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G.R. No.

162593

September 26, 2006

REMEGIA Y. FELICIANO, Substituted by the Heirs of REMEGIA Y. FELICIANO, as represented by NILO Y.


FELICIANO, petitioners,
vs.
SPOUSES AURELIO and LUZ ZALDIVAR, respondents.
DECISION
CALLEJO, SR., J.:
Before the Court is the petition for review on certiorari filed by the Heirs of Remegia Y. Feliciano (as represented by
Nilo Y. Feliciano) seeking the reversal of the Decision1 dated July 31, 2003 of the Court of Appeals (CA) in CA-G.R.
CV No. 66511 which ordered the dismissal of the complaint filed by Remegia Y. Feliciano 2 for declaration of nullity of
title and reconveyance of property. The assailed decision of the appellate court reversed and set aside that of the
Regional Trial Court (RTC) of Cagayan de Oro City, Branch 25 in Civil Case No. 92-423.
The factual and procedural antecedents of the present case are as follows:
Remegia Y. Feliciano filed against the spouses Aurelio and Luz Zaldivar a complaint for declaration of nullity of
Transfer Certificate of Title (TCT) No. T-17993 and reconveyance of the property covered therein consisting of 243
square meters of lot situated in Cagayan de Oro City. The said title is registered in the name of Aurelio Zaldivar.
In her complaint, Remegia alleged that she was the registered owner of a parcel of land situated in the District of
Lapasan in Cagayan de Oro City with an area of 444 square meters, covered by TCT No. T-8502. Sometime in
1974, Aurelio, allegedly through fraud, was able to obtain TCT No. T-17993 covering the 243-sq-m portion of
Remegias lot as described in her TCT No. T-8502.
According to Remegia, the 243-sq-m portion (subject lot) was originally leased from her by PioDalman, Aurelios
father-in-law, for P5.00 a month, later increased to P100.00 a month in 1960. She further alleged that she was going
to mortgage the subject lot to Ignacio Gil for P100.00, which, however, did not push through because Gil took back
the money without returning the receipt she had signed as evidence of the supposed mortgage contract. Thereafter,
in 1974, Aurelio filed with the then Court of First Instance of Misamis Oriental a petition for partial cancellation of
TCT No. T-8502. It was allegedly made to appear therein that Aurelio and his spouse Luz acquired the subject lot
from Dalman who, in turn, purchased it from Gil. The petition was granted and TCT No. T-17993 was issued in
Aurelios name.
Remegia denied that she sold the subject lot either to Gil or Dalman. She likewise impugned as falsified the joint
affidavit of confirmation of sale that she and her uncle, NarcisoLabuntog, purportedly executed before a notary
public, where Remegia appears to have confirmed the sale of the subject property to Gil. She alleged that she never
parted with the certificate of title and that it was never lost. As proof that the sale of the subject lot never transpired,
Remegia pointed out that the transaction was not annotated on TCT No. T-8502.
In their answer, the spouses Zaldivar denied the material allegations in the complaint and raised the affirmative
defense that Aurelio is the absolute owner and possessor of the subject lot as evidenced by TCT No. 17993 and Tax
Declaration No. 26864 covering the same. Aurelio claimed that he acquired the subject lot by purchase from Dalman
who, in turn, bought the same from Gil on April 4, 1951. Gil allegedly purchased the subject lot from Remegia and
this sale was allegedly conformed and ratified by the latter and her uncle, NarcisoLabuntog, before a notary public
on December 3, 1965.

After Aurelio obtained a loan from the Government Service Insurance System (GSIS), the spouses Zaldivar
constructed their house on the subject lot. They alleged that they and their predecessors-in-interest had been
occupying the said property since 1947 openly, publicly, adversely and continuously or for over 41 years already.
Aurelio filed a petition for the issuance of a new owners duplicate copy of TCT No. T-8502 because when he asked
Remegia about it, the latter claimed that it had been lost.
After due trial, the RTC rendered judgment in favor of Remegia. It declared that TCT No. 17993 in the name of
Aurelio was null and void for having been obtained through misrepresentation, fraud or evident bad faith by claiming
in his affidavit that Remegias title (TCT No. T-8502) had been lost, when in fact it still existed.
The court a quo explained that "the court that orders a title reconstituted when the original is still existing has not
acquired jurisdiction over the case. A judgment otherwise final may be annulled not only on extrinsic fraud but also
for lack of jurisdiction."3 Aurelios use of a false affidavit of loss, according to the court a quo, was similar to the use
during trial of a forged document or perjured testimony that prevented the adverse party, Remegia, from presenting
her case fully and fairly.
The RTC likewise noted that no public instrument was presented in evidence conveyancing or transferring title to the
subject lot from Remegia to Dalman, the alleged predecessor-in-interest of the spouses Zaldivar. The only evidence
presented by the said spouses was a joint affidavit of confirmation of sale purportedly signed by Remegia and her
uncle, the execution of which was denied by the latters children. The certificate of title of the spouses Zaldivar over
the subject property was characterized as irregular because it was issued in a calculated move to deprive Remegia
of dominical rights over her own property. Further, the spouses Zaldivar could not set up the defense of
indefeasibility of Torrens title since this defense does not extend to a transferor who takes the certificate of title with
notice of a flaw therein. Registration, thus, did not vest title in favor of the spouses; neither could they rely on their
adverse or continuous possession over the subject lot for over 41 years, as this could not prevail over the title of the
registered owner pursuant to Sections 504 and 515 of Act No. 496, otherwise known as The Land Registration Act.
The dispositive portion of the decision of the court a quo reads:
IN THE LIGHT OF THE FOREGOING, and by preponderance of evidence, judgment is hereby rendered canceling
TCT T-17993 and reconveyance of 243 square meters the title and possession of the same, by vacating and turning
over possession of the 243 square meters of the subject property to the plaintiff [referring to Remegia] which is part
of the land absolutely owned by the plaintiff covered by [TCT] T-8502 and to solidarily pay the plaintiff Fifty
Thousand Pesos (P50,000.00) as moral damages; Ten Thousand Pesos (P10,000.00) as exemplary damages; Fifty
Thousand Pesos (P50,000.00) as attorneys fees and Ten Thousand Pesos (P10,000.00) expenses for litigation to
the plaintiff.
SO ORDERED.6
On appeal, the CA reversed the decision of the RTC and ruled in favor of the spouses Zaldivar. In holding that
Remegia sold to Gil a 243 sq m portion of the lot covered by TCT No. T-8502, the appellate court gave credence to
Exhibit "5," the deed of sale presented by the spouses Zaldivar to prove the transaction. The CA likewise found that
Gil thereafter sold the subject property to Dalman who took actual possession thereof. By way of a document
denominated as joint affidavit of confirmation of sale executed before notary public Francisco Velez on December 3,
1965, Remegia and her uncle, NarcisoLabuntog, confirmed the sale by Remegia of the subject lot to Gil and its
subsequent conveyance to Dalman. Per Exhibit "6," the CA likewise found that Dalman had declared the subject lot
for taxation purposes in his name. In 1965, Dalman sold the same to the spouses Zaldivar who, in turn, had it
registered in their names for taxation purposes beginning 1974. Also in the same year, Aurelio filed with the then CFI
of Misamis Oriental a petition for the issuance of a new owners duplicate copy of TCT No. T-8502, alleging that the
owners duplicate copy was lost; the CFI granted the petition on March 20, 1974. Shortly, Aurelio filed with the same
CFI another petition, this time for the partial cancellation of TCT No. T-8502 and for the issuance of a new certificate
of title in Aurelios name covering the subject lot. The CFI issued an order granting the petition and, on the basis
thereof, the Register of Deeds of Cagayan de Oro City issued TCT No. T-17993 covering the subject lot in Aurelios
name.

Based on the foregoing factual findings, the appellate court upheld the spouses Zaldivars ownership of the subject
lot. The CA stated that Remegias claim that she did not sell the same to Gil was belied by Exhibit "5," a deed which
showed that she transferred ownership thereof in favor of Gil. The fact that the said transaction was not annotated
on Remegias title was not given significance by the CA since the lack of annotation would merely affect the rights of
persons who are not parties to the said contract. The CA also held that the joint affidavit of confirmation of sale
executed by Remegia and NarcisoLabuntog before a notary public was a valid instrument, and carried the
evidentiary weight conferred upon it with respect to its due execution. 7 Moreover, the CA found that the notary public
(Atty. Francisco Velez) who notarized the said document testified not only to its due execution and authenticity but
also to the truthfulness of its contents. The contradiction between the testimonies of the children of NarcisoLabuntog
and the notary public (Atty. Velez), according to the CA, casts doubt on the credibility of the former as it was
ostensible that their version of the story was concocted. 8
The CA further accorded in favor of the judge who issued the order for the issuance of the new owners duplicate
copy of TCT No. T-8502 the presumption of regularity in the performance of his official duty. It noted that the same
was issued by the CFI after due notice and hearing.
Moreover, prescription and laches or estoppel had already set in against Remegia. The appellate court pointed out
that TCT No. T-17993 in the name of Aurelio was issued on September 10, 1974, while Remegias complaint for
annulment and reconveyance of property was filed more than 17 years thereafter or on August 10, 1992.
Consequently, Remegias action was barred by prescription because an action for reconveyance must be filed within
10 years from the issuance of the title since such issuance operates as a constructive notice. 9 The CA also noted
that the spouses Zaldivar constructed their house on the subject lot some time in 1974-1975, including a 12-foot
firewall made of hollow blocks, and Remegia took no action to prevent the said construction.
The dispositive portion of the assailed CA decision reads:
WHEREFORE, foregoing premises considered, the December 3, 1999 Decision of the Regional Trial Court of
Misamis Oriental, Cagayan de Oro City, in Civil Case No. 92-423, is REVERSED and SET ASIDE and a new one is
entered DISMISSING the said civil case.
SO ORDERED.10
When their motion for reconsideration was denied by the CA in the assailed Resolution dated February 4, 2004, the
heirs of Remegia (the petitioners) sought recourse to the Court. In their petition for review, they allege that the
appellate court gravely erred
A.
IN NOT DISMISSING THE APPEAL OF THE RESPONDENTS (DEFENDANTS-APELLANTS) MOTU PROPIO OR
EXPUNGING THE BRIEF FOR DEFENDANTS-APPELLANTS FROM RECORD FOR FAILURE TO FILE THE
REQUIRED BRIEF FOR THE DEFENDANTS-APPELLANTS ON TIME BUT BEYOND THE LAST AND FINAL
EXTENDED PERIOD WITHIN WHICH TO FILE THE SAID BRIEF IN VIOLATION TO Section 7 and section 12, rule
44 of the revised rules of court and in contradiction to the ruling enunciated in catalinaroxas, et al. vs. court of
appeals, g.r. no. L-76549, december 10, 1987.
B.
in denying the motion for reconsideration which was filed within the fifteen-day reglementary period in violation to
the rules of court.
c.
in ruling that the court who ordered the issuance of new certificate of title despite existence of owners duplicate
copy that was never lost has jurisdiction over the case.

d.
in concluding that petitioners (Plaintiff-appellee) claim of ownership over the subject lot was barred by estoppel or
laches.
e.
in concluding that the respondents (defendants-appellants) are the absolute owners of the subject lot based on tct
no. 17993 issued to them.
f.
in obviating essential and relevant facts, had it been properly appreciated, would maintain absolute ownership of
petitioner (plaintiff-appellee) over the subject lot as evidenced by existing tct no. t-8502. 11

The Court finds the petition meritorious.

It should be recalled that respondent Aurelio Zaldivar filed with the then CFI of Misamis Oriental a petition for
issuance of a new owners duplicate copy of TCT No.T-8502, alleging that the owners duplicate copy was lost. In
the Order dated March 20, 1974, the said CFI granted the petition and consequently, a new owners duplicate copy
of TCT No. T-8502 was issued.
However, as the trial court correctly held, the CFI which granted respondent Aurelios petition for the issuance of a
new owners duplicate copy of TCT No. T-8502 did not acquire jurisdiction to issue such order. It has been
consistently ruled that "when the owners duplicate certificate of title has not been lost, but is in fact in the
possession of another person, then the reconstituted certificate is void, because the court that rendered the decision
had no jurisdiction. Reconstitution can validly be made only in case of loss of the original certificate."12 In such a
case, the decision authorizing the issuance of a new owners duplicate certificate of title may be attacked any time. 13
The new owners duplicate TCT No. T-8502 issued by the CFI upon the petition filed by respondent Aurelio is thus
void. As Remegia averred during her testimony, the owners duplicate copy of TCT No. T-8502 was never lost and
was in her possession from the time it was issued to her:
Q A while ago, you said that you were issued a title in 1968, can you tell the Honorable Court who was in
possession of the title?
A I am the one in possession and I am the one keeping the title.
Q Even up to the present?
A Yes, Sir.
Q Was there any instance that this title was borrowed from you?
A No, Sir.
Q Was there any instance that this title was lost from your possession?
A No, Sir.

Q Was there any instance that this title was surrendered to the Register of Deeds of the City of Cagayan de Oro?
A No, Sir. There never was an instance There never was an instance that this title was surrendered to the
Register of Deeds.
Q As there any instance that you petitioned to the Honorable Court for the issuance of a new owners duplicate copy
of this title in lieu of the lost copy of said title?
A No, Sir. There was never an instance because this title was never lost. 14
Consequently, the court a quo correctly nullified TCT No. T-17993 in Aurelios name, emanating as it did from the
new owners duplicate TCT No. T-8502, which Aurelio procured through fraud. Respondent Aurelio cannot raise the
defense of indefeasibility of title because "the principle of indefeasibility of a Torrens title does not apply where fraud
attended the issuance of the title. The Torrens title does not furnish a shield for fraud." 15 As such, a title issued based
on void documents may be annulled.16
The appellate courts reliance on the joint affidavit of confirmation of sale purportedly executed by Remegia and her
uncle, NarcisoLabuntog, is not proper. In the first place, respondent Aurelio cannot rely on the joint affidavit of
confirmation of sale to prove that they had validly acquired the subject lot because, by itself, an affidavit is not a
mode of acquiring ownership.17 Moreover, the affidavit is written entirely in English in this wise:
JOINT AFFIDAVIT OF CONFIRMATION OF SALE18
We, NARCISO LABUNTOG and REMEGIA YAPE DE FELICIANO, both of legal age, Filipino citizens and residents
of Lapasan, Cagayan de Oro City, Philippines, after being duly sworn according to law, depose and say:
1. That the late FRANCISCO LABUNTOG is our common ancestor, the undersigned NARCISO LABUNTOG being
one of his sons and the undersigned REMEGIA YAPE DE FELICIANO being the daughter of the late
EmilianaLabuntog, sister of NarcisoLabuntog;
2. That after his death, the late Francisco Labuntog left behind a parcel of land known as Lot No. 2166 C-2 of the
Cagayan Cadastre situated at Lapasan, City of Cagayan de Oro, Philippines which is being administered by the
undersigned NarcisoLabuntog under Tax Decl. No. 27633;
3. That the entire Cadastral Lot No. 2166 C-2 has been subdivided and apportioned among the heirs of the late
Francisco Labuntog, both of the undersigned affiants having participated and shared in the said property,
RemegiaYape de Feliciano having inherited the share of her mother EmilianaLabuntog, sister of NarcisoLabuntog;
4. That on April 4, 1951, RemegiaYape de Feliciano sold a portion of her share to one Ignacio Gil and which portion
is more particularly described and bounded as follows:
"On the North for 13 meters by Agustin Cabaraban;
On the South for 13 meters by Antonio Babanga;
On the East for 18 meters by ClotildeYape; and
On the West for 18meters by Agustin Cabaraban;"
5. That sometime in the year 1960, the said Ignacio Gil conveyed the same portion to PioDalman, who is of legal
age, Filipino citizen and likewise a resident of Lapasan, Cagayan de Oro City and that since 1960 up to the present,
the said PioDalman has been in continuous, open, adverse and exclusive possession of the property acquired by
him in concept of owner;

6. That we hereby affirm, ratify and confirm the acquisition of the above described portion acquired by PioDalman
inasmuch as the same is being used by him as his residence and family home and we hereby request the Office of
the City Assessor to segregate this portion from our Tax Decl. No. 27633 and that a new tax declaration be issued in
the name of PIO DALMAN embracing the area acquired and occupied by him.
IN WITNESS WHEREOF, we have hereunto affixed our signatures on this 3rd day of December, 1965 at Cagayan
de Oro City, Philippines.
(SGD.) NarcisoLabuntog (SGD.)RemegiaYape de Feliciano
NARCISO LABUNTOG REMEGIA YAPE DE FELICIANO
Affiant Affiant
SUBSCRIBED & SWORN to before me this 3rd day of December, 1965 at Cagayan de Oro City, Philippines,
affiants exhibited their Residence Certificates as follows: NARCISO LABUNTOG, A-1330509 dated Oct. 5, 1965 and
REMEGIA YAPE DE FELICIANO, A-1811104 dated Dec. 3, 1965 both issued at Cagayan de Oro City.
(SGD.) ILLEGIBLE
FRANCISCO X. VELEZ
Notary Public
However, based on Remegias testimony, she could not read and understand English:
COURT:
Can you read English?
A No, I cannot read and understand English.
ATTY. LEGASPI:
Q What is your highest educational attainment?
A Grade 3.
Q But you can read and understand Visayan?
A Yes, I can read Visayan, but I cannot understand well idiomatic visayan terms (laglomngavisayan). 19
On this point, Article 1332 of the Civil Code is relevant:
ART.1332. When one of the parties is unable to read, or if the contract is in a language not understood by him, and
mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully
explained to the former.
The principle that a party is presumed to know the import of a document to which he affixes his signature is modified
by the foregoing article. Where a party is unable to read or when the contract is in a language not understood by the
party and mistake or fraud is alleged, the obligation to show that the terms of the contract had been fully explained
to said party who is unable to read or understand the language of the contract devolves on the party seeking to
enforce the contract to show that the other party fully understood the contents of the document. If he fails to
discharge this burden, the presumption of mistake, if not, fraud, stands unrebutted and controlling. 20

Applying the foregoing principles, the presumption is that Remegia, considering her limited educational attainment,
did not understand the full import of the joint affidavit of confirmation of sale and, consequently, fraud or mistake
attended its execution. The burden is on respondents, the spouses Zaldivar, to rebut this presumption. They tried to
discharge this onus by presenting Atty. Francisco Velez (later RTC Judge) who notarized the said document. Atty.
Velez testified that he "read and interpreted" the document to the affiants and he asked them whether the contents
were correct before requiring them to affix their signatures thereon. 21 The bare statement of Atty. Velez that he "read
and interpreted" the document to the affiants and that he asked them as to the correctness of its contents does not
necessarily establish that Remegia actually comprehended or understood the import of the joint affidavit of
confirmation of sale. Nowhere is it stated in the affidavit itself that its contents were fully explained to Remegia in the
language that she understood before she signed the same. Thus, to the mind of the Court, the presumption of fraud
or mistake attending the execution of the joint affidavit of confirmation of sale was not sufficiently overcome.
Moreover, the purported joint affidavit of confirmation of sale failed to state certain important information. For
example, it did not mention the consideration or price for the alleged sale by Remegia of the subject lot to Ignacio
Gil. Also, while it stated that the subject lot was conveyed by Ignacio Gil to PioDalman, it did not say whether the
conveyance was by sale, donation or any other mode of transfer. Finally, it did not also state how the ownership of
the subject lot was transferred from PioDalman to respondent Aurelio or respondents.
Respondents claim that they had been occupying the subject lot since 1947 openly, publicly, adversely and
continuously or for over 41 years is unavailing. In a long line of cases, 22 the Court has consistently ruled that lands
covered by a title cannot be acquired by prescription or adverse possession. A claim of acquisitive prescription is
baseless when the land involved is a registered land following Article 112623 of the Civil Code in relation to Section
46 of Act No. 496 or the Land Registration Act (now Section 4724 of P.D. No 1529):
Appellants claim of acquisitive prescription is likewise baseless. Under Article 1126 of the Civil Code, prescription of
ownership of lands registered under the Land Registration Act shall be governed by special laws. Correlatively, Act
No. 496 provides that no title to registered land in derogation of that of the registered owner shall be acquired by
adverse possession. Consequently, proof of possession by the defendants is both immaterial and inconsequential. 25
Neither can the respondents spouses Zaldivar rely on the principle of indefeasibility of TCT No. 17793 which was
issued on September 10, 1974 in favor of respondent Aurelio. As it is, the subject lot is covered by two different
titles: TCT No. T-8502 in Remegias name covering an area of 444 sq m including therein the subject lot, and TCT
No. 17793 in the name of respondent Aurelio covering the subject lot. Aurelios title over the subject lot has not
become indefeasible, by virtue of the fact that TCT No. T-8502 in the name of Remegia has remained valid. The
following disquisition is apropos:
The claim of indefeasibility of the petitioners title under the Torrens land title system would be correct if previous
valid title to the same parcel of land did not exist. The respondent had a valid title x xx It never parted with it; it never
handed or delivered to anyone its owners duplicate of the transfer certificate of title; it could not be charged with
negligence in the keeping of its duplicate certificate of title or with any act which could have brought about the
issuance of another certificate upon which a purchaser in good faith and for value could rely. If the petitioners
contention as to indefeasibility of his title should be upheld, then registered owners without the least fault on their
part could be divested of their title and deprived of their property. Such disastrous results which would shake and
destroy the stability of land titles had not been foreseen by those who had endowed with indefeasibility land titles
issued under the Torrens system.26
Remegias TCT No. T-8502, thus, prevails over respondent Aurelios TCT No. 17793, especially considering that, as
earlier opined, the latter was correctly nullified by the RTC as it emanated from the new owners duplicate TCT No.
T-8502, which in turn, respondent Aurelio was able to procure through fraudulent means.
Contrary to the appellate courts holding, laches has not set in against Remegia. She merely tolerated the
occupation by the respondents of the subject lot:
Q You also stated in the direct that the defendants in this case, Mr. and Mrs. Zaldivar, were issued a title over a
portion of this land which you described a while ago?

A We knew about that only recently.


Q When was that when you knew that the defendants were issued title over a portion of the land you described a
while ago?
A In June, 1992.
Q In what way did you discover that a portion of the land was titled in the name of the defendants?
A I discovered that my property was titled by Mr. and Mrs. Zaldivar when I went to the Register of Deeds for the
purpose of partitioning my property among my children.
Q And you were surprised why it is titled in their names?
A Yes.
Q Is it not a fact that the defendants have constructed their house on a portion of the land you described a while
ago?
A Yes. I knew that the Zaldivars built a house on the property I described a while ago, but I did not bother because I
know that I can get that property because I own that property.
Q And the defendants constructed that house in 1974-75, am I correct?
A Yes.
Q And as a matter of fact, you have also a house very near to the house that was constructed by the defendants in
this case?
A Yes.
Q Can you tell us what is the distance between your house and the house constructed by the defendants in 1974?
A They are very near because they constructed their house in my lot.
Q How many meters, more or less?
A It is very near, very close.
Q When they constructed their house, meaning the defendants, did you not stop the defendants from the
construction?
A I did not bother in stopping the Zaldivars in constructing the house because I am certain that I can get the land
because I own the land.
Q Aside from not protesting to the construction, did you not bring this matter to the attention of the barangay captain
or to the police authorities?
A No, because I did not bring this matter to the barangay captain nor to the police authorities. It is only now that we
discovered that it is already titled.
Q When you said now, it is in 1992?
A Yes.

Q Is it not a fact that after the house was finished the defendants and their family resided in that house which they
constructed?
A Yes, after the house was finished, they resided in that house.
Q As a matter of fact, from that time on up to the present, the defendants are still residing in that house which they
constructed in 1974 or 1975, am I correct?
A Yes.
Q As a matter of fact also the defendants fenced the lot in which their house was constructed with hollow blocks, am
I correct?
A Yes, the house of the Zaldivars was fenced by them with hollow blocks and I did not stop them to avoid trouble.
Q As a matter of fact, the boundary between your house and the house of Zaldivar, there was constructed a firewall
made of hollow blocks about twelve feet in height, am I correct?
A Yes.
Q Such that you cannot see their house and also the Zaldivars cannot see your house because of that high firewall,
am I correct?
A We can still see each other because the firewall serves as the wall of their house.
Q When did the Zaldivars construct that hollow blocks fence? After the house was finished?
A I cannot remember.
Q But it could be long time ago?
ATTY. VEDAD:
Q That would be repetitious. She answered she could not remember.
ATTY. LEGASPI:
Q It could be many years ago?
A I cannot remember when they constructed the fence.
Q Did you [file] any protest or complaint when the Zaldivars constructed the hollow blocks fence?
A No.
Q Neither did you bring any action in court or with the barangay captain or the police authorities when the Zaldivars
constructed that hollow blocks fence?
A No, I did not complain the fencing by the Zaldivars. Only now that we know that we bring this matter to the
barangay captain.
Q And in the [office of the] barangay captain, you were able to meet the defendants, am I correct?

A No. When we went to the barangay captain, the Zaldivars did not appear there; therefore, we hired a lawyer and
filed this case.27
Case law teaches that if the claimants possession of the land is merely tolerated by its lawful owner, the latters
right to recover possession is never barred by laches:
As registered owners of the lots in question, the private respondents have a right to eject any person illegally
occupying their property. This right is imprescriptible. Even if it be supposed that they were aware of the petitioners
occupation of the property, and regardless of the length of that possession, the lawful owners have a right to
demand the return of their property at any time as long as the possession was unauthorized or merely tolerated, if at
all. This right is never barred by laches.28
Nonetheless, the Court is not unmindful of the fact that respondents had built their house on the subject lot and,
despite knowledge thereof, Remegia did not lift a finger to prevent it. Article 453 of the Civil Code is applicable to
their case:
ART. 453. If there was bad faith, not only on the part of the person who built, planted or sowed on the land of
another, but also on the part of the owner of such land, the rights of one and the other shall be the same as though
both had acted in good faith.
It is understood that there is bad faith on the part of the landowner whenever the act was done with his knowledge
and without opposition on his part.
Under the circumstances, respondents and Remegia are in mutual bad faith and, as such, would entitle the former
to the application of Article 448 of the Civil Code governing builders in good faith:
ART. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right
to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles
54629 and 548,30 or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the
proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than
that of the building or trees. In such a case, he shall pay reasonable rent, if the owner of the land does not choose to
appropriate the building or trees after the proper indemnity. The parties shall agree upon the terms of the lease and
in case of disagreement, the court shall fix the terms thereof.
Following the above provision, the owner of the land on which anything has been built, sown or planted in good faith
shall have the right to appropriate as his own the building, planting or sowing, after payment to the builder, planter or
sower of the necessary and useful expenses, and in the proper case, expenses for pure luxury or mere pleasure. 31
The owner of the land may also oblige the builder, planter or sower to purchase and pay the price of the land. If the
owner chooses to sell his land, the builder, planter or sower must purchase the land, otherwise the owner may
remove the improvements thereon. The builder, planter, or sower, however, is not obliged to purchase the land if its
value is considerably more than the building, planting or sowing. In such case, the builder, planter or sower must
pay rent to the owner of the land. If the parties cannot come to terms over the conditions of the lease, the court must
fix the terms thereof. 32
The right to choose between appropriating the improvement or selling the land on which the improvement of the
builder, planter or sower stands, is given to the owner of the land,33 Remegia, in this case, who is now substituted by
petitioners as her heirs.
Consequently, the petitioners are obliged to exercise either of the following options: (1) to appropriate the
improvements, including the house, built by the respondents on the subject lot by paying the indemnity required by
law, or (2) sell the subject lot to the respondents. Petitioners cannot refuse to exercise either option and compel
respondents to remove their house from the land. 34 In case petitioners choose to exercise the second option,
respondents are not obliged to purchase the subject lot if its value is considerably more than the improvements

thereon and in which case, respondents must pay rent to petitioners. If they are unable to agree on the terms of the
lease, the court shall fix the terms thereof.
In light of the foregoing disquisition, the Court finds it unnecessary to resolve the procedural issues raised by
petitioners.
WHEREFORE, the petition is GRANTED. The Decision dated July 31, 2003 and Resolution dated February 4, 2004
of the Court of Appeals in CA-G.R. CV No. 66511 are REVERSED and SET ASIDE. The Decision dated December
3, 1999 of the Regional Trial Court of Cagayan de Oro City, Branch 25 in Civil Case No. 92-423 is REINSTATED
with the MODIFICATION that petitioners are likewise ordered to exercise the option under Article 448 of the Civil
Code.
SO ORDERED.

G.R. No. 170677

July 31, 2013

VSD REALTY & DEVELOPMENT CORPORATION, Petitioner,


vs.
UNIWIDE SALES, INC. and DOLORES BAELLO TEJADA, Respondents.
RESOLUTION
PERALTA, J.:
This is a motion for reconsideration of the Decision1 dated October 24, 2012, the dispositive portion of which reads:
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated May 30, 2005 and its
Resolution dated December 6, 2005 in CA-G.R. 2V No. 69824 are REVERSED and SET ASIDE. The Decision of
the Regional Trial Court of Caloocan City, Branch 126, in Civil Case No. C-16933 is REINSTATED with
MODIFICATION as follows:
(1) Paragraph 1 of the dispositive portion of the Decision dated October 2, 2000 of the Regional Trial Court of
Caloocan City, Branch 126, in Civil Case No. C-16933, is deleted;
(2) Respondent Dolores Baello and all persons/entities claiming title under her, including respondent Uniwide Sales,
Inc., are ordered to convey and to return the property or the lot covered by TCT No. T-285312 to petitioner VSD
Realty and Development Corporation upon finality of this Decision;
(3) Respondent Dolores Baello is ordered to pay just and reasonable compensation for the occupancy and use of
the land of petitioner VSD Realty and Development Corporation in the amount of P58,333.30 per month from
September 12, 1994 until the Decision is final and executory, with legal interest of six percent (6%) per annum
reckoned from the filing of the Complaint on June 8, 1995 until the finality of this Decision. Thereafter, respondent
Uniwide Sales, Inc. is jointly and severally liable with Dolores Baello for the payment to petitioner VSD Realty and
Development Corporation of monthly rental in the amount of P58,333.30 from the finality of this Decision until the
land is actually vacated, with twelve percent (12%) interest per annum.
(4) The award of attorney's fees is deleted.
No costs.
SO ORDERED.2
We recapitulate the facts. On June 8, 1995, petitioner VSD Realty and Development Corporation (VSD) filed a
Complaint for annulment of title and recovery of possession of property against respondents Uniwide Sales, Inc.
(Uniwide) and Dolores Baello3 with the Regional Trial Court (RTC) of Caloocan City, Branch 126 (trial court).
Petitioner sought the nullification of Transfer Certificate of Title (TCT) No. (35788) 12754 in the name of Dolores
Baello and the recovery of possession of property that is being occupied by Uniwide by virtue of a contract of lease
with Dolores Baello.
Petitioner VSD alleged that it is the registered owner of a parcel of land in Caloocan City, with an area of 2,835.30
square meters, more or less, and covered by TCT No. T-285312 4 of the Register of Deeds of Caloocan City. VSD
bought the said property from Felisa D. Bonifacio, whose title thereto, TCT No. 265777, was registered by virtue of
an Order5 dated October 8, 1992 authorizing the segregation of the same in Land Registration Commission (LRC)
Case No. C-3288. Petitioner also alleged that its right to the subject property and the validity and correctness of the
technical description and location of the property are duly established in LRC Case No. C-3288. 6 Petitioner alleged
that its title, TCT No. 285312, is the correct, valid and legal document that covers the subject property, since it is the
result of land registration proceedings in accordance with law.

Petitioner alleged that respondent Baellos title, TCT No. 35788, covering the same property, is spurious and can
only be the result of falsification and illegal machinations, and has no legal basis to establish any right over the
subject property. Moreover, the technical description of Baellos title is so general that it is impossible to determine
with certainty the exact location of the property covered by it. Petitioner further alleged that the technical description
has no legal basis per the records of the Lands Management Bureau and the Bureau of Lands. It added that
Baellos title described the property to be Lot 3-A of subdivision plan Psd 706, but an examination of Psd 706 shows
that there is no Lot 3-A in plan Psd 706. Petitioner contends that in view of the foregoing reasons, Baello has no
legal basis to claim the subject property, and Baellos title, TCT No. 35788, is spurious and illegal and should be
annulled. Thus, petitioner sought recovery of possession of the subject property and the payment of rent from
respondents.
Respondent Baello filed a Motion to Dismiss on the grounds that the complaint stated no cause of action, and that
the demand for annulment of title and/or conveyance, whether grounded upon the commission of fraud or upon a
constructive trust, has prescribed, and is barred by laches. The trial court denied Baellos motion to dismiss as well
as Baello's subsequent motion for reconsideration for lack of merit.
Thereafter, respondent Baello filed an Answer, alleging that the subject property was bequeathed to her through a
will by her adoptive mother, JacobaGalauran. She alleged that during the lifetime of JacobaGalauran, the subject
property was originally surveyed on January 24-26, 1923 7 and, thereafter, on December 29, 1924.8Baello alleged
that after JacobaGalauran died in 1952, her will was duly approved by the probate court, the Court of First Instance,
Pasig, Rizal. Baello stated that she registered the subject property in her name, and TCT No. (35788) 12754 9 was
issued in her favor on September 6, 1954. In 1959, she had the subject property surveyed. On July 15, 1988, she
entered into a Contract of Lease10 with respondent Uniwide, which erected in full public view the building it presently
occupies. Baello stated that she has been religiously paying realty taxes for the subject property,11 and that the
Complaint should be dismissed as she enjoys a superior right over the subject property because the registration of
her title predates the registration of petitioners title by at least 40 years.
The deposition of respondent Baello, which was taken on October 1, 1998 at the Philippine Consular Office in San
Francisco, California, United States of America, affirmed the same facts stated in her Answer.
On October 2, 2000, the trial court rendered a Decision12 in favor of petitioner. The trial court held that the evidence
for petitioner showed that it is the rightful owner of the subject lot covered by TCT No. 285312 of the Register of
Deeds of Caloocan City. The lot was purchased by petitioner from Felisa D. Bonifacio, who became the owner
thereof by virtue of her petition for segregation of the subject property from Original Certificate of Title (OCT) No.
994 of the Register of Deeds of Rizal in LRC Case No. C-3288. TCT No. 265777 was issued to FelisaBonifacio
pursuant to an Order dated October 8, 1992 by the RTC of Caloocan City in LRC Case No. C-3288. The trial court
stated that it cannot question the Order (in LRC Case No. C-3288) issued by a co-equal court in this respect,
considering that Regional Trial Courts now have the authority to act not only on applications for original registration,
but also over all petitions filed after original registration of title, with power to hear and determine all questions
arising from such applications or petitions.
Moreover, the trial court found that the technical description in respondent Baellos title is not the same as the
technical description in petitioners title, and that a mere reading of the technical description in petitioners title and
that in Baellos title would show that they are not one and the same. The trial court averred that the technical
description of the subject lot in petitioners title is recorded with the Register of Deeds of Caloocan City.13
The trial court stated that in the face of the documentary and testimonial evidence of competent government
witnesses who affirmed petitioners right to the technical description, it was incumbent on respondent Baello to
present credible evidence to overcome the same, but she failed to do so. The trial court held that from the evidence
adduced, petitioner is the registered owner of TCT No. 285312, formerly TCT No. 265777 when Felisa D. Bonifacio
was the registered owner, while respondent Baello is the registered owner of a parcel of land covered by TCT No.
(35788) 12754 and respondent Uniwide is a mere lessee of the land. Baello is the holder of a title over a lot entirely
different and not in any way related to petitioners title and its technical description. Petitioner proved its ownership
and the identity of the subject property that it sought to recover, which is an essential requisite in its action for
annulment of title and recovery of possession of property. The dispositive portion of the trial court's Decision reads:

WHEREFORE, in the light of the foregoing consideration, judgment is hereby rendered ordering the following:
1. Declaring TCT No. 35788 [12754] to be null and void;
2. Defendant Baello and all persons/entity claiming title under her, including UNIWIDE, to convey and to return the
property to plaintiff VSD on the basis of the latter's full, complete, valid and legal ownership;
3. Defendant Baello and UNIWIDE, jointly and severally, to pay a just and reasonable compensation per month
of P1,200,000.00 with legal interest for the occupancy and use of plaintiff's land from September 12, 1994, until
actually vacated by them;
4. Defendants, jointly and severally, to pay attorney's fees of P200,000.00.
SO ORDERED.14
Respondents appealed the trial courts decision to the Court of Appeals, which rendered a Decision dated May 30,
2005 in favor of respondents, and reversed and set aside the Decision of the RTC and dismissed petitioners
complaint.
The Court of Appeals stated that the main issue to be resolved was whether or not there was a valid ground to annul
respondent Baello's TCT No. (35788) 12754 to warrant the reconveyance of the subject property to petitioner. The
Court of Appeals stated that based on existing jurisprudence, a certificate of title may be annulled or cancelled by
the court under the following grounds: (1) when the title is void because (a) it was procured through fraud, (b) it was
issued for a land already covered by a prior Torrens title, (c) it covers land reserved for military, naval or civil public
purposes, and (d) it covers a land which has not been brought under the registration proceeding; (2) when the title is
replaced by one issued under a cadastral proceeding; and (3) when the condition for its issuance has been violated
by the registered owner.15 The Court of Appeals averred that while petitioner sought to annul respondent Baello's
TCT No. 35788 on the ground that the same was spurious, it failed to prove that Baellos title was indeed spurious.
The appellate court also noted that the trial courts decision never mentioned that Baello's title was spurious. It
further stated that any doubt or uncertainty as to the technical description contained in a certificate of title is not a
ground for annulment of title. It held that since there was no legal basis for the annulment of Baello's TCT No.
35788, the trial court erred in declaring the said title null and void. It stated that well settled is the rule that a Torrens
title is generally conclusive evidence of ownership of the land referred to therein, and a strong presumption exists
that it was regularly issued and valid.16 Hence, respondent Baello's TCT No. 35788 enjoys the presumption of
validity.
Petitioner filed a petition for review on certiorari before this Court, raising the following issues: (1) The Court of
Appeals erred in ruling that the burden of proof did not shift to respondents, notwithstanding the overwhelming
evidence presented by petitioner; (2) the Court of Appeals misconstrued petitioner's allegation that the "issuance of
two titles over the same piece of land has not been proved"; (3) the Court of Appeals erred in treating petitioner's
complaint as one only for annulment of title when petitioner also sought reconveyance of the lot in question; (4) the
Court of Appeals erred in ruling that respondent Baello's title is not spurious; and (5) respondent Uniwide is not a
lessee in good faith.17
This Court discussed the pertinent issues raised with the main issues: whether or not petitioner is entitled to recover
possession of the subject property; and, whether or not the title of respondent Baello may be annulled.
The established legal principle in actions for annulment or reconveyance of title is that a party seeking it should
establish not merely by a preponderance of evidence but by clear and convincing evidence that the land sought to
be reconveyed is his.18 Article 43419 of the Civil Code provides that to successfully maintain an action to recover the
ownership of a real property, the person who claims a better right to it must prove two (2) things: first, the identity of
the land claimed, and; second, his title thereto.20 In an action to recover, the property must be identified, and the
plaintiff must rely on the strength of his title and not on the weakness of the defendant's claim. 21

The Court upheld the decision of the trial court that petitioner was able to establish through documentary and
testimonial evidence that the technical description of its Torrens title, embodying the identity of the land claimed,
covers the property that is being occupied by respondent Uniwide by virtue of a lease contract with respondent
Baello, and that a comparison of the technical description of the land covered by the title of petitioner and the
technical description of the land covered by the title of Baello shows that they are not the same. Hence, the Court
granted the petition, and reversed and set aside the Decision of the Court of Appeals and its Resolution denying
petitioners' motion for reconsideration; and the Decision of the RTC was reinstated with modification. The dispositive
portion of the Court's decision has been cited earlier.
Respondent Baello filed a motion for reconsideration22 of the Court's decision on the following grounds:

1) This honorable Court erred in not holding that petitioner VSD's Title (Transfer Certificate of Title No. T-285312) is
null and void and that the same cannot give rise to any claim of ownership or possession over the subject property,
having been derived from the fake and nonexistent Original Certificate of Title (OCT) No. 994 dated 19 April 1917,
which purportedly covered the non-existent Maysilo estate.

2) This honorable Court erred, and deprived respondent Baello of due process, when it made a finding that
respondent Baello's title ([TCT] No. (35788) 12754) does not cover the subject property considering that:
(a) Whether respondent Baello's title covers the subject property was never the issue in this case. In praying for the
annulment of respondent Baello's title, the basic underlying premise and basis of such action is that the two titles,
petitioner VSD's title and respondent Baello's title, cover the same property. Even if VSD's action is considered as
one for reconveyance, the same hinges on the validity of the title of VSD.
(b) A determination of whether a certificate of title's technical description covers a particular area of land is a matter
involving technical expertise, which this Honorable Court does not have. Such a determination can only be resolved
through a survey conducted by a licensed and reputable geodetic engineer.
(c) In any case, records of the case show that respondent Baello was able to establish through positive evidence
that her title covers the subject property.

3) This honorable Court erred in finding that petitioner VSD was able to prove that it has a better right to the subject
property by mere presentation of TCT No. T-28512 registered under its name and by showing that the technical
descriptions contained in TCT No. T-28512 correctly described the subject property. On the contrary, the evidence
presented by petitioner VSD is insufficient to overcome the presumptive title of respondent Baello, who has been in
possession of the subject property for more than fifty years. Thus, this instant action for reconveyance of the subject
property initiated by petitioner VSD must fail.

4) This honorable Court erred in not holding that respondent Baello enjoys a superior right to the disputed property
because the registration of her title predated the registration of petitioner VSD's title by at least 40 years.

5) This honorable Court erred in ordering respondent Baello to pay monthly compensation to petitioner VSD
considering that respondent Baello merely entered into a contract of lease with Uniwide involving land that is
covered by the technical description of her title which this Honorable Court has held to be valid. 23

On February 13, 2013, respondent Baello,24 by counsel, filed a Motion for Leave and Time to File Judicial Affidavit of
Mr. Felino Cortez and Supplemental Motion for Reconsideration (Re: Decision dated 24 October 2012). In the said
motion, respondent Baello contended that subsequent to the filing of her motion for reconsideration, she discovered
new evidence, not available at the time of trial and of the filing of her motion for reconsideration, which established
that petitioner VSD's TCT No. T-285312 cannot be traced to the legitimate and authentic TCT No. 994; hence,
petitioner's title is null and void. Baello's daughter, Bernadette Flores, requested Mr. Felino Cortez, retired and
former Director on Registration of the Land Registration Authority (LRA) to conduct an investigation on petitioner
VSD's TCT No. T-285312. Mr. Cortez examined the documents with the LRA and the Register of Deeds of
Caloocan, and he allegedly found that the copy of FelisaBonifacio's TCT No. 265777/T-1325 that was presented to
the Register of Deeds of Caloocan, for the purpose of the issuance of petitioner VSD's TCT No. T-285312, was
tampered to fraudulently reflect that it was derived from the legitimate and authentic OCT No. 994 dated May 3,
1917. It is alleged that the original microfilm copy retained by the LRA shows that the same TCT No. 265777/T-1325
did not originate from the legitimate and authentic OCT No. 994 dated May 3, 1917, but was instead derived from a
certain OCT No. 994 dated April 19, 1912. In view of this development, and in the interest of justice, and to protect
respondent Baello's constitutional right to property, and to avoid conflicting ruling of this Court, respondent Baello
begged the indulgence of this Court to grant her Motion for Leave and Time to File Judicial Affidavit of Mr. Felino
Cortez and Supplemental Motion for Reconsideration, which motion was granted by the Court. 25

On March 14, 2013, respondent Dolores Baello, by counsel, filed a Supplemental Motion for reconsideration of the
Decision dated October 24, 201226 on the following grounds:

1) FelisaBonifacio's [TCT] No. 265777/T-1325, from which petitioner [VSD] derived its title, is null and void, having
been derived from a fake and non-existent OCT No. 994. This new evidence bolsters respondent Baello's position
that this honorable Court erred in not holding that petitioner VSD's title (TCT No. T-285312) is null and void and
cannot give rise to any claim of ownership or possession over the subject property;

2) This honorable Court seriously erred in finding that respondent Baello's TCT No. (35788) 12754 does not cover
the subject property. A careful examination of respondent Baello's TCT No. (35788) 12754 and petitioner VSD's TCT
No. T-285312 will show that the technical descriptions of the land referred to in those titles both refer to the same
parcel of land;

3) Aside from the manifest irregularities appearing on the face of FelisaBonifacio's TCT No. 265777/T-1325 (from
which petitioner VSD derived its title), FelisaBonifacio's TCT No. 265777/T-1325 cannot be traced back to the
legitimate and authentic OCT No. 994. On the other hand, respondent Baello's TCT No. (35788) 12754 and its
predecessor titles can be traced back to the legitimate and authentic OCT No. 994 dated 3 May 1917. 27
Petitioner VSD was required to file a comment on the motion for reconsideration. In its Comment on the motion for
reconsideration and the supplemental motion for reconsideration, petitioner contends that a valid title can arise even
from an allegedly void title if a buyer in good faith, like petitioner, intervenes; that the alleged nullity of its title cannot
be raised for the first time on appeal; that additional evidence cannot be presented for the first time on appeal, more
so in a motion for reconsideration before this Court; and that respondent Baello failed to prove that her title covers
the subject property, among others.

In the main, respondent Baello contends that the Court erred in not declaring petitioner VSD's TCT No. T-285312 as
null and void, considering that it is derived from FelisaBonifacio's TCT No. 265777/T-1325, which, in turn, is derived
from the false and fictitious OCT No. 994 dated April 19, 1917. The records of this case, however, show that
FelisaBonifacio's TCT No. 265777/T-1325 and VSD's TCT No. T-285312 are derived from the legitimate OCT No.
994 registered on May 3, 1917, which date has been held as the correct date of registration of the said OCT in
Manotok Realty, Inc. v. CLT Realty Development Corporation. 28 In her Motion for Leave and Time to File Judicial
Affidavit of Mr. Felino Cortez and Supplemental Motion for Reconsideration, which the Court granted, respondent
Baello contends that she has additional evidence showing that the copy of FelisaBonifacio's TCT No. 265777/T1325 that was presented to the Register of Deeds of Caloocan, for the purpose of the issuance of petitioner VSD's
TCT No. T-285312, was tampered with to fraudulently reflect that it was derived from the legitimate and authentic
OCT No. 994 dated May 3, 1917. It is alleged that the original microfilm copy retained by the LRA shows that
FelisaBonifacio's TCT No. 265777/T-1325 did not originate from the legitimate and authentic OCT No. 994 dated
May 3, 1917, but was instead derived from OCT No. 994 dated April 19, 1912. Baello cited Manotok Realty, Inc. v.
CLT Realty Development Corporation,29 which allowed the presentation of evidence before a Special Division of the
Court of Appeals to ascertain which of the conflicting claims of title should prevail, even though the case had already
been decided; and the additional evidence was presented in connection with a motion for reconsideration of this
Court's decision.

The Court notes that in Manotok Realty, Inc. v. CLT Realty Development Corporation, 30 the Court pronounced that
there is only one OCT No. 994, which is correctly registered on May 3, 1917, and that any title that traces its source
to OCT No. 994 dated April 17, 1917 is void, for such mother title is inexistent.
The Court recognizes the importance of protecting the country's Torrens system from fake land titles and deeds.
Considering that there is an issue on the validity of the title of petitioner VSD, which title is alleged to be traceable to
OCT No. 994 registered on April 19, 1917, which mother title was held to be inexistent in Manotok Realty, Inc. v. CLT
Realty Development Corporation,31 in the interest of justice, and to safeguard thecorrect titling of properties, a
remand is proper to determine which of the parties derived valid title from the legitimate OCT No. 994 registered on
May 3, 1917. Since this Court is not a trier of facts and not capacitated to appreciate evidence of the first instance,
the Court may remand this case to the Court of Appeals for further proceedings, as it has been similarly tasked in
Manotok Realty, Inc. v. CLT Realty Development Corporation 32 on these bases:
Under Section 6 of Rule 46, which is applicable to original cases for certiorari, the Court may, whenever necessary
to resolve factual issues, delegate the reception of the evidence on such issues to any of its members or to an
appropriate court, agency or office.The delegate need not be the body that rendered the assailed decision.

The Court of Appeals generally has the authority to review findings of fact. Its conclusions as to findings of fact are
generally accorded great respect by this Court. It is a body that is fully capacitated and has a surfeit of experience in
appreciating factual matters, including documentary evidence.
In fact, the Court had actually resorted to referring a factual matter pending before it to the Court of Appeals. In
Republic v. Court of Appeals, this Court commissioned the former Thirteenth Division of the Court of Appeals to hear
and receive evidence on the controversy, more particularly to determine "the actual area reclaimed by the Republic
Real Estate Corporation, and the areas of the Cultural Center Complex which are open spaces and/or areas
reserved for certain purposes, determining in the process the validity of such postulates and the respective
measurements of the areas referred to." The Court of Appeals therein received the evidence of the parties and
rendered a "Commissioners Report" shortly thereafter. Thus, resort to the Court of Appeals is not a deviant
procedure.
1wphi1

The provisions of Rule 32 should also be considered as governing the grant of authority to the Court of Appeals to
receive evidence in the present case. Under Section 2, Rule 32 of the Rules of Court, a court may, motuproprio,
direct a reference to a commissioner when a question of fact, other than upon the pleadings, arises upon motion or
otherwise, in any stage of a case, or for carrying a judgment or order into effect. The order of reference can be
limited exclusively to receive and report evidence only, and the commissioner may likewise rule upon the
admissibility of evidence. The commissioner is likewise mandated to submit a report in writing to the court upon the
matters submitted to him by the order of reference. In Republic, the commissioners report formed the basis of the
final adjudication by the Court on the matter. The same result can obtain herein. 33
Accordingly, the Court hereby remands this case to the Court of Appeals. The Court of Appeals is tasked to hear
and receive evidence, conclude the proceedings and submit to this Court a report on its findings and recommended
conclusions within three (3) months from finality of this Resolution.
1wphi1

In determining which of the conflicting claims of title should prevail, the Court of Appeals is directed to establish,
based on the evidence already on record and other evidence that will be presented in the proceedings before it, the
following matter:
(1) Whether the title of Felisa D. Bonifacio, TCT No. 265777/T-1325, and the title of VSD, TCT No. T-285312, can be
traced back to the legitimate and authentic OCT No. 994 dated May 3, 1917;
(2) Whether Eleuteria Rivera Bonifacio, who allegedly assigned the subject property to Felisa D. Bonifacio, had the
right and interest over the subject property, and whether Eleuteria Rivera Bonifacio was entitled to assign her
alleged rights and interests over the subject property, known as Lot 23-A-4-B-2-A-3-A, Psd 706, covered by OCT
No. 994, to Felisa D. Bonifacio;
(3) Whether the copy ofFelisaBonifacio's TCT No. 265777/T-1325 was tampered with to fraudulently reflect that it
was derived from the legitimate and authentic OCT No. 994 dated May 3, 1917;
(4) Whether respondent Baello's TCT No. (35788) 12754 can be traced back to the legitimate and authentic OCT
No. 994 dated May 3, 1917;
(5) Whether the technical description of the title 'of Baello covers the subject property; and
(6) Such other matters necessary and proper in determining which of the conflicting claims of title should prevail.
WHEREFORE, this case is REMANDED to the Court of Appeals for further proceedings in accordance with the two
preceding paragraphs of this Resolution.
SO ORDERED.

From <http://www.lawphil.net/judjuris/juri2013/jul2013/gr_170677_2013.html>

G.R. No. 179990

October 23, 2013

REPUBLIC OF THE PHILIPPINES, Petitioner,


vs.
DIOSDADA I. GIELCZYK, Respondent.
DECISION
REYES, J.:
The present petition is one for review under Rule 45 of the 1997 Rules of Court. The Republic of the Philippines
petitioner) challenges the Decision1 dated September 21, 2007 of the Court of Appeals CA) in CA-GR. CV No.
70078, affirming the Decision2 of the Regional Trial Court RTC) of Mandaue City, Branch 56, which granted the
application of Diosdada I. Gielczyk (respondent) for the original registration of title of Lot Nos. 3135-A and 3136-A of
Plans Csd-072219-004552 and Csd-072219-004551, both situated in Jugan, Consolacion, Cebu. The petitioner
prays that the Court annuls the CA Decision dated September 21, 2007 in CA-GR. CV No. 70078, and that it should
dismiss Land Registration Commission (LRC) Case No. N-452 for utter lack of merit. 3

Antecedent Facts
On July 17, 1995, the respondent sought the registration under her name of the lands denominated as Lot No.
3135-A and Lot No. 3136-A of Plans Csd-072219-004552 and Csd-072219-004551. Both lands were situated in
Jugan, Consolacion, Cebu.
In her verified application in LRC Case No. N-452, the respondent claimed that she is the owner of the two parcels
of land, which are situated, bounded and specifically described in Plans Csd-072219-004552 and Csd-072219004551,4 to wit:

TECHNICAL DESCRIPTIONS

Lot 2007, Cad. 545-D, identical to lot


3135-A, Csd-072219-004552
(Luisa Ceniza)

A parcel of land (lot 20047, Cad.545-D, identical to lot 3135-A, Csd-072219-004552), being a portion of lot 3135,
Cad. 545-D (new), situated in the Barrio of Jugan, Municipality of Consolacion, Province of Cebu, Island of Cebu.
Bounded on the NE., along line 1-2 by lot 20048 (identical to lot 3135-B, Csd-072219-004552), on the SE., along
line 2-3 by Camino Vicinal Road, on the SW., along line 3-4 by lot 3126, on the NW., along line 4-1 by lot 3136, All
[sic] of Cad. 545-D (New). Beginning at a point marked "1" on plan being S. 83 deg. 17E., 1878.69 m. from BLLM
No. 1, Consolacion, Cebu.
thence S. 61 deg. 20E., 40.69 m. to point 2;
thence S. 26 deg. 14W., 57.80 m. to point 3;
thence N. 61 deg. 26W., 38.40 m. to point 4;
thence N. 23 deg. 59E., 58.02 m.
to point of the beginning. Containing an area of TWO THOUSAND TWO HUNDRED EIGHTY FIVE (2,285)
SQUARE METERS, more or less. All points referred to are indicated on the plan and are marked on the ground as
follows; points 1 and 2 by P.S. cyl. conc. mons. 15x40 cms. and the rest are old P.S. cyl. conc. mons 15x60 cms.
Bearings Grid; date of original survey July 14, 1987-November 11, 1987, and that of the subdivision survey
executed by Geodetic Engineer Norvic S. Abella on November 12, 1993 and approved on May 24, 1994. 5

TECHNICAL DESCRIPTIONS
Lot 20045, Cad. 545-D, identical to
Lot 3136-A, Csd-072219-004551
(ConstancioCeniza)
A parcel of land (lot 20045, Cad.545-D, identical to lot 3136-A, Csd-072219-004551), being a portion of lot 3136,
Cad. 545-D (New), situated in the Barrio of Jugan, Municipality of Consolacion, Province of Cebu, Island of Cebu.
Bounded on the SE., along line 1-2 by lot 3135, on the SW., along line 2-3-4 by lot 3126, on the NW., along line 6-1
by lot 20046, All [sic] of Cad. 545-D (New), on the NE., along line 6-1 by lot 20046 (identical to lot 3136-B, Csd072219-004551). Beginning at a point marked "1" on plan being S. 83 deg. 17E., 1878.69 m. from B.L.L.M. No. 1,
Consolacion, Cebu.
thence S. 23 deg. 59W., 58.02 m. to point 2;
thence N. 65 deg. 10W., 41.39 m. to point 3;
thence N. 35 deg. 15W., 2.55 m. to point 4;
thence N. 20 deg. 43E., 44.05 m. to point 5;

thence N. 20 deg. 44E., 12.48 m. to point 6:


thence S. 65 deg. 37E., 46.79 m.
to point of the beginning. Containing an area of TWO THOUSAND SIX HUNDRED TEN (2,610) SQUARE METERS,
more or less. All points referred to are indicated on the plan and are marked on the ground as follows; points 1 and
6 by P.S. cyl. conc. mons. 15x40 cms. and the rest are old P.S. cyl. conc. mons 15x60 cms. Bearings Grid; date of
original survey July 14, 1987-November 11, 1987, and that of the subdivision survey executed by Geodetic Engineer
Norvic S. Abella on November 19, 1993 and approved on May 26, 1994. 6
The respondent further alleged the following: (a) that the said parcels of land were last assessed for taxation
atP2,400.00; (b) that to the best of her knowledge and belief, there is no mortgage nor encumbrance of any kind
affecting said land, nor any person having interest therein, legal or equitable; (c) that she had been in open,
complete, continuous, and peaceful possession in the concept of an owner over said parcels of land up to the
present time for more than 30 years, including the possession of her predecessors-in-interest; (d) that she acquired
title to said land by virtue of the deeds of absolute sale; and (e) that said land is not occupied. 7
The respondent, as far as known to her, also alleged that the full names and complete addresses of the owners of
all lands adjoining the subject land are the following:
ADJOINING OWNERS OF LOT 3135-A:
North - Lot 3135-B owned by Mrs. Luisa Ceniza
Jugan, Consolacion, Cebu

East - Municipal Road


c/o Municipal Mayor
Consolacion, Cebu

South - Lot 3126 owned by Mr. Rene Pepito


Jugan, Consolacion, Cebu

West - Lot 3136-A owned by the applicant.

ADJOINING OWNERS OF LOT 3136-A:

North - Lot 3136-B, owned by Mr. ConstancioCeniza


Jugan, Consolacion, Cebu

East - Lot 3135-A, owned by the applicant;

South - Lot 3126, owned by Mr. Rogelio M. Pepito


Jugan, Consolacion, Cebu

West - Lot 3138, owned by Mr. Miguel HortiguelaJugan, Consolacion, Cebu 8

To prove her claim, the respondent submitted the following pieces of evidence:
(a) Approved plans of Lot Nos. 3135-A and 3136-A;9
(b) Approved technical descriptions of the same lots;10
(c) Certification from the Chief, Technical Services Section, Department of Environment and Natural Resources
(DENR), Region 7, Central Visayas Lands Management Services in lieu of surveyors certificates; 11
(d) Latest tax declarations of the lots;12
(e) Latest tax clearance of the same lots;13
(f) Deeds of Sale in favor of the respondent;14
(g) Certifications from the Community Environment and Natural Resources Officer (CENRO), Cebu City, that the lots
are alienable and disposable;15 and
(h) Certification from the Chief, Records Section, DENR, Region 7, Cebu City that the same lots are not subject to
public land application.16
Furthermore, when the respondent testified in court, her testimony sought to establish the following:
(i) That the respondent acquired Lot No. 3136-A (which is identical to Lot 20045, and is situated in Jugan,
Consolacion, Cebu, with an area of 2,610 sq m), and Lot No. 3135-A (which is identical to Lot 20047, and is situated
in Jugan, Consolacion, Cebu, with an area of 2,285 sq m) through purchase from ConstancioCeniza and Luisa
Ceniza respectively;17
(ii) That the respondent was never delinquent in paying the taxes for the said lots. In fact the following tax
declarations were issued for Lot No. 3136-A: Tax Dec. No. 01258 for the year 1948; Tax Dec. No. 012459 for the
year 1965; Tax Dec. No. 20846 for the year 1980; Tax Dec. No. 29200 for the year 1981; Tax Dec. No. 04210 for the
year 1985; and Tax Dec. No. 13275 for the year 1989; while the following tax declarations were issued for Lot No.
3135-A: Tax Dec. No. 01670 for the year 1948; Tax Dec. No. 012931 for the year 1965; Tax Dec. No. 021294 for the
year 1968; Tax Dec. No. 25146 for the year 1973; Tax Dec. No. 01411 for the year 1974; Tax Dec. No. 20849 for the
year 1980; Tax Dec. No. 04208 for the year 1985; Tax Dec. No. 13274 for the year 1989; 18
(iii) That the said parcels of land are alienable and disposable and are not covered by subsisting public land
application;19

(iv) That the respondent and her respective predecessors-in-interest had been in possession of Lot No. 3135-A and
Lot No. 3136-A for more than 40 years in the concept of an owner, exclusively, completely, continuously, publicly,
peacefully, notoriously and adversely, and no other person has claimed ownership over the same land; 20 and
(v) That the respondent is a Filipino Citizen and that despite her marriage to an American national, she has retained
her Filipino citizenship.21

The petitioner filed an opposition dated September 18, 1995 to the respondents application for registration of title,
alleging among others:
1) That neither the respondent nor her predecessors-in-interest have been in open, continuous, exclusive, and
notorious possession and occupation of the land in question since June 12, 1945 or prior thereto; 22
(2) That the muniments of title and/or the tax declarations and tax payment receipts of the respondent attached to or
alleged in the application do not constitute competent and sufficient evidence of a bona fide acquisition of the land
applied for or of their open, continuous, exclusive and notorious possession and occupation thereof in the concept
of an owner since June 12, 1945, or prior thereto; and that said muniments of title do not appear to be genuine and
the tax declarations and/or tax payment receipts indicate the pretended possession of the respondent to be of
recent vintage;23
(3) That the respondent can no longer avail of the claim of ownership in fee simple on the basis of Spanish title or
grant since she has failed to file an appropriate application for registration within the period of six months from
February 16, 1976 as required by Presidential Decree (P.D.) No. 892. From the records, the petitioner further
alleged that the instant application was filed on July 7, 1995; 24
(4) That the parcel of land applied for is a portion of the public domain belonging to the petitioner and that the said
parcel is not subject to private appropriation.25
On November 3, 1999, the RTC rendered its Decision26 in favor of the respondent, the dispositive portion of which
provides:
WHEREFORE, from all the foregoing undisputed facts supported by oral and documentary evidence, the Court finds
and so holds that the applicant has registrable title over subject lots, and the same title is hereby confirmed.
Consequently, the Administrator, Land Registration Authority is hereby directed to issue Decree of Registration and
Original Certificate of Title to Lots 3135-A and 3136-A [sic], both situated at Jugan, Consolacion, Cebu in the name
of the applicant DIOSDADA I. GIELCZYK, 44 years old, Filipino, married to Philip James Gielczyk, American
national, resident of No. 4 Noel St., UHV, Paranaque, Metro Manila, as her exclusive paraphernal property.
Upon finality of this judgment, let a corresponding decree of registration and original certificate of title be issued to
subject lot in accordance with Sec. 39, PD 1529.
SO ORDERED.27
Not convinced of the RTCs decision, the petitioner filed an appeal dated August 5, 2002 before the CA, which was
also denied on September 21, 2007,28 the dispositive portion of which provides:
WHEREFORE, the appeal is hereby DENIED and the assailed Decision AFFIRMED in its entirety.29
Thus, the petitioner filed the present Petition for Review under Rule 45 of the 1997 Rules of Court, raising the sole
issue:
Issue

THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN UPHOLDING THE RULING OF THE TRIAL
COURT THAT RESPONDENT WAS ABLE TO PROVE THAT SHE AND HER PREDECESSORS-IN-INTEREST
HAVE BEEN IN OPEN, COMPLETE, CONTINUOUS, NOTORIOUS, EXCLUSIVE AND PEACEFUL POSSESSION
OVER THE LANDS SUBJECT OF THE APPLICATION FOR ORIGINAL REGISTRATION FOR A PERIOD OF OVER
40 YEARS THROUGH MERE TAX DECLARATIONS AND IN THE ABSENCE OF PROOF WHEN THE SUBJECT
LOTS WERE DECLARED ALIENABLE AND DISPOSABLE LANDS OF THE PUBLIC DOMAIN. 30
Our Ruling
It must be noted that the respondent did not file any comment on the petition despite efforts to notify her and her
counsel of record. Thus, in the Resolution31 dated March 30, 2011, this Court resolved to dispense with the
respondents comment and shall decide the instant petition based on available records.
After a thorough study of the records, the Court resolves to grant the petition.
The respondent failed to completely prove that there was an expressed State declaration that the properties in
question are no longer intended for public use, public service, the development of the national wealth and have
been converted into patrimonial property, and to meet the period of possession and occupation required by law.
Section 14 of P.D. No. 1529 or The Property Registration Decree enumerates the persons who may apply for the
registration of title to land, to wit:
Sec. 14. Who may apply. The following persons may file in the proper Court of First Instance an application for
registration of title to land, whether personally or through their duly authorized representatives:
(1) Those who by themselves or through their predecessors-in- interest have been in open, continuous, exclusive
and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide
claim of ownership since June 12, 1945, or earlier. (2) Those who have acquired ownership of private lands by
prescription under the provision of existing laws.
(3) Those who have acquired ownership of private lands or abandoned river beds by right of accession or accretion
under the existing laws.
(4) Those who have acquired ownership of land in any other manner provided for by law.

In the assailed decision granting the respondents application for registration of title, the CA explained that the RTCs
decision was based on Section 14(2) of P.D. No. 1529 and not on Section 14(1) of the same decree. 32 The CA said:
However, a judicious scrutiny of the attendant facts would reveal that the assailed decision of the RTC was based
not on PD No. 1529, Section 14(1), but under Section 14(2) of said issuance. The pertinent portion of the decision is
quoted as follows:
"From the documentary evidence presented and formally offered by the applicant, the Court is convinced that she
and her predecessors-in-interest has (sic) been in open, complete, continuous, notorious, exclusive and peaceful
possession over the lands herein applied for registration of title, for a period of over 40 years, in the concept of an
owner and that applicant has registrable title over same lots in accordance with Sec. 14, PD 1529."

A closer scrutiny will show that the questioned decision was based on PD No. 1529, Section 14(2).
In the case of Republic of the Philippines vs. Court of Appeals and Naguit, it was ruled that:

Did the enactment of the Property Registration Decree and the amendatory P.D. No. 1073 preclude the application
for registration of alienable lands of the public domain, possession over which commenced only after June 12,
1945? It did not, considering Section 14(2) of the Property Registration Decree, which governs and authorizes the
application of "those who have acquired ownership of private lands by prescription under the provisions of existing
laws."

"Prescription is one of the modes of acquiring ownership under the Civil Code. There is a consistent jurisprudential
rule that properties classified as alienable public land may be converted into private property by reason of open,
continuous and exclusive possession of at least thirty (30) years. With such conversion, such property may now fall
within the contemplation of "private lands" under Section 14(2), and thus susceptible to registration by those who
have acquired ownership through prescription. Thus, even if possession of the alienable public land commenced on
a date later than June 12, 1945, and such possession being been [sic] open, continuous and exclusive, then the
possessor may have the right to register the land by virtue of Section 14(2) of the Property Registration Decree."

In the instant case, applicant-appellee was able to present tax declarations dating back from 1948. Although tax
declarations and realty tax payment of property are not conclusive evidence of ownership, nevertheless, they are
good indicia of the 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 the least constructive, possession. They constitute 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 ones sincere and honest desire to obtain title to the property, but it also announces his adverse claim against
the State and all other interested parties, including his intention to contribute to the needed revenues of the
Government. All told, such acts strengthen ones bona fide claim of acquisition of ownership.33 (Citations omitted)

The Court agrees with the CAs finding that the RTCs grant of the respondents application for registration of title
was based on Section 14(2) of P.D. No. 1529 and not on Section 14(1) of the same decree. As the CA, citing
Republic of the Philippines v. Court of Appeals and Naguit, 34 correctly explained, an applicant may apply for
registration of title through prescription under Section 14(2) of P.D. No. 1529, stating that patrimonial properties of
the State are susceptible of prescription and that there is a rich jurisprudential precedents which rule that properties
classified as alienable public land may be converted into private property by reason of open, continuous and
exclusive possession of at least 30 years.35
In Heirs of Mario Malabanan v. Republic,36 the Court further clarified the difference between Section 14(1) and
Section 14(2) of P.D. No. 1529. The former refers to registration of title on the basis of possession, while the latter
entitles the applicant to the registration of his property on the basis of prescription. Registration under the first mode
is extended under the aegis of the P.D. No. 1529 and the Public Land Act (PLA) while under the second mode is
made available both by P.D. No. 1529 and the Civil Code. Moreover, under Section 48(b) of the PLA, as amended
by Republic Act No. 1472, the 30-year period is in relation to possession without regard to the Civil Code, while
under Section 14(2) of P.D. No. 1529, the 30-year period involves extraordinary prescription under the Civil Code,
particularly Article 1113 in relation to Article 1137.37

Indeed, the foregoing jurisprudence clearly shows the basis of the respondents application for registration of title.
However, the petitioner argued that the respondent failed to show proof of an expressed State declaration that the
properties in question are no longer intended for public use, public service, the development of the national wealth
or have been converted into patrimonial property. It pointed out that the certification which the respondent submitted
did not indicate when the lands applied for were declared alienable and disposable. 38

On this point, the Court cannot completely agree with the petitioner. Indeed, the respondent attempted to show proof
as to when the subject lands were declared alienable and disposable. While the RTC and the CA failed to cite the
evidence which the respondent submitted, the Court cannot, in the name of substantial justice and equity, close its
eyes to the September 23, 2004
Certification issued and signed by Fedencio P. Carreon (Carreon), OIC, CENRO, which the respondent attached in
her Appellees brief in the CA,39 as a supplement to her earlier submissions, particularly Annex "G" and Annex "G-1"
or the June 28, 1995 Certifications issued by Eduardo M. Inting, CENRO. 40
Carreons Certification is reproduced here:
Republic of the Philippines
Department of Environment and Natural Resources
COMMUNITY ENVIRONMENT AND
NATURAL RESOURCES OFFICE
Cebu City
23 September 2004
CENRO, Cebu City, Lands Verification
CONSTANCIO CENIZA ET AL (Consolacion, Cebu)
C E R T I F I C AT I O N
TO WHOM IT MAY CONCERN:
This is to certify that per projection conducted by Forester Restituto A. Llegunas a tract of land lots 3135 and
3136, Cad 545-D(New) containing an area of FIFTEEN THOUSAND SIX HUNDRED EIGHTY SEVEN
(15,687) square meters[,] more or less, situated at Jugan, Consolacion, Cebu as shown and described in the
sketch plan at the back hereof as prepared by Geodetic Engineer Aurelio Q. Caa for CONSTANCIO CENIZA
ET AL was found to be within Alienable and Disposable Block I of Land Classification Project No. 28 per L. C.
Map No. 2545 of Consolacion, Cebu certified under Forestry Administrative Order No. 4-1063 dated
September 1, 1965. (Emphasis Supplied)
This is to certify further that the subject area is outside Kotkot-Lusaran Watershed Reservation per
Presidential Proclamation No. 1074 dated Sept. 2, 1997.
This certification is issued upon the request of Mr. ConstancioCeniza for the purpose of ascertaining the land
classification status only and does not entitle him preferential/priority rights of possession until determined by
competent authorities.
FEDENCIO P. CARREON
OIC, Community Environment
& Natural Resources Officer
However, following our ruling in Republic of the Philippines v. T.A.N. Properties, Inc., 41 this CENRO Certification by
itself is insufficient to establish that a public land is alienable and disposable. While the certification refers to

Forestry Administrative Order No. 4-1063 dated September 1, 1965, the respondent should have submitted a
certified true copy thereof to substantiate the alienable character of the land. In any case, the Court does not need
to further discuss whether the respondent was able to overcome the burden of proving that the land no longer forms
part of the public domain to support her application for original land registration because of other deficiencies in her
application.

Indeed, the respondent failed to meet the required period of possession and occupation for purposes of prescription.
From the time of the declaration on September 1, 1965 that the properties in question are purportedly alienable and
disposable up to the filing of the application of the respondent on July 17, 1995, the respondent and her
predecessors-in-interest had possessed and occupied the said properties for only 29 years and 10 months, short of
two months to complete the whole 30-year possession period.

Granting por arguendo that the respondent and her predecessors-in-interest had possessed and occupied the
subject lots since 1948, the Court cannot still tack those years to complete the 30-year possession period since the
said lots were only declared alienable and disposable on September 1, 1965. In Naguit, we ruled that for as long as
the land was declared alienable and disposable, the same is susceptible of prescription for purposes of registration
of imperfect title.42 In Lim v. Republic,43 we further clarified that "while a property classified as alienable and
disposable public land may be converted into private property by reason of open, continuous, exclusive and
notorious possession of at least 30 years, public dominion lands become patrimonial property not only with a
declaration that these are alienable or disposable but also with an express government manifestation that the
property is already patrimonial or no longer retained for public use, public service or the development of national
wealth. And only when the property has become patrimonial can the prescriptive period for the acquisition of
property of the public dominion begin to run."44
While the subject lots were supposedly declared alienable or disposable on September 1, 1965 based on the
Certifications of the CENRO, the respondent still failed to complete the 30-year period required to grant her
application by virtue of prescription.
The respondent failed to present specific acts of ownership to substantiate her claim of open, continuous, exclusive,
notorious and adverse possession in the concept of an owner.
The petitioner contends that the respondent failed to present specific acts of ownership to substantiate the latters
claim of open, continuous, exclusive, notorious and adverse possession in the concept of an owner. Here, the Court
agrees with the petitioners argument.

In Roman Catholic Bishop of Kalibo, Aklan v. Municipality of Buruanga, Aklan, 45 the Court ruled that for an applicant
to ipso jure or by operation of law acquire government grant or vested title to a lot, he must be in open, continuous,
exclusive and notorious possession and occupation of the lot.46 In the said case, the Court clarified what it actually
meant when it said "open, continuous, exclusive and notorious possession and occupation," to wit:
The petitioner submits that even granting arguendo that the entire Lot 138 was not assigned to it during the Spanish
regime or it is not the owner thereof pursuant to the Laws of the Indies, its open, continuous, exclusive and
notorious possession and occupation of Lot 138 since 1894 and for many decades thereafter vests ipso jure or by
operation of law upon the petitioner a government grant, a vested title, to the subject property. It cites Subsection 6
of Section 54 of Act No. 926 and Subsection b of Section 45 of Act No. 2874.
This contention is likewise not persuasive.

One of the important requisites for the application of the pertinent provisions of Act No. 926 and Act No. 2874 is the
"open, continuous, exclusive and notorious possession and occupation" of the land by the applicant. Actual
possession of land consists in the manifestation of acts of dominion over it of such a nature as a party would
naturally exercise over his own property. The phrase "possession and occupation" was explained as follows:
It must be underscored that the law speaks of "possession and occupation." Since these words are separated by the
conjunction and, the clear intention of the law is not to make one synonymous with the order [sic]. Possession is
broader than occupation because it includes constructive possession. When, therefore, the law adds the word
occupation, it seeks to delimit the all-encompassing effect of constructive possession. Taken together with the words
open, continuous, exclusive and notorious, the word occupation serves to highlight the fact that for one to qualify
under paragraph (b) of the aforesaid section, his possession of the land must not be mere fiction.

As this Court stated, through then Mr. Justice Jose P. Laurel, in Lasam v. The Director of Lands:
x xx Counsel for the applicant invokes the doctrine laid down by us in Ramos v. Director of Lands . But it should be
observed that the application of the doctrine of constructive possession in that case is subject to certain
qualifications, and this court was careful to observe that among these qualifications is "one particularly relating to
the size of the tract in controversy with reference to the portion actually in possession of the claimant." While,
therefore, "possession in the eyes of the law does not mean that a man has to have his feet on every square meter
of ground before it can be said that he is in possession," possession under paragraph 6 of Section 54 of Act No.
926, as amended by paragraph (b) of Section 45 of Act No. 2874, is not gained by mere nominal claim. The mere
planting of a sign or symbol of possession cannot justify a Magellan-like claim of dominion over an immense tract of
territory. Possession as a means of acquiring ownership, while it may be constructive, is not a mere fiction. x xx.
x xxx
Possession is open when it is patent, visible, apparent, notorious and not clandestine. It is continuous when
uninterrupted, unbroken and not intermittent or occasional; exclusive when the adverse possessor can show
exclusive dominion over the land and an appropriation of it to his own use and benefit; and notorious when it is so
conspicuous that it is generally known and talked of by the public or the people in the neighborhood.

Use of land is adverse when it is open and notorious.


Indisputably, the petitioner has been in open, continuous, exclusive and notorious possession and occupation of Lot
138-B since 1894 as evidenced by the church structure built thereon. However, the record is bereft of any evidence
that would tend to show that such possession and occupation extended to Lots 138-A and 138-C beginning the
same period. No single instance of the exercise by the petitioner of proprietary acts or acts of dominion over these
lots was established. Its unsubstantiated claim that the construction of the municipal building as well as the
subsequent improvements thereon, e.g., the rural health center, Buruanga community Medicare hospital [sic],
basketball court, Rizal monument and grandstand, was [sic] by its tolerance does not constitute proof of possession
and occupation on its (the petitioners) part. Absent the important requisite of open, continuous, exclusive and
notorious possession and occupation thereon since 1894, no government grant or title to Lots 138-A and 138-C had
vested upon the petitioner ipso jure or by operation of law. Possession under paragraph 6 of section 54 of Act No.
926, as amended by paragraph (b) of section 45 of Act No. 2874, is not gained by mere nominal claim. 47 (Citations
omitted and emphasis supplied)
In sum, a simple claim of "open, continuous, exclusive and notorious possession and occupation" does not suffice.
An applicant for a grant or title over a lot must be able to show that he has exercised acts of dominion over the

property in question. The applicants possession must not be simply a nominal claim where he only plants a sign or
symbol of possession. In other words, his possession of the property must be patent, visible, apparent, notorious
and not clandestine; it should be uninterrupted, unbroken and not intermittent or occasional; it should demonstrate
exclusive dominion over the land and an appropriation of it to his own use and benefit; and it should be
conspicuous, which means generally known and talked of by the public or the people in the neighborhood. 48
The Court held in Cruz v. Court of Appeals, et al.,49 that therein petitioners were able to show clear, competent and
substantial evidence establishing that they have exercised acts of dominion over the property in question. These
acts of dominion were the following:
(a) they constructed permanent buildings on the questioned lot;
(b) they collected rentals;
(c) they granted permission to those who sought their consent for the construction of a drugstore and a bakery;
(d) they collected fruits from the fruit-bearing trees planted on the said land;
(e) they were consulted regarding questions of boundaries between adjoining properties; and
(f) they religiously paid taxes on the property.50
However, in the present petition, the respondent failed to specifically show that she and her predecessors-in-interest
had exercised acts of dominion over the subject lots. Admittedly, the respondents best evidence to prove
possession and ownership were tax declarations and receipts issued in her name or the names of her
predecessors-in-interest, but these tax declarations and receipts are not conclusive evidence of ownership or right
of possession over a piece of land. "Well settled is the rule that tax declarations and receipts are not conclusive
evidence of ownership or of the right to possess land when not supported by any other evidence.

The fact that the disputed property may have been declared for taxation purposes in the names of the applicants for
registration or of their predecessors-in- interest does not necessarily prove ownership. They are merely indicia of a
claim of ownership."51

In the instant case, the respondent failed to show that she or her predecessors-in-interest have exercised acts of
dominion over the said parcels of land. In fact, it was only the respondent who testified to substantiate her
allegations in the application. She did not present anyone else to support her claim of "open, continuous, exclusive
and notorious possession and occupation." Unfortunately, her testimony simply made general declarations without
further proof, to wit:
DIRECT EXAMINATION:
Q - Mrs. Gielczyk, are you the same DiosdadaGielzcyk, the applicant in this case?
A - Yes.
Q - Are you familiar with Lots No. 3135 and 20045, both of Consolacion, Cebu?
A - Yes.
Court:

Excuse me, You can answer in English? You dont need an interpreter?
A - Yes, Your Honor.
Atty. Germino:
Who is the owner of these lots?
A - I am the one.
Q - How large is 20047?
A - It has an area of 2,286 square meters.
Q - How much is the assessed value of Lot 20047?
A - I do not think, P430.00 per square meters is the assessed value reflected in the document. Court:
Is that reflected in the tax declaration?
Atty. Germino:
Yes, Your Honor.
Court:
Then the tax declaration would be the best evidence.
Atty. Germino:
Q - Do you know if there are other persons who are interested whatsoever over the lots you have mentioned?
A - No sir.
Atty. Germino:
Q - Are there liens and encumbrances affecting the lots?
A - No, sir.
Q - Who is in possession of these lots?
A - I am in possession.
Court:
Physically? I thought you are residing in Manila?
A - Because my family is living there in Consolacion and I always come home every month. I have my parents and
brothers there.
Court:

The same property?


A - Near my parents house,Your Honor.
Court:
Proceed.
Atty. Germino:
Q - How long have you been in possession of the lots?
A - Including my predecessors-in-interest, for over a period of 40 years.
Q - What is the nature of your possession?
A - Adverse against the whole world, continous [sic], peaceful, open and uninterrupted.
Q - How did you acquire Lot 20047?
A - I purchased it from Luisa Ceniza.
Q - Do you know how did Luisa Ceniza acquire the same?
A - She inherited it from her father RemigioCeniza.
Q - Do you have a deed of sale in your favor?
A - Yes, I have.52
x xxx
Atty. Germino:
Q - You said that includ[i]ng your predecessors-in-interest, your possession including your predecessors-in-interest
has been for over forty (40) years. Do you have the tax declaration of Lot 20047 since 1948 until the present?
A - Yes.
Q - Showing to you tax declaration No. 01670 in the name of the heirs of RemigioCeniza covering land in
Consolacion for the year 1948, please examine and tell the court whether that is the tax declaration of Lot 20047 for
the year 1948?
A - Yes, this is the one.
x xxx
Atty. Germino:
Q - Showing to you tax declaration No. 012931 in the name of heirs of RemigioCeniza for the year 1965, please
examine the same and tell the Honorable court what relation has that to the tax declaration of lot 20047 for the year
1965?

A - This is the same.


x xxx
Atty. Germino:
Q - Showing to you tax declaration No. 021294 in the name of Luisa and ConstancioCeniza for the year 1968,
please examine and tell the court whether that is the tax declaration of Lot 20047 for the year 1968?
A - Yes, this is the same.
x xxx
Atty. Germino:
Q - Showing to you tax declaration No. [no number was indicated in the TSN] in the name of Luisa Ceniza for the
year 1963 tell the court whether that is the tax declaration for the year 1973? A - Yes, this is the one. 53
In the continuance of her testimony, the respondent added no further information for this Court to conclude that she
indeed exercised specific acts of dominion aside from paying taxes. She testified thus:
x xxx
Atty. Germino:
Q - Mrs. Gielczyk, one of the last lot subject to [sic] your petition is Lot 20045, how large is this lot?
A - 2,610 square meters.
Q - How much is the assess value of this lot?
A - P970.00
Q - Who is in possession of this lot?
A - I am the one.
Q - How long have you been in possession?
A - Including my predecessors-in-interest is [sic] over a period of 40 years.
COURT: (to witness)
Q - Personally, how long have you been in possession of this property?
A - If I remember right, 1985.
ATTY. GERMINO:
Q - How did you acquire lot 20045?
A - I purchased it from ConstancioCeniza.

Q - Do you have a deed of sale in your favor?


A - Yes.
COURT:
We are talking about 3136-A?
ATTY. GERMINO:
Yes, we are through with Lot 3135?
COURT:
This is 3136-A equivalent to Lot 20045. Proceed.
ATTY. GERMINO:
I am showing to you a deed of absolute sale by ConstancioCeniza over lot 3136-A acknowledged before Notary
Public Marino Martillano, as Doc. No. 2637 book 4, series of 1988, please examine this document and tell the Court
if that is the deed of sale?
A - Yes.
x xxx
Q - Are you not delinquent in the payment of taxes for lot 3136-A?
A - No, sir.
Q - Do you have a tax clearances [sic]?
A - Yes, I have.
Q - I am showing to you tax clearance issued by the municipal treasurer of Consolacion, Cebu, is that the tax
clearance you referred to?
A - Yes, sir.
ATTY. GERMINO:
We ask your Honor the tax clearance be marked as double "C".
COURT: Mark it.
x xxx
COURT: (to witness)
Q - You said that including your predecessor-in-interest, your possession of the land applied for is more than 40
years, do you have a Tax Declaration of lot 3136-A from 1948 until the present? A - Yes.

Q - I am showing to you a bunch of Tax Declaration, 6 in all, from the (sic) year 1948, 1965, 1980, 1981, 1985 and
1989, please examine this Tax Declaration and tell us whether these are the Tax Declarations of Lot 3136-A from
1948 until the present in your name?
A - These are the ones.
ATTY. GERMINO:
We ask that the Tax Declaration in bunch be marked as Exhibit double "F" and the succeeding Tax Declaration to be
marked as double "FF-1" up to double "F-5".
COURT:
Mark it.54
The respondents cross-examination further revealed that she and her predecessors-in-interest have not exercised
specific acts of dominion over the properties, to wit:
COURT:
Cross-examination?
FISCAL ALBURO:
May it please the Honorable Court.
COURT:
Proceed.
FISCAL ALBURO:
Q - Mrs. Gielczyk, how many lots are involved in this petition?
A - 2 portions.
Q - How did you acquire this lot [sic]?
A - I purchased it [sic] from ConstancioCeniza.
Q - When was that?
A - If I remember right in 1985 or 1986.
Q- In other words, you srarted [sic] possessing the property since 1985, until the present?
A- Yes.
Q- But you are not in actual occupant [sic] of the property because you are residing in Paranaque?
A- But I have a cousin in Consolacion.
Q- But you are not residing in Consolacion?

A- I used to go back and forth Cebu and Manila.


Q- Who is in charge of your property in Consolacion?
A- My brothers.
Q - In other words, your property is being taken cared of by your brothers?
A - Yes.
FISCAL ALBURO:
That is all, your Honor.
ATTY. GERMINO:
No redirect, your Honor.
COURT: (to witness) By the way, where do you stay often?
A - Usually in Manila.
Q - Who takes care of the property in Mandaue City?
A - My brothers because there are coconut trees and some fruits and he watched it [sic].
Q - Who is using the coconut trees and the fruits? A - Just for consumption, there are few coconuts. 55 (Emphasis
supplied)

From the foregoing testimony of the lone witness (the applicant-respondent herself), the Court can deduce that,
besides intermittently paying the tax dues on Lot No. 3135-A, the respondent did not exercise acts of dominion over
it. Neither can the Court give credence to the respondents claim that her predecessors-in-interest had exercised
dominion over the property since the respondent failed to present any witness who would substantiate her
allegation. The pieces of documentary evidence, specifically the tax declarations and the deeds of absolute sale,
can neither be relied upon because the same revealed no indication of any improvement that would have the Court
conclude that the respondent exercised specific acts of dominion. For instance, the deed of absolute sale simply
said that the improvements on Lot No. 3135-A consisted of two (2) coconut trees, one (1) mango tree, one (1)
caimito tree and one (1) jackfruit tree.56 The tax declarations have not shown any indication supporting the
respondents claim that she exercised specific acts of dominion. 57
As to Lot No. 3136-A, the deed of absolute sale showed that there were 14 coconut trees, eight (8) jackfruit trees,
and a residential building, which was actually possessed by the vendor ConstancioCeniza. Moreover, it was only in
Tax Declaration Nos. 29200, 04210 and 13275 where it was declared that a residential building has been built in Lot
No. 3136-A.58 And based on the records, Tax Declaration No. 29200, where the residential building was first
indicated, is dated 1981. It may be said then that it was only in 1981 when the respondents predecessors-in-interest
exercised specific acts of dominion over Lot No. 3136-A, the period of which consists barely of 14 years. Thus, the
respondent has not completed the required 30 years of "open, continuous, exclusive and notorious possession and
occupation."
Clearly, from the pieces of documentary and testimonial evidence, and considering that the respondent did not
present any other witness to support her claim, the Court has no other recourse but to declare that she has not
presented the premium of evidence needed to award her title over the two parcels of land.

Finally, the Court cannot end this decision without reiterating the final words of former Associate Justice Dante O.
Tinga in the case of Malabanan59. Justice Tinga correctly pointed out the need to review our present law on the
distribution of lands to those who have held them for a number of years but have failed to satisfy the requisites in
acquiring title to such land. Justice Tinga eloquently put the matter before us, thus:
A final word. The Court is comfortable with the correctness of the legal doctrines established in this
decision. Nonetheless, discomfiture over the implications of todays ruling cannot be discounted. For, every untitled
property that is occupied in the country will be affected by this ruling. The social implications cannot be dismissed
lightly, and the Court would be abdicating its social responsibility to the Filipino people if we simply levied the law
without comment.
1wphi1

The informal settlement of public lands, whether declared alienable or not, is a phenomenon tied to long-standing
habit and cultural acquiescence, and is common among the so-called "Third World" countries. This paradigm
powerfully evokes the disconnect between a legal system and the reality on the ground. The law so far has been
unable to bridge that gap. Alternative means of acquisition of these public domain lands, such as through
homestead or free patent, have proven unattractive due to limitations imposed on the grantee in the encumbrance
or alienation of said properties. Judicial confirmation of imperfect title has emerged as the most viable, if not the
most attractive means to regularize the informal settlement of alienable or disposable lands of the public domain, yet
even that system, as revealed in this decision, has considerable limits.

There are millions upon millions of Filipinos who have individually or exclusively held residential lands on which they
have lived and raised their families. Many more have tilled and made productive idle lands of the State with their
hands. They have been regarded for generation by their families and their communities as common law owners.
There is much to be said about the virtues of according them legitimate states. Yet such virtues are not for the Court
to translate into positive law, as the law itself considered such lands as property of the public dominion.

It could only be up to Congress to set forth a new phase of land reform to sensibly regularize and formalize the
settlement of such lands which in legal theory are lands of the public domain before the problem becomes insoluble.
This could be accomplished, to cite two examples, by liberalizing the standards for judicial confirmation of imperfect
title, or amending the Civil Code itself to ease the requisites for the conversion of public dominion property into
patrimonial.
Ones sense of security over land rights infuses into every aspect of well-being not only of that individual, but also to
the person s family. Once that sense of security is deprived, life and livelihood are put on stasis. It is for the political
branches to bring welcome closure to the long pestering problem.60 (Citation omitted and emphasis supplied)

Indeed, the Court can only do as much to bring relief to those who, like herein respondent, wish to acquire title to a
land that they have bought. It is for our lawmakers to write the law amending the present ones and addressing the
reality on the ground, and which this Court will interpret and apply as justice requires.
WHEREFORE in consideration of the foregoing disquisitions, the petition is GRANTED and the Decision dated
September 21, 2007 of the Court of Appeals in CA-G.R. CV No. 70078 is ANNULLED and SET ASIDE.
SO ORDERED.

From <http://www.lawphil.net/judjuris/juri2013/oct2013/gr_179990_2013.html>

THIRD DIVISION
[G.R. No. 149844. October 13, 2004]

MIGUEL CUENCO, Substituted by MARIETTA C. CUYEGKENG, petitioner,


vs. CONCEPCION CUENCO Vda. DE MANGUERRA, respondent.
DECISION
PANGANIBAN, J.:

Inasmuch as the facts indubitably and eloquently show an implied trust in favor of respondent, the Court
of Appeals did not err in affirming the Decision of the Regional Trial Court ordering petitioner to convey
the subject property to her. That Decision satisfied the demands of justice and prevented unjust
enrichment.
The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, challenging the August 22, 2001
Decision[2] of the Court of Appeals (CA) in CA-GR CV No. 54852. The assailed Decision disposed as
follows:
WHEREFORE, the decision appealed from is AFFIRMED.[3]
On the other hand, the Regional Trial Court (RTC) Decision affirmed by the CA disposed as follows:
WHEREFORE, considering that this action is essentially one for reconveyance or enforcement of a trust, judgment is
hereby rendered ordering the substituted defendant Marietta CuencoCuyegkeng to reconvey or transfer, in a duly
registrable public instrument, Lot No 903-A-6 under TCT No. 113781 of the Registry of Deeds of Cebu City, of the
Banilad Estate with an area of 834 square meters, in favor of plaintiff Concepcion CuencoVda. De Manguerra; or should
the substituted defendant, for one reason or another, fail to execute the necessary instrument once the decision becomes
final, the Clerk of Court of this Court (RTC) is hereby instructed, in accordance with the Rules of Court, to prepare and
execute the appropriate and requisite conveyance and instrument in favor of herein plaintiff which, in either case, shall be
registered with the Office of the Register of Deeds of Cebu City.
Without costs in this instance.[4]
The Facts
The facts were summarized by the appellate court as follows:
On September 19, 1970, the [respondent] filed the initiatory complaint herein for specific performance against her uncle
[Petitioner] Miguel Cuenco which averred, inter alia that her father, the late Don Mariano Jesus Cuenco (who became

Senator) and said [petitioner] formed the Cuenco and Cuenco Law Offices; that on or around August 4, 1931, the Cuenco
and Cuenco Law Offices served as lawyers in two (2) cases entitled Valeriano Solon versus Zoilo Solon (Civil Case 9037)
and Valeriano Solon versus Apolonia Solon (Civil Case 9040) involving a dispute among relatives over ownership of lot
903 of the Banilad Estate which is near the Cebu Provincial Capitol; that records of said cases indicate the name of the
[petitioner] alone as counsel of record, but in truth and in fact, the real lawyer behind the success of said cases was the
influential Don Mariano Jesus Cuenco; that after winning said cases, the awardees of Lot 903 subdivided said lot into
three (3) parts as follows:
Lot 903-A: 5,000 [square meters]: Mariano Cuencosattorneys fees
Lot 903-B: 5,000 [square meters]: Miguel Cuencosattorneys fees
Lot 903-C: 54,000 [square meters]: Solons retention
That at the time of distribution of said three (3) lots in Cebu, Mariano Jesus Cuenco was actively practicing law in Manila,
and so he entrusted his share (Lot 903-A) to his brother law partner (the [petitioner]); that on September 10, 1938, the
[petitioner] was able to obtain in his own name a title for Lot 903-A (Transfer Certificate of Title [TCT] RT-6999 [T21108]); that he was under the obligation to hold the title in trust for his brother Marianos children by first marriage; that
sometime in 1947, the Cuenco family was anticipating Marianos second marriage, and so on February 1, 1947, they
partitioned Lot 903-A into six (6) sub-lots (Lots 903-A-1 to 903-A-6) to correspond to the six (6) children of Marianos
first marriage (Teresita, Manuel, Lourdes, Carmen, Consuelo, and Concepcion); that the [petitioner] did not object nor
oppose the partition plan; that on June 4, 1947, the [petitioner] executed four (4) deeds of donation in favor of Marianos
four (4) children: Teresita, Manuel, Lourdes, and Carmen, pursuant to the partition plan (per notary documents 183, 184,
185, 186, Book III, Series 1947 of Cebu City Notary Public Candido Vasquez); that on June 24, 1947, the [petitioner]
executed the fifth deed of donation in favor of Marianos fifth child Consuelo (per notary document 214, Book III, Series
1947 of Cebu City Notary Public Candido Vasquez) (Exhibits 2 to 5); that said five (5) deeds of donation left out
Marianos sixth child Concepcion who later became the [respondent] in this case; that in 1949, [respondent] occupied and
fenced a portion of Lot 903-A-6 for taxation purposes (Exhibit F, Exhibit 6); that she also paid the taxes thereon (Exhibit
G); that her father died on February 25, 1964 with a Last Will and Testament; that the pertinent portion of her fathers Last
Will and Testament bequeaths the lot.
near the Cebu provincial capitol, which were my attorneys fees from my clients, Victoria Rallos and Zoilo Solon,
respectively have already long been disposed of, and distributed by me, through my brother, Miguel, to all my said
children in the first marriage;
That on June 3, 1966, the [petitioner] wrote a letter petitioning the Register of Deeds of Cebu to transfer Lot 903-A-6 to
his name on the ground that Lot 903-A-6 is a portion of Lot 903-A; that on April 6, 1967, the [respondent] requested the
Register of Deeds to annotate an affidavit of adverse claim against the [petitioners] TCT RT-6999 (T-21108) which covers
Lot 903-A; that on June 3, 1967, the Register of Deeds issued TCT 35275 covering Lot 903-A-6 in the name of the
[petitioner] but carrying the earlier annotation of adverse claim; that in 1969, the [petitioner] tore down the wire fence
which the [respondent] constructed on Lot 903-A-6 which compelled the latter to institute the instant complaint dated
August 20, 1970 on September 19, 1970.

On December 5, 1970, the answer with counterclaim dated December 3, 1970 of [petitioner] Miguel Cuenco was filed
where he alleged that he was the absolute owner of Lot 903-A-6; that this lot was a portion of Lot 903-A which in turn
was part of Lot 903 which was the subject matter of litigation; that he was alone in defending the cases involving Lot 903
without the participation of his brother Mariano Cuenco; that he donated five (5) of the six (6) portions of Lot 903-A to
the five (5) children of his brother Mariano out of gratitude for the love and care they exhibited to him (Miguel) during the
time of his long sickness; that he did not give or donate any portion of the lot to the [respondent] because she never visited
him nor took care of him during his long sickness; that he became critically ill on February 11, 1946 and was confined at
the Singians Clinic in Manila and then transferred to Cebu where he nearly died in 1946; that his wife FaraRemia

Ledesma Cuenco had an operation on January 1951 and was confined at the University of Santo Tomas Hospital and John
Hopkins Hospital in the United States; that two of his children died at the University of Santo Tomas Hospital in 1951 and
1952; and that his wife was blind for many months due to malignant hypertension but [respondent] never remembered her
nor did she commiserate with him and his wife in their long period of sorrow.
[Petitioner] Miguel Cuenco took the witness stand as early as September 13, 1974. His self-conducted direct examination
lasted until 1985, the last one on November 22, 1985. Unfortunately, he died [5] before he was able to submit himself for
cross-examination and so his testimony had to be stricken off the record. His only surviving daughter, Marietta
Cuyegkeng, stood as the substitute [petitioner] in this case.She testified that she purchased Lot 903-A-6 (the property
subject matter of this case) from her late father sometime in 1990 and constructed a house thereon in the same year; that
she became aware of this case because her late father used to commute to Cebu City to attend to this case; and that Lot
903-A-6 is in her name per Transfer Certificate of Title #113781 of the Registry of Deeds for Cebu. [6]
Ruling of the Court of Appeals
The CA found respondents action not barred by res judicata, because there was no identity of causes of
action between the Petition for cancellation of adverse claim in L.R.C. Records 5988 and the Complaint
for specific performance to resolve the issue of ownership in Civil Case No. R-11891.
The appellate court further found no reason to disturb the findings of the trial court that respondent has
the legal right of ownership over lot 903-A-6. The CA ruled that the subject land is part of the attorneys
fees of Don Mariano Cuenco, predecessor-in-interest of [Respondent] Concepcion Cuencovda.
deManguerra and [petitioner] merely holds such property in trust for [her], his title there[to]
notwithstanding.
Finally, the CA held that the right of action of respondent has not yet prescribed as she was in possession
of the lot in dispute and the prescriptive period to file the case commences to run only from the time she
acquired knowledge of an adverse claim over [her] possession.
Hence, this Petition.[7]
The Issues
In her Memorandum, petitioner raises the following issues for our consideration:
I.
On question of law, the Court of Appeals failed to consider facts of substance and significance which, if considered,
will show that the preponderance of evidence is in favor of the petitioner.
II.
On question of law, the Court of Appeals failed to appreciate the proposition that, contrary to the position taken by
the trial court, no constructive or implied trust exists between the parties, and neither is the action one for
reconveyance based upon a constructive or implied trust.
III.
On question of law, the Court of Appeals erred in not finding that even where implied trust is admitted to exist the
respondents action for relief is barred by laches and prescription.
IV.

On question of law, the trial court and the appellate court erred in expunging from the records the testimony of
Miguel Cuenco.[8]
This Courts Ruling
The Petition has no merit.
First Issue:
Evaluation of Evidence
Petitioner asks us to appreciate and weigh the evidence offered in support of the finding that Lot 903-A-6
constituted a part of Mariano Cuencos share in the attorneys fees. In other words, she seeks to involve
us in a reevaluation of the veracity and probative value of the evidence submitted to the lower court.
What she wants us to do is contrary to the dictates of Rule 45 that only questions of law may be raised
and resolved in a petition for review. Absent any whimsical or capricious exercise of judgment, and unless
the lack of any basis for the conclusions made by the lower courts be amply demonstrated, the Supreme
Court will not disturb such factual findings.[9]
As a rule, findings of fact of the Court of Appeals affirming those of the trial court are binding and
conclusive. Normally, such factual findings are not disturbed by this Court, to which only questions of law
may be raised in an appeal by certiorari.[10] This Court has consistently ruled that these questions must
involve no examination of the probative value of the evidence presented by the litigants or any of them.
[11]
Emphasizing the difference between the two types of question, it has explained that there is a question
of law in a given case when the doubt or difference arises as to what the law is pertaining to a certain
state of facts, and there is a question of fact when the doubt arises as the truth or the falsity of alleged
facts.[12]
Indeed, after going over the records of the present case, we are not inclined to disturb the factual findings
of the trial and the appellate courts, just because of the insistent claim of petitioner. His witnesses
allegedly testified that Civil Case No. 9040 involving Lot 903 had not been handled by Mariano for
defendants therein -- Apolonia Solon, Zoilo Solon, et al. It has sufficiently been proven, however, that
these defendants were represented by the Cuenco and Cuenco Law Office, composed of Partners
Mariano Cuenco and Miguel Cuenco.
Given as attorneys fees was one hectare of Lot 903, of which two five-thousand square meter portions
were identified as Lot 903-A and Lot 903-B. That only Miguel handled Civil Case No. 9040 does not mean
that he alone is entitled to the attorneys fees in the said cases. When a client employs the services of a
law firm, he does not employ the services of the lawyer who is assigned to personally handle the case.
Rather, he employs the entire law firm.[13] Being a partner in the law firm, Mariano -- like Miguel -- was
likewise entitled[14] to a share in the attorneys fees from the firms clients. Hence, the lower courts finding
that Lot 903-A was a part of Mariano Cuencosattorneys fees has ample support.
Second Issue:
Implied Trust
Petitioner then contends that no constructive or implied trust exists between the parties.
A trust is a legal relationship between one having an equitable ownership in a property and another
having legal title to it.[15]

Trust relations between parties may either be express or implied.[16] Express trusts are created by the
direct and positive acts of the parties, indicated through some writing, deed, will, or words evidencing an
intention to create a trust.[17] On the other hand, implied trusts are those that, without being express, are
deducible from the nature of the transaction as matters of intent[;] or which are superinduced on the
transaction by operation of law as a matter of equity, independently of the particular intention of the
parties. Implied trusts may either be resulting or constructive trusts, both coming into being by operation
of law.[18]
Resulting trusts are presumed to have been contemplated by the parties and are based on the equitable
doctrine that valuable consideration, not legal title, determines the equitable title or interest.[19] These
trusts arise from the nature of or the circumstances involved in a transaction,[20] whereby legal title
becomes vested in one person, who is obligated in equity to hold that title for the benefit of another.
Constructive trusts are created by the construction of equity in order to satisfy the demands of justice and
prevent unjust enrichment. They arise contrary to intention against one who, by fraud, duress or abuse of
confidence, obtains or holds the legal right to property which he ought not, in equity and good
conscience, to hold.[21]
A review of the records shows that indeed there is an implied trust between the parties.
Although Lot 903-A was titled in Miguels name, the circumstances surrounding the acquisition and the
subsequent partial dispositions of this property eloquently speak of the intent that the equitable or
beneficial ownership of the property should belong to Mariano and his heirs.
First, Lot 903-A was one half of the one-hectare portion of Lot 903 given as attorneys fees by a client of
the law firm of Partners Miguel and Mariano Cuenco. It constituted the latters share in the attorneys fees
and thus equitably belonged to him, as correctly found by the CA. That Lot 903-A had been titled in the
name of Miguel gave rise to an implied trust between him and Mariano, specifically, the former holds the
property in trust for the latter. In the present case, it is of no moment that the implied trust arose from the
circumstance -- a share in the attorneys fees -- that does not categorically fall under Articles 1448 to 1456
of the Civil Code. The cases of implied trust enumerated therein does not exclude others established by
the general law of trust.[22]
Second, from the time it was titled in his name in 1938,[23] Lot 903-A remained undivided and
untouched[24] by Miguel. Only on February 3, 1947, did Lourdes Cuenco,[25] upon the instruction of Mariano,
have it surveyed and subdivided into six almost equal portions -- 903-A-1 to 903-A-6. Each portion was
specifically allocated to each of the six children of Mariano with his first wife.[26]
Third, Miguel readily surrendered his Certificate of Title[27] and interposed no objection[28] to the subdivision
and the allocation of the property to Marianos six children, including Concepcion.
Fourth, Marianos children, including Concepcion,[29] were the ones who shouldered the expenses incurred
for the subdivision of the property.
Fifth, after the subdivision of the property, Marianos children -- including Concepcion[30] -- took possession
of their respective portions thereof.
Sixth, the legal titles to five portions of the property were transferred via a gratuitous deed of conveyance
to Marianos five children, following the allocations specified in the subdivision plan prepared for Lourdes
Cuenco.[31]

With respect to Lot 903-A-6 in particular, the existence of Concepcions equitable ownership thereof is
bolstered, not just by the above circumstances, but also by the fact that respondent fenced the portion
allocated to her and planted trees thereon.[32]
More significantly, she also paid real property taxes on Lot 903-A-6 yearly, from 1956 until 1969[33] -- the
year when she was dispossessed of the property. 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.[34] Such realty tax payments constitute proof that the holder has
a claim of title over the property.
Tellingly, Miguel started paying real property taxes on Lot 903-A-6 only on April 4, 1964, [35] after the death
of Mariano.[36] This fact shows that it was only in that year that he was emboldened to claim the property
as his own and to stop recognizing Marianos, and subsequently Concepcions, ownership rights over it. It
was only by then that the one who could have easily refuted his claim had already been silenced by
death. Such a situation cannot be permitted to arise, as will be explained below.
Estoppel
From the time Lot 903-A was subdivided and Marianos six children -- including Concepcion -- took
possession as owners of their respective portions, no whimper of protest from petitioner was heard until
1963. By his acts as well as by his omissions, Miguel led Mariano and the latters heirs, including
Concepcion, to believe that Petitioner Cuenco respected the ownership rights of respondent over Lot
903-A-6. That Mariano acted and relied on Miguels tacit recognition of his ownership thereof is evident
from his will, executed in 1963, which states:
I hereby make it known and declare that x xx all properties which my first wife and I had brought to, or acquired during
our marriage, or which I had acquired during the years I was a widower including jewelry, war damage compensation, and
two other lots also located at Cebu City, one near the South-Western University and the other near the Cebu provincial
capitol, which were my attorneys fees from my clients, Victoria Rallos and Zoilo Solon, respectively have already
long been disposed of, and distributed by me, through my brother, Miguel, to all my said six children in the first
marriage.[37] (emphasis supplied)
Indeed, as early as 1947, long before Mariano made his will in 1963, Lot 903-A -- situated along Juana
Osmea Extension, Kamputhaw, Cebu City,[38] near the Cebu Provincial Capitol -- had been subdivided and
distributed to his six children in his first marriage. Having induced him and his heirs to believe that Lot
903-A-6 had already been distributed to Concepcion as her own, petitioner is estopped from asserting
the contrary and claiming ownership thereof.
The principle of estoppel in pais applies when -- by ones acts, representations, admissions, or silence
when there is a need to speak out -- one, intentionally or through culpable negligence, induces another to
believe certain facts to exist; and the latter rightfully relies and acts on such belief, so as to be prejudiced
if the former is permitted to deny the existence of those facts.[39]
Third Issue:
Laches
Petitioner claims that respondents action is already barred by laches.

We are not persuaded. Laches is negligence or omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to it has either abandoned or declined to assert it.[40] In the
present case, respondent has persistently asserted her right to Lot 903-A-6 against petitioner.
Concepcion was in possession as owner of the property from 1949 to 1969.[41] When Miguel took steps to
have it separately titled in his name, despite the fact that she had the owners duplicate copy of TCT No.
RT-6999 -- the title covering the entire Lot 903-A -- she had her adverse claim annotated on the title in
1967. When petitioner ousted her from her possession of the lot by tearing down her wire fence in 1969,
[42]
she commenced the present action on September 19, 1970,[43] to protect and assert her rights to the
property. We find that she cannot be held guilty of laches, as she did not sleep on her rights.
Fourth Issue:
Expunging of Testimony
Petitioner Cuyegkeng questions the expunging of the direct testimony of Miguel Cuenco. Respondent
points out that this issue was not raised before the CA. Neither had petitioner asked the trial court to
reconsider its Order expunging the testimony. Hence, this issue cannot for the first time be raised at this
point of the appeal. Issues, arguments and errors not adequately and seriously brought below cannot be
raised for the first time on appeal.[44] Basic considerations of due process impel this rule.[45]
WHEREFORE, the Petition is DENIED, and the assailed Decision AFFIRMED. Costs against petitioner.
SO ORDERED.

From <http://sc.judiciary.gov.ph/jurisprudence/2004/oct2004/149844.htm>