that "xxx provided it will not adversely affect the government as well as third parties." Of course, the controversy could have easily ended at this point had LRA exercised prudence in checking its records and would have found out the existence of Decree No. 4244 in favor of the Municipality of Cabuyao. As

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it were, however, the motion to modify decision was granted, notwithstanding the fact that the 1957 decision of the trial court directing the issuance of the corresponding decrees over the 44 parcels of land applied for by the group of Juanita Carpena had already attained finality, that decrees over the 42 of these parcels have already been issued, and that the property subject of the present case was not issued a decree in view precisely of the existence of Decree 4244. Clearly, the decree was issued upon the petitioners manifestation before the trial court that it was the rightful owner of the property subject of the controversy and that as transferee and therefore the successor-in-interest of the original applicant Juanita Carpena, he was entitled to the issuance of a decree of registration as decreed in the 1957 Decision of the CFI of Laguna. xxxx In the case at bar, the respondent municipality in its petition/motion to reopen/review decree alleged that as early as March 3, 1911, it has been issued Decree No. 4244 over Lot I Plan II 2719-A (now Lot 3484, Cabuyao Cadastral 455-1). In 1975, petitioner entered his opposition to the case claiming to be the possessor of the said parcel. While the court ruled in favor of the petitioner in the said case and ordered a decree of registration in his favor, it was subsequently found out in a report dated December 2, 1980 that the decree ordered by the court could not be issued as it appears in the Ordinary Decree Book of the LRC Record 6763, a previous decree (Decree 4244) dated March 3, 1911 was already issued in favor of the Municipality which is the same parcel of land sought to be registered by the oppositor in his name. Specifically, the ground relied upon by the municipality in seeking the reopening of the decree of registration is the Report dated December 2, 1980 of the Land Registration Authority in Cadastral Case No. N-B-1, LRC Cadastral No. N-651 that after plotting the technical descriptions of Lot 3484, in the Municipal Index Map, it was found that said lot is more or less identical to the parcel of land described in Plan II-2719-A for which no final decree of registration has as yet been issued. To hold otherwise would result in a situation wherein the LRA would be compelled to issue a decree of registration over a piece of land which has already been decreed and titled in the name of another, if it were found out that indeed, the property has already been earlier titled in the name of the municipality. Considering the existence of two conflicting titles one in favor of petitioner, and the other in the name of the Municipality of Cabuyao, the court properly granted the reopening of the decree of title in order to finally settle the issue of ownership over the property subject of the instant controversy and to end this litigation which has dragged on for decades.2 The foregoing pronouncements of the Court of Appeals do not expressly state that the property covered by OCT No. 0-2099 and Decree No. N-216115 issued in favor of petitioner is included and within the scope of Decree No. 4244 earlier issued in 1911 in favor of respondent municipality. As we have ruled in the assailed Decision, there is no doubt that Decree No. 4244 issued in favor of the municipality has become indefeasible. However, based on the records before us, there is insufficient information to conclude that Decree No. 4244 includes the property covered by OCT No. 0-2099 and Decree No. N-216115. As such, there is a need to remand the case to the trial court for further proceedings. As correctly noted by the Court of Appeals: Considering the existence of two conflicting titles one in favor of petitioner, and the other in the name of the Municipality of Cabuyao, the court properly granted the reopening of the decree of title in order to finally settle the issue of ownership over the property subject of the instant controversy and to end this litigation which has dragged on for decades.3 It is elementary that a court must render judgment confirming the title of the applicant only if it finds that the latter has sufficient title proper for registration. An application for land registration may include two or more parcels of land, but the court may at any time order an application to be amended by striking out one or more of the parcels or order a severance of the application. WHEREFORE, the assailed Decision is PARTIALLY RECONSIDERED. The case is REMANDED to the Regional Trial Court of Laguna, Branch 24 for the determination of whether the subject property is included in Decree No. 4244 issued in favor of the Municipality of Cabuyao. SO ORDERED. CONSUELO YNARES-SANTIAGO Associate Justice WE CONCUR:

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